Karnataka High Court
Smt Ranjini vs Sri Uma Maheshwara Rao Bodapati on 4 April, 2024
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NC: 2024:KHC:13989
MFA No. 4074 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE R. NATARAJ
MISCELLANEOUS FIRST APPEAL NO. 4074 OF 2015 (CPC)
BETWEEN:
1. SMT. RANJINI
W/O LATE M.RAMACHANDRA,
AGED ABOUT 61 YEARS,
2. SRI. M.R. RAJATH
S/O LATE M.RAMACHANDRA,
AGED ABOUT 40 YEARS,
3. M.R. RAHUL,
S/O LATE M.RAMACHANDRA,
AGED ABOUT 38 YEARS,
4. M.R. RAKSHITH
S/O LATE M.RAMACHANDRA,
AGED ABOUT 35 YEARS,
THE APPELLANT NO.3 IS REPRESENTED BY
HIS GPA HOLDER - SMT. K.T. RAJINI, MOTHER
Digitally signed AND FIRST APPELLANT.
by
MARKONAHALLI
RAMU PRIYA
THE APPELLANTS NOS.1 TO 4 ARE
Location: HIGH
COURT OF R/AT NO.43, 5TH CROSS,
KARNATAKA
R.M.V. EXTENSION,
SADASHIVANAGAR,
BENGALURU-560080.
...APPELLANTS
(BY SRI. SANATH KUMAR SHETTY K., ADVOCATE)
AND:
SRI. UMA MAHESHWARA RAO BODAPATI
S/O B. SUBBA RAO,
AGED ABOUT 47 YEARS,
PRESENTLY R/A NO.2422,
S.EMBERS-LANE,
-2-
NC: 2024:KHC:13989
MFA No. 4074 of 2015
ARLINGTON-HITS,
CHICAGO IL, 60005, U.S.A.
REPRESENTED BY HIS GPA HOLDER
SRI. RAJENDRA PRASAD BODAPATI,
S/O SUBBA RAO BODAPATI,
R/A NO.8-3-230/IC/8,
ICRISAT COLONY, NEAR: VENKATAKGIRI, YOUSUFGUDA,
HYDERABAD-45.
...RESPONDENT
(BY SRI. PRABHUGOUD B TUMBIGI, ADVOCATE FOR M.T.NANAIAH
ASSOCIATES (GPA HOLDER))
THIS MFA IS FILED UNDER ORDER 43 RULE 1(q) OF CPC,
AGAINST THE ORDER DATED 15.04.2015 PASSED ON IA NO.VI IN
OS NO.2720/2009 ON THE FILE OF THE XXXI ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BANGALORE CITY, ALLOWING IA
NO.VI FILE UNDER ORDER 38 RULE 5 READ WITH SECTION 151 OF
CPC.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
JUDGMENT
The defendants in O.S.No.2720/2009 on the file of the
XXXI Additional City Civil and Sessions Judge, Bengaluru City
(henceforth referred to as 'Trial Court') has filed this appeal
challenging an order dated 15.04.2015 in terms of which, the
Trial Court allowed the application (I.A.No.VI) filed by the
plaintiff under Order XXXVIII Rule 5 read with Section 151 of
CPC and ordered conditional attachment of the property shown
in the schedule item Nos.1 to 4.
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2. The suit in O.S.No.2720/2009 was filed for recovery
of Rs.50,53,125/-. The plaintiff contended that the predecessor
of the defendants Mr. M. Ramachandra had agreed to sell an
agricultural land belonging to him in terms of a Memorandum of
Understanding dated 21.12.2005. He contended that a sum of
Rs.1,27,00,000/- was paid to the deceased - M. Ramachandra
towards part of the sale consideration. He claimed that the
said Mr. M. Ramachandra had conveyed 3 acres 11 guntas in
favour of the plaintiff and thereafter, expressed difficulty to
convey the remaining land. He claimed that the Memorandum
of Understanding/agreement of sale dated 04.06.2008 was in
respect of 4 acres of land. Mr. M. Ramachandra thereafter
agreed to convey 29 guntas of land and received further sum of
Rs.15,00,000/-. Thus, in all he had received a sum of
Rs.1,42,00,000/-. However, Mr. M. Ramachandra postponed
the conveyance of 29 guntas of land. He claimed that Mr. M.
