Samshad, vs Kewal Ram Daswani
- Court
- Delhi High Court
$~100
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ EFA (COMM) 4/2026 & CM APPL.7432/2026
SAMSHAD .....APPELLANT
Through: Mr. Bahar Uddin Barqi, Sr. Adv.
With Mr. Maroof Ahmad , Adv.
Versus
KEWAL RAM DASWANI ….. RESPONDENT
Through: Mr. Tarun Gahlot and Mr.Rohit
Kumar, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE VINOD KUMAR
JUDGMENT (ORAL)
% 21.07.2026
VINOD KUMAR, J.
1. The present appeal is directed against an order dated 23.12.2025
passed by learned District Judge, Commercial Court-13, Central
District, Tis Hazari Courts, Delhi (hereafter as ‘Executing
Court’) in Execution (Comm.) 456/25 whereby, the Executing
Court issued arrest warrants against the appellant/judgment-
debtor.
2. In course of execution of the money part of decree, the
Executing Court passed the impugned order, which is
reproduced as under:
“As per mediation report, the matter remained unsettled
as parties did not participate or refused/declined to
participate in proceedings.
Signature Not Verified
Signed By:PRAMOD
KUMAR VATS
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Affidavit by JD about his assets stands now filed on record
and it is found stated therein that he has no movable or
immovable assets. Earlier, warrants of attachment issued
against him at his residential address were also received
back with report that no attachable articles of JD were
found available in his house. However, the said report
suggests that two floors of the residential property of JD
are on rent.
The objections of JD are already on record and Ld.
Counsel for DH submits that he has not to file any reply
thereto and hence, arguments on the same have been
heard straightaway.
It has been observed that all the points or objections
raised by JD in his reply to this execution petition filed by
DH stand already considered and rejected by this court
while passing the judgment in suit between parties, in
pursuance of which the decree under execution has been
filed and none of the said grounds is relevant or worth
being considered as a genuine objection of the JD to
execution of the said decree.
Hence, the objections filed by JD are being dismissed
being devoid of merits. Since it appears to this court that
JD is intentionally and unreasonably avoiding to
discharge his liability to pay the decretal amount, let his
arrest warrants through the SHO of local area of his
residence be issued on taking steps by DH within 7
working days from today.
List the matter now on 21.01.2026 for report”
3. Learned Counsel for the appellant has invited Court’s attention
to Section 51 of the Code of Civil Procedure, 1908 (in short
‘CPC’) and submits that it mandates the Executing Court to
grant an opportunity of showing cause to the judgment-debtor
before issuing arrest warrants against him. He submits that the
Executing Court, without issuing a show cause notice to
judgment-debtor i.e. the appellant and thereby failing to follow
the due procedure of law, has violated the spirit of Section 51 of
the CPC alongside Rules 37 and 40 of Order XXI of the CPC.
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KUMAR VATS
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4. Learned Counsel for the appellant has relied upon two
judgments of this High Court viz. M/S Cell Page
Communication v. Vijay Shankar Pandey reported in 2022
SCC OnLine Del 3421 and as Nizam Sheikh v. Alimuddin
reported in 2025 SCC OnLine Del 2226 in his support and
accordingly prays that the impugned order may be set aside.
5. Opposing the submissions of learned Counsel for the appellant,
learned Counsel for the respondent argues that the
appellant/judgment-debtor had adopted all tactics to avoid
payment of the decretal amount to the respondent/decree-
holder. However, he was unable to convince us on the issue of
compliance of requirements of Section 51 of the CPC. Learned
Counsel for the respondent fairly conceded that no show cause
notice as per Section 51 or the Order XXI Rule 37 of the CPC
was issued to the appellant/judgment-debtor.
6. The same issue came before one of us (C.Hari Shankar, J.)
hearing the matter as a Single Judge in Cell Page
Communication (supra) , which has been cited by learned
Counsel for the appellant. As this judgment not only reproduces
Section 51 as well as Rule 37 and 40 of Order XXI CPC but
also discusses the complete exposition of law on arrest and
detention to civil imprisonment, we would like to reproduce it
extensively as under:
“21. Section 51 of the CPC and Rules 37 and 40 of
Order XXI of the CPC read thus:
Section 51
51. Powers of Court to enforce execution.— 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—
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KUMAR VATS
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(a) by delivery of any property specifically decreed;
(b) by attachment and sale or by the sale without
attachment of any property;
(c) by arrest and detention in prison [for such period
not exceeding the period specified in section 58, where
arrest and detention is permissible under that section;
(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.
