Court Denies Relief to Ex-Employee of Elder Pharmaceuticals, Cites Economic Interests of India
In a significant ruling, the Calcutta High Court has upheld the issuance of a Look Out Circular (LoC) against Debanjan Hazra, a former employee of Elder Pharmaceuticals Limited, who is currently residing in China. The court dismissed Hazra's plea to quash the LoC, emphasizing the importance of ensuring legal accountability and safeguarding India's economic interests.
Debanjan Hazra, a chemist by profession, had challenged the LoC issued by the Serious Fraud Investigation Office (SFIO), claiming he was being wrongfully detained without legal justification. Hazra, who has been residing in China since 2013, argued that the LoC was issued in contravention of established guidelines and that there was no cognizable offense warranting such action.
Justice Krishna Rao, presiding over the case, noted that the petitioner was implicated in the fraudulent activities of Elder Pharmaceuticals, which allegedly siphoned off substantial funds. The investigation, initiated by the Ministry of Corporate Affairs in 2019, revealed financial discrepancies amounting to over Rs. 1300 crores. Hazra was identified as a key associate, having ties to foreign entities involved in the fraudulent transfer of funds.
The court underscored the petitioner's non-compliance with investigation summons and failure to provide crucial documents. It highlighted the potential risk of Hazra fleeing justice if the LoC were to be revoked. The judgment referenced guidelines from the Office Memorandum dated February 22, 2021, which permit the issuance of LoCs in exceptional cases where economic interests or national security are at stake.
Despite repeated summons, Hazra, who frequently visits India to meet his elderly parents, failed to cooperate with the investigation. The court expressed concerns that if prosecution proceeds based on the completed investigation report, Hazra might evade trial by remaining abroad.
The court concluded that the circumstances justified the continuation of the LoC to prevent Hazra's departure, thus ensuring his presence for legal proceedings. The ruling serves as a stern reminder of the judicial commitment to uphold the rule of law and protect national interests in cases of economic fraud.
Bottom Line:
Look Out Circular (LoC) - Issuance and continuation of LoC against an individual settled abroad for fraudulent activities and non-compliance with investigation summons justified to ensure presence during legal proceedings in India.
Statutory provision(s): Companies Act, 2013 Section 212, Cr.P.C., 1973 Section 173, Look Out Circular Guidelines (Office Memorandum dated February 22, 2021)
Debanjan Hazra v. Serious Fraud Investigation Office, (Calcutta) : Law Finder Doc id # 2853184
