M/S. Elstone Tea Estates Limited Kalpetta Rep. By Its Managing Director, K.M. Moideenkunhi & Another Versus Pius. C. Mundadan & Others

For the Appellants: Varghese C. Kuriakose, J. Amritha, Advocates. For the Respondents: Dinesh R. Shenoy, Shanthipriya D. Shenoy, Mohamed Shali Namshad, Ananda Subramaniam, A. Anjana, Advocates.

1. Defendants 1 to 4 in O.S.No.133 of 2013 on the files of the Sub Court, Ernakulam, have filed this appeal aggrieved by the order dated 29.10.2025 in I.A.No.9 of 2025. The 1st respondent herein filed the I.A. under Order 38 Rule 5 of the Code of Civil Procedure to direct the defendants to appear and show cause why they shall not be called upon to furnish security for an amount of Rs.38,40,000/- towards the monetary claim raised in the suit, court fee etc. and also to issue an interim order of conditional attachment for the said amount lying in the account of the 1st defendant maintained with Indian Bank, Kalpetta Branch. The respondents filed counter and resisted the application. The learned Sub Judge heard the parties and allowed the I.A by the impugned order. The defendants have been directed to provide security within one month from the date of the order or to show cause why the same shall not be furnished. An order of conditional attachment was also issued as prayed for.

2. Heard the learned counsel for the appellants and the learned counsel for the 1st respondent.

3. Learned counsel for the appellant assailed the impugned order by raising various contentions. He submitted that in the suit originally there was an attachment granted in I.A.No.1012 of 2013. He submitted that the suit was decreed exparte. Application for setting aside the exparte decree was rejected by the Trial Court. Challenge against the same was repelled by this Court. Finally, the appellants got relief in SLP No.15592 of 2022 from the Apex Court. The Hon’ble Supreme Court set aside the exparte decree subject to payment of cost to the 1st respondent. The learned counsel hence submitted that the attachment ordered in I.A.No.1012 of 2013 is sufficient to protect the interest of the 1st respondent. He submitted that excessive attachments cannot be justified and the impugned order amounts to excessive attachment. The learned counsel further submitted that the 1st respondent, in the plaint averments, has stated that the 1st appellant Company owns vast extents of properties. To the contrary, the 1st respondent adopted a contention in I.A.No.9 of 2025 that the amount available in the account sought to be attached was the only available asset of the appellant Company. The learned counsel further submitted that the basic requirement of an application for attachment is that the property sought to be attached shall be the property of the defendant/debtor. In the case at hand the amount sought to be attached was obtained by furnishing bond as directed by the Division Bench of this Court as the Government has filed suit against the 1st appellant Company disputing its title over the estates. The Government acquired a portion of an estate of the Company for rehabilitation of sufferers of a land slide and the compensation was released as directed by this Court. The appellant – Company has furnished bond for repayment of the amount to the Government in case the suit being decreed in favour of the Government. These aspects have been pleaded by the 1st respondent himself before the Trial Court. The learned counsel for the appellant hence submitted that the amount sought to be attached was even according to the case of the 1st respondent, not a property absolutely vested with the 1st appellant Company. In such a situation granting of attachment was not justified.

4. The learned counsel for the appellant also submitted that if the 1st respondent has a case that the amount available in the account of the 1st appellant Company is absolutely a property of the Company without any encumbrances, then the landed assets of the Company should also be considered as free from any disputes and claims. In such an event, there is absolutely no necessity to attach the amount available in the account as the Company has sufficient assets to satisfy the plaint claim. Therefore, the learned counsel contended that in any view of the matter attachment of the amount available in the account of the appellant Company was not justified.

5. The learned counsel for the appellant highlighted the perceived inconsistencies in the pleadings of the 1st respondent. He submitted that I.A.No.9 of 2025 was filed undaunted with the dismissal of a previous interim application filed for directing the appellants to furnish security. He submitted that the attempt of the 1st respondent is to trouble the appellants by securing an attachment at any cost. He hence submitted that the impugned order be set aside.

6. In reply to the contention of the 1st respondent regarding maintainability of the appeal, the learned counsel submitted that the appeal has been filed under Order 43 Rule 1(Q) of the Code of Civil Procedure. He asserted that the appeal is perfectly maintainable as the learned Sub Judge has passed an order of conditional attachment also. The learned counsel relied on the following judgments to contend that the appeal is maintainable:

                  (1)      Sadasivan K. v. Surendradas [2020(5)KHC 461]

                  (2)      Mathukutty Mathew v. Sunny and Others [2015 KHC 114]

7. The learned counsel for the 1st respondent opened his arguments by submitting that this appeal is not maintainable as the order impugned has been passed under Order 38 Rule 5 of the Code of Civil Procedure. He contended that an appeal under Order 43 Rule 1 of the CPC would not lie against an order passed under Order 38 Rule 5 of the CPC. He further submitted that though the 1st respondent is disputing the maintainability of the appeal, without any hesitation the 1st respondent is prepared to defend this appeal on merits too.

