Court can secure money decree with attachment under O. XXXVIII R. 5 based on defendant's conduct.

The Plaintiff, M/s R.K. Bararia, and the Defendant, Nandi Infratech Private Limited, entered into a Construction Contract on January 31, 2015, for multi-storeyed flats for the "Amaatra Homes" project, initially for 8 towers (B, C, D, E, F, G, H & I), with 2 additional towers (A and J) added later.

The Plaintiff filed a suit seeking recovery of Rs. 10,32,54,740/- with 18% interest, alleging wrongful termination by the Defendant.

The Defendant filed a cross-suit (CS (OS) No. 160/2018) claiming the Plaintiff was overpaid by Rs. 2,58,00,000/- and seeking Rs. 8,59,00,000/- in liquidated damages for project delays.

On April 9, 2019, the Court directed that any transfer of flats in Towers A and J by the Defendant would be subject to further Court orders, allowing the Defendant to deal with these flats after informing prospective buyers.

This order was modified on July 5, 2019, allowing the Defendant to deal with remaining flats if Rs. 5,00,00,000/- was deposited with the Registrar General from the sale consideration of the first 6 flats (or equivalent number).

The Defendant filed I.A. 11461/2019 seeking modification of the July 5, 2019 order, proposing to secure 16 flats valued over Rs. 5,00,00,000/- instead of a cash deposit.

On January 17, 2023, the Court noted the Defendant's non-compliance, arising from a contempt petition (CCP (O) 74/2019), and directed an affidavit detailing sales in Towers A and J after April 9, 2019.

The Defendant's March 1, 2023 affidavit stated 29 flats in Tower A and 28 in Tower J were sold post-July 5, 2019, realizing Rs. 29,93,27,014/-, and that it could not comply with the deposit, preferring modification for 16 secured flats.

A May 9, 2023 affidavit indicated 17 unsold flats and an offer to secure 12 flats thereof, valued at approximately Rs. 5 crores at increased market rates.

The Rs. 5,00,00,000/- was eventually deposited by the Defendant in two tranches on February 15, 2024 (Rs. 2,00,00,000/-) and May 10, 2024 (Rs. 3,00,00,000/-), approximately 4-5 years after the initial order.

Whether an interim injunction against the Defendant's property, or an order for attachment before judgment, is permissible in a suit for recovery of money, particularly when the Plaintiff has invoked Order XXXIX, Rules 1 and 2 of CPC, but the conditions under Order XXXVIII, Rule 5 of CPC for attachment before judgment are relevant?

Whether the interim orders dated April 9, 2019, and July 5, 2019, passed by the Court, requiring the Defendant to secure the Plaintiff's claim, were passed without jurisdiction and should be vacated or modified?

Whether the conduct of the Defendant in delaying the deposit of the ordered amount warrants modification or vacation of the interim orders?

Order XXXIX, Rules 1 and 2 of the Civil Procedure Code (CPC) concerning temporary injunctions, which typically apply to property that is the subject matter of the suit and is endangered of being wasted, damaged, or alienated, or where there is a threat of fraudulent disposition to obstruct execution of a decree.

Order XXXVIII, Rule 5 of the CPC, which permits attachment before judgment in money suits if the plaintiff satisfies the court that the defendant intends to dispose of or remove property with the aim of obstructing or delaying the decree's execution.

Raman Tech. & Process Engg. Co. And Another v. Solanki Traders (2008) 2 SCC 302, which emphasizes that Order XXXVIII Rule 5 is a drastic power to be used sparingly, not to convert unsecured debt into secured debt, and requires proof of bona fide claim and intent to obstruct or delay execution.

Premraj Mundra v. Md. Maneck Gazi & Ors. (1951) SCC OnLine Cal 20, which outlines guiding principles for exercising powers under Order XXXVIII Rule 5, emphasizing that mere selling of property is insufficient; additional circumstances must show an intention to defraud or delay.

The Court noted that while the Plaintiff initially sought relief under Order XXXIX, Rules 1 and 2, which typically applies to property directly at issue in a suit, the Defendant's offer to deposit Rs. 5,00,00,000/- to secure the decree effectively addressed the principle of Order XXXVIII, Rule 5, which concerns securing money decrees.

The core of the analysis revolved around the Defendant's failure to comply with the Court's order dated July 5, 2019, for several years, with the deposit only made in 2024, four years after the 2019 order.

This conduct, the Court reasoned, satisfied the conditions under Order XXXVIII, Rule 5, as it indicated a potential intention to utilize the only apparent asset (sale of flats) from which a decree could be satisfied, thereby risking a "paper decree" for the Plaintiff.

The Court rejected the Defendant's argument that the initial order was without jurisdiction, stating that the Defendant's conduct in delaying the deposit made the question of initial jurisdiction under Order XXXIX Rules 1 and 2 "pale into insignificance."

The Defendant's assertion of solvency with high income figures lacked verifiable material and contradicted its failure to comply with its own undertaking.

The Court concluded that the Defendant's conduct, particularly the long delay in depositing the funds, demonstrated a lack of confidence and justified maintaining the existing orders.

The Court found that the Defendant's conduct in delaying the deposit of Rs. 5,00,00,000/-, as offered and ordered, satisfied the conditions under Order XXXVIII, Rule 5, even though the Plaintiff initially invoked Order XXXIX, Rules 1 and 2.

The Court emphasized that if the flats were sold without the money being secured, the Plaintiff might only end up with a paper decree.

Therefore, the applications (I.A. 4623/2019, I.A. 8900/2019, I.A. 11461/2019) were disposed of, effectively maintaining the existing orders which required securing the Plaintiff's claim.

The main suit (CS(COMM) 166/2019) and other applications were listed for hearing on August 11, 2026.