Court’s Decision
The Delhi High Court, by an order dated 6 June 2025, allowed two petitioners, who are under investigation for an alleged ₹1626.74 crore bank fraud, to travel abroad, suspending the Look Out Circulars (LOCs) issued against them at the behest of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). Justice Harish Vaidyanathan Shankar emphasized that the right to travel abroad is an essential part of the fundamental right to life and liberty under Article 21 of the Constitution. The Court held that the respondents had failed to provide specific or sufficient reasons for continuing the LOCs, particularly in light of earlier judicial orders that had permitted the petitioners to travel under strict conditions. The Court observed:
“Any restriction of the right to travel without sufficient cause would amount to a violation of his fundamental rights.”
Both petitioners were permitted to travel abroad subject to stringent safeguards including indemnity bonds of ₹50 lakhs and Fixed Deposit Receipts (FDRs) of ₹25 lakhs each, to be forfeited in case of breach of conditions.
Facts
The matter involved two applications filed by the petitioners under Section 151 of the Code of Civil Procedure, 1908 seeking suspension of the LOCs issued against them by the Union of India, at the instance of the CBI and ED. The petitioners are accused in a massive banking fraud case involving Central Bank of India and other consortium banks, with alleged financial irregularities totaling ₹1626.74 crores.
The first petitioner initially sought to travel from 30 May to 15 June 2025, but through an additional affidavit, modified the request to travel from 30 June to 30 July 2025. The second petitioner applied for permission to travel from 15 June to 15 July 2025. Both relied upon prior orders of the learned Special Judge, Prevention of Money Laundering Court, Chandigarh (UID No. HR0089), including those dated 05.03.2025, 29.04.2025, 15.05.2025, and the modified order dated 03.06.2025, which had already permitted them to travel abroad in connection with the same proceedings.
The orders of the Special Judge allowed international travel for a fixed period and imposed stringent conditions, including furnishing addresses, real-time communication with the Investigating Officer, providing itinerary details, non-extension of stay abroad without medical justification, execution of an indemnity bond of ₹50 lakhs, and deposit of an FDR worth ₹15 lakhs before the court. These permissions were granted in pending cases under Section 4 of the Prevention of Money Laundering Act, 2002.
Issues
- Whether the suspension of Look Out Circulars was warranted in light of previous orders passed by the Special Judge permitting travel.
- Whether sufficient justification had been provided by the respondents to restrict the petitioners’ right to travel abroad.
- Whether the petitioners posed a genuine flight risk justifying the restraint on their liberty.
- Whether the denial of travel would violate the petitioners’ rights under Article 21 of the Constitution of India.
Petitioner’s Arguments
The petitioners submitted that there was no legal or factual basis to continue the restraint on their movement, especially when the Special Judge in the PMLA Court had already considered their cases and permitted foreign travel subject to stringent terms. It was pointed out that the Look Out Circular issued by the CBI had already been closed with effect from 1 August 2024 and the one issued by the ED had been suspended by order dated 29 April 2025. They also drew the Court’s attention to the order passed by the Punjab and Haryana High Court on 27 May 2024 in CWP No. 3201/2022, which had set aside the declaration of fraud and quashed the FIR registered in relation to the alleged banking fraud. Though the Supreme Court subsequently remitted the FIR aspect to the High Court, the declaration of fraud remained quashed and the consequential proceedings based on the bank’s complaint had also been stayed.
Further, it was submitted that there had been no attempt by either petitioner to abuse the earlier permissions granted to them. In fact, the learned Special Judge had recorded that nothing had been brought on record by the investigating agencies to suggest that either petitioner had attempted to hamper the trial or misused the concessions extended. The first petitioner sought permission to travel to the United States to attend his child’s graduation ceremony at Yale University, while the second petitioner intended to visit his two children who were employed in the U.S. and unable to travel to India due to work obligations.
