Debt Recovery Tribunal Cannot Restrict Person's Foreign Travel Or Impose Conditions On It: MP High Court

The Madhya Pradesh High Court, on Tuesday (December 2), held that since the Debts Recovery Tribunal does not have the power to restrict a person's fundamental right to travel abroad, it also cannot impose conditional requirements for such travel. 

This observation was made in a petition filed by the ex-Director of Metalman Industries Limited challenging the order of August 22, 2025, passed by the Recovery Officer, so far as he had imposed conditions on the petitioner's travel to the effect that he shall deposit an amount of ₹50,00,00,000 in an official account which is to be kept as surety for the Bank. 

The bench of Justice Pranay Verma observed; 

"When the Tribunal does not have the power to deprive a person of his right to travel abroad then it would not also have any power to impose any condition upon him for travelling abroad. The conditions as have been imposed by the Recovery Officer of the Tribunal upon the petitioner by way of the impugned order are hence unsustainable and cannot be given the stamp of approval since they effectively deprive him of his right to travel abroad". 

The respondent Bank had lent money in which the petitioner was a co-guarantor to the loan, and since there was a default in repayment of loans, it was declared as Non-Performing Assets (NPA). The Bank had applied to Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, and the Tribunal had issued a recovery certificate in favour of the Bank. 

The petitioner, however, informed that he had received an offer of appointment in the USA and had accepted the same. Thereafter, he approached the Tribunal by filing an application to travel abroad, which was contested by the respondent Bank. 

The counsel for the petitioner claimed that the impugned conditions exceeded the powers conferred upon the authority by the Act of 1993 and the Rules made thereunder. The conditions violated the fundamental rights of the petitioner for being arbitrary, illegal and unreasonable by imposing unreasonable restrictions on his free movement abroad and adversely affecting his livelihood and employment. 

The counsel for the Bank claimed that the petitioner had an alternate remedy by preferring an appeal before the Presiding Officer of the Tribunal against the impugned order passed by the Recovery officer. It was argued that the petitioner was liable to pay a huge amount to the Bank and hence cannot be permitted to travel abroad in case there was a possibility of his absconding. 

The bench relied on the case of Satwant Singh Sawhney v. D. Ramarathnam [AIR 1967 SC 1836], wherein the Supreme Court held that the Tribunal had no power to restrain a citizen from travelling abroad as the provisions of the 1993 Act do not confer the power to do the same. 

Further, the bench reiterated that the right of a person to travel abroad is a fundamental right guaranteed under Articles 19 and 21 of the Constitution and that no person could be deprived of this right except according to the procedure established by the law. 

The bench further clarified that the law would mean 'enacted law' or 'state law', but in the present case, nothing was produced on record to show that a law has been made by the State regulating depriving a person of such a right in case of proceedings under Section 19 of the Act, 1993. 

Additionally, the bench observed that when the Tribunal does not have the power to deprive a person of his right to travel abroad, then it would not also have the power to impose any condition upon him for travelling abroad. 

"Though permission has been granted by the Tribunal but on such conditions as above which in absence of any power itself to prohibit the petitioner from traveling abroad cannot be sustained", the bench held. 

Thus, the court allowed the petition and quashed the imposed condition no 2 in the impugned order dated August 22, 2025. 

Case Title: Rajiv Soni v ICICI Bank [WP-40054-2025]

For Petitioner: Senior Advocate Ravindra Singh Chhabra with Advocate Raghav Raj Singh 

For Respondent: Advocate Sanjay Pathak

Click here to read/download the Order