Punjab & Haryana High Court Quashes Look Out Circulars Against Company Directors in ₹130 Crore Loan Default Case; Allows Foreign Travel
Case Name: Ashok Kumar Goel and Others v. Union of India and Others
Date of Judgment: 20 January 2026
Citation: CWP-12631-2023
Bench: Hon’ble Mr. Justice Sheel Nagu, Chief Justice and Hon’ble Mr. Justice Sanjiv Berry
Held: The Punjab and Haryana High Court allowed the writ petition and quashed the Look Out Circulars (LOCs) issued against the petitioners, holding that mere default in repayment of a loan availed by a foreign company, without any material indicating criminal culpability, cannot justify issuance of LOCs. The Court held that the controversy stood squarely covered by the judgment of the Delhi High Court in Manan Goel v. Union of India, and the petitioners were entitled to the same relief, subject to cooperation with investigation.
Summary: The petitioners, Directors of Gulf Petrochem FZC, UAE, approached the High Court seeking quashing of Look Out Circulars issued against them and permission to travel abroad. The LOCs were issued at the instance of Bank of Baroda in relation to credit facilities extended by its Sharjah Branch between 2011 and 2019, out of which approximately ₹130 crore remained outstanding. The petitioners had furnished personal guarantees for the loan facilities availed by the company.
The loan account was declared fraud on 31.05.2021, allegedly without granting the petitioners an opportunity of being heard. The petitioners contended that the loan transactions were governed by UAE law, the borrowing company was incorporated abroad, and the sole basis for issuance of the LOCs was loan default. It was argued that no criminal proceedings were pending against the petitioners and no material was placed on record to establish criminal intent or culpability.
During the proceedings, reliance was placed on the judgment of the Delhi High Court dated 14.11.2025 in Manan Goel v. Union of India, where the LOC issued against another Director of the same company had been quashed. The High Court directed the respondents to point out distinguishing features, if any, between the two cases. In response, the Bank filed an affidavit admitting that the LOCs against the petitioners arose out of the same transaction and were issued on identical grounds.
The High Court observed that the petitioners stood on the same footing as Manan Goel and were seeking identical reliefs. The Court held that in the absence of any distinguishing circumstances or criminal allegations, denial of similar relief would be unjustified. It was further observed that issuance of LOCs in purely civil disputes relating to loan defaults cannot be sustained in law.
Decision: The writ petition was allowed. The Look Out Circulars issued against the petitioners were quashed, subject to the petitioners furnishing an undertaking to cooperate with any investigation, appear before investigating authorities as and when required, and provide all material or documents sought by the agencies concerned.