Every decree in India, be it foreign or domestic, are covered under the provisions of the Civil Procedure Code, 1908 (CPC). Section 2(6) of the Code defines a “foreign judgment” as any judgment of a foreign court. Section 2(5) of the CPC defines a ‘foreign court’ to mean a Court which is outside the territory India and is not established by or continued under the authority of the Government of India.
CPC sections which deal with foreign judgment/decrees are
Section 13 and Section 14. Section 13 deals with the principle of Private International Law, which states that the indian court will not enforce a foreign judgment if the judgment is not that of a competent court. The rules laid down under section 13 are of substantive law, as well of procedural laws.
Section 13 lays down the basic rules which Every judgment/ decree has to pass these ‘tests’ laid down under Section 13 of the CPC.
I) In deciding whether the same is conclusive, courts in India will not consider whether are supported by evidence or are otherwise correct, because its binding character may be displaced only by establishing whether the case calls within one or more of the six clauses in Sec. 13.
II) If the judgment falls within one or more clauses of section 13, it will cease to have a conclusive value as to any matter thereby adjudicated upon and will be open to attacks from the opposing party on the grounds mentioned in Section 13.
A foreign judgment acts conclusive as to any matter it is directly adjudicated upon, excluding the reasons for judgment. Section 13 enacts a branch of the rule of res judicata in its relation to foreign judgments. The expression “matter” does mean “subject-matter”; but the rights claimed by the parties.
When foreign judgment not conclusive.
A foreign judgment shall be conclusive in Indian court as to any matter which are directly adjudicated upon between the same parties or any claim litigating under the same title except-
where the judgement/decree has not been pronounced by a Court of competent jurisdiction;
(b) or where the judgement has not been given on the merits of the case;
Under S. 13 of a foreign judgment becomes inconclusive and consequently unenforceable in the following circumstances:
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 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.
In order to make the approach clear various decisions of the Supreme Court of India, various High Courts and other Courts are discussed in order to bring the law on the point, in perspective. Keeping in mind the end goal to settle on the methodology clear different choices of the Supreme Court of India, different High Courts and different Courts are talked about so as to bring the law on the point, in context. So as to demonstrate a thorough perspective of the law, also the ratio decidendi a short averment of the case are added. Each of the aforesaid exceptions, under S. 13 have been dealt with separately and at the end of each discussion,related cases are mentioned also the courts viewpoint has been duly provided.
A.) Decree/Judgment should originate from a court of competent jurisdiction-
A foreign judgment to be conclusive must be by a court of competent jurisdiction and the competence must be in an international platform, and not merely by the law of the foreign state who has pronounced the judgement. The competency of the judgement is decided in accordance with the principles of private international law. The action of the foreign court, when it is considered of having competent jurisdiction, act in personam.
These are the circumstances which would give competent jurisdiction to courts:
• Where the person is a subject of the foreign country in which the judgment has been obtained against him on prior occasions.
• Where he is a resident of a foreign country when the action is commenced.
• He was temporarily present in the foreign country when the process was served on him.
• Where he in his character as plaintiff in the foreign actions selects the court as the forum for taking action in the capacity of a plaintiff, in which forum he is sued later.
• Where the party on the summons voluntarily appears.
• Where by an agreement a person has contracted to submit himself to the forum in which the judgment is obtained.
A foreign judgment suit can be effective in an Indian Court country even though the foreign court had no jurisdiction if the defendant without any objection submits to the jurisdiction. When the defendant submits to the jurisdiction of foreign court by falling written statement the decree passed by it is valid and executable.
In the case of Moloji Nar Singh Rao v. Shankar Saran,
Facts of the case are, a suit was filed by the plaintiff in a foreign Court for recovery of some money from the defendants. The Defendants did not appear in the foreign court despite service of the writ of summons. The suit thereafter was proceeded ex-parte against the defendants. The judgement was duly passed by the court . The decree was brought to the local court for execution. After a round of litigation on the executability of the judgement passed by the foreign court the matter came up before the Supreme Court of India.
The major issue which came up before the Court for consideration was “what conditions are necessary for giving jurisdiction to a foreign court before a foreign judgment is regarded as having extra-territorial validity.”
The Supreme Court in order to answer this issue relied upon the pronouncement of Halsbury’s laws and held that none of those conditions were satisfied in the present case. The Court while applying those conditions observed that:
The respondents (defendants) were not the subjects of Gwalior (foreign country).
(b) They did not owe any allegiance to the Ruler of Gwalior and therefore they were under no obligation to accept the judgments of the Courts of that state.
(c) They were not residents in that state when the suit was instituted.
(d) They were not temporarily present in that State when the process was served on them.
