MAHARASHTRA NATIONAL LAW UNIVERSITY MUMBAI

CODE OF CIVIL PROCEDURE

SEMESTER IV

FIRST DRAFT

GUIDING PRINCIPLES FOR ATTACHMENT OF PROPERTY BEFORE

JUDGMENT

Submitted to: Prof. Milind Gawai

Submitted by: Pranhita Singh

Enrolment I.D.: 2016 035

 CONTENTS

1. INTRODUCTION .................................................................................................................... 3

1.1. SCOPE OF RESEARCH .................................................................................................... 4

2. GROUNDS OF ATTACHMENT OF PROPERTY UNDER ORDER 38 ............................................. 5

2.1. VALIDITY OF AFFIDAVITS SUBMITTED BY PLAINTIFF ................................................... 6

2.2. PLAINTIFF SHOULD HAVE A PRIMA FACIE CASE ............................................................. 7

2.3. WHEN THE DEFENDANT IS OPERATING MERELY IN THE COURSE OF BUSINESS ............ 8

2.4. DEFENDANT IS IN INSOLVENT CIRCUMSTANCES ........................................................... 8

3. EFFECT OF ATTACHMENT BEFORE JUDGMENT ..................................................................... 9

3.1. AS A GUARANTEE ........................................................................................................ 9

3.2. AFTER SUIT IS DECREED .............................................................................................. 9

4. CONCLUSION ..................................................................................................................... 10

5. BIBLIOGRAPHY .................................................................................................................. 11
 1. INTRODUCTION

The Code of Civil Procedure, 1908, recognizes the rights of the decree-holder to attach the
property of the judgment-debtor in execution proceedings and lays down the procedure to effect
attachment. They have been stated below:

1. Sections 60 to 64
2. Rules 41 to 57 of Order 21
3. Rules 5 to 13 of Order 38

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
38 of the Code of Civil Procedure and attachment for execution of a decree under Order 21
thereof.

An order of attachment before judgment passed under Order 38 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 21 is to see that the process of court is not defeated once execution
starts.1

Section 60(1) declares which properties are liable to attachment and sale in execution of a
decree, and which are exempt from them.2 Order 21 of the Code of Civil Procedure deals with
the solemn act of execution of the decrees passed by the Courts from grassroots to the top.

The primary aim of attachment before judgment is to prevent any attempt on the part of the
defendant to defeat the realization of the decree that may be passed against him.3 The object of
supplemental proceedings is to prevent the ends of justice being defeated. The object of Order

1
Kerala State Financial Enterprises Ltd v. Official Liquidator, High Court of Kerala, App. (Civil) 4333 of 2006
SC
2
Section 60(1), Code of Civil Procedure, 1908
3
Padam Sen v. State of U.P. [AIR 1961 SC 218]
38 Rule 5 in particular, is to prevent any defendant from defeating the realization 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 movable or immovable property.4

An attachment before judgment is in the nature of an interlocutory order. In Gurunadha Rao v.

Gamini Krishnayya,5 a Division Bench of the Hon’ble High Court of Andhra Pradesh held that
to be valid an attachment must be specific and clear in its purport. In Shivaraya and Ors Vs.
Sharnappa and Ors,6 the Hon’ble Single Judge followed Bankim Chandra and Others’7 case
which considered such interlocutory orders to have been passed in exercise of the Court’s
ancillary powers.

His Lordship Dawson-Miller C. J. observed:

“The power given to the Court to attach a defendant’s property before judgment, is
never meant to be exercised lightly or without clear proof of the existence of the
mischief aimed at in the rule. Such a power is given only when the court is satisfied not
only that the defendant is about to dispose of his properties or to remove it from the
jurisdiction of the court, but also that his objective in doing so is to obstruct or delay
the execution of any decree that may be passed against him, and so deprive the plaintiff,
successful of the fruits of victory.” 8

1.1. SCOPE OF RESEARCH

The main aim of this paper is to look at the procedural aspect regarding attachment of property
before judgment. This includes a case analysis view of Order 38 Rules 5 to 13 which lay down
guidelines that the Court has to follow before attaching property in a civil suit. The researcher
will do so by analysing various case laws and make an observation as to how these rules have
been interpreted and implemented by the Courts. The researcher will focus on the principles
laid down in the case of Premraj Mundra v. Mohd. Maneck Gazi9 and Raman Tech. & Process
Engg. Co. v. Solanki Traders10 and look at their application.

