Prakashan v. Clement @ James

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE K.HARILAL** **WEDNESDAY, THE 19TH DAY OF NOVEMBER 2014/28TH KARTHIKA, 1936** **OP(C).No. 1578 of 2013 (O) ---------------------------** **PETITIONER(S):** **---------------** **PRAKASHAN, AGED 66 YEARS, S/O.RAMAN, MANNALI HOUSE, CHERAI KARA, PALLIPPURAM VILLAGE.** **BY ADV. SRI.SAJAN MANNALI** **RESPONDENT(S):** **--------------** **CLEMENT @ JAMES, AGED 57 YEARS, S/O.ANTHAPPAN, THAIPARAMBIL HOUSE, ELOORKARA, ELOOR VILLAGE682 506.** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 19-11-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **OP(C).No. 1578 of 2013 (O)** ## **---------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **-----------------------** **EXHIBIT-P1: TRUE COPY OF ATTACHMENT PETITION DATED 22.7.2010 FILED BEFORE THE SUB COURT N.PARUR.** **EXHIBIT-P2: TRUE COPY OF REPORT ON ATTACHMENT PETITION DATED 26.8.2010 FILED BEFORE TEH SUB COURT N.PARUR. EXHIBIT-P3: TRUE COPY OF DECRE OF SUB COURT, N.PARUR IN O.S.NO.89/2004 DATED 27.10.2010. EXHIBIT-P4: TRUE COPY OF JUDGMENT OF SUB COURT N.PARUR IN O.S.89/2004 DATED 27.10.2010.** **EXHIBIT-P5: TRUE COPY OF EXECUTION PETITION FILED BY PETITIONER IN E.P.180/11 IN O.S.89/2004 DATED 23.6.2011. EXHIBIT-P6: TRUE COPY OF OBJECTION IN E.P.DATED 1.10.2011.** **EXHIBIT-P7: TRUE COPY OF DRAFT SALE PUBLICATION OF THE ATTACHED PROPERTY DATED 26.9.2011. EXHIBIT-P8: TRUE COPY OF ENCUMBRANCH CERTIFICATE DATED 26.7.2012 FROM THE ALANGAD S.R.O.** **EXHIBIT-P9: TRUE COPY OF OBJECTION FILED BY RESPONDENT AGAINST DRAFT SALE PUBLICATION.** **EXHIBIT-P10: TRUE COPY OF REVIEW PETITION FILED BY RESPONDENT AS E.A.725/2012 DATED 9.10.2012.** **EXHIBIT-P11: TRUE COPY OF OBJECTION FILED BY PETITIONER IN E.A.767/2012 IN E.P.180/2011 IN O.S.89/2004.** **EXHIBIT-P12: TRUE COPY OF ORDER IN E.A.767/2012 IN E.P.NO.180/2011 IN O.S.89/04 DATED 23.1.2013. RESPONDENT(S)' EXHIBITS: NIL** **//TRUE COPY//** **P.S. TO JUDGE** 'C.R.' ## **K. HARILAL, J.** **-----------------------------------------------------O.P.(c) No.1578 of 2013-O -----------------------------------------------------Dated this the 19[th] day of November, 2014** ## **JUDGMENT** The petitioner is the plaintiff in O.S.No.89 of 2004 on the files of the Principal Sub Court, North Paravur as well as the petitioner in E.P.No.180 of 2011 filed therein. The suit was one filed by the petitioner for realisation of money from the respondent, amounting to Rs.2,75,000/- with interest, based on a promissory note executed by the respondent, in favour of the petitioner. The respondent in his written statement denied the borrowal of the said amount from the petitioner. In the suit, the petitioner has filed I.A.No.2064/2004 praying for attachment before judgment of the property of the defendant under **O.P.(c) No.1578 of 2013** -: 2 :- Order 38 Rule 5 of the Code of Civil Procedure. The court below had allowed the I.A. and ordered attachment of the respondent's property having an extent of 20 cents with a residential building therein. The attachment was effected on 26/08/2004 and a report has been submitted before the court to that effect. Thereafter, the case was listed for evidence on 5/2/2007. The respondent was absent on the said day for evidence and he was set ex parte by the court below. The suit was decreed with costs on 7/3/2007. Thereafter I.A.No.1627/07 was filed by the respondent for setting aside the ex parte decree along with I.A. No.1628/07 for condoning the delay in filing I.A. No.1627/07. Both the applications were allowed on costs and the ex parte decree was set aside on 30/11/2009. Thereafter, the case was listed on 09/02/2010 for evidence. But, on that day, the suit was dismissed for the default of the petitioner. Thereafter, restoration application was filed by the **O.P.(c) No.1578 of 2013** -: 3 :- petitioner as I.A.No.1046 of 2010. On 14/07/2010, the said restoration application was allowed by the court below on payment of cost of Rs.1,000/-. The cost was paid on 16/07/2010 by the petitioner and the suit was restored on 16/07/2010. Thereafter, the suit was again decreed ex parte on 27/10/2010. The respondent again filed an application for setting aside the ex parte decree with another application to condone the delay. But, both the applications were dismissed and ultimately the suit was decreed. 