Back
2022 Supreme(Telangana) 246
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
G. RADHA RANI, J.
Garikapati Venkateswara Rao W/o. Chenchaia - Appellant
Versus
Union of India, Rep. by its Secretary - Respondent
Writ Petition No.6892 of 2022
Decided on : 06-06-2022
Advocate Appeared:
For the Appellant : Sri C. Raghu
For the Respondents: Sri B. Jithender, adv
The liability of a personal guarantor may not be absolved by a resolution plan, and the issuance of a Look Out Circular can be justified in larger public interest, especially in cases involving economic offenders.
Headnote:
Writ of Mandamus - Travel Ban - Insolvency & Bankruptcy Code, 2016 - Section 24(1) and II Schedule of the RTI Act, 2005 - LOC - Passport Act 1967 - Article 21 of the Constitution
Fact of the Case:
The petitioner, a director of a company, availed a loan from a bank. After insolvency proceedings, a resolution plan was approved, and the management of the company was taken over. The petitioner was stopped from traveling abroad due to a Look Out Circular (LOC) issued at the request of the bank, citing outstanding dues of Rs.226.02 Crores.
Finding of the Court:
The court found that the petitioner's liability as a personal guarantor was not absolved by the resolution plan, and the bank's action to safeguard its economic interest did not violate the petitioner's fundamental rights.
Issues: The issues revolved around the imposition of a travel ban on the petitioner, the validity of the LOC, and the petitioner's liability as a personal guarantor despite the resolution plan.
Ratio Decidendi: The court held that the petitioner's right to travel abroad could be restricted if there was a law enabling the state to do so, and such law contained a fair, reasonable, and just procedure. The court also emphasized the broadened scope of the issuance of the LOC to include economic offenders hampering the interests of India.
Final Decision: The Writ Petition was dismissed, and no costs were imposed.
ORDER :
This writ petition is filed by the petitioner seeking to issue Writ of Mandamus declaring the action of the 7th and 8th respondents, instructing the Court to impose travel ban on the petitioner and consequential action of the 4th respondent in imposing a travel ban on the petitioner as illegal, arbitrary and in violation of Article 21 of the Constitution.
2. Heard learned counsel for the petitioner and learned Counsel Sri B.Jitender, representing respondent Nos.1 to 6 and learned standing counsel for respondent Nos.7 and 8.
3. The learned counsel for the petitioner submitted that the petitioner was the Director cum Chairman of GVR Infra Projects Ltd. GVR Infra Projects availed a loan from erstwhile Vijaya Bank which was now merged with the 7th respondent bank and the 8th respondent was the branch which has advanced the loan. Proceedings were initiated against the company under the provisions of Insolvency & Bankruptcy Code, 2016. A resolution plan was approved by the National Company Law Tribunal, Chennai vide order dated 20.07.2020. Under the said resolution plan, resolution applicant UV Asset Reconstruction Company Limited & WL Structures Private Limited Consortium had taken over the management of the company. During the pendency of the proceedings an interim resolution professional (IRP) was appointed on 15.10.2018 and the board of the company was terminated. In the resolution plan the claims of all the bankers were taken into consideration and thereafter the resolution plan was approved. The 7th respondent bank had also participated in the resolution process and was part of consortium of bankers.
4. He further submitted that the petitioner booked a ticket to travel to Maldives on 7th October, 2021 by Go First Airlines along with five others. The return ticket was also booked for 10th October, 2021. The petitioner was holding the passport bearing No.U8680182 which was valid up to 10.02.2031. The passport was issued on 11.02.2021 and no objection was raised at the time of issuing the passport. The petitioner had taken boarding pass for travel on 07.10.2021. When he went to Airport for boarding flight, he was stopped by the immigration authorities. The other five members were allowed to travel. When the petitioner insisted for the reasons, the authorities failed to disclose the same and simply stated that he could not travel since there was a ban of foreign travel imposed on him. No notice was issued to the petitioner by any authority informing him about the said ban. The petitioner returned back and made a representation to the 4th respondent on 22.10.2021. When the information was not provided by the 4th respondent, the petitioner filed W.P.No.30196 of 2021 and the said writ petition was disposed by order dated 24.11.2021, directing the 4th respondent to pass orders on the representation submitted by the petitioner and also to furnish the information sought by the petitioner within a period of one week. The petitioner received a letter, dated 29.11.2021 from the 5th respondent stating that the information sought by the petitioner was pertaining to Intelligence Bureau (IB)/Bureau of Immigration (BOI) AND SINCE Section 24(1) and II Schedule of the RTI Act, 2005 exempted IB/BOI from providing any information, the same is not being provided.
5. He further submitted that on enquiry the petitioner reliably learnt that on the instructions given by the 7th and 8th respondents, travel ban was imposed on the petitioner. The entire loan amounts were covered under the resolution plan and the resolution plan had taken over M/s.GVR Infra Projects Ltd. The petitioner was not connected with the company any more. It was alleged by some banks who were part of consortium that the petitioner continue as a personal guarantor and filed applications before Debt Recovery Tribunal at Chennai, which were pending. No orders were passed by the Debt Recovery Tribunal at Chennai. Merely because the petitioner stood as personal guarantor to the compan
