Introduction
India’s economic landscape has witnessed unprecedented growth over the past decades, but this expansion has been accompanied by a darker reality: high-value economic offences committed by individuals who subsequently flee the country to evade prosecution. The economic havoc created by such fugitive offenders became particularly evident through cases involving billions of rupees in bank frauds, leaving financial institutions crippled and taxpayers burdened. In response to this growing menace, the Parliament of India enacted the Fugitive Economic Offenders Act, 2018 (hereinafter referred to as “the Act” or “FEOA”), which received Presidential assent on 31st July 2018. [1]
This legislation emerged from a pressing necessity to address a systemic weakness in India’s legal framework. Before its enactment, economic offenders could simply leave the country after committing large-scale frauds, living comfortably abroad while Indian courts struggled to bring them to justice. The existing civil and criminal provisions proved inadequate to tackle the magnitude and complexity of economic offences, particularly when the accused were beyond the territorial jurisdiction of Indian courts. The Act represents a paradigm shift in India’s approach to economic crimes, introducing stringent measures to deter offenders from fleeing and providing mechanisms to confiscate their assets even in their absence.
The intersection of this legislation with company law creates a complex regulatory landscape that affects corporate entities, directors, and stakeholders in multifaceted ways. Companies associated with fugitive economic offenders face severe consequences, including the potential confiscation of assets and restrictions on legal proceedings. Understanding this interplay is crucial for corporate professionals, legal practitioners, and anyone involved in India’s business ecosystem.
Genesis and Objectives of the Fugitive Economic Offenders Act, 2018
The backdrop against which the FEOA was enacted deserves careful examination. India witnessed several high-profile cases of economic offenders fleeing the country after committing massive frauds. The Punjab National Bank scam, involving fraudulent transactions exceeding Rs. 13,000 crores, became a watershed moment that exposed the vulnerabilities in India’s legal system. Diamond merchants Nirav Modi and Mehul Choksi, along with liquor baron Vijay Mallya, became the faces of this phenomenon, having allegedly defrauded banks of thousands of crores and subsequently leaving India to avoid facing prosecution.
These cases revealed a troubling pattern: offenders would siphon off enormous amounts of money, typically through complex corporate structures and fraudulent banking transactions, and then relocate to jurisdictions that either did not have extradition treaties with India or where the extradition process was protracted and uncertain. Even when extradition proceedings were initiated, they often stretched over years, during which the offenders lived comfortable lives abroad while their victims suffered financial losses. The existing legal provisions under the Code of Criminal Procedure, 1973, and various economic legislations were insufficient to address this challenge effectively.
The Act was introduced with several key objectives. First, it seeks to deter economic offenders from evading Indian law by staying outside the jurisdiction of Indian courts. The deterrent effect is achieved through provisions that allow for the confiscation of all assets of the fugitive economic offender, making flight from India an unattractive option. Second, the legislation aims to preserve the sanctity of the rule of law in India by ensuring that no individual, regardless of their wealth or influence, can escape justice by simply leaving the country. Third, it provides a mechanism to enable banks and other financial institutions to recover at least a portion of their dues by allowing the confiscation and subsequent auction of the fugitive’s assets.
The Statement of Objects and Reasons accompanying the Bill highlighted that the menace of economic offenders fleeing the country had reached alarming proportions, with several high-profile individuals evading the legal process. Most such cases involved non-repayment of bank loans, thereby worsening the financial health of the banking sector. The legislation was therefore conceived as a necessary tool to address this crisis and send a strong message that India would no longer be a safe haven for those who defraud its financial system and then flee.
