Central Bureau Of Investigation vs Asif Khader
2021 Latest Caselaw 5886 Kant

                                       Crl.P.1479/2021

                            1




 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 25TH DAY OF JUNE 2021

                        BEFORE

  THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY

        CRIMINAL PETITION No.1479 OF 2021

BETWEEN:

CENTRAL BUREAU OF INVESTIGATION,
BANKING SECURITIES FRAUD BRANCH,
NO. 36, BELLARY ROAD,
GANGANAGAR,
BANGALORE - 560032
REP BY ITS INSPECTOR OF POLICE         ... PETITIONER

(BY SRI P.PRASANNA KUMAR, SPL. SPP)

AND:

ASIF KHADER,
DIRECTOR,
M/S. CRANES SOFTWARE INTERNATIONAL LTD.,
R/O FLAT NO. CG - 01,
H.M. GLADIOUS APARTMENTS,
NO. 34, AGA ABBAS ALI ROAD,
ULSOOR
BENGALURU- 560008.                   ... RESPONDENT

(BY SRI SANDESH CHOUTA, SR. COUNSEL
    FOR SRI ISMAIL M. MUSBA, ADV.)


     THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF CR.P.C. PRAYING TO QUASH THE ORDER DATED 19.01.2021
PASSED BY THE XXI ADDITIONAL CITY CIVIL AND SESSIONS
                                             Crl.P.1479/2021

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JUDGE AND PRINCIPAL SPECIAL JUDGE FOR CBI CASES (CCH-4),
BENGALURU IN RC.NO.8/(E)/2017 AND CONSEQUENTLY ALLOW
THIS CRL.P.

     THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 10.06.2021 AND COMING ON FOR
'PRONOUNCEMENT OF ORDERS' THIS DAY, THE COURT MADE
THE FOLLOWING:
                        ORDER

The Central Bureau of Investigation has filed this

petition under Section 482 of the Code of Criminal

Procedure, challenging the order dated 19th January 2021

in R.C.No.8(E)/2017 passed by the court of XXI

Additional City Civil and Sessions Judge and Principal

Special Judge for CBI Cases, Bengaluru (CCH-24).

2. Brief facts of the case as revealed from the

records are:

On the complaint of the Zonal Manager of Bank of

India, Bangalore, dated 12.05.2017 and 24.05.2017, the

petitioner-CBI have registered a FIR in R.C.No.8(E)/2017

against M/s.Cranes Software International Limited and

its Directors and also unknown public servants. In the Crl.P.1479/2021

complaints, it was averred that the accused persons

named in the complaint had approached the

complainant-Bank with a request for sanctioning of loan

of Rs.30 Crores towards working capital and another sum

of Rs.40 Crores towards short term loan. Both these

loans were sanctioned and disbursed by the Bank.

Subsequently the said accused persons requested the

Bank for a corporate loan of Rs.100 Crores stating that

they required the amount for the purpose of acquiring a

Software Company and also for clearing high cost loan

availed by them from J & K Bank, Bengaluru. After the

said loan of Rs.100 Crores was sanctioned and disbursed,

the accused persons within a short span of ten days

diverted the loan amount to different accounts and it was

not utilized for the purpose for which it was sanctioned.

Thereafterwards the accused-Company and its Directors

have failed to repay the loan amounts and an outstanding

amount of nearly Rs.200 Crores was due from them. On Crl.P.1479/2021

the allegations that, the accused persons had induced the

complainant-Bank by making false assurances for the

purpose of obtaining the loans and accordingly, the

Company and its Directors, who are the accused, had

defrauded the Bank, a complaint was lodged, based on

which FIR was registered by the petitioner for the offences

punishable under Sections 120-B read with Section 420

of IPC, Section 13(2) read with Section 13(1)(d) of the

Prevention of Corruption Act, 1988.

3. Having regard to the gravity of the offence, a

Look-Out Circular (for short "LOC") was issued against

the respondent and it was being extended from time to

time. The respondent had challenged the LOC before this

court in Writ Petition No.55157/2018 and the said

petition was disposed of by this court with a direction to

approach the competent authority by filing necessary

application for withdrawal of the LOC. The

representation thereafterwards made by the respondent Crl.P.1479/2021

for withdrawal of the LOC was rejected by the petitioner

and the said order was challenged by the respondent

before the trial court and a prayer was also made to

rescind the LOC. The application was opposed by the

petitioner herein by filing objections. The trial court vide

the order impugned has declared that the LOC issued

against the respondent herein in connection with the case

registered in R.C.No.8(E)/2017 had lapsed and therefore,

respondent is entitled to move freely inside and outside

the country without reference to the Look Out Circular

dated 11.07.2017, which was extended on 22.05.2019.

