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Derby Mcintyre and Co. Ltd. Vs. Mitter and Co. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in163Ind.Cas.931
AppellantDerby Mcintyre and Co. Ltd.
RespondentMitter and Co.
Cases ReferredKeymer v. ViswanathamReddi
Excerpt:
civil procedure code (act v of 1908), section 13(b) - foreign judgment--suit on--judgment of king's bench division in london in summary procedure in default of defendant's appearance--whether judgment on merits--suit, if can be brought on it in india. - .....met by a legal defence of a technical character which i am now about to decide; and also with a defence on the merits.5. now, the technical defence set up is one under section 13(6) of the code of civil procedure. section 13 deals with the principle of res judicata in relation to a foreign judgment; but whilst giving general effect to the principle! the section contains six provisos in the form of exceptions. it is on the second proviso to the section that the defendants here rely.section 13(b) runs as follows:a foreign judgment shall be conclusive &'s to any matter thereby directly adjudicated upon between the same parties and/or between the parties under whom they or any of them claim under the tame title:(b) except where it has not been given on the merits of the case.6. by an.....
Judgment:

Cunliffe, J.

1. This case comes beiore me on a preliminary legal issue.

2. The plaintiffs obtained judgment against the defendants in the King's Bench Division in London. Their claim was for a liquidated amount, comprising money rent, disbursements, commission and so on, in relation to a cargo of mica shipped to the United Kingdom by the defendants who are an Indian firm carrying on business in Calcutta.

3. The plaintiffs first endeavoured to serve the defendants in London through a representative; but they were unable to do so; and eventually, with the leave of the Court, they served the writ out of the jurisdiction in Calcutta.

4. The defendants, however, put in no appearance to the action and consequently the plaintiffs, employing the expeditious procedure which is common to so many Courts in the British. Empire, signed judgment against the defendants by default No evidence seems to have been called. That is not unusual; and it-is not disputed that the judgment thus obtained was in every way regular under the rules of the Supreme Court. After this judgment had been obtained, the plaintiffs, wishing to enforce their decree and to take advantage of the principles of res judicata, brought a suit on the English judgment before me here. Alternatively, they again sued on the facts. They were met by a legal defence of a technical character which I am now about to decide; and also with a defence on the merits.

5. Now, the technical defence set up is one under Section 13(6) of the Code of Civil Procedure. Section 13 deals with the principle of res judicata in relation to a foreign judgment; but whilst giving general effect to the principle! the section contains six provisos in the form of exceptions. It is on the second proviso to the section that the defendants here rely.

Section 13(b) runs as follows:

A foreign judgment shall be conclusive &'S to any matter thereby directly adjudicated upon between the same parties and/or between the parties under whom they or any of them claim under the tame title:

(b) except where it has not been given on the merits of the case.

6. By an earlier section of the Code, Section 2, it is laid down that a 'foreign judgment' corn-prises the judgment of an English Court.

7. Section 13(6) has been the subject of considerable judicial interpretation. The leading case in this regard is the decision of the Privy Council in Keymer v. Viswanathan Reddi 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.). That was an appeal from the Madras High Court where it was sought to v give effect to an English judgment obtained in similar, but not quite similar circumstances, to those prevailing here. The defendant in England there was an Indian subject who out in a defence to claim brought against him; but after he put in the defence the plaintiffs obtained permission of the Court to administer interrogatories to him. For some Reason or another be failed to comply with the direction of the Court in relation to these interrogatories and following the usual procedure, by reason of this disobedience Lis defence was struck out, and the plaintiffs obtained judgment against him by default. Lord Buckmaster in delivering the judgment of the Board said this:

The whole question in the present appeal is whether, in the circumstances narrated, judgment was given on May 5, 1913, between the parties on the merits of the case. Now, if the merits of the case are examined, there would appear to be, first, a denial that there was a partnership between the defendant and the firm with whom the plaintiff had entered into the arrangement; secondly, a denial that the arrangement had been made; and thirdly, and a more general denial, that even if the arrangement had been made, the circumstances upon which the plaintiff alleged that his right to the money arose had never transpired. No single one of these matters was ever considered or was the subject of adjudication at all. In point of fact what happened was that, because the defendant refused to answer the interrogatories, which had been submitted to him, the merits of the case were never investigated and his defence was struck out. He was treated as though he had not defended, and judgment was given upon that footing.

Lord Buckmaster added:

It appears to their Lordships that no sach decision as that can be regarded as a decision given on the merits of the case within the meaning of Section 13, eub-section (6).

