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2008 Supreme(Cal) 939
IN THE HIGH COURT AT CALCUTTA
Tapan Mukherjee, J.
Devendra Kumar Chaudhury
Vs.
Himanshu Ray Parekh & Anr.
C.O. No. 298 of 2008
Decided on : 22nd September, 2008
Saurabh Guhathakurata for the petitioner
S.S. Mukherjee, Siddheswar Chanda, R. Dutta for the D.P. No.2
The main legal point established in this judgment is that an order of attachment passed without complying with the provisions of Order 38 Rule 5 CPC is void. The court also affirmed the inherent power of the court under section 151 CPC to correct such errors and prevent abuse of the process of the court.
Headnote:
Order 38 Rule 5 CPC requires the court to be satisfied that the defendant is about to dispose of or remove his property with the intent to obstruct or delay the execution of a decree. The court must then pass an order for attachment, specifying the security to be furnished or the property to be produced. The court found that the order of attachment in this case was passed ex parte and in violation of the provisions of Order 38 Rule 5 sub-rule (1) CPC, making it void. The court also considered the inherent power of the court under section 151 CPC to correct its own error and prevent abuse of the process of the court.
Fact of the Case:
The petitioner filed an Insolvency Case under section 13(2) of the Provincial Insolvency Act. The petitioner obtained an order of attachment on the property of the debtor before judgment. The wife of the debtor filed an application claiming ownership of the property and the court allowed the application and recalled the order of attachment. The petitioner filed an application under Article 227 of the Constitution of India against this order.
Finding of the Court:
The court analyzed the provisions of Order 38 Rule 5 CPC and found that the order of attachment was passed ex parte without following the necessary requirements. The court also considered the inherent power of the court under section 151 CPC to correct its own error and prevent abuse of the process of the court. The court concluded that the order of attachment was void and amounted to an abuse of process of law.
Ratio Decidendi: The court held that the order of attachment was void due to non-compliance with the provisions of Order 38 Rule 5 CPC. The court also held that the inherent power of the court under section 151 CPC could be invoked to correct such errors and prevent abuse of the process of the court.
Result: The court dismissed the application and affirmed the impugned order of the learned Additional District Judge.
Tapan Mukherjee, J.
This application under Article 227 of the Constitution of India is directed against the order dated 20.12.2007 passed by learned Additional District Judge, 7th Court, Alipore in Insolvency Case No. 314 of 2005.
2. The petitioner-creditor filed an Insolvency Case 314 of 2005 under section 13(2) of the Provincial Insolvency Act on 11.5.2005. In that proceedings the petitioner filed an application under Order 38 Rule 5 CPC for attachment of the property of the debtor before judgment and obtained an order of attachment on 12.1.2006 and writ of attachment was issued on 31.1.06.
3. O.P. 2, the wife of O.P. No.1 the debtor filed an application before the learned Court as third party claiming herself as an owner of the property in respect of which writ of attachment was issued by the learned Court.
4. O.P. No. 1 filed written objection stating that his wife O.P. No. 2 Manju Parokh was absolute owner of the property in question by virtue of deed of gift executed in her favour by him on 12.7.05. The O.P. No.2 filed an application under section 151 of CPC on 27.2.06 for setting aside or vacating the order of attachment. The said petition was contested by the petitioner creditor. But the petition was allowed on 20.12.07 by the impugned order and order of attachment passed by the learned Additional District Judge on 12.1.2006 was recalled.
5. Being aggrieved by the said order the petitioner-creditor has filed the instant application under Article 227 of the Constitution of India.
6. It has been contended by the learned Lawyer for the petitioner that the O.P. No. 2 is a stranger to the Insolvency Case and has no locus standi to file such application for setting aside the order of attachment without being added party to the proceedings. Learned Lawyer further contended that the transaction between the debtor and his wife O.P. No. 2 is a sham transaction made with the sole object to frustrate the Insolvency Case. Learned Jude has failed to exercise jurisdiction properly causing miscarriage of justice.
7. It has been further contended by the learned Lawyer for the petitioner that the application under section 151 CPC is not maintainable as alternative remedy under Order 38 Rule 8 CPC is available and learned Judge should not have allowed the application and the impugned order cannot stand.
8. Learned lawyer for the petitioner has placed his reliance upon the decisions reported in 2008(2) WELR (SC) at page 290.
9. Learned Counsel for the O.P. No. 2 has contended that both the O.P. No. 1 and 2 were joint owners of the suit property in respect of which the order of attachment has been passed on the basis of deed of purchase dated 5.10.1999 and subsequently, O.P. No.1 gifted his one half share in the suit property to the O.P. No.2 on 12.7.05 by way of registered deed of gilt and consequently O.P. No.2 got her name mutated in the office of Kolkata Municipal Corporation. Previously the petitioner filed an application for appointment of receiver and attachment of property of the debtor and the Court refused to pass interim order and the matter was fixed for final hearing on 6.2.2006. When such application was pending the petitioner filed an application under Order 38 Rule 5 CPC on 10.1.2006 and got an exparte order of attachment on 12.1.2006 without complying with the provisions of Order 38 Rule 5 sub-rule (1) and the said order of attachment is void in terms of sub-rule (4) of Rule 5 Order 38 CPC.
10. Learned Counsel for the O.P. has further contended that even if it is assumed that there was no transfer by way of gift to O. P. No.2 by O.P. No.1 then also it is undisputed that the property is a joint one and no order of attachment can be passed in respect of joint property. Learned Counsel has further contended that existence of alternative relief docs not stand on the way of invoking power under section 151 CPC for the ends of justice to prevent abuse of process of the Court. O.P. No.1 is not the owner of the suit property and O.P
