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2005 DIGILAW 665 (MAD)

A. G. Pereira v. F. Francis Selasis

2005-04-16

D.MURUGESAN

body2005
Judgment :- (C.R.P. is filed under Article 227 of the Constitution of India, against the order dated 9.1.2004 made in I.A.No.265/2003 in O.S. No.698/2003 on the file of the I Additional Sub-Court, Madurai (now renumbered as I.A. No.265/2003 in O.S. No.209/2004 on the file of I Additional District Court, Madurai).) The revision petitioner herein is the plaintiff in O.S. No.698/2003 on the file of I Additional Sub- Court, Madurai. The suit was filed for a judgment and decree directing the respondent/defendant to pay a sum of Rs.10 lakhs together with interest at 24% p.a. from the date of suit till the date of realisation. The said claim was based on a pronote said to have been executed by the respondent/defendant on 21.3.2001 for a sum of Rs.10 lakhs. The respondent/ defendant filed the written statement denying the claim of Rs.10 lakhs as well the date of execution of the pronote. He further pleaded that he borrowed only a sum of Rs.5 lakhs on 21.3.1997 and not on 21.3.2001. 2. Pending suit, the Revision Petitioner/plaintiff filed I.A.No.265/2003 under Order 38 Rule 5 and Section 151 C.P.C. seeking for an order,directing the respondent/defendant to furnish security to the tune of Rs.10 lakhs and in the event of failure to furnish the security, an order for attachment of the property mentioned in the petition. 3. It appears that a notice was issued to the respondent/defendant for furnishing security and no such security was furnished. When the application was heard, the respondent/defendant informed that he was prepared to furnish the machineries as security. The said offer was not accepted by the learned Additional Subordinate Judge, Madurai and consequently, ordered attachment by order-dated 16.10.2003. 4. Questioning the order of attachment, the respondent/defendant filed C.M.A. No.2887/2003 before this Court and a Division Bench of this Court by order dated 22.12.2003, allowed the appeal on the basis of the representation of the learned senior counsel appearing for the appellant therein stating that the appellant was ready to furnish security to the sum mentioned in the petition before the lower Court. While issuing such direction, the Division Bench also observed that the security should be subject to the satisfaction of the Court below. 5. While issuing such direction, the Division Bench also observed that the security should be subject to the satisfaction of the Court below. 5. On 31.12.2003 a memo was filed by the respondent/defendant enclosing the copy of the judgment in C.M.A. and the security bond dated 31.12.2003 for the value of Rs.33 lakhs with an undertaking that the respondent/defendant will not alienate or encumber the schedule mentioned movable properties. The said memo was returned by the Registry with an endorsement for serving notice to the other side. The said memo was again re-presented on 2.1.2004 with an endorsement by the learned counsel for the respondent stating that notice may be ordered directly to the party. With the above endorsement, the memo was placed before the learned Additional Subordinate Judge for orders on the same day. The learned Judge directed the application to be called in open Court on 5.1.2004. When the application was called on 5.1.2004, the learned Judge directed the application to be posted along with the suit on 9.1.2004 on which date, the suit was posted. On 9.1.2004, the learned Sub-Judge passed the following order: "Call in open Court. Security furnished and accepted. Notice to party along with document by 30.1.2004" This order is questioned in this Revision Petition. 6. For completion of facts, it must also be mentioned that the application was listed on 30.1.2004 and it was reposted on 9.2.2004 as the learned Sub-Judge was on leave. On 9.2.2004, batta for issuance of notice was filed. While the matter stood at the stage, the suit along with the I.A. was transferred to the file of I Additional District Court, Madurai in view of change in the pecuniary jurisdiction and the same was renumbered as I.A. No.265/2003 in O.S. No.209/2004. The application was called by the learned Additional District Judge, Madurai on 27.8.2004 and was adjourned for enquiry on various dates. Finally, when the enquiry was posted on 28.1.2005, during the course of arguments, it was argued that already the security was furnished and it was accepted by the Court as early as on 9.1.2004. Under the above circumstances, the petitioner/plaintiff claims that he came to know about the acceptance of the security only on 28.1.2005 and therefore, he was constrained to file the above Revision Petition. 7. I have heard Mr. Under the above circumstances, the petitioner/plaintiff claims that he came to know about the acceptance of the security only on 28.1.2005 and therefore, he was constrained to file the above Revision Petition. 7. I have heard Mr. G.R. Swaminathan, learned counsel appearing for the Revision Petitioner/plaintiff and Mr.S.Subbiah, learned counsel appearing for the respondent/defendant. 8. From the facts referred to above, it is clear that though the respondent/defendant had earlier offered the very same machineries as security, the learned Subordinate Judge did not agree with the security and thereby ordered attachment. To a challenge to the said order, the Division Bench also did not interfere with the said findings of the learned Subordinate Judge but merely directed the respondent/defendant to furnish security in view of the submission of the learned counsel appearing for the respondent/defendant. Pursuant to the said order, a memo was filed by the respondent/defendant on 31.12.2003 and admittedly the same was returned for serving notice on the other side. From the Note submitted to the learned Additional Subordinate Judge by the Registry on 2.1.2004, it is seen that the learned counsel appearing for the respondent/defendant has made an endorsement on the memo stating that notice may be ordered directly to the party. From the order-dated 9.1.2004, it is seen that the learned Additional Subordinate Judge has accepted the security even without ordering notice to the party. 