Baijnath Karnani vs Vallabhadas Damani

Stone, J.—This case raises a preliminary point of importance and one which has not apparently been raised before although one would have

thought that this matter in question must have arisen, in India, many times before. It is suggested by each side that the reason it has not been raised

before that is that the answer is so obvious that the question is hardly susceptible of argument whereupon then followed on each side an able and

exhaustive argument to show that the obvious was obvious

The point in question is this: Where in a foreign State there is an action and in that action a judgment is given and from that judgment appeal is

made which appeal is dismissed is the ""judgment"" in that action the judgment of the Court of first instance or is it the judgment of the Appellate

Court for the purposes of the Limitation Act?

This action is brought to enforce a judgment given in the State of Bikaner. The period of limitation in question is that provided by Article 117 of

the Schedule of the Act, that is, six years from the date of ""the judgment"". The suit is, in the Limitation Act, described as ""upon a foreign judgment

as defined in the Code of Civil Procedure, 1908"". If Article 117 is not applicable the period is six years from the time ""when the right to sue

accrues"" (Article 120).

When one turns to the definition of ""foreign judgment"" in the Code of Civil Procedure, 1908, it is found to mean the judgment of a foreign Court.

When one refers to what this means one finds no difficulty in the definition of ""foreign Court"" but there is a difficulty created by the definition of the

word ""judgment"" for ""judgment"" curiously enough is given the popular meaning, vis., ""the statement given by the Judge of the grounds of a decree

or order."" That is, it has not got the meaning it has in England. It does not mean the decree or order but it means a statement by a Judge.

This, in my opinion, results in an absurd reading of Article 117 and accordingly is one to be avoided if possible. It results in an absurdity because

as will hereafter be shown when an action is brought upon a foreign judgment the basis of that action is the implied contract raised by the fact that

the parties have litigated the matter and the implication that by so doing each has impliedly agreed with the other to abide by the order or obey the

decree of the forum before whom the action is tried. Thus the essence of the cause of action is contract. A ""judgment"" as defined by the Civil

Procedure Code, need not be given at all. Certainly there is no implied contract to agree to perform the ""grounds"" of the decree or order still less is

there an implied contract to perform the ""statement given by the Judge of the grounds"". I am thus constrained to hold that ""judgment"" in the

expression ""foreign judgment"" as used in Section 2(6) of the CPC has the English meaning and not the meaning (as regards the word ""judgment"")

given by Section 2(9) of the Civil Procedure Code. That is,'' the term ""foreign judgment"" means the decree or order of a foreign Court as defined

in Section 2(5) of the Civil Procedure Code. If I am wrong as to this I hold that Article 117 does not apply and the appropriate article is Article

120.

One other preliminary matter must be touched upon. It is clear that a foreign judgment and a municipal judgment are upon entirely different

basis. When one seeks to enforce a municipal (or national as distinct from foreign) judgment one has available the machinery of execution. One

executes the judgment. In the case of a foreign judgment there can be no question of execution. The distinction between execution and suing on a

foreign judgment is, at any rate in India, and for reasons which hereafter appear is this: execution is a continuing right which lasts until the action is

concluded; a suit on a foreign judgment is an action upon an implied contract. That cause of action arises once, viz., when a decree is given obliging

one party to do or abstain from doing something. The date when it arises is prima facie the appropriate date from which to calculate the period of

limitation unless there is any principle of law or provision of the Limitation Act to prevent such a conclusion.

The basis of the present cause of action is stated concisely by Parke, B. in Williams v. Jones (1845) 13 M. & W. C.P. 628 : 153 E.R. 262 as

follows:

The principle on which this action is founded is, that, where a Court of competent jurisdiction has adjudicated a certain sum to be due from one

person to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment may be maintained. It is in this way

that the judgments of foreign and colonial Courts are supported and enforced.

Is this right affected by the fact that within the time provided an appeal is taken? In the 6th edition of Westlake''s Private International Law,

paragraph 314, the law is stated as follows:

The foreign judgment...must be such as lays on the defendant a present duty to pay...if there is no stay of execution in its own country the pendency

of an appeal will not be a bar to an action...though it may afford a ground for the equitable interposition of the Court to prevent the possible

abuse....

The same general conclusion finds expression in Dicey''s Conflict of Laws, Rule 114.

These observations in very authoritative text-books are supported by several decisions. I select the case of Nouvion v. Freeman (1889) L.R.

15 A.C. 1 and the observations therein of Lord Watson at page 13:

In Order to its receiving effect here, a foreign decree need not be final in the sense that it cannot be made the subject of appeal to a higher Court;

but it must be final and unalterable in the Court which pronounced it; and if appealable the English Court will only enforce it, subject to conditions

which will save the interests of those who have the right of appeal.

That appears to be, as is to be expected, good law and good sense. The cause of action springs from the final judgment; the remedy

commences with the final judgment, and dates from that date; but if the final judgment is the subject of appeal that remedy will not be allowed to

affect the appellant''s right and if action to enforce the judgment is taken the Court by whom that action is heard will preserve the rights of the

appellant while the appeal is pending and until it is disposed of.

The conclusion is, I think, clear. The cause of action is the ""final"" judgment. The final judgment is not the judgment of the last Appellate Court

but judgment of the Court of first instance which disposes of the action. Time thus begins to run from the ""final"" judgment as above defined, i.e.,

from the decree or order of the Trial Court.

