The plaintiff must establish the defendant's mala fide intention to obstruct or delay the execution of the decree to obtain an order of attachment before judgment.

The Order of the Court was as follows :

Renox Commercials Limited has filed a suit in C.S. No. 518/99 for recovery of a sum of Rs. 56,23,123/- with future interest at the rate of 18% per annum against Inventa Technologies Private Limited, Chennai and Allahabad Bank, Main Branch, Chennai, the defendants.

2. Pending disposal of the suit, the plaintiff/applicant has filed this application No. 2290 of 1999 praying for a direction to the Inventa Technologies Private Limited, the respondent/first defendant herein, to furnish security for the suit claim failing which, to order attachment before judgment of the immovable property belonging to the first defendant/respondent herein.

3. This application was admitted by this Court on 21-7-1999 and notice was issued to the respondent for furnishing security, returnable by three weeks. On receipt of this notice, the respondent/first defendant filed a counter through the affidavit dated 30-8-1999, sworn to by its Managing Director. The applicant/plaintiff filed a reply affidavit dated 12-1-2000.

4. Mr. R. Thiagarajan, learned counsel appearing for the applicant/plaintiff would submit that the respondent received a loan of Rs. 10 lakhs on 5-10-1993 from the plaintiff company and a sum of Rs. 4 lakhs on the same date from Excel Fincon Private Limited, a sister concern of the plaintiff company which had subsequently merged with the plaintiff Company, that thereafter on 22-5-1995, the plaintiff company advanced a further sum of Rs. 15 lakhs to the first defendant and that when the plaintiff had been demanding the principal as well as interest amounts, the first defendant was avoiding payment and therefore, the plaintiff sent a legal notice dated 15-4-1997 to the first defendant and received a reply from the first defendant acknowledging the liability, but pleading some adjustment with regard to certain other accounts and that even though the first defendant had admitted and acknowledged the debt and liability, it had not chosen to pay the plaintiff, despite repeated demands and reminders.

5. Learned counsel for the applicant/plaintiff would further state that the applicant/plaintiff reliably learnt that the first defendant has contemplated to alienate the tangible assets of the Company including the goodwill and plant and machinery. Hence, he filed the suit and the application for furnishing security or attachment before judgment of the immovable property, namely, the factory premises of the first defendant, situate at Ambattur Industrial Estate.

6. Mr. Parthasarathy, learned counsel representing Mr. Sathish Parasaran appearing for the first defendant/respondent herein would vehemently contend that there was no loan transaction between the parties nor is there any material to show that there was an acknowledgment of any liability by the respondent Company in respect of the alleged loan, at any point of time, and nor is there any evidence in support of the applicant's claim even after adjusting payment of interest or principal by the respondent to the applicant company.

7. Learned counsel for the respondent would further state that the respondent has categorically stated in his reply notice dated 10-5-1997, emphatically denying the claim made by the applicant/plaintiff, that there was no loan transaction between the parties.

8. According to the counsel for the respondent, the plaintiff Company as well as its various sister concerns were all closely held private companies under the control and management of Mr. D. C. Surana and Mr. A. K. Baid, who are close relatives. The said individuals are also having control over a public limited company viz., Kalpana Industries Limited. The respondent Company has been engaged in manufacture and supply of machineries and technology to its customers in the field of plastics. The respondent company has also been dealing with M/s. Kalpana Industries Limited since 1993.

9. In the year 1993, Mr. A. K. Baid, representing Kalpana Industries Limited, approached the