Ramachandra died on 13.12.2008 without conveying the land
in favour of the plaintiff. After his death, the plaintiff
approached the defendants and requested them to conclude the
transaction and also to refund a sum of Rs.22,00,000/- which
was the excess amount received by Mr. M. Ramachandra. The
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plaintiff claimed that as the land was not conveyed, they were
liable to pay a sum of Rs.21,75,000/- apart from interest,
which all worked out to Rs.43,75,000/-.
3. The suit was contested by the defendants who
claimed that they were not aware of the transaction entered
into by Mr. M. Ramachandra and therefore, they were not
bound to comply with the demand made by the plaintiff.
4. Along with the suit, an application was filed by the
plaintiff under Order XXXVIII Rule 5 read with Section 151 of
CPC to attach the properties belonging to Mr. M. Ramachandra,
which was set out in the application. The plaintiff claimed that,
"He learnt through a reliable source i.e., through Dr. G.K.
Arjun, Proprietor of KCK Properties, a Real Estate Agent that
the defendants are trying to alienate the schedule property
which stood in the name of defendant No.2 by taking undue
advantage of the situation and thereby caused severe loss to
the plaintiff, which would result in miscarriage of justice."
5. The application was also contested by the
defendants, who claimed that the plaintiff did not satisfy the
requirements to pass an order under Order XXXVIII Rule 5 of
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CPC. They claimed that Dr. Arjun, who was quoted by the
plaintiff in the application was a stranger to their family and
that the assertions made in the affidavit that the defendants
are trying to encumber the properties mentioned in the
schedule to the application, are all false.
6. Based on these contentions, the Trial Court passed
the impugned order allowing the application filed by the plaintiff
and passed an order of conditional attachment attaching the
properties mentioned in the schedule to the application and
thereafter, called upon the defendants to furnish the security to
the extent of the suit claimed, failing which, the order of
conditional attachment would become absolute.
7. Being aggrieved by the said order, the defendants
are before this Court in this appeal.
8. The learned counsel for the defendants specifically
contended that the impugned order is null and void in as much
as there was no compliance of Order XXXVIII Rule 5(1) of CPC.
He referred to the Order XXXVIII Rule 5(4) of CPC and
contended that any order passed without complying the
procedure set out in Order XXXVIII Rule 5(1) of CPC would be
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null and void and inoperable. He contended that the Trial Court
must have called upon the defendants to furnish security to the
satisfaction of the Court after being satisfied that the
apprehension expressed by the plaintiff that the defendants are
trying to dispose off the properties or that they are trying to
commit an act of insolvency. He contended that without
complying with the latter, the Court could not have passed an
order directing the conditional attachment of the properties.
He submits that the impugned order therefore, falls foul of the
Order XXXVIII Rule 5(4) of CPC. He further contends that the
properties mentioned in the schedule to the application are no
longer with the defendants as they already sold it on
26.02.2015, while the application for attachment was filed
before the Trial Court thereafter. Therefore, he contends that
the defendants were no longer owners of the properties sought
to be attached as on the date of filing the application and
hence, properties could not be attached.
9. Per contra, learned counsel for the plaintiff
contended that the amount payable by the predecessor of the
defendants was the excess amount received towards sale of
property belonging to him. He therefore, contended that the
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defendants could not deny the receipt of extra consideration by
their predecessor. He contends that even if the defendants did
not conclude the transaction in respect of the land which was
agreed to be sold, the defendants were bound to refund the
excess consideration as the land, which is not conveyed to the
plaintiff is now inherited by them. He contends that the
plaintiff had specifically stated in the affidavit accompanying
the application that the defendants are trying to encumber the
properties so as to ensure that the plaintiff does not have any
means to recover the money from the defendants. He submits
that the very fact that the defendants have sold the property
just a day before the application was filed for an order of
attachment before the judgment, establishes the oblique intent
on the part of the defendants to somehow defeat a decree, if
passed against them. He thus contends that in the facts and
circumstances of the case, the order passed by the Trial Court
conditionally attaching the properties is just and proper.
10. I have considered the submissions made by the
learned counsel for the defendants as well as the learned
counsel for the plaintiff.
