2001 (12) TMI 864 - SC - Indian Laws

Summary

Issues Involved:
1. Constructive Res-Judicata
2. Execution of a Foreign Decree in India
3. Whether the Decree was on Merits

Summary:

1. Constructive Res-Judicata:
The first issue was whether the High Court was correct in holding that the second Application was barred by the principles of constructive res-judicata. The Court noted that the first Application was based on non-compliance with Sections 38, 39, and 40 of the Code of Civil Procedure (CPC), while the second Application argued that the decree was not on merits as per Section 44-A read with Section 13(b) of the CPC. Both Applications were filed and heard together before any decision was given on the first Application. The Court held that Explanation IV to Section 11 of the CPC would apply only if a final decision had been given before the second Application was filed. Since no such final decision existed, the second Application was not barred by res-judicata or constructive res-judicata.

2. Execution of a Foreign Decree in India:
The second issue was whether the decree from the English Court could be executed in India u/s 44-A of the CPC. Section 44-A allows execution of decrees from superior Courts of reciprocating territories, provided the decree does not fall within any exceptions specified in Section 13 of the CPC. Section 13(b) states that a foreign judgment is not conclusive if it has not been given on the merits of the case.

3. Whether the Decree was on Merits:
The Court examined whether the decree from the English Court was on merits. It reviewed various legal authorities and cases, concluding that a decree is on merits if the Court has considered the truth or falsity of the plaintiff's case by examining evidence. The Court found that the English Court's decree did not show any consideration of the merits or evidence, and it was passed ex-parte without addressing the Appellant's defense regarding the inferior quality of goods. Therefore, the decree was not on merits and could not be enforced in India.

Conclusion:
The Supreme Court allowed the appeal of the Appellant, holding that the decree from the English Court was not on merits and could not be executed in India. The second appeal by the Respondent was dismissed. There was no order as to costs in both appeals.