The Delhi High Court has held that a Look Out Circular (LOC), being a coercive executive measure that directly impairs the fundamental right to travel abroad under Article 21, can be issued and continued only strictly in accordance with law, and ordinarily only in cases involving a live cognizable offence, deliberate evasion of arrest or judicial process, and a real and proximate likelihood of absconding. It cannot be sustained merely on the basis of executive fiat, routine commercial default, bank debt recovery, guarantor/director status, or vague assertions of economic interest or public interest.
The Court stated that public sector banks, through their Chairman, Managing Director or Chief Executive Officer, lack lawful authority to seek issuance of LOCs, and LOCs issued solely at their behest are liable to be quashed. Further, the exceptional power under Clause 6(L) of the 2021 Office Memorandum must be narrowly construed and can be invoked only in rare and compelling cases involving a clear and grave threat to sovereignty, security, integrity, strategic interests, national/systemic economic interests, or larger public interest in the strict sense recognised by law.
The High Court emphasised that where a charge-sheet or complaint has already been filed and the criminal court is seized of the matter, the proper course is ordinarily for the affected person to approach that court or the originating authority for cancellation or modification of the LOC, since that court is best placed to assess necessity and proportionality on the basis of the investigative record. Accordingly, the Court quashed the impugned LOCs falling in the first two categories, subject to stated conditions regarding prior intimation, itinerary disclosure, and certain case-specific safeguards.
A Single Judge Bench of Justice Purushaindra Kumar Kaurav observed that the right to travel abroad is an integral facet of the right to life and personal liberty under Article 21, and that any restriction on this right must be founded on law and on a just, fair and reasonable procedure. Executive instructions cannot substitute legislative mandate when a fundamental right is curtailed.
The Bench observed that an LOC is not statutory in origin but arises from executive instructions of the Ministry of Home Affairs, and that the current regime is governed principally by the Office Memorandum dated Feb 22, 2021. That regime permits resort to LOCs in cognizable offences, and in non-cognizable matters generally only for intimation of travel movements, subject to a narrow exceptional category.
The Bench accepted and applied the position that LOCs are coercive measures of last resort and cannot be used routinely for law enforcement or debt recovery. It reiterated that recourse to an LOC may be taken only where there is a cognizable offence and the accused is deliberately evading arrest or process, coupled with a real and proximate likelihood of absconding. It observed that the inclusion of Chairmen, Managing Directors and Chief Executive Officers of public sector banks as authorities empowered to seek LOCs had been held bad in law, and that public sector banks do not possess legal authority to seek opening of LOCs.
The Bench further observed that mere inability to repay debt, absence of collateral, declaration of an account as NPA, or pendency of DRT or recovery proceedings cannot justify curtailment of the right to travel abroad in the absence of a criminal case and the legally required threshold. It also observed that expressions such as “economic interests of India” and “larger public interest” cannot be expanded to cover routine commercial defaults. The Bench emphasised that the authority opening an LOC must independently apply its mind and pass a speaking order based on specific and credible material. A mechanical or pro forma exercise, or action taken merely because a bank or originating agency requests it, is insufficient.
The Bench also observed that an LOC cannot be sustained merely because a person is a director, guarantor, shareholder or family member of a borrower or accused, unless there is specific material demonstrating direct and personal involvement. It expressly stated that guilt is personal and not vicarious in civil or criminal liability. The Bench stressed that continuance of an LOC is not indefinite and must be periodically reviewed. Where the subject has cooperated, has not evaded process, and no further interrogation or presence is demonstrably required, continuation becomes an unreasonable restriction on personal liberty.
Briefly, the petitions concern the validity and continuance of Look Out Circulars (LOCs) issued at the instance of public sector banks, investigating agencies and government departments/authorities. The matters are grouped into three categories: (i) LOCs issued at the behest of financial institutions/banks; (ii) LOCs issued by investigating agencies and ministries; and (iii) cases where the petitioner should be relegated to the forum which issued the LOC or before which the criminal proceedings are pending. The petitions raised a common legal issue: whether issuance and continuation of LOCs, which directly affect the constitutional right to travel abroad, were legally sustainable on the facts of the respective cases. Also, across the batch, numerous interim orders had permitted travel abroad, and in none of those cases had the petitioners absconded or attempted to flee.
