Patna High Court
Abhijeet Kumar SinghversusThe Union of India
- Decided
- Disposal
- ALLOWED
- Bench
- AJIT KUMAR
Holding
The Court held that the Look Out Circular and the passport cancellation were illegal and unsustainable as there was no cognizable offence against the petitioner and the bank lacked jurisdiction to requisition the LOC, thereby quashing both.
Summary
The petitioner, a director and guarantor of a defaulting company, challenged a Look Out Circular (LOC) and a passport endorsement marking his passport as “cancelled without prejudice” that barred his travel abroad. He argued that the LOC was issued mechanically at the request of Canara Bank without any cognizable offence against him and that the bank lacked authority under Ministry of Home Affairs guidelines to requisition such a circular. The respondents, including the Union of India and Canara Bank, contended that the measures were necessary to protect public money and that the petitioner’s pending criminal investigation justified travel restriction. The Court examined the applicable guidelines, the absence of a charge‑sheet against the petitioner, and prior judgments quashing bank‑initiated LOCs in similar circumstances. It held that the LOC and passport cancellation were illegal, unsustainable, and beyond the bank’s jurisdiction, and therefore set them aside, imposing conditions on the petitioner for future cooperation and disposing of the writ petition.
Issues considered
- Whether the Look Out Circular issued at the request of Canara Bank is lawful and within the jurisdiction of the originating agency.
- Whether the passport endorsement cancelling the petitioner’s passport can be quashed in the absence of a cognizable offence.
- Whether the bank has authority under the Ministry of Home Affairs Office Memorandum to requisition a LOC for a civil default.
- Whether the petitioner, not charge‑sheeted, can be barred from international travel under the Passport Act, 1967.
- Whether the requisition made by the Managing Director of Canara Bank complies with the SARFAESI Act, 2002 and related guidelines.
Legislation cited
- Bhartiya Nagrik Suraksha Sanhita, 2023 — s. 358
- Code of Criminal Procedure, 1973 — s. 190(1)(a)
- Indian Penal Code — s. 120B, 420
- Passport Act, 1967
- SARFAESI Act, 2002 — s. 13(2), 13(4), 14
Subjects
- Look Out Circular
- passport cancellation
- SARFAESI Act
- CBI investigation
- NPA
- financial default
- constitutional rights
- Article 19
- Article 20
- jurisdiction
- bank recovery
- civil writ jurisdiction
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.4392 of 2026
======================================================
Abhijeet Kumar Singh Son of Shri Arjun Singh, Resident of Village-
Rukanpura, Bailey Road, Near Singh Petrol Pump, Police Station-Rupaspur,
District-Patna.
... ... Petitioner/s
Versus
1. The Union of India through its Home Secretary, Ministry of Home Affairs,
Government of India, North Block, New Delhi-110001.
2. The Home Secretary, Ministry of Home Affairs, Government of India, North
Block, New Delhi-110001.
3. The Foreigners Regional Registration Officer (FRRO), Bureau of
Immigration, Ministry of Home Affairs, Government of India, East Block-
VIII, Level-V, Sector-1, R.K. Puram, New Delhi 110066, through Director
General, Revenue Intelligence, New Delhi.
4. The Canara Bank through its Managing Director - cum Chief Executive
Officer having its Office at 112, J.C. Road, P.S.-J.C. Nagar, Bengaluru, PIN
Code - 560002.
5. The Deputy General Manager (DGM), Canara Bank, Circle Office Patna,
3rd Floor, Luv Kush Tower, Exhibition Road, P.B. No. 195, Salimpur Ahra,
Golambar, Patna-800001.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Sanjeev Ranjan
For the Respondent/s : Mr.Additional Solicitor General
======================================================
CORAM: HONOURABLE MR. JUSTICE AJIT KUMAR
ORAL ORDER
8 04-05-2026 Heard Mr. Sanjeev Ranjan, learned counsel for the
petitioner, Mr. Rajan Ghoshrave, learned counsel for the Canara
Bank and Mr. Anand Kr. Ojha duly assisted by Ms. Kalpana,
learned counsel for the Union of India.
2. The present writ petition has been filed seeking the
following reliefs:
i. For issuance of an appropriate writ,
order or direction in the nature of certiorari
for quashing the illegal and arbitrary
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
2/32
action of the respondent no. 3 in making an
adverse endorsement / remark in the
passport of the petitioner marking it as
"cancelled without prejudice" and thereby
restraining his international travel without
authority of law which action of the
respondent no.3 is illegal, arbitrary and
unsustainable.
ii. For issuance of an appropriate
writ, order or direction, in the nature of
Mandamus that upon quashing the adverse
remark/ endorsement of cancellation
without prejudice, the respondent may be
directed to remove the said endorsement
forthwith and permit the petitioner to travel
to the United States of America for the
purpose of joining his employment,
forthwith.
iii. For issuance of an appropriate
writ, order or direction, in the nature of
certiorarified mandamus, directing the
respondents to produce before this Hon'ble
Court the Look Out Circular / Look Out
Notice issued by the Bureau of Immigration
at the instance of Canara Bank and upon
such production, issue a writ in the nature
of certiorari for quashing the same as the
issuance thereof is illegal, arbitrary and
without authority of law and consequently,
restrain the respondents from in any
manner interfering with the fundamental
right to travel outside India. petitioner's
iv. For any other relief / reliefs to
which the petitioner is found entitled in the
facts and circumstances of the case.
