Yatin Jindal v. Bureau Of Immigration & ANR.
$~42 to 44 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 5609/2024, CM APPL. 23092/2024 & CM APPL. 29388/2024 Date of Decision: 18.02.2026
IN THE MATTERS OF:
SMT. MANJU JINDAL .....Petitioner Through:
Mr. Prithu Garg, Mr. Shivam Singh, Mr.
Ashutosh Arvind Kumar, Advocates.
versus BUREAU OF IMMIGRATION & ANR.
.....Respondents Through:
Ms Radhika Bishwajit Dubey CGSC, Ms Gurleen Kaur Waraich, Mr Kritarth Upadhyay and Mr Amulya Dev Mishra, Advs for R-1.
+ W.P.(C) 6719/2024, CM APPL. 27974/2024 & CM APPL. 29398/2024 MR. SUNIL JINDAL .....Petitioner Through:
Mr. Prithu Garg, Mr. Shivam Singh, Mr.
Ashutosh Arvind Kumar, Advocates.
versus BUREAU OF IMMIGRATION & ANR.
.....Respondents Through:
Mr. Ashish K Dixit, CGSC with Mr.
Chetan Jadon, Adv. for R-1.
+ W.P.(C) 6748/2024, CM APPL. 28132/2024 & CM APPL.
29395/2024 YATIN JINDAL .....Petitioner Through:
Mr. Prithu Garg, Mr. Shivam Singh, Mr.
Ashutosh Arvind Kumar, Advocates.
versus BUREAU OF IMMIGRATION & ANR.
.....Respondents Through:
Mr. Nishant Gautam CGSC Ms.
Kavya Shukla, Mr. Vineet Negi, Mr.
Naman Sharma and Mr. Theresa, Advs.
CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV J U D G E M E N T PURUSHAINDRA KUMAR KAURAV, J. (ORAL) 1.
These petitions filed by the petitioners are against the Look Out Circular ['LOC'] issued at the instance of the respondent-Bank of Baroda. 2.
The petitioners are the directors/promoters/guarantors of the company named M/s Pomegranate Coaters Private Limited (earlier known as M/s JMJ Industries Private Limited). The said company was engaged in the manufacturing of cotton-coated fabrics, rexine, and footwear, and had availed various credit facilities from the respondent no. 2-bank. The respondent no. 2-bank seems to have taken various steps to recover the dues, including initiation of recovery proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, and the Recovery of Debts Due to Financial Institutions Act, 1993.
3.
Simultaneously, LOC also seems to have been opened against the petitioners, at the instance of the respondent no. 2-bank. 4.
It is noted that till date, no criminal investigation has been initiated against the petitioners, and no FIR is pending against them. Therefore, there is no question of their non-cooperation with any of the investigating agencies.
5.
The power to open LOC at the instance of public-sector banks under Office Memorandum No.25016/10/2017 issued by the Ministry of Home Affairs has been struck down by the High Court of Bombay in Viraj Chetan Shah v. Union of India.1 6.
Under almost similar circumstances, this Court, in Vineet Gupta v. Bureau of Immigration & Ors.2 has also set aside an LOC opened at the instance of a public sector bank. Paragraph Nos.10 to 16 of the same are extracted as under:
10.
The Bombay High Court, in the case of Viraj Chetan Shah v. Union of India,3 has struck down Clause 6(B)(xv) of the Guidelines of 2021 as bad in law on the ground of arbitrariness, unreasonableness, improper and invalid classification, and conferment/delegation of uncanalised and excessive power. This Court, has stopped short of striking down the said provision, but has followed the decision in Viraj Chetan Shah towards placing fretters on any unbridled invocation of Look Out Circulars under the same. Reference can be made to the decisions in Rajesh Kumar Mehta v. Union of India and Prateek Chitkara v. Union of India Vinay Mittal & Anr v. Bank Of Baroda & Ors. 11.
Placing reliance on the decision in Viraj Chetan Shah, learned counsel appearing for the respondents tries to explain the concept of economic interest. He asserts that the vast sum of public money which is 1 2024 SCC OnLine Bom 1195 2 W.P.(C) 7726/2024 dated 22.01.2026 3 2024 SCC OnLine Bom 1195
due against the Company renders the present case within the scope of the term „detrimental to the economic interests of India‟. 12.
