2019 (6) TMI 1330 - HC - Money Laundering

Validity of lookout circular issued by the second respondent - return of appellant passport - challenge to the LOC is primarily on the ground that the appellant has been cooperating with the on going investigation done by the respondents and there is absolutely no cause for issuance of LOC - correctness of the order passed by the learned Writ Court rejecting the challenge to the LOC issued against the appellant - HELD THAT - The Writ Court, in our considered view, rightly noted that Section 41A of the Code of Criminal Procedure gives inherent power to the Investigating Authority to take necessary steps to see that the accused in the case do not leave the jurisdiction and cooperate with the investigation. The Writ Court pointed out that the recourse to LOC is taken by the Investigating Agency in cognizable offences under IPC or other penal laws, where the accused deliberately evaded arrest or did not appear before the authority and there is a likelihood of the accused moving out of the country to evade arrest on trial. The Investigation which is being done by the second respondent revolves around an organisation, which has been declared as unlawful organisation by the proceedings of the Government of India and persons suspected to be associated with the organisation are being investigated with regard to the alleged commission of offences under PMLA and other statute. We find the denial to be vague and not specific. In any event, we cannot comment upon the allegations or counter allegations at this juncture, as the case is under investigation. The learned Writ Court after considering the entire facts, held that the LOC was issued with statutory sanction and the respondents had jurisdiction to issue the same. We concur with the view taken by the learned Writ Court. The appellant has not made out any ground to quash the LOC - appeal dismissed.

Summary

Issues:
Challenge to lookout circular issuance and return of passport.

Analysis:
The appellant challenged the lookout circular (LOC) issued by the Assistant Director of the Directorate of Enforcement, Mumbai, seeking the return of his Indian passport. The appellant argued that he had cooperated with the investigation, attended multiple interrogations, and had no intention to evade the legal process. The appellant contended that the issuance of LOC deprived him of his fundamental right to travel. The appellant's legal counsel emphasized the appellant's strong ties to India, owning properties in Chennai, and having relatives in the country. The counsel argued that the appellant's case did not warrant the issuance of LOC and cited a previous court decision to support their contention.

The High Court examined the grounds for challenging the LOC and emphasized the need for judicial restraint during ongoing criminal investigations unless there is a clear abuse of power or violation of legal procedures. The Court reviewed the provisions of the Code of Criminal Procedure empowering investigating authorities to prevent accused individuals from leaving the jurisdiction. The Court noted that LOCs are typically issued in cases where the accused evade arrest or trial by leaving the country. The Ministry of Home Affairs guidelines for issuing LOCs were considered, along with the details of the investigation involving an organization declared unlawful by the Government of India.

The counter affidavit filed by the Assistant Director highlighted the appellant's alleged involvement in unlawful activities through companies established to divert funds for provocative speeches and broadcasts. The appellant, a director of a broadcasting corporation in Dubai, was accused of not cooperating with the investigation, withholding crucial documents, and maintaining contact with the main suspect. The appellant's attempt to leave the country triggered the LOC issuance to ensure his availability for further investigation. The Court reviewed the appellant's responses to the allegations, finding some denials vague and inconclusive due to the ongoing investigation.

In light of the facts presented and the legal standards applied, the Court upheld the validity of the LOC, citing the appellant's lack of cooperation, potential flight risk, and the need to prevent interference with the investigation process. Drawing parallels with a previous case, the Court determined that the appellant failed to establish sufficient grounds to quash the LOC. Consequently, the Writ Appeal was dismissed, with no costs awarded, and the connected Miscellaneous Petition was closed.