Madras High Court
Sri Humbi Hema Gooda vs M/S.The Tamilnadu State Transport on 30 September, 2011
Author: R.Subbiah
Bench: R.Subbiah
In the High Court of Judicature at Madras Dated 30.09.2011 Coram The Honourable Mr.Justice R.SUBBIAH Civil Miscellaneous Appeal No.1144 of 2011 and M.P.No.1 of 2011 Sri Humbi Hema Gooda Sri Gayathri Peda Sri Devanga Jagathguru Charitable Trust, Santhama Naickenpalayam, Palladam Taluk, Coimbatore District, rep. By its Power Agent Mr.R.Krishnasamy @ Girikannan ..Appellant ..vs.. 1. M/s.The Tamilnadu State Transport Corporation (CBE) Ltd., Coimbatore Public Limited Company, having its registered office at No.37, Mettupalayam Road, Coimbatore, rep.by its Managing Director. 2. P.Kothandapani 3. M.Ramachandran 4. S.Nagarajan ..Respondents Civil Miscellaneous Appeal filed under Section 104 read with Order 21 Rule 58(4) of C.P.C., against the judgment and decree dated 08.02.2011 made in E.A.No.12 of 2010 in E.P.No.17 of 2009 in O.S.No.128 of 2002 on the file of Additional District Court-cum-Fast Track Court No.III, Coimbatore. For Appellant : Mr.R.Subramanian for Mr.M.Venkadeshan For Respondents: Mr.T.Chandrasekaran for R1 JUDGMENT
Aggrieved by the order of dismissal made by the learned Additional District Judge, Fast Track Court No.3, Coimbatore, in E.A.No.12 of 2010 in E.P.No.17 of 2009 in O.S.No.128 of 2002 dated 08.02.2011, to raise the order of attachment, the appellant Trust has filed the present appeal before this Court.
2. The circumstances, which led the appellant to file the present appeal, are as follows:
(a) The 1st respondent herein, namely, Tamil Nadu State Transport Corporation (Coimbatore Division) filed a suit in O.S.No.80 of 1989 as against respondents 2 to 4 and 24 others for recovery of a sum of Rs.28,20,094.28 stating that during the period 1986 to 1988, the 1st respondent Corporation had disposed of 325 condemned vehicles through tender-cum-auction. Some of the defendants, who are the successful bidders, colluded with the officials of the Corporation, namely, the 1st and 2nd defendants in the suit, who were the Assistant and Deputy Manager (Traffic), had taken delivery of 55 vehicles without full payment/part payment, which caused loss to the Corporation to the extent of Rs.28,20,096.76. Hence, the Corporation has filed the said suit before the 1st Additional Sub Court, Coimbatore against the officials arraying them as 1st and 2nd defendants and the other auction purchasers as defendants 3 to 27. The 4th respondent herein was the 3rd defendant in the suit. Pending suit, they filed an application under Order 38 Rule 5 C.P.C. to get an interim order of attachment before judgment and on 31.01.1989, they obtained the order of attachment before judgment of the immovable properties of some of the defendants, which included the property of the 4th respondent/3rd defendant. Subsequently, the said suit was transferred to the Fast Track Court No.3, Coimbatore and re-numbered as O.S.No.128 of 2002, wherein the suit was decreed on 10.09.2004 for a sum of Rs.27,70,092.09 against 15 defendants. Pursuant to the said decree, the 1st respondent Corporation, to realise a sum of Rs.10 lakhs and odd from the 4th respondent, has filed an execution petition in E.P.No.17 of 2009 against the 4th respondent herein, to pass an order of sale of the property already attached to an extent of 5.71 acres of Dhali Village, Udumalpet Taluk, Coimbatore District. But the 4th respondent did not appear before the court.
(b) At this juncture, the appellant Trust filed a petition under Order 21 Rule 58 C.P.C. stating that they are the bona fide purchasers of the property from the said Nagaraj (3rd defendant) by a registered sale deed dated 24.04.1991. After purchase, in the said property Sri Gayathri Devi Temple and Vinayakar temple including Ashram have come up and they came to know about the order of attachment dated 31.01.1989 in I.A.No.50 of 1989 only after the 1st respondent Corporation filed the execution petition, after obtaining a decree in the suit.
(c) It is the case of the appellant before the court below that the order of attachment passed by the court below on 31.01.1989 is not in accordance with Order 38 Rule 5 C.P.C. since the 4th respondent/3rd defendant in the suit had not been called upon to furnish security for production of property before passing the order of attachment. Therefore, the order of attachment passed in I.A.No.50 of 1989 itself is void ab initio since the appellant trust are the bona fide purchasers of the property from the 4th respondent and thus, the attachment has to be raised by allowing the petition filed by the appellant herein.
