2020 (10) TMI 1385 - HC - Companies Law

Seeking withdrawal of Look Out Circular (LOC) issued - whether any lawful or reasonable grounds exist for adoption of the said procedure of opening LOC, in the instant case? - HELD THAT - A perusal of the Madras High Court judgment in E.V. Perumal Samy Reddy 2013 (10) TMI 1429 - MADRAS HIGH COURT reveals that the instructions issued for opening of LOC lay down the types of persons in respect of whom an LOC can be opened. Inter alia, these persons are those required by Courts in criminal/civil cases and who are absconding and absconding offenders wanted by various investigating agencies. There are other types of persons also mentioned but those are not relevant for the purposes of this case. The petitioner does not fall in either category. There can be no doubt that according to the prevailing instructions, an LOC can be opened against an accused person who is (a) deliberately evading arrest, (b) not appearing in the trial Court despite non-bailable warrants and other coercive measures. Coupled with either of these conditions should be a likelihood of the accused leaving the country to evade trial/arrest. Neither of these conditions exist in the instant case. The petitioner is not evading arrest. In fact, he has appeared before the investigating agency whenever required to do so and the investigating agency has not thought it proper to arrest him. Since the investigation is still pending and challan has not been presented, there is no question of any trial Court issuing/adopting coercive steps to ensure the presence of the petitioner. In view of the above, it is evident that the conditions which must pre-exist before a request can be made for opening of an LOC, do not exist in the present case. Thus, the continuation of an LOC for more than 3 years against the petitioner is a violation of his fundamental right to life and personal liberty. It is, thus, liable to be withdrawn. The respondent is directed to withdraw the LOC. However, the petitioner shall furnish an undertaking before the concerned investigating officer that he shall present himself whenever required by the investigating agency - the writ petition is allowed.

Summary

Issues:
1. Petition seeking withdrawal of Look Out Circular (LOC).
2. Legal validity of continuing the LOC against the petitioner.
3. Fundamental right violation due to the LOC.

Analysis:
1. The petitioner, a law graduate and practicing advocate, sought a writ of Mandamus to withdraw the LOC issued against him. The petitioner's background, travel history, and the ongoing investigation against his father were detailed. The petitioner argued that the LOC hindered his right to travel abroad for medical treatment, although he had always returned within the specified period during previous travels.

2. The Central Bureau of Investigation (CBI) supported the LOC, expressing concerns about the petitioner potentially fleeing the country to evade legal proceedings. The CBI highlighted suspicions regarding the petitioner's involvement in selling shares for money laundering purposes. The CBI contended that if the petitioner escaped to a country without an extradition treaty, it would impede the investigation.

3. The High Court analyzed the legal framework governing LOCs, emphasizing the right to travel abroad as a facet of the right to life and personal liberty under Article 21 of the Constitution. The Court reviewed precedents and instructions for opening LOCs, noting that an LOC can be justified if the individual is evading arrest or trial and likely to leave the country. In this case, the petitioner had cooperated with investigations, had not evaded the law, and had a lawful travel history, undermining the necessity of the LOC.

4. Ultimately, the Court found that the grounds required for an LOC did not exist in the petitioner's case, leading to a violation of his fundamental rights. The Court directed the withdrawal of the LOC but imposed conditions requiring the petitioner to cooperate with the investigating agency and appear before the trial court when necessary. The petitioner was also instructed to provide contact details and inform authorities of any international travel.

In conclusion, the High Court allowed the writ petition, ordering the withdrawal of the LOC against the petitioner due to the lack of legal grounds for its continuation, while ensuring the petitioner's compliance with investigative and judicial processes.