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PETITIONER: JOLLY GEORGE VERGHESE & ANR.

       Vs.

RESPONDENT: THE BANK OF COCHIN

DATE OF JUDGMENT04/02/1980

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. PATHAK, R.S.

CITATION:  1980 AIR  470            1980 SCR  (2) 913  1980 SCC  (2) 360  CITATOR INFO :  RF         1984 SC1213  (7)  R          1986 SC 180  (39)  RF         1990 SC 605  (20)

ACT:      Code of  Civil Procedure-Section 51, Order 21, rule 37- Scope of-Debtor,  if could  be imprisoned for failure to pay his debts-Imprisonment when could be ordered.

HEADNOTE:      The appellants  were  the  judgment-debtors  while  the respondent-bank was  the decree-holder.  In execution of the decree a  warrant for  arrest and  detention in civil prison was issued  to the appellants under section 51 and order 21, rule 37  of the  Code of  Civil  Procedure.  On  an  earlier occasion there  had been  a similar  warrant for  arrest  in execution  of  the  same  decree.  The  decree-holders  also proceeded against the properties of the judgment-debtors and in consequence  all  their  immovable  properties  had  been attached for the purpose of sale in discharge of the decree- debts. A  receiver was  appointed by  the execution court to manage the  properties under  attachment. Even so, the court had issued  a warrant for the arrest of the judgment-debtors because on an earlier occasion a similar warrant had already been issued without any investigation as regards the current ability of  the judgment-debtors  to clear  off the debts or their mala-fide refusal, if any, to discharge the debts.      On  the   question  whether  under  such  circumstances personal freedom  of the  judgment-debtors can  be  held  to ransom until repayment of the debt.      Allowing the appeal, ^      HELD: 1. The words in section 51 which hurt are "or has had since the date of the decree the means to pay the amount of the  decree." Superficially  read this implies that if at any time  after the  passing of  an old decree the judgment- debtor had come by some resources and had not discharged the decree he  could be  detained in  prison even though at that later point  of time  he was  found to be penniless. This is not a  sound position, apart from being inhuman going by the standards of  Article 11  of the  International Covenant  on Civil and  Political Rights and Article 21. A simple default

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to discharge  is not  enough. There  must be some element of bad faith  beyond mere  indifference to pay, some deliberate or recusant disposition in the past or alternatively current means to  pay the  decree or  a substantial  part of it. The provision emphasises the need to establish not mere omission to pay  but an  attitude of  refusal on  demand  verging  on dishonest disowning  of the  obligation  under  the  decree. Considerations of  the debtor’s  other  pressing  needs  and straitened circumstances will play prominently. [922E-G]      2. Unless  there be  some other  vice or mens rea apart from failure to foot the decree, international law frowns on holding the  debtor’s person  in civil prison, as hostage by the court.  India is  now a  signatory to  this Covenant and Article 51(c)  of the  Constitution obligates  the State  to "foster respect for 914 international law  and treaty obligations in the dealings of organised peoples  with one  another". Even  so,  until  the Municipal Law  is changed  to accommodate  the Covenant what binds the courts is the former not the latter. [918A-B]      3. Quondom  affluence  and  current  indigence  without intervening dishonesty  or  bad  faith  in  liquidating  his liability can  be consistent with Article 11 of the Covenant because then no detention is permissible under section 51 of the Code of Civil Procedure. [921G]      4. The high value of human dignity and the worth of the human person  enshrined in Article 21, read with Articles 14 and 19,  obligates the State not to incarcerate except under law which  is fair,  just and  reasonable in  its procedural essence. To  cast a  person in prison because of his poverty and consequent  inability to  meet his contractual liability is appalling.  To be poor is no crime and to "recover" debts by the  procedure of  putting one  in prison  is  flagrantly violative of Article 21 unless there is proof of the minimal fairness of  his wilful  failure to  pay  in  spite  of  his sufficient means  and  absence  of  more  terribly  pressing claims on his means such as medical bills to treat cancer or other grave illness. Unreasonableness and unfairness in such a procedure  is inferable  from Article  11 of the Covenant. But this  is precisely the interpretation put on the proviso to section  51 C.P.C.  and the  lethal blow  of  Article  21 cannot strike down the provision as interpreted. [922A-D]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1991 of 1979.      Appeal by  special leave  from the  Judgment and  Order dated 9-7-1979  of the  Kerala High Court in C.R.P. No. 1741 of 1979.      M.  M.   Abdul  Khader  and  K.  M.  K.  Nair  for  the Appellants.      K. M. Iyer and V.J. Francis for the Respondent.      The Judgment of the Court was delivered by      KRISHNA IYER.  J.-This litigation  has secured  special leave from  us because  it  involves  a  profound  issue  of constitutional and  international law and offers a challenge to the  nascent champions  of human  rights in  India  whose politicised pre-occupation  has forsaken  the  civil  debtor whose personal liberty is imperilled by the judicial process itself, thanks  to s.  51 (Proviso)  and O. 21, r. 37, Civil Procedure Code.  Here is  an appeal by judgement-debtors-the appellants-whose personal  freedom is  in  peril  because  a court warrant  for arrest  and detention in the civil prison

