The emerging legal issues on "jurisdiction" as regards transactions over the internet can hardly ignore the legal aspects involved in the execution/enforcement of foreign decrees. Even after exercise of jurisdiction, the Courts may be unable to help the plaintiff in getting relief in case the local laws of the country concerned have certain restrictions for the execution/enforcement of foreign judgements or decrees in the country.
Under Indian Law, execution of decrees, whether foreign or domestic, is governed by the provisions of the Code of Civil Procedure, 1908 (CPC) (as amended from time to time).1
Under the Indian law there are two ways of getting a foreign judgement enforced. Firstly by filing an Execution Petition under Section 44A of the CPC in case it falls in the criteria specified therein. Secondly by filing a fresh suit upon the foreign judgement/decree in the local jurisdiction.
Under S. 44A 2 of the CPC, a decree of any of the Superior Courts of any reciprocating territory are executable as a decree passed by the domestic Court. Therefore in case the decree does not pertain to a reciprocating territory or a Superior Court of a reciprocating territory 3, as notified by the Central Government in the Official Gazette, the decree is not directly executable in India. In that case the decree a fresh suit 4 will have to be filed in India on the basis of such a decree or judgement, which may be construed as a cause of action for the said suit. In the fresh suit, the said decree will be treated as another piece of evidence against the defendant .5
However in both the cases as mentioned above, the foreign decree has to pass the test of S. 13 6 CPC which specifies certain exceptions under which a foreign judgement becomes inconclusive and is rendered in-executable or unenforceable in India.
Under S. 13 of the Code of Civil Procedure, 1908 a foreign judgment becomes inconclusive and consequently unenforceable in the following circumstances:
- where it has not been pronounced by a Court of competent jurisdiction;
- where it has not been given on the merits of the case;
- 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;
- where the proceedings in which judgment was obtained are opposed to natural justice;
- where it has been obtained by fraud;
- where it sustains a claim founded on a breach of any law in force in India.
In the present paper, the author has endeavoured to bring various decisions of the Supreme Court, High Courts and other Courts of India under discussion to give a comprehensive view point on the law of execution of foreign decrees in India. Since S. 13 of CPC is the basic law for the execution of foreign decrees in India, each of the aforesaid exceptions, under S. 13 have been dealt with separately and at the end of each discussion, a broad proposition is derived from the decisions of the Courts is laid down so that it is easier to remember the law on the point. However, the proposition may not be exhaustive to cover all circumstances.
- Not Pronounced By A Court Of Competent Jurisdiction:
This is the first exception mentioned in S. 13 of CPC. In case the foreign court was not of competent jurisdiction, but still adjudicated the matter, the Indian executing Court may reject the execution of the foreign decree/judgment.
The following are the cases in which the Courts have held that there is no jurisdiction with the foreign Court and hence the Judgment or decree is unenforceable.
In the case of Moloji Nar Singh Rao v. Shankar Saran 7, a suit was filed by the plaintiff in a foreign Court for recovery of some amounts against the defendants. The Defendants did not appear despite service of the writ of summons. The suit thereafter was proceeded exparte against the defendants. The claim was decreed. The decree was brought to the local court for execution. After a round of litigation on the executability of the foreign decree 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 Halsbury's Laws of England Vol. III p. 144 para 257 (3rd Edition) 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).
- 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.
- They were not residents in that state when the suit was instituted.
- They were not temporarily present in that State when the process was served on them.
- They did not in their character as plaintiffs in the foreign action themselves select the forum where the judgment was given against them
- They did not voluntarily appear in that court.
- They had not contracted to submit to the jurisdiction of the foreign court.
