The Associated Hotels of India, Ltd. & ANR Vs. R. B. Jodha Mal Kuthalia [1960] INSC 128 (23 August 1960)
GAJENDRAGADKAR, P.B.
SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L.
SUBBARAO, K.
WANCHOO, K.N.
CITATION: 1961 AIR 156 1961 SCR (1) 259
CITATOR INFO :
R 1975 SC 824 (27)
ACT:
Partition of India-Creation of two Dominions, India and Pakistan-Formation of new provinces and transfer of territories-Decree passed by Federal Court of PakistanWhether executable in India-Evacuee laws-Whether affect such decree--The Indian Independence Act, 1947, s. 9-The Indian Independence (Legal Proceedings) Order, 1947, art. 4, cls. 1, 2, 3-Code of Civil Procedure, 1908 (V of 1908), O. 45, r. 15.
HEADNOTE:
On October 2, 1946, the Associated Hotels of India Ltd., and its managing director, Mohan Singh Oberoi, appellant 1 and 2 respectively, entered into an agreement with the respondent for purchasing certain property from the latter for a price of Rs. 52,75,000 and paid Rs. 5 lacs as earnest money; but as the respondent's title to the property was found to be defective the sale was not completed. The appellants filed a suit in the Court of Senior Subordinate judge at Lahore for the recovery of Rs. 5,10,000 which included the earnest money and interest accruing thereon, and the suit was decreed for Rs. 5,08,333/5/4 with future interest in favour of appellant NO. 2 on March 14, 1949. The claim of appellant No. I was rejected. On appeal by the respondent the High Court at Lahore reversed the decree of the trial court and dismissed the suit on November 21, 1949. The Federal Court of Pakistan on appeal by the appellants allowed the appeal of appellant NO. 2 on December 21, 1953, and restored the decree passed in his favour by the trial court. After the passing of the decree by the trial court and before the decision of the respondent's appeal in the Lahore High Court the appellants had put the decree in execution which was stayed at the request of the respondent on condition that the respondent should deposit Rs. 3,00,000 in the High Court and furnish security for the balance of the decretal amount. In course of the execution proceedings and after the Federal Court's decree in favour of appellant NO. 2 the main question that arose, inter alia, was whether the deposited sum of Rs. 3,00,000 should be applied towards the satisfaction of the decree of the Federal Court and paid to the decree-holder after transferring it to India or whether the custodian of evacuee property in Pakistan was entitled to the money as evacuee property. The decreeholder and the judgment-debtor were both agreed that the money in question vested in the decree-holder and 34 260 should as requested by him be either transmitted to India or paid to him. This was resisted by the custodian and the High Court held that the money could not be transferred to India, and directed the custodian to report what interest any evacuee had in the money. It was under these circumstances that the appellants made the present application to the Punjab High Court (India) under O. 45, r. 15, and s. 151 of the Code of Civil Procedure with a prayer for transmitting to the Court of the Senior Subordinate judge, Simla, the proceedings' between the parties for execution of the said decree in accordance with the provisions applicable for execution of original decrees passed by the said judge. Their contention was that as a result of the provisions of Art. 4(3) of the Indian Independence (Legal Proceedings) Order, 1947, the decree passed in favour of appellant No. 2 by the Federal Court of Pakistan had become executable in India as if it had been passed by the Supreme Court of India. The respondent resisted this on the grounds that the application was not entertainable and the decree could not be executed in the absence of a certificate as required by O. 21, r. 6(b) of the Code of Civil Procedure , that the decree did not attract the provisions of Art. 4(3) of the Order and that the decree in question having vested in the Custodian appellant NO. 2 was not entitled to execute it. The relevant portion of Art. 4 of the Indian Independence (Legal Proceedings) Order, 1947, runs thus:" Notwithstanding the creation of certain new provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independence Act, 1947(1) All proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that the Court shall continue to have for the purpose of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day;
(2) Any appeal or application for revision in respect of any proceedings so pending in any such court shall be to the court which would have appellate or as the case may be divisional jurisdiction over that court if the proceedings were instituted in that court after the appointed day, and (3) effect shall be given within the territories of either of the two dominions to any judgment, decree, order or sentence of any such court in the said proceedings, as if it had been passed by a court of competent jurisdiction within the Dominion." Although the High Court held that the decree sought to be executed fell under Art. 4(1) of the order and could be executed under Art. 4(3) of the said order, it came to the conclusion that 261 the " Court of competent jurisdiction " was the Senior Subordinate judge at Simla and that the appellants should have filed their application under O. 45 T. 15, Code of Civil Procedure in that Court. The High Court further held that the application was incompetent owing to absence of a certificate under O. 21, r. 6(b), of the Code, that the judgment debt was property and its situs was Pakistan and that the decree vested in the Custodian of Evacuee Property at Lahore and was not executable at the instance of the appellants. Consequently the High Court dismissed the appellant's application under O. 45, r. 25. On appeal by the appellants on a certificate of the High Court, Held, (Kapur, J., dissenting), that the provisions of Art. 4 of the Indian Independence (Legal Proceedings) Order, 1947, did not apply to the decree sought to be executed by the appellants. The pending proceedings to which Art. 4(1) of the order applied would continue before the specified courts even though the jurisdiction of the said courts might otherwise have been affected by the passing of the Indian Independence Act or the transfer of certain territories.
Article 4(1) could not be extended to pending proceedings in respect of which the trial court's jurisdiction was in no way affected by the passing of the Act or the transfer of any territories.
Appeals would be taken against the judgments or orders passed in the said proceedings in the same manner in which they would have been allowed if the Original proceedings had been instituted after the appointed day.
Protap Kumar Sen and An.Y. v. Nagendra Nath Mazumday, A.I.R.
1951 Cal. 511, Ahidhar Ghose v. Jagabandhu Roy, A.I.R. 1952 Cal. 846, Naresh Chandra Bose v. Sachindra Nath Deb and Ors, A.I.R. 1956 Cal. 222, not applicable.
Per Kapur, J.-The High Court could and should have sent down the decree in question to the Senior Subordinate judge, Simla, to execute it in accordance with law.