(d) The said application was contested by the 1st respondent Transport Corporation stating that the property purchased by the appellant from the 4th respondent was attached as early as on 31.01.1989 itself. The 4th respondent is now colluding with the appellant in order to defeat the payment of the decree amount payable to the Corporation, has indirectly filed the application for raising the attachment. When the order of attachment is in force, the appellant ought not to have purchased the property from the 4th respondent and hence, the appellant is not a bona fide purchaser. Thus, the 1st respondent Corporation prayed for the dismissal of the application.
(e) The trial court on a consideration of the submissions made on either side, dismissed the application filed by the appellant trust, by its order dated 08.02.2011. Aggrieved over the same, the present appeal is filed by the Trust.
3. Learned counsel for the appellant trust submitted that the order of attachment dated 31.01.1989 passed by the court below is not in accordance with Order 38 Rule (5). On filing application for attachment as per Order 38 Rule (2), the court shall call upon the defendant to furnish security. On failure to comply with the order, then only the attachment could be ordered and if an order of attachment is made without complying the procedure prescribed under Order 38 Rule (2), the order of attachment is not valid or otherwise under Order 38 Rule 6, if the defendant fails to show cause why he should not furnish security or fails to furnish the security required, the court can order an attachment. Above all, the order of attachment has to be communicated to the Registering Officer under Order 38 Rule 11-B; otherwise, the order of attachment is not valid. In the instant case, without following the procedure prescribed under Order 38 Rule 5, the court had directly made the order of attachment on 31.01.1989. Therefore, there is no infirmity could be found in respect of the purchase made by the appellant on 24.04.1991 because on that date, there is no valid order of attachment. That apart, the order of attachment was not communicated to the registering officer by the 1st respondent Transport Corporation, which is in violation of Rule 11-B of Order 38 C.P.C. Under such circumstances, the court below ought to have allowed the application filed by the appellant under Order 21 Rule 58 C.P.C., raising the order of attachment. The learned counsel further submitted that as per section 64 of C.P.C. if the appellant is able to show that the attachment is void, the same is liable to be set aside. In support of his contentions, the learned counsel has relied on decisions reported in N.PAPPAMMAL .vs. L.CHIDAMBARAM (AIR 1984 MADRAS 70) and SRI KRISHNA CHIT FUNDS (SATTUR PVT.LTD.,) .vs. R.S.PILLAI (2000 (II) CTC 524).
4. On behalf of the 1st respondent Transport Corporation, it is stated that the appellant had purchased the property subsequent to the order of attachment and hence the appellant Trust has no locus standi to question the order of attachment. If at all the order of attachment has to be challenged, that could be done only by the 4th respondent, who is the owner of the property. But he has not raised any objection. It has been further submitted that on 24.06.1992, the court had directed the 4th respondent to furnish security and since the same was not not furnished, the attachment order was made absolute on 02.12.1992. Under such circumstances, the submission made by the learned counsel for the appellant cannot be accepted. Further, as per section 64 of C.P.C. any alienation made after attachment, is void. Therefore, no infirmity could be found in the order passed by the court below.
5. Heard the learned counsel on either side and perused the materials available on record.
6. In view of the submissions made by the learned counsel on either side, the question that arises for consideration is, (1) Whether the order of attachment made by the court below on 31.01.1989 in I.A.No.50 of 1989 in O.S.No.80 of 1989 is valid ?
(2) Whether the purchase made by the appellant from the 4th respondent on 24.04.1991 is void ?
7. On a perusal of the materials available on record, I find that the 1st respondent Corporation filed the suit in O.S.80 of 1989, which was subsequently re-numbered as O.S.No.128 of 2002, against the officials and other auction purchasers for recovery of a sum of Rs.28,20,094.28. Pending suit, they filed an application for attachment of immovable properties of some of the defendants including the property of the 4th respondent, who was the 3rd defendant in the suit. On that application, the court below had passed an order of attachment on 31.01.1989, which reads as follows:
"Ad-interim arrangement and notice by 2.3.1989".
Before passing the order, no notice was issued to the defendants in the suit to show cause, why he should not furnish security. Now, it is the submission of the appellant that the order of attachment made on 31.01.1989 is not in accordance with the provisions under Order 38 Rule 5 C.P.C. and hence, it is not a valid attachment. Under such circumstances, no infirmity could be found in the purchase made by the appellant Trust.
