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Madhya Pradesh High Court · body

2004 DIGILAW 757 (MP)

Bindra Builders and Contractors Pvt. Ltd. v. Ranjan Pathak

2004-09-09

RAJENDRA MENON

body2004
Judgment ( 1. ) CHALLENGE in this petition under Article 227 of the Constitution of India is made to an order (Annexure P-16), dated 20-5-2004 passed by the Court of VIIIth Addl. Distt. Judge, Gwalior in Civil Suit No. 27-A of 2004 dismissing the application under Order 38 Rule 5, CPC filed by the petitioner. ( 2. ) BY the said order (Annexure P-16), two applications filed by the petitioner, i. e. , one for injunction under Order 39 Rules 1 and 2, CPC and another under Order 38 Rule 5, CPC have been rejected. So far as this petition is concerned, challenge is only made to part of the order rejecting the application under Order 38 Rule 5, CPC. Learned Counsel for the petitioner contends that it is an incorporated Company registered under the provisions of Companies Act, 1956 carrying on the business of building construction and development work. ( 3. ) THERE is situated a property bearing Municipal No. 11/6 at Jamadar Khana, Darjioli, Madho Ganj, Lashker, Gwalior. The said property was owned and possessed by one Acharya Nirnay Das Pathak who wanted to reconstruct the property but because of financial constraints, was unable to do so. However, he executed an agreement for reconstruction of the property on 21st of August, 2000 vide Annexure P-1 with the petitioner. In this agreement, it is stated that defendant Nos. 1 to 6 also gave their assent. Various conditions have been stipulated in the main agreement but main clause and purpose of the agreement was that the property is belonging to respondent Nos. 1 to 6 and Acharya Nirnay Das Pathak, petitioner Construction Company shall construct Cats and the same shall be sold. Acharya Nirnay Das Pathak expired on 3-10-2000 and after his death, respondent Nos. 1 to 6 who are legal heirs of said deceased, gave their consent to the agreement dated 21-8-2000 and executed a further agreement (Annexure P-2) on 24-10-20001 admitting terms and conditions mentioned in the agreement executed earlier. Thereafter, another agreement was executed vide Annexure P-3 on 30th January, 2002, the purpose was to fixing the cost of the land is constructing a multi storey building in the same and disposing of the flats. According to the petitioner, in pursuance to the said agreement, the petitioner has paid various amounts to the defendants through cheques and cash. Thereafter, another agreement was executed vide Annexure P-3 on 30th January, 2002, the purpose was to fixing the cost of the land is constructing a multi storey building in the same and disposing of the flats. According to the petitioner, in pursuance to the said agreement, the petitioner has paid various amounts to the defendants through cheques and cash. The petitioner contends that in pursuance to the same, he obtained possession of the property, obtained permission from the various authorities, got certain loan sanctioned from the HDFC Bank and started construction of the first floor when all of sudden he came to know through a notice published by the respondents on 3-12-2002 that the agreement in question has been cancelled and the work which was being carried out by the petitioner has been granted by the respondent Nos. 1 to 6, to respondent No. 7. It is the case of the petitioner that in pursuance to certain other agreements entered into with respondent Nos. 1 to 6, respondent No. 7 removed petitioner from the site and by using construction material of the petitioner started constructing the flats in the spot in question. After construction, respondent Nos. 1 to 6 and respondent No. 7 are trying to sell the flats. Being aggrieved by the aforesaid action of the respondents, the petitioner has filed the present suit for injunction, declaration and for compensation and interest. According to the petitioner, he is entitled to receive from the respondents a sum of Rs. 90,28,945/ -. Copy of the plaint is filed as Annexure P-10 alongwith the suit, an application for injunction has also been filed. ( 4. ) ON being noticed, respondent Nos. 1 to 6 and 7 who are defendants in the suit have entered appearance and have denied the contentions raised by the petitioner. Respondent Nos. 1 to 6 have specifically denied that the petitioner is entitled to recover the amount. They have also stated that the plaintiff/petitioner is not entitled to any benefit and the suit is liable to be dismissed. ( 5. Respondent Nos. 1 to 6 have specifically denied that the petitioner is entitled to recover the amount. They have also stated that the plaintiff/petitioner is not entitled to any benefit and the suit is liable to be dismissed. ( 5. ) IN the pending suit, petitioner has filed an application under Order 38 Rule 5, CPC vide Annexure P-11 and has stated that as the respondents/defendants are