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2019 DIGILAW 304 (KER)

Gireesh Lal v. Ravikumar. S

2019-04-01

P.D.RAJAN, T.V.ANILKUMAR

body2019
JUDGMENT : T.V. ANILKUMAR, J. 1. The appellants are defendants 1 and 2 in O.S. No. 10/2019 on the file of the IInd Additional Sub Court, Thiruvananthapuram. They are Producers of Malayalam movie captioned as 'Muhammadum Albiyum Shathrukalaya Katha'. The 1st respondent, plaintiff obtained in I.A.108/2019 an order under Order XXXVIII Rule 5 of the Code of Civil Procedure (for short the Code) attaching the Hard Disc/CD content of the said original movie kept in the custody of the defendants 4 to 7. Being aggrieved by the impugned order of attachment before judgment of the IInd Additional Sub Court, Thiruvananthapuram passed on 14.2.2019, the defendants 1 and 2 in O.S No. 10/2019 have filed this appeal. 2. The first respondent-plaintiff is a business man. He filed O.S. No. 10/2019 for realisation of Rs.91,88,333/- from appellants alleging that the latter borrowed Rs. 85 lakh from him in several instalments since February 2018 for the purpose of producing the above Malayalam film and after repeated demands for return of the amount, the appellants finally executed and delivered on 9.5.2018 a cheque in the name of the first respondent for a sum of Rs. 85 lakh post dated to 15.11.2018 drawn on Catholic Syrian Bank, Ulloor Branch, Thriuvananthapuram. When the cheque got dishonoured for insufficiency of funds on presentment, the first respondent issued notice demanding discharge of debt and since the appellants failed to discharge the debt, the suit for realisation of Rs. 85 lakh with 12% interest from the date of delivery of the cheque was filed. 3. The defendants 3 to 7 who are said to be the custodians of Hard Disc did not appear and contest the suit in as much as there is no relief sought against them in the suit. The appellants denied the plaintiff's case and opposed the I.A. No.108/2019 on various grounds of facts and law. 4. They said that there was neither borrowal of an amount of Rs. 85 lakh nor execution and issue of any cheque in discharge of the purported liability for the amount. They however admitted that in connection with the production of the aforesaid Film, they approached the first respondent for loan and received only a sum of Rs.19,50,000/-. Conceding the liability for repayment of the aforesaid amount, they offered to return the amount, the moment the Film started yielding income on release. They however admitted that in connection with the production of the aforesaid Film, they approached the first respondent for loan and received only a sum of Rs.19,50,000/-. Conceding the liability for repayment of the aforesaid amount, they offered to return the amount, the moment the Film started yielding income on release. According to them, they are presently, not in a position to return the amount since they are impecunious. But they hope to be able to raise the amount once the Film produced by them is allowed to be released. They denied the allegation that the first respondent ever advanced an amount of Rs. 85 lakh and it was further stated that the first respondent is not such a person who could have offered to advance such a large amount as loan. When the loan amount was being paid in a few installments, the 1st respondent demanded the appellants on 9.3.2018 to execute a signed blank cheque and also two singed blank stamp papers as assurance for repayment of the loan amount being borrowed. Later, it is alleged that, 1st respondent manipulated these documents by converting the blank cheque into a complete cheque of Rs. 85 lakh and the signed stamp papers also into a consent deed. 5. The appellants also contended that they did not have any intention to dispose of the Hard Disc/CD of the completed movie. Since there was a specific agreement between parties that the amount due to 1st respondent would be returned only after release of the Film and from the income generated there from, the 1st respondent was not entitled to obtain any order of attachment before judgment which, in effect, stalled the release of the Film itself. It was also urged that the Film was produced on an approximate budget of Rs. 3,50,00000/- and therefore itself order attaching the Hard Disc containing the Film content for securing payment of a lesser amount of debt itself is quite untenable under law. It was also contended that mandatory principles governing grant of attachment before judgment under Order XXXVIII Rule 5 of the CPC were not observed by the court below. 6. The court below on evaluating the materials before it found that the 1st respondent has a fair chance of obtaining a decree against appellants and thus established a prima facie case. It was also contended that mandatory principles governing grant of attachment before judgment under Order XXXVIII Rule 5 of the CPC were not observed by the court below. 