2026 (1) TMI 774 - HC - Indian Laws

Look-Out Circulars to prevent flight in transnational economic-conspiracy investigations upheld, travel relief granted with conditions

Whether the Look Out Circular (LOC) should be withdrawn where accused are investigated for grave economic offences. HC held that LOC is a legitimate ... Seeking directions for closure of a Look Out Circular - commission of cognizable offence of grave economic offence having national and international ramifications - prevention from fleeing the country - prevention from influencing the witnesses abroad - Petitioner entered into a deep rooted conspiracy through a complex web of transactions having national and international ramifications - HELD THAT:- The facts of the present case are glaring and apparent. The Respondent is conducting the investigation with huge final financial ramifications and huge financial scam, in which there are allegations of involvement of the Petitioners, and public interest would undoubtedly be in peril if the Petitioners are permitted to leave the country. Reliance is placed on Nimmagadda Prasad vs. CBI [2013 (5) TMI 920 - SUPREME COURT]. Furthermore, a significant corollary of the diversion and investment of illicit money (black money) acquired by committing such crimes into furthering crimes and the hegemony of the criminal syndicate root, the threat to public security and eventually national security, would appear imminent as an ultimate course. The opening of LOC does not lead to violation of fundamental and statutory rights of the Petitioner in any manner. A person, who has committed grave offence, cannot as a matter of right claim a right to travel adopt. Reliance is placed on Justice K.S. Puttaswamy (Retd.) and Anr. vs. Union of India and Others [2017 (8) TMI 938 - SUPREME COURT] wherein the Apex Court observed that preservation that prevention and investigation of crime and protection of the revenue are amongst the legitimate aims of the State. The circumstances in which the Look Out Notice can be opened has been explained in the decision of this Court in Sumer Singh Salkan vs. Assistant Director & Ors. [2010 (8) TMI 1083 - DELHI HIGH COURT], wherein the Apex Court held, “Recourse to LOC can be taken by investigating agency in cognizable offences under IPC or other penal laws, where the accused was deliberately evading arrest or not appearing in the trial court despite NBWs and other coercive measures and there was likelihood of the accused leaving the country to evade trial/arrest”. It was further observed, “LOC is a coercive measure to make a person surrender to the investigating agency or Court of law. The subordinate courts’ jurisdiction in affirming or cancelling LOC is commensurate with the jurisdiction of cancellation of NBWs or affirming NBWs”. Both the Petitioners have been willingly cooperating during the investigation in the search and seizure proceedings and have also joined the investigation pursuant to the summons issued and have provided all the information and cooperated during the investigation. The detailed circumstances given in the Petitions and the detailed Replies filed by the Respondents, show that Petitioners have joined the investigation and have not been deliberately evading arrest. There is voluminous record to show that the Petitioners, with the permission of the Court, have travelled abroad many times, have never violated the terms of travel, and have always returned in terms of the permission granted for travel - The Petitioners shall keep the Trial Court informed about his place of residence and his updated contact details. In the event of travelling abroad, he may inform the Trial Court by way of an Application with his itinerary annexed and details of the intended placed of residence abroad. Petition allowed. Issues: (i) Whether the Look Out Circular (LOC) issued against the Petitioners was validly opened and can be continued or whether it should be quashed.Analysis: The legal framework applicable includes Article 226 of the Constitution, inherent powers under Section 482 Cr.P.C., principles governing issuance and continuation of LOCs as explained in Sumer Singh Salkan, and the authority to issue LOCs under governmental OMs and statutory schemes including Section 17A PC Act and obligations under PMLA investigations. LOCs are coercive measures used where an accused is evading arrest or there is a real likelihood of leaving the country to evade trial, or where preventing departure is necessary to protect public or economic interest. Relevant considerations include whether the person has been deliberately evading the process of law, whether NBWs or coercive proceedings exist, the extent of cooperation with investigation, risk of absconding or influencing witnesses, and whether sufficient reasons specific to the individual case justify continuation of LOC. The record shows the Petitioners joined investigation when required, furnished documents, had no NBWs or coercive proceedings against them, had a history of permitted foreign travel with compliance, and there were no established circumstances of deliberate evasion. The Respondents relied on allegations of serious economic offences and potential international ramifications, and on policy OMs permitting LOCs in suitable cases; however, the specific factual predicates required for continuing LOC against these Petitioners were not established on the material before the court.Conclusion: The Look Out Circular issued against the Petitioners is quashed and the Petitioners are permitted to travel subject to informing the trial court of residence and by filing an application with itinerary when travelling abroad.Ratio Decidendi: A Look Out Circular may be quashed where the material does not establish deliberate evasion of process, absence of NBWs or coercive proceedings, demonstrable flight risk, or other specific grounds justifying continuation of LOC; mere seriousness of allegations or policy OMs alone are insufficient without case-specific evidence of the requisites for maintaining LOC.