MUSTAFA ABDEL HAMID ABUL IZZ v. GABIR ABDEL HAMID ABUL IZZ
(COURT OF APPEAL)
MUSTAFA ABDEL HAMID ABUL IZZ v. GABIR ABDEL HAMID ABUL IZZ
AC-REV-669-1969
Principles
Civil Procedure—Provisional attachment before judgment—Civil Justice Ordinance, s. 135 are fourteen guiding principles to be considered by the court
The fourteen guiding principles embodied in this judgment should be borne in mind by every court whenever considering an application for attachment before judgment under Civil Justice Ordinance, S. 135.
Advocates: Mohamed Ibrahim Khalil for the applicant
A. M. Abdel Wahab for the respondent
Judgment
Salah Eddin Hassan J. December 31, 1969:- This is an application for revision submitted by advocate Mohamed Ibrahim Khalil on behalf of
Mustafa Abdel Hamid Abul Izz, defendant, in HC-CS-26-1 The application is basically against the following orders:
(a) The order passed by His Honour the Province Judge on September 13, 1969, whereby he ordered that plaintiff be summoned to give evidence with respect to his application for provisional attachment.
(b) The ex parte order passed by His Honour the Province Judge on August 4, whereby he cancelled a previous order passed by his predecessor discharging an order of provisional attachment of certain property of defendant.
The grounds of the application are briefly as follows:
1. The Province Judge has no jurisdiction to cancel the order embodied in the letter sent by his predecessor discharging the order of attachment.
2. Even forgetting about the letter of discharge that order came to an end when his learned predecessor returned the plaint to be amended under the Civil Justice Ordinance, s.55 (2).
The learned counsel for applicant raised another alternative ground that in case His Honour the Province Judge purported to pass a fresh order of attachment on plaintiff’s application of July 30, His Honour was wrong for the following reasons:
i. The application contained no more than vague allegations not capable of satisfying the court that defendant was disposing of his property with intent to obstruct or delay the execution of any decree that may be passed against him: Christos Symos v. Yousif Naoum Gangi (1961) S.L.J.R. 163 and II Mulla, Code of Civil Procedure (13th ed., 1967), p. 1502.
ii. When His Honour passed this order he was not satisfied by affidavit or otherwise and that this borne out by the fact that on September 13 he summoned plaintiff to be examined with regard to the application. He should either refuse to grant the order or summon plaintiff to be examined and to give further evidence to enable the court to decide whether to grant the order or not.
The respondent represented by advocate Abdel Wahab made a sweeping general reply that the court is empowered to reimpose the order of attachment after the plaint has been amended and that on the record of the proceedings there is no order canceling the original order of provisional attachment.
When the case was argued in the Court of Appeal advocate Abdalla El Daw on behalf of respondent added that the whole application relies on procedural grounds and that the ends of justice should not be sacrificed for mere technical rules.
Before embarking on the decision it is useful to summarize the progress of this litigation:
1. Action was allowed in HC-CS-26-1969 on March 13, 1969.
2. On same day an application for provisional attachment was submitted supported by an affidavit saying:
“Defendant intends to dispose of his property with the intention of obstructing the execution of any decree that may be passed against him."
The court passed an order of immediate attachment in respect of defendant’s shares in the Rainbow Factory, his house No. 8 block 9 K.F. in Khartoum, and also his accounts in Sudan Commercial Bank, Nilein, Barclays and Ottoman Bank were blocked.
The court fixed April i for defendant to appear and submit his objections if any.
The defendant was alarmed when he knew of this action and he rushed to the court assisted by more than one advocate.
On March 29, 1969 the learned Province Judge was engaged in another case and upon being pressed by the defendant in the matter of blocking all his accounts he referred the matter to me to hear the objections in respect of that point, and as a result I released the order blocking the accounts of defendant and left the rest of the application for the Province Judge to deal with.
According to the record no order releasing the attachment before judgment was made by Judge Dafalla but in the correspondence there were letters, one dated April 17, 1969 and another dated April 21, 1969, ordering the release of the attachment.
On August 4, Judge Mohamed Ahmed Abdel Rahman, the successor of Judge Dafalla, ruled that his predecessor must have signed the letters of release of attachment without reading them; and apparently considering it a matter manifestly the result of oversight he cancelled it and reimposed the attachment and then fixed a day for the examination of the plaintiff. Hence the present application.
I do agree with the learned counsel for applicants that these proceedings look rather curious.
The letters dated April 17 and 21 canceling the attachment without any indication in the record as to when or why it was made are confusing and must be held to be wrong or otherwise the record would be a useless and meaningless instrument and one may venture to say further that if such letters are sustained by this Court this will lead to considerable uncertainties, miscarriage of justice and curious situations. Moreover, the order of his successor canceling the effect of these letters on the ground that they were signed by his predecessor without reading them is clearly wrong. The Civil Justice Ordinance, s. 184, is very clear in this respect. The Province Judge cannot review any decree or order passed by him or by another Province Judge without obtaining leave to review except for the purpose of correcting a clerical error or other error manifestly the result of an oversight. We feel that the Province Judge acted on the assumption that the signature of the letters was the result of oversight but with due respect we are unable to agree with him as to the conclusion that his predecessor signed the letters without reading them. In fact the presumption—and it is a strong one—is that he must have read them. Accordingly we do not see any question of oversight in this matter.
For the above reasons we decided to ignore the letters dated April 17 and 21 as if they never existed and at the same time we decided to set aside the last order of the Province Judge dated August 4, for the reasons stated above and also in the light of our present decision it is redundant because there is nothing to reimpose as the order of immediate attachment dated April 13 as a matter of legal fiction still exists.
