Case Note & Summary
The appellant, Herald Engineers, filed a suit against Wonderpack Industries Pvt Ltd and another respondent for recovery of Rs.40,36,567/-. The suit was based on an order placed by the respondent for supply of machinery and spare parts worth Rs.35,28,507/-, which the respondent refused to accept. Additionally, an amount of Rs.5,08,060/- was already due. Along with the suit, the appellant filed an application under Order 38 Rule 5 CPC for attachment before judgment. The trial court partly allowed the application, directing the respondent to furnish security only for Rs.24,398/-. Aggrieved, the appellant filed an appeal. The High Court, after hearing both sides, found that the appellant had made out a prima facie case and the balance of convenience was in favour of granting security for the entire claim. The court noted that the respondent had refused to accept the goods and was attempting to create third-party interests in the suit property. Accordingly, the High Court allowed the appeal, set aside the trial court's order, and directed the respondent to furnish security for the entire claim amount of Rs.40,36,567/- within four weeks, failing which the trial court could attach the property.
Headnote
A) Civil Procedure - Attachment Before Judgment - Order 38 Rule 5 CPC - Security for Claim - The appellant/plaintiff sought attachment before judgment for a claim of Rs.40,36,567/-. The trial court directed security only for Rs.24,398/-. The High Court held that the plaintiff had made out a prima facie case and the balance of convenience was in favour of granting security for the entire claim amount, as the defendant had refused to accept goods and was attempting to alienate property. The court directed the defendant to furnish security for the full claim amount within four weeks. (Paras 1-6)
Issue of Consideration
Whether the trial court erred in directing security only for a part of the claim amount under Order 38 Rule 5 CPC, and whether the appellant is entitled to attachment before judgment for the entire claim.
Final Decision
The appeal is allowed. The order dated 23rd July, 2012 is set aside. The respondent No.1 is directed to furnish security for the entire claim amount of Rs.40,36,567/- within four weeks from the date of the order. If the security is not furnished, the trial court may attach the property.
Law Points
- Order 38 Rule 5 CPC
- attachment before judgment
- security for claim
- prima facie case
- balance of convenience
Case Details
2013 LawText (BOM) (04) 33
Appeal from Order No.926 of 2012 with Civil Application No.1251 of 2012 and Civil Application No.497 of 2013
Mr. S.S. Patwardhan for the Appellant; Mr. Gaurav Joshi a/w Ms. Nupur Desai i/b Markand Gandhi and Co for the Applicants in CA.497/13 and Respondent No.1 in AO 926/12; Mr. G. A. Hegde a/w C. M. Lokesh i/b A. R. Bhole and Co for the Respondent No.2
Wonderpack Industries Pvt Ltd and Anr
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Nature of Litigation
Civil appeal against an order partly allowing an application for attachment before judgment under Order 38 Rule 5 CPC.
Remedy Sought
The appellant sought attachment before judgment for the entire claim amount of Rs.40,36,567/-.
Filing Reason
The appellant claimed that the respondent refused to accept goods and was attempting to alienate property, necessitating security for the claim.
Previous Decisions
The trial court partly allowed the application, directing security only for Rs.24,398/-.
Issues
Whether the trial court erred in directing security only for a part of the claim amount under Order 38 Rule 5 CPC.
Whether the appellant is entitled to attachment before judgment for the entire claim.
Submissions/Arguments
The appellant argued that a prima facie case was made out and the balance of convenience was in favour of granting security for the entire claim.
The respondent opposed, but the court found the appellant's case strong.
Ratio Decidendi
Under Order 38 Rule 5 CPC, if the court is satisfied that the defendant is about to dispose of or remove property with intent to obstruct or delay execution, it may direct attachment before judgment. The plaintiff had made out a prima facie case and the balance of convenience was in favour of granting security for the entire claim.
Judgment Excerpts
The Appeal challenges the order dated 23rd July, 2012 vide which the application filed by the present Appellant under Order 38 Rule 5 of the Code of Civil Procedure, 1908 (CPC) was partly allowed and the Defendant No.1 i.e. the Respondent No.1 was directed to furnish security for an amount of Rs.24,398/ within two weeks from the date of the said order.
The Appellant/Plaintiff has filed the suit against the Respondents for a claim of about Rs. 40,36,567/.
Procedural History
The appellant filed Regular Civil Suit No.513 of 2011 along with an application under Order 38 Rule 5 CPC for attachment before judgment. The trial court partly allowed the application on 23rd July, 2012, directing security for Rs.24,398/-. The appellant filed an appeal against that order. The High Court heard the appeal and allowed it on 17th April, 2013.
Acts & Sections
- Code of Civil Procedure, 1908: Order 38 Rule 5
