2024 (5) TMI 673 - HC - Money Laundering

Look Out Circular quashed against petitioner in money laundering case due to lack of evidence and cooperation shown

Sanjay Kumar Agrawal Versus Union of India Through Satyabrat Kumar, Additional Director, Enforcement Directorate, Government of India, The State of Maharashtra.

The Bombay HC quashed the Look Out Circular (LOC) issued by ED against petitioner in a money laundering case. Petitioner, working in Bahrain since ... Money Laundering - Seeking quashing and setting aside of the Look Out Circular (LOC) - detention on the ground of non-cooperation - HELD THAT:- It appears that the petitioner after completing his education moved to Bahrain and has been working in Bahrain, since then. It also appears that the petitioner was issued summons by the respondent No. 1-ED, pursuant to which, he replied to the said summons, however, he could not come to India due to Covid-19 pandemic. It is also not in dispute that subsequently, in November 2020 the petitioner came to India and that he had informed the ED office of his return to India. It is also not in dispute that the petitioner appeared before the respondent No. 1-ED on seven occasions commencing from 22nd December 2020. The petitioner was last summoned by the ED on 21st February 2023. It appears that thereafter, the petitioner has not been summoned by the respondent No. 1-ED. It is well settled that a person cannot be detained merely because he is not cooperating. Non-cooperation also can be a result of a person not having any information with respect to the case in question and as such there is no merit in the said submission. The ED has been investigating the case since 2019 and till date, despite the petitioner having appeared before the ED, the ED has not found any material qua the petitioner. The petitioner has been deprived of his livelihood since December 2020. The petitioner has been working in the Middle East for more than two decades, and as such, having regard to the fact, that the respondent No. 1-ED has not found any material, qua the petitioner till date, it would not be appropriate to detain the petitioner any further. The impugned LOC issued as against the petitioner on 17th January 2020 by the respondent No. 1-ED, is quashed and set aside - Petition allowed. Issues involved: The judgment involves the quashing of a Look Out Circular (‘LOC’) issued by the Enforcement Directorate (‘ED’) against the petitioner. The main issue revolves around the petitioner's cooperation with the investigation and the necessity of continuing the LOC.Details of the Judgment:Issue 1: Quashing of Look Out Circular (LOC) The petitioner sought the quashing of the LOC issued by the ED. The petitioner, who was not arraigned as an accused in the Prevention of Money Laundering Act case, had been working in Bahrain and Dubai for over two decades. Despite appearing before the ED multiple times, no material was found against him in the PMLA case registered in 2019. The petitioner's livelihood was affected since December 2020 due to the LOC. The court noted that non-cooperation cannot be a sole reason for detention, especially when the petitioner lacks relevant information. As the ED failed to produce any inculpatory material against the petitioner, the court quashed the LOC.Issue 2: Conditions for the Petitioner The judgment laid down specific conditions for the petitioner post quashing of the LOC. The petitioner was required to abide by the undertaking given to the court, appear before the ED with a minimum seven days notice when summoned, and provide details of his residence and contact information while abroad. The petitioner was prohibited from contacting the accused in the case and was instructed to inform the ED of any changes in residence or contact numbers. The judgment also stated that the ED could issue a fresh LOC if necessary in the future.Conclusion: The High Court of Bombay allowed the petition to quash the LOC against the petitioner and provided detailed terms and conditions for the petitioner to follow post-quashing. The judgment emphasized the lack of incriminating material against the petitioner and highlighted the importance of cooperation in investigations while safeguarding individual rights.