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LAUI RAJA & SONS.

v.

FIRM HANSRAJ NATHURAM

February 23, 1971

815

[S. M. SIKRI, C.J., G. K. MITTER, K. s. HEGDE, J. JAGANMOHAN

REDDY AND V. BHARGAVA, JJ.]

Code of Civil Procedure; 1908, ss. 2(5), 2(12), 20, 38, 39, 40 48-

Code of Civil Procedure (Amendment) Act, 1950 (Act 2 of 1951),

s. 20(1){b)-Decree passed under Code can be transjerred to any court

governed b,v Code-Court in Madhya Bharct not governed by Code prior

to

passing of Act 2 of

1'951~Transfer of decree from West Bengal Court

to Madhya B.hara~ Court while invalid before passing of Act 2 of 1951

could be validly made thereafter-'Foreign Court', 'Foreign !Mcree', mean­

ing of-Foreign Decree when a nullity-'Privileges' and 'rights' when pro­

tected under s. 20(1)(b) of Act 2 of 1951-LimitMion for Execmion­

Section 48 whether provides a bar or period of limitation.

The eppellants obtained a decree against the respondent in the court

of Sub-Judge, Bankura (West Bengal) on December 3, 1949. On March

28, 1950 they applied to the court which passed the decree to transfer the

decree with

a. certificate of non-satisfaction of the court at Morena in the

then

State of Madhya Bharat. It was ordered accordingly. The Judgment

debtors resisted tne execut.on on the ground that the court had no juris­

diction to exeC'llte the same as the decree was that of a foreign court and

that

the same had been passed ex-parte. The court accep.ed that

conten­

tion and dismissed the execution petition 0n December 29, 1950. On April

l, 1951 the Code of Civil Procedttre (Amendment) Act 2 of 1951 came

into force.

By this Act the Code was extended to the former

State of

Madhya Bharat

as well as

vario-.is other places. Me~nwhile the appellants

appealed against the order of the Additional O:strict Judge Morena dis­

missing the execution petition to the High Court of Madhya Pradesh. The

appeal

was allowed. In further appeal this

Court restored the order of

the Addi. District Judge, Morena. Thereafter on Fe'Jruary 15, 1963 the

appellants

filed another execution case before the Bankura Court praying

for the transfer of the decree to the

Mdrena Court for execution. The

Bankura Court again ordered the transfer of the decree of the Morena

Court. The judgment debtors resisted execut:on on the fo'lowing grounds :

(I) that it was barred by res ;udicata in view of the aforesaid decision

of this Court; (

2) that it was barred by s. 48 of the

Code of Civil Pro­

cedure; (3) that it was barred by limitation and (4) that it was not

executable because it

was the

decree of a foreign court. The Addi. District

Judge rejected the objections. The High Court jn appeal agr°'d with

tho executing court that the execution petition was neiher barred by res­

iudicata nor was there any bar of limitation but it disagreed with that

court and held that the decree was not exeC'lltable as the court which

passed the decree was a fore'~n court. The decree holders filed the Pre­

sent appeal by special leave. The questions which fell for consideration

were : (i) whether the decree under execution

was not executable by courts

situate in

the area comprised in the former

State of Madhya Bharat;

(ii) whether the decree

was barred by s. 48 of the Code.

HELD: Per Sikri C.J., Mitter, Hyde and Bhargava JJ. (1) (a) On

the date when the decree under execution was passed 'foreign court' was

8-l 100SupCIJ71

818 SUPREME COURT REPORTS [1971] 3 s.c.R.

defined in s. 2(5) of the Code as a court situate beyond the limits of A

BritISb India which had no authority in British India and was not estab­

lished or continued by the Central Government. After the amendment

of the Code of Civil Proceduro in 1951, 'foreign court' under the Coue

means a court situat< outs1ue India and not established or continued by

the authority of the Central Government. Whether

we take the earlier

definition

or the present definition the Baokura Court could not be

consi­

der<d as a foreign court within the meaning of that expression in the B

Code. 'Foreign judgment' is defined as the 'judgmenr of a foreign court'.

Hence the decree under execution could not

be considered as a foreign

decree for the purpose of the

Code. (820 D-GJ

Accordingly the judgment-debtors could not take advantage of the

provision in

s. 13(b) of the

Code under which the ex-parte decree of a

foreign court is not conclu ive. Nor could they . take advantage of

s. 13 ( d). They were served with notice of suit but did not choose

to appear before the court. Hence, there was no basis for the contention

that any principle of natural justice has been contravened. Further

s.

13 ( d) was not applicable because the

juc!gment in question was not a

foreign judgment. [821 DJ

(b) Under Private International Law a decree passed by a foreign

court to whose juri diction a judgment-debtor had not submitted

is an

absolute nuliity only if the local legislature had not conferred jur.sdiction . on th1--domestic courts over the foreigners either generally or in specified

circumstances. Cb use ( c) of s. 20 of the Code provides that subject to

the limitations mentioned in the earlier sect:ons of the Code a suit can

be instituted in a court within the lo'~al limits of whose jurisdiction the

cause of action wholly or in part, arises. This provision confers jurisdic·

tion

on a

court in lndi? over foreigners when the cause of action arises

within

its jurisd.ction. There was not dispute in the present

case that

the cause of action for the suit which led up to the decree under execu­

tion arose within the jurisdict on of the Bankura Court. Hence, tt must

be held that the suit in question was properly instituted. Accor"·'"gly the

decree ·n question was a va

1

id decree though it migit not have been

executable at one stage in courts in the former Indian States [822 B-F)

Sardar Gurdyal Singh v. The Rajah of Faridkot, 21 I.A. 171, referred

to.

(c) A combined reading of ss. 2(121, 38, 39 and

40 of the Code

shows that a decree can be transferred for execution only to a court to

which the Code applie . This is what was rulod by this Court in Hansraj

Nathu Ram's

case. But by the date the transfer in the present case was

. made, the

Code had been extended to the whole of India. It followed

that the transfer of the decree in question which was not a foreign decree,

to the Morena Court, was in accordance with !lie provisions of the Code.·

[823 B-D).

