Lookout notice needs to be shared with affected party: HC
CHANDIGARH: The Punjab and Haryana high court has held that look out notice (LOC) against a person being probed by an investigating agency, issued by the Union ministry of home affairs (MHA), needs to be communicated to the affected person.
The high court bench of justice MS Ramachandra Rao and Harminder Singh Madaan, directed that in future, MHA, the bureau of immigration and foreign regional registration office shall serve a copy of the LOC and also reasons for issuing it to the affected person as soon as possible after it is issued, and provide a post-decisional opportunity to them. The court also imposed a fine of Rs 1 lakh on the Bank of India, at whose request LOC was issued and a woman, Noor Paul, was stopped from travelling to Dubai in February.
The woman is a former director of M/s Drish Shoes Ltd, which allegedly defaulted on payments to the said bank. She was a guarantor of the loan, taken by the firm. She was to fly to Dubai from Delhi airport on February 22 but was stopped by immigration authorities on grounds of an LOC against her and her family issued on December 28, 2021.
She claimed that she was not given any prior notice or a copy of the LOC. She got selected for a postgraduate MBA programme being offered by the Boston University Questrom School of Business, Massachusetts, US.
She got the seat on 90% scholarship. The programme is to start in August 2022 and her apprehension was that due to the LOC she would not be allowed to fly abroad, as per her counsel Manish Jain. The court found that the woman is not an accused and no criminal proceedings have been initiated against her. It added that LOC could not have been issued against her and at best, immigration authorities could have only given information to the bank about her arrival/departure.“the apprehension authorities might have could be that if a person against whom LOC is issued gets prior information, there is possibility that the person would clandestinely leave the country.”
“…Such a right to travel abroad cannot be deprived except by just, fair and reasonable procedure,” the court said on non-supply of a copy of the LOC at the time she was stopped at the airport for travelling abroad. “non-supply of reasons for issuing of LOC and absence of a postdecisional hearing to the person is not just, fair and reasonable procedure. It is violative of Article 21 (right to personal liberty) of the Constitution of India,” it said. To the argument of large sum of money involved in the dispute, the bench added that quantum of the alleged default by the borrower by itself cannot be the basis for seeking issuance of an LOC. It cannot be said that the departure of the petitioner from country would adversely impact the economy of the ‘country as a whole and de-stabilise the ‘entire economy’ of the country, the court added.
“...Businesses can fail for several reasons such as market conditions, labour unrest, lack of raw material, events such as Covid-19 pandemic, etc. Merely looking at the quantum of loss caused to a banker, it cannot be presumed that there was a fraud committed by the borrower/ guarantor, more so when no criminal case alleging fraud has even been filed against the borrower/guarantor,” the court added. The court quashed the LOC and directed that remarks/ entries against the petitioner be expunged and she be allowed to fly abroad.