Key Provisions and Legal Framework of the Act
The Fugitive Economic Offenders Act, 2018, consists of fourteen sections that collectively establish a comprehensive framework for dealing with fugitive economic offenders. The Act defines a “fugitive economic offender” as any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, where the total value involved in such offences is at least one hundred crore rupees, and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution. [1]
This definition contains several critical elements that must be satisfied before an individual can be declared a fugitive economic offender. First, there must be a warrant for arrest issued by a competent court. This requirement ensures that the proceedings under the FEOA can only be initiated against individuals who are already facing serious criminal charges. Second, the offence must be a “scheduled offence” as listed in the Schedule to the Act, which includes a wide range of economic offences such as counterfeiting government stamps or currency, offences relating to public servants taking gratification, cheque dishonour for insufficiency of funds, benami transactions, money laundering, and criminal breach of trust. Third, the value involved must exceed one hundred crore rupees, establishing a high threshold that limits the application of this stringent law to cases of significant economic magnitude. Finally, the individual must have either left India to avoid prosecution or, while being abroad, refuses to return.
The procedural framework established by the Act begins with Section 4, which empowers a Director or Deputy Director appointed under the Prevention of Money-Laundering Act, 2002 (PMLA) to file an application before a Special Court designated under the PMLA. This application must be filed in cases where a warrant has been issued for a scheduled offence and the Director or Deputy Director has reason to believe that the individual has left India to avoid prosecution or refuses to return. The application must contain several key elements: reasons to believe that the person is a fugitive economic offender, any information available about the person’s whereabouts, a list of properties believed to be proceeds of crime, a list of benami properties or foreign properties for which confiscation is sought, and a list of any other persons having an interest in these properties.
Upon receiving such an application, Section 5 mandates that the Special Court shall issue notice to the individual requiring him to appear at a specified place and at least six weeks from the date of issue of notice. The notice must also inform the individual that failure to appear will result in proceedings for declaring him a fugitive economic offender. This provision ensures that principles of natural justice are followed and the individual is given adequate opportunity to present himself before the court.
The Act contains important provisions regarding the attachment of property. Section 8 empowers the Director or Deputy Director to attach property provisionally even before obtaining the permission of the Special Court, provided that an application for such attachment is filed before the court within thirty days of the attachment. The property shall remain attached for a period of one hundred and eighty days from the date of attachment, which may be extended by the Special Court. This provisional attachment mechanism ensures that the fugitive’s properties cannot be dissipated while the proceedings are ongoing.
Section 12 of the Act deals with the declaration of fugitive economic offender and confiscation of property. Once the Special Court, after considering the application and hearing the matter, comes to the conclusion that the individual is a fugitive economic offender, it may declare him as such and order confiscation of his properties. The properties that may be confiscated include: proceeds of crime in India or abroad involved in the scheduled offence; benami property in India or abroad; and any other property in India or abroad. Upon confiscation, all rights and title in such property shall vest in the Central Government, free from all encumbrances. The Central Government is empowered to appoint an Administrator to manage and dispose of such confiscated properties.
A particularly significant provision is Section 14, which states that notwithstanding anything contained in any other law for the time being in force, an individual who has been declared a fugitive economic offender, or any company associated with such individual, shall not be allowed to file or defend any civil claim before any court or tribunal. This provision has far-reaching implications for corporate entities and creates serious consequences for companies associated with fugitive economic offenders.
Intersection with Company Law: Corporate Implications and Consequences
The relationship between the Fugitive Economic Offenders Act and the Companies Act, 2013, presents a complex matrix of legal implications that affect corporate governance, insolvency proceedings, and stakeholder rights. While the FEOA primarily targets individuals, its provisions extend to companies associated with fugitive economic offenders, creating significant collateral consequences for corporate entities.
Under the Companies Act, 2013, companies are separate legal entities distinct from their promoters, directors, and shareholders. However, the FEOA’s provision in Section 14, which bars companies “associated with” a fugitive economic offender from filing or defending civil claims, challenges this fundamental principle of corporate law. The term “associated with” is not defined in the Act, leaving room for judicial interpretation regarding the extent and nature of association that would trigger this prohibition. Does it include companies where the fugitive economic offender is a director? A major shareholder? A beneficial owner through benami arrangements? These questions have significant practical implications for corporate stakeholders.
