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S. Sidharth versus P. Lalitha Kumari & Others


Company & Directors' Information:- R SIDHARTH & COMPANY (INDIA) PVT LTD [Strike Off] CIN = U17111WB1991PTC051089

    A. No. 6831 of 2010 in C.S. No. 969 of 2010

    Decided On, 21 January 2014

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE R. SUBBIAH

    For the Applicant: P. Subba Reddy, Advocate. For the Respondents: T. Srinivasaraghavan, Advocate.



Judgment Text

(Prayer: The present application has been filed under Order 14 Rule 8 of O.S.Rules r/w Order XXXVIII Rule 5 C.P.C to direct the respondents / defendants to furnish security worth about Rs.81,40,000/- (Rupees eighty one lakh and forty thousand only) failing which, to issue an order of attachment of the schedule mentioned property before judgment and copy of receipt to be forwarded through the District Munsif Court, Chengalpattu in respect of 'B' schedule of property.)

R. Subbiah, J.

1. The present application has been filed to direct the respondents / defendants to furnish security worth about Rs.81,40,000/- (Rupees eighty one lakh and forty thousand only) failing which, to issue an order of attachment of the schedule mentioned property before judgment.

2. The applicant is the plaintiff and the respondents are defendants in the suit in C.S.No.969 of 2010.

3. The case of applicant as could been from the affidavit filed in support of the said application, in nutshell, is set out hereunder:-

(a) The husband of the first respondent and father of respondents 2 and 3 viz., M.Prakash Chand @ Mittalal Prakashmal borrowed a sum of Rs.60,00,000/- by cash from the applicant on 10.11.2007 for his business. On receipt of the said loan amount, he has also executed a promissory note on the same day. The said M.Prakash Chand @ Mittalal Prakashmal had made two signatures in the Promissory Note, which was witnessed by P.Shantilal Bohra, the grand father of the plaintiff and cousin brother of M.Prakash Chand @ Mittalal Prakashmal. After borrowal of the said money, he did not make any payment, either towards principal amount or interest. Unfortunately, he died within two months from the date of borrowal of the amount, on massive heart attack. Thereafter, the applicant, through his grand father and father, has repeatedly approached the respondents to pay the said money. Since the family would be under mental stress and agony because of the premature death of the said M.Prakash Chand @ Mittalal Prakashmal, the applicant did not insist the amount seriously.

(b) While so, in the beginning of the year 2008, the applicant through his father, approached the first respondent and requested her to make payment. The first respondent has also responded favourably and promised to make payment after considerable time. But, she did not keep up her promise. Finally, in the month of December, 2009, the applicant approached the first respondent through his father and grand father for which the first respondent has replied to contact her in the month of May, 2010. Thereafter, when the applicant contacted the first respondent, the first respondent had given evasive reply. Hence, the applicant issued a legal notice on 4.10.2010 demanding the said amount. But, the first respondent sent a reply on 11.10.2010 denying the demand made by the applicant.

(c) The entire estate of M.Prakash Chand @ Mittalal Prakashmal devolves on the respondents. Hence, it is the duty and responsibility of the respondents to discharge the liability from the estate of late M.Prakash Chand @ Mittalal Prakashmal without any hesitation. In spite of his best efforts, the first respondent did not respond favourably. Hence, the applicant has filed the present suit for recovery of a sum of Rs.81,40,000/-.

(d) The present application has been filed under Order 14 Rule 8 of O.S.Rules r/w Order 38 Rule 5 C.P.C. to direct the respondents / defendants to furnish security worth about Rs.81,40,000/- (Rupees eighty one lakh and forty thousand only) failing which, to issue an order of attachment of the schedule mentioned property before judgment. The properties sought to be attached are as follows:-

(i)House and ground situated at Sundarlal Nagatha Avenue, Kilpauk, Chennai-600 010 bearing Door No.13, Plot No.6 in an extent of 1-1/2 ground on 16.9.2002 for Rs.63,00,000/-.

(ii)Another property was bought on 21.5.2007 in the name of the first defendant's husband and others an extent of 2 acres and 56 cents at Iyancherry Village, Urappakkam for Rs.3,00,00,000/-.

