A modern Shylock is shacked by law’s humane hand-cuffs.- Justice Krishna Iyer
An appeal was filed by Judgement debtor against the order of detention passed under Order 21, Rule 37 of the CPC. The judgment in the case delivered by Justice Krishna Iyer. In the case, the court considered the question whether the warrant of arrest for non-payment of amount due to bank, deprive the liberty of a person.
The bone of contentions were two provisions of CPC- Section 51 (Enforcement of Decree) and Rule 37 of Order 21 (Arrest and Detention in execution of Decree)
Section 51 and Rule 37 of Order 21
It is expedient to first mention both provisions here, for ready reference—
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
(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.
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:
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.
Justice Krishna Iyer analysed the question as follows-
International and Indian Law
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 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.”
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.”
Kerala Ruling on this Point
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 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 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 enforceability of Convent in India (Art. 11 of ICPR)
Even so, until the municipal law is changed to accommodate the Covenant what binds the court is the former, not the latter. 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 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.
54th Commission of Law Report
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.”
Conclusion
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.
Equally meaningful is the import of Art. 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 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 someday as to whether the Proviso to s. 51 read with O. 21, r. 37 is in excess of the Constitutional 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.
Reference
Jolly George Varghese & Anr vs The Bank Of Cochin [1980]