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
3/32
Additional prayer made through Interlocutory Application
after service of the Look Out Circular, the following
reliefs were incorporated by the learned counsel for the
petitioner, which are as follows:-
v. For a writ, order or direction in the
nature of certiorari to quash the Look Out
Circular bearing No. 2024410271 dated
30.03.2024, as the same has been issued in
a mechanical manner without disclosing the
grounds for opening the LOC. Thus, the
issuance of the LOC is arbitrary, illegal,
and unsustainable in law.
vi. For a writ, order or direction in the
nature of certiorari to quash the requisition
issued in Appendix-II by the Managing
Director-cum-Chief Officer of Canara Bank
for opening of the LOC, which does not
satisfy the grounds prescribed under the
Office Memorandum dated 22.02.2022, and
therefore, the said requisition is illegal,
arbitrary, and wholly without jurisdiction.
3. The factual matrix of the case is that the
family of the petitioner was engaged in the business of operating
flour mill through duly incorporated and registered in the year,
2007 under the name of M/s Maruti Nandan Food Products
Private Limited, and in the year 2011, petitioner was inducted
as director holding 28.5% of the shareholding, whereas his elder
brother holds 71.5% of the shares in the said company. In
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
4/32
between 2007 and 2013, the company demonstrated strong
creditworthiness through successive loan takeovers by
nationalized banks, starting with a Rs. 4 Crore term loan from
Allahabad Bank. In 2010, the account moved to the Bank of
India with a sanctioned term loan of Rs. 4.39 Crores and a Rs. 6
Crore cash credit facility. On 29.06.2013, the Petitioner
executed a Power of Attorney authorizing his father to act as
Director and manage loan facilities with Canara Bank. By
18.12.2015, a previously mortgaged property was sold via
public auction by Vijaya Bank, a fact that later became central
to allegations of non-disclosure in the CBI FIR. In 2013, Canara
Bank took over the account, initially providing a Rs. 10 Crore
cash credit limit and a Rs. 4 Crore term loan, which were later
enhanced to Rs. 17 Crores and Rs. 6.5 Crores, respectively.
These successive appraisals by different financial institutions
underscored the company's initial financial viability and sound
operational health.
4. Subsequently, the company's financial stability
said to have been severely compromised following the
economic impact of demonetization in November 2016 and the
transition to the GST regime in 2017. These structural shifts
created a liquidity crunch and disrupted the working capital
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
5/32
cycle, leading to a substantial downturn in business operations.
Consequently, the company struggled to service its interest
instalments, resulting in the loan account being classified as a
Non-Performing Asset (NPA) on March 1, 2017. In response,
Canara Bank initiated recovery proceedings for recovery of the
alleged outstanding dues, via O.A. No. 540 of 2018 before the
Debt Recovery Tribunal (DRT), Patna, which was subsequently
allowed by the Learned Tribunal and recovery proceeding is
pending before the Recovery Officer.
5. Parallel to the DRT proceedings, the bank
invoked the SARFAESI Act for recovery of the alleged
outstanding dues, issuing demand notice under Section 13(2)
and followed by a possession notice under Section 13(4).
Subsequently, the Bank approached the District Magistrate,
Patna for taking physical possession of the residential property
belonging to the petitioner’s father under Section 14. The
secured assets were thereafter put to auction sale by the Bank.
However, the said auction sale proceedings were vitiated by
several legal and procedural infirmities, whereupon the learned
Debt Recovery Tribunal, Patna was pleased to stay the operation
of the e-auction sale.
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
6/32
6. To secure the loans, the family had mortgaged
18 immovable properties, in which the petitioner holds an
undivided share. While the bank attempted to auction these
assets, the process faced legal challenges at the DRT due to
procedural infirmities. A criminal investigation by the CBI (FIR
No. RC0232023A0010-Pat) dated 22.11.2023 at Police Station
CBI/ACB, Patna, Bihar, under Sections 120B read with 420 of
the Indian Penal Code against the company, namely M/s Maruti
Nandan Food Products Private Limited and its Directors,
Guarantors and Mortgagors. (Annexure-P/4). In the said FIR,
the father, mother and brother of the petitioner have been
arraigned as accused persons. However, the investigation found
no evidence of siphoning or diversion of funds or any wrongful
gain accruing to the petitioner. The CBI did not find any
material indicating diversion of funds or mismanagement in the
affairs, operations or the conduct of the company. It was noticed
during the course of investigation that the only irregularity
noted involved a single property in Village Balbatra
admeasuring 47.5 decimals (valued at ~Rs. 7.5 Lacs) which had
a prior undisclosed mortgage with Vijaya Bank and was sold in
public auction in proceedings before the DRT on 18.12.2015.
