2018 Supreme(P&H) 3917
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Raj Mohan Singh, J.
M/s. Aricent Technologies (holdings) Limited - Appellant
Versus
M/s. Besto Electronics Pvt. Ltd. - Respondent
Civil Revision No. 1857 of 2017 (O&M)
Decided On : 25-07-2018
Ashok Aggarwal, Sr. Advocate with Mr. Aashish Chopra, Advocate Mr. Mukul Aggarwal, Advocate Mr. Prateek Sodhi, Advocate, for the Petitioner; Anjum Ahmed, Advocate, for the Respondent
The main legal point established in the judgment is the requirement for the plaintiff to establish a prima facie case and the defendant's intention to obstruct or delay the execution of any decree under Order 38 Rule 5 CPC.
Headnote:
Attachment before Judgment - Property Dispute - Order 38 Rule 5 CPC - M/s. Raman Tech & Process Engg. Co. & Anr., v. M/s. Solanki Traders, 2008(1) RCR (Civil) 195 - The court discussed the mandatory requirements of Order 38 Rule 5 CPC, emphasizing the need for the plaintiff to establish a prima facie case and the defendant's intention to obstruct or delay the execution of any decree. The court highlighted that the power under Order 38 Rule 5 CPC is drastic and extraordinary and should be sparingly exercised, with a focus on defined legal parameters to secure the ends of justice.
Fact of the Case:
The petitioner filed a revision petition against the order allowing the attachment of a property. The petitioner argued that the impugned order did not specify the mandatory requirements of law in terms of Order 38 Rule 5 CPC.
Finding of the Court:
The court found that the impugned order was not legally sustainable as per the requirement of Order 38 Rule 5 CPC and set it aside. The case was remanded to the lower court for reconsideration in accordance with the law.
Issues: The main issue was the legality and validity of the impugned order in terms of the mandatory requirement of Order 38 Rule 5 CPC.
Ratio Decidendi: The court emphasized the need for the plaintiff to establish a prima facie case and the defendant's intention to obstruct or delay the execution of any decree under Order 38 Rule 5 CPC. It highlighted that the power under this rule is drastic and extraordinary and should be sparingly exercised, focusing on defined legal parameters to secure the ends of justice.
Final Decision: The impugned order was set aside, and the case was remanded to the lower court for reconsideration in accordance with the law.
JUDGMENT
Mr. Raj Mohan Singh, J. - This revision petition has been preferred by the petitioner against the order dated 02.02.2017 passed by the Addl. District Judge (Ist)-cum-Commercial Court, Gurugram whereby application filed by defendant No. 1 (counter claimant) under Order 38 Rule 5 CPC was allowed and property bearing plot No. 31, Electronic City, Sector 18, Gurugram was attached.
2. Learned Senior counsel appearing on behalf of the petitioner referred to the facts arising out of lease deed with reference to different clauses, legal notice dated 17.08.2015, application filed by defendant No. 1/respondent No. 1 for dismissal of appeal before the Addl. District Judge, Gurugram (Annexure P-11 Colly), application filed by the plaintiff/petitioner for directing the defendant to accept physical possession of the suit property, statement dated 17.02.2016 made by Sanjeev Garg authorized person of the plaintiff, some paragraphs of the written statement and some paragraphs of the counter-claim filed by defendant No. 1 with reference to the prayer clause.
3. Learned Senior Counsel vehemently submitted that the impugned order does not specify mandatory requirement of law in terms of Order 38 Rule 5 CPC as held in M/s. Raman Tech & Process Engg. Co. & Anr., v. M/s. Solanki Traders, 2008(1) RCR (Civil) 195 and by relying upon the aforesaid precedent, learned Senior counsel submitted that the object of Order 38 Rule 5 CPC is to prevent any defendant from defeating the realisation of decree that may ultimately be passed in favour of the plaintiff either by attempting to dispose of or removing from the jurisdiction of the Court his immovables. The words "to obstruct or delay the execution of any decree that may be passed against him" in Rule 5 make it clear that before exercising the powers under the said Rule, the Court should be satisfied that there is a reasonable chance of a decree being passed in a suit against the defendant. The Court has to be satisfied that the plaintiff in all probability would succeed on the basis of prima facie case. Having just or valid claim or prima facie case will not entitle the plaintiff the Order of attachment before judgment in terms of Order 38 Rule 5 CPC unless he also establishes that the defendant is attempting to remove or dispose of his assets with the intention to defeat the decree that may be passed. Even where the defendant is removing or disposing off his property, attachment before judgment cannot be passed, if the plaintiff is not in a position to satisfy that he has prima facie case.
4. Learned Senior counsel further submitted that the power under Order 38 Rule 5 CPC is a drastic and extraordinary power. The same can be sparingly exercised. Such powers cannot be exercised mechanically and merely on the asking of the parties. The purpose of Order 38 Rule 5 CPC is not to bring an unsecured debt under the category of secured debt. Such an intended effort to seek leverage of this kind has to be discarded. The provision can be resorted to on some defined legal parameters so as to secure ends of justice. The party invoking Order 38 Rule 5 CPC should show prima facie case and satisfy the Court that the defendant is about to remove or dispose of the whole or part of his property with an intention to obstruct or delay the execution of any decree that may be passed against him. In the absence of mandatory requirement of Order 38 Rule 5 CPC, the order would be void ab initio. Perusal of the impugned order would show that the Court below has not recorded any satisfaction on the basis of defined parameters of Order 38 Rule 5 CPC, nor any sum has been specified in the order on evaluation of material. It is only on account of figure given by defendant No. 1, the impugned order has been passed without satisfaction of the Court as required in the aforesaid provision. Even the Court has not recorded its satisfaction with regard to the evaluation of the property attached as attached property should correspond