Chamber Summons No. 629 of 1999,England Case No. D 109 of 1998,Execution Appln. No. of 1999

29th July, 1999

Petitioner Counsel: Mr. R. A. DADA with Mr. PRAVIN SAMDANI with Mr. PRATIK SAKSARIA with Mr. CHETAN KAPADIA with Mr. H. K. SUDHAKARA i/b. DAVE & GIRISH & Co
Respondent Counsel: Mr. VIRENDRA V. TULZAPURKAR with Mr. SHEKHAR NAPHADE i/b. ANIL MENON

Cases Cited:
Life Insurance Corporation of India Vs. Escorts Ltd. , AIR 1986 SC 1370 [Para 6]
ABN-AMRO BANK N. V. Vs. Satish Dayalal , Choksi in Appeal No. 869 of 1990 IN Notice No. 671 of 1989 dt. 3-8-1992 [Para 6,11]
Kanak Vinod Mehta Vs. Vinod Dulerai Mehta, 1991 Mh. L.J. 1064 [Para 8]
Pravin R. Geglani Vs. M/s. Beharilal Beniprasad Pvt. Ltd. , AIR 1978 Bom. 255 [Para 8,9]
Raja Soap Factory Vs. S. P. Shantharai, AIR 1965 SC 1449 [Para 9]
Maharashtra State Financial Corporation Vs. Jaycee Drugs & Pharmaceuticals Pvt. Ltd, 1991 (71) Company Cases 360 [Para 9]
Khetan Industries Pvt. Ltd. Vs. Manju Ravindraparasad Khetan, , AIR 1995 Bom. 43 [Para 9]
The Daily Calendar Supplying Bureau, Sivakasi Vs. The United Concern, AIR 1967 Madras 381 [Para 9]
Mary Thomas Vs. K.E. Thomas, AIR 1990 Madras 231 [Para 9]
A.K.K. Nambiar Vs. Union of India & Anr., AIR 1970 SC 652 [Para 11]
Ravji Ranchod Naik Vs. Vishnu Ranchod Naik, IX Indian Law Reports, Bombay Series 241 [Para 11]
Monmohini Guha Vs. Banga Chandra Das, XXXI Indian Law Reports 357 Calcutta Series [Para 11]
Ferozi Lal Jain Vs. Man Mal & Anr., , AIR 1970 SC 794 [Para 11]
Smt. Kaushalya Devi Vs. K. L. Bansal, AIR 1970 SC 838 [Para 11]
Algemence Bank Nederland NV Vs. Satish Dayalal Choksi , AIR 1990 Bom. 170 [Para 11]
D. T. Keymer Vs. P. Vishvanathan Reddi, AIR 1916 PC 121 [Para 11]
R. Viswanathan & Ors. Vs. Abdul Wajid, AIR 1963 SC 1 [Para 11]
Y. Narasimha Rao Vs. Y. Venkata Lakshmi, (1991) 3 S.C.C. 451 [Para 12A]

JUDGMENT

JUDGMENT :- The decree Holders have moved this Court for leave to execute the decree under section 13 r/w. section 44A of the Code of Civil Procedure. The decree holders have annexed a certificate from the Master of Queen's Bench Division of the Supreme Court of England and Wales, that the decree for a sum of US$ 1,609,135.00 plus interest/liquidated damages to be assessed, remains outstanding in the sum of US$ 1,457,230.30 with interest/liquidated damages to be assessed. The Certificate is dated 5-10-1998. Exh. "C" is the Statement of Claim by the decree holders.

2. Judgment Debtors have filed their reply through the constituted attorney of Judgment Debtor No.2. The principal contention as raised in the said reply is that a decree cannot be executed for the following reasons ;

i) That the consent given, based on which a decree was passed on admission was not a free consent ;

ii) That the decree violates the provisions of the Foreign Exchange Regulation Act ;

iii) That Decree is not on merits ;

iv) That Rate of interest in the form of liquidated damages is in violation of the laws of this country; and

v) That Application for execution is not properly made to the Principal Civil Court as the High Court is not a District Court for the purposes of section 13 and 44-A of the Code of Civil Procedure.

