Court reviews Look Out Circular issuance, emphasizes need for reasonableness. Upholds 2017 Clause, allows LOC for economic interests.

The Court intervened in the issuance of a Look Out Circular (LOC), emphasizing the need for judicial review to ensure reasonableness. It upheld the respondents' reliance on a Clause introduced in 2017, allowing LOC issuance for economic interests. The Court found the impugned LOC valid beyond one year due to extensions. Despite suspicions of financial irregularities, the lack of initiated proceedings led to quashing the LOC. The Court directed the petitioner to inform authorities of travel plans for the next year, without affecting potential future proceedings.

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Issues Involved:
1. Whether the Court can interfere with the issuance of a Look Out Circular (LOC).
2. Whether the respondents can defend the LOC by relying on a Clause introduced vide the OM dated 05.12.2017.
3. Whether the impugned LOC can be held to have lapsed after one year from the date of its issuance.
4. Whether the petitioner’s case falls within the ambit of the Clause ‘detrimental to the economic interests of the country’ and the legality of continuing the LOC without any proceedings initiated against the petitioner.

Issue-wise Detailed Analysis:

1. Whether the Court can interfere with the issuance of a Look Out Circular (LOC):
The Court acknowledged that while the scope of judicial review in the issuance of a LOC is limited, it is not purely an administrative decision immune from judicial scrutiny. The Court emphasized that the adverse effects of a LOC on an individual's life necessitate judicial review to ensure that the decision to issue a LOC is reasonable and based on relevant factors. The Court concluded that it could indeed examine the legality of the impugned LOC and intervene if the decision was found to be without proper application of mind.

2. Whether the respondents can defend the LOC by relying on a Clause introduced vide the OM dated 05.12.2017:
The Court examined the OM dated 27.10.2010 and the subsequent amendment introduced by the OM dated 05.12.2017. It was determined that the amendment in 2017 was an integral part of the 2010 OM, allowing the issuance of a LOC even in the absence of involvement in a cognizable offence if the departure of the person was deemed detrimental to the economic interests of India. The Court found that the respondent's action in referring to the 2010 OM while invoking the 2017 amendment was appropriate and justified.

3. Whether the impugned LOC can be held to have lapsed after one year from the date of its issuance:
The Court referred to Clause 8 (i) of the OM dated 27.10.2010, which stipulated that a LOC is valid for one year unless renewed. However, the guidelines issued on 22.02.2021 reversed this position, stating that a LOC remains in force until a deletion request is received. The Court accepted the respondents' assertion that the LOC was extended from time to time and was in force when the new guidelines came into effect. Therefore, the impugned LOC had not lapsed automatically after one year.

4. Whether the petitioner’s case falls within the ambit of the Clause ‘detrimental to the economic interests of the country’:
The Court scrutinized the reasons provided for issuing the LOC, which included an unsigned draft agreement and WhatsApp chats suggesting financial transactions. The Court noted that despite these allegations, no proceedings under the Black Money Act, Income Tax Act, or Prevention of Money Laundering Act had been initiated against the petitioner in almost three years. The Court found that the mere suspicion of the petitioner’s involvement in financial irregularities without substantial evidence did not justify the continued curtailment of his right to travel abroad. The Court emphasized that the issuance of a LOC should be based on exceptional circumstances and not on routine or mechanical grounds.

Conclusion:
The Court quashed the impugned LOC and its extensions, directing the petitioner to inform respondent no.3 of his travel plans for the next year. The order clarified that this decision would not impact any proceedings that may be initiated against the petitioner in the future.

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