<p>Banks cannot curtail the travel of a citizen on the ground that he/she is in default of a loan amount, the high court has said, authorising a city-based businessman to travel to the United Arab Emirates (UAE) and Saudi Arabia for business purposes.</p>.<p>The court noted that the businessman is not an accused in any crime registered, except the recovery proceedings before the Debt Recovery Tribunal, Bengaluru, where he is not a party to the proceedings.</p>.<p>Petitioner Himayat Ali Khan, a resident of Bengaluru city, challenged the March 7, 2022 Look Out Circular (LOC) issued by the Bank of Baroda and executed by the Bureau of Immigration. The bank claimed that there are recovery proceedings pending against Associate Décor Limited, a company which had taken a loan by mortgaging property worth Rs 199 crore. The petitioner is one of the directors of the company.</p>.<p>Khan argued that he is not a functional director of the company and also not the guarantor to the loan.</p>.<p>Justice M Nagaprasanna cited the Madras High Court judgement in the Karti P Chidambaram case and also the Delhi High Court judgement in the Rana Ayyub case and said that new guidelines have come into existence in such matters.</p>.<p>“The issuance of LOC, which comes about on March 7, 2022 with the Bank of Baroda being the originator, is bereft of reasons as to why the bank wants curtailment of travel of the petitioner. The excerpts of the loan documents nowhere indicate that the petitioner is the guarantor. The petitioner, even if it is construed to be that he is the director of the company, the travel of a citizen cannot be curtailed by the bank on the ground that he is in default of loan amount.</p>.<p>“Issuance of LOC has serious repercussions, first of which is that he will not be able to move out of the shores of the nation, notwithstanding any embargo placed by any court of law,” the court said.</p>.<p>The petitioner has been directed to submit an affidavit of undertaking before the high court that he would complete his work and come back to India within the time as indicated in the said affidavit. He has to intimate the bank about the date of travel and arrival, who in turn must communicate the same to the Bureau of Immigration.</p>
<p>Banks cannot curtail the travel of a citizen on the ground that he/she is in default of a loan amount, the high court has said, authorising a city-based businessman to travel to the United Arab Emirates (UAE) and Saudi Arabia for business purposes.</p>.<p>The court noted that the businessman is not an accused in any crime registered, except the recovery proceedings before the Debt Recovery Tribunal, Bengaluru, where he is not a party to the proceedings.</p>.<p>Petitioner Himayat Ali Khan, a resident of Bengaluru city, challenged the March 7, 2022 Look Out Circular (LOC) issued by the Bank of Baroda and executed by the Bureau of Immigration. The bank claimed that there are recovery proceedings pending against Associate Décor Limited, a company which had taken a loan by mortgaging property worth Rs 199 crore. The petitioner is one of the directors of the company.</p>.<p>Khan argued that he is not a functional director of the company and also not the guarantor to the loan.</p>.<p>Justice M Nagaprasanna cited the Madras High Court judgement in the Karti P Chidambaram case and also the Delhi High Court judgement in the Rana Ayyub case and said that new guidelines have come into existence in such matters.</p>.<p>“The issuance of LOC, which comes about on March 7, 2022 with the Bank of Baroda being the originator, is bereft of reasons as to why the bank wants curtailment of travel of the petitioner. The excerpts of the loan documents nowhere indicate that the petitioner is the guarantor. The petitioner, even if it is construed to be that he is the director of the company, the travel of a citizen cannot be curtailed by the bank on the ground that he is in default of loan amount.</p>.<p>“Issuance of LOC has serious repercussions, first of which is that he will not be able to move out of the shores of the nation, notwithstanding any embargo placed by any court of law,” the court said.</p>.<p>The petitioner has been directed to submit an affidavit of undertaking before the high court that he would complete his work and come back to India within the time as indicated in the said affidavit. He has to intimate the bank about the date of travel and arrival, who in turn must communicate the same to the Bureau of Immigration.</p>