JUDGMENT
1. Heard both the Counsel.
2. The petitioner-plaintiff has filed this revision aggrieved by the orders of the III Additional Judge, City Civil Court, Sccunderabad in I.A.No.1031/97 in O.S.No.311/1997, dated 3-11-1997.
3. The learned Counsel for the petitioner submits that a suit O.S.No.311/97 has been filed for recovery of Rs.7,78,643/- along with a petition under Order 38, Rule 5 C.P.C.
praying to order attachment before judgment the plot bearing No.585 admeasuring 346 sq.yards situated at Salebnagar, Kurdu Village, L.B. Nagar Municipality, Hayatnagar Revenue Mandal, Ranga Reddy District covered by Sy.No.52 to 56 and also to order an attachment before judgment of movables and immovables as pointed out by the petitioner at the time of attachment such as plant and machinery, tables, chairs, almirahs along with the building etc.
4. It is stated by the learned Counsel for the petitioner that the petitioner is a Company incorporated under the Companies Act and carrying on business and it is having its registered office at Secunderabad. The first respondent represented by its Managing Partner and other partners approached the plaintiff Company for the bill discounting facility stating that their firm is engaged in the manufacture of Engineering plastics, Rigid Polyurethene Foam, Isocynarate foam etc., and stated that for carrying on the business they will be requiring to purchase from time to time various items of which the materials from different Company and from different suppliers. It is stated that in respect of the spares and raw materials purchased from the suppliers draw bills of exchange or Hundies whose period is of 90 days on documents against acceptance basis and for these purposes they have requested the petitioner to discount the said bills/Hundies drawn by their suppliers upto a limit not exceeding Rs.8,49,000/- per month and agreed to repay promptly within the period of issuance of each and every one of the bills the amount so paid by the petitioner/ plaintiff if paid within a period of issuance and if not paid within the said period, they undertook to pay interest at 36% per annum excluding other costs, damages expenses etc., which may be incurred by the petitioner Company, the respondents also undertook to indemnify the petitioner for any loss, damage costs, charges or expenses which may be caused or occasioned to the petitioner/plaintiff on account of acceeding to their request and paid the suppliers, bills on account of any claims disputes relevant to them. Apart from that the respondents also gave their acceptance
to other terms and conditions which is evident from the undertaking dated 26-9-1995.
5. The learned Counsel for the petitioner further submits that basing on the request of the respondents, the petitioner accepted for bill discounting and has extended the bill discounting facility to the respondents. The respondents have forwarded the bill amounting to Rs.8,49,000/- of M.s N.M. Urethene Catalysis Private Limited, and the drawee of the said bill dated 18-12-1995 is the first respondent. The respondents gave personal guarantee of their plant and machinery and also factory premises to the bill discounting facility extended to them. The fifth respondent stood as guarantor for bill discounting facility extended to them vide his undertaking letter dated 18-12-1995. It is also signed by the partners of the first respondent. The fifth respondent gave his plot described in the petition. The respondents have not cleared their dues to the petitioner Company, as per the statement of account, calculated upto 31-7-1997 and the total outstanding is Rs.7,78,643-00. A cheque bearing No.266025, dated 10-6-1996 drawn a Punjab National Bank, Hyderabad was issued to the petitioner by the respondents and was bounced. It was returned with endorsement “exceeds arrangement” vide their bankers Memo dated 13-6-1996. Inspite of reminders and notices the respondents have not cleared the same.
6. The petitioner Company on reliable information came to know that the respondents in order to evade the payment to its creditors, are alienating their movable and immovable property to defeat the claim of the petitioner. Therefore, unless they are prevented from alienating the movable and immovable property, especially the property mentioned in the petition by an order of attachment before judgment, the petitioner may not realise the fruits of the decree that may be passed. The respondents also segregating the assets and movables and they are in the process of creating third party interest by alienating the movables and immovables. The petitioner is a finance Company and answerable to its depositors.