The intersection becomes particularly complex in the context of corporate insolvency and liquidation proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC). When a company is undergoing liquidation, the role of the Official Liquidator is to realize the assets of the company and distribute them among creditors according to the waterfall mechanism prescribed under Section 53 of the IBC. However, if the company is associated with a fugitive economic offender and properties of the company are subject to confiscation under the FEOA, questions arise regarding the priority of claims. Would the confiscation under FEOA take precedence over the distribution to creditors under IBC? How should the liquidator deal with properties that are both subject to liquidation proceedings and potential confiscation?
These issues are further complicated by the fact that the FEOA allows for confiscation of “any other property in India or abroad” belonging to the fugitive economic offender. If a fugitive economic offender has controlling interest in a company, could the shares themselves be considered his property and therefore subject to confiscation? If confiscated, what happens to the rights of minority shareholders and other stakeholders in the company? The Act does not provide clear answers to these questions, leaving them to be resolved through judicial interpretation.
Moreover, the prohibition on filing or defending civil claims under Section 14 creates practical difficulties for companies. A company associated with a fugitive economic offender would be unable to recover debts owed to it, defend itself against claims by creditors or other parties, or participate in any civil litigation. This effectively paralyzes the company’s legal capacity, which could have severe consequences for its operations, its creditors, and its employees. The provision appears to operate as a form of civil death for the company, even though the company itself may not have been involved in any wrongdoing.
The Companies Act contains several provisions dealing with oppression and mismanagement under Sections 241 to 246, which allow the National Company Law Tribunal (NCLT) to intervene when the affairs of a company are being conducted in a manner prejudicial to public interest or the interests of the company. The question arises whether the NCLT’s powers under these provisions would be affected when a company is associated with a fugitive economic offender. Can minority shareholders still approach the NCLT seeking relief against oppression, or would Section 14 of FEOA bar such proceedings?
Another area of intersection concerns the provisions relating to directors under the Companies Act. Section 164 of the Companies Act lists various disqualifications for appointment as a director. While the section does not explicitly mention being declared a fugitive economic offender as a ground for disqualification, the practical effect of such a declaration would make it impossible for the individual to function as a director. Furthermore, if properties are confiscated and vest in the Central Government under Section 12 of FEOA, the fugitive economic offender would lose ownership of any shares he held in companies, which would automatically disqualify him from being a director under Section 164(1)(d), which disqualifies any person whose directorship disqualifies him from being appointed in that company.
The Act also intersects with the provisions relating to Related Party Transactions under Section 188 of the Companies Act. If a company has entered into transactions with entities owned or controlled by an individual who is subsequently declared a fugitive economic offender, questions arise regarding the validity and treatment of such transactions. Can such transactions be challenged or set aside? Would they be considered voidable transactions under insolvency law if the company subsequently enters insolvency proceedings?
Procedural Aspects and Stages of Proceedings
The procedural framework established by the Fugitive Economic Offenders Act involves multiple stages, each with its own requirements and legal consequences. Understanding these stages is crucial for legal practitioners and corporate professionals dealing with matters involving potential or declared fugitive economic offenders.
The first stage involves the initiation of proceedings through the filing of an application by a Director or Deputy Director appointed under the Prevention of Money-Laundering Act, 2002. This threshold requirement ensures that the proceedings are initiated by experienced officers who are already dealing with money laundering and economic offences. The application must satisfy several conditions: there must be a warrant of arrest issued by a court for a scheduled offence; the value involved must be at least one hundred crore rupees; and there must be reason to believe that the individual has left India to avoid prosecution or refuses to return. The application must be accompanied by supporting material that establishes these facts.
Once the application is filed before the Special Court, the court examines whether the basic requirements are satisfied. If satisfied, the court proceeds to the second stage, which involves issuing notice to the alleged fugitive economic offender. The notice must clearly specify the place where the individual is required to appear and must provide at least six weeks’ time. The notice must also contain a clear warning that failure to appear will result in proceedings for declaring the individual as a fugitive economic offender. The notice provisions are designed to ensure compliance with principles of natural justice, giving the individual adequate opportunity to respond to the allegations.
