Such Attachment Shall Be Void: The Two Protections Order XXXVIII Distributes, and the Order That Falls Between Them

A Court's coercive power normally follows its decision. The sequence is not a courtesy; it is the reason the power is tolerable. A man whose property is sold or whose person is confined has, by then, lost a case, and the loss is what authorises the confinement or the sale.

Order XXXVIII is one of the few places in the Code of Civil Procedure, 1908 where that sequence is reversed. It permits a Court to arrest a defendant, and to attach his property, at a stage when nothing has been decided against him and when the plaintiff's claim may in the end fail entirely. The justification offered is not that the defendant is liable but that he is about to make the eventual decree worthless — that he is removing himself or his assets from the Court's reach while the suit takes its course.

Any code that grants such a power has to decide what will protect the defendant against its wrongful exercise. There are only two structural answers available. One is to make the order appealable, so that a higher Court can undo it. The other is to make the order void, so that it never had effect and needs no undoing. Order XXXVIII uses both answers. It does not distribute them evenly between the two devices, and the way it distributes them is not explained anywhere in the Order.

The power and the condition attached to it

The enabling provision is section 94, and it is worth reading for its opening words, which state the premise of the whole of this part of the Code: "In order to prevent the ends of justice from being defeated the Court may, if it is so prescribed,—".

Clause (a) authorises the Court to "issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not give security for his appearance, and if he fails to comply with any order for security commit him to the civil prison". Clause (b) authorises it to "direct the defendant to furnish security to produce any property belonging to him and to place the same at the disposal of the Court or order the attachment of any property".

The words "if it is so prescribed" matter. Section 94 does not itself confer an operative power; it confers one only to the extent that the rules provide for it. The content of both devices is therefore in Order XXXVIII, and a step not authorised by the Order is not authorised by section 94 either.

The arrest track

Rule 1 opens with an exclusion. The power applies "[w]here at any stage of a suit, other than a suit of the nature referred to in section 16, clauses (a) to (d), the Court is satisfied, by affidavit or otherwise". Those clauses of section 16 cover suits for the recovery of immovable property with or without rent or profits, for the partition of immovable property, for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, and for the determination of any other right to or interest in immovable property. (The last of these is printed in the consolidated text with an obvious slip — "or the determination" where the sense requires "for" — which is why it is paraphrased here rather than quoted.) In suits of those kinds there is no arrest before judgment at all. The subject-matter of such a suit cannot be carried out of the jurisdiction, and the Code accordingly withholds the device aimed at a defendant who can.

Where the exclusion does not apply, the Court must be satisfied of one of two things. The first, in clause (a), is an intent coupled with an act. The intent is stated in the alternative and is wide: that the defendant acted "with intent to delay the plaintiff, or to avoid any process of the Court or to obstruct or delay the execution of any decree that may be passed against him". The act must be that he "has absconded or left the local limits of the jurisdiction of the Court", or is about to do so, or has disposed of or removed his property or any part of it from those limits. The second, in clause (b), is that the defendant "is about to leave India" — the word substituted for "the States" by section 3 of Act 2 of 1951 — in circumstances affording reasonable probability that the plaintiff will or may thereby be obstructed or delayed in executing any decree that may be passed.

On being so satisfied, "the Court may issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not furnish security for his appearance". The arrest is therefore not punitive and not final. Its object is to produce the defendant for a hearing on security.

The proviso to Rule 1 makes that explicit by putting a price on the arrest: "Provided that the defendant shall not be arrested if he pays to the officer entrusted with the execution of the warrant any sum specified in the warrant as sufficient to satisfy the plaintiff's claim; and such sum shall be held in deposit by the Court until the suit is disposed of or until the further order of the Court." The warrant must thus carry a figure, and the figure is a discharge. A defendant who can pay it never reaches the Court at all, and the money sits in deposit without any finding that he owes it.

Rule 2 governs what follows if he does reach the Court and fails to satisfy it. "Where the defendant fails to show such cause the Court shall order him either to deposit in Court money or other property sufficient to answer the claim against him, or to furnish security for his appearance" at any time when called upon while the suit is pending and until satisfaction of any decree that may be passed. The verb is "shall". Once cause is not shown, the Court has no option to pass over the matter; its choice is confined to which of the two forms of protection it takes. Rule 2(2) binds every surety for appearance to pay, in default of appearance, any sum of money the defendant may be ordered to pay in the suit. Rule 3 lets a surety apply to be discharged, and on his application the Court summons the defendant or, if it thinks fit, issues a warrant for his arrest in the first instance, and on his appearance discharges the surety and calls on the defendant to find fresh security.