3. Decree Holders have filed a rejoinder, to which is annexed a letter dated March 09, 1998 written by the Judgment Debtor No. 1 to Kearns & Company, Decree Holder's Solicitors alongwith the acknowledgment of service of writ of summons presented by the Asprey Finance Limited. Also letter dated March 14, 1998 by Judgment Debtor No.2 to Solicitors for Glade Securities Limited alongwith the acknowledgment of service of writ of summons. Also annexed is a letter dated 06-4-1999 by the Assistant General Manager, Reserve Bank of India to the Advocates of the decree holders that the application for remittance would be considered after orders are received from the Indian Court for execution of the decrees.

The above facts have been narrated as they are essential for disposing of the issues that arise in this matter.

4. In order to examine the contentions raised on behalf of the Judgment Debtors, section 13 of the Code of Civil procedure needs to be looked into. Section 13 sets out a Foreign Judgment can be conclusive except in the following cases. They are ;

(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;

(f) Where it sustains a claim founded on a breach of any law in force in India.

The objection therefore as to the conclusiveness of a judgment must be founded on one of the above.

5. Let me deal with the first contention namely whether the judgment passed on admission was not based on free consent. Whether consent was free or not is a mixed issue of fact and law. What is sought to be contended is that the decree not based on free consent is not binding. It cannot be said that this amounts to violation of the principles of natural justice. If consent was not free consent it also cannot be said that the judgment was obtained by fraud. At any rate fraud has not been pleaded. The very fact that the Judgment Debtors did not challenge the judgment and on the contrary made partial payments towards satisfaction of the decree must negate this contention of free consent. In so far as this Court is concerned, the Court will look at the judgment before it, and not whether the judgment is based on a erroneous view of the law and or on evidence. Unless the objection is covered by one of the exceptions, other issues cannot be gone into by this Court. Objection No.1 therefore cannot be entertained and, as such, must be rejected.

6. The second contention is that permission of the Reserve Bank of India is required to execute a decree. I need not dwell at length on the matter, as, in my view, the objection is covered by the Judgment of the Apex Court in Life Insurance Corporation of India Vs. Escorts Ltd. & Anr., A.I.R. 1986 Supreme Court 1370. In paragraph 63 of the said judgment after discussing the various requirements of the Foreign Exchange Regulation Act, the Apex Court has held that permission of the Reserve Bank of India should be obtained at some stage. In that case, it was permission for purchase of shares by Non-resident Companies. In an unreported judgment of this Court in ABN-AMRO BANK N. V. Vs. Satish Dayalal Choksi in Appeal No. 869 of 1990 in Notice No. 671 of 1989 decided on 3rd August, 1992 in a matter arising from execution of a Foreign Award, a Division Bench of this Court was considering the very same objection as raised herein. On considering the law, the Division Bench held that grant of leave under Rule 22 is merely a preliminary measure for the purpose of issuing process for the execution of the decree. The grant of leave, the Court observed, does not automatically lead to the enforcement of the decree but it is necessary for the executing Court to issue process etc. The Division Bench thereafter observed ;

"In our judgment, the grant of leave under Rules 22 is merely a preliminary measure or a step which enables the Court to consider grant of process for enforcement of a decree. Being a preliminary measure, it is not necessary for the Bank to obtain prior permission of the Reserve Bank of India or the Central Government for the purpose of institution of the proceedings for grant of leave under Order XXI Rule 22 of the Code of Civil Procedure."

The judgment of the Apex Court and the Division Bench therefore squarely covers the objection raised herein. The objection therefore must be rejected. Even otherwise, from the letter produced with the rejoinder, dated 06-04-1999, Reserve Bank of India have informed the Decree Holders that their application would be considered after orders have been passed by the executing Court. That objection therefore is rejected.

7. Before dealing with the third objection, let me deal with the fourth objection viz. that the rate of interest in the form of liquidated damages is in violation of the provisions of law being usurious. The interest calculated works to 13.18%. Interest so charged cannot be said to be usurious. That contention also must be rejected.