8. For better understanding, the relevant provisions are extracted hereunder.
ORDER 38 C.P.C. Arrest and attachment before judgment:
1. Where defendant may be called upon to furnish security for appearance Where at any stage of a suit, other than a suit of the nature referred to in section 16, clauses (a) to (d), the Court is satisfied, by affidavit or otherwise,
(a) that the defendant, with intent to delay the plaintiff, or to avoid any process of the Court or to obstruct or delay the execution of any decree that may be passed against him
(i) has absconded or left the local limits of the jurisdiction of the Court, or
(ii) is about to abscond or leave the local limits of the jurisdiction of the Court his property or any part thereof, or
(b) that the defendant is about to leave India under circumstances affording reasonable probability that the plaintiff will or may thereby be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the Court may issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not furnish security, for his appearance:
Provided that the defendant shall not be arrested if he pays to the officer enstrusted with the execution of the warrant any sum specified in the warrant as sufficient to satisfy the plaintiff's claim; and such sum shall be held in deposit by the Court until the suit is disposed of or until the further order of the Court.
2. Security (1) Where the defendant fails to show such cause the Court shall order him either to deposit in Court money or other property sufficient answer the claim against him, or to furnish security for his appearance at any time when called upon while the suit is pending and until satisfaction of any decree that may be passed against him in the suit, or make such order as it thinks fit in regard to the sum which may have paid by the defendant under the proviso to the last preceding rule.
(2) Every surety for the appearance of a defendant shall bind himself, in default of such appearance, to pay any sum of money which the defendant may be ordered to pay in the suit.
3. Procedure on application by surety to be discharged (1) A surety for the appearance of a defendant may at any time apply to the Court in which he became such surety to be discharged from his obligation.
(2) On such application being made, the Court shall summon the defendant to appear or, if it thinks fit may issue a warrant for his arrest in the first instance.
(3) On the appearance of the defendant in pursuance of the summons or warrant, or on his voluntary surrender, the Court shall direct the surety to be discharged from his obligation, and shall call upon the defendant to find fresh security.
4. Procedure where defendant fails to furnish security or find fresh security Where the defendant fails to comply with any order under rule 2 or rule 3, the Court may commit him to the civil prison until the decision of the suit or, where a decree is passed against the defendant, until the decree has been satisfied:
Provided that no person shall be detained in prison under this rule in any case for a longer period than six months, nor for a longer period than six weeks when the amount or value of the subject-matter of the suit does not exceed fifty rupees:
Provided also that no person shall be detained in prison under this rule after he has complied with such order.
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.]
6. Attachment where cause not shown or security not furnished (1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Court, the Court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached.
(2) Where the defendant shows such cause of furnishes the required security, and the property specified or any portion of it has been attached, the Court shall order the attachment to be withdrawn, or make such other order as it thinks fit".
9. On a reading of the abovesaid provisions, I find that, on filing an application for attachment before judgment, the Court has two options;
(i) to direct the defendant to furnish security under Order 38 Rule (2) C.P.C.;
(ii) to order attachment under Order 38 Rule(6) if he fails to show cause why he should not furnish security or fails to furnish security.
In the instant case, absolutely, the court below has not followed the said procedures; on the other hand, it had directly passed the order of attachment. Therefore, in my opinion, on the date of purchase i.e.on 24.04.1991, there is no valid attachment order since the same was not passed by the court below in accordance with Order 38 Rule (2) or Order 38 Rule (6). Order 38 Rule 5(4) clearly says that if an order of attachment is made without complying with the provisions of sub Rule(1), such attachment shall be void. In this regard, an useful reference could be made from the decision relied on by the learned counsel for the appellant reported in AIR 1984 Madras 70 (supra) and the relevant paragraph is extracted hereunder:
5. .....Thus, the genesis of 0. 38, R. 5 (4), C. P.C., clearly demonstrates that it was a protective measure conceived in the interest of a defendant and intended to invalidate orders of attachment before judgment of his or her properties passed indiscriminately without notice, giving an opportunity to stay off the attachment by the offer of security and without rigidly conforming to the requirements of 0. 38, R.5(1), C. P. C.
6. The essential requirements for invoking the power of court to effect an attachment under 0. 38, R. 5 (1), C.P.C., are that the Court must be satisfied that the defendant is about to dispose of the whole or any part of his or her property, or the defendant is about to remove the whole or any part of his or her property from the local limits of the jurisdiction of the court and the defendant is intending so to do with a view to cause obstruction or delay the execution of any decree that may be passed against him or her. It is incumbent that the plaintiff should state precisely the grounds on which the belief or apprehension is entertained that the defendant is likely to dispose of or remove the property. It may even be necessary in some cases to give the source of information and belief. A mere mechanical repetition of the provisions in the Code or the language therein without any basic strata of truth underlying the allegation or vague and general allegations that the defendant is about to dispose of the property or remove it beyond the jurisdiction of the court totally unsupported by particulars would not be sufficient compliance with the first part of O.38, R.5(1),C.P.C.