6. The court below on evaluating the materials before it found that the 1st respondent has a fair chance of obtaining a decree against appellants and thus established a prima facie case. The apprehension expressed by the 1st respondent that the appellants would defeat the suit claim and dispose of and assign their rights in respect of completed Film was found to be true and convincing. Rejecting all the contentions raised by the appellants, final order of attachment dated 14.2.2019 impugned in this appeal was passed. 7. We heard the learned counsel appearing for the appellants as well as the 1st respondent. The other respondents who are original defendants 3 to 7 in the suit did not appear in this appeal also. 8. It is true that a person applying for an order of attachment under Order XXXVIII Rule 5 of the Code should necessarily establish that there is reasonable chance of a decree being passed against the defendant in the suit. It is an extra ordinary power which is not supposed to be exercised mechanically. The claim in the suit shall be shown to be bonafide and further the suitor has to establish that the defendant in the suit is making attempts to remove or dispose of his assets with the intention of defeating the prospective decree that may be passed in the suit. These principles, no doubt, have been laid down in Raman Tech. & Process Engg. Co. and Another Vs. Solanki Traders [ (2008) 2 SCC 302 ], Pareed Master V.Antony [(1987) (2) KLT 649] and Smitha v. Varghese P.C. and another [ILR 2016 (2) Kerala 676] cited before me by the learned counsel for the appellants. 9. As to whether the 1st respondent could establish in his favour a reasonable chance of securing a decree against the appellants was considered by the court below on facts and materials brought to its notice. We too find that there is no reason to disagree with the view taken in the impugned order that a prima facie case was established in favour of the 1st respondent in this case. There is no dispute that appellants borrowed at least Rs. We too find that there is no reason to disagree with the view taken in the impugned order that a prima facie case was established in favour of the 1st respondent in this case. There is no dispute that appellants borrowed at least Rs. 19,50,000/- from the 1st respondent in connection with production of the Malayalam movie. The dispute concerns only about the actual amount of loan advanced to or received by the appellants. The two documents which the 1st respondent relies on in this respect are a cheque in his name allegedly issued on 9.5.2018 and post dated to 15.11.2018 drawn on Catholic Syrian Bank, Ulloor, Thiruvananthapuram for an amount of Rs. .85 lakh and a consent deed allegedly executed on 9.5.2018 itself in the name of the 1st respondent himself containing acknowledgment of appellants' liability for payment of the amount due under the cheque. The appellants do not dispute the signatures in the cheque dated 15.11.2018 and the consent deed dated 9.5.2018. Their contention is that these blank documents were later manipulated contrary to true facts for founding a false claim against the appellants. According to us, this is a matter which requires decision on evidence. 10. The appellants' specific case in respect of these documents is that they were signed and delivered to the 1st respondent only as a security for payment of Rs. 19,50,000/- borrowed. The precise amount of loan advanced or received is a matter which could be proved only at the time of trial and on proof of evidence and circumstances of the case. Learned counsel for the 1st respondent in this respect invited our attention to the caveat petition lodged by the appellants before the Sub Court on 19.12.2018 anticipating first respondent to institute some litigation against them. The contention taken in the caveat petition by the appellants is that the cheque as well as the consent deed were obtained by first respondent by putting the wife and children of the first appellant to threat and coercion. We find that this contention cannot go hand-in-hand with the defence taken in the counter statement that these documents were offered only as a security. However, in any view of the matter, the finding of the court below that the first respondent established a prima facie case in his favour, cannot be interfered with. 11. We find that this contention cannot go hand-in-hand with the defence taken in the counter statement that these documents were offered only as a security. However, in any view of the matter, the finding of the court below that the first respondent established a prima facie case in his favour, cannot be interfered with. 11. It is also true that without establishing the intention of appellants to remove or dispose of the property contained in the Hard Disc/CD proposed to be attached, no order of attachment before judgment under Order XXXVIII Rule 5 of the Code could be issued. On going through the pleadings of the parties as well as the materials placed on record, we are satisfied that the apprehension expressed by the first respondent is well founded. In paragraph 25 of the affidavit filed in support of the petition for attachment before judgment, the first respondent has sworn that the appellants have conceived an intention to transfer or part with the rights in respect of the completed Film and the former has received genuine information in this respect from reliable sources. 