Skip to content


Palghar Rolling Mills Pvt. Ltd. Vs. Visvesvaraya Iron and Steel Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberM.F.A. 724 and CRP 1258 of 1983
Judge
Reported inAIR1985Kant282; ILR1985KAR3989
ActsCode of Civil Procedure (CPC), 1908 - Sections 115(2) and 151 - Order 38, Rule 5, 5(1) and 5(4) - Order 43, Rule 1; Code of Civil Procedure (CPC) (Amendment) Act, 1976 - Sections 85(1)
AppellantPalghar Rolling Mills Pvt. Ltd.
RespondentVisvesvaraya Iron and Steel Ltd. and anr.
Appellant AdvocateV. Krishnamurthi, Sr. Counsel and ;Lingaraj, Adv. for ;King and Partridge
Respondent AdvocateP.R. Srinivasan, Adv.
Excerpt:
.....clearly calls upon the defendant to furnish security for rs. the sheristedar has signed the attachment warrant and he claims to have been satisfied that defendant no. a proper investigation whether the allegations are well-founded or not constitutes a gross dereliction of duty. parmaji devichand air 1922 bom 276. at the risk of repetition i would like to reproduce, what has been stated in the said case. 38 should not be passed, unless the court is satisfied that the defendant, with intent to obstruct or delay the execution of decree that may be passed against him, has brought himself within the terms of the rule; so long as the ruling continues to be good law, it is binding on the single judge. old section 115 under which the said case was decided read as :the high court may call..........a case where the district judge had passed an ex parte order of suspending the operation of the decree passed by the trial court. it was held that such an order did not amount to a case decided within the meaning of s. 115 c.p.c. and was thus not revisable. old section 115 under which the said case was decided read as :'the high court may call for the record of any case which has been decided by any court subordinate to such high court and in which no appeal ties thereto, and if such subordinate court appears - (a) to have exercised a jurisdiction not vested in it by law, or(b) to have failed to exercise a jurisdiction so vested, or ( c)to have acted in the exercise of its jurisdiction illegally or with material irregularity,the high court may make such order in the case as it thinks.....
Judgment:
ORDER

1. The Miscellaneous First Appeal and the Revision Petition by defendant No. 1 are directed against the order dated 16-2-1983, passed by the Civil Judge, Bhadravathi, in O. S. 10/83, ordering attachment of moveables before judgment.

2. The plaintiff filed the suit against defendants 1 and 2 to recover Rs. 43,74,821.30 as the price of the sale of stainless steel flats to defendant No. 1. After filing the suit on 16-2-1983, the plaintiff filed the application under Order 38, R. 5 C.P.C. seeking attachment of the moveables of defendant No. 1 before judgment alleging that defendant No. 1 with intent to obstruct or delay the execution of the decree that may be passed against him, is trying to dispose of his property.

3. The court below after hearing the plaintiff's counsel issued ex parte order of attachment of the moveables under Order 38, R. 5. The defendant No. 1 being aggrieved by the said ex parte order of attachment of the moveables, initially filed the Misc. Appeal. However, as a matter of precaution and in view of the ruling reported in Narayana Rao v. Kasturi, ILR (1973) Mys 497, defendant No. 4 filed the revision also. Hence both the matters have come up for hearing today.

4. Learned Senior Counsel Shri Krishnamurthi contended that the order of attachment before judgment passed on 16-2-1983 was in violation of the mandatory requirements laid down by O.38, R. 5 C.P.C. According to him, it was an order passed by the court below without jurisdiction.

5. Sri. Srinivasan learned counsel for respondent No. 1 at this stage submitted that the application was also under S. 151 and S. 136 C.P.C. When there is a specific provision made, S. 151 will not come into play at all. Therefore. the mention of S. 151 C.P.C. in I.A. 1 is 13 redundant and meaningless. S. 136 C.P.C. lays 3, 14 down the procedure to be followed when the 13 property to be attached is situate outside the district. Therefore, this submission in this 15 connection merits to be rejected.

6. The order passed by the Court below on 16-2-1983 reads as :

'I.A. NO.I. Sri H.R.R. Advocate for plaintiff has filed an application along with affidavit under Order 38, R. 5 read with Ss. 151 and 136 C.P.C. praying for an order of attachment before judgment of the properties listed in the application itself, for the reasons set out in the accompanying affidavit.

I.A. No. II. The said advocate for plaintiff has filed another application with memo of facts and praying to hand over the orders passed on 1. A. No. I i.e. Attachment Warrant to the plaintiff for delivery to the concerned Court for effecting the attachment of properties detailed in the Schedule of I.A. No. 1.