2. Based on the decree, the petitioner filed E.P.No.180/2011. During the E.P. proceedings, the respondent filed objection stating that during the period where the suit stood dismissed, he had alienated his property attached before judgment to a third party by name 'Nisha'. But, the date of sale was not mentioned in the objection. According to the respondent, the property under attachment, which had been sold away to Ms. Nisha during the period, when **O.P.(c) No.1578 of 2013** -: 4 :- the suit stood dismissed, is not liable to be sold in execution of the decree as the same is in the possession of a third party. After considering the rival contentions, the court below passed the impugned order stating that the property to be sold in execution of the decree does not belong to the respondent/ judgment debtor and the judgment debtor had sold away the property to one Nisha when the suit stood dismissed. Hence, the property is not liable to be sold in execution of the decree. Then, the case was posted for further steps. The legality and propriety of this order is under challenge in this original petition. 3. The learned counsel for the petitioner advanced arguments assailing the findings of the court below that the property sought to be sold in execution of the decree does not belong to the judgment debtor and the judgment debtor had already sold away the property to the third party during the period when the suit stood dismissed on default. The **O.P.(c) No.1578 of 2013** -: 5 :- learned counsel further contends that when the suit was dismissed for default, it was incumbent upon the court to pass an order withdrawing the order of attachment of the defendant's property, passed before judgment. But, in the instant case, such an order withdrawing the attachment order, passed before judgment had not been passed along with the judgment dismissing the suit for default. Therefore, the attachment order shall be deemed to be continuing in operation notwithstanding the dismissal of the suit. If that be so, even if the transfer of property in favour of third party was on 28/6/2010, the date on which the suit stood dismissed, the transfer was barred by the order of attachment before judgment, which was passed earlier in the suit and continuing in operation, even after the dismissal of the suit on default. According to him, even though the suit stood dismissed on default, the respondent would have obtained an order withdrawing the attachment **O.P.(c) No.1578 of 2013** -: 6 :- made before judgment from the court below, before transferring the property in favour of the third party. The learned counsel, to fortify the above argument, drew my attention to the statutory mandate under Order 38 Rule 9 of the Code of Civil Procedure. The learned counsel further cited the decision in Vareed Jacob v. Sosamma Geevarghese [2004 (2) KLT 649 (SC)]. 4. Per contra, the learned counsel for the respondent submits that Annexures-A2 to A4 show that the transfer of property in favour of the third party was effected on 28/6/2010, the day on which the suit stood dismissed. Similarly, Annexure-A4 shows that in the impugned order of the court below, which was marked as Ext.P12 in[ this O.P., by a typographical error the year of assignment document in favour of the third party was shown as '2011', instead of '2010'. The learned counsel further contends that even if an order withdrawing the **O.P.(c) No.1578 of 2013** -: 7 :- attachment has not been passed along with the order dismissing the suit for default, the attachment order shall also be deemed to be ceased to exist by the dismissal of the suit. According to him, if such an order was not passed by the court below, the same can be an omission from the part of the court which passed the order dismissing the suit and the attachment order cannot be deemed to be continuing in force, notwithstanding the dismissal of the suit. According to him, the purpose of Order 21 Rule 9 of the C.P.C. is to cast a duty or an obligation on the court which passed the order of attachment to lift the same at the time of dismissing the suit so as to remove the legal hurdle in the way of transfer of property and also to give necessary information as regards the lifting of attachment to the Sub Registry. Even if the court omitted to do such a statutory duty, no benefit would be enured to the plaintiff in the suit. The learned counsel further cited the decisions in **O.P.