12. According to us, there is no reason to doubt the apprehension expressed by the 1st respondent at all because in the counter statement, the appellants themselves have asserted that huge amount has been spent for distribution and publicity and quick release of the movie. Even otherwise also, the very contention of the appellants itself is that unless they are allowed to release the movie and generate income, they may not be able to raise funds and consequently discharge their admitted liability for repayment of loan. The appellants do not have a case that they have any other property or assets to offer as security to assure the repayment of admitted loan amount of Rs.19, 50,000/-. 13. To our repeated questions, the learned counsel for the appellants submitted that his parties are not in a position to raise any amount or offer any asset of their own as security to secure the first respondent's claim as a condition for lifting the attachment before judgment presently in force. All these facts taken together would certainly reveal that the appellants are bent upon either assigning and parting with their rights in respect of the Film produced or dealing with the Hard Disc/CD of the movie in some other way so as to enable them to generate income there from. All these facts taken together would certainly reveal that the appellants are bent upon either assigning and parting with their rights in respect of the Film produced or dealing with the Hard Disc/CD of the movie in some other way so as to enable them to generate income there from. It is an admitted fact that the production of the Film was completed and script of the Film was sent to the Regional Office of Central Board of Film for Certification. The original defendants 4 to 7 are said to be the network agents of the appellants though their joinder in the suit is improper and unwanted. We, for the aforesaid reasons, are satisfied that mandatory requirements stipulated by Order XXXVIII Rule 5 as referred to in Pareed Master V.Antony [(1987) (2) KLT 649] and Smitha v. Varghese P.C. and another [ILR 2016 (2) Kerala 676] have been satisfactorily complied with by the 1st respondent. 14. Learned counsel for the appellants forcefully argued that since there was a specific understanding between the first respondent and the appellants that actual amount borrowed could be returned and liability of the latter be discharged only upon release of the movie, the suit itself was premature and the first respondent was estopped from securing an order of attachment before judgment. But this case of alleged understanding set up by the appellants was denied by the first respondent. There are no convincing materials to substantiate that any such understanding existed between the parties. 15. It was submitted on behalf of appellants that the 1st respondent himself made direct advance payments to Artists and technicians on various dates under receipts signed by them as per the instruction of the appellants. Later, a sum of Rs. 7 lakh was also paid by him directly to the account of first appellant. But these circumstances, according to us, are not sufficient to draw any inference that the 1st respondent was also interested in the out come of the movie proposed to be produced by the appellants. Looking at the averments in the original suit, the definite case set up by the 1st respondent is to the effect that the transaction as between himself and the appellants was purely based on a debtor and creditor relationship and nothing else. Looking at the averments in the original suit, the definite case set up by the 1st respondent is to the effect that the transaction as between himself and the appellants was purely based on a debtor and creditor relationship and nothing else. The averments disclose that the appellants agreed to the 1st respondent to return the amount received by them in the month of May 2018 itself. It was only after repeated demands for return of the amount, the cheque dated 15.11.2018 and a purported consent deed were allegedly executed in favour of the 1st respondent on 9.5.2018. Circumstances probabilising the existence of the understanding allegedly arrived at between the parties agreeing to postpone repayment of loan amount until the release of the movie, have not been established in the case. 16. In the absence of the alleged understanding being proved as convincing and true, appellants cannot advance an argument that the order of attachment, if issued, will upset the very investment for the production of the Film and thus prevent the release of the Film, landing them in great financial loss and hardship. 