Further a Division Bench of this Court in Chairman and Managing Director, R.P.N.Nigam Ltd., New Delhi v. Rambachane Singh,4 dealing with necessary conditions for ordering an application filed under Order 38 Rule 5, CPC was pleased to hold :
".... Such an order is not to be passed in a routine manner merely for the asking for it but that the Court has to be satisfied on tangible materials placed before it that there are attempts at alienation and that the steps are taken so as to delay or obstruct the judgment that may be ultimately passed against the defendant. Before passing an order, the defendant is first of all to be called upon to furnish security in the shape of specific sum to produce and place at the disposal of the Court when required, the property specified by the plaintiff in his petition or such portion of it as may be sufficient to satisfy the decree or call upon him to show cause as to why he shall not furnish security. But such an order can be passed only after the primary satisfaction of the obstructive conduct of the defendant. The ultimate attachment order can be passed only if the defendant either fails to show cause why the security shall not be furnished or fails to furnish the security as required...."
Andhra High Court
Chairman And Managing Director, ... vs Rambachane Singh on 12 June, 1997
Equivalent citations: AIR 1998 AP 127, 1997 (5) ALT 96
Bench: L Rath, K S Shrivastav
1. This case was taken up for admission and as we were about to issue notice for the respondent to appear, Mr. S. V. R. Subramanyam submits that he is appearing for the respondent and is ready with the matter. Since this case relates to the validity of an order passed under Order 38, Rule 5 of the Code of Civil Procedure against the appellants, admitting the appeal and keeping it for hearing, we will hold up the suit unnecessarily. We have, with the consent of the parties, heard the matter and we dispose of the appeal by the following order.
2. The respondent has tiled an application under Section 8 of the Arbitration Act (Act 1940) for referring the dispute between the parties to arbitration and in that application filed a petition under Order 38, Rule 5 of the Code of Civil Procedure read with Section 41 (b) of the Arbitration Act for attachment before judgment of the amounts to be paid into the bank account of the appellants by the garnishee, N.T.P.C.Talcher. On an order having been passed to the benefit of the respondent, the appeal has been preferred. The learned III Additional Subordinate Judge, Visakhapatnam, has, in passing the impugned order, considered that admittedly huge amount is due to the appellants from the garnishee but that the appellants are not giving undertaking that they would furnish bank guarantee for the suit amount and that they are not even considering that how the amount was due to the respondent for the work done by him and they are not placing the relevant records before the Court as to how much work has been done by the respondent. On such premise, it was thought that it was a fit case in which an order under Order 38, Rule 5 of the Code of Civil Procedure could be made.
3. We are afraid that in passing the impugned order, the learned Judge has not kept in view the ingredients of Order 38, Rule 5 of the Code of Civil Procedure properly. An order under Order 38, Rule 5 is not to be passed merely for the asking for it and merely because of the fact that the garnishee has huge amount to pay in favour of the appellant. The law in this regard was discussed by this Court in, Sripathi Panditarajula Venkanna Babu v. Varalakshmi Finance Corporation, Rajahmundry, 1996 (4) ALD 453 (DB), wherein the steps necessary to be taken before an order is passed were clearly discussed. Such an order is not to be passed in a routine manner merely for the asking for it but that the Court has to be satisfied on tangible materials placed before it that there are attempts at alinenation and that the steps are taken so as to delay or obstruct the judgment that may be ultimately passed against the defendant. Before passing an order, the defendant is first of all to be called upon to furnish security in the shape of specific sum to produce and place at the disposal of the Court, when required, the property specified by the plaintiff in his petition or such portion of it is as may be sufficient to satisfy the decree or call upon him to show cause as to why he shall not furnish security. But such an order can be passed only after the primary satisfaction of the obstructive conduct of the defendant. The ultimate attachment order can be passed only if the defendant either fails to show cause why the security shall not be furnished or faifs to furnish the security as required. From the impugned order in question, we do not find any discussion in that regard. The factors taken into consideration by the Court, as we have referred above, are not germane to passing an order under Order 38, Rule 5 of the Code of Civil Procedure. There is even no satisfaction, before the bank guarantee was called for, that the requisite primary satisfaction was reached and on what materials. The only allegation made by the respondent, as is reflected in Para 7 of the impugned order, is that if the appellants are allowed to take away the amounts from the garnishee, they would leave the jurisdiction of the Court and in such case, it would be difficult for the respondent to realise the amount. This in itself is not sufficient to pass an order under Order 38, Rule 5 of the Code of Civil Procedure unless it is pleaded that by their impugned conduct, they were intending to delay or obstruct the judgment that may be passed.
4. In the circumstances, the impugned order is not sustainable and is set aside and the matter is remanded to the learned III Additional Subordinate Judge, Visakhapatnam, to hear the parties afresh and decide the matter keeping the law as propounded in Sripathi Panditarajula Venkanna Babu v. Varalakshmi Finance Corporation, Rajahmundry (supra), in view. The appeal is thus allowed.
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