The court held that the provisions of Order 38 Rule 5 CPC are stringent and are exercised when the applicant is able to make out a prima facie case and satisfy the ingredients under these provisions. In the present case, the court found that the plaintiff had made specific allegations that the defendant was attempting to dispose of properties to defeat the decree, and the defendant's reply was vague and inadequate. The court also noted that an unpaid seller has a right over the property sold, and it was necessary to protect the plaintiff's interest in the suit.

1. Both Civil Revisions Nos. 3636 and 3663 of 1997 arise from common facts thus it is considered appropriate to dispose of both these petitions by a common order. Plaintiff Arjan Dev Verma who is a sole proprietor of M/s. Laxmi Iron and Steel Company, Amritsar had filed a suit against M/s. Nagpal Steel Limited for recovery of Rs. 8,42,000/- along with costs and interest at the rate of 18% per annum in the Court of Civil Judge, Junior Division Amritsar. The plaintiff had averred that they had supplied iron scrap from time to time and they were maintaining mutual and current account for the supply of goods, bills raised and the payments received from time to time. The defendants were also issuing S. T. Forms for the goods received in addition to the acknowledgment receipt of the goods duly endorsed on the challan forms. This suit was contested by the defendants wherein they raised preliminary objection with regard to maintainability of the suit, locus standi of the plaintiff, and misjoinder and non-joinder of the necessary parties etc. The receipt of the goods as such was not denied and in reply to para 3 of the plaint the following averments were made in the corresponding paragraph of the written statement :-

"That the para 3 of the plaint as alleged is absolutely wrong and denied. It is denied that the defendants have been purchasing goods from the plaintiff at Amritsar. It is further denied that the plaintiff maintained account of the defendant in the account books. Whatever goods have been purchased by the defendants the defendants regularly paid the amount to the plaintiff. It is denied that the payment of the goods paid by the defendants were duly credited and debited in the account........"

2. Along with the suit the plaintif had filed an application under Order 38, Rule 5. Under Order 40, Rule 1 and under Order 39, Rules 1 and 2 read with Sec. 151 of the Code of Civil Procedure with the following prayers :-

"Therefore, it is required that the Court should direct the respondents within the time to be fixed by it either to furnish the security for the suit amount along with costs and future interest or that may be sufficient to satisfy the decree and the above stated properties belonging to the respondents/defendants be attached before judgment and decree. That it will be also more convenient and just that a Receiver be appointed who may take the possession of the above stated properties along with goods lying therein so that the respondents may not be able to misappropriate the same and in the meantime, the respondents be restrained by issuing of an ad interim injunction from disposing of the property bearing No. B-15-669/3, Satsang Road Industrial Area-B, Ludhiana, and the goods lying therein. It is, therefore prayed that this application be accepted in the interest of justice, equity and fair play.Reply to this application was filed where it was stated that the plaintiff had no prima facie case and that there was no provision for directing furnishing of security and that the properties were not liable to be attached.

3 After hearing learned Counsel for the parties the learned trial Court vide its order dated 6-6-1997 directed the defendants to furnish security in the sum of Rs. 10 lacs by 30-7-1997. However, the other prayers of the plaintiffs were declined. As the defendants failed to furnish security by 30-7-1997 the learned trial Court vide its order dated 30-7-1997 while directing issuance of warrant of attachment of the property of the defendant and passed the following order :-

"Present Counsel for the parties. Security not furnished. Counsel for the defendants states that he has filed the revision before the Hon ble High Court against the order of this Court vide which the security was demanded. It is conceded that no stay has been granted so far. Since the security has not been furnished in terms of order dated 6-6-1997, the property of the defendant is ordered to be attached before judgment for 8-9-97.