Purpose Of LOC Not Loan Recovery Particularly When Favourable Decree Obtained: Karnataka HC Suspends LOC Against NMC Health Founder

The Karnataka High Court on Friday suspended the Lookout Circulars (LOCs) issued by Bank of Baroda and Punjab National Bank and the endorsement issued by Bureau of Immigration against founder of NMC Health, Dr Bavaguthu Raghuram Shetty (B R Shetty) and permitted him to travel to UAE.A single judge bench of Justice Krishna S Dixit said, “The writ petition conditionally succeeds, LOC's are suspended. A writ of Mandamus is issued to Bureau of Immigration to permit petitioner to travel forthwith to UAE, if there is no other impediment.” The permission is granted subject to Shetty filing an affidavit in the Registry of the court and respondent banks undertaking as below:1: Petition shall not alienate, incumber or otherwise meddle with any of his properties anywhere in the globe. The expression being property being used in its generic sense. Or any interest whether disclosed or undisclosed, you are barred from transacting in the property and interest in the property. 2: Petitioner shall file undertaking in the form of an affidavit along with two sureties each worth Rs 1 crore that he shall whenever required in any legal proceedings come back to India and shall not leave the country without prior permission of court/tribunal authorities. 3: In the event of any proceedings that may be instituted under provisions of any law or any extradition or rendition proceedings are taken abroad the petitioner shall not resist the same on any grounds whatsoever. Pronouncing the order the court said, “I have referred to American judgement, Australian and English courts judgement.” Further it said “You (Respondents) have already obtained decree/orders of courts for recovery and initiated proceedings for execution, recovery of loan proceedings is not the object of LOC's.” It added,“No criminal case is filed against the petitioner. Therefore, to coerce recovery, already when you have obtained the decree and when decree is put into execution, you cannot hold him. He is an Indian citizen and is entitled to travel abroad and he is more than 80 years old and requires company of wife and children. Therefore I have said he is permitted to travel abroad.” Shetty has promoted several companies in pharmaceutical, hospitality, healthcare and foreign exchange businesses. He stepped down from the Management and handed over the companies to the respective Officers between 2015 and 2017. During late 2019 and early 2020, due to various illegal activities and mismanagement in the companies by the persons in-charge, the companies were unable to service the loans amounts to Rs 2,800 crore, obtained from various banks.This is the second petition filed seeking direction to the banks to recall the LOC by writing to the immigration authorities forthwith or alternatively direct the immigration authorities to allow the petitioner to travel by ignoring the LOC's issued by the respondent bank. It was contended that the petitioner is required to travel abroad for attending the immediate health reasons and court hearings instituted there against him. An earlier petitioner seeking the same prayer was dismissed by the court on February 12, 2021. Appearance: Senior Advocate Prabhuling K Navadgi for Advocate Vanadan P L for Petitioner.Deputy Solicitor General SHANTHI BHUSHAN H for R1. Advocate B PRASANNA KUMAR for R2. Advocate Manu Prabhakar Kulkarni a/w Advocate Dharmendra Chatur for R3. Citation No: 2024 LiveLaw (Kar) 67Case Title: Dr. Bavaguthu Raghuram Shetty and Bureau Of ImmigrationCase No: WP 4385/2023

Purpose Of LOC Not Loan Recovery Particularly When Favourable Decree Obtained: Karnataka HC Suspends LOC Against NMC Health Founder

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Purpose Of LOC Not Loan Recovery Particularly When Favourable Decree Obtained: Karnataka HC Suspends LOC Against NMC Health Founder

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