8. That leaves us with the third and fifth contentions which must be now disposed of. I propose to first discuss contention No. 5 as that contention goes to the very root of this Court to consider an application for execution. The contention is that the High Court is not a District Court for the purposes of section 44-A of the Code of Civil Procedure and, as such, the application for execution before this Court is without jurisdiction and, consequently, must be dismissed. The contention is, that this Court, apart from looking at the provisions of section 2(4) of the Code of Civil Procedure which defines "District" must also consider the provisions of the General Clauses Act and more specifically section 2(17) which defines "District Judge". It is contended that in so far as section 44-A is concerned, what is required is that a certified copy of the decree has to be filed in the District Court. The decree must be executed as if it had been passed by the District Court. Reliance for the said contention is based on a Division Bench judgment of this Court in the case Kanak Vinod Mehta Vs. Vinod Dulerai Mehta, 1991 Maharashtra Law Journal, 1064. The expression "District Court" as used in the Family Courts Act was under consideration. Reliance was placed on section 2(17) of General Clauses Act and section 2(4) of the C.P.C. 1908. The Division Bench observed that a High Court is not a District Court for apart from original jurisdiction it is also an Appellate Court for not only the District but for the entire State. This judgment was pressed to meet the judgment relied upon by the decree holders of a Single Judge of this Court in the case of Pravin R. Geglani Vs. M/s. Beharilal Beniprasad Pvt. Ltd., A.I.R. 1978 Bombay 255. It is therefore contended that the notice should be dismissed being without jurisdiction. A Single Judge of this Court has taken a view that in so far as the proceedings in execution of Foreign Decree are concerned the City Civil Court is the District Court for the purpose of Execution of Decrees for matters covered by the notifications. Notifications refers to pecuniary jurisdiction. On the other hand, the Division Bench of this Court, in so far as the provisions of the Family Court Act are concerned, has taken a view that for the purpose of that Act High Court is not a District Court. If that can be said to be the ratio decidendi of the judgment of the Division Bench, then sitting as a Single Judge I will be necessarily bound by that view inspite of a Judgment directly on the issue by a Single Judge of this Court.

It will therefore be necessary to examine that judgment, considering the provisions of the Code of Civil Procedure, 1908, the Letters Patent of this Court as also the provisions of the Bombay City Civil Court Act, 1948. In the first instant, let me advert to the relevant clauses of the Letters Patent of this Court. Clause 11 of the Letters Patent sets out that this Court shall have and exercise ordinary original civil Jurisdiction within such local limits as may from time to time be declared and prescribed. Similarly, Clause 12 of the Letters Patent provides that in the exercise of its ordinary original civil jurisdiction, this Court shall be empowered to receive, try and determine suits of every description as set out therein. Apart from that, there are special jurisdictions conferred in the Court like clauses 17, 18 etc.

The Bombay City Civil Court Act, 1948 as its preamble shows established an Additional Civil Court for Greater Bombay. Section 3 of the said Act reads as under :-

"The State Government may by notification in the Official Gazette, establish for the Greater Bombay a Court, to be called the Bombay City Civil Court. Notwithstanding anything contained in any law, such court shall have jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature arising not exceeding fifty thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognizable."

The words "Not exceeding fifty thousand rupees" were sought to be deleted by an amendment. The said amendment is a subject matter of a challenge and has presently been stayed. The section therefore as it now stands is that the City Civil Court exercises pecuniary jurisdiction over suits not exceeding fifty thousand rupees. There is also a Court of Small Causes which exercises pecuniary jurisdiction in respect of suits of a particular value. All other suits of the pecuniary value exceeding Rs. 50,000/- are cognizable and triable by this Court. Therefore, within the original territorial limits of this Court, the Court of Small Causes exercises jurisdiction over matters which it has pecuniary jurisdiction, the City Civil Court exercises jurisdiction over matters which it has pecuniary jurisdiction, and this Court exercises original jurisdiction in all suits exceeding pecuniary jurisdiction of rupees fifty thousand. In this context, therefore, the expression in section 44-A will have to be understood.

In that context, one may straight away look at a definition of a "District" as defined under section 2(4) of the Code of Civil Procedure :

"District: means the local limits of the jurisdiction of a principal Civil Court of original jurisdiction (hereinafter called a "District Court"), and includes the local limits of the ordinary original civil jurisdiction of a High Court." (emphasis supplied)

Section 3 of the Code of Civil Procedure sets out ;

"For the purposes of a Code, the District Court is Subordinate to the High Court, and every Civil Court of a grade inferior to that of a District Court and every Court of Small Causes is subordinate to the High Court and District Court."

Section 2(17) of the General Clauses Act defines "District Judge" to mean the Judge of a Principal Civil Court of Original jurisdiction but shall not include a High Court in the exercise of its Ordinary or Extra-ordinary Civil Jurisdiction. This sub-section was relied on and interpreted by the Division Bench in Kanak Vinod Mehta Vs. Vinod Dulerai Mehta (Supra) which judgment is at the core of the Judgment Debtors' contention.

