Court Upholds Right to Travel Abroad, Cites Lack of Fraud Allegations as Grounds for Quashing LOC
In a significant ruling, the Delhi High Court, presided over by Justice Jasmeet Singh, has quashed a Look Out Circular (LOC) issued against Tushar Dey, a former non-executive director of Birla Aircon Infrastructure Private Limited (BAIPL). The court found that the LOC, which was issued by a bank due to loan defaults by the company, violated the fundamental right to travel abroad as guaranteed under Article 21 of the Indian Constitution.
The petitioner, Tushar Dey, had resigned from the board of BAIPL in 2013, long before the company was declared a non-performing asset (NPA) in 2014. Despite this, in May 2022, Dey discovered that he was listed as a wilful defaulter by the bank, without having received any prior notice or opportunity to contest the claim. His subsequent attempt to travel abroad in June 2026 was thwarted by immigration authorities at Indira Gandhi International Airport, who cited the LOC as the reason for stopping him.
The court noted that the LOC was issued without any allegations of fraud, siphoning of funds, or any criminal proceedings against Dey. The bank's action was deemed arbitrary, as it sought to recover debts solely through the LOC, bypassing established legal channels such as the SARFAESI and IBC Acts, which had already been initiated against BAIPL.
In its judgment, the court reiterated the principles laid out in the landmark case of Maneka Gandhi v. Union of India, emphasizing that the right to travel abroad cannot be curtailed except through fair, just, and reasonable legal procedures. The court highlighted that the arbitrary issuance of LOCs by banks as a debt recovery tactic is impermissible, especially when no criminal allegations exist against the individuals involved.
The ruling also addressed a factual inaccuracy in the bank's counter affidavit, which mistakenly identified Dey as a personal guarantor. The bank later admitted this error, and the court observed that the petitioner’s right to travel should not be impeded merely due to his past association with the company as a non-executive director.
Justice Singh concluded that the LOC against Tushar Dey was unsustainable, as it infringed upon his fundamental rights without any compelling justification. The court ordered the immediate cancellation of the LOC and directed the Bureau of Immigration to implement the order.
This decision reinforces the judiciary's stance on protecting individual liberties against arbitrary administrative actions, ensuring that fundamental rights are not curtailed without due cause.
Bottom Line :
Right to travel abroad is a fundamental right under Article 21 of the Constitution of India and cannot be curtailed arbitrarily through a Look Out Circular (LOC) unless there are compelling reasons or allegations of fraud or siphoning of funds.
Statutory provision(s): Article 21 of the Constitution of India, Office Memorandum No. 25016/19/2017-Imm dated 12.10.2018, SARFAESI Act, IBC Act, Maneka Gandhi v. Union of India, (1978) 1 SCC 248
Tushar Dey v. Union of India, (Delhi) : Law Finder Doc id # 2963418
