Janak Datwani vs C.N.A. Exports Pvt. Ltd. & Ors.
2010 Latest Caselaw 3936 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      IA No. 848/2010 in CS(OS) NO. 1113/2007

                                       Date of Decision : 25.08.2010

Janak Datwani                                     ......     Plaintiff

                                Through:   Mr. Arvind Nigam, Sr. Adv.
                                           with Ms. Tara Ganju, Adv.
                                           for the plaintiffs.
                                  Versus

C.N.A. Exports Pvt. Ltd. & Ors.                  ....... Defendants
                           Through:        Mr. Abhinav Vashisht, Adv.
                                           for the defendant nos. 1, 8
                                           to 10.
                                           Mr. Ravinder Sethi, Sr. Adv.
                                           with Mr. Neeraj Malhotra,
                                           Adv. for the defendant no.3.
                                           Mr. Jayant Bhushan, Sr.
                                           Adv. with Mr. Arjun Bawa,
                                           Adv. for the defendant nos.
                                           2 and 4.

CORAM :
HON'BLE MR. JUSTICE V.K. SHALI
1.     Whether Reporters of local papers may be
       allowed to see the judgment?                         NO
2.     To be referred to the Reporter or not ?              NO
3.     Whether the judgment should be reported
       in the Digest ?                                     NO


V.K. SHALI, J. (Oral)

IA No. 848/2010

1. This order shall dispose of an application under Order XXXVIII

Rule 5 read with order XXXIX Rules 1 and 2 read with section 151

of the Code of Civil Procedure.

2. Briefly stated the facts as alleged in the application are that the

present plaintiff filed a suit for declaration and permanent

injunction against the defendant nos. 1 and 2. It was alleged that

the defendant no. 1 is a family owned company in which the

member of the Datwani family were having the following share

holding:

a) Smt. Jamna Datwani (mother) : 22.7% shares

b) Kishan Datwani (Son) : 13.33% shares

c) Janak Datwani (son) : 13.33% shares

d) Mrs. Nitya Bharney Nee Datwani (daughter) : 22.21% shares

e) Anand Datwani (son) : 13.33% shares

3. It is alleged that the defendant no. 2 under a well planned

conspiracy, forged and fabricated documents to transfer the shares

of the plaintiff, as also shares held by Smt. Sushma Ravi Dass and

Smt. Nitya Bharney Nee Datwani as also other share holders to

himself. The defendant no. 2 therefore in a span of one week

became the owner of more than 99% share holding of the

defendant no. 1 from mere holding of 13.5%.

4. It is stated that the suit was listed for hearing on 31.05.2007, the

defendant no. 2 has made a false statement before the Court that

the suit property being plot no. 4 admeasuring 24200 sq. yards at

Section 18, Gurgaon, Haryana owned by defendant no.1 company

was under a Joint Venture Agreement for development with the

third party. It is on the basis of this representation of the

defendant no. 2 that the Court did not pass any ad interim order

restraining the defendants in any manner whatsoever. It is alleged

that on 23.10.2007 the defendant no. 2 in the capacity of the

holder of 99% shares of the defendant no. 1 company had got the

existing structure of the suit property demolished. It is further

alleged that this fact was taken note of by the Court in its two

orders dated 19.03.2009 and 20.05.2009 wherein not only it

expressed its indignation at the false statement purportedly made

by the defendant no. 2 but also deprecated the alleged

reprehensible conduct of the defendant no. 2. It is stated in the

backdrop of this factual matrix, that the defendant no. 2 as on the

basis of forgery, conspiracy, mis-statement and fabrication

manipulated the transfer of shares purportedly from the plaintiff

and other co-sharers in his own favour and obtained nearly Rs. 21

crores from the M/s Pacifica Group of Companies to his own

benefit and to the detriment of the plaintiff. It is stated that since

the entire case of the defendant no. 2 is based on falsehood and

forgery, therefore, he should not be permitted to take advantage of

these facts and be permitted to retain the said amount of Rs. 21

crores. It is urged that he should be asked to deposit the same

with the Court. The plaintiff has also made usual averments in the

application that the plaintiff has got prima facie a good case and is

likely to suffer an irreparable loss and the balance of convenience

is also in favour of the plaintiff, and therefore, two directions have

been prayed for. Firstly, the prayer in the IA is that the defendant

no. 2 be directed to deposit Rs. 21 crores with the Court and

further he should not be permitted to leave the jurisdiction of this

Court during the pendency of this application and to deposit his

passport. The application is supported by an affidavit of Shri

Rakesh Gupta, the attorney of the appellant.

8. I have heard the learned counsel for the plaintiff and have also

gone through the record.

9. At the outset, I must say that the application which has been filed

by the plaintiff is totally misconceived, vexatious and without any

merit. The Order XXXVIII Rule 5 of the Code of Civil Procedure

provides for an attachment before the judgment. The said Order

reads as under:

"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.

9. A perusal of the aforesaid Rule would show that before an order of

attachment of the property is passed or alternatively he is directed

to furnish any security the following conditions must be satisfied.

These are that the Court must be satisfied either by affidavit or

otherwise that the defendant with intent to obstruct or delay the

execution of a decree that may be passed against him is likely to

dispose of the property or remove whole or part thereof.

10. In the instant case, not even a single averment has been made by

the plaintiff in the application that the defendants with intent to

obstruct or delay the execution of any decree which may be passed

against them or is trying to remove the property or to sell the

property. On the contrary, the allegation against him is that he

has got the share of the plaintiff and some of other co-shares

transferred in his own name on the basis of forged documents and

that he has made mis-statement before the Court on 31.5.2007

that he has entered into a Joint Venture Agreement with a third

party for development of a piece of land belonging to the company

while as there was none. It is stated that it is because of this

misrepresentation that the Court did not purportedly pass any

restraint order against him and subsequently it transpired that

after misleading the Court not to pass ad interim order, he entered

into a collaboration agreement and obtained purportedly benefit of

Rs.21 crores from the said party. Therefore, these averments

which have been made by the plaintiff in the application do not

satisfy the requirement of passing any order of attachment before

the judgment or directing him to furnish security to the Court, so

that in the event of any decree being passed in favour of the

plaintiff the same is either executable against the judgment debtor

or that the judgment debtor is available to the Court for taking

such necessary steps as may be permissible in law. The

application is drafted as if the plaintiff is claiming an interim relief

though he is seeking attachment before judgment.

11. For the reasons mentioned above, I am of the considered opinion

that no doubt there may be some merit in the contention of the

learned counsel for the plaintiff that the defendant no. 2 made a

mis-representation, before the Court, because of which an ad

interim order could not be passed but that would not be sufficient

to pass an order of attachment before judgment or direct the

defendant no. 2 to furnish security to the tune of Rs.21 crores as is

sought to be done by the plaintiff, therefore, the application of the

plaintiff is totally misconceived, vexatious and without any merit,

and accordingly, the same is dismissed with the cost of Rs.5,000/-

with the Delhi High Court Lawyers Welfare Fund.

CS(OS) No. 1113/2007

Post the matter before the learned Joint Registrar on 08.10.2010.

List before this Court on 19.01.2011.

V.K. SHALI, J.

AUGUST 25, 2010 KP