Skip to content


M. Ponnuswamy Vs. V.K.T. Periasami Pillai and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1980)2MLJ155
AppellantM. Ponnuswamy
RespondentV.K.T. Periasami Pillai and anr.
Cases ReferredRaja Ratnam v. Muthuswami Kangani
Excerpt:
- s. ratnavel pandian, j.1. the first defendant in o.s. no. 185 of 1967 on the file of the subordinate judge, tiruchirapalli is the appellant herein. the plaintiff-first respondent herein filed the said suit for recovery of rs. 15,555.30 with subsequent interest on the foot of a foreign judgment.2. the case of the plaintiff against the appellant (first defendant) and second respondent (second defendant) is as follows : the defendants jointly executed a promissory note dated 1st october, 1962 for rs. 11,000 to one many a pillai agreeing to repay the same with interest at 18 per cent. per annum. the said mariya pillai endorsed and delivered the same to the plaintiff. the plaintiff filed on 11th april, 1966 an action against the defendants in case no. 7384 in the district court of nuwara eliya.....
Judgment:

S. Ratnavel Pandian, J.

1. The first defendant in O.S. No. 185 of 1967 on the file of the Subordinate Judge, Tiruchirapalli is the appellant herein. The plaintiff-first respondent herein filed the said suit for recovery of Rs. 15,555.30 with subsequent interest on the foot of a foreign judgment.

2. The case of the plaintiff against the appellant (first defendant) and second respondent (second defendant) is as follows : The defendants jointly executed a promissory note dated 1st October, 1962 for Rs. 11,000 to one Many a Pillai agreeing to repay the same with interest at 18 per cent. per annum. The said Mariya Pillai endorsed and delivered the same to the plaintiff. The plaintiff filed on 11th April, 1966 an action against the defendants in Case No. 7384 in the District Court of Nuwara Eliya Holden at Hatton (Ceylon) for the recovery of a sum of Rs. 17,930 due upon the said promissory note. The plaintiff has further averred in the plaint that he was reliably informed that the defendants, with intent to defraud and defeat the plaintiff's claim, were about to transfer their house situate at Sergudi Village, Musiri Taluk (in India) and he therefore prayed for an injunction against such a fraudulent transfer. A notice of injunction and the suit summons, were served on the defendants on 16th April, 1966. The defendants entered their appearance and admitted the execution of the promissory note, but denied their liability thereunder by filing an affidavit to that effect. But, subsequently on 30th June, 1966, both parties agreed that a judgment be entered for a sum of Rs. 15,000 and costs. On 10th July, 1966 the case was finally called and the following orders were passed.

3. ' Judgment entered on 30th June, 1966 to stand.' The plaintiff's costs have since been taxed and certified at Rs. 555.30. Hence, the defendants are due to pay to the plaintiff, as per the decree passed by the judgment of the foreign Court, a sura of Rs. 15,555.30. Despite repeated demands, the defendants have not discharged their liability. Subsequent to the service of summons on 16th April, 1966, the defendants appeared to have transferred their house and premises in, Sergudi Village by a sham and nominal paper transaction without any real consideration, the vendee therein also having notice and knowledge of the defendants' intention to defeat the plaintiff's claim. The recitals of the sale deed are utterly false. Perianna Pillai, the alleged transferee, is a friend of the first defendant. Even after the alleged sale, the defendants continue to be in possession of the properties with all the costly furnitures. Hence the plaintiff is entitled to ignore the transfer and proceed against the immovable proper-ties of the defendants lying within the jurisdiction of the trial Court. As the defendants had no sufficient properties in Ceylon, the plaintiff has instituted the suit on the basis of the foreign judgment made on the consent of parties to realise the fruits of the said foreign decree by proceeding against the immovable and other properties belonging to the defendants situate in Sergudi Village.

