Applicability of Fugitive Economic Offenders Act, 2018

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The Fugitive Economic Offenders Act, 2018 (the FEO Act) which came into existence on 21st April 2018 has been fairly a subject of criticism due to its infamous & draconian provisions. Let us examine these draconian provisions of the Act on the touchstone of the Constitution of India, 1950. 

Rohan Garg, Partner, Fox Mandal

One of the foremost aspects of any Act is its applicability. The provisions of the FEO Act shall apply to any individual who is, or becomes, a fugitive economic offender on or after the date of coming into force of this Act. However, when we analyse some relevant sections of the FEO Act, we find that Section 10(3) of this Act states that a notice under sub-section (1) shall (a) require the individual to appear at a specified place and time and that failure to appear on the specified place and time shall result in a declaration of the individual as a fugitive economic offender and confiscation of property under this Act. 

Concurrently, Section 12 (Declaration of fugitive economic offender) of this act states that after hearing the application under section 4, if the Special Court is satisfied that an individual is a fugitive economic offender, it may, by an order, declare the individual as a fugitive economic offender for reasons to be recorded in writing. According to Section 14 (Power to disallow civil claims) of this Act, on declaration of an individual as a fugitive economic offender, any Court or tribunal in India, in any civil proceeding before it, may, disallow such individual from putting forward or defending any civil claim.

Let us now examine these sections on the touchstone of the Constitution of India, especially in relation to Article 14, 21 and 300A of the Constitution of India. Article 14 states that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. The FEO Act, as the name suggests, applies to an individual who is declared a fugitive economic offender. The far-reaching effect of such a declaration is that all his properties are confiscated to the Government and disposed, even before the accused is proven guilty. 

The golden principle of criminal law that is “an accused is presumed innocent until proven guilty’ is completely undermined by such confiscation. Another significant and infamous consequence is that the individual is barred from defending any civil claim before any court in India, once he is declared fugitive. Furthermore, the Act appears to be nothing but offering an unlawful bait to an individual, which is either to surrender and return to India to face prosecution or lose claim on all properties as well as right to file or defend any civil matter. Therefore, the individuals who are grouped as “fugitives” bear the brunt of this Act. 

The question that needs immediate consideration is whether an individual who has left India can be asked to return through the FEO Act even if the Extradition Act already exists for the same very purpose?  Moreover, as per Article 300A of the Constitution of India, no person shall be deprived of his property save by authority of law. Here also, the authority of the FEO Act is in question. Also, the Section 12 of the FEO Act which empowers confiscation of the properties is in the teeth of the Article 300A of the Constitution of India for the simple reason that the manner in which an individual is declared a fugitive is prima facie unconstitutional. 

As pointed above, the way an individual is declared a fugitive wholly undermines the extradition Act and renders it meaningless. It also violates the right to equal protection of law because on one hand, an individual is unable to defend his extradition if he returns to India pursuant to FEO proceedings and on the other hand, he loses his properties if he refuses to return to India under the FEO proceedings and continues to lawfully defend his extradition. In my opinion, these two Acts cannot be simultaneously applied by India. Another facet of this infamous legislation is that it also undermines right to life and liberty under the Article 21 of the Constitution of India. The appropriate law to bring back an individual residing in a foreign country is Extradition and not the FEO. 

An individual has a fundamental right to personal liberty and to live with dignity. He has a right to legally defend himself from placing himself within the jurisdiction of a State where his arrest is wanted, which will curtail his personal liberty. The FEO Act undermines these legal rights. It also undermines the Extradition Act and the safeguards it provides to an individual to restrain his extradition. Moreover, the FEO Act and the Extradition Act cannot apply simultaneously because it results in the clash of interests and rights of an accused. 

Conclusion

Hence, the sustainability of the FEO Act will be tested on the touchstone of Articles 14, 21 and 300A of the Constitution of India. It will also have to be seen how the Courts view the fact that the simultaneous application of both the FEO Act and the Extradition Act adversely affect the legal rights of an accused and the fact that the FEO Act undermines the Extradition Act and renders it toothless or meaningless will require considerable contemplation by the Constitutional Courts in the times to come. Based on the discussion above, in my opinion, the FEO Act not only violates the Articles of the Constitution of India but also renders the Extradition Act meaningless by depriving an individual of it.

(The author of the article is Mr. Rohan Garg, Partner, Fox Mandal)

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