Hansraj Nathu Ram v. La/ii Raja & Sons of Bankura, [19631 2 S.C.R.

619, applied.

Ncrsingh Rao Shitole v. Shri Shankar Saran & Ors., [1963] 2 S.C.R.

577, distinguished.

(d) Section 20(1) (b) of the Code of Civil Procedure Amenament

Act, 1951 by which the Code was extended to Madhya Bharat and other

areas undoubtedly protects the right acquired and privileges accrued under

the law repealed

by the amending Act. But even bv straining the language

of the provis on it cannot be said that the non-executabi'ity of

•he ciecree

within a particular territory can be considered a 'privilege' [824 E-F]

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LALJI RAJA v. FlR.M HANSll.AiJ 817

Nor is it a 'right accrued' within the meaning of s. 20(1) (b) of the

Code of Civil Procedure (Amendment) Act; 1'950. In the first place in

order to get the benefit of this provision the non-executab lity of the

decree must

be a right, and secondly it

must'lle a right that had accrued

from the provisions of the repealed law.

It was difficJlt to

coJcider the

no~-executability of the decree in Madhya Bfllat as a vested right of the

judgment debtors. The non-executability in question pertain•d to the

juris<Lction of certain courts and not to the rights of the judgment

debtors. Further the relevant provision of the Code . of Civil Prooedure

in force in Madhya Bharat did· not confer th~ right claimed ov the

judgment-debtors. All that had haopened fo view of the extens:on of ~be

Code to the whole of India in 1951 was that the decrees which could have

been executed only by courts in Britis1' IQ11iq were made executable in

the whole of India. The change made was one relating to procedure

and juri diction.

By the extension of the

Code' to Madhya Bharat, want

of jurisdiction on the part of the Morena Court was remedied and that

court

was

now• competent to execute the decree [825 A-El

Hamilton Gell v. White [1922] 2 K.B. 422, Abbot v. Minisur for

Lands, [1895) A.C. 425 and G. Ogden Induitries Pvt. Ltd. v. Lucas,

[1969)

I All E.R. 121, applied.

(ii) The execution was also not barred by s. 48 of the Code. For

considering the true impact of

cl. (b) of

sub

0s. 2 of s. 48 of the Code

provisions of Arts. 181 am~ 182 of the Limitation Act, 1908 have also

to be taken into cons~deration. These provision~. clearly go to irdicate

that the period prescribed under s. 48 (I) of the Code is a oerio1 of

Iim'.tation. This interpretation is strengthened by_ tbe S'Jbsequent history

of the legislation. By the Limitatio.n Act, 1%3 s. 48 of the Cod' is

delct·d. Its olac" h" not been taken by A~f. ·t36 of the Vm;tation Act

of

1963 The High Courts also are now .unanimous that s. 48 of

tl>e rode

is controlled by the provisions of the Limitation Act, 1908. [828 A-CJ

Kandaswami Pillai v. Kmn4oDa Chetty, A.LR. 1952 Mad. 186 (F.B.),

Durg v. Poncham, I.L.R. [1939] All. 647, Sitaram v. Chunnilalsa, I.L.R.

[1944] Nag. 250, Amarendra v. Manindra, A.I.R. 1955 Cal. 269, Kris/ma

Chwdra v Paravatammo, A.l.R. 1953 Orissa 13 and Ramgopa/ v. Sldram,

A.LR. 1943 Born. 164 referred to.

Per Jaganmohan Reddy, J.-(Concurring) No question of a vested

right or privilege arose to entitle the respondent

to

challenge execufon

proceedings in Morena Court. The decree granted by the Bankura Court

was executable by the Courts governed by the sai:ne Code, by t'i, Court

which passed it or by the Court to which it ,was transf,,red. Once the

Code was made applicable to the whole of India by Amendment Act II

of 1951 the decree was no lon~er a foreign d,ecree aua the Morena Court

which was a court under the Code to which the Bankura Court could

transfer the decree for execution. No doubt in Shitole's case it was ob·

served that s. 13 nf the Code creates substantive ri2hts and nnt merely

procedural and therefore defences that were open to the resooi.dent• were

not taken away

bv any constitutional changes, but

the ratic of the decision

was that the Gwalior Court not bein~ a court· that n8'•ed the d ·cree

after the comin~ into force of Act TJ of 1951 the Allaha"ad r'ott'1 could

not execute it. ·The imnediment did not exist nnw in t1'at the RRnkura

Court had t•an<forred the decree to a COtllrt under t1'o r'nde. The olea

that

s.

48 r;vil l>•ocedure Code presents' a bar Of limitation was also not

tenable.

[831

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818 SUPRllMt: GOU.RT REPORTS [1971] 3 S.C.R·

Kishendas v. /ndo-Carnatic Bank Ltd. A.LR. 1958 A.P. 407 Sardar A ~

Gurdayal Singh v. Raja of Fc.ridkote, 21 I.A. 171, Raj Rajendra &rdar

Maloji Narsingh Rao Shito/e v. Shri Shankar Saran, [1963] 2 S.C.R. 577

and dansroj Nathuram v. Lalji Raja & Sons Bankura, [19o3] 2 S.C.R. 619,

discussed.

CIVIL APPELLA"IE Ju1ushicnoN : Civil Appeal No. 2427 0of

1966.

Appeal by special leave from the judgment and order dated

August 27, 1964

of the Madhya

Pradesh High Court in Misc.

Appeal No. 20 of 1964.

S. C. Majumdar and R. K. Jain, for the appellant.

W. S. Bar/ingay, Ramesh Mali and Ganpat Rai, for the

respon~t.

The Judgment ot.S. M. S!KRI, C.J., G. K. MITTER, K. S.

HEGDE and v. BHARGAVA, JJ. was delivered by HEGDE, J. P.

