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Gangappa Vs. Boregowda and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 489 of 1950-51
Judge
Reported inAIR1955Kant91; AIR1955Mys91
ActsCode of Civil Procedure (CPC), 1908 - Sections 107(2) - Order 21, Rules 57, 58, 60 and 63 - Order 38, Rules 5, 8 and 9; Code of Civil Procedure (CPC), 1882 - Sections 488
AppellantGangappa
RespondentBoregowda and ors.
Appellant AdvocateM.K. Srinivasa Iyengar, Adv.
Respondent AdvocateB. Venkata Rao, Adv.
Excerpt:
.....relief granted to plaintiff even before his claim adjudicated upon and found true - if suit is dismissed either for default or on its merit by trial court and attachment before judgment has to cease - by virtue of order 38 rule 9 which specifically laid down that attachment before judgment shall be by dismissal of suit. - karnataka value added tax act, 2003 [k.a. no. 30/2005] section 35 (1): [d.v.shylendra kumar,j] failure to file periodic return and the tax within the permitted time stipulated under penalty levied under section 72 (1) challenge as to - declaration sought to declare that the provision of sub-section (1) of section 72 of the act is unconstitutional, being violative of articles 14 and 19 of the constitution of india and also beyond the legislative..........them duly attached. his suit was dismissed by the trial court and subsequent to such dismissal the suit property which was one of the items attached was sold by him to the plaintiff. on first appeal the suit was decreed and that decree was confirmed in a second appeal. in execution of that decree the properties which had been attached before judgment were brought to sale and the suit item was purchased in court auction by defendant 2. in a suit by the plaintiff for declaration of his title arid injunction it was contended that by reason of the prior attachment before judgment and the consequent court sale in favour of defendant 2, the plaintiff had derived no title by his purchase.2. the earliest case in which the matter appears to have been considered by this court is in 19 mys ocr 275.....
Judgment:
ORDER

Venkata Ramaiya and Balakrishnaiya, JJ.

In a suit on a pronote, the plaintiff obtained an attachment before judgment. The suit was dismissed in the trial Court. Subsequent to the dismissal of the suit the property was sold by the original owners to third persons. On appeal from the judgment of dismissal the suit was decreed and that decision was confirmed in the second appeal. In pursuance of the ultimate decree the properties which were attached before judgment in the trial Court were brought to sale and were purchased by strangers and the said rule having been confirmed, the properties were delivered by the court to the purchasers. The material point on which the decision in this appeal turns is whether the attachment before judgment, which ceased with the dismissal of the suit, is revived, when the decision of dismissal is reversed by the emperor Court. In 32 Mys C. C. R. 97 (A), it is laid down that

'the reversal of the judgment of dismissal on appeal does not operate to revive the attachment or the surety's liability in every case irrespective of the terms of the bond.'

In another case reported in 49 Mys HCR 220 (B) this position is doubted by the observation that

'whether the view that an attachment before judgment would cease the moment the suit is dismissed by the Court of first instance according to the provisions of Ors. 38, R. 9, is correct or not....'

Both these cases related to the continuing liability of the surety. In the present case the question of continuing liability of the property attached is raised. This aspect came up directly for decision in a recent Full Bench case of the Travancore Cochin High Court (Vide --- 'Muhammad Abdul Khadir v. Padmanabha Pillai', AIR 1952 Trav-C 414 (C) where it was definitely laid down that

'an attachment before judgment which ceased to be in force with the dismissal of the suit, will revive when the decree dismissing the suit is subsequently reversed and a decree in the plaintiff's favour is passed even by the same Court or by a superior Court and this revival will be in force from the date on which the attachment before judgment is effected as provided for in the Code.'

In view of the conflicting decisions in the various High Courts, it is felt that the question is not free from doubt and as the Judges composing the Bench differ in their opinion the Bench differ in their opinion it is referred for disposal by a larger Bench. The point of law is

'whether the attachment before judgment which ceased to be in force with the dismissal of the suit will revive when the decree dismissing the suit is subsequently reversed and a decree in plaintiff's favour is passed by the same Court or by a superior Court and if revived whether the revival will be in force from the date on which the attachment before judgment is effects as provided for in the Code.'

In pursuance of the order of the Division Bench on 29-1-54 this appeal came on for hearing, the court expressed the following opinion (16-12-1954) :

Vasudevamurthy, J.

