MOHIT ARORA V. UNION OF INDIA & ORS.

W.P.(C)/4460/2023

AI Insights

The case involves Mohit Arora, a director at Supertech Realtors Private Limited, who challenged the Lookout Circulars issued against him by the Union Bank of India and Bank of Baroda. These Lookout Circulars were issued following defaults on loans taken by Supertech Realtors and Supertech Limited, which were secured by personal guarantees from Arora. The court examined whether the issuance of these Lookout Circulars was justified, considering the legal framework and precedents regarding the rights of individuals to travel abroad and the circumstances under which Lookout Circulars can be issued. The court found that the mere inability to repay loans, without any accompanying criminal allegations, does not justify the restriction on an individual's right to travel.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 745577 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 12-07-2024
• Assessment Year: misc
• Other Referred Cases: Apurve Goel v. Bureau of Immigration & Anr., Shalini Khanna v. Union of India & Anr., Rajiv Aggarwal v. Union of India & Ors., Prateek Chitkara v. Union of India & Ors., Viraj Chetan Shah v. Union of India & Anr.
• Laws Referred To: Article 21 of the Constitution of India, Recovery of Debts Due to Banks Act, 1993, Insolvency & Bankruptcy Code, 2016, Indian Penal Code
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARUN AGGARWAL
• Assessee Lawyers: TANVEER MIR; SONALI JAITLEY
• Keywords: Bank Fraud; Bank Fraud; Debt Recovery; Economic offences wing; Fundamental Right to Travel; Insolvency; Lookout Circular; Non-performing assets
• Section: 7; 19; 420; 120B; 406

Judgement Text

" W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 1 of 21 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 12th JULY, 2024 IN THE MATTER OF: + W.P.(C) 8073/2021 & CM APPLs. 40938/2021, 40950/2021, 53220/2022 & 17249/2023 MOHIT ARORA ..... Petitioner Through: Mr. Tanveer Ahmed Mir, Ms. Sonali Jaitley, Mr. Jaiyesh Bakhshi, , Mr. Mayank Mishra, Ms. Ria Chanda Tandon, Mr. Kanishk Khullar, Ms. Bhumika Bhatnagar, Mr. Yash Dutt, Ms. Ariana Alhuwalia, Advocates. versus BANK OF BARODA & ORS. ..... Respondents Through: Mr. Arun Aggarwal, Mr. Shivam Saini, Mr. Praful Rawat, Advocates for Bank of Baroda. Mr. Ravi Prakash, CGSC with Ms. Astu Khandelwal, Mr. Taha Yasin, Mr. Yasharth Shukla and Mr. Ali Khan, Advocates for R-2. + W.P.(C) 4460/2023 & CM APPLs. 17133/2023, 17134/2023 MOHIT ARORA ..... Petitioner Through: Mr. Tanveer Ahmed Mir, Ms. Sonali Jaitley, Mr. Jaiyesh Bakhshi, , Mr. Mayank Mishra, Ms. Ria Chanda Tandon, Mr. Kanishk Khullar, Ms. Bhumika Bhatnagar, Mr. Yash Dutt, Ms. Ariana Alhuwalia, Advocates. versus Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 2 of 21 UNION OF INDIA & ORS. ..... Respondents Through: Mr. Anurag Ahluwalia, CGSC with Mr. Kaushal Jeet Kait, GP and Mr. Abhay Singh, Advocates for UoI. Mr. Sandeep Bhuraria, Advocate for R-4. CORAM: HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD JUDGMENT 1. W.P.(C) 8073/2021 has been filed by the Petitioner challenging the Lookout Circular issued against him by the Bureau of Immigration at the request of the Bank of Baroda. 2. W.P.(C) 4460/2023 has been filed by the Petitioner challenging the Lookout Circular issued against him by the Bureau of Immigration at the request of the Union Bank of India. 3. The present judgment is confined only to the Lookout Circulars issued by the Bureau of Immigration at the instance of the Bank of Baroda and the Union Bank of India and this Court is not dealing with the Lookout Circulars which have been issued against the Petitioner at the instance of DCP, Economic Offences Wing, New Delhi vide Reference No.05.02.2021; Lookout Circular issued at the instance of Joint Director, (INV, SFIO), New Delhi; Lookout Circular issued at the instance of Deputy Director, Special Task Force, HQ, Lok Nayak Bhavan vide Reference dated 16.09.2021 and other Lookout Circulars which may have been issued at the instance of other investigating agencies regarding the criminal cases which have been investigated/proceeded ahead by the investigating agencies. 4. The Petitioner states that he is a professional who joined Supertech Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 3 of 21 Limited as a Director in the year 2009. Material on record indicates that Supertech Limited (hereinafter referred to as 'Supertech') is a real estate company undertaking development of residential and commercial projects across India. 5. It is stated that the Petitioner resigned from Supertech Limited on 08.05.2017 and he is currently a Director of M/s Supertech Realtors Private Limited (hereinafter referred to as 'Supertech Realtors')which is a subsidiary company of Supertech Limited. 