Gujarat High Court
Jubilant Pharmaceuticals Nv. ... vs Synchron Research Services Private ... on 10 February, 2020
Author: Harsha Devani
Bench: Harsha Devani, Sangeeta K. Vishen
C/FA/2696/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2696 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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JUBILANT PHARMACEUTICALS NV. PREVIOUSLY PSI N.V. THROUGH
MR. SANJAY GUPTA
Versus
SYNCHRON RESEARCH SERVICES PRIVATE LIMITED
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Appearance:
MR NAVIN K PAHWA, SENIOR ADVOCATE WITH MRS SANGEETA N
PAHWA(527) for the Appellant(s) No. 1
MR MEHUL S SHAH, SENIOR ADVOCATE WITH MR VISHRUT JANI FOR
RC JANI AND ASSOCIATE(6436) for the Defendant(s) No. 1
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CORAM:HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
Date : 10/02/2020
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this appeal under section 96 of the Code of Civil Procedure, 1908 (hereinafter referred to as "the Code"), the appellant - original plaintiff has challenged the legality and Page 1 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT validity of the judgment and decree dated 12.3.2018 passed by the learned 3rd Additional Senior Civil Judge, Ahmedabad (Rural), at Mirzapur, Ahmedabad, in Special Civil Suit No.378 of 2010 whereby, the learned Judge has dismissed the suit filed by the appellant - plaintiff.
2. The appellant - plaintiff, filed the above-referred suit against the respondent for recovery of total EUR 199,217.69 (i.e. EUR 173,193.00 plus judicial interest EUR 23,983.67 until 1.1.2010 with further judicial interest on the amount of EUR 1,73,193 till recovery of the said amount, plus a provisional amount of EUR 1.00, plus EUR 571.36 costs of summons, plus EUR 1000 fee for administration of justice, plus EUR 468.66 costs made by the Judicial Officer on the side of the claimant).
3. The appellant - Jubilant Pharmaceuticals Nv is the Belgian subsidiary of Jubilant Organosys Ltd. The appellant - plaintiff is the owner of registration documentation concerning the generic medicine "Cetirizin". The appellant - plaintiff entered into licensing and supply agreements with several clients in order to market the product in several European countries. It is the case of the appellant that its role was limited to the extent of obtaining marketing authorisation on behalf of its clients and the client's would have to pay the licensing fee to Jubilant. Once the marketing authorisation in the client's name was obtained, the client would order supplies from Jubilant (or more specifically to its sister company PSI Supply NV) for a term of five years.
4. It is the case of the appellant that by an agreement dated 17.3.2003, it entered into a contract with the respondent - defendant company for conducting bio-equivalence study (BE Page 2 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT study) to demonstrate that generic product "Cetirizin" has the same therapeutic effect as the reference product "Zyrtee". As per the agreement, the respondent was required to conduct bio-equivalence studies which were necessary in obtaining these authorisations. It is the case of the appellant that the French and Dutch authorities pursuant to delivery of the BE study provided by the respondent, decided to conduct a GCP/GLP inspection at premises of the respondent; and the inspectors came to the conclusion that the respondent was not GCP/GLP compliant and the quality control by the respondent as well as the quality assurance measures taken by the respondent were insufficient; and rejected the BE study conducted by the respondent. It is further the case of the appellant that on 26.4.2006, the health authorities of Netherlands decided to suspend the existing marketing authorisations obtained by the appellant in the light of the fact the respondent was not GCP/GLP compliant and the quality control of the respondent as well as the quality assurance measures taken by the respondent were insufficient. On the same ground, the respondent's BE studies were rejected. As a consequence of rejection of these existing marketing authorisations for the product and also because of the termination of the Mutual Recognition Procedure (MRP), the appellant suffered huge losses. It is the case of the appellant that the respondent utterly failed to conduct the necessary BE study in a proper manner and due to the acts and omissions on the part of the respondent, the appellant is entitled to damages.
5. In the above set of facts and circumstances, the appellant raised claim of EUR 1,73,193.00 plus judicial interest thereon as well as additional damages, provisionally estimated Page 3 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT at EURO 1.00, plus judicial interest thereon and the cost of the proceedings, against the respondent in the Ghent Commercial Court, Belgium. The said proceedings came to be registered as A/08/00303.
6. Vide judgment and order dated 27.2.2009, the Ghent Commercial Court, Belgium held that the claim of the appellant is admissible and ordered the respondent to pay an amount of EU 1,73,193.00 plus a provisional amount of EUR 1.00, plus EUR 571.36 costs of summons, plus EUR 468.66 costs made by the Judicial Officer on the side of the claimant, totaling to EUR 199,217.69.
7. As Belgium does not fall under the reciprocating territory and as the execution of judgment and order passed by Ghent Commercial Court, Belgium was not possible, the appellant filed a substantive suit being Special Civil Suit No.378 of 2010 in the court of learned Principal Senior Civil Judge, Ahmedabad inter alia to pass a decree for an amount of EUR 199,217.69 and costs in favour of the appellant and against the respondent till its realisation.
8. Upon service of summons, the respondent appeared and filed its written statement vide Exh.8. The respondent also filed application, Exh.32. It is the case of the appellant that thereafter, the respondent did not chose to remain present either to produce any evidence in support of its case or to conduct oral hearing and the right of the respondent to lead evidence was closed. Thereafter, by the impugned judgment and order 12.3.2018, the trial court dismissed the suit filed by the appellant. Being aggrieved, the appellant has filed the present appeal.
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9. Mr. Navin K. Pahwa, Senior Advocate, learned counsel for the appellant invited attention to the provisions of section 13 and section 14 of the Code, to submit that section 13 read with section 14 of the Code contains provisions on the conclusiveness of a foreign judgment which is subject to certain exceptions. It was submitted that the court shall presume that the judgment is pronounced by a court of competent jurisdiction unless the contrary is proved by the defendant. It was pointed out that a foreign judgment is enforceable by a suit upon the foreign judgment. In support of such submission, the learned counsel placed reliance upon the decision of the Supreme Court in Roshanlal Kuthiala & Ors v. R.B. Mohan Singh Oberai , (1975)4 SCC 628 wherein the court held thus:-
"20. The plaintiff's answer is simple and sufficient and deflates the defendant's resistance, based on 'evacuee' legislation. A foreign judgment is enforceable by a suit upon the judgment which creates an obligation between the parties. Indeed, it "shall be conclusive as to any matter thereby directly adjudicated upon between the same parties" subject to the exceptions enumerated in Section 13 C.P.C. None of these nullifying clauses being attracted, prima facie the foreign judgment on which the plaintiff founds his present action is unassailable. Certainly, the judgment of the Pakistan Court was in favour of the plaintiff and, being conclusive under Section 13, the defendant could not be heard to urge to the contrary."
