Deept Sarup Aggarwal vs Union Of India & Anr.

Navin Chawla, J

This petition has been filed by the petitioner challenging the Lookout Circular (LOC) issued by the respondents against the petitioner.

It is the case of the petitioner that the petitioner is in the business of agro-product and had dealing with one Mr.Dalip Jindal who is also in said

business based in Delhi. The petitioner claims to be Director in various companies which used to trade with the companies of the said Mr.Dalip Jindal.

The petitioner further claims that in the year 2018, an FIR No.203/2018 was registered against the said Mr.Dalip Jindal and his family members on the

complaint of the HDFC Bank alleging that Mr.Dalip Jindal had siphoned off funds of his companies and was deliberately not paying the loan taken

from the banks. The petitioner was also named as having helped Mr.Dalip Jindal to siphon off the money. The petitioner further claims that he was

summoned to join investigation by the Economic Offences Wing and had so joined on 26.12.2018 and 07.01.2019, wherein his statement was recorded

and he had provided the details of all business dealing between himself/his companies and Mr.Dalip Jindal/his companies. On 04.01.2020 when the

petitioner was intending to travel to Singapore, he was detained at the Indira Gandhi International Airport, Delhi and was informed that an LOC has

been issued against him. It is the said LOC that the petitioner has challenged in the present petition.

The petitioner has claimed that thereafter the petitioner has joined the investigation on 04.01.2020, 06.01.2020, 17.01.2020, 31.01.2020 and

06.02.2020.

On the other hand, the respondent, Directorate of Enforcement filed a counter affidavit and thereafter a sur-rejoinder inter-alia contending that the

FIR No.203/2018 dated 08.10.2018 was registered by the EOW, New Delhi under Section 406/420/120B of the Indian Penal Code, 1860 against said

Dalip Jindal, Mr.Shaloo Jindal and Ms.Disha Jindal, who were directors/proprietors and co-directors in M/s Jindal Agro International Limited, M/s

Faqir Chand Dalip Kumar and M/s Dalip Jindal Agro Packaging Pvt. Ltd. The said persons/entities are engaged in the business of import of pulses in

India and were having regular banking relationship with the HDFC Bank Ltd, Naya Bazar, New Delhi and other Banks. The said persons and entities

availed various credit facilities such as Cash Credit, Letter of Credit, Bank Guarantees, Buyers Credit etc. from time to time since 2017 from HDFC

Bank. During 01.04.2017 to 31.03.2018, Mr.Dalip Jindal has transferred huge funds to the various companies of the petitioner. It is further alleged that

during investigation, it was noticed that during the period 01.04.2017 to 31.03.2018, M/s Buddha Global Pvt.Ltd (a company owned and controlled by

the petitioner) had imported chick peas from Millennium Industries Pte. Ltd, Singapore (a company owned and controlled by the petitioner) and in turn

Millennium Industries Pte. Ltd., Singapore, had purchased/imported the same chick peas from Fletcher International Exports Pvt. Ltd, Australia at

much lower price. It is alleged that the difference of the amount is a sheer loss of foreign exchange of the country. It is further alleged that by the

above said modus operandi, Mr.Dalip Jindal alongwith the petitioner and others siphoned off bank money aggregating to a sum of Rs.80.84 crore and

parked it outside India and conveyed to the bank that the money had been lost in the market thereby causing loss to the banks.

It is alleged by the respondent that based on the above FIR, the Enforcement Directorate has registered an ECIR No.ECIR/DLZO-II/04/2019

dated 02.07.2019 under Section 420/120B of the IPC against the petitioner and others. On 25.07.2019, the Enforcement Directorate issued the

Impugned LOC against the petitioner and others, which has now, during the pendency of the present petition, been extended till 24.07.2021.

As far as the averment of the petitioner of having joined investigation, it has been submitted by the respondent that the petitioner on being detained

at the Airport was released on the same day and directed to appear on 06.01.2020 for submission of documents. The petitioner submitted some

documents on 06.01.2020 and promised to furnish the rest of the documents on 10.01.2020, but he did not appear. On 17.01.2020, the petitioner

furnished only few of the documents and again sought time to furnish the remaining documents. The petitioner was again given time and directed to

appear on 20.01.2020, but failed to appear on this date. On 22.01.2020, the petitioner sent a letter conveying that his uncle had expired on 19.01.2020

and sought further time for furnishing the remaining documents as promised. On 31.01.2020, the petitioner was served summons and directed to

appear on 06.02.2020, but he again failed to appear or submit any documents as promised earlier by him. The Respondent submits that thus, the

conduct of the petitioner was highly evasive and non-cooperative and investigation in the present case was pending in respect of the offences

committed by the petitioner alongwith the other accused.

