5/28/24, 9:34 PM 2002 C L D 391

2002 C L D 391

[Karachi]

Before Munir-ur-Rehman, J

Messrs PRINZE (PVT.) LIMITED‑‑‑Appellant

Versus

SHAHID SAEED KHAN and others‑‑‑Respondents

Suit No. 1117 and Civil Miscellaneous Application No. 7236

of 2000, decided on 20th August, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXVIII R.5‑‑‑Attachment before judgment

‑‑‑Furnishing of security for production of
property‑‑‑Pre‑condition‑‑‑Where Court is satisfied by
affidavit or otherwise that defendant with intent to obstruct or
delay execution of any decree that may be passed against him,
is about to dispose of property at any stage of the suit, the
Court can pass an order under O.XXXVIII. R.5, C.P.C.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑-O.XXXVIII R.5‑‑‑Attachment before

judgment‑‑‑Furnishing of security for production of
property‑‑‑Intention of defendant, inferring of‑‑‑After receipt
of legal notice given by the plaintiff and prior to institution of
the suit, the defendant had transferred his property to his wife,
just to avoid the decree which might be passed against
him‑‑‑Effect‑‑‑Intention of the defendant was to be inferred
from the attending circumstances‑‑‑Transfer by the defendant
in favour of his wife in clandestine manner prior to institution
of suit showed the conduct/intention of the defendant‑‑‑Where
the plaintiffs case came within the provision of O.XXXVIII,
R.5, C.P.C., High Court directed the defendant to furnish
security.

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5/28/24, 9:34 PM 2002 C L D 391

Faqir Ali v. Muhammad Hayat PLD 1976 Lah. 298

distinguished.

Syed Ziauddin Nasir for Plaintiff.

Ejaz Ahmed for Defendant.

Dates of hearing: 30th January; 1st and 6th February, 2001.

ORDER

This application has been filed on behalf of the plaintiff

praying for attachment before judgment of Property D‑40,
Block‑III, Scheme No.5. Clifton, Karachi (the Property)
owned by defendant No. 1 otherwise defendant No. 1 may be
directed to furnish security in the sum of Rs. 65,00,000.

Briefly the facts of the case are that the plaintiff has filed this
case for settlement of accounts and for recovery of Rs.
65,00,000 and also for attachment of the property owned by
the defendant No. 1 or restraining the defendant No. 1 from
selling, alienating or creating any third party interest in the
property.

According to the plaintiff the plaintiff is a Private Limited

Company and is owner of Plot No. C‑107, Block‑2, Clifton,
Karachi, measuring 600 square yards. The plaintiff to raise
construction over the above plot and for that purpose the
plaintiff obtained approved plan from the concerned
authorities and after completion of the structure plaintiff
decided to a hire services of an expert to complete the
remaining construction, finishing work and interior decoration
of the building. The defendant No. 1 was introduced to the
plaintiff by a German friend namely Professor Dr. Pintsch and
defendant No. 1 claimed that he had constructed and
supervised several buildings and has considerable experience
in managing the affairs of construction, designing and interior
decoration. Thereafter, the plaintiff made certain payments to
the defendant No. 1, as such the defendant No.1 received a
sum of Rs. 59,12,000 from the plaintiff towards the cost of
construction. The plaintiff was not satisfied with the speed of
construction, as such, discussed the matter with defendant
No.1 and thereafter, the defendant No. 1 declined to continue
the work as Project Manager thereafter the plaintiff appointed
Shahab Ghani an Architect to inspect the plot and to assess the
quality and cost of the construction and also appointed Messrs

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Sam Engineering and Contractor to inspect and assess the

electric wiring etc. and to submit the report. Both the
companies have inspected the Prinze house and submitted
their respective reports to the plaintiff. According to the
reports the quality of work is not good and the charges were
very high, thereafter the plaintiff sent the accounts to Messrs
Shahab Ghani Associates for verification and observation who
submitted the report that the defendant has overcharged the
plaintiff and have received the amount, on account of cost of
construction which was never done by them. According to the
plaintiff the defendant committed breach of trust by not
completing the work as agreed between the parties and by
abandoning the work before its completion. The plaintiff
further submitted that the defendant No. 1 is the owner of the
Property bearing No. D‑40, Block‑III, KDA Scheme No.5,
Clifton, Karachi and defendant No. 1 is trying to dispose of
the same to avoid the decree which may be passed in the
present suit against the defendants.

The plaintiff in support of this application filed affidavit

wherein he submitted that the defendant No. 1 is trying to
dispose of the property to defraud the plaintiff and to avoid
payment of decretal amount and submitted that it is very
necessary/essential to restrain the defendant No. 1 not to sell,
alienate or create third party interest in the property till
pendency of the suit otherwise the plaintiff will not be in a
position to recover its decretal amount if decree is passed.