JAGANMOHAN REDDY, J. gave a separate Opinion:

Hegde, J. This is an execution appeal. The decree-holders

are the appelbnts here.in. This case has a long and chequered

history. The decree-holders obtained a decree against the res­

pondents in the court

of

Sub-Judge, Bankura (West Bengal) for

a sum of over Rs. 12,000/-, on December 3, 1949. On March

28, 1950 they applied to the court which passed the decree to

transfer the decree together with a certificate of non-satisfaction

to the court at Morena

in the then Madhya Bharat

State for exe­

cution. It was ordered accordingly. The execution proceedings

commenced

in the courf of Additional District Judge at Morena

on

Sep'ember 21, 1950 (Money Execution Case No. 8 of 1950).

The judgment-debtors resisted !he execution on the ground that

the court had no jurisdiction to execute the same

as the decree

was that of a

foreigu. court and that the same had been passed ex­

parte. The court accepted that contention and dismissed the

execution petition on December

29,

1950. On April 1, 1951 the

Code of Civil Procedure (Amendment) Act, (Act

II of 1951)

came into force. As a result of that the Code of Civil Procedure

(in short the 'Code')

was extended to the former

State of Madhya

Bharat

as well as as to various other places.

Meanwhile the

decree-holders appealed against the order

of the learned Addi­

tional District Judge, Morena dismissing the execution petition,

to the High Court of Madhya

Pradesh. The Madhya Pradesh

Hi~h Court allowed their appeal. As against that the judgment-

debtors appealed to

this Court. This Court allowed the appeal

of the judgment-debtors and restored the order of the learned Ad<iitional Disfrict Judge, Morena. The decision 0of this Court

is reported in Hanvraj Nathu Ram v. Lalji Raj~ and sons of

Bankura (

1

). Therein this Court ruled that the transfer ordered by

(I) [1963] 2 S.C.R. 619.

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LALJI RAJA v. FIRM

HANSRAJ tHegde, J.) 819

the Bankura court was without jurisdiction as on that date 'the

Code' did not apply to the Morena

court This Court he1d that

Morena court not being a court to

which ~the Code: appJ,ed, the

decree could not have been transferred to it. lt mrther he.d that

ss. 38 and 39 of 'the Code' did not afford jurisdiction for such a

transfer.

It may be noted that at the

time the Bankura Court

ordered the transfor of the decree, the Morena court was governed

by the Indian Code of Civil Procedure as adapted by the Madhya

Bharat Adaptation Order, 1948. In other word> it was govern­

ed by a law passed by the then Madhya

Bharat State. In lhe

course of its judgment this Court observed that

unqer 'the Code'

"a decree can be .executed by ! court which passed the decree

or to which it was transferred for executiQn and the decree which

could

be transferred has to be a decree passed under the Code

and the court to which

it could be transferred has to be a court

which was governed by the Indian Code

-0f Civil Procejure".

The first stage of the execution proceedings came to an end by the

decision 0f this Court rendere<i on April 30, 1962.

On February 15, 1963, the decree-holders filed a.nother exe­

cution case before the Bankura court. Therein they prayed for

the transfer of the decree again to the Morena court for execution.

As noticed earlier, by that time 'the Code' had been extended to

the Madhya Bharat State which had become a part of the State

of Madhya Pradesh. The Bankura court again or 'ered the •nns.

fer of the decree to the Morena court. The executfon proceed­

ings were started afresh in the Morena caurt on Au-ust 31, 1963

(Execution Case No. 1 of 1963). The judgment-debt'rs resisted

the execution on various grounds viz. (a) that it i5 barre'.! by

res-judicata in view of the decision of this Court referretl to ear·

lier; (b) that it is barred bys. 48 of 'the Code'; (c) th~t it is

barred by limitation; and ( d) that the decree is not executable as

it is a decree of a foreign court.

. The learne? Additional District Judge rejected the objections

ra1sei

by the Judgment-debtors. The judomen•-debtors

app!aled

against that order to the High Court of Madhva Pradesh. T'1e

Hi

0

h Court agreed with the executing court that the execution

petition

is neither barred by res-judicata

·nor bv s. 48 of '•he

Code', nor is there anv bar of limitation but ii disaereed with

that court and held that the decree was not e-.ecutab'e a~ tlie

court which pa~sed the decree was a foreign c~ur'. In arrivin~

at that conc!mmn it puroorted to rely on the decision of this

Court in

Raj

Rajen'1ra Sardrzr Malnji Narsinf!h Rri,.., s~;,,,z. v.

Sri Sh,,nkar Saran ant/ Or<. (1). Agg·ievet.I bv •h'lt dPcision. the

de~ree-holders have brought this appeal by special leave.

From the contentions advanced before us, two questions arise

I [1963] 2 S.C.R. 577.

820 SUPRE!\l,E COURT REPORTS [1971] 3 S.C.R.

for decision. They are ( 1) whether the decree under execution

is not executable by courts situate in the area comprised in the

former State of Madhya Bharat and ( 2) whether the decree is

barred by s. 48 of 'the Code'.

The contention of the judgment-debtors is that the decree

under execution being a .decree of a foreign court

is a nullity qua

the courts in the former

State of Madhya Bharat and there.fore

the same is not executable in the Morena court. According to

the decree-holders the decree in question is 110t a decree. of a

foreign court as contemplated 'by 'the Code' an.d the court to

which the decree is transie.rred for execution namely the Morena

court

is a 'court'

as contemplated by ss. 38 and 39 of 'the Code'

and therefore there can. be no valid objection to its execution in

the Morena court. Before referfi.ng to the decided cases on the

point it

is necessary to !'ead the relevant provisions of 'the Code'

as the execution is sought in accordance with the provisions there­

in.

