Friday 29 December 2023
Monday 4 December 2023
No Need To File Separate Final Decree Proceedings In Partition Suit; Trial Courts Should Proceed Suo Motu Soon After Passing Preliminary Decree: Supreme Court
Case: Kattukandi Edathil Krishnan vs Kattukandi Edathil Valsan
Coram: Justices S. Abdul Nazeer and Vikram Nath
Case No.: CA 6406-6407 OF 2010
Court Observation: “We direct the Trial Courts to list the matter for taking steps under Order XX Rule 18 of the CPC soon after passing of the preliminary decree for partition and separate possession of the property, suo motu and without requiring initiation of any separate proceedings.”
“This practice is to be discouraged as there is no point in declaring the rights of the parties in one proceedings and requiring initiation of separate proceedings for quantification and ascertainment of the relief. This will only delay the realization of the fruits of the decree”
A preliminary decree declares the rights or shares of the parties to the partition. Once the shares have been declared and a further inquiry still remains to be done for actually partitioning the property and placing the parties in separate possession of the divided property, then such inquiry shall be held and pursuant to the result of further inquiry, a final decree shall be passed. Thus, fundamentally, the distinction between preliminary and final decree is that: a preliminary decree merely declares the rights and shares of the parties and leaves room for some further inquiry to be held and conducted pursuant to the directions made in preliminary decree and after the inquiry having been conducted and rights of the parties being finally determined, a final decree incorporating such determination needs to be drawn up.
“Since there is no limitation for initiating final decree proceedings, the litigants tend to take their own sweet time for initiating final decree proceedings. In some States, the courts after passing a preliminary decree adjourn the suit sine die with liberty to the parties for applying for final decree proceedings like the present case. In some other States, a fresh final decree proceedings have to be initiated under Order XX Rule 18. However, this practice is to be discouraged as there is no point in declaring the rights of the parties in one proceedings and requiring initiation of separate proceedings for quantification and ascertainment of the relief. This will only delay the realization of the fruits of the decree.”
We are of the view that once a preliminary decree is passed by the Trial Court, the court should proceed with the case for drawing up the final decree suo motu. After passing of the preliminary decree, the Trial Court has to list the matter for taking steps under Order XX Rule 18 of the CPC. The courts should not adjourn the matter sine die, as has been done in the instant case. There is also no need to file a separate final decree proceedings. In the same suit, the court should allow the concerned party to file an appropriate application for drawing up the final decree. Needless to state that the suit comes to an end only when a final decree is drawn. Therefore, we direct the Trial Courts to list the matter for taking steps under Order XX Rule 18 of the CPC soon after passing of the preliminary decree for partition and separate possession of the property, suo motu and without requiring initiation of any separate proceedings.
Tuesday 28 November 2023
The trial of offence under Section 16 (1) (a) punishable under Section 27 (d) of the Drugs and Cosmetics Act remains with the Magistrate's Court
Telangana High Court
M/S. Gaba Pharmaceutical Pvt Ltd. ... vs Union Of India Rep., By Asst., ... on 4 June, 2021
Bench: G Sri Devi
HONOURABLE JUSTICE G. SRI DEVI
CRL.P.No.6949 of 2016
ORDER:
This Criminal Petition is filed, under Section 482 of the Code of Criminal Procedure, by the petitioners/A-1 to A-4 seeking to set aside the docket order, dated 19.04.2016, passed in D.S.C.No.2 of 2013 on the file of the I-Additional Metropolitan Sessions Judge, Hyderabad and consequently direct the I-Additional Metropolitan Sessions Judge, Hyderabad, to send back the said case to the Court of the VII-Additional Chief Metropolitan Magistrate, Hyderabad, to conduct trial as Calendar Case.
Heard Sri Gangaiah Naidu, learned Senior Counsel appearing on behalf of Ms.G.Bhanu Priya, learned Counsel for the petitioners and Ms. G.Anjali Agarwal, learned Counsel appearing for the respondent and also perused the record.
Learned Senior Counsel appearing for the petitioners mainly contended that the docket order, dated 19.04.2016, is ex-facie illegal and contrary to the orders passed by this Court in Criminal Petition No.2178 of 2015, dated 14.08.2015, wherein this Court remitted the said case to the Sessions Court with a specific direction to decide whether the alleged offence comes under Section 27 (a) or (c) of the Drugs and Cosmetics Act (for short "the Act") or both for retaining by him, or if it comes under Section 27 (b) and (d) to send back to the Magistrate. The learned Sessions Judge passed the impugned order stating that there is sufficient material to commence trial before the Sessions Court with alternative charge for the offence under section 27 (c) of the Act. The learned Sessions Judge ought to have assigned reasons how Section 27 (c) of the Act attracts, but he failed to assign any reason. He further submits that the material filed in this case, do indicate that the offence said to have been committed is under section 16 (1) (a) of the Act and the alleged lapse pointed out is that the subject drug is 'not of standard quality' in which event the penal Section 27 (d) of the Act would attract. In support of his contention, he relied on the judgment of the Kerala High Court passed in Criminal Revision No.1477 of 2013, wherein the High Court after considering all the provisions including the amended provisions, ruled that it is only the Magistrate vested with the jurisdiction to try the offences under 'not of standard quality' and the penal Section is 27 (d) of the Act. Therefore, it is made crystal clear that the allegation of 'not of standard quality' is triable by Magistrate only, even after amendment. Therefore, prayed to allow the Criminal Petition.
Learned Counsel appearing for the respondent would submit that certain offences under the Drugs and Cosmetics Act, 1940 were amended and made triable by the Court of Sessions. She also submits that the Additional District Judge is designated to try various offences under the Act and the petitioners cannot claim such relief in the present petition, since no other Court is competent to try those offences punishable under various provisions of the Act. She further submits that as per the judgment of the Madhya Pradesh High Court in M/s. Kalpataru Medicose Thru Narayana Prasad Sahu v. Food and Drug Administration Thru. Ashok Goyal1 the Criminal Petition is liable to be dismissed.
Before proceedings further it would be useful to refer to Section 16 of the Act, which deals with the standard quality.
"16. Standards of quality.- (1) For the purposes of this Chapter, the expression "standard quality" means -
(a) In relation to a drug, that the drug complies with the standard set out in the Second Schedule, and
(b) In relation to a cosmetic, that the cosmetic complies with such standards as may be prescribed."
