G. Chandrasekharan, J.

1. This Writ Petition is filed to issue a Writ of Mandamus directing the respondents to remove the petitioner's name from the data base maintained by them, pertaining to those individuals, who are not allowed to travel abroad and consequently, revoke the Look Out Circular (LOC) erroneously issued qua the petitioner.

2. The learned counsel for the petitioner submitted that petitioner is a Singapore Citizen, holding a Singapore Passport bearing No. K2344758P and a resident of the United States of America. He is the Promoter and President of M/s. Securekloud Technologies Limited (formerly known as M/s. 8K Miles Software Limited), Indian Company. He is also the Promoter of M/s. Healthcare Triangle Incorporation, a Nasdaq listed corporation in the USA. Petitioner gave two criminal complaints with CCB, Chennai, against M/s. Quantum Global Securities, M/s. Desert River Capital Private Limited and KSBL Securities Limited in relation to an act of illegal sale of equity shares of M/s. Securekloud Technologies Limited by Narendra Malik, Bhavesh Ram Prakash Singh, Rohit Arora, Ashish Singh, Kalpana Singh and the Directors of M/s. Quantum Global Securities, M/s. Desert River Capital Private Limited and KSBL Securities Limited. The two FIRs. were registered on 02/02/2019 and 26/09/2019, in Crime Nos. 39/2019 and 282/2019 respectively.

3. Based on the abovesaid FIRs, the Enforcement Directorate opened an ECIR bearing reference No. ECIR/CEZO-1/17/2020. Petitioner was the defacto complainant in the aforesaid Crime Numbers and he was issued summons, dated 02/09/2022, 28/10/2022 and 07/12/2022 by the Directorate of Enforcement Department. The officers of the Enforcement Directorate instead of investigating the predicate offence, traversed beyond their jurisdiction, indulged in roving and fishing expedition and expanded their investigation over the pending SEBI cases of petitioner's company M/s. Securekloud Technologies Limited. SEBI cases do not come under the purview of Prevention of Money Laundering Act. Summons were issued to the petitioner in violation to MLAT Guidelines of Government of India. Petitioner travelled to India during October 2022 and appeared before the Assistant Director, Enforcement Directorate, Chennai, on 13/10/2022, 20/10/2022, 27/10/2022, 03/11/2022 09/11/2022, 16/11/2022, 23/11/2022, 14/12/2022, 15/12/2022 & 16/12/2022. Petitioner extended his full co-operation and provided all the necessary documents to the first respondent. The first respondent conducted searches at the petitioner's Indian residence and in his office. Petitioner is in India for more than 120 days, he is now required to travel back to Singapore and USA for business and personal reasons. He has to organize and attend his son's engagement on 18.03.2023 at California, USA. When he proceeded to the Airport on 03.12.2022 to travel back to Singapore, he was stopped at the immigration counter and informed that he cannot travel due to a Look Out Circular issued by the first respondent. Petitioner was utterly shocked to know about the Look Out Circular issued without any basis. He was not informed about the issuance of such Look Out Circular and he was harassed and humiliated despite extending fullest co- operation for the investigation. In the said circumstances, the present petition is filed.

4. He further submitted that the Look Out Circular can be taken by an 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 Non Bailable Warrants and there was likelihood of the accused leaving the country to evade trial/arrest. Merely because the petitioner is a Singapore Citizen, he cannot be detained in India till the completion of all legal formalities when an Indian National facing legal proceedings in more serious offence are allowed to travel outside India. Look Out Circular can be issued only in exceptional circumstances. Thus, the learned counsel for the petitioner submitted that restraining petitioner from travelling to Singapore and USA by issuance of Look Out Circular is contrary to law and violates his freedom of movement.

