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1994 DIGILAW 210 (GUJ)

SEA HAWK CARGO CARRIERS PRIVATE LIMITED v. J. H. PARABIA (TRANSPORT) PRIVATE LIMITED.

1994-07-22

S.D.SHAH

body1994
SHAH, J. ( 1 ) RULE. Mr. S. D. Patel and Mr. Mahendra Vyas appear and waive service of rule on behalf of respondents. With the consent of learned Counsels for the parties matter is heard and decided finally today. ( 2 ) THIS revision application is directed against the ex parte order passed by the learned Civil Judge (S. D.), Baroda dated 26-4-1994 and 19-5-1994 in Spl. Civil Suit No. 71 of 1994. By application at Exh. 5 filed under O. 38 Rule 5 of c. P. Code against petitioner-defendant the plaintiff in para 15 prayed for following reliefs :" (A) That the Honble Court will be pleased to direct the defendant to furnish security for Rs. 16 lacs (Rs. 16,00,000/-) and to produce and place the said amount at the disposal of the Court when required and be pleased to attach before judgment the property described in para (12) of the application. (b) And further be pleased to direct M/s. Marubeni Corpn. Project Office : c/o Asea Brown Boveri Ltd. , Som Datt Chamber-1, 5, Bhikaji Cama Place, New delhi 110 006, a company which has a substantial amount payable to the defendant to pay into the Court an amount of Rs. 16,00,000. 00 (Rupees Sixteen Lacs only) from the amount payable now or becoming payable in future to the defendants towards and in respect of the work executed by the defendant for the contract of power Station at Godhra/jhanor, Dist. Bharuch". ( 3 ) ON 26-4-1994 the learned trial Judge, when moved for ex parte order, passed following order :"the defendant is directed to furnish the security of Rs. 16 lacs as per the suit claim, meanwhile as per clause 15 (b) Company is directed as per para 15 (b) upto 16-5-1994". ( 4 ) FROM the aforequoted para 15 (b) of the prayer clause in the application at exh. 5 it becomes clear that same is in the nature of a garnishee order against m/s Marubeni Corpn.-a foreign party who was presumably indebted to the petitionerdefendant. This party was not party-defendant in the suit. The plaintiff has no claim against such third party nor did it claim any privity of contract between itself and the third party. 5 it becomes clear that same is in the nature of a garnishee order against m/s Marubeni Corpn.-a foreign party who was presumably indebted to the petitionerdefendant. This party was not party-defendant in the suit. The plaintiff has no claim against such third party nor did it claim any privity of contract between itself and the third party. However, on a bare statement or averment made in the application that third party was liable to pay substantial amount to the defendant, without verification of such claim and in absence of any documentary evidence worth its name, the trial Court passed aforesaid order calling upon the third party to pay in Court amount of Rs. 16,00,000. 00 on or before 16-5-1994. In a suit for recovery of money allegedly due and payable by defendant which defendant has nowhere admitted, trial Court surprisingly proceeded to pass ex parte order which was not only more than a decree but which required a foreign third party to deposit in Indian Court money in Indian currency. In so doing, trial Court threw overboard all provisions of Code of Civil Procedure, all canons of fair play and justice, all limitations on its territorial and subject-matterwise jurisdiction and unfortunately exhibited unholy haste, totally unwarranted, uncalled for in the facts and circumstances of the case. ( 5 ) THE aforequoted order of trial Court was communicated to third party- marubeni Corpn. by registered post by plaintiff. On 18-5-1994 the plaintiff by another application moved the trial Court that third party has by that time not complied with its order and therefore third party - Marubeni Corpn. should be directed to file a statement of account of its dealings with the defendant-company. On 19-5-1994 once again the trial Court even after noticing that no notice was served on the third party till then, proceeded to pass still unusual and uncalled for order against the third party as under : "the party to reply or comply. " in its over-zeal to do justice (to whom ?) it totally forgot to notice that such party was not a party to the suit, plaintiff does not have any right whatsoever against such party, nor does any privity of contract exist between the plaintiff and the third party; third party was a foreign party over which it has not territorial jurisdiction and lastly the defendant has not admitted the claim of the plaintiff. The second order passed by the Court