The Delhi High Court held that the state is unjustified in restricting individual’s right to travel abroad on failure to establish rights that would be ‘detrimental to economic interests of India’.
The Petitioner, Vikas Choudhary is a director in two companies, namely M/s Nautilus Metal Crafts 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”.
The petition under Article 226 of the Constitution of India seeks quashing of the Look Out Circular (LOC) issued against the petitioner by the Ministry of Home Affairs at the instance of the Income Tax Department.
The single bench of Justice Rekha Palli held that the impugned LOC is wholly unsustainable and deserves to be quashed. However, keeping in view the respondent plea, that it is still awaiting inputs from the authorities at Dubai, upon receipt of which information, cases under various penal laws are likely to be initiated against the petitioner, “I am of the view, that it would be in the interest of justice for the petitioner to inform respondent, as and when he decides to leave the country, for the next one year,” the court added.
“Merely because the OM dated 05.12.2017 permits the issuance of a LOC, in exceptional circumstances, even when the individual is not involved in any cognizable offence under the IPC or any other penal law, it has to be remembered that this power, is meant to be used in exceptional circumstances and not as a matter of routine, it must therefore, be interpreted in a manner that indicates an offence of such a magnitude so as to significantly affect the economic interests of the country. Mere suspicion of a person opening bank accounts in other countries and of investing in a foreign company cannot, in my view, be accepted as the basis for holding that the petitioner being allowed to travel abroad would be ‘detrimental to the economic interests of India’, when it is undisputed that this suspicion has remained a suspicion for such a long period of almost three years,” the court noted.
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