likely to alienate the property and in case decree is passed, it would be impossible for the petitioner to execute the decree, therefore, he filed the application for attachment of the property in question before judgment or in the alternate, direct the respondents to submit security for the aforesaid amount. This application has been rejected by the impugned order. ( 6. ) SHRI V. K. Bhardwaj, learned Counsel appearing for the petitioner submitted that in the facts and circumstances of the case, when it is established that the respondents are selling out the flats after it has been constructed and that the petitioner is entitled to receive from the respondent more than 1 Crore of Rupees including interest, learned Court below without considering object and purpose of Order 38 Rule 5, CPC has rejected the application. It is stated by learned Counsel that even if the property was not attached, learned Court should have directed for submission of security in the matter. ( 7. ) PLACING reliance on the following judgments, it was argued by learned Counsel for the petitioner that in the facts and circumstances of the case, learned Counsel below has failed to exercise jurisdiction vested in it under Order 38 Rule 5, CPC properly and therefore, this Court should intervene in the matter. Judgment relied upon by the learned Counsel are Sardar Govindrao Mahadik and Anr. v. Devi Sahai and others ( AIR 1982 SC 989 ), Kanchhedilal v. Chisulal (1981 JLJ SN 53), Union Bank of India, Visakapatnam, v. M/s. Andhra Technocrat Industries and Anr. ( AIR 1982 AP 408 ), Surya Devi Rai v. Ram Chander Rai, (2003) 6 SCC 675 and Ramnath v. Jaiom Singh, 1985 MPWN 448 , to contend that when suit property is being alienated, application under Order 38 Rule 5, CPC can be allowed and security can be demanded from the defendants. ( 8. ( AIR 1982 AP 408 ), Surya Devi Rai v. Ram Chander Rai, (2003) 6 SCC 675 and Ramnath v. Jaiom Singh, 1985 MPWN 448 , to contend that when suit property is being alienated, application under Order 38 Rule 5, CPC can be allowed and security can be demanded from the defendants. ( 8. ) REFUTING the aforesaid, Shri J. P. Mishra and Shri P. C. Chandil, learned Counsel for the respondents submitted that to attract the provisions of Order 38 Rule 5, CPC, intention of defendants to obstruct or cause delay in execution of the decree has to be established on the basis of affidavit and in case, the Court is satisfied then only, order can be passed under the aforesaid provision. Taking me through application (Annexure P-11), filed by the petitioner under Order 38 Rule 5, CPC so also the reply to the same filed by the defendants vide Annexures P-14 and P-15, learned Counsel argued that in the facts and circumstances of the present case, ingredients necessary for attracting the provisions of Order 38 Rule 5, CPC are not available and therefore, learned Trial Court having exercised jurisdiction properly, has rejected the application on due consideration, no case for interference in these proceedings under Article 227 of the Constitution is called for. Shri P. C. Chandil, learned Counsel who had appeared for respondent No. 7 invited my attention to the judgment of Calcutta High Court in the case of Premraj v. Md. Maneck Gazi, AIR (38) 1951 Calcutta 156, judgment of Mysore High Court in the case of Basappa v. Nanjamma, AIR (38) 1951 Mysore 122, Madras High Court in the case of T. Srinivasan v. Srinivasan (AIR 1985 Madras 269), Delhi High Court in the case of Bank of India v. M/s. N. T Work Industries (AIR 1989 Delhi 60), Madras High Court in the case of Renox Commercials Ltd. v. Inventa Technologies Pvt. Ltd. (AIR 2000 Madras 213) and judgment of this Court in the case of Narsinghbhai Patel v. Ashokkumar ( 1982 MPWN 237 ), wherein the effect and import of Order 38 Rule 5 of CPC have been considered and it has been held that merely by filing application an order for attachment of the properly can not be passed. It was argued by Shri Chandil that the petitioner in the present case has failed to demonstrate from the material available on record that there is likelihood of alienation of the properly with a intention to obstruct or delay execution of decree and in that view of the matter, it was submitted that no case for interference is made out. ( 9. ) HAVING heard learned Counsel for the parties at length and on perusal of record, it is seen that in the application (Annexure P-11) filed by petitioner under Order 38 Rule 5, CPC, only ground raised by the petitioner for seeking attachment of the property is contained in Para 6 thereto. In Para 6 of the said application, it is stated by the petitioner that respondent Nos. 1 to 6 and respondent No. 7 are carrying out construction activity in the disputed property and after construction, flats are being sold by them. After selling the flats, respondents will leave the city of Gwalior and if it is done and as the petitioner is likely to