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Fugitive Economic Offenders Ordinance.

Who is a Fugitive?

  • A fugitive is defined as someone who has left India to avoid criminal prosecution or who is already overseas and refuses to return to face the law.
  • In case of an Fugitive Economic Offender, these are people who have defaulted on loans and have fled the country.
  • While presenting Budget 2017-18, the Finance Minister referred to instances of offenders fleeing the country to escape its justice system, and said the government was looking at a law to confiscate the assets of such persons till they return to face the law.

 Recent Cases

  • There remains great disquiet over liquor baron Vijay Mallya’s flight from the country, with his now-defunct Kingfisher Airlines having run up outstanding loans of over ₹9,000 crore from Indian banks.
  • Both Mr. Mallya and former Indian Premier League commissioner Lalit Modi, who faces an Enforcement Directorate probe for foreign exchange law violations, are in Britain.
  • Diamond Merchants Nirav Modi, Mehul Choksi and their associates firms defrauded the country’s second largest public sector bank of over ₹12,800 crore.
  • India is no closer to getting Mr. Modi or Mr. Mallya back to face the law, with extradition proceedings against the latter crawling through U.K. courts.
  • Government agencies have attached the diamond merchant duo’s assets in India, while an American court has disallowed the sale of their assets in other jurisdictions while allowing their U.S.-based entity to offload its assets.

 

The reason: India is yet to pass a model law mooted by the UN for cross-border insolvency cases.

 

Step by government to avoid Fugitive offenders:

  • In September, the Finance and Law Ministries had agreed on a draft Bill, but it was only introduced in the Lok Sabha this March, in a session that proved to be a washout.
  • The government is no doubt conscious of the clamour for tough action on absconding offenders, particularly those involved in financial misdemeanours and wilful defaulters of bank loans.
  • Banks have been asked to mandatorily collect passport details of those borrowing above ₹50 crore, and the passports of some wilful defaulters are being impounded too.

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