The effect of Art. 4(1) and (3) of the Order was that " all proceedings " meaning all suits and other proceedings would continue unaffected by the passing of the Act and the setting up of two provinces of West Punjab and East Punjab, and also that once a decree was passed or sentence pronounced by a court in either of the new provinces of the two Dominions it was to be given effect to as if it was a decree or order passed by a Court of competent jurisdiction in the other Dominion. The amplitude of the language of Art. 4 is not cut down by any words in the article or the Order.
The meaning of the words appellate jurisdiction " as used in cl. (2) of Art4 of the Order is not affected by the subsequent extension of restriction of the jurisdiction of the Court and the decree of the Federal Court of Pakistan is covered by these words.
262 The word effect " in cl. (3) of Art. 4 is wider than the words " enforce or " execute " and is not equivalent to " being enforced " by suit on a foreign judgment.
Clause 3 of the Art. 4 is in the nature of a deeming clause and makes the decree of the Pakistan Court (West Punjab) a decree of a court of competent jurisdiction in East Punjab (India).
Situs of the decree was not Pakistan alone but by a fiction of law the decree was a decree of a court of competent jurisdiction in what was the Dominion of India.
The provisions of the evacuee law in Pakistan would not affect the rights of the appellant to execute the decree in question in India.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 320/58.
Appeal from the Judgment and Order dated the 22nd January, 1957, of the Punjab High Court in Civil Misc. No. 24/C of 1955.
D. N. Pritt, S. N. Andley, J. B. Dadachanji and P.L. Vohra, for the Appellants.
C. K. Daphtary, Solicitor-General of India, A. V. Viswanatha Sastri and Naunit Lal, for the Respondent.
1960. August 23. The Judgment of B. P. Sinha, C. J., P. B. Gajendragadkar, K. Subba Rao, and K. N. Wanchoo, JJ., was delivered by Gajendragadkar, J. Kapur, J. delivered a separate Judgment.
GAJENDRAGADKAR J.-The Associated Hotels of India Ltd., and its Managing Director Mohan Singh Oberoi (hereafter called appellants 1 and 2 respectively) had filed an application in the High Court of Punjab under O. 45, r. 15 of the Civil Procedure Code for executing a decree passed by the Federal Court of Pakistan in favour of appellant 2 and against Jodha Mal Kuthalia (hereafter called the respondent). The said application was dismissed but, on an application made by the appellants under Art. 133(1) (a) and (c) of the Constitution, the said High Court granted a certificate to the appellants and it is with the said certificate that they have preferred the present appeal before this Court.
263 It is necessary at the outset to state the material facts leading to the appellants' application before the High Court under O. 45, r. 15. It appears that by an agreement dated October 2, 1947, the respondent had agreed to sell to the appellants certain property known as Nedous Hotel at Lahore for Rs. 52,75,000. In pursuance of the terms of the said agreement the appellants had paid the respondent Rs.
5,00,000 by, way of earnest money. It, however, turned out that the respondent's title to the property in question was defective, and so the sale could not be completed. That is why the appellants had to file a suit in the court of the Senior Subordinate Judge at Lahore claiming to recover from the respondent a sum of Rs. 5,10,000; this amount included Rs. 5,00,000 paid by the appellants to the respondent as earnest money and interest accrued due thereon up to the date of the suit. In the said suit the trial judge passed a decree for Rs. 5,08,333-5-4 with future interest thereon at 5% per annum in favour of appellant 2. The claim made by appellant I was rejected. This decree was challenged by the respondent before the Lahore High Court. The High Court upheld the contentions raised by the respondent, allowed his appeal, set aside the decree passed in favour of appellant 2 and dismissed the appellants' suit with costs. This decree led to an appeal by the appellants before the Federal Court of Pakistan. The Federal Court in turn allowed the appeal in favour of appellant 2 and restored the decree passed in his favour by the trial court. This decree was passed on December 21, 1953. The present application made by the appellants in the Punjab High Court under O. 45, r. 15 is intended to obtain the execution of this decree.
While the litigation between the appellants and the respondent was thus proceeding in the courts in Pakistan certain other events took place in regard to the execution of the said decree to which reference must now be made After the trial court had passed its decree and before the date of the decision of the Lahore High Court, the appellants had put the decree in execution and thereupon the respondent had 264 applied for stay of the said execution before the Lahore High Court. On the said application the Lahore High Court ordered that the execution taken out by the appellants should be stayed on condition that the respondent should deposit a sum of Rs. 3,00,000 in the High Court and furnish security for the balance of the decretal amount. In accordance with this order the respondent deposited the amount and furnished the security. Subsequently when the Lahore High Court allowed the respondent's appeal he applied for a refund of the amount already deposited by him, and his application was allowed on December 16, 1949. On the same day, however, the Lahore High Court directed that information of its order allowing the respondent to withdraw the amount should be given to the Custodian. The Custodian then moved the High Court on December 20, 1949, for a review of its order on the ground that the amount in question was evacuee property and as such it vested in him. These proceedings were pending before the High Court when the appellants had taken their appeal before the Federal Court of Pakistan against the High Court's decision.
After the Federal Court decreed the claim of appellant 2 the said proceedings were taken up before the High Court for final disposal. At this stage the respondent made an application before the High Court that the deposit of Its.
3,00,000 should be applied towards the satisfaction of the decree passed by the Federal Court in favour of appellant 2 and he stated that he wanted to withdraw his previous application for the return of the said deposit (R. F. A. No. 31 of 1949).
Similarly appellant 2 filed a Civil Miscellaneous Application (No. 120 of 1954) praying that the amount of Rs. 3,00,000 deposited by his judgment-debtor should be transferred to India, or that, if it could not be so transferred, it should be held that the Custodian was not entitled to the said amount and so it should be paid to the decree-holder at Lahore, or that it should be paid to such person other than the Custodian as may be entitled to it.
These two applications 265 along with the original petition filed by the Custodian for a review of the High Court's original order allowing a refund to the respondent were heard together by the High Court.
The High Court noticed that both the judgment debtor and appellant 2 agreed that the amount in question vested in the decree-holder and should either be transmitted to India or paid to him. The Custodian, however, resisted this prayer.
