THE HONOURABLE SRI JUSTICE N.V. RAMANA Civil Revision Petition Nos.6135 of 2009, 295 of 2010 and 994 of 2010 COMMON ORDER: These three civil revision petitions arise out of the common order dated 25.11.2009 passed in I.A. Nos. 2225, 3162 and 3561 of 2009 in O.S. No. 350 of 2009 by the learned Principal District Judge, Ranga Reddy District and, therefore, they are heard together and disposed of by this common order. M/s. Legend Estates Private Limited, who is the petitioner in C.R.P. Nos. 6135 of 2009 and 994 of 2010 and respondent in C.R.P. No. 295 of 2010, filed the present Suit O.S. No. 350 of 2009 before the Court below, against the petitioners in C.R.P. No. 295 of 2010, who are the respondents in C.R.P. Nos. 6135 of 2009 and 994 of 2010, as defendants, for the relief of recovery of money of Rs. 21,02,67,500/-. For the sake of convenience, the parties will be referred to by their status in the suit. Pleadings of the plaintiff in the plaint, in nutshell, are as under: The defendants, claiming to be the owners and possessors of the land in Sy. Nos. 206/1/AA and 206/2/A (old Sy. No. 206/AA), 207/A, 203/1/AA (old Sy. No .203 part) in Sy.No.206/A and 207/A, totally admeasuring Ac.9.20 gts. situated at Madeenaguda Village, Serilingampally Mandal, Ranga Reddy District, entered into a development agreement dated 08.11.2007 with the plaintiff, which was duly registered with the District Registrar, Ranga Reddy District, vide document No. 13280/2007, with regard to construction of a multi-storied residential complex in the subject property by the plaintiff. Before execution of the agreement, the plaintiff paid an amount of Rs. 1,85,00,000/- to the defendants towards advance security deposit and in pursuance of execution of agreement, it paid a further sum of Rs. 9,46,00,000/- and thus in all it paid a sum of Rs. 11,31,00,000/- towards advance security deposit, apart from incurring Rs.60,000/- towards costs of registration and stamp duty. As per the development agreement, the defendants have to part with 47% of the suit schedule property in favour of the plaintiff or its nominees and the plaintiff has to deliver to the defendants 53% constructed area, on refund of interest free refundable security deposit of Rs. 11,31,00,000/-. The plaintiff, pursuant to execution of development agreement, executed preliminary works, for which it incurred Rs. 1,51,50,000/-, and also expended Rs. 30,00,000/- towards formation of roads and Rs. 20,00,000/- for construction of compound, and further incurred Rs. 1,50,00,000/- towards interest liability. Thus, the plaintiff invested a total sum of Rs. 14,82,50,000/-, for development of suit schedule property, in pursuance of the development agreement dated 08.11.2007. While so, the plaintiff came to know that proceedings under the Urban Land (Ceiling & Regulation) Act, 1976, are pending in respect of the suit schedule property and the defendants filed W.P. No. 18428 of 2008 before this Court, questioning the proceedings initiated under the Urban Land Ceiling Act in respect of the suit schedule property, and obtained interim stay. The defendants, in the said writ petition, did not disclose about the execution of development agreement in favour of the plaintiff. The application for grant of sanction for construction of multi- storied residential complex in the suit schedule land was also rejected by HUDA, on the ground that the land is surplus land, and at the request of the defendants, the plaintiff applied to GHMC for permission for construction of residential complex comprising of sub-cellar, cellar, stilt for parking plus 16 upper floors and the same is pending consideration for payment of fees. During the process, the defendants, without the consent and knowledge of the plaintiff, filed W.P. No. 19212 of 2008, seeking directions to the officials of GHMC to receive their application for permission for construction in respect of Acs. 4.20 gts. of land, without insisting for ‘No Objection Certificate’ from the District Collector, Ranga Reddy District, and the same was disposed of on 05.09.2008, with directions to respondents therein to receive the application of the defendants without insisting for NOC. Thus, there is cloud over the title of the defendants over the suit schedule land and the defendants, with a mala fide intention, suppressed the pendency of land ceiling proceedings in respect of the suit schedule land and executed the development agreement and made the plaintiff to part with huge amounts of money and caused wrongful loss to it. The plaintiff, therefore, prayed for recovery of money of Rs. 21,02,67,500/-, which