During the notice period, the Director or Deputy Director may seek provisional attachment of properties under Section 8 of the Act. This provisional attachment can be made even without prior permission of the Special Court, but an application must be filed within thirty days. The provisional attachment serves an important purpose: it prevents the dissipation of assets during the pendency of proceedings. However, the Act also provides safeguards by limiting the duration of provisional attachment to one hundred and eighty days, which can be extended by the Special Court. If at the conclusion of proceedings the person is not found to be a fugitive economic offender, the attached properties must be released.
The third stage involves the consideration of the application by the Special Court. If the individual appears before the court in response to the notice, the proceedings under the FEOA are terminated, though other criminal proceedings may continue. However, if the individual fails to appear despite being served notice, the court proceeds to examine whether he should be declared a fugitive economic offender. This examination involves considering the evidence regarding whether the individual has indeed left India to avoid prosecution or refuses to return, whether the scheduled offence involves property of the value of at least one hundred crore rupees, and whether other requirements of the Act are satisfied.
The final stage involves the declaration and confiscation. If the Special Court concludes that the individual is a fugitive economic offender, it makes a formal declaration to that effect and proceeds to order confiscation of properties. The confiscation extends to three categories of properties: proceeds of crime in India or abroad; benami property in India or abroad; and any other property in India or abroad owned by the fugitive economic offender. The order of confiscation must specify the properties being confiscated and their estimated value. Once confiscation is ordered, all rights and title in the property vest in the Central Government free from all encumbrances.
An important procedural aspect is the right to appeal. Section 13 of the Act provides that an appeal shall lie against any order of the Special Court under the Act to the High Court within thirty days from the date of the order. This appellate mechanism provides an important safeguard, allowing for judicial review of the Special Court’s decision by a higher forum.
Landmark Case Law: Mehul Choksi v. State of Maharashtra
The case of Mehul Choksi v. State of Maharashtra and Others provides valuable insights into how courts interpret and apply the provisions of the Fugitive Economic Offenders Act in practice. Mehul Choksi, a prominent diamond merchant and uncle of Nirav Modi, fled India in January 2018, shortly before the Punjab National Bank fraud came to light. The Enforcement Directorate subsequently filed applications under the FEOA seeking to declare him a fugitive economic offender and confiscate his properties.
The Bombay High Court’s examination of this matter has been instrumental in clarifying several aspects of the Act’s application. One of the key issues that arose was the timing and sequence of proceedings under Section 12 of the Act. The court observed that Section 12 contemplates two distinct stages: first, the declaration of an individual as a fugitive economic offender; and second, the confiscation of properties. The court emphasized that these stages are sequential and must be followed in order.
In the context of this case, an application had been filed seeking to issue notice to the Official Liquidator to appear and represent Gili India Ltd., a company associated with Mehul Choksi that was undergoing liquidation. The question before the court was whether such an application could be considered at the stage when the matter of declaration was pending but confiscation had not yet been reached. The Bombay High Court held that the application could not be considered at that stage, as the matter of confiscation was not to be taken up until after the declaration was made. The court indicated that such applications could be taken up at an appropriate stage, subject to the result of the declaration sought under Section 4 read with Section 12 of the FEOA.
This judicial interpretation has important practical implications. It establishes that proceedings under the Act must follow a clear sequence: first, the court must determine whether the individual qualifies as a fugitive economic offender and make a declaration to that effect; only after such declaration can the court proceed to consider matters relating to confiscation of specific properties. This sequencing ensures that confiscation proceedings are not initiated prematurely and that the fundamental question of whether the individual is indeed a fugitive economic offender is first conclusively determined.
In September 2023, the Bombay High Court delivered another significant judgment in the matter of Mehul Choksi, rejecting his challenge to the Enforcement Directorate’s application to declare him a fugitive economic offender. [2] Justice Sarang V. Kotwal, presiding over the matter, examined the various contentions raised by Choksi and ultimately concluded that the Enforcement Directorate had made out a sufficient case for declaring him a fugitive economic offender. This judgment reinforced the effectiveness of the FEOA as a tool to deal with economic offenders who flee the country.
