TMI Blog2022 (1) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... that the decision of the authorities is without application of mind to the relevant factors, the Court can, and in fact, should come to the rescue of the individual - there are no merit in the respondent s plea that this Court should not examine the legality of the impugned LOC. Whether having made a request for issuance of the LOC under the OM dated 27.10.2010, the respondents can now seek to defend the LOC by relying on a Clause introduced only vide the OM dated 05.12.2017 which for the first time permits issuance of a LOC, even when there is no involvement in a cognizable offence, a pre-condition for issuance of a LOC under the OM dated 27.10.2010? - HELD THAT:- Once a request for issuance of the impugned LOC against the petitioner was made in February 2019, his case was necessarily required to be governed by the OM of 2010, along with all up to date amendments, including the amendment introduced in 2017. The respondent no.3 s action, in referring to the OM of 2010, while forwarding its request for issuance of LOC against the petitioner was therefore in order, and cannot be read in such a restrictive manner so as to imply that, no reference having been made to the OM dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Pvt. Ltd., and M/s Aastha Apparels Pvt. Ltd. having their registered offices in Delhi. It is claimed that the two companies are in the business of exporting garments to the USA, Europe, South America, the UK and the UAE, and based on their performance are the recipients of various certificates and awards from the Government including a Two Star Export House Status and an Authorized Economic Operator T-1 Certificate . 3. On the basis of a Warrant of Authorization (WoA) issued on 05.02.2019 u/s 132(1) of the Income Tax Act against a third party, namely The Kochar Group comprising inter alia of Shri Avtar Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh Kochar and M/s. HL Impex (P) Ltd, a search action was conducted at the petitioner s residence from 06.02.2019 to 09.02.2019. During this search, besides some loose papers, a hard disk, a digital video recorder, a key to locker no. 150F, Bank of India, Punjabi Bagh New Delhi was also seized and as per procedure, the statements of both the petitioner and his wife were recorded. A WoA was thereafter, issued on 12.02.2019 against the petitioner and his wife for a search of the aforesaid locker, which led to the seizure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government of Dubai. 9. However, upon finding that no action was being taken on his representations, the petitioner, on 06.08.2019, approached the learned Additional Chief Metropolitan Magistrate (ACMM), Tis Hazari, New Delhi by way of an application seeking quashing of the LOC. On 27.08.2019, the learned ACMM while suspending the operation of the impugned LOC, subject to certain conditions, granted permission to the petitioner to travel abroad except to the UAE. Aggrieved by this order, the respondents preferred a Revision Petition before the learned Additional District Judge (ADJ), which petition came to be allowed on 07.09.2019. It was held that since the petitioner was neither a complainant nor an accused nor a witness in any matter pending before the ACMM, the order suspending the LOC was without jurisdiction. 10. It is in these circumstances that the petitioner has approached this Court seeking quashing of the LOC. In support of the petition, Mr. Vikas Pahwa, learned senior counsel for the petitioner, at the outset, submits that the impugned LOC having been issued on the basis of a mere suspicion that the petitioner owns undisclosed foreign assets and has interests in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C received from the respondent no.3 was under the OM dated 27.10.2010, which lays down a mandatory pre-condition of person being involved in a cognizable offence under the IPC or any other penal law. He, further, submits that while issuing the impugned LOC the respondents have ignored the guidelines issued by this Court in Sumer Singh Salkan v. Asst. Directors and others 2010 SCC OnLine Del 2699 wherein it has been held that a criminal investigation must necessarily have been initiated against the individual for a LOC to be issued against him. 12. Mr.Pahwa, further, submits that even the stands taken by respondent nos. 1 and 3 to defend the impugned LOC are contradictory; while the respondent no.3 has, in its counter, stated that the LOC has been issued since the petitioner leaving the country would be detrimental to the economic interests of India and therefore against larger public interest, the reasons provided by respondent no.1, in complete contrast refer to the petitioner s alleged undisclosed foreign assets and purported interests in foreign entities, liable for penalty under the Income Tax Act, the Black money (Undisclosed foreign income and assets) Imposition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untry by deliberately not disclosing to this Court the fact that after the two income tax assessments carried out subsequent to the search actions conducted at his residence and of his locker, which locker, the petitioner had admittedly not operated for the last six years, his additional income has been assessed as only ₹ 21.40 crore. In the light of this factual position, neither can the respondents bald statement that the petitioner is involved in a fraud of ₹ 1500 crore be relied upon nor can the petitioner s case fall under the ambit of this Clause introduced in the OM dated 05.12.2017. 