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1992 DIGILAW 231 (MAD)

Uco Bank, Madras v. Sukra Shoe Fabric and Others

1992-04-29

ARUMUGHAM

body1992
Judgment :- The Order of the Court was as follows : This is an application filed by the applicant / plaintiff under O.14, R. 8 of the Original Side Rules read with O. 38, R. 5 of the Code of Civil Procedure, seeking the relief of attachment before judgment of the immovable properties more fully described in the judge's summons till the disposal of the suit. 2. The facts in brief as culled out form the affidavit filed in support of the application are as follows : On granting the various agreed facilities to the first respondent herein in running a shoe fabric company, the first respondent was highly irregular and the terms and conditions of the credit facilities extended to him, were not adhered and because of the huge outstanding, the present suit was filed for the recovery of a sum of Rs. 66, 06, 376. 85 and that since the plant 'A' schedule immovable properties have been charged in favour of the applicant by way of creating an equitable mortgage and that the plaint 'B' schedule movables have been hypothecated, the applicant is entitled to proceed with the same in accordance with the same after getting the decree in the suit and collected the same with interest at the contractual rate and cost as agreed upon. While that being so, it was further averred in paras 5 and 6 of the affidavit that since the security offered by the defendants by way of equitable mortgage and hypothecation were found inadequate for raising of the credit facilities as demanded by the defendants 2 and 3 as partners of the first defendant / first respondent offered to give the properties more fully described in the Judge's summons as additional security in favour of the applicant not only for the present suit claimed, but also for the amount the from another sister concern, viz., 1 M / s. R.S. Creations of which the second and 3rd respondents are the only partners and that since the first respondent acquired the said properties under a Deed of Partition dated 2-9-1988 which has been the subject matter of the enquiry before the Sub-Registrar of Assurances, Dindigul, they had deposited a photostat copy of the said deed on 1-6-1989 with the applicant and thereby created an equitable mortgage over the said properties for the suit claim as well as the security for M / s. R. S. Creations with the promise that they would deposit the original Partition Deed after the enquiry was over. But since payment of heavy stamp duty was involved, the document was not given and it was stated by the applicant that in the absence of the original document, no equitable mortgage would be created in favour of the applicant with the photostat copy and hence the respondents were advised to give the original document as security and the Sub-Registrar was also requested to send the original document to the plaintiff as soon as it is registered. As the document has not been registered, and since the respondents are in possession of the properties covered under the said document dated 2-9-1988 and there is no equitable mortgage, the present application is filed to seek the order of attachment of the said properties since the respondents are making hurried attempts to alienate and encumber the same at the behest of the respondents herein as was expressed by the second respondent over phone, and that in such event, if no interim order is passed, the applicant will be put to very serious prejudice and loss. Upon the above pleadings, the applicant wants the order of attachment of the property more fully described in the judge's summons, as prayed for. 3. Upon the above pleadings, the applicant wants the order of attachment of the property more fully described in the judge's summons, as prayed for. 3. This application was resisted by filing a counter-affidavit filed on behalf of the respondents- 1 to 3 in which, it is contended inter alia that the properties sought to be attached in the application is not at all belonged to the 4th defendant or 5th defendant, nor to any of these respondents and that it belongs to a firm, R. S. and Sons, a finished leather tannery which is not a party to the suit and that as such, it cannot be attached before the judgment and that on this ground alone, the application is to be rejected. 