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R.M.S. Shanmugham Chettiar and ors. Vs. Gian Cheng Kiet - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 283 of 1969
Judge
Reported inAIR1974Mad349
ActsForeign Exchange Regulation Act - Sections 5, 21 and 21(3); Code of Civil Procedure (CPC), 1908 - Sections 39 and 44-A
AppellantR.M.S. Shanmugham Chettiar and ors.
RespondentGian Cheng Kiet
Cases ReferredCentral Government. In Lobo v. Fatehkhan
Excerpt:
.....holder residing outside india.-- though decree an be obtained without prior sanction of reserve bank execution of decree cannot be pursued without prior permission of reserve bank--application for transmission of decree.-- not a step for enforcing decree.;section 5 of the foreign exchange regulation act (vii of 1947), totally prohibits making of any payments to or for the credit of any person resident outside india without the necessary permission as contemplated under that section. sub-section (3) of section 21 is in the nature of an exception to the above said provision contained in section 5 for this sub-section says that legal proceedings for recovery of money can be taken even without obtaining the necessary permission from the reserve bank or the central government. but,..........who are the judgment-debtors raised various objections to the above said 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 judgment-debtors in this civil miscellaneous appeal have raised various contentions. however, the learned counsel for the judgment-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.....
Judgment:
1. 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 judgment-debtors raised various objections to the above said 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 judgment-debtors in this civil miscellaneous appeal have raised various contentions. However, the learned counsel for the judgment-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. 5 as far as it is material for our purpose is 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 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 is 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 said 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 judgment 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

judgment-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 learned counsel for the respondent-decree-holder overlooks the specific provisions contained in sub-clauses (a) and (b) of sub-section (3) of Section 21, quoted earlier.

2. Section 5 totally prohibits making of any payment to or for the credit of any person resident outside India without the necessary permission as contemplated under that section. Sub-sec. (3) of Section 21 is in the nature of an exception to the above said provision contained in Section 5, for this sub-section says that legal proceedings for recovery of money can be taken even without obtaining the necessary permission from the Reserve Bank or the Central Government. But, then sub-clauses (a) and (b) of the above said sub-section (3) are in the nature of exception to exception. Sub-clause (a) makes it clear that in spite of what is stated in sub-section (3) the provisions of the Act (the prohibition under Section 5 of the Act) shall apply to sums required to be paid by any judgment or order of any Court as they apply in relation to other sums. Then sub-clause(b) says that no steps shall be taken for the purpose of enforcing any judgment or order for the payment of any sum to which the said provisions apply. The learned counsel for the decree-holder contends that sub-clause (b) would apply only to cases where the decree-holder prays for payment out and not to execution petitions themselves. The learned counsel is not right. The words 'any judgment or order for the payment of any sum' have to be read together. The words 'for the payment of any sum' qualify the words 'any judgment or order.' The sub-section specifically says that no steps shall be taken for the purpose of enforcing such judgment, viz., a judgment for the payment of any sum. Undoubtedly, the judgment in question is one for payment of money and the decree-holder is a resident outside India. No steps shall be taken for the purpose of enforcing this judgment without obtaining the necessary permission of the Reserve Bank or the Central Government. In Lobo v. Fatehkhan, one of us had to consider a similar question. It was held there that execution of a decree by a resident outside India cannot be levied before obtaining the necessary permission of the Reserve Bank or the Central Government. On a plain reading of Section 21(3), sub-clauses (a) and (b), we are satisfied that execution of a judgment by a resident outside India cannot be levied without obtaining the necessary permission as contemplated under the various provisions of the Act. The learned counsel for the decree-holder-respondent referred to the judgment of Ismail, J., in W. P. No.86 of 1968 (Mad). That writ petition was filed by a judgment-debtor contending that before a decree-holder who is a resident outside India gets the necessary permission from the Reserve Bank under the provisions of the Act, he (judgment-debtor) was entitled to be heard by the Reserve Bank authorities and the permission granted by the Reserve Bank without he being so heard was bad. The learned Judge rightly rejected such a contention and dismissed the writ petition. We are unable to see how this decision has any relevance to the present case. Here we are not concerned with the question whether the judgment-debtor has any right to be heard by the Reserve Bank authorities before granting the necessary permission under the Act. We are concerned with the question whether the decree-holder who is a resident outside India can enforce the judgment before obtaining the necessary permission of the Reserve Bank as per the provisions of the Act. As we said earlier, we are quite clear 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, as the case may be, he should necessarily obtain such permission before levying execution for the recovery of the money.

3. Even so, the judgment-debtor-appellants cannot get any relief as far as the present civil miscellaneous appeal is concerned. The order appealed against is one under Section 44-A, Civil P. C. for receiving the foreign judgment and transmitting the same under Section 39, Civil P. C. to the Court of the Subordinate Judge, Devakottai for execution. The decree-holder cannot be said to have taken steps for enforcing the judgment as contemplated under sub-clause (b) of sub-section (3) of Section 21 of the Act in filing the certified copy of the foreign judgment in the Court of the District Judge, Ramnad with a request that the same may be transmitted to the Court of the Subordinate Judge, Devakottai. The Court of the Subordinate Judge, Devakottai, is going to be the executing Court. Undoubtedly, the decree-holder cannot take steps to proceed against either the person or the property of the judgment without getting the necessary permission as contemplated under the Act. But, we are quite satisfied that the steps so far taken by the decree-holder do not come within the purview of sub-clause (b) of Section 21(3) of the Act, for the mere filing of the certified copy of the judgment of the foreign Court and praying for transmission of the same to the executing Court cannot be said to be step for the enforcing of the judgment as contemplated under the abovesaid provisions. Therefore, the civil miscellaneous appeal fails.

4. The learned counsel for the judgment-debtor-appellants raised another point, vi., that the decree-holder has given the rate between the Malayan dollar and the Indian rupee wrongly and that has got to be corrected. But, that question is not before us. The only order that is appealed against is the order transmitting the decree to the Court of the Subordinate Judge, Devakottai. We are concerned only with the question whether that order is legal or not. As we said earlier, there is nothing wrong about that order. Therefore, the civil miscellaneous appeal has to be dismissed. The question as to the correct exchange value has to be agitated in the proper forum. The civil miscellaneous appeal is dismissed. There will be no order as to costs.

5. Appeal dismissed.


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