1. This is a reference to the Full Bench by Venkata-ramaiya and Balakrishnaiya JJ. The point of law referred to us is :

'Whether the attachment before Judgment which ceased to be in force with the dismissal of the suit will revive when the decree dismissing the suit is subsequently reversed and a decree in plaintiff's favour is passed by the same Court or by a superior Court and if revived whether the revival will be in force from the date on which the attachment before judgment is effected as provided for in the Code.'

In a suit for recovery of monies due to him by defendant 4 on a promissory note, defendant 1 obtained an order of attachment before judgment of some immoveable properties and got them duly attached. His suit was dismissed by the trial Court and subsequent to such dismissal the suit property which was one of the items attached was sold by him to the plaintiff. On first appeal the suit was decreed and that decree was confirmed in a second appeal. In execution of that decree the properties which had been attached before judgment were brought to sale and the suit item was purchased in Court auction by defendant 2. In a suit by the plaintiff for declaration of his title arid injunction it was contended that by reason of the prior attachment before judgment and the consequent court sale in favour of defendant 2, the plaintiff had derived no title by his purchase.

2. The earliest case in which the matter appears to have been considered by this Court is in 19 Mys OCR 275 (D), where Chandrasekhara Aiyar and Wallace JJ. held that the dismissal of a suit does not by itself operate as a release of an attachment before Judgment, ordered in the course of the suit, and that such an attachment must be deemed to subsist unless and until it is expressly withdrawn by a further order of the Court. In that case the plaintiff's suit for recovery of money due on accounts was dismissed by the Munsiff, and on appeal decreed by the District Judge, who set aside the order of dismissal; and the point arose whether the attachment before judgment, which had been passed by the Munsiff, was available and operated as against a mortgage of the attached properties made by the defendants subsequent to the dismissal of the suit.

Chandrasekhara Aiyar J. considered that the circumstance that Section 488 of the Code of 1882 which applied to that case (corresponding to Order38, Rule 9 of the new Code) no doubt made it obligatory on the Court to remove the attachment when the suit was dismissed. He, however, thought that that provision seemed scarcely to warrant the conclusion that the attachment is to be deemed to have been removed even without an order of withdrawal and the circumstance that the Legislature had thought it necessary that a formal order of withdrawal should be passed tended rather to suggest that the attachment was intended to subsist till it should be formally withdrawn by an order. Wallace J. concurred with him and thought that if it was intended that the attachment should cease automatically on the furnishing of security or on the dismissal of the suit, the section would be worded in a manner similar to Order 21, Rule 57, Civil P. C.

3. The matter came up again for considerationin 32 Mys CCR 97 (A), before a single Judge Dora-swami Iyer J. In that case when the warrant ofattachment before judgment was taken to thedefendant he offered to give security. Thereuponthe respondents executed a surety bond holdingthemselves liable for payment of the decree amountin case a decree should be passed in favour ofthe plaintiff. The warrant was, in those circumstances, not executed and returned to the Court.The plaintiff's suit was later on dismissed by theMunsiff and his decision was confirmed in appealby the Subordinate Judge of Shimoga. In secondappeal, however, those judgments were reversedand a decree was passed in his favour. In themeantime the defendant applied, soon after thedismissal of the suit in the first Court, for thecancellation of the surety bond and obtained anorder to that, effect but without notice to theplaintiff.

Doraswami Iyer J., while confirming the order ofthe Court below that, the security bond had been properly cancelled, observed that the attachment would cease to have any effect as soon as the Court of first instance dismissed the plaintiff's suit; Order 38, Rule 9 provided that where an order is made for attachment before judgment the Court shall order the attachment to be withdrawn when the defendant furnishes security required or when the suit is dismissed; and it had been held in several cases that the attachment would be treated as having come to an end on the dismissal of the suit though no forma! order was made withdrawing the attachment since it is obligatory on the Court to withdraw the attachment on the dismissal of the suit.

In support of this conclusion he referred to --'Ramchand v. Pitam Mal, 10 All 506 (E); -- 'Sasi-rama Kuniari v. Meherban Khan', 13 Cal LJ 243 (F); -- 'Abdur Rahaman v. Amir Sharif, AIR 1918 Cal 39 (G) and -- 'Protap Chandra v. Sarat Chandra', AIR 1921 Cal 101 (H). He observed further that the reversal of the judgment of dismissal on appeal does not operate to revive an attachment which had been so cancelled and referred to -- 'Shanker v. Ram Kishen', AIR 1915 Lah 217 (I), and some other cases where it has been held that when a property is attached before judgment or when a surety on behalf of the defen-' dant makes himself personally liable and pledges property by way of security so as to save the defendant from attachment of his property, the attachment of the defendant's property or the liability of the surety in person or property, as the case may be, comes to an end if the first Court dismisses the suit and thereupon the surety's person and property cease to be liable in any way. He also observed that the liability of a surety under a bond which is but a substitution for the attachment before judgment and which really takes its place stands on the same footing. 19 Mys CCR 275 (D) was not brought to his notice when he decided this case so that when a similar matter arose before him he referred the matter for opinion of a Full Bench consisting of himself, Sreenivasa Iyer and Ramachandra Rao JJ. in 7 Mys LJ 369 (J).

