Firm Kanhaiyalal Mohanlal Somani v. Paramsukh Alias Premsukh Jaskaran Kabra Maheshri .

1. This is plaintiff-decree-holders' appeal.

2. The facts are: The defendant respondent is a permanent resident of Jhadapa, tahsil Harda, district Hoshangabad. The plaintiff firm carried on business at Indore. On the basis of certain transactions with the defendant the plaintiff firm obtained against him an ex parte decree on 9-2-1949 in a Court at Indore. On 15-2-1949-the respondent applied to the Indore Court to set aside the ex parte decree. The application was dismissed in default on 23-7-1949. Plaintiff thereafter Instituted a Civil Suit No. 61-33 of 1950 in the Court at Harda on the judgment of the Indore Court. That suit was dismissed on 12-2-1952 on the ground that the judgment of the Indore Court was not a foreign judgment. No appeal was preferred against this decision.

3. On 11-9-1951 the decree-holder applied for transfer of the decree of the Indore Court to Harda for execution. That application was allowed on 22-3-1852 and the necessary certificate was issued on 14-4-1952. On 23-8-1952 the decree-holder applied for execution.

4. On 1-9-1952 the judgment-debtor objected to the execution on the ground that the decree of the foreign Court could not be executed at Harda. This objection was disallowed by the trial Judge who had decided Civil Suit No. 61-B of 1950, but the objection was upheld by the appellate Court. The decree-holder has appealed.

5. The learned counsel for the appellant pressed the following points and no other:

(a) That the ex parte decree by the Court at Indore is not a nullity so far as the Harda Court was concerned, and

(b) that the decision in Civil Suit No. 61-B of 1950 operated as res judicata.

6. Relying on ‘Subbaraya Setty and Sons v. Palani Chetty and Sons’, AIR 1952 Mys 69 (A) the lower appellate Court held that the decree passed by the Indore Court in 1949 was not executable by the Court at Harda. It was also held that the inclusion of the Indore State in Part B States of the Indian Union from 26-1-1950 did not make the judgment of the foreign Court valid and executable in Part A State inasmuch as Article 261(3) of the Constitution is not retrospective.

7. As defined in the Code of Civil Procedure as in 1949, a “foreign Court” meant a Court situate beyond the limits of provinces which had no authority in provinces and was not established or continued by the Central Government. It is not disputed that the Maharaja of Indore had an independent civil, criminal and fiscal jurisdiction throughout the State of Indore at the time the action was commenced and the decree was passed. As held by the Judicial Committee of the Privy Council in ‘Gurdyal Singh v. Raja of Faridkote’, 22 Cal 222 (B) the judgment of a Court of such a State must be regarded in the Courts of Dominion of India as a foreign judgment.

8. By Section 7(1)(b) of the Indian Independence Act, 1947, as from the appointed date i.e 15-8-1947 the suzerainty of His Majesty over the Indian States lapsed and with it all treaties and agreements in force at the date of the passing of the Act between His Majesty and the Rulers of the Indian States. There was thus no doubt that at the relevant time the Court at Indore was a foreign Court. The learned counsel for the appellant did not rely on the Instrument of Accession of that State. I therefore leave it out of consideration.

9. Section 13 of the CPC states the exceptions when a foreign judgment is not 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. The exception which is in point in this case is where the judgment has not been pronounced by a Court of competent jurisdiction. The term “Court of competent jurisdiction” refers not to the intra-territorial but to the extraterritorial competence of a Court or, rather, to the extent to which the competence of a Court is admitted in any country other than the country to which the Court belongs.

10. In an action ‘in personam’ in respect of any cause of action the Court of a foreign country has jurisdiction where at the time of the commencement of the action the defendant was resident or present in such country, so as to have the benefit, and be under the protection, of the law therein, or where the defendant is, at the time of the judgment in the action, a subject or citizen of such country, or where the party objecting to the jurisdiction of such Court has by his own conduct submitted to such jurisdiction i.e, has precluded himself from objecting thereto (a) by appearing as plaintiff in the action or counter-claiming, (b) by voluntarily appearing as defendant in such action, or (c) by having expressly or impliedly contracted to submit to the jurisdiction of such Court.

