Union Cabinet has approve the Fugitive Economic Offenders Bill, 2017 providing for measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts and empowers the Government to confiscate the properties of such offenders in India.
The term “Fugitive Economic Offender” has been defined as an individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who: (i) leaves or has left India so as to avoid criminal prosecution; or (ii) refuses to return to India to face criminal prosecution.
The term “Proceeds of crime” refers to 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.
The term “Scheduled offence” as used in the aforesaid definition of “proceeds of crime” refers to offences mentioned in the Schedule, if the total value involved in such offences is one hundred crore rupees or more.
The proposed Bill, lays down the following steps –
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A director or any other officer as authorized by such director shall file an application to a special court for declaring an individual as fugitive economic offender. Such application shall consist 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 properties as mentioned above.
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Under Section 7, 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 under Section 6. However, an order for Preservation of Property can be made in writing if there is reason to believe that the property is proceeds 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 scenario shall not exceed a period of 180 days. The burden of proof for establishing that an individual is a fugitive economic offender lies on the Director/such authorized person. Also, the burden of proof that the property in application is from proceeds of crime shall be on the Director/such authorized person.
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On receipt of application, the special court would issue a notice to the individual and to any other person who has any interest in such property as provided in application. Additionally, the notice shall provide that in case of failure to appear the individual shall be declared as fugitive economic offender.
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After hearing the application if the court concludes that the individual concerned is a fugitive economic offender, reasons for the same are to be recorded in writing. On such declaration, the court shall order the properties to stand confiscated. If any person is aggrieved by order of the special court then he may file an appeal in the High Court within a period of 30 days.
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In case a person is declared as fugitive economic offender, any court in India in any civil proceedings before it, may in its discretion, disentitle such individual from putting forward or defending any civil claim. Such condition also applies to a company wherein such fugitive economic offender is a promoter, key managerial personnel, majority shareholder or representative of the company in such civil proceedings.
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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 disposal of such properties.