EXECUTABILITY & ENFORCEABILITY OF FOREIGN JUDGMENTS AND DECREES IN INDIA:
By Rishi Agrawala
The emerging legal issues on "jurisdiction" as regards transactions over the internet can hardly ignore the legal aspects involved in the execution/enforcement of foreign decrees. Even after exercise of jurisdiction, the Courts may be unable to help the plaintiff in getting relief in case the local laws of the country concerned have certain restrictions for the execution/enforcement of foreign judgements or decrees in the country.
Under Indian Law, execution of decrees, whether foreign or domestic, is governed by the provisions of the Code of Civil Procedure, 1908 (CPC) (as amended from time to time).
Under the Indian law there are two ways of getting a foreign judgement enforced. Firstly by filing an Execution Petition under Section 44A of the CPC (in case the conditions specified therein are fulfilled). Secondly by filing a suit upon the foreign judgement/decree.
Under S. 44A of the CPC, a decree of any of the Superior Courts of any reciprocating territory are executable as a decree passed by the domestic Court. Therefore in case the decree does not pertain to a reciprocating territory or a superior Court of a reciprocating territory, as notified by the Central Government in the Official Gazette, the decree is not directly executable in India. In case the decree pertains to a country which is not a reciprocating territory then a fresh suit will have to be filed in India on the basis of such a decree or judgement, which may be construed as a cause of action for the said suit. In the fresh suit, the said decree will be treated as another piece of evidence against the defendant.
However in both cases the decree has to pass the test of S. 13 CPC which specifies certain exceptions under which the foreign judgement becomes inconclusive and is therefore not executable or enforceable in India.
Under S. 13 of the Code of Civil Procedure, 1908 a foreign judgment becomes inconclusive and consequently unenforceable in the following circumstances:
(a) where it has not been pronounced by a Court of competent jurisdiction;
(b) where it has not been given on the merits of the case;
(c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of India in cases in which such law is applicable;
(d) where the proceedings in which judgment was obtained are opposed to natural justice;
(e) where it has been obtained by fraud;
In the present paper, various decisions of the Supreme Court of India, various High Courts and other Courts are discussed in order to bring the law on the point, in perspective. In order to show a comprehensive view of the law, along with the ratio decidendi a short averment of the facts of the case are also given so that the decisions can be rightly appreciated. Each of the aforesaid exceptions, under S. 13 have been dealt with separately and at the end of each discussion, a broad proposition culled out from the decisions of the Courts is laid down so that it is easier to remember the law on the point. However, the proposition may not be exhaustive to cover all circumstances.
The following are the cases in which the Courts have held that there is no jurisdiction with the foreign Court and hence the Judgment or decree is unenforceable.
In the case of Moloji Nar Singh Rao v. Shankar Saran, a suit was filed by the plaintiff in a foreign Court for recovery of some amounts against the defendants. The Defendants did not appear despite service of the writ of summons. The suit thereafter was proceeded exparte against the defendants. The claim was decreed. The decree was brought to the local court for execution. After a round of litigation on the executability of the foreign decree the matter came up before the Supreme Court of India. The major issue which came up before the Court for consideration was "what conditions are necessary for giving jurisdiction to a foreign court before a foreign judgment is regarded as having extra-territorial validity." The Supreme Court in order to answer this issue relied upon the Halsbury’s Laws of England Vol. III p. 144 para 257 (3rd Edition) and held that none of those conditions were satisfied in the present case. The Court while applying those conditions observed that:
Therefore the Supreme Court held that the foreign decree was a nullity and could not be executed in the local courts. The Supreme Court further relied upon a Privy Council decision in the case of Sirdar Gurdial Singh v. Maharaja of Faridkot, delivered by Lord Selbourne, where it was held that
"In a personal action to which none of these causes of jurisdiction previously discussed apply, a decree pronounced in absentem by a foreign Court to the jurisdiction of which the defendant has not in any way submitted himself is by international law an absolute nullity. He is under no obligation of any kind to obey it, and it must be regarded as a mere nullity, by the Courts or every nation except (when authorized by special local legislation) in the country of the forum by which it was pronounced."
In the case of Andhra Bank Ltd.. v.R. Srinivasan,an interesting issue came up before the Court. In this case a suit had been filed against a guarantor in the proper jurisdiction. However during the pendency of the suit the guarantor/defendant died and the legal representatives of the said defendant were brought on record. When the decree was passed and came up for execution, the legal representatives questioned the executability of the decree on the basis that since they did not submit to the jurisdiction of the Court, therefore the decree was not executable against them under S. 13(a) of CPC. Now the Supreme Court was faced with the issue that whether, evenif the suit is validly instituted, but during the pendency of the suit one of the defendants expires and his non-resident foreign legal representatives are brought on record, does the rule of private international law in question (as referred to above in the case of Sirdar Gurdial Singh’s case) invalidate the subsequent continuance of the said suits in the court before which they had been validly instituted? The Supreme Court after referring to a catena of cases, observed that the material time when the test of the rule of private international law is to be applied is the time at which the suit was instituted. Therefore it was held that the legal representatives, although foreigners were bound by the decree and the S. 13(a) could not help them in any way.
