Union Bank of India Vs Hulas Rahul Gupta (Delhi High Court)
Delhi High Court Upholds Personal Liberty: Quashes LOC Against Guarantor Hulas Rahul Gupta
In a landmark judgment, the Delhi High Court has quashed the Look Out Circular (LOC) issued against Hulas Rahul Gupta, the guarantor in the case against Union Bank of India. This decision, stemming from Civil Appeal No. 7257 of 2011, marks a significant moment in the realm of personal liberties and banking laws.
Background of the Case
Hulas Rahul Gupta, formerly the Managing Director and founder of M/s Indosolar Ltd., along with his father, stood as personal guarantors for loans extended by Union Bank of India and other banks to the company. After the company was declared a Non-Performing Asset (NPA) and subsequent insolvency and recovery proceedings, an LOC was issued against Gupta, restricting his international travel.
The Tribunal’s Findings
The Delhi High Court’s bench, comprising George George K. (Vice President) and Laxmi Prasad Sahu (Accountant Member), meticulously examined the issuance of the LOC, which was challenged by Gupta. The court found that the LOC, issued upon the bank’s request, lacked substantial grounds since it was primarily based on the apprehension of Gupta absconding, despite no criminal proceedings or FIR pending against him.
The bench highlighted several procedural lapses in issuing the LOC, including the incorrect listing of Gupta’s nationality and the lack of detailed reasons for its issuance as required by the Ministry of Home Affairs’ guidelines.
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