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DRT Has No Power In Law To Restrain A Debtor's Fundamental Right To Travel Abroad: Bombay High Court.

By - Arjun Sathish on July 27, 2022

The case is concerning the Petitioner's right to travel abroad. Anurag Gupta (the Petitioner) approached the Bombay High Court under Articles 226 and 227 of the Constitution of India challenging the Order of the Debts Recovery Tribunal, Nagpur (DRT) rejecting his plea to travel abroad. He is the personal guarantor of Gupta Energy Pvt. Ltd. which is engaged in electricity and power generation. To establish the power plant, a consortium of banks led by Axis Bank Limited financed the project. In 2016, the consortium filed an application before the DRT seeking the recovery of around INR 110 crores and sought a ban on his travelling abroad. In 2018, the DRT restrained the Petitioner from doing so. The Petitioner filed an application with the Debts Recovery Tribunal, Nagpur seeking permission to travel abroad for a short duration to Turkey, under special circumstances. This was rejected in 2022.

The Petitioner then approached the Bombay High Court, contending 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, it could not be curtailed, especially since the law does not confer any such power on the Tribunal. In turn, the bank took a stand in the Hon’ble High Court that the DRT had wide powers to meet the ends of natural justice.

The division bench of the Nagpur bench of the Hon'ble High Court, therefore, held that the DRT cannot restrain a citizen from travelling abroad since there is no specific or implied provision empowering it under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The High Court further agreed that a citizen’s right to travel abroad comes under “personal liberty” as defined under Article 21 of the Constitution and therefore, to restrain a person from travelling abroad, it was necessary to have such a provision under the Act. The Court further observed that the DRT was not allowed to exceed its powers conferred by the Code of Civil Procedure to ensure natural justice concerning Section 22 of the Act. The High Court observed, "In our view, Section 22 confers the procedural right to regulate proceedings before it.”

The Division Bench of the Bombay High Court set aside the impugned order of the DRT and allowed the Petitioner to travel to Turkey.

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