In the case of Kukadap Krishna Murthy v. Godmatla Venkata Rao, while relying upon the case of Sirdar Gurdial Singh’s it was held by a Full Bench of the Andhra Pradesh High Court that a decree passed in absentem was a total nullity as a foreign judgment, in other words, it is not a valid foreign judgment, the execution of which could be levied in Courts situated in a foreign territory. The Court further held as follows:
"Judged by Municipal Law, the adjudicating Court has no doubt jurisdiction to entertain proceedings when certain requirements are fulfilled. But that does not invest judgments rendered by such courts with validity, if they could not be regarded as Courts of competent jurisdiction. It cannot be open to much doubt that a decree of a court without jurisdiction is null and void. We are not persuaded that the interpretation placed by the Full Bench of the Bombay High Court on the passage in question is warranted by the language thereof. It is true, as remarked by the learned Judges that S. 20 CPC vests in courts in British India a power to entertain suits in all cases where the cause of action has arisen within the territorial limits of that Court. To that extent, the jurisdiction to take cognizance of suits by that forum is authorized by special local legislation. This section enables Courts in British India to pass decrees which are capable of execution as domestic judgments. It deals only with matters of domestic concern and prescribes rules for the assumption of territorial jurisdiction by British Indian Courts in causes with their cognizance. The operation of the decrees passed by these Municipal Courts is confined to the limits of their jurisdiction as conferred on them by the relevant provisions of the CPC. As foreign judgments, they have no validity and they are, as it were non est so far as the area outside the jurisdiction of the adjudicating Courts is concerned, if they do not conform to the principles of Private International Law. Such a judgment is an absolute nullity in the international sense."
In the case of R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar, it was alleged by the respondent that since he was not a subject of the foreign country, and that he had not submitted to the jurisdiction of the Foreign Court (Singapore Court), the decree could not be executed in India. The Appellant, in defense of this argument, stated that the Respondent was a partner of a firm which was doing business in Singapore and had instituted various suits in the Singapore Courts. Therefore, the Appellant argued, that the Respondent had accepted the Singapore Courts jurisdiction. The Court held that it was the firm which had accepted the jurisdiction of the foreign Court and the Respondent, in an individual capacity, had not accepted the jurisdiction. This was one of the reasons for which the High Court held that the decree against the Respondent was not executable.
In the case of K.N. Guruswami v. Muhammad Khan Sahib, it was alleged that since the defendants were carrying on business in a partnership in the foreign state on the date of the action, and that the suit related to certain dealings with the firm, the issue of jurisdiction should be presumed against the defendants although an ex parte decree had been passed against them. The Court held that a mere fact of entering into a contract in the foreign country, does not lead to the inference that the defendant had agreed to be bound by the decisions of the Courts of that country. Therefore it was held that the decree was passed against the defendants without any jurisdiction.
The High Court in the above case had referred to a decision of the Madras High Court in the case of Ramanathan Chettiar v. Kalimuthu Pillai, which lays down the circumstances when the foreign courts would have jurisdiction under this Section. The circumstances mentioned are as follows:
However, the Madras High Court in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram, distinguished the ratio in the case of Ramanathan Chettiar, by holding that a person who has filed suits in a Court having jurisdiction to try them, cannot by implication be taken to submit himself to the jurisdiction of the same Court in cases where that Court has no jurisdiction.
In the case of Sankaran v. Lakshmi, an interesting situation arose for the Supreme Court’s consideration. The issue was whether the minors had an opportunity of contesting the proceedings in the English Court, if notices of the proceedings were served on thier natural guardians but they did not appear on behalf of the minors although they put in appearance in the proceedings in their personal Capacity and what could the foreign court do except to appoint a court guardian for the minors. The Supreme Court held that since the natural guardians had not entered appearance on behalf of the minors, the minors through the guardians could not be said to have submitted to the foreign court’s jurisdiction and therefore the judgment qua them was a nullity.
In the case of Y. Narasimha Rao v. Y. Venkata Lakshmi, the Supreme Court in respect of a matrimonial dispute held that only those Courts which the Act (statute) or the law under which the parties are married recognizes as a court of competent jurisdiction can entertain the matrimonial disputes in that regard unless both parties voluntarily, and unconditionally subject themselves to the jurisdiction of that court.
In the case of Satya v. Teja, while dealing with a matrimonial dispute, the Supreme Court held that the challenge under S. 13 was not limited to civil disputes alone but could also be taken in criminal proceedings. In this case a foreign decree of divorce obtained by the husband from the Nevada State Court in USA in absentum of the wife without her submitting to its jurisdiction was held to be not binding and valid upon a criminal court in proceedings for maintenance.
In the case of Ramkisan Janakilal v. Seth Harmukharai Lachminarayan, a division bench of the Nagpur High Court while following the decision in the case of Sirdar Gudyal Singh, held that a mere fact that a contract was made in the foreign country did not clothe the foreign court with jurisdiction in an action ‘in personam’. Further it was held that a person cannot be held to have submitted to the jurisdiction of a foreign court if his attempt to get the ex-parte judgment set aside fails. It was held that the submission to the jurisdiction of a foreign court has to be before the foreign decree is passed.
