Karnataka High Court: While deciding the instant petition wherein prayer was made to call for records pertaining to the Look Out Circular (LOC) issued by the Bureau of Immigrations (BOI) against the petitioner at the request made by the Enforcement Directorate, the Bench of Hemant Chandangoudar, J.*, declared the LOC unenforceable opining that the continuation of the LOC against the petitioner indefinitely on the ground of suspicion alone will be an abuse of process of law and also the object of LOC. The Court pointed out that Section 50 of PMLA is a crucial provision and states that a person, who is being summoned for investigation must be provided with a written notice specifying the nature and the reasons for it. While the said provision does not explicitly use the term “probable cause”, it emphasizes the importance of providing valid reasons and grounds for summoning an individual. The summoning of a person repeatedly without probable cause or reasonable ground and only on the ground of suspicion alone is not in accordance with the principles of due causes and fairness.
The Crime Investigation Department in 2019 registered the FIR against 19 accused (including petitioner’s brother) alleging that they had hacked the E-Procurement Portal of Government of Karnataka. The police after investigation laid the charge sheet for the offences under Sections 120-B, 201, 204, 384, 419, 420 r/w Sections 34, 35 and 37 of IPC and Sections 43, 66, 66(C) and (D) of the Information Technology Act, 2000.
The Enforcement Directorate initiated proceedings under the provisions of Prevention of Money Laundering Act, 2002.
On 27-11-2020, the Central Crime Branch registered the FIR in Cr.No.153/2020 against the petitioner’s brother and other accused for the offence punishable under Section 120-B, 384, 419, 420 and 471 IPC alleging that the accused had hacked the inter poker games.
The petitioner who was working at Netherlands came to India on 12-08-2021, and he was issued with summons and pursuant to the same he appeared. On 13.01.2022, when the petitioner was to board his flight to Netherlands, the respondent — authorities restrained the petitioner from proceeding to Netherlands and affixed an endorsement on the petitioner’s passport with the seal ‘Cancelled’. However, the copy of the LOC was not furnished to the petitioner.
The petitioner filed multiple petitions requesting the withdrawal of the LOC, but the same were rejected and it left open to the petitioner to cooperate with the investigation and convince the investigating agency that he had no role in the money laundering case registered against his brother.
Counsel for the petitioner argued that in the absence of cognizable offence registered against the petitioner and in the absence of reasonable grounds, the petitioner cannot be repeatedly summoned which would otherwise result in violating the principles of fairness, justice and the Rule of Law, more so when the petitioner has cooperated with the investigation. The Petitioner cannot be expected to give a self-incriminating statement.
Per contra, the respondent argued that the instant petition is not maintainable and that there are reasonable grounds for summoning the petitioner to record his statement for investigation of the offence under PMLA against his brother. Therefore, if the LOC issued against the petitioner is withdrawn, the petitioner in all probability will abscond and not available for further investigation in future.
The primary issue that came up before the Court was that whether summoning of the petitioner under section 50 of PMLA on suspicion alone is legally permissible.
The Court noted that the concept to issue Look-out Circular is to secure a person against whom the cognizable offence is registered. The Court further pointed out that in the instant case, there is no cognizable offence registered against the petitioner nor a non-bailable warrant is issued against the petitioner. The petitioner has been summoned solely on the ground that his brother has been implicated as an accused in the scheduled offences and under the PMLA.
The Court observed that the petitioner was summoned under Section 50 of the PMLA, 2002, on several occasions, and in pursuance of the same, he appeared and his statement was recorded, and in the statement so recorded, nothing incriminating is elicited to summon him for further investigation. LOC cannot be issued solely on the ground that the petitioner has not provided information to the convenience and satisfaction of the respondent.
The Court stated that the principle of reasonable suspicion/ probable cause is fundamental to the criminal justice system, and it ensures that persons are not subjected to investigation or summoned to give statements during the course of investigation which would otherwise result in violating the principles of fairness, justice and the Rule of Law, more so when the petitioner has cooperated with the investigation.
It was pointed out that the respondent has not placed any material to substantiate that the suspicion or reasonable ground to summon petitioner is based on credible information, except that he is the brother of the accused. “In the absence of any reasonable suspicion leave alone probable cause, the LOC issued for securing the presence of the petitioner for recording further statements would be arbitrary and violate the fundamental rights enshrined under Article 21 of the Constitution”.
Vis-a-vis the maintainability of the petition, the Court declined to accept the contention of the respondent that LOC can only be challenged under Article 226 and not under 482 CrPC. The Court pointed out that proceedings initiated under the provisions of PMLA against the brother of the petitioner is the basis for issuing LOC and any action taken or order passed under PMLA can be challenged by invoking inherent jurisdiction under Section 482 Cr.P.C or under Article 226 r/w Section 482 Cr.P.C to prevent the abuse of the process of law/or to secure the ends of justice.
Thus, with the afore-stated analysis, the Court allowed the petition and declared the impugned LOC as cancelled.
[Sudarshan Ramesh v. Union of India, 2023 SCC OnLine Kar 71, decided on 26-09-2023]
*Order by Justice Hemant Chandangoudar
Advocates who appeared in this case :
Petitioner- Sandesh J. Chouta, Senior Counsel for Gaurav N., Advocate
Respondent- Sundareshan, Addl. Solicitor General of India; Madhukar M. Deshpande, Advocate for R3; H. Shanthi Bhushan, Deputy Solicitor General of India, for R1 & R2
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