7. In this case, no such particulars have been given and the order extracted earlier does not make out that the court bestowed any attention on these aspects and was satisfied that the defendant was, with a view to defeat or cause obstruction or delay the execution of any decree, about to dispose of the whole or any part of her property or even to remove the whole or any part of her property from the local limits of the jurisdiction of the court. Thus, the primordial requirements of O.38, R.5(1), C.P.C., have not been satisfied.
8. In addition, there is also a further serious infirmity in the method and the manner in which the order of attachment had been passed by the court below. It is seen from the notice served on the petitioner that it is neither in conformity with the requirements of the 1atter part of 0. 38, R. 5 (1)C.P.C., nor does it incorporate the contents of the notice in form No. 5 in Appendix F, which sets out as nearly as possible, the requirements under 0. 38, R.5(1)C.P.C. From the notice served on the petitioner in this case, it is seen that the petitioner had not been directed to furnish any security in such sum as may be specified. Nor has the petitioner been directed to produce and place at the disposal of the court, when required, the property or the value of the property specified, or such portion thereof as may sufficient to satisfy the decree. Besides, the petitioner has not been asked to appear and show cause why she should not furnish security. Thus, the notice issued to the petitioner in this case is defective and does not conform to requirements of O. 38, R. 5(1)CPC. No doubt, there has been a specification of the property required to be attached as well as the estimated value thereof and that would only be partial compliance with O.38, R.5(2) CPC. In dealing with the applications for attachment before judgment, it is the first and foremost duty of the court to be satisfied from the particulars made available that the defendant is about to dispose of the whole or any part of his or her property or he or she is about to remove the whole or any part of his or her property from the local limits of the jurisdiction of the court with a view to delay or defeat or obstruct the execution of any decree that may be passed against him or her. Therefore, the court should issue a notice in an appropriate form conforming to the requirements of 0. 38, R. 5 (1), C. P. C., and setting out the details specified thereunder to the defendant, within a time to be fixed by it, either calling upon him or her to furnish security in such sum as may be specified in the order or to produce and place at the disposal of the court the property so specified in the application or the value of the same, or even such portion thereof as may be sufficient to meet the decree, or the notice may merely direct the defendant to appear and show cause why he or she should not furnish 'security for the amount claimed in the suit. No particular form of notice in use for this purpose has been brought to the notice of the court except the one in form No. 5 in Appendix F, which is really addressed to the bailiff by the court. It is, therefore, imperative in view of 0. 38, R. 5 (4), C. P. C., that a notice on the lines of form No. 5 in Appendix F with the necessary changes conforming to the requirements of 0. 38, R. 5(1) CPC., should be prescribed for use. No doubt, the use of the word 'may' in the latter part of 0. 38, R. 5 (1) CPC., may at first blush make it appear that the issue of a notice in compliance with the requirements of 0. 38, R. 5 (1), C. P. C., is discretionary, but at the same time if it is not so done 0. 38, R 5 (4), C. P. C., declares such an attachment effected pursuant to such non-compliance as void. It is, therefore, essential to strictly conform to and comply with the requirements of 0. 38, R. 5 (1). C. P. C., as otherwise, the order of attachment, if made and effected in violation of the requirements, would be of no legal consequence, and worth only as a waste paper. Therefore, it becomes necessary that this matter also should engage the time and attention of the Rules Committee for prescribing an appropriate form of notice especially in view of the amendment - introduced to 0, 38, R. 5, C. P. C., by Act 104 of 1976".
10. A reading of the above judgment would show that if the order of attachment is not passed, as required under Order 38 (5)(1), it has no legal consequences and worth as a waste paper. Before passing an order of attachment, it is the duty of the court to be satisfied itself from the particulars made available that the defendant is about to dispose of the whole or any part of his or her property or he or she is about to remove the whole or any part of his or her property from the local limits of the jurisdiction of the court with a view to delay or defeat or obstruct the execution of any decree that may be passed against him or her. In the instant case, without following the conditions stipulated under Order 38, the order of attachment has been passed. Hence, in my considered opinion, it is not a valid attachment under Order 38 Rule 5 and the appellant is a bona fide purchaser of the property of the 4th respondent.
