- 1 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C M JOSHI COMMERCIAL APPEAL NO. 85 OF 2025 (CPC) BETWEEN: 1. MR. M.I. ABDUL RAZAK AGED ABOUT 66 YEARS S/O MR. K Y IBRAHIM RESIDING AT BADRIYA MANZIL 3RD CROSS, SUBHASHNAGAR CHATHRAMAIDANA, MUDIGERE CHICKMAGALORE DISTRICT - 577 132. …APPELLANT (BY SRI ANANDARAMA K., ADVOCATE) AND: 1. M/S ANNA JEWELLERS REPRESENTED BY ITS PROPRIETRIX MRS. REENA BABU AGED ABOUT 53 YEARS W/O MR. BABU NEAR NEST BAKERY, V. TOWER ANCHERY CHIRA, THRISSUR THRISSUR DISTRICT KERALA STATE - 680 006 WHO IS REPRESENTED BY HER HUSBAND AND GENERAL POWER OF ATTORNEY HOLDER MR. BABU A.J. Digitally signed by SUMATHY KANNAN Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 AGED 61 YEARS S/O MR. OUSEPH A R. RESIDING AT THATTI APPANDAN HOUSE NORTH BAZAR, OLLUR P.O., THRISSUR THRISSUR DISTRICT, KERALA STATE. 2. M/S HAJI GOLD AND DIAMONDS A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER MOHAMMED SHAHABUDDIN MJS COMMERCIAL COMPLEX OPP. SAHARA HOSPITAL NH 66 THOKITTU ULLAL TALUK - 575 017. 3. MR. MOHAMMED SHAHABUDDIN AGED ABOUT 34 YEARS S/O MR. K.P. ISMAIL PARTNER AT M/S HAJI GOLD AND DIAMONDS MJS COMMERCIAL COMPLEX OPP. SAHARA HOSPITAL NH 66, THOKITTU, ULLAL TALUK 575017 AND ALSO AT LUXURY GOLD AND DIAMONDS SHOP NO.1, DOOR NO.17-19-1415/2(1) GROUND FLOOR, PAILANDS PLAZA BUILDING FALNIR, MANGALURU - 575 002. …RESPONDENTS (BY SRI ANIKETH K.U., ADVOCATE FOR SRI SACHIN B.S., ADVOCATE FOR C/R-1) THIS COMMERCIAL APPEAL IS FILED UNDER ORDER XLIII RULE 1 (q) OF THE CODE OF CIVIL PROCEDURE, 1908 READ WITH SECTION 13 OF THE COMMERICIAL COURTS ACT, 2015 PRAYING TO ALLOW THE INSTANT COMMERCIAL APPEAL AND SET ASIDE THE ORDER DATED 21.09.2024 - 3 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 (ANNEXURE - A) PASSED BY THE COURT OF IV ADDITIONAL DISTRICT JUDGE AND COMMERCIAL COURT, MANGALORE, ON I.A. NO.3 IN COM. O.S. No.21/2024 AND CONSEQUELTY DISMISS I.A. No.3 & ETC. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE and HON'BLE MR. JUSTICE C M JOSHI ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU,CHIEF JUSTICE) 1. For the reasons stated in the application - I.A.No.3/2025, the same is allowed. Production of typed copy of OS is dispensed with. 2. The office objection regarding payment of court fee and maintainability of the appeal, is over-ruled. 3. The appellant has filed the present appeal impugning an order dated 21.09.2024, directing that if the appellant [Defendant No.3 in Com.O.S.No.21/2024], fails to furnish the security to the extent of ₹3,24,61,553/-, the property as set out in schedule to IA No. 3 [the subject property] be attached. Subsequently, by an order - 4 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 dated 28.10.2024, warrants of attachment of the subject property were directed to be issued as the appellant [Defendant No.3] had failed to furnish security as directed. The appellant is aggrieved by the said orders passed under Order XXXVIII Rule 5 and 6 of the Code of Civil Procedure,1908 [CPC] and has thus preferred the present appeal. 4. The appellant challenges the impugned order on the sole ground that the necessary ingredients of Order XXXVIII Rule 5 and 6 of CPC are not established. It is contended that there is no finding of the learned Commercial Court to the effect that if the said order was not passed, the decree that may follow in the Commercial suit would be rendered a paper decree. It is contended that there is no finding to the effect that the appellant is attempting to alienate its assets so as to frustrate the decree that may be passed against the appellant. 