LOOK OUT CIRCULAR IN VIOLATION OF THE PROVISONS OF ‘FEMA’

[Mr. M. GOVINDARAJAN]

In ‘Asif Hanif Thara v. Union of India and others’ - 2023(3) TMI 334 - Karnataka High Court, the petitioner is a businessman dealing import and export under the firm name ‘Unik Traders’.  The Directorate of Enforcement caused a search in the premises of the petitioner alleging the violation of the provisions of Foreign Exchange Management Act (‘FEMA’ for short).  The Directorate of Enforcement issued a summon to the petitioner on 11.10.2022 with a direction to appear before the Authorities on 28.10.2022.  The petitioner requested for an adjournment.  His request was acceded to and a fresh summon was issued on 28.10.2022 directing the petitioner to appear before the Authorities on 11.11.2022.  This hearing was postponed by the Department and informed the petitioner that the next hearing date would be informed to the petitioner.

In the meanwhile the petitioner and his son entered the Bangalore international airport to take a flight to Doha to witness the Foot ball world cup matches.  His son was allowed by the authorities.  The petitioner was stopped as his travel was restricted due to the issue of look out circular issued against the petitioner.  The board pass was cancelled.  The petitioner filed a writ petition before the High Court seeking immediate travel to Doha to witness the Foot ball world cup matches.  The petitioner was allowed to travel to Doha by the Karnataka High Court subject to the condition that the petitioner was to file an affidavit prior to travel and after return in terms of travel itinerary.  Even after his return from Doha the lookout circular was in vogue the petitioner filed the present writ petition before the High Court.

The petitioner submitted the following before the High Court-

• The petitioner is not an accused in any crime under the IPC or under any other law.
• The house of the petitioner was searched on 01.10.2022 for the alleged violation of the Act which is not penal in nature and all that can be imposed, if proved against him is only a fine.
• The petitioner did cooperate with the 2^nd respondent and appearance of the petitioner pursuant to summons was postponed by the Enforcement Directorate itself and till date he has not been issued any fresh summons.
• The petitioner is a law abiding citizen and has deep roots of business in the nation.

The petitioner, therefore, prayed the Court to recall the lookout circular and the fundamental right of the petitioner to travel abroad be restored.

The first respondent submitted that they are only the executants of any request from the originator i.e., the Enforcement Directorate. If the Enforcement Directorate does not require the presence of the petitioner in the nation there would be no warrant to stop the petitioner while travelling.

The petitioner submitted that he was permitted to travel to Doha on the interim order passed by the High Court.  Even before that when he tried to travel to Srilanka and at that point in time he was stopped at the Airport for questioning.  This is in violation of the fundamental right.

The High Court analyzed the entire facts of this case.  The High Court observed that the petitioner was not aware of any look out circular issued against him.  The petitioner came to know the lookout circular issued against him only on 11.12.2022 when he was restricted to go to Doha.  His fundamental right to travel abroad was curtailed on the strength of a lookout circular which was made known to him on the moment when he was to board the flight.  The Authorities did not communicate the same to the petitioner.  Therefore the petitioner approached the High Court and got interim order and travelled to Doha on submission of affidavits of such travel.

The High Court directed the authorities concerned that the petitioner cannot be stopped from travelling abroad.  Further they are directed the petitioner shall not be questioned or stopped.  He shall not be given separate treatment.  He should be permitted to travel like any other passenger, as what is now required is only an information of arrival and departure of the subject between respondents 1 and 2. The impugned lookout circular cannot operate as an impediment to the petitioner whatsoever to leave the shores of the nation and the communication aforesaid is only between the originator and the Bureau of Immigration and therefore, it becomes an internal communication. It is for respondents 1 and 2 to communicate themselves with regard to arrival and departure of the petitioner.          

The High Court further observed that right to travel/travelling abroad is a fundamental right. A lookout circular cannot be issued against any subject in thin air. There is no reason for issuing such look out circular.  The categories on which the lookout circulars can be issued are borne out from several official memoranda issued by Union of India from time to time and right to travel can be curtailed only in terms of those ingredients found in the official memoranda. The case at hand does not have a single ingredient as found in those official memoranda for issuance of a lookout circular.  The petitioner is not an accused under the provisions of any law.  Therefore the issue of lookout circular is against the provisions of law.

The High Court relied on the following Supreme Court judgments-

• MRS.MANEKA GANDHI V. UNION OF INDIA - 1978 (1) TMI 161 - SUPREME COURT, - the Supreme Court held that the right to travel abroad is an important basic human right of great significance.  The refusal of such freedom to go abroad would contravene that genuine human right. Therefore the said right cannot be curtailed except in accordance with law.
• SATISH CHANDRA VERMA v. UNION OF INDIA - 2019 (4) TMI 1765 - SUPREME COURT - the Supreme Court held that the right to travel abroad is an important basic human right for it nourishes independent and self-determining creative character of the individual, not only by extending his freedoms of action, but also by extending the scope of his experience. The right also extends to private life; marriage, family and friendship are humanities which can be rarely affected through refusal of freedom to go abroad and clearly show that this freedom is a genuine human right.

The High Court held that the petitioner cannot be prevented or detained for the purpose of questioning or even questioned at any airport or anywhere else on the pretext of exchange of information between the respondents, the Originating Agency and the Bureau of Immigration. The Originating Agency and the Bureau of Immigration shall update on their database with regard to non-questioning of the petitioner, as is observed in the course of the order in compliance of the order.  The High Court allowed the petition.