11. At the time the action commenced in the Court at Indore and when it was concluded the defendant was not resident or present in that State, nor had he contracted to submit to the jurisdiction of the Court in that State. The only ground on which he is said to have precluded himself from objecting to the jurisdiction of that Court is that he made the application on 15-2-1949 to set aside the ex parte decree. The learned counsel has not drawn my attention to any authority in support of the submission that the judgment ‘in absentum’ though a nullity at the time it was passed, was validated by the defendant making an application to set it aside.

12. As observed by the Judicial Committee in ‘Gurdyal Singh v. Raja of Faridkote (B) (supra):

“In a personal action, to which none of these causes of jurisdiction apply, a decree pronounced ‘in absentum’ by a Foreign Court, to the jurisdiction of which the defendant has not in any way submitted himself, is by International Law an absolute nullity. He is under no obligation of any kind to obey it, and it must be regarded as a mere nullity by the Courts of every nation, except (when authorized by special local legislation) in the country of the ‘forum’ by which it was pronounced.”

13. The cases referred to by their Lordships are those stated in the foregoing paragraph. Their Lordships pointed out that there was nothing in the case to take it out of the general rule that the plaintiff must sue in the Court to which the defendant is subject at the time of the suit (‘Actor sequintur forum rei’), which rule was rightly stated by Sir Robert Phillimore (International Law, Vol. 4, sec. 891) to “lie at the root of all international, and of most domestic, jurisprudence on this matter.”

14. In ‘Narappa v. Rangasami’, AIR 1933 Mad 393 (C) it was held that the application of the judgment-debtor to set aside the decree did not amount to submission to jurisdiction and did not validate the decree which was a nullity at the time it was passed. ‘Hari Singh v. Muhammad Said’, 8 Lah 54 : (AIR 1927 Lah 200) (D) which appears to have taken a different view, was explained.

15. The Lahore view was apparently based on ‘Guiard v. De Clermont and Donner’, 1914-3 KB 145 (E). The facts of that case were: The defendant against whom an ex parte decree was passed made an application to set aside that decree. The application was allowed. The plaintiff appealed to the Court of appeal which allowed the appeal and upheld the first judgment of the trial Court on the ground that the defendant's opposition was too late. Thereafter the plaintiff sued on the judgment of the Court of appeal restoring the first judgment of the trial Court.

16. It was held that the judgment was enforceable inasmuch as it took its whole force and effect from the decision of the Court of appeal and was not merely the original default judgment. It was also held that the defendant had voluntarily appeared in the appellate proceedings. This case is not an authority for the contention that an ex parte foreign judgment can be the basis of a suit under the Code of Civil Procedure. By the dismissal of the application to set aside the ex parte judgment the character of the judgment was not changed.

17. In ‘Esdale v. Bank of Ottawa’, (1920) 51 DLR 485 (F & G) it was held that where the plaintiff's claim rests entirely on a foreign judgment obtained ex parte and the defendant has never shown any intention to submit to the jurisdiction of that foreign Court, an application on his behalf for an order setting aside the judgment does not constitute a voluntary submission.

18. ‘Gurdyal Singh v. Raja of Faridkote’, (B) (cit. sup.) was followed and ‘Guiard v. De Clermont and Donner’, (E) was distinguished. In ‘Ramkisan v. Harmukhrai’, ((S) AIR 1955 Nag 103) (H) a Division Bench of this Court has held that the submission to jurisdiction must be prior to the passing of the decree. I therefore hold that the judgment of the Indore Court was not passed by a Court of competent jurisdiction within the meaning of Section 13(a) of the CPC, and is a nullity.

19. The second contention of the appellant is that the decision in Civil Suit No. 61-B of 1950 is res judicata in these proceedings. The only documents regarding that suit which are on record are an “order dated 12-2-1952” and the decree following it. It is unfortunate that the trial Court has nos exhibited these and other documents and the lower appellate Court has failed to notice this omission. The plaint is not on record.

20. It is not clear if the defendant had filed his written statement objecting to the jurisdiction of the Court. It appears that the trial Judge Shri N.P Mishra ‘suo motu’ raised the point that the suit was not maintainable on the ground that the judgment of the Indore Court obtained by the plaintiff was not a foreign judgment. The learned Judge observed:

“In respectful agreement with this line of reasoning and thought adopted in ‘Chunnilal v. Dundappa’, ILR (1950) Bom 640 : (AIR 1951 Bom 190) (I) and applying the same test to this suit, I find that the suit is not tenable for this distinction of a foreign judgment did not exist on the date this suit was filed. Judgment and decree sought to be enforced under this suit on the passing of the Constitution of India had become enforceable by this Court even in the absence of such a suit.”

