Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Kar) 79

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
KRISHNA S. DIXIT, J.
Dr. Bavaguthu Raghuram Shetty, S/o. Late Shri Shambu Shetty - Petitioner
Versus
Bureau of Immigration, Ministry of Home Affairs, Government of India, Rep. By Its Director and Ors. – Respondents
Writ Petition No. 4385 of 2023 (GM-RES)
Decided On : 09-02-2024

Advocates Appeared:
For the Petitioner: Sri. B.V. Acharya., Sr. Counsel a/w Sri. Prabhuling K. Navadgi., Sr. Counsel a/w Smt. Keerthi Reddy.
For the Respondents: Sri. H. Shanthi Bhushan., DSGI a/w Sri. Aditya Singh., CGC; Sri. D. R. Ravishankar., Sr. Counsel a/w Sri. B. Prasanna Kumar; Sri. Manu P. Kulkarni, Adv. for Sri. Dharmendra Chatur., Adv. Sri. Manoj J. Raikar., Adv. and Ms. Ishi Prakash, Adv.

IMPORTANT POINT
The main legal point established in the judgment is that the Office Memoranda for the issuance of Look out Circulars cannot be used for the mere recovery of loans and must be in line with the specified grounds related to national interests and security. The judgment also upholds the petitioner's fundamental right to travel abroad and considers the impact on personal liberty and family rights.

Headnote:
Look out Circulars - Jurisdiction, Fundamental Rights, Abuse of Power, Natural Justice, Arbitrariness, Recovery of Loan, Mareva Injunction Order, Decrees, Criminal Case, Travel Restriction, Fundamental Right to Travel, Office Memoranda, Validity, Presumptive Validity, Delegated Legislation, Constitutional Rights, Economic Interests, Loan Recovery, Unconscionable Conduct, Family Rights, Personal Liberty - Passports Act, 1967, RBI Master Circular No.DBR.No.CID.BC.22/20.16.003/2015-16, Fugitive Economic Offenders Act of 2018, Extradition Act, 1962
Fact of the Case:
The petitioner, an Indian citizen, challenged the Look out Circulars (LoC) that restrained him from traveling to the United Arab Emirates. The respondent banks resisted the writ petition, claiming the petitioner's chronic default of huge loans and the need for his presence in India to prevent loan recovery proceedings from being futile.
Finding of the Court:
The court found that the petitioner owed substantial sums of money to the banks and had faced legal actions in India and abroad. The court also examined the Office Memoranda (OMs) issued by the Home Ministry for authorizing and regulating the issuance of LoCs. The court held that the OMs could not be used for the mere recovery of loans and that the petitioner's fundamental right to travel abroad should be upheld. The court also noted the petitioner's age and the need to be with his family, concluding that the petitioner's rights should not be denied due to abuse of process or unconscionable conduct.
Issues: The issues included the validity of the Office Memoranda for the issuance of LoCs, the petitioner's compliance with court orders, and the impact of the petitioner's travel on loan recovery and economic interests.
Ratio Decidendi: The court's decision was based on the interpretation of the Office Memoranda, the petitioner's fundamental rights, and the impact of the petitioner's travel on loan recovery and economic interests. The court emphasized that the OMs could not be used for the mere recovery of loans and that the petitioner's fundamental right to travel abroad should be upheld.
Final Decision: The court conditionally succeeded the writ petition, keeping the LoCs in suspended animation and issuing a writ of mandamus to permit the petitioner to travel to the United Arab Emirates. The court also imposed conditions on the petitioner regarding property dealings and future legal proceedings.

ORDER :

Petitioner, an Indian Citizen, is complaining to the Writ Court against the Look out Circulars (hereafter ‘LoC’) that have restrained him for four years (i.e. since 5th February 2020) from traveling back to United Arab Emirates.

II. Succinctly, the challenge is structured on the following grounds: Lack of jurisdiction; absence of jurisdictional facts; violation of Fundamental Rights; abuse of power; breach of principles of natural justice; non-application of mind & arbitrariness; object of LoC is not the recovery of loan; the Respondent-Banks have secured a Mareva Injunction Order; orders/decrees have been secured by the banks; banks have not filed any criminal case against the Petitioner, in India or abroad; his presence in UAE is eminently required for fighting the legal battles there; Petitioner, who is in the late evening of life needs to be in the company of his family; his travel to UAE cannot be restrained for an indefinite period; he is ready & willing to come back, if so directed.

III) After service of notice, the Respondent-Bureau of Immigration has entered appearance through the learned Deputy Solicitor General of India; the Respondent-Banks are represented by their Panel Advocates. The Statement of Objections has been filed by the 3rd Respondent i.e., Bank of Baroda, resisting the Writ Petition principally contending that: Petition in its present form & substance is not maintainable; Petitioner is a chronic defaulter of huge loans;, without exhausting alternate remedy; much of the petition suffers from res judicata; Petitioner’s presence is required in India to prevent loan recovery proceedings being rendered futile; culpable conduct in not disclosing all assets in terms of court order disentitles Petitioner to any discretionary relief in writ jurisdiction; his travel to UAE or any other foreign country is not required.

IV) I have heard the learned counsel appearing for the parties and perused the records. I have gone through the Written Submissions and adverted to relevant of the Rulings cited at the Bar. Having done that, I am inclined to grant indulgence in the light of following discussion:

(A) FOUNDATIONAL FACTS:

(i) It is the specific case of the said Bank that ‘the Petitioner, in his personal capacity and as a personal guarantor owes the Respondent No.3 an approximate sum of INR 2324 Crores’. The 3rd Respondent-Bank has obtained money decrees inter alia against the Petitioner at the hands of courts in Abu Dhabi in a sum of Rs.830,92,52,413/-. These decrees are put in execution. It has also filed Com.O.S.No.1/2020 before the Commercial Court at Bangalore against the Petitioner & his wife seeking a decree for Specific Performance of the Negative Lien and Creation of Mortgage dated 21.04.2020 and the same is pending. The Com.Appeal No.26/2020 filed by the Bank of Barod against the Petitioner & his wife, has been favoured by the Division Bench of this court vide order dated 17.04.2021. The Bench has granted an order of temporary injunction restraining alienation of any property, as had been sought for by the Bank in terms of I.A.Nos.I & II filed in pending Com.O.S.No.1/2020. This Bank had sought to declare Petitioner as a willful defaulter in terms of RBI Master Circular No.DBR.No.CID.BC.22/20.16.003/2015-16 dated 1.7.2015 and the same is the subject matter of challenge in Petitioner’s pending W.P.No.10087/2021. 3rd Respondent-Bank claims that Petitioner is due approximately in a sum of Rs.2,324 Crore. Similarly, the 2nd Respondent-Bank has instituted proceedings in UAE for the loan recovery and the same are still pending. However, the said Bank has not filed the Statement of Objections, furnishing material particulars of the same. Be that as it may. The fact remains that Petitioner owes huge sums of money, be it as a borrower or a guarantor.

(ii) Petitioner having suffered the LoCs, had filed W.P.No.15032/2020 (GM-RES) C/w W.P.13862/2020 (GM-PASS). A Co-ordinate Bench of this court dismissed the same vid