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C.p.c. project on foreign judgments deals with the foreign judgments in contect of civil procedure.
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ACKNOWLEDGEMENT 3
JUDGMENTS UNDER SECTION 13
With the emergence of globalization, and transactions taking place not only within the country but also between countries, it is indispensible that the jurisdictional issues as to the disputes between the parties occur during such cross-border transactions. Every party have their own concern as to their rights and in that process try to ignore the procedure agreed when they dispute or try to over ride such agreements by seeking the local courts to quash the foreign judgment. The courts in such a critical situation are unable to do a justification to the
parties because there are certain restrictions as to the enforcement and execution of foreign judgments. Under Indian Law, execution of decrees, whether foreign or domestic, is governed by the provisions of the Code of Civil Procedure, 1908. The CPC provides two ways of getting a foreign judgment 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 judgment under section 13.
The Sections 13 and 14 of CPC enables the rule of res judicata in case of foreign judgments. These provisions embody the principle of private international law that a judgment delivered by a foreign court of competent jurisdiction can be enforced by an Indian court and will operate as res judicata between the parties thereto except in the cases mentioned in Section
I. PROVISIONS OF CPC WITH RESPECT TO ENFORCEMENT AND EXECUTION OF FOREIGN JUDGMENTS
Section 2(6) of the Civil Procedure Code 1908, defines ‘foreign judement’ to mean “any judgement of a foreign Court” and Section 2(5) of the code defines a ‘foreign court’ to mean a “Court situate outside India and not established or continued by the authority of the Central Government”. Thus, “a foreign judgement would mean adjudication by a foreign court upon the matter before it” and not merely a statement of the reasons for the order.” 1
A judgement given by a foreign court would not cease to be so if, as a consequence of political change, the territory where the court was situated at the time of the judgement later becomes part of India. However, an act of state is not a foreign judgment. 2
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. S. 44A. Execution of decrees passed by Courts in reciprocating territory - (1) Where a certified copy of decree of any of the superior Courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court. (2) Together with the certified copy of the decree shall be filed a certificate from such superior Court stating the extent, if any, to which the decree has been satisfied or adjusted
1 Brijlal V. Govind AIR1947 PC 192 2 SrimanV. Goswami, ILR 17 Bom 620
(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 as obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in India.
In the fresh suit, the said decree will be treated as another piece of evidence against the defendant under S.14. S. 14 Presumption as to foreign judgments.- The Court shall presume upon the production of any document purporting to be a certified copy of a foreign judgment, that such judgment was pronounced by a Court of competent jurisdiction, unless the contrary appears on the record; but such presumption may be displaced by proving want of jurisdiction.
The CPC provides that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties and between parties under whom they or any of them claim litigating under the same title except under certain circumstances stated in S. 13. Under S. 13 of the CPC, a foreign judgment is conclusive and will operate as res judicata between the parties. In other words, a foreign judgment shall not be conclusive as to any matter thereby directly adjudicated upon, if any of the conditions under clauses (a) to (f) of S. 13 is satisfied and then it will open to a collateral attack. 4 Dicey rightly states: "A foreign judgment is conclusive as to any matter thereby adjudicated upon and cannot be impeached for any error either of fact; or of law" 5 However, under the CPC, foreign judgments are not conclusive if it falls under any of the following circumstances:
4 Satya V. Teja Singh (1975) 2 SCR 197 5 Conflict of Law, 7th Edn. (Rule 183) cited in Vishwanathan V. Abdul Wajid (1963) 3 SCR 22
a. Not pronounced by a court of competent jurisdiction: Jurisdiction is a prima facie issue, which a court has to see at the time of initiation of suit or appeal. If a court has no jurisdiction, it has no value in the eyes of law. Irregularity in exercising jurisdiction be repaired at the level of appeal but lack of jurisdiction cannot be curtailed in any circumstances. Hence, when a judgement is delivered by a court which was not competent to deliver the same, it cannot be rendered enforceable or executable. If a foreign court incompetent to deliver the judgement of a case, delivers the same, it cannot be executed in India. In the case of Moloji Nar Singh Rao v. Shankar Saran 6 , 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 ex parte against the defendants. The claim was decreed. The decree was brought to the local court for execution. After litigating on the executability of the foreign decree the matter came up before the Supreme Court of India. The issue which came up 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: a. The respondents (defendants) were not the subjects of foreign country. b. They did not owe any allegiance to the Ruler of foreign country and therefore they were under no obligation to accept the judgments of the Courts of that state. c. (^) They were not residents in that state when the suit was instituted. d. They were not temporarily present in that State when the process was served on them. e. They did not in their character as plaintiffs in the foreign action themselves select the forum where the judgment was given against them f. They did not voluntarily appear in that court. g. They had not contracted to submit to the jurisdiction of the foreign court. 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 7 , opined that in enforcement of
6 AIR 1962 SC 1737 7 21 Ind. App. 171. A.S.Subramaniam Chettiar v. M.K. Srinivasa Ayyar, AIR 1951 Mad. 289
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. Similarly in K.N. Guruswami v. Muhammad Khan Sahib 11 , the court expressed its view as to the differences in individual capacity and contractual capacity. In this case, 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.
In the case of Ramanathan Chettiar v. Kalimuthu Pillai 12 , the Court referring the above decision laid down the circumstances when the foreign courts would have jurisdiction under this Section. The circumstances mentioned are as follows: a. Where the person is a subject of the foreign country in which the judgment has been obtained against him on prior occasions. b. Where he is a resident in foreign country when the action is commenced. c. Where a person selects the foreign Court as the forum for taking action in the capacity of a plaintiff, in which forum he is sued later d. Where the party on summons voluntarily appears e. Where by an agreement a person has contracted to submit himself to the forum in which the judgment is obtained. However, the Madras High Court in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram 13 , 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.