5. In support of his submissions, the learned counsel for the petitioner pressed into service the following Orders.

(A) W.P. No. 2477 of 2020 dated 07.03.2022 in Rahul Surana Vs. The Serious Fraud Investigation Office and seven others. The relevant portion of the order is extracted hereunder:

"28. The investigation, even after the elapse of three years, is stated to reveal only prima facie materials and no concrete evidences are stated to have been found been found to implicate the petitioner or frame charges. Admittedly, however there are no proceedings against the petitioner so as to implicate him before the Criminal Court or in any other fora to justify the restrictions under which he has been placed.

29. Admittedly, there have been no instances when the petitioner has evaded summons/notices calling for his attendance/appearance. The Central Bureau of Investigation (CBI) has confirmed that there are no investigations that are ongoing in the case of the petitioner, though reserving their right to initiate appropriate action at an appropriate juncture in future.

30. No material is placed before the Court in support of the bald assertion that the petitioner is a flight risk and as a consequence there is no tangible material available, admittedly, to deny the petitioner of his Fundamental Right.

31. This Court, in the decision in the case of Karthi P Chidambaram (supra) has stated as follows:

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63. Look Out Circulars are coercive measures to make a person surrender to the Investigating agency or the Court of law. In accordance with the order dated 26.7 2017 of the High Court of Delhi, the Ministry of Home Affairs issued Official Memorandum dated 27.10.2010 laying down the guidelines for issuance of Look Out Circulars. The said Circular provided Recourse to Look Out Circular is to be taken in cognizable offences under IPC or other penal laws. The details in column IV in the enclosed proforma or regarding reason for opening LOC's must invariably be provided without which the subject of an LOC will not be arrested/detained.

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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.

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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-FI 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."

(B) Karti P.Chidambaram Vs. Burea of Immigration and Ors. Reported in. The relevant portion of the order is extracted hereunder:

"63. Look Out Circulars are coercive measures to make a person surrender to the Investigating agency or the Court of law. In accordance with the order dated 26.7.2017 of the High Court of Delhi, the Ministry of Home Affairs issued Official Memorandum dated 27.10.2010 laying down the guidelines for issuance of Look Out Circulars. The said Circular provided:

"Recourse to Look Out Circular is to be taken in cognizable offences under IPC or other penal laws. The details in column IV in the enclosed proforma or regarding reason for opening LOC's must invariably be provided without which the subject of an LOC will not be arrested/detained."

64. The mandate of the Office Memorandum dated 27.10.2010, that a request for Issuance of an LOC would necessarily have to contain reasons for such request makes it clear that the condition precedent for issuance of an LOC is the existence of reasons, which should be disclosed in the request for issuance of an LOC."

(C) W.P.(CRL) 714/2022 Dated 04.04.2022 Rana Ayyub Vs. Union of India and Anr. is relied for the proposition that if applicant has appeared before the Investigating Agency when summoned, there is no cogent reason for presuming that the petitioner would not appear before the Investigation Agency and hence, no case is made out for issuing the impugned LOC.

(D) W.P.(C) 5374/2021 & CRL.M.(BAIL) 605/2021 dated 12.01.2022 Vikas Chaudhary Vs. Union of India is relied for the proposition that LOC is an extremely severe step and meant to be used only in exceptional circumstance, the authorities must tread with caution.

(E) CWP-5492-2022 (O&M) dated 05.04.2022 Noor Paul Vs. Union of India & Ors. is relied for the proposition that Non-supply of a copy of the LOC to the subject of the LOC at the time the subject is stopped at the airport for travel abroad, non-supply of reasons for issuing LOC, and absence of a post decisional hearing to the subject of the LOC, is not just, fair and reasonable procedure. It is violative of Article 21 of the Constitution of India.

(F) Crl.M.C.4492/2022 & Crl.M.A. No. 18282/2022 dated 20.09.2022 in Deputy Director of Income Tax (INV) Unit Vs. Xiongwei li is relied for the proposition that an apprehension that the applicant may leave India and may never come back cannot be ground to keep him in India till the culmination of all legal proceedings.

