Madras High Court
Shri. R.S. Pillai vs Smt. M.L. Peratchi @ Selvi And 10 Others on 24 July, 2000
Equivalent citations: AIR2000MAD483, 2000(4)CTC543, AIR 2000 MADRAS 483, (2000) 3 MAD LJ 61, (2000) 3 MAD LW 11, (2000) 2 BANKCAS 507, (2001) 1 CURCC 260
ORDER Judgement Pronounced by A.S. Venkatachala Moorthy, J.
1. The above Civil Miscellaneous Appeal has been filed by the applicant in I.A.No.770 of 1999 in O.S.No.108 of 1999, on the file of the Subordinate Judge, Tuticorin against the order dated 19.1.2000, dismissing the application filed under Order 38, Rule 5 of the Civil Procedure Code.
2. The appellant filed a suit in O.S.No.108 of 1999, on the file of the Subordinate Court, Tuticorin against the respondents herein praying the Court
(i) to pass a preliminary decree directing the respondents to pay a sum of Rs.12,62,066 With subsequent interest from the date of the plaint on Rs.4,00,000 at the rate of 18 per cent per annum and subsequent interest on the second and third loans at 24 per cent per annum till payment is made, failing which to pass a final decree for sale of the property shown in the schedule to the plaint and to pay the decree amount out of the sale proceeds and if the same is not sufficient to pay the decree amount;
(ii) to pass a personal decree against the estate of late M. Lakshmana Pillai in the hands of the respondents/defendants and for other reliefs.
3. Pending suit, the appellant filed I.A.No.770 of 1999 under Order 38, Rule 5 read with Section 151 of Code of Civil Procedure praying the Subordinate Court for a direction, directing the respondents to furnish security for a sum of Rs.12,62,066 before a date to be fixed and failing which to attach before Judgment the immovable property shown in the schedule to the petition and to order interim attachment till the security is furnished.
4. In the affidavit filed in support of the said application the appellant has averred that the husband of the first respondent and father of the other respondents executed two promissory notes of Rs.4,00,000 on 1.12.1995 and Rs.3,00,000 on 4.11.1996 and again on an agreement borrowed a sum of Rs.1,00,000 on 27.12.1997 for his business purpose. On the very same day of the first borrowal viz., on 1.12.1995 as a collateral security for the said sum due on the promissory note, he deposited his tide deeds relating to the properties shown in the schedule with the appellant with an intention of creating an equitable mortgage for the sum due. Following this on 2.12.1995 the said deceased Lakshmana Pilliai executed a memorandum confirming the deposit of title deeds with the appellant with the intention of creating a mortgage for the amount due. Even for the second loan borrowed on 4.11.1996 the said Lakshmana Pilliai extended the equitable mortgage, already created over the schedule mentioned property on 1.12.1995. On 5.11.1996 he executed a memorandum confirming such extention of the mortgage already created to cover the second also. The third loan viz., Rs.1,00,000 was borrowed on 27.12.1997 and he executed an agreement in that regard, which is dated 28.12.1997., On 5.3.1998 the said Lakshmana Pillai died. On 23.3.1998, the respondents gave a letter, acknowledging the debts. It is the case of the appellant as set out in the affidavit that the said Lakshmana Pillai was a respectable and reliable person and that though the value of the property mortgaged was low, on the trust and confidence on the person, the appellant advanced the money over and above the value of the property. It is further stated in the affidavit that even after giving the acknowledgment letter, wherein they agreed to repay the amount shortly, they failed to do so and this made the appellant to send a notice, dated 5.4.1999 for which the respondents replied with false and untenable allegations even denying the third loan of Rs.1,00,000. The respondents after sending the reply approached the appellant through mediators and requested the appellant to grant three months time to repay the loan and to waive a portion of the interest and further promised to pay a sum of Rs.2,00,000 before 25.4.1999. It is the specific case of the appellant that inspite of paying the said money the respondents are making hasty arrangements to sell the other properties that stand in the name of Lakshmana Pilial fraudulently with an intention to defeat the appellant's claim and to secrete the amount beyond his reach.