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is chasing  them for non-payment of an amount due to a bank- the respondent,  which has ripened into a decree and has not yet been discharged. Is such deprivation of liberty illegal?      From the  perspective of international law the question posed is  whether it  is  right  to  enforce  a  contractual liability by imprisoning 915 a debtor  in the  teeth of  Art.  11  of  the  International Covenant on  Civil and Political Rights. The Article reads:           No one shall be imprisoned merely on the ground of      inability to fulfil a contractual obligation.      (Emphasis added)      An apercu  of Art.  21 of the Constitution suggests the question whether it is fair procedure to deprive a person of his personal  liberty merely  because he  has not discharged his contractual  liability in the face of the constitutional protection of  life and  liberty as  expanded by a  chain of ruling of  this Court  beginning with  Maneka Gandhi’s case. Article 21 reads:           21. Protection  of life  and personal  liberty.-No      person shall  be  deprived  of  his  life  or  personal      liberty except  according to  procedure established  by      law.      A third,  though humdrum, question is as to whether, in this case,  s. 51  has been complied with in its enlightened signification. This  turns on  the  humane  meaning  of  the provision.      Some  minimal   facts  may   bear  a   brief  narration sufficient to  bring the  two problems  we  have  indicated, although we  must candidly  state  that  the  Special  Leave Petition is  innocent of  these two issues and the arguments at the  bar have  avoided virgin  adventures. Even  so,  the points have  been raised  and counsel have helped with their submissions. We therefore, proceed to decide.      The facts. The judgment-debtors (appellants) suffered a decree against  them in  O.S. No. 57 of 1972 in a sum of Rs. 2.5 lakhs,  the  respondent-bank  being  the  decree-holder. There are two other money decrees against the appellants (in O.S. 92  of 1972  and 94  of 1974), the total sum payable by them being  over Rs.  7 lakhs..In execution of the decree in question  (O.S.  57  of  1972)  a  warrant  for  arrest  and detention in  the civil  prison was issued to the appellants under s.  51 and  o.21, r. 37 of the Civil Procedure Code on 22-6-1979. Earlier,  there had  been a  similar warrant  for arrest  in  execution  of  the  same  decree.  Besides  this process,  the   decree-holders  had  proceeded  against  the properties of  the judgment-debtors  and in consequence, all these immovable properties had been attached for the purpose of sale in discharge of the decree debts. It is averred that the execution  court has  also appointed  a Receiver for the management of the properties under attachment. In short, 916 the enjoyment  or even  the power to alienate the properties by the  judgment-debtors has  been forbidden  by  the  court direction keeping  them under  attachment and  appointing  a Receiver to  manage them. Nevertheless, the court has issued a warrant  for arrest  because, on  an earlier  occasion,  a similar warrant  had been already issued. The High Court, in a short order, has summarily dismissed the revision filed by the judgment-debtors  against the order of arrest. We see no investigation  having  been  made  by  the  executing  court regarding the  current ability  of the  judgment-debtors  to clear off  the debts  or their mala fide refusal, if any, to discharge the  debts. The  question is  whether  under  such circumstances the  personal freedom  of the judgment-debtors