However, at the outset, it is to be noted that according to respondents‟ own affidavit, the impugned action has been initiated as a measure of „abundant caution‟. The Guidelines of 2021, nowhere, empower the authorities to take recourse to such a drastic action only as a measure of „abundant caution‟. There must exist sufficient material with the respondents to invoke action for opening of a Look Out Circular. The counter affidavit on behalf of respondent no. 2-bank is completely silent on these aspects.
13.
Further, this Court has examined the power to issue Look Out Circulars on the ground that departure of the subject from India would be detrimental to the economic interests of India, in a plethora of cases, including in the case of Rajesh Kumar Mehta v. Union of India. The question for consideration before the Court was whether Look Out Circulars can be opened at the instance of banks only because of the failure on the part of a borrower to repay loans for which the LOC subject stood as a personal guarantor. After observing that the right to travel abroad has been recognized as an integral part of the fiundamental right to liberty guaranteed under Article 21 of the Constitution of India by the Supreme Court in the case of Maneka Gandhi v. Union of India the Court held that banks cannot open a Look Out Circular as an arm-twisting tactic to recover debts, especially when the subject is not engaged in any fraud or in any siphoning off or defalcation of the amounts given as loan. 14.
The Court also took note of the decision in Prateek Chitkara v. Union of India,4 wherein, the term „detrimental to economic interest‟ used in Guildelines of 2021 has been analysed by the Court. The Court was of the opinion that the said term would include „squandering of public money‟, „siphoning off amounts taken as loans from banks‟, „defrauding epositors‟, „investing in hawala transactions‟ etc. It further held that Look Out Circulars cannot be issued in every case of bank loan defaults, etc. Th relevant portion of the said decision is extracted below, for reference: "82. The term "detrimental to economic interest" used in the Office Memorandum is not defined.
Some cases may require the issuance of a look-out circular, if it is found that the conduct of the individuals concerned affects public interest as a whole or has an adverse impact on the economy. Squandering of public money, siphoning off amounts taken as loans from banks, defrauding depositors, indulging in hawala transactions may have a greater impact as a whole which may justify the issuance of look-out circulars. However, issuance of look-out circulars cannot be resorted to in each and every case of bank loan defaults or credit facilities availed of for business, etc.
travel, merely due to their participation in a business, whether in a professional or a nonexecutive capacity. The circumstances have to reveal a higher gravity and a larger impact on the country." 15.
While the dues against the Company is, of course, in respect of a large sum, regard has to be had to the fact that the petitioner has not been accused of any cognizable offence under the penal laws and the only reason for the issue of a Look Out Circular against him is the fact that he is a personal guarantor in respect of the loan. Further, while the case of respondent no. 2-bank is that the promoters/directors of the Company have siphoned of the money, it is not their case that the petitioner has also taken part in the same. This Court in its decision in Anastasiia Pivtsaeva & Anr. v. Union of India & Ors.
5 has held that mere association or a familial relationship with an accused, absent any concrete material showing direct involvement or complicity in the alleged offence, cannot justify adverse action such as denial of security clearance or the continuation of coercive measures. In Rajesh Kumar Mehta, this Court, when faced with a similar situation, has held as follows: "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."
16.
Having considered the overall conspectus of the facts and situations, aspecially, in light of the fact that the petitioner was neither a director of the Company, nor was involved in any of its day to day functioning, and that the respondent-banks have already taken recourse to appropriate proceedings for recovery of the money, the Court finds that there is no justification for continuation of the impugned Look Out Circulars."
7.
Having considered the overall facts and circumstances, there does not seem to be any justification to continue the LOCs in question, and
accordingly, the same stand set aside.
8.
The respondents, however, shall be at liberty to take any other appropriate action in accordance with law.
9.
Petitions stand disposed of.
PURUSHAINDRA KUMAR KAURAV, J FEBRUARY 18, 2026/p/amg 5 2024 SCC OnLine Del 5170