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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 27.12.2024
+ LPA 1253/2024 and CM No. 76660/2024 (stay)
UNION OF INDIA .....Appellant
Through: Mr. Amit Tiwari, CGSC with
Mr. Ayush Tanwar and Mr.
Aakash Pathak, Advs.
Mr. Sanjay Shorey, ICLS, DG
(OA), MCA, Mr. Vinod
Sharma, ICLS, Regional
Director, MCA, Mr. Sanjay
Kumar Gupta, ICLS, Joint
Director, MCA and Mr.
Kishore D. Wade, ICLS,
Assistant Director, MCA.
versus
MANPREET SINGH CHADHA .....Respondent
Through: Mr. Sandeep Sethi, Sr. Adv.
With Mr. Sumeer Sodhi, Mr.
Aman Nandrajog, Mr. Arjun
Nanda, Mr. Dhruv Wadhwa and
Ms. Shreya Singh, Advs.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
HON'BLE MS. JUSTICE SHALINDER KAUR
SHALINDER KAUR, J. (Oral)
1. The present Letters Patent Appeal under Clause X of the Letters
Patent of this Court has been filed impugning the order dated
24.12.2024 passed by the learned Single Judge of this Court in CM
APPL No. 73194/2024 filed in W.P(C) No.14518/2024, whereby the
Look Out Circular (LOC) issued against the respondent herein has
been suspended and he has been permitted to travel abroad, subject to
certain conditions.
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LPA 1253/2024 Page 1 of 8
By:NEELAM
Signing Date:27.12.20 24
19:40:08
2. Before dealing with the rival submissions contended at the Bar,
a brief factual background is to be noted; The respondent herein is the
erstwhile director and shareholder of the M/s Wave Megacity Centre
Pvt. Ltd. (Corporate Debtor). While the respondent was serving as
director, Corporate Debtor had raised an amount Rs.1400 Crore from
2300 home-buyers, however, possession of the booked units was not
handed over to any of the buyers at the time. On 26.03.2021,
Corporate Debtor filed a Company Petition bearing CP (IB)
No.197/PB/2021 under Section 10 of the Insolvency and Bankruptcy
Code, 2016 (IBC) before the National Company Law Tribunal, New
Delhi (NCLT), seeking initiation of the Corporate Insolvency
Resolution Process (CIRP) for the aforesaid company. The respondent
herein was transposed as the Financial Creditor in the Company
Petition.
3. While the Company Petition was pending adjudication, an FIR
bearing No.63/2021 was registered by the Economic Offences Wing
(EOW), Delhi Police against the Corporate Debtor and its Directors
on 13.04.2021, under Sections 406, 420 and 120B of the Indian Penal
Code, 1860 (IPC). Vide the order dated 06.06.2022, the NCLT
dismissed the afore-mentioned Company Petition while imposing a
penalty of Rs. 1 Crore on the Corporate Debtor under Section 65 of
the IPC and directed the Central Government to carry out an
investigation into its affairs. Pursuant thereto, vide the order dated
15.06.2022, the Central Government ordered an investigation into the
affairs of the Corporate Debtor under Section 210 of the Companies
Act, 2013 (the Act).
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LPA 1253/2024 Page 2 of 8
By:NEELAM
Signing Date:27.12.20 24
19:40:08
4. Aggrieved by the aforesaid order, the Corporate Debtor, on
24.06.2022, filed a Company Appeal bearing CA (AT) (Insolvency)
No.918/2022 before the National Company Law Appellate Tribunal,
New Delhi (NCLAT) challenging the order dated 06.06.2022 passed
by the NCLT. However, vide the order dated 05.01.2023, the NCLAT
dismissed the Company Appeal filed by the Corporate Debtor.