includes the amount paid by them to the defendants, interest at the rate of 18% on the amount paid, the expenses incurred by them under different heads, pursuant to the development agreement, and also damages to the tune of Rs.5,00,00,000/-. The plaintiff, contending that the defendants are indebted to several people in the market in similar manner and contemplating to move away from the jurisdiction of the Court, by selling away their properties pending the suit, and if they succeed in their attempts, and if ultimately it succeeds in the suit, it will be very difficult for the plaintiff to recover the amount from the defendants, filed I.A. No. 2225 of 2009, under Order 38 Rule 5 of C.P.C., praying the Court to attach petition schedule properties before judgment. The plaintiff relied on two third- party affidavits to show that the defendants are trying to alienate the petition schedule properties. On the other hand, the defendants filed two applications; one in I.A. No. 3162 of 2009, seeking leave of the Court to defend the suit unconditionally, and another in I.A. No. 3561 of 2009, praying the Court to reject the plaint in the present suit. They have also filed their counter to the application in I.A. No. 2225 of 2009 filed by the plaintiff. In the affidavits filed in support of the applications filed by them in I.A. Nos. 3162 and 3561 of 2009 and their counter to I.A. No. 2225 of 2009 filed by the plaintiff for attachment of suit schedule property before judgment, the defendants admitted the execution of development agreement dated 08.07.2007. Their pleadings, in brief, are as under: Pursuant to the development agreement dated 08.07.2007, the GHMC granted permission dated 19.07.2008 for the proposed constructions and directed the plaintiff to pay Rs. 7,15,92,125/- within ten days, but the plaintiff failed to pay the same and instead, to escape from the liability, it has got issued a legal notice dated 11.01.2008 to them, alleging that the suit land is surplus land and demanded them to pay Rs. 19,81,60,000/-, to which they issued a reply categorically denying their liability and stating that the alleged land ceiling proceedings were misdirected in the name of their vendors’ predecessor-in-title and that the lands were sold to their vendors much before the enactment of ULC Act. Further, challenging the ULC proceedings, they filed writ petition and obtained interim stay. In their reply notice, they demanded the plaintiff to proceed with the construction as per the development agreement, but it filed O.S. No. 2565 of 2008 before the II Additional Senior Civil Judge’s Court, Ranga Reddy District, against them, for the relief of perpetual injunction, and also filed an application in I.A. No. 2237 of 2008 seeking temporary injunction, and subsequently brought the present suit into existence. The present suit filed under Order 37 Rule 2 of C.P.C. is not maintainable, as the alleged transaction under the suit agreement does not fall within the ambit of Order 37 Rule 1 (2) of C.P.C. The summons for Judgment, without date of hearing, served on them are incomplete and illegal under Order 37 Rule 3 (4) C.P.C. The suit in the present form cannot be decreed, even in the absence of defence from them for want of supporting documents for various amounts claimed in the plaint. Not even a scrap of paper is filed in proof of the amounts totaling to Rs. 3,51,00,000/- claimed under items 3 to 13. It is mandatory that all the supporting documents, which have evidentiary value carrying legal presumption to support the claim of amounts, shall be filed at the first instance along with the plaint, but the plaintiff did not comply with the same. The alleged supplemental agreement dated 08.11.2007, which was sought to be made part and parcel of development agreement dated 08.11.2007, under which the plaintiff claims to have paid Rs.11,31,00,000/- to them, is invalid and inadmissible, for want of stamp duty and registration and thus, it has no presumptive value, even in the absence of defence from them. The development agreement dated 08.11.2007 is clear and categorical that the security deposit is free from interest and thus the claim of alleged interest and Rs. 5,00,00,000/- towards loss of business, is illegal. The contract under primary development agreement dated 08.11.2007 is still in force and thus the suit is premature and that the allegation of defect in title is only hypothetical and baseless. The plaintiff has no cause of action and they do not have any liability as claimed by the plaintiff. The averments in the plaint call for adjudication on many triable issues and