Six-year PMLA probe alone cannot justify keeping lookout circulars in force, Delhi High Court rules

Both petitioners were summoned in connection with proceedings arising from an SFIO complaint and a subsequent PMLA investigation. They appeared before the Enforcement Directorate (ED), provided statements and documents, and were not contacted again for several years until fresh summons were issued in December 2025; both appeared and cooperated.

Deep Kumar Rastogi was stopped from travelling to Singapore in March 2026 and informed that an LOC had been issued against him. Gagan Deep Rastogi, who ordinarily resided in Singapore, apprehended that an LOC had also been issued against him.

After their requests to the ED to reconsider or withdraw the LOCs received no response, they petitioned for disclosure and cancellation of the LOCs.

1. Whether the LOCs issued against the petitioners could continue to operate when the investigation remained pending but the petitioners had consistently appeared and cooperated, with no material showing evasion or obstruction.

2. Whether the LOCs should be quashed subject to conditions designed to ensure the petitioners’ availability during the investigation.

The Court stated that an LOC is a coercive measure and should not be issued or continued routinely merely because an investigation is pending; its issuance and continued operation must be justified by circumstances warranting restraint on the right to travel.

A pending investigation, without more, is not an enduring basis for restricting travel, particularly where the person has consistently appeared before the investigating agency and there is no material indicating evasion or obstruction.

The judgment did not cite a specific statutory provision or precedent for these principles.

The Court found that the investigation had remained pending for more than six years, while both petitioners had appeared when summoned and supplied the information and documents sought; neither had been asked for further information after their appearances in December 2025 and January 2026.

Their prior travel had not impeded the investigation, and there was no evidence that either had failed to comply with a direction or attempted to abscond.

In those circumstances, the continuing investigation alone did not justify the LOCs. The Court nevertheless imposed travel-notification, contact-information and cooperation conditions to address the investigation’s pendency.

It allowed the petitions subject to conditions requiring the petitioners to provide specified travel and contact details, notify the ED of relevant travel plans, and cooperate with the investigation when required.

Pending applications were disposed of.