Section 2(9) defines a “judgment” to mean “the statement
given by the Judge of the grounds of a decree or order”. A “decree”, on the other hand, under Section 2(2), 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. An order, on the other hand, defined in Section 2(14), means “the formal expression of any decision of a Civil Court which is not a decree”. The CPC consolidates and amends laws relating to the procedure of courts of civil judicature in India. So far as our civil courts are
concerned, the code makes a clear distinction between a judgment, on the
one hand, and a decree or order, on the other. The latter two are formal
expressions of adjudication or decision of civil courts, whereas the former, a
judgment, is a statement of the grounds of such decree or order given by
the Judge. In so far, however, as judgments of reciprocating territories or
foreign judgments are concerned, the expression “decree” is defined under
Section 44A to mean “any decree or judgment of such Court under which a
sum of money is payable, not being a sum payable in respect of taxes or
other charges of a like nature or in respect of fine or other penalty”. What
is executed under Section 44A is a “decree” of any superior court of a
reciprocating territory and such decree means a decree or judgment of such
court as explained in Explanation II of Section 44A. In other words, so far
as execution of foreign decrees is concerned, the Code does not make any
distinction between a “decree” and a “judgment”. Any adjudication by a
foreign court upon a matter before it, including a formal expression of such
adjudication, is executable under Section 44A. This much appears from a
plain reading of the relevant provisions of the CPC. {Para 11}
12 Privy Council in the case of Brijlal Ramjidas vs. Govindram G. Seksaria AIR 1947 PRIVY COUNCIL 192 held that a “judgment” within the meaning of Section 13 of the
CPC meant “an adjudication by a foreign court upon the matter before it” and not a statement of reasons for the order. Authorities cited by Mr.Sakhardande for the proposition that in order to constitute a judgment, the order must contain reasons (Balraj Taneja vs. Sunil Madan (1999) 8 SCC 396 and Assistant Commissioner vs. Shukla and Bros. (2010) 4 SCC 785) are quite beside the point, since they do not deal with foreign judgments, but with judgments rendered by civil courts in India.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 14 OF 2020
IN
CHAMBER SUMMONS NO. 710 OF 2010
IN
EXECUTION APPLICATION NO. 37 OF 2005
IN
CASE NO. 1990-K-528
Arvind Jeram Kotecha Vs Prabhudas Damodar Kotecha ..
CORAM : S.C. GUPTE & MADHAV JAMDAR, JJ.
PRONOUNCED ON : 9 NOVEMBER 2020
JUDGMENT (Per S.C. Gupte, J.) :
This appeal arises from an order passed by a learned Single
Judge of this court on a chamber summons taken out in an execution
application. The chamber summons was for leave to the decree holder
(Respondent herein) for prosecution of execution proceedings against the
judgment debtor (Appellant herein). The execution was sought of a decree
passed by the High Court of Justice of U.K., Queen’s Bench Division, in
Case No.1990-K-528, read with (i) final costs certificate dated 11
November 2004 and (ii) additional certificate dated 17 January 2005. The
decree holder also holds a certificate under Section 10 of the Foreign
Judgment (Reciprocal Enforcement) Act.
2 The original plaintiff had filed Case No.1990-K-528 against the
defendant in the Queen’s Bench Division of the High Court of Justice (U.K.)
for an order for release of a fund held in the joint names of the plaintiff
and the defendant and for damages. On 25 February 1993, a consent order
was passed in the case, under which a judgment was entered against the
defendant on the ground that no defence had been served by the defendant
pursuant to the order of Deputy Master Rose dated 3 August 1992 and
adjudging that the defendant shall pay the original plaintiff damages as
assessed. The original plaintiff accordingly proceeded to apply for damages.
The case for assessment of damages was tried and a decree was passed by
the Queen’s Bench Division (Judge Reach QC) on 22 January 1999. The
decree assessed the damages at nil, and was in the following terms :
“PURSUANT to the Consent Order of Master Foster Under Order 37
of the Rules of the Supreme Court the assessment of damages in this
action was tried before His Honour Judge Rich QC (sitting as a Judge
of the High Court) without a jury at the Royal Courts of Justice in
London on the 20th, 21st and 22nd days of January, 1999.
