Liberty is one of the most essential requirements of the modern man. It is said to be the delicate fruit of a mature civilization. It is the very quintessence of civilized existence and essential requirement of a modern man”
- John E.E.D. in “Essays on Freedom and Power”
Look out Circular: What is it, when is it issued?
An LOC is a coercive measure to make a person surrender to the investigating agency or court of law. It is issued to make sure that an individual who is absconding or wanted by law enforcement agencies is not able to leave the country. It is mostly used at immigration checkpoints at international airports and seaports by the immigration bureau.
The police can also approach a court asking for the restriction of a person’s movement outside the country, when that person is a suspect and there is an apprehension that they may not join the investigation.
Who can issue an LOC?
The request for opening an LOC is made by an originating agency to Deputy Director of Bureau of Immigration, it can be issued by authorised officers, including an officer not below the rank of deputy secretary to the Government of India /joint secretary in the state government/concerned superintendent of police at district level, etc.
According to the existing guidelines, LOCs are initiated by a large number of agencies which includes the CBI, Enforcement Directorate, Directorate of Revenue Intelligence (DRI), SFIO, Income Tax Department and intelligence agencies among others, LOC can also be issued as per directions by criminal courts in India.
In 2018, after liquor baron Vijay Mallya fled to the U.K., the Ministry of Home Affairs (MHA) brought changes to the guidelines authorising chairman, managing director and chief executives of all public sector banks to generate LOCs.
The organisations issuing LOC’s have to provide details such as the name, passport number and other details along with reasons to open an LOC.
Statutory bodies like the National commission for women(NCW) cannot issue LOC’s because these bodies do not come under the head of “authorities concerned” and have been vested powers of civil courts but not that of criminal courts. If statutory bodies wish to open LOC a request with necessary facts has to be brought to the notice of law enforcement agencies like the police.
Power of banks to issue LOC’s
The banks vide Office Memorandum dated 12.10.2018 which is nothing but an extension of Office Memorandum dated 27.10.2010 are vested with the powers to issue LOC’s whereby Chairman Banks/Managing Director/ Chief Executives of all other Public Sector Banks have been added as 8(b)(xv) to the list of Officers already mentioned at clause 8(b), who can also request issuance of LOC however in a recent judgement of the Bombay High court titled Viraj Chetan Shah Vs Union Of India And Ors Writ Petition No 719/2020 dated 23.04.2024(Division Bench) the court held that
• the above OM authorising the Chairmen, Managing Directors and Chief Executive Officers of all public sector banks as authorities who may request the issuance of a Look Out Circular is quashed and
• That The Bureau of Immigration will ignore and not act upon any LOCs issued by any public sector banks
Audi Alteram Partem
The cardinal principal of law of Audi Alteram Partem (meaning let the other side be heard )is available in every proceedings. For instance, the aforesaid cardinal principal of law of Audi Alteram Partem is also available in the proceeding to declare the borrower/co-borrower as a wilful defaulter which has very wide and far reaching consequences. Master Circular on Wilful Defaulters bearing no. DBR.No.CID.BC.22/20.16.003/2015-16, July 1, 2015, issued by Reserve Bank of India specifically provides that an opportunity is must to be provided to the borrowers/co-borrowers seeking explanation i.e. to show cause as to why they should not be declared as wilful defaulters.
The right to make representation i.e. Audi Alteram Partem got fortified by the Hon’ble Supreme Court of India in the matter of State Bank of India vs. Jah Developers Ltd. 2019 (6) SCC 787.. Hon’ble High Court in the matter of Apple Sponge and Power Ltd. and Ors. vs. Reserve Bank of India and Anr. (W.P.(C) No. 306/2019), took the cognizance of the fact that principal of law of Audi Alteram Partem is not provided for in Master Circular on Frauds- Classification and reporting, and therefore, it directed that the Bank shall not take any further steps or actions to declare petitioners therein as fraud until next date of hearing.
It is pertinent to highlight that Courts have been considering this aspect from time to time and have been emphasizing that in the absence of Audi Alteram Partem not being available in any of the proceedings then such proceedings violates the basic rights of the person.
Plight of a traveller
“An uncontrolled power is the natural enemy of freedom”
-Harold Laski in ‘Liberty in the Modern State
The Circular gives unbridled powers to the investigating agencies and other agencies to request for issuance of LOCs in just routine and mechanical manner i.e. without application of mind.
