2023 (8) TMI 1459 - HC - Indian Laws

Issuance of Look out Circular - petitioner is not declared as a proclaimed offender by any Indian court nor is evading/has evaded any court proceeding pending trial in India - HELD THAT - The issuance of LOCs in respect Indian Citizens and foreigners was governed by an Office Memorandum No. 25016/31/2010-Imm dt.27.10.2010, which permits Look Out Circulars to be opened essentially against persons involved in cognizable offences who are evading arrest and their appearance in trial courts despite coercive measures with the likelihood that they would leave the country to evade trial or arrest. The intention of issuing an LOC was to act as a coercive measure to make a person surrender to the Court of Law or investigating agency. 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. 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 exist - In the present case, there is no LOC against the Petitioner. The LOC was issued against the petitioner who, along with his company M/s AR Intl (Hong Kong) Limited, had already been adjudged Bankrupt by the Hon'ble High Court of Hong Kong. Additionally, the company's creditors, during a General Body meeting held on 22.03.2019 had appointed joint and several Trustees to take over and manage the estate of the bankrupt with immediate effect, being a process in which the Respondent bank had already partaken. The issuance of LOC, despite the respondent bank already participating in the securing of the rights via winding up process on M/s AR Intl (Hong Kong) Limited which took place in Hong Kong and the subsequent declaration of discharge of the petitioner thereof, is excessive and without any due merit. It is amply evident that the petitioner has no criminal case mentioned against him by the respondent in India. All civil, criminal and recovery proceedings were undertaken by the Respondent Bank against the petitioner in Hong Kong, which have all reached their logical ends - 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. The right to travel abroad is a basic human right and a part of Article 21 of the Constitution of India and no person can be deprived of this right without following the due process of law. Any State action must satisfy the requirements of Articles 14, 19 21 of the Constitution of India and must be reasonable and non arbitrary. The Courts in such cases will have it well within their mandate under Article 226 to intervene in the said decisions of the Look Out Circular Issuing authorities to prevent such unreasonableness and perversity and in ensuring adequate conformity to both the form and substance of the standards set in the Official Memorandums from which the power to issue LOCs are derived. The writ petition is allowed.

Summary

Issues Involved:
1. Legality of Look Out Circular (LOC) issued against the petitioner.
2. Applicability of Indian law to the petitioner's case.
3. Right to travel abroad under Article 21 of the Constitution of India.

Summary:

1. Legality of Look Out Circular (LOC) issued against the petitioner:
The petitioner challenged the issuance of an LOC by Punjab National Bank (PNB) through the Foreign Regional Registration Office, Bureau of Immigration, arguing that it was arbitrary and illegal. The petitioner contended that he had not committed any offense under Indian law and was not evading any court proceedings in India. The court noted that the LOC was issued despite the petitioner being adjudged bankrupt by the High Court of Hong Kong and his subsequent discharge from bankruptcy. The court concluded that the issuance of the LOC was excessive and without merit, as all proceedings against the petitioner were conducted in Hong Kong and had reached their logical conclusion.

2. Applicability of Indian law to the petitioner's case:
The respondents argued that despite the loan being taken from PNB's Hong Kong branch, the profits and losses were routed to India, and thus Indian law was applicable. They contended that the petitioner's departure could impact public funds and the country's economy. The court rejected this argument, stating that the default in Hong Kong did not constitute an exceptional circumstance affecting India's economic interest. The court emphasized that the purpose of an LOC is to ensure the presence of a person for investigation or court proceedings, which was not relevant in this case as the petitioner had no criminal case in India.

3. Right to travel abroad under Article 21 of the Constitution of India:
The court reiterated that the right to travel abroad is a fundamental human right under Article 21 and cannot be deprived without due process of law. Citing precedents, the court emphasized that any restriction on this right must be reasonable, non-arbitrary, and in compliance with Articles 14, 19, and 21 of the Constitution. The court found that the LOC issued against the petitioner did not meet these standards and was therefore unreasonable and perverse.

Conclusion:
The court allowed the writ petition and quashed the LOC, affirming the petitioner's right to travel abroad. Pending applications, if any, were disposed of.