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1997 DIGILAW 1531 (MAD)

Farook Textiles, rep. by its partner S. K. M. Razeena Begum v. Bajran Sinthetics Pvt. Ltd. , by its Managing Director, 102. Govindappa Naicken St. , New Cloth Market, II Floor

1997-12-19

S.JAGADEESAN

body1997
Judgment : 1. The defendant in O.S. No. 4605 of 1997 on the file of the 6th Assistant Judge, City Civil Court, Madras has filed this revision against the order dated 110. 1997 in I.A.No.11865 of 1997 wherein an order of attachment was made. The main grievance of the petitioner is that the respondent has not made out any case for an order under Or.38, R.5 of Civil Procedure Code. There is absolutely no averment as required under Or.38 R.5 CPC. The argument of the learned counsel for the petitioner is that the lower court has passed an order of attachment without assigning any reason. 2. The learned counsel for the respondent contended that in view of the attitude taken by the petitioner and inview of certain admissions the court below has passed an order of attachment and the interest of the respondent has to be taken care of in case he succeeds in the suit. In order to consider the rival contentions of the counsel first of all I shall refer to the averments made in the affidavit filed in support of the application in I.A.No.l 1865 of 1997. It is stated that the defendants are now heavily involved in debts and not in a position to meet their commitments and that is why they are now to trying defraud the plaintiff. The plaintiff further understand and believe the same to be true that with the intention to defeat and delay the execution of the decree that may be passed in the suit, the defendants are trying to secrete all the assets namely all the stocks in the business place and if they do so the plaintiff will be put to irreparable loss and damage and the plaintiff will not be able to recover any money as the defendants does not possess any immovable property. Only on the basis of the above averment the attachment before judgment is sought for. 3. Only on the basis of the above averment the attachment before judgment is sought for. 3. Order 38 rule 5 CPC is as follows:- " 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. In the affidavit filed in support of the application the plaintiffs have not stated that the defendants are about to dispose of the whole or any part of their property or they are about to remove the whole or any part of the property from the local limit of the jurisdiction of the lower court. What all stated is that the defendants are trying to secrete the assets. In the judgment reported in T. Srinivasan and Anr v. V.S. Srinivasan, AIR 1985 Mad. 269 this Court has laid down that the application under Or.38, R.5 for attachment before the judgment cannot be allowed as a matter of course, and that the relief could be granted only if conditions set out in Rule 5 are satisfied. It is further stated that the said provision is not to be used as a lever for the plaintiff to coerce the defendant to come to terms. It is further stated that the said provision is not to be used as a lever for the plaintiff to coerce the defendant to come to terms. In paragraph 4 it has been held as follows:- A mechanical adaptation of the language of the relevant provision of the Civil P.C. hereinafter referred to as the Code, namely, 0.28, R.5 thereof would noi suffice the purpose. There must be positive and definite material on the two points set out in 0.28, R.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. The suit is yet to be tested. The plaintiff only stands a prima facie chance of success in the suit. At this nebulous juncture, and 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. In an earlier judgment of this Court reported in Nataraja v. Bangaru, AIR 1965 Mad. 213 the same principle has been laid down. In an earlier judgment of this Court reported in Nataraja v. Bangaru, AIR 1965 Mad. 213 the same principle has been laid down. The essential requirements which must be proved to the satisfaction of the Court are: (1) the defendant is about to dispose of the whole or any part of his property; or (2) the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court, and (3) that the defendant is intending to do so to cause obstruction or delay in the execution of any decree that may be passed against him. Vague and general allegations that the defendant is about to dispose of the property or remove it beyond the jurisdiction of the Court unsupported by particulars, would not be sufficient compliance with the rule. It is incumbent upon the plaintiff to state the grounds on which he entertains the belief or apprehension that the defendant would dispose of or remove the property, or, to give the source of his information and belief in the matter." 