KURIAKOSE v. JOHNSON

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **MONDAY, THE 8[TH] DAY OF JANUARY 2024 / 18TH POUSHA, 1945 CRP NO. 15 OF 2023** **AGAINST THE ORDER IN EP 1670/2018 OF ADDITIONAL MUNSIFF COURT, IRINJALAKUDA** ## **REVISION PETITIONER/S:** KURIAKOSE, AGED 60 YEARS S/O KAVALAKKAT CHERPANATH KOCHU POULO,IRINJALAKUDA DESOM,MANAVALASSERY VILLAGE, TRISSUR DISTRICT., PIN - 680121 BY ADV T.N.MANOJ ## **RESPONDENT/S:** JOHNSON AGED 60 YEARS S/O THUDIYAN KURIAPPAN, THUDIYAN HOUSE ,POTTA VILLAGE, DESOM, CHALAKUDY TALUK. POTTA P.O TRISSUR DISTRICT PIN, PIN - 680721 BY ADV ADV HALVI KOTTAPPALLY SUDHAKARAN ## **THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON** **30.11.2024, THE COURT ON 08.01.2024 DELIVERED THE FOLLOWING:** CRP No.15 of 2023 -2- ## **ORDER** Dated this the 08[th] day of January, 2024 The revision petitioner is the second judgment debtor in E.P No.1670 of 2018 in O.S.No.300 of 2016 of the Additional Munsiff's Court, Irinjalakuda. The suit for return of money filed by the respondent against the revision petitioner and another was settled through mediation and a compromise decree passed. As per the terms of the compromise, the first judgment debtor was to pay an amount of Rs.26,50,000/- to the decree holder on or before 31.08.2016 and the second judgment debtor/revision petitioner was to pay Rs.52,00,000/- with interest at the rate of 18% from 30.05.2015, plus an additional sum of Rs.10,00,000/-. The amount due under the decree was charged over the immovable properties of the revision petitioner. 2. As the revision petitioner failed to CRP No.15 of 2023 -3- discharge the decree debt, the respondent filed E.P.No.4363 of 2017, seeking to realise the amount from the immovable properties of the revision petitioner. Thereupon, it came to light that there was already a charge over the properties at the behest of the Punjab National Bank. Therefore, that execution petition could not be proceeded with and was dismissed. The respondent thereupon filed E.P.No.1670 of 2018 seeking arrest and detention of the revision petitioner in civil prison for refusal to clear the decree debt in spite of having sufficient means. 3. In the execution petition, the respondent alleged that the first judgment debtor had paid off his liability, whereas the revision petitioner refused and neglected to pay any amount, despite receipt of huge income from his business in manufacture and sale of allopathic medicines. In his objection, the revision CRP No.15 of 2023 -4- petitioner refuted the averments in the execution petition and contended that all his businesses are under loss and the immovable properties were attached by the Punjab National Bank. 4. In order to prove his case, the respondent examined himself as PW1, the Health Supervisor of Irinjalakkuda Municipality as PW2 and produced Exts.A1 to A8 documents. On the revision petitioner's side, he was examined as RW1, the Branch Manager of Punjab National Bank as RW2 and got Exts.B1 to B13 documents marked. In addition, Exts.X1 to X6 were marked as Court Exhibits. By the impugned order, the court below found the revision petitioner to be having sufficient means and to have wilfully neglected payment towards the decree debt. Consequently, it was held that the revision petitioner can be arrested and detained in prison. Aggrieved, this revision petition is filed. 5. Learned Counsel for the revision CRP No.15 of 2023 -5- petitioner contended that the court below committed gross illegality in finding the revision petitioner to be a person with sufficient means. It is contended that the finding is based entirely on the documents produced by the respondent. According to the learned Counsel, even those documents will not prove that the revision petitioner's capacity to pay the amount and that he had refused or neglected to pay the amount. It is contended that the court below grossly erred in relying on the fact that the status of some of the revision petitioner's companies is shown as active in the official website of the Registrar of Companies, to hold that the companies are functioning and the petitioner is earning income from them. It is submitted that the balance sheet with respect to those companies has been filed only up to the year 2014 and the drug licence of two of the companies has been cancelled. Moreover, the CRP No.15 of 2023 -6- immovable properties in which the companies were functioning are attached and put up for sale by the Punjab National Bank. Even the residential property of the revision petitioner, which was given as security, was attached and sold by the Bank. The Health Supervisor of Irinjalakuda Municipality (PW2) had deposed that none of the business concerns are functioning at present. The Branch Manager of the Bank had stated that, possession of the revision petitioner's immovable properties were taken over by the bank. In the face of such clear evidence, the court below went wrong in finding the revision petitioner to be a man of means. 