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Contents
News: Recently, Supreme Court suggested halting criminal proceedings against economic fugitives, who are willing to repay the money they owe to lenders and others they defrauded.
This article discusses that government should revisit its current stance on fugitive economic offenders.
What is the case?
The co-accused in the Sterling Biotech fraud case has claimed that he had repaid a portion of the money and would repay the remaining amount. But he is looking for protection from prosecution and harassment by investigating agencies. But the CBI isn’t willing to leave him because the law doesn’t allow it to use discretion.
Why SC’s suggestions should be taken seriously?
One, this will save resources like time, money, and effort of investigating agencies like ED and CBI who are trying to bring fugitives back from foreign jurisdictions. Also, the legal process on extradition is lengthy.
Two, the government has allowed investigating agencies to go after high-value offenders via the Fugitive Economic Offenders Act, 2018. The act allows quick seizure and sale of their assets. But such fugitives have assets in foreign countries, or they have Benami assets that are away from the eyes of agencies.
Three, the legal processes, paperwork, and evidence required in each country are different. However, the end goal of banks and investigating agencies is to recover the money, criminalization will make the process more complex.
What is the way forward?
First, the government can explore option of imposing monetary penalties. For example, SEBI imposes a monetary penalty on insider trading. It helps in avoiding costly litigation and also penalizes violators.
Second, adopt US’s plea-bargaining method. It is also known as a deferred prosecution agreement. This helps in avoiding criminal prosecution of company executives in place of fines and compliance monitoring in a court-approved deal.
Source: This post is based on the article “Show Me the Money” published in Times of India on 3rd Feb 2022.
