2024 (11) TMI 706 - HC - Indian Laws

Seeking quashing and setting aside of the Look Out Circular (LOC) - petitioner has not been arraigned as an accused by the SEBI - HELD THAT - The petitioner is the son of an accused Late Sudhir Moravekar. It is not in dispute, that the E.O.W has registered an FIR as against the petitioner's father and others (not the petitioner) and that after investigation, E.O.W has filed charge-sheet in the said case, as against the petitioner s father and other accused on 30th October 2021. Admittedly, the petitioner has not been arraigned as an accused in the said case registered by the E.O.W. It also appears that the SEBI has filed several prosecution complaints in the matter of Pancard Clubs Limited in 2019. Admittedly, the petitioner has not been arraigned as an accused by SEBI in any of the said complaints - It is not in dispute that the petitioner has abided by the terms and conditions stipulated in the said orders. It appears that the petitioner has businesses overseas, as a result of which, he is required to regularly travel overseas. It also appears that the petitioner is involved in business of short-term rental service apartments in Thailand and Dubai, requiring him to travel often. It also appears that the petitioner s mother, a senior citizen, his wife and one school going child are dependent on him and that he is a resident of Mumbai and as such has roots in the society. It is also not in dispute that the SFIO has filed a prosecution complaint in February 2024 and till date, the trial Court has not taken cognizance of the said complaint. In order to assail the fear of the learned counsel for the respondent No.1, that the petitioner would not be available, when the Court takes cognizance of the prosecution case, we directed the learned counsel for the petitioner to file an affidavit of the petitioner undertaking to co-operate with the trial Court. Accordingly, learned counsel for the petitioner has tendered an affidavit of the petitioner dated 12th July 2024. The said affidavit is taken on record and marked 'X' for identification. In the said affidavit, the petitioner has undertaken to remain present as and when summoned by the learned Special Court or the offices of the respondent Agency and has voluntarily ensured full compliance with the respondent Agency i.e. SFIO. Thus, the petitioner has undertaken to abide by the undertaking given by him in the affidavit i.e. to remain present before the trial Court, as and when summoned and even before the respondent Agency i.e. SFIO - The petitioner has roots in the society and has also tendered an undertaking as stated aforesaid. In this light of the matter, the apprehension of the respondent No.1-SFIO, does not appear to be valid and bonafide. The impugned LOC issued as against the petitioner, at the behest of the respondent No.1-SFIO, is quashed and set aside - The petitioner to abide by his undertaking given to this Court dated 12th July 2024 - Petition allowed.

Summary

Issues:
Quashing of Look Out Circular (LOC) issued by Serious Fraud Investigation Office (SFIO) against the petitioner.

Analysis:
The petitioner sought the quashing of the LOC issued against him by SFIO. The petitioner, not being an accused in the case registered by the Economic Offences Wing (E.O.W), highlighted that he has not been arraigned by SEBI in any complaints related to Pancard Clubs Limited. The petitioner cooperated with SFIO investigations and has a legitimate need to travel overseas for business purposes. The respondent, SFIO, opposed the petition, stating that the petitioner can seek permission from the court before traveling instead of quashing the LOC. The respondent alleged that a significant amount was transferred to the petitioner's account from Pancard Clubs Limited. The court noted that the petitioner's father was the accused, not the petitioner, and that the petitioner has not been arraigned in any cases. The court observed the petitioner's cooperation with SFIO and his compliance with overseas travel orders. The court emphasized that LOC should not be used indefinitely to terrorize an accused and must consider the right to travel freely under Article 21 of the Constitution of India.

The court directed the petitioner to file an affidavit undertaking to cooperate with the trial court, which the petitioner complied with. The court found the petitioner's roots in society, his cooperation with authorities, and his compliance with court orders regarding travel overseas. The court distinguished the judgments cited by the respondent and allowed the petition, quashing the LOC with specific terms and conditions. The court ordered SFIO to inform immigration authorities about the quashing of the LOC and stated that SFIO can issue a fresh LOC if necessary in the future.

In conclusion, the court allowed the petition, quashed the LOC, and imposed specific terms and conditions for the petitioner to abide by. The court emphasized the petitioner's cooperation, roots in society, and the need to balance personal liberty with the investigative process.