The Madras High Court held that a bank loan default cannot by itself prevent a person from travelling abroad if there is no criminal charge against the person.
The Court stated that the right to travel abroad is a fundamental right under Article 21 of the Constitution.
It observed that a bank’s request to issue a Look Out Circular (LOC) cannot be treated as “law” for restricting this fundamental right.
The case involved a guarantor for a loan who wanted to travel abroad to earn money and repay the debt.
The Court noted that when there is no fraud or criminal case, merely being a loan defaulter cannot force a person to remain in India.