Heard Sri H.R.R. on I. A. Nos. 1 and 2. The properties of defendant No. I mentioned in the schedule in I.A. No. 1 are ordered to be attached conditionally, in case defendant No. 1 fails to furnish security in a sum of

Rs. 50,00,000/- (Rupees Fifty Lakhs only). Issue notice of I.A. No. 1 to defendant No. I along with warrant of attachment and suit summons to defendant No. 2, if P.F. is paid, by 14--3-1983.

I.A. No. 2 is allowed. Attachment warrant and copy of I.A. No. 1 are ordered to be handed over to the plaintiff for delivery of the same to the court of the District Judge, Thana (Maharastra State) for execution of the serve through Central Nazir of that Court by 14--3-1981'

(It appears that the word 'served' is wrongly typed in the certified copy. It ought to be , 'same'.)

7. Order 38, R. 5 reads :

'(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.'

This sub-rule (4) has been inserted by S. 85(l) of the Act 104 of 1976.

8. The mandatory essentials of O. 38, R. 5 are: (1) the Court must be 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, (ii) is about to dispose of the whole or any part of his property, or (iii) is about to remove the whole or any part of the property from the local limits of the jurisdiction of the Court. Therefore, the most essential requirement of Order 38, R. 5 is the subjective satisfaction of the Court regarding the requirements. mentioned above. Order 38, R. 5, in my opinion, is a mandatory provision demanding of the Court to satisfy itself first that the defendant is intending to obstruct or delay the execution of 'the decree that may be passed against him. If the order passed by the Court does not speak or show that the Court has applied its mind to the requirements of Order 38, R. 5 C.P.C., or if the order passed by the Court below does not snow clearly that it has considered the material on record, or if the order does not show that the court is satisfied that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of the whole or any part of the property, the order would be in violation of Order 38, R. 5 C.P.C. Order 38, R. 5 as it stood before the amendment in 1976, would have at the most rendered such order irregular. But. now sub-rule.(4) inserted by S. 85(l) of the Act 104 of 1976 reads that if an order of attachment is made without complying with the provisions of sub-rule (1) of R. 5 of O. 39, such attachment shall be void. Sub-rule (4) has been inserted with a view to see that the Courts do not pass such an extraordinary order in a cavalier manner and without satisfying themselves about the requirements of Order 38, R. 5.

9. The order passed by the Court below has been extracted above. There is nothing in it to show that the Court has even bothered to go through the affidavit filed by the plaintiff. It has not even chosen to consider whether any material has been let in by the plaintiff to show that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of the whole or any part of his property. Therefore, the order passed by Court below, in my opinion, appears to have been passed in a most cavalier manner and without realising the consequences that might flow the reason why it has not been executed. from the attachment order. The order has been passed nearly about 7 years after the amendment. The Court passing the order of attachment before judgment should bear in mind that any attachment order passed without complying with sub-rule (1) shall be void. Therefore, the Courts which are armed with vast powers, should acquaint themselves with the amendments and should scrupulously follow the mandatory requirements of law. If the Court, in spite of sub-rule (4) passes an order in a cavalier manner, such an order must be struck down in the interest of administration of justice as void. Therefore, it is concluded that the order of attachment before judgment passed by the court below is void. Therefore, all the proceedings that have followed such a void order, will have to be struck down.

10. I would like to impress upon the Courts below that the amended provisions of the C.P.C. introduced by the Amendment Act of 1976 should be closely followed by the Courts. Their impressions about the provisions of the C.P.C. prior to the amendment need to be modified with reference to the amended provisions.

11. Warrant of attachment issued is available in the records. It reads as :

'Whereas the above named plaintiff has proved to the satisfaction of the Court the defendant in the above suit is making preparations to dispose of the properties mentioned in the schedule. These are to command you to call upon the said defendant on or before the 14--3-83 either to furnish security for the sum of Rs. 50,00,000/- to produce and place at the disposal of this Court when required or the value thereof, or such portion of the value as may be sufficient to satisfy the decree that may be passed against him or to appear and show cause why he should not furnish security and you are further ordered to attach the said immoveable property and keep the same under safe custody until further order of the Court, and you are further commanded to return this warrant on or before the 14th day of March, 1983 with an endorsement certifying the date on which and the manner in which it has been executed, or the reason why it has not been executed.

Given under my hand and under the seal of the Court, this 16th day of February, 1983.

By Order Of The Court

Sd/-

Sheristedar.'

