When is a Foreign judgment of Canada, USA or Australia not conclusive in India?

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When is a Foreign judgment of Canada, USA or Australia not conclusive in India?

Say you are an NRI or a foreign Citizen and you have got a foreign decree or judgment which is to be applied in India. Do you know that the foreign judgment with you may not be conclusive in India (Chandigarh, Punjab or Haryana) and Courts in India (Chandigarh, Punjab or Haryana) may refuse to accept them? This is applicable to you if you are :-

  • (Non-Resident Indian) NRI in Chandigarh, Punjab, Haryana or India
  • Lawyer in Chandigarh, Punjab, Haryana or India (Chandigarh, Punjab or Haryana) and (Non-Resident Indian) NRI client has a foreign decree with him/ her
  • You have a divorce or child custody judgment in your favor and you want to execute it in India
  • You have a property dispute or succession matter or estate or will judgment in your favor and you want to execute it in India
  • any other such or similar order which you want to execute in India (Chandigarh, Punjab or Haryana) or you want to apply in India

Foreign judgment when not binding: circumstances:- section 13, CPC

Under Section 13 of the Code, a foreign judgment is conclusive and will operate as res judicata between the parties thereto except in the cases mentioned therein. In other words, a foreign judgment is not conclusive as to any matter directly adjudicated upon, if one of the conditions specified in clauses of Section 13 is satisfied and it will then be open to a collateral attack.

Dicey rightly states:- ‘A foreign judgment is conclusive as to any matter thereby adjudicated upon and cannot be impeached for any error either of fact; or of law.’

In the following six cases, a foreign judgment shall not be conclusive:

  • Foreign judgment not by a competent court
  • Foreign judgment not on merits
  • Foreign judgment against International or Indian Law
  • Foreign judgment opposed to natural justice
  • Foreign judgment obtained by fraud and
  • Foreign judgment founded on a breach of Indian Law.

It is a fundamental principle of law that the judgment or order passed by the court which has no jurisdiction is null and void. Thus, a judgment of a foreign court to be conclusive between the parties must be a judgment pronounced by a court of competent jurisdiction. Such judgment must be by a court competent both by the law of the State which has constituted it and in an international sense and it must have directly adjudicated upon the “matter” which is pleaded as res judicata. But what is conclusive is the judgment i.e, the final adjudication and not the reasons for the judgment given by the foreign court.

Thus, if A sues B in a foreign court, and if the suit is dismissed, the decision will operate as a bar to a fresh suit by A in India (Chandigarh, Punjab or Haryana) on the same cause of action. On the other hand, if a decree is passed in favor of A by a foreign court against B and he sues B on the judgment in India, B will be precluded from putting in issue the same matters that were directly and substantially in issue in the suit and adjudicated upon by the foreign court.

The leading case on the point is Gurdiyal Singh v. Rajah of Faridkot. In that case, A filed a suit against B in the court of the Native State of Faridkot, claiming Rs 60,000 alleged to have been misappropriated by B, while he was in A’s service at Faridkot. B did not appear at the hearing, and an ex parte decree was passed against him. B was a Native of another Native State Jhind. In 1869, he left Jhind and went to Faridkot to take up service under A. But in 1874, he left A’s service and returned to Jhind. The present suit was filed against him in 1879; when he neither resided at Faridkot nor was he domiciled there. On these facts, on general principles of international law, the Faridkot court had no jurisdiction to entertain a suit against B based on a mere personal claim against him. The decree passed by the Faridkot court in these Circumstances was an absolute nullity. When A sued B in a court in British India, against B on the judgment of the Faridkot court, the suit was dismissed on the ground that Faridkot court had no jurisdiction to entertain the suit. The mere fact that the embezzlement took place at Farldkol, was not sufficient to give jurisdiction to the Faridkot court. But if B was residing at Faridkot at the date of the suit. The Faridkot court would have had complete jurisdiction to entertain the suit and to pass a decree against him.