6. It is stated that the companies had taken credit facilities from various banks including the Bank of Baroda, i.e., Respondent No. 1 in W.P.(C) 8073/2021 and Union Bank of India, i.e., Respondent No. 4 in W.P.(C) 4460/2023 for development of various projects from time to time. 7. Material on record indicates that a Facility Agreement dated 20.12.2012 entered into by the Supertech Realtors Private Limited with Union Bank of India for the term loan of Rs.735 crores wherein the Union Bank of India had granted credit facilities of Rs.300 crores to Supertech Realtors Private Limited for developing integrated commercial-cum- residential project, namely, Supernova situated at Plot No.3, Sector-94, Noida and the Petitioner had given a personal guarantee dated 22.12.2012 to secure the said loan. 8. Material on record indicates that in March, 2014, the Union Bank of India sanctioned financial assistance of Rs.150 crores for setting up of an integrated residential project named 'Eco Village-II, Phase-I' situated at Plot No.GH-01, Sector-16B, Greater Noida (West) and the Petitioner had given a personal guarantee dated 14.03.2014 to secure the said loan. 9. It is stated that Supertech again approached the Bank of Baroda for Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 4 of 21 part financing the construction of Phase-II of the Project 'Eco Village-II' and credit facilities of Rs.200 crores was extended. 10. Material on record further indicates that Supertech and Supertech Realtors availed the credit facilities sanctioned by the Bank of Baroda and Union Bank of India and the Petitioner stood as personal guarantor to the same. Since Supertech and Supertech Realtors started defaulting in repayment of their debts, their accounts have been classified as Non- Performing Assets (NPA) by Union Bank of India and the Bank of Baroda. 11. Material on record indicates that several petitions have been filed by the Banks under Section 19 of the Recovery of Debts Due to Banks, 1993 before the Debt Recovery Tribunal against Supertech, Supertech Realtors and its Guarantors along with petition under Section 7 of the Insolvency & Bankruptcy Code, 2016. 12. Material on record indicates that Original Application being O.A. No.406/2020 has been filed by the Union Bank of India before the Debt Recovery Tribunal-II for recovering the outstanding sum of Rs.247,49,53,596/- against Supertech as well as its Guarantors wherein the Petitioner has been arraigned as Defendant No.4 and the same is pending adjudication. 13. The Union Bank of India also filed an Original Application being O.A. No.713/2019 for recovering the outstanding sum of Rs.46,47,86,461.98/- before the Debt Recovery Tribunal-II, against Supertech as well as its Guarantors, which is pending adjudication. 14. An Original Application being O.A. No.693/2019 has been filed against Supertech Realtors as well as its Guarantors for recovering a sum of Rs.629,43,67,494.85/- where the Petitioner was arraigned as Defendant No.1 Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 5 of 21 and the said application was transferred to Debt Recovery Tribunal-III, Delhi, which is pending adjudication. 15. Similarly, the Bank of Baroda has also initiated proceedings for recovery against Supertech, its Guarantors and Directors, by filing O.A. No.1285/2019. Material on record also indicates that proceedings have been initiated by the Union Bank of India against Supertech under Section 7 of the Insolvency & Bankruptcy Code. The petition has been admitted by the National Company Law Tribunal and CIRP proceedings have been initiated against Supertech and a Resolution Professional has been appointed in the matter. 16. The Assistant Director, Bureau of Immigration has filed an affidavit on 11.01.2023 in W.P.(C) 8073/2021, which indicates that five Lookout Circulars have been opened against the Petitioner. The said Lookout Circulars issued against the Petitioner as on 13.01.2023 reads as under:- \"a. LOC at the behest of MD & CEO, Union Bank of India vide there reference dated 19.06.2021 with the action \"Prevent Subject from leaving India and inform originator\". b. LOC at the behest of MD & CEO, Union Bank of INdia vide there reference dated 03.11.2020 with the action \"Prevent Subject from leaving India and inform originator\". c. LOC at the behest of DCP, Economic Offences Wing, New Delhi vide their reference dated 05.02.2021 with the action \"Detain and handover intercepted person to local police and inform originator\", with FIR No. 78 dated 03.08.2020 under Section 420, 406 and 120B of Indian Penal Code. Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 6 of 21 d. LOC at the behest of Joint director (INV, SFIO) New Delhi vide their reference dated 30.03.2020 with the action \"Prevent Subject from leaving India and inform originator\". e. LOC at the behest of Deputy Director, Special Task Force, HQ, Lok Nayak Bhavan, New Delhi vide their reference dated 16.09.2021 with the action \"Detain and inform Originator\", with FIR No. ECIR/21/STF/2021 dated 09.09.2021. 17. As stated earlier, this Court is only dealing with the Lookout Circulars issued at the instance of Union Bank of India and the Bank of Baroda. 18. The Petitioner places reliance on various judgments passed by this Court to contend that merely because of the inability of the company to repay its debts in which the Petitioner is a Director, Lookout Circular cannot be opened against the Petitioner and the same is violative of the Fundamental Right of the Petitioner to travel abroad under Article 21 of the Constitution of India. 19. This Court in Apurve Goel v. Bureau of Immigration & Anr., W.P.(C) 5674/2023; Shalini Khanna v. Union of India & Anr., W.P.(C) 10951/2022; Rajiv Aggarwal v. Union of India & Ors., W.P.(C) 7093/2022 and various other judgments has consistently held that mere inability to repay the amounts due to Banks cannot result in opening of Lookout Circulars. 20. Lookout Circulars are issued against a person at the instance of any of the agencies mentioned in the Office Memorandums issued by the Ministry of Home Affairs from time to time. 21. Ministry of Home Affairs issued an Office Memorandum dated Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 7 of 21 27.10.2010 laying down the guidelines for issuance of Lookout Circulars. According to the said Office Memorandum dated 27.10.2010, Lookout Circulars could not be opened at the instance of Banks and, therefore, an amendment was sought to the Office Memorandum dated 27.10.2010 and an amended Office Memorandum dated 05.12.2017 was issued and Paragraph No.8 (j) of the Office Memorandum dated 27.10.2010 was amended which reads as under: “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 the 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 in time. Instead of: “In exceptional cases, LOCs can be issued without complete parameters and/or case details CI suspects, terrorists, anti-national elements, etc in larger national interest.” 22. Another Office Memorandum dated 04.10.2018 was issued by the Ministry of Finance, Government of India empowering the heads of Public Sector Banks to issue requests for opening of Lookout Circulars. By virtue Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 8 of 21 of this Office Memorandum, Chairman (State Bank of India), Managing Directors and Chief Executives Officers (MD & CEOs) of all Public Sector Banks could request for opening of LOCs against the persons who are fraudsters and persons who wish to take loans and wilfully default or launder money and then escape to foreign jurisdiction as these actions will not be in the economic interests of India on a larger public interest. 23. Further, another Office Memorandum dated 22.11.2018 was issued by the Ministry of Finance, Government of India regarding empowerment of heads of Public Sector Banks to issue requests for opening of Lookout Circulars which reads as under: “Subject: Empowerment of heads of Public Sector Banks to issue requests for opening Look Out Circulars (LOCs) Dear Sir / Madam, Kindly find enclosed the following, for necessary action: \"(a) A copy of Department of Financial Services (DFS)‟s OM No. 6/3/2018-BO.II dated 04.10.2018 to the Ministry of Home Affairs (MHA), vide which DFS had requested MHA to empower the heads of Public Sector Banks (PSBs) to issue requests for opening of Look Out Circulars (LOCs). (b) A copy of MHA's OM No. 25018/10/2017-Imm dated 12.10.2018, vide which MHA has now made the desired amendment to paragraph 8 (b) of their OM No.25016/31/2010-Imm dated 27.10.2010 by adding sub-paragraph (xv), namely \"Chairman/ Managing Directors/ Chief Executives of all Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 9 of 21 Public Sector Banks\" in the list of officers competent to request opening of LOCs, thereby empowering the heads of PSBs also, as requested by DFS. 2. In this context, it may kindly be noted that: \"(a) Issuance of LOCs in respect of Indian citizens and foreigners is governed by the instructions contained in MHA's OM dated 27.10.2010, as amended from time to time. (b) Paragraph 8 (b) of MHA's OM dated 27.10.2010 lists those authorities of minimum rank, with whose approval the request for opening of LOC must be issued. Pursuant to the amendment vide MHA's OM dated 12.10.2018, the list now includes the Chairman/ Managing Directors/ Chief Executives of all Public Sector Banks. (c) Paragraph 8 (j) of MHA's OM dated 27.10.2010 (amended through MHA's OM dated 05.12.2017) states that “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 the strategic and / or economic interests of India or if such parson is allowed to leave, he may potentially indulge in an act of terrorism or offences against the State and / or that such Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 10 of 21 departure ought not be permitted in the larger public interest at any given point in time. 3. It is requested that the instructions contained in MHA's OM dated 27.10.2010 (as amended by MHA's OMs dated 05.12.2017 and 12.10.2018), vide which the heads of PSBs have now been empowered to issue requests for opening of Look Out Circulars, may be strictly complied with henceforth, so that all persons who are covered under the said amended OM of MHA, including fraudsters and persons who wish to take loans and wilfully default or launder money and then escape to foreign jurisdictions to avoid paying back, are restricted from escaping from the country. MHA's Proforma for issue of LOCs is also enclosed.” (emphasis supplied) 24. Office Memorandum bearing No. 25016/10/2017-Imm (Pt.) dated 22.02.2021 is the last of the guidelines issued by the Ministry of Home Affairs for issuance of Lookout Circulars. The relevant portion of the said Office Memorandum reads as under:- “6. The existing guidelines with regard to issuance of Look Out Circulars (LOC) in respect of Indian citizens and foreigners have been reviewed by this Ministry. After due deliberations in consultation with various stakeholders and in suppression of all the existing guidelines issued vide this Ministry‟s letters/ O.M. referred to in para 1 above, it has been decided with the approval of the competent authority that the following consolidated guidelines shall be followed henceforth by all concerned for the purpose of issuance of Look Out Circulars (LOC) in respect of Indian citizens and foreigners:- xxx Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 11 of 21 (B) The request for opening of LOC must invariably be issued with the approval of an Originating agency that shall be an officer not below the rank of— xxx xv. Chairman/ Managing Directors/ Chief Executive of all Public Sector Banks. xxx (H) Recourse to LOC is to be taken in cognizable offences under IPC or other penal laws. The details in column IV in the enclosed Proforma regarding „reason for opening LOC‟ must invariably be provided without which the subject of an LOC will not be arrested/detained. (I) In cases where there is no cognizable offence under IPC and other penal laws, the LOC subject 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. (J) The LOC opened shall remain in force until and unless a deletion request is received by BoI from the Originator itself. No LOC shall be deleted automatically. Originating Agency must keep reviewing the LOCs opened at its behest on quarterly and annual basis and submit the proposals to delete the LOC, if any, immediately after such a review. The BOI should contact the LOC Originators through normal channels as well as through the online portal. In all cases where the person against whom LOC has been opened is no longer wanted by the Originating Agency or by Competent Court, the LOC deletion request must be conveyed to BoI immediately so that liberty of Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 12 of 21 the individual is not jeopardized. (K) On many occasions, persons against whom LOCs are issued, obtain Orders regarding LOC deletion/ quashing/ suspension from Courts and approach ICPs for LOC deletion and seek their departure. Since ICPs have no means of verifying genuineness of the Court Order, in all such cases, orders for deletion/ quashing/ suspension etc. of LOC, must be communicated to the BoI through the same Originator who requested for opening of LOC. Hon'ble Courts may be requested by the Law Enforcement Agency concerned to endorse-/convey orders regarding LOC suspension/ deletion/ quashing etc. to the same law enforcement agency through which LOC was opened. (L) In exceptional cases, LOCs can be issued even in such cases, as may 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) above, 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 the 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 in time.\" (emphasis supplied) 25. Clause L of the Office Memorandum of 2021, as quoted above, states that in exceptional cases, an LOC can be issued at the instance of the Bank if Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 13 of 21 the authorities are of the view that letting the person to depart from the country will be detrimental to the economic interests of India. 