More power to law: Govt mulling statutory backing for look-out circular

Government is planning to give a 'statutory backing' on look-out circulars because without backing, such a notice cannot be issued against an economic offender out on bail, said a report by the Economic Times. 

The leading daily also said that the government is planning to amend the look-out circular to alert or verification. The government will take such a step to arm investigative agencies to keep tabs on the accused who may flee the country. With this 'statutory backing' in place, the investigative agency can formally keep an eye on the movements of the accused and ensure that he does not flee the country. 

A look-out circular ceases to exist once an accused wanted for financial crimes is granted bail. An economic offender can also challenge the circular issued by the government and can even strike it down, which further adds on to the woes of the investigating agencies. This is based on a ruling by the Delhi High Court, which prohibits the government from issuing such a circular once the accused gets bail. Once the economic offender is released on bail he can also leave the country illegally without the court's permission. 

The government is trying to overcome the Sumer Singh Salkan versus Assitant Director judgement. The predominant idea is to amend either the Criminal Procedure Code or include it in the provisions of bail, which will lead to look-out circular getting a 'statutory-backing'. 

An alternative view is to change the connotation of the circular and call it an 'alert or verification' instead, to monitor the movement of the accused. 

Earlier, The Madras High Court had stayed the lookout circulars issued against former union minister P Chidambaram's son Karti and four others by the Centre under the Passport Act over a corruption case filed by the CBI. 

Justice M Duraiswamy granted the interim stay when petitions filed by Karti and others seeking to quash the circulars came up for hearing. 

The Union government also has empowered chief executives of public sector banks (PSBs) to request a look-out circular against wilful defaulters of loans in an effort to prevent them from fleeing the country. 

This is a significant step as it will enable PSBs to alert authorities to stop wilful defaulters from escaping even before an FIR is registered against them by enforcement agencies.

The government has been attempting to bring back diamond traders Nirav Modi and Mehul Choksi for their involvement in the Rs 143-billion Punjab National Bank fraud, which surfaced in February. While Choksi has been traced in Antigua, Nirav is believed to be in the UK. 

Apart from Nirav and Choksi, several industrialists including Vijay Mallya, founder of the now-defunct Kingfisher Airlines, have fled the country before being declared wilful defaulters.