Fugitive Economic Offenders Act

Fugitive Economic Offenders Act

Fugitive Economic Offenders Act

Fugitive Economic Offenders Act has been enacted by the Parliament of India to preserve the sanctity of the law in India. Fugitive Economic Offenders Act intends to confiscate assets and properties of economic offenders that evade prosecution by residing outside the jurisdiction of Indian courts. In this article, we look at the Fugitive Economic Offenders Act in detail.

Fugitive Economic Offender

According to the Fugitive Economic Offenders Act (FEOA), 2018, a fugitive economic offender is any individual against whom a reasonable arrest warrant has been issued for his or her involvement in economic offences with the value of Rs. 100 crore or above and has left India to avoid prosecution. 

Features of Fugitive Economic Offenders Act

The features of Fugitive Economic Offenders Act are as follows:

  • Under the Fugitive Economic Offenders Act, an individual is declared as a Fugitive Economic Offenders (FEO) on satisfying the following conditions:
      • Any arrest warrant has been issued for committing an offence specified under the Act, and the total value of the offence is at least Rs 100 crore. 
      • Any person who left the country and refused to face criminal prosecution.
  • To declare the person as an FEO, an application has to be filed in a “Special Court” specified under the Prevention of Money-Laundering Act, containing the details of the properties to be confiscated, and any other information about the FPO.
  • The Special Court will declare a notice to an individual to appear at a specified place and date within six weeks from the issuance of notice. 
  • Also, FEOA allows designated authorities to provisionally attach properties of an accused, while the application is pending before the Special Court.
  • In the case of the person appears in the specified date, the proceedings will be terminated. If not, the person would be declared as a Fugitive Economic Offender.
  • Upon declaration as an FEO, the properties of the individual may be confiscated and vested in the Central Government. Further, the FEO or any company incorporated with the economic offender would be barred from filing or defending any civil claims.

Applicability of the Act

The provisions under this Act is applicable to any individual who is fugitive economic offender on or after the date of commencement of Fugitive Economic Offenders Act.

Powers of Director

The Director or any other concerned authority appointed by the Central Government will undertake the following activities as specified below: 

  • Discovery and inspection
  • Examination of Economic Offender
  • Maintaining the attendance of any person, including any officer of a reporting entity
  •  Enforcing the production of records
  • Obtaining evidence on affidavits
  • Issuing commissions for verification of witnesses and documents and
  •  Any other particulars as prescribed.

Application for declaration of Fugitive Economic Offender

Step 1: A Director appointed by the Central Government is responsible for filing an application to a special court in order to declare the person as a Fugitive Economic Offender. The application to be filed should possess the following details:

  • Reason to believe than an individual is a fugitive economic offender
  • Any information related to the fugitive economic offender.
  • Details and value of such properties including any such property outside India for which confiscation is made.
  • Benami properties owned by an individual in India or abroad for which confiscation is made.
  • Details of the persons who have the interest to purchase properties listed above.

Issuance of Notice

Step 2: Upon receipt of the application, the Special Court will issue a notice to the Fugitive Economic Offender.  

Step 3: As specified in the notice, the individual has to appear in person or through counsel.

Step 4: If the Special Court is satisfied on the service of notice the Special Court will records reasons and hear the application.

Hearing of the Application

Step 5: Upon hearing the application, the Special Court can declare the individual to be an FEO.

Step 6: If an individual is declared as an FEO, then the Special Court is allowed to order confiscation against the crime made by FEO in India or abroad. 

Consification Order

Step 7: The confiscation order will be handled by the Central Government, along with the identification details of the same.

Step 8: In the case that the Special Court declares the person is not to be an FEO, then the property seized will be ordered to be released to the concerned person.

Appeal 

Step 9: However, the Director can appeal to the Concerned High Court within thirty 30 days against the order of the Special Court.

Attachment of Property

The Director, with the permission of the Special Court, can attach the details of the property as specified above. The Director has to attach the property by an order in writing within 30 days from the date of filing the application before the Special Court. The attachment of such property would continue for the period of 180 days from the date of order of such attachment. Further, it can also be extended on recommendations from the Special Court.

Confiscation of Property

The Special court will appoint an administrator to oversee the confiscated property. This person will be responsible for disposing of the property as well, and the property will be used to satisfy creditors claims.

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