Research › Search › Judgment

Orissa High Court · body

2017 DIGILAW 1116 (ORI)

Pramod Kumar Swain v. Annapurna Guha

2017-10-09

BISWANATH RATH

body2017
JUDGMENT : Biswanath Rath, J. 1. This Civil Misc. Petition involves a challenge to the order dated 20.5.2017 passed in I.A. No.1/2017 arising out of Civil Suit No.469 of 2017, vide Annexure-9 thereby allowing an application under Order 38 Rule 5(1) of C.P.C. at the instance of the plaintiff-opposite party. 2. Sri Baug, learned counsel for the defendants, the present petitioners while objecting the impugned order and referring to the pleading involving the property submitted that the application was wholly not maintainable and there is no question of application of provision at Order 38 Rule 5 of C.P.C. to the case at hand. Sri Baug also resisted the impugned order on the premises of trial court exceeding its jurisdiction vested in it. Referring to the decision of the Hon’ble apex Court as well as this Court, Sri Baug further submitted that the impugned order also suffers on account of settled position of law. 3. Sri R. Roy, learned counsel for the opposite party taking this court to the allegation against the petitioner in respect of the property involved and the plea taken in the application under Order 38 Rule 5 of C.P.C. contended that the opposite party in the given circumstances has a strong case under Order 38 Rule 5 of C.P.C. and the trial court giving a serious consideration has passed the impugned order which need not be interfered with. 4. Hearing the rival contentions, going through the pleadings of the parties in the application under Order 38 Rule 5 of C.P.C. and its objection in the court below and on perusal of the impugned order, this Court finds, the provision at Order 38 Rule 5 reads as follows:- “Order 38 -Arrest and Attachment Before Judgment. 4. Hearing the rival contentions, going through the pleadings of the parties in the application under Order 38 Rule 5 of C.P.C. and its objection in the court below and on perusal of the impugned order, this Court finds, the provision at Order 38 Rule 5 reads as follows:- “Order 38 -Arrest and Attachment Before Judgment. Rule 5–Where defendant may be called upon to furnish security for production of property.-(1) Where, at any stage of a suit, the court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him,— (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 local limits of the jurisdiction of the court, the court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security. (2) The plaintiff shall, unless the court otherwise directs, specify the property required to be attached and the estimated value thereof. (3) The court may also in the order direct the conditional attachment of the whole or any portion of the property so specified. (4) If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule, such attachment shall be void.” Now looking to the application under Order 38 Rule 5 of C.P.C., this Court finds, the plaintiff has the following pleading and schedule of property:- “4.That the schedule vehicles are in the custody of Lingaraj Police in C.T. Case No.4114/2016 (Lingaraj P.S. Case No.165/2016). Admittedly the schedule vehicles were plying in Jagatsinghpur. The opp. Parties are permanent residents of Jagatsinghpur district. Now they have made up their mind to release the vehicle from the police custody and remove these from the local limits of the jurisdiction of this Hon’ble Court. There are every apprehension that the opp. Admittedly the schedule vehicles were plying in Jagatsinghpur. The opp. Parties are permanent residents of Jagatsinghpur district. Now they have made up their mind to release the vehicle from the police custody and remove these from the local limits of the jurisdiction of this Hon’ble Court. There are every apprehension that the opp. Parties are about to dispose of the schedule vehicles with an intention to obstruct the execution of the decree to be passed in favour of plaintiff. 5. That there are evidence in record which reveals that the plaintiff has very good chances to win in the suit. Except the schedule vehicles the petitioner has no knowledge regarding assets, properties of the defendant. In case the decree for realisation of money is passed the decree could be satisfied only after alienation of the schedule vehicles.” “SCHEDULE OF VEHICLES 1. “Swaraj 735 FE” tractor bearing Regd. No.OR-21E-2448, chassis No.WATA31418047855, engine No.OR-21E-2449. 2. Tractor trailer bearing Regd. No.OR-21e-2449, chassis No.NDE1221112. 3. Hero Glamour motorcycle bearing Regd. No.OD-21B-5230, chassis No.MBLJA06AMEGL14019, engine No.JA06EJEGL19553.” 5. Bare reading of both the above, this Court nowhere finds either any disclosure of disposal of the property or any attempt by the defendants to remove the whole or part of the property from the local limits of the jurisdiction of the Court. It is on the other hand, pleading in the plaint and the objection of the defendants clearly indicates the property put under attachment for being available outside the local jurisdiction of the Court undertaking the process. Mere bald statement that defendants are trying to dispose the property does not satisfy the required ingredients under Order 38 Rule 5 of C.P.C. On the other hand, under the specific case of the defendants that both the vehicles not only purchased outside the local jurisdiction of the court but have also been registered outside the jurisdiction of the court further since both the properties are on hypothecation for being financed by a financial institution, both the properties are yet to become the properties of the defendants as the financial institution is the absolute owner of the property so long as there is no absolute clearance of the loan amount and the defendants till such period are only the custodian of the same. 6. Now taking into account the decision of the Hon’ble apex Court in the case of Rajendran & others vrs. 6. Now taking into account the decision of the Hon’ble apex Court in the case of Rajendran & others vrs. Shankar Sundaram & others, reported in (2008) 2 SCC 724 , Hon’ble apex Court in paragraphs-5, 6, 7 & 12 held as follows :- “5. The appellants in their written statement inter alia raised a contention that since the amount of Rs. 50/- lakhs purported to have been taken in advance by defendant No.2 in connivance with defendant Nos. 3 & 8 had not been used for the benefit of the partnership firm, no order of attachment could be issued as against the appellants herein. The said contention of the appellants was accepted by a learned Single Judge of the High Court by his order dated 10-12-2002 opining: “The copy of the partnership deed date 01-4-1996 has been filed by the contesting defendants in the typed set. A perusal of the same clearly disclosed that the 2nd Defendant was not a partner in the 1st defendant firm. Moreover, the plaintiff had also not filed any record to show that the second defendant was already in a partner (sic) in the first defendant firm and the borrowal was also made only for the firm. Unless and until, it is established by the plaintiff, I am of the view that the plaintiff is not entitled to seek any interim order calling upon the defendants to execute a security.” 