(G) Priya Parameshwaran Pillai Vs. Union of India and Ors. Dated 12.03.2015 reported in is relied for the proposition that Office Memorandum is not law.

(H) Sumer Singh Salkhan Vs. Asst. Director & Ors. in W.P.(Crl.) No. 1315/2008 dated 11.08.2010 is relied for the proposition that recourse to LOC to be taken in cognizable offences where the accused deliberately evades arrest , fails to appear in the trial court despite NBWs and other coercive measures and there was likelihood of the accused leaving the country to evade trial/arrest.

6. In response, Mr. A.R.L.Sundaresan, the learned Additional Solicitor General of India for M/s. P.Siddarathan, Special Public Prosecutor appearing for the first respondent submitted that the petitioner is not so naive and innocent person as he wants himself to be projected. He manipulated the share transactions in connivance with others and transferred the illegal money to his business establishments in USA. Though he is the defacto complainant in the Crime Nos. 39/2019 and 282/2019, on the premises of Crime No. 39/2019, it was found that prima facie offence of money laundering under Section 3 of the Prevention of Money Laundering Act is made out and it is punishable under Section 4 of the Act. The offences under Section 120-B r/w section 420 & 471 of the Indian Penal Code, 1860 are scheduled offences by virtue of Section 2(1)(x) & 2(1)(y) of the PMLA Act, under Paragraph 1 of Part A of the Schedule to the PMLA, 2002. A case in Enforcement Case Information Report in ECIR/CEZO-1/17/2020 was recorded on 23.03.2020 with an objective of preventing the offence of money laundering and punishing the offenders of money laundering, identifying and confiscation of proceeds of crime involved in money laundering by commission of offences vide the abovesaid FIR.

7. Investigation conducted so far revealed the complicity of the petitioner. They are:

(i) Petitioner obtained loan from M/s. QGSL as a resident Indian and Indian Citizen and suppressed his KYC documents showing him as a foreign citizen and an NRI.

(ii) This was done only to avoid and bypass regulatory requirements of NRE/NRO accounts.

(iii) His regular DMAT account with HDFC was opened as an NRI.

(iv) He obtained loan from M/s. QGSL knowing fully well that the share brokers are not allowed to give loan and the said loan can be obtained only from an NBFC.

(v) Petitioner and the then CFO of M/s.8k Miles found to be involved in manipulation of books of account and inflating the revenue of the company, thereby showing the rosy picture of the company, which led to exorbitant hike in the share price of the Company. Petitioner and the CFO of the company Shri. R.S.Ramani involved in manipulation of share price of M/s.8k Miles in order to garner maxim profit for themselves. Petitioner got shares of Shri. R.S.Ramani and sold in the open market for Rs. 110 crores. He was part of the said conspiracy when the petitioner tried to obtain the loan of Rs. 35 crores from illegal channel of share brokers.

(vi) Petitioner was aware that the loan was not provided by M/s. QGSL alone and it was provided by a group of lenders including Pro Fin Capital Services Limited and M/s. Unity Global Financial Services Limited. Petitioner was aware that his shares have been transferred to various DMAT accounts pertaining to the lenders and he was regularly informed about the same over e-mail.

(vii) The loan amount received by petitioner was lent to his CFO Shri. R.S.Ramani, who in turn lent the money to the Company M/s.8k Miles and another related entity, namely, M/s. 8k Miles Media Pvt Ltd.

(viii) The borrowed money ultimately routed to USA based companies of the petitioner.

