Rajendra Kashyap & Ors. v. Union of India & Ors.

1. This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioners- Mr. Rajendra Kashyap, Mr. Anand Kashyap, and Ms. Anita Monnee Kashyap seeking the quashing of the Look-Out Circulars (LOCs) issued against them as also seeking a declaration to the effect that the Office Memorandum dated 27th October, 2010 and all its revised versions, issued by the Respondent No. 1- Ministry of Home Affairs are ultra vires the Constitution of India.

3. The Petitioners were running a well-established business called ‘Kashyap Motors’, which was incorporated in the year 1997. It is the contention of the Petitioners that when on 8th May, 2005, Petitioner No. 1- Mr. Rajendra Kashyap had reached the airport for travelling to Dubai, he was stopped at the airport. At that stage, it was realized that LOCs were issued against the Petitioners.

4. The case of the Petitioners is that they had availed of certain loan facilities from the Respondent No. 4- Bank of Baroda in three loan accounts. In respect of two loan accounts, a one-time settlement (OTS) has already been entered into. As per the said one time settlement, the Petitioners have paid a sum of Rs.11.90 crores in instalments which were agreed upon by the Bank. No-dues certificate has been issued by the Bank on 31st January,

2022.

5. Insofar as the third loan account is concerned, the submission of ld. Counsel for the Petitioners is that in the said loan account, a total amount of Rs.21.67 crores was claimed by the Bank. The Bank has already realized Rs.10.63 crores by sale of an immovable property. All the assets of the Petitioners have been attached. The Bank has also proceeded with CIRP proceedings before the NCLT, recovery petitions before the DRT and three separate personal insolvency petitions under Section 95 of the Insolvency and Bankruptcy Code, 2016 have been filed. It is also the claim of the Petitioners that they have no further assets. In light of the recoveries and the insolvency proceedings, it is the overall submission that the Petitioners cannot be declared as wilful defaulters, considering a substantial amount of loans have already been settled/cleared.

6. Notice was issued in this matter on 25th July, 2022, on which date, Bank of Baroda was asked to obtain instructions. Reply was also directed to be filed on 8th August, 2022. However, no reply has been filed till date. An application was filed seeking permission to travel, which was considered by this Court on 24th August, 2022 and permission was granted to the Petitioner No.1. Thereafter, the Bank has either been erratic in its appearance or has chosen not to file a reply. No FIR or criminal case is pending against the Petitioners and there is no allegation of any cognizable offence having been committed by the Petitioners. Vide order dated 8th December, 2022, permission was again given to Petitioner No.2 to travel abroad. Despite repeated adjournments, the Bank has chosen not to file a reply. The matter continues to remain pending.

7. The Union of India has filed a short affidavit through Mr. Ajay Digpaul, ld. CGSC who has stated that the Union of India has no objection in withdrawal of the LOCs if the concerned Court or the originator i.e., the Bank of Baroda gives permission. The stand of the Union of India is that the LOC was issued in terms of the e-mail received from the Bank of Baroda dated 18th December, 2021. The relevant paragraphs of Union of India’s affidavit are set out below: “4.That the answering respondents respectfully submit that as per record, LOC was issued against the petitioner at the behest of MD & CEO, Bank of Baroda, New Delhi vide E-mail cited 18.12.2021 with the action "Prevent subject from leaving India and inform the originator'. A copy of the said E-mail dated 18.12.2021 is annexed herewith as Annexure R-1.

5. That it is further submitted that the respondent NO. 3/BoI issues LOCs on the basis and in terms of guidelines issued by the respondent no. 1 vide OM. NO. 25016/10/2017-Imm dated 22.02.2021. It is further submitted that as per para 6(G) of the revised LOC guidelines dated 22.02.2021, the legal liability of the action taken by the immigration authorities in pursuance of the LOC rests with the originating agency and not with the Bureau of Immigration

6. That it is further submitted that the opening/issuing the LOC being an executive function, it is very much in domain of UOI to issue such guidelines for ensuring effective and smooth discharge of various Government Functions. It is further submitted that answering respondent no.3/BoI is only the custodian of LOC who maintains LOCs and takes action against LOC subjects at Immigration Check Posts (ICPs) at the behest of originating agency.

7. That it is submitted that answering respondents have no objection in withdrawal of LOC against the petitioner, if the concerned court and above originator directs to do so.”

8. A perusal of the reply which has been filed shows that the LOC has been issued at the instance of Mr. A.S. Chakma, Assistant General Manager, Stressed Asset Management Vertical. Apart from this, there is no other response by the Bank or any of the other authorities.

9. The Court has considered the office memorandum dated 27th October, 2010 and all its revised versions, which as per paragraphs 6(F) and 6(J) of the Office Memorandum issued on 22nd February, 2021 requires a periodic review of the LOC. The said Clauses of the Office Memorandum issued on 22nd February, 2021 has also been considered by this Court in judgement dated 23rd March, 2023 in Manavi Anusha v. Union of India & Anr., 2023:DHC:2214. In the said judgement, this Court had quashed the LOC. The relevant extract of the said judgement is extracted as under: