Nirav Modi Declared Fugitive Economic Offender – Free PDF Download

CONTEXT

• A Mumbai PMLA judge Thursday (December 5) declared  jeweller Nirav Modi, key accused in the Punjab National  Bank (PNB) fraud case,
• A “fugitive economic offender” (FEO) on a plea by the  Enforcement Directorate (ED).

PMLA  COURT

• Section 43 of Prevention of Money Laundering Act, 2002  (PMLA) says that-
• The Central Government, in consultation with the Chief  Justice of the High Court, shall, for trial of offence punishable  under Section 4, by notification, designate one or more  Courts of Session as Special Court or Special Courts for such  area or areas or for such case or class or group of cases as  may be specified in the notification.
• The PMLA, 2002 seeks to combat money laundering in India  and has three main objectives:

1. To prevent and control money laundering
2. To confiscate and  seize  the  property  obtained  from  the  laundered money; and
3. To deal with  any  other  issue  connected  with  money  laundering in India.

• At the beginning of this year, a special court in the same city  had declared liquor baron Vijay Mallya an FEO, also on a plea  by the ED — the first such designation of an accused  individual.
• Both Mallya and Nirav Modi are in the United Kingdom, and  fighting extradition to India.

WHO  IS  A  FUGITIVE  ECONOMIC  OFFENDER?

• Any individual against whom a warrant for arrest in relation  to a scheduled offence has been issued by any court in India,  who
• (i)Has left India so as to avoid criminal prosecution; or
• (ii)Being  abroad,  refuses  to  return  to  India  to  face  criminal  prosecution.

FEO  ACT,  2018

• The FEO Bill was introduced in Lok Sabha on March 12,  2018, and passed by Lok Sabha and Rajya Sabha on July 19  and July 25 respectively.
• To provide for measures to deter fugitive economic offenders  from evading the process of law in India by staying outside  the jurisdiction of Indian courts.

WHY  THERE  WAS  NEED  OF  SUCH  A  LAW?

• To prevent Economic offences relate to fraud, counterfeiting,  money-laundering, tax evasion, etc. are already available for  prosecuting these offences like-
• The Prevention of Money-Laundering Act (PMLA), 2002,  The Benami Properties Transactions Act, 1988, and
• The Companies Act, 2013.
• In 2017, Finance Ministry released a draft Bill to address cases of  high-value economic offenders fleeing the country to avoid  prosecution.
• It observed that existing civil and criminal laws did not contain  specific provisions to deal with such offenders,
• Also the procedures under these laws were time-consuming, led  to roadblocks in investigation and impacted the financial health  of banks.
• Thus a new legal framework was needed to prosecute them.

HOW  AN  INDIVIDUAL  IS  DECLARED  FEO?

• An application must be filed in the special court asking that a  particular individual may be declared an FEO.
• The application must be accompanied by “reasons for the belief  that an individual is a fugitive economic offender.
• The special court may then issue notice to the individual to appear  at a specified place, and drop the proceedings if the individual  complies.
• If, however, the special court is satisfied that an individual is  an FEO, it may, record so in an order, along with reasons.
• The court may then order the confiscation of the properties of  the accused individual in India or abroad.

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