Delhi High Court
Brij Bhushan Kathuria vs Union Of India & Ors. on 24 March, 2023
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
2023:DHC:2220
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 24th March, 2023
+ W.P.(C) 3374/2021 & CM APPL. 32126/2021
BRIJ BHUSHAN KATHURIA ..... Petitioner
Through: Ms. Maninder Acharya, Sr. Advocate
with Mr. Siddharth Bhatli & Ms. Lashita
Dhingra, Advocates. (M: 9953208487)
versus
UNION OF INDIA & ORS. ..... Respondents
Through: Mr. Rakesh Kumar, CGSC along with
advocate Mr. Shriram Tiwary, Mr.
Salman Razi and Mr. Nitin Agnihotri,
Advocates for SFIO. (M:
8860658903)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J.(Oral)
1. This hearing has been done through hybrid mode.
2. The Petitioner in the present petition has challenged the Look Out Circular (hereinafter, 'LOC') issued against him by Respondent Nos. 3 and 4 i.e., the Ministry of Corporate Affairs (hereinafter, 'MCA') and the Serious Fraud Investigation Office (hereinafter, 'SFIO') and prays for the same to be quashed.
3. The brief background of the matter is that the Petitioner is a Chartered Accountant who was inducted in the Board of M/s Techpro Systems Limited, as a Non-Executive Independent Director, in the Annual General Meeting dated 26th September 2007. The Petitioner is working in Oman and relocated there on 24th October, 2009. He is stated to have resigned from the post of Independent Director of M/s Techpro Systems Limited on 13th January, 2015 due to his full time employment in Oman and health Signature Not Verified Digitally Signed W.P.(C) 3374/2021 Page 1 of 6 By:RAHUL Signing Date:28.03.2023 19:10:24 2023:DHC:2220 concerns. In 2017, Corporate Insolvency Resolution Proceedings were initiated against M/s Techpro Systems Limited, and on 5th May 2019, the Resolution Plan was approved by the NCLT.
4. The case of the Petitioner is that he had travelled to India on 2nd February, 2021 and was scheduled to fly back to Oman on 21st February, 2021. However, he was stopped at the airport and was intimated about the LOC which has been issued against him at the behest of the SFIO. The Petitioner was thereafter issued summons bearing F. No. SFIO/INV/TSL/1304/2020 by the SFIO on 23rd February 2021, through WhatsApp, to personally appear before the Investigating Officer on 2nd March, 2021.
5. Detailed arguments were heard in this matter in the stay application by the Court on 12th April, 2021. Submissions were made both on behalf of the Petitioner and on behalf of the Respondents who had informed the Court that an SFIO investigation is going on against the Petitioner. The case of the Petitioner was that he was an independent Director and had no role in the running of the company. The SFIO's case to the contrary was that he was one of the longest serving Directors of the company and a member of the Audit Committee as well.
6. The Court after considering the submissions made, held as under:
"10. At this stage, the Court is merely considering the question as to whether the LOC deserves to be stayed i.e., whether the interim relief is to be granted. The pleadings are yet to be completed. The admitted facts, insofar as the Petitioner is concerned, are as under:-
(i) The Petitioner is employed in Oman. His certificate of employment has been placed on record and he has been working there since 2009.Signature Not Verified Digitally Signed W.P.(C) 3374/2021 Page 2 of 6 By:RAHUL Signing Date:28.03.2023 19:10:24
2023:DHC:2220
(ii) The Petitioner's wife and children reside in Delhi NCR.
(iii) The Petitioner has several immovable properties in Delhi/NCR, a list of which has been submitted to the SFIO.
(iv) The Petitioner has been asked by his employer in Oman to immediately join back duty.
XXX
18. There is no criminal case pending against the Petitioner. His role is also yet to be ascertained by the investigating authorities. Phrases such as 'economic interest' or 'larger public interest' cannot be expanded in a manner so as to include an Independent Director who was in the past associated with the company being investigated, without any specific role being attributed to him, as in the present case. The Petitioner poses no flight risk given the fact that his wife and children are residents of Delhi/NCR. This Court is inclined to suspend the operation of the LOC, subject to the following conditions:-
(i) The Petitioner shall present himself in the Indian Embassy in Oman on the 1st and 3rd Monday of every month.
(ii) The Petitioner shall file an undertaking in this Court, which would be supported with an undertaking by his wife, that the Petitioner would be present before the authorities upon being issued 15 days' notice.
