The High Court · 2025

Mr, Vedula Srinivas, learned Senior Counsel representing Ms. Vedula Chitratekha, learned counsel appearing for the appellant. Mr. G B S S Papa Rao, learned counsel appearing for the respondent. JUDGMENT: (l)er t{on'ble Justice Moushumi Bhattacharya)

1. The Civil Miscellaneous Appeal (CMA) arises out of an order passed by the learned I Additional Chief Judge, City Civil Court, Secunderabad on 1 1.08.2025 in I.A.No.3 12 of 2025 io O.S.No.2S of 2025 filed by the respondent/ plaintiff to pass an order o[ attachment before the judgment against thc appellant/defendant by directing the appellant/defendant to 2 - furnish securit5r to the satisfaction of the Suit claim amount of Rs.67,01,433/-.

2. The appellant is a defendant in a Suit filed by the plaintiff/ respondent to pass a decree in favour of the plaintiff directing the appellant/ defendant to pay an amount of Rs.67,O 1,433/ - to the plaintiff and for award of future interest at l2yo p.a. on the said amount till realization of the claim.

3. The respondent/ plaintiff filed an Application/lA No.312 of 2025 in the said Suit under Order XXXVIII Rule 5 of The Code of Civil Procedure, 1908 and for a dircction on the appellant to furnish security to the Suit claim.

4. By the impugned order, the Trial Court gave one last opportunity to the appellant to furnish security of Rs.67,O 1,433/ - within 30 days from the date of the order, failing which the plaintiff/ respondent would be at liberly to file a warrant for attachment before judgment of the properties of the appellant/defendant as mentioned in the impugned order.

5. Learned Senior Counsel appearing for the appellant submits that the impugned order should be set aside as the Trial Court failed to consider the principles relevant to an order for attachment before judgment and for furnishing security for 3 production of property as underlined under Order XXXVIII Rule 5 of the CPC. Senior Counsel submits that the impugned order does not disclose any reason for directing the appellant to furnish security and also does not satisly the tests of directing the appellant to furnish security as laid down by the Supreme Court.

6. Senior Counsel submits that an order to furnish security cannot bc passed in a vacuum and without the plaintiff showing satisfactory cause as to why such a drastic order shoulC be passed during pendency of the Suit.

7. Learned counsel appearing for the respondent/ plaintiff submits that the Suit claim is bona frde and that there was an immediate need for an order of security since the appellant denied the claim altogether. Counsel seeks to sustain the impugned order on the Trial Court disclosing sufhcient reasons for furn ishing ol security. 8, We have heard learned Senior Counsel and learned counsel appearing for the parties and considered the material on record. 9 . The respondent/ plaintiff filed the Suit for a decree of Rs.67,01,433/- and for award of future interest on the decretal 4 sum. The plaintiff filed an IA under Order XXXVIII Rule 5 read rvith section 15 i of the CPC for a direction on the appellant/ defendant to furnish security to the satisfaction of the Suit claim. On i3.02.2025, thc Trial Court direcred the appellant to furnish security for the Suit amount within 48 hours after receipt of notice or appear and to show cause as to why the appellant/ defendant should not furnish the security. The matter was made returnable on 27.O2.2O25. The impugned order was passed on 11.O8.2025 on a contested hearing and upon considering the grounds put forth by the appellant for resisting an order lor security. The impugned order records that the appellant executed a Promissory Note on 26.05.2023 and obtained Rs.55 lakhs from the plaintiff.

10. The Promissory Note was marked as Ex.Pl. The plaintiffs Legal Notice to the defendant dated 23.O1.2025 was marked as Ex.P2. The Trial Court also noted that thc appellant had been directed to furnish security on 73.02.2025 but had failed to do so after which final argumcnts were concluded in the said I.A. on 71.07.2025. It was further noted that the appellant had failed to challenge the docket order of the Trial Court dated

13.02.2025 by way of an Appeal or Revision. The impugned order further records that the plaintiff/ respondent has to prove 5 that the petition schedule property i.e., Flat No.301, Apurupa Apartments rvith MCH No.2-2-3lA/2 at D.D. Colony, Hyderabad, belongs to the appellant, as per the documents ftled b1' thc plaintiff under Ex.PS, the said property stands in the name of the appellant. Further, Ex.P6, being a Certified Copy of the Sale Deed filed by the plaintiff which reflects that S-v.Nos.281/A and 281/AA amounting to Acs.6.13 guntas also stands in the name of the appellant. 1 L The plaintiff also filed Ex. P7 which is a Sale Deed document No.7578/2006 which reflects that Acs. 11.38 guntas in Sr,.Nos.32O lAA, 321 /AA, 32O/A and 321/A also stands in the name of the appellant. The Trial Court accordingly found that the appellant owned the aforesaid properties despite which had lailed to furnish security and accordingly gave one last opportunity to the appellant to furnish securit5r amounting to Rs.67,0 1,433/- within 3O days from the date of the impugned order, lailing which the plaintiff would be at liberty to file a u'arrant for attachment before judgment of the above said properties.

