The application under Order 7 Rule 11(d) made after an
application under Section 9A is heard and decided, or even vise
versa would stand barred under the principles of constructive of
resjudicata as they relate to the same subject matter being a bar
created under the law which is a jurisdictional issue.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 1580 OF 2013
IN
SUIT NO. 2519 OF 2010
In the matter between:
Dallah Albaraka Investment Co. Ltd
Vs.
Zinnia Mehernoosh Khajotia & Ors.
CORAM : MRS. ROSHAN DALVI, J.
Date of pronouncing the Oral Order: 9 th December, 2013
Citation;2014(3) MHLJ683 Bom,2014(3) ALL MR 85
The above suit is filed for declaration that the suit property
forms a part of the estate of one Captain M.R. Khajotia, since
deceased for appointment of the plaintiff as the administrator on
behalf of the General Body of Creditors for taking possession of the
properties and the title deeds of the properties forming the estate
of the deceased, for disclosing the entire estate of the deceased and
for the incidental acts of giving public notice, selling off the
properties and utilising the proceeds to satisfy the claims of the
creditors and to handover possession as per the claims of the
2.
creditors.
The plaintiff was the creditor of the deceased under certain
loans and advances. The deceased had acknowledged his liabilities
to repay the loans and credits. The plaintiff had sued in the Queens
Bench Division of the Royal Courts of Justice in London, England,
U.K. A moratorium was granted to the deceased. The plaintiff
refrained from prosecuting the suit upon the deceased agreeing to
repay the debts as agreed by the parties. The deceased failed to
perform his obligations under such agreement. The plaintiff sought
to pursue the suit to lift the stay granted. In the meantime Captain
Khajotia expired on 2nd March, 2006. Defendant Nos. 1 and 2 who
are the wife and son of the deceased sought control of the estate of
the deceased. The plaintiff sought to pursue his claim against the
defendants through his Solicitor's notice. The plaintiff sought to
join all the heirs of deceased in the application to lift the stay of the
suit and to proceed against the estate of the deceased under the
special provision in that behalf contained in the Civil Procedure
Rules 19.8.
3.
The application was resisted by the defendants on the ground
that the estate of the deceased was worthless and that there were
no assets and there were no cash sums which passed to the family
of the deceased.
4.
The defendants filed their affidavits in the English Court. The
defendants claimed that there was no genuine purpose which
would be achieved by allowing the claim to proceed against such
estate. The Court considered the position in England as well as in
India of small estates where “there is no point in incurring costs of
appointing personal representatives”. The defendants' contention
was raised on the ground that there were no assets as also on the
ground that the defendants were resident and domiciled in India
and did not live in England. The English Court, after setting out
the entire history of the litigation did not join the defendants as
parties to the proceedings, but allowed the plaintiff to proceed in
the absence of persons representing the estate of the deceased.
5.
The defendants herein, as the respondents therein, led
evidence and the Court considered the evidence as is manifest from
para 10 of the order dated 2nd June, 2009. The Court considered in
para 11 the desire of the plaintiff to join the defendants as
representatives of the estate of the deceased. In para 15 of the
order the Court considered that it would not be appropriate to
appoint the plaintiff as personal representative of the estate of the
deceased with the defendants against their will. However in para
15 of that order the Court considered it appropriate to make an
order under CPR 19.8(1)(a) allowing the claim to proceed in the
absence of a person representing the estate of the deceased so that
the plaintiff could proceed to judgment and attempt to enforce the
judgment in India. The Court recorded in para 15 of the judgment
that the respondents therein (the defendants herein) did not
oppose such an order being made. Hence the defendants, as the
ig
respondents therein, allowed the plaintiff to proceed against the
India.
The Court considered the witness statements filed by the
6.
estate of the deceased and attempt to enforce the judgment in
defendants to come to its conclusion which is reflected in para 17
of the judgment/order dated 2 nd June, 2009. The defendants,
therefore, did not challenge the plaintiff's right to sue and proceed
with the suit against the estate of the deceased.
