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Attachment Before Judgement Before Indian Courts

There are times and situations which comes before the Court during the proceeding of the suit when the Court has to make certain decisions which do not have the life-long effect as it depends on the facts of the case either the time is fixed by Court or until the final judgement is passed as it remains in existence by the discretion of the Court.

As per section 94(e) of the Code of Civil Procedure, the Court has the power to make interlocutory orders after the plaintiff files the suit and before the suit is finally disposed off. The Court can ask for the attachment of property, commissions, certain payment to me paid or temporary injunctions as it is a legal process to ensure the satisfaction of the judgement.

Though we hear attachment of property before judgement every day, there are several intricacies also which we have to understand in detail. The attachment of the property before judgement is covered under Order 38 rule 5 of the Civil Procedure Court, 1908. It is important to understand the leading cause for which a person is called for the attachment of property before judgement. The primary purpose of an attachment before the judgement is to enable the plaintiff to dispose the amount of decree if one is eventually passed in favour of them.

The amount is ultimately made from the property of the defendant as held in the case of Raman Tech And Progress Engineering Corporation v. Solanki Traders [1]. The sole jurisprudence behind Order38 rule 5 is to protect the interest of the plaintiff against the loss that can arise from the defendant if he sells, and that is pending suit property. An attachment before judgement is in the nature of an interlocutory order.

The division bench of Hon'ble High Court of Andhra Pradesh held that the attachment of the property should be specific and clear in its purpose which was held in the case of Gurunadha Rao v Gamini Krishnayya [2], Lordship Dawson-Miller C.J stated that:
the power given to the Court to attach a defendant property before judgement, is never meant to be exercised lightly or without clear proof of the existence of the mischief aimed at in the rule which was later on supported by the judgement Shivaraya and Others v Sharnappa[3] and others.

Later on, the Court said the that the interlocutory orders have to be passed in the exercise of the Court sancillary powers which was followed by the Court in case of Bankim Chandra and Others v Chandi Prasad [4] and TavvalaVeeraswamy's v PulimRamanna [5]case also.

The Court can at any time of the suitask for the attachment of property for the satisfaction of the Court by affidavit so that the defendant with intention does not delay the process of the Court or to delay the process of execution of the degree if the Courtpasses an order against the defendant or is about to abscond the local jurisdiction of the Court or try to leave the country after disposing of the said property against which the Order has been passed.

The grounds for the attachment of the property before the judgement is passed are similar. However, the only difference is the property which is attached by the defendant which must not be tempered, and there should not be any prejudice caused to the plaintiff if the Order is passed in his favour by the Court. This attached property by the Court before judgement is appealable and revisable under rule 2,3 and 6 of order 39.

Since the attachment of property before judgement is itself are of serious nature. However, still, the Court has to check whether two precedents conditions are satisfied to pass such an order.

The Court should have reason to believe that thesuit filed by the plaintiff must be bona fide and his cause of action must be prima facie, and, another condition the Court must have reason to believe that the defendant will remove himself or sell the aforesaid property from the ambit of the power of the Court if this extraordinary power of the attachment of the property is not exercised. There are some exemptions and circumstances, also where the attachment of property is not allowed by the Court.

As in the case, where the unsecured debt is converted into the secured debt or for ensuring the easy execution of the decree. Section 60 of C.P.C. brings under its purview property that can be attached before the judgement and the property that cannot be attached. All sealable property can be attached i.e. lands, goods, money, cheques, promissory notes, government securities, buildings debts and all other belongings of the judgement debtor may be attached and sold in execution of a decree against him by the Court.

All other property can also be attached by the Court which does not completely belong to the debtor, but the debtor has a disposing power over it which can be exercised by the debtor for his benefit. The decree, as mentioned in section 60 of C.P.C., is only a monetary decree and not a mortgage decree. As per section 60(1) of the C.P.C. includes the property that cannot be attached before the judgement, it includes an exemption on necessary apparel, bedding, house of agriculturalists, wages, pensions, right of future maintenance, salaries etc.

The Court cannot order for the attachment of any agriculture production which is in possession of the agriculturist as held in case of Pellur Venkatasubbamma V. Devvur Narayana Reddi[6]the Court dismissed the appeal filed by the plaintiff and said that nothing in this Order should be deemed to authorize the plaintiff to apply for any attachment of the agriculture produce by the agriculturist. The same principle is later on followed in the case of Land Acquisition Officer (S.D.C.) Soma alia Project Office, Rajampet Vs. Y.Vijaya Kumar [7].

Requirements of attachment

It is a well-settled fact that petitioner having a just or valid claim or a prima facie case will not entitle the plaintiff to an order of attachment before judgement unless the plaintiff also establishes that the defendant is trying to remove or dispose of his assets with the intention of defeating the decree that magistrate has passed.

