http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 8

CASE NO.:

Appeal (civil) 443 of 1994

PETITIONER:

GOBIND RAM

Vs.

RESPONDENT:

GIAN CHAND

DATE OF JUDGMENT: 27/09/2000

BENCH:

V.N.KHARE, S.N. PHUKAN

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T.......J

PHUKAN, J. JUDGMENT This appeat by special leave is

directed against the judgment of Delhi High court dated 20th

December, 1991 passed in RFA No. 50 of 1977.

We may briefly state the undisputed facts. IT. a

appellant agreed to sale the disputed property situated at Lajpst

Nagaar (IV), New Delhi for a consideration of Rs.'16,000/- to the

resprdent and accordingly on 24^ January. 1973 an agreement to

sale was executed and a sum of RS.IOOO/- WAS paid as earnest

money to the appellant. Respondent filed the suit for specific

performance of the contract as the appellant failed to execute

the sale deed within time. On 6/10/1976 the suit was decreed and

the respondent deposited balance consideration of Rs.15,000/- in

the Trial Court. The appeal filed by the appellant in the High

Court was also dismissed by the impugned judgment dated 20h

December, 1991. However, to mitigate the hardship to the

appellant and as the respondent agreed to pay more sum, High

Court directed the respondent to deposit a further sum of

Rs.1,00,000/- which was to be released to the appellant on giving

possession of the suit property. The said sum was also deposited

in the registry of the High Court by the respondent and it is

being kept in interest bearing fixed deposit. The appellant has

filed the present appeal and that is how the parties are

We have heard learned senior counsel for the parties. Only

contention urged before us by the iearned senior counse'lfor the

appellant is that Instead of decree for specific porformance,

compensation may be awarded. At the time of issuance of notice

in the special leave petition, teamed senior counsel for the

appellant offered to pay Rs.1,16,000/- to the respondent to

cancel the contract and get out of the decree. The respondent

after his appearance before this court offered another sum of

Rs.50,000/- so as to make the total consideration of

Rs.1,50,000/-, In view of the above position leave was granted.

When the matter came up before us another attempt was made for a

settlement, which failed. At that time learned senior counsel

for the respondent on instruction made an offer that respondent

would pay further sum of Rs.l ,50,000/- as consideration.

Learned senior counsel for the appellant has relied on this

court's judgment in Damacherfa Anjaneyufu end Another vs.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 8

Damacherla Venkate Sesheish and Another MR 1987 SC- 1641.

On the facts of that case the court recorded the finding that in

case of grant of a decree of specific performance hardship would

be claused to defendant and therefore compensation granted.

Facts of present case are different. Next decision on which

learned senior counsel for the appeilant relied is in Parakunnan

Veetill Joseph's Son Msthew vs. Nedu'rnbera Kuruvifa's Son and

Others AIR 1987 SC 2328. We may extract the relevant portion of

the said judgment: "Section 20 of the Specific Relief Act, 1963

preserves judicial discretion to Courts as o decreeing specific

performance. The Court should meticulously consider all facts

and circumstances of the case. The Court is not bound to grant

specific performance merely because it is lawful to do so. The

motive behind the litigation should also enter into the judicial

verdict. The Court should take care to see that it is not used

as an instrument of oppression to have an unfair advantage to the

plaintiff."

It is the settled position of Saw that grant of a decree

Tor specific performance of contract is not automatic and is one

of discretion of the Court and the Court has to consider whether

it will be fair, just and equitable. Court is guided by

principle of justice, equity and good consensus. As stated in P.

V. Joseph's Son Mathew (supra) the court should meticulously

consider all facts and circumstances of the case and motive

behind the litigation should also be considered. High Court

considering the facts of this case and observed as follows: "We

are conscious of the fact that the defendant has been in

possession of the said quarter for the last several decades and

logical consequence of affirming the Judgment of the trial court

would mean considerable hardship to him, at the same time the

conduct of the defendant does not justify any further indulgence

by the court. We have no doubt that the defendant has tried to

wriggle out of the contract between the parties because of the

tremendous escalation in the prices of real estate properties all

over the country and in Delhi, inparticular in the last few

years."

