JUDGMENT G.D. Dubey, J. - In the two first appeal from order Nos. 136 of 1991 Union Bank of India v. M/s. Aurora Industrial Corporation and 5 others and 146 of 1991, Union Bank of India v. Aurora Industrial Corporation and 3 others, a common question of law arises. The facts, as far as the question of law is concerned are common. Hence we are answering the preliminary question of law in these two appeals by this common judgment. 2. In these appeals arising from orders of 1st. Additional Civil Judge, Gorakhpur rejecting an application under Order XXXVIII, Rule 5 of the Code of Civil Procedure (hereinafter code for brief) question arises about maintainability of appeal. The appeals are purported to have been filed under Order XLIII, Ruler 1 (q) of the Code. This Rule 1 (q) of Order XLIII of the Code makes only an order passed under Rules 2,3 and 6 of Order XXXVIII appealable. It has been urged from the side of the appellants that the impugned order falls under Rule 6 of Order XXXIII, whereas learned counsel for respondent contended that the order appealed against comes under Rule 5 of Order XXXVIII of the Code. Hence no appeal lies. 3. The facts from which the above controversy arises are very brief. The appeal No. 36 of 1991 arises from suit No. 51 of 1988 and No. 146 of 1991 from suit No. 52 of 1988. Both suits were instituted against respective defendants-respondents on 20-1-1989 for realisation of money. It was alleged in these applications that the defendants were intending to sell their property. Application under Order XXXVIII, Rule 5 of the Code was moved in both the suits on 8-3-1990. Since the defendant-respondents were represented and had put in appearance, objections were invited from them. The respondents tiled their objection on 23-3-1990. The respondents denied the allegation of plaintiff in both the suits that they are intending to transfer their property with a view to obstruct execution of a decree which may be passed against them. 4. The lower court came to the conclusion that plaintiff-appellant failed to show that respondents are transferring their property with an intention to obstruct the execution of any decree which may be passed against them. Hence the lower Court rejected the applications on 19-9-1990. Aggrieved by these orders the Bank has preferred these two appeals. 5.
4. The lower court came to the conclusion that plaintiff-appellant failed to show that respondents are transferring their property with an intention to obstruct the execution of any decree which may be passed against them. Hence the lower Court rejected the applications on 19-9-1990. Aggrieved by these orders the Bank has preferred these two appeals. 5. The preliminary objection of learned counsel for respondents about the maintainability of appeal is founded on this fact that in the present cases no conditional orders of attachment were passed by the lower court. Therefore, the order of lower court rejecting the application under Order XXXVIII, Rule 5 of the Code could not be considered as order under Rule 6 (2) of Order XXXVIII of the Code. It is an order under Rule 5 of Order XXXVIII, and therefore, is not at all appealable. 6. The learned counsel for the appellant urged that when defendant has been afforded an opportunity to show cause and the shows cause then the proceedings under Rule 5 of Order XXXVIII of the Code stand exhausted. Thereafter the court has to pass the order under Clause 2 of Rule 6 of Order XXXVIII of the Code. Such an order is appealable. 7. Several cases have been cited in support of the argument that no appeal lies. We shall consider them later. First of all we draw our attention to the Rules 5 and 6 of Order XXXVIII which read as under : 5.
Such an order is appealable. 7. Several cases have been cited in support of the argument that no appeal lies. We shall consider them later. First of all we draw our attention to the Rules 5 and 6 of Order XXXVIII which read as under : 5. Where defendant may be called upon to furnish security for production of property (1) where, at any stage of a suit, the court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him- (a) is about to dispose of the whole or any part of his property, or (b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court, the court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security. (2) The plaintiff shall, unless the court otherwise directs, specify the property required to be attached and the estimated value thereof. (3). The court may also in the order direct the conditional attachment of the whole or any portion of the property so specified. 4. If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule, such attachment shall be void. 6. Attachment where came not shown or security not furnished.-(1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Court, the court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached. (2) where the defendant shows such cause or furnishes the required security, and the property specified or any portion of it has been attached, the court shall order the attachment to be withdrawn, or make such other order as it thinks fit. 8.