(iii) Insofar as the immovable properties are concerned, the immovable properties in the list emailed to the Court Master today i.e., at times 1 and 4, shall not be transferred/alienated by the Petitioner/his family, who may have rights in the same. Copies of documents relating to the properties shall be filed in Court in a sealed cover within two weeks.
(iv) The Petitioner's wife shall not leave India without seeking leave from the Court.
7. The investigation has since continued. Today a status report of the Signature Not Verified Digitally Signed W.P.(C) 3374/2021 Page 3 of 6 By:RAHUL Signing Date:28.03.2023 19:10:24 2023:DHC:2220 investigation has also been shown to the Court. After perusing the status report, it is noted that the SFIO itself has vide its communication dated 18th January, 2022 issued to the Bureau of Immigration, modified its stand in respect of the Petitioner as under:
"To, The Assistant Director/SIC Bureau of Immigration (BOI) East Block-VIII, Sector-1, RK Puram, New Delhi-110066 Subject: Renewal of existing 'Look Out Circular' (LOC) with partial modification Sir.
Please refer to the earlier reference vide file no.- SFIO/INV/TSL/1304/2020 dated 20.01.2021 and e- mail by the undersigned dated 20.01.2021 wherein Look Out Circulars (LOCs) were issued against each of the person present in the below mentioned list in order to prevent them to flee out of the country.
Sr. Name Date of Birth Father's Passport
No. Name No.
X XXX XXX XXX XXX
6. Brij Bhushan 11/04/1956 Sobh Raj Z3853736
Kathuri Kathuri
X XXX XXX XXX XXX
2. In this regard, it is requested to retain the LOCs against all the mentioned persons after completion of one year which is completing on 19.01.2022
3. Further, the duly filled prescribed proforma in respect of each person are enclosed for necessary action at your end.
4. This issues with approval of the competent authority."
Signature Not Verified Digitally Signed W.P.(C) 3374/2021 Page 4 of 6 By:RAHUL Signing Date:28.03.2023 19:10:242023:DHC:2220 XXXXX
(b) INFORM ARRIVAL/DEPARTURE OF SUBJECT (BUT NO OTHER ACTION TO BE TAKEN)"
8. After having perused the report and the communication dated 18th January, 2022, and the latest proforma which the SFIO has issued to the Bureau of Immigration, this Court is of the opinion that the present case would fall under Clause (i) of the Office Memorandum dated 22nd February, 2021 which reads as under:
"6. The existing guidelines with regard to issuance of Look Out Circulars (LOC) in respect of Indian citizens and foreigners have been reviewed by this Ministry. After due deliberations in consultation with various stakeholders and in supersession of all the existing guidelines issued vide this Ministry's letters/ O.M. referred to in para 1 above, it has been decided with the approval of the competent authority that the following consolidated guidelines shall be followed henceforth by all concerned for the purpose of issuance of Look Out Circulars (LOC) in respect of Indian citizens and foreigners:-
XXX (I) In cases where there is no cognizable offence under IPC and other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country. The Originating Agency can only request that they be informed about the arrival/ departure of the subject in such cases."
9. In terms of the above extract from the Office Memorandum and in view of the SFIO's own stand, it is directed that the immigration authorities shall inform the SFIO about the entry and exit of the Petitioner from time to time. No other embargo would exist on the Petitioner for his travel from and into India. It is clarified that the Petitioner would have no obligation to Signature Not Verified Digitally Signed W.P.(C) 3374/2021 Page 5 of 6 By:RAHUL Signing Date:28.03.2023 19:10:24 2023:DHC:2220 inform the SFIO about his travel outside India. The obligation would be of the immigration authorities to inform the SFIO.
10. The above change in the status of the LOC, shall be subject to the following conditions:
i. The Petitioner shall present himself in the Indian Embassy in Oman on the first Monday of every month. ii. The Petitioner's undertaking filed in compliance of order dated 12th April, 2021 that he shall present himself before the Authorities upon a 15 days' notice, shall continue.
11. All the remaining conditions imposed on the Petitioner vide order dated 12th April, 2021 shall stand discharged.
12. With these observations, the present petition, along with all pending applications, is disposed of.
13. It is made clear that if the investigation is not concluded by the SFIO within a year, the Petitioner is permitted to approach this Court for modification/discharge of the conditions.
PRATHIBA M. SINGH JUDGE MARCH 24, 2023 dj/sk Signature Not Verified Digitally Signed W.P.(C) 3374/2021 Page 6 of 6 By:RAHUL Signing Date:28.03.2023 19:10:24