Economic & Public Interest Valid Grounds For Initiating LOCs Provided They Are Founded On Substantial Material: J&K High Court

“It is to be borne in mind that issuance of LOCs under the aforesaid grounds is to be resorted to only in exceptional cases and it has to be shown that the person concerned is evading the process of the Investigating Agency and that there is substantial material before the competent authority to show that departure of such person would be detrimental to the economic interests of India or to the public interest”, Justice Sanjay Dhar emphasised.

The case involved Rupen Patel, the Chairman and Managing Director of Patel Engineering Company Limited, which had been accused of irregularities in securing a contract for the Kiro Hydroelectric Project in Kashmir. While Patel himself was not named as an accused in the FIR, a Look Out Circular was issued against him by the Central Bureau of Investigation (CBI). This prevented Patel from traveling abroad for a business trip.

Patel challenged the LOC in the High Court, arguing that there were no specific allegations against him and that he had actively cooperated with the investigation. The CBI, on the other hand, argued that Patel was a flight risk and that his departure from India would hamper the investigation and potentially cause harm to the country's economic interests.

The court, in its judgment, acknowledged that traditionally, LOCs were issued only when there was a likelihood that an accused would evade arrest or trial. However, citing previous judgments and relevant guidelines issued by the Ministry of Home Affairs Justice Dhar emphasised that LOCs could only be issued in exceptional cases and must be founded on substantial material.

Referencing Sumer Singh Salkan v Assistant Directors and Others (Delhi High Court) and Sri Harshvardhana Rao vs. Union of India and Others (Karnataka High Court) the bench reiterated that LOCs are a coercive measure to compel a person to surrender to investigation or court proceedings and should be issued only when there are sufficient reasons and cannot be based on mere possibility or suspicion.

The court further underscored that the purpose of an LOC is to ensure the presence of an individual during investigation or trial and cannot be used to impede their fundamental right to travel abroad.

In this specific case, the court found that the CBI had not established that Patel was evading the investigation. The court noted that Patel and his company officials had appeared before the investigating agency on multiple occasions and had provided all the information sought. The court also took note of the CBI's failure to produce a copy of the LOC or demonstrate the existence of any material to suggest that Patel's departure would be detrimental to national interests.

Highlighting that an Investigating Agency cannot expect a confession from a suspect and must utilize appropriate investigative techniques to gather evidence Justice Dhar emphasized that a person's refusal to provide certain information cannot be equated with non-cooperation unless they evade summons or refuse to surrender electronic devices for investigation.

“Merely because the petitioner is not answering the queries of the Investigating Agency to its liking, it cannot be a case of non-cooperation to the investigation. It is only if the petitioner does not respond to the summons or process of respondent No. 2 that it can be stated that he is not cooperating with the Investigating Agency. Such is not the case at hand”, the court remarked.

Consequently, the court quashed the LOC against Patel. However, recognizing the concerns of the CBI, the court imposed certain conditions on Patel's travel abroad.

Case Title: Rupen Patel Vs Union Of India

Citation: 2024 LiveLaw (JKL) 102

Mr. Sunil Sethi, Sr. Adv. with Mr. Ankesh Chandel, Adv. Mr. Rahil Raja, Adv appeared for the petitioner, Ms. Monika Kohli, Sr. AAG represented the respondents.

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