Appointment of the petitioner on compassionate basis for the post of peon to be approved : Bombay High Court

 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docx IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINTERIM APPLICATIONNo. 3721 OF 2021INCOMMERCIAL SUMMARY SUITNo.3714 OF 2021Ramesh Kedarmal ModiThrough Power of Attorney HolderRohit Ramesh Modi...Applicant Org. PlaintifVs.Ahuja Properties andDevelopers and Ors....Respondents Org.Defendants Mr. Kunal Kumbhat for Applicant Org. PlaintifMr. Mikhail Behl a w. Ms. Saira Mirzankar a w. Mr.Madhukar Mulay for Respondents Org. Defendants. CORAM: DAMA SESHADRI NAIDU J. No.37221f I confne the discussion to whether theapplicant deserves an attachment before judgment.Arguments: Applicant: 8. In the above backgroundf the learned counsel forthe Applicant Plaintif has submitted that the entireLata Panjwanif P.S.3 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxtransaction stands admitted. To elaboratef he hassubmitted that each instance of money lending by theplaintif has been secured by the bills of exchangeexecuted by Defendant No.1 and accepted by DefendantNo.2. According to himf Defendant No.1 went on issuingthe cheques in batchesf but they were all dishonoured. Inthis contextf the learned counsel represents that since theentire amount has been lent through bills of exchangef onmany an occasionf the frst defendant issued chequesrandomly covering the interestf the principalf or both. Softhe cheques may not correspond to the amounts coveredby the bills of exchange. 9. Thenf the learned counsel has stressed theplaintiffs apprehension that the Defendants mayencumber their assets to frustrate the plaintif s eforts inhis suit. He points out that only after the suit transactiondid the defendants enter into a joint venture with a foreigncompany. According to himf for that purpose thedefendants incorporated a private limited company andtransferred all their assets to that company. He has alsosubmitted that despite the infusion of funds over 2f000crores from the foreign companyf the defendants have nothonoured their promise of repayment. 10. That apartf the plaintiffs counsel submits thatDefendant Nos.3 and 4 have created a private trust andtransferred all their shares in the company to that trust.Defendant No.3 is a trusteef and Defendant No.4 is both atrustee and benefciaryf too. Though the trust isf primaLata Panjwanif P.S.4 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxfacief an independent legal entityf the learned counselcontends that it is only a smokescreen the Defendantshave brought about to defeat the plaintif s claim.Accordinglyf the learned counsel has urged this Court todirect the Defendants to ofer security for the suit amountorf in the alternativef to attach their properties as prayedfor in the interim application. To support his contentionsfthe learned counsel relies on Rajendran & Ors. v. ShankarSundaram.1The Responadents: 11. On the other handf the learned counsel for theDefendants has opposed the applicant on two counts:falsity of claim unavailability of grounds under Rule 5 ofOrder 38f CPC. According to himf the applicant hasestablished no prima facie case. He points out that thepleadings in the plant and also in the interim applicationsufer from inherent contradictions. To justify hiscontentionf the learned counsel submits that the plaintifhas tried to make a mountain out of a molehill—that therespondents have dishonoured the cheques on numerousoccasions. In this contextf he submits that the chequeswere given “only for plaintiffs comfort”. In factf “thepayments were made separately and the applicantf thusfadmits in his pleadings of receiving both interest and theprincipal in part”. Sof the alleged dishonour of chequesdoes not advance the applicantfs cause.12. On his second contention—should therespondentsf property be attached —the learned counsel1 AIR 2008 SC 1170Lata Panjwanif P.S.5 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxasserts that the applicantfs apprehension is misplaced.The learned counsel points that the applicantfs ownpleadings reveal that the defendants have had theirsharesf worth croresf intact in the new venture. And thatventure has received an infusion of foreign funds over twothousand crores. That infusion does not amount to anyalienation. 13. In the alternativef the learned counsel hascontended that the Trustf an independent legal entityf is athird party to this suit it is not before this Court. Sof theproperty that belongs to the Trust—that isf the defendantsfshares in a company—are not available for the applicantto be attached. According to the learned counself the newcompany was incorporated in 2019. In the plaint or theinterim applicationf the applicant has not set out anydetails about how and when he came to know about thatcompany. That meansf the Court ought to presume thatthe applicant has known about the newly incorporatedcompany from its inception. 