Point of Law: Issuance of an LOC is in nature of an administrative action and scope of judicial review is limited.

JUDGMENT :

Yogesh Khanna, J.

1. This petition is filed by the petitioner seeking suspension of Look Out Circular (LOC), if any, issued against the petitioner for the period between 01.11.2022 to 21.11.2022; to enable him to travel Abu Dhabi, Bahrain, Riyadh and London for his consultancy work related to his business.

2. The learned senior counsel for the petitioner submits the petitioner is unaware whether LOC is in operation against him but since he has an apprehension in the light of investigation being conducted by SFIO and/or on account of proceedings under the RBI fraud declaration circular in relation to the affairs of M/s.Punj Lloyd Limited (PLL) of which the petitioner herein was a promoter/director. No official communication, however, has been received by the petitioner in respect of issuance of any LOC.

3. It is alleged the petitioner herein was a promoter of PLL, engaged in engineering, procurement and construction (EPC) services which includes EPC services in oil, gas and infrastructure sectors and trading of steel outside India.

4. In 2019 the National Company Law Tribunal, PB, New Delhi in CP No.(IB)-731 (PB)/2018 titled as ICICI Bank vs. Punj Lloyd Limited vide order dated 08.03.2019 had directed initiation of corporate insolvency resolution process of PLL under the provisions of IBC. Presently it is under liquidation. Around the same time in exercise of powers conferred under Section 212(1)(c) of the Companies Act, the Central Government vide its order dated 22.05.2019 has also assigned the SFIO to investigate the affairs of PLL. Subsequently PLL’s account was declared as fraud by the IDBI Bank/respondent no.1 in November, 2020 under the guidelines of RBI’s circular/master directions on frauds classifications and reporting by commercial banks and FI dated 01.07.2016 bearing DBS.CO.CFMC.BC.NO.1/23.04.001/2016-17.

5. In W.P.(C) 10796/2020 this Court passed an order directing status quo be maintained in respect of declaration of the account of PLL as fraud and from taking any further steps pursuant thereto and that in W.P.(Crl.) 735/2021 respondent were directed not to take any coercive measure till adjudication of W.P.(C) 10796/2020. It is submitted the petitioner now requires to visit Abu Dhabi, Bahrain, Riyadh and London from 01.11.2022 to 21.11.2022 and he requires suspension of LOC. He further submits even on earlier occasions he has been allowed to visit abroad by orders of the DRT.

6. The learned counsel for the SFIO on the other hand submits they are investigating the matter qua cheating by the petitioner’s company of the banks to the tune of Rs.12,300 crores approx. and gave a list of 38 such banks in its status report. It is alleged the petitioner has been the Managing Director of PLL and has been in direct and indirect control of the affairs of PLL and its subsidiaries, based in India or in overseas jurisdiction and has been associated with more than 100 such like companies.

7. It is alleged the petitioner is not co-operating in the investigation and is giving evasive replies and is shirking from holding any accountability and is deliberately seeking time to provide information. He has admitted his son Mr.Shiv Punj was also associated in the business of PLL.

8. The learned counsel also highlighted the role of the petitioner in M/s. Domus Lloyd Contracting Limited (DLCL) in which PLL has a major stake. He refers to the statement of Mr.Rahul Maheshwari who stated PLL manages to generate liquidity for Mr.Shiv Punj in Dubai and both father and son, the promoters of PLL, have been transferring money outside India viz. transferring it to their own accounts or accounts of their relatives who would finally on their directions would transfer the money back to the promoters. PLL on the directions of the petitioner has done substantial investment in DLCL, registered in overseas jurisdiction as stated in the status report.

9. It is alleged M/s. Chirag Techno FZCO is in actual control of the petitioner and it is nothing but a