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2025 DIGILAW 1123 (AP)

Narse Gowd v. Thammanna

2025-10-17

GANNAMANENI RAMAKRISHNA PRASAD

body2025
ORDER : GANNAMANENI RAMAKRISHNA PRASAD, J. Heard Sri P. Venkata Rama Sarma, learned Counsel for the Civil Revision Petitioner and Sri S. Krishna Reddy, learned Counsel representing Sri Ineni Venkata Prasad, learned Counsel for the Respondent. 2. The Plaintiff herein has filed a Suit for Recovery of Rs.2,48,958/- bearing O.S.No.85 of 2022 on the file of the Civil Judge (Junior Division), Madakasira. The Plaintiff has filed I.A.No.214 of 2025 seeking attachment of about nine properties. The schedule of the properties is found in I.A.No.214 of 2025. The sole Defendant therein had filed Counter-affidavit. 3. The learned Civil Judge (Junior Division) Madakasira, vide Order dated 15.04.2025 was pleased to dismiss the Interlocutory Application bearing I.A.No.214 of 2025. The reasoning given by the learned Civil Judge for dismissing I.A.No.214 of 2025 in O.S.No.85 of 2022 was that the Plaintiff ought to have proceeded with the case by producing the other witnesses for examination instead of moving an Application of this nature. 4. The facts on record also indicate that, vide order dated 14.06.2023, the sole Defendant was set ex parte on the ground that the Written Statement had not been filed by the Defendant within time. The Defendant had filed an Application on 03.07.2023 under Order IX Rule 7 of the Civil Procedure Code trying to set aside the ex parte Order and to further permit him to defend the case. Since the Written Statement was enclosed with the Petition filed by the Defendant, the Plaintiff, in good faith, reported no opposition, thereby permitting the Defendant to defend his case and also to file the Written Statement. Thereafter, PW.1 was examined-in-chief on 04.12.2024, and cross-examination was also conducted on 25.09.2025. 5. The above facts indicate that the Plaintiff/Petitioner was not causing any delay in the matter, and at some stage of the Suit Proceedings, the Plaintiff thought it prudent to secure the interest of the Plaintiff by having the properties attached. It is settled law that in Money Suits, the Claimant is always entitled to secure the property by way of attachment to ensure that the Defendant is prevented from alienating the property, as it is common knowledge that attempts would be made by Defendants to defeat the interest of the Plaintiff by alienating the property and creating third-party rights. 6. Order XXXVIII Rule 5 of Code of Civil Procedure, 1908 is usefully extracted hereunder: Attachment before judgment 5. 6. Order XXXVIII Rule 5 of Code of Civil Procedure, 1908 is usefully extracted hereunder: Attachment before judgment 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. 1[(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.] 7. The Plaintiff/Revision Petitioner herein has specifically averred in the Affidavit filed in support of I.A.No.214 of 2025 in O.S.No.85 of 2022 and the same is as under: “Yesterday, I came to know that the defendant is trying to alienate his petition schedule property in favour of his kith and kin without any valid consideration to avoid the suit pronote debt with an intention to delay or defraud the creditors like me and to delay the execution of the decree which will be passed against him. If he alienate the petition schedule property, it is not possible for me to recover the suit debt even if a decree is passed in my favour. If notice is ordered the defendant may alienate the property and if so, I will be put to great loss.” 8. If he alienate the petition schedule property, it is not possible for me to recover the suit debt even if a decree is passed in my favour. If notice is ordered the defendant may alienate the property and if so, I will be put to great loss.” 8. The prayer in I.A.No.214 of 2025 would indicate that the Plaintiff/Revision Petitioner has sought attachment of about nine properties belonging to the Defendant. The Plaintiff/Revision Petitioner has also given complete details of the nature of the land, the survey numbers and extents and had sought attachment of all nine properties. The Defendant has filed the Counter Affidavit in the said I.A stating that the Plaintiff/Revision Petitioner had came up with the Application under Order XXXVIII Rule 5 belatedly. When this Court had noticed that the Plaintiff/Revision Petitioner is seeking attachment of nine properties, this Court had directed the Counsel for the Plaintiff/Revision Petitioner to file proof of valuation of all the nine properties, which are mentioned in the prayer. The learned Counsel for the Plaintiff/Revision Petitioner has filed the valuations of each property. This Court has noticed that the valuation of all the properties put together which the Plaintiff/Revision Petitioner is seeking attachment is far exceeding the claim of the Plaintiff/Revision Petitioner in the Suit. 9. In Sardar Govindrao Mahadik and Another Vs. Devi Sahai and Others : (1982) 1 SCC 237 . The Hon’ble Apex Court held in Para No.58 as under: 58. What is the effect of attachment before judgment? Attachment before judgment is levied where the court on an application of the plaintiff is satisfied 