AND THE JUDGE having assessed the award of damages at nil.
THE JUDGE DIRECTED that judgment should be entered for the
Defendant with costs to be taxed if not agreed.
IT IS THIS DAY ADJUDGED that judgment be entered for the
Defendant and the Plaintiff do pay the Defendant his costs of the
assessment of damages in this action to be taxed if not agreed.
AND THE JUDGE DIRECTED that the Plaintiff’s application for leave
to appeal be refused.”
3 Pursuant to this judgment, on 23 March 2000, the decree
holder filed a bill of costs. A detailed hearing regarding assessment of costs
took place wherein points of dispute were served and replies filed. On 11
November 2004, pursuant to the judgment dated 22 January 1999, a final
costs certificate was issued by the Costs officer of the court directing the
original plaintiff to pay to the defendant costs of 57,175.25 GBP within 14
days. The final costs certificate reads as under :
“In accordance with the Judgment dated 22nd January, 1999.
Upon the Defendant filing a completed bill of costs in this claim
Costs Officer O-Riordan has assessed the total costs as £57,175.25
(being as to £39,272.63 in respect of the said bill of costs, £1,728.75
court fee for the detailed assessment, £12,648.87 for the costs of the
detailed assessment and £3,525 as costs of the costs of the detailed
assessment).
You the Claimant must pay the sum of £57,175.25 to the Defendant
within 14 days of the date of this order.
The date from which entitlement to interest under this certificate
commences under the Judgments Act 1838 at the rate of 8% per
annum is as follows:-
1. On the sum of £39,272.63 from 22nd January, 1999 except interest
shall not run for 1184 days.
2. On the sum of £1,728.75 from 29th April, 2004.
3. On the sum of £12,648.87 from 29th April 2004.
4. On the sum of £3,525 from 26th October, 2004.”
4 On 17 January 2005, an additional costs certificate was issued
levying 9,159 GBP as interest from 31 December 2004 and thereafter at the rate of 12.53 GBP per day until payment.
5 The original foreign judgment dated 22 January 1999, the
final costs certificate dated 11 November 2004 and the additional costs
certificate dated 17 January 2005 are all subject matters of the present
execution application. The decree holder filed a chamber summons in the
execution application for leave to execute the decree and dispensation of
notice under Order 21 Rule 22 of the Code of Civil Procedure. That
chamber summons was made absolute and notice under Order 21 Rule 22
was dispensed with. The judgment debtor filed an appeal challenging that
order. In appeal, the chamber summons was allowed to be withdrawn with
liberty to file a fresh chamber summons. Accordingly, the present chamber
summons (Chamber Summons No.710/2010) has been filed in the
execution application for leave to execute the foreign judgment together
with two costs certificates and the certificate under Section 10 of the
Foreign Judgments (Reciprocal Enforcement) Act.
6 A learned Single Judge heard the parties on the chamber
summons, and by his impugned order dated 28 November 2019, made the
chamber summons absolute, granting leave to execute the judgment dated
22 January 1999 of the High Court of Justice, Queen’s Bench Division
(U.K.), the final costs certificate dated 11 November 2004 and the
additional costs certificate dated 17 January 2005, both issued by that
court. This order has been challenged in the present appeal.
