IN THE HIGH COURT OF KARNATAKA AT BENGALURU
H.P. Sandesh, J.
Vinod Kumar Jain, S/o Late Mohan Lal Jain And Ors. – Appellants
Versus
Shanthilal, S/o Late Lalchand - Respondent
M.F.A.No. 2160 of 2023 (CPC)
Decided On : 07-07-2023
Code of Civil Procedure, 1908 - Order 39 Rules 1 and 2, Order 38 Rule 5 - Property - Order of attachment - Suit for recovery of money - Appeal challenging order passed dismissing application - Appellants sought for an order of attachment before judgment by filing an application – Respondent has categorically taken contention that MOU is fabricated and signature is forged and also contend that payments which have been made are with regard to business of cloth - Para 17.
Finding of the Court: Court have pointed out that while withdrawing suit, there is no any averments with regard to document which plaintiffs relies upon and while withdrawing suit, it is stated that matter is settled out of Court – Court have already pointed out that defendant is not a party while withdrawing suit, but claims that subsequently MOU came into existence in 2018 and suit was withdrawn - Plaintiffs have not made out any prima facie case - Mere filing of affidavit itself is not enough unless a prima facie case is made out - Trial Court while considering material on record, taken note of question of entering into MOU and his liability to make payment and also taken note of fact that defendant has denied MOU and taken note of order sheet wherein plaintiffs have got dismissed suit as not pressed stating that matter is settled out of Court.
Result: Appeal dismissed.
JUDGMENT :
This appeal is filed challenging the order dated 30.01.2023, passed on I.A.No.1 in O.S.No.160/2021, on the file of the Principal Senior Civil Judge, Chikamagalur, dismissing the said application.
2. The factual matrix of the case of the appellants is that the appellants had filed a suit in O.S.No.160/2021 and interalia, sought for an order of attachment before judgment by filing an application under Order 38 Rule 5 of CPC. It is their case that the respondent and one Abdul Khader are the owners of the commercial property bearing number ID 21-2-3-136D/1 and assessment No.18447/12076 measuring 2840.42 sq.mtrs. situated near IDSG College, KM Road, Chikmagaluru. The property totally measures 5680.84 sq.mtrs and was auctioned by Canara Bank, Chikmagalur on 29.10.2010. The respondent and Abdul Khader purchased the entire extent of 5680.84 sq.mtrs. jointly out of which the respondent is the owner of 2840.42 sq.mtrs. Pursuant thereto, the respondent executed an agreement of sale dated 13.01.2014 in favour of appellant No.1 and his late father for the extent of 40% of the property since appellant No.1 had paid the sale consideration to the respondent at the time of purchasing the same from the Bank.
3. It is their case that appellant No.1 had paid the consideration of Rs.46,95,800/-in three installments of Rs.33,22,500/-, Rs.11,07,500/-and Rs.2,65,800/-and the said payments were made via cheques drawn on ING Vysya Bank, MG Road Branch Chikmagalur. Pursuant to the payments, the respondent refused to execute a sale deed in favour of appellant No.1 and hand over the possession of the property and hence a suit is filed in O.S.No.47/2014. During the course of trial, in order to settle the matter, the parties went to Bhootanatheshwara Temple, Volgerahalli and in the presence of elders and committee members of the Temple entered into an agreement attested by witnesses, wherein it was agreed that the respondent would execute a sale deed for 40% of the property subject to withdrawal of the suit. The plaintiff therein being a senior citizen, who is the father of appellant No.1, fearing the stress of litigation, agreed to the condition and withdrew the suit as not pressed as the matter is settled out of Court before the Lok Adalath. However, to the shock and surprise of the appellant No.1, the respondent did not come forward to execute the sale deed despite several requests. After several requests and pleading, the respondent instead of executing a sale deed, offered to pay Rs.1,84,51,000/-to appellant No.1 and his father as a one time settlement. The appellant No.1 and his father had agreed to the offer as the respondent was harassing them repeatedly. In pursuance thereof, the respondent executed a Memorandum Of Understanding (‘MOU’ for short) dated 02.12.2018 in favour of appellant No.1 and in terms of the said MOU, paid a sum of Rs.35,00,000/-in several installments between the years 2018-2020 by way of RTGS and cheque. The respondent failed to pay the balance amount and hence the appellants filed a suit for recovery of money of Rs.2,41,74,838/-and an application was filed under Order 38 Rule 5 of CPC. The Trial Court dismissed the same. Hence, the present appeal is filed before this Court.
4. The main contention of the learned counsel for the appellants before this Court is that the Trial Court committed an error in dismissing the application. The appellants have made out a clear case before the Trial Court showing that the respondent herein is intending to sell his share in the suit schedule property and has approached various buyers. The appellants have established prima facie case that the claim is substantial and genuine and through material evidence have shown the Trial Court that the respondent herein intends to alienate the property. The respondent has been avoiding payment of sum of money owed to appellant No.1 for almost a decade i.e., since 2014 by adopting various illegal means. The respondent though made the payment of Rs.3
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It is settled law that power under Order 38 Rule 5 of CPC is drastic and extraordinary power.
The court emphasized that attachment before judgment requires credible evidence of intent to obstruct execution, and failure to consider relevant documents constitutes a jurisdictional error.
A court may order a defendant to furnish security to prevent them from obstructing enforcement of potential judgments, contingent upon establishing a prima facie case.
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....
An application under Order XXI Rule 58 CPC is not maintainable if the applicant fails to establish a claim to the attached property and if prior proceedings have attained finality.
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