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With the recent amendment to Section 107.1 (contempt of court) of the Civil and Criminal Procedure (CCPC), 2001, debtors risk being branded as a criminal if they are unable to pay the debts. The amended Section states in monetary cases: “a person shall be imprisoned for several years calculated based on value-based sentencing subject to section 18 of the Penal Code.” The contempt of court is designed to protect the authority of the court from possible obstruction or interference in the fair administration of justice. However, with this amendment, this section is criminalizing debtors blurring the fundamentals of criminal offence and civil disputes.

Article 7 Section 1 of our constitution engrafted the fundamental right to liberty and prohibits from taking away except by due process of law established by the parliament. Such harsh criminal sanction violates the fundamental right to liberty as well as procedural rights and due process of law.  Infringement on the personal liberty “affects the vital elements of an individual’s physical freedom.”  Further, Article 7 Section 16 guarantees the “right to be presumed innocent until proven guilty.” Section 96.2 of CCPC requires that the prosecution must prove to the “full satisfaction of the Court has established a proof beyond a reasonable doubt.”  Further, Section 207 requires that, a person can be sentenced only “concerning the element of the charge where guilt beyond reasonable doubt has been proven to the full satisfaction of the Court.”  

This means a person can be convicted only if the prosecutor can prove every element of the offence beyond a reasonable doubt. Contrary to this, since debt is a civil dispute, as per Section 96.1 of CCPC only preponderance of the evidence or balance of probabilities is the standard of proof which is no near the requirement of proof beyond a reasonable doubt. Therefore, such provision trumps procedural and fundamental rights, and constrains the courts from ensuring justice.  

Even otherwise, from a public policy and economic perspective, everyone loses. For example, creditors such as banks or individuals cannot recover their money since the debtor is imprisoned. Similarly, since the debtor is a prisoner, there is a huge impact on public expenditure besides further congesting the already congested prisons in the country. Further, many innocent debtors, particularly from poorer sections of the society will languish their lives behind the bar including depriving their economic, social, political rights and right to liberty. Since Section 18 of the PCB is invoked, the maximum penalty is only less than nine years. Such penalty may be abused by some borrowers to accumulate wealth. A person may borrow in millions, disburse the money with family or hide somewhere and serve the prison term and later use the money. 

Our legislatures failed to anticipate the negative consequences of this provision.  While the possible intention of legislatures may be to protect both the creditors and debtors, this provision does not protect anyone rather cause harm to everyone including the national economy and taxpayers.  Instead, our legislature must enact laws that fixes onus on creditors to ensure strong adherence to due diligence before creditors lend money to debtors including associate risks and income. The failure of creditors to practice due diligence must not take way the right to liberty of debtors alone and no business is neither risk free nor criminal sanction will manumit the debtor from debt.

Sonam Tshering

Lawyer, Thimphu

Disclaimer: The views expressed in this article are author’s own.

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