The main legal point established in the judgment is that the Tribunal does not have the authority to impose travel restrictions on a defaulting borrower/guarantor under the Act of 1993.

V. KAMESWAR RAO, J.

1. The challenge in this petition by the ICICI Bank Limited is to the order dated June 12, 2015 of the Debt Recovery Appellate Tribunal (DRAT) passed in Appeal No. 196/2015, whereby the appeal filed by the respondents 1 and 2 challenging the orders of the Debt Recovery Tribunal (DRT) dated May 9, 2014 and February 23, 2015 directing respondents 1 and 2, if they will go out, they will inform the Tribunal and seek its permission as well, in other words, restraining respondents 1 and 2 to travel abroad, was set aside.

Brief Facts:-

2. It is the case of the petitioner Bank that it had sanctioned various facilities to the respondent No.3 Company, including credit facilities in the form of working capital limits, comprising fund based and non-fund based limits aggregating to Rs.1100.00 million. Respondents 1 and 2 executed Deeds of Guarantee dated October 21, 2011 and October 29, 2012 containing inter-alia the following term:

“2. The Guarantors further agree that unless the said Banks shall otherwise previously approve in writing the Guarantors shall not:

……

(v) Leave India for employment or business or for long term stay abroad so long as any amounts remain outstanding under the Facility together with interest and other dues and charges including prepayment charges as per the rules of the said Banks then in force. Whether the stay is long term or not shall be decided solely by the said Banks.”

3. According to the petitioner, the respondents 1 and 3 also executed an Agreement to Mortgage dated October 29, 2012 whereby they agreed to mortgage their properties (5 in number) mentioned therein. However, it is a fact that they created a mortgage only in respect of three of them and failed to mortgage the remaining two properties. In terms of the Credit Facility Agreements, respondent No.3 was to repay the interest on a monthly basis and the Working Capital Facility was repayable on demand. However, respondent No.3 committed multiple payment defaults under the Facility Agreements from time to time between January 24, 2012 and December 13, 2013. Hence, demand notices were issued by the petitioner Bank. The petitioner Bank, vide its letter dated January 31, 2014 to the respondent No.3 demanded repayment of the principal sum of Rs.109,99,40,876.83/-, along with the interest of Rs.11,19,32,309/- payable by the respondent No.3. The petitioner Bank issued a recall notice to respondent No.3 to repay a total amount of Rs.126,70,99,428.83/- payable along with contractual interest within 7 days from the date of the aforesaid notice. The respondent No.3 acknowledged vide letter dated December 13, 2013 that the outstanding balance due to the ICICI under the Working Capital Facility was of Rs.119,40,01,614/- as on December 12, 2013. The petitioner Bank filed an application dated April 23, 2014 under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (‘Act of 1993’ in short) being O.A No. 125 of 2014 before the Debt Recovery Tribunal against respondents 1 to 4. The said OA was filed as the respondents 1 to 3 had failed to repay the credit facilities. Apart from other reliefs sought, the petitioner prayed for an interim relief including an ad-interim relief that till the final disposal of the application, respondents 1 and 2 be directed not to travel outside India without the prior permission of the Tribunal.

4. The learned Tribunal vide its order dated May 09, 2014 passed an ex parte interim order allowing the prayer to the extent that as and when the guarantors i.e respondents 1 and 2 will go out of India, they will inform the Tribunal and seek its permission. Respondents 1 and 2 again filed applications before the learned Tribunal with the prayer to vacate the interim order dated May 09, 2014. However, these applications were also dismissed by the learned Tribunal vide order dated February 23, 2015 on the ground of them having become infructuous. Respondents 1 and 2 preferred an appeal against the or