New Delhi: The Delhi High Court has set aside a look-out circular (LOC) issued against Puja Chadha, niece of fugitive arms dealer Sanjay Bhandari, ruling that her family ties to him cannot justify curbs on her right to travel.
In doing so, the Court permitted Chadha to travel back to London after being restrained for more than 6 months in India, which involved more than 100 hours of interrogation by the Enforcement Directorate (ED).
The order is the latest instance of the courts pushing back at how investigative agencies use LOCs, a tool that has become increasingly controversial.
A single judge bench of Justice Sachin Dutta was hearing the case of Puja Chadha, a British national, who had come to Delhi in March to visit her mother. Instead, she was stopped at the airport, detained for eight hours, and later interrogated by the Enforcement Directorate (ED) for over 100 hours across 6 months.
During the investigation process, Chadha’s phone was cloned, her passwords taken, and yet she was never named as an accused in the Rs 535 crore money laundering case against her uncle and alleged arms dealer Sanjay Bhandari.
The ED insisted the LOC was necessary since the matter involved “economic interests of India”, a ground added in 2017 to widen the scope of such restrictions. However, the Delhi HC has disagreed, holding that exceptions of this kind “cannot be invoked loosely or on conjecture”.
The court also recorded Chadha’s personal circumstances, including her expired visa, serious health conditions, and the fact that her 15-year-old son in London had been “deprived of his mother’s care and attention” since March.
With this decision, the court has once again underlined the limits on the power to restrict movement through LOCs, a tool that has increasingly come under judicial scrutiny for limiting one’s liberty to travel.
What are LOCs and how are they issued? Why was Chadha stopped and what did the court say? ThePrint explains.
LOCs, how they work, and the exceptions
An LOC is a request by investigative agencies to the bureau of immigration to stop an individual from entering or exiting India.
It was first introduced in 1979 through a home ministry letter and has since grown into a comprehensive regime governed by office memorandums of the home ministry. The latest memorandum, issued in 2021, sets out the grounds for issuance.
In their original form till 2017, LOCs were tied to cognisable offences in penal cases. This meant that only in cases where a person could be arrested without a warrant, under penal statutes such as the IPC, that LOCs could be issued.
But in 2017, the Union home ministry amended the LOC regime to add new grounds to the process of LOCs which were to be resorted to “in exceptional cases”.
These include cases where such departure would be detrimental to India’s economic interests, sovereignty or security or integrity, bilateral relations, strategic or economic interests and apprehension of terrorism.
This amendment widened the net significantly, allowing agencies like the ED to issue LOCs even without a pending FIR, if any of the above parameters were met.
Courts, however, have repeatedly flagged the vagueness of this expansion, as terms such as “economic interests” have not been defined within the LOC. This means that investigating authorites enjoy significant discretion to make an assessment on a case-to-case basis.
For instance, in 2021, the Delhi HC said it was “settled” that unless there was an FIR or pending criminal case, an LOC could not be issued, calling it a measure that “seriously jeopardises the right to travel of an individual”.
Then, in 2023, the Delhi HC itself had said that the ground for “economic interests” can apply only to cases with “higher gravity and a larger impact on the country”, not routine defaults or ongoing investigations.
“Some cases may require the issuance of a look-out circular, if it is found that the conduct of the individuals concerned affects public interest as a whole or has an adverse impact on the economy. …the circumstances have to reveal a higher gravity and a larger impact on the country,” the HC had said in another 2023 case.
Why was Chadha stopped?
The LOC against Chadha was issued in connection with the ED’s probe against her uncle Sanjay Bhandari. Bhandari, accused of hiding assets abroad and facing a separate case linked to alleged property deals involving Congress leader Sonia Gandhi’s son-in-law Robert Vadra, has been on the run since 2017.
Notably, Bhandari was also declared a “fugitive economic offender” in the money laundering charges in July this year, enabling the ED to confiscate assets owned by him.
When Chadha, who is Bhandri’s niece, arrived in Delhi in March, immigration officers detained her based on the LOC. She was interrogated repeatedly, her phone cloned, and her digital records scrutinised. According to the ED, data from her phone and witness statements showed she and her husband had “close personal and business associations” with Bhandari, including managing his expenses in the UK.
Despite this, the agency never named her as an accused in its money-laundering case.
Instead, she was told by the investigating ED officer that she could not return to London, even as she cited medical issues and responsibilities toward her son.
In response, she filed a writ petition in the HC, challenging the LOC and alleging that she had been “unlawfully restrained” in India.
HC rejects ‘familial association’
Accepting her contentions and quashing the LOC, Justice Dutta observed that Chadha was not named in any ED complaint, and her mere familial relation to Bhandari could not justify detaining her in India.
“The petitioner has not been named in any prosecution complaint, despite the investigation being carried on by the respondents since 2017…. Familial association with an accused, by itself, is not sufficient to justify the issuance of an LOC,” the court observed.
The court referred to a 2024 decision, noting that mere association or family relationship does not substantiate the grant of an LOC without concrete evidence of direct involvement or complicity in the offence.
The ED had argued that an exception existed because the “economic interests of India” were involved in this case, citing the amendment brought in by the home ministry which had expanded the scope of LOCs.
However, Justice Dutta rejected the Enforcement Directorate’s claim, stating that such exceptions “cannot be invoked loosely or on the basis of conjecture”. Any claim that economic interests of India are affected “must be reasonable and supported by cogent material”.
The court also noted Chadha’s visa status and health, and observed that her teenage son had been deprived of her presence due to her continued stay in India.
“It is also extremely relevant that the petitioner is a British citizen, and the visa issued in her favour has expired/is about to expire…. She is stated to be suffering from serious health conditions. Furthermore, her minor son, aged 15 years, has been left deprived of his mother’s care and attention.”
The ED claimed that Chadha and her husband had “close personal and business associations” with Bhandari. They alleged she handled expenses incurred by Bhandari in the UK, and noted that material, including witness statements and records of financial transactions, was retrieved from her phone during her interrogation this year.
However, Justice Dutta refused to entertain the ED’s contentions and granted relief to Chadha based on her affidavit of cooperation. He made clear that any breach of her undertaking would have serious consequences.
“It is also made clear that since the LOC has been quashed on the strength of the aforesaid undertaking, any breach thereof by the petitioner, shall be treated as egregious and wilfull disregard of orders passed by this court entailing action under the Contempt of Courts Act, 1971, besides other consequences under law,” the court observed.
(Edited by Viny Mishra)