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2007 Supreme(SC) 1479

R.V. RAVEENDRAN & P. SATHASIVAM
Raman Tech. & Process Engg. Co. & Anr. - PETITIONER
Versus
Solanki Traders - RESPONDENT
CASE NO.:
Appeal (civil) 6171 of 2001
Decided On : 20/11/2007

The power under Order 38 Rule 5 CPC is to prevent defeat of a decree and should be exercised sparingly and strictly in accordance with the rule.

Headnote:

Attachment before Judgment - Recovery of Debt - Order 38 Rule 5 CPC - Preventing Defeat of Decree - Prima Facie Case - Extraordinary Power

Fact of the Case:

The plaintiff filed a suit for recovery of Rs. 99200. The trial court dismissed the application for attachment before judgment as the plaintiff failed to establish a prima facie case. The High Court, in revision, granted relief under Order 38 Rule 5, swayed by the fact that the defendants had shifted their assets to another premises.

Finding of the Court:

The High Court's interference with the order rejecting the application was unwarranted. The appeal was allowed, and the order of the High Court was set aside, restoring the order of the trial court.

Issues: Prima Facie Case for Attachment before Judgment, Interference with Trial Court's Order

Ratio Decidendi: The power under Order 38 Rule 5 CPC is to prevent defeat of a decree, and it should be exercised sparingly and strictly in accordance with the rule. Merely having a just or valid claim will not entitle the plaintiff to an order of attachment before judgment unless the defendant is attempting to remove or dispose of assets with the intention of defeating the decree.

Final Decision: The appeal was allowed, and the order of the High Court was set aside, restoring the order of the trial court.

ORDER

1. The appellants are the defendants in O.S. No. 143/2000 on the file of the Civil Judge Junior Division, Medchal, filed by the respondent for recovery of Rs.99200/- towards supply of material.

2. The plaintiff moved an application under Order 38 Rule 5 CPC praying for a direction to defendants to furnish security for the suit claim and if they failed to do so, for attachment before judgment. The Trial Court by its order dated 4.8.2000 dismissed the said application. It noted that though the plaintiff alleged that two post dated cheques given by the defendants towards payment of the bill amounts were dishonoured, it had neither disclosed the particulars of the said cheques, nor the dates of dishonour. It was of the view that merely making a bald statement that Rs.99,200/- was due from the defendants was not sufficient to make out prima facie case, when defendants had denied the suit claim.

3. The said order was challenged in revision by the plaintiff. Before the High Court, the plaintiff pointed out that the trial court had ignored its averment that defendants had removed their name board and were removing their machinery from the jurisdiction of the court. The plaintiff also produced a copy of the writ petition (WP No. 11855/2000) filed by the defendants to restrain the police from interfering with the shifting of their assets from their business premises to another premises. The High Court allowed the revision petition by order dated 13.10.2000, being of the view that the trial court ought to have taken note of the fact that defendants were trying to remove the machinery. It directed defendants to furnish security for the suit amount to the satisfaction of the court within four weeks. The said order is challenged in this appeal by special leave.

4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. The object of order 38 rule 5 CPC in particular, is to prevent any defendant from defeating the realization of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose of, or remove from the jurisdiction of the court, his movables. The Scheme of Order 38 and the use of the words `to obstruct or delay the execution of any decree that may be passed against him' in Rule 5 make it clear that before exercising the power under the said Rule, the court should be satisfied that there is a reasonable chance of a decree being passed in the suit against the defendant. This would mean that the court should be satisfied the plaintiff has a prima facie case. If the averments in the plaint and the documents produced in support of it, do not satisfy the court about the existence of a prima facie case, the court will not go to the next stage of examining whether the interest of the plaintiff should be protected by exercising power under Order 38 Rule 5CPC. It is well-settled that merely having a just or valid claim or a prima facie case, will not entitle the plaintiff to an order of attachment before judgment, unless he also establishes that the defendant is attempting to remove or dispose of his assets with the intention of defeating the decree that may be passed. Equally well settled is the position that even where the defendant is removing or disposing his assets, an attachment before judgment will not be issued, if the plaintiff is not able to satisfy that he has a prima facie case.

5. The power under Order 38 Rule 5 CPC is drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It Should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilize the provisions of Order 38 Rule 5 as a



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