Y. Kesavulu vs T. Kalavathi - 2016 Supreme(AP) 226

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(AP) 226

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
M. SEETHARAMA MURTI, J.
Y. Kesavulu – Petitioner
Versus
T. Kalavathi – Respondent
Civil Revision Petition Nos. 4915 & 4978 of 2015
Decided On : 01-06-2016

Advocates Appeared:
For the Petitioner:V.S.R. Anjaneyulu, Advocate
For the Respondent:O. Uday Kumar, Advocate.

Headnote:
Civil Law – Civil Suit – Constitution of India, 1950 – Article 227 – Code of Civil Procedure, 1908 – Order XXXVIII – Rule 5 – Suit for Recovery of Amount – Decreed – Plaintiff having brought a suit against defendant for recovery of money on foot of a promissory note for Rs.10,00,000/- had filed an interlocutory application in IA under Order XXXVIII Rule 5 of Code requesting to order attachment before judgment of property of defendant – Trial Court by separate orders, disposed of both applications; application filed by defendant was allowed and, after duly accepting undertaking given by the defendant, the interim order of attachment before judgment of the petition schedule property was raised. Therefore, the aggrieved plaintiff filed these two revision petitions before this Court – Held, Code dealing with Attachment before judgment are self contained. Further, Rule 5 of Order XXXVIII lays down a detailed procedure and also the consequences of any violations of the provisions contained therein. Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. When the Legislature has prescribed a mode for exercising of any power that power can be exercised only in that manner and in no other manner, [vide the decision in Gujarat Electricity Board v. Girdharlal Motilal (AIR 1969 SC 267)] – Without disturbing the findings supra and assuming for a moment that in a given case it may be possible to hold that an undertaking of the defendant can be recorded having regard to the facts peculiar to that particular case, be it noted that the case on hand is not a fit case to record the undertaking of the defendant and deny to the plaintiff the efficacious relief of attachment before judgment even on the failure of the defendant to furnish security to the satisfaction of the Court – Reasons in support of conclusion that the instant case is not a fit case to record the undertaking and deny to the plaintiff the main relief are already recorded supra – Having regard to the discussion coupled with reasons supra – Order of trial Court raising the interim order of attachment after accepting the undertaking affidavit filed by the defendant is unsustainable under facts and in law and is liable to be set aside – Civil Revision Petitions allowed (Paras 12, 13 and 14)

Judgement Key Points

The suit was filed for recovery of Rs.10,00,000/- based on a promissory note executed by the defendant, who allegedly borrowed the amount for family needs and construction. (!) (!)
Plaintiff applied under Order XXXVIII Rule 5 CPC for attachment before judgment of defendant's residential property, alleging the defendant was attempting to alienate it to defeat the decree. (!) (!) [2000479230007]
Trial court issued ex-parte interim order directing defendant to furnish security of Rs.11 lakhs or show cause within 48 hours, failing which the property would be attached. (!)
Defendant denied the loan and promissory note as forgery, filed counter and IA under Order XXXVIII Rule 5 read with Section 151 CPC with undertaking not to alienate the property till suit disposal, seeking to lift interim attachment. (!) (!)
Trial court allowed defendant's IA, accepted the undertaking, and raised the interim attachment order. (!) (!) (!)
Plaintiff filed revision petitions under Article 227 of the Constitution challenging both trial court orders. (!) (!)
Order XXXVIII Rule 5 CPC allows court, if satisfied by affidavit that defendant intends to obstruct decree execution by disposing or removing property, to direct defendant to furnish security or show cause, with conditional attachment possible. (!) (!) (!) (!) (!) (!) (!) (!) (!)
Attachment before judgment is a drastic power, exercised sparingly where plaintiff shows prima facie case and defendant's intent to dispose/remove property to obstruct decree; not to convert unsecured debt to secured or coerce settlement. (!) (!)
Guidelines for attachment include: must prove circumstances; affidavits not vague; particulars of disposal needed; intent to defeat claim from conduct/surrounding facts; financial embarrassment relevant but insufficient alone. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Plaintiff established prima facie case: substantial debt, defendant's only property at risk, hectic alienation attempts reported via third-party affidavits, no pre-suit notice due to urgency, defendant failed to furnish security or show cause timely. (!) [2000479230007][2000479230008]
Defendant did not claim other assets or solvency; no motive shown for false suit by plaintiff.[2000479230007][2000479230008]
Provisions of Order XXXVIII CPC on attachment before judgment are self-contained with detailed procedure; power must be exercised only as prescribed, no other manner.[2000479230011][2000479230012]
Acceptance of defendant's undertaking (without security) instead of attachment contravenes Order XXXVIII Rule 5 procedure; undertaking not contemplated therein. (!) (!) [2000479230009][2000479230012]
Attachment before judgment voids private transfers post-attachment (Section 64 CPC), providing stronger protection than undertaking, which does not invalidate alienations (unlike lis pendens in injunction suits, inapplicable here as suit is for money decree). (!) (!) (!) (!) (!) (!) (!)
In money recovery suit, attached property is not "suit property," so attachment uniquely prevents evasion via alienation. (!)
Trial court erred in accepting undertaking and lifting attachment; not a fit case for such, as defendant failed to comply with interim directions. (!) [2000479230012]
Revisions allowed: defendant's IA order set aside; plaintiff's IA remanded for fresh opportunity to defendant to furnish security within time fixed by trial court, failing which attachment before judgment; interim attachment continues till disposal.[2000479230013]