5. The respondents herein resisted the said application inter alia contending that the Account Books of Lakshmana Pilial would not show that he received payments by cheques on 1.12.1995 and on 4.11.1996 a sum of Rs. 4,00,000 and Rs.3,00,000 respectively, but however, said Lakshmana Pilial was making payment of a sum of Rs.21,000 every month till January, 1998. Thereafter, as agreed, Lakshmana Pilial was paying a sum of Rs.7,000 every month till February, 1999. According to the respondents, the appellant was receiving a sum of Rs.21,000 by way of interest every month from Lakshmana Pillai. The defence as put forth by the respondents is that the said Lakshmana Pillai never mortgaged the properties and that the documents filed and relied on by the appellant in that regard are in fact really forged. According to the respondents, the appellant was attending to the various proceedings in Court and at that time for and on behalf of late Lakshmanna Pillai and that certain signatures obtained in the papers for the purpose of using the Court proceedings have been utilised for creating the documents. According to the respondents, Lakshmana Pillai never borrowed Rs.1,00,000 on 27.12.1997. The respondents also raised a plea in the counter affidavit that the suit claim was only for Rs.12,62,066, whereas the value of the property is Rs.18,60,000 and that therefore the property is more than sufficient for the payment to realise the amounts due to him even assuming that such a claim is true. There is yet another submission in the counter affidavit to the effect that Lakshmana Pillai suddenly passed away and when all the respondents were in deep sorrow the appellant obtained the document on 23.3.1998 virtually by cheating. In the affidavit the respondents have given assurance that they will not sell the schedule mentioned property and in fact there is no necessity for them"to do so. Ofcourse there is yet another objection by the respondents that the appeal is not maintainable.
6. Learned Subordinate Judge, Tuticorin who enquired into the said application came to the conclusion that the appellant has not proved that the respondents are taking steps to create encumbrance over the schedule mentioned property and that an order of attachment can be, made only on the basis of clear and convincing proof. The action of the appellant resorting to this method cannot be entertained because it is a lever for him to coerce the defendants to come on terms.
7. The following three questions arise for consideration in this appeal:
"(1) Whether the Civil Miscellaneous Appeal is maintainable against the order dated 19.1.2000?
(2) If the answer is no, whether this Court can covert the Civil Miscellaneous Appeal into a Civil Revision Petition and proceed to hear the matter further? And (3) Whether the appellant is entitled for any relief?
"Whether the C.M.A. is maintainable?"
Order 38, Rule 5 to 13 of Code of Civil Procedure deals with attachment before Judgment. In this Appeal, we are only concerned with two Rules viz., Rules 5 and 6 of Order 38 of Code of Civil Procedure. It is necessary to quote these Rules:
"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 execu-tion 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 or 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."
8. The next relevant provision to be referred is Order 43 (1) (q) which deals with appeal from orders. According to the said provision, an appeal shall lie from an order under Rule 2, Rule 3 or Rule 6 of Order 38, C.P.C.
9. Before we refer to a few rulings, it has to be pointed out that in the present case an application was filed under Order 38, Rule 5, C.P.C. with a prayer to direct the respondents/defendants to furnish security, failing which to order attachment before Judgment the immovable property mentioned in the schedule to the petition and to order interim attachment till the security is furnished or till the disposal of the petition. No interim order was granted by way of interim attachment and the Court after accepting the cause dismissed the said application.
