1. The suit giving rise to this appeal was instituted by Messrs Birdi Chand SumerMal and Gambhir Mal in the court of District Judge, Sarnbhar Lake, on October 20, .1949, and arose in these circumstances:
2. Messrs Birdi Chand Sumer Mal was a partnership firm which carried on business of sale and purchase of gunny bags at Sambbar. Plaintiff Pambhir Mal and one Tikarn Chand were proprietors of that firm. The defendants are members of a joint Hindu family firm styled as 'Shri Narain, Ram Deo' which also dealt in gunny bags at Sambhar. Ramdeo (defendant No. 1) is the manager of that joint family firm. In Bauch Samvai 2003 there were transactions between the parties for delivery of 660 hales of gunny bags, of a specified size, to the defendants on Magh Sudi 15 Samvat 2003. .While the plaintiffs contended that the defendants failed to take delivery on the due date and broke the .contract, putting them to a loss of Rs. 73,751/-, the defendants alleged that it were they who suffered a loss of Rs. 77,851/9/-because the plaintiffs failed to make delivery in terms of the contract. The defendants therefore filed a suit on April 4, 1947, while the plaintiffs filed their suit on January 9, 1949, for recovery of their respective losses.
Defendani Ram Peo filed an application (Ex. 50) in the trial court on October 20, 1948 under Order XXXVIII, Rule 5 of the Code of Civil Procedure in his own suit, along with a covering affidavit (Ex. 51), for (taking security from the defendants (present respondents-plaintiffs) or for attachment of their bales of gunny bags. The same day, a conditional attachment of the bales was ordered by the trial court and the bales were attached lying in two godowns of the present respondents. The attachment was ultimately vacated 011 July 14, 1949 as cause was shown to the contrary in the objection petition (Ex. 53) dated October 21, 1948. Thereupon the present suit was instituted on October 20, .1949 as aforesaid, alleging that the attachment before judgment was obtained ''maliciously, carelessly and recklessly without sufficient and reasonable grounds' against Gambhir Mal.
It was also' alleged that the reputation of the plaintiffs suffered considerably on account of the said attachment which affected their credit in the business world and caused them substantial damage. The plaintiffs therefore sought to recover (i) Rs. 17,367/15/6 for depreciation in the value of the attached goods, (ii) Rs. 2,500/- on account of the expenses incurred in the litigation connected with the attachment, and (iii) RS. 50,000/- for loss of reputation, prestige and credit, totalling to Rs. 69,867/15/6. Three schedules were attached to the plaint giving details of the property which was attached before judgment at the instance of the defendants and the damages claimed in the suit.
3. After the formation of the Rajasthan State, the sui.t was transferred to the court of District Judge, Jaipur City, and ultimately it was received by transfer on November 15, 1952, by the Senior Civil Judge, Jaipur City, from the court of the Additional District Judge, Jaipur City. A separate written statement was filed by defendant Ramdeo, while defendants NOS. 3 to 6 filed a joint written statement. The suit proceeded ex parte against Pooranmal defendant No. 2.
It is the written statement of Ram Deo (defendant No. 1) which is material for purposes of the controversy between the parties. It was admitted in it that both parties had filed their suits regard-Ing the contract for the delivery of gunny bags on Magh Sudi 15 Samvat 2003, but it was denied that the attachment before judgment was secured on a false affidavit. It was also pleaded that Messrs Birdi Cnand Sumer Mal did not give delivery to several parties regarding the transactions for Magh Sudi 15 Sambat 2003 and did not even compensate them for their losses and closed its business, it was pleaded that the attachment before judgment was not secured maliciously, carelessly and recklessly, that Gambhir Mal and Tikam Chand did not intentionally furnish security for the claim in the defendants' suit, that the attachment was kept lingering on by the present plaintiffs as they unjustifiably filed a revision petition in the High Court which was ultimately withdraw, that there was considerable demand for gunny bags in the Sambhar market in those days and that the plaintiffs had falsely alleged that they had incurred a loss in the value of the attached goods on account of the attachment, because either the goods were defective goods or they had shown take sales at lower rates to Messrs Jain Commercial Company and Sumer Company which were Gambhir Mal's other concerns.
As regards the claim for damages on account of loss in reputation, prestige and credit, the defendant alleged that the plaintiffs' reputation had already fallen in Sambhar when they failed to make deliveries in time, that the plaintiffs had lost their credit with their bank also and that they were even driven to the necessity of putting through their transactions under other names. It was pointed out that no counter-affidavit was. filed by the plaintiffs in reply to the affidavit which had been enclosed with the application for attachment before judgment. Besides, a plea was raised that since costs were awarded while vacating the attachment, the suit was not maintainable. Further, the defendants pleaded that the attached goods had been rejected by the Salt Superinten dent because they were below the prescribed standard. A plea was also taken that there was a defect of non-joinder of parties.
