Telangana High Court
M/S. Trinity Beverages Private Limited vs M/S. Snj Synthetics Limited on 16 December, 2023
THE HONOURABLE SMT. JUSTICE M.G.PRIYADARSINI
Civil Revision Petition No.3247 OF 2023
ORDER:
Aggrieved by the order dated 21.02.2023 (hereinafter will be referred as 'impugned order') in I.A.No.217 of 2023 in O.S.No.47 of 2023 on the file of learned Senior Civil Judge, Sangareddy, the defendant filed the present Civil Revision Petition to set aside the impugned order.
2. For the sake of convenience, hereinafter, the parties will be referred as per their array before the learned Senior Civil Judge, Sangareddy.
3. The brief facts of the case as can be seen from the record available before the Court are that the plaintiff filed suit for recovery of money against the sole defendant. The plaintiff on the apprehension that defendant may withdraw the money in the bank has filed an application under order XXXVIII Rule 5 read with Section 151 of the Code of Civil Procedure for attachment of the property. The learned Senior Civil Judge, Sangareddy has issued attachment proceedings against the defendant vide impugned orders. Aggrieved by the same, the present Civil Revision Petition is filed by the defendant.
2 MGP,J Crp_3247_2023
4. Heard learned counsel for the revision petitioner/defendant and perused the record.
5. The learned counsel for the revision petitioner/defendant contended that the impugned order is in contravention of the provision of Order XXXVIII Rule 5 of the Code of Civil Procedure and that neither the affidavit contains the basic ingredients as required under the said provision. In support of the said contention, the learned counsel for the revision petitioner relied upon a decision in Chairman and Managing Director, Rastriya Priyojna Nirman Nigam Limited and Others v. Rambachane Singh 1, wherein it was held by the High Court for the State of Andhra Prades as under:
"3. We are afraid that in passing the impugned order, the learned Judge has not kept in view the ingredients of Order 38, Rule 5 of the Code of Civil Procedure properly. An order under Order 38, Rule 5 is not to be passed merely for the asking for it and merely because of the fact that the garnishee has huge amount to pay in favour of the appellant. The law in this regard was discussed by this Court in, Sripathi Panditarajula Venkanna Babu v. Varalakshmi Finance Corporation, Rajahmundry, 1996 (4) ALD 453 (DB), wherein the steps necessary to be taken before an order is passed were clearly discussed. Such an order is not to be passed in a routine manner merely for the asking for it but that the Court has to be satisfied on tangible materials placed before it that there are attempts at alienation and that the steps are taken so as to delay or obstruct the judgment that may be ultimately passed against the defendant. Before passing an order, the defendant is first of all to be called upon to furnish security in the shape of specific sum to produce and place at the disposal of the Court, when required, the property specified by the plaintiff in his petition or such portion of it is as may be sufficient to satisfy the decree or call upon him to show cause as to why he shall not furnish security. But such an order can be passed only after the primary satisfaction of the obstructive 1 AIR 1998 AP 127 3 MGP,J Crp_3247_2023 conduct of the defendant. The ultimate attachment order can be passed only if the defendant either fails to show cause why the security shall not be furnished or fails to furnish the security as required. From the impugned order in question, we do not find any discussion in that regard. The factors taken into consideration by the Court, as we have referred above, are not germane to passing an order under Order 38, Rule 5 of the Code of Civil Procedure. There is even no satisfaction, before the bank guarantee was called for, that the requisite primary satisfaction was reached and on what materials. The only allegation made by the respondent, as is reflected in Para 7 of the impugned order, is that if the appellants are allowed to take away the amounts from the garnishee, they would leave the jurisdiction of the Court and in such case, it would be difficult for the respondent to realise the amount. This in itself is not sufficient to pass an order under Order 38, Rule 5 of the Code of Civil Procedure unless it is pleaded that by their impugned conduct, they were intending to delay or obstruct the judgment that may be passed."