14. Without prejudice to his aforesaid submission that there was no ground for issuance of the impugned LOC, Mr.Pahwa contends that, even otherwise the impugned LOC stood automatically lapsed after a period of one year i.e. on 25.02.2020, as the respondents have not produced any record to suggest that the same was ever renewed by them. His plea, thus being, that both under the OM dated 27.10.2010 and the OM dated 05.12.2017, it fell upon the respondent no.3 to make a request for renewal of the LOC after the duration of one year, the respondent no.3, having never made any such req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... munity and the fact that his entire family including his two children are based in Delhi. He therefore, prays that the impugned LOC be quashed by this Court. 18. On the other hand, Mr. Zoheb Hossain learned counsel for the respondent no.3, at whose instance, the impugned LOC has been issued, at the outset submits that the issuance of a LOC is in the nature of administrative action, with which decision this Court ought not to interfere, keeping in view the settled legal position that the scope of judicial review in such cases is extremely limited. Once on the basis of the available material, the said respondent has arrived at a conclusion that the departure of the petitioner from the country would be prejudicial to its economic interests, thus warranting issuance of a LOC against him, this Court ought not to substitute its view for that of the respondent no.3. By placing reliance on the decision of Union of India v. G. Ganayutham (1997) 7 SCC 463, he contends that as long as the decision to issue the impugned LOC is found to be a plausible one, the same cannot be faulted and therefore prays that the writ petition be dismissed on this ground alone. 19. Mr. Hossain, then sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has disclosed, the petitioner, through his relatives and friends, has a controlling interest in two other companies: M/s. JBB Apparels Pvt. Ltd. and M/s. JBN Apparels Pvt. Ltd. Moreover, Mr. Avtar Singh Kochar, who has been found to be running a Hawala scam, and in connection with whose affairs the initial warrant of authorization was issued for the search actions at the petitioner s residence, has also disclosed that some of the companies owned or controlled by the petitioner, were being used by him for the process of money laundering. He, therefore, contends that if all the aforesaid offences are taken into account, the amount of tax evasion by the petitioner would be over INR 1500 crores. 22. Mr. Hossain, then submits, that the petitioner s plea that the LOC has been issued only on the basis of a draft agreement for investment by the petitioner in an offshore company i.e. M/s Centurion International Limited from his residence, is wholly misplaced as there is supporting evidence, in the form of his WhatsApp chats, confirming that, as per the draft agreement, he had indeed made a payment of 1.65 million AED on 06.01.2019 for the purchase of 10% of shares in M/s Centurion Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the country. 24. Mr. Anurag Ahluwalia, learned counsel for the Respondent no.1 the agency that has issued the impugned LOC at the instance of respondent no.3, while adopting the submissions made on behalf of the respondent no.3, submits that the procedure for issuing a LOC, prescribed in the OM dated 27.10.2010 as amended vide the OM dated 05.12.2017, has been scrupulously followed. He, further, contends that in any event, the respondent no.1 is only the issuing agency, and has therefore acted upon the inputs provided by respondent no.3. Once respondent no.3, has brought out that the departure of the petitioner from the country would be detrimental to its economic interests, there was no reason for respondent no.1 to doubt the same or to refuse to issue the LOC. He, therefore, also prays that the present writ petition be dismissed. 25. From the rival submissions of the parties and a perusal of the record, I find that four issues arise for my consideration in the present case. The first and foremost, being whether the Court can interfere with the issuance of a LOC or whether it is purely an administrative decision, with which the Court ought not to interfere, as sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reigners reg. In continuation to the Ministry OM No.25016/31/2010- Imm dated 27.10.2010 and as approved by the Competent Authority, the following amendment is hereby issued (emphasis supplied):- Amendment- Read as: In exceptional cases, LOCs can be issued even in such cases, as would not be covered by the guidelines above, whereby departure of a person from India may be declined at the request of any of the authorities mentioned in Clause (b) of the above-referred OM, if it appears to such authority based on inputs received that the departure of such person is detrimental to the sovereignty or security or integrity of Indian or that the same is detrimental to the bilateral relations with any country or to the strategic and/or economic interests of India or if such person is allowed to leave, he may potentially indulge in an act of terrorism or offences against the State and/or that such departure ought not be permitted in the larger interest at any given point in time. Instead of : In exceptional cases, LOCs can be issued without complete parameters and/or case details against CI suspects, terrorists, anti/national elements etc. in larger nationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment to the procedure of issuance of a LOC through the OM dated 05.12.2017. It is the respondents stand that the Clause introduced in 2017 is only in the nature of an amendment to the OM issued in 2010 and therefore, the applicable OM continues to be the OM dated 27.10.2010. It is, thus, the respondent s plea that the request for issuance of the LOC could therefore, be made only under the OM of 2010 and was