The Mehul Choksi cases also highlight the challenges in applying the Act when the alleged fugitive economic offender is abroad and unable to participate directly in proceedings. The courts have had to balance the requirements of natural justice with the reality that the individual has chosen to remain outside India’s jurisdiction. The judgments establish that while the individual must be given adequate notice and opportunity to appear, the proceedings can continue even in his absence if he chooses not to return to India.
Other Notable Cases: Application and Enforcement of FEOA
Beyond the Mehul Choksi matter, the Fugitive Economic Offenders Act has been applied in several other high-profile cases, each contributing to the evolving jurisprudence around this legislation. Vijay Mallya, the former chairman of Kingfisher Airlines and United Spirits, became one of the first individuals to be declared a fugitive economic offender under the Act. Mallya was accused of defaulting on loans exceeding Rs. 9,000 crores and had fled to the United Kingdom in March 2016. [3]
In January 2019, the Special Court in Mumbai declared Vijay Mallya a fugitive economic offender, marking a significant milestone in the application of the Act. The court ordered the confiscation of his properties, both in India and abroad. This declaration and the subsequent confiscation proceedings demonstrated the Act’s potential to reach assets globally, not just those within India’s territorial boundaries. The case also highlighted the Act’s deterrent effect, as it sent a strong message to other potential fugitives that leaving India would not protect their assets from being seized.
Nirav Modi, the diamantaire at the center of the Punjab National Bank fraud, was also declared a fugitive economic offender. Modi had allegedly masterminded a fraud involving the issuance of fraudulent Letters of Undertaking by officials at PNB, resulting in losses exceeding Rs. 13,000 crores. He left India in January 2018 and was subsequently tracked to the United Kingdom, where he was arrested and has been fighting extradition. The declaration of Modi as a fugitive economic offender allowed Indian authorities to proceed with confiscation of his properties, including luxury apartments, art collections, and business assets.
These cases collectively establish several important principles. First, they demonstrate that the Act applies regardless of how sophisticated or complex the corporate structures used to commit the fraud. Both Mallya and Modi had used intricate networks of companies and offshore entities, but the Act’s provisions allowed authorities to pierce through these structures. Second, they show that the Act operates independently of extradition proceedings. Even while extradition cases are ongoing in foreign courts, the FEOA allows Indian courts to declare individuals as fugitive economic offenders and confiscate their properties.
According to information provided to the Rajya Sabha in August 2023, ten individuals have been declared fugitive economic offenders by courts since the Act’s enactment. [4] This list includes not just the high-profile names like Mallya, Modi, and Choksi, but also other individuals involved in various economic offences. The relatively modest number of declarations suggests that the Act is being applied judiciously, targeting only those cases that meet the stringent requirements, particularly the threshold of one hundred crore rupees.
Regulatory Framework and Enforcement Mechanisms
The enforcement of the Fugitive Economic Offenders Act relies on a coordinated effort among multiple agencies and institutions. The Enforcement Directorate, functioning under the Department of Revenue, Ministry of Finance, plays the primary role in initiating and pursuing proceedings under the Act. The ED’s officers, particularly those holding the rank of Director or Deputy Director, are empowered to file applications before Special Courts seeking declaration of fugitive economic offenders.
The Prevention of Money-Laundering Act, 2002 (PMLA) forms the backbone of the regulatory framework within which the FEOA operates. The Special Courts designated under the PMLA are the same courts that have jurisdiction to hear applications under the FEOA. This creates a seamless integration between money laundering proceedings and fugitive economic offender proceedings, as both typically arise from the same underlying facts and circumstances. The officers appointed under the PMLA are vested with the responsibility of implementing the FEOA, bringing their expertise in financial investigations and asset tracing to bear on fugitive economic offender cases.