Similarly, a court has no jurisdiction to pass a decree in respect of immovable property situated in a foreign State. A decree passed by a court in Ceylon against a native of India (Chandigarh, Punjab or Haryana) in a suit on a contract who was not residing in Ceylon is a nullity; and cannot be enforced by an Indian court.

Foreign judgment not on merits
In order to operate as its res judicata, a foreign judgment must have been given on merits of the case. A judgment is said to have been given on merits when, after taking evidence and after applying his mind regarding the truth or falsity of the plaintiff’s case, the judge decides the case one way or the other. Thus, when the suit is dismissed for default of appearance of the plaintiff; or for non-production of the document by the plaintiff even before the written statement was filed by the defendant, or where the decree was passed in consequence of default of defendant in furnishing security, or after refusing leave to defend, such judgments are not on merits. However, the mere fact of a decree being ex parte will not necessarily justify a finding that it was not on merits.

The real test for deciding whether the judgment has been given on merits or not is to see whether it was merely formally passed as a matter of course, or by way of penalty for any conduct of the defendant, or is based upon a consideration of the truth or falsity of the plaintiff’s claim, notwithstanding the fact that the evidence was led by him in i he absence of the defendant.

Foreign judgment against International or Indian law
A judgment based upon an incorrect view of international law or a refusal to recognize the law of India (Chandigarh, Punjab or Haryana) where such law is applicable is not conclusive. But the mistake must be apparent on the face of the proceedings. Thus, where in a suit instituted in England on the basis of a contract made in India, the English court erroneously applied English Law, the judgment of the court is covered by this clause inasmuch as it is a general principle of Private International Law that the rights and liabilities of the parties to a contract are governed by the place where the contract is made (lex loci contractus).

“When, therefore, a foreign judgment is founded on a jurisdiction or on a ground not recognized by Indian law or International law, It is a judgment which Is in defiance of the law. Hence, it is not conclusive of the matters adjudicated therein and, therefore, unenforceable in this country.

Foreign Judgment opposed to natural justice
It is the essence of a judgment of a court that it must be obtained after due observance of the Judicial process. i.e.. the court rendering the Judgment must observe the minimum requirements of natural justice—it must be composed of impartial persons, act fairly, without bias, and in good faith; it must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case. A judgment which is the result of bias or want of impartiality on the part of a judge will be regarded as a nullity and the trial “coram non judice.

Thus, a judgment given without notice of the suit to the defendant or without affording a reasonable opportunity of representing his case is opposed to natural justice. Similarly, a judgment against a party not properly represented in the proceedings or where the judge was biased is contrary to natural justice and, therefore. does not operate as res judicata.

But the expression “natural justice’ in clause of Section 13 relates to the Irregularities in procedure rather than to the merits of the case. A foreign judgment of a competent court therefore, is conclusive even If it proceeds on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are assured; correctness of the judgment in law or on evidence is not predicated as condition for recognition of its conclusiveness by the municipal court. Thus, a foreign judgment is not open to attack on the ground that the law of domicile had not been properly applied in deciding the validity of adoption or that the court disagrees with the conclusion of the foreign court, if otherwise the principles of natural justice have been complied with

Foreign judgment obtained by fraud
It is a well-established principle of Private International Law that if a foreign judgment is obtained by fraud, it will not operate as res judicata.

It has been said, “Fraud and justice never dwell together” (fraus et jus nunquam cohabitant); or ‘Fraud and deceit ought to benefit none” (fraus et dolus nemini patrocinari debent).

Lord Denning observed. “No judgment of a court. No order of a Minister can be allowed to stand, if it has been obtained by fraud.” Cheshire rightly states, “It is firmly established that a foreign judgment is impeachable for fraud in the sense that upon proof of fraud it cannot be enforced by action in England. All judgments whether pronounced by domestic or foreign courts are void If obtained by fraud, for fraud vitiates the most solemn proceeding of a court of justice.

