Madras High Court
Unknown vs Solanki Traders on 29 November, 2011
Author: Vinod K.Sharma
Bench: Vinod K.Sharma
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 29.11.2011 CORAM THE HON'BLE MR. JUSTICE VINOD K.SHARMA A.Nos.3305 to 3307 of 2011, A.No.3841 and A.No.3650 of 2011 in C.S.No.489 of 2011 ORDER
This order shall dispose off A.Nos.3305 to 3307 of 2011, A.No.3841 and A.No.3650 of 2011 in C.S.No.489 of 2011.
A.3305 of 2011 To direct the 1st and 2nd respondents / defendants to furnish security to the extent of the suit claim jointly and severely at the first instance, on a date to be fixed by this Court, failing which to direct attachment of immovable properties.
A.3306 of 2011 To direct the TNSC Bank, West Mambalam Branch, Chennai to furnish the 2nd respondent details about the dates when the locker was operated and if the locker facility has been terminated, the date of the same also.
A.3307 of 2011 To impound the 2nd respondent's passport so as to restrain the second respondent to leave jurisdiction of this Court.
A.3841 of 2011 To set aside the exparte order dated 22.07.2011 passed in A.No.3305 of 2011, supported by the affidavit of Ramalingam Neelakantan.
A.3650 of 2011 To set aside the exparte order dated 22.07.2011 passed in A.No.3305 of 2011, supported by the affidavit of Mallika Neelakantan.
2. It is the case of the plaintiffs that the plaintiffs are mother-in-law and father-in-law of defendant no.1. Whereas defendant no.2 is the mother of defendant no.1, who was married to the daughter of the plaintiffs, according to Hindus rights and customs on 26.11.2001 at Chennai. The marriage was registered on the same day.
3. The defendant no.1, at the time of marriage, was working in Sathyam Computers Services Limited. The marriage was performed in a grand scale, wherein the daughter was given a lot of jewelleries, sridhana etc as per the custom. In addition, gold jewellery, chain and ring was also given to defendant no.1.
4. The jewelleries mentioned in para-5 of the plaint, have not been returned to plaintiffs' daughter by defendant no.2. It is also pleaded case that some of the jewelleries were carried by the daughter of the plaintiffs while going to the United States of America. Whereas some of the jewels were left with defendant no.2.
5. It is also admitted case that 10 days after her marriage, the daughter of the plaintiffs left with the husband for United States of America. Allegations are levelled in the plaint that daughter of the plaintiffs was harassed by her husband in United States of Amierica, and that marriage between first defendant and daughter of plaintiffs has irretrievably broken down on account of cruelty and harassment. On that ground, matrimonial proceedings have been initiated by the daughter of plaintiffs, at New Jersey, USA.
6. The case of the plaintiffs is that the plaintiffs remitted certain loan to defendant no.2 for purchase of property in USA. A sum of Rs.49,78,805/- (Rupees Forty Nine Lakhs Seventy Eight Thousand and Eight Hundred Five only) was sent by the plaintiffs, which was utilized for purchase of a house in New Jersey, USA. Thereafter, in spite of repeated demand, defendant no.1 has failed to return the loan amount with interest, thus it is claimed that plaintiffs are entitled to Rs.49,78,805/- (Rupees Forty Nine Lakhs Seventy Eight Thousand and Eight Hundred Five only) and that the defendants are jointly and severally responsible to pay this amount.
7. The Allegations are also levelled in the plaint, that jewelleries were handed over to defendant no.2 at the instance of defendant no.1, which was kept in TNSC Bank.
8. That the Bank has not disclosed the detailed information to the plaintiffs on enquiry.
9. Along with the suit, plaintiffs have filed three application Nos.3305 to 3307 of 2011.
10. Prayer in A.No.3305 of 2011 is for directing the defendants to furnish security. In support of this prayer, it has been pleaded as under:
"8. I submit that unless an order of attachment is made pending disposal of the suit, any decree that may be passed in my favour would be only on paper and I will not be in a position to realize the fruits of the decree in specie at a later date having regard to the crippled financial status of the 2nd defendant. Since the first and second defendants are trying to act detriment to my interest and that of our daughter, we were forced to take the painful decision of filing the suit against the defendants for recovery of money and the interim application for attachment before judgment.
