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IN THE HIGH COURT AT CALCUTTA
SABYASACHI BHATTACHARYYA, J.
Mritunjay Singh – Appellant
Versus
Union of India and others – Respondents
WPO No. 105 of 2020
Decided on : 20-04-2021
Passports Act, 1967 - Section 10A - SARFAESI Act - Prevention of Money Laundering Act (PMLA), 2002 - Defaulted payment of Loan - Present challenge is against a Look-Out Circular (LOC) issued against petitioner - Petitioner is a Captain of the Merchant Navy and stays on high seas for most part of year, since 2008 - Petitioner was a Director of Kaushik Global Logistic Limited (KGLL) between March 19, 2009 and July 11, 2012 - Said company defaulted in repayment of a term loan availed from State Bank of India (SBI) - A criminal case was initiated by Central Bureau of Investigation (CBI), in which petitioner was one of accused - CBI Court, vide order discharged writ petitioner on finding that petitioner was not involved in day-to-day activities of company and there was no material sufficient to establish, even prima facie, charges against him - Petitioner denies being a guarantor as per Form C5A, when a fresh letter regarding grant of individual limits within overall limit was issued by guarantors for KGLL, which did not include petitioner's name as a guarantor - It is further case of petitioner that Bank has an award against borrower passed by Debts Recovery Tribunal under SARFAESI Act - Order of CBI Court was upheld by Sessions Court in Criminal Revision Case - CRR was filed by CBI against such order in this Court, in connection with which an application for condonation of delay remains pending - Proceeding under Prevention of Money Laundering Act (PMLA), 2002 was also initiated against petitioner by Enforcement Directorate (ED) - Adjudicating Authority under said Act ordered attachment of movable and immovable assets of accused-Company and other accused persons, including writ petitioner - An appeal against said order, preferred before Appellate Tribunal, was admitted - Previous writ petition filed by petitioner against ED culminated in a Division Bench order granting petitioner liberty to open a fresh bank account for credit of his salary for maintenance of his family and himself
Finding of the court: Neither LOC nor its subsequent extension, in any event, could go beyond reasons furnished by respondent no.3 in its request for issuance of LOC - Such request being based merely on allegation that petitioner “is” (present tense) a Director of Company is utterly insufficient to issue a Look-Out Circular. - Moreover, there is no justification in withholding petitioner unnecessarily from leaving country, particularly in view of fact that livelihood of petitioner depends on such overseas travel, since interests of bank are sufficiently protected by award passed against borrower by DRT as well as order of attachment of petitioner’s property, both movable and immovable, passed by Adjudicating Authority under PMLA at instance of ED- Petitioner has successfully demonstrated that he was not a Director of Company at relevant juncture when the borrower is alleged to have committed fraud. - There is no basis whatsoever for issuance of impugned LOC and consequential subsequent extension thereof against petitioner-Neither grounds mentioned in Office Memorandum issued by Government of India, Ministry of Home Affairs nor Circular which was amended by 2017 Memorandum, are applicable in present case to justify issuance and renewal of LOC against writ petitioner
Result: WPO Allowed
JUDGMENT :
1. The present challenge is against a Look-Out Circular (LOC) issued against the petitioner. The petitioner is a Captain of the Merchant Navy and stays on the high seas for the most part of the year, since 2008.
2. The petitioner was a Director of Kaushik Global Logistic Limited (KGLL) between March 19, 2009 and July 11, 2012. The said company defaulted in repayment of a term loan availed from the State Bank of India (SBI), Alipore Branch, Kolkata. A criminal case was initiated by the Central Bureau of Investigation (CBI), in which the petitioner was one of the accused. The CBI Court, vide order dated July 22, 2016, discharged the writ petitioner on the finding that the petitioner was not involved in the day-to-day activities of the company and there was no material sufficient to establish, even prima facie, the charges against him.
3. The petitioner denies being a guarantor as per Form C5A dated February 7, 2013, when a fresh letter regarding grant of individual limits within the overall limit was issued by the guarantors for KGLL, which did not include the petitioner's name as a guarantor. It is the further case of the petitioner that the Bank has an award against the borrower-Company passed by the Debts Recovery Tribunal under the SARFAESI Act.
4. The order of the CBI Court was upheld by the Sessions Court on July 7, 2017 in Criminal Revision Case No. 186 of 2016. CRR No. 1831 of 2017 was filed by the CBI against such order in this Court, in connection with which an application for condonation of delay remains pending.
5. In addition, a proceeding under the Prevention of Money Laundering Act (PMLA), 2002 was also initiated against the petitioner by the Enforcement Directorate (ED), bearing OC No. 1139 of 2019. The Adjudicating Authority under the said Act ordered attachment of the movable and immovable assets of the accused-Company and the other accused persons, including the writ petitioner, on September 30, 2019. An appeal against the said order, preferred before the Appellate Tribunal, was admitted on January 22, 2020.
6. A previous writ petition filed by the petitioner against the ED culminated in a Division Bench order of April 22, 2019, granting the petitioner liberty to open a fresh bank account for credit of his salary for the maintenance of his family and himself.
7. Subsequently, the Immigration Authorities opened the impugned LOC on the basis of a request of the SBI dated January 17, 2020. The writ petitioner was detained at the Kolkata Airport on February 11, 2020, when the petitioner was going to take a flight to Bangkok for boarding a merchant vessel as Captain.
8. The reason for opening LOC, as discussed in the LOC itself as well as the request of the Bank is that the writ petitioner is a Director of KGLL, which had been identified to have committed fraud, by the Bank, on March 7, 2014. The petitioner argues that neither the LOC nor the request for it was furnished to the writ petitioner.
9. Learned counsel for the petitioner argues that the right to travel abroad is a fundamental right and, in the present case, the livelihood of the petitioner, who is a sailor, depends on overseas travel.
10. It is also contended that Section 10A of the Passports Act, 1967 is the only statute empowering the Central Government to suspend a passport or restrict overseas travel of a citizen and provides for a prior opportunity of hearing to the affected person. In the present case, no opportunity of hearing was given to the petitioner before issuance of the LOC.
11. It is further submitted that the ground for request to issue LOC was invalid on the date of the request, that is, January 17, 2020, since the writ petitioner had resigned as Director of KGLL as long back as on July 11, 2012.
12. It is submitted that no other reason for such request and the consequential issuance of LOC were disclosed either by the Bank or the Immigration Authorities.
13. The 2017 Amendment of the concerned Office Memorandum (OM) pertaining to LOCs cit
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