7. The CBI chargesheet (Annexure-P/5)
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
7/32
ultimately did not find the petitioner involved in any
wrongdoing, listing him in Column No. 12 as a person not
charge-sheeted, while charges were filed against the Company,
Arjun Singh and Abhimanyu Kumar Singh. Subsequently, upon
completion of investigation, the police report/charge sheet was
submitted before the Learned Exclusive Magistrate, Central
Bureau of Investigation, Patna, who was pleased to take
cognizance under Section 190(1)(a) of the Code of Criminal
Procedure, 1973 vide order dated 15.01.2025 passed in Special
Case No. 4 of 2024 for the offences punishable under Section
120B read with Section 420 of the Indian Penal Code, 1860
against Shri Arjun Singh, Shri Abhimanyu Kumar Singh and the
Company. (Annexure-P/6)
8. In a move to resolve all outstanding liabilities,
the company submitted a One-Time Settlement (OTS) proposal
on May 27, 2025 (Annexure-P/7). The company has offered to
settle the entire loan account for a sum of Rs. 18.5 Crores and
has already demonstrated its bona fide intent by depositing an
upfront amount of Rs. 50 Lakhs via Demand Draft, which the
bank has encashed. This proposal is intended to cover the total
default amount which had escalated due to accrued interest.
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
8/32
9. The current legal grievance arises from a Look
Out Circular (LOC) issued by the Bureau of Immigration at the
bank's request, which resulted in the petitioner being intercepted
at Indira Gandhi International Airport on February 6, 2026
without any prior notice and was neither served a copy of the
LOC issued against him nor any grounds were communicated to
him for issuance of LOC against him. Despite being a Lead
Software Engineer in the USA with no findings of financial
mismanagement against him, the petitioner’s passport was
endorsed as "cancelled without prejudice" (Annexure-P/8),
preventing his return to work. The petitioner sent a
communication vide e-mail dated 06.03.2026 addressing
respondent no. 2 with a request inter alia to supply a copy of the
LOC issued against him to avail appropriate remedy under law.
(Annexure-P/9)
Submission on Behalf of Petitioner
10. The Learned Counsel for the petitioner
submits that the petitioner initially approached the Delhi High
Court via W.P. (Crl.) No. 628 of 2026 to quash the LOC.
However, the court did not entertain the petition on merits due
to a preliminary objection regarding territorial jurisdiction,
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
9/32
leading the petitioner to withdraw the case on 26.02.2026 with
liberty to move the appropriate forum, the Patna High Court
(Annexure P/12). Jurisdictional issues raised by the petitioner
was due in the background that neither LOC nor requisition was
made available to the petitioner at the time of detainment. It is
next submitted that the legal landscape governing LOCs has
fundamentally shifted through successive executive instructions,
often to the detriment of individual liberty. It is argued that
under the original Office Memorandum (OM) dated 27.10.2010,
a respondent bank lacked the authority to request an LOC. This
was altered by the OM dated 05.12.2017, which introduced the
phrase "detrimental to the economic interest of the country" as a
ground for restriction a term the petitioner contends did not exist
in the 2010 guidelines and should only be applied in
"exceptional circumstances".