7.
The Court, therefore, had to pass a judgment against the
estate of the deceased. Such a judgment would be passed because
the respondents in the case who were the legal representatives of
the deceased did not defend the plaintiff's action on merits, but
stated that the estate of the deceased was worthless and that no
assets have come to the family. They lived far away in India, hence
they need not have been joined in the suit, but allowed the plaintiff
to proceed in their absence against the estate of the deceased under
CPR 19.8(1)(a). The defendants, accordingly allowed the plaintiff's
claim to be decided exparte and allowed the plaintiff to proceed
and to obtain a judgment which the plaintiff could attempt to
enforce in India.
The plaintiff applied for summary judgment under CPR 24.2
8.
of the CPR Rules 2000 as there was no real prospect of success for
ig
the defendants in the suit and there was no other compelling
reason for the trial. This was because the defendants had opposed
being sued at all, and that was on the aforesaid grounds.
On 11th December, 2009 the English Court passed the
9.
judgment under the application for summary judgment supported
by the witness statement of the representative of the plaintiff. It
was recorded that the defendant had not attended and was not
represented at the hearing and had not filed any evidence in
response. The Court saw the background of the “long pending
matter” set out fully in the witness statement of the Manager of the
plaintiff. The Court considered the claim issued in 1998 and the
letter of the deceased admitting the liability as also the
acknowledgment of service of the suit and the statement that he
did not intend to contest the plaintiff's claim. The Court also
observed that on the death of the deceased the indebtedness
remained outstanding. The Court also considered the dismissal of
the plaintiff's application for joining the defendants herein as
representatives of the estate of the deceased which was dismissed
(on the grounds stated above) so that the plaintiff could only
proceed against the estate of the deceased under CPR 19.8(1)(a).
The Court considered the two guarantees executed by the deceased
which were exhibited more specially clauses 1, 4, 15 and 21
thereof. The Court considered the admission of liability and the
part amount which was repaid as per the witness statement and the
plaintiff's representative. The Court also considered the agreement
of the deceased in respect of the interest payable upon the
guarantees for which the suit was filed. The Court calculated the
sums due up to 31st December, 2008 from the estate of the
deceased. The Court concluded that the evidence of the plaintiff's
representative showed that there was no basis upon which the
plaintiff's claim could be defended by the defendant and no reason
to dispose it off on trial. The Court saw that no evidence was filed
on behalf of the estate of the deceased to dispute the plaintiff's
evidence. The Court, therefore, expressed its satisfaction that the
plaintiff's evidence supported the application and that the
defendants could not have real prospects of success in defending
that claim. Consequently the Court passed the summary judgment
and granted costs.
10.
The defendants herein were as the respondents in the
application made before the English Court, did not defend the
plaintiff's claim on merits. They sought not to defend the claim at
all. They sought not to be sued. This was on their specific
representation that the estate was worthless and no estate had
come to their hands. They, therefore, made the Court believe that
there was no point in making them defendants because the decree
obtained by the plaintiff could not have been satisfied by them.
However they allowed the plaintiff to proceed against the estate.
That was to proceed against whatever was the estate of the
deceased. They also allowed the plaintiff to execute the judgment
that it obtained in India. Hence the defendants knew of the
plaintiff's claim. The defendants could have defended the claim on
merits. The defendants chose not to do so. The defendants made a
specific representation to Court. The plaintiff proved its claim
through its independent evidence. The defendants did not contest
that claim on merits. The claim, so uncontested, came to be
disposed off on merits. In a detailed judgment spanning
paragraphs, the Court considered the merits of the plaintiff's claim.
The Court naturally did not consider the merits of any defence
because there was none. There was no defence though the
defendants were put to notice of the plaintiff's claim and in fact
were sought to be sued to represent the estate of the deceased.
Because the defendants did not want to be sued and were allowed
not to be sued on their own representation the plaintiff's claim
alone had to be considered on merits which was done.
11.
