Arrest before judgment
1. Where defendant may be called upon to furnish security for appear-
ance.—
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, or
(iii) has disposed of or removed from the local limits of the jurisdiction of the
Court his property or any part thereof, or
(b) that the defendant is about to leave 1[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
entrusted with the execution of the warrant any sum specified in the
warrant as sufficient to satisfy the plaintiffs 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.
Pre 1976 Amendments and Case Cited
1. Subs. by Act No. 2 of 1951.
2. Mschelska Mills Mothers v. Chorus Girl Inc. AIR1991Delhi129.
3. Sony India Ltd. v.. Commissioner of Income Tax and Addl. Commissioner of Income
Tax, Range-9 2005 (83) DRJ 75.
4. Vareed Jacob v. Sosamma Geevarghese (2004)6SCC378: AIR2004SC3992.
5. V.K. Nataraja Gounder v. S.A. Bangaru Reddiar AIR1965Mad212.
6. Mschelska Mills Mothers v. Chorus Girl Inc. AIR1991Delhi129.
7. Stephen Commerce Pvt. Ltd. v. Owners and Parties in Vessel M.T. Zaima Navard
AIR1999Cal64.
COMMENTS
Under Order 38 Rule 1 of the Code the court, if satisfied by affidavit or otherwise, that
the defendant was about to leave India under circumstances affording reasonable
probability that the plaintiff would or might thereby be obstructed or delayed in the
execution of any decree that might be passed against the defendant in the suit could
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. The proviso says that defendant
shall not be arrested if he pays to the officer entrusted 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 further
order of the court (Mschelska Mills .Mothers v. Chorus Girl Inc).2 Under different rules
of this Order 38, vast powers have been vested in the Court in relation to the defendant
as well as the property in suit, or both. Attachment before judgment is one of the known
concepts (Sony India Ltd. v.. Commissioner of Income Tax and Addl. Commissioner of
Income Tax, Range-9).3 Under this Order, at any stage of the suit where the Court is
satisfied that the defendants with an intention to delay or to avoid any process of Court
or obstruct or delay the decree that may be passed against the defendant, the defendant
has absconded or left the limitations of the jurisdiction of the court, is about to do so
or has disposed of or removed his property or any part thereof under the jurisdiction
of the Court, the court could issue a warrant of arrest with a direction that such
defendant be brought before the Court and be directed to furnish security subject to
such terms and conditions as the court may deem fit and proper.
Under Order 38, Rule 1 an extraordinary relief is given to the plaintiff, namely, in
appropriate case where the court finds a strong prima facie case in favour of the
plaintiff and if the Court is satisfied that the defendant is likely to defeat the decree
in future as and when it is passed, then the Court shall grant attachment before
judgment even before final adjudication of the claim of the plaintiffs, hence it is an
extraordinary relief given to the plaintiff by the Court (Vareed Jacob v. Sosamma
Geevarghese).4 The remedy of an attachment before judgment is certainly extraordinary.
If granted, it casts an obligation on the party against whom it is made, even before
he is heard in defence to the suit. The purpose of the rule is to safeguard the right
of the plaintiff in the event of his getting a decree in his favour and to prevent a
fraudulent defendant from defeating the decree. It is clear that the court has to act
with the utmost circumspection and with maximum care and caution before issuing
an order of attachment. Otherwise, it would become a weapon of oppression in the
hands of unscrupulous plaintiffs (V.K. Nataraja Gounder v. S.A. Bangaru Reddiar).
Provisions of Rule 1 of Order 38 of the Code being stringent have to be strictly
construed. A bare reading would show that an order under this provision could be
made only against the defendant and against no one else. Now, if under Section 56
of the Code the court shall not order the arrest or detention in civil prison of a woman
in execution of a decree for the payment of money, it cannot certainly order her arrest
in a suit filed for recovery of money where a decree is yet to be passed. A woman
cannot be arrested or detained in civil prison under Rule 1 of Order 38 of the Code
(Mschelska Mills Mothers v. Chorus Girl Inc.).
Under Sub-rule (b) of Order 38 a foreigner, simply because he is a foreigner, and a
decree might be passed against him, might face arrest and the necessity of furnishing
security, because he does not reside in India. If it appears to the Court that the claim
of plaintiff is reasonably arguable to a certain extent, that the defendant is a foreigner
who is about to leave India, and that the decree if passed, might be delayed in
execution because of the residence abroad of the defendant, the Court would have
jurisdiction to issue a warrant of arrest and maintain it until security is furnished. It
is noteworthy, that this jurisdiction to issue warrant and call for security, is vested
with the Court in regard to foreigners, just as it is vested with the Court in regard to
dishonest and fraudulent Indian defendants, although the foreigner might be a man
of blemish less finance and character, yet, because he is a foreigner, and because
the decree against him will have to be transmitted abroad for execution, the Court is
vested with the jurisdiction to call for security. This jurisdiction has to be appropriately
exercised in all cases which come before the Court (Stephen Commerce Pvt. Ltd. v.
Owners and Parties in Vessel M.T. Zaima Navard).7
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 to 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 been 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.
Case Cited
1. Mschelska Mills Mothers v. Chorus Girl Inc. AIR1991Delhi129.
COMMENTS
Under Rule 2 of Order 38 of the Code if the defendant fails to show such cause, the
court can order him either to deposit money in court or other property sufficient to
answer the claims against him or to furnish security for his appearance at any time
when called upon during the pendency of the suit and until satisfaction of any decree
that might be passed against him. Under sub-rule (2) of this Rule 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 might be ordered to pay in the suit (Mschelska
Mills Mothers v. Chorus Girl Inc.).1
Note.—For Form of Security see Form No. 2 App. F of the Code.