10. There is a direct ruling on this point by a learned single Judge of this Court in the case reported in T.B.Seetharama Chettiar v. Sellathammal, 1928 MWN 125. In that case what happened was the plaintiff filed an application before the lower Court for an attachment and notice was issued to the other party to show cause and after an enquiry the Court did not deem fit to make any order for security or attachment. The lower Court simply closed the said application noting that the defendant should not alienate certain immovable properties belonging to her. The Court considered the question as to whether the order would come under Order Rule 5 or Rule 6 of Order 38 of Code of Civil Procedure. During the course of the judgment, the Court observed thus:
"Curiously enough there is a comma after the word security and there is also a comma after the expression "to be withdrawn". That would seem clearly to indicate that the provision is that if the defendant shows such cause and there has already been attachment, the attachment shall be withdrawn. But in cases where there has been no attachment if the defendant should show good cause the Court may make such order as it thinks fit. If that is not the proper construction, it would follow that the legislature after having provided the issue of a notice to the defendant to appear and show cause under R. 5 has not at all made any provision for the manner in which it is to be dealt with if the defendant should afterwards appear and show good cause."
In the latter part of the said Judgment, the Court further observed that ".....it is clearly not merely an order of attachment that can be made under Rule 6 but any other order that the Court thinks fit and nevertheless it will still be an order only under Rule 6 and therefore be appealable under the Rules relating to appeals from orders.
......... ......... .........
I am therefore satisfied that any order that is made by the Court on an Application of the plaintiff after return of the notice of the defendant to appear and show cause why he should not furnish security is an order under Rule 6 and therefore appealable."
11. It may be mentioned here that both before and after the above ruling of this Court, a number of other High Courts have been taking an entirely different view to the effect that in cases similar to the one under consideration in this appeal, the appeal is not maintainable.
12. Let us refer to a few rulings of various High Courts. The first ruling that may be referred is one reported in Mahendra Narain Saha v. Gurudas Bairagi, AIR 1916 Cal. 287. In that case the suit was instituted on 24.3.1915 and on 3.5.1915 the plaintiff made an application for attachment before judgment under Rule 5 of Order 38 of Code of Civil Procedure. Thereupon the Court directed the issue of notice upon the defendants to show cause why an attachment should not issue before Judgment and at the same time directed the defendants not to part with the properties in any way, but that was not in strict accordance with the provisions of the Code. Thereafter, the defendants did appear and show cause on 29.5.1915 and subsequently on 21.6.1915, both parties were heard and the Court came to the conclusion that sufficient cause had not been made out for attachment, and dismissed the application. The question that arose for consideration in the said case was as to whether an appeal would lie against the orders. In those circumstances, the Court came to the conclusion that to say that the order of the Court would come in the way of Rule 6(2) of Order 38 of the Code of Civil Procedure, there should have been a conditional attachment and the direction of the Court upon the defendants not to part with the properties, would not make the order to come within the purview of Rule 6(2) of Order 38 of Code of Civil Procedure. In that context the Court ruled thus:
"It is plain that the attachment which the Court is thus directed to withdraw, is a conditional attachment made in terms of clause 3 of Rule 5. No such order of withdrawal was made in this case and none, indeed, could have been made, as no attachment had been ordered. The position, in substance, is that an application for attachment before Judgment has been made under Rule 5; the Court has heard the defendants and has dismissed the application. The parties never reached the stage contemplated by Rule 6; consequently no appeal lies under Order 43, Rule 1, clause (q), Civil Procedure Code."
13. A Division Bench of Allahabad High Court also took a similar view viz., that no appeal lies under Order 43, Rule 1, clause (q) of Code of Civil Procedure, where the application under Order 38 of Rule 5 was dismissed on the defendant showing cause and where there was no prior conditional attachment. In Om Prakash v. Md. Ishaq, AIR 1933 All. 557 the Court ruled thus:
"Rule 6(2) would have been applicable but for circumstance that no conditional attachment of the whole or any portion of the property was ordered. It seems to us that sub-rule (2) was not intended to cover cases in which the defendant successfully showed cause against, the Application, praying for attachment before Judgment and in which no conditional attachment under Rule 5(3) had been made. Broadly speaking. Rule 6 contemplates cases in which attachment has been either ordered or, if previously made, it has been withdrawn. In this view, no appeal lies under Order 43 (1) (q), Civil Procedure Code where no conditional attachment has been made under Order 38, Rule 5 (3) and the Application for attachment before, judgment ended in dismissal on the defendant showing cause against it."