9.1 It was submitted that the plaintiff can maintain a suit on the basis of a foreign judgment or based on the original cause of action or on both. In support of such submission, the learned counsel placed reliance upon the decision of the Bombay High Court in the case of Marine Geotechnics LLC v. Coastal Marine Construction & Engineering Ltd., rendered on Page 5 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT 5.3.2014 in Company Petition No.69 of 2013 wherein the court held thus:-
"20. Section 13 enunciates the well-established principle of private international law that a court will not enforce a foreign judgment that is not of a competent court. What that section provides is, therefore, substantive law, not mere procedure (Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and Ors., AIR 1962 SC 1737). Now Section 13 makes no distinction between judgments of a court in a reciprocating territory and those of courts in non-reciprocating territories. That distinction comes only in Section 44A, an independent provision that says that a decree of a court in a reciprocating state may be put into execution in India (M.V. Al Quamar v Tsavliris Salvage (International) Ltd. & Ors., AIR 2000 SC 2826). A decree from a non-reciprocating state cannot be so executed. Decrees of both reciprocating and non-reciprocating territories must, however, satisfy the tests of Section 13. The difference is at what stage, and on whom lies the burden. Where a foreign judgment is not on merits, or violates any of the provisions of sub-clauses (a) to (f ) of Section 13, it is not conclusive, even though it may accord with the domestic procedure of the country in which it was passed and is valid and enforceable in that country. An ex- parte decree is not necessarily one that is always, and ipso facto, not on merits. If a court has considered and weighed the plaintiffs' case and assessed his evidence, it will be on merits, notwithstanding that it is ex-parte. Where however, there is a summary disposal of the case under some special statutory provision that obviates an examination of the merits and the taking of evidence, such a decree is not executable in India. Thus, for instance, if there is an immediate default summary judgment only on account of the defendants' failure to appear and without any examination of the material or the evidence, that judgment is not enforceable in India (International Woollen Mills, supra). In short, if a foreign judgment falls under any of the Clauses (a) to (f) of Section 13, it is not conclusive as to any matter thereby adjudicated upon. The judgment is open to collateral attack on the grounds mentioned in the clauses of Section 13 (Smt. Satya v Shri Teja Singh, (1975) 1 SCC 120). The elaborate discussion by the Supreme Court in International Page 6 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT Woollen Mills v Standard Wool (UK) Ltd (AIR 2001 SC 2134; (2001) 5 SCC 265; cited in China Shipping and Intesa).ultimately leads to one pithy conclusion: a decree that follows a judgment that is not on merits cannot be enforced in India:
... Even where the defendant chooses to remain ex parte and to keep out, it is possible for the plaintiff to adduce evidence in support of his claim (and such evidence is generally insisted on by the Courts in India), so that the Court may give a decision on the merits of his case after a due consideration of such evidence instead of dispensing with such consideration and giving a decree merely on account of the default of appearance of the defendant.
In the former case the judgment will be one on the merits of the case, while in the latter the judgment will be one not on the merits of the case. Thus it is obvious that the non-appearance of the defendant will not by itself determine the nature of the judgment one way or the other. That appears to be the reason why Section 13 does not refer to ex parte judgments falling under a separate category by themselves (emphasis supplied)
21. Armed with a decree of a court in a non-
reciprocating foreign territory, what must a party do in India? His option is to file, in a domestic Indian court of competent jurisdiction, a suit on that foreign decree, or on the original, underlying cause of action, or both (Badat and Co. v East India Trading Co., AIR 1964 SC 538, 1964 (66) BLR 402). He cannot simply execute such a foreign decree. He can only execute the resultant domestic decree. To obtain that decree, he must show that the foreign decree, if he sues on it, satisfies the tests of Section 13. If the decree is, on the other hand, of a court in a reciprocating territory, then he can straightaway put it into execution, following the procedure under section 44A and Order XXI, Rule 22 of the CPC. At that time, the judgment-debtor can resist the decree-holder by raising any of the grounds under Section 13. If he does not, or fails in his attempt, the decree will be executed as if it were a decree passed by a competent court in India."
9.2 Reliance was also placed upon the decision of the Page 7 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT
Supreme Court in Badat and Co. v. East India Trading Co., AIR 1964 SC 538 wherein the court held thus:-
"33. It will thus be seen that there is a conflict of opinion on a number of points concerning the enforcement of foreign awards or judgments, based upon foreign awards. However, certain propositions appear to be clear. One is that where the award is followed by a judgment in a proceedings which is not merely formal but which permits of objections being taken to the validity of the award by the party against whom judgment is sought, the judgment will be enforceable in England. Even in that case, however, the plaintiff will have the right to use on the original cause of action. The second principle is that even foreign award will be enforced in England provided it satisfied mutatis mutandis the tests applicable for the enforcement of foreign judgments on the ground that it creates a contractual obligation arising out of submission to arbitration. On two matters connected with this there is difference of opinion. One is whether an award which is followed by a judgment can be enforced as an award in England or whether the judgment alone can be enforced. The other is whether an award which it not enforceable in the country in which it was made without obtaining an enforcement order or a judgment can be enforced in England or whether in such a case the only remedy is to sue on the original cause of action. The third principle is that a foreign judgment or a foreign award maybe sued upon in England as giving good cause of action provided certain conditions are fulfilled one of which is that it has become final."
9.3 Next it was submitted that if the court is satisfied on the conclusiveness of the foreign judgment, nothing more is required to be proved or argued. If not, the plaintiff may prove its case on the basis of the original cause of action. It was contended that the burden of proving that the foreign judgment is not on merits is on the defendants. In support of such submission, reliance was placed upon the decision of the Supreme Court in the case of International Woollen Mills v. Standard Wool (U.K.) Limited, (2001)5 SCC 265 wherein Page 8 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT the court held thus:-
"22. Reliance was also placed upon the case of Ram Chand vs. John Bartlett reported in Vol. III Indian Cases
523. In this case it has been held as follows:
"The next contention that has been raised for the appellant to show that the respondent's suit on the foreign judgment did not lie, is that the said judgment was not passed on the merits, and that, therefore, it cannot be enforced by the Indian Courts. In my opinion this contention has no force. The writ of summons issued by the High Court in England was, it is admitted, duly served on the appellant in this country, but the latter did not, within the time allowed for that purpose, enter an appearance and deliver a defence. The respondent had (under the rules of procedure that govern the Supreme Court) the right, at the expiration of the prescribed period, to enter final judgment for the amount claimed, with costs. The writ aforesaid was especially endorsed with the statement of claim, containing all the necessary particulars, and there is nothing to show that the application for leave to serve the writ was not supported by affidavit or other evidence stating the several particulars required by Order XI, rule 4. In short, the proceedings held in the high Court of England appear to have been strictly in accordance with the existing rules of procedure, which are not shown to be in any way contrary to the fundamental principles of justice and fair play ; and the judgment passed against the defendant on the facts of the case must be considered as one passed on the merits. It does not proceed on any preliminary point, i.e., a point collateral to the merits of the case, but is based on the merits as disclosed by the pleadings before the Court, if the defendant did not, in spite of notice of action, choose to appear and defend it, the judgment passed by the Court in plaintiff's favour was not the less a judgment on the merits, because it was not founded upon detailed evidence which the plaintiff might have produced had the defendant entered an appearance and contested the claim. The position to my mind is the same as if the defendant had appeared and confessed judgment. In support of his Page 9 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT contention that the judgment in question cannot be considered as one passed on the merits, the appellant's counsel has relied on the following passage in Sir William Rattigan's Private International Law (1895) at pages 234-235:
"It would seem to be equally plain that, if, for instance, it should happen that by the law of a foreign country, a plaintiff was entitled to judgment simply on the non-appearance of a defendant who had been duly served, and without adducing any evidence whatever in support of his claim, or if the wrong-headedness of a foreign Judge should induce him to so decide, the plaintiff would not be entitled in an English Court to sue upon a judgment so obtained. If on no other ground, such a judgment of a foreign Court would, at all events, be so contrary to the fundamental principles of the Law of England as, for this reason alone, to be incapable of receiving any effect in a British Court."
