The Aryavarth Express
Agency(Bombay): On Tuesday, the Bombay High Court raised questions to the Serious Fraud Investigation Office (SFIO) regarding the legal framework allowing the downgrade of a lookout circular (LOC) issued against Shikha Kapadia, who is under investigation in relation to a 2019 fraud case. The inquiry surfaced during the hearing of Kapadia’s plea, who is challenging the LOC placed against her in September 2019 following the SFIO’s initiation of a probe against her and her associated company.
The division bench, consisting of Justices Revati Mohite Dere and Manjusha Deshpande, was informed by SFIO’s representative, Advocate S K Halwasia, about the decision to downgrade the LOC concerning Kapadia. The modification would enable Kapadia to travel without the need for prior permission, albeit with a protocol for immigration officers to notify the SFIO each time she travels.
This announcement led the court to probe into the legal underpinnings that sanction such a downgrade, expressing unfamiliarity with the process and requesting the SFIO to present any relevant laws, circulars, or guidelines that facilitate this action. The court underscored its curiosity and concern by stating, “Can you downgrade an LOC? First time we are hearing about the downgrading of an LOC.”
Scheduled for further examination next week, the court also mandated the presence of an SFIO officer, either in person or via video-conference, to elucidate on the matter.
Kapadia, who served as a company secretary and compliance officer for CG Power and Industrial Solutions Limited, has labelled the LOC as arbitrary, illegal, and an overreach of legal boundaries. Her petition follows the 2019 accusations against her and the company for alleged fraudulent transactions, which prompted the issuance of the LOC by the SFIO.
Additionally, the court addressed the SFIO’s non-compliance with a previous order to present a copy of the LOC, instructing the authority to fulfill this requirement at the next hearing. This development adds another layer of scrutiny to the SFIO’s handling of the LOC against Kapadia, signaling the court’s intent to thoroughly understand the procedural and legal bases for such decisions.