R.V. Khalilur Rahaman Sahib vs S.H. Syed Hussain

P.V. Rajamannar, C.J.—This civil revision petition originally came up for hearing before Ramachandra Iyer, J., who considered that the case

may be posted before a Division Bench in view of the conflict between the decisions in Rama Mudali Vs. Marappa Goundan, and Palanisami

Gounder v. Kaliappa Gounder, 50 Mad L.W. 640: (A.I.R. 1940 Mad 77).

This petition arises out of an application u/s 95, C.P.C., for the award, of compensation for attachment on insufficient grounds. It is sufficient to

state the following facts. The petitioner before us filed a suit, O. S. No. 385 of 1954, in the Court of the District Munsif, Vellore, against the

respondent to recover a sum of Rs. 1260-2-0. Along with the suit he also filed I. A, No. 1245 of 1954. for attachment before judgment of the

respondent''s residential house at Guddiyattam on 16-12-1954.

An interim order of attachment was passed and the property was actually attached on 17-12-1954. On 12-1-1955 time till 19-1-1955 was given

to die respondent to file a counter-affidavit. The counter-affidavit appears to have been filed and the matter was posted for enquiry to 27th

January. Eventually, on 4th March 1955, the suit itself was decreed ex parte and the attachment was made absolute. Subsequently, the respondent

appears to have got the ex parte decree set aside, hut evidently no application was matin to have the attachment set aside.

The respondent thereafter filed the application, out of which this revision petition arises. I.A. No. 205 of 1955, u/s 95, C. P. C., alleging that the

attachment was procured maliciously on untrue allegations. The respondent stated that he was possessed of vast properties and extensive lands

and he was also carrying on a lucrative business. The attachment was therefore obtained on false and insufficient grounds with a view to injure his

reputation. The respondent claimed damages in a sum of Rs. 1000.

The learned District Munsif held that the attachment was effected mala fide and on insufficient grounds. He overruled an objection that the

application was not maintainable, because there was no order setting aside the attachment. He considered a sum of Rs. 300 would be adequate

compensation and accordingly directed the petitioner to pay the said amount. There was an appeal by the petitioner before us to the Subordinate

Judge, Vellore, but the appeal was dismissed.

The learned Subordinate Judge agreed with the District Munsif on all points. He found that the attachment was secured on false and insufficient

grounds. He also held that the petition was maintainable though the order of attachment had been made absolute and there was no order setting

aside the attachment. The petitioner seeks from this Court a revision of the said order of the Subordinate Judge confirming the order of the District

Munsif.

Obviously, this Court cannot go behind the findings of the Courts below that the attachment was procured on false and insufficient grounds and

that the sum of Rs. 300 would be adequate compensation. The argument was therefore confined to the question whether the respondent could be

granted any compensation so long as there was an Order of attachment which had been made absolute and there was no order setting aside the

said attachment.

Before we deal with the decisions cited to us, we would point out that there are two aspects from which the question can be approached. One is

that an application u/s 95, C. P. C., is not maintainable once an attachment has been made absolute after notice and there has been no subsequent

order cancelling such attachment. This is the aspect emphasised in the decisions cited to us.

The other aspect is not that the application itself is not maintainable but that the prior order of attachment which had been allowed to become final

would preclude the Court from holding that the attachment had been procured on false and insufficient grounds. The reasoning is as follows. If the

application for attachment had been made on false or insufficient grounds, then it would be open to the defendant on notice to come up and

convince the Court that there was no valid reason for ordering an attachment.

But if in spite of opposition by the defendant, the Court were to hold that there are good grounds for ordering attachment and make the attachment

absolute, how can it be held on a subsequent application (under Section 95, C. P. C.,) that the attachment was obtained on false or insufficient

grounds? The prior order of attachment which had become final would be circumvented. Bearing these two aspects in mind we shall deal with the

decisions cited to us. Before doing so we shall set out the material portion of Section 95, C. P. C.

