Explain how LoC is issued without criminal proceedings: HC

The Bombay high court on Monday questioned the Bank of Baroda (BoB) and the Bureau of Immigration (BI) to explain on what grounds they could restrain a woman from travelling to the USA after it was informed that the woman was stopped from flying at CSIA on the basis of a lookout circular (LOC) issued against her. When the court sought to know about the criminal case against the woman, the BI submitted that they had issued the LoC based on information by BoB that the woman was a defaulter, however, there was no complaint registered against her. The court sought to know whether anyone could be restrained from travelling abroad without any criminal case and directed both the BI and BoB to file their reply justifying their action.

A division bench of justice S J Kathawalla and justice Madhav Jamdar while hearing the petition of a woman of Indian origin who took up US citizenship in 2017 along with her family was informed by advocate Ashok Kumar Singh that the woman had been travelling to India regularly after shifting to the US to meet her aged mother. Earlier in 2020 when she was boarding a flight to the US, she was stopped by the BI officials and informed that there was an LoC against her name and hence she could not board the flight.

Singh submitted that his client’s husband and father-in-law had taken a loan from BoB in 2012 for their factory in Gujarat. However as the business had run into losses they completed the securitization process with the bank by handing over the plant, machinery and plot of land before shifting to the US. He added that however there was some pending claim of the bank which was being heard by the Debt Recovery Tribunal at Ahmedabad. Singh added that his client was only the guarantor of the loan and hence the action of restraining her from travelling in the absence of any criminal proceedings against her was not valid.

The counsel for the BI submitted that as BoB had informed them that the woman was a defaulter and should not be allowed to leave the country hence they had issued an LoC and restrained her from flying.

After hearing the submissions the court wanted to know on what grounds the BI or the BoB restrain the woman from leaving the country without any criminal proceedings being initiated against her. As none appeared for BoB, the court directed it to explain the same and also directed BI to inform it of the procedure for issuing LoC and posted the matter for hearing on Tuesday.

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