9911796707
TMI Blog2023 (8) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... du-620018 is a citizen of the United Kingdom of Great Britain and Northern Ireland, a permanent resident of Hong Kong and is a Director and Shareholder of M/s AR Intl (Hong Kong) Limited which was engaged in import, export and trade finance. b. It is stated that M/s AR Intl (Hong Kong) Limited had availed loan facilities from the Hong Kong branch of Respondent No. 3, Punjab National Bank (PNB), for which the petitioner had extended his personal guarantee. It is further stated that default occurred on all loans of the company due to slump in the business thereby causing the accounts of the company to being declared as Non-Performing Assets by the Hong Kong Branch of Punjab National Bank on 01.04.2012. c. It is stated that a complaint was filed by the creditor banks to the Commercial Crimes Department of the Hong Kong Police on 12.01.2018, the investigation for which was completed after a period of six months, and subsequently, the legal notices recalling the loan amount was issued and a case was filed in the High Court of Hong Kong by the Hong Kong branch of Respondent No. 3, Punjab National Bank. It is additionally stated that the Hon'ble High Court of Hong Kong on 18.02.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priate writ be issued in the nature of a certiorari quashing the Look Out Circular (LOC) issued against the petitioner and to declare the said Look Out Circular as illegal, arbitral and Ultra vires. 3. It is stated by the petitioner that the actions of Respondent No. 3, Punjab National Bank are in an arbitrary and illegal manner without understanding the object of issuance of Look Out Circulars since the petitioner has not committed any offence punishable under the provisions of the Indian Penal Code or any other law for the time being in force and has neither been declared as a proclaimed offender by any Indian court nor is evading/has evaded any court proceeding pending trial in India. It is also stated that assuming the purpose of the Look Out Circular is to secure the presence of an individual facing prosecution, the same is not available in the present case as even the investigation initiated in Hong Kong has already been completed. 4. It is further stated that by participating in the winding up proceeding initiated against the petitioner in the High Court of Hong Kong, the Respondent No. 3 becomes barred by principles of estoppel and Res Judicata from issuing an LOC against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank. It is further stated that if the petitioner were to be allowed to leave India, it is possible that he may alienate his assets and interests within India and create encumbrances with a view to defraud his creditors. 8. The learned counsel appearing for the respondents apart from reiterating the averments stated in the counter also submitted that despite the loan having been extended to the petitioner through the PNB Hong Kong Branch, it forms a part of the main branch being Punjab National Bank, India where all profits and losses of PNB Hong Kong are routed to India, and is also governed by the Reserve Bank of India. It was therefore submitted that by virtue of the abovementioned and his residence in India, Indian law is also applicable on the petitioner and since he is yet to relinquish and disclose his estate rights in India, nothing precludes the respondent bank from issuing an LOC, which was done here in pursuance of a circular issued by the Foreigners Division (Immigration Section) Ministry of Home Affairs, Government of India vide their OM No. 25016/10/2017-Imm(Pt) dated 22.03.2021. 9. Heard the parties and perused the material on record. 10. The issuance of LOCs in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan don't get elevated to an exceptional circumstance where the petitioner's departure from the country would cause an adverse impact to the nation's economy. The validity and legality of LOC's therefore, heavily depends on the prevailing circumstances governing the date on which such an LOC request is being made. 13. Based on the materials placed on record in the instant case, this Court is of the opinion that no exceptional case of adverse effects on India's economic interest exists. The contention of the respondent that despite the loan being taken for an entity in Hong Kong from the Hong Kong Branch of PNB, there is a sharing of profits and losses being brought in from Hong Kong to India, there exists reasonable nexus between the operations of the two entities and that the default in Hong Kong may have an impact on public funds in India, that is, the amount lost will have a cascading effect on Indian public money cannot be accepted. 14. It is well settled that the purpose of opening an LOC is to ensure that if a person, against whom the LOC has been opened, is allowed to leave the country then that person should come back. LOC is issued to secure the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a discharge, are not grave enough to substantiate a bar on the exercise of their right to travel abroad on the grounds of affecting the overall economic wellbeing and public good of India. 17. LOC is a major impediment for a person who wants to travel abroad. There are plethora of judgments which states that no person can be deprived of his right to go abroad other than for very compelling reasons. 18. Moreover, in Manekha Gandhi v Union of India, (1978) 1 SCC 248, a seven-judge bench of the Apex Court has held as under: "5. ...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 right to go abroad. It is clear from the provisions of the Passports Act, 1967 that it 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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