26. The Courts have also laid down the scope of the term 'detrimental to the economic interest of India' used in Office Memorandum bearing No.25016/10/2017-Imm (Pt.) dated 22.02.2021, which is the last of the guidelines issued by the Ministry of Home Affairs for issuance of Lookout Circulars, which cannot be resorted in every case of Bank default and the citizen's right to travel abroad, which is a Fundamental Right guaranteed under Article 21 of the Constitution of India, cannot be taken away and persons cannot be deprived of their liberty and right to travel abroad only because of their inability to repay the amounts due to Banks. 27. The scope of the term ‘detrimental to the economic interest of India’ has been dealt with by the various High Courts in various judgments. A Coordinate Bench of this Court in Prateek Chitkara v. Union of India & Ors., 2023 SCC OnLine Del 6104, has observed as under: “47. The question before this court is, whether clause L of the Office Memorandum of 2021, would be legally valid, especially in respect of the phrase “detrimental to the economic interests of India” and in respect of other clauses which permit indefinite continuation of look-out circulars, non-communication of reasons either prior or post issuance of the look- out circular and extension of look-out circular to such individuals who in the opinion of the authorities ought not to be permitted to travel on the ground of it being detrimental to the economic interests of India. xxx 57. In Mr. Chaitya Shah v. Union of India [2021 : BHC-AS : 16392-DB.] , a learned Division Bench of Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 14 of 21 the Bombay High Court was dealing with a case where a substantial amount had been invested in a company called M/s. Gitanjali Gems of Rs. 50 crores and various banking operations and transfer of money was found. The court observed that the words “economic interest of India” and “larger business interest” are not empty words. The relevant paragraph of the said judgment is extracted below: “32. In the present case the Serious Fraud Investigation Office is investigating into the affairs of the aforementioned companies and its investigation overrides the investigations by other investigating agencies. Therefore recourse to look-out circular was not unfounded as the petitioner has definite connection with the investigation as discussed hereinabove. From the facts of the case it is clear that clause (L) of these guidelines clearly covers the petitioner's case as it is detrimental to the „economic interests of India‟ and that his departure ought not to be permitted in the larger public interest. The words „economic interests of India‟ and „larger public interest‟ are not empty words in the context of the present case because as mentioned earlier the petitioner is directly involved and was concerned with considerable shareholding of M/s. Gitanjali Gems Limited. It involves huge amount of almost Rs. 50 crores which requires serious explanation from the petitioner in the background of the allegations that the money belonged to Mr. Mehul Choksi, who has left India and has not returned back. This transaction is an important part of the entire fraud involving huge amount. Sheer magnitude of the offence and its spread through various banking operations and transfer of money through different modes and different countries shows that it has definitely affected the Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 15 of 21 economic interests of India and the larger public interest is definitely involved and affected. Therefore, we do not find that issuance of look- out circular against the petitioner was unnecessary.” 58. In Vishambhar Saran v. Bureau of Immigration (W.P. No. 10241(W) of 2020, decided on December 24, 2021) [2021 SCC OnLine Cal 3074.] , the Calcutta High Court held that vague allegations of a person's travel being detrimental to the economic interest of the country or the quantum of the alleged default (Rs. 351 crores in this case), is not sufficient to issue a look-out circular thereby restricting the personal liberty of a person to travel. In the said petition, no civil or criminal proceedings were initiated against the petitioner and thus the petitioner was allowed to travel. This view was echoed in Vishambhar Saran v. Bureau of Immigration (W.P.A. No. 6670 of 2022, decided on January 31, 2023). 