The issuance of Look Out Circulars by Public Sector Banks is unlawful without criminal charges, infringing on the fundamental right to travel under Article 21.

ORDER :

1. The Writ Petition is filed seeking issue of Writ of Mandamus, directing the respondents 1 and 2 to withdraw the 'Look Out Circular' issued against the petitioner on the basis of request made by the respondents 3 and 4.

2. It is the case of the petitioner that he was inducted as an Independent Director of Vijay Home Appliances based on his personal relationship with the Managing Director of the said Company. In the year 2009, the said Company approached the 3^rd respondent-Bank for credit facilities amounting to Rs.13 crores to run its operations and said facility was extended to the said Company. The petitioner herein stood as a personal guarantor for proper repayment of the loan amount and executed a Deed of Memorandum of Deposit of Title Deeds in respect of certain immovable properties. The petitioner ceased to be a Director of the Company with effect from 03.12.2012. After the petitioner ceased to be Director of Company, a letter was addressed to the 3^rd respondent-Bank to release the personal guarantee and collateral securities offered by the petitioner.

3. Subsequently, the Company was admitted into the Corporate Insolvency Resolution Process under the provisions of the Insolvency and Bankruptcy Code, 2016, the assets and liabilities of the Company were taken over by the Resolution Professional appointed by the NCLT. Thus, the Bank became a Financial Creditor and part of the Committee of Creditors constituted under the Act.

4. Subsequently, by order dated 09.01.2020, NCLT passed an order for liquidation of the Company. The properties offered by the petitioner as collateral securities were auctioned by the Bank and a sum of Rs.5 crores was recovered. The Fixed Deposit of the petitioner worth about Rs.50 lakhs was also encashed.

5. The 3^rd respondent-Bank filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of insolvency resolution process against the petitioner in respect of personal guarantee offered by him. The petitioner wanted to visit his son and attend convocation function of his son on 13.12.2024 and to take medical check up for him. Therefore, the petitioner made arrangements to visit cities of San Francisco and Houston, USA. However, he was stopped by the Immigration Officer at the Immigration checkpoint in the Chennai International Airport. At that point of time, it came to the knowledge of the petitioner that a 'Look Out Circular' was issued by the respondents 1 and 2 on the request made by the 3^rd respondent. However, the copy of the 'Look Out Circular' was not furnished to the petitioner. In these circumstances, seeking a direction to the respondents 1 and 2 to withdraw the 'Look Out Circular' issued by them, the petitioner has come before this Court.

6. The learned Senior Counsel appearing for the petitioner submits that the 3^rd respondent-Public Sector Bank is not entitled to issue any 'Look Out Circular'. In support of his contention, he relied on the judgment of the Bombay High Court in Viraj Chetan Shah vs. Union of India and others , 2024 SCC Online Bom 1195, whereunder the relevant clause of the Office Memorandum issued by the 1^st respondent, which enabled the Chairman/Managing Directors/Chief Executive Officers of all Public Sector Banks to make request for issuance of 'Look Out Circular' was quashed. Challenging the order passed by the Bombay High Court, the 1^st respondent filed special leave appeal in S.L.P.(C).Nos.17194 to 17230 of 2024. In the said batch of SLPs, the Apex Court passed the following order:-

“Pending consideration of these Special Leave Petitions on the interim stay, the private