As seen from the complaint filed by the respondent, the Test Report dated 20.03.2012 issued by the Government Analyst, CDL, Kolkata reveals that the sample was declared as "Not of standard quality" as the sample does not confirm to claim with respect to "Niacinamide Content". Section 16(1)(a) of the Act stipulates that drugs that comply with the standards set out in the Second Schedule shall be certified to be of "standard quality" . The penal provision for contravention of section 16 (1) (a) of the Act is punishable under section 27 of the Act, which reads as under:
"27. Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter whoever, himself or by any other person on his behalf, manufactures for sale or for M.C.C.No.11940 of 2016, dated 10.01.2017 distribution, or sells, or stocks or exhibits or offers for sale or distributes-
(a) any drug deemed to be adulterated under Section 17A or spurious under Section 17B or which when used by any person for or in the diagnosis, treatment, mitigation, or prevention of any disease or disorder is likely to cause his death or is likely to cause such harm on his body as would amount to grievous hurt within the meaning of Section 320 of the Indian Penal Code (45 of 1860), solely on account of such drug being adulterated or spurious or not of standard quality, as the case may be, shall be punishable with imprisonment for a term which shall not be less than five years but which may extend to a term of life and with fine which shall not be less than ten thousand rupees:
(b) any drug--
(i) deemed to be adulterated under Section 17A, but not being a drug referred to in clause (a), or
(ii) without a valid licence as required under clause (c) of Section 18, shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than five thousand rupees;
Provided that the Court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a term of less than one year and of fine of less than five thousand rupees;
(c) any drug deemed to be spurious under Section 17B, but not being a drug referred to in clause (a) shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to five years and with fine which shall not be less than five thousand rupees:
Provided that the Court may, for any adequate and special reasons, to be recorded in the judgment, impose a sentence of imprisonment for a term of less than three years but not less than one year:
(d) any drug, other than a drug referred to in clause (a) or clause (b) or clause (c), in contravention of any other provision of this Chapter or any rule made thereunder, shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to two years and with fine:
Provided that the Court may, for any adequate and special reasons, to be recorded in the judgment imposes a sentence of imprisonment for a term of less than one year."
Admittedly, the allegations made in the complaint itself would come neither under adulterated drug nor spurious drug and it is only "not of standard quality". Contravention under Section 18
(a) (i) of the Act, for having manufactured and distributed the "Not of Standard Quality" Drugs is punishable under Section 27 (d) of the said Act. Therefore, the offence committed by the petitioners is only under Section 27 (d) of the Act but not under Section 27 (a) or 27 (c) of the Act.
As per Section 36AB of the Act, the Special Court is constituted only for trying the offences relating to adulterated drugs and spurious drugs and Section 27 (d) of the Act is conspicuously excluded from the amendment conferring jurisdiction to Special Courts. Therefore, the trial of offence under Section 16 (1) (a) punishable under Section 27 (d) of the Act still remains with the Magistrate's Court. In the absence of vesting any jurisdiction to try the offence under Section 27 (d) of the Act, the learned Sessions Judge is incompetent to try the case. Therefore, this Court is of the view that the learned VII Additional Chief Metropolitan Magistrate, Hyderabad, alone is competent to try the offence punishable under Section 27 (d) of the Act. The learned I Additional Metropolitan Sessions Judge, Hyderabad, instead of following the procedure under Section 228 of Cr.P.C. erroneously assumed jurisdiction and passed the impugned order.
For the aforesaid reasons and having regard to the facts and circumstances of the case, the Criminal Petition is allowed and the docket order dated, 19.04.2016 passed in D.SC No.2 of 2013 on the file of the I-Additional Metropolitan Sessions Judge, Hyderabad, is hereby set aside. Further, the learned I-Additional Metropolitan Sessions Judge, Hyderabad, is directed to send back the records in D.SC No.2 of 2013 to the Court of the VII-Additional Chief Metropolitan Magistrate, Hyderabad, to conduct trial as Calendar Case.
As a sequel thereto, Miscellaneous Petitions, if any, pending in this Criminal Petition, shall stand closed.
_____________________ JUSTICE G. SRI DEVI 04.06.2021 Gsn/gkv
Sunday 19 November 2023
Friday 27 October 2023
No application is needed for the return of the unmarked documents
Dis.No. /Admn/2017 Dt. 07-12-2017.
C I R C U L A R
Sub:- Courts – Civil –
Return of un-filed documents - Certain instructions issued.
@ @ @
It is brought to
the notice of the undersigned that, the parties in civil cases are filing
documents for the purpose of evidence in various suits or other proceedings and
out of them certain documents remain unmarked for various reasons and later the
parties are approaching the Courts for return of those unfiled/un-marked
documents filed in such cases, and certain Courts are insisting for filing
petitions for return of documents and also passing orders for return on
substitution of certified copies. Thereafter, the litigant parties are filing copy
applications for issue of certified copies of those documents to enable them to
substitute the certified copies for the original as directed by the Courts
concerned. It is observed that, the concerned section clerks are returning such
copy applications with an endorsement that the unmarked documents cannot be
issued as certified copies. This situation is causing serious hardship to the
litigants in taking back the unmarked documents. In certain courts, the
concerned bench clerks are even consigning the unfiled documents into record
section without returning the same to party concerned. In order to obviate this
hardship to the litigant parties, the undersigned is desirous to apprise all
concerned regarding the legal position on this aspect.
Order XIII Rule 7 CPC
Recording of admitted and return of
rejected documents:-
(1)
Every
document which has been admitted in evidence or a copy thereof where a copy has
been substituted for the original under Rule 5, shall form part of the record
of the suit.
(2)
Documents not admitted in evidence shall not form part of the record
and shall be returned to the persons respectively producing them.
Rule 2 of the Rules made under the
Destruction of Records Act, 1917 vide R.O.C.No.9/S.O/73.
The relevant portion reads as under:
Un-filed documents to be kept apart and destroyed:
No application is needed for the
return of the documents produced which have either not been tendered in
evidence or if tendered, have been rejected. It is sufficient if a receipt for
their return is taken in the list with which have been put up.
From the above it is clear that the
statute provides clear and unambiguous provisions for return of un-filed
documents in favour of parties; there is no need to insist the parties to file
applications for return of un-filed documents and to substitute them with
certified copies.
In this context a Judgment of Hon'ble
High Court reported in
AIR 2006 AP page 3 (Lokara Om Kumar V/S Baikan Satyanarayana) is
referred where the Hon'ble High Court in para 8 held as under;
[8] As per Regulation 2, unfilled
documents, which have been tendered in evidence or those documents, which have
been tendered in evidence, have been rejected, have to be returned to the party
who produced such documents. If those documents are not reclaimed by the party,
who produced them, then only they have to be retained in the Court for a period
of one year from the date of final order. This only means that there is no
necessity to keep the unmarked documents in the case file. In the eventuality
of the party producing the unmarked documents not reclaimed them then only such
documents have to be retained in the Court for a period of one year. Therefore,
the view taken by the learned Principal Junior Civil Judge, Ranga Reddy
District at L.B. Nagar, is
unsustainable in law.
Therefore, all the Judicial Officers
working in the unit are requested to not to insist the parties for filing
applications for return of unfiled documents in deviation of the statutory
provisions. They have to return all the un-filed documents as per Rule 2 of
Rules framed under the Destruction of Records Act as specified above without
insisting to file any application. However an exception is drawn that
the documents such as Pronotes, bonds etc., even though unmarked in compromise
decrees/settlements before Lok Adalat etc., should be superseded and retained
in the record as they become void and useless by virtue of a decree/award. These instructions shall be followed
scrupulously in order to avoid loss and hardship to the litigant public and for
smooth and effective administration of justice.
The receipt of circular shall be acknowledged.
Prl.District and
Sessions Judge,
To,
All the Judicial Officers in the Unit.
All Bar Associations in the Unit.
NBWs in NI Act cases shall be executed by Police
The Hon’ble High
Court TG and AP in a Judgment reported in 2015
(2) ALT(Crl) 193 = 2015 (2) ALD(Crl) 111 (K.Sangameshawar Vs Chand Pasha)
it is ruled that neither the Code of Criminal Procedure nor in the Criminal
Rules of Practice contemplate execution of N.B.Ws by the complainant. Further
it is held that as per Order 447(3) in Chapter 25 of A.P. Police Manual, N.B.Ws
have to executed only by the Police Officers.
