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IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBRAMONIUM PRASAD, J.
Preet Kaur And Anr. – Petitioners
Versus
Bureau Of Immigration And Others - Respondents
IN THE MATTER OF: + W.P.(C) 11139 of 2022 & CM APPLs. 32712 of 2022, 30693 of 2023, 36829 of 2023, 37407 of 2023, 44942 of 2023, 45031 of 2023, 51507 of 2023, 51730 of 2023 & 25466 of 2024
Decided on : 12-07-2024
| Table of Content |
|---|
| 1. challenge to lookout circulars issuance. (Para 1) |
| 2. background facts of the petitioners' financial obligations. (Para 3 , 4 , 5 , 6 , 10) |
| 3. details on asset and loan default issues. (Para 7 , 8 , 9 , 11) |
| 4. petitioners' challenge to lookout circulars. (Para 12 , 13) |
| 5. legal arguments against lookout circulars. (Para 14 , 15) |
| 6. guidelines for lookout circulars issuance. (Para 18 , 19) |
| 7. interpretation of 'detrimental to economic interest.' (Para 20 , 21) |
| 8. judicial interpretation on travel rights. (Para 22 , 23) |
| 9. judicial limit on lookout circulars based on financial inability. (Para 24 , 25) |
| 10. restrictions on travel cannot be based on default. (Para 29) |
| 11. outcome of the lookout circular challenge. (Para 30 , 31) |
| 12. clarifications on operational scope of judgments. (Para 32) |
| 13. conclusion of the writ petition. (Para 33) |
JUDGMENT :
SUBRAMONIUM PRASAD, J.
1. The Petitioners have approached this Court challenging the Lookout Circulars dated 03.01.2022 issued against the Petitioners by the Bureau of Immigration at the request of the Union Bank of India.
2. Notice was issued on 05.08.2022. Pleading are complete.
3. The facts of the case as stated by the Union Bank of India are that M/s I World Business Solutions Private Limited availed a financial assistance for business needs from the Union Bank of India on the terms and conditions as agreed upon by M/s I World Business Solutions Private Limited for repayment of such credit facility. The Petitioners stood as Guarantors to the said credit facility. It is stated that apart from being Guarantor to the credit facility availed by the company, Petitioner No.2 is also the Director of the company.
4. Counter affidavit further reveals that due to default on the part of the Petitioners, their account was classified as Non-Performing Asset (NPA) on 31.03.2021. A demand notice under Section 13 (2) of the SARFAESI Act was served upon the Petitioners demanding entire dues towards the principal outstanding amount along with the interest.
5. The counter affidavit reveals that despite the service of notice under Section 13 (2) of the SARFAESI Act, the amount was not repaid by the company and the Petitioners, who are the Guarantors, were served notice under Section 13 (4) of the SARFAESI Act by the Bank on 05.10.2021.
6. It is stated that an Original Application being O.A. No.75/2022 has been filed by the Bank against the Petitioner before the Debt Recovery Tribunal-I, which is pending adjudication.
7. It is stated that pursuant to the notice under Section 13 (4) of the SARFAESI Act, the Union Bank of India has sold the property being freehold property No. 29 DLF, Qutab Enclave Complex, Phase-I, Villa No.29/4, Type-Y, Tehsil Gurgaon, recovering an amount of Rs.5.43 crore.
8. It is stated that the only immovable property under equitable mortgage of the Bank is leasehold residential property No. 30/1, East Patel Nagar, New Delhi which is valued at 10.64 crores and the Bank has secured only about Rs.16.08 crores as against the total dues payable of Rs.76,61,82,562/-.
9. Material on record indicates that Show Cause Notice was issued by the Bank against the Petitioners for declaring the Petitioners and the company as wilful defaulters as per the RBI Master Circular dated 01.07.2015.
10. Material on record also indicates that the Forensic Audit of the company has been conducted and that the account of the company has been classified as 'Fraud' on 27.02.2023.
11. Material on record also indicates that an FIR bearing No. RC2192024E0001 dated 01.01.2024 registered at Police Station EO-I Delhi for offences under Section 420 read with 120B IPC and Section 13 (1)(a) and 13(2) of the Prevention of Corruption Act, 1968 has been registered by the CBI and the Petitioners have been arraigned as accused in the said FIR and the matter is being investigated by the CBI.
12. It is stated that Lookout Circulars have also been issued against the Petitioners at the instance of CBI, which are not the subject
Lookout Circulars cannot be issued solely based on non-payment of loans without serious criminal allegations; such actions infringe upon the fundamental right to travel under Article 21.
Issuance of Look Out Circulars must be based on concrete evidence and cannot be justified solely by the default in loan repayment, as it violates fundamental rights without due process.
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 r....
The issuance and continuation of a Look-Out Circular must be justified by compelling reasons, specifically regarding flight risk or evading justice; lack of fresh evidence can render it arbitrary.
doctrine of proportionality of punishment would apply and same has to be considered in the context of arbitrariness and Article 14 of the Constitution of India and in the context of the fact that no ....
An LOC, which is a coercive measure to make a person surrender and consequentially interferes with his right of personal liberty and free movement, certainly has adverse civil consequences.
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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