* THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA CIVIL MISCELLANEOUS APPEAL No.1299 of 2008 % .12.2009 Between: The New India Assurance Company Limited … Appellant AND M/s.Bhagyanagar Ventures Limited …Respondent Counsel for the Appellant: Smt A.Jayanthi Counsel for the Respondents: Sri C.Kodanda Ram < Gist: > Head Note: ? CITATIONS: 1. AIR 1969 J&K 22 2. 1991 (II) ALT 343 3. 1996 (4) ALD 453 (DB) 4. AIR 2003 AP 13 5. 2006 (3) ALT 308 (DB) 6. 1982 (2) ALT 19 (NRC) THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA CIVIL MISCELLANEOUS APPEAL No.1299 of 2008 .12.2009 Between: The New India Assurance Company Limited … Appellant AND M/s.Bhagyanagar Ventures Limited … Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA CIVIL MISCELLANEOUS APPEAL No.1299 of 2008 JUDGMENT: (per Hon’ble Sri Justice V.V.S.Rao) This appeal is against the order dated 30.09.2008 in I.A.No.3218 of 2008 in O.S.No.125 of 2008 passed by the Court of I Additional Chief Judge, City Civil Court, Secunderabad, directing the appellant herein to show cause as to why it should not be directed to furnish security in a sum of Rs.11,79,025.40/-. The parties are referred to as they are arrayed in this miscellaneous appeal. The respondent herein is the owner of a building with plinth area of 4,564 square feet. The same was let out to the appellant herein. The suit was filed by respondent for eviction, recovery of rents and damages for use and occupation quantifyed at Rs.11,79,025.40/-. The interlocutory application under Order XXXVIII Rule 25 of the Code of Civil Procedure, 1908 (CPC) was also filed for attachment before Judgment on the plea that it would be difficult to recover the decree amount as the appellant is likely to shift from the premises. On 30th September, 2008, the Court below passed an order under Order XXXVIII Rule 5 of CPC directing the appellant to show cause as to why it should not be directed to furnish security. The said order reads as under. Whereas the petitioner/plaintiff has made out to the satisfaction of this Court that the respondent/defendant is due an amount of Rs.11,79,025.40 ps., and the respondent is trying to transfer his all assets to its alternative premises and trying to remove from the local limits of the jurisdiction of this court in which case the petitioner/plaintiff company will be put to irreparable loss and injury. You are hereby directed to furnish security fo rrs.11,79,025.40 ps and to show cause as to why you shall not be directed to furnish security for the above said suit amount of Rs.11,79,025.40 ps and if you fail to furnish the security, the petition schedule property will be attached after five (5) hours time by 4.11.2008. Aggrieved by the above order, the present appeal is filed. The learned counsel for respondent raised an objection regarding maintainability of appeal under Order XLIII Rule 1(q) of CPC. According to her, the final order of attachment/arrest under Rule 6 is alone appealable and when the civil Court orders to show cause as to why the defendant should not be directed to furnish security for the suit amount, an appeal would not lie. Learned counsel for appellant made elaborate submissions on this question as well as on the merits of the case. Both the counsel have relied on Vidhya Devi v Harish Chander[1], Yenamala Chandra Reddy v Nuvvula Chandramouli Naidu[2], S.P.V.Babu v Varalakshmi Finance Corporation[3], Surender Singh Bajaj v M/s.Kitty Steels Limited[4] and Deepika Constructions, Engineers and Civil Contractors v Garikipati Radha Krishnaiah[5]. Whether the appeal against an order of the Court ordering the defendant to show cause as to why he sould not be directed to furnish security is appealable? An order Under XLIII Rule 1 of CPC specifically excludes an appeal against an order of the Court under XXXVIII Rule 5 of CPC. The consideration of this aspect requires reading of both the Rules which are as under. ORDER XXXVIII–ARREST AND ATTACHMENT BEFORE JUDGMENT Rules 1 to 4 omitted. 5. Where defendant may be called upon to furnish security for production of property (1) Where, at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him,- (a) is about to dispose of the whole or any part of his property, or (b) 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 should not furnish security. (2) The plaintiff shall, unless the court otherwise directs, specify the property required to be attached and the estimated value thereof. (3) The Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified. (4) If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule such attachment shall be void. 6. Attachment where cause not shown or security not furnished (1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Court, the Court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached. (2) Where the defendant shows such cause of furnishes the required security, and the property specified or any portion of it has been attached, the Court shall order the attachment to be withdrawn, or make such other order as it thinks fit. The power of the Court to order attachment before judgment is attracted only when plaintiff pleads and prima facie proves two conditions precedent. These are: that the defendant is about to dispose of whole or any part of his property and defendant is about to remove the property from local limits of jurisdiction of the Court. Even when such prima facie case is proved, an order of attachment cannot be straight away issued without following procedure contemplated in Rule 5 of Order XXXVIII of CPC. The said Rule requires the Court to direct defendant to furnish security in such a sum as may be specified within the time stipulated by the Court. At the stage of Order XXXVIII Rule 5 of CPC, the order shall be in Form No.5 of Appendix-F of CPC, which reads as under. No. 5 Attachment before Judgment, with Order to Call for Security for Fulfilment of Decree (O. 38, R. 5) (Title) To The Bailiff of the Court. Whereas ......... has proved to the satisfaction of the Court that the defendant in the above suit.........; .................. These are to command you to call upon the said defendant......... on or before the ............. day of......... 19 ......... either to furnish security for the sum of rupees ........ to produce and place at the disposal of this Court when required ......... for the value thereof, or such portion of the value as may be sufficient to satisfy any decree that may be passed against him; or to appear and show cause why he should not furnish security; and you are further ordered to attach the said......... and keep the same under safe and secure custody until the further order of the Court; and you are further commanded to return this warrant on or before the ......... day of......... 19..., with an endorsement certifying the date on which and the manner in which it has been executed, or the reason why it has not been executed. Given under my hand and the seal of the Court, this......... day of......... 19... Judge After issuing notice/order of attachment before judgment in Form No.5 calling for security from defendant for fulfillment of the decree that may be passed against him, the Court has to necessarily wait till the time fixed thereon is completed. If the defendant furnishes security, the Court has to pass an order withdrawing order/notice issued in Form No.5 earlier. In case of failure on the part of the defendant to show cause to the satisfaction of the Court as to why he should not furnish security or fails to furnish security, the Court may then under Order XXXVIII Rule 6 of CPC issue order of attachment before judgment in Form No.7 of Appendix-F of CPC, which reads as under. No. 7 Attachment before Judgment, on Proof of Failure to Furnish Security (O. 38, R. 6) (Title) To The Bailiff of the Court. Whereas .......... the plaintiff in this suit, has applied to the Court to call upon ........ the defendant, to furnish security to fulfil any decree that may be passed against him in the suit, and whereas the Court has called upon the said ......... to furnish such security, which he has failed to do; these are to command you to attach .......... the property of the said .......... and keep the same under safe and secure custody until the further order of the Court, and you are further commanded to return this warrant on or before the ........ day of......... 19 ......... with an endorsement certifying the date on which and the manner in which it has been executed, or the reason why it has not been executed. Given under my hand and the seal of the Court, this ......... day of........ 19.... Judge Therefore, there cannot be any doubt that the exercise of power by the civil Court in the matter of attachment of property and direction to furnish security is in two stages. In the first stage, the defendant is asked to show cause. If after receiving the said show cause notice, within the time stipulated in Form No.5 proceedings, the defendant fails to appear before the Court or appears and fails to satisfy the Court, the Court can issue an order in Form No.7 directing attachment of property. The law contemplates appeal only at the second stage actually attaching the property and not at the stage of show cause notice. In public law, ordinarily, a petition for judicial review would not lie against show cause notice. This aspect of the matter directly fell for consideration before a Division Bench of this Court in Union of India v M/s.Andhra Technocrats Industries[6]. The full text of the Judgment is also placed before this Court. In the said case, Union of India filed a suit for recovery of money. They also filed an application under Order XXXVIII Rule 5 of CPC for attachment of Rs.3,00,000/- lying with Director General, Naval Project, Visakhapatnam, payable to first defendant therein. Notice was ordered. In the said notice, there was no condition attached. After the defendant appeared and resisted the application, learned Subordinate Judge, Visakhapatnam dismissed the application. Aggrieved by the order, Union of India preferred A.A.O.No.200 of 1980 which was resisted inter alia on the ground of maintainability of the appeal. The plea was upheld. In the reported Judgment, the Division Bench laid down as under. An order dismissing an application under Order 38 Rule (5) is not appelable. An order under Rule 5 merely directing the defendant to furnish security or to appear and show cause why security should not be furnished is not appealable. Only an order allowing an application under Rule 5 and an order withdrawing the attachment made under sub-rule (3) of Rule 5 on cause being shown by the defendant, are appelable. ….. In this case, there was no interim order of attachment passed under sub-rule (3) of Rule 5. Only an order was passed by the Court under sub- rule (1) of Rule 5 directing issue of notice to the defendant to show cause why he should not furnish security and on the defendant appearing and showing cause in answer to the notice to the Court, dismissed the application. There was no interim attachment passed under sub-rule (3) of Rule 5. Therefore, the order passed by the Court below does not fall within sub-rule (2) of Rule 6. Therefore, the order passed by the lower Court is not appelable. Similar view was taken in Vidhya Devi (supra) relied on by the respondent herein. The decisions relied on by learned counsel for the appellant do not deal with the question and have no bearing. In the result, for the above reasons, the appeal is not maintainable and is accordingly dismissed, giving liberty to the appellant to avail appropriate remedies under law. No costs. _________________ (V.V.S.RAO,J) ____________________ (B.N.RAO NALLA, J) .12.2009 pln Note: LR copy be marked. (By order) pln [1] AIR 1969 J&K 22 [2] 1991 (II) ALT 343 [3] 1996 (4) ALD 453 (DB) [4] AIR 2003 AP 13 [5] 2006 (3) ALT 308 (DB) [6] 1982 (2) ALT 19 (NRC)