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Financial Fraud Committed Abroad by Indian Citizens: Legal Remedies in India

 

Financial Fraud Committed Abroad by Indian Citizens: Legal Remedies in India

In recent years, there has been a noticeable uptick in cases where Indian nationals, after securing substantial loans or engaging in financial activities abroad, return to India without fulfilling their financial obligations. This trend has raised significant legal and ethical concerns, especially when such individuals attempt to evade accountability by leveraging jurisdictional boundaries.

Understanding the Legal Framework

1. Jurisdiction Over Offences Committed Abroad

Under Indian law, specifically Section 208 of the BNSS (Bharatiya Nagarig Suraksha Sanhita, 2023 before amendment, Section 188 of the Code of Criminal Procedure (CrPC), Indian courts have the jurisdiction to try offences committed by Indian citizens outside the country. However, this is contingent upon obtaining prior sanction from the Central Government before initiating prosecution. (restthecase.com, scconline.com)

2. Relevant Legal Provisions

  • Indian Penal Code (IPC): Sections pertaining to cheating (Section 420), criminal breach of trust (Section 406), and forgery (Sections 463-471) are often invoked in financial fraud cases.
  • BNSS Section 208: As mentioned, this section allows for the prosecution of offences committed outside India, subject to the approval by the governmental approval.

Case Study: Kerala High Court's Stance

In a notable judgment, the Kerala High Court refused to quash an FIR against a businessman accused of defrauding a UAE-based bank of ₹135 crores. The court emphasized the importance of maintaining India's credibility abroad and ensuring that such frauds are not perpetuated without legal consequences. (scconline.com)

Procedures for Filing a Criminal Case in India

  1. Filing an FIR: The aggrieved party can lodge a First Information Report (FIR) with the local police station where the accused resides or is currently located.
  2. Investigation: Upon registering the FIR, the police will initiate an investigation, gathering evidence and statements from the accused person.
  3. Seeking Government Sanction: For offences committed abroad, the investigating agency must obtain sanction from the Central Government under Section 208 of the BNSS (Bharatiya Nagarig Suraksha Sanhita, 2023 before proceeding to trial.
  4. Trial: Once sanction is granted, the case proceeds to trial in the appropriate court.

Options for Recovering the Defrauded Money

1. Civil Suits

The aggrieved party can file a civil suit for recovery of the amount defrauded. This involves presenting evidence of the financial transaction and the breach thereof.

2. Attachment of Property

Under the provisions of the Civil Procedure Code, courts can order the attachment of the accused's property to secure the claim amount.

3. Mutual Legal Assistance Treaties (MLATs)

India has MLATs with several countries, facilitating cooperation in criminal matters, including the recovery of assets and sharing of evidence.

4. Interpol Red Notices

In cases where the accused has fled India, law enforcement agencies can request Interpol to issue a Red Notice, aiding in the apprehension and extradition of the individual.

5.  Criminal Complaint:

Victims can file a criminal complaint, particularly with the Economic Offences Wing (EOW), leading to potential prosecution and asset recovery. 

6.  Regulatory Bodies:

Complaints can be lodged with regulatory bodies like SEBI and RBI, which can investigate and facilitate fund recovery. 

 7.  Specialized Government Agencies:

Agencies like the Enforcement Directorate (ED) and Serious Fraud Investigation Office (SFIO) can investigate and take action. 

8.  Cyber Crime Reporting Portal:

The National Cyber Crime Reporting Portal can be used to report financial fraud 

 

Conclusion

Financial frauds committed abroad by Indian citizens pose significant challenges to the legal system. However, with the existing legal provisions and international cooperation mechanisms, it is possible to prosecute offenders and recover defrauded amounts. Engaging experienced legal counsel is crucial in navigating these complex cases and ensuring justice is served.

For personalized legal assistance on matters related to financial fraud and recovery, please contact our law firm. Our team of experts is equipped to guide you through every step of the legal process.


 

 


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