thus the suit ought not to have been numbered under Order 37 Rule 2 of C.P.C. However, they have no intention to make any attempts to defeat the purpose of decree that may be passed in the suit and they would abide by the decree if the plaintiff succeeds in the suit and that, having set up huge business establishment in Hyderabad, their fleeing away from Hyderabad as alleged by the plaintiff is a make-believe story. The Court in granting conditional attachment order dated 16.06.2009, solely relied on the third party affidavits filed by the plaintiff, which are incomplete and vague. Therefore, the same cannot be sustained and calling for security from them even before the plaintiff substantiates its claim by cogent evidence and placing heavy burden on them is totally unwarranted and unjustified. The plaintiff filed counters, resisting the two applications filed by the defendants. Before the trial Court, both the parties filed documentary evidence in support of their respective cases. The trial Court has taken up all the three petitions together for disposal and, having gone through the respective pleadings of the parties and the documents filed by them, held that there are no grounds to reject the plaint, and on the other hand there is prima facie material on record to show that an amount of Rs. 8,41,00,000/- was received by the 3rd defendant, and that the same was credited to his account by way of cheques, as is evident from Exs. A3 and A14 to A16 issued by the concerned banks, and therefore leave can be granted to the defendants to defend the suit claim to the extent of the said amount of Rs. 8,41,00,000/-, on condition of their depositing the said amount and, for the rest of the amount, unconditional leave can be granted. Further, having considered the third party affidavits filed by the plaintiff in support of his claim for attachment of the properties of the defendants before judgment, the trial Court, in order to protect the interests of the plaintiff, thought it appropriate to attach the schedule properties proportionate to the said amount of Rs. 8,41,00,000/-. Having come to such conclusions, the trial Court, by common order dated 25.11.2009, dismissed I.A. No. 3561 of 2009, filed by the defendants for rejection of plaint, and partly allowed I.A. No. 3162 of 2009, granting leave to the defendants to defend the suit with regard to the amount of Rs. 8,41,00,000/- covered by the cheques, on furnishing security for the said amount within four months from the date of order and as regards the remaining suit amount, leave to defend was granted unconditionally, and also partly allowed I.A. No. 2225 of 2009 filed by the plaintiff for attachment of petition schedule properties, attaching the petition schedule B, C and D properties before judgment, under Order 38 Rule 5 of C.P.C, for the amount of Rs. 8,41,00,000/-. However, it was made clear that if the defendants want to get the attachment raised, they shall deposit the amount of Rs. 8,41,00,000/- into Court as security as ordered in I.A. No. 3162 of 2009. Aggrieved by the orders in I.A. Nos. 2225 of 2009 and 3162 of 2009, ordering attachment of some of the petition schedule properties for the amount of Rs. 8,41,00,000/- and granting conditional leave to the defendants to defend the suit in respect of that amount and unconditional leave in respect of remaining suit amount as stated above, the plaintiff preferred C.R.P. Nos. 6135 of 2009 and 994 of 2010, whereas the defendants preferred C.R.P. No. 295 of 2010, aggrieved by the attachment ordered in respect of some of the petition schedule properties in I.A. No. 2225 of 2009. Learned counsel for the plaintiff submits that the Court below, having found that the suit is maintainable and not premature, ought to have allowed I.A. No. 2225 of 2009 in its entirety, by ordering attachment to the extent of entire suit claim. He further submits that the Court below failed to consider the receipts under Exs. A12, A13 and A17, which would show receipt of amount of Rs. 2,90,00,000/- by the defendants. The Court below also failed to consider that in the legal notice got issued by the plaintiff under Ex. A5, the plaintiff categorically mentioned that it paid a sum of Rs. 11,31,00,000/- to the defendants, and it was not disputed by the defendants in their reply under Ex. A6. The defendants have nowhere in their counter or reply notice, disputed the amounts spent by the plaintiff for development of the suit property or the execution of supplementary agreement under Ex. A18. The Court below, thus, erred in ordering attachment in respect of part of the claim alone by