4. The defendants have filed a common written statement resisting the claim of the plaintiff and contending as follows : The suit is not maintainable before the Subordinate Judge's Court, Tiruchirapalli, as the said Court has no jurisdiction. Both the defendants are residents and citizens of Ceylon, permanently residing at Ragale Estate, Halgraneye, Ceylon for a considerable length of time. The first defendant was employed as a Head Kangani in the above estate and had permanently settled there. The plaintiff instituted an action in case No. 7318 before the District Court at Nuwara Eliya at Hatton for recovery of Rs. 24,162 together with interest and costs. The Court entered judgment in favour of the plaintiff for a sum of Rs. 24,982.55. The defendants in this case, against whom the said action was instituted, had to make necessary arrangements for payment of the amount due to the credit of case No. 7318. The defendants borrowed a sum of Rs. 25,000 from one Perianna Pillai residing at No. 18, Belgravia Bazaar, Lindula for the above purpose. Even prior to this, a sum of Rs. 10,000 was already due to the said Perianna Pillai from the defendants. The total amount due to Perianna Pillai from the defendants thus came to Rs. 35,000. The defendants entered into an agreement with the said Perianna Pillai to convey on or before 29th March, 1966, their house property situate at Sergudi and also valuable movables kept in the house by the defendants in consideration of the above sum due to Perianna Pillai. Accordingly the house was sold by the first defendant and his son Jayaraj by a registered sale deed dated 17th April, 1966, for a sum of Rs. 20,000 and the furniture and vessels at Rs. 14,000. Thus it will be seen that the sale of the house was for a proper and valuable consideration and that the amounts realised under the sale were utilised only for satisfying the decree obtained by the present plaintiff in Case No. 7318. The defendants would state that they have no properties in India within the jurisdiction of the Subordinate Judge, Tiruchirapalli. The defendants are not possessed of any properties in India. Hence, the present suit based on the foreign judgment in Case No. 7384 of the District Court at Hatton, Ceylon is not maintainable. The defendants are permanent citizens of Ceylon and they have no properties whatsoever in India. They are not actually and voluntarily residing in India or carrying on any business or personally working for gain in any part of this country. Hence, the trial Court has no jurisdiction to entertain the suit. No cause of action arose either wholly or in part in India, conferring jurisdiction on the Court to try the present suit. The defendants also deny their liability on the promissory note alleged to have been executed by them in favour of Maria Pillai and the endorsement and delivery to the plaintiff for alleged valuable consideration. The plaintiff had no means whatsoever to pay the amount to the said Maria Pillai in consideration of the alleged endorsement on the date of the endorsement. Further, the defendants had no notice of the said endorsement made by Maria Pillai in favour of the plaintiff, who is not a holder of the said note for value. As the foreign judgment was not given on merits, the persent suit based on it is not maintainable in law. The allegation that the defendants are not possessed of sufficient means at Ceylon to satisfy the decree passed against them is false. In fact, after the judgment entered in Case No. 7385 on 30th June, 1966, the case was adjourned to 10th July, 1966, for the consideration of the question of instalments. But the same was not considered at all. The present suit is filed in India maliciously with a view to get at the house of the defendants, which has already been sold and delivered to Perianna Pillai.

5. On the above pleadings, the following issues were set for trial:

1. Whether this Court has got jurisdiction to try the case ?

2. Whether the foreign judgment was given on merits ?

3. Whether any and if so, what sum is due to plaintiff from defendants as claimed by plaintiff ?

4. Whether the sum claimed or any other sum is recoverable in India and if so, in what terms ?

5. Regarding reliefs and costs ?

On the side of the plaintiff, two witnesses were examined inclusive of the plaintiff as P. W. No. 1 and Exhibits A-1 to A-4 were marked. On the defendant's side the first defendant examined himself as D. W. 1 besides examining one Ramachandran as D. W. 2. Exhibits B.-1 to B. 12 were marked. The Court below, after having considered the evidence let in this case in the light of the legal principles laid down by this Court as well as other High Courts, found on issue No. 1 that 'there are sufficient circumstances in the evidence to show that the defendants have their residence in Ceylon for the purpose of employment and are permanent residents of Sergudi and, therefore, this Court has jurisdiction to entertain this suit'. On issue No. 2, on the basis of a decision rendered by this Court in Mohamed Moideen v. Chintamani Chettiar : (1929)56MLJ547 , the Court held that 'the Judgment delivered was one on merits and therefore, it is binding on this Court.' On issues 3 and 4 it found that the plaintiff is entitled to the amount as claimed by him in the plaint together with costs of suit. On the above findings, it decreed the suit of the plaintiff as prayed for with costs. Hence this appeal by the first defendant.

6. Mr. S. Rajagopalan, learned Counsel for the appellant, questioning the validity of the judgment, mainly raised the following three contentions; (1) As the foreign judgment was not rendered on the merits of the case, the present suit based on it is not maintainable. In support of this contention, he points to exception (b) to Section 13, Civil Procedure Code. (2) The trial Court has no jurisdiction to grant any relief since the defendants never actually or voluntarily resided or carried on business or personally worked for gain, either permanently, or temporarily, in Sergudi or in any other place situate within the jurisdiction of the trial Court. (3) Since the defendants have sold their house, furniture and vessels to Perianna Pillai long before the present suit was instituted, they have no properties within the jurisdiction of the trial Court at the time when the present suit was instituted and hence the trial Court has no jurisdiction to entertain the present suit.

7. Now, let us take the first point and see whether the foreign judgment was rendered on the merits. It is submitted on behalf of the appellant that there was no evidence at all taken by the foreign Court and the judgment was entered only by consent and as such it cannot be said that the subject-matter was adjudicated on its merits so as to hold that the said judgment is conclusive as per Section 13, Civil Procedure Code. He attacks the findings of the Court below as legally unsustainable, contending that the decree in the foreign Court having been admittedly passed as a matter of course without any evidence to support the plaintiff's claim, the judgment is not conclusive and no action could be instituted on its basis in India. In support of his contention, he relies on some decisions.

8. In order to appreciate the argument of the learned Counsel, it would be useful to extract the orders recorded by the foreign Court in Case No. 7384. The defendants admittedly entered appearance before the Court on receipt of summons and notice of injunction and also filed their statements of objections, and thereafter on 29th May, 1966, the plaintiff filed his counter-affidavit to the said objections and then the case was called for enquiry on 4th June, 1966 on which date the following proceedings were recorded:

Plaintiff and defendants present. Mr. Adv, Somasundaram instructed by Mr, Sellathurai for plaintiff. Mr. Adv. Siva Rajarathnam instructed by Mr. Eliyathamby for defendant. Case settled. It is agreed between the parties that judgment be entered for plaintiff for whatever sum is due to P. M. Mariyapillai from the defendant on the note sued upon at the time he endorsed this note in favour of the plaintiff as stated by Mr. Mariyapillai in Court on the next day when this case is called. The plaintiff will be entitled to the costs of this case in the class for which the decree is entered.