4. It was held by the Full Bench in 7 Mys LJ 369 (J), that the decision reported in 19 Mys CCR 275 (D), was not correct in view of the provisions of Order 38, Rule 9, Civil'P. C. Doraswami Iyer C. J. wrote the leading judgment with'which the other two Judies concurred and he again relied on the cases already referred to by him in 32 Mys CCR . 97 (A), i.e. of the Allahabad and Calcutta High Courts and to the case reported in -- 'D. Manackjee v. R. M.N. Chettyar Firm (1)', AIR 1927 Rang 310 (K). He noticed that in Madras the trend of authorities had not been uniform and in that connection referred to -- 'Subbarama Iyyar v. Somalinga Subba Ayyar : AIR1925Mad114 ; -- 'Namagiri Ammal v. Muthu Velappa Goundan', AIR 1928 Mad 940 (M) and -- 'Seethai Ammal v. Narayana Ayyangar : AIR1928Mad976 . In the last case Madhavan Nair and Jackson JJ. had held that an attachment before judgment automatically terminated with the dismissal of the suit as contrasted with the view taken in AIR 1928 Mad 940 (M), by Phillips and Devadoss JJ.

5. In 49 Mys HCR 220 (B), the plaintiff obtained an order of attachment before Judgment and certain moveable properties of the defendant were attached. The attachment was subsequently raised on security being furnished. The suit was decreed in the trial Court, reversed in the first appellate Court and decreed again in the High Court in second appeal. On the surety, who was sought to be proceeded against, raising an objection that by the dismissal of the suit in the first appellate Court his liability ceased in accordance with the language of Order 38, Rule 9, Civil P.O. Venkataramana Rao C. J. and Singaravelu Mudaliar J. held that the terms of the bond by which the surety had undertaken to pay if a decree was passed against the defendant as prayed for in the plaint were general and that there was nothing in the language of the bond to confine the operation of those words to a decree to be passed by the Court of first instance. The obligation secured under a security bond would always depend upon the language of the bond; and by the bond before them the appellant had bound himself to satisfy any decree that may ultimately be passed against the defendant. That decision was therefore based on the terms of the surety bond.

In the course of their judgment Venkataramana Rao C. J. referred to the cases decided by this Court (sic) in 32 Mys OCR 97 (A); AIR 1927 Rang 310 (K) and -- 'Balaraju Chettiar v. Masilamani Pillai', AIR 1930 Mad 514 (FB) (O). He observed that in the last of the cases it was decided by the Pull Bench that an attachment before Judgment in a pending suit came to an end when the suit was dismissed and it was not revived on the appellate Court setting aside the dismissal, which conclusion was based upon the language of Order 38, Rule 9. The learned Chief Justice also referred to -- T. Veeraswami v. P. Ramanna', AIR 1935 Mad 365 (PB) (P), and observed :

'With due respect to the learned Judges (who decided AIR 1935 Mad 365 (FB) (P) ), we are not able to appreciate the distinction suggested between a suit dismissed after trial and a suit dismissed for default when construing the provisions of Order 38, Rule 9, Civil P. C. The language of Order 38, Rule 9 is general and would cover both a case of dismissal on merits and a case of dismissal for default.'

He distinguished the case before them from the case in 32 Mys CCR 97 (A), however, on the ground that the language of the surety bond in the latter case may have warranted the view taken in that case about the liability of the surety and cited with approval the observations of the Privy Council in -- 'Raj Raghubar Singh v. Jai Indra Bahadur Singh', AIR 1919 PC 55 (Q), to the effect that the extent of the obligation under a surety bond would always depend upon the language of the bond as construed with reference to the surrounding circumstances. He further observed that it was open to a surety to undertake a limited or wider obligation and there was nothing in the Code of Civil Procedure which limited the extent or scope of such an obligation. Order 38, Rule 9 of the Code in terms did not apply to a case of a surety bond executed in pursuance of an order under Order 38. Rule 5 of the Code.

