The Use of Arrest in Civil Execution Proceedings — A Last Resort in Exceptional Cases

Introduction

Execution proceedings form the most significant part of the civil adjudicatory process. The winning party at the end of the trial has to execute the final decree obtained from the Court in order to get the relief awarded from the other party. This is also the stage where the losing party may put in a lot of effort to evade the enforcement of the decree, thereby putting the winning party in a limbo. It is to prevent these kinds of situations that the Code of Civil Procedure, 1908¹ (CPC) seeks to provide several means by which the party can enforce a decree in a court of law. Section 51 CPC² provides several means for execution of a decree including but not limited to delivery of the property mentioned in the decree by attachment or sale of property, arrest and detention of the person who is at the losing end of the trial, and appointment of a receiver.

The most interesting mechanism in a civil proceeding is the measure of arrest and detention. Though the same is grounded in criminal law, the civil procedural law of India imports this mechanism to enforce a decree by putting a restriction on the personal liberty of the person concerned. The same is at the option of the decree-holder³ and serves to force the judgment-debtor to perform execution of the decree. However, it is to be noted that since civil law is being dealt with here, the courts have been careful in applying this measure and they only apply it when it appears that the judgment-debtor is trying to make a mockery of the system of justice. The legislators and the courts have tried not to import a strict rule of arrest and detention from criminal law and have given way to values of natural justice, and to give a liberal construction of these provisions.

This paper, therefore, serves to look at the jurisprudence surrounding the provisions of arrest and detention in civil execution proceedings. It shall therefore, firstly, look at the objective of these provisions and their constitutionality. Secondly, it argues that the courts have liberally interpreted these provisions and they have read into the law to cut down the rigour of this provision in light of its use in civil law. Thirdly, it argues that the provisions on arrest and detention should be used as a means of last resort after all civil avenues have been used and exhausted.

Arrest and detention: Import of penal provisions in civil law

The use of arrest and detention in civil proceedings has raised eyebrows for those who sought to challenge the constitutionality of these provisions. However, before going into its constitutionality and how the provision has been retained for so many years through judicial interpretation, it is important to know the procedural aspects of the law.

No escape or running from liability

Section 51 read with Section 55 CPC⁴ provides for arrest and detention as one of the ways for execution of a decree. These provisions are further explained and nuanced by Order 21 Rules 37⁵ and 40⁶ that provide for the modalities when arrest and detention of a person is to be ordered for execution of a money decree. The rules at a glance show that the object is to coerce compliance of a liability.

In one of the leading cases on this area of law, the Supreme Court held in Subrata Roy Sahara v. Union of India⁷ that the law exists to allow the plaintiff to get the relief given to him by the Court upon execution of the decree. It ensures that the defendant does not escape the liability attached to him. To further the objective, just because the person is put into arrest and detained in jail does not mean that the liability is waived off and the person is no more required to pay any decree amount.⁸ Instead, the detention is to restrict personal liberty of the debtor so that he complies with satisfaction of his liability.⁹ This is similar to Sections 125 to 128 of the Code of Criminal Procedure, 1973 (CrPC)¹⁰ that deal with maintenance proceedings. The liability of the person therein stands discharged only when he makes the payment of the money due and prison time would not discharge liability.¹¹

Conflation of civil and criminal law

The provisions on arrest and detention in CPC also seem to draw its content from the CrPC. As these put restrictions on the personal liberty of the person, there has to be a high threshold of burden to be satisfied for the court to order for arrest or detention. In CrPC, the police officer arresting the person has to be satisfied of the necessity for arrest and he has to record the reasons for writing.¹² Even under the CPC, the court has to be satisfied that arrest of the judgment-debtor is necessary if he is trying to evade the liability upon him. The proviso attached to Rule 37 of Order 21 provides that the court can issue an arrest warrant without first issuing notice if the judgment-debtor is likely to abscond court’s jurisdiction.

