Look-Out Circular restrictions need statutory basis; pending investigation alone cannot justify curtailing the right to travel.

A Look-Out Circular cannot be sustained unless the governing legal and guideline-based conditions for restricting departure are met. The Court held that the SFIO investigation was still pending, no interim or final investigation report had been submitted, and the material did not establish a cognizable offence or any completed statutory basis for prosecution under the Companies Act. It also rejected reliance on public interest, economic interest, and mere pendency of investigation, finding no material that travel would jeopardise national interests or that the person would evade process or fail to return. The travel restriction was therefore quashed and the petitioner was allowed to travel.

---

---

Issues: (i) Whether the Look-Out Circular issued against the petitioner could be sustained when no cognizable offence under the penal law had been shown and the SFIO investigation had not culminated in the statutory investigation report; (ii) Whether the issuance and continuation of the Look-Out Circular was justified on the ground of public interest, economic interest, and pendency of investigation.

Issue (i): Whether the Look-Out Circular issued against the petitioner could be sustained when no cognizable offence under the penal law had been shown and the SFIO investigation had not culminated in the statutory investigation report.

Analysis: The guidelines governing Look-Out Circulars contemplate recourse to such a measure in cognizable offences under the penal law, while also recognising exceptional cases where departure may be restricted only on specified grounds. The material before the Court showed that the SFIO investigation was still in progress, no interim report or investigation report had been submitted, and the respondents were proceeding on the basis that the matter only prima facie appeared to involve fraud under the Companies Act. The statutory scheme under Section 212 of the Companies Act, 2013 distinguishes between an interim report during investigation and an investigation report after completion of investigation, and prosecution under that provision is contemplated only after examination of the completed investigation report. In that background, the basis for sustaining the restriction was not established.

Conclusion: The Look-Out Circular was not sustainable on the stated footing.

Issue (ii): Whether the issuance and continuation of the Look-Out Circular was justified on the ground of public interest, economic interest, and pendency of investigation.

Analysis: The Court held that curtailment of travel must rest on legally sustainable grounds and not merely on the magnitude of the alleged dues or on a general assertion that investigation may be affected. The respondents did not place material showing that the petitioner's departure would jeopardise the sovereignty, security, integrity, or economic interests of India, or that he was likely to evade the process or not return. The right to travel is part of personal liberty and cannot be curtailed without satisfying the governing conditions for such an exceptional restraint. The cited decisions on the facts were found distinguishable.

Conclusion: The justification based on public interest and pendency of investigation was rejected.

Final Conclusion: The impugned Look-Out Circular was quashed and the petitioner was permitted to proceed without the travel restriction remaining in force.

Ratio Decidendi: A Look-Out Circular cannot be sustained in the absence of the statutory and guideline-based preconditions for restricting departure, and a mere pending investigation or alleged financial exposure does not by itself justify curtailment of personal liberty and the right to travel.

---