(e) They did not in their character as plaintiffs in the foreign action themselves select the forum where the judgment was given against them.
(f) They did not voluntarily appear in that court.
(g) They had not contracted to submit to the jurisdiction of the foreign court.
Therefore the apex court held that the foreign decree was not enforceable in this country and could not be executed in the local courts.
The Supreme Court also referred upon a Privy Council decision in the case of Sirdar Gurdial Singh v. Maharaja of Faridkot, delivered by Lord Selbourne, where it was held that-
“In a personal action to which none of these causes of jurisdiction previously discussed apply, a decree pronounced in absentem 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 or every nation except (when authorized by special local legislation) in the country of the forum by which it was pronounced.”
In another case of Andhra Bank Ltd.. v.R. Srinivasan, a suit was filed against a guarantor within the proper jurisdiction. However during the pendency of the suit the defendant died and the legal representatives of the defendant were brought on record. The decree was passed and came up for execution, the legal representatives of the defendant questioned the executability of the said decree on the basis that since they had not submitted to the jurisdiction of the said Court, therefore the decree was not executable against them under section 13(a) of CPC.
The issue before the Supreme Court was that whether, the suit is validly instituted, but during the pendency of the suit one of the defendants expires and his non-resident foreign legal representatives are brought on record, does the rule of private international law in question (as referred to above in the case of Sirdar Gurdial Singh’s case) invalidate the subsequent continuance of the said suits in the court before which they had been validly instituted.
The Supreme Court after referring to a chain of cases, observed that the material time is when the test of the rule of private international law is to be applied and it is the time at which the suit was instituted. Therefore it was held that the legal representatives of the dead defendant, although foreigners were bound by the decree and the section 13(a) could not help them in any way.
In the case of Kukadap Krishna Murthy v. Godmatla Venkata Rao, the court while relying upon the case of Sirdar Gurdial Singh’s it was held by a Full Bench of the Andhra Pradesh High Court that a decree passed in absentem was a total nullity as a foreign judgment, in other words, it is not a valid foreign judgment, the execution of which could be levied in Courts situated in a foreign territory. The Court further held as follows:
“Judged by Municipal Law, the adjudicating Court has no doubt jurisdiction to entertain proceedings when certain requirements are fulfilled. But that does not invest judgments rendered by such courts with validity, if they could not be regarded as Courts of competent jurisdiction. It cannot be open to much doubt that a decree of a court without jurisdiction is null and void. We are not persuaded that the interpretation placed by the Full Bench of the Bombay High Court on the passage in question is warranted by the language thereof. It is true, as remarked by the learned Judges that S. 20 CPC vests in courts in British India a power to entertain suits in all cases where the cause of action has arisen within the territorial limits of that Court. To that extent, the jurisdiction to take cognizance of suits by that forum is authorized by special local legislation. This section enables Courts in British India to pass decrees which are capable of execution as domestic judgments. It deals only with matters of domestic concern and prescribes rules for the assumption of territorial jurisdiction by British Indian Courts in causes with their cognizance. The operation of the decrees passed by these Municipal Courts is confined to the limits of their jurisdiction as conferred on them by the relevant provisions of the CPC. As foreign judgments, they have no validity and they are, as it were non est so far as the area outside the jurisdiction of the adjudicating Courts is concerned, if they do not conform to the principles of Private International Law. Such a judgment is an absolute nullity in the international sense.”
In the case of R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar, the Court opined that it was the firm which had duly accepted the jurisdiction of the foreign Court (Singapore) and the Respondent, in an individual capacity, had not accepted the jurisdiction of the foreign court. This was one of the reasons for which the High Court held that the said decree against the Respondent was not executable.
The High Court also went to lay down the circumstances when the foreign country court will have jurisdiction under the section 13 of CPC. The circumstances mentioned are as follows:
Where the person is a subject of the foreign country in which the judgment has been obtained against him on prior occasions.
(b) Where he is a resident in foreign country when the action is commenced.
(c) Where a person selects the foreign Court as the forum for taking action in the capacity of a plaintiff, in which forum he is sued later.
(d) Where the party on summons voluntarily appears
(e) Where by an agreement a person has contracted to submit himself to the forum in which the judgment is obtained.
However,in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram the Madras High Court distinguished the ratio given by the court in the case of Ramanathan Chettiar, by pointing that a person who has filed suits in a Court having jurisdiction to try them, cannot by inference be taken to subject himself to the jurisdiction of the same Court in cases where that Court has no jurisdiction to try the matter.