6. An intra-court appeal was preferred there against wherein a Division Bench of the High Court by reason of the impugned judgment opined: “The learned Judge has not appreciated that the 3rd Defendant who is the partner of the firm as per the partnership deed dated 1-4-1996 executed the promissory notes and clause 10 of the partnership firm gives power to a partner to borrow monies (sic) from the 3rd parties for the purpose of business. The second Defendant gave a letter which is only for personal guarantee. So, the reasonings given by the leaned Judge that since the second defendant is not a partner, the borrowal of money is not for the benefit of the partnership cannot be countenanced. When the cheque was given in the name of the firm by the plaintiff, prima facie, it has to be taken that it is borrowed on behalf of the partnership firm. When the cheque was given in the name of the firm by the plaintiff, prima facie, it has to be taken that it is borrowed on behalf of the partnership firm. When the payment of the money by the plaintiff in the firm is not in dispute and in the absence of any specific allegation that the amount was paid personally to the defendants, 2, 3 and 8, though the cheque was issued in the name of the firma and the Plaintiff also colluded with them, the argument of the learned Counsel regarding the alleged collusion cannot be accepted. Whether the amount is used for the firm or personally by the defendants 2, 3 and 8 can be gone into only after adducing evidence. Prima facie, we find that since the amount was paid in the name of the firm and promissory notes were executed by the partners of the firm and no other partnership deed is produced before the Court other than that the partnership dated 1-4-1996, the learned Judge is not correct in rejecting the application as if the plaintiff has no prima facie case. The learned Judge has not given any other finding as to the necessity for attachment, but rejected the application only on the ground that the second defendant is not the partner of the firm.” 7. Mr. Ramamurthy, learned senior counsel appearing on behalf of the appellants, would take us through the plaint as well as the written statement to contend that from a perusal thereof it would appear that in obtaining the said purported loan from the respondent-plaintiff, Defendant Nos. 2, 3 & 8 played a prime role. As Defendant 2 was stated to be the Managing Partner of the firm, which he was not, and in fact only his son (defendant 3) was a partner, the purported loan was granted by the plaintiff without even caring to ascertain as to who are the partners of the said firm. 12. The appellants, in our opinion, are not seriously prejudiced thereby. The court while exercising its jurisdiction under Order 38 Rule 5 of the Code of Civil Procedure is required to form a prima facie opinion at that stage. It need not go into the correctness or otherwise of all the contentions raised by the parties. A cheque had been issued in the name of the firm. The appellants are partners thereof. It need not go into the correctness or otherwise of all the contentions raised by the parties. A cheque had been issued in the name of the firm. The appellants are partners thereof. A pronote had been executed by a partner of the firm. Thus even under the Partnership Act prima facie the plaintiff could enforce his claim not only as against the firm but also as against its partners.” In dealing a matter of similar nature, this Court in the case of Prasad Film Laboratories vrs. M/s.Pragnya Pictures & another reported in 83 (1997) CLT 737 has even gone to the extent opining that even disclosure of disposal of some of the properties unless the party satisfies that such disposal is intentional in order to frustrate the judgment and decree to come in, there is no satisfaction of the ingredient of Order 38 Rule 5 of C.PC. In another decision in the case of Lt.Col.K.S.Bakshi vrs. Jagjit Singh Sabharwal reported in 91 (2001) CLT 37 following a decision of this Court reported in AIR 1987 Orissa 107, this Court finds, two ingredients must be satisfied for exercising power under Order 38 Rule 5 of C.P.C. firstly the intention of defendants must be to obstruct or delay the execution of any decree likely to be passed and secondly, with the above intention, the defendants are attempting to dispose of or remove partly or whole property from the jurisdiction of the court. Same is also the view of this Court in 1989 (I) OLR-466. This Court deciding the case in 1987 (II) OLR-546 even has gone to the extent of saying that there must be material or evidence to support such allegation and mere application seeking attachment won’t do. 7. Same is also the view of this Court in 1989 (I) OLR-466. This Court deciding the case in 1987 (II) OLR-546 even has gone to the extent of saying that there must be material or evidence to support such allegation and mere application seeking attachment won’t do. 7. For the discussions involving the case at hand, for absence of material to satisfy the ingredients of Order 38 Rule 5 of C.P.C., for the involvement of vehicles sought for attachment under hypothecation with financial institution being the first charge to such property, the decisions of different courts referred to herein above, opposite party applying such casual approach to application under Order 38 Rule 5 of C.P.C., this Court finds, the order impugned is not only passed in non-consideration of the ingredients of Order 38 Rule 5 of C.P.C. for having any foundation in such apprehension and further in absence of consideration as to whether such properties are within the jurisdiction of the court taking up such issues? and whether the properties under hypothecation involving financial institution not being party to case at hand, the order impugned remained unsustainable. The impugned order also remains contrary to the settled position of law discussed herein above. 8. Under the circumstance, this Court, while interfering in the impugned order sets aside the same and rejects the application under Order 38 Rule 5 of C.P.C. Civil Misc. Petition succeeds. No cost.