Mrs. Sarita Grandhi Alias Sarita ... vs Bureau Of Immigration And Another
2022 Latest Caselaw 3701 Tel

     THE HONOURABLE SRI JUSTICE K.LAKSHMAN

            WRIT PETITION No.34661 OF 2021

ORDER:

This Writ Petition is filed to declare the action of the 2nd

respondent in issuing Look Out Circular (LOC) against the

petitioner, holding Passport No.M2472460, as illegal and also

a direction is sought to the 2nd respondent to withdraw the

LOC issued against the petitioner.

2. Heard Sri Vikram Pooserla, learned counsel for the

petitioner and Sri Praveen Kumar Jain, learned counsel,

representing M/s Juris Prime Law Services appearing on

behalf of the 2nd respondent and learned Standing Counsel

for the 1st respondent. Perused the record.

FACTS OF THE CASE:-

3. M/s. Mynah Industries Limited had availed credit

facility from 2nd respondent - Bank under multiple banking

arrangement scheme. The petitioner and her husband were

Directors of the said Company and they are also Guarantors

to the limits provided to the said Company with the 2nd

respondent - Bank along with others. The said account has

been declared as NPA on 16.06.2015. The said Company has

to pay an amount of Rs.25.20Crores to the 2nd respondent

Bank. The Borrowers/Guarantors of the said loan were

declared as willful defaulters on 08.03.2018 and their

photographs have been published in the newspapers on

06.06.2019.

4. The said account of the said Company is under NCLT

wherein the resolution plan submitted has been accepted.

The petitioners and other Guarantors have mortgaged seven

properties, out of which three properties were attached by the

Enforcement Directorate (ED) and two properties were

attached by the Economic Offence Wing (EOW).

5. It is relevant to note that the said company had

approached the 2nd respondent - Bank proposing to avail One

Time Settlement (OTS) scheme. Accordingly, the said

company had also submitted a proposal. The same was

accepted by the 2nd respondent - Bank and the said Company

had agreed to pay Rs.20 Crores as OTS for which the 2nd

respondent - Bank had also agreed. The said fact was

informed to the said Company by the 2nd respondent - Bank

vide letter dated 16.06.2022.

6. It is also relevant to note that in the said letter dated

16.06.2022, the 2nd respondent - Bank has specifically

acknowledged the receipt of the amount of Rs.9.5 Crores

towards the said compromise and the said amount of Rs.9.5

Crores was adjusted in the account. For payment of balance

amount, time was extended by three months i.e. from

30.06.2022 to 30.09.2022. The said fact is not disputed by

the learned counsel appearing for the 2nd respondent - Bank.

Thus, the time to clear the balance amount is upto

30.09.2022.

7. While the matter stood thus, the 2nd respondent -

Originator has issued LOC against the petitioner herein on

29.07.2020 on the ground that the account of the said

Company is under NCLT, wherein the resolution plan

submitted has been accepted by the 2nd respondent. Though

the bank is having exclusive charge over the seven properties,

three properties were attached by ED and two were attached

by the EOW. Hence, as a precautionary measure opening of

LOC is recommended against the petitioner herein, a

Guarantor. Vide letter dated 17.08.2021, the 2nd respondent

had requested the 1st respondent to continue the said LOC

against the petitioner in terms of the Office Memorandum

dated 22.02.2021.

8. The contentions raised by Sri Vikram Pooserla,

learned counsel for the petitioner are twofold which are as

follows:-

1. The subject LOC issued by the 2nd respondent - Originator on 29.07.2020 is contrary to the guidelines issued by the Government of India, Ministry of Home Affairs, Foreigners Division (Immigration Section), vide Office Memorandum, dated 05.02.2017.

2) Request made by the 2nd respondent vide letter dated 17.08.2021 to the 1st respondent to continue LOC is contrary to the guidelines issued by the Government of India vide Office Memorandum dated 22.02.2021.

