The Delhi High Court recently 'modified' a Look Out Circular (LOC) issued against a man to an 'intimation' subjecting him to 'certain conditions'. The court observed that there were no allegations of siphoning off public funds against him. A single bench of Justice Prathiba Singh in the September 26 order observed that until 2010 LOCs were issued when a cognizable offence was allegedly committed under IPC/other penal laws. However, after an amendment to MHA’s 2010 office memorandum (OM) in 2017, LOCs can be issued against persons whose departure from the country is considered 'detrimental to the economic interests of India.' Justice Singh observed that some cases may require the issuance of a LOC, when found that the conduct of individuals concerned 'affects public interest as a whole or has an adverse impact on the economy'. The court, further, said that squandering of public money etc., 'may have a greater impact' justifying the issuance of LOCs, however, it cannot be a resort in every case of bank loan defaults. “Citizens ought not to be harassed and deprived of their liberty to travel, merely due to their participation in a business, whether in a professional or a non-executive capacity. The circumstances have to reveal a higher gravity and a larger impact on the country,” the HC said. Pointing out over 20 different case laws, the HC said that there are various factors that can affect the 'quashing or upholding of LOCs' including existence of probe in cognizable offences under the IPC/other penal laws, large public funds being at stake, proceedings under Black Money Act, legal proceedings in foreign countries etc. The court’s observations come after a plea moved by an entrepreneur Prateek Chitkara seeking 'quashing' of an LOC as well as reasons for its issuance and continuation at the 'behest of Income tax Authorities'. Chitkara claimed to have purchased a Hong Kong-based company, but did not disclose it in his IT-return. Subsequently, proceedings under the Black Money Act were commenced against him and the company was 'struck off' as per the tax department’s assessment order. The High Court noted that when Chitkara was confronted during the investigation about the company’s transactions, his statements pointed to 'concealment' and his reply to most questions was he could not 'recall anything'. The HC, however, observed that the issues on 'legality and validity of LOC issuance under the OMs', is pending before the Supreme Court and the HC in two separate cases. Therefore, until, the validity of the OM is decided, as well as factors that courts have noted, each plea pertaining to an LOC would have to be decided on a “case to case basis”, the HC said. After considering the case facts, the HC opined that this wasn’t a case that would be detrimental to the economic interest of the country.
