Delhi High Court - Orders
Saral Verma vs Union Of India & Ors on 20 August, 2024
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~60
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 6461/2019, CM APPL. 27395/2019, CM APPL. 27057-
27058/2023
SARAL VERMA .....Petitioner
Through: Mr. Saurabh Kirpal, Senior Advocate
with Ms. Neena Nagpal, Mr. Malak
Bhatt, Mr. Vishvendra Tomar and
Ms. Supriya Julka, Advocates.
versus
UNION OF INDIA & ORS. .....Respondents
Through: Mr. Sumit Kumar, Advocate for R-2.
Mr. Rajesh Gogna, CGSC with
Ms. Priya Singh, Advocate for UOI.
Mr. Ravi Sharma, SSP with
Mr. Praphull Kumar, Mr. Ishann
Bhardwaj and Ms. Madhulika Rai
Sharma, Advocates for CBI.
Mr. Arun Aggarwal, Mr. Shivam
Saini and Mr. Praful Rawat,
Advocates for R-7/BOB.
Mr. Kunal Tandon, Advocate for
Indian Overseas Bank.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 20.08.2024
1. The Petitioner is a guarantor for the credit facilities availed by M/s Frost International Ltd.1 from time to time from a consortium of 14 public sector banks. In June, 2018, the account of FIL was declared as a non-
1"FIL"W.P.(C) 6461/2019 Page 1 of 7
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:05 performing asset and the consortium lender banks initiated action. FIL is now in CIRP proceedings. In light of the foregoing, Look-Out-Circular2 was issued at the behest of Indian Overseas bank/Respondent No.3, Bank of India/Respondent No.2, Bank of Baroda/Respondent No.7 against the Petitioner. An FIR bearing No. RCBD12020E001 dated 19th January, 2020 was also filed in relation to the defaulting of loans availed by FIL and its group companies, wherein the Petitioner has also been named as an accused. In relation to the same, the CBI/Respondent No.6. also issued a Look-Out- Circular against the Petitioner.3 However, it is pertinent to mention that no charge chargesheet has been filed in the said case till date. That apart, there are two pending FIRs in which the Petitioner has been named as an accused, details whereof, are as follows:
i. FIR bearing No. RC0062022A0004 dated 30th January 2022, registered at CBI, ACB, Lucknow.
ii. FIR bearing No. RC4E/2020/CBI/SCB/LKO dated 11th June, 2020 registered at CBI SCB, Lucknow.
A chargesheet has been filed in the FIR bearing no. RC4E/2020/CBI/SCB/LKO and the court has taken cognizance in the said case. The Petitioner has in fact furnished bond under section 88 of the Code of Criminal Procedure, 1978, which stands accepted without any conditions or restrictions on travel. As regards the FIR bearing No. RC0062022A0004, no charge sheet has been filed to date. Pertinently, there is no LOC issued by the CBI with respect to these FIRs.
2. The Petitioner asserts that he is merely a guarantor of FIL and not a 2 "Impugned LOC issued at behest of Respondent Banks"
3"Impugned LOC issued at the behest of CBI"W.P.(C) 6461/2019 Page 2 of 7
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:05 director of FIL. The Petitioner is stated to work with FTA HSRP Solution Ltd and the issuance of LOC has impacted his professional obligations in in as much as his job requires him to source material from foreign lands including China for the manufacture of High Security Number Plates i.e., the business in which FTA HSRP is engaged in. With regards to his relationship with FIL, the Petitioner submits that he is merely a minority shareholder of the same holding approx. 5.6% of its equity. The Petitioner has never been a Director of FIL or involved in its day-to-day affairs in any manner whatsoever and is not even employed with FIL. Moreover, this Court has, on several occasions suspended the LOCs, allowing Petitioner to travel abroad subject to certain conditions imposed by this Court.
3. In the above background, the Petitioner now seeks quashing of the Impugned LOC issued at the behest of Respondent Banks and the CBI. Mr. Saurabh Kirpal, Senior Counsel for the Petitioner, however, very fairly states, that the conditions imposed by this Court on Petitioner's travel in the previous orders may be continued even subsequent to quashing of the Impugned LOCs. In other words, the Petitioner is willing to furnish a security to the Court and also intimate the Central Bureau of Investigation,4 about their intending departure and return to the country every time he travels abroad. It is further submitted that Petitioner No. 1 was summoned by CBI in September 2022, and he has fully cooperated with the investigation. Mr. Kirpal states that the Petitioner shall continue to cooperate in the investigation and appear before the investigating officer whenever he is required to do so.
4. Counsels for the banks as well as CBI strongly oppose the W.P.(C) 6461/2019 Page 3 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:07 Petitioners' request and submit that an FIR bearing No. RCBD12020E0001 has been registered in Bank Security Fraud Branch CBI, New Delhi, on 19th January, 2020 under Section 120-B read with Sections 420/467/468/471 of IPC with Sections 13(2) read with 13(l)(d) of the Prevention of Corruption Act, 1988 and is pending investigation. Furthermore, the Respondent Banks in their counter affidavit have argued that the Petitioner besides being personal guarantor of the defaulting entity- M/s FIL is also the corporate guarantor and has played an active role in the management of the defaulting entity by siphoning off the funds. It is further highlighted that the Petitioner is also a director in Globiz Exim Ltd which is a group entity of FIL and stands as a corporate guarantor to the loans of FIL. Moreover, FTA HSRP where the Petitioner is a director is also running under the shades of the defaulting entity-FIL. Additionally, the Respondents apprehend that if the Petitioner is allowed to travel abroad, there is every chance that he may not return to India.
