There are times and situations which comes before the Court during the
proceeding of the suit when the Court has to make certain decisions which do not
have the life-long effect as it depends on the facts of the case either the time
is fixed by Court or until the final judgement is passed as it remains in
existence by the discretion of the Court.
As per section 94(e) of the Code of Civil Procedure, the Court has the power to
make interlocutory orders after the plaintiff files the suit and before the suit
is finally disposed off. The Court can ask for the attachment of property,
commissions, certain payment to me paid or temporary injunctions as it is a
legal process to ensure the satisfaction of the judgement.
Though we hear attachment of property before judgement every day, there are
several intricacies also which we have to understand in detail. The attachment
of the property before judgement is covered under Order 38 rule 5 of the Civil
Procedure Court, 1908. It is important to understand the leading cause for which
a person is called for the attachment of property before judgement. The primary
purpose of an attachment before the judgement is to enable the plaintiff to
dispose the amount of decree if one is eventually passed in favour of them.
The amount is ultimately made from the property of the defendant as held in the
case of
Raman Tech And Progress Engineering Corporation v. Solanki Traders
[1]. The sole jurisprudence behind Order38 rule 5 is to protect the interest of
the plaintiff against the loss that can arise from the defendant if he sells,
and that is pending suit property. An attachment before judgement is in the
nature of an interlocutory order.
The division bench of Hon'ble High Court of Andhra Pradesh held that the
attachment of the property should be specific and clear in its purpose which was
held in the case of
Gurunadha Rao v Gamini Krishnayya [2], Lordship
Dawson-Miller C.J stated that:
the power given to the Court to attach a defendant property before judgement, is
never meant to be exercised lightly or without clear proof of the existence of
the mischief aimed at in the rule which was later on supported by the judgement
Shivaraya and Others v Sharnappa[3] and others.
Later on, the Court said the that the interlocutory orders have to be passed in
the exercise of the Court sancillary powers which was followed by the Court in
case of
Bankim Chandra and Others v Chandi Prasad [4] and
TavvalaVeeraswamy's v PulimRamanna [5]case also.
The Court can at any time of the suitask for the attachment of property for the
satisfaction of the Court by affidavit so that the defendant with intention does
not delay the process of the Court or to delay the process of execution of the
degree if the Courtpasses an order against the defendant or is about to abscond
the local jurisdiction of the Court or try to leave the country after disposing
of the said property against which the Order has been passed.
The grounds for the attachment of the property before the judgement is passed
are similar. However, the only difference is the property which is attached by
the defendant which must not be tempered, and there should not be any prejudice
caused to the plaintiff if the Order is passed in his favour by the Court. This
attached property by the Court before judgement is appealable and revisable
under rule 2,3 and 6 of order 39.
Since the attachment of property before judgement is itself are of serious
nature. However, still, the Court has to check whether two precedents conditions
are satisfied to pass such an order.
The Court should have reason to believe that thesuit filed by the plaintiff must
be bona fide and his cause of action must be prima facie, and, another condition
the Court must have reason to believe that the defendant will remove himself or
sell the aforesaid property from the ambit of the power of the Court if this
extraordinary power of the attachment of the property is not exercised. There
are some exemptions and circumstances, also where the attachment of property is
not allowed by the Court.
As in the case, where the unsecured debt is converted into the secured debt or
for ensuring the easy execution of the decree. Section 60 of C.P.C. brings under
its purview property that can be attached before the judgement and the property
that cannot be attached. All sealable property can be attached i.e. lands,
goods, money, cheques, promissory notes, government securities, buildings debts
and all other belongings of the judgement debtor may be attached and sold in
execution of a decree against him by the Court.
All other property can also be attached by the Court which does not completely
belong to the debtor, but the debtor has a disposing power over it which can be
exercised by the debtor for his benefit. The decree, as mentioned in section 60
of C.P.C., is only a monetary decree and not a mortgage decree. As per section
60(1) of the C.P.C. includes the property that cannot be attached before the
judgement, it includes an exemption on necessary apparel, bedding, house of
agriculturalists, wages, pensions, right of future maintenance, salaries etc.
The Court cannot order for the attachment of any agriculture production which is
in possession of the agriculturist as held in case of
Pellur Venkatasubbamma
V. Devvur Narayana Reddi[6]the Court dismissed the appeal filed by the
plaintiff and said that nothing in this Order should be deemed to authorize the
plaintiff to apply for any attachment of the agriculture produce by the
agriculturist. The same principle is later on followed in the case of
Land
Acquisition Officer (S.D.C.) Soma alia Project Office, Rajampet Vs. Y.Vijaya
Kumar [7].
Requirements of attachment
It is a well-settled fact that petitioner having a just or valid claim or a
prima facie case will not entitle the plaintiff to an order of attachment before
judgement unless the plaintiff also establishes that the defendant is trying to
remove or dispose of his assets with the intention of defeating the decree that
magistrate has passed.
