India: Executability & Enforceability Of Foreign Judgments And Decrees In India: Judicial Trends ~ Part 4

In the case of Satya v. Teja Singh⁷⁹ the Supreme Court held that since the plaintiff had misled the foreign court as to its having jurisdiction over the matter, although it could not have had the jurisdiction, the judgment and decree was obtained by fraud and hence inconclusive.

In the case of Sankaran v. Lakshmi⁸⁰ 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."

In the case of T. Sundaram Pillai v. Kandaswami Pillai ⁸¹, the plaintiff filed a suit against two defendants on the basis that the money extended by him towards the marriage of the plaintiff’s daughter to Defendant No. 1 was repayable by the two defendants jointly. The defendants were set ex-parte. However, defendant No.2 got the exparte order set aside and filed his written statement in which he took the plea that there was no jurisdiction with the Court. But defendant No. 2 did not appear, thereafter and was set ex-parte. The decree was passed in favour of the plaintiff. When the decree came for execution, the defendant No. 2 took the plea that it was obtained by fraud. The Court held as follows:

"All that can be said on this point is that the case brought by the plaintiff was a false case and that defendant 1 assisted him in obtaining a decree by withdrawing from any resistance. It does not seem to me that the words "by fraud" can possibly be applied to circumstances such as these. It cannot be argued that merely because a plaintiff obtains a decree upon evidence which is believed by the Court but which in fact is not true, he has obtained that decree by fraud. There must be fraud connected with the procedure in the suit itself to bring the matter within this clause. This clause also therefore does not apply to the present case."

In the case of Maganbhai Chhotubhai Patel v. Maniben ⁸², the court held that since the plaintiff had misled the court regarding his residence (domicile), the decree having been obtained by making false representation as to the jurisdictional facts, the decree was obtained by fraud and hence was inconclusive.

By reading the aforesaid cases under Section 13(e) of CPC the following proposition may be laid:

In case the plaintiff misleads or lies to the Foreign court and the judgment is obtained on that basis, the said Judgment may not be enforceable, however if there is a mistake in the judgment then the Indian courts will not sit as an appeal Court to rectify the mistake .

In the case of T. Sundaram Pillai v. Kandaswami Pillai ⁸³, (facts already stated above), the plea of the defendant was that the judgment was obtained in breach of the Contract Act since the defendants at the relevant time were minors when the contract was entered into and since under the Contract Act they were not competent to enter into a contract, the claim was founded on the breach of the Indian Law. The Court held as follows:

"This claim is founded partly perhaps upon a breach of the contract Act, but also partly upon a claim under the Contract Act which in no way involves its breach. Whether that claim is a good one or a bad one is not for me now to decide. The District Munsif of Trivandrum has given a decree to the appellant and that decree sustains a claim which was not wholly founded upon a breach of the Contract Act. It seems to me therefore that the appellant cannot be prevented by clause (f) of S. 13 from executing his decree in British 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 reading the aforesaid cases under Section 13(f) of CPC the following proposition may be laid:

A judgment or a decree, passed by a foreign court, on a claim founded on a breach of any law in force in India may not be enforceable. However, in case it is based upon a contract having a different "proper law of the contract" then it may be enforced.

The procedure for executing a foreign decree in India is an onerous one. Even after getting a decree from the concerned Court, the Indian Courts may refuse to enforce the same against the Indian defendant due to the operation of S. 13 of CPC, resulting in a paper decree. Therefore it is advisable for the plaintiff to file suits in India itself in order to obviate the troubles of getting a foreign decree executed. In addition to this advantage of executability, a foreign plaintiff, when he comes to India, has the choice of a variety of other faster forums available. Therefore an action in India against an Indian Defendant is more feasible than a foreign one.