The defendants intermeddled with the estate of the deceased
in India. The plaintiff ascertained the estate of the deceased. A
large estate is shown as properties owned by the deceased in India
containing four immovable properties and other movable estate
including bank accounts, shares, securities etc. The plaintiff sued
setting out the aforesaid judgment obtained by the plaintiff. The
plaintiff has not applied for execution of the foreign judgment. Of
course, the plaintiff may do so in an independent proceeding. That
has been specifically allowed by the defendants. In this suit the
plaintiff has sought to be appointed administrator as a creditor of
the estate of the deceased on behalf of the other creditors also.
The plaintiff would go to trial in this suit.
12.
The defendants have taken out this application to reject the
plaint under Order 7 Rule 11 of the CPC as being barred under
Section 13 of the CPC being a foreign judgment which the plaintiff
seeks to enforce.
13.
Section 13 of the CPC shows foreign judgment which are not
conclusive. It runs thus:
“13. When foreign judgment not conclusive. – A foreign
judgment shall be conclusive as to any matter thereby directly
adjudicated upon between the same parties or between parties
under whom they or any of them claim litigating under the
same title except –
(a)
where it has not been pronounced by a Court of
competent jurisdiction;
(b)
where it has not been given on the merits of the case;
(c )
where it appears on the face of the proceedings to be
founded on an incorrect view of international law or a refusal to
recognise the law of [India] in cases in which such law is
applicable;
(d)
where the proceedings in which the judgment was
obtained are opposed to natural justice;
(e)
where it has been obtained by fraud;
(f)
where it sustains a claim founded on a breach of any law
in force in [India]”.
The Section is in positive terms. It shows that all foreign
14.
judgments would be conclusive upon adjudicated matters between
the parties except under the six circumstances mentioned therein.
A judgment not given on the merits of the case would not be
conclusive under Section 13(b) of the CPC. The defendants claim
that the judgment of the English Court dated 11 th December, 2009
is not given on merits of the case. The main argument is that that
is because the defendants in this suit were not represented at the
time of the passing of the judgment.
15.
The defendants were sought to sued to represent the estate of
the deceased upon the death of the deceased against whom the suit
was initially filed in the English Court. The estate of the deceased
was sought to be got represented by the heirs and legal
representatives of the deceased who are the wife and children of
the deceased. They resisted that application successfully. They
successfully resisted because of their representation to the Court as
shown above. Consequently the defendants chose not to be sued
and to agitate the plaintiff's claim on merits. The plaintiff's claim
alone was considered on merits.
16.
The Judge made law relied upon by both the parties would
settle the issue whether such a suit can be taken to be the one
In the case of Ephrayim H. Ephrayim Vs. Turner,
decided on merits or not decided on merits.
Morrison & Co. 1930 The Bombay Law Reporter 1178 this
Court considered that the summons was served and the
defendant had notice of the plaintiff's suit. The defendant
appointed a constituted attorney under a power of attorney.
The constituted attorney was instructed to apply only for an
adjournment. The adjournment was refused by the Court. A
decree came to be passed. The Court considered the earlier
Privy Council case of Keymer Vs. Visvanatham Reddi 1916
ILR 40 Mad. 112 = AIR 1916 Privy Council 121 in which the
defendant refused to answer interrogatories. His defence was
struck off by the King's Bench in London. The Privy Council held
that the judgment which followed was not one on merits. The
judgment was by way of penalty. It did not consider the
plaintiff's case on merits. Merely because the defendants'
defence was struck off the plaintiff's suit came to be decreed.
The Court had to consider the plaintiff's case on merits. Of
course, the plaintiff's statements of facts would remain
uncontroverted as they could not have been controverted after
the defence was struck off.
In the case of G.S.C. Cole Vs. C.A. Harpen 1919 ILR 41 All
521 which was also considered in the judgment in the case of
Turner, Morrison (supra) the Court distinguished those cases,
because in that case the evidence of the plaintiff was led. The
Court, therefore, considered the plaintiff's evidence. It was held
that that was the judgment given on merits. This would be
considering the merits of the plaintiff's claim even if the
defendants' claim was not considered since it was not made.