Equally well settled in the position that even where the
defendant is removing or disposing of his assets an attachment before judgement
will not be issued if the plaintiff will not be able to satisfy that he has a
prima facie case. The provision Under order 38, rule 5 of C.P.C. is a drastic
and extraordinary power.
Such power should not be exercised mechanically for the
asking. It should be used sparingly and satisfy in accordance with the rule. Any
attempt by a plaintiff to utilize the provision of order 38 rule 5 as leverage
for coercing the defendant to settle the suit claim should be discouraged. A
defendant is allowed to deal with his property because the suit is filed or
about to be filed against him.
Shifting of property from one place to another or
removal of machinery to other premises by itself is not a ground for granting
attachment before judgement. The Court can order for the attachment of the
property, which is not in his jurisdiction. Section 136 of C.P.C. envisages that
the Court, with his discretion, can make an order of attachment and send to the
district court in whose jurisdiction that property is situated. There is no such
in the law which probate the Court for attaching the property which does not lie
in the territories of his jurisdictions a rule in the case of
Durbhaka Venkatasubramanya Sharma and another Vs. State Bank of India, Banking
corporation[8].
Principles relating grant of attachment of property
The Court would not be justified in issuing an order before judgement, or for
security merely because the Court thinks that no harm would not be done. An
allegation that the defendant was selling off his/her/their properties is not
sufficient for the Court to order an attachment of property.
The power to attach
the property before judgement should not be exercised mechanically or merely for
the asking as its an extraordinary power covered under Order 38 rule 5 of C.P.C.
and its purpose isn't tochange an unsecured debt into a secured debt. 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.
The Plaintiff must prove
that the transfer is intending to delay or defeat the plaintiff's claim. Its the
duty of the plaintiff to show that his claim is bonafide and also satisfy the
Court that the defendant is trying to dispose of the property with wrongful
intention of obstructing or delaying the process of execution of any order that
may be passed against the defendant before power is exercised under order 38
rule 5 of C.P.C.
The Court should also keep in view the principle relating
factors before granting the permission of attachment of property before the judgement as a rule in case of
Prem Raj Mundra v Md. Maneck Gazi[9] that the
attachment before judgement is considered as very harsh remedy as it prohibits
the defendant from dealing with his property before the final resolution of the
overall dispute is passed. The Court must look to the conduct of the parties
immediately before suit, to examine the surrounding circumstances and draw an
inference.
The mere removal of properties outside the jurisdiction is not enough
but where the defendant with notice of the plaintiff's claim suddenly begins disposingof his properties outside the jurisdiction of the appropriate Court
without any other satisfactory reason as adverse inference may be drawn against
the defendant.
Therefore, the attachment before a judgement must be to prevent
justice transfer or alienation. The Court should be satisfied that the defendant
is about to dispose of whole or part of the property and that disposal is
intending to obstruct or delay the execution of the decree. Before passing the
Order for the attachment of the property before any judgement is given so that
there should not be any prejudice caused to both the parties.
When attachment before judgement can be ordered
As discussed in order 38 rule 5 that before exercising power under the said
rule, the Court should be satisfied that the claim by the plaintiff is bonafide
and there is a reasonable chance of Order being passed against the defendant. If
the plaintiff fails in proving the wrongful intention of the defendant, then the
Court will not go further and will not examine that whether the interest of the
plaintiff is protected or not by exercising power under Order 38 Rule 5 of C.P.C.
It is a well-settled fact that just having a valid claim will not entitle the
plaintiff to an order of attachment before the judgement as it cause prejudice
with the other parties, it is essential to establish that the defendant with
wrongful intention is disposing off his property for defeating the decree that
may be passed against him. Therefore it is essentialto prove by the plaintiff in
the Court, the wrongful intention of the defendant to invoke the Order of
attachment before the judgement is being passed.
Modes/ Procedure of Attachment
The first step for the attachment of property is to issue a prohibitory order to
the judgement debtor and the public generally, this Order will restrict the
judgement debtor for disposing of the attached property or transferring it. The
judgement debtor is also bound to attend the Court on the date prescribed by the
Court for deciding the terms of the proclamation of sale.
Generally, for the
immovable property two copies of the prohibitory Order is sufficient for the
attachment but, if the land is attached from which the revenue is paid to the
government three copies of prohibitory is required to make the valid attachment
of the property. Both the detail must be given in the schedule attached with the
Order and details provided in the schedules of the property given in warrant
should be same.
Later on, this copy is to be submitted to the Nazir and Nazir
will then endorse the summons and return it to the Court within the stipulated
time. Where any individual deputed by the Nazir finished the above work of
attachment of property, a different report expressing the way wherein, the day
and hour at which he did such act must be attached. The customary practice will
be carried out for the proclamation of the Order.