The case of I&G Investment Trust v. Raja of Khalikote, involved an action initiated in England against an Indian subject (Respondent) on the basis of a contract which was governed by the English Law. In this regard, the Calcutta High Court, while considering that under Order XI of the Supreme Court Rules of England, summons could be served upon a person outside the jurisdiction of the English Courts (assumed jurisdiction), on the basis that a contract governed by English law had been breached, held that since only the payments were governed by English law, a willingness to submit to the English Jurisdiction could not be shown. The Court in obiter dictum observed that even though it is held that the contract is governed by the English law, it could not be assumed to give jurisdiction in the International sense, although it may give rise to a cause of action. On this basis the Calcutta High Court held that the decree was not executable in India.
In the case of Narappa Naicken v. Govindaraju Naicken, it was held that failing in an action to set aside a foreign decree in the foreign Courts does not amount to submission to jurisdiction, however, in case the decree is set aside and the party is allowed to plead and a new decree is passed then the defendant would be deemed to have submitted to the jurisdiction of the foreign court.
In the case of Thirunavakkaru Pandaram v. Parasurama Ayyar, it was held that if a party has once appeared before a foreign court in the character of the plaintiff, it does not mean that he is forever afterwards to be regarded as having submitted to the jurisdiction of the foreign court in any subsequent action, by any person or upon any cause of action, which may be brought against him.
In the case of VithalBhai ShivaBhai Patel v. Lalbhai Bhimbhai, the Bombay High Court held that the mere fact that the transaction on which the suit had been instituted in the foreign Court, was effected during the time the defendant’s agent, holding a power of attorney of the defendant, which on the date of institution of the suit had expired, was living in the foreign Country, does not amount to submission to the jurisdiction of the foreign Court. However in obiter dictum the Court observed that in case the power of attorney holder is in the foreign Court and the summons are served upon him, then it may amount to submission to the jurisdiction of the Court.
The following are the cases in which the Courts have held that there is jurisdiction with the foreign Court.
The Supreme Court in the case of Shalig Ram v. Firm Daulatram Kundanmal, held that filing of an application for leave to defend a summary suit in a foreign court amounted to voluntary submission to the jurisdiction of the foreign Court.
In the case of Chormal Balchand Firm v. Kasturi Chand, the Calcutta High Court while considering the issue of submission to jurisdiction held that in case a defendant appears in the Court where the suit is instituted and questions both the jurisdiction and challenges the action on merits, he is said to have submitted to the jurisdiction voluntarily.
In the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram, the Madras High Court while dealing with the issue of submission to jurisdiction held that mere conduct or circumstances indicative of intention to submit to the jurisdiction is enough to derive a conclusion of submission to jurisdiction. In the present case, during the pendency of the suit, plaintiff effected attachment before judgment of certain property of the defendant and the defendant by a letter acknowledged the attachment and requested merely for a concession, which was not a conditional request and when the offer is refused and the defendant remained ex parte and the suit was decreed, it was deemed that the defendant submitted to the jurisdiction of the foreign Court.
In the case of V. Subramania Aiyar v. Annasami Iyer, the Madras High Court while dealing with the issue whether there was submission to the jurisdiction of a foreign Court in the circumstances that the defendant had appeared in the foreign Court due to a Commission having been appointed to get the defendant summoned and examined as a witness, and that the defendant pleaded that the Court had no jurisdiction to try the suit and he objected to the questions put to him in examination and got himself cross examined, it was held that the defendant had submitted to the jurisdiction of the foreign Court.
In the case of British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries Ltd. the Supreme Court held that eventhough the defendant had taken the plea of lack of jurisdiction before the trial Court but did not take the plea before the Appeal Court or in the Special Leave Petition before the Supreme Court, it amounted to submission to jurisdiction.
By reading the aforesaid cases under Section 13(a) of CPC the following proposition may be laid:
In case of actions-in-personam, a Foreign Court may pass a decree or judgment against an Indian defendant, who is served with the summons but has chosen to remain ex parte. But the said judgment or decree may be enforceable against such a defendant in India, only if by fulfilling any of the following conditions it can be shown that the Foreign Court had jurisdiction upon the Indian defendant:
The following are the cases in which the Courts have held that the judgments were not passed on the merits of the case and hence were inconclusive.
The fountainhead of all decisions under this head has been the decision of the Privy Council in the case of D.T. Keymer v. P. Viswanatham. In this case, a suit for money was brought in the English Courts against the defendant as partner of a certain firm, wherein the latter denied that he was a partner and also that any money was due. Thereupon the defendant was served with certain interrogatories to be answered. On his omission to answer them his defence was struck off and judgment entered for the plaintiff. When the judgment was sought to be enforced in India, the defendant raised the objection that the judgment had not been rendered on the merits of the case and hence was not conclusive under the meaning of S. 13(b) of CPC. The matter reached the Privy Council, where the Court held that since the defendant’s defence was struck down and it was treated as if the defendant had not defended the claim and the claim of the plaintiff was not investigated into, the decision was not conclusive in the meaning of S. 13(b) and therefore, could not be enforced in India.
