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Union Bank of India, Visakapatnam Vs. Andhra Technocrat Industries and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. No. 200 of 1980
Judge
Reported inAIR1982AP408
ActsCode of Civil Procedure (CPC), 1980 - Order 38, Rules 5, 5(1), 5(3) and 6 - Order 43, Rule 1
AppellantUnion Bank of India, Visakapatnam
RespondentAndhra Technocrat Industries and anr.
Appellant AdvocateG. Bhaskara Rao, Adv.
Respondent AdvocateV. Rajendra Babu, Adv.
Excerpt:
.....is appealable under order 43 rule 1 (v) - order under rule 5 merely directing defendant to furnish security or to appear and show cause why security should not be furnished is not appealable - only an order allowing application under rule 5 and order withdrawing attachment made under rule 5 (3) on cause being shown by defendant are appealable - held, order dismissing application under order 38 rule 5 for order of attachment before judgment non-appealable. - - (1) where, at any stage of a suit, the court is satisfied, by affidavit or other wise, 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 the remove the whole or any part of his..........the provisions of rr. 5 and 6 of o. 38,c. p. c.4. 'rule 5. 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 other wise, 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 the 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.....
Judgment:

Chennakesav Reddi, J.

1. This Civil Miscellaneous Appeal preferred under O. 43, R. 1 (q), C. P. C. raises a question of its maintainability. The question is whether an order dismissing an application under O 38, R. 5, C. P. C. for an order of attachment before judgment is appealable.

2. The facts are short and simple. The Union Bank of India, Visakhapatnam, is the plaintiff in the suit. The suit is one for recovery of money. The Plaintiff filed an application under O. 38, R. 5, C. P. C. for attachment of a sum of Rupees three lakhs lying with the Director General, Naval Project, Visakhapatnam, payable to the I defendant, before judgment. It was alleged on behalf of the plaintiff that unless attachment before judgment was ordered, the plaintiff-Balk would be put to serious loss and injury. Notice was ordered, to the defendants on the said application. No conditional attachment order was passed under sub-rule (3) of O.38, R.5, C. P. C. The defendants appeared and resisted the application contending that ''the property mortgaged in favour of the plaintiff-Bank was sufficient for the amount of the decree which may ultimately be found to be due in the suit by the defendants. The learned Subordinate Judge dismissed the application holding that it was not provided by the plaintiff-Bank that the value of 3,000 Sq. yards of house site which is hypothecated by the 2nd defendant in favour of the plaintiff-Bank was not sufficient to cover the suit amount and costs in the event of there being a decree against the defendants. Aggrieved against the said order dismissing the application, the plaintiff has preferred this appeal under O. 43, R. 1 (q), C. P. C.

3. The learned counsel for the respondent-I defendant has taken an objection relating to the maintainability of the appeal. He submits that no appeal is provided for under O. 43, R. 1, C. P. C. against an order dismissing an application under O. 38, R. 5, C. P. C. Such an order, according to the learned counsel, cannot be deemed to be one under R. 6 which alone is made appealable under O. 43, R. 1 (q), C. P. C. Let us, therefore, peep into the provisions of Rr. 5 and 6 of O. 38,C. P. C.

4. 'Rule 5. 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 other wise, 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 the 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 sufficient to satisfy the decree, or to appear and show cause why he should not furnish security.

R. 6. Attachment where cause not shown or security not furnished:

(1) 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 there of as appears sufficient to satisfy my decree which may be passed in the suit, be attached.

(2) Where the defendant shows such cause or furnishes the required security, and the property specified or any portion of it has been attached, the Court shall order the attachment to be withdrawn, or make such other order as it thinks fit.'

5. The dominant object of R. 5 is to prevent the decree that may be passed against the defendant from being rendered unfruitful. The provisions of R. 5 can only be invoked when the Court is satisfied at any stage of the suit that the defendant has done or is about to do any act with intent to obstruct or delay execution of any decree that may ultimately be passed against him. The Court may issue, on the application, notice to the defendant to appear and furnish security or show cause why he should not furnish security for the satisfaction of the decree. The Court may also pass by the same order, immediately ordering attachment of the whole or any portion of the property specified by the defendant. Rule 6 contemplates orders of two kinds in an application under R. 5: (1) Where the defendant fails to show cause on an application under R. 5 why he should not furnish security, or fails to furnish the security required. Within the time fixed by the Court, the Court may make an unconditional order of attachment, (2) Where the defendant appears and shows cause or furnishes the required security in pursuance of the notice issued under R. 5 and the specified property or any portion of it has been attached under sub-rule (3) of Rule 5, the Court shall order the attachment to be withdrawn.