9. I state that we reliably learn and understand that the 2nd respondent may be leaving the jurisdiction of this Hon'ble Court by leaving the country. The 2nd respondent is likely to go to the USA so as to secrete the assets / jewels that have been illegally, unauthorisedly taken away by her from my daughter and us. Since the 1st respondent son of the 2nd respondent is presently working USA and as per our understanding the 1st respondent has no intentions of coming back to India taking advantage of her son working there, the 2nd respondent also might stay back in USA and away from India taking advantage. If the 2nd respondent is permitted to do so, we would be put to great hardship, prejudice, irreparable loss in as much as we would not be in a position to recovery the articles or the value thereof when the decree is granted in our favour at a later date. The decree would only be a paper tiger which we would not be in a position to implement at a later date. In the interest of justice and fairplay, it is just and necessary that the 2nd respondent's passport is impounded and she is not permitted to leave the jurisdiction of this Hon'ble Court or the shores of the country."
11. In spite of filing counter to A.Nos.3305 to 3307 of 2011, which are still pending, as per the practice in this Court, defendants / non applicants have filed A.Nos.3560 and 3841 of 2011 for setting aside exparte order. These two applications have been filed by defendant nos. 1 & 2.
12. In the applications filed for setting aside of exparte order, it is pleaded, that plaintiffs have suppressed material facts and are misusing the process of the Court. It is the case of defendants / non applicants that money, as pleaded in the plaint, was sent to the joint account of defendant no.1 and their daughter. In the matrimonial proceedings, daughter of plaintiffs has claimed share in the house property, which was purchased in joint name, by defendant no.1 with the daughter of plaintiffs.
13. It is the stand of defendants that money sent by plaintiffs stood utilized by their daughter for purchase of property, which was jointly purchased in their name, that is why, their daughter has claimed share in the property and not whole of the property.
14. In the proceedings before the USA Court, the stand taken by daughter of the plaintiffs, is that property was purchased by contribution of money by getting it from her father. Allegations regarding retaining of jewellery of the daughter of plaintiffs is also denied.
15. It is also submitted that even as per pleadings in the plaint / applications, allegations are, that their daughter had entrusted the jewellery, therefore, plaintiffs have no locus standi to maintain the present suit, specially when daughter is prosecuting her remedy in the USA Court.
16. Prayer is made for setting aside the order passed by this Court in directing the defendant nos.1 & 2 to furnish security.
17. The learned counsel for the plaintiffs vehemently contended that documents placed on record with the plaint proved beyond doubt that money was sent to defendant no.1 by the plaintiffs, therefore, that once it is proved that money was sent, and keeping in view of the fact that respondent no.1 is not within the jurisdiction of this Court, and that defendant no.2 is also likely to move USA, the plaintiffs are entitled to interim directions, as prayed for, to secure the suit claim.
18. The stand of the defendants, is that the plaintiffs failed to make out prima facie case, nor plaintiffs are going to suffer loss, as daughter of plaintiffs have already filed a claim in the Court of USA, including share in the property, purchased with the funds advanced by plaintiffs. It is also the contention of the learned counsel for defendants that no case to exercise jurisdiction under Order 38 Rule 5 of the Code of Civil Procedure is made out.
19. Order 38 Rule 5 of the Code of Civil Procedure reads as under:
"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."
20. A perusal of the above provision shows, that the Court has been cloaked with the power to call upon the defendant to furnish security for production of property, even before the judgment, in case the Court is satisfied that the defendant, with an intent to obstruct to 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.
21. Further still, Hon'ble Supreme Court of India in the case of M/s. Raman Tech & Process Engg. Co. v. M/s.Solanki Trader, 2008 (2) SCC 302, has observed as under:
"The power under Order 38, Rule 5 CPC is a drastic and extraordinary power. Such power should not be 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."
22. In light of the express provisions of Order 38, Rule 5 CPC and the observations of the Hon'ble Supreme Court in the matter of M/s. Raman Tech & Process Engg. Co. v. M/s.Solanki Trader, supra, the position of law that emerges is as under:
(i)The Court, before calling upon the defendant to furnish security for production of property, has to be satisfied that the defendant, with an 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.
This satisfaction of the Court has to be objective and not subjective in as much as there has to be a positive and definite material before the Court to enable the Court to come to a prima facie conclusion that the defendant is about to dispose of the whole of part of his property with an intention to obstruct or delay the execution of any decree that may be passed against him. Merely because a suit is filed or about to be filed against him, the defendant is not debarred from dealing with his property.
