FUGITIVE ECONOMIC OFFENDERS ACT 2018 : A STEP TO GET BACK THE MONEY FROM FRAUDSTERS

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In yesterday’s news, we might have read that economic offender NIRAV MODI is now declared as a fugitive economic offender after Vijay Mallya. NIRAV MODI involved in PUNJAB NATIONAL BANK FRAUD CASE.

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Now let us know about that act…

The act was passed by the parliament on July 25th, 2018. Now let us see who will be considered as a FUGITIVE ECONOMIC OFFENDER.

It means any individual against whom a warrant for arrest in relation to the scheduled offense has been issued by any court in India and WHO:
(A)Either leave or has left to avoid criminal prosecution
(B)Refuses to return to India to face criminal prosecution.

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Provisions:

  • Offenses involving the amount of RS.100 crores or more fall under this provision.
    To declare a person, an application will be filed in a special court(Under prevention of Money-laundering Act 2002) by the director.
  • The special court will require the person to appear at a special place at least 6 weeks from the issue of notice.
  • If not appeared. attachments of the property of FEO and confiscation of the property
    belonging to such offender in India and abroad including Benami property.
  • Sell the properties to pay off the lenders.
  • The law will have an overriding effect over all other pieces of legislation.
  • FEO cannot have any civil claim.

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NEED FOR THE LAW:

  • As it is felt that, recently many high-value economic offenders are getting out
    of control.
  • And this hampers investigation in criminal cases.
  • Wastes precious time of courts.
  • Existing civil and criminal law provisions are not entirely adequate to deal with the severity of the problem.

SHORTCOMINGS OF LAW:

  • Law cannot force FEOs to return to India as it depends on the extradition laws in the country they fled to.
  • This type of clauses is often liable for legal challenges.
  • The Rs.100cr threshold would allow many other offenders to go free.
  • Deterioration in the value of seized assets and finding suitable buyers are some other concerns.