Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(P&H) 1792

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
M.S. Ramachandra Rao, Harkesh Manuja, JJ.
Raman Kumar Mehta – Appellant
Versus
Union Of India & Ors. – Respondents
CWP-19018-2022
Decided On : 17-10-2022

Advocates appeared:
Mr.Lokesh Sinhal, Advocate, for the Appellant; Mr.Satya Pal Jain, Additional Solicitor General of India with Mr.Dheeraj Jain, Advocate, Mr.Umang K. Khosla, Advocate and Mr.Ashutosh Verma, Advocate, for the Respondent.

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 Out Circulars (LOCs), and the violation of the fundamental right to travel abroad under Article 21 of the Constitution of India.

Headnote:
LOC - Travel Restriction - Office Memorandum No.25016/31/ 2010-Imm dt.27.10.2010, Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The court discussed the issuance of Look Out Circular (LOC) against the petitioner, the legal provisions governing the issuance of LOC, and the violation of the petitioner's right to travel abroad under Article 21 of the Constitution of India. The court highlighted the high threshold required to deny a person the right to travel abroad and emphasized that LOCs can only be issued in cases involving cognizable offences and where the subject is evading arrest or trial. The court also emphasized the need for a fair and just procedure in issuing and extending LOCs, and held that the LOCs issued against the petitioner could not be sustained.
Fact of the Case:

The petitioner challenged a Look Out Circular (LOC) issued against him, preventing him from traveling abroad due to his association as a guarantor for a loan availed by a company. The petitioner's fundamental right to travel abroad was curtailed, and he was not provided with a copy of the LOC.
Finding of the Court:

The court found that the issuance of the LOC against the petitioner was not justified as he was not accused of any cognizable offence, and the grounds for issuing the LOC did not fall within the legal provisions governing LOCs. The court held that the petitioner's right to travel abroad under Article 21 of the Constitution of India was violated, and the LOCs issued against him were set aside.
Issues: The issues involved the validity of the LOC issued against the petitioner, the curtailment of his right to travel abroad, and the compliance with legal provisions governing the issuance of LOCs.
Ratio Decidendi: The court emphasized 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 LOCs, and the violation of the petitioner's fundamental right to travel abroad under Article 21 of the Constitution of India.
Final Decision: The Writ Petition was allowed, the LOC issued against the petitioner was set aside, and he was permitted to travel abroad. The stamp 'Cancelled' on his passport was quashed, and the respondents were restrained from preventing the petitioner from traveling abroad. The respondent No.2 was also ordered to pay costs of 20,000/- to the petitioner.

JUDGMENT / ORDER

M.S. Ramachandra Rao, J. -

Background of the case

1. The petitioner has challenged in this Writ Petition a Look Out Circular [for short 'LOC'] issued against him by the Bureau of Immigration, New Delhi (Respondent No.3) on the basis of which petitioner was prevented from travelling abroad on 11.08.2022 to Canada.

2. Petitioner is a personal guarantor to a loan availed by respondent No.4 Company from respondent No.2 Bank and had executed an equitable mortgage of the residential property belonging to him.

3. Subsequently, respondent No.4 had substituted some other property also in addition to the properties already mortgaged by it and the property for which the petitioner had executed an equitable mortgage as personal guarantor was released by respondent No.2. A letter dt.01.01.2018 (P4) sent by respondent No.2 to the Secretary Municipal Council, Naraingarh, District Ambala to make necessary entries in that regard has also been filed.

4. Respondent No.4 defaulted in repayment of loan to respondent No.2 and respondent No.2 then filed OA-1541-2021 before the Debt Recovery Tribunal-II, Chandigarh for recovery of 6.93 crore.

5. Petitioner's two children are living in Canada and the petitioner intended to visit them. So he secured a visitor visa from the Canadian Government and also booked a ticket on an Air India Flight to Toronto, Canada for himself and his wife for 11.08.2022, but the petitioner was not allowed to board the flight on the ground that LOC was issued against him by respondent No.3.

6. Petitioner's wife was, however, allowed to board the flight and go to Canada and thus three members of the petitioner family are in Canada, but the petitioner is not being allowed to travel to Canada.

7. Petitioner contends that copy of the LOC was not provided to him. Petitioner alleges that the said LOC was issued by respondent No.3 since he was a guarantor for a loan advanced to respondent No.4 by respondent No.2 which had been defaulted by respondent No.4. He also contends that an endorsement was made on his passport called 'cancelled stamp'.

8. Petitioner also contends that on 22.12.2021 an order was also granted in favour of respondent No.2/Bank in OA-1541-2021 restraining the defendants in OA from alienating the secured assets to any third party till the disposal of the OA.

9. Petitioner contends that he has a constitutional right to go abroad and such a right cannot be prevented from being exercised without due process of law and without observing principles of natural justice.

10. He contends that he is not accused in any criminal case nor is he evading the process of law and no criminal case was registered against him. According to him, there was no declaration that he had committed any fraud or that he is a willful defaulter by any competent authority as per law and so no LOC could have been issued against him.

11. Petitioner also contends that principles of natural justice require that LOC issued against him should also be furnished to him. In any event, since the petitioner's property has already been released by respondent No.2 Bank, merely because respondent No.2 was wrongly impleaded as a party in the OA filed by the Bank, respondent No.2 Bank could not have sought for issuance of LOC from respondent No.3.

Stand of respondents No.1&3

12. Mr.Satya Pal Jain, Additional Solicitor General of India appearing for respondents No.1 & 3 has placed before us the request made on 09.07.2021 by respondent No.2/Bank seeking LOC against the petitioner, and also LOC No.2021413444 issued against the petitioner by respondent No.3.

13. A reading of the request made by respondent No.2 Bank to respondent No.3 on 09.07.2021 merely reveals that such a request for opening of an LOC was made against the petitioner on the ground that the loan account of respondent No.4 had become an NPA, and that the petitioner is one of the guarantors to the said loan by relying on a letter dt.22.11.2018 issued by the Department of Financial Services empowering