being patently and manifestly without jurisdiction and having tendency to adversely affect the commercial relations which a litigant may have with foreign dealer or trader, prompted the defendant to approach this Court under Sec. 115 of C. P. Code. Ordinarily, this Court would relegate such party to move the trial Court for vacating such order. However, facts were so gross and order so patently and manifestly without jurisdiction and adverse to the interest of the third party that this Court regarded this case as one of those few rarest of rare cases where the Court would exercise its jurisdiction even against ex parte order. ( 6 ) IT appears that the respondent-plaintiff has supplied its heavy cranes to the petitioner-defendant and the dispute between the parties relates to hire charges. The main dispute that has arisen between the parties is as regards terms and conditions of the contract, namely, whether the hire charges were to be paid for actual user of the cranes on per day basis, or as to whether they had to be paid on monthly basis. The fact that the cranes are supplied by the plaintiff to the defendant and that they are used by the defendant is also not in dispute. According to petitionerdefendant the payment was to be made on the basis of actual user per day and the total working days for which the cranes were used by the petitioner-defendant would work out to 1. 5 months and 34 days for 7 tonne truck mounted crane. According to petitioner-defendant said liability would work in the vicinity of Rs. 5,95,580. On the other hand the case of the respondent-plaintiff is that the hire charges were to be charged on monthly basis and that liability would work out in the vicinity of Rs. 13 lacs. ( 7 ) IN these petitions, the legality and validity of the order passed by the trial court on 26-4-1994 and subsequent order, dated 19-5-1994 is under challenge. It was the case of the petitioner-defendant that no part of cause of action has arisen within the jurisdiction of the Court at Baroda and that with a view to compel the petitioner-defendant to submit to the illegal demands of the respondent-plaintiff, the suit was filed by incorporating incorrect facts in the plaint which would bring suit within the jurisdiction of the Court at Baroda. It was submitted before this court that there was no material worth the name before the trial Court to come to the conclusion that the petitioner-defendant was about to dispose of its properties in such a manner so as to defeat the claim of the respondent-plaintiff. It was further submitted before this Court that none of the ingredients of O. 38 R. 5 c. P. Code for passing the ex parte order of this nature was satisfied. The learned counsel for the petitioner further submitted that assuming that the trial Court could have legitimately called upon defendant to furnish security for the whole or part of the suit claim, it was not at all justified in passing a garnishee order against foreign third party at this stage of suit to deposit in Court amount of Rs. 16 lacs. Unless the claim of plaintiff is admitted by defendant and third partys liability to the defendant is also admitted, order of this nature is never passed. ( 8 ) SINCE this Court was prima facie satisfied at the admissional stage about the submission made at the Bar while entertaining objection against ex parte-interim order this Court imposed condition on the petitioner-defendant to deposit amount of Rs. 6 lacs in this Court. This condition was imposed because it was stated by the learned Advocate for petitioner-defendant that even admitted liability for the charges would not exceed Rs. 6 lacs, and therefore, with a view to seeing that atleast amount of admitted liability is secured this Court imposed condition of deposit of Rs. 6 lacs in this Court. ( 9 ) ATTACHMENT before judgment is an extraordinary remedy and the Court should grant the same with utmost care and caution. Such an order cannot be made on the mere asking of the plaintiff. Before making the order the Court must be satisfied not only that the defendant is really about to dispose of his property or about to remove it with intent to obstruct or delay the execution of any decree that may be passed. The satisfaction must be of the Court as regard these matters and it must be based on some material derived either from the affidavit of the party applying under o. 38 R. 5 or otherwise. The satisfaction must be of the Court as regard these matters and it must be based on some material derived either from the affidavit of the party applying under o. 38 R. 5 or otherwise. A bald assertion in the application that defendant is trying to