Sd/-...

District Judge, 4.6.66.

The terms are explained to the parties. They consent and signed the record. Of consent, call case on 30.6.06.

Sd/-...

District Judge, 4.6.66.

The case was called on 30th June, 1966, on which date the following order was passed in the presence of the advocates for the plaintiff and the defendants.

It is agreed between the parties that judgment be entered for the plaintiff in a sum of Rs. 15,000. I enter judgment for plaintiff for a sum of Rs. 15,000 and costs. The parties also agree that the case be called on 10th July, 1956 to consider the question of instalments.

It is seen that on 13th July, 1966 the case was called and the following order was passed.

Judgment entered on 30th June, 1966, to stand.

Now, let us come to the decisions cited by the learned Counsel and see whether the principles laid down in those decisions are applicable to the facts of the present case.

9. The first decision cited is Mohamed Kasim and Company v. Seeni Pakir Bin Ahmed : AIR1927Mad265 , wherein a Full Bench of this Court has ruled that a foreign judgment given on default of appearance of the defendant on the plaint allegation without any trial on evidence is not a judgment given on the marits of the case within the meaning of Section 13, exception (ft) of the Code of Civil Procedure, and a suit cannot be maintained in the British Indian Courts upon such a judgment. The learned Counsel, relying on the above observation, would contend that as the foreign judgment was admittedly not entered after a trial on evidence, such a foreign judgment is not conclusive within the meaning of Section 13, Civil Procedure Code, as it is clearly attracted by exception (ft) to the said section. After going through the above decision I am unable to agree with the argument of the learned Counsel. The foreign judgment involved in the said decision was one rendered on the non-appearance of the defendant and the decree in that case was given as a matter of course. But, in the present case, as seen from the orders extracted above, the foreign judgment was recorded on the appearance of the parties and on their consent to pass a decree as agreed upon by them and not as a matter of course on the defendants' default of appearance. Hence, the above decision is not of any help to the appellant.

10. The next decision cited is Appalaraju v. Venkatasubba Rao : (1946)1MLJ66 . Therein both parties to the suit had been to a foreign Court with a drafted compromise and the Court passed a decree on the strength of the said compromise. A single Judge of this Court, pointing out that there was no dispute between the parties when they were before the foreign Court with a drafted compromise, the Court had nothing to decide and the said decree passed on the said compromise was a mere recognition of an arrangement already arrived at between the parties and hence could not be said to be a decision on its merits and therefore the decree fell under exception (b) to Section 13 and was not conclusive within the meaning of that section. It was under those circumstances it was pointed out that for a decree to be conclusive under Section 13, there must be a controversy and an adjudication thereon by the foreign Court. I am afraid that this decision will not be of any assistance to the appellant, because admittedly before the foreign Court a controversy or dispute was raised and there was an adjudication thereon.

11. The third decision is Rajarathnam v. Muthuswami Kangani : (1958)1MLJ194 , wherein an argument was advanced that a suit on a foreign judgment was not sustainable because there was no judgment on the merits The point that was urged in support of this contention was that the appellant was ex parte in that suit. But, Rajamannar, C J., speaking for the Division Bench, said that though judgment and decree of a foreign Court might have been passed ex parte, if it was passed on a consideration of the evidence adduced in the case, the decision must be deemed to have been on the merits. In that case, the plaintiff was examined in the foreign Court and he proved his claim. Thereupon the Court passed a decree in favour of the plaintiff, on being convinced that the claim put forward by him was true and was established. The Bench rejected the contention advanced on behalf of the appellant as having no substance. Relying on this decision, learned Counsel would urge that since in the foreign judgment under Exhibit A- 1 and A- 2 in this case, no evidence was recorded, the said judgment and decree cannot be construed as one having been decided on merits and therefore would clearly come within the mischief of exception (b) to Section 13. As I have indicated above the judgment was passed by consent of parties. In other words, the judgment was entered in this case only in respect of the dispute between the parties and on the appearance of the defendants, with their consent. The proceedings and the order clearly indicate that both parties were present on 4th June, 1966 when the parties consented for a judgment to be entered and signed the record for having agreed to the terms under which the judgment was to be entered. On 30th June, 1966, the judgment was entered in the presence of the counsel for the parties. Therefore, the observation made by the Bench in the above decision, which related to a case where an ex parte decree was passed and no evidence was recorded, cannot be made applicable to the facts and circumstances of the present case.

12. The next decision is Sivagaminatha Pillai v. K. Nataraja Pillai : AIR1961Mad385 , where a Bench of this Court ruled that a decree of a foreign Court, even if passed ex parte, will be binding on the parties thereto and will be conclusive under Section 13, Civil Procedure Code, if it is passed on evidence taken and the decision is given by the foreign Court on a consideration of the evidence; but where the decree of the foreign Court is passed as a result of the default of the defendant in furnishing security as directed by the Court, it is not one given on merits and will not be conclusive. This decision also cannot be of any help to the appellant, as the facts in the present case are entirely different from those in the above cited decision.

