Show under which circular or provision lookout circulars can be downgraded: HC tells SFIO

The Bombay High Court on Tuesday sought to know from the Serious Fraud Investigation Office (SFIO) under which circular or provision it could downgrade a lookout circular issued against a woman being investigated in a 2019 fraud case. A division bench of Justices Revati Mohite Dere and Manjusha Deshpande was hearing a petition filed by one Shikha Kapadia, who was seeking to quash an LOC issued against her in September 2019 after the SFIO launched a probe against her and her employer company.

Advocate S K Halwasia, appearing for the SFIO, informed the court that the authority was downgrading the LOC issued against Kapadia.

"We are downgrading the LOC to an extent where she (Kapadia) does not have to seek permission whenever she needs to travel. The immigration officers will inform the SFIO every time she travels," Halwasia said.


The court then questioned under which provision of law, circular or guideline such a downgrade was permitted.

"Can you downgrade an LOC? First time we are hearing about the downgrading of an LOC. Show us under which provision you are doing this. Show us any circular, provision or guideline that permits such a downgrade. We have not come across any such provision," the court said.

The bench posted the matter for further hearing next week and directed the concerned officer of the SFIO to remain present physically or via video-conference.

In her plea, Kapadia sought quashing of the LOC, stating that it was arbitrary, illegal and an abuse of law.

The petitioner worked as a company secretary and compliance officer with CG Power and Industrial Solutions Limited.

In 2019, allegations of fraudulent transactions were levelled against the company and the petitioner, and a case was registered, following which the SFIO issued an LOC against her in September 2019.

Kapadia's advocate Aniket Nikam pointed out that in the last hearing, the SFIO was directed to produce a copy of the LOC, but it has failed to submit it.

The bench directed the authority to produce the same on the next date of hearing.