2024 (12) TMI 1410 - HC - IBC

Validity of Look out circular - seeking permission to travel abroad to Dubai and Europe - whether respondent has always cooperated with the investigating authorities in pursuance to the notices/summons received by him? - HELD THAT - It is undisputed that the investigation in the present case has been pending since 06.06.2022 and with respect to the FIR registered by EOW on 13.04.2021, no Charge Sheet has been filed till date. Further, the petitioner has been involved in the investigation whenever he has been summoned by the Investigating Agencies and has disclosed the required information. The learned senior counsel on 24.12.2024, on instructions, had undertaken before the learned Single Judge that should the appellant require the respondent s presence, the respondent will return to the country within five days of receiving such intimation, subject to flight availability . Moreso, the appellant has further failed to disclose the time frame within which the pending investigations shall be concluded. Needless to say, that in such circumstances, the respondent cannot be deprived of his right to travel abroad. There are no infirmity in the order passed by the learned Single Judge, which has imposed various conditions upon the respondent while granting him the permission to travel aboard. LPA dismissed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the Look Out Circular (LOC) issued against the respondent was justified and whether its suspension by the learned Single Judge was appropriate.
Whether the respondent is a 'flight risk' and if his fundamental right to travel abroad should be restricted due to pending investigations.
Whether the principles of natural justice were violated in the issuance and communication of the LOC to the respondent.
Whether the conditions imposed by the learned Single Judge for the respondent's travel abroad were sufficient to safeguard the interests of the investigation.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Justification and Suspension of LOC

Relevant legal framework and precedents: The LOC was issued under the guidelines provided by the Ministry of Home Affairs, which allows for such measures in cases involving economic offences.
Court's interpretation and reasoning: The court noted that the investigation had been pending for a significant period without a charge sheet being filed, and the respondent had complied with investigation requirements when summoned.
Key evidence and findings: The respondent's cooperation with the investigation and the lack of a charge sheet were pivotal in the court's decision.
Application of law to facts: The court applied the principles of natural justice and the right to travel, concluding that the LOC's suspension was justified given the circumstances.
Treatment of competing arguments: The appellant argued the respondent was a flight risk, while the respondent contended that the LOC was not communicated properly and violated his rights.
Conclusions: The court upheld the suspension of the LOC, finding no infirmity in the learned Single Judge's order.

Issue 2: Flight Risk and Right to Travel

Relevant legal framework and precedents: Article 21 of the Constitution of India guarantees the right to personal liberty, which includes the right to travel abroad.
Court's interpretation and reasoning: The court emphasized the importance of balancing individual rights with the interests of justice and public safety.
Key evidence and findings: The respondent's ties to India and his cooperation with authorities were considered as mitigating factors against the flight risk argument.
Application of law to facts: The court found that the conditions imposed by the Single Judge adequately addressed any concerns of the respondent being a flight risk.
Treatment of competing arguments: The appellant's assertion of the respondent being a flight risk was countered by evidence of the respondent's compliance and family ties in India.
Conclusions: The court concluded that the respondent was not a flight risk and upheld his right to travel, subject to conditions.

Issue 3: Principles of Natural Justice

Relevant legal framework and precedents: The principles of natural justice require that individuals be informed of actions taken against them and be given a fair opportunity to respond.
Court's interpretation and reasoning: The court noted that the respondent was not officially informed of the LOC, which constituted a violation of natural justice.
Key evidence and findings: The lack of official communication of the LOC to the respondent was a critical factor in the court's decision.
Application of law to facts: The court applied the principles of natural justice and found that the respondent's rights were infringed upon.
Treatment of competing arguments: The respondent's claim of not being informed was substantiated by the lack of official communication, which the appellant could not refute.
Conclusions: The court found a violation of natural justice and upheld the suspension of the LOC.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "We do not find any infirmity in the order passed by the learned Single Judge, which has imposed various conditions upon the respondent while granting him the permission to travel abroad."
Core principles established: The judgment reaffirms the importance of natural justice and the fundamental right to travel, emphasizing that restrictions must be justified and proportionate.
Final determinations on each issue: The court upheld the learned Single Judge's decision to suspend the LOC, allowing the respondent to travel abroad under specified conditions, and dismissed the appeal.

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