2009 (12) TMI 526 - HC - Companies Law

Objections of the appellant based on section 13 of the CPC, are concerned the learned judge did not examine the same on the ground that such an examination tantamount to going beyond the decree and is not permissible for the company court Held that - While sections 13 and 14 embody a rule of evidence whenever a foreign decree is sought to be relied upon for the recognition of any right based on such a foreign decree section 44A deals with enforcement of specified class of foreign decrees by way of execution of the decrees. . However, the conclusive nature of the judgment is subject to the various exceptions specified under clauses (a) to (f) of section 13, that means that the party resisting the foreign judgment may not be able to resist it on the ground that either the judgment is erroneous but can still be resisted on grounds, such as lack of jurisdiction on the part of the court which pronounced the judgment or that there was a failure to comply with the principle of natural justice in the process of the judgment, etc Section 86 of the Evidence Act embodies a presumption regarding the judicial records of any country not forming part of India. In our opinion section 86 of the Evidence Act must necessarily be read in conjunction with section 14 of the CPC. What is the interface between both the abovementioned sections is a matter which requires an examination. For all the abovementioned reasons we are of the opinion that these various questions pointed out are required to be examined after an appropriate opportunity to both the parties and accordingly we deem it appropriate to remit the matter to the learned company judge for an appropriate adjudication of the issues in accordance with law. Accordingly the matter is remitted back to the learned company judge.

Issues Involved:
1. Jurisdiction of the foreign court.
2. Violation of natural justice principles.
3. Allegations of fraud in obtaining the foreign decree.
4. Requirement of a certified copy of the foreign decree.

Detailed Analysis:

Jurisdiction of the Foreign Court:
The appellant contended that the U.S. District Court, Middle District of North Carolina, lacked jurisdiction to adjudicate the dispute. The appellant argued that the contract was concluded in Kolkata, and no part of the cause of action arose within the jurisdiction of the U.S. court. The High Court noted that the U.S. court recorded facts that it believed conferred jurisdiction. However, the High Court emphasized that the company court should not go beyond the decree to determine jurisdiction, as it would convert the company court into an appellate forum against the decree. The High Court acknowledged that the jurisdictional objection could be raised under Section 13 of the CPC, which embodies rules of evidence regarding the conclusiveness of foreign judgments.

Violation of Natural Justice Principles:
The appellant argued that the foreign decree was obtained in violation of the principles of natural justice. The High Court observed that the U.S. court had considered evidence and materials before passing the decree, indicating that the decree was not merely based on the failure of the defendant to offer a defense. The High Court concluded that the decree was connected with the merits of the case and not in violation of natural justice principles.

Allegations of Fraud in Obtaining the Foreign Decree:
The appellant alleged that the foreign decree was obtained by fraud, which is a ground for non-recognition under Section 13 of the CPC. The High Court did not specifically address the fraud allegations in detail but remitted the matter back to the company judge for an appropriate adjudication of all issues, including fraud, in accordance with the law.

Requirement of a Certified Copy of the Foreign Decree:
The appellant contended that the respondent did not produce a certified copy of the foreign decree before the company judge, making the judgment legally untenable. The High Court emphasized the importance of a certified copy under Section 14 of the CPC, which mandates a rebuttable presumption that a foreign judgment was pronounced by a competent court. The High Court also discussed Section 86 of the Evidence Act, which deals with the presumption regarding the judicial records of foreign countries. The High Court noted that Section 86 should be read in conjunction with Section 14 of the CPC and that the absence of a certified copy was a significant issue requiring examination.

Conclusion:
The High Court concluded that the various objections raised by the appellant under Section 13 of the CPC were not adequately examined by the company judge. The court held that the principles of conflict of law, as embodied in Sections 13, 14, and 44A of the CPC, should be considered. The High Court remitted the matter back to the company judge for a comprehensive adjudication of all issues, including jurisdiction, natural justice, fraud, and the requirement of a certified copy of the foreign decree. The court emphasized the need for an early consideration of the matter due to the prolonged litigation. The appeal was accordingly disposed of.

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