(e) Now, the respondents knowing fully well that late M.Prakash Chand @ Mittalal Prakashmal borrowed money from the applicant and having promised that they would make the payment, finally had gone to the extent of denying the claim. The attitude of the respondents seems to be evading the liability and may even leave the place of jurisdiction in order to defeat and deny the claim of the applicant. Hence, the applicant has filed the present application for the relief set out earlier.

4. The respondents filed a counter affidavit denying the allegation that the first respondent's husband borrowed a sum of Rs.60,00,000/- from the applicant and executed the suit promissory note. In the counter, it has been further stated that the first respondent's husband did not borrow any money from the applicant during his life time and he has also not executed any such promissory note. The suit promissory note had been fabricated and created for the purpose of the suit. The respondents have also denied the allegation that the applicant made repeated demand to the first respondent. Neither the applicant nor his father approached the first respondent. These allegations have been made to support the false claim of the applicant. No case has been made out under Order 38 Rule 5 C.P.C. Thus, the respondents sought for dismissal of the application.

5. When the matter was taken up for consideration, it is contended by the learned counsel appearing for the applicant that the respondents / defendants, after institution of the suit, started to sell their 1/3rd share in second item of the suit schedule property measuring to an extent of 2 acres and 56 cents by joint development agreement along with the share of the co-owners of the property only with an intention to defeat the right of the applicant in executing the decree that is going to be passed. In support of the said contention, the applicant has also filed an additional affidavit to that effect.

6. In view of the additional affidavit filed by the applicant, the respondents have filed additional counter affidavit stating that when the first respondent's husband M.Prakash Chand @ Mittalal Prakashmal was alive, he entered into a joint development agreement with a developer viz., Siddharth foundations and Housing Limited as early as on 25.7.2007 i.e., much prior to the date of alleged loan said to have been advanced in favour of the first respondent's husband. Therefore, it is incorrect to state that the respondents after institution of the present suit, had started to sell their 1/3rd share in the second item of the suit schedule property by joint development agreement. After entering into the development agreement, the developer started developing the land by putting up superstructures even before filing the suit by the applicant. Therefore, it cannot be construed that the joint development agreement is in any way calculated to affect the purported rights of the applicant. All the purchasers of the property including the first respondent's husband and the first respondent appointed and constituted the said Siddharth foundations and Housing Limited through M/s.Praveen M.Jain and Naresh M.Jain as their agents in and by a general power of attorney dated 24.10.2007 to deal with the property in question. When the first respondent's husband was alive, the first respondent's husband and the first respondent appointed power agents to deal with the property. The first respondent's husband died on 12.12.2007. The death of the first respondent's husband necessitated the further documentation in order to give effect to the joint development scheme. Therefore, in order to give effect to the joint development agreement entered into between the first respondent's husband and the first respondent along with other owners on 25.7.2007, G.R.R.Logistics Private Limited, through its Directors J.Ganpathraj, Ashokkumar, M.Parsmal and Kamalakumari appointed the first respondent and one Naresh M.Jain as agents under a deed dated 12.9.2011. Subsequently, the first respondent appointed Naresh Jain as agent in and by a deed dated 28.11.2011. This power document is only a continuation of the earlier transaction and was executed by the first respondent only for avoiding technical difficulties and to give effect to the joint development agreement. But, the applicant has come forward with a false case as if the respondents started to transfer their 1/3rd share in the suit property to the third party purchasers subsequent to the institution of the suit in order to defeat the right of the applicant in executing the decree that is going to be passed in the present suit. Thus, the respondents pray for the dismissal of the application.

7 (A) It is the submission of the learned counsel appearing for the applicant that the first respondent's husband borrowed a sum of Rs.60,00,000/- from the applicant by executing a promissory note dated 10.11.2007. In the said promissory note, the first respondent's husband made his signatures in two places. One Shantilal Bohra, who is the grand father of the applicant and the cousin brother of the first respondent's husband stood as witnesses. After borrowing the loan, the first respondent's husband died on 12.12.2007. Though the first respondent had promised to pay the loan amount borrowed by her husband, subsequently, she denied the borrowal of the said loan by her husband. Hence, the applicant issued a legal notice on 4.10.2010, for which, the first respondent sent a reply through her counsel.

