High Court of Judicature at Madras
R.S. RAMANATHAN, J.
M/s. Gem Graphics Rep by its Proprietor Saddiq Badsha
Versus
M/s. Sri Sai Papers, Rep by its Proprietor N.S. Prasath
C.R.P.(PD)No. 4546 of 2012 & M.P.No. 1 of 2012
Decided On : 14-12-2012
Attachment - Civil Procedure - Order XXXVIII Rule 5 - 1984-1-MLJ 148, AIR 2008 SC 1170, 2008-2 MLJ 1058 (SC) - The court discussed the provisions of Order XXXVIII Rule 5 of the Code of Civil Procedure and highlighted the requirement for the court to form a prima facie opinion about the merits of the case before passing an order for attachment. The court emphasized that the purpose of the rule is not to convert an unsecured debt into a secured debt and discouraged its use as a leverage for coercing the defendant to settle the suit claim.
Fact of the Case:
The respondent filed a suit for recovery of a sum of Rs.95,278 and applied for attachment of the property of the revision petitioner. The court directed the revision petitioner to furnish security, and upon non-compliance, ordered attachment of the properties. The revision petitioner challenged the order.
Finding of the Court:
The court found that the lower court erred in ordering attachment without properly appreciating the averments made in the affidavit filed in support of attachment. It emphasized the requirement for the court to form a prima facie opinion about the merits of the case before passing an order for attachment.
Issues: The main issue was whether the lower court was justified in passing an order directing the revision petitioner to furnish security without issuing a show cause notice.
Ratio Decidendi: The court emphasized that the purpose of Order XXXVIII Rule 5 of the Code of Civil Procedure is not to convert an unsecured debt into a secured debt and discouraged its use as a leverage for coercing the defendant to settle the suit claim. It highlighted the requirement for the court to form a prima facie opinion about the merits of the case before passing an order for attachment.
Final Decision: The civil revision petition was allowed, the order of attachment was set aside, and the matter was remanded to the lower court for further proceedings.
1. Defendant is the revision petitioner.
2. The respondent/plaintiff filed the suit for recovery of a sum of Rs.95,278/= and also filed application under Order XXXVIII Rule 5 for attachment of the property of the revision petitioner stating that they came to know that the revision petitioner was attempting to alienate the property with the intention to delay and defeat the creditors. The learned XI Assistant Judge, City Civil Court, Chennai directed the revision petitioner to furnish security for a sum of Rs.95,278/= and ordered notice to the revision petitioner and adjourned the case to 30.11.2012. On 30.11.2012, the revision petitioner entered appearance by filing vakalat and as the security was not furnished, the properties mentioned in the schedule to the petition filed for attachment was ordered and aggrieved by the same, this revision is filed.
3. Learned counsel for the revision petitioner submitted that the court below mechanically passed a conditional order on 17.11.2012 directing the revision petitioner to furnish security without forming an opinion whether the respondent has made out a case for directing the revision petitioner to furnish security and also without looking into the schedule of properties which are sought to be attached and on the first date of appearance, he filed vakalat and as the security was not furnished immediately, the court below passed an order of attachment and therefore, the order of the court below is liable to be set aside and relied upon the judgment in RAMAN TECH & PROCESS ENGG CO. v. SOLANKI TRADERS ((2008) 2 MLJ 1058 (SC)).
4. On the other hand, Learned counsel for the respondent submitted that under Order XXXVIII Rule 5 of the Code of Civil Procedure, the court has got discretion either to issue notice to the revision petitioner/defendant to show cause why an order directing him to furnish security should not be passed or the court can directly pass an order directing the revision petitioner to furnish security and having regard to the allegations made in the affidavit, the court below though it fit to pass a conditional order without issuing show cause notice and the revision petitioner did not comply with the conditional order and therefore, on 30.11.2012, the court below has passed the order of attachment and there is no illegality in the order passed by the court as the revision petitioner failed to furnish security as ordered earlier and the order of the court below dated 17.11.2012 directing the revision petitioner to furnish security cannot be considered as a non-speaking order and the court below, after considering the affidavit, passed the order and hence, the order of the court below need not be interfered with. He also relied upon the judgments in RAJENDRAN AND OTHERS v. SHANKAR SUNDARAM AND OTHERS (AIR 2008 SC 1170) and JAYALAKSHMI, K. v. S.M.MUTHIAH (1989-1-LW 549) in support of his contention.
5. According to me, the court below has committed a serious error in ordering attachment without properly appreciating the averments made in the affidavit filed in support of attachment.
6. It is seen from the judgment reported in 1989-1-LW 549 that if the court is satisfied that the defendant is about to dispose of whole or part of its properties with the intent to obstruct or delay the execution of any decree that may be passed in the suit, the court is entitled to order interim attachment even without notice. The learned Judge relied upon the judgment of this court reported in PAPPAMMAL v. CHIDAMBARAM (1984-1-MLJ 148) wherein the learned Judge discussed the law on that subject as follows:-
"If O.38 R.5(1) and (3) C.P.C. are so construed as to mean that in all cases, any order of attachment can be passed only after the defendant appears and furnishes security or otherwise makes arrangements to the satisfaction of the Court to meet the liability under the decree that may be eventually passed in response to a notice issued under O.38, R.5(1), C.P.C. then that would resu
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