Govt takes first step to halt cheat-and-scoot

The government on Thursday refused to lower the threshold for applicability of the Fugitive Economic Offenders Law and said the law will apply to all those who have been declared fugitives in big economic crimes by Indian courts.

The Lok Sabha gave its consent to the Bill, which will now be discussed in the Rajya Sabha before its passage. Once approved by both the houses and assented by the President, the Bill will become an Act and replace the Ordinance promulgated on April 21.

All actions taken under the Ordinance will have the same legal validity once the law is enacted. Empowered by the Ordinance, the Enforcement Directorate has already moved a special court for action against Vijay Mallya and is preparing to do the same against Nirav Modi and Mehul Chowksi, who are alleged perpetrators of the Punjab National Bank scam.

“First we want to catch big offenders. Lowering the threshold will crowd the special courts,” Interim Finance Minister Piyush Goyal said after 19 members participated in the discussion of the Bill. The Bill defines the fugitive economic offender “as an individual who has committed a scheduled offence or offences involving an amount of ₹100 crore or more and has absconded from India or refused to come back to India to avoid facing criminal prosecution in India.”

No relief for offenders

He also made it clear that that Fugitive Economic Offenders Law will be applicable to “any individual who is, or becomes, a fugitive economic offender on or after the date of coming into force of this Act.” It means the Bill will not be effective from a retrospective date. However, this does not provide any relief for offenders such as Mallya, Modi, Chowksi and others who have already been declared fugitive by Indian courts.

There is a provision in the Bill that economic offenders who flee from the country will be brought back, prosecuted and their properties will be confiscated. It seeks to quickly recover the losses to the exchequer or public sector banks in cases of frauds. Among other things, the Bill makes a provision for a Special Court under the Prevention of Money Laundering Act, 2002 to declare a person a Fugitive Economic Offender.

Initiating the debate on the Bill, Nishikant Dubey (BJP) strongly supported the measure, saying it will allow the government to recover the dues from the absconding offenders. He claimed that absconding accused like Mallya, Nirav Modi, and Choksi were “products of the Congress government”, which had “facilitated” their scams.

He alleged that the then Finance Minister P Chidambaram had “tweaked rules” to help certain firms linked to some of these accused days before the BJP government took over in 2014.

Shashi Tharoor (Congress) said there was a significant gap between the government’s “rhetoric and action” and took a dig, saying that Nirav Modi was photographed with Prime Minister Narendra Modi in Davos. The Prime Minister had promised to be a “chowkidar”, he said, and referred to a number of economic offenders who had fled the country.

Treaty with other nations

Some members asked why courts in other countries would honour the orders passed by Indian courts, Goyal mentioned that India has treaties with many countries, which would help in honouring the orders given here. He said the Fugitive Economic Offenders Bill gave power to the agencies to seize properties that are not only in the name of the offender, but ‘benami’assets.

Union Minister Arun Jaitley had, in his Budget for 2018-19, said the government was considering bringing a new law to confiscate the assets of such absconders. The Bill was introduced in the Lok Sabha (Lower House) on March 12, but could not be taken up due to a logjam in Parliament over different issues and hence the President promulgated the Ordinance.

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