Madras HC Denies Clearance Certificate To Man Who Supplied Helicopters To Iraq Despite US Sanction

The Madras High Court recently refused to grant a clearance certificate to a man against whom PMLA proceedings were initiated based on a letter from the US Government.

Justice SM Subramaniam and Justice V Sivagnanam noted that the Enforcement Directorate had initiated an investigation based on a letter issued by the US Government and the Government of India had to honour the bilateral treaties/agreements with the US Government.

The petitioner Hameed Ibrahim had approached the High Court challenging the order of the Deputy Director rejecting his application to issue a Clearance Certificate and to permit him to travel abroad. Ibrahim is the Director of Marilog Avion Services Limited which operates in Bangkok, Thailand and deals with the supply of Aircraft Spares and Repair Services. Ibrahim had two more businesses in Dubai and Chennai.

The allegation against Ibrahim was that he had supplied helicopters to Iraq in violation of the sanction imposed by the United States of America on Iraq. The US Government had thus issued a letter to the Indian Government, based on a reciprocatory agreement, to initiate action against Ibrahim and his companies. Based on the letter, the Indian Government initiated action by registering cases under the Prevention of Money Laundering Act 2002.

Ibrahim’s counsel pointed out that he was unconnected with the allegations and international travel was necessary as he had to look after his business in other countries. The ED however opposed the plea and submitted that if international travel is permitted and the Look Out Circular issued against Ibrahim is revoked, it was possible that Ibrahim may not return to India and evade the money laundering trial.

Though a look out circular was also issued against Ibrahim, the court decided to not go into its validity. The court agreed with the ED and noted that if the Look Out Circular was revoked, it would be detrimental to the bilateral relationship with the foreign country.

“The Enforcement Directorate is investigating the matter in response to the letter issued by the U.S. Government and in the event of revoking LOC, it would result in departure and detrimental to the bilateral relationship or to the strategic relationship with the foreign country. The Government of India has to honour the bilateral treaties/agreements with U.S. Government and in the present case, the Enforcement Directorate formed an opinion that in the event of revoking LOC, it would result in departure and detrimental to the bilateral relationship or to the strategic relationship with foreign country,” the court observed.

Thus, noting that the bilateral relation had to be respected, the court said that it was not inclined to consider the application and thus dismissed the petition. The court also directed the investigation to go on following the due process.

Counsel for the Petitioner: Mr.S.Praveennath

Counsel for the Respondent: Mr.N.Ramesh Special Public Prosecutor for Enforcement Directorate

Citation: 2024 LiveLaw (Mad) 360

Case Title: Hameed Ibrahim v The Deputy Director

Case No: W.P.No.23688 of 2024

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