4. The following issues were framed in the trial court,
(1) Whether the order of attachment before Judgment dated October 20', 1948 was obtained maliciously, carelessly and recklessly without sufficient and reasonable grounds against plaintiff No. 2 and thereby the plaintiffs suffered substantial damages affecting their business and reputation?
(2) Whether the plaintiffs are entitled to recover the damages detailed in para No. 12 of the plaint?
(3) Whether the present suit is not maintainable .due to the fact that this court compensated (the plaintiffs with costs?
(4) Whether Tikam Chand Barjatia, Madan Lal, Ram Niwas, Ram Ballabh and Laxmi Narain are necessary parties to the suit an.d hence the suit is bad for non-joinder of defendants?
(5) To what relief are the plaintiffs entitled. Of these, issue No. (4) was decided against the defendants on April 24, 1953, issue No. (1) was .decided in favour of the plaintiffs and issue No. (3) was decided against the defendants. As regards issue No. (2), the learned trial judge held that the plaintiffs were entitled to recover Rs. 1000/- on account of the expenses of litigation and Rs. 9,000/- for loss of reputation and business, and the plaintiffs' suit was therefore decreed for Rs. 10,000/- with proportionate costs. The defendants feel aggrieved and have come up in appeal.
5. The learned counsel for the appellants has assailed the findings of the trial court on the first two issues, for they are obviously the most important. As they are worded, the burden of proving the issues was on the plaintiffs, as it should have been, but a reading of the impugned judgment shows that the learned trial judge decided the case on a consideration of the question whether the defendants' application for attachment before judgment was made with ample justification and was bona fide. In doing so, he unwittingly placed the burden of proving the plaintiffs' case, on the defendants.
An action based on malicious abuse of civil processes, like the present, is analogous to an action for malicious prosecution and it is therefore necessary that the plaintiff must allege and prove malice and also that the defendant acted without reasonable and probable cause, apart from showing, that the proceeding ultimately terminated in his favour. This is so, because in a case of malicious prosecution the burden of proving these essential requirements rests primarily on the plaintiff. It is true that he has largely to prove the negative, but such being his whole case, he must prove malice and the absence of reasonable and probable cause. The burden may be slight in the circumstances of a given case but, all the same, that burden has necessarily to be discharged. The learned trial judge was therefore initially in error in losing sight of this basic and well established requirement of the law. He has approached the case as if he were sitting on judgment over the correctness or otherwise of the order of attachment before judgment and calling up the defendants to justify the same. We shall, therefore, proceed to examine the arguments of the learned counsel for the parties in this perspective.
6 A great deal of emphasis has been laid on behalf of the plaintiffs-respondents On the circumstance that there was admittedly previous enmity between the parties on account of earlier civil and criminal litigation between them. It has been pointed out that, according to defendant Ramdeo's admission, Gambhir Mal had already filed a suit against him for the recovery of Rs. 10,000/- or so, that his cousin Madan Lal Jajoo had instituted proceedings against Gambhir Mal under Section 107, Criminal Procedure Code, that Gambhir Mal's son-in-law Tikam Chand in turn had instituted similar proceedings against Ramdeo and others, and that Ramdeo had appeared as a witness against Gambhir Mal in a civil suit filed by Messrs Nernichand Dulidtand. This factor has apparently weighed with the learned trial judge also in coming to his finding. If that was all, it could perhaps be said that the plaintiffs had laid the foundation for their case of malicious proceedings, but an over-all view of the established circumstances negatives any such inference.
The evidence shows that the criminal proceeding under Section 107 had amicably terminated between the parties long before the institution of the suit by the defendants. Then again the defendants had, as already stated, instituted their suit on April 4, 1947, and it was after more than 18 months that they presented their application under Order XXXVIII, Rule 5, C. P. Code, for attachment before judgment, on October 20, 1948. This indicates that the defendants were in no reckless hurry to apply for attachment before judgment. By that time the plaintiffs had not even filed their counter suit against the defendants, as that was filed on January 9, 1949. If the application for attachment before judgment had been motivated by malice, there was nothing to prevent the defendants from rushing to present it along with, or soon after, the filing of their suit on April 4, 1947. It would therefore be only reasonable and fair to conclude that in spite of the fact that there was previous litigation between the parties, the defendants did not apply for attachment before judgment simply to settle their past scores with the plaintiffs. The trial judge was in error in ignoring these facts altogether in concluding malice against the defendants.