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.
Signature Not Verified
Signed By:PRAMOD
KUMAR VATS
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*
Rules 37 and 40 of Order XXI of the CPC
37. Discretionary power to permit judgment-debtor to
show cause against detention in prison.— (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 1 [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.
*
40. Proceedings on appearance of judgment-debtor in
obedience to notice or after arrest.— (1) When a
judgment-debtor appears before the Court in obedience to
a notice issued under rule 37, or is brought before the
Court after being arrested in execution of a decree for the
payment of money, the Court shall proceed to hear the
decree-holder and take all such evidence as may be
produced by him in support of his application for
execution and shall then give the judgment-debtor an
opportunity of showing cause why he should not be
committed to the civil prison.
(2) Pending the conclusion of the inquiry under sub-rule
(1) the Court may, in its discretion, order the judgment-
debtor to be detained in the custody of an officer of the
Court or release him on his furnishing security to the
satisfaction of the Court for his appearance when
required.
(3) Upon the conclusion of the inquiry under sub-rule (1)
the Court may, subject to the provisions of section 51 and
to the other provisions of this Code, make an order for the
detention of the judgment debtor in the civil prison and
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KUMAR VATS
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shall in that event cause him to be arrested if he is not
already under arrest:
Provided that in order to give the judgment-debtor an
opportunity of satisfying the decree, the Court may, before
making the order of detention, leave the judgment-debtor
in the custody of an officer of the Court for a specified
period not exceeding fifteen days or release him on his
furnishing security to the satisfaction of the Court for his
appearance at the expiration of the specified period if the
decree be not sooner satisfied.
(4) A judgment-debtor released under this rule may be
re-arrested.
(5) When the Court does not make an order of
detention under sub-rule (3) it shall disallow the
application and, if the judgment-debtor is under arrest,
direct his release.
22. Arrest and detention in prison is one of the modes
by which Section 51 permits the executing court to enforce
execution of a decree. This power is, however, expressly
subject to the proviso to Section 51. It is well settled that a
proviso is in the nature of an exception to the main
provision. The proviso to Section 51 applies exclusively to
a situation in which the decree under execution is a money
decree, as in the present case. In such a case, there is an
absolute proscription – as is reflected by the use of the
words “shall not be ordered” – against execution of a
money decree by detention in prison unless the protocol
envisaged by the proviso is scrupulously followed. This
protocol may be set out thus:
(i) The executing court is required, in the first instance, to
grant, to the judgment debtor, an opportunity to show
cause as to why he be not committed to prison.
(ii) Consequent on receipt of response from the judgment
debtor to the said show cause notice, the Court has to be
satisfied that one or more of the exigencies envisaged by
Clauses (a) to (c) of the proviso exist. Clause (a)
envisages the judgment debtor being likely to abscond or
to leave the local limits of the jurisdiction of the Court or
dishonestly transferring, concealing or removing any part
of his property or committing any other bad faith in
relation to his property, with the object or effect of
obstructing or delaying the execution of the decree. Clause
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KUMAR VATS
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(b) envisages a situation in which the judgment debtor,
despite being possessed of the means to pay the amount of
the decree or a substantial part thereof, refuses or
neglects to do so. Clause (c) contemplates a situation in
which the decree is for a sum for which the judgment
debtor was bound to account in a fiduciary capacity.
(iv) It is only after issuing a notice to the judgment debtor
to show cause against committal in prison, and the court
is satisfied that one or more of these exigencies applies,
that execution of the decree by detention in prison can be
ordered.
23. Clearly, therefore, Section 51 prescribes a very rigid
protocol before enforcing execution of a simplicitor money
decree by detention of the judgment debtor in prison. This
protocol is mandatory and non-negotiable.
24. Order XXI Rule 37 is, in a manner of speaking, a
provision supplemental to Section 51 of the CPC and
geared at facilitating the implementation thereof. Order
XXI Rule 37 also applies where the execution application
seeks execution of a money decree. The provision starts
with the non-obstante clause, indicating that it prevails
over other Rules in the CPC.