ORDER :

1. The CRP.no.4978 of 2015, under Article 227 of the Constitution of India, is filed by the petitioner/plaintiff assailing the order dated 01.09.2015 of the learned IX Additional District Judge, Chittoor passed in IA.no.17 of 2014 in OS.no.29 of 2014 filed under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 (the Code, for brevity) requesting to order attachment before judgment of the petition schedule property.

1.1. The CRP.no.4915 of 2015, under Article 227 of the Constitution of India, is also filed by the plaintiff assailing the order dated 01.09.2015 passed in IA.no.19 of 2014 in IA.no.17 of 2014 in the aforementioned suit filed by the defendant under Order XXXVIII Rule 5 read with Section 151 of the Code requesting the Court to accept the undertaking given by him in the above mentioned application filed for attachment before judgment and not to order attachment of the petition schedule property.

2. I have heard the submissions of the learned counsel for the revision petitioner/plaintiff (the plaintiff, for brevity) and the learned counsel for the respondent/defendant (the defendant, for brevity). I have perused the material record.

3. The facts, which are necessary for consideration, in brief, are as follows:

The plaintiff having brought a suit against the defendant for recovery of money on the foot of a promissory note for Rs.10,00,000/- had filed an interlocutory application in IA.no.17 of 2014 under Order XXXVIII Rule 5 of the Code requesting to order attachment before judgment of the property of the defendant viz., a residential house bearing municipal bearing no.14-1208 (part) Ground floor, RCC house, first floor ACC sheet with vacant house site situate within the respective boundaries stated in the schedule annexed to the petition. The trial Court granted an ex-parte interim order in the aforementioned interlocutory application by directing the defendant to furnish security for a sum of Rs.11.00 lakhs or to appear and show cause why she should not furnish security within 48 hours after the receipt of the notice in the said application. In the said interim orders, the trial Court had also directed that the property shall be attached on failure of the defendant to either furnish security or showing cause for not furnishing such security. The defendant while resisting the said application by filing a counter had also filed the other interlocutory application in IA.no.19 of 2014 requesting the Court to raise the interim order of attachment and dismiss the petition filed by the plaintiff for attachment before judgment of the petition schedule property after accepting the undertaking given by her to the effect that she would not alienate the property. That application was resisted by the plaintiff by filing a counter. The trial Court by separate orders dated 01.09.2015, disposed of both the applications; the application filed by the defendant was allowed; and, after duly accepting the undertaking given by the defendant, the interim order of attachment before judgment of the petition schedule property was raised. Therefore, the aggrieved plaintiff filed these two revision petitions before this Court.

4. The case of the plaintiff in support of his request for ordering attachment before judgment of the petition schedule property of the defendant and for making absolute the interim attachment already ordered by the Court without accepting the undertaking given by the defendant, in brief, is as follows:

The suit is filed by him for recovery of money on the foot of a promissory note for Rs.10.00 lakhs. The said amount was borrowed by the defendant to meet her family necessities and for construction of a residential building at Ramnagar Colony, Chittoor Town and District. She had agreed to repay the amount borrowed with interest at 24% per annum simple and had duly executed the suit promissory note in favour of the plaintiff. In spite of oral requests, the defendant did not repay the amount due to the plaintiff un

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2016 Supreme(AP) 226

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESHM. SEETHARAMA MURTI, J.Y. Kesavulu – Petitioner Versus T. Kalavathi – RespondentCivil Revision Petition Nos. 4915 & 4978 of 2015Decided On : 01-06-2016

Cases Referred (6)

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
M. SEETHARAMA MURTI, J.
Y. Kesavulu – Petitioner
Versus
T. Kalavathi – Respondent
Civil Revision Petition Nos. 4915 & 4978 of 2015
Decided On : 01-06-2016