To Better Utilise Seized Properties, Govt To Rope In NBCC

To deal with absconding fraudsters and loan defaulters such as Nirav Modi and Vijay Mallay, the government on March 12 tabled the Fugitive Economic Offenders Bill, 2018. Under the provisions of the Bill, the government will seize and sell assets those defaulters who have an outstanding of Rs 100 crore or over and have escaped from the country.

Such offenders could also be booked under the Prevention of Money Laundering Act (PMLA). However, the existing law is inadequate to deal with the severity of the problem.

Under the PMLA, only “profit of crime” could be confiscated by the government “upon conviction”. Under the new law, all the assets of a fugitive offender would be seized by the government.

Simultaneously, the Centre is also making plans to ensure the immovable assets seized in money laundering cases are better maintained. As it stands today, the Enforcement Directorate (ED maintains the properties that confiscates in money laundering cases. Since the agency has no experience in doing so, properties worth billions lie vacant, deteriorating. Under the current legal framework, the government cannot rent these properties to generate revenues. Auction is the only way to recover money, but the Mallya example shows that is no easy task either.

Taking that into account, the Centre may soon entrust the National Building Construction Corporation (NBCC) with the job of maintaining the seized properties — the NBCC’s specialised arm NBCC Services Limited (NSL) handles such work for the Central government and public sector undertakings.

Amendments might be made in the law to empower the agency, the only land authorised agency for central undertakings, to rent these properties to earn revenues.

According to media reports, a high-level meeting that was attended by officials of the finance ministry and the NBCC was held on March 13 to discuss the possibility. About six months ago, the ED had suggested the idea. If the suggestions are accepted, the NBCC would also be managing properties for intelligence agencies and police establishments that have in their possession prime land in major cities, measuring in several thousand acres, and prime properties worth several billions.

With inputs from Housing News