14. The next Division Bench decision that can be usefully referred is one reported in Kedarnath Himatsinghka v. Tejpal Marwari, AIR 1935 Pat. 219. In the course of the said ruling, the Court observed thus:
"The appeal, if competent, must come within cl, (2) of Rule 6, Order 38 which provides that where the defendant shows cause or 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 It is pointed out by the learned Advocate for the respondents that in this case, there was no conditional order of attachment under Rule 5 (3), Order 38. He contends therefore that the order eventually passed rejecting the application for attachment before judgment was not such an order as is made appealable by Order 43, Rule 1 (q).
Eventually the application for attachment was rejected and it was held that no appeal lay against the order of dismissal inasmuch as there had been no conditional attachment under Clause 3, Rule 5 of C.P.C. These two decisions in Om Prakash v. Md. Ishaq, 1933 All 557 (1) and Mahendra Narain Saha v. Gurudas Bairagi, 1916 Cal. 287 (3) therefore support the preliminary objection.. The appeal must therefore be held to be incompetent."
15. In Rebello v. Firm Ladhasingh Bedi & Sons, AIR 1944 Nag. 30, a Division Bench of Bombay High Court answered the questions namely whether when the Court issued notice to the opposite party to show cause under Order 38, Rule 5 of C.P.C. but not made any order of conditional attachment and after hearing the patties the Court comes to the conclusion that no action is necessary and dismissed the application, and whether any appeal would lie under Order 43 Rule 1(q) of Code of Civil Procedure on the basis that the said order is one under Order 38, Rule 6(2), C.P.C. in the negative.
In that context the Division Bench of the Bombay High Court ruled thus:
"From the wording of this sub-rule it clearly appears that no order of attachment should be withdrawn and no such other order as the Court thinks fit can be made under this sub rule, unless the property has already been attached."
16. In Hara Gobinda Das v. Bhur and Co., ILR 1955 (I) Cal. 478 a Division Bench of the Calcutta High Court considered the scope of Rule 6(2) of Order 38, C.P..C. To quote the exact words:
"Sub-Rule (2), however, which deals with cases where the application is dismissed, does not cover all such cases, but only those cases where a conditional order of attachment has been made under O.38, R. 5, of the Code. This appears plain from the words used in O.38, R. 6(2), where the relevant words are "and the property specified "or any portion of it has been attached". That shows that only where a conditional order of attachment has been passed under O.38, R. 5 of the Code, but eventually the application is dismissed, the final order dismissing the application can be brought under O. 38, R. 6(2). It is also quite obvious that, in such a case, O.38, R. 6(1), can have no application. An order, therefore, dismissing any application under O.38, R. 5, where there was no conditional order of attachment under that rule, cannot be said to be an order, passed under O.38, R. 6, and, accordingly, it is not appealable under the relevant part of O. 43, R. 1(g)."
17. In Union Bank of India v. M/s Andhra Technocrat Industries, , on the issue in question, a Division Bench of Andhra Pradesh ruled thus:
"In this case there was no interim order of attachment passed under sub Rule (3) of R. 5. Only an order was passed by the Court under sub rule (1) of R. 5 directing issue of notice to the defendant to show cause why he should not furnish security, and on the defendant appearing and showing cause in answer to the notice to the Court, dismissed the application. There was no interim attachment passed under sub-rule (3) of R. 5. Therefore, the order passed by the Court below does not fall within sub rule (2) of R. 6. Therefore, the order passed by the Subordinate Judge is not appealable.