In view of the above dear finding of the High Court that

the appellant tried to wriggle out of the contract between the

parties because of escalation in prices of real estate

properties, we hold that the respondent is entitled to get a

decree as he has not taken any undue or unfair advantage over the

appellant. it will be inequitab!e and unjust at this point of

time to deny the decree to the respondent after two courts below

have decided in favour of the respondent. While coming to the

above conclusion we have also taken note of the fact that the

respondent deposited the balance of the consideration in the

Trial Court and also the amount in the High court, as directed.

On the other hand appellant as held by the High Court tried to

wriggle out of the contract in view of the tremendous escalation

of prices of real estate properties. However, to mitigate the

hardship to the appellant we direct respondent to deposit a

further sum of Rs.3,00.000/- within 4 months from today with the

registry of this Court and the amount shall be kept in Short Term

Deposit in a nationalised bank. While giving the gbove direction

we have taken note of the offer made to us on behalf of the

respondent. This amount is to be paid to the appellant on giving

his possession of the suit property to the

respomdent within 6 months from the date of the deposit of

the - above amount. The appellant shall also be entitled to

withdraw the amount already deposited in the Trial Court and the

amount of Rs.1,00.,000/-which has been kept in Interest bearing

fixed deposit in the registry of the High Court. With the above

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 8

modification of the judgment of the High Court, appeal is

dismissed. However, on the facts and circumstances. of the-case

parties are directed to bear their own cost.

CONTENTION NO. 2:

So far as this contantion is concerned, it has to b: kept in view that

basic conditions of Section 44-A have clearly been satisfied by the

decree-holder, Respondent No.l, who to execute foreign decree

of Admiralty Court against Respondent No.2 who has suffered the

decree in personam from the English Admiralty Court. Certified copy

of the decree is already filed in the execution proceedings. It is,

admittedly, a decree passed by the superior Court of Admiralty in

England. That Court is situated in reciprocating territory as united

Kingdom has been duly notified by the Central Government as a

reciprocating territory. However, Mr. P. Chidambaram, learned

senior counsel for the appellant, submitted that even if that is so, on a

combined reading of Section 44-A and Section 39 sub-sections (1)

and (3) of the C.P.C., it must be held that before such execution

proceedings can be entertained by the Andhra Pradesh High Court in

exercise of its admiralty jurisdiction as successor to the Chartered

High Court of Madras, it must be shown that it was a competent Court

which could have entertained such a suit of Respondent No.l against

Respondent No.2 seeking decree in personam against it. He

submitted that neither the foreign decree-holder Respondent No.l nor

foreign judgment-debtor Respondent No.2 are Indian Nationals. None

of them has any connection with India as residents or having any

immovable property in India and no part of cause of action has also

arisen in India in favour of Respondent No.l against Respondent

No.2.