Explaining the nature of fraud, de Grey, C.J. stated that though a judgment would be in judicata and not impeachable from within, it might be impeachable from without. In other words, though it is not permissible to show that the court was “mistaken”, It might be shown that it was “misled”. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely. On the merits, the decision was one which should not have been rendered, but it can be set aside it the court was imposed upon or tricked into giving the judgment.

Recently, in A.V. Papayya Sastry v. Govt. of A.P. the Supreme Court observed:

Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the cost of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of ‘finality of litigation cannot be stretched to the extent of an absurdity that it can be utilized as an engine of oppression by dishonest and fraudulent litigants.

In the leading case of Satya v. Teja Singh, a husband obtained a decree of divorce against his wife from an American court averring that he was domiciled in America. Observing that the husband was not a bona fide resident or domicile of America, and he had played fraud on a foreign court falsely representing to it incorrect jurisdictional fact, the Supreme Court held that the decree was without jurisdiction and a nullity.
Again, in Narasimha Rao v. Venkata lakshmi A (husband) obtained a decree of divorce against B (wife) again from an American court on the ground that he was a resident of America. Then he remarried C. B. filed a criminal complaint against A and C for bigamy. A and C filed an application for discharge. Dismissing the application, the Supreme Court held that the decree of dissolution of marriage was without jurisdiction inasmuch as neither the marriage was solemnized nor the parties last resided together In America. It was, therefore, unenforceable in India.

In S.P. Chengalvaraya Naidu v. Jagannath, the Supreme Court stated, “It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eye of the law. Such a judgment/decree-by the first court or by the highest court—has to be treated as a nullity by every court, whether superior or inferior. It can he challenged in any court even in collateral proceedings (emphasis supplied)
In A.V. Papayya sastry v. Govt. of A.P. after referring to leading cases on the point, the Supreme Court stated:

It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the court, tribunal or authority is a nullity and non est in the eye of law. Such a judgment, decree or order—by the first court or by the final court—has to be treated as nullity by every court, superior or inferior. It can be challenged in any court, at any time, in appeal, revision, and writ or even in collateral proceedings.

The fraud may be either fraud on the part of the party invalidating a foreign judgment in whose favor the judgment is given or fraud on the court pronouncing the judgment. Such fraud, however, should not be merely constructive, but must be actual fraud consisting of representations designed and intended to mislead; a mere concealment of fact is not sufficient to avoid a foreign judgment. The High Court of Madras has held that merely because the plaintiff obtains a decree upon perjured evidence, it cannot be said that the decree has been obtained by fraud. It is submitted that the view expressed by the High Court of Madras appears to be erroneous in view of the above discussion and does not lay down correct law.

Foreign judgment founded on breach of Indian law
Where a foreign judgment is founded on a breach of any law in force in India, It would not be enforced In India. The rules of Private International Law cannot be adopted mechanically and blindly. Every Case which comes before an Indian court must be decided in accordance with Indian law. It is implicit that the foreign law must not offend our public policy.

Thus, a foreign judgment for a gaming debt or on a claim which is barred under the law of Limitation in India (Chandigarh, Punjab or Haryana) is not conclusive. Similarly, a decree for divorce passed by a foreign court cannot be confirmed by an Indian court if under the Indian law the marriage is indissoluble.

It is Implicit that the foreign law and foreign judgment would not offend against our public policy.

Presumption as to foreign judgment:
Section 14 Section 11 of the Code declares that the court shall presume, upon the production of any document purporting to be a certified copy of a foreign judgment, that such judgment was pronounced by a court of competent jurisdiction, unless the contrary appears on the record, or is proved. However, if for admissibility of such copy any further condition is required to be fulfilled, it can be admitted in evidence only if that condition is satisfied.

Thus, in Narshimha Rao v. Venkata Lakshmi the Supreme Court held that mere production of photostat copy of a decree of a foreign court is not sufficient. It is required to be certified by a representative of the Central Government in America.

Submission to jurisdiction of foreign court
It is well-established that one of the principles on which foreign courts are recognized to be internationally competent is voluntary submission of the party to the jurisdiction of such foreign court. The reason behind this principle is that having taken a chance of judgment in his favor by submitting to the jurisdiction of the court, It is not open to the party to turn round when the judgment is against him and to contend that the court had no jurisdiction.

