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TaxTMI 
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2023 (8) TMI 1695
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....ded forthwith. The appellant also sought for a direction upon the respondent to desist and/or forebear from preventing the appellant from travelling abroad. The learned single bench by the impugned order dismissed the writ petition holding that it does not lie in the mouth of the appellant to say that his right to travel touches upon the liberty under Article 21 of the Constitution of India and that Article 21(6) is the sufficient handle to curtail such a right, since the individual right of the appellant has to give way to the public interest of India. Aggrieved by such order, the appellant has preferred the present appeal. 2. Mr. Jishnu Chowdhury, learned advocate appearing for the appellant submitted that the learned writ court had principally erred in coming to four wrong conclusions. The first of which being that the court erroneously held that there was sufficient justification for the apprehension of the respondent bank that the appellant might escape from India thereby defeating any effort to recover the huge amounts of loan due from him, which led to the request for issuance of look-out circulars (LOC). The second incorrect finding was that although the orders were pass....
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....izen of India has fundamental right to freedom of movement as guaranteed under Article 19(1)(d) read with Article 21 of the Constitution of India which includes the right to travel abroad. 5. It is submitted that unless a litigant misuses the liberty granted to him, liberty to move freely within the territory of India and abroad cannot be interfered by a court of law. In this regard, reliance was placed on the decision of the Hon'ble Supreme Court in Mrs. Maneka Gandhi Versus Union of India and Another [(1978) 1 SCC 248]. Reliance was also placed on the decision in the case of Vishambhar Saran Versus Bureau of Immigration and others [2021 SCC Online Cal 3074], decision of the Division Bench of the Punjab and Haryana High Court reported in Poonam Pual Versus Union of India and Others [2022 SCC Online P7H 1176] and the decision in the case Vishambar Saran Versus Bureau of Immigration and others [MANU/WB/0692/2023]. Reliance was also placed on the order passed by the High Court of Judicature at Bombay in WP(L) No. 295 of 2020 dated 06.02.2020, Attaluri Venkateswara Prasad and another Versus The Bureau of Immigration, Ministry of Home Affairs, Delhi and Others On the above grounds, ....
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....ly travelling overseas for carrying on business and the appellant having been declared bankrupt in Singapore and his Company M/s. HBG Trading Pte Limited having been wound up, the appellant does not have any realizable assets in Singapore. Further it is submitted that the appellant has no intention of repaying the dues and the appellant might escape his liability by absconding to a foreign jurisdiction, given the past conduct of the appellant in avoiding his liabilities in Singapore. Therefore, overseas branch of the third respondent at Singapore proposed that LOC be issued against the appellant, who was designedly exiting the country so as to be out the reach of law. It is further submitted that the non-repayment of dues to the third respondent bank affects the economic interest of India and subsequent absconding would result in economic offences. It is submitted that proof of debt has been submitted to the liquidators of M/s. HBG Trading Pte Limited as well as before the Bankruptcy Trustee of the appellant and the dues payable by the appellant to the third respondent bank stands at USD1,746,287.88 which is approximately Rs. 12.71 crores as per the exchange rate prevailing during ....
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....r Bank under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, it is a Government of India undertaking and primarily carries its banking business from its head office at Kolkata as well as other branches located throughout the territory of India with two overseas branches located at Singapore and Hongkong. The overseas branch at Singapore of the third respondent bank commenced its operations from 21.04.1951 and since then has been functioning continuously as a fully licensed bank with a Domestic Banking Unit and Asian Currency Unit granted by the Monitory Authority of Singapore. The branch at Singapore being an overseas branch of an Indian public sector bank is subject to the regulatory framework of the Reserve Bank of India as well as Monitory Authority of Singapore. The overseas branch facilitates the credit and trade finance with a view to support Indian community internationally. It is not in dispute that the third respondent bank has its headquarters in Kolkata and it's Singapore branch is its overseas branch which is also a Government of India undertaking. The appellant holds an Indian passport and has been travelling to various destinations in India....
