Look Out Circulars issued by Public Sector Banks are unsustainable and liable to be quashed.

The petitioner challenged the Look Out Circulars (LOCs) issued against him at the instance of the State Bank of India and Union Bank of India.

While these LOCs were pending, the Central Bureau of Investigation (CBI) registered two FIRs against the petitioner based on complaints from the banks, resulting in a separate LOC issued by the CBI.

The petitioner argued that the bank-originated LOCs should be quashed, acknowledging that he remains subject to the CBI's LOC and must seek permission from the Special Judge (CBI) to travel abroad.

1. Whether Look Out Circulars issued at the instance of Public Sector Banks are legally sustainable when subjected to judicial review.

2. Whether the continued operation of an LOC constitutes an unjustified restriction on personal liberty if the subject complies with the investigation.

The court applied Article 21 of the Constitution of India, which protects the fundamental right to travel as a facet of personal liberty.

It relied on the principles established in Maneka Gandhi v. Union of India, Sumer Singh Salkan v. Asst. Director, and specifically Vineet Gupta v. Union of India & Ors.

The core doctrine derived is that LOCs issued by the executive must be proportionate and necessary; specifically, an LOC issued at the instance of the Chairman or CEO of a Public Sector Bank cannot withstand judicial scrutiny and is liable to be quashed.

The court reasoned that an LOC is a coercive measure that must be exercised sparingly and only when a person is deliberately evading the judicial process.

Applying the precedent of Vineet Gupta, the court found that the "originating agencies" (the banks) failed to provide a statutory backing that justifies a permanent or indefinite restraint on the petitioner's liberty.

Since the petitioner is already required to seek permission from the Special Judge (CBI) for international travel due to the pending FIRs, maintaining the bank-issued LOCs served no additional lawful purpose and failed the test of necessity and proportionality.

However, the court directed that the petitioner must continue to seek prior permission from the Court of Special Judge (CBI) before traveling abroad.

The writ petition was disposed of with these directions.