Submission to jurisdiction of a foreign court may be express or implied. Whether the defendant has or has not submitted to the jurisdiction of n foreign court is a question of fact which must be decided in the light of the facts and circumstances of each case.

Foreign judgment and res judicata
A foreign judgment is conclusive as to any matter adjudicated upon by a competent foreign court. Section 13 of the Code in essence enacts a rule of res judicata In relation to foreign judgments. Hence, if a foreign Judgment is delivered by a court having jurisdiction in the matter, it would operate as res judicata.

Conclusiveness of foreign judgment
As stated above. A foreign judgment is conclusive and will operate as res judicata between the parties and privies. It is firmly established that a foreign judgment can be examined from the point of view of competence but not of errors. In considering whether a judgment of a foreign court is conclusive, the courts in India (Chandigarh, Punjab or Haryana) will not require whether conclusions recorded by n foreign court are correct or findings otherwise tenable. In other words the court cannot go into the merits of the original claim and It shall be conclusive as to any matter thereby directly adjudicated upon between the same parties subject to the exceptions enumerated in clauses of Section 13.

Irregularities not affecting foreign judgment
There is distinction between want of jurisdiction and irregular exercise of jurisdiction. In the former case, a decree passed by the court is nullity and non est. In the latter case, the decree is merely irregular or wrong but not without jurisdiction and cannot be ignored.
Once a foreign court has jurisdiction in the matter, the decree passed by it cannot be held to be without jurisdiction. In R. Viswanathan v. Rukn-ut-Mulk Syred Abdul, Shah J. (as he then was) stated:
In considering whether a judgment of a foreign court is conclusive, the court in India (Chandigarh, Punjab or Haryana) will not inquire whether conclusions recorded thereby are supported by the evidence, or are otherwise correct, because the binding character of the Judgment may be displaced only by establishing that the case falls within one Or more of the six clauses of Section 13, and not otherwise. (Emphasis supplied)

Effect of foreign judgment
A foreign judgment is conclusive as to any matter adjudicated upon between the parties. Such judgment is conclusive, binding and would create res judicata between the same parties or between the parties under whom they or any of them claim.

Enforcement of foreign judgment
A foreign judgment which is conclusive under Section 13 of the Code can be enforced in India (Chandigarh, Punjab or Haryana) in the following ways:

  • By instituting a suit on such foreign judgment; or
  • By instituting execution proceedings

Suit on foreign judgment
A foreign judgment may be enforced by instituting a suit on such foreign judgment. The general principle of law Is that any decision by a foreign court, tribunal or quasi-judicial authority is not enforceable In a country unless such decision is embodied in a decree of a court of that country, In such suit, the court cannot go into the merits of the original claim and it shall be conclusive as to any matter thereby directly adjudicated upon between the same parties. Such a suit must be filed within a period of three years from the date of the judgment.

Execution proceedings
A foreign judgment may also be enforced by proceedings In execution in certain specified cases mentioned in Section 44-A of the Code. The said section provides that where a certified copy of a decree of any of the superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India (Chandigarh, Punjab or Haryana) as if it had been passed by the District Court. When a foreign judgment is sought to be executed under Section 44-A, it will be open to the judgment-debtor to take all objections which would have been open to him under Section 13 if a suit had been filed on such judgment. The fact that out of six exceptions then, has been due compliance with some of the conditions and there has been no violation of some of the exceptions Is of no avail. The decree cab be aerated under Section 44-A only if all the conditions of Section 13(a) to (f) are satisfied. (Emphasis supplied)

Foreign award
An award passed by a foreign arbitrator and enforceable in a country where it was made, can be enforced in India.

Execution of foreign judgment
A foreign judgment which is conclusive and does not fall within the mischief of any of the clauses of Section 13 of the Code. may be enforced by taking out execution proceedings in India.

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