Therefore the Supreme Court held that the foreign decree was a nullity and could not be executed in the local courts. The Supreme Court further relied upon a Privy Council decision in the case of Sirdar Gurdial Singh v. Maharaja of Faridkot 8, 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." 9
In the case of Andhra Bank Ltd.. v.R. Srinivasan 10,an interesting issue came up before the Court. In this case a suit had been filed against a guarantor in the proper jurisdiction. However during the pendency of the suit the guarantor/defendant died and the legal representatives of the said defendant were brought on record. When the decree was passed and came up for execution, the legal representatives questioned the executability of the decree on the basis that since they did not submit to the jurisdiction of the Court, therefore the decree was not executable against them under S. 13(a) of CPC. Now the Supreme Court was faced with the issue that whether, evenif 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 catena of cases, observed that the material time when the test of the rule of private international law is to be applied is the time at which the suit was instituted. Therefore it was held that the legal representatives, although foreigners were bound by the decree and the S. 13(a) could not help them in any way. 11
In the case of Kukadap Krishna Murthy v. Godmatla Venkata Rao 12, 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." 13
In the case of R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar 14, it was alleged by the respondent that since he was not a subject of the foreign country, and that he had not submitted to the jurisdiction of the Foreign Court (Singapore Court), the decree could not be executed in India. The Appellant, in defense of this argument, stated that the Respondent was a partner of a firm which was doing business in Singapore and had instituted various suits in the Singapore Courts. Therefore, the Appellant argued, that the Respondent had accepted the Singapore Courts jurisdiction. The Court held that it was the firm which had accepted the jurisdiction of the foreign Court and the Respondent, in an individual capacity, had not accepted the jurisdiction. 15This was one of the reasons for which the High Court held that the decree against the Respondent was not executable.
In the case of K.N. Guruswami v. Muhammad Khan Sahib 16, it was alleged that since the defendants were carrying on business in a partnership in the foreign state on the date of the action, and that the suit related to certain dealings with the firm, the issue of jurisdiction should be presumed against the defendants although an ex parte decree had been passed against them. The Court held that a mere fact of entering into a contract in the foreign country, does not lead to the inference that the defendant had agreed to be bound by the decisions of the Courts of that country. Therefore it was held that the decree was passed against the defendants without any jurisdiction.
The High Court in the above case had referred to a decision of the Madras High Court in the case of Ramanathan Chettiar v. Kalimuthu Pillai 17, which lays down the circumstances when the foreign courts would have jurisdiction under this Section. 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.
- Where he is a resident in foreign country when the action is commenced.
- 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
- Where the party on summons voluntarily appears
- Where by an agreement a person has contracted to submit himself to the forum in which the judgment is obtained.
However, the Madras High Court in the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram 18, distinguished the ratio in the case of Ramanathan Chettiar, by holding that a person who has filed suits in a Court having jurisdiction to try them, cannot by implication be taken to submit himself to the jurisdiction of the same Court in cases where that Court has no jurisdiction.
In the case of Sankaran v. Lakshmi 19, an interesting situation arose for the Supreme Court's consideration. The issue was whether the minors had an opportunity of contesting the proceedings in the English Court, if notices of the proceedings were served on thier natural guardians but they did not appear on behalf of the minors although they put in appearance in the proceedings in their personal Capacity and what could the foreign court do except to appoint a court guardian for the minors. The Supreme Court held that since the natural guardians had not entered appearance on behalf of the minors, the minors through the guardians could not be said to have submitted to the foreign court's jurisdiction and therefore the judgment qua them was a nullity. 20
In the case of Y. Narasimha Rao v. Y. Venkata Lakshmi 21, the Supreme Court in respect of a matrimonial dispute held that only those Courts which the Act (statute) or the law under which the parties are married recognizes as a court of competent jurisdiction can entertain the matrimonial disputes in that regard unless both parties voluntarily, and unconditionally subject themselves to the jurisdiction of that court.
In the case of Satya v. Teja 22, while dealing with a matrimonial dispute, the Supreme Court held that the challenge under S. 13 was not limited to civil disputes alone but could also be taken in criminal proceedings. In this case a foreign decree of divorce obtained by the husband from the Nevada State Court in USA in absentum of the wife without her submitting to its jurisdiction was held to be not binding and valid upon a criminal court in proceedings for maintenance.23
In the case of Ramkisan Janakilal v. Seth Harmukharai Lachminarayan 24, a division bench of the Nagpur High Court while following the decision in the case of Sirdar Gudyal Singh, held that a mere fact that a contract was made in the foreign country did not clothe the foreign court with jurisdiction in an action 'in personam'. Further it was held that a person cannot be held to have submitted to the jurisdiction of a foreign court if his attempt to get the ex-parte judgment set aside fails. It was held that the submission to the jurisdiction of a foreign court has to be before the foreign decree is passed.25
The case of I&G Investment Trust v. Raja of Khalikote 26, 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.28 On this basis the Calcutta High Court held that the decree was not executable in India.
In the case of Narappa Naicken v. Govindaraju Naicken 29, it was held that failing in an action to set aside a foreign decree in the foreign Courts does not amount to submission to jurisdiction, however, in case the decree is set aside and the party is allowed to plead and a new decree is passed then the defendant would be deemed to have submitted to the jurisdiction of the foreign court.