21. A foreign judgment, which is conclusive under Section 13 of the CPC, can be enforced in India by instituting a suit on such judgment or by execution of the decree where it is permissible to do so under S. 44 of the Code. Where a foreign judgment has not been pronounced by a Court of competent jurisdiction, it is not conclusive under S. 13. As already pointed out, the Indore Court was not a Court of competent jurisdiction and consequently a suit on the judgment was not tenable. The decision of the learned Judge dismissing the suit was therefore correct though the reasons are erroneous.

22. The learned counsel submitted that the finding of the learned Judge that the decree of the Indore Court was executable in India on the date of the order operates as res judicata in these proceedings. There is no material on record to show that the question whether the judgment of the Indore Court ceased to be a foreign judgment and was executable by a Court at Harda was directly and substantially in issue between the parties in that suit.

23. I have already pointed out that it is not known whether the defendant had raised any such plea. Even if it were so, the adverse finding against the successful defendant cannot be res judicata in a subsequent suit between the parties. Thus, where a decree is one of dismissal in favour of the defendant but there is an adverse finding against him on one point, a plea of res judicata cannot be founded upon that decision because the defendant having succeeded on the ocher plea had no occasion to go further as to the finding against him. ‘Midnapur Zamindari Co. Ltd. v. Naresh Narayan Roy’ 48 Cal 460 : (AIR 1922 PC 241) (J), ‘Narayan v. Syed Bahadur’, AIR 1918 Nag 91 (K), ‘Govinda v. Laxman’, AIR 1923 Nag 139, col. 1(L). The second contention therefore fails.

24. The real questions that fall for consideration in this appeal are two; (1) whether such a decree which when passed was, according to the private international law, a nullity in a foreign State where it was to be enforced, has become executable in a Court at Harda, by reason of any subsequent change in the status either of the Indore State or of the plaintiff; and (2) whether such a decree has become executable in this State consequent on the passing of the Code of Civil Procedure (Amendment) Act (2 of 1951) which came into force on 1-4-1951.

25. Relying on ‘Subbaraya Setty and Sons v. Palani Chetty and Sons’, (A) (cit. sup.) the lower appellate Court decided the first question in the negative. The second question was not raised before it and was not decided.

26. The learned counsel for the appellant not only did not raise either of these contentions but made no attempt to show that the decision of the lower appellate Court was in any way incorrect. All that was stated in ground No. 2 of the memorandum of appeal was that ‘Subbaraya Setty's case’ (A) does not lay down the correct law, but no argument was advanced in support of this ground. Though the appeal cannot succeed on the arguments advanced in this Court, I propose to examine these points since the appellant will probably have no remedy to enforce its claim against the respondent if the appeal fails.

27. Under Article 1(3) of the Constitution, the territory of India comprises of the territories of the States specified in parts A, B and C of the First Schedule and other territories specified in that Article. Under Article 261(1) full faith and credit shall be given throughout the territory of India to public acts, records, and judicial proceedings of the Union and of every State.

28. Under cl. (3) final judgments or orders delivered or passed by civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law. It was held by the Supreme Court in ‘Janardhan v. State of Hyderabad’, AIR 1951 SC 217 (M) that Article 32 of the Constitution was not intended to operate retrospectively and therefore something which was legally good on 25-1-1950 cannot be held to have become had on 26-1-1950.

29. In ‘Keshavan Madhava Menon v. State Of Bombay.’, AIR 1951 SC 128 (N) it was held that Article 13 (1) of the Constitution had no retrospective operation and the pending proceedings were not affected by that Article. In (S) AIR 1955 Nag 103 (H) it was held that an ex parte decree of an Indore Court passed before the Constitution, which was without jurisdiction when it was passed, did not change its legal character because of Article 261(3) of the Constitution. It was also held that the Constitution could not be said to have retrospectively clothed the Indore Court with jurisdiction.

30. Ex parte decrees obtained in a State of the Dominion of India were held inexecutable in the Mysore State. See ‘Subbaraya Setty's case’ (A) and the earlier cases of that Court referred to in para. 17 of the judgment. This view was accepted in ‘Premchand v. Danmal’, AIR 1954 Raj 4 (O), ‘Vareed v. Gopalbai’, AIR 1954 Trav-Co 358 (FB) (P) and ‘Firm Shah Kantilal v. Dominion of India’, AIR 1954 Cal 67 (Q).

