Punjab-Haryana High Court
Golian Consultants Ltd vs Jagdarshan Singh on 28 August, 2014
Author: Rakesh Kumar Jain
Bench: Rakesh Kumar Jain
EFA No.3 of 2003 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
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EFA No.3 of 2003 (O&M)
Date of Decision:28.08.2014
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Golian Consultants Limited
. . . . Appellant
Vs.
Jagdarshan Singh
. . . . Respondent
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CORAM:- HON'BLE MR.JUSTICE RAKESH KUMAR JAIN
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Present: - Mr.Raman Mahajan, Advocate,
for the appellant.
None for the respondent.
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RAKESH KUMAR JAIN, J.
The question involved in this appeal is "whether a foreign judgment would be conclusive if it is not rendered on the merits of the case and is executable in India"? The other question, which also arise for adjudication is "as to what is the meaning of the case "decided on merit"?"
In order to answer the aforesaid two questions, the facts of the case are required to be noticed in brief. The appellant filed a suit NP No.5095 of 1997 titled as "Golian Consultants Limited Vs. Jagdarshan Singh" in the district at Auckland (New Zealand) for recovery. The respondent put in appearance in the suit under protest in regard to its jurisdiction. The plaintiff filed an application to set aside the appearance put in under protest of jurisdiction of the defendant. The Court at Auckland, at the first instance, passed an order on 15.02.1999 dealing with the matter as to Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -2- whether or not it had the jurisdiction and also regarding forum non conveniens. In respect of the first question as to whether he had the jurisdiction, it was observed that "so my conclusion is that there is jurisdiction to deal with this matter, if the defendant was served within New Zealand. It is common ground that he was so served". As regards 'forum non conveniens', it was observed that "I make an order that appearance under protest to jurisdiction is set aside, and I decline to make any order staying the proceedings on the ground that New Zealand Courts are forum non conveniens". It was observed that after the aforesaid order was passed, the defendant sought 28 days' time to file a statement of defence and the Court ultimately imposed a cost of $300 with the following observations:-
"There will be an order that the defendant pays the sum of $ 300 in costs incidental to and arising from the various interlocutory applications and hearings to this point, which were concerned with the matter of jurisdiction and forum non conveniens".
It may also be pertinent to mention that in the statement of claim, the plaintiff had averred that it is duly incorporated company having its registered office at 3 Campbell Road, Royal Oak, Auckland, and carrying on business as Immigration Consultants. It had engaged the defendant as its liaison representative to interview prospective clients intending to migrate to New Zealand on behalf of the plaintiff; gather and Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -3- forward to plaintiff all relevant information for assessment; collect fees from potential clients on behalf of the plaintiff and account for the same to the plaintiff after allowances of an agreed fee per client, once the client received his/her permanent resident status. It is also averred that during the period 1994-95, the defendant collected from clients $60259.38 but did not account the same to the plaintiff and the said amount was claimed in the suit with interest and costs. Apropos, the order dated 15.02.1999 in which the defendant had sought 28 days time to file statement of defence, the said defence was submitted on 15.05.1999 and denied the claim set up in paragraph 2, 2.3 and 3 of the claim statement and refuted the ultimate claim of the plaintiff of the sum of $60259.38 with interest and costs.
Learned counsel for the appellant/decree holder has categorically pointed out that the suit was decreed on 15.09.1999, wherein the following order has been passed:-
"Upon application of the plaintiff (Golian Consultants Limited) and the defendants (Jagdarshan Singh) claim being sruck out on 15.9.1999. It is adjudged that the plaintiff recover against the defendant.
Amount of claim 60,259.38
Interest (29.10.97 to 15.9.99) 12,458.01
686 days @ 11%)
Filing fee 40.00
Process Service fee 25.00
Costs awarded 18 August 200.00
1999
Solicitor's scale cost 2,441.85
Sealing cost 40.00
$75,464.24
Pahwa Vivek
2014.09.05 11:26
I attest to the accuracy and
integrity of this document
EFA No.3 of 2003 -4-
As a matter of fact, no other judgment has been shown to the Court containing the reason for holding the plaintiff entitled and the respondent liable to pay the amount awarded.
