TaxTMI 
TaxTMI 
TaxTMI 
2007 (11) TMI 686
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....family members. It is in the year 1982 that defendant No. 2 is stated to have expressed a desire to invest monies on behalf of his family members and himself to the plaintiff by purchase of shares of M/s United Watches Limited and M/s M.P. United Polypropylene Limited of the United Group. The defendants were to become co-promoters in both the projects and the investments were to be made by the defendants providing for full repatriation facilities of capital and dividend. This proposal was agreed to by the plaintiff but the same was subject to permission and sanctions from various statutory authorities including Reserve Bank of India. It is the case of the plaintiff that the investment was not to carry any interest. It is in pursuance to this oral agreement that defendant No. 2 is stated to have sent monies to the United Towers India Private Limited, R.K. Towers India Private Limited, United Builders Constructions (India) Private Limited and International Industrial Development Consultants Private Limited of the plaintiff as these companies were to transfer their shareholdings to the defendants in M/s United Watches Limited and M/s M.P. United Polypropylene Limited. 3. It is the ca....
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...., 1908 (hereinafter referred to as the said Code), bar of limitation, the plaintiff chose not to appear despite being duly served with the writ of summons on 17.4.1989. The service is stated to have been effected by Mr. Tarun Banga, an Advocate based in Delhi, who has filed an affidavit to that effect. The defendants claim that the suit was filed since the plaintiff failed to remit the amount and along with the claim schedule 'A' attached to the Statement of Claims was filed while the money received was filed as schedule 'B' and the balance amount along with interest was filed as schedule 'C'. The defendants claim that the plaintiff entered into a memorandum of understanding with defendant No. 2 when this amount was remitted. It is the English Courts which are stated to have jurisdiction since the amount was remitted from England and was partly repaid back in England and the decree is stated to be as per procedure and laws applicable in England. 7. On the pleadings of the parties, the following issues were framed on 17.9.2002: Issues 1. Whether the judgment and decree of the High Court of Justice Queen's Division Bench, England being No. 1988 Folio N....
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....o be averted to for the purposes of consideration of the matter. Section 2(6) of the said Code defines foreign Court to mean the judgment of a foreign Court while Section 2(5) defines foreign Court to mean a Court situate outside India and not established or continued by the authority of the Central Government. It is not in dispute that in the present case the decree which is sought to be enforced is a foreign judgment. The provisions of Section 13 of the said Code deal with the "foreign judgment" and reads as under: 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 the judgment was obtained are opposed ....
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....penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment. 14. It is not in doubt that the Courts in England have been treated as the Courts in reciprocating territory. The decree which has been passed is in the following terms: In The High Court Of Justice 1988 FOLIO No. 1090 Queen's Bench Division Commercial Court In The Matter Of The Foreign Judgments (Reciprocal Enforcement) Act Of 1933 Part I Between: 1) Barnes Investment Limited 2) Devidas Budrani 3) Naraindas Essardas And Sons (Uk) Limited ....Plaintiffs and- 1) Raj Kumar Gupta 2) United Watches Limited 3) United Polypropylene Limited 4) United Bracelets Limited 5) United Straps Limited 6) International Industrial Development Consultants Private Limited 7) United Builders Constructions (India) Pvt. Limited 8) R.K. Towrs Pvt. Ltd. ....Defendants I, William Keith Topley, Master of the Supreme Court of Judicature in England, hereby certify that the Writ of Summons, a copy of which is hereunto annexed was issued out of the Queen's Bench Division (Commercial Court) of the High Court of Justice in England on the 29th March 1988 by Bar....
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....tion. The decree also states "the said judgment in the action aforesaid was given on the grounds that no defense has been served by the First Defendant herein". It is, thus, apparent that it is the absence of the plaintiff herein to defend the suit which has resulted in such a decree. There is nothing filed on record to show whether the defendants herein led any evidence in that suit to substantiate their claim. The defendants did not even take care to produce Mr.Banga in the witness box. 17. The defendants have filed a copy of the affidavit of Mr. Tarun Banga, Advocate whereby he has affirmed that he had served the summons and obtained the receipt of service duly signed and stamped. The affidavit goes on to state that the acknowledgement receipt duly signed by the Administrative Office of the corporate office was enclosed with the affidavit. However, no such copy is available with the said affidavit. 18. Learned Counsel for the defendants seeks to contend that in view of what is stated in the decree about the service having been effected upon the plaintiff, nothing more was required to be done in view of the provisions of Section 44A of the said Code. On the other hand....
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....s no more res integra in view of the judgment of the Apex Court in International Woollen Mills v. Standard Wool (U.K.) Ltd. where it has been held that in case of a foreign judgment and the conclusiveness in respect of the same, an ex parte decree cannot be presumed to be on the merits. The observations made by the Mumbai High Court in Algemene Bank Nederland NV v. Satish Dayalal Choksi have been approved in the said judgment, where in para-26 of the judgment clearly states that what is stated in para-28 and 29 of the judgment in Algemene Bank Nederland NV v. Satish Dayalal Choksi (supra) lays down the correct proposition of law. The observations made in para-28 and 29 of Algemene Bank Nederland NV v. Satish Dayalal Choksi(supra) are as under: 25. In support of the proposition that such a decree could not be a decree on merits. Reliance has been placed upon the authority in the case of Algemene Bank Nederland NV v. Satish Dayalal Choksi . In this case a summary suit had been filed in Hong Kong. In that suit leave to defend was granted to the defense. Thus the High Court had prima facie considered the merits of the matter and had granted unconditional leave. Thereafter the defenda....
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....of the dispute were ever examined by the Hong Kong Court. The Court seems to have proceeded to pronounce the judgment in view of the defendant's failure to appear at the hearing of the case to defend the claim on merits. 29. In my view, in these circumstances, the case before me falls under the ratio laid down by the Privy Council in Keymer's case AIR 1916 P.C. 121. The decision of the Hong Kong Court is not given on examination of the points at controversy between the parties. It seems to have been given ex parte on the basis of the plaintiff's pleadings and documents tendered by the plaintiff without going into the controversy between the parties since the defendant did not appear at the time of the hearing of the suit to defend the claim. The present judgment, therefore, is not a judgment on the merits of the case. Hence this is not a fit case where leave can be granted under Order 21 Rule 22 of the Code of Civil Procedure for the purpose of executing the decree here. 22. A perusal of the aforesaid would show that in the facts of the case it was found that there was nothing on record to show whether actually any evidence was led before the foreign court or that th....