Research › Search › Judgment

Andhra High Court · body

2008 DIGILAW 1085 (AP)

J. Balaji v. Earladinne Venkateswarlu

2008-12-19

P.S.NARAYANA

body2008
Judgment : This Court ordered notice before admission on 24.10.2008 and granted interim stay for a limited period which is being extended from time to time. Sri K.Rathangapani Reddy entered appearance on behalf of the respondent in the civil revision petition. 2. Sri P.Veera Reddy, learned counsel representing the revision petitioner, would maintain that the order under challenge in the present C.R.P. cannot be sustained for the reason that an order of attachment before judgment with a direction to furnish security had been granted without considering the merits and demerits of the application in proper perspective. The counsel also would point out that there is absolutely no basis for the plaintiff to allege that the defendant is disposing of the property. The counsel also would maintain that there is ample material which would go to show that the revision petitioner is an affluent person having number of properties and has been running profit making business and absolutely there is no necessity for him to dispose of the property. The learned counsel also would further maintain that this application had been thought off only with a view to humiliate the revision petitioner-defendant in the suit and if the interest of the respondent-plaintiff to be safeguarded the revision petitioner-defendant is ready and willing to furnish an undertaking not to alienate his properties. The counsel also had taken this Court through the reasons which had been recorded by the learned Additional Senior Civil Judge, Kurnool, and further would maintain that even in the light of the order made in C.R.P.No.2914 of 2008 by this Court the impugned order being unsustainable, the same is liable to be set aside. The counsel also placed reliance on certain decisions. 3. On the contrary, Sri K.Rathangapani Reddy, learned counsel representing the respondent-plaintiff would maintain that it is true that in C.R.P.No.2914 of 2008 filed by a different plaintiff as revision petitioner, in view of the changed circumstances liberty was given to the said petitioner to move appropriate application, if he is so advised and accordingly the C.R.P., was disposed of. The counsel, however, would maintain that in the present case specifically it was averred in the affidavit filed in support of the application that the revision petitioner-respondent-defendant is indebted to many creditors and to the knowledge of the plaintiff there are no valuable properties standing in his name except the petition schedule property. The counsel, however, would maintain that in the present case specifically it was averred in the affidavit filed in support of the application that the revision petitioner-respondent-defendant is indebted to many creditors and to the knowledge of the plaintiff there are no valuable properties standing in his name except the petition schedule property. The counsel also had taken this Court through the averments made in the counter and further would point out that in the present case the third party affidavit of one Viswanadham also had been filed which had been specifically referred to. The counsel also would maintain the fact that certain other suits are pending also is not in controversy and this aspect also had been taken into consideration by the learned Additional Senior Civil Judge, Kurnool and hence in the light of the reasons recorded by the learned Additional Senior Civil Judge, Kurnool, this is not a fit matter to be interfered with. 4. Heard the counsel. 5. The present C.R.P is filed as against the order dated 30.9.2008 in I.A.No.760 of 2007 in O.S.No.572 of 2007 on the file of the Additional Senior Civil Judge, Kurnool. The learned Judge in the light of the respective stands taken by the parties in the affidavit filed in support of the application and the counter and also further taking into consideration the exhibits marked, Ex.A-1 photostat copy of Memorandum of deposit of title deeds in favour of Axis Bank Limited and Ex.B-1 certificate issued by the Assistant Commissioner of Income Tax, Kurnool and came to the conclusion that there is prima facie material to believe that several creditors filed suits against the revision petitioner-defendant and if really the defendant is affluent person and is not going to sell away the property, there is no difficulty for him to offer security for the debt of the plaintiff and, accordingly, allowed the application directing the defendant to furnish security on or before 17.10.2008, failing which the attachment will be ordered. In the affidavit filed in support of the application I.A.No.760 of 2007 in O.S.No.572 of 2007 on the file of the Additional Subordinate Judge, Kurnool, it was averred that the suit for recovery of money was filed on the strength of promissory note and the plaintiff demanded the defendant to repay the amount, but the defendant failed to repay the same and further the defendant is trying to dispose of the property shown in the petition schedule with an intention to delay the execution of the decree that may be passed against him. He is also trying to leave the jurisdiction of the court after selling away the properties and further it was also stated that the defendant is heavily indebted to several creditors and except the petition schedule property there is no other property. The defendant i.e., the present revision petitioner resisted the same denying the averments made in the affidavit filed in support of the application and specific stand had been taken that he is doing transport business with a turnover of Rs.14 crores, his income is Rs.14 lakhs during the financial year and he has paid Rs.3,94,000/-as income tax and he owns 5 vehicles worth Rs.40 lakhs and he also purchased house plot from the brother of the plaintiff for Rs.1,75,000/- and obtained registered sale deed, he paid Rs.2,32,600/-as initial payment for purchasing two lorries with the financial assistance of Sundaram Finance Limited, Kurnool and he also paid Rs.2,60,000/-as initial payment for purchasing the car for personal use with the financial assistance of Sundaram Finance. He also purchased immovable properties regularly, he purchase house at Dhone for Rs.4,23,000/- under a registered sale deed and its present value is Rs.11,16,000/-. He also purchased another house at Dhone under registered sale deed for Rs.1,56,000/-, he purchased 4 shops at Dhone under registered sale deed for Rs.4 lakhs and he purchased house site at Dhone for Rs.1,05,500/-. Further specific stand had been taken that he lent an amount of Rs.2 crores to others and therefore the plaintiff is not entitled to the reliefs prayed for in the application. 