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.
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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
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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
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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
(1982) 1 SCC 237
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(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
(2008) 2 SCC 302
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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
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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