11. It is next submitted that in order to
consolidate the directions for issuance of LOCs, the Ministry of
Home Affairs issued a comprehensive Office Memorandum
dated 22.02.2021, which presently governs the law with respect
to the issuance of LOCs. The relevant extract of said Office
Memorandum is as under: -
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
10/32
“6. The existing guidelines with regard to
issuance of Look Out Circulars (LOC) in respect
of Indian citizens and foreigners have been
reviewed by this Ministry. After due
deliberations in consultation with various
stakeholders and in suppression of all the
existing guidelines issued vide this Ministry's
letters/O.M. referred to in para 1 above, it has
been decided with the approval of the competent
authority that the following consolidated
guidelines shall be followed henceforth by all
concerned for the purpose of issuance of Look
Out Circulars (LOC) in respect of Indian citizens
and foreigners: -
xxx xxx xxx
(B) The request for opening of LOC. must
invariably be issued with the approval of an
Originating Agency that shall be an officer not
below the rank of-
(i) Deputy Secretary to the Government of India;
or
(ii) Joint Secretary in the State Government; or
(ii) District Magistrate of the District concerned;
or
(iv) Superintendent of Police (SP) ofthe District
concerned; or
(v) SP in CBI or an officer of equivalent level
working in CBI; or
(vi) Zonal Director in Narcotics Control Bureau
(NCB). or an officer of equivalent level
[including Assistant Director (Ops.) in
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
11/32
Headquarters of NCB); or
(vii) Deputy Commissioner or an officer of
equivaleht level in the Directorate of Revenue
Intelligence or Central Board of Direct Taxes or
Central Board of Indirect Taxes and Customs:
or
(viii) Assistant Director of Intelligence Bureau/
Bureau of Immigration (Bol); or
(ix) Deputy Secretary of Research and Analysis
Wing (R&AW); or
(x) An officer not below the level of
Superintendent of Police in National
Investigation Agency; or
(xi) Assistant Director of Enforcement
Directorate; of
(xii) Protector of Emigrants in the office of the
Protectorate of Emigrants or ån officer not
below the rank of Deputy Secretary to the
Government of India; or
(xiii) Designated officer of Interpol; or
(xiv) An officer of Serious Fraud Investigation
Office (SFIO), Ministry of Corporate Affairs not
below the rank of Additional Director (in the
rank of Director in the Government of India); or
(xv) Chairman/ Managing Directors/ Chief
Executive of all Public Sector Banks.6
xxx xxx xxx
(H) Recourse to LOC is to be taken in
cognizable offences under IPC or other penal
laws. The details in column IV in the enclosed
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
12/32
proforma regarding „reason for opening LOC‟
must invariably be provided without which the
subject of an LOC will not be arrested/detained.
(I) In cases where there is no cognizable offence
under IPC or other penal laws, the LOC subject
cannot be detained/arrested or prevented from
leaving the country. The originating agency can
only request that they be informed about the
arrival/departure of the subject in such cases
xxx xxx xxx
(L) In exceptional cases, LOCs can be issued
even in such cases, as may not be covered by the
guidelines above, whereby departure of a person
from India may be declined at the request of any
of the authorities mentioned in clause (B) above,
if it appears to such authority based on inputs
received that the departure of such person is
detrimental to the sovereignty or security or
integrity of India or that the same is detrimental
to the bilateral relations with any country or to
the strategic and/or economic interests of India
or if such person is allowed to leave, he may
potentially indulge in an act of terrorism or
offences against the State and/or that such
departure ought not be permitted in the larger
public interest at any given point in time.
12. It is next submitted that while it empowers
heads of Public Sector Banks to request LOCs, such recourse is
strictly intended for cognizable offences or cases involving a
"flight risk," neither of which apply to him as he was not
charge-sheeted in the underlying CBI investigation (Annexure-
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
13/32
P/11 series). The validity of the said Office Memorandum dated
22.02.2021, along with earlier amendments issued by the
Ministry of Home Affairs governing the issuance of LOCs, fell
for consideration before the Division Bench of the Hon’ble
Bombay High Court in a batch of petitions, the lead matter
being Viraj Chetan Shah v. Union of India and Ors. reported
in 2024 SCC ONLINEBOM 1195, wherein the Hon’ble Court
has quashed Clause 8(b)(XV) of the Office Memorandum dated
Memorandum No. 27.10.2010 bearing Office 25016/31/2010-
Imm, as well as Clause 6(B) (XV) of the Office Memorandum
dated 22.02.2022 bearing Office Memorandum No.
25016/10/2017-Imm (Pt), whereby the Chairman/Managing
Director/Chief Executive Officer of a Public Sector Bank was
empowered to request the opening of a Look Out Circular. Thus,
in view of the cumulative effect of the said judgment, Public
Sector Banks cannot open or request issuance of such Look Out
Circulars and thus, the lookout circular issued against the
petitioner at instance of the respondent bank is wholly without
jurisdiction.
13. It is next submitted that the decision in the
case of Viraj Chetan Shah (supra) was also considered by
Hon’ble Delhi High Court in Sahil Chugh v. Union of India
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
14/32
reported in 2024 SCC OnLine Del 4806, wherein, it was held
that LOC issued at the behest of a public sector bank against
borrowers/directors merely on account of loan default or
declaration as wilful defaulters, in the absence of any criminal
proceedings, are unsustainable in law. It was emphasized that
the expression “detrimental to the economic interests of India”
under the MHA guidelines is meant for exceptional cases
involving grave, systemic or national economic impact, and not
routine commercial defaults.
