CANARA BANK Vs. GORDHANDAS DAMODARDAS

JUDGEMENT

(1.) What is the remedy of third party in whose hands the property belonging (or alleged to be belonging) to the defendant is attached before judgment and the attachment before judgment and/or prohibitory order is confirmed by the court after hearing the parties ? Will it not be open to such third party to file an appeal from order or will he be obliged to file regular appeal treating the order of attachment before judgment and/or order of prohibition as decree. This is one of the main questions which has arisen in these proceedings. Appeal from Order No. 259 of 1984 has been filed by Canara Bank against the order dated 7/08/1984 passed below Exh. 5 application in Special Civil Suit No. 92 of 1984 by the learned Civil Judge (SD) Jamnagar. Respondent No. 1-Gordhandas Damodar filed the aforesaid suit against respondent No. 2-M/s. Reliable Extraction Industries Private Ltd. having its registered office at Bombay for recovery of an amount of Rs. 13.00 lakhs. It is alleged by the plaintiff that the defendant-Company owed the amount which as advanced by the plaintiff to the Company. No date of payment by the plaintiff to the defendant-Company is mentioned in the plaint Moreover according to the plaintiff the amount was paid in cash. The plaintiff further alleged that three cheques were issued by the defendant-Company which bore the signatures of two of the directors of the Company namely R. D. Modi and V. C. Yagnik. The cheques issued were as follows: ---------------------------------------------------------- S. No. Date Amount Rs. ---------------------------------------------------------- 1 28 Rs. 5/- lakhs 2 1 Rs. 4/- lakhs 3 1 Rs. 4/- lakhs ---------------------------------------------------------- According to the plaintiff these cheques were drawn on Punjab and Sind Bank Bombay. On 16/12/1983 when the cheques were presented in the Bank they were dishonoured. The plaintiff filed the suit in the court of Civil Judge (SD) Jamnagar and prayed for attachment before judgment as well as for garnishee order by filing application Exh. 5. The plaintiff alleged in the application that the business of the defendant-Company was closed for quite some time and its position had become weak and was getting weaker day by day. The plaintiff further alleged that in the Abdul Rehman Street branch of Canara Bank an amount of Rs. 11 69 438 was lying in the account of the defendantCompany and that was the amount of Chikpis insurance. According to the plaintiff the amount was received by the Bank from New India Assurance Company. The plaintiff further stated that even if the decree is passed the plaintiff would not be able to realise the fruits of the decree and further contended that no harm would be caused to the defendant if the property in question was attached before judgment and called for and directed to be produced in court. On this basis the plaintiff prayed that the aforesaid amount lying in the suspense account of the defendant-company be attached and be ordered to be produced in court. The application was filed on the same day i. e. on 18/06/1984

(2.) The trial court passed an order attaching the property by prohibiting the Bank from making payment to the judgment debtor or anyone with further direction to produce the said amount in court on or before 25-6-1984. The Bank appeared and resisted the application filed by the plaintiff on facts as well as on law points. On behalf of the defendant-Company Shri R. D. Modi one of the directors of the defendant-Company and who is the real brother of the plaintiff-Shri G. D. Modi filed an affidavit dated 19/07/1984 He practically supported the case of the plaintiff. Thus before the trial court real contest remained between the plaintiff and Canara Bank-the garnishee The Bank inter alia contended that the court had no jurisdiction to entertain and decide the suit the amount in question did not belong to the defendant-Company and it belonged to Muslim Bank London. The Bank also pointed out that the defendant-Company had filed Civil Suit No. 5583 of 1983 in the City Civil Court Bombay and obtained an ad interim injunction against the Bank whereby the Bank was prohibited remitting the said amount 10 Muslim Bank London. After hearing the parties the court overruled the objections raised by the appellantBank and passed an order dated 7/08/1984 confirming the order dated 18/06/1984 and gave the following directions:

(3.) In order to avoid controversy I have permitted all the counsels appearing for different parties to make their submissions. Counsel for Shri R. D. Modi the relative director who appeared for and on behalf of the defendant-Company in the suit and the counsel for the plaintiff have made submissions which are almost same or similar in substance. (The phrase relative director is used for the sake of convenience only because Shri R. D. Modi is the real brother of the plaintiff Shri G. D. Modi).