BQExplainer: Lookout Circulars – Use, Overuse, Abuse?
Last week, Naresh and Anita Goyal, promoters of crisis-hit Jet Airways (India) Ltd., were pulled off a flight taking off from Mumbai for Dubai and London on the basis of a lookout circular issued by the Ministry of Corporate Affairs . The reason — suspected financial fraud, according to a government official. Just days later, Sunil Godhwani, former Religare Enterprises Ltd. chairman, was detained at the Delhi airport on similar grounds. This time the lookout notice was issued by the Serious Fraud Investigation Office, according to a Mint report. Religare Enterprises is also being investigated by the authorities for financial fraud.
Ever since Vijay Mallya, Nirav Modi and Mehul Choksi left the country, in spite of pending investigations, there’s been a reported rise in the issue of lookout notices against those being investigated or accused of white collar crimes. For instance, in February a lookout notice was issued by the Central Bureau of Investigation against Chanda Kochhar, the former managing director and chief executive officer of ICICI Bank Ltd., and her husband Deepak Kochhar.
Majid Memon, a veteran criminal lawyer, told Bloomberg Quint that economic offences involving huge public money have been on the rise over a decade. “It has been observed that several people who commit such offences of cheating, embezzlement, breach of trust, misappropriation of funds, after collecting money from vulnerable victims they manage to escape the Indian territory and make themselves unreachable to the process of law.” Lookout circulars are an attempt to stop that, according to him.
But the right to travel overseas is a fundamental right as held by the Supreme Court in previous cases. Under what circumstances can it be revoked or restrained by the issue of a lookout circular?
This article seeks to understand and explain the current spate of lookout circulars and their legal standing.
What Is A Lookout Circular?
A lookout circular is a communication or a directive issued by the Ministry of Home Affairs or any authorised government authority to the immigration officials in India. A lookout circular is issued to keep track of a person’s arrival and departure in India which helps the authorities from preventing a proclaimed offender or an accused who is on the run from fleeing outside India. Thus the issuance of a lookout circular can severely restrict or deprive the right of personal liberty guaranteed to a person under the Article 21 of the Indian constitution, as held by the Supreme Court in the Satwant Singh case and reiterated in the famous Maneka Gandhi case.
Explaining what a lookout circular means, Supreme Court Advocate and Former Additional Solicitor General Siddharth Luthra told Bloomberg Quint that a “lookout circular is an instrument issued by the MHA on request of a police agency or otherwise. These are issued in terms of rules such as the police rules of various states. For example, the Punjab Police rules provide for a hue and cry notice. When the police are on lookout for someone or want to find him, the police used to issue a hue and cry notice in the old days. Now the hue and cry notice is known as a lookout circular or lookout notice.”
Who Can Issue A Lookout Circular?
The origin of the current framework of lookout circulars can be traced back to an office memorandum issued by the Ministry of Home Affairs in the year 1979, which forms the basis for the issuance of a lookout circular. In addition to the said circular, major circulars and office memorandums on lookout circulars were issued by the MHA in the years 2000, 2010 and 2017.
A combined reading of these circulars suggests the following...
Only a few authorities in India can issue or directly initiate the opening of a lookout circular in respect of a person. As per the existing guidelines, only authorities like Ministry of External Affairs, Customs and Income tax department, Directorate of Revenue Intelligence, the CBI, designated Police authorities, designated passport officers, etc. can issue or initiate the opening of a lookout circular in respect of a person. In a series of judgments, courts have held that only an authority or agency which is vested with criminal enforcement powers can issue a lookout circular. The Ministry of Home Affairs made amendments to its existing circulars, through office memorandums issued in September and December 2018, on lookout circular guidelines and has empowered officers in the Serious Fraud Investigation Office and chairmen/managing directors, chief executive officers of banks to request an opening of a lookout circular. Courts having criminal jurisdiction can also issue directions for issuance of a lookout circular in respect of a person.
As per existing guidelines issued by the Ministry of Home Affairs, the government authority follows this procedure to initiate a lookout circular.
Under What Circumstances Can A Lookout Circular Be Issued?
As per existing MHA guidelines and court directions from time to time, a lookout circular can be issued in respect of a person who:
- Is accused of a cognizable offence and is evading arrest, or
- Is accused of a cognizable offence and is not appearing in a court for trial, or
- Is accused of a cognizable offense and is likely to abscond or leave the country to avoid his arrest, or
- Is an anti-national, terrorist or a suspect (as determined by authorities, though only in exceptional circumstances)
The Code of Criminal Procedure, 1973 prescribes a list of offences for which a police officer may arrest without an arrest warrant. Such offenses are known as cognizable offences.