Under s. 4 of the Pakistan Transfer of Evacuee Deposits Act, 1954, a deposit made in a civil proceeding to which an evacuee was entitled and in which no muslim was interested could be transferred to India provided that if the court was satisfied that if any of the persons interested in the deposit was not an evacuee the deposit shall not be transferred. It was under the provisions of s. 4 that appellant 2 had claimed a transfer of the deposit on the allegation that he was an evacuee. The High Court, however, proceeded to consider whether the amount of Rs. 3,00,000 belonged exclusively to appellant 2and held that on going through the record it was satisfied that though the decree stood in the name of appellant 2 the amount really belonged to the Associated Hotels Limited, and it observed that it was not denied that among the shareholders of the Associated Hotels Limited there were muslims and non-evacuees. It was urged before the High Court by appellant 2 that since the decree stood in his name he alone could execute it and no question as to the title of appellant I could arise in the proceedings before the court. Curiously enough this contention was negatived and appellant 2's prayer for the transfer of deposit was rejected. How the High Court could have considered the question of the title of appellant in view of the decree passed by the Federal Court it is difficult to appreciate. However, on the view that it took the High Court came to the conclusion that since appellant I some of whose shareholders were muslims and non-evacuees was entitled to the deposit appellant 2 was riot entitled to claim the transfer of the deposit to India. In the result the High Court allowed the application of the 266 Custodian and set aside its earlier order for refund in favour of the respondent. In regard to the other two prayers made by appellant 2 the High Court observed that under s. 34 of the Pakistan Administration of Evacuee Property Ordinance it was only for the Custodian to consider what interest, if any, an evacuee had in the deposit in dispute, and so it left that question to be determined by the Custodian, and directed that the said prayers made by appellant 2 would have to be decided after issuing notice to the Custodian and after the Custodian returns his finding on the issue framed by it. This order was passed on January 20, 1956. It is under these circumstances that the appellants made the present application to the Punjab High Court under O. 45, r. 15 of the Code.
The case for the appellants was that as a result of the provisions of s. 4(3) of the Indian Independence (Legal Proceedings) Order, 1947 (hereafter called the Order), the decree passed in favour of appellant 2 by the Federal Court of Pakistan had become executable in India as if it had been passed by the Supreme Court of India. On this basis the provisions of O. 45, r. 15 of the Code were invoked and the High Court was requested to transmit to the Court of the Senior Subordinate Judge, Simla, the proceedings between the parties for execution of the said decree in the manner and according on the provisions applicable to the execution of the original decree passed by the said Judge. An alternative prayer was made for the same order under the High Court's inherent jurisdiction under s. 151 of the Code.
This application was resisted by the respondent on several grounds. It was urged that neither O. 45, r. 15 nor s. 151 of the Code was applicable, that the decree could not be executed, and the application made by the appellants in that behalf could not be entertained, in the absence of a certificate required by O. 21, r. 6(b), that the decree in fact did not attract the provisions of s. 4(3) of the Order and that appellant 2 was not entitled to execute it because the decree under execution had vested in the Custodian of Evacuee Property at Lahore.
267 The High Court has held that the decree sought to be executed fell under s. 4(1) of the Order and thus could be executed under s. 4(3) of the said Order. As a result of these findings the appellant was held entitled to invoke the relevant provisions of the Order. The High Court, however, came to the conclusion that the court of competent jurisdiction specified in s. 4(3) was in the context of the relevant facts in the present case the Court of the Senior Subordinate Judge at Simla and that the appellants should have filed their application before that court. The High Court also took the view that the present application was incompetent for the additional reason that the certificate of non-satisfaction had not been filed along with the application as required under O. 21, r. 6(b). According to the High Court the judgment-debt was property and its situs was Pakistan. The result of these findings was that under the Pakistan law the decree vested in the Custodian of Evacuee Property at Lahore, and so it was not executable at the instance of the appellants. On these findings the application made by the appellants was dismissed. In the present appeal Mr. Pritt has challenged the correctness of these findings.
Mr. Pritt contends that the expression " a court of competent jurisdiction " in s. 4(3) of the Order must mean a court which can pass the decree under execution and that inevitably must mean the Supreme Court of India, because the decree under execution is a decree passed by the Federal Court of Pakistan. According to him the High Court was in error in holding that the appellants should have produced a certificate of non-satisfaction because the provisions of O.
45, r. 15 do not require such a certificate. If the decree under execution has to be regarded as one passed by the Supreme Court of India the provisions of O. 45, r. 15 should have been applied and no additional limitations imposed on the appellants. Mr. Pritt conceded that the judgment-debt is property but disputed the correctness of the conclusion of the High Court that the situs of the said debt is Pakistan. He also urged alternatively that even if the situs of the judgment debt is assumed to be Pakistan, under the relevant 35 268 provisions of Pakistan law the property in the judgment-debt did not vest in the Custodian and continued to be the property of appellant 2. Naturally in his opening Mr. Pritt assumed that the view taken by the Punjab High Court as to the applicability of ss. 4(1) and 4(3) of the Order was right and when the correctness of the said finding was challenged by the respondent in his reply Mr. Pritt supported the said finding on the merits.
On the other hand, the learned Solicitor-General has seriously disputed the correctness of the High Court's conclusion about the applicability of ss. 4(1) and 4(3) of the Order to the decree in question while he has supported the other findings of the High Court against the appellants.
On these contentions the question which logically must first be considered is whether the decree under execution attracts the provisions of s. 4(3) of the Order.
The Order was made by the Governor-General on August 12, 1947, in exercise of the powers conferred on him by s. 9 of the Indian Independence Act, 1947, and all other powers enabling him in that behalf. Section 1(2) of the Order provides that it shall come into force at once. Section 2 of the Order provides that the appointed day means the 15th of August, 1947. Section 3 makes provisions for proceedings pending immediately before the appointed day in any of the special tribunals specified in column 1 to the Schedule. We are not concerned with the provisions of this section in the present appeal. We are concerned with s. 4 which it is necessary to read.
