HC strikes down LOC against son of former Pancard Clubs CMD

The LOC against him was issued by the Serious Fraud Investigation Office (SFIO) which is investigating the affairs of Pancard Clubs Ltd, which allegedly failed to refund around ₹7,035 crore mobilised from over 51.55 lakh investors between 2002-03 and 2013-14 through its various holiday schemes

MUMBAI: The Bombay high court last week struck down the Look Out Circular (LOC) issued against Siddhartha Moravekar, son of former chairman and managing director of Pancard Clubs Ltd, Sudhir Moravekar, observing that such circulars cannot be used as weapons to terrorise people without any basis.

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“When LOC is sought to be issued or continued, the agency must bear in mind the right of an accused to travel freely, guaranteed to him under Article 21 of the Constitution of India,” said the division bench of justices Revati Mohite Dere and Arun Pednekar. “It cannot and must not be routinely issued,” the bench noted and struck down the LOC issued against 38-year-old Moravekar.

The LOC against him was issued by the Serious Fraud Investigation Office (SFIO) which is investigating the affairs of Pancard Clubs Ltd, which allegedly failed to refund around ₹7,035 crore mobilised from over 51.55 lakh investors between 2002-03 and 2013-14 through its various holiday schemes.

Moravekar had approached the court seeking orders to strike down the LOC, contending that he was not named as an accused in any of the cases registered against Pancard Clubs Ltd and its directors by the Economic Offences Wing of Mumbai police and the Securities and Exchange Board of India.

He submitted that the petitioner was neither a shareholder nor a director of the company. Besides, he said, he had extended full co-operation to the SFIO and attended the agency’s summons on all four occasions, providing them with relevant details and documents.

He submitted that since he was involved in the business of short-term rental of service apartments in Thailand and Dubai, he required to travel often while his elderly mother, wife and child were completely dependent on him.

The SFIO, on the other hand, opposed the petition, claiming that Moravekar had received a total of ₹4.72 crore from the bank accounts of Pancard Clubs and he had purchased immovable properties using the funds.

The agency also pointed out that it had filed a prosecution complaint in the case and once the special court took cognizance of it, the LOC would be withdrawn. Till then, its counsel said, the 38-year-old could obtain permission from the high court whenever he wished to travel abroad.

The argument, however, failed to impress the bench. The court struck down the LOC since Moravekar was not an accused in any of the cases registered either by the EOW or the SEBI and he had fully cooperated with the SFIO.