13. In this connection, it would be useful to refer to the judgment of a Division Bench of this Court in Mohamed Mohideen v. Chintamani Chettiar : AIR1929Mad469 , on which the trial Court has based its conclusion. The facts of the said case are as follows : The plaintiffs and the defendants in a suit in the District Court of Colombo filed a joint application at the time of the trial to the effect that the trial of the suit may be postponed for three months with a view to settlement and that, if not settled, judgment might be entered for the plaintiff as prayed for with costs. When the suit was called on the adjourned date, after three months. The defendants and their proctor were absent and on the plaintiffs' proctor stating that the case had not been settled, the Court ordered that decree in terms of the prior order be entered up. One of the plaintiffs in the suit assigned his share in the decree to the other plaintiffs and the latter instituted a suit in the District Court of West Thanjavur on the judgment obtained in the Colombo Court. It was held that the judgment of the Colombo Court could not be said to be one not given on the merits of the case and that therefore the same was conclusive under Section 13, Civil Procedure Code. Miss. Padmini, representing Mr, Krishnan, learned Counsel for the respondent, would very much rely on this decision and contend that the facts in the above decision are on all fours with the facts of the present case and hence the principles laid down therein are clearly applicable to this case and the lower Court has correctly based its decision on it. Mr. Rajagopalan, learned Counsel for the appellant, contends that the Full Bench decision in Mohamed Kasim & Co. v. Seeni Pekir Bin Ahmed : AIR1927Mad265 , should be preferred to the one in Mohamed Moideen v. Chintamani Chettiar : AIR1929Mad469 which is only a judgment rendered by a Division Bench. In fact their Lordships of the Division Bench have made reference to the decision of the Full Bench and distinguished the same on facts. As pointed out supra, the facts of the former case disclose that it was a case of non-appearance of the defendant and the decree passed therein was on account of the failure to comply with the provisions of law. In the case on hand, as pointed out by me above, the defendants entered appearance, filed statements of objections and finally consented for a judgment which was entered in the presence of the proctors of the respective parties. Hence, I reject the submissions of Mr. Rajagopalan and accept the contention of Miss. Padmini that the decision of the Division Bench in Mohamed Mohideen v. Chintamani Chettiar : AIR1929Mad469 , is squarely applicable to the facts of the present case. In this context, I would like to refer to another decision in Satya Narain v. Balchand , wherein the defendants originally contested the suit and filed their written statements, but later on they decided to compromise the matter and the decree was passed on the basis of the compromise arrived at between the parties. It was observed in that case that such a decree must be held to be conclusive and cannot be held to be one not on the merits.

14. Finally I may refer to the important decision rendered by the Supreme Court in Viswanathan v. Abdul Wajid : [1963]3SCR22 , wherein their Lordships have discussed elaborately the position of law in India as regards the collusiveness of a foreign judgment in Indian Courts with reference to Section 13, Civil Procedure Code, and have observed as follows:

In considering whether a judgment of a foreign Court is conclusive, the Courts in India will not inquire whether conclusions recorded thereby are supported by the evidence or are otherwise correct, because the binding character of the judgment may be displaced only by establishing that the case falls within one or more of the six clauses of Section 13 and not otherwise.... The language of Section 13 of the Code of Civil Procedure, 1908, is explicit; a foreign judgment is made thereby conclusive between the parties as to any matter directly adjudicated and it is not predicated of the judgment that it must be delivered before the suit in which it is set up was instituted.... To be conclusive the judgment of the foreign court must have directly adjudicated upon a matter; the adjudication must be between the same parties and the foreign judgment must be of a Court of competent jurisdiction... The rule of conclusiveness of foreign judgments applies only to matters directly adjudicated upon. Manifestly, therefore, every issue heard and finally decided in a foreign Court is not conclusive between the parties. What is conclusive is the judgment....By Section 13 of the Civil Procedure Code, a foreign judgment is made conclusive as to any matter thereby directly adjudicated upon between the same parties. But it is the essence of a judgment of court that it must be obtained after due observance of the judicial process, i.e., a Court rendering the judgment must observe the minimum requirements of natural justice; it must be composed of impartial persons acting fairly, without bias, and in good faith. It must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case. A foreign judgment of a competent court is conclusive even if it proceeds on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are assured. Correctness of the judgment in law or on evidence is not predicated as a condition for recognition of its conclusiveness by the 'Municipal Court.

The quintessence of the principles laid down in the decisions referred to above is that a foreign judgment to be a valid cause of action for a suit upon it in India, must be final and conclusive in the Courts in which it has been passed and the Courts in India will not inquire whether the conclusions recorded thereby are supported by the evidence or are otherwise correct, because the binding character of the judgment may be displaced only by establishing that the case falls within one or more of the six. clauses of Section 13 or otherwise and that it must have been directly adjudicated upon a matter between the same parties, and that the conclusiveness does not include the reasons for the judgment given by the foreign Court and what is conclusive under Section 13 is the judgment, that is, the final adjudication and not the reasons. The true test for deciding whether a judgment has been given on the merits or not is to see whether it has been given as penalty for any conduct of the defendant or whether it is based on consideration of the truth or otherwise of the plaintiff's case. When a controversy raised in an action is the subject-matter of direct adjudication by the Court and the judgment and decree are entered by consent of the parties, the mere fact that the defendant was not present on the final day of recording the judgment, will not make the judgment one not on the merits, because a compromise decree, as the one in this case, should also be held to be one on merits as the consent of parties must be deemed to have taken the place of the evidence record in the case. Coming to the present case, in view of my above observation, I hold that the judgment entered in Case No. 7384 in the District Court of Nuwara Eliya Holden at Hatten (Ceylon) is a decision given on merits and therefore, has become conclusive within the meaning of Section 13, Civil Procedure Code.

