Efficacy Of The Current Legal Framework Against Borrower Defaulters And Fugitive Economic Offenders
Swati Gupta, Research Scholar, Department of Law, Punjabi University, Patiala
ABSTRACT
India's banking sector has, for over two decades, grappled with wilful loan default and the flight of high-profile debtors beyond the reach of domestic courts.1 Parliament has responded through a layered statutory architecture, namely the Recovery of Debts and Bankruptcy Act, 1993, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Insolvency and Bankruptcy Code, 2016, and, more recently, the Fugitive Economic Offenders Act, 2018, each designed to close gaps left by its predecessor. This paper examines whether that architecture, taken together, has succeeded in deterring default, expediting recovery, and bringing offenders who abscond abroad to account. Drawing on the trajectories of prominent absconders such as Vijay Mallya, Nirav Modi and Mehul Choksi, it is argued that while the 2018 Act has proved effective at confiscating domestic assets, its coercive value is substantially blunted by the slow pace of foreign extradition proceedings, jurisdictional friction with requested states, and insufficient coordination among India's own enforcement agencies. The paper concludes with recommendations for tightening inter-agency coordination, strengthening mutual legal assistance mechanisms, and aligning India's asset-recovery regime more closely with comparable civil recovery models abroad.