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.
Case Cited
1. Mschelska Mills Mothers v. Chorus Girl Inc. AIR1991Delhi129.
2. Legu Venkataramanayya Setty v. Gunda Subbayya Chetty AIR1962AP175.
COMMENTS
Rule 3 prescribes the procedure when a surety could be discharged on his making
an application during the pendency of the suit (Mschelska Mills Mothers v. Chorus
Girl Inc.).1 A “security”’ speaking generally, is anything that makes the money more
assured in its payment or more readily recoverable; as distinguished from e.g., a
mere I.O.U. which is only evidence of debt”. It does not therefore exclude the
guarantee which can be provided by any surety. There is yet another indication
which can be called out from the manner in which the term “security” has been
employed in the Civil Procedure Code itself. That word occurs with reference to the
proceedings under Order XXXVIII Rules 2 and 3, and also in the matter of furnishing
sureties when property is disdained or a person is arrested. In that context also, the
word “security” has been used as synonymous with “surety” and therefore, the
meaning that has to be given to the word “security” should be taken to be comprehensive
enough to include a “surety” or atleast not to exclude it (Legu Venkataramanayya
Setty v. Gunda Subbayya Chetty).2
Note.—For Form of summons under this rule, See Form No. 3 of App. F.
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 that no person shall be detained in prison under this rule after
he has complied with such order.
1. Mschelska Mills Mothers v. Chorus Girl Inc. AIR1991Delhi129
COMMENTS
Rule 4 prescribes the procedure where the defendant fails to furnish security and in
that eventuality the court may commit him to civil prison until the decision of the suit
or, where decree is passed against the defendant, until the decree has been satisfied
(Mschelska Mills Mothers v. Chorus Girl Inc.).1
Attachment before judgment
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.
ANNOTATIONS
Amendment Effective Date of Amendment
The Code of Civil Procedure Amendment The Code of Civil Procedure (Amendment)
Act 1976 inserted Sub-rule (4) to Rule 5. Act, 1976 wef. 01.02.1977
Case Cited
1. Padam v. State, AIR 1961 SC 218 at 220 : 1961 (1) SCR 884.
2. Vemulapalli Ravichandra v. Mattampalli Srinivasa Rao AIR 2007 AP 306; Symphony
Services Corp. (India) Pvt. v. Mr. Sudip Bhattacharjee 2008 (1) Kar LJ 24; Onkarmal v.
State Bank, AIR 1992 P&H 104.
3. Sardar Govindrao Mahadik v. Devi Sahai AIR1982SC989: (1982)1SCC237.
4. Techno Systems Protections v. Supreme Telecommunications MANU/DE/2979/2005.
5. Natraja v. Bangara, AIR 1965 Mad 212 ; Ratan v. Howrah Motor Co. AIR 1975 Cal 180.
6. L. V. Bhujanga Rao v. Ch. Venkateswara Rao AIR1993Mad246.
7. M/s. Nagpal Steel Limited v. Arjan Dev Verma 1998 Vol. 2 PLR 372, Techno Systems
Protections v.. Supreme Telecommunications MANU/DE/2979/2005.
8. Subhash Bhimashankar Kalase v. State Bank of India AIR2005Bom165.
9. Srinivasan v. Srinivasan, AIR 1985 Mad 269.
10. Raman Tech. and Process Engg. Co. v. Solanki Traders (2008)2SCC302; Pappammal
v. Chidambaram, AIR 1984 Mad 70.
11. Smt. Kamla Panda v. Krishna Cloth Stores, AIR 1989 Ori 229.
12. Sports Authority of Andhra Pradesh v. Regal Sports Company 2008 (6) ALD 759.
13. State Bank of India v. Madhya Pradesh Iron and Steels Works Private limited
AIR1998MP93.
14. Rajendran v. Shankar Sundaram AIR2008SC1170.
15. Chiman Das v. Mahadevappa AIR 1961 AP 417., Itel Industries Pvt. Ltd. v. Ind. Solders
and Alloys Pvt. Ltd. MANU/TN/1529/2008.
16. Surendra Nath Goswami v. Bansi Badan Goswami AIR 1918 Cal 911; Begg. Dunlop
and Co. v. Jagannath, (1912) 16 Cal WN 402; Balai Kumar Sarkar v. Bimal Chandra
Sarkar AIR1978Cal340.
17. Baburao v. Kadarappa, AIR 1974 Mys 63.
18. Kerala State Financial Enterprises Ltd v. Official Liquidator, High Court of
Kerala(2006)10SCC709: AIR2007SC63
19. Ramaswamy v. Dhanadayuthapani, AIR 1986 Mad 360.
20. Madigiri Kiran Kumar v. Swarnagiri Subbamma AIR 2004 AP 104.
21. Smt. Kamala Panda v. Krishna Cloth Stores AIR1989Ori229.
22. Y. Vijayalak-shmiamma v. M/s. Sakinala Lakshmaiah, AIR 1980 A.P 176.
23. Mrs. Chitra Chockalingam,& ors. v. Devaki Hospitals Pvt. Limited MANU/TN/8717/2007.
24. Vasu v. Narayana, AIR 1962 Ker 261.
25. Sri. M.R. Lakshmanappa v. Sri Ramachandra Bhat 2008 (4) Kar LJ 254.
26. Sri Panduranga Brick Works v.. Gururaghavendra Foundations Pvt. Ltd. (2007) 4 MLJ 863.
27. Srinivasan, T. v. V. Srinivasan, MANU/TN/0155/1985: AIR 1985 Mad 269.
28. G. Kuppathi Mudaliar v. V. Muru-gesan, MANU/TN/0226/1982: AIR 1982 Mad 49; Ankinapalli
Obul Reddy v. Dadibathina China Gurava Reddy 2000 ( 5 ) ALT 125, K. Mallesh Mudiraj v.
