TaxTMI 
TaxTMI 
2026 (6) TMI 1354
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.... of the petitioner marking it as "cancelled without prejudice" and thereby restraining his international travel without authority of law which action of the respondent no.3 is illegal, arbitrary and unsustainable. ii. For issuance of an appropriate writ, order or direction, in the nature of Mandamus that upon quashing the adverse remark/ endorsement of cancellation without prejudice, the respondent may be directed to remove the said endorsement forthwith and permit the petitioner to travel to the United States of America for the purpose of joining his employment, forthwith. iii. For issuance of an appropriate writ, order or direction, in the nature of certiorarified mandamus, directing the respondents to produce before this Hon'ble Court the Look Out Circular / Look Out Notice issued by the Bureau of Immigration at the instance of Canara Bank and upon such production, issue a writ in the nature of certiorari for quashing the same as the issuance thereof is illegal, arbitrary and without authority of law and consequently, restrain the respondents from in any manner interfering with the fundamental right to travel outside India. petitioner's iv. For....
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....nancial viability and sound operational health. 4. Subsequently, the company's financial stability said to have been severely compromised following the economic impact of demonetization in November 2016 and the transition to the GST regime in 2017. These structural shifts created a liquidity crunch and disrupted the working capital cycle, leading to a substantial downturn in business operations. Consequently, the company struggled to service its interest instalments, resulting in the loan account being classified as a Non-Performing Asset (NPA) on March 1, 2017. In response, Canara Bank initiated recovery proceedings for recovery of the alleged outstanding dues, via O.A. No. 540 of 2018 before the Debt Recovery Tribunal (DRT), Patna, which was subsequently allowed by the Learned Tribunal and recovery proceeding is pending before the Recovery Officer. 5. Parallel to the DRT proceedings, the bank invoked the SARFAESI Act for recovery of the alleged outstanding dues, issuing demand notice under Section 13(2) and followed by a possession notice under Section 13(4). Subsequently, the Bank approached the District Magistrate, Patna for taking physical possession of the residenti....
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.... to resolve all outstanding liabilities, the company submitted a One-Time Settlement (OTS) proposal on May 27, 2025 (Annexure-P/7). The company has offered to settle the entire loan account for a sum of Rs. 18.5 Crores and has already demonstrated its bona fide intent by depositing an upfront amount of Rs. 50 Lakhs via Demand Draft, which the bank has encashed. This proposal is intended to cover the total default amount which had escalated due to accrued interest. 9. The current legal grievance arises from a Look Out Circular (LOC) issued by the Bureau of Immigration at the bank's request, which resulted in the petitioner being intercepted at Indira Gandhi International Airport on February 6, 2026 without any prior notice and was neither served a copy of the LOC issued against him nor any grounds were communicated to him for issuance of LOC against him. Despite being a Lead Software Engineer in the USA with no findings of financial mismanagement against him, the petitioner's passport was endorsed as "cancelled without prejudice" (Annexure-P/8), preventing his return to work. The petitioner sent a communication vide e-mail dated 06.03.2026 addressing respondent no. 2 with a r....
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....ginating Agency that shall be an officer not below the rank of- (i) Deputy Secretary to the Government of India; or (ii) Joint Secretary in the State Government; or (ii) District Magistrate of the District concerned; or (iv) Superintendent of Police (SP) ofthe District concerned; or (v) SP in CBI or an officer of equivalent level working in CBI; or (vi) Zonal Director in Narcotics Control Bureau (NCB). or an officer of equivalent level [including Assistant Director (Ops.) in Headquarters of NCB); or (vii) Deputy Commissioner or an officer of equivaleht level in the Directorate of Revenue Intelligence or Central Board of Direct Taxes or Central Board of Indirect Taxes and Customs: or (viii) Assistant Director of Intelligence Bureau/ Bureau of Immigration (Bol); or (ix) Deputy Secretary of Research and Analysis Wing (R&AW); or (x) An officer not below the level of Superintendent of Police in National Investigation Agency; or (xi) Assistant Director of Enforcement Directorate; of (xii) Protector of Emigrants in the office of the Protectorate of Emigrants or ån officer not ....
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....Chetan Shah v. Union of India and Ors. reported in 2024 SCC ONLINEBOM 1195, wherein the Hon'ble Court has quashed Clause 8(b)(XV) of the Office Memorandum dated Memorandum No. 27.10.2010 bearing Office 25016/31/2010-Imm, as well as Clause 6(B) (XV) of the Office Memorandum dated 22.02.2022 bearing Office Memorandum No. 25016/10/2017-Imm (Pt), whereby the Chairman/Managing Director/Chief Executive Officer of a Public Sector Bank was empowered to request the opening of a Look Out Circular. Thus, in view of the cumulative effect of the said judgment, Public Sector Banks cannot open or request issuance of such Look Out Circulars and thus, the lookout circular issued against the petitioner at instance of the respondent bank is wholly without jurisdiction. 13. It is next submitted that the decision in the case of Viraj Chetan Shah (supra) was also considered by Hon'ble Delhi High Court in Sahil Chugh v. Union of India reported in 2024 SCC OnLine Del 4806, wherein, it was held that LOC issued at the behest of a public sector bank against borrowers/directors merely on account of loan default or declaration as wilful defaulters, in the absence of any criminal proceedings, are unsustainab....
