In a second major setback for erstwhile liquor baron Vijay Mallya, the special court in Mumbai today declared has declared him a ‘Fugitive Economic Offender’, making him first businessman to be charged under the new anti fugitive law. This means now the government can initiate to confiscate his properties in alleged Rs. 9,000 crore loan default case.
On Saturday, Special Prevention of Money Laundering (PMLA) judge M.S. Azmi in his oral order declared Mallya, a fugitive economic offender under Section 12 of the act, on a plea of Enforcement Directorate (ED).
“Section 17 of the FEO act provides from the challenge of the proclamation in the High Court within 30 days and I am very sure that Mallaya’s lawyers will want to explore the option," said Zulfiqar Memon, managing partner of law firm MZM Legal. “More than anything, this order could mean that his properties can now be confiscated and sold by the Government, which may be most detrimental to Mallaya."
In July 2018, the ED had filed an application before the court, seeking to declare Mallya a ‘fugitive economic offender’ under the Fugitive Economic Offenders Act, 2018 and had also sought to immediately confiscate his assets of over Rs. 12,500 crore.
According to the new law, a fugitive economic offender is a person against whom an arrest warrant has been issued for his or her involvement in economic offences involving at least Rs. 100 crore or more and has left India to avoid prosecution.
“This is the second consecutive blow to the Vijay Mallya after the extradition order. However, in both the orders, there is a process of law to be followed and it is only natural that the orders will be challenged," adds Memon.
Earlier, Mallya had sought a stay on the hearing on ED’s plea to declare him a fugitive economic offender, but was turned down by the special PMLA court and subsequently by the Bombay High Court.
Later on December 10, the Westminster Magistrates Court in London also order in favour of Indian authorities’ plea to extradite Mallya to India. However, the ruling has been challenged in the High Court in the UK.
The ED is also trying to seek the similar ruling against Nirav Modi and his uncle Mehul Choksi- prime accused in over $2 billion Punjab National Bank (PNB) fraud case.
The verdict is a major breakthrough in the case for India’s investigation agencies, the Central Bureau of Investigation (CBI) and the enforcement directorate (ED), which have charged Mallya with defrauding loans of up to Rs. 9,000 crore.