Karnataka High Court
Sri. M.R. Lakshmanappa S/O Ramaiah vs Sri Ramachandra Bhat S/O Shankar Bhat on 11 January, 2008
Equivalent citations: ILR2008KAR1157, AIR 2008 (NOC) 1242 (KAR.) = 2008 (2) AIR KAR R 266, 2008 (2) AIR KANT HCR 266, 2008 A I H C 1678, (2008) 4 KANT LJ 254, (2008) 3 ICC 578, (2008) 65 ALLINDCAS 463 (KAR)
Author: A.N. Venugopala Gowda
Bench: A.N. Venugopala Gowda
ORDER A.N. Venugopala Gowda, J.
1. Petitioner is 1st defendant in O.S. No. 2675/04, on the file of the 24th Additional City Civil Judge, Bangalore City, filed by the respondent, for cancellation of the sale deed dated 05.06.2003 and for specific performance of the agreement of sale dated 15.04.2001 or in the alternative for a decree to refund the money paid under the agreement, along with interest at 24% per annum, from the date of filing the suit till the date of realisation.
2. Respondent/plaintiff had filed IA 2, under Order 39 Rule 1 and 2 read with Section 151 CPC, praying for an order of temporary injunction, restraining the 2nd defendant in the suit, from putting up any further construction on the suit schedule property. IA 3 was filed by him, under Order 38 Rule 5 read with Section 151 CPC, praying for an order of attachment before judgment, on the property described in the schedule of the application. The trial Court, by its ad-interim order dated 17.04.2004 had allowed, both the applications. Petitioner has filed objections to the said applications and also the written statement to the suit. He has also filed IA 3, under Order 39 Rule 4 read with Section 151 CPC, to vacate the ad interim order of temporary injunction. The trial Court by its order dated 19.03.2005 has rejected the said application for vacating the injunction and has allowed IA 2 and 3 as prayed for.
3. M.F.A. 6494/05 was filed by the 2nd defendant in the suit, questioning the order, allowing IA 2, passed by the trial Court. The said appeal was allowed by this Court on 15.04.2006 and the matter was remitted back to the trial Court, for reconsideration of IA 2. Thereafter, the trial Court by its order dated 03.06.2006 has dismissed IA 2, which having been questioned in this Court in MFA 6827/2006, was upheld, by judgment dated 27.10.2006.
4. The order dated 19.03.2005 passed by the trial Court, allowing IA 3, filed under Order 38 Rule 5 CPC, has been questioned in this will petition. Petitioner has. filed an affidavit dated 12.12.2007 in this writ petition, undertaking to furnish bank guarantee for a sum of Rs. 5 lakhs, in respect of the claim made by the respondent/plaintiff.
5. Learned Counsel for the petitioner contended that, the impugned order is perverse and has passed in excess of the jurisdiction, contrary to the mandatory requirements under the provisions of Order 38 Rule 5 CPC. It is contended that, on any view, the impugned order is unsustainable, either on facts or in law.
6. Per contra, Smt. M.D. Anuradha Urs, learned Counsel appealing for the respondent, inviting my attention to the order dated 3.6.2006 passed on IA 2 by the trial Court, wherein it has been held that the plaintiff has made out prima facie case, submitted that, the impugned order is sustainable. Learned Counsel sought to justify the impugned order.
7. Having heard the learned Counsel on both sides, and having examined the record and the impugned order, the point that arises for my consideration is:
Whether the impugned order is perverse, passed with material irregularity and contrary to the provisions of Order 38 Rule 5 CPC?