6. The learned Additional Senior Civil Judge, Kurnool, after marking Exs.A-1 and B-1, having formulated the point for consideration at para 5, recorded reasons commencing from paras 6 to 13 and ultimately allowed the application directing the defendant to furnish security on or before 17.10.2008, failing which attachment will be ordered. 6. The learned Additional Senior Civil Judge, Kurnool, after marking Exs.A-1 and B-1, having formulated the point for consideration at para 5, recorded reasons commencing from paras 6 to 13 and ultimately allowed the application directing the defendant to furnish security on or before 17.10.2008, failing which attachment will be ordered. The fact that another suit O.S.No.570 of 2007 filed by another creditor is also pending disposal had been taken note of. The learned Additional Senior Civil Judge also observed that there must be some material like third party affidavit or other material to satisfy the ingredients of Order 38, Rule 5 C.P.C. The learned Judge also observed that one Viswanatham had sworn to the third party affidavit and no doubt the third party affidavit was filed subsequent to the filing of this application. 7. In S.P.Venkanna Babu v. M/s.Varalakshmi Finance Corporation 1996 (4) ALT 253 (DB) the Division Bench of this Court observed at paras 6 and 7 as hereunder: "It does not appear from the impugned order that the procedure under Order 38 Rules 5 and 6 was followed before passing final order. The scheme of the code, as explained above, contemplates, before any order is passed under order 38 Rule 6, the defendant to be called upon to furnish security to satisfy the decree that may be ultimately passed and only on his failure to furnish security, to direct attachment. In the present case, the order passed on 4-12-1995 shows that the appellant was not called upon to furnish security for the purpose of passing an order under Order 38 Rule 6 CPC. The security was called upon to be furnished for passing the conditional attachment order. Passing an order for furnishing security ex parte would obviously require the order to be brought to the notice of the defendant and reasonable time granted to furnish the security. The essential conditions to be satisfied are that the Court must on proper materials be satisfied that there is an attempt of alienation of the properties so as to frustrate the decree that may be passed in the suit and secondly, on being called upon, the defendant fails to furnish security or to show cause why the security would not be furnished. If the Court comes to prima facie view that an attempt is being made to dispose of the properties it may pass a conditional order of attachment while calling upon the defendant to furnish security. Hence the primary requirement is of the satisfaction of the court that attachment is necessary to make the decree a reality and realizable and not one at vacuum. In the present case, it appears that the Court had passed orders on two affidavits filed, one by the Managing Partner of the respondent company, Sri Simhadri Surya Rao and the another affidavit by the Clerk of the respondent company, Sri Bolla Krishna Rao as a third party affidavit. In the first affidavit, it was stated that the appellant was trying to alienate the petition schedule properties with an intention to defeat or delay the claim of the respondent. In the second affidavit, the clerk of the plaintiff stated that he had been to Madras on business work of the company and he was there on 28th, 29th and 30th of November, 1995. During his stay at Madras, he learnt of the appellant's attempt to alienate the properties. An order of attachment before judgment affects the right of the owner of the property to deal with the same even before any verdict is available against him as regards the claim of the plaintiff. Such an order is not to be passed merely for the asking or in the routine manner. There must be cogent, prima facie materials to lead the Court to the conclusion that there have been attempts by the defendant to dispose of the property with a view to defeat the decree. Mere satisfaction that there has been an attempt to dispose of the property is in itself not sufficient and there must be further conclusion, again prima facie, that the attempt to alienate is to delay or defeat the decree. For reaching such satisfaction, there has to be before the Court some tangible material than the mere statement without giving any particulars and without disclosing the source of the information of attempted alienation. The learned Subordinate judge should have been alert to the fact that there was actually no third party affidavit as the second affidavit was only of the Clerk of the respondent-firm who was under its control as an employee. The learned Subordinate judge should have been alert to the fact that there was actually no third party affidavit as the second affidavit was only of the Clerk of the respondent-firm who was under its control as an employee. The affidavits in themselves do not disclose as to when an attempt was made to alienate, what type of alienation was intended to be made and to whom the alienation was being desired to be made and who gave such information. The learned Subordinate Judge did not make any such enquiry before passing the order which grossly and adversely affected the appellant. In the order passed on 4-12-1995, no time was fixed to enable the appellant to furnish security. While passing the final order, the Court was not alive to me fact that the respondent's agent had accompanied the bailiff from the Madras Court and finding the respondent merely absent recorded remark that the security was not furnished by the appellant. One fails to understand as to how if the appellant was absent, he failed to furnish security. Merely because the appellant was not present at the spot when the bailiff went there, it did not mean that he was absent for all times. It could not certainly be said that the appellant must be found at his place whenever the bailiff chooses to visit and the moment he is not found, the property would be attached. There was no genuine attempt made to enable the appellant to furnish security. The report further shows that the bailiff went to item one of the property and finding that the appellant was absent, he called upon the wife and son of the appellant to furnish security and on their failure to do so, attached the property. Obviously no time was given to the respondent to know of the order of the court and to furnish security as directed. The procedure followed is highly irregular. Consequently, we are to hold that the appellant was never given any opportunity to furnish security for which the impugned order passed is void under Order 38 Rule 5 (4) CPC. In that view of the matter, we set aside the impugned order and allow the civil miscellaneous appeal with costs." 