The regulatory framework also involves coordination with international agencies and foreign governments. Since fugitive economic offenders are, by definition, located outside India, enforcement often requires cooperation through mutual legal assistance treaties (MLATs), extradition treaties, and other bilateral or multilateral arrangements. The confiscation of foreign properties under Section 12 of the Act, for instance, may require the cooperation of authorities in the country where the properties are located. While Indian courts can order confiscation of such properties, giving effect to such orders may depend on the legal framework of the foreign jurisdiction and the nature of India’s legal relationship with that country.
The Central Government plays a crucial role in the post-confiscation phase. Once properties are confiscated and vest in the Central Government under Section 12, the government must appoint an Administrator to manage and dispose of these properties. The Administrator’s role is to maximize the value realized from confiscated properties, which can then be used to compensate victims of the economic offences. The regulatory framework for the Administrator’s functioning, including procedures for valuation, auction, and distribution of proceeds, is established through rules and guidelines issued by the government.
The Act also provides the Director or Deputy Director with powers similar to those of a civil court, including powers to summon and enforce attendance of witnesses, require discovery and production of documents, receive evidence on affidavits, and issue commissions for examination of witnesses or documents. These powers are essential for conducting thorough investigations and preparing comprehensive applications for declaring individuals as fugitive economic offenders.
Challenges, Criticisms, and Legal Debates
Despite its important objectives and initial successes, the Fugitive Economic Offenders Act has been subject to various criticisms and legal debates. One major concern relates to the broad scope of confiscation powers under Section 12, particularly the provision allowing confiscation of “any other property in India or abroad” owned by the fugitive economic offender. Critics argue that this provision could potentially result in confiscation of properties that have no connection to the scheduled offence, effectively operating as a form of punishment without trial.
The constitutional validity of certain provisions has been questioned on grounds of violation of fundamental rights. Article 21 of the Constitution guarantees protection of life and personal liberty, and Article 300A protects the right to property. While the right to property is no longer a fundamental right, it remains a constitutional right that cannot be deprived except by authority of law. The question arises whether the FEOA’s provisions for confiscation, which operate even when the individual has not been convicted of any offence, satisfy the requirement of being a reasonable restriction.
The provision in Section 14, which bars companies associated with fugitive economic offenders from filing or defending civil claims, has been particularly controversial. Critics point out that this provision effectively punishes corporate entities and their stakeholders for the actions of individuals associated with them, even when the companies themselves may not have been involved in wrongdoing. The lack of clarity regarding what constitutes being “associated with” a fugitive economic offender creates uncertainty and potential for arbitrary application.
Another challenge relates to the definition of “fugitive economic offender” and particularly the element that the person must have left India “so as to avoid criminal prosecution.” Proving the intent to avoid prosecution can be difficult, especially when individuals may have legitimate reasons for being abroad. The Act does not specify what evidence would be sufficient to establish this element, leaving it to judicial interpretation. There is a risk that the provision could be applied too broadly, potentially catching individuals who left India for legitimate business or personal reasons before any proceedings were initiated against them.
The high threshold of one hundred crore rupees, while intended to limit the Act’s application to serious cases, has also been criticized. Some argue that this threshold may be too high, allowing offenders involved in substantial but somewhat smaller frauds to escape the Act’s provisions. Others contend that economic offences should not be judged primarily by the amount involved, as even smaller frauds can have devastating consequences for victims.
From a practical standpoint, enforcing confiscation orders, particularly regarding foreign properties, presents significant challenges. Different countries have different legal systems and approaches to recognizing foreign court orders. Even when India has legal cooperation mechanisms with another country, the process of enforcing confiscation orders can be lengthy and uncertain. The Act does not address how these practical challenges should be overcome.
There are also concerns about the potential for misuse. The Act gives significant powers to the Enforcement Directorate, and there is always a risk that such powers could be misused for ulterior purposes. The absence of detailed guidelines on when proceedings should be initiated, combined with the severe consequences of being declared a fugitive economic offender, creates potential for the Act to be used as a tool for harassment or intimidation.
