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Judgment
B.S. Patil, J.—This matter came up on 25.07.2008 regarding the office objections about the maintainability of the miscellaneous first appeal against the order passed on an application filed under Order 38, Rule 9 of the Civil Procedure Code, 1908. As the Learned Counsel appearing for the appellant pleaded urgency and contended that the order impugned was basically an order passed under Order 38, Rule 8 of the CPC and that as per the Order 38, Rule 8 a claim made for the property attached before judgment shall be adjudicated upon in the manner provided for adjudication of the claims of property attached in execution of a decree for payment of money as per Order 21, Rule 58 and that such an adjudication partakes the characteristic of adjudication of the suit and will be appealable as if it is a decree passed, keeping open the point of maintainability emergent notice & was issued to the respondents. Pursuant to the notice issued, the 3rd respondent has entered appearance and the matter is listed for consideration regarding maintainability. The 3rd respondent is the contesting respondent as it alleges that the goods attached belong to it.
I have heard the learned Senior Counsel Sri Sivappa for the appellant and Learned Counsel Sri B.N.Shivanna for the 3rd respondent on the maintainability of this appeal.
The impugned order is passed on an application LA.No.4 filed by the 3rd respondent herein under Order 38, Rule 9 of the CPC seeking to raise the attachment made in respect of the movable properties namely, 20,000 bags of soya deoiled cakes which according to the 3rd respondent belong to them and which were stored in the space provided by M/s.Panchama Enterprises. M/s.Panchama Enterprises is not a party to the suit.
It is the case of the plaintiff that the premises bearing No.4279/4027 belonging to M/s.Panchama Enterprises wherein 20,000 soya deoiled cakes are stored has been taken on lease by the 1st defendant wherein the 1st defendant is doing business of manufacturing feeds. It is also the case of the plaintiff that the 1st defendant used to purchase soya deoiled cakes and rice bran oil cakes on credit basis and store the same in the said godown for manufacturing the feeds out of the said cakes. As the suit is filed for recovery of money of Rs. 1,77,39,337/- against the 1st defendant, the plaintiffs by firing an application sought for attachment of machineries and the goods stored in the premises bearing No.4279/4027 which was taken on lease by the 1st defendant. An order of attachment before judgment was passed on 09.06.2008.
The 3rd respondent herein was not a party to the suit. When he wanted to lift 20,000 bags of soya deoiled cakes which were allegedly stored by him under an understanding between the 3rd defendant and M/s.Panchama Enterprises, he learnt about the attachment made, whereupon he filed the application seeking to raise the attachment. An application was also made to get himself impleaded as an additional defendant.
The Court below has allowed the application filed by the 3rd respondent to be impleaded as defendant 3 in the suit and insofar as the application filed seeking to raise the attachment, the Court below having considered the stand taken by the respective parties has held that as per Order 38, Rule 9 of the CPC, where an order is made for attachment before judgment, the Court shall order the attachment to be withdrawn when the defendant furnishes the security required together with the security for the costs of the goods attached, or when the suit is dismissed. As the 3rd defendant came forward offering security to the satisfaction of the Court and requested for raising the attachment, the Court in the facts and circumstances of the case found that the security offered deserved to be accepted and the attachment made had to be raised. The Trial Court has further held that the plaintiff did not produce any document to show that the 1st defendant had stored the attached soya deoiled cake bags. The Trial Court also referred to the fact that the 1st defendant was not claiming the attached soya deoiled cakes as materials belonging to it. Therefore, the Court below found that whether the soya deoiled cakes belonged to the 1st defendant or to the 3rd defendant was the matter required to be considered at a later stage. Hence, the attachment of soya deoiled cakes was raised. The Court below has passed the order subject to the condition that the 3rd respondent furnishes security to the satisfaction of the Court for raising the attached movable items.
Learned Senior Counsel Sri Sivappa submits that the order under challenge is traceable to the provisions contained under Order 38, Rule 8 of the CPC which pertains to adjudication of claim to property attached before judgment. He submits that any adjudication made under Rule 8, Order 38 is to be done in the manner provided for adjudication of claims to property attached in execution of decree for payment of money which is provided for under Order 21, Rule 58 of the CPC. Further, drawing the attention of the Court to sub-rules (3) and (4) of the Rule 58 of Order 21, Learned Counsel submits that where any claim or objection has been adjudicated upon under this Rule (Order 21, Rule 58), the order made therein shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. In this background he submits that this appeal is maintainable as the adjudication made by the Court below partakes the characteristics of a decree. He has placed reliance on the judgment rendered by this Court in the case of Ravindera Sheregara Vs. Syndicate Bank, Udupi, He has also alternatively contended that if the miscellaneous first appeal is not maintainable, a regular first appeal will be maintainable, if the order under challenge is treated as a decree passed as is provided under sub-rule (4) of Order 21, Rule 58 of the CPC. In this connection he places reliance on the judgment in the case of Mr. Gurram Seetharam Reddy Vs. Gunti Yashoda and Another,
The above submission made by the Learned Counsel does not commend itself for acceptance as there is no adjudication made, in the instant case, of the claim made by the 3rd respondent with regard to the attached properties. Order 38, Rule 8 reads as under:
"Rule 8. Adjudication of claim to property attached before judgment - Where any claim is preferred to property attached before judgment, such claim shall be adjudicated upon in the manner hereinbefore provided for the adjudication of claims to property attached in execution of a decree for the payment of money".