6. As per Rule 5 of Order XXXVIII of the Code of Civil Procedure, Court is empowered to direct a 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. However, such order(s)/direction(s) may be passed by court, only on its satisfaction, by an affidavit or otherwise, that the defendant, "with an intent to obstruct or delay the execution of any decree that may be passed against him", is either about to dispose of the whole or any part of his property or is about to remove the whole or any part of his property from the local limits of jurisdiction of the Court. The 4 MGP,J Crp_3247_2023 consequences of defendant's non-compliance with the orders/directions issued under Order XXXVIII Rule 5 of the Code of Civil Procedure are provided under Rule 6 of the said Order, which may be, inter alia, in the form of attachment of the property of the defendant, as may be specified under the plaintiff's application/affidavit under Order 38 Rule 5 of the Code of Civil Procedure.
7. In Sardar Govindrao Mahadik v. Devi Sahai 2 the Honourable Supreme Court while dealing with the provisions under Order XXXVIII of the Code of Civil procedure observed that 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 and that it is a sort of a guarantee against decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree. It is pertinent to note that a perusal of the provisions under Order XXXVIII Rule 5 of the Code of Civil Procedure would make manifestly clear that the order of attachment may be passed by the courts only after issuance of notice to the defendant, inter alia, to furnish security or demonstrating the reasons for not complying with such requirement, as envisioned under sub-rule 2 (1982) 1 SCC 237 5 MGP,J Crp_3247_2023 (1) of the said provision. In fact, sub-rule (4) of Order XXXVIII Rule 5 of the Code of Civil Procedure, clearly enunciates that in case an order of attachment is made, "without complying with the provisions of sub-rule (1) of this Rule, such attachment shall be void". It is also be noted that the object of the provisions under Order XXXVIII Rule 5(4) of the Code of Civil Procedure is to protect the interest of the defendant, so that no order of attachment can be passed without complying with the provisions under sub-rule (1) thereof, otherwise the intention and spirit of Order XXXVIII Rule 5 would be defeated. Accordingly, as per Order XXXVIII Rule 6(1) CPC it is only 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". In the alternate, where a defendant assigns sufficient reason as to why he/she should not furnish security, or if he/she furnishes security. In Raman Tech. and Process Engineering Company v. Solanki Traders 3, the Honourable Supreme Court, while terming the power under the said provision as drastic and extraordinary, urged that the said power should not be 3 (2008) 2 SCC 302 6 MGP,J Crp_3247_2023 exercised mechanically or merely for the asking and that it should be used sparingly and strictly in accordance with the Rule. It was further held that the purpose of the provisions under Order XXXVIII Rule 5 of the Code of Civil Procedure is not to convert an unsecured debt into a secured debt. It is also to be seen that before exercising the power under Order XXXVIII Rule 5 of the Code of Civil Procedure, the Court should be satisfied that there is reasonable chance of, a decree being passed in the suit against the defendant i.e., the Court should be satisfied that the plaintiff has a prima facie case and only after recording such finding the Court has to examine whether the interest of the plaintiff should be protected by exercising the power under Rule 5 of Order XXXVIII of the Code of Civil Procedure.
8. In view of the above discussion and the principles laid down in the above said decisions, this Court is of the considered view that the trial Court ought to have issued notice to the revision petitioner/defendant to furnish security prior to issuing of attachment proceedings and any failure to furnish such security or demonstrating the reasons for not complying with such requirement, the order of attachment may be passed. But a perusal of the impugned order discloses that the trial Court 7 MGP,J Crp_3247_2023 has straight away passed the impugned order without giving an opportunity to the defendant to putforth his contentions. Moreover, the impugned order further discloses that only based on the contentions of the plaintiffs, the trial Court has passed the impugned order and no reason is assigned for issuing attachment proceedings. The impugned order is in complete violation of provisions under order XXXVIII Rules 5 and 6 of the Code of Civil Procedure and also the guidelines issued by various High Courts and the Apex Court. Therefore, there are patent errors apparent on the face of record in the impugned order and thereby, the impugned order is liable to be set aside. Hence, this Court is inclined to dispose of this Civil Revision Petition at the admission stage.
9. Accordingly, the Civil Revision Petition is disposed of by setting aside the order dated 21.02.2023 in I.A.No.217 of 2023 in O.S.No.47 of 2023 on the file of learned Senior Civil Judge, Sangareddy. There shall be no order as to costs.
Pending Miscellaneous applications, if any, shall stand closed.
_______________________________ JUSTICE M.G.PRIYADARSINI Date: 16.12.2023 AS