Surabathula Bhaskara Rao vs Alamuri Sankara Rao
2022 Latest Caselaw 8298 AP

         THE HON'BLE Ms. JUSTICE B. S. BHANUMATHI

             Civil Revision Petition No.1120 of 2021

ORDER:

This civil revision petition, under Article 227 of the

Constitution of India, by the petitioner-defendant is directed against

the order, dated 22.02.2021, of the learned VIII Additional District

Judge, Vijayawada, allowing I.A.No.650 of 2020 in O.S.No.51 of

2020, filed under Order XXXVIII Rule 5 and Section 151 CPC

seeking conditional attachment before judgment of the petition

schedule property till disposal of the suit.

2. Heard Sri Samboju Bala Gopal, learned counsel for the revision

petitioner/defendant and Sri K. Jyothi Prasad, learned counsel for

the respondent/plaintiff.

3. Facts, in brief, are that the defendant, who is the brother-in-

law of the plaintiff, borrowed an amount of Rs.76,00,000/- on

31.07.2019, for his family expenses and business purposes and

after receipt of the said amount, the defendant executed a

promissory note on the even date in favour of the plaintiff at

Vijayawada, agreeing to repay the said amount with interest @24%

per annum to the plaintiff. In spite of several repeated demands

made on behalf of the plaintiff, the defendant did not choose to

repay the debt under the aforesaid promissory note. Finally, on 2 BSB, J C.R.P.No.1120 of 2021

11.12.2020, the plaintiff got issued a legal notice calling upon the

plaintiff to discharge the debt due under the suit promissory note.

But, the defendant did not pay the amount. The defendant is

having a three-storied commercial building bearing D.No.33-25-6

situate in Bellapu Sobhanadri Street, Suryaraopet, Vijayawada, and

the plaintiff learnt that the defendant is trying to sell away or

transfer the schedule property, by way of creation of collusive

documents to defeat the rightful claim of the plaintiff. If the

defendant is allowed to do so, the plaintiff would not be in a position

to recover the suit amount even though the decree is being passed

in his favour. Hence, the plaintiff is constrained to file the present

petition seeking attachment of the petition schedule property before

judgment against the defendant.

4. The defendant filed counter opposing the petition. It is

further averred in the counter that the defendant never borrowed

any amount from the plaintiff as he has no necessity to borrow

amounts. The plaintiff has no capacity to lend such huge amount to

the defendant and taking advantage of the innocence of the

defendant, the plaintiff created fabricated and forged documents

and filed this false suit. The plaint schedule property is mortgaged

with Capital First on 11.07.2016, which was later merged with IDFC

Bank, Vijayawada. The defendant filed a case against the IDFC

Bank in Debt Recovery Tribunal, Visakhapatnam, seeking stay of all 3 BSB, J C.R.P.No.1120 of 2021

further proceedings and the same was pending. The plaintiff, with

an illegal motive to grab the schedule property, obtained orders by

misleading the court. The plaintiff has not approached the Court

with clean hands. The petition is liable to be dismissed.

5. During the course of inquiry, exhibits R1 to R4 were marked

on behalf of respondent/defendant. No documents were marked for

the plaintiff. The trial Court, on merits, allowed the petition and

made absolute the conditional order of attachment passed on

22.11.2020, subject to the mortgage debt covered under exhibit R1

(first charge on the schedule property).

6. Feeling aggrieved of the aforesaid order, the defendant

preferred this revision petition. In the grounds of revision, the

revision petitioner mainly contended that the trial Court failed to

note that the petition schedule property was already under a

mortgage under exhibit R1 with the Capital First Limited (now

merged with IDFC Bank), Vijayawada branch on 10.03.2016, and

therefore, the question of alienating the said property does not

arise. The trial Court ought to have seen that IDFC Bank took

possession of the schedule property under the Securitization and

Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002, and the mortgage debt of IDFC Bank is more

than the value of the petition schedule property. The trial Court 4 BSB, J C.R.P.No.1120 of 2021

ought to have observed that the plaintiff did not file any third party

affidavit to substantiate the allegation of alienation of the schedule

property, as alleged. The other reasons given by the trial Court

while allowing the petition are unsustainable. The order impugned

is liable to be set aside.

7. The revision petition has been mainly opposed on the ground

of its maintainability stating that the petitioner ought to have filed

an appeal since the order impugned in the revision is passed under

Order XXXVIII Rule 6 CPC, but not under Order XXXVIII Rule 5 CPC.

In this regard, learned counsel for the revision petitioner submitted

that since the procedure contemplated under Order XXXVIII Rule 5

(1) CPC has not been complied with, it is void under sub-rule (4) of

Order XXXVIII CPC, and therefore, the order is to be treated as one

being challenged on the ground of Order XXXVIII Rule 5 CPC, but

not under Order XXXVIII Rule 6 CPC.

8. On the other hand, learned counsel for the respondent

submitted that Order XXXVIII Rule 5 CPC contemplates issuance of

show-cause notice and/or asking the respondent to furnish security

and after conducting enquiry under Rule 6, a final order would be

passed as in the present case, and therefore, the final order falls

within Rule 6 and not Rule 5 of Order XXXVIII CPC.

