K. C. v. AIRWAYS LIMITED VS WG. CDR. R. K. BLAGGANA
1997-05-02
DEVENDER GUPTA, K.S.GUPTA
body1997
DigiLaw.ai
K. S. Gupta ( 1 ) THIS appeal is directed against the order dated 19/12/1996 of a learned Single Judge passed in I. A. No. 4782/96 filed under Orderxxxviii, Rule 5 and Section 151, Indian Penal Code directing the defendants-appellants to furnishsecurity to the tune of Rs. 8. 50 lacs on or before 31/01/1997. ( 2 ) FACTS giving rise to the present appeal lie in a narrow compass. Wg. Cdr. R. K. Blaggana, plaintiff-respondent, filed suitagainst the appellants for recovery ofrs. 8,36,049. 00, etc. which is being contested by the appellants. In the suit I. A. No. 4782/96 which was filed by the respondent and paras 7 and 8 thereof which arerelevant read thus: "that it is learnt that defendant No. 2, who runs the one-man show of thedefendant Company and who floated the defendant No. 1 Company, is aperson of dubious character and has been avoiding appearance before thecourt and is likely to siphon off all the funds of defendants Company toavoid payment of their liabilities towards various creditors and claimants. That the plaintiff has made out a good prima facie case against thedefendants and is most likely to succeed in the suit but a considerable delaylikely to take place in the adjudication of the suit of the plaintiff and by thattime defendant No. 2 is likely to siphon off all the funds of defendant No. 1company. It is also learnt that defendant No. 2 is also making efforts to selloff the defendant No. 1-Company. As a consequence the whole effort of theplaintiff for getting a decree in his favour "or his legitimate dues wouldbecome infructuous. " ( 3 ) PARA 11 of the application which too is material runs as under : "a. 0ffices with machines, equipments, fixtures and fittings at the followingplaces:that the defendant No. 1 -Company owns and/or has interest in thefollowing properties: (a) Operational office at Delhi Airport. (b) Registered office at 311 and 312, Suneja Towers-1, District Centre,janakpuri, New Delhi-110058. (e) Corporate office at 0-111-27 and 41 Palam Vyapar Kendra, Palamvihar, Gurgaon (Haryana ). (d) Dornier-228-202 aircraft on lease from the German Company,presently under care and custody of DGCA lying at Delhi Airport.
(b) Registered office at 311 and 312, Suneja Towers-1, District Centre,janakpuri, New Delhi-110058. (e) Corporate office at 0-111-27 and 41 Palam Vyapar Kendra, Palamvihar, Gurgaon (Haryana ). (d) Dornier-228-202 aircraft on lease from the German Company,presently under care and custody of DGCA lying at Delhi Airport. " ( 4 ) IT was prayed that on order of attachment in respect of the propertiesdetailed in para 11 and other properties which is owned, whether partially or fully,by the defendant-Company or any property in which defendants have any interestmay be passed until the disposal of the suit in support of the allegations made in theapplication, affidavit of the respondent dated 15/02/1996, was filed. ( 5 ) IN the reply appellants alleged that the application does not state that theappellants intend to obstruct or delay the decree, nor is there any material broughton record to infer such an intention on the part of the appellants. Appellants havenot disposed of whole or any part of the properties owned by appellant No. 1 norhave they removed it from the local limits of the jurisdiction of this Court. Even theallegations that have been made in the application are vague, unsubstantiated,vague and general in nature, without disclosing their source. It was further allegedthat affidavit filed alongwith the application has not been varified in accordancewith law and the application and the affidavit as they stand do not make out theingredients of Order XXXVIII, Rule 5, CPC. It was stated that the respondentintentionally omitted to give the estimated value of the properties sought to beattached, as required by law. Dornier aircraft alone values Rs. 10 crores, which ismore than 100 times the value of the claim of the respondent. K. C. V. Airways-appellant No. 1 is a public limited Company with shareholders all over India. It wasfurther alleged that the Delhi Airport Office is the property of National Airportauthority of India while the office at 311-312. Suneja Towers-I, District Centre,janakpuri, are rented properties. Appellants do not have any office at O-III-27 and41, Palam Vyapar Kendra, Palam Vihar, Gurgaon. Dornier 228-202 aircraft is notowned by appellant No. 1, and is on lease with it. In support of the averments madein the reply affidavit of appellant No. 2-CV, Madan, Chairman-cum-Managingdirector of appellant No. 1 was filed. ( 6 ) WE have heard the learned Counsel for the parties.