The copy of it will be affixed
on the conspicuous part of the property and the Courthouse[10]After this, the
reader has to record a note stating the fact that all the legal formalities have
been followed and have been complied with it. The presiding officer will take
charge to ensure that the report given does not have any misinformation in it.
The Court should ensure that all the legal formalities have been completed to
prevent any sort of wrongdoing as it might affect the parties[11].
The civil
Court also applies appropriate consideration in the process of attachment of
property and take necessary action if required. No property can be declar to be
attached until the court order for the attachment of the property as held in the
case of
Muthiah Chettiar v Palaniappa Chettiar[12] where the Court says that the
things prescribed in the code have to be followed.
The Court says that it is
important to have an order of attachment by the Court and in the execution of
that order formalities prescribed therein have to be complied with so that the judgement debtor could not alienate the property and the plaintiff is not at any
loss. When the property attached is a movable property but not agriculture
produce then that property is seized by the attaching office which keeps the
attached property custody.
But, it the property that is seized by the officer is
perishable, or if the cost of keeping it will exceed the value then the
attaching officer can sell it immediately, and if the officer fails to sell off
the property then he can hand over the attached property custody to either of
the parties and that party will be liable to produce such property before the
Court and if any loss or damage caused to the attached property then the
custodian will be responsible for that loss occurred.
Whereas if the attached
property is agriculture produce, then the copy of the warrant of attachment can
be affixed on the property on which that crop is grown. It is the duty of the
Court made in the application the time at which that crop is being cut or
gathered if the Court attaches growing crops. The judgement debtor should make
every essential step for preserving it and if in case he fails to do so, then
the decree-holder can carry out these needful steps and can recover the expenses
from the judgement debtor.
As in case of
Krishnamukhlal v Bhawan,[13]it was
decided by the Court that the attachment of agriculture land is invalid as Order
21 rule 54 of C.P.C. would not prevent the Court for selling of the properties
as the law doesn't state that an immovable property can't be sold in execution
of a decree without attaching it.
Removal and determination of attachment
The property attached before the judgement can be deemed to be withdrawn in the
following cases.
- the decreed amount, all cost, charges and expenses from the attachment
of property are paid into the Court, or
- Satisfaction of the decree is made through the Court or certified to the
Court, or
- the order is set aside or reversed.[14]
In the case of immovable property, the withdrawal of attachment can be
proclaimed by the judgement debtor, and copy of that can be attached in a
conspicuous part of the property. In the case where the Court attaches the
property and later on court order for dismissing such an execution, then the
Court will direct the status of the attachment, and in case court fails to give
a specific direction than it is implied that the attached property has been
ceased.
Private alienation of property after attachment and before the judgement
Attachment of property creates no changes as it only confers a right on a
decree-holder to keep the attached property in the custodyof theCourtas per the
law. The rights of the judgement debtor to sell or alienate of the attached
property is taken by the Court, and it does not confer any title on attaching
the creditor. As per section 64 of C.P.C.
If the judgement debtor still
alienates the attached property, then such transfer is considered void by the
Court as held in the case of
HamdaAmmal Vs. Avadiappapathar[15] if the Court
makes any attachment, then any private transfer or delivery of the attached
property or any interest therein and anypayment to the judgementdebtor of any
debt shall be void as against all claims enforceable under the attachment.
The
main objective of this section is to prevent the fraud caused by the judgement
debtor. The attachment of the property should be done in accordance with the
procedure prescribed by the C.P.C. In case ofimmovable property, a mere order of
attachment is not sufficient to render subsequent transfer invalid must be made
in a manner as described in C.P.C. under Order 21 rule 54. But, this section
does not apply in the case where the agreement of alienation was already done
before the attachment as it does not affect the rights of the persons that are
not parties of the suit.
The court rule in the case of
J. Mathivanan and Ors.
vs. Tamil Nadu Khadi Village Industries Board and Ors[16] that attachment before
the judgement shall not affect the rights of the owner have prior to the
attachment, as it will be unfair with the parties that are not the part of the
suit.
The same question was arise in the case of
Vannarakkal Kallalathil Sreedharan Vs. Chandramaath Balakrishnan
[17] and in
Paparaju Veeraraghavayya vs. Killaru Kamala Devi [18] that whether the agreement
of sale entered before the attachment of property by a judgement debtor will be
valid or not. The Courtheld that agreement to the sale wouldve void if it is
done with an intention to fraud the plaintiff.
Difference between attachment before judgement and attachment after judgement
There is a slight difference between the attachment of property after and before
judgement as of the property which is attached by the Court before the Court
does not reattach judgement after the judgement. The attachment made by the
Court before judgement is not an attachment for enforcement of the decree as it
is a step for preventing the debtor from disposing of the property or delay in
the process of the Court.