Referring to the observation of Doraswami Iyer C. J. In 32 Mys COR 97 (A), that the attachment of a defendant's property or the liability of asurety in person or property comes to an end ifthe first Court dismisses the suit and that there-upon the surety's person and property cease tobe liable in any way, he pointed out, that theview that whenever a surety bond is given underthe provisions of Order 38 it really takes the placeof an order of attachment before judgment wasnot warranted by the provisions of that order;whether the view that an attachment before judgment would cease the moment the suit is dismissed by the Court of first instance, according to theprovisions of Order 38, Rule 9, is correct or not wouldnot warrant the view that the obligation undertaken by the surety comes to an end when thesuit is dismissed by the Court of first instance.He thought that to import the provisions of Order 38,Rule 9 in interpreting the provisions of a surety bondgiven for purposes of raising an attachment beforejudgment and to limit the obligations securedthereunder did not appear to him to be correct.Their Lordships were not therefore called upon anddid not decide in that case whether an attachmentbefore-judgment would cease on the dismissal ofa suit, and nowhere in the course of his judgmenthas the learned Chief Justice expressed himselfto the contrary.

6. In AIR 1930 Mad 514 (FB) (O), the Madras High Court have set at rest the earlier differences of opinion in that Court and decided overruling AIR 1928 Mad 940 (M), that upon a dismissal of a suit an attachment before judgment necessarily' ceases under Order 38, Rule 9, Civil P. C. even though the Court does not pass an order withdrawing it. In the course of the judgment the learned Judges point out that the duty to withdraw the attachment order when the suit is dismissed is one thrown directly on the Court and that no application from a party was necessary. They refused to accept the contention, that all property attached, whether moveable or immoveable, was in the custody of the Court and that therefore it could not be released from attachment without an order of the Court. The same view has been taken by the Allahabad High Court in 10 All 506 (E), and by the Calcutta High Court from so far back as 9 Ind Cas 918 (Cal) (F) and AIR 1918 Cal 39, (G), by the Bombay High Court in -- 'Chindha Rupla v. Chhaganlal Shivlal', AIR 1928 Bom 545 at p. 547 (R), and by the Rangoon High Court in AIR 1927 Rang 310 (K) In -- 'Gobinda Chandra Roy v. Abdul Rashid1 : AIR1928Cal235 , when the suit had abated and come to an end on the death of a party, an attachment before judgment was held to die with it.

7. The present reference has been made in view of the decision in AIR 1952 Trav-C 414 (FB) (C). The reasons expressed in it were apparently pressed upon the Division Bench as justifying a reconsideration of the view taken by our Court. Three questions arose for consideration in that case : (1) Whether an attachment before judgment which ceases to be in force with the dismissal of the suit, will revive when the decree dismissing the suit is subsequently reversed and a decree in the plaintiff's favour passed? (2) Whether an attachment which had been effected In execution of a decree and which should be deemed to have been raised with the setting aside of that decree would revive when a decree was subsequently passed in favour of the plaintiff? and (3) Whether an attachment before judgment shall cease to be operative when the execution application seeking to execute a decree pursuant to that attachment is dismissed for default of the decree-holder as contemplated in Order 21, Rule 57, Civil P. C. The two latter points do not arise for consideration in the present reference, but it might be mentioned that it has been decided in -- 'Byarnma v. Krishna Singh', 14 Mys LJ 65 (T) and -- 'Soogoolal v. Hyder Sab', 14 Mys LJ 140 (U), that an attachment before judgment does not become extinguished by reason of the dismissal of an application in execution asking for sale of the attached property and Order 21, Rule 57, Civil P. C. cannot be held to apply to an attachment before judgment.

Their Lordships of the Travancore-Cochin Court answered the first question in the affirmative, in that Court there was already some support for that view in 25 Trav LJ 320 (V), wherein the whole case law including the ruling in AIR 1930 Mad 514 (O), had been considered and opinion expressed that there was no reason why there should be any difference in the effect of attachment whether before or after judgment in a case where the claim petition was allowed and later on that order was reversed in a suit and a case where the suit was dismissed and restored to file and subsequently decreed. They also relied on the Full Bench decision of the Madras High Court in AIR 1935 Mad 365 (P), referred to in 30 CLR 510 (W) and --'Nayudamma v. Slvaraju Dharmachand', AIR 1943 Mad 515 (X), where it was held that when a suit dismissed for default was restored to file, the suit remained as it was on the day when it was dismissed and all interim orders till the disposal of the suit would revive.

