The Delhi High Court has quashed a Look Out Circular (LOC) issued against US national Malini Ramani in connection with a cheating case, holding that the continued operation of the LOC was unjustified in the absence of any allegation that she had evaded the investigation or failed to cooperate with the authorities.
The case arose from an FIR registered in January 2021 under Section 420 IPC on a complaint by the petitioner’s former business partner, who alleged that she had been induced to invest substantial sums in their partnership firm, M/s Bliss Design India, on assurances of high returns. The petitioner, a United States citizen and equal partner in the firm, submitted that the allegations stemmed from a failed business venture and financial disputes between partners. The petitioner argued that the dispute was essentially commercial in nature, relating to the firm’s business losses, closure of operations and financial disagreements between the partners, rather than a case of criminal cheating.
In December 2022, the Delhi Police issued a Look Out Circular (LOC) against her, which prevented her from travelling back to the United States. Challenging the LOC, the petitioner contended that she had consistently joined the investigation whenever called upon and that there was no justification for continuing restrictions on her international travel.
The Court took note of status reports filed by the police, which recorded that the petitioner had cooperated with the investigation and the probe remained incomplete largely because the complainant had failed to produce certain financial records, including the firm’s balance sheet, despite repeated notices.
The Court referred to Sumer Singh Salkan v. Assistant Director, 2010 SCC OnLine Delhi 2699, where it was held that an LOC is a coercive measure intended to secure the presence of a person who is deliberately evading arrest or trial and is likely to leave the country to avoid legal proceedings.
The Court also emphasised that the right to travel abroad forms an integral part of the right to life and personal liberty under Article 21 of the Constitution as held in Maneka Gandhi v. Union of India (1978) 1 SCC 248 and any restriction on this right must satisfy the tests of fairness, reasonableness and proportionality.
Noting that the investigation had remained pending for over five years and that the LOC had continued for more than three years without any material indicating non-cooperation by the petitioner, Justice Sachin Datta observed:
“Despite the prolonged pendency of the investigation, there is no material on record to indicate that the petitioner has either attempted to evade the process of law or failed to cooperate with the investigating agency.”
Accordingly, the Court quashed the LOC, subject to the petitioner filing an undertaking that she would continue to cooperate with the investigation, appear before the investigating agency or trial court whenever required, and furnish all relevant documents within her possession.
