Jolly Varghese and Anr. vs. Bank of Cochin 

Citation: 

Jolly George Varghese & Anr. v. The Bank of Cochin 

1980 AIR 470, 1980 SCR(2) 913 

Bench: 

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

Brief of Facts of Jolly Varghese Case: 

This is an appeal by the appellants-whose personal freedom is in peril. This is 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. And bank is the respondent, which has ripened into a decree and has not  yet been discharged. The appellants suffered a decree against them in O.S. No. 57 of  1972 in a sum of Rs. 2.5 lakhs, the respondent 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 is over Rs. 7 lakhs. 

On August 6th, 1979, a warrant of arrest and detention in the civil prison was issued to  the appellants under S. 51 and o.21, r. 37 of Civil Procedure Code. This was in the execution of  the decree in question. Moreover, previously a similar warrant for arrest was produced  in the execution of the same decree. 

Immovable properties of the judgment-debtor had been attached for sale in the  discharge of the decree debts by the decree-holders. 

When the case was brought up in the High Court, the appeal filed by the appellants regarding the order of arrest was dismissed without careful examination of the  conditions and requirements for such arrest to take place. As per the legislation, a proper  investigation must have taken place by the executing court to assess the financial  standing of the appellant to clear off the debts or surface their mala fide intention behind  the refusal, if any. 

Issues: 

1. Whether it is a fair procedure to deprive a person of his liberty because he has not  discharged his contractual liability? 

2. Should under the given circumstances the personal freedom of the appellant 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?

3. Whether the provision of law stands the constitutional validity on the touchstone of fair  procedure under Art. 21? 

Judgment of Jolly Varghese Case:

The court’s judgment can be read in the following parts pertaining separately to each  issue raised: 

On the issue of International Law, no breach of International law was found. For it to be  enforceable it must be established as the municipal law. The court observed that the  International does not apply proprio vigore, which determined the independent authority  of its own. Therefore, is found to have no remedy for the breach of the same in the state law.

Unless it is not reduced to the law of the nation, it cannot be said to constitute the  ‘corpus juris’ of the State. As an alternative solution, it was further stated that the member states with the help of appropriate agencies can complain in case of a breach. Whereas, an  individual at most can only reach out to the human rights commission to inspire the  legislation regarding the matter even if the concerned country has ratified the operational  protocol.

In dealing with the violation of Art. 21 the Court deemed the arrest and detention as wrongful by citing various cases like Sunil Batra v. Delhi Administration(1978), Sita Ram  and Ors. v. State of U.P. (1979). 

With regards to the compliance of S. 51of the Civil Procedure Code, Court recognised something. The court  recognized the presence of mens rea or some element of bad faith essential behind the  failure to discharge the contractual liability. And mere failure to discharge contractual liability was not enough to detain a person. 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 this can confine him in jail to coerce him into payment,  which was recognized by the court. 

Analysis of Jolly Varghese Case:  

The present case exemplifies the usage and circumstances under which international  treaties can be practised as the rule of law. For an international treaty to be incorporated  as a rule of law it first has to be established as municipal law. Only then it can have the  binding force on the rule of the sovereign state. 

Although Article 51 requires compliance with international law, it is not an executive  article. Article 253 confers Parliament’s exclusive power in matters of international  affairs. But the Constitution does not contain explicit provisions regulating the relations  and status of international law in Indian courts. The law as per the covenant is  recognised as a principle that should be adhered to while giving an interpretation of national law, in an event of confusion. A progressive and measured perspective has  been paved for the implementation of the international law.

The article reads: No one  shall be imprisoned merely on the ground of inability to fulfil a contractual obligation. Art. 21 of the Constitution poses the question 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 v. Union of India. Thus, Article 11, grants immunity from imprisonment to  indigent but honest appellants. Unless there is 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, hostage by the court. 

Section 51 of the code

Section 51 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, which  is in the essence of Article 11 and does not violate the mandate. But a part of the section  is found to be violative of the article where it holds the person liable if he happens to  incur the amount after the filing of the decree. 

Iyer 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  debtor’s vis a vis the present pressures of their indebtedness, or 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.

Conclusion:  

The case of Jolly Varghese provides clarity about the relations between international  treaties and state laws, both of which are distinct legal systems. India follows the state  of dualist theory of international law which lays down that for any international  treaty, the executive cannot be guided to follow them in absence of national law.  

“Human Rights-in National and International Law” specifically lays down that the  international conventions first have to be transformed into municipal law for the active  exercise under the rule of law of the state to take place. 

However, the treaties are paradoxically considered to be self-enforceable, i.e.,  they apply automatically in the municipal sphere, except in cases where an amendment  to the Constitution or existing law is required, or when the enactment of a new law is  required. 

Therefore, courts can rely on treaty principles that do not conflict with the provisions  of the laws of India. Several such laws have been enacted by the Indian Parliament once  India has become a signatory to related treaties and conventions. Example: The  Diplomatic Relation (Vienna Conventions) Act 1972, Protection of Human Rights Act  1993, SAARC Convention (Suppression of Terrorism) Act 1993. Similar Acts are issued  about territorial waters, exclusive economic zone etc. 

References: 

▪ 1980 AIR 470 1980 SCR (2) 913 1980 SCC (2) 360 

▪ Code of Civil Procedure, 1908 

▪ file:///C:/Users/91931/Downloads/Jolly%20George%20Verghese%20v.%20The%20 Bank%20Of%20Cochin%20-%20Decision%20of%2004.02.80.pdf 

▪ https://www.legalauthority.in/judgement/jolly-george-verghese-anr-vs-the-bank-of cochin-32078 

▪ https://www.lawyersclubindia.com/judiciary/can-a-person-be-imprisoned-on-the ground-that-he-did-not-discharge-his-contractual-liability-4491.asp

Edited by Megha Jain

Authors/Editors

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