30/05/2024, 13:35 India: Look Out Circular Guidelines in India | Warwick legal

India: Look Out Circular Guidelines in India

13 October 2023

Mere suspicion of a person opening bank accounts in other countries or restricting travel as a buffer
to payments outstanding to the Bank cannot be the sole basis for issuing Look Out Circular. Also,
the concept of automatic deletion of LOCs does not exist anymore.
Look Out Circulars (LOC) have not been defined in any statute. An LOC can be said to be
coercive measure adopted by a State to restrict and regulate the physical movement of a person.
The only goal of an LOC is to track and/or detain a wanted individual and send them into the
custody of the apt law enforcement agency. Once an LOC is issued against an individual, it might
become difficult for them to enter and exit a country.

LOCs are issued against Indian citizens or foreigners against whom any case is pending and whose
presence is required in relation to any investigation.

Look Out Circular Guidelines by MHA

As mentioned above, there is no statutory regime for issuance of LOCs and the same are governed
by the Office Memorandums issued by the Ministry of Home Affairs (‘MHA’).

Earlier in 1979 and 2000, the MHA had come out with Office Memorandums which governed the
issuance of LOCs. Later on, these were replaced by the Office Memorandum dated 27 October
2010.

This 2010 Memorandum defines the following guidelines pertaining to issuing LOCs for Indian
citizens and foreign nationals:

The originating agency can make a request to the Bureau of Immigration to open an LOC.
The above request can only be made by officers holding a prescribed rank and even criminal
courts can pass directions for opening an LOC against a person.
All identifying particulars of the individual against whom an LOC is to be opened must be given
by the originating agency. An LOC can be issued if the name and passport details are provided
as well.
Recourse to LOC is to be taken in cognizable offences under the Indian Penal Code or other
penal laws. The reason for requesting the opening of LOC against a person must be
specifically mentioned.
The individual against whom the LOC is opened cannot be detained/arrested or restricted from
leaving the country if there is no mention of any cognizable offense under the Indian Penal
Code (IPC) or other penal laws. At most, the originating agency may request to be informed of
the LOC subject’s arrival and departure.
LOCs are valid for a one-year period unless the originating agency makes a request for a
renewal. However, this validity will not be applicable if LOC is issued at behest of Courts or
Interpol. However, this position was radically changed after the issuance of Office
Memorandum in the year 2021 and, hence, now an LOC once opened remains in force till
a request for deletion is received. The concept of automatic deletion of LOCs does not
exist anymore.

A 2017 amendment in the above 2010 Office Memorandum provided that in exceptional cases, an
LOC could also be issued in cases not covered by the guidelines in the 2010 Office Memorandum.
In such scenarios, an individual may be restricted from leaving a country at the request of a
prescribed authority if the authority, based on the facts in their hands, believes that letting such an
individual depart would be:
Harmful to the security, sovereignty or integrity of India;
Harmful to the bilateral relations with any other nation;
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Harmful for India’s economic interests, or

The individual would indulge in terrorist activities.

The MHA made further amendments to the abovementioned 2010 Office Memorandum in the year
2018 thereby empowering officers in the Serious Fraud Investigation Office and also the
Chairman/Managing Directors/CEOs of public sector banks to request for opening of LOCs.

The immigration authorities could detain as well as prevent any person, including a willful defaulter
from leaving India against whom an LOC has been issued.

Some of the agencies that have been authorized to request for opening of LOCs are:

Ministry of Home Affairs (MHA);

Ministry of External Affairs (MEA);
District Magistrate;
Superintendent of Police;
CBI;
Narcotics Control Bureau;
Directorate of Revenue Intelligence;
Central Board of Direct Taxes (CBDT);
Intelligence Bureau;
National Investigation Agency (NIA);
Customs and Income Tax Departments, etc.

Options Available to a Person against Whom LOC is Issued

A person against whom an LOC is issued may approach the concerned court where trial is
pending and satisfy such court that the LOC was wrongly issued.
A person including an Indian citizen or a foreign national may also approach the High Court in
its writ jurisdiction to challenge such LOC inter alia on the ground that the same infringes their
fundamental right to travel and also that the LOC was issued without any valid reason.

Role Of Interpol in Issuance of Look Out Circulars

As per the provisions of the Office Memorandum mentioned above, LOCs can be issued by the
competent authority in India on a request made for the same by INTERPOL as well.
INTERPOL (the International Crime Police Organization) is the world’s largest police organization
established with the object to ensure and promote the widest possible cooperation between all
criminal police authorities. It enables cross-border police assistance and helps and supports all
authorities, organizations and service missions that aim to safeguard or fight against international
crimes.
All member nations maintain a ‘National Control Bureau,’ which shall act as the contact point for
assistance related to overseas investigations.

The National Control Bureau of the INTERPOL in India is the Central Bureau of Investigation
(CBI).
There are six types of notices which may be issued by the INTERPOL:

Red Notice,
Yellow Notice,
Blue Notice,
Green Notice,
Black Notice, and
Orange Notice.

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A Red Notice is issued to seek provisional arrest of a wanted person against whom a
national or international court has issued a warrant of arrest.