93(1). Where, in any suit in which an arrest or attachment has been effected or a temporary injunction granted under the last preceding section:

In such circumstances, it seems hardly fair attachment or injunction was applied for on insufficient grounds .....the defendant may apply to the

Court, and the Court may, upon such application, award against the plaintiff by its order such amount, not exceeding one thousand rupees, as it

deems a reasonable compensation to the defendant for the expense or injury caused to him;

In Palaniandi Moopan v. Palaniyandi Moopan, 1931 M.W.N. 956, Cornish, J., held that the passing of an order absolute for attachment before

judgment is no bar to the entertainment of an application u/s 95, C. P. C., for compensation for obtaining such order on insufficient grounds. The

facts in this case were these. The plaintiff applied for and obtained an interim order of attachment be-fore judgment under Order 38, Rule 5. The

defendant by his counter-affidavit denied the plaintiff''s allegations, but the order of attachment was mode absolute on 5-11-1925.

In the counter-affidavit filed on behalf of the defendant, he reserved his right to apply for compensation u/s 95 and eventually the application u/s 95

was filed. The suit was de-creed in favour of the plaintiff on 22-10-1926. The District Munsif awarded compensation to the defendant on the

ground that the allegation made by the plaintiff was false. The order of the District Munsif was confirmed on appeal by the Subordinate Judge. It

was contended for the petitioner that in view of the order absolute, the Court had no jurisdiction to entertain the petition for compensation u/s 95.

The argument is thus stated:

The argument would seem to go to the length of proposing that when once the Court is satisfied that an attachment should be made absolute, and

that order is not appealed against, the question whether the attachment was applied for on insufficient grounds cannot be reopened by the party

aggrieved by the order.

A judgment of Ramesam, J., in an earlier case, Venkatapayya v. Venkatapayya AIR 1923 Mad 352, was relied upon but the learned Judge

Cornish, J., thought that the case before him differed from that before Ramesam, J. The conclusion of the learned Judge was that the right u/s 95 to

give compensation is independent of the passing of a prior absolute order of attachment. Beasley, C.J., took a different view in Rama Mudali Vs.

Marappa Goundan, . In that case the suit was one on a promissory note and the plaintiff obtained an interim order of attachment of thc defendant''s

cattle.

Later on, before the suit had been decided and without having obtained any order selling aside the order attaching the property, the defendant put

in an application for compensation on the ground that his cattle had been wrongfully attached. The learned Chief Justice held on the authority of

Lees v. Patterson, 1878 7 Ch D 866, and other cases that the application for compensation could not be made until in appropriate proceedings the

order of attachment had been set aside. The earlier decision in 1931 M.W.N. 956 was apparently not cited to the learned Chief Justice.

Palanisami Goundar Vs. Kaliappa Goundar, , considered both the decisions in Rama Mudali Vs. Marappa Goundan, . It is important to notice

that the learned Judge was dealing with two appeals, an appeal against an order making absolute an attachment before judgment, and another

appeal against the dismissal of an application u/s 95, C.P.C., for compensation for wrongful attachment. In the trial Court an application to vacate

an ad interim attachment and the application for compensation were heard together. The learned Judge observed:

In such circumstances, it seems hardly fair to apply as against the appellant the rule embodied in Rama Mudali Vs. Marappa Goundan, ,

according to which an application for compensation for wrongful attachment would not lie until the attachment itself has been set aside. The trial

Court had before it an application to set aside the attachment and abstained from passing orders on it until the hearing of the application for

compensation was finished. Similarly in this Court I have before me both an appeal against the order confirming the attachment and an appeal

against the dismissal of the application for compensation.

Incidentally ho referred to the decision of Cornish, J., in 1931 M.W.N. 958, and evidently the learned Judge thought that the view taken therein is

correct,. He then proceeds to comment as follows on the decision of Beasley, C.J., in Rama Mudali Vs. Marappa Goundan, :

.....with all respect to the learned Judge who decided the former case, it does seem to me that the requirements of an application u/s 95, should be

based on the language of the Section and not on rules obtaining in common law with reference to a similar but not identical common law remedy.

The decision in Rama Mudali Vs. Marappa Goundan, , which was a case in which damages for the wrongful issue of a writ of ne exeat were

refused on the ground that the writ had not been set aside. But it seems to me that no such preliminary step has been prescribed in Section 95

which alone governs the procedure in a summary application for compensation for wrongful attachment. I doubt whether one would be justified in

hedging this remedy round with restrictions which the section itself does not import.

These observations were really in the nature of obiter because there was a pending application for setting aside the order of attachment.

Pausing for a moment here, with respect, we agree with the opinion expressed by Wads-worth, J., that the setting aside of the order of

attachment is not an essential preliminary to the grant of compensation. An application u/s 95 cannot be dismissed in limine on the ground that there

is a subsisting order of attachment.

