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1986 Supreme(Ori) 143

High Court Of Orissa
S. C. MOHAPATRA
TATANAGAR TRANSPORT CORPN - Appellant
Versus
AJANTA ENTERPRISERS - Respondent
Misc. Appeal 244  Of  1986
Decided On : 10/01/1986

Advocates Appeared:
ANANG PATNAIK, L.PANGARI, N.C.PATNAIK

The court must be satisfied that the defendant, with the intention to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of or remove the whole or any part of his property before exercising the power under O. 38, R. 5, C. P. C.

Headnote:

O. 38, R. 5, C. P. C. - Attachment before adjudication - Pre-conditions - Intention to obstruct or delay execution of decree - Disposal or removal of property - Satisfaction of Court - Factors to be considered.

Fact of the Case:

Plaintiff filed a suit for recovery of money alleging that the defendants had taken a loan from him and were about to dispose of or remove their property to delay or obstruct the execution of the decree. The trial court attached the defendants' aluminium ingots but later vacated the attachment. The plaintiff then filed an application for attachment of the defendants' property or for security to be furnished by the defendants.

Finding of the Court:

The court held that the trial court had not considered all the relevant factors in determining whether the defendants had the intention to obstruct or delay the execution of the decree and whether they were about to dispose of or remove their property. The court set aside the trial court's order and directed the trial court to examine the matter afresh.

Issues: Whether the trial court had erred in vacating the attachment of the defendants' aluminium ingots.

Ratio Decidendi: The court held that in order to exercise the power under O. 38, R. 5, C. P. C., the court must be satisfied that the defendant, with the intention to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of or remove the whole or any part of his property. The court must also consider the nature of the property, whether it is the property of the defendant, whether it is the whole or part of the property, and what is the intention of the defendant.

Final Decision: The court allowed the appeal and set aside the trial court's order. The court directed the trial court to examine the matter afresh giving both parties reasonable opportunity of adducing evidence and being heard.

S. C. MOHAPATRA, J.


( 1 ) DEFENDANTS are the appellants in this appeal under O. 43, R. 1 (u), Civil P. C. against an order under O. 38, R. 5, C. P. C. , directing them to furnish security.

( 2 ) MONEY Suit No. 324 of 1986 was filed in the Court of the Subordinate Judge, First Court, Cuttack, for recovery of Rs. 2,84,852. 89 paise alleged to have been taken by the appellants as loan from the plaintiff respondent 1. In the said suit plaintiff filed an application for attachment of some aluminium ingots which were alleged to have been intended to be taken out of the jurisdiction of the Court for the purpose of defrauding the plaintiff. Alternatively it was prayed that the security should be directed to be furnished by the defendants. The trial Court attached the aluminium ingots by an ex parte order. After appearance, the appellants raised objection on the ground that they were only carriers. The attachment was vacated by the trial Court which was challenged in this Court in Misc. Appeal No. 210 of 1986. While confirming the order this Court directed the trial Court to consider the question of furnishing security as prayed for by the plaintiff. In this background the present order has been passed.

( 3 ) THE allegations of the plaintiff, as revealed from the petition and affidavit, are that defendant 1 and its partners are deep in debt they have not discharged their statutory liabilities and they have been closing down their offices at different places wherefrom they carry on the business of transporting and their business is in the decline.

( 4 ) IN order to examine the contention of the plaintiff O. 38, R. 5, C. P. C. , is to be kept in view. It reads as follows :"5. Where defendant may be called upon to furnish security for production of property - (1) Where, at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him - (a) is about to dispose of the whole or any part of his property, or (b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court. the Court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security. (2) The plaintiff, shall, unless the Court otherwise directs, specify the property required to be attached and the estimated value thereof. (3) The Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified. (4) If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule, such attachment shall be, void. "as the language of the provision discloses, the power can be exercised on satisfaction of the pre-conditions. Order for attachment before adjudication of a claim or calling for security is not a common feature in a litigation. In exception circumstances only the drastic action can taken to safeguard the interest of the plaintiff. Therefore, the first legislative guideline that the intention of the defendant must be obstruct or delay the execution of any decree. Where the effect of some circumstances would lead to delay in execution of a decree or obstruction to it without the intention for the same the power is not available to be exercised. Therefore, the actions of the defendant are to be of voluntary nature from which legitimate inference of the intention to obstruct or delay the execution can be drawn. The second legislative guideline is that with the said intention the defendant is about to dispose of or remove from the jurisdiction of the Court whole or part of his property. Thus, it is clear that both the pre-condition









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