By Hemant Batra | Policy & Business Lawyer | Kaden Boriss | Goeman Bind HTO
The law is considered worthy if it evolves continually with the changing needs of the society. Last few years have seen a surge in the economic wrongdoers fleeing the country and taking refuge in the secure foreign settings. In the given circumstances, what Indian authorities could do was to pursue their extradition, but that depended on several challenging factors. Some countries where these offenders took shelter had no extradition or cooperation treaties with India or even if they had, one had to follow a due process of law, or in other words, the merry go round of the courts of law. With a pile on of economic offenders escaping the rule of law in India and the Indian citizenry getting exasperated, the lawmakers worked out a pressure tactic in the form of a new law called The Fugitive Economic Offenders Bill, 2018. The said bill stands dully passed by both the houses of the Indian Parliament. The new law appears to be the only possible solution in the current scenario, where the fugitives are taking the Indian legal system and the public monies for a long duplicitous ride.
The west especially the United States considers financial and physical crimes at par. This was never the case in India or for that matter in South Asia. In past couple of years, Indian law framers have shown their sincere intention to consider economic offenses as heinous as culpable physical offenses. Fugitive economic offenders are no less than robbers, dacoits, and murderers is proven by the new law passed by the Indian parliament.
This new law as applicable to the fugitive economic offenders is highly severe and applies to all connected with the fugitive in question. It comprehensively provides for processes to daunt fugitive economic offenders from eluding the course of law in India. Some of the provisions of the fugitive law are patently punitive, and apparently, these would be challenged as being violative of the constitutional provisions including the fundamental rights enshrined therein; but, the lawmakers had no choice but to make the said law all-inclusive.
Let us discuss some key provisions of the law dealing with the fugitive economic offenders. Firstly, the definition of “fugitive economic offender” is so broad that it includes any individual against whom a warrant for arrest has been issued by any Court in India, about any one or more of nearly fifty scheduled offenses. Moreover, who has fled India to escape criminal prosecution; or being overseas, declines to come back to India. Tremendously, the scheduled offences cover almost all economic offences under the Indian Penal Code, the Negotiable Instruments Act, the Reserve Bank of India Act, the Customs Act, the Prohibition of Benami Property Transactions Act, the Prevention of Corruption Act, the Securities and Exchange Board of India Act, the Prevention of Money Laundering Act, the Limited Liability Partnership Act, the Foreign Contribution (Regulation) Act, the Companies Act, the Black Money (Undisclosed Foreign Income and Assets), the Insolvency and Bankruptcy Code, and more.
The exciting catch or a qualifying provision for a fugitive economic offender is laid out in the definition of “Scheduled Offence.” This law is meant for the elite or affluent offenders. As per the said definition, an offense will qualify as a scheduled offense, “if the total value involved in such offense or offenses is one hundred crore rupees or more.” [One billion rupees or more].
An economic offender despite being a fugitive, in fact, will not be considered as such unless the Special Court declares the said individual to be a fugitive economic offender on a formal application moved by the prosecution authorities. The said application will require to mention reasons for the credence that an individual is a fugitive economic offender and any information available as to his whereabouts. Additionally, the application shall also specify a list of properties or the value of such properties whether believed to be the proceeds of his crime or owned by him otherwise or in proxy names, including any such property located abroad for which confiscation is sought. Most importantly, the law also requires “a list of persons who may have an interest in any of the properties” as above mentioned. This brings even non-fugitive into the grabs or claws of law. This could mean family, relatives, and friends of the absconder.
As a pressure tactic, the authorities have several coercive and harsh powers under this law. For instance, the authorities can attach any property mentioned in the application as above with the permission of the court and certain cases even without permission. In fact, the authorities have sweeping powers to attach any property at any time prior to the filing of the above application for which there is a reason to believe that the property is proceeds of crime, or is a property or benami property owned by an individual who is a fugitive economic offender; and which is being or is likely to be dealt with in a manner which may result in the property being inaccessible for seizure.
As we proceed further, we encounter the most onerous provisions of law ever framed by the lawmakers. The executive is empowered with the powers of the judiciary. Section 6 of the given code provides “The Director or any other officer shall, for the purposes of section 4, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in respect of” certain stipulated matters like discovery and inspection, enforcing the attendance of any person, compelling the production of records, receiving evidence on affidavits, issuing commissions for examination of witnesses and documents, and any other matter which may be prescribed from time to time.
The superior coercive powers do not stop at any point in connection with as fugitive economic offender as the authorities are given unfettered powers to enter any place within the limits of the area assigned to it. In such eventuality, if the situation so demands, the authorities may request any proprietor, employee or any other person to enable inspection of such records as may be required and to check or verify the proceeds of crime or any transaction related to proceeds of crime. The authorities can secure recording of statements of third persons in the process.
The authorities shall have the power to enter and search any building, place, vessel, vehicle or aircraft where there is a reason to suspect that records or proceeds of crime are kept. While engaging in such search and seizure, the authorities are empowered by the law to break open the lock of any door, box, locker, safe, almirah or other containers. The authorities shall have the power even to detain third parties for a stipulated duration to facilitate investigations.
The law dealing with fugitive economic offenders is definitely no bunkum but a step towards dealing with financial crime perpetrators and absconders with a fist of steel.
However, there are specific controversial provisions under this law, which may have to stand the test of jurisprudence and judicial scrutiny. For example, under this law, any court or tribunal may prohibit the accused economic offender or his related entities from filing or defending any civil claims before it. This provision could well be struck down as unconstitutional.
Further, in the mechanism of attachment and confiscation of properties, there is a lack of clarity as to the protection of the creditors, sundry debtors, vendors and other claimants.
Needless to mention that the processes for search, seizure, and examination of individuals whether accused or not are mostly open-ended and unregulated.
The time is a great credible witness to the occurrences, events, and experiences. Hence, it is only the time which will tell that whether this law met the desired results or fell flat on its face. Be as it may, one object is apparent that the current government is taking earnest and committed steps to bring criminals to the gallows of law.
The article was originally published at NewsD – https://newsd.in/india-brings-fugitive-economic-offenders-at-par-with-culpable-physical-offenders/