It may be that the relations between the parties continued to remain far from cordial, and it may also be that the defendants were actuated by a feeling of anger in making that application, but at the moment of filing the application there must have been some other impelling factor than the mere past relationship of the parties. As has been held in Braja Sunder Deb v. Barndeb Das, AIR 1944 PC 1 a proceeding is not malicious merely because it is inspired by anger. The defendants might have caught the plaintiffs at a weak moment to apply for attachment before judgment, but that will not suffice to make their move malicious.
7. Even if it is assumed that the defendants acted with malice, that by itself cannot suffice to obtain a decree in a claim for dajnages for malicious abuse of civil proceedings, for the plaintiffs have also to prove that the proceedings were undertaken without reasonable and probable cause. On this point the learned counsel for the plaintiffs-respondents has strenuously argued that the defendants-appellants recklessly made their application (Ex. 50) on October 20, 1948 and that Ramdeo filed an egually reckless affidavit (Ex- 51) that day to secure an order for ad interim attachment of the property.
It has been argued that such an application could be presented only on the ground that the defendants (in that suit), with intent to obstruct or delay the execution of any decree thai might be passed against them, were (a) about to dispose of the whole or any part of their property or (b) were about to remove the whole or any part of Their property from the local limits of the juridiction of the court, but that the defendants' application (Ex. 50) did not fulfil any of 'hese requirements of the law. Further, it has been argued that the plaintiffs were not given an opportunity to file the necessary security in order to avoid the attachment of their property and that it were the defendants who were responsible for that illegality also. These arguments are sought to be supported by reference to Dular Singh v. Ram Chander, AIR 1934 All 165, Sourendra Nath v. Tarubala Pasi, AIR 1927 Cal 354, Dr. B. R. Chou-dhary v. P. V. Bhagai, AIR 1953 Madh B. 247 and Naniappa Chettiar. y Ganapathi Goundan, 12 Ind Cas 507 (Mad).
The arguments are essentially those of facts and depend for their answer upon an examination of the record. It appears that the defendants stated in their application (Ex. 50); thai (i) Gambhir Mal had almost closed his business in Sambhar that (ii) he was about to remove his property to 'ilaca ghair'; that (iii) he had no immovable property within the jurisdiction of the court; and that (iv) after Gambhir Mal ha.d gone away there would be difficulty in executing the decree that might be awarded in the suit, which means in other words that the realisation of the decree would take time and the decree-holders would be prevented from realising their dues. For these reasons, the appellants prayed that security might be taken for the sum claimed in the suit or, in the alternative, the property of the defendants might be attached according to law. It would thus appear that the application for attachment before judgment fulfilled an essential requirement of Order XXXVIII, Rule 5, Civil Procedure Code, inasmuch as it was stated in it that the defendants were about to remove their property to 'ilaca ghair' beyond the jurisdiction of the court to defeat or delay the execution of any decree that may be passed in the suit. It is therefore not correct to argue that the application fell short of the requirements of the law. It is also incorrect to argue that the appellants asked for a conditional attachment of the property of the respondents within the meaning of Sub-rule (3) of Rule 5 of Order XXXVIII, Civil Procedure Code. There is no such prayer in the application.
If, therefore, the trial court itself thought fit to direct the conditional attachment, the blame for it cannot be laid at the door of those who moved the court for taking security or making the attachment. If the court ha.d confined its order to what the plaintiffs in that suit had prayed for, and if notice of the application for attachment had been given to the defendants (in that suit) and they had furnished the security for shown cause to the contrary, there would have been no cause to complain at either end. It cannot be denied that in emergent cases the court could make an order of conditional attachment before judgment. In the circumstances, we are not persuaded to hold that it were the appellants who abused the process of the civil court.
8. We may here refer to the argument of Mr. Hasti Mal on behalf of the appellants that there is evidence to show that Gambhir Mal knew of the court's order that he had been called upon to furnish security or to suffer attachment of his property. The warrant of attachment clearly directed that no attachment was to be made if the defendants furnished the security for the claim in suit. The report of the bailuf on that warrant shows that while Tikam Chand could not be tound, Gambuir Mal was present m Smbimr, he accepted service of tne order of attainment., but relus-ed to furnish the required security or even to come to the godown of Ram Nath where the attachment was to be made. Similarly, when the bailiff went to attach the property in the other godown of Bahadur, Gambhir Mal refused to go there. He has himself admitted in his statement that he was present in Sambhar at the time of the attachment, and for the preceding 4 or 3 days, and his presence is further borne out by the fact that an objection was filed by him on the very next day complaining against the attachment.