The aforesaid decision of the Privy Council was relied upon and further explained in the case of R.E. Mahomed Kassim & Co. v. Seeni Pakir-bin Ahmed by a full bench of the Madras High Court. In this case the defendants were properly served however they did not appear. According to one of the rules of procedure of the foreign Court, in case defendants are properly served but do not appear and contest and the judgment is given for the plaint claim without any trial, judgment was entered up in favour of the plaintiff as a matter of course. This is what had happened in the present case and the judgment had been entered in favour of the plaintiff as a matter of course without any trial. The judgment was brought to India for enforcement. The defendants resisted the enforcement on the basis that the judgment was not conclusive since it was not passed on the merits of the case. The matter reached the Full Bench of the Madras High Court, wherein it was held that a decree obtained on default of appearance of the defendant without any trial on evidence is a case where the judgment must be held not to have been on the merits of the case. In the obiter dictum the Court observed that in a case where there was default in appearance, but however the claim of the plaintiff was tried in full on evidence and the plaintiff proved his case, the decision may be treated as a judgment on the merits of the case.
In the case of Gudemetla China Appalaraju v. Kota Venkata Subba Rao, an interesting issue arose concerning S. 13(b) of CPC. In this case it was questioned whether a consent decree obtained in a foreign court could be regarded as a decision given on the merits of the case within the meaning of S. 13 of CPC. The Court held that a decree to be conclusive within the meaning of S. 13 of CPC, there should be a controversy and an adjudication thereon. It was further observed since in the present case there was no controversy and that there was no dispute before the Court to decide, the decree was passed mechanically in accordance with a prescribed Rule. Therefore the Court held that the judgment was not on the merits of the claim and therefore was not conclusive within the meaning of S. 13 of CPC.
In the case of Gurdas Mann v. Mohinder Singh Brar, the Punjab & Harayana High Court held that an exparte judgment and decree which did not show that the plaintiff had led evidence to prove his claim before the Court, was not executable under S. 13(b) of the CPC since it was not passed on the merits of the claim.
In the case of K.M. Abdul Jabbar v. Indo Singapore Traders P. Ltd., the Madras High Court held that passing of a decree after refusing the leave to defend sought for by the defendant was not a conclusive judgment within the meaning of S. 13(b) of CPC.
In the case of Middle East Bank Ltd. V. Rajendra Singh Sethia, the Calcutta High Court held that a judgment and decree given by default under a summary procedure contemplated by Order 14 of the Supreme Court Rules of England, in the absence of appearance by the defendant and filing of any defence by him, and without any consideration of the plaintiff’s evidence is not a judgment given on the merits of the case and hence is not conclusive within the meaning of S. 13(b) of CPC. Therefore the decree is not executable in India.
In the case of M.K. Sivagaminatha Pillai v. K. Nataraja Pillai, the Madras High Court held that even though a decree in a foreign court may be passed ex parte, it will be binding if evidence was taken and the decision was given on a consideration of the evidence. In this case the defendant was ordered to pay a part of the suit claim as a security for the purpose of defending the claim. However the defendant failed to make the payment of the security and on that basis the court passed the decree against the defendant. The court on the above principle held that the judgment and decree was not enforceable in India under S. 13.
In the case of Y. Narsimha Rao v. Y. Venkata Lakshmi, the Supreme Court while interpreting S. 13(b) of CPC held that the decision should be a result of the contest between the parties. The latter requirement is fulfilled only when the respondent is duly served and voluntarily and unconditionally submits himself/herself to the jurisdiction of the court and contests the claim, or agrees to the passing of the decree with or without appearance. The Court further held that a mere filing of the reply to the claim under protest and without submitting to the jurisdiction of the Court, or an appearance in the court either in person or through a representative for objecting to the jurisdiction of the court, should not be considered as a decision on the merits of the case.
In the case of R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar, the Madras High Court held that if the foreign judgment is not based upon the merits, whatever the procedure might be in the foreign country in passing judgments, those judgments will not be conclusive.
In the case of B. Nemichand Sowcar v. Y.V. Rao, a suit was instituted in the foreign Court where the defendant entered appearance and filed his written statement. On the day of the hearing the defendant remained absent. The court passed a decree without hearing any evidence. The Madras High Court held that the decree was not passed on the merits of the case and hence inconclusive within the meaning of S. 13(b) of CPC.
In the case of Firm Tijarati Hindu Family Joint Kesar Das Rajan Singh v. Parma Nand Vishan Dass, a peculiar situation arose. In this case the plaintiff had filed a suit on the basis of a promissory note. However, the plaintiff himself left the country and in subsequent proceedings since he was unable to provide the promissory note to his advocate in the foreign country the suit got dismissed. The plaintiff later on filed another suit in the local courts. The defendant took the plea that the present suit was barred by res judicata. The Court held that the judgment on the previous suit since it did not touch upon the merits of the case, therefore could not be held to be res judicata for the present suit.