8. There is another decision of the Privy Council which, by implication at any rate, adopts the same view, the case of Oppenheim and Co. v. Mahommed Haneef 45 M. 496 : 74 Ind. Cas. 616 : 49 I.A. 174 : 26 C.W.N. 642 : 16 L.W. 33 : 30 M.L.T. 291 : 4 U.P.L.R. (P.C.) 36 : A.I.R. 1922 P.C. 120 : (1922) M.W.N. 396 : 43 M.L.J. 422 : 24 Bom. L.R. 1245 : 36 C.L.J. 444 (P.C.). The case there was again an attempt to obtain judgment in Madras on a judgment given in England by default on an arbitration. The trial Judge, Coutts-Trotter, J., who afterwards became Chief Justice of Madras, felt himself bound by the Keymer's case 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.) and said so. His decision was not challenged before the Privy Council, but the judicial attitude he adopted is mentioned and approved of at p. 501. Lord Cave there said:

The suit was heard by Coutts-Trotter, J., who held that, having regard to the decision of the Hoard, in Keymer v. Viswanathan Reddi 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.), the action 'upon the judgment could not be maintained, as the judgment had been entered in default of appearance and the action had not been tried upon its merits, and that the claim under the contract was statute-barred. This part of the judgment has not been challenged and need not be further referred to.

9. Later on, however, in the High Court of Madras, a Bench of two Judges in the case of Janoo Hassan Salt v. Muhammad Chuthu : AIR1925Mad155 , endeavoured to distinguish Kaymer v. Viswanathan Reddi 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.). They were considering an attempt to enforcea judgment in Madras based upon summary procedure in Ceylon. They came to the conclusion that a presumption must be drawn in a case where judgment goes by default on it being shown the defendant had no defence whatever. The presumption, they thought must be that, as no defence was put on the file, there was in fact no defence to the action, and I think that they also must have assumed that the presumption in law arises in such cases that the Court has acted in a judicial maimer in giving effect to the plaintiff's claim. That distinction, however, did not commend itself to the Full Bench of the Madras High Court in R.E. Muhammad Kassim and Co. v. Seeni Pakir 50 M. 261 : 100 Ind. Cas. 555 : 52 M.L.J. 240 : 25 L.W. 307 : A.I.R. 1927 Mad. 265 (F.B.), where the Court was considering the effect of the summary procedure in Penang Coutts-Trotter, J., by then Chief Justice, dealt with, the matter in this way. He said:

It seems to me impossible to argue that that is not clearly within the decision and even the wording of the Privy Council in Keymer v. Viswanathan Reddi 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.), it was argued and very likely correctly argued that the English Law was different. The answer to that is, we are bound by the statute on which the decision in Keymer's case (1), was based.

That statutory provision is Section 13(b) of the Code of Civil Procedure under which an exception to the conclusiveness of a foreign judgment in a British Indian Court is where it has not been given on the merits of the case. As I understand Mr. Alladi Krishna-swami Ayyar's arguments, he says that it is not like the case of the defendant's defence being struck out for not answering interrogatories or being out of time or anything of the kind; for that may be held not to be a defence on the merits because 'ex-hypothesis the portion is the defendant was precluded from going into the alleged merits which he had set up, and he says it is quite different where the defendant does not appear at all because that is a clear intimation by him that he admits the validity of the plaintiff's claim and that is just as good as if the plaintiff has actually proved it by evidence. I think that the decision of their Lordships of the Privy Council impliedly excludes any such distinction and I regret to say that I cannot agree with the attempt made by two learned Judges of this Court to draw this distinction in Janoo Hassan Sait v. Mohamad Chuthu : AIR1925Mad155 , and I think that that case must be regarded as no longer law.

10. This question was also considered in a Rangoon casei Abdul Rahiman v. Mohammad All 6 R. 552 : 116 Ind. Cas. 465 : A.I.R. 1928 Rang. 319, where Chari, J. followed the Fall Bench Madras view and observed:

It seems to me that a decision on the merits involves the application of the mind of, the Court to the truth or falsity of the plaintiff's case and therefore though a judgment passed after a judicial consideration of the matter by taking evidence may be a decision on the merits, even though passed ex parte., a decision passed without evidence of any kind cannot be held to be a decision on the merits.

11. As far as I have been able to ascertain, and as far as Counsel in the case have been able to tell me, there are no decisions in relation to this important question in our own Court but the minds of Judges in other Courts in India apart from Madras and Rangoon, have '.been also applied to the problem. Curiously enough, the overruled Full Bench decision in Jannoo Hassan's case : AIR1925Mad155 , has been the key-note of the decisions in Upper India and also one decision in Bombay.

