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The Union Law ministry has approved Fugitive Economic Offenders Bill, 2017 to empower government to confiscate property of economic offenders and defaulters who flee India.
The Bill seeks to deter economic offenders from evading the process of Indian law by fleeing the country. It was drafted in pursuance of Finance Minister Arun Jaitley’s 2017-18 Budget speech promising legislative changes or even new law to confiscate the assets of such fugitives. The Finance Ministry had prepared the draft Cabinet note on the bill and sought the law ministry’s opinion on it.
Features of Bill
It defines fugitive economic offender as any individual against whom warrant for arrest in relation to economic offence has been issued and person has left the country and refuses to return to India to face criminal prosecution. The burden of proof for establishing that an individual is fugitive economic offender will be on authorities.
The proposed bill will be applicable in cases where the value of offences is over Rs 100 crore. It will allow Financial Intelligence Unit (FIU), the premier technical snoop wing under the finance ministry, to file an application for declaration of fugitive economic offender for confiscation of their assets.
The bill entrusts responsibility to try such cases to the courts under Prevention of Money Laundering Act, 2002 (PMLA). The bill has provision for appointment of an administrator to dispose off property of fugitive offfender to pay off the creditors. Besides, it has provisions to override provisions of other existing laws.
Law Ministry Suggestions
It wants Saving Clause to be incorporated in the Bill before it is introduced in Parliament. Saving clause provides for certain exception(s) in a statute. It enables repealed law to be in force with respect to some existing rights as provisions of the proposed bill has bearing on the provisions of existing laws.
The existing laws under which such fugitive economic offender are tried include Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFESI) and Insolvency and Bankruptcy Code (IBC).
Need for such Law
In the recent past, there have been instances of big-time offenders, including economic offenders, fleeing the country to escape reach of jurisdiction of Indian courts. Most recently, Vijay Mallya, chief of terstwhile Kingfisher Airlines who owes over Rs 9,000 crore to various Indian banks, had fled India to escape legal proceedings in connection with the loans. Such cases have several deleterious consequences as it hampers investigation in criminal cases, wastes precious time of courts of law and undermines the rule of law of the country.
A High Level Committee set up to review the Institutionalization of Arbitration Mechanism in India has submitted its report to the Union Law Ministry. It was headed by Justice (retired) BN Srikrishna.
The Union Government is committed for speedy resolution of commercial disputes and to make India an international hub of Arbitration. So government has decided to look into the recommendations and amended laws according to need.
Arbitration Promotion Council of India (APCI): The committee has recommended for setting up APCI, an autonomous body having representatives from all stakeholders for grading arbitral institutions in India. The APCI may recognize professional institutes providing for accreditation of arbitrators. It may be also empowered to hold training workshops and interact with law firms and law schools to train advocates with interest in arbitration and with a goal to create a specialist arbitration bar comprising of advocates dedicated to the field.
Specialist Arbitration Bench: It also recommended for creation of a specialist Arbitration Bench to deal with such Commercial disputes, in the domain of the Courts.
Changes in Arbitration and Conciliation Act: It has suggested in various changes inprovisions of the 2015 Amendments in the Arbitration and Conciliation Act with a view to make arbitration speedier and more efficacious and incorporate international best practices.
National Litigation Policy (NLP): The Committee also has opinion that the NLP must promote arbitration in Government Contracts.