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TMI Blog2023 (9) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... n view the circumstances prevailing on the date on which the request for issuance of the Look Out Circular was made. In the present case, on the day when the Look Out Circular was issued, the Petitioner was not an accused in any case. In fact, material on record does not even show that the arrest of the Petitioner was even contemplated by the Enforcement Agencies and even today it is stated by learned Counsel for the CBI that the Petitioner is not an accused in the case. There is nothing in the present case which can justify that the Enforcement Agency has received any input that the departure of the Petitioner herein is detrimental to the economic interest of India or that his departure from the country should not be permitted in the larger interest. Phrases like detriment to the economic interest of India cannot be permitted to be used without there being any substantial material before the Look Out Circular is opened and definitely the Banks cannot use Look Out Circulars only as a measure of recovering money because the remedy as available under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar case bearing No. RCBD12021E0011 has been registered against the company and three Directors and sought details pertaining to certain transactions entered into by the Company. It is stated that the Petitioner co-operated with the investigation and had informed the CBI that he resigned from the company on 08.05.2017 and was not in any event operating as a key managerial personnel and, therefore, was not responsible for the day-to-day affairs of the company. It is stated that Petitioner was travelling to Spain but when he arrived at the Mumbai Airport, he was informed that a Look Out Circular has been issued against him and, therefore, he cannot travel. 3. The Petitioner, thereafter, has approached this Court challenging the Look Out Circular issued by the Bank of Baroda. 4. Notice was issued in the writ petition on 04.07.2022. The Respondent No. 2/Bank of Baroda has filed its counter affidavit in the matter. In the counter affidavit filed by Bank of Baroda, it is stated that the Petitioner being a Director of the company was also a key managerial personnel in the company and had worked with the company as a whole time Director from the year 2013-14 till 08.05.2017. It is sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee benefit expenses (thereby indicating reduction in operations or the company), the Company substantially increased purchase or raw material in FY-2017-18 by Rs. 258.47 Crores and corresponding increase in creditors by Rs. 219.18 Crore shows the purchase were made on credit basis, thereby suggesting probability of using of fake invoices. d. It was observed that significant loan has been extended to M/s LEEL Coils Europe to the tune of Rs 7.47 crores as on March 2018. The total loan balance was increased to Rs. 21.26 crores as on September 2018. There is a possibility that this loan has been extended to a related party as observed from earlier trends. The credit rating report issued by CARE also mentions that the company has significant exposure as receivables from foreign subsidiaries. e. Investment to the tune of Rs. 38.39 crores as suspected to be overstated as on 31.03.2018 as there is considerable reduction in investment by the same amount for the period 31.03.2018 to 30.09.2018 (reduced significantly from Rs. 103.28 crores as on 31.03.2018 to Rs. 67.91 crores as on 30.09.20 19.) f. Trade receivables reduced by Rs. 256.45 crores as on 30.09.2017 within a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Bill no. 5 dated 27.05.17 paid through SBT-CC- 67301694273 on 03.06.17 under instruction of B R Punj (MD) through Anita K Sharma 1,15,00,000 Booked in LEEL 6 Bill no. 15 dated 14.11.17 paid through SBT-CC- 67301694273 on 17.11.17 2,36,00,000 Booked in LEEL Total 11,07,64,250 7 Incentive paid to Mr. Nipun Singhal in his personal name 70,00,000 Booked in LEEL Total 11,77,64,250 7. Learned Counsel for the Respondent No. 3/CBI has stated in the Court that the Petitioner is not an accused at present in any FIR. 8. The short question, therefore, arises for consideration is whether Look Out Circular which has been opened at the instance of Bank of Baroda can be sustained or not. 9. In the instant case most of the transactions have taken place post the Petitioner s resignation and the Petitioner is being sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the subject of an LOC will not be arrested/detained. h) In cases where there is no cognizable offence under IPC or other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country. The originating agency can only request that they be informed about the arrival/departure of the subject in such cases. j) In exceptional cases, LOCs can be issued without complete parameters and/or case details against CI suspects, terrorists, anti/national elements etc. in larger national interest. Office Memorandum dated 27th October, 2010, as amended on 5th December, 2017 Amendment- In exceptional cases, LOCs can be issued even in such cases, as would not be covered by the guidelines above, whereby departure of a person from India may be declined at the request of any of the authorities mentioned in clause (b) of the above-referred OM, if it appears to such authority based on inputs received that the departure of such person is detrimental to the sovereignty or security or integrity of Indian or that the same is detrimental to the bilateral relations with any country or to the strategic and/or economic interests of India or if s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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