In the case of Thirunavakkaru Pandaram v. Parasurama Ayyar 30, it was held that if a party has once appeared before a foreign court in the character of the plaintiff, it does not mean that he is forever afterwards to be regarded as having submitted to the jurisdiction of the foreign court in any subsequent action, by any person or upon any cause of action, which may be brought against him.
In the case of VithalBhai ShivaBhai Patel v. Lalbhai Bhimbhai 31, the Bombay High Court held that the mere fact that the transaction on which the suit had been instituted in the foreign Court, was effected during the time the defendant's agent, holding a power of attorney of the defendant, which on the date of institution of the suit had expired, was living in the foreign Country, does not amount to submission to the jurisdiction of the foreign Court. However in obiter dictum the Court observed that in case the power of attorney holder is in the foreign Court and the summons are served upon him, then it may amount to submission to the jurisdiction of the Court.
The following are the cases in which the Courts have held that there is jurisdiction with the foreign Court.
The Supreme Court in the case of Shalig Ram v. Firm Daulatram Kundanmal 32, held that filing of an application for leave to defend a summary suit in a foreign court amounted to voluntary submission to the jurisdiction of the foreign Court.
In the case of Chormal Balchand Firm v. Kasturi Chand 33, the Calcutta High Court while considering the issue of submission to jurisdiction held that in case a defendant appears in the Court where the suit is instituted and questions both the jurisdiction and challenges the action on merits, he is said to have submitted to the jurisdiction voluntarily.
In the case of Oomer Hajee Ayoob Sait v. Thirunavukkarasu Pandaram 34, the Madras High Court while dealing with the issue of submission to jurisdiction held that mere conduct or circumstances indicative of intention to submit to the jurisdiction is enough to derive a conclusion of submission to jurisdiction. In the present case, during the pendency of the suit, plaintiff effected attachment before judgment of certain property of the defendant and the defendant by a letter acknowledged the attachment and requested merely for a concession, which was not a conditional request and when the offer is refused and the defendant remained ex parte and the suit was decreed, it was deemed that the defendant submitted to the jurisdiction of the foreign Court.
In the case of V. Subramania Aiyar v. Annasami Iyer 35, the Madras High Court while dealing with the issue whether there was submission to the jurisdiction of a foreign Court in the circumstances that the defendant had appeared in the foreign Court due to a Commission having been appointed to get the defendant summoned and examined as a witness, and that the defendant pleaded that the Court had no jurisdiction to try the suit and he objected to the questions put to him in examination and got himself cross examined, it was held that the defendant had submitted to the jurisdiction of the foreign Court.
In the case of British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries Ltd.36 the Supreme Court held that eventhough the defendant had taken the plea of lack of jurisdiction before the trial Court but did not take the plea before the Appeal Court or in the Special Leave Petition before the Supreme Court, it amounted to submission to jurisdiction.
By reading the aforesaid cases under Section 13(a) of CPC the following proposition may be laid:
In case of actions-in-personam, a Foreign Court may pass a decree or judgment against an Indian defendant, who is served with the summons but has chosen to remain ex parte. But the said judgment or decree may be enforceable against such a defendant in India, only if by fulfilling any of the following conditions it can be shown that the Foreign Court had jurisdiction upon the Indian defendant:
1. In the present paper only enforcement of foreign decrees is discussed.
2. S. 44A. Execution of decrees passed by Courts in reciprocating territory- (1) Where a certified copy of decree of any of the superior Courts of [***} any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court.
(2) Together with the certified copy of the decree shall be filed a certificate from such superior Court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction or adjustment.
(3) The provisions of section 47 shall as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that decree falls within any of the exceptions specified in clauses (a) to (f) of section 13.
[Explanation I- "Reciprocating territory’ means any country or territory outside India which the Central Government may, by notification in the official Gazette, declare to be a reciprocating territory for the purposes of this section; and "superior courts’, with reference to any such territory, means such Courts as may be specified in the said notification.
Explanation 2-‘Decree’ with reference to a superior court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment].
3. Some of the countries which have been declared as reciprocating territories:
- On 3.1.56, Federation of Malaya (now Malaysia) and the High Court and the Courts of Appeal as the Superior Court
- On 18.1.56, Colony of Aden and Supreme Court of Aden as the superior Court
- On 15.10.1957, New Zealand and Cook Islands, Turst Territory of Western Samoa and the Supreme Court of New Zealand as the Superior Court
- On 21.1.1961, Sikkim and the High court of Sikkim or any other court whose jurisdiction is not limited to a pecuniary jurisdiction.