31. In AIR 1951 Bom 190 (I) it was held that a decree obtained in 1927 in the Court of a Civil Judge at Belgaum, which was a nullity so far as the defendant who was then a subject of the Jamkhandi State and residing there was concerned, could be executed against him after the merger of that State in the Bombay Presidency on 25-2-1948.

32. It was observed that the defendant was not entitled to contest that the decree could not be executed against him not because in consequence of any change of law but as a result of the alteration of his status by an act of State. It was stated that the judgment-debtor lost that status and was from at least 25-2-1948 and onwards a national of the Indian Union and a citizen of the Dominion of India. This decision was distinguished in ((S) AIR 1955 Nag 103 (H).

33. AIR 1951 Bom 190 (I) was approved by a Full Bench of the Bombay High Court in ‘Bhagwan v. Rajaram’, AIR 1951 Bom 125 (R). Chagla, C.J delivering the judgment of the Full Bench, accepted the principles of private international law and the position that the judgment of the Sholapur Court was a foreign judgment ‘qua’ the Akalkot Court and could not be executed by the latter Court. Still, he was of the view that the judgment of the Sholapur Court was not a nullity but was valid and binding so far as the Sholapur Court was concerned and the prohibition was only against it executability by an Akalkot Court by rules of private international law. That decree became executable when the character of the Akalkot Court had changed by the merger of that State in the State of Bombay.

34. According to the learned Chief Justice, this was not in any way violating private international law. It was pointed out that the statement in ‘Gurdyal Singh v. Raja of Faridkote’ (B) (cit. sup.) (which is extracted in para. 10 supra) must be read as qualified by the following passage at page 238 of the report:

“He is under no obligation of any kind to obey it, and it must be regarded as a mere nullity by the Courts of every nation, except (when authorised by special local legislation) in the country of the forum by which it was pronounced.”

35. According to the learned Chief Justice, the view of the Privy Council was that the decree was not an absolute nullity and consequently, on the merger of the Akalkot State in the State of Bombay, the decree of the Sholapur Court could be executed in that Court.

36. The decision of this Full Bench was followed in a large number of cases: ‘Moosakutty ??? v. Pylotu Joseph’, AIR 1952 Trav-Co 39 (S); ‘Radheshiam v. Firm Sawai Modi’, AIR 1953 Raj 204 (FB) (T); ‘Ramdayal v. Shankarlal’, AIR 1952 Hyd 80 (FB) (U); ‘D.C Machine Co. v. Syed Jahangir Ali’, AIR 1953 Hyd 19 (V); and ‘Gokaldas Naranji v. Dwarkadas Jethabhai’, AIR 1954 Sau 123 (W). Different reasons have been given in these cases, but the view is that the date when execution was sought is the date to test the validity of the decree, while the view taken in (S) AIR 1955 Nag 103 (H) and the other cases referred to above is that the validity of the decree must be examined with reference to the law in force when it was passed.

37. I prefer to follow the Division Bench of this Court and hold that the decree of the Indore Court did not become executable after 26-1-1950 because of Article 261(3) of the Constitution.

38. The next question for consideration is whether the decree has become executable because the Indian Code of Civil Procedure has been made applicable to the territory, which was once the Indore State, from 1-4-1951. It cannot be disputed that a decree passed by an Indore Court after 1-4-1951 can be executed by a Court at Harda. The question for consideration is whether this amending Act is retrospective to the extent that the decree passed by the Indore Court, which was a nullity and could not be executed by a Court at Harda, has now become executable.

39. In AIR 1954 Trav-Co 358 (FB) (P) it was held that in spite of this Act a decree passed in 1949 by the Subordinate Judge of Coimbatore, which was not a competent Court as against the defendant who was a subject of the Cochin State and resident there, could not be executed against him after this Act came into force and the Cochin Code of Civil Procedure was repealed. It was held that the claim to resist execution on the ground that the decree sought to be executed was a nullity under the rules of private international law is a light or privilege, acquired or accrued under the Cochin Code of Civil Procedure and was saved in spite of the repeal.

40. The right of the defendant in the instant case to immunity from execution on the ground that the decree is a nullity so far as the Harda Court is concerned, cannot be said to be taken away by the amending Act. It provides for execution when the decree is originally a valid decree so far as the Court executing it is concerned. In this view, the appeal fails and is dismissed with costs. Counsel's fee Rs. 25/- if certified.

41. Appeal dismissed.