Thursday 26 October 2023
Wednesday 27 September 2023
KINDS OF CHEQUES
KINDS OF CHEQUES: In Nitin Chadha vs. M/s Swastik Vegetable Products Pvt. Ltd. & Anr., 2015(3) RCR (Civil) 872 (P&H) the Hon'ble High Court explained the kinds of cheques as under:
1. Open cheque:The issuer of the cheque would just fill the name of the person to
whom the cheque is issued, writes the amount and attacheshis signature and nothing
else. This type of issuing a cheque is also called bearer type cheque also known as
open cheque or uncrossed cheque. The cheque is negotiable from the date of issue to
three months. The issued cheque turns stale afterteh completion of three months. It
has to be revalidated before presenting to the bank.
2. Bearer cheque: Same as Open Cheque
3. Crossed cheque: It is written in the same as that of bearer cheque but issuer
specifically specifies it as account payee on the left hand top corner or simply crosses
it twice with two paralled lines on the right hand top corner. The bearer of the cheque
presenting it to the bank should have an account in the branch to which the written
sum is deposited. It is safest type of cheques.
4. Account Payee cheque: Same as Crossed Cheque
5. Self cheque: A self cheque is written by the account holder as pay self to
receive the money in the physical form from the brach where he holds his account.
6. Pay yourself cheque: The account holder issues this type of crossed cheque to
the bank asking the bank to deduct money from his account into bank's own account
for the purpose of buying banking products like drafts, pay orders, fixed deposit
receipts or for depositing money into other accounts held by him like recurring
deposits and loan accounts.
7. Post dated cheque: A PDC is a form of a crossed or account payee bearer
cheque but post dated to meet the said financial obligation at a future date.
8. Local cheque: A local cheque is a type of cheque which is valid in the given
city and a given branch in which the issuer has an account and to which it is
connected. The producer of the cheque in whose name it is issued can directly go to
the designated bank and receive teh money in the physical form. If a given city's local
cheque is presented elsewhere it shall attract some fixed banking charges. Although
these type of cheques are still prevalent, especially with nationalised banks. It is
slowly stated to be removed with at par cheque type.
9. At par cheque: With the computerisation and networking of bank branches with
its head quarters, a variation to the local cheque has become common place in the
name of at par cheque. At par cheque is a cheque which is accepted at par at all its
branches across the country. Unlike local cheque it can bepresented across teh
country without attracting additional banking charges.
10. Banker's cheque: It is a kind of cheque issuedby the bank itself connected to its
own funds. It is a kind of assurance given by the issuer to the client to alley your
fears. The personal account connected cheques may bounce for want of funds in his
account. To avoid such hurdles, sometimes, the receiver seeks banker's cheque.
11. Traveller's cheque: They are a kind of an open type bearer cheque issued by the
bank which can be used by the user for withdrawal of money while touring. It is
equivalent to carrying cash but in a safe form without fear of losing it.
12. Gift cheque: This is another banking instrument introduced for gifting money
to the loved ones instead of hard cas
Wednesday 26 July 2023
Civil Procedure Code, 1908 - Section 60(1)(i) Proviso - Attachment - Properties liable - Attachment of salary for a period of twenty-four months - Exempt from attachment for a gap of twelve months - Salary not liable again after time gap of twelve months for the execution of the same decree.
Bapu Gadgil vs Smt. Rama on 20 June, 2002
Equivalent citations: I (2003) DMC 770
Bench: N Dabholkar
JUDGMENT N.V. Dabholkar, J.
1. Heard Advocates S/Shri Kasliwal and Dixit for respective parties. Being an issue regarding interpretation of Section 60(l)(i) of the Code of Civil Procedure and more particularly proviso to said sub-section, Advocates S/Shri S.C. Bora and R.R. Mantri have also voluntarily rendered assistance, as amicus curiae, in trying to interpret the said provision.
2. The revision petition arises because on 19.6.1994, the Court of Civil Judge, Junior Division, Bhusawal in Regular Darkhast No. 47/1990 ordered attachment from salary of judgment-debtor/revision petitioner at the rate of Rs. 1,000/- per month.
3. Majority of the facts in the matter are undisputed. The parties are husband and wife and husband is Government servant. Wife obtained a decree for recovery of an amount of Rs. 24,999/- against the husband in Regular Civil Suit No. 263/ 1989. Admittedly, this was a decree of payment in lieu of Stridhan items and not a decree for maintenance. Regular Darkhast No. 47/1990 filed by wife for recovery of this amount and in August, 1990, the Executing Court ordered attachment Under Order 21 Rule 48 of the Code of Civil Procedure read with Section 60(l)(i) for attachment at the rate of Rs. 500/- per month from the salary payable to the husband. The amount was accordingly deposited with the Executing Court from January, 1991, and continuously for a period of twenty four months.
In September, 1991, wife filed application for directing enhanced deduction at the rate of Rs. 2,000/- per month. That application is yet undecided. Husband filed an application Exhibit 38 and prayed that after deduction for twenty four months, his salary is totally exempt from any further deduction by virtue of provision to Section 60(l)(i) of the Code of Civil Procedure. The Court has also not issued such a declaration pursuant to request in application Exhibit 38.
4. In the year 1994, wife filed application Exhibit 44 and prayed for further attachment of the salary of the petitioner. The Executing Court, according to revision petitioner, without calling say of the judgment-debtor, passed the impugned orders on 19.6.1994 directing deduction and attachment at the rate of Rs. 1,000/- per month from the salary of judgment-debtor.
5. Section 60 of the Code of Civil Procedure deals with the property liable to attachment and sale in execution of decree and proviso to said section gives particulars, which are not liable to such attachment for sale. The provision with which we are concerned is being reproduced hereinbelow for ready reference.
"...... provided that the following particulars shall not be liable to such attachment or sale, viz.
(a) to (h)..........
(i) salary to the extent of the first four hundred rupees and two-thirds of the remainder in execution of any decree other than a decree for maintenance:
Provided that where any part of such portion of salary as is liable to attachment has been under attachment, whether continuously or intermittently, for a total period of twenty four months, such portion shall be exempt from attachment until the expiry of a further period of twelve months, and where such attachment has been made in execution of one and the same decree, shall, after the attachment has continued for a total period of twenty four months, be finally exempt from attachment in execution of that decree."
6. According to Advocate Mr. Kasliwal, the proviso exempts the part of such portion of the salary, as is liable for attachment, from attachment, once the said attachment was effected for a total period of twenty four months, whether continuously or intermittently. So far as execution in one and the same decree is concerned, the exemption is total and after deduction from salary for twenty four months, the creditor cannot deduct any further amount from the salary of Government servant in satisfaction of same decree, although otherwise liable to attachment. Even if some other creditor is to execute different decree obtained by him against the same judgment-debtor, he will have to wait for the time gap of twelve months before starting execution of his decree by attachment of portion of salary liable for such attachment.