7 The principal submission of Mr.Sakhardande, learned Senior
Counsel appearing for the Appellant/judgment debtor, is that the foreign judgment dated 22 January 1999 including the two certificates of costs is not a judgment given on merits as contemplated by the provisions of Section 13(b) of the CPC. It is submitted that whether a foreign judgment is a judgment on merits or otherwise must be assessed from the judgment itself; it must be, in other words, apparent from the text of the judgment. It is submitted that to the extent that the present foreign judgment does not contain reasons, the same does not, on its face, reveal or disclose application of mind of the court to the truth or falsity of the case including evidence placed and submissions made before the court. Mr.Sakhardande submits that absent any reasons in the judgment, it would be impossible for a contesting party to raise any effective defence under Section 13 of the CPC. In other words, learned Counsel submits, reasons are essential to enable a party to raise a permissible defence under Section 13, particularly under Clauses (b), (c) and (f) of Section 13. It is submitted that but for such construction, these clauses would be rendered otiose and nugatory, and therefore, the rival contention that there need not be reasons in a foreign judgment ought to be eschewed. Without prejudice to these submissions, Mr.Sakhardande submits that the foreign judgment must at least indicate that the court has considered rival pleadings, evidence – oral and documentary – and submissions; only when the judgment gives such indication that it could be considered as having satisfied the test of a judgment on merits as laid down by Courts in India.
8 Mr.Andhyarujina, learned Senior Counsel appearing for the
Respondent / decree holder, counters these submissions. Learned Counsel
submits that the judgments relied upon by Mr.Sakhardande in support of
his proposition that a foreign judgment must contain reasons so as to make
it a judgment on merits are all cases of ex parte foreign judgments. Learned
Counsel submits that there is no requirement in law of reasons to be
contained in a foreign judgment so as to make it a conclusive judgment
within the meaning of Section 13 of CPC. Learned Counsel submits that a
judgment can be considered as having been passed on merits, when the
court deciding the case gives opportunity to the parties to put forth their
respective cases and after considering rival submissions, renders its
decision in a formal order or judgment. Learned Counsel submits that in
this case, proper judicial process has been followed as per applicable
procedural laws of U.K.; the parties were given adequate opportunity to
present their respective cases; the case was tried for three days; and
thereafter the judgment was delivered. As for assessment of costs, the
parties filed bills of costs, points of disputes and replies on disputes as to
costs and were heard and only thereafter certificates of costs were issued. It
is submitted that this judgment/decree (including the costs certificates) is
conclusive, having been passed on merits of the case.
9 The relevant provisions of the CPC for execution of a foreign
judgment are to be found in Sections 44A and 13 of the CPC. The sections are quoted below:
“44A. 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 superior Court stating the extent, if any, to
which the decree has been satisfied or adjusted and such certificate
shall, for the purposes of proceedings under this section, be
conclusive proof of the extent of such satisfaction or adjustment.
(3) The provisions of section 47 shall as from the filing of the
certified copy of the decree apply to the proceedings of a District
Court executing a decree under this section, and the District Court
shall refuse execution of any such decree, if it is shown to the
satisfaction of the Court that the decree falls within any of the
exceptions specified in clauses (a) to (f) of section 13.
Explanation 1— "Reciprocating territory" means any country or
territory outside India which the Central Government may, by
notification in the Official Gazette, declare to be a reciprocating
territory for the purposes of this section; and "superior Courts", with
reference to any such territory, means such Courts as may be
specified in the said notification.
Explanation 2.— "Decree" with reference to a superior Court means
any decree or judgment of such Court under which a sum of money
is payable, not being a sum payable in respect of taxes or other
charges of a like nature or in respect of a fine or other penalty, but
shall in no case include an arbitration award, even if such an award
is enforceable as a decree or judgment.”
“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 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 India.”
10 The above provisions make it clear that execution in India of a
decree (defined in Section 44A to include a judgment) of any superior
court (defined in Section 44A) of any reciprocating territory (also defined
in Section 44A), upon filing of a certified copy of such decree in a district
court, the decree itself being conclusive as to matters adjudicated thereby,
is a rule; Clauses (a) to (f) of Section 13 of the CPC contain the only
exceptions to this rule. If it is shown to the satisfaction of the court that the
decree, i.e. the foreign decree or decree of a reciprocating territory, falls
within any of the exceptions specified in Clauses (a) to (f) of Section 13,
the district court is obliged to refuse execution of such decree. None of
these clauses, i.e. Clauses (a) to (f) of Section 13, advert to the
requirement of giving of reasons. It is, however, the case of the judgment
debtor that to the extent the judgment contains no reasons, it falls within
Clause (b), which excepts judgments not given on the merits of the case
from conclusive foreign judgments. It is also alternatively argued that to
assess the existence or otherwise of matters referred to in Clauses (a) to (f)
of Section 13 and particularly, Clauses (b), (c) and (f) thereof, the decree
or order must contain reasons. Learned Counsel for the judgment debtor
relies on the definition of “judgment” in Section 2(9) of the Code and case
law explaining that definition.
