Wakilii

Harris v Patel and Another (Civil Case No. 204 of 1951)

East African Court of Appeal · [1951] EACA 346 · 1951 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for security under Order 38 Rule 5 of the Civil Procedure Rules in a pending libel action
Decision
Application for security dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

An application for security under Order 38 Rule 5 requires the court to be thoroughly satisfied that the defendant intends to obstruct or delay execution of any decree by disposing of property. Mere vague allegations are insufficient. Where a director acted on his own initiative without company authorization to offer assets for sale, and the company denied any intention to dispose of property, the court was not satisfied of the requisite intent. Application dismissed.

Outcome

Application for security dismissed

Facts

The plaintiff brought a libel action against two defendants including The Express Printers Ltd. The plaintiff applied for an order requiring the second defendant to furnish security of Sh. 100,000 under Order 38 Rule 5. The application was supported by an affidavit alleging that a director of the defendant company, P. J. Shukla, had offered to sell the company's assets and goodwill for Sh. 200,000 to Allah Ditta Qureshi on 6 March 1951, stating he wished to sell quickly. The plaint had been filed on 22 February 1951. The defendants responded that Shukla had never been authorized by the company to deal with its assets or shares and had acted solely on his own initiative. The company denied any intention to dispose of its property. The company owned land worth approximately £10,000 encumbered by charges totaling Sh. 126,000.

Issues

  1. Whether the second defendant should be ordered to furnish security under Order 38 Rule 5 of the Civil Procedure Rules on the ground that it intended to obstruct or delay execution of any decree by disposing of its property.

Orders

  • Application dismissed with costs.

Rules and key headnotes

Civil Procedure — Security for Execution — Standard of Proof Required
Under Order 38 Rule 5 of the Civil Procedure Rules, the court must be thoroughly satisfied that the defendant had the intention of obstructing or delaying the execution of any decree which might be passed, and mere vague allegations are not enough to justify an order for security.
Civil Procedure — Security for Execution — Unauthorized Acts of Directors
Where a director of a company offers to sell company assets on his own initiative without authorization from the company, and the company denies any intention to dispose of its property, such unauthorized conduct does not satisfy the court that the company itself intends to obstruct or delay execution of a decree.
Civil Procedure — Security for Execution — Right to Deal with Property During Litigation
A defendant is not debarred from dealing with property merely because a suit has been filed; there must be additional circumstances before the court can be satisfied that an intention to obstruct or delay execution exists.

Legislation cited (1)

Cases cited (3)

  • Sennaji Kapurchand v Punnaji Devchand (46 Bom. 431)
  • Nowroji Pudamji v The Deccan Bank Ltd. (45 Bom. 1256)
  • Durgadas v Nalinchandra Nandan (51 Cal. 814)

Full judgment

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Harris v Patel and Another (Civil Case No. 204 of 1951) [1951] EACA 346 (1 January 1951)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.