Parliament on Wednesday passed a bill that seeks to prevent big economic offenders like Vijay Mallya and Nirav Modi from fleeing the country to evade the legal process.
The Fugitive Economic Offenders Bill, 2018 was passed by a voice vote in the Rajya Sabha on Wednesday. The Lok Sabha had cleared this Bill on July 19.
Finance Minister Piyush Goyal said the instances of people running away and evading the legal process was increasing and this needed to be stopped, as the current laws do not allow fully dealing with the severity of the problem.
“Criminal law does not allow us to impound their property,” he said.
“This bill is an effective, expeditious and constitutional way to stop these offenders from running away. Legislative changes or a new law must be in place to confiscate the assets of such absconders till they don’t present themselves before the courts. We will also work out what has to be done with the confiscated assets,” Goyal said.
Soon after the minister moved the bill, Chairman M Venkaiah Naidu also remarked: “What is agitating the common man in the country is whether the system is so helpless” in dealing with economic offenders.
Replying to the debate, Goyal said there cannot be a situation when economic offenders run away from the country and also protect their properties. “This Bill will deter people from running away. And those who have already fled, they return out of fear of attachment of their properties.”
The government is also making efforts to get those accused, who have gone abroad to escape the legal process, extradited, he said.
Rebutting the Opposition’s charges that the government has failed to bring back black money, Goyal said “We are fighting against black money and forcing offenders to face the legal process.”
Justifying the financial limit of Rs 100 crore for invoking the provisions of this new law, Goyal said it was being done to “catch the big offenders and not to clog the courts.”
The Enforcement Directorate will be the investigative agency under the Act, he said.
Earlier while introducing the Bill, Goyal said there were provisions of special courts to declare a person a fugitive economic offender in an expeditious manner.
Once a person is declared offender, his property will be confiscated, managed and disposed of, he said, adding that the attachment of properties would be done in a time-bound manner and effectively.
With opposition members protesting that they did not get copies of amendments moved by one member, the Chairman ordered an enquiry into the matter. Naidu although said his office had informed him that it was circulated on July 24.
During the debate, the opposition members attacked the government for lack of will to act against the culprits despite having several laws.
Congress member Vivek K Tankha criticised the government saying there was “no shortage of laws in India. But they get away because the government does not have the will to stop the wilful defaulters.”
“Is the government’s intention to get a lot of publicity by bringing the law”, he said initiating the debate, and added that the country will become a “land of legislations” but it “will serve no purpose.”
Tankha said only 10 per cent of black money was outside India and wanted to know what the government has done to get back the 90 per cent of the black money within the country.
“Why is the government pitching for a threshold of offences worth Rs 100 crore for bringing economic offenders under the purview of the legislation,” he said, adding “even offender of Rs 10 crore is bad.”
“People like Lalit Modi, Vijay Mallya, Mehul Choksi and Nirav Modi” were involved in economic offences worth Rs 2.4 lakh crore, he said. “Law is too little and too late as all big fishes are outside the country.”
“Are we a country that make too many laws with little implementation,” Tankha said and added the real test would be if any fugitive would come back.
Samajwadi Party’s Neeraj Shekhar raised apprehensions on the implementation of the proposed legislation and alleged that several economic offenders have left the country’s shores with the active support of the government.
Pointing out that India had extradition treaties with only 47 countries, he asked how was the government planning to bring the offenders back to the country.
“Make laws which can be implemented. How much black money has come back to the country in the last four years,” he said.
A Navaneethakrishnan of the All India Amma Dravida Munnetra Kazagham asked the government to add provisions to increase quantum of punishment as well as fine for economic offenders.
Prasanna Acharya of the Biju Janata Dal, while supporting the bill, said the proposed legislation needs to be legally sustainable. He also said the provision of Rs 100 crore to bring any offender under the ambit of the proposed bill should be removed.
Harivansh of the Janata Dal-United said it would be difficult to bring back offenders from various countries due to lack of extradition treaties with such nations.
Communist Party of India-Marxist’s Elamaram Kareem said that so many economic offenders were able to leave the country due to the “neo-liberal” regime of the central government.
MV Rajeev Gowda of the Congress pointed out that the focus of the proposed legislation should be on preventing the economic offenders from leaving the country rather then bringing them later back to the country. He challenged the government to “bring back even one economic offender” to India before 2019.
V Vijayasai Reddy said the bill does not talk about high value stake defaults, which could be done through multiple transactions at various places and were below Rs 100 crore individually, but in totality is much above than that.
He also said that loss of creditors should be minimised and the corporate veil lifted in such cases.
Congress’s P L Punia said this was a correct but delayed step. Though there was a provision of recovery of the amount, it does not mention whether the secured creditor would be given preference or it would be given to the non-secured ones also.
While Ramgopal Yadav of the SP said the law spoke only about punishing those economic offenders who have fled the country. There is need also to investigate those who helped them to get big loans from the banks, while Majeed Memon of the Nationalist Congress Party said there was a need to punish those public servants who helped offenders to flee.
Bahujan Samaj Party’s Veer Singh said there was a need for such a stringent law which would act as a deterrent for the offenders.