11 Section 2(9) defines a “judgment” to mean “the statement
given by the Judge of the grounds of a decree or order”. A “decree”, on the other hand, under Section 2(2), 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. An order, on the other hand, defined in Section 2(14), means “the formal expression of any decision of a Civil Court which is not a decree”. The CPC consolidates and amends laws relating to the procedure of courts of civil judicature in India. So far as our civil courts are
concerned, the code makes a clear distinction between a judgment, on the
one hand, and a decree or order, on the other. The latter two are formal
expressions of adjudication or decision of civil courts, whereas the former, a
judgment, is a statement of the grounds of such decree or order given by
the Judge. In so far, however, as judgments of reciprocating territories or
foreign judgments are concerned, the expression “decree” is defined under
Section 44A to mean “any decree or judgment of such Court under which a
sum of money is payable, not being a sum payable in respect of taxes or
other charges of a like nature or in respect of fine or other penalty”. What
is executed under Section 44A is a “decree” of any superior court of a
reciprocating territory and such decree means a decree or judgment of such
court as explained in Explanation II of Section 44A. In other words, so far
as execution of foreign decrees is concerned, the Code does not make any
distinction between a “decree” and a “judgment”. Any adjudication by a
foreign court upon a matter before it, including a formal expression of such
adjudication, is executable under Section 44A. This much appears from a
plain reading of the relevant provisions of the CPC.
12 Privy Council in the case of Brijlal Ramjidas vs. Govindram G. Seksaria AIR 1947 PRIVY COUNCIL 192 held that a “judgment” within the meaning of Section 13 of the
CPC meant “an adjudication by a foreign court upon the matter before it” and not a statement of reasons for the order. Authorities cited by Mr.Sakhardande for the proposition that in order to constitute a judgment, the order must contain reasons (Balraj Taneja vs. Sunil Madan (1999) 8 SCC 396 and Assistant Commissioner vs. Shukla and Bros. (2010) 4 SCC 785) are quite beside the point, since they do not deal with foreign judgments, but with judgments rendered by civil courts in India.
13 Mr.Sakhardande contends that reasons would be necessary to
determine whether any of the exceptions given in Section 13 would apply
to a foreign judgment and therefore, reasons are necessary to constitute a
conclusive foreign judgment within the meaning of Section 13. This is a
circuitous argument. What Section 13 provides is circumstances where a
foreign judgment shall not be treated as conclusive. From this,
Mr.Sakhardande deduces that in every case, the court must be in a position
to assess whether any of the enumerated circumstances exists in the
context of a foreign judgment. He then follows it up by submitting that
such assessment is possible only if there are reasons stated in the foreign
judgment; the scheme of the CPC for executing foreign decrees (which
include judgments), as noticed above, requires the district court to refuse
execution “if it is shown to the satisfaction of the court that decree falls
within any of the exceptions specified in Clauses (a) to (f) of Section 13.”
He then sums up by insisting on the requirement of reasons as flowing
from this scheme. A perfect roundabout for inventing an altogether new
exception - “absence of reasons”. A simple answer to Mr.Sakhardande’s socalled
dilemma may be expressed thus :Clauses (a) to (f) are the only
exceptions to a conclusive and executable foreign judgment. The onus to
show to the satisfaction of the court that a decree falls within any of these
exceptions is upon the objector to execution. The very first and central
fallacy is in insisting on deducibility of these exceptions solely from the text
of the decree. There is no warrant for such insistence in Section 13 itself. If anything, the language of Section 13 suggests otherwise.