Section 4 reads thus:"4. Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independence Act, 1947(1) All proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that court shall continue to have for the purposes of the said 269 proceedings all the jurisdiction and powers which it had immediately before the appointed day ;
(2) any appeal or application for revision in respect of any proceedings so pending in any such court shall lie in the court which would have appellate, or as the case may be revisional, jurisdiction over that court if the proceedings were instituted in that court after the appointed day; and (3) effect shall be given within the territories of either of the two Dominions to any judgment, decree, order or sentence of any such court in the said proceedings, as if it had been passed by a court of competent jurisdiction within that Dominion." The question which we have to consider is whether the proceedings from which the appeal to the Federal Court arose fall within s. 4(1); if they do s. 4(3) will come into operation. If, however, the said proceedings do not fall within s. 4(1), s. 4(3) would be inapplicable. The appellants contend that the words used in s. 4(1) are wide enough to include every suit pending in any civil court in the Punjab at the material time, and there is no scope for limiting the extent of the applicability of the said clause.
On the other hand, it is urged for the respondent that it is only such proceedings as were pending in any court at the material time jurisdiction in respect of which would have been affected by the transfer of certain territories from one country to the other that are intended to be covered under s. 4(1). The problem thus posed by the parties is one of construction. As we have already observed, the High Court has construed s. 4(1) in favour of the appellants; and we have to consider whether the High Court was right in reaching the said conclusion.
Both the parties are agreed that in construing the provisions of s. 4(1) of the Order we should bear in mind the object with which the Order was made and should construe the provisions of the Order after reading them as a whole.
Since the Order has been passed in exercise of the powers conferred on the Governor-General by s. 9 of the Indian Independence Act it would be useful to refer to the material provisions of the said section. Section 9(1)(d) provides that the 270 Governor-General shall by order make such provision as appears to him necessary or expedient for removing difficulties arising in connection with the transition to the provisions of this Act. It was realised that as a result of the Act, in carving out two Dominions certain areas may have to be transferred from a Province in one Dominion to a province in another Dominion and such a transfer would inevitably create difficulties of jurisdiction of the civil courts to continue to try proceedings already pending before them. The Order was, therefore, made with the object of avoiding unnecessary complications or hardship to the litigants, and so it provided that the proceedings covered by it which were pending at the material time should be continued as if the Act had not been passed. In other words, a departure was deliberately made from the normal rules of private international law in regard to the enforceability of foreign judgments. Both parties are agreed that this was the object in making the Order, and that in construing the relevant words of the Order the courts must bear this object in mind.
It is then urged by the learned Solicitor-General that in its very nature the Order should be treated as temporary though he immediately added that it would be alive and in operation until all the proceedings covered by it have been finally and fully disposed of. No doubt he commented on the fact that the Pakistan Government had by its legislative process made a substantial departure from the provisions of the Order, and had in substance decided to refuse to recognise judgments and orders of Indian courts to which the provisions of the Order undoubtedly applied. In this connection our attention was drawn to the Indian Independence (Pakistan Courts Pending Proceedings) Act, 1952 (IX of 1952), which by s. 3 provides that notwithstanding anything contained in any of the orders referred to in s. 2, no decree to which this Act applies shall be given effect to by any court or authority in India so far as such decree imposes any liability or obligation on any government in India. It appears that the Indian Government was satisfied that Pakistan had thought it fit to provide that no decree or 271 order passed by a court in India would be given effect to in Pakistan, and so it became necessary that the position of the Government India and the three State Governments concerned should be adequately safeguarded. It is with that object that this Act was passed. The Solicitor-General contends that though the R. Order had been made by the Governor-General under s. 9 of the Indian Independence Act and was intended to apply to both the Dominions virtually the provisions of the Order are no longer in operation in Pakistan. In our opinion, this consideration is hardly relevant in construing the material provisions of the Order.
So long as the Order remains in force and has neither been modified or repealed it is the duty of the courts in India to consider its provisions in a fair and reasonable manner and to give full effect to them. Considerations based on the unilateral conduct adopted by the Pakistan Legislature in departing from the provisions of the Order cannot, in our opinion, have any bearing when we are dealing with the question of the construction of the Order itself. The Order is in force, and if the decree sought to be executed by the appellants falls under s. 4(1) it will attract the provisions of s. 4(3) and all relevant questions arising in working out the provisions of s. 4(3) would have to be judicially considered. It may be that there may not be a large number of decrees or orders which still remain executable and have not been executed and so occasions to invoke the provisions of this Order may not be too many ;
but that is another matter.
Let us then consider the provisions of s. 4(1) first. Mr. Pritt has urged that the appeal to the Federal Court in which the decree under execution was passed in favour of appellant 2 arose from proceedings which were pending at the material time in a court in the Punjab and as such it fell within the purview of s. 4(1). He emphasises the fact that s. 4(1) refers to all proceedings in any civil court in the Punjab as well as in the Provinces of Bengal and Assam, and his case is that there is no justification for limiting the scope and effect of the wide words used in the first part of the clause. Prima facie there is some force in 272 this contention ; but, in our opinion, it would be erroneous to construe these words in isolation and apart from the rest of the provisions in the said clause it. self. It is significant that s. 4 refers to the creation of certain new Provinces and the transfer of certain terri tories from the Province of Assam to the Province of East Bengal by the Independence Act. In other words, the non-obstante clause which constitutes the preamble of s. 4 clearly indicates that it was the creation of certain new Provinces and the transfer of certain territories which was the reason for the provisions made in the three clauses of the said section.
It is also significant that s. 4 is confined to the specified judicial proceedings pending in only three Provinces; that is to say, proceedings pending in competent courts either in Sind or in the North West Frontier Province which are parts of Pakistan and in all the States in India except Punjab, West Bengal and Assam do not attract the provisions of the Order. There is, therefore, no doubt that the High Court was in error in assuming that " the use of the words gall' in 'all proceedings' clearly indicated that all cases pending in all courts in the two Dominions were intended to be covered by the Order. It is manifest that the Order, in its application to India and Pakistan, covered only three Provinces and not all.
The latter part of s. 4(1) must now be considered. The pending proceedings covered by the first part have to be continued in the court where they are pending as if the said Act had not been passed, and that court shall continue to have for the purpose of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day. These two clauses unambiguously indicate that by the passing of the Act the initial jurisdiction of the court to entertain the proceedings pending before it was affected ; that is why, in authorising the said proceedings to continue before the said court the clause proceeds to say that the said proceedings shall continue as if the Act had not been passed. In other words, reading s. 4(1) as a whole there can be no doubt that 273 its provisions were intended to safeguard the continuance of only such pending proceedings in respect of which questions of Jurisdiction of the trial court would have arisen by the passing of the Act and the transfer of certain territories.
