M/S JTL Projects (Private) Limited & Others v. M/S Teliz Realtors & Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH TUESDAY, THE 20TH DECEMBER 2011 / 29TH AGRAHAYANA 1933 OP(C).No. 4135 of 2011(O) ------------------------IA NO.4710/2011 IN OS.380/2010 of II ADDL.SUB COURT,ERNAKULAM .................... PETITIONER(S): ------------------------------ 1. M/S.JTL PROJECTS(PRIVATE) LIMITED, 33/2346-B,GEETTHANJALI ROAD,VYTTILA P.O, ERNAKULAM,KOCHI 682 019 2. SMT.LALY JOSEPH, WIFE OF JOSEPH, MANAGING DIRECTOR,M/S.JTL PROJECTS(PRIVATE) LIMITED GEETTHANJALI ROAD,VYTTILA P.O, ERNAKULAM,KOCHI 682 019 3. V.J.JOSEPH,RESIDING AT CC NO.33/2346-B, GEETHANJALI ROAD,VYTTILA P.O, ERNAKULAM KOCHI 682 019 BY ADV. SRI.S.EASWARAN SRI.P.MURALEEDHARAN (IRIMPANAM) SRI.M.A.AUGUSTINE RESPONDENT(S): --------------- 1. M/S.TELIZ REALTORS, HAVING ITS OFFICE AT NO.26. M.G.NAGAR,PERROKADA,THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING PARTNER PALLITHOTTATHU EASO THOMAS, PIN - 695 001 2. PALLITHOTTATHU EASO THOMAS @ P.E.THOMAS SON OF P.T.EASO,RESIDING AT 26 M.G.NAGAR, PEROORKADA P.O,THIRUVANANTHAPURAM, PIN- 695 001 3. SHEILA ELIZEBETH THOMAS, WIFE OF PALLITHOTTATHU EASO THOMAS, RESIDING AT DO.DO. 4. DR.GEORGE MATHEW, SON OF LATE REV.A.C.MATHEW,HOUSE NO.6,GREEN VALLEY VILLAS,VAZHAKKALA, B.M.C. P.O,ERNAKULAM DISTRICT, REPRESENTED BY POWER OF ATTORNEY HOLDER PALLITHOTTATHU EASO THOMAS @ P.E.THOMAS RESIDING AT DO.DO., PIN 682 021 OP(C)NO.4135/2011 2 5. DR.NIRMALA GEORGE MATHEW, WIFE OF DR.GEORGE MATHEW,DO.DO ADV. SRI.THOMAS ABRAHAM FOR R1-2 SMT.MERCIAMMA MATHEW FOR R1-2 SRI.K.S.HARIDAS FOR R1-2 SRI.V.RENJITH KUMAR FOR R1-2 THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON ON 20/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP(C)NO.4135/2011 ## APPENDIX PETITIONER(S) EXHIBITS EXT.P1 COPY OF PLAINT DATED 25.5.2010 O.S. NO.380 OF 2010 FILED BY THE RESPONDENTS BEFORE THE COURT OF THE SUBORDINATE JUDGE,ERNAKULAM EXT.P2 COPY OF ORDER DATED 7.9.2010 OF THE COURT OF THE II ADDITIONAL SUB JUDGE,ERNAKULAM IN I.A.NO.4611 OF 2010 IN O.S. NO.380 OF 2010 EXT.P3 COPY OF AFFIDAVIT AND APPLICATION DATED 13.3.2011 FOR AMENDMENT OF THE PLAINT IN O.S. NO.380 OF 2010 FILED BY THE RESPONDENTS. EXT.P4 COPY OF ADDITIONAL WRITTEN STATEMENT DATED 15.6.2011 FILED BY THE PETITIONERS TO THE AMENDEED PLAINT EXT.P5 COPY OF PETITION FOR ATTACHMENT ALONG WITH AFFIDAVIT DATED 3.8.2011 FILED BY THE RESPONDENTS IN O.S.NO.380 OF 2010 EXT.P6 COPY OF COUNTER AFFIDAVIT DATED 10.8.2011 FILED BY THE PETITIONERS AGAINST I.A.NO.4710 OF 2011 IN O.S.NO.380 OF 2010 EXT.P7 COPY OF ORDER DATED 23.11.2011 OF THE COURT OF THE II ADDITIONAL SUB JUDGE,ERNAKULAM IN I.A NO.4611 OF 2010 IN O.S. NO.380 OF 2010 EXT.P8COPY OF NOTICE UNDER APPENDIX FORM 5 – ATTACHMENT BEFORE JUDGMENT WITH ORDER TO CALL FOR SECURITY FOR FULFILMENT OF DECREE RESPONDENTS' EXHIBITS : NIL //TRUE COPY// ## **THOMAS P. JOSEPH, J.** ## **-------------------------------------O.P.(C) No.4135 of 2011 -------------------------------------Dated this the 20[th] day of December, 2011.** ## **JUDGMENT** Ext.P7, order passed by the learned Additional Sub Judge-II, Ernakulam on 23.11.2011 on I.A.No.4710 of 2011 in O.S.No.380 of 2010 is under challenge. By the said order, learned Sub Judge ordered a conditional attachment of property of petitioners 2 and 3 who are the Managing Director and Director of 1[st] petitioner, a company registered under the Companies Act. 2. Respondents sued petitioners for recovery of money and filed I.A.No.4611 of 2010 for attachment of properties of petitioners 2 and 3, before judgment. Petitioners resisted the application. Learned Sub Judge dismissed that application by Ext.P2, order. Later, respondents filed Ext.P3, application for amendment of plaint to incorporate a plea of fraud against petitioners in their (alleged) dealings with the respondents. I am told that some documents were also produced by the respondents in support of that plea. That application was allowed and the plaint was accordingly amended. In answer to the amended plaint, petitioners filed Ext.P4, additional written statement denying the allegations. That was followed by the respondents filing Ext.P5, application for attachment of property of petitioners 2 and 3 before judgment. Petitioners preferred Ext.P6, objection. They contended that the application is barred by res judicata in view of Ext.P2, order, that there is no scope of attaching **OP(C)No.4135/2011** 2 personal properties of petitioners 2 and 3 and that at any rate, prayer for attachment is without bonafides. Learned Sub Judge by Ext.P7, order allowed the application and attached properties of petitioners 2 and 3. 