17. The learned counsel for the appellants further argued that even accepting the first respondent's case also, the appellants' liability was only for a fraction of the value of the Film produced and the attachment of the Hard Disc content affecting the movement of entire product of movie produced militates the principle of law enshrined in Order XXXVIII Rule 5 of the Code. It is true that the 1st respondent has not specified the estimated value of the property in the hands of the appellants and respondents 4 to 7. The 1st respondent may not know the exact value of the property contained in the Hard Disc but yet he has a case that the production of the Movie was undertaken on a budget of Rs. 2.5 crores. According to the appellants, it was budgeted for much more large amount of Rs. 3.5 crores. 18. Under Order XXXVIII Rule 5, an order of attachment shall stand limited only to such portion of property as is sufficient to satisfy the claim of the suitor. 2.5 crores. According to the appellants, it was budgeted for much more large amount of Rs. 3.5 crores. 18. Under Order XXXVIII Rule 5, an order of attachment shall stand limited only to such portion of property as is sufficient to satisfy the claim of the suitor. But when an incorporeal or intangible asset is sought to be attached as in the present case, for the mere reason that the property is incapable of division or apportionment as in the case of immovable or movable property is no valid ground for refusing an order of attachment under Order XXXVIII Rule 5 of the Code. We do not consider it proper that only on the ground of indivisible nature of the property, the prayer for attachment of content of Hard Disc/CD, which is otherwise justified on facts, could be refused. The argument that Hard Disc is not a property worth attachable under Order XXXVIII Rule 5 of the Code, in our view, does not hold good. Under Section 60 of the Code, all properties are liable to attachment save those exempted by the proviso to the Section. An incorporeal or intangible property like copy right in respect of a movie produced, is not exempt from attachment under the scheme of Code of Civil Procedure. Indivisibility of such a property is by no means a ground for refusing an order of attachment before judgment. The expression 'property' used in Order XXXVIII Rule 5 has a very wide and comprehensive meaning and it does not stand confined to movable assets or immovable properties alone. The usual mode of attaching a movable asset by actual seizure cannot be adopted with respect to the property stored or preserved in the CD or Hard Disc of a Movie, evidently for want of effectiveness. 19. What Order XXXVIII Rule 5 presupposes is the legal intervention of the court to save the claim of the suitor from being defeated when there is a genuine apprehension that the defendant in the suit is about to dispose of his property or remove it from the local limits of the jurisdiction of the court. The expression 'dispose' has a wider connotation. It includes not only transfer or assignment but also every intermeddling or change in the property designed to take the property out of the hands of the person in whose disposing power, control and domain the property is vested. The expression 'dispose' has a wider connotation. It includes not only transfer or assignment but also every intermeddling or change in the property designed to take the property out of the hands of the person in whose disposing power, control and domain the property is vested. As in the present case, attachment of the contents of the Hard Disc/CD should necessarily imply that the rights over the incorporeal property held by the rightful owner thereof shall not be assigned, parted with or dealt with in any manner as to allow the intangible asset to be exploited so as to defeat the execution of prospective decree that may be passed against him. In our considered view, therefore, the Hard Disc contents of the original Film 'Muhammudum Albiyum Shathrukalaya Katha' was rightly attached by the court below as per the impugned order. We do not find any legitimate ground to interfere with the order of the IInd Additional Sub Court, Thiruvananthapuram. In the result, The FAO 37/2019 is dismissed confirming the impugned order of IInd Additional Sub Court, Thiruvananthapuram in I.A.108/2019 dated 14.2.2019 in O.S. No. 10/2009. This order, however, will not deter the appellants from furnishing sufficient security before the court below and seeking to lift the attachment invoking Order XXXVIII Rule 9 of the Code. We also make it clear that we have not expressed our views on the merits of the claim arising in the suit and the court below will be at liberty to decide the issues in the suit un-trammelled by any of our observations in this judgment which we were made to express only for the limited purpose of disposing of this appeal.