In another case of I&G Investment Trust v. Raja of Khalikote, It involved an action initiated in England against an Indian subject (Respondent) on the basis of a contract which was governed by the English Law. In this regard, the Calcutta High Court, while considering that under Order XI of the Supreme Court Rules of England, summons could be served upon a person outside the jurisdiction of the English Courts (assumed jurisdiction), on the basis that a contract governed by English law had been breached, held that since only the payments were governed by English law, a willingness to submit to the English Jurisdiction could not be shown.27 The Court in obiter dictum observed that even though it is held that the contract is governed by the English law, it could not be assumed to give jurisdiction in the International sense, although it may give rise to a cause of action. On basis of this the Calcutta High Court decided that the decree was not executable in India.
B.) Judgement not given on the merits of the case-
The foreign court which decided the case, if has not taken into account the merits of the case while giving the judgement then the courts here reserves the right to pronounce them non executable in India. For better clarification on their proposition few cases are discussed below.
D.T. Keymer v. P. Viswanatham. In this case, the facts are such that a suit for money was brought into an English Courts against the defendant as a partner of a firm, wherein the defendant denied that he was a partner of the said firm and also that any money was due. Thereupon the defendant was subjected to certain interrogation. On his omission to answer such interrogation his right to defence was suspended and judgment was delivered favouring the plaintiff. When the judgment was sought to be enforced in India, the defendant raised the objection on the point that the judgment pronounced by the foreign court had not been rendered on the merits of the case and hence was not conclusive under the provisions of Section 13(b) of CPC. The matter reached the Privy Council, where the Court held that since the defendant’s defence was unjustly suspended by the foreign court and it can be concluded that the defendant has not defended the claim and the claim of the plaintiff was not investigated duly, the decision process was incomplete not conclusive by the provisions of S. 13(b) and therefore, could not be enforced in India.
In the case of Gudemetla China Appalaraju v. Kota Venkata Subba Rao, The court an interesting issue was dealt in relation to section 13(b) of CPC. In this case the issue was whether a consent decree obtained by the party in a foreign court could be regarded as a decision given on the merits of the case by case the foreign court within the meaning of section 13 of CPC. The Courts in India held that for such a decree to be conclusive in relation to the meaning of section 13 of CPC, there should be a point of controversy and an adjudication thereon shall be done by the foreign court. It was further opined by the Indian courts that since in the said case there was no point of controversy and that there was no scope of dispute before the Court to decide or adjudicate, the decree which was passed technically was in accordance with a prescribed Rules relating at the matter. Therefore the Indian Court held that the judgment delivered was not on the merits of the case and therefore was not conclusive within the meaning of section 13 of CPC.
In the case of Gurdas Mann v. Mohinder Singh Brar, the Punjab High Court decided that an ex-parte judgment and decree passed by the foreign court are not conclusive in proving that the plaintiff had provided evidence to prove his claim before the said Court, thus it is not executable under section 13(b) of the CPC since it does not pass the test of merits of the claim.
In the case of Gajanan Sheshadri Pandharpurkar v. Shantabai, the Bombay High Court held that the true test for determining whether a decree is passed on the merits of the claim or not is whether the judgment has been given as a penalty for any conduct of the defendant or whether it is based on a consideration of the truth or otherwise of the plaintiff’s case. In the present case, the defendant was considered to be ex-parte, and the claim of the plaintiff was investigated into by the court, the question against the judgement raised under section 13(b) was held to be unsustainable.
The Patna High Court in the case of Wazir Sahu v. Munshi Das it was held that if one of the issues had not been dealt with, that itself would not justify a finding that the decision was not upon the merits.
C.) Where the judgment is passed disregarding the Indian Law or the International Law-
In this case of Anoop Beniwal v. Jagbir Singh Beniwal it relates to a matter of matrimonial dispute between the two parties. The facts of the case are such that the plaintiff had filed a suit for divorce in England under the English Act, i.e. the Matrimonial Causes Act, 1973. The ground under which the suit was filed by the plaintiff was “that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent.” This ground was mentioned by section 1(1)(2)(b) of the Matrimonial Causes Act, 1973. The decree for divorce was duly obtained in England and the party came to India for the enforcement of the decree . However, the respondent claimed that since the decree was entirely based on the English Act, there was refusal by the English Court to recognise the Indian Law while giving judgement. The Indian Court held that under the Indian Hindu Marriage Act under S. 13(1)(ia), there is a akin ground which is “cruelty” on which the divorce may be granted by the indian courts. Therefore the English Act, only used a similar expression for the same ground and therefore there was no scope refusal to recognise the decree in relation law of India. Thus the decree was enforceable in India.