The Court further considered the case of Janoo Hassan Vs.
Mahamad Ohuthu 1924 ILR 47 Mad. 877. In that case also
despite notice served upon the defendant and a power of
attorney executed by the defendant the agent did not put in an
appearance. The case was allowed to proceed exparte. It was
held that the defendant was seen to have submitted himself to
the jurisdiction of the foreign Court by the execution of the
power of attorney for defending the suit. It was further held
that ordinarily a judgment delivered exparte is deemed to be on
the merits and only when a defence is raised and not
adjudicated upon that the decision can be said to be not upon
the merits. Hence it was concluded that if the defendant did not
at all appear and allowed the exparte judgment to be passed
that would be only upon merits because it would consider the
merits of the plaintiff's case, albeit only the plaintiff's case.
In the case of Turner, Morrison (supra) also the Court saw
that the defendant was represented. Despite the representation
he had not received instructions to proceed with the case on
ig
merits. The Court held, that that cannot prevent the decision
from being the one on merits. The Court held that only if the
defendant raised the defence and that defence was not
adjudicated upon the decision would be not on the merits of the
case. That would be so because the merits of the defendants'
case considered from the defence would not be adjudicated
upon.
17.
Hence the irresistible conclusion is that if the plaintiff's case is
served upon the defendant, but not defended by the defendant the
Court can only consider the merits of the plaintiff's case. If the
defendants raise a defence, the Court must adjudicate upon the
said defence and hence must consider the merits of the plaintiff's
case as also the merits of the defendant's case. If the Court does
not consider even one of the cases, being the defence, the entire
merits of the case brought before the Court cannot be stated to
have been considered and hence the decision which considers the
merits only of the plaintiff's case or is passed simplicitor upon the
absence of the defendant albeit after a defence is raised is not the
consideration on the merits of the case. Indeed the Court can
consider the merits of what is brought before it. The Court cannot
consider any other merit. Hence if the defendant is served and
does not bring up before the Court any case on merits and does not
raise any defence, there is none for the Court to consider. The
Court would then have to consider only the merits of the plaintiff's
case. Of course, the Court must consider that much in all cases –
even cases in which the defence is struck off and hence the defence
cannot be considered. Upon considering such merits the Court may
either dismiss the suit or decree it for eg., if the Court finds that the
suit is barred by the law of limitation it would dismiss the suit
though no defence is raised in that behalf. Likewise, if there is a
bar under any other law which is apparent from a reading of the
plaint the Court will dismiss the plaintiff's case. If the Court finds
any admission of the defendant, the Court would have considered
the plaintiff's claim based upon such admission. For want of any
defence or denial or a dispute being raised the Court would
adjudicate upon the merits of the plaintiff's claim left un
controvorted by the defendant at his own volition. Such
adjudication, though exparte (without the defendant as a party)
would be a decision on the merits of the plaintiff's claim.
18.
It is important to note that it is not all exparte judgments
which are made nonconclusive under Section 13. An exparte
judgment or decree passed on the merits of the plaintiff's case
would not be covered under Section 13(b) of the CPC.
19.
In the case of East India Trading Co., New York Vs. Badat &
Co., AIR 1959 Bombay 414 (V 46 C 122) instead of a foreign
judgment a foreign award was sought to be challenged claiming
that it must be considered on the same parameters. We are not
concerned with an award and hence the Division Bench judgment
relating to foreign judgments would bind this Court. In para 20 of
the judgment the Division Bench considered the aforesaid case of
Keymer (supra) of the Privy Council. It held that the expression
“considering the merits of the matter” does not mean that any
decision given exparte is necessarily a decision not on merits.
Because in the Privy Council case the merits were never
investigated the decision was held to be not given on merits, but
the mere fact that the decision was exparte as the defendant upon
being served did not chose to appear does not make the exparte
decision a decision not on merits. This must seal the present
argument.