Rule 4 is where liberty is actually lost. Where the defendant fails to comply with an order under Rule 2 or Rule 3, "the Court may commit him to the civil prison until the decision of the suit or, where a decree is passed against the defendant, until the decree has been satisfied". Two provisos limit it. The first caps the detention at six months, and at six weeks "when the amount or value of the subject-matter of the suit does not exceed fifty rupees". The second is unconditional: "no person shall be detained in prison under this rule after he has complied with such order."

The fifty-rupee figure has not been revised since 1908, and no suit of that value is instituted now, so the shorter cap has no field left to operate in and six months is the operative limit in every case. It is worth holding that figure in mind, because the Code carries one other money figure governing these same devices, and that one was revised.

The attachment track

Rule 5(1) requires satisfaction, again "by affidavit or otherwise", that the defendant, "with intent to obstruct or delay the execution of any decree that may be passed against him", either "is about to dispose of the whole or any part of his property" or is about to remove the whole or any part of it from the local limits of the jurisdiction.

Set that beside Rule 1 and the first asymmetry appears, and it runs in the direction one would not predict. The device that takes a man's liberty is triggered by any one of three intents, including the broad intent "to delay the plaintiff". The device that merely binds his property is triggered by one intent only — to obstruct or delay the execution of a decree. On the face of the two rules, the Code asks for a narrower state of mind before it will touch the property than before it will issue a warrant for the person. What qualifies this is the act each rule requires alongside the intent: Rule 1 in its first limb will not operate unless the defendant has absconded, is about to abscond, or has already disposed of or removed property, so the intent is to be found in conduct that has begun. Rule 5 operates on a defendant who is merely "about to" act. The wider intent is thus paired with the harder act, and the narrower intent with the easier one.

What the Court may do on being satisfied under Rule 5(1) is, in the first instance, not to attach. It may "direct the defendant, within a time to be fixed by it, either to furnish security... to produce and place at the disposal of the Court, when required, the said property or the value of the same", or "to appear and show cause why he should not furnish security". Rule 5(2) puts a pleading burden on the plaintiff: "The plaintiff shall, unless the Court otherwise directs, specify the property required to be attached and the estimated value thereof." An application that identifies no property and offers no valuation does not comply.

Rule 5(3) then supplies the immediate remedy: "The Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified." This is the provision that does the work in practice, because it binds the property at once, in the same order that calls on the defendant to show cause, and therefore before he has been heard.

Rule 6 deals with the sequel. If 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". If he does show cause or does furnish security, and property has been attached, "the Court shall order the attachment to be withdrawn, or make such other order as it thinks fit".

Here the asymmetry reverses. On the arrest side, failure to show cause obliges the Court to act — Rule 2 says "shall". On the attachment side, failure to show cause merely permits it — Rule 6(1) says "may". Withdrawal, by contrast, is mandatory in form on the attachment side, subject to the alternative of such other order as the Court thinks fit.

Rule 7 makes the mode of attachment the same as in execution: "Save as otherwise expressly provided, the attachment shall be made in the manner provided for the attachment of property in execution of a decree."

Sub-rule (4), and what it is for

Rule 5(4) was inserted by section 85 of the Code of Civil Procedure (Amendment) Act, 1976 — Act 104 of 1976 — with effect from 1 February 1977: "If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule, such attachment shall be void."

This is the only provision in Order XXXVIII that declares anything void, and its construction repays attention. It does not say that an attachment is void if the defendant turns out not to have had the forbidden intent, or if the plaintiff's suit later fails, or if the attachment was excessive. It attaches the nullity to one thing only: non-compliance with sub-rule (1). Sub-rule (1) is the provision that requires the Court to be satisfied of the intent and the act, and that directs the Court to call on the defendant to furnish security or to show cause. An attachment made without that step — without the direction to show cause, or without the satisfaction sub-rule (1) requires — is not irregular. It is void.

The reason the nullity sits where it does becomes clear once Rule 5(3) is read alongside it. Rule 5(3) permits the Court to bind the property in the very order that calls on the defendant to show cause, which is to say ex parte. A power exercisable without hearing the person affected needs a check that does not depend on his being present to invoke it, and a nullity is such a check: it operates by force of the provision, on the record, whenever the record shows the step was skipped. An appeal would not have served, because an appeal has to be filed, and the defendant whose property was attached without notice may not know of it until long afterwards.

So the Code's protection against the ex parte attachment is not appellate. It is the rule that the attachment is simply void if the Court did not do what sub-rule (1) told it to do.

Where the Code puts the appeals

The appellate scheme for these orders is in two places, and the difference between them is the point of this note.