It is Pertinent to mention that in case of LOCs, people come to know about LOCs against their names only at the Airport when they get prevented to travel abroad. Plight of prevented people can really be gauged from the fact :
(a) that they get isolated at Airport from family (this of course amounts to temporary detention/arrest) and;
(b) they are asked to be at Airport for hours as to either get clearance from immigration department or their luggage does not get offloaded for substantial hours and;
(c) they do not get refund of their flight tickets as well
(d) travel requirements of an individual can be classified as
• Medical emergency
• Family obligation
• business emergency
because of which a person has to urgently leave the country but since they are not informed about the LOC at the airport itself and no prior notice is given this may cause dire consequences.
Conditions for issuing LOC
Guidelines were laid down in Office Memorandum in pursuance of judgment dated 11.08.2010 passed by the Hon’ble High Court of Delhi in case titled “Sumer Singh Salkan versus Asst. Director & Ors.” 2010 (4) JCC 2401 wherein the questions raised in the reference are as under:
“A. What are the categories of cases in which the investigating agency can seek recourse of Look-out-Circular and under what circumstances?
B. What procedure is required to be followed by the investigating agency before opening a Look-out-circular?
C. What is the remedy available to the person against whom such Look-out-Circular has been opened?
D. What is the role of the concerned Court when such a case is brought before it and under what circumstances, the subordinate courts can intervene?
The questions are answered as under:
A. 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.
B. The Investigating Officer shall make a written request for LOC to the officer as notified by the circular of Ministry of Home Affairs, giving details & reasons for seeking LOC. The competent officer alone shall give directions for opening LOC by passing an order in this respect.
C. The person against whom LOC is issued must join investigation by appearing before I.O. or should surrender before the court concerned or should satisfy the court that LOC was wrongly issued against him. He may also approach the officer who ordered issuance of LOC & explain that LOC was wrongly issued against him. LOC can be withdrawn by the authority that issued and can also be rescinded by the trial court where case is pending or having jurisdiction over concerned police station on an application by the person concerned.
D. 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.”
Office Memorandum
The 2010 Office Memorandum laid down the guidelines for issuance of LOC. It is to be noted that 2010 Office Memorandum was necessitated because of the judgment of the Hon’ble Delhi High Court in the matter titled Sumer Singh Salkan versus Asst. Director & Ors.” 2010 (4) JCC 2401 In clause 8(h) of 2010 Office Memorandum, it is clearly stated that in cases where there is no cognizable offence under IPC or other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country. The originating agency can only request that they be informed about the arrival/departure of the subject in such cases. Further the office memorandum of 2017 stated that in exceptional cases LOC’s can be issued even in such cases where departure of person may be declined by the authorities if such person is detrimental to the bilateral relation with any country or strategic and/or economic interest of India or that he may indulge in terrorism or offences against the state so then departure may not be permitted in larger public interest. In 2018 Serious Fraud Investigation Office (SFIO) (Not below the rank of Additional Director) added as at 8(xiv) and Chairman (SBI Bank) /Managing Director/Chief Executives of all other Public Sector Banks added as at 8(xv) to the list of Officers already mentioned in 2010 Circular at its clause 8(b), who can request issuance of LOC.In the most recent amendment to the OM dated 22nd feburary 2021 clause 6(j) now stipulates that LOC’s will be automatically renewed unless a deletion request is made. This comes a complete reversal to the earlier one year life span provision of LOC’s.
Compliance requirement
The person against whom LOC is issued must join investigation by appearing before IO or should surrender before the court concerned or should satisfy the court that LOC was wrongly issued against him. He may also approach the officer who ordered issuance of LOC and explain the LOC was wrongly issued against him. LOC can be withdrawn by the authority that issued and can also be rescinded by the trial court where case is pending or having jurisdiction over concerned police station on an application by the person concerned.
Issuance of Loc’s-Unconstitutional
The Office Memorandum is itself bad in law and in violation of Article 14,19 (1) (g) and 21 of the Constitution. The liberty of a person is his fundamental right, and the same cannot be violated by the Investigating Officer by taking recourse to illegal actions of issuance of LOC, without being authorized under law to do so There is no provision in statutory enactment which prescribes the criteria and/or mechanism for the LOC. Thus, in absence of a legislative codification for issuance of the LOC, it remains creature of executive circulars. A person cannot be deprived of his fundamental rights to dignity and travel by an arbitrary executive action
Multiple LOC’S for the same cause of action
Today due to lack of clarity for the law of LOC’S a person suffers from triple jeopardy, for example a bank files a complaint with police/CBI. Thereafter CBI register a FIR basis the complaint and then further an ED case is registered on basis of the CBI FIR (scheduled offence). At times all the agencies/organizations are opening an LOC for the same person and the same cause of action.