As in the case of
Parur Central Bank Ltd. v A.C
Chavko[19](1989) and
S.P. Vasakumar Pillai v The Motor Accidents Claims
[20](2008) it was decided by the Court that an attachment made by the Court
before the judgement act as the security of the Court feels that defendant is
trying to sell his property with the intention of fraud with the plaintiff. The
attached property can later on used to satisfy the decree, in case the order
goes in favour of the plaintiff.
Whereas, an attachment made after the judgement
is made for the immediate purpose for concealing the degree into execution as
held in case of
Sardar Govindrao Mahadik and Anr v Devi Sahai and Ors[21] that
the attachment of property after judgement does not defeat the rights of the
defendant as the Order has already passed against him by the Court.
Conclusion
The civil procedure code includes lots of procedures and modes of attachment of
different kinds of property. The attachment is the first step, and then the sale
is executed after the attachment but in few cases the property can be sold
without the attachment, which is not irregular. Still, the right procedure is to
be followed. Section 65 to 73 and Order 21 Rules 64-94 deals with the sale of
the property. The Court appoints the officer to sell the property for the
execution of the decree.
All the procedure dealing with the attachment of
property is covered under Order 21 of the Code with all its aspects. The
decision of attachment of the property by the Court in favour of the plaintiff
is a drastic action, and Court must take this decision with due care and
defendant should also be allowed to prove the cause why the Court should not
take his right to deal with his property within the time given by the Court.
If
he fails to show then, the Court can order for attachment of property with a
reason to believe that the judgement debtor with wrongful intention is trying to
dispose himself or his property from the jurisdiction of the Court before giving
Order of attachment under Order 38 rule 5 of C.P.C.
Therefore, it is clear that
all the essential requirements for attachment must be proven in the Court as
pointed out in the decision of
Renox Commercials Limited v Inventra Technologies
private limited [22]that the defendant is trying to alienate the property or his
about to remove the property from the Court's jurisdiction with a wrongful
intention of causing an obstruction or trying to delay the execution of the
decree passed against the defendant.
For an order of attachment of property, it
is also important for the plaintiff to prove his plea is bonafide and the
defendant is trying to defraud him with his cause of action as held in case of
R.Ramesh v R.Ranveender[23]2014.
End-Notes:
- Raman Tech And Progress Engineering Corporation v. Solanki Traders(2008)
2 SCC 302 (India)
- Gurunadha Rao v GaminiKrishnayyaAIR (1951) Cal 156 (India)
- Shivaraya and Others v SharnappaAIR 1968 Mysore 283 (India)
- Bankim Chandra and Others v ChandiPrasad AIR 1956 Pat 271(India)
- TavvalaVeeraswamy's v PulimRamanna(1935) 68 MLJ 444 (India)
- PellurVenkatasubbamma V. Devvur Narayana Reddi(LQ 1938 HC O383)(India)
- Land Acquisition Officer (S.D.C.) Soma alia Project Office, Rajampet Vs.
Y.Vijaya Kumar2010 (1) ALT 371(India)
- DurbhakaVenkatasubramanya Sharma and another Vs. State Bank of India,
Banking corporation1996 (4) ALT 1028(India)
- Prem Raj Mundra v Md. Maneck Gazi AIR 1951 Cal 156(India)
- Civil Procedure Code 1908, O.21 R.54(2)(India)
- Civil Procedure Code 1908, O.21 R.90(India)
- MuthiahChettiar v PalaniappaChettiarAIR 1928 PC139(India)
- Krishnamukhlal v BhawanAIR 1974 Guj.L(India)
- Civil Procedure Code 1908, O.21 R.55(India)
- HamdaAmmal Vs. AvadiappapatharMANU/SC/0521/1991(India)
- J. Mathivanan and Ors. vs. Tamil Nadu Khadi Village Industries Board and
OrsMANU/TN/7593/2018(India)
- VannarakkalKallalathilSreedharan Vs. Chandramaath Balakrishnan
MANU/SC/0460/1990(India)
- Veeraraghavayya Vs. Killaru Kamala Devi ANU/TN/0031/1934(India)
- Parur Central BankLtd. v A.C ChavkoC.R.P. No. 425 of 1989(India)
- S.P. Vasakumar Pillai v The Motor Accidents ClaimsWP(C).No.21297 of 2008 (I)(India)
- Sardar GovindraoMahadik and Anr v Devi Sahai and Ors1982 AIR 989,1982 SCR
(2) 186(India)
- Renox Commercials Limited v Inventra Technologies private limitedAIR 2000
Mad.213 (India)
- R.Ramesh v R.RanveenderC.M.A.No.2241 of 2013(India)
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