9. When an application is filed under Order 38 rule 5 for directing to furnish security, the Court may order the respondent/defendant to furnish security. When such security was furnished, it is for the Court to satisfy as to whether such security could be accepted or not. That apart, from the order of the Division Bench it is clear that security to be furnished by the respondent/defendant herein, shall be to the satisfaction of the learned Additional Subordinate Judge. Satisfaction to be arrived cannot be a mechanical. Security is sought on the apprehension that the respondent/defendant may dispose of the property pending the suit and in the event, the suit is decreed, there may not be property available for execution. In the circumstances, duty is cast upon the Court to find out as to whether the security furnished could be accepted or not. Security is sought on the apprehension that the respondent/defendant may dispose of the property pending the suit and in the event, the suit is decreed, there may not be property available for execution. In the circumstances, duty is cast upon the Court to find out as to whether the security furnished could be accepted or not. The relevant consideration for acceptance of security among other things must be to find out as to whether the machineries are available and whether the machineries would be worth to the sum mentioned in the petition. To ascertain this, the Court could also appoint a Commissioner. After the report of the Commissioner is received, satisfaction could be arrived. The satisfaction as to the existence of machineries and the value mentioned therein cannot be arrived only on the basis of the affidavit filed in support of the application. 10. There is yet another aspect that when an application is filed seeking for a direction to furnish security, the applicant must be necessarily put on notice before accepting the security if any furnished, as ultimately the applicant, who approached the Court for such orders would be deprived of if the security furnished is not either adequate or the machineries offered are not factually available. In this case, admittedly, no notice was issued to the Petitioner/plaintiff before accepting the security. It must also be kept in mind that even according to the respondent/defendant notice should be sent to the parties directly as could be seen from the endorsement made in the memo while it was represented. In this context, Order 38 Rule 7 C.P.C. contemplates the procedures to be followed after decree and before attachment. From the order-dated 9.1.2004, I absolutely do not find any application of mind by the learned Subordinate Judge as to whether machineries were available or as to whether the machineries if available would worth about Rs.30 lakhs. Even without giving any opportunity to the Revision Petitioner/plaintiff, security furnished by the respondent/defendant was accepted. He has also not applied his mind as to the fact that on an earlier occasion, by order dated 16.10.2003 the Court did not accept the machineries which were furnished by the respondent/defendant as security. In view of the above, I find that the order suffers from patent error, warranting interference by this Court under Article 227 of the Constitution of India. 11. In view of the above, I find that the order suffers from patent error, warranting interference by this Court under Article 227 of the Constitution of India. 11. It is argued on behalf of the respondent/defendant that though the order was passed on 9.1.2004, the Revision Petition has been filed only on 17.2.2005 after a lapse of more than a year. In this context, it must be referred that in the absence of notice, the Revision Petitioner/plaintiff cannot be found fault as the petitioner/plaintiff cannot be expected to know about the order of the Court below on 9.1.2004. It is the specific case of the petitioner/plaintiff that after 9.1.2004, the case was adjourned to 30.1.2004 on which date it was not heard because of the learned Additional Subordinate Judge was on leave and reposted to 9.2.2004 on which date only batta was filed and thereafter, it was transferred to the file of District Court on 27.8.2004. Between 27.8.2004 to 28.1.2005, the application was adjourned only for enquiry. Only when the arguments were heard on 28.1.2005, the petitioner/plaintiff came to know that already the security furnished by the respondent/defendant was accepted by the learned Additional Subordinate Judge on 9.1.2004. Thereafter, the Petitioner/plaintiff filed the Civil Revision Petition on 17.2.2005. In the circumstances, I find there is no laches on the part of the petitioner/plaintiff to approach this Court. 12. For the forgoing reasons, the Civil Revision Petition is allowed and the matter is remitted back to the learned I Additional District Court, Madurai for fresh consideration as to the security furnished by the respondent/defendant and to pass orders as to whether the same could be accepted or not. The proceedings should commence from the date of filing of the memo by the respondent/defendant on 31.12.2003. No costs. Consequently, C.M.P.No.1634/2005 and V.C.M.P.No.42/2005 are closed.