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1996 DIGILAW 340 (DEL)

BELHOUSE ASSOCIATES PRIVATE LIMITED v. B M L MITTAL

1996-04-12

M.S.A.SIDDIQUI

body1996
M. S. A. SIDDIQUI ( 1 ) THE appeal lie in a short compass. The respondent-plaintiff filed the present suit for recovery of Rs. 1,24,000. 00 and along with the plaint, he also filed an application under Order 3 8 Rule 5 read with order 39 Rule 1 and 2 Civil Procedure Code for attachment before judgment of amounts due to the defendant and lying with the Chief Engineer Hydro Electric Project, Tankpur, District, Nainital (U. P. ). The defendant- appellant contested that application and inspite of such contest, the learned Trial Court directed the defendant to furnish security for due performance of decree likely to be passed and if the security was not furnished the amounts lying with the Chief Engineer at Tanakpur will remained attached under Order 38 Rule 5 Civil Procedure Code. This appeal is directed against the said order. ( 2 ) LEARNED counsel for the appellant contended that apart from the allegations that the defendant is winding up his work at Tanakpur site and is trying to dispose of the property and the machinery and is also trying to collect payment due from the Chief Engineer, Tanakpur with a view to defeat the plaintiffs claim, no attempt was made to substantiate before the Trial Court these allegations, and the learned Trial Court has not even adverted to the question as to whether these allegations require acceptance and hence the impugned order cannot be sustained. ( 3 ) A large measure of case law has grown around Order 38 Rule 5 Civil Procedure Code, its highlight being that the remedy under Order 38 Rule 5 Civil Procedure Code is an extraordinary remedy and the said provisions cannot be used as a lever for the plaintiff to coerce the defendant to come to terms. The court has, therefore, to act with utmost circumspection and with maximum care and caution before issuing an order under Order 38 Rule 5 Civil Procedure Code. Learned counsel for the petitioner placed before me Hari Shankar Vs. Smt Bhoori Devi 1975 (Vol. XI) D. L. T. 159. It is laid down in the said case as: "it goes without saying that the jurisdiction of courts in attaching property before judgment is of an extraordinary nature and has to be exercised sparingly and strictly in accordance with the procedure prescribed by the Code. Smt Bhoori Devi 1975 (Vol. XI) D. L. T. 159. It is laid down in the said case as: "it goes without saying that the jurisdiction of courts in attaching property before judgment is of an extraordinary nature and has to be exercised sparingly and strictly in accordance with the procedure prescribed by the Code. The court has to be satisfied on two points, namely (1) that the defendant is about to dispose of the whole or part of his property (emphasis added) and (2) that the disposal is with the intention of obstructing or delaying the execution of any decree that may be passed against him. There has to be definite evidence on these points and not merely vague allegations. An order of the court without proper investigation of the allegations constitute a grave dereliction of duty. The fact that the defendant is in uncertain circumstances and is in acute financial and embarrassment is a relevant circumstance but is not by itself sufficient. Again the fact that the plaintiff may have cope just claim against the defendant will not entitled him in law to have an order of attachment before judgment. At the same time before exercising jurisidiction under rule 5, the Court should satisfy itself of the practical certainty of the plaintiffs success and of the existence of a grave danger and of a real fear that a dishonest defendant, undoubtedly liable, is making away with the probable fruits of the judgment and for this purpose it is not sufficient to merely allege that defendant is likely to dispose of the property" ( 4 ) SIMILAR is the principle laid down in Bank of India Vs. M/s N. T. Work Industries, AIR 1989, Delhi 60. It lays down that an order under Order 38 Rule 5 Civil Procedure Code should not be passed, unless the court is satisfied that the defendant, with intent to obstruct or delay the execution of decree that may be passed against him, has brought himself within the terms of the rule, and it is not sufficient that there are merely vague allegations that the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court. Therefore, the most essential requirement of order 38 Rule 5 Civil Procedure Code is the subjective satisfaction of the Trial Court regarding requirements mentioned in the Rule. This satisfaction must be derived from material on record either by way of affidavit or otherwise; it cannot be whimsical nor could it be illusory and it should also be based on clear and convincing proof on enquiry that the order is needed for protection of the plaintiff s claim. ( 5 ) IT appears that in ordering attachment under Order 38 Rule 5 Civil Procedure Code, the learned Trial Court was primary influnced by the atitude of the defendant. The learned Trial Court has observed in para No. 3 of the impugned order as under : "during the arguments, this fact has not been denied that defendant is leaving the place of business at Delhi. It is admitted that the defendant that the business is being shifted from Delhi to Tankpur and even from tankpur to some other place. Ample oppt. was given to the defendant to furnish security for due performance of the decree likely to be passed. The defendant has refused to famish security but only prepared to give an undertaking and nothing more. I am not convinced with the attitude ofthe defendant. The defendant has not given any categorical fact in the affidavit attached with reply to order 38 R 5 application. If the affidavit ofthe plaintiff is wrong due to nondisclosure of facts under which the plaintiff seeks relief of Order 38 R. 5, similar is the case with the defendant under which the defendant denies its liability. In the affidavit filed by the defendant it has not been stated that it is not leaving the place ofbusiness or that there is no apprehension ofthe defendant to avoid the liability under the decree likely to be passed in the Suit. All the arguments, and the steps taken by the deft. So far, have not. been directed as to how the decree will be satisfied by the defendant in case the case goes against the defendant. Only stress was the plaintiff has no right to ask for attachment of any amount lying with the said chief engineer. I am not convinced with the arguments of the defendant. " ( 6 ) IN my opinion the entire approach to the question by the Trial Court is erroneous. Only stress was the plaintiff has no right to ask for attachment of any amount lying with the said chief engineer. I am not convinced with the arguments of the defendant. " ( 6 ) IN my opinion the entire approach to the question by the Trial Court is erroneous. The question of resonability or justifiablity of apprehension in the mind ofthe plaintiff regarding the fact that his dues might remain unpaid or his justifiablity of his being nervous about their recovery are not factors which should weigh in ordering attachment before judgment under Order 38 Rule 5 Civil Procedure Code. The sufficiency of grounds will have to be determined with reference to the mandatory requirements under Order 3 8 Rule 5 Civil Procedure Code. On a careful perusal of para No. 3 ofthe impugned order, it appears that the affidavit filed by the respondent in support of the application under Order 38 Rule 3 Civil Procedure Code does not meet the requirements of Order 38 Rule 5 Civil Procedure Code. Mere mention ofthe apprehension in the application or in the affidavit is not sufficient to establish that the defendant was intending to dispose ofthe property with a view to obstruct or delay the execution ofthe decree that may be passed against him. ( 7 ) AS stated earlier the affidavit filed by the plaintiff does not meet the mandatory requirements of Order 38 Rule 5 Civil Procedure Code. There is hardly any material worth the name to establish that the defendant was about to dispose ofthe whole or part of his property from the local limits of jurisdiction ofthe Trial Court with intent to obstruct or delay the execution of am decree that may be passed against him. I do not find that the requisite satisfaction has been expressed in the impugned order. Bare allegations, as stated above, would not suffice the purpose. In this view, I find that the impugned order cannot be sustained and it requires quashing in the appellate jurisdiction. ( 8 ) IN the result the appeal is allowed and the impugned order dated 5-5-1994 is set aside. The parties are, however, left to bear their own costs in the present appeal. Parties are directed to appear before the lower court on 30-4-1996.