Arrest and Attachment Before Judgment (Order XXXVIII)

Order XXXVIII of the Code of Civil Procedure, 1908 contains the supplemental procedure by which a court, before passing a decree, may either arrest the defendant and require him to furnish security for his appearance, or attach his property and require him to furnish security for its production. The purpose, in both cases, is to prevent any decree that may eventually be passed from being rendered infructuous by the defendant absconding, removing himself from the jurisdiction, or putting his property out of reach. Order XXI deals with arrest and attachment in execution; Order XXXVIII deals with the same two coercive measures before the decree is passed at all.

Because the orders interfere with the defendant’s liberty and his right to deal with his property before any liability has been adjudicated, the powers under Order XXXVIII are described in the decisional law as drastic and to be exercised sparingly. The Supreme Court and the High Courts have repeatedly emphasised that an order under Rule 1 or Rule 5 is not to be made on the mere asking of the plaintiff: the court must be satisfied, on affidavit or otherwise, that the precise statutory grounds exist, and the order itself must record that satisfaction.

Statutory anchor and scheme

Order XXXVIII contains thirteen rules in two parts. Rules 1 to 4 govern arrest before judgment. Rule 1 fixes the grounds on which the court may issue a warrant of arrest. Rule 2 deals with security after the arrested defendant fails to show cause. Rule 3 supplies the procedure on a surety’s application to be discharged. Rule 4 caps detention in civil prison.

Rules 5 to 11A govern attachment before judgment. Rule 5 fixes the grounds on which the defendant may be called upon to furnish security for production of property and to show cause against attachment. Rule 6 supplies the consequence of failure to show cause or to furnish security. Rule 7 imports the mode of attachment from Order XXI. Rule 8 governs adjudication of third-party claims. Rule 9 governs withdrawal of attachment when security is furnished or the suit is dismissed. Rule 10 protects the rights of strangers. Rule 11 dispenses with re-attachment after decree, and Rule 11A — inserted in 1976 — settles the conflict on revival of attachment after restoration of a suit dismissed for default. Rules 12 and 13 are restrictive: agricultural produce in the possession of an agriculturist cannot be attached before judgment, and a Court of Small Causes cannot attach immovable property at all.

Arrest before judgment — Rule 1

Rule 1 empowers the court, at any stage of a suit other than one of the kinds specified in clauses (a) to (d) of Section 16 (suits relating to immovable property situated outside the jurisdiction), to issue a warrant of arrest where it is satisfied, by affidavit or otherwise, on either of two limbs.

The first limb is itself in three forms. The defendant, with intent to delay the plaintiff, to avoid any process of the court, or to obstruct or delay execution of any decree that may be passed against him, must have absconded or left the local limits of the court’s jurisdiction; or be about to abscond or so leave; or have disposed of or removed his property — or any part of it — from the local limits. The intent element is essential. Mere transfer of property, or even ordinary travel, will not suffice.

The second limb operates without proof of intent. Where the defendant is about to leave India under circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree, the court may issue a warrant. The Supreme Court has held that the court must be satisfied on two further matters: that the plaintiff has a cause of action which is prima facie unimpeachable, subject to proof of the allegations in his plaint; and that there is real danger, on adequate material, that the defendant will remove himself from the ambit of the court’s powers.

The defendant arrested under Rule 1 is brought before the court to show cause why he should not furnish security for his appearance. The proviso to Rule 1 supplies a release valve: if the defendant pays to the executing officer any sum specified in the warrant as sufficient to satisfy the plaintiff’s claim, he is not arrested. The deposited amount is held by the court until the suit is disposed of or until further order.

Security, surety and civil prison — Rules 2 to 4

Where the defendant fails to show cause, Rule 2(1) empowers the court to order him either to deposit money or property sufficient to answer the claim, or to furnish security for his appearance whenever called for during the pendency of the suit and until satisfaction of any decree, or to make such order as it thinks fit regarding any sum already paid under the proviso to Rule 1. Sub-rule (2) makes every surety liable, in default of the defendant’s appearance, for any sum the defendant may be ordered to pay. The deposited amount is charged with a lien in favour of the plaintiff once a decree is obtained, and the plaintiff has priority over an Official Receiver in the defendant’s insolvency.