14. Thusf the company having been established inthe pastf the respondentsf shares in that company cannotbe attached “now” as the companyfs incorporation andthe applicantfs claim for recovery are notcontemporaneous. That isf according to the learnedcounself the respondentsf past action cannot afect theirpresent alleged liability. At any ratef the applicant scurrent efort to attach the properties is only on anapprehensionf an ill founded one at that. To support hisLata Panjwanif P.S.6 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxcontentionsf the learned counsel has relied on PremrajMundra v. Md. Maneck Gazi2 and Raman Tech. & ProcessEngg. Co. v. Solanki Traders.3 Discussion: Statutory Position: 15. Nowf let us examine the statutory andprecedential positions. Under Rule 5 of Order 38f CPCf atany stage of a suitf the Court may get satisfedf by theplaintiffs afdavit or otherwisef that the defendantintends to obstruct or delay the execution of any decreethat may be passed against him. This obstructing ordelaying may take many forms. The defendant isaboutto dispose of the whole or any part of his propertyf or2 SCC 302Lata Panjwanif P.S.7 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxattachment without complying with the above conditionsfthat attachment shall be void.16. As per Rule 6 of Order 38f if the defendant fails toshow cause why he should not furnish securityf or fails tofurnish the security requiredf within the time fxed by theCourtf the Court may order the attachment of the propertyspecifed or a portion of it sufcient to satisfy any futuredecree. On the contraryf if the defendant shows a cause orfurnishes the required securityf the Court will withdraw theattachment already made or pass such other order as itthinks ft.Preceadential Position: 17. In Rajendranf the respondent sued a partnershipfrm and its partners. It was for the recovery of moneyfbased on cheques and promissory notes. The trial Courtordered attachment before judgment the High Courtafrmed it. The appellants took the matter to the SupremeCourt. In this contextf Rajendran has noted that therespondent sought attachment before judgment to protecthis interest if the suit is decreed. “The court exercisesf insuch a situationf jurisdiction under Order XXXVIIIf Rule 5 ofthe Code of Civil Procedure. The Division Bench of the HighCourt merely directed the appellants herein to furnishsecurity within the time specifed thereunder. It wasdirected that only on their failure to do sof an order ofattachment of the 2nd item on the schedule to the petitionshall be issued”. Lata Panjwanif P.S.8 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docx18. After noting as abovef Rajendran has refused tointerfere with the High Courtfs decision. In that processf ithas further held: "Appellantsf in our opinionf are not seriouslyprejudiced thereby. The courtf while exercising itsjurisdiction under Order XXXVIIIf Rule 5 of the Code ofCivil Procedure is required to form a prima facieopinion at that stage. It need not go into thecorrectness or otherwise of all the contentions raisedby the parties. A cheque had been issued in thename of the frm. The appellants are partners thereof.A pronote had been executed by a partner of thefrm. Thus even under the Partnership Act prima faciethe plaintif could enforce his claim not only asagainst the frm but also as against its partners."(Italics supplied)19. In Raman Techf the plaintif applied underOrder 38 Rule 5 CPC for a direction to the defendantsto furnish security for the suit claim. He also prayedfor attachment before judgment if the defendantsfailed to provide security for the debt. The trial courtdismissed that application. On factsf it noted thatthough the defendants had given two post datedcheques to the plaintif towards payment of the billamountsf they were dishonoured. But the plaintif haddisclosed neither the particulars of the cheques northe dates of dishonour. So the trial Court ruled that theplaintiffs bald statement that the amount was duefrom the defendants could not make out a prima faciecase—when the defendants had denied the suit claim.The High Court reversed the trial Courtfs order. So thedefendants went to Supreme Court. Lata Panjwanif P.S.9 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docx20. In the above contextf Raman Tech.f has heldthat the object of supplemental proceedings—such asapplications for arrestf attachment before judgmentfgrant of temporary injunctionsf the appointment ofreceivers—is to prevent the ends of justice from beingdefeated. The object of Order 38 Rule 5 CPCf inparticularf is to prevent any defendant from defeatingthe realisation