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'Foreigp Court' is defined in s. 2(5) of 'the Code'. That

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definition as it stoocl on ,he date the dectee under execution was

passed read thus :

" "foreiqn court" means a Court situate beyond the

limits of British India which has no authority in Bri­

tish India and

is not estab.ished or continued by the

Central Government." E

A new definition

of 'foreign

court" was substituted by the

Code of Civil Prcedure (Amendment) Act II of 1951. That

definition reads :

" "foreign coiirt" means a court situate outside Ind;a

and not estab'ished or continued by the authority of the F

Central Govennment".

Whether we take tlie earlier definition or the preser:.t definition

into consideration the Rankura coum. cannot be considered as a

"foreign court" wi•hin the meanipg of that expression in 'the

Code'. Fo•ei~nojudgment' is defined in 'the Code' as the judg­

ment of 'a foreign cou11t'. (~. 2(6) of 'the Code'). Hence the G

decree under execution cannot be considered as a foreign decree

for the purpose

of the Code.

Secticl'l J 3 of 'the Code' provides that "A foreign judgment

shall be conclusive

as

to· any· matter thereby directly adjudicated

uoon between the sam~ parties or between parties under whom

they or any of them c.laim litigating under the same title except H

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

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LALJI RAJA v. FIRM HANSRAJ (Hegde,

I.) 82!

The judgment with which we are concerned in this case was

an ex-par1e judgment. The Bankura court had no jurisdiction

over the judgment-oebtors. The Judgment-debtors did not sub­

mit

themse1ves to the jurisdiction of that court though they were

served

with a notice of the suit. Hence if the BaiJrnra court

can

be

CQnSidered as a foreign court then s. 13 (b) would have

come to the rescue

of the

Judgment-deb•ors and it would have

enabled them

to p.ead that the

judgme.nt in question was not con­

clusive and consequent.y the decree

is not binding agamst them.

But

as the

judgmeint in question cannot be considered as a judg­

ment

of a fore.gn court, they can take no assistance from s.

13 ( b). But

arnstance was sought to be taken from s. Ll ( d)

which· says that the foreign judgments are not conclusive ''where

the proceedings

in which the judgment was obtained are opposed

to natural

justice". It was urged oo behalf of the judgment­

debtors that

as the decree under execution was an ex-parte

decree, we must hold that the proceedings in which the judgment

was obtained were opposed to natural justice. We are unable

to accede

to this contention. As mentioned earlier, the

judg­

ment-debtors were served with the ilJIOtice of the suit. They did

not choose to appear before .the court. Hence there is no basis

for the contention that any principle of natural justice had beer;

contravened. Further as held earlier the i udgment in question is

not a forei~ judgment.

Reliance

was placed on Private International Law in sup­

port of the contention that in a personal action, a decree pro­

nounced in

absentem by a

foreig\ll court, to the jurisdiction oi

which the defendant had not in any way submitted himself is an

absolu:e nu lity.

It was urged that the Bankura court had no

jurisdiction over the judgment-debtors and therefore the decree pas;ed bei.ng one p~onoun.ced in absentc111 h a nullity. In sup­

port

of

this contentmn reltance was placed on the decision of the

Judicial Committee iL'l Sirdar Gurdva/ Sin~h v. The Rajah of

Faridkote('). Therein the Judicial Committee observed:.

"In a personal action, to which none of these

causes of jurisdicti?n aoply, a decree pronounced in

ab~entem bv a foreign Court, to the jurisdiction of

which. the ~efenda~t has not in any way submitted him­

self, 1s by mternatmnal law an absolute nullity."

But the Board qualified those observations by the fol'owing

words:

".He is under no obligation of anv kind to obey it;

and

1t must be regarded as a mere nullity by the Courts

(t).

21 J.A. 171.

822 SUPREME COURT REPORTS [1971] 3 S.C.R.

of every nation except (when authorised by special local

legislation) in the country of the forum

by which it was pmnounced."

The above remarks of the Board indicate that even a decree

which

is pronounced

in absentem by a foreign court is va id and

executable in the country of the forum

by which it was pronounc­

ed when authorised

by special local legislation. A decree passed

by a foreign court to whose jurisdiction a judgment-debtor had

not submitted

is

an absolute nu.lity only if the local legislature

had not conferred upon jurisdiction on the domestic-tourts over

the foreigners either generally

or under specified

circumstance>.

Section 20 ( c) of 'the Code' confers jurisdiction on a court in

India over the foreigners if the cause of action arises within the

jurisdiction of that court. Hence the observation of the Board

quo:ed in some of the decisions of the courts in India including

the decision of this Court in

Shitole's case(') that such a

decree

is an 'absolute nullity' may not be apposite. It may be

more appropriate to say that

the decree i.n ques'ion is not exe­

cutable in courts outside this country. The board itself had no­

ticed that this rule of Private International law is subject to spe­

cial local legislation. Clause ( c) of s. 20 of 'the Code' provided

at the relevant time and still provides that subject to the limita­

tions mentioned in the earl;er sections of 'the Code', a suit can

be instituted in a court within the local limits of whose jurisdic­

tion the cause of action. wholly

or in part, arises. There is no

dispute in this case that the cause of action for the suit which

led up to the decree under execu'ion arose within the jurisdiction

of Bankura court. Hence it must be held that the suit in ques­

tion

was a proper'y

insti'uted suit. From that it fol'ows that the

decree in question

is a valid decree though it

mi~ht not have been

executable at one stage in courts in the former Indian Sta­

tes.

This takes

us to ss. 38 and 39

o.f 'the Code'. Section 38

provides that a decree may be execu'ed either bv the c0urt which

passed it, Of by the court to which it is sent foi execution. Sec·

tion 39(1) to the extent it is material for our present purpose

prescribes :

"The Court which passed a decree may, on the

application

of the decree-holder, send it for execution

to another

Court-

( a)

if the person a!lainst whom the decree is passed

actually and voluntarily resides or carries on busmess,

or personallv work;s. for gain within the local .limits of

the jurisdiction of such other Court

.....

·"

(1) [1963) 2 S.C.R. 577.

