Misuse Of Look Out Circulars
Author: LawSphereX
Category: General Law
Published:
Updated:
MISUSE OF LOOK OUT CIRCULARS
Advocate Aniket Ojha, KIIT Law School
ABSTRACT
Hon’ble Supreme court in the case of Maneka Gandhi versus Union of India1 had held that the “Right to travel abroad” is a fundamental right vested upon the citizens by the Constitution of India and had stated that an individual cannot be denied of his right unless there is a law allowing the state to do so and such law should be fair, just and reasonable. But, A Look Out Circular, or 'LOC' as it is informally known, is an administrative instrument that allows the issuing authority ('Originating Agency') the ability to restrict the individual’s international travel.
While Look Out Circulars(“LOC”) are an efficient administrative tool for apprehending offenders attempting to escape the country, they have been ruled to violate Article 21 of the Constitution of India if due process is not followed or if a request for issuance of LOC is filed by an authority, empowered by the Ministry of Home Affairs, lacks validity. It has been observed in several cases in the past few years that Issuance of LOCs by Public Sector Banks have been held to be arbitrary and in violation of an individual’s Fundamental Right whereby the request to issue an LOC is aimed towards recovery of bank dues and not towards any grave charge against the accused. This article aims to highlight the origins of Look Out Circulars and address the rising concerns of their misuse by authorized officials.
Keywords: Look Out Circular, LOC, Recovery, Administrative, Authorizing, Misuse, Office Memorandum, Issuance, Closure, PSBs, Bureau of Immigration.
1 AIR 1978 SC 597 (SC)
INTRODUCTION
Look Out Circulars (“LOCs”) refers to a document that is issued in order to track, monitor, and prohibit the travel of those who are obliged to face criminal prosecution in India and who are accused of cognizable offenses. LOCs are frequently used by law enforcement organizations as a coercive tool to prevent anyone who is wanted or suspected by the police or an investigating agency from entering or departing the nation by specific land, air, and sea ports. When a LOC is issued against an individual, it is sent to all arrival and departure points around the nation, including airports and seaports. This step ensures that the Bureau of Immigration is swiftly notified, allowing them to take the appropriate steps to detain the individual if they attempt to abscond from the country.
LOCs are frequently utilized in situations involving financial crimes such as fraud, money laundering, and economic offences. In such circumstances, where the accused may have significant wealth and foreign connections, the possibility of absconding increases, which makes the use of LOCs critical. There is no legal definition of LOC which was held by Hon’ble Delhi High Court in the case of Sumer Singh Versus Assistant Director and others2. Nonetheless, it is interpreted as an instrument for carrying out a legal mandate, which serves as a form of notification, circular, or instruction from a government agency w. r. t an individual who is a named accused in a crime. Thus, if we are to sum up what is an LOC, it can be said to be a disciplinary tool which aims to:
1) Keeping a watchful eye on people's movements to stop them from entering or exiting
the country,
2) Ensuring such people surrender themselves before the Courts or the concerned
investigating agencies.
3) Ensuring their presence in front of courts or Investigating Agencies.
2 (2010) ILR 6 Delhi 706
Furthermore, the Ministry of Home Affairs as per the latest Office Memorandum dated 19th September, 2018 have delegated certain authorities who can request the issuance of an LOC against an individual which include the Central Bureau of Investigation (“CBI”), Enforcement Directorate(“ED”), Directorate of Revenue Intelligence (“DRI”), Income Tax department and to certain police authorities in different states. Apart from the authorities mentioned above, no other authority can request for issuance of an LOC. The statutory basis for lookout circulars is rooted in the vast powers provided to various government entities to control immigration and prevent persons from fleeing during an enquiry or judicial action. Such authority is often obtained from numerous statutes and regulations governing immigration and border control. Some of these include:
1 The Passports Act, 1967
This Act establishes a legal basis for the issuing and revoking of passports in India. The act authorises government officials to confiscate or revoke a passport in the interest of India's sovereignty, integrity, and security.
2 The Foreigners Act, 1946
This Act authorises government agencies to supervise the entry, stay, and departure of foreigners in India.
3 Bharatiya Nagarik Suraksha Sanhita, 2023
This Act does not mention or set out procedures for regulations of individuals against whom LOCs have been issued but it gives power to police authorities to detain individuals attempting to flee during the course of Investigation. ORIGINS OF LOOK OUT CIRCULARS In 1979, the Ministry of Home Affairs(“MHA”) issued an Office Memorandum dated 5th September, 1979 stating that a Look Out Circular can be issued to monitor the entry and exit of individuals into the country whose movement have been restricted by various investigating agencies. Thus, the Government Authorities could issue an LOC by seeking permission from certain entities like the CBI, Customs Authority or the Income Tax Department.
