15 February 2020
Dear Experts, Plaintiff filed a suit against the Defendant for recovery of an amount of rupees 5 lakhs basing on a ledger account. In this, the Plaintiff also seeking attachment before judgement, on the Machinery of the defendant company. Could it be possible, such an attachment from the court. So suggest me, how the defendant, defends this issue. Thanks.
15 February 2020
Dear Sir, Depending upon the facts of the case your advocate can come to the conclusion how to protect interest. The defendant is also at liberty to offer otherwise security for the said suit claim without attaching the machinery.
15 February 2020
As you are defendant in the case and an application under Order 38 Rule 5 of CPC read with section 151 of CPC stands filed by the plaintiff seeking attachment of the machinery of defendant during the pendancy of the suit so you need to raise all questions over the maintainability of the suit, having no hope of its success on the valid grounds to be put by you and pray to dismiss the said application by filing your reply. Even if the court is adamant to grant the relief, offer to give security of banker for that amount in lieu of the attachment of running machinery.
22 February 2020
In the case of an application filed for attachment before judgment in a suit for recovery of money, the property to be attached and which is the subject matter of such application is not the property involved in the suit and it cannot be termed as the suit property as the suit is one for recovery of money. The object of Order 38 Rule 5 CPC in particular, is to prevent any defendant from defeating the realisation 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 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 CPC. 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.
5. The power under Order 38 Rule 5 CPC is 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 utilise the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged..
6. .. A plaintiff should show, prima facie, that his claim is bonafide and valid and also satisfy the court that the defendant is about to remove or dispose of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him, before power is exercised under Order 38 Rule 5 CPC. Courts should also keep in view the principles relating to grant of attachment before judgment. (See Premraj Mundra v. Md. Manech Gazi [AIR 1951 Cal 156] for a clear summary of the principles).
You may refer to Andhra High Court Y.Kesavulu vs T.Kalavathi on 1 June, 2016 Civil Revision Petition nos.4915 of 2015 and batch For further clarifications in this regard