4. Learned Special Public Prosecutor for the

petitioner submits that the trial court has proceeded to

pass the impugned order on the ground that the LOC was

issued without assigning proper reason and the LOC was

not placed on record. He submits that the trial court

ought to have called for the relevant record and thereafter

satisfy itself whether there were sufficient grounds for Crl.P.1479/2021

issuance of LOC. He submits that the respondent herein

has not availed bail and his anticipatory bail application

was already dismissed. He submits that admittedly the

respondent's family is settled abroad and he has got

business interest abroad and therefore, it could be

difficult to secure him during the course of trial and the

trial court has erred in unconditionally allowing the

respondent to travel abroad. He also submits that the

trial court has erroneously held that the LOC has already

expired and it has not been renewed after 22.5.2019. He

submits that the LOC was last renewed on 24.7.2020 and

it is valid upto 10.07.2021 and a copy of the said

document has been produced by him at Annexure-H. He

submits that having regard to the huge amount of Rs.200

crores outstanding, which is a public money, it is not safe

to allow the respondent to travel abroad unconditionally

and there are all chances that he may flee from justice.

Crl.P.1479/2021

He has relied upon the judgments passed by the

Division Bench of this court in Writ Appeal No.315/2021

(GM-RES) DD 12.5.2021 (Dr.Bavaguthu Raghuram Shetty

-vs- Bureau of Immigration, New Delhi and Others) and the

order in W.P.No.51087/2019 (GM-RES) DD 21.4.2021

(Sri.C.Shivakumar Reddy and Others -vs- The Central

Bureau of Investigation and Another) in support of his

arguments.

Learned counsel for the petitioner has also filed a

memo before this court wherein it is stated that the

respondent had appeared before the petitioner on

22.02.2018 and 02.03.2018 and on both the said

occasions, his statement was recorded. It is further

stated in the memo that a notice was issued to the

respondent by the petitioner to appear on 06.11.2018 and

produce documents/information related to the foreign

acquisition and diversion of funds. However, the

respondent had not appeared before the petitioner on the Crl.P.1479/2021

said date. In the memo, it is also stated that investigation

has been completed and charge sheet has been filed. But

during the course of submission, it is stated that the

charge sheet has been returned on technical grounds.

5. Per contra, learned senior counsel Sri.Sandesh

Chouta appearing for the respondent would submit that

the trial court has passed a detailed reasoned order

which does not suffer from any illegalities or infirmities.

He submits that the respondent has throughout

cooperated with the Investigating Officer and he has

appeared before the Investigating Officer on multiple

occasions and his statement has already been recorded.

He also submits that investigation in the case is complete

and charge sheet was also filed but the same was

returned to the Prosecutor on the ground that sanction

was not obtained for prosecuting the Bank officers, who

were also accused in the case. He submits that in the

charge sheet, there is no mention that the respondent is Crl.P.1479/2021

absconding. He submits that the case is registered in the

year 2017 and the charge sheet is filed in the month of

December 2020 and during the said period, the

respondent has throughout cooperated with the

Investigating Officer and he has not been arrested and

therefore the present apprehension of the petitioner that

the respondent is likely to flee from justice is ill-founded.

He also submits that the LOC was last extended on

22.5.2019, which would be valid for one year and

therefore the extension of the said LOC ought to have

been done on or before 21.5.2020. However, the LOC

now relied upon by the petitioner is dated 24.07.2020

and since the LOC was not renewed within the period of

one year, the LOC dated 24.7.2020 is not a valid

document and the said document was not produced by

the petitioner before the trial court. He submits that

there are prescribed guidelines for issuance of LOC and

the respondent's case does not come under any of the Crl.P.1479/2021

requirements of the guidelines and therefore, there is no

justification on the part of the petitioner in issuing a LOC

which has the effect of restricting the movement of the

respondent and thereby violating the right guaranteed to

the respondent under Article 21 of the Constitution of

India.