This warrant clearly calls upon the defendant to furnish security for Rs. 50,00,000/- on or before 14th March, 1983. When the court gave time till 14--3-1985 to the defendant No. 1 to furnish security for Rs. 50,00,000/-, I am unable to understand as to how the property could be attached before that date. The attachment report which is in Marathi shows that the attachment was effected on 21-2-1983. Even if it be presumed that attachment warrant permitted conditional attachment, defendant No. 1 must be called upon to furnish the security first. If he fails to furnish the security then the conditional attachment should follow.

There is nothing to show that the defendant No.1 was called upon to furnish the security, and he refused to furnish the security. Therefore, the attachment carried out in pursuance of such a defective warrant issued as per void order will have to be set aside. Further, it can be seen that the warrant shows immoveable properties as stated in the list of properties to be attached. The plaintiff has not sought for attachment of immoveable property. What he has sought for is attachment of moveable properties. There is no mention of moveable property in the attachment warrant. The schedule in the I .A. cannot be looked into for the purpose of attaching the property. The basis of the attachment is the warrant itself. When the warrant itself speaks about the attachment of immoveable property, even though there is no order to attach immoveable property, it needs to be thrown out as one made in utter disregard of the provision of law and in utter disregard of the order passed by the Court. The printed form of attachment has been filled in without due regard to the order passed by the Court. The order itself does not say that the defendant is making preparations to dispose of the properties mentioned in the schedule. The Sheristedar has signed the attachment warrant and he claims to have been satisfied that defendant No. 1 is trying to dispose of the properties mentioned in the schedule. It is not the satisfaction of the Sheristedar that can be made a basis for the issue of the warrant. Sheristedar is only a ministerial officer of the Court and he could sign, even if he is authorised to sign, the warrant prepared only in terms of the order passed by the Court below. Further even the language used in the printed form in filling up the blanks is highly ungrammatical and offends the basic rules of grammar. I hope that such grammatical mistakes are avoided in future.

12. The records do not show that the precept contemplated by S. 136 of C.P.C. has been issued in this case.

13. Learned Senior counsel Krishnamurthy placed before me V.K. Nataraja Gounder v. S.A. Bangaru Reddiar, : AIR1965Mad212 . It is laid down in the said case as :

'The remedy of an attachment before judgment is certainly extraordinary. If granted, it casts an obligation on the party against whom it is made, even before he is heard in defence to the s6it. The Court has therefore to act with utmost circumspection and with maximum care and caution before issuing such an order to avoid it becoming a weapon of oppression in the hands of unscrupulous plaintiffs. In such an application it is incumbent upon the plaintiff to state the grounds on Which he entertains the belief or apprehension that the defendant would dispose of or remove the property, or, to give the source of his information and belief in the matter. A verbatim copy of the provisions of the Code in the affidavit in support of the application, or a mechanical repetition of the language of the Code without an iota or substratum of truth underlying the allegation, is merely colourable and constitutes an abuse of process of Court. The Court must insist upon strict proof of the said allegations. Any order of the Court without. a proper investigation whether the allegations are well-founded or not constitutes a gross dereliction of duty.'

He then relied on Nowroji Pudumjee Siradar v. Deccan Bank Ltd. AIR 1921 Bom 69. It has been laid down as:

'Merely because the defendant attempts to sell some of his immoveable property, while proceedings against him are pending, it does not follow that he is disposing of the property with intent to obstruct or delay the execution of any decree that may be passed in the suit.'

Similar is the principle laid down in Senaji Kapurchand v. Parmaji Devichand AIR 1922 Bom 276. At the risk of repetition I would like to reproduce, what has been stated in the said case.

'An order under R. 5, O. 38 should not be passed, unless the Court is satisfied that the defendant, with intent to obstruct or delay the execution of decree that may be passed against him, has brought himself within the terms of the rule; and it is not sufficient that there are merely vague allegations that the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court.'

This Court also had an occasion to deal with a similar situation in State Bank of Hyderabad v. Dhanlakshmi Traders (1982) 1 Kant LJ 24. Learned brother Swamy J. has stated as :

'Attachment before judgment is an extraordinary remedy and the Court should be slow in exercising the power unless it is established that having regard to the facts and circumstances of the case, it is necessary to pass such an order.'

I.A. 1 is filed by the plaintiff tinder O. 38, R. 5 C.P.C. It states in paragraph No. 3 as :

'The first defendant with intention to obstruct and delay the execution of a decree that may be passed against it, is making preparations to dispose of the properties mentioned in the schedule to I.A. No. 1.

