Calcutta High Court

Surendra Singh Bengani vs Jagdish Kamal Gulati on 25 April, 2023

ORDER SHEET
                                                                                 OD-23.

                     IN THE HIGH COURT AT CALCUTTA
                   ORDINARY ORIGINAL CIVIL JURISDICTION

                              IA No. GA/1/2022
                                      In
                                 CS/6/2022
                          SURENDRA SINGH BENGANI
                                   VERSUS
                           JAGDISH KAMAL GULATI

  BEFORE:
  The Hon'ble JUSTICE ARINDAM MUKHERJEE

Date: 25th April, 2023.

Appearance:

Mr. Rohit Banerjee, Adv.

Mr. Virendra Singh Bengani, Adv.

For the plaintiff.

The Court :- Affidavit of service filed in Court today is taken on record.

Despite repeated adjournments and notices being served as directed by

the Court, the defendant remained unrepresented. On 11th April, 2023 for which

the plaintiff/petitioner was directed to serve a fresh notice with a corrigendum

that orders will be passed in the absence of the defendant if he fails to appear on

the next date. The defendant remained absent even yesterday (24.04.2023). It

appears from the track report annexed to the affidavit of service that the

addressee left without instructions and as such the article booked on 12th April,

2023 under EW369609386IN could not be delivered. Another attempt was made

by the plaintiff on 18th April, 2023 by sending the article under EW369736637IN.

This article has, however, been delivered. Despite such delivery the defendant

remains unrepresented and as such the matter is taken up for hearing.

The plaintiff had lent and advanced a sum of Rs.25,00,000/- (twenty five

lakhs) on 8th July, 2016 to the defendant. The money was sent through Real

Time Gross Settlement (RTGS) as reflected in the accounts of the plaintiff

maintained with Axis Bank, a copy whereof is annexed at page 19 of the

application. The instruction given by the plaintiff to transfer the money to the

defendant through RTGS is annexed at page 18. There is a document annexed at

page 20 wherefrom it appears that the receipt of the sum of Rs. 25,00,000/- has

been acknowledged by the defendant and there is also a promise to pay on

demand by the said defendant. The defendant has from time to time paid interest

on the said sum of Rs. 25,00,000/- through cheque and/or bank transfer, which

are also reflected in the bank account statement of the plaintiff. The last of such

payment was made on 3rd May, 2018 and as such no part of the plaintiff's claim

in this suit instituted in January, 2022 is prima facie barred by the laws of

limitation keeping in mind the orders passed by the Hon'ble Supreme Court in

suspending the operation of Limitation Act, 1963 between 15th March, 2020 and

28th February, 2022 and even thereafter in certain cases.

The defendant has filed an opposition in this proceeding. On a perusal of

the said affidavit it is apparent that apart from bare denial there is no positive

statement denying the contents, veracity and genuineness of the document

annexed to the application by which the plaintiff has prima facie established the

payment of Rs.25,00,000/- to the defendant, the defendant's acknowledgement

of reciept and promise to pay on demand. The receipt of the money through

RTGS and the amounts said to have been paid by the defendant as interest

against loan has also not been denied.

In absence of denial of the acknowledgment of money as also an

undertaking to pay on demand as appears from the plaintiff's document coupled

with interest prima facie establish the plaintiff's case. That apart the defendant

has remained absent for a considerable period of time which gives rise to a

presumption that the defendant is attempting to avoid the Court to delay and

defeat the plaintiff's claim.

In Raman Tech & Process Engg. Co.-Versus- Solanki Traders reported

2008 (2) SCC 302 the Hon'ble Supreme Court held that the object of

supplementary proceedings which includes application for arrest or attachment

before judgment, grant of temporary injunction and appointment of receiver is to

prevent the ends of justice being defeated. In paragraphs 4,5 and 6 of the said

judgment which extracted hereinbelow the Hon'ble Supreme Court has dealt with

the provision of Order 38 Rule 5 of the Code of Civil Procedure, 1908 (in short

CPC).

"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. 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 plaintiff by obtaining orders of attachment before judgment and forcing the defendant 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. Court should also keep in view the principles relating to grant of

attachment before judgment. (See Premraj Mundra v. Md. Manech Gazi for a clear summary of the principles)."

In [Rajendra & Ors.-Versus-Shankar Sundaram & Ors] reported in

2008 (2) SCC 724 the Hon'ble Supreme Court has held that while exercising the

jurisdiction under Order 38 Rule 5 of CPC, the Court is required to form a prima

facie opinion and need not go into the correctness or otherwise of all the

contentions raised by the parties.

Applying the aforesaid principles to the facts of the case the plaintiff has

been able to make out a prima facie case, there is every likelihood of a decree

being passed in his favour, the avoidance of Court by the defendant gives rise to

a strong presumption that the defendant is attempting to delay and if possible

defeat the claim of the plaintiff.

In the aforesaid facts and circumstances and taking into account the