Jolly George Verghese & Anr. v. The Bank of Cochin
📌 Background of the Case
The appellants (Jolly George Varghese and another) had borrowed money from the Bank of Cochin.
When they failed to repay, the bank obtained a decree from court directing them to pay.
Since they did not pay, the bank initiated execution proceedings.
The decree-holder (bank) sought arrest and detention of the debtors in civil prison under Section 51 and Order 21 of the CPC (Civil Procedure Code, 1908).
The debtors challenged this on the ground that imprisonment for non-payment of debt violates Article 21 of the Constitution and Article 11 of the International Covenant on Civil and Political Rights (ICCPR), which India had signed.
📌 Legal Issue
The main question before the Supreme Court was:
👉 Can a person be imprisoned for not repaying a debt, under Indian law, in light of Article 21 of the Constitution and India’s international obligations under ICCPR?
📌 Court’s Reasoning
Section 51 CPC allows arrest and detention of a judgment-debtor in execution of a decree, but it comes with safeguards.
A debtor can be arrested if the court is satisfied that:
(a) He has means to pay but refuses to pay, or
(b) He is likely to abscond or obstruct execution.
Article 21 (Right to Life & Personal Liberty) – No one can be deprived of liberty except according to procedure established by law.
If imprisonment is arbitrary or unreasonable, it will violate Article 21.
Article 11 of ICCPR – “No one shall be imprisoned merely on the ground of inability to fulfill a contractual obligation.”
India is a signatory, so courts must try to interpret domestic law in harmony with international obligations.
Supreme Court’s interpretation:
Imprisonment for mere inability to pay is not permissible.
However, imprisonment may be allowed if the debtor has the means but willfully refuses to pay or if there is fraudulent conduct.
So, civil prison is justified only when there is bad faith or deliberate default, not genuine poverty.
📌 Judgment
The Supreme Court set aside the order of detention of the debtors.
It held that:
Merely being unable to pay due to poverty is not a ground for imprisonment.
Section 51 CPC must be interpreted in light of Article 21 and ICCPR.
Civil imprisonment is valid only if the debtor has means but refuses or acts dishonestly.
📌 Principle (Case Law Rule)
Jolly George Varghese v. Bank of Cochin (1980) established that:
Civil imprisonment for debt is unconstitutional if it is based merely on inability to pay.
It is valid only when there is willful default despite sufficient means, aligning domestic law with international human rights obligations.
✅ In short: This case balanced creditor’s rights with debtor’s fundamental right to liberty under Article 21, and harmonized Indian law with international human rights principles.
RELATED Blog
0 comments