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Bharat Tobacco Co. Vs. A. Jamadar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Case NumberA.F.O. No. 148 of 1979 and Civil Appln. No. 1554 of 1979
Judge
Reported inAIR1980Guj202; (1981)GLR343
ActsCode of Civil Procedure (CPC), 1908 - Order 38, Rule 5
AppellantBharat Tobacco Co.
RespondentA. Jamadar and ors.
Appellant Advocate M.C. Shah, Adv.
Respondent Advocate S.B. Vakil, Adv.
Excerpt:
.....the decree. assuming for the sake of argument that this allegation is well founded, it does not furnish sufficient cause for the exercise of power under order 38, rule 5 of the code for the simple reason that the defendants who are trading in tobacco are bound to enter into contracts with dealers in tobacco in ordinary course of business......' said property or the value thereof, or such portion thereof as may be sufficient to satisfy the decree. sub-rule (3) of rule 5 of order 38 empowers the court to direct the conditional attachment of the whole or any portion of the property so specified in the application at the time of the passing of the said order. in the instant case attachment before judgment was sought on three grounds set out earlier. out of these three grounds, the ground that the defendants are likely-to run away to pakistan cannot be invoked for the purpose of attachment before judgment under order 38, rule 5 of the code. that would be-a valid ground to invoke the court's jurisdiction under order 38, rule 1 of the code of civil procedure. in the instant case there is no allegation that the defendants are about.....
Judgment:

1. The appellant-plaintiff filed a suit in the Court of the learned Civil Judge (Senior Division), Nadiad, to recover an amount of Rs. 5,06,348-85 Ps. from Messrs. Inter-State Trading Corporation, a partnership firm, and its three partners who are the respondents herein. In the said suit the appellant-plaintiff took out a Notice of Motion for attachment 6efore judgment on three grounds (1) that the defendants-respondents Were about to dispose of their property and had in fact started selling off the stock-in-trade; (2) the defendants intended to dispose of their Ambassador and Fiat cars and had in fact negotiated for the sale of those cars with two different parties; and (3) that the defendants were about to abscond to Pakistan. The properties in respect of which attachment was sought were set out in detail in the Schedule annexed to the Notice of Motion. The learned trial Judge dismissed the application for attachment: before judgment on 5th June 1979 and it is against that order of dismissal that the original plaintiff has preferred this appeal.

2. Under Order 38, Rule 5 of the Code of Civil Procedure, the Court is invested with power to order attachment before judgment if the defendant fails to furnish security at any stage of the suit. Before the Court exercises the power under the said rule it must be satisfied that the defendant, with, intent to obstruct or delay the execution of the 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. If the aforesaid two conditions are satisfied by affidavit or otherwise, the Court may direct the defendant to furnish security, in such sum as it may specify in its order, to produce and place at the disposal of the Court, when required, the ' said property or the value thereof, or such portion thereof as may be sufficient to satisfy the decree. Sub-rule (3) of Rule 5 of Order 38 empowers the Court to direct the conditional attachment of the whole or any portion of the property so specified in the application at the time of the passing of the said order. In the instant case attachment before judgment was sought on three grounds set out earlier. Out of these three grounds, the ground that the defendants are likely-to run away to Pakistan cannot be invoked for the purpose of attachment before judgment under Order 38, Rule 5 of the Code. That would be-a valid ground to invoke the Court's jurisdiction under Order 38, Rule 1 of the Code of Civil Procedure. In the instant case there is no allegation that the defendants are about to remove the whole or any part of their property from the local limits of the jurisdiction of the Court for the obvious reason that the properties set out in the Schedule appended to the application are admittedly outside the jurisdiction of the Nadiad Court. The only ground which can, therefore, survive is that the defendants are about to dispose of the whole or any part of their property with a view to obstructing or delaying the execution of the decree that may be passed against them in the suit. In support of the said ground the allegation is that the defendants have disposed of some part of the stock-in-trade to (1) Messrs. L. N. Nooruddin & Sons of Trichinopally (Tamil Nadu) and (2) Messrs. S. Kadarkhan and Sons, Salem (Tamil Nadu). Now the defendants are dealers in tobacco. They had purchased tobacco from the appellant firm on credit and the suit also is to recover the price of goods sold and deliver to the defendants. It is thus obvious that the defendants are trading in tobacco and if in the usual course of business they sold a part of their stock-in-trade to the aforesaid two firms carrying on business in Tamil Nadu, it cannot be said that they disposed of the goods with a view to obstructing or delaying the execution of the decree that may be passed against them in the suit instituted by the appellant. The learned trial Judge has rightly observed that in order to invoke the jurisdiction of the Court under Order 38, Rule 5 of the Code, it is not sufficient to reproduce the language of that rule but the party seeking the order must establish by affidavit or otherwise facts which would satisfy the Court that the opposite party is about to dispose of the whole or any part of his property with a view to obstructing or delaying the execution of the decree that may be passed in the suit. An order -of attachment before judgment is a drastic order and ordinarily the Court would be slow in exercising the power conferred upon it under Order 38, Rule 5 of the Code for the simple reason that if the power is not exercised with utmost care and caution, it may ruin the reputation and business of the party against whom the power is exercised. The Court must act with utmost circumspection before issuing an order of attachment so that the power vested in the Court is not abused by an unscrupulous litigant as a weapon of oppression against the opposite party. It is the duty of the Court to take care to see that it is not used as an instrument to coerce the opposite party to settle the matter with the party armed with an order of attachment before judgment on the latter's terms. . The learned trial Judge was, therefore, right in observing that mechanical reproduction of the language of Order 38 Rule 5 of the Code will not entitle the party to an order of attachment before judgment. What is important is that the party seeking an order of attachment before judgment must place material on record which would satisfy the Court that the opposite party is about to dispose of the whole or any part of his property with a view to defeating the decree that may ultimately be passed against him in the suit. In the instant case we find that the only allegation made against the respondents-defendants is that they disposed of tobacco worth Rs. 3 lakhs to the aforesaid two firms carrying on business in Tamil Nadu. Assuming for the sake of argument that this allegation is well founded, it does not furnish sufficient cause for the exercise of power under Order 38, Rule 5 of the Code for the simple reason that the defendants who are trading in tobacco are bound to enter into contracts with dealers in tobacco in ordinary course of business. There is no allegation that the tobacco stated to have been sold to/the aforesaid two Tamil Nadu parties was sold at a price far below the market price prevailing at the relevant point of time with a view to liquidating the stock-in-trade to defeat the decree that may be passed in the suit instituted by the appellant-plaintiff. The very nature of the transaction with the aforesaid two Tamil Nadu firms reveals that the defendants are wholesale dealers in tobacco and have firm roots at the place where they are carrying on business in the aforesaid name. I am, therefore, of the opinion that the learned trial Judge was right in coming to the conclusion that this single circumstance did not furnish 'prima facie' evidence sufficient to satisfy the Court that the defendants were. out to dispose of their property with a view to defeating the claim of the appellant-plaintiff, should a decree as prayed be passed in the suit instituted in the Nadiad Court.

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4. Appeal dismissed,


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