Patel Kala Bechar vs Patel Mohan Bhagwan

Shah, C.J.—This second appeal is brought from an order of the District Judge, Gohiwad, confirming an order of the Civil Judge, Shihor. Umrala, whereby the application of the Appellant decree-holder for execution of a decree was dismissed. The Appellant obtained a money decree against the Respondent on 15th September. 1937 in suit No. 46 of 1937-38 brought in the Court of the former Vala State on the strength of a Khata executed by the Respondent. The Defendant was a resident of Dadva of Umrala Mahal of the Bhavnagar State, and he did not appear after service of Summons and the decree was passed ex parte. The decree was kept alive by taking out execution proceedings from time to time in the Vala Court, and on the formation of the United State of Kathiawar, which later became the Saurashtra State, and after the integration of the Vala State into the said United State of Kathiawar on 8th March 1943, the decree-holder applied to the Munsiff''s Court at Vala on 3rd June 1950 for transferring the decree to the Court of the Civil Judge, Shinor-Umrala for the execution and accordingly the decree was transferred to the latter Court. The judgment-debtor having been served with a notice, he contended that he was residing in Dadva under the jurisdiction of the Bhavnagar State, that he had not submitted to the jurisdiction of the Vala Court, that the decree passed was against a non-resident foreigner and was therefore a nullity, and that it could not be executed It was also urged that the decree-holder ought to have filed a suit on the strength of the Khata in the Bhavnagar Court within the period of limitation and that such a suit was now barred by time. It was contended that the judgment-debtor had obtained a vested right to resist the decree of a foreign Court and that he could not be deprived of that right.

The learned Civil Judge held that the decree of the Vala Court being an ex parte decree against a non-resident foreigner was a nullity and could not be executed and that the judgment-debtor could not be deprived of the valuable right which he had acquired of resisting the suit, if such a suit had been brought in a Court of the Bhavnagar State. He also rejected the contention urged on behalf of the decree-holder that by reason of the formation of the Saurashtra State by the integration of the former States of Kathiawar, the decree now becomes a decree obtained in the Court of the Saurashtra State and was for that reason executable in any other Court of the said State. In this view he dismissed the Darkhast. In appeal, the learned District Judge agreed with the lower Court that the judgment-debtor had acquired a valuable right to plead the bar of limitation against the claim, and that he could not be deprived of the said right by reason of the merger of the States into the Saurashtra State, and in this view the learned judge dismissed the appeal.

A preliminary objection was taken by Mr. Oza for the Respondent that as the amount in the suit was less than Rs. 500 no second appeal lies by virtue of Section 102 Code of Civil Procedure. The term ''suit'' in this Section includes execution proceedings so that if no second appeal lay from the decree, then no second appeal would also lie against an order passed in execution. We will presume that the suit was of a nature cognisable by the Small Cause Court and that Section 102 CPC applies. In that case, no doubt no second appeal would lie. However we can treat this appeal as a Revision Application and proceed to consider the questions raised, and we do accordingly treat it as a Revision application.

Now it is admitted that the decree in question was passed against a non-resident foreigner who did not submit to the jurisdiction of the Vala Court and ordinarily the decree-holder''s remedy would have been to bring a suit on the strength of a foreign judgment in the Court of the Bhavnagar State within whose jurisdiction the judgment-debtor was residing; and this might well have been the position in the present case had it not been for the historical event of the formation of the Saurashtra State in which the former States of Vala and Bhavnagar and other States of Kathiawar integrated. The Code of Civil Procedure, which was applicable in Vala was the same as the CPC in British India and u/s 20(c) of the said Code, the Vala Court had the jurisdiction to entertain and decide the suit against a non-resident foreigner as the cause of action arose within the local limits of its jurisdiction by reason of the fact that the Khata had been executed by the Defendant within those limits. Therefore, so far as the competency of the Vala Court to pass a decree in that suit is concerned, it cannot be disputed that the said Court was a Court of competent jurisdiction. That being so it was a valid and binding decree.