Lack of clarity of forum
When a criminal complaint is filed in court or an FIR is registered and pursuant to that complaint/FIR an LOC is opened then one has to go to the trial court to get the LOC Quashed. When a bank initiates an LOC one has to go to the High court to get the LOC quashed if there is no criminal complaint filed in the court for the same , however the situation is unclear with respect to income tax matters because with the black money act becoming popular the income tax department opens LOC’s but there is no clarity as to which forum to address in order to get the LOC Quashed as one cannot address the trial court without a complaint.
View taken by Courts
A string of court orders recently have put the spotlight on this opaqueness and the mechanical way in which LOCs are generated but the MHA is no mood to relent. The opaque system under which LOCs are issued is such that a person will not be able to know if such a circular exists against him or her till they have booked the ticket and reached the airport.
Way Back in 1967, the Supreme Court in Satwant Singh Sawhney vs. D.Ramarathnam, Asstt. Passport Officer, AIR 1967 SC 1836 held that the right to travel abroad falls within the scope of personal liberty enshrined under Article 21 of the Constitution of India and that no person can be deprived of his right to travel except according to the procedure established by law. At the time the said decision was rendered ,there was no law regulating the right of a person to go abroad and that was the reason why the order of the Passport Officer refusing to issue passport to the petitioner in Satwant Singh case (supra) was struck down as invalid.
The Delhi High Court has observed that when a look out circular (LOC) of intimation is issued against a person, the authorities at the airport or any other port cannot restrain or detain such person on the pretext that intimation of arrival or departure is required to be given to the originating agency.
Justice Mukta Gupta observed that such an action would indirectly serve as a detentive or preventive LOC. It added that it is well settled that From clause (h) of para 8 of the O.M. dated 27th October, 2010, it is evident that unless a citizen is suspected to be involved in the commission or facing investigation or trial on the accusation of offences which are cognizable under the Indian Penal Code or other Statutes, the person can neither be detained, arrested or prevented from leaving the country and the originating agency can only seek intimation of his arrival and or departure”
In an order dated 28.01.2022 passed by Hon’ble High Court of Delhi in Shri Sathish Babu Sana vs Central Bureau of Investigation (W.P.(Crl) 249/2019) wherein the Hon’ble High Court of Delhi, directed the Respondent to recall the LOC against the Petitioner therein as the Respondent did not satisfies the test laid down in Sumer Singh Salkan Case.
Further in the matter of Central director of Income tax Vs Xiongwei Li who is the CEO of Huawei Technologies which is a popular Chinese multinational technology corporation the High Court of Delhi upheld the quashing of the LOC issued against the CEO stating that the offence against him is that of non-cognizable and bailable nature and as per the judgement of Sumer Singh Salkan Vs. Asst. Director &Ors. LOC can be opened against a person only when there is a cognizable and non bailable offence. Also considering the amendment in the circular that LOC can also be opened in exceptional cases where there is a risk to the sovereignty and integrity of India the court opined that with the material on record it cannot be said that there is any risk associated despite the fact that the respondent has no roots in India and is a Chinese national. conditions were imposed on him with regards to deposit of FDR and providing travel intimation to the agency and the LOC against him was quashed.
In 2024 in the infamous case of issuance of LOC against actor Rhea chakroborty the Bombay High court quashed the LOC and held that “LOCs cannot be issued as a matter of course, but only when there is/are reason/(s) to issue the same i.e. when a person deliberately evades arrest or does not appear in the trial Court or for any other reason.” The court underscored that the Chakrabortys had roots in society and had cooperated with investigators. Moreover, merely giving a gist of the FIR wasn’t enough and the CBI should have provided proper reasons for making the request of issuance of LOC.
Conclusion
It has been noticed that preventing a person to travel abroad has not even remotely addressed the issue for which LOC’s were issued or that a debt of a bank has been recovered because a person was denied permission to travel abroad .The fundamental right of personal liberty is paramount and cannot be compromised leaving issuance of LOC’s merely an arm twisting tactic. What we need are more robust measures to address issues rather than curtailing fundamental rights of people.