India - Attachment of Assets
Detty Davis, Partner, Juris Corp
Dhiraj Totala, Senior Associate, Juris Corp
Neha Samant, Trainee, Juris Corp
Originally from Attachment of Assets
1. What is the general nature and effect of judicial measures available for plaintiffs to obtain provisional relief affecting property of debtors to obtain security for judgments to be obtained (“attachments”)? Freezing property in place? Placing it in the custody of a third party, such as a court official, sheriff or marshall?
In India, various judicial measures affecting property of the debtor are available to the plaintiff to obtain security for a judgment i.e., to prevent any attempt on the part of the debtor to defeat the realization of the decree that may be passed against him. These measures are governed by the Code of Civil Procedure, 1908 (the “CPC”). References to Orders hereinafter are to Orders of the CPC.
The judicial measures are discussed as follows:
(i) Attachment before judgment (Section 94 and Order XXXVIII Rules 5-12 of the CPC) (hereinafter referred to as “Order of Attachment”):
An order of attachment before judgment is passed by a court on an application of the plaintiff if it is satisfied that the debtor (with an intent to obstruct or delay the execution of any decree that may be passed against him) (i) is about to dispose of the whole or any part of his property, or (ii) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court.
The sole object behind the order of attachment is to give an assurance to the plaintiff that the decree, if made in his favour would be satisfied. It is a sort of an assurance against the decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree.1
If the court is satisfied that the debtor is about to dispose of his property, the court directs the debtor either to furnish security or to produce and place the property at the disposal of the court or to appear and show cause why he should not furnish the security. If the debtor fails to comply with the requirement, the court orders attachment of the property.