18. The next ruling is reported in R.S.Cambray and Co., (P) Ltd., v. Bishnu Banerjee, , wherein a Division Bench of the Calcutta High Court after referring to the various rulings has explained as to why the remedy to file an appeal is not available in case in question :
"Attachment before judgment is a harsh remedy and since attachment of a defendant's property before his liability has been established at the trial may seriously embarrass and prejudice the defendant, a Court ought not to grant it unless it cannot but. It was, therefore, thought that after such an order is passed by the trial Court, the defendant ought to have the right to assail that order, on facts as well as law, in a regular appeal before an appellate Court. But once the trial Court on a consideration of the show cause made by the defendant and other materials on record has declined a pre-trial attachment on finding no case therefor, the defendant ought not to be made liable to face a reconsideration and reassessment of the entire matter, on facts as well as law, by a Court of appeal during the trial of the suit and should be allowed to conduct his defence freely without any financial embarrassment or proprietary handicap. Where however, the trial Court, even though it has finally refused attachment after show cause by the defendant under rule 6 (2), nevertheless initially directed an ad interim conditional attachment, on the materials then on record, it was thought that in such a case, the plaintiff having once made out a case to the satisfaction of the trial Court for conditional attachment, should be allowed one further opportunity to agitate the matter before the Appellate Court."
19. Order 38, C.P.C. deals with both arrest as well as attachment before judgment. Rules 5 to 13 of Order 38, C.P.C. deal with attachment.
20. Rule 5 is to the effect that the Court can at any stage of the suit, if satisfied that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him is about to dispose of the whole or any part of his property; or 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 pass an order calling upon the defendant to furnish security for the sum indicated or to cause why the defendant should not furnish security. The Court may also in the order direct the conditional attachment of the whole or any portion of the property specified;
21. Order 38, Rule 6(1), C.P.C. is to the effect that where the defendant fails to show cause as called upon or furnish the required security, the Court may order attachment sufficient to satisfy any decree which may be passed.
22. In this case, we are concerned only with the scope of Rule 6(2). Or in other words what type of orders that are contemplated to be passed under Rule 6(2).
23. Before we take up such an exercise, the settled legal position in interpreting the statutes has to be borne in mind. It is settled law that the statute must be read as a whole and this principle equally applies to different parts of the same Section The Balasinor Nagrik Co-op. Bank Ltd., v. Babubhai, .
No provision in the statute and no word in the Section may be construed in isolation Syed Hasan Rasul Numa v. Union of India, .
Where the language of the provision is plain, clear and unambiguous, only the plain meaning of the provision is. to be adopted so as to avoid any hardship or absurdity resulting therefrom R.S.Raghunath v. State of Karnataka, and Mohammed All Khan v. W.T. Coinmr., AIR 1997 SC 1165
24. Rule 6(2) has to be divided into two parts the first being "Where the defendant shows such cause or furnishes security required, and the property specified or any portion of it has been attached the Court shall order attachment to be withdrawn."
Rule 5 is to the effect that the defendant may be asked to show cause why he should not furnish the security. The word 'such' occurring in Rule 6(2) refers to that and it Should be understood that the defendant showed such cause or in other words the defendant showed sufficient cause.
Again this part of the Rule deals only with cases where there has already been an attachment and it is evident by the presence of the word 'and'.
25. The second part of the Rule reads:
"or make such other order as it thinks fit".
This part of the Rule cannot be read in isolation and it must be read with or taken as only referable to, the first part of the Rule. The conclusion is on the basis of the following two reasonings:
The word other occurring in the second part of the Rule would only mean an order that may be passed after withdrawing the attachment as contemplated in the first part of the Section. For instance, the Court after hearing the defendant may come to the conclusion that the order of attachment is not necessary and that the plaintiff has made out a prima facie case only in respect of a portion of the claim, and in such an event, the Court may direct the defendant to furnish security after withdrawing the attachment.
The second reasoning is that if really the legislature intended the Rule 6(2) to deal with cases including the cases, where there was no prior attachment then that would have been made clear either by enacting a separate sub clause say for instance as Rule 6(3) or by making it sufficiently clear in Rule 6(2) itself. In this context, yet another aspect to be noted is that the entire Rule 6(2)is in one single sentence.
