This comes in the backdrop of main offenders of multi-crore fraud case in Punjab National Bank having already left the country and concern over auditing standards and lack of compliance of banks that gave loans to them and other such offenders.
Diamond jeweller Nirav Modi and Mehul Choksi of Geetanjali group have been accused of defrauding the PNB of Rs126bn.
Briefing reporters after a meeting of the Cabinet, Finance Minister Arun Jaitley said that the Cabinet approved the Fugitive Economic Offenders Bill, 2018, which would be introduced in the second half of budget session of Parliament.
The minister said that cases where the total value involved in such offences is Rs1bn or more will come under the purview of the fugitive economic offenders bill.
“The bill will help in laying down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts,” Jaitley said.
There have been several instances of economic offenders fleeing the jurisdiction of Indian courts before or during the pendency of criminal proceedings.
The bill seeks to provide “an effective, expeditious and constitutionally permissible deterrent to ensure” that offenders are brought to book and banks and other financial institutions achieve higher recovery from financial defaults.
It seeks to address the lacunae in the present laws and deter economic offenders from evading the process of Indian law.
The bill provides for giving an application before the Special Court for a declaration that an individual is a fugitive economic offender, attachment and confiscation of his property resulting from the proceeds of crime as also his other property in India and abroad, including benami property.
Jaitley said steps will be taken to strengthen the mechanism of international co-operation in such cases.
The bill provides for “disentitling” the offender from defending any civil claim. An administrator will be appointed to manage and dispose off the confiscated property.
It also provides that if the offender returns to India in the course of the proceeding prior to the declaration and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease.
A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a “scheduled offence” (contained in the schedule of the bill) and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.