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TMI Blog2022 (8) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... though there involves allegation all through that there is information of the Petitioners fleeing away after taking 600 crores to 700 crores from different banks even after a preliminary counter affidavit and an additional affidavit by the Department, there is even no specific allegation on actual loan involved the Petitioners and their Company and any default therein. It is needless to observe here that there is no declaration of NPA involving any account involving the Petitioners by any bank as of now. Allegation at this stage appears to be speculative and imaginary and in the circumstance, there cannot be taking away liberty of any of the Petitioners - The investigation even after so much lapse of time failed in bringing any concrete evidence to implicate any of the Petitioners or framing any of them charges under any penal law. There is even no material produced as of now in support of assertion of the Department, the Petitioners have flight risk, thus the allegation is bald and without any substance. Considering that investigation involving all Establishments is over and the Department is waiting for the further advice of the Ministry, this Court is imposing certain con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.12872 of 2022 is also one of the Directors of the Company, M/s.Utkal Galvanizers Ltd. As disclosed, O.P.2, the ROC-cum-OL, Odisha forwarded a complaint on 21.10.2020 made by one Bangla Informer through email dated 5.11.2020. The Petitioners denied the contents in the complaint in their email response dated 9.11.2020. Complaint and several email responses are available at Annexure-1 series. While the matter stood thus, almost after a gap of five months, O.P.2 on 13.4.2021 issued a letter to M/s.Utkal Galvanizer Ltd. disclosing therein that there has to be an inspection of the Company under Section 206(5) of the Companies Act, 2013 under the direction of the Ministry of Corporate Affairs, Government of India, vide Annexure-2. It is claimed, the Company cooperated with the O.Ps. in the entire process of inspection even presented therein as and when there is asking for personal appearance of any of them. There has been appearance of the persons so directed even the Company has also submitted written response to the queries raised by the O.Ps., vide Annexure-3 series. Through the pleading, it is claimed, looking to the whole correspondences as of now, there is no complain on the invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary harassment to each of the Petitioners in absence of their involvement in any non-compoundable offence as of now. 5. The Petitioners on their own have brought to the notice of this Court through Annexure-14 series that there is completion of investigation involving the Odisha part is concerned. Annexure-14 series also clearly depicts no involvement and non-compoundable offences involving the Petitioners. Through each of these documents, at the end of each document involving the show cause notices, vide Annexure-14 series, it is apparent that the Petitioners involved therein are all facing compoundable offences being covered under the provision of Section 441 of the Companies Act. The Petitioners claim that there is no material whatsoever available showing the Petitioners involvement in non-compoundable offences, particularly, under the penal provision. The Petitioners also claim that they are all through cooperating. Thus the Petitioners through both the above Writ Petitions prayed for quashing the LOC involving the Petitioners. 6. Mr.M.K.Mishra, learned senior counsel appearing for the Petitioners on reiteration of the facts narrated herein above and after placing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Crl.M.(Bail) 605/2021 decided on 12.1.2022, a decision of the Punjab Haryana High Court in Noor Paul vrs. Union of India ors. : CWP-5492-2022 (O M) decided on 5.4.2022 reported in 2022 Live Law (PH) 69, another decision of Delhi High Court in Rana Ayyub vrs Union of India and Another: W.P.(CRL) 714/2022 decided on 4.4.2022, a case of Madras High Court involving Karti P.Chidambaram vrs. Bureau of Immigration : W.P.(C) Nos.21305 20798 of 2017 decided on 23.7.2018 and another decision in Rahul Surana vrs. The Serious Fraud Investigation Office ors. : W.P. No.2477 of 2020 and WMP Nos.2871 of 2020, 7332, 10903, 21891 and 3631 of 2022 decided on 7.3.2022. In the process, Mr.Mishra, learned senior counsel for the Petitioners taking this Court to the above decisions attempted to draw the support of each of the decisions indicated herein above to support the Petitioners case. 7. To avoid a doubt for the Petitioners not enclosing copy of the LOC while claiming setting aside the same through the Writ Petitions, this Court takes note of the contentions of the O.Ps. admitting existence of the LOC through Paragraph-6 of the preliminary counter affidavit at Page- 242A, which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers also filed an additional affidavit on 26.6.2022 bringing therein the level of charges as of now appearing through series of show cause notices. This Court nowhere finds any response to the plea of the Petitioners on the aspect of offences non-compoundable involving the Petitioners as of now. 10. Mr.Parhi, learned Assistant Solicitor General of India for the O.Ps. however took this Court to the further plea of the Department while bringing to the notice of this Court the Office Memorandum issued by the Government of India, Ministry of Home Affairs, i.e., consolidating guidelines for issuance of LOC. Reading through the same, Mr.Parhi attempted to justify issuance of LOC. Mr.Parhi further taking this Court to the response of the O.Ps. in Paragraph-6 of the additional affidavit filed on 13.7.2022 contended that for the Petitioners closure association/involvement in so many Companies and the area of investigation extended also to West Bengal, the Inspecting Officer of the Directorate of Ministry of Corporate Affairs has in the meantime already inspected almost fourteen companies other than the companies in Odisha. It is further contended that inspection having come to an end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act, as clearly disclosed from Annexure-14 series. For reference of both sides to the Office Memorandum dated 22.2.2021 also keeping in view the guideline existing since 27.12.2000 and the guidelines issued on 27.10.2010, 5.12.2017, 19.9.2018 and 12.10.2018 all taken into account find place at Annexure-C to the additional affidavit of the O.Ps. on 13.7.2022, this Court finds, the Government of India in the Ministry of Home Affairs taking into account the decision of the Delhi High Court and the guidelines framed therein by such High Court