Conclusion and Future Outlook
The Fugitive Economic Offenders Act, 2018, represents a significant development in India’s legal framework for dealing with economic crimes. By creating a specific mechanism to declare individuals as fugitive economic offenders and confiscate their properties, the Act addresses a critical gap that had allowed wealthy offenders to escape justice by fleeing the country. The Act’s provisions, particularly when read in conjunction with the Companies Act, 2013, and the Insolvency and Bankruptcy Code, 2016, create a comprehensive legal framework that affects corporate governance and insolvency proceedings.
The early years of the Act’s implementation have demonstrated both its potential and its limitations. Cases like those of Vijay Mallya, Nirav Modi, and Mehul Choksi have shown that the Act can be effectively applied to pursue high-profile economic offenders and confiscate substantial assets. These cases have also contributed to developing jurisprudence on various aspects of the Act, including the procedural requirements, the sequence of declaration and confiscation, and the intersection with other laws.
However, several questions remain unanswered and will need to be addressed through further judicial interpretation and possibly legislative amendment. The scope of confiscation powers, the meaning of companies “associated with” fugitive economic offenders, the balance between enforcement and protection of rights, and the practical challenges of international enforcement all require ongoing attention. As courts continue to hear cases under the Act, we can expect the development of more detailed principles and guidelines on these issues.
Looking forward, the effectiveness of the FEOA will depend not just on its legal provisions but also on the capacity and efficiency of enforcement agencies, the cooperation of foreign governments, and the judicial system’s ability to handle these complex cases expeditiously. The Act’s success should ultimately be measured not just by the number of declarations and confiscations, but by its deterrent effect in preventing economic offenders from fleeing India in the first place.
For corporate professionals, legal practitioners, and business entities, understanding the implications of the FEOA is essential. Companies must ensure robust compliance mechanisms, conduct thorough due diligence on promoters and directors, and maintain transparent corporate structures. The risk of being classified as a company “associated with” a fugitive economic offender, with all its severe consequences, makes it imperative for corporate entities to maintain high standards of governance and distance themselves from individuals involved in economic offences.
The Fugitive Economic Offenders Act, 2018, thus stands as a crucial component of India’s economic regulatory framework, one that balances the need for strong enforcement against economic crimes with the requirements of due process and fairness. As the law continues to evolve through application and interpretation, it will shape not just how India deals with fugitive economic offenders, but also how businesses structure themselves and conduct their affairs in an increasingly globalized economy.
References
[1] India Code: The Fugitive Economic Offenders Act, 2018. Available at: https://www.indiacode.nic.in/handle/123456789/4035
[2] Bar and Bench (2023). “Bombay High Court rejects plea by Mehul Choksi challenging ED application to declare him a fugitive economic offender.” Available at: https://www.barandbench.com/news/bombay-high-court-rejects-plea-mehul-choksi-ed-declare-fugitive-economic-offender
[3] Business Standard (2023). “10 people declared fugitive economic offenders since 2018: Centre.” Available at: https://www.business-standard.com/india-news/10-people-declared-fugitive-economic-offenders-since-2018-centre-123080100782_1.html
[4] PRS Legislative Research. “The Fugitive Economic Offenders Bill, 2018 – Bill Summary.” Available at: https://prsindia.org/billtrack/prs-products/prs-bill-summary-3025
[5] Enforcement Directorate, Government of India. “FEOA.” Available at: https://enforcementdirectorate.gov.in/feoa
[6] Drishti IAS (2024). “Fugitive Economic Offenders Act, 2018.” Available at: https://www.drishtiias.com/daily-news-analysis/fugitive-economic-offenders-act-2018
[7] LiveLaw (2023). “Bombay High Court Rejects Mehul Choksi’s Challenge To ED’s Application Seeking His Declaration As A Fugitive Economic Offender.” Available at: https://www.livelaw.in/high-court/bombay-high-court/bombay-high-court-mehul-choksi-fugitive-economic-offender-ed-pnb-fraud-238359
[8] Wikipedia. “Punjab National Bank Scam.” Available at: https://en.wikipedia.org/wiki/Punjab_National_Bank_Scam