12. The affidavit in the said I.A. states that on 10.05.2023, the appellant/ defendant requested the plaintiff to lend an amount of Rs.55,O0,00O/- on account of the appellant,s t 6 business exigencies. The plaintiff lends an amount of Rs.55,00,000/- from her personal savings, agricultural income and from her son. The amount was lent to the appellant on

26.O5.2023 and on evidencing the said transaction the appellant executed a Promissory Note on 26.05.2023. The appellant also promised to repay this amount by 15.12.2023. The appellant remitted an amount of Rs. 1,8O,0OO/- each on two occasions by way of online transactions on 07 .07.2023 and

22.12.2023. However, the appellant failed to repay the balance amount of Rs.51,40,000/- takcn from the plaintilL The plaintifl was hence constrained to issue a Legal Notice on 23.01 .2025 calling upon the appellant to repay the balance amount together with interest at l8o/o from 26.05.2023 to till date. The appellant issued a Reply on 08.O2.2O25 with false and baseless allegations against thc plaintiff and denying receipt of the amounts including the Promissory Note evidencing receipt of Rs.55,00,00O/-. The Affidavit mentions the Flat and other immovable properties owned by the appellant including agricultural land at Chityal Mandai, Nalgonda District.

13. On the other hand, the counter affidavit filed by the appellant/defendant to the IA states that the appellant has not met the plaintiff and that the plaintiff is a strangcr to the 1 appellant and the appellant have liled a criminal case against G. Jambul Reddlr (a close relative of the appeliant). The appellant further states that G. Jambul Reddy in collusion with the plaintiff has fabricated the blank signed Promissory Note and has filed the present Suit as a counter-blast to the complaint lilecl by the appellant.

14. From t hc pleadings, it is clear that the appellant has completcly der-ried the Suit claim to the extent of denying the plaintiff's existcnce altogether. The legality of the plaintiff"s claim in the Suit is a matter of trial. The purpose of a petition for attachrnent before judgment and for furnishing security is to protect the plaintilfs claim pending disposal of the Suit.

15. Ordcr XXXVIII of the CPC provides for Arrest and Attachment belore Judgment' precisely for a case such as the present one, $,here the defendant denies the Suit claim and the Court is satisfied, by Afhdavit or otherwise, that the defendant is about to dispose of or remove the whole or a part of his/her property from the jurisdictional limits of the Court. Order XXXVIII Ruic 5 of the CPC specifically provides for Attachment before Judgment' u,here a defendant may be called upon to furnish se curity for production of propert5r. Under Rule 5(l) where, at any stage of the Suit upon the Court being satisfied, t 8 by affidavit or otherwise, that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him is about disposing of the whole or any party of his/her property or removing the whole or any part of his/her property from the local limits of the jurisdiction of the Court, as specihed under Rule 5(1) (a) & (b) of the CPC.

16. The language of Order XXXVIII Rule 5 of the CPC underscores several aspects which are: i. The plaintiff may file an application for an athchment before judgment at any stage of the Suit. ii. The Court can be satisfied through a plaintifls Aflldavit or other evidence on record, potentially including re ferences from oral submissions (the provision says 'by affidavit or otherwise'). iii. The plaintiff needs to show primalacie evidence of the defendant's intent to obstruct or delay the execution of any decree which may be passed against him/ her by disposal or removal of the whole or part of his/her property. iv. The Court must be satisfied of the case made out by the plaintiff for an order of attachment before judgment. 9 v. The order of attachment/ furnishing of security is made before passing of a decree and to facilitate its execution. vi" Upon being satisfied of the case made out by the ptaintiff, the Court may direct the defendant either to furnish security in such sum and produce the property or the value of the same as may be sufficient to satisfy the decree within a specified time frame . vii. Thc defenclant may also appear and show cause as to why the defendant should not furnish security.

