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ANIL KSHETARPAL
Rajinder Kumar Chauhan – Appellant
Versus
Tata Capital Financial Services Ltd. – Respondent
JUDGMENT :
ANIL KSHETARPAL, J.
1. The petitioners herein are Judgment Debtor Nos. 2 and 3. In an execution petition filed for implementing arbitration award dated 28.06.2016, for recovery of Rs.1,77,15,404/- along with interest @18% per annum, the Executing Court has ordered civil imprisonment of the petitioners for a period of 3 months.
2. This revision petition is pending for the last 7 years. Though, no stay was granted, however, the learned counsel representing the decree holders submits that the petitioners were arrested but subsequently granted bail on the same day. Neither the petitioners nor their counsel are present. However, with the able assistance of the learned counsel representing the decree holders, this court has perused the paper book containing the impugned order. It is evident that the Executing Court has not recorded any positive finding to the effect that the judgment debtors are intentionally evading to pay the amount although they have sufficient resources.
3. In execution of the civil court decree for recovery of the amount, the inability of judgment debtors to pay the amount does not automatically result in civil imprisonment. The Court is required to record a
Civil imprisonment for non-payment of debts requires proof of intentional evasion despite sufficient resources, aligning with Article 21's principles of fairness and human dignity.
The court emphasized the need to establish an attitude of refusal on demand and the debtor's means to pay the decree or a substantial part of it.
Arrest of a judgment-debtor in civil proceedings requires strict adherence to procedural safeguards and evidence of willful neglect to pay.
Arrest of a judgment-debtor for non-payment requires evidence of bad faith or willful neglect, and other execution methods must be considered first.
Imprisonment for non-payment of debts must comply with procedural safeguards to ensure fairness and assess the debtor's ability to pay.
The court clarified that mere default in paying a decree is insufficient for incarceration; evidence of bad faith and refusal to pay despite having means is required.
Issuance of warrants of arrest against a judgment-debtor requires proof of financial means to pay and intent to evade payment, absent which warrants are unlawful.
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