Execution of Decrees are included in Part II of the Code of Civil Procedure. Under section 38 a decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. Under section 39, the Court which passed a decree may, on the application of the decree-holder, send it for execution to another Court of competent jurisdiction. Sub-section (3) of that section sets out:

"For the purposes of this section, a Court shall be deemed to be a Court of competent jurisdiction if, at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed."

Apart from the High Courts, which have Ordinary Original Jurisdiction, and in Presidency Towns where City Civil Courts and Small Causes Courts are set up, in the rest of the country, suits are tried by the hierarchy of Courts. In this Hierarchy of Courts, the District Court normally is the Appellate Court over those subordinate Courts. Decrees are therefore normally executed by the subordinate Courts. However, in so far as section 44-A is concerned, a special jurisdiction is carved out by which the power of execution of foreign decree is conferred on the District Court and the Foreign Decree is to be executed as if it has been passed by the District Court. Therefore, section 44-A has conferred a separate and special jurisdiction on the District Courts. In High Courts exercising original jurisdiction we are restricted to answer the question whether whilst executing Foreign Decree, it is the City Civil Court alone which would be the District Court for the purpose of exercising jurisdiction ? The judgments cited may now be considered. Let me say in due humility that I would have been more at ease in discussing the issue considering the language of the various statutes. I am however constrained by the doctrine of 'precedents' which forms part of our judicial process apart from Article 141. Bound as I am by the precedents, let me consider the judgments cited.

9. In Raja Soap Factory Vs. S. P. Shantharai & Ors., A.I.R. 1965 Supreme Court 1449, a suit was instituted in the Mysore High Court as the District Court of Mysore was closed for vacation. The suit was under the provisions of the Trade and Merchandise Marks Act. The suit was entertained by the High Court of Mysore as also an application for interim relief. The interim relief in the form of temporary injunction was granted and that is how the matter reached the Apex Court. I need only re-produce the following observation of the Apex Court from paragraph 3 of the said Judgment :

"The expression "District Court" has by virtue of S.2(e) of Act 43 of 1958 the meaning assigned to that expression in the Code of Civil Procedure, 1908. Section 2(4) of the Code defines a "district" as meaning the local limits of the jurisdiction of a principal civil Court called the District Court - and includes the local limits of the ordinary original civil jurisdiction of a High Court. If, therefore, a High Court is possessed of ordinary original civil jurisdiction, it would, when exercising that jurisdiction be included for the purpose of Act 43 of 1958 in the expression "District Court".

In Maharashtra State Financial Corporation Vs. Jaycee Drugs And Pharmaceuticals Pvt. Ltd. & Ors., 1991 (Vol. 71) Company Cases 360, the Apex Court was considering filing of applications for recovery of loans advanced to industrial concerns and in presidency towns who would have jurisdiction to entertain such applications. After considering the provisions of section 31 and 32, the Apex Court observed as under :

"In the instant case, the extent of the liability of the surety being more than rupees fifty thousand, the application could only have been filed and was rightly filed in the High Court and the finding in the judgment under appeal to the contrary holding that the High Court had no jurisdiction to entertain the application cannot be sustained."

In Khetan Industries Pvt. Ltd. & Ors. Vs. Manju Ravindraparasad Khetan, A.I.R. 1995 Bombay 43 also the issue arose under the Indian Trust Act as to the meaning of the expression "Principal Civil Court". A learned Single Judge of this Court held that a City Civil Court was an Additional Court which was set up and the Principal Civil Court of Ordinary Jurisdiction is this Court and not the City Civil Court. The matter has been elaborately considered considering the provisions of sub-section (1) of section 31.

A Division Bench of the Madras High Court in The Daily Calender Supplying Bureau, Sivakasi Vs. The United Concern, A.I.R. 1967 Madras 381 was considering the expression "District Judge" as set out under section 2(17) of the General Clauses Act. The Court was considering the term "District Court" in section 62(1) of the Copy Right Act, 1957. After considering the matter, the Division Bench of the Madras High Court held in order to find out the meaning of term 'District Court' in section 62(1) reliance on section 2(17) of the General Clauses Act for the expression 'District Judge' would not be proper as in certain cases a 'District Judge' may not be equivalent to the Presiding Officer of a District Court. The court then proceeded that in so far as the Copy Right Act is concerned, the High Court can be deemed to be the District Court within the meaning of section 2(4) of the Code of Civil Procedure, 1908.