Section 104(1) lists the orders from which an appeal lies and provides that, save as otherwise expressly provided, an appeal lies "from no other orders". Clause (h) reads: "an order under any of the provisions of this Code imposing a fine or directing the arrest or detention in the civil prison of any person except where such arrest or detention is in execution of a decree."

That clause is a class description. It names no Order and no rule. It catches the warrant under Rule 1, because that order directs an arrest; it catches the committal under Rule 4, because that order directs detention in the civil prison; and neither is in execution of a decree. It would equally catch any future provision of the Code having the same effect, without amendment. The appealability of every liberty-depriving order in Order XXXVIII therefore rests on a description of what the order does, and cannot fall out of date.

Clause (i) of the same sub-section takes an entirely different route: "any order made under rules from which an appeal is expressly allowed by rules." For orders made under the rules, in other words, section 104 confers nothing of itself. It defers to whatever list the rules maintain, and the list is Order XLIII Rule 1.

In that list, the relevant entry is clause (q), which allows an appeal from "an order under rule 2, rule 3 or rule 6 of Order (XXVIII)".

Two things must be said about that clause. The first concerns its printed form. In the consolidated text of the Code published on India Code, the Order is printed as "(XXVIII)", in parentheses. It cannot be read literally. Order XXVIII of the Code is headed "Suits by or against military or naval men or airmen"; it contains three rules; it has no rule 6; and its rules 2 and 3 deal with a person authorised to prosecute or defend a suit, and with service on such a person, neither of which produces an order of the kind an appeal clause would name. The rules named in clause (q) correspond exactly to Order XXXVIII, whose Rule 2 is the order for deposit or security, whose Rule 3 is the order on a surety's application to be discharged, and whose Rule 6 is the order of attachment or of withdrawal. The reference must therefore be read as Order XXXVIII. Anyone relying on clause (q) in argument should check it in a print edition rather than quote the digitised text as it stands, because a parenthesised numeral that cannot mean what it says is an unhelpful thing to put before a Court.

The second, and the substantive point, concerns what clause (q) leaves out. It names rules 2, 3 and 6. It does not name rule 5. An order under Rule 5(3) directing a conditional attachment is therefore not an order from which an appeal is expressly allowed by the rules, and it is not an order directing an arrest or a detention, so clause (h) of section 104(1) does not reach it either.

What governs such an order is section 105(1): "Save as otherwise expressly provided, no appeal shall lie from any order made by a Court in the exercise of its original or appellate jurisdiction; but where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal." Order XLIII Rule 1A, inserted by section 89 of Act 104 of 1976, says the same thing from the other direction for orders made against a party before a decree is drawn up.

A ground of objection in an appeal against the decree is no remedy at all for an attachment that is in force now. The defendant's real remedy against a conditional attachment is the one Rule 5(1) itself gives him — to appear and show cause, and so to bring Rule 6(2) into play, the order under which is appealable because clause (q) names rule 6. The protection is procedural rather than appellate, and it sits upstream of the order rather than above it.

The two devices are therefore protected in opposite ways. Liberty is protected by an appeal that is guaranteed by a class description and needs no list. Property is protected, at the ex parte stage, not by an appeal but by a nullity, and thereafter by an appeal that depends on an enumeration — an enumeration which, as the printed form of clause (q) shows, is the kind of thing that can go wrong.

What an attachment before judgment does not do

Several rules limit the effect of a pre-judgment attachment, and its effect is easy to overestimate in argument.

Rule 10 provides that "[a]ttachment before judgment shall not affect the rights, existing prior to the attachment, of persons not parties to the suit", nor bar any person holding a decree against the defendant from applying for sale of the attached property in execution of his own decree. The attachment therefore creates no priority. It does not convert the plaintiff into a secured creditor, and it does not put him ahead of a decree-holder who got there first. Rule 8, as substituted by the same section 85 of the 1976 Act, supplies the forum in which a stranger asserts those preserved rights: a claim preferred to property attached before judgment "shall be adjudicated upon in the manner hereinbefore provided for the adjudication of claim to property attached in execution of a decree for the payment of money".

What it does do is engage section 64(1): where an attachment has been made, "any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment." Sub-section (2), inserted by section 3 of Act 22 of 2002 with effect from 1 July 2002, exempts a transfer or delivery made in pursuance of a contract entered into and registered before the attachment. The attachment thus freezes dealings without creating a charge — which is a narrower thing than it is usually taken to be, and the narrowness is in Rule 10.