get the decree for Rs. 90,28,945/alongwith interest the same, can not be executed and therefore, in these circumstances, he has prayed for attachment of the property for execution of the decree. It is seen that this application is filed in the month of May, 2004. Agreement of the petitioner was cancelled on 3-12-2002 and immediately thereafter, respondent No. 7 entered possession of the property and had started constructing flats and activities for construction has commenced, therefore, it is not known as to why the petitioner kept quiet for about 2 years and waited for filing application when the flats were constructed and the process of selling was in progress. ( 10. ) IN reply to the said application, respondent No. 7 in Annexure P-14 has categorically stated that the property in question is not only the property where construction activity is being carried out by the respondent No. 7 which is also a Private Limited Company. It is stated by the said respondent that in the city of Gwalior, he has various property. They are carrying out and undertaken various projects in the city of Gwalior. In Annexure P-14 reply, respondent No. 7 has stated that he has constructed a shopping complex named Royal Plaza near Old High Court Building. It is stated by the said respondent that in the city of Gwalior, he has various property. They are carrying out and undertaken various projects in the city of Gwalior. In Annexure P-14 reply, respondent No. 7 has stated that he has constructed a shopping complex named Royal Plaza near Old High Court Building. He has also constructed a multi storey in Lalitpur Colony and he is having various properties and it has also been stated by him that the respondent No. 1 is Govt. servant and respondent Nos. 1 to 6 are also having various properties in the city of Gwalior and there is no likelihood of their running away. Similarly, respondent Nos. 1 to 2 have filed separate reply to the said application vide Annexure P-15 and in Para 6 of the reply, they have categorically staled that the construction in the disputed property is only to the extent of 40% of the land held by them. Remaining 60% of the land and building is still in their possession. They are permanent resident of the city at Gwalior having various other property. These replies have been considered by the Court below and in Para 28 of the impugned order, learned Counsel has held that merely on the ground that the flats are being sold by the respondents, it can not be construed that they are likely to run away. Learned Court below considered the fact that respondents are dealing with the property and there is no material available on record on the basis of which, it can be inferred that they are likely to run away. It is also stated in the impugned order that the petitioner has stated in the application that the respondents are not having any property from which, the decree if granted to the petitioner can be executed. Considering all these aspects, learned Court has rejected the application. ( 11. ) A perusal of the aforesaid reasons given by learned Court in Para 28 of the impugned order if considered in the backdrop of the applications filed by the petitioner, in his application (P-11) in Para 6 and the reply to the same submitted by respondent Nos. Considering all these aspects, learned Court has rejected the application. ( 11. ) A perusal of the aforesaid reasons given by learned Court in Para 28 of the impugned order if considered in the backdrop of the applications filed by the petitioner, in his application (P-11) in Para 6 and the reply to the same submitted by respondent Nos. 1 to 7 in Annexures P-14 and P-15, i. e. , detailed hereinabove, it is seen that the necessary ingredients required for issuance of an order for attachment before judgment under Order 38 Rule 5, CPC is not available in the facts and circumstances of the present case. For passing an order under Order 38 Rule 5, CPC, learned Court seized of the matter has to be satisfied on the basis of affidavit or otherwise that the defendants with an intention to obstruct or delay execution of the decree that may be passed against them, are disposing of wholly or any of the property or are about to remove whole or any of the property from the local limits of the jurisdiction of the Court. It is therefore, clear that the learned Court has to be satisfied with regard to the intention and object for obstruction and removal of the property. In the present case, neither intention nor the purpose of obstruction is established. While considering the question of passing order under Order 38 Rule 5, CPC this Court in the case of Narsinghbhai Patel (supra) has held that the remedy of attachment before judgment is an extra-ordinary remedy. It seeks to grant relief to the plaintiffs and therefore, it also casts an obligation upon them to make out a strong case as they are claiming relief of attachment without there being