But the learned Judge has not dealt with the other aspect mentioned by us at the opening of the judgment, namely, that an order making the

attachment absolute after hearing the parties would mean that according to the Court the application for attachment was made on sufficient

grounds, and if that order has become final, it will not be open to the same Court on a subsequent application u/s 95 to hold to the contrary.

It should not be overlooked that the Court to which an application u/s 95 has to be made is the very Court which has passed the order of

attachment. This aspect is stressed by Ramesam, J., in AIR 1923 Mad 352, which was decided earlier than the cases above mentioned. In that

case, the District Munsif passed an order granting an ad interim injunction after notice to the defendant and after hearing both parties. Subsequently

the defendant furnished security and the temporary injunction was dissolved.

A few days later the defendant filed an application for compensation from the plaintiff on the ground that the application for temporary injunction

was made on insufficient grounds. The learned Judge held that the petition did not lie. He doubted whether an award of compensation can be made

in a case where the Order of injunction was passed after hearing both the parties and it was found that there were Sufficient grounds. He said:

In my opinion, the petition of the respondent does not lie. It is not pretended that the application was based on anything that appeared in the trial

of the suit (which actually took place in March 1921). It is doubtful whether an award of compensation can be made in a case where the order of

injunction was passed after hearing both the parties and it was found that there were sufficient grounds and the plaintiff has not ultimately failed in

his suit (see Roulet v. Fetterla, ILR 18 Bom 717). But assuming that even where after an order was made on hearing both parties and the plaintiff

has ultimately succeeded, a petition lies u/s 95 for compensation --such cases must be very rare indeed --the stage for such an application would

be only when the suit is heard. Upto then, such a petition would be premature--(see M.R.M.V.L. Firm of Madura Vs. P.S. Krishnaswami Ayyar, .

I am not saying that when the order was refused, compensation cannot be asked immediately without waiting for the suit. In my opinion, to allow a

petition of this kind, immediately after the main petition was disposed of and without fresh materials as for a review or such as may appear at the

trial of the suit, will be generally to permit a Court to come to a conclusion inconsistent with and opposed to its prior order. I do not think such an

anomaly is intended by Section 95.

With great respect, we find ourselves in entire agreement with this view which appears to us to be both common, sense and sound in law. In Gyan

Prakash Mital v. Kishorilal, ILR 1942 All 360 , the view taken by Beasley, C.J., in Rama Mudali Vs. Marappa Goundan, , was followed by

Yorke, J., who referred also to the decision of the Calcutta High Court in Satish Chandra Banerjee Vs. Munilal and Another, , where it has held

that the rightness or wrongness of the order for attachment before judgment could not be canvassed in a subsequent suit on the question of

damages for malicious prosecution, and such a suit was not maintainable where in the prior suit the order of attachment was not vacated and the

rights of the parties were determined on the basis that if was a right order. We look at the matter this way.

There is a prior binding order that there are sufficient grounds for making an attachment before judgment. That order has been allowed to become

final. So long as that order has not been set aside, either by appeal or review, or otherwise, an application u/s 95, C.P.C., cannot be allowed on

the ground that the order had been procured on insufficient grounds. It is really a case of applying the underlying basis of the rule of res judicata

embodied in Section 11, C.P.C., which may not in terms apply.

Before we apply this rule of res judicata, we think one essential condition must be satisfied. The Court must have heard and finally decided after

hearing the parties whether there are sufficient grounds for ordering attachment before judgment. If, on the other hand, an order of attachment was

only ex parte and there was no final order on the merits and after considering the objections of the defendant, then it will not be equitable to apply

the rule.

We realise that the view we are now taking is actually not to be found in any of the decisions cited to us. But we think it is the proper view to take.

In the present case though a counter-affidavit was filed by the defendant, there does not appear to have been any considered order passed by the

Court making the attachment absolute. Actually the attachment was made absolute on the day on which the decree was passed, almost

automatically.

It cannot be said that the Court had heard I and finally decided whether there were sufficient grounds for ordering the attachment. In these

circumstances, there was no bar to the application u/s 95, C. P. C. The decision of the Kerala High Court in Subrayan Chettiar Vs. Kochuvarkey,

, does not carry the matter further than Palanisami Goundar Vs. Kaliappa Goundar, . In view of the findings of fact on the other points which are

binding on us, the order for compensation must stand. The civil revision petition is dismissed but there will be no order as to costs.