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Journalism of Courage
The Delhi High Court recently said there has to be some application of mind by any authority that opens a lookout circular (LOC) since it results in restricting a person’s right to travel which is guaranteed under the Constitution.
The court’s order comes after pleas filed by former directors of a company challenging the LOC issued against them at the instance of Bank of Baroda in connection with a loan default by the company after the company’s loan account was declared a non-performing asset by the bank.
A single-judge bench of Justice Subramonium Prasad held in its September 19 order– “The right to travel abroad is guaranteed under Article 21 of the Constitution of India which cannot be taken away in an arbitrary and illegal manner. This court is now coming across a large number of cases where banks are now insisting on opening of LOCs only as a measure for recovery of money without initiating any criminal proceedings.”
The court said banks can request for opening of LOCs in “exceptional circumstances” when it is felt that permission by the person to go abroad will affect the “economy of the country”.
Observing that LOCs cannot be opened merely on the request of banks, the HC said, “There has to be some application of mind by the authority concerned which is opening the LOCs, since opening of this circular results in restraining a person’s right to travel abroad. The authority opening the LOC must satisfy itself that the departure of a person against whom the circular has been opened would be detrimental to the sovereignty or security or integrity of India…”