Submission on Behalf of Respondent-Bank
14. Learned Counsel for the respondent-bank
submits that the petitioner is not entitled to the reliefs sought,
such as the quashing of the Look Out Circular (LOC) or the
removal of the passport endorsement. The bank's primary
position is that the petitioner remains significantly liable for
substantial outstanding dues, and the restrictive measures are
necessary to protect the economic interests of the institution and
the country. It is next submitted that there is history of default
by the borrower, M/s Maruti Nandan Food Products Pvt. Ltd.
and a One Time Settlement (OTS) was previously sanctioned on
September 26, 2017, for an amount of Rs. 23.30 Crore.
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
15/32
However, the respondent-bank next submits that the borrower
failed to honour this commitment, paying only a negligible sum
of Rs. 0.22 Crore toward the sanctioned amount. This failure to
adhere to the prior settlement terms is a primary reason for the
bank's refusal to grant further leniency or permit the petitioner’s
departure from India.
15. It is next submitted that the current financial
liability, which has escalated due to the breach of the 2017
agreement and accrued interest. As per the bank’s records, the
borrower is now required to pay the remaining balance of the
original OTS (Rs. 23.08 Crore) plus Delayed Period Interest
(DPI) of Rs. 33.59 Crore calculated up to March 30, 2026. This
brings the total outstanding liability to Rs. 56.67 Crore. It is next
submitted that the borrower's representatives submitted a fresh
OTS offer of Rs. 18.50 Crore, to be repaid over 12 months, with
a request for the release of mortgaged securities. The bank
formally rejected this proposal as it does not align with the
Board-approved policy for compromise settlements, which
requires payment of the earlier OTS amount plus compounding
interest.
16. It is next submitted that as a director and
guarantor, the petitioner cannot be permitted to leave the
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
16/32
country while such massive financial obligations remain
unliquidated. The bank asserts that the LOC and the passport
endorsement are lawful measures taken to recover public
money. Given the history of non-compliance and the substantial
gap between the borrower's offer and the actual dues as detailed
in Annexure-R/1, the bank prays that the court reject the
petitioner’s request for travel and uphold the restrictive
measures currently in place.
17. Further, in the Supplementary Counter
Affidavit, the respondent bank clarifies that the Look Out
Circular (LOC) was issued against the petitioner based on
several critical factors: his status as the Personal Guarantor for
M/s Maruti Nandan Food Products Private Limited, his failure
to respond to the bank's repeated attempts to discuss the loan
account, and the classification of said account as a Non-
Performing Asset (NPA). Furthermore, the bank emphasizes that
the loan account was formally declared as a fraud on February
27, 2023. Regarding the legal proceedings, the bank has filed a
petition under Section 358 of the Bhartiya Nagrik Suraksha
Sanhita, 2023, currently pending before the Special Judge, CBI-
I, Patna, in R.C. No. 10 (A)/ 2023. However, the bank explicitly
submits that at the time the requisition for the LOC was
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
17/32
originally made, it was clearly indicated that no criminal case
was pending against the petitioner; therefore, the LOC was
initiated as a recovery measure for a defaulted and fraudulent
account rather than as a consequence of the current CBI case.
18. Regarding the issue of jurisdiction, the bank
asserts that the Requisitioning Authority in this matter is the
Managing Director of Canara Bank, thereby fulfilling the legal
requirements for such an action as documented in Annexure-R/2
of the Supplementary Counter Affidavit. The respondent bank
contends that the petitioner has attempted to mislead the Court
by making false statements regarding the basis of the LOC and
the authority of the bank to request it. Ultimately, the bank
maintains that the recovery of a "huge amount" of public money
is at risk. It argues that if the petitioner is permitted to travel
abroad, the likelihood of recovering these funds would be
severely diminished, and consequently, the reliefs sought in the
writ petition should be rejected in their entirety.
Submission on Behalf of Union of India
19. The learned counsel for the respondents no.
1, 2 and 3 submits that such personal milestones of the
petitioners do not grant an absolute right to circumvent the legal
consequences of pending criminal proceedings. It is a matter of
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
18/32
record that an FIR has been registered and a formal chargesheet
has already been filed, rendering the matter sub-judice before a
court of competent jurisdiction. Under the Passport Act, 1967,
and relevant government notifications, the pendency of such
criminal proceedings constitutes a valid and legal ground for the
restriction or refusal of travel documents. Consequently, the
petitioner’s proper legal recourse is to approach the concerned
Trial Court to seek a "No Objection" certificate or specific
permission to travel, as an alternative and efficacious remedy
exists within that forum.
20. Learned counsel for the respondents further
submits that the Bureau of Immigration (BoI) functions solely
as a ministerial "custodian" of the LOC database and does not
possess the independent authority to initiate, adjudicate, or
withdraw an LOC suo motu. The LOC against the petitioner was
operationalized strictly based on a formal requisition from the
"originating agency," specifically Canara Bank, and the BoI is
legally bound to maintain this status until the originating agency
or a competent court directs its withdrawal. In an official
communication dated March 25, 2026, the BoI stated it has no
inherent objection to the withdrawal of the LOC, provided such
a request is formally communicated by Canara Bank. As the
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
19/32
petitioner is admittedly a defaulter in relation to the originating
agency, any grievance regarding the continuation of the LOC
lies exclusively against that agency rather than the BoI. Counsel
further contended that they have acted in strict compliance with
extant governmental guidelines and that no cause of action
survives against them, necessitating the dismissal of the writ
petition.