But this proved to be a cumbersome process as only a few of the authorities could issue a Look Out Circular and since there was absence of any provision for extension of Validity of an LOC, the validity period existed for a period of one year only. Subsequently the Ministry of Home Affairs in 2000 issued another Office Memorandum dated 2nd December, 2000 whereby it laid down steps to be taken in order to issue a Look Out Circular against a citizen of India. This office memorandum was challenged before the Hon’ble Delhi High Court in the case of Sumer Singh Versus Assistant Director(Supra) whereby the court laid down guidelines for issuance and closure of Look Out Circulars. However this proved to be ineffective as there was misuse and abuse of Look Out Circulars.
To counter this abuse, the Ministry of Home Affairs released another Office Memorandum dated 27th October, 2010 which laid down a detailed and comprehensive process and power to request for issuance of Look Out Circulars. Subsequent to 2010, Ministry of Home Affairs amended the 2010 Office Memorandum by another Office Memorandum dated 19th September,
201 which gave power to the Officers of Serious Fraud Investigation Office(“SFIO”) to open
and issue Look Out Circulars. This Office Memorandum was conveyed to the public via press release dated 24th July, 2019 which specified that the officers of Public Sector Banks(“PSBs”) had the power to request the issuance of Look Out Circulars against Willful Loan Defaulters or Economic Offenders. Since there is no specific statute to govern the issuance and regulation of Look Out Circulars, the only governance and regulation of LOCs are through Circulars and Office Memorandums. Subsequently the Ministry of Home Affairs issued yet another Office Memorandum dated 22nd February, 2021 further amending the framework of Look Out Circulars. The current framework governing LOCs is integrated in the Consolidated Guidelines provided by the Ministry of Home Affairs, recorded under Office Memorandum dated February 22, 2021, are as follows:
1. The pro forma request form should identify the particular action the Bureau of
Immigration will conduct against the relevant individual.
2. The request to issue the LOC must be accompanied by the authorization of appropriate
authorities (Deputy Commissioner, Superintendent of Police, District Magistrate, etc.); and
3. If the LOC has been stayed by a court, it must be communicated to the Bureau of
Immigration for deletion. Thus, under the current LOC regime, various government authorities that have been delegated with the power to request and issue LOCs, including the Ministry of Home Affairs, Ministry of Economic Affairs, The Department of Customs, Income-tax department, Central Bureau of Investigation, Regional Passport Officers, various police authorities, and even Public Sector Banks, can request for issuance of a Look Out Circular for their respective investigation, enforcement, or recovery purposes. POWER TO ISSUE LOOK OUT CIRCULARS The power to request an issuance of Look Out Circular was clarified by an Office Memorandum dated 19th September, 2018 added a few authorities who could infact request for an LOC which included the Chairman of State Bank of India (A Public Sector Bank), Managing Directors and CEOs of Public Sector Banks.
Apart from these few, the authorities which are empowered, as of now, to request an issuance of Look out Circular can be:
1) The Deputy Secretary to the Government of India; or
2) Joint Secretary in the State Government; or
3) District Magistrate of the concerned district; or
4) Superintendent of Police of the concerned district; or
5) Superintendent of Police or an officer of equivalent authority working in the Central
Bureau of Investigation; or
6) Zonal Director in Narcotics Control Bureau(NCBs) or an officer of equivalent authority
in the headquarters of NCBs; or
7) Deputy Commissioner or an officer of equivalent authority in the Directorate of
Revenue Intelligence/ Central Board of Direct Taxes or Central Board of Excise or Customs; or
8) Deputy Secretary to R & AW; or
9) An officer not below the rank of Superintendent of Police in the National Investigation
Agency; or
10) Assistant Director of Enforcement Directorate; or
11) As per directions of any criminal courts in India.
MISUSE OF LOOK OUT CIRCULARS
In the past few years, post amendment to the Office Memorandum dated 27th October, 2010, there has been a rising concern for issuance of Look Out Circulars by the Public Sector Banks. LOCs can be issued against those who are attempting to evade arrest in court or who have a non-bailable warrant issued against them and are likely to evade arrest/trial. According to the procedure established in the 2010 OM, the authorities in charge of granting LOCs must follow restrictive guidelines. LOCs cannot and should not be opened frequently. Given that the issuing of a LOC might hamper the Fundamental rights of the persons concerned, it is necessary to take that step with extreme prudence.