A similar question came to be considered in - Chunnilal Kasturchand Vs. Dundappa Damappa, . There the decree was obtained by the Plaintiffs in the Court of the Civil Judge, Senior Division, Belgaum against several Defendants some of whom did not reside within the jurisdiction of the Belgaum Court and so the leave of the Court was obtained u/s 20(b) of the Code of Civil Procedure. The cause of action had arisen within the jurisdiction of the Belgaum Court. The suit was ultimately decreed against all the Defendants in March 1938. Execution of the decree was taken out in 1940 in the Belgaum Court and the Darkhast was transferred for execution to the Court of the Subordinate Judge, Jamkhandi, which was then a native State. However it appears that there was a reciprocity by virtue of which decrees of a Civil Court in British India could be executed in the State Courts as if they were the decrees passed by Civil Courts of the Jamkhandi State. The judgment-debtor contended that it being an ex parte decree passed against him by the Belgaum Court, it could not be executed against him by the Jamkhandi Court, and this plea having been accepted by the trial Court and the trial Court having dismissed the Darkhast, an appeal was taken to the High Court.

Dealing with the question, Mr. Justice Rajadhyaksha held that the Belgaum Court did have the jurisdiction to pass a decree as the cause of action arose in its territorial limits. The competency of a Court to try a suit had to be determined according to the Municipal Law and the learned Judge cited-Rambhat v. Shankar Baswant 3 Bom. L.R. 82 where it was held that under the CPC (Act XIV of 1882) British Courts are empowered to pass judgments against non-resident foreigner provided that the cause of action has arisen within the jurisdiction of the Court pronouncing the judgment.- Gaekwar Baroda State Railway Vs. Sheik Habib Ullah was also referred to with approval and reference was also made to-Girdhar Damodar v. Kassigar Hiragar 17 Bom. 662. ''On a consideration of these authorities, the learned Judge held that the decree of the Belgaum Court was a good decree and could be executed against any property belonging to the judgment-debtors anywhere within the territory which was formerly known as British India. As the learned Judge observed, the difficulty, however arose because that decree was sought to be executed in Jamkhandi Court and against a person who, at the time of the decree, was a non-resident foreigner. The said decree, as was obvious, was a decree of a foreign Court, and in the learned Judge''s opinion, when it came to the question of executing the decree against a non-resident foreigner, who did not submit to the jurisdiction of the decreeing Court, the decree, as against him could not be treated as a decree passed by a Court of competent jurisdiction. However by reason of a subsequent event, viz., the merger of the Jamkhandi State into the Province of Bombay, the Belgaum Court could not be considered as a foreign court for the purpose of the execution proceedings pending in the Jamkhandi Court and the decree could be executed.

Mr. Justice Shah, who wrote a concurring judgment, put the position more explicitly and observed that the decree passed by the Belgaum Court was binding upon those Defendants who were British Indian Nationals, and was also binding upon all Defendants residing within the limits of what then was British India. The learned Judge observed:

But the competency of the Court of the First Class Subordinate Judge at Belgaum to try the suit either by reason of the cause of action arising within the limits of the Court or by reason of the leave granted by the Court could not render the decree one passed by a Court of competent Jurisdiction so as to make it enforceable against the Respondent who was a foreigner and was not ordinarily residing within the Jurisdiction of the Court which passed the decree and who had not submitted to the Jurisdiction of the court. It is well settled that even where there are reciprocity agreements under which decrees of Courts of one State are enforceable by Courts of Anr. State, a judgment-debtor is entitled to raise all contentions which he could have raised if a suit had been filed on a foreign judgment.

