Fugitive Economic Offenders Bill, 2018 is A Bill to provide for measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, thereby preserving the sanctity of the rule of law in India. This act shall have an overriding effect on other law in force.
Key Definitions – In light of changes, certain key terms need to be addressed in order to understand the legislature:-
a. Contracting state – means any country or place outside India in respect of which arrangements have been made by the Central Government with the government of such country or place through a treaty or otherwise;
b. Fugitive economic offender – means any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who:
Condition 1 – leaves or has left India so as to avoid criminal prosecution; or
Condition 2 – refuses to return to India to face criminal prosecution.
c. Proceeds of Crime – means any property derived or obtained, directly or indirectly, by any person from any criminal activity relating to a scheduled offence or the value of such property or where such property is outside the country, then the property equivalent in value held within the country;
d. Schedule Offence – means offences as mentioned in schedule wherein the total value involved in such offences 100 crores or more;
Such offences includes Indian Penal Code, 1860; Prevention of Corruption Act, 1988; Securities and Exchange Board of India Act, 1992; Customs Act, 1962; Companies Act, 2013; Limited Liability Partnership Act, 2008; Insolvency & Bankruptcy Code, 2016;
Several steps are involved in the process of declaring and confiscation of property attached to such economic offender. The steps are enumerated below:-
Step 1 (Declaration of offender): The director (as defined under PMLA 2002) or any other officer as authorized by such director shall file an application to special court for declaring an individual as fugitive economic offender. Such application shall consists of reasons thereof, any information on whereabouts of such person, value of properties made from proceeds of crime and confiscation sought for, list of related persons who may have interest in such propertied as mentioned above.
Step 2 (Preservation of Property): The director or an officer authorized by such director not below the rank of Deputy Director may attach any property as mentioned in application filed vide an order u/s 6. However, such order can be made in writing if the there is reason to believe that the property is proceed of crime or is owned by such fugitive individual and is being/likely dealt in a manner in which such property shall become unavailable for confiscation. Such preservation latter scenario shall not exceed a period of 180 days.
The burden of proof for the establishing that an individual is fugitive economic offender shall be on the Director/such authorized person. Also, the burden to proof that the property in application is from proceed of crime shall be on the Director/such authorized person.
Step 3 (Notice): The special court in receipt of application shall issue a notice to the individual also any other person who has any interest in such property as provided in application. Such notice should contain the date on which the offender has to appear in court (not exceeding a period of 6 weeks from the date of issue of notice). Also, the notice shall provide for in case of failure to appear the individual shall be declared as fugitive economic offender.
Step 4 (Hearing): Process of hearing comprises of three scenarios which are dealt below: Scenario 1— If such individual appear in court as per the notice, the special court may terminate such proceedings.
Scenario 2 — If such individual instead of appearing personally appears through his counsel then the special court may provide for a period of one week to file reply to the application.
Scenario 3 — If such individual fails to appear personally or through his counsel and the special court being satisfied that the service of notice has been effected or service of notice could not be effected as such individual has evaded service of notice.
Then the court can commence hearing on such application as per applicable scenario.
Step 4 (Declaring individual Fugitive Economic Offender): After hearing the application if the court concludes that individual is fugitive economic offender reasons for the same should be recorded in writing.
On such declaration the court shall order the properties stand confiscated to Central Government. If such order is made, then from the very same day the rights and title of such properties confiscated stands in the hand of Central Government.
If any person if aggrieved by order of the special court then the he may file an appeal in the High Court within a period of 30 Days from the date of such order.
Step 5 (Disentitlement): In case a person is declared as fugitive economic offender, any court in India in any civil proceedings before it may in its discretion shall disentitle such individual from putting forward or defending any civil claim. Such condition also apply to a company wherein in such fugitive economic offender is a Promoter, Key Managerial Personnel, Majority Shareholder or representative of the company in such civil proceedings.
Step 6 (Administrator): After passing an order for confiscation the court shall appoint an administrator (insolvency professional as per IBC 2016) to manage and deal with such properties. Such administrator shall hear all claims in relation to such properties and duly prepare a final creditor list wherein the confiscated properties shall be used to satisfy claims in final list. The Administrator shall be responsible for the disposal of such properties.