Banks Cannot Withhold Passport Or OCI Card As Security In Lieu Of Loan Closure: Karnataka High Court

The Karnataka High Court has held that banks cannot withhold the passport of an accused even if it is surrendered to it voluntarily by the accused, who is charged for the offence of cheating and criminal conspiracy.

A single judge bench of Justice M Nagaprasanna allowed the petition filed by one Koshy Varghese and said, “The action of the Bank in retaining the British passport of the petitioner and the Overseas Citizen of India Card is held to be illegal.”

The petitioner, a citizen of the United Kingdom holding an OCI card was booked under Sections 120B, 406, 418, 420, 423, 424, 465, 467, 468, 471 and 34 of the IPC, pursuant to a complaint registered by the then Vijaya Bank (now Bank of Baroda).

As per the Bank, the petitioner on his own volition on 03-10-2018 gave an undertaking to close two housing loan accounts. Since, the undertaking was not adhered to, the Bank directed surrender of his passport.

Petitioner claimed he was forced to hand over original passport and OCI card. He argued that the Bank has no right to withhold the passport or the OCI card, as the power of withholding a passport issued by United Kingdom is not available to the Bank and insofar as OCI card is concerned, it is only the Ministry of External Affairs under the Foreigners Act which can take any action.

The Bank denied the allegations and pointed to a paragraph in the undertaking with regard to the petitioner depositing the original passport voluntarily.

The bench on going through the records said, “Even if the petitioner had offered by way of an undertaking that he would deposit the OCI card and the passport with the Bank authorities, the Bank had no jurisdiction to keep it beyond 15 days. It is the property that has to be transferred to the authorities who have issued the passport or the OCI card.”

Court said since the passport in question was not issued by any Indian authority, "Therefore, no authority in this country would have the power to withhold the passport or impound the same. The Bank, on the face of it, did not have any power even to retain the passport for four long years.”

It added that the OCI card having been issued by the Foreigners Regional Registration Office, "This card as well could not have been withheld by the Bank even if it is handed over voluntarily. It is the property of FRRO and the Bank had to transmit it for safe keep at the FRRO and the FRRO initiating proceedings if necessary in accordance with law.”

Court thus criticized the Bank for withholding the Petitioner's passport and OCI card for four long years "Both the acts, on their face, are without jurisdiction. Even if it is voluntarily handed over to the Bank, the Bank does not have the authority to keep the aforesaid documents with it. The Bank ought to have immediately intimated the authorities who could have taken up proceedings in accordance with law,” it said.

Accordingly it allowed the petition and directed the Registry to hand over the passport and the OCI card (as deposited by the Bank), to the petitioner, after due verification.

Appearance: Advocate I.S.Dilip Kumar, for petitioner,

CGC Aditya Singh, for respondent No.1.

Advocate Nagaraj Damodar, for R2 and 3.

Advocate Navya Shekhar, for respondents 4 and 5.

Citation No: 2024 LiveLaw (Kar) 25

Case Title: Koshy Varghese AND Union of India & Others

Case No: Writ Petition No 5628 OF 2022.

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