Case Note & Summary
The petitioner, Dr. Bavaguthu Raghuram Shetty, an Indian citizen aged 78 years, filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka at Bengaluru. He sought directions to the respondent banks, Punjab National Bank and Bank of Baroda, to recall Look Out Circulars (LoCs) issued against him, or alternatively, to direct the immigration authorities to allow him to travel ignoring the LoCs. The petitioner had availed loans from the banks, and due to default in repayment, the banks issued LoCs to prevent him from traveling abroad. The petitioner contended that the LoCs were illegal as they were issued solely for recovery of civil dues without any criminal proceedings or threat to economic security. The banks argued that the LoCs were necessary to prevent the petitioner from fleeing the country and to ensure recovery. The court analyzed the guidelines issued by the Ministry of Home Affairs regarding issuance of LoCs, which require that LoCs should be issued only in cases involving criminal proceedings or imminent threat to economic security. The court held that the right to travel abroad is a fundamental right under Article 21 of the Constitution and cannot be curtailed by LoCs issued solely for recovery of civil dues. The court directed the respondent banks to recall the LoCs forthwith and communicate the same to the immigration authorities. The petition was allowed.
Headnote
A) Constitutional Law - Right to Travel - Look Out Circular - Article 21 of the Constitution of India - The right to travel abroad is a fundamental right under Article 21 and cannot be curtailed by issuance of LoC solely for recovery of civil dues. Held that LoC must be based on imminent threat to economic security or criminal proceedings, not mere default in loan repayment (Paras 1-10). B) Banking Law - Look Out Circular - Recovery of Debts - Guidelines of Ministry of Home Affairs - LoCs issued by banks for recovery of loans without any criminal case or threat to economic security are illegal and violative of fundamental rights. Held that banks must first exhaust other recovery mechanisms before seeking LoC (Paras 5-12). C) Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - High Court can interfere with LoCs issued without jurisdiction or in violation of fundamental rights. Held that writ petition is maintainable against LoCs issued by banks (Paras 1-15).
Issue of Consideration
Whether Look Out Circulars (LoCs) issued by banks against a borrower solely for recovery of loan amounts are legally sustainable in the absence of any criminal proceedings or threat to economic security
Final Decision
Writ petition allowed. Respondent banks directed to recall Look Out Circulars forthwith and communicate to immigration authorities.
Law Points
- Look Out Circular cannot be issued solely for recovery of civil dues
- Right to travel is a fundamental right under Article 21
- LoC guidelines require imminent threat to economic security
- Banks must exhaust other remedies before seeking LoC
