What happens when the criminal proceedings or other such actions are yet to start or where the preliminary inquiry might be taking time and an economic offender either involves in repetitive offence or leaves the country.

In a recent judgement, the Hon’ble Supreme Court of India was dealing with the provisions of Telangana Prevention of Dangerous Activities of Bootleggers, Dacoits, Drugs, Offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986. The said Act confers power upon the State Government to preventively detain any bootlegger, dacoits, drug offenders, goondas, immoral traffic offenders, primarily in order to restrain or prevent them from committing such offence again. In this case, the State Government had passed an order of preventive detention against the detenu for having sold chilly seeds which produced inadequate yield on sowing. Interestingly, for selling inferior quality seeds the state government tried to cover the activity within the definition of ‘Goonda’ by calling it spurious seeds so as to be able to apply the provisions of the said law. However, the Supreme Court held that such allegations could not be covered under the definition of ‘Goonda’ and termed the said order as the gross abuse of statutory powers of preventive detention and held the grounds of detention as exfacie bad and extraneous to the Act.

Although it is apparent that the State Government tried to stretch the provisions of the Act in order to cover the activity of selling of seeds so as to be able to impose the order of preventive detention. Even calling the seeds giving inadequate yield as spurious may also be questionable. However, the fact remains that there are large number of economic offenders who are causing great harm to the economy of country. Such economic offenders easily take benefits of the indefinite and slow legal system which involves prolonged investigation and the dragging of trial for years. While the legal system drags, these people keep making repetitive economic offences.

In the recent times, the people of the country have felt frustrated and hopeless when people like Mr Vijay Mallya or Mr. Lalit Modi, who have been charged of causing losses of thousands of crores to the Indian banks or system, have gotten away from the clutches of law by leaving the country while there is little the governments have been able to do. There are allegations against Governments that they allowed these people to get away from the clutches of law and go away from the country.

But the question really is, whether there is a law which could have been utilised to detain Mr. Mallya or Mr. Modi from leaving the country or to detain them preventively. There is no doubt that the powers under the Code of Civil Procedure, 1908 of arrest and attachment before judgement could have been utilised by the effected banks or other entities had they been cautious enough and acted proactively within time. But under the civil law, it was not for the Government directly to be able to take action against such people.

“Interestingly for selling inferior quality seeds, the state government tried to cover the activity within the definition of ‘Goonda’ by calling it spurious seeds so as to be able to apply the provisions of the preventive dentention law. However, the Supreme Court held that such allegations could not be covered under the definition of Goonda.”

Because of this peculiar situation, when the Government finds itself totally helpless, the Indian Government has planned an Act called Fugitive Economic Offender Act, 2017, specially keeping in mind such fugitive economic offenders who have left India to avoid criminal prosecution and the legal action and those who refuse to return to India to face the law. The said bill is still pending in the Parliament. But, even if the said Act comes to be passed by Parliament, it will only be able to deal with those people or offenders who have already left the shores of the country and pre-requisite for using the provisions of said Act would be an ongoing criminal proceeding.

“Unfortunately, there is little that the Government can presently do. Economic offences by nature are complicated in nature and are executed in a planned manner over a period of time mostly in the garb of legitimate business activity. It is normally very difficult to identify or detect simmering economic offences. In fact, sometimes, like in the case of Mr. Mallya & Mr. Modi, there is widespread public adulation for their activities and they are surrounded by glamour and public figures.”

The question will still be as to what happens when the criminal proceedings or other such actions are yet to start or where the preliminary inquiry might be taking time and an economic offender involves in repetitive offence or leaves the country. Unfortunately, there is little that the Government can presently do. Economic offences by nature are complicated in nature and are executed in a planned manner over a period of time mostly in the garb of legitimate business activity. It is normally very difficult to identify or detect simmering economic offences. In fact, sometimes, like in the case of Mr. Mallya & Mr. Modi, there is widespread public adulation for their activities and they are surrounded by glamour and public figures.

Even a bogie of providing of employment and contributing to the growth of nation and to revenue is also used to legitimise such activities. It is very difficult to accuse such businessmen of any illegal activity or to challenge their aura till the loss has actually surfaced. Some of them may even own a substantial portion of media which makes them very very powerful as the media is hesitant in criticizing their activities.

None the less there is need to start a debate as to in what manner the Government should be able to empower the law enforcing agencies to prevent economic offences and nip them in the bud, and prevent the offenders involved in the repeated offences from leaving the country. Even if it is questionable as to whether Mr. Mallya or Mr Modi have committed any offence or not, the fact remains that at the time when they left the country there was little the Government could have done to stop them. There is certainly need to start a debate to address this grey area.