Telangana High Court
G Eshwara Rao vs Bureau Of Immigration Ministry Of Home ... on 28 July, 2022
Author: K. Lakshman
Bench: K.Lakshman
THE HONOURABLE SRI JUSTICE K.LAKSHMAN
WRIT PETITION No.23594 OF 2020
ORDER:
This Writ Petition is filed to declare the action of respondents in issuing Look Out Circular (LOC) against the petitioner herein, and to direct the respondents to withdraw the said LOC.
2. Heard Sri Vimal Varma Vasireddy, learned counsel for the petitioner and Sri A.Kranthi Kumar Reddy, learned counsel appearing for 1st respondent, Sri B.Narasimha Sharma, learned counsel appearing for 2nd respondent and Sri E.Madan Mohan Rao, learned standing counsel appearing for 3rd respondent - Bank. Perused the record.
FACTS OF THE CASE:-
3. The petitioner's son-in-law is Director of M/s Mynah Industries Limited (for short, 'the Company'). The said company had obtained certain loans from one Vijaya Bank which later merged with Bank of Baroda i.e. 3rd respondent in 2013. Subsequently due to the default of the said loans, it was declared as a Non Performing Asset (NPA). The petitioner 2 had mortgaged some of his properties to 3rd respondent - Bank as collateral security on account of the loan taken by the said company. The said properties were attached by the Directorate of Enforcement, Hyderabad (DOE) vide provisional attachment order PAO No.02/2015 in ECIR No.03/HZO/2010 and the same was also confirmed by the Adjudicating Authority vide order 02.07.2015 in O.C.No.417 of 2015 and 3rd respondent - Bank was a party before the said Adjudicating Authority. 2nd respondent registered ECIR No.03/HZO/2010 with respect to the case RC.No.3(E)/ 2005/CBI/BS& FC, dated 31.12.2007 against the petitioner and his company. Trial is yet to commence in the said proceedings. When the petitioner intended to travel to United States of America on 12.11.2020, in view of finalization of the marriage alliance of his nephew, the petitioner was stopped at the Delhi Airport due to issuance of LOC against him at the instance of 3rd respondent. The National Company Law tribunal, Chennai vide order dated 28.02.2020 has approved the resolution plan for the said company and the same is in the process of implementation.
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4. It is contended by the learned counsel for the petitioner that he has no role in the said company. He is not even a guarantor to the said loan and has no personal liability. The said properties mortgaged by the petitioner as collateral security were already attached. The petitioner is cooperating with the investigating agencies. The petitioner has also traveled abroad around 14 times earlier and never fled away. The issuance of LOC is infringing the fundamental rights of the petitioner. The impugned LOC is coercive measure against the petitioner herein and has issued without application of mind though there is no fleeing away from the country. The petitioner now intends to travel United States of America, for a period of three weeks. Due to pendency of LOC, the petitioner herein is not in a position to travel abroad for the said purpose.
7. Learned counsel for the petitioner would submit that while issuing LOC, 1st respondent has not followed the guidelines issued by the Ministry of Home Affairs, from time to time including the latest guidelines issued vide Office Memorandum dated 22.02.2021 and it is abuse of process of law. The right of the petitioner to travel abroad cannot be 4 deprived and it amounts to violation of Article 21 of the Constitution of India. He has also placed reliance on several judgments. With the said submissions, the petitioners sought to declare the LOC issued against them as illegal.
8. Whereas, Sri E.Madan Mohan Rao, learned Senior Counsel appearing for 3rd respondent - Bank, referring to the counter, would submit that the petitioner had guaranteed the said loan by executing Indemnity Bond and letter of guarantee mortgaging some of his properties to the bank as collateral security on account of loan taken by his son-in- law's company. The Indemnity Bond and Guarantee Agreement were executed by the petitioner for the company which is co-extensive with that of the principal borrower. The said account was declared as NPA. Some criminal cases are also pending against the petitioner herein. The petitioner herein is liable to pay huge amounts which is against economic interest of the country. The petitioner has been avoiding payment of huge public debt payable to the Nationalized Banks. The company and the guarantors were declared as willful defaulters. Trial in criminal cases is different and liability payable is different. 3rd respondent - 5 Bank has followed the guidelines issued by the Ministry of Home Affairs, Union of India, including the guidelines dated 22.02.2021. 3rd respondent being a financial institution dealing with the deposits of the public, are in immediate need of funds for re-cycling and the same can be obtained only by taking expeditious action by enforcing its available lawful remedies against the defaulting parties and investigating the mis-utilization or diversion of funds. The petitioner has to approach the officer who ordered issuance of LOC and extend LOC wrongly. The properties mortgaged by the petitioner as collateral security have already been attached by the Directorate of Enforcement, Hyderabad (DOE) vide provisional attachment order PAO No.02/2015 in ECIR No.03/HZO/2010 registered by the 2nd respondent with respect to the case RC.No.3(E)/2005/CBI/BS& FC, dated 31.12.2007 against the petitioner and his company. Mere non-commencement of trial in criminal cases or his alleged co-operation in the case before NCLT, is not a ground for the petitioner to seek relief.
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9. The petitioner is intending to travel to USA for a period of three weeks. In proof of the same, the petitioner has filed certain documents.
11. In Menaka Gandhi Vs. Union of India1, it was held by the Apex Court that no person can be deprived of his right to go abroad unless there is a law enabling the State to do so and such law contains fair, reasonable and just procedure. Paragraph No.5 of the said judgment is relevant and the same is extracted below:-
Thus, no person can be deprived of his right to, go abroad unless there is a law made by the State prescribing the procedure for so depriving him and the deprivation is effected strictly in accordance with such procedure. It was for this reason, in order to comply with the requirement of Article 21, that Parliament enacted the Passports Act, 1967 for regulating the tight to go abroad. It is clear from the provisions of the Passports, Act, 1967 that is lays down the circumstances under which a passport may be issued or refused or cancelled or impounded and also prescribes a procedure for doing so, but the question is whether that is sufficient compliance with Article
21. Is the prescription of some sort of procedure enough or must the procedure comply with any particular requirements? Obviously, procedure cannot 1 1978(1)SCC 248 7 be arbitrary, unfair or unreasonable. This indeed was conceded by the learned Attorney General who with his usual candour frankly stated that it was not possible for him to contend that any procedure howsoever arbitrary, oppressive or unjust may be prescribed by the law.
Therefore, such a right to travel abroad cannot be deprived except by just, fair and reasonable procedure.
12. Referring to the said principle and also the principles laid down by the Apex Court in several other judgments, considering the guidelines issued by the Union of India from time to time, the Division Bench of High Court of Punjab and Haryana at Chandigarh in Noor Paul Vs. Union of India2 held that a right to travel abroad cannot be deprived except by just, fair and reasonable procedure. Without communicating the LOC to the subject of LOC, the authorities cannot seek to enforce it as it would not have any effect in law.
13. On examination of the facts therein, it had declared that issuance of LOC against the petitioner therein, a 2 (2022) SCC online P&H 1176 8 Guarantor to the loans, as illegal and set aside the LOC issued against the petitioner therein.
14. It is also relevant to note that the Bank of India, respondent therein, the Originator of the LOC had preferred Spl.Leave to Appeal (c) No(s). 7733 of 2022 wherein the Apex Court, vide order dated 05.05.2022 declined to stay the operation of said judgment except for the direction in the operative part of the order that the respondent Nos.1, 3 and 4 therein shall serve a copy of the LOC and also reasons for issuing it to the persons against whom it is issued as soon as possible after it is issued, and also provide a post - decisional opportunity to him and those requirements shall be read into the OMs issued by the respondents concerning the issuance of LOCs. The Apex Court also granted stay of the direction for payment of costs. The Apex Court however directed the Originator and custodian to ensure that the petitioner therein shall not be prevented from travelling abroad to pursue her studies by reason of the LOC. However, the Apex Court has also directed the respondent No.1/Writ Petitioner therein to give an undertaking to the Court not to dispose of her assets if any. She shall also keep the Bureau of Immigration 9 informed of the dates of her departure from and entry into India.
15. As discussed supra, the proceedings are pending with the DOE/2nd respondent against the petitioner and the said company in ECIR No.03/HZO/2010. A case vide RC.No.3(E)/2005/CBI/BS& FC, registered for the offences under Sections 420,467, 468 and 471 read with 120-B of IPC and 13(1)(d) of the prevention of Corruption Act, is pending. In view of the same, this Court cannot declare the LOC issued against the petitioner, as illegal. There is no allegation against the petitioner herein that he is not cooperating with the Investigating Agency/R.2.
