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1993 Supreme(Gau) 230

GAUHATI HIGH COURT
D.N.Baruah, J.
Biharilal Srivastava -Appellant
Versus
Central Bank of India -Respondent
Civil Revision No. 329 of 1993
Decided On : 13-09-1993

Advocates Appeared:
A.Das, B.K.Bhattacharjee

The court must follow the procedure and conditions set out in Order 38 Rule 5 CPC before passing an order of attachment before judgment.

Headnote:

ATTACHMENT BEFORE JUDGMENT - ORDER 38 RULE 5 CPC - ORDER 38 RULE 5(1) AND (3) - COURT'S DISCRETION TO ATTACH PROPERTY - CONDITIONS AND PROCEDURE - INTERPRETATION AND APPLICATION.

Fact of the Case:

The Central Bank of India filed a suit for recovery of Rs. 1,63,732.90 and an application under Order 38 Rule 5 of CPC for attachment of Rs. 2,28,000 awarded to the petitioner in an arbitration proceeding. The Assistant District Judge passed an order directing the petitioner to furnish security of Rs. 2,30,000 or face conditional attachment of the awarded amount.

Finding of the Court:

The court found that the Assistant District Judge was satisfied that the petitioner intended to remove the property with the intent to delay or defeat the decree, but the order was not passed in exercise of jurisdiction as it did not give the petitioner an opportunity to show cause why he should not furnish security.

Issues: Whether the Assistant District Judge had the jurisdiction to pass the order of attachment before judgment without giving the petitioner an opportunity to show cause why he should not furnish security.

Ratio Decidendi: The court held that under Order 38 Rule 5(1) CPC, the court must be satisfied that the defendant is about to dispose of or remove the property with the intent to obstruct or delay the execution of any decree and must issue an order directing the defendant to furnish security or show cause why he should not furnish security. The court has the discretion to attach the property to achieve this object.

Final Decision: The court modified the order to allow the petitioner to show cause why he should not furnish security. If he fails to show cause or furnish security, the awarded amount is liable to be attached. The Assistant District Judge is directed to dispose of the matter within one month.

The opposite party Central Bank of India Jorbat, Rowriah Branch, Jorhat instituted a suit for recovery of Rs. 1,63,732.90. Along with the said suit the Bank also filed an application under Order 38 Rule 5 of CPC for attachment of the money awarded in an arbitration proceeding to the extent of Rs.2,28,000/-payable to the petitioner by the Commander Works Engineer, Jorhat before judgment. This application was supported by an affidavit. On that day the Assistant District Judge after hearing the counsel for the opposite party Bank and also on perusal of the papers was satisfied that the petitioner was inten­ding to take out the money awarded in the said arbitration proceeding, Accordingly, the Assistant District Judge passed the orders which I quote :

"So I direct the defendant/OP to furnish security in cash sum of Rs. 2,30,000/- on or before 5.7.93 to produce and place of the disposal of the Court when required the said amount pending furnishing of such security by the defendant, the value of the award in Misc (Arb) Case No. 134 of 1992, amounting to Rs. 2, 28.000/- (Rupees two lakhs twenty eight thousand) only now waiting for payment by the Commander Works Engineer, Jorhat Assam is conditionally attached." Hence the present petition.

2. In the nature of the order I propose to pass in this case, I do not consider it necessary to issue notice to the opposite party Bank.

3. Heard Mr. BK Bhattacharjee, learned counsel appearing on behalf of the petitioner.

4. Mr. Bhattacharjee submits that the order is illegal and without jurisdiction inasmuch as the order was passed without fulfilling the require­ments of Order 38 Rule 5 and, therefore, the order is void ab initio and liable to be set aside. Mr. Bhattacharjee further submits that before passing a conditional order under sub-rule (3) of Rule 5 of Order 38, the Court must fulfil all the conditions necessary under Rule 1 and as this has not been done, the impugned order cannot stand. Under Rule 5 of Order 38 where at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him is about to dispose of the whole or any part of his property or is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court, the Court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security. Sub-rule (3), however, provides that the Court may also direct the conditional attachment of the whole or any portion of the property so specified. The provisions of Order 38 Rule 5 referred to above clearly demonstrates that it was a protective measure to secure the interest of the defendant and intended to invalidate orders of attachment before judgment of the properties passed indiscriminately without notice, giving an opportunity to stay the attachment by offer of security as envisaged under Order 38 Rule 5 (1). The essential requirements of invoking power of the Court to affect the attachment under Order 38 Rule 5 (1) CPC are that the Court must be satisfied that the defendant is about to dispose of the whole or any part of his property or the defendant is about to remove the whole or any part of his/her property from the local limits of the jurisdi­ction of the Court and the defendant is intending to do so with a view to causing obstruction or delay in execution of any decree that may be passed against him or her. It is incumbent on the plaintiff to state precisely the grounds on which the apprehension is based that the defendant is likely to dispose of or to remove the property. It may even be necessary in some cases to give the source of




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