IMPORTANT POINT
The issuance of Look Out Circulars (LOCs) should be based on exceptional circumstances and a larger impact on the country's economy, and citizens should not be deprived of their liberty to travel abroad without valid and exceptional reasons.

JUDGMENT :

1. The applicant is before this Court calling in question a look out circular issued against him which restrains him from travelling abroad.

2. The applicant – Manoj Mahendra Somani, was stopped by the immigration officer at the Ahmedabad Airport, when he was scheduled to travel Dubai on 24.11.2021 and was informed orally that, look out circular had been opened in his name and therefore, he could not be permitted to travel at Dubai.

3. Brief facts that lead to the applicant to file this application, as borne out as pleadings are as follows:

3.1 The applicant was erstwhile Director of Gopala Polyplast Pvt Ltd Company. The company had availed a Cash Credit Facilities from the respondent no. 3 – Bank of Baroda. The applicant was one of the Directors, who had offered guarantee in his personal and individual capacity along with others for the said credit facilities. The company committed default in repayment of credit facilities. The account turned into NPA on 07.11.2019. The bank noticed the instances of diversion of funds. The forensic audit report dated 09.02.2019 was remained inconclusive, as a result, the respondent no.3 Bank sought a second forensic audit report, which was submitted on 08.01.2020. The bank found glaring irregularities in the account as observed by the auditor in his report. Bank issued a show cause notice dated 09.07.2020, declaring the applicant and others as willful defaulters. Before the aforesaid proceedings, in the month November, 2018, one Bonus Plastic Pvt. Ltd., filed a company petition against the company of the applicant, before the NCLT at Ahmedabad, to initiate corporate insolvency resolution process under the provisions of Insolvency and Bankruptcy Code 2016. By order dated 02.05.2019, the applicant and his company Gopala Polyplast were ousted and replaced by interim resolution professional for managing the affairs of the Company. Before the NCLT, one Plastena India Ltd, amongst the other had submitted EOI which was followed by submission of RP for acquiring the company during CIRP and plan was finally approved by passing order dated 07.08.2020. Pursuant to takeover by the Resolution Applicant, the Gopala Polyplast company came to be renamed as HCP Plastene Bulk Pack Ltd. The said RP approved against the claim of INR 74.01 crores, admitted by the RP, the respondent no.3 has to receive a total amount of approximately INR 71.06 crores by way of direct payment in three tranches (39.93 crores and payment by issuance of Equity Shares (31.30 crores). In addition to that, in the month of September, 2020, the Bank initiated proceedings under the provisions SARFAESI Act as well as the recovery proceedings under the DRT Act, as a result, the symbolic passion of the secured assets valued at about 2 crores was taken over.

3.2 The respondent Bank of Baroda filed a complaint before the Central Bureau of Investigation, Mumbai against the applicant and others on 15.12.2020, which was registered as FIR No. RC0772020E005 for the offence punishable under Section 120B read with Section 420 of the IPC and Section 13(2) read with Section 13(1)(d) of the PC Act, 1881. In the FIR, it is alleged that, during April, 2017 to July, 2019, the applicant accused and others were party to the criminal conspiracy to cheat respondent Bank of Baroda and in pursuant of aforesaid criminal conspiracy, the accused, Directors and Company M/s. GPL diverted the funds other tha82. The term 'detrimental to economic interest' used in the OM is not defined. Some cases may require the issuance of a LOC, if it is found that the conduct of the individuals concerned affects public interest as a whole or has an adverse impact on the economy. Squandering of public money, siphoning off amounts taken as loans from banks, defrauding depositors, indulging in hawala transactions may have a greater impact as a whole which may justify the issuance of LOCs. However, issuance of LOCs cannot be resorted to in each and every case of bank loan defaults o