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2009 DIGILAW 4444 (MAD)

Gopaul Envelopes, Rep. By its Proprietor, Chennai v. Santi Corporation, Rep. by its Power Agent, Chennai

2009-10-24

P.P.S.JANARTHANA RAJA

body2009
Judgment :- By consent of both parties, the matter is taken up for final disposal at the stage of admission itself. 2. The Civil Revision Petition is directed against the order, dated 110. 2009, made in I.A.No.16437/2009 in O.S.No.8255 of 2009 on the file of the Honble VIII Assistant City Civil Court, Chennai. 3. The petitioner is the defendant and the respondent is the plaintiff in the suit. The respondent/plaintiff Company is a registered partnership firm, dealers of papers, board and stationery. The petitioner/defendant being in similar business, placed the order for supply of Creamwove papers with the respondent. After delivering the goods to the petitioner herein, the respondent has raised the invoice for a sum of Rs.1,42,153/-. Later, the petitioner also paid sale price by way of two cheques towards supply of the goods, but the cheques were returned unpaid by the petitioners bank i.e. M/s. Punjab National Bank, Chennai for the reason, "EXCEEDS ARRANGEMENT". Therefore, the respondent filed a suit for recovery of money and also filed I.A.No.16437/2009 stating that the petitioner is trying to alienate the property with an intention to delay and defeat the respondents interest. Hence, the plaintiff requested the court to direct the defendant to furnish security to the suit claim of Rs.1,42,153/- with interest of Rs.16,232/-in all aggregating to Rs.1,58,385/- and also attach before judgment against the property as described in the schedule. The petitioner/defendant filed a counter stating that the application is not maintainable. Also further stated that he is not attempting to alienate the schedule property much less to defeat the creditors. After considering the facts and circumstances of the case, the Trial Court has attached the schedule mentioned property by an order dated 110. 2009, which reads as follows; Petitioners counsel represented property not belongs to the respondent. Conditional order dated 010. 2009 not complied by respondent and security not furnished. (Respondent undertaking noted). Attach by 210. 2009. Counter filed. Enquiry by then. Aggrieved by that order, the petitioner has filed the present revision petition. 4. The learned counsel appearing for the petitioner/defendant submitted that the order passed by the Trial Court under order XXXVIII Rule 6 CPC is erroneous. The said order passed by the Trial Court was in a casual manner and there is no evidence to show that the petitioner is attempting to alienate the property. 4. The learned counsel appearing for the petitioner/defendant submitted that the order passed by the Trial Court under order XXXVIII Rule 6 CPC is erroneous. The said order passed by the Trial Court was in a casual manner and there is no evidence to show that the petitioner is attempting to alienate the property. Further, he stated that even in the counter filed before the Trial Court, it has been categorically stated that the petitioner is not attempting to alienate the property mentioned in the schedule. Therefore, the order passed by the Trial Court is not in accordance with law and the same has to be set aside. 5. Learned counsel appearing for the respondent/plaintiff submitted that the Trial Court has considered all the facts and circumstances of the case and came to a right conclusion and hence, the order passed by the Trial Court is in accordance with law and the same has to be confirmed. 6. Heard the counsel appearing on either sides and perused the documents available on record. There is no dispute that the petitioner/defendant has stated in the counter filed before the Trial Court that he is not trying to alienate the property and para 9 and 10 of the counter read as follows; "9. I further submit that I vehemently deny the averments made in para 8 of the petition that I am attempting to alienate the schedule properties much less to defeat the creditors. In this regard, I respectfully submit that I am in the very same business for very long period of more than 20 years and I have got very good reputation in my business and society. Further I am doing my business in the above said address for more than 5 years. In such case it is preposterous for the petitioner to make these allegations against me particularly that I would alienate the schedule properties. In fact these properties are nothing but infrastructural items of my business out of which I have been living and have grown to this extent. 10. I have a very good defence in this case and in any case I under take not to alienate the properties i.e., off set machine, paper cover making machine, air conditioner and furniture as described in the schedule of the petition. 10. I have a very good defence in this case and in any case I under take not to alienate the properties i.e., off set machine, paper cover making machine, air conditioner and furniture as described in the schedule of the petition. Since the value of the stock in trade will only be about Rs.20,000/- and not Rs.40,000/- as alleged I under take to maintain the same to the level of Rs.20,000/- until suitable orders are passed by this Honble Court." From the above, it is clear that it is the categorical statement of the petitioner/defendant that he is not alienating the property and further the counsel appearing for the petitioner has also given an undertaking that the petitioner will not to alienate the schedule mentioned property, especially item No.1 in the schedule mentioned property i.e. Off set machine. According to the learned counsel appearing for the petitioner, the value of the offset machine is Rs.9,49,400/-. Whereas, the learned counsel appearing for the respondent/plaintiff stated in his application that the value of the offset machine Rs.40,000/-, which is incorrect. The learned counsel appearing for the respondent/plaintiff is unable to produce any material or document to show that the petitioner/defendant is trying to alienate the property and even in the affidavit along with application it is merely stated that there is reliable information that the petitioner/defendant is trying to alienate the property. There is no concrete material available to show that the petitioner is trying to alienate the property. In the case of V.K. Nataraja Gounder Vs. S.A. Bangaru Reddiar reported in AIR 1965 Madras 212, this Court has considered the scope of Order XXXVIII Rule 5 of C.P.C and formulated certain essential requirements to be satisfied by the Court and held as follows: "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.... A verbatim copy of the provisions of the Code in the affidavit in support of the application, or a mechanical repetition of the language of the Code without an iota or substratum of truth underlying the allegation, would be merely colourable and would constitute an abuse of process of Court. The Court must insist upon strict proof of the said allegations. Any order of the Court without a proper investigation whether the allegations are well-founded or not, would constitute a gross dereliction of duty." In the case of Raman Tech. & Process Engg. Co. and Another Vs. Solanki Traders Reported In (2008) 2 Supreme Court Cases 302, the Apex Court has considered the scope of Order XXXVIII Rule 5 of C.P.C and held as follows: "4.....It is well settled that merely having a just or valid claim or a prima facie case, will not entitle the plaintiff to an order of attachment before judgment, unless he also establishes that the defendant is attempting to remove or dispose of his assets with the intention of defeating the decree that may be passed. Equally well settled is the position that even where the defendant is removing or disposing his assets, an attachment before judgment will not be issued, if the plaintiff is not able to satisfy that he has a prima facie case. 5. The power under Order 38 Rule 5 CPC is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilise the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. It should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilise the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs by obtaining orders of attachment before judgment and forcing the defendants for out-of-court settlements under threat of attachment. 6. A defendant is not debarred from dealing with his property merely because a suit is filed or about to be filed against him. Shifting of business from one premises to another premises or removal of machinery to another premises by itself is not a ground for granting attachment before judgment. A plaintiff should show, prima facie, that his claim is bona fide and valid and also satisfy the court that the defendant is about to remove or dispose of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him, before power is exercised under Order 38 Rule 5 CPC...." After taking into consideration the principles enunciated in the above said judgments and also considering the statement made by the petitioner/defendant in the counter affidavit, as extracted above, as well as the present undertaking given that he would not alienate Item-I of the schedule mentioned property and since there is no material to show that the petitioner/defendant attempting to alienate the property, I have no hesitation to hold that the order passed by the Trial Court is not in accordance with law and the same has to be set aside and accordingly it is set aside. The Civil Revision petition is allowed. No costs. Consequently, M.P.No.1 of 2009 is closed.