The Supreme Court on Tuesday pressed the Central Bureau of Investigation (CBI) to formalise a standard operating procedure (SOP) governing the issuance of Look-Out Circulars (LOCs), raising concerns over the manner in which such measures are currently enforced.

A bench of Justice Vikram Nath and Justice Sandeep Mehta examined a case where an accused was prevented from travelling abroad at the airport due to an LOC, despite having prior permission from the jurisdictional court. The judges questioned the agency on how such a restriction could operate in the face of a judicial order.

During the hearing, the bench flagged the absence of transparency in the LOC process and observed that individuals are often not informed about such circulars.

"LOC is not a confidential document," Justice Nath remarked, pointing out that the agency’s own guidelines require reasons to be recorded, failing which an LOC cannot be enforced.

The case concerns Nimesh Navinchandra Shah, who is facing proceedings initiated by both the CBI and the Enforcement Directorate (ED) after a company he was associated with was classified as a non-performing asset. While he has secured bail in the CBI case, two LOCs were issued against him: one by the CBI and another by a bank. The LOC against his wife has already been set aside, while the bank-issued circular remains under challenge before the High Court.

His challenge to the CBI-issued LOC was rejected by the High Court, prompting the present appeal.

Appearing for the petitioner, senior advocate Siddharth Aggarwal argued that neither the CBI nor the ED found it necessary to arrest Shah during the course of investigation. He pointed out that Shah had initially obtained court approval to travel abroad in compliance with his bail conditions. However, he was stopped at the airport because of the LOC. A subsequent attempt to quash the circular before the High Court also failed.

When asked whether the petitioner had been furnished a copy of the LOC, Aggarwal responded in the negative, stressing that such circulars are typically neither shared with the affected individual nor communicated in advance.

"Neither there is any pre-decisional hearing, nor any intimation, nor any post-decisional hearing...one can only find out at airport immigration...It's an administrative action, no statute behind it, department takes a view it is confidential...Everybody else is involved in this except the person on whom the civil consequences would fall," he submitted.

The bench then sought a response from Additional Solicitor General DP Singh, appearing for the CBI.

Justice Mehta asked, "Once Court grants permission to travel abroad, how does your LOC survive?" Justice Nath suggested an alternative mechanism, observing, "Why can't you ask trial court to ask him to deposit the passport? As and when he is required to travel, passport can be released to him and permission will be granted."

In reply, Singh stated, "Not an issue, but there are judgments now which say passport cannot be impounded," to which Justice Mehta responded, "That can be a bail condition."

Singh indicated that the issue could be addressed if the petitioner deposits his passport, adding that LOCs are issued under an office memorandum.

However, the bench underscored the need for a structured framework. "A man travelling with his family...not knowing anything...and he is stopped at the airport saying you can't go," Justice Mehta observed.

Highlighting the facts of the case, he added, "Inspite thereof, on reaching airport, he is told no LOC from such and such agency!" He further criticised the lack of communication by the agency, noting, "You don't arrest him before filing chargesheet. Why is he supposed to go to the Court? You don't even have the courtesy to even inform by a message that there's an LOC...What is there to shy? He learns on getting at the airport, he loses the ticket money...suppose he is travelling business class to US...he will lose 10-15 lakhs...why should that happen?"