The above passage does not, however, as I read it, support the present appellant's position, as it cannot, in my opinion, be affirmed in this case that the plaintiff has obtained judgment from the High Court in England "simply on the non-appearance of the defendant without adducing any evidence whatever in support of his claim." Under Order XI, rule 4, the plaintiff's application for leave to serve the writ of summons out of the jurisdiction must be supported by affidavit or other evidence stating that the plaintiff has a good cause of action....and the grounds upon which the application is made, and leave can only be granted if the Court or Judge is satisfied that the case is a proper one for the service prayed for. The necessary procedure must be presumed to have been followed in this case, and it has not been shown by the appellant that it was not so followed. The affidavit filed by the present plaintiffs- respondents in pursuance of the above rule, would, in my opinion, constitute "evidence in support of the claim" within the purview of the principle laid down in the passage quoted above, and the judgment obtained after service of the writ on the defendant as required by the rules of the Supreme Court would, I think, be a judgment on the merits. If, however, the passage Page 10 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT relied upon does not bear the construction I have placed upon it, if, that is to say, it means that thee can be no judgment on the merits, unless, after the service of the writ on the defendant in the regular way the plaintiff has adduced some evidence, oral or documentary, in support of his claim, such as he would have produced if the defendant had appeared and contested the claim, then, with all possible respect for the learned author of that passage, I venture to think that the rule laid down by him is expressed in too wide language, and I should be reluctant to follow it unless it were supported by clear authority. I can discover no such authority either in Dicey's "Conflict of Laws" (p. 411), or in any other standard text-book on the subject; and I do not think that the maxim enunciated by Sir William Rattigan himself as the one applicable in such cases, viz., that the judgment passed must not contravene the fundamental principles of a rational system of law, supports the wide proposition, which it has been urged, is laid down in the passage quoted above."
In our view the passage in Sir William Rattigan's Private International Law (1895) at pages 234-235, reproduced above, states the correct law. With great respect to the learned Judges concerned the restricted interpretation sought to be given cannot be accepted. With greatest of respect to the learned Judges we are unable to accept the broad proposition that any decree passed in absence of Defendant, is a decree on merits as it would be the same as if Defendant had appeared and confessed Judgment. We also cannot accept the proposition that the decree was on merits as all documents and particulars had been endorsed with the statement of claim. With the greatest of respect to the learned Judges they seem to have forgotten at stage of issuance of writ of summons the Court only forms, if it at all does, a prima-facie opinion. Thereafter Court has to be consider the case of merits by looking into evidence led and documents proved before it, as per its rules. It is only if this is done that the decree can be said to be on merits.
23. It was also submitted that the burden of proving that a decree was not on merits is entirely on the Appellants. It was submitted that no evidence had been led by the Appellants to show that the decree was not on merits and Page 11 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT for that reason it must be presumed that the decree is on merits. In support of this submission reliance was placed upon the authority in the cases of R.M.V. Vellachi vs. R.M.A. Ramanathan reported in AIR 1973 Madras 141, R. Viswanathan vs. Rukn-ul-Mulk Syed Abdul Wajid reported in 1963 (3) S.C.R. 22. Undoubtedly the burden of proving that the decree is not on merits would be on the party alleging it. However Courts never expect impossible proofs. It would never be possible for a party to lead evidence about the state of mind of the judge who passed the decree. Of course, amongst other things, the party must show that the decree does not show that it is on merits, if necessary the rules of that Court, the existence or lack of existence of material before the Court when the decree was passed and the manner in which the decree is passed. All this has been done in this case.
24. It was also submitted that the Courts of law are not concerned with the result and even though the result may be repugnant to the Court, still the Court cannot relieve the party from the burden if the law provides for a contingency. In support of this reliance was placed upon the case of The Martin Burn Ltd. vs. Corporation of Calcutta reported in AIR 1966 S.C. 529 and Firm Amar Nath Basheshar Dass v. Tek Chand reported in AIR 1972 S.C. 1548. There can be no dispute to this proposition. However this proposition cuts both ways. If the decree is not on merits then, even though the Court may be reluctant to leave the Respondents remedy less, the Court would still have to refuse to enforce the decree."
9.4 It was submitted that in the present case, the suit is filed on the basis of original cause of action and also on the basis of the foreign judgment. According to the learned counsel for the appellant - plaintiff, the foreign judgment is conclusive as per section 13 of the Code as it is rendered on merits and that the finding recorded by the trial court in the impugned judgment that the judgment is not rendered on merits, is not correct. Reliance was placed upon the observations of the Supreme Court in the case of International Woollen Mills v. Standard Wool (U.K.) Limited (supra) in support of such Page 12 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT submission. It was submitted that without prejudice, even if the court finds that the foreign judgment is not rendered on merits, it is the obligation of the court to then decide the suit on merits, as the suit has also been filed on the basis of the original cause of action, whereas in the facts of the present case, the trial court has not decided the suit on merits.
9.5 Reliance was also placed upon the decision of the Supreme Court in R. Vishvanathan v. Rukh-ul-Mulk Syed Abdul Wajid, AIR 1963 SC 1, for the proposition that in considering whether a judgment of a foreign court is conclusive, the courts in India will not inquire whether the conclusions recorded thereby are supported by the evidence, or are otherwise correct, because the binding character of the judgment may be displaced only by establishing that the case falls within one or more of the six clauses of section 13, and not otherwise. The court held that the foreign judgment is conclusive as to any matter directly adjudicated upon thereby; but it does not include the reasons for the judgment given by the foreign court. What is conclusive under section 13 of the Code is the judgment, that is, the final adjudication and not the reasons. The court held that by section 13 of the Code, a foreign judgment is made conclusive as to any matter thereby directly adjudicated upon between the same parties. But it is the essence of a judgment of a Court that it must be obtained after due observance of the judicial process, that is, the Court rendering the judgment must observe the minimum requirements of natural justice - it must be composed of impartial persons, acting fairly, without bias, and in good faith, it must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case. A foreign judgment of a competent court is conclusive even if it Page 13 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT proceeds on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are assured:
correctness of the judgment in law or on evidence is not predicated as a condition for recognition of its conclusiveness by the municipal court. Neither the foreign substantive law, nor even the procedural law of the trial need be the same or similar as in the municipal court.
