01Facts
This judgment common-disposes of 33 writ petitions challenging Look Out Circulars (LOCs) issued by the Bureau of Immigration at the behest of Public Sector Banks (PSBs), investigating agencies (CBI, ED, SFIO), and government departments (Income Tax, MCA).
p. 17, para 2The petitioners include erstwhile directors, guarantors, and family members of defaulting companies.
pp. 35-61Many petitioners were restricted from traveling abroad despite having no criminal proceedings against them or having joined investigations where proceedings were pending.
p. 17, para 2The court categorized the cases into: (A) LOCs at the instance of financial institutions; (B) LOCs by investigating agencies; and (C) Cases where petitioners are relegated to the forum that issued the LOC.
p. 18, para 302Issues
i.1. Whether the issuance and continuation of Look Out Circulars is legally sustainable when it restricts the fundamental right to travel abroad under Article 21.
p. 18, para 1ii.2. Whether Public Sector Banks/Financial Institutions possess the legal authority to request LOCs in the absence of a cognizable offence.
p. 25, para 21 · p. 31, para 32(iv)iii.3. Whether the term "detrimental to economic interests of India" can be invoked for routine commercial loan defaults.
p. 26, para 24 · p. 34, para 36iv.4. Whether a person should be relegated to the trial court/originating forum for relief when a chargesheet has already been filed.
pp. 65-66, para 142-14303Law Applied
The Court applied Article 21 of the Constitution, establishing the right to travel abroad as a facet of personal liberty.
Satwant Singh Sawhney v. D. Ramarathnam · p. 19, para 6 · Maneka Gandhi v. Union of India · p. 19, para 7It relied on the MHA Office Memorandum dated 22.02.2021, which restricts LOCs to cognizable offences.
p. 23, para 16The Bench followed Viraj Chetan Shah v. Union of India (Bombay HC), which quashed the power of PSB heads to request LOCs under Clause 6(B)(xv).
p. 25, para 21Sumer Singh Salkan v. Asst. Director, which defined LOCs as coercive measures of last resort applicable only in cases of deliberate evasion of arrest in cognizable matters.
p. 21, para 13The court noted that "economic interest" must involve grave systemic impact, not individual defaults.
Bank of Baroda v. Sahil Chugh · p. 27, para 24Provisions in the judgment · 11 · Linked ones open on LawLens
Indian Penal Code, 1860 Section 420Section 467Section 628
Companies Act, 2013 Section 230Section 313Section 447Section 448
Insolvency and Bankruptcy Code, 2016. Section 10
Prevention of Money-Laundering Act, 2002 Section 5
Prevention of Corruption Act, 1988 Section 13
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 Section 10
04Reasoning
The Court reasoned that since the right to travel is a fundamental right, any restriction via LOC must be founded on a law that is just, fair, and reasonable.
p. 32, para 34For Category A cases, the Court found that following the Viraj Chetan Shah and Sahil Chugh precedents, the empowerment of PSB officials to seek LOCs is void of legal authority; thus, LOCs issued for mere loan defaults without criminal proceedings are unsustainable.
pp. 33, para 35-36For Category B cases involving agencies like SFIO, ED, or Income Tax, the Court observed that where petitioners had cooperated with investigations, provided security, or were not named as accused in chargesheets, the mechanical continuation of LOCs was disproportionate and arbitrary.
pp. 34, para 37-38 · p. 63, para 128For Category C, where trial courts were already seized of the matter via chargesheets, the Court held that the principle in Sumer Singh Salkan required the petitioners to seek relief from those specialized forums rather than the Writ Court.
p. 66, para 143 · p. 71, para 15605Holding
The Court quashed the LOCs in 29 petitions (Categories A and B), holding that the right to travel cannot be curtailed as an "arm-twisting tactic" for debt recovery or where no cognizable offence exists.
p. 72, para 160In 4 petitions (Category C: Neeraj Singal, Ritu Singal, Kunwer Sachdev, Dharamvir Singh), the Court relegated the petitioners to the concerned trial courts/agencies for relief, as chargesheets had been filed.
p. 71, para 159 · p. 73, para 161These petitioners were permitted to travel subject to notifying agencies 48 hours in advance and the Bureau of Immigration was directed to update its records accordingly.
p. 51, para 86 · pp. 63, para 128-129Original Court PDF
Neeraj SingalvsBureau Of Immigration & Ors.
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