20.
However the defendants have relied upon further judgments
which also lay down the law similarly.
21.
In the case of K.M. Abdul Jabbar Vs. Indo Singapore
Traders AIR 1981 Madras 118 a decree was passed by the Court
in Singapore for Singapore $ 30,000/ in a suit upon an
arrangement contained in a deed executed between the parties.
The judgment passed was sought to be executed. It was contended
that it was inexecutable as it fell under the mischief of Section
13(b) of the CPC. In that case the summons was served. The
defendant appeared through his Counsel. Affidavits were filed on
behalf of the defendants for leave to defend. Leave to defend was
not granted. A decree was straightway passed. The Court
considered various earlier judgments and contentions including the
Division Bench judgment of the Rajasthan High Court and observed
as in para 7:
“7. .... in order that a judgment of a foreign Court may
successfully pass the test of having been given on the merits,
such a judgment must not have been given either as a matter of
penalty or as a matter of mere form based on special or
summary procedure inasmuch as such a trial do not offer any
real or substantial opportunity to the defendant to contest the
suit as a matter of right as he receives it under a regular
procedure. This is, however, not to say that an exparte
judgment per se may not be a judgment on the merits. It may
very well be. It is not the presence or the absence of defendant
which can really condition the quality of a judgment as to its
having been given on the merits or not. What really matters is
whether the procedure according to which the suit has been
decreed requires the Court to determine the truth or falsity of
the contention raised or which may be raised. It seems to us
that where it is so required and the Court applies its mind to
the contentions raised on either side, there cannot but be a
judgment on merits. Where the procedure, however, does not so
far require and decree can be entered in favour of plaintiff
merely because the defendant has failed to appear and the
judgment is given in default, or where he has failed to apply for
leave to defend, or where he has applied for leave to defend and
such leave is refused, then we are disposed to hold the view that
such a judgment cannot be held to have been given on the
merits within the meaning of Section 13(b) CPC.”
Thus it may be concluded that if the defendant shows any
22.
defence to the plaintiff's claim it will have to be considered. If
none is shown it may not be considered. Yet the judgment may
consider the plaintiff's case on merits and be a judgment on merits.
The Court would require to apply its mind to the contentions raised
on either side (or, of, course both the sides if both sides raised
contentions). Mere default of appearances is no bar to the decision
on merits.
23.
In the case of Algemene Bank Nederland NV Vs. Satish
Dayalal Choksi AIR 1990 Bombay 170 again the Court
considered the various earlier rulings starting from the case of
Turner Morrison (supra) and East India Trading (supra). In
that case the Hong Kong Court passed the decree. The defence
before it questioned the execution of the guarantee to repay the
debts upon which the suit was filed. The entry in the register of
guarantees was itself questioned by the defendant. The defendant
remained absent though the aforesaid defences were raised. The
defendant's contentions could not have been considered. The
judgment did not show any evidence led before the Court and
whether it went into the merits of the case. The judgment merely
stated the defendant's failure to appear and the proof of the
plaintiff's claim upon the guarantee which came to be exhibited. It
was not shown how the plaintiff's claim was proved or that
anybody on behalf of the plaintiff gave evidence to establish the
plaintiff's claim. The Court observed that that became relevant
because the defendant's contention was that the guarantee was
blank and undated and misused by the plaintiff relying upon
certain alterations and erasures in the plaintiff bank's register of
guarantees, the nature of which was questioned. It was observed
that the plaintiff imperatively required to examine a witness which
was not shown to have been done by the foreign Court. This Court
observed that the foreign Court proceeded to pronounce the
judgment in view of the defendants' failure to appear and defend
its claim on merits. The Court held that such a judgment could not
be a judgment on merits.