However, since this is a civil proceeding, the ordinary procedure is that on an application filed by the decree-holder for the arrest of the person under Section 51, the court has to first issue a notice to the person concerned. This satisfies the requirements of natural justice. The person concerned should be given a chance and sufficient opportunity as to why he should not be arrested or detained in prison. It is only when the person does not respond to this that the Court can go ahead with issuing an arrest warrant. Thus, the legislators, though in their wisdom, have imported the mechanism of arrest in civil cases, its rigour has been toned down by using tenets of natural justice. The proviso, therefore, seeks to balance the interests of the decree-holders and the protection of those judgment-debtors who are honest and truthful debtors.¹³

Satisfying the test of constitutionality

If we were to look at the constitutionality of this section, it has been challenged in the courts on the grounds that it violates Article 21¹⁴ of the Constitution and also Article 11 of the International Covenant on Civil and Political Rights (ICCPR)¹⁵. The said latter article seeks to prevent the arrest of any person on the grounds of non-fulfilment of a contractual obligation. The matter came up before the Supreme Court in Jolly George Varghese v. Bank of Cochin¹⁶. The Court therein went into a wide discussion on Section 51 and Article 11 of the ICCPR to harmoniously construct them. The Court stressed the fact that the wordings of the section do not punish a person for the sole reason of not fulfilling an obligation.¹⁷ The Court has to mandatorily undertake an enquiry as to whether the person has the means to make the payment of the sum or not. If he does not, he cannot be arrested or detained. There has to be active attitude of refusal to pay, bad faith or malice involved on the part of the judgment-debtor due to which he evades his liability which is different from “a simple default to discharge” and “mere indifference to pay”.¹⁸ As per Krishna Iyer, J.

9. … [I]t follows that quondam 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 CPC.¹⁹

A similar position has also been taken by the Kerala High Court in Xavier v. Canara Bank Ltd.²⁰ The Court therein was faced with the same issue and held that, after a harmonious construction of the two provisions, if the debtor has the means but he refuses to pay, it is not violative of Article 11 of the ICCPR. But if liability is imposed because he had means to pay earlier or payment of money is enforced even when there are other pressing concerns, then the same would be violative of the intent of Article 11 of the ICCPR.²¹

The above analysis clearly shows how the courts have read the element of active refusal and bad faith into the section and have added to the liberal nature of the provision. The courts have embarked on the duty not just to protect the interests of the decree-holder but also protect the judgment-debtors particularly those who are poor, indigent or helpless.

Critical analysis of the provisions

Difference between order for arrest and order for detention

One of the other issues that have arisen with respect to these provisions is with respect to a difference that exists between an order for arrest and an order for detention. The dispute that arises is mainly to be traced to the wordings of Section 51 and Order 21 Rule 37. The proviso to Section 51 states that:

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.

It is pertinent here to refer to P.G. Ranganatha Padayachi v. Mayavaram Financial Corpn. Ltd.²² In this case, the issue was whether it is required for a court to provide reasons in writing in order for the arrest of the judgment-debtor. The Court notes that there is a difference between arrest and detention under the CPC.²³ While the proviso to Section 51 calls for reasons in writing when a person is being put to detention, there is no such requirement anywhere in the entire code that demands the same for arresting a person. The Court also notes that Order 21 Rule 37 facilitates arrest of persons even without issuance of notice. However, this textualist and positivist interpretation of the Code can lead to grave consequences for the judgment-debtors who are innocent and honest.

The Code is based on civil law. Its rigour and implementation have to be towards rendering justice, but not in the same severe manner as in criminal law. It will be ironic if a police officer has to record reasons in writing for arresting a person under the criminal law of the country, but it would be sufficient for the court to order for arrest even without recording of reasons. If we follow the procedure prescribed, the court has to first issue notice and if the person does not appear in obedience to the notice, then the court can order the arrest of the person under Rule 37(2). However, even here, the court has to state its reasons as to why an arrest is being ordered. There has to be evidence before the court that the debtor is absconding to avoid payment, he has the means to pay and there is an element of bad faith involved. The test laid down in Jolly George Varghese ²⁴ should also be applied in the context of an order for arrest and reasons have to be stated along those lines or an order for arrest is to be founded on any one of the reasons given in the proviso to Section 51.

The same matter subsequently came up before the Madras High Court in A. Mani v. A. Chandranath²⁵. This was a Single Judge Bench decision whereas the decision of P.G. Ranganatha ²⁶ was a Division Bench decision, thereby making the former bound by the latter. However, the Single Judge went ahead to hold the latter decision to be no longer good in law.²⁷ By referring to the Supreme Court’s decision in Jolly George Varghese case²⁸ and the Kerala High Court’s decision in Xavier case²⁹, the Court struck down any difference between an order for arrest and order for detention. This arose in light of the discussion around Article 11 of ICCPR and that arrest and detention cannot be made without there being sufficient evidence of fraudulent intention and malice coupled with a contemporaneous capacity or means to pay on part of the judgment-debtor.

This approach is the one that is in conformity with the procedural and substantive justice sought to be rendered by CPC. A naturalist interpretation of the rules will secure the interests of both creditor and debtor.

