CLAT PG Current Affairs — 24 May 2026

Delhi High Court declined to entertain Sanjay Bhandari's appeal in April 2026, invoking Section 14 of Fugitive Economic Offenders Act 2018 for the first time. This creates constitutional tension between access to justice under Articles 14, 21 and judicial discipline. FEO Act disentitles declared fugitive economic offenders from pursuing civil claims. Twenty-one individuals including Nirav Modi, Vijay Mallya declared fugitive economic offenders since 2018. US has similar Fugitive Disentitlement Doctrine but Indian approach is more categorical.

The constitutional dilemma centers on whether individuals who deliberately evade Indian court jurisdiction can simultaneously invoke constitutional protections. Section 14 of FEO Act 2018 empowers courts to deny civil remedies to declared fugitive economic offenders, balancing access to justice with judicial authority preservation. The Supreme Court recognized access to justice as integral to Article 21 in Anita Kushwaha v. Pushap Sudan, establishing that constitutional promises remain illusory without effective court access. However, constitutional rights carry corresponding responsibilities—legal systems cannot function if litigants selectively invoke remedies while refusing judicial submission. Economic offenders possess financial capacity to restructure interests across jurisdictions, frustrating investigations and asset recovery. Parliament enacted FEO Act recognizing existing civil-criminal law inadequacy for economic fugitivity severity. The statute requires ₹100 crore threshold, arrest warrant for scheduled offense, and refusal to return to India. Delhi High Court's April 2026 precedent represents institutional response prioritizing judicial authority over individual remedy claims. Unlike discretionary US Fugitive Disentitlement Doctrine, Indian approach is statutorily mandatory once declaration occurs. This reflects stricter institutional stance on cross-border financial crimes while maintaining that rights must operate within legal process discipline, not defeat constitutional governance itself.

Justice R.M. Lodha Committee was constituted by the Supreme Court in February 2016 to investigate PACL Limited's fraudulent deposit schemes. PACL operated illegal collective investment schemes worth over ₹49,000 crores, duping millions of investors. The Committee was tasked with asset recovery, refund distribution, and recommending regulatory reforms. It submitted comprehensive reports exposing the scale of financial fraud and proposing investor protection mechanisms. The case became a landmark in corporate accountability and regulatory oversight of deposit-taking companies in India.

The Lodha Committee investigation into PACL Limited represents a watershed moment in India's fight against financial frauds. PACL operated sophisticated Ponzi schemes disguised as agricultural land deals, collecting deposits from over 5.85 crore investors, predominantly from rural and semi-urban areas. The Supreme Court's intervention came after regulatory authorities failed to prevent the massive fraud. The Committee's mandate extended beyond investigation to actual asset recovery and refund distribution, making it unique in Indian judicial history. Its findings revealed systematic regulatory failures across multiple agencies - SEBI, RBI, state governments, and local authorities. The Committee recommended strengthening the legal framework for collective investment schemes, enhancing inter-regulatory coordination, and creating specialized courts for financial fraud cases. The PACL case highlighted the vulnerability of small investors to sophisticated financial scams and the need for robust investor protection mechanisms. The Committee's work established precedents for court-supervised asset recovery in large-scale financial frauds, influencing subsequent cases and regulatory reforms in the deposit-taking and investment advisory sectors.