2022 (8) TMI 169 - HC - Money Laundering

Permission to petitioner to travel abroad - validity of look out circular issued against the petitioner - criminal case registered against one Mr.Sri Krishna, the brother of petitioner under the provisions of PML Act and also for the offences punishable under Sections 120B, 384, 419, 420 and 471 of IPC - allegations against the brother of the petitioner are that he is involved in hacking of crypto exchanges and poker website in India as well as overseas from the year 2013 till this date - HELD THAT - LOC could be issued wherein the departure of a person from India, if it appears to such authority based on inputs received that departure of such person is detrimental to the sovereignty or security or integrity of India or that the same is detrimental to the bilateral relations with any country or to the stranger and/or economic interests of India and for the reasons stated therein. LOC against the petitioner is issued on the ground that if he is permitted to leave India, it would affect the economic interest of India. The e-mails of the petitioner which is reproduced in the statement of objections of the respondents reveals that petitioner is intending to take permanent Dutch residence and Dutch citizenship. Therefore, respondents are right in apprehending that petitioner may not be available for further investigation of crime registered against brother of the petitioner. The apprehension of the respondents that the petitioner being brother of Mr.Sri Krishna might have involved in acquiring the proceeds of crime at this stage is to be respected, since the investigation is still under progress - In the instant case, investigation of money laundering against brother of the petitioner is in progress and also investigation with regard to role of petitioner along with his brother in money laundering is also being investigated. Further, the apprehension of respondents that petitioner may settle down at Netherlands and he may not be available for further investigation has to be respected in view of extract of e-mails reproduced in their statement of objections. There are no merits in the petition - petition dismissed.

Summary

Issues Involved:
1. Quashing of passport cancellation endorsement.
2. Quashing of the Look Out Circular (LOC) issued against the petitioner.
3. Direction to permit the petitioner to travel.
4. Enquiry into actions taken by the respondents and compensation to the petitioner.

Detailed Analysis:

1. Quashing of Passport Cancellation Endorsement:
The petitioner sought the quashing of the endorsement dated 13.01.2022, which cancelled his passport for travel. The petitioner, who had been working in the Netherlands for the past eight years, returned to India to visit his ailing father. During his stay, he received summons under the Prevention of Money Laundering Act, 2002 (PML Act) related to a criminal case against his brother. Despite appearing before the authorities, his passport was cancelled at the Bengaluru Airport. The petitioner argued that no FIR or crime was registered against him, and the cancellation violated his fundamental rights under Articles 19 and 21 of the Constitution of India.

2. Quashing of the Look Out Circular (LOC):
The petitioner also sought to quash the LOC issued against him. The LOC was issued based on the Office Memorandum dated 22.02.2021, which allows for the issuance of LOCs if a person's departure from India is deemed detrimental to the country's sovereignty, security, integrity, or economic interests. The petitioner argued that the LOC was unjustified as no criminal case was registered against him, and he had cooperated with the investigation. The respondents, however, contended that the petitioner's presence was necessary to ascertain his role in the money laundering offenses and that he had failed to cooperate fully with the investigation.

3. Direction to Permit the Petitioner to Travel:
The petitioner requested a direction to permit him to travel back to the Netherlands, where he was employed. The respondents argued that the petitioner's travel would hamper the ongoing investigation into the money laundering case against his brother. They cited the petitioner's receipt of 50,000 pounds from his brother and the transfer of the same to a third party as reasons for needing his presence in India. The court found that the respondents had reasonable grounds to issue the LOC and restrict the petitioner's travel to ensure the investigation's integrity.

4. Enquiry into Actions Taken by the Respondents and Compensation:
The petitioner sought an enquiry into the actions taken by the respondents and compensation for the alleged wrongful cancellation of his passport and issuance of the LOC. The court, however, held that the respondents had followed the prescribed procedure under the Office Memorandum dated 22.02.2021. The court also referenced previous judgments, including the Division Bench of the Karnataka High Court and the Supreme Court's decision in Maneka Gandhi v. Union of India, to support the view that national interest and economic security could justify restrictions on individual rights.

Conclusion:
The court concluded that the respondents had acted within their authority and followed the prescribed procedure in issuing the LOC and cancelling the petitioner's passport. The investigation into the money laundering case involving the petitioner's brother was ongoing, and the petitioner's presence was deemed necessary. The court found no violation of Articles 19 or 21 of the Constitution and rejected the writ petition. The petitioner was advised to cooperate with the investigation and demonstrate his non-involvement in the money laundering case to seek the withdrawal of the LOC.