Deekshitha Sharmile

The Calcutta High Court, Single Bench of Justice Krishna Rao, declined to interfere with a Look Out Circular issued by the Serious Fraud Investigation Office against a former employee of a pharmaceutical company under investigation for large-scale financial fraud. The Court held that where an individual has permanently settled abroad, failed to respond to investigative summons, and circumstances indicate a genuine likelihood of evasion of future prosecution, the continuation of the circular is legally justified and cannot be termed arbitrary, particularly when the economic interests of India are at stake and prosecution under the Companies Act is imminent.

The petitioner, a former employee of Elder Pharmaceuticals Limited, challenged the Look Out Circular (LoC) issued against him by the Serious Fraud Investigation Office (SFIO). He had left India in 2013 to pursue employment opportunities in China and has since been residing there. On 21 December 2025, while attempting to travel from Kolkata to Bangladesh, he was detained at the airport after being informed of the LoC issued in February 2025 in connection with investigations into Elder Pharmaceuticals.

Also Read: SC Invites Stakeholder Inputs to Frame Terms of Reference in Suo Motu Proceedings on Strengthening Bar Associations

The petitioner contended that he was only an employee of the company and had no role in its alleged fraudulent activities. He argued that the LoC was issued without any cognizable offence against him and relied on judicial precedents to assert that such circulars could only be issued in cases of deliberate evasion of arrest or trial.

The respondents submitted that Elder Pharmaceuticals had siphoned off significant funds, failed to repay thousands of deposit holders, and engaged in fraudulent transactions. They alleged that the petitioner was closely associated with the promoters, held shares in a foreign entity involved in questionable transactions, and failed to respond to summons. The investigation was conducted under the Companies Act, 2013, and the SFIO awaited directions from the Central Government regarding prosecution.

Justice Krishna Rao recorded: “Considering the above, this Court finds that the petitioner has left India and settled in China. Inspite of receipt of summons through email, the petitioner failed to appear before the Investigating Agency. Even when the petitioner came to India, failed to meet the Investigating Agency. Now, the petitioner intending to go to China through Bangladesh.”

The Court stated: “The case relied by the petitioner in the case of Vishambhar Saran (supra) and Mritunjay Singh (supra) are not applicable in the facts and circumstances of this present case. It is not the case of the petitioner that the petitioner intends to travel to China for a brief period. It is the specific case that the petitioner left India and settled in China and also married to Chinese citizen and only coming to India once in a year to see his parents.”

The Court observed: “If the Central Government directs the SFIO to initiate prosecution on the basis of the investigation report, and if the report is filed before the Special Court, the Special Court will take cognizance of the case and will issue summons upon the petitioner for appearance before the Learned Special Court, there is every chance that the petitioner will not appear before the Special Court and will avoid the proceeding. It will be difficult for the Indian Government to bring the petitioner back to India to face trial before the Special Court.”

Also Read: Oral Testimony Cannot Sustain Conviction For Damaging Public Property Without Seizure, Identification Or Expert Proof Of Damage: Calcutta High Court

The Court directed: “In view of the above, this Court did not find any justification to set aside or quash the Look Out Circular against the petitioner. W.P.A. No. 2772 of 2026 is disposed of.”

Advocates Representing the Parties

For the Petitioners: Mr. Sabyasachi Chaudhury, Sr. Adv., Mr. Rajarshi Dutta, Mr. Pranav Sharma, Mr. Sahadat Ali, Mr. Deepesh Sharma, Mr. Mrinmay Mukherjee, Mr. Arka Biswas

For the Respondents: Mr. Kumar Jyoti Tewari, Sr. Adv., Mr. Arijit Majumdar, Mr. Piyush Kumar, Ms. Isabella Pal, Mr. Venketeshwar Sonkar

Case Title: Debanjan Hazra Vs. The Serious Fraud Investigation Office & Ors.
Case Number: W.P.A. No. 2772 of 2026
Bench: Justice Krishna Rao