9. Learned counsel for the 2nd respondent would

contend that the petitioner herein is a Guarantor to the

subject credit facility availed by the said Company. Her

properties and the properties of her husband were mortgaged

with the bank, and the bank is having exclusive charge over

seven properties out of which, three properties were attached

by the ED and two properties were attached by the EOW.

Hence, as a precautionary measure, the 2nd respondent

recommended for opening of LOC against the petitioner.

According to him, the 2nd respondent has followed the

guidelines issued by the Government of India, from time to

time and there is no irregularity and illegality in it.

10. Learned counsel for the 1st respondent would

submit that the 1st respondent is only a custodian and at

request of the 2nd respondent - Originator, it is maintaining

and continuing the LOC.

11. In view of the said submissions, it is relevant to

note that as on the date of issuance of the said LOC i.e. dated

29.07.2020, the guidelines dated 05.12.2017 issued by the

Union of India were in operation, and relevant clause which

deals with the issuance of LOC is extracted below:-

"In exceptional cases, LOC can be issued even in such cases, as would not be covered by the guidelines above, whereby departure of a person from India may be declined, at the request of any of the authorities mentioned in clause (b) of the above- referred OM, if it appears to such authority based on inputs received that the departure of such person is detrimental in the sovereignty or security, integrity of India or that the same is detrimental to the bilateral relation with any country or to the strategic and/or economic interests of India or if such person is allowed to leave, he may potentially indulge in an act of terrosrism or offences against the State and /or

that such departure ought not be permitted in the larger public interest at any given point in time.

12. Referring to the same, learned counsel for the 2nd

respondent would submit that the petitioner will fall under

the category of 'Economic interests of India'. Whereas,

learned counsel for the petitioner disputing the same, would

submit that the petitioner will not fall under any of the said

categories.

13. As stated supra, the petitioner herein is only a

Guarantor for the credit facility availed by the said Company.

Just because the account of the said Company declared as

NPA and Borrowers/Guarantors were declared as willful

defaulters, it cannot be said that the petitioner/Guarantor of

the said loan/Former Director of the said Company will fall

under 'Economic Interests of India' and LOC can be issued. It

is also relevant to note that while extending the loan/credit

facility, the 2nd respondent - Bank had already taken all

precautionary measures including obtaining collateral

security, deposit of title deed in respect of the properties of

the Guarantors. In the counter, filed by the 2nd respondent,

there is no mention with regard to initiation of any

proceedings under The Securitization and Reconstruction of

Financial Assets and Enforcement of Security Interest Act,

2002 (for short, 'the SARFAESI Act') for recovery of the said

loan. On the other hand, it had accepted the OTS proposal

submitted by the said company. Time to clear the balance

amount was extended upto 30.09.2022. Therefore, according

to this Court, the case of the petitioner will not fall under the

category of 'Economic Interests of India' for the purpose of

issuing LOC.

14. It is also relevant to note that referring to the

provisional attachment order vide PAO No.02 of 2015 in ECIR

No.03/HZO/2010, the learned counsel for the 2nd respondent

would submit that out of the properties mortgaged by the

Guarantors, a few of them have been attached by the

Economic Offences Wing, Mumbai under Maharashtra

Protection of Interest of Depositors (in Financial

Establishments) Act, 1999 (MPID Act) for defaulting in

returning the deposits made by the depositors by M/s.

Metkore Alloys & Industries Limited and by the Enforcement

Directorate, Hyderabad against M/s. Saritha Steels and

Industries Limited for money laundering under Prevention of

Money Laundering Act, 2002. The attachment orders were

dated 17.03.2016 and 02.07.2015. The petitioner herein was

also a Director of the said Companies and is a party to the

said offences. Therefore, according to him, the petitioner

herein will fall under the category of 'Economic Interests of

India'. Considering the said fact only, the 2nd respondent had

issued the said LOC.

