1. ' SHABBIR AHMED, J.--By the impugned order dated 20-8-2001, the appellant was directed to furnish security equal an amount of Rs.50 lacs within one month from the date of order. The appeal emanates from the following facts.
2. ' The respondent filed Suit No.1117 of 2000 against the appellant for Accounts and Recovery, allegedly suffered on default of the appellants in completion of the project which was abandoned by the appellant No.1 and as consequence thereof, the respondent suffered a loss of about Rs.45 lacs. Further amount of Rs.20 lacs was also claimed as loss due to mental torture and agony to the Directors of the respondent-Company.
3. ' The respondent also filed an application under Order 38, rule 5, C.P.C. For attachment before judgment. On notice, the appellant resisted the application by filing counter-affidavit, rejoinder was also filed by the respondent.
4. ' The learned Single Judge heard the learned counsel for the parties, considered the respective contentions and passed the impugned order after recording the following conclusions:-- "The fact that the defendant has transferred the property prior to institution of suit but after the service of legal notice is evident from the material available on record and the defendant has simply denied the service of legal notice. There is nothing in rule 5 of Order XXXVIII, C.P.C. Which makes a transaction subsequent to institution of suit a condition precedent to its application. The fact that the defendant has done so after the institution of the suit may be a strong evidence of intention of the defendant. But the transfer before the institution of suit shows conduct of the defendant, which may also be evidence of the intention after the institution of suit. The intention of the defendant is to be inferred from the attending circumstances. The transfer by the defendant in favour of his wife in clandestine manner prior to institution of suit shows the conduct/intention of the defendant No.l."
5. ' Hence the present appeal.
6. ' Learned counsel for the parties have agreed and argued the case at katcha peshi stage for final disposal.
7. ' We have heard Mr. Ejaz Ahmed, learned counsel for the appellants and Mr. Abid S. Zuberi, learned counsel for the respondents and perused the record.
8. ' Learned counsel for the appellants has taken two folds contentions in support of the appeal; firstly that the learned Single Judge has erred in exercising the judicial discretion in favour of the respondent by taking notice of pre suit conduct of the appellants with regard to transfer of property by him in favour of his wife.
9. ' Secondly, that the learned Judge has erred in exercising the judicial discretion in absence of a prima facie case, i.e. In absence of merits.
10. ' Reverting to the first contention, it was contended by the learned counsel for the appellants that the conditions for exercise of jurisdiction under rule 5 of Order 38, C.P.C., are that at any stage of the suit if the Court is satisfied by affidavit or otherwise that the defendant with intent to obstruct or delay the execution of any decree that may be passed against him (a) is about to dispose of the whole or any part of the property or (b) is about to remove the whole or any part of the property from the local limits of the jurisdiction. His submission was that the conduct subsequent to the institution of the suit is a condition precedent for exercise of such jurisdiction, whereas, the learned Single Judge passed the impugned order on consideration of conduct prior to the institution of the suit, thus the learned Judge has erred in law and exercised the jurisdiction erroneously, not sustainable in law.
11. ' Elaborating his second contention, it was strenuously argued that the respondent case is meritless, with frivolous claim for an order in like nature. In support of his plea he pointed out that according to the Commissioner's report, though objected by the appellant, it is the respondent, who would be liable to pay the amount to the appellant and not the appellant, therefore, the impugned order is against the material available on record.
12. ' On the other hand, Mr. Abid S. Zuberi, learned counsel for the respondent's, contention was that the pleas raised in support of the appeal are meritless. The discretion exercised by the learned Single Judge is in line with view expressed by Division Bench of erstwhile Sindh Chief Court in Bishamberdas & Co. v. Sachoomal Kotoomal AIR 1941 Sind 178, wherein similar pleas raised were not accepted by the learned Members of the Division Bench, consisting of Davis, C.J. And Weston, J. The pleas raised were: (i) That no order in the nature of an injunction should have been issued because the suit on the face of it was bound to fail: (ii) That Order 38, rule 5, C.P.C. Required that the intent referred to had relation to something done or to be done after the institution of the suit and that in this case the sale of 9000 bundles of steel hoops by the defendant firm of J. Padam Prasad Jain & Co. Was before the institution of the suit and not after.
13. ' First plea with regard to the plaintiff case being meritless was addressed by the learned Members of the Bench with the observations:-- ' we do not see how these questions can be decided before this suit is heard, nor can we say that the plaintiff's case must so clearly fail as to make the passing of an interim order in the nature of an injunction without justification. I do not think, therefore, that this argument can be accepted.'
14. ' The second plea, that conduct subsequent to the filing of the suit is relevant and not the conduct before the suit. In support of such plea reference was made to the view expressed in Bedanand Rai v. Nabo Kumar Singh AIR 1938 Patna 161, that in order that Rules 5 and 6 should apply there must be a transaction subsequent to the filing of the suit. Above view was not accepted with following observations:-- ' with the greatest respect to the learned Judges we can find nothing in the plain words of the rules which makes a transaction subsequent to the institution of the suit a condition precedent to the application of Rules 5 and 6. Indeed, Rule 5 refers not to the past but to the future. Rule 5 refers to a defendant who with a particular intent is about to dispose of the whole or part of his property. This fact that he has done so after the institution of the suit may be strong evidence of the future intention provided he has any property left. But, in my opinion, transfers before the institution of a suit may as evidence or conduct be evidence of intention after the institution of the suit'. (Emphasis under lined).
15. ' Learned members of the Bench cited with approval the case of Macgregor v. Cawnpore Sugar Works, Limited 11 CLJ 19, wherein the learned Judge said:-- ' It is open to the Court to look to the conduct of the parties immediately before the suit and to examine also the- surrounding circumstances and from these to draw an inference as to whether the defendant is about to dispose of his property, and, if so, with what intention.'
16. ' Learned counsel for the respondent's further submission was that the Appellate Court, while hearing the appeal against the interlocutory orders, will not interfere with the discretion exercised by the trial Judge save where the discretion was exercised arbitrarily, perversely, or contrary to legal principles. To support his submissions, he referred the judgment of Hussain A: Haroon and others v. Mrs. Laila Sarfraz and others 2003 CLC 771, the present Division Bench, while highlighting the jurisdiction of Appellate Court, has held that the Appellate Court will not substitute its own discretion for that of the trial Judge except where discretion was exercised arbitrarily, perversely, contrary to legal principles, and on basis of assumptions not borne out by record.
17. The appeal before us is against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not interfere with the exercise of discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the Court had ignored the settled principles of law reguiating grant or refusal of interlocutory orders. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court' will not reassess the material and seek to reach a conclusion different from the one reached by the trial Judge if the one reached by that Judge was reasonably possible on the material. The Appellate Court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised reasonably and in a judicial manner the fact that the Appellate Court would have taken a 'different view may not justify interference with the exercise of discretion.
18. ' These principles are well established, but as has been observed by viscount Simon in Charles Osenton and Co. v. Jhanton 1942 AC 130, the law as to the reversal by a Court of appeal of an order made by a Judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application on well settled principles in an individual case.
19. There is nothing in the plain language of Rule 5 of Order 38, C.P.C. Which makes a transfer subsegtuat to the institution of the suit, a condition precedent to its application. Rule 5 refers not to the past but to the futute, and to a defendant who with a particular intent is about to dispose of the whole or part of his property. The fact that he had done so after the institution of the suit may be strong evidence of the future intention provided he has any property left. But the transfer before the institution of the suit may, as evidence or conduct, be evidence of intention; after the institution of the suit. The appellant has transferred the property sought to be attached prior to the filing of the suit by respondent, by gift to his own wife but after the service of legal notice. In para 16 of the plaint, the respondent case is that a sum of Rs.59,12,000 was received by the appellants as against the work to the extent of Rs.15,00,000. In reply of para 16, the appellants have not disputed the receipt of the amount, but pleads as follows:-- 13 That the contents of para.16 of the plaint are completely unwarranted, misconceived and uncalled for and are thus vehemently denied. It is submitted that the total expenditure on the Project was Rs.6,500,000 (Rupees Six Million Five Hundred Thousand only), out of which the defendants paid the mechanical and air conditions contractor, a sum of Rs.6,50,000 (Rupees Six Hundred and fifty thousand only). The cost of the construction of basement, ground floor, first floor, second floor, roof terrace, laundry and store room, water tank, servants quarters, boundary wall, paving both inside and outside the constructed building and drainage amounted to Rs.6,012,000 (Rupees Six Million and Twelve Thousand only). The remaining amount went towards the architect's project manager's and interior designer's fees.'
20. ' We do not see how these questions can be decided before the same is heard nor we can say that the respondent case is bound to fail as to make the passing of the interlocutory order in the nature of direction for surety, without jurisdiction.
21. ' We are not impressed by the plea, of the learned counsel or the appellants, that the Commissioner's report makes the respondent case meritless, for simple reason that the report dated 27-9-2001 is subsequent to the date of impugned order. In our opinion, the discretion has been exercised by the learned Single Judge reasonably and in a judicial manner.
22. ' Judging the instant case on the touchstone of. The above principle and in line with the decision of Division Bench of Bishamberdas & Co. Case (supra), the impugned order do not call for interference. The appeal, being meritless was dismissed by short order dated 18-3-2004 in limine alongwith listed applications, however, with no order as to costs.
23. ' These are the reasons of short order announced on 18-3-2004.