C. Sudhakar 2007 (4) ALD 369; Allahabad Bank v. Shiv, AIR 1976 All 447.
29. Tatanagar Transport Corporation v. Ajanta Enterprisers AIR1987Ori107.
30. UCO Bank, Madras v. Sukra Shoe Fabric AIR1992Mad293.
31. Palghar Rolling Mills Pvt. Ltd v. Visvesvaraya Iron and Steel Ltd AIR1985Kant282.
32. Premraj Mundra v. Md. Maneck Gazi, AIR 1951 Cal 156; R.B.M. Pati Joint Venture v.
Bengal Builders AIR2004Cal58
33. K. C. V. Airways Ltd. v. Wg. Cdr. R.K. Blaggana 70 ( 1997 ) DLT 326, Dr. Sukhdev Singh
Gambhir v. Shri Amrit Pal Singh AIR 2003 Delhi 280.
34. Mutha Subba Rao v. Official receiver, West Godavari MANU/AP/0142/1965: AIR 1965
AP 52: Sri Rachamalla Nagi Reddy v. Sri Pasurula Naganna AIR2005AP147.
35. Sankar Sealing Systems P. Ltd. v. Jain Motor Trading Co AIR2004Mad127.
36. Nowroji Pudumjee Siradar v. Deccan Bank Ltd. AIR 1921 Bom 69.
37. Premraj Mundra v. Md. Maneck Gazi, AIR 1951 Cal 156; R.B.M. Pati Joint Venture v.
Bengal Builders AIR2004Cal58.
38. Surender Singh Bajaj v. Kitty Steels Limited AIR 2003 AP 13, Vantaru Chinna Subba
Rayudu v. Y. Lalitha Vani 2008 (6) ALD 9.
SYNOPSIS
1. Scope and Object ...................... 1672 4. Sub-rule 4 ................................... 1675
2. What is Attachment .................. 1674 5. Instances where Order 38 is not
applicable ................................... 1677
3. Sub-rule 3 ................................... 1675
1. Scope and Object.
The object of the provision for attachment before judgment is to prevent any attempt
on the part of the defendant to defeat the realisation of decree that may be passed
against him (Padam v. State).1 Attachment before judgment is levied where the court
on an application of the plaintiff is satisfied 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
(Vemulapalli Ravichandra v. Mattampalli Srinivasa Rao; Symphony Services Corp.
(India) Pvt. v. Mr. Sudip Bhattacharjee; Onkarmal v. State Bank).2 The sole object
behind the order levying attachment before judgment is to give an assurance to the
plaintiff that his decree if made would be satisfied. It is a sort of a guarantee against
decree becoming infructuous for want of property available from which the plaintiff
can satisfy the decree (Sardar Govindrao Mahadik v. Devi Sahai).3 In order to attract
the provisions of Order 38 Rule 5 of the Code of Civilo Procedure, the applicant has
to make definite allegations which at least prima facie would show that the defendant
is intending to delay the passing of the decree and is removing the properties beyond
the jurisdiction of the court with an intention to frustrate the decree, if ultimately
passed by the court in favour of the plaintiff (Techno Systems Protections v. Supreme
Telecommunications).4
The power under Rule 5 is extraordinary power and must sparingly be exercised with
caution else it may become a tool in the hand of a plaintiff to harrass a lawful owner
(Natraja v. Bangara; Ratan v. Howrah Motor Co.)5 and more care should be taken when
granting in favour of any person whose right to recover the money will fructify the
decree in case the same is passed on being established and so the Courts should
cautiously exercise the above said provision of law (L. V. Bhujanga Rao v. Ch. Venkateswara
Rao).6 May be the provisions are stringent but where the facts and circumstances of
the case makes it apparent on record that the intention of the defendant is not bona
fide and they are attempting to frustrate the decree which is likely to be passed in
favour of the plaintiff and they offend any of the clauses to Order 38 Rule 5, the Court
would normally come to the rescue of the applicant for such safeguard. It is not
necessary that the Court must straight away pass an order of attachment before
judgment. In fact sub-rule 1 of Rule 5 of Order 38 provides that where the defendant
fails to show cause to the court then the Court would direct him to deposit in the court
money or other property sufficient to answer the claim of the plaintiff or to furnish the
security (M/s. Nagpal Steel Limited v. Arjan Dev Verma ; Techno Systems Protections
v.. Supreme Telecommunications).7 Thus, the provision of rule 5 would apply where
the defendant is about to dispose whole or part of the property and not where the
property has already been disposed of much before the filing of the suit (Subhash
Bhimashankar Kalase v. State Bank of India).8
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 that 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 5 Code of Civilo Procedure. 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 (Srinivasan v. Srinivasan).9 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. 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 lever 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 (Raman Tech. and Process
Engg. Co. v. Solanki Traders; Pappammal v. Chidambaram).10 Unless the ingredients of
Order 38 Rule 5 of the Code are made prima facie, an order of attachment before
judgment by way of conditional attachment or otherwise cannot be made in a mechanical
and routine way (Smt. Kamla Panda v. Krishna Cloth Stores).11 The courts are expected
to be careful and cautious while exercising the power under Order 38 Rule 5 of the Code
(Sports Authority of Andhra Pradesh v. Regal Sports Company).12 The plea under Order
38, Rule 5 of the Code of Civil Procedure itself is not conclusive during the pendency
of a suit. Nothing prevents a person from moving another application for attachment
before judgment if the circumstances change. The idea behind that application is that
the defendant may not be permitted to deal with his property making it impossible for
the plaintiff to get the fruits of the decree. The principles of constructive res judicata
could hardly apply to such proceedings (State Bank of India v. Madhya Pradesh Iron
and Steels Works Private limited).13
The court while exercising its jurisdiction under Order XXXVIII Rule 5 of the Code of
Civil Procedure is required to form a prima facie opinion at that stage. It need not go
into the correctness or otherwise of all the contentions raised by the parties (Rajendran
v. Shankar Sundaram).14 Provincial Small Cause Courts have no power to attach
immovable property (See Rule 13 of this Order). Section 46 of Civil Procedure Code
concerns with execution of decrees and does not affect the Jurisdiction of a Court
of law under Order 38 Rule 5 of Civil Procedure Code to attach before Judgment,
properties lying outside the jurisdiction of the Court (Chiman Das v. Mahadevappa;
Itel Industries Pvt. Ltd. v. Ind. Solders and Alloys Pvt. Ltd.).15 Property lying outside
the jurisdiction of the Court cannot at all be attached, but it can be attached by the
