IN THE HIGH COURT AT CALCUTTA
Biswaroop Chowdhury, J.
M/s Aei Engineering Industries Pvt. Ltd. and Others – Petitioners
Versus
M/s Linear Merchants Pvt. Ltd. and Another – Respondents
FMAT No. 305 of 2023, CAN No. 1 of 2023
Decided On : 19-07-2023
| Table of Content |
|---|
| 1. court admits the appeal and simplifies proceedings. (Para 1 , 2) |
| 2. appellants challenge ex parte order's justification. (Para 3 , 4 , 5 , 6) |
| 3. required judicial discretion in injunction matters. (Para 7 , 8 , 9 , 10) |
| 4. attachment of assets requires evidence of insolvency. (Para 11 , 12 , 13) |
| 5. appellate intervention criteria based on judicial reasoning. (Para 14 , 15 , 16 , 17) |
| 6. impugned order set aside; procedural directive issued. (Para 18 , 19 , 20 , 21) |
JUDGMENT :
Biswaroop Chowdhury, J.
1. We formally admit the appeal.
2. As the point involved is very short, we have heard out the appeal after dispensing with all formalities.
3. The appellants are aggrieved by an ex parte ad interim order passed by the learned court below restraining them from operating their bank account without leaving a balance representing the claim of the respondent/plaintiff, i.e. Rs. 25,00,000/ (rupees twenty five lakhs).
4. Mr. Bhattacharya, learned Advocate appearing for the appellant submitted that there was no occasion for the court to pass the order ex parte when the suit had been filed on 17th March, 2022 and the respondent/plaintiff had taken numerous adjournments to comply with the procedure for prosecution of the suit.
5. He said on 22nd June, 2023 there was no cause for passing the order ex-parte.
6. He also points out that the learned judge merely narrated the case of the respondent/plaintiff in the plaint and proceeded to pass the interim order without any supporting reason.
7. Mr. Arjun Mookherjee, learned Advocate appearing for the respondent no. 1 made very forceful submissions before this court. He placed the impugned judgment and order where the learned judge had narrated the facts of the case and also recorded the findings arrived at by him. Although the learned judge was unable to draw his own conclusion, prima facie, from the facts of the case, nevertheless, learned counsel tried to submit that the ultimate finding reached by the learned judge pointed to an affirmation on his part of the plaint case.
8. More importantly, he showed us Skyline Education Institute (Pvt.) Ltd. v. S.L. Vaswani & Ors. AIR 2010 SC 3221 (2010) 2 SCC 142 . On the basis of this judgment he contended that once the court of first instance exercised its discretion to grant or refuse to grant an injunction the appellate court would normally not interfere with that exercise of discretion just because it held a different opinion.
9. Rahul S. Shah v. Jinendra Kumar Gandhi & Ors. AIR 2021 SC 2161 : (2021) 6 SCC 418 also cited by learned counsel is a most interesting case which in paragraph 42 directed the courts to follow some directions, one of which was that the court may in appropriate cases under Section 151 of the Code of Civil Procedure, demand security to ensure satisfaction of any decree.
10. If the Supreme Court direction is to be obeyed a liberal view of Order 38, Rule 5 of the CIVIL PROCEDURE CODE is to be taken.
11. From this perspective was the impugned order restraining the respondent from operating their bank account valid?
12. Ordinarily, in a money suit before the decree, the plaintiff is not entitled to attach the assets of the defendant and cause it to be sold to realize its claim. We may do so only after obtaining the decree. An exception to this rule is when the defendant commits acts of insolvency by alienation of his properties to defeat the rights of any decree holder.
13. In those circumstances, the court passes an order of attachment or a restraint order to prevent such disposition. To obtain such an order some details have to be provided of the acts of insolvency committed by the defendant. In this case no details are available in the impugned order. Merely on the averments made in the plaint the impugned order has been passed.
14. We are bound by the law laid down by the Supreme Court in Skyline. But in that case the circumstances in which the appellate court can intervene were not in issue. Those circumstances are when the order
Violation of a court injunction has legal consequences, rendering the transactions illegal and not binding.
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 appeal against an interim order is not maintainable; the appellant must file an application for vacation of the order.
Point of law: Interim order of Single – Appeal not maintainable - Character of the ad interim order would continue to be the same until an adjudication is made by the irrespective of the fact as to w....
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