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can be  held in  ransom until repayment of the  debt, and if s. 51  read with  O. 21,  r. 37,  C.P.C. does warrant such a step, whether the provision of law is constitutional. tested on the  touchstone of  fair procedure  under Art.  21 and in conformity with  the inherent dignity of the human person in the light  of Art. 11 of the International Covenant on Civil and Political  Rights. A modern  Shylock is shacked by law’s humane hand-cuffs.      At this  stage,  we  may  notice  the  two  provisions. Section 51 runs thus:      51. Subject  to such  conditions and limitations as may be prescribed,  the Court  may, on  the application  of  the decree-holder, order execution of the decree-           (a)  by  delivery  of  any  property  specifically                decreed;           (b)  by attachment  and sale  or by  sale  without                attachment of any property;           (c)  by arrest and detention in prison;           (d)  by appointing a receiver; or           (e)  in such  other manner  as the  nature of  the                relief granted may require.      Provided that,  where the  decree is for the payment of money, execution by detention in prison shall not be ordered unless, after  giving the  judgment-debtor an opportunity of showing cause  why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied-           (a)  that the  judgment-debtor, with the object or                effect  of   obstructing  or   delaying   the                execution of the decree-                (i)  is likely  to abscond or leave the local                     limits of the jurisdiction of the Court,                     or 917                (ii) has,  after the  institution of the suit                     in  which   the   decree   was   passed,                     dishonestly transferred,  concealed,  or                     removed any  part of  his  property,  or                     committed any  other act of bad faith in                     relation to his property, or                (b)  that the judgment-debtor has, or has had                     sine the  date of  the decree, the means                     to pay  the amount of the decree or some                     substantial part  thereof and refuses or                     neglects or  has refused or neglected to                     pay the same, or                (c)  that the  decree is  for a sum for which                     the  judgment-debtor   was  bound  in  a                     fiduciary capacity to account.      Explanation.-In the  calculation of  the means  of  the judgment-debtor for  the purposes of clause (b), there shall be left  out of  account any property which, by or under any law or  custom having the force of law for the time being in force, is exempt from attachment in execution of the decree.      (Emphasis added)      We may here read also order 21 Rule 37:           37. (1)  Notwithstanding anything  in these rules,      where an  application is  for the execution of a decree      for the payment of money by the arrest and detention in      the civil  prison of a judgment-debtor who is liable to      be arrested  in pursuance of the application, the Court      shall, instead  of issuing  a warrant  for his  arrest,      issue a  notice calling  upon him  to appear before the      Court on  a day  to be specified in the notice and show      cause why  he should  not be  committed  to  the  civil      prison:

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         Provided that  such notice  shall not be necessary      if the  Court is satisfied, by affidavit, or otherwise,      that,  with  the  object  or  effect  of  delaying  the      execution of  the decree, the judgment-debtor is likely      to  abscond   or  leave   the  local   limits  of   the      jurisdiction of the Court.           (2) Where  appearance is  not made in obedience to      the notice,  the Court  shall, if  the decree-holder so      requires,  issue  a  warrant  for  the  arrest  of  the      judgment-debtor.      Right at  the beginning,  we may take up the bearing of Art. 11  on the law that is to be applied by an Indian Court when there  is a  specific provision  in the Civil Procedure Code, authorising detention 918 for  non-payment   of  a  decree  debt.  The  Covenant  bans imprisonment merely  for  not  discharging  a  decree  debt. Unless there  be some  other vice  or mens  rea  apart  from failure to  foot the  decree, international  law  frowns  on holding the  debtor’s person  in civil prison, as hostage by the court.  India is  now a  signatory to  this Covenant and Art. 51  (c) of  the Constitution  obligates  the  State  to "foster respect for international law and treaty obligations in the dealings of organised peoples with one another". Even so, until  the municipal  law is  changed to accommodate the Covenant what binds the court is the former, not the latter. A.  H.   Robertson  in   "Human   Rights-in   National   and International Law"  rightly points  out  that  international conventional  law   must   go   through   the   process   of transformation   into   the   municipal   law   before   the international treaty can become an internal law.      From the  national point  of view  the  national  rules alone count..  With regard to interpretation, however, it is a principle  generally recognised  in national  legal system that, in  the event  of doubt,  the national  rule is  to be interpreted in  accordance with  the  State’s  international obligations.      The position  has been  spelt out correctly in a Kerala ruling on  the same  point. In  that case, a judgment-debtor was sought to be detained under O. 21, r. 37 C.P.C. although he was  seventy and  had spent away on his illness the means he once  had to  pay off  the decree. The observations there made are apposite and may bear exception:           The last  argument which consumed most of the time      of the  long  arguments  of  learned  counsel  for  the      appellant is  that the International Covenants on Civil      and Political  Rights are  part of  the law of the land      and have  to be  respected  by  the  Municipal  Courts.      Article 11,  which I  have  extracted  earlier,  grants      immunity  from  imprisonment  to  indigent  but  honest      judgment-debtors.           The march  of civilization  has been  a  story  of      progressive  subordination   of  property   rights   to      personal   freedom;    and   a   by-product   of   this      subordination finds noble expression in the declaration      that "No  one shall  be imprisoned merely on the ground      of inability  to fulfil a contractual obligation." This      revolutionary change in the regard for the human person      is spanned  by the  possible shock  that a resuscitated      Shylock would suffer if a modern Daniel were to come to      judgment 919      when the  former asks the pound of flesh from Antonio’s      bosom according  to the  tenor of  the bond,  by flatly      refusing  the   mayhem  on   the  debtor,  because  the

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    inability of  an impecunious  oblige shall  not imperil      his  liberty  or  person  under  the  new  dispensation      proclaimed  by   the  Universal  Declaration  of  Human      Rights. Viewed  in this  progressive perspective we may      examine whether there is any conflict between s. 51 CPC      and Article  11 of  the International  Covenants quoted      above.  As   already  indicated   by  me,  this  latter      provision  only  interdicts  imprisonment  if  that  is      sought solely  on the ground of inability to fulfil the      obligation. Section 51 also declares that if the debtor      has no means to pay he cannot be arrested and detained.      If he  has and  still refuses or neglects to honour his      obligation or  if he  commits acts  of  bad  faith,  he      incurs the liability to imprisonment under s. 51 of the      Code, but  this does not violate the mandate of Article      11. However,  if he  once had the means but now has not      or if  he has  money  now  on  which  there  are  other      pressing claims,  it is  violative  of  the  spirit  of      Article 11  to arrest  and confine him in jail so as to      coerce him into payment.......... The judgment  dealt with the effect of international law and the  enforceability   of  such   law  at   the  instance  of individuals within the State, and observed:           The remedy  for breaches  of International  Law in      general is  not to  be found  in the  law courts of the      State because  International  Law  per  se  or  proprio      vigore has  not the  force or  authority of  civil law,      till under  its inspirational impact actual legislation      is undertaken.  I agree  that the  Declaration of Human      Rights merely sets a common standard of achievement for      all peoples and all nations but cannot create a binding      set  of   rules.  Member   States  may   seek,  through      appropriate agencies,  to initiate  action  when  these      basic rights  are  violated;  but  individual  citizens      cannot complain  about their  breach in  the  municipal      courts even  if the  country concerned  has adopted the      covenants and  ratified the  operational protocol.  The      individual cannot come to Court but may complain to the      Human Rights  Committee, which,  in turn,  will set  in      motion other  procedures. In  short,  the  basic  human      rights enshrined  in the  International Covenants above      referred to,  may at  best inform judicial institutions      and inspire  legislative action  within  member-States;      but apart from such deep reverence, remedial action 920      at the  instance of  an aggrieved  individual is beyond      the area of judicial authority. While considering  the international impact of international covenants on municipal law, the decision concluded:           Indeed the  construction I  have adopted of s. 51,      CPC has  the flavour  of Article 11 of the Human Rights      Covenants. Counsel  for the appellant insisted that law      and justice  must be  on speaking  terms-by justice  he      meant, in  the present case that a debtor unable to pay      must  not   be  detained   in  civil   prison.  But  my      interpretation does  put law  and justice  on  speaking      terms.  Counsel  for  the  respondent  did  argue  that      International   Law   is   the   vanishing   point   of      jurisprudence is  itself vanishing  in  a  world  where      humanity is  moving steadily,  though slowly, towards a      world order, led by that intensely active, although yet      ineffectual body,  the United Nations Organisation. Its      resolutions and  covenants  mirror  the  conscience  of      mankind  and  insominate,  within  the  member  States,      progressive legislation;  but till  this last  step  of

