Judicial encroachment
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This article is written by Abhilasha Vatsal, pursuing Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho.com.

Introduction

Various interim orders are enumerated under the Code of Civil Procedure, 1908 (CPC), which are temporary orders given during the suit’s pendency so as to safeguard the subject matter of the suit wherein Order 38 Rules 5-13 exclusively concerns the attachment before judgement. Like arrest before judgement, the court may order attachment before judgement in peculiar circumstances. 

Attachment of property before judgement is done for the primary objective of preventing the defendant’s attempt to defeat the decree’s realization which is passed in favour of the plaintiff. 

In Sardar Govindrao vs Devi Sahai, it was observed by the Apex court:

An order for attachment before judgement is given in cases where the plaintiff’s application is successful in convincing the court that the defendant had intended either to delay any decree’s execution or obstruct it, or is about to give away the whole or any part of his property from the Court’s local limits of the jurisdiction. The only motive behind such order of attachment before judgement is to render satisfaction to the plaintiff that his decree if made would be satisfied. In some way or the other it is a guarantee against decree becoming infructuous for property’s availability from which the plaintiff can satisfy the decree. This case has highlighted the grounds on which the court, if satisfied, at any stage of the suit, may direct the party to either pay security of the amount specified in the order, to bring about the property at court’s disposal or such property’s value or to show reasonable argument as to why the party should not furnish the security.

On court’s such order if the party fails to satisfy the conditions of submitting security, within the time fixed by the court, then it might be ordered by the court for the specified property to be attached, as per Rule 6(1). Execution proceeding’s provision under order 21 applies to attachment of property before judgement.

However, this ordinary remedy must be used sparingly and with proper care and caution so that it does not act as an oppressing machinery. In Hari Sankar v. Bhoori Devi, the court held that in order to ascertain if such order has to be made, two conditions should be satisfied:

  1. That an attempt of disposing of whole or any part of the property is being made, and
  2. Intention behind such disposal is to obstruct or delay the decree’s execution passed that might get passed in the other party’s favour. 

In the case of Raman Technology & process engg. Co v. Solanki Traders, it was stated by the Supreme Court that since attachment before judgement is a drastic power, it should not be exercised automatically. Order 38 Rule 5’s aim is not to change the form of unsecured debt to a secured debt. It must be ensured that the unscrupulous plaintiff is not obtaining this order for the furtherance of his intentions to compel the defendant with threats of attachment for out-of-court settlement.

In a watershed case of Premraj Mundra v. Mohd. Maneck Gazi, several principles were laid down with respect to order of attachment of property before judgement, some of them were:

  1. Where a property’s small portion, that belongs to the defendant is being disposed of, it cannot be automatically inferred that the alienation is necessarily to hurdle the claim of the Plaintiff. 
  2. A mere accusation that the property is being sold by the Defendant is not enough and particulars must be stated. 
  3. Before the suit is filed, prior transactions could be taken into consideration, but attachment’s main aim is to preclude the Defendant from alienating or transferring the property in future.
  4. Simply transfer of property is not sufficient as one can’t be precluded from exercising his rights with respect to the property only because a suit has been filed. It must be apparently shown by the Plaintiff that such a transfer was made in order to defeat or delay the claim of the Plaintiff. An inference can then be drawn by the court as to the Defendant’s intentions behind the disposal of the property, if any. The court would examine the parties’ conduct before the suit was filed and the circumstances surrounding. 
  5. Defendant’s insolvent circumstances or financial crisis can be a pertinent circumstance, but it should not be the sole reason. 
  6. Strictest alertness should be maintained in the case of running businesses, and just because the turnover is meagre, is not sufficient. 
  7. Taking away properties outside court’s jurisdiction is not sufficient, however, if the Defendant, after receiving the notice of Plaintiff’s claim, suddenly begins removal of his properties outside the appropriate court’s jurisdiction.
  8. There lies no responsibility on the Defendant to administer his affairs with extra care.
  9. In cases where the property is sold as per benami transfers or if it is undervalued, it can be indications of the fact that the Defendant’s intention is to defeat the plaintiff’s claim. Nevertheless, the court must still ascertain the evidence with cautiousness and should not rely on mere allegations. 
  10. If such circumstances lie, then it would be a question of fact which should be proved to the court’s satisfaction. It would not be justified on court’s part to issue an attachment order, or seek to furnish security only on a mere thought that no harm would be caused to the Defendant and it shouldn’t be at the prejudice of the Defendant. 
  11. The submissions of the applicant’s affidavits wherein contentions are stated must not be indistinct and should be properly verified. It should fulfill the essential ingredients of an affidavit with the source disclosed and should mention the rounds for believing the claim. 

Conditional attachment: A notice is not necessary under these cases. However, an opportunity lies with the Defendant to show cause against attachment of his property. It is only after Defendant has been given an opportunity to be heard that a final attachment order is passed. Therefore, this is not an attachment by itself as it will be ineffective until attachment is carried out in accordance with the procedure laid down in the code.

Mode of attachment

It will be in a similar way as the attachment of property under the execution of a decree.

Exemption from attachment:

In the case of Ratan Lal And Anr. vs S.B.B.J. And Ors.Agricultural produce of agriculturists cannot be attached or produced by court’s order. 

Determination of property’s attachment

The circumstances of determining attachment order, under Civil Procedure Code, 1908 are:

  1. wherein security is paid by the defendant,
  2. Wherein attachment is withdrawn by the attaching creditor,
  3. In case of suit’s dismissal,
  4. Satisfaction of the decree,
  5. Where a decree has been set aside or overturned,
  6. Wherein the property has been released by the court,
  7. In cases where application for execution has been dismissed, ensuing the attachment of property,
  8. After getting a decree, the decree-holders stalls to do whatever he is required to. 

Effect of attachment

Attachment order is a guarantee for fulfilling a decree’s fruits which might become infructuous for want of property. Furthermore, an order of attachment is appealable and can be revised by the High Court.

Withdrawal of attachment

In case Defendant pays security, an order of attachment must be withdrawn. Moreover, when the suit is dismissed, or security is paid then also the order of attachment is withdrawn.

Attachment on insufficient grounds

On Defendant’s application being made against the court’s order for attachment on insufficient grounds claimed by the plaintiff or when Plaintiff’s suit fails subsequently, and as per the court there lied no sufficient grounds for institution of such claim, then the Plaintiff may be ordered to pay an amount, not exceeding fifty thousand rupees, to make good the loss of reputation and expense to him. In the case of wrongful attachment, a suit can be instituted to claim damages.

Conclusion

It vividly appears from the above discussion, that the objective behind ordering attachment before judgement is to prevent the defendant’s attempt to defeat getting the fruits of the decree passed in favour of the plaintiff. The code enumerates provisions relating to attachment of property before judgement under Order 38 Rule 5. Various case laws illustrate the diversity of cases wherein such order can be passed by the Court. 

References

  1. (1975) 77 PLR 133
  2. (2008) 2 SCC 302
  3. RLW 2004 (1) Raj 306, 2003 (4) WLC 242
  4. Ananda v. Shariatullah, AIR 1942 All 360

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