4
Raman Tech. & Process Engg. Co. v. Solanki Traders. [(2008) 2 SCC 302]
5
Gurunadha Rao v. Gamini Krishnayya [1955 (1) An.WR 684]
6
Shivaraya and Ors v. Sharnappa and Ors. [AIR 1968 Mysore 283]
7
Bankim Chandra And Ors. V. Chandi Prasad [AIR 1956 Pat 271]
8
Chandrika Prashad Singh v. Hira Lal [AIR 1924 Pat 312]
9
Premraj Mundra v. Mohd. Maneck Gazi [AIR 1951 Cal 156]
10
Raman Tech. & Process Engg. Co. v. Solanki Traders. [(2008) 2 SCC 302]
 2. GROUNDS OF ATTACHMENT OF PROPERTY UNDER ORDER 38

Order 38 Rule 5 of the Code of Civil Procedure, 1908 states that:

“Where, at any stage of a suit, the court is satisfied, by affidavit or otherwise, that the
defendant, with the 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,

(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.”11

The remedy of attachment of property before judgment is an extraordinary remedy, and must
be exercised sparingly and strictly in accordance with law and with utmost care and caution so
that it may not become an engine of oppression.12

Since the attachment before judgement is itself are of a serious nature, there are two conditions
precedent which must be satisfied when such orders by court is made. These are, that the
plaintiff’s suit must be bona fide and his cause of action must be prima facie unimpeachable
subject to his proving the allegations in the plaint and the court must have the reason to believe
on adequate materials that unless this extraordinary power is exercised there is a real danger
that the defendant will remove himself or his property from the ambit of the powers of the
court.

In the leading case of Premraj Mundra v. Mohd. Maneck Gazi,13 Justice Sinha laid down
fourteen principles to be followed in relation to passing an order of attachment before
judgment. These were arrived at after referring to several authorities, and are still in use today.

11
Order 38, Rule 5, Code of Civil Procedure, 1908
12
Ratan Kumar v. Howrah Motor Co. (P) Ltd. [AIR 1975 Cal 180]
13
Premraj Mundra v. Mohd. Maneck Gazi [AIR 1951 Cal 156]
Another famous application of these rules was done in the case of Raman Tech. & Process
Engg. Co. v. Solanki Traders.14

2.1. VALIDITY OF AFFIDAVITS SUBMITTED BY PLAINTIFF

In the Premraj case, two of the principles laid down by Justice Sinha were:

(4) That the affidavits in support of the contentions of the applicant, must not be vague, &
must be properly verified. Where it is affirmed true to knowledge or information or belief, it
must be stated as to which portion is true to knowledge, the source of information should be
disclosed, & the grounds for belief should be stated.

(5) That a mere allegation that the deft. was selling off & his properties is not sufficient.
Particulars must be stated. 15

The reason for this was to avoid frivolous applications from plaintiffs, and to prevent them
from using this rule to request for attachment before judgment just because they think that the
defendant is making a mala fide move. Concrete evidence is required to be stated by the
plaintiff in his affidavit.

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.16

The sine qua non for an order of Attachment before Judgment is the mala fide 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.17

14
Raman Tech. & Process Engg. Co. v. Solanki Traders. [(2008) 2 SCC 302]
15
Premraj Mundra v. Mohd. Maneck Gazi [AIR 1951 Cal 156]
16
Y. Vijayalakshmamma v. Sakinalu Lakshmaiah [AIR 1980 AP 176]
17
Mrs. Chitra Chockalingam,& ors. v. Devaki Hospitals Pvt. Limited, Application No. 2638/2006, Madras HC
 18
In the case of Mrs. Chitra Chockalingam,& Ors. v. Devaki Hospitals Pvt. Limited, the
plaintiffs were not able to reasonably prove that the defendants had any reason to furnish the
security, in lack of which an attachment before judgment could be applied.

2.2. PLAINTIFF SHOULD HAVE A PRIMA FACIE CASE

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. 19

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 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.

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.20

In all applications for attachment before judgment, there must be uberrina fides on the part of
plaintiff, and where the most perfect good faith is wanting the application should be rejected.21

18
Id.
19
Vareed Jacob v. Sosamma Geevarghese Appeal (Civil) 2634 of 2004 SC
20
Raman Tech. & Process Engg. Co. v. Solanki Traders. [(2008) 2 SCC 302]
21
Ahmed Ali Vs. Gladstone Wyllie, 7 W.R 508 (1867).
The court while exercising its jurisdiction under Order 38 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. 22

2.3. WHEN THE DEFENDANT IS OPERATING MERELY IN THE COURSE OF

BUSINESS

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. 23
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.