The learned senior counsel appearing for the petitioner submits that the Impugned LOC has been issued not only in violation of the Office

Memorandum dated 27.10.2010 issued by the respondents pursuant to the judgment of this Court passed in WP(C) 10180/2009, titled Vikram Sharma

v. Union of India & Ors., it, even otherwise, is not sustainable inasmuch as the same does not contain any valid reason for its issuance. He submits

that the petitioner is neither a borrower nor a guarantor with respect to the loan taken by Mr.Dalip Jindal. The entire family of the petitioner is based in

Delhi and the petitioner has all his business in India. The petitioner also has properties in India which are worth more than Rs.50 crores. He submits

that the details of such properties have been provided to the Enforcement Directorate. The petitioner, therefore, is neither a flight risk nor is there any

reason to suspect him to be evading investigation. He further submits that the petitioner had joined investigation as and when summoned. Even after

the LOC, the petitioner joined the investigation and was last called on 06.02.2020 whereafter he was not called for further investigation. Therefore,

there was, in any case, no reason for extending the LOC, which fact has also come to light only on filing of the sur-rejoinder by the respondents.

In support of his submissions, the learned senior counsel for the petitioner has placed reliance on the judgment of the Madras High Court in Karti P.

Chidambaram. v Bureau of Immigration, Ministry of Home Affairs, Govt. of India and Ors., MANU/TN/3673/2018, and of this Court Pinr iya

Parameswaran Pillai vs Union of India and Ors. MANU/DE/0723/201, 5and the judgment dated 11.08.2010 of this Court in Sumer Singh Salkan Vs

Assistant Director & Ors {WP( Crl.) 1315/2008}.

On the other hand, the learned counsel for the respondents submits that the allegations against the petitioner are of a serious nature of not only

siphoning off funds but also illegal transfer of valuable foreign exchange. He places reliance on the Office Memorandum no.25016/31/2010-Imm to

submit that the LOC can be issued even in cases not covered by the Guidelines of 2010 and in economic interest of India. He further submits that the

petitioner has not cooperated with the investigation and his conduct is highly evasive and non-cooperative, thereby justifying issuance of LOC and

extension thereof.

I have considered the submissions made by the learned counsels for the parties. As held by the Supreme Court in Maneka Gandhi v. Union of

India and Ors., (1978) 1 SCC 248, the right to travel abroad is a fundamental right guaranteed under Article 21 of the Constitution of India.

In Sumer Singh Salkan (supra) this Court raised and answered the following four questions:

“The questions raised in the reference are as under:

“A. What are the categories of cases in which the investigating agency can seek recourse of Lookout-Circular and under what

circumstances?

B. What procedure is required to be followed by the investigating agency before opening a Lookout-circular?

C. What is the remedy available to the person against whom such Look-out-Circular has been opened?

D. What is the role of the concerned Court when such a case is brought before it and under what circumstances, the subordinate courts can

intervene?

The questions are answered as under:

A. Recourse to LOC can be taken by investigating agency in cognizable offences under IPC or other penal laws, where the accused was

deliberately evading arrest or not appearing in the trial court despite NBWs and other coercive measures and there was likelihood of the

accused leaving the country to evade trial/arrest.

B. The Investigating Officer shall make a written request for LOC to the officer as notified by the circular of Ministry of Home Affairs,

giving details & reasons for seeking LOC. The competent officer alone shall give directions for opening LOC by passing an order in this

respect.

C. The person against whom LOC is issued must join investigation by appearing before I.O. or should surrender before the court concerned

or should satisfy the court that LOC was wrongly issued against him. He may also approach the officer who ordered issuance of LOC &

explain that LOC was wrongly issued against him. LOC can be withdrawn by the authority that issued and can also be rescinded by the trial

court where case is pending or having jurisdiction over concerned police station on an application by the person concerned.

D. LOC is a coercive measure to make a person surrender to the investigating agency or Court of law. The subordinate courts’

jurisdiction in affirming or cancelling LOC is commensurate with the jurisdiction of cancellation of NBWs or affirming NBWs.

