Umbrella Care Limited v Khalid Usman Raja

A passport order may be made under section 37 of the Supreme Court Act 1981 to support a significant court process, including enforcement after judgment or the administration of a bankruptcy. The applicant must show a real risk that the respondent will leave and not return, and that the absence would materially prejudice the relevant process. The restraint must remain proportionate, since the law favours liberty.

A passport order must not be used as a ransom to compel payment of a judgment debt or the provision of information where no continuing court process is being supported. The duration of the order is not subject to a fixed limit, but longer restraint requires more exceptional circumstances.

UCL’s liquidators sought continuation of an injunction preventing Khalid Usman Raja from leaving England and Wales and authorising retention of his passport. The order had been in force since July 2020, following findings that he had misappropriated substantial sums, failed to disclose assets and committed contempt of court.

The joint trustees in his bankruptcy separately sought continuation of the restrictions. The bankruptcy administration remained ongoing, and the court had ordered a further examination of Mr Raja. Related recovery and recognition proceedings had also been commenced in Pakistan.

The central issues were whether the restrictions remained available after judgment, whether the bankruptcy jurisdiction supplied an additional basis, and whether continuation would materially support a court process without becoming coercive or disproportionate.

1. Jurisdiction and applicable test. Section 37(1) of the Supreme Court Act 1981 permits an injunction where just and convenient. A passport order is available to restrain departure and consequentially retain a passport. The court adopted the principles identified in Young v Young and explained in JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev: there must be a real risk, reasonably inferred from the evidence, that the respondent will leave and not return, and the absence must materially prejudice the relevant court process. The restraint must be proportionate.
2. Post-judgment limits. Passport orders may support enforcement procedures after judgment. However, they cannot be used to secure payment of a judgment debt or to hold a passport as a ransom for information which the respondent has been ordered to provide. UCL’s application was therefore impermissible because no continuing domestic court process remained to be supported; continuation would have been indefinite in substance and coercive.
3. Bankruptcy jurisdiction. Section 363 of the Insolvency Act 1986 places a bankruptcy under the court’s general control and permits directions to the bankrupt. That broad jurisdiction includes directing a bankrupt not to leave and to surrender a passport where there is a real risk of departure and the absence would materially prejudice a significant part of the insolvency process. The possibility of non-cooperation does not remove material prejudice, since orders and further contempt proceedings remain possible while the bankrupt is present.
4. Foreign proceedings. The court did not exclude a passport order in support of a process outside the jurisdiction, but declined to rely on the Pakistani proceedings on the evidence available. It was not shown that Mr Raja’s presence in Pakistan was necessary to frustrate those orders, and the length and nature of those proceedings militated against continuation on that basis.
5. Disposition. The passport order was continued only in support of the bankruptcy administration, until its completion or for one year, whichever was sooner, subject to an application for continuation and Mr Raja’s liberty to apply for earlier discharge.