Rule 3 governs the surety’s application to be discharged. The court summons the defendant — or, if it thinks fit, issues a warrant for his arrest in the first instance — and on his appearance directs the surety’s discharge and calls upon the defendant for fresh security. Rule 4 supplies the sanction for failure to comply with an order under Rule 2 or Rule 3: civil prison, until the decision of the suit, or, where a decree is passed against the defendant, until the decree is satisfied. Two provisos cap the detention. No person shall be detained for longer than six months in any case, nor for longer than six weeks where the subject-matter of the suit does not exceed fifty rupees. And no person shall be detained after he has complied with the order.

Attachment before judgment — Rule 5

Rule 5(1) empowers the court, at any stage of a suit, where it is satisfied by affidavit or otherwise that the defendant — with intent to obstruct or delay the execution of any decree that may be passed — is about to dispose of the whole or any part of his property, or to remove the whole or any part of his property from the local limits of the jurisdiction, to direct the defendant either to furnish security to produce the property when required, or to appear and show cause why he should not furnish such security. Sub-rule (2) requires the plaintiff, unless the court directs otherwise, to specify the property to be attached and its estimated value.

Sub-rule (3) confers a parallel discretion on the court to order conditional attachment of the whole or any portion of the specified property along with the show-cause notice. Conditional attachment is the device that prevents the defendant from defeating the very purpose of the proceeding by alienating the property between the issue of the show-cause notice and the date fixed for hearing.

Sub-rule (4) is a strict invalidation clause inserted in 1976. If an order of attachment is made without complying with sub-rule (1), the attachment is void. The Supreme Court has read sub-rule (4) together with sub-rule (1) to require that the defendant be called upon to furnish security before any attachment is ordered, save where conditional attachment under sub-rule (3) is contemporaneously issued with a show-cause notice. An order which does not record the court’s satisfaction in terms of Rule 5(1) is not a Rule 5 order at all.

Twelve principles governing attachment

The High Courts have, over time, distilled the controlling principles for an order of attachment before judgment. They are as follows. The requisite circumstances must actually exist and must be proved as facts. Strictest caution is required where the attachment would freeze an ongoing business; mere closure or diminished turnover is insufficient. The court is not justified in attaching merely because it assumes no harm would be done. A bare allegation that the defendant is selling property is not enough — particulars must be stated. The mere fact of transfer, without something more, is not fraudulent. Affidavits in support must not be vague and must be properly verified. The defendant is under no duty to take special care of his affairs because a suit is pending. Disposal of a small portion of a large estate raises no inference. Pre-suit transactions are not irrelevant, but the object of the order is to prevent future alienation. Insolvent circumstances are relevant but not by themselves sufficient. Sale at gross undervalue or benami transfers are good indicators of fraudulent intent. Mere removal of property outside the jurisdiction is not enough; sudden removal after notice of the plaintiff’s claim, especially abroad, supports a strong inference.

The court must, before exercising the power, also be satisfied that there is a reasonable chance of a decree being passed in the suit. A prima facie case alone is not enough; the plaintiff must establish that the defendant is attempting to remove or dispose of his assets with the intent to defeat any decree. Where the defendant denies the allegation and undertakes not to leave the jurisdiction, an order requiring third-party security is improper.

Attachment, withdrawal and mode of effecting it — Rules 6 to 9

Where the defendant fails to show cause or to furnish the required security within the time fixed, Rule 6(1) empowers the court to order that the property specified in Rule 5(2) — or so much of it as is sufficient to satisfy any decree that may be passed — be attached. Rule 6(2) is the mirror provision: where the defendant shows cause or furnishes the required security and the property has been attached, the court must order the attachment to be withdrawn or make such other order as it thinks fit. The property dealt with under Rule 6 is only the property specified in the Rule 5 application.

Rule 7 dispenses with a separate code for the mode of attachment. The attachment is made in the manner provided for attachment in execution of a decree, which means that the prohibitory order under Order XXI Rule 54 governs immovable property and the corresponding rules govern movables. The mere passing of an order of attachment is not enough — the order must be published as required, and an attachment is not effective against a transferee under Section 64 until it has actually been effected on the ground.

Rule 8 imports the third-party-claim machinery: any claim to property attached before judgment is adjudicated in the same manner as a claim to property attached in execution under Order XXI Rule 58. The court that effected the attachment is not the one that adjudicates the claim; that is the court which directed the attachment. Rule 9 supplies two grounds for withdrawal of the attachment — the defendant’s furnishing of the required security together with security for the costs of the attachment, or the dismissal of the suit. The latter ground is in form directory: an attachment falls to the ground when the suit is dismissed or abates, even where no formal order of withdrawal has been passed.

