Case Law Details
Nipun Singhal Vs Union of India (Delhi High Court)
In law, look out circular is a circular letter used by authorities of India to check whether a travelling person is wanted by the police. It is open to search for absconding criminals and also to prevent and monitor effectively the entry or exit of anyone who maybe sought by law enforcement or authorities. In order to maintain law and order, it is used as a watchdog for the country’s safety. In a significant judgement of Delhi High Court, the look out circular has become the centre of attention Iin the case. The judgement addressed the legality of Look Out Circular issued by Bank of Barodra against Mr. Nipul Singhal. This ruling not only delves the intricacies and complexities of LOC but also reaffirms the fundamental right to travel abroad, as enshrined in Article 21 of the Constitution of India. In this article, we will provide a comprehensive analysis of the case and will understand the implications of the judgement.
The heart of the matter revolves around the Mr. Nipun Singhal. Mr. Nipun Singhal, a former employee of Llyod Electric and Engineering Limited, where he served as the director of the company from 2010 to 2017. He resigned from his position in 8th May 2017, following the sale of a business segment. Subsequently, the company encountered financial troubles and consequently declared as a non-performing asset by Bank of Barodra in November 2018. Thus, Mr. Singhal faced allegations of being a willful defaulter by the bank in January 2022, primarily for transactions that transpired after his resignation.
Mr. Singhal’s predicament escalated when he received a notice from the Central Bureau of Investigation (CBI) regarding a case registered against the company. When he attempted to travel to Spain, he was informed of the LOC issued against him, preventing him from leaving the company. This LOC served as the focal point of the legal dispute.
Meticulously examining the legality of the LOC issued against Mr. Singhal’s , the Hon’ble Delhi High Court declared the LOC, unsustainable and therefore, LOC was declared to be quashed. The court emphatically asserted that an LOC solely cannot be issued on the presumption that an individual might be accused in the future. It must be founded on substantial materials or inputs that reasonably justify its issuance. This stance underscores the importance of adhering to due process and the rule of law when considering LOCs.
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