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2024 (6) TMI 53
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.... the Code of Civil Procedure, 1908, (hereinafter referred to as the said application) with a prayer for stay of further proceedings of the suit, with liberty to mention, upon expiry of the moratorium in the U.S. Bankruptcy proceeding. In the alternative, prayer was made for adjournment of the said suit for 180 days. 3. The learned Judge rejected the said application, inter alia, holding that the moratorium order of the U.S Bankruptcy Court was not applicable in India. U.S.A had not been declared as a reciprocating territory for the purpose of Section 44A Code of Civil Procedure. The learned court further held that although the moratorium order of the U.S Bankruptcy Court was quite akin to Section 14 of the Indian Bankruptcy Code, 2016 (IBC 2016), but the IBC 2016 was only applicable within the territory of India. In the absence of a Central Government notification in the Official Gazette declaring U.S.A to be a reciprocating territory, the moratorium order would not be automatically enforceable under Section 44A Code of Civil Procedure. The provisions of Section 13 and 14 of the Code of Civil Procedure, were also not applicable in the present factual matrix because the bankruptc....
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....urisdiction should respect and recognize the decisions rendered by competent courts of other jurisdictions. The U.S. Bankruptcy Court, being a court of competent jurisdiction, had issued a worldwide stay, inter alia, on all legal proceedings against the petitioner/defendant No. 1. Accordingly, the suit should be stayed till such time that the moratorium was in effect. The stay order was in the best interest of the debtor's estate, the creditors, and other parties having interest. Unless orders were passed as set forth in the said application, the petitioner/defendant No. 1 would suffer irreparable loss and injury. Interference by the Indian Court, during pendency of the proceeding before the U.S. Bankruptcy Court, was contrary to the doctrine of Comity of Courts. 6. Mr. Mookherji, learned Senior Advocate, submitted that the learned Judge misconstrued the doctrine. The learned Judge presumed that a prayer was being made for enforcement of the order of stay in the Indian Court, as if the same was a decree of a foreign court. On such misconception of law, the learned Judge rejected the application by applying Section 44A and Sections 13 and 14 of the Code of Civil Procedure. Ne....
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....es in the absence of a statutory mechanism. Referring to the observations in McGrath and Ors. vs Ridell and Ors. reported in (2008) 3 All EC 869, Mr. Mookherji contended that the principle of universalism has been a golden thread running through English cross-border insolvency laws, since the 18th century. The principle required that the English courts should, so far as it is consistent with justice and public policy of the United Kingdom, co-operate with Courts in the country of the principal liquidation. 9. Relying on the decision of Solomon v. Ross , (1764) 1 HBI 131, Mr. Mookherji, submitted that the English court prepared to reorganize the extraterritorial effects of a foreign bankruptcy, in England. In the said case, trustees in bankruptcy appointed in Amsterdam were allowed to collect assets in England. In a later decision of Alivon v. Furnival (1834) 149 ER 1084, the principle laid down in Solomon v. Ross was also accepted and it was held that the principle of Comity of Nations should be enforced. 10. According to Mr. Mookherji, most transnational bankruptcies in the United States were historically based on the judicial concept of comity. Reference was made to the Adv....
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....ith each other subject only to ranking. To have granted the application would have offended the principle of equality in that one of the creditors, CCIC, would have achieved an unfair preference ahead of those others ranking at the same level." 14. In was further urged that Indian courts consistently recognized the importance of the principles of comity of nations and courts and had routinely respected such orders issued by foreign courts. Reference was made to the decision of Toshiaki Aiba as The Bankruptcy Trustee of The Estate of Vipun Kumar Sharma Vs. Vipan Kumar Sharma and Ors., reported in 2022 SCC Online Del 1260. The Delhi high Court rejected an application under Order 7 Rule 11 of the Code of Civil Procedure on the principles of comity of courts. The observation of the Delhi High Court had been placed before this court in great detail which was as follows: "Next, it is contended on behalf of the defendants that Japan is not a reciprocating territory in respect of Section 44A of the CPC, so there cannot be any proceedings for execution of the decree of a Japanese Court. In the opinion of this Court and as stated above, by the way of the present suit, the plainti....