In support of his arguments, he has relied upon the

following judgments:

1. W.P.(Crl.)No.1315/2008 DD 11.8.2010 Sumer Singh Salkan & Ors. -vs- Asst.Director and Others;

2. Crl.O.P.No.27741/2013: E.V.Perumal Samy Reddy and Others -vs- State and Others;

3. W.P.Nos.21305 & 20798/2017 DD 23.07.2018; Karti P.Chidambaram -vs- Bureau of Immigration and others;

4. W.P.(C) No.5382/2020 DD 02.12.2020 : Deept Sarup Aggarwal -vs- Union of India and Others.

6. During the course of hearing, the learned counsel

for the respondent has also filed I.A.No.3/2021 with a

prayer to allow the respondent to travel abroad with prior Crl.P.1479/2021

intimation to this court notwithstanding the prayer of the

respondent to quash the LOC against him.

7. Learned Senior Counsel for the respondent has

submitted that as and when the respondent intends to

travel abroad, he will file necessary application seeking

permission of the court and without prior permission of

this court, the respondent will not travel abroad. He also

submitted that the respondent is ready and willing to

surrender the Passport before the competent authority

and only as and when he intends to travel abroad,

necessary travel documents could be arranged for the

purpose of his travel as per the orders of this court.

8. The undisputed facts of this case are that, a

criminal case has been registered in the year 2017

against the respondent, who is the Managing Director of

the first accused Company. The allegations in the

complaint are that the respondent and other Directors Crl.P.1479/2021

had induced the complainant Bank for sanction of a loan

and after the loan was sanctioned and disbursed, the said

amount of loan was diverted by the accused persons and

not utilized for the purposes for which the loan was

availed. The investigation in the case is complete and as

per the final report, the offences alleged against the

respondent are punishable under Section 120-B read

with Section 420 of IPC and Sections 13(2) read with

Section 13(1)(d) of the Prevention of Corruption Act, 1988.

9. Petitioner-C.B.I has filed a memo stating that on

two occasions, the respondent had appeared before the

petitioner for the purpose of investigation and they have

recorded the statement of the respondent on the said

dates. In the final report that is made available to the

court, it is seen that the respondent is not shown as

"absconding accused". The petitioner has not disputed

that the family of the respondent is settled abroad and

respondent has got business interests abroad.

Crl.P.1479/2021

10. With this background, the question that needs

to be considered is, whether the trial court was justified in

declaring that the LOC issued against the respondent has

lapsed and ceased to have any effect and further holding

that the respondent was entitled to move freely inside and

outside the country without reference to the LOC issued

against him.

11. A Coordinate Bench of this court in

W.P.No.51087/2019 (supra) having considered that the

petitioners therein had fully cooperated with the C.B.I. for

the purpose of investigation and that this court had

stayed the further proceedings in the criminal cases

pending before the jurisdictional court against the

petitioners therein while quashing the LOC issued against

the said petitioners had directed them to furnish security

to the satisfaction of the Trial Judge and the petitioners Crl.P.1479/2021

were also directed to intimate the travel itinerary to the

Trial court from time to time.

12. In the case of Dr.Bavaguthu Raghuram

Shetty, the Division Bench of this court in Writ Appeal

No.315/2021 (supra), taking into consideration the fact

that the appellant therein was involved in number of

cases and the indebtedness of the appellant therein was

nearly to the tune of Rs.2800 crores, having regard to the

paramount national interest had upheld the order of the

learned Single Judge of this court refusing to interfere

with the LOCs issued to the appellant therein.

13. The High Court of Delhi in the case of Sumer

Singh Salkan (supra) at paragraph-11 has observed as

follows:

"11. Look-out-Circular has also been issued against the petitioner as the petitioner is an accused before the Court of M.M. and he has not appeared before the Court of M.M. If the petitioner gives an Crl.P.1479/2021

undertaking before the court for his appearance on a particular date, through his counsel, the Lookout-

Circular issued against the petitioner shall be withdrawn within 24 hours of giving undertaking by the petitioner.

The questions raised in the reference are as under:

"A. What are the categories of cases in which the investigating agency can seek recourse of Lookout-Circular and under what circumstances?

B. What procedure is required to be followed by the investigating agency before opening a Lookout-circular?

C. What is the remedy available to the person against whom such Look-out-Circular has been opened?

D. What is the role of the concerned Court when such a case is brought before it and under what circumstances, the subordinate courts can intervene?