The plaintiff then filed Execution Application No.29 of 19.4.2000 before the Court at Chandigarh, to recover the amount awarded by the Court at Auckland to the tune of $75464.24 in terms of Section 44 (A) of the Civil Procedure Code, 1908 [for short 'the CPC']. The respondent/judgment-debtor filed objections on 20.01.2001 claiming that the decree is inexecutable because of various reasons given by him. The learned Executive Court relying upon a decision of the Supreme Court in the case of "M/s International Wollen Mills Vs. Standard Wool (U.K.) Limited, 2001 (5) Judgment Today (SC) 147, dismissed the execution application on the ground that an ex parte decree passed by the foreign Court is not executable in India in view of Section 13(b) of the CPC.
Aggrieved against the order passed by the executing Court, dismissing the application on 11.02.2003, the present revision petition has been filed.
Learned counsel for the appellant has submitted that the learned Court below erred in dismissing the application for execution on the ground that it has been filed on the basis of an ex parte decree passed by a foreign Court. It is submitted that after the defence/written statement was filed, defendant/judgment debtor did not lead any evidence and the Court passed the order on the merits of the case which has to be treated to be a conclusive Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -5- judgment of the foreign Court and should have been accepted by the executing Court without referring to the explanation provided under Section 13(b) of the CPC.
In order to appreciate the argument of the learned counsel for the petitioner and to search answer of the first question, posed in the beginning, it would be relevant to refer to Section 13 of the CPC.
"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 law or a refusal to recognize the law of India in cases in which such law is applicable;
Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -6-
(d) Where the proceedings in which the judgment was obtained are opposed to natural justice;
(e) Where it has been obtained by fraud;
(f) Where it sustains a claim founded on a breach of any law in force in India."
There is no dispute that in terms of Section 44(A), the decree passed by the Court of any reciprocating territory can be executed in India as if it has been passed in the District Court of India. The learned Court below had found that the Central Govt. vide notification No.SRO 3282/1957 declared New Zealand to be a reciprocating country under Section 44(A) of the CPC and it is also not in dispute that judgment delivered by a Court at Auckland, New Zealand is conclusive in view of Section 13 of the CPC, but for the explanation provided therein from (a) to (f). It is categorically provided in the said explanation much less in Section 13(b) of the CPC that the foreign judgment shall not be conclusive if it has not been given on merits of the case and is not executable in India. Thus, the first question is decided accordingly.
Adverting to the second question, decision in the case of M/s International Wollen Mills (supra), has to be referred to in which the facts were that the M/s International Woolen Mills placed an order in 1996 with M/s Standard Wool (U.K.) Limited for purchase of greasy fleece wool. The goods were shipped to Mumbai Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -7- in September 1996. M/s International Wollen Mills claimed the goods from Mumbai and took them to Ludhiana but did not pay the price of the goods on the ground that after taking the delivery, the goods were found to be of an inferior quality. On 19.1.1998 the Standard Wool (U.K) Limited filed a case in the Central London County Court in United Kindom alleging that M/s International Wollen Mills was served with the summons. Though there was a dispute in this regard but ultimately on 20.04.1998, an ex parte decree was passed to the effect that "it is ordered that there be judgment for the plaintiff in the sum of US $ 49,178.50 plus interest of US $ 717.00 ANF court costs. A total of US $ 49,895.50 plus £243.75." On 20.08.1998, the Standard Wool (U.K.) Limited filed an execution application in the Court of Civil Court (Sr. Divn.) Ludhiana, which was sought to be dismissed by M/s International Wollen Mills alleging that the decree was not on merit and as per provisions of Section 44(A) read with Section 13(b) of the CPC, the Civil Court at Ludhiana had no jurisdiction to execute the decree. The said application was dismissed against which M/s International Wollen Mills filed a revision before this Court without any success and the matter reached the Supreme Court. Although the High Court found that the decree was not on merit but it dismissed the revision on the ground that the second application filed was barred by the principles of constructive res judicata. The apex Court referring to various judgments approved the ratio laid down in two judgments namely "Abdul Rehman Vs. Md. Ali Rowther" AIR 1923 Rang 319 (J) and "Wazir Sahu Vs. Munshi Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -8- Das" AIR 1941 Pat. 109 (k), while holding as to what should be the minimum requirement of a judgment on merits of the claim.
