Court’s Decision:
The Bombay High Court set aside the Look-Out Circular (LOC) issued against the petitioner by the Serious Fraud Investigation Office (SFIO). The court found the LOC to lack justification, as the reasoning for its issuance was absent in the provided documentation. The court directed SFIO to notify immigration authorities about the cancellation of the LOC within 48 hours, emphasizing that a fresh LOC could only be issued if circumstances warrant it in the future.
Facts:
- Background of the Petitioner:
- The petitioner is a 67-year-old senior citizen residing in Mumbai.
- She is the wife of the late Sudhir Moravekar, who was accused in matters related to Pan Card Club Limited.
- Investigations into Pan Card Club Limited resulted in various legal proceedings by the SFIO and the Economic Offenses Wing (EOW).
- Case History:
- An FIR was filed by the EOW in 2017 against the petitioner’s husband. A chargesheet in this case was filed in 2021.
- Separately, SEBI initiated prosecution in 2019 regarding financial irregularities related to Pan Card Club Limited.
- The SFIO filed a chargesheet in February 2024 in the present case, which was acknowledged by the Special Judge in September 2024.
- Petitioner’s Role:
- Although accused in the SFIO’s investigation, the petitioner has cooperated with the authorities, attending inquiries as required.
- No chargesheet has been filed against her despite the ongoing investigation.
- The petitioner was granted anticipatory bail and has roots in the community, indicating no risk of absconding.
- The LOC:
- The SFIO issued the LOC against the petitioner but failed to provide a clear justification in the prescribed column meant for outlining reasons.
- The petitioner challenged the LOC, asserting that its continuation was unwarranted after the filing and cognizance of the SFIO’s chargesheet.
Issues:
- Was the issuance of the LOC against the petitioner justified in the absence of a clear reason?
- Should the LOC remain in effect when the petitioner has cooperated with the investigation and has been granted anticipatory bail?
Petitioner’s Arguments:
- LOC’s Lack of Justification:
- The petitioner argued that the LOC issued by the SFIO was arbitrary and lacked any specified reason in the designated column.
- Previous Case Precedent:
- The petitioner referred to a related matter where the LOC against another accused was withdrawn after cognizance of the chargesheet.
- Compliance and Cooperation:
- The petitioner highlighted her consistent cooperation with the investigation and emphasized that she was neither a flight risk nor attempting to evade trial.
Respondent’s Arguments:
- Necessity of LOC:
- The SFIO justified the LOC by arguing that it was essential to ensure the petitioner’s availability for trial and further investigation.
- Submission of LOC Documentation:
- The SFIO produced a photocopy of the LOC as part of its defense, which was reviewed by the court.
Analysis of the Law:
- Purpose of an LOC:
- The court reiterated that an LOC is issued to prevent individuals from absconding or becoming unavailable for trial. It is not meant to be a routine measure but should be supported by substantial evidence of flight risk.
- Deficiency in SFIO’s LOC:
- The LOC proforma submitted by the SFIO lacked an explanation in the column designated for specifying the reason for issuance. The court emphasized that this omission invalidated the LOC, as it failed to meet the basic requirement of transparency and justification.
- Cooperation and Bail:
- The petitioner’s cooperation with the investigation, along with her anticipatory bail order, further reduced any justification for the LOC’s continuation.
Precedent Analysis:
- While no specific precedents were cited in the judgment, the court relied on established principles governing the issuance of LOCs and the rights of individuals who have been granted bail.
Court’s Reasoning:
- Invalidity of LOC:
- The court highlighted the lack of justification in the LOC, stating:
“The purpose of issuing the LOC is only to ensure whether the person is likely to abscond, a flight risk, and not available for trial.”
- The court highlighted the lack of justification in the LOC, stating:
- Petitioner’s Circumstances:
- The court acknowledged the petitioner’s cooperation with authorities and her established roots in society, concluding that she did not pose any risk of absconding.
- Legal Safeguards:
- The court clarified that while the current LOC was invalid, the SFIO retained the authority to issue a fresh LOC if future circumstances warranted it.
Conclusion:
The court quashed the LOC issued against the petitioner and directed the SFIO to notify immigration authorities within 48 hours. It emphasized the importance of providing valid reasons for issuing LOCs and safeguarding individual rights. The court also clarified that the SFIO could issue a fresh LOC if the petitioner’s conduct justified such an action in the future.
Implications:
- Accountability for Investigative Agencies:
- The judgment reinforces the principle that LOCs cannot be issued arbitrarily and must be based on documented and valid reasons.
- Rights of Accused Individuals:
- The decision underscores the protection of individuals’ rights, particularly senior citizens, who cooperate with investigations and do not pose a flight risk.
- Future Issuance of LOCs:
- Investigative agencies must ensure that all required details, including justifications, are properly recorded when issuing LOCs to avoid legal challenges.