In the category relating to bank-issued LOCs, the petitions, though factually distinct, shared a common feature: the LOCs had been issued solely at the instance of public sector banks, often in the absence of any subsisting independent criminal proceeding, or where the petitioner was not an accused, had been discharged, or was only a guarantor/former director without direct and personal complicity shown. In the category relating to investigating agencies and ministries, the LOCs had been issued by agencies such as SFIO, ED, Income Tax Department, CBI or MCA. In several of those matters, the petitioners had cooperated with investigation, were not accused in any cognizable offence, or no FIR had been registered, and had repeatedly travelled with permission and returned without violation.
Appearances:
Senior Advocates Manu Sharma, Siddharth Luthra, Siddharth Aggarwal, Sanjay Dewan, Bharat Chugh and Sachit Jolly; and Advocates Prachi Darji, Abhyuday Sharma, Seema Sharma, Utkarsh Kumar, Anshay Shandilya, Mohit Chaudhary, Kunal Sachdeva, Katyayani Vajpayee, Lakshay Yadav, Anand Mishra, Sachin Midha, Aditya Vikram Bajpai, Vijay Aggarwal, Pankush Goyal, Vishal Gourav, Yash Agrawal, Siddharth Bhardwaj, Barkha Rastogi, Geetansh Bharti, Pavitra Dixit, Apurva Upmanyu, Sumeer Sodhi, Arjun Nanda, Hardeek Goyal, Gautam Khazanchi, Pratibhanu Singh Kharola, Ayush Sachan, Pooja Deepak, Khush, Vismita Diwan, Gurpreet Singh, Manit Walia, Arundhati Katju, Jaispriya Poly, Ashish Chauhan, Anvita Dwivedi, Deepank Yadav, Nirvikar Singh, Maanish Choudhary, Jai Allagh, Vikrant Suri, Sohum Dua, Ghunaim Siddiqui, Manvi, Saloni Ray, Prateek Gupta, Pulkit Agarwal, Vishakha Kaushik, Rajkamal Singh, Praveen Chaturvedi, Jyoti Chaturvedi, Tarun Kumar, Shubhendu Bhattacharyya, Shubhit Shokeen, Vartul Vishnoi, Nimish Chib, Arshdeep Singh Khurana, Neha Nagpal, Malak Bhatt, Vishvendra Tomar, Nishtha Juneja, Sulakshan VS, Himanshu Kasturi, Shivani Sharma and Vidisha Bajaj, for the Petitioners
Advocates Radhika Bishwajit Dubey, Gurleen Kaur Waraich, Kritarth Upadhyay, Vivek Sharma, Amulya Dev Mishra, Rakesh Kumar, Sunil, Anupam S. Sharma, Abhiyant Singh, Vashisht Rao, Amisha P. Dash, Atul Guleria, Aryan Rakesh, Kush Sharma, Asiya Khan, Nishchay Nigam, Niharika Tanwar, Himanshu Pathak, Mohit Gupta, Nishant Gautam, Kavya Shukla, Vineet Negi, Vibhav V. Nath, Theresa, Ishkaran Singh Bhandari, Piyush Yadav, Samarendra Kumar, Vishnu Jaysaval, Priyanka Singh, Adarsh Raj Singh, Sumit Chanchal, Madhurendra Kumar, Juhi Rani, Saumya, Nitin, Nisha, Ripudaman Bhardwaj, Amit Kumar Rana, Santosh Kumar Rout, Amit Tiwari, Ayushi Srivastava, Ayush Tanwar, Arpan Narwal, Kushagra Malik, Ujjwal Tyagi, Chetanya Puri, Vidhi Gupta, Rishab Jain, Arun Aggarwal, Lovelesh Kukreja, Siddhartha Sinha, Shlok Chandra, Naincy Jain, Madhavi Shukla, Udit Dad, Jagdish Chandra Solanki, Maanya Saxena, Neeraj Kumar, Akshit Mohan, Shashwat, Nidhi Ramam, Arnav Mittal, Akshamishra and Satya Ranjan Swain, for the Respondents
