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Sreenivasulu, Advocate

Docid # IndLawLib/279644
(1980) AIR(SC) 470 : (1980) 1 APLJ 27 : (1982) 52 CompCas 70 : (1980) ILR(HP) 185 : (1980) 1
KantLJ 193 : (1980) KLT 375 : (1980) 3 MahLR 153 : (1980) 2 SCC 360 : (1980) 2 SCJ 358 : (1980)
2 SCR 913 : (1980) UJ(SC) 379
SUPREME COURT OF INDIA
DIVISION BENCH

JOLLY GEORGE VARGHESE AND ANOTHER — Appellant

Vs.

THE BANK OF COCHIN — Respondent

Civil Procedure Code, 1908 (CPC) - Order 21 Rule 37, Section 51

Civil Procedure Code, 1908 (CPC) - Section 51 Proviso and Order 21, Rule 37 - Arrest and
detention of Judgment-debtor in Civil Prison in execution of decree - Guide lines laid down -
Impact of Article 21 - Present means of the debtor and current demands on his income have to
be taken note of.
Civil Procedure Code, 1908 (CPC) - Section 51 - Execution of decree - Detention in civil
prison - In the absence of some vice or mens rea, on the part of judgement debtor, detention
on mere failure to pay the debt is not called for - Any other interpretation would render the
provision unconstitutional.
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 (land of poverty) is no crime and to recover debts by the procedure of
putting one in prison is too flagrantly violative of Article 21 unless there is proof of the
minimal fairness of his wilful failure to pay inspite 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 we have put on the Proviso to
Section 51, C.P.C. and the lethal blow of Article 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 latter 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 Covenant) and Article 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.
Counsel for Appearing Parties
M. M. Abdul Khadar and K.M.K. Nair, for the Appellant; K.M. Iyer and V.J. Francis, for the Respondent

Cases Referred

Sunil Batra Vs. Delhi Administration and Others etc., AIR 1980 SC 1579 : (1980) CriLJ 1099 :
(1978) CriLJ 1741 : (1980) 3 SCC 488 : (1978) 4 SCC 494 : (1980) SCC(Cri) 580 : (1979) SCC(Cri)
155 : (1980) 2 SCR 557 : (1979) 1 SCR 392
Mrs. Maneka Gandhi Vs. Union of India (UOI) and Another, AIR 1978 SC 597 : (1978) 1 SCC
248 : (1978) 2 SCR 621

JUDGMENT

V.R. 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 Section 51 (Proviso) and Order
21, Rule 37, Civil Procedure Code. Here is an appeal by judgment-debtors- the appellants-whose
personal freedom is in peril because a court warrant for arrest and detention in the civil prison 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?

2. From the perspective of international law the question posed is whether it is right to enforce a
contractual liability by imprisoning a debtor in the teeth of Article 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)

3. An apercu of Article 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 expounded and expanded
by a chain of rulings of this Court beginning with Maneka Gandhi's case. Mrs. Maneka Gandhi Vs.
Union of India (UOI) and Another, 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.

4. A third, though humdrum, question is as to whether, in this case, Section 51 has been complied
with in its enlightened signification. This turns on the humane meaning of the provision.

5. Some minimal facts may bear a brief narration sufficient to bring the two problems we have
indicated, although we must candidly state that the SLP 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.

6. 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 u/s 51 and Order 21, Rule. 37 of
the CPC 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, 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 can be held in ransom until
repayment of the debt, and if Section 51 read with Order 21, Rule 37, C.P.C. does warrant such a
step, whether the provision of law is constitutional, tested on the touchstone of fair procedure
under Article 21 and in conformity with the inherent dignity of the human person in the light of
Article 11 of the International Covenant on Civil and Political Rights. A modern Shylock is shackled
by law's humane hand-cuffs.

7. 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

8. 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

(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 since 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)

9. 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 is 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 op. a day
to be specified in the notice and show cause why he should not be committed to the civil prison:

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.

10. Right at the beginning, we may take up the bearing of Article 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 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 ret apart from failure to foot the
decree, international law frowns on hold0ing 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 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. P. 13

11. 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.

12. The position has been spelt out correctly in a Kerala ruling Xavier v. Cenara Bank Ltd. 1969
K.L.T.927 on the same point. In that case, a judgment-debtor was sought to be detained under
Order 21, Rule 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 excerption:

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 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 inability of an impecunious
obligee 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 Section 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 u/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 enforce-ability 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 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 Section 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 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.

13. 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.

14. Indeed, the Central Law Commission, in its Fifty Fourth Report, did cognise the Covenant, while
dealing with Section 51 C.P.C.: P. 38
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."

15. We concur with the Law Commission in its construction of Section 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 Article 11 of the Covenant, because then no
detention is permissible u/s 51, C.P.C.

16. Equally meaningful is the import of Article 21 of the Constitution in the context of
imprisonment for non-payment of debts. The high value of human dignity and the worth of the
human person enshrined in Article 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 [1978] 1 S.C.R 248 as developed further in Sunil Batra Vs. Delhi Administration and
Others etc., , AIR 1979 745 (SC) and Sunil Batra Vs. Delhi Administration and Others etc., 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 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 we have put on the Proviso to Section 51 C.P.C. and the lethal blow of Article 21
cannot strike down the provision, as now interpreted.

17. 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 Article 11(of the Covenant) and
Article 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 Section 51 with the Covenant and the
Constitution.

18. The question may squarely arise some day as to whether the Proviso to Section 51 read with
Order 21, Rule 37 is in excess of the Constitutional mandate in Article 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.

19. 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 lyer for the respondent fairly agreed that the law being what
we have stated, it is necessary to direct the executing court to read judicate 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 court will take note of other honest and
urgent pressures on their assets, since that is the exercise expected of the court tinder the proviso
to Section 51. An earlier adjudication will bind if relevant circumstances have not materially
changed.

20. 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.