Avinash Constructions and Sri P.V. Venugopal Rao vs Mrs. P. Usha Rao and Financial Adviser and Chief Controller of Accounts, A.P. TRANSCO

Bilal Nazki, J.—Heard learned Counsel for the parties and with their consent this revision petition is disposed of at this stage.

It appears that the present petitioners are defendants 1 and 2 in the suit in O.S.No.296 of 2004 on the file of III Senior Civil Judge, City Civil Courts, Secunderabad. An application came to be filed under Order 38 Rule 5 of C.P.C. by the plaintiffs. Defendants 1 and 2 had already filed a caveat. Admittedly, the money is due to defendants 1 and 2 from defendant No.3. The learned Judge noted that a caveat had been filed by the respondents 1 and 2, who are the defendants 1 and 2, but even then he did not think it proper to issue a notice to the caveators before ordering attachment and directing respondent No.3 to with hold the payment of Rs.8,96,000/- which they were holding and which was payable to respondents 1 and 2. The money was due to respondents 1 and 2 even according to the trial court. The learned judge observed that no relief was claimed against respondents 1 and 2 and they are only formal parties to the petition. The only persons who were affected by the impugned order were respondents 1 and 2 and the judge noted it that the money held by respondent No.3 was payable to the respondents 1 and 2, even then, he stated that they are not necessary party. Even after that, the learned Judge did not even take care of following Order 38 Rule 5 of C.P.C. Before an order is passed under Order 38 Rule 5 of C.P.C., it is incumbent upon the civil Court to satisfy itself of the existence of the conditions laid down in Order 38 Rule 5 of C.P.C. It is also incumbent upon the Court to seek security from the party and in case the security is not provided, to show cause why the defendant should not furnish security. Rule 5 of Order 38 CPC is reproduced below,

"5. Where defendant may be called upon to furnish security for production of property, - (1) Where, at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the defendant, with 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, or

(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.

(2) The plaintiff shall, unless the Court otherwise directs, specify the property required to be attached and the estimated value thereof.

(3) The Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified.

(4) If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule, such attachment shall be void."

The conditions precedent for passing an order under Order 38, Rule 5 CPC are,

(1) Satisfaction of the Court whether the defendant is about to dispose of the whole or any part of his property, or

(2) the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court;

(3) the defendant shall be asked, within a time to be fixed by it, to furnish security, or;

(4) To show cause why such a security should be not furnished.

If these conditions are violated, the order becomes void in terms of sub-rule (4) of Rule 5 of Order 38 CPC. Therefore the order which the learned Judge has passed is void. He has not recorded the satisfaction as is required under Rule 5 of Order 38 CPC. He has not even asked for a security. On the other hand, he has held that the respondents 1 and 2 were unnecessary parties and he has surprisingly said no relief was claimed against respondents 1 and 2, although the relief was claimed only against the respondents 1 and 2 whose money was being attached.

For the reasons given hereinabove, the revision petition is allowed, impugned order is set aside and the matter is remanded back to the trial Court. The application shall be decided by the learned Judge keeping in view the observations made in this order and in accordance with law after hearing the parties. No costs.

Copy of this order be placed on the personal file of the Officer.