ARREST AND ATTACHMENT BEFORE JUDGMENT

ARREST BEFORE JUDGMENT
ORDER 38 RULES (1-4)
RULE 1.
Where defendant may be called upon to furnish security for appearance.- Where at any stageof a suit, other than a suit of the nature referred to in section 16, clauses (a) to (d), the court issatisfied, by affidavit or otherwise,
 — 
 (a) that the defendant, with intent to delay the plaintiff, or to avoid any process of the court or to obstruct or delay the execution of any decree that may be passed against him,
 — 
 (i) has absconded or left the local limits of the jurisdiction of the court, or (ii) is about to abscond or leave the local limits of the jurisdiction of the court, or (iii) has disposed of or removed from the local limits of the jurisdiction of the court his property or any part thereof, or (b) that the defendant is about to leave India under circumstances affording reasonable probability that the plaintiff will or may thereby be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,the court may issue a warrant to arrest the defendant and bring him before the Court to showcause why he should not furnish security for his appearance:Provided that the defendant shall not be arrested if he pays to the officer entrusted with theexecution of the warrant any sum specified in the warrant as sufficient to satisfy the
 plaintiff‘s claim; and such sum shall be held in deposit by the court until the suit is disposed
of or until the further Order of the court.
SCOPE OF THE ORDER:
An order of arrest before judgment of defendant is to be passed only1.
 
where the plaintiff is able to make out a prima facie case;2.
 
And on the court being satisfied with the ingredients regarding possible abscondance or disposal of properties with intent to delay or obstruct execution of the prospective decree.
ARREST & ATTACHMENT BEFORE JUDGMENT ~ PROJECT REPORT
UNIVERSITY INSTITUTE OF LEGAL STUDIES 
The jurisdiction to issue warrant and call for security is vested with the court even with regard to foreigners, just as it is vested with the court in regard to dishonest and fraudulent Indian defendants.
And because the decree against him will have to be transmitted abroad for execution, the court is vested with the jurisdiction to call for security.Where the judgment debtor and garnishee are situated beyond the territorial jurisdiction of the execution court And there is no material to show that the debt payable is within the jurisdiction of the execution court, an order prohibiting garnishees from payment to judgment-debtor is beyond the jurisdiction of court.
 A ship touching the temporarily at an Indian port is in the same position as a foreign personnel defendant who is about to leave jurisdiction. If the claim against the ship is reasonably arguable, then to the extent of the reasonably best decree obtainable by the plaintiff, the court can and should obtain security from the ship before releasing her arrest.
 
REASONABLE PROBABILTY
Where the defendant is about to leave India, It is enough if the circumstances under which heis about to leave India afford a reasonable probability that any decree that may be passed against him in the suit will thereby be obstructed or delayed in the execution.
 
SUIT MUST BE BONAFIDE
In every case when an application is made under this rule, the court must be satisfied that thesuit is bona fide.
APPEAL
An order passed under O 38, r 1, is not appealable in nature though an order under rule 2which is to be passed when the defendant is brought before the court and where he fails tofurnish security is appealable.
RULE 2.
Security.- (1) Where the defendant fails to show such cause the court shall Order him either to deposit in court money or other property sufficient to answer the claim against him, or tofurnish security for his appearance at any time when called upon while the suit is pending anduntil satisfaction of any decree that may be passed against him in the suit, or make such Order as it thinks fit in regard to the sum which may have been paid by the defendant under the proviso to the last preceding rule.
(2) Every surety for the appearance of a defendant shall bind himself, in default of suchappearance, to pay any sum of money which the defendant may be ordered to pay in the suit.
LIABILTY UNDER SECURITY BOND
The extent of liability of a surety on a security bond must depend on the terms thereof, and ithas been held that it should be strictly construed. On this principle, it has been held that theliability to produce the defendant at any hearing of the suit does not import a liability to produce him at the stage of execution of the decree.
8
  Nor does the undertaking to produce in one court extend to producing the defendant in anyother court to which the case might be transferred.
9
 Where the defendant gave an undertaking not to alienate a property, which happens to be amortgaged property, the act of mortgagee to sell the property cannot lead to breach of undertaking by the defendant.
10
 Where a suit dismissed for default of appearance is again restored, an order passed under O38, r 3, becomes thereby renewed.
11
 