7. As against this, Advocate Mr. Dixit states that, if the latter half of proviso is to be read as putting a ceiling for attachment of salary for one and the same decree only for twenty four months, then the central clause "such portion shall be exempt from attachment until the expiry of a further period of twelve months" would become redundant. According to Mr. Dixit, therefore, attachment of portion of salary for the purpose of execution of one and the same decree is permissible for a total period of forty eight months, with a gap of twelve months between two successive spans of twenty four months and, therefore, the impugned order, according to Mr. Dixit, calls for no interference.
8. So far as present execution proceeding is concerned, there is no dispute that part of the portion of the salary, which was liable for attachment, has been under attachment for a period of twenty four months. The only question is whether the same decree-holder wife can again attach it for a further period of twenty four months because previous attachment has been more than twelve months ago.
9. In order to arrive at correct interpretation of the provision, we have repeatedly read the proviso and it is felt that it should be considered in three parts. First part being the portion proceeding the clause "such portion shall be exempt from attachment until the expiry of a further period of twelve months" relied upon by Advocate Mr. Dixit. The clause relied upon by Advocate Mr. Dixit should be second portion and remainder part of the proviso should be the third.
On reading the first portion, it can be seen that the salary portion liable for attachment, can be attached either continuously or intermittently for a maximum period of twenty four months and not beyond that. Once such an attachment has continued for a period of twenty four months, the salary portion itself is exempt from attachment. Consequently, the judgment-debtor would enjoy the exemption against every creditor and decree-holder till expiry of further period of twelve months. The object of exemption appears to enable the judgment-debtor public officer or Government servant and others to maintain themselves and their families in a suitable manner.
Second portion, which clause according to Mr. Dixit becomes redundant if the proviso is interpreted to mean that attachment can be only for twenty four calender months and no more, speaks only regarding exemption from attachment of the salary portion liable to attachment. The clause by itself is silent about the number of decrees, the number of creditors/decree-holders.
10. Before proceeding to consider the third portion of the proviso, it must be pointed out that the phrase "a total period of twenty four months" occurs twice in the said proviso, once in the first part and once in the third part of the proviso, as carved for the purpose of convenient consideration. The third clause begins with the phrase "where such attachment has been made" and the word "such" has relation with the phrase "whether continuously or intermittently" in the first part of the proviso. The words "of one and the same decree" and "that decree" appearing in the middle and concluding part of third portion of the proviso, are important in considering the interpretation of the proviso.
The first part of the proviso, as already stated earlier, declares the salary portion totally exempt from liability to attachment and this exemption, by virtue of second part, is total, for a period of twelve months. The third portion speaks about the extent of exemption, so far as one and the same decree is concerned and it appears that when the attachment, as indicated in the first portion i.e. whether continuously or intermittently, has continued for a period of twenty four months, for the purpose of execution of one and the same decree, the salary portion liable for attachment is finally exempt from attachment so far as that decree is concerned. The latter clause takes away the protection accorded to the salary portion liable to attachment, which is total for a period of twelve months, so far as attachment for the purpose of execution of any other decree for which it was not so attached earlier for a period of twenty four months, whether continuously or intermittently. Consequently, after a time gap of twelve months, the salary portion liable to attachment can be attached by the same creditor, but only for execution of another decree than the one for which it was already attached for a period of twenty four months, or it may be liable for attachment by another creditor for execution of another decree.
If interpretation, as tried to be attributed by Advocate Mr. Dixit, is to be accepted, the third part of the proviso would have read "after the attachment has continued for a total period of forty eight months" instead of "twenty four months".
11. Thus, it is evident that on reading proviso in its totality, it appears that salary portion liable to attachment in execution of a decree is attachable for a period of twenty four months continuously or intermittently; in execution of one and the same decree. For a gap of twelve months, such salary portion is totally exempt from attachment by anybody and even for execution of different decree. The salary portion would again be liable for attachment after time gap of twelve months, but for the purpose of execution of a different decree and not one and the same decree for the purpose of execution of which it was already attached for a period of twenty four months earlier.
12. In the light of interpretation of the proviso as above, the impugned order dated 19.6.1994, which is second attachment of the salary portion after the same having been already attached for a period of twenty four months in the past, will have to be quashed and set aside as illegal.
13. The revision petition is allowed. The impugned order is quashed and set aside. It is clarified that the decree-holder, by virtue of this order, will not be debarred from executing the decree by other permissible modes.
Rule made absolute accordingly.
Friday 14 July 2023
A promissory note executed using impressed stamp paper or adhesive stamps are equally valid and admissible in evidence, provided that they are stamped with requisite value.
Andhra High Court
Gurana Asirinaidu vs Lenka Suryanarayana on 31 December, 2004
Equivalent citations: 2005 (1) ALD 713, 2005 (1) ALT 659
Bench: S A Reddy
ORDER S. Ananda Reddy, J.
1. This revision petition is at the instance of the plaintiff. He filed the suit - OS No. 30 of 1998 on the file of the Principal Junior Civil Judge, Vizianagaram for recovery of a sum of No. 9,500/- stating that the respondents/defendant borrowed the said amount and executed a promissory note agreeing to repay the said amount on demand with interest at the rate of 24% per annum, but failed to pay the same. When the petitioner/plaintiff sought to mark the suit pro-note, the respondent/ defendant objected for the same on the ground that it was not properly stamped, and therefore, it is not admissible in evidence. Admittedly, the suit document was executed on a non-judicial stamp paper worth No. 5-00. The learned Junior Civil Judge accepted the objection raised by the defendant and held that the plaintiff is not entitled to mark the disputed document as an exhibit on his behalf. Hence, the present revision by the plaintiff.
2. The contention of the petitioner/ plaintiff is that the Court below has committed an error in not properly considering the relevant provisions and appreciating the contention of the petitioner and in refusing to mark the disputed document.
3. On the other hand, the Counsel for the respondent/defendant supported the impugned order and relied upon a judgment of this Court in Dinne Erranna v. Modappa, (1963) II An.WR 198, which was referred to and relied upon by the Court below.
4. Heard the learned Counsel for the petitioner and the learned Counsel for the respondent and considered the material on record.
5. Before considering the nature of the disputed document, it would be appropriate to refer to the relevant provisions of the Indian Stamp Act (hereinafter referred to as 'the Act') and the rules made thereudner:-
Section 2(22) defines 'promissory note' means a promissory note, as defined by the Negotiable Instruments Act, 1881. It also includes a note promising the payment of any sum of money out of any particular fund, which may or may not be available, or upon any condition or contingency, which may or may not be performed or happen.
As per Section 2(11) of the Act 'duly stamped', as applied to an instrument, means that the instrument bears an adhesive or impressed stamp of not less than the proper amount, and that such stamp has been affixed or used in accordance with the law for the time being in force in India.
As per Section 2(13) 'impressed stamp' includes - (a) labels affixed and impressed by the proper officer; and (b) stamps embossed or engraved on stamped paper.
Section 10 deals with the mode of payment of duties, except as otherwise expressly provided in this Act, all duties with which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps.
Section 11 of the Act deals with the use of adhesive stamps. The following instruments may be stamped with adhesive stamps, namely:
(a) instruments chargeable with a duty not exceeding ten naye paise except parts of bills of exchange payable otherwise than on demand and drawn in sets;
(b) bills of exchange and promissory notes drawn or made out of India;
(c) entry as an advocate, vakil or attorney on the roll of a High Court;
(d) notarial acts; and
(e) transfers by endorsement of shares in any incorporated company or other body corporate.
