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SUPREME COURT OF INDIA
A.K. SIKRI, N.V. RAMANA, JJ.
M/s Alcon Electronics Pvt. Ltd. – Appellant
Versus
Celem S.A. of FOS 34320 Roujan, France & Anr. – Respondents
Civil Appeal No. 10106 of 2016 Arising out of Special Leave Petition (Civil) No. 19791 of 2013
Decided On : 09-12-2016
(b) Code of Civil Procedure, 1908 – Section 13 – Conclusive order passed by following judicial process – Executing court cannot enquire into validity, legality or otherwise of the judgment. (Para 13)
(c) Code of Civil Procedure, 1908 – Section 13 and 14 – Appellant and respondent participating in proceedings before foreign court – Court giving opportunity to parties – Decision is an order on merits – Order passed attaining finality as no appeal filed – Binding on the parties – Appellant not disputing jurisdiction of the foreign court – Cannot be impeached either on facts or law – Appellant cannot be permitted to object the execution. (Para 14, 15, 16)
AIR 2001 SC 2134 – Relied upon
(d) Code of Civil Procedure, 1908 – Section 13 – Comity of nation – Order of English court has to be respected – Even an interlocutory order of foreign court has to be given due weight. (Para 18)
(e) Code of Civil Procedure, 1908 – Section 44A – Foreign Judgments (Reciprocal Enforcement) Act, 1933 – England a reciprocating territory – Order passed by High Court of Justice, Chancery Division, England, being a recognized superior Court in England, is executable in India. (Para 20)
(f) Code of Civil Procedure, 1908 – Section 44A – Decree, judgment and order – “Decree” includes judgment and “judgment” includes “order” – Order passed by the English Court after observing principles of natural justice and recording reasons on an application filed by the appellant conclusively deciding the issues on merits is a judgment and becomes decree – Executable in India. (Para 20, 21)
(g) Code of Civil Procedure, 1908 – Section 44A, Explanation II – Cost and penalty – Penalty normally means a sum payable to the State, not to a private claimant – Cost imposed on the basis of the indemnity is not a penalty or tax – Explanation II to Section 44A does not refer to costs as contemplated under Section 35. (Para 28)
PEIR B-28 (1988) – Referred
(h) Code of Civil Procedure, 1908 – Section 35A – Compensatory cost – Ceiling of Rs.3,000/- or pecuniary jurisdiction of the court – Bar operates on the Indian Courts with regard to imposition of costs in respect of false or vexatious claims or defences – High Court of Justice in England not governed by provisions of CPC – Moreover complementary cost u/s 35A different from cost u/s 35 – In absence of any allegation of the claim being false or vexatious, section 35A is not attracted. (Para 30)
(i) Administration of justice – Procedural and substantive law – Matters of procedure are governed by the lex fori, and matters of substance are governed by lex causae – Interest on decree is substantive right of decree holder – Does not concern itself with the procedural law of the forum. (Para 31)
(j) Code of Civil Procedure, 1908 – Section 35 – Interest on cost – Not expressly prohibited – Substantive rights bound up in a foreign remedy, should not be refused and should be maintained – Right to 8% interest as per Judgments Act, 1838 of UK can be recognized and as well as implemented in India – Execution Petition for execution of the order passed by the English Court, held, maintainable (Para 35, 36)
Facts of the case:
The respondents herein filed a suit against the appellant before the English Court for infringement of patent vested in the respondents besides other reliefs.
The appellant-defendant filed an application challenging the jurisdiction of the English Court and seeking the reliefs that the respondents - original claimants have to pay the costs to the appellant occasioned by filing the application to be summarily assessed.
The English Court dismissed the claim of the appellant and further directed it to pay the costs of application to the respondents - original claimants set at £ 12,229.75.
When the respondents filed a petition for execution in India, the appellant opposed it in an application on the ground that the order of English Court is not executable. The executing Court dismissed the same which was confirmed by the High Court.
Finding of the Court:
Execution Petition for execution of the order passed by the English Court is maintainable.
Result: Appeal dismissed with cost.
JUDGMENT :
N.V. Ramana, J.
1. In this appeal by special leave, the appellant - judgment debtor assails the impugned judgment dated 8th April, 2013 passed by the High Court of Bombay in Civil Revision Application No. 680 of 2011, whereby the High Court has dismissed the application filed by the appellant seeking declaration that the Judgment and Order dated 19th October, 2006 passed by the High Court of Justice, Chancery Division, Patents Court, England (hereinafter referred to as ‘the English Court’) is not executable before the District Court at Nasik, by confirming the order dated 15th April, 2011 passed by the District Judge-2, Nasik.
2. The facts in nutshell are that the respondents herein filed a Suit against the appellant before the English Court for infringement of patent vested in the respondents besides other reliefs. In the said suit, the appellant-defendant filed an application challenging the jurisdiction of the English Court. In that application, the reliefs sought by the appellant include the relief that the respondents - original claimants have to pay the costs to the appellant occasioned by filing the application to be summarily assessed. The English Court by its Order dated 19th October, 2006 dismissed the claim of the appellant and further directed it to pay the costs of application to the respondents - original claimants set at £ 12,229.75. Thereafter it appears that the appellant agreed to pay the costs and sought for some time. When the respondents filed a petition for execution in India, the appellant opposed it in an application on the ground that the order of English Court is not executable. The executing Court dismissed the same which was confirmed by the High Court. Hence the appellant is before us by way of this appeal.
3. The appellant made following submissions assailing the Judgment of the Courts below:-
a. An interlocutory Order of English Court with respect to its own jurisdiction (with or without a direction for payment of costs) does not amount to a judgment ‘on merits of the case’ and is therefore not conclusive under Section 13(b) of the Civil Procedure Code (CPC for short).
b. In the alternative, the Order of the English Court in the present case does not amount to ‘decree’ under Explanation 2 to Section 44A of the CPC.
c. Without prejudice to the aforesaid, the part of the order of the English Court relating to the payment of interest on costs should not be executed in view of the deletion of the erstwhile Section 35(3) of the CPC.
4. The Respondents have responded in the following manner. The decree passed by the English Court is very much a decree on merits as the English Court has not only given a detailed Judgment on merits of the matter but also considered the entire evidence as produced by the parties including oral evidence by way of witness statements, documentary evidence produced by the parties and the application challenging the jurisdiction of the English Court has been decided finally on merits of the case put forth by the defendants. Nothing further was required to be done insofar as consideration of the application of the appellant challenging the jurisdiction of the English Court is concerned.
5. It is submitted that Explanation-II to Section 44A is concerned, the same does not refer to costs which are defined under Section 35 of the CPC. The costs having been quantified have assumed the character of a money decree for costs which cannot be equated, either with a fines or penalty which is imposed on a party by the Court or taxes payable to a local authority or to a Government or other charges of like nature. It is the submission of the respondent that the legislative intent was to keep out of the purview of Section 44A the execution of the foreign decree if it related to payment of either taxes or charges of a like nature or a fine or penalty. Even an arbitration award has been excluded. At best it could be argued that compensatory costs in respect of false or vexatious claims which
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