Look-out circulars may be sustained against defaulting borrowers where departure threatens public sector bank and economic interests.

The right to travel abroad under Article 21 is subject to restriction by procedure established by law, and a look-out circular may be issued in exceptional cases where departure would be detrimental to India's sovereignty, security, integrity, strategic or economic interests, or the larger public interest. Applying that standard, the Court found the borrower had defaulted on overseas credit facilities from an Indian public sector bank, had executed guarantee and indemnity documents, and was at risk of evading creditors. It held that the bank's strategic interest was linked to national economic interest, making the circular valid. The appeal failed and interference with the circular was declined.

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Issues: Whether the look-out circular issued against the appellant was liable to be set aside for breach of the right to travel abroad and whether the case fell within the exceptional category permitting issuance of such a circular in the strategic interest of the public sector bank and India.

Analysis: The right to travel abroad forms part of personal liberty under Article 21, but it is subject to restriction by procedure established by law. The governing office memoranda on look-out circulars permit issuance in exceptional cases where departure of a person would be detrimental to the sovereignty, security, integrity, strategic or economic interests of India, or the larger public interest. On the facts, the appellant had availed credit facilities from the overseas branch of an Indian public sector bank, executed personal guarantee and indemnity documents, defaulted in repayment, his company was wound up in Singapore, and he was declared bankrupt there. The Court found that the bank had a reasonable apprehension that the appellant might leave India and evade creditors, and that the matter involved the strategic interest of a public sector bank whose health is linked to national economic interest. The Court also noted that, under the Singapore insolvency regime, the appellant could not freely enter and leave Singapore once he traveled there, reinforcing the exceptional character of the case.

Conclusion: The look-out circular was validly issued and did not warrant interference.

Final Conclusion: The appeal was unsuccessful, and the order refusing to interfere with the look-out circular was sustained.

Ratio Decidendi: A look-out circular may be sustained in an exceptional case where a defaulting borrower of an Indian public sector bank seeks to leave the country and the departure is found to be detrimental to the strategic interest of the bank and, consequentially, to India's public and economic interest.

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