(B) Further, it is submitted by the learned counsel appearing for the applicant that while deciding the application under Order 38 Rule 5 C.P.C., the Court need not go into the correctness or otherwise of the contentions raised by the parties. If the Court is satisfied that prima facie case has been made out and if the defendant, in order to obstruct or delay the execution of any decree that may be passed against him, is attempting to dispose the whole or any part of his property before judgment, the Court can order for attachment of the property before judgment. So far as the present case is concerned, in order to establish the prima facie case, the promissory note signed by the first respondent's husband was produced as suit document.

(C) Further, the learned counsel appearing for the applicant by filing annual returns for the assessment years from 2008-2009 till 2011-12, submitted that the amount of Rs.60,00,000/- advanced by the applicant to the first respondent's husband was shown as a loan in the annual returns. Thus, the learned counsel appearing for the applicant submitted that the documents produced on the side of the applicant would establish a prima facie case in favour of the applicant that the applicant / plaintiff had advanced a sum of Rs.60,00,000/- as a loan to the first respondent's husband.

(D) That apart, the learned counsel appearing for the applicant by filing an affidavit and also the encumbrance certificate, submitted that in the second item of the suit schedule property measuring to an extent of 2 acres and 56 cents, the first respondent's husband was having 1/3rd share. After institution of the suit, the first respondent started to sell their 1/3rd share in the said property by joint development agreement in favour of third party purchasers. In this connection, the learned counsel appearing for the applicant has also submitted that 200 flats were constructed in the suit property and so far, 160 flats have been sold, which would show that the first respondent is attempting to dispose the first respondent's husband 1/3rd share in the second item of suit schedule property pending suit in order to obstruct the execution of the decree that may be passed against the respondents. Therefore, if the order of attachment is not ordered, the applicant would be put to irreparable loss and hardship. In support of his contention, learned counsel appearing for the applicant has relied on the following judgments viz.,

(i) (2008) 2 Supreme Court Cases 724 - Rajendran and others v. Shankar Sundaram and others.

(ii) 2007 (6) Supreme 25 - M/s.Girnar Traders v. State of Maharashtra & ors.

8. (A) Per contra, learned counsel appearing for the respondents submitted that the first respondent's husband has not received any loan from the applicant. By filing a forged document, the present suit has been filed. The applicant has not produced any documents with regard to the source for advancing a huge sum of Rs.60,00,000/- to the first respondent's husband. The income tax returns submitted by the applicant is inadmissible in evidence. The income tax returns now produced are suffering from several infirmities. The income tax returns were not produced at the earliest point of time. It was produced only during the course of argument. It does not contain the signature of the assessee. Therefore, the said document cannot be relied upon.

(B) Further, the learned counsel appearing for the respondents submitted that it is incorrect to state that after filing the suit by the applicant in order to defeat the right of the applicant in executing the decree that is going to be passed in the present suit, the first respondent had started to dispose the 1/3rd share of her husband in second item of the suit schedule property. So far as the second item of the property is concerned, the said property was purchased under a sale deed dated 21.5.2007 in favour of the first respondent's husband and also in favour of three other persons. The first respondent's husband became entitled to 1/3rd share in the second items of the suit schedule property. When he was alive, he had entered into a joint development agreement with one Siddharth Foundation and Housing Limited through M/s.Praveen M.Jain and Naresh M.Jain on 25.7.2007, i.e., long prior to the alleged loan. After entering into the joint development agreement, the developer started developing the land by putting up superstructures and constructed flats. Thereafter, the respondents started to sell their 1/3rd share in the said flats along with the shares of co-owners to the prospective purchasers of the flats. Therefore, it cannot be construed that the joint development agreement is in any way calculated to affect the purported rights of the applicant. Thus, the learned counsel appearing for the respondents submitted that no case has been made out under Order 38 Rule 5 C.P.C. In support of his contention, he has relied upon the following judgments viz.,

(i) AIR 1967 SUPREME COURT 1058 - Chandradhar Goswami and others v. Gauhati Bank Ltd.