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LALJI RAJA v. FIRM HANSRAJ (Hegde, J.) '823

Section 40 prescribes :

"Where a decree is sent for execution in another

State, it shall be sent to such Court and executed in

such manner

as may be prescribed by rules in

force in

that State."

Ru'es are defined in s. 2 ( 12) as meaning Rules and Form;

.:ontained in the 1st Schedule or made 1mdcr s .. 122 or s. 125 of

'the Code'. On a combined reading of ss. 2(12), 33, 39 and

40, it follows that a decree can be transferred for execution

only

to a court to which 'the Code' applies. This is what was

ruled by this Court in Hansraj Nathu Ram v. Lalji Raja and

som

of Bankura(1). But by the date the impugned .transfer was

made, 'the Code' had been extended to the whole of India. In

fact the court to which the decree was transferred is now an

entirely

new court in the eye of the law-see the decision

of this Court in Shitole's case(').

From the foregoing discussion, it follows that the decree

under execution

is not a foreign decree and its transfer to the

Morena court

is in accordance with the provisions of 'the Code'.

That being

so, the decree under execution satisfies the dictum

of this Court in Hansraj

Na•hu Ram v. Laiji Raja and sons(

1

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that

"a decree can be executed by a court which passed the decree

or to which it

was transferred for execu'.ion and the decree wh'ch

could be transferred has ito be a decree passed under the Code

and

the Court to which it

cou\1 be transferred has to be a Court

which was governed by the Indian Code of Civil Procedure."

It was next urged on behalf of the judgment-debtor that in

view of the decision of this Court in Shit,,le's cave (supra) we

must hold that the decree is a nullity and that it cannot be exe­

.:uted at all in the courts situate in the former State of Madhya

Bharat.

In Shitole's case (

sunra) this Court was called upon

to consider a converse case. Therein the decree under execu­

tion

was one

pa~sed l:>v a court in Gwalior State in a suit insti­

tuted

in May 194 7. The

defe"dqnt~ were 1he re<idents of U.P.

They did not appeal before the Gwalior court though served with

the notice.

An ex-parte decree was

pa••ed against them in

November, 1948. On September, 1951, the Gwalior court

transferred the decree for execution to Allahabad and

on

Octo­

ber 16. 1951, the rlecree-holder file<f an annlica•ion for execu­

tion

of the decree

b~fore the AHah•bad Court. The iudgment­

deblors contende~ thqt the decree beinq a clecree of forei1m court·

to whme iurisdic'i"''l thev had not submitted, was a nullitv and

the execution aoo1ication in reonect thereof was n<Jt malnta;nah!e.

That contentinn w•~ accented by this 'court. Tt mav be noted

that the Gwalior Court

was not a court consti'uted under the

(0 !1963] 2 S.C.R. 619. (2)(1963] 2 S.C.R. 577.

824 SUPREME COURT REPORTS [1971] 3 S.C.R.

provisions of 'the Code'. It was admittedly a foreign court for

the purpos.:: of any proceedimgs under 'lhe Code'. The ratio of

that decision

is wholly inapplicab.e to the present case. The

question whether a decree

is a foreign decree or whether it can

be transferred to another court for execution has to

be 1udged by

the provisions of 'the Code'.

It was next contended that in view of s.

20 cl. (b) of 'the

Code' of Civil Procedure (Amendment) Act, 1951 by which the

Code

is extneded to Madhya Bharat and other areas, the

1udg­

ment-debtors' right to resist the execution of the decree is pro­

tected. Section 20 (1) of the Act deals with Repeals ana Sav­

ings. That section to the extent relevant for our present purpose

reads:

"If, immediately before the date on which .he ;;tid

Code comes into force in any part B State correspond­

ing to the said Code, that law shall on that date &I.and

repea'ed.

Provided that the repeal shall not affoct-

(b) any · right, privilege, ob'igation or liability

a~quired, accrued or incurred under any law so i:epe~-

ea . . . . . . . . . . . . . . . . . . .......... -. . . . . .. as 1f this

Act had not been passed."

This provisions undoubtedly protects the rights acquired and

privileges accrued under the law repealed by' the amendmg Act.

Thererore . the question for decision is whether the non-.execut­

ability of the decree in the MJrena court under the law m torce

in Madhya Bharat before the extension o.f 'the Code' cnn b~

said· to be a right accrued under the repea!ed law. We do not

think that even by s:raining the language of the provision it can

be said that the non-executabi,ity of a decree wi.hin a particular

territory can be c~nsidered as a privilege. Therefore tne only

ques:.ion that we have to consider is whether it can be comidered

as a 'right accrued' within the meaning of s. 20 (1 )(b) of the

Code of Civil Procedure (Amendment) Act, 1950. In the flrst

place, in order to get the benefit of that provision, the non-exe­

cutability of the decree must be a right_ Pnd secondly it must be

a right that had accrued from the provisions of the repealed law.

It is contended on behalf of the judgment-debtors that when the

decree

was passed, they had a right

to resist the execu<ion of the

decree in Madhya Bharat in view of the provisions of the Indian

Code of Civil Procedure (as adaptep) which was in forct. in the

Madhya Bharat at that time and th~ same is a vested ri5ht. It

was further urged on their behalf that that right was preserved by

s. 20 ( 1 )(b) of the Code of Civil Procedure Amendment Act,

A

:-

B

c

D

E

F

G

H

A

B

c

D

E

F

G

H

LALJI RAJA v. FIRM HANSRAJ (Hegde, /.) 825

1950. It is difficult to consider the non-executability of the

decree in Madhya Bharat

as a vested right of the

judgment­

debtors. The non-executability in question pertains to the juris­

diction Qf certain courts and not to the rights of the 1udgment­

debtors. Further the relevant provisions of the Civil Procedure

Code in force in Madhya Bharat did not ~cinfor the right claimed

by the judgment-debtors. All that has happened in view of the

extension

of 'the Code' to the whole of India in 1951 1s

th8t the

decree which could have been executed only by courts

in British

India are

iflOW made executable in the whole of India. The

change made

is one relating to procedure and iurisdiction. Even

before '!he

Code'. was extended to Madhya Bharat the decree in

question could have been executed either against the person

of the judgment-debtors if they had happened lo come

to British India or aga~nst any of their properties situate

in British India. The execution of the decree within the State

of Madhya Bharat was not permissible because the arm of 'the

Code' did not reach Madhya Bharat.

