Cannot Routinely Issue Look Out Circular Merely Because Investigation Is Pending: Delhi High Court Quashes LOCs In PMLA Case
The Court noted that an LOC is a coercive measure requiring specific justification, noting that six years of cooperation and the absence of any flight risk render the indefinite continuation of travel restrictions unwarranted.
Justice Amit Mahajan, Delhi High Court
The Delhi High Court held that a Look Out Circular (LOC) is a coercive measure that cannot be resorted to as a routine practice during pending investigations. Observing that an LOC requires specific justifying circumstances, the High Court quashed travel restrictions issued by the Enforcement Directorate against a senior citizen and his son.
The Court held that a pending PMLA probe cannot indefinitely restrict travel rights when individuals consistently appear and cooperate. The Court noted that after six years without communication, the petitioners promptly responded to fresh summons, with no evidence showing flight risk or process evasion.
A Single Judge Bench of Justice Amit Mahajan observed, “An LOC is a coercive measure and cannot be resorted to as a matter of routine merely because an investigation is pending. Its issuance and continued operation must be justified by circumstances warranting such restraint upon the right to travel. In the present case, apart from the pendency of the investigation, no material has been placed before this Court to demonstrate that either of the petitioners has evaded the investigation, failed to comply with any summons or direction issued by Respondent No.1, or attempted to abscond. On the contrary, the conduct of the petitioners over the course of the investigation demonstrates their cooperation with the investigation”.
Senior Advocates Siddharth Aggarwal and Madhav Khurana appeared for the petitioners while Rahul Tyagi, Standing Counsel appeared for the respondents.
“It is also peculiar to note that investigation for alleged offences under PMLA stemmed from complaint filed by SFIO before the Trial Court. No impediment has been imposed by the Trial Court on the petitioners travel and, therefore, petitioners cannot be said to be a flight risk. They have also concededly cooperated with the investigation as and when required. The investigation is also stated to be pending for almost six years”, the Bench also noted.
The case arose from a July 2017 SFIO complaint under the Companies Act, leading to Dwarka Courts summons in January 2018. The petitioners obtained bail, exemption from personal appearance, and explicit foreign travel permission for one petitioner.
The ED initiated a PMLA probe on the same facts and first summoned them in January 2020. After initial statements, no communication occurred for six years until fresh summons were issued in December 2025, which both petitioners complied with.
Procedurally, the first petitioner was stopped at the airport on March 7, 2026, while traveling to Singapore for liver cancer treatment, discovering an LOC issued by the ED. The second petitioner, residing in Singapore, apprehended similar action. After unanswered representations in April and June 2026, both approached the High Court seeking quashing of the LOCs.
Reasoning on merits, the Court found no material showing evasion or non-cooperation during the six-year probe. It emphasized that the trial court handling the predicate offense imposed no travel restrictions, neutralizing flight risk claims. Considering the medical necessity for the elderly petitioner and employment commitments for the non-resident petitioner, the Court held that indefinite LOCs were unwarranted.
“The Court is conscious that the investigation under the PMLA is stated to be continuing and that the role of the petitioners is yet to be conclusively determined. However, the mere fact that an investigation remains pending cannot, in itself, furnish an enduring basis for restricting the petitioner’s right to travel, particularly where the petitioner has consistently appeared before the investigating agency”, the Bench noted.
Cause Title: Deep Kumar Rastogi v. Directorate of Enforcement & Anr. (Neutral Citation: 2026:DHC:8584)
Appearances:
Petitioners: Senior Advocates Siddharth Aggarwal and Madhav Khurana, with Advocates Stuti Gujral, Priti Verma, Vidushi Sabarwal, Miran Ahmad, Hrishabh Iyer, Shaurya Singh, Vipin Kumar, Sidhant Sarawat, and Mugdha.
Respondents: Standing Counsel Rahul Tyagi, Advocates Priya Rai, Rahul Khanna, Birendra Singh, Vinay Kumar, and Priyansh Raj Singh; CGSC Nishant Gautam with GP Vanshul Pali and Advocate Nidhi Adarsh.