A law for the big guns
With the evident inability to bring back ‘large’ economic defaulters, eyes gaze at the new law asking if this will do what the existing laws couldn’t.
The Fugitive Economic Offenders Act, 2018 has Vijay Mallya and Nirav Modi written all over it. The Lok Sabha cleared the bill on the second day of the monsoon session and having received the President's nod, observers remain captivated in anticipation of justice that is yet to be brought regarding the absconding white collar criminals. While it is evident that this is the government's desperate measure to deal with these offenders, the intricacy of the same along with the timing is something to take note of. Although the bill was introduced in Parliament on March 12, 2018, the time elapsed since then has only come in aid of the offenders relishing their self-exile decorated with their loot. The Enforcement Directorate stands seeking confiscation of private properties of such offenders under the Fugitive Economic Offenders Act.
While the ordinance route taken by the government to form this bill was subjected to expected criticism by members of the lower house, the bill was passed by the end of proceedings for the day with some amendments. The salient features of the bill give an impression of the lessons learnt post the Nirav Modi crisis. The clauses ensure prevention of a repeat of such offence, duly inspiring the future conspirators to find a loophole. However, as logically pointed out by Shashi Tharoor of Congress and Dushyant Chautala of INLD, the Rs 100 crore threshold gives leverage to the offenders below the affixed mark. Piyush Goyal countered in what seemed like a comparatively logical response by stressing on the fast-tracked justice for 'large' defaulters; but that's again a short-term objective, unsatisfying for something as overarching as a 'new law'. The poorly handled cases of fugitive economic offenders before would be replicated if they do not cross the threshold since justice was denied with existing laws before, thereby urging for a new law.
Many members asserted their opinion on how the law would not survive legal scrutiny since it has loopholes and appears to be hastily built in the Centre's interest and eagerness to counter the denigration that the Government feels it has been subjected to. The fact that the bill was silent on the creditors or how to bring back these fugitive offenders stands to testify the "embryonic" remark by T.G.Venkatesh Babu of AIADMK wherein he pointed out that the bill is also contradicting Article 21 of the Indian Constitution. It is imperative to understand, however, that the disentitlement of the economic offender from defending any civil claim comes in as a harsh yet necessary mandate to establish a stringent view of the law in regard of such offences.
The search and seizure of proceeds of crime, benami properties, and owned properties is an all positive outcome of this law which seeks to provide relief to the loss incurred by the financial institutions due to a Non-Performing Asset (NPA). In Piyush Goyal's words "Criminal law doesn't allow us to impound their property" the new bill definitely seeks to confiscate everything. It is interesting to note that the everything they hope to confiscate under the 'new' law is something 'left behind' by these offenders and with the scale of offence committed, their voluntary return stands highly unlikely. It is easy to assume that they made peace with this before absconding. Nevertheless, it is imperative to recover whatever amount possible from the properties of the defaulter from the bank's perspective. Also, the disposing off of confiscated proceeds of crime or properties is unclear with the efficiency of the same being a matter of concern.
The underlying idea of this law is to bring the perpetrators to justice and recover the losses or repair the damage done to financial institutions. Following that is the formation of an intolerant image, wherein committing such white collar crimes will incur imprisonment. There needed to be a strong law which prevents absconding of such offenders while subjecting them to appropriate punishment for their fraud. As the bill becomes a law, more than thirty offenders (as per the written reply by M.J. Akbar, Minister of State for External Affairs) under investigation by CBI and ED that roam the globe are brought under the scanner. The government's massive recapitalisation plan revives the crediting power of public sector banks, thereby improving their financial health. However, the scope of an inch-perfect law to bring fraudsters back and serve as a deterrent for anybody plotting to do the same is what this nation keenly looks forward to. Last but not the least, these big guns should be given the credit for highlighting such a flaw in our system from which they benefitted, albeit shrewdly, announcing to the nation how fragile our economic policies are and how naive our financial institutions may be.
(The views expressed are strictly personal)