4. There was a partition arrangement entered into by this defendant with R. S. and Sons, a finished leather tannery to get the increased packing credit facilities, but the documents could not be registered as it involved in heavy stamp duty and also production of income-tax and clearance certificate and the first respondent could not finalise and the document was returned and with the copy of the said registration deed, the applicant bank is claiming extraordinary reliefs, that the copy of the said document has a not been given to the applicant for the purpose of creating an equitable mortgage or as a security, but since the documents could not be completed, no transferable right has been acquired by this respondent from the said property in question and that unless and until the said deed of partnership is validly registered in law, the first respondent cannot be deemed to be the owner of the same and that again it was contended that since no additional credit facility was granted by the applicant / plaintiff, the question of finding the immovable properties as detailed in the Judge's summons for raising of credit facility does not arise and that it was made clear that the applicant bank not only caused the respondent's business virtually to become standstill, but also harass under the guise of this application itself is the outcome of annoyance, hardship and mental agony caused to these respondents and that therefore, upon the above grounds, the respondents pray that the petition is to be rejected in limine. 5. 5. Upon the above pleadings, the question now arises for consideration is, "Whether the applicant / plaintiff has made out a prima facie case against the respondents warranting the indulgence of this Court to pass the order of attachment of the immovable properties mentioned in the Judge's summons before judgment as prayed for? 6. POINT : Admittedly, the suit has been filed by the applicant / plaintiff against the respondents 1 to 3 and two others for the recovery of the sum of Rs. 66, 06, 376.85 and so on the basis of the equitable mortgage and hypothecation and that the suit is pending adjudication with regard to the property covered under the equitable mortgage referred to in Item 'A' of the plaint schedule and hypothecation referred to in Schedule 'B' to the plaint is concerned. There is no dispute as the same belongs to the first respondent in which the respondents 2 and 3 are partners of the first respondent, a partnership firm. It is the common case of both the parties that the availing of various credit facilities from the applicant bank by the respondents 1 to 3 by giving security of equitable mortgage and hypothecation and the consequent failure of discharging the said loan by the respondents resulted in the filing of the said application by the applicant against them and that in which the liability of the respondents is yet to be identified. It was the case of the applicant that since the respondents 1 to 3 acquired the right over the suit properties in question by means of a Deed of Partition dated 2-9-1988 and that since a photostat copy of the same was deposited with the applicant on 1-6-1989 with a view to create additional security not only for the suit loan, but also for the amount due from the said 5th respondent and that in view of the said document is under enquiry by the registration authorities for want of the production of the income-tax certificate as well as the payment of heavy stamp duty, the claim of the applicant seems to be that they are having a lien or charge over the suit property in question even though the said partition has not been registered and that since the respondents are making hectic attempts to alienate and encumber the same and with a view to avoid the further loss and damage to the applicant, they pray for an order of attachment before judgment. 7. Then, even admittedly, the Partition Deed dated 2-9-1988, entered into among the respondents herein has not been registered for want of payment of heavy stamp duty and the production of the income-tax certificate and the said documents were returned as unregistered. It is not the case of the respective parties herein that even after the refusal of the registration of the document, the said document has been registered, so as to make the first and second respondents to acquire the rights and interests over the immovable properties in question. The claim of the respondents is that the said Partition Deed was refused and returned as unregistered for want of payment of the stamp duty as well as the production of the income-tax certificate, as contemplated by law. Therefore, the said partition deed dated 2-9-1988 remains unregistered and in law, it cannot be deemed to be a valid document and that so much so, respondents 1 to 3 do not acquire any right over the said immovable properties in question. Therefore, the said partition deed dated 2-9-1988 remains unregistered and in law, it cannot be deemed to be a valid document and that so much so, respondents 1 to 3 do not acquire any right over the said immovable properties in question. It is the settled principle of law that inasmuch as an instrument of transfer of Partition Deed which is required to be registered in law is refused to be registered and consequently, it is deemed as an invalid document and no title or interest through the said document has passed over to the transferee and that, therefore, applying the said legal norm to the instant case, the respondents 1 to 3 cannot be deemed as the owners of the property specified in the Judge's summons much less they are having no interest or right over the same:. 