Equally well settled in the position that even where the defendant is removing or disposing of his assets an attachment before judgement will not be issued if the plaintiff will not be able to satisfy that he has a prima facie case. The provision Under order 38, rule 5 of C.P.C. is a drastic and extraordinary power.

Such power should not be exercised mechanically for the asking. It should be used sparingly and satisfy in accordance with the rule. Any attempt by a plaintiff to utilize the provision of order 38 rule 5 as leverage for coercing the defendant to settle the suit claim should be discouraged. A defendant is allowed to deal with his property because the suit is filed or about to be filed against him.

Shifting of property from one place to another or removal of machinery to other premises by itself is not a ground for granting attachment before judgement. The Court can order for the attachment of the property, which is not in his jurisdiction. Section 136 of C.P.C. envisages that the Court, with his discretion, can make an order of attachment and send to the district court in whose jurisdiction that property is situated. There is no such in the law which probate the Court for attaching the property which does not lie in the territories of his jurisdictions a rule in the case of Durbhaka Venkatasubramanya Sharma and another Vs. State Bank of India, Banking corporation[8].

Principles relating grant of attachment of property

The Court would not be justified in issuing an order before judgement, or for security merely because the Court thinks that no harm would not be done. An allegation that the defendant was selling off his/her/their properties is not sufficient for the Court to order an attachment of property.

The power to attach the property before judgement should not be exercised mechanically or merely for the asking as its an extraordinary power covered under Order 38 rule 5 of C.P.C. and its purpose isn't tochange an unsecured debt into a secured debt. The mere fact of transfer is not enough since nobody can be prevented from dealing with his properties, simply because a suit has been filed.

The Plaintiff must prove that the transfer is intending to delay or defeat the plaintiff's claim. Its the duty of the plaintiff to show that his claim is bonafide and also satisfy the Court that the defendant is trying to dispose of the property with wrongful intention of obstructing or delaying the process of execution of any order that may be passed against the defendant before power is exercised under order 38 rule 5 of C.P.C.

The Court should also keep in view the principle relating factors before granting the permission of attachment of property before the judgement as a rule in case of Prem Raj Mundra v Md. Maneck Gazi[9] that the attachment before judgement is considered as very harsh remedy as it prohibits the defendant from dealing with his property before the final resolution of the overall dispute is passed. The Court must look to the conduct of the parties immediately before suit, to examine the surrounding circumstances and draw an inference.

The mere removal of properties outside the jurisdiction is not enough but where the defendant with notice of the plaintiff's claim suddenly begins disposingof his properties outside the jurisdiction of the appropriate Court without any other satisfactory reason as adverse inference may be drawn against the defendant.

Therefore, the attachment before a judgement must be to prevent justice transfer or alienation. The Court should be satisfied that the defendant is about to dispose of whole or part of the property and that disposal is intending to obstruct or delay the execution of the decree. Before passing the Order for the attachment of the property before any judgement is given so that there should not be any prejudice caused to both the parties.

When attachment before judgement can be ordered

As discussed in order 38 rule 5 that before exercising power under the said rule, the Court should be satisfied that the claim by the plaintiff is bonafide and there is a reasonable chance of Order being passed against the defendant. If the plaintiff fails in proving the wrongful intention of the defendant, then the Court will not go further and will not examine that whether the interest of the plaintiff is protected or not by exercising power under Order 38 Rule 5 of C.P.C.

It is a well-settled fact that just having a valid claim will not entitle the plaintiff to an order of attachment before the judgement as it cause prejudice with the other parties, it is essential to establish that the defendant with wrongful intention is disposing off his property for defeating the decree that may be passed against him. Therefore it is essentialto prove by the plaintiff in the Court, the wrongful intention of the defendant to invoke the Order of attachment before the judgement is being passed.

Modes/ Procedure of Attachment

The first step for the attachment of property is to issue a prohibitory order to the judgement debtor and the public generally, this Order will restrict the judgement debtor for disposing of the attached property or transferring it. The judgement debtor is also bound to attend the Court on the date prescribed by the Court for deciding the terms of the proclamation of sale.

Generally, for the immovable property two copies of the prohibitory Order is sufficient for the attachment but, if the land is attached from which the revenue is paid to the government three copies of prohibitory is required to make the valid attachment of the property. Both the detail must be given in the schedule attached with the Order and details provided in the schedules of the property given in warrant should be same.

Later on, this copy is to be submitted to the Nazir and Nazir will then endorse the summons and return it to the Court within the stipulated time. Where any individual deputed by the Nazir finished the above work of attachment of property, a different report expressing the way wherein, the day and hour at which he did such act must be attached. The customary practice will be carried out for the proclamation of the Order.