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....money. Given the history of non-compliance and the substantial gap between the borrower's offer and the actual dues as detailed in Annexure-R/1, the bank prays that the court reject the petitioner's request for travel and uphold the restrictive measures currently in place. 17. Further, in the Supplementary Counter Affidavit, the respondent bank clarifies that the Look Out Circular (LOC) was issued against the petitioner based on several critical factors: his status as the Personal Guarantor for M/s Maruti Nandan Food Products Private Limited, his failure to respond to the bank's repeated attempts to discuss the loan account, and the classification of said account as a Non-Performing Asset (NPA). Furthermore, the bank emphasizes that the loan account was formally declared as a fraud on February 27, 2023. Regarding the legal proceedings, the bank has filed a petition under Section 358 of the Bhartiya Nagrik Suraksha Sanhita, 2023, currently pending before the Special Judge, CBI-I, Patna, in R.C. No. 10 (A)/ 2023. However, the bank explicitly submits that at the time the requisition for the LOC was originally made, it was clearly indicated that no criminal case was pending ....
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....ication dated March 25, 2026, the BoI stated it has no inherent objection to the withdrawal of the LOC, provided such a request is formally communicated by Canara Bank. As the petitioner is admittedly a defaulter in relation to the originating agency, any grievance regarding the continuation of the LOC lies exclusively against that agency rather than the BoI. Counsel further contended that they have acted in strict compliance with extant governmental guidelines and that no cause of action survives against them, necessitating the dismissal of the writ petition. Consideration 21. On close scrutiny of the facts, materials available on record and submission made by the learned counsel for the petitioner, Union of India and respondent-Canara Bank, it is evident from the submissions made by the Union of India that the investigation in which FIR was lodged by CBI, in which the charge-sheet has already been filed rendering the matter before the Court of competent jurisdiction, therefore, the petitioner has to approach the concerned Trial Court for seeking NOC to travel abroad. The effective remedy is completely misplaced stand as taken by them because the materials do not show any ch....
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....ion with any country or to strategic and/or the economic interest of India or if such person is allowed to leave the country, then the person may potentially get indulged in act of terrorism or offence against the State and/or that such departure ought not be permitted in larger public interest at any given point in time. 23. From the materials placed on record for consideration of validity or recourses taking against the LOC subject, it is quite evident that the pre-conditions for issuance of LOC is apparently missing as the criminal angle against this petitioner qua other members were investigated by the Central Bureau of Investigation (CBI) but no chargesheet is said to have been filed against this petitioner and consequently thereto there is no cognizable offence pending against this petitioner as of now, which would prohibit or prevent the LOC subject from leaving the country. In so far, the cooperation which the Originating Authority may expect from this petitioner in making good the liabilities, which is said to have incurred against the Company in question, because of the Loan Account having been classified as NPA, the property pledged is already under attachment of the ....
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....d his family members were allowed by the bank officials, to negotiate with private person under their supervision. As such, stand taken by the counsel for the petitioner, having not been controverted, surely persuades this Court to adjudicate the issues raised by the petitioner in reference to the specific stand taken by the respondent-bank and as also stand taken by the Union of India in their counter affidavit to justify the opening of LOC. 27. At this stage, the counsel for the respondent-bank has pointed out that their only concern is that the petitioner should discharge his liability or the mode of discharging the same be dictated by him before leaving the country, to such stand of the respondent-bank, counsel for the petitioner on instructions, submits that the petitioner in order to show his bona fide, is ready to discharge some percentage of his liability and ready to discuss further terms to settle/discharge the liability with the bank, for which both the parties sought indulgence from this Court and in order to enable the parties to arrive to an amicable settlement or to discuss the mode of settlement, the matter was adjourned vide order dated 30.04.2021 by passing of ....
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....nt, which has been classified as NPA, is under active consideration before the Board and most likely an appropriate decision would be taken on Saturday, i.e. on 02.05.2026. 30. Today, when this matter was taken up for consideration, an unsigned paper showing purported proposal made on behalf of the respondent is placed for consideration, in which the only condition stipulated is that the Bank is only interested with the entire decretal amount as on 30.04.2026 to the tune of Rs.45,16,79,758, as per the DRT, Patna, be paid by this petitioner, only then the interference be given by this Court. The proposal came from the respondent-bank is as follows: "It is observed that the bank sanctioned a One Time Settlement (OTS) to the borrower for Rs. 23.30 crore on 26.09.2017. however, the borrower failed to fulfil their commitment, paying only Rs. 22 lac towards the sanctioned amount. To revive this OTS, the party has to pay the decretal amount of Rs. 45,16,79,758.00 (as on 30.04.2026) as per the learned DRT, Patna order." 31. The purported proposal of the Bank, which has been placed for consideration by this Court, in reference of revival of OTS and payment of decretal amount,....
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....aged in fraud or in any siphoning, or any defalcation of amount given as loan and there being no cognizable offence, pending against this petitioner, the requisition dated 30.03.2024 made for issuance of Look Out Circular is wholly unsustainable in law and is accordingly, set aside and consequentially, the LOC dated 30.03.2024 is also set aside. 34. Since, the respondent-Bank has requested for imposing certain conditions upon this petitioner in the event this Court holds the requisition to be bad in law and without jurisdiction. In view of the fact that the petitioner cannot shirk his liability, which has been created against him along with other members. Therefore, in fitness of the things, it is required that certain conditions be imposed upon this petitioner in making good to the liability in due course of time by the Bank authority in enabling them to recover the amount in question, as is apparent from the proposal placed or record for consideration by this court, in which the liability is mentioned referred to the decretal amount, as per the learned DRT. 35. Looking to the financial interest & issues being involved in the present case and taking into account the proposal....