IN THE HIGH COURT OF CALCUTTA
Harish Tandon, J.
Swapan Guha – Petitioner
Versus
Pratima Bagchi – Respondent
C.O. No. 946 of 2015
Decided On : 15-05-2015
ATTACHMENT BEFORE JUDGMENT - DEVELOPER'S SALE AGREEMENT - DEBTORS' INTENTION TO DISPOSE OF PROPERTY - ATTACHMENT BEFORE JUDGMENT - PRE-SUIT CONDUCT - AGREEMENT FOR SALE OF FLATS - ORDER 38, RULE 5 OF THE CODE OF CIVIL PROCEDURE - PROPERTY ATTACHMENT - REQUIREMENTS - PRE-SUIT CONDUCT - INTENTION TO OBSTRUCT OR FRUSTRATE DECREE - CONDITIONS.
Fact of the Case:
Plaintiff filed a suit for recovery of Rs. 18,16,730/- along with interest and permanent injunction restraining the defendant from transferring, alienating and/or handing over the flats to any person or persons in the multistoried building. Plaintiff claimed entitlement to Rs. 125/- per square feet from the total saleable area of the developer under the development agreement. Defendant admitted the execution of the agreement but disputed the payment of Rs. 20,00,000/-. Plaintiff filed an application for attachment before judgment under Order 38, Rule 5 of the Code of Civil Procedure, which was rejected by the trial court.
Finding of the Court:
The court held that the plaintiff had established a prima facie case for attachment before judgment. The court found that the defendant had entered into agreements for sale of several flats with the intention to dispose of the flats which had not been conveyed as yet. The court also found that the defendant had not specifically denied the execution of the agreements except for stating that the premises were still under construction and had not been completed.
Issues: Whether the plaintiff had established a prima facie case for attachment before judgment under Order 38, Rule 5 of the Code of Civil Procedure.
Ratio Decidendi: The court held that the requirements of Order 38, Rule 5 of the Code were satisfied. The court relied on the following principles: - Mere transfer of the flats is not enough unless it is shown that such transfer is intended to delay or defeat the claim. - Such intention can be gathered not only from the documents but the conduct of the party both at pre and post suit stages. - If it is evident from the conduct of the parties that the disposal of the property is made with an intent to defeat and/or delay the claim, it satisfies the requirements of Order 38, Rule 5 of the Code.
Final Decision: The court set aside the order of the trial court and directed the defendant to furnish security to the amount of the plaintiff's claim within fortnight from the date of the order. In default, the right, title and interest in the defendant in the property mentioned in Schedule 'C' of an application under Order 38, Rule 5 of the Code be attached before judgment.
Harish Tandon, J.
1. This revisional application is directed against an order no. 23 dated July 24, 2014 passed by the learned Judge, Small Causes Court at Sealdah in Money Suit No. 17 of 2013 by which an application under Order 38, Rule 5 of the Code of Civil Procedure praying for attachment before judgment is rejected.
2. The plaintiff/petitioner filed the aforesaid suit in the Civil Judge (Senior Division), Sealdah for recovery of a Sum of Rs. 18,16,730/- together with the interest as per the Interest Act and permanent injunction restraining the defendant/opposite party from transferring, alienating and/or handing over the flats to any person or persons in the multistoried building described in Schedule 'B' thereto. The plaintiff says that the defendant being the proprietors of a partnership firm entered into a development agreement with one Jyoti Prakash Row Chowdhury who is admittedly the owner of the several holdings comprising an area of 9 Cottahs 5 Chittacks together with the two storied old brick building on May 27, 2005. The opposite party engaged a contractor for construction of the said project and incurred substantial amount after taking loan from the different persons. Because of the financial stringency and difficulty in completing the project, the plaintiff/petitioner was approached to finance the project and to provide liquid resources to complete the same.
3. By virtue of an agreement dated November 25, 2008, the petitioner alleged that it had agreed to liquidate the liability of the opposite party no. 1 to the tune of Rs. 20,00,000/- from time to time and as per Clause 8 of the said agreement is entitled to receive Rs. 125/- per square feet from the total saleable area of the developer under the development agreement with the original owner. It is further alleged that the opposite party no. 1 issued two cheques of Rs. 10,00,000/- each covering the amount paid to meet out the outstanding liabilities of the different lenders but were dishonored because of insufficient funds. A proceeding under Section 138 of the Negotiable Instrument Act has been initiated which is pending before the Additional Chief Judicial Magistrate at Kakdwip. In Paragraph 11 of the plaint, it is asserted that the total area with the opposite party no. 1 is entitled under the development agreement is 14885.83 sq. ft. and, therefore, as per Clause 8 of the said agreement, the plaintiff is entitled to receive a sum of Rs. 18,60,730/-. Since the opposite party no. 1 have not paid the said amount in terms of the said agreement, the plaintiff further claims an interest on the said amount as per the Interest Act.
4. In the written statement, the opposite party no. 1 admitted the execution of the agreement dated November 25, 2008, but disputed the payment of a sum of Rs. 20,00,000/-. It is clearly averred that the plaintiff made a finance to the project to the tune of 8 lakhs but subsequently refused to provide further money for smooth running of the project. So far as the issuance two cheques covering the said sum of Rs. 20,00,000/- are concerned, it is stated that those were obtained by practicing fraud and pressure through other persons for which a proceeding has been initiated under Section 156 (3) of the Code of Criminal Procedure before the Additional Chief Judicial Magistrate at Sealdah. In Paragraph 11 of the written statement, the opposite party no. 1 says that out of the said sum of Rs. 8 lakhs, a sum of Rs. 3 lakhs were returned to the plaintiff/petitioner but the moment, the plaintiff/ petitioner claimed the said sum of Rs. 20,00,000/-, the remaining balance of Rs. 5000/- was withheld.
5. In the backdrop of the aforesaid stands of the parties, the petitioner took out two applications namely an application for injunction restraining the opposite party no. 1 from transferring, alienating and handing over the flat to any persons in the multistoried building and an application under Order 38, Rule 5 of the Code for attachment before
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