Loan fraud case: HC suspends LOC against Manish Mandhana, allows him to travel abroad

Bank of Baroda, the lead banker among a consortium of banks, had in its complaint with the CBI last year alleged that the accused directors of Mandhana Industries Ltd (now GB Global Ltd) Purushottam Mandhana, Manish Mandhana, Biharilal Mandhana and others defrauded the banks to the tune of Rs 975.08 crore.

As per the CBI FIR, the accused persons allegedly hatched a criminal conspiracy to cause losses to banks for wrongful gain by diverting loan funds through fraudulent transactions.

The Enforcement Directorate (ED) had also started its probe based on the CBI FIR.

On May 9, another bench led by Justice A S Chandurkar had suspended LOC issued against Mandhana by the Bank of Baroda till June 3 to enable him to attend his son’s convocation ceremony on May 24 and 25 in New York and his travel to London from May 25 to June 2 to meet his daughter.

On Tuesday, a vacation bench of HC of Justices Gauri V Godse and Somasekhar Sundaresan was informed by Mandhana’s lawyers that at the airport, he discovered that there was another LOC relating to the same case issued at the instance of CBI which prevented him from travelling.

The bench noted that the HC on May 9 had already applied its mind and had imposed various conditions and compliances on the applicant in connection with the travel and had considered that the right to travel abroad is recognised as a fundamental right under Article 21 of the Constitution.

However, raising objections to the plea, CBI stated that a detailed itinerary was not set out in the application and the travel as originally proposed had been rendered infructuous since he was still in India.

“Since the inability to travel occurred only because of the LOC issued by the CBI, we are not inclined to accept this objection,” the bench noted.

It also took on record the detailed itinerary submitted by Madhana and suspended LOC issued at the request of CBI on the same terms set out in May 9 decision.

The court clarified that its order would not apply to any other LOC or restraint order, if any, issued by any other authority and directed immigration authorities to permit Mandhana to travel abroad. The HC has posted the matter for compliance on June 12.