It was the invalidity of the

order transferring the decree to the Morena court that stood in

the

way of

the decree-holders in executing their decree in that

court

on the earlier occasion and not because of anv vested rights

of the judgment-debtors. Even

if the judgment-debtors had

111ot

objected to the execution of the decree, the same could not have

been executed

by the court at Morena on the previous occasion

as that court was not

prooorly seized of the execution proceed­

ings. By the extension of 'the Code' to Madhya Bharat, want of

jurisdiction on the part

of the Morena court was remedied and

that court

is now made competent to execute the decree.

That a provision to preserve the right accrued under a repeal­

ed Act

"was not intended to preserve the abstract rights con­

ferred by the repealed Act.

... It only applies to specific rights

given to an individual upon happening of one or the other

of the

events specified

in

statute"-see Lord Atkin's observations in

Hami!ton Gell v. White(

1

). The mere right. existing a• the date

of repealing statute, to take advantage of provisions of the statute

repealed

is not a

"right accrued" wi'hin the meaning of the usual

saving

clause-see

Abbot v. Minister for Landy(") and G. Ogden

Industries Pty. Ltd. v. Lucas(

3

).

From what has been said above, it fo11ows that the view taken

bv the Hi~h Court that the decree' in question is a nullitv qua the

Morena court cannot be acceuted

as correct. The decree in

question

is neither a

'foreign decree' as contemnla'ed by 'the Code'

nor

its transfer to the Morena court

impermis~ible under 'the

Code'.

Bv the provisions of 'the Code' the Morena court is re-

0) [1922] 2 K.B. 427. (2) [1895] A.C. 425.

(3) [1969] I All E. Report 121.

826 SUPREME COURT REPORTS [1971] 3 S.C.R.

quired to proceed with the execution unless there is any valid

objection.

We now come to the question whether the execution is barred

bys. 48 of 'the Code'. (That section was repealed

:n 1963).

Both the executing court .as well as the High Court have taken

the

view that on the facts of this case, the limitation prescribed

in

s. 48 of 'the Code' is extended under s. 14.(2) of the

Limita­

tion Act, 1908. Both those courts have concurrently come to the

conclusion that the previous execution proceedings had been pro­

secuted by the decree-holders with due diligeince .and with good

faith and the

same became .infructuous in view of the fact that

the Morena court had no jurisdiction

to proceed with the

execu­

tion. The finding that th!' previous-execution proceedings were

.:arried on with due diligence and good faith and that the same

became infructuous for wa11.t of jurisdiction on the part of the

Morena court

was not challenged before us. But it was urged

on behalf of

the judgment-debtors that s. 48 prescribed a bar

and not a period of limitation and .consequently the decree-holders

cannot take

the benefit of s. 14(2) of the Limitation Act. It is

necessary to examine the correctness of this contention.

Section 48 read thus :

"(1) Where an application to execute a decree not

beiing a decree granting an injunction has been made,

A

B

c

D

no order for the execution of the s;i,me decree shall be E

made upon any fresh application presented after the

expiration of

12 years from-

(a) the date of the decree sought to be executed or

(b) where the decree or any subsequent order

directs

any payment of money or the delivery

. of any F

property to be made at a certain date or at recurring

periods, the date of

.the default in making the payment

or

delivery in respect of which the applicant seeks to

execute the decree.

(2) Nothing in this section shall be deemed-

( a) to preclude the Court from ordering the execu­

tion of a decree upon an application presented after th"e

expiration of the said term of twelve years, where the

judgment-deb\or has, by fraud or force, prevented the

execution

of the decree

at some time wi•hin twelve years

immediately before the date of the application; or

(b)

to Fmit

o• otherwise affect the operation of

article 183 of the First Schedule to the Indian Limita­

tion Act, 1908".

G

II

LALJI RAJA v. FIRM HANSRAJ (He,de, J.) 827

A Art. 183 of the Indian Limitation Act, 1908.read thus:

B

c

D

E

F

G

H

"D!SCription of application. Period of

Limitation

To enforce· a judgment, decree Twe1eve years

or order of any Court established

by Roy1l Charter in the exercise

of its ordinary origi,1al civil

j 'Jrisdiction or an order of the

Supreme Court.

Time from which period

begins

to run.

Wlien a present right to en~

force the judgment, decrce or

order accrues to some person

capable of relel'lsing the right.

Provided that when the

judgment, decree or order

has

been

revived·, or some

part of the principle money

secured

thereby or some

in~

terest on such money

has been paid, or some

acknowledgment of Ille right

thereto bas-been given in

writing signed by the person

liable to pay such principal

or interest or his agent, to

tbe

Pohon entitled thereto

or his agent, the twelve years

shall be computed from the

date of such reviver, pay ..

meot or acknowledgment or

the latest

of such revivors priyments or acknowledg­

ments, · as the case

may be.

At this stage it is also necessary to read Art. 181 "of the Lllni­

tation Act of 1908. That Art prescribed that an application for

which no period of limitation is provided elsewhere m the Sch. to

the Limitation Act, 1908 or by s. 48 of the Code, the period of

Limitation

is three years and that period begins to run when the

right to apply accrues. Art. 182

of that Act provided that for

the execution of a decree

or order of any Civil Court not provid­

ed for

l:>y afticle 183 or bys. 48 of 'the Code', the periQlf of lllni­

tation is three years or where a certified copy of the decree or

order has been registered-six years. The time from which the

period was to run is set out in the 3rd column of the Sch.

