Default borrowers, served with look out circular by MHA at the instance of Public Sector Banks, to seek permission from HC to travel abroad: Supreme Court

Supreme Court: In a batch of special leaves to appeals by the Union/ petitioners against a decision of the Bombay High Court in Viraj Chetan Shah v. Union of India, 2024 SCC OnLine Bom 1195, wherein disposing of several petitions, Clause 8(b)(xv) of the 2010 amended Office Memoranda (equivalent to Clause 6(B)(xv) of the 2021 consolidated OM) which includes the Chairmen, Managing Directors and Chief Executive Officers of all public sector banks as authorities who may request the issuance of a Look Out Circular (‘LOC’), was quashed, the Division Bench of BV Nagarathna and N. Kotiswar Singh, JJ. said that while an interim stay is imposed on the impugned decision, the respondents/writ petitioners before the High Court shall seek permission from the High Court if they wish to travel abroad.

Further, the Court said that if such an application, seeking permission to travel abroad is filed before the High Court in the disposed of writ petitions, the same shall be considered and disposed of expeditiously.

The Court also clarified that pendency of the present SLPs before the instant Court would not come in the way of the present petitioners for formulating a fresh Office Memorandum (OM), if found necessary.

In the impugned verdict, the High Court was posed with question of constitutionality of LOCs issued by the Ministry of Home Affairs at the instance of one or the other of various public sector banks, issued under a set of OMs. The OMs were not under challenge in its entirety, but only the portion of amendment, which allowed public sector banks to request the issuance of a LOC against individuals who were default borrowers. The High Court quashed several LOCs and directed the Bureau of Immigration to ignore and not act upon any LOCs issued by any public sector banks.