The Serious Fraud Investigation Office (SFIO) has preferred a writ appeal before a Division Bench of the Madras High Court challenging an order passed by a single judge who had quashed a Look Out Circular (LOC) issued by the Bureau of Immigration against Rahul Surana in connection with investigation into an alleged bank loan scam, running to several thousand crores of rupees, by the Surana group of companies.
The first Division Bench of Chief Justice Munishwar Nath Bhandari and Justice N. Mala on Tuesday ordered notice, returnable by September 27, on a petition preferred by the SFIO to condone the delay of four days in preferring the appeal. Justice Anita Sumanth had quashed the LOC on March 7 while allowing a writ petition pending in the court since 2020 challenging the circular issued on December 9, 2020 at the request of the SFIO.
Then, the writ petitioner had contended that his father Dinesh Chand Surana was the Managing Director of Surana Industries Limited and that he had no connection whatsoever with the day-to-day affairs. He was neither in the management nor a shareholder, the petitioner said. He also said he was caught unawares at the Chennai airport on January 30, 2020 when he was restrained from flying abroad, along with his family, for his wife’s treatment.
He relied upon the judgements delivered by the High Court in Karti P. Chidambaram and ‘Aircel’ C. Sivasankaran’s cases to contend that his movements could not be curtailed without a valid reason. On the other hand, the SFIO filed a detailed counter affidavit listing out the ongoing investigation into the affairs of Surana Industries Limited, Surana Corporation Limited, Surana Power Limited and 12 other companies.
The court was told there was prima facie evidence of large scale diversion and siphoning of funds borrowed from banks and financial institutions resulting in substantial loss of public money. Some of the companies in the Surana Group were listed before the Stock Exchanges and some were under liquidation as per the orders of the National Company Law Tribunal, the court was told while opposing the plea to quash the LOC.
However, the judge held that the LOC had actually expired on January 20, 2022 and no materials were placed before the court to prove it was extended beyond that date. Though SFIO argued the LOC would continue to be in operation until a specific written request for withdrawal was made as per a corrigendum issued by the Union Home Ministry on August 10, 2021, the judge said, the corrigendum provides only a methodology to facilitate extension.
In the present case, there were no materials to prove an extension was sought for by SFIO and that the LOC was extended by the Bureau of Immigration. Even otherwise, there was no justification for issuing the LOC against the petitioner on merits too since the investigation which commenced on October 28, 2019 was not completed even after three years and continued to remain at an “advanced stage” even on February 23, 2022, the judge said.
“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,” the judge wrote.