Judgment:
P.C.:
The Notice of Motion is taken out by the Plaintiff for a temporary restraint against the Defendants from closing down and / or stalling the functioning and / or disposing off the assets of Defendant No.1 company, or in the alternative, a direction to the Defendants to deposit a sum of Rs.1,70,83,688/-. In the alternative, reliefs are claimed under Order XXXVIII Rule 5 of the CPC in respect of the properties described in the Schedule to the Notice of Motion.
2. The suit is instituted by the Plaintiff, who is an ex-employee of Defendant No.1 company, claiming various dues by way of salary, bonus and share of profits receivable by the Plaintiff from Defendant No.1 company. The particulars of the Plaintiffs claim are annexed at Exhibit X to the plaint.
3. The affidavit of the Plaintiff in support of the Notice of Motion avers that Defendant No.1 company, which deals in securities, is planning to close down its business. The Plaintiff claims that this is evident from the fact that Defendant No.1 company has already withdrawn the security deposit maintained with the Bombay Stock Exchange. On this basis, the Plaintiff has averred that he apprehends that the Defendant will liquidate its assets and thus, deprive the Plaintiff of the fruits of the decree which is likely to be passed in the present suit.
4. The Plaintiff has filed an additional affidavit affirmed on 29 July 2013 stating that the Plaintiff had recently learned that Defendant No.2 was now employed as President Finance of Firestar Trading Private Limited and that this further substantiated the Plaintiff's allegations that the Defendants are intending to close down the business and liquidate the assets, so as to deprive the Plaintiff of his right to the dues.
5. The Defendants dispute the Plaintiff's claim in the suit. The learned Counsel appearing for the Defendants submits that the major part of the Plaintiffs claim consists of profit sharing dues for the years 2007-8, 2008-9 and 2009-10. The learned Counsel submits that these claims, as alleged in the plaint, were already a subject matter of correspondence between the parties. The learned Counsel submits that this correspondence shows that these claims were settled between the parties with Defendant No.1 offering to pay a sum of Rs.60 lakhs towards settlement of all past dues. The learned Counsel submits that accordingly, a sum of Rs.60 lakhs was admittedly paid by Defendant No.1 to the Plaintiff and that these very claims cannot be re-agitated in the suit herein. The learned Counsel for the Defendants further submits that the Defendants are entitled to adjust pending dues accruing subsequent to the settlement of accounts between the parties, towards repayment of loans advanced by Defendant No.1 to the Plaintiff. He relies on correspondence between the parties in respect of these loans.
6. Having regard to these pleas and documents produced in support thereof, the Defendants have a fair chance of successfully defending the suit.
7. As for the merits of the Plaintiffs case under Order XXXVIII Rule 5, it is pertinent to note that apart from a bare assertion in the affidavit in support of the Notice of Motion, there is nothing to indicate that Defendant No.1 is closing down its business or disposing of its assets. The Defendants have in their reply to the Notice of Motion denied that the business was to be closed down. What the Defendants submit is that Defendant No.1 company is now focusing on consulting and advisory work as the prospects of broking in the present market were not very attractive. Defendant No.2 has denied being employed with Firestar International Pvt.Ltd., as claimed by the Plaintiff. The Defendants submit that Firestar International Pvt.Ltd. was a client of Defendant No.1, to whom the latter has provided consultancy services from the month of June 2013 onwards. The Defendants rely on various invoices raised by Defendant No.1 on the said Firestar International Pvt.Ltd. for consultancy services. These invoices have been annexed to the reply of the Defendants. There is, thus, nothing on record to indicate that Defendant No.1 company is in the process of closing down or disposing of its assets. If anything, there is evidence to show that Defendant No.1 continues to carry on business, albeit with a changed focus.
8. The Calcutta High Court in the case of PremrajMundra vs. Md. Maneck Gazi (AIR (38) 1951 Calcutta 156 [C.N. 30o.]considered various authorities on the applicability of the provisions of Order XXXVIII Rules 5 and 6 of the CPC and deduced guiding principles for the approach of the Court under Order XXXVIII Rules 5 and 6, some of which are set out below:
œ(1) That an order under Order 38, Rules 5 and 6, can only be issued, if circumstances exist as are stated therein.
(2) Whether such circumstances exist is a question of fact that must be proved to the satisfaction of the Court.
(4) That the affidavits in support of the contentions of the applicant, must not be vague, and must be properly verified. Where it is affirmed true to knowledge or information or belief, it must be stated as to which portion is true to knowledge, the source of information should be disclosed, and the grounds for belief should be stated.
(5) That a mere allegation that the deft. was selling off his properties is not sufficient. Particulars must be stated.
(8) That the mere fact of transfer is not enough, since nobody can be prevented from dealing with his properties simply because a suit has been filed: There must be additional circumstances to show that the transfer is with an intention to delay or defeat the pltf.'s claim. It is open to the Court to look to the conduct of the parties immediately before suit, and to examine the surrounding circumstances, and to draw an inference as to whether the deft. is about to dispose of the property, and if so, with what intention. The Court is entitled to consider the nature of the claim and the defence put forward.
(10) That in the case of running businesses, the strictest caution is necessary and the mere fact that a business has been closed, or that its turnover has diminished, is not enough.?
9. The decision of the Calcutta High Court in PremrajMundra's case (supra) has been cited with approval for its clear summary of principles relating to grant attachment before judgment by the Supreme Court in the case of Raman Tech. and Process Engg. Co. vs. Solanki Traders (2008) 2 SCC 302).
10. Having regard to these principles and the bare averments made by the Plaintiff for claiming an attachment before judgment or reliefs in the nature thereof as noted above, the requirements of Order XXXVIII, Rules 5 and 6 for sustaining an order thereunder are clearly not satisfied in the present case.
11. For the reasons noted above, the Notice of Motion is dismissed with no order as to costs.