(ii) 2008-3-L.W. 744 - Raman Tech. & Process Engg. Co., & another v. Solanki Traders.

(iii) 2009-5-L.W.510 - M.K.Hariprasad & another v. Uma Keshav.

9. I have heard the submissions made on either side and perused the materials available on record.

10. In view of the submissions made on either side, now, the only question that has to decided is, whether any prima facie case has been made out by the applicant under Order 38 Rule 5 C.P.C. warranting this Court to issue an order of attachment before judgment.

11. The submission of the applicant is on two folds viz.,

(i) In order to establish the prima facie case, the plaintiff has produced the promissory note signed by the first respondent's husband as well as the income tax returns pertaining to the years from 2008-2009 to 2011-2012, which documents would show that a sum of Rs.60,00,000/- was advanced by the applicant to the first respondent's husband.

(ii) It is an admitted fact that the first respondent is continuously disposing the 1/3 share of her husband in the second item of the suit schedule property by way of joint development agreement to the prospective purchasers of flats pending the present suit, which would show that the respondents only in order to obstruct the execution of the decree that may be passed against the respondents, are transferring their 1/3rd share in the property. Therefore, an order of attachment of the suit property has to be ordered in order to prevent the respondents from defeating the rights of the applicant in executing the decree that is going to be passed.

12. So far as the first ground is concerned, the respondents deny the execution of the promissory note. According to them, the said promissory note is a created document and the first respondent's husband never borrowed any loan from the applicant. But, I am of the opinion, as contended by the learned counsel appearing for the applicant, while exercising the jurisdiction under Order 38 Rule 5 C.P.C, the Court need not go into the correctness or otherwise of the contentions raised by the parties. If the Court is satisfied that a prima facie case has been made out by the applicant in support of his claim, that would suffice to order for attachment. In this regard, learned counsel appearing for the applicant has drawn the attention of this Court to Section 114 of the Indian Evidence Act and submitted that by considering the documents produced by the applicant in respect of his claim, adverse inference could be drawn in favour of the applicant. But, I find that in order to make out a prima facie case, the applicant has produced Promissory Note dated 10.11.2007 and Income Tax returns. But, in my considered opinion, these two documents produced by the applicant are not sufficient to make out a prima facie case in his favour. Further, I am of the view, when a huge sum of Rs.60,00,000/- has been advanced, the applicant ought to have produced tangible evidence before this Court with regard to the source for advancing such a huge amount. But, the applicant has not produced any documents to prove the source for advancing a huge amount of Rs.60,00,000/-.

13. The next fold of submissions is that the first respondent by entering into a Joint Development agreement with the developer, is disposing the 1/3rd share of her husband in the second item of the suit schedule property in order to delay or obstruct the execution of the decree that may be passed against the respondents. But, on a perusal of the records, I find that the first respondent's husband along with three other persons entered into a joint development agreement with the developer viz., Suddharth Foundations and Housing Limited through M/s.Peraveen M.Jain and Naresh M.Jain as early as on 25.7.2007, i.e., much earlier to the filing of the suit. Pursuant to the said agreement, the property was developed and the flats were constructed in the second item of the suit schedule property and the respondents along with the co-owners started to sell her 1/3rd share in the flats to the respective purchasers. Therefore, it is incorrect to state that after filing of the suit, with an intention to delay or obstruct the execution of the decree that may be passed against the first respondent, the first respondent started to sell her 1/3rd share. Unless it is established that the respondents started to sell the property after filing of the suit with an intention to obstruct or delay the execution of the decree that may be passed against them, in my considered opinion, order of attachment cannot be passed. In this regard, a reference could be placed in the judgment relied upon by the learned counsel appearing for the respondents reported in 2009-5-L.W.510 - M.K.Hariprasad & another v. Uma Keshav, wherein, the Division Bench of this Court has held as follows:-