Respondent’s Arguments
The respondent bank strongly opposed the applications, arguing that a large-scale fraud had been committed by the petitioners against the Central Bank of India and other consortium banks amounting to ₹1626.74 crores. It was alleged that the petitioners were masterminds behind the fraud and were attempting to evade legal consequences. The bank expressed grave concern that allowing the petitioners to leave India could lead to irreparable damage to the economic interests of the country. It was further stated that since public funds were involved, and given the high financial stakes, there existed a significant risk that the petitioners might not return, especially as they could be seeking a safe haven abroad. The reply filed by the bank included the following assertion:
“The Petitioners cannot be allowed to travel abroad since the Petitioners, presumably in search of a safe haven, will not return to India to repay the loan… public money is involved… the Consortium Banks… may suffer and cause economic loss if relief sought by the Petitioners is granted.”
However, the Court found that these claims were devoid of specific particulars or supporting material.
Analysis of the Law
The Court carefully evaluated the factual backdrop and the legal position relating to the right to travel. It reiterated the well-settled legal proposition that the right to travel is protected as part of the right to life and liberty under Article 21 of the Constitution of India. Any restriction on such a right must be based on a justifiable cause and must satisfy the test of proportionality. In the absence of any cogent evidence showing that the petitioners had misused their previous permissions or attempted to flee from justice, the Court found the bank’s apprehensions unsubstantiated.
Further, the Court found that since both the CBI and ED had either closed or suspended their respective LOCs, there was no surviving restraint imposed by the investigating agencies themselves. The prior orders of the learned Special Judge granting permission to travel after full application of judicial mind, and in cases involving the same set of allegations, also tilted the balance in favour of granting relief.
Precedent Analysis
The Court relied upon the following precedents and orders:
- Special Judge, PMLA Court, Chandigarh (Orders dated 05.03.2025, 29.04.2025, 15.05.2025 as modified by 03.06.2025): These orders had already granted permission to both petitioners to travel abroad, subject to strict safeguards. The Court adopted similar conditions in its own order.
- Punjab & Haryana High Court (Order dated 27.05.2024 in C.W.P. No. 3201/2022): The declaration of fraud was set aside and the FIR quashed. Although the Supreme Court later remitted the FIR issue, the order concerning the fraud declaration continued to hold the field.
- Supreme Court (Unnamed order remitting matter): The Supreme Court remitted the issue of FIR quashing back to the High Court but did not interfere with the setting aside of the fraud declaration. This nuance was critical in assessing the strength of the bank’s case.
The High Court’s observations were also consistent with the broad principles laid down in Maneka Gandhi v. Union of India, where the Supreme Court held that the right to travel abroad forms an essential component of Article 21.
Court’s Reasoning
The Court found that the objections raised by the respondent bank were “highly generic and vague” and failed to demonstrate any concrete risk posed by the petitioners’ proposed travel. It was noted that both petitioners had cooperated with the investigation and had not breached any condition in the past. The Court also recorded that the primary motive of travel—to attend a graduation ceremony and to visit children working abroad—was genuine and did not appear to be a pretext for evading the legal process.
In the absence of any new incriminating material and in light of the earlier permissions granted by the Special Judge, the Court found no compelling reason to restrict the petitioners’ liberty.
Conclusion
The Delhi High Court suspended the LOCs and allowed both petitioners to travel abroad, subject to compliance with the following conditions:
- Execution of an indemnity bond of ₹50 lakhs before the Court, which would be forfeited in the event of any breach.
- Submission of a Fixed Deposit Receipt (FDR) of ₹25 lakhs in their own name, which cannot be encashed without the Court’s permission.
- Compliance with the seven conditions imposed by the Special Judge in earlier orders, including detailed communication with investigating agencies, submission of itinerary, return within fixed dates, and no travel beyond permitted countries (USA, Mexico, Japan).
The matter was listed for compliance before the concerned Joint Registrar on 13 June 2025.
Implications
This judgment reinforces the principle that constitutional rights, particularly the right to travel under Article 21, cannot be curtailed merely on the basis of vague suspicions or speculative apprehensions. It highlights the necessity of judicial scrutiny over executive restrictions like LOCs and emphasizes that personal liberty must not be sacrificed in the absence of concrete justification. The order also signals that courts will continue to uphold individual rights even in cases involving high-stakes financial fraud, provided due process has been followed and previous judicial orders have not been violated.
Also Read: Delhi High Court Refuses Bail in NDPS Case Involving Commercial Quantity of Poppy Straw
