The Debt Recovery Tribunal (DRT) cannot prevent a citizen from traveling abroad as there is no specific or implied provision authorizing it under the Banks and Debts Recovery Act 1993. financial institutions, the Nagpur Bench of the Bombay High Court said.
The bench of Judges AS Chandurkar and Amit Borkar points out that a citizen’s right to travel abroad is part of “individual freedom” as defined in Article 21 of the Constitution. Therefore, to prevent a person from traveling abroad, it was necessary to have such a provision under the law.
Finding so, the bench quashed the DRT order and allowed the petitioner to travel to Turkey for a family wedding. “The State has made no law or provision in said law intended to deprive or regulate a person’s right to travel abroad. The order is therefore subject to cancellation.”
The Court also declared that the DRT was not authorized to exceed its powers conferred by the CPC to ensure natural justice with reference to section 22 of the Act. “In our view, Article 22 confers the procedural right to regulate the proceedings before it.“
Referring to subsections subsections 12, 13 (A), 17 and 18 of section 19, which empowers the court to make such orders as may be necessary to give effect to its orders, prevent abuse of its process or secure the purposes of its justice, the bench held that a person cannot be prevented from traveling abroad under these articles.
“In the absence of a specific provision conferred by law on the Debt Recovery Court, the Debt Recovery Court does not have the power to prevent a citizen from traveling abroad, in particular when the said right has been recognized as a facet of Article 21 of the Constitution of India.”
Facts of the case
The petitioner – businessman Anurag Gupta has applied to the Bombay High Court under Sections 226 and 227 of the constitution to challenge the DRT’s order rejecting his appeal to travel.
Gupta is a personal guarantor of Gupta Energy Pvt. Ltd engaged in power and electricity generation. To establish the power plant, a consortium led by Axis Bank Limited and another group of lenders funded the project.
Proceedings under the Insolvency and Bankruptcy Code 2016 are pending against the company before the NCLT and a winding up order was passed in 2018.
In 2016, the consortium filed a claim with DRT Nagpur seeking to recover ₹110.15 crore and also sought to prevent Gupta from traveling abroad.
In 2018, the DRT prevented Gupte from making trips abroad. However, last month Gupta applied to the DRT for a travel permit which was denied.
He then went to the High Court saying that since the right to travel abroad has been recognized by the Supreme Court as a facet of personal liberty under Article 21 of the Indian Constitution, he could not be restricted, especially since the law conferred no such freedom. power over the Court.
On the contrary, the bank said the DRT had broad powers to meet the ends of natural justice.
While agreeing with the petitioner, the court stated that it was not unaware of the need to regulate the issue of recovery of public money. However, “On examining the economy of the said law, we consider that the order refusing authorization to travel abroad was issued in violation of the provisions of article 21 of the Constitution and violates the right guaranteed to the applicant by Article 21.”
Case title: Anurag N/A. Padmesh Gupta v Bank of India
Appearance: Akshay Naik a/w Mr. DV Chauhan and Mr. CJ Dhruv, lawyers for the petitioner.
MAT Purohit, Counsel for Respondent #1.
Mr. D. Gupta, Counsel for Respondent #2 (Official Liquidator)