after due deliberation in consultation with various stake holders in supersession of the existing guidelines earlier issued by the same Ministry, with the approval of the Competent Authority has issued a plethora of consolidated guidelines, which shall be followed with immediate effect by all concerned, particularly for the purpose of issuance of LOC in respect of Indian Citizens and foreigners. Relevant guidelines for observance of the Competent Authority in issuing LOC, this Court finds through the provision at Clauses-H I, there has been following prescription :- (H) Recourse to LOC is to be taken in cognizable offences unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies and its key managerial persons (i.e. the Petitioners), there is issuance of LOC. Thus at this junction interference in the process of inspection or subsequent action will affect the public interest as well as the greater economic interest of the Nation. Reading the aforesaid plea of the O.Ps., it becomes clear that inspection involving all the Companies has already been completed by the Inspecting Officer under the jurisdiction of the R.O.Cs., Odisha as well as West Bengal. So far Odisha part is concerned, the Petitioners are already in receipt of show cause notices ultimately establishing no involvement of non-compoundable offences. So far West Bengal part is concerned, there is specific plea that inspection not only completed with full cooperation of the Petitioners but reports so prepared have already been sent to the Ministry for its opinion and action, as appropriate and nothing is received as of now. The above thus discloses that investigation on all the allegations involving the Petitioners is already over. There is no possibility of allegation of non-cooperation in the inspection by any of the Petitioners. There is no complaining of non-cooperation against any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision rather supports the Petitioners for their yet to face any such proceeding. 14. In the grim situation, this Court now takes into account the decisions operating the filed as of now, which are discussed herein below. In the case of Noor Paul vs Union of India and Others : reported in 2022 LiveLaw PH 69, Paragraphs-64, 65, 69 76 are extracted, as hereunder :- (64) We may point out that the Office Memorandum No.25016/10/2017 IMM dt.22.2.2021 placed for our perusal by the learned Additional Solicitor General ( the latest one said to contain consolidated guidelines for issuance of an LOC) states: In cases where there is non-cognizable offence under the IPC and other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country. The originating Authority can only request that they be informed about the arrival/departure of the subject in such cases. (65) When there is admittedly not even an FIR registered against the petitioner, and there is no question of her being accused of any non-cognizable offence, no LOC could have been issued by respondent No.3 to detain the petitioner. At best, the respondent No.3 could have only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vade his arrest in future. If some incriminating evidence comes on record against him, the possibility cannot be ruled out in this case of his fleeing abroad. What clearly emerges is that in the aforesaid case, the Court was dealing with a situation, where a FIR had already been lodged and a criminal investigation was ongoing against the person against whom the LOC had been issued. The same was the situation in S. Martin v. Deputy Commissioner of Police SCC OnLine Mad 426. In the present case, as has already been noted, no proceedings under any penal law have, in fact, been initiated against the petitioner. These decisions are therefore, clearly distinguishable and do not, in any manner forward the case of the respondents. 42. For the aforesaid reasons, impugned LOC is wholly unsustainable and deserves to be quashed. However, keeping in view the respondent no.3 s plea, that it is still awaiting inputs from the authorities at Dubai, upon receipt of which information, cases under various penal laws are likely to be initiated against the petitioner, I am of the view, that it would be in the interest of justice for the petitioner to inform respondent no.3, as and when he d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The investigation, even after the elapse of three years, is stated to reveal only prima facie materials and no concrete evidences are stated to have been found been found to implicate the petitioner or frame charges. Admittedly, however there are no proceedings against the petitioner so as to implicate him before the Criminal Court or in any other fora to justify the restrictions under which he has been placed. 29. Admittedly, there have been no instances when the petitioner has evaded summons/notices calling for his attendance/appearance. The Central Bureau of Investigation (CBI) has confirmed that there are no investigations that are ongoing in the case of the petitioner, though reserving their right to initiate appropriate action at an appropriate juncture in future. 30. No material is placed before the Court in support of the bald assertion that the petitioner is a flight risk and as a consequence there is no tangible material available, admittedly, to deny the petitioner of his Fundamental Right. 31. This Court, in the decision in the case of Karthi P.Chidambaram (supra) has stated as follows: . . . . 63. Look Out Circulars are coercive measures to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finds, even though there involves allegation all through that there is information of the Petitioners fleeing away after taking 600 crores to 700 crores from different banks even after a preliminary counter affidavit and an additional affidavit by the Department, there is even no specific allegation on actual loan involved the Petitioners and their Company and any default therein. It is needless to observe here that there is no declaration of NPA involving any account involving the Petitioners by any bank as of now. Allegation at this stage appears to be speculative and imaginary and in the circumstance, there cannot be taking away liberty of any of the Petitioners. 17. The investigation even after so much lapse of time failed in bringing any concrete evidence to implicate any of the Petitioners or framing any of them charges under any penal law. 18. Undisputedly, there have been no instances when the Petitioners attempted to evade summons/notices calling for their attendance and/or searching involved, if any. 19. There is even no material produced as of now in support of assertion of the Department, the Petitioners have flight risk, thus the allegation is bald and withou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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