2022 (12) TMI 1513 - HC - Companies Law

Non-cooperation with SFIO leads LOC to remain, medical travel abroad paused pending review after full cooperation

HC considered a petition challenging an LOC and seeking permission to travel to the U.K. for medical treatment. The record and statements made by the ... Seeking stay of the operation of the Look Out Circular (LOC) - seeking permission to travel outside India to U.K. for medical reasons - petitioner did not cooperate - HELD THAT:- As per the facts of this matter as also the statements made by the Petitioner to the authorities, it is clear that there is non-cooperation by the Petitioner. Under these circumstances, at this stage, the Court is not inclined to let the Petitioner travel abroad. However, over the next two months, if the Petitioner fully cooperates with the SFIO, the Court is willing to reconsider the issue. Accordingly, list this matter on 20th March, 2023. Issues:1. Stay of Look Out Circular (LOC) issued by SFIO2. Permission to travel outside India for medical reasons3. Quashing of LOC and reasons for denying travel permissionAnalysis:1. Stay of Look Out Circular (LOC):The petitioner filed a writ petition seeking a stay on the operation of the Look Out Circular issued by the Serious Fraud Investigation Office (SFIO). The court, in a previous order, directed the petitioner to provide details of bank accounts, designate an authorized representative to cooperate with SFIO, and submit an undertaking for cooperation. The court observed non-cooperation by the petitioner in providing bank account statements beyond two years and criticized the excuse of physical bank visits for statements. The court emphasized the need for full compliance and cooperation in the investigation.2. Permission to Travel Abroad:Another application was filed seeking permission to travel to the U.K. for medical reasons. The court required compliance with specific conditions, including providing bank account details, appointing an authorized representative, and committing to cooperation in the investigation. The court noted the appointment of a novice authorized representative and expressed dissatisfaction with the lack of knowledge and cooperation shown. The court highlighted the seriousness of the investigation involving significant sums and family-run companies, emphasizing the need for full cooperation and provision of necessary documents.3. Quashing of LOC and Reasons for Denying Travel Permission:The petitioner sought quashing of the LOC and reasons for denying travel permission. The court reviewed the petitioner's cooperation level and found non-cooperation in providing essential information and documents for the investigation. The court noted the petitioner's lack of knowledge regarding family-run companies under investigation and reluctance to disclose relevant details. Due to the lack of cooperation and non-disclosure of critical information, the court declined to grant permission to travel abroad at that stage. The court indicated a willingness to reconsider the issue if the petitioner fully cooperates with the SFIO over the next two months.In conclusion, the court emphasized the importance of full cooperation in the investigation and compliance with the conditions set for travel permission. The matter was listed for further review in March 2023, with the possibility of reconsidering the travel permission based on the petitioner's future cooperation with the investigating authorities.