The courts put on their liberal lens

A more liberal approach taken by the courts in the jurisprudence surrounding Section 51 can be seen in Ramasamy v. Pushpa³⁰. In this case, there was sufficient evidence shown by the decree-holder that the judgment-debtor had sufficient means to pay. However, he was still not making the payment of money. The Court did not just go into the discussion or enquiry about the means to pay by the judgment-debtor but also ascertained whether he had any other impending liabilities to be paid. Through collection of evidence on the same, the Court found that just because the person has means in the form of properties or pension or salary from another source does not mean that he is in a position to pay the decree amount currently. His overall current financial position has to be considered and based on that, the ability of the debtor to pay should be noted.³¹

The above account has shown how the Court has tried to limit the circumstances in which arrest and detention can be ordered for the judgment-debtor. The Court has embarked on a step to carve out exceptional circumstances when the arrest and detention is to be ordered. The courts have tried to keep this measure as a measure of last resort when no other method is available to execute the decree. In Shyam Singh v. Collector³², the Supreme Court noted that there is an option for the decree-holder to simultaneously resort to execution of the decree by attachment or sale of the properties of the decree-holder and also by his arrest and detention. However, the Court equally recognised the existence of discretion in the Court to order simultaneous execution.³³ It has to exercise judicial application of mind. In this case, where the Court noted that the judgment-debtors are government servants who receive salaries from the Government, the decree-holders can obtain the sums due from their salaries instead of resorting to their arrest and detention. Therefore, the Court did not order for their arrest and detention and kept it as the last resort for it to use.

Striking a balance between the rights of creditor and debtor

The law, however, does not establish that the decree-holder has no right to simultaneously proceed against sale and attachment of property and arrest and detention. In a number of cases, the Court has held that it cannot force the decree-holder to not go for arrest and only go for property attachment and sale.

There is another case³⁴ that recognised simultaneous options to be exercised by the decree-holder and the exercise of discretion by the Court in this respect. However, the High Court of Andhra Pradesh did not accept this argument and distinguished itself from the precedent cited. It held that the executing court is under no duty to dictate the terms and modes of execution, but it only has the responsibility of overseeing and ensuring the execution itself.³⁵

However, the researcher is of the opinion that such discretion should not be vested in the decree- holder without limitations. It is not to be forgotten that the CPC is a civil procedural law and penal provisions should not be exercised without first resorting to and satisfying all civil provisions in the Code. If a person has recourse to an alternate method of satisfying his liability like attaching his salary, or property, or any other source of income, he should be first allowed to use that option before the decree-holder is allowed to exercise his right to execute the decree using arrest. After all, the main purpose of this provision is to allow the decree-holder to obtain his pending money at the earliest. If he is able to get that through other avenues without arrest of the opposite party, the Court should facilitate that. If otherwise, the judgment-debtor has been trying to evade his liability or has been in contempt of repeated court orders or is liable for mockery of the court’s justice, then he can be subject to arrest and detention because then that would be founded upon the reasons provided under the proviso to Section 51. Thus, the use of arrest and detention should be used as the last resort when the judgment-debtor has been in active neglect of the court’s decision.

The above reasoning can also be supplemented using the position of this measure in the United Kingdom. The committal of a person to detention for non-payment of a debt has been abolished by the Administration of Justice Act, 1970³⁶ under some exceptions by reforming the Debtors Act, 1869³⁷. The said exceptions provide for a prison sentence only in exceptional circumstances such as crown debts, maintenance orders by High Court or Family Court.³⁸ Even in these cases, the courts first try to attach the earnings of the person to get him off his debts and then, otherwise, proceed to remand the person in custody of an officer.³⁹ Even in the United States, though the civil law provides for the arrest and detention of debtors, the same is resorted to when the proceedings against the property of the debtor has proven ineffective.

Thus, it is understandable that some kind of restrictions on personal liberty may be necessary for the person to exercise coercion on him who although having means to pay is not paying or has fraudulently hidden his assets.⁴⁰ This is also reasonable and in the interest of the public. But since this relates to civil law, the measure should be used and adopted after resorting to other methods under the civil law.

Conclusion

This paper has highlighted the several nuances that are involved with Section 51 CPC. It has shown how the courts have struck a balance between the rights of decree-holder and judgment- debtor by liberally construing the provisions and bringing the same in line with the Constitution and ICCPR. Furthermore, there have been certain conflicting ratios of the courts around the country and at a suitable time, when the issue comes up before the Supreme Court, it would be good opportunity for them to clearly outline the broad contours of the law and assuring that both substantive and procedural justice are not only done but also seen to be done.