Unfortunately, in certain circumstances, this caution is not followed as LOCs are opened against individuals as soon as the investigation into a cognizable offence is initiated, either through a FIR or an administrative order. Public Sector Banks would request for opening a Look Out circular against an individual classified as a borrower or a personal guarantor to a company when the accounts are declared to be Non- Performing Assets. It is also to be observed that there has been multiplicity of LOCs since multiple authorities have been vested with the authority to open and issue LOC. For example, various government agencies have been authorized by the 2010 Office Memorandum to request for issuance of LOC. These agencies have their own investigation towards individuals. Often these agencies use the power to issue LOCs as a coercive method to establish attendance of that individual.
Since multiple agencies having different investigations issue LOCs, this leads to multiplicity of LOCs and to state, in practice, such LOCs are not disclosed to the individual. The remedy available for such injustice is to approach the Court for setting aside of such Look Out Circular. The issuance of LOCs is neither communicated nor disclosed to the individual in question so the only remedy to know the existence of such LOCs is to make a prayer before the court to determine how many LOCs have been issued against that individual. Requesting an issue of Look Out Circular is simple because it just demands just basic information of a citizen, hence these Public Sector Banks are carelessly issuing Look Out Circulars against Indian residents.
Rather than following the intention behind enactment of Look Out Circulars and the need to issue them, this very instrument is being used arbitrarily leading to coercion and harassment. Some factors common to the issuance of LOCs by banks could be:
1. When LOC is issued against a person, no prior notice is given to that individual.
2. No opportunity of a hearing is given either before or after the issuance of an LOC.
3. There is no body against which you can file your representation against the LOC issued.
4. No Copy of LOC is given to the individual against whom the LOC has been issued. In
certain cases where the individual asks for a copy to be shown/provided, the authorities deny them by an excuse that such document is confidential and not available to Public Domain. Most of the time when the individual can only see such LOC is before the court where such LOC has been challenged. The further amendment to the Office Memorandum dated 27th October, 2010, empowering the Public Sector Banks to issue LOCs, was an oversight on the part of Government whereby any Public sector Bank can approach the Bureau of Immigration and request to issue an LOC against a citizen where the only reason to do so is money recovery and not on the apprehension that the citizen might abscond. CASE LAWS The Regime of LOCs has been widely interpreted by the judiciary in various cases. Some of them include:
1. Sumer Singh Salkan Versus Assistant Director & others(supra), Hon’ble Delhi High
Court laid down the procedure for opening and closing an LOC and answered some questions raised by the lower court: A. What are the categories of cases in which the investigating agency can seek recourse of Lookout-Circular and under what circumstances? - The remedy is with the investigating agency in cognizable offenses under the IPC or other penal laws, where the accused was actively evading arrest or not appearing in trial courts despite having Non- Bailable Warrants and other coercive measures and there was a likelihood of the accused departing the country to evade trial/arrest. B. What procedure is required to be followed by the investigating agency before opening a Lookout-circular? - The Investigating Officer shall make a formal request for LOC to the officer as specified in the Ministry of Home Affairs circular, providing details and reasons for issuing LOC.
The competent officer alone shall give orders for opening the LOC by passing an order in this respect. C. What is the remedy available to the person against whom such Look-out- Circular has been opened? - The person against whom an LOC is issued must participate in the investigation by appearing before the Investigating Officer, surrender before the relevant court, or demonstrate to the court that the LOC was issued incorrectly. He may also approach the person who ordered the issuing of the LOC and explain that it was issued in error against him. LOC can be revoked by the authority that issued it and struck down by the trial court if the case is pending or has jurisdiction over the relevant police station on an application by the individual concerned. 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? - LOC is a coercive measure used to force a person to surrender to the investigative agency or a court of law. The subordinate courts' jurisdiction in validating or cancelling LOC is directly proportionate with the jurisdiction in canceling or NBWs.
2. Vikram Sharma & Ors Versus Union of India & Ors3, Hon’ble Delhi High Court
held that that while criminal courts handling matters with respect to criminal law enforcement can issue directions that might give rise to issuance of an LOC against the
3 171, (2010) DLT 671
accused, there is no such power vested either under the Code of Criminal Procedure or the Passports Act or under the circular issued by the Ministry of Home Affairs or in statutory bodies like the National Commission for Women. Hon’ble court held that the LOC was issued only on the request by the National Commission for Women. However, neither the National Commission for Women nor the Foreigners Regional Registration Office were aware of the correct legal position which was explained in the affidavit by the Ministry of Home Affairs. Requesting the issuance of LOC could not have come from the National Commission for Women rather it had to come either from state or central government, also in the prescribed form by authorities of certain rank.
