AP HIGH COURT AMARAVATHI
GIST
In an appeal under Order XLIII Rule 1 CPC against an order making attachment before judgment absolute under Order XXXVIII Rules 5 and 6 CPC, the High Court held that where the Trial Court has recorded a prima facie case, considered documentary material placed on record, and found a real threat of alienation of property with intent to defeat execution of a possible decree, the appellate court will not interfere merely because disputed questions of accounts and calculations arise. Objections to calculations and rival versions of accounts are matters for trial or for modification application before the Trial Court and cannot, by themselves, vitiate an order of attachment passed in compliance with statutory requirements. The appellate court will not substitute its discretion unless the order is shown to be arbitrary, perverse, or contrary to settled principles governing Order XXXVIII CPC.
HEAD NOTES
Code of Civil Procedure, 1908 — Order XXXVIII Rules 5 & 6
Attachment before judgment — Conditions — Prima facie case and intent to defeat decree.
Attachment before judgment can be ordered where the Court is satisfied that the plaintiff has a prima facie claim and that the defendant is attempting to alienate or dispose of property with intent to obstruct or delay execution of a decree that may be passed.
(Paras 32–35, 39)
Attachment before judgment — Nature of power
Extraordinary and drastic power — To be exercised sparingly.
The power under Order XXXVIII Rule 5 CPC is not intended to convert an unsecured debt into a secured one and must be exercised strictly in accordance with statutory requirements and settled principles.
(Paras 34–35)
Attachment before judgment — Threat of alienation
Brochure and third-party affidavit — Sufficient prima facie material.
Material indicating that the defendant printed brochures in his own name and attempted to alienate property was sufficient for the Trial Court to infer a real threat of alienation capable of rendering a future decree inexecutable.
(Paras 13, 17, 39)
Prima facie case — Meaning
Not proof of title or final entitlement.
Prima facie case signifies a substantial and bona fide dispute requiring trial and not proof of the claim on merits.
(Paras 40–41)
Accounts and calculations — Dispute
Disputed calculations not ground to set aside attachment.
Where the Trial Court called for correlation statements and relied upon calculation tables filed by the plaintiff, in the absence of objections or counter-tables by the defendant at that stage, disputes regarding correctness of calculations cannot invalidate an attachment order and must be adjudicated at trial or in modification proceedings.
(Paras 42–48, 58)
Order XXXVIII Rule 6 CPC
Failure to furnish security — Attachment justified.
Where the defendant fails to furnish security as directed under Order XXXVIII Rule 5 CPC, the Court is empowered under Rule 6 to order attachment of property sufficient to satisfy the decree that may be passed.
(Paras 16, 33)
Appellate jurisdiction — Order XLIII Rule 1 CPC
Limited scope of interference — Discretionary orders.
In an appeal against an interlocutory order, the appellate court will not interfere with the discretion exercised by the Trial Court unless the order is shown to be arbitrary, capricious, perverse, or in violation of settled principles of law.
(Paras 53–56)
Reasoned order
Attachment order must disclose reasons.
An order of attachment before judgment must disclose reasons demonstrating satisfaction of statutory conditions; where such reasons are recorded, the order cannot be termed non-speaking.
(Paras 49–52)
RATIO DECIDENDI
Where the Trial Court, after affording opportunity, records satisfaction that (i) the plaintiff has a prima facie claim, (ii) the defendant has failed to furnish security, and (iii) there exists a real likelihood of alienation of property intended to defeat execution of a possible decree, an order making attachment before judgment absolute under Order XXXVIII Rules 5 and 6 CPC is a valid exercise of discretion. In appeal under Order XLIII Rule 1 CPC, the High Court will not re-appreciate disputed accounts or substitute its discretion unless the order is shown to be perverse, arbitrary, or contrary to settled law.
ANALYSIS OF FACTS AND LAW
I. Nature of the Suit and Interim Proceedings
(Paras 2–10)
The suit was a commercial original suit for recovery of ₹3,19,75,543/- based on an MOU dated 05.11.2020.
Plaintiff alleged refundable advance, periodical advances, marketing expenses, and loss caused by unilateral conduct of the defendant.
Defendant denied liability, asserted dissolution of MOU, refund by adjustment, and disputed calculations.
II. Application under Order XXXVIII Rule 5 CPC
(Paras 8–14)
Plaintiff sought attachment before judgment alleging imminent alienation of property.
Defendant opposed the application reiterating defences in the written statement.
The Special Court directed furnishing of security; on failure, attachment was effected and later made absolute.
III. Findings of the Trial Court
(Paras 11–14, 39)
Prima facie case established based on documents and correlation tables.
Threat of alienation inferred from brochures and third-party affidavit.
Observed that issues regarding interest, cancellation of MOU, and exact liability were matters for trial.
IV. Appellate Contentions
(Paras 22–29)
Appellant contended absence of prima facie case, erroneous calculations, and non-speaking order.
Respondent supported the order relying on material indicating alienation and failure to furnish security.
V. Legal Principles Applied
(Paras 32–38)
Order XXXVIII Rules 5 & 6 CPC require satisfaction of intent to defeat decree.
Attachment before judgment is extraordinary and must not be granted mechanically.
Prima facie case does not mean final adjudication.
VI. Appellate Court’s Reasoning
(Paras 39–56)
Trial Court recorded cogent reasons and complied with statutory requirements.
Defendant failed to object to correlation tables at the appropriate stage.
Disputed calculations are matters for trial or modification application.
No perversity or illegality found warranting interference.
VII. Conclusion
(Paras 57–60)
Appeal dismissed.
Liberty preserved to seek modification before Trial Court.
No costs.