Effect on strangers and on execution — Rules 10, 11, 11A

Rule 10 makes two negative declarations. An attachment before judgment does not affect the rights, existing prior to the attachment, of persons not parties to the suit; and it does not bar a decree-holder against the defendant from applying for sale of the attached property in execution of his decree. The Patna High Court has held that where an agreement of sale was executed before the attachment, the right thereby created in the purchaser survives, and a subsequent court sale of the attached property in violation of that pre-existing right is invalid. The principle of Section 64 — that any private transfer of attached property contrary to the attachment is void as against claims enforceable under the attachment — applies equally to an attachment before judgment, but only if a decree is ultimately passed for the plaintiff at whose instance the attachment was made.

Rule 11 makes re-attachment unnecessary. Where property has been attached under Order XXXVIII and a decree is subsequently passed in favour of the plaintiff, no fresh attachment is required to execute the decree against that property. The plaintiff must still file a regular execution application under Order XXI Rule 11(2); what Rule 11 does is dispense with the additional step of attachment.

Rule 11A, inserted in 1976, settles a conflict that had run for decades. The provisions of the Code applicable to an attachment in execution apply, so far as may be, to an attachment before judgment which continues after judgment by virtue of Rule 11. The Supreme Court in Sardar Govindrao Mahadik v. Devi Sahai held that an attachment before judgment is a guarantee against a decree being rendered infructuous, and that dismissal for default terminates the attachment. The attachment is not revived merely because the order of dismissal is subsequently set aside and the suit restored — the plaintiff must, on restoration, apply afresh.

Property the Order does not reach — Rules 12 and 13

Two restrictive rules limit the reach of the Order. Rule 12 forbids the attachment, before judgment, of agricultural produce in the possession of an agriculturist. The expression “agricultural produce” is read narrowly: it means standing crop on the field, fodder stock, or grain on the threshing floor — but not grain that has been separated from the chaff and is no longer in that form. Rule 13 declares that nothing in the Order empowers a Court of Small Causes to make an order attaching immovable property; a judge who exercises both civil-court and Small Cause jurisdictions cannot attach immovable property in execution of a Small Cause decree without first transferring the case to himself in his civil-court capacity.

Procedural overlay and connected provisions

An order under Rule 1 calling upon the defendant to show cause is not appealable; only the final order of attachment under Rule 5 (or the corresponding final order of arrest) is appealable. Where conditional attachment under Rule 5(3) has been made and the court subsequently refuses to confirm it, an appeal lies; otherwise an order refusing attachment is not appealable. Revision under Section 115 may lie where there is a jurisdictional error, but not as a substitute for appeal. Where the property to be attached is situated outside the local limits of the court’s jurisdiction, the proper course is to transmit the order to the court within whose local limits the property is situated, following the procedure laid down in Section 136. The court cannot directly effect the attachment outside its jurisdiction.

Where an order under Rule 1 or Rule 5 is procured on insufficient grounds, the defendant is not without remedy. Section 95 empowers the court to award compensation, on the application of the defendant, where the order was applied for on insufficient grounds, or the suit fails and the court is satisfied that there was no reasonable or probable ground. The compensation is in addition to the costs awarded under the decree, and is treated as a final adjudication on the question of compensation.

Order XXXVIII does not stand alone. The supplemental proceedings of Part VI — Order XXXVIII (arrest and attachment), Order XXXIX (temporary injunctions), and Order XL (receivers) — together provide the toolkit for preserving the subject-matter of the suit and the prospect of fruitful execution while the suit is being tried. The principles governing applications under Order XXXIX for temporary injunctions and under Order XL for the appointment of receivers are different in form, but each rests on the same underlying premise: the court must guard the integrity of the decree it may eventually pass. The discretion conferred by Section 151 can be invoked only to supplement, not to circumvent, the conditions in Order XXXVIII; an attachment that does not satisfy Rule 5 cannot be sustained merely on the inherent-powers footing.

MCQ angle and exam pointers

Five distinctions recur in objective papers and ought to be locked in.

