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1976 Supreme(Mad) 319

Madras High Court
KAILASAM,BALASUBRAHMANYAN
Epoh, Indian Overseas Bank, by its power agent Joseph Ambrose - Appellant
Versus
S.M.Mohamed Musthaba Sahib - Respondent
Decided On : 06/22/1976

Advocates:
C. Ramakrishna, for Petitioner; D. Raju and M. Venkatechalapathy, for Respondents.

The adjudication of a debtor in a foreign country will have no effect on the insolvent's immoveable property in a foreign country and that the immoveable property in the foreign country will not vest in the Official Assignee.

Headnote:

EXECUTION OF FOREIGN DECREE - INSOLVENCY OF JUDGMENT-DEBTOR IN FOREIGN COUNTRY - EFFECT ON EXECUTION IN INDIA - S. 44-A, C. P. CODE - ADJUDICATION OF DEBTOR IN FOREIGN COUNTRY - NO EFFECT ON IMMOVEABLE PROPERTY IN INDIA - EXECUTION CAN PROCEED.

Fact of the Case:

The appellant, an Indian Overseas Bank, filed an application under S. 44-A read with O. XXI, Rr. 54 and 66, C. P. Code, for attachment and sale of the judgment-debtor's immoveable properties in the District Court of South Arcot. The decree that was sought to be executed was one that was obtained in a foreign court, viz., the Federation of Malaysia. The judgment-debtor objected to the execution of the foreign decree on the grounds that notice under O. XXI, R. 22, C. P. Code was mandatory before attachment could be ordered, and that the supervening insolvency of the judgment-debtor in the Federation of Malaysia was a bar to the maintainability of the execution petition.

Finding of the Court:

The trial court sustained the objection raised by the judgment-debtor and found that the execution petition was not competent. It held that, as the insolvency of the judgment-debtor had supervened the passing of the decree in the foreign court before execution was levied, the execution petition was not competent. On appeal, the High Court dismissed the appeal holding that the supervening insolvency in the foreign State was a bar to the levy of any process in execution or otherwise against the person who was so adjudged insolvent in the foreign country.

Issues: 1. Whether notice under O. XXI, R. 22, C. P. Code is mandatory before attachment can be ordered? 2. Whether the supervening insolvency of the judgment-debtor in the Federation of Malaysia is a bar to the maintainability of the execution petition?

Ratio Decidendi: 1. The court held that notice under O. XXI, R. 22, C. P. Code is mandatory before attachment can be ordered. 2. The court held that the supervening insolvency of the judgment-debtor in the Federation of Malaysia is not a bar to the maintainability of the execution petition. The court relied on S. 44-A, C. P. Code, which provides that a certified copy of a decree of any of the superior courts of any reciprocating territory may be executed in India as if it had been passed by a District Court in India. The court also held that the adjudication of the debtor in a foreign country will have no effect on the insolvent's immoveable property in a foreign country and that the immoveable property in the foreign country will not vest in the Official Assignee.

Final Decision: The court allowed the appeal and directed that execution will proceed.

Judgement

KAILASAM, C. J.: This appeal is preferred by the Indian Overseas Bank, Epoh, by its power agent, Joseph Ambrose, against the judgment of Ramaprasada Rao, J. in A. A. O. No. 230 of 1966.

2. The appellant filed an application under S. 44-A read with O. XXI, Rr. 54 and 66, C. P. Code, for attachment and sale of the judgment-debtor's immoveable properties, in the District Court of South Arcot. The District Judge ordered notice and transferred it to the file of the court of the Subordinate Judge. The decree that was sought to be executed was one that was obtained in a foreign court, viz., the Federation of Malaysia.

3. The objection that was raised to the execution of the foreign decree was that notice under O. XXI, R. 22, C. P. Code was mandatory before attachment could be ordered, and that, secondly the supervening insolvency of the judgment-debtor in the Federation of Malaysia was a bar to the maintainability of the execution petition. It is common ground that after the decree was passed by the foreign court but before execution was laid in the District Court of South Arcot the judgment-debtor became insolvent.

4. The trial court sustained the objection raised by the judgment-debtor and found that the execution petition was not competent. It held that, as the insolvency of the judgment-debtor had supervened the passing of the decree in the foreign court before execution was levied, the execution petition was not competent. The trial court did not give any clear finding whether notice was taken before attachment was ordered. We find from the records, that notice for 26-10-1964 and attachment was ordered by the District Court on 19-8-1964, and the matter was transferred to the court of the Subordinate Judge on that day. The point therefore regarding want of notice is maintainable.

5. On appeal to this court, Ramaprasada Rao J., dismissed the appeal holding that the supervening insolvency in the foreign State was a bar to the levy of any process in execution or otherwise against the person who was so adjudged insolvent in the foreign country. The learned Judge followed the decision of this court in Uthamram v. Abdul Kasim Co., (1963) 2 Mad LJ 412: (AIR 1964 Mad 221).

6. In this appeal, Mr. C. Ramakrishna, learned counsel for the appellant, questions the correctness of the decision of the trial court as well as that of the learned single Judge of this court. His submission is that under S. 44-A which was enacted by S. 2, C. P. Code Amendment Act (Act VIII of 1933) it was provided that, 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 the State as if it had been passed by the District Court. It is not disputed that the decree is that of the High Court of Epoh, a superior court. It is also conceded that it is a reciprocating territory. Section 44-A is therefore applicable and the decree of the foreign court is executable as if it had been passed by the District Court in India. Section 13, C. P. Code provides that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties. That the judgment that is sought to be executed falls within S. 14 is also not disputed for it is conceded that the decision was pronounced by a court of competent jurisdiction and that it was given on the merits of the case. The decision of the trial court as well as that of the learned single Judge of this court was mainly based on the decision of this court in Uthamram v. Abdul Kasim Co., (1963) 2 Mad LJ 412 : (AIR 1964 Mad 221) where it has been held that, where subsequent to the date of application for execution of a foreign decree in India against immoveable properties, the debtor has been adjudged an insolvent in that foreign country, an execution cannot be laid against him in that country, it would follow that it would not be maintainable in this country as well. Two questions that arose f

















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