The copy of it will be affixed on the conspicuous part of the property and the Courthouse[10]After this, the reader has to record a note stating the fact that all the legal formalities have been followed and have been complied with it. The presiding officer will take charge to ensure that the report given does not have any misinformation in it. The Court should ensure that all the legal formalities have been completed to prevent any sort of wrongdoing as it might affect the parties[11].

The civil Court also applies appropriate consideration in the process of attachment of property and take necessary action if required. No property can be declar to be attached until the court order for the attachment of the property as held in the case of Muthiah Chettiar v Palaniappa Chettiar[12] where the Court says that the things prescribed in the code have to be followed.

The Court says that it is important to have an order of attachment by the Court and in the execution of that order formalities prescribed therein have to be complied with so that the judgement debtor could not alienate the property and the plaintiff is not at any loss. When the property attached is a movable property but not agriculture produce then that property is seized by the attaching office which keeps the attached property custody.

But, it the property that is seized by the officer is perishable, or if the cost of keeping it will exceed the value then the attaching officer can sell it immediately, and if the officer fails to sell off the property then he can hand over the attached property custody to either of the parties and that party will be liable to produce such property before the Court and if any loss or damage caused to the attached property then the custodian will be responsible for that loss occurred.

Whereas if the attached property is agriculture produce, then the copy of the warrant of attachment can be affixed on the property on which that crop is grown. It is the duty of the Court made in the application the time at which that crop is being cut or gathered if the Court attaches growing crops. The judgement debtor should make every essential step for preserving it and if in case he fails to do so, then the decree-holder can carry out these needful steps and can recover the expenses from the judgement debtor.

As in case of Krishnamukhlal v Bhawan,[13]it was decided by the Court that the attachment of agriculture land is invalid as Order 21 rule 54 of C.P.C. would not prevent the Court for selling of the properties as the law doesn't state that an immovable property can't be sold in execution of a decree without attaching it.

Removal and determination of attachment

The property attached before the judgement can be deemed to be withdrawn in the following cases.
  1. the decreed amount, all cost, charges and expenses from the attachment of property are paid into the Court, or
  2. Satisfaction of the decree is made through the Court or certified to the Court, or
  3. the order is set aside or reversed.[14]

In the case of immovable property, the withdrawal of attachment can be proclaimed by the judgement debtor, and copy of that can be attached in a conspicuous part of the property. In the case where the Court attaches the property and later on court order for dismissing such an execution, then the Court will direct the status of the attachment, and in case court fails to give a specific direction than it is implied that the attached property has been ceased.

Private alienation of property after attachment and before the judgement
Attachment of property creates no changes as it only confers a right on a decree-holder to keep the attached property in the custodyof theCourtas per the law. The rights of the judgement debtor to sell or alienate of the attached property is taken by the Court, and it does not confer any title on attaching the creditor. As per section 64 of C.P.C.

If the judgement debtor still alienates the attached property, then such transfer is considered void by the Court as held in the case of HamdaAmmal Vs. Avadiappapathar[15] if the Court makes any attachment, then any private transfer or delivery of the attached property or any interest therein and anypayment to the judgementdebtor of any debt shall be void as against all claims enforceable under the attachment.

The main objective of this section is to prevent the fraud caused by the judgement debtor. The attachment of the property should be done in accordance with the procedure prescribed by the C.P.C. In case ofimmovable property, a mere order of attachment is not sufficient to render subsequent transfer invalid must be made in a manner as described in C.P.C. under Order 21 rule 54. But, this section does not apply in the case where the agreement of alienation was already done before the attachment as it does not affect the rights of the persons that are not parties of the suit.

The court rule in the case of J. Mathivanan and Ors. vs. Tamil Nadu Khadi Village Industries Board and Ors[16] that attachment before the judgement shall not affect the rights of the owner have prior to the attachment, as it will be unfair with the parties that are not the part of the suit.

The same question was arise in the case of Vannarakkal Kallalathil Sreedharan Vs. Chandramaath Balakrishnan [17] and in Paparaju Veeraraghavayya vs. Killaru Kamala Devi [18] that whether the agreement of sale entered before the attachment of property by a judgement debtor will be valid or not. The Courtheld that agreement to the sale wouldve void if it is done with an intention to fraud the plaintiff.

Difference between attachment before judgement and attachment after judgement
There is a slight difference between the attachment of property after and before judgement as of the property which is attached by the Court before the Court does not reattach judgement after the judgement. The attachment made by the Court before judgement is not an attachment for enforcement of the decree as it is a step for preventing the debtor from disposing of the property or delay in the process of the Court.