8. It is the admitted case that the immovable property in question does not belong to the respondents 1 to 3, but owned by M / s. R. S. Creations and the respondents 2 and 3 are the partners of the first respondent, but in legal parlance, they are deemed as separate entities and that so much so, in the light of the admitted aspects, the respondents 1 to 3, against whom the suit claim is brought, are not having any subsisting right over the same. They cannot be deemed as the owners and that, therefore, the said property does not belong to the respondents 1 to 3. The respondents 2 and 3 are the partners of another firm. R. S. Creations, a sister concern of the respondents 1 to 3. But that does not mean that the suit properties have been offered as security for the credit facilities created in favour of the applicant. 9. Except a mere allegation that the properties in question though owned by the respondents 4 and 5 in which the respondents 2 and 3 are the partners and even so, the respondents had offered the same as the security for the enhancement of the credit facilities to be granted in favour of the respondents, there is absolutely no semblance of evidence available in this case. As was rightly contended by the respondents that no additional credit facilities were sanctioned in favour of the respondents 1 to 3 as requested by them, the letter claimed to have been addressed by the second respondent on 4-1-1990 in the letter-head of M / s. R. S. Creations to the applicant covered under Ex. A.1 will not improve the applicant's case in any manner as warranted by law. Likewise, Ex. A.2, the explanation letter given by the second respondent dated 1-6-1989 addressed to the applicant-bank also fortifies the contentions of the respondents. In fact, the above photostat copy of the two letters will not improve the applicant's case in any manner. I have carefully perused the affidavit filed in support of the petition by the applicant and the copies of the documents covered under Exs.A.1 and A.2 Thiru V. Sridevan, the learned senior counsel appearing for the applicant vehemently argued before me that inasmuch as the respondents have agreed to produce the said Partition Deed dated 21-9-l988 after its completion by way of registration for the enhancement of the additional credit facility to the respondents 1 to 3 and that the said registration has been refused, but in the context of the respondents 1 to 3 are in actual possession of the suit property, it is to be deemed that the respondents have right and interest over the property in question and that, therefore, the order of attachment before judgment can safely be granted in favour of the applicant. But the learned counsel frankly concedes that inasmuch as the registration of the said document is refused and consequently the document is returned, then it may not have the legal sanctity with references to any title or interest over the suit properties in favour of the applicants 1 to 3. In view of the specific provision of the Registration Act as well as the Transfer of Property Act which would mean that the said document is not a valid one and that there is no right or interest in favour of the respondents 1 to 3 herein. 10. In view of the specific provision of the Registration Act as well as the Transfer of Property Act which would mean that the said document is not a valid one and that there is no right or interest in favour of the respondents 1 to 3 herein. 10. Per contra, Thiru B. T. Seshadri, the learned counsel appearing for the respondents strongly and justifiably contends that inasmuch as the document submitted for registration was refused for want of production of the income-tax clearance certificate and payment of the stamp duty to complete the transaction it is clear that the said document is not valid in law which would virtually mean that no transfer of right or interest can be effected and that therefore, the respondents 1 to 3 are not the owners of the same and that apart, since the production of the original document with a view to enhance the credit facilities, has been refused by the applicant wantonly, the question of producing the said document does not arise in this case and that apart, since the affidavit filed by the applicant does not contain any adequacy of materials warranting the indulgence of this Court under Order 38, Rule 5 of Civil Procedure Code, the present application is to be rejudicated. 