A learned Single Judge of this Court in Pravin R. Geglani Vs. M/s. Beharilal Beniprasad Pvt. Ltd. was considering the very issue which has arisen before this Court. Proceedings for execution of a foreign decree were lodged before the Bombay City Civil Court. Objections were raised before the City Civil Court that the Court had no jurisdiction as it was not the principal court of original jurisdiction. The learned judge had earlier passed an order dated 17th February, 1976 making Notice under Order 21 Rule 22 absolute. However, he thereafter upheld the objection and dismissed the proceedings. In these circumstances, an appeal was preferred before this Court. On the consideration of the provisions of the Code of Civil Procedure, the provisions of the Bombay City Civil court Act and the two judgments of the Madras High Court, the learned Judge held that considering the pecuniary value of the decree to be executed, it would be the City Civil Court which would have jurisdiction.

10. We will now advert to the judgment of the Division Bench of this Court in Kanak Vinod Mehta (Supra). The matter was placed before the Division Bench, as there was a difference of views between two learned Judges of this Court. The matter referred to the Division Bench was as under:-

"It is the family court which has the jurisdiction in respect of the suit by virtue of the Family Courts Act and, therefore, on the establishment of the Family Court this Court has ceased to have jurisdiction in respect of this suit by virtue of clause (a) of section 8 of the Family Courts Act and the suit stands transferred to such Family Court by virtue of clause (c) of section 8 of the Family Courts Act."

Before proceeding further, I may point out that an amendment was allowed to the plaint during the pendency of the proceedings before the Division Bench which resulted in the suit falling within the jurisdiction of this Court. Section 7 of the Family Courts Act was the section pertaining to the nature of suits to be decided by the Family Court. We are more concerned with section 8 which referred to exclusion of jurisdiction and pending proceedings. Section 8(a) reads as under :

"No District Court or any subordinate Civil Court referred to in sub-section (1) of section 7 shall, in relation to such area, have or exercise any jurisdiction in respect of any suit or proceeding of the nature referred to in the Explanation to that sub-section."

What was under consideration before the Division Bench was therefore the expression "District Court" under section 8(a) of the Family Courts Act. The Division Bench posed the question as to whether:

The High Court, as a District Court entertains, hears and decides suits and proceedings of the nature referred to in the Explanation to sub section (1) of section 7?

The Division Bench noted the Full Bench judgment of the Madras High Court in Mary Thomas Vs. K. E. Thomas, A.I.R. 1990 Madras 231 which has taken the view that:

"The jurisdiction of the High Court on its Original Side is not ousted by any of the provisions contained in the Act and the High Court shall continue to exercise the jurisdiction vested in it under the Letters Patent and all other laws, notwithstanding the provisions of section 7 and section 8 of the Act."

The Division Bench then proceeded to observe that the Act was a central statute and it was a settled rule of interpretation, that the same construction be given to a central statute. The Division Bench observed, upon that principle alone, they would be obliged to hold as the Full Bench of the Madras High Court had held. After having said so the Division Bench, thereafter proceeded to add further reasons and in that context examined the expression "District Judge" and held :

"It is clear that a distinction is drawn by the Code between a High Court and a District Court and the expressions are used therein in different contexts."

The issue which the Division Bench of this Court was answering was whether the jurisdiction of this Court was ousted by virtue of the provisions of section 7 and 8 of the Family Courts Act. The ratio decidendi of the judgment would be that in so far as the Family Courts Act is concerned, the jurisdiction of this Court conferred on it by the Letters patent is not ousted. The judgment of the learned Single Judge of this Court in Pravin R. Geglani was neither considered nor answered. In my opinion therefore the judgment in Kanak Vinod Mehta (Supra) will be restricted to the question before the Division Bench. It cannot therefore be said that the Division Bench for all purposes including execution of decrees has held this Court not be the Principal Court of original jurisdiction.