(2) where the defendant shows such cause or furnishes the required security, and the property specified or any portion of it has been attached, the court shall order the attachment to be withdrawn, or make such other order as it thinks fit. 8. Learned counsel for both the parties admit that these cases do not fall under clause 1 of Rule 6 quoted above. We also agree with this. It is not a case where the defendant has failed to show cause. 9. The heading appended to Rule 5 reads, where the defendant may be called upon to furnish security for production of property. Thus the basic intention of the parliament is to provide for the conditions which should be fulfilled before defendant may be called to furnish security, etc. A close reading of Rule 5 indicates that before initiation of the steps of asking the defendant to furnish security, etc. the Court must be satisfied, by affidavit or otherwise that the defendant with intent to obstruct or delay the execution of decree that may be passed against him : (a) is about to dispose of the whole or a part of his property, or (b) is about to remove the whole or a part of his property from the local limits of the jurisdiction of the court, then the court may pass orders as are indicated in the following part of the rule. On such satisfaction the court may direct the defendant, within a time to be fixed by it ; (c) either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or (d) to appear and show cause why he should not furnish security. 10. Sub-rule (2) of Rule 5 requires the plaintiff to specify the property required to be attached and estimated value thereof unless the court direct otherwise. Sub-rule (3) of Rule 5 further provides that in appropriate case the court may also direct a conditional attachment of the whole or any portion of the property so specified.
10. Sub-rule (2) of Rule 5 requires the plaintiff to specify the property required to be attached and estimated value thereof unless the court direct otherwise. Sub-rule (3) of Rule 5 further provides that in appropriate case the court may also direct a conditional attachment of the whole or any portion of the property so specified. Sub-rule (4) of Rule 5 was added by the C.P.C. Amendment Act of 1976 which provides that attachment without complying with the provisions of sub-rule (1) of Rule 5 shall be void. 11. The above Rule 5 shows that once the court is satisfied by affidavit or otherwise that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him is about to perform any one of the act mentioned in clauses (a) and (b) of sub-rule (1) of Rule 5 then it may pass either of the two orders mentioned in sub-rule (1) of Rule 5. In appropriate circumstance the Court may also direct the conditional attachment of property. Hence once the court has satisfied itself about the intention of the defendant regarding his action likely to betaken as mentioned in clauses (a) and (b) of sub-rule (1) of Rule 5 then the court may pass order directing the defendant either to furnish security or to show cause and may also in appropriate cases make a conditional attachment. If the court is not satisfied about the intention of the defendant then it may reject the application outright and may not direct the defendant in either way as indicated in later part of sub-rule (1) of Rule 5, Hence such an order will obviously come under Rule 5 of Order XXXVIII of the Code. After the defendant has been given an opportunity to show cause then the purpose of Rule 5 stands exhausted and the Rule 6 comes into play. If the defendant fails to show cause then affect of sub-rule (1) of Rule 6 will ensue. If the defendant shows such cause or furnishes the required security and the property specified has been attached the court shall order the attachment to be withdrawn or make such other order as it thinks fit.
If the defendant fails to show cause then affect of sub-rule (1) of Rule 6 will ensue. If the defendant shows such cause or furnishes the required security and the property specified has been attached the court shall order the attachment to be withdrawn or make such other order as it thinks fit. The words make such order as it thinks fit provides an extensive umbrella to the discretionary power of the Court to pass such order as it deems fit in the circumstances when the defendant has shown cause or furnishes the required security etc. It is significant to note that Clause 2 of Rule 6 consist of two parts firstly; where the defendant shows cause or secondly, furnishes the required security then the order of attachment may be withdrawn. The Parliament has specifically provides an extensive discretion to the court "to make such orders as it thinks fit" only to enable the court to pass such order as it think fit when the defendant either shows sufficient cause and his property has been neither attached nor he has furnished security as directed under Rule 5 of the Code. Under portion of "make such order as it thinks fit" in sub-rule (2) of Rule 6 the court may reject the application or may ask the defendant to do such act as to secure the interest of the parties. We feel that under the powers "to make such orders as it thinks fit", the court may in appropriate case issue injunction restraining the defendant fro n alienating his property instead of attaching it under Order XXXVIII of the Code. The rejection of application after hearing the defendant on his showing cause will obviously fall under the portion "make such order as it thinks fit" of sub-rule (2) of Rule 6 of the Code. 12. In most of the cases discussed hereinafter, and relied upon by learned counsel for respondent, reliance was placed on a decision of a Division Bench of Calcutta High Court in Mahendra Narain Saha v. Gurudas Bairagi, AIR 1916 Cal 287. In this case the court did not make any ex parte order asking the defendant to furnish security nor did the court direct them to appear and show cause why they should not furnish security.