5. The learned counsel appearing for the appellant submits that the only ground on which the impugned order has been passed is that the respondent No.1 [plaintiff] had set out a prima facie case. He earnestly contended that a mere finding of a prima facie case is - 5 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 insufficient for passing an order under Order XXXVIII Rules 5 and 6 of CPC. 6. Respondent No.1 [plaintiff] had filed the aforementioned Commercial O.S No. 21/2024 for recovery of an amount of ₹2,17,13,420/- (Rupees two crores seventeen lakh thirteen thousand four hundred and twenty only) along with interest for a period of 32 months from 12.04.2021 to 12.01.2024 at the rate of 18% per annum. The said amount was quantified at ₹1,07,48,133/- (Rupees one crore seven lakh forty-eight thousand one hundred and thirty three only). Thus the plaintiff had sought a decree of an amount of ₹3,24,61,553/- (Three crores twenty-four lakh sixty-one thousand five hundred and fifty three only) as well as interest on the said amount for the period after filing the suit and till realisation. 7. It is the plaintiff's case that during the course of its business it had supplied gold ornaments to defendant No.1 [respondent No.2 in the present appeal]. The said supply was on credit. The appellant was arrayed as defendant No. 3 in the suit. The plaintiff had claimed that defendant Nos.2 and 3 had entered into an agreement dated 14.10.2020 and had jointly and severally agreed - 6 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 to pay the outstanding amount of ₹2,17,13,420/- to the plaintiff within a period of six months from the date of the said agreement. The appellant [defendant No.3], had also handed over title documents in respect of the immovable property [two plots measuring 1,500 square feet each in Assessment No. 1199 situated in Gaganamakki, Mudigere Town, Chickmagaluru] as collateral security. The registered sale deeds in respect of the said property had been deposited with the plaintiff. 8. It stated that defendant No. 2 had also issued four cheques [Two cheques of ₹55,00,000/-, one cheque of ₹60,00,000/- and a cheque of ₹47,13,420.19/-] aggregating to ₹2,17,13,420/-. The plaintiff stated that the said cheques were dishonoured on presentation. 9. The plaintiff had contended that appellant [defendant No. 3], was attempting to alienate the subject property and if the same was alienated, there would be no possibility for the plaintiff to recover its amount. The relevant contentions as noted by the learned Commercial Court in the impugned order are set out below. - 7 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 "The defendant no. 3 is trying to alienate the schedule property to some third party in order to defraud the plaintiff. There is no chance of recovery of the amount due to him outside the Court and if the Defendant No.3 succeeds in selling the schedule property, the suit filed by the plaintiff will be rendered infructuous and it will be impossible for him to recover the decretal amount that may be passed in the above suit. Hence, there is grave urgency in the matter." 10. The learned Commercial Court had found prima facie merit in the said contentions. After noting the said contentions, the court had expressed that the plaintiff had made out a prima facie case for grant of an order for attachment of the schedule property before judgment and also for a direction to the defendants to furnish security to the Court to the extent of ₹3,24,61,553/-, pending the disposal of the suit. A meaningful reading of the impugned order indicates that the learned Commercial Court had accepted the contentions as noted in the order and had expressed its prima facie satisfaction regarding the said contentions. In the aforesaid view, the contention that the necessary conditions for passing an order under Order XXXVIII Rule 5 CPC are not established, is unmerited. There is no dispute that cheques issued had been dishonoured on - 8 - HC-KAR NC: 2025:KHC:33532-DB COMAP No. 85 of 2025 presentation. There is also no dispute that the original title deeds [registered sale deeds] of the subject property, which have since been attached, are in the possession of the plaintiff. 11. There is also an allegation that the defendant No.3 was attempting to alienate the subject property. In the aforesaid view, we find no ground to interfere with the impugned order. The appeal is unmerited and accordingly dismissed. 12. All pending applications also stand disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C M JOSHI) JUDGE KS List No.: 1 Sl No.: 16