That the foreign decree of appellate Court is a personal decree

against Respondent No.2 who is alleged to have committed breach of

contract in London and hence the Admiralty Court's jurisdiction was

invoked in England because the suit filed by Respondent No. I

against Respondent No.2 was pertaining to the breach of salvage

contract regarding Respondent No.2's ship H.V. Al Tabish which, on

the date of the filing of the suit in English Admiralty Court, allegedly

belonged to Respondent No.2. According to Mr. P. Chidambaram,

learned senior counsel for the appellant, as no part of cause of action

in this case had arisen in India and, especially within the local

territorial limits of the Andhra Pradesh High Court, even though it may

be acting as an Admiralty Court such a suit could not have been filed

by Respondent No. I personally against Respondent No,2 in the

Andhra Pradesh High Court. If that is so, the Andhra Pradesh High

Court is not competent to execute such a decree even by resorting to

the legal fiction created by Section 44-A by treating such a foreign

decree of English Admiralty Court as if it was a decree passed by the

Andhra Pradesh Admiralty Court, in order to buttress this contention

Mr. P.Chidambaram, learned senior counsel for the appellant, gave

an extreme example. He placed a hypothetical illustration for our

consideration. An English national files a suit against another English

national for breach of contract regarding purchase of movable or

immovable property in England. A competent English Court passes a

decree at common law by way of damages for breach of contract by

the foreign defendant and in favour

of foreign plaintiff. If both the decree-holder as well as the judgment-

debtor happen to take a trip to India as tourists and if the English

decree-holder tourist finds his English judgment-debtor to be

possessed of costly wrist-watch or other costly movable property in

Agra when both of them are on a sight seeing tour of Taj Mahal at

Agra can execution of such a foreign decree be enforced in the

District: Court at: A.gra? Mr. P.Chidambaram, learned senior counsel

for the appellant, posed this question to himself. He submitted that 5

superficial reading of Section 44-A may entitle such a foreign national

English decree-holder armed with certified copy of the decree to file

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 8

executior proceedings for recovering his money claim against the

foreign judgment debtor in the District Court at Agra. He submitted

that such executior petition would be travesty of justice and would

reflect an absurd situatici which cannot be countenanced on a

conjoint reading of Section 44-A an< Sections 38, 39 & 44 of the

C.P.C.

Such an extreme contention canvassed by Mr. P.ChIdambararr

learned senior counsel for the appellant, does not realty call for any

serioc discussion in the present proceedings as we are not

concerned with such hypothetical situation. But the situation is not so

alarming as wrong assumed, with respect, by Mr.P.Chidambaram.

When we turn to Section 31 we find that a decree may be executed

either by the Court which passed it, by the Court to. which it is sent

for execution. This Section by itself refers 1

decrees passed by Indian Courts against defendants who may be

within the territorial jurisdiction of the competent Civil Court in the light

of the correct place for suing in such Courts as laid down by Sections

15 to 20 of the C.P.C. If the nature of the suit against the defendant

falls within any of these provisions then, admittedly, such a decree

can be executed by the same Court which passed the decree being a

competent Court but it can be sent by that competent Court to any

other Court for execution if the defendant has properties within the

territorial jurisdiction of any other competent Court in India and that is

what Section 39(1) provides. The said section reads as under:

39. Transfer of decree.- (1) The Court which passed a decree may, on the application

of the decree-holder, send It for execution to another Court of competent jurisdiction,"

(a)

If the person against whom the decree Is passed actually and voluntarily resides or

carries on business, or personally works for gain, within the local limits of the jurisd

iction

of such other Court, or (b) if such person has not property within lhe local limits o

f the

jurisdiction of the Court which passed the decree sufficient to satisfy such decree and

has property within the local limits of the jurisdiction of such other Court, or (c)

if the

decree directs the sale or delivery of immovable property situate outside the local limi

ts

of the jurisdiction of the Court which passed 'it, or

(d) if the Court which passed the decree considers for any other reason, which it sha

ll

record in writing, that the decree should be executed by such other Court.

(2) The Court which passed a decree may of its own motion send «t for execution to any

subordinate Court of competent jurisdiction.

(3) For the purposes of this section, a Court shall be deemed to be a Court of competent

jurisdiction If, at the time of making the application for the transfer of decree to it,

such

court would have jurisdiction to try the suit in which such decree was passed."

Sub-section (3) of Section 39 provides that such a transferee court,

admittedly situated in India, shall be deemed to be a court competent

to execute such a transferred decree if, at the time of making the

application for transfer of decrees, it is shown to have jurisdiction to

try the suit in which such decree was passed. It must at once be

noted that Section 38 refers to executing Courts in India which have

themselves passed the decrees in suits which were within their

jurisdiction and were admittedly, therefore, competent Courts, Such

decrees passed by competent Courts in India can also be executed

by getting the decrees transferred to other competent Courts in India

provided the requirements of Section 39(1) read with subsection (3)

