Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Del) 3859

IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J.
Mr. Muthuveerappan Arunachalam – Appellant
Versus
Union of India & Ors. – Respondents
W.P.(C) 11180 of 2022 & CM APPL. 32852 of 2022, 34305 of 2022, 49560 of 2022, 1028 of 2023, 28041 of 2023
Decided On : 16-08-2023

Advocates appeared:
Mr. Gaurav Mitra, Mr. Sachin Midha and Mr. Aditya Vikram Bajpai, Advocates, for the Petitioner.
Mr. Chetan Sharma, ASG with Mr. Anil Soni, CGSC with Mr. Devvrat Yadav, Mr. Amit Gupta and Mr. Prateek Rana, Advocates, for the UOI.
Ms. Rachita Garg, Advocate, for the Respondent-3/PNB.

The central legal point established in the judgment is that the issuance of Look Out Circulars must be based on exceptional circumstances and must conform to constitutional standards, including the right to travel abroad as a basic human right. The court emphasized the need for due process of law and the absence of arbitrary or unreasonable state action in depriving individuals of their right to travel abroad.

Headnote:
Look Out Circular - Writ petition under Article 226 and 227 seeking quashing of Look Out Circular - Office Memorandum No.25016/31/2010-Imm dt.27.10.2010, Office Memorandum dated 05.12.2017, Office Memorandum dated 04.10.2018 - The court discussed the legal provisions governing the issuance of Look Out Circulars and their interpretation in exceptional cases, the impact on India's economic interest, and the rights of individuals to travel abroad. The court emphasized the need for exceptional circumstances and due process of law in issuing Look Out Circulars, and the requirement for conformity to constitutional standards.
Fact of the Case:

The petitioner, a citizen of the United Kingdom and a permanent resident of Hong Kong, sought the quashing of a Look Out Circular issued against him by the Punjab National Bank, New Delhi. The petitioner had been declared bankrupt by the High Court of Hong Kong, and the bank had participated in the bankruptcy proceedings. The petitioner argued that the issuance of the Look Out Circular was arbitrary and illegal, and it violated his right to travel abroad.
Finding of the Court:

The court found that the issuance of the Look Out Circular was excessive and without merit, considering the petitioner's bankruptcy status and the completion of bankruptcy proceedings in Hong Kong. The court emphasized that the petitioner had no criminal case pending in India and that the mere loan default and bankruptcy proceedings were not sufficient grounds to restrict his right to travel abroad.
Issues: The issues involved the legality and validity of the Look Out Circular issued against the petitioner, the impact on India's economic interest, and the petitioner's right to travel abroad.
Ratio Decidendi: The court held that the issuance of Look Out Circulars must be based on exceptional circumstances and must conform to constitutional standards, including the right to travel abroad as a basic human right. The court emphasized the need for due process of law and the absence of arbitrary or unreasonable state action in depriving individuals of their right to travel abroad.
Final Decision: The Writ Petition was allowed, and the Look Out Circular was quashed.

JUDGMENT

1. The present Writ petition has been filed under Article 226 and 227 seeking the issuance of an appropriate writ for quashing and setting aside a look out circular issued at the instance of Respondent No. 3, Punjab National Bank, Head Office, Plot no. 4, Sector 10, Dwarka, New Delhi, 110075, by Respondent No.5, the Foreign Regional Registration Office, Bureau of Immigration, East Block-VIII, Level 2, Sector 1, RK Puram, New Delhi-110066 against the petitioner.

2. The facts, in brief, are as under:

a. The petitioner, Muthuveerappan Arunachalam, currently R/o A-16, Main Road, 11th Cross Thillai Nagar, Tiruchy, Tamil Nadu-620018 is a citizen of the United Kingdom of Great Britain and Northern Ireland, a permanent resident of Hong Kong and is a Director and Shareholder of M/s AR Intl (Hong Kong) Limited which was engaged in import, export and trade finance.

b. It is stated that M/s AR Intl (Hong Kong) Limited had availed loan facilities from the Hong Kong branch of Respondent No. 3, Punjab National Bank (PNB), for which the petitioner had extended his personal guarantee. It is further stated that default occurred on all loans of the company due to slump in the business thereby causing the accounts of the company to being declared as Non-Performing Assets by the Hong Kong Branch of Punjab National Bank on 01.04.2012.

c. It is stated that a complaint was filed by the creditor banks to the Commercial Crimes Department of the Hong Kong Police on 12.01.2018, the investigation for which was completed after a period of six months, and subsequently, the legal notices recalling the loan amount was issued and a case was filed in the High Court of Hong Kong by the Hong Kong branch of Respondent No. 3, Punjab National Bank. It is additionally stated that the Hon'ble High Court of Hong Kong on 18.02.2019 passed an order for the winding up of M/s AR Intl (Hong Kong) Limited and on 20.02.2019 passed an order declaring the petitioner bankrupt, thereby appointing the Official Receiver as the Provisional Trustee of the Petitioner. Moreover, the creditors including the Hong Kong branch of Respondent No. 3, Punjab National Bank appointed joint and several Trustees to take over and manage the petitioner's estate with immediate effect via a general Meeting held on 22.03.2019.

d. It is stated that the petitioner, on 08.01.2021 travelled to India for Medical Treatment and due to the onset of the pandemic and his Bankruptcy declaration, ended up residing with and being entirely financially dependent on his son in India.

e. Subsequently, due to the requirement of overseas medical treatment for the petitioner to treat for Glaucoma as stated by his doctor, which was causing deterioration in his eyesight and the need to meet his personal bankruptcy administrator and the Administrator of M/s AR Intl (Hong Kong) Limited, for an annual review in Hong Kong, the petitioner was required to travel abroad for which he booked flight tickets for the 24.06.2022.

f. It is stated that on the said date of travel on 24.06.2022 during immigration process, the petitioner was made aware by the immigration Officials at the Chennai International Airport of a Look Out Circular in place against the petitioner, issued at the instance of Respondent No. 3, Punjab National Bank New Delhi thereby debarring him from undertaking over-seas travel.

g. It is further stated that the petitioner in view of Clasue 7(c), Office Memorandum No. 25016/31/2010 issued by Ministry of Home Affairs (Foreigners Division) on the `Issuance of Look Out Circulars (LOC) in respect of Indian Citizens and Foreigners' which grants the right to `approach the officer who ordered the issuance of the Look Out Circular and explain that the LOC was wrongly issued', duly submitted a representation to Respondent No. 3, Punjab National Bank dated 29.06.2022 seeking the release of LOC to enable the petitioner to undertake the scheduled over-sees travel. It is additionally stated that no reply was received by the Resp