Look Out Circular must be quashed where subject cooperates with investigation and poses no flight risk.

The petitioner, Sachin Gaur, was a whole-time director and CFO of Jaypee Infratech Limited between 2007 and 2016

The Serious Fraud Investigation Office (SFIO) initiated an investigation into the affairs of Jaiprakash Associates Limited and its subsidiaries, prompting the issuance of a Look Out Circular (LOC) against the petitioner

The petitioner joined the investigation, complied with summons under Section 217 of the Companies Act, 2013, and recorded his statement in February 2021

During the pendency of the writ petition, the petitioner was permitted by the Court to travel abroad on five separate occasions, returning each time without violating any conditions

Furthermore, the High Court had already set aside similar LOCs issued against the petitioner's family members in related proceedings

1. Whether the continued operation of the Look Out Circular against the petitioner is legally sustainable when the petitioner has cooperated with the investigation and does not pose a flight risk.

2. Whether the right to travel abroad as a facet of Article 21 can be restricted by an LOC in the absence of evidence demonstrating that the subject is deliberately evading process or harming national economic interests.

The court primarily applied the legal framework governing LOCs as distilled in Ritu Singhal v. Bureau of Immigration & Ors.

This framework establishes that the right to travel abroad is a fundamental right under Article 21 of the Constitution and any restriction must be fair and reasonable

It relied on Maneka Gandhi v. Union of India to emphasize that travel makes personal liberty worthwhile

The court applied the principle that an LOC is a coercive measure of last resort, applicable only when an accused is deliberately evading arrest or where departure poses a "clear and grave threat" to national economic interests, rather than in cases of routine commercial defaults

The Court observed that the respondents failed to place any material on record to demonstrate that the petitioner was a "flight risk" or that he had failed to cooperate with the SFIO investigation

Applying the principles from Ritu Singhal, the Court noted that guilt is personal and an LOC cannot be maintained solely based on a person’s status as a director or family member of a defaulter without specific evidence of personal wrongdoing

The Court highlighted that the petitioner had significant assets in India and his prior conduct—specifically returning to India after five court-sanctioned foreign trips—undermined the necessity of the LOC

Consequently, the Court reasoned that the purpose of the LOC had been sufficiently served and its continued operation constituted an unreasonable restriction on the petitioner's personal liberty

The Court held that in the absence of non-cooperation or a real risk of absconding, the LOC could not be sustained. The petition was disposed of with directions that the petitioner must continue to cooperate with investigations and intimate the Investigation Officer seven days prior to any foreign travel

The SFIO was directed to communicate this order to the Bureau of Immigration and was granted liberty to seek a fresh LOC only if supervening circumstances or new material warranted such action