5. Thereafter, vide the reference dated 23.10.2023, the Director,
Inspection and Investigation, Ministry of Corporate Affairs (MCA)
informed the Bureau of Immigration that a LOC be issued against the
respondent. On 08.10.2024, the respondent herein filed a Writ Petition
bearing W.P(C) No.14518/2024, praying therein for the following
relief:
a. Issue a Writ of Mandamus directing the
“
Respondents to place before
this Hon’ble Court the
Look out Circular(s) and all connected note sheets /
letters / documents showing the process and reasons
for issuance and continuation thereof against the
Petitioner, holder of Indian Passport Nos. Z4537165
issued on 16.10.2019 and Z7651222issued on
12.01.2024 issued by the Respondent No. 1; and
b. Issue a Writ of Certiorari for quashing/revocation
of the Look Out Circular(s) issued by the
Respondents against the Petitioner; and c. Pass any
such other and further orders as this Hon'ble Court
may deem necessary, just and proper in view of the
facts and circumstances of the present case.
c. Pass any such other and further orders as this
Hon'ble Court may deem necessary, just and proper
in view of the facts and circumstances of the present
case.
”
6. In the said Writ Petition, the respondent, on 11.12.2024, filed an
application bearing CM APPL No. 73194/2024, seeking permission to
travel abroad to Dubai and Europe from 22.12.2024 to 01.02.2025 and
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LPA 1253/2024 Page 3 of 8
By:NEELAM
Signing Date:27.12.20 24
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praying that his LOC be suspended in the interim. On 24.12.2024, the
appellant herein filed their reply to the said application and on the
same day, the respondent filed his proposed travel itinerary by way of
an Additional Affidavit. Vide the impugned order, the learned Single
Judge allowed the application filed by the respondent and accordingly
suspended the LOC and allowed the respondent to travel abroad,
subject to him fulfilling certain conditions.
7. Mr. Amit Tiwari, learned CGSC appearing on behalf of the
appellant submits that the learned Single Judge failed to appreciate the
fact that the respondent, under the garb of creating a false impression
of co-operating with the investigating agency, has deliberately
refrained from providing complete information to the investigating
agency as directed in the impugned order. The respondent has not
provided the investigation officer with (i) the Income Tax Returns as
desired (ii) his offshore ownership/stakes/interests until the filing of
the aforementioned writ petition, which includes a company in
Belgium of which he is a Director and various other companies he is
desirous of conducting business with (iii) the financial statements of
the Corporate Debtor provided by the respondent, which have no
mention of the offshore interests and stakes.
8. The learned counsel submits that the learned Single Judge has
failed to appreciate the observations made by the NCLT in its order
dated 06.06.2022, wherein the NCLT has observed that the Corporate
Debtor has not approached the NCLT with clean hands and had filed
the application under Section 10 of the IBC with malicious and
fraudulent intentions. Further, the NCLT also observed that the
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By:NEELAM
Signing Date:27.12.20 24
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Corporate Debtor has 285 cases pending before different fora and in
order to escape liability, the Corporate Debtor is seeking shelter in the
CIRP. The NCLT also observed that the Corporate Debtor, inter alia,
attempted to play fraud on its stakeholders and the State exchequer by
accepting cash and issuing plain paper receipts, therefore, inducing the
clients to pay a lower price on paper.
9. Mr. Tiwari, while culminating, contends that the respondent is a
flight risk and while his Fundamental Right to travel abroad is well
‘ ’
recognized, the rights and interests of the investing public cannot be
ignored.
10. At the outset, Mr. Sandeep Sethi, learned senior counsel
appearing on behalf of the respondent places on record an order of the
Registrar of this Court dated 26.12.2024 whereby the appellant herein,
while appearing before the Registrar, have clearly given their
‘No
if the respondent herein is permitted to travel in terms of
Objection’
the conditions laid down by the learned Single Judge. He submits that
today, the learned CGSC cannot be permitted to turn around to assail
the impugned order. Moreso, he submits that the respondent was to
travel abroad yesterday in pursuance of the order passed by learned
Single Judge, and having fulfilled all the conditions of the order, the
appellant, on its own, gave directions to the Immigration Bureau to
not allow the respondent to travel. Thus, the appellant has clearly
defied the order of the learned Single Judge.
