Allowed

Pradip J. Mundhra v. Punjab National Bank

DRAT26 Jul 2023MISC APPEAL/50/2023

Case brief

AI extract

What is this about?

Mr. Mundhra appealed an order directing him to deposit his passport and forbidding him from leaving the country. The Debt Recovery Appeals Tribunal held that it lacks statutory power to restrain travel under the RDB Act and, relying on constitutional principles, set aside the order and directed the release of the passport.

What did the court decide?

Set aside the order restraining the Appellant from travelling abroad and directing the release of the Appellant's passport.

Pradip J. Mundhra versus Punjab National Bank — Pension and Retirement Benefits | DRAT (2023)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson

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Misc. Appeal No. 50/2023

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Between

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Pradip J. Mundhra … Appellant/s V/s.

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Punjab National Bank …Respondent/s

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Mr Puneet Gogad along with Mr Ajali Gupta U Ms. Samita V., i/b M/s. Pritesh Burad & Associates, Advocate for Appellant. Ms Asha Bhuta, i/b M/s Bhuta & Associates, Advocate for Respondent Bank.

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The Appellant is the seventh Defendant in Original Application (O.A.) No. 141 of 2015 on the files of the Debts Recovery Tribunal, Aurangabad (D.R.T.). This misc. appeal is filed by the Appellant impugning the order dated 07.04.2016 in Exhibit-41 filed by the Respondent Bank seeking a direction to impound the passport of Defendants Nos. 4,7 and 9 and to direct them to deposit the same in the Tribunal during the pendency of the O.A. and the recovery of dues from them. The Ld. Presiding Officer allowed the application and directed Defendants Nos. 4, 7 and 9 to deposit their passport with the Registrar of the Tribunal within 10 days and further directed those Defendants to not leave the country without obtaining prior permission of the Tribunal.

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Heard both sides.

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The Appellant states that in compliance with the order, the Appellant has already deposited his passport in the Tribunal on 29.09.2018. He claims to be the erstwhile director of M/s Tulsi Extrusions Ltd. He however resigned from the directorship on 03.09.2014. The Respondent Bank had filed the aforesaid O.A. against the company and others for recovery of ₹199,02,33,170.84 together with interest at the rate of 15% per annum with monthly rests with effect from 26.04.2015 till realisation under the provisions of the Recovery of Debt Due to Bank and Financial Institution Act, 1993 (“RDDB& FI Act”, for short). It is in this O.A. that Exh.41 application was filed for impounding the passport and to restrain the Appellant from travelling abroad without prior permission of the D.R.T. The Appellant is aggrieved and hence in appeal. He had earlier filed a Writ Petition No. 4406 of 2016 before the High Court of Bombay Bench at Aurangabad and in that writ petition, he was allowed to travel to South Africa for business purposes vide an interim order dated 03.05.2016. Thereafter, the writ petition was withdrawn with the liberty to approach this Tribunal for appropriate remedy. Thus the present appeal was filed with an application to condone the delay. The delay was condoned by this Tribunal vide order dated 28.02.2023 and the appeal was taken on file.

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The Appellant had earlier made several applications for seeking permission to travel abroad and he was also allowed to travel abroad on numerous occasions. The Appellant had complied with all the directions given by the Tribunal while permitting him to travel abroad. The NCLT had vide order dated 20.02.2020 passed orders with regard

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to the liquidation of the company and a liquidator was appointed on 02.03.2020. The company was sold as an ongoing concern to the buyer approved by the CoC and the Respondent Bank has received the dues from the liquidation proceedings. The O.A. which is pending since 2015 has not been pursued by the Bank in view of the realisation of the amount by the sale of the company. There is no purpose in retaining the order precluding the Appellant from travelling abroad. Moreover, it is also contended that the D.R.T. has no powers to either impound the passport or to restrain the Appellant from travelling abroad. The impugned order passed by the D.R.T. is, therefore, beyond the powers conferred by the D.R.T. by Act and Rules. Hence, it is prayed that the appeal may be allowed and the impugned order be set aside.

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The Hon’ble Supreme Court has in Satvant Singh Sawhney vs. D. Ramarathnam, Assistant Passport Officer, New Delhi AIR 1967 SC 1836, held that the right to travel abroad is a fundamental right. It is also held that the action of law regulating or depriving a person of such right, refusal to give a passport or withdrawal of one violates Articles 14 and 21 of the Constitution of India. In the decision of Smt. Maneka Gandhi vs. Union of India (1978) 1 SCC 248 , it is held that the expression ‘personal liberty’ in Article 21 is of the widest amplitude, which includes the right to go abroad. It is further held that no person could be deprived of his right to go abroad unless there is a law made by the State prescribing the procedure for depriving a citizen of his right to go abroad.

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A perusal of the provisions in the RDB Act or the SARFAESI Act does not confer the Tribunal with specific power to restrain a person from going abroad. The Division Bench of the Hon’ble High Court of Bombay has after considering the powers of the D.R.T. under the provisions of the RDB Act to restrain a person from travelling abroad, in Anurag vs. Bank of India through its Assistant General Manager & Ano. AIR 2022 Bom 206 held thus:

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“^{On consideration of the scheme of the said Act, we hold that the} order refusing permission to travel abroad has been made in contravention of the provisions of Article 21 of the Constitution and is violative of the right guaranteed to the petitioner under Article 21. The State has not made any law or provision in the said Act seeking to deprive or regulate the right of a person to travel abroad. The order is, therefore, liable to be set aside.”

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The Ld. Presiding Officer was, therefore not justified in restraining the Appellant from traveling abroad. The impugned order is, therefore, to be set aside.

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Resultantly, the Appeal is allowed and the impugned order is set aside and the D.R.T. is directed to release the passport of the Appellant.

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mks-1

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Sd/Chairperson

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Pradip J. Mundhra v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Pradip J. Mundhra v. Punjab National Bank

Case brief

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What did the court decide?

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