26. Learned single Judge way back in 1928 T.B.Seetharama Chettiar v. Sellathammal, 1928 MWN 125 took that view because of the presence of two commas viz., one after the word 'security' and another after the word 'attached' and further that otherwise the Act is silent as to how the application like the one under consideration is to be dealt with, and hence the second part of the Rule 6(2) to be understood to cover orders passed in all types of cases. Though the learned single Judge of this Court pointed out the presence of two commas he had not endeavoured to discuss and elaborate on that point and as to how it would change the meaning of the provision or as to how it would include the cases, where there was no prior attachment. When the provision itself is clear, the commas that may occur in the Section has to be ignored.
26A. We are also in entire agreement with the ruling of the Calcutta High Court in R.S.Cambray and Co., (P) Ltd., v. Bishnu Banerjee, which has given the reasons for giving such an interpretation.
27. In this regard we are inclined to refer to a few rulings on this aspect. The first one is in Aswini Kumar v. Arabinda Bose, , where the Supreme Court had an occasion to consider and observe thus:
"When a statute is carefully punctuated and there is doubt about its meaning, a weight should undoubtedly be given to the punctuation, vide Crawford on Statutory Constructions page 343. I need not deny that punctuation may have its uses in some cases, but it cannot certainly be regarded as controlling element and cannot be allowed to control the plain meaning of a text,"
28. In M.G.Kollankulam v. Commissioner of Income Tax, 1977 K.L.T. 990., a Division Bench of the Kerala High Court ruled thus:
"While marks of punctuation contained in a statute will not generally be wholly ignored by the Court in interpreting a statutory provision, it may not always be safe to rely on punctuation as a deciding factor is a question of construction. Greater importance will be attached by the Court to the language employed by the legislature and if it is found that the words used in the Section, when read as a whole , clearly furnish a clue to the legislative intent underlying the section and they admit of an interpretation consistent with the said legislative intent , any punctuation mark which is inconsistent with such construction will be disregarded and the punctuation will not be allowed to control the plain meaning of the text. As observed by the Supreme Court in A.K.Gopalan v. State of Madras, if the Act as originally punctuated does not reflect the true legislative purpose, the punctuation may be disregarded, transposed or the Act may be repunctuated by the Court. We are clearly of the view that the aforementioned comma occurring in the proviso is a misplaced punctuation mark which if heeded will defeat the intention of Parliament and hence it is to be disregarded while construing the proviso."
29. Yet another case is one reported in Dadaji v. Sukhdeobabu, , wherein the Apex Court observed this:
"It is well known that punctuation marks by themselves do not control the meaning of a statute when its meaning is otherwise obvious. Hence, we do not feel that we should deal with it in greater detail having regard to the nature of this case..."
30. Coming to the present case, after careful consideration of the entire material, we are of the view that the presence of the punctuation marks do not really give different meaning to the provision. The provision is clear and can be well understood without such punctuation marks. Merely because the Code is silent as to how the case like the present one to be dealt with, cannot enlarge the scope of Rule 6(2) or give a different meaning.
31. In this view of the matter, we are of the view that with reference to the present case only a revision will lie and not an appeal.
"Whether this appeal can be treated as a revision petition?"
32. Learned counsel appearing for the appellant submitted that in fact earlier, as against the impugned order, he filed a revision and when the matter came up before the learned single Judge, it was pointed out that there was a right of appeal and only thereafter he withdrew the civil revision petition to file the present Appeal.
We are fully satisfied that in the interest of justice this is a fit case where we have to deal with the matter treating it as a revision.
"Whether the appellant is entitled for any relief?"