14 The first exception in Section 13, contained in clause (a), is
want of pronouncement by a court of competent jurisdiction. The decree could never reflect, on the face of it, competence or otherwise of the court pronouncing it; that would have to be gathered from the circumstances surrounding a case and the adjudication called for by it. Even clause (b) does not suggest the mere text of a foreign decree or judgment as the basis of assessment. A decree or judgment, for example, may contain reasons and yet these may have absolutely nothing to do with the merits of the case; if at all, these merits can only be noticed from the pleadings of the parties, and not from the mere text of the decree or judgment. Clause (c) of Section 13, on its very face, makes it clear that one must have regard to the proceedings before the foreign court to assess whether, on the face of such proceedings, the decree appears 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. One cannot simply have recourse to a decree to consider whether circumstances provided under clause (c) are satisfied;
one must necessarily have regard to the proceedings. Ditto for clause (d) of
Section 13. By its very nature, it requires the executing court to have
regard to the proceedings in which the judgment was obtained to see
whether such proceedings were opposed to natural justice. Clause (e),
which is invoked in a case of fraud, almost by definition, could not imply
exclusive reference to the text of a decree or judgment for its assessment.
Even for assessing a case under clause (f), one must have regard to the
claim and the defence to come to any conclusion on founding of the claim
on breach of any law in force in India. Circumstances provided in Clauses
(a) to (f) of Section 13 are, thus, deducible from pleadings, circumstances
or proceedings of a case and there is nothing intrinsic in the text of a
decree so as to treat it as the sole basis for assessing existence or otherwise
of the exceptions provided therein. The text of the decree, indicating inter
alia whether or not it contains reasons, is but one circumstance; the court
must have regard to all circumstances to assess whether any of the
exceptions provided in Clauses (a) to (f) of Section 13 is made out. The
court cannot refuse to execute a foreign decree or judgment merely
because it is not apparent from such decree or judgment whether or not it
falls within any of the exceptions contained in Clauses (a) to (f) of Section
13.
15 Clauses (a) to (f) of Section 13, being exceptions to the rule,
the onus to show that the foreign judgment falls within any of these
exceptions is on the objector to the execution applied for. The objector
must positively show existence of the circumstances referred to in either of
these clauses. In the present case, the judgment debtor, who objects to the
execution, invokes clause (b), submitting that the judgment has not been
given on the merits of the case. As explained by the Supreme Court in
Alcon Electronics Pvt.Ltd. vs. Celem S.A.4, “when the court deciding the
case gives opportunity to the parties to the case to put forth their case and
after considering the rival submissions, gives its decision in the form of an
order or judgment, it is certainly an order on merits of the case ”. In the
case of Alcon Electronics the appellant, after submitting itself to the
jurisdiction of the court, had agreed to go for a summary adjudication of
costs. The order of costs did not have reasons. The appellant contended
before the court that the order of costs was not a judgment on merits. The
Supreme Court negatived the contention. This is what the Supreme Court
4 (2017) 2 SCC 253
held was the purport of Section 13 generally with its exceptions to
conclusiveness of a foreign judgment :
“A plain reading of Section 13 CPC would show that to be
conclusive an order or decree must have been obtained after
following the due judicial process by giving reasonable notice
and opportunity to all the proper and necessary parties to put
forth their case. When once these requirements are fulfilled,
the executing Court cannot enquire into the validity, legality or
otherwise of the judgment.”
16 The cases relied upon by Mr.Sakhardande in support of his
argument that want of reasons is suggestive of want of adjudication on
merits, particularly the cases of International Woollen Mills vs. Standard
Wool (U.K.) Ltd.5 and Atit Omprakash Agarwal vs. BNP Paribas6, deal with
judgments given for default of appearance of the defendant. That was why
they were treated as judgments not given on the merits of the case.