After this analysis we are faced with a curious situation but it is our duty to go ahead and decide the whole question.
The ultimate object of this application is to set aside the attachment before judgment, and accordingly it is the point of substance which it is our duty to adjudicate upon, and it is a golden chance for this court to clarify the law in respect of applications for attachment before judgment.
The relevant section of the law is the Civil Justice Ordinance, s. 135, which is identical to the Indian Code of Criminal Procedure, s. 483.
Both sections provide for the furnishing of security in order to ensure the satisfaction of any decree that may be passed in the case. The order that is contemplated by this rule is not an unconditional one directing attachment of property, but one calling upon the defendant to furnish security or to show cause why security should not be furnished. Two relevant decisions in point are the case Christos Symos v. Yousif Naoum Gangi (1961) S.L.J.R. 163 and the Indian case namely Premarj Mundra v. Mohamed Maneck Gazi (1951) A.I.R., Assam Calcutta, pp. 157—158.
Christos Symos was decided by the present Chief Justice who was Province Judge, Khartoum Circuit, in 1960. In that case the District Judge passed an order of immediate attachment instead of serving respondents with notice to appear and furnish security. The learned Province Judge as he then was said:
“Civil Justice Ordinance, s. 135, is in essence providing for furnishing of security in order to ensure the satisfaction of any decree that may be passed in the case. So it must be the first process that the court must have in mind. In an ordinary case it is right and just and it is also good practice that the defendant should first be served with notice to furnish security or to appear and show cause why he should not do so. The practice will lead to the fair hearing of the matter and for its disposal once and for all. In special cases, and where the circumstances warrant it, the order of immediate attachment may be made if the court, in the exercise of its judicial discretion, thinks it necessary on the facts before it for the protection of the interests of the plaintiff. In subsection (3) there is no mention of special circumstances, but in interpreting the section one feels that an order of immediate attachment should be made after being convinced that the application of subsections (1) and (2) may cause injustice to the applicant. So the normal procedure is to call upon respondent to furnish security and if he fails then an order of attachment is to be made under Civil Justice Ordinance, s. 136. The logical inference is that the alternative procedure of immediate attachment should only be adopted in special circumstances."
In the case of Premraj Mundra v. Mohamed Maneck mentioned earlier Mr. Justice Sinha, after citing a lot of cases, in his judgment set out 14 guiding principles respecting application for attachment before judgment:
1. That an order under the Civil Justice Ordinance, S. 135,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.
3. That the court would not be justified in issuing an order for attachment before judgment, or for security, merely because it thinks that no harm would he done thereby or that the defendants would not be prejudiced.
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 defendant was selling off his properties is not sufficient. Particulars must be stated.
6. There is no rule that transactions before suit cannot be taken into consideration, but the object of attachment before judgment must be to prevent future transfer or alienation.
7. Where only a small portion of the property belonging to the defendant is being disposed of, no inference can be drawn in the absence of other circumstances that the alienation is necessarily to defraud or delay the plaintiff’s claim.
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 plaintiff’s claim. It is open to the court to look to the conduct of the parties immediately before suit, and to examine the surrounding circum stances, and to draw an inference as to whether the defendant 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.
9. The fact that the defendant is in insolvent circumstances, or in acute financial embarrassment, is a relevant circumstance but not by itself sufficient.
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.
11. Where however the defendant starts disposing of his properties one by one, immediately upon getting a notice of the plaintiff’s claim and/or where he had transferred the major portion of his properties shortly prior to the institution of the suit and was in an embarrassed financial condition, these were grounds from which an inference could be legitimately drawn that the object of the defendant was to delay and defeat the plaintiffs’ claim.
12. Mere removal of properties outside the jurisdiction is not enough; but where the defendant with notice of the plaintiff’s claim, suddenly begins removal of his properties outside the jurisdiction of the appropriate court, and without any other satisfactory reason, an adverse inference may be drawn against the defendant. Where the removal is to a foreign country the inference is greatly strengthened.
13. The defendant in a suit is under no liability to take any special care in administering his affairs simply because there is a claim pending against him. Mere neglect, or suffering execution by other creditors, is not a sufficient reason for an order under the Civil Justice Ordinance S. 135.
14. The sale of properties at a gross undervalue, or benami transfers, are always good indications of an intention to defeat the plaintiff’s claim. The court must however be very cautious about the evidence on these points and not rely on vague allegations.
These guiding principles, embodied in these two cases, should be borne in mind by every court whenever considering an application for attachment before judgment under the Civil Justice Ordinance, s. 135.
Upon a survey of the application submitted on April 13 and in the light of the guiding principles enumerated above, we believe that no special case has been made out to justify an order of immediate attachment and
we accordingly hereby set it aside. At the same time we are of opinion that the court, when considering the application under section 135 (1) and (2), neither satisfied itself nor gave chance to applicant to substantiate his case as to the necessity of summoning defendant to give security or show cause why it should not be given. This is left open to the court below to reconsider on the light of the guiding principles set out in this judgment.
Costs of this revision to be borne by respondent.
Ramadan All Mohamed J. December 31, 1969:—I agree.
B. M. A. Baldo 1. December 31, 1969:—I agree I have nothing much to add to this elaborate judgment, but my support. The order of attachment is defective, and it should not stand. It is clear that the lower court failed to adopt the proper procedure. The learned Judge has not satisfied himself of whether the application for attachment is bona fide. The applicant-defendant was not asked to furnish security, nor examined to show cause why the order of attachment should not be made. The circumstances of the case do not warrant the application of the procedure of immediate attachment.