In that application several pleas were taken, but it was not contended that tile attachment had been made without notice. We have therefore no doubt that Gambhir Mal had notice of the court's order giving him the option to furnish security. In fact so little importance was attached to that option that when Tikarn Chand was asked in the trial court whether any such option had been given to them, he stated that he did not know about it. It must therefore be inferred that it were the respondents who chose not to give the security, the furnishing of which would have saved them from the attachment which, it is claimed, ran them down in the business world. In these circumstances, AIR 1934 All 1.65 can be of no avail to the respondents because in that case no notice of the plamtitfs' application asking for attachment before judgment was given to tne defendant and he was not called upon to furnish security or to show cause as provided under Order XXXVIII, Rule 5.
9. As we have mentioned earlier, it was an essential part of the plaintiffs' case to prove that the attachment before judgment was undertaken without reasonable and probable cause. 'Probable cause' is not the same thing as 'sufficient cause'' and has to be judged from the standard of a reasonable and ordinarily prudent man. Mr. Hastimal has argued that the plaintiffs were in so weak a financial position from the latter half of 1947 onwards that they could not even maintain their minimum margin of credit with the Central Bank of India Limited for their basic business, and that the bank had to give them strongly worded notices to adjust their accounts within 24 hours on pain of disposal of their goods at market rates in order to realise the Bank's dues. Exs. P. 1 to P. 5 are the letters of the Bank in this respect and they relate to the period from September 4, 1947 to September 19, 1947. In letter Ex- P. 2 dated September 19, 1947, the Bank informed Gambhir Mal that its Delhi Office had suspended all his 'Limits' and that he could get delivery of the stock of gunny bags against payment in cash only. Such was the plaintiffs* predicament at that time.
Mr. Than Chand tried to explain it away by arguing that the letters had not been proved according to law and that secondary evidence in regard to them could not be admissible when Gambhir Mal had not been called upon to produce them. This contention is factually incorrect because we find that the defendants applied on March 26, 1954 that Gambhir Mal may be called upon to produce those letters, but Gambhir Mal did not produce them in spite of notice. Moreover, he admitted in his statement that there was a dispute between him and the Central Bank of India, that he had not brought the letters of the Bank in that connection although he had been' called upon to produce 'them and that 'those letters might be at Kuchaman. In these circumstances, there is no reason why the production of the office copies of those letters by Shiv Narain D. W. 1. who was an employee of the Bank, should not be considered to be sufficient. These letters and copies were written and maintained in the course of business.
If Gambhir Mal continued to be so wealthy and prosperous as he claims from September, 1947 onwards, there should have been no occasion for the issue of four strongly worded notices from the Bank. At any rate, the issue of such letters from one's town Bankers cannot but create an impression that the' constituent was in a weak financial position, and if the defendants became aware of those letters it cannot be said that they did not have a reasonable and probable cause for getting worried about the financial condition of a person against whom they had raised a suit for the recovery of Rs. 77,85.1/9/- some months earlier. Much has been argued about Gambhir Mal's property in Kuchaman, but we find that the estimate of that property varies so considerably that while Shri Ballabh Sharda P. W. 1 has stated that it was worth about Rupees 2 or 4 lakhs, Parmanand P. W. 8 has valued it at about Rs. 6 lakhs. Even if the property is assumed to be worth Rs. 2 lakhs, lit has to be remembered that Gambhir Mal's son-in-Iaw Tikam Chand has stated that it was joint family property and there is no means of acertaining what was the value of Gambhir Mal's share in it.
The other property which Gambhir Mal claimed to possess was in far off places and the defendants were under no obligation to ascertain its value. It has not been shown that the defendants ha.d the means to size up those assets of Gambhir Mal. On the other hand, when Gambhir Mal claimed to be a wealthy business-man with far flung business establishments, there could be no difficulty in his producing a statement of his accounts, or the balance' sheets of his various firms, to show that he continued to be in a sound financial position on October 20, 1948, when his property was attached. If jt was Gambhir Mal's contention that even his Sambhar firm, nothing to say of his other firms elsewhere, was financially sound, there was nothing to prevent him from producing the relevant books of account or the balance sheet of that firm to' establish his contention. He could then have justification to plead that the attachment was made without reasonable and probable cause.
Gambhir Mal being the plaintiff, the production of documentary evidence of such a nature would have gone a long way to secure his success to the suit, but the fact remains that no such evidence was produced at the trial. The argument that the appellants were in a sound financial position on the date of attachment in question cannot therefore be allowed to prevail. At any rate the matter has to be judged in the light of the defendants' knowledge of the circumstances; and whether under those circumstances they should be deemed to have acted without any reasonable or probable cause.