After referring to-Gurdyal Singh v. Rajah of Faridkote 22 Cal 222 (P.C.), and other cases the learned Judge ultimately observed: "In my view the competency of a Court to entertain an action and to pass a decree may be judged by the municipal law of the State when that question arises in a Court within the limits of the State which has constituted the Court which entertains the suit or passes the decree and is not to be judged by applying rules of international law. But where a question arises as to the enforcement of a decree or order passed by a Court in Anr. territory, the rules of international law must prevail." Agreeing with Mr. Justice Rajadhyaksha on the question of the effect of the change of circumstances resulting in the merger of the Jamkhandi State with the province of Bombay, the learned Judge held that the status of the judgment-debtor was changed by reason of the said merger, and he was no longer a foreigner with reference to the Belgaum Court and the Court in which execution was sought was no longer a Court of a foreign State.

The learned Judge observed:

Consequently, the rule of private international law that a decree of a Court cannot be executed in a foreign Court against a person who was qua the Court which passed the decree a nonresident foreigner is no longer of any application. The rule of private international law has remained the same, but its operation in so far as it concerns the Court in which execution is sought is altered. The judgment-debtor may well be entitled to resist execution of the decree of a court of a State which at the date when execution is sought is a Court of a foreign State, but he is no longer entitled to resist the execution of a decree of the Belgaum Court which is not the decree of a Court of a foreign State.

Both the learned Judges also rejected the contention urged on behalf of the judgment-debtor that he had a right to resist the execution of a decree of a foreign Court, that this was a substantive right, and that it could not be taken away, and they held that it was not in consequence of any change of law. but as a result of an act of State that the judgment-debtor lost his former status and was from 25th February 1948 (the material date in that case) onwards a national of the Indian Union and a citizen of the Dominion of India. Therefore the principles which apply to the construction of a statute which affects the vested rights could not be applied to the. alteration of the status of an individual by an act of State

This judgment was considered by a Full Bench of the Bombay High Court in- Bhagwan Shankar Vs. Rajaram Bapu Vithal, , and the question referred to the Full Bench was in the following terms:

Whether a decree passed by a foreign Court against a person who has not submitted to its jurisdiction can ever become enforceable by reason of any subsequent event and whether- Chunnilal Kasturchand Vs. Dundappa Damappa, to the extent that it decides this point, was rightly decided.

There the Plaintiff Bhagwan had obtained an ex parte money decree in the Court of the Subordinate Judge, Sholapur, on 13 th September, 1937 against Defendant Rajaram, who was a permanent resident of a village in the Akalkot State. The said Defendant did not submit to the jurisdiction of the Sholapur Court. The decree was transferred for execution to the Court of the Nyayadhish of the Akalkot State, and then an application was made on 9th June 1945 to the Akalkot Court for execution. The application was dismissed and this order was confirmed by the District Judge of Akalkot on 8th June 1948. Meanwhile the Akalkot State had merged into the Bombay State. Dealing with the question whether the Sholapur Court had the right to exercise jurisdiction upon a non-resident foreigner, Chagla C.J. held that Section 20(c) of the Civil Procedure-Code clearly contemplates that a Court in British. India may entertain a suit against a non-resident foreigner if the cause of action has accrued within, jurisdiction wholly or in part.

The learned Chief Justice observed:

It is perfectly true that ordinarily Courts all over the world exercise jurisdiction only against persons who are within their jurisdiction and whom they can reach with the arm of the law. It would be futile for a Court to assume jurisdiction when it cannot issue process against the party against whom it is seeking jurisdiction. But special laws make exceptions and one of the exceptions is to be found in Section 20(c) where, as we said before, the Legislature has conferred upon the Courts in India the right to proceed against non-resident foreigners although they are not within reach of the processes of that Court. Therefore, we have clearly this position that the decree passed by the Sholapur Court was not a nullity. It is equally true that if the Defendant who was a citizen of Akalkot and therefore a foreigner qua the Sholapur Court did not submit to the jurisdiction of the Sholapur Court and did not acquiesce in the jurisdiction, then the decree passed by the Sholapur Court could not be enforced when it was transferred for execution to the Akalkot Court. The true view of the matter is not that the decree was a nullity, but its enforcement or executability was limited to the Sholapur Court and it could not be executed or enforced in a foreign territory because the Defendant had not submitted to the jurisdiction of the Sholapur Court.