8. He further submitted that SEBI issued the Interim Order cum Show Cause Notice, dated 04.08.2022, informing that SEBI received complaints against Securekloud Technologies Limited. It was alleged in the complaint that the Statutory Auditor Deloitte Haskins & Sells LLP raised concerns about potential fraud in the Company relating to possible inflation of revenue, questionable related party transactions, siphoning of funds by the promoters and fraudulent write-off of INR 520.65 Crores from internally generated software. The said Interim Order and Show Cause Notice was confirmed by the Final Order No. WTM/AB/CFID/CFID_3/22165/2022-23, dated 16.12.2022 and the petitioner was penalized. Petitioner was summoned and asked to submit the documents related to his off shore companies and the documents related to movement of money received from the lenders, who provided loan as against his shares. He was also asked to provide the documents related to his companies Media vertical like 8k Miles Media Holding Inc, USA, 8k Miles Media Group Inc, USA, 8k Theatres NJ, 8k Radio and 8k Radio EBC. Petitioner denied having any executive role in these companies and gave evasive replies despite the fact that he was the Chairman of these companies. He claimed that money routed to USA got lost in the normal business activities, but failed to provide any document in support of his claim indicating clear routing of laundered money through the books of these media companies.

9. He further submitted that investigation indicated that petitioner has enriched himself to the tune of Rs. 145 crores by selling shares of M/s.8k Miles belonging to himself and his CFO Shri. R.S.Ramani. Petitioner's premises were searched along with the premises of the lenders of his loan and important evidences of his outright involvement in manipulation of share prices of M/s.8k Miles were found in the form of digital evidences and the same are being analysed. To confront the findings of digital evidences, he was summoned for his appearance on 15.03.2023. However, he preferred not to appear.

10. It is his further submission that when they searched in the business and residential premises, he was asked about his laptop and he replied that his laptop is in USA. Through the "Find my" app in his mobile phone, it could be gathered that his laptop and mobile phone were concealed at some premises in Chennai itself and they were seized. The data recovered from the said devices are huge and are being analysed. Due to the share price manipulation activities and fudging of books of account, the innocent investors, who believed in the genuineness of the books of account of his company, lost more than Rs. 1000crores. At the same time, petitioner and Shri. R.S.Ramani generated huge profit by way of selling the shares and borrowing the money against his shares from illegal market through the USA and UAE based entities belonging to petitioner and in the event of him travelling to USA, there are likely strong chances of the evidence being destroyed and the presence of the petitioner may not be secured. He has been already debarred by SEBI to participate in the affairs of the Indian Listed Company and his chances of returning to India to face the legal process is scant. Therefore, petitioner is a threat to safety of evidences under the PMLA act. Therefore, he cannot be permitted to leave India till completion of investigation and trial. Thus, the learned Additional Solicitor General of India for the first respondent prayed for dismissal of the petition.

11. In support of his submissions, the learned Additional Solicitor General of India appearing for the first respondent pressed into service, the order passed in A.R.Buhari vs Assistant Director, E.D. in Crl. O.P. No. 6205 of 2022, wherein, this Court has held that mere physical appearance in response to summons will not tantamount to co-operation. The relevant extract is as follows:

"42. During the investigation, the respondent/complainant has asked the petitioner to furnish bank account statements of the offshore Companies involved in this transaction, original invoices raised by the Indonesian Coal Miners to his Dubai based entities. Books of Accounts of his foreign entities located in Mauritius and British Virgin Islands (BVI). The petitioner reluctant to part away those crucial documents and had given evasive reply. Having refused and reluctant to handover these documents which are essential to ascertain whether the money laundered the manner in which the investigation so far reveals, mere physical presence at Respondent Office will not tantamount to cooperation to investigation.'

12. In reply to this submissions, the learned counsel for the petitioner submitted that the petitioner is a defacto complainant in Crime Nos. 39/2019 and 282/2019. So far, he is not shown as an accused in the case registered by the first respondent in ECIR bearing reference No. ECIR/CEZO-1/17/2020. Only the offence under Section 12A r/w Section 24 of SEBI Act, 1992 is shown as a Scheduled offence in paragraph 11 of PART A of the Prevention of Money-Laundering Act, 2002. The petitioner was penalised by SEBI in its final order in WTM/AB/CFID/CFID_3/22165/2022-23 for the offences under Sections 15A (a), 15HA, 15HB of the SEBI Act, 1992 and is not penalised under Sections 12A r/w Section 24, though there is a finding that the company and petitioner have violated Section 12A (c) of the SEBI Act, 1992 and Regulation 3(d) & 4(1) of the PFUTP regulations, 2003. When there is no punishment imposed under Section 12A r/w Section 24, Enforcement Directorate has no jurisdiction to investigate the case against the petitioner for the alleged violations of the securities under the SEBI Act, 1992 and for the penalties imposed aforesaid.