The INTERPOL may then request the CBI (which is the National Control Bureau of INTERPOL in
India) to issue an LOC for such person and the CBI may thereafter make such request to the
competent authority for issuance of an LOC.
While a Red Corner Notice (issued by INTERPOL) would ensure that the accused person is
provisionally arrested in India, the LOC (issued by CBI at behest of INTERPOL) would ensure that
such an accused person is not permitted to leave India or that their movement is regulated at all
immigration check points in India).
Case Laws

Prior to the issuance of the abovementioned Office Memorandum dated 27 October 2010, the Delhi
High Court in the case of Sumer Singh Salkan & Ors vs. Asst. Director & Ors. held that:
Recourse to LOC can be taken by investigation agency in cognizable cases under IPC or other
penal laws, where the accused was deliberately evading arrest or not appearing in trial court
despite issuance of non bailable warrants and other coercive measures and there was
likelihood of the accused leaving the country to evade arrest/trial.
The Investigating officer shall make a written request for LOC giving details and reasons for
seeking the LOC.
With respect to the question of what remedy was available to the person against whom LOC is
issued, the High Court answered that the person against whom LOC is issued must join the
investigation by appearing before the investigating officer or should surrender before the
concerned court or should satisfy the Court that LOC was wrongly issued against them. LOC
can then be withdrawn by the authority which issued it and can also be rescinded by the trial
court where the case is pending.

The Telangana High Court in the matter of Haridass Ramesh vs. Union of India agreed with the
observations of the Karnataka High Court which had held that non-intimation of the issuance of LOC
against a person by the originating agency does not violate any rights. This in effect means that
there is no requirement of issuing a show cause notice to a person against whom an LOC is sought
to be opened.
On the issue of the Banks taking recourse to issuance of LOC, the Calcutta High Court in the
matter of Mannoj Kumar Jain & Ors vs. Union of India & Ors. observed that the recent trend
shows that the Banks are issuing LOCs as a recovery mechanism for outstanding monetary
dues. The Court further observed that a Bank’s apprehension that a borrower would leave
the country forever in absence of an LOC cannot be applied across the board for all
borrowers without any exception.

The criteria for assessing the creditworthiness of a borrower and their bona fides for
repayment must be determined on a case-to-case basis. The Court further observed that
LOCs, which have the effect of restricting a person’s free movement and the right to travel,
should only be issued in exceptional circumstances and not at random and slightest
provocation, particularly at the instance of a Bank who seeks restriction on travel as a buffer
to payments outstanding to the Bank.

On the scope of judicial review to interfere with the decision of competent authority issuing the LOC,
the Delhi High Court in the matter of Vikas Chaudhary vs. Union of India held that as long as it
was found that the decision of the authorities to issue an LOC is a reasonable one, the Court would
be circumspect in interfering with the authority’s decision. However, there could never be a blanket
bar on the High Court’s power of judicial review to examine the authority’s decision.
The Court also noted that since the 2017 amendment in the Office Memorandum provided
that LOC could be issued in exceptional circumstances even when the person is not
involved in any cognizable offence under IPC or other penal laws, such power is meant to be
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30/05/2024, 13:35 India: Look Out Circular Guidelines in India | Warwick legal

used only in exceptional circumstances and not as a matter of routine. Mere suspicion of a
person opening bank accounts in other countries cannot be the sole basis for holding that
such person may, if allowed to travel abroad, be detrimental to the economic interests of
India.

The Madras High Court in the matter of Karti P. Chidambaram vs. Bureau of Immigration, MHA
& Ors. held that the legality and/or validity of LOC has to be adjudged with regard to the
circumstances prevailing on the date on which the request for issuance of LOC has been made.

On the issue whether a copy of the LOC is to be provided to the person against whom an LOC is
opened, the Telangana High Court in the matter of Kondaveeti Papamma vs. Union of India &
Ors. directed the CBI to serve a copy of the LOC and reasons for issuing the same to the Petitioner
therein so that an opportunity to be heard could be given to the Petitioner therein.
Considering a similar question, the Punjab & Haryana High Court in the matter of Noor Paul vs.
Union of India had inter alia observed that non-supply of a copy of the LOC and the reasons for
issuance of LOC at the time when the subject is stopped at the airport was not just, fair and
reasonable and was violative of Article 21 of the Constitution. Accordingly, the Court directed the
Ministry of Home Affairs, Bureau of Immigration and Foreigners Regional Registration Offices
(FRRO) to serve a copy of the LOC and the reasons for issuing it as soon as possible after it is
issued and shall also provide a post decisional opportunity to such person.

However, upon the said judgment being challenged before the Supreme Court in Bank of India vs.
Noor Paul, the Supreme Court has stayed the portion of the judgment which directed the Ministry of
Home Affairs, Bureau of Immigration and FRRO to serve a copy of the LOC and the reasons for
issuing it as soon as possible after it is issued and to also provide a post decisional opportunity to
such person. The said appeal before the SC is still pending.

Conclusion
Issuance of an LOC against a person may greatly interfere with their right to free movement outside
of India. The Courts have not been shy to set aside such LOCs which were issued without any
reasonable basis or were completely unwarranted in the facts of such cases. It is to be remembered
that though at the time of issuance of an LOC, the person is not given an opportunity to be heard,
however their rights would be protected by the Courts, in appropriate cases. Furthermore, a
stringent procedure has been laid down for issuance of such LOCs and the Courts have held that
LOCs cannot be issued against persons in a routine manner.

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