1. ' This application has been filed on behalf of the plaintiff praying for attachment before judgment of Property D-40, Block-III, Scheme No,5, Clifton, Karachi (the Property) owned by defendant No,1 otherwise defendant No,1 may be directed to furnish security in the sum of Rs,65,00,000.
2. ' Briefly the facts of the case are that the plaintiff has filed this case for settlement of accounts and for recovery of Rs,65,00,000 and also for attachment of the property owned by the defendant No,1 or restraining the defendant No,1 from selling, alienating or creating any third party interest in the property.
3. ' According to the plaintiff the plaintiff is a Private Limited Company and is owner of Plot No,C-107, Block-2, Clifton, Karachi, measuring 600 square yards. The plaintiff to raise construction over the above plot and for that purpose the plaintiff obtained approved plan from the concerned authorities and after completion of the structure plaintiff decided to a hire services of an expert to complete the remaining construction, finishing work and interior decoration of the building. The defendant No,1 was introduced to the plaintiff by a German friend namely Professor Dr.Pinch and defendant No,1 claimed that he had constructed and supervised several buildings and has considerable experience in managing the affairs of construction, designing and interior decoration.
4. Thereafter, the plaintiff made certain payments to the defendant No,1, as such the defendant No,1 received a sum of Rs,59,12,000 from the plaintiff towards the cost of construction. The plaintiff was not satisfied with the speed of construction, as such, discussed the matter with defendant No,1 and thereafter, the defendant No,1 declined to continue the work as Project Manager thereafter the plaintiff appointed Shahab Ghani an Architect to-inspect the plot and to assess the quality and cost of the construction and also appointed Messrs Sam Engineering and Contractor to inspect and assess the electric wiring etc. And to submit the report. Both the companies have inspected the Prinz' house and submitted their respective reports to the plaintiff. According to the reports the quality of work is not good and the charges were very high, thereafter the plaintiff sent the accounts to Messrs Shahab Ghani Associates for verification and observation who submitted the report that the defendant has overcharged the plaintiff and have received the amount, on account of cost of construction which was never done by them. According to the plaintiff the defendant committed breach of trust by not completing the work as agreed between the parties and by abandoning the work before its completion. The plaintiff further submitted that the defendant No,1 is the owner of the Property bearing No,D-40, Block-III, KDA Scheme No,5, Clifton, Karachi and defendant No,1 is trying to dispose of the same to avoid the decree which may be passed in the present suit against the defendants.
5. ' The plaintiff in support of this application filed affidavit wherein he submitted that the defendant No,1 is trying to dispose of the property to defraud the plaintiff and to avoid payment of decretal amount and submitted that it is very necessary/essential to restrain the defendant No,1 not to sell, alienate or create third party interest in the property till pendency of the suit otherwise the plaintiff will not be in a position to recover its decretal amount if decree is passed.
6. ' The defendant No,1, filed counter-affidavit to this application and denied the various allegations raised by the plaintiff and he submitted that the property in question was gifted by him to his wife Mrs. Maheen as early as November, 1998 and the gift was later recorded vide deed and declaration of Oral Gift, dated February 19, 2000 and denied the allegations that he is attempting to dispose of the said property to avoid the so-called claim of the plaintiff is frivolous on the face of it. The defendant has also taken the plea that he has performed all his legal obligations to the best of his ability. The breach of contract is in fact been committed by the plaintiff which has caused enormous losses to him. He also filed photostat copy of registered declaration of gift dated 19-2- 2000 alongwith his counter-affidavit.
7. ' Plaintiff filed affidavit-in-rejoinder and submitted that the defendant No,1 had bifurcated the property and been divided into two portions of 500 square yards each, wherefrom D-40 is in the name of defendant No,1 and D-41 is in the name of his wife Mrs.Maheen. It is averred that the defendant No,1 is trying to misguide the Court by showing plot as one plot and is giving false statement on oath. It was also submitted that according to the information received from the record of Sub-Registrar that originally the property was of 1000 sq. Yards thereafter on 27-2-1997 the area of this plot, which is in the name of defendant No,1, is 541 square yards being Plot No,D-40.
8. The plaintiff further stated that the property has been constructed from the funds provided by the plaintiff to the defendant for construction of her house. The defendant No,1 has extracted Rs,29,00,000 from the plaintiff for construction and supply of material which according to the plaintiff it was never utilized in construction work or supplied till his resignation as Project Manager.
9. The defendant No,1 with mala fide intention made an oral gift, which was registered in the record of Sub-Registrar T-Division and to avoid the payment of decretal amount, which may be passed in the suit.
10. ' Learned counsel for the plaintiff further submitted that from the past conduct of the defendant No,1 it is crystal clear that he has transferred the suit property in favour of his wife with a view to avoid any decree as by that time legal notice was served on 16th September, 1999. On the other hand learned counsel for the defendant No,1 has submitted that the present application is a frivolous one and same has been filed to harass the defendant No,1 and he further submitted that the present application is misconceived as such the same is liable to be dismissed and in support of his contention he relied upon Faqir All v. Muhammad Hayat PLD 1976 Lah. Page 298, wherein it has been held that before passing the order under revision the learned Court should have satisfied itself that the appellant/petitioner was about to dispose of his property or above to remove it from jurisdiction with the intention to obstruct or delay the execution of any decree that may be passed.
11. There is not even an allegation in the application to the effect that the petitioner was trying to dispose of the property with ulterior intention to obstruct or delay the execution of the decree that may be passed in the case. It is mainly stated that the petitioner is making efforts to dispose of the tractor in dispute. The defendant have definite evidence to satisfy the Court on this point. Vague and general allegations that the defendant is trying to dispose of the property are insufficient.
12. Merely because there are such indefinite apprehensions it does not follow that the defendant had the intention contemplated in the rule. Without stating the grounds of belief and the source of information the allegations are inadequate and defective and Court should be slow in exercising this extraordinary jurisdiction.
13. ' I have heard learned counsel for the plaintiff and perused the material available on record and also the case-law cited on behalf of the defendants.
14. ' To appreciate the submissions of learned counsel for the parties Order XXXVIII, rule 5, C.P.C., is reproduced as under:-- "Order 38, rule 5.---Where a defendant may be called upon to furnish security for production of property. (1) Where, at any stage of a suit, 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 his property, or
(b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court.
15. ' The Court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security.
(2) The plaintiff shall, unless the Court otherwise direct. specify the property required to be attached and the estimated value thereof.
(3) The Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified."
16. ' From the reading of the above provision it is clear that a Court if satisfied by an affidavit or otherwise that the defendant with the intent to obstruct or delay the execution of any decree that may be passed against him is about to dispose of the property at any stage of the suit can pass an order under Order XXXVIII, rule 5, C.P.C. In the present case the ground taken by the plaintiff is that the defendant No,1 is about to dispose of the property with intent to obstruct the decree that may be passed in the present suit. Learned counsel for the plaintiff contended that the defendant No,1 has transferred the suit property prior to filing of the present suit which shows the intention of the defendant which according to the plaintiffs counsel establishes his case as the same has been done after the dispute and service of legal notice dated 16-9-1999 and also that it is a sham transaction just to avoid the claim of the plaintiff.
17. ' 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 evidenced 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,
1. The above case referred by the defendant's counsel is distinguishable on facts of the present case.
18. ' In view of above stated facts I am of the considered view that the plaintiffs case comes within the provisions of Order )XXXVIII, rule 5, C.P.C., accordingly the defendant is directed to furnish security equivalent to an amount of Rs,50 lacs within one month from today.