Delhi High Court Suspends Look-Out Circular Against Former Director in Multi-Crore Financial Investigation

Inderpreet Singh Wadhwa allowed to travel abroad under stringent conditions amidst ongoing investigation into Rs. 2,385 crore financial irregularities.

In a significant development, the Delhi High Court has granted interim relief to Inderpreet Singh Wadhwa, a former Non-Executive Director of Blu-Smart Mobility Private Limited, by suspending a Look-Out Circular (LOC) issued against him. The LOC had been issued in connection with an investigation into large-scale financial irregularities involving Rs. 2,385 crores of public funds linked to Gensol Engineering Limited and associated entities.

The judgment, delivered by Justice Dr. Swarana Kanta Sharma, underscores the need to balance the investigative requirements with Wadhwa's personal and professional liberties. Wadhwa, a US citizen residing in Switzerland, had been restricted from traveling abroad due to the LOC, which was implemented following allegations of financial misconduct in companies where he held a director's position.

The court has imposed stringent conditions for the suspension of the LOC. Wadhwa is required to deposit a security amount of Rs. 25 crores and provide a surety by a family member. Additionally, he must cooperate fully with the ongoing investigation, provide advance notice of his travel plans, and furnish contact details to the authorities.

Wadhwa's counsel argued that his role in Blu-Smart Mobility was limited to a non-executive capacity and that he had no involvement in the day-to-day operations or financial management of the company. They contended that the LOC was unjustified and disproportionate, particularly since Wadhwa had voluntarily cooperated with the investigation and had no prior criminal record.

The court's decision allows Wadhwa to fulfill his familial and professional responsibilities abroad while ensuring his availability for further investigative procedures. This development comes amidst a complex investigation into financial fraud and corporate irregularities within the Gensol Group, where the extent of Wadhwa's involvement remains under scrutiny.

In its order, the court clarified that the suspension of the LOC is an interim measure and does not reflect any opinion on the merits of the case. The investigation into the alleged financial misconduct is still at a preliminary stage, with no FIR filed or referral made to the Serious Fraud Investigation Office (SFIO) as of now.

The judgment highlights the court's cautious approach to maintaining the balance between the state's interest in investigating significant economic offences and protecting individual rights against undue restrictions.

Bottom Line:

Look-Out Circular (LOC) - Issuance and suspension of LOC - LOC issued against petitioner in context of investigation into financial irregularities of companies - Court suspended LOC during pendency of petition balancing investigation requirements and petitioner's personal and professional liberty.

Statutory provision(s): Companies Act, 2013 Section 210(1)(c), Section 447; Constitution of India, 1950 Article 21

Inderpreet Singh Wadhwa v. Union of India, (Delhi) : Law Finder Doc Id # 2803662