Section 35 deals with 'instruments not duly stamped inadmissible in evidence, etc. However, in certain cases though they were initially insufficiently stamped, they are admissible in evidence subject to the payment of deficit stamp duty as well as the penalty payable. But however, under the proviso, the following documents are excepted, such as instrument chargeable with duty not exceeding 10 naye paise only, a bill of exchange, or a promissory note.
6. Similarly, Rule 3 of the Indian Stamp Rules, 1925 gives the description of stamps. As per the said rule, all duties with which any instrument is chargeable shall be paid and such payment shall be indicated on such instrument by means of stamps issued by the Government for the purpose of the Act, and a stamp, which by any word or words on the face of it is appropriated to any particular kind of instrument, shall not be used for an instrument of any other kind. The said rule also makes it clear that there are two kinds of stamps, indicating the payment of duty with which the instruments are chargeable, namely (i) impressed stamps, and (ii) adhesive stamps.
Rule 5 provides how a promissory note is to be executed, according to which a promissory note or a bill of exchange shall, except as provided by Section 11 or by Rules 13 and 17, be written on paper on which a stamp of the proper value, with or without the word 'hundi' has been engraved or embossed.
Rule 13 refers to the use of adhesive stamps on certain instruments. This rule enumerates the instruments, which may be stamped with adhesive stamps, namely (i) bill of exchange payable otherwise than on demand, and drawn in sets, when the amount of duty does not exceed 10 naye paise for each part of the set. (The other part of the rule is hot relevant).
Rule 17 provides for the use of special adhesive stamps when the documents, like bill of exchange, cheques and promissory notes drawn or made out of India with stamps bearing the word 'foreign bill'.
Rule 18 provides that when an instrument bears a stamp of proper amount but on improper description, the Collector may, on payment of the requisite duty, certify by an endorsement that it is duly stamped.
Similarly, Article 49 of the Schedule to the Act provides how a promissory note is to be stamped i.e., value of the stamp.
7. The contention of the plaintiff is that the provisions of Section 11 refer the word 'may', which gives the option to use adhesive stamps as referred to therein. Further, the term duly stamped did not put any restrictions as to the type of stamps to be used with reterence to any particular type of instrument. Therefore, a promissory note, executed on an impressed stamp of not less than the proper amount of stamp duty payable, should be considered as a valid document/promissory note. Therefore, the view expressed by the Trial Court is not in accordance with law. The learned Junior Civil Judge referred to and relied upon a judgment of this Court in Dinne Erranna v. Modappa (supra). In that case a learned Single Judge of this Court was considering the validity of a document as promissory note in terms of the provisions of Sections 35 and 37 of the Act. In that case, the disputed document, which is stated to be a promissory note, was not duly stamped. But, however, it was certified to be duly stamped by the Collector, and claimed by the plaintiff that it is a valid document. The claim of the plaintiff was that even though the document was not properly stomped, but as it was certified by the Collector having been duly stamped, it is admissible in evidence. Though the said claim was accepted by the learned District Munsif, but was reversed by this Court, observing that:
"Proviso (a) to Section 35 expressly forbids the Collector to validate an unstamped promissory note, and therefore, the order of the Collector validating such an instrument cannot have any legal effect."
But in that case, the claim of the plaintiff was that the document was validated under Section 37 of the Act, which empowers the State Government to make the rules providing that where an instrument bears a stamp of sufficient amount but of improper description, it may, on payment of the duty with which the same is chargeable, be certified to be duly stamped, and any instrument so certified shall then be deemed to have been duly stamped as from the date of its execution. But such validation, as found by the learned Single Judge of this Court, shall not be applicable to the documents specified, under the proviso to Section 35, which includes promissory note.
8. This issue was also considered by a learned Judge of this Court in P. Krishna Murthy and others v. Munilal, 1978 LS 40 (AP). In that case, the defendants raised objections as to the admissibility of the promissory notes on the ground that they were not properly stamped. The suit promissory notes for No. 5,000/- each were stamped with three adhesive stamps of 10 paise each. The learned Single Judge referring to the provisions of Section 11 of the Act held that there is no prohibition contained in Section 11 that adhesive stamps shall not be used in any instruments other than those mentioned in Clauses (a) to (e) of Section 11. This Court also referred to the words 'may be stamped' contained in Section 11, which indicates the permissive character of the stamps to be used in execution of the promissory notes. This Court, thus, upheld the view of the lower Court.
9. This issue was also considered by a learned Single Judge of the Madras High Court in P. Moorthy v. A.R. Kothandaraman, . In that case, the promissory note in question was executed on an impressed stamp paper of the value of No. 1-50 paise. Though the defendant disputed the validity of the promissory note and admissibility of the said document on the ground that it was not duly stamped, the Small Causes Court rejected the said objection. But, however, the said finding was reversed by the new Trial Bench of the Court of Small Causes, which was assailed in the revision before the Madras High Court. The learned Single Judge, after referring to the provisions of Sections 10 and 11 of the Act, as well as the relevant rules, held that a promissory note can be stamped either with adhesive stamps or engrossed on a stamp paper of the proper value.
10. In G. Hanumanthapa v. S. Bala Rangaiah, , a learned Single Judge of the Karnataka High Court had also an occasion to consider this issue as to the proper stamp duty payable on the promissory notes. The learned Judge though held that a promissory note not executed on duly stamped paper is inadmissible in evidence, but, however, noted that a pro-note written on impressed stamp paper of requisite value must be held as duly stamped.
11. In view of the above position of the rules as well as the decisions referred, to, there is no prohibition as to the execution of a promissory note on an impressed stamp paper. What is required for a valid promissory note is that it should be stamped properly, as provided under the Act and the Rules. Section 10 of the Act refers the mode of duties to be paid. As per this provision, except as otherwise expressly provided in the Act, all duties with which any instrument chargeable shall be payable and such payment shall be indicated on such instruments by means of stamps. Further, as already referred to Section 11, where the word 'may' used, is indicative of the choice for the executant of the document. A promissory note executed using impressed stamp paper or adhesive stamps are equally valid and admissible in evidence, provided that they are stamped with requisite value.
12. In view of the above, as the disputed document is admittedly executed on an impressed stamp paper of the value of No. 5-00, which is more than the requisite value, it should be treated as a valid document executed with the requisite stamp duty, as provided under the Act and the Rules.
13. Therefore, the impugned order is set aside, and the matter is restored to the file of the lower Court with a direction to receive the disputed document and mark the same as an exhibit on behalf of the plaintiff and proceed with the suit in accordance with law.
14. Accordingly, the revision petition is allowed. No costs
Tuesday 13 June 2023
Conditional attachment can be ordered by Court under Order 38 Rule 5(3) simultaneously with notice directing defendant to furnish security or to show cause for not furnishing security subject to satisfaction of clauses(a) and (b) of sub-rule(1) of Rule 5 of Order 38 CPC.
Andhra High Court
Mamidala Suresh Babu And Ors. vs Tirumalasetti Krishnamurthy And ... on 25 April, 2006
Equivalent citations: 2006 (3) ALD 605, 2006 (3) ALT 250
Bench: G Chandraiah
JUDGMENT G. Chandraiah, J.