dispose of or remove its property unsupported by any evidence whatsoever may not justify invocation of power of attachment before judgment. Even when such power is exercised Court has to issue direction directing security to be furnished for the sum specified or calling upon the party to show why security should not be furnished. Order directing the defendant to deposit the amount equivalent to suit claim is ordinarily never passed at interim stage. The Court acting under O. 38 R. 5 of C. P. Code is ordinarily not justified in directing a third party whose liability to defendant is not admitted, to deposit in Court the amount due to the plaintiff from the defendant. Such order is contemplated only in execution of decree under o. 21 R. 46 of C. P. Code. In a proceeding for ex parte order where defendant is called upon to furnish security for an amount of Rs. 16 lacs the simultaneous order requiring a debtor of defendant to deposit equivalent amount in Court, to say the least, surpasses all canons of judicial propriety and is manifestly perverse and without jurisdiction. The order of the trial Court against Marubeni Corporation being manifestly without jurisdiction is hereby quashed and set aside. ( 10 ) IN my opinion, interest of justice would meet if the order passed by the trial Court is modifed and substituted by the directions which this Court ultimately intends to issue. In the matter of this nature, ordinarily, the anxiety of the Court should be to see that the party-defendant does not defeat the claim of the plaintiff, and that in case the plaintiff succeeds in the suit, sufficient property is left at the disposal of the Court so that the claim of the plaintiff could be satisfied. In proceedings of this nature, ex parte garnishee order is never passed and the trial court was not well advised in passing such order so as to compel the partydefendant to submit to the demands of the plaintiff. In proceedings of this nature, ex parte garnishee order is never passed and the trial court was not well advised in passing such order so as to compel the partydefendant to submit to the demands of the plaintiff. ( 11 ) IN the result, while disposing this revision application and while substituting the order of the trial Court by direction which this Court is going to issue hereafter this revision application is partially allowed to the following extent : (I) The judgment and order of the trial Court is substituted by direction that the amount which is deposited by the petitioner-company in this Court shall be treated as deposit in the trial Court and the Registry of this Court is directed to send to the trial Court, i. e. , the Court of Civil Judge (S. D.), Baroda the aforesaid amount. On receipt of said amount the trial Court is directed to invest the same in FDRs for a period of one year in any nationalised bank. The said amount of Rs. 6 lacs shall ultimately abide by the direction which the trial Court shall issue after hearing the parties on application for temporary injunction. (ii) The petitioner shall furnish security to the satisfaction of the trial Court for further amount of Rs. 3 lacs. (iii) The petitioner shall file reply to the application for temporary injunction as well as written statement to the plaint within a period of three weeks from today failing which it shall be open to the trial Court to proceed ex parte in the matter. It shall be open to the petitioner to raise any claim by way of counter-claim while filing written statement and the trial Court shall decide the same in accordance with law. (iv) The trial Court shall raise issue about its territorial jurisdiction and decide the same as preliminary issue while deciding the suit and shall decide the same incidentally while dealing the application for temporary relief. (v) The Registrar of this Court is directed to send the amount of Rs. 6 lacs deposited in this Court by the petitioner-defendant to the Court of Civil Judge (S. D.), Baroda immediately. Subject to aforesaid directions this revision application stands disposed of and the rule is made partially absolute to the aforesaid extent. No costs. (v) The Registrar of this Court is directed to send the amount of Rs. 6 lacs deposited in this Court by the petitioner-defendant to the Court of Civil Judge (S. D.), Baroda immediately. Subject to aforesaid directions this revision application stands disposed of and the rule is made partially absolute to the aforesaid extent. No costs. The Registrar of this Court is directed to send down the copy of this judgment to the concerned trial Court with direction to study the judgment and follow the observations made therein in future. .