5. In yet another judgment reported in Tatanagar Transport Corporation and other v. M/s. Arjanta Enterprises and Another, AIR 1987 Ori. 107 it has been held as follows:- "As the language of the provision discloses, the power can be exercised on satisfaction of the pre-conditions. Order for attachment before adjudication of a claim or calling for security is not a common feature in a litigation. In exceptional circumstances only the drastic action can be taken to safeguard the interest of the plaintiff. Therefore, the first legislative guideline in that the intention of the defendant must be to obstruct or delay the execution of any decree. Where the effect of some circumstances would lead to delay in execution of a decree or obstruction to it without the intention for the same the power is not available to be exercised. Therefore, the actions of the defendant are to be of voluntary nature from which legitimate inference of the intention to obstruct or delay the execution can be drawn. The second legislative guideline is that with the said intention the defendant is about to dispose of or remove from the jurisdiction of the Court whole or part of his property. Thus, it is clear that both the pre-conditions must be satisfied. The second legislative guideline is that with the said intention the defendant is about to dispose of or remove from the jurisdiction of the Court whole or part of his property. Thus, it is clear that both the pre-conditions must be satisfied. For the purpose of exercise of power under 0.38, R.5, C.P.C. court is to examine:- (i) What property is about to be disposed of or removed? (ii) Whether the same is the property of the defendant? (iii) Whether it is the whole or part of the defendant? (iv) What is the intention of the defendant? Even if all the points are answered in favour of the plaintiff, the court is not bound to exercise the power if it finds that the same may not factually have the effect of obstructing or delaying the execution of the decree." In the decision reported in Palghar Rolling Mills Pvt.Ltd., v. Visveswaraya Iron and Steels Ltd., and another, AIR 1985 Kar.282 it has been held as follows:- "The mandatory essentials of 0.38, R.5 are: (i) the Court must be 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, (ii) is about to dispose of the whole or any part of his property, or (iii) is about to remove the whole or any part of the property from the local limits of the jurisdiction of the Court. Therefore the most essential requirement of Order 38, R.5 is the subjective satisfaction of the Court regarding the requirements mentioned above. Order 38, R.5 in my opinion is a mandatory provision demanding of the Court to satisfy itself first that the defendant is intending to obstruct or delay the execution of the decree that may be passed against him. Therefore the most essential requirement of Order 38, R.5 is the subjective satisfaction of the Court regarding the requirements mentioned above. Order 38, R.5 in my opinion is a mandatory provision demanding of the Court to satisfy itself first that the defendant is intending to obstruct or delay the execution of the decree that may be passed against him. If the order passed by the Court does not speak or show that the Court has applied its mind to the requirements of Order 38, R.5, CPC or if the order passed by the Court below does not show clearly that it has considered the materials on record, or if the order does not show that the Court is satisfied that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of the whole or any part of the property, the order would be in violation of Order 38, R.5, CPC. Order 38, R.5 as it stood before the amendment in 1976, would have at the most rendered such order irregular. But, now sub-rule (4) inserted by S.85(l) of the Act 104 of 1976 reads that if an order of attachment is made without complying with provisions of sub-rule(l) of R.5 of 0.38 such attachment shall be void, Sub-rule (4) has been inserted with a view to see that the courts do not pass such an extraordinary order in a cavalier manner and without satisfying themselves about the requirements of Order 38, R.5." In an unreported judgment in OSA 310 of 1996 a Division Bench of this Court consisting of Shivaraj patil and Dinakaran JJ., has held as follows:- "Having regard to the language of Order 38, Rule 5, the affidavit filed by the plaintiff in support of O.S.No.4358 of 1996, and the materials placed on record and in the light of the decisions aforementioned, we have no hesitation to say that the plaintiff did not satisfy the requirements of Order 38 Rule 5 so as to entitle it for a prohibitory order." 6. On the above said principles of law it is clear that unless the requirements of Order 38, Rule 5 is complied with, an order of attachment cannot be made. On the above said principles of law it is clear that unless the requirements of Order 38, Rule 5 is complied with, an order of attachment cannot be made. As contended by the counsel for the petitioner the affidavit filed by the respondent in support of the application I.A.No. 11865 of 1997 do not comply the requisite conditions as required under Order 38, Rule 5 and as such the order of attachment cannot be permitted to continue. Accordingly the same is set aside and the Civil Revision Petition is allowed. C.M.P.No.15476 of 1997 is closed.