Public sector banks do not have power to issue ‘Look Out Circulars’: Bombay HC

Petitioners argued that such circulars infringed upon fundamental rights, specifically Article 21 of the Indian Constitution

The Bombay high court on Tuesday declared that public sector banks do not have the power to issue ‘Look Out Circulars’ (LOCs) against Indians and foreigners under the central government’s office memoranda. The verdict, delivered by justices GS Patel and Madhav Jamdar, addressed a series of petitions challenging the validity of such LOCs.

The Bombay high court. (HT File Photo)

The court clarified that while the central government’s office memoranda weren’t unconstitutional per se, empowering bank managers to issue LOCs was deemed arbitrary. Notably, the ruling does not impact existing orders issued by tribunals or criminal courts restricting individuals from travelling abroad.

LOCs, issued by the Union ministry of home affairs’ Bureau of Immigration, enable authorities to prevent individuals from leaving India. These circulars, first issued in 2010 and subsequently amended, faced legal scrutiny, particularly regarding the inclusion of clauses related to the “economic interest of India.”

Petitioners argued that such circulars infringed upon fundamental rights, specifically Article 21 of the Indian Constitution. They contended that the financial interests of banks shouldn’t equate to the economic interests of the nation.

In response, the MHA defended the validity of office memoranda, stating that they served broader national interests such as security, sovereignty, and counter-terrorism. The ministry emphasised the presence of checks and balances in the issuance of LOCs, and asserted that they didn’t amount to a blanket infringement of fundamental rights.