The questions are answered as under:

A. Recourse to LOC can be taken by investigating agency in cognizable offences under IPC or other penal laws, where the accused was deliberately evading arrest or not appearing in the trial court despite NBWs and other coercive measures and there was Crl.P.1479/2021

likelihood of the accused leaving the country to evade trial/arrest.

B. The Investigating Officer shall make a written request for LOC to the officer as notified by the circular of Ministry of Home Affairs, giving details & reasons for seeking LOC. The competent officer alone shall give directions for opening LOC by passing an order in this respect.

C. The person against whom LOC is issued must join investigation by appearing before I.O. or should surrender before the court concerned or should satisfy the court that LOC was wrongly issued against him. He may also approach the officer who ordered issuance of LOC & explain that LOC was wrongly issued against him. LOC can be withdrawn by the authority that issued and can also be rescinded by the trial court where case is pending or having jurisdiction over concerned police station on an application by the person concerned.

D. LOC is a coercive measure to make a person surrender to the investigating agency or Court of law. The subordinate courts' jurisdiction in affirming or cancelling LOC is commensurate with the jurisdiction of cancellation of NBWs or affirming NBWs."

14. In the case of E.V.Perumal Samy Reddy

(supra), the High Court of Madras at paragraphs-8 and 9 Crl.P.1479/2021

has observed as follows:

"8. It is basic that merely because a person is involved in a criminal case, he is not denude of his Fundamental Rights. It is the fundamental of a person to move anywhere he likes including foreign countries. One's such personal freedom and liberty cannot be abridged.[See: Article 21 Constitution of India]. In the celebrated in MENAKA GANDHI Vs. UNION OF INDIA MANU/SC/0311/1978 : [AIR 1978 SC 597], the Hon'ble Supreme Court upheld the constitutional right of persons to go abroad. The phrase no one shall be deprived of his "life and liberty" except procedure established by law employed in Article 21, had deep and pervasive effect on fundamental right and human right. MENAKA GANTHI (supra) ushered a new era in the annals of Indian Human Rights Law. It had gone ahead of American concept of 'Due Process of Law'.

9. But, the fundamental right to move anywhere including foreign countries could be regulated. Where persons involved in criminal cases are wanted for investigation, for court cases, persons, who are anti-social elements their movements can be regulated. Need may arose to apprehend persons, who have ability to fly, flee away the country. So, L.O.C. orders are issued. It is an harmonious way out between a person's fundamental right and interest of the society/state. But, in any case, it must be fair and reasonable. It should not be indiscriminate without any reason or basis."

Crl.P.1479/2021

15. In the case of Karti P.Chidambaram (supra),

the High Court of Madras at paragraphs-70 to 73 has

observed as follows:

"70. The legality and/or validity of a Look Out Circular has to be adjudged having regard to the circumstances prevailing on the date on which the request for issuance of the Look Out Circular had been made.

71. As observed above, the FIR against the petitioner was lodged on 15.05.2017. Notice was issued on 15.6.2017 calling upon the petitioner to appear before the Station House Officer/Investigation Officer on 29.6.2017. On the very next day i.e., 16.6.2017, the impugned Look Out Circular was issued. As on the date of issuance of the Look Out Circular, there could have been no reason to suppose that the petitioner would not appear before the Station House Officer/Investigation Officer.

72. On behalf of the respondents, it has been contended that the petitioner did not appear on 29.6.2017 as directed, but only appeared pursuant to the directions of the Supreme Court. However, as argued by Mr.Subramanium, the very fact that after issuance of the first notice dated 16.06.2017, which was returnable on 29.06.2017, a further notice was issued on 04.07.2017 granting the petitioner time till 21.07.2017, shows that there was no immediate apprehension of his evading investigation, at least on 04.07.2017. There was, thus, no justification for Crl.P.1479/2021

issuance of the impugned LOC on 16.06.2017, the validity whereof has expired, in any case, after one year.

