Fundamental Rights Cannot Be Taken Away For Non-Payment Of Loans: Delhi HC Quashes Look Out Circular In FIR By SBI

The Delhi High Court has quashed a Look Out Circular (LOC) against a man on the ground that the fundamental rights of a person cannot be taken away for non-payment of loans.

The said man had defaulted on the car loans taken by him in respect of two cars and hence, approached the court for quashing of LOC issued against him.

A Single Bench of Justice Subramonium Prasad held, “This Court is of the opinion that for non-payment of loans in respect of two cars, i.e. a Renault Duster car bearing Registration No.DL8CZ4501 and a Verna CRDI car bearing Registration No.DL2CAR3354, the fundamental rights of the Petitioner cannot be taken away and, therefore, this Court, in the facts and circumstances of this case, is inclined to quash the LOC issued against the Petitioner”

Advocate Pritish Sabharwal represented the petitioner while Standing Counsel (Civil) Santosh Kumar Tripathi and Advocates Arun Panwar and Prashansa Sharma represented the respondents.

Brief Facts -

An FIR was registered against the petitioner for offences under Section 420 IPC on the ground that he defaulted on the car loans taken by him. It was stated that the petitioner took a car loan for Rs. 13,00,000/- from State Bank of India for purchasing a Renault Duster and the said loan was sanctioned. The petitioner approached the Bank again for another car loan of Rs. 11,90,000/- for purchasing a Verna CRDI car and the same was also sanctioned. The payment of instalments became irregular and when the Bank officials tried to contact the petitioner, he did not respond and when they visited the address provided by the him, it was found that he had already left. The petitioner was working in Dubai and kept coming to India and hence, a notice under Section 41A Cr.P.C was attempted to be served on him but the same could not be served.

A Non-Bailable Warrant (NBW) was issued against the petitioner but the same could not be executed and thereafter process under Section 82 of the Cr.P.C was issued and he was declared as a Proclaimed Person by the Metropolitan Magistrate. Based on the proceedings, a LOC was issued against him and a Criminal Revision Petition was filed against the said order. The said order was stayed, however, since the petitioner did not file the requisite process fee, the interim stay granted to him was vacated. The order vacating the stay, was challenged by the petitioner before the High Court which was disposed of with a direction to the Additional Session Judge to decide the revision petition filed by him and in the meantime, it was directed that no coercive action be taken against him.

As the order declaring the petitioner as a Proclaimed Person was set aside, the short question which arose for consideration before the Court was that since the order has been set aside and the petitioner is no longer a Proclaimed Person, should the LOC against the Petitioner continue or not.

The High Court in view of the above issue observed, “It is well settled that LOC is opened against a person who is accused of a cognizable office under the Indian Penal Code to ensure his/her presence before the investigating authorities and before the Court. Since the Petitioner was not appearing before the Investigating authorities or before the Courts, he was declared as a Proclaimed Person. This Court cannot found fault with the Respondents for opening the LOC against the Petitioner.”

The Court added that in this case, the petitioner appeared before the court and the order declaring him as a Proclaimed Person no longer exists.

“In case the Petitioner does not co-operate with the investigation or does not appear before the Courts, it is always open for the Respondents to open another LOC against the Petitioner. … The passports of the Petitioner which has been deposited with the Registrar General of this Court be released”, directed the Court.

Accordingly, the High Court disposed of the writ petition and quashed the LOC against the petitioner.

Cause Title- Sushil Kumar Sehgal v. Union of India & Ors. (Neutral Citation: 2023:DHC:7659)

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