In Karti P. Chidambaram (supra), the High Court of Madras held that the mandate of the Office Memorandum dated 27.10.2010 would

necessarily require the request for issuance of LOC to contain reasons for such request. The condition precedent for issuance of an LOC is therefore,

existence of reasons, which should be disclosed in the request for issuance of LOC. The High Court, after referring to Sections 41,41A and 41B of

the Code of Criminal Procedure, 1973 further held that the legality and/or validity of LOC has to be adjudged having regard to the circumstances

prevailing on the date on which the request for issuance of LOC had been made. It was further held that the LOCs cannot be issued as a matter of

course, but when reasons exist, where an accused deliberately evades arrest or does not appear in the Trial Court. The said decision is subject to

judicial review. An LOC, which is a coercive measure to make a person surrender and consequentially interferes with his right of personal liberty and

free movement, certainly has adverse civil consequences and the High Court, in exercise of its power under Article 226 of Constitution, can interfere

with the same where it finds that the conditions precedent for issuance of the LOC were absent.

In the facts of that case, the High Court of Madras further observed as under:

“69. The conditions precedent for arrest under Section 41 of the Code of Criminal Procedure without warrant as set forth in sub-sections

(a) to (i) of Section 41(1) were wholly absent atleast as on the date of issuance of the Look Out Circular. In any case, there was no attempt

to arrest the petitioner without warrant atleast as on 15.06.2017 when notice under Section 41-A was issued to the petitioner to appear

before the Investigating officer on 29.6.2017. A notice under Section 41A of the Criminal Procedure Code is issued directing the accused to

appear before the Investigating Officer, when arrest of a person is not required, as observed by the Supreme Court in Arnesh Kumar,

supra.

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As observed above, the FIR against the petitioner was lodged on 15.05.2017. Notice was issued on 15.6.2017 calling upon the

petitioner to appear before the Station House Officer/Investigation Officer on 29.6.2017. On the very next day i.e., 16.6.2017, the

impugned Look Out Circular was issued. As on the date of issuance of the Look Out Circular, there could have been no reason to suppose

that the petitioner would not appear before the Station House Officer/Investigation Officer.

On behalf of the respondents, it has been contended that the petitioner did not appear on 29.6.2017 as directed, but only appeared

pursuant to the directions of the Supreme Court. However, as argued by Mr. Subramanium, the very fact that after issuance of the first

notice dated 16.06.2017, which was returnable on 29.06.2017, a further notice was issued on 04.07.2017 granting the petitioner time till

21.07.2017, shows that there was no immediate apprehension of his evading investigation, at least on 04.07.2017. There was, thus, no

justification for issuance of the impugned LOC on 16.06.2017, the validity whereof has expired, in any case, after one year.â€​

In the present case, there is no doubt that the allegations made against the petitioner are of a grave nature. The petitioner has submitted that the

same are false and unsubstantiated, however, this Court need not detain itself on the examination of such allegations. For the purposes of the

Impugned LOC, what is relevant to be noted is that the FIR was registered on 08.10.2018. Based thereon, the Enforcement Directorate registered

ECIR on 02.07.2019. In undue haste, on 25.07.2019, the Impugned LOC was issued against the petitioner. The petitioner has asserted that prior

thereto, the petitioner had joined investigation on 26.12.2018 and 07.01.2019. It is not asserted in the counter affidavit or in the sur-rejoinder filed by

the respondents that the petitioner is a flight risk having no roots in India or that there is a likelihood of the petitioner absconding from the country. The

only allegation made is that the conduct of the petitioner is evasive and non-cooperative. In my opinion, this cannot be a ground for issuance of a LOC.

Similarly, reliance of the respondents on the amendment made to the Office Memorandum is also unfounded. Though, the said amendment allows

a LOC to be issued even in cases not covered by the Guidelines and in economic interest of India, no such case has been made out against the

petitioner. It has not been explained how the travel of the petitioner would in any manner prejudice the economic interest of the country. Mere mention

of the power in the counter affidavit cannot take the place of giving reasons for exercise of the same.

In view of the above, the Impugned LOC and the extension thereof issued against the petitioner is set aside and quashed. It is however, made

clear that the present order will not in any manner impact the investigation on the FIR/ECIR registered by the EOW/Enforcement Directorate. This

Court has not made any observation on the merits of the allegations made in the FIR/ECIR and/or the defence of the petitioner.

The petition is allowed. There shall be no order as to costs.