Delhi High Court

Emirates Bank International Pjsc vs Sh. Vijay Talwar on 6 November, 2009

Author: Sunil Gaur

*                     HIGH COURT OF DELHI: NEW DELHI

                 Judgment Reserved on: October 26, 2009

           Judgment Pronounced on: November 06, 2009

+                          RFA (OS) 59 of 2008

Emirates Bank International PJSC                    ...    Appellant
                 Through:    Mr. Rajiv Nayyar, Senior Advocate, with
                             Mr. Rishi Agrawala, Advocate.

                                   versus

Sh. Vijay Talwar                                        ...    Respondent
                      Through:   Mr. Chetan Sharma, Senior Advocate,
                                 with Ms. Ramni Taneja and Mr. Aashish
                                 Gupta, Advocates.

CORAM:
HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MR. JUSTICE SUNIL GAUR

1.        Whether the Reporters of local papers may
          be allowed to see the judgment?

2.        To be referred to Reporter or not?

3.        Whether the judgment should be reported
          in the Digest?

SUNIL GAUR, J.

1. Refusal to enforce foreign decree and judgment is under

challenge in this Appeal. Appellant's suit for recovery of UAE DHS

1,813,801.74 has been held to be not maintainable by the learned

Single Judge, who has invoked Order VII Rule 11 of the Code of Civil

Procedure at the instance of Respondent herein.

2. Impugned Order of May 14, 2008, takes note of the factual

matrix of this case, in the following words:-

" 3. On 30th November, 1998, Dubai Court of First Instance passed a judgment and decreed the suit of the

RFA (OS) 59 of 2008 Page 1 plaintiff against Marmo Company LLC and the defendant jointly, to pay to the plaintiff Bank a sum of UAE DHS 16,44,365.34 along with interest of 10.25% p.a. from the due date upto the date of full payment. The Court also confirmed the validity of the mortgage made over the company‟s assets dated 25th May, 1997 and the attachment No. 1950/98. It is submitted that the decree was passed by the Dubai Court of First Instance on the merits of the case after considering the documents and the pleadings. It is also stated that the defendant‟s attorney was notified of the case but the defendant‟s attorney did not attend the Court. After passing of the judgment and decree, the plaintiff Bank initiated execution proceedings and realized an amount of AED 305,830.57 on 3rd July, 2000 by the sale of the assets of Marmo Company LLC. However, a sum of UAE DHS 1,813,801.74 was still outstanding as on 27th November, 2001.

4. The plaintiff contended that it filed present suit on the basis of judgment and decree passed by the Dubai Court of First Instance for the recovery of remaining amount which could not be recovered despite sale of the mortgaged assets of the Marmo Company LLC and because the decree remained unsatisfied on account of absconding of the defendant from Dubai without payment of the dues, invoking the personal guarantee dated 7th March, 1995 executed by the defendant in favour of the plaintiff Bank. It is stated that the plaintiff representative in India Mr. Sunil Gulati had during September/ October 2001 spoken to the defendant on telephone. The defendant had offered to pay and settle the claim of the plaintiff at a ridiculously low amount, which was not agreeable to the plaintiff. Hence, this suit."

RFA (OS) 59 of 2008 Page 2

3. The suit of the Appellant was resisted by the Respondent by

filing an application under Order VII Rule 11 (d) of the CPC, being

barred by law i.e. by the provision of Section 13 of the Code of Civil

Procedure, 1908, which spells out six eventualities when foreign

judgment is not conclusive. Out of these six, i.e. (a) to (f) of Section 13

of the CPC, the two which have been invoked are (b) and (d) of Section

13 of the CPC. The second and fourth eventualities are (b) where it

(Foreign Judgment) has not been given on merits of the case and (d)

where the proceedings, in which the Foreign Judgment was obtained,

are opposed to natural justice.

4. Respondent succeeded in persuading the learned Single Judge

in holding that the judgment and decree of Dubai Court of First

Instance of 30th November, 1998, (hereinafter referred to as the

„foreign judgment and decree‟) was not on merits and was opposed to

natural justice, as the Respondent was never served but was

proceeded ex parte.

