Calcutta High Court (Appellete Side)
Rahul Tantia vs Union Of India & Ors on 19 June, 2024
Author: Rajasekhar Mantha
Bench: Rajasekhar Mantha
76
19.06.2024
Ct. no. 13
Bh/Sb
WPA 15421 of 2024
Rahul Tantia
-Vs-
Union of India & Ors.
Mr. Sudhasatva Banerjee
Mr. Raghunath Ghose
Ms. Shusna Santra ...for the Petitioner
Mr. Ajay Gaggar
Mr. Uttiya Malilck ...for the Respondent no. 4
Mr. Nandalal Singhania Mr. Arijit Majumdar ...for the Union of India
1. The writ petitioner is admittedly a wilful defaulter as declared by two public sector banks, Bank of Baroda and Indian Overseas Bank. The IDBI Bank has also declared him to be a wilful defaulter. Such proceedings are under challenge.
2. The State Bank of India has outstanding dues exceeding Rs. 213 crores from the petitioner. They have obtained a certificate from the DRT at Kolkata on 18.04.2024. The dues of the other banks are not before this court.
3. The banks, in invocation of the office memorandum dated 22nd February, 2021 issued by the Government of India, Ministry of Home Affairs, Immigration Section, have requested for and obtained Look Out Circular (LOC) against the 2 petitioner, in year 2022. The petitioner was earlier declined permission to travel to Thailand in 2022.
4. The writ petition has been filed assailing the LOC and seeking a stay thereon to permit the petitioner to travel to Singapore to attend his daughter's university convocation.
5. Mr. S.S. Banerjee, learned counsel for the petitioner has placed extensive reliance on the decision of the Division Bench of the Bombay High Court in the case of Viraj Chetan Shah Vs. Union of India and others reported in 2024 SCC online Bombay 1195'.
6. By the said judgment, the Bombay High Court has inter alia held that Public Sector Banks cannot seek an LOC under the Memorandum of Ministry of Home Affairs, first issued in the year 2010 and amended from time to time lastly on 22nd February, 2021. The constitutional validity of the OMs has however been upheld. The Bombay High court however held that Public Sector Banks can seek LOCs either under a special statutes or through the DRTs or the Courts.
7. The procedure of issuance of LOC was held unsustainable and in violation of the principles of natural justice, and doctrine of proportionality.
8. Reliance is also placed by Mr. Banerjee on two decisions of co-ordinate Benches of this court 3 namely, Manoj Kumar Jain & Anr. vs. Union of India in WPA 22748 of 2022 dated 9th June, 2023 and a decision dated 21st August, 2023 in WPA 1485 of 2023, Sanjay Prakash Bansal and Anr. Vs. UCO Bank and Ors.
9. Mr. Banerjee argues that once Clause 6(B)(XV) of the memorandum dated 21st February, 2023 has been declared ultra vires by a High Court in this country the same operates in rem.
10. One must however, note the qualification at paragraph 196 of the judgment that LOCs can be obtained by Banks in some cases. It is clearly stated in Para 196 of the Judgment that the LOCs issued by Courts, DRTs and other competent authorities, investing and/or enforcing agencies shall not be affected.
11. This court notes from the facts in decisions of co-
ordinate benches, are distinguishable. The facts in the two cases cited by Mr. Banerjee, are where there was no decree passed against the petitioner therein and the LOCs have been challenged immediately. The judgment delivered by co-ordinate benches referred to hereinabove must therefore be distinguished and cannot be applied in the instant case.
12. This court further notes that the Bombay High Court has not pronounced upon the authority of the 4 Reserve Bank of India which has issued the master circular for Willful defaulter to request for issuance of a LOC.
13. Insofar as the decision of the Bombay High Court in Viraj Chetan Shah (supra) is concerned, the same is of persuasive value before this bench. There is some doubt in the mind of this Court as to whether a person who owes to one Public Sector Bank, well over 300 crores and much more to two other Banks, would or would not be endangering the economy of the State. There have been many instances of persons fleeing this country leaving with huge financial debts herein.
14. While the petitioner may have partially succeeded in making out some prima facie case on the basis of the cases cited, the balance of convenience for grant of interim order of stay does not appear to have been satisfied in the present case. The petitioner wants to visit Singapore for the purpose of attending his daughter's convocation ceremony. This is not considered a matter serious enough for relaxation of LOC issued prior to the decision of the Bombay High Court.
15. The Bank may take steps as it may be advised in this regard. This court does not make any conclusive pronouncement as of now, as has been done by the Bombay High Court and is of the view 5 that the matter needs some deeper consideration after receipt of affidavits.
16. Let affidavit-in-opposition be filed within a period of two weeks from date and reply, thereto, be filed within one week thereafter.
17. Liberty to mention after completing the pleadings before the appropriate bench.
(Rajasekhar Mantha, J.)