That being so, it will be seen from Section 9 of the Limitation Act that ""where once time has begun to run, no subsequent disability or inability

to sue stops it."" Any hardship that might arise due to the fact that an appeal or decree might be set aside is prevented not by declaring the judgment

a nullity when there is an appeal but by preservingthe rights of the appellant while the appeal is pending, e.g., by staying the action until the appeal is

disposed of. When the appeal is disposed of if the appeal is dismissed then the stay ceases, the action continues, and the ''decree is enforced.

If this be a correct analysis then obviously the action could be launched (assuming no stay of execution and it is conceded here that there was

no stay of execution) immediately the decree was entered. The action having started if an appeal were subsequently entered against the decree the

action would be stayed until the appeal is disposed of. The appeal being disposed of ;the action would continue and in its turn be disposed of.

But it is said that in India the effect of an appeal is different than in England. It is urged that a long line of cases have decided that where there is

an appeal the judgment of the Court of first instance merges so to speak and in effect ceases to be operative. I enquired without much satisfaction

how such a proposition was compatible with the well-known fact that despite an appeal a judgment could be executed unless there was a Stay. I

do not understand how one could execute a nullity.

This point, however, appears to have been dealt with by the Privy Council in (1919) ILR 46 670 (Privy Council) and, by a Bench of this High

Court in Venkayya v. Sathiraju ILR (1921) 44 M. 714 : 41 M.L.J. 117. The latter ca''se was relied on by the plaintiff, the former by the

defendant. Both support, in my view, the defendant. Both state that ""an original decree is not suspended by presentation of an appeal nor is its

operation interrupted when the decree on appeal is one of dismissal."" The latter case, however, which was concerned with execution (i.e., Article

182) decided that where there was an appeal the right to execute was kept alive by the appeal and so decided because as is stated at page 716 ;

By Article 182 the appellate decree is expressly made a fresh starting point for purposes of execution, and an appellant is not required to proceed

with the execution of a decree, against which he has appealed,, while the appeal is pending on pain of becoming barred if he does not.

Obviously this is not applicable to Article 117. In Article 182 the time from which the period began to run is stated to be:

Where there has been an appeal the date of the final decree or order of the Appellate Court, or the withdrawal of the appeal, etc.

In Article 117 the critical date is ""the date of the judgment."" This difference is not, in my opinion, due to a careless slip on the part of the

draftsman but is due to a recognition by him that when one is suing upon a foreign judgment it is the judgment of the Trial Court that is being

enforced such enforcement being liable to be stayed when an appeal is pending. I am of the opinion that although it may be that the functions of an

Appellate Court for some purposes are different in India and England as was decided in Settappa Goundan v. Mutlria Goundan ILR (1908) 31 M.

268 there is no such difference as is here contended for. As to cases such as Chengalvala Gurraju Vs. Madapathy Venkateswara Row Pantulu

Garu, which decide that on the filing of an appeal the judgment appealed against ceases to be res judicata and becomes sub jndice I should have

thought that such a conclusion. was obvious. The difficulty there felt, I think, was largely due to the citation (for the purpose of illustrating the nature

of appeals in England) of old authorities relating to Bills of Review an equitable remedy, long since fallen into disuse, which never had anything to

do with appeals in the proper acceptation of that term but were more akin, to actions to set aside a judgment on the ground of fraud, or because of

new evidence discovered, or patent error. The remedy by way of bill of review obviously left the judgment impugned standing and effective until

set aside. In such cases there were two actions. One concluded and not under appeal and then another to vacate the first. That is not what is

understood in England as an appeal. In so far as Settappa Goundan v. Mutliia Goundan ILR (1908) 31 M. 268 follows Chengalvala Gurraju Vs.

Madapathy Venkateswara Row Pantulu Garu, in stressing the difference between the nature of an appeal here and in England in my opinion it

should be treated with caution.

A further point was faintly argued as a preliminary objection, viz., that the foreign Court had no jurisdiction. I over rule that objection upon the

authority of Rama Aiyar v. Krishna Patter.I.L.R. (1915) 39 M. 733 : 30 M.L.J. 148 Here the defendant in that action submitted voluntarily to the

jurisdiction and raised many issues besides the issues as to jurisdiction.

It is to be observed that the law of the Bikaner State is a matter of fact and no evidence has been given before me save that there was put in

without objection a Code stated to be on all relevant points textually the same as the Indian Code of Civil Procedure. No point has been made by

either side that the law of that State has not been formally proved and each side has invited me to deal with this point upon the assumption that the

law of the Bikaner State on all relevant matters is the same as the law of this province and I have dealt with the matter on that basis.

In the result it being admitted that this action was commenced more than six years after the judgment of the Court of first instance passed in the

State of Bikaner the first preliminary objection succeeds and the suit is dismissed as time-barred with costs. This does not apply to the small sum of

Rs. 573-12-0 with interest at 6 per cent. from the date of plaint to which it is admitted the plaintiff is entitled. The plaintiff will be entitled to set off

from the costs payable as above an amount on behalf of costs equal to the costs he would have received had he sued for the above sum in the

Small Cause Court and succeeded with costs.