Right To Travel Not Absolute In Economic Offences: Calcutta High Court Declines Relief To Ex-Pharma Employee In ₹1300 Crore SFIO Probe

Refusing to interfere with a Look Out Circular (LOC) issued in connection with a large-scale corporate fraud investigation, the Calcutta High Court held that when an individual has permanently settled abroad, failed to respond to summons and there exists a real apprehension of evasion of prosecution, the investigating agency is justified in preventing departure from India. The Court observed that in such circumstances, the LOC cannot be termed arbitrary or illegal, particularly when “economic interests of India” are involved and prosecution under the Companies Act may soon follow.Justice Krishna Rao dismissed a writ petition filed by Debanjan Hazra challenging an LOC issued by the Serious Fraud Investigation Office (SFIO) in the ongoing investigation into the affairs of Elder Pharmaceuticals Limited.The petitioner, a chemist by profession, had worked with Elder Pharmaceuticals between 2006 and 2009 before moving to China in 2013 for employment. He has since settled there, married a Chinese national and visits India occasionally to meet his parents. In December 2025, while attempting to travel from Kolkata to Bangladesh, he was stopped at the airport and informed that an LOC had been issued against him in February 2025 in connection with the Elder Pharma probe.He contended that he was merely an employee, had no connection with the alleged fraud, and that the LOC violated the Office Memorandum dated February 22, 2021, which permits detention only in cognizable offences or exceptional cases. Relying on earlier High Court rulings, he argued that mere allegations could not justify curtailing his right to travel.Opposing the plea, the Union Government submitted that the Ministry of Corporate Affairs had ordered an SFIO probe into Elder Pharmaceuticals under Sections 212 and 217 of the Companies Act after serious findings of financial irregularities. Reports showed that nearly ₹1,300 crore had been siphoned off and that over 23,000 public deposit holders were unpaid. During investigation, it allegedly emerged that the petitioner was closely associated with the promoters and was the sole shareholder of a foreign entity to which two overseas subsidiaries were transferred through a fraudulent scheme, resulting in diversion of around ₹215 crore.The authorities further pointed out that summons sent to his Indian address returned unserved and emails went unanswered. Even when he visited India, he did not contact the investigating agency. After being intercepted at the airport, he allegedly undertook to furnish documents but failed to do so.Taking note of these facts, the Court held that the petitioner had settled permanently in China and had not cooperated with the investigation despite opportunities. It observed that if prosecution is initiated based on the SFIO report and summons are issued by the Special Court, “there is every chance that the petitioner will not appear” and it would be difficult to secure his presence from abroad.Distinguishing earlier judgments cited by the petitioner, the Court said those cases involved persons with no real likelihood of absconding, whereas the present facts showed a tangible flight risk. Given the magnitude of the alleged economic offence and the stage of investigation, the LOC could not be faulted.Holding that no grounds were made out to quash the circular, the Court dismissed the writ petition and allowed the LOC to continue.Case Title: Debanjan Hazra v. Serious Fraud Investigation Office & Ors.Case No.: WPA 2772 of 2026Click here to read order

Right To Travel Not Absolute In Economic Offences: Calcutta High Court Declines Relief To Ex-Pharma Employee In ₹1300 Crore SFIO Probe

Srinjoy Das

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