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2021 (4) TMI 878 - HC - Money LaunderingValidity of Look-Out Circular (LOC) issued against the petitioner - company defaulted in repayment of a term loan availed from the State Bank of India (SBI) - the petitioner was a Director of the borrower-Company - HELD THAT:- The only reason disclosed in the request of the Bank as well as in the LOC itself was that the petitioner was a Director of the borrower-Company. Such allegation was made in the present tense in both the request and the LOC. However, such allegation is, by itself, insufficient to fall within any of the grounds for issuance of LOC, as contemplated in the relevant Office Memoranda - The petitioner has clearly shown that the petitioner had resigned long back, even before the discovery of alleged fraud in 2014 by the Bank. Economic offence or any other ground contemplated in the relevant Office Memoranda was not disclosed either in the request of the Bank or the LOC itself to justify the issuance thereof. Apart from the CBI Court and Sessions Court having given a clean chit to the petitioner on similar allegations, the loan-in-question is sufficiently secured in view of the DRT award obtained by the Bank against the borrower- Company and the attachment order passed by the Adjudicating Authority under the PMLA at the instance of the ED relating to the writ petitioner's movable and immovable properties - in the present case, the LOC would not only amount to curtailing the fundamental right to liberty of the petitioner, as guaranteed by the Constitution of India, it would also take away the livelihood of the petitioner which would directly affect his life, also guaranteed by the Constitution. Neither the LOC nor the request therefor discloses any ground as envisaged in the relevant Office Memoranda to justify the issuance of the LOC and/or the subsequent renewal thereof. The petitioner has successfully demonstrated that he was not a Director of the Company at the relevant juncture when the borrower- company is alleged to have committed fraud. Thus, there is no basis whatsoever for issuance of the impugned LOC and the consequential subsequent extension thereof against the petitioner - Petition is allowed.
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