The Calcutta High Court allowed a writ petition filed against the communication made by the bank to the Immigration Authorities, dated August 6, 2021, and the Look Out Circular (LOC) issued in terms thereof in respect of the petitioner. The Court observed that only in exceptional cases, LOCs can be issued without complete parameters and/or case details against CI suspects, terrorists, and anti-national elements, etc., in the larger national interest.
Brief Facts:
MHA’s request was forwarded by the Ministry of Finance to the banks “advising” that when asked by the Courts, the bank may furnish the LOC request that they had sent to the BOI. It was further observed in the said communication of the Ministry of Finance that the clients may only be informed through a separate letter that the bank has requested for LOC issuance against the client.
The Respondent-Bank issued a LOC against the petitioner-client. The sole reason cited by the Bank was that the petitioner was a promoter and guarantor of a Non-Performing Account of the respondent-Bank. No other ground was disclosed in the said communication for the issuance of LOC. Hence, the petitioner is before the court assailing the same.
Contentions of the Respondent:
The Learned Counsel for the Respondent-Bank placed reliance on a document annexed to the report, a communication issued by the Deputy Director, Ministry of Finance, Government of India, instructing the banks not to share LOCs issued by the BOI with anyone and further advising the banks that banks may furnish only the LOC request that they had sent to BOI upon being asked to do so by the Court; however, the same may not be shared with anyone except the Court. As such, it was submitted that the communication has been handed over in Court in a sealed envelope.
The Counsel further argued that subsequent to the Issuance of the LOC, the petitioner was declared to be a willful defaulter. It was also added that the declaration of the account of the petitioner with the bank as NPA, which was the ground of the communication for issuance of LOC, still subsists, having taken place originally in the year 2012.
Observations of the Court:
The Court noted that although the learned counsel for the Bank sought to make out a case before this Court that the limited space provided in the form does not accommodate elaborate reasons for such an issuance, such an excuse cannot be accepted, since the paucity of space in the proforma issued by the Government for such request, which is merely of representative nature, could not be a determinant of the grounds to be cited by the bank. The bank, if so willing, could always give more reasons in the space provided, even adhering to the format in question.
The Court observed that the LOC was issued mechanically by the concerned department of the Government on the premise of the communication of the bank, which only speaks about the petitioner being a promoter and guarantor of an NPA of the bank. Such reason, per se, cannot be a valid ground for taking the serious step of issuance of a LOC against a person, which interdicts and restrains the personal liberty of a citizen of India. The Court said that only in exceptional cases, LOCs can be issued without complete parameters and/or case details against CI suspects, terrorists, and anti-national elements, etc., in the larger national interest. No exceptional case has been made out by any of the respondent authorities in the present case. LOC cannot be issued by a bank merely on the ground that the person is a promoter and guarantor of an NPA of the bank
The decision of the Court:
The Calcutta High Court, allowing the petition, held that the communication made by the bank to the Immigration Authorities and the Look Out Circular (LOC) issued in respect of the petitioner is set aside.
Case Title: Chandrakant Khemka vs The Union of India & Ors.
Coram: Hon’ble Justice Sabyasachi Bhattacharyya
Case no.: WPA No. 15196 of 2023
Advocate for the Petitioner: Mr. Sankarsan Sarkar
Advocate for the Respondents: Mr. Arjun Mookerjee
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