9.6 Reliance was also placed upon the decision of the Supreme Court in M/s. Alcon Electronics Pvt. Ltd. v. Celem S.A. of FOS 34320 Roujan, France, (2017) 2 SCC 253, wherein the court held that a plain reading of section 13 of the Code would show that to be conclusive an order or decree must have been obtained after following the due judicial process by giving reasonable notice and opportunity to all the proper and necessary parties to put forth their case. When once these requirements are fulfilled, the executing court cannot enquire into the validity, legality or otherwise of the judgment. It was accordingly, urged that the impugned judgment and decree passed by the trial court deserves to be quashed and set aside and that the appeal deserves to be allowed by decreeing the suit in favour of the appellant.
10. Opposing the appeal, Mr. Mehul S. Shah, Senior Advocate, learned counsel with Mr. Vishrut R. Jani, learned advocate for the respondent, submitted that Belgium is not a reciprocating country, so there is no question of directly executing the decree of the Ghent Commercial Court. The question that therefore arises is whether a suit could have been filed based solely on the foreign decree. The attention of the court was invited to the reliefs claimed in the suit, to submit that for the purpose of claiming a decree on the basis Page 14 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT of the decree passed by the Ghent Commercial Court, the appellant - plaintiff has to show that the foreign judgment does not fall within any of the exceptions provided under section 13 of the Code. It was submitted that the present case would be hit by clause (b) of section 13 of the Code, inasmuch as the judgment of the Ghent Commercial Court cannot be said to have been given on the merits of the case. It was submitted that therefore, if it is not a decree on merits, it is not conclusive as to the matter adjudicated therein, and hence, the remedy available to the appellant was to file a suit seeking a decree, independent of the decree passed by the foreign court, whereas in the facts of the present case, the suit has been instituted only on the basis of the decree and not independent of the decree..
10.1 To substantiate his contention that the decree was not a decree on merits, the learned counsel invited the attention of the court to the judgment of the First Section of the Ghent Commercial Court to submit that on a plain reading of the judgment, it is clear that it is not a judgment on merits, inasmuch as the merits of the case have not been examined and there is only one ground for granting the decree, namely, that there is failure on the part of defendant to enter appearance. It was submitted that the term merits means deciding the case on merits, which means deciding on the truthfulness of the case as is settled, which would come up firstly on the basis of appreciating the documents and material on record and then recording findings. It was submitted that the findings may not be long but there has to be some semblance of findings recorded in the judgment. It was submitted that the judgment of the Ghent Commercial Court fails to show that these basic principles have been applied;
Page 15 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020C/FA/2696/2018 JUDGMENT and, therefore, the judgment is not a judgment on merits.
10.2 It was further submitted that the present case also falls under the exception contained in clause (d) of section 13 of the Code, namely, that the proceedings in which the judgment was obtained are opposed to natural justice. It was submitted that there is an obligation on the part of the learned Judge to record the reasons for arriving at his conclusions and not assigning reasons is also a breach of the principles of natural justice. It was submitted that since the judgment of the Ghent Commercial Court does not satisfy the requirements of clauses
(b) and (d) of section 13 of the Code, the judgment is not conclusive, and hence, the appellant is not entitled to a decree based on the decree of the Ghent Commercial Court.
10.3 Alternatively, it was submitted that even if the decree of the foreign court does not fall under any of the exceptions contained in section 13 of the Code, it can only be used to support the claim and the claim in the suit cannot be based upon such decree. In support of his submissions, the learned counsel placed reliance upon the decision of a Full Bench of the Madras High Court in R.E. Mahomed Kassim & Co. v. Seeni Pakir Bin Ahmed, 1927 XXV LW 307, wherein the question before the court was does the suit lie in this country on a foreign judgment given on default of appearance of the defendant on the plaint allegations without any trial on evidence? The court observed that in the Supreme Court of Penang, where the defendant does not appear after proper service of summons, judgment is given without trial and without taking any evidence. The full bench answered the reference by holding that the foreign judgment is not conclusive as it has not been given on the merits of the case Page 16 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT and that the suit therefore does not lie on it. It was held that under section 13(b) of the Code, a decree obtained on default of appearance of the defendant without any trial on evidence is a case where the judgment must be held not to have been given on the merits of the case. In the facts of the said case, the court also found that the decision was given without any evidence at all, but the rules governing the Penang Court under which, where the defendant does not appear, a decree is given as a matter of course. The learned counsel for the appellant submitted that in such cases a suit which is solely based on the foreign court's judgment will not lie.
10.4 The learned counsel further placed reliance upon the decision of the Andhra Pradesh High Court in Potluri Rajeswara Rao v. Syndicate Bank Incorporated in India with Limited Liability, LAWS (APH) 2000 2 30, wherein the court observed that the record did not indicate that any evidence was led and documents were tendered and proved. The court placed reliance upon above referred decision of the Full Bench of the Madras High Court as well as other decisions on the application of section 13 of the Code and held that the judgment and decree of the High Court of Justice, Queen's Bench decision was a nullity and was hit by section 13(a) and
(b) of the Code and was incapable of enforcement and was without jurisdiction.
