IMPORTANT POINT
The right to leave the country is a fundamental right, and mere registration of an FIR does not justify the issuance of a Look Out Circular without substantial grounds.

JUDGMENT :

SABYASACHI BHATTACHARYYA, J.

1. The petitioner has challenged a Look Out Circular (LOC) issued against the petitioner.

2. It is submitted that the said LOC was based on a request of the respondent-Bank which does not adhere to the guidelines issued by the Central Government in that regard.

3. Learned counsel appearing for the respondent-Bank places reliance on an Office Memorandum dated April 18, 2019 and a communication to the Chief Executive, Indian Banks Association by the Deputy Director (BO.II) of even date as well as a Government Memorandum dated November 22, 2018.

4. Learned counsel for the respondent-Bank contends that in terms of the April 18, 2019 communication and Office Memorandum, request for LOCs may be made even by investigating agencies.

5. In fact, vide Office Memorandum dated April 18, 2019, the Indian Banks Association’s request had been recorded, that all investigation agencies may be advised that where a case is already registered with them, such agencies should make, wherever necessary and appropriate, a direct request for issuance of LOC.

6. Learned counsel further submits that the petitioner is an economic offender and there is already a declaration of willful defaulter with regard to the petitioner. Also, the accounts of the concerned company, which underwent a corporate insolvency process, have been classified as fraud.

7. It is argued that if such persons are permitted to leave the country, they may very well evade the law and justice.

8. It is argued that the cumulative effect of letting go of such persons affects the economic interest of the country which is a valid ground for requests being made for issuance of LOCs.

9. Learned counsel for the Bank next contends that the petitioner does not have a Constitutional right to leave the country but only a right to move freely within the confines of the country itself.

10. Hence, there is no scope of the LOC or the request for the same being set aside.

11. On the query of court, learned counsel for the Bank hands over a copy of the Bank’s request for opening of LOC, on the basis of which the impugned LOC against the petitioner and some other persons were issued.

12. Upon hearing learned counsel for the parties, the grounds for issuance of LOC acquire relevance. In the original Office Memorandum dated October 27, 2010 issued by the Ministry of Home Affairs, one of the grounds, which is relevant to the present case, is pendency of a criminal proceeding against the person with regard to whom the LOC is to be issued.

13. By subsequent Office Memoranda, including that dated November 22, 2018, the scope of the issuance of LOCs was broadened. If the authority, based on inputs received, finds that the departure of a person is detrimental to the sovereignty or security or integrity of India or that the same is detrimental to the bilateral relations with any country or to the strategic and/or economic interests of India or he may potentially indulge in an act of terrorism or his departure may not be permitted in the larger public interest, LOC can be issued.

14. Insofar as the reasons given by the Bank in the request for issuance of LOC with regard to the petitioner, under sub-head IV, the reason is stated to be that the account of M/s Khaitan Electricals Limited has been declared as Fraud by the respondent-Bank and the petitioner is a Managing Director/Guarantor in the said company. It has been further stated that FIR has been filed against the borrower-company and its Directors/Guarantors vide FIR No. RC0692021E0003 dated March 22, 2021 before Police Station EOB Chennai. Moreover, the petitioner has been named as an accused in the said FIR.

15. A perusal of the grounds, which have been indicated above, for issuance of LOC shows that there is no allegation that any criminal case is pending against the petitioner.

16. It is relevant to note here that the mere registration of an FIR is not equivalent to pendency of a criminal case. An FIR is lodged on the basis of a comp