1. Execution of a decree passed by the Federal Court of Pakistan in India — Application under Order 45, Rule 15, CPC — Reliance on Indian Independence (Legal Proceedings) Order, 1947. (Para 1 , 2 , 7 )
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1960 Supreme(SC) 185
SUPREME COURT OF INDIA
23rd August 1960.
B.P. SINHA, C.J.I., J.L. KAPUR, P.B. GAJENDRAGADKAR, K. SUBBA RAO AND K.N. WANCHOO, JJ.
Associated Hotels of India, Ltd., and another, Appellants
Versus
R. B. Jodha Mal Kuthalia, Respondent.
Civil Appeal No. 320 of 1958.
Advocates Appeared
Mr. D. N. Pritt, Senior Advocate, (M/s. S. N. Andley, J. B. Dadachanji and P. L. Vohra Advocates of M/s, Rajinder Narain & Co., with him), for the Appellants; Mr. C. K. Daphtary, Solicitor-General of India and Mr. A. V. Viswanatha Sastri, Senior Advocate (Mr. Naunit Lal, Advocate, with them), for the Respondent.
Advocates:
A.V.VISHWANATHA SASTRI, C.K.DAFTARY, D.N.PRITI, J.B.DADACHAN, NAUNIT LAL, P.L.VOHRA, RAJINDAR NARAIN, S.N.ANDLEY
A.V.VISHWANATHA SASTRI, C.K.DAFTARY, D.N.PRITI, J.B.DADACHAN, NAUNIT LAL, P.L.VOHRA, RAJINDAR NARAIN, S.N.ANDLEY
Section 4(1) of the Indian Independence (Legal Proceedings) Order, 1947, applies only to pending proceedings where the trial court's jurisdiction was affected by the partition or transfer of territories, not to all suits pending in the specified provinces.
Headnote:(A) Indian Independence (Legal Proceedings) Order, 1947 - Sections 4(1), 4(2), and 4(3) - Code of Civil Procedure, 1908 - Order 45, Rule 15 and Order 21, Rule 6(b) - Execution of foreign decree - Scope of Section 4(1) of the Order - Whether all proceedings pending in specified provinces are covered or only those where jurisdiction was affected by the partition - The expression "effect shall be given to" in Section 4(3) means the decree is executable as if passed by a competent court in the dominion where execution is sought (Paras 13, 16, 17, 20).
(B) Jurisdiction - For a proceeding to fall under Section 4(1) of the Order, the jurisdiction of the trial court must have been affected by the passing of the Act or the transfer of territories. If the cause of action accrued entirely within one territory and jurisdiction remained unaffected, the statutory fiction of the Order cannot be invoked (Paras 17, 24).
(C) Private International Law - Departure from normal rules of enforceability of foreign judgments intended only to avoid hardship in cases of jurisdictional conflict arising from the creation of new provinces (Para 14).
Facts of the case:
Appellants sought execution in one dominion of a money decree passed by the highest court of another dominion. The original suit was for recovery of earnest money paid for a property sale that failed due to defective title. The suit was filed and decided in the dominion where the property was located. The appellants invoked a statutory order to treat the foreign decree as one passed by a competent court in their own dominion.
Findings of Court:
The court found that the cause of action accrued entirely within the jurisdiction of the foreign court and was not affected by the partition or transfer of territories. Consequently, the proceedings did not fall under the scope of Section 4(1) of the Order, making Section 4(3) inapplicable.
Issues: Whether the decree passed by the foreign court fell within the ambit of Section 4(1) of the Indian Independence (Legal Proceedings) Order, 1947, and whether such a decree could be executed in the other dominion as if passed by a competent court therein.
Ratio Decidendi: Section 4(1) of the Order is not a general provision for all pending suits but is limited to those where the trial court's jurisdiction was impacted by the partition. Since the suit's jurisdiction was based on the location of the property and cause of action, both of which remained in the same territory, the Order's provisions for automatic recognition and execution did not apply.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether the decree attracts Section 4(3) of the Indian Independence (Legal Proceedings) Order, 1947 — Applicability of Order 45, Rule 15, CPC — Vesting of decree in Custodian. (Para 7 , 8 , 10 , 11 )
3. Interpretation of Section 4(1) of the Order — Scope limited to proceedings where trial court jurisdiction was affected by partition or territory transfer — Redundancy of jurisdiction clause otherwise. (Para 13 , 14 , 16 , 17 , 20 )
4. Section 4(1) of the Indian Independence (Legal Proceedings) Order, 1947 applies only to pending proceedings where the trial court's jurisdiction was affected by the partition. (Para 17 , 20 , 24 )
5. Appeal dismissed — Application for execution of the foreign decree held incompetent. (Para 26 , 27 )
6. Does Section 4(1) of the Indian Independence (Legal Proceedings) Order, 1947 apply to all proceedings pending in the specified provinces at the material time?