The argumen, advanced on behalf of the judgment-debtors is

that s. 48 is a self-contained s:;<>de and the period prescribed

therein

is a bar and not a period of limitation and hence the

decree-holders cannot take the benefit of

s. 14(2). In support

of this argument reliance

is placed on sub-s. 2 (a) of s. 48 of 'the

Code'. That sub-section undoubtedly lends some support to the

contention of the judgment-debtors.

It indicates as to when the

period

pr(\scribed under s. 48 (1) can be extended. By implica­

tion

it can be urged that the period prescribed under s. 48 ( 1)

of

the Code can only be extended under the circumstances mention­

ed in that clause and not otherwise. But in assessing the correct-

828 SUPREME COURT REPORTS [1971] 3 S.C.R.

ness of that cont~ntion we have to take into consideration cl. (b) A

of sub-s. (2) of s. 48 of the Code' as well as Arts. 181 and 182

of the Limitation Act, 1908. These provisions clearly go to

indicate that the period prescribed under s. 48( 1) of 'the Code'

is a period of limitation. This conclusion of ours is strengthened·

by the subsequent history of the legislation. By the Limitation .t<

Act 1963, s. 48 of 'the C.;>de' is deleted. Its place has now been B

taken by Art. 136 of the Limitation Act of 1963.

At one stage, there was considerable conflict of judicial

opinion as to whether

s. 48 is controlled by the provisions of the

Limitation Act

1908. But the High Courts which had earlier

taken the view that

s. 48 prescribes a bar and not limitation have

now revised their opinion.

The opinion amongst the High Courts

is now unanimous that s. 48 of 'the Code' is controlled by the

provisions of the Limitation Act,

1908-see Kandaswami

Pillai

v. Kamappa Chett;r(1); Dirg v. Pancham(')'; Sitaram v. Chun,

nilal>a(

3

);

Amarendra v. Manindra('j; Krishna Chandra v.

Paravatamma('); -and Ramgopal v. Sidram(").

We are of the opinion that the ratio of the above decisions

correctly lays down the law. That apart, it would not be appro­

priate to unsettle the settled position in law.

For the

r~asons mentioned above this appeal is allowed and

the order of the High Court

is set aside and that of the trial court

restored.

The executing court is directed to proceed with the

execution. The respondents shall pav

1he costs of the appellants

both in this Court

as well as in the High Court.

P. Jaganmohan Reddy, J. I agree with my learned

c

D

E

brother Hedge J., that the Appeal should be al!owed. In the

F

case of Kishendas v. Inda Carnatic /Jank Lrd.(') I had whi'e

delivering the Judgment of the Bench expressed certain views

which may appear

to conflict with the view now taken. In that

case

the executability of a decree passed by the Madras High Court

in 1940 by the City Civil Court Hyderabad on the ground of

its b~inQ a foreiQtJ decree was called in question. The Respondent G

went into linnid"tion ""d a liquidator was aopointed by the origi-

nal side of Madras High Court. The liquidator

filed an appli-

,.

cation under Sec. 191 of the Indian Companies Ac• for the re-

coverv of g sum of Rs. 1375 from the Aopellant whci was a sub-

ject of H.E.H the Nizam and a resident of Hyderabad on account

(1) A.LR. 19'7 M,d.1"6 (F.B.). (2) T.L.R. [10101 All.'''· H

(3) I.LR. [19•4] N°g.250. (4) A.•.R. 1955 Col. 269.

(5) A.J.R. 1953 Orissa 13. (6) <\.l.R. 1943 Born. 164.

(7) A.I.R. 1958 A.P. 407.

A

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LALJI RAJA v. FIRM HANSRAJ (Jaganmohan Reddy,/.) 829

of unpaid calls and the Court passed an ex-parte decree on

15-8-19+0 against the appellant. Tne ,iquidator fielj an exe­

cution petition in that Court praying for a transfor of the decree

to the City Civil Court Hyderabad which

was ordered on 15-3-1951

when the Hyderabad Civil Procedure Code was in force in the

Hyderabad

Sta~~. under which the decree of the Madras High

Court would

be a foreign decree and the only way in which the

liquidator could recover the decreetal amount

was by filing a

suit on that decree. No doubt the Madras

High Court could

not on that date

i.e. 15-3-1951 pass an order directing the

trans­

fer of the decree as it was to a Court which was not gov·~rned by

the Indian Civil Procedure Code (hereinafter called the Code)

nor on that date were there any reciprocal arrangements for exe­

cuting those decrees in the Hyderbad State. Madras High Court

could not therefore transfer a decre·~ passed by it for execution

to a Court which did not satisfy the provisions of Sections

43 to

45 on that date. It did not also appear from the

facts of that

case whe.her any notice was served on the appellant but foll~wing

the decision of the m'j1rilv of the High C.1urts in :his count')'

and also relying on the observations of their Lordships of the

Privy Council in

Sardar

Gur1ayal Singh v. R·1ja of Faridko•a(1)

that a decree pronounced iirl absentum by a foreign Cou•t the Juris­

diction to which. the defendant has not in any way submitted him­

self is by international law a nullity, I also took the view that

the non-executability of the decree

is to be

cktermined as on the

date

on which it was passed and that no distinction can

conceiva­

bly be made between the decree passed by British Indian Courts

before the merger or before the Independence when it

was a

foreign decree and a decree passed by

th~ Courts of a n•tive

State before the Tndepend~nce or merger in both cases the charac­

ter of the Judgment would be that of a foreign Judgment and if it

suffers from snv want of jurisdiction or otherwise it will con·

tinue to be subject to that defect. This Court had also expressed

a similar

view in Raj Rajendra

Sardar Malaji Marsin~h Rao

Shito/e v. Sri Shankqr Saran & Ors. (

2

) when it held that an

ex· nnr•e clecree nassec1 in 1948 by the Gwalior Court against re­

sidents of U.P. who did not apoear was not execu•able

in Allahabad even thouoh the Gwalior Court had transfe'Te'1 the

decree

in

October 1957 af•er the Civil Proce'1ure Ame11dment

Act TT of 19~1 cnme in•o force af•er which the GwoJior C<'urt was

a Court unrler the Cnde. It was hel<l bv a majoritv that th~ de­

cree passed bv tl->P. Gwalior Court did not change its na•ion•lity

in spite of snhseouent C"mti'utiona1 chanQes or amen'1men•s in·

the ('Nie of Civil Procerlure. that if a decree was unenforceah'o~ in

<1 narticnlar Court "t the time it was passed it w~ulcl n0t bec0me

enforceable and valid simply because of the political changes that

(!) 21 I.A. 171. (2) [1963]2 S.C.R. 577.