33. Coming to the facts and circumstances of the present case as set out earlier the respondents are the wife and children of late Lakshmanna Pillai. The respondents are not practically disputing the fact that the late Lakshmanna Pillai borrowed a sum of Rs.4 lakhs on 1.12.1996 and again another sum of Rs. 3 lakhs on 4.11.1997 and that he also deposited some title deeds with an intention to create an equitable mortgage.(Refer para 7 of the Lower Court's Order). The only contention that is put forth by the respondent is that the properties which are the subject matter of this mortgage are sufficient to meet the demand. It is also their further case that late Lakshmanna Pillai did not borrow the sum of Rs.1 lakh on 27.12.1997.
34. The apprehension of the appellant is that the mortgaged properties are not at all sufficient to meet the demand viz., the sum due Rs.12,62,066 on the date of the filing of the suit. It is the further case of the appellant that on 20.7.1998 the respondents sold the properties which they have acquired from late Lakshmanna Pillai and again mortgaged the properties (schedule to the application) on 26.8.1999 i.e. about eight days after the filing of the present suit. They also contend that the respondents are taking hasty arrangements to sell the other properties that stood in the name of Lakshmanna Pillai fraudulently with the intention of defrauding the claim of the appellant and to secrete the amount beyond the reach of the appellant. It is further contended that though the respondents have very valuable properties in their respective names purchased by late Lakshmanna Pillai, while he was alive out of his earnings, the respondents on the ill advice of others around them are trying to sell the property standing in the name of late Lakshmanna Pillai shown in the schedule to the petition.
35. The said petition is resisted by the respondents contending that the value of the property mortgaged is Rs.18,60,000 and therefore it is more than sufficient for the appellant to realise the amount due, if any. With regard to the other defence set out by them, we have already extracted in the earlier part of this Judgment.
36. The following aspects in this case have to be noted: (1) the respondents admit the borrowal by Lakshmanna Pillai to the extent of Rs.7 lakhs and also the mortgage of the properties and (2) in the affidavit filed also the appellant has clearly stated that as Lakshmanna Pillai was reliable and respectable person in society and that though the value of the property was low, on the trust and confidence on the person, the appellant lent the money over and above the value of the property, (3) though the respondents admit the execution of the document, dated 23.3.1998, assuring repayment of the entire amount due, they went back from their stand in the counter affidavit, contending that they were virtually cheated by the appellant and obtained the said document. (4) it is not stated as to when exactly they realised that they have been cheated. The time gap has to be noted, in the sense that, the document was executed on 23.3.1998 but only on 9.4.1999 for the first time in the reply notice sent after a period of one year such a stand has been taken. Neither in the reply notice nor in the counter affidavit the respondents disclosed as to when exactly they realised that they were cheated by the appellant and that the document was obtained, (5) admittedly, the respondents sold the property for a sum of Rs.1,60,000 and executed the document on 20.7.1998 in respect of the property which stood in the name of Lakshmanna Pillai, (6) the suit came to be filed on 18.8.1999. Subsequently thereafter, viz., on 26.8.1999 the respondents mortgaged the schedule mentioned property to the Tuticorin Permanent Benefit Fund and borrowed the amount.
37. In the above circumstances, we are inclined to believe the statement of the appellant that the respondent is about to dispose of the property in question. The reasonings given by the lower Court for rejecting the case of the appellant that the respondents are attempting to create encumbrance over the schedule mentioned property and for holding that there is no material to come to the conclusion that the claim of the appellant is genuine are erroneous. Similarly the reasoning given by the lower Court that in the affidavit the appellant has not averred that the property mortgaged is not sufficient to discharge the debt is not correct since as already pointed out the appellant has stated so in paragraph 2 of the affidavit filed in support of the interlocutory application.
38. In this view of the matter the appeal which has been treated as a revision shall stand allowed. There will be an order directing the respondents to furnish security for a sum of Rs.12,62,066 before 31.8.2000. There will be an order of interim attachment till furnishing of such security. Failing to furnish security, within the said period, the property shown in the schedule to the Application in I.A.No.770 of 1999 in O.S.No.108 of 1999, on the file of the Sub Court, Tuticorin shall stand attached automatically. No costs. Consequently the connected Civil Miscellaneous Petition is closed.