R G MALLIKARJUNIAH Vs. BANK OF INDIA

JUDGEMENT

(1.) THE respondent Bank filed IA-4 before the Presiding Officer, DRT, Bangalore, to direct the defendants to furnish security and upon their failure, to pass a conditional order of attachment before judgment in respect of property mentioned therein. THE Tribunal allowed the petition. THE appeal is directed as against the order passed by the PO, DRT.

(2.) Counsel for the appellants submitted that the PO, DRT, has passed the order ordering attachment before judgment of 'D' Schedule property preventing the 3rd defendant from alienating or otherwise dealing with the said property until further orders from the Tribunal and the order passed by the PO, DRT, is not sustainable since the relevant conditions for passing order before judgment have not been complied with by the respondent Bank. He pointed out that the respondent Bank has not set out reasons at all for effecting attachment before judgment of that property and as per Section 19(13) of the Act the Tribunal must be satisfied that if a defendant was about to dispose of the whole or any part of his property or is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Tribunal, or is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest and only if any of the conditions are satisfied the Tribunal may direct the defendant within the time to be fixed by it either to furnish security in such sum as may be specified in the order or such portion thereof as may be sufficient to satisfy the Recovery Certificate and in case of failure to furnish such security, the Tribunal may pass order of attachment and none of the conditions as contemplated under Section 19( 13) was satisfied and so the order passed by the PO, DRT suffers from infirmity. He further pointed out that in the affidavit the Bank has not set out none of the above said conditions as contemplated and the Bank has simply stated that property given as security in Schedule 'B' is not likely to fetch the suit claim and the defendants are wilful defaulters and it is likely that the defendants with a view to obstruct or delay the execution of the order for recovery of debt that may be eventually passed in this application may dispose of the said property and the property belongs to the 3rd defendant which is not charged to the Bank. He further pointed out that mere allegation that the defendant is about to dispose of the property unsupported by particulars is not sufficient compliance with the rule and so everything ought to have been set out in the petition which are absent in the affidavit filed by the Bank and the petition filed by the Bank is liable to be dismissed in limine.

(3.) COUNSEL for the appellant submits that whatever may be case, there must be specific averment in the affidavit with regard to the conditions to be satisfied before ordering attachment and those conditions are absent in this case and so the order passed is not sustainable. The appellant was conscious of the fact that there was already a first mortgage in respect of the secured property and further it was also under Lease-cum-Sale Agreement. COUNSEL for the appellant submitted that the Bank was satisfied that even though there was first mortgage in respect of that property, since the property secured is sufficient for satisfaction of the decree amount, the Bank granted the loan and now the attachment of property cannot be sought for. The Bank has averred in the petition that the appellant is likely to dispose of the property with a view to obstruct or delay the execution of the recovery certificate and if the properties are disposed of the Bank will be left with no other remedy but to recover the outstanding. He strenuously argued that the conditions stated in Section 19(13) are not stated in the affidavit and without any averment with regard to these conditions in the petition, the order of attachment cannot be made merely on the bare statement that the defendant is disposing of his property and particulars must be stated.