15. I shall now pass on to the other two main contentions and examine whether the defendants at the time of the commencement of the suit either actually and voluntarily resided or carried on business or personally worked for gain at Sergudi Village so as to confer on the trial Court jurisdiction to entertain the suit. It seems that the plaintiff in this action mainly urged before the trial Court that the suit was maintainable since the defendants actually and voluntarily resided at Serugudi Village within the jurisdiction of the Court of the Subordinate Judge Tiruchirapalli (trial Court) at the time of the commencement of the trial. The Court below on the above contention held:

There are sufficient circumstances in the evidence to show that the defendants have their residence in Ceyloa for the purpose of employment and are permanent residents of Sergudi and, therefore, this Court (trial Court) has jurisdiction to entertain this suit.

Further it is seen from paragraph 8 of the judgment of the lower Court that an unsuccessful attempt was made by the plaintiff to show that the defendants, at any rate the first defendant, were/was also carrying on their/his business at Serugudi and hence on this ground too, the suit was maintainable. However as the above contention was stoutly resisted by the defendants contending that a business to procure labourers in India for the purpose of emigration to Ceylon is one prohibited by law of this land, the plaintiff seems to have abruptly dropped that contention without pursuing the same. This resulted in the trial Judge observing:

I, therefore, do not propose to give any finding on this aspect of the case.

Mr. S. Rajagopalan, the learned Counsel for the appellant, very much relying on two decisions of this Court, namely Raja Rathnam v. Muthuswami Kangani : (1958)1MLJ194 , and M.S.M. Buhari v. S.M. Buhari : AIR1971Mad363 , emphatically and forcibly argued that the evidence available in this case is very slender and inadequate to arrive at an irresistible conclusion that the defendants resided at Sergudi within the meaning of Section 20, Civil Procedure Code, and so the finding of the trial Court is unsustainable. In Raja Ratnam v. Muthuswami Kan1gani : (1958)1MLJ194 , the Division Bench ruled that the suit for recovery of money simpliciter due on a foreign judgment cannot be instituted in any Court merely on the ground that the defendant owns or is possessed of immoveable property within the jurisdiction of that particular Court, as the possession of such immovable property within the jurisdiction of that particular Court, does not give rise to the cause of action for the suit. Ismail, J. in M. S.M. Buhari v. S.M. Buhari : AIR1971Mad363 has elaborately discussed the scope of Section 20(a), Civil Procedure Code, and made the following observations with an illustration:

I am of the view that dwelling or residence contemplated by the statute must be more or less of a permanent character and it must be of such a nature as to show that a Court in which the defendant is sued is his natural forum. When the statute used the words 'actually and voluntarily resides' it intended to eliminate a constructive or temporary residence or a compulsory residence with reference to a particular place. On the other hand, if a person has been continuously residing in a particular place, his temporary absence from that place will not take away the case out of the scope of Section 20(a) of the Code. It may very well happen as it occurs in many cases that a person carrying on business in the City of Madras or any other profession in the City living in his own house, has also a house owned by him in a place like Kodaikanal or Ootacamund to which house he regularly goes every year during summer and resides there. From this fact alone, can it be said that he has two permanent places of residence, one in the City of Madras and the other in Kodaikanal or Ootacamund as the case may be I am of the view that the fact that a particular defendant has made a house available to him for occupation whenever he goes to that place for stay for a certain period during the course of a year will not make him a permanent resident of that place.

On the above illustration, he finally held:

A person may be originally belonging to a particular place and may hold landed property there and he may be making enquiries about the properties and he may be deriving income therefrom. This, however does not mean that he is actually and voluntarily residing there, since residence is not identical with ownership, but it means where a person eats, drinks and sleeps or where his family or his servants eat, drink and sleep.