RULE 3.
Procedure on application by surety to be discharged.- (1) A surety for the appearance of a defendant may at any time apply to the court in which he became such surety to be discharged from his obligation.(2) On such application being made, the court shall summon the defendant to appear or, if it thinks fit, may issue a warrant for his arrest in the first instance.(3) On the appearance of the defendant in pursuance of the summons or warrant, or on his voluntary surrender, the court shall direct the surety to be discharged from his obligation, and shall call upon the defendant to find fresh security.
RULE 4.
Procedure where defendant fails to furnish security or find fresh security.-Where the defendant fails to comply with any Order under rule 2 or rule 3, the court may commit him to
the civil prison until the decision of the Suit or, where a decree is passed against the defendant, until the decree has been satisfied:Provided that no person shall be detained in prison under this rule in any case for a longer  period than six months, nor for a longer period than six weeks when the amount or value of the subject matter of the suit does not exceed fifty rupees:Provided also that no person shall be detained in prison under this rule after he has complied with such order.

ATTACHMENT BEFORE JUDGMENT: ORDER 38 RULES (5-12)

 

RULE 5.

Where defendant may be called upon to furnish security for production of property.-

(1) Where, at any stage of a 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) The plaintiff shall, unless the court otherwise directs, specify the property required to be attached and the estimated value thereof.

(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.

OBJECT OF THE RULE 5

The main object of an attachment before judgment is to enable the plaintiff to realize the amount of decree, if one is eventually passed, from the defendant’s property.[1]

The object is to prevent a decree from becoming in fructuous.[2]

The order that is contemplated by this rule is not an unconditional one directing attachment of property, but one calling upon the defendant to furnish security or to show cause why security should not be furnished.[3]

Order 38, rule 5 is not be used as a lever for the plaintiff to coerce to defendant to come to terms.[1]

SCOPE OF RULE 5

An order under O 38, rule 5 can be issued only if circumstances exist as are stated therein to the satisfaction of the court.

The affidavit in support of the contentions should not be vague and it must be properly verified.

A mere allegation that the defendant is selling off his properties is not sufficient. Particulars must be stated.

An order of attachment before judgment is a drastic remedy and the power has to be exercised with utmost care and caution, as it may be likely to ruin the reputation of the party against whom the power is exercised.[2]

Where the property sought to be attached is transferred before filing of the suit, the claim by creditor that transfer was hit by s 53 of the Transfer of Property Act 1882 cannot be rejected on the ground that the transferee were not made parties to the suit.[3]

The provision for attachment is not applicable where the property has already been disposed of. The purchaser of the property has a right to object order of attachment as he was not a party to the suit and had become the owner of the property before the filing of the suit.[4]

COURT MUST BE SATISFIED

Before exercising jurisdiction under rule 5 and passing orders for the attachment of properties before judgment, the court must satisfy itself of the practical certainty zof the plaintiff’s success and of the existence of a grave danger that the defendant is doing all things with dishonest intention of defeating or delaying the possible degree.[5]

The court must not only be satisfied on the material, but also state the so in the order.

The plaintiff should state precisely the grounds on which the belief or apprehension can be entertained, that the defendant is likely to dispose of, or remove the property.

That has to be some prima facie material on the basis of which the court could satisfy that the condition requisite for making an order of attachment before  judgment exist.

The circumstances that a company is in financial strain or that the debtor may be unable to pay the debt do not warrant attachment before judgment.[1]

 

NOTICE TO DEFENDANT

The order of attachment should be passed after notice to defendant.[2]

PROPERTY

The expression ‘property’ includes the property of every description whether movable or immobile.[3]The expression ‘his property’ refers to property of the defendant. However, it cannot be the joint property of plaintiff and the defendant.

