2019 (5) TMI 644 - HC - Money Laundering

Offence under PMLA - Look Out Circular as issued without statutory sanction or not? - Existence of scheduled offences - possibility of the petitioner fleeing from India, and hence, as a precautionary measure, a Look Out Circular was issued against him and accordingly he was detained by Immigration Authorities at Delhi Airport, while he was trying to board a flight to Nepal - HELD THAT - The entire investigation is related to offences under Sections 10, 13 and 18 of the Unlawful Activities Prevention Act, 1967 and under Section 153A of IPC against Dr.Zakir Naik and others, vide the FIR No.5 dated 18.11.2016. As per the said FIR, the activities of Dr.Zakir Naik and his associates are prejudicial to the maintenance of harmony among various communities and likely to disturb the public tranquility. The FIR also revealed existence of scheduled offences under Part A of the PMLA and ECIR/MBZO/13/2016 dated 21.12.2016 has been recorded by the Zonal Office, Mumbai of the Directorate of Enforcement. As the offence of money laundering is cognizable and a non-bailable offence and the petitioner has been listed as one of the suspected persons, the investigation has been initiated. As the Look Out Circular itself seems to have been issued only based on the FIR registered under the PMLA and the Unlawful Activities Prevention Act, 1967 and therefore, the legality of Look Out Circular has to be considered having regard to the circumstances prevailing as on the date, on which, the request for issuance of Look Out Circular is made. No doubt the petitioner had accepted and acted upon the Look Out Circular and appeared for several hearings based on the summons issued. Hence, the petitioner cannot challenge the legality or validity of the Look Out Circular. Admittedly, his passport and mobile phone were returned to him and what remains to be decided is the validity of Look Out Circular in terms of the length of time. In this case the investigation is not yet over as the authorities are trying to extract the required details for their investigation. Therefore, in the present case it cannot be stated that the Look Out Circular was issued without statutory sanction or that the respondents did not have jurisdiction to issue the impugned Look Out Circular. Look Out Circular was issued in the year 2016 and is challenged after almost more than a year long enquiry was being conducted, by issuing numerous summons. Hence, the impugned Look Out Circular cannot be quashed at this stage. However, this court is inclined to direct the second and third respondents to complete the enquiry as expeditiously as possible, however, not beyond three months from the date of receipt of a copy of this order.

Summary

Issues:
1. Validity of Look Out Circular issued against the petitioner.
2. Jurisdiction of the authorities to issue the Look Out Circular.
3. Compliance with guidelines for issuance of Look Out Circular.
4. Duration of validity of Look Out Circular.
5. Right to personal liberty and free movement in relation to Look Out Circular.

Analysis:

Issue 1: The validity of Look Out Circular issued against the petitioner was challenged in the writ petition. The petitioner was detained by Immigration Authorities based on the Look Out Circular while trying to board a flight to Nepal. The petitioner attended multiple hearings and cooperated with the investigation, but the legality of the Look Out Circular was questioned.

Issue 2: The jurisdiction of the authorities to issue the Look Out Circular was examined. The Investigating Agency relied on the Unlawful Activities Prevention Act and the FIR registered under the PMLA for issuing the Look Out Circular. The court considered the circumstances prevailing at the time of issuance to determine the legality of the Look Out Circular.

Issue 3: Compliance with guidelines for issuance of Look Out Circular was discussed. The Ministry of Home Affairs had issued guidelines specifying that reasons for the request must be provided for issuing a Look Out Circular. The court emphasized the importance of meeting these conditions as a prerequisite for the validity of the Look Out Circular.

Issue 4: The duration of validity of the Look Out Circular was deliberated upon. The Look Out Circular had been in effect for over a year, during which the petitioner had attended numerous hearings. The court decided that the Look Out Circular could not be quashed at that stage but directed the authorities to complete the enquiry within three months.

Issue 5: The right to personal liberty and free movement concerning the Look Out Circular was considered. Although a Look Out Circular can be coercive and impact personal liberty, the court noted that in this case, the investigation was ongoing, and the authorities were gathering necessary details. The court found that the Look Out Circular was not issued without statutory sanction and did not lack jurisdiction.

In conclusion, the writ petition challenging the Look Out Circular was dismissed, except for the direction to complete the enquiry expeditiously. The court emphasized the importance of following guidelines for issuing Look Out Circulars and ensuring timely completion of investigations while respecting individual rights to personal liberty and free movement.