Delhi HC Sets Aside ₹15 Lakh Security For Guest-House Guest, Saying Maharashtra Residence Alone Didn’t Show Plans To Move Assets To Defeat A Decree

The respondent sued to recover ₹17,47,110, with interest, for unpaid guest-house charges.

The petitioner disputed the liability and asserted that he had paid approximately ₹28,00,000.

The respondent applied under Order XXXVIII Rule 5 read with Section 151 of the Code of Civil Procedure, 1908 (CPC), alleging that the petitioner might dispose of or remove assets to frustrate execution.

The Trial Court directed the petitioner to furnish security of ₹15,00,000, relying on the prima facie nature of the claim, the petitioner’s allegedly evasive denials, and his residence in Maharashtra.

The petitioner challenged that order under Article 227 of the Constitution

Order XXXVIII Rule 5 CPC permits attachment before judgment or a direction to furnish security only where the Court is satisfied, on specific and substantiated facts, that the defendant is about to dispose of or remove property with the intent to obstruct or delay execution of a decree; the power is drastic and extraordinary and must be exercised sparingly.

A prima facie claim or a general apprehension that a decree may go unsatisfied is insufficient.

The Court relied on *Raman Tech. & Process Engg. Co. v. Solanki Traders*, (2008) 2 SCC 302, and *KCV Airways Ltd. v. Wg. Cdr. R.K. Blaggana*, 1997 SCC OnLine Del 453, on the need to establish the statutory conditions

It also considered *Premraj Mundra v. Md. Maneck Gazi*, AIR 1951 Cal 156, cited by the petitioner, and *Rahul S. Shah v. Jinendra Kumar Gandhi*, (2021) 6 SCC 418, cited by the respondent; the latter did not warrant security on the facts here

The respondent’s application identified no specific act of alienation, proposed transfer, removal of assets, or other conduct from which an intention to frustrate execution could reasonably be inferred.

The Trial Court’s reliance on the petitioner’s residence in Maharashtra and allegedly evasive pleadings did not establish that statutory intent; residence outside the jurisdiction, by itself, is not evidence of an attempt to defeat execution.

The petitioner’s participation in the proceedings further undermined the asserted inference that he would evade the Court’s process.

Nor could the alleged departure from the guest house without payment, even if established, alone demonstrate an intention to dispose of or remove assets to obstruct execution.

The respondent’s prima facie claim and the petitioner’s disputed defences could not substitute for the required evidence of intended conduct concerning property.

It allowed the petition and set aside the order directing the petitioner to furnish ₹15,00,000 as security, clarifying that its observations would not prejudice the adjudication of the parties’ claims and defences in the pending suit.