Madras High Court
KAILASAM,N.S.RAMASWAMI
R.M.S.Shanmugham Chettiar - Appellant
Versus
Gian Cheng Kiet - Respondent
Decided On : 02/13/1973
FOREIGN EXCHANGE REGULATION ACT - SECTIONS 5 AND 21 - EXECUTION OF DECREE BY FOREIGNER - PERMISSION OF RESERVE BANK OR CENTRAL GOVERNMENT REQUIRED - FOREIGN DECREE - TRANSMISSION FOR EXECUTION - NOT A STEP FOR ENFORCING JUDGEMENT - CIVIL MISCELLANEOUS APPEAL DISMISSED.
Fact of the Case:
A decree-holder, a resident of Singapore, obtained a decree for money in the High Court of Singapore against the appellants. The decree-holder filed a certified copy of the decree before the District Judge, Ramnad, under Section 44(A), Civil P.C. with a prayer that the decree may be transmitted to the Court of the Subordinate Judge, Devakottai, for execution. The appellants, the judgment-debtors, raised various objections, including that the decree-holder was debarred from filing the application under the provisions of the Foreign Exchange Regulation Act.
Finding of the Court:
The court held that though a resident outside India can file a suit for recovery of money without the prior permission of the Reserve Bank or the Central Government, he should necessarily obtain such permission before levying execution for the recovery of the money. However, the court found that the steps taken by the decree-holder, including filing the certified copy of the foreign judgment and praying for its transmission to the executing Court, did not come within the purview of sub-clause (b) of Section 21(3) of the Act, and therefore, the order transmitting the decree to the Court of the Subordinate Judge, Devakottai, was legal.
Issues: Whether a decree-holder, a resident outside India, can enforce a judgment before obtaining the necessary permission of the Reserve Bank as per the provisions of the Foreign Exchange Regulation Act.
Ratio Decidendi: The court interpreted Sections 5 and 21 of the Foreign Exchange Regulation Act and held that while a resident outside India can file a suit for recovery of money without prior permission, execution of a judgment by such a resident cannot be levied without obtaining the necessary permission. The court further held that the steps taken by the decree-holder, including filing the certified copy of the foreign judgment and praying for its transmission to the executing Court, did not constitute steps for enforcing the judgment as contemplated under the Act.
Final Decision: The court dismissed the civil miscellaneous appeal filed by the judgment-debtors, holding that the order transmitting the decree to the Court of the Subordinate Judge, Devakottai, was legal. The court also declined to consider the issue of the correct exchange value between the Malayan dollar and the Indian rupee, as that question was not before it.
N.S. RAMASWAMI, J. :- This civil miscellaneous appeal is against the order of transmission made by the learned District Judge, Ramanathapuram. The respondent before us is a resident of Singapore. He obtained a decree for money in the High Court of Singapore against the appellants in this Civil Miscellaneous Appeal. A certified copy of the decree passed by the High Court of Singapore was filed before the learned District Judge, Ramnad at Madurai, under Section 44(A), Civil P.C. with a prayer that the decree may be transmitted to the Court of the Subordinate Judge, Devakottai, for execution. The appellants before us who are the judgement-debtors raised various objections to the abovesaid application filed by the decree-holder. The learned District Judge. Ramnad, overruled all the objections and ultimately by his order dated 11-7-1969 ordered transmission of the above said foreign decree to the Court of the Subordinate Judge, Devakottai. Now, the judgement-debtors in this civil miscellaneous appeal have raised various contentions. However, the learned counsel for the judgement-debtors appellants raised only one contention before us and that is that the decree-holder was debarred in filing the application before the District Judge, Ramnad, under the provisions of the Foreign Exchange Regulation Act. The contention is, without prior permission of the Reserve Bank or the Central Government under the relevant provisions of the Foreign Exchange Regulation Act, no execution could be levied by the decree-holder who is a foreigner. Sections 5 and 21 of the Foreign Exchange Regulation Act are the relevant provisions regarding this point. Sec. 3 as far as it is material for our purpose u as follows -
"Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in India shall -
(a) make any payment to or for the credit of any person resident outside India;...............
(c) make any payment to or for the credit of any person by order or on behalf of any person resident outside India;.............."
Section 21(3) of the said Act as far as it is material for our purpose is as follows :
"(3) Neither the provisions of this Act nor any term (whether expressed or implied) contained in any contract that anything for which the permission of the Central Government or the Reserve Bank it required by the said provisions shall not be done without that permission, shall prevent legal proceedings being brought in India to recover any sum which, apart from the sold provisions and any such term, would be due whether as a debt, damages or otherwise, but -
(a) the said provisions shall apply to sums required to be paid by any judgment or order of any Court as they apply in relation to other sums; and (b) no steps shall be taken for the purpose of enforcing any judgement or order for the payment of any sum to which the said provisions apply except as respects so much thereof as the Central Government or the Reserve Bank, as the case may be, may permit to be paid; and,........."
The contention of the learned counsel for the judgement-debtors-appellants is that reading Sections 5 and 21 of the Act, though a suit for money may be filed in any Court in India by a resident outside India without obtaining the previous permission of the Reserve Bank or the Central Government, as the case may be, no execution can be levied by such foreigner before obtaining such permission. On the contrary, the learned counsel for the decree-holder-respondent contends that the provisions of the Act do not bar even the levy of execution of decree for money even though the decree-holder may be a resident outside India, but permission from the Reserve Bank or the Central Government would have to be obtained only before the decree-holder wants to draw the money from Court. We are of the opinion that the contention of the le
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