Bombay High Court: Public sector banks lack the authority to publish “Look Out Circulars”

According to the central government’s office memoranda, public sector banks are not authorized to issue “Look Out Circulars” against Indians and foreigners, the Bombay High Court ruled on Tuesday. The ruling, which was handed down by Justices GS Patel and Madhav Jamdar, addressed several petitions that contested the legality of these LOCs. The court explained that although the office memoranda of the central government were not inherently unlawful, giving bank managers the authority to issue letters of credit was considered capricious. Remarkably, the decision has no bearing on current judgments from criminal courts or tribunals that prohibit anyone from traveling overseas.

The Union Ministry of Home Affairs’ Bureau of Immigration issues Letters of Consent, which provide authorities the power to stop anyone from leaving India. Legal scrutiny was directed towards these circulars, which were initially released in 2010 and then changed. The presence of clauses pertaining to the “economic interest of India” in particular raised concerns. The petitioners claimed that these circulars violated basic rights, particularly the Indian Constitution’s Article 21.

They argued that the nation’s economic interests should not be equated with the financial interests of banks. The MHA retorted that office memoranda were legitimate since they supported larger national interests like security, sovereignty, and counterterrorism. The ministry emphasized that the issuing of LOCs had checks and balances and that doing so did not amount to a general violation of basic rights.