In the case of A.N. Abdul Rahman v. J.M. Mahomed Ali Rowther, it was held that a decision on the merits involves the application of the mind of the court to the truth or falsity of the plaintiff’s case and, therefore, though a judgment passed after a judicial consideration of the matter by taking evidence may be a decision on the merits even though passed ex parte, a decision passed without evidence of any kind and merely on the pleadings cannot be held to be a decision on the merits.
In the case of Algemene Bank Nederland NV v. Satish Dayalal Choksi the facts were that a summary suit was filed against the defendant in a foreign country. The defendant was granted unconditional leave to defend the suit. He filed his defence but at the final hearing he failed to appear. Hence an ex parte decree was pronounced in favour of the plaintiff. The judgment stated that "the defendant having failed to appear and upon proof of the plaintiff’s claim" judgment is entered for the plaintiff. The Single Judge of the Bombay High Court after verifying the exhibits filed by the Plaintiff before the foreign Court observed that the foreign Court seems to have proceeded to pronounce the judgment in view of the defendant’s failure to appear at the hearing of the case to defend the claim on merits. On that basis the Court held that the judgment was not on the basis of the merits of the case. This decision was appealed against in Appeal No. 869 of 1990 whose decision is hereinbelow.
In Algemene Bank Nederland NV v. Satish Dayalal Choksi (Appeal No. 869 of 1990, unreported judgment decided on 3.8.92), the Bombay High Court reversed the findings of the Single Judge after appreciating the additional evidence which was led in the Appeal Court. The Court held that the judgment and decree was passed after investigating the claim and therefore it was passed on merits. However the Court further held that in their judgment "an ex parte judgment can be held to be not on merits only in cases where a judgment is delivered on the ground of limitation or want of jurisdiction or where the defence is struck off as in the case before the Privy Council. In such cases, the Court declines to examine the merits because the suit is barred by limitation or the Court lacks jurisdiction to entertain the suit or the defendant is prevented from defending the suit. It is only in these kind of exceptional cases that it is possible to suggest that the decree is not passed on merits."
The following are the cases in which the Courts have held that the judgments were passed on the merits of the case.
In the case of Ephrayim H. Ephrayim v. Turner Morrison & Co., it was held that where no defence is raised and only an adjournment is sought, and the request for adjournment is refused and the judgment is proceeded on the evidence of the Plaintiff, it cannot be said that the judgment is not on the merits of the claim. Therefore S. 13(b) of CPC will not be able to come to the rescue of the defendant.
In the case of Gajanan Sheshadri Pandharpurkar v. Shantabai, the Bombay High Court held that the true test for determining whether a decree is passed on the merits of the claim or not is whether the judgment has been give as a penalty for any conduct of the defendant or whether it is based on a consideration of the truth or otherwise of the plaintiff’s case. Since in the present case, although the defendant was considered to be ex-parte, the claim of the plaintiff was investigated into, the objection under S. 13(b) was held to be unsustainable.
In the case of Trilochan Choudhury v. Dayanidhi Patra, the defendant entered appearance in the foreign Court and filed his written Statement. However, on the appointed day for hearing the defendant’s advocate withdrew from the suit for want of instructions and also the defendant did not appear. The defendant was placed exparte. The Court heard the plaintiff on merits and passed the decree in his favour. The Court held that the foreign decree and the judgment was passed on the merits of the claim and was not excepted under S. 13(b) of the CPC.
In the case of Mohammad Abdulla v. P.M. Abdul Rahim, the defendant had passed on a letter of consent to the plaintiff that the decree may be passed against him for the suit claim. The Court held that since the defendant agreed to the passing of the decree against him, the judgment could not be said to be not on the merits of the claim.
In the case of (Neyna Moona Kavanna) Muhammad Moideen V. S.K.R.S.K.R. Chinthamani Chettiar, the defendant entered appearance. The defendant also filed his written statement. However, when the matter was posted for trial, a joint application was moved wherein it was agreed that the matter be postponed for three months with a view to settlement and that if not settled judgment be entered for plaintiffs as prayed for with costs less Rs. 50 and that the property mortgaged with the plaintiff be sold. Subsequently the defendant did not appear and the matter was also not settled. Therefore the Court passed a decree in favour of the plaintiff in terms of the joint application. During execution it was contended that the judgment and decree was not on the merits of the case and therefore was not executable. The court held that since the defendant deliberately chose not to insist on their plea and not to adduce evidence of it, the matter was not in the purview of S. 13(b) of CPC. It was further held that the consent operated as estoppel against the defendant.
In the case of Wazir Sahu v. Munshi Das, the Patna High Court held that if one of the issues had not been dealt with, that itself would not justify a finding that the decision was not upon the merits.
In the case of Vithalbhai Shivabhai Patel v. Lalbhai Bhimbhai, it was held that where the Court had taken evidence and examined witnesses and after taking all the oral evidence and considering the same together with the documents had decreed the claim, the decision must be treated as given on merits and the fact that the defendant did not appear cannot make it otherwise.
