Raghavendra Allam v. Indukuri China Satyanarayana Raju
2025-06-27
T.VINOD KUMAR
body2025
DigiLaw.ai
ORDER : T. Vinod Kumar, J. The present Civil Revision Petition is preferred against the order dated 22.08.2022 in I.A. No. 41 of 2021 in O.S. No. 04 of 2021 passed by the III Additional District and Sessions Judge- Cum- II Metropolitan Sessions Judge-Cum-Principal Family Judge, Kukatpally, Medhcal-Malkajgiri District. 2. The revision petitioners herein are the defendants in the main Suit. 3. The respondent herein filed the subject suit as plaintiff vide O.S. No. 4 of 2021 under Order VII Rule 1 r/w Section 26 of CPC for recovery of damages. 4. The respondent herein had filed an interlocutory application vide I.A. No. 41 of 2021 in O.S. No. 04 of 2021 under Order 38 Rule 5 r/w. section 151 of CIVIL PROCEDURE CODE (for short ‘CPC’) to call upon the petitioners herein for furnishing security against the suit amount of Rs.2,13,46,175/- (Rupees Two crores Thirteen lakhs forty-six thousand one hundred and seventy five only). 5. The parties are referred to as per their position in the present revision petition. 6. The brief facts of the case are that the respondent herein is a retired employee of HMT Limited and the absolute owner of plots bearing Nos. 204A and 205A (each admeasuring 400 sq. yards) situated in Western Hills (Addagutta Cooperative Housing Society Ltd.), Kukatpally, Ranga Reddy District; that the respondent had acquired the same through registered sale deeds in the years 1996 and 2008 and constructed a residential-cum- commercial complex on the said property after obtaining requisite ULC clearances and BPS/LRS permissions. 7. It is further the case of the respondent that in the said building the ground and first floors were specifically designated and constructed for non-residential purpose; that between the years 2012 and 2013, the petitioners purchased the respective flats in the respondent building i.e., petitioner/defendant No.1 purchased Flat No. 201 through a registered sale deed dated 06.04.2013, petitioner/defendant No.2 purchased Flat No. 303 through a registered sale deed dated 20.04.2012, petitioner/defendant No.3 purchased Flat No. 305 through a registered sale deed dated 15.02.2013, and petitioner/defendant Nos. 4 and 5 jointly purchased Flat No. 205 through a registered sale deed dated 16.08.2013; and that all the above sale deeds are registered at the Sub-Registrar Office, Kukatpally. 8.
4 and 5 jointly purchased Flat No. 205 through a registered sale deed dated 16.08.2013; and that all the above sale deeds are registered at the Sub-Registrar Office, Kukatpally. 8. Before the court below the respondent further contended that the petitioners herein filed consumer complaints against the respondent before the District Consumer Forum, alleging misrepresentation about the nature of construction, wherein interim orders were passed restraining the respondent from letting out or selling the ground and first floors of the building constructed by him. The petitioners herein filed a petition for appointment of Advocate Commissioner for verification of physical features of the building; and that the Advocate Commissioner, appointed by the court had confirmed that the ground and first floors were constructed for non-residential use and lacked duct systems which indicates residential occupation. On 06.03.2019, the Consumer Forum dismissed all the complaints, and the petitioners herein did not file any appeals. However, due to the pendency of these false cases, the respondent suffered a rental loss from March 2014 inasmuch as the prospective tenants, including reputed companies such as Heritage, withdrew from entering into lease agreements owing to the subsistence of interim orders. 9. The trial court in the underlying interlocutory application filed by the respondent vide I.A. No. 41 of 2021 in O.S. No. 04 of 2021 issued the orders of warrant dated. 22.08.2022 and directed the petitioners herein to furnish the security of Rs.2,13,46, 175/- within 48 hours from the receipt of the said notice and on failure to do so, the Court Bailiff was directed to attach the Petition Schedule Property. By observing as above, the trial Court has allowed the I.A. No.41 of 2021 in O.S.No.04 of 2021, and held that despite the conditional order passed, the petitioners neither filed a counter nor made any representation. Hence treated as no counter and issued attachment over petition scheduled property. 10. Aggrieved by the above said order dated. 22.08.2022 the petitioners herein have preferred the present Civil Revision Petition. 11. Heard Sri Y. Balaji, learned counsel for the petitioners and Sri P. Indra Prakash, learned counsel for the respondent and perused the record. 12.