In this case the court did not make any ex parte order asking the defendant to furnish security nor did the court direct them to appear and show cause why they should not furnish security. The court also did not direct the conditional attachment of whole or any portion of the property as required to be attached. The Court had only issued a notice upon defendant to show cause why an attachment should not be issued before the judgment and at the same time directed the defendant not to part with the property in any way. The court observed that this procedure adopted by lower court was not directly in accordance with provision of the Code which were overlooked by the Court and the legal advisor of the parties. In this perspective the Division Bench observed that after defendant had shown cause and court comes that there was no sufficient ground to attach the property then such an order will not come within the purview of Rule 6 of Order XXXVIII, of the Code. It will come under Rule 5. 13. The Calcutta High Courts judgment is a very brief judgment. It appears that before the Division Bench the scope and ambit of Rules 5 and 6 of Order XXXVIII of Code were not argued. It was not noticed by the Court that the Rule 5 does not envisage adjudication when the defendant shows cause about the application. 14. In Chokhey Lal v. Pt. Sri. Kishan and another, AIR 1932 All. 269 , the plaintiff had made an application under Order XXXVIII, Rule 5 of the Code. The lower court directed the defendant to appear and furnish security or show cause why it should not be furnished. The property in the list was conditionally attached pending such showing of cause. In answer to the notice the defendant appeared and showed cause. The trial court held that the plaintiff failed to establish that the defendant had done any thing which came within the purview of Order XXXVIII, Rule 5 of the Code. Hence the application was rejected. In appeal against this order question of maintainability was raised.
In answer to the notice the defendant appeared and showed cause. The trial court held that the plaintiff failed to establish that the defendant had done any thing which came within the purview of Order XXXVIII, Rule 5 of the Code. Hence the application was rejected. In appeal against this order question of maintainability was raised. A Division Bench of this court observed : "When in response to a notice issued to the defendant under Order XXXVIII, Rule 5, Civil Procedure Code the defendant appears in court and shows cause why no order for furnishing security for costs should be passed against him and why no order should be passed directing the attachment of his property, the order of the Court accepting the contention of the defendant is an order which falls within Order XXXVIII, Rule 6 (2), Civil Procedure Code From such an order an appeal lies under Order XLIII Rule (1) (O), Civil Procedure Code We therefore hold that an appeal lies to this Court and we reject the preliminary objection." 15. In this case the court did not make any observation that the order of rejection of application under Order XXXVIII, Rule 5 of the Code will come under sub-rule (1) of Rule 6 only when a conditional order has been passed. 16. The second case of this court on the controversy is Om Prakash and others v. Mohd. Ishaq, AIR 1933 All 557 . In this case, a decree for sale of mortgaged property under Order XXXIV, Rules 4 and 5 of the Code had been passed in favour of the plaintiff-appellant. The plaintiff had moved an application under Rule 5 of Order XXXVIII of the Code for attachment before judgment on the allegation that the sale proceeds were likely to prove insufficient for the satisfaction of the mortgage money and the defendant was intending to sell his property. On these grounds, the Judge directed the defendant mortgagor to show cause or furnish security. No order for attachment was passed. The lower court passed one line order reading : "Let the mortgaged property be sold first. The application under Order XXXVIII, Rule 5 is premature." 17. The Division Bench of this court observed that the order of the trial court was extremely meagre. However, the intention of the trial court was to reject the application. An appeal had been filed against the aforesaid order.
The application under Order XXXVIII, Rule 5 is premature." 17. The Division Bench of this court observed that the order of the trial court was extremely meagre. However, the intention of the trial court was to reject the application. An appeal had been filed against the aforesaid order. A revision had been also filed by the plaintiff. These two were disposed of together. The Division Bench held that the impugned order does not come under sub-rule (2) of Rule 6 because no conditional attachment had been made in this case. On this ground, the preliminary objection of the respondent about the maintainability of the appeal was accepted. 18. The case of Om Prakash (supra) relied upon by learned counsel for the respondents the Division Bench has not considered the scope and extent of Rule 5 of Order XXXVIII of the Code and also of the latter part of sub-rule (2) of Rule 6 which reads : "Or make such order as it thinks fit." 19. It appears that the parties had not placed their arguments in detail about the scope of Rules 5 and 6 of Order XXXVIII of the Code before the Division Bench. On these facts, the case of Om Prakash (supra) is distinguishable. 20. Learned counsel for the respondents has also drawn our attention to Kedar Nath Himmatsinghs v. Tejpal Marwari, AIR 1935 Pat. 219 also. In this case following the observations of the Division Bench o this Court in Om Prakash's case (supra) and that of Mahendra Narain v. Gurudas Bairagi, AIR 1916 Cal. 287 : 22 Indian Cases 689, the Patna High Court held that, unless a conditional attachment had been made, an order rejecting an application for attachment before judgment is not appealable. We have already distinguished the cases of Om Prakash's and Mahendra Narain. Hence the Patna case does not support the arguments of learned counsel for the respondents. 21. The next case, on which reliance has been placed by learned counsel for the respondents is Rehello v. Firm Ladhasingh Bedi and sons, AIR 1944 Nagpur 30 . In this case also, a Division Bench of Nagpur High Court had held that where the court had not made any order of conditional attachment and after hearing the parties rejects the application under Rule 5 of Order XXXVIII of the Code, then no appeal lies.