Rule 11 saves a successful plaintiff the trouble of attaching twice: where property is under attachment under the Order and a decree is afterwards passed in his favour, it is not necessary on an application for execution to apply for re-attachment. Rule 11A, inserted by the same section 85 of the 1976 Act, applies the Code's execution-attachment provisions, so far as may be, to an attachment before judgment that continues after judgment by force of Rule 11. Its sub-rule (2) is a hard-edged rule worth noting: "An attachment made before judgment in a suit which is dismissed for default shall not become revived merely by reason of the fact that the order for the dismissal of the suit for default has been set aside and the suit has been restored." Restoration of the suit does not restore the attachment. A plaintiff whose suit was dismissed for default and then restored must apply again.

Rule 9 requires withdrawal when the defendant furnishes the security required together with security for the cost of the attachment, or when the suit is dismissed. Rule 12 excludes agricultural produce in the possession of an agriculturist: "Nothing in this Order shall be deemed to authorise the plaintiff to apply for the attachment of any agricultural produce in the possession of an agriculturist, or to empower the Court to order the attachment or production of such produce." Rule 13, inserted by section 4 of Act 1 of 1926, denies a Court of Small Causes the power to order attachment of immovable property.

The provision that treats the two alike

Having separated the devices throughout, the Code reunites them in section 95, which is the defendant's claim for having been subjected to either on inadequate material.

Where an arrest or attachment has been effected or a temporary injunction granted under section 94, and it appears to the Court that it "was applied for on insufficient grounds", or that the suit fails and there were no reasonable or probable grounds for instituting it, the defendant may apply and the Court may award compensation. Three features of the section are worth noting.

First, it is indifferent as between the three devices: arrest, attachment and injunction are treated identically, and the ground — insufficiency of the material on which the plaintiff applied — is the same for all. Second, the ceiling is "not exceeding fifty thousand rupees", substituted by section 8 of the Code of Civil Procedure (Amendment) Act, 1999 — Act 46 of 1999 — with effect from 1 July 2002, for "not exceeding one thousand rupees". This is the money figure to set against the fifty rupees in the second proviso to Rule 4: Parliament revised the cap on what a wrongly coerced defendant may recover and left untouched the figure that was meant to shorten his imprisonment. Third, section 95(1) carries a proviso confining the award to the limits of the Court's pecuniary jurisdiction. (That proviso is printed in the consolidated text with the word "pecuniar", and is therefore paraphrased here.) Section 95(2) makes the order final in a particular sense: "An order determining any such application shall bar any suit for compensation in respect of such arrest, attachment or injunction." The remedy is elective in form and exclusive in effect — and an order under section 95 is itself appealable, under clause (g) of section 104(1).

Three things that follow at the Bar

The first concerns the affidavit on which a Rule 5 application rests. Rule 5(1) requires satisfaction of an intent and of an act that is about to happen, and Rule 5(2) requires the plaintiff to specify the property and its estimated value. An affidavit that pleads the defendant's means, or his unwillingness to pay, or the strength of the plaintiff's case, pleads nothing the rule asks for. The intent the rule names is an intent to obstruct or delay execution of a decree, which is a different thing from an inability or a reluctance to satisfy one; and the act is a disposal or removal that is imminent, not one that is feared. Where an order of attachment has been made without the Court having addressed those matters, the consequence the Code provides is not that the order is irregular but that the attachment is void under Rule 5(4), and the submission should be put in those terms, because nullity and irregularity attract different answers.

The second concerns the route by which a conditional attachment is challenged. Because clause (q) of Order XLIII Rule 1 names rules 2, 3 and 6 and not rule 5, time spent looking for an appeal against the conditional attachment itself is time lost. The step the Code contemplates is to appear and show cause within the time fixed, or to furnish the security, and so to bring Rule 6(2) into operation; the order made on that is an order under rule 6 and is appealable. The practical consequence is that the time fixed under Rule 5(1) is the thing to watch, since letting it pass converts a defendant's best remedy into his worst — Rule 6(1) then permits attachment on his default, and the order appealed from is one he allowed to be made.

The third concerns the arrest track, where the Code's protections are stronger than the use generally made of them. An order under Rule 1 or Rule 4 is appealable under section 104(1)(h) without reference to any list, because what makes it appealable is that it directs an arrest or a detention. The second proviso to Rule 4 is absolute: detention cannot continue after the defendant has complied with the order under Rule 2 or Rule 3, and compliance is therefore to be placed on the record at once rather than pleaded later. And the proviso to Rule 1 means that a warrant which does not specify a sum sufficient to satisfy the claim has omitted the one thing that allows the defendant to avoid arrest altogether — which is a defect in the warrant, and visible on its face.

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Authored by Eshan Kumar Gupta, Advocate, Hon'ble Allahabad High Court, Lucknow Bench.