2023 (3) TMI 1523 - HC - Indian Laws

Challenge to Look Out Circular issued against him by Respondent Nos. 3 and 4 (Ministry of Corporate Affairs and Serious Fraud Investigation Office) - HELD THAT - After having perused the report and the communication dated 18th January, 2022, and the latest proforma which the SFIO has issued to the Bureau of Immigration, this Court is of the opinion that the present case would fall under Clause (i) of the Office Memorandum dated 22nd February, 2021. In terms of the Office Memorandum and in view of the SFIO s own stand, it is directed that the immigration authorities shall inform the SFIO about the entry and exit of the Petitioner from time to time. No other embargo would exist on the Petitioner for his travel from and into India. It is clarified that the Petitioner would have no obligation to inform the SFIO about his travel outside India. The obligation would be of the immigration authorities to inform the SFIO. The above change in the status of the LOC, shall be subject to the following conditions - i) The Petitioner shall present himself in the Indian Embassy in Oman on the first Monday of every month ii) The Petitioner s undertaking filed in compliance of order dated 12th April, 2021 that he shall present himself before the Authorities upon a 15 days' notice, shall continue. Petition disposed off.

Summary

Issues:
Challenge to Look Out Circular (LOC) issued by Ministry of Corporate Affairs and Serious Fraud Investigation Office (SFIO), Role of Petitioner as an Independent Director, Stay application, Conditions for suspension of LOC, Modification of LOC guidelines, Obligations of immigration authorities regarding Petitioner's travel.

Analysis:
The Petitioner, a Chartered Accountant and former Non-Executive Independent Director of a company, challenged the Look Out Circular (LOC) issued against him by the Ministry of Corporate Affairs (MCA) and SFIO. The Petitioner was stopped at the airport while returning to Oman and was informed about the LOC issued against him. The SFIO had initiated an investigation against the Petitioner. The Petitioner argued that he had no active role in the company's operations, while the SFIO contended that he was a long-serving Director and a member of the Audit Committee.

The Court considered the facts that the Petitioner was employed in Oman, his family resided in Delhi/NCR, and he had immovable properties in Delhi/NCR. Notably, there were no criminal cases pending against the Petitioner, and his specific role in the investigated company was yet to be determined. The Court decided to suspend the operation of the LOC, subject to certain conditions, including regular reporting to the Indian Embassy in Oman, filing undertakings, and restrictions on property transfers and international travel by the Petitioner's wife.

Subsequently, the SFIO modified its stand regarding the Petitioner in a communication to the Bureau of Immigration, requesting the retention of LOC against the Petitioner. The Court analyzed the new guidelines for LOC issuance, emphasizing that in cases without cognizable offenses, the subject cannot be detained or prevented from leaving the country. The Court directed immigration authorities to inform SFIO about the Petitioner's entry and exit, with no other travel restrictions imposed on the Petitioner.

In conclusion, the Court discharged previous conditions imposed on the Petitioner, subject to new conditions regarding reporting to the Indian Embassy and continued compliance with undertakings. The Court disposed of the petition and allowed the Petitioner to seek modification or discharge of conditions if the investigation by SFIO was not concluded within a year.