granting conditional leave to the defendants to defend the suit and unconditional leave in respect of the balance amount. Per contra, learned counsel appearing for the defendants submits that order of the Court below, attaching the petition schedule B, C and D properties, for an amount of Rs. 8,41,00,000/-, is improper and the Court below ought to have given an opportunity to the defendants to defend the suit unconditionally, by adducing evidence. The Court below erred in granting the conditional attachment, basing on the alleged third party affidavits filed by the plaintiff, which are incomplete and vague, and it ought to have considered that the market value of the property covered under the development agreement, is more than Rs. 100 crores, which is ten times more than the value of the amount ordered by the Court below. He further submits that the suit transactions do not fall under the provisions of Order 37 Rule 2 of C.P.C. and as such the suit is not maintainable. Heard the learned counsel for the plaintiff and the learned counsel for the defendants and perused the common order under revision and other material available on record. At the outset, it would be appropriate to refer to the scope and ambit of Rule 5 of Order 38 C.P.C., which reads as follows: A plain reading of sub-rule (1) of Rule 5 of Order 38 C.P.C., would indicate that the object of the Rule is that when at any stage of the suit, the Court is satisfied that the defendant, with an intent to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of the whole or any part of his property or 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 would not furnish security. The purport of the Rule is that an order of attachment cannot be passed merely because no loss or prejudice would be caused to the defendant, for the burden of proof squarely lies on the plaintiff to establish prima facie that the defendant, with a mala fide intention to delay or defeat the decree that may be passed against him, is intending to alienate his properties. Sub-rule (4) of Rule 5 also specifies that an order of attachment without compliance with the provisions of sub-rule 1 would be void. Therefore, before the Court passes an order of attachment, it must satisfy for itself that the defendant is about to dispose of or remove the whole or part of his property, with an intention to delay or defeat the decree that may be passed against him and record such finding. However, such satisfaction of the Court cannot be whimsical or illusory and it is only on proof, positively that the defendant is about to dispose of the property or any part thereof and that if the order of attachment is not passed, the interests of the plaintiff would be adversely affected, then the Court can pass the order of attachment. Thus, it is clear that satisfaction to be arrived at by the Court as required by sub-rule (1) of Rule 5 of Order 38 C.P.C., for making an order of attachment before judgment, is mandatory. On this issue, a Division Bench of this Court in its judgment in Sripathi Panditarajula Venkanna Babu v. Varalakshmi Finance Corporation, Rajahmundry[1], at paragraph 7, held as under: “An order of attachment before judgment affects the right of the owner of the property to deal with the same even before any verdict is available against him as regards the claim of the plaintiff. Such an order is not to be passed merely for the asking for or in the routine manner. There must be cogent, prima facie material to lead the Court to the conclusion that there has been attempts by the defendant to dispose of the property with a view to defeat the decree. Mere satisfaction that there has been an attempt to dispose of the property is in itself not sufficient and there must be further conclusion, again prima facie, that the attempt to alienate is to delay or defeat the decree. For reaching such satisfaction, there has to be before the Court some tangible material than the mere statement without giving any particulars and without disclosing the source of the information of attempted alienation. The learned Subordinate Judge should have been alert to the fact that there was actually no third party affidavit as the second affidavit was only of the Clerk of the respondent-firm who was under its control as an employee. The affidavits in themselves do not disclose as to when an attempt was made to alienate, what type of alienation was intended to be made and to whom the alienation was being desired to be made and who gave such information. The learned subordinate Judge did not make any such enquiry before passing the order which grossly and