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2023 Supreme(Online)(KER) 16779
HIGH COURT OF KERALA
C.S. DIAS, J
T. SHAJI
– Appellant
Versus
MARATH ENTERPRISES & CRUSHERS PVT. LTD. – Respondent
OP(C) 1946 2022
MANU VYASAN PETER, P.B. KRISHNAN, SABU GEORGE, SANTHEEP ANKARATH, P. ANIRUDHAN
A garnishee order can attach third-party property pre-judgment if jurisdiction allows and the defendant objects timely.
Headnote:
Garnishee - Civil Procedure - Code of Civil Procedure - Order 21 Rule 46, Order 38 Rule 5 - The court addressed the legality of a garnishee order under the relevant provisions, clarifying that third-party property may be attached before judgement but must adhere to jurisdictional restrictions. The court emphasized the necessity for proper objections by the defendant to establish further proceedings.
Fact of the Case:
The petitioner challenges an order directing garnishees to withhold funds payable to him in a suit for money recovery, contesting the applicability of attachments under civil procedure rules.
Issues: Whether the lower court's order enforcing a garnishee on the petitioner's funds was erroneous and beyond its jurisdiction under the applicable civil procedure rules.
Ratio Decidendi: The court established that while property of a third party may be attached before judgment, jurisdictional requirements and appropriate objections from the defendant are essential.
Final Decision: The court directed the lower court to review the application while considering both parties' submissions within one month.
JUDGMENT
The original petition is filed challenging Ext.P3 order passed in I.A. No.1/2022 in C.S. No.10/2022 by the Commercial Court, Ottappalam. The petitioner is the defendant and the first respondent is the plaintiff. The respondents 2 to 5 are not parties to the suit, but have been impleaded in the status of garnishee.
2. The relevant background facts leading to Ext.P3 order, are:-
(i) The first respondent has filed the above suit against the petitioner for recovery of money.
(ii) Along with the suit, the first respondent had filed I.A. No.1/2022 (Ext.P2), to direct the petitioner to furnish security for the suit claim and to order the respondents 2 to 5 not to disburse the funds that are payable to the petitioner.
(iii) The court below, by the impugned Ext.P3 order, has directed the respondents 2 to 5 not to release any amount due to the petitioner. Ext.P3 order is erroneous and unsustainable in law. Hence, the original petition.
3. Heard; Sri.P.B.Krishnan, the learned counsel appearing for the petitioner, Sri. Santheep Ankarath, the learned counsel appearing for the first respondent and the learned Government Pleader appearing for the respondents 2 to 5.
4. Sri.P.B. Krishnan, vehemently contended that the court below has gone wrong in passing Ext.P3 order, because the order is akin to proceedings under Order 21 Rule 46 of the Code of Civil Procedure (in short Code’),which is not applicable on the original side under Order 38 Rule 5 of the Code. He also contended that even if the provision is found applicable a garnishee order can only be passed by the court having territorial jurisdiction as per the law laid down inBulkeesu Beegum V. Gonzago [1961 KHC 230] . According to him, the court below has failed to appreciate the point that only the property of the defendant can be attached invoking Order 38 Rule 5 of the Code and not that of third party strangers.
5. The above submissions were assiduously countered by Sri.Santheep Ankarath, who placed the decisions of this Court inGreater Cochin Development Authority v. Harrisons Malayam Ltd. [2002 KHC 206] and that of the Andhra Pradesh High Court inSurender Singh Bajaj v. M/s Kitty Steels Ltd and Another [2003 KHC 3079] , to fortify his contentions that there is no embargo to attach a property of a third party before judgment, but the same can only be finalised and released after the decree. Moreover, the petitioner has rushed to this Court even prior to the filing a counter affidavit to Ext.P2 application. Therefore, the impugned Ext.P3 order is legal and justifiable, and not liable to be interfered with by this Court. Hence, the original petition may be dismissed.
6. The short question is, whether there is any error in Ext.P3 order.
7. On an appreciation of the pleadings and materials on record, it can be gathered that Ext.P2 application has been filed under Order 38 Rule 5 of the Code, to direct the petitioner to furnish security for an amount of Rs.47,28,114/- and to order the respondents 2 to 5 not to disburse the amounts payable to the petitioner as mentioned in the schedule attached to the application.
8. Admittedly, the petitioner has not filed his objection to Ext.P2 application.
9. The court below, by the impugned Ext.P3 order, has only passed a conditional order of attachment by directing the respondents 2 to 5 not to release any amount to the petitioner until further orders. Therefore, it is upto the petitioner to show cause against the conditional order.
10. Sri.P.B. Krishnan submitted that the petitioner has now filed his objections to Ext.P2 application.
11. In the above factual scenario, without expressing anything on the merits of the rival submissions, I am of the view that it would be upto the court below to decide whether Ext.P3 conditional order of attachment is to be made absolute or not after adverting to the rival submissions of both sides. Thus, I relegate the parties back to the court below to address their respective arguments and leave it to the court below to
