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    The document discusses a writ petition filed against the issuance of a Look Out Circular against the petitioner by the Directorate of Enforcement. The court found that the LOC was issued without authority of law and in violation of guidelines. The court set aside the LOC but directed the petitioner to not leave the country for a week to cooperate with the ongoing investigation.

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    Nitin Sandesara

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    transition.delhioffice
    14 views6 pages
    The document discusses a writ petition filed against the issuance of a Look Out Circular against the petitioner by the Directorate of Enforcement. The court found that the LOC was issued without authority of law and in violation of guidelines. The court set aside the LOC but directed the petitioner to not leave the country for a week to cooperate with the ongoing investigation.

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    Judgment

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    3. Nitin Sandesara

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    The document discusses a writ petition filed against the issuance of a Look Out Circular against the petitioner by the Directorate of Enforcement. The court found that the LOC was issued without authority of law and in violation of guidelines. The court set aside the LOC but directed the petitioner to not leave the country for a week to cooperate with the ongoing investigation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    14 views6 pages

    Nitin Sandesara

    Uploaded by

    transition.delhioffice
    The document discusses a writ petition filed against the issuance of a Look Out Circular against the petitioner by the Directorate of Enforcement. The court found that the LOC was issued without authority of law and in violation of guidelines. The court set aside the LOC but directed the petitioner to not leave the country for a week to cooperate with the ongoing investigation.

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    © All Rights Reserved
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    of 6

    74

    $~51
    * IN THE HIGH COURT OF DELHI AT NEW DELHI
    + W.P.(C) 7559/2017
    NITIN SANDESARA ..... Petitioner
    Through: Mr Mukul Rohotagi, Senior Advocate
    with Mr Saurabh Kirpal, Mr Sameer
    Rohatgi, Mr Ranjeeta Rohatgi, Mr
    Abhishek Vashisht, Advocates.

    versus

    DIRECTORATE OF ENFORCEMENT
    AND ORS ..... Respondents
    Through: Mr Amit Mahajan, CGSC with Mr
    Nitya Sharma and Mr Kunal Dutt,
    Advocates for UOI.

    CORAM:
    HON'BLE MR. JUSTICE VIBHU BAKHRU
    ORDER
    % 29.08.2017
    CM No. 31234/2017

    1. Exemption is allowed, subject to all just exceptions.

    2. The application stands disposed of.

    W.P.(C) 7559/2017 & CM No. 31233/2017


    3. The petitioner has filed the present petition, inter alia, praying that the
    Look Out Circular (hereafter ‘the LOC’) issued against the petitioner be set
    aside.

    4. The present petition was moved on 28.08.2017 and this Court had
    directed respondent nos. 1 and 2 to produce the relevant file. The concerned

    W.P.(C) 7559/2017 Page 1 of 1


    75

    file has been produced and perused by this Court. The notings in the file
    indicate that the concerned officers of the Enforcement Directorate had
    found that there was a “prima facie” case of violation of the Foreign
    Exchange Management Act, 1999 (FEMA) against the petitioner and had,
    therefore, commenced investigations. Certain premises were searched in
    connection with the alleged offences pertaining to violation of FEMA and
    certain documents have also been seized from those premises. The file
    produced also indicates that certain search and seizure actions were also
    initiated by the Income Tax Authorities under the Income Tax Act, 1961.

    5. The petitioner was also issued summons, which this Court was
    informed was duly complied with and the petitioner has been cooperating
    with the investigation being conducted by the Enforcement Directorate.

    6. Notwithstanding that the petitioner had been appearing before the


    respondent, a request for a LOC was issued by the Enforcement Directorate
    on 10.8.2017. Curiously, the proforma of the LOC does not mention any
    offence or any pending case; the spaces in the proforma for the request for
    issuance of the LOC, which are required to be filled with such details, are
    blank and have been scored out completely. Nonetheless, the respondents
    have requested that the petitioner be detained, if found leaving the country.

    7. This Court finds that the said action is palpably without authority of
    law. The intended effect of the request for LOC was clearly to detain the
    petitioner. This is so as the request made was to detain the petitioner and
    hand him over to police authorities. The respondents have not been able to
    show any statutory provision, which permits them to detain citizens in the

    W.P.(C) 7559/2017 Page 2 of 2


    76

    manner as sought to be done.

