Right to travel abroad is fundamental right: P&H HC while allowing suspended Director to visit foreign countries in order to gather investment for company facing Insolvency proceedings

Read Order: Amit Sureshmal Lodha v. State of Haryana

LE Correspondent

New Delhi, March 25, 2022: While holding that the petitioner is vested with the fundamental right to travel abroad, the Punjab and Haryana High Court has allowed the petitioner, an erstwhile director of a company facing Insolvency and Bankruptcy proceedings to travel abroad in order to meet with the potential investors and persuade them into investing in the company so as to revive it if liquidation proceedings are initiated against the said company. 

In this case, before the Bench of Justice Vikas Bahl, the petitioner was facing trial in an FIR registered under Sections 420/406/120-B/34 of IPC and in the said case, the petitioner was already granted the concession of bail. Also, on an earlier occasion, the High Court allowed the petitioner to travel abroad for about a month and in compliance with the said order, the petitioner returned to India. 

It was the case of the petitioner’s Counsel that the petitioner was the Director (suspended) of a company facing proceedings initiated under Section 9 of the I&B Code, 2016 and the same is pending before the National Company Law Tribunal, Mumbai Bench. It was further the case of the petitioner that in case, a Resolution plan is not submitted or is not found to be viable then the company could be ordered to be liquidated by the Tribunal and the company has over 500 employees who would be rendered jobless. 

It was also submitted that the petitioner holds 93% of the shareholding of the company, thus for the sake of the employees of the company as also his own interest, the petitioner wanted to revive the company. In order to do so, the Court submitted that the petitioner personally wanted to meet the overseas investors in USA/Europe so as to foster the confidence of the investors so that the Resolution Plan can move forward. Also, it was argued that the petitioner was released on bail and the investigation was ongoing thus, he had the right to travel abroad. The Counsel also highlighted the fact that the petitioner returned to India after he was granted permission to go aboard for a month, to contend that the petitioner has no intention of absconding. 

Thus, the petitioner filed an application for travelling abroad, however the same was rejected hence, the petitioner approached the High Court again to seek permission for such travel. 

On the other hand, the case of the State and that of the compliant was primarily that earlier, the petitioner was given the permission to visit the USA for a family reunion and also on account of the medical difficulties faced by the wife of the petitioner. It was further submitted that in the present petition, no details were given with respect to the persons who are the proposed/prospective investors, as also the European countries to which the petitioner intends to travel. It was argued that the petitioner did not own any property in India and thus, there was a chance that he would abscond. To address the argument of meeting with the investors, it was contended that the meetings could be conducted via video conferencing. 

At the very outset, the Court looked into its earlier order to observe that the earlier order allowing the petitioner to travel abroad, considered broadly all the factors which were highlighted by the Counsels be it fundamental right to travel abroad or the pendency of Section 138 NI Act proceedings against the petitioner, to name a few. 

On the aspect of the right to travel abroad, the Court opined that the petitioner is vested with the fundamental right to travel abroad and it cannot possibly be disputed in view of the various judgments of the Supreme Court and various other Courts, on the said aspect as well as in view of the observations made in the High Court itself in this respect vide its order, which attained finality after not being challenged. 

After looking into the impugned order the Court opined that the application of the petitioner was rejected primarily on the ground that the allegations levelled against the petitioner were grave and serious and that the prospective investors could also be contacted by way of video conferencing and further, that the details of prospective investors were not provided in the petition. The court was thus of the opinion that the impugned order deserved to be set aside. 

Next, addressing the apprehension of the state that the petitioner would abscond if allowed to travel abroad, the Court observed that this argument was without any basis as the petitioner duly returned to India in compliance with the directions of the Court’s earlier order and he also was appearing before the trial Court, as and when called to do so. 

Further, the Court opined that in case, the petitioner is able to convince the prospective investors, who are stated to be based in USA/UK, then the same could help in reviving the company and the employment of several persons who are stated to be the employees of the company could be saved. Also, regarding the observation in the impugned order to the effect that the prospective investors could be contacted by way of video conferencing, the Court held that the same could not be sustained and the Court found more substance in the plea of the petitioner that it is pertinent to personally meet the said investors so as to convince them to make the requisite investments and also to work out the various financial aspects. 

Lastly, the Court observed that the case before the trial Court was fixed for May 23, 2022, and thus, in case, the prayer of the petitioner to travel abroad up to April 30, 2022, was allowed, then the same would also not delay the trial in any way. 

Thus, the Court allowed the present petition while imposing certain conditions.