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V.K. Nataraja Gounder Vs. S.A. Bangaru Reddiar - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 91 of 1963
Judge
Reported inAIR1965Mad212
ActsCode of Civil Procedure (CPC), 1908 - Order 38, Rule 5
AppellantV.K. Nataraja Gounder
RespondentS.A. Bangaru Reddiar
Cases ReferredAnna Veerayya v. Annamalai Chetti
Excerpt:
.....the suit claim amount to be kept in deposit without prejudice to his contentions,'the learned city civil judge does not appear to have borne in mind the relevant provisions of the civil procedure code in making this order. (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..........and that his monthly business income is in the neighbourhood of rs. 5,000.(4) the learned city civil judge, after summarising the allegations contained in the respective affidavits of the parties, reached the strange conclusion that the fourth defendant should deposit half the suit amount. there is no finding by the learned judge that the appellant is intending to alienate his properties with a view to defeat or delay creditors and that unless he is prevented from alienating the properties, the plaintiff will be prejudiced in realising he decree which he may ultimately obtain in the suit. the learned judge observes that the fourth defendant is not living within the jurisdiction of the city civil court, that he is not possessed of any property within the said jurisdiction and that the.....
Judgment:

(1) The appellant challenges the order of the court below directing him to deposit into court 'cash security' of half of the suit claim without prejudice to his contentions. This order purports to have been passed under the provisions of Order 38, Rule 5, C. P. C. The propriety of this order is called in question now before me.

(2) The appellant is the fourth defendant in the suit, O. S. No. 3618 of 1962, on the file of the City Civil Court, Madras. The suit has been instituted by a certain Bangaru Reddiar, the respondent herein, for recovery of a sum of Rs. 13,600 alleged to be due under a promissory note executed by a firm called Bombay Films. The firm is the first defendant in the suit. Defendants 2, 3 and 4 are alleged to be the partners of this firm. It is common ground that the fourth defendant is not the actual executant of the promissory note, but he has been impleaded on the footing that he is a partner liable to answer the suit claim said to have been incurred for and on behalf of the first defendant firm.

(3) The appellant resist the suit mainly on the round that he was not a partner on the date 15-12-1959, when this debt was incurred. According to him, he became a partner of the firm only on 21-6-1960. Whether the contention of the fourth defendant-appellant is well founded or not it is clear that he does not admit liability of the suit claim and that there is no prima facie case against him as admittedly he did not join as an executant in the promissory note. The plaintiff-respondent filed an application for attachment before judgement and prayed that the house and ground belonging to the fourth defendant, 'Shanti Vilas', Race Course, Coimbatore, may be attached. In support of this application, the plaintiff swore to an affidavit stating that the fourth defendant is indebted to several creditors, that he is not possessed of nay immovable property in the city of Madras and that he is attempting to alienate his property at Coimbatore in order to screen it beyond the reach of creditors and with a view to defeat and delay the rights of the plaintiff and other creditors. The fourth defendant objected to the attachment prayed for and filed a counter affidavit denying the allegations made by the plaintiff. He characterised the application as being 'reckless and malicious'. He swore that he was not indebted and that he was not attempting to alienate his house in Coimbatore. He added that besides the house at Coimbatore. He added that besides the house at Coimbatore he also owns several building sites in hat place, that he has houses and lands in several villages in Coimbatore Dt., that his properties are not encumbered, that he owns shares in textile mills of the value of Rs. 30,000 that he is the managing agent of Gnanambika Mills, Coimbatore, and that his monthly business income is in the neighbourhood of Rs. 5,000.

(4) The learned City Civil Judge, after summarising the allegations contained in the respective affidavits of the parties, reached the strange conclusion that the fourth defendant should deposit half the suit amount. There is no finding by the learned Judge that the appellant is intending to alienate his properties with a view to defeat or delay creditors and that unless he is prevented from alienating the properties, the plaintiff will be prejudiced in realising he decree which he may ultimately obtain in the suit. The learned Judge observes that the fourth defendant is not living within the jurisdiction of the City Civil Court, that he is not possessed of any property within the said jurisdiction and that the plaintiff has got 'apprehensions' in his mind. I wish to set out the conclusion reached by the court below in the words of the learned Judge himself only to point out that it is in utter disregard of the provisions of the Civil Procedure Code. The learned Judge states-

'In view of the allegations made in the counter affidavit and taking into consideration the allegations that the fourth defendant is a well-to-do person and also the apprehensions in the mind of the plaintiff, as an interim measure without ordering any attachment of any properties it is directed that the fourth defendant to deposit into court in two seeks' time cash security of half of the suit claim amount to be kept in deposit without prejudice to his contentions,'

The learned City Civil Judge does not appear to have borne in mind the relevant provisions of the Civil Procedure Code in making this order. The remedy of an attachment before judgement 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 suit. The purpose of the rule is to safeguard the right of the plaintiff in the event of his getting a decree in his favour and to prevent a fraudulent defendant from defeating the decree. It is clear that the court has to act with the utmost circumspection and with maximum care and caution before issuing an order of attachment. Otherwise, it would become a weapon of oppression in the hands of unscrupulous plaintiffs.

(5) Order 38, Rule 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, 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, proportion 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 conditioned attachment of the whole or any portion of the property so specified.'

The essential requirements which must be proved to the satisfaction of the court are: (1) the defendant is about to dispose of the whole or any part of his property; or (2) the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court, and (3) that the defendant is intending to do so to cause obstruction or delay in the execution of any decree that may be passed against him. Vague and general allegations that the defendant is about to dispose of the property or remove it beyond the jurisdiction of the court, unsupported by particulars, would not be sufficient compliance with the rule. 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. This is really settled law on the subject. Senaji Kapurchand v. Pannaji Devichand, : AIR1938Pat161 );'> : AIR1934Cal694 . 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, would be merely colourable and would constitute an abuse of process of court. The court must insist upon the strict proof of the said allegation. Any order of the court without a proper investigation whether the allegations are well-founded or not, would constitute a gross dereliction of duty.

(6) I have no doubt that the learned City Civil Judge, was not justified in passing the impugned order. The appellant appears to be a fairly affluent person from whom recovery of the decree amount, if the plaintiff should at all get a decree against him, may not be very difficult. The fact that the appellant does not own any immovable property in the city of Madras is certainly not a ground for setting in motion the machinery of attachment before judgment against him. If a proper case had been made out by the respondent, the property in Coimbatore might certainly be attached. It is not necessary that the property to be attached should be within the jurisdiction of the attaching court, Anna Veerayya v. Annamalai Chetti, ILR 31 Mad 502; Chimandas v. M/s. Manager Mahadevappa, Firm, : AIR1961AP417 . But, in the present case, the respondent has woefully failed to make out a case for attachment before judgment of the fourth defendant's properties pending the suit.

(7) The appeal is allowed. The order of the court below is set aside. I A. No. 9125 of 1962 is hereby dismissed. The appellant will have his costs from the despondent both here and in the court below.

(8) Appeal allowed.


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