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Attachments of Assets of Fugitives in India: Legal Analysis

 ED get power against Economic Offenders 

By : Abhishek Jena 

 

The Author, Abhishek Jena, is a 2nd year BA LLB student at Symbiosis Law School, Hyderabad. He is currently interning with LatestLaws.com.

Introduction

The Fugitive Economic Offenders Act of 2018 (the "Act") took effect on April 21, 2018. “for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts…” the Act states in its Preamble. While there are laws in place to deal with economic offenders fleeing the nation to avoid criminal prosecution, it was felt that the existing civil and criminal measures were insufficient to address the seriousness of the situation. As a result, legislation was passed to provide a thorough new framework for dealing with criminals like these. The assertion that the current legal framework is insufficient may contain some validity. However, it is important to highlight that this is not the case when it comes to the regulations governing the attachment and subsequent disposition of property. In this essay, I'll make the identical case using the 1973 Code of Criminal Procedure.

Attachment of Property

The goal of attaching property in criminal cases is to increase the pressure on absconders and force them to appear in court. In a similar spirit, Section 83 of the Code allows for the attachment of a declared offender's property (persons avoiding appearance). Section 5 of the Act also allows for such attachment. While filing an application to declare an individual an economic offender, the Director has the authority to attach any property. The Director may attach any property before making such an application if she believes the property is proceeds of crime or benami property, notwithstanding Section 5(1) of the Act, provided that such an application is made within thirty days of attaching such property. With the exception of the pre-declaration stage (declaration of an individual as a fugitive economic offender falls under the purview of Section 12(1) of the Act, and such declaration is given by the special court after hearing the application), the scheme involving property attachment in the Act adds nothing new to the Code. Despite this exception, the general framework of the code regarding attachment remains unchanged, as the Act's application step corresponds to the Code's proclamation stage under Section 82(1).

Furthermore, under Section 10(1) of the Act, when an application is made to declare someone a fugitive economic offender, they must be served with a notice. By virtue of the notice under section 10(1) of the Act, an alleged offender is made aware of the attachment of her property, whether or not a declaration is made. As a result, an absconder is hindered from appearing by mere knowledge of attachment in any circumstance, i.e. either the Act or the Code. 

 

Furthermore, unlike Section 84(1) of the Code, which allows for objections to attachment when the property of someone other than the proclaimed criminal is attached, the Act does not provide for such objections. It's worth noting that the Director can attach "any" property stated in the application, not simply the alleged absconders, under Section 5 (1) of the Act. To secure the protection of an innocent person's property, a redress mechanism is essential. Although nothing stops “the person interested in the enjoyment of the immovable property attached under sub-Section (1) from such enjoyment” under Section 5(4) of the Act, it lacks the process stated in Section 84 of the Code. It is unclear what the special court established under the Act will do if it is confronted with a case involving the attachment of an innocent person's property.

Disposal of Attached Property

As with attachment, it was asserted that the existing law was insufficient because the Code did not provide for the immediate seizure of property, which could only be done after the conclusion of the trial. This is not the case, as Section 85(2) of the Code allows for the seizure and disposal of attached property if a proclaimed offender does not appear within a certain amount of time. The Act's scheme for disposing of property is substantially similar to that of the Code. If the special court is convinced that an individual is a fugitive economic offender, it may order the confiscation of the proceeds of crime and other property possessed by the offender under Section 12(2) of the Act. 

 

When compared to Section 85(2) of the Code, this section does nothing more than add a new method by way of declaration after attachment. Furthermore, whereas the government may dispose of the property after 90 days under Section 15 of the Act, the same can be done after 180 days under Section 85(2) of the Code. While some may compare the Act to the Code in that attached possessions may be returned if the absconder returns within two years, it should be emphasised that this is only done when the absconder shows that she did not abscond or conceal herself to evade the execution of an arrest warrant. Section 12(9) of the Act is similar to Section 85(3) of the Code in that it allows a special court to release an attached property if it determines that the person is not a fugitive economic offender. With the exception of the period immediately following attachment for disposal, the Act adds nothing to the Code. With the exception of the period immediately following attachment for disposal, the Act adds nothing to the Code. One is also compelled to inquire as to how the disposition of the linked property could discourage an alleged criminal. While an offender is made aware of how her ownership of the attached property may be taken over in the event of an attachment, in the instance of a disposal, the absconder's ownership is gone and she has nothing more to lose, providing little motivation for her to return and face the law. Disposing of attached property is more of a punishment than a deterrence.

Conclusion

The Act's aim, according to the Preamble, is to compel fugitive economic criminals to face the law, and this coercion is most effective through the attachment and subsequent disposition of property. As a result, the Act's substratum is made up of the provisions that govern attachment and disposal. In this essay, I've sought to demonstrate that, with a few minor exceptions, these clauses add nothing to the Code. Furthermore, given the Act's authority to prevent a fugitive economic offender from bringing or defending civil claims under Section 141(a), there are issues about its legality. This issue arises from the Supreme Court of India's decision in Anita Kushwaha v. Pushap Sudan (2016) 8 SCC 209, which found that access to justice is a constitutional right under Article 21 of the Indian Constitution. 

 

It should also be noted that the Act's provisions on proclamation, attachment, confiscation and recovery, search and seizure, and extradition correspond to provisions of other existing laws other than the Code, such as the Prevention of Money Laundering Act, 2002, the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and the Equality Act of 2002. As a result, the Act's resemblance to current legislation must serve as a rallying cry for the government to successfully enforce existing laws in a way that meets the needs of new methods in which criminals escape the law.

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Abhishek Jena 

SOURCE ;  .latestlaws.com/a

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