therefore, correctly made under the same. 31. Upon a bare perusal of the provisions of the OM dated 05.12.2017, I find myself unable to accept the petitioner s plea that the request for LOC, having been made under the OM of 2010, no resort could be made to the Clause introduced in 2017. The OM dated 05.12.2017 was clearly in the nature of an amendment to the circular dated 27.10.2010, the very title of which OM, makes it evident that an existing Clause of the OM dated 27.10.2010, dealing with cases covered under the exception Clause was sought to be amended. Even otherwise, I find, that this OM of 2017, except for introducing an amendment to the existing OM of 2010, does not lay down or even refer to any new guidelines. The OM dated 05.12.2017, therefore, only sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year from the date of issue and name of the subject shall be automatically removed from the LOC thereafter unless the concerned agency requests for its renewal within a period of one year. With effect from 1.1.2011, all LOCs with more than one year validity shall be deemed to have lapsed unless the agencies concerned specifically request BoI for continuation of the names in the LOC. However, this provision for automatic deletion after one year shall not be applicable in following cases: a. Ban-entry LOCs issued for watching arrival of wanted persons (which have a specific duration); b. loss of passport LOCs (which ordinarily continue till the validity of the document); c. LOCs regarding impounding of passports; d. LOCs issued at behest of Courts and Interpol. As also to Clause J of the guidelines issued on 22.02.2021, which reads as under: (J) the LOC opened shall remain in force until and unless a deletion request is received by BoI from the Originator itself. No LOC shall be deleted automatically. Originating Agency must keep reviewing the LOCs opened at its behest on quarterly and annual basis and submit the proposals to delete the LOC, if any, imm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in exceptional circumstances, a mandatory pre-condition would be a formation of a reasonable belief by the originating authority that the departure of an individual would be detrimental to the economic interests of India to such an extent that it warrants curtailment of an individual s fundamental right to travel abroad. Turning to the facts of the present case, what is emerging is that the entire case of the respondents to believe that the petitioner s departure from the country will be detrimental to the economic interests of India , hinges on an unsigned draft agreement and some WhatsApp chats, which it is the respondent s own case are not conclusive. The respondents, are therefore, awaiting a response to their FT TR references to the authorities at Dubai, United Arab Emirates to proceed against the petitioner under the Black Money Act 2015, Income Tax Act 1969, and the Prevention of Money Laundering Act 2002, which were, in fact, the reasons provided by respondent no.3 itself to Respondent no.1, while forwarding its request for issuance of the LOC. 37. The petitioner, on the other hand, has produced certificates from the Govt. of Dubai, to show that the allegations lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad, in such a routine and mechanical manner without due consideration of the fact that even after almost three years there is still no sufficient evidence to charge the petitioner under the Black Money Act 2015, Income Tax Act 1969, or the Prevention of Money Laundering Act 2002. It is important to note that the petitioner herein, earns his livelihood by exporting garments to the United States of America, Europe, South America, the United Kingdom and the United Arab Emirates; an integral part of such business is overseas travel. The LOC does not only curtail his right to personal liberty but also his right to livelihood, as enshrined in Article 21 the Constitution of India. Thus, the issuance of a LOC against the petitioner, without any end in sight, would definitely cause irreparable and considerable damage to the business interests of the petitioner. One also has to keep in mind that the issuance of a LOC is an extremely severe step and when purportedly issued in exceptional circumstances, on the ground of the departure of the person being detrimental to the economic interests of India , the authorities must tread with caution. Once this Clause itself is meant to be used in exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of Karti P. Chidambaram (Supra) because in the present case, the LOC has been issued with a view to interrogating the revisionist in the matter at hand wherein the FIR has already been lodged and the investigation is going on. Merely because the revisionist so far had been cooperating with the investigation, may not lead us to believe that he would not evade his arrest in future. If some incriminating evidence comes on record against him, the possibility cannot be ruled out in this case of his fleeing abroad. What clearly emerges is that in the aforesaid case, the Court was dealing with a situation, where a FIR had already been lodged and a criminal investigation was ongoing against the person against whom the LOC had been issued. The same was the situation in S. Martin v. Deputy Commissioner of Police SCC OnLine Mad 426. In the present case, as has already been noted, no proceedings under any penal law have, in fact, been initiated against the petitioner. These decisions are therefore, clearly distinguishable and do not, in any manner forward the case of the respondents. 42. For the aforesaid reasons, impugned LOC is wholly unsustainable and deserves to be qua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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