In the case of I & G Investment Trust v. Raja of Khalikote,
here a suit was filed in the English court in order to avoid the consequences of default provided in the Orissa Money Lenders Act. The Court held that the judgment which was passed by the foreign court was on an incorrect view of the International law. The Court further observed that, although the judgment was based on the allegation in the plaint that the Indian law did not apply, however there was no refusal to recognise the local laws by the Court.
D.) Where the proceedings in which judgment was obtained are opposed to natural justice-
In the case of Hari Singh v. Muhammad Said
“The Court found that the foreign Court did not appoint a person willing to act as a guardian ad litem of the minor defendant. The court also held that proceedings could not have proceeded ex-parte against the minor. The Court further held that the minor defendant did not have any knowledge of the suit being pending against him even after he became a major which was before the judgment was passed. On this basis the court held that the passing of the judgment against the minor was opposed to natural justice within the meaning S. 13(d) of CPC. The Court also held that since the legal representatives of one of the defendants were also not brought on record, this also amounted to denial of natural justice. Therefore the judgment was held to be inconclusive qua these defendants.”
In the case of Sankaran Govindan v. Lakshmi Bharathi,
Here the Supreme Court while elucidating the scope of section 13(d) of CPC and the expression “principles of natural justice” in the context of foreign judgments opined as:
“… it merely relates to the alleged irregularities in procedure adopted by the adjudicating court and has nothing to do with the merits of the case. If the proceedings be in accordance with the practice of the foreign court but that practice is not in accordance with natural justice, this court will not allow it to be concluded by them. In other words, the courts are vigilant to see that the defendant had not been deprived of an opportunity to present his side of the case. The wholesome maxim audi alterem partem is deemed to be universal, not merely of domestic application, and therefore, the only question is, whether the minors had an opportunity of contesting the proceeding in the English Court. If notices of the proceedings were served on their natural guardians, but they did not appear on behalf of the minors although they put in appearance in the proceedings in their personal capacity, what could the foreign court do except to appoint a court guardian for the minors.”
In this case it was held by the court that since the natural guardians who were served with the notices did not exhibit any interest in joining the proceedings in the court, the appointment of an officer of the court to act as a guardian of the minors in the proceedings was substantial compliant to the rule of Natural justice.
E.) Where it has been obtained by fraud-
In the case of Satya v. Teja Singh the Supreme Court held that since the plaintiff had grossly misled the foreign court regarding its having jurisdiction over the dispute, whereas it could not have had any jurisdiction, the judgment and decree was obtained by fraud and hence it was held inconclusive.
In another case of Sankaran v. Lakshmi the Supreme Court held as follows:
“In other words, though it is not permissible to show that the court was mistaken, it might be shown that it was misled. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely that on the merits, the decision was one which should not have been rendered but that it can be set aside if the Court was imposed upon or tricked into giving the judgment.”
F.) Where it sustains a claim founded on a breach of any law in force in India
In the case of I&G Investment Trust v. Raja of Khalikote, it was held as follows:
“It is argued that the Orissa Money Lender’s Act precludes a decree being passed for more than double the principal amount and in passing a decree, based on a claim which violates that rule, the English Court sustained a claim founded on the breach of a law in force in the State of Orissa. I am unable to accept the argument. The claim was not based on the law as prevailing in India at all. Rightly or wrongly, the plaintiffs alleged that the parties were governed not by the Indian law but the English Law. The English Court accepted that plea and were consequently not sustaining a claim based on any violation of the law in India. Suppose, that the defendant had submitted to the jurisdiction of the English Court and that Court passed a decree. Such a decree would by implication have decided that the defendant was bound by English Law and that the Orissa Money Lender’s Act did not apply. Such a decision would be binding from the international point of view and the point could not be further agitated in these Courts.”
By refereeing to the aforesaid cases under Section 13(f) of CPC the proposition can be concluded that when a judgement or decree, passed by a foreign court, on the claims based on breach of law may or mayn’t be enforceable in India. It can be seen that from the above mentioned judgements that most of the foreign decrees are usually regarded as non executable in India if the indian courts are not satisfied by the terms of proceeding of the foreign court. For execution and enforcement of a foreign judgement the the plaintiff has file a fresh suit under sec 44 of CPC. Getting a decree in a foreign court effectively serves upto avoiding the inconvenience of leading evidence in Indian court.
Section 13 of CPC clearly lays down guidelines for competency of foreign courts. In any case of violation of these guidelines would render the decree as non executable in India. It is usually advised that all the claims must be filed in Indian courts to avoid inconvenience. Since internet transactions involves more of documentary evidence and that it is comparatively easy to provide leading evidence, as it may be advisable to avoid the risk under section 13 that can render the decree non executable and file claims in India itself to avoid such inconvenience.