PRAKASH BHAGWANI v. SAMMATI FOOD PRODUCTS PVT. LTD. SAGAR
2002-01-21
S.P.KHARE
body2002
DigiLaw.ai
S. P. KHARE, J. ( 1 ) THIS is a revision by the judgment debtor against the order by which the executing Court has directed execution of the money-decree by his arrest and detention in prison on the application of the decree-holder. ( 2 ) IT is not in dispute that judgment debtor Prakash Bhagwani was carrying on whole sale business of Maida, Suji and flour in the name of "bhagwani Sales Agency" in Gandhi Bhawan, Jhulelal Market, Jabalpur and he had purchased goods from decree-holder Sammati Food Products Pvt. Ltd. Sagar in connection with that business. The decree-holder filed civil suit against him and obtained the money decree in respect of the price of those goods. The execution is for recovery of Rs. 91,248/ -. This execution case is pending for eight years. Now the business in the name of "pasand Traders" is being carried at the same place in the same commodities. Jitendra Kumar is brother of the judgment-debtor. ( 3 ) THE case of the decree-holder is that the whole sale business in the new name of "pasand Traders" is in reality being carried on by the judgment-debtor. He has done so with the object of obstructing or delaying the execution of the decree. By this device he is concealing his property and committing an act of bad faith in relation to his property,. The judgment debtor has the means to pay the decretal amount but he is refusing and neglecting to pay the same and thus he is acting dishonestly. ( 4 ) THE judgment-debtor's case is that he incurred heavy loss in the business which he was carrying on in the name of Bhagwani Sales Agency. He has closed his business. According to him the new business in the name of "pasand Traders" belongs to his brother Jitendra Kumar. He has no means to pay the amount of the decree and therefore, he cannot be detained in prison for satisfaction of the money-decree. ( 5 ) THE executing Court after recording evidence of both the sides has held that the judgment debtor is carrying on the new business in the name of "pasand Traders" and it does not belong to his brother Jitendra Kumar.
( 5 ) THE executing Court after recording evidence of both the sides has held that the judgment debtor is carrying on the new business in the name of "pasand Traders" and it does not belong to his brother Jitendra Kumar. In the opinion of the executing Court the judgment-debtor has changed the board from Bhagwani Sales Agency to Pasand Traders and in this manner he wants to deprive the decree-holder company from the fruits of its decree. The executing Court has found that the judgment-debtor has not produced any documentary evidence regarding the cessation of business in the old name and commencement of the business in the new name and the change in the name of the business has been done with dishonest intention. It has been further held that the judgment-debtor has come up with the false plea that he is not living in his house known as Paras Building at Narmada Road, Jabalpur. Thus according to the findings of the executing Court the judgment-debtor has means to satisfy the decree but he is refusing and neglecting to do so. ( 6 ) IN this revision it has been argued on behalf of the judgment-debtor that he has no means to pay the amount of the decree and he has not committed any act of bad faith. It is said that the findings of the executing Court are not correct. It is contended that the judgment-debtor cannot be detained in prison simply because of his inability to pay the money of the decree. Reliance has been placed on several rulings Ramchandra Iyer v. Thomas Mathai, AIR 1966 Ker 65 , K. Al. RM. RM. Alagappan v. Rajaguru and Co. AIR 1985 Mad 353 , Mayadhar Bhoi v. Moti Dibya, AIR 1984 Orissa 162, and Subhash Chand Jain, v. Central Bank of India, AIR 1999 MP 195 . ( 7 ) SECTION 51, C. P. C. provides that one of the modes of the execution of a decree is "arrest and detention" of the judgment-debtor in civil prison. The proviso to this section restricts the power of the executing Court to direct the arrest and detention of the judgment debtor in execution of the decree for payment of money. The object of the proviso is to afford protection to indigent and honest debtors.
The proviso to this section restricts the power of the executing Court to direct the arrest and detention of the judgment debtor in execution of the decree for payment of money. The object of the proviso is to afford protection to indigent and honest debtors. Therefore, mere non-payment of the amount of the decree is not enough to send the judgment-debtor to prison. But if the conduct of the judgment-debtor is dishonest or countumacious he is liable to be arrested and detained. The judgment-debtor is not protected if there is element of bad faith in his conduct. If he has the means to pay and still he refuses or neglects to honour his obligation under the decree, he becomes liable to imprisonment under Section 51, C. P. C. In short, honest judgment-debtors must be protected and dishonest ones can be punished. ( 8 ) THE leading case on the point is the decision of the Supreme Court in Jolly George v. Bank of Cochin, AIR 1980 SC 470 where it has been laid down while interpretating Section 51, C. P. C. that 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 his obligation under the decree. In this decision Section 51, C. P. C. providing for arrest and detention as one of the modes of the execution of the decree has been held to be constitutionally valid even in face of Art. 21 of the Constitution and Art. 11 of the International Covenant on Civil and Political Rights which provides that no one shall be imprisoned merely on the ground of inability to fulfull a contractual obligation. ( 9 ) AGAIN in Ramnarain v. State of U. P. , AIR 1984 SC 1213 : (1983 Tax LR 3008) it has been observed by the Supreme Court that in the contemporary Indian conditions the process of arrest and detention of a judgment-debtor or a defaulter to enforce payment of the amount due from him is not altogether unreasonable.
( 9 ) AGAIN in Ramnarain v. State of U. P. , AIR 1984 SC 1213 : (1983 Tax LR 3008) it has been observed by the Supreme Court that in the contemporary Indian conditions the process of arrest and detention of a judgment-debtor or a defaulter to enforce payment of the amount due from him is not altogether unreasonable. It cannot be held to be unconstitutional if there are sufficient safeguards which make the process conform to reasonable standards. ( 10 ) IN the present case the finding of fact recorded by the executing Court after proper appreciation of the evidence and the attendant circumstances is that the judgment-debtor is carrying on the old business in the new name and his conduct in changing the "board" is dishonest as he wants to deprive the decree -holder of its legitimate dues. It is not in dispute that the judgment-debtor purchased the goods from the plaintiff-decree-holder in connection with his business. He ploughed those goods to run his whole sale business and now he wants to get rid of his decretal liability. The new business is being carried on by him at the same place and in the same goods. There is element of bad faith in his conduct. He has means to pay and still he is refusing to pay. This is not a case of mere inability to pay due to circumstances beyond control. There is "dishonest disowning of the obligation. " within the meaning of the phrase used by the Supreme Court. The gist of the law laid down in the decisions cited by the learned counsel for the petitioner is the same as encapsuled by the Supreme Court in Jolly George's case referred above and, therefore, need not be dealt with at length. ( 11 ) THE impugned order is unreasonable. It is however, directed that the order of arrest and detention of the petitioner shall be held in abeyance if he deposits 1/4th of the decretal amount within 15 days in the executing Court and pays the remaining amount in instalments of Rs. 2000/- per month. This is being done to balance the conflicting interests of both the sides. Order accordingly. .