830 SUPREME COURT REPORTS [1971] 3 S.C.R.

took place unless there is a specific provision to the contrary and A

tbat the decree being a nullity outside the. Courts of the United

States (Madhya Bharat) in the absence of any specific provision

it could not be enforced in the United States (Madhya Bharat).

Kapur J., speaking for himself, Rajagopala Ayyangar and Mud­

Jolker JJ., observed at pages 594-595 thus:-

"It will not be correct to say that the decree which

was a nullity before the Constitution came into force

suffered only from the defect of enforcibility by execu­

tion. Sec. 13 creates substantive rights and is not merely

procedural and. therefore defences which were open to

the Respondents were not taken away by any Constitu­

tional changes

in the absence of a

specific provision to

the contrary. lt is erroneous to say therefore that the

decree

of the Gwalior Court was unenforceable when

passed because

.of some impediment which the subse­

quent Constitutional changes

had removed; but thaf de-cree suffered from a more fundamental defect of being

a nullity and the rights and liabilities created under it

remaiped unaffected by subsequent changes".

The contention that the decree of the Gwalior Court could

be executed after its transfer on September 14, 1951 when the

Civil Procedure Code came into force throughout India by virtue

of Act II of 19 51 and that therefore the Gwalior Court had the power to transfer the decree which the Allahabad Court had

under the law authority to execute was also negatived for the

reason that the "Court which mad<? the order of transfer in Sep­

tember 1951 was then not the Court which passed the decree with-

in the meaning,of

Sec.

39". Das Gupta J., with whom Sarkar

B

c

D

E

J., as lie then was, concurred, did not find it necessary to deal

with the question of foreign decree which as he said the Allaha-F

bad Court rightly considered a nullity.

On the second and third

question he held that Allahabad had no power to execute the de-j::'ree under Sec. 38 of the Civil Procedure Code ·ll!i. there was no

valid transfer

to it from the Court which passed the decree nor

did

Section 43 of the Civil Procedure Code as it stood applied to

the execution of that decree.

Even though the observations in Kishendas's case find support

in the above Judgment the ratio of the decision in that case being

that

thi; Madras Court on the date of the order could not transfer

the decree 1:0 the Hyderabad Court, the facts of th·~ case however

do not warrant an application of the principles

of international

law

or of the.decree

being a nullity. The earlier execution proceed­

ings ended unsuccessfullv wijh the decision in Hamra; Nathu Ram

v. Lalii Raia & Sons of Bankura(1). It was decided in that case,

(I) [l963J2 S.C.R. 619.

G

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LALJI

RAJA v. FIRM HANSllAJ (Jaganmohan Reddy,!.) .831 I

that Morena Court not being a Court to which the Code applied

the decree could not have been transferred and that Section

38

and 39 of the Code did not afford jurisdiction for such transfer as

the Morena Court

at the time of transfer was governed by the

Madhya Bharat Civil Procedure Code and not by the Code.

Wh~t

is relevant in the present case is that when the decree holder agam

applied to the Bankura Court for execution of his decree by the

Morena Court after the decision of this Court in

Hansraj' s case,

both the Court that passed the decree and the Court to which it

is

transferred for execuption were Courts under the Code, as such

no question of the Bankura decree ·being a foreign decree or it

being a nullity could arise. The Morena Court on the date when

the order of transfer of the decree was passed by the Bankura

Court

is not a Court governed by the Gwalior law or Madhya

Bharat law

as such the impediment to executability of the Bankura

decree

no longer exists nor could it be considered in the light of

Section

20(c) of the Amendment Act II of 1951 as having saved

any right or privileges under the repealed procedure code of

Gwalior or Madhya Bharat. Whatever may

be the views

ex·

pressed in the several decisions a view which I was also inclined

to take in the decision referred to, though on the facts

of that

case it may not have been necessary, on a further a fuller

con­

sideration I agree with great respect .with the views .of my learned

brother Hegde, J., that no question of a vested right or a privilege

arises to entitle the Respondent

to challenge the execution

pro­

ceedings in Morena Court. The decree granted by Bank)ll'a

Court was executable by the Courts governed by the same Code

by the Court which passed

it or by the Court to which ir is

transferred.

Once the Code is made applicable to the whole

of India by the Amendment Act

II of 1951 the decree is no

lon­

ger a foreign decree qua the Morena Court which is a Court

under the Code to which the Bankura Court could transfer the

decree

for execution. No doubt in

Shitole'.s case it was observed

that Section 13. of the Code creates substantive rights and pot

merely procedural and therefore defence that were open to die

Respondents were not taken away by any Constitutional changes

but the ratio of the decision

was that the Gwalior Court not being

a Court that

pas&".-d the decree' after the coming into force of Act

II of 1951 the Allahabad Court.could not execute it. That im·

pediment does not exist now in that the Bankura Court has trans­

ferr~ the de~~ee to a Court under the Code. The plea that

Sectmn

48

CIVIi Procedure Code presents a bar of limitation is

also not tenable. In the result I agree that the appeal should be

allowe!l as directed by my learned brother.

G.C.

Appeal

allOIJled.

9-Ll!OO Sup Cli7 l