Delhi High Court Quashes Lookout Circulars Against Supertech Realtors’ Director.

The Delhi High Court has nullified the lookout circulars (LoCs) issued against Mohit Arora, director of Supertech Realtors, by the Bureau of Immigration. These LoCs were requested by the Bank of Baroda and Union Bank of India.

However, the court clarified that its ruling does not address LoCs issued against Arora at the request of other investigative agencies.

Justice Subramonium Prasad noted, “No doubt an FIR has been registered against the Petitioner but that alone cannot be a reason for continuing the lookout circular issued at the instance of the banks…” He further emphasized that “mere inability to pay money without a criminal case cannot be a reason to take away the fundamental right guaranteed under Article 21 of the Constitution of India.”

The court affirmed that the right to travel abroad is a fundamental right under Article 21 of the Constitution of India and cannot be arbitrarily or illegally restricted.

Justice Prasad added, “It is well settled that merely because the office memorandum permits the issuance of a lookout circular in exceptional circumstances, even when an individual is not involved in any offense under the IPC (Indian Penal Code) or any other penal law, the said power should be used in exceptional circumstances and not as a matter of routine.”

Supertech Ltd and its subsidiary have taken credit facilities from various entities, including Bank of Baroda and Union Bank of India, to develop multiple projects over time.

In 2012, Supertech Realtors entered a facility agreement with Union Bank of India for a term loan of Rs 735 crore, of which Rs 300 crore was granted for developing the Supernova commercial-cum-residential project in Noida, Uttar Pradesh. Arora had provided a personal guarantee for this loan.

In March 2014, the Union Bank of India also sanctioned financial assistance of Rs 150 crores for the development of the ‘Eco Village-II, Phase-I’ residential project in Greater Noida (West), with Arora as a guarantor.

Due to defaults in debt repayment by Supertech and Supertech Realtors, their accounts were classified as Non-Performing Assets (NPAs) by the lenders, who subsequently initiated recovery proceedings against the companies and their guarantors. As a result, five lookout circulars were issued against Arora by the Bureau of Immigration.