Onerous Financial Conditions Cannot Obstruct Right to Travel: Bombay High Court Quashes Mandatory Deposit

In a significant ruling regarding the balance between judicial conditions and personal liberty, the Bombay High Court has set aside an order by a Special Judge that demanded a massive deposit of over ₹27 crore as a precondition for foreign travel. Justice N.J. Jamadar emphasized that conditions attached to travel permissions must be reasonable and proportional to the objective of ensuring the presence of an accused during trial.

The Backdrop: A Decade of Litigation

The petitioner, Ketan V. Parekh, has been facing prosecution by the Securities and Exchange Board of India (SEBI) for over a decade regarding alleged market manipulation. While out on bail since 2016, Parekh has frequently sought and received permission to travel abroad.

The dispute arose when the Special Judge, hearing the SEBI-initiated cases, granted permission for an upcoming family trip to Thailand and the UAE, but imposed a heavy financial barrier: a deposit of ₹27,06,73,574. This amount was derivative of an ex-parte interim order issued by SEBI in January 2025, which had yet to attain finality or be enforced through recovery proceedings.

Arguments: Liberty versus Regulatory Enforcement

Counsel for the petitioner argued that the court’s condition was "onerous" and effectively negated the very permission it purported to grant. They contended that because the petitioner had traveled abroad on numerous occasions without incident, he was clearly not a flight risk. Furthermore, legal counsel highlighted that the SEBI interim order was collateral to the current prosecution and not a final determination of liability.

Conversely, SEBI argued that the petitioner’s past conduct and alleged involvement in market malpractices warranted a strict judicial approach. Asserting that "economic offences constitute a class apart," SEBI maintained that the Special Judge rightly exercised discretion to balance equities by ensuring the petitioner remained financially accessible for future disgorgement.

The Court’s Analysis: The Proportionality Test

Justice N.J. Jamadar underscored that the right to travel abroad is an integral facet of the right to personal liberty under Article 21 of the Constitution. The Court clarified that while a judge has the power to set conditions for travel, these must have a "reasonable nexus" with the object of maintaining the integrity of the trial.

The Court noted that the Special Judge failed to establish that the deposit was necessary to ensure the petitioner's presence or that he was a flight risk. Instead, the condition acted as an enforcement mechanism for a separate regulatory order.

Key Observations

The judgment offers a clear view on the limits of judicial discretion:

• On the nature of conditions: "The right to travel abroad has been considered to be a facet of right to life and personal liberty, and, thus, cannot be subjected to unreasonable and arbitrary restrictions."
• On the nexus of conditions: "On first principles, the conditions and restrictions which the Court may impose while granting permission to travel abroad ought to have reasonable nexus with the object of ensuring the presence of the accused at the trial."
• On the role of collateral orders: "A direction for deposit of the said amount appears to be a measure towards the enforcing the interim order... the deposit of the said amount cannot be made a condition precedent for travel abroad."

Final Verdict: A Balanced Approach

The High Court quashed the ₹27-crore deposit requirement, replacing it with a condition to deposit ₹5,00,000 for each case as a security bond. This ruling clarifies that courts cannot leverage bail conditions to act as collectors for regulatory bodies in matters exceeding the scope of the criminal trial at hand.

By prioritizing the proportionality of conditions, the Bombay High Court has reinforced that judicial authority in bail matters must remain focused on court processes rather than serving as a proxy for civil recovery proceedings.