No. It applies only to pending proceedings in which the jurisdiction of the trial court would have been affected by the passing of the Indian Independence Act or the transfer of certain territories. (Para 16 , 17 , 20 )
7. What is the legal effect of Section 4(3) of the Indian Independence (Legal Proceedings) Order, 1947 on a decree?
If a proceeding falls under Section 4(1), the resulting judgment, decree, order, or sentence is executable in either Dominion as if it had been passed by a court of competent jurisdiction in the Dominion where execution is sought. (Para 19 , 20 )
8. Can a decree be executed in India via the 1947 Order if the trial court's jurisdiction was unaffected by partition?
No. If the trial court's jurisdiction was not affected by the partition or transfer of territory, the statutory fiction under the Order cannot be invoked to execute the decree. (Para 24 )
Judgment
GAJENDRAGADKAR, J. (who delivered the majority judgment on behalf of Sinha, C. J., himself, Subba Rao and Wanchoo, JJ.) : The Associated Hotels of India Ltd., and its Managing Director Mohan Singh Oberoi (hereinafter called appellants 1 and 2 respectively) had filed an application in the High Court of Punjab under O. 45, R. 15, C. P. C., for executing a decree passed by the Federal Court of Pakistan in favour of appellant 2 and against Jodha Mal Kuthalia (hereafter called the respondent). The said application was dismissed but, on an application made by the appellants under Art. 133(1) (a) and (c) of the Constitution the said High Court granted a certificate to the appellants and it is with the said certificate that they have preferred the present appeal before this Court.
2. It is necessary at the outset to state the material facts leading to the appellants application before the High Court under O. 45 R. 15. It appears that by an agreement dated October 2, 1947, the respondent had agreed to sell to the appellants certain property known as Nedous Hotel at Lahore for Rs. 52,75,000. In pursuance of the terms of the said agreement the appellants had paid the respondent Rs. 5,00,000/- by way of earnest money. It, however, turned out that the respondent s title to the property in question was defective, and so the sale could not be completed. That is why the appellants had to file a suit in the Court of the Senior Subordinate Judge at Lahore claiming to recover from the respondent a sum of Rs. 5,10,000/- this amount included Rs. 5,00,000 paid by the appellants to the respondent as earnest money and interest accrued due thereon up to the date of the suit. In the said suit the trial Judge passed a decree for Rs. 5,08,333-5-4 with future interest thereon at 5 p. c., per annum in favour of appellant 2. The claim made by appellant 1 was rejected. This decree was challenged by the respondent before the Lahore High Court. This High Court upheld the contentions raised by the respondent, allowed his appeal, set aside the decree passed in favour of appellant 2 and dismissed the appellant s suit with costs. This decree led to an appeal by the appellants before the Federal Court of Pakistan. The Federal Court in turn allowed the appeal in favour of appellant 2 and restored the decree passed in his favour by the trial Court. This decree was passed on December 21, 1953. The present application made by the appellants in the Punjab High Court under O. 45, R. 15, is intended to obtain the execution of this decree.
3. While the litigation between the appellants and the respondent was thus proceeding in the Courts in Pakistan certain other events took place in regard to the execution of the said decree to which reference must now be made. After the trial Court had passed its decree and before the date of the decision of the Lahore High Court, the appellants had put the decree in execution and thereupon the respondent had applied for stay of the said execution before the Lahore High Court. On the said application the Lahore High Court ordered that the execution taken out by the appellants should be stayed on condition that the respondent should deposit a sum of Rs. 3,00,000/- in the High Court and furnish security for the balance of the decretal amount. In accordance with this order the respondent deposited the amount and furnished the security. Subsequently when the Lahore High Court allowed the respondent s appeal he applied for a refund of the amount already deposited by him, and his application was allowed on 16-12-1949. On the same day, however, the Lahore High Court directed that information of its order allowing the respondent to withdraw the amount should be given to the Custodian. The Custodian then moved the High Court on 20-12-1949, for a review of its order on the ground that the amount in question was evacuee property and as such it vested in him. These proceedings were pending before the High Court when the appellants had taken t
