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IN THE HIGH COURT AT CALCUTTA
SABYASACHI BHATTACHARYYA, J.
Manish Mittal - Petitioner
Versus
Union of India and Others - Respondents
WPA No. 9191 of 2022 With IA No. CAN 1 of 2023
Decided On : 03-07-2023
LOC - TRAVEL RESTRICTION - GUIDELINES - JUDICIAL SCRUTINY - CENTRAL GOVT. GUIDELINES - FAR - DISCLAIMER - LOC ISSUED BY IMMIGRATION AUTHORITIES - GUIDELINES VIOLATION - JUDICIAL SCRUTINY - LOC SET ASIDE - PERSONAL LIBERTY - FREEDOM OF MOVEMENT - RIGHT TO TRAVEL ABROAD - ARTICLE 21 - CONSTITUTION OF INDIA - RESTRAINT ON TRAVEL - GUIDELINES OF CENTRAL GOVERNMENT - REASONABLE RESTRICTIONS - ECONOMIC INTEREST OF COUNTRY - PUBLIC INTEREST - IMMIGRATION AUTHORITIES ACTED AT BEHEST OF BANK - LOC ISSUED DE HORS GUIDELINES - NO FIR REGISTERED AGAINST PETITIONER - NCLT PROCEEDING PENDING FOR OVER TWO YEARS NOT YET ADMITTED - DRT PROCEEDING NOT CULMINATED IN ANY AWARD AGAINST PETITIONER - DECLARATION OF WILLFUL DEFAULTER NOT YET REACHED FINALITY - NO OCCASION FOR REQUEST MADE BY BANK FOR ISSUANCE OF LOC AGAINST PETITIONER - LOC SPENT FORCE ON EXPIRY OF ONE YEAR - NO FURTHER RENEWAL OR EXTENSION OF SAME OR ANY REQUEST BEING MADE THEREFOR - NO CONCEIVABLE REASON WHY PETITIONER SHOULD BE FURTHER RESTRAINED FROM TRAVELLING ABROAD - LOC AND REQUEST THEREFOR DE HORS CENTRAL GOVERNMENT GUIDELINES - CANNOT SURVIVE JUDICIAL SCRUTINY - ACTION OF RESPONDENT-AUTHORITIES IN RESTRAINING PETITIONER FROM LEAVING INDIA DEPRECATED AND SET ASIDE - JUDGMENTS CITED BY PETITIONER - YARDSTICKS FOR ISSUANCE OF LOC NOT SATISFIED IN PRESENT CASE - RIGHT OF A PERSON OF FREE MOVEMENT AND RIGHT TO TRAVEL CANNOT BE RESTRICTED - RESTRICTION ON TRAVEL CANNOT BE USED AS A BUFFER TO RECOVERY OF PAYMENTS ALLEGEDLY OUTSTANDING TO BANK - LOC ISSUED TO PETITIONER CANNOT BE FURTHER ACTED UPON, HAVING SPENT ITS FORCE AND BEING DE HORS THE LAW - LOC SET ASIDE, BEING CONTRARY TO GOVERNMENT GUIDELINES - RESPONDENTS DIRECTED TO ENSURE THAT ANY COMMUNICATION, IF MADE BY SAID RESPONDENTS TO ANY AUTHORITY FOR RESTRAINING PETITIONER FROM TRAVELLING ABROAD OR LEAVING COUNTRY IN ANY MANNER SHALL BE REVERSED AND GIST OF THIS ORDER SHALL BE COMMUNICATED BY RESPONDENTS TO ALL SUCH AUTHORITIES TO ENSURE THAT PETITIONER IS NOT PREVENTED FROM TRAVELLING ABROAD IN ANY MANNER WHATSOEVER.
Fact of the Case:
Petitioner, CEO of a Steel Conglomerate, was prevented from boarding a flight to Bangladesh due to a Look Out Circular (LOC) issued against him at the behest of Punjab National Bank (PNB) on grounds of non-payment of loan and dues. The petitioner challenged the LOC and the restraint on his right to travel abroad, arguing that the LOC was issued without any valid reason and was in violation of his fundamental right to personal liberty and freedom of movement under Article 21 of the Constitution of India.
Finding of the Court:
The Court found that the LOC issued against the petitioner was de hors the Central Government guidelines and could not survive judicial scrutiny. It held that the allegations against the petitioner, including CBI investigation, NCLT proceeding, DRT proceeding, and declaration of willful defaulter, were not sufficient to justify the issuance of an LOC. The Court also found that the Forensic Audit Report (FAR) relied on by the Bank contained a strong disclaimer and could not be relied upon to form a reasonable basis for the issuance of the LOC.
Issues: 1. Whether the LOC issued against the petitioner was valid and in accordance with the Central Government guidelines. 2. Whether the petitioner's right to personal liberty and freedom of movement under Article 21 of the Constitution of India was violated by the LOC.
