IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CMPMO No. 446 of 2010 Date of decision: 18.5.2011 Manish Kumar ….Petitioner. Versus Sanjay Sharma ….Respondent. Coram The Hon’ble Mr.Justice Deepak Gupta, J. Whether approved for reporting?1 No. For the petitioner: Mr. J.S.Bhogal Sr. Advocate with Mr. T.S.Bhogal, Advocate. For the respondent: None. Deepak Gupta, J. (Oral) 1. By means of this petition, the petitioner has challenged the order dated 22.11.2010 whereby the application filed by the petitioner under Order 38 Rule 5 CPC has been dismissed. 2. Briefly stated the facts of the case are that the petitioner filed a suit for recovery of Rs.6,75,810/- against the defendant. According to the plaintiff, the defendant had hired his pick- up truck on monthly charges of Rs.36,000/- and therefore, an amount of Rs.6,65,000/- was payable for which cheque had been issued by the defendant on 22.09.2010 but the said cheque 1 Whether the reporters of local papers may be allowed to see the Judgment? Yes. 2 was dishonoured on account of insufficient funds. Thereafter, the plaintiff filed the suit claiming the principal amount alongwith interest. 3. Alongwith the suit the plaintiff filed an application under Order 38 Rule 5 CPC for attachment before judgement praying that the defendant may either be directed to furnish security for satisfaction of any decree which may be passed against him and further that till such security is furnished the CPWD Division at Shimla, who holds the funds which were to be paid to the defendant, should be restrained from releasing the same to him. This application was contested and according to the defendant he had not issued any cheque. The learned trial Court came to the conclusion that no case had been made out for taking action under Order 38 Rule 5 and has also came to the conclusion that there is nothing on record to show that the defendant will obstruct or delay the execution in case the suit is decreed. The application was accordingly rejected. Hence, the present petition. 4. It would be pertinent to mention that in this petition Shri Neeraj Gupta, Advocate, had put in appearance on behalf of the defendant and 3 the defendant himself had appeared on one or two occasions and had admitted before the Court that there is possibility of settlement outside the Court and therefore, the matter was adjourned time and again. However, Shri Neeraj Gupta, Advocate, on the last date stated that he had sent repeated communications to his client but he is not responding and therefore, was permitted to withdraw from the case. 5. The provisions of Order 38 Rule 5 of the Code of Civil Procedure read as follows:- “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 4 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 any order of attachment is made without complying with the provisions of sub-rule(1) of this rule, such attachment shall be void.” 6. A bare perusal of this provision shows that where the Court is satisfied that the defendant may obstruct or delay the execution of the decree that may be passed against him or is about to dispose of the whole or any part of his property or is likely to remove the whole or any part of his property from the local limits of the jurisdiction of the Court then the Court can issue orders directing the defendant to furnish security. The purpose of the Section is that even before the Court has adjudicated on the merits of the case if it is prima facie satisfied that the plaintiff has a good case and the defendant may obstruct or 5 delay the execution of the decree to be passed against him then the Court can direct the defendant to furnish security as directed. 7. The learned trial Court in its order has relied upon the judgements which are 2002(1) Civil Court Cases 210 Punjab and Haryana High Court, 2008(1) Civil Court Cases (1) (S.C.) and M/s New Shree Durga Bhandar Vs. M/s Trilok Nath 1990 CCC 187. The trial Court held that no order of attachment could be issued since the plaintiff has not disclosed as to from where he has obtained knowledge about the fact that the defendant is about to dispose of his property. This seems to be sole reason which weighed with the learned trial Court. 8. It stands admitted that the defendant is a contractor with CPWD and has been doing contractual work for the said institution. The defendant has made an averment that he and his family has property at Shimla and he has no intention of selling of the same or leaving the jurisdiction of the Court. It has also been stated that the cheque had not been issued for any consideration. It is thus virtually admitted that cheque had been issued but not for valid 6 consideration. We are dealing with a case where a party issued a cheque which was dishonoured for insufficiency of funds. This is an offence within the meaning of Section 138 of the Negotiable Instruments Act. No doubt, the issue whether the cheque was issued for a valid consideration is an issue which has to be decided after leading evidence but prima facie the issuance of such a cheque would make out a prima facie case in favour of the plaintiff. There is presumption under law in this regard and the burden shifts upon the defendant to prove that the cheque was not issued for valid consideration. In such circumstances the rights of the plaintiff also need to be protected. In case the defendant is not directed to furnish security he could dispose of his property and virtually nullify the decree, if any, passed in favour of the plaintiff. This Court is also taking into consideration the conduct of the defendant. In this Court itself when he first appeared he submitted that there are chances of a settlement outside the Court but has now vanished and has not even instructed his counsel. No reliance can be placed on such a person. Therefore, I am of 7 the view that the plaintiff has made out a good case for grant of interim relief under Order 38 Rule 5 of the CPC. 9. In view of the above discussion, the defendant is directed to furnish adequate security to the satisfaction of the learned trial Court in the sum of Rs.6,75,810/- on or before 31st July, 2011. The security can be in the form of bank guarantee, property etc. and the surety will be accepted/rejected by the learned trial Court after considering the objection, if any, raised by the plaintiff. In case, the defendant fails to furnish security as ordered by this Court or fails to furnish list of his property which may be attached before judgement then the defence of the defendant shall be struck off. 10. The petition is allowed in the aforesaid terms. No order as to costs. Till the defendant furnishes security in the aforesaid terms the interim order dated 15.12.2010 shall continue. Record of the trial Court be sent back. 18th May, 2011 (Deepak Gupta) ™ Judge