TaxTMI 
TaxTMI 
2024 (2) TMI 1689
X X X X Extracts X X X X
X X X X Extracts X X X X
....bursed by Respondent No.2/Bank for the cash credit facilities to be extended by the Bank. The Deed of Guarantee, specifically states that the Guarantee shall not exceed Rs. 2.63 crores which is the fair from the value of the property at DLF, Park Place, Gurgaon. The Deed of Guarantee observes that the Petitioner has mortgaged the said property to the company as security for the cash credit for Rs. 9 crore. 4. It is stated by the Bank that cash credit facilities to the tune of Rs. 7 crore based on the stock and book debts of the company were released and out of the said Rs. 7 crore, a sum of Rs. 5.95 crore was withdrawn by the Directors of the company. 5. It is stated that the amount has been misappropriated. The account of the company was classified as a Non-Performing Asset (NPA) on 30.06.2014 and on that date, a balance of Rs. 7.26 crore was due and payable by the company. 6. It is stated that Respondent No.2/Bank initiated proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act (in short 'RDDBFI Act') before the Debts Recovery Tribunal (DRT) by filing O.A. No. 295/2014 titled as Bank of Baroda v. M/s Metaphor Exports & Anr., and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the economic interests of the country. He states that substantial amounts of money have been siphoned off by the directors of the company, i.e., Metaphor Exports Private Limited. He states that the Petitioner has not been given a clean chit and has been kept at Serial No. 12 of the chargesheet and, therefore, the LOC should not be quashed. 13. Heard learned Counsel for the parties and perused the material on record. 14. Lookout Circular can be issued against a person at the instance of any of the agencies mentioned in the Office Memorandums issued by the Ministry of Home Affairs from time to time. 15. Relevant portion of the Office Memorandum bearing No.25016/10/2017-Imm (Pt.) dated 22.02.2021 which is the last of the guidelines which have been issued for opening of LOCs in respect of the Indian Citizens and Foreigners reads as under: "6. The existing guidelines with regard to issuance of Look Out Circulars (LOC) in respect of Indian citizens and foreigners have been reviewed by this Ministry. After due deliberations in consultation with various stakeholders and in supersession of all the existing guidelines issued vide this Ministry's letters/O.M. referred ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C deletion request must be conveyed to BoI immediately so that liberty of the individual is not jeopardized. (K) On many occasions, persons against whom LOCs are issued, obtain Orders regarding LOC deletion/ quashing/ suspension from Courts and approach ICPs for LOC deletion and seek their departure. Since ICPs have no means of verifying genuineness of the Court Order, in all such cases, orders for deletion/ quashing/ suspension etc. of LOC, must be communicated to the BoI through the same Originator who requested for opening of LOC. Hon'ble Courts may be requested by the Law Enforcement Agency concerned to endorse-/convey orders regarding LOC suspension/ deletion/ quashing etc. to the same law enforcement agency through which LOC was opened. (L) In exceptional cases, LOCs can be issued even in such cases, as may not be covered by the guidelines above, whereby departure of a person from India may be declined at the request of any of the authorities mentioned in clause (B) above, if it appears to such authority based on inputs received that the departure of such person is detrimental to the sovereignty or security or integrity of India or that the same is detri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....observed that the words "economic interest of India" and "larger business interest" are not empty words. The relevant paragraph of the said judgment is extracted below: "32. In the present case the Serious Fraud Investigation Office is investigating into the affairs of the aforementioned companies and its investigation overrides the investigations by other investigating agencies. Therefore recourse to look-out circular was not unfounded as the petitioner has definite connection with the investigation as discussed hereinabove. From the facts of the case it is clear that clause (L) of these guidelines clearly covers the petitioner's case as it is detrimental to the „economic interests of India‟ and that his departure ought not to be permitted in the larger public interest. The words „economic interests of India‟ and „larger public interest‟ are not empty words in the context of the present case because as mentioned earlier the petitioner is directly involved and was concerned with considerable shareholding of M/s. Gitanjali Gems Limited. It involves huge amount of almost Rs. 50 crores which requires serious explanation from the petitio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....emoranda. In this context, the court observed as under (page 137 of 442 ITR): "36. However, the matter does not end here and the crucial issue which needs to be now determined is as to whether the clause „detrimental to the economic interests of India‟ introduced vide the amendment in 2017, with a specific rider that the same would be used only in exceptional circumstances, could have, in the facts of the present case, been resorted to, for issuing the impugned look-out circular, as also whether the impugned look-out circular could be continued for the last almost three years without any proceedings under the Penal Code, 1860 or any other penal law being initiated against the petitioner. It has to be kept in mind, that the issuance of a look-out circular necessarily curtails the rights of an individual to travel abroad and therefore, I am of the view, that for invocation of this clause, which, in any event, is meant to be used only in exceptional circumstances, a mandatory precondition would be a formation of a reasonable belief by the originating authority that the departure of an individual would be 'detrimental to the economic interests of India' to such an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r opening a lookout circular, in exceptional cases, even if they are not covered by the guidelines, even in such of those cases, the same can be issued only if departure of such person is detrimental to the sovereignty or security of the country, or departure of the person is threat to the bilateral relations to any country, or to the strategic or economic interest of the country, or if such person is allowed to leave, he may potentially indulge in acts of terrorism or offences against State or that such departure ought not be permitted in larger public interest at any given point of time. 21. It is well settled that merely because the Office Memorandum permits the issuance of a lookout circular in exceptional circumstances, even when an individual is not involved in any offence under the IPC or any other penal law, the said power should be used in exceptional circumstances and not as a matter of routine. 22. The term 'detrimental to the economic interests' must be of such a magnitude that it can significantly affect the economic interest of the country. In the present case, the total loan amount disbursed is about Rs.7 crores and even if one adds the interest to it, it canno....