11. I have carefully perused the averments made in the affidavit filed in support of the application and as was pointed out, it does not contain any materials warranting the indulgence of this Court specifically provided by law in Rule 5 of Order 38 of Civil Procedure Code. This Court is already of the view that the remedy of attachment before judgment of an immovable property is certainly an extraordinary one and that to grant the same, casts an obligation on the party against whom it is made even before he is heard in defence to the suit and that therefore, the Court has to act with utmost circumspection and with maximum care and caution in order to avoid the said remedy being a weapon of oppression in the hands of unscrupulous applicants claiming the relief under Order 38, Rule 5 of Civil Procedure Code and as such it is incumbent upon the applicants to state the grounds to prove the same on the basis of its contents by giving the material particulars and sources of information, belief and so on. A mere verbatim copy of the Order 38, Rule 5 of Civil Procedure Code or a mechanical repetition of the language of the Code without an iota or substratum of truth, underlying the allegation, amounts to merely a colourable imitation and constitute an abuse of process of Court. Admittedly, the applicant had already the equitable mortgage and hypothecation created by the respondents 1 to 3 in his favour. It is not known whether they are entitled to recover the suit claim or not, but significant at this stage is to note that the application is seeking the relief of attachment before judgment of the property which does not belong to the respondents 1 to 3 herein, on the basis of the mere alleged oral claim. On perusing the very averments made in the affidavit, I am totally unable to accept the said averments for any purpose and it would be worth noticing at this stage that the applicant had not even inclined to get anything in writing evidencing the alleged production of the Partition Deed, but the applicant wants the relief of extraordinary remedy provided under the Code of Civil Procedure, on the basis of the mere conjectures and imaginations which no Court of Law would be inclined to accept the same. 12. The learned counsel Thiru B. T. Seshadri, has relied upon the following case laws in support of his contention which are as follows :- (1) V. K. Nataraja Gounder v. Bangaru Reddiar, 1965 AIR(Madras) 212; and (2) T. Srinivasan v. V. Srinivasan, 1985 AIR(Madras) 269. In the subsequent referred case law; this Court has held as follows (Para 4 of 1985 AIR(Madras) 269) :- "A mechanical adaptation of the language of the relevant provision of the Civil Procedure Code, hereinafter referred to as the Code, namely, Order XXXVIII, Rule 5 thereof would not suffice the purpose. There must be positive and definite material on the two points set out in Order XXXVIII, Rule 5 of the Code, namely (1) that the defendant is about to dispose of the whole or part of his property, and (2) that the disposal is with the intention of obstructing or delaying the execution of any decree that may be passed against him. An attachment before judgment is not a process to be adopted as a matter of course. An attachment before judgment is not a process to be adopted as a matter of course. The suit is yet to be tried and the defence of the defendant is yet to be tested. The plaintiff only stands a prima facie chance of success in the suit. At this nebulous juncture, an extraordinary relief is being sought for by the plaintiff. This relief could be granted only if the conditions for its grant, as per the provisions of the Code, stand satisfied. This process is never meant as a lever for the plaintiff to coerce the defendant to come to terms. Hence utmost caution and circumspection should guide the Court. The Court must advert to the provisions of the Code in this regard, advert to and investigate the allegations thrown against the defendant, satisfy itself that a case for attachment before judgment has been made out and then pass the requisite order. These principles have come to be recognised as mandates to the Court and if the Courts act in breach thereof, such an order of the Court will have to be ignored as the result of dereliction of duty." 13. No case law was referred to by the learned counsel appearing for the applicant countering the abovesaid legal positions cited by Thiru B. T. Seshadri, appearing for the respondents. No other points were argued to counter the arguments advanced on behalf of the respondents. 14. In the light of the above legal norms clearly laid down, it was repeatedly held by this Court that in cases of inadequacy of the grounds brought to in the above application and having considered the admitted factual aspects of the present case, I am fully satisfied to hold that the applicant has miserably failed to establish the semblance of prima facie case even in seeking the relief as provided under Order 38, Rule 5 of Civil Procedure Code against the respondents. None of my observations made herein will have any impact over the rights of the respective parties herein to be agitated during the trial and if so advised, the parties can have the expeditious remedy by advancing the trial of the suit itself to get their reliefs identified on the basis of the tendered oral and documentary evidence. 15. In the result, the application must fail and accordingly, it is dismissed. 15. In the result, the application must fail and accordingly, it is dismissed. Interim order, if any, passed by this Court is hereby cancelled forthwith. No order as to costs, under the circumstances. Application dismissed.