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    actual enactment  of law  takes place, the citizen in a      world of  sovereign States, has only inchoate rights in      the   domestic   Courts   under   these   international      covenants. While dealing  with the  impact of the Dicean rule of law on positive law,  Hood Phillips  wrote-and this is all that the Covenant means now for Indian courts administering municipal law           The significance  of this kind of doctrine for the      English lawyer  is that  it finds  expression in  three      ways. First, it influences legislators. The substantive      law at  any given  time may approximate to the "rule of      law",  but   this  only  at  the  will  of  Parliament.      Secondly,   its    principles   provide    canons    of      interpretation  which   express   the   individualistic      attitude of  English courts  and of  those courts which      have followed  the  English  tradition.  They  give  an      indication  of   how  the   law  will  be  applied  and      legislation interpreted.  English courts lean in favour      of the  liberty  of  the  citizen,  especially  of  his      person: they  interpret strictly statutes which purport      to diminish  that liberty,  and presume that Parliament      does not  intend to  restrict  private  rights  in  the      absence of clear words to the contrary. 921      The positive  commitment of  the States Parties ignites legislative action  at home  but does not automatically make the Covenant  an enforceable  part of  the corpus  juris  of India.      Indeed, the Central Law Commission, in its Fifty Fourth Report, did  cognise the  Covenant, while dealing with s. 51 C.P.C.:           The question  to be  considered is,  whether  this      mode of  execution should  be retained  on the  statute      book, particularly  in view  of the  provision  in  the      International Covenant  on Civil  and Political  Rights      prohibiting imprisonment  for a mere non-performance of      contract. The Law  Commission, in its unanimous report, quoted the key passages from  the  Kerala  ruling  referred  to  above  and endorsed its  ratio. ’We  agree with this view’ said the Law Commission and  adopting that meaning as the correct one did not recommend  further change  on this facet of the Section. It is important to notice that, interpretationally speaking, the Law  Commission accepted  the dynamics  of  the  changed circumstances of the debtor :           However, if he once had the means but now has not,      or if  he has  money  now  on  which  there  are  other      pressing claims,  it is  violative  of  the  spirit  of      Article 11  to arrest  and confine him in jail so as to      coerce him into payment. This is reiterated by the Commission:           Imprisonment is  not to be ordered merely because,      like Shylock, the creditor says:           "I crave  the law,  the penalty  and forfeit of my      bond."           The law  does recognise  the principle that "Mercy      is reasonable  in the  time of affliction, as clouds of      rain in the time of drought."      We concur  with the  Law Commission in its construction of s.  51 C.P.C.  It  follows  that  quondom  affluence  and current indigence  without  intervening  dishonesty  or  bad faith in  liquidating his  liability can  be consistent with Art. 11  of the  Covenant,  because  then  no  detention  is permissible under s. 51, C.P.C.