11. It is pertinent to state that on 31.01.1989, there was an order of attachment. On 24.06.1992, there was an order to furnish security, which was passed subsequent to the purchase made by the appellant. Therefore, the order dated 24.06.1992 has no significance in this case. Further, Rule 38 Rule(11) says that the order of attachment has to be communicated to the registering officer. But, in the instant case, it has not been done so, which is evident from the encumbrance certificate produced by the appellant pertaining to the years from 1.1.1987 to 11.11.2009. I find that the order of attachment was communicated only in the year 2003 i.e.after 12 years from the date of purchase by the appellant. Rule 11-B of Order 38 is extracted hereunder:
"11-B. Order of attachment to be communicated to the Registering Officer: Any order of attachment passed under Rule 5 or 6 of this Order raising the attachment passed under Rule 9 of this order shall be communicated to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in such order, is situate".
12. It is clear from the said provision that the communication of the order of attachment to the registering office is mandatory. If the mandatory provision has not been followed, then the order of attachment cannot be sustained. In this regard, a reference could be placed in the judgment relied on by the learned counsel for the appellant reported in 2000 (II) CTC 524 (supra), wherein it has been held as follows:
"7. ..... When an order of attachment of immovable property is made before judgment, certain procedures have to be complied with as per sub-rule (2), Order 21, Rule 54. The order of attachment has to be proclaimed at some place on or adjacent to such property by beat of drum and a copy of the order shall be affixed on a conspicuous part of the property and then upon a conspicuous part of the court-house, and also, where the property is land paying revenue to the Government, in the office of the Collector of the district in which the land is situate and, where the property is land situate in a village, also in the office of the Gram Panchayat, if any having jurisdiction over that village. Though an order has been made for attaching the property in question before judgment even on 14.3.97, no one has appeared and explained before the Sub Court regarding compliance of sub-rule 2 referred to above. As a matter of fact the claimant namely appellant herein alone was examined as P.W.1 and no one was examined on the side of the respondents. As per amendment to Order 21, Rule 58 made by this Court (Amendment dated 29.6.1987), the order of attachment passed under Rule 54 raising the attachment by removal, determination or release passed under Rules 55, 57 or 58 shall be communicated to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the immovable property under attachment comprised is situate. Similar provision is brought in on the same term in Order 38, Rule 11-B. The reading of the Madras High Court Amendment in Order 21, Rule 54 would show that the attachment order has to be proclaimed at some place on or adjacent to such property by beat of drum and a copy of the order shall be affixed on a conspicuous part of the property and on a conspicuous part of the Court-house. If the property is land paying revenue to the Government, a copy of the order shall be affixed in the office of the Revenue Divisional Officer of the area where the land is situated. Where the property is situated within the limits of a Municipality, the order shall be affixed in the office of the Municipality within the limits of which the property is situated. Likewise, High Court amendment namely Rule 58-A authorises the Court that any order of attachment passed under Rule 54 raising the attachment by removal, determination or release passed under Rules 55, 57 or 58 of this Order, shall be communicated to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in such order is situate".
13. The principles enunciated in the said decision would show that communicating the order of attachment to the concerned registering officer is mandatory under Order 38 Rule 11-B and in the absence of communication, the order of attachment has no force. Under these circumstances, I am of the opinion that since the order of attachment itself is void, the submission made by the learned counsel for the 1st respondent, relying upon section 64 cannot be countenanced.
14. With regard to the another submission made by the learned counsel for the 1st respondent that the appellant is not a competent person to question the order of attachment that was made on 31.01.1989, in my considered opinion, since the appellant trust had purchased the property from the 4th respondent on 24.04.1991, on which date there is no valid order of attachment, the appellant has to be construed as a bona fide purchaser and on the date of filing application under Order 21 Rule 58, the trust is the owner of the property and, therefore, the appellant trust cannot be said that it is not a competent person to question the order of attachment and hence the order passed by the court below is liable to be set aside.
Under these circumstances, I hold that the appellant trust is a bona fide purchaser of the property from the 4th respondent since the mandatory provisions, namely, Order 38 Rule (4) and Rule(6) C.P.C. were not complied with by the court below and the order was not communicated to the Registering Officer, as required under Rule 11-B C.P.C. Hence, the impugned order passed by the court below is set aside. E.A.No.12 of 2010 in E.P.No.17 of 2009 in O.S.No.128 of 2002 on the file of Additional District Judge, Fast Track Court No.III, Coimbatore, filed by the appellant trust is ordered as prayed for and the civil miscellaneous appeal is allowed; however, the first respondent is at liberty to take action against the 4th respondent for recovery of the amount by attaching the other properties owned by the 4th respondent. No costs.
gl To The Additional District Judge, Fast Track Court No.III, Coimbatore