Delhi HC notice to Centre over Naresh Goyal's plea seeking to quash LOC

The Delhi High Court on Tuesday issued a notice to the Centre over former Jet Airways chairman Naresh Goyal's plea seeking to quash the Look Out Circular (LOC) issued against him.

The court, however, refused to stay the Look Out Circular and asked respondents to file a reply by the next date of hearing, August 19.

Justice Suresh Kumar Kait was hearing the matter.

Senior advocates, Maninder Singh, and Vikas Pahwa, appeared before the court for petitioner Naresh Goyal in and stated that on May 25, Goyal and his wife were deplaned by the authorities when duo was travelling to Dubai and London and that issuance of LOC against him is clearly a rejection of the fundamental right of the petitioner

"He (Goyal) never evaded any process of law. There was no summon against him till May 25, when authorities deplane him. On July 6 late evening, agency (SFIO) issued summoned him to join the probe. Due to this issuance of LoC, (which was issued without any basis and without following the mechanism and guidelines). He is suffering and has to go abroad," Goyal's counsel further argued.

Meanwhile, SFIO through ASG Maninder Acharya, said in Delhi High Court, "A serious probe is needed in the alleged Rs 18, 000 crore fraud case. We need four weeks to file a reply as a lot of materials need to be filed."

The court, therefore, asked Goyal the purpose behind going abroad. The court asked, "Can't investors be spoken to over the phone or digitally? The money can be sent via Real Time Gross Settlement System (RTGS) or other methods." The court opined that the right to fly abroad is limited as one cannot commit a crime and go to another country.

Referring to examples from past, the court said, "There are many examples of people with pending cases, who go abroad then the government spends crores of money in bringing them back."

The court said that the purpose behind Goyal's visit abroad has not been established.

Goyal's counsel,"The Group is having a financial crunch, and needs to seek funds from investors abroad. We need to be abroad by July 10 to preserve NRI status for tax reasons."

"If you can deposit the bank guarantee of Rs 18, 000 crore, you can go abroad," the court said in a lighter vein.

Justice Vibhu Bakhru had earlier recused himself from hearing Goyal's plea when the matter came up on July 5.

The circular was issued against Goyal by the Serious Fraud Investigation Office (SFIO) under the Corporate Affairs Ministry after it found several irregularities in his Jet Airways, which had halted operations in April this year due to acute cash crunch.

On March 25, Goyal, the then Jet Airways chairman, had stepped down from the post. He had set up the airline 25 years ago.

According to the lawyers, the SFIO had also summoned Goyal to join the probe on July 10.

The ministry had earlier asked the SFIO to investigate Jet Airways for alleged siphoning of funds and misappropriation of accounts and file its report within six months.

Goyal has also challenged the several office memoranda issued by the Union Ministry of Home Affairs.

Jet has been suffering bruising competition from low-cost airlines, fluctuating crude prices and a weak rupee. The airline has over one billion dollars in debt and has to repay money to banks, lessors of planes and suppliers besides clearing pending salaries of pilots and other staff.