Court by following the provision of Section 136. An executing Court cannot directly
attach a property lying outside its jurisdiction, but it can do so by transferring the
decree to the Court within whose jurisdiction the property is situate in accordance
with the provision of Section 39, the same principle would also apply to an order for
attachment before judgment as provided by Order 38, Rules 5 and 6 (Surendra Nath
Goswami v. Bansi Badan Goswami ; Begg. Dunlop and Co. v. Jagannath; Balai Kumar
Sarkar v. Bimal Chandra Sarkar).16
Stay of trial of the suit under Section 10 of this Code is no bar to exercise powers
under this rule (Baburao v. Kadarappa).17
2. What is Attachment.
The word ‘attachment’ would only mean ‘taking into the custody of the law the person
or property of one already before the court, or of one whom it is sought to bring before
it. It is used for two purposes: (i) to compel the appearance of a defendant; and (ii) to
seize and hold his property for the payment of the debt. It may also mean prohibition
of transfer, conversion, disposition or movement of attachment before judgment in
terms of Order XXXVIII of the Code of Civil Procedure and attachment for execution
of a decree under Order XXI thereof. An order of attachment before judgment passed
under Order XXXVIII seeks to safeguard the interests of plaintiff so that in the event
a decree is passed, the same stands satisfied. On the other hand, the essential part
of Order XXI is to see that the process of court is not defeated once execution starts
(Kerala State Financial Enterprises Ltd v. Official Liquidator, High Court of Kerala).18
3. Sub-rule 3.
Where there is no prayer to order simultaneous conditional attachment, the Order to
this effect is void (Ramaswamy v. Dhanadayuthapani).19 Whenever the defendant
comes forward with proper security, there shall not be any bar to raise the attachment
by accepting the bank security in order to ensure recovery of the money covered by
the suit which is likely to be decreed in favour of the plaintiff (Madigiri Kiran Kumar
v. Swarnagiri Subbamma).20
A conditional order of attachment can only be passed if the pre-condition there for
provided under Sub-rule (1) of calling upon the defendant to either furnish security or
show cause why such security should not be furnished is complied with. In terms,
Order 38, Rule 5 does not contemplate the passing of final order of attachment, but
leaves it to Rule 6 under which, if the defendant either fails to show cause why the
security shall not be furnished or fails to furnish the security as required, the Court
may direct the property to be attached (Smt. Kamala Panda v. Krishna Cloth Stores).21
4. Sub- Rule 4.
Under Order 38, Rule 5(4) an order of attachment without compliance with the provisions
of sub-rule (1) will be void. So, before an order of attachment before judgment is
made, the Court must satisfy itself that the defendant is about to dispose of or
remove the whole or part of his property. Secondly, this satisfaction must be derived
from material on record either by way of affidavit or otherwise; it cannot be whimsical
nor could it be illusory and it should also be based on clear and convincing proof on
enquiry that the order is needed for protection of plaintiff. Not only that, the Court
must insist upon strict proof of allegations made in affidavit. It is only on proof
positive that the defendant is, with intent to obstruct or delay the execution of any
decree that may be passed, either about to dispose of or remove the whole or any
part of his property, the Court will pass an order directing defendant within certain
time to be fixed, either to furnish security in such sum as may be specified or to
appear and show cause as to why he should not furnish security. Before the Court
gives such a mandate, the condition precedent is the satisfaction to be arrived at as
stated above (Y. Vijayalak-shmiamma v. M/s. Sakinala Lakshmaiah).22 The sine qua
non for an order of Attachment before Judgment is the malafide intention of the
defendant to defeat the decree that may be passed against the plaintiff and these
ingredients should be established by the plaintiff in the affidavit filed in support of the
Application (Mrs. Chitra Chockalingam,& ors. v. Devaki Hospitals Pvt. Limited).23
Where the Court is satisfied that allegations in the application for attachment before
judgment are true, ordinarily at the first instance only direction to furnish security
within specified time or to appear and show cause why direction to furnish security
be not issued. Only in exceptional cases of hardship, simultaneous
conditional sale should be issued under sub-rule (3) of Rule 5. Without issuing any
show cause notice or direction to furnish security the order of attachment shall be
illegal (Vasu v. Narayana).24
The jurisdiction under Order 38 Rule 5 of Code of Civil Procedure 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 (Sri. M.R. Lakshmanappa v. Sri Ramachandra Bhat).25 Unless the requirements
of Order 38 Rule 5 is complied with, an order of attachment cannot be made, as the
provision is not a lever for the plaintiff to coerce the defendant to come to terms (Sri
Panduranga Brick Works v.. Gururaghavendra Foundations Pvt. Ltd.).26An attachment
before judgment is not a process to be adopted as a matter of course. The suit is yet
to be tried and the defence of the defendant is yet to be tested. The plaintiff only stands
a prima facie chance of success in the suit. At this nebulous juncture, an extraordinary
relief is being sought for by the plaintiff. This relief could be granted only if the conditions
for its grant, as per the provisions of the Code, stand satisfied. Hence utmost caution
and circumspection should guide the court. The court must advert to the provisions of
the Code in this regard, and investigate the allegations thrown against the defendant,
satisfy itself that a case for attachment before judgment has been made out and then
pass the requisite order. There principles have come to be recognized as mandate to
the Court and if the Court acts in breach thereof, such an order of the Court will have
to be ignored as the result of dereliction of duty (Srinivasan, T. v. V. Srinivasan).27 When
the order of attachment is made without complying with these provisions the attachment
is void (G. Kuppathi Mudaliar v. V. Muru-gesan; Ankinapalli Obul Reddy v. Dadibathina
China Gurava Reddy; K. Mallesh Mudiraj v. C. Sudhakar; Allahabad Bank v. Shiv).28
Thus, it is clear that both the pre-conditions must be satisfied. For the purpose of
exercise of power under Order 38, Rule 5, Code of CivilProcedure, Court is to
examine :
(i) What property is about to be disposed of or removed?
