Delhi High Court upholds LOC against Businessman amid fraud investigation into Fortis Healthcare and Religare Enterprises

Delhi High Court: A petition was filed by the petitioner, an Indian businessman and erstwhile billionaire with Fortis Healthcare, Religare, and Ranbaxy Laboratories, under Section 482 of CrPC read with Article 226 and 227 of the Constitution of India, seeking to set aside the impugned order dated 05-06-2024 passed by the Additional Sessions Judge & Special Judge (Companies Act), Dwarka Courts, New Delhi, denying the petitioner’s request for suspension of a Look Out Circular (LOC) and permission to travel abroad from 14-06-2024 to 04-07-2024 and again from 20-08-2024 to 10-09-2024. Dharmesh Sharma, J., rejected the reliefs claimed by the petitioner seeking permission to go abroad to attend the graduation ceremony of his two sons on the scheduled dates as there are sufficient grounds to raise an inference that in case such liberty is granted to the petitioner, he may abuse the same and may not come back to India so as to scuttle the entire investigation and the ensuing process.

The petition was instituted on 07-06-2024, and notices were issued to the respondents, SFIO (Serious Fraud Investigation Office) and the Bureau of Immigration, Ministry of Home Affairs, Government of India. The petitioner argued that the SFIO’s investigation into Fortis Healthcare Limited (FHL), Religare Enterprises Limited (REL), and other associated companies, including the petitioner’s role, began on 17-02-2018 under Section 212(8) of the Companies Act, 2013. Despite this, no complaint or final report has been filed against the petitioner. He has not been arrested, and even when he applied to surrender in December 2021, the SFIO opposed it, stating that he was not considered an accused at that time.

The petitioner has cooperated fully with the SFIO’s investigation. His two sons, studying in the UK, are completing their courses in June 2024. The petitioner wishes to attend their graduation ceremonies, one on 01-07-2024 at Durham University and the other on 02-09-2024 at University College London.

Counsel for petitioner highlighted judicial orders from various courts in other criminal proceedings against the petitioner that allowed him to travel abroad for similar reasons. These include orders from FIR by the SEBI Special Judge, Greater Mumbai, and others. It was emphasized that permissions to travel abroad have been granted in all other pending cases except by the Special Judge.

Counsel for the SFIO argued that the petitioner’s surrender was unnecessary as he was in custody of different agencies at the relevant time. They contended that the petitioner’s affidavit, claiming no ownership of properties in India or elsewhere, was false. The petitioner had significant shareholdings and long-term investments in companies abroad, suggesting that he was a flight risk. The investigation revealed that funds had been diverted to various offshore companies, with over Rs. 1800 crores siphoned off from India.

The Court prioritized national interest over the petitioner’s personal reasons for travel and emphasized that the petitioner’s family was already settled abroad, and there was a strong likelihood that he would not return if allowed to travel. The Court further observed that the investigation was ongoing, and the petitioner’s complete role in the financial irregularities was yet to be determined. The mere fact that other courts had granted permission to the petitioner to travel abroad did not influence the present case.

The Court, after considering the arguments and evidence, found that the petitioner had significant assets and properties abroad, directly or indirectly. The petitioner’s incomplete and flawed disclosures in his affidavit did not inspire confidence. The paramount national interest and the need to safeguard the interests of stakeholders defrauded by the companies under investigation outweighed the petitioner’s personal reasons for travel.

The Court stated that the petitioner’s willingness to provide security by nominating a family member to stay in India was inadequate and illusionary. The judicial orders cited by the petitioner in other cases were distinguished based on the specific circumstances of each case. The magnitude of the SFIO’s investigation and the economic interest of the country took precedence.

Thus, the Court held that granting the petitioner liberty to travel abroad posed a significant risk of him not returning to face the investigation and potential trial. Therefore, the petition was dismissed, and the impugned order dated 05-06-2024 was upheld.

[Dr Shivinder Mohan Singh v. SFIO, 2024 SCC OnLine Del 4433, decided on 26-06-2024]

Advocates who appeared in this case :

Mr. Amit Sibal, Sr. Adv. with Mr. Aditya Dewan, Mr. Shiven Varma, Ms. Neeha Nagpal and Mr. Vishvendra Tomar, Advocates for petitioner

Ms. Arunima Diwedi, CGSC with Mr. Piyush Kumar, Sr. Prosecutor, Mr. Anand Kumar, Asst. Director, Mr. Vibhav Singh and Ms. Pinky Pawar, Advs. for R-1/SFIO

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