11 AIR 1933 Mad 112. 12 AIR 1914 Mad. 556, Chormal Balchand Firm Chowrahat v. Kasturi Chand Seraoji, AIR 1938 Cal 511 13 AIR 1936 Mad. 553
In the case of Sankaran v. Lakshmi 14 , the court considered whether the minors had an opportunity of contesting the proceedings 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 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 15 , the Supreme Court in respect of a matrimonial dispute held that only those Courts which the 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 16 , 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 was obtained by the husband from the Nevada State Court in USA in absentum of the wife without her submitting to its jurisdiction. It was held to be not binding and valid upon a criminal court in proceedings for maintenance. The case of I&G Investment Trust v. Raja of Khalikote 17 , involved an action initiated in England against an Indian citizen 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 18 , it was held that failing in an action to set aside a foreign decree in the foreign Courts does not amount to submission to 14 AIR 1974 SC 1764. 15 (1991)3 SCC 451. 16 AIR 1975 SC 105. 17 AIR 1952 Cal. 508. 18 AIR 1934 Mad. 434.
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 24 , 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. 25 the Supreme Court held that even though 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. b. Not given on the merits of the case: In order to be operated as res judicata, a foreign judgement must have been given on the merits of the case. Some propositions has been laid that if a decree has been passed ex-parte, it must not have been on merits but the mere fact of a decree being ex-parte will not necessarily justify a finding that it was not on merits. The landmark decision under this head has been the decision of the Privy Council in the case of D.T. Keymer v. P. Viswanatham. 26 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.
24 AIR 1948 Mad. 203. 25 (1990)3 SCC 481 26 AIR 1916 PC 121.
The above decision was relied in the case of R.E. Mahomed Kassim & Co. v. Seeni Pakir-bin Ahmed 27. 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 28 , 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 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. However, this decision may be contra to the decision of the Supreme Court in the case of Y. Narasimha Rao v. Y. Venkata Lakshmi 29 , where the Court had held that the judgment should be a result of the contest between the parties. This 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
27 AIR 1927 Mad. 265(FB). 28 AIR 1946 Mad. 296. 29 (1991)3 SCC 451
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 37 , 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 38 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 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 reversed when appealed against because the judgment and decree was passed after investigating the claim and therefore it was passed on merits. Further the Court enunciated the “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.” In the aforementioned cases the Courts have held that the judgments were not passed on the merits of the case and hence were inconclusive. The following are the cases in which the Courts have held that the judgments were passed on the merits of the case. 37 AIR 1928 Rangoon 319. 38 AIR 1990 Bom. 170.
In the case of Ephrayim H. Ephrayim v. Turner Morrison & Co. 39 , 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. In the case of Gajanan Sheshadri Pandharpurkar v. Shantabai^40 , the 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 given 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 41 , 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). In the case of Mohammad Abdulla v. P.M. Abdul Rahim 42 , 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. Chinthamani Chettiar 43 , 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 39 AIR 1930 Bom. 511 40 AIR 1939 Bom. 374. 41 AIR 1961 Ori. 158. 42 AIR 1985 Mad. 379 43 AIR 1929 Mad. 469.
13(1)(i-a), there is a similar ground which is “cruelty” on which the divorce may be granted. Thus the decree was enforceable in India. In the case of I & G Investment Trust v. Raja of Khalikote 48 , 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 49 , 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 50 , 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. The court had to consider 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. In Ruchi Majoo V. Sanjeev Majoo 51 the court expressed that it is the duty of a Court exercising its Parens Patraie jurisdiction as in cases involving custody of minor children is all the more onerous. Welfare of the minor in such cases being the paramount consideration; the court has to approach the issue regarding the validity and enforcement of a foreign decree or order carefully. Simply because a foreign court has taken a particular view on any aspect 48 AIR 1952 Cal. 508. 49 AIR 1924 All. 161. 50 AIR 1934 Mad. 145. 51 AIR2011SC
concerning the welfare of the minor is not enough for the courts in this country to shut out an independent consideration of the matter. Objectivity and not abject surrender is the mantra in such cases. That does not, however, mean that the order passed by a foreign court is not even a factor to be kept in view. But it is one thing to consider the foreign judgment to be conclusive and another to treat it as a factor or consideration that would go into the making of a final decision. When a foreign judgement is found on a ground which is not recognized by Indian law or international law, it is a judgement, which is in defiance of the law. It is inconclusive and unenforceable in India. Hence by reading the aforesaid cases under Section 13(c) of CPC it can be inferred that: i. A judgment or decree passed by a foreign Court upon a claim for immovable property which is situate in the Indian territory may not be enforceable since it offends International Law. ii. A judgment or decree passed by the foreign Court to where before a contrary Indian law had been shown, but the Court had refused to recognise the law, then that Judgement or decree may not be enforceable. However if the proper law of contract is the foreign law then this may not be applicable. It may be noted that under Indian Law wager contracts are void. On the basis of propositions laid in some of the cases, a judgment on the suit based upon a wager which may be instituted in a foreign country where wagers are not prohibited by the laws of that country, may not be enforceable in India.
A judgement has to be given after due observance of the judicial process meaning thereby some minimum requirements of natural justice has to be maintained in order to do justice with the parties to the suit. These minimum requirements consist of act fairly, without bias and good faith etc. Even a judgement given without providing an opportunity to opposite party to represent its case is opposed to natural justice. The concept of audi alteram partem is deemed to be of universal, not merely of domestic application. However, the expression natural justice relates to the irregularities of procedure rather than merits of the case. In the case of Hari Singh v. Muhammad Said 52 the 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
52 AIR 1927 Lah. 200.