25. Order XXI Rule 37(1) provides that, in the case of an
application for execution of a money decree, instead of
issuing warrants of arrest of the judgment debtor, the
Court shall – thereby indicating the provision to be
mandatory – issue of notice to the judgment debtor calling
upon him to appear before the Court on a specified date
and show cause as to why he be not committed to the civil
prison. The proviso to Order XXI Rule 37 relaxes this
requirement “if the Court is satisfied, by affidavit or
otherwise, and that the object and 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”.
26. It is obvious that insofar as the proviso to Order XXI
Rule 37(1) compromises the liberty of the judgment
debtor, it has to be subjected to a strict construction. It
can apply, therefore, only where the Court, for clear and
cogent reasons, satisfies itself that the judgment debtor is
likely to abscond or leave the jurisdiction of the Court
with the object or effect of delaying the execution of the
decree.
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KUMAR VATS
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27. It is only where appearance is not made in response to
the notice issued Order XXI Rule 37(1) that Order XXI
Rule 37(2) empowers the Court to issue a warrant for
arrest of the judgment debtor.
28. Order XXI Rule 40 envisages yet a further protocol,
where a judgment debtor appears before the executing
court in obedience to the notice issued under Order XXI
Rule 37. Where notice is issued under Order XXI Rule
37(1) and in response thereto, the judgment debtor
appears before the executing court, the court cannot
straightaway direct him to be detained in civil prison, even
where he is in default of execution of the decree. The
Court is required to (i) hear the decree holder, (ii) take all
such evidence as may be produced by the decree holder in
support of his execution application and thereafter (iii)
provide, to the judgment debtor, an opportunity to show
cause as to why he be not committed to the civil prison.
The exercise that Order XXI Rule 40(1) envisages is an
inquisitorial exercise, as is apparent from the opening
words of Order XXI Rule 40(2), which provides for
detention, of the judgment debtor, in the custody of an
officer of the Court, pending conclusion of the inquiry
under Order XXI Rule 40(1). It is only after this
inquisitorial exercise is carried out under Order XXI Rule
40(3), that the Court may direct detention of the judgment
debtor in civil prison.
29. …………
30. …………
31. …………
32. The arrest of any citizen compromises his right to life
and personal liberty, which are the most sanctified of the
fundamental rights under Part III of the Constitution of
India. Liberty is a sanctified preambular constitutional
goal. Adherence, to any procedure which affects the
liberty of the citizen, has to be strict and scrupulous. ”
7. A Division Bench of this court was also faced with this very
question in Mohiet Anand v Parul Anand, reported in 2024
SCC OnLine Del 1968 . The Division Bench summarized the
entire law as under:
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KUMAR VATS
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“27. It is gleaned from a bare perusal of the above
provisions that Section 51 of CPC, 1908, prescribes four
main modes of execution:
i. By delivery of property specifically decreed;
ii. By attachment and sale of property;
iii. Detention in prison in execution of a money decree; or
iv. Appointment of Receiver.
28. Proviso to Section 51 prescribes twin test to be
satisfied before any person can be ordered to be detained
in civil imprisonment; viz, firstly, there is an opportunity is
given to Show Cause to the Judgment Debtor to explain as
to why he should not be committed to prison. Secondly, it
is after the Court arrives at a satisfaction which is to be
recorded in writing, that the Judgment Debtor has since
the date of decree, means to pay the amount or substantial
part thereof and refuses or neglects to pay the same or
that he is likely to transfer his money or is likely to
abscond, that detention of the judgment debtor can be
directed.
29. Rule 37 of Order XXI, CPC explains the procedure to
be followed for arrest. It states that the process be
commenced on an application being filed by the decree
Holder for arrest of the Judgement Debtor and a Notice be
issued to show cause why he should not be detained in
civil imprisonment though warrants of arrest may be
issued to secure his presence where the Court is satisfied
by an affidavit or otherwise, that there is likelihood of his
absconding or leaving the jurisdiction of the Court with an
object to delay the execution and to avoid the compliance
of the Orders. The warrants for arrest issued under Rule
37(2) is only to ensure the appearance of judgement
debtor to undergo the mandatory inquiry under Rule 40
CPC. In such a case, it is necessary for the Court to
record its reasons, for a nonspeaking order is as good as
an arbitrary and draconian action against a person
depriving him of his fundamental right to liberty contrary
to the due process of law. This mandatory provision
ensures the preservation of an individual's right to liberty,
enshrined in Article 21 of our Constitution, by following
the principle of natural justice and audi alteram partem as
MAT.APP. (F.C.) 172/2022 Page 12 of 20 observed by the
High Court of Punjab and Haryana in the case of Rajesh
Arora (Supra).
