* IN THE HIGH COURT OF DELHI AT NEW DELHI % Reserved on: October 14, 2022 Pronounced on: December 21, 2022 + EFA(OS) 3/2014, CM APPL. 17219/2022, 17220/2022, 18009-10/2022, 18687/2022, 19319/2022, 35930/2022 &

44503/2022 GOYAL MG GASES PRIVATE LTD. ..... Appellant Through: Mr. Rakesh Khanna, Senior Advocate with Mr.Abhishek Puri, Mr.Simran Mehta, Ms. Surbhi Gupta, Mr.Anuj Malhotra, Mr.Adatya Achae & Mr.V.

Siddharth, Advocates Versus MESSER GRIESHEIM GMBH ..... Respondent Through: Mr.Parag P. Tripathi, Senior Advocate with Mr. Mohna M. Lal, Ms. Geetali Hazarika &

Mr.Srinivasan Ramaswamy, Advocates CORAM:

HON'BLE MR. JUSTICE SURESH KUMAR KAIT HON'BLE MR. JUSTICE SUDHIR KUMAR JAIN

JUDGMENT

SURESH KUMAR KAIT, J

1. The present appeal is preferred against the judgment dated 29.11.2013 passed by the learned Single Judge vide which the objections EFA(OS) 3/2014 Page 1 of 50 Signature Not Verified Digitally Signed filed by the appellant/Judgment Debtor (JD) in Ex.P. 70/2006, titled as MESSER GRIESHEIM GMBH Vs. Goyal MG Gases Pvt. Ltd., pertaining to execution of decree dated 07.02.2006 of the High Court of Justice, Queen‟s Bench Division, Commercial Court, United Kingdom (hereinafter referred to as the “English Court”) under Section 44-A of the Code of Civil Procedure, 1908, have been dismissed.

2. The backcloth of this case, as noted in the impugned judgment dated 29.11.2013, is as under:-

“3. The background to the execution petition is that the Judgment Debtor („JD‟) entered into a loan agreement with the lender bank (Citibank International Plc) for a term loan of US $ 7 million on 30th June 1997 in order to finance the acquisition of capital equipment. The DH, a company incorporated in Germany, held 49% of the shares in the JD. In that capacity the DH agreed to irrevocably and unconditionally guarantee the loan.

4. Under Clause 16.12 of the loan agreement, the DH was to be subrogated the rights of the lender bank against the JD. The loan agreement was governed by English law.

5. With defaults committed by the JD, the DH as guarantor was obliged to pay US $4,794,762.98 to the lender bank. It paid the said amount to the lender bank. Thereafter, the DH raised the demand on the JD to clear the outstanding amount. The JD failed to make the payment.

6. On 17^th January 2003, the DH initiated the proceedings against the JD before the High Court of England for recovery of the aforementioned sum. The JD did not enter appearance and accordingly a default judgment dated 6^th February 2003 was passed by the High Court of England. On 25^th March EFA(OS) 3/2014 Page 2 of 50 Signature Not Verified Digitally Signed

2003, the DH issued a notice of demand to the JD under Section 434 (1) (a) read with Section 433 (e) of the Companies Act, 1956. The JD took a stand in the reply to the notice that the said default judgment dated 6th February 2003 was not enforceable in India since it was not a judgment on merits and had been passed in the absence of the JD.

7. On 6^th July 2005, the DH applied to the High Court of England to set aside the default judgment and for a judgment on merits. The JD was served in the said proceedings and appeared before the High Court of England. The JD did not raise any objection to the jurisdiction of the High Court of England. The JD also filed the statements of its witnesses.

8. One of the pleas raised by the JD before the High Court of England was that although it was not willing to comply with the default decree, the said default decree should not be set aside.

9. The summary of the detailed reasons given in the judgment dated 7^th February 2006 of the High Court of England is as under:

(i) There was no injustice to the JD in setting aside the default judgment and in enabling the JD to put forth the defences it might have on merits. The JD could not both ignore due process and also rely on it. Accordingly, the default judgment was set aside.

(ii) There was no merit in the defence raised by the JD in the statement of its Deputy General Manager,