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....tioner has made out a prima facie case and also proved that there is debt due payable by the Principal Borrower and there is decree made against the Respondent/Guarantor. This Tribunal has no jurisdiction to enforce the foreign decree; however, there is no bar in it taking cognizance of the foreign decree." The National Company Law Appellate Tribunal (NCLAT) dismissed the appeal from such order and the appeal before the Hon'ble Apex Court was also dismissed. 17. The NCLAT also recognized the Insolvency Resolution Protocols prepared by the Indian and Dutch Administrations of Jet Airways, in the matter of Jet Airways India Ltd. vs. State Bank of India and Ors., and acted in furtherance of those principles by recognising the convenience of having coordinated proceedings. The Bankruptcy Code in 2019 recognized an insolvency proceeding under the aegis of the Adjudicatory Authority at NCLT Chandigarh Bench in Re, SEL Manufacturing Co. Ltd and imposed a moratorium in the United States. 18. Reliance was also placed in the decision of Gildersleeve vs. Gildersleeve, 88 Conn. 689. It had been held that Rules of Comity may not be departed from in certain cases, for the purpose of nece....
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....the Code of Civil Procedure recognized such a principle. For non-reciprocal nations, Sections 13 and 14 would be applicable. Reciprocity had to be recognized by Parliament. As the definition of decree also included 'order' of a court, an order of a court of a foreign country with which India has reciprocity, could also be executed as a decree in terms of section 44A of the Code of Civil Procedure. In other cases, where there is no reciprocity, the party seeking enforcement of such an order or decree would have to file a regular suit under section 13 and 14. Moreover, the order of the moratorium of the U.S. Bankruptcy Court only provided that the applicant could make a request to the other courts to take cognizance of the order passed on October 24, 2023. Under the IBC 2016 also no country had been notified by the Central Government in exercise of power under Section 234. Although the IBC 2016 recognized the concept of reciprocity, yet the notification was yet to be made. 21. Arbitration proceedings had been initiated by the petitioner against the opposite parties in the International Chamber of Commerce, International Court of Arbitration, USA and the proceedings were continuing....
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....rties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India have jurisdiction to grant the relief claimed, or in any Court beyond the limits of 1[India] established or continued by the Central Government and having like jurisdiction, or before the Supreme Court. Explanation.--The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action." 26. Secondly, the proceedings before the suit court was not an insolvency proceeding. The foreign judgments which have been relied upon by Mr. Mookherji were rendered on the principle of globalization of commercial relationships and recognition of moratoriums granted by foreign courts; they were all in respect of insolvency proceedings. The philosophy behind such a recognition was that courts should assist insolvency proceedings. Moreover, the moratorium in this case was granted in Chapter 11 cases which deal with insolvency, reorganization, restructuring, etc. The suit does not fall under any of those categories. 27. The plaintiff filed the anti-Arbitration suit and prayed for de....
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....ll matters concerning administration, the management, shareholding, and control of the plaintiff No. 4 company are governed by the Companies Act, 2013 and that the National Company Law Tribunal, Kolkata Bench has exclusive jurisdiction to entertain, try and determine all disputes arising out of and/or touching and/or concerning the management, administration, shareholding, and control of the plaintiff No. 4 Company. h. Declaration that any and every order or direction or award passed by any arbitrator / arbitral tribunal in the arbitration proceedings [pursuant to the alleged Notice of Arbitral Dispute dated 24th October 2022 (ANNEXURE - "A/31"), Request for Arbitration dated 04th November 2022 (ANNEXURE "A/48") and the Claim Statement dated 22 June 2023 (ANNEXURE - "A/63")], - is illegal, null and void, without jurisdiction and not binding on the Plaintiffs. i. Declaration that the International Chamber of Commerce has по jurisdiction or authority to entertain the arbitration arising out of and/or in connection with the said Agreement for Arbitration embodied and/or contained in clause 14 of the Share Purchase Agreement dated 30th October 2020 (ANNEXU....
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....nt injunction restraining the defendant No. 1 and/or their men, servants and agents or any person claiming under through or under it, from initiating, prosecution, proceeding with, conducting, continuing and/or pursuing the arbitration being Case No.27329 PDP pending before the International Chamber of Commerce; q. Receiver, r Injunction; s. Attachment; t. Costs; u. Further and other reliefs." 28. Section 9 of the Code of Civil Procedure states as follows:- "9. Courts to try all civil suits unless barred.- The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred." 29. Although reliance was placed on Section 14 of the IBC, 2016, the said provision applies to claims of creditors and matters related thereto, against corporate debtors within the jurisdiction of the tribunals under the IBC-2016. 30. The issue of cross-border insolvency has been emerging under several jurisdictions, due to an increase in transnational transactions and establishment of various branches and offices in different coun....
