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2023 (10) TMI 69 - HC - Insolvency and BankruptcyCIRP - Execution of decree awarded by foreign court - Overriding provision of IBC - execution proceedings can be continued in view of the interim moratorium or not - HELD THAT - If any act violates the provisions of FEMA, permission of RBI may be obtained postfacto. Therefore, it cannot be said that the foreign judgement is in breach of Indian law or fails to recognise such breach and therefore is inconclusive. As far as the contention of the learned counsel for the petitioner that the Foreign Judgement has purportedly held that foreign decree cannot be enforced in India and ought to be enforced in other countries is concerned, it is clear that such an observation was only to suggest that the decree holder had an option to enforce a foreign decree against the assets of judgement debtor in other countries. The judgements cited in the case of Mrs Shobha Vishwanatha 1996 (4) TMI 529 - MADRAS HIGH COURT , Algemene Bank Netherland NV 1989 (12) TMI 271 - HIGH COURT OF BOMBAY were in the context of FERA regime and therefore reliance by the counsel for the petitioner on these are misplaced. The conduct speaks volumes in the case i.e. how clearly after every attempt to stall the execution proceedings failed, did the petitioner, as an after thought, try to forestall the execution proceedings. There is no merit in the petition - Petition dismissed. Seeking a formal order staying further proceedings in the execution petition in view of deemed stay of further proceedings as per the provisions of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - As far as the IBC is concerned and with regard to the correctness of the order with regard to the currency of the interim moratorium, the preamble provides to complete the resolution in a time bound manner. Now coming to the question of constructive res-judicata as held in the case of Sarguja Transport Services 1986 (11) TMI 377 - SUPREME COURT , that though the principles of res-judicata is not strictly applicable to writ petitions under Article 227 of the Constitution of India, the legal principles underlying Order XXIII, Rule 1(4)(b) would as a matter of public policy be applicable to writ petitions. Application dismissed.
Issues Involved:
1. Enforceability of foreign judgment and decree. 2. Objection to the enforceability of the foreign judgment based on Section 13 of the CPC. 3. Applicability of interim moratorium under Section 96 of the IBC during execution proceedings. Issue-wise Summary: 1. Enforceability of Foreign Judgment and Decree: The petitions arose from a foreign judgment and decree passed by the High Court of Justice Business and Property Courts of England and Wales, Queens' Bench Division, Commercial Court. The decree was sought to be enforced in India, leading to various orders in the Commercial Court. The petitions challenged these orders. 2. Objection to Enforceability Based on Section 13 of the CPC: The petitioner objected to the enforceability of the foreign decree under Section 13 of the CPC, arguing that the foreign judgment was not conclusive. The petitioner raised multiple grounds: - The foreign judgment was not given on the merits of the case. - The judgment debtor was not a resident of England, and the personal guarantee was executed in Australia. - The foreign judgment failed to recognize Indian law, specifically the Foreign Exchange Management Act (FEMA) and its regulations. - The judgment violated principles of natural justice as the petitioner was not allowed to appear via video conferencing. - The foreign judgment was obtained by ignoring the law of India and the expert witness had a conflict of interest. The court rejected these objections, stating that the foreign judgment was given on merits and complied with Section 44A of the CPC. The court emphasized that the personal guarantee was an independent obligation and not coextensive with the company's liabilities. The court also found that the expert witness's testimony was valid and that the foreign judgment correctly interpreted FEMA provisions, allowing post-facto permission for guarantees. 3. Applicability of Interim Moratorium Under Section 96 of the IBC: The petitioner argued for a stay of execution proceedings based on an interim moratorium under Section 96 of the IBC, triggered by personal insolvency proceedings filed by the State Bank of India. The court noted the petitioner's inconsistent conduct, including challenging the constitutionality of Section 96 of the IBC and seeking a stay of insolvency proceedings. The court held that the petitioner had waived his statutory rights by not raising the issue earlier and by his actions in other proceedings. The court emphasized the need for expeditious resolution under the IBC and rejected the petitioner's request for a stay. Conclusion: The court dismissed both Special Civil Application No. 5509 of 2021 and Special Civil Application No. 18901 of 2022, upholding the enforceability of the foreign judgment and rejecting the applicability of the interim moratorium under Section 96 of the IBC. The court directed the executing court to decide the execution proceedings within three months. The requests for stay and operation of the judgment were also rejected.
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