Islam Steel Mills Ltd. (Petitioner)
Nirman International Ltd. and others (Respondents)
ATM Afzal CJ
Mustafa Kamal J
Latifur Rahman J
Md Abdur Rouf J
Bimalendu Bikash Roy Choudhury J
May 25, 1997.
The Code of Civil Procedure, 1908 (V of 1908) Or. XXXVIII rr. 5-10
The main consideration is that the power of attachment of property before judgment being an extraordinary power of interfering with a party’s right to use and enjoy its own property before any decree is passed, the Court should be very circumspect in allowing such prayer and must decide the matter on the strength of the facts of each case. A big company like respondent No. 1 could not be and should not be prevented from drawing its bills disrupting its business merely on a vague allegation that the defendants were trying to close down their business or that they have been trying to withdraw bills from the Bangladesh Bank to defraud the plaintiff and to frustrate the suit…………………….(12)
Cases Referred to-
Md. Iman All vs. Mir Abdus Salarn, 1988 BCR (AD) 125, Khurshid Anwar vs. Jamil Akhter, 1986 BLD (AD)83, Unimarine SA Panama 31 DLR (AD) 112.
Rafique ul Huq, Senior Advocate, instructed by Mvi. Md, Wahidullah, Advocate-on-Record — For the Petitioner.
Syed Ishtiaq Ahmed, Senior Advocate (Rokanuddin Mahmud, Senior Advocate with him) instructed by Md. Sharifuddin Chaklader, Advocate-on-Record— For Respondent No. 4.
Not Represented—For Respondent Nos. 1-3, 5-10.
Civil Petition for Leave to Appeal No. 392 of 1997
(From the judgment and order dated February 5, 1997 passed by the High Court Division, Dhaka in FMA No. 15 of 1996).
ATM Afzal CJ.- This petition by the plaintiff is from judgment and order dated 5 February, 1997 passed by a Division Bench of the High Court Division in First Misc. Appeal No. 15 of 1996 allowing the appeal and setting aside the order of attachment before judgment dated 27-11-95 passed by the Subordinate Judge, Second Court, Chittagong in Money Suit No. 14 of 1995.
2. Material facts of the case are that the plaintiff company, a manufacturer of various iron and steel materials, instituted the aforesaid suit on 1-11-95 against the defendant-respondents for recovery of Taka 7,86,28,200.35. Defendant- Respondent No. 1, a private construction company, started business with the plaintiff from September, 1988 by making purchases of its steel and iron products on deferred payment basis and by 1994 Taka 24,77,58,181.71 became due from respondent No. 1 and respondent No. 2 (a Joint venture of the former). The said respondents paid Taka 19,88,42,860.00 leaving an outstanding of Taka 4,79,15,321.71 for which demand was made from time to time.
3. The plaintiff’s case is that on 12-2-95, respondent No. 1 issued an account payee cheque for Taka 1,00,000.00 in part payment of the outstanding dues but the cheque was dishonored on presentation to the Bank for non-arrangement of funds. However, there was some sort of understanding with the respondent with regard to the payment of the dues but ultimately the respondent did not pay anything and hence the Suit.
4. On 14-11-95 the plaintiff filed an application under Order 38 rule 10 of the Code of Civil Procedure for attachment of the schedule properties before judgment alleging, inter alia, that the cheque issued by the respondent was dishonored and they failed to make payment of the dues, that respondent Nos. 1 and 2 were trying to close their business without paying the due amount of the plaintiff, that respondent Nos. 1-3 had done construction work in various organisations as contractors and they were trying to draw their bills mentioned in schedule I and that the defendants were trying to sell out their properties mentioned in schedule 2 with a view to defraud the creditors and to avoid the claim of the plaintiff. It was alleged that if the defendant sold out their properties and drew the bills mentioned in the schedule there would be no other property of the defendants to recover the claim of the plaintiff if the decree was passed in its favour.
5. The learned Subordinate Judge upon hearing the plaintiff, by an order of the same day i.e. 14-11-95, directed the principal defendant Nos. 1-5 to furnish security or bank guarantee for the amount claimed in the suit within 7 days of the receipt of the notice or to show cause why, they would not furnish such security or bank guarantee.