Miss. Padmini made a feeble attempt that the principle enunciated in the above two decisions cannot be made applicable to the facts of the case on hand, as the circumstances and the evidence in the present case are entirely different from the facts of those cited two decisions. She draws the attention of this Court to certain portions of the evidence of P. Ws. No. 1 and 2 who have deposed that the defendants were permanent residents of Sergudi Village owning ancestral properties and also the evidence of D. W. 2 wherein he has admitted that before the execution of the sale deed, defendants would come to Sergudi once in a year and stay in the house in question. Mr. Rajagopal contesting the above argument stated that evidence of P. Ws. 1 and 2 is not at all worthy of credence as it is highly tainted with interestedness and is in the nature of self-serving evidence and that there is absolutely no evidence, not even a suggestion to D. W. 1, that the defendants actually and voluntarily resided at Sergudi at the commencement of the trial of the suit. According to him, the evidence of D. Ws. 1 and 2 are reliable and convincing to show that the defendants never resided at Sergudi as contemplated under Section 20(a) of the Civil Procedure Code. On a meticulous examination of the evidence of P. Ws. 1 and 2 and D. Ws. 1 and 2, I am not convinced that there is satisfactory and reliable evidence to conclude that at the time of the commencement of the suit, the defendants actually and voluntarily resided at Serugudi in conformity with the principles laid down in the above two decisions. It is significant to note that not even a suggestion has been made to D. W. 1 that he was a resident of Sergudi at the time of the commencement of the suit. At this stage Mr. Krishnan, the learned Counsel for the respondents, would state that the question of permanent or temporary residence, does not arise in the present case and hence he does not wish to advance any more argument on this point, as he is of the view that it is not necessary for him to go into that question. But Mr. Krishnan would attempt to sustain the findings of the Court below that the Subordinate Judge, Tiruchirapalli, had jurisdiction to entertain the suit on the ground that the first defendant was carrying on his business or working for gain at Sergudi at the time of the commencement of the snit. To substantiate the above contention, he took me through the evidence of P.W. 1 wherein p. W. No. 1, the plaintiff, has deposed that the defendants were acting as Head Kanganis at the time of the suit enlisting men for tea estate at Ceylon where they had their permanent profession and that the defendants have no other business in India. Then he pointed out the following pieces of evidence of D.W. I on which he sought to place much reliance in support of his contention:

I am a permanent resident of Ceylon. I am a citizen of Ceylon by registration. I was employed as Head Kangani in the above estate, for 40 years and retired in 1967 December.... As Head Kangani, my work was to gather labourers from Sergudi village and export (immigrate) to Ceylon to work in tea estate, I was paid remuneration for the work by the estate. Only in this way I was earning.

On the above piece of evidence, Mr. Krishnan would vehemently urge that the first defendant was carrying on a business and personally working for gain at the time of the commencement of the suit within the local limits of the Subordinate Judge of Tiruchirappalli and, therefore, the suit was maintainable before the trial Judge. At the risk of repetition I may state that this plea once raised before the trial Judge has not been pursued any further which necessitsted the learned Judge not to traverse on this ground and to give a finding on this aspect of the case. As the learned Counsel now pressed this point to sustain his plea, I would like to examine this contention notwithstanding the fact that the counsel before the lower Court abruptly dropped that contention.

16. Needless to say that a person is said to 'carry on business' when he controls or directs it or has a voice in its control or a share in the gain or loss. The test of 'carrying on business' is not the continuity or the intermittency of the business, but the fact of owning interest in the business and receiving profits. In order to determine whether a person is carrying on 'business' it must be first ascertained what the particular trade or occupation is and then it must be seen whether the facts proved amount to carrying on that particular business within the jurisdiction. Though ordinarily speaking, business is synonymous with the word 'trade', the former is a wider term in its scope than the latter and it includes every trade. The expression 'carrying on business' as used in ordinary legal parlance will necessarily involve the idea of successive acts. The word 'business' relates to some commercial or gainful activities. The term 'carry on' implies a continuous operation so that a person is said to carry on a trade or business only when he continues that trade or business for some length of time. The term 'carry on business' does not mean the performance of a single disconnect-ed business act, but means conducting, prosecuting and continuing business by performing progressively all the acts normally incidental thereto. Hence the true meaning of the expression 'carrying on business' would be that a person should have been carrying on the said business continuously or successively or regularly at least with such frequency that he could be said to be pursuing the said system or habitually following the particular occupation in the place other than ;he one permitted by the authorities, because the last expression imparts the idea of continuity in operation. As may be seen from the above discussion, the word 'business' in its broad sense in commonly employed in connection with an occupation for livelihood or profit, but it is not limited to such pursuits, for, it has been said that the definition of 'business' by the Lexicographers is sufficiently broad and comprehensive to embrace every employment or occupation, and all matters that engaged a person's attention or require his care without the leasts regard to trade or business, and hence in this sense and dependent, of course upon the circumstances of the context, it has been held that the term does not necessarily mean in affair for gain or an occupation for profit, It is not confined to an undertaking for money profit, but may embrace any benefit which may enure to the owner. But the said word 'business' in a narrower or restricted sense refers to commercial business in which one engages for the purpose of his livelihood or profit and the like and hence it is applicable to any particular employment, occupation or profession followed as a means of his livelihood. It implies a regular and legal employment pursued for profit and with a view to livelihood or some gain. While the general import of the expression in its broad sense is such as stated above, the phrase 'carrying on business' is used in Section 20(a), Civil Procedure Code, in its narrower or restricted case so as to refer only to commercial business, refer Govindarajulu Naidu v. Secretary of State : (1927)53MLJ355 , Ellappa v. Sivasubramanian : (1936)71MLJ607 , R.J. Wyllie and Company v. Secretary of State A.I.R. 1930 Lah. 818.