12. I commence with the consideration of the question contained 'in the case of Mehr Singh v. Ishar Singh 14 Lah. 58 : 140 Ind. Cas. 82 : Ind. Rul. (1932) Lah. 689 : A.I.R. 1932 Lah. 649 : 34 P.L.R. 311. That is a very recent decision, where Jai Lai, J., held that in a suit on a foreign judgment, where it was found that the defendant had appeared to defend the suit and was represented by Counsel and in his defence produced a receipt which he alleged extinguished the liability under the I plaintiff's claim, and where the case was adjourned for, evidence of the parties, and the plaintiff's witnesses were heard, but on the adjourned hearing of the case the defendant absented himself, though his Counsel were present, and where the Court confined its judgment to the words 'judgment for the plaintiff as prayed,' that this was a judgment on the merits. The learned Judge expressed the view that the test of whether the judgment on the merits was-within the meaning of Section 13(6) is whether the judgment has been given as a penalty for any conduct by the defendant, or whether it is based on a consideration of the truth or otherwise of the plaintiff's case. He also held that, in the absence of a clear 'indication that a judgment was given by way of penalty, it must be assumed that the Court considered that the plaintiff had proved his claim on the merits. Oddly enough, as I read the judgment, which it may be mentioned was a successful attempt to enforce a judgment of the Court in British East Africa at Nairobi, Janoo Hassan's case : AIR1925Mad155 is not mentioned but it will be seen that the principle in that case is accepted. Janoo Hassan's case : AIR1925Mad155 , however, is specifically relied upon in another recent case decided in Bombay. That was a decision of Baker, J., Ephrayim v. Turner Morrison and Co. 32 Bom. L.R. 1178 : 128 Ind. Cas. 609 : A.I.R. 1930 Bom. 511. The facts there were peculiar. It was an attempt in Bombay to realise judgment obtained in Iraq, and at the place of original venue, which was Basra, apparently very little was done by the defendant to bring his case before the Court, although the defendant in Basra had employed professional assistance and his attorney had been given a special power. The learned Judge in referring to Keymer's case 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.), sets out the principle decided there and then he begins the consideration of Jannoo Hassan's case : AIR1925Mad155 , and he follows the ratio decidendi of the decision by saying this:

It was further held that ordinarily a judgment delivered ex parte is deemed to be on the merits and it is only when a defence has been raised, and for some reason or another, lias not been adjudicated upon, that the decision can be said to be not upon the merits, and that the ex parte judgment in that case must be deemed to be one passed on the merits, as the defendant did not at all appear in the case. This is practically on all fours with the present case. In the present case Turner Morrison and Co., were served while they were actually residents in Basra. Although at the time the suit came on for hearing, Mr. Gillespie was not resident in Basra, the Pleader Menasse who held a power of attorney from the firm, and was retained to appear in the case, was in Basra. He represented the defendants in fact. Then he did not receive any instructions to defend the case on the merits ' does not, in my opinion, prevent the decision from being one on the merits. Applying the test that it is only when a defence has been raised and for some reason or another has not been adjudicated upon, that the decision can be said to be not on the merits. It is clear that the present case where no defence was laised, but merely an adjournment was asked for, and the judgment proceeded on the evidence of the plaintiff and the papers in the former suit, cannot be said to be a case in which the judgment is not one on the merits.

13. Apart from Lahore and Bombay, the High Court of Allahabad has also decided in several cases that in certain circumstances a judgment by default is a judgment on the merits. As example of this line of decision is the case of Ishri Prasad v. Sri Earn : AIR1927All50 . Judgment there were sought to be enforced from a judgment in the Court of Native State of Rampore. The following is a passage in the judgment:

The defendant, notwithstanding due service of summons, has not contested the suit. The document is registered. The failure of the defendant to contest the suit amounts to an admission of the plaintiff's claim. Accordingly the plaintiffs suit is decreed.

14. It was held that the judgment in tie Rampore Court was a judgment, on the merits of the case within the meaning of Section 13 (b) and that a certified copy of the judgment of the Rampore Court produced in a Court of British India was to be presumed to have been pronounced by a Court of competent jurisdiction.

15. The case seems to represent the most extreme elongation of the principle laid down in the over-ruled Jannoo's case : AIR1925Mad155 .

