SC Stays HC Order On SBI’s Plea Allowing Defaulter Of Multi-Crore Loan To Travel Abroad

The Supreme Court recently heard an urgent petition filed by the State Bank of India to stay an order passed by the Bombay High Court that allowed a loan defaulter to travel abroad.

Solicitor General of India Tushar Mehta, who appeared for the SBI, mentioned the matter before Chief Justice of India Chandrachud seeking an urgent hearing, raising the apprehension that the person might become a fugitive. The petition was filed against Ms.Suman Vijay Gupta, the Chairperson of Ushdev International Limited.

Considering the urgency of the matter, CJI agreed to hear the case, where it was not otherwise listed for the day.

The Solicitor General told the bench comprising CJI Chandrachud and Justice PS Narasimha that Gupta was the chairperson of a company that took a loan of ₹3300 crores. After the loan was declared to be a Non-Performing Asset, she renounced her citizenship in India and got citizenship in the Dominican Republic, a tax haven.

The SG further told the bench that the CBI is investigating the loan matter after the loan became NPA and Look Out Circulars were issued against Gupta. She filed a petition before the Bombay High Court seeking permission to travel abroad. The High Court permitted her to travel abroad on giving an undertaking.

Therefore, the Solicitor General raised a concern that she might become untraceable if she is allowed to leave India, particularly considering the fact that India has no extradition treaty with the Dominican Republic.

While issuing notice on the petition, the bench stayed the High Court order.

The impugned order passed by a division bench comprising Justices GS Patel and Neela Gokhale of the High Court had observed as follows :

“We see no reason to prohibit the travel simply on the ground that the Petitioner is a foreign national. Indeed that seems to us to raise more questions than it answers because for an Indian citizen action could be taken under the Passports Act, but this is clearly not possible in the case of a person holding a foreign passport.”