# In the matter of Balram Garg vs. Union of india & Anr.

> HC judgment dated 2024-07-12. Citation: TCN-2024-HC-00060. The petitioner, Balram Garg, approached the Delhi High Court challenging a Lookout Circular (LOC)…

- **Court:** HC
- **Order date:** 12 Jul 2024
- **Citation:** TCN-2024-HC-00060
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/balram-garg-vs-union-of-india-anr-56b688b6

## Summary

### Background

The petitioner, Balram Garg, approached the Delhi High Court challenging a Lookout Circular (LOC) issued against him by the Bureau of Immigration at the request of the State Bank of India (SBI). The petitioner is the Managing Director of PC Jewellers Limited. SBI, as the lead bank of a consortium of 13 banks, initiated proceedings against PC Jewellers due to financial turbulences faced by the company in 2022. SBI also filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT). During the pendency of these proceedings, a One Time Settlement (OTS) was arrived at, and SBI informed the petitioner that most lenders had agreed to the compromise. The petitioner deposited Rs. 113.50 crore in SBI's No Lien

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## Facts

Balram Garg, the Managing Director of PC Jewellers Limited, faced a Lookout Circular (LOC) issued against him by the Bureau of Immigration at the request of the State Bank of India (SBI). PC Jewellers, a company incorporated under the Companies Act, 1956, experienced financial difficulties in 2022. SBI, the lead bank of a consortium of 13 banks, initiated recovery proceedings under Section 19 of the Recovery & Bankruptcy Act, 1993, and filed Original Applications before the Debt Recovery Tribunal, Delhi. SBI also filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, before the National Company Law Tribunal (NCLT). A One Time Settlement (OTS) was reached, and SBI informed Garg that most lenders had agreed to the compromise. Garg deposited

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## Issues and analysis

### Issue 1: Whether the Lookout Circular issued against the petitioner is justified in the absence of any …

**Ratio:** A Lookout Circular cannot be opened merely on the request of the banks. There has to be

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**Reasoning:** The court relied on previous judgments, including Apurve Goel v. Bureau of Immigration

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**Interpretation:** The court interpreted the guidelines for issuing LOCs to mean that they should

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**Application:** In this case, the court found that there were no criminal proceedings pending

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## Parties

- **Judges:** Subramonium…
- **Appellants:** Balram…
- **Respondents:** PC Jewellers…; Union of…

## Timeline

- **1956-01-01 — Company Incor…**: PC Jewellers Limited incorporated…
- **2022-01-01 — Financial Tur…**: PC Jewellers faced…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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