30. Rule 40 of Order XXI, CPC further provides for the
procedure for holding the mandatory inquiry before
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remanding the person to prison. On securing the presence
of the judgement debtor under Rule 37 before the court,
all such evidence be taken by the court as may be
produced by decree holder in support of his application
for execution. Thereafter, the judgement debtor shall also
be given of showing cause why he should not be committed
to the civil prison. While the enquiry is underway, the
judgement debtor may either be released on furnishing of
a security or be arrested but this duration shall not be
more than 15 days. Once the enquiry is concluded, then
too, before ordering the imprisonment, the Court shall
give an opportunity to satisfy the decree on his furnishing
a security, before finally directing the Civil imprisonment.
Sub-rule 3 of Rule 40 subjects the Court's power of
detaining the judgment-debtor in civil prison to the
provisions of Section 51. Therefore, the Court cannot
order detention unless it is satisfied that any of the three
conditions in the Proviso to Section 51, exist .
31. The detailed procedure as prescribed in the aforesaid
rules makes it abundantly clear that a person’s personal
liberty cannot be curtailed only on the asking of the decree
holder but arrest is to be resorted to only after scrupulous
adherence to the procedure when faced with the
recalcitrant attitude of the judgement debtor.”
8. It must be kept in mind that the purpose and objective of the
aforesaid provisions of Civil Procedure Code have a
philosophical and Constitutional basis. This was amply
elaborated by a judgment of the Supreme Court authored by
Justice V.R. Krishna Iyer in Jolly George Varghese and
Another v The Bank of Cochin (1980) 2 SCC 360 , which also
discussed the impact of Article 11 of the International Covenant
th
on Civil and Political Rights as well as 54 Report of the
Central Law Commission. It would be of benefit to reproduce
the relevant paragraphs of the judgment:
“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-
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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 of Civil
Procedure Code. Here is an appeal by judgement-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)”
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 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.”
A third, though humdrum, question is as to whether, in this
case, s. 51 has been complied with in its enlightened
signification. This turns on the humane meaning of the
provision.
3. ………………
4. ……………….
5. ………………
6. 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 rea apart from failure to foot the
decree, international law frowns on holding 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
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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.
“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 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 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
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
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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 under Section 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 enforceability 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:
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“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.”
7. 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.
8. Indeed, the Central Law Commission, in its Fifty
Fourth Report, did cognise the Covenant, while dealing
with Section 51 C.P.C.:
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“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."
9. 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.
10. 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 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
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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 s. 51 C.P.C. and the lethal blow of Article
21 cannot strike down the provision, as now interpreted.
11. 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.”
9. The importance of following a fair and due process of law for
curtailing liberty of a person is so much that in Subrata Roy
Sahara v Union of India and Others, 2014 SCC OnLine SC
425 , the Supreme Court of India, although was exercising
powers under Article 142 of the Constitution of India, did not
ignore the rigors of Section 51 of CPC. As an example, we
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would like to reproduce the relevant portion of the judgment as
under:
“83. The first situation contemplated by the proviso to
Section 51 CPC is, when the executing court entertains the
view that the judgment-debtor is likely to abscond or leave
the local jurisdiction of the court with the object of
obstructing or delaying the execution of the decree.
Insofar as the instant aspect of the matter is concerned, it
is apparent that this Court actually entertained the view
that the petitioner was "likely" to abscond or leave the
local limits of the jurisdiction of this Court for obstructing
or delaying the execution of the decree. It is, therefore,
that this Court by its order dated 28-10-2013 directed that
"... the alleged contemnors (respondents) shall not leave
the country without the permission of this Court...". Even
though the above order was subsequently relaxed by this
Court on request made by the petitioner, yet once again on
21-11-2013 this Court directed "... the alleged contemnors
shall not leave the country without the permission of this
Court". The first of the postulated preconditions for
ordering arrest and detention of a judgment-debtor for the
execution of the liability resting on the shoulders of the
two Companies, was therefore clearly made out before the
impugned order dated 4-3-2014 was passed.
