Look-Out Circular

Delhi High Court quashes Look Out Circulars in a six-year PMLA probe, holding that mere pendency of investigation cannot indefinitely restrict the Article 21 right to travel abroad.

The National Company Law Appellate Tribunal (NCLAT) has ruled that a Look-Out Circular (LOC) cannot be issued mechanically against a personal guarantor to a corporate debtor. In Ramesh Jain v. State Bank of India, the tribunal held that the creditor must provide specific, credible reasons to believe the guarantor is a flight risk. This decision safeguards the guarantor's fundamental right to travel abroad and prevents LOCs from being used as a tool for harassment by financial creditors.