Delhi HC modifies Look Out Circular allowing free travel with embassy reporting requirements

Delhi HC modified a Look Out Circular (LOC) issued by Ministry of Corporate Affairs and Serious Fraud Investigation Office against the petitioner. The court determined the case fell under specific office memorandum provisions, directing immigration authorities to inform SFIO of petitioner's entry/exit rather than restricting travel. The petitioner may travel freely to/from India without informing SFIO directly. Conditions imposed include monthly reporting at Indian Embassy in Oman and maintaining previous undertaking to appear before authorities on 15 days notice. Petition disposed of with modified LOC status.

---

---

Issues:
Challenge to Look Out Circular (LOC) issued by Ministry of Corporate Affairs and Serious Fraud Investigation Office (SFIO), Role of Petitioner as an Independent Director, Stay application, Conditions for suspension of LOC, Modification of LOC guidelines, Obligations of immigration authorities regarding Petitioner's travel.

Analysis:
The Petitioner, a Chartered Accountant and former Non-Executive Independent Director of a company, challenged the Look Out Circular (LOC) issued against him by the Ministry of Corporate Affairs (MCA) and SFIO. The Petitioner was stopped at the airport while returning to Oman and was informed about the LOC issued against him. The SFIO had initiated an investigation against the Petitioner. The Petitioner argued that he had no active role in the company's operations, while the SFIO contended that he was a long-serving Director and a member of the Audit Committee.

The Court considered the facts that the Petitioner was employed in Oman, his family resided in Delhi/NCR, and he had immovable properties in Delhi/NCR. Notably, there were no criminal cases pending against the Petitioner, and his specific role in the investigated company was yet to be determined. The Court decided to suspend the operation of the LOC, subject to certain conditions, including regular reporting to the Indian Embassy in Oman, filing undertakings, and restrictions on property transfers and international travel by the Petitioner's wife.

Subsequently, the SFIO modified its stand regarding the Petitioner in a communication to the Bureau of Immigration, requesting the retention of LOC against the Petitioner. The Court analyzed the new guidelines for LOC issuance, emphasizing that in cases without cognizable offenses, the subject cannot be detained or prevented from leaving the country. The Court directed immigration authorities to inform SFIO about the Petitioner's entry and exit, with no other travel restrictions imposed on the Petitioner.

In conclusion, the Court discharged previous conditions imposed on the Petitioner, subject to new conditions regarding reporting to the Indian Embassy and continued compliance with undertakings. The Court disposed of the petition and allowed the Petitioner to seek modification or discharge of conditions if the investigation by SFIO was not concluded within a year.

---