Release of security after rescission of Look Out Circular: fixed deposit receipt could not be retained without continuing legal basis.

Where the foundational restraint had been rescinded and no fresh restraint subsisted, security furnished only to secure compliance with that restraint could not be retained without continuing legal basis. The Delhi High Court noted that the Look Out Circular had been cancelled, no fresh Look Out Circular was in force, and the investigation had culminated in an assessment order. On that basis, the continued retention of the fixed deposit receipt had no surviving justification, and the petitioner was held entitled to its release.

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Issues: Whether the petitioner was entitled to release of the fixed deposit receipt furnished in connection with the cancellation of the Look Out Circular after the Look Out Circular stood rescinded and no fresh Look Out Circular remained in force.

Analysis: The order permitting travel abroad showed that the fixed deposit receipt had been required in the context of the petitioner's travel and associated compliance conditions. The Look Out Circular had already been rescinded, the Department confirmed that no fresh Look Out Circular existed, and the investigation had culminated in an assessment order. In these circumstances, the continued retention of the fixed deposit receipt had no surviving basis.

Conclusion: The petitioner was entitled to release of the fixed deposit receipt, and the direction refusing release was unsustainable.

Final Conclusion: The petition succeeded and the trial court was directed to release the fixed deposit receipt to the petitioner.

Ratio Decidendi: Where the foundational restraint has been rescinded and no fresh restraint subsists, a security furnished only to secure compliance with that restraint cannot be retained without continuing legal basis.

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