Calcutta High Court Quashes LOC Against Ex-Elder Pharma Employee In ₹1,300 Crore SFIO Probe

The Calcutta High Court has quashed a Look Out Circular against Debanjan Hazra, a former Elder Pharmaceuticals employee living in China since 2013, holding that it violated his right to personal liberty under Article 21.

Earlier, a single judge of the Calcutta High Court had refused to quash the Look Out Circular. 

A Division Bench of Justices Shampa Sarkar and Ajay Kumar Gupta, in appeal, held the LOC was based on “speculative apprehension” and was “arbitrary and disproportionate,” noting that the SFIO probe into the alleged Rs. 1300 crore siphoning had ended and no prosecution had been initiated.

The court found that the action was based on speculative apprehensions and failed the test of proportionality.

“In view of the above, the impugned action suffers from the vice of arbitrariness and disproportionality and is inconsistent with the settled legal principles governing origination of LOCs. The continuation of the LOC, in the absence of any pending proceeding and based on speculative apprehension, results in an unwarranted infringement of the appellant's fundamental right under Article 21.”

The bench directed that the LOC would stand quashed, subject to Hazra filing a notarized affidavit within one week before the concerned authorities, disclosing his Indian address, residential address in China, phone numbers, workplace details and operational email ID, and undertaking to cooperate with any future proceedings and appear before the jurisdictional court if required.

“Thus, the impugned LOC against the appellant is hereby quashed, subject to the appellant furnishing a notarized affidavit before the Respondent No.1 and 3, inter alia undertaking to make himself available before the jurisdictional court as and when required in the event any prosecution is instituted, and to render full co-operation. The affidavit shall be filed within a week from date. The affidavit will disclose his local Indian address, residential address in China, phone numbers, work place addresses, the email id which is operational in China and at all times.”, it observed.

The court further directed that Hazra “will undertake not to surrender his Indian Passport for a period of two years or until further orders of any competent court of law, whichever is earlier.”

It clarified that failure to comply with these conditions would result in continuation of the LOC.

The case arose from an LOC dated February 7, 2025 issued during the SFIO's investigation into Elder Pharmaceuticals. Hazra, who had left the company in 2009 and moved to China in 2013, was stopped in December 2025 while attempting to travel to Bangladesh. His writ petition challenging the LOC was dismissed by a single judge, leading to the present appeal.

On the core issue, the court rejected the justification that the LOC could be sustained on the basis of a possible future prosecution, noting that the investigation had already concluded and no proceedings had been initiated.

“the apprehension of non-appearance of the appellant in any proceeding before a court of law remains premature and hypothetical, lacking the immediacy required to justify curtailing an individual's personal liberty.”

The bench held that such speculative concerns could not justify continued restriction on travel, especially when no case was pending before any court.

It also rejected the SFIO's argument that Hazra's residence in China justified restrictive measures.

“The foundation of the arguments of the respondents that stringent measures should be adopted as the appellant resides in China and in the absence of an extradition treaty, it would be impossible to ensure the appearance of the appellant to face trial, is unacceptable and not supported by the guidelines. Merely because he resides in China on a work visa and has married a Chinese National, there cannot be a presumption of either a flight risk or evasion of court proceedings. What is required is demonstrable conduct indicating evasion.”

Holding that the continuation of the LOC after completion of investigation and without any pending proceedings was unsustainable, the court allowed the appeal, set aside the single judge's order, and quashed the circular subject to compliance with the conditions laid down.