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1978 Supreme(Mad) 84

Madras High Court
RAMAPRASADA RAO,SATHAR SAYEED
Southern Steelmet and Alloys - Appellant
Versus
B.M.Steel, Madras - Respondent
Decided On : 02/01/1978

Advocates:
K. Parasaran for B. Soundarapandian, for Appellant; M. R. Narayanaswami, for Respondent.

The adjudication of claims and objections to attachment of property under Order 21 Rule 58 C. P. Code is no longer summary in nature, but should be full, realistic, and after giving adequate opportunity to the parties concerned to prove their respective claims, rights, title, and interest in the property attached.

Headnote:

ATTACHMENT BEFORE JUDGMENT - ORDER 21 RULE 58 C. P. CODE - ADJUDICATION OF CLAIMS TO, OR OBJECTIONS TO ATTACHMENT OF, PROPERTY - FULL ENQUIRY AND ADJUDICATION OF RIGHTS OF PARTIES MANDATORY - ORDER PASSED UNDER RULE 58 HAS THE SAME FORCE AND EFFECT AS A DECREE.

Fact of the Case:

The appellant, a plaintiff in a suit, attached goods belonging to B. M. Steel, the defendant, before judgment. The incorporated company, B. M. Steel Pvt. Ltd., filed a claim petition under Order 21 Rule 58 C. P. Code, claiming the goods as their own. The trial court, after a summary enquiry, raised the attachment. The appellant challenged this order in appeal.

Finding of the Court:

The court held that the adjudication of claims and objections to attachment of property under Order 21 Rule 58 C. P. Code is no longer summary in nature, but should be full, realistic, and after giving adequate opportunity to the parties concerned to prove their respective claims, rights, title, and interest in the property attached. The court found that the trial court did not conduct a full adjudication of the rights of the parties and set aside the order raising the attachment.

Issues: Whether the adjudication of claims and objections to attachment of property under Order 21 Rule 58 C. P. Code is summary in nature.

Ratio Decidendi: The court relied on the amended Order 21 Rule 58 C. P. Code, which provides for a full enquiry into all questions, including questions relating to right, title, or interest in the property attached, and mandates that the court enquiring such a claim petition shall determine such questions. The court also noted that sub-clause (4) of Order 21 Rule 58 C. P. Code provides that the order made on the claim or objection shall have the same force and effect as a decree.

Final Decision: The court allowed the appeal, set aside the order of the trial court, and remitted the subject matter to the Original Side of the court for a fuller and detailed examination and adjudication of the rights of the parties.

Judgement

RAMAPRASADA RAO, J. :- Two applications, Appln. No. 3578 of 1977 by B. M. Steel Pvt. Ltd., and Appn. No. 3595 of 1977 by Maharashtra Bank for similar reliefs were filed on the Original Side of this court under Or. 21 rule 58 C. P. Code, stating that both the applicants as above were the owners of the steel and M. S. rounds or were interested in them and which were at No. 32 Suryanarayana Chetti St. Madras 13, and which according to the company, were their goods and which according to the Bank were goods in and over which they had an enforceable legal right. The appellant as plaintiff instituted a suit CS No. 354 of 1977 on the file of the Original Side of this court against a partnership firm known as B. M. Steel impleading the partners therein as defendants 2 to 6. Contemporaneous with the filing of the suit, an application for attachment before judgment was filed by the plaintiff-appellant. Notice in that application was served on the partnership firm B. M. Steel. When ultimately the application for attachment before judgment came up for final disposal B. M. Steel was prepared to give an undertaking not to alienate the goods belonging to it. In consonance with the undertaking which they wanted to give, they filed on affidavit, but later it was discovered, according to the plaintiff, that a large stock of over 52 tons of steel belonging to B. M. Steel which was available at No. 32 Suryanarayana Chetti St, was not included in the affidavit of undertaking. It was also averred that there is every possibility of B. M. Steel transferring such goods in the aforesaid godown to another company which was an incorporated one and which is the applicant in Appn. No. 3578 of 1977 and that if B. M. Steel effected a transfer of such goods to the incorporated company, they would be put to irreparable loss. They sought therefore a physical attachment of those goods instead of accepting the affidavit of undertaking filed by B. M. Steel. Accordingly, an attachment was effected on 14-11-1977 of goods, inter alia, found at No. 32 Suryanarayana Chetti St,. The incorporated company as claimant filed Appn. No. 3578 of 1977 and sought for raising of the attachment claiming the goods as their own and setting up a title in themselves independent of that of B. M. Steel. This was opposed by the plaintiff in the main suit. When the claim petition as it is popularly called filed under Or. 21 Rule 58 C. P. Code came up for hearing, the learned Judge, enquired into the matter summarily and on the affidavits and probably on representations made before him at the time of the hearing. He mainly adverted to the fact that the supplies were made after the date of the incorporation of the private limited company, that such supplies therefore not having been made to the corporate body pursuant to any understanding or contract, they were not liable to pay for the goods and that, therefore, the attachment of their goods for a debt due by B. M. Steel is illegal. The contention of the plaintiff throughout was that the incorporated company is alter ego of B. M. Steel that the memorandum of association of the incorporated company provides for the taking over of the business of B. M. Steel, which obviously includes its assets, that almost all the partners of B. M. Steel are the directors of the incorporated company and that therefore the claim that the goods at No. 32 Suryanarayana Chetti St, are the goods of B. M. Steel is not sustainable. The learned Judge after referring to the contentions of the parties raised the attachment. As against this, the present appeal has been filed.

2. Mr. K. Parasaran, the learned counsel for the appellant, referred to us the change of law after the amendment of the Civil Procedure Code by Central Act 104 of 1976. There has been a drastic change in the literature, the mode of approach and the method by which a decision should be arrived at and which should be adopted by a civil court when an application under Or. 21, Rule 58 comes u













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