Case Note & Summary
The plaintiff, SJJ Marine Pte Ltd, filed a summary suit against Pisces Exim (India) Private Limited (Defendant No.1) and another (Defendant No.2) for recovery of USD 1,570,500.20 with interest, being unpaid freight, demurrage, and detention dues under two charterparty agreements dated 26 April 2012 and 7 May 2012. The plaintiff also filed a notice of motion under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 seeking an injunction restraining the defendants from selling or dealing with 40,000 WMT of iron ore fines belonging to Defendant No.1 stored at Mormugao Port, a direction to disclose assets, and an order to furnish security or attachment of assets. The plaintiff alleged that Defendant No.1 and Defendant No.2 were alter egos, with common shareholders and directors. The plaintiff claimed that Defendant No.2 failed to pay dues under the charterparties, and the plaintiff exercised a lien over cargo. Subsequently, Mr. Soumit Ranjan Jena, on behalf of Defendant No.1, agreed to pay the dues by 30 July 2012 but failed. The court considered the plaintiff's submissions that the defendants were attempting to dispose of assets to defeat the decree. The court held that the plaintiff had made out a prima facie case and that there was a real risk of the defendants dissipating assets. The court directed the defendants to furnish security of USD 1,570,500.20 within four weeks and restrained them from selling or creating third-party rights over the iron ore cargo. The court also directed the defendants to disclose their assets on oath. The notice of motion was disposed of accordingly.
Headnote
A) Civil Procedure - Attachment Before Judgment - Order XXXVIII Rule 5 CPC - Plaintiff sought attachment of defendant's assets and injunction against sale of cargo - Court held that where the defendant is likely to dispose of or remove property to defeat the decree, the court may direct security or attachment - Plaintiff established prima facie case and risk of dissipation - Held that defendants must furnish security of USD 1,570,500.20 and are restrained from dealing with the iron ore cargo (Paras 1-10).
Issue of Consideration
Whether the plaintiff is entitled to an order of attachment before judgment and injunction restraining the defendants from dealing with their assets pending disposal of the summary suit for recovery of freight, demurrage, and detention dues.
Final Decision
The court allowed the notice of motion. Defendants were directed to furnish security of USD 1,570,500.20 within four weeks. Defendants were restrained from selling, creating third party rights, or dealing with the cargo of 40,000 WMT of Iron Ore Fines belonging to Defendant No.1 lying at Berth No. 9 at Mormugao Port. Defendants were also directed to disclose on oath all their assets, bank accounts, list of debtors, creditors, and pending legal proceedings. The notice of motion was disposed of.
Law Points
- Order XXXVIII Rule 5 CPC
- attachment before judgment
- summary suit
- charterparty
- lien
- alter ego
- security
- injunction
Case Details
2013 LawText (BOM) (01) 94
Notice of Motion (L) No. 2924 of 2012 in Summary Suit (L) No. 2558 of 2012
Mr. D.D. Madon, Senior Advocate, along with Mr. Rahul Narichania, Mr. Aditya Krishnamurthy and Mr. Nihal Shaikh, instructed by M/s. Bose & Mitra & Co., for the Applicant/Plaintiff. Mr. P.S. Pratap, Senior Advocate, instructed by Mr. M.R. Khatri for Defendant Nos. 1 and 2.
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Nature of Litigation
Summary suit for recovery of unpaid freight, demurrage, and detention dues under charterparty agreements, with a notice of motion for attachment before judgment and injunction.
Remedy Sought
Plaintiff sought an order and decree for payment of USD 1,570,500.20 with interest, and in the notice of motion, sought injunction restraining defendants from dealing with iron ore cargo, direction to disclose assets, and order to furnish security or attachment of assets.
Filing Reason
Defendant No.2 failed to pay freight, demurrage, and detention dues under two charterparty agreements, and the plaintiff alleged that defendants were attempting to dispose of assets to defeat the decree.
Issues
Whether the plaintiff is entitled to an order of attachment before judgment under Order XXXVIII Rule 5 CPC.
Whether the plaintiff is entitled to an injunction restraining the defendants from dealing with the iron ore cargo.
Submissions/Arguments
Plaintiff argued that defendants are alter egos and are likely to dispose of assets to defeat the decree.
Plaintiff submitted that it has a prima facie case and balance of convenience is in its favor.
Defendants opposed the motion, but their specific arguments are not detailed in the provided text.
Ratio Decidendi
Under Order XXXVIII Rule 5 CPC, where the court is satisfied that the defendant is about to dispose of or remove property with intent to obstruct or delay the execution of a decree, the court may direct the defendant to furnish security or attach the property. The plaintiff established a prima facie case and a real risk of dissipation of assets, warranting the grant of security and injunction.
Judgment Excerpts
The Plaintiff has filed the above Summary Suit against Defendant Nos. 1 and 2 for an order and decree against the Defendants to jointly and/or severally pay to the Plaintiff USD 1,570,500.20 together with interest at the rate of 8 per cent per annum from the date of filing the suit till payment and / or realisation thereof, and for costs.
The Plaintiff has taken out the above Notice of Motion in the Suit under Order XXXVIII Rule 5 of the Civil Procedure Code, 1908 inter alia (I) for an order and injunction restraining the Defendants from selling and/or creating third party right, title and interest and/or dealing with the cargo of 40,000 WMT of Iron Ore Fines belonging to Defendant No.1 and presently lying and stored at Berth No. 9 at Mormugao Port; (ii) directing the Defendants to disclose on oath all their assets, bank accounts, list of debtors, creditors and list of all pending suits, arbitrations and legal proceedings filed by and against the Defendants; (iii) for an order and direction against the Defendants to furnish security in the sum of USD 1,570,500.20; and (iv) allow attachment of all the assets, properties and bank accounts of the Defendants.
Procedural History
The plaintiff filed Summary Suit (L) No. 2558 of 2012 for recovery of dues. Subsequently, the plaintiff took out Notice of Motion (L) No. 2924 of 2012 under Order XXXVIII Rule 5 CPC seeking attachment before judgment and injunction. The court heard the motion and passed the order on 10 January 2013.
Acts & Sections
- Code of Civil Procedure, 1908: Order XXXVIII Rule 5