Hence treated as no counter and issued attachment over petition scheduled property. 10. Aggrieved by the above said order dated. 22.08.2022 the petitioners herein have preferred the present Civil Revision Petition. 11. Heard Sri Y. Balaji, learned counsel for the petitioners and Sri P. Indra Prakash, learned counsel for the respondent and perused the record. 12. The petitioners contend that the Trial Court has failed to appreciate the scope and object of Order XXXVIII Rule 5 CPC; that the impugned order was passed without any pleading or specific averment in the underlying interlocutory application to show that the petitioners were attempting to dispose of or remove their assets with an intent to defeat any prospective decree; that the suit itself is not based on any admitted liability or debt but is one seeking damages, which further necessitates strict adherence to procedural safeguards; and that the Trial Court erred in allowing the application ex parte, without issuing the mandatory notice to show cause as contemplated under Rule 5(1) of CPC, thereby the petitioners were denied opportunity to contest the relief sought. 13. The petitioners also contend that the power under Order XXXVIII Rule 5 CPC, being extraordinary and discretionary in nature, must be exercised with caution and only upon the basis of clear, cogent, and specific averments. In the present case, the respondent had failed to specifically allege any attempt by the petitioners to dispose of or alienate the suit property, which renders the invocation of such power unsustainable. Moreover, the application for attachment before judgment was entertained without referring to the contents of the written statement filed by them; that the impugned order does not record any finding that the petitioners were causing delay or had acted in a manner prejudicial to the proceedings. In such circumstances, passing an order of attachment without complying with the statutory requirement amounts to violation of natural justice and results in grave prejudice to the petitioners, warranting interference by this Court. 14.
In such circumstances, passing an order of attachment without complying with the statutory requirement amounts to violation of natural justice and results in grave prejudice to the petitioners, warranting interference by this Court. 14. Per contra, the respondent contends that due to the false and vexatious consumer complaints filed by the petitioners, coupled with the interim injunctions granted therein, he was unlawfully restrained from letting out the ground and first floors of the building, which were constructed for non-residential use; that the said premises remained vacant from March 2014 till the disposal of the consumer cases on 06.03.2019, despite having received proposals from prospective commercial tenants, including well-known retail establishments such as Heritage Supermarket, who had expressed their willingness to pay rent at the rate of ?35/- per sq. ft. for the ground floor and ?30/- per sq. ft. for the first floor; and that owing to the pendency of the litigation and the interim orders, all such lease proposals were abandoned, resulting in substantial and continuing financial loss. 15. The Respondent also contended that he has carefully computed the loss incurred over the said period, amounting to ?2,13,46,175/-, and submits that the same is directly attributable to the wrongful conduct and malicious litigation pursued by the petitioners. Despite issuance of legal notices dated 06.03.2020 demanding compensation, the petitioners have neither replied nor compensated the respondent. Hence, the present suit for recovery of damages was filed and the underlying interlocutory application for furnishing the security for the suit claim amount of Rs.2,13,46,175/- has been sought; and that as the petitioners despite court passing the conditional order did not furnish the security, the trial court has rightly directed for attachment of the property before judgment. 16. I have taken note of the respective contentions urged. 17. It is pertinent to note that the main grievance raised by the petitioners in this revision petition, is that the trial court erred in passing an order of conditional attachment under Order XXXVIII Rule 5 CPC without issuing a prior notice to the petitioners as mandated under Sub-rule 1 of the said provision. However, Order XXXVIII Rule 5 of the CPC, provides a mechanism to procedural safeguard intended to prevent the defendant from defeating the realization of a decree by disposing of or removing property during the pendency of the suit. 18.