59. In Vikas Chaudhary v. Union of India (W.P. (C) No. 5374 of 2021, decided on January 12, 2022) [(2022) 442 ITR 119 (Delhi).] , the petitioner was a businessman engaged in the export of garments to a number of foreign countries. A look-out circular was issued against the petitioner on the ground of undisclosed foreign assets and interests in foreign- entities liable for penalty and prosecution under the Income-tax Act, 1961, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of tax Act, 2015, as also the proceedings under the Prevention of Money Laundering Act, 2002, having been commenced against the petitioner. The petitioner did not hold any foreign assets and any undisclosed assets. xxx Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 16 of 21 61. The court noted that the phrase “detrimental to the economic interests of India” was introduced for the first time in the Office Memorandum (hereinafter “OM”) dated December 5, 2017. The said phrase did not exist in the previous Office Memorandum dated October 27, 2010. However, it continues to exist in all the subsequent Office Memoranda. In this context, the court observed as under (page 137 of 442 ITR): “36. However, the matter does not end here and the crucial issue which needs to be now determined is as to whether the clause „detrimental to the economic interests of India‟ introduced vide the amendment in 2017, with a specific rider that the same would be used only in exceptional circumstances, could have, in the facts of the present case, been resorted to, for issuing the impugned look-out circular, as also whether the impugned look-out circular could be continued for the last almost three years without any proceedings under the Penal Code, 1860 or any other penal law being initiated against the petitioner. It has to be kept in mind, that the issuance of a look-out circular necessarily curtails the rights of an individual to travel abroad and therefore, I am of the view, that for invocation of this clause, which, in any event, is meant to be used only in exceptional circumstances, a mandatory precondition would be a formation of a reasonable belief by the originating authority that the departure of an individual would be „detrimental to the economic interests of India‟ to such an extent that it warrants curtailment of an individual's fundamental right to travel abroad… xxx 39. Merely because the Office Memorandum dated December 5, 2017 permits the issuance of a Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 17 of 21 look-out circular, in exceptional circumstances, even when the individual is not involved in any cognizable offence under the Penal Code, 1860 or any other penal law, it has to be remembered that this power is meant to be used in exceptional circumstances and not as a matter of routine, it must therefore, be interpreted in a manner that indicates an offence of such a magnitude so as to significantly affect the economic interests of the country. Mere suspicion of a person opening bank accounts in other countries and of investing in a foreign company cannot, in my view, be accepted as the basis for holding that the petitioner being allowed to travel abroad would be „detrimental to the economic interest of India‟, when it is undisputed that this suspicion has remained a suspicion for such a long period of almost three years.” 62. Thus, the conclusion of the court was that exceptional circumstances could exist even if a person was not involved in any cognizable offence under the Penal Code, 1860 or under any other penal law. In the said petition, the look-out circular was quashed by the court. xxx 82. The term “detrimental to economic interest” used in the Office Memorandum is not defined. Some cases may require the issuance of a look-out circular, if it is found that the conduct of the individuals concerned affects public interest as a whole or has an adverse impact on the economy. Squandering of public money, siphoning off amounts taken as loans from banks, defrauding depositors, indulging in hawala transactions may have a greater impact as a whole which may justify the issuance of look-out circulars. However, issuance of look-out circulars Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 18 of 21 cannot be resorted to in each and every case of bank loan defaults or credit facilities availed of for business, etc. Citizens ought not to be harassed and deprived of their liberty to travel, merely due to their participation in a business, whether in a professional or a non-executive capacity. The circumstances have to reveal a higher gravity and a larger impact on the country.” (emphasis supplied) 28. It is well settled that merely because the Office Memorandum permits the issuance of a lookout circular in exceptional circumstances, even when an individual is not involved in any offence under the IPC or any other penal law, the said power should be used in exceptional circumstances and not as a matter of routine. 29. This Court in Apurve Goel v. Bureau of Immigration & Anr., W.P.(C) 5674/2023, has held as under:- \"22. The Look Out Circulars cannot be opened merely on the request of the banks. There has to be some application of mind by the authority concerned opening the Look Out Circular since the opening of Look Out Circular results in restraining a person‟s right to travel abroad. The authority opening the Look Out Circular must satisfy itself that the departure of a person against whom Look Out Circular has been opened would be detrimental to the sovereignty or security or integrity of India or that the same is detrimental to the bilateral relationship with any country or to the economic interests of India or departure of such a person ought not be permitted in the larger public interest at any given point in time.