Mumbai: The Bombay High Court has set aside a special court’s direction requiring former stockbroker Ketan Parekh to deposit ₹27 crore with the Securities and Exchange Board of India (Sebi) as a precondition for travelling abroad. Instead, the court has asked him to furnish a ₹5-lakh security deposit, holding that the earlier mandate was neither reasonable nor proportionate to the objective of securing his presence during trial.
Sebi Interim Order Could Not Justify Travel Restriction
Parekh, barred from the securities market for 14 years over his alleged role in the 2000–01 market manipulation scam, faces criminal proceedings before a special Sebi court in Mumbai. He had challenged the special court’s earlier order, which was based on a Sebi interim directive from January stating that ₹27 crore allegedly part of unlawful gains was liable to be impounded.
Justice N. J. Jamadar noted in the order that “it does not appear that the learned Special Judge found it necessary to impose the said condition to secure the presence of the petitioner at the trial or to ensure that the conditions of bail were complied with.” Instead, the deposit condition appeared to be “a measure towards enforcing the interim order and show cause notice dated January 2,” the court observed.
Court Says Enforcement Cannot Override Right to Travel Abroad
While clarifying that Parekh must still face statutory consequences for not depositing the impugned amount under the Sebi Act and its regulations, the court emphasised that such enforcement “cannot be made a condition precedent for travel abroad in connection with prosecutions initiated a decade ago.”
The High Court also stated that the remaining conditions laid down by the special court for granting him permission to travel would remain unchanged.
Reiterating constitutional principles, the court said the “right to travel abroad has been considered to be a facet of the right to life and personal liberty, and thus cannot be subjected to unreasonable and arbitrary restrictions, even when a person is facing prosecution.” Conditions imposed for foreign travel, it added, must not be “so onerous that the right itself is defeated.”
Arguments from Both Sides
Parekh had sought permission to travel to Thailand from November 5 to 9, and to the UAE from November 18 to 28 for a family vacation and wedding.
Senior Advocate Amit Desai, appearing for Parekh, argued that he had travelled abroad earlier and returned without violating bail terms, proving he was not a flight risk. He also submitted that the Sebi interim order could not be treated as final since no proceedings had been initiated pursuant to it. Therefore, the special court, he argued, had erred by relying on a “collateral proceeding” unconnected to the pending cases.
Sebi’s counsel, Senior Advocate Chetan Kapadia, opposed the plea, contending that the interim order had attained finality as it had not been challenged. Kapadia further argued that Parekh had “indulged in manipulative trade while on bail.”
Special Court’s Earlier View
Last month, the special court had refused blanket permission for Parekh to travel abroad for four months, relying on Sebi’s allegation that he had misused earlier travel permissions. Parekh then sought limited travel approval, which the special court granted subject to the now-struck-down ₹27-crore deposit condition.