Ratio Decidendi: 1. The Court held that the LOC issued against the petitioner was de hors the Central Government guidelines and could not survive judicial scrutiny. 2. The Court held that the allegations against the petitioner, including CBI investigation, NCLT proceeding, DRT proceeding, and declaration of willful defaulter, were not sufficient to justify the issuance of an LOC. 3. The Court held that the Forensic Audit Report (FAR) relied on by the Bank contained a strong disclaimer and could not be relied upon to form a reasonable basis for the issuance of the LOC. 4. The Court held that the petitioner's right to personal liberty and freedom of movement under Article 21 of the Constitution of India was violated by the LOC.
Final Decision: The Court allowed the petition and set aside the LOC issued against the petitioner. It also directed the respondents to ensure that any communication made by them to any authority for restraining the petitioner from travelling abroad or leaving the country in any manner shall be reversed.
JUDGMENT :
Sabyasachi Bhattacharyya, J.
1. The petitioner is the Chief Executive Officer (CEO) of a Steel Conglomerate by the name of Dimensions Steel Private Limited and is required to travel across the globe in connection with his work. A copy of the Passport has been annexed which indicates the travel history of the petitioner. When the petitioner boarded a plane for Bangladesh on May 16, 2022 after completing necessary formalities such as immigration clearance, five men approached the petitioner, out of whom three were in the uniform of the Customs Department, and demanded to see the petitioner’s passport. Upon the petitioner handing over the passport, the petitioner was requested to alight from the aircraft and to accompany the said officials to their office. Subsequently, the petitioner was prevented from boarding the flight and was informed that the petitioner was to be restrained from travelling. However, no further reason was allegedly given to the petitioner. After detaining the petitioner for about 2-3 hours in the Customs Office of the Airport, the passport was handed back to the petitioner and he was allowed to leave the airport with the caveat that he will not be allowed to travel.
2. Challenging such action and seeking to leave India as and when required, the petitioner has preferred the instant writ petition. Although the immediate cause of action was to travel to Dubai for a period between May 19, 2022 and May 26, 2022, the broader challenge in the writ petition is against the unlawful restraint on the petitioner from travelling abroad.
3. During pendency of the writ petition, an affidavit-in-opposition was filed by the Punjab National Bank (PNB) and another by the Immigration Authorities. The petitioner, for the first time from such pleadings, learnt about a Look Out Circular (LOC) having been issued at the behest of the added respondent no.6-Bank (the PNB) in respect of the petitioner by the Immigration Authorities.
4. Learned senior counsel for the petitioner argues that the restraint on the petitioner is absolutely arbitrary and has no valid premise whatsoever. It is contended that the guidelines of the Central Government in respect of LOCs do not apply to the petitioner at all. The parent premise of restraining the petitioner and issuance of the LOC was a communication by the Bank which, according to the petitioner, does not disclose any reason whatsoever.
5. At the time of arguments, the respondents have contended that several proceedings are pending before different authorities against the petitioner. With regard to a declaration of Willful Defaulter by the Identification Committee, it is argued that the same is subject to scrutiny by a Review Committee under the law. The same having not yet been completed even after one year of the declaration by the first committee, the petitioner cannot be detained on such ground. In fact, apparently the proceeding has been dropped against the petitioner, which appears from the inordinate delay in any decision being arrived at by the Review Committee.
6. Insofar as the proceeding pending before the Debts Recovery Tribunal (DRT) is concerned, the same does not have any bearing on the issue. The NCLT proceeding, for Corporate Insolvency Resolution Process (CIRP), was filed two years ago and has not yet been admitted.
7. Even in the alleged investigation by the CBI (Central Bureau of Investigation), no FIR has been registered as yet. Hence, it is argued that the LOC issued against the petitioner is palpably de hors the guidelines of the Central government as well as in violation of law and is an unnecessary restriction on the right to personal liberty and to travel abroad of the petitioner as guaranteed under Article 21 of the Constitution of India.
8. Learned senior counsel for the petitioner cites Vishambhar Saran v. Bureau of Immigration and others, rendered by a co-ordinate Bench of this Court in WPA No.6670 of 2022, where the learned Single Judge had observed that non-payme
The issuance of a Look Out Circular (LOC) must be in accordance with the Central Government guidelines and must be based on reasonable grounds. The right to personal liberty and freedom of movement u....
The main legal point established is the requirement for procedural safeguards in the issuance of Look Out Circulars, ensuring compliance with principles of natural justice and a fair, just, and reaso....
Preventing a person from traveling abroad cannot be a mode of recovery of dues by the bank. The value of the secured property exceeded the amount due from the petitioner to the bank, and the bank's a....
The fundamental right to travel abroad under Article 21 of the Constitution of India requires a high threshold to be curtailed, and the issuance of Look Out Circulars (LOCs) should be limited to case....
The court established that Lookout Circulars cannot be issued solely based on financial default; there must be evidence of criminal activity or a legitimate risk of flight.
The central legal point established in the judgment is the high threshold required to deny a person the right to travel abroad, the need for a fair and just procedure in issuing and extending Look Ou....
The judgment establishes the principle that the right to travel abroad is protected under the Constitution of India and cannot be deprived without following fair, just, and reasonable procedures.
The central legal point established in the judgment is that the right to travel abroad, as guaranteed by Article 21 of the Constitution of India, cannot be curtailed unless a very high threshold is m....
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