are satisfied. Therefore, the transferee Court in India must be a

competent Court, which at the time of making an application for

transfer of decree by the decree-hoider, should be shown to have

jurisdiction to pass such a decree even originally. It is easy to

visualise that, this requirement of a transferee Court in India which

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 8

gets jurisdiction qua such execution proceedings only on transfer

from competent executing Court which has passed the decree in

India is conspicuously absent, when we turn to Section 44-A. It

nowhere lays down that the District Court in which decree of any

superior Court of a foreign territory is submitted for execution by a

foreign decree-holder must be a Court which could have been

competent to pass such a decree if in the first instance such a suit

was filed by a foreign national against another foreign national in

India. The second distinguishing feature is

that Section 44-A permits the foreign judgment debtor to challenge

the foreign decree even before the executing Court: being the District

Court in India on any of the grounds mentioned in Clauses (a) to (f) of

Section 13. A transferee Court under Section 39 which is called upon

to execute an Indian decree passed by a competent Indian Court

against the judgment-debtor cannot permit the judgment-debtor to go

beyond the decree sought to be executed by such transferee Court.

But apart from these two distinguishing features and even proceeding

on the lines as suggested by Mr. P.Chidambaram, learned senior

counsel for the appellant, that in any case the District Court in India

which is called upon to execute a foreign decree by treating it as if it

was passed by itself should, in the first instance, be shown to be

competent to pass such a decree, the result would be the same on

the facts of the present case.

It is no doubt true that the foreign decree, which is sought to be

executed, is a money decree passed by the English Admiralty Court

in favour of Respondent No. I against Respondent No.2. That decree

is in personam for the simple reason that, at the time when the suit

was filed in England, the res, namely, M.V. Al Tablish was not within

the territorial waters of English Admiralty Court. Therefore, the

plaintiff Respondent No. I had to sue only Respondent No.2 in

personam for recovering damages for breach of salvage contract

entered into between them. The said decree has become final

between the parties. It is also axiomatic that if the res, namely, the

vessel M,V. Al Tabish was available within the territorial waters of

English Admiralty Court it would have also become co-defendant

along with its owner Respondent No.2 and then the decree would

have a decree in rem against the vessel but if Respondent No.2 had

submitted to the jurisdiction of English Admiralty Court, the

proceeding would have been converted into proceedings in personam

and then a decree would have been passed also in personam against

Defendant No.2 along with decree in rem against the vessel. If that

had happened there would have been no difficulty for the English

decree-holder in pursuing the vessel M.V, A! Tabish and to get his

decree executed against the vessel wherever it went during the

course of its voyage over the high seas and its ultimate anchorage in

any port for the discharge or reloading of cargo in the course of

maritime business. The contract of salvage of such vessel and any

proceedings in connection with the execution of such contract or its

breach raising claim for damages would remain in the realm of

maritime claim legitimately within the jurisdiction of Admiralty Courts.

In the absence of a decree in rem against the vessel whose salvage

contract have given rise to the present maritime claim, the decree

passed by competent Admiralty Court in England though remains a

decree in personam could validly be executed by English Admiralty

Court itself.

Once decree of foreign Superior Court is sought to be executed

under Section 44-A of the C.P.C. as if it is the decree of the Indian

Court executing the same, no further question would survive

regarding competence of such executing court. Stilt let us consider in

the alternative the question of competence of the Andhra Pradesh

Admiralty Court for entertaining such a suit in its inception. Then the

question arises whether the Andhra Pradesh High Court which is,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 8