Even otherwise, as pointed out earlier, in so far as the suits are concerned, the Ordinary Original Jurisdiction is exercised, based on pecuniary limits. It would be impossible to read into section 44-A that for the purpose of execution only, even though the pecuniary jurisdiction of City Civil Courts is restricted, for the purpose of execution of a foreign decree it becomes the District Court in respect of those matters which fall within the Ordinary Original Civil Jurisdiction of this Court. Section 2(4) will have to be given effect. So read, the expression "District Court" for execution of foreign decrees, will be this Court in so far as its pecuniary jurisdiction is concerned. Having said so, I must reject the said contention that proceedings have not been instituted in the competent Court having jurisdiction to execute a decree.

11.That leaves us with the last contention that the judgment was not on merits. Before proceeding, I may refer to an objection raised on behalf of the Decree Holders that the affidavit filed by the attorney of the Judgment Debtors should be rejected in view of the law laid down by the Apex Court in A.K.K. Nambiar Vs. Union of India & Anr., A.I.R. 1970 Supreme Court 652. After considering the provision of Order XIX, the apex Court has stressed on the need of verification as to which averments are based on a knowledge and what is based on information. However, I find that it is a common practice adopted in this Court that affidavits are not verified as required and no exception is taken to the practice. If the said contention is accepted today, I will have to reject every affidavit which does not confirm to the law as laid down by Apex Court, which though binding, seems not followed in affidavits filed before this Court. I, therefore, do not propose to entertain that objection as in the present case, for deciding the issue the documents on records will be sufficient.

As pointed out a foreign judgment is conclusive except as to what is contained in section 13. Amongst them is that the judgment is not a judgment on merits. It was sought to be contended that, for a judgment to be on merits, the judgment must disclose the reasons. A perusal of the judgment, would indicate that there are no reasons, and once it is so held, it cannot be said that the judgment is conclusive. On behalf of the Judgment Debtors, learned counsel argued :

i) As to what is a judgment on merits and ;

ii) That even if a Court has jurisdiction, the judgment of the Court would be a nullity at law if it did not consider the requirements of an enactment whilst passing the judgment.

For the later proposition, support is sought in the case of Ravji Ranchod Naik Vs. Vishnu Ranchod Naik, IX Indian Law Reports, Bombay Series 241 and in the case of Monmohini Guha Vs. Banga Chandra Das, XXXI Indian Law Reports 357 Calcutta Series. In both these cases the issue was whether while granting probate, the Court could dispense with requirements of proving the Will. Both the judgments have taken the view that the Will had to be proved as otherwise the Court has no jurisdiction to grant probate without the Will having been proved as required. Reliance was placed on the judgment in Ferozi Lal Jain Vs. Man Mal & Anr., A.I.R. 1970 Supreme Court 794 and the case of Smt. Kaushalya Devi & Ors. Vs. K. L. Bansal, A.I.R. 1970 Supreme Court 838. Both these cases were under the Rent Act. Eviction was sought based on compromise decree. The Apex Court held that in a case of statutory tenancy where eviction was sought, eviction could be only under one of the grounds made out under the Act. The Court could not pass a decree by consent without there being material before it that a ground for eviction had been made out. The said judgments are based on public policy.

In so far as what is a judgment on merits, reliance was placed on the judgment of a learned Single Judge of this Court in Algemence Bank Nederland NV Vs. Satish Dayalal Choksi, A.I.R. 1990 Bombay 170 where the learned Single Judge has considered the law as to what is a judgment on merits. I may straight away point out that various judgments on which the learned judge has relied upon have basically followed, the view taken in D. T. Keymer Vs. P. Vishvanathan Reddi reported in A.I.R. 1916 PC 121. All the Judgments are either in respect of foreign judgments where on failure to answer interrogatories defence was struck off or ex-parte judgment. It is in those circumstances that the Courts arrived at a conclusion that a judgment passed either by striking of the defence or ex-parte without deciding the issues in controversy on merit will not be a judgment on merits. The view taken by the learned Single Judge in so far as Algemence Bank Nederland NV Vs. Satish Dayalal Chyoksi (Supra) is concerned, was reversed by a Division Bench in ABN-AMRO BANK N.V. Vs. Satish Dayalal Choksi (Supra). However, it may be pointed out that additional evidence was led before the Division Bench to show that the judgment was on merits. I have only referred to the judgment of the Division Bench to point out that the judgment of the learned Single Judge which had dismissed an application for execution on the ground that it was not based on merits was subsequently set aside.