15. As stated above, the said attachment orders are

dated 17.03.2016 and 02.07.2015. Therefore, the

Enforcement Directorate had already initiated proceedings

against the above said two companies to which according to

the 2nd respondent, the petitioner was a Director. Though the

petitioner herein had filed rejoinder to the counter filed by

the 2nd respondent, the petitioner herein has not disputed the

said fact and on the other hand, it was contended by the

petitioner herein that she is not accused in charge sheet

bearing No.4 of 2013, dated 30.09.2013 in EOWCR No.89 of

2013. She has admitted that she was only made a party in

the ED and EOW proceedings because the properties

inherited by her from her father and alter mother were a part

of the attachment that were made in furtherance of the

proceedings initiated by the Authority. Thus investigation

with ED and EOW, is pending and the stage of the said

proceedings and investigation is not mentioned in the

petition, counter and rejoinder. But, there is no dispute with

regard to pendency of the same. Therefore, at this stage, it is

not proper for this Court to declare the LOC issued against

the petitioner herein, as illegal.

16. As discussed supra, in the present case, the

petitioner herein is seeking permission to travel abroad i.e.

Singapur from 16.07.2022 to 16.08.2022 for finalization of

her daughter's admission in University in Singapur. The

petitioner herein had already made travel arrangements and

in proof of the same, she has filed Air Tickets.

17. In Menaka Gandhi Vs. Union of India1, it was held

by the Apex Court that no person can be deprived of his right

to go abroad unless there is a law enabling the State to do so

and such law contains fair, reasonable and just procedure.

Paragraph No.5 of the said judgment is relevant and the

same is extracted below:-

1978(1)SCC 248

Thus, no person can be deprived of his right to, go abroad unless there is a law made by the State prescribing the procedure for so depriving him and the deprivation is effected strictly in accordance with such procedure. It was for this reason, in order to comply with the requirement of Article 21, that Parliament enacted the Passports Act, 1967 for regulating the tight to go abroad. It is clear from the provisions of the Passports, Act, 1967 that is lays down the circumstances under which a passport may be issued or refused or cancelled or impounded and also prescribes a procedure for doing so, but the question is whether that is sufficient compliance with Article

21. Is the prescription of some sort of procedure enough or must the procedure comply with any particular requirements? Obviously, procedure cannot be arbitrary, unfair or unreasonable. This indeed was conceded by the learned Attorney General who with his usual candour frankly stated that it was not possible for him to contend that any procedure howsoever arbitrary, oppressive or unjust may be prescribed by the law.

Therefore, such a right to travel abroad cannot be deprived

except by just, fair and reasonable procedure.

18. Referring to the said principle and also the

principles laid down by the Apex Court in several other

judgments, considering the guidelines issued by the Union of

India from time to time, the Division Bench of High Court of

Punjab and Haryana at Chandigarh in Noor Paul Vs. Union

of India2 held that a right to travel abroad cannot be

deprived except by just, fair and reasonable procedure.

Without communicating the LOC to the subject of LOC, the

authorities cannot seek to enforce it as it would not have any

effect in law.

19. On examination of the facts therein, it had declared

that issuance of LOC against the petitioner therein, a

Guarantor to the loans, as illegal and set aside the LOC

issued against the petitioner therein.

20. It is also relevant to note that the Bank of India,

respondent therein, the Originator of the LOC had preferred

Spl.Leave to Appeal (c) No(s). 7733 of 2022 wherein the Apex

Court, vide order dated 05.05.2022 declined to stay the

operation of said judgment except for the direction in the

operative part of the order that the respondent Nos.1, 3 and 4

therein shall serve a copy of the LOC and also reasons for

issuing it to the persons against whom it is issued as soon as

possible after it is issued, and also provide a post - decisional

(2022) SCC online P&H 1176

opportunity to him and those requirements shall be read into

the OMs issued by the respondents concerning the issuance

of LOCs. The Apex Court also granted stay of the direction for

payment of costs. The Apex Court however directed the

Originator and custodian to ensure that the petitioner therein

shall not be prevented from travelling abroad to pursue her

studies by reason of the LOC. However, the Apex Court has

also directed the respondent No.1/Writ Petitioner therein to

give an undertaking to the Court not to dispose of her assets

if any. She shall also keep the Bureau of Immigration

informed of the dates of her departure from and entry into

India.