Whenever a defendant fails to enter appearance in response to a summons
to answer a claim, two scenarios may follow. The court may hear the
plaintiff in the absence of the defendant and pass a judgment on merits. In
some jurisdictions, the courts may instead pass a judgment in such case
simply on the footing that the defendant has failed to enter appearance. A
judgment delivered in the former case would be a judgment on merits in
spite of the defendant’s absence; whilst the latter would be a judgment not
on merits, but simply because of the defendant’s absence. The former is a
case of a conclusive judgment within the meaning of Section 13, the latter
is not since it is hit by clause (b) of Section 13.
17 Let us now consider how the subject foreign decree or
5 (2001) 5 SCC 265
6 (2017) SCC Online Bom 9827
judgment fares in the face of this law. The genesis of the decree in our case
is a consent order passed in an action initiated by the Appellant (plaintiff)
against the Respondent (defendant). By consent, a judgment was entered
against the defendant and it was ordered that he pay such damages as may
be assessed by the court. In the proceedings for assessment of damages, a
total of eleven affidavits of evidence as well as written arguments of
Counsel were filed by the respective parties. The case was heard without a
jury at the Royal Court of Justice in London for three days, whereafter the
presiding judge held against the plaintiff, assessing award of damages at
nil, and ordering that judgment be entered for the defendant and the
plaintiff do pay the defendant costs of the assessment of damages in the
action, such costs having to be taxed if not agreed. The plaintiff’s
application for leave to appeal from that order was refused by the judge.
These facts, collectively, negate any case that the main judgment on
assessment of damages was entered otherwise than on merits.
18 Let us now come to the order of costs which is the real bone of
contentions between the parties. Under English Law, costs follow the event; the party who looses in court pays the other party’s legal costs (Rule 44.3 of CPR). The court awarding costs usually, as was indeed done in our case, orders such “costs to be assessed, if not agreed”. Assessment of costs is a technical procedure under which the successful party submits its detailed bill of costs to a court official or a costs judge (Rule 47.6 read with practice direction 47) who then assesses how much of it the loosing party should pay. In case the paying party disputes any item in the bill of costs, it has to serve on the receiving party points of dispute (Rule 47.9). The receiving
party may then serve replies to these points of dispute (Rule 47.13). There
is a detailed assessment hearing if the receiving party so requires. (Rule
47.14). The costs are usually summarily assessed at the conclusion of
assessment proceedings (Rule 47.20). After the detailed assessment
hearing, a “completed bill” is filed, based on which a “final costs certificate”
is issued (Rule 47.17). As the English Court of Appeals held in Flannery vs. Halifax Estate Agencies Ltd. [2000] I WLR 377, where court makes a summary exercise of discretion, particularly in an order of costs, there is no duty to give reasons.
A party seeking reasons for a decision in detailed costs assessment
proceedings must do so by filing an appropriate request (Rule 47.23).
19 In our case, in keeping with these rules, a bill of costs was filed
by the defendant who was a successful party. The plaintiff filed points of dispute. The defendant filed replies. A detailed hearing regarding assessment of costs took place between 29 March 2004 and October 2004. The costs officer issued a final costs certificate assessing costs together with interest on such costs. By an additional costs certificate dated 17 January 2005, that interest was quantified. All of this was purely an assessment of costs on merits and not by default or any other mode, and the plaintiff, against whom costs were ordered, admittedly, did not apply for statement of reasons for such costs. There is no reason for us to hold, on these facts, that the decree or judgment on costs was not an order on merits.
20 The Appellant/judgment debtor has accordingly failed to
discharge his onus to show that the decree or judgment comes within the exception contained in clause (b) of Section 13 or any of the other exceptions in clauses (a) to (f) of Section 13. The learned Single Judge, in any event, has taken a perfectly possible, and even a probable view, and there is no reason for us to take another view and unsettle it.
21 The appeal is, in the premises, dismissed. The costs of the
appeal, quantified at Rs.2 lacs, shall be included in the costs of execution and recovered from the Appellant/judgment debtor.
22 Learned Counsel for the Appellant applies for stay. Stay is
refused.
(MADHAV JAMDAR, J.) (S.C. GUPTE, J.)
No comments:
Post a Comment