Dornier 228-202 aircraft is notowned by appellant No. 1, and is on lease with it. In support of the averments madein the reply affidavit of appellant No. 2-CV, Madan, Chairman-cum-Managingdirector of appellant No. 1 was filed. ( 6 ) WE have heard the learned Counsel for the parties. ( 7 ) RULE 5 of Order XXXVIII, Civil Procedure Code under which the impugned order waspassed reads: "5 (1) Where at any stage of a suit, the Court is satisfied by affidavit orotherwise, that the defendant, with intend to obstruct or delay the executionof any decree that may be passed against him- 329 (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 locallimits of the jurisdiction of the Court. the Court may direct the defendant, within a time to be fixed by it, either tofurnish security, in such sum as may be specified in the order to produce andplace at the disposal of the Court when required the said property or thevalue of the same, or such portion thereof as may be sufficient to satisfy thedecree, or to appear and show cause why he should not furnish security. (2) The plaintiff shall unless the Court otherwise directs specify the propertyrequired to be attached and the estimated value thereof. (3) The Court may also in the order direct the conditional attachment of thewhole or any portion of the property so specified. (4) If an order of attachment is made without complying with the provisionsof Sub-rule (1) of this rule, such attachment shall be void. " ( 8 ) NEEDLESS to say that Rule 5 of Order XXXVIII, Civil Procedure Code is an extraordinaryremedy and if the ingredients for invoking it are lacking in the application and theaffidavit filed in support thereto attachment before judgment order cannot beordered.
" ( 8 ) NEEDLESS to say that Rule 5 of Order XXXVIII, Civil Procedure Code is an extraordinaryremedy and if the ingredients for invoking it are lacking in the application and theaffidavit filed in support thereto attachment before judgment order cannot beordered. Claim for attachment before judgment on the averments has been mainlyset out in paras 7 and 8 reproduced above of the application in question and a barereading thereof reveals that it was not pleaded therein that the appellants withintent to obstruct or delay the execution of the decree that may be passed againstthem, (a) are about to dispose of the whole or any part of the property, or (b) areabout to remove the whole or any part of the property from the local limits ofthejurisdiction of this Court. Affidavit filed alongwith the application contains nostatement except an assertion that the respondent has gone through the applicationand the facts stated therein are correct to the best of his knowledge and informationreceived. That be so on the basis of the averments as they stand made in theapplication and the affidavit in question the appellant could not have been legallyasked to furnish security in the sum of Rs. 8. 50 lacs. ( 9 ) FURTHER as noticed earlier, details of the properties sought to be attachedare noted in para 11 of the application. However, neither in that para nor any otherpara estimated value thereof has been disclosed as required by Rule 5 (2), Orderxxxviii, CPC. ( 10 ) CONTENTION advanced by Mr. Alok Kumar appearing for the appellantswas that not only the application in question and the affidavit filed therewith lackthe ingredients required to be pleaded under Rule 5 (1) of Order XXXVIII, CPCbut the learned Single Judge also failed to record his satisfaction aboutthe existence of these ingredients at the time of the passing of the impugned carder. To appreciate the contention it is necessary to refer to the relevant para 3 of theimpugned order: "i have heard the learned Counsel for the parties. The defence taken by thelearned Counsel for the defendants is that the plaintiff had abandoned theservice whereas the case of the plaintiff is that his services were terminatedwithout following the procedure prescribed by law. Therefore, I amsatisfiedthat the plaintiff has made out a strong case for a direction to the defendantsto furnish the security. Accordingly the defendants shall furnish the securityto the tune of Rs.
Therefore, I amsatisfiedthat the plaintiff has made out a strong case for a direction to the defendantsto furnish the security. Accordingly the defendants shall furnish the securityto the tune of Rs. 8. 50 lacs on or before 31. 1. 1997. The defendants shall fileparticulars regarding the financial status of the Company and also thefinancial status of the second defendant on or before 31. 10. 1997. " ( 11 ) OBVIOUSLY, the impugned order was passed only taking intoconsideration the respective pleas taken by the appellants and the respondent. Learned Single Judge has not at all recorded his satisfaction about the existence ofthe twin conditions as laid down in Order XXXVIII, Rule 5 (1), Civil Procedure Code that theappellants with intent or obstruct or delay the execution of the decree that may bepassed against them, (a) are about to dispose of the whole or any part of theproperties, or (b) are about to remove the whole of any part of the properties fromthe legal limits of the jurisdiction of this Court. Under Sub-rule (4) of the said orderthat an order of attachment is made without complying with the provision of Subrule (1) such as attachment is rendered void. Thus, the impugned order is also badin the eye of law on the said score. ( 12 ) FOR the foregoing discussion the appeal is accepted and the impugnedorder dated 19/12/1996 is set aside. I. A. No. 4782/96 is dismissed. Underthe circumstances no order is made as to costs.