Bank cannot make Look Out Circular a Recovery Norm, as it Violates Fundamental Right of Movement: Calcutta HC allows WP [Read Order]
Bank – Look Out Circular – Recovery Norm – Violates Fundamental Right of Movement – Calcutta HC – WP – taxscan
Bank – Look Out Circular – Recovery Norm – Violates Fundamental Right of Movement – Calcutta HC – WP – taxscan
The Calcutta High Court has held that banks cannot make lookout circular a recovery norm as it violates the fundamental right of movement and allowed the Writ Petition (WP).
Mannoj Kumar Jain & Anr., the petitioners initially challenged the action taken by the Immigration Authority preventing the petitioners from travelling to the United Kingdom. An order was passed on 30.9.2022 directing the petitioners to add Indian Overseas Bank as a party respondent as the Court was informed that the petitioners had been prevented from travelling to the United Kingdom because of a Look Out Circular based on a request made by the Indian Overseas Bank.
The Vacation Bench passed an order on 18.10.2022 permitting the second Petitioner to travel to the U.K. on account of the 2nd petitioner’s son pursuing his studies there. The petitioners applied for amendment of the writ petition for challenging the Look Out Circular issued by the Indian Overseas Bank and sought for quashing of the same.
The issue for adjudication is whether the Look Out Circular can continue to prevent the petitioners from travelling outside India or should be quashed on the facts which have been brought to the notice of the Court.
The petitioners had obtained loans for the expansion of businesses from various Banks. The leading Bank in the consortium of 11 Banks was the Central Bank of India. The petitioners have settled the claims of all the Banks except Indian Overseas Bank (IOB), Andhra Bank (now Union Bank of India) and IDBI Bank.
It was viewed that there is no evidence that the petitioners’ leaving the country for a specific period would affect the economic interests of India. The petitioners have not been declared fraudsters, money launderers, or even economic offenders.
“Apart from the reach of Look Out Circulars to cause immediate and irrevocable violation of a person’s fundamental right of movement, Look Out Circulars have an inexplicably long shelf-life. Once a Look Out Circular is issued, it remains alive and kicking for almost all times to come. This spells dangerous repercussions on the person’s right to freely move across and beyond the country and remain mobile, “the bench of Justice Moushumi Bhattacharya observed.
While allowing the Writ Petition the Court quashed the impugned Look Out Circular issued by the respondent Bank.
To Read the full text of the Order CLICK HERE
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