(ii) Whether the same is the property of the defendant?
(iii) Whether it is the whole or part of the property? And
(iv) What is the intention of the defendant
Even if all the points are answered in favour of the plaintiff, the Court is not bound
to exercise the power if it finds that the same may not factually have the effect of
obstructing or delaying the execution of the decree (Tatanagar Transport Corporation
v. Ajanta Enterprisers).29 The Court has to act with utmost circumspection and with
maximum care and caution in order to avoid the said remedy being a weapon of
oppression in the hands of unscrupulous applicants claiming the relief under Order
38, Rule 5 of Civil Procedure Code and as such it is incumbent upon the applicants
to state the grounds to prove the same on the basis of its contents by giving the
material particulars and sources of information, belief and so on. A mere verbatim
copy of the Order 38, Rule 5 of Civil Procedure Code or a mechanical repetition of
the language of the Code without an iota or substratum of truth, underlying the
allegation, amounts to merely a colourable imitation and constitute an abuse of
process of the Court (UCO Bank, Madras v. Sukra Shoe Fabric).30 Simple reproduction
of the language used in Order,38, R. 5 will not meet the requirements of this Order
(Palghar Rolling Mills Pvt. Ltd v. Visvesvaraya Iron and Steel Ltd).31. The sale of
properties at a gross undervalue, or benami transfers, are always good indications
of an intention to defeat the plaintiff’s claim. The Court must however be very cautious
about, the evidence on these points and not rely on vague allegations (Premraj
Mundra v. Md. Maneck Gazi; R.B.M. Pati Joint Venture v. Bengal Builders).32 Where
the full ingredients for invoking it are lacking in the application and the affidavits in
support thereto of plaintiff under Order 38 Rule 5, attachment before judgment order
cannot be ordered (K. C. V. Airways Ltd. v. Wg. Cdr. R.K. Blaggana; Dr. Sukhdev Singh
Gambhir v. Shri Amrit Pal Singh).33 It is well settled that an attachment, whether before
or after judgment, does not create any charge on the attached property. An attaching
creditor is not a secured creditor (Mutha Subba Rao v. Official receiver, West Godavari;
Sri Rachamalla Nagi Reddy v. Sri Pasurula Naganna).34
Where in the sworn affidavit, Managing Director of the plaintiff Company has alleged
that the defendants are delaying the payment and with a view to defeat the payment
of the amount to the Creditors including the plaintiff, defendants are making attempts
to part with their immovable and movable properties. The above averments sufficiently
satisfy the requirements under Order 38, Rule 5 of Civil Procedure Code (Sankar
Sealing Systems P. Ltd. v. Jain Motor Trading Co.).35
5. Instances where Order 38 is not applicable.
Merely because the defendant attempts to sell some of his immoveable property,
while proceedings against him are pending, it does not follow that he is disposing of
the property with intent to obstruct or delay the execution of any decree that may be
passed in the suit (Nowroji Pudumjee Siradar v. Deccan Bank Ltd.).36 The mere fact
of transfer is not enough, since nobody can be prevented from dealing with his
properties simply because a suit has been filed; There must be additional circumstances
to show that the transferor is with an intention to delay or defeat the plaintiff’s claim.
It is open to the Court to look to the conduct of the parties immediately before suit,
and to examine the surrounding circumstances, and to draw an inference as to
whether the defendant, is about to dispose of the property, and if so, with what
intention. The Court is entitled to consider the nature of the claim and the defence
put forward. Mere removal of properties outside jurisdiction, is not enough, but where
the defendant with notice of the plaintiff’s claim, suddenly begins removal of his
properties outside the Jurisdiction of the appropriate Court, and without any other
satisfactory reason, an adverse inference may be drawn against the defendant where
the removal is to a foreign country, the inference is greatly strengthened.