11. Mr. Sethi submits that the respondent was not aware of the LOC
till 02.11.2023, when he was informed by the Immigration Officers at
the Indira Gandhi International Airport, upon his return to India. In
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LPA 1253/2024 Page 5 of 8
By:NEELAM
Signing Date:27.12.20 24
19:40:08
furtherance, he submits that the LOC has still not been officially
communicated to the respondent who had no way of knowing about
what transpired which is a clear violation of the principles of natural
justice and his Fundamental Rights. He submits that the appellant has
failed to follow the proper proceedings as laid down in the O.M. No.
25016/31/2010-Imm dated 27.10.2010 and O.M. No. 25016/10/2017-
Imm(Pt.) dated 22.02.2021. In addition to this, learned senior counsel
submits that the LOC is not issued pursuant to the commission of a
cognizable offence, but only to investigate the affairs of the company.
12. The learned senior counsel vehemently urges that the
respondent has always cooperated with the investigating authorities in
pursuance to the notices/summons received by him. The respondent
has also provided documents which have been sought from the
Corporate Debtor. He submits that all documents and information
sought from the respondent has already been obtained and therefore, it
would serve right to travel abroad is
no purpose if the respondent’s
curtailed. Further, the appellant is not investigating any criminal
offence or fraud against the bank, it is only investigating whether the
affairs of the Corporate Debtor, in which the respondent was a
director, were in accordance with the Act.
13. The learned senior counsel for the respondent submits that the
roots of the respondent, along with his family and assets, are all in
India. The only offshore investment is a bank account that the
respondent has is in Singapore and all the other assets of the
respondent have been disclosed. The respondent merely wishes to
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LPA 1253/2024 Page 6 of 8
By:NEELAM
Signing Date:27.12.20 24
19:40:08
spend time with his sisters who reside in Dubai and his daughters,
who are presently in Europe and thus is not a ‘flight risk’.
14. To conclude, the learned senior counsel submits that the
allegations against the respondent are false, as he had no intention of
siphoning off or misappropriation of the money of the investors or
other stakeholders, as the Corporate Debtor, out of a total of 2300
allottees, has refunded monies to 656 people, given possession to 210
people and offered possession to 455 people. Moreover, the
imposition of LOC is not warranted and the fundamental right of the
respondent under Article 21 of the Constitution of India, to travel
abroad, cannot be infringed.
15. To rebut the submissions, the learned CGSC submits that on
26.12.2024, while appearing before the Registrar of this Court, he had
no instructions regarding filing of the present LPA, and thus, gave a
No Objection so as to follow the directions of the learned Single
‘ ’,
Judge. He submits that under Section 447 of the Act, the offence
alleged to have been committed by the respondent is a cognizable
offence. Moreso, the respondent has not disclosed all his assets; thus,
he prayed that the impugned order be set aside.
16. We have heard the submissions made on behalf of the parties
and perused the record.
17. It is undisputed that the investigation in the present case has
been pending since 06.06.2022 and with respect to the FIR registered
by EOW on 13.04.2021, no Charge Sheet has been filed till date.
Further, the petitioner has been involved in the investigation whenever
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LPA 1253/2024 Page 7 of 8
By:NEELAM
Signing Date:27.12.20 24
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he has been summoned by the Investigating Agencies and has
disclosed the required information.
18. In this regard, we may note that the learned senior counsel on
24.12.2024, on instructions, had undertaken before the learned Single
J
udge that ‘should the appellant require the respondent’s presence,
the respondent will return to the country within five days of receiving
Moreso, the appellant
such intimation, subject to flight availability’.
has further failed to disclose the time frame within which the pending
investigations shall be concluded. Needless to say, that in such
circumstances, the respondent cannot be deprived of his right to travel
abroad.
19. We do not find any infirmity in the order passed by the learned
Single Judge, which has imposed various conditions upon the
respondent while granting him the permission to travel aboard. The
LPA, in view, thereof is dismissed. The pending application also
stands disposed of.
20. The order be given dasti under the signature of the Court
Master.
SHALINDER KAUR, J
NEENA BANSAL KRISHNA, J
DECEMBER 27, 2024 / F/SU
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Signature Not Verified
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LPA 1253/2024 Page 8 of 8
By:NEELAM
Signing Date:27.12.20 24
19:40:08