Any delay in realising the amounts or failure to realise their amounts, the Company would Suffer severe loss which cannot be compensated. Hence, petitioner seeks to pass orders of attachment of property before judgment.
7. Respondent Nos.1 to 3 remained exparte. Petition against Respondent No.4 was dismissed as no batta was paid and the petition is being contested only by the fifth respondent -guarantor. The fifth respondent, in his counter affidavit, contends that the first respondent along with his partners approached the petitioner is partly true and their involvement in manufacture of the products mentioned therein and also the mode of transaction carried on by them in regard to the payments in part but not the transaction which is mentioned in the petition amounting to Rs.8,49,000/-. The true facts are that the petitioner by virtue of proceedings TCIF/Bills/AFT, dated 13-9-1995 has sanctioned for a discount of the bills of 1st respondent Company against N. Murethane Catalysts Private Limited to the total amount of Rs.7,82,838/- thereby a cheque bearing No.849529 drawn on State Bank of Mysore favouring N. Murethane Catalysts Private Limited was issued. To this particular transaction the other respondents herein have approached one L. Jayaram, Tax Consultant and who in turn approached the fifth respondent with a request that the transaction is only for a period of 60 days for which he requested to stand as guarantor. He also requested to deposit original sale deed etc. which were required to be furnished with the petitioner. Accordingly, having confidence in Mr. Jairam who has introduced these respondents the fifth respondent has accepted the transaction without any personal gain because the said Jayaram also stood as the personal guaranter for the said transaction. In pursuance of finalising the formality, the petitioner herein after deducting Rs.38,606/- has issued a cheque for Rs.7,44,232/- to the knowledge of the fifth respondent and the said transaction is over. In such circumstances, his original sale deed etc. were handed over to him by L. Jayaram some time in the month of December 1995. As such, he will be confined with his involvement only
to the first transaction, but surprisingly he was made a party in this suit and also the bailiff has served the summons on 30-8-1997. He submits that the fifth respondent is not aware of any sanctions or other suit transactions by signing anywhere and also did not handover his original sale deeds to other respondents or to the petitioner. The fifth respondent is also disputing the signature alleged to have been affixed on Ex.A1.
8. The trial Court, though granted attachment before Judgment, after notice and hearing of both the parties and on consideration of evidence has dismissed the petition and raised the order of attachment.
9. The point for consideration in this case is whether the petitioner has made out a case for attachment before judgment within the meaning of Order 38 Rule 5 of C.P.C.?
10. The submission of the learned Counsel for the petitioner is that Ex.A-1 is the agreement for continuing guarantee i.e. bill discounting facility to be extended to the first respondent-firm, Ex.A-2 is the letter of guarantee on behalf of the firm wherein the Respondent No.5 stood as guarantor and signed over the document for continuing guarantee from time to time under the Promissory Note not exceeding a sum of Rs.8,49,000/- for the transactions and purchase effected by Respondent No. 1 – firm and the payment on its behalf. Ex.A-3 to A-6 and Ex.A-9 to 13 are inter se correspondence between the petitioner, the first respondent and fifth respondent with regard to the payment of amounts on behalf of the first respondent. Ex.A7 is the certified copy of the sale deed of the property in favour of the Respondent No.5 Ex.A8 is the certified copy of the sale deed in favour of the predecessor in title of Respondent No.5 of the same property. Ex.A14 is the copy of the statement of account Exs.15 and 16 are the nil encumbrance certificates in respect of the property of the fifth respondent. The arrangement was continuing between the petitioner and the first respondent Company, but an amount of Rs.7,78,643/- was found due and as the
payment was not effected, the demand was raised by the petitioner Company first, to the respondent firm, but as it was evading the payment, the petitioner Company filed the suit for recovery of the said amount impleading the fifth respondent, who stood as guarantor, and also filed a petition under Order 38 Rule 5 C.P.C. for attachment of property before judgment alleging that the respondents are trying to obstruct or delay the execution of the decree that may be passed against them.
