JUDGMENT

MANMOHAN, ACJ: (ORAL)

Cav. 68/2024 Since learned counsel for the caveator/respondent entered appearance, the caveat stands disposed of.

CM APPL. 8483/2024 (for exemption)

Allowed, subject to all just exceptions.

Accordingly, the present application stands disposed of.

LPA 117/2024

1. Present appeal has been filed under Clause X of the Letters Patent of the then High Court of Judicature at Lahore, which stands extended to the High Court of Delhi, challenging the judgment dated 20th December, 2023, whereby the learned Single Judge has quashed the Look Out Circular (‘impugned LOC’), issued against the Respondent at the request of the Appellant Bank, and accordingly, allowed the W.P. (C) 2063/2023 filed by the Respondent.

2. The facts of the case are that the Respondent was the erstwhile Managing Director and founder of M/s Indosolar Ltd. (‘Company’). The Appellant Bank, along with other banks, had extended credit facilities and loans to the said Company. The Respondent and his father stood themselves as the Personal Guarantors for the loan and credit facilities extended to the said Company. The loan account of the Company was classified as Non- Performing Asset (‘NPA’) on 01st July, 2013; recovery proceedings under Recovery of Debts and Bankruptcy Act, 1993 were initiated against the borrower and guarantors for an outstanding amount of Rs. 280 Crores (approximately), which culminated in a decree in favour of the Appellant Bank for the claim amount with interest.

3. As per record, Insolvency Resolution Process was initiated under Insolvency and Bankruptcy Code, 2016 (‘IBC 2016’) against the Company. Separately, the Respondent had also initiated his personal Insolvency Resolution Process, wherein a Resolution Plan was approved and report was filed by the Resolution Professional. Pertinently, no criminal proceedings or FIR by any authority are pending against the Respondent.

4. In these facts, on 26th December 2022, the Respondent was stopped at the IGI Airport, New Delhi while he was travelling to Canada owing to the impugned LOC issued against him at the request of the Appellant Bank. Thereafter, aggrieved by the impediments posed by the impugned LOC, the Respondent had filed the said writ petition seeking quashing of the impugned LOC.

5. Learned counsel for the Appellant Bank states that it is an admitted position that the Respondent is a British National. He states that as per the report of the Resolution Professional (‘resolution report’) dated 10th October, 2021, in the repayment plan, filed in the Respondent’s personal insolvency proceedings before the National Company Law Tribunal, New Delhi, the liability of the Respondent towards the creditors is assessed at Rs.1778 Crores and proposed repayment plan on behalf of the Respondent is a mere Rs.59.10 lakhs. He states that the request for issuance of the impugned LOC was made against the Respondent in view of the apprehension that the Respondent will abscond from the country without repaying his dues to the Appellant Bank, which stand assessed in the recovery proceedings. He states that proceedings initiated by the Appellant Bank for sale of the mortgage property has been objected to by a cousin of the Respondent and the Appellant Bank has been unable to realise the said dues.

6. In reply, learned Senior Counsel for the Respondent states that the Appellant Bank has placed on record the proforma filled in by the Appellant Bank for requesting issuance of an LOC (‘proforma for LOC’). He states that the said proforma for LOC suffers from glaring infirmities which evidence that it has been issued without application of mind. In this regard, he relies upon the Office Memorandum (‘OM’) dated 22nd February, 2021 issued by the Ministry of Home Affairs, Government of India, whereby consolidated guidelines for issuance of Look Out Circulars (LOC) in respect of Indian citizens and foreigners are provided. The relevant guidelines of the OM, relied upon by the Respondent, read as under: -

“(D)