If proceedings were pending before the specified courts validly at the material time, and if the jurisdiction of the said courts to continue with the trial of the said proceedings was not affected by the passing of the Act or the transfer of the territory, it was wholly unnecessary to authorise the continuance of the said proceedings in the said court and to provide that the said proceedings should be so continued as if the Act had not been passed. In regard to such proceedings the latter part of s. 4(1) would be wholly redundant. The only answer which Mr. Pritt attempted to give in facing this difficulty was that even in regard to proceedings which the specified court was competent to try even after the passing of the Act its jurisdiction to execute the decree would be impaired or affected and that was intended to be cured 'by s. 4(1).
This argument is clearly far-fetched and untenable. The jurisdiction and powers which are saved by s. 4(1) are in terms described as jurisdiction and powers " for the purpose of the said proceedings ". It is the jurisdiction to continue with the pending proceedings which had been validly initiated and the word " proceedings " in the context must mean, in the case of a suit, a suit and not proceedings which may be taken out to execute the decree that may be passed in such a suit. Therefore, we feel no difficulty in holding that s. 4(1) does not apply to all proceedings pending at the material time before the specified courts but only such of them in respect of which the jurisdiction of the trial court would have been affected by the passing of the Act or by the transfer of certain territories.
Section 4(2) deals with appeals or revisional applications arising from the pending proceedings covered by cl. (1).
The learned Solicitor-General contends that this clause cannot apply to an appeal before the Federal Court because, according to him, it is only an appeal in respect of a pending proceeding that is 274 contemplated by the clause. He argues that the word appeal " can reasonably mean only one appeal which arises directly against the decree passed in the pending proceedings and there would, therefore, be no scope to extend the application of s. 4(2) to a second appeal, as for instance an appeal to the Federal Court in the present case. In support of this argument he J. has incidentally referred to the fact that the Federal Court had not come into existence and had no jurisdiction to entertain a regular appeal from a decision of the High Court at the time when the Order was made. We are not impressed by this argument. In our opinion there is no doubt that the word " appeal " in the context must mean any appeal or appeals allowed by law in respect of pending proceedings covered by cl. (1). Any other view would lead to unreason. able, if not anomalous, consequences. What cl. (2) intends to provide is that the proceedings to which cl. (1) applies should be allowed to take their full course under the law governing them, and the final effective appellate decision should be as valid in regard to the said proceedings as it would be in regard to the proceedings validly instituted in that court after the appointed day. Incidentally, we may point out that as a result of the combined operation of Order G. G. O. 3 made on. February 25, 1948, and the provisions of the Federal Court (Jurisdiction Enlargement) Act, 1 of 1950, the Federal Court must be deemed to have come into existence and must be deemed to have had powers to entertain appeals from the decrees of the High Courts as from the appointed day.
That takes us to s. 4(3). The Solicitor-General con; tends that the expression,, effect shall be given to' in this clause does not mean that the decree shall be executed. It only means that the decree shall be recognised as a decree passed by a court of competent jurisdiction and nothing more. His argument is that s. 4 wanted to make a very narrow and limited departure from the ordinary principles of private international law. It is well-known that except for cases falling under ss. 44 and 44A of the Code of Civil Procedure a foreign judgment has to be enforced by a suit;
275 and in such a suit the judgment-debtor is entitled to make certain pleas against the enforcement of the judgment.
These pleas are specified by cls. (a) to (f) of s. 13 of the Code. According to the Solicitor-General, as a result of the fiction introduced by s. 4(3), when a foreign judgment to which s. 4(1) applies is I sought to be enforced by a suit in an Indian court it would not be open to the judgment-debtor to urge that the judgment or decree has not been passed by a( court of competent jurisdiction ; though such a plea is permissible under s. 13(a) it is excluded by operation of s. 4(3) of the Order; the remaining pleas would still be available to the judgment-debtor. If it is held that the word " effect shall be given " means that the decree shall be executed quite clearly all the pleas recognised by s. 13 of the Code would be inapplicable.
Therefore, according to the respondent, the present decree cannot be executed but must be enforced by a suit and it would be open to the judgment-debtor to raise pleas (b) to (f) recognised by s. 13 of the Code. This argument is sought to be supported on the ground that the jurisdiction which is protected by s. 4(1) is a national or local jurisdiction whereas the competent jurisdiction to which reference is made in s. 4(3) is the international jurisdiction. The distinction between these two jurisdictions is based on the statement contained in an earlier edition of Dicey's "Conflict of Laws" to the effect that " Proper Court means a court which is authorised by the law of the country to which it belongs or under whose authority it acts, to adjudicate upon a given matter, whereas 'Court of competent jurisdiction means a Court which has, according to the principles maintained by English Courts, the right to adjudicate upon a given matter"(1). We ought to add that these definitions have been given by Dicey only to explain the meaning of the said words used by him in his Digest and nothing more, and even so it is not shown that they find a place in the latest edition of the book.
(1) Dicey's " Conflict of Laws", 6th Ed., P. 345.
36 276 In considering the merits of this argument it is necessary first to bear in mind what is meant by the clause " a court of competent jurisdiction within that Dominion ". This clause in substance provides inter alia that the judgment should be given effect to within the territories of either of the two Dominions, and in doing so the said judgment should be treated as if it had been passed by a court of competent jurisdiction within that Dominion. The context thus clearly shows that the words " that Dominion " indicate the Dominion where effect is being given to the judgment; it cannot possibly mean the Dominion in which the judgment had been delivered, because the competent jurisdiction of the court to deliver the said judgment has been already provided for by s. 4(1). It would, we think, be idle to make any distinction between the jurisdiction prescribed by s. 4(1) and the competent jurisdiction to which reference is made in s. 4(3). Thus s. 4(3) requires that in the Dominion where effect is being given to a judgment, the judgment should be treated as passed by a court of competent jurisdiction in that Dominion. If that be so it would be difficult to accept the plea that the only way in which effect should be given is to recognise the judgment as a foreign judgment as suggested by the learned Solicitor-General. If, for instance, in the present case the judgment of the Federal Court is treated by the statutory fiction as one passed by the court of competent jurisdiction in India the words it effect shall be given " used in the said clause must inevitably mean that the decree following upon that judgment should be executed in India on the basis that the judgment has been competently pronounced by an Indian court. Indeed it is clear that unless cl. (3) intended to provide for the execution of the judgment covered by cls. (1) and (2) it would serve no purpose whatever. To say that cl. (3) merely saves a possible plea in s. 13(1) is to ignore the effect of cl. (1) itself. By cl. (1) the jurisdiction of the specified court to deal with the pending proceedings is provided, and so there could be no challenge to the said jurisdiction any longer. We are, therefore, satisfied that cl. (3) in 277 effect lays down that the judgment, decree, order or sentence to which the Order applies is executable and would be executed as though it bad been passed or pronounced by a competent court in the Dominion where execution is sought.