In this case also, a Division Bench of Nagpur High Court had held that where the court had not made any order of conditional attachment and after hearing the parties rejects the application under Rule 5 of Order XXXVIII of the Code, then no appeal lies. It is a very short judgment, In this case, Rules 5 and 6 of the Code were not examined in detail and relying on the Patna case of 1935 the observations were made about maintainability of appeal. In this way, this case law also is of no help to the respondents. 22. Learned counsel for the respondents has also relied upon Hara Gobinda Das v. Bhur and Co., ILR 1955 (1) Cal 478. In this case also the Calcutta High Court relying upon the cases of Mahendra Narain (supra) and also that of Saurendra Nath Mitra v. Tam Balal Dasi, (1927) 31 Calcutta Weekly Notes 432, observed that where no conditional order of attachment had been made the order rejecting an application for attachment before judgment is not appealable. In this case too, Rules 5 and 6 were not examined in detail. In this case also, the court was considering the scope of appeal and revision against such an order. 23. Our attention was also drawn to a case in Union Bank of India v. Ms. Andhra Technocrat Industries, AIR 1982 A.P. 408 . In this case the Andhra Pradesh High Court had relied upon the cases cited above and considered by us and held that appeal was not maintainable. We have gone through this case quite carefully. In this case, it was not considered whether the court is competent to pass any order under Rule 5 after it has asked the defendant to show cause. We have noticed above that Rule 5 lays down the conditions, which must be satisfied, before asking the defendant to perform any of the acts namely either to show cause or to furnish security, etc. If the conditions are not fulfilled and the court is not satisfied that the defendant is intending to commit any act as enumerated in clauses (a) and (b) of sub-rule (1) of Order XXXVIII then it may refuse to issue any direction as contained in the latter part of sub-rule (1). Such an order will fall within Rule 5 and will be not subject to appeal.
Such an order will fall within Rule 5 and will be not subject to appeal. After issue of notice Rule 6 comes into play and the court has to pass order within its parameter. If the defendant appears and seeks an opportunity to contest the application then he dispenses with the issue of notice and undertakes to shows cause or furnish security, etc. Hence any order after filing of objection and hearing parties will fall under sub-rule (2) of Rule 6 of Order XXXVIII of the Code. Thus it is clear that upto the stage of Rule 5 the court has no occasion to consider the version of the defendant or to adjudicate on the merits of the application under Rule 5. The adjudication starts only when defendant either appears to show cause or fails to show cause after receipt of notice. Since no adjudication takes place at the state of Rule 5, the Legislature has rightly not provided any appeal against any order passed on presentation of application under Rule 5 of the Order XXXVIII. To say that unless a conditional order has been passed the order rejecting application tinder Rule 5 will not come under sub-rule (2) of Rule 6 will amount to adding a provision which is not contained in the very text of the rules. 24. In 1933 case this court did observe that where an application had been rejected after hearing the parties it comes within the provision of sub-rule (2) of Rule 6 of the Code. After a thredabare examination of the provision of Rules 5 and 6 of the Code we are of the opinion that Rule 5 is only procedural in nature as the heading appended to this rule indicates that it only enumerate circumstances under which the court may ask the defendant to furnish security for production of property, etc. All the orders after issuing of notice or affording an opportunity to the defendant to show cause and after hearing the parties will obviously falls under Rule 6 of Order XXXVIII of the Code. 25. For the reasons mentioned above we overrule the objection of the respondent that appeal is not maintainable. We held that the appeal is maintainable, let this case be now listed in the week commencing May 13, 1991 for hearing on admission.