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TMI Blog2007 (11) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... t is in the year 1982 that defendant No. 2 is stated to have expressed a desire to invest monies on behalf of his family members and himself to the plaintiff by purchase of shares of M/s United Watches Limited and M/s M.P. United Polypropylene Limited of the United Group. The defendants were to become co-promoters in both the projects and the investments were to be made by the defendants providing for full repatriation facilities of capital and dividend. This proposal was agreed to by the plaintiff but the same was subject to permission and sanctions from various statutory authorities including Reserve Bank of India. It is the case of the plaintiff that the investment was not to carry any interest. It is in pursuance to this oral agreement that defendant No. 2 is stated to have sent monies to the United Towers India Private Limited, R.K. Towers India Private Limited, United Builders Constructions (India) Private Limited and International Industrial Development Consultants Private Limited of the plaintiff as these companies were to transfer their shareholdings to the defendants in M/s United Watches Limited and M/s M.P. United Polypropylene Limited. 3. It is the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Procedure, 1908 (hereinafter referred to as the said Code), bar of limitation, the plaintiff chose not to appear despite being duly served with the writ of summons on 17.4.1989. The service is stated to have been effected by Mr. Tarun Banga, an Advocate based in Delhi, who has filed an affidavit to that effect. The defendants claim that the suit was filed since the plaintiff failed to remit the amount and along with the claim schedule 'A' attached to the Statement of Claims was filed while the money received was filed as schedule 'B' and the balance amount along with interest was filed as schedule 'C'. The defendants claim that the plaintiff entered into a memorandum of understanding with defendant No. 2 when this amount was remitted. It is the English Courts which are stated to have jurisdiction since the amount was remitted from England and was partly repaid back in England and the decree is stated to be as per procedure and laws applicable in England. 7. On the pleadings of the parties, the following issues were framed on 17.9.2002: Issues 1. Whether the judgment and decree of the High Court of Justice Queen's Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment and decree as alleged in para No. 3 of preliminary objections of written statement? 11. The provisions of the said Code have to be averted to for the purposes of consideration of the matter. Section 2(6) of the said Code defines foreign Court to mean the judgment of a foreign Court while Section 2(5) defines foreign Court to mean a Court situate outside India and not established or continued by the authority of the Central Government. It is not in dispute that in the present case the decree which is sought to be enforced is a foreign judgment. The provisions of Section 13 of the said Code deal with the foreign judgment and reads as under: 13. When foreign judgment not conclusive. A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except- (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to a superior Court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect to a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment. 14. It is not in doubt that the Courts in England have been treated as the Courts in reciprocating territory. The decree which has been passed is in the following terms: In The High Court Of Justice 1988 FOLIO No. 1090 Queen's Bench Division Commercial Court In The Matter Of The Foreign Judgments (Reciprocal Enforcement) Act Of 1933 Part I Between: 1) Barnes Investment Limited 2) Devidas Budrani 3) Naraindas Essardas And Sons (Uk) Limited ....Plaintiffs and- 1) Raj Kumar Gupta 2) United Watches Limited 3) United Polypropylene Limited 4) United Bracelets Limited 5) United Straps Limited 6) International Industrial Development Consultants Private Limited 7) United Builders Constructions (India) Pvt. Limited 8) R.K. Towrs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid are the only documents which have been filed in the proceedings before this Court. The decree, thus, states that the writ was duly served on 17.4.1989 upon the plaintiff herein by personal service and was acknowledged by him. It is further stated that in view thereof the plaintiffs in the suit (defendants herein) obtained a judgment against the first defendant therein (plaintiff herein) for the payment of the amount in question. The decree also states the said judgment in the action aforesaid was given on the grounds that no defense has been served by the First Defendant herein . It is, thus, apparent that it is the absence of the plaintiff herein to defend the suit which has resulted in such a decree. There is nothing filed on record to show whether the defendants herein led any evidence in that suit to substantiate their claim. The defendants did not even take care to produce Mr.Banga in the witness box. 17. The defendants have filed a copy of the affidavit of Mr. Tarun Banga, Advocate whereby he has affirmed that he had served the summons and obtained the receipt of service duly signed and stamped. The affidavit goes on to state that the acknowledgement receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and the plaintiff chose not to appear, the defendants cannot be burdened with any further obligation and the plaintiff must suffer the consequences thereof. In normal circumstances this would have been the position, but the decree being a foreign judgment, the same is open to be categorized as non-conclusive if it has not been given on the merits of a case as mandated by Clause (b) of Section 13 of the said Code. 21. The aforesaid aspect is no more res integra in view of the judgment of the Apex Court in International Woollen Mills v. Standard Wool (U.K.) Ltd. where it has been held that in case of a foreign judgment and the conclusiveness in respect of the same, an ex parte decree cannot be presumed to be on the merits. The observations made by the Mumbai High Court in Algemene Bank Nederland NV v. Satish Dayalal Choksi have been approved in the said judgment, where in para-26 of the judgment clearly states that what is stated in para-28 and 29 of the judgment in Algemene Bank Nederland NV v. Satish Dayalal Choksi (supra) lays down the correct proposition of law. The observations made in para-28 and 29 of Algemene Bank Nederland NV v. Satish Dayalal Choksi(supra) are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the defendant that the guarantee which he had given was a blank and undated guarantee. It had been misused by the plaintiff-Bank in the present case. The defendant has also relied upon alterations and erasures in the plaintiff-Bank's register of guarantees to show that this undated guarantee was subsequently entered in the register by altering another entry to indicate that it was given around 7th April 1985. There is no material to show that these aspects of the dispute were ever examined by the Hong Kong Court. The 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. 29. In my view, in these circumstances, the case before me falls under the ratio laid down by the Privy Council in Keymer's case AIR 1916 P.C. 121. The decision of the Hong Kong Court is not given on examination of the points at controversy between the parties. It seems to have been given ex parte on the basis of the plaintiff's pleadings and documents tendered by the plaintiff without going into the controversy between the parties since the defendant did not appear at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court that the defendants seek to enforce the decree. The plaintiff resides and works in Delhi and it is, thus, within the jurisdiction of this Court only that the question of legality and validity of the enforcement of the decree had to be examined. 28. The defendants have also raised an objection about the maintainability of the suit, but then both the objections to the execution and the suit have to be examined together as they have been tried together and the issues have been framed only in the suit. It cannot be said that the plaintiff is devoid of a remedy to object to the execution of the decree. 29. In view of the aforesaid finding, I am of the considered view that the suit and the objections of the plaintiff are liable to succeed while the defendants cannot execute the decree on the ground that the judgment and decree fails to meet the parameters of Clause (b) of Section 13 of the said Code. Issue No. 5: Whether suit is barred by limitation 30. The defendants have raised the plea of limitation. There is no positive evidence led in that behalf. The plaintiffs had filed objections to the execution and have also filed a suit for declarat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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