This conclusion is fortified if we bear in mind that a sentence pronounced by a criminal court is dealt with in the same manner as a judgment delivered or order made by a civil court. It, would be far-fetched to suggest that in the case of a sentence pronounced by a criminal court all that cl.
(3) authorises to be done is to take recourse to extradition proceedings permitted by law and nothing more. We must, therefore, hold that reading the three clauses of s. 4 together the result is that the pending proceedings to which cl. (1) applies would continue before the specified courts even though the jurisdiction of the said courts may otherwise have been affected by the passing of the Act or the transfer of certain territories, that the appeals would be taken against the judgments or orders passed in the said proceedings in the same manner in which they would have been allowed if the original proceedings had been instituted after the appointed day, and that the final judgment, decree, order or sentence in the said proceedings would be executed in either Dominion as if the said proceedings had terminated in that manner in a competent court in the Dominion where execution is sought. Having regard to the very serious departure which has been made by cl. (3) from the ordinary provisions of private international law it would not be unreasonable to draw additional support to our conclusion that the scope and extent of the proceedings covered by cl. (1) is limited only to such cases where jurisdiction of the specified court was affected by the passing of the Act or the transfer of certain territories.
It seems to us difficult to assume that in making the Order the Governor-General intended that all decrees, judgments or orders passed by all the courts in the three specified States should fall under cl. (1) and should be capable of immediate execution in either Dominion under cl. (3). If that were so it is not easy 278 to appreciate why the two other Provinces which formed part of Pakistan as well as the other Provinces in India should have been excluded from the scope of this Order. It seems to us that the main. object of the Order was not to disturb or interrupt judicial proceedings pending in the respective courts in the Provinces specified where it was apprehended that the jurisdiction of the said courts would be affected by the passing of the Act. We have carefully considered the three clauses in question and we are satisfied that on a fair and reasonable construction s. 4(1) cannot be extended to pending proceedings in respect of which the trial court's jurisdiction was in no way affected by the passing of the Act or the transfer of any territories.
At this stage we may conveniently refer to three decisions of the Calcutta High Court on which Mr. Pritt relied and to which the High Court has referred in its judgment. In Protap Kumar Sen & Anr. v. Nagendra Nath Mazumdar (1) the Calcutta High Court was dealing with an execution proceeding initiated by the decree-holder in the Alipore Court with a certificate of non-satisfaction issued by the Sub-Judge at Jessore who had passed the decree under execution. The validity of the non-satisfaction certificate appears to have been challenged by the judgment-debtor. The High Court held that the Jessore Court was competent to grant a certificate of non-satisfaction having regard to the provisions of s.
4(1) and (3) of the Order. The other point which was raised was in regard to the validity of the Order itself. It was urged that after the Indian Constitution was adopted the Indian Independence Act and orders issued thereunder were no longer in force having regard to the provisions of art. 395 of the Constitution. This argument was also rejected. We may add that the respondent has not urged before us that the Order is no longer in force and so it is unnecessary to consider that point. This decision, therefore, is not of much assistance in construing the material words used in s. 4(1).
In Ahidhar Ghose v. Jagabandhu Roy (2) a decree (1) A.I.R. 1951 Cal. 511.
(2) A.I.R. 1952 Cal. 846.
279 sought to be executed bad been passed by the Alipore Court on compromise. It was a suit between a zemindar who held a Patni in respect of lands which at the institution of the suit lay wholly within the jurisdiction of Alipore Court but as a result of the partition part of the land went into Pakistan and thus R. ceased to be under the jurisdiction of the Alipore Court. The compromise decree provided for the payment of kist amount by stated installments and it further directed that in case of default of payment of any of the said instalments the entire decretal amount then outstanding would be realisable by the attachment and sale of the property in default. Since the property of the Patni tenure was situated partly within the jurisdiction of Alipore Court and partly outside, the judgment-debtor raised a plea that the claim made by the decree-holder for sale of the property within jurisdiction was incompetent. With that part of the case we are not concerned in the present appeal. So far as the applicability of s. 4(1) of the Order is concerned the court held that s. 4(1) applied to the proceedings and that we think was clearly right. It was a proceeding validly instituted before the Alipore Court; the jurisdiction of the Alipore Court was affected by partition, and so the proceeding fell within the scope of s. 4(1). There are some general observations made in the judgment on which reliance is placed by Mr. Pritt, but the said general observations must be read in the context of the facts in the case with which the court was concerned. Thus this decision also does not really assist the appellants.
In Naresh Chandra Bose v. Sachindra Nath Deb and Ors.
(1),the principal question which the court considered was the effect of the provisions of Art. 395 of the Constitution on the validity and the continuance of the Order. As we have already pointed out, with this aspect of the matter we are not concerned in the present appeal.
The next question which must be considered is whether the present suit falls within s. 4(1) at all. The answer to this question must obviously be in the (1) A.I.R. 1956 Cal. 222.
280 negative.The material allegations made by the appellants in the plaint filed by them in the present suit clearly show that the whole cause of action had accrued within the jurisdiction of the Senior Sub-Judge at Lahore. The original contract had taken place at Lahore, the property agreed to be sold was situated at Lahore, the earnest amount of Rs. 5,00,000 was paid by the appellants to the respondent at Lahore, the breach of the contract took place at Lahore, and so under s. 20(c) of the Code of Civil Procedure the suit was properly filed in the court at Lahore and the jurisdiction of the said court to try the suit was in no manner affected by the passing of the Actor the transfer of territory. This position was not and is not disputed. There is, therefore, no doubt that the trial court could have proceeded to deal with this suit even if the Order in question had not been passed; and so the statutory fiction raised by the provisions of the Order cannot be invoked in enforcing a decree passed by the Federal Court in an appeal arising from such a suit. In our opinion, therefore, the High Court was in error in holding that the provisions of s. 4 applied to the decree sought to be executed by the appellants.