However, the fact that the defendant, is in insolvent circumstances or in acute
financial embarrassment is a relevant circumstance, but not by itself sufficient. That
in the case of running businesses, the strictest caution is necessary and the mere
fact that a business has been closed, or that its turnover had diminished, is not
enough. Mere neglect, or suffering execution by other creditors, is not a sufficient
reason for an order under Order 38 of the Code (Premraj Mundra v. Md. Maneck Gazi;
R.B.M. Pati Joint Venture v. Bengal Builders).37 It is well settled that an order under
this Order should not be passed merely for the sake of asking or merely because of
the fact that the garnishee has huge sum of money payable to the defendant (Surender
Singh Bajaj v. Kitty Steels Limited; Vantaru Chinna Subba Rayudu v. Y. Lalitha Vani).38
Vague or general allegations that the defendant is set to transfer the property is not
sufficient ground to order attachment before judgment.
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.
ANNOTATIONS
High Court Amendment
Bombay
In Order XXXVIII, in rule 6, in Sub-rule (2),
after the words “the required security”,
insert the words “or gives an undertaking
to the Court to do or not to do a thing”,
(w.e.f. 01.10.1983)
Case Cited
1. Nathu Mal v. Kishori Lal, AIR 1914 All 511.
2. S.P. Venkanna Babu v. Varalakshmi Finance Corporation MANU/AP/0530/1996, J. Balaji
v. Earladinne Venkateswarlu MANU/AP/0702/2008.
3. Mohammad Ali Ismail v. Baldeo Singh AIR1955Pat115; ‘Badri Prasad v. Babulal’, AIR
1950 Cal 368D; ‘B. Prag Nath v. Mt. Indra Devi’, AIR 1934 All 458 (E).
4. R.S. Cambray and Co. (P.) Ltd v. Bishnu Banerjee AIR1988Cal400.
COMMENTS
Issue of necessary notice to the defendant and the conditional attachment is permissible
under that rule and is to take effect only until the defendant, to whom notice has been
issued, either furnishes the required security or appears to show cause (Nathu Mal v.
Kishori Lal.).1 The essential conditions to be satisfied are that the Court must on proper
materials be satisfied that there is an attempt of alienation of the properties so as to
frustrate the decree that may be passed in the suit and secondly, on being called upon,
the defendant fails to furnish security or to show cause why the security would not be
furnished. If the Court comes to prima facie view that an attempt is being made to
dispose of the properties it may pass a conditional order of attachment while calling
upon the defendant to furnish security. Hence the primary requirement is of the satisfaction
of the court that attachment is necessary to make the decree a reality and realizable
and not one at vacuum (S.P. Venkanna Babu v. Varalakshmi Finance Corporation; J.
Balaji v. Earladinne Venkateswarlu).2Orders under Rule 6 of Order 38, before complying
with the provisions of Rule 5, are irregular and objectionable and they are not necessarily
‘ultra vires’ or ‘ab initio’ void. The defendants, when they showed cause, took no
objection to the attachment on the ground that the provisions of Rule 5 had not been
fulfilled. If they felt prejudiced by non-compliance with the provisions of Rule 5, they
could have very well told the Court to give them an opportunity, after necessary orders
were passed under Rule 5, to be heard and to show cause (Mohammad Ali Ismail v.
Baldeo Singh; Badri Prasad v. Babulal; B. Prag Nath v. Mt. Indra Devi).3
Under Rule 6(1), therefore, any order directing attachment before judgment is appealable,
whether or not there has been a prior conditional attachment under Rule 5(3). But an
order refusing attachment would be appealable under Rule 6(2), only if there was a
prior conditional attachment under Rule 5(3), as would appear from the words “and the
property specified.....has been attached” in that sub-rule. An order refusing attachment
before judgment, in order to come within Rule 6(2), must be preceded by an order of
conditional attachment under Rule 5(3), and if not so preceded, would not be appealable
under Order 43. Rule 1(q) (R.S. Cambray and Co. (P.) Ltd v. Bishnu Banerjee).4
[For form of attachment see Form No. 7 App. F in Schedule I of this Code.]
7. Mode of making attachment.—
Save as otherwise expressly provided, the attachment shall be made in the manner
provided for the attachment of property in execution of a decree.
Case Cited
1. Rajender Singh v. Ramdhar Singh AIR2001SC2220; (2001)6SCC213.
COMMENTS
It is clear that for effecting attachment of property situated outside the local limits
of a Civil Court, the mode prescribed is that the order of attachment shall be sent to
the District Court within the local limits of whose jurisdiction the property is situate
and the District Court thereafter shall send the order of attachment to the subordinate
Court within whose jurisdiction the property is situated for effecting the attachment
(Rajender Singh v. Ramdhar Singh).1
Note.—For cross reference see Order XXI, Rules 47, 48, 49, 50, 51, 52, 53 and 54
of this Code.
8. Adjudication of claim to property attached before judgment.—
Where any claim is preferred to property attached before judgment, such claim shall
be adjudicated upon in the manner hereinbefore provided for the adjudication of
claims to property attached in execution of a decree for the payment of money.
ANNOTATIONS
Amendments
The Code of Civil Procedure Amendment
Act 1976 substituted Rule 8.
Effective Date of Amendment
The Code of Civil Procedure (Amendment)
Act, 1976 wef. 01.02.1977
Prior to Amendment
Prior to 1976 Amendment Rule 8 use to
read as under:
8. Investigation of claim to property
attached before judgment.– Where any
claim is preferred to property attached
before judgment, such claim shall be
investigated in the manner hereinbefore
provided for the adjudicated of claims
to property attached in execution of a
decree for the payment of money.
1. Subhash Bhimashankar Kalase v. State Bank of India AIR2005Bom165.
2. Satyamsetti Somaraju v. Ramisetti Naidu AIR2004AP87.
COMMENTS
Order 38, Rule 8 provides a provision for adjudication of claim to property attached
before judgment. Where any claim is preferred to property attached before judgment,
such claim has to be adjudicated upon in the manner provided for the adjudication
of claims to the property attached in execution of decree for the payment of money.