8. The decision in the Pull Bench case of the Travancore-Cochin High Court is based mainly on a comparison of the incidents attendant upon the allowing of a claim under Order 21, Rule 60, Civil P. C. and the revival of that attachment as a result of a decision is a suit under Order 21, Rule 63. The actual words of Order 21, Rule 60 and Order 21, Rule 63 really lend no support to their Lordships' conclusion. Order 21, Rule 58 provides for an investigation of claims and objections to attached property. Order 21, Rule 60 provides that where upon the said investigation the Court is satisfied that for the reasons stated in the claim or objection the property was not, when attached, in the possession of the judgment-debtor or of some person in trust for him shall make an order releasing the property wholly or to such an extent as it thinks fit from attachment. Order 21, Rule 63 expressly provides that where a claim or objection is preferred the party against whom ah order is made may institute a suit to establish the right which he claims to the property dispute but subject to the result of such suit, if any, the order shall be conclusive.

Under Order 38, Rule 8 where any claim is preferred to property attached before Judgment, such claim shall be investigated in the manner provided in Order 21, Rule 58 for the investigation of claims of property ' attached In execution of decrees. But there is no provision in Rule 9 which provides that once an attachment before judgment has ceased when the suit is dismissed, and whether it is followed by an order withdrawing the attachment or not, the same will be revived when the suit once so dismissed is decreed again and restored to file on appeal, review or otherwise.

9. It is contended that an automatic cessation of an attachment before judgment, immediately a suit is dismissed, particularly for default, if it is not followed by its revival when the suit is subsequently restored to file or decreed, involves great hardship on the plaintiff and that the hardship on an alienee who has acquired rights in the property subsequent to such dismissal and before the suit is revived is not either more or different than that of an alienee who has acquired an interest subsequent to the raising of an attachment under Order 21, R 60 and its reimposition under Order 21, Rule 63. In 7 Mys LJ 369 (J), Doraswami Iyer C. J. has pointed out that there is no such undue hardship involved because it was open to the plaintiff to apply for the setting aside of the ex parte order of withdrawal of attachment in the same way in which he may apply for setting aside an ex parte order of dismissal and he may do both simultaneously and observed that there was nothing to prevent a Court while restoring a suit to file to restore also an attachment without the plaintiff being driven to go through all the required formalities for restoring the attachment also.

10. An attachment before judgment is in the nature of an interlocutory order. It is an extraordinary relief granted to a plaintiff even before his claim is adjudicated upon and found to be true and if a suit is dismissed either for default or on its merits by the trial Court and the attachment before judgment has therefore to cease, he can certainly have not as much grievance as a person who has obtained a decree and attached property of the Judgment-debtor whose right to attached property has been questioned and decided in summary proceedings and which are made expressly subject to a decision in a regular suit. Moreover it cannot also be urged that all interlocutory orders like say those passed on applications for temporary injunction the operation of which would have to cease on the dismissal of a suit, would automatically be revived or can be deemed to be in force without any further orders by an appellate Court or by the same Court after the suit is dismissed. To hold so would lead to obvious and real difficulties. It is not also as though the plaintiff in such a case has no remedy. He could . always apply to the same Court if a suit which has been dismissed for default is restored to file or to an appellate Court which has also ample powers to grant an order of attachment before judgment under the provisions of Section 107(2), Civil P.C. In any event the possibility of hardship cannot warrant the ignoring of the express provisions of Order 38, Rule 9 by which it is specifically laid down that an attachment before judgment shall cease by the dismissal of a suit. As observed by Mahmood J. in 10 All 506 CE), all interim orders cannot survive the pendency of the main litigation.

11. The decisions of this Court in 32 Mys COR 97 (A); 7 Mys LJ 369 (J) and 49 Mys HCR 220 (B), have been in accordance with the views of the High Courts of Bombay, Calcutta, Madras and Rangoon. With great respect to the learned Judges who decided this point in the Full Bench case of the Travancore-Cochin High Court we are unable to agree with their view to the contrary.' We see therefore no reason for re-considering the view already taken by our High Court and would answer the first part of the reference accordingly in the negative. The second part of the reference does not therefore arise. (After the opinion of the Full Bench the case again went back to the Division Bench who on 28-1-55 dismissed the appeal with costs in accordance with that opinion.)

12. Appeal dismissed.


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