3. The Landmark judgment of Hon’ble Bombay High Court’s Division Bench consisting
of Justice G. S. Patel and Justice Madhav J Jamdar in the case of Viraj Chetan Shah Versus Union of India and others4 highlighted the misuse of issuance of LOCs and their execution. The following was held: - Hon’ble bench referred to A. K Gopalan Case5 where it was held that “Law in that article means enacted law and it is conceded that the state has not made any law depriving or regulating the right of a person to travel abroad”. - Reliance was also placed on the case of Kharak Singh Versus State of U. P6, where putting the petitioner under monitoring violated his Fundamental Right under Article 21 of the Constitution of India. - Hon’ble bench also highlighted the enactment of Passports Act, 1967 and held that “Law” under Article 21 means a statute, a statutory rule or a statutory regulation. Mere executive action does not reach the level of “Law”.
- Hon’ble bench observed that the process of issuance of LOC, their liability, responsibility and validity rests with the originating agency i. e.
4 2024 SCC OnLine Bom 1195
5 1950 SCC 228: AIR 1950 SC 27: 1950 SCR 88
6 (1964) 1 SCR 332, 345, 347
the Bureau of Immigration. However, if the Office Memorandum is not law, nor a procedure established by law then neither is the LOC issued under the office memorandum. If the process of issuing an LOC is faulty or if they are issued in an arbitrary manner, consequently infringe the fundamental rights, then such LOCs cannot sustain. - It was also observed that the bank’s action for issuance of LOC for the sole purpose of recovery of Money was held to be a coercive action and such action was arbitrary and in violations of Article 14 and 21 of the Constitution of India. - Hon’ble Bench also held that “LOCs boil down to nothing but a strong arm tactic to bypass or leapfrog what Public Sector Banks see as inconvenience or irritants- the courts of law”.
4. In the case of Prashant Bothra and another versus Bureau of Immigration7, Justice
Sabyasachi Bhattacharyya observed the following: a. The request to raise an LOC against the petitioner was based on an audit report which, at best, is a piece of evidence in the liquidation proceedings and is in no manner conclusive proof of evidence of any illegality committed by an entity. Such report cannot be a conclusive proof of allegations against the petitioners. b. Classifying an account as fraudulent is a separate criminal action or recovery proceeding, and does not constitute a cognizable offense. Justice Sabyasachi Bhattacharyya also held that “Mere paranoia of the authorities whenever a person against whom allegations are leveled seeks to leave the country cannot be sufficient for issuance of LOCs and curtailing the person’s personal liberty to travel abroad”
5. In the case of Farooq Ali Khan Versus Bureau of Immigration8, Hon’ble Karnataka
7 2023 SCC OnLine Cal 2643
8 MANU/KA/1451/2023
High Court observed that it is a settled law that any executive or quasi-judicial decision can be subjected to judicial review of the writ court of Article 226 of the Constitution of India when such decision has adverse civil consequences. With respect to LOC, it was held that an LOC is a coercive measure to make a person surrender and consequently interfere with his fundamental right to personal liberty and free movement which has civil consequences. Thus the writ court can interfere with an LOC. It was also found that the conditions precedent to issuance of LOC was not met and that the LOC had been issued in hot haste. Accordingly the LOC was set aside and the petitioner was directed to file an undertaking before the registry of the hon’ble court before his intended date of journey.
CONCLUSION
Look Out Circulars do not have any statutory backing nor they have any statutory regulations. Yet they are guided by the regulations issued by the Ministry of Home Affairs in the Office Memorandum from time to time. This, however, has vested arbitrary power upon some delegated authorities that issue LOCs according to their whims and fancies rather than for a legitimate cause or apprehension. The authority to prevent under the LOC is unusual and harsh in nature, limiting an individual's right to travel. It gets much more problematic due to the lack of statutory law that provides a legal definition and its regulation for its legal existence. Despite the standards and directions issued in several Office Memorandums, there have been several incidents of abuse of power on unrelated grounds.
Since there is a lack of a statutory foundation and the arbitrariness with which LOCs are occasionally issued, courts have also been vigilant in protecting the Right to Liberty and freedom to travel abroad, which has been recognized as a fundamental right, as well as keeping a check on the arbitrary power to issue an LOC. The courts have frequently ruled in favour of individuals, where there has been no cause or where the LOC issued has no backing reasons, allowing them to avail themselves of the benefit of freedom of travel with specific conditions and setting aside LOCs.