In the case of S. Jayam Sunder Rajaratnam v. K. Muthuswami Kangani,, it was held that though the judgment and decree of a foreign court might have been passed ex parte, if it was passed on a consideration of the evidence adduced in the case, the decision must be deemed to have been on the merits.
By reading the aforesaid cases under Section 13(b) of CPC the following proposition may be laid:
A judgment or decree passed by a Foreign Court against an Indian defendant, who has chosen to remain ex-parte, may not be enforceable against him, until unless it can be shown that the said judgment was passed after investigation into, and leading of evidence on the plaintiff’s claim.
The case of Anoop Beniwal v. Jagbir Singh Beniwal relates to a matrimonial dispute between the parties. The facts of the case are that the plaintiff had filed a suit for divorce in England on the basis of the English Act, that is the Matrimonial Causes Act, 1973. The particular ground under which the suit was filed was "that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent." This ground is covered by S. 1(1)(2)(b) of the Matrimonial Causes Act, 1973. The decree was obtained in England and came to India for enforcement. The respondent claimed that since the decree was based on the English Act, there was refusal by the English Court to recognise the Indian Law. The Court held that under the Indian Hindu Marriage Act under S. 13(1)(ia), there is a similar ground which is "cruelty" on which the divorce may be granted. Therefore the English Act, only used a milder expression for the same ground and therefore there was no refusal to recognise the law of India. Thus the decree was enforceable in India.
In the case of I & G Investment Trust v. Raja of Khalikote, a suit was filed in the English Jurisdiction to avoid the consequences of the Orissa Money Lenders Act. The Court held that the judgment was passed on an incorrect view of the International law. The Court further observed that, although the judgment was based on the averment in the plaint that the Indian law did not apply, however there was no "refusal" to recognise the local laws by the Court.
In the case of Ganga Prasad v. Ganeshi Lal, it was alleged by the defendant that since the suit if it was to be instituted in the domestic Courts, it would have been time-barred but under the foreign law it has been decreed and therefore there was a refusal to recognise the Indian law. The Allahabad High Court in this situation held that there was no refusal to recognise the Indian Law. The Court further held that the general rule is that the Court which entertains a suit on a foreign judgment cannot institute an enquiry into the merits of the original action, or the propriety of the decision.
In the case of Panchapakesa Iyer v. K.N. Hussain Muhammad Rowther, the facts were that the foreign Court granted the probate of a will in the favour of the executors. The property was mostly under the jurisdiction of the foreign Court, but some of it was in India. A suit came to be filed by the wife of the testator against the executors for a claim of a share in the property. The suit of the widow was decreed and a part of it was satisfied. The remaining part the widow assigned in favour of the Plaintiff in the present suit. In the present suit the Plaintiff relied upon the foreign judgment for a claim against the defendants for a share in the property within the jurisdiction of the domestic Court. One of the defences which was taken for resisting the suit was that the widow’s claim was founded upon a breach of a law in force in India. The Court observed that
"She made as the Learned Subordinate Judge has found in another part of his judgment, a claim which could not be entirely supported by the law of British India; but that is a different thing from founding a claim on a breach of the law in British India, for instance a claim in respect of a contract which is prohibited in British India."
Another issue which fell for the Courts consideration was that whether the foreign Court had decreed the suit on an incorrect view of International Law. In this regard the Court held that the foreign Court had adopted an incorrect view of International Law, since a foreign Court does not have jurisdiction over the immovable property situated in the other Country’s Court’s jurisdiction. Therefore the judgment was declared to be inconclusive and unenforceable in India.
By reading the aforesaid cases under Section 13(c) of CPC the following proposition may be laid:
In the case of Hari Singh v. Muhammad Saidthe Court found that the foreign Court did not appoint a person willing to act as a guardian ad litem of the minor defendant. The court also held that proceedings could not have proceeded ex-parte against the minor. The Court further held that the minor defendant did not have any knowledge of the suit being pending against him even after he became a major which was before the judgment was passed. On this basis the court held that the passing of the judgment against the minor was opposed to natural justice within the meaning S. 13(d) of CPC. The Court also held that since the legal representatives of one of the defendants were also not brought on record, this also amounted to denial of natural justice. Therefore the judgment was held to be inconclusive qua these defendants.