a trial. It has been held that maximum care should therefore, be taken before an order is passed lest it becomes a weapon of operation in the hands of unscrupulous plaintiff. It has been emphasized by learned Judge in the aforesaid judgment that unless all the requirement of Order 38 Rule 5, CPC are strictly established, no plaintiff should be granted relief under this provision. It is held that the allegation must be clear and cogent and affidavit in support of the application must meet all the requirement in accordance with the prescribed Rules. It is held that the allegation must be clear and cogent and affidavit in support of the application must meet all the requirement in accordance with the prescribed Rules. It is held that an attempt should not be made to abuse the process of law. Considering the observations made in the aforesaid judgment and taking into consideration the facts and circumstances of the present case, it has to be held that the application filed by the petitioner does not fulfil the satisfactory requirement for passing the order under the aforesaid provision. ( 12. ) SIMILARLY, in the case of Renox Technocrat (supra), Madras High Court has also laid down the proposition that mala fide intention and conduct of defendant for disposing of or about to dispose of his property with dishonest intention should be established before passing any order under Order 38 Rule 5, CPC. Similar is the proposition of the law laid down in the cases relied upon by Shri P. C. Chandil and it is clear from the aforesaid judgments that a relief for attachment of property under aforesaid rule can be granted not as a matter of course but only if conditions set out under Order 38 Rule 5 are fully satisfied. In the present case as already indicated hereinabove, learned Court has exercised great care and after considering contentions raised by the petitioner has recorded a finding that except for stating that respondents are alienating the the property, the petitioner has not even stated that the respondents do not have any other property in the city of Gwalior. On the contrary, in the affidavits and replies filed by the respondents vide Annexures P-14 and P-15, it has clearly been indicated that they have other properties, respondent No. 1 is a Govt. servant and accordingly, it is to be held that ingredients necessary for claiming an order under Order 38 Rule 5, CPC have not been established by the petitioner. ( 13. ) THE judgment relied upon by learned Counsel in the case of Kanchhedilal (supra), docs not help the petitioner in the said case also, it is held that intention to dispose of the property has to be established. In this present case, property being disposed of, is only the fats which are being constructed on the basis of an agreement and therefore, this judgment is not applicable. In this present case, property being disposed of, is only the fats which are being constructed on the basis of an agreement and therefore, this judgment is not applicable. Similarly, Supreme Court in the case of Sardar Govindrao Mahadik (supra) in Para 58 has observed that the Court can allow the application of the plaintiff only if it is satisfied that the defendant has intention to obstruct or delay execution of decree. In the present case, intention having not been established, learned Court has rejected the application. Judgment of Andhra Pradesh High Court in the case of Union Bank of India (supra) deals with the question of appeal against such an order and is not applicable in the facts and circumstances of the present case. The case of Surya Devi Rai (supra) is on the question of exercising jurisdiction under Article 227 of the Constitution of India and not pertaining to the merits of the case. ( 14. ) CONSIDERING the totality of the facts and circumstances and the discussion rendered hereinabove and keeping in view the findings recorded by the learned Court in Para 28 of the impugned order, it can not be said that the learned Court case has failed to exercise jurisdiction vested in it or has committed any error so apparent and erroneous in law or contrary to well settled principle of law which requires interference by this Court in a petition under Article 227 of the Constitution of India. ( 15. ) ON a close scrutiny and analysis of the facts and circumstances of the case and the documents as detailed hereinabove and on considering the same, in the backdrop of the law laid down in the various judgments referred to hereinabove, this Court is of the considered view that the learned Court below has rightly exercised jurisdiction and has rejected the application filed by the petitioner as ingredients for seeking order under Order 38 Rule 5 of CPC have not been established by the petitioner in the present case. ( 16. ) ACCORDINGLY, I find no ground to interfere in the matter, hence, this petition is dismissed. Consequently, M. (W ). No. 1137 of 2004 also stands rejected.