6. Now O. 43, R. 1 (q), C. P. C. makes both these orders under R. 6 appealable. The other orders are not appealable. An order dismissing an application under O.38, Rule 5 is not appealable. An order under Rule 5 merely directing the defendant to furnish security or to appear and show cause why security should not be furnished is not appealable. Only an order allowing an application under Rule 5 and an order withdrawing the attachment made under sub-rule (3) of Rule 5 any cause being shown by the defendant, are appealable.

7. In this case there was no interim order of attachment passed under sub-Rule (3) of R. 5. Only an order was passed by the Court under sub-rule(1) of R. 5 directing issue of notice to the defendant to show cause why he should not furnish security, and on the defendant appearing and showing cause in answer to the notice the Court, dismissed the application. There was no interim attachment passed under sub-rule (3) of R. 5. Therefore, the order passed by the Court below does not fall within sub-rule (2) of R. 6. Therefore, the order passed by the Subordinate Judge is not appealable.

8. Now turning to the support of judicial precedents, we find that the view expressed by us is shared by the High Courts of Calcutta, Bombay, Allahabad, Nagpur and Patna. The Calcutta High Court in Hara Gobinda Das v. Bhur and Co., ILR (1955) 1 Cal 478, held that an order passed under O. 38, R. 5, C. P.C. The learned judges of the Calcutta High Court observed:

'An order passed in an application under O. XXXVIII, R. 5 of the Civil P.C. is appealable only when it comes under O. XXXVIII, R. 6 of the Code.

Sub-rule (1) of R. 6, XXXVIII, covers all cases where the applications under O. XXXVIII, R. 5 are eventually granted.

Sub-rule (2) of R. 6, O. XXXVIII, deals with cases where the applications under O.XXXVIII, R. 5 are dismissed, does not cover all such cases but includes only those cases where a conditional order of attachment is made under O. XXXVIII, R. 5'.

The Bombay High Court in Gopaldas Hiralal v. Mahadu Dagdu Patil, AIR 1943 Bom 24, held that an order under Order 38, Rule 6 (2) would only apply to a case where on the application of the plaintiff for attachment. A Division Bench of the Allahabad High Court in Om Prakash v. M. Ishaq, AIR 1933 All 557, held:-

'No appeal lies under O. 43 (1) (q), Civil P. C., where no conditional attachment has been made under O. 38, R. 5 (3) and the application for attachment before judgment ends in dismissal on the defendant showing cause against it.'

9. To the same effect is the judgment of the Nagpur High Court in Rebello V. Ladhasingh Bedi & Sons, AIR 1944 Nag 30. The view of the Patna High Court in Kendarnath Himatsinghaka V. Tejpal Marwari, AIR 1935 Pat 219, is also to the effect that an order eventually passed rejecting the application for attachment before judgment is not such an order as is made appealable by Order 43, Rule 1 (q), C. P. C. The Madras High Court no doubt in T. B. Seetharama Chettiar V. Sellathammal, 1928 Mad WN 125, struck a some what discordant note from the view expressed by us. The learned Judge Srinivasa Aiyangar, J. held that an order that is made by the Court on an application of the plaintiff after return of the notice to the defendant to appeal and show cause why he should not furnish security is an order under O. 38, R. 6 and is therefore appealable.

The scope of the rule in our opinion has been so enlarged as to embrace all orders on an application under R. 5. But in that case the plaintiff filed an application for attachment before judgment. Notice was issued to the defendant to show cause. The defendant appeared and an enquiry was made. Evaluation of the properties offered by the defendant as a security was made by the commissioner appointed for that purpose. The Court was satisfied about the security of the properties offered by the defendant. The defendant gave an undertaking that he would not alienate the immovable properties pending disposal of the suit. It is undoubtedly no a case where an application under O. 38, R. 5, C. P. C. is dismissed, but is partly allowed. However, if the decision is intended to lay down that an order dismissing an application under O. 38, R. 5 is appealable, we record our respectable disagreement with the view expressed by the learned judge of the Madras High Court.

10. Even on the merits, we are satisfied that there is no intention on the part of the defendant to delay or cause obstruction in the execution of the decree that may ultimately be passed against him. The Court below held that the property mortgaged to the plaintiff-Bank at the time of sanctioning the loan is sufficient to satisfy the decree that may ultimately be passed against the defendant. We fully agree with the said finding.

11. In the result, the appeal fails and it is accordingly dismissed with costs.

12. Appeal dismissed.


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