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9. We have elaborately heard the submissions of the learned advocates on either sides and carefully perused the materials placed on record.

10. The following facts are required to be noted much of which is not in dispute. The third respondent bank is an Indian Public Sector 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 APOT NO. 38 OF 2021 REPORTABLE 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 and to Singapore and back till 18.03.2020 after which he is primarily stationed in India. The appellant has been issued a Singapore permanent resident card which is stated to have been valid till 15.11.2021. The appellant was the Director of M/s. HBG Trading Pte Limited which was incorporated in Singapore on 18.10.2012. The third respondent bank originally sanctioned credit facilities with a limit of USD 2.7 million on 17.03.2017, approximately Rs. 19.65 crores as per the exchange rate. The credit facility was renewed from time to time and lastly renewed in terms of the sanction advise dated 14.03.2019. Pursuant thereto, the appellant executed a Facility Agreement and Personal Guarantee on 26.06.2019 together with executing other documents to secure the interest of the third respondent bank. The appellant and the company committed default in repayment of the loan and the demands made by the respondent bank for regularization of the trade facilities and clearance of dues were not adhered to. It is not in dispute that the appellant did not pay the dues nor honored the repayment obligations fastened on him. The account of M/s. HBG Trading Pte Limited was classified as a Non- Performing Assets (NPA) on 23.06.2020 and the overseas branch of the third respondent adjusted the cash margins (fixed deposits under lien) as against the overdues and the balance amount outstanding payable by M/s. HBG and the appellant who was a guarantor stood at USD 1,679,108 which is approximately Rs. 12.15 crores as per the exchange rate as on 23.06.2020. The appellant had not returned to Singapore since 18.03.2020 and in the APOT NO. 38 OF 2021 REPORTABLE meantime his creditors launched proceedings both against the appellant in his personal capacity as well as the company. M/s. Income Pte Limited filed winding up proceedings during May 2020 against M/s. HBG Trading Pte Limited which was subsequently pursued by M/s. Maersk Trading Finance. The Hon'ble High Court of the Republic of Singapore by order dated 09.10.2020 directed winding up of M/s. HBG Trading Pte Limited and liquidators were appointed. The third respondent bank has filed its proof of debt with the liquidators on 21.10.2020. M/s. Maersk Trade Finance initiated bankruptcy proceedings against the appellant before the High Court at Singapore during May 2020 and an order was passed on 19.11.2020 declaring the appellant as bankrupt and appointing the trustee over 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.

(1967) 3 SCR 525 APOT NO. 38 OF 2021 REPORTABLE

13. Bearing this legal principle in mind, we now proceed to examine the matter before us. The earliest of the office memorandum pertaining to the issuances of LOC in respect of Indian citizens and foreigners was governed by the memorandum dated 05.09.1979 and 27.12.2000. In the memorandum dated 05.09.1979, it has been stated that apart from the Government of India in the Ministry of Home Affairs, circulars are issued by various authorities for keeping a watch on arrival/departures of Indians and foreigners. These authorities includes the Ministry of External Affairs, the Customs and Income Tax Departments, Directorate of Revenue Intelligence, Central Bureau of Investigation, Interpol, Regional Passport Officers, Police authorities in various states etc. It has been further stated that unless otherwise specified in the warning circulars itself, the circulars issued by any of the various authorities specified above will be regarded as invalid, if it is more than one year old and the card will be wedded out. For the future, 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 APOT NO. 38 OF 2021 REPORTABLE 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.

26. The decisions in the case of Poonam Paul did not involve any transaction with an overseas branch of a public sector bank registered in India. The same is the case in respect of the decision in Vishambhar Saran. The decision in the case of Dr. Bavaguthu Raghuram Shetty is closer to facts on hand as because another country was involved in the said financial transaction. Therefore, when an Indian citizen who seeks to carry on business in a foreign country approaches a public sector bank registered in India for grant of financial facilities/credit facilities and the same are provided by the overseas branch of a said public sector bank registered in APOT NO. 38 OF 2021 REPORTABLE India and borrower defaults in payment and seeks to travel from India to another foreign country fully knowing well that if he enters Singapore, there is every likelihood that he will be detained as the appellant had been declared as a bankrupt by the Singapore High Court is undoubtedly an exceptional circumstance. This in our view would 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 sanctioned through the overseas branch of the third respondent, it is undoubtedly a loan sanctioned by a public sector bank registered in India and precisely for that reason the agreements give dual jurisdiction to the respondent bank to take action either under the laws of India or the laws of Singapore to which conditions APOT NO. 38 OF 2021 REPORTABLE the appellant has irrevocably accepted. Thus, when the appellant is amenable both to the laws of Singapore and the laws of India, the third respondent bank was fully justified in seeking to restrain the appellant from leaving the country as his exit out of the country more particularly to the Republic of Tanzania would be against the strategic interest of a public sector bank which would mean that it would be against the strategic interest of India.

30. What would be the cumulative effect of these Office Memorandums is required to be seen. Before making such an exercise it would be relevant to take note of the Governmental / RBI control over Public Sector Banks. The APOT NO. 38 OF 2021 REPORTABLE RBI regulates and supervises Public Sector and Private Sector Banks under the provisions of The Banking Regulation Act, 1949. In terms of Section 35(1A) of the said Act RBI can cause a scrutiny to be made of the affairs of the Bank. Under Section 35A it is empowered to give directions in public interest of the depositors; in the interest of the bank and to secure proper management of the Bank. In terms of Section 35AA of the said Act, RBI can direct the bank to initiate insolvency resolution process in respect of a default, under the provisions of Insolvency and Bankruptcy Code. In terms of Section 36 (1c), RBI can give assistance to any bank by means of the grant of a loan or advance. Thus the powers of RBI are comprehensive and pervasive to deal with various issues and situations / contingencies that may arise /emerge in all Banks, (i.e) the Public Sector and Private Sector owned Banks. Given the deep control/ Governmental Control with particular reference to Public Sector Banks, they undoubtedly, play a very vital role in the economy of India. The objective behind Government nationalizing banks is with a view to ensure economic growth with social justice. Thus banking plays a very significant role in economic development and growth of the country (India). Undoubtedly Public Sector Banks is the fulcrum of the Indian financial structure. PSBs play a very vital role in the economic growth and development of the Country. It is said that about 70 percent of banking activity in the India is through Public Sector Banks and the burden of the social agenda rests on the shoulders of the Public Sector Banks. Therefore, there can be no second opinion that the "health" of a public sector banks is vital qua the Indian economy. The PSBs play vital role in the growth and expansion of our country's financial system. Only when a PSB APOT NO. 38 OF 2021 REPORTABLE functions well only then it benefits in nation- building. The Banking Sector, in particular PSBs provides financial stability to the Indian economy and play an important role in the promoting economic development to our country.