(Through: Mr. Tanveer Ahmed Mir, Sr. Advocate with Mr. Chandra Shekhar Anand and Ms.Yashodhara Singh, Advocates.) v. UNION OF INDIA & ANR

1. The instant petition is by a British national and an Overseas Citizen of India-card holder seeking the quashment of a Look Out Circular (hereinafter referred to as the „LOC‟) issued by respondent no.2 i.e. Serious Fraud Investigation Office (hereinafter referred to as „SFIO‟).

2. The facts of the case would indicate that vide order dated 11.05.2020, the Ministry of Corporate Affairs, Government of India in exercise of its KUMAR KAURAV power under Section 212(1)(c) of the Companies Act, 2013 assigned the investigation ‘into the affairs’ of Binani Cement Limited (hereinafter referred to as „BCL‟) to SFIO. The said order records that the Resolution Professional had made a representation on the avoidance transactions executed by the company including sales to potentially related/ connected parties without adequate collection of receivables, resulting in diversion of funds, loans and advances given to subsidiaries and related parties and foregoing interest of an amount of Rs.382.81 Crore.

3. The SFIO then started the investigation and as far as the role of the petitioner is concerned, the same has been briefly stated in paragraph no.3 of the status report filed on 10.02.2024. The said status report would further indicate that the investigation was at its advance stage and fund tracking activities were actively underway. The SFIO found that there were instances, where the funds were siphoned off in connection with the transactions. No doubt, the investigation so far reveals the complexity of the financial transactions with multiple layers of fund movement through shell entities, primarily based in Kolkata and Mumbai. There does not seem to be any reason to doubt the justification of the investigation. Even if the complicity of the petitioner is fully established, the SFIO would be fully empowered to take further action in accordance with law.

4. The petitioner states that when he was travelling back to Dubai after visiting his ailing mother, he was stopped at Kolkata by the immigration authorities on account of the LOC. The petitioner, thereafter, approached the respondent and according to him, he has fully co-operated with the investigation. He, therefore, submits that if the investigation is at its advance stage and the petitioner is fully cooperating, no useful purpose would be served to keep the LOC in existence. He places reliance on various decisions of this Court.

5. The facts and the material available on record would further indicate that on 14.06.2022, 15.06.2022 and 16.06.2022, the petitioner joined the investigation with the SFIO for periods of 6, 6 and 3 hours respectively. The Court in its order dated 17.06.2022 also recorded the statement of the learned CGSC, who appeared on behalf of the respondents, that the petitioner has joined the investigation.

6. Thereafter, on 22.06.2022, yet again, the petitioner wrote an email to the Investigation Officer of SFIO, offering to join the investigation. On 30.06.2022, the petitioner joined the investigation, wherein, according to the petitioner, he was only asked four questions by the Investigating Officer.

7. The Court in the instant writ petition is only concerned with the justification of the continuation of the LOC.

8. From the factual matrix detailed hereinabove, it is clear that the petitioner has regularly joined investigation as and when called for. The purpose of an LOC is, in its essence, to ensure that the person concerned joins investigation and the purpose of the investigation does not get frustrated. In the instant case, on the basis of the material on record, there does not appear to be any apprehension of the petitioner’s not joining the investigation. Even in the latest status report, there is no aspersion cast by the Investigating Agency against the bona fides of the petitioner qua his availability for investigation.

9. This Court in the case of Vineet Gupta v. Union of India & ors 1, while taking a note of various decisions inter alia, in Maneka Gandhi v. Union of India[2], Sumer Singh Salkan v. Asst. Director[3] and Viraj Chetan Shah v. Union of India[4], has copiously reiterated that LOC is a coercive executive measure that directly impinges upon the fundamental right to travel, which forms an integral part of personal liberty under Article 21 of the Constitution of India. It was also emphasised that continuance of an LOC is not indefinite and must withstand strict judicial scrutiny on the touchstone of various factors like necessity, proportionality, fairness, and due process. Thus, it was held that where the subject has cooperated with investigation and there is no demonstrable requirement for restraint, continuation of the LOC would be arbitrary and liable to be quashed. The relevant extract of the aforenoted decision reads as under: -