17. Whether a person carries on business at a particular place or not is a question of fact. To constitute 'carrying on business' at a particular place it is conceived that the essential part of the business must take place there. The 'business' one carries must be of a character giving rise to a cause of action which is enforceable in a Court of law, In other words, the business must be one recognised by law of this land. If there is any contract of a business entered into in a foreign country and no part of the cause of action arises within the jurisdiction of any Court in India, it cannot be said that the person is carrying on business within the local jurisdiction of a Court in India. In other words, the Court within whose local limits a business is carried on should have jurisdiction over a matter, if the cause of action relating to the business arises within its local limits or jurisdiction. Coming to the instant case, if we carefully scrutinise the evidence of P. W. No. 1 and D. W. No. I on which Mr. Krishnaa relies in support of his contention in the light of the above principle we find that there is not even an iota of evidence as to which part of the country, that is to say whether in India or in Ceylon the first defendant entered into a contract to migrate the labourers from India to Ceylon. The business alleged to have been carried by the first defendant-namely procuring labourers, presumably unskilled labourers, and migrating them to Ceylon is not proved to have been carried on in compliance with the provisions of the Immigration Act, 1922(Central Act VII of 1922) which Act provides penal punishment to one who emigrates or attempts to emigrate or makes or attempts to make any agreement with any person purporting to bind that person or any other person to emigrate, except in conformity with the provisions of the said Act or the rules made thereunder. As the evidence stands in this case, it would imply that the first dependent used to procure and enlist the workers and migrate them out of India. But in the absence of any evidence indicating that the first defendant carried on such business with any legal sanctity or in conformity with the provisions of Act VII of 1922, it has to be held that such business was carried on contrary to and in violation of the law of this land, that the said business was illegal and opposed to public policy as the same has been prohibited and forbidden by law. Further, no part of the business can be said to have arisen in this country so as to give rise to any cause of action within the jurisdiction of any Court in India as there is no evidence that the first defendant carried on the alleged 'business' with the sanction of law.

18. Now, I shall pass on to the next question as to whether there is any evidence worth mentioning to hold that the defendants, at any rate the first defendant personally worked for gain within the local jurisdiction of the trial Court. It is sufficient to give a Court jurisdiction if the defendant personally works for gain within its local limits of jurisdiction. But to constitute 'work there must be some physical or mental effort. In view of my observations that the first defendant did not carry on business in India for his profit or livelihood, it cannot be said that the first defendant personally worked for gain by engaging himself in the occupation of that business.

19. Admittedly the defendants are citizens of Ceylon and they were permanently residing in Ceylon. P. W. 1 states that the defendants are residing at Ragalla estate, Halgramoya and that they used to come to India only on visa and passport. It is significant to note that P. W. 1 himself admits that the defendants have no business in India. P. W. No. 2 has deposed that the defendants' ancestors and thereafter the defendants lived in Ceylon and that he did not know the terms of their service and the purpose of their visits to India. The first defendant as D. W. 1 would swear that he and his wife, the second defendant, are permanent residents of Ceylon having their citizenship in Ceylon by registration. He was employed as Head Kangani at the estate in Ceylon for 40 years and retired from service in 1967 December. They continued to reside in Ceylon even after his (first defendant's) retirement. He could further state that he used to come to India only on passport and that even the suit summons in the present action was served on him only while he was in Ceylon, as evidenced by Exhibits B-6 and B-7. the postal acknowledgments for service of the suit summons. He emphatically denied that he used to gather labourers from Sergudi Village and migrate them to Ceylon to work in the tea estate there. D. W. 2 who is none other than the Panchayat President of the said village deposed that both defendants did not come to Sergudi at any time within the last three years, and that they used to come to Sergudi before that once in a year. The first defendant has marked the original of his passport Exhibit B. 1 for the purpose of showing that be is a citizen of Ceylon. The original passport is not available before this Court and only a certified copy of the entries made in the first page of the passport is available. It is not clear from the certified copy as to whether the first defendant had been granted a visa to enter into India at or about the time of the commencement of the suit. Unfortunately no question has been put to D. W. 1 with reference to the visa entries in his passport on this aspect. If really the passport reveals that the first defendant used to enter into India frequently and that he was in India at the time of the commencement of the suit, definitely the plaintiff's counsel would not have failed to elicit such answers. Equally the defendants' counsel also has not taken any evidence to enlighten the Court by making the visa entries which would be a conclusive, clinching and unassailable evidence. However, the Court has to draw an inference in the absence of such evidence that the first defendant had not been in India at the time of the commencement of the suit, especially when he is admitted to be a citizen of Ceylon. After going through the documentary and oral evidence, I am still unable to understand the reasoning of the Court below which has come to the conclusion that 'the defendants have a temporary residence in Ceylon and a permanent residence in Sergudi Village'. Notwithstanding the above finding, the Court below has observed that the defendants were having some business for earning only at Ceylon. Thus, the necessary ingredients, namely, the defendants were at Sergudi at the time of the commencement of the suit and the defendants or any of them actualy the and voluntarily resided or carried on business or personally worked for gain at Sergudi within the local limits of the jurisdiction of the trial Court are completely lacking. Above all, from the pleading I am constrained to observe that the learned Counsel Mr. Krishnan is not at all justified in raising the plea of jurisdiction on the ground that the defendants carried on their business or worked for gain at Sergudi, since there is absolutely no plea in the plaint that the Court has got jurisdiction on the above grounds. The only ground urged in the plaint (vide paragraph 11 of the plaint) is that the defendants have their permanent dwelling at Sergudi which plea, the counsel himself would state, would not arise, in view of the peculiar facts and circumstances of the case. From the foregoing discussions, I hold without any reservation that the Court of Subordinate Judge, Tiruchirapalli, has no territorial jurisdiction to entertain and try the suit, and hence, it is not maintainable before the trial Court.