13. Considered the rival submissions and perused the records.

14. It is true that the petitioner is the defacto complainant in the FIR in Crime No. 39/2019 for the offences under Sections 420, 465, 468, 471 and 120B IPC and Crime No. 282/2019 for the offences under Sections 409, 420, 465, 468, 471 and 120B IPC registered against the accused. The FIR allegations in Crime No. 39/2019 shows that petitioner owns 92,00,000 shares in M/s. 8K Miles Software Services Ltd. He is the promoter of this Company. It is a listed company in BSE and NSE. To meet his business financial requirements, Shri. R.S.Ramani, the Whole time Director introduced one Mr. Rohit Arora (Loan Broker) and he assured that he can arrange loan against his shares being provided as 'collateral security'. Rohit Arora suggested M/s. Quantum Global Securities Ltd and this company assured to lend Rs. 37crores on condition that 2.5 times the loan amount would be collateralized with his shares as margin for the loan amount. Accordingly, MOU dated 14.03.2018 was entered and fresh Demat account No. 12084700 00014468 was opened with M/s. Quantum Global Securities Ltd., in his name. On 19.03.2018, he transferred 14,00,000 shares worth of Rs. 96 crores. M/s. Quantum Global Securities Ltd., disbursed a sum of Rs. 35crores during the period from 26.03.2018 to 21.05.2018. M/s. Quantum Global Securities Ltd., informed him that the shares had fallen down in value in the market and demanded him an additional 4,50,000 shares to maintain the loan ratio. Petitioner transferred 4,50,000 shares worth of Rs. 24.75 crores from his HDFC Demat account to his Demat account No. 12084700 00014468 held with M/s. Quantum Global Securities Ltd. Again, he was asked to top up with an additional 4,50,000 shares to maintain the loan ratio and thus, he transferred 4,50,000 shares worth 21.37crores. In July 2018, he found that his share holding in the said company dropped to only 30000 shares. On verification, he found that Atul Narendra Malik, Bhavesh Ram Prakash Singh colluding with Rohit Arora, illegally and fraudulently forged his signature on the Delivery instruction Slip and transferred his shares. The accused criminally conspired with an illegal intention to cheat and without his knowledge, illegally and fraudulently fabricated the documents and forged his signature on various Delivery Instruction Slip and criminally breached the trust and transferred 23,00,000 shares from his DP Account to their DP account and sold their shares in the open market for a sum of 144crores and criminally misappropriated the same.

15. The FIR in Crime No. 289/99 registered for the offences under Sections 409, 420, 465, 468, 471 and 120B IPC has similar allegations against different accused. The loan broker Rohit Arora is the same person in both cases.