- On 15.7.1961, Burma all civil and revenue courts as Superior Courts.
- On 1.3.53, United Kingdom of Great Britain and Northern Ireland and the House of Lords, Court of Appeals, High Court of England, the Court of Sessions in Scotland, the High court in Northern Ireland, the Court of Chancery of the County Panlatine or Lancaster and the Court of Chancery of the county Palantine or Durham as the Superior Courts.
- On 22.3.54, Colony of Fiji and the Supreme Court of Fiji as the Superior Court
- On 23.11.68, Hong Kong and republic of Singapore
- On 1.9.66, Trinidad and Tobago
- On 26.9.70, Papua New Guinea and Supreme Court as the superior court
- On 6.3.76, Bangladesh and Supreme Court and Courts of District and subordinate judges as the Superior Court.
- Canada and the Supreme Court of Ontario, please see the decision in the case of Gurdas Mann v. Mohinder Singh, AIR 1993 P&H 92.
Source is the AIR Manual 5th edition, volume 4.
4. Refer Moloji Nar Singh Rao v. Shankar Saran, AIR 1962 SC 1737 at p. 1748 para 14. Also see I & G Investment Trust v. Raja of Khalikote, AIR 1952 Cal. 508 at 523 para 38.
5. S. 14 of CPC stipulates that "Presumption as to foreign judgments.-The Court shall presume upon the production of any document purporting to be a certified copy of a foreign judgment, that such judgment was pronounced by a Court of competent jurisdiction, unless the contrary appears on the record; but such presumption may be displaced by proving want of jurisdiction." The Orissa High Court in the case of Padmini Mishra v. Ramesh Chandra Mishra, AIR 1991 Ori. 263 at p. 266, held that when a party to a proceeding before a court at New York did not take any plea about want of jurisdiction of the court at New York and allowed the matter to proceed ex parte, the presumption under S. 14 has to be made. However this presumption is rebuttable.
6. S. 13. When foreign judgment not conclusive.-A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except-
(a) where it has not been pronounced by a Court of competent jurisdiction;
(b) where it has not been given on the merits of the case;
(c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to 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.
7. AIR 1962 SC 1737. This is a Constitution Bench decision consisting of 5 judges of the Supreme Court of India.
8. 21 Ind. App. 171. Also see A.S. Subramaniam Chettiar v. M.K. Srinivasa Ayyar, AIR 1951 Mad. 289;
9. Ibid. at p. 185.
10. AIR 1962 SC 232.
11. However, due to the operation of S. 52 of CPC, the decree was executable only against the properties of the deceased defendants in the hands of the legal representatives.
12. AIR 1962 A.P. 400.
13. Ibid. at p. 403, para 16.
14. AIR 1973 Mad. 141.
15. Ibid. at p. 143 para 23.
16. AIR 1933 Mad 112.
17. AIR 1914 Mad. 556; Cf. Ibid. at p. 143 para 16. Also see Chormal Balchand Firm Chowrahat v. Kasturi Chand Seraoji, AIR 1938 Cal 511 at p. 515 para
18. AIR 1936 Mad. 553 at 554.
19. AIR 1974 SC 1764.
20. Ibid. at p. 1776 para 40.
21. (1991)3 SCC 451.
22. AIR 1975 SC 105.
23. Ibid. at p. 117 para 49.
24 AIR 1955 Nag. 103.
25. Ibid. at p. 106 para 11.
26. AIR 1952 Cal. 508.
27. Ibid. at p. 519 para 32.
28. Ibid. at p. 521 paras 35 and 38. This decision has relied upon a decision of the Calcutta High Court in the case of Moazzin Hossein Khan v. Raphael Robinson, ILR 28 Cal 641.
29. AIR 1934 Mad. 434.
30. AIR 1937 Mad. 97 at p. 99.
31. AIR 1942 Bom 199 at p. 202.
32. AIR 1967 SC 739. This view was followed by the Supreme Court in the case of Lalji Ram and Sons v. Firm Hansraj Nathuram, AIR 1971 SC 974.
33. AIR 1938 Cal 511 at 516.
34. AIR 1936 Mad. 552.
35. AIR 1948 Mad. 203.
36. (1990)3 SCC 481 at p. 495.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.