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Vijay Mallya Became the First Indian Tycoon To Be Declared Fugitive Economic Offender

Team SoOLEGAL 7 Jan 2019 10:11am

Vijay Mallya Became the First Indian Tycoon To Be Declared Fugitive Economic Offender


Vijay Mallya on Saturday became the first businessman to be declared an FEO under the Fugitive Economic Offenders Act which came into subsistence in August 2018.

Mumbai court declared Mallya a "Fugitive Economic Offender" (FEO) weeks after a UK court ordered his extradition, former liquor tycoon Mallya, accused of defaulting on loans of over Rs 9,000 crore, received another gust.

A special court in Mumbai declared absconding liquor baron Mallya a fugitive economic offender on a plea of the Enforcement Directorate. A Fugitive law is what gives the government power to put together all the assets of a person who’s been declared a fugitive and not just those attained from the proceeds of criminal activity. 

 Mallya, who is currently in the UK, be declared a fugitive and his properties be confiscated and brought under the control of the Union government as per the provisions of the new FEO Act as requested by ED from the Prevention of Money Laundering Act (PMLA). The Enforcement Directorate had shifted the special court for FEOA for this purpose. The request was made by agency from the court that Mallya, currently in the United Kingdom, be declared a fugitive and his properties be confiscated and brought under the control of the Union government as presented under the act. The extradition practice in the UK court was evidence that he was not willing to return which was contended by ED counsel D N Singh. Hence, the application was partly allowed by ED.

 

 Mallya was declared as Fugitive Economic Offender under section 12 (i) of the FEO Act. Judge M S Azmi in the order confiscated about his offence. Eventually, the same court is also hearing ED's plea to declare diamond merchants Nirav Modi and Mehul Choksi FEOs in the Punjab National Bank fraud case.

As to obtain full copy and move the high court lawyers of Mallya requested the court to stay the order for four weeks. The order was declined by the judge by saying a court under the FEO Act cannot stay its own order. The ED had argued that it made all possible attempts to bring Mallya back to India, but didn’t succeed.

Even after the London court upheld Indian authorities' plea for his extradition, Mallya decided to appeal against the order before the higher court there and refused to return, so he should be declared an FEO, Singh had disputed.

Mallya's lawyers challenged that as he had surrendered before a magistrate's court in London and obtained bail, he could not be entitled a fugitive. They had  inquired ED's claim that he left India under doubtful situation, arguing that he had left to attend a meeting of World Motor Sports as the director of an F1 team. He had shifted the Supreme Court seeking stay of proceedings under FEO Act.

 Under Section 4 of the Act the Senior Advocate Fali S Nariman sought for the stay of the proceedings for appearing for the liquor baron in the apex court, till further orders of the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) in the Appeals filed by SBI and 11 other banks.

The Appellate Tribunal under the PMLA had on October 10 restrained Mallya from dealing with and altering the status of specified movable and immovable properties or creating third party interest, directly or indirectly, till the next date. He was also required to maintain the status quo with regard to some properties.

Mallya's prayer was to stay FEO proceedings till proceedings under PMLA in the Appellate Tribunal are finalized.
Though the SC issued notice on the SLP where the stay was declined Mallya left India in March 2016. A court in London in December 2018 ordered his extradition, facing cases registered by the ED as well as the Central Bureau of Investigation, he is wanted for alleged fraud and money laundering amounting to an estimated Rs 9,000 crore.
A person can be declared a Fugitive Economic Offender if a warrant has been issued against him for an offence involving an amount of Rs 100 crore or more and he has left the country and refuses to return under the FEO Act.


Tagged: Vijay Mallya   London   Fugitive Economic Offender   Central Bureau of Investigation   UK     
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