5. The operative part of the impugned order is as under:-

"In the present case, the proceedings before UAE Court make it apparent that no effort was made to serve the defendant. The plaintiff had not given the known address of the defendant. The plaintiff had specifically pleaded in the present case that the defendant was not available in UAE and had fled to India. The address of the defendant in India was available to the plaintiff since even at the time of opening the account the plaintiff had obtained a copy of the passport of the defendant in verification of the New Delhi address of the defendant.

Despite this, the plaintiff did not given the current address of the defendant and failed to disclose to the Court at

RFA (OS) 59 of 2008 Page 3 Dubai that the defendant was not available in Dubai. The plaintiff obtained a decree against the defendant in absentia. Dubai Court presumed that the defendant was duly served through its Attorney and did not appear. It is not stated who was the attorney, who appointed him, at what address he was served, when he was served. I consider that such a decree obtained by the plaintiff is not a decree on merits and contravenes the principles of natural justice. Such a decree is not executable in India. The judgment given by the Dubai Court also shows that it was and ex parte judgment wherein no evidence was led by the plaintiff. The Court at Dubai in a formal manner enumerated the documents filed by the plaintiff along with suit considered them as sufficient to pass the decree. The judgment and the decree passed by the Dubai Court of First Instance is therefore contrary to the principles of natural justice and contrary to the provisions of Section 13 CPC."

6. Learned Senior Counsel for the parties have been heard in

this Appeal and record of this case has been perused by us.

7. The substratum of the submissions advanced is that Order VII

Rule 11 of the CPC does not entitle the Court to hold a mini trial and

the averments in the plaint alone are to be seen. To support this

proposition, reliance has been placed upon 'Ramesh B Desai v. Bipin

Badilal Mehta‟ 2006 (5) SCC 638. There can be no dispute about it.

However, merely because the learned Single Judge has referred to the

written statement of the Defendant/ Respondent and the replication of

the Plaintiff/ Appellant and the copy of the pass-port of the Defendant/

Respondent, it would not per se mean that he has relied upon them.

RFA (OS) 59 of 2008 Page 4

8. In the impugned order, learned Single Judge has found that

the foreign judgment and decree is not on merits and the same is

opposed to natural justice, as the Defendant/ Respondent was not

properly served by the Dubai Court of First Instance. It has been also

noted in the impugned order that the Dubai Court had presumed that

the Defendant/ Respondent was duly served through his Attorney and

did not appear. The pertinent fact noticed in the impugned order is

that it was not stated who was the Attorney, who appointed him, at

what address he was served and when he was served. This fact has

not been assailed before us. What has been asserted is that the

Defendant/ Respondent had left Dubai without informing the Plaintiff/

Appellant and the averment in the plaint of Appellant knowing about

Respondent residing in Delhi in September/ October 2001, has to be

taken to be correct. Even if it is so, still the Appellant is obliged to

explain as to who was the Attorney and at what address he was served

and in what manner. This, the Appellant has failed to do. This clearly

violates the principles of natural justice, as we understand. What is

least required is that the fair opportunity of hearing is to be afforded to

a party, which has not been done by the Dubai Court before rendering

the „foreign judgment and decree‟ in question.

9. The dicta of the Apex Court in „Sopan Sukhdeo Sable v.

Assistant Charity Commissioner" (2004) 3 SCC 137 is that while

adjudicating upon an application under Order VII Rule 11 of the CPC,

the plaint cannot be dissected. There can be no quarrel with this

proposition. The plaint has to be read as it is. Upon doing so, we find

that a decree for UAE DHS 18,13,801.74 with interest is sought on the

RFA (OS) 59 of 2008 Page 5 basis of 'Statement of Claims', being Annexure- A to the plaint. The

averments made in Para- 19 of the plaint in this respect are as under:-

"The Plaintiff Bank claims UAE DHS 1,813,801.74 as per the statement of claim being Annexure-A along with interest at 10.25% per annum from the date of filing of the present suit till the date of payment. The amount payable to the Plaintiff Bank as stated in the statement of claim is as per the Decree dated 30.11.1998 passed by the Dubai Court of First Instance".