20. In the plaint, the plaintiff has pleaded that the cause of action for the suit arose on the execution of the promissory note dated 1st October, 1962, and on the fact that immovable properties of the defendants ate situated within the local limits of the trial Court. Though no argument was advanced, I feel that a finding on this plea also will be appropriate, The defendants would contend that they never owned or were possessed of the property at the time of the institution of the suit, because the property, namely the house in Sergudi village along with its moveables, had already been said to Perianna Pillai even on 17th June, 1966, that is to say that the sale In favour of Perianna Pillai was much earlier to the filing of the present suit on 22nd June, 1967. The case of the plaintiff is that only subsequent to the service of summons and injunction notice on 16th April, 1966, the defendants have transferred their aforesaid house and premises in Sergudi village by a sham and nominal paper transaction in favour of Perianna Pillai without any real consideration and with a view to defeat the plaintiff's legitimate claim. Except for the bald allegation in the plaint, the plaintiff has not adduced any evidence to substantiate the same. But in the course of cross-examination, P. W. 1 would admit that he did not know whether the defendants have sold the house to Perianna Pillai and whether Perianna Pillai is enjoying that house. D. W. 2, the Panchayat Board, President, states that after receipt of Exhibit B. 10, a notice issued regarding the transfer of tax receipt, he changed the registry in the name of Perianna Pillai who is now paying the house tax. He files Exhibits B-11 and B-12, the two counter foils to vouchsafe the grant of receipts to Perianna Pillai. Indisputably the defendants do not own any other house at Sergudi except the one sold to Perianna Pillai. The only circumstance that stands against the defendants is that they sold the property after they were served with the notice of injunction. The defendants in their written statement would state that the sale of the house was for a proper and valuable consideration which was utilised only for satisfying the decree obtained by the present plaintiff against the defendants in case No. 7318. Exhibit A-3, the agreement entered into between the present plaintiff and the defendants, shows that the parties of the second (Sic. first part, namely the defendants) will assign and transfer the house property and the furnitures therein to the party of the second part (the present plaintiff) in full and final settlement of the decree in case No. 7318 plus for a sum of Rs. 6,000. The plaint before the District Court at Hatton was filed on the 11th day of April, 1976, that is, after the execution of Exhibit A. 3. The first defendant in his evidence stated that he sold the property under the agreement Exhibit B. 3 in favour of Perianna Pillai as he had no other means to pay the decree in case No. 7318 and as he had borrowed a sum of Rs. 25,000 on 29th March, 1966 for the purpose of depositing the amount in Court. As to what transpired between the parties in Ceylon and as to what prompted the defendants to sell the property in favour of Perianna Pillai despite the execution of Exhibit A. 3 and the fact of service of notice of injunction on him, we do not have any sufficient evidence. The sale deed Exhibit B. 5 in favour of Perianna Pillai shows that the property was sold on receipt of a sum of Rs 20,000. From the only circumstance that the property was sold to Perianna Pillai after the service of notice of injunction from the Court of Ceylon, no adverse inference can be drawn that Exhibit B. 5 is a sham and nominal document and that the defendants in reality owned the property at the time of the filing of the suit. The Division Bench of this Court in Raja Ratnam v. Muthuswami Kangani : (1958)1MLJ194 the facts of which are very similar as far this aspect of the case is concerned, has observed that a suit for recovery of money simpliciter due on a foreign judgment cannot be instituted in any Court on the ground that the defendants owned or possessed of immoveable property within the jurisdiction of the particular Court. As the Division Bench observed in that case, admittedly the promissory note which led to cause of action in this suit was not executed in India and that it was nobody's case that the money was payable at Tiruchirapalli or within the local limits of the Subordinate Judge's Court, Tiruchirapalli. The house sold under Exhibit B-5 is not proved to have been built by the first defendant, even though the learned trial Judge would observe wrongly that the first defendant has built the house at Sergudi at a huge cost. The trial Judge dismissed the plea of this cause of action on the ground that he has coma already to the conclusion that the defendants are permanent residents of Sergudi Village which has given the plaintiff the cause of action to file the suit against the defendants and that, therefore, the question of sale of the property does not affect the finding that the trial Court has jurisdiction to entertain the suit. For the reasons stated above, following the decision of the Division Bench in Raja Ratnam v. Muthuswami Kangani : (1958)1MLJ194 , I hold that no part of the cause of action has arisen within the local limits of the trial Court so as to enable it to entertain the suit either on the ground of execution of the promissory note or on the ground of the situation of the houes at Sergudi. De hors this finding, I have already come to the conclusion that the lower Court has no jurisdiction to entertain and try the suit; the unsubstantiated plea that the sale was only sham and nominal, may not loom large.

21. In the result, the judgment and decree of the Court below are set aside and the appeal will stand allowed. In the circumstances of the case, there will be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //