Right to Travel under Article 21 Prevails Over 'Generic and Vague' Bank Objections in ₹1626 Crore Fraud Case: Delhi High Court - 2025-06-06

Delhi High Court Allows Accused in ₹1626 Crore Bank Fraud Case to Travel Abroad, Citing Fundamental Rights

NEW DELHI – The Delhi High Court has granted two petitioners, accused in a bank fraud case amounting to ₹1626.74 crores, permission to travel abroad, emphasizing that the fundamental right to travel cannot be curtailed based on "highly generic and vague" objections. Justice Harish VaidyanathanShankar , while allowing the applications, suspended the Look Out Circulars (LOCs) issued against the petitioners at the behest of a consortium of banks led by the Central Bank of India.

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Background of the Case

The case, Vineet Gupta v. Union of India & Ors. , involved two separate applications from petitioners seeking permission to travel to the USA. Petitioner No. 1 sought to attend his child's graduation from Yale University, while Petitioner No. 2 wished to visit his children residing and working in the United States. Their travel was impeded by an active LOC issued by the banks.

The petitioners are embroiled in multiple legal proceedings initiated by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) concerning the alleged bank fraud.

Arguments in Court

Petitioner's Counsel Argued: - The petitioners had already secured travel permissions from the Special PMLA Court in Chandigarh for the related CBI and ED cases. - The LOC initiated by the CBI had been closed, and the one by the ED was suspended by court orders. - A crucial development was the Punjab & Haryana High Court's order setting aside the bank's declaration of "Fraud" against them. - They contended that restricting their travel based on the bank's LOC, especially for significant family events, was a violation of their fundamental right to travel under Article 21 of the Constitution.

Respondent Bank's Counsel Argued: - The petitioners were the "masterminds" behind a large-scale fraud of ₹1626.74 crores involving public money. - There was a grave risk that the petitioners would abscond and seek a "safe haven" abroad, which would be detrimental to the country's economic interests. - Allowing them to leave India would jeopardize the recovery of the substantial loan amount.

Court's Rationale and Judgment

Justice Shankar found the bank's arguments unconvincing, noting a lack of specific evidence to back their claims. The court's decision was anchored in several key observations:

1. Vague Objections: The court criticized the bank's reply opposing the travel, stating: > “This reply, to say the least, is highly generic and vague without giving particulars in any manner, as to the assumptions set out therein.”

2. Prior Judicial Scrutiny: The High Court gave significant weight to the fact that the Special Courts in Chandigarh, handling the PMLA and CBI cases, had already permitted the petitioners to travel. The judgment noted that the Special Judge had found "nothing in particular brought on record by the CBI to establish that Petitioner No. 1 had attempted to hamper the trial and misuse any concessions granted earlier."

3. Fundamental Right to Travel: The court reiterated a well-established legal principle, stating: > “It is also appropriate to mention that the right to travel has been held by the Hon’ble Supreme Court as an integral part of the fundamental right to life under Article 21 of the Constitution of India, and any restriction of the same without sufficient cause, would amount to a violation of his fundamental rights.”

4. Legitimacy of Travel Reasons: The court deemed the reasons for travel—attending a child’s graduation and visiting family—as appropriate and valid. Regarding the graduation, the court remarked, "Undoubtedly, the graduation of a child from Yale University is a matter of great pride and this Court does not find it inappropriate to permit Petitioner No. 1 to travel for the said purpose."

Final Decision and Conditions

The High Court permitted both petitioners to travel abroad for a specified period. To ensure their return, the court imposed stringent conditions, including several adopted from the Chandigarh court's order, such as providing a detailed itinerary and keeping their mobile phones active.

In addition, Justice Shankar imposed further financial security:

- An indemnity bond of ₹50 lakhs to be furnished before the High Court.

- A Fixed Deposit Receipt (FDR) of ₹25 lakhs to be deposited with the court.

Both the bond amount and the FDR will be forfeited if the petitioners violate any of the travel conditions. The case is scheduled for a compliance check before the Joint Registrar on June 13, 2025.