16. Endeavouring to deduce the principle contained in this body of decisions it seems to me that they deal with three different categories or classes of cases. Firstly, there is the category . in which a defence is put in, but is struck out and judgment is artificially given by default without any judicial consideration of the plaintiff's evidence at all. Secondly, there is the class of case where no defence has ever been on the file and again there is no consideration of the plaintiffs' evidence by the Court, judgment being given by default under summary procedure. Thirdly, we have the position in which there is no defence again, but where the plaintiff's evidence is considered in some manner or another. The case before me now is clearly within the second category and in my opinion is also within the ambit of Keymer v. Viswanathan Reddi 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.). I think it would be doing violence to the language of Section 13(b), if I held otherwise. It may be noted too that in Keymer v. ViswanathamReddi 40 M. 112 : 44 I.A. 6 : 38 Ind. Cas. 683 : 15 A.L.J. 92 : 21 M.L.T. 78 : 32 M.L.J. 35 : 5 L.W. 342 : 19 Bom. L.R. 206 : 21 C.W.N. 358 : 25 C.L.J. 233 : 10 Bur. L.T. 175 : A.I.R. 1916 P.C. 121 (P.C.), Lord Buckmaster' towards the end. of his judgment, mentions a question put to Lord Finlay, the leading Counsel for the appellant in relation to the exact significance of Sub-section (b). This question appears in the penultimate passage of the Board's judgment. The passage runs:

It is quite plain that that sub-section must refer to some general class of case, and Sir Robert was asked to explain to what class of case in his view it did refer. In answer he pointed out to their Lordships that it would refer to a case where judgment had been given upon the question of the Statute of Limitation, and he may be well bounded in that view. But there must be other matters to which the sub-section' refers, and in their Lordships' view it refers to those cases where, for one reason or another, the controversy raised in the action has not, in fact, been the subject of direct adjudication by the Court.

17. Had I been conducting the case in the Privy Council and a similar question had' been put to me, I venture to think that I should have given a different answer. The very form of the question shows that in the highest Judicial Tribunal of the Empire, they do, at times, make enquiries into the intentions and objects of the legislature where there is doubt and a difficulty in construing the operation and meaning of a particular statute. If the query had been put to me, I should have said that, in my view primarily, this sub-section Was not meant to apply to British Courts at all. I should have argued that it was a subsection of a special nature deliberately inserted as a proviso to the ordinary rule of res judicata in. the Code, tor the purpose of protecting persons in India from unfair and unmeritorious judgments of Courts outside the British Empire where procedure and principles were followed in no way compatible with the idea of British justice. Owing to the language of Section 2, the expression ''foreign Court' has been laid down to incorporate all Courts functioning in various parts of the British Empire outside India, administering the same lines of jurisprudence and in the main, the same lines of procedure and unfortunately the provisions of the two sections must be read together.

18. The position in my opinion is a very unfortunate one, for this reason, that it enables a lawyer to give advice to debtors situated as these debtors were something on this wise. The advisor may now say:

If your foreign creditor sues you, in the ordinary form which is encouraged in British Courts by special, endorsement of the writ for a liquidated amount, take care not to appear, because, if you do not appear, you can defeat or at any rate delay his Judgment by relying on Section 13, Sub-section (6) of the Code of Civil Procedure; when he sues you in an Indian Court, you will be able to force him back on his alternative right of suing you all over again on the facts;

and it seems to me there is no escape from that conclusion.

19. Another important point to note in this connection is that the British Legislature has recently passed a useful statute, known as the Foreign Judgments Reciprocal Enforcement Act of 1933. By that Act the mere registration of a foreign judgment, delivered in a country which has entered into an agreement with His Majesty's Government, can be sued upon in the Supreme Court in England. Conversely it has been arranged in the enactment that British judgments can, on' a mutual basis, be enforced by registration in foreign Courts. The Statute in question contains a schedule which sets out the various countries which have agreed to co-operate in this system, so far as the British Empire is concerned, the countries in agreement have been notified by means of Orders in Council. India, however, does not appear in the Schedule and unless the Code of Civil Procedure in this particular regard is drastically amended, I do no see how she could possibly appear in the list as the basis of the whole arrangement is reciprocity.

20. For the reasons which I have set out, therefore, I decide, with reluctance, in favour of the defendants on this technical point. The plaintiffs will now be thrown back on their alternative claim on the merits. They will be forced to prove before me, what they were not required to prove in London, owing to the defendants' default and the defendants are in the enviable position of being able to take advantage of their own default by reason of the peculiar provisions of the Code of Civil Procedure.

I shall make no order as to costs.


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