11. It is significant to note that all the above documents which were marked at the time of the hearing of the petition are xerox copies. No originals have been filed. So far with regard to these copies, the learned Counsel for the petitioner Mr. D.Devender Rao submits that at the time of filing the suit these copies were verified with the originals, but there is no stamp or attestation of any Court Officer on these documents. It is not known why the petitioner failed to file the original documents atleast at the time of hearing of the petition when the same are seriously contested by the fifth respondent including his signature over the discounting facility document as guarantor. The fifth respondent has taken a specific plea in his counter affidavit that his signature has been forged and that he did not sign any document nor he has in any way concerned with the suit transactions now set up in the suit on which the claim of the petitioner rests.
12. Apart from this, it is also to be seen whether xerox copies of documents can be relied on for the prima facie conclusion of the liability of the fifth respondent to the suit transactions. In the affidavit filed in support of the petition, the petitioner Company has merely stated that the respondents are trying to alienate the property. The petitioner has not stated in the affidavit as to what type of action the respondents are taking or about to take or took for alienating the property and whether fifth respondent has entered into any agreement with third parties or whether the fifth respondent is trying to create any encumbrance in contracting with third parties so that the
same will not be available in the event of the decree being passed in favour of the petitioner. The material document on which the liability, if any, of the fifth respondent clinches is Ex.A-2.
13. On perusal of xerox copy of Ex.A-2 shows that it has been addressed to the petitioner with regard to the bill discounting facility signed by two partners of the first respondent dated 18-12-1995 on a ten rupees stamp paper. Below that there is initial/ signature under which S. Venkateshwar Rao is written and plot No.585, Prashantnagar, Vanastalipuram, Hyderabad-500 660. No date is written. The petitioner is a Finance Limited Company wherein the documents will be executed in correct proformas maintained by institutions or ex facie the signatures should state the capacity, status of a person who has signed over it.
14. It is stated by Mr. Kishore, learned Counsel for Respondent No. 1 that financial institutions do not return the original documents or sale deeds of the guarantor unless and until the liability is discharged. But, in this case, it is not disputed before me that fifth respondent has specifically stated in the counter that the original sale deeds of his property which he had submitted earlier to the petitioner through Jairam, were already returned to him in the month of December 1995 itself. To that effect the explanation is that the petitioner has replaced those documents by certified copies, but nothing has been stated by way of reply affidavits.
15. The trial Court, while considering the effect of Ex.B1 and B2, in Para 7 of the order, has stated that the fifth respondent stood guarantor for the transaction under Ex.Bl which was original letter issued by the petitioner to the first respondent dated 13-9-1995 while making payment of Rs.7,44,232. Ex.Bl is the original letter under which the petitioner paid an amount of Rs.7,44,232/- through cheque drawn on State Bank of Mysore in favour of the first respondent. The lower Court also held that no prudent man will allow the bill discounting facility to such a huge sum of Rs.8,49,000/-
relying on the xerox copies of documents and so far with regard to Ex.A-2 it is observed that whether the signature of fifth respondent is forged or not is a debatable point which can ‘ only be decided during the course of full fledged trial, but not at this interlocutory stage and negatived the plea of the petitioner that fifth respondent has stood as guarantor for the suit transaction. The lower Court has also held that Respondent Nos.1 to 3 remained exparte and the relief against the fourth respondent was dismissed and also rejected the other prayer of the petitioner for attachment of plant, machinery, tables etc. along with the building and the factory site and also raw materials lying in the factory premises, finished and, unfinished situated at Plot No.30, Electronic Complex Extension, Kushaiguda, Hyderabad as no particulars were given nor the valuation of the material or the municipal number of the building have been furnished.
16. As the petitioner failed to produce any cogent evidence before the Court, and in the absence of not filing the original documents for which no explanation is submitted by the petitioner, I am not persuaded to take a different view, for it is not safe to rely on the xerox copies of the documents on record.
17. There is no error of jurisdiction or illegality in the order passed by the Court below. The C.R.P. lacks merit and it is accordingly dismissed.
18. However, the trail Court shall dispose of the case uninfluenced by the observations of this Court or Court below.