of the decree that may ultimately bepassed in the plaintiffs favour. This defeating may beeither by attempting to dispose of or remove from thejurisdiction of the court the defendantfs property.Thenf Raman Tech notices the phraseology of Rule 5.According to itf the scheme of Order 38 and the use ofthe words “to obstruct or delay the execution of anydecree that may be passed against him” in Rule 5clarify that before exercising power under the saidRulef the court should be satisfed there is areasonable chance of a decree being passed in the suitagainst the defendant. This would mean that the courtshould be satisfed that the plaintif has a prima faciecase. Suppose the averments in the plaint and thedocuments produced in support of it do not satisfy thecourt about a prima facie case. In that casef the courtwill not go to the next stage of examining whether theplaintif s interest should be protected by exercisingpower under Order 38 Rule 5 CPC.21. Besidesf merely having a just or valid claim ora prima facie casef according to Raman Techf will notLata Panjwanif P.S.10 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxentitle the plaintif to an order of attachment beforejudgment. He ought to establish that the defendant isattempting to remove or dispose of his assets todefeat the decree that may be passed. Equally well settled is the position that even where the defendantis removing or disposing of his assetsf an attachmentbefore judgment will not be issued if the plaintifcannot satisfy that he has a prima facie case.22. Of coursef Raman Techf thenf reiterates theoft asserted judicial caution that the power underOrder 38 Rule 5 CPC is drastic and extraordinary. Suchpower should not be exercised mechanically or merelyfor the asking. It should be used sparingly and strictlyunder the Rule. The purpose of Order 38 Rule 5 is notto convert unsecured debt into a secured debt. Anyattempt by a plaintif to utilise Order 38 Rule 5 asleverage for coercing the defendant to settle the suitclaim should be discouraged. 23. Thenf on factsf Raman Tech rules that adefendant is not debarred from dealing with hisproperty merely because a suit is fled or about to befled against him. Nor can his shifting the business ormachinery from one building to another by itself be aground for granting attachment before judgment. Aplaintif should showf prima facief that his claim isbona fde and valid he should also satisfy the courtthat the defendant is about to remove or dispose ofthe whole or part of his propertyf to obstruct or delayLata Panjwanif P.S.11 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxthe execution of any decree that may be passedagainst him. Only does that enable a court to exerciseits powers under Order 38 Rule 5 CPC. 24. Finallyf Raman Tech wants the courts to keepin view the principles relating to grant of attachmentbefore judgment summarised in Premraj Mundra v. Md.Maneck Gazif AIR 1951 CAL 156. 25. Let usf nowf examine Premraj Mundra. Therefthe plaintif sued for recovery of the price of goodssold and delivered to the defendant. The defendantf abusinessman in a small village on the border of Indiaand Pakistanf closed his business in India and startedone in Pakistan. He approached a prospectivepurchaser for the sale of his entire property in India.The plaintiff in that backdropf alleged that thedefendant is trying to dispose of his properties toobstruct and delaying the execution of any decree thatmay be passed against him. So he prayed forattachment before judgment. Indeedf Calcutta HighCourt did grant the attachment. 26. In granting an attachment before judgmentfPremraj Mundra surveyed the precedential positionand summarised the guiding principles for invokingRules 5 and 6 of Order 38f CPC. Those principles aretheseThat an order under O. 38f Rr. 5 and 6f canonly be issued if circumstances exist as stated in thoseRules. Lata Panjwanif P.S.12 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docx(b) Whether such circumstances exist is aquestion of factf and that must be proved to theCourtfs satisfaction.The Court would not be justifed in issuing anorder for attachment before judgment or for securityfmerely because it thinks that no harm would be donethereby or that the defendants would not beprejudiced.The afdavits supporting the applicantfscontentions must not be vague and must be properlyverifed. If it is afrmed true to the knowledge orinformation or belieff it must be stated as to whichportion is true to knowledgef the source of informationshould be disclosedf and the grounds for belief shouldbe stated.