Accordingly, mere fact that some material is placed before the Court showing that defendant has disposed of some of his properties would by itself not be sufficient for the Court to exercise the powers conferred upon it under Order 38, Rule 5 CPC without their being further material on record to show that the property is being disposed off by the defendant with an intention to frustrate the probable decree that may be passed against him The intention of the defendant to remove or dispose of the whole or part of his property, with a view of obstructing or delaying the execution of any decree that may be passed against him is sine qua non before the power under Order 38, Rule 5 can be exercised by the Court.
However, it may also be observed here that the question of ascertaining the intention of the defendant is a vexed question having no easy solution and precise mathematical tests. The true intention of the defendant in disposing of the whole or part of his property would thus, have to be determined by the Court having regard to the particular facts and circumstances of each case.
(ii) The Plaintiff- Applicant is required to satisfy the Court that all the ingredients specified in Order 38, Rule 5(1) CPC exist before the application filed by the Plaintiff-Applicant can be allowed. The same is evident from the reading of Clause 4 of the Order 38, Rule5.
Merely because the defendant will not be prejudiced cannot be a ground in itself for the Plaintiff-Applicant to argue that the power under Order 38, Rule 5 CPC should be exercised by the Court.
Accordingly, the Plaintiff-Applicant is required to place sufficient material before the Court so as to enable the Court to form a prima facie opinion that the defendant, with an 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.
In order to do so, the Plaintiff-Applicant may be required to swear an affidavit in support of his application detailing the name, address and sufficiently describing the identity of the person or persons from whom he has received the information about the attempts of the defendant to dispose of the whole or any part of his property with an intent to obstruct or delay the execution of any decree that may be passed against him.
As the matter with regard to the power of the Court to call upon the defendant to furnish security for production of property, even before the judgment, has been detailed and expressly provided in Order 38, Rule 5 CPC, the Court cannot resort to its inherent powers under Section 151 CPC and call upon the defendant to furnish security for production of property in case the ingredients of Order 38, Rule 5(1) CPC are not fulfilled. Reference in this regard can be made to the judgment of the Hon'ble Supreme Court in the matter of Nahar Industrial Enterprises Ltd v. Hong Kong & Shanghal Banking Corporation, 2009 (8) SCC 646, wherein it has been held that where a matter has expressly been provided for in the CPC, inherent power cannot be resorted to.
23. Learned counsel for the plaintiffs / applicants placed reliance on the judgment of the Hon'ble Supreme Court in the case of Raman Tech. & Process Engg. Co. & another vs. Solanki Traders, 2008-3-L.W.744, to contend that the object of Order 38 Rule 5 of CPC in particular, is to prevent the defendant from defeating the realization of the decree, that may ultimately be passed in favour of the plaintiff.
24. Reliance was also placed on the judgment of the Hon'ble Supreme Court in the case of Sardar Govindrao Mahadik and another vs. Devi Sahai and others, AIR 1982 SC 989. In this judgment, the Hon'ble Supreme Court has interrupted Order 38 Rule 5, thus, cannot advance the case of the plaintiffs/applicants, as it is not held by Hon'ble Supreme Court that jurisdiction under Order 38 Rule 5 can be exercised on the asking, without complying with conditions laid down for exercise of jurisdiction.
25. The contention of the learned counsel for the plaintiffs was that the pleadings in the suit and applications clearly shows the attempt on the part of defendants to defeat the decree, as defendant no.2 is likely to move out of jurisdiction of this Court.
26. The Hon'ble Supreme Court in the case of Raman Tech. & Process Engg. Co. & another vs. Solanki Traders,(supra), was pleased to lay down as under:
"4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. The object of order 38 rule 5 CPC in particular, is to prevent any defendant from defeating the realization of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose of, or remove from the jurisdiction of the court, his movables. The Scheme of Order 38 and the use of the words `to obstruct or delay the execution of any decree that may be passed against him' in Rule 5 make it clear that before exercising the power under the said Rule, the court should be satisfied that there is a reasonable chance of a decree being passed in the suit against the defendant. This would mean that the court should be satisfied the plaintiff has a prima facie case. If the averments in the plaint and the documents produced in support of it, do not satisfy the court about the existence of a prima facie case, the court will not go to the next stage of examining whether the interest of the plaintiff should be protected by exercising power under Order 38 Rule 5CPC. It is well-settled that merely having a just or valid claim or 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 the intention of defeating the decree that may be passed. Equally well settled is the position that even where the defendant is removing or disposing his assets, an attachment before judgment will not be issued, if the plaintiff is not able to satisfy that he has a prima facie case."