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 sole object behind the order levying attachment before judgment is to give an assurance to the plaintiff that his decree if made would be satisfied. It is a sort of a guarantee against decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree. The sole object behind the order levying attachment before judgment is to give an assurance to the plaintiff that his decree if made would be satisfied. It is a sort of a guarantee against decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree. The provision in Section 64 of the Code of Civil Procedure provides that where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment. What is claimed enforceable is the claim for which the decree is made. Motilal's suit was for a money claim. It finally ended in a decree for Rs 500 by High Court and in between the first appellate court had dismissed Motilal's suit in entirety. There is nothing to show that the attachment which would come to an end on the suit being dismissed would get revived if a second appeal is filed which ultimately succeeds. In fact, a dismissal of the suit may terminate the attachment and the same would not be revived even if the suit is restored and this becomes manifestly clear from the newly added provision in sub-rule (2) of Rule 11-A of Order 38 CPC which provides that attachment before judgment in a suit which is dismissed for default shall not be revived merely because by reason of the fact that the order for the dismissal of the suit for default has been set aside and the suit has been restored. As a corollary it would appear that if attachment before judgment is obtained in a suit which ends in a decree but if in appeal the decree is set aside the attachment of necessity must fail. There should be no difficulty in reaching this conclusion. 10. In Raman Tech & Process Engg. Co., and Another Vs. Solanki Traders : (2008) 2 SCC 302 . The Hon’ble Apex Court held in Para Nos.4 to 6 as under: 4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. In Raman Tech & Process Engg. Co., and Another Vs. Solanki Traders : (2008) 2 SCC 302 . The Hon’ble Apex Court held in Para Nos.4 to 6 as under: 4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. The object of Order 38 Rule 5 CPC in particular, is to prevent any defendant from defeating the realisation of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose of, or remove from the jurisdiction of the court, his movables. The scheme of Order 38 and the use of the words “to obstruct or delay the execution of any decree that may be passed against him” in Rule 5 make it clear that before exercising the power under the said Rule, the court should be satisfied that there is a reasonable chance of a decree being passed in the suit against the defendant. This would mean that the court should be satisfied that the plaintiff has a prima facie case. If the averments in the plaint and the documents produced in support of it, do not satisfy the court about the existence of a prima facie case, the court will not go to the next stage of examining whether the interest of the plaintiff should be protected by exercising power under Order 38 Rule 5 CPC. 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. 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. 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. Courts should also keep in view the principles relating to grant of attachment before judgment. (See Premraj Mundra v. Md. Manech Gazi [ AIR 1951 Cal 156 ] for a clear summary of the principles.) 11. The above extract would indicate that the Hon’ble Supreme Court has placed reliance with the approval of a Judgment rendered by the learned Single Judge of the Hon’ble High Court of Calcutta in Premraj Mudra Vs. Md. Maneck Gazi & Ors ( AIR 1951 Cal 156 ), wherein the Learned Single Judge has laid down several guidelines for the Trial Courts to follow while exercising their discretionary powers under Order 38 Rule 5 and 6 of Code of Civil Procedure, 1908. For this purpose, Para No.18 of the Judgment rendered by the learned Single Judge of High Court of Calcutta is usefully extracted hereunder: 18. From a perusal of all the authorities, I think that the following guiding principles can be deduced: (1) That an order under O. 38, Rr. For this purpose, Para No.18 of the Judgment rendered by the learned Single Judge of High Court of Calcutta is usefully extracted hereunder: 18. From a perusal of all the authorities, I think that the following guiding principles can be deduced: (1) That an order under O. 38, Rr. 5 & 6, can only be issued, if circumstances exist as are stated therein. (2) Whether such circumstances exist is a question of fact that must be proved to the satisfaction of the Court. (3) That the Court would not be justified in issuing an order for attachment before judgment, or for security, merely because it thinks that no harm would be done thereby or that the defts. would not be prejudiced. (4) That the affidavits in support of the contentions of the applicant, must not be vague, & must be properly verified. Where it is affirmed true to knowledge or information or belief, it must be stated as to which portion is true to knowledge, the source of information should be disclosed, & the grounds for