The power to attach property under Order XXXVIII Rule 5 CPC should not convert unsecured debts into secured ones and must be exercised judiciously to prevent abuse.

ORDER

IA No. 9202/2020 (under Order XXXVIII Rule 5 CPC) & IA No. 4438/2021 (u/S 151 CPC)

1. According to plaintiffs, an Agreement to Sell dated 07.01.2019 was entered into between the plaintiff/buyer and defendants/seller in respect of property being D-24, Rajouri Garden, New Delhi-110027, in terms whereof, plaintiffs paid and amount of Rs.3.85 Crores on 07.01.2019 and Rs.2.00 Crores on 03.02.2019 to the defendants as earnest money. Since, the Agreement to Sell in question could not be executed the plaintiff has filed the present suit for recovery praying for recovery of Rs.5,85,00,000/- along with interest of Rs.1,43,75,000/-.

2. By the above captioned first application, applicants/plaintiffs are seeking attachment of the property or direct the defendants to provide security to the extent of liability and to restrain them to not create any third party interest against the suit property. Vide ex parte interim order dated 12.10.2020, this Court has restrained the defendants from creating third-party rights in the suit property.

3. By the above captioned second application, applicants/defendants are seeking vacation of ex parte ad-interim stay granted by this Court vide order dated 12.10.2020.

4. During the course of hearing, it was submitted on behalf of plaintiffs that defendants had assured the plaintiffs that they are owners of the suit property and have right to sell the property, but the same is under charge/mortgaged with HDFC Bank. However, defendants had also assured the plaintiffs that they would obtain `No Objection Certificate' (NOC) from HDFC Bank and the suit property shall be made free from all encumbrances, liens, decree, court cases, attachments, outstanding dues, charges, tax penalties etc., before the registration of the sale deed in favour of the plaintiffs.

5. According to plaintiffs, they agreed to purchase the property and settled the terms of payment, mode of transfer, date of transfer and other formalities and the price of the suit property was settled for Rs.38,50,00,000. The plaintiffs gave amount of Rs.3,85,00,000/- to the defendants on 07.01.2019 towards earnest money, against receipt and in the presence of the witnesses. On the said date i.e. 07.01.2019, an Agreement to Sell was also executed between the parties. Thereafter, plaintiffs also claim to have given a sum of Rs.2,00,00,000/- on 03.02.2019 to the defendants towards part payment in respect of the suit property.

6. Learned counsel for plaintiffs submitted that it came to the knowledge of plaintiffs that defendant No.2-Satinder Singh had duped various persons/buyers who wanted to buy property in "Project Grande Venice" at Noida, run by defendant No.2 and he was arrested on 08.02.2019. However, in June, 2019 plaintiffs informed the defendants that they were willing and ready to pay the balance purchase money if defendants are ready to transfer the property to the plaintiffs, however, defendants were not able to obtain NOC from the bank where the subject property was mortgaged. Learned counsel for plaintiffs vehemently opposed the application filed by the defendants seeking vacation of interim stay on the ground that defendants have failed to fulfill the terms of Agreement to Sell in respect of suit property and on their failure to comply with the said Agreement, the defendants are liable to pay the double of the earnest money received by them. It was submitted that the defendants have enjoyed the benefit of amount given by the plaintiffs and so, plaintiff are entitled to refund of the amount with interest @15% p.a.

7. Learned counsel for plainti