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.... repatriating the child to the jurisdiction of the foreign court. (c) The repatriation of the child does not cause any moral or physical or social or cultural or psychological harm to the child, nor should it cause any legal harm to the parent with whom the child is in India. There are instances where the order of the foreign court may result in the arrest of the parent on his or her return to the foreign country. [Arathi Bandi v. Bandi Jagadrakshaka Rao, (2013) 15 SCC 790 : (2014) 5 SCC (Civ) 475] In such cases, the domestic court is also obliged to ensure the physical safety of the parent. (d) The alacrity with which the parent moves the foreign court concerned or the domestic court concerned, is also relevant. If the time gap is unusually large and is not reasonably explainable and the child has developed firm roots in India, the domestic court may be well advised to conduct an elaborate inquiry. 33. In Nithya Anand Raghavan vs State (NCT OF DELHI) and Anr. reported in (2017) 8 SCC 454, the Hon'ble Apex Court held that the principle of first strike would not be applicable and pre-existing orders of foreign courts was one of the factors to be looked into by t....
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....m to the child, nor should it cause any legal harm to the parent with whom the child is in India. There are instances where the order of the foreign court may result in the arrest of the parent on his or her return to the foreign country. [Arathi Bandi v. Bandi Jagadrakshaka Rao, (2013) 15 SCC 790 : (2014) 5 SCC (Civ) 475] In such cases, the domestic court is also obliged to ensure the physical safety of the parent. (d) The alacrity with which the parent moves the foreign court concerned or the domestic court concerned, is also relevant. If the time gap is unusually large and is not reasonably explainable and the child has developed firm roots in India, the domestic court may be well advised to conduct an elaborate inquiry. 62. As regards clauses (a) to (c) above, the same, in our view, with due respect, tend to drift away from the exposition in Dhanwanti Joshi case [Dhanwanti Joshi v. Madhav Unde, (1998) 1 SCC 112], which has been quoted with approval by a three-Judge Bench of this Court in V. Ravi Chandran (2) [V. Ravi Chandran (2) v. Union of India, (2010) 1 SCC 174 : (2010) 1 SCC (Civ) 44]. In that, the nature of inquiry suggested therein inevitably recognises....
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.... "10. Stay of suit.-No court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other court in India having jurisdiction to grant the relief claimed, or in any court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court. Explanation.-The pendency of a suit in a foreign court does not preclude the courts in India from trying a suit founded on the same cause of action." (emphasis supplied) 66. The invocation of first strike principle as a decisive factor, in our opinion, would undermine and whittle down the wholesome principle of the duty of the court having jurisdiction to consider the best interests and welfare of the child, which is of paramount importance. If the Court is convinced in that regard, the fact that there is already an order passed by a foreign court in existence may not be so significant as it must yie....
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....rts have to give due weight to such order unless it falls under any of the exceptions under Section 13 CPC. Hence we feel that the order in the present case passed by the English Court does not fall under any of the exceptions to Section 13 CPC and it is a conclusive one. The contention of the appellant that the order is the one not on merits deserves no consideration and therefore liable to be rejected. Accordingly, Issue (i) is answered. In re: Issue (ii) 20. The next ground put forth by the appellant is that the order being an interlocutory order does not have the shades of a "judgment" to be executed before the Indian Court and hence the order not being a "decree" is unexecutable. To appreciate this, it is appropriate to have a look at Section 44-A CPC "44-A. Execution of decrees passed by courts in reciprocating territory.-(1) Where a certified copy of a 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 super....
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.... that Court is executable in India under Section 44-A CPC. 22. Now we come to the next limb of the argument put forth by the appellant that the order passed by the English Court does not amount to a decree and hence it is not executable. It is no doubt correct, Section 44-A CPC deals with "execution of decrees passed by courts in reciprocating territory". Before we further decide this issue it is appropriate to have a look at how decree, order and foreign judgment are defined under the CPC. 23. As per Section 2(2) CPC, "decree" means the formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144 CPC but shall not include (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. 24. Then a "foreign judgment" is defined under Section 2(6) as judgment of a foreign court. "Judgment" as per Section 2(9) CPC ....