2020 (2) TMI 1063 - HC - Money Laundering

Preventing the petition from travelling abroad - Look Out Circular (LOC) having been issued against the petitioner - allegation against the petitioner, as a director of a company against which there were certain allegations of default of a loan given by the respondent no. 3 Bank - Prevention of Money Laundering Act - HELD THAT - A bare perusal of the contract of employment of the petitioner, annexed as annexure P2 at page 29, shows that the outer limit within which the petitioner has to returned in India is 5 months from the commencement of the date of his voyage. As such, in the present case there is little or no scope for the petitioner to remain out of India after the said period - That apart, in the present case, the travels sought by the petitioner are not even for luxury but to maintain his livelihood, since he is a sailor by occupation and in the event he does not honour the contract of employment, he may also face financial consequences for that and lose his regular income. Further, in view of the CBI itself having discharged the petitioner from the criminal case initiated against the petitioner along with others, and such order being affirmed in revision, there is no pending allegation of offence under the Indian Penal Code or any penal statue, as contemplated in the Guidelines regarding issuance of Look Out Circulars, which can prevent the petitioner from travelling abroad - The financial default which has been alleged by the Bank, ipso facto, is not a good ground for issuance of look out notice or at least preventing the petitioner from leaving the country. Since the Bank has already taken steps as per the appropriate law governing such loans and defaults relating thereto and already an existing attachment order is there, such order operates as sufficient security for the Bank for the time being. Moreover, although by virtue of the current amendments to the Guidelines, offences which affect adversely THE economic interest of the country as a whole would be the closest charge which could be attracted in the present case for restraining the petitioner from his travels. Accordingly, since extensive arguments were extended at this stage of deciding interim prayers, such arguments had to be dealt with and this elaborate order had to be passed. However, the writ petition cannot be disposed of at this juncture in view of the respondents praying for opportunity to file their affidavit in opposition. Yet, subject to filing of the undertaking, the petitioner s right to travel abroad has to be opened up - Accordingly, the respondents are directed to file their affidavit in opposition within four weeks from date.

Issues involved:
1. Preventing a sailor from leaving India due to a Look Out Circular (LOC) issued by a bank.
2. Legal justification for preventing the sailor from traveling abroad.
3. Impact on personal liberty and right to profession of the sailor.
4. Arguments regarding financial defaults and issuance of LOC.
5. Consideration of the sailor's contract of employment and need to travel for livelihood.
6. Examination of legal grounds for preventing the sailor from leaving the country.
7. Proposed solution of filing an undertaking for the sailor to travel abroad.

Analysis:

1. The primary issue in this case revolves around the petitioner, a sailor, being prevented from leaving India due to a Look Out Circular (LOC) issued against him by a bank. The petitioner, despite having a contract to work on a merchant vessel, was stopped by immigration authorities based on this LOC.

2. The legal justification for preventing the sailor from traveling abroad was contested by the petitioner's counsel, arguing that the LOC was issued at the request of the bank due to financial defaults. However, the petitioner's discharge from a criminal case and the absence of pending allegations raised questions about the validity of restricting his movement.

3. The petitioner's counsel emphasized the impact on personal liberty and the right to choose a profession, citing constitutional rights that should not be curtailed without valid reasons. The petitioner's intention to travel for work, as evidenced by the employment contract, highlighted the necessity of allowing him to leave the country for livelihood.

4. Arguments regarding financial defaults and the issuance of LOC were presented by both parties. While the bank's counsel justified the LOC based on financial defaults and the bank's security concerns, the petitioner's counsel contested that the existing attachment order provided sufficient security.

5. The examination of the sailor's contract of employment revealed the time constraints within which he needed to return to India, emphasizing the importance of allowing him to travel for work purposes. The court acknowledged the petitioner's need to maintain his livelihood as a sailor and the potential financial consequences of not honoring his employment contract.

6. Legal grounds for preventing the sailor from leaving the country were scrutinized, with the court emphasizing that mere financial defaults may not justify restricting personal liberty. The court highlighted the need for a significant economic offense to warrant such restrictions, which was not sufficiently established in this case.

7. To address the concerns raised, the court proposed a solution where the sailor could file an undertaking committing to return to India within a specified period. This undertaking, along with providing contact details for accessibility during travel, was seen as a measure to ensure the petitioner's return and alleviate the bank's apprehensions.

In conclusion, the court directed the respondents to file their affidavit in opposition while restraining them from preventing the petitioner from traveling abroad, subject to the petitioner filing the required undertaking. This detailed analysis highlights the complex legal considerations involved in balancing personal liberties, economic interests, and the right to work in cases of LOC issuance and travel restrictions.

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