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quashes LOCs in PMLA case, says mere pendency can't restrict travel right
In a significant ruling that reinforces the to travel, the on quashed issued against two men in connection with a investigation. Justice Amit Mahajan held that an LOC is a that cannot be resorted to routinely merely because an investigation is pending.
The Petitioners and Their Ordeal
The case involved two petitioners—Deep Kumar Rastogi, a 77-year-old Indian resident battling liver cancer since 2022, and his son Gagan Deep Rastogi, who resides in Singapore with his wife and children. Both were accused in a complaint filed by the under the in 2017, which later triggered a PMLA probe by the .
Deep Kumar Rastogi discovered the LOC only on , when he was stopped at the airport while attempting to travel to Singapore for medical treatment. Gagan Deep Rastogi, who frequently travels between Singapore and India, apprehended a similar LOC after his father’s ordeal. Despite emails requesting withdrawal, the ED remained silent.
A Six-Year Investigation with Full Cooperation
The court noted that the ED’s investigation had been pending for over six years. The petitioners first appeared before the agency in , had their statements recorded, and furnished all documents sought. For the next six years, there was no communication from the ED. Fresh were issued in , and both petitioners again cooperated fully.
The court highlighted that Deep Kumar Rastogi had traveled abroad multiple times during the investigation and always returned. Gagan Deep Rastogi had also traveled between India and Singapore without hindering the probe. The trial court had even allowed Gagan Deep to travel abroad without prior permission, further negating any .
Arguments: Coercive Restraint vs. Ongoing Probe
Senior advocates for the petitioners argued that the LOCs were arbitrary, issued mechanically without application of mind. They emphasized the petitioners’ unwavering cooperation and the severe hardship caused, particularly to Deep Kumar Rastogi, whose medical treatment in Singapore was jeopardized.
The ED, represented by its standing counsel, contended that the LOC was justified given the ongoing investigation and the need to determine the petitioners’ roles. It argued that cooperation alone does not create an to revocation.
The Court’s Legal Analysis
Justice Mahajan rejected the ED’s stance, drawing a clear line between a and the necessity of coercive measures. The court observed:
“An LOC is a and cannot be resorted to as a matter of routine merely because an investigation is pending. Its issuance and continued operation must be justified by circumstances warranting such restraint upon the .”
The court found no material to suggest that the petitioners had evaded investigation, failed to comply with , or attempted to abscond. On the contrary, their conduct demonstrated consistent cooperation.
Addressing the ED’s argument about the investigation’s pendency, the court noted:
“The mere fact that an investigation remains pending cannot, in itself, furnish an enduring basis for restricting the petitioner’s , particularly where the petitioner has consistently appeared before the investigating agency.”
The court also observed that the trial court had imposed no travel impediments, and the petitioners could not be deemed flight risks.
The Final Order: LOCs Quashed with Conditions
The court quashed the LOCs but imposed conditions to balance the ED’s investigatory needs. Deep Kumar Rastogi must inform the ED of his complete travel itinerary before leaving India and report his return within 72 hours. Gagan Deep Rastogi must share his itinerary before entering India and inform the ED 72 hours before departure. Both must provide valid email IDs and cooperate fully with the investigation.
The ruling reinforces that LOCs cannot be used as a to restrict travel indefinitely, especially when the accused have cooperated and shown no inclination to evade the law. It serves as a reminder to investigative agencies that the is a that can only be curtailed with clear justification.
