Look-out circulars and repeated summons cannot be sustained on mere suspicion without reasonable grounds or credible material.

The Karnataka HC note states that repeated summons under Section 50 of the Prevention of Money Laundering Act and continued enforcement of a look-out circular cannot rest on suspicion alone. Where the person had already appeared, statements were recorded, and no cognizable offence or non-bailable warrant was shown, further coercive restraint required reasonable ground or credible material linking him to incriminating evidence. The article also notes that a writ challenge under Article 226 read with Section 482 CrPC was treated as maintainable because it concerned liberty, right to travel, and alleged abuse of process. The coercive restraint was therefore set aside, while authorities could proceed if fresh incriminating material later emerged.

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Issues: (i) Whether the continued enforcement of the look-out circular and repeated summoning of the petitioner under Section 50 of the Prevention of Money Laundering Act, 2002 could be sustained on the basis of suspicion alone without reasonable ground; (ii) Whether the writ petition challenging the impugned order and the look-out circular was maintainable under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether the continued enforcement of the look-out circular and repeated summoning of the petitioner under Section 50 of the Prevention of Money Laundering Act, 2002 could be sustained on the basis of suspicion alone without reasonable ground.

Analysis: The petitioner had already appeared on several occasions in response to summons and his statements were recorded. The materials placed did not show any cognizable offence registered against him, nor was there any non-bailable warrant issued against him. The basis for further restraint was only that he was related to an accused and that his information was considered unsatisfactory. Section 50 contemplates summons for investigation on valid grounds, and repeated summons or coercive restraint cannot rest on suspicion alone. In the absence of credible material showing reasonable ground or probable cause to link the petitioner with any incriminating material, continuation of the look-out circular became arbitrary and inconsistent with fairness and the protection against self-incrimination.

Conclusion: The continued enforcement of the look-out circular on suspicion alone was impermissible and liable to be set aside.

Issue (ii): Whether the writ petition challenging the impugned order and the look-out circular was maintainable under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The challenge was directed against action taken in the course of investigation that affected the petitioner's liberty and right to travel. The court treated the petition as one invoking its constitutional jurisdiction to prevent abuse of process and secure the ends of justice. Since the grievance involved infringement of fundamental rights and the legality of the coercive restraint, the objection as to maintainability was not accepted.

Conclusion: The writ petition was maintainable.

Final Conclusion: The petitioner succeeded in challenging the coercive restraint, and the impugned order and the enforceability of the look-out circular were brought to an end, while liberty was preserved for the authorities to proceed if incriminating material emerged later.

Ratio Decidendi: A look-out circular and repeated investigative summons cannot be sustained indefinitely on mere suspicion in the absence of reasonable ground or credible material, especially where the action curtails personal liberty and the right to travel.

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