Enforcement of foreign judgments and asset restraint: Delhi High Court upheld execution and anti-dissipation measures in aid of decree enforcement.

A foreign judgment was treated as enforceable in India where it was conclusive under Section 13 of the Code of Civil Procedure, 1908, and the objections based on lack of reciprocity, absence of oral hearing, natural justice, and fraud failed because the foreign courts had already considered and rejected them on the material before them. The Court held that the judgment was on merits and executable under Section 44-A where applicable. In aid of execution and limited Mareva relief, the Court upheld restraints on alienation of assets, including assets held through relatives or associated entities, and recognised that inherent powers may be used to prevent dissipation, preserve the subject matter, and lift the corporate veil where arrangements are alleged to defeat lawful claims.

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Issues: (i) whether the foreign judgment was enforceable in India and could be treated as a judgment on merits notwithstanding objections of lack of reciprocity, absence of oral hearing, alleged breach of natural justice, and alleged fraud; (ii) whether the Court could grant and continue restraint against alienation of assets in aid of the limited Mareva relief and execution of the foreign decree, including against assets held in the names of relatives and associated entities.

Issue (i): whether the foreign judgment was enforceable in India and could be treated as a judgment on merits notwithstanding objections of lack of reciprocity, absence of oral hearing, alleged breach of natural justice, and alleged fraud.

Analysis: The decree of the United States court was not executable in India because the United States had not been declared a reciprocating territory, but the English judgment was executable under Section 44-A of the Code of Civil Procedure, 1908. The Court examined Section 13 of the Code of Civil Procedure, 1908 and held that the foreign judgment was conclusive between the parties unless any statutory exception applied. On the material placed before the foreign courts, the claim was supported by documentary and affidavit evidence, the defendants had been served, and substantive contentions were considered by the Texas and English courts. The absence of oral hearing did not by itself establish breach of natural justice, and the plea of fraud had already been considered and rejected by the foreign courts. These objections were therefore also barred by res judicata.

Conclusion: The foreign judgment was held to be given on merits, not vitiated by breach of natural justice or fraud, and executable in India under Section 44-A of the Code of Civil Procedure, 1908.

Issue (ii): whether the Court could grant and continue restraint against alienation of assets in aid of the limited Mareva relief and execution of the foreign decree, including against assets held in the names of relatives and associated entities.

Analysis: The English court had granted leave for limited enforcement to the extent of Mareva relief, whose object is to prevent dissipation or concealment of assets so that the decree does not become ineffective. The Court held that such restraint is analogous to attachment before judgment and injunction under the Code of Civil Procedure, 1908, and that in appropriate circumstances the Court may act under Section 151 of the Code of Civil Procedure, 1908 to preserve the subject matter and prevent abuse of process. The dispute whether the properties actually belonged to the judgment-debtor was held to be a matter for evidence. The Court also recognised that the corporate veil may be lifted where property is held through fictitious or cloaked arrangements to defeat lawful claims.

Conclusion: The restraint orders were upheld, the objection petition was rejected, and the interim injunctions were confirmed.

Final Conclusion: The foreign decree was treated as enforceable in India, and the protective restraint against dissipation or alienation of assets was maintained pending execution and further proceedings.

Ratio Decidendi: A foreign judgment is enforceable in India when it is conclusive under Section 13 of the Code of Civil Procedure, 1908, and objections of lack of oral hearing, natural justice, or fraud do not succeed where the foreign courts have substantively adjudicated those issues; in aid of such enforcement, the Court may restrain dissipation of assets under its inherent powers.

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