In Bank of Baroda Vs. Manubhai Jethabhai Patel & Ors. in Execution to Application Lodging No. 167 of 1999 I had occasion to consider a judgment passed in a summary suit on failure to apply for leave to defend. Therein, I had occasion to consider the view of the learned Single Judge in Algemene Bank Nederland NV Vs. Satish Dayalal Choksi. In so far as summary procedure is concerned, I have taken the view, that if the judgment was passed after complying with the requirements of the law of the country, it does not cease to be a judgment on merits.

I may now advert to the judgment of the Apex Court in R. Viswanathan & Ors. Vs. Abdul Wajid, A.I.R. 1963 Supreme Court 1 as, according to me, the Apex Court has exhaustively considered what is judgment on merits and what must be considered by the Court in executing a foreign judgment. We are not much concerned with the facts of that case. Shortly stated, suit was instituted in Mysore by the executors of a Will. The Judgment of the Mysore High Court had become final. Thereafter, suit was instituted at Madras. The Madras High Court took a view that in respect of moveable and immoveable properties situated within its jurisdiction the judgment of the Mysore Court was not conclusive. That is how the matter reached the Apex Court. The Apex Court reversed the judgment in so far as moveables are concerned but confirmed the judgment in so far as the immoveables are concerned. I will refer to three paragraphs in the said judgment which in my opinion are sufficient for deciding the controversy in the present case in respect of execution of a foreign decree.

(32) " A 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 S.13 of the Code of Civil procedure is the judgment, i.e., the final adjudication, and not the reasons, 74 Ind App 203 : (AIR 1947 PC 192). Section 13 in essence enacts a branch of the rule of res judicata in its relation to foreign judgments, but not every foreign judgment is made conclusive in the Indian Courts by S.13. To be conclusive, a foreign judgment must be by a court competent both by the law of the State which has constituted it and in an international sense, and it must have directly adjudicated upon the "matter" which is pleaded as res judicata. The expression "matter" in S.13 is not equivalent to subject matter; it means the right claimed. To be conclusive the judgment of the foreign Court must have directly adjudicated upon a matter, the adjudication must be between the same parties, and the foreign Court must be a court of competent jurisdiction."

"A foreign judgment of a competent Court is conclusive even if it 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 be the same or similar as in the Municipal Court."

(35) "The rule of conclusiveness of a foreign judgment as enacted in S.13 is some what different in its operation from the rule of res judicata. Undoubtedly both the rules are founded upon the principle of sanctity of judgments competently rendered. But the rule of res judicata applies to all matters in issue in a former suit which have been heard and finally decided between the parties, and includes matters which might and ought to have been made ground of attack or defence in the former suit. The rule of conclusiveness of foreign judgments applies only to matters directly adjudicated upon. Manifestly, therefore, every issue heard and finally decided in a foreign court is not conclusive between the parties. What is conclusive is the judgment. Again, the competence of a Court or the application of the rule of res judicata falls to be determined strictly by the municipal law; but the competence of the foreign tribunal must satisfy a dual test of competence by the laws of the State in which the Court functions, and also in an international sense."

(145) "As regards the extent of conclusiveness of foreign judgments, the subject again gets divided into two parts. Judgments in rem, according to Foote on Private International Law, 5th Edn. p. 625, are received in respect of any matter decided by them. The following passage gives his views :

"Accepting then, as incontrovertible the principle that a foreign judgment in rem is conclusive in all Courts and against all parties, it remains to consider to what its conclusiveness has been held to extend. As to the facts directly adjudicated upon there can be no doubt, but there is often difficulty in applying the principle to facts inferentially decided, as well as to the grounds, expressed or implied, of the foreign decision. The safest expression of the English law, on the subject appears to be that the truth of every fact, which the foreign Court has found, either as part of its actual adjudication or as one of the stated grounds of that decision must be taken to be conclusively established".

He, however, adds that the foreign Court will not be taken as having established any fact which it has not expressly found as laid down in the judgment relied on. Short of this, not only the actual decree but every adjudicative fact is treated as conclusively decided. Rattigan in his Private International Law at p. 268 observes :

"A foreign judgment is conclusive as to any matter thereby adjudicated upon and cannot be impeached for any error either.

(1) of fact

(2) or of law".