adversely affected the appellant. In the order passed on 04.12.995, no time was fixed to enable the appellant to furnish security. While passing the final order, the Court was not alive to the fact the respondent’s agent had accompanied the bailiff from the Madras Court and finding the respondent merely absent recorded remark that the security was not furnished by the appellant. One fails to understand as to how if the appellant was absent, he failed to furnish security. Merely because the appellant was not present at the spot when the bailiff went there, it did not mean that he was absent for all times. It could not certainly be said that the appellant must be found at his place whenever the bailiff chose to visit and the moment he is not found, the property would be attached. There was no genuine attempt made to enable the appellant to furnish security. The report further shows that the bailiff went to item one of the property and finding that the appellant was absent, he called upon the wife and son of the appellant to furnish security and on their failure to do so, attached the property. Obviously no time was given to the respondent to know of the order of the Court and to furnish security as directed. The procedure followed is highly irregular. Consequently, we are to hold that the appellant was never given any opportunity to furnish security for which the impugned order passed is void under Order 38 Rule 5 (4) of C.P.C. In that view of the matter, we set aside the impugned order and allow the civil miscellaneous appeal with costs.” In this context, it is also relevant to refer to another judgment of a Division Bench of this Court in Surender Singh Bajaj v. Kitty Steels Limited[2], wherein at paragraph 10, it was held as under: “Since we hold that the application filed by the plaintiffs under Order 38 Rule 5 C.P.C. in this case is maintainable, the next question to be considered is whether in allowing the application, the Court below acted legally or not? It is well settled that an order under Order 38 Rule 5 CPC should not be passed merely for the sake of asking or merely because of the fact that the garnishee has huge sum of money payable to the defendant. The law in this regard were discussed by this Court in Sripathi Panditarajula Venkanna Babu v. Varalakshmi Finance Corporation, Rajahmundry, 1996 (4) ALD 453 (DB), wherein the steps necessary to be taken before an order is passed were clearly discussed and laid down. Further, a Division Bench of this Court in Chairman and Managing Director, R.P.N.Nigam Limited, New Delhi v. Rambachane Singh, AIR 1998 AP 127, dealing with necessary conditions for ordering an application filed under Order 38 Rule 5 CPC, was pleased to hold: “…………………Such an order is not to be passed in a routine manner merely for the asking for it but that the Court has to be satisfied on tangible materials placed before it that there are attempt at alienation and that the steps are taken so as to delay or obstruct the judgment that may be ultimately passed against the defendant. Before passing an order, the defendant is first of all to be called upon to furnish security in the shape of specific sum to produce and place at the disposal of the Court when required, the property specified by the plaintiff in his petition or such portion of it as may be sufficient to satisfy the decree or call upon him to show-cause as to why he shall not furnish security. But such an order can be passed only after the primary satisfaction of the obstructive conduct of the defendant. The ultimate attachment order can be passed only if the defendant either fails to show-cause why the security shall not be furnished or fails to furnish the security as required……..” The only allegation made by the plaintiffs in the affidavit filed in support of the application is that the defendant No.2 is “now trying to leave beyond the jurisdiction of the Court” and that “he is attempting to withdraw the money deposited with the defendant No.2 and if the attachment before judgment is not granted it would be very difficult for the plaintiffs to recover their dues from the defendant No.1.” That is the only allegation in the affidavit. Therefore, the question to be considered is whether the above allegation of the plaintiffs could constitute necessary conditions precedent to order an application under Order 38 Rule 5 CPC. The above circumstances stated by the plaintiffs in the affidavit, even if true, in itself, in my considered opinion, is not sufficient to pass an order under Order 38 Rule 5 CPC, unless it is also pleaded that by the impugned conduct of the defendant