White collar crime that makes for a cognizable offence may involve violations of company law. For instance, an offense involving fraud of exceeding Rs 10 lakh or 1 percent of the turnover of a company involving public interest is a cognizable offence. Similarly, offences such as making untrue or misleading statements in a prospectus, issuing duplicate share certificates with an intention to defraud and transfer of shares with an intention to defraud are some of the cognizable offenses under the Companies Act, 2013.
Tampering with a computer system or hacking are cognizable offenses under the Information Technology Act, 2000.
Explaining the circumstances under which a lookout circular can be issued, Luthra said “ a lookout circular can be issued for any cognizable and non bailable offense”.
Once a lookout circular is issued, it remains valid for one year and lapses thereafter. However, an agency may apply for extension of the lookout circular which is already issued against an individual. The term of one year is not applicable for certain categories of lookout circulars.
What Happens After A Lookout Circular Is Issued?
Once a lookout circular is issued, the individual’s name is communicated to all the immigration check points in India. This alerts all airports and ports in India to prevent the individual from leaving the country. It may even result in the impounding of the individual’s passport, if permitted by a court. These actions prevent the person from leaving the country for a particular or indefinite duration if the court is of the view that he may abscond or run away to prevent his arrest.
To be clear, the issuance of a lookout circular is rarely made public and even the individual is not informed, say lawyers. The person will likely find out only when attempting to cross the immigration point.
“Notice is not necessary for a person who is wanted in a case,” said noted criminal lawyer Satish Maneshinde to BloombergQuint.
How Have Courts Opined On Lookout Circulars?
The landmark cases here are the
- the Satwant Singh Sawhney v Assistant Passport Officer case in 1967, in which the apex court held that the right to travel abroad was a part of personal liberty under Article 21 of the Constitution,
- and the Maneka Gandhi v Union of India case in which the Supreme Court, in 1977, made clear that any procedure in law must be “fair, just and reasonable”.
It is in this context that petitions challenging the legal validity of lookout circulars have also been examined by high courts and the Supreme Court from time to time. While courts have generally upheld the legal validity of the guidelines under which lookout circulars are issued, there have been instances where a lookout circular issued in respect of a person has been quashed due to lack of proper procedure or due diligence by the issuing authorities.
In Sumer Singh Salkan v Assistant Director and Others the Delhi High Court in 2010 quashed the lookout circular issued against the petitioner due to procedural defects. It also framed various guidelines for issuance of a lookout circular. It said that, “Recourse to lookout circular can be taken by investigating agency in cognizable offences under IPC or other penal laws, where the accused was deliberately evading arrest or not appearing in the trial court despite non-bailable warrants and other coercive measures and there was likelihood of the accused leaving the country to evade trial/arrest.”
In that case itself the court laid down that the following defences are available to a person in respect of whom a lookout circular is issued –
- He must join the investigation by appearing before the investigating officer.
- He should surrender before a court.
- He can satisfy the court that a lookout circular was wrongly issued against him.
- He can explain and satisfy the authority that the lookout circular was wrongly issued against him.
“A lookout circular can be challenged on similar grounds that a non-bailable warrant can be challenged in a court,”said Luthra. A non-bailable warrant can be challenged by approaching the court and praying that the accused person is not connected with the crime alleged.
“Naturally, the person against whom a lookout circular notice is issued, he has to point out that he did not try to escape the law, ” Memon added.
In the 2015 case of Priya Parameswaran Pillai v Union of India, the Delhi High Court quashed and set aside the lookout circular issued against Priya Pillai. The circular was issued by the Ministry of Home Affairs on grounds that Pillai was indulging in anti-national activities. The court disagreed.
Lookout Circular: Overuse Or Abuse?
Till Goyal and his wife were stopped from flying out of India, there was no mention of any case or criminal charges against him. While questions have been raised regarding the financial trouble at Jet Airways no case has been lodged against the Goyals, nor arrest warrants issued yet.
Can a lookout notice be issued under such circumstances? If yes, what defence do the Goyals have?
To answer the first, the MHA’s office memorandum uses broad language to suggest that lookout circulars can be issued even if a formal case has not been filed.
Office Memorandum, 2010
8 (j): In exceptional cases, lookout circulars can be issued without complete parameters and/or case details against CI suspects, terrorists, anti-national elements, etc. in larger national interest.
This memorandum was issued two months after the Delhi High Court order laid down clear guidelines for the issuance of lookout circulars .
Lawyers said that lookout circulars may be issued even on the basis of suspicion of involvement in a crime. “Merely because an individual is not named in a case, it does not mean his role will not emerge later,” said Luthra.