Order XXXVIII Rule 5 CPC: Supreme Court Says Attachment Before Judgment Must Be Used Sparingly

The Supreme Court has said the power of attachment before judgment under Order XXXVIII Rule 5 of the Civil Procedure Code is drastic and extraordinary and must be exercised sparingly and strictly.

The Apex Court emphasized that a court must be satisfied that there is a reasonable chance of a decree being passed and that the defendant is attempting to remove or dispose of assets with the intention of defeating such a decree. The provision cannot be used to convert an unsecured debt into a secured debt, it stressed.

Under Order XXXVIII Rule 5 CPC, a civil court can require a defendant to furnish security if it believes the defendant may dispose of or remove assets to defeat a possible decree. In appropriate cases, the court can also order attachment of the defendant’s property before the final judgment.

A Bench of Justices P S Narasimha and Alok Aradhe also said that when a matter is remanded by a high court for reconsideration of an application seeking leave to sue as an indigent person, the trial court must decide the plea by applying the relevant legal principles without being influenced by observations made by the high court in the order of remand.

Court accordingly declined to interfere with the remand order of the High Court of Kerala, directing the trial court to decide the indigency application in accordance with established legal precedents.

The appeals were filed by Arvind Pundalik Tendulkar against judgments dated May 20, 2025 and October 18, 2024 passed by a single judge of the high court.

Case background

The case arose from a suit filed by Raju K Mathews, an advocate and erstwhile counsel of Tendulkar, seeking recovery of Rs 12,50,51,989. Along with the suit, Mathews filed an application under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908, seeking attachment before judgment.

The trial court passed an ad interim order on March 10, 2023, directing Tendulkar either to furnish security for Rs 12,50,51,989 or to show cause why he should not furnish the security.

In the meantime, a conditional order of attachment was passed in respect of schedule item Nos. 1 and 2 properties.

After hearing the parties, the trial court, by an order dated October 7, 2023, took note of the statement of Tendulkar's counsel that he had no objection to an order of attachment being passed in respect of schedule item No. 1 property. It accordingly vacated the attachment order in respect of item Nos. 2 and 3.

Mathews challenged the order before the high court.

By an order dated October 18, 2024, the Kerala High Court set aside the trial court's order insofar as it directed the release of item No. 2 property. It directed the trial court to attach such portion of the sale consideration of Rs 18 crore to which Mathews was entitled under a compromise decree, over and above item No. 1 property that was already under attachment.

The trial court was also directed to release the balance amount in deposit to the plaintiff and defendant Nos. 1 to 3 of 2018 in accordance with their entitlement under the compromise decree. The appeal was accordingly allowed.

Tendulkar thereafter filed a review petition against the October 18, 2024 judgment. The high court dismissed the review petition by its judgment dated May 20, 2025.

Before the Supreme Court, Tendulkar's counsel argued that Mathews' claim, based on an alleged oral agreement regarding legal fees, lacked bona fides and was contrary to public policy.

It was submitted that demanding professional fees as a proportion of the litigation proceeds directly contravened Rule 20 of the Bar Council of India Rules and amounted to professional misconduct.

The counsel further argued that the alleged agreement was in the nature of champerty and maintenance, amounting to an abdication of professional duties and illegal speculation in the outcome of litigation. The impugned judgments were therefore liable to be set aside.

Mathews' counsel, on the other hand, submitted that the claim was based on the rules regarding fees payable to advocates framed by the high court under Articles 225 and 227 of the Constitution.

Attachment before judgment

Having considered the rival submissions, the Bench stressed that any attempt by a plaintiff to use Order XXXVIII Rule 5 as leverage to coerce a defendant into settling the suit claim should be discouraged.

"The court before exercising the power under Order XXXVIII Rule 5 has to be satisfied that there is a reasonable chance of decree being passed against the defendant and that the defendant is attempting to remove or dispose of his assets with an intention to defeating the decree that may be passed," it said.

In the present case, the Bench noted that the high court had not recorded its satisfaction regarding the conditions precedent for invoking the power under Order XXXVIII Rule 5.

However, the Supreme Court said it was not necessary to examine the issue further in the facts of the case because Tendulkar had no objection to the continuance of the attachment order in respect of schedule item No. 1 properties, namely, two flats.

"The claim of the respondent in the suit also needs to be secured," Court said.

The Supreme Court ultimately set aside the high court's judgments dated October 18, 2024 and May 20, 2025 and restored the trial court's order dated October 7, 2023.

What did the Supreme Court say about the plea to sue as an indigent person?

In a connected special leave petition, Tendulkar challenged the order dated June 17, 2026 passed by a single judge of the high court.

The connected matter concerned an application filed by Mathews under Order XXXIII Rule 1 of the Code of Civil Procedure seeking leave to prosecute the suit as an indigent person.

Order XXXIII Rule 1 CPC allows a person who does not have sufficient means to pay the prescribed court fee to seek permission to file or pursue a civil suit as an indigent person.

The trial court had found that Mathews had sufficient means to pay the court fee and rejected his application under Order XXXIII Rule 1.

Mathews challenged the order before the high court. The single judge, by judgment dated June 17, 2026, set aside the trial court's order and remitted the matter for reconsideration in light of the law laid down by the high court.

The Supreme Court said the impugned judgment was a judgment of remand and, therefore, it was not inclined to interfere with it.

However, the Bench clarified that while deciding the plea of indigency, the trial court should take into account the law laid down by the Supreme Court in Mathai M. Paikeday v. C.K. Antony (2011) and Solomon Selvaraj & Ors. v. Indirani Bhagawan Singh & Ors. (2023).

Case Title: Arvind Pundalik Tendulkar Vs Raju K Mathews

Bench: Justices P S Narasimha and Alok Aradhe

Date of Judgment: July 27, 2026