(e) A mere allegation that the defendant wasselling of his properties and whatever remains isinsufcient will not sufce. Particulars must be stated.There is no rule that transactions before suitcannot be consideredf but the object of attachmentbefore a judgment must be to prevent future transferor alienation.Where only a small portion of the propertybelonging to the defendant is being disposed off noinference can be drawn in the absence of othercircumstances that the alienation is necessarily todefraud or delay the plaintif s claim. Lata Panjwanif P.S.13 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docx(h) The mere fact of transfer is not enough nobody can be prevented from dealing with hisproperties simply because a suit has been fled. Theremust be additional circumstances to show that thetransfer delays or defeats the plaintiffs claim. It isopen to the Court to look to the conduct of the partiesimmediately before the suit. The Court may alsoexamine the surrounding circumstances to inferwhether the defendant is about to dispose of theproperty. If sof with what intention. The Court mayconsider the nature of the claim and the defence putforward.The fact that the defendant is in insolventcircumstances or acute fnancial embarrassment is arelevant circumstancef but not by itself sufcient.27. Firstf according to Raman Techf an applicationfor attachment before a judgment must fulfl twinconditions:the plaintif s prima facie case thedefendantfs attempt to remove or dispose of hisproperty to defeat the decree that may be passed.Neither condition on its own does not sufce.28. Secondf among the Premraj Mundrafs guidingprinciplesf we may focus on these: The Court has tosatisfy itself that the plaintif has successfullydemonstrated the circumstances as required underRules 5 and 6 of Order 38. That saidf it is a question offact. The court can consider the defendant s pastconductf but the object of attachment before aLata Panjwanif P.S.14 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxjudgment must be to prevent future transfer oralienation. Truef a mere allegation that the defendantis going to sell of and his properties are insufcient.Thenf that transfer must be to delay or defeat theplaintif s claim. Under those circumstancesf it is opento the Court to look to the partiesf conductimmediately before the suit. Law appliead to Facts: 29. Heref the borrowing is admitted. And theborrowing is for fnancing the construction projects carriedon by the two partnership frmsf respondents1 and 2. Theother respondents are the partners of these two frmsfbeing members of the same family. Thusf the prima faciecase stands established. Even otherwisef the borrowing isbased on a few negotiable instruments. And they carrystatutory presumption under both sections 118 and 138 ofThe Negotiable Instruments Act. When thisf I may holdthat the frst condition for the attachment beforejudgement gets fulflled. But I must add a note ofclarifcation. The Afdavit in Reply fled by the thirddefendant respondent does deny most plaint averments.Neverthelessf there is no express denial of therespondentsf executing the bills of exchange or thecheques. In factf the respondents have argued that thecheques were given for the applicantfs comfort and thatthe amounts are being repaid periodically.30. Indeedf the applicant is that the respondentshave been heavily indebted in the market. Thenf about theLata Panjwanif P.S.15 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxrespondentsf business activitiesf he pleads that theyestablished a new private limited company: Ahuja Hive. Itis the applicantfs case that the 1st respondent frmborrowed the money for its ongoing projects and executedbills of exchange the 2nd respondent frm accepted thosebills of exchange. Nowf in this interim applicationf theapplicant asserts that both the partnership frmstransferred all their ongoing projects to this newlyestablished company. This avermentf toof standsadmitted. The respondentsf only defence is that the newcompany is an independent entity it is not a party to thesuit. Sof its assets cannot be touched.31. The borrowings began in 2015 they continueduntil 2018. Incorporating a new company and transferringassets belonging to the partnership frms happened in2019. That demonstratesf prima facief the applicant hasbeen prejudiced because the assets which inspired him tolendf though the very lonely is unsecuredf now have beentransferred to another entity. The respondentsf actionlends credence to the applicantfs apprehension.32. The respondents admit that they had an infusionof foreign funds of over 2000 crores into their newlyincorporated company. But they have repeatedly failed tohonour the cheques they gave. That again shows therespondents mala fde contact—prima facief though.33. And the appellant has submitted thatrespondents 3 and 4 have created a private trust andtransferred all their shares in the company to that trust.Lata Panjwanif P.S.16 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxThe third respondent is a trusteef and the fourthrespondent is both a trustee and benefciary. In responsefthe respondents have contended that the Trustf anindependent legal entityf is a third party to this suit it isnot before this Court. That isf the Trust assets areunavailable for the applicant to be attached. That saidfthere is no pleading in the interim application about theTrust. When the applicantfs counsel argued on this pointfthe respondentsf counsel countered that argument only onthe premise that the Trust is an independent legal entity. 