1. Though notice is served none appeared for the respondents. Heard the counsel for the appellants.
2. Aggrieved by the conditional order of attachment before judgment under Order 38 Rule 5(3) of C.P.C. passed by the Court of Senior Civil Judge, Parchur in I.A. No. 255/2004 in O.S. No. 19/2004 dated 12-8-2004, the defendants in the suit filed this appeal.
3. For the sake of convenience the parties will be referred as per their array in the original suit.
4. The brief facts of the case are that the plaintiffs filed suit in O.S. No. 19/2004 for recovery of amounts under promissory notes executed by the 1st defendant. 1st defendant borrowed the amount and the defendants 2 to 4 are his two sons and a married daughter. As the amount was not paid in spite of demands, the suit for recovery of amount was filed. Alleging that the 1st defendant as a manager of the joint family comprising his two sons and one married daughter, incurred debts and in order to defeat and delay his valid and genuine debts, got filed suit in O.S. No. 13/2002 by his son and remained exparte and allowed the passing of the ex parte preliminary decree. Not being satisfied with the exparte decree, the 1st defendant also filed IP. No. 2/2003 by impleading some bogus creditors showing his only 1/4th share in the plaint schedule properties. Along with the present suit, the plaintiffs filed three I.As., i.e., the present IA No. 255/2004 for attachment before judgment, on the ground that the 1st defendant is attempting to alienate the property to defeat the suit claim; I.A. No. 256/2004 for stay of operation of preliminary decree in O.S. No. 13/2002 and; I.A. No. 257/2004 for permitting the plaintiffs to file suit in a representative capacity. The Court below in the present I.A. No. 255/2004 initially ordered exparte notice and conditional attachment. Subsequently the plaintiffs sought for making the interim ex parte conditional attachment absolute.
5. The defendants filed counter affidavit and contended that 1st defendant incurred debts and unable to discharge the debts filed IP. No. 2/2003 on the file of Senior Civil Judge, Chirala to declare him as insolvent and the official receiver was vested with his 1/4th share in the property. As the division of joint family properties took place, the 1st defendant is barred for contracting any debts and therefore questioning final decree and seeking attachment of property are outside the scope of law. In the counter affidavit the defendants also undertook not to alienate or charge the property to the extent of 1st defendant. It is contended that as the plaintiffs failed to obtain permission from the Insolvency Court under Section 28 of the Insolvency Act, the suit is not maintainable. It is also contended that in order to file suit under Order 1, Rule 8 of C.P.C., there shall be common interest and as there is no common interest in the present suit, the plaintiffs cannot file one suit for recovery of amounts executed under different promissory notes. With these averments, the I.A. was sought to be dismissed.
6. On behalf of the plaintiffs Exs.A-1 to A-13, which are promissory notes; part payment endorsements; legal notices and reply; and plaint copies in O.S. No. 13/2002 and IP. No. 2/2003 are filed. On behalf of the defendants Exs.B-1 and B-2 auction notices in IP. No. 2/2003 were marked.
7. The trial court after framing appropriate issue and after satisfying that as the 1st defendant remained ex parte and allowed passing of preliminary decree and that by virtue of the preliminary decree, the defendants are attempting to alienate the property and further in the preliminary decree, as there was no provision for discharging debts contracted by the 1st defendant and the court below also not believing that the division of the property took place earlier to execution of promissory notes, held that the plaintiffs are justified to be apprehensive of defendants alienating or disposing of the schedule property to defraud the plaintiffs. Accordingly, the trial Court made the interim conditional order of attachment absolute. Aggrieved by the same, the present appeal is filed.
8. The learned Counsel appearing for the appellants contended that before ordering attachment before judgment, the Court must prima facie satisfy that the defendants with an intention to defraud or delay the execution of decree, are about to dispose of the whole or any part of the property and only after such satisfaction, can pass the order of attachment. He stated that absolutely there are no grounds to record satisfaction that the defendants have any such intention to defraud or delay the execution of the decree and in the absence of same, the Court cannot order attachment before judgment mechanically. In support of his contention, he relied on the judgment of the Apex Court reported in Rajender Singh v. Ramdhar Singh and Ors. . He stated that under Sub-rule (1) of Rule 5 of Order 38 of C.P.C., the court has to direct the defendant to furnish security and only after failure to furnish security, can order for attachment. In support of his contention, he relied on the judgment of this Court reported in Avinash Constructions, Secunderabad v. P. Usha Rao . He stated that the son of the 1stdefendant filed suit for partition in O.S. No. 13/2002 and obtained preliminary decree and also filed LA. No. 13/2002 for appointment of Commissioner and for passing of final decree. Unable to discharge the debts, the 1st defendant filed I.P. No. 2/2003 on the file of Senior Civil Judge, Chirala and official receiver was vested with 1/4th share of the 1st defendant and in these circumstances, the 1st defendant has no power to dispose of the property. Therefore, when the 1st defendant has no power to dispose of the property the apprehension of the plaintiffs that he would dispose of the property is unwarranted and based on the apprehension no order of attachment before judgment can be passed and ingredients of Order 38 Rule 5 (1) of C.P.C. have to be satisfied. In support of this contention, he relied on the judgment of a Division Bench of this Court reported in Surender Singh Bajaj v. Kitty Steels Limited . The learned Counsel further submitted that the plaintiffs filed suit for recovery of the amount without obtaining leave from the Insolvency Court under Section 28 of the Insolvency Act and therefore, the suit is not maintainable. He submitted that the plaintiffs alleged that 1st defendant borrowed the amounts under different promissory notes and when this is the case, one suit for recovery of the amounts under different promissory notes cannot be filed, as there is no commonality of interest. In support of this contention, he relied on the judgment of a learned single Judge of this Court reported in Kota Sreevalli v. Chinna Seetharamaiah . He finally stated that under these circumstances, there is no possibility of the plaintiffs' success in the suit and further there are no grounds for the court below to satisfy that the defendants are attempting to alienate the property and under these circumstances, the Court below is not justified in making the interim conditional order of attachment, absolute. In support of this contention, he relied on the judgment of a Rajasthan High Court in M/s. Cosmopolitan Trading Corpn. v. M/s. Engg. Sales Corpn . With these averments, the counsel for the appellants sought for setting aside the impugned order.
9. Though notices are served on the defendants/respondents, there is no representation on their behalf.
10. The main case of the defendants is that the 1st defendant who is said to have borrowed the amount, filed I.P. No. 2/2003 for declaring him as insolvent and the property that fell to his share by virtue of the preliminary decree in O.S. No. 13/2002 was the subject matter in the I. P. and the official receiver was vested with the share of the 1st defendant and therefore there is no possibility of alienating or creating charge on the property. Their further case is that the Court below without asking the defendants to furnish any security under Sub-rule (1) of Rule 5 of Order 38 of C.P.C. ordered conditional attachment and made the same absolute and the same is not tenable. Their further case is that the defendants in the counter filed before the Court below have undertaken not to alienate the property that fell to the share of 1st defendant and the court below without considering this fact, ordered attachment and the same is illegal. It is stated that even this Court while granting interim order directed the appellants not to alienate or otherwise encumber the attached properties till further orders.
11. In view of the above circumstances, the question that falls for consideration is whether the Court below is justified in making the interim conditional order of attachment absolute?