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    Equally meaningful  is the  import of  Art. 21  of  the Constitution in  the context of imprisonment for non-payment of debts. The high 922 value of  human dignity  and the  worth of  the human person enshrined in  Art. 21,  read with Arts. 14 and 19, obligates the State not to incarcerate except under law which is fair, just  and  reasonable  in  its  procedural  essence.  Maneka Gandhi’s case  as developed  further in Sunil Batra v. Delhi Administration, Sita  Ram &  Ors. v. State of U.P. and Sunil Batra v.  Delhi Administration lays down the proposition. It is too  obvious to need elaboration that to cast a person in prison because  of his  poverty and  consequent inability to meet his  contractual liability is appalling. To be poor, in this land  of daridra Narayana, is no crime and to ’recover’ debts by  the procedure  of putting  one in  prison  is  too flagrantly violative of Art. 21 unless there is proof of the minimal fairness  of his  wilful failure  to pay in spite of his sufficient  means and  absence of more terribly pressing claims on his means such as medical bills to treat cancer or other grave illness. Unreasonableness and unfairness in such a procedure  is inferable  from Art. 11 of the Covenant. But this is  precisely the  interpretation we  have put  on  the Proviso to  s. 51  C.P.C. and  the lethal  blow of  Art.  21 cannot strike down the provision, as now interpreted.      The words  which hurt are "or has had since the date of the decree, the means to pay the amount of the decree". This implies, superficially  read, that  if at any time after the passing of  an old  decree the  judgment-debtor had  come by some resources  and had  not discharged the decree, he could be detained  in prison  even though  at that  later point of time he  was found  to be  penniless. This  is not  a  sound position apart  from being inhuman going by the standards of Art. 11 (of the Covenant) and Art. 21 (of the Constitution). The simple default to discharge is not enough. There must be some element  of bad  faith beyond mere indifference to pay, some deliberate  or recusant  disposition in  the  past  or, alternatively,  current   means  to  pay  the  decree  or  a substantial part of it. The provision emphasises the need to establish not  mere omission  to  pay  but  an  attitude  of refusal on  demand verging  on dishonest  disowning  of  the obligation under  the decree.  Here  considerations  of  the debtor’s other  pressing needs  and straitened circumstances will play  prominently. We would have, by this construction, sauced law  with justice, harmonised s. 51 with the Covenant and the Constitution.      The question  may squarely arise some day as to whether the Proviso  to s. 51 read with O. 21, r. 37 is in excess of the Constitutional 923 mandate in  Art. 21  and bad  in part.  In the  present case since we  are remitting  the matter for reconsideration, the stage has  not yet  arisen for us to go into the vires, that is why we are desisting from that essay.      In the present case the debtors are in distress because of the blanket distraint of their properties. Whatever might have been their means once, that finding has become obsolete in view  of later happenings; Sri Krishnamurthi Iyer for the respondent fairly  agreed that  the law  being what  we have stated, it is necessary to direct the executing court to re- adjudicate on the present means of the debtors vis a vis the present pressures  of their  indebtedness, or  alternatively whether they have had the ability to pay but have improperly evaded  or  postponed  doing  so  or  otherwise  dishonestly committed acts  of bad  faith respecting  their assets.  The

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court will take note of other honest and urgent pressures on their assets,  since that  is the  exercise expected  of the court under  the proviso  to s.  51. An earlier adjudication will bind  if relevant  circumstances  have  not  materially changed.      We set  aside the  judgment under appeal and direct the executing court to decide de novo the means of the judgment- debtors  to  discharge  the  decree  in  the  light  of  the interpretation we have given. P.B.R.    Appeal allowed. 924