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11. The provisions of Order XXXVIII Rule 5 of CPC are
designed to ensure that a person who succeeds in a proceeding
is not deprived of the benefits of the decree by an act of the
defendant in disposing of the whole or any part of his property
or removing the whole or any part of his property from the
local limits of the jurisdiction of the Court or in committing any
acts of insolvency. However, an order under Order XXXVIII
Rule 5 of CPC cannot be granted for the mere asking as the
purpose of Order XXXVIII Rule 5 of CPC is not to convert an
unsecured debt into a secured debt. The Court is bound to be
satisfied that before passing an order under Order XXXVIII Rule
5 of CPC., the defendant had a clear intention to dispose of any
part of his property or was trying to remove any part of his
property from the local limits of the jurisdiction of the Court or
was attempting to commit any acts of insolvency. In the case
on hand, the claim of the plaintiff was based on a
memorandum of understanding dated 21.12.2005 entered into
between the predecessors of the defendants and the plaintiff
regarding purchase of a certain property. The plaintiff claimed
that as per the memorandum of understanding entered into
between them, the predecessors of the defendants had agreed
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to convey land at the rate of Rs.30,00,000/- per acre and had
conveyed a portion of the land. However, when it came to
conveying the remaining portion, the predecessor of the
defendants postponed it on one or the other ground and
received additional sale consideration of Rs.15,00,000/- but did
not conclude the transaction. Resultantly, the property that
was not conveyed by the predecessor of the defendants was
inherited by the defendants and therefore, they were bound to
repay the amount payable by their predecessor. The plaintiff
who apprehended that the defendants had a serious intention
to dispose off the properties, mentioned the name of an agent
in the application who purportedly got wind of the information
that the defendants were trying to sell the suit properties. The
plaintiff therefore had done everything to establish before the
Trial Court that his apprehension was genuine. The fact that the
defendants have disposed of the suit properties just a day prior
to filing of the application (I.A. No.VI) establishes that the
apprehension of the plaintiff that the defendants are trying to
dispose of their property to avoid the effect of a judgment that
could be passed against them, was genuine and reasonable.
However, the Trial Court must have complied with the
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requirement of provisions of Order XXXVIII Rule 5 of CPC., by
directing the defendants to furnish security. It is only upon the
failure of defendants to furnish such security that a conditional
order of attachment could be passed.
12. Sub-rule (4) of Rule 5 of Order XXXVIII of CPC was
inserted by Act No.104 of 1976 which made it mandatory to
comply with the provisions of sub-rule (1) of Rule 5 of Order
XXXVIII of CPC failing which such attachment would be void.
In the case on hand, a perusal of the impugned order shows
that the Trial Court did not resort to the procedure
contemplated under Order XXXVIII Rule 5 (1) of CPC., but
passed a conditional order of attachment in respect of suit
schedule item Nos.1 to 4 properties mentioned in I.A. No.VI
and thereafter, called upon the defendants to furnish security
failing which it was ordered that the conditional order of
attachment would become absolute. Therefore, the impugned
order falls foul of the provisions contained in Order XXXVIII
Rule 5(4) of CPC. Even otherwise, since the properties sought
to be attached were no longer in the hands of the defendants
and were disposed of even prior to the filing of the application
(I.A. No.VI). Hence, the Trial Court could not have directed the
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attachment of the suit schedule item Nos.1 to 4 properties. In
that view of the matter, the impugned order deserves to be
interfered with.
13. Consequently, this appeal is allowed and the
impugned order dated 15.04.2015 passed by the XXXI
Additional City Civil and Sessions Judge, Bengaluru, on I.A.
No.VI in O.S. No.2720/2009 is set aside and the application
(I.A. No.VI) filed by the plaintiff under Order XXXVIII Rule 5
read with Section 151 of the Code of Civil Procedure, 1908 is
rejected. Since the suit is filed in the year 2009, the
Trial Court is directed to dispose off the suit - O.S.
No.2720/2009 in accordance with the Karnataka (Case Flow
Management in Subordinate Courts) Rules, 2005.
14. In view of disposal of this appeal, I.A. No.1/2015
for stay does not survive for consideration and the same stands
disposed off.
Sd/-
JUDGE
PMR - para 1 to 10
SMA - para 11 till the end