Consideration
21. On close scrutiny of the facts, materials
available on record and submission made by the learned counsel
for the petitioner, Union of India and respondent-Canara Bank,
it is evident from the submissions made by the Union of India
that the investigation in which FIR was lodged by CBI, in which
the charge-sheet has already been filed rendering the matter
before the Court of competent jurisdiction, therefore, the
petitioner has to approach the concerned Trial Court for seeking
NOC to travel abroad. The effective remedy is completely
misplaced stand as taken by them because the materials do not
show any charge-sheet having been filed against this petitioner
and, therefore, the petitioner may not have any reason to
approach the Court of competent jurisdiction when the criminal
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
20/32
case is pending and in view of the fact that the charge-sheet
having been filed by the CBI against which cognizance has
already been taken and this petitioner was summoned.
21.(i) The reason which has been assigned for
opening of LOC does not disclose anything new rather on the
basis of all such materials which were available with the bank at
the time of attachment of property, kept with them as security,
has only been referred but to meet with the contingencies as
enumerated under the guidelines issued by Ministry of Home
Affairs (MHA) to make such request for opening of LOC has
not been found out as is apparent from the requisition annexed
with the Interlocutory Application, while putting the same to
challenge before this Court. Even from the pleadings made by
the respondent-bank officials through their counter affidavit, it
does not appear that any hindrance has been caused by this
petitioner in respect of the property pledged for obtaining cash
credit and term loan benefits, rather from the pleadings of the
parties, it is quite evident that the pledged property was put on
auction but no prospective buyers turned up as submitted by the
counsel for the petitioner, which fact has not been controverted
by the counsel for the respondent-Canara Bank, by referring to
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
21/32
the records of the case.
22. The guidelines which specifically provides
for opening of LOC clearly mentions that LOCs can be issued in
respect of the person against whom cognizable offences are
made out under IPC or any other Penal Laws and in cases where
there is no cognizable offence under IPC or any other Penal
Laws, the LOC subject cannot be detained or arrested or
prevented from leaving the country. The originating agencies
can only be acquainted to be informed about the arrival or
departure in such cases. The power to detain can be exercised
under exceptional circumstances, which can be discerned from
the guidelines of Ministry of Home Affairs, where the departure
of a person from India may be declined at the request of any of
the authorities based on the inputs received that the departure of
such person is detrimental to the sovereignty or security or
integrity of India or the same is detrimental to bilateral relation
with any country or to strategic and/or the economic interest of
India or if such person is allowed to leave the country, then the
person may potentially get indulged in act of terrorism or
offence against the State and/or that such departure ought not be
permitted in larger public interest at any given point in time.
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
22/32
23. From the materials placed on record for
consideration of validity or recourses taking against the LOC
subject, it is quite evident that the pre-conditions for issuance of
LOC is apparently missing as the criminal angle against this
petitioner qua other members were investigated by the Central
Bureau of Investigation (CBI) but no chargesheet is said to have
been filed against this petitioner and consequently thereto there
is no cognizable offence pending against this petitioner as of
now, which would prohibit or prevent the LOC subject from
leaving the country. In so far, the cooperation which the
Originating Authority may expect from this petitioner in making
good the liabilities, which is said to have incurred against the
Company in question, because of the Loan Account having been
classified as NPA, the property pledged is already under
attachment of the DRT and even the efforts made by the DRT to
put such property on auction could not be fructified and failure
in fetching suitable buyer may not be attributable to this
petitioner.
24. In so far, the jurisdiction of the originating
authority in seeking opening of the LOC is concerned to which
the counsel for the respondent-bank, has categorically submitted
that the requisition was made by Managing Director of
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
23/32
respondent-Canara Bank and as such, the jurisdiction of the
authority of the Bank in question cannot be questioned, which
fact has also not been controverted by the petitioner in reference
to any supportive materials, to hold the requisition of the
Originating authority being without jurisdiction. From the
averments made in supplementary counter affidavit giving out
the reasons for making requisition for issuance of LOC is that
petitioner is the personal guarantor of the company namely M/s
Maruti Nandan Food Products Private Limited and the
Petitioner did not respond even after request of Canara Bank to
discuss the status of his loan account and accordingly, the loan
account has been declared fraud as on 27.02.2023 holding their
conduct being not satisfactory owing to which the account in
question has been classified as NPA as per the guidelines of
RBI.