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....ver the appellant's estate. The third respondent bank has submitted its of proof of debt/claim against the appellant with the said trustee on 30.11.2020. 11. The fact that the appellant has been travelling to several countries including United Republic of Tanzania for business purposes appears to be not in dispute. In the given fact situation, the third respondent bank had a reasonable apprehension that the appellant has an intention of escaping the arm of law and his creditors by escaping to a foreign jurisdiction and upon review on account of the appellant which was declared as NPA as also the fact that the company was wound up and the appellant was declared bankrupt and the appellant having no intention of repaying the dues to the third respondent bank and the non-repayment of the dues would have an economic impact on the country, the overseas branch of the third respondent bank forwarded a proposal to the third respondent which appears to have been reviewed by a Committee constituted by the third respondent to consider such recommendations for issuance of LOC and being satisfied had placed its recommendations before the competent authority namely the Managing Director and Ch....
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....it is considered that whenever any authority issues a warning circular to the immigration authorities the period of validity should be clearly specified in the circular. In the office memorandum dated 27.12.2000, the Ministry of Home Affairs, Government of India specifies the steps required to be taken for opening an LOC in respect of Indian citizen. It has been mentioned that in the said office memorandum that the request for opening LOC in respect of an Indian citizen is required to be made to all immigration check posts in the country in a prescribed format. It has been further stated that the request for opening of LOC must invariably be issued with an approval of an officer not below the rank of Deputy Secretary to the Government of India/Joint Secretary in the State Government/ concerned Superintendent of Police at District level. The period of validity of LOC was one year and in case no request for extension of LOC is received before the expiry of one year period, the LOC will automatically be closed by the immigration officer concerned after the expiry of one year period. 14. While issuing the office memorandum dated 27.10.2010, the Ministry of Home Affairs, Government o....
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....ed in the Proforma mentioned above. It should be noted that an LOC cannot be opened unless a minimum of three identifying parameters, as given in the enclosed Proforma, apart from sex and nationality, are available. However, LOC can also be issued if name and passport particulars of the person concerned are available. It is the responsibility of the originator to constantly review the LOC requests and proactively provide additional parameters to minimize harassment to genuine passengers. f) The legal liability of the action taken by the immigration authorities in pursuance of the LOC rests with the originating agency. g) Recourse to LOC is to be taken in cognizable offences under 1PC or other penal laws. The details in column IV in the enclosed Proforma regarding reason for opening LOC' bust invariably be provided without which the subject of an LOC will not be arrested/detained. h) In cases where there is no cognizable offence under IPC or other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country. The originating agency can only request that they be informed about the arrival/departure of the subject in such ....
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....ered to request for opening LOC against economic offenders/defaulters. Taking note of the same, the Ministry of Finance, Department of Financial Services, Government of India issued office memorandum dated 04.10.2018 which is quoted herein below:- F No.6/3/2018-80.11 Government of India Ministry of Finance Department of Financial Services 3 Floor, Jeevan Deep Building Sansad Marg, New Delhi-110001 Date: 4 October, 2018 OFFICE MEMORANDUM Subject: Empowerment of heads of Public Sector Banks to issue requests for opening Look Out Circulars (LOCs) This is with reference to the Central Bureau of Investigation (CBI)'s letter No. 125/8/H02/BS&FZ/2018 dated 24.08.2018 to the Department of Financial Services (DFS) (copy enclosed), requesting that appropriate officers of banks be empowered to request for opening of Look Out Circulars (LOCs) against economic offenders/defaulters. In this context, it may be mentioned that, (a) Issuance of LOCs in respect of Indian citizens and foreigners is governed by Instructions contained in the Ministry of Home Affairs (MHAY's OM dated 27.10.2010 as amended by MHA's OM dated 05.12.2017. ....
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.... Director and Chief Executive Officers of all public sector banks were included as originating agency/authority empowering them to make a request for opening LOC. This was done by inserting clause (xiv) to the office memorandum dated 27.10.2010. Pursuant to the office memorandum dated 04.10.2018 issued by Ministry of Finance, Department of Financial Services, the Ministry of Home Affairs issued office memorandum dated 24.10.2018 referring to office memorandum issued by the Department of Financial Service and accordingly Chairman/Managing Director/Chief Executive Officers of all public sector banks were included under the category of originating agency who would be entitled to request for opening of LOC. All the aforementioned office memorandums have been consolidated and guidelines have been issued by the Ministry of Home Affairs, Government of India dated 22.02.2021. The said memorandum consolidates all the guidelines which have been issued earlier and the terms of conditions mentioned therein having reiterated and with regard to the period of validity of LOC, it has been mentioned that the LOC opened can remain in force until and unless a deletion request is received by the Burea....