(c) No.1578 of 2013** -: 8 :- Balaraju v. Masilamani [AIR 1930 Madras 514 (FB)]; Somasundaram v. Periya Karuppan (AIR 1930 Madras 520); Ma Thein v. Nepean (AIR 1931 Rangoon 281) and Govindrao Mahadik v. Devi Sahai (AIR 1982 SC 989). 5. I have bestowed my anxious consideration to the rival submissions made at the Bar in the light of the relevant provisions and judicial precedents cited by both parties. In view of the rival submissions at the Bar, the question to be considered is, whether the order attaching the defendant's property before judgment shall be deemed to be continuing in force, notwithstanding the dismissal of the suit, in the absence of specific order withdrawing the order of attachment along with the judgment dismissing the suit? 6. Coming to the facts, admittedly, the suit was dismissed for default on 9/2/2010 and thereafter restored on the files on 16/7/2010. Annexures-A2 to A4 show that the transfer of property in favour of the **O.P.(c) No.1578 of 2013** -: 9 :- third party was effected on 28/6/2010 i.e., the day on which the suit stood dismissed. Even though such a transfer on that date is not shown in Ext.P8 encumbrance certificate, in view of Annexures-A2 to A4, it can be an omission or a mistake only. Annexure-A4 is the certified copy of the sale deed which specifically shows that the disputed transfer of property in favour of a third party by name 'Nisha' was on 28/6/2010 and the same is further supported by the entries in Annexure-A2 and A3 encumbrance certificates covering the said period. Therefore, in the absence of any contra materials from the part of the petitioner, it can safely be concluded that the alleged transfer of property was on 28/6/2010 the day on which the suit stood dismissed. If that be so, what remains to be considered is the legal effect and impact of an attachment order which was not withdrawn by a specific order at the time when the suit dismissed for default. ## **O.P.(c) No.1578 of 2013** -: 10 :- 7. The legal issue raised before me mainly centers around Order 38 Rule 9 of the C.P.C. which reads as given below: “9. Removal of attachment when security furnished or suit dismissed.- Where an order is made for attachment before judgment, the Court shall order the attachment to be withdrawn, when the defendant furnishes the security required, together with security for the costs of the attachment or when the suit is dismissed.” Going by the above provision, it could be seen that the statutory duty is imposed on the court at the time of dismissal of the suit wherein an order attaching the property of the defendant before judgment had already been passed and in force under Order 39 Rule 5 of the C.P.C. It is obligatory upon the court to pass such an order withdrawing the attachment made before judgment without an application from the **O.P.(c) No.1578 of 2013** -: 11 :- defendant for the same. What is the legal effect and impact, if the court failed or omitted to pass such a specific order withdrawing the order of attachment made before judgment, when the suit was dismissed? 8. The relevant provision under Order 38 Rule 9 of the C.P.C. does not prescribe the legal effect or impact or consequences in a situation referred above. So, I am of the opinion that the above question can be answered on an objective analysis of the entire scheme under Order 38 of the C.P.C. 9. The circumstances in which an order of attachment before judgment can be passed is specified under Order 38 Rule 5 of the C.P.C. i.e., (a) the defendant with intent to obstruct or delay the execution of any decree that may be passed against him; (b) the defendant is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court. If the court is satisfied with any of the above circumstances, the court is provided **O.P.(c) No.1578 of 2013** -: 12 :- with further options. The court may direct the defendant to furnish security, in such sum as may be specified in the order, or to appear and show cause why he should not furnish security. The court may also in the order direct the conditional attachment of the whole or any part of the property so specified. 