10.5 Reliance was also placed upon the decision of the Madras High Court in R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar, Laws (Mad) 1972 4 58, wherein the question before the court was whether the ex-parte decree passed by the Singapore High Court in consequence of default of appearance by the respondent without trial could be deemed to be a Page 17 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT judgment on merits. In the facts of the said case, the court was of the view that the respondent never submitted to the jurisdiction of the foreign court and, therefore, the decree passed by the foreign court against the respondent must be deemed to have been passed by a court having no jurisdiction. The court further examined as to whether the ex parte decree passed by the Singapore High Court in consequence of default of appearance by the respondent without trial can be deemed to be a judgment on merits. The court referred to the following facts, namely, that the suit against the respondent was filed in the Singapore High Court on the affidavit filed by the plaintiff's attorney for service of summons on the respondent in India where the respondent was residing. The High Court of Singapore issued notice on 2.6.1966, to the respondent to be served in India in lieu of service in Singapore - aide Exhibit A-
10. It appears that notice was served on the respondent on the 4.7.1966. The respondent did not appear in the suit. On 29.7.1966, the Deputy Registrar of the High Court of Singapore, issue a certificate of non-appearance of the respondent in the suit. On the same day, on hearing the Solicitor for the appellant, it was ordered that the appellant was at liberty to sign final judgment against the respondent for the suit claim. On 30.7.1966, the final judgment was passed against the respondent decreeing the suit as prayed for. It was observed that it is, therefore, clear from the records that no evidence was taken in proof of the claim by the appellant and the decree was not passed on merits, but it was passed ex parte solely due to default of appearance. The court held that in the facts of the case, the respondent had discharged his burden by placing ample materials that the foreign judgment cannot be executed because the High Court of Singapore was Page 18 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT not a "Court of competent jurisdiction" within the meaning of section 13(a) and the defendant had not voluntarily submitted to the decision of the Tribunal and also that the decree of the High Court of Singapore was not given on the merits of the case within the meaning of section 13(a) and the defendant had not voluntarily submitted to the decision of the Tribunal and also that the decree of the High Court of Singapore was not given on the merits of the case within the meaning of section 13(b). The court held that the decree can be executed under section 44A only if all the conditions of section 13(a) to
(f) are satisfied. In other words, even if the Singapore High Court was a court of competent jurisdiction either because of the residence of the defendant in Singapore or because of his voluntarily submitting to the jurisdiction of the foreign court, the decree cannot be executed if, under section 13(b) the decree had not been given on the merits of the case. The foreign decree can be executed under section 44A only if all the conditions are concurrently satisfied.
10.6 Referring to the contents of the plaint, the learned counsel submitted that the suit has been instituted based only upon the decree of the Ghent Commercial Court and is not a suit for the purpose of independent decree. It was submitted that when the trial court decides the suit, it is a judgment on merits, after framing issues. Referring to the issues framed by the trial court, it was submitted that the only issue is whether the plaintiff is entitled to a decree on the basis of the judgment of the Ghent Commercial Court. It was submitted that all the documentary evidence is on the decision of the Ghent Commercial Court and there is no independent evidence to establish the claim to a decree on merits. It was submitted that even in evidence also, it is only the decree which is tried to be Page 19 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT proved and, therefore, the appellant - plaintiff is not entitled to a decree on the merits of the claim. It was submitted that the question that then arises for consideration is whether when the decree of the Ghent Commercial Court is the only material on record, can a decree be passed without there being any further evidence on the claim. It was submitted that in this regard section 14 of the Code is a guideline. Referring to the affidavit of examination-in-chief filed by the authorised signatory of the plaintiff, it was submitted that the whole thrust of the plaintiff is to consider the judgment of the Belgium court and pass a decree which cannot be a manner of seeking relief in a suit and, therefore, the suit based merely on a foreign decree is not maintainable.
10.7 Adverting to the impugned judgment, it was submitted that the trial court has gone by section 13(b) of the Code. It was submitted that any decree passed on the merits of the claim would also be passed as a decree which is in the nature of an ex parte decree as no evidence was led by the defendant. In such circumstances, when the lower court proceeds on the basis of section 13(b) of the Code, if the suit is to be adjudicated on merits, the other side must prove its case and the defendant must be given an opportunity to meet with the merits of the case. It was submitted that the judgment of the foreign court can only be looked into in support of the plaintiff's claim and the case has to be adjudicated on merits by the trial court. It was, accordingly, urged that the impugned judgment and decree deserves to be confirmed and that this court may not pass a decree in terms of the foreign judgment.
11. In rejoinder, Mr. Pahwa, learned counsel for the appellant submitted that the decision of the Full Bench of the Madras Page 20 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT High Court is based on consideration of the Penang rules and does not in any manner support the case of the defendant. It was submitted that in this case the defendant has not led any evidence to the contrary and that the decisions relied upon do not support the case of the respondent - defendant.
12. In the aforesaid backdrop of the aforesaid facts and contentions, the following points arises for determination :-
1. Whether the judgment of the Ghent Commercial Court can be said to be a judgment on merits?
2. If the above question is answered in the affirmative, whether the appellant-plaintiff is entitled to a decree based solely upon such judgment?
3. Whether the appellant-plaintiff is entitled to a trial on merits having regard to the nature of the reliefs claimed in the plaint?
13. Section 13 of the Code reads thus:-
"13. 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 recognise the law of India in cases in which such law is applicable;
(d) where the proceedings in which the judgment was obtained are opposed to natural justice;
(e) where it has been obtained by fraud;Page 21 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020
C/FA/2696/2018 JUDGMENT
(f) where it sustains a claim founded on a breach of any law in force in India."
14. Thus, under clause (b) of section 13 of the Code, if the decree has not been given on the merits of the case, then the foreign judgment is not conclusive between the parties and cannot be executed in India. The question that then arises for consideration is whether the decree passed by the Ghent Commercial Court can be said to be a decree on merits.
15. The learned counsel for the respective parties have cited several authorities of the Supreme Court as well as various High Courts on the question as to when a decree can be said to be on merits. A brief reference may be made to the said decisions.
15.1 In Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi, (supra) the Supreme Court held that a foreign judgment is enforceable by a suit upon the judgment which creates an obligation between the parties. That it shall be conclusive as to any matter thereby directly adjudicated upon between the same parties subject to the exceptions enumerated in section 13 of the Code.
15.2 In Marine Geotechnics LLC v. Coastal Marine Construction & Engineering Ltd. (supra), a learned Single Judge of the Bombay High Court held that an ex-parte decree is not necessarily one that is always, and ipso facto, not on merits. If a court has considered and weighed the plaintiffs' case and assessed his evidence, it will be on merits, notwithstanding that it is ex-parte. If there is an immediate default summary judgment only on account of the defendants' failure to appear and without examination of the material or Page 22 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT the evidence, that judgment is not enforceable in India. The court held that even where the defendant chooses to remain ex parte and to keep out, it is possible for the plaintiff to adduce evidence in support of his claim so that the court may give a decision on merits of his case after a due consideration of such evidence instead of dispensing with such consideration and giving a decree merely on account of the default of appearance of the defendant. In the former case the judgment will be one on the merits of the case, while in the latter, the judgment will be one not on the merits of the case. The court held that it is therefore obvious that the non-appearance of the defendant will not by itself determine the nature of the judgment one way or the other.
15.3 In International Woollen Mills v. Standard Wool (U.K.) Ltd. (supra), the court was considering an ex parte decree that came to be passed by the Central London County Court. The decree reads as follows:
"IT IS ORDERED THAT:
There be judgment for the plaintiff in the sum of US $ 49, 178.50 plus interest of US $ 17.00 ANF court costs. A total of US $ 49,895.50 plus £ 243:75."