6. Learned Counsel for the respondent contended that the decree holder having succeeded in letting in proof regarding the judgment debtor's means, the burden had shifted to the revision petitioner to prove that he had no means. The documents on record would go to show CRP No.15 of 2023 -7- that the companies of the revision petitioner are still active and the licence for conducting businesses were renewed. The mere fact that there were some attachments over the immovable properties of the revision petitioner cannot lead to an assumption that all his businesses are closed down. Hence, the court below was justified in finding the revision petitioner liable to be detained in civil prison, as he had wilfully refused to pay the decree debt, in spite of having sufficient means. 7. The evidence tendered, both oral and documentary, would go to show that the revision petitioner had been doing business in English medicines through his establishments named Jyoti Remedies Pvt. Ltd and M/s.Sanchez Laboratories situated in Himachal Pradesh. The records also reveal that the Punjab National Bank had initiated recovery measures for realisation of the amount due to it by proceeding against the CRP No.15 of 2023 -8- immovable properties of the aforementioned companies. Exts.B3 and B4 sale notices revealed that the property consisting of land and factory building of M/s.Sanchez Laboratories was put up for sale by the Punjab National Bank. The Branch Manager of the Bank has stated that possession of the properties were taken over by the Bank before notifying the sale. Ext.X1 document would also reveal this fact. Moreover, as per Ext.B1 dated 30.07.2015, the manufacturing licence issued to Jyoti Remedies Pvt.Ltd was cancelled by the Drugs Licensing Authority. Even though the status of the companies, Oscar Organics India Pvt. Ltd and CE Biotech Pvt. Ltd, of which the revision petitioner is the Director, are shown as 'active', the Health Supervisor of the Municipality deposed that the above two companies are not functioning. Ext.B5 intimation letter dated 10.05.2017 would also show that the Drug Licence granted to Oscar Organics India Pvt.Ltd CRP No.15 of 2023 -9- was cancelled with effect from 10.05.2017. Likewise, Ext.B7 intimation letter shows that the licence of CE Biotech Private Limited cancelled with effect from 10.02.2017. As such, there is no conclusive evidence to hold that the revision petitioner's business establishments were operational and he was deriving income from the business. 8. Section 51(c) of the Code confers the court with the power to enforce execution of the decree by arrest and detention of the judgment debtor in prison under certain circumstances. One such circumstance, enumerated in clause (b) of the proviso to Section 51, is when 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. The Apex Court in _**Jolly George Varghese v.**_ CRP No.15 of 2023 -10- ## _**Bank of Cochin [(1980) 2 SCC 360]**_ , after careful scrutiny of the wording used in clause (b) to the proviso to Section 51 held as under; _“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 judgmentdebtor 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_ CRP No.15 of 2023 -11- _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.”_ It is thus clear that mere default in discharging the debt is not sufficient to order incarceration of the judgment debtor. For that, the default or refusal should be coupled with some element of bad faith. As held by this Court in _**Xavier v**_ ## _**Canara Bank Ltd [1969 KHC 195]**_ , neglect involves some sort of demand and indifferent response. Here, the immovable properties of the revision petitioner are under attachment and have been put up for sale by the Bank. It was precisely for this reason that the earlier execution petition, seeking realisation of the decree debt by proceeding against the properties, got dismissed. The fact that the status of revision petitioner's CRP No.15 of 2023 -12- companies are shown as active is of no avail, since, mere reflection of active status in the website of the Registrar of Companies cannot lead to an assumption that the revision petitioner is deriving income from those companies. All the more so, when the Drug Licences issued to some of those companies stand cancelled and properties of the companies are under attachment. The term 'means', in the context of Section 51, should be understood as liquid resource or assets capable of generating income. In the result, the civil revision petition is allowed and the impugned order is set aside. Sd/- **V.G.ARUN JUDGE** Scl/