Look Out Circulars issued by public sector banks are unsustainable and must satisfy the test of proportionality.

The petitioner filed three writ petitions challenging Look Out Circulars (LOCs) issued against him at the instance of the Central Bureau of Investigation (CBI), various Public Sector Banks (State Bank of India, Bank of Baroda, Punjab National Bank), and the Enforcement Directorate (ED).

The LOC issued by the CBI had already been set aside by a Special Court on 31.08.2024.

Despite being granted court permission to travel to Dubai in February 2025, the petitioner was detained at the airport due to an LOC originated by the ED, prompting the filing of W.P.(C) 2565/2025.

The petitioner sought the quashing of the remaining LOCs issued by the banks and the ED.

Whether Look Out Circulars issued at the instance of Public Sector Banks are legally sustainable.

Whether the continued operation of an LOC issued by the Enforcement Directorate is justified when the subject is cooperating with the investigation.

The Court primarily applied Article 21 of the Constitution of India, emphasizing that the right to travel abroad is an integral part of personal liberty.

It relied on the principles established in *Maneka Gandhi v. Union of India*, *Sumer Singh Salkan v. Asst. Director*, and *Viraj Chetan Shah v. Union of India*, as recently synthesized in *Vineet Gupta v. Union of India & Ors.* (2026:DHC:1616).

The court reaffirmed that an LOC is a coercive measure to be used sparingly and only when a subject is evading arrest or poses a grave threat to national/economic interests.

Crucially, it held that LOCs issued by Chairmen or CEOs of Public Sector Banks do not withstand judicial review and are liable to be quashed.

The Court noted that the legal landscape regarding bank-issued LOCs has shifted, rendering those issued by SBI, PNB, and Bank of Baroda "wholly unsustainable".

Regarding the ED’s LOC, the Court observed there was no evidence on record to suggest the petitioner was non-cooperative with the ongoing investigation.

Applying the doctrine of proportionality, the Court reasoned that since the petitioner undertook to cooperate with the investigation and trial and offered to provide an affidavit for the same, the coercive restraint of an indefinite LOC was no longer necessary.

The Court balanced the State's interest in investigation with the individual's fundamental rights by substituting the restrictive LOC with specific conduct-based conditions.

It held that bank-originated LOCs are invalid under current law and that the ED's LOC had served its purpose.

The quashing of the ED's LOC was made subject to three conditions: (i) the petitioner must file an affidavit within 30 days promising cooperation with the investigation; (ii) he must produce all relevant documents; and (iii) he must not travel abroad without specific permission from the Investigating Agency.

Liberty was reserved for the ED to reissue the LOC if the petitioner breaches these undertakings.