The court reinforced that attachment before judgment under Order 38 Rule 5 must adhere strictly to procedural safeguards to prevent coercive misuse in recovery claims.

JUDGMENT

Dated this the 17^th day of March, 2025

This appeal is filed challenging the order dated 18.10.2023 in I.A.No.1 of 2023 in O.S.No.198 of 2023 of the Subordinate Judge’s Court, Ernakulam along with order dated 09.01.2024 rendered in a Review Petition(R.P.No.4 of 2023) filed in the said I.A.

2. Appellants are the respondents in the I.A./R.P. and the defendants in the O.S. Respondent herein is the plaintiff in the O.S. and was the petitioner in the I.A./R.P. Parties are hereinafter referred to as per their status in the O.S.

3. The short facts leading to the O.S. are as follows: Plaintiff and defendant Nos.1 and 2 are engaged in their own respective commercial endeavours and had been known to each other since several years. While the plaintiff is engaged in the business of textiles and readymade garments, defendants 1 and 2 are involved in the management of defendant No.3, a private limited company whose commercial operations relate to motor vehicles. The plaintiff and defendants 1 and 2 had been assisting each other in case of financial need and on 21.05.2021, defendants 1 and 2 sought to borrow an amount of Rs.7,00,00,000/- from the plaintiff on the personal undertaking to repay the same within 2 months, along with interest. Plaintiff consented, and the said amount was transferred by RTGS from the account of the proprietary concern of the plaintiff and was credited to the account of defendant No.3 company. However, the amount borrowed was not repaid in time. After repeated requests Rs.2,50,00,000/- was paid to the Bank account of the plaintiff's proprietary concern on 09.03.2022, and the balance amount is still outstanding. Upon the plaintiff following up on the matter, defendant No.1 issued a letter on the letterhead of defendant No.3 company undertaking to effect payment in full and seeking time till 27.03.2023 in the said respect. However, the amount remained unpaid and later the plaintiff came to reliably know that the defendants are in dire straits and that the 3^rd defendant company was on the verge of closure. Upon learning that defendants 1 and 2 are making frantic efforts to dispose of their properties to defeat their creditors, the plaintiff decided to move legally. Thus, O.S.No.198 of 2023 happened to be filed, which is a suit for money seeking to recover an amount of Rs.5,26,52,778/- with interest and cost from the defendants and their assets. I.A.No.1 of 2023 was filed along with the suit seeking to attach 3 items of property, of which item Nos.1 and 2 are the residential houses of defendant No.1 and defendant No.2 and item No.3 was the property belonging to the defendant No.3 Company. The trial court, after hearing both sides, partly allowed I.A. No. 1 of 2023 vide order dated 18.10.2023, attaching item No.3 property alone, ie., only the property of defendant No.3 Company. Thereafter, an R.P.No.4 of 2023 was filed by the plaintiff seeking to review the order in I.A.No.1 of 2023, and the trial Court then rendered an order dated 09.01.2024 in the R.P., granting attachment of all three items of property. An order dated 09.01.2024 was also issued in the same I.A.No.1 of 2023 reflecting the change pursuant to the review.

Aggrieved by the said orders, the defendants have filed this FAO.

4. After the filing of the FAO, I.A.No.3 of 2024 was filed by the appellants/defendants stating that the appellant No.1/defendant No.1 had passed away on 28.02.2024 and the legal heirs of the said party have already been impleaded as additional appellant Nos.4 to 6. It had been stated therein that the 3^rd defendant Company was now being represented by the 2^nd defendant, who i