2020 (2) TMI 1578 - HC - Indian Laws

Dismissal of Review Petition Upholds Original Order: Criteria for Look Out Circulars Clarified

Uco Bank Versus Dr. Siten Saha Roy and Others

The review petition was dismissed, upholding the original order. The court clarified that the amendment to the office memorandum did not warrant a review ... Review application - whether the amendment, on the basis of which the review petition has been taken out, if considered, might have made any difference in the order under review and/or is relevant to the conclusion as reached in the said order? - Order XLI Rule 27 of the Code of Civil Procedure - HELD THAT:- Admittedly, the SARFAESI proceeding reached culmination and the award passed therein is at the stage of execution. The securities for the loan-in-question are already available for the bank to execute the award granted by the Tribunal - In the event the provision of issuance of LOC are being permitted to be used rampantly as a substitute of execution proceedings, the personal liberty of Indian citizens could potentially be jeopardized and a flood-gate will be opened, giving the government and other public authorities a handle to wreck vengeance on the citizens of India by using the provisions of the office memorandum regarding issuance of LOC to hinder the personal liberty of all citizens merely on the ground of commercial loans being defaulted. Since the bank has a final award in its favour and has already taken recourse to an execution proceeding, it ought to restrict its implementation of the award of such execution proceeding, which is the due process provided by law, but cannot take recourse to the higher remedy of issuance of an LOC. Even if the amendment annexed to the review petition is taken into consideration or was taken into consideration while passing the order under review, the same would not make a difference in the ratio of the order under review inasmuch as no exceptional case or any adverse effect on the economic interests of India as a whole have been made out either in the review petition or in the original request for issuance of LOC issued by the bank - even if the present amendment was placed before the court while passing the order under review, it would not have any special relevance to the conclusion reached in such order and would not be a relevant factor in passing such order. Since the scope of review is limited, there cannot be any reason why the said limited scope should be exercised in the present case - As far as the contempt application is concerned, the issuance of a rule of contempt is resorted to any extreme cases only and, in the present case, learned counsel for the immigration authorities has given sufficient explanation as to why the order under review could not be complied with by the immigration authorities - this Court desists itself from taking resort to the extreme measure of issuance of rule of contempt and CPAN 85 of 2020 is accordingly disposed of. Application disposed off. Issues Involved:1. Review of the order based on newly discovered office memorandum.2. Interpretation of the term 'economic interests of India' in the context of Look Out Circulars (LOCs).3. Justification for issuance of LOC against the writ petitioner.4. Scope of review under Order XLI Rule 27 of the Code of Civil Procedure.5. Contempt proceedings against immigration authorities for non-compliance with court order.Issue-wise Detailed Analysis:1. Review of the order based on newly discovered office memorandum:The review petitioner-bank argued that an amendment to the office memorandum dated December 5, 2017, which allows for the issuance of LOCs for economic interests of India, was not considered in the original order. They claimed this omission constitutes a discovery of new matter, justifying a review. The court noted that the amendment was indeed relevant but concluded that it would not have altered the original decision as the amendment did not change the fundamental requirement of a cognizable offence for LOC issuance.2. Interpretation of the term 'economic interests of India' in the context of Look Out Circulars (LOCs):The court examined whether the writ petitioner's default on a loan of approximately Rs. 20 crores could be construed as detrimental to the economic interests of India. It was determined that the term 'economic interests of India' must be interpreted on a higher footing, impacting the country's economy or financial health significantly. The court found that the writ petitioner's default did not meet this threshold, emphasizing that not all commercial defaults could justify an LOC under the guise of protecting economic interests.3. Justification for issuance of LOC against the writ petitioner:The court held that the issuance of an LOC must be based on more than just the quantum of defaulted amount. It should be reserved for exceptional cases where the departure of an individual would severely impact the economy or security of the country. The court found that the bank's recourse to LOC issuance was inappropriate, as the default was already being addressed through legal recovery mechanisms like the SARFAESI Act.4. Scope of review under Order XLI Rule 27 of the Code of Civil Procedure:The court reiterated that the scope of review is limited and should not be used to reargue the case. The newly discovered amendment did not present a compelling reason to alter the original order, as it did not fundamentally change the legal context or the facts that led to the initial decision.5. Contempt proceedings against immigration authorities for non-compliance with court order:The court acknowledged the explanation provided by the immigration authorities for their failure to comply with the original order, attributing it to communication gaps rather than willful disobedience. Consequently, the court decided not to pursue contempt charges but cautioned the authorities to improve their communication channels to prevent future non-compliance.Conclusion:The review petition was dismissed, and the original order remained unchanged. The court emphasized that the issuance of LOCs should not be misused for commercial defaults and highlighted the importance of balancing individual liberty with state interests. The contempt application was also disposed of, with a warning to the immigration authorities to ensure prompt compliance with court orders in the future.