12. To appreciate the above issue, it is necessary to look into the facts and circumstances of the case and the relevant provisions under C.P.C. As per the documents produced by the plaintiffs before the court below, it appears that the 1st defendant is alleged to have executed promissory notes in favour of the plaintiffs in the years 1999 and 2000 and made certain part payments on different dates. As the 1st defendant failed to repay the amounts, the present suit is filed for recovery of amounts. In the year 2002 i.e., in O.S. No. 13/2002 the son of the 1st defendant who is 1st appellant herein, filed suit for partition and in the said suit, admittedly the 1st defendant remained ex parte and a preliminary decree was passed, allotting 1/4th share to him. Subsequently, on the ground that the 1st defendant is unable to discharge debts, filed IP. No. 2/2003 for declaring him as insolvent and it appears that the 1/4th share of the 1st defendant was vested with the official receiver to deal with the property. The plaintiffs' case is that in the I.P., the 1st defendant showed the debt of 1st plaintiff and failed to show the debt of 2nd plaintiff. However, whether one suit is maintainable for recovery of amounts under different promissory notes in the light of provisions of Order 1, Rule 8 of C.P.C. and also in view of the judgment of this Court in Kota Sreevalli's case (4 supra) and also with regard to non-obtaining of leave from the insolvency court under Section 28 of the Insolvency Act and also with regard to 1st defendant being barred from contracting loans or whether the loans incurred were for joint family or not, have to be considered at the time of trial. However, I.A. No. 257/2004 for permitting the plaintiffs to file suit in representative capacity is pending. Further, a learned single Judge of this Court in Vasavi and Company v. Nampally Padma , while considering the provisions of Order 38, Rules 5 and 11 and the provisions of Insolvency Act, 1920 under Sections 2 (e) and 28 (6) held that if attachment before judgment is ordered and the defendant is declared as insolvent, those properties need not be reattached after obtaining decree and the decree holder becomes a secured creditor and such a secured debt can be executed independently against defendants even though they are declared as insolvents. In the light of these circumstances, at the cost of repetition, the grounds that are to be seen are whether there are any grounds to order for conditional attachment and the making the said order absolute.
13. The main case of the plaintiffs as believed by the court below is that the 1st defendant got filed suit in O.S. No. 13/2002 for partition and remained exparte and based on the said preliminary decree, the sons of the 1st defendant are attempting to alienate or dispose of the schedule property. The plaintiffs also filed affidavits of third parties through whom they came to know about the attempt of the defendants. Therefore, their case is that as the defendants in order to defeat or frustrate the cause of the plaintiffs are attempting to alienate the property, they sought for attachment before judgment and the court below initially ordered notice and made conditional attachment. At this stage it is necessary to look into the relevant provisions of Rule 5 of Order 38 of C.P.C. The same, to the extent relevant, are extracted as under for better appreciation:
5. Where defendant may be called upon to furnish security for production of property:
(1) Where, at any stage of the 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) ...
(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.
6. Attachment where cause not shown or security not furnished:
(1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the court, the Court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached.
(2) Where he defendant shows such cause or furnish the required security, and the property specified or any portion of it has been attached, the Court shall order the attachment to be withdrawn, or make such other order as it thinks fit.
14. From the above provisions it is clear that as per Sub-rule (1) of Rule 5 of Order 38 if the Court is satisfied that 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 local limits of the jurisdiction of the Court, may direct the defendant within the time to be fixed by the Court, 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 such security. In other words, the court may direct the defendant to produce security either in the form of property or the value of the same, to satisfy the decree and place at the disposal of the Court or direct the defendant to appear to show cause why he shall not furnish security. Under Sub-rule (3), the Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified. Sub-rule (2), imposes duty on the plaintiff to specify the property to be attached and its estimated value. Therefore, a combined reading of Sub-rule (1) and Sub-rule (3) of Rule 5 of Order 38 makes it clear that the Court subject to satisfaction of Clauses (a) and (b) of sub-rule (1), in addition to directing the defendant to furnish security or show cause for not furnishing security, can simultaneously order conditional attachment of the property specified by the plaintiff under Sub-rule (2). Under Rule 6 of Order 38, the procedure that has to be followed by the Court on the failure of the defendant to furnish security or the procedure that has to be followed on the defendants furnishing security, is prescribed. Under Sub-rule (1) of Rule 6 if the defendant fails to furnish security or show cause for not furnishing security, the court may order for attachment of the property specified in the notice or such portion thereof as appears sufficient to satisfy the decree that may be passed in the suit. On the other hand, if the defendant furnishes security or shows cause for not furnishing security, the Court under Sub-rule (2) of Rule 6, if the property specified in the order or any portion of the property has been attached, shall order the attachment to be withdrawn or make such other order as it thinks fit. It is to be conspicuously noticed that if the court has no power to order conditional attachment without issuing notice to the defendant to furnish security, the provision under Sub-rule (2) of Rule 6 of Order 38 would become redundant, in as much as it provides withdrawal of attachment of property already attached. As already stated above, the court has power, subject to satisfaction, not only to issue notice under Sub-rule (1) (b) of Rule 5 to furnish security, but at the same time to order for conditional attachment under Sub-rule (3) of Rule 5. The said purport can also be gathered from Form No. 5 of Appendix-F of first schedule, which is meant for issuing notice for attachment before judgment. But Sub-rule (4) of Rule 5 contemplates that an order of attachment made without complying with the provisions of Sub-rule (1) of Rule 5 as void. As already discussed, Sub-rule (3) of Rule 5 contemplates for conditional attachment and Sub-rule (1) contemplates for issuing of notice calling the defendant to furnish security. Now the question that follows is whether the notice prescribed under Sub-rule (1) has to be issued before making conditional attachment under sub-rule (3) of Rule 5 of Order 38 of C.P.C.? As already discussed, a reading of Sub-rules (1) and (3) conjointly discloses that the Court has jurisdiction not only to issue notice under Sub-rule (1) to furnish security, but it has also got simultaneous power to order conditional attachment. In this regard it is necessary to look into the Division Bench judgment of this Court reported in V. Chandra Reddy v. N. Chandramouli Naidu , wherein Jagannadha Rao, J., as he then was, speaking for the Bench in a reference, while distinguishing between 'order of attachment' and 'order of conditional attachment under Order 38 Rules 5 (1) (b), (3) and also considering sub-rule (4) and 6 (2) of Order 38, and also Form No. 5 (parts 1 and 2) of Appendix-F of first schedule held that conditional attachment can also be ordered by court under Sub-rule (3) of Order 38 Rule 5 without issuing notice, along with the show cause notice to be issued under Order 38 Rule 5(1). It was further held that no order of conditional attachment can be declared as void on account of Court not following the procedure under Order 38 Rule 5 (1) and that Sub-rule (4) of Order 38 Rule 5 does not come into play at the stage of ordering conditional attachment. While laying the above said position, His Lordship has taken into consideration the recommendations of Law Commission in its fifty-fourth report for introduction of Sub-rule (4) to Rule 5 of Order 38 by Amending Act of 1976 and the objects and reasons for introduction of said Sub-rule. The relevant portion of the judgment at paragraph No. 24 is extracted as under for better appreciation:
For the aforesaid reasons, we hold that the Court by reason of its power under Order XXXVIII, Rule 5 (3) can order conditional attachment 'also' along with a show cause notice to be issued under Order XXXVIII, Rule 5(1) of CPC. The Court can adopt the first part of Form No. 5, and in such an event, it may be necessary for the court to hear the defendant before issuing such a notice. It is also open to the court to adopt both the first and the second parts of Form No. 5, without issuing notice and direct the Bailiff to attach the property straightaway, if the defendant fails to comply with the first part of the form. In the latter case, the order will be one of 'conditional attachment'. However, if the defendant comes to court and satisfied the Court, it will be open to the Court to withdraw such conditional attachment under Order XXXVIII, Rule 6 (2). The above interpretation of the provisions seems to us to be in harmony with the intention of the Legislature. In any event, Sub-rule (4) of Order XXXVIII Rule 5 does not come into play at the stage of ordering conditional attachment. No order of conditional attachment can be declared as void on account of the Court not following the procedure under Order XXXVIII, Rule 5 (1) C.P.C.