2.4. DEFENDANT IS IN INSOLVENT CIRCUMSTANCES

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,
24
is not a sufficient reason for an order under Order 38 of the Code. 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 defendant25

22
Rajendran v. Shankar Sundaram, Appeal (Civil) 802 of 2008 SC
23
Nowroji Pudumjee Siradar v. Deccan Bank Ltd. AIR 1921 Bom 69.
24
Premraj Mundra v. Mohd. Maneck Gazi [AIR 1951 Cal 156]
25
Surender Singh Bajaj v. Kitty Steels Limited [AIR 2003 AP 13]
 3. EFFECT OF ATTACHMENT BEFORE JUDGMENT
3.1. AS A GUARANTEE
If we go through the ruling of the Hon’ble Supreme Court in the case of Sardar Govindrao
Mahadik & Anr v. Devi Sahai & Ors,26 we can find answer to this question.

It is a sort of a guarantee against decree becoming infructuous for want of property available
from which the plaintiff can satisfy the decree. The provision in section 64 of the Code of Civil
Procedure provides that where an attachment has been made, any private transfer or delivery
of the property attached or of any interest therein and any payment to the judgment debtor of
any debt, dividend or other monies contrary to. such attachment, shall be void as against all
claims enforceable under the attachment. What is claimed enforceable is the claim for which
the decree is made.

There is nothing to show that the attachment which would come to an end on the suit being
dismissed would get revived if a second appeal is filed which ultimately succeeds. In fact, a
dismissal of the suit may terminate the attachment and the same would not be revived even if
the suit is restored and this becomes manifestly clear from the newly added provision in Sub
Rule (2) of Order 38 Rule 11 A which provides that attachment before judgment in a suit which
is dismissed for default shall not be revived merely because 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.27

As a corollary it would appear that if attachment before judgment is obtained in a suit which
ends in a decree but if in appeal the decree is set aside the attachment of necessity must fail. 28

3.2. AFTER SUIT IS DECREED

The moment suit is decreed, the attachment before judgment operates as attachment in
execution of the decree. 29 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. 30A 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

26
Sardar Govindrao Mahadik & Anr v. Devi Sahai & Ors [1982 SCR (2) 186]
27
Order 38 Rule 11 A, Code of Civil Procedure, 1908
28
S. Noordeen v. S. Thiru Venkita Reddiar & Ors [1996 AIR 1293]
29
Pushpmala Jain v. Bank of Baroda, AIR 1990 P&H 28.
30
Vareed Jacob v. Sosamma Geevarghese Appeal (Civil) 2634 of 2004 SC
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. 31

4. CONCLUSION

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 utilize 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 judgment and forcing the defendants for out of court
settlement, under threat of attachment.

31
Pushpmala Jain v. Bank of Baroda, AIR 1990 P&H 28.
 5. BIBLIOGRAPHY

ACTS

• CODE OF CIVIL PROCEDURE, 1908

BOOKS

• C.K. TAKWANI, CIVIL PROCEDURE WITH LIMITATION ACT, 1963 (8ed. 2017)

CASES:

• Premraj Mundra v. Mohd. Maneck Gazi [AIR 1951 Cal 156]

• Raman Tech. & Process Engg. Co. v. Solanki Traders. [(2008) 2 SCC 302]
• Padam Sen v. State of U.P. [AIR 1961 SC 218]
• Gurunadha Rao v. Gamini Krishnayya [1955 (1) An.WR 684]
• Shivaraya and Ors v. Sharnappa and Ors. [AIR 1968 Mysore 283]
• Bankim Chandra And Ors. V. Chandi Prasad [AIR 1956 Pat 271]
• Chandrika Prashad Singh v. Hira Lal [AIR 1924 Pat 312]
• Ratan Kumar v. Howrah Motor Co. (P) Ltd. [AIR 1975 Cal 180]
• Ahmed Ali Vs. Gladstone Wyllie, 7 W.R 508 (1867).
• Rajendran v. Shankar Sundaram, Appeal (Civil) 802 of 2008 SC
• Vareed Jacob v. Sosamma Geevarghese Appeal (Civil) 2634 of 2004 SC
• Mrs. Chitra Chockalingam & Ors. v. Devaki Hospitals Pvt. Limited, Application No.
2638/2006, Madras HC
• Pushpmala Jain v. Bank of Baroda, AIR 1990 P&H 28.
• Y. Vijayalakshmamma v. Sakinalu Lakshmaiah [AIR 1980 AP 176]