Loanees do not mortgage their constitutional rights with banks: Madras High Court

The judge highlighted that the right to travel freely across the world was a fundamental right enshrined under Article 21 of the Constitution. | Photo Credit: FILE PHOTO

The mere fact that a citizen of the country either raises a loan from a bank or stands as a guarantor for a loan availed by someone else does not mean that he has mortgaged his constitutional and legal rights lock, stock and barrel with the bank, the Madras High Court has observed.

Justice V. Lakshminarayanan made the observation while dismissing an application filed by Bank of Baroda to review his August 24, 2026 order revoking a Look Out Circular (LOC) issued against Kondepati Ganga Prasad who was a guarantor for a high value loan availed by GVR Infra Projects.

The judge highlighted that the right to travel freely across the world was a fundamental right enshrined under Article 21 of the Constitution as declared by the Supreme Court in Maneka Gandhi Vs. Union of India (1978). In order to have a restriction of that right, it should be in accordance with law.

“The term ‘law’ under Article 21 implies a legislation. A letter written by the Manager of the bank to the Bureau Of Immigration cannot be treated as ‘law.’ If a nationalised bank is permitted to do this, then every private creditor or non-banking finance corporation would also be emboldened to approach the police for issuance of LOC to prevent their debtors from going abroad,” the judge wrote.