The court held that to say that a decree has been passed regularly is completely different from saying that the decree has been passed on merits. An ex parte decree passed without consideration of merits may be a decree passed regular if permitted by the rules of that court. Such a decree would be valid in that country in which it is passed unless set aside by a court of appeal. However, even though it may be a valid and enforceable decree in that country, it would not be enforceable in India if it has not been passed on merits. Therefore, for a Page 23 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT decision on the question whether a decree has been passed on merits or not, the presumption under section 114 would be of no help at all. The court held that undoubtedly the burden of proving that the decree is not on merits would be on the party alleging it. However, courts never expect impossible proofs. It would never be possible for a party to lead evidence about the mind of the Judge who passed the decree. Of course, amongst other things, the party must show that the decree does not show that it is on merits, if necessary the rules of that court, the existence or lack of existence of material before the court when the decree was passed and the manner in which the decree is passed. The court agreed with the view of the Orissa High Court in Trilochan Choudhury v. Dayanidhi Patra, AIR 1961 Orissa 158, wherein it has been held that under section 13(b) even an ex parte judgment in favour of the plaintiff may be deemed to be a judgment given on merits if some evidence is adduced on behalf of the plaintiff and the judgment, however brief, is based on a consideration of that evidence. Where, however, no evidence is adduced on the plaintiff's side and his suit is decreed merely because of the absence of the defendant either by way of penalty or in a formal manner, the judgment may not be one based on the merits of the case. The court referred to the decision of the Kerala High Court in Govindan Asari Kesavan Asari v. Sankaran Asari Balakrishnan Asari, AIR 1958 Kerala 203, wherein it was held that in construing section 13 of the Code, the court has to be guided by the plain meaning of the words and expressions used in the section itself, and not by other extraneous considerations. There is nothing in the section to suggest that the expression "judgment on the merits" has been used in contradistinction to a decision on a matter of form or by way of penalty. The court Page 24 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT held that section prescribes the conditions to be satisfied by a foreign judgment in order to be accepted by an Indian court as conclusive between the parties thereto and between parties under whom they or any of them litigate under the same title. One such condition is that the judgment must have been given on the merits of the case. Whether the judgment is one on the merits must be apparent on the judgment itself. It is not enough if there is a decree or a decision by the foreign court. In fact, the word "decree" does not find a place anywhere in the section. What is required is that there must have been a judgment. What the nature of that judgment should also be indicated by the opening portion of the section where it is stated that the judgment must have been directly adjudicated upon questions arising between the parties. The court must have applied its mind to that matter and must have considered the evidence made available to it in order that it may be said that there has been an adjudication upon the merits of the case. It cannot be said that such a decision on the merits is possible only in cases where the defendant appears and contests the plaintiff's claim. Even where the defendant chooses to remain ex parte and keep out, it is possible for the plaintiff to adduce evidence in support of his claim, so that the court may give a decision on the merits of his case after a due consideration of such evidence instead of dispensing with such consideration and giving a decree merely on account of the default of appearance of the defendant. In the former case, the judgment will be one on the merits of the case, while in the latter the judgment will be one not on the merits of the case.
15.4 In R.E. Mahomed Kassim & Co. v. Seeni Pakir Bin Ahmed (supra), a Full Bench of the Madras High Court held Page 25 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT that a foreign judgment is not conclusive if it has not been given on the merits of the case and therefore a suit does not lie on it. The court held that under section 13(b) of the Code, a decree obtained without any trial on evidence is a case where the judgment must be held not to have been given on the merits of the case.
15.5 In R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar (supra), the Madras High Court held that it is clear from section 13(b) of the Code that the foreign judgment will be conclusive only if there was an adjudication between the same parties on the merits of the case. In other words, if the foreign judgment is not based upon the merits, whatever the procedure might be in the foreign country in passing judgment, those judgments will not be conclusive. It is, therefore, open to the party against whom such foreign decrees are sought to be executed under section 44A of the Code, to resist the execution on the ground that such foreign decrees are not conclusive as they are not passed on merits.
16. On the basis of the principles enunciated in the above decisions, it may now be examined as to whether the judgment in question, namely the judgment of the First Section of the Ghent Commercial Court, is a judgment on merits. In the present case, it is an admitted position that the defendant was served with the summons issued by the Ghent Commercial Court which is further evident from the contents of paragraph 13 of its written statement filed before the trial court, wherein the defendant has submitted that it had instructed in writing its counterpart to produce evidence and to contest the plaintiff's suit in that court, but the agent failed to act according to such instructions, otherwise such tragedy would Page 26 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT not have occurred.
17. In the plaint, the plaintiff has mentioned that it has filed a claim against the defendant before the First Section of the Ghent Commercial Court, Belgium wherein vide judgment dated 27.2.2009, the said court has ruled that the claim is admissible and well founded and ordered the defendant to pay the claimant the amount set out therein. The plaintiff has also stated that Belgium does not fall under the reciprocating territory and so, based on the said judgment and order, cause of action arose for the plaintiff to file a suit against the defendant, as the execution is not possible.
18. In the written statement, the defendant has contended that the judgment of the Belgium Court does not disclose the actual calculation and grounds of challenge anywhere. The Belgium Court has not disclosed as to how the plaintiff suffered a particular amount of damages and the Belgium Court has passed the decree according to the claim of the plaintiff. However, except for filing its written statement making such assertions, the respondent - defendant has not adduced any evidence before the trial court to show that the Ghent Commercial Court has not recorded any evidence or that as per the practice of that court, in default of appearance of the defendant, the judgment follows as a matter of course.
19. In the affidavit of examination-in-chief filed on behalf of the plaintiff by Mr. Ashok Kumar Das, in paragraph xiii (second paragraph xiii as two consecutive paragraphs have been given the same number), it has been specifically stated that the defendant has been properly served with summons to appear before the court of Ghent. However, it chose not to appear in Page 27 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT the said court and to defend itself. Furthermore, even if it concerns a judgment by default, Belgian courts are obliged to verify each claim and have thus established that plaintiff's claim is indeed correct.
20. Thereafter, since the representative of the company Mr. Ashok Kumar Das, who had retired and gone to Orissa, another examination-in-chief was filed on behalf of the plaintiff by one Mr. Ravindra Kumar Mehta wherein it has been stated that Mr. Ashok Kumar Das remained present before the court at least three times to offer cross-examination but the defendant did not turn up to cross-examine him and now on account of age, he cannot come time and again. The affidavit filed by Mr. Ravindra Kumar Mehta is in terms of the earlier affidavit filed by Mr. Ashok Kumar Das. It appears that even thereafter, the defendant has not cross-examined the witness nor has it led any oral evidence before the trial court. That the trial court, however, has considered the contentions raised in the written statement filed on behalf of the defendant and has framed the following issues which as translated into English, read thus :
(1) Whether the plaintiff proves that in terms of the order of the Ghent Commercial Court, Belgium, the defendant is liable to pay to the claimant EUR 1,73,193 (in words one lac seventy three thousand one hundred and ninety three euros) as well as judicial interest and additionally EUR 1.00 provisional amount plus judicial interest thereon and the cost of proceedings estimated at EUR 571.36 for the cost of summons and setting down the case on the cause list, plus EUR 1000 as a fee for administration of justice on the side of the claimant?