The principle of private international law, which is embodied in Section 13(a), is that a Court will not enforce the judgment of a foreign Court if that judgment is of a Court which is not a competent Court and for the purpose of competency in private international law a Court is never competent when it passes a judgment against a, non-resident foreigner who has not submitted to its jurisdiction. Therefore, as far as this particular decree was concerned, as the Defendant, we are assuming, did not submit to the jurisdiction of the Sholapur Court qua the Akalkot Court the judgment of the Sholapur Court was a foreign judgment passed by a Court not of competent jurisdiction and therefore the decree could not be executed in the Akalkot Court so long as the Sholapur Court continued to be a foreign Court.

But once it is conceded that the decree was not a nullity and it was valid and binding as far as the Sholapur Court was concerned, then there is no difficulty, with respect, in understanding and appreciating the judgment, which we have to consider in this Full Bench because if the character of the Akalkot Court changes and if the status of the Defendant alters because of that fact, then the impediment which was initially there, in the decree being enforced in the Akalkot Court disappears and the decree which was unenforceable till that change came about becomes enforceable and executable in the Akalkot Court. This is not in any way violating private international law. Private international law remains the same. But under the circumstances of the case the Sholapur Court no longer being a foreign Court qua the Akalkot Court the question of private international law does not arise at all. The decree is then being executed under the Municipal law and clearly under the Municipal law the decree is executable as it has bean passed by a Court of competent jurisdiction.

The following observations of the Privy Council in-Gurdyal Singh v. Raja of Faridkot 22 Cal 222 (P.C.) were quoted:

In a personal action, to which none of these causes of jurisdiction apply, a decree pronounced in absentum by a foreign Court, to the jurisdiction of which the Defendant has not in any way submitted himself, is by international law an absolute nullity. He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the Courts of every nation except (when authorised by special local legislation) in the country of the forum by which it was pronounced.

These observations were considered and reconciled and the learned Chief Justice took the view that the decree in question was not an absolute nullity because something which is an absolute nullity can never be enforced in any part of the world under any circumstances; but the Privy Council itself contemplates that such a decree can be enforced in the forum by which it was passed provided special local legislation authorises that forum. The decree is a valid decree but it is not enforceable in Courts other than Courts where it was passed by reason of private international law.

With respect, I agree with the view taken in both these Bombay decisions: The question of the competency of a Court to entertain a suit and to pass a decree and of the said decree, being a valid decree, has to be judged by the municipal law. Section 20(c) of the CPC does empower a Court to hear a suit if the cause of action, wholly or in part, arises in the local limits of its jurisdiction, so that the decree of the Vala Court in this case was a decree of a competent Court and therefore a valid decree. The question of the enforcement or the execution of the decree is a distinct one and it is when execution of the decree is sought in a foreign Court that private international law comes into play and the decree becomes unenforceable against is nonresident foreigner who has not submitted to the jurisdiction of the decreeing Court. With respect, I also agree with the view taken by the learned Judges of the Bombay High Court in the above two decisions that the position is completely altered on account of an act of State by which the Jamkhandi State in the one case and the Akalkot State in the other case came to be merged in the Province of Bombay, and by reason of that act of State the decree no longer remained a decree of a foreign Court qua the said States. It is true that in the case before us the merger is not of the Vala and the Bhavnagar States only, but the merger is of all the States of Kathiawar who by a Covenant integrated themselves into one new State called the United State of Kathiawar, but that does not make any difference to the rule accepted in these Bombay decisions.