10. In short, the attachment before judgment is a safeguard to protect the right of the plaintiff to enjoy the fruits of the decree that may be passed in his favour, in the case of threat of disposal or removal of the property, with an intent to defeat the decree that may be passed against the defendant. It gives an assurance that the decree if passed would be satisfied. The purpose of furnishing security is 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. Needless to say, this right survives so long as the suit is alive. If that be so, no purpose would be served by **O.P.(c) No.1578 of 2013** -: 13 :- keeping the attachment in force, after the dismissal of the suit. 11. That apart, when the suit dies, certainly all interlocutory proceedings that are ancillary to the main purpose of the suit would also die, unless otherwise provided. So, a duty is imposed on the court to withdraw the order of attachment, at the time of dismissal of the suit, to make cessation of the attachment made earlier on record. It is a statutory obligation of the court, which operates in corollary, and consequently on the cessation of the order of attachment made before judgment. If the court fails to do so, the attachment shall be held to have been withdrawn as the law presumes to have been done, what it orders to be done. The object of this provision further stands clarified under Order 38 Rule 9 of the CPC which imposes a duty on the court to withdraw the order of attachment, when the defendant furnishes the security required together with security for the costs of the attachment. Thus, on an objective **O.P.(c) No.1578 of 2013** -: 14 :- analysis of the Order 38 Rules 5 and 9 of the C.P.C., in juxtaposition, I am of the opinion that the order of attachment before judgment would cease to exist, when the suit is dismissed on default also, though no formal order of withdrawal be passed. 12. The above view is justified by a comparative analysis of Order 38 Rule 11A(2) and Order 21 Rule 57 of the C.P.C. Rule 11A(2) of Order 38 of the C.P.C. reads as given below: ## “11A. Provisions applicable to attachment.-- (1) x x x x x x x x x x x x x x x x x x x x x x x x (2) An attachment made before judgment in a suit which is dismissed for default shall not become revived merely by reason of the fact that the order for the dismissal of the suit for default has been set aside and the suit has been restored.” Going by the said provision, it is pertinent to note that the said rule is an exception to the general principle **O.P.(c) No.1578 of 2013** -: 15 :- that all interlocutory orders which have been passed before the dismissal of the suit on default will stand revived along with the suit when the dismissal is set aside and the suit is restored, unless the court expressly or by implication excludes the operation of the interlocutory orders passed during the period between the dismissal of the suit and restoration. (See Vareed Jacob v. Sosamma Geevarghese [2004 (2) KLT 649 (SC)]. It is more specific, significant and clear when such a provision is not incorporated under Order 39 or under Order 40 of the C.P.C. But, Order 11A(2) of the C.P.C. prescribes that in a suit which is dismissed for default, an attachment made before judgment shall not become revived merely by reason of the fact that the order for the dismissal of the suit for default has been set aside and the suit has been restored. In my view, it is implied in the above provision that, the order of attachment made before judgment would cease to sexist, when the suit is **O.P.(c) No.1578 of 2013** -: 16 :- dismissed, though no formal order be passed. Rule 9 imposes an obligation on the court to withdraw the attachment also by an order so as to remove the restriction imposed on the property by the order of attachment made before judgment. It is to be remembered that unless such a specific order is not passed, the entries made in the books of the Sub Registry will remain as such, even if the suit is dismissed. The object of this provision is to remove the restriction of transfer made earlier and intimated to the Sub Registry. But this does not mean that the attachment made earlier would continue in existence, if the court omits or fails to do so. The said provision does not impose a statutory liability or obligation for the same either expressly or impliedly on the party and allows the court no alternative. 13. The above view gets more assurance from the legal consequences on the dismissal of an Execution Petition, where the property had been **O.P.