In so far as judgments in personam are concerned, any of the matters decided inter partes are binding on the parties and privies, though not on strangers. This follows from the rule now firmly grounded that a foreign judgment will be examined from the point of view of competence but not of its errors, subject of course, to there being no fraud, collusion, breach of the principles of natural justice or of public policy of England or a wrong apprehension of the law of England, if that law be involved. From the conclusiveness of foreign decrees, it may be said here that the penal laws of another Country or judgments involving a penal decree are excluded. It is customary to quote Chief Justice Marshall's famous dictum in the Antelope (1824-27) 10 Wheat 66,123; 6 law Ed. 268. "The Courts of no country execute the penal laws of another." The same is the position of decrees, orders or judgments in matters of taxation and penalties under taxing laws. The American Courts follow in these respects the law in England, the Goodrich in his Conflict of Law, p. 603, sums up the American approach in one pithy sentence :

"A valid foreign judgment should be recognized and given effect in another State as a conclusive determination of the rights and obligations of the parties. This is the modern doctrine."

He adds further :

"On principle, the foreign judgment should be conclusive. The judgment has determined that, under the law of the State where it was rendered, the plaintiff has or has not certain rights, and that the defendant is or is not under certain corresponding legal obligations. Those rights and obligations exist in the State where the judgment was rendered so long as the judgment remains in force. When such a judgment is presented for recognition and enforcement in another State, it ought to be treated no less favourable than any suit founded upon foreign operative facts."

12. The question therefore is, can the present judgment be said to be a judgment on merits ? As observed by the Apex Court, the Court, considering the judgment considers the judgment and not the reasons for the judgment. The tests may now be applied. In so far as the present judgment is concerned, is the judgment on merits ? A judgment to be on merits as was sought to be contended, must contain reasons. Reasons are not required to make the judgment conclusive. The present judgment is a judgment on what is known on admissions. The Supreme Court Practice which are the rules pertaining and Order XXVII which are the rules pertaining to a judgment on admissions of the competent Court in England, sets out when a judgment can be passed on admission. In the rejoinder to the affidavit, the Decree Holders have annexed an acknowledgment of service of writ of summons wherein, in Part II to the question, Whether they intend to contest, both the Judgment Debtors, have answered that they do not propose to contest the plaintiff's claim. Once the Judgment Debtors themselves did not propose to contest the claim, there could be no issue to be decided by the competent Court, but to proceed to pass Judgment in terms of Order XXVII of the Supreme Court Practice. As pointed out earlier, the view taken in so far as ex-parte judgments, is on account of the fact that merely because proceedings proceed ex-parte it does not mean that the plaintiff is entitled to judgment without proving his claim. The Defendant can still cross-examine the Plaintiff and the Plaintiff must prove his claim. Similarly, where a defence is struck out, a plaintiff is not entitled to a judgment until he proves his claim. It is in that context that the Courts have proceeded and have answered as to what is a judgment on merits. If the judgment reflects that issues arising before the Court had been answered, that is a judgment on merits. In the instant case, that is not in issue, the judgment is a judgment on admission and, consequently, I am of the opinion that it cannot be said that it is not a judgment on merits as there were no issues to be decided. It may also be remembered that the certificate is for the unsatisfied part of the decree as part payment had already been made.

(Added vide order dated 20/08/1999)

12A. This view finds support from the Judgment of the Apex Court in the case of Y. Narasimha Rao Vs. Y. Venkata Lakshmi, (1991) 3 SCC 451. The Apex Court had an occasion to consider clause (b) of Section 13 as to when a judgment could be said to have been given on merits. The apex Court observed as under :-

(a) that the decision of the foreign Court should be on a ground available under the law under which the parties are married, and

(b) that the decision should be a result of the contest between the parties.

The latter requirement is fulfilled only when the respondent is duly served and voluntarily and unconditionally submits himself/herself to the jurisdiction of the Court and contests the claim, or agrees to the passing of the decree with or without appearance.

Considering that in the present case in the acknowledgment of service of writ of summons the judgment debtors had expressed their intention not to contest the proceedings, the ratio of the judgment in N. Narasimha Rao (supra) would apply to the present case.

13. In the light of that, I find no merit in the contentions raised on behalf of the Judgment Debtors. Liberty to the Decree Holders to execute the decree.

14. On behalf of the Judgment Debtors, their learned Counsel seeks stay of the order. Order stayed for a period of 8 weeks. There was an interim injunction granted by this Court, the said injunction to continue for a period of 8 weeks from today.

15. Notice accordingly disposed of.

Chamber Summons allowed.