(2) Whether the plaintiff is entitled to pendent lite interest as well as future interest on the amount claimed in the suit? And if yes, the rate thereof?
(3)Whether the plaintiff is entitled to costs of the suit?Page 28 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020
C/FA/2696/2018 JUDGMENT (4)Whether the defendant proves that it is not liable to pay any amount in terms of the judgment of the Belgium Court?
(5)Whether the defendant proves that the suit of the plaintiff suffers from the bar of the non-joinder of necessary parties?
(6)What order?
21. The trial court after considering the material on record, including the contentions raised in the written statement of the defendant, has dismissed the suit. Reference may be made at this stage to the relevant findings of the trial court, which read thus:-
(8.6) Thus under above provisions the Court shall presume that a foreign judgment is conclusive except for the exceptions as stated in clauses (a) to (t). Under Section 14 of the Code of Civil Procedure, 1908 the Court shall presume that a foreign judgment is pronounced by a Court of competent jurisdiction when a certified copy of such judgment is produced. This presumption can be displaced by proving want of jurisdiction. Herein present case the defendant has taken dispute regarding want of jurisdiction of the Ghent Commercial Court, Belgium in his written- statement. But the defendant has not produced any evidence to prove it. The burden lies on the defendant to prove want of jurisdiction of the Ghent Commercial Court. But the defendant has not discharged this burden by producing any evidence. Further, the defendant has also contended that his case falls under the exceptions as stated in clauses (b), (c), (d) and (f). Of course the burden lies on the defendant to prove that his case falls under those exceptions. The defendant has not produced any evidence to prove that his case falls under any of those Page 29 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT exceptions. But when it is apparent on the face of the record and it can be seen from the bare reading of the judgment on which the plaintiff relies, the Court cannot sit and wait tor the defendant to prove those exceptions. When the defendant fails to discharge his burden the Court cannot grant decree in favour of the plaintiff when from the bare reading of the judgment on which the plaintiff relies it appears that the said judgment falls in any of the exceptions as mentioned in clauses (a) to (f) of Section 13."
The trial court has thereafter referred to various extracts of the decision of the Supreme Court in M/s. International Woollen Mills v. Standard Wool U.K. Ltd. (supra) and has held thus:-
"(8.11) On the basis of above legal position, let us consider whether the decree relied on by the plaintiff is a decree on merits. On perusing the decree produced by the plaintiff at Exh46 it reads as under:
"In view of the defendant's failure to enter an appearance, the claim - insofar as it can be judged in the absence of any contradictory arguments appears to be justified and adequately proven.
ON THOSE GROUNDS, THE DISTRICT COURT, Passing judgment in default of appearance;
Rules that the claim is admissible and well-founded"
(8.12) Thus the judgment clearly states that the claim of the Page 30 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT plaintiff was presumed to be admitted only on the ground of non-appearance of the defendant. The Court had not gone into the merits of the plaintiff's claim. No points of controversy between the parties have been examined in the said judgment. It appears to be given ex-parte as the defendant defaulted in appearing before the said Court. Hence the said judgment cannot be said to be given on merits. As observed by Hon'ble Supreme Court (supra) such a decree cannot be enforced in India.
(8.13) As discussed above the judgment of the Ghent Commercial Court [Exh-44] is not given on merits. Hence such judgment cannot be enforced in India. Hence defendant cannot be said to be liable to pay the plaintiff the amount as mentioned in the said judgment. Hence Issue No.1 is answered in Negative."
22. In the aforesaid background, the court is required to examine as to whether or not the judgment of the Ghent Commercial Court can be said to be a judgment on merits. For this purpose, it may be germane to refer to the entire judgment of the Ghent Commercial Court, which is reproduced hereunder for ready reference:-
"The First Section of the Ghent Commercial Court has granted the following judgment in the matter of:
PSI NV (PHARMACEUTICAL SERVICES INCORPORATED), having its registered office at Kraanlei 27, 9000 Ghent (Belgium) and enterprise number 0454.891.594, represented by mr De Backer deputising for mr Johan Van Driessche, lawyer in Oudenaarde;
Claimant, Page 31 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT versus:
SYNCHRON. RESEARCH SERVICES PRIVATE LIMITED. a company incorporated under foreign law, having its registered office at 3rd and 5th Floors, The Chambers, Sarkhej- Gandhinagar Highway, Bodakdev, Ahmedabad 380054, India, which did not enter an appearance and was not represented;
Defendant, Stating that Articles 2 and 30 to 42 of the Belgian Language Act of 15 June 1935 were observed.
Having examined the recorded writ of summons commencing the legal proceedings dated 10 October 2007 and the other documents.
Having heard the claimant's arguments put forward at the public hearing of Friday, 20 February 2009.
The defendant did not enter an appearance and was not represented.
The purpose of the claim is for the defendant to be ordered to pay the claimant the amount of EUR 173,193.00, plus judicial interest thereon. as well as additional damages, provisionally estimated at EUR 1.00, plus judicial interest thereon, and the costs of the proceedings.
In view of the defendant's failure to enter an appearance, the claim insofar as it can be judged in the absence of any contradictory arguments - appears to the justified and adequately proven.
ON THOSE GROUNDS, THE DISTRICT COURT, Passing judgment in default of appearance; Rules that the claim is admissible and well-founded;
Orders the defendant to pay the claimant the amount of ONE HUNDRED AND SEVENTY-THREE THOUSAND, ONE HUNDRED AND NINETY-THREE EUROS, plus judicial interest.
Orders the defendant to pay a provisional amount of EUR 1.00, plus judicial interest;Page 32 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020
C/FA/2696/2018 JUDGMENT Orders the defendant to pay the costs of the proceedings, estimated at EUR 571.36 for the costs of summons and setting down the case on the cause-list, plus EUR 1,000.00 as a fee for the administration of justice on the side of the claimant, excluding registration fees and the costs of authenticated copies;
Rules that this judgment is provisionally enforceable, notwithstanding the application of any legal remedy and without security;
The judgment was thus pronounced at the ordinary and public hearing of Friday, the twenty-seventh of February, two thousand and nine.
The case was presided over by Ms G. Kips (Deputy President of the Court, President), Mr G. Van Verdeghem and Ms. H. Platteau (judges in commercial matters), assisted during the judgment by Ms M. Geldof (Registrar)."
23. A close reading of the above judgment indicates that the judgment records that the court has examined the documents and considered the arguments. It has also considered the claim and has recorded that in absence of contradictory arguments, it has found that the claim appears to be justified and adequately proven. These are the grounds given in the judgment. The court has categorically recorded that the defendant did not enter appearance and was not represented and on the grounds recorded as referred to hereinabove it has passed judgment in default of appearance.