In the case of R. Vishwanathan v. Rukn – Ul- Mulk Syed Abdul Wajid, the Supreme Court got an occasion to interpret S. 13(d) of CPC. The facts of this case are that the family members of the testator challenged the will by filing caveat when the probate proceedings were initiated with regard to property A in the jurisdiction of Court A. The caveat was dismissed and the appeals therefrom also stood dismissed. Therefore the probate was confirmed. Applications for probate of the will concerning properties at B & C were also filed. (C was a foreign Country). The family members of the testator thereafter filed suits against the executors and other persons for establishing their title to and for possession of the estate disposed of by the will of the testator. The plea taken by the plaintiffs in the suit was that the will was inoperative and the property was a joint family property. The suits were resisted by the executors of the will on the basis that the property was self acquired amongst other grounds. The suits of the plaintiffs before Court A & B was decreed. Before the Appeal Court, the parties were asked to settle the dispute amicably by the Court and upon that the case was adjourned for six months. Thereafter the plaintiffs claimed upon the settled position between the parties. However, the court declined to enter upon an enquiry as to the alleged compromise because in their view the compromise was not in the interest of the public Trust created by will. Since there was a difference of opinion between the two judges comprising of the division bench, the matter was posted before a full bench consisting of three Judges. It so happened that one of the judges of the division bench was included in the present full bench also. No arguments were made by the plaintiffs before the Full Bench and therefore the appeal was allowed and the suits dismissed. The Application for review was also dismissed. Before the C court the executors took the stand that the decision in the A&B Court was res judicata and therefore the present suit should also be dismissed. The plaintiffs before the C Court contended that since judgment concerned properties at A&B, the immovable properties at C would not be affected. The plaintiff further contended that the judgment was not conclusive since the judges showed bias before and during the hearing of the appeals and that they were incompetent to sit in the full bench and "their judgment was corum non judice." The plaintiff’s suit before C Court was decreed on this basis. The executors appealed against the judgment and order. The High court in appeal held that the A&B Court could not have affect the immovables at the C but could affect the movables at C. Against this judgment of the High Court the parties came to the Supreme Court. The plaintiff contended before the Supreme Court that the judgment of A&B Court was not conclusive between the parties in the C Court suit, for the A&B Court was not a Court of competent jurisdiction as to property movable and immovable outside the territory of A&B Court, that the judgment was not binding because the Judges who presided over the Full Bench were not competent by the law of the A&B Court to decide the dispute and that in any event it "was coram non judice" because they were interested or biased and the proceedings before them were conducted in a manner opposed to Natural Justice. Upon consideration of the facts, the Supreme Court observed as follows:
"By S. 13 of the Civil Procedure Code a foreign judgment is made conclusive as to any matter thereby directly adjudicated upon between the same parties. But it is the essence of a judgment of a Court that it must be obtained after due observance of the judicial process, i.e. the court rendering the judgment must observe the minimum requirements of natural justice- it must be composed of impartial persons, acting fairly, without bias and in good faith, it must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case. A foreign judgment of a competent court is conclusive even if it proceeds on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are assured correctness of the judgment in law or on evidence is not predicated as a condition for recognition of its conclusiveness by the Municipal Court. Neither the foreign substantive law, nor even the procedural law of the trial be the same or similar as in the Municipal Court. … The words of the statue make it clear that to exclude a judgement under cl.(d) from the rule of conclusiveness the procedure must be opposed to natural justice. A judgment which is the result of bias or want of impartiality on the part of a judge will be regarded as a nullity and the "trial coram non judice""
In the case of Lalji Raja & Sons v. Firm Hansraj Nathuram, the Supreme Court held that just because the suit was decreed ex-parte, although the defendants were served with the summons, does not mean that the judgment was opposed to natural justice.
In the case of Sankaran Govindan v. Lakshmi Bharathi, the Supreme Court while interpreting the scope of S. 13(d) and the expression "principles of natural justice" in the context of foreign judgments held as follows:
"… it merely relates to the alleged irregularities in procedure adopted by the adjudicating court and has nothing to do with the merits of the case. If the proceedings be in accordance with the practice of the foreign court but that practice is not in accordance with natural justice, this court will not allow it to be concluded by them. In other words, the courts are vigilant to see that the defendant had not been deprived of an opportunity to present his side of the case. … The wholesome maxim audi alterem partem is deemed to be universal, not merely of domestic application, and therefore, the only question is, whether the minors had an opportunity of contesting the proceeding in the English Court. If notices of the proceedings were served on their natural guardians, but they did not appear on behalf of the minors although they put in appearance in the proceedings in their personal capacity, what could the foreign court do except to appoint a court guardian for the minors."
In this case it was held that since the natural guardians who were served with the notices did not evince any interest in joining the proceedings, the appointment of an officer of the court to be guardian ad litem of the minors in the proceedings was substantial compliance of the rule of Natural justice.
In the case of Firm Tijarati Hindu Family Joint Kesar Das Rajan Singh v. Parma Nand Vishan Dass, the suit of the plaintiff was dismissed for non production of the pro note. The Court in this regard held as follows:
"Apart from this it appears to me that the summary dismissal of the suit in this manner offends the principles of natural justice in that the plaintiff had fled to India and in October 1947 it was certainly not practicable either for him to send the pronote to his counsel at Bannu through the post or go there in person with it or to send it though any messenger from this side, and in such circumstances the refusal to allow any further adjournment for the production of the pronote appears to me to be extremely harsh and arbitrary."
In the case of I&G Investment Trust v. Raja of Khalikote, the Court held that although the summons were issued but were never served and the decree was passed ex-parte, the proceedings were opposed to principles of natural justice and thus inconclusive.
By reading the aforesaid cases under Section 13(d) of CPC the following proposition may be laid:
The Foreign Court which delivers the judgment or decree must be composed of impartial persons, must act fairly, without bias in good faith, and it must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case, in order to avoid any allegation of not fulfilling the principles of natural justice in case the judgment or decree comes to the Indian court for enforcement. Unless this is done the judgment or decree passed by a foreign Court may be opposed to Principles of Natural Justice.