It states in para 4 as : 'That unless this Hon'ble Court were to order the attachment before judgment of the properties detailed in the schedule to I.A. No. 1, there will be no possibility for the plaintiff to recover the huge sum due to it by the defendants.'

Simple mention of the apprehension is not sufficient to show that the defendant No. I was intending to dispose of the properties with a view to obstruct or delay the execution. of a decree that may be passed against him. Simple reproduction of the language used in Order,38, R. 5 will not meet the requirements of Order 38, R. 5 C.P.C. The affidavit must state the source of the information or apprehension. Unless the source is disclosed the court should not hasten to pass - an order under O. 38, R. 5 CY.C. In this case the affidavit does not disclose the source of the apprehension of the plaintiff. Therefore, the affidavit does not meet the mandatory requirements of the O.38, R. 5 C.P.C ' Therefore, the Court below ought not to have passed an order of attachment before judgment.

14. Learned counsel Srinivasan submitted that an appeal against such an order is not competent. This court has ruled in Narayana Rao v. Kasturi, ILR (1973) Mys 497 that an appeal against an, order passed under O. 38, R. 5 C.P.C. is not competent. Learned counsel Krishnamurthy questioned the principle laid (town in the said case. So long as the ruling continues to be good law, it is binding on the single Judge. Therefore, in view Of the said ruling, the M.F.A. filed by defendant No. 1 is incompetent. But, it cannot be forgotten, that realising the implication' of this ruling, a civil revision petition has also been filed. Therefore, the M.F.A. is not maintainable.

15. Learned counsel Srinivasan submitted that the order in question does not amount to a case decided within the meaning of S. 115 C.P.C. and that thus, even the revision was incompetent. For that he relied on Katari Thipparma v. S. Hastimul, (1964) 2 Mys LJ 414. It was a case where the District Judge had passed an ex parte order of suspending the operation of the decree passed by the trial court. It was held that such an order did not amount to a case decided within the meaning of S. 115 C.P.C. and was thus not revisable. Old Section 115 under which the said case was decided read as :

'The High Court may call for the record of any case which has been decided by any court subordinate to such High Court and in which no appeal ties thereto, and if such subordinate Court appears -

(a) to have exercised a jurisdiction not vested in it by law, or

(b) to have failed to exercise a jurisdiction so vested, or

( c)to have acted in the exercise of its jurisdiction illegally or with material irregularity,

the High Court may make such order in the case as it thinks fit.'

The Amendment Act of 1976 has inserted sub-sec. (2) and proviso. Inserted sub-sec. (2) reads as :

'Provided that the High Court shall not under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding except where-

(a) the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceeding, or

(b) the order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it was made.'

The old section after the Amendment Act of 1976 is now numbered as sub-section (1).S.43 of the Amendment Act 104 of 1976 has inserted sub-sec. (2). Sub-sec. (2) reads as:

The High Court shall not. under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to any Court subordinate thereto.

Explanation :- In this section, the expression, 'any case which has been decided' includes any order made, or any order deciding an issue, in, the course of a suit or other proceeding.'

Therefore, the present order falls within the ambit of the words 'any order made'. If the present order of attachment which is void as per sub-rule (4) of Rule 5 and the further proceedings, which have taken place pursuant to the void order of attachment, are allowed to stand, it would result in failure of justice. Therefore, the present case comes also within the ambit of S . 115 (proviso (b)). Therefore, the said ruling will not have any application to the facts of the present case. Therefore, I hold that the revision against such an order is maintainable under S. 115 C.P.C.

16. Even otherwise, this Court cannot shut its eyes against an inherently illegal and void order. It is the bounden duty of this court to (c) to have acted in the exercise of its exercise its jurisdiction under S. 151 C.P.C. and revise such void orders. Therefore, the contention of learned counsel Sreenivasan that even a revision is not maintainable, is rejected.

17. Learned counsel Srinivasan submitted that as I had already expressed my opinion about the inefficacy of I.A. 1 and the affidavit annexed thereto, it would be very difficult for him to pursue the remedy before the trial Court regarding his application under O.38, R. 5 C.P.C. If he feels that the allegations made by him are not sufficient to meet the requirement of O.38, R. 5 it does not prevent him from making a fresh application under Order 38, Rule 5 C.P.C.

18. Therefore, under these circumstances, the order passed by the Court below on 16-2-1983 and the subsequent resultant proceedings of the attachment are set aside. The attachment effected is also set aside. The revision is allowed. No costs in the revision and the appeal.

The M.F.A. is held as not maintainable.

19. Order accordingly.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //