The term fugitive has been made popular by the media.
A bank or financial institution declares someone bankrupt when they are unable to repay the amount borrowed as a loan for a long time.
While we all love to stay updated with the latest happenings around the world, it sometimes happens that we are not familiar with the jargon of a particular beat. Two similar words that we keep hearing in the banking and legal sector are fugitive and insolvent. While at first glance it seems that these two are interchangeable, there is a lot of difference between the two. Now, let us familiarise ourselves with the basic dissimilarity between a fugitive and an insolvent.
For the unversed, a person who is not able to repay their loan amount is declared bankrupt or defaulter by the bank. Meanwhile, a fugitive is someone who is legally absconding.
The difference between the two?
Someone is termed a fugitive when they have been legally declared absconded by the bank or a financial institution. The word fugitive has been made popular by the media, as it is used only in informal conversations. Even in terms of law, such a person is named as an absconder.
When is it announced?
When someone is considered to be legally absconding, then under Section 82 of the Code of Criminal Procedure, the person is proclaimed so. Such a person is called a fugitive by the media. The bank declares a person bankrupt when they are unable to repay the amount borrowed as a loan for a long time. It is irrelevant what are the conditions or the reason for not making the payment.
What is its effect on the person?
When a person is declared fugitive, legal action can be taken against them. Under section 83 of CrPC, the property of the accused can be confiscated. On the other hand, if someone is declared bankrupt, the property of that person is confiscated. Later on, the bank auctions their property to recover the outstanding amount of the loan.
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