The Fugitive Economic Offenders Bill, which aims to prevent culprits from fleeing the country and evading legal proceedings, has now been passed by both houses of the Parliament. The passage of the bill assumes significance as the law will enable Indian authorities to bring within its purview economic offenders like Vijay Mallya and Nirav Modi.

The government has already been under severe criticism over several businessmen fleeing the country with thousands of crores of Indian bank’s money. It’s not that there were no laws to deal with fugitive economic offenders, but the present laws do not allow to impound offender’s property easily and typically litigations go on for years. But, under the Fugitive Economic Offenders Bill, once a person is declared an economic offender, his property will be confiscated, managed and disposed of. Any offenses involving funds over Rs 100 crore will be dealt with under this law. Investigative agencies can even seize properties that are not only in the name of the offender but also the ones that are benami.

Of late, there has been increase in the number of people who have defrauded the banks but have still gone scot free because of loopholes in the legal system. Therefore, it became expedient to bring in a special law to deal with such offenders. After it was known that Vijay Mallya had fled the country to avoid being arrested for economic fraud, Finance Minister Arun Jaitley had announced in last year’s Union Budget that the government would soon bring about a law that would allow the state to take possession of properties belonging to such offenders. The government has stood up to its commitment.

The Narendra Modi government first got the law implemented in the form of an Ordinance and later got it passed in the both houses of Parliament. Most MPs supported the bill because no one wanted to be seen siding with the fugitives. The main objective of the bill is to bring back economic offenders and punish them, retrieve bank’s money from them, and to pre-empt offenders from fleeing the country. Under the new law, the Court will issue a notice to the person named a ‘fugitive economic offender’. Within six weeks from the date of notice, the person will have to present themselves at “a specified place at a specified time”. If the offender fails to do so, they will be declared a ‘fugitive economic offender’ and their properties will be confiscated. Furthermore, the restraint from agitating any civil matters by any such person shall also act as a huge deterrent to the offender.

In the absence of offenders, it becomes very difficult for the courts to pursue cases against them. Needless to say it also becomes very difficult for investigation to move in right direction in the absence of the accused. It also not only create hurdles in the legal process but also wastes much of the precious time of the courts. And more importantly, these offenders bring the banking system to its knees by bleeding the banks of their money.

Now, with new law in place, it will be become easier for investigating agencies to get hold on to the economic offenders and confiscate their properties. It becomes cumbersome for investigating agencies to pursue cases against the offenders who take the citizenship of some other countries. It is now being reported that one of the fugitives Mehul Choksi has taken the citizenship of Antigua and Barbuda. Though it may not be easy for Indian authorities to extradite him with immediate effect, but after the new laws are in place, the investing agencies would be able to impress upon the authorities of the other country that the charges are of very serious nature and fugitive needs to be presented before the court. Otherwise also, the stringent law has its own deterrent effect.

For the most part of his two-year-long fugitive life in the United Kingdom, beleaguered liquor king Vijay Mallya has put up a defiant face, refusing to return and openly challenging Indian authorities. In an interview he had said, “By taking my passport or arresting me, they are not getting any money.” Mallya’s tone seems to have changed a lot this week. Reportedly, he has sent feelers to officials to say that he would like to return and face the law. It is being said that the creation of new law has brought about change in Mallya’s attitude. The Enforcement Directorate’s (ED) had sought action against him under the fugitive economic offender’s ordinance in an over Rs 9,000 crore bank fraud case. It was the first time that action was initiated under the ordinance promulgated by the Narendra Modi government.

Mallya is only a small fish among large loan defaulters and fraudsters thriving on the corporate-banker nexus. Compared with what the uncle-nephew duo of Mehul Choksi and Nirav Modi did to the Punjab National Bank (PNB), Mallya’s charges would be less serious in nature. Nirav Modi- Mehul Choksi–PNB fraud is worth more than Rs 12,000 crore.

The success of the Fugitive Economic Offenders law will depend on how well it is implemented. This law would prove to be a potent weapon, if rightly used.