Jolly George Verghese & Anr vs The Bank Of Cochin

Bench: Justice V.R. Krishnaiyer and Justice R.S. Pathak

Appellant: Jolly George Verghese & Anr.

Respondent: The Bank of Cochin

Citation: 1980 AIR 470, 1980 SCR (2) 913

Subject: Can a person be imprisoned on the ground that he did not discharge his contractual liability?

Issue:

  • The first issue that was raised was from the purview of international law and the question raised was whether it is justified to enforce a contractual liability by imprisoning a debtor in the light of Art. 11 of the International Covenant on Civil and Political Rights?
  • Another issue raised was whether is it fair to deprive a person of his personal liberty on the ground that he did not discharge his contractual liability or not? Also, keeping in mind that Article 21 of the constitution gives protection of the right to life and liberty as quoted by court in Maneka Gandhi’s case.

Facts:

  • A judgment against the appellant for a money decree of Rs. 2.5 lakhs were issued and the respondent was the decree-holder. There were two other money decrees against the appellants and the total sum payable was over Rs. 7 lakhs.
  • While executing the decree a warrant for arrest and detention in the civil prison was issued against the appellants vide Section 51 and Order 21 Rule 37 of the Civil Procedure Code. A similar warrant for arrest in execution of the same decree was earlier issued against the appellants.
  • Except for the arrest warrant the decree-holders proceeded against the properties of the appellants and as a result, all the immovable properties of the appellant were attached for sale in the discharge of the decree debts.
  • A receiver was appointed by the execution court for the management of the attached property. The right of the appellant to alienate the properties was taken away by the court.
  • However, the court issued an arrest warrant as on an earlier occasion, a similar warrant was issued.
  • The High Court dismissed the revision filed by the appellant against the order of arrest.
  • The appellant filed a special appeal against the decision of the High Court.

Analysis:

The appellant argued that the International Covenant on Civil and Political Rights became a part of the law of land as the State was a signatory and the state must respect the International Covenant in lower courts. The appellant insisted that a debtor who is unable to pay should not be detained in prison as it violates the right to life and personal liberty of the appellants. The appellant stated that as the court in the Maneka Gandhi v. Union of India observed that the fundamental rights should be interpreted in such a manner to expand its reach and ambit rather than to concentrate its meaning and content by judicial construction.

The appellant argued that Article 21 provides that no person shall be deprived of his life or personal liberty except under procedure established by law. The statement does not mean that any temporary or arbitrary procedure will justify it, a procedure i.e. based on the principle of natural justice and it should be fair and reasonable shall only justify the statement.

It was contended by the defendant that International law does not apply upon Municipal courts. It shall apply to them when it is converted into legislation.

Judgment:

The Court held that the International Law that the remedy for breach of International Law can’t be found in Municipal Courts. The reason behind this is that for enforceability of international law it must first take the form of Municipal Law. It was held that international law must first take the form of municipal law it shall not constitute a part of the corpus juris of the State.

The Court held that the arrest and detention violated the appellant’s right to life and liberty. The court referred many judgments like Sunil Batra v. Delhi Administration and Sita Ram and Ors. v. The state of the U.P.

It was held that the language of Section 51 was stating that if at a later stage the respondent fails to discharge the decree he shall be arrested. This is not in line with Article 11 (of the Covenant) and Article 21 (of the Constitution). The mere default to discharge is not enough to arrest a person, there should be malice present in the appellants’ act.

The Court directed the executing court to re-adjudicate on how the appellant wants to pay in the pressure of debt and if they could pay but were postponing the payment or committed an act of bad faith. The pressure shall be put on the property of the appellant as per the Section 51s provision.

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