That was a case in which the defendant's defence on merits
was raised. The defendant's claim was on merits of the cause of
action of the plaintiff. That had to be gone into by the Court to
render a judgment on merits. Of course, a judgment could be
passed in the absence of the defendant and the defendant's claim
relating to the blank or undated guarantee or the misuse by the
plaintiff had to be proved only by the defendant and if not proved
the Court would require to proceed only upon plaintiff's claim. An
Indian judgment would not be inconclusive because the defendant's
claim raised in the defence, but not proved by the defendant, is not
considered by the Court. But foreign judgment is different. It is
conclusive only if it does not fall within the six exceptions to
Section 13 of the CPC. Hence if it does not consider the claim of
any party on merits being the claim of the defendant, if any, on
merits it is not a judgment on merits. How would this analogy
apply to the defendant who does not raise a claim at all when the
24.
Court has none to consider ?
A reading of Section 13(b) and the aforesaid judgments
enunciating a clear law distinguish cases which show the plaintiff's
case and the defendant's case and cases which show only the
plaintiff's case. The judgment dated 11 th December, 2009
considering the plaintiff's case in 18 paragraphs, detailed as well as
succinct as it is, cannot be taken to be a judgment not on merits. It
is a judgment on merits of the plaintiff's claim for want of any
defence thereto raised by the defendants and upon the specific
express admission of liability and acknowledgment of debt of the
deceased which, unchallengeable as it is, was not challenged by the
defendants.
25.
It may be mentioned that Section 13 of the CPC does not
create any bar to the filing of the suit. Section 13, calved as it is in
positive terms, only shows which foreign judgments are not
conclusive. Since it pertains only to judgments, it comes into pay
only during the execution of such judgments. Even in the case of
Algemene Bank (supra) the consideration before the Court was in
execution of the foreign judgment. Upon seeing that the Hong
Kong Court had not rendered it on merits, leave under Order 21
Rule 22 of the CPC in the execution application was refused.
26.
Section 13 cannot permit a suit, which would otherwise go to
trial to be concluded by rejection of the plaint itself as a bar created
27.
by law under Order 7 Rule 11(d) of the CPC.
An application specifically under this provision has not been
made in the above notice of motion. However being a question of
law it is considered on merits. It is seen to be unmerited. Hence
on merits it is rejected.
28.
It is contended that the claim of the plaintiff is barred by the
law of limitation and hence again the application lies under Order
7 Rule 11 (d) of the CPC. This contention is frivolous and
misconceived. The claim has been considered as a preliminary
issue under Section 9A of the CPC. The suit is seen not to be
barred by the law of limitation. That issue cannot be adjudicated
in and by way of application under Order 7 Rule 11(d) of the CPC.
It is again argued that the cause of action raised in favour of the
plaintiff as the creditor upon the death of the deceased and the suit
is filed outside the three year period of limitation therefrom. This
issue cannot be redecided.
Two judgments on entirely extraneous matters are relied
29.
upon. In the judgment in the case of M/s. Rushabh Precision
Bearings Ltd. Vs. M/s. Marine Container Services (India) Pvt.
Ltd. 1999(3) Bom. C.R. 760 the Court held that the debt which
was not legally recoverable would not require to be agitated.
The case of State of Kerala & Ors. Vs. Kalliyanikutty AIR
30.
1999 SC 1305 is filed under Kerala Revenue Recovery Act
(1968) pertained to agricultural loans which were time barred and
hence could not be recovered thereunder. This is upon a similar
analogy. That aspect has been once agitated.
31.
The application under Order 7 Rule 11(d) made after an
application under Section 9A is heard and decided, or even vise
versa would stand barred under the principles of constructive of
resjudicata as they relate to the same subject matter being a bar
created under the law which is a jurisdictional issue.
32.
The Notice of Motion also shows that the suit is barred as
being against the public policy of India under the principles of
Islamic banking under which the plaintiff would not be entitled to
enforce the recovery of loan. That issue has not been pressed.
33.
The Notice of Motion is, therefore, dismissed with costs fixed
at Rs.50,000/ condition precedent.
The Suit shall proceed to trial.
34.
(ROSHAN DALVI, J.)
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