‘Not Accused In Any Crime, Not Shown As Guarantor To Loan’: Karnataka High Court
The Karnataka High Court has permitted a businessman, against whom a look out notice was issued by the Bureau of Immigration in connection with a loan default case, to travel to UAE and Saudi Arabia. This was in the case of Himayath Ali Khan v. Ministry of Home Affairs & Others (WRIT PETITION No.24074 OF 2022) and was presided over by a single judge bench of JUSTICE M NAGAPRASANNA.
FACTS OF THE CASE:
The petitioner is before this Court calling in question a Look Out Circular (‘LOC’ for short) dated 07-03-2022 issued by the 2nd respondent/Bank of Baroda (‘the Bank’ for short) and executed by the 1st respondent/Bureau of Immigration and has sought a consequent direction by issuance of a writ in the nature of mandamus or declaration declaring that the action of the 2nd respondent/Bank in issuing LOC to be arbitrary and illegal and also for other consequential reliefs. The petitioner claims to be having certain business operations at Bangalore in wood products for over 35 years. A Company by name Associate Décor Limited (‘Company’ for short) comes to be registered in the year 2007 under the provisions of the Companies Act, 1956, a company that would deal with wood products in the State of Karnataka. The petitioner claims to have assets and businesses both in India and abroad particularly in United Arab Emirates (‘UAE’) and the Kingdom of Saudi Arabia (‘SA’) for which purpose the petitioner frequently travels both to UAE and SA. The Company had obtained finance from the 2nd respondent/Bank mortgaging a property worth Rs.199/- crores. The petitioner was at the relevant point in time Director of the Company and had not stood as a guarantor to the loan obtained by the Company. According to the averment in the petition the petitioner was only a non-functional Director and there were number of guarantors who stood guarantee to the loan advanced to the Company. When the loan became sticky, consortium of Banks initiated various proceedings against the petitioner as the Company had defaulted in repayment after obtaining finance from several Banks. One such proceeding was instituted before the Debts Recovery Tribunal, Bengaluru by the Bank against the Company for recovery of the amount that was due to be paid to the Bank. The petitioner was not a party to the proceedings. The averment in the entire petition is that the petitioner is a non-Executive Director of the Company as he has nothing to do with the borrowals of the Company. Things standing thus, the petitioner wanted to travel to UAE and SA for business purpose. At that point in time, LOC is issued by the 2nd respondent/Bank on the ground that recovery proceedings before the DRT are pending consideration against the petitioner and the petitioner, if permitted to travel is likely to escape from those proceedings. The petitioner on coming to know that his right to travel has been curtailed by the act of the Bank approached the Bank seeking to withdraw the LOC by bringing to its notice that he has nothing to do with the loan account or the loan amount that was sought and granted to the Company. The LOC, as observed hereinabove, has originated from the 2nd respondent and the reason 6 for such generation of LOC is that DRT proceedings are pending against the Company. On receipt of a requisition from the 2nd respondent/Bank for issuance of LOC, the 1st respondent/Bureau of Immigration issues LOC against the petitioner on 07-03-2022 and curtails his travels. The curtailment of his travel is what drives the petitioner to this Curt raising a challenge to the LOC so issued by the 2nd respondent and executed by the 1st respondent.
JUDGEMENT:
The Court opined that, “The petitioner is authorized to travel to United Arab Emirates and Saudi Arabia for a brief period, which is made subject to filing an affidavit of undertaking before this Court that he would complete his work and come back to the shores of the nation within the time as indicated in the said affidavit from the date he starts his journey. The affidavit of undertaking shall be filed before the Registry of this Court, within one week from today. The affidavit of undertaking once filed would be in force so long as the current LOC issued by the 2nd respondent is operating. The petitioner shall intimate his date of travel and arrival to the originating agency who shall communicate it to the Bureau of Immigration on every occasion. It is not permission but information. Such information is to be given by the petitioner so long as the LOC is in operation.”
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JUDGEMENT REVIEWED BY PRATIKSHYA P. BEURA