Point of Law: Court cannot insist its compliance as if same would constitute a mandatory requirement under that provision i.e. Order XXXVIII Rule 5 C.P.C..

JUDGMENT :

The plaintiff/petitioner came up in appeal against the lifting of an order of attachment on the ground of non-disclosure of source of information regarding the intention of the defendant to alienate the property.

2. The subject matter of the suit comes to Rs.1,25,01,103/-. It is submitted that the dismissal of the application virtually left out the plaintiff without any other alternative to execute the decree that may be passed. In fact, what is incorporated under Order XXXVIII C.P.C. is a precautionary measure and shall not be used to defeat or pressurise the defendant or their rights over any movable or immovable property. But, at the same time, the court has to protect the interests of plaintiff and shall not permit the defendant either to dispose of his property or to remove from the jurisdiction of that court so as to defeat or delay the decree that may be passed. In the instant case, the order of attachment before judgment was lifted on the sole ground that the source of information regarding the attempt of the defendant to dispose of his property was not disclosed in the affidavit attached to the application. Hence, the question came up for consideration is whether the trial court is justified in lifting the attachment before judgment on that sole ground.

3. Initially, guidelines were issued under Order XXXVIII Rule 5 C.P.C. by the High Court of Calcutta in Premraj Mundra v. Md.Maneck Gazi & Ors. (AIR 1951 Cal. 156). The Apex Court had given acceptance to the said guidelines in Raman Tech & Process Engg. Co. and Another v. Solanki Traders [(2008) 2 SCC 302]. The guidelines issued by the High Court of Calcutta in Premraj Mundra's case (supra) are extracted below for reference:

“1) That an order under O. 38, Rr. 5 & 6, can only be issued, if circumstances exist as are stated therein.

2) Whether such circumstances exist is a question of fact that must be proved to the satisfaction of the Court.

3) That the Court would not be justified in issuing an order for attachment before judgment, or for security, merely because it thinks that no harm would be done thereby or that the defts. would not be prejudiced.

4) That the affidavits in support of the contentions of the applicant, must not be vague, & must be properly verified. Where it is affirmed true to knowledge or information or belief, it must be stated as to which portion is true to knowledge, the source of information should be disclosed, & the grounds for belief should be stated.

5) That a mere allegation that the deft, was selling off & his properties is not sufficient. Particulars must be stated.

(6) There is no rule that transactions before suit cannot be taken into consideration, but the object of attachment before judgment must be to prevent future transfer or alienation.

(7) Where only a small portion of the property belonging to the deft, is being disposed of, no inference can be drawn in the absence of other circumstances that the alienation is necessarily to defraud or delay the pltf's. claim.

(8) That the mere fact of transfer is not enough, since nobody can be prevented from ealing with his properties simply of cause a suit has been filed: There must be additional circumstances to show that the transfer is with an intention to delay or defeat the pltf.'s claim. It is open to the Court to look to the conduct of the parties immediately before suit, & to examine the surrounding circumstances, to draw an inference as to whether the deft. is about to dispose of the property, & if so, with what intention. The Court is entitled to consider the nature of the claim & the defence put forward.

(9) The fact that the deft, is in insolvent circumstances or in acute financial embarrassment, is a relevant circumstance, but not by itself Sufficient.

(10) That in the case of running businesses, the strictest caution is necessary & the mere fact that a business has been closed, or that its turnover has diminished, is not enough.

(11) Where however the deft, starts disposing of his