Loan default alone cannot justify stopping guarantor from travelling abroad, Madras High Court says while rejecting bank’s review

The first respondent, a promoter-director and guarantor of M/s. GVR Infra Projects, had obtained an order in a writ petition concerning a Look Out Circular (LOC) issued at the Bank of Baroda’s request.

The principal debtor’s debt had been addressed under a resolution plan approved by the NCLT, but the LOC against the first respondent remained in place.

The Bank sought review, arguing that the LOC should continue because the first respondent remained a guarantor; that he had not disclosed a resolution professional’s recommendation to pursue further proceedings; and that a Supreme Court order required persons in his position to obtain permission before travelling abroad.

1. Whether the Bank established an error apparent on the face of the record or another basis warranting review of the order directing removal of the LOC.

2. Whether the first respondent’s alleged non-disclosure of the resolution professional’s recommendation constituted suppression of a material fact warranting review.

3. Whether the first respondent’s status as guarantor, or the Supreme Court order relied on by the Bank, justified continuing the LOC and restricting his right to travel.

Under Order XLVII Rule 1 of the Code of Civil Procedure, review is not an appeal in disguise and does not permit re-agitation of the merits; the Court relied on Parsion Devi v. Sumitri Devi, (1997) 8 SCC 715.

The Court also considered Article 21, applying the principle in Maneka Gandhi v. Union of India, (1978) 1 SCC 248, that the right to travel is protected as part of personal liberty and may be restricted only in accordance with law.

It further stated that a bank manager’s letter to immigration authorities is not, by itself, “law” for Article 21 purposes.

The Court found that the Bank’s grounds had not been raised when the writ petition was heard and amounted to an attempt to revisit the earlier decision rather than demonstrate an apparent error.

The resolution professional’s April 2026 recommendation had not led to further proceedings by the time of the writ petition; the Bank’s ongoing internal consultations did not make that recommendation a material fact whose non-disclosure warranted review.

The Court also noted that no fraud complaint had been lodged against the first respondent and held that his status as guarantor or defaulter did not, without more, justify preventing him from travelling abroad.

It treated the Supreme Court order cited by the Bank as confined to the petitioners in that case, not as a general direction applicable to the first respondent.

It dismissed the review petition without costs.