" 9. It is not that whenever any claim for recovery of money is made before a Court of civil law, every application filed for attachment before judgment should be ordered. It is well settled proposition of law that in a given case, asking for a direction to the defendants to furnish security and in default an order of attachment is an extraordinary remedy. It is also settled proposition of law that in a given case if the allegations are bald, the Court has no option than to deny the relief. What is all mentioned in paragraph 11 of the affidavits in support of the applications is as follows;

"11. I reliably understand that the 2nd respondent herein is making hectic efforts to dispose of the land to keep it out of the reach of the creditors and particularly me. I have come to understand that the real estate agents in the area have been pressed into service for the purpose and this fact is known to the people stationed locally. If the second respondent is allowed to sell the property, I would be left with no remedy to recover my suit claim and any decree that may be passed would only be on paper, incapable of execution. This would lead to great hardship and loss and could well result in serious miscarriage of justice also."

10. The very reading of the above would clearly indicate that the allegations are bald. There is no specific averment or allegation made. In the absence of any specific allegation, it is well settled by the Apex Court and also by this Court that this extraordinary remedy should not be granted. It is true that the Court is vested with powers to exercise under Order 38 Rule 5 of CPC. But, it remains to be stated that if it is a fit case, it should be exercised. The learned single Judge in order to dismiss the applications fortified the decision of the Apex Court reported in (2008) 2 MLJ 1058 = 2008-3 L.W. 744 (SC) (Raman Tech & Process Engg. Co. and another Vs. Solanki Traders) wherein the Apex Court has held as follows:

"5. The power under Order 38 Rule 5 C.P.C. is a drastic and extraordinary power. Such power should 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. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs, by obtaining orders of attachment before judmgnet and forcing the defendants for out of Court settlements, under threat of attachment.

6. A defendant is not debarred from dealing with his property merely because a suit is filed or about to be filed against him. Shifting of business from one premises to another premises or removal of machinery to another premises by itself is not a ground for granting attachment before judgment. A plaintiff should show, prima facie, that his claim is bona fide 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 C.P.C. Courts should also keep in view the principles relating to grant of attachment before judgment (see Prem Raj Mundra Vs.

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Md.Maneck Gazi, AIR 1951 Cal. 156, for a clear summary of the principles)." 11. It would be quite clear that either filing of a suit for recovery of money or the averment in the affidavit cannot by itself suffice for granting the relief of attachment before judgment. In order to get the relief of direction for furnishing security or in default, attachment before judgment, the plaintiff who seeks the remedy must make a specific averment which would warrant for getting such a relief. In the case on hand, it is quite absent in the considered opinion of the Court. It is a drastic and extraordinary power vested in the hands of the Court under Order 38 Rule 5 of CPC. The Court need not go into at this stage whether the claim is barred by limitation or not. So long as ground is not made out for exercising the powers of the Court under Order 38 Rule 5, the learned single Judge was perfectly correct in dismissing the applications. Both the appeals do not require admission. Accordingly, they are dismissed...... " A reading of the dictum laid down in the above judgment would show that the power under Order 38 Rule 5 C.P.C. is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for asking. That has to be used sparingly and strictly in accordance with the Rules. In the instant case, during the life time of the husband of the first respondent, he himself entered into a Joint Development Agreement with the builder for disposing his 1/3rd share in the second item of the suit schedule property. After his demise, pursuant to the said agreement, the respondents are disposing the 1/3 share devolved upon them on the demise of the first respondent's husband along with co-owners of the property to the prospective purchasers of the flats. An order of attachment could be considered, only when the respondents started to dispose the property after filing of the suit with an intention to delay or obstruct the execution of the decree that may be passed against them. But, in the instant case, I do not find such a situation. In fact the first respondent herself entered into the Joint Development Agreement with the developer even before the date of alleged loan. Hence, I am of the opinion that the materials placed before this Court are not sufficient for granting an order of attachment before judgment. 14. For all the reasons stated above, I am of the opinion that the applicant is not entitled to the relief that has been sought for by him. 15. In fine, the present application is dismissed. No costs.
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