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.... failed in its attempt to restrict the movement of the petitioner therein Vishambhar Saran and after the action of the Punjab National Bank was set aside by the court, Bank of Baroda took a chance to restrain the freedom of movement of the petitioner therein. The court opined that merely because the accounts of the company was NPA and the petitioner therein was a Promoter Director, the petitioner could not be labeled as a fraudster, who was held in money laundering activities and disrupted the economy of India. Thus, the court on examination of the materials on record was convinced that the conditions which was to preexist as per the existing policy of the Government for the opening LOC are absent in the said case. The order of the High Court of Bombay dated 06.02.2020 in Attaluri Venkateswara Prasad and Another is an interim order which was passed subject to certain conditions and therefore we have not dealt with the same. 21. In Dr. Bavaguthu Raghuram Shetty, the petitioner therein was liable for repayment to public sector banks and the court noticed that the money belonging to India has been utilized by the petitioner therein in a foreign country to run its business and there....
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.... bank branches or in Singapore or elsewhere, the guarantor, the appellant, has unconditionally agreed to the terms of the personal guaranteed agreement. The personal guaranteed agreement empowers the bank to initiate and take action or proceedings or otherwise against the appellant in the Republic of Singapore or elsewhere in jurisdiction selected by the bank. Thus, it is evidently clear that the credit facilities were extended through the overseas branch of the third respondent and the company having been wound up by the orders of the High Court at Singapore and the appellant having been declared as bankrupt, a recommendation was made by overseas branch for issuance of LOC against the appellant. The consequence of an order of bankruptcy passed by the competent court at Singapore is required to be seen. In this regard, the learned advocate for the respondent had referred to the provisions of the Insolvency, Restructuring and Dissolution Act, 2018 issued by the Republic of Singapore. 24. The learned senior advocate appearing for the appellant objected to placing reliance on the said enactment on the ground that the same was not the submission made before the learned single bench.....
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....ld definitely fall within an exceptional case warranting issuance of an LOC. Thus, if the appellant's case is one of an exceptional case then the respondent bank based on the inputs which have been received more particularly, the order passed by the High Court of Singapore winding up the appellant's company and the order passed by Singapore High Court declaring the appellant as bankrupt and the respondent bank having filed its affidavit of asset before the liquidators and their claim before the trustees, then it will definitely be in the strategic interest of India/a public sector bank to seek to restrain the appellant from departing from India as it will be detrimental to the strategic interests of India/public sector bank. On an after the office memorandum dated 04.10.2018 and 26.10.2018, when the Chairman/Managing Directors/Chief Executive Officers of the public sector banks were included within the ambit of originating agency, the purposive interpretation to be given to the office memorandum is to take note of the strategic interests of a public sector bank which undoubtedly would be in national interest. It needs to be reiterated that the credit facilities having been sanction....
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....aying down guidelines regarding issuance of LOCs in respect of Indian Citizens and foreigners. The said guideline has been noted/quoted above. By Office Memorandum dated clause (xiv) way inserted to para 8(b) of the Office Memorandum dated 27.10.2010 including an officer of SFIO, Ministry of Corporate Affairs not below the rank of Additional Director (in the rank of Director in the Government of India) as one Officers who would be empowered request for opening of LOC. 29. The Ministry of Finance issued Office Memorandum dated 4-10-2018 for empowerment of heads of public sector Banks to issue request for opening LOCs, pursuant to request made CBI by letter dated 24.8.2018. In the said OM of Ministry of Finance dated 4-10-2015 clauses (a) to (d) were set out (extracted supra). Considering the suggestion of CBI, Ministry of Finance requested Ministry of Home Affairs to amend OM dated 27.10.2010 and include in the list of authorities under Paragraph 8(b) another category as (xiv), including Chairman (State Bank of India) /Managing Directors as Chief Executive Officers (MD + CEOs) of all Other Public Sector Banks thereby empowered them to request for opening LOC. 30. What would be....