Look Out Circular limits are exceptional; bank default alone cannot justify travel restraint without recorded public-interest reasons.

A Look Out Circular issued at a bank's instance cannot be sustained merely because a corporate loan remains unpaid. The governing office memoranda permit such restraint only in exceptional cases, and the originating authority must record a reasoned basis showing that the person's departure would harm sovereignty, security, integrity, bilateral relations, strategic interests, economic interests of India, or larger public interest. Where an amicable one-time settlement has been reached, substantial payment has already been made, and no criminal proceedings are pending, the travel restraint impermissibly curtails Article 21 liberty. On those facts, the LOC was quashed and the travel restriction set aside.

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Issues: Whether a Look Out Circular issued at the instance of a bank could be sustained where the dispute arose from a corporate loan default, an amicable one time settlement had been reached, substantial payment had already been deposited, and no criminal proceedings were pending against the person concerned.

Analysis: The governing office memoranda on Look Out Circulars permit such a restraint only in exceptional cases and require the originating authority to form a reasoned view that departure would be detrimental to the sovereignty, security, integrity, bilateral relations, strategic interests, economic interests of India, or larger public interest. The power is not meant to be exercised as a matter of routine in every bank default. The right to travel abroad is part of personal liberty protected by Article 21 of the Constitution of India, and it cannot be curtailed merely because a debt remains unpaid, particularly when no cognizable offence or criminal case is shown. The record showed that the lead bank had accepted the settlement, substantial payment had been made, and the dispute had substantially been resolved.

Conclusion: The Look Out Circular could not be sustained and was quashed in favour of the petitioner.

Final Conclusion: The writ petition succeeded and the restraint on travel was set aside because the preconditions for invoking the exceptional LOC power were not established on the facts.

Ratio Decidendi: A Look Out Circular based only on a bank default cannot be sustained unless the originating authority applies its mind and records a justified exceptional basis showing that the person's departure would adversely affect the specified national or economic interests; otherwise, it impermissibly infringes Article 21 liberty.

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