6. It appears that on 27-11-95 the plaintiff filed another petition under section 151 of the Code of Civil Procedure with a prayer for attachment before judgment of the same properties, namely, the bills of respondent No. 1 (schedule 1) and the landed properties (schedule 2). The learned Subordinate Judge again passed an order on the same day i.e., 27-11-95, ordering attachment as prayed for and further directed the concerned authorities not to pay the bills to defendant Nos. 1-5 (as in schedule I).
7. Being aggrieved by the said order defendant-respondent No. 1 took an appeal to the High Court Division, FMA No. 15 of 1996, in which the impugned judgment and order, as referred to above, were passed. Now this petition for leave to appeal from the same.
8. In allowing the appeal the High Court Division found that there was no valid service of show cause notice upon the defendant respondents as required under Order 5 rule 17 C.P.C. and further that there was no compliance with rules 19 and 19A of the said Order. From the petitions under Order 38 rule 5 read with section 151 C.P.C. the learned Judges were unable to find “any concrete allegations and material about the action of the appellant for sale of the property and for closing the business. Rather we find that the plaintiff made a sweeping statement without any concrete allegations and material regarding the alleged attempt to dispose of or to remove the same from the jurisdiction of the Court and to close the business by the appellant.” Finally it was held that the order of the learned Subordinate Judge could not stand as the same did not satisfy the requirements of Order 38 rule 5 CPC arid further for want of valid service of notice.
9. Mr. Rafique-ul Huq, learned Counsel for the petitioner, upon drawing our, attention to the declarations made by the process server along with his reports (Pages 388 and 392 of the paper book) and the provisions of rules 19 and 19A of Order 5, CPC and further referring to the decisions Md. Iman All vs. Mir Abdus Salarn, 1988 BCR (AD) 125, Khurshid Anwar vs. Jamil Akhter, 1986 BLD (AD)83 and some others submitted that the High Division was wrong in holding that there was no valid service of notice upon the defendants. He submitted that the declarations were evidence of the fact of service of notices. He also submitted High Court Division was equally wrong in holding that there was no concrete allegations and material showing that defendant No. 1 was trying to sell the properties in question or to close down the business in order to obstruct or delay the execution of the decree and that the requirements of rule 5 Order 38 CPC were not satisfied. Mr. Huq submitted that the plaintiff made out a very clear case of attachment before judgment and the conduct of defendant No. 1 and the circumstances on record clearly showed that if the attachment order was not made, there would be nothing left for the plaintiff to satisfy the decree. Mr. Huq, however, fairly submitted that schedule 2 properties could have been excluded from attachment, defendant No. 1 company not being the owner thereof, but there was no reason to set aside the order in so far as the bills (schedule 1) were concerned.
10. Syed Ishtiaq Ahmed, learned council entering caveat for respondent No. 4 submitted the High Court Division correctly decided both the points, that of service of notice and grounds for attachment, upon following correct principles of law.
11. We are inclined to agree with Mr. Ahmed. As far as service of notice is concerned, we find that although there were irregularities in the matter of service under rule 17 and declaration by the Court as to service under rule 19, but, strangely enough, defendant Nos. 1-4 did appear, as the order sheet shows (Page 214), on 1-1-96 (attachment order was made on 27-11-95) and were granted time to file objection against the application for attachment. It is possible that the defendants received the notice but the record was not convincing and the hurry in which the order of attachment was made is disturbing.
12. But the main consideration is that the power of attachment of property before judgment being an extraordinary power of interfering with a party’s right to use and enjoy its own property before any decree is passed, the Court should be very circumspect in allowing such prayer and must decide the matter on the strength of the facts of each case. In their petition before the High Court Division, the defendants disputed the claim of the plaintiffs as to alleged admitted liability. The High Court Division has correctly kept the principles in view (particularly those in the case of Unimarine SA Panama 31 DLR (AD) 112 and rightly decided against the attachment order. A big company like respondent No. 1 could not be and should not be prevented from drawing its bills disrupting its business merely on a vague allegation that the defendants were trying to close down their business or that they have been trying to withdraw bills from the Bangladesh Bank to defraud the plaintiff and to frustrate the suit.
The petition is dismissed.
Source: 50 DLR (AD)(1998) 21