10. It would be worthwhile to reproduce Annexure- A of the plaint,

which is as under:-

"IN THE HIGH COURT OF DELHI AT NEW DELHI ORIGINAL CIVIL JURISDICTION CIVIL SUIT No. -------------2001

IN THE MATTER OF Annexure-A

EMIRATES BANK INTERNATIONAL PJSC .......PLAINTIFF VERSUS SHRI VIJAY TALWAR .....DEFENDANT

STATEMENT OF CLAIMS

i) Amount decreed by the Dubai UAE DHS 1,644,356.34 Court of First Instance on 30th November, 1998.

ii) Intererst on UAE DHS UAE DHS 280,910.87 1,644,356.34 From 31st August, 1998 to 3rd July, 2000 @ 10.25% III) Received on 3rd July, 2000 UAE DHS 305,830.57

iv) Principal amount outstanding on UAE DHS 1,338,525.77 4.7.2000

v) Interest on UAE DHS UAE DHS 194,365.10 1,338,525.77 from 4th July, 2000 Till 27th November, 2001 @ 10.25%

vi) Total outstanding as on UAE DHS 1,813,801.74 27.11.2001 Note:

       a)      The aforesaid amount of
               UAE DHS 1,813,801.74 is payable
               along with interest @ 10.25% from
               28.11.2001 till payment
       b)      the Rupee equivalent on
               the date of suit is Rs.2,35,79,422/-

RFA (OS) 59 of 2008                                                    Page 6
              (for the purpose of jurisdiction).

NEW DELHI                                     AGARWAL LAW ASSOCIATES
DATED: 27.11.2001                          ADVOCATES FOR THE PLAINTIFF
                                              34, BABAR LANE, 1ST FLOOR
                                          BENGALI MARKET, NEW DELHI
                                           (PHONES: 3354330; 3738122)"

11. Although there is an averment in the plaint that the suit

amount is due and payable under personal guarantee of 7 th March,

1995, executed by M/S Marmo Company of the Defendant/ Respondent

but it is evident from the 'Statement of Claims', Annexure-A, which is

the basis of the plaint that the suit amount is exclusively based upon

the outstanding amount of the „foreign judgment‟. Therefore, Appellant

cannot be heard to say that its suit is based upon a personal guarantee

of the Respondent and the same is continuing one. Therefore, reliance

placed upon decision of the Apex Court in „Syndicate Bank vs.

Channaverrappa Beleri‟ (2006) 11 SCC 406 is unwarranted.

12. Now, what is required to be seen is as to whether the „foreign

judgment‟ is on merits or not. For this, its authenticated translation

(Annexure- R-1) is required to be seen.

13. Upon perusing the „foreign judgment‟ (Annexure- R-1), it is

found that the Dubai Court has relied upon photocopies of documents

produced by the Appellant/ Plaintiff and has not taken on record

evidence of any witness to prove the photocopy of the documents

produced and has noted as under:-

"The matter was heard in Court as evidenced by the papers. The Plaintiff was represented by the Counsel. No one had appeared for the two Defendant who were summoned. The Court decided to announce the judgment today."

RFA (OS) 59 of 2008 Page 7

14. All that has been said in „foreign judgment‟ (Annexure R-1) is

that the Defendant (Respondent) were summoned but not appeared. It

has not been elucidated as to in what manner the Defendant/

Respondent were served and it is no where stated that the Attorney of

the Defendant / Respondent was served. The finding returned by the

Dubai Court, as is evident from „foreign judgment‟ (Annexure- R-1), is

as follows:-

"Accordingly, since it is established in the papers that the Plaintiff Bank had granted the First Defendant the facilities through the account opened at the Plaintiff, and that it is established before the Court upon perusal of the Statement of Account that the total indebtedness is Dhs 1,644,365.34 and since the Defendants did not attend and had not filed any defense, therefore, the Court enters judgment against the First Defendant to pay of the said amount to the Plaintiff."

