AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2022 (4) TMI 1612
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (i) Between 16th July, 2013 and 20th October, 2014, five separate loan agreements were executed between the Bank of Tokyo Mitsubishi UFJ Ltd. (BTMU), a bank incorporated in Japan, and various companies engaged in the business of shipping. (ii) In respect of the aforesaid loan agreements, guarantees were given by the defendant no.1 in favour of BTMU. (iii) Due to failure on the part of the borrowers to repay the loan amounts, an Acceleration Notice dated 10th November, 2015 was issued by BTMU to the defendant no.1 in terms of which the loan amounts were recalled. (iv) The aforesaid notice was duly received by the defendant no.1 on 12th November, 2015. (v) Upon failure of the defendant no.1 to repay his debts, the Tokyo District Court, vide order dated 4th January, 2016 declared the defendant no.1 as bankrupt and appointed the plaintiff as the Bankruptcy Trustee Administrator. (vi) The plaintiff was appointed as a Bankruptcy Trustee in accordance with the provisions of the Bankruptcy Act (Act No. 75 of June 2, 2004) of Japan (hereinafter referred to as the 'Japanese Bankruptcy Act') to recuperate the necessary amounts against the est....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e defendant no.2. (xiii) The present suit was filed invoking the following provisions of the Japanese Bankruptcy Act: "Articles 2(12) and 2(14) of Japanese Bankruptcy Act define the 'bankruptcy trustee' and the 'bankruptcy estate', respectively, as under: "Article 2(12): The term "bankruptcy trustee" as used in the Act means a person who has a right to administer and dispose of property that belongs to the bankruptcy estate in bankruptcy proceeding; Article 2(14): The term "bankruptcy estate" as used in the Act means a bankrupt's property, inherited property or trust property for which a bankruptcy trustee has an exclusive right to administration over and disposition of in the bankruptcy proceedings;" b) Article 34(1) of the Japanese Bankruptcy Act lays down the following: "Any and all property that the bankrupt holds at the time of commencement of bankruptcy proceedings (irrespective of whether or not it exists in Japan) shall constitute the bankruptcy estate." c) Article 80 of the Japanese Bankruptcy Act lays down the following: "In an action relating to the bankruptcy estate, a bankruptcy trustee shall stand....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ff to file the suit. No permission has been taken from the competent court in Japan to file the present suit and no permission has also been taken to appoint the representative of the Bankruptcy Trustee. Reliance in this regard is placed on Article 77 and Article 78 of the Japanese Bankruptcy Act. (iii) There is no cause of action to file the present suit as the plaintiff has failed to file the loan agreements, the guarantee agreements and the details of the amounts due in respect of the defendant no.1. In this regard, reliance is placed on the judgment of the Bombay High Court in Marine Geotechnics LLC v. Coastal Marine Construction& Engineering Ltd., 2014 SCC OnLine Bom 309. (iv) Japan is not a reciprocating territory in respect of Section 44-A of the CPC, so there cannot be any proceedings for execution for executing the decree of the Japanese Court. (v) The bankruptcy order passed by the Japanese Court has no evidentiary value in India. (vi) The Indian insolvency regime viz., the Insolvency and Bankruptcy Code, 2016 does not recognize cross border insolvency and the defendant no.1 has not been declared as insolvent in India. (vii) Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Japan. (vi) There is no bar under the Insolvency and Bankruptcy Code, 2016 (IBC) for initiating the present suit. (vii) Limitation has to be calculated under Indian law and in terms thereof the period of limitation is three years, as provided under Article 101 of the Limitation Act. Therefore, the suit is within time. (viii) The plaint cannot be rejected if the issue of limitation is a mixed question of facts and law. 8. I have heard the counsel for the parties. 9. Shorn of any legal niceties, it is evident from the facts narrated above that upon receiving the Acceleration Notice on 12th November, 2015, fearing commencement of bankruptcy proceedings in Japan, the defendant no.1 within six days, executed the SPAs in respect of the suit properties on 17th November, 2015. The defendant no.1, apprehending threat to his properties in India, executed a Gift Deed dated 23rd November, 2015 in favour of the defendant no.2. Immediately upon the defendant no.1 being declared bankrupt by the Tokyo District Court vide order dated 4th January, 2016, the Relinquishment Deed dated 8th January, 2016 was executed by the defendant no.1 and his sisters in favour of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ommercial suit. 14. In view of the above, the judgments in Ambalal (supra) and Soni Dave (supra) are completely distinguishable and do not apply to the facts of the circumstances of the present case. In Ambalal Sarabhai Enterprises Limited (supra), the very relief sought was for execution of the mortgage deed, which was held to be in the nature of specific performance of the terms of memorandum of understanding, without reference to nature of the use of the immovable property in trade or commerce as on the date of the suit. Furthermore, the judgment in Soni Dave (supra) was delivered in the context of an agreement to sell in respect of a residential property and the suit was held to not be a commercial suit in terms of Section 2(1)(c)(vii) of the Commercial Courts Act, which is not the case here. 15. Even otherwise, if the suit is not taken to be a commercial suit, this Court has the power to convert a commercial suit into an ordinary suit and proceed to hear the matter. This cannot be a ground for rejection of the suit. The suit has been valued in excess of Rs. 10 crores and ad valorem court fees thereon has been paid by the plaintiff. It is not denied that this Court has th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gments. The same are set out below: "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 1 [India] in cases in which such law is applicable; (d) where the proceedings in which the 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 1 [India]. 