RAMAN TECH. & PROCESS ENGG. CO. & ANR. versus SOLANKI TRADERS

Citation: [2007] 12 S.C.R. 409 · Decided: 20-11-2007 · Supreme Court of India · Bench: R.V. RAVEENDRAN, P. SATHASIVAM · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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RAMAN TECH. & PROCESS ENGG. CO. & ANR. 
A 
v. 
SOLANKI TRADERS 
NOVEMBER 20, 2007 
[R.V. RA VEENDRAN AND P. SATHASIV AM, JJ.] 
B 
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Code a/Civil Procedure, 1908: 
Or. 38 r.5-Direction to defendant to furnish security for suit c 
claim-HELD: Power under Or.38 r.5 is a drastic and extraordinary 
power-Such power should not be exercised mechanically-It should 
be used sparingly and strictly in accordance with Rule-Purpose of 
Or. 38 r.5 is not to convert an unsecured debt into a secured debt-
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Any attempt by a plaintiff to utilize provisions of Or. 38 r. 5 as a leverage D 
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for coercing defendant to settle the suit claim should be discouraged-
Before power is exercised under Or. 38 r. 5, plaintiff should show, prima 
facie, that his claim is bonafide and valid and also satisfy the court 
that defendant is about to remove or dispose of whole or part of his 
property, with intention of obstructing or delaying execution of any E 
decree that may be passed against him-Courts should also keep in 
view the principles relating to grant of attachment before judgment*-
A defendant is not debarred.fi'om dealing with his property merely 
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because a suit is filed or about to be filed against him-Shifting of 
business from one premises to another or removal of machinery to F 
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another premises by itself is not a ground for granting attachment 
before judgment-On facts, particulars of claim in the plaint were not 
specific-Trial court had rejected application on ground that plaintiff 
had failed to make out a prime facie case-It did not, therefore, 
examine the question whether defendant. by shifting his machinery, G 
was attempting to defeat any decree that may be passed-High Court 
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ignored absence of a prima facie case and ought not to have interfered 
with order rejecting application-Order of High Court is set aside and 
that of trial court restored. 
409 
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410 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
A 
*Prem Raj Mundra v. Afd. Maneck Gazi, AIR 1951 Cal 156, referred 
B 
c 
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E 
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G 
H 
to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6171 of 
2001. 
From the final Judgment and Order dated 30.10.2000 of the High 
Court of Judicature, Andhra Pradesh at Hyderabad in C.R.P. No. 3377/ 
2000. 
D. Mahesh Babu for the Appellant. 
The following Order of the Court was delivered by 
ORDER 
1. The appellants are the defendants in O.S. No. 143/2000 on the 
file of the Civil Judge Junior Division, Medchal, filed by the respondent 
for recovery ofRs.99200/- towards supply of material. 
2. The plaintiff moved an application under Order 38 Rule 5 CPC 
praying for a direction to defendants to furnish security for the suit claim 
and if they failed to do so, for attachment before judgment. The Trial Court 
by its order dated 4.8.2000 dismissed the said application. It noted that 
though the plaintiff alleged that two post dated cheques given by the 
defendants towards payment of the bill amounts were dishonoured, it had 
neither disclosed the particulars of the said cheques, nor the dates of 
dishonour. It was of the view that merely making a bald statement that 
Rs. 99 ,200/- was due from the defendants was not sufficient to make out 
primafacie case, when defendants had denied the suit claim. 
3. The said order was challenged in revision by the plaintiff. Before 
the High Court, the plaintiff pointed out that the trial court had ignored its 
averment that defendants had removed their name board and were 
removing their machinery from the jurisdiction of the court. The plaintiff 
also produced a copy of the writ petition (WP No. 11855/2000) filed 
by the defendants to restrain the police from interfering with the shifting 
of their assets from their business premises to another premises. The High 
Court allowed the revision petition by order dated 13 .10.2000, being of 
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RAMAN TECH. & PROCESS ENGG. CO. v. SOLANKI 
411 
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TRADERS 
the view that the trial court ought to have taken note of the fact that A 
defendants were trying to remove the machinery. It directed defendants 
to furnish security for the suit amount to the satisfaction of the court within 
four weeks. The said order is challenged in this appeal by special leave. 
4. The object of supplemental proceedings (applications for arrest B 
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or attachment before judgment, grant of temporary injunctions and 
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appointment of receivers) is to prevent the ends of justice being defeated. 
The object of order 38

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