Saurabh Malik
Chandigarh, October 8
The Punjab and Haryana High Court has made it clear that banks cannot seek the issuance of lookout circulars (LOC) against persons by claiming that the country’s economic interests would be affected following non-payment of dues by them. The argument could not be accepted since the amount of loan default, not in the country’s economic or larger public interest, was not mentioned in the office memorandums issued by the Ministry of Home Affairs.
What Bench said
‘A person cannot be detained, arrested or prevented from leaving the country if not involved in any cognizable offence’
The Bench of Justice MS Ramachandra Rao and Justice Harminder Singh Madaan asserted: “When they do not themselves draw any line about the quantum of default by a borrower to a financial institution, which would be considered detrimental to the economic interests of India, and a quantum of default which would not fall in the said category, the fundamental right to travel abroad guaranteed by Article 21 of the Constitution of India cannot be curtailed by the respondent-Union of India by seeking the issuance of an LOC.”
The Bench also made it clear that “the subject of the LOC” could not be detained, arrested or prevented from leaving the country if not involved in any cognizable offence. The “originating agency” could only request for information about the arrival/departure of the “subject” in such cases.
The directions came on a petition against the Union of India and respondents by the guarantor to loans granted by banks to two companies, of which the petitioner’s husband and brother were the promoters. Appearing on her behalf, senior counsel Anand Chhibbar with advocate Shikhar Sarin prayed for quashing of the LOCs issued against her by the Bureau of Immigration at the instance of the banks. They contended that the right to travel abroad was a facet of Article 21 of the Constitution of India. Besides this, she was neither involved in criminal prosecution, nor was named as an accused in any FIR. She was merely a guarantor and not the principal borrower.
After hearing rival contentions and going through the record, the Bench asserted the LOC could be issued by the respondent banks, amongst other authorities, for cognizable offences under the Indian Penal Code or any other penal laws where the accused deliberately evaded arrest or did not appear before the trial courts despite the issuance of non-bailable warrants, or in the likelihood leaving the country to evade trial/arrest.
Allowing the plea, the Bench added the petitioner was not accused of committing any cognizable offence. As such, she could not have been prevented from leaving the country by the respondents by issuing the LOCs. Such an action was clearly violative of the office memorandums dated October 27, 2010, and February 22, 2021.