16. Apparently, it appears from the reading of FIR allegations made in both FIRs. that petitioner obtained loan against his shares and later his shares were sold by the accused by fabrication and forging of documents. However, we have seen from the counter affidavit filed by the first respondent, narrated in detail above, that petitioner himself is a party to the conspiracy in share manipulation, i.e., Exorbitant hike in the price by showing a rosy picture, possible inflation of revenue, questionable related party transactions, siphoning of funds by the promoters and fraudulent write-off of INR 520.65 Crores, sale of shares in the open market for Rs. 110 crores in conspiracy with R.S.Ramani, parking of ill gotten money in the entities belonging to the petitioner in USA and UAE, causing loss to the investors for more than Rs. 1000crores, intentional, willful mis-declaration, impersonation claiming as Indian resident and Indian citizen when actually he is a foreign citizen and NRI and manipulation of the accounts in favour of the revenue of the company etc., Though petitioner appeared for enquiry, it is seen from the statement of the learned Additional Solicitor General of India that petitioner had not effectively co-operated with the enquiry/investigation. When he was confronted with the documents relating to his off shore companies and movements of money received from the lenders and when he was asked to provide documents related to his companies of Media vertical like 8k Miles Media Holding Inc, USA, 8k Miles Media Group Inc, USA, 8k Theatres NJ, 8k Radio and 8k Radio EBC, he denied having any executive role in these companies and gave evasive replies. He claimed to have informed that money routed to USA got lost in the normal business activities. Investigation revealed that petitioner enriched himself to the tune of Rs. 145 crores by selling shares of M/s.8k Miles belonging to himself and his CFO Shri. R.S.Ramani. He lied to the Investigating officers with regard to the availability of the laptop, but it was found that it was available in Chennai itself and was seized. After imposition of penalties to the tune of Rs. 3crores under Sections 15A (a), 15HA, 15HB of the SEBI Act, 1992 in the order passed by SEBI, petitioner along with other accused are prohibited from being associated with the securities market in any manner whatsoever, including as a director or Key Managerial Personnel in a listed company or an intermediary registered with SEBI, for a period of 1 year from the date of coming into force of this direction. There was also a finding that the petitioner and the company violated section 12 A (c) of the SEBI Act, 1992 and 3(d) 4(1) of the PFUTP regulations, 2003.

17. Section 12A deals with Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control. Section 12A (c) prohibits engagement in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder. We have seen that petitioner was found to have violated Section 12 A (c) of the SEBI Act, 1992 and thus, it is an offence punishable under Section 24 of the SEBI Act. Therefore, it is too early for the petitioner to contend that there is no offence made out against him for prosecuting him under Section 12A r/w Section 24 of SEBI Act. Prima facie as per the orders of the SEBI, commission of offence under Section 12 A (c) of the SEBI Act, 1992 is made out against the petitioner. Therefore, petitioner cannot contend that Enforcement Directorate has no jurisdiction to investigate the case against him for violating/committing the offences under the SEBI Act, 1992.

18. FIR in Crime No. 39/2019 was registered for the offences under Sections 420, 465, 468, 471 and 120B IPC and FIR in Crime No. 282/2019 was registered for the offences under Sections 409, 420, 465, 468, 471 and 120B IPC. Offences under Section 120-B r/w Sections 420 and 471 IPC are Scheduled offences under the Prevention of Money-Laundering Act, 2002. We have come across cases were the defacto complainant had himself/herself during the course of investigation found to be an accused. In the nature and circumstances of the case, the allegations made against the petitioner, the volume of the amount involved in this case, volume of loss suffered by the investors, volume of money ill gotten by petitioner and said to have parked in USA and UAE and the fact that investigation in this case is not completed for the reason that analysis of electronic data consumes lot of time, this Court is of the view that the presence of petitioner in India is absolutely necessary for completion of investigation. There is also force in the submissions of the learned Additional Solicitor General of India that if petitioner is permitted to leave India, there is a possibility of erasing evidence and that he would avoid the investigation and trial of the case.

19. In this view of the matter, this Court is of the considered view that as of now, petitioner is not entitled to seek for removal of his name from the database maintained in respect of the persons, who are not allowed to travel abroad on account of the Look Out Circular issued against them and to revoke the Look Out Circular issued against the petitioner until the completion of investigation. The first respondent is directed to complete the investigation in ECIR bearing reference No. ECIR/CEZO-1/17/2020 as early as possible and file the complaint before the competent Court within a period of three months from the date of receipt of the copy of this order.

20. In fine, this Writ Petition is dismissed with a direction to the first respondent to complete the investigation and file the complaint before the competent Court within a period of three months from the date of receipt of the copy of this order. No Costs. Consequently, connected miscellaneous petitions are closed.