The Calcutta High Court has recently stayed a Lookout Circular (LOC) issued against a Captain in Merchant Shipping, who is also a Director in a company against which criminal proceedings were initiated by the Central Bureau of Investigation (CBI) for default in payment of loan. The Court opined that such an action would curtail his right to travel abroad for livelihood.
A Bench comprising Justice Prakash Shrivastava and Justice Rajarshi Bharadwaj was adjudicating upon an appeal preferred against a Single Judge order wherein it had been held that diluting the LOC would seriously hamper and prejudice not only the pending proceedings instituted by the CBI but also the recovery process of the Bank.
In the instant case, the petitioner is employed as a Captain in Merchant Shipping and by virtue of which he is required to be on high sea across the globe for at least six months every year. During a time period between March 19, 2012 and July 11, 2012 the appellant was made one of the directors of the company Kaushik Global Logistic Limited (KGLL) which had defaulted in repaying a loan of Rs. 30 crores availed by it from Bank of Baroda.
Owing to the default in payment of loan, criminal proceedings were initiated by the CBI against all the directors of the company on the complaint of the bank. The appellant had subsequently obtained an un-conditional bail in the concerned criminal case. No appeal was preferred by the Bank against the order.
On October 18, 2012, the appellant landed in Kerala upon completion of his latest voyage when he was astonished to note that a LOC had been issued against him by the immigration authorities. The LOC had been issued at the request of the Bank of Baroda which was subsequently extended on the request made by the Bank.
Pursuant to the rival submissions, the Court noted that the day to day conduct of business of the company was done by another accused and that the name of the appellant did not even appear in the charge-sheet. The Court further opined that the issuance of the impugned LOC and the consequential subsequent extension thereof would effect the livelihood of the appellant and the means to repay the bank loan.
"In the present matter the appellant/writ petitioner had travelled overseas countless times and on each occasion returned to the country after the accomplishment of his voyages. Moreover, appellant never evaded any summons or process and had aptly cooperated in all the investigations", the Court observed.
Reliance was also placed on the Calcutta High Court judgment in Manoj Pushkar Toshniwal v. Union of India wherein it had been held that recourse to LOC can be taken by investigating agency in cognizable offences and where the accused is deliberately evading arrest or not appearing in the trial court despite using coercive measures and there is a likelihood of the accused leaving the country to evade trial.
Setting aside the impugned order of the Single Judge and imposing a stay on the LOC, the Court observed,
"This Court is of the view that the Lookout circular issued against the appellant/writ petitioner would interfere with the departure from and arrival at the airports across India, leading to curtailing the appellant's right to travel abroad for livelihood. However, as held in Chandran Ratnaswami v. K.C. Palanisamy & Ors 2013 (6) SCC 740 the appellant is directed to file an affidavit of undertaking before this Court."
Accordingly, the Court directed the appellant to file an affidavit of undertaking before the Registrar General of the High Court and stayed the LOC.
Case Title: Mritunjay Singh v. Union of India & Ors.
Case Citation: 2022 LiveLaw (Cal) 208