34. At any ratef the applicant has pleaded thatrespondents 3 and 4 have resigned from severalcompanies of Ahuja Group. According to himf “even thearrangement of Defendant Nos. 3 and 4 with their Chinesecounterpart is such that the shares allotted to DefendantNos. 3 and 4 in the company Ahuja Hives Pvt.f Ltd.f arecompulsorily convertible shares so that the same cannotbe liquidated in favour of any of the plaint of thedefendants”.Conclusion: 35. To conclude—I repeatf prima facie—I reckonthat the debt is admitted or statutorily presumed to beadmitted. The respondentsf actionsf most of which arenot deniedf lend credence to the applicantfsapprehension. Ratherf the applicantfs is well foundedrather than a mere apprehension. Given theapplicantfs allegationsf most of which are matters ofrecordf the applicant requires no prop of any third Lata Panjwanif P.S.17 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxparty afdavit or testimony about the respondentsfconduct. The pleadings and the documents producedsufce.Result: 36. After going through the pleadings and afterperusing the documents the applicant has fledf theCourt is satisfed that the respondents intend toobstruct or delay the execution of any decree that maybe passed against them. They havef prima facieftransferred and are transferring most of their assetsinto the fold of other legal entities to make themunavailable for the applicant to realise the debt basedon a decree that may be passed in his favour. Orader: The Notice of Motion is allowed to the extentmentioned below:20f00f000 compulsory convertiblepreference shares of the 2nd respondent or itspartners in Ahuja Hive Pvt.f Ltd.(b2) Two unsold Type 3 3BHK fats in theRespondentsf project LfAmorf at Relief RoadfLata Panjwanif P.S.18 19 on 02 08 2021 on 07 08 29.07.2021 IAL 37221 Final.docxOpp. H. K. Institute of Management Studies andResearchf Oshiwaraf JogeshwariLata Panjwanif P.S.19 19 

Summary: Rightfully deserved positions can often not reach the deserving person due to administrative chaos or legislative loopholes, however that right will be upheld by the justice system. This was held in the judgment passed by a two bench judge comprising HON’BLE MR. JUSTICE R. D. DHANUKA AND JUSTICE R.I.CHAGLA, in the matter of Sunil Gundu Desai  V. The State of Maharashtra &amp; Ors, dealt with an issue where the petitioner filed impugned the order that refused grant approval on his request to be appointed on the post of peon on compassionate basis. The petitioner seeked a writ of certiorari for quashing and setting aside the impugned order dated 31st March 2018 passed by the respondent refusing to grant approval to the appointment of the petitioner on the post of a peon in the Sahyadri Vidyalaya School. The father of the petitioner who was working in the said school died on 30th July 2014. The petitioner had approached the respondents on 26th August 2014 requesting that he should be appointed on the post of peon on compassionate basis. No decision had been taken for approval. The management and the said school again submitted the proposal for approval to the appointment of the petitioner. The respondent returned the said proposal for approval of the petitioner’s appointment by placing reliance on the Government Resolution dated 12th February 2015. Counsel for the petitioner invited attention to the impugned order and submitted that the sole basis for not approving the appointment of the petitioner on the post of peon in the said school is on the basis of Government Resolution dated 12th February 2015 by which such appointments were banned. He submits that the said Government Resolution dated 12th February 2015 applies with prospective effect. In support of this submission, he placed reliance on judgment of Suraj Uttam Kamble Vs. State of Maharashtra &amp; Ors. It has thus been held that the prior decision dated 11th December, 2018 squarely applies to the facts of the case granting approval to the appointment of the petitioner on the post of a Shikshan Sevak since the date of his appointment with all consequential benefits. Such appointments were kept outside the purview of the general ban imposed on recruitment. He accordingly submitted that the said decision applies to the facts of this case.