15. It is pertinent to note that the personal guarantee of 7 th

March, 1985, was also subject matter of the foreign judgment and

decree rendered by the Dubai Court. We are conscious that in a given

case, it is possible that even though the defendant has not entered

appearance, the Plaintiff may prove its case through oral and

documentary evidence. If after consideration of oral and documentary

evidence an ex parte decree is passed, it would be a decree on merits.

16. What the Apex Court has said in "International Woolen Mills

vs. Standard Wool, (U.K.) Ltd" (2001) 5 SCC 265 deserves attention.

It reads as under:-

RFA (OS) 59 of 2008 Page 8 "Where, however, no evidence is adduced on the plaintiff‟s side and his suit is decreed merely because of the absence of the defendant either by way of penalty or in a formal manner, the judgment may not be one based on the merits of the case."

17. Thus, it needs no emphasis that in a case where no evidence

is led, decision rendered in the absence of the opposite party would

not be on merits. The documents referred to by the Dubai Court in the

foreign judgment (Annexure- R-1) are photocopies and have not been

proved by any witness by deposing in support of those documents. The

proposition that the foreign judgment (Annexure- R-1) was on merits

as all documents and particulars had been endorsed with the

'Statement of Claim' stands negatived by the Apex Court in „Standard

Wool‟ (Supra), wherein it has been declared in unequivocal terms that

if an ex parte decree was passed in a summary manner under a

special procedure, without going into the merits and without taking the

evidence, then those decrees would not be executable in India.

Though, it is noticed by the Dubai Court in the „foreign judgment‟

(Annexure R-1) that the rule is that the Plaintiff has to establish his

right and the Defendant is to rebut the same, but there is no

worthwhile appreciation of documents of the Plaintiff/ appellant in the

'foreign judgment‟ (Annexure- R-1) to even prima facie show that the

Plaintiff/ Appellant had succeeded in its right to the suit amount

claimed. Therefore, viewed from any angle, foreign judgment

(Annexure- R-1), cannot possibly be said to be a judgment on merits.

RFA (OS) 59 of 2008 Page 9

18. In our considered opinion, learned Single Judge has rightly

applied the ratio of „Standard Wool‟ (Supra) to conclude that the

„foreign judgment and decree‟ (Annexure- R-1) obtained by the

Plaintiff/ Appellant, is not a decree on merits and it contravenes

Section 13(b) of the CPC and is as such not executable in India. As

already noticed above, it also violates the principles of natural justice

i.e. Section 13 (d) of the CPC, which provides that where the

proceedings in which the foreign judgment is obtained, are opposed to

natural justice. The foreign judgment (Annexure- R-1) rendered by the

Dubai Court does not satisfactorily deal with the vital aspect of service

of summons/ notice upon the Respondent/ Defendant or its Attorney.

19. It was vehemently argued by the learned Senior Counsel for

the Appellant that plea of limitation was not taken by the Respondent

in his application under Order VII Rule 11 of the CPC, but the learned

Single Judge has non-suited the Plaintiff/ Appellant by holding that the

suit of the Plaintiff / Appellant is time barred. All that has been said in

the impugned order on the limitation aspect is as under:-

"Thus, the period of limitation shall start from 5th September, 1998 and not from the date of attachment order delivered by the Dubai Court. If the cause of action is based on the letter of guarantee dated 7th March, 1995, or from denial of dues, the suit filed in November, 2001 would be beyond the period of limitation"

20. The operative part of the impugned order makes it clear that

the Appellant's/ Plaintiff's suit has been rejected being not

maintainable and not on the ground of being time barred. We are of

RFA (OS) 59 of 2008 Page 10 considered view that learned Single Judge has correctly arrived at a

conclusion that Appellant's suit is for the rest of the amount of the

foreign judgment and decree, which is not on merits and therefore, not

enforceable in India. Rejection of Appellant's suit is also justified

because it is solely based upon the foreign judgment and decree,

which includes the claim based on personal guarantee. For this very

reason, Appellant could not have maintained this suit solely on the

basis of personal guarantee of 7th March, 1995, by asserting that it was

continuing one.