admittedly, having admiralty jurisdiction as a successor to the

Chartered High Court of Madras could have entertained such a suit in

the first instance, we have, therefore, to visualise a situation by way

of flashback as if a suit had to be filed in the first instance by

Respondent No. I against Respondent No.2 in the admiralty

jurisdiction of the Andhra Pradesh High Court in 1994 instead of in an

English Court provided the res i.e. the ship was found at that time in

the territorial waters of Andhra Pradesh. Then Respondent No. I

could have filed a suit in personam against Defendant No.2 because,

admittedly, it was alleged to have committed breach of salvage

contract in connection with the sea-going vessel M.V. A/ Tabish

which is a res and which by chance was found within the territorial

waters of the port of Visakhapatnam in 1994. Such a 'res' would have

admittedly remained within the original admiralty jurisdiction of the

Andhra Pradesh High Court. Respondent No. I thus could have

validly filed a suit praying for decree in rem against the vessel H.V. Al

Tabish making it as Defendant No. I along with its owner Defendant

No.2. What the English Court could do in connection with

the suit validly filed on 11.10.1994 by Respondent No. I against

Respondent No.2 would have been validly done by the Andhra

Pradesh High Court if the vessel. Respondent No. I and Respondent

No. 2 were all within the territorial admiralty Jurisdiction of the Andhra

Pradesh High Court at that time. It is the case of Respondent No. I

decree-holder that pending the said proceedings, illegally and by way

of a fictitious transaction, the said vessel is alleged to have been

transferred by Respondent No.2 infavour of M.V. Al Quamarsnd the

ship's name is changed to H. V. Al Quamar form M.V. Al Tabish

though in fact it still remains the property of Respondent No.2. That is

a question which is still to be considered by the Andhra Pradesh High

Court in the execution proceedings and for which we are not called

upon at this stage to make any observations. But the fact remains

that in such settings of the dispute between the parties such a suit

could have been validly filed in the Andhra Pradesh High Churl's

admiralty jurisdiction if the vessel was in its territorial waters on 11.

ID. 1994, In such a contingency suit could then have been validly filed

by plaintiff-Respondent No. I against defendant-Respondent No.2

and it could have validiy joined the vessel also as Defendant No.2.

The Admiralty Court, being the Andhra Pradesh High Court, could

have under these circumstances validly entertained the suit and

would have been perfectly competent to pass a decree (n rem

against the ship as we/I as the decree in personam against its owner

Defendant No.2 if it had submitted to its jurisdiction for getting the

ship bailed out. Such suit is perfectly

maintainable irr the Andhra Pradesh High Court in exercise of its

admiralty jurisdiction as already decided by a Bench of this Court in

the case of M.V. Elisabeth and Others vs. Harwan investment and

Trading Pvt. Ltd., Hanoekar House. Swatontapeth, Vasco-De-Gama,

Goa etc. [1993 Supp (2) SCC 433]. That was a case in which the res

in question was found within the territorial waters ofVisakhapatnam

Port. Neither the plaintiff nor the defendant had any nexus with the

territorial limits of the Andhra Pradesh. The cause of action has also

had not arisen within Andhra Pradesh still because of the presence of

res in territorial waters of the Andhra Pradesh, it was held by this

Court that the Andhra Pradesh High Court as Admiralty Court had

perfect jurisdiction to arrest the ship being sued as Defendant No. I

before judgment. In the light of the aforesaid settled legal position,

therefore, it must be held that once the vessel - M.V. Al Tabish came

within the territorial waters of the Andhra Pradesh, the Andhra

Pradesh High Court, as Admiralty Court, had complete jurisdiction to

even initially entertain the suit against not only the ship but against its

owner, that is alleged to have committed breach of salvage contract

^athat ship. If such a suit was maintainable in the inception before the

Andhra Pradesh High Court in its admiralty jurisdiction, then at the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 8

executing stage when Section 44-A was invoked for executing a

similar decree passed by competent superior Court in England in

exercise of admiralty jurisdiction, such a decree could validly be

executed by invoking the aid of corresponding Admiralty Court being

the Andhra Pradesh High Court

when the res was already within its jurisdiction. Consequently, even

reading Section 39 (3) with Section 44-A, there is no from the L-

::nd'JSion that the time when execution petition was moved before

the Andhra Pradesh High Court by even treating it as a transferee

Court It can be said to be perfectly competent to entertain such a suit

even in its inception against the ship as well as its alleged owner and

to resolve the dispute between Respondent No.i and Respondent

No.2. It has to be kept in view that if the ship in question which is

arrested at Visakhapatnam had sailed out of the territorial waters of

Andhra Pradesh then the Andhra Pradesh High Court would have

lo.st its jurisdiction to entertain such a suit or the execution

proceedings for executing the decree of foreign Court. But once it

was within its territorial waters, the ship could havs been validiy

subjected to such a suit not only against itself but against its owner.