10. We may here mention that the defendants had produced sufficient evidence to show that the plaintiffs did not make payment to some parties of Sambhar in Samvat 2003. Radhey Shyam (P. W. 3), Ram Avtar (D. W. 4), Mangi Lal (D. W- 6), Raghunath (D- W. 7), and Hanumaii Dass (D. W. 10) have stated, to this effect. Even Ghampalal (P. W. 10), who was an employee of the plaintiff firm, has stated that payments were stopped in the months of Magh and Pnalgun on account of guarrel and that payments were not made to two or three parties. Whatever the reason of the stoppage may' be, the fact remained that it led to adverse reports against the plaintiffs in the business community--whether the plaintiffs were right or wrong in their conduct was not for the defendants to judge.
Then there is also the fact that the plaintiffs opened two more firms in Sambhar. The Jain Commercial Company was started in Samvat 2003 while the Sumer Company was started in the following year. Thus the two Companies were brought into existence during 1947-48 while the defendant's suit had been filed on April 4, 1947. The learned counsel for the respondents has contended that the two Companies were brought into existence because of expansion of business, while Mr. Hastimal has argued that this was done simply because the financial condition of the plaintiff firm had so deteriorated and the goodwill of the firm destroyed, that businessmen were not prepared to have further dealings with it. If it had really been true that the two new firms were opened by Gambhjr Mal to cover his expanded business, the easiest course for him was to produce documentary evidence in support of that contention; but the fact remains that he has not done so. It is not necessary that a well established firm should hot be able to handle its expanded business in a small place like Sambhar and be compelled to open other firms during the crucial period, about whose status and stability the business world may not even be aware.
We are therefore inclined to think that the opening of the two additional firms in 1947-48 was also an element of weakness in the plaintiffs' business and favours the explanation given by the defendants. This conclusion finds support from the fact that Gambhir Mal admitted in his statement that he transacted business in the commission agency of other firms. His explanation, that he did so on account of 'business policy' is not convincing, and the fact therefore remains that the plaintiff firm utilised other firms to put through its business, which would not have been so if the firm enjoyed a reputation of financial stability at that time.
11. To controvert the above inference, Mr. Than Chand tried to argue that the plaintiff firm all along continued to flourish and that it transacted business even in 1949. He has pointed out that the firm did business on September 25, 1949 with Radha Kishan P. W. 2, on ASOJ Bad 14 Samvat 2006 it did business with .Gulabchand, P. W. 4 and on Kartick Sud .11 Samvat 2006 it sold gunny bags to Bakhtawar Mal, P. W. 9. Further, it has been pointed out that Tikam Chand, P. W. 8 has stated that the business of the firm was closed only in 1950-51. This argument is again incorrect because these transactions have been proved to relate to the attached goods which, for the reasons mentioned in the judgment of the trial court, were rejected goods, and so it is incorrect to argue that the plaintiff firm did any fresh business in 1949.
12. It follows from the above that, judged from the standard of an ordinary, prudent and cautious man, the defendants, who claimed to realise Rs. 7.7,851/,9/- in their suit, had reason to think that the financial position of the present plaintiffs had become very weak and that they were about to remove whatever movable property they had from the local limits of the jurisdiction of the court by putting it to sale either voluntarily or because of their financial liabilities. There is also the fact that the defendants were residents of Kuchaman and according to Tikam Chand's own statement they had no personal property in Sambhar on the date of attachment. This state of mind of the defendants cannot be said to be unreasonable and if in their solicitude to secure the payment under their own claim they applied to the trial court to call upon their debtors to furnish security for the amount of the claim or to suffer attachment of their property, that cannot be said to be malicious or careless or reckless. There was reasonable and probable cause for that application. At any rate, the plaintiffs have not led satisfactory evidence to prove that the defendants had no justification for taking proceedings under Order XXXVIII, Rule 5, Civil Procedure Code, or that they were aware of other balancing factors operating in favour of the plaintiffs by reason of which there could be no justification for proceeding against them. We are therefore satisfied that the application for attachment was made for sufficient reasons and with due regard to the requirements of law. In the view we have taken, the finding of the trial court in regard to issue No. (1) must be set aside and we decide that issue against the plaintiffs. As this was the main contention in the appeal, the question of compensation does not arise and the plaintiffs' suit must be dismissed.
13. Accordingly, we allow the appeal, set aside the judgment and decree of the learned Senior Civil Judge, Jaipur City, and dismiss the plaintiffs' suit with costs of both the courts.