Attachment before judgment cannot be granted over properties alienated prior to the suit, nor should it be invoked against a guarantor until the primary borrower's assets have been exhausted, especially when those assets are sufficient to satisfy the total claim and no intent to obstruct justice is proven.

JUDGMENT :

P. VADAMALAI, J.

This Civil Miscellaneous Appeal is filed against the fair and decreetal order, dated 27.06.2025 passed in I.A.No.1 of 2024 in O.S.No.307 of 2020 on the file of the IV Additional District Court, Madurai.

2.The brief facts of the case:

The appellant is the 2^nd defendant in O.S.No.307 of 2020 on the file of the IV Additional District Court, Madurai. The 1^st respondent/plaintiff has filed the said suit against the 1^st defendant, P.L.Narayanan, and the appellant/2^nd defendant for recovery of money of Rs.1,57,73,685/- with subsequent interest based on a promissory note for Rs.1,28,00,000/- executed by the 1^st defendant. The appellant/2^nd defendant and two others signed as guarantors. After payment of Rs.20,00,000/-, the 1^st defendant has not repaid the remaining loan amount. Hence, the 1^st respondent/plaintiff filed the main suit for recovery of loan amount with interest. Along with the plaint, he filed a petition in I.A.No.1 of 2024 in O.S.No.307 of 2020 under Order 38 Rule 5 r/w 151 of CPC, for attachment before judgment over the petition mentioned properties of the 1^st defendant and the appellant/2^nd defendant. The petition was resisted by the 2^nd respondent/1^st defendant by way of filing a counter. There was no representation on the appellant/2^nd respondent's side. After hearing both sides, the Trial Court has passed an order of attachment before judgment on 27.06.2025. Aggrieved by the order of the Trial Court, the appellant/2^nd defendant has moved this Court by way of this Civil Miscellaneous Appeal.

3. Heard both sides and perused the records in this Civil Miscellaneous Appeal.

4. The learned counsel appearing for the appellant/2^nd defendant has argued that the 1^st respondent/plaintiff can seek attachment of properties of the principal debtor at first instance and then only he can seek action against the properties of the appellant/2^nd defendant, who signed as guarantor. The suit is filed for recovery of Rs.1,57,73,685/-, but the trial Court passed an order of attachment of the 1st defendant’s petition-mentioned properties worth Rs.5 crores, besides these, the properties of this appellant/ 2^nd defendant were ordered to be attached. Even as per the present guideline value, the value of the 1^st defendant’s properties is Rs.4,82,97,708/-. The properties shown in ‘A’ and ‘B’ Schedule, as that of the 2^nd defendant, are LLP properties belonging to M/s VEE 3 Constructions LLP, in which the appellant/2^nd defendant is a partner of 1% share as per the Limited Liability Partnership Agreement, dated 12.08.2016, entered into by the 2^nd defendant with one Mrs.Akilandam. The remaining 99% share belongs to M/s VEE 3 Constructions LLP. Moreover, in those properties, apartments were constructed and sold out to various persons as UDS even before the filing of the present suit. The appellant/2^nd defendant signed as guarantor only in individual capacity and did not sign as representative of M/s VEE 3 Constructions LLP’s Properties. Hence, the LLP properties cannot be attached. Therefore, the order of attachment passed by the trial Court over the LLP Properties was made without verifying the encumbrances. Hence, the interim order of attachment over the ‘A’ and ‘B’ schedule petition mentioned properties may be set aside.

5. In support of his arguments, the learned counsel for the appellant/2^nd defendant has relied on the following citations:

(1) 1988 (2) Law Weekly 34