A plaintiff must establish a prima facie case for attachment before judgment, ensuring no asset disposal occurs that could obstruct potential recovery, as underscored by Order 38 Rules 5 and 6 of CPC.

JUDGMENT :

Ravi Nath Tilhari, J.

Heard Sri M. R. S. Srinivas, learned counsel for the Appellant and Sri V. V. Saketh Roy, learned senior counsel for the Respondent.

2. The present appeal under Order 43 Rule 1 of Code of Civil Procedure (CPC) has been filed by the appellant/defendant in Commercial Original Suit (in short ‘COS’) No.14 of 2023, pending in the Court of the Special Judge for trail and disposal of Commercial Disputes, Visakhapatnam (in short ‘Special Court’), being aggrieved from the Order dated 09.08.2024 passed in I.A.No.458 of 2023, whereby inter alia the attachment of the petition schedule land effected vide earlier Order dated 10.11.2023 in the said COS has been made absolute, also granting liberty to the defendant to seek modification of the attachment according to law, and providing that, which, if sought would be decided on its own merits.

I. FACTS :

i) Plaintiff’s case:

3. The COS was filed by the plaintiff/respondent for recovery of amount of Rs.3,19,75,543/- (Rupees three crore nineteen lakh seventy five thousand five hundred and forty three only) said to be due and payable by the defendant on the strength of a Memorandum of Understanding (in short ‘MOU’) dated 05.11.2020 and a consequent default thereof on its part.

4. The plaintiff/respondent’s case, stated briefly, was that the plaintiff was a Company incorporated under the provisions of the Indian Companies Act, engaged in the business of real estate, construction, and other allied activities. In the course of its business, the plaintiff developed the property by purchasing lands and also entered into development agreements for developing lands into layouts by obtaining necessary permissions, creating infrastructure etc., on a profit sharing/project sharing basis. The plaintiff had also undertaken construction of residential houses/apartments/villas depending on the agreements with landowners, and apart from development of layouts, the plaintiff also undertook marketing and selling of properties developed by the third parties for profit. In pursuance of such business, the defendant who was the absolute owner of total extent of Ac.10.12½ cents situated in Kukalametta Lakshmipuram village, Vizianagaram district, had offered to get the project marketed by the plaintiff. The defendant had acquired the said property under various valid deeds of conveyance and the defendant had offered to develop the same into a residential community consisting of 200 duplex houses (villas) to be built by the defendant himself and to be marketed by the plaintiff. Accordingly, the parties entered into a Memorandum of Understanding dated 05.11.2020 under which they inter alia agreed to the following terms; (i) That the defendant shall obtain necessary permits and sanctions from all the authorities concerned by paying necessary fees/charges; (ii) To obtain the necessary plans at the cost of the defendant from VMRDA/Local Panchayat. (iii) To construct 200 Duplex Houses in an area of 150 Sq.yards each. (iv) To create black top roads, drainages, lighting etc.

5. The plaintiff’s further case was that in pursuance of the MOU on construction of the said houses, it had been agreed upon that the defendant shall be paid a sum of Rs.50,00,000/- towards refundable advance and in addition, a sum of Rs.56,99,999/- for each of the Villas built by the defendant and marketed by the plaintiff. The plaintiff was at liberty to sell each of the Villas at a price of its choice. It was also agreed that the defendant shall proceed with the construction of the Villas as per the plans approved and periodically the plaintiff shall be entitled to market the said units at a price of its choice, but pay Rs.56,99,999/- per each unit to the defendant. The plaintiff was thus engaged by the defendant as a marketing agent for the purposes of marketing and promoting the project being developed by the defendant and the price of each unit as fixed under the MOU.

6. The plaintiff’s further case was that in pursuance of the