Content:-
CPC Provisions
In most cases, a creditor with a claim against their debtor must first obtain a decree against the debtor and then execute the decree by either having the debtor arrested or attaching their property in accordance with the provisions outlined in Order 21 of the legal code.
However, under certain special circumstances, provided under Order XXXVIII, the creditor may seek the arrest of the debtor or the attachment of their property even before obtaining a judgement.
These provisions are designed to serve two primary purposes:
1. To facilitate the plaintiff in recovering the amount of the decree if it is eventually ruled in their favour.
2. To prevent any attempts by the defendant to obstruct or evade the execution of a decree issued against them.
Conditions for Arrest Before Judgement
An application for arrest may be filed by the plaintiff at any point after the presentation of the plaint, even before the defendant has been served with summons.
However, before exercising this exceptional power, the court must be satisfied with two conditions:
(a) The plaintiff's suit must be genuine, and their cause of action must appear to be prima facie valid, subject to the plaintiff substantiating the allegations made in the plaint.
(b) The court must have sufficient grounds to believe, based on adequate evidence, that unless this extraordinary power is invoked, there is a genuine risk that the defendant will attempt to evade the jurisdiction of the court by either leaving the jurisdiction or transferring their property beyond the reach of the court's authority.
The authority to arrest the defendant, particularly before a decree is issued in favour of the plaintiff, is a drastic measure and should be exercised with careful consideration.
Before invoking this rule, the court must be convinced, based on substantial evidence, that there exists a genuine risk that the defendant will attempt to evade the jurisdiction of the court by either leaving the jurisdiction or disposing of their assets.
As highlighted in the case of Vareed Jacob v. Sosamma Greevarghese (2004) 6 SCC 378, the court must exercise this power with due care, caution, and circumspection.
It's crucial to note that the power to arrest before judgement should not be utilised as a means for the plaintiff to coerce or compel the defendant to settle, nor should it be employed to ensure an easier execution of the decree.
This principle was emphasised in the case of Raman Tech. & Process Engg Co. v. Solanki Traders (2008) 2 SCC 302.
Arrest on Insufficient Grounds
Section 95 stipulates that in any suit where the plaintiff secures an order of arrest against the defendant based on insufficient grounds, or if the plaintiff's suit ultimately fails and the court determines that there was no reasonable or probable cause for initiating the suit, the defendant may apply to the court for compensation.
Upon such application, the court has the authority to order the plaintiff to pay compensation to the defendant. The amount of compensation awarded should be reasonable and may not exceed fifty thousand rupees.
This compensation aims to cover any expenses incurred by the defendant or any harm, including damage to reputation, suffered as a result of the unjustified legal action taken by the plaintiff.
Attachment Before Judgement
Under Rule 5 of Order XXXVIII, if the court becomes convinced, either through affidavit or other means, that the defendant intends to hinder or postpone the execution of any potential decree against them, it may take action. This action may include:
(a) Directing the defendant, within a specified timeframe, to provide security in a specified amount. This security may serve to ensure that the defendant preserves their property or its value until it can be used to satisfy any potential decree, or
(b) Directing the defendant to appear before the court and present reasons as to why they should not be required to provide security.
If the defendant fails to present sufficient reasons or neglects to provide the required security within the stipulated time frame, the court may then order the attachment of the specified property, or a portion of it, which appears adequate to satisfy any decree that may be issued in the suit.
The remedy of attachment before judgement is considered an extraordinary measure and should be employed sparingly and strictly in accordance with the law, exercising utmost care and caution to prevent its misuse as a tool of oppression.
Before the court can issue an order of attachment, it must satisfy two conditions:
1. The court must ascertain that the defendant is on the verge of disposing of their property, either wholly or partially.
2. It must be established that this disposition is intended to obstruct or delay the execution of any potential decree against the defendant.
Attachment essentially restricts the defendant's ability to alienate their property, and such limitations on the exercise of property rights should only be imposed upon clear and convincing evidence that the order is necessary for the plaintiff's protection.
Mere initiation of a suit against an individual does not automatically justify restricting their property rights. Additional circumstances must be present to convince the court of the defendant's intent to defraud the plaintiff.
Attachment before judgement should never be used as a means for the plaintiff to pressure the defendant into reaching a settlement. Therefore, the court must exercise utmost caution and circumspection.
It should thoroughly examine the allegations against the defendant, ensure that the requirements of the legal code are met, and confirm that a valid case for attachment before judgement has been established before issuing the necessary order.
Failure to adhere to these principles may result in the court's order being disregarded due to a breach of duty.
Rules as to Attachment Before Judgement
Attachment before judgement is governed by several rules outlined in Order 38 of the legal code. Thesaid rules as follows:
Mode of Attachment (Rule 7): Attachment shall be carried out in the same manner as the attachment of property in execution of a decree.
2. Exemption from Attachment (Rule 12): Agricultural produce in possession of an agriculturist cannot be attached by the court.
3. Rights of Third Parties (Rule 10): Attachment before judgement does not affect the rights of individuals who had rights to the property prior to the attachment, provided they are not parties to the suit.
4. Adjudication of Claims (Rule 8): Any claim made to the property attached before judgement will be adjudicated in the same manner as claims to property attached in execution of a decree.
5. Reattachment in Execution (Rules 11-11-A): If a decree is passed in favour of the plaintiff after attachment before judgement, there's no need to reattach the property in execution. The provisions of Order 21 concerning attachment made in execution of a decree also apply to attachment before judgement.
6. Effect of Attachment: Attachment before judgement serves as a guarantee that the decree will not become ineffective due to lack of property for satisfaction. However, the plaintiff does not gain title to the property through attachment before judgement.
7. Withdrawal of Attachment (Rule 9): If the defendant furnishes security, the court must withdraw the attachment.
8. Removal of Attachment (Rule 9): The court will withdraw the attachment if the defendant furnishes security or if the suit is dismissed.
9. Determination of Attachment: Attachment is determined in various circumstances, including when the defendant furnishes security, when the attaching creditor withdraws the attachment, when the suit is dismissed,
When the decree is satisfied, reversed, or set aside, when the court releases the property, when an application for execution is dismissed, or when the decree-holder fails to comply with the decree's requirements.
Comments