Mumbai: The Bombay High Court has declined to permit a Hong Kong-based Indian-origin businessman to travel overseas while a Look-Out Circular (LOC) issued against him remains in force, citing concerns that allowing him to leave the country could hamper recovery of the outstanding dues of ₹242 crore of the loan he had borrowed from Bank of Baroda.
A division bench of Justices Sarang Kotwal and Sandesh Patil, in an order dated February 23, which was made public recently, rejected the application filed by businessman Pradeep Agarwal seeking suspension of the LOC and permission to undertake multiple international trips.
Agarwal had urged the court to allow him to travel abroad, arguing that previous permissions granted by the high court had been honoured and that he had returned to India within the stipulated time on six earlier occasions. He said the present request was linked to his professional commitments as a consultant with a Singapore-based company, which required him to travel frequently to Africa and the Middle East to facilitate agricultural import–export transactions.
The plea was opposed by the Hong Kong branch of Bank of Baroda, which said Agarwal’s company, P Sons Ltd, had availed trade finance facilities from the bank in 2010 that were eventually enhanced to USD 20 million. According to the bank, the firm defaulted on repayments and its account was classified as a non-performing asset in January 2016.
The bank further contended that after recovery proceedings were initiated in Hong Kong, Agarwal left the jurisdiction, allowing a local court to pass an ex-parte decree directing him to repay USD 19.38 million with 9% annual interest. It alleged that he later relocated to India despite knowing that the foreign decree could not be readily enforced here.
The bank told the court that around ₹242 crore remains unpaid and alleged that Agarwal continues to run other businesses in India, including Phulchand Exports Pvt Ltd and Cigna Multiventures Pvt Ltd, where he is a promoter-director and majority shareholder, without making any effort to clear the outstanding dues.
After hearing both sides, the bench found merit in the bank’s submissions and observed that Agarwal appeared to have used Hong Kong as a base to secure credit before leaving once the liability crystallised, thereby frustrating execution of the decree against him.
The court also noted that despite undertaking several foreign trips earlier, he had not repaid any portion of the outstanding amount. Observing that Agarwal had no property in India to offer as security, the bench said there was a risk he might not return if allowed to travel abroad.
“The Applicant (Agarwal) does not have any property in India to show that he would come back. He has nothing to offer as security. It is very easy for him to leave India and settle abroad…Thus, once he goes abroad and does not come back, huge public money would be lost, and the Indian taxpayers would suffer heavy losses,” the court said and rejected his plea.