In view of this conclusion it is not necessary to deal with the other points which have been decided by the High Court and which were argued before us. If we had come to the conclusion that the suit out of which the appeal before the Federal Court arose was a pending proceeding under s. 4(1) it would have been necessary for us to decide some other questions. We would, for instance, have had to consider which is the court of competent jurisdiction in India under s. 4(3) is it the Supreme Court ? If yes, do the provisions of O.45, r. 15 apply if not, does the statutory fiction raised by s. 4 assist the appellants in invoking the said provisions ? If the statutory fiction does not assist the appellants, to what court should they have applied ? Are the present proceedings in the nature of execution proceedings before a transferee court? Is the certificate of no satisfaction prescribed by O. 21, r. 6(b) necessary ? It would also have been necessary to consider the character of the judgment-debt with the 281 object of deciding whether or not the decree vested in appellant 2, or in the Custodian of Evacuee Property at Lahore. As we have already indicated, since we have held that the provisions of s. 4 are inapplicable to the decree sought to be executed by the appellants it is unnecessary to decide these questions.
Thus, though we have differed from the conclusion of the High Court in regard to the applicability of s. 4 of the Order that does not affect the final result of the appeal ;
because on the view we take about the scope and effect of the provisions of s. 4 we hold that the application made by the appellants before the High Court under O. 45, r. 15 was incompetent, and so the High Court was right in dismissing it.
The appeal accordingly fails and is dismissed with costs.
KAPUR J. I regret I am unable to agree with the majority judgment proposed which I have read with care and respect that it necessarily deserves and I now proceed to give my reasons for this dissent.
This is an appeal by a certificate under Art. 133 (1) (a) and (c) against the judgment and order of the High Court of Punjab dismissing the appellants' application for execution.
The appellants, the Associated Hotels of India Ltd. and R. B. Mohan Singh Oberoi, the petitioners in the High Court, by an agreement, dated October 2, 1946, agreed to purchase and the respondent agreed to sell certain properties situate at Lahore now in Pakistan for a, sum of Rs. 52,75,000. In pursuance of the said agreement the appellants paid to the respondent a sum of Rs. 5 lacs by way of deposit or earnest money. The sale was not completed as the respondent could not make out a good title to the property agreed to be sold.
On May 8, 1947, the appellants filed a suit in the court of the Senior Subordinate Judge at Lahore against the respondent for the recovery of Rs. 5,10,000, the amount deposited and interest thereon @ 6% per annum and also claimed future interest. This suit was decreed by the Senior Subordinate Judge on March 14,1949, for a sum of Rs.
5,08,333/5/4 with future interest @ 5% per 282 annum but only in favour of the second appellant R. B. Mohan Singh Oberoi. The respondent took an appeal to the High Court at Lahore and on November 24, 1949, the decree of the trial court was reversed and the suit dismissed with costs.
Against that judgment and decree both the appellants took an appeal to the Federal Court of Pakistan. On December 21, 1953, the Federal Court of Pakistan allowed the appeal, set aside the decree of the High Court and restored that of the Senior Subordinate Judge, Lahore.
After preferring his appeal in the High Court the respondent applied to and on April 27, 1949, obtained from the High Court an order of stay of the execution on the condition that he deposited a sum of Rs. 3 lacs in the High Court and gave security for the balance. This sum was deposited and the security was furnished and thus the execution was stayed. After the judgment of the High Court the respondent applied to that Court for the refund of the three lacs deposited by him and an order to that effect was made on December 16, 1949. By the same order the Lahore High Court directed notice to be issued to the Custodian of Evacuee Property, Lahore. On December 20, 1949, the Custodian applied for a review of the order of the High Court allowing the money to be withdrawn by the respondent on the allegation that the amount deposited was evacuee property.
He also obtained an interim stay of the order directing the return of money to the respondent. On December 21, 1953, the Federal Court of Pakistan reversed tile decree of the Lahore High Court. Thereafter on January 6, 1954, the respondent applied to the High Court praying that the amount deposited be applied towards a part satisfaction of the decree passed against him. On March 31, 1954, R. B. Mohan Singh Oberoi appellant No. 2, applied for the transfer of the Rs. 3 lacs along with the relevant records relating thereto, to India under the Transfer of Evacuee Deposits Ordinance, 1954 (Ordinance No. 1 of 1954), and the subsequent enactment. In the alternative he submitted that the Custodian of Evacuee Property was not entitled to that money and prayed that it be paid to him 283 at Lahore or that it be paid to a person other than the Custodian of Evacuee Property but not to the respondent as the latter had no interest in the money. On January 30, 1956, the Lahore High Court which by then became the High Court of West Pakistan held (1) that the money could not be transferred to India ; (2) allowed the petition for review; and (3) directed the Custodian to report what interest, if any, any evacuee had in the money. That matter, we were informed, is under appeal in the Supreme Court of Pakistan.
On January 19, 1955, the appellants filed an application in the Punjab High Court at Chandigarh under Order 45, Rule 15, Civil Procedure Code and s. 151 of the Code for transmission of the decree of the Pakistan Federal Court to the Court of the Subordinate Judge at Simla and for directions to determine the decretal amount. In the alternative the appellants prayed for the decree being sent to the District Judge for execution. They alleged therein that under the provisions of Art. 4(3) of the Indian Independence (Legal Proceedings Order), 1947, hereinafter called the Order made under s. 9 of the Indian Independence Act, hereinafter called the Act, effect could be given within the territories of the Union of India to the decree passed by the Federal Court of Pakistan and it could be executed as if it had been passed by a court of competent jurisdiction within the Union of India; that the decree was to be treated as if it was a decree of the Supreme Court of India and was executable by the court of the senior Subordinate Judge at Simla on the decree being transmitted to it by the High Court as provided in Order 45, Rule 15, Civil Procedure Code. In the alternative it was prayed that if the procedure under Order 45, Rule 15, Civil Procedure Code, was not appropriate and applicable, the decree be sent for execution to the Senior Subordinate Judge's Court "as if it had been passed by the Court ". With this petition an application in the form set out in Order 21, Rule 11, Civil Procedure Code was attached.
