Mere suspicion of the ​person opening bank accounts in other countries and investing in foreign company cannot be the basis to stop person from travelling abroad: Delhi HC

The Delhi High Court in the case of Vikas Chaudhary v/s Union of India and Ors. ruled that mere suspicion of a person opening bank accounts in other countries and investing in foreign companies cannot be the basis to stop a person from traveling abroad.

The Petitioner 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”. 

Mr. Pahwa, counsel appearing for the petitioner, contended that once despite having conducted raids on the petitioner’s premises and having taken all possible coercive steps against him, the respondents, for want of any incriminating material against him, have not registered any case against him, either under the IPC or any other Penal Law, they cannot now try to justify the LOC by relying on the Office Memorandum, which was admittedly never invoked at the time of issuing the LOC.

Mr. Zoheb Hossain, counsel for the respondent, at whose instance, the impugned LOC has been issued, contended that the issuance of a LOC is in the nature of administrative action, with which decision of the Court ought not to interfere, keeping in view the settled legal position that the scope of judicial review in such cases is extremely limited. Once on the basis of the available material, the said respondent has arrived at a conclusion that the departure of the petitioner from the country would be prejudicial to its economic interests, thus warranting issuance of a LOC against him, the Court ought not to substitute its view for that of the respondent.

The single judge bench of Justice Rekha Palli noted that no proceedings under any penal law. Mere suspicion of a person opening bank accounts in other countries and of investing in a foreign company cannot, 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 quashed the impugned LOC, and the extension thereof, by directing the petitioner to, for the next one year, give intimation to the respondent, as and when he departs from or enters the country.  

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