It is very clear from the provisions of Order 38, Rule 8 that the procedure to be
followed in the adjudication of claims under that rules is same as that provided by
Order 21, Rule 58 for adjudication of claims to property attached in execution of a
decree. In short, the claimant to the property attached before judgment has to show
that on the date of attachment, he had some interest or was possessed of the
property attached (Subhash Bhimashankar Kalase v. State Bank of India).1 In an
application filed under Order 38 Rule 8 Code of Civilo Procedure, to set aside or
raising of order of attachment, the inquiry is to be held as provided in execution
proceedings. Such an inquiry is to be conducted like a Trial in a regular suit. The law
provides for a regular appeal over any order passed in a claim application (Satyamsetti
Somaraju v. Ramisetti Naidu).2
Note.—For cross reference see Order XXI, Rule 58 of this Code.
9. Removal of attachment when security furnished or suit dismissed.—
Where an order is made for attachment before judgment, the Court shall order the
attachment to be withdrawn when the defendant furnishes the security required,
together with security for the costs of the attachment, or when the suit is dismissed.
Case Cited
1. Abdul Hamid v. Karim Bux, AIR 1973 All 67 (FB); Gangappa v. Boregowda, AIR 1955
Mys 91 (FB) ; Madan Lal v. Ram Prakash, AIR 1963 MP 329 ; Kuma Ji v. Kalwa, AIR
1958 AP 216.
2. N. R. Thiruvengadam v. Kalinnan, AIR 1984 Mad 112.
3. N.R. Thiru Vengadam v. Kaliannan. MANU/TN/0194/1984, AIR 1984 Mad 112; Madigiri
Kiran Kumar v. Swarnagiri Subbamma AIR2004AP104.
4. Abdur Rahman v. Amir Sharif, AIR 1918 Cal 39.
5. Madanlal Chhotelal v. Ramprakash Ghasiram MANU/MP/0109/1963: AIR 1963 MP 329.
6. Thampi Muhammad Abdulkhadir v. Padmanabha Pillai Paramesnwaran Pillai, AIR
1952 Tav-Co 414 (FB).
COMMENTS
On dismissal of the suit whether on merits or in default the attachment before
judgment ceases automatically even if no specific order is made to this effect and
it does not revive on restoration of the suit to its original number (Abdul Hamid v.
Karim Bux; Gangappa v. Boregowda; Madan Lal v. Ram Prakash; Kuma Ji v. Kalwa).1
[Also see Rule 11A.] Where the suit is pending and the conditional attachment is
made absolute, the application for removal of attachment by furnishing security still
can be maintained (N. R. Thiruvengadam v. Kalinnan).2 [For fate of attachment order
when the suit decreed see Rule 11 of this Order.] The remedy provided under Order
38 Rule 9 is in the nature of an independent remedy and can be availed of by a
defendant even after an order for attachment under Order 38 Rule 6(1) has been
made. The provision made under Order 38 Rule 9 is a beneficial one intended to give
an opportunity to defendants who despite an order of attachment passed against
them, are in a position to offer security for safeguarding the claims of plaintiff made
in the suit and pray for a withdrawal of the order of attachment made already either
over their other assets or moneys. Where the defendant filed an application under
Order 38 Rule 9 praying for the raising of the attachment, which was already allowed,
after hearing the defendant and had become final in the sense that the defendant had
not preferred any appeal against the order, the application would be maintainable (N.R.
Thiru Vengadam v. Kaliannan; Madigiri Kiran Kumar v. Swarnagiri Subbamma).3
In order to avoid all possible doubt and difficulty, the Court should when dismissing
a suit make an order under Order 38, Rule 9 withdrawing the attachment before
judgment. But even if an order directing withdrawal of attachment is not made, on the
dismissal of the suit, the attachment before judgment ceases to exist, and it does
not revive when an appeal is lodged (Abdur Rahman v. Amir Sharif).4 The attachment
before judgment which terminates on the dismissal of the suit by the trial Court, is
not automatically revived by the fact that the appellate Court reversing the dismissal
of the suit passes a decree in favour of the attaching plaintiff (Madanlal Chhotelal v.
Ramprakash Ghasiram).5
However, there is a conflict of opinion between various High Courts and it is also
stated that an attachment before judgment which ceased to be in force with the
dismissal of the suit will revive when the decree dismissing the suit is subsequently
reversed and a decree in the plaintiffs favour is passed, even by the same court or
by a superior Court and this revival will be in force from the date on which the
attachment before judgment is effected as provided for in the Civil Procedure Code
(Thampi Muhammad Abdulkhadir v. Padmanabha Pillai Paramesnwaran Pillai).6
10. Attachment before judgment not to affect rights of strangers, nor
bar decree-holder from applying for sale.—
Attachment before judgment shall not affect the rights, existing prior to the attachment,
of persons not parties to the suit, nor bar any person holding a decree against the
defendant from applying for the sale of the property under attachment in execution
of such decree.
Case Cited
1. Hamda Amma v. Avadiappa Pathar, MANU/SC/0521/1991: (1991) 1 SCC 715;
Adinarayana v. S. Gafoor Sab AIR2004AP377.
2. S. Noordeen v. V.S. Thiru Venkita Reddiar, MANU/SC/0341/1996: AIR 1996 SC 1293:
(1996) 3 SCC 289.
3. Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan (1990) 3 SCC
291, Paparaju Veeraraghavayya v. Killaru Kamala Devi AIR 1935 Mad 193, Vecrappa
Thevar v. C.S. Venkataramma Aiyar AIR 1935 Mad 872, Angu Pilliai v. M.S.M.
Kasiviswanathan Chettiar AIR 1974 Mad 16, Rango Ramachandra v. Gurlingappa
Chinnappa AIR 1941 Bom 198, Yashvant Shankar Dunakhe v. Prayarji Nurji Tamboli
AIR 1943 Bom 145, Kochuponchi Varughese v. Quseph Lonan AIR 1952 Travancore-
Cochin 467, Purna Chandra Basak v. Dautai Ali Mollah AIR 1973 Cal 432, Atul Anand
v. Nanak Food Industries 132 (2006) DLT 481; Overruled Mohinder Singh v. Nanak
Singh AIR 1971 P & H 381.
COMMENTS
Order 38, Rule 10 also makes it clear that the attachment before judgment shall not
affect the rights, existing prior to the attachment, of persons not parties to the suit.
The Court also held that when the property belonged to the judgment-debtors and
when the sale-deed had already been executed by them prior to the attachment before
judgment and only registration remains, then neither the attachment before judgment
nor a subsequent attachment or Court sale of the property would confer any title by
preventing the relation back. The fact that the document of sale had not been registered
only after the attachment makes no difference. Even an unregistered document can
be received as evidence for purposes mentioned in the proviso to Section 49 of the
Registration Act (Hamda Amma v. Avadiappa Pathar; Adinarayana v. S. Gafoor Sab).1
The attachment before the judgment is an encumbrance preventing the owner of the
property to create encumbrance, sale or create charge thereon. Attachment before
judgment does not create any right, title or interest, but it disables the judgment-
debtor to create any encumbrances on the property (S. Noordeen v. V.S. Thiru Venkita
Reddiar).2 The agreement for sale indeed creates an obligation attached to the ownership
of property and since the attaching creditor is entitled to attach only the right, title
and interest of the judgment- debtor, the attachment cannot be free from the obligations
incurred under the contract for sale. Section 64 Code of Civil Procedure no doubt
was intended to protect the attaching creditor, but if the subsequent conveyance is
in pursuance of an agreement for sale which was before the attachment, the contractual
obligation arising therefrom must be allowed to prevail over the rights of the attaching
creditor. The rights of the attaching creditor shall not be allowed to override the
contractual obligation arising from an antecedent agreement for sale of the attached
property. The attaching creditor cannot ignore that obligation and proceed to bring
the property to sale as if it remained the absolute property of the judgment-debtor
(Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan; Paparaju
Veeraraghavayya v. Killaru Kamala Devi; Vecrappa Thevar v. C.S. Venkataramma
Aiyar ; Angu Pilliai v. M.S.M. Kasiviswanathan Chettiar; Rango Ramachandra v.
Gurlingappa Chinnappa ; Yashvant Shankar Dunakhe v. Prayarji Nurji Tamboli;
Kochuponchi Varughese v. Quseph Lonan; Purna Chandra Basak v. Dautai Ali Mollah
; Atul Anand v. Nanak Food Industries; Overruled Mohinder Singh v. Nanak Singh.).3
11. Property attached before Judgment not to be re-attached in execution
of decree.—
Where property is under attachment by virtue of the provisions of this Order and a
decree is subsequently passed in favour of the plaintiff, it shall not be necessary
upon an application for execution of such decree to apply for a re-attachment of the
property.
Case Cited
1. Pushpmala Jain v. Bank of Baroda, AIR 1990 P&H 28.
2. Vareed Jacob v. Sosamma Geevarghese (2004)6SCC378: AIR2004SC3992.
3. Smt. Pushpmala Jain v. Bank of Baroda AIR1990P&H28.
COMMENTS
The moment suit is decreed, the attachment before judgment operates as attachment
in execution of the decree (Pushpmala Jain v. Bank of Baroda).1 Under Order 38 Rule
11 it is further provided that when the suit is decreed the courts will continue attachment
before judgment and the plaintiff is not required to re-apply for attachment (Vareed
Jacob v. Sosamma Geevarghese).2 A bare reading of this provision leads to its
reasonable construction to the effect that the moment the decree is passed in favour
of the plaintiff, the attachment before judgment shall operate as attachment in execution
of the decree and it shall be operative as such from the date of the decree and not
before it (Smt. Pushpmala Jain v. Bank of Baroda).3
11A. Provisions applicable to attachment.—
(1) The provisions of this Code applicable to an attachment made in execution
of a decree shall, so far as may be, apply to an attachment made before
judgment which continues after the judgment by virtue of the provisions
of Rule 11.
(2) An attachment made before judgment in a suit which is dismissed for
default shall not become revived merely by reason of the fact that the
order for the dismissal of the suit for default has been set aside and the
suit has been restored.
Note.—For cross-reference see Order XXI, Rules 57 and 58.
ANNOTATIONS
Amendments
The Code of Civil Procedure Amendment
Act, 1976 inserted Rule 11A.
Effective Date of Amendment
The Code of Civil Procedure (Amendment)
Act, 1976 wef. 01.02.1977
High Court Amendment
Madras
In Order XXXIX, after Rule 11A, insert
the following rule, namely:
“11B. Order of attachment to be
communicated to the registering
officer: Any order of attachment passed
under rule 5 or 6 of this order and any
order raising the attachment passed
under Rule 9 of this order shall be
communicated to the registering officer
within the local limits of whose
jurisdictions the whole or any part of
the immovable property completed in
such order, is situate.”
[Vide Tamil Nadu Government Gazette,
Pt. III, Sec. 2, da
No comments:
Post a Comment