The respondent pleaded that the decree being a 37 284 decree of a foreign court could not be executed in India and O. 45, r. 15, was inapplicable; that the Act having been repealed by the Indian Constitution the Order had ceased to exist; that the decree vested in the Custodian of Evacuee Property, Lahore and the "appellants being divested of it could not execute it; that the petition wag not maintainable because the appellants had not filed a certificate of non satisfaction of the court which passed the decree; that Art.
4(3) of the Order was inapplicable as the suit pending in the Lahore court at the time of the partition did not suffer from any defect of jurisdiction as a result of the partition of India; and that the appellants could not simultaneously take execution proceedings in the courts of two independent countries in regard to the same decree.
On January 22, 1957, the High Court of Punjab dismissed the petition holding that in spite of the coming into force of the Indian Constitution the Order was still in force; that " all cases pending in all courts in the two dominions were intended to be covered by the Order ", and the only way in which a decree of a civil court in Pakistan could be given effect to was to allow it to be executed in India; that the court of competent jurisdiction mentioned in the Order would be the court of the Subordinate Judge First Class at the place where the decree was sought to be executed and therefore the proper procedure was not to apply to the High Court but to apply for a transfer certificate and after obtaining a non-satisfaction certificate from the Federal Court of Pakistan or from any other competent court in Pakistan, to execute the decree in the court of the Senior Subordinate Judge, Simla; that the appellants had been divested of all rights in the decree by the Evacuee Law of Pakistan and they had no right to execute the decree. In this connection the High Court held that the situs of the decree was Pakistan where the decree was passed and that the amount of Rs. 3 lacs which was being claimed by the Custodian of Evacuee Property, Lahore, will be taker. into account after the decision of that matter by the courts of Pakistan. Thus the petition of the appellants 285 was dismissed. It is against this judgment and order that the appellants have come in appeal to this court.
The first question for decision is the construction of the fourth clause of the Order. The High Court did not accept the contention of the respondent that the Order was applicable only to proceedings over which R. the court had lost its territorial jurisdiction consequential upon the division of the border districts and not to in proceedings pending in any court in the provinces of the two dominions, i.e., in any court of the provinces of East and West Punjab or East or West Bengal. This contention was repeated before us and the same Constricted interpretation was sought to be put on the words of Art. 4(1) of the Order. An examination of the provisions of the Act and other Orders made hereunder will be helpful in determining the scope of Art. 4 of the Order. The object of the Act was to provide for the setting up of the two independent Dominions in India, to make suitable changes in the Government of India Act, 1935, and " to provide for the matters consequential on or connected with the getting up of those Dominions ". By s. 1 two separate Comings of India and Pakistan were set up. By. 2 the territories which were to fall in the two respective Dominions were delimited. Certain provinces wholly fell in one Dominion or the other, but three provinces, i.e., Bengal, the Punjab and Assam were to be provided between the two Dominions which was done under ss. 3, 4 and 9(6) of the Act. Under s. 3 the province of Bengal, as it was constituted under the Government of India Act, 1935, ceased to exist and in as place two new provinces to be respectively known East Bengal and West Bengal were constituted. Under the first schedule of the Act certain districts wholly fell in East Bengal and the rest in West Bengal. this was subject to the Award of the Boundary Commission in regard to the boundary between the two provinces which meant between contiguous districts the two new provinces. Similarly under s. 4 the province of the Punjab was divided into West Punjab and East Punjab and whole districts mentioned in schedule 2 fell in West Punjab and the rest in East 286 Punjab, but this was also subject to the Award to be made by the Boundary Commission which though made on August 12, 1947, was published on August 17, 1947, and thus became operative on that day. There was some dispute as to a portion of the province of Assam and it, as a result of a plebiscite, was in corporated in the province of East Bengal and the rest of the province of Assam was constituted under s. 9(6) of the Act into what became the province of Assam.
The Award of the Punjab Boundary Commission shows that only small areas of the border tehsils of the border districts of Gurdaspur, Amritsar and Ferozepur in East Punjab and Sialkot, Lahore and Montgomery in West Punjab, i.e., tehsils along the rivers Ravi and Sutlej were affected by the Aware and the territories exchanged were not numerous of large by any standard.
The setting up of the two Dominions and the division of the three provinces of Bengal, the Punjab and Assam gave rise to many problems relating to legislative, executive and judicial branches of the Government including the division of assets, liabilities and powers. Certain provisions were made in the Act itself, but in order to give effective operation to the purposes of the Act it became necessary to promulgation Orders which was provided for in s. 9 of the Act an which comprised all the three branches of govern mental activity; executive, legislative and judicial Section 9 provided and I quote the relevant provisions:
" 9(1) The Governor General shall by order make such provision as appears to him to be necessary expedient(a) for bringing the provisions of this Act in the effective operation ;
(b) for dividing between the new Dominions, and between the new Provinces to be constituted under this Act, the powers, rights, property, duties and liabilities of the Governor General or, as the case me be, of the relevant Provinces which, under this A are to cease to exist;
(c) ......................................................
.
287 (d) for removing difficulties arising in connection with the transition to the provisions of this Act;......
(i) so far as it appears necessary or expedient in connection with any of the matters aforesaid, for varying the constitution, powers or jurisdiction of any legislature, court or other authority in the new Dominions and creating new legislatures, courts or other authorities therein ".
By sub-s. (6) the Province of Assam on a certain event happening was to cease to exist and was to be reconstituted.
Provision was also made in the section for continuance of the existing laws. In exercise of the powers conferred upon him under the Act the Governor General of India promulgated a number of Orders.
In regard to other provinces unaffected by the Act, it was unnecessary to make any Order as to the executive, judicial or legislative functions of the government and consequently none were made. But wherever any provision was necessary whether in the sphere of the Dominion or of the provinces of Bengal, the Punjab and Assam various Orders were made by the Governor General which included Orders
