STATE BANK OF HYDERABAD v. DHANALAKSHMI TRADING CO
1981-09-04
K.A.SWAMI
body1981
DigiLaw.ai
K. A. SWAMI, J. ( 1 ) THESE tvo civil revision petitions arise out of the two suits being C. S, nos. 33 and 36 of 1981 respectively on the file of the learned Civil Judge. Yadagiri, and are preferred agains: a common order passed by the learned civil Judge on I. A. 2 filed in each, one cf the suits in question. I. A. 2 was filed by the petitioner under Order 38 rule 5 read with Section 151 of the cpc for an order of attachment before judgment of the claim amount payable by the United india General Insurance Co. Madras, branch at Raichur to M/s. Dhanalakshmi Trading Co. (defendant-1) in a sum of Rs. 8 lakhs in connection v/ith the fire accident at Raichur agriculture Produce Marketing and processing Centre, Cotton Kapas raichur. ( 2 ) BOTH the suits have been filed by the Stale Bank of Hyderabad, which is the petitioner in both these revision petitions. The prayer made in the application (I. A. 2) filed in both the suits is the same and the allegations made in the affidavits filed in support of the applications are also similar the trial Court, on consideration of. "he averments made in the affidavits filed in support of the applications, has held that no cose is made out for passing an order for attachment" before judgment and has accordingly rejected the applications. ( 3 ) IT is contended, by Shri Shah, learned Counsel on behalf of Mis. King and Partridge for the petitioner in bath the civil revision petitions, that the petitionerr has gon a very heavy claim against the respondents who are indebted to a large extent; that if an order for attachment before judgment is not passed, the petitioner will not be able to reap the fruits of the decree which it may secure in the suits in question. It is also further concended that the debts incurred by the respondents are disproportionate to their assets. ( 4 ) WHEREAS, on behalf of the respondents it is contended that 'the allegations made in the affidavits filed in support of the applications (LA.
It is also further concended that the debts incurred by the respondents are disproportionate to their assets. ( 4 ) WHEREAS, on behalf of the respondents it is contended that 'the allegations made in the affidavits filed in support of the applications (LA. 2) do not at' all make out a case for passing an order for attachment before judgment; that the requirements of Rule 5 of Order 38 of C. P. C. have not been prima facie established; that an order of attachment before judgment will have serious consequences and will adversely affeet ihe business and reputation of the respondents; therefore, in be absenco of any prima facie case tailing under Rule 5 of Order 38 of the c. P. C. (shortly, 'the Code') having been made out by the petitioner, the trial Court is justified in refusing to pass an order for attachment before judgment. It is also further submitted that the respondents who are the defendants in the suits in question, have denied the suit claims as made by the petitioner-plaintiff. Therefore the question that arises for consideration is as to whether the trial Court is justified in rejecting the applications filed be the petitioner for attachment before judgment. ( 5 ) THE averments made in the affidavit filed in support of the application under Rule 5 of Order 38 of the Code, are as follows:" I. N. K. Desai S/o. Krishna Rao, aged 38 years, Branch Manager of the plaintiff Bank residing at Yadgiri, district Gulbarga hereby state on boath. as follows:- i am the Manager of the plaintiff-Bank and acquainted of. all the facts of 'be case. , the plaintiff has filed a suit against the defendants for recovery of a sum of. Rs. 41,409. 70 including costs and interest being the outstandings in the bill discount facility availed by the defendant No. 1. The averments in the plaint may be read as part of this petition. The petitioner-plaintiff bank learns that in respect of a fire accident occurred on 23rd Oct. 1980 at Raichur in the premises of Raichur agriculture Produce Marketing and processing Centre, Cotton Kapas and fully pressed cotton bales belonging to the first defendant which were insured with United India general Insurance Co. , Madras Branch, Raich in were burnt. The 1st defendant Mjs. Dhanalaxmi Trading Co.