EFFECT 

An attachment before judgment cannot be an attachment in execution of a decree. It can only become an attachment in execution of a decree after the decree has been passed and after an application to execute such a decree has been made.[4]

CONDITIONAL ATTACHMENT

The court has ample power to direct conditional attachment.[5] No prior notice is necessary in such case. It is, however, open to the defendant and his right to show cause against attachment has not been affected.[6]

PROPERTY SITUATED OUTSIDE JURISDICTION

Where the property sought to be attached is outside the local limits of the jurisdiction of the court, the proper course to follow is to transmit the order for attachment to the court in whose jurisdiction the property is situated.

RULE 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 the defendant shows such cause or furnishes 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.

HIGH COURT AMENDMENTS

Bombay, Goa, Daman and diu.- For the existing sub-rule (2), substitute the following:

“(2) Where the defendant shows such cause or furnishes the required security or gives an undertaking to the Court to do or not to do a thing, 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 think fit” (1.10.1983 and 1.4.1987).

PROPERTY SPECIFIED

The property specified is, the property specified by the plaintiff as required by r 5, sub-r (2). Such property may be within or without the jurisdiction of the court.

If the party against whom the order is passed has never been called to furnish security or show cause, the question of making an order under r 6 for ‘failure’ to comply with such direction does not arise. If such an order is passed, it is void.

WRONGFUL ATTACHMENT

If the defendant does not obtain an order setting aside the attachment, he will not afterwards be entitled to maintain a suit in tort on the ground that the attachment was wrongfully procured.[1]

If the attachment was effected by an injunction in restraint of alienation of the defendant will not be entitled to damages for wrongful attachment, unless he proves that he lost a chance of a profitable sale, and evidence of loss credit is insufficient.[2]

RULE 7.

Mode of making attachment. – Save as otherwise expressly provided, the attachment shall be made in the manner provided for the attachment of property in execution of a decree.

As was also held in the case:Surender  Singh  Bajaj  v  M/S. Kitty Steels Limited  , 22 April, 2002, that – ‘Order38 Rule 7 CPC provides that the attachment under Order38 Rule 5 shall be made in the manner provided in the attachment of property in execution decree’.

RULE 8.

Adjudication of claim to property attached before judgment.- Where any claim is preferred to property attached before judgment, such claim shall be adjudicated upon in the manner hereinbefore provided for the adjudication of claims to property attached in execution of a decree for the payment of money.

 

RULE 9.

An order for attachment will be withdrawn if the defendant furnishes security or the suit is dismissed.

 

RULE 10.

Attachment before judgment not to affect rights of strangers, nor bar decree holder from applying for sale. – Attachment before judgment shall not affect the rights, existing prior to the attachment, of persons not parties to the suit, not bar any person holding a decree against the defendant from applying for the sale of the property under attachment in execution of such decree.

RULE 11-A.

Provisions applicable to attachment.-

(1) The provisions of this Code applicable to an attachment made in execution of a decree shall, so far as may be, apply to an attachment made before judgment which continues after the judgment by virtue of the provisions of rule 11.

(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.

RULE 7.

Mode of making attachment. – Save as otherwise expressly provided, the attachment shall be made in the manner provided for the attachment of property in execution of a decree.

As was also held in the case:Surender  Singh  Bajaj  v  M/S. Kitty Steels Limited  , 22 April, 2002, that – ‘Order38 Rule 7 CPC provides that the attachment under Order38 Rule 5 shall be made in the manner provided in the attachment of property in execution decree’.

RULE 8.

Adjudication of claim to property attached before judgment.- Where any claim is preferred to property attached before judgment, such claim shall be adjudicated upon in the manner hereinbefore provided for the adjudication of claims to property attached in execution of a decree for the payment of money.

 

RULE 9.

An order for attachment will be withdrawn if the defendant furnishes security or the suit is dismissed.

 

RULE 10.

Attachment before judgment not to affect rights of strangers, nor bar decree holder from applying for sale. – Attachment before judgment shall not affect the rights, existing prior to the attachment, of persons not parties to the suit, not bar any person holding a decree against the defendant from applying for the sale of the property under attachment in execution of such decree.

RULE 11-A.

Provisions applicable to attachment.-

(1) The provisions of this Code applicable to an attachment made in execution of a decree shall, so far as may be, apply to an attachment made before judgment which continues after the judgment by virtue of the provisions of rule 11.

(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.

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