Whether Vala and the Bhavnagar States merged together or whether these two States along with several other States merged together and created a new State, the fact does remain that the Vala Court ceases to be a foreign Court qua the Bhavnagar Court. In fact both these Courts and the Courts of several other States became the Courts of one State, now the Saurashtra State. The character of the Bhavnagar Court changes and so does the status of the Defendant alter because of this historical fact of the integration of the States into a common State of Saurashtra. The decree, the execution of which is now sought, therefore, no longer remains a decree of a foreign Court qua the Bhavnagar Courts. Its execution has been sought under the municipal law and no question of the operation of private international law now arises. Under the municipal law the decree is executable because it has been passed by a Court of competent jurisdiction.

There is also Anr. and a more direct reason on account of which the decree in question of the Vala Court is executable by the Shihor-Umrala Court. On the formation of the United State of Kathiawar in March 1948 the Raj Pramukh promulgated Ordinance No. IV of 1948 on 6th March 1948 and Section 5 thereof enacted that save as otherwise expressly provided, any suit, appeal or application filed in any Court, any decree or order passed, any process issued or any proceeding taken under any law, rule, regulation or order in force in the said States, meaning the Covenanting States, on the date of the making over of the said States, shall be deemed to have been filed, passed, issued or taken under the said law, rule, regulation, or order as continued in force by Section 4 of Ordinance No. 1 of 1948. Section 4 of Ordinance No. IV of 1948 lays down that Courts, other than the Courts exercising the powers of a High Court and jurisdiction conferred or any Court under any law, rule, regulation or order made by competent authority of the State prior to the date of the Covenant shall be deemed to have been made, constituted or conferred by the competent authority of the Government of Saurashtra. The effect of these two provisions, is that the Vala Court shall from the date'' of this Ordinance be deemed to be a Court constituted by the Government of Saurashtra, and its decrees shall be deemed to have been passed by a Court of the Saurashtra State. ''

Then Ordinance No. XI of 1948 was promugated on 5th April 1948 for providing for District and other subordinate Civil Courts in the State of Saurashtra. By Section 2(1) thereof all District and other Civil Subordinate Courts established or continued under the provisions of any other law were abolished, and by Sub-section (2) it was provided that all proceedings pending on the date of the said Ordinance shall be taken cognisance of by Civil Courts established under the ordinance and all proceedings disposed of by the Civil Courts mentioned in Sub-section (1), meaning the Courts which were abolished, were to be deemed to have been disposed of by the Courts established under this ordinance. Therefore, the decree in question must be deemed to have been passed by the Vala Court established under this Ordinance, viz., the present Court of Vala and this decree is therefore executable by the Shihor-Umrala Court just as the decrees passed by the Vala Court after the formation of the State of Saurashtra are executable in other Courts of the Saurashtra State. Both the Lower Courts were therefore wrong in refusing the execution of the decree in question.

Mr. Oza for the Respondent also raised the contention which was raised and considered in- Chunnilal Kasturchand Vs. Dundappa Damappa, and in- Bhagwan Shankar Vs. Rajaram Bapu Vithal, . viz., that the Defendant had a vested right to resist the decree of a foreign Court and that vested right could not be taken away. The contention was rejected by all the learned Judges on the simple ground that although the CPC of the former States has been repealed, Section 13(a) has taken its place in identical terms, and therefore, whatever prejudice has been occasioned has not been caused by the repeal of any legislation The prejudice has been caused by an act of State which alters the status of the decreeing Court and also the status of the Defendant and makes the decreeing Court a municipal Court and the Defendant a citizen, whereas formerly the decreeing Court was a foreign Court and the Defendant was a foreigner. Precisely the same considerations apply to the present case by virtue of the Covenant entered into by the Rulers of the Covenanting States, and the formation of the United State of Saurashtra. The Courts of those States cease to be foreign Courts and the residents of one State qua the other cease to be foreigners. No question of the deprivation of the vested right by repeal of any legislation can therefore arise in this case.

In the result therefore, we allow this revision application, set aside the order of the lower Courts and remand the case to the Court of the Civil Judge, Shihor-Umrala to proceed with the execution of the decree according to law. In the circumstances we direct the parties to bear their own costs of this application.

Chhatpar, J.

I agree.

Baxi, J.

I agree.