24. As noticed earlier, on behalf of the appellant - plaintiff, it has been stated on oath that even if it concerns a judgment by default, Belgian Courts are obliged to verify each claim and have thus established that the plaintiff's claim is indeed correct. The defendant has not cross-examined the witness and therefore, the version of the plaintiff that the Belgian Page 33 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT Courts are obliged to verify each claim has gone un-rebutted. The defendant has neither bothered to lead any oral evidence to rebut the plaintiff's claim nor is there even an averment in the written statement to the effect that as per the practice of the courts at Belgium, in the default of appearance of the defendant, a decree follows. In the decision of the Full Bench of the Madras High Court in B.E. Mahomed Kassim & Co., v. Seeni Pakir Bin Ahmed & Ors. (supra) on which strong reliance has been placed on behalf of the respondent/defendant, it was established that under the rules governing the Penang Court, where the defendant does not appear, a decree is given as a matter of course, which is not the case insofar as the facts of the present case are concerned. The Supreme Court in International Woollen Mills v. Standard Wool (supra) has held that the burden of proving that the decree is not on merits would be on the party alleging it. The party, amongst other things, must show that the decree does not show that it is on merits, if necessary the rules of that court, the existence or lack of existence of material before the court when the decree was passed and the manner in which the decree is passed. None of this has been done in this case, and the defendant has failed to bring any material on record to show that the judgment of the Ghent Commercial Court is not a judgment on merits.
25. As discussed hereinabove, on reading the judgment of the Ghent Commercial Court in its entirety, it does not appear as if the same has been passed merely on account of default of the appearance on the part of the defendant, but has been passed after considering the merits of the claim of the plaintiff. The court after considering the evidence on record has found that in the absence of any contradictory arguments, the claim Page 34 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT appears to be justified and adequately proven. While it is true that the court has not discussed the nature of the evidence adduced by the plaintiff, it is equally true that the court has looked into the material on record and considered the arguments advanced before it and has found that the claim of the plaintiff is justified and adequately proven. Under the circumstances, it is not possible to state that the judgment passed by the Ghent Commercial Court is not a judgment on merits. Insofar as the applicability of clause (d) of section 13 of the Code is concerned, in the opinion of this court, it cannot be said that the judgment of the Ghent Commercial Court is in breach of the principles of natural justice as has been sought to be contended on behalf of the respondent - defendant. Moreover, the defendant was duly served with the summons, but failed to enter appearance. The summons were issued in October, 2007 whereas the judgment came to be passed on 27th February, 2009, therefore, it is not as if the Ghent Commercial Court has immediately pronounced the judgment in default of appearance of the defendant. Under the circumstances, in the absence of the case falling under any of the exceptions laid down under section 13 of the Code, the judgment of the Ghent Commercial Court is conclusive of 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. Consequently, the appellant - plaintiff is entitled to a decree in terms of the said judgment.
26. The trial court, in the impugned judgment, has not referred to the entire judgment of the Ghent Court and has merely referred to the operative part of the decree wherein it is recorded that "passing judgment in default of appearance;
Page 35 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020C/FA/2696/2018 JUDGMENT rules that the claim is admissible and well founded" and which does not indicate the grounds for passing the judgment. The trial court in the impugned judgment has recorded that the judgment clearly states that the claim of the plaintiff was presumed to be admitted only on the ground of non- appearance of the defendant. In the opinion of this court, the aforesaid finding of the trial court is de hors the record inasmuch as there is nothing in the judgment of the Ghent Court to indicate that the claim of the plaintiff was presumed to be admitted only on the ground of non-appearance of the defendant. As discussed hereinabove, the Ghent Commercial Court has recorded that it has perused the recorded writ of summons whereby the legal proceedings were commenced as well as the other documents and has considered the arguments put forward by the claimant, and has expressed the view that in the absence of any contradictory arguments being advanced by the defendant, the claim appears to be justified and adequately proven. It is on these grounds that the Ghent Commercial Court has passed the judgment and not on the ground of non-appearance of the defendant. Such finding of the trial court is, therefore, based upon an incomplete reading of the judgment of the Ghent Commercial Court and is clearly, perverse to the record of the case.
27. For the foregoing reasons, Point No.1 is decided in the affirmative, namely that the judgment of the Ghent Commercial Court is a judgment on merits.
28. Proceeding to Point No.2, viz. whether the appellant/plaintiff is entitled to a decree based solely upon such judgment; section 13 of the Code clearly provides that a Page 36 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT foreign judgment shall be conclusive as to any matter, thereby directly adjudicated upon between the same parties or between the parties under whom they or any of them claim litigating under the same title. The Supreme Court, in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi (supra) has held that a foreign judgment is enforceable by a suit upon the judgment which creates an obligation between the parties and has passed a decree in favour of the decree-holder.
29. In the light of the law laid down by the Supreme Court in the above decision, Point No.2 is required to be answered in the affirmative, namely that the appellant-plaintiff is entitled to a decree based solely upon the judgment of the Ghent Commercial Court.
30. Insofar as the last point is concerned, namely, whether the appellant-plaintiff is entitled to a trial on merits having regard to the nature of the reliefs claimed in the plaint, in the light of the fact that points No.1 and 2 have been decided in the affirmative, this question is rendered academic and hence, it is not necessary to enter into the merits thereof.
31. As discussed hereinabove, in the opinion of this court, the trial court has failed to appreciate the contents of the judgment of the Ghent Commercial Court in proper perspective while arriving at the conclusion that such judgment is not on merits and therefore, falls within the exception contained in clause (b) of section 13 of the Code. The impugned judgment passed by the trial court therefore, cannot be sustained.
32. One of the contentions advanced on behalf of the respondent - defendant was that the authorisation issued by Page 37 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020 C/FA/2696/2018 JUDGMENT the appellant company to the authorised signatory is only for the purpose of execution of the decree of the Belgium Court and there is no authorisation to institute a suit. In the opinion of the court when the authorisation is for execution of the decree, it goes without saying that it authorises the person to do all that is necessary for execution of the decree. If a decree is not executable directly and needs a suit to be instituted first to obtain a decree in terms of the decree of the foreign court, it would be a step towards the execution of the decree, therefore, it cannot be said that the person was not authorised to institute a suit.
33. In the light of the above discussion, the appeal succeeds and is accordingly allowed with no order as to costs. It is held that the appellant is entitled to a decree in terms of the judgment dated 27.2.2009 passed by the First Section of the Ghent Commercial Court in No.A/08/00303. The suit is accordingly decreed in terms of the relief claimed vide paragraph L(i) and (ii) of the plaint. The decree shall be drawn accordingly.
34. At this stage, the learned advocate for the respondent has prayed that the operation of this judgment be stayed for a period of eight weeks so as to enable the respondent to approach the higher forum. The request is considered and turned down.
(HARSHA DEVANI, J) (SANGEETA K. VISHEN,J) BINOY B PILLAI Page 38 of 38 Downloaded on : Sun Jun 14 11:29:49 IST 2020