84. Another alternative precondition contemplated in the
proviso to Section 51 CPC is, when a judgment-debtor has
the means to pay the amount of the decree (or some
substantial part thereof) and yet refuses or neglects to pay
the same. Insofar as the instant aspect of the matter is
concerned, the two Companies concerned could have
easily paid the contemplated amounts, by selling their
assets (in terms of their affidavit dated 4-1-2012). It is
also relevant to mention that in the affidavits filed by the
two Companies concerned before SAT on 14-9-2011
[taken from Volume II of additional documents filed by the
respondents in Contempt Petition (Civil) No. 412 of 2012],
it was acknowledged on behalf of the two Companies, that
the book value/market value of their properties as on 30 -
8-2011 were as under:
Book
value
(Rs in
crores)
Market
value
(Rs in
crores)
SIRECL
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(i) Investments 6430 36,021
(ii) Cash/Current assets, etc. 15,937 20,297
SHICL
(i) Investments 1865 5498
Cash/Current assets, etc. 6027 7682
Total 30,259 69,498
The market value of the assets acknowledged by the two
Companies would have undoubtedly appreciated further
from the figures depicted in 2011. During the course of
hearing before this Court, on several occasions it was
undertaken by the contemnors that they would dispose off
the unencumbered immovable properties owned by the
Sahara Group to comply with the orders dated 31-8-2012
and 5-12-2012. In this background it may also be
mentioned that the official website of Sahara India
indicates the net worth of the Sahara Group as Rs 68,174
crores. According to the above website, the Sahara Group
has a land bank of approximately 36,631 acres, and the
market value of the Group assets/potential earning is to
the tune of Rs 1,52,518 crores. It is also not a matter of
dispute that the Sahara Group owns premium hotels in
London (the Grosvenor House) and in New York (the New
York Plaza). The above hotels, according to the Sahara
Group are valued at over several thousand crores of
rupees. Be that as it may, after the passing of the orders
dated 31-8-2012 and 5-12-2012, no payment has been
made by the two Companies concerned. The last deposit of
Rs 5120 crores was made on 5-12-2012. It is, therefore
apparent that in spite of their means to pay, the two
Companies have refused and neglected to pay the amount
due in its entirety (or even a substantial part thereof).
Another postulated precondition for ordering the arrest
and detention of a judgment-debtor, for the execution of a
money decree, was therefore clearly made out before the
impugned order dated 4-3-2014 was passed.
85. We are prima facie satisfied that yet another
precondition contemplated in the proviso to Section 51
CPC was also made out. The reason for expressing the
instant view is that no clear responses were ever given by
the two Companies. The position remained the same
whether those answers were sought by SEBI (WTM), or
SAT, or even by this Court. When SIRECL was required to
disclose the manner in which it had made payments by
way of redemption to the OFCDs holders, the following
sources were disclosed:
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Rupees
(in crores)
1. Sahara Credit Coop. Society Ltd. 13,366.18
2. Sahara India Commercial Corpn.
Ltd.
