A bill with gaping holes cannot be govt’s best response to tackle grave economic crimes

The Fugitive Economic Offenders Bill 2018, introduced in the Lok Sabha by the Narendra Modi government on Monday, faces some genuine concerns for being too harsh and violative of property rights. The proposed legislation, among other things, aims to impound and sell property belonging to fugitives who have been charged with economic offences. It needs to be noted that unless proved guilty of an economic crime, a person cannot be treated as either a fugitive or an offender. There are existing laws to deal with white-collar crime.

Interestingly enough, the Biju Janata Dal (BJD) headed by Naveen Patnaik has decided to oppose the Modi government’s move to confiscate properties of economic offenders who have fled the country avoiding due process of law. Some opposition members in the Lok Sabha also said that the bill gives government unchecked powers to name someone as an economic offender and confiscate his or her property without having to prove that the crime was committed in the first place.

The opposition, perhaps, has a point when it says that introducing yet another bill cannot be the best and first response by the government to tackle grave economic crimes. Some point to the lack of convictions given that most offenders slipped from under the very nose of the present ruling dispensation. It is possible that, against this background, the government would have to amend the bill drastically to make the legislation acceptable to all stakeholders.

However, the counter narrative is equally strong and geared to prevent economic offenders from taking the first flight abroad to avoid law enforcement agencies. There are over a dozen serious offenders like Vijay Mallya, Lalit Modi and Mehul Choksi who continue to live a lavish and easy life abroad. Repeated attempts to bring them home for trial have not borne fruit so far, and this has allowed the government to prepare the ground for the legislation that will give it more powers to deal with such offenders.

While Mallya was willing to present himself before UK courts, he continues to cry foul on the lack of basic facilities in Indian judicial system or jails. Nirav Modi provided a flimsy reason for not returning to India when he said the revocation of his passport prevented him from doing so. His maternal uncle, Mehul Choksi, was unwilling to submit before Indian law enforcement agencies notwithstanding the arrest warrants.

It is necessary to ask whether there are no laws to deal with these offenders who have defrauded investors, banks and other stakeholders of thousands of crores of rupees, and the amount keeps growing. One interesting feature of the new bill is to cover most acts under which these offenders could have committed crimes. The Reserve Bank of India Act, Securities Exchange Board of India Act, Insolvency and Bankruptcy Code act, Central Goods and Services Tax Act, Prevention of Money Laundering Act, Limited Liability Partnership provisions under Companies Act etc are some existing legislation that have been covered under the Fugitive Economic Offenders Bill, now before Parliament. Many of the acts already have enough provisions to bring back, undertake trial or even confiscate properties for different violations.

Several experts have also pointed to serious inadequacies in the proposed legislation to confiscate properties of offenders within and outside the country. Will confiscation without conclusive proof lead to serious challenges in the form of civil suits? Secondly, will the sale of properties be possible without completion of trial against the offenders? The bill needs serious tweaking. Otherwise, evolving a consensus on the bill within and outside Parliament could be a bigger challenge even if the NDA manages to secure a simple majority in the Rajya Sabha.