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                                                         C.R.P.No.1120 of 2021

9. For better appreciation of the arguments of the learned

counsel for both sides, it is apropos to mention hereunder both the

provisions and they read as under:

Order XXXVIII 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.

Order XXXVIII Rule 6:

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 6 BSB, J C.R.P.No.1120 of 2021

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."

10. In the present case, after appearance of the respondent/

defendant by filing counter and on hearing both sides and taking

into consideration the documents filed by the respondent in

evidence as exhibits R1 to R4, the trial Court allowed the petition

and the earlier ex parte order of conditional attachment passed by

that court on 22.02.2020 was made absolute subject to the

mortgage debt covered under exhibit R1, which is first charge on

the schedule property. Therefore, on a reading of Order XXXVIII

Rules 5 & 6 CPC together, there is no hesitation in holding that the

order impugned is one passed under Rule 6 but not under Rule 5.

11. Learned counsel for the revision petitioner relied on the

decision of this High Court in P.R Agencies rep. by its Proprietor

and others v Lakshmi Priya Exports (India) Private Limited 1,

wherein it was held that only revision lies against the orders passed

under Order XXXVIII Rule 5 CPC since Order XLIII Rule 1(q)

provides appeal only against Order passed under Order XXXVIII

1 2013 (3) ALT 663 7 BSB, J C.R.P.No.1120 of 2021

Rules 3 or 6 CPC. There is no dispute about the said legal

proposition.

(ii) Learned counsel for the petitioner also relied on the decision

in Prem Movies and another v. Ushakiron Movies Ltd. and

another2. In this case, the High Court observed that it is only

when the defendant failed to show cause why he should not furnish

security or fails to furnish required security within the time fixed by

the Court, the Court may order attachment of property and a Court

cannot straightaway allow the petition and direct the defendant to

furnish security to the extent of suit amount within 48 hours and

this court set aside the order passed therein without following the

procedure, and directed issuance of conditional attachment. In this

case, the initial procedure adopted under Rule 5 was found fault

since without conducting the inquiry under Rule 6, the trial Court

has passed final orders on an erroneous approach under Rule 5.

The facts of this case are not akin to the present case since there is

an order passed under Rule 5 after conducting inquiry.

(iii) Learned counsel further relied on the decision of the Supreme

Court in Raman Tech & Process Engineering Co. & Another v.

Solanki Traders3, wherein the object behind Order XXXVIII Rule 5

CPC is discussed. Therefore, learned counsel submitted that unless

2 2005 (1) Andh. L D 68 3 (2008) 2 SCC 302 8 BSB, J C.R.P.No.1120 of 2021

there is a threat of alienating the property, the Court is not justified

in passing the order of attachment as the property was already

mortgaged with the Bank and there is no possibility for the

respondent/defendant to alienate the property. However, it is a

matter to be considered only in appeal but not in revision.

(iii) Learned counsel further placed reliance on the decision in

Palghar Rolling Mills Pvt. Ltd. V. Visvesvaraya Iron and Steel

Ltd. and another4, wherein it is observed that the High Court

cannot keep silent against an inherently illegal and void order and it

is the bounden duty of the Court to exercise its jurisdiction under

Section 151 CPC and revise such void orders.

Taking a clue from this decision, learned counsel for the

revision petitioner submitted that since it is his contention that the

impugned order is void under Rule 5, the order is revisable.

12. As is already noted the provision under which the trial Court

passed the order impugned is Order XXXVIII Rule 6 CPC after

enquiry and can be challenged as an appealable order under Order

XLIII, Rule 1 (q), it cannot be challenged as an order passed under

Order XXXVIII Rule 5 CPC.

13. This view is fortified by the decision of the Division Bench of

this High Court relied by the learned counsel for the respondent in

New India Assurance Company Limited v. Bhagyanagar

4 AIR 1985 KARNATAKA 282 9 BSB, J C.R.P.No.1120 of 2021

Ventures Limited5, wherein it was held that the order of

attachment before judgment can be issued under Order XXXVIII

Rule 6 CPC, only if the defendant fails to show cause for not

furnishing security or fails to furnish security as per the notice/order

issued under Order XXXVIII Rule 5 CPC and that law contemplates

appeal only at the stage of attaching the property actually and not

at the stage of show cause notice.

14. Since the aforesaid legal proposition is in consonance with the

legal proposition discussed in P.R Agencies (1 supra), this Court is

of the view that the present case is not maintainable as a revision.

15. At this juncture, learned counsel for the revision petitioner

requested this Court to permit the revision petitioner to convert the

revision as a Civil Miscellaneous Appeal since Civil Miscellaneous

Appeal lies before the High Court only, in the event, this Court

comes to the conclusion that the revision is not maintainable.

16. Since the proceedings in the revision are bona fidely taken,

while holding that the revision is not maintainable, the revision

petitioner is given permission to convert this revision into a Civil

Miscellaneous Appeal.

________________ B.S BHANUMATHI, J 03rd November, 2022 RAR

5 2010 (3) ALT 70 (D.B)