5. The Court has considered the rival contentions of the parties and deliberated upon the same. The Petitioner is involved in a business which requires frequent travel abroad. The court has on multiple occasions allowed the Petitioner to travel abroad with certain conditions imposed. The Petitioner has not violated these conditions and returned. Furthermore, the Petitioner is a guarantor of the defaulting entity-FIL and not a director. Additionally, the FIR bearing no. RCBD12020E0001 was registered in 2020, however, the chargesheet has not been filed till date. In light of the above and the fact that the Petitioner is willing to abide by the conditions imposed in the previous orders for suspension of LOC, the Impugned LOC 4 "CBI"
W.P.(C) 6461/2019 Page 4 of 7This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:07 issued at the behest of CBI shall remain suspended till the chargesheet is filed by the CBI in respect of FIR bearing no. RCBD12020E0001.
6. As regards the Impugned LOC issued at the behest of Respondent Banks, in the opinion of the court the same cannot sustain. This court has in a similar connected matter W.P.(C) 9247/2019, quashed the LOC issued at the behest of Respondent Bank. Following a similar approach, it must be noted that, the Ministry of Home Affairs5, which is the nodal ministry responsible for issuing guidelines for international travel, has noted that an LOC can be issued in cases of cognizable offences under the Indian Penal Code and other penal laws and only in exceptional circumstances, can its scope be expanded. Apart from the FIR referred to above, which is directed to be suspended until the charge sheet is filed, there are two other criminal proceedings pending against the Petitioner. Pertinently, there is no LOC issued by the CBI with respect to these FIRs. Additionally, in FIR bearing no. RC4E/2020/CBI/SCB/LKO a charge sheet has been filed and the trial court has taken cognizance in the said case. The Petitioner has in fact furnished bond under section 88 of the Code of Criminal Procedure, 1978, which pertinently stands accepted without any conditions or restrictions on travel. As regards FIR bearing No. RC0062022A0004, no charge sheet has been filed in the said case. Furthermore, there is no material placed before the Court to demonstrate the Petitioner's criminal culpability that could suggest his intention to abscond. The fact that the Petitioner has travelled abroad and returned also minimizes the flight risk. Therefore, the merely because recoveries have to be effected cannot be a basis for opening an indefinite LOC against him. Such indefinite restrictions on the Petitioner's W.P.(C) 6461/2019 Page 5 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:07 movement infringe upon his fundamental right to travel abroad, a right protected under Article 21 of the Constitution of India., as observed in the landmark judgments of Maneka Gandhi v. Union of India6 and Satwant Singh Sawhney v. D. Ramarathnam, Assistant Passport Officer and Ors.7
7. In light of the above, there is no material on record which can justify Respondent Banks insisting that the Petitioner's right to travel should be restricted and he should not be allowed to depart from the country. Accordingly, the present petition can be disposed of with the following directions:
a. The Impugned LOC issued at the behest of Respondent Banks is quashed.
b. The Impugned LOC issued at the behest of CBI shall remain suspended till the chargesheet is filed by the CBI in respect of FIR bearing No. RCBD12020E0001. Once the chargesheet is filed, the Petitioner shall be free to approach the concerned Court for quashing of the said LOC in terms of the judgement passed in the case titled Sumer Singh Salkan vs. Assistant Director & Ors.8 Till such time, whenever the Petitioner was to undertake any travel, he shall abide by the following conditions:
i. Petitioner shall deposit, by way of a security, FDR amounting to INR 50 Lakhs with the Registrar General of this Court, which shall be kept on an auto-renewal mode.
ii. An affidavit of undertaking shall be furnished to the Registrar General of this Court that Petitioner shall return to India on the relevant date.5
"MHA"6
(1978) 1 SCC 248 7 AIR 1967 SC 1836 8 Judgement dated 11th August, 2010 in W.P (Crl) No. 1315/2008 W.P.(C) 6461/2019 Page 6 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:08 iii. Petitioner is directed to provide the complete itinerary regarding his travel to the concerned Investigating officer at least two days prior to the date of departure. Petitioner shall also furnish a copy of the air tickets purchased by him to the Investigating Officer.
iv. Petitioner shall also provide contact numbers where he shall be available during the stay abroad and at least one of the said contact numbers shall be kept operational at all times, subject to all fair exceptions, including the period the Petitioner(s) is/are on board the aircraft.
8. The petition is disposed of along with pending application in the afore- noted terms SANJEEV NARULA, J AUGUST 20, 2024 W.P.(C) 6461/2019 Page 7 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/08/2024 at 20:34:08