belief should be stated. (5) That a mere allegation that the deft, was selling off & his properties is not sufficient. Particulars must be stated. (6) There is no rule that transactions before suit cannot be taken into consideration, but the object of attachment before judgment must be to prevent future transfer or alienation. (7) Where only a small portion of the property belonging to the deft, is being disposed of, no inference can be drawn in the absence of other circumstances that the alienation is necessarily to defraud or delay the pltf's. claim. (8) That the mere fact of transfer is not enough, since nobody can be prevented from dealing with his properties simply of cause a suit has been filed: There must be additional circumstances to show that the transfer is with an intention to delay or defeat the pltf.'s claim. It is open to the Court to look to the conduct of the parties immediately before suit, & to examine the surrounding circumstances, to draw an inference as to whether the deft. is about to dispose of the property, & if so, with what intention. The Court is entitled to consider the nature of the claim & the defence put forward. is about to dispose of the property, & if so, with what intention. The Court is entitled to consider the nature of the claim & the defence put forward. (9) The fact that the deft, is in insolvent circumstances or in acute financial embarrassment, is a relevant circumstance, but not by itself Sufficient. (10) That in the case of running businesses, the strictest caution is necessary & the mere fact that a business has been closed, or that its turnover has diminished, is not enough. (11) Where however the deft, starts disposing of his properties one by one, immediately upon getting a notice of the pltf.'s claim, &/or where he had transferred the major portion of his properties shortly prior to the institution of the suit & was in an embarrassed financial condition, these were grounds from which an inference could be legitimately drawn that the object of the deft. was to delay and defeat the pltfs'. claim. (12) Mere removal of properties outside jurisdiction, is not enough, but where the deft, with notice of the pltfs'. claim, suddenly begins removal of his properties outside the jurisdiction of the appropriate Court, & without any other satisfactory reason, an adverse inference may be drawn against the deft. Where the removal is to a foreign country, the inference is greatly strengthened. (13) The deft, in a suit is under no liability to take any special care in administering his affairs, simply because, there is a claim pending against him. Mere neglect, or suffering execution by other creditors, is not a sufficient reason for an order under O. 38 of the Code. (14) The sale of properties at a gross undervalue, or benami transfers, are always good indications of an intention to defeat the pltfs. claim. The Court must however be very cautious about the evidence on these points & not rely on vague allegations. 12. Keeping in mind the above principles, facts relevant for the present case are that the Suit is filed for recovery of money for an amount of Rs.2,48,958/-. The Plaintiff/Revision Petitioner had averred in the Affidavit filed in support of I.A.No.214 of 2025 as extracted hereinabove. However, the Plaintiff/Revision Petitioner had sought attachment of about nine properties and the sum total of the nine properties is far exceeding the amount claimed in the Suit. 13. The Plaintiff/Revision Petitioner had averred in the Affidavit filed in support of I.A.No.214 of 2025 as extracted hereinabove. However, the Plaintiff/Revision Petitioner had sought attachment of about nine properties and the sum total of the nine properties is far exceeding the amount claimed in the Suit. 13. The Plaintiff/Revision Petitioner had submitted that the Plaintiff/Revision Petitioner is limiting his claim only to one property of an extent of Ac.1.04 cents situated in Sy.No.253-2B,2B,2A for which the market value indicated by the Sub Registrar, Madakasira is Rs.3,64,000/- through the Valuation Certificate. 14. Sri S. Krishna Reddy, learned Counsel appearing on behalf of Sri Ineni Venkata Prasad, learned Counsel for the Respondent has submitted that his Client has no objection for the attachment of one property as indicated above. 15. Learned Counsel for the Petitioner has submitted that although the Plaintiff undertakes to seek attachment of about nine properties, the Plaintiff now desires to confine his request to attach one property which is equal in value to the claim of the Plaintiff. The Plaintiff has claimed an amount of Rs. 2,48,958/-. Therefore, the Plaintiff claims that the property of an extent of Ac.1.04 cents situated in Sy.No.253/2B2B2A, for which the market value is indicated by the Sub Registrar, Madakasira as Rs.3,64,000/-, would suffice to secure the interest of the plaintiff. 16. Having so recorded, the present Civil Revision Petition is allowed. The property mentioned above shall stand attached. Consequently, the Impugned Order passed by the Civil Judge (Junior Division), Madakasira in I.A.No.214 of 2025 in O.S.No.85 of 2023 dated 15.04.2025 stands set aside. No order as to costs. 17. Interlocutory Applications, if any, stand closed in terms of this order.