Fugitive Economic Offenders Act, 2018 is a legislation that provides for the confiscation of properties and assets of persons who are accused of specified economic offences involving amounts of Rs 100 crore or more and who have absconded from India to avoid criminal prosecution. Under Indian law, the Act empowers the Enforcement Directorate to apply to a Special Court for declaring a person as a "fugitive economic offender" and confiscating their properties — both in India and abroad — including properties not directly linked to the offence.
Legal definition
The Fugitive Economic Offenders Act, 2018 defines:
Section 2(1)(f) — "Fugitive economic offender": Any individual against whom — (i) an arrest warrant has been issued by any court in India in respect of a scheduled offence; and (ii) who has left India so as to avoid criminal prosecution; or being abroad, refuses to return to India to face criminal prosecution.
Section 2(1)(m) — "Scheduled offence": An offence specified in the Schedule, if the total value involved in such offence or offences is one hundred crore rupees or more.
Scheduled offences include offences under:
- Indian Penal Code (fraud, cheating, forgery, criminal breach of trust)
- Prevention of Corruption Act, 1988
- SEBI Act, 1992
- Customs Act, 1962
- PMLA, 2002
- Companies Act, 2013
- Limited Liability Partnership Act, 2008
- Insolvency and Bankruptcy Code, 2016
Process for declaring a person as fugitive:
| Step | Action | Section |
|---|---|---|
| 1 | ED files application before Special Court | Section 4 |
| 2 | Court issues notice to the individual | Section 10 |
| 3 | Individual must appear within 6 weeks | Section 10 |
| 4 | If individual does not appear, Court may declare as fugitive | Section 12 |
| 5 | Court orders confiscation of all properties | Section 12(1) |
| 6 | Confiscated property vests in Central Government | Section 15 |
Scope of confiscation (Section 12): The Court may confiscate:
- Proceeds of crime in India or abroad
- Any other property owned by the fugitive in India or abroad
- Benami property of the fugitive
- Properties of any person who is a "related person" or holds property on behalf of the fugitive
This is significantly broader than PMLA confiscation (which is limited to proceeds of crime) — the FEOA permits confiscation of ALL properties of the declared fugitive, regardless of their connection to the offence.
How courts have interpreted this term
Vijay Mallya case (Special Court, Mumbai)
Vijay Mallya became the first person to be declared a fugitive economic offender under the Act in January 2019. The Special Court found that Mallya had left India in March 2016 and refused to return despite arrest warrants in connection with the IDBI Bank loan fraud (involving approximately Rs 900 crore). The Court ordered confiscation of properties worth over Rs 12,000 crore, including shares, bank balances, immovable properties, and luxury assets. The case established the procedural framework for FEOA applications and demonstrated the Act's broad confiscation power.
Nirav Modi case (Special Court, Mumbai)
Nirav Modi, accused in the Punjab National Bank fraud (approximately Rs 13,578 crore), was declared a fugitive economic offender in December 2019. The Special Court ordered confiscation of assets worth approximately Rs 1,400 crore, including properties in India, the UK, and the UAE. The case clarified that the Act applies even when the accused is in a foreign jurisdiction and extradition proceedings are pending.
Mehul Choksi case (Special Court)
Mehul Choksi, co-accused in the PNB fraud, was declared a fugitive economic offender. The case raised questions about the interaction between FEOA and citizenship/extradition issues — Choksi had obtained Antiguan citizenship. The Special Court held that change of citizenship does not affect FEOA proceedings if the conditions (arrest warrant + absence from India) are met.
Why this matters
The FEOA was enacted in direct response to high-profile cases of economic offenders — Vijay Mallya, Nirav Modi, Mehul Choksi — who fled India after allegedly committing massive financial frauds and were beyond the reach of conventional criminal enforcement. The traditional legal framework (PMLA, CrPC extradition) was slow and limited to proceeds of crime, allowing fugitives to retain significant assets not directly linked to the offence.
The Act's most powerful feature is the breadth of confiscation. Unlike PMLA (which allows confiscation only of proceeds of crime), the FEOA permits confiscation of ALL properties — including legitimately acquired assets, properties held through family members or associates, and assets located abroad. This creates a powerful deterrent against absconding, as the fugitive risks losing everything, not just the ill-gotten gains.
For lenders and creditors, the FEOA provides an additional recovery mechanism. When a borrower-turned-offender absconds, the confiscated properties vest in the Central Government, which can dispose of them — potentially enabling partial recovery. The Act does not expressly prioritise creditor claims over government confiscation, but in practice, the confiscation process is coordinated with the PMLA attachment and IBC proceedings.
Related terms
Enforcing agency:
Related legislation:
Related concepts:
Frequently asked questions
What is the Rs 100 crore threshold?
The FEOA applies only to scheduled offences where the total value involved is Rs 100 crore or more. This threshold ensures the Act targets only large-scale economic offenders. The value is computed based on the total amount involved in the offence (including loss caused), not the assets of the accused. Offences below Rs 100 crore are dealt with under PMLA and other existing laws.
Can a person declared as a fugitive challenge the order?
The individual can appear before the Special Court at any stage and contest the proceedings. If the person returns to India and appears before the Court, the proceedings can be terminated if the Court is satisfied. The fugitive can also challenge the confiscation order through appeal. However, under Section 14, a person declared as a fugitive is barred from filing or defending any civil claim in India — creating strong incentive to return.
How is the FEOA different from PMLA?
The key differences are: (a) FEOA requires a Rs 100 crore minimum; PMLA has no minimum; (b) FEOA allows confiscation of ALL properties of the fugitive; PMLA allows confiscation only of proceeds of crime; (c) FEOA applies only to persons who have absconded; PMLA applies to anyone involved in money laundering; (d) FEOA bars the fugitive from filing civil claims in India; PMLA has no such bar.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.