Taking a loan is very common nowadays, and sometimes there is a delay in repaying the loan in difficult situations. But it has often been seen that banks take a lot of strict steps to recover a loan, even to prevent the borrower from going out of the country Lookout Circular – Loc Let’s get it released.
But now the Delhi High Court has given a big and relief verdict in this matter. The court has made it clear that this arbitrariness of banks will no longer run!
What has Delhi High Court said?
The High Court recently hearing a case and said that the bank Can not issue a lookout circular against a person just for loan recoveryEspecially when there is no criminal charge like cheating of loan money or embezzlement.
The court believes that the lookout circular is a serious step and in every case, it cannot be used without thinking. This is not the right way to recover a loan.
In which case did this decision come?
This decision has come in the case related to the former director of a company. The person was the guarantor of the loan taken by that company. When the company failed to repay the loan, the bank requested to issue a lookout circular against the guarantor (former director) so that it could not leave the country.
Why the court canceled Loc?
The High Court canceled this lookout circular and many important things somewhere:
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No fraud: The court found that there was no criminal case of cheating or embezzlement of loan amount on that former director. He was just a guarantor.
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Right to go abroad: Court of Constitution Article 21 (Article 21) Citing this, he said that every Indian citizen has a fundamental right to travel abroad. The lookout circular directly affects this right.
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Burifices of banks wrong: The court commented that the banks cannot violate anyone’s fundamental rights (right to go abroad) just to recover their money. This is a violation of the law. Till there is no serious reason for any fraud or running away from the country, banks cannot issue LOC.
What does this decision mean?
This decision has brought great relief to all the people who are in a position of loan default and who were afraid that banks could take strict steps like lookout circular against them. It is now clear that banks cannot stop anyone from going abroad because of not being able to repay the loan. They have to use other legal methods to collect loans. This decision is an important step towards protecting the rights of the borrowers.
