A prolonged investigation and consistent cooperation justify quashing an LOC absent evasion or flight risk.

The petitioner was associated with Jaiprakash Associates Limited (JAL) and served as its Whole-Time Director from 14 December 2007 to 30 September 2023. He subsequently served as an Advisor with Jaypee Cement Corporation Limited and was stated to be serving as an Advisor with Mahabhadra Infrastructure Private Limited.

The Ministry of Corporate Affairs directed an investigation into the affairs of JAL and another company under Section 212(1)(c) of the Companies Act, 2013, entrusting it to the Serious Fraud Investigation Office (SFIO).

The petitioner appeared before the SFIO pursuant to summons issued in 2021, 2022 and 2025 and furnished replies, information and documents sought by the investigating agency.

An LOC was issued against him at the instance of the SFIO and continued during the pendency of the investigation.

The petitioner challenged the LOC, contending that he had consistently cooperated with the investigation, that no criminal case, FIR or non-bailable warrant was pending against him, and that there was no material indicating that he was a flight risk.

The respondents opposed the petition on the ground that the allegations were serious but did not dispute his past cooperation or the quashing of LOCs against other senior personnel connected with the same investigation.

1. Whether the continued operation of the LOC against the petitioner, despite his cooperation with the SFIO investigation and the absence of any allegation that he evaded investigation, was arbitrary, disproportionate and violative of Articles 14 and 21 of the Constitution.

2. Whether the LOC should be quashed subject to conditions safeguarding the petitioner’s availability for the ongoing or future investigation.

The Court considered the investigation undertaken by the SFIO pursuant to Section 212(1)(c) of the Companies Act, 2013, and the petitioner’s examination and summons under Section 217 of that Act.

The Court applied the constitutional principles of non-arbitrariness, proportionality and protection of personal liberty under Articles 14 and 21, particularly in assessing whether continued restrictions on the petitioner’s right to travel abroad were justified.

It further relied on the principle of consistency in judicial treatment, noting that LOCs issued against other senior managerial personnel in connection with the same investigation had already been quashed.

The Court preserved the investigating agency’s power to seek a fresh LOC if supervening circumstances or new material warranted such action.

The Court found that the investigation had remained pending since 2020, while the petitioner had appeared whenever summoned and supplied the information and documents sought by the SFIO.

There was no allegation that he had failed to cooperate, avoided summons or attempted to evade the investigation.

In these circumstances, the continued restraint on his foreign travel was not shown to be necessary or proportionate.

The Court also considered it significant that LOCs against several other key managerial persons involved in the same investigation had already been quashed by the Court.

Balancing the petitioner’s liberty with the investigative requirements, the Court held that the LOC could not continue but imposed conditions requiring cooperation, advance travel intimation and recourse to the concerned court after filing of a chargesheet.

The petitioner was permitted to travel abroad without prior permission from the High Court, subject to furnishing his full itinerary to the Investigating Officer at least seven days before departure, or at least 24 hours in advance in an emergency.

If a chargesheet is filed, he must approach the concerned court and obtain permission for foreign travel.

The SFIO was granted liberty to seek a fresh LOC in accordance with law if supervening circumstances or new material arose.

The SFIO was directed to communicate the order to the Immigration Bureau, and the petition and pending applications were disposed of.