    8. As noticed above, the petitioner is carrying on with the investigation


    and there is no FIR registered against the petitioner as yet. Although, in
    terms of section 19 of the Prevention of the Money-Laundering Act, 2002
    (PMLA) certain officers of respondent no. 1 have the power to arrest a
    person; such action can only be taken only if the concerned officer has
    reasons to believe that the person is guilty of an offence punishable under
    PMLA. Further such belief would necessarily have to be grounded on
    material in possession of the concerned officer and such reasons would have
    to be recorded in writing. It is relevant to mention that in terms of Section 62
    of the PMLA, detention or arrest of any person without recording reasons,
    invites punitive measures.

    9. In the present case, the petitioner was detained at the airport at the
    instance of the Enforcement Directorate and such detention was, plainly,
    without following the provisions of PMLA and without authority of law.

    10. The counsel for the petitioner also points out that violation of FEMA
    is not one of the scheduled offences under the PMLA. This court has
    perused the notings on the file produced and the same indicates that at the
    time when the request for the LOC was issued, the officers of the
    Enforcement Directorate were investigating violation of FEMA and not any
    scheduled offence. Thus, it is also difficult to accept that at the material time
    the officers of the Enforcement Directorate could entertain any belief that
    the petitioner was guilty of any offence under the PMLA.

    11. Mr Kripal, learned counsel for the petitioner has also drawn the

    W.P.(C) 7559/2017 Page 3 of 3


    77

    attention of this court to the Office Memorandum (OM) dated 27.10.2010


    which refers to the judgement dated 11.08.2010 passed by this court in
    Sumer Singh Salkan v. Asst director & Ors: W.P. (Crl) no. 1315/2008 and
    sets down the guidelines for issuance of LOC. Paragraph 8(g) and (h) of the
    said OM are relevant and are set out below:-

    "8. In accordance with the order dated 26.7.2010 of the


    High Court of Delhi, the matter has been discussed with the
    concerned agencies and the following guidelines are hereby
    laid down regarding issuance of LOCs in respect of Indian
    citizens and foreigners:

    xxxx xxxx xxxx

    g) Recourse to LOC is to be taken in cognizable


    offences under IPC or other penal laws. The details
    in column IV in the enclosed proforma regarding
    'reason for opening LOC' must invariably be provided
    without which the subject of an LOC will not be
    arrested/detained.

    h) In cases where there is no cognizable offence under


    IPC or 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.

    xxxx xxxx xxxx"

    12. In the present case, the LOC does not indicate any credible reason for
    issuing the same. Plainly, recourse to LOC cannot be taken as a matter of
    course; restricting the right of a citizen to travel is a serious imposition on

    W.P.(C) 7559/2017 Page 4 of 4


    78

    his/her fundamental rights and even if it is assumed that such action is


    permissible in law, it can be taken only when necessary and for good reason.

    13. This Court also finds it difficult to understand the conduct of the
    officers of the Enforcement Directorate. Admittedly, the petitioner had
    joined the investigations and had appeared before the concerned officers as
    required by them. Notwithstanding the same, a request for LOC was issued
    and the petitioner was not even informed of such LOC. Notwithstanding the
    legality or validity of the LOC, the petitioner would have taken that into
    account before making his travel plans. The petitioner became aware of the
    LOC at 11.00 PM on 22.08.2017, when he was about to board a flight.

    14. Mr Mahajan, learned counsel appearing for the respondent submits


    that even though the investigation may have commenced for violation of
    FEMA, it appears that the petitioner may have also violated other laws,
    which fall within the scope of scheduled offences under the PLMA, as well.
    However, this is not bourne out by the file notings and the request for LOC
    also does not indicate any such reason.

    15. Thus, insofar as the LOC issued is concerned, the same is wholly
    unsustainable. Accordingly, the LOC issued against the petitioner is set
    aside. However, considering that the Enforcement Directorate is continuing
    with the investigation and may require the attendance of the petitioner, this
    Court considers it apposite to direct the petitioner not to leave this country
    till 04.09.2017. Mr Rohatgi, the learned counsel appearing for the petitioner
    also states, on instructions, that the petitioner shall not attempt to leave this
    country and will cooperate with the investigation. He further states that the

    W.P.(C) 7559/2017 Page 5 of 5


    79

    petitioner will appear before the respondent authorities today at 5.45 p.m.

    16. It is clarified that the respondents are at liberty to take all steps as
    available to them in law, however, they shall not detain the petitioner in the
    manner as aforesaid and without complying with the provisions of the law.

    17. The petition is disposed of.

    18. Order dasti under the signature of Court Master.

    VIBHU BAKHRU, J
    AUGUST 29, 2017
    pkv

    W.P.(C) 7559/2017 Page 6 of 6

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