73. As observed above, the issuance of Look Out Circulars is governed by executive instructions as contained in the Office Memoranda Nos.25022/13/78-F1 dated 05.09.1979 and 25022/20/98-FIV dated 27.12.2000, as modified by Office Memorandum dated 27.10.2010. Such LOCs cannot be issued as a matter of course, but when reasons exist, where an accused deliberately evades arrest or does not appear in the trial Court. The argument of the learned Additional Solicitor General that a request for Look Out Circular could have been made in view of the inherent power of the investigating authority to secure attendance and cooperation of an accused is contrary to the aforesaid circulars and thus, not sustainable."

16. In the case of Deept Sarup Aggarwal (supra),

the High Court of Delhi at paragraph-14 has observed as

follows:

"14. In the present case, there is no doubt that the allegations made against the petitioner are of a grave nature. The petitioner has submitted that the same are false and unsubstantiated, however, this Court need not detain itself on the examination of such allegations. For the purposes of the Impugned LOC, what is relevant to be noted is that the FIR was registered on 08.10.2018. Based thereon, the Crl.P.1479/2021

Enforcement Directorate registered ECIR on 02.07.2019. In undue haste, on 25.07.2019, the Impugned LOC was issued against the petitioner. The petitioner has asserted that prior thereto, the petitioner had joined investigation on 26.12.2018 and 07.01.2019. It is not asserted in the counter affidavit or in the sur-rejoinder filed by the respondents that the petitioner is a flight risk having no roots in India or that there is a likelihood of the petitioner absconding from the WP(C) No.5382 /2020 Page 9 country. The only allegation made is that the conduct of the petitioner is evasive and non-cooperative. In my opinion, this cannot be a ground for issuance of a LOC."

17. From the reading of the aforesaid judgments

relied upon by the learned Senior Counsel for the

respondent, it is very clear that recourse to LOC can be

taken only when the accused was deliberately evading

arrest or not appearing in the trial court inspite of

coercive measures being taken against him and if there is

a likelihood of the accused traveling abroad and trying to

flee from justice, the LOC can be issued as a coercive

measure to make a person surrender/cooperate with the Crl.P.1479/2021

investigating agency or with the court before which his

case is pending.

18. The issuance of LOC against an individual has

got very serious consequences, which would curtail the

free movements of a person and therefore, such a right

which is guaranteed under Article 21 of the Constitution

of India cannot be curtailed other than in accordance

with law. Therefore, when a LOC is being issued, there

has to be a proper application of mind by the competent

authority and it cannot be issued on a mere request of

the Investigating Officer, unless he makes out a case for a

need to issue LOC.

19. In the case on hand, the respondent has

appeared before the Investigating Officer and has

cooperated for the investigation and his statement has

also been recorded on two occasions. It is not the case of

the petitioner that they are required to further investigate Crl.P.1479/2021

the respondent and even according to them, the

investigation in the case is already complete and the final

report is ready. The respondent is not shown as an

absconding accused in the final report. The trial court

considering the fact that the LOC issued against the

respondent had already expired and also considering the

fact that the petitioner has not made out a case for a need

to issue LOC against the respondent, has passed an order

observing that the LOC issued against the respondent has

lapsed and ceased to have any effect and consequently

the respondent is free to travel in and out of the country.

Though the said order cannot be termed as illegal, having

regard to the nature of the case filed against the

respondent and his indebtedness to the tune of nearly

Rs.200 Crores, to my mind, the trial curt was not justified

in unconditionally allowing the respondent to travel in

and out of the country. Since the respondent has now

filed an application I.A.No.3/2021 before this court Crl.P.1479/2021

stating that he shall travel abroad only after seeking

necessary prior permission from this court, I am of the

opinion that the matter could be disposed of without

interfering with the order passed by the trial court and

without going to the validity or otherwise of the LOC

dated 24.07.2020 by imposing suitable conditions on the

respondent and this will take care of the apprehension of

the petitioner that there is likelihood of the respondent

fleeing away from justice.

20. Under the circumstances, this Criminal Petition

is disposed of, with the following observations:

1) The respondent shall forthwith surrender his Passport before the Passport Authority;

2) The respondent shall make an application before this court in the event of he intending to travel abroad for personal or business reasons by furnishing the travel itinerary and specifying the period of travel and also the date of his return, so as to Crl.P.1479/2021

enable the Passport Authority to issue necessary travel documents to him;

3) In the event of the petitioner filing a charge sheet in the meanwhile, such an application seeking permission to travel shall be filed by the respondent before the trial court.

Sd/-

JUDGE

KNM/-