(c) No.1578 of 2013** -: 17 :- attached in execution, provided under Order 21 Rule 57 of the C.P.C. also. Going by Order 21 Rule 57 of the C.P.C. where any property has been attached in execution of a decree and the court for any reason passed an order dismissing the application for the execution of the decree, the court shall direct whether the attachment shall continue or cease and shall also indicate the period up to which such attachment shall continue or the date on which such attachment shall cease. Further, sub-rule (2) of Rule 57 of Order 21 of the C.P.C. provides a clarification that if the court omits to give such direction, the attachment shall be deemed to have ceased. Here, it is pertinent to note that at the time of dismissal of the Execution Petition, the Execution Court has an option to direct whether the attachment shall continue or cease or cessation of attachment is postponed. Such an option given to the Execution Court necessitated the clarification under sub-rule (2) that if the court omits to give such a **O.P.(c) No.1578 of 2013** -: 18 :- direction, the attachment shall be deemed to have ceased. But, when coming to Order 38 Rule 9 of the C.P.C., the trial court which passes an attachment before judgment is not provided with such an option as provided under sub-rule (2) of Rule 57 of Order 21 of the C.P.C. either to continue the attachment or cease the attachment or to postpone the cessation of attachment. It is pertinent to note that the expression 'shall' which imposes a duty on court is employed and the parties to the suit is not burdened with any move to withdraw the attachment. By the imposition of a statutory mandatory duty on the court alone, it is also implied in the said Rule that if the court omits to pass such an order withdrawing the attachment made before judgment, it shall not be deemed to have continued, notwithstanding the dismissal of the suit. Since the trial court has no option other than withdrawing the attachment order passed before judgment, no further clarification is not required as **O.P.(c) No.1578 of 2013** -: 19 :- seen under Order 21 Rule 57(2) of the C.P.C. 14. The above resolution on the question of law gets support from a Full Bench decision of the Madras High Court in Balaraju v. Massilamani (AIR 1930 Madras 514). The High Court had an opportunity to consider another question, whether the attachment made before judgment would be revived, in a suit, which was dismissed by the trial court, but decreed in appeal. Resolving conflicting views, the High Court held that “upon the dismissal of a suit, the attachment before judgment necessarily ceases under Order 38 Rule 9 of the C.P.C., even though the Court did not pass an order withdrawing it”. 15. Pindi v. U Thaw Ma [AIR 1931 Rangoon 281 (2)], the High Court held that when the suit is dismissed for default, all interim and ancillary orders in the proceedings, including an order of attachment before judgment fall with it and are not revived by the restoration of the suit. ## **O.P.(c) No.1578 of 2013** -: 20 :- 16. In Jyotish Chandra v. Har Chandra (AIR 1928 Calcutta 234), a decree had been passed in ignorance of the fact that one of the defendants died. It was set aside two years afterwards; but it was held that the attachment obtained before judgments ceased with the abatement of the suit. 17. The learned counsel for the petitioner has cited the decision in Vareed Jacob v. Sosamma Geevarghese [2004 (2) KLT 649 (SC)] to fortify his arguments. I have meticulously considered the above decision. As I referred above, there the question in controversy was, whether interlocutory orders which have been passed before the dismissal will stand revived along with the suit when the dismissal is set aside and the suit is restored. But here the question is, whether the order of attachment before judgment would cease to exist, when the suit is dismissed. So, I find that the above decision will not render any aid or assistance to the argument advanced by the learned **O.P.(c) No.1578 of 2013** -: 21 :- counsel for the petitioner. 18. Thus, I find that there is no illegality or impropriety in the finding whereby the court below dismissed the impugned order under challenge. Hence the above Original Petition will stand dismissed. Sd/- **(K. HARILAL, JUDGE)** ## **Nan/** //true copy// P.S. to Judge