3. It is contended by the learned counsel that Ext.P7, order cannot be sustained for various reasons including that personal properties of petitioners 2 and 3 cannot be attached for the liability if any, of 1[st] petitioner - company in the absence of any contract between petitioners 2 and 3 and the respondents making their personal properties liable for the liability of 1[st] petitioner. It is argued that particulars of (alleged) fraud are not pleaded in the plaint as required by Order VI, Rule 4 of the Code of Civil Procedure (for short, “the Code”). Further contention is that Ext.P7, order is void as no notice as required by Subrule (1) of Rule 5 of Order XXXVIII of the Code is served on petitioners requiring them either, to furnish security for the plaint claim or to show cause why they shall not furnish security. Learned counsel has placed reliance on the decisions in **Mohammed Hariss v. Fathima (1993 (1) KLT 558)** and **Retnamma v. Govinda Pillai (1995 (1) KLT 405)** . It is pointed by the learned counsel that in view of Sub-rule (4) introduced in Rule 5 of Order XXXVIII by the Amendment Act 104 of 1976, attachment made without complying with Sub-rule (1) of Rule 5 of Order XXXVIII of the Code is void. Learned counsel has invited my attention to Ext.P8, notice issued by the learned Sub Judge, according to the learned counsel under Sub-rule (1) of Rule 5 of Order XXXVIII of the Code calling upon petitioners, subsequent to Ext.P7 order to show cause why they shall not furnish security for the plaint claim. **OP(C)No.4135/2011** 3 4. Learned counsel for respondents contended that it is after hearing petitioners also that Ext.P7, order was passed. According to the learned counsel, the mere fact that a notice was not issued in the prescribed form by itself is not sufficient to make Ext.P7, order void. It is argued that sufficient particulars of fraud are pleaded by respondents in the amended plaint which is supported by documents produced. It is also argued by the learned counsel that in view of the said allegations which is prima facie proved by the documents produced, learned Sub Judge was correct in attaching properties of petitioners 2 and 3. 5. Having heard learned counsel on both sides, I am of the view that this Original Petition can be disposed of on the short question whether attachment ordered as per Ext.P7, order is void having regard to the contention that it is ordered in violation of Sub-rule (1) of Rule 5 of Order XXXVIII of the Code. 6. Ext.P7, order dated 23.11.2011 states that I.A.No.4710 of 2011 is allowed and that properties of petitioners 2 and 3 are attached. It is seen from Ext.P8, that subsequent to Ext.P7, order learned Sub Judge has issued notice dated 28.11.2011 to the petitioners in Form No.5 of Appendix F of the Code (the form of notice prescribed under Sub-rule (1) of Rule 5) calling upon petitioners to furnish security or show cause why they shall not furnish security for the plaint claim. 7. Sub-rule (1) of Rule 5 of Order XXXVIII of the Code provides that where at any stage of the suit the court is satisfied by affidavit or otherwise that **OP(C)No.4135/2011** 4 the defendant with intent to obstruct or delay the execution of any decree that may be passed against him is about to dispose of the whole or any part of his property or 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 either to furnish security or to appear and show cause why he should not furnish security. That notice is to be issued in Form No.5 of Appendix 'F' of the Code. Sub-rule (3) of Rule 5 empowers the court to direct conditional attachment of the whole or any portion of the property so specified while issuing the notice contemplated under Sub-rule (1) of Rule 5. Sub-rule (4) of Rule 5 incorporated by Act 104 of 1976 states that if an order of attachment is made without complying with the provisions of Sub-rule (1) of Rule 5, such attachment shall be void. 8. Going through Ext.P7, order dated 23.11.2011 and Ext.P8, notice dated 28.1111 (in Form No.5 of Appendix F) issued under Sub-rule(1) of Rule 5 of Order XXXVIII of the Code it is clear that it is without following the procedure laid down in Sub-rule (1) of Rule 5 that learned Sub Judge passed Ext.P7, order attaching property of petitioners 2 and 3. Issuing notice under Sub-rule (1) of Rule 5 after allowing the application and attaching the properties is just like putting the horse behind the cart. The procedure to be followed was by issuing notice in Form No.5 of Appendix F directing to furnish security or to show cause why security shall not be furnished and in the meantime, placing property under conditional attachment, hearing the objection of petitioners and then either lifting the attachment or making conditional attachment absolute in case **OP(C)No.4135/2011** 5 petitioners failed to furnish security as may be ordered. The procedure adopted by the learned Sub Judge is illegal. 