The object of Order 38 Rule 5 CPC, for attachment before judgment, is to prevent the defendant in the suit from defeating realisation of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose or remove from the jurisdiction of the court, his property. The said provision makes it clear that before exercising the power, the court should be satisfied that there is reasonable chance of, a decree being passed in the suit against the defendant. That means, the court should be satisfied that the plaintiff has a prima facie case. It is only after recording that, there is prima facie case, the court has to examine whether the interest of the plaintiff should be protected by exercising the power under Rule 5 of Order 38 CPC. It is settled position of law, that merely having a prima facie case will not entitle the plaintiff to an order of attachment before judgment, unless he also establishes that, the defendant is attempting to remove or dispose of his assets, with an intention to defeat the decree that may be passed against him. In the affidavit in support of IA 3, the plaintiff has not stated that, the 1st defendant with ulterior motives is attempting to alienate or remove the property from the jurisdiction of the Court. Affidavit of any third party, to the effect that, the 1st defendant has attempted to remove or dispose of his assets, with an ulterior motive, to avoid the decree that may be passed in the suit, has been filed. No material has been produced to arrive at a prima facie finding to the effect that the defendant is making efforts to defeat the decree that may be passed in the suit, either by attempting to alienate the property or remove from the jurisdiction of the Court, the properly, has been produced. The trial Court has also not recorded either in its order dated 17.04.2004 or while passing the impugned order, that the 1st defendant is likely to dispose of the property shown in the schedule of the application, with the intention of defeating the decree that may be passed in the suit. The mandatory requirements of the provision has not been met. Thus there is illegality committed by the trial Court.
8. The jurisdiction under Order 38 Rule 5 of CPC is an extra ordinary jurisdiction. The power conferred on the court under the said provision is a drastic and extraordinary power, which should not be exercised mechanically or merely for the asking, in the law laid down by the Hon'ble Supreme Court in the case of Raman Tech. and Process Engineering Co. and Anr. v. Solanki Traders reported in 2007(13) Scale page No. 419 wherein it has been held as follows:
5. The power under Order 38 Rule 5 CPC is a drastic and extraordinary power. Such power should not he exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilize the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs, by obtaining orders of attachment before judgment and forcing the defendants for out of court settlements, under threat of attachment
6. A defendant is not debarred from dealing with his property merely because a suit is filed or about to be filed against him. Shifting of business from one premises to another premises or removal of machinery to another premises by itself is not a ground for granting attachment before judgment A plaintiff should show, prima facie, that his claim is bonafide and valid and also satisfy the court that the defendant is about to remove or dispose of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him, before power is exercised under Order 38 Rule 5 CPC. Courts should also keep in view the principles relating to grant of attachment before judgment (See-Prem Raj Mundra v. Md. Maneck Gazi , for a clear summary of the principles.).
9. In the light of the said pronouncement of the Hon'ble Supreme Court, if the impugned order is examined, it is crystal clear that the respondent has not made out any ground in IA 3, for exercising of the jurisdiction under Rule 5 of Order 38 CPC by the trial Court to grant an order of attachment before judgment. That an order under the said provision can be issued, if the circumstances are made out, as stated in the provision itself and the circumstances have to be made out and proved to the satisfaction of the court. In the instant case, on perusal of the affidavit in support of IA 3, it has to be held that, the respondent/plaintiff, has not made out any case, for the trial Court to exercise its power/jurisdiction under Rule 5 of Order 38 CPC. The trial Court has acted arbitrarily, illegally and with material irregularity, in passing the impugned order. The trial Court has thus exceeded in its jurisdiction, in passing the impugned order, when circumstances do not exist, for exercise of the extra ordinary power of ordering attachment before judgment. Thus, the impugned order is perverse and in unsustainable.
10. However, the petitioner/1st defendant, has come forward by filing an affidavit that he is ready to furnish bank guarantee to the extent of Rs. 5 lakhs during the pendency of the suit. Petitioner shall furnish the bank guarantee as under taken by him, in his affidavit dated 12.12.2007, filed in this Court, to the trial Court within a period of two weeks from today.
11. In the result, writ petition is allowed. The impugned order dated 19.03.2005 passed on IA 3 in O.S. No. 2675/2004 is set aside. IA 3 filed in the trial Court stands dismissed.
12. While passing the judgment dated 27.10.2006 in MFA 6827/2006, this Court had directed the trial Court to dispose of the suit within a period of one year from the date of receipt of the said judgment. The suit is still pending. Hence, the trial Court is directed to dispose of the suit before 31.7.2008.
Parties to bear their respective costs.