25. The grounds which have been referred in the
supplementary counter affidavit justifying the issuance of the
requisition for opening of LOC does not indicate any fresh
ground rather these grounds were available with the respondent-
bank from much before, even when the petitioner is said to have
been visiting the country on several occasions, prior to issuance
of LOC based on the requisition in question. Insofar, the reasons
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
24/32
assigned for not responding to the notices issued by the bank to
the petitioner to make good to the liability fastened against him,
there is nothing on record to show that the notices issued were
ever communicated to the petitioner, even during his visit or
through any other mode, while this petitioner was abroad.
26. Insofar, the issues raised by the counsel for
the petitioner that the machineries deployed in the unit for
carrying out the business, could have also fetched more amount
and the liability so created could be have easily been discharged
by the petitioner. Clubbing the said amount, if those machineries
would have separately been put on auction or the petitioner and
his family members were allowed by the bank officials, to
negotiate with private person under their supervision. As such,
stand taken by the counsel for the petitioner, having not been
controverted, surely persuades this Court to adjudicate the
issues raised by the petitioner in reference to the specific stand
taken by the respondent-bank and as also stand taken by the
Union of India in their counter affidavit to justify the opening of
LOC.
27. At this stage, the counsel for the respondent-
bank has pointed out that their only concern is that the petitioner
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
25/32
should discharge his liability or the mode of discharging the
same be dictated by him before leaving the country, to such
stand of the respondent-bank, counsel for the petitioner on
instructions, submits that the petitioner in order to show his
bona fide, is ready to discharge some percentage of his liability
and ready to discuss further terms to settle/discharge the liability
with the bank, for which both the parties sought indulgence
from this Court and in order to enable the parties to arrive to an
amicable settlement or to discuss the mode of settlement, the
matter was adjourned vide order dated 30.04.2021 by passing of
following order:
“In continuity with the settlement directed
vide order dated 26.03.2026 to find out the
terms of settlement for allowing the issues
to be adjudicated on merit, the bank
officials are directed to discuss the issues
with the petitioner and fix the terms to
resolve the liability latest by tomorrow, so
that appropriate orders on the grievance
raised by this petitioner can be made by
this Court, wherein the authority of
issuance of requisition based on which the
opening of LOC has been made the subject
matter of challenge.”
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
26/32
28. This matter was taken up on 30.04.2026, in
order to explore the possibility of settlement and to enable
adjudication of the issues on merits, the bank officials were
directed to hold discussions with the petitioner and arrive at
mutually agreeable terms for liquidation of liabilities.
Accordingly, the matter was listed for further consideration on
01.05.2026 at 3:00 p.m. When the matter was taken up, Shri
Sanjeev Ranjan, General Manager, ARM Branch, Canara Bank,
appeared in person and apprised the Court of the discussions
held with the Head Office as well as with the petitioner. During
the course of hearing, the respondent bank reiterated its stand.
However, with a view to facilitate an amicable settlement and
explore the modes of discharging the liabilities accrued against
the petitioner and his family members, this Court directed the
General Manager to further deliberate upon the issues with the
Head Office and revert with a concrete proposal for settlement,
the matter was adjourned by passing of following order vide
order dated 01.05.2026:
“2. In view of the order dated 30.04.2026,
Mr. Sanjeev Ranjan, Chief Manager,
Canara Bank, ARM Branch, Patna, has
appeared in person and submits that the
proposal for settlement with the petitioner
in respect of the financial liability so
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
27/32
accrued as against the account, which has
been classified as NPA, is under active
consideration before the Board and most
likely an appropriate decision would be
taken on Saturday, i.e. on 02.05.2026 and
as such, in order to apprise this Court with
such decision, seeks a short adjournment.”
29. Pursuant to the order dated 01.05.2026 when
Mr. Sanjeev Ranjan, who had appeared in person and submitted
that the terms of proposal for settlement with the petitioner in
respect of the financial liability so accrued as against the
account, which has been classified as NPA, is under active
consideration before the Board and most likely an appropriate
decision would be taken on Saturday, i.e. on 02.05.2026.
30. Today, when this matter was taken up for
consideration, an unsigned paper showing purported proposal
made on behalf of the respondent is placed for consideration, in
which the only condition stipulated is that the Bank is only
interested with the entire decretal amount as on 30.04.2026 to
the tune of Rs.45,16,79,758, as per the DRT, Patna, be paid by
this petitioner, only then the interference be given by this Court.
The proposal came from the respondent-bank is as follows:
“It is observed that the bank sanctioned a
One Time Settlement (OTS) to the borrower
for Rs. 23.30 crore on 26.09.2017. however,
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
28/32
the borrower failed to fulfil their
commitment, paying only Rs. 22 lac
towards the sanctioned amount. To revive
this OTS, the party has to pay the decretal
amount of Rs. 45,16,79,758.00 (as on
30.04.2026) as per the learned DRT, Patna
order.”