14. 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 pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent-debtor can resist the decree-holder by raising any of the grounds under Section 13. If he does not, or fails in his attempt, the decree will be executed as if it were a decree passed by a competent court in India." 23. Applying the aforesaid principles to the facts of the present case, it cannot be said that judgment dated 17th June, 2016 of the Tokyo High Court, dismissing the appeal filed on behalf of the defendant no.1, falls under any of the exceptions provided in Section 13 above. On the face of it, the aforesaid judgment fulfils the requirement of due process and was passed after noting the various contentions raised on behalf of the defendant no.1. Therefore, the aforesaid judgment would be conclusive as to the defendant no.1 being declared bankrupt in Japan and the plaintiff being appointed as the bankruptcy trustee to administer the estate of the defendant no.1, even outside Japan. The plaintiff, who is the bankruptcy trustee, in the present proceedings is not seeking to execute the aforesaid judgment in terms of Section 44A of the CPC, but is acting in furtherance of the said judgment so as to administer the estate of the defendant no.1, who has been adjudicated as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of the transaction for which the appellant Company had stood surety/guarantee being between foreign companies. We are of the opinion that if we do so, we would be sending a wrong signal and dissuading foreign commercial entities from relying on the assurances/guarantees given by Indian companies and which would ultimately restrict the role of India in such international commercial transactions." 26. Applying the aforesaid principles, the judgments passed by the foreign courts have to be respected by the Indian Courts, unless the same are shown to be falling under the limited exceptions provided in Section 13 of the CPC. The Plaintiff, being the Bankruptcy Trustee appointed by the Japanese court, is seeking the assistance of the courts in India, to administer assets of defendant no. 1 in India. There is no reason why a person who has been declared bankrupt by a foreign court in terms of the law applicable to that jurisdiction, should be afforded protection by the Indian Courts on technical objections being raised with regard to the validity of the foreign judgment. In the modern times of globalization, foreign creditors cannot be treated differently from domestic creditors. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntext of the law of a foreign country. Therefore, I do not find any merit in the submission that the present plaint can be rejected under the provisions of Order VII Rule 11(d) of the CPC, as being barred under the provisions of Japanese law. 31. Furthermore, in my view, for a suit filed in India, the limitation would have to be seen under the Indian law and not foreign law. In terms of Article 101 of Schedule to the Limitation Act, the prescribed period of limitation is three years from the date of a judgement, including foreign judgement. It is not the case of the defendants that the present suit is time barred under the Indian laws of limitation. The judgment of the Supreme Court in Bank of Baroda (supra) was in the context of limitation for the execution of a foreign decree under Section 44A of the CPC. It was in that context that the Supreme Court gave a finding that the issue of limitation is a matter of substantive law and not procedural law. 32. Therefore, the present suit cannot be rejected on the ground of limitation at the present stage. Accordingly, the judgment cited on behalf of the defendants in Raghwendra Sharan Singh (supra) will not be applicable in the fact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....P) Ltd. v. Maharishi Dayanand Co-Operative Group Housing Society, 2022 SCC OnLine Del 1011. Relevant portions of Hassad Food Company Q.S.C. (supra) are set out below: "13. Perusal of Order XI as noted above reveals that the plaintiff is bound to file all documents in its power, possession, control or custody with the plaint and in case of urgent filing of a suit if some additional documents are to be filed under sub-rule (1) of Rule 1 of Order XI, the plaintiff may seek leave of the Court to rely on additional documents which additional documents are required to be filed within 30 days of filing of the suit. Under sub-rule (5) of Rule 1 of Order XI, the plaintiff shall not be allowed to rely on documents which were in the plaintiff‟s power, possession, control or custody and not disclosed along with the plaint or within the extended period save and except by leave of the Court which leave can be granted only if the plaintiff establishes reasonable cause for non-disclosure along with the plaint. The language used in the sub-rule (5) is that the plaintiff is required to show "a reasonable cause" and not a "sufficient cause" as is ordinarily provided in other provisions....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are not complete as yet as the replications are yet to be taken on record and hence it cannot be said that the plaintiffs have filed the present application so belatedly that it cannot be allowed. Further the plaintiffs have very fairly taken the plea of administrative oversight which can occur when the number of documents is voluminous. Thus the plaintiffs have made out a reasonable cause for not filing the documents with the plaint." 39. To similar effect is the judgment of the Co-ordinate Bench of this Court in Mahesh Chaudhri & Anr. v. IMV India Pvt. Ltd., 2019 SCC OnLine Del 9813. The relevant observations in the same are set out below: "7. Leave to file additional documents can be granted to the plaintiff on establishing reasonable cause for non-disclosure alongwith the plaint. The plea is that in the 130 page written statement filed by the defendant large number of claims are raised against the plaintiff. It is further pleaded by the applicant/plaintiff that the defendant has in the written statement raised various claims which are actually in the nature of counter-claims. Hence, it is pleaded, the need arose to file additional documents along with the replicati....