8. The learned counsel refuted the submissions of the learned counsel for the appellant regarding excessive attachments. He pointed out that the order of attachment dated 02.08.2014 in I.A.No.1012 of 2013 did not fructify for the reason that the property attached in the said I.A. could not be identified and it was reported by the Amin that the same was a reserved forest. He pointed out that a report to the effect that the property was not attached was submitted by the Amin attached to the District Court, Kalpetta on 21.08.2013. Therefore, the learned counsel contended that there was no attachment in force as contended by the appellants. He also pointed out that in view of the order passed by the Hon’ble Supreme Court in SLP No.15592 of 2022 setting aside the exparte decree, the E.P. was dismissed. Hence the attachment granted by the Execution Court also ceased to be in effect. Therefore, the learned counsel submitted that the 1st respondent was perfectly justified in seeking furnishing of security and attachment to secure the plaint claims.

9. In reply to the contention of the learned counsel for the appellant that that amount available in the account of the 1st appellant Company was released to it on furnishing bonds, subject to the claims of the Government, the learned counsel for the 1st respondent made reference to the order dated 27.08.2025 in W.A.No.229 of 2025. He pointed out that the Division Bench, while directing the Registry to release Rs.24 Crores to the account of the 1st appellant observed in the order that any 3rd party who is entitled to raise any claim against the appellant Company shall be free to invoke appropriate legal mechanisms even for attaching or for recovering the amount transferred to the appellant. He hence submitted that in view of the observations made by the Division Bench, the 1st respondent or any other 3rd party was free to seek attachment of the amount available in the account of the 1st appellant Company.

10. With respect to the contention of the appellants that the 1st respondent adopted inconsistent pleas and sought furnishing of security and conditional attachment even after another application for furnishing security was rejected by the Trial Court, the learned counsel submitted that the 1st respondent filed I.A.No.9 of 2025 on coming to know that sufficient fund is available in the account of the appellant Company as the amount deposited by the Government in connection with the acquisition was transferred to its account pursuant to the order passed by the Division Bench in W.A.No.229 of 2025. He submitted that it is well within the authority of the Trial Court to pass appropriate orders under Order 38 Rule 5 of the CPC at any stage of the proceedings to secure the plaint claims. He hence contended that there was no bar in filing another interim application and granting of the reliefs by the Trial Court. He also submitted that in view of the suit filed by the Government challenging the title of the 1st appellant Company, to secure the interest of the 1st respondent/ plaintiff, it is necessary to direct the appellants to furnish security and to attach the amount available in their account. Further it was contended that in the previous interim application there was no prayer for attachment. It was also argued that the crucial averments in the affidavit filed in support of the interim application were not refuted by the appellants.

11. Regarding the contention with respect to maintainability of the appeal canvased by the 1st respondent it is to be noted that by the impugned order the appellants have not only been called upon to furnish security but the Trial Court has granted the relief of attachment also. In the nature of the reliefs granted and also in view of the judgment in Mathukutty Mathew (Supra) as also the judgment of the Full Bench in Sadasivan K. (Supra), I am of the view that this appeal is maintainable.

12. On merits, the prime contention raised by the appellant is regarding excessive attachments. It is trite law that excessive attachment is impermissible. According to the appellant the attachment granted originally in the suit by order dated 02.08.2014 in I.A.No.1012 of 2013 is still in force. However, perusal of the report dated 21.08.2013 of the Amin shows that the property was not attached as it could not be properly identified and also for the reason that the same was a reserved forest. No other order was thereafter passed in the I.A.. Hence the contention that the attachment ordered in I.A.No.1012 of 2013 is still in force cannot be accepted. It is also to be noted that the execution proceedings got closed as the exparte decree was set aside by the Hon’ble Supreme Court. Therefore attachment, if any, granted by the Execution Court also ceased to be in force.

13. Another major contention raised by the appellants is that the amount available in the account of the 1st appellant Company was released to it on execution of bond in view of the title dispute raised by the Government. It was therefore contended that the basic condition/ requirement for passing an order under Order 38 Rule 5 of the CPC was not satisfied. I am of the view that the said argument also cannot be accepted in view of the order of the Division Bench dated 27.08.2025 in W.A.No.229 of 2025. The relevant observation of the Division Bench reads as under:

                  “If any third party, who is entitled to raise any claim against the appellant company, shall be free to invoke appropriate legal mechanisms, even for attaching or for recovering the amount transferred to the appellant.”

14. It is to be noted that the amount was released to the 1st appellant pursuant to orders passed by the Division Bench of this Court. When the Division Bench made it clear that the third parties can proceed against the appellant with respect to their claims by resorting to appropriate legal actions including attachment, the submissions of the appellants cannot be countenanced.

15. Regarding the contention that the 1st appellant Company has vast landed properties and therefore there is no necessity to secure the interest of the 1st respondent/plaintiff by attaching the amount available in the account, I find merit in the contention of the 1st respondent that in view of the suit filed by the Government, there is cloud on the title of the 1st appellant over its estates. Hence it cannot be said that the 1st respondent was not justified in seeking to secure his claims by attachment of the amount available in the account of the appellant Company.

16. In view of the foregoing discussions, I do not find any reason to interfere with the impugned order.

                  The FAO is therefore dismissed. No costs.