New Delhi, Mar 1: Days after the Rs 11,400-crore PNB scandal came to light, the government rushed towards pushing the Fugitive Economic Offenders Bill 2018, which would give legal teeth to the central agencies to attach benami properties of financial scamsters, who have been declared absconders. The Union Cabinet meeting, chaired by Prime Minister Narendra Modi on Thursday, approved the law.

"Fugitive Economic Offenders Bill 2018 has been brought to ensure confiscation of assets of a fugitive, including Benami assets. There will also be the provision to confiscate those assets outside India but co-operation of that country will be needed," said Finance Minister Arun Jaitley.

On being asked whether the law would apply retrospectively -- in order to act against high-profile wilful defaulters such as ex-liquor baron Vijay Mallya and diamond czar Nirav Modi -- Jaitley said action would also be taken against them.

Key features of the Bill

- The law would cover economic offences, including non-payment of loans above Rs 100 crore.

- As per the draft Bill approved by the Law Ministry, special courts will be set up under the Prevention of Money Laundering Act (PMLA). After the alleged economic offender gets declared a fugitive by the special courts, he/she would be provided a period of only six weeks to depose before the investigators.

- Unlike the seizures made under the current legal framework, the agencies would be allowed to auction the properties attached without waiting for the final settlement in the court.

- The economic offenders would not be able to stake claim on the properties seized by the Income Tax department or the Enforcement Directorate, even if their yet to be proclaimed guilty by the courts.

- The law is the first of its kind which creates scope for the government to attach overseas properties of absconding economic offenders. "This is subject to permission granted by the other nation," Jaitley clarified.

At present, the laws in place to crackdown on fugitive wilful defaulters are: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFESI), Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI) and Insolvency and Bankruptcy Code (IBC).

Finance Ministry sources, cited by reports, said the incumbent laws were not efficient enough to crackdown on absconding scamsters. A stronger law was being mulled over for the past couple of years which could act as a deterrent.

The new Bill, analysts claim, would also provide the Narendra Modi government with sufficient political ammo to counter the opposition charges on bank frauds, as a large amount of public loot would be retrieved through assets of the fugitive defaulters.

(The above story first appeared on LatestLY on Mar 01, 2018 07:49 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).