16. It is also relevant to note that in supersession of its earlier Office Memorandum/guidelines, the Government of India, had issued guidelines vide Office Memorandum, dated 22.02.2021 with regard to issuance of LOC. In the said guidelines, the details of the Officers who have to issue LOC and other procedures were explained. As per the said guidelines, the Chairman/Managing Directors/Chief Executive of all Public Sector Banks can request for opening an LOC.
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17. As per clause-(6)J of the Office Memorandum, dated 22.02.2021, the LOC opened shall remain in force until and unless a deletion request is received by the BOI from the Originator itself. No LOC shall be deleted automatically. The Originating Agency must keep reviewing the LOCs opened at its behest on quarterly and annual basis and has to submit the proposals to delete the LOC, if any, immediately after such a review. The BOI should contact the LOC Originators through normal channels as well as through the online portal. In all cases where the person against whom LOC has been opened is no longer wanted by the Originating Agency or by Competent Court, the LOC deletion request must be conveyed to BOI immediately so that liberty of the individual is not jeopardized. A guideline similar to that of the above referred guideline is also there, in OM, dated 05.12.2017. Therefore, the 1st respondent, Originating Agency, shall review the said LOC.
18. In view of the above said guidelines and also law laid down, coming to the case on hand as discussed supra, the petitioner herein stood as guarantor for the loan taken by his son-in-law as Director of said company from the 3rd 11 respondent - Bank by mortgaging some of his properties to 3rd respondent - Bank as collateral security. Subsequently due to the default of the said loans, it was declared as a Non Performing Asset (NPA). The said properties were attached by the Directorate of Enforcement, Hyderabad (DOE) vide provisional attachment order PAO No.02/2015 in ECIR No.03/HZO/2010 registered against the petitioner and his company. Trial is yet to commence in the said proceedings. NCLT, Chennai vide order dated 28.02.2020 has approved the resolution plan for the said company and the same is in the process of implementation. Now the petitioner is intending to travel to United States of America for a period of three weeks. The petitioner is cooperating with the investigating agencies. The petitioner has also traveled abroad earlier several times, but there is no allegation against him that he has violated any of the conditions imposed on him. The right of the petitioner to travel abroad cannot be deprived.
19. In view of the above said discussion, since the case is pending with the 2nd respondent/DOE and trial is yet to commence, this Court is not inclined to declare the LOC 12 issued against the petitioner herein as illegal. However, as per the above said guidelines dated 22.02.2021, the Originating Agency has to review the said LOC on quarterly and annual basis but the 3rd respondent - Bank did not do the said exercise. Their counter is silent with regard to the same. It is not in dispute that the petitioner herein is only seeking permission to travel abroad for a period of three weeks. Therefore, this Court is inclined to suspend the LOC issued against the petitioner herein for a period of one month from 29.07.2021 to 28.08.2022 to travel to USA and return back to India and to cooperate in the case.
20. Considering the said principles and also in view of the above said discussion, this Writ Petition is disposed of with the following directions:-
i. LOC issued by 3rd respondent against the petitioner is suspended for a period of one month i.e. from 29.07.2022 to 28.08.2022.
ii. 3rd respondent shall inform/communicate this order to the respondent Nos.1 and 2 in terms of Office Memorandum, dated 22.02.2021.
iii. The petitioner shall inform his arrival/departure to all the respondents in terms of the said Office Memorandum, dated 22.02.2021.
13iv. The petitioner shall inform to respondents the address and other particulars with regard to his stay in United States of America(USA).
v. The petitioner shall cooperate with the Investigating Agency including the Directorate of Enforcement/2nd respondent by furnishing information/documents, if any, as sought by them.
vi. 3rd respondent - Originating Agency shall review the LOC opened against the petitioner herein on quarterly and annual basis, submit proposals to delete LOC, if any, immediately after such a review in terms of the said Office Memorandum, dated 22.02.2021.
vii. Respondent Nos.2 and 3 are directed to comply with the guidelines issued by the Government of India vide Office Memorandum dated 22.02.2021.
viii. Liberty is granted to the respondents to take action against the petitioner herein for violation of any of the aforesaid conditions.
Miscellaneous Petitions, if any, pending, shall also stand closed.
__________________ K. LAKSHMAN, J Date:28.07.2022 Note: Issue copy today.
b/o.vvr.