8. The procedure followed is highly irregular. Consequently, we are to hold that the appellant was never given any opportunity to furnish security for which the impugned order passed is void under Order 38 Rule 5 (4) CPC. In that view of the matter, we set aside the impugned order and allow the civil miscellaneous appeal with costs." 8. Reliance was also placed on the decision of this Court in K.Mallesh Mudiraj v. C.Sudhakar 2007 (4) ALD 369 wherein it was observed at para 10 as hereunder: "It is, however, brought to the notice of this Court that except the averments made in the affidavit filed in support of the application no other third-party affidavits or any other material had been placed before the Court. Apart from this aspect of the matter, the reasons, which had been recorded in paras 6 and 7 appear to be just reproduction of the language of the provisions specified supra. The learned Judge may have to appreciate all the facts and circumstances of the case and may have to arrive at a conclusion." 9. No doubt one Bharath Kumar yet another plaintiff-creditor filed O.S.No.22 of 2007 on the file of the I Additional District Judge, Kurnool, as against the present revision petitioner as defendant in the said suit for recovery of amount and also filed I.A.No.2752 of 2007 under Order 38, Rule 5 of the Code of Civil Procedure praying for attachment of the petition schedule properties before the judgment. The application was dismissed and aggrieved by the same the said Bharath Kumar creditor-plaintiff filed C.R.P.No.2914 of 2008 and this Court by order dated 12.8.2008 disposed of the said C.R.P observing as hereunder: "Except the averments made in the affidavit filed in support of the application, no other material had been placed by the petitioner before the Court below seeking attachment of the petition schedule properties. In the light of the finding recorded by the learned I Additional District Judge, Kurnool, and in the light of the facts and circumstances of the case, this Court is of the considered opinion that the impugned order cannot be found fault. However, in view of the changed circumstance, liberty is given to the petitioner to move appropriate application, if he is so advised. With the above direction, the civil revision petition is disposed of. No costs." 10. However, in view of the changed circumstance, liberty is given to the petitioner to move appropriate application, if he is so advised. With the above direction, the civil revision petition is disposed of. No costs." 10. It is no doubt true that since no acceptable material had been placed to satisfy the ingredients of Order 38, Rule 5 C.P.C., the application was dismissed and in C.R.P.No.2914 of 2008 filed as against such an order, the said order was made. No doubt, the counsel representing the revision petitioner had taken a stand before this Court that the revision petitioner-defendant is ready and willing to file an undertaking. It is also true that the revision petitioner heavily relied on Ex.B-1 certificate issued by the Assistant Commissioner of Income Tax, Kurnool. In the light of the material available on record, here is a case where the plaintiff is asserting that the defendant is heavily indebted to others and certain suits also had been filed and unless attachment before judgment is ordered his interest cannot be safeguarded and on the contrary the defendant is asserting that he is affluent enough and there is no necessity of ordering attachment before judgment. On a careful reading of the reasons which had been recorded by the learned Additional Senior Civil Judge, Kurnool, taking into consideration the third party affidavit and also the pendency of yet another suit and further considering Exs.A-1 and B-1 also the learned Additional Senior Civil Judge prima facie came to the conclusion that the defendant to be directed to furnish security on or before 17.10.2008, failing which the attachment will be ordered. Though the third party affidavit of Viswanadham was filed after the filing of the application, the fact remains that the third party affidavit also had been relied upon by the learned Judge. Hence in the light of the facts and circumstances of the case it cannot be said that the impugned order suffers from any illegality whatsoever. But, however, Sri P.Veera Reddy had taken a specific stand before this Court that the revision petitioner is ready and willing to file an undertaking of the revision petitioner not to alienate the petition schedule property. But, however, Sri P.Veera Reddy had taken a specific stand before this Court that the revision petitioner is ready and willing to file an undertaking of the revision petitioner not to alienate the petition schedule property. Inasmuch as the application was allowed by the learned Additional Senior Civil Judge directing the defendant to furnish security on or before 17.10.2008, failing which the attachment will be ordered, in the light of the specific stand taken by Sri P.Veera Redy, time granted by the learned Additional Senior Civil Judge, Kurnool to the defendant to furnish security on or before 17.10.2008 is hereby extended till the end of January, 2009 or in the alternative let the learned Judge consider the aspect of entertaining the specific undertaking in this regard as offered by Sri P.Veera Reddy, learned counsel representing the revision petitioner within the said time. 11. With the above direction, the civil revision petition is disposed of. No order as to costs.