Case Note & Summary
The petitioner, Mr. Himayath Ali Khan, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging a Look Out Circular (LOC) dated 07.03.2022 issued by the 2nd respondent, Bank of Baroda, and executed by the 1st respondent, Ministry of Home Affairs (Bureau of Immigration). The petitioner sought a writ of mandamus or declaration that the LOC was arbitrary, illegal, and violative of Articles 14, 19, and 21 of the Constitution. The petitioner had availed a loan from the Bank of Baroda, and due to default, the bank issued an LOC to prevent him from traveling abroad. The court analyzed the Office Memorandum dated 22.02.2021, which governs the issuance of LOCs. The court found that only a 'Competent Authority' as defined in the OM can issue an LOC, and a bank does not qualify as a competent authority. The court held that the LOC was issued without authority and was therefore invalid. The court quashed the LOC and directed the respondents to withdraw it. The court also emphasized the importance of the right to travel under Article 21 and held that the bank's action was arbitrary and violated the petitioner's fundamental rights.
Headnote
A) Constitutional Law - Right to Travel - Look Out Circular - The court considered whether a Look Out Circular (LOC) issued by a bank against a loan defaulter is valid. The court held that only a 'Competent Authority' as defined in the Office Memorandum dated 22.02.2021 can issue an LOC, and a bank is not a competent authority. The LOC was quashed as it violated the petitioner's right to travel under Article 21. (Paras 1-10) B) Banking Law - Loan Default - Look Out Circular - The court examined the validity of an LOC issued by Bank of Baroda against a borrower. The court held that the bank's action in issuing the LOC was arbitrary and illegal, as the bank did not follow the procedure under the 2021 SOP. The court directed the respondents to withdraw the LOC. (Paras 11-20)
Issue of Consideration
Whether a Look Out Circular (LOC) issued by a bank (Bank of Baroda) against a borrower who defaulted on a loan is valid under the Office Memorandum dated 22.02.2021, and whether such LOC violates the petitioner's fundamental rights under Articles 14, 19, and 21 of the Constitution of India.
Final Decision
The court quashed the Look Out Circular dated 07.03.2022 issued by the Bank of Baroda and directed the respondents to withdraw the same. The writ petition was allowed.
Law Points
- Look Out Circular
- Competent Authority
- Office Memorandum dated 22.02.2021
- Right to Travel
- Article 21
- Article 14
- Article 19
- Writ of Mandamus
- Bank of Baroda
- Loan Default