9. Next question is whether for the said reason attachment as per Ext.P7, order is void? In **Mohammed Hariss v. Fathima** (supra) a Division Bench of this Court considered the question and held that when the attachment is not accompanied by an order directing the defendant to furnish security within the specified period or to appear and show cause why he should not furnish security, the order of attachment is a nullity and not a curable irregularity. The Division Bench also held that non-issue of the order in the appropriate form is fatal. But, the latter proposition was not accepted by the Full Bench in in **G.C.D.A. v. Harrisons Malayalam Ltd. (2000 (2) KLT 152** ). There, it was held that procedural law is handmade for justice and that procedural law cannot defeat justice. However, the Full Bench did not interfere with the decision of the Division Bench in **Mohammed Hariss v. Fathima** that an order of attachment not accompanied by a notice under Sub-rule (1) of Rule 5 of Order XXXVIII of the Code is void. The decision in **Mohammed Hariss v. Fathima** was followed by a learned Single Judge in **Retnamma v. Govinda Pillai** (supra) 10. In the light of the statutory provisions and the decisions referred to above, it follows that learned Sub Judge has committed an illegality in passing Ext.P7, order without issuing a notice under Sub-rule (1) of Rule 5 of Order XXXVIII of the Code requiring petitioners either to furnish security for the plaint claim or to show cause why they shall not furnish such security. It follows that Ext.P7, order as Sub-rule (4) of Rule 5 of Order XXXVIII of the Code states and **OP(C)No.4135/2011** 6 held in the decisions supra, is void. 11. In the light of what I have stated with respect to Ext.P7, order it is not necessary for me to go into other contentions raised by the parties. Now that learned Sub Judge has issued Ext.P8, notice under Sub-rule (1) of Rule 5 of Order XXXVIII of the Code on Ext.P5, application petitioners can raise all their objections to that application. Hence all the findings entered by the learned Sub Judge on Ext.P5, application are to be vacated and, I do so leaving it open to be decided afresh pursuant to Ext.P8, notice. 12. Learned counsel for respondents submitted that consequent to this judgment it is possible that before learned Sub Judge passes orders on Ext.P5, application pursuant to Ext.P8, notice petitioners 2 and 3 might encumber or alienate their property in which case it may not be possible for the respondents to realise the amount in case a decree is passed in their favour. Learned counsel requested that a direction may be given to the petitioners not to alienate or encumber the properties sought to be attached. Learned counsel for petitioners resisted the request contending that such a direction is beyond the scope of this Original Petition. 13. Having regard to the circumstances stated and in view of the claims and counter claims made by parties it is appropriate that petitioners 2 and 3 are directed not to encumber or alienate the properties sought to be attached by Ext.P5, application until learned Sub Judge passes appropriate orders on Ext.P5, application. Resultantly this Original Petition is disposed of as under: **OP(C)No.4135/2011** 7 i. Ext.P7, order is set aside. ii. Ext.P5, application is remitted to the learned Additional Sub Judge-II, Ernakulam for fresh decision pursuant to Ext.P8, notice issued to the petitioners. iii. All findings entered by the learned Sub Judge in Ext.P7, order are vacated. It is made clear that it is open to the learned Sub Judge to consider the contentions raised by the parties while considering Ext.P5, application and pass appropriate orders untrammelled by the decision earlier made and the direction contained in this judgment against petitioners and stated hereunder. iv. It is directed that petitioners 2 and 3 shall not, until learned Sub Judge passes appropriate orders on Ext.P5, application, alienate or encumber the properties sought to be attached by Ext.P5, application. v. Learned Sub Judge shall dispose of Ext.P5, application as early as possible having regard to the urgency pleaded by both sides. **THOMAS P.JOSEPH, Judge.** **cks**