Whether the subsequent purchaser is a genuine purchaser of the

ship and whether the sale transaction is hit by any other provision of

law and whether the ship still remains the property of Respondent

No.2 could have been validiy examined in such a suit if it was

originally filed before the Andhra Pradesh High Court in its admiralty

jurisdiction. Under these circumstances, it cannot be said in the

background of this fact situation that the Andhra Pradesh High Court,

in exercise of its admiralty jurisdiction, was not competent to even

originally entertain such a suit in which a foreign Court had passed

the decree which is sought to be executed before it. Both the English

Admiralty Court, which is, admittedly a

Court of competent jurisdiction, as well as the Andhra Pradesh High

Court, being a corresponding Court of competent admiralty

jurisdiction, could not only entertain such a suit in the first instance

but could equally be competent to execute such a decree of Admiralty

Court.

The aforesaid analysis of Sections 44-A, 38 and 39 in the light of the

fact situation which is well-established on record furnishes a perfect

answer to the imaginary apprehension voiced by Mr.

P.Chidambaram, learned senior counsel for .the appellant, and to the

alleged absurd situation, which, according to him, may result if such

execution petitions are entertained under Section 44-A for execution

of foreign decrees passed between two absolute foreigners who have

neither any immovable property nor place of residence in India. It is

easy to visualise that a foreign English tourist who might have

suffered a money decree against another foreign tourist in England

may not be able to execute his decree in the District Court at Agra in

India only because his judgment debtor who is a mere tourist is found

to be possessed of some valuable property like jewellery or wrist-

watch etc., as neither wrist-watch nor the jewellery nor even any

valuable carpet possessed by a foreign judgment-debtor can give

jurisdiction to the District Court, Agra to even in the first instance

entertain such a suit by a foreign national 'against another foreign

national but has no moorings in India and suit against whom does not

fall within the fore-corners of Sections 15-20 of the C.P.C. subject, of

course,

to one rider i.e. such foreign national had not submitted to the

jurisdiction of the District Court, Agra. If he had, then the District

Court, Agra could have entertained such a suit in the first instance.

Neither the wrist-watch nor any other movable valuable properties of

the .foreign judgment-debtor can be equated with a res covered by a

maritime claim which can be validly subjected to adjudication for s

decree in rem by s competent Admiralty Court within whose territorial

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 8

jurisdiction the res is found to be available for being subjected to

arrest and detention either pending such Admiralty suit or in

execution of the decree passed by a competent Admiralty Court,

whether ^ local or foreign, as the case may be, subject to such

foreign court being a Court in reciprocal territory as laid down by

Section 44-A of the C.P.C. The District Court, Agra could not have

passed a decree in rem against wrist-watch or carpet treating it to be

a res. Consequently, the apprehension voiced by

Mr.P.Chidambaram, learned senior counsel for the appellant, about

such extraordinary, unimaginable or hcrrendous situation v^ould

remain nearly imaginary, it is only in the Vight of the present facts we

hold that Section 44-A was rightly invoked by Respondent No.i

against Respondent No.2 and also against the vessel M.V. Af Tabish,

which, according to Respondent No. I, is renamed as MM. Al Quamar

and, which according to him, still belongs to its judgment-debtor

Respondent No.2. Whether the said contention is right or wrong will

have to be examined by the High Court under Order XXI Rule 58 of

the C.P.C., as noted earlier. We say nothing on this factual aspect. All

that

we hold in the present proceedings is to the effect that the execufon

petition on demurer was rightly held by the High Court as

maintainable before it. The second contention of Mr. P.Chidambaram,

learned senior counsel for the appellant, therefore, is also devoid of

any merits and stands rejected. The appeals, therefore, fail subject to

the liberty already given in the judgment of brother Banerjee, I to the

appellant to take away the ship subject to furnishing of suitable bank

guarantee of a nationalised bank as indicated therein.