High Court quashes illegal Look Out Circular, awards compensation and emphasizes constitutional rights

The High Court set aside the Look Out Circular (LOC) issued against the petitioner, finding it illegal and arbitrary as it violated procedural safeguards and the petitioner's right to travel abroad under Article 21 of the Constitution. The court directed the bank to pay Rs.1 lakh as compensation for reputation and financial loss, expunge LOC-related records, and ensure communication and post-decisional hearing procedures are followed. The court granted relief, emphasizing adherence to principles of natural justice and constitutional rights.

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Issues Involved:
1. Legality of Look Out Circular (LOC) issued against the petitioner.
2. Right to travel abroad under Article 21 of the Constitution of India.
3. Procedural safeguards in the issuance of LOC.
4. Justification for issuance of LOC against the petitioner.
5. Compensation for loss of reputation and financial loss due to the LOC.

Detailed Analysis:

Legality of Look Out Circular (LOC) issued against the petitioner:
The petitioner challenged the LOC issued by the Bureau of Immigration at the instance of the Bank of India, which prevented her from traveling abroad. The LOC was issued due to the petitioner being a guarantor for a loan defaulted by respondent No.5. The court found that the LOC was issued without following fair, just, and reasonable procedures, violating Article 21 of the Constitution. The LOC was not communicated to the petitioner, nor was she given a post-decisional hearing, which is required by law.

Right to travel abroad under Article 21 of the Constitution of India:
The court reiterated that the right to travel abroad is enshrined in Article 21, as established in Satwant Singh Sawhney vs. D.Ramarathnam and Maneka Gandhi vs. Union of India. Any deprivation of this right must follow a fair, reasonable, and just procedure. The court held that the respondents failed to follow such a procedure, making the issuance of the LOC arbitrary and illegal.

Procedural safeguards in the issuance of LOC:
The court emphasized the need for procedural safeguards, including the communication of the LOC and reasons for its issuance to the affected person. The court noted that the Office Memoranda governing LOCs lacked provisions for these safeguards, making the procedure followed by the respondents unjust and unreasonable. The court directed that these safeguards be read into the Office Memoranda to ensure compliance with principles of natural justice.

Justification for issuance of LOC against the petitioner:
The court examined whether the issuance of the LOC was justified based on the facts and circumstances. It found that the petitioner was not an accused in any criminal case, and there was no FIR registered against her. The court held that the mere quantum of the loan default could not justify the issuance of an LOC. The court also noted that the respondent No.2 bank's apprehension of the petitioner fleeing the country was based on suspicion, not proof, and was insufficient to warrant an LOC.

Compensation for loss of reputation and financial loss due to the LOC:
The court acknowledged that the petitioner suffered a loss of reputation and financial loss due to being prevented from boarding her flight. The court awarded costs of Rs.1 lakh to be paid by the respondent No.2 bank to the petitioner as compensation.

Relief Granted:
1. The LOC dated 28.12.2021 issued against the petitioner was set aside.
2. The respondent No.2 bank was directed to pay Rs.1 lakh to the petitioner as compensation within four weeks.
3. Respondents No.1 to 4 were directed to expunge any remarks/endorsements/entries related to the LOC from the petitioner’s records/passport within one week and permit her to travel abroad.
4. The court directed that copies of the LOC and reasons for its issuance must be served to the affected person as soon as possible, and a post-decisional hearing must be provided. These requirements were to be read into the Office Memoranda concerning LOCs.

Conclusion:
The court allowed the writ petition, declaring the LOC issued against the petitioner as arbitrary, illegal, and violative of Articles 14 and 21 of the Constitution of India. The court provided comprehensive relief to the petitioner, ensuring her right to travel abroad and compensating her for the losses incurred.

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