The defendant No. 1, filed counter‑affidavit to this application

and denied the various allegations raised by the plaintiff and
he submitted that the property in question was gifted by him to
his wife Mrs. Maheen as early as November, 1998 and the gift
was later recorded vide deed and declaration of Oral Gift,
dated February 19, 2000 and denied the allegations that he is
attempting to dispose of the said property to avoid the
so‑called claim of the plaintiff is frivolous on the face of it.
The defendant has also taken the plea that he has performed all
his legal obligations to the best of his ability. The breach of
contract is in fact been committed by the plaintiff which has
caused enormous losses to him. He also filed photostat copy of
registered declaration of gift dated 19‑2‑2000 alongwith his
counter‑affidavit,

Plaintiff filed affidavit‑in‑rejoinder and submitted that the

defendant No. 1 had bifurcated the property and been divided

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5/28/24, 9:34 PM 2002 C L D 391

into two portions of 500 square yards each, wherefrom D‑40 is

in the name of defendant No. 1 and D‑41 is in the name of his
wife Mrs. Maheen. It is averred that the defendant No. 1 is
trying to misguide the Court by showing plot as one plot and is
giving false statement on oath. It was also submitted that
according to the information received from the record of Sub?-
Registrar that originally the property was of 1000 sq. yards
thereafter on 27‑2‑1997 the area of this plot, which is in the
name of defendant No. 1, is 541 square yards being Plot
No.D‑40. The plaintiff further stated that the property has been
constructed from the funds provided by the plaintiff to the
defendant for construction of her house. The defendant No. 1
has extracted Rs. 29,00,000 from the plaintiff for construction
and supply of material which according to the plaintiff it was
never utilized in construction work or supplied till his
resignation as Project Managei. The defendant No‑1 with mala
fide intention made an oral gift, which was registered in the
record of Sub‑Registrar T‑Division and to avoid the payment
of decretal amount, which may be passed in the suit.

Learned counsel for the plaintiff further submitted that from

the past conduct of the defendant No. 1 it is crystal clear that
he has transferred the suit property in favour of his wife with a
view to avoid any decree as by that time legal notice was
served on 16th September, 1999. On the other hand learned
counsel for the defendant No. 1 has submitted that the present
application is a frivolous one and same has been filed to harass
the defendant No. 1 and he further submitted that the present
application is misconceived as such the same is liable to be
dismissed and in support of his contention he relied upon Faqir
Ali v. Muhammad Hayat PLD 1976 Lah. page 298, wherein it
has been held that before passing the order under revision the
learned Court should have satisfied itself that the
appellant/petitioner was about to dispose of his property or
above to remove it from jurisdiction with the intention to
obstruct or delay the execution of any decree that may be
passed. There is not even an allegation in the application to the
effect that the petitioner was trying to dispose of the property
with ulterior intention to obstruct or delay the execution of the
decree that may be passed in the case. It is mainly stated that
the petitioner is making efforts to dispose of the tractor in
dispute. The defendant have definite evidence to satisfy the
Court on this point. Vague and general allegations that the
property are insufficient apprehensions it does in the rule.
Without stating the grounds of belief and the source of

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information the allegations are inadequate and defective and

Court should be slow in exercising this extraordinary
jurisdiction.

I have heard learned counsel for the plaintiff and perused the
material available on record and also the case‑law cited on
behalf of the defendants.

To appreciate the submissions of learned counsel for the

parties Order XXXVIII, rule 5, C.P.C., is reproduced as
under:‑‑

"Order 38, rule 5.‑‑‑Where a defendant may be called upon to

furnish security for production of property. (1) Where, at any
stage of a suit, the Court is satisfied, by affidavit or otherwise,
that the defendant, with intent to obstruct or delay the
execution of any decree that may be passed against him‑‑‑

(a) is about to dispose, of the whole or any part of his property,

or

(b) is about to remove the whole or any part of his property

from the local limits of the jurisdiction of the Court.

The Court may direct the defendant, within a time to be fixed

by it, either to furnish security, in such sum as may be
specified in the order, to produce and place at the disposal of
the Court, when required, the said property or the value of the
same or such portion thereof as may be sufficient to satisfy the
decree, or to appear and show cause why he should not furnish
security.

(2) The plaintiff shall, unless the Court otherwise direct,

specify the property required to be attached and the
estimated value thereof.

(3) The Court may also in the order direct the conditional
attachment of the whole or any portion of the property
so specified."

From the reading of the above provision it is clear that a Court

if satisfied by an affidavit or otherwise that the defendant with
the intent to obstruct or delay the execution of any decree that
may be passed against him is about to dispose of the property
at any stage of the suit can pass an order under Order
XXXVIII, rule 5, C.P.C. In the present case the ground taken

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by the plaintiff is that the defendant No. 1 is about to dispose

of the property with intent to obstruct the decree that may be
passed in the present suit. Learned counsel for the plaintiff
contended that the defendant No. 1 has transferred the suit
property prior to filing of the present suit which shows the
intention of the defendant which according to the plaintiffs
counsel establishes his case as the same has been done after
the dispute and service of legal notice dated 16‑9‑1999 and
also that it is a sham transaction just to avoid the claim of the
plaintiff.

The fact that the defendant has transferred the property prior to
institution of suit but after the service of legal notice is evident
from the material available on record and the defendant has
simply denied the service of legal notice. There is nothing in
rule 5 of Order XXXVIII, C.P.C., which makes a transaction
subsequent to institution of suit a condition precedent to its
application. The fact that the defendant has done so after the
institution of the suit may be a strong evidence of intention of
the defendant. But the transfer before the institution of suit
shows conduct of the defendant, which may also be evidenced
of the intention after the institution of suit. The intention of the
defendant is to be inferred from the attending circumstances.
The transfer by the defendant in favour of his wife in
clandestine manner prior to institution of suit shows the
conduct/intention of the defendant No. 1. The above case
referred by the defendant's counsel is distinguishable on facts
of the present case.

In view of above stated facts I am of the considered view that

the plaintiffs case comes within the provisions of Order
XXXVII, rule 5, C.P.C., accordingly the defendant is directed
to furnish security equivalent to an amount of Rs.50 lacs
within one month from today.

Q.M.H./M.A.K./P‑28/K Application allowed.

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