(Emphasis added)
15. The judgments relied on by the counsel for the appellants to demonstrate that the order of attachment passed without affording the defendant an opportunity to furnish security is void, are no doubt unexceptionable, but cannot be made applicable to the facts of the present case, since in the present case, conditional order of attachment was passed. In the said cases, order of attachment was passed straightaway without the court being satisfied of the ingredients of Clasues (a) and (b) of Sub-rule (1) of Rule 5. In the present case, the court below passed conditional order of attachment, which is distinct from order of attachment and which also affords the defendants an opportunity to furnish security and as the defendants failed to furnish security or could show any sufficient cause, as contemplated under Sub-rule (1) of Rule 6 of Order 38, the conditional attachment order was made absolute.
16. Now at the cost of repetition it is to be noted that the defendant No. 1 executed promissory notes in favour of the plaintiffs in the year 1999 and 2000 and as he did not pay in spite of demands, the plaintiffs filed the present suit in O.S. No. 19/2004. Prior to the filing of the present suit by plaintiffs, the son of the 1st defendant filed suit in O.S. No. 13/2002 for partition of the joint family properties and in the said suit, the 1st defendant herein remained exparte and a preliminary decree was passed. The 1st defendant also filed IP. No. 2/2003 for declaring him as insolvent as he is unable to discharge debts. The case of the plaintiffs before the court below is that the defendants by virtue of the preliminary decree are attempting to alienate or dispose of the schedule properties. The plaintiffs also filed third party affidavits through whom they came to know about the attempts of the defendants. On being satisfied with the said grounds, the trial court initially passed ex parte conditional attachment and notice and subsequently made the said order absolute by passing the impugned order. At this stage, I feel it appropriate to note the observations made a learned single Judge of this Court in Hamali Co-op. Labour Contract Socy. v. K. Venkatiah AIR 1981 A.P. 391 at paragraph Nos. 4 and 7 of the judgment as under:
4... The sine qua non for an order of attachment before judgment or for an order demanding security before judgment is that the defendant is disposing of or about to dispose of his property with the dishonest intention of defeating or delaying the possible decree in the suit. The merits of the claims of the contending parties are merely ancillary factors for consideration by the Court in arriving at a conclusion with regard to the essential requirements of Order 38, Rule 5, C.P.C.
7. The only question therefore for consideration in this revision is whether the lower court gave the finding in regard to the intention and conduct of the petitioner before passing the impugned order. Sri Parabrahma Sastry's contention is that there is no such finding. On an examination of the impugned order, it does not appear that there is any express finding in regard to the intention or the conduct of the defendant so as to render him liable to a direction for furnishing security. But what 0.38, R.5, C.P.C. contemplates is not an express finding, but a satisfaction on the part of the Court by affidavit or otherwise. No doubt, whenever the law enjoins upon the Court to pass an order after being fully satisfied, it is necessary for the Court to express its satisfaction in the form of a finding but the fact that the Court does not express a specific finding cannot detract from the substantial value of the order if the order shows that it has been passed after the satisfaction required under the law. As pointed out by Sri Satyanarayana Prasad, the learned Counsel for the respondent, on a reading of the affidavit filed by the parties and the order of the learned Subordinate Judge, there can be little doubt that the learned Judge was satisfied with the allegation of the plaintiff that the defendant was disposing of the property with intent to defeat the decree. May be, the Subordinate Judge did not express these facts in so many words. But even a cursory reading of the order of the learned Subordinate Judge makes his satisfaction too patent to be ignored. The learned Subordinate Judge has clearly observed in paragraph 8 as follows:
...
These observations of the learned Subordinate Judge make it more than clear that in passing the impugned order, he was satisfied with the allegation of the plaintiff to the effect that the defendant was disposing of his property with the intention of defeating the decree that may be passed in the suit. Under the circumstances, therefore, I do not find any merit in this revision petition which is accordingly dismissed with costs.
17. In the present case also, based on the allegations of the plaintiffs and considering the facts and circumstances of case, the Court below satisfied with regard to the apprehension of the plaintiffs that the defendants are alienating or disposing of the schedule property to defraud the plaintiffs and, therefore made the interim conditional order of attachment absolute. Hence, I do not find any reason to interfere with the impugned order.
18. Though the defendants have given undertaking before the Court below and this Court also while granting interim stay directed that defendants shall not alienate orotherwise encumber the attached property, in view of the above facts and circumstances of the case and as the defendants have not furnished any security pursuant to the exparte conditional attachment, I feel it appropriate not to consider the undertaking given by the defendants.
19. With regard to the contention of the counsel for the defendant that the 1st defendant has no disposing power of the suit schedule property is concerned it is to be seen that the case of the plaintiffs is that the 1st defendant borrowed the amount for the joint family purpose and the suit for recovery of amount is filed against all the defendants i.e., the sons and married daughter. However, whether the borrowed amount is for joint family purpose or not is to be decided in the trial. The property that fallen to share of the 1st defendant may not be sold, as it is in the custody of the official receiver appointed in the insolvency petition. But no undertaking is given by other defendants. In view of this reasoning, the judgment of the Division Bench of this Court in Surender Singh Bajaj's case (3 supra) that if the defendant has no disposing power, no order of attachment before judgment, can be passed, cannot be made applicable to the facts of the present case, since the facts of the said case disclose that the money is deposited in the court as a surety. Therefore, without the order of the Court, the amount cannot be withdrawn and hence, the defendant No. 1 therein has no disposing capacity. But in the present case, as already noted above, there are four defendants and only 1/4th share of the 1st defendant is in the custody of official receiver and the suit claim is against all the four defendants. The other judgments relied on by the counsel for the appellants relate to the general procedure that is to be followed while ordering attachment before judgment and they do not deal with conditional attachment. Division Bench of this Court in the decision cited 7 supra, has clearly distinguished the 'order of attachment' and 'conditional order of attachment and laid down the law. In view of the same, the judgments relied on by the counsel for the appellants cannot be made applicable to the facts of the present case.
20. For the foregoing reasons, I do not find any merit in the appeal and the same is accordingly dismissed at the stage of admission.
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THE HON'BLE SRI JUSTICE V.V.S.RAO Civil Revision Petition No.1913 of 2006 20-06-2006 Lokara Om Kumar, S/o.late Amarn...
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1] Suit based on Demand Promissory note for Recovery Money:- Court Fee :- Advalorem Fees U/Sec.20 of A....