31. The purported proposal of the Bank, which has
been placed for consideration by this Court, in reference of
revival of OTS and payment of decretal amount, which is
already pending before DRT for its adjudication and there is no
fresh ground, as is evident from the record, therefore, the
originating agency who had made the requisition for issuance of
LOC, cannot be justified in law, and as such the issuance of
LOC violates the individual rights of the petitioner which is
protected under Article 19 and 20 of the Constitution of India,
and so callously, the bank authorities may not be allowed to
make a requisition to affect the constitutional right of any
individual, who is said to have borrowed certain amount to
facilitate their business and owing to demonetization in
November 2016 and further with introduction of GST regime in
2017, the business operations of the company suffered a
substantial downturn.
32. Since, the matter is already pending before the
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
29/32
DRT and parallel proceeding under SARFAESI Act, 2002, is
also undertaken by them, the bank is at liberty to pursue such
remedy, as a similar stand was taken before the Hon’ble Delhi
High Court in Rajesh Kumar Mehta v. Union of India reported
in 2024 SCCOnLine Del 4153 wherein it was observed that:
“25. Lookout Circular has been issued
against the Petitioner only because of the
inability of the company to repay its debts
for which the Petitioner stood guarantee.
There are no criminal proceedings against
the Petitioner and there is no allegation
that the Petitioner was instrumental in
defalcation or siphoning off the money. The
Bank has already initiated steps against the
Petitioner and the company by taking steps
under the RDDB Act, SARFAESI Act and
under the IBC. This Court is of the opinion
that after resorting to all the remedies
available in law, the Bank cannot open a
Lookout Circular as an arm-twisting tactic
to recover debt from a person who is
otherwise unable to pay more so when there
are no allegations that he was engaged in
any fraud or in any siphoning off or
defalcation of the amounts given as loan.”
33. Since, all such grounds referred in the
requisition is pending for adjudication before the DRT and
further this Court is of the opinion that after resorting to all such
remedies available to respondent-Bank, as per the applicable
laws, the steps taken for opening of LOC is indeed an arm
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
30/32
twisting tactics to recover debts from a person who is otherwise
unable to pay more, so when there is no allegation against this
petitioner being engaged in fraud or in any siphoning, or any
defalcation of amount given as loan and there being no
cognizable offence, pending against this petitioner, the
requisition dated 30.03.2024 made for issuance of Look Out
Circular is wholly unsustainable in law and is accordingly, set
aside and consequentially, the LOC dated 30.03.2024 is also set
aside.
34. Since, the respondnet-Bank has requested for
imposing certain conditions upon this petitioner in the event this
Court holds the requisition to be bad in law and without
jurisdiction. In view of the fact that the petitioner cannot shirk
his liability, which has been created against him along with
other members. Therefore, in fitness of the things, it is required
that certain conditions be imposed upon this petitioner in
making good to the liability in due course of time by the Bank
authority in enabling them to recover the amount in question, as
is apparent from the proposal placed or record for consideration
by this court, in which the liability is mentioned referred to the
decretal amount, as per the learned DRT.
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
31/32
35. Looking to the financial interest & issues being
involved in the present case and taking into account the proposal
of this petitioner to settle the issues in due course of time, the
following conditions are imposed:
(I) In view of the observations made by this
Court, the petitioner is required to furnish an
assurance regarding the frequency of his visits to
India, and that during such visits, he shall present
himself before the bank as and when called upon
by the bank officials.
(II) The petitioner shall also give an
undertaking that he shall not initiate or pursue any
further litigation, and that he shall take steps to
bring the pending litigations at different forum to a
logical conclusion, so as to facilitate the bank in
proceeding with recovery and settlement measures
by providing full cooperation to the bank officials.
(III) The petitioner shall promptly inform the
respondent bank of his arrival and shall appear
before the bank officials as and when required for
purposes of resolving the liabilities. In any event,
the petitioner undertakes to ensure at least one
visit to India in a calendar year.
(IV). With regard to the pending litigations,
the petitioner further assures that he shall make all
sincere efforts to facilitate resolution by engaging
with the other stakeholders of the property and by
Patna High Court CWJC No.4392 of 2026(8) dt.04-05-2026
32/32
placing suitable proposals before them as well as
before the respondent bank, so as to enable an
expeditious settlement of the dispute.
36. All aforesaid undertakings shall be communicated
to the appropriate bank authorities via e-mail by this petitioner
to show his bona fide. Accordingly, the writ petition stands
disposed of.
37. Interlocutory applications, if any, also stands
disposed of.
(Ajit Kumar, J)
sharun/-
U
Checking your session…
Lawyer court records for this case
Associated through the court’s case reference.