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TMI Blog2022 (9) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... l Court despite NBWs or other coercive measures and there was a likelihood that they would leave the country to evade trial/arrest. It was intended as a coercive measure to make a person surrender to the investigating agency or Court of law - But where the subject of the LOC is not involved in any cognizable offence, he or she cannot be detained/arrested or prevented from leaving the country. The originating agency can only request that they be informed about the arrival/departure of the subject in such cases. Merely because the word public is used in the exception clause in the OM, it does not elevate a mere default to an exceptional plane. It cannot be said that the departure of the petitioner from the country would adversely impact the economy of the country as a whole and destabilize the entire economy of the country - Since the right to travel abroad flows from Article 21 of the Constitution of India, a very high threshold has to be is mandated to deny such a right to an Indian citizen. Such a threshold is not met in the instant case. In the instant case, when the petitioner is not alleged to have committed any cognizable offence, she could not have been prevented from leaving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss, various lenders submitted their claims against it before the Resolution Professional which were also accepted by the Resolution Professional. The said M/s. SEL Manufacturing Company Ltd. had also given corporate guarantees to various Banks for securing the credit facilities granted to M/s. SEL Textiles Ltd. These guarantees were invoked by the Banks and the said amounts were also claimed by them in the CIRP of M/s. SEL Manufacturing Company Ltd. These amounts were admitted by the Resolution Professional and included in the total claims by all the financial creditors. The resolution plan submitted by a consortium of ARR ESS Industries Private Ltd. and Leading Edge Commercial FZE was accepted by the Resolution Professional on 19.08.2020, and the Committee of Creditors approved it on 29.08.2020. Subsequently, the National Company Law Appellate Tribunal, New Delhi (NCLAT) passed an order on 18.09.2020 and directed reconsideration of the same, and as per the revised voting, by 96.90% vote, the Committee of Creditors approved it. Subsequently, an application was filed under Section 30(6) of the Code for approval of the resolution plan by the NCLT and the same was also approved, and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd she is merely a guarantor for the loan availed by the 2 Companies named above and is not even a principal borrower, and she cannot be prevented from travelling abroad. It is also contended that the petitioner was denied a hearing before issuing the LOCs and thus, there is also a violation of the principles of natural justice. The stand of respondents no.1 to 3 Mr. Satya Pal Jain, Additional Solicitor General of India appearing on behalf of respondent No.1 to 3 has produced before us the request dt.07.12.2021 made by the Indian Bank-respondent No.10 to respondent No.2 for issuing the LOC against the petitioner and others; and a copy of LOC bearing No. 2021423351 issued by respondent No.2 against the petitioner on 08/09.03.2020. Similarly, on 29.11.2020, Bank of Baroda had made a request for opening of LOC against the petitioner. On the basis of the said request, LOC bearing No.2021423351 was issued by respondent No.2. It is his contention that the Banks and the financial institutions are also entitled to seek opening of LOCs against the persons who have defaulted in repaying loans to them as per the Office Memorandum dt.22.11.2018 issued by the Ministry of Home Affairs, and LOCs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CBI, and a letter was written by it on 29.07.2020 for registration of a complaint regarding fraud, cheating and other offences committed by the Directors/Promoters of the said Company. It is stated that the Indian Bank had also filed an OA No.2609 of 2019 before the DRT, Chandigarh against M/s. SEL Manufacturing Company Ltd. for recovery of outstanding dues and that the matter is pending for 01.05.2023. It is also contended that the Indian Bank had filed another OA No.3122 of 2019 before the DRT-III, Chandigarh against M/s. SEL Textiles Ltd., its Directors, Guarantors and the petitioner for recovery of dues. It is stated that instructions were issued by the Ministry of Finance on 22.11.2018 empowering and permitting respondent No.1 to issue LOCs even in those cases which was not covered by the guidelines in larger public interest and the economic interests of India. It is contended that the Indian Bank had acted in a bona fide manner in terms of the protecting the public money by adopting due process of law. It is stated that the petitioner may flee to some other country on some or the other pretext in order to keep away from the reach of the lending Banks and so the Writ Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Indian Bank it is incorrectly stated that she had suppressed the same. Merely on the ground that the petitioner is a guarantor for the above loans taken by the two entities, and there is a default by the said Companies, can the petitioner be prevented from travelling abroad and her fundamental right under Article 21 of the Constitution of India be curtailed? The right to travel abroad has been recognized by the Supreme Court of India in the case of Maneka Gandhi Vs. Union of India (1978) 1 SCC 248 and Satish Chandra Verma Vs. Union of India 2019 SCC online SC 2048 , as falling within the scope of personal liberty enshrined under Article 21 of the Constitution of India. Thus, to deny a person such a right requires a very high threshold. The issuance of the LOCs in respect of the Indian citizens and foreigners was initially governed by an Office Memorandum No.25016/31/ 2010-Imm dt.27.10.2010. In this Office Memorandum reference is made to certain judgments of the Delhi High Court and it stated inter alia as under: a) Recourse to LOC can be taken by investigating agency in cognizable offences under IPC or other penal laws, where the accused was deliberately evading arrest or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the LOC would be valid for a period of one year from the date of issue. There were subsequently amendments made to the Office Memorandum from time to time. Paragraph 8(j) was inserted in the office memorandum dt. 27.10.2010 through another Office Memorandum dt. 05.12.2017 which states: Para 8(j): .. In exceptional cases, LOCs 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 to the sovereignty or security or integrity of India or that the same is detrimental to the bilateral relations with any country or to strategic and/or economic interests of India or if such person is allowed to leave, he may potentially indulge in an act of terrorism or offences against the State and/or that such departure ought not be permitted in the larger public interest at any given point of time. Initially, Managing Directors and Chief Executive Officers of the Public Sector Banks were not authorized to make requests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.29.11.2021 made by the Bank of Baroda (respondent no.13) and the request made on 7.12.2021 by the India bank ( respondent no.10) to respondent No.2 produced before us, show no reason as to why such LOC is being sought against petitioner. So it appears that respondent No.2 has not applied its mind to the request for issuance of LOC made by respondent No.10 and 13 and did not consider whether grounds are disclosed therein which fall within the four corners of the OMs issued in that regard, though it may not be able to go into the merits/demerits of the allegations made against the petitioners by the said entities. It appears that mechanically the respondent No.2 had issued the LOCs at the instance of respondent No.10 and 13 Banks. Similar views have been expressed by this Court in Poonam Paul (1 supra) and in Noor Paul (2 supra). It was further held in those decisions that non supply of the LOC to the subjects of the LOC at the time of issuance of the same and denial of opportunity to the subjects of the LOC, a post-decisional hearing to explain why such LOC issued against them should be withdrawn/cancelled by the Bureau of Immigration (respondent No.2), is arbitrary and illegal, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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