In the matter of Noor Paul v. Union of India & Ors. The Hon’ble Punjab & Haryana High court held that:-
Look Out Circular – Court quashes Look Out Circular issued without application of mind at the instance of Bank of India for alleged loan default- Asks Bank to pay Rs 1 Lakh compensation to woman who was stopped from foreign travel.
Look Out Circular – In our opinion, non-supply of a copy of the LOC to the subject of the LOC at the time the subject is stopped at the airport for travel abroad, non-supply of reasons for issuing LOC , and absence of a post decisional hearing to the subject of the LOC, is not just, fair and reasonable procedure. It is violative of Art.21 of the Constitution of India -It is desirable that these requirements be read into the Office Memoranda relied upon by the said respondents since it is settled law that unless there is a clear mandate to the contrary, principles of natural justice must be read into a law even if it is silent on the aspect.
Look Out Circular – We are of the opinion that the quantum of the alleged default by the borrower by itself cannot be the basis for seeking issuance of an extreme process like an LOC for restricting the personal liberty of the petitioner to travel outside the country without something more. (Para 69) Look Out Circular -it is incumbent upon the issuing authority of the LOC to ascertain at least whether the grounds disclosed in the LOC and/or the request for LOC fall within the four corners of the OM issued in that regard prima facie, though it may not be able to go into the merits/demerits of the allegations made against the subject by the originating authority.