21. As discussed supra, in the present case, the

petitioner herein is seeking permission to travel abroad i.e.

Singapur from 16.07.2022 to 16.08.2022 for finalization of

her daughter's admission in University in Singapur. The

petitioner herein had already made travel arrangements and

in proof of the same, she has filed Air Tickets.

22. It is also relevant to note that in supersession of its

earlier Office Memorandum/guidelines, the Government of

India, had issued guidelines vide Office Memorandum, dated

22.02.2021 with regard to issuance of LOC. In the said

guidelines, the details of the Officers who have to issue LOC

and other procedures were explained. As per the said

guidelines, the Chairman/Managing Directors/Chief

Executive of all Public Sector Banks can request for opening

an LOC to the Deputy Director, Bureau of Immigration (BOI)

custodian of the LOC for issuance of the LOC until and

unless there is specific request from the Originator, LOC

shall not be deleted automatically. The Originating Agency

must keep reviewing the LOCs opened at its behest on

quarterly and annual basis and has to submit the proposals

to delete the LOC, if any, immediately after such a review. A

guideline similar to that of the above referred guideline is also

there, in OM, dated 05.12.2017. Therefore, the 2nd

respondent, Originating Agency, shall review the said LOC.

23. As stated above, the rejoinder filed by the petitioner

herein to the counter filed by the 2nd respondent, the

petitioner herein has specifically mentioned that she was only

made a party in the ED and EOW proceedings because the

properties inherited by her from her father and alter mother

were a part of the attachment that were made in furtherance

of the proceedings initiated by the Authority.

24. Both the learned counsel for the petitioner and

learned counsel appearing for the 2nd respondent are not in a

position to explain the status of the said proceedings.

Therefore, it is not proper for this Court to declare issuance

of LOC and continuation of the same against the petitioner

herein, as illegal.

25. As per clause-J of the Office Memorandum, dated

22.02.2021, the LOC opened shall remain in force until and

unless a deletion request is received by the BOI from the

Originator itself. No LOC shall be deleted automatically. The

Originating Agency must keep reviewing the LOCs opened at

its behest on quarterly and annual basis and has to submit

the proposals to delete the LOC, if any, immediately after

such a review. The BOI should contact the LOC Originators

through normal channels as well as through the online

portal. In all cases where the person against whom LOC has

been opened is no longer wanted by the Originating Agency

or by Competent Court, the LOC deletion request must be

conveyed to BOI immediately so that liberty of the individual

is not jeopardized.

26. As discussed supra, the petitioner herein is seeking

suspension of the LOC for a period from 16.07.2022 to

16.08.2022 to travel Singapore for the purpose of her

daughter's admission.

27. Considering the said principles and also in view of

the above said discussion, this Writ Petition is disposed of

with the following directions:-

i. LOC dated 29.07.2020 issued by the 2nd respondent against the petitioner is suspended for a period of 16.07.2022 to 16.08.2022.

ii. The 2nd respondent shall inform/communicate this order to the 1st respondent in terms of Office Memorandum, dated 22.02.2021.

iii. The petitioner shall inform her arrival/departure to the 2nd respondent in terms of the said Office Memorandum, dated 22.02.2021.

iv. The petitioner shall cooperate with the Investigating Agency including Enforcement Directorate by furnishing information/ documents, if any, as sought by them.

v. The 2nd respondent - Originating Agency shall review the LOC opened against the petitioner herein on quarterly and annual basis, submit proposals to delete LOC, if any, immediately after such a review in terms of the said Official Memorandum, dated 22.02.2021.

vi. Both the respondents are directed to comply with the guidelines issued by the Government of India vide Office Memorandum dated 22.02.2021.

vii. Liberty is granted to the respondents to take action against the petitioner herein for violation of any of the aforesaid conditions.

Miscellaneous Petitions, if any, pending, shall also stand closed.

__________________ K. LAKSHMAN, J Date:14.07.2022

Note: Issue copy by 15.07.2022.

b/o.Vvr