It is clear from the above that any claim preferred to the property attached before judgment shall be adjudicated in the same manner as provided for adjudication of claims to property attached in execution of a decree for payment of money. The adjudication of the claims to property attached in execution of a decree for payment of money is provided under Order 21, Rule 58 of the CPC. It is useful to extract Order 21, Rule 58 which reads as under:
"Rule 58. Adjudication of claims to, or objections to attachment of property.- (1) Where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with the provisions herein contained:
Provided that no such claim or objection shall be entertained.-
(a) where, before the claim is preferred or objection is made, the property attached has already been sold; or
(b) where the Court considers that the claim or objection was designedly or unnecessarily delayed.
(2) All questions (including questions relating to right, title or interest in the property attached) arising between the parties to a proceeding or their representatives under this rule and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit.
(3) Upon the determination of the questions referred to in sub-rule (2), the Court shall, in accordance with such determination.-
(a) allow the claim or objection and release the property from attachment either wholly or to such extent as it thinks fit; or
(b) disallow the claim or objection; or
(c) continue the attachment subject to any mortgage, charge or other interest in favour of any person; or
(d) pass such order as in the circumstances of the case it deems fit.
(4) Where any claim or objection has been adjudicated upon under this rule, the order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree.
(5) Where a claim or an objection is preferred and the Court, under the proviso to sub-rule (1), refuses to entertain it, the party against whom such order is made may institute a suit to establish the right which he claims to the property in dispute; but, subject to the result of such suit, if any, an order so refusing to entertain the claim or objection shall be conclusive".
As could be seen from the aforementioned provision, if any objection is made to the attachment of property in execution of a decree stating that the said property was not liable for attachment, the Court shall proceed to adjudicate such claim or objection and in that process as per sub-rule (2) of Rule 58 of Order 21 all questions including the questions relating to right, title or interest in the property attached arising between the parties to a proceeding or their representatives to the adjudication of the claim or objection shall be determined by the Court dealing with the claim or objection and not by a separate suit. As is further clear from sub-rule (3), upon determination of such questions the Court shall in accordance with such determination allow the claim or objection and release the property from attachment either wholly or to such extent as it thinks fit, or disallow the claim or objection, or continue the attachment or pass such order as in the circumstances of the case it deems fit.
As per sub-rule (4) of Rule 58, on which considerable reliance is placed by the learned Senior Counsel, once any such claim or objection is adjudicated upon under Rule 58, the said order shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree.
It is true, if an adjudication is made as required under Order 38, Rule 8 by following the procedure and the scheme of law envisaged under Order 21, Rule 58 and if that adjudication determines all questions including the questions relating to right, title or interest in the property attached, upon such determination the order made therein shall have the same force as if it were a decree. In the instant case, the right, title or interest in the property attached which the 3rd respondent has claimed asserting that the same absolutely belongs to them and that it had taken the premises of Panchama Enterprises on rent wherein it had stored the goods with the permission of Panchama Enterprises and further that the 1st defendant had nothing to do with those goods has not been finally adjudicated and determined by the Court below. In fact, there is no determination or adjudication of this fact as contemplated under Order 21, Rule 58. Only where an adjudication or determination of the rights in the manner provided under Order 21, Rule 58 is made then the order to be passed will partake the characteristic of a decree and an appeal will lie against such an order. The order under challenge is an interlocutory order. The 3rd respondent claiming to be the owner of the goods has some forward before the Court with an interim application to raise attachment and a submission is made that it is prepared to give security to the satisfaction of the Court and the attachment may be raised as the goods were perishable in nature. On such application which is filed under Order 38, Rule 9, the attachment is raised by directing the 3rd respondent to furnish security to the satisfaction of the Court keeping in mind the perishable nature of the goods. This order cannot be characterised as an order passed adjudicating or determining the claims made by the 3rd defendant for the goods attached and it cannot partake the characteristic of a decree. Hence, no appeal is maintainable against such an order. In this view of the matter, the judgments cited by the learned Senior Counsel which deal with altogether different facts and circumstances have no application to the facts of the present case.
The objection raised by the office is therefore upheld and the appeal is dismissed as not maintainable.