4384.00
3. Sahara Q Shop 2258.32
4. Ket6ak City Homes Ltd. 19.43
5. Kirit City Homes Ltd. 44.05
Likewise, when similar information about redemptions
was sought from SHICL, the following sources were
disclosed:
Rupees
(in crores)
1. SICCL 2479.00
2. Sahara Q Shop 2411.90
86. At the cost of repetition we may record, that when
asked the manner in which the Companies had forwarded
the abovementioned payments to the two Companies, the
response was that the above amounts were never released,
but were transferred to Sahara India (Firm) for
disbursement. When details of the above transactions were
sought, the Court was informed that the above
transactions were made by way of cash, and the
requirement of the Court to show banking transactions
was unfair. When asked how the two Companies had
collected the cash funds, which were paid to Sahara India
(Firm), the response was that the two Companies which
had collected the funds had collected the same by way of
cash. When asked how disbursements were made to the
investors, the response was that about 95% of the
payments made to the investors were also made by way of
cash. To demonstrate the receipt and payment of the funds
by way of cash, the learned Senior Counsel representing
the contemnors (including the petitioner herein) Invited
our attention to the books of accounts (only general ledger
entries) to demonstrate proof of the transactions under
reference. Details in this behalf have been recorded by us
under Heading IX: "A few words about the defence of
redemption of OFCDs offered by the two Companies"-see
paras 138-155 at pp. 602 et seq. The above explanation
may seem to be acceptable to the contemnors, but our
view is quite the converse. It is not possible for us to
accept that the funds amounting to thousands of crores
were transacted by way of cash. We would therefore, on
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the face of it, reject the above explanation tendered on
behalf of the two Companies. It is necessary to notice that
one of the preconditions contemplated under the proviso
to Section 51 postulates, that if the judgment-debtor
dishonestly transfers, conceals or removes any part of his
property, or commits any act of bad faith in relation to his
property, the executing court concerned can enforce a
money decree, by way of arrest and detention. Since a
farcical explanation was tendered by the two Companies
in respect of receipt, payment and transfer of thousands of
crores of rupees by way of cash, without reference to any
banking transactions whatsoever, it was legitimate to infer
dishonest transfers, as well as, bad faith, on behalf of the
contemnors. Therefore, for yet another reason, it was open
for this Court to order arrest and detention of the
contemnors (including the present petitioner) for
enforcement of the directions issued by this Court on 31-8-
2012 and 5-12-2012.
87. The four preceding paragraphs clearly demonstrate
that three different conditions contemplated in the proviso
to Section 51 CPC, were satisfied before we ordered the
arrest and detention of the contemnors for enforcement of
the orders passed by this Court. Satisfaction of any one of
the conditions, expressed in the foregoing four
paragraphs, would have been, sufficient to order the
arrest and detention of the petitioner under Section 51
CPC. Our instant determination should not be understood
to mean that Section 51 CPC is applicable to the facts and
circumstances of this case. The instant determination
should only be understood to mean that the parameters
laid down in Section 51 CPC stood fully satisfied before
the arrest and detention order dated 4-3-2014 was
passed.”
10. It is also settled that, when the statute prescribes a particular
manner of doing an act, that act must be done in that manner or
not at all, all other manners of doing the act being necessarily
forbidden. ( Taylor v. Taylor, (1875) 1 Ch D 426, 431 ; Nazir
Ahmed v. King-Emperor, LR 63 IA 372 ; State of Uttar Pradesh
v. Singhara Singh and Others, 1963 SCC OnLine SC 23 ). If,
therefore, the proviso to Section 51 of the CPC requires
issuance of a show cause notice before deciding to proceed to
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the extreme step of arrest, no arrest can be directed without
putting the judgment-debtor to show cause. Failure to grant
such opportunity would ipso facto invalidate the warrants of
arrest.
11. On perusal of the relevant provisions and the case law
discussed above, it is clear that the Executing Court before
issuance of arrest warrants is required to grant the judgment-
debtor an opportunity to show cause as to why he be not
committed to prison.
12. It is necessary to mention that no material exists to suggest that
the appellant/judgment-debtor was not participating in the
proceeding. Admittedly, no application was moved by the
decree-holder under Rule 11A and 37 of Order XXI CPC for
arrest and detention to civil imprisonment of the judgement-
debtor before the Executing Court. Also no show cause notice
was issued to the judgment-debtor in accordance with
requirements of Section 51 of the CPC.
13. As the Executing Court has not followed said procedure, the
impugned order is set aside to the extent of issuance of warrants
of arrest.
14. However, nothing stated herein shall prevent the
respondent/decree-holder from moving an application before
the Executing Court under Rule 11A read with Rule 37 of Order
XXI of the CPC specifically pleading the facts and grounds,
alongwith affidavit, to satisfy the Executing Court that the
judgment-debtor is covered under the Proviso to Section 51 of
the CPC. In case the respondent/decree-holder files such
application, the Executing Court shall afford the judgment-
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debtor/appellant an opportunity to show cause why he should
not be committed to prison. Thereafter, the Executing Court, if
satisfied after due inquires, may proceed in accordance with
law.
15. Accordingly, the appeal is allowed.
16. The appeal along with pending application(s) is disposed of.
VINOD KUMAR, J.
C.HARI SHANKAR, J.
JULY 21, 2026/vb
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