However, Order XXXVIII Rule 5 of the CPC, provides a mechanism to procedural safeguard intended to prevent the defendant from defeating the realization of a decree by disposing of or removing property during the pendency of the suit. 18. It is apt to refer to sub-rule 3 of the Order XXXVIII rule 5, which reads as follows: Order XXXVIII: Arrest before judgment 5. Where defendant may be called upon to furnish security for production of property: (3) The Court may also in the Order direct the conditional attachment of the whole or any portion of the property so specified. 19. A reading of Order XXXVIII Rule 5(3) CPC indicates that the same permits the Court to pass an order of conditional attachment even before issuing a show-cause notice. In the present case, the Trial Court, by order dated 22.08.2022 issued a warrant and directed the petitioners to furnish security in a sum of ?2,13,46,175/- within 48 hours from the time of receipt of the notice. The Court further held that failure to comply with the said direction would result in attachment of the petition schedule property by the Court Bailiff. Therefore, the order dated 22.08.2022 amounts to a conditional order of attachment, providing the petitioners an opportunity either to furnish security or to file a counter explaining why security need not be furnished. In the event the petitioners had furnished the required security, the conditional attachment would not have taken effect against them. 20. The Supreme Court in Raman Tech & Process Engg. Co. v. Solanki Traders, (2008) 2 SCC 302 , held: "The purpose of Order 38 Rule 5 CPC is to prevent any attempt on the part of the defendant to defeat the execution of the decree that may be passed against him. But it is not a provision to be invoked lightly or merely for the asking. There has to be a concrete foundation in the pleadings supported by material on record showing that the defendant is attempting to remove or dispose of the property." 21. The Courts have also consistently upheld the use of conditional attachment under Rule 5(3) CPC when there is a risk that the decree will be rendered nugatory and if the court is satisfied that the defendant may defeat the decree by alienating the property, a conditional order of attachment is justified.
The Courts have also consistently upheld the use of conditional attachment under Rule 5(3) CPC when there is a risk that the decree will be rendered nugatory and if the court is satisfied that the defendant may defeat the decree by alienating the property, a conditional order of attachment is justified. The requirement of issuance of prior notice is not mandatory where the court is acting under Rule 5(3) CPC. 22. It is to be noted that the object of the Order XXXVIII rule 5 of CPC is to prevent a defendant from defeating the execution of a prospective decree by disposing of or removing their property beyond the jurisdiction of the Court and where there exists a reasonable apprehension that the defendant is attempting to alienate the property with an intent to obstruct or delay execution, the Court is empowered to direct the defendant to furnish security or order conditional attachment. In the present case, having regard to the respondent’s specific allegations, coupled with the absence of rebuttal by the petitioners, prima facie provide sufficient basis for the trial Court to invoke its jurisdiction under Order XXXVIII Rule5 CPC. 23. It is further pertinent to note that, the consequences of non- compliance or compliance of the directions issued under Rule 5 of Order XXXVIII of CPC were not contemplated, but Rule 6 of Order XXXVIII of CPC deals with the same, which reads thus: 6. Attachment where cause not shown or security not furnished. (1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Court, the Court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached. (2) Where the defendant shows such cause or furnishes the required security, and the property specified or any portion of it has been attached, the Court shall order the attachment to be withdrawn, or make such other order as it thinks fit. 24. A conjoint reading of the above provisions of Rule 5 and 6 of Order XXXVIII of CPC makes it clear that in an application filed under Order XXXVIII, Rule 5 of CPC, the competent Court is empowered to pass order under Order XXXVIII, Rule 6 of CPC, even though it is not specifically mentioned therein.
24. A conjoint reading of the above provisions of Rule 5 and 6 of Order XXXVIII of CPC makes it clear that in an application filed under Order XXXVIII, Rule 5 of CPC, the competent Court is empowered to pass order under Order XXXVIII, Rule 6 of CPC, even though it is not specifically mentioned therein. Order XXXVIII, Rule 6 of CPC empowers the competent Court to make an Order of attachment absolute, when there is failure to comply with the directions under Order XXXVIII, Rule 5(1)(b) of CPC. ( See: Muppalla Sambasiva Rao V. Vemula Tirupathi Venkaiah , MANU/AP/1295/202 ) 25. Thus, this Court is of the considered view that the attachment order passed by the trial court is not a final or absolute attachment, but is conditional in nature. The petitioners herein retain the right to show cause or furnish security, and may seek modification or recall before the trial court. Therefore, the impugned order of conditional attachment under Order 38 Rule 5(3) CPC neither infringes the rights nor causes prejudice to the petitioners at this stage. 26. In light of the foregoing discussion, this Court is of the considered view that the Trial Court has rightly directed attachment over petition schedule property. Consequently, this Court finds no ground to interfere with the impugned order in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India. 27. For the above-mentioned reasons, this Court is of the view that the order of the trial Court does not suffer from any infirmity or error. 28. Accordingly, the Civil Revision Petition is devoid of merit and is dismissed. The order dated 22.08.2022 in I.A. No. 41 of 2021 in O.S. No. 04 of 2021 is sustained. No order as to costs. Consequently, miscellaneous petitions pending if any shall stand closed. No order as to costs.