1980 at Raichur in the premises of Raichur agriculture Produce Marketing and processing Centre, Cotton Kapas and fully pressed cotton bales belonging to the first defendant which were insured with United India general Insurance Co. , Madras Branch, Raich in were burnt. The 1st defendant Mjs. Dhanalaxmi Trading Co. , had preferred a claim with the said Insurance Company for a sum of Rs. 8,00,000 (Rs. 8 Lakhs) towards the loss damage sustained by M/s. Dhanalaxmi Trading Company due to the fire accident. The plaintiff-bank learns that the said claim of 1st defendant M/s. Dhanalaxmi Trading Co. , is likely to be settled in a few ' days. If the claim is settled by the said Insurance co. , the 1st defendant will be entitled for the, claim amount. A heavy amount of Rs. 41,409-70 ps. together with interest and costs is due and payable by defendants for which the above suit is filed. The 1st defendant it is learnt, is also indebted to the other creditors. If the first defendan is paid the fire insurance claim directly, this plaintiff-Bank would be put to great hardship to recover the suit outstanding when the suit is decreed. This plaintiff-Bank is advised that it has got good case In the above suit. Further, it is learnt that M/s. Dhanalaxmi Trading Company i. e. , the 1st defendant is having other creditors. Therefore, it is necessary in the interest of justice that attachment before judgment be ordered to the extent of suit claim. "it has already been pointed out that similar are the allegations made in the affidavit filed in support of the application filed in O. S. No. 36 of 1980. From the aforesaid averments made in the affidavit, it is clear that there is no averment to the effect that the defendants with intent to obstruct or delay the execution of a decree that may be passed in the suits are about to dispose of the whole or any part of their property or about to remove the whole or any part of their property .
The averments made in the affidavit do not bring the case within the scope of Rule 5 of Order 38 of the Code, apart from the fact that even mere allegations in the affidavit in terms of Rule 5 of Order 38 of the Code are not sufficient, unless it is prima facie shown that having regard to the facts and circumstances of the case, it is necessary to pass an order for attachment before judgment. ( 6 ) THE remedy of an attachment before judgment is an extra-ordinary remedy. The Court is required to act with utmost circumspection and with maximum care and caution before issuing an order of attachment. As the attachment before judgment is likely to cause irreparable damage to, and affect the reputation and business of, the party against whom it is passed; the Court should be very slow in exercising the power unless it is established that having regard to the facts and circumstances of the case, it is necessary to pass such an order. Care should be taken to see that it is not used as an instrument to coerce the opponent to settle the matter according to the dictates of the party who obtains the order of attachment before judgment. Looked from this point of view and also having regard to the averments made in. the affidavits filed in support of the application, the trial court cannot be said to have exercised the discretion either capriciously or unreasonably in rejecting the application. ( 7 ) IN addition to this, the property which is sought to be attached is not definite and it is a mere claim which is yet to be decided. The attachment sought for, in the instant case, is an attachment of the alleged property which is not in the possession of a judgment-debtor and as such, it comes under Order 21 rule 46 of the Code. The property sought to be attached is not a definite sum, but it is only a claim which is yet to be decided, and it is not certain as to what the award would be. For the purpose of attachment, either under rule 5 of Order 38 or under Rule 46 of order 21 of the Code, the property sought to be attached must be definite and certain.
For the purpose of attachment, either under rule 5 of Order 38 or under Rule 46 of order 21 of the Code, the property sought to be attached must be definite and certain. A mere inchoate claim unless it results into an Award or order or a decree, cannot be the subject matter of an attachment. In this connection, the Privy Council, in in the case of Syud Tuffuzzool Hossein khan v. Rughoonath Pershab and ladlee Pershad, (1) has held as follows:"the judgment under appeal refers to a late authority in support of it, which appears fully to bear out the position for which it was cited, viz. , that the sums attached must be not inchoate, but existing and definite. No case was quoted in opposition to it. The 205th section uses the word "property", not claim or right. A mere right of suit is not property, but a title to recover future property. Various passages from Mr. Macpherson's Work on Civil Procedure hereinafter referred to show that future property cannot be attached. It appears plainly from these passages that a mere expectancy, or a, mere right of suit, cannot be attached, that the attachment must operate at the time of attachment, and not be anticipatory, so as to fasten on some future state of property is which the suit may result. In the present case the attachment, as it has been observed, is not of the antecedent share in the undivided assets. It is of a claim under a future award, as to which it is wholly uncertain, until the Award be made, to what the debtor will be entitled. The uncertainty at the time of the attachment and sale was not limited to a mere question of quantum; it was wholly uncertain, as Sir George couper has correctly explained in his judgment, in what the arbitration might terminate. "thus, from this point of view also, the attachment sought for in the instant case being of an undecided inchoate claim which is yet to be decided in future cannot be made the subject of attachment unless it results into an enforceable award or order or decree, as the case may be. The attachment must operate the moment it is effected.
The attachment must operate the moment it is effected. In order that an attachment be operative, the moment it is effected, the property attached must be definite and must not be an inchoate and uncertain claim, as it is in the instant case. ( 8 ) FOR the reasons stated above, these civil revision petitions fail and the same are dismissed. However, it is made clear that this order will not come in the way of the petitioner to make an appropriate application for an appropriate relief. --- *** --- .