\" 30. It is well settled that mere inability to pay money without there being a criminal case cannot be a reason to take away the Fundamental Right guaranteed under Article 21 of the Constitution of India. Right to travel Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 19 of 21 abroad has been held to be a Fundamental Right under Article 21 of the Constitution of India which cannot be taken away in an arbitrary and illegal manner. 31. In Maneka Gandhi v. Union of India, (1978) 1 SCC 248, the Apex Court has held as under: \"5. …Thus, no person can be deprived of his right to go abroad unless there is a law made by the State prescribing the procedure for so depriving him and the deprivation is effected strictly in accordance with such procedure. It was for this reason, in order to comply with the requirement of Article 21, that Parliament enacted the Passports Act, 1967 for regulating the right to go abroad. It is clear from the provisions of the Passports Act, 1967 that it lays down the circumstances under which a passport may be issued or refused or cancelled or impounded and also prescribes a procedure for doing so, but the question is whether that is sufficient compliance with Article 21. Is the prescription of some sort of procedure enough or must the procedure comply with any particular requirements? Obviously, the procedure cannot be arbitrary, unfair or unreasonable. This indeed was conceded by the learned Attorney-General who with his usual candour frankly stated that it was not possible for him to contend that any procedure howsoever arbitrary, oppressive or unjust may be prescribed by the law….” 32. A Division Bench of the High Court of Bombay in a batch of writ petitions vide Judgment dated 23.04.2024 in Viraj Chetan Shah v. Union of India & Anr., W.P.(C)719/2020 etc. has quashed Clause 8(b)(xv) of the Office Memorandum dated 27.10.2010 bearing O.M. 23016/31/2010-Imm. equivalent to Clause 6(B)(xv) of the O.M. dated 22.02.2021 bearing O.M. Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 20 of 21 25016/10/2017-Imm.(Pt.) whereby the Chairman/Managing Director/Chief Executives of all Public Sector Banks could request for opening of an LOC. The effect of the said judgment is that the Chairman/Managing Director/Chief Executives of the Public Sector Banks cannot make a request for issuance of LOC. 33. As stated above, this Court is not dealing with the Lookout Circulars which have been issued against the Petitioner at the instance of DCP, Economic Offences Wing, New Delhi vide Reference No.05.02.2021; Lookout Circular issued at the instance of Joint Director, (INV, SFIO), New Delhi; Lookout Circular issued at the instance of Deputy Director, Special Task Force, HQ, Lok Nayak Bhavan vide Reference dated 16.09.2021 and other Lookout Circulars which may have been issued at the instance of other investigating agencies regarding the criminal cases which have been investigated/proceeded ahead by the investigating agencies. 34. No doubt an FIR has been registered against the Petitioner but that alone cannot be a reason for continuing the Lookout Circular issued at the instance of the Banks and more particularly in view of the judgment passed by the Division Bench of the Bombay High Court in Viraj Chetan Shah (supra). 35. In view of the above discussion, this Court is inclined to quash the Lookout Circulars issued against the Petitioner at the instance of Union Bank of India and Bank of Baroda as the same cannot be permitted to sustain and the same are hereby quashed. 36. It is made clear that this Court has not made any observation regarding the Lookout Circulars which have been issued against the Petitioner at the instance of other investigating agencies. It is also made Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified W.P.(C) 8073/2021 & W.P.(C) 4460/2023 Page 21 of 21 clear that the Petitioner has not made out any argument with regard to quashing of the Lookout Circulars issued against him by the investigating agencies and arguments have been advanced by the Petitioner only qua the Lookout Circulars issued at the instance of Union Bank of India and Bank of Baroda, which alone are the subject matter of the instant writ petitions. 37. With these observations, the writ petitions are allowed. Pending application(s), if any, stand disposed of. SUBRAMONIUM PRASAD, J JULY 12, 2024 hsk Digitally Signed By:RAHUL SINGH Signing Date:15.07.2024 16:18:17 Signature Not Verified "