17. In the prescnt case, the Trial Court ordered the appellant to furnish security on the primary consideration that the appellant had clerried receiving any money from the plaintiff or executing the Promissory Note dated 26.05.2023. The Trial Court further noted that the appellant had failed to comply with the order dated 13.02.2025 directing the appellant to furnish security even though tl"re said order remained un-chalienged by the appellant. lt u,as lurther relevant that the appellant had sufficient properties in his name including a Flat and agricultural land. Thc trial Court hence found it a fit case to give one last opportunity to the appellant to furnish security to the tune of Rs.67,O i,433l -. J 10 -

18. We are unabie to accept the submissions made on behalf ol the appellant/ defendant that the Trial Court lailed to adhere to thc requirements of Order XXXVIII of the CPC. The total and outright denial on the part of the appellant of the Suit claim and execution of the Promissory Note evidencing receipt of Rs.55,00,OOO/- from the plaintiff in May 2023 would translate to a sufficient risk of the Suit claim being entirely frustrated. The statement of accounts annexed to the counter filed by the plaintiff show continuous and frequent withdrawals of amounts from the appellant's bank account from 2OL7 onwards.

19. The requirement of Order XXXUII Rule 5 (1) (a) & (b) of the CPC with regard to disposal/ removal of property by the defendant also encompasses the act of depleting a defendant's bank account to the extent that no assets remain to satisfy a luture decree in the Suit. In most cases, it is virtually impossible to gather direct evidence of a defendant's intent to flee the jurisdiction of a Court or dispose o[ or remove his/her property in a manner which would frustrate the Suit claim. Even if the plaintiff is abie to collect such evidence by way of sale transactions in favour of third party or otherwise, it may be too late by the time the Court takes note of such evidence. In such cases, the defendant would already have fled the I 11 jurisdictional limits of the Court or disposed of the property to an irrecoverable decree.

20. Order XXXVIII Rule 5 o[ the CPC hence seeks to guard against such exigencies bl calling upon the defendant to secure the Suit claim so as to protect the piaintiffs interest in the event a decree is passed in favour ol the plaintiff. Courts are frequently' facecl with situations where the execution of a decree becomes virtually impossible in the face of defendants pleading bankruptcy or insufficient assets to satisfy the Suit claim. The fact that the plaintilf must have a pima facie case which is reflected from the plaint ancl the documents produced in support thereof is a necessary prerequisite to invoke Order XXXVIII Rule Il of the CPC. Naturally, the Court cannot order furnishing of securit-r, unlcss the Court is satisfied that the plaintiff has a valid basis for such interim protection. 2OA. The requirement under Order XXXUII Rule 5 is that the Court must be satisfied " ...by affdauit or othenaise" thus diluting the nced to produce cvidence in a written form. The provision protects a distraught plaintiff by enabling them to obtain the relicf of furnishing securiry in the nick of time, before the assets are rvasted or parted u.ith. 72

21. It is equally well settled that the extraordinary power of the Court under Order XXXVIII Rulc 5 of the CPC should not be exercised mechanically and should be used sparingly and strictly in accordance with the Rule: Raman Tech. & Process Engg. Co. & Anr. u. Solanki Tradersi. [n that decision, the Supreme Court discouraged Order XXXUII Rule 5 of the CPC being used by a plaintiff to coerce a defendant to settle the Suit claim but restricted such instances often involve 'bloated and doubtful claims'. The warning sounded by the Supreme Court in unusual cases involving unscrupulous plaintiffs without a pime facie case would not apply to the present facts. In the case at hand, the defendant has, in fact, shown himself to be without bona fi.des having denied the plaintiff's contention altogether.

22. It is important to bear in mind that an order lor security is not an order for payment of the amount to the plaintiff but an authority given to the Court to preserve the Suit claim in the event the Suit succeeds. The amount is kept as security so that the decree may be executed in favour of the plaintiff and does not become a mere paper decree. Hence, we fail to comprehend as to why the defendant has assailed the impugned order where 1(2008) 2 Supreme Court Cases 302 --- 13 the defendant holds sufficient properties in his name and was also not aggrieved by the initial order passed by the Trial Court on 13.O2.2025 which was to Lhe same effect.

23. We accordingly do not find any reason to interfere with the impugned order dated 11.08.2025 or set aside the same.

24. CMA No.369 of 2025, along with all connected applications, is accordingly dismissed. Interim orders, if any, shall stand vacated. There shall be no order as to costs. SD/. K. SRINIVASA RAO JOINT REGISTRAR 6 SECTION OFFICER //TRUE COPY// To,

1. The lAdditional Chief Judge, City Civil Court, Secunderabad. 2. One CC to Sri Vedula Chitralekha, Advocate [OPUC] 3. One CC to SRI G B S S PAPA RAO Advocate [OPUC] 4. Two CD Copies 1 l SvsiPSL w HIGH COURT DATED:3011212025 ORDER CMA.No.369 of 2025 totl 't H E s 6 I i.i t- 2I JAII 2m { * DlSMISSING THE CMA @ 11 \r \ar