27. Learned counsel for the defendants also placed reliance on the judgment of this Court to contend that the power under Order 38 Rule 5 cannot be exercised mechanically or merely for the asking. The contention of the learned counsel for the defendants / non applicants was that the plaintiffs failed to make out any case for invoking the provisions of Order 38 Rule 5 of CPC
28. Reliance was placed by the defendants / non applicants in para-5 of the judgment in Raman Tech. & Process Engg. Co. & another vs. Solanki Traders, (supra), which reads as under:
"5. The power under Order 38, Rule 5 CPC is a drastic and extraordinary power. Such power should not be 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."
29. In support of the application that passport of the defendant no.2 should be impounded, learned counsel for the plaintiffs contended that in order to safeguard the interest of the plaintiffs / applicants, passport of the defendant no.2 deserved to be impounded, as respondent no.2 may leave jurisdiction of this Court.
30. Learned counsel for the plaintiffs / applicants, in support of A.No.3306 of 211, contended that the Bank should be directed to furnish details, about the operation of locker to know whether the jewelleries have been removed or not.
31. On consideration, I find no merit in all these applications. The plaintiffs / applicants failed to make out any case, for exercise of jurisdiction under Order 38 Rule 5 of CPC, as per the pleadings in the plaint, it has specifically averred that the money was sent to defendant no.2, for purchase of property and it is not disputed that the property was in fact purchased in the joint name of defendant no.1 and daughter of the plaintiffs.
32. The daughter of plaintiffs has already initiated proceedings in USA Court to assert her rights to property and other claims.
33. Once the property is admittedly purchased and is in USA, no prima facie case is made out in favour of the plaintiffs. Similarly, with regard to jewellery, admittedly, jewelleries were said to have been given by their daughter to defendant no.2. It is for the daughter to claim jewelleries, which belong to her. The parents of daughter cannot retain of jewellery, as litigation is pending between the daughter of plaintiffs and defendant no.1 in USA.
34. The suit prima facie does not seem to be bona fide.
35. Even otherwise, reading of the pleadings in the plaint make out no case for directing defendants / non applicants to furnish security, as it is not even averred that any overact has been done by defendants after filing of the suit, to defeat the decree to be passed in favour of the plaintiffs / defendants.
36. The judgments relied upon by the applicants / plaintiffs cannot advance the case, as it is well settled that the provisions of Order 38 Rule 5 are special provisions, which cannot be used to convert the unsecured loan into secured loan.
37. In this case, it will be a question of evidence to prove whether the amount sent has been towards loan or sent to the defendant no.1 for purchase of house in the joint name of the husband and wife.
38. A.No.3305 of 2011, therefore, is dismissed.
39. The prayer of A.No.3306 of 2011 also cannot be accepted, as the application is an attempt to collect evidence, which is not permissible under law. It is for the plaintiffs / applicants to lead evidence and at that time, they can always summon the Officers of the Bank with record to prove their case. This Court cannot be used to collect evidence.
40. Similarly, the application for impounding the passport also cannot be sustained.
41. The Hon'ble Supreme Court, in the case of Suresh Nanda vs. CBI, 2008 (5) CTC 277, was pleased to lay down as under:
"15. In our opinion, even the Court cannot impound a passport. Though, no doubt, Section 104, Cr.P.C. states that the Court, may if it thinks fit, impound any document or thing produced before it, in our opinion, this provision will only enable the Court to impound any document or thing other than a passport. This is because impounding a "passport" is provided for in Section 10(3) of the Passports Act. The Passports Act is a special law while the Cr.P.C. is a general law. It is well settled that the special law prevails over the general law vide G.P.Singh's Principles of Statutory Interpretation (9th Edition pg.133). This principle is expressed in the maxim "Generalia specialibus non derogant". Hence, impounding of a passport cannot be done by the Court under Section 104, Cr.P.C. though it can impound any other document or thing."
VINOD K.SHARMA.J., ar Otherwise also, there is no ground whatsoever made out for restraining the defendant no.2, from moving to United States of America.
42. Consequently, A.Nos.3305 to 3307 of 2011 are dismissed with costs, which are assessed as Rs.10,000/- (Rupees Ten Thousand only). Whereas A.Nos.3841 and 3650 of 2011 are dismissed, as having been rendered infructuous.
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