DRT Cannot Impose Overseas Travel Restrictions Without Statutory Authority: High Court Quashes Recovery Officer’s Conditions as Unconstitutional
- REEDLAW
- 1 day ago
- 3 min read
In a landmark ruling reinforcing constitutional protections, the Madhya Pradesh High Court held that the Debts Recovery Tribunal and its Recovery Officer have no statutory authority under the Recovery of Debts and Bankruptcy Act, 1993, to impose conditions restricting a citizen’s right to travel abroad. The Court concluded that, in the absence of any enacted law authorising such curtailment, the travel-related conditions imposed during recovery proceedings violated Articles 19 and 21 and were therefore unconstitutional and liable to be quashed.
The Madhya Pradesh High Court Single-Judge Bench of Justice Pranay Verma, while adjudicating a Writ Petition, observed that neither the 1993 Act nor the rules framed thereunder empower the DRT or its Recovery Officer to restrain overseas travel or impose travel-related conditions upon a debtor. The Court held that such restrictions, being unsupported by statutory backing, directly infringe fundamental rights to personal liberty and freedom of movement. It ruled that constitutional freedoms cannot be abridged through administrative action, and in the absence of express legislation permitting such restrictions, the Recovery Officer’s directions were unconstitutional and unsustainable.
The petition was filed under Article 226 of the Constitution, challenging the order of the Recovery Officer of the Debts Recovery Tribunal, which had permitted the Petitioner to travel abroad only upon depositing Rs. 50 crore or furnishing equivalent security by way of immovable property or shares. The Petitioner, an ex-Director of a borrowing company and a co-guarantor, had sought permission to travel to the United States for employment. While his assets had already been attached, the Recovery Officer imposed onerous financial conditions for granting travel clearance.
The Petitioner contended that such conditions were beyond the statutory powers of the Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and violated the fundamental rights to profession and personal liberty under Articles 19(1)(g) and 21. It was argued that the Act and its Rules contained no provision empowering the DRT or its Recovery Officer to restrict international travel or impose pre-conditions for such travel. Reliance was placed on precedent affirming that the right to travel abroad formed an integral part of personal liberty and could not be curtailed without an enacted law.
The Respondent opposed the petition on the grounds of maintainability, availability of an alternative appellate remedy, and the Petitioner’s prior non-compliance with conditional orders. It was asserted that permitting travel created a risk of non-return and that the conditions imposed were justified to secure the bank’s interest. However, previous judicial directions requiring the Petitioner to approach the appellate authority were cited in support of maintainability objections.
The Court examined decisions of the Supreme Court and multiple High Courts, which uniformly held that the right to travel abroad constituted a facet of personal liberty under Article 21 and could be restricted only through enacted law. It was noted that neither the 1993 Act nor its Rules conferred power upon the DRT to restrain a person from travelling abroad or impose travel-related conditions. Since the statute did not even implicitly authorise such restrictions, any such condition amounted to an unconstitutional deprivation of liberty.
It was further held that when the Tribunal lacked power to prohibit travel itself, it equally lacked jurisdiction to impose onerous financial preconditions for allowing travel. Such conditions effectively operated as a restriction on the Petitioner’s fundamental right and could not be sustained in law. The objection regarding the availability of an alternative remedy was rejected since the case involved a violation of fundamental rights, warranting the exercise of writ jurisdiction.
Consequently, the writ petition was allowed, and the impugned condition requiring a deposit or security as a prerequisite for foreign travel was quashed as unconstitutional and without authority of law.
Mr. Ravindra Singh Chhabra, Senior Advocate, with Mr. Raghav Raj Singh, Advocate, represented the Petitioner.
Mr. Sanjay Pathak, Advocate, appeared for the respondent.
This is premium content available to our subscribers.
To access the full content related to this article — including the complete judgment, detailed legal analysis, ratio decidendi, headnotes, cited case laws, and updates on relevant statutes and notifications — we invite you to subscribe to REEDLAW’s premium research platform.
Click here to Subscribe and unlock exclusive access to structured legal analysis, judicial summaries, and a comprehensive legal research database.
REEDLAW Legal Intelligence & Research is India’s most trusted legal publishing and research platform, empowering professionals with structured judicial insights and authoritative legal intelligence since 1985.
The platform offers comprehensive resources spanning Corporate Insolvency, Bankruptcy, Company Law, SARFAESI, Debt Recovery, Contract, MSMEs, Arbitration, Banking, and Commercial Laws. Through curated journals like IBC Reporter and Bank CLR, and an advanced Online Legal Research Database, REEDLAW simplifies complex legal research for professionals, institutions, and academia across India.
Comments