E. Where it has been obtained by fraud:
In the case of Satya v. Teja Singh the Supreme Court held that since the plaintiff had misled the foreign court as to its having jurisdiction over the matter, although it could not have had the jurisdiction, the judgment and decree was obtained by fraud and hence inconclusive.
In the case of Sankaran v. Lakshmi the Supreme Court held as follows:
"In other words, though it is not permissible to show that the court was mistaken, it might be shown that it was misled. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely that on the merits, the decision was one which should not have been rendered but that it can be set aside if the Court was imposed upon or tricked into giving the judgment."
In the case of T. Sundaram Pillai v. Kandaswami Pillai, the plaintiff filed a suit against two defendants on the basis that the money extended by him towards the marriage of the plaintiff’s daughter to Defendant No. 1 was repayable by the two defendants jointly. The defendants were set ex-parte. However, defendant No.2 got the exparte order set aside and filed his written statement in which he took the plea that there was no jurisdiction with the Court. But defendant No. 2 did not appear, thereafter and was set ex-parte. The decree was passed in favour of the plaintiff. When the decree came for execution, the defendant No. 2 took the plea that it was obtained by fraud. The Court held as follows:
"All that can be said on this point is that the case brought by the plaintiff was a false case and that defendant 1 assisted him in obtaining a decree by withdrawing from any resistance. It does not seem to me that the words "by fraud" can possibly be applied to circumstances such as these. It cannot be argued that merely because a plaintiff obtains a decree upon evidence which is believed by the Court but which in fact is not true, he has obtained that decree by fraud. There must be fraud connected with the procedure in the suit itself to bring the matter within this clause. This clause also therefore does not apply to the present case."
In the case of Maganbhai Chhotubhai Patel v. Maniben, the court held that since the plaintiff had misled the court regarding his residence (domicile), the decree having been obtained by making false representation as to the jurisdictional facts, the decree was obtained by fraud and hence was inconclusive.
By reading the aforesaid cases under Section 13(e) of CPC the following proposition may be laid:
In case the plaintiff misleads or lies to the Foreign court and the judgment is obtained on that basis, the said Judgment may not be enforceable, however if there is a mistake in the judgment then the Indian courts will not sit as an appeal Court to rectify the mistake .
F. Where it sustains a claim founded on a breach of any law in force in India
In the case of T. Sundaram Pillai v. Kandaswami Pillai, (facts already stated above), the plea of the defendant was that the judgment was obtained in breach of the Contract Act since the defendants at the relevant time were minors when the contract was entered into and since under the Contract Act they were not competent to enter into a contract, the claim was founded on the breach of the Indian Law. The Court held as follows:
"This claim is founded partly perhaps upon a breach of the contract Act, but also partly upon a claim under the Contract Act which in no way involves its breach. Whether that claim is a good one or a bad one is not for me now to decide. The District Munsif of Trivandrum has given a decree to the appellant and that decree sustains a claim which was not wholly founded upon a breach of the Contract Act. It seems to me therefore that the appellant cannot be prevented by clause (f) of S. 13 from executing his decree in British India."
In the case of I&G Investment Trust v. Raja of Khalikote, it was held as follows:
"It is argued that the Orissa Money Lender’s Act precludes a decree being passed for more than double the principal amount and in passing a decree, based on a claim which violates that rule, the English Court sustained a claim founded on the breach of a law in force in the State of Orissa. I am unable to accept the argument. The claim was not based on the law as prevailing in India at all. Rightly or wrongly, the plaintiffs alleged that the parties were governed not by the Indian law but the English Law. The English Court accepted that plea and were consequently not sustaining a claim based on any violation of the law in India. Suppose, that the defendant had submitted to the jurisdiction of the English Court and that Court passed a decree. Such a decree would by implication have decided that the defendant was bound by English Law and that the Orissa Money Lender’s Act did not apply. Such a decision would be binding from the international point of view and the point could not be further agitated in these Courts."
By reading the aforesaid cases under Section 13(f) of CPC the following proposition may be laid:
A judgment or a decree, passed by a foreign court, on a claim founded on a breach of any law in force in India may not be enforceable. However, in case it is based upon a contract having a different "proper law of the contract" then it may be enforced.
It will be seen from the above that even if a judgment or a decree is passed by a foreign Court against an Indian defendant, the judgment or decree may not be enforceable against him due to the operation of S. 13 of CPC. It can be seen that, the plaintiff has to come to the Indian courts to either get the foreign judgment executed under S. 44A or file a fresh suit upon the judgment for its enforcement. Therefore by getting a decree in the foreign Court, the plaintiff is only avoids the inconvenience of leading evidence in the Indian Courts but runs a much bigger risk under S. 13. Therefore it may advisable for a foreign plaintiff to institute claims in India itself in case the defendant is in India. Since internet transactions would involve more of documentary evidence and that comparatively leading of evidence may not be that inconvenient, it may be advisable to avoid the risk under S. 13 and file claims in India itself.
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