The relevant paragraph extracted by the Supreme Court in respect of the judgment of Abdul Rehman (Supra) reads as under: -
"A decision on the merits involves the application of the mind of the Court to the truth or falsity of the plaintiff's case and therefore, though a judgment passed after a judicial consideration of the matter by taking evidence may be a decision on the merits even though passed ex parte, a decision passed without evidence of any kind but passed only on his pleadings cannot be held to be a decision on the merits."
Similarly the ratio laid down in the case of Wazir Sahu (Supra) noticed by the Apex Court also reads as under:-
"An ex parte decision may or may not be on the merits. The mere fact of its being ex parte will not in itself justify a finding that the decision was not on the merits. That is not the real test. The real test is not whether the decision was or was not ex parte, but whether it was merely formally passed as a matter of course or by way of penalty or it Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -9- was based on the consideration of the truth or otherwise of the plaintiff's claim."
It was held that a decision passed without evidence of any kind but passed only on the pleadings cannot be held to be decision on the merits and that the real test to determine as to whether the ex parte order on its merit to see that the order is merely formally passed as a matter of course or by way of penalty or it is based on consideration of the truth or otherwise of the plaintiff's claim. The decision by the Supreme Court in the case of M/s International Wollen Mills (supra) is to the following effect:-
"This shows that leave to serve the appellant was granted after reading the affidavit. Thus at this stage the Court had presumably seen the documents annexed thereto. The Court has been careful enough to note that it had read the affidavit. However, at this stage, only a prima facie opinion was being formed. Thereafter, the said Mr.Kasshif Basit, Solicitor for the respondent had filed an affidavit of service stating that service had been effected on one Yash Paul, who is claimed to be an employee of the appellant. To this affidavit also all relevant documents were annexed. Thereafter no documents are tendered nor any evidence led. The English Court then pronounces the judgment and decree which Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -10- has been set out hereinabove. It does not even say that the second affidavit had been read. This judgment and decree does not indicate whether any document were looked into and / or whether the merits of the case was at all considered. It merely grants to the respondent a decree for the amounts mentioned therein. To be noted that the appellant had by this letter dated 8.11.1997, replied to the notice of the respondent dated 18th October, 1997. In this reply it had been mentioned that goods were of inferior quality and not as per contract. Court has not applied its mind or dealt with this aspect. It has not examined points of controversy between the parties. It is given ex parte as appellant did not appear at hearing of suit. It is not a judgment on merits.
On the principles of law enunciated hereinabove in our view, it is clear that such a decree cannot be said to be decree on merits. Such a decree cannot be enforced in India."
Thus, the answer to the second question would be that a decision passed without evidence of any kind but only on the pleadings is not a decision on merits.
Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -11-
Since I have searched answers to the aforesaid questions, now the time has come to apply it to the facts of the case in hand in which except for the claim statement filed by Sh. Dhirendra Singh, Solicitor engaged by the plaintiff and the statement of the defence filed by Stephen Howard Barter, Solicitor for the defendant, no evidence was led by the plaintiff in support of his claim for the recovery to prove that the defendant had collected between November 1994 to November 1995 from his clients $60259.38 and did not account the same to the plaintiff though he was obliged to do so and merely on the pleadings of the parties, judgment was rendered by the Court at Auckland on 15.09.1999 holding the defendant liable and the plaintiff entitled to an amount of $75464.24. There is no evidence brought on record in this case by the appellant, alleged to have led before the Court at Auckland, granting him a decree of aforesaid amount on the basis of appreciation of evidence as no such evidence is also not made part of the executing proceedings filed in India to take this Court into confidence without the order/decree passed by the Court at Auckland was rendered on merits. Thus, it can be safely said, that too, without any hesitation, the order dated 15.09.1999 passed by the Auckland Court, being executed by the appellant in India, is not a decision on merits, as contemplated under Section 13 of the CPC to make such a judgment conclusive for the purpose of its execution while reading Section 44(A) of the CPC with it and is thus falls in exception of Section 13(b) of the CPC making it inexecutable in India against the defendant/respondent. Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document EFA No.3 of 2003 -12-
In view of the aforesaid discussion, I am of the considered opinion, that there is no merit in the present revision petition and hence the same is hereby dismissed, however, without any order as to costs.
(RAKESH KUMAR JAIN) 28.08.2014 JUDGE Vivek Pahwa Vivek 2014.09.05 11:26 I attest to the accuracy and integrity of this document