As in the case of Parur Central Bank Ltd. v A.C Chavko[19](1989) and S.P. Vasakumar Pillai v The Motor Accidents Claims [20](2008) it was decided by the Court that an attachment made by the Court before the judgement act as the security of the Court feels that defendant is trying to sell his property with the intention of fraud with the plaintiff. The attached property can later on used to satisfy the decree, in case the order goes in favour of the plaintiff.

Whereas, an attachment made after the judgement is made for the immediate purpose for concealing the degree into execution as held in case of Sardar Govindrao Mahadik and Anr v Devi Sahai and Ors[21] that the attachment of property after judgement does not defeat the rights of the defendant as the Order has already passed against him by the Court.

Conclusion
The civil procedure code includes lots of procedures and modes of attachment of different kinds of property. The attachment is the first step, and then the sale is executed after the attachment but in few cases the property can be sold without the attachment, which is not irregular. Still, the right procedure is to be followed. Section 65 to 73 and Order 21 Rules 64-94 deals with the sale of the property. The Court appoints the officer to sell the property for the execution of the decree.

All the procedure dealing with the attachment of property is covered under Order 21 of the Code with all its aspects. The decision of attachment of the property by the Court in favour of the plaintiff is a drastic action, and Court must take this decision with due care and defendant should also be allowed to prove the cause why the Court should not take his right to deal with his property within the time given by the Court.

If he fails to show then, the Court can order for attachment of property with a reason to believe that the judgement debtor with wrongful intention is trying to dispose himself or his property from the jurisdiction of the Court before giving Order of attachment under Order 38 rule 5 of C.P.C.

Therefore, it is clear that all the essential requirements for attachment must be proven in the Court as pointed out in the decision of Renox Commercials Limited v Inventra Technologies private limited [22]that the defendant is trying to alienate the property or his about to remove the property from the Court's jurisdiction with a wrongful intention of causing an obstruction or trying to delay the execution of the decree passed against the defendant.

For an order of attachment of property, it is also important for the plaintiff to prove his plea is bonafide and the defendant is trying to defraud him with his cause of action as held in case of R.Ramesh v R.Ranveender[23]2014.

End-Notes:
  1. Raman Tech And Progress Engineering Corporation v. Solanki Traders(2008) 2 SCC 302 (India)
  2. Gurunadha Rao v GaminiKrishnayyaAIR (1951) Cal 156 (India)
  3. Shivaraya and Others v SharnappaAIR 1968 Mysore 283 (India)
  4. Bankim Chandra and Others v ChandiPrasad AIR 1956 Pat 271(India)
  5. TavvalaVeeraswamy's v PulimRamanna(1935) 68 MLJ 444 (India)
  6. PellurVenkatasubbamma V. Devvur Narayana Reddi(LQ 1938 HC O383)(India)
  7. Land Acquisition Officer (S.D.C.) Soma alia Project Office, Rajampet Vs. Y.Vijaya Kumar2010 (1) ALT 371(India)
  8. DurbhakaVenkatasubramanya Sharma and another Vs. State Bank of India, Banking corporation1996 (4) ALT 1028(India)
  9. Prem Raj Mundra v Md. Maneck Gazi AIR 1951 Cal 156(India)
  10. Civil Procedure Code 1908, O.21 R.54(2)(India)
  11. Civil Procedure Code 1908, O.21 R.90(India)
  12. MuthiahChettiar v PalaniappaChettiarAIR 1928 PC139(India)
  13. Krishnamukhlal v BhawanAIR 1974 Guj.L(India)
  14. Civil Procedure Code 1908, O.21 R.55(India)
  15. HamdaAmmal Vs. AvadiappapatharMANU/SC/0521/1991(India)
  16. J. Mathivanan and Ors. vs. Tamil Nadu Khadi Village Industries Board and OrsMANU/TN/7593/2018(India)
  17. VannarakkalKallalathilSreedharan Vs. Chandramaath Balakrishnan MANU/SC/0460/1990(India)
  18. Veeraraghavayya Vs. Killaru Kamala Devi ANU/TN/0031/1934(India)
  19. Parur Central BankLtd. v A.C ChavkoC.R.P. No. 425 of 1989(India)
  20. S.P. Vasakumar Pillai v The Motor Accidents ClaimsWP(C).No.21297 of 2008 (I)(India)
  21. Sardar GovindraoMahadik and Anr v Devi Sahai and Ors1982 AIR 989,1982 SCR (2) 186(India)
  22. Renox Commercials Limited v Inventra Technologies private limitedAIR 2000 Mad.213 (India)
  23. R.Ramesh v R.RanveenderC.M.A.No.2241 of 2013(India)

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