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Issues: (i) Whether the decree founded on the foreign judgment was defeated by evacuee legislation and the plaintiff lacked locus standi to sue on it; (ii) Whether the suit was barred by limitation, or whether time spent in the earlier execution proceedings was excludable under the Limitation Act; (iii) Whether the Rs. 3,00,000 deposit made in the Lahore court had to be given credit towards satisfaction of the decree on equitable principles.
Issue (i): Whether the decree founded on the foreign judgment was defeated by evacuee legislation and the plaintiff lacked locus standi to sue on it.
Analysis: A foreign judgment creates an obligation between the parties and, unless one of the statutory exceptions to conclusiveness is attracted, it remains enforceable by a suit on the judgment. The decree was not treated as evacuee property in the relevant proceedings, and the custodian never asserted a right to step into the decree-holder's shoes. The statutory vesting relied on by the appellant did not establish that the decree-holder had ceased to be entitled to sue on the foreign judgment.
Conclusion: The objection based on evacuee legislation failed and the plaintiff's right to sue was upheld.
Issue (ii): Whether the suit was barred by limitation, or whether time spent in the earlier execution proceedings was excludable under the Limitation Act.
Analysis: Although the ordinary period for a suit on the foreign decree had expired, the earlier execution proceeding was prosecuted bona fide and failed because the forum lacked jurisdiction to execute the decree in that manner. The defect was jurisdictional in nature, and the time spent in that proceeding fell within the protection of the exclusionary provision. The plea based on acknowledgment was not necessary to decide.
Conclusion: The suit was not barred by limitation, as the period spent in the earlier execution proceedings was excluded.
Issue (iii): Whether the Rs. 3,00,000 deposit made in the Lahore court had to be given credit towards satisfaction of the decree on equitable principles.
Analysis: The deposit was made pursuant to the stay order and was consistently treated by both sides as a sum earmarked towards the decree. The decree-holder's inability to obtain it arose from supervening circumstances beyond the parties' control. Equity required that the judgment-debtor should not be made to pay twice over where the money had been deposited for the decree's benefit and both sides had proceeded on that basis. The proper course was to give credit for the deposit as on the date when the decree-holder effectively asserted the claim on that footing.
Conclusion: The deposit had to be adjusted pro tanto against the decree, with the balance alone recoverable thereafter.
Final Conclusion: The decree was upheld in principle, but the recoverable amount had to be reduced by crediting the Lahore deposit, and execution was confined to the balance with appropriate interest and costs.
Ratio Decidendi: A deposit made in court as security for a decree, and consistently treated by the parties as available towards its satisfaction, must be given equitable credit against the decree when supervening circumstances beyond the parties' control prevent actual payment out, and time spent in bona fide but jurisdictionally incompetent execution proceedings is excludable in computing limitation.
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