SALIENT FEATURES OF THE ACT

• The Act allows for a person to be declared as a fugitive economic offender if:
• An arrest warrant has been issued against him for any specified offences where the value involved is over Rs 100 crore, and
• He has left the country and refuses to return to face prosecution.
• To declare a person a fugitive economic offender, an application will be filed in a Special Court (designated under the Prevention of Money-Laundering Act, 2002) containing details of the properties to be confiscated, and any information about
• The person’s whereabouts. The Special Court will require the person to appear at a specified place at least six weeks from issue of notice. Proceedings will be terminated if the person appears.
• The Act allows authorities to provisionally confiscate properties of an accused, while the application is pending before the Special Court.
• Upon declaration as a fugitive economic offender, properties of a person may be confiscated and vested in the central government, free of encumbrances (rights and claims in the property). Further, the fugitive economic offender or any company associated with him may be barred from filing or defending any civil claims.
• A fugitive economic offender is any individual against whom warrant for arrest is issued for his involvement in selected economic offences as mentioned in the Schedule, involving amount of at least Rs 100 crore or more and has left India so as to avoid criminal prosecution.

The new legislation will prevent big economic offenders like Vijay Mallya, Nirav Modi, Mehul Choksi and many more from fleeing the country and evading the law.

The new law allows designated special court to declare a person as fugitive economic offender and to confiscate his property, including ‘benami’ ones. Also all rights and title in the confiscated property shall, from the date of the confiscation order, vest in central government, free from all encumbrances who can dispose it after 90 days from the date of confiscation order.

Also, the financial limit of Rs. 100 crores for invoking the provision of this new law will help in catching big offenders and will not burden the court with such issues.

There are at least 55 economic offences covered which includes tax evasion, money laundering, transactions defrauding creditors, benami transactions, counterfeiting government stamps or currency and dishonouring of cheques.

The Special court under Prevention of Money laundering Act, 2002 (PMLA) gives a chance to Fugitive to have the proceedings terminated by appearing before it within six weeks from the date of issue of notice. If the Fugitive does not appear in person or through his counsel, the court will hear the case and may declare the person a fugitive economic offender.

A fugitive economic offender loses the right to defend civil claim under the bill and ordinance. It allows any court or tribunal to bar fugitive economic offender from filing or defending any civil claim before it. The court may even restrict a company from filling or defending any civil claim if the promoter, manager, managing director, CEO or majority shareholder has been declared a fugitive economic offender.

However, there are certain issues related to the said act. Thus, as the saying goes “there is no rose without a thorn” there are some loopholes in the act which are against our established law.