1. Two routes for arrest under Rule 1. Limb (1)(a) requires intent to delay or to obstruct execution; limb (1)(b) requires only reasonable probability that the defendant’s leaving India will obstruct or delay execution.
2. Civil-prison cap under Rule 4. Six months in any case; six weeks where the subject-matter does not exceed fifty rupees; immediate release on compliance.
3. Rule 5(4) is fatal. An attachment ordered without complying with Rule 5(1) — that is, without first calling upon the defendant to show cause and to furnish security — is void, save where the contemporaneous conditional attachment under Rule 5(3) is issued together with the show-cause notice.
4. Section 64 applies, but only on a decree. A private transfer contrary to attachment is void, but only as against claims enforceable under the attachment, and only if a decree is ultimately passed for the plaintiff at whose instance the attachment was made.
5. Rule 11A and revival. Dismissal of the suit terminates the attachment; restoration of the suit does not by itself revive the attachment. The plaintiff must apply afresh.

The drastic-power doctrine, the twelve principles distilled by the High Courts on Rule 5, the void-attachment clause in sub-rule (4), and Sardar Govindrao Mahadik on revival are the authorities most likely to surface in mains-style questions on Order XXXVIII. Two further pointers are worth noting. The Supreme Court has held that the conditions in Order XXXVIII Rule 5 do not control the exercise of the wider power under Section 9(ii)(b) of the Arbitration and Conciliation Act, 1996 — a court asked to grant interim security in arbitration may apply the principles of Order XXXVIII for guidance but is not bound by its grounds. And the appealability of an order under the Order is asymmetric: an order of attachment under Rule 5 read with Rule 6 is appealable under Order XLIII Rule 1(q); an order refusing attachment, except where it follows a conditional attachment under Rule 5(3), is not.

Frequently asked questions

What is the difference between attachment before judgment and attachment in execution?

Attachment in execution is a step in execution of a decree already passed, governed by Order XXI; the property is attached because a determined liability has not been satisfied. Attachment before judgment under Order XXXVIII is a preventive supplemental order made before any decree exists; the object is to preserve the property so that, if a decree is eventually passed, the plaintiff can proceed against it. The conditions for attachment before judgment are stricter — the court must be satisfied of fraudulent intent under Rule 5(1), and a Rule 5(4) breach renders the attachment void. An attachment in execution is not liable to be lifted on furnishing security; an attachment before judgment is, under Rule 9.

Can an attachment before judgment be ordered without first calling upon the defendant to show cause?

Not as a substantive order. Rule 5(4), inserted in 1976, declares that an attachment made without complying with sub-rule (1) is void. Sub-rule (1) requires the defendant to be directed either to furnish security or to appear and show cause. The only exception is sub-rule (3): where the court is satisfied on the material before it, a conditional attachment may be issued contemporaneously with the show-cause notice — that is, both at the same time, and not as a substitute for the notice. An order which makes attachment final without going through the show-cause stage is not a Rule 5 order at all and the attachment is liable to be set aside.

Does dismissal of the suit automatically end an attachment before judgment?

Yes. Rule 9 directs that the attachment be withdrawn when the suit is dismissed, and the High Courts have read this as effectively automatic — an attachment falls to the ground when the suit is dismissed or abates, even where no formal order of withdrawal has been passed. Rule 11A, inserted in 1976, then settles the corollary: where the dismissal is subsequently set aside and the suit restored, the attachment is not automatically revived. The Supreme Court in Sardar Govindrao Mahadik v. Devi Sahai held that the plaintiff must, on restoration, apply afresh under Rule 5.

Can the rights of strangers to the suit be defeated by an attachment before judgment?

No. Rule 10 expressly preserves the rights, existing prior to the attachment, of persons who are not parties to the suit. An order under Order XXXVIII Rule 5 confers no title and no priority on the plaintiff. Where, for example, the defendant had executed an agreement for sale before the attachment, the right thereby created in the purchaser survives the attachment, and a subsequent court sale violating that pre-existing right is invalid. Similarly, where the property is the subject of a prior mortgage, the mortgagee's right of sale under the mortgage is not affected by the attachment.

What are the limits on detention in civil prison under Rule 4?

Three. The first is the six-month cap: no person shall be detained under Rule 4 in any case for a longer period than six months. The second is the small-claim cap: where the value of the subject-matter of the suit does not exceed fifty rupees, the period is six weeks. The third is the compliance bar: no person shall be detained after he has complied with the order under Rule 2 or Rule 3 — that is, after he has either deposited money or property sufficient to answer the claim, or furnished security for appearance, or, where a surety has been discharged under Rule 3, found fresh security.