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CASE NO.:

Appeal (civil) 3316 of 2001

Appeal (civil) 3317 of 2001

PETITIONER:

M/S. INTERNATIONAL WOOLEN MILLS

Vs.

RESPONDENT:

M/S. STANDARD WOOL (U.K.) LIMITED

DATE OF JUDGMENT: 25/04/2001

BENCH:

V.N. Khare & S.N. Variava

JUDGMENT:

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

S. N. VARIAVA, J.

Leave granted.

Heard parties.

Both these Appeals are against a Judgment dated 9th

December, 1999 and are being disposed of by this common

Judgment. The parties will be referred to in their capacity

in Civil Appeal arising out of SLP (Civil) No. 2250 of

2000. Briefly stated the facts are as follows :

In 1996 the Appellant had placed an order with the

Respondent for purchase of greasy fleece wool. The goods

were shipped to Mumbai on C.I.F. terms in September 1996.

The Appellant claimed the goods from Mumbai and took them to

Ludhiana. The Appellant did not pay the price of the goods

on the ground that after taking delivery it was found that

the goods were of an inferior quality. The Respondent sent

a Lawyer's notice dated 18th October, 1997. The Appellant,

through his lawyer, sent a reply dated 8th November 1997.

On 19th January, 1998 the Respondent filed a case in

Central London Country Court in United Kingdom. The

Respondent claims that the Appellant was served with the

summons of that case. The Appellant claims that he had not

been served in that case. For our purposes we are not

concerned with this controversy and express no opinion

thereon. On 20th April, 1998, an ex-party decree came to be

passed by the Central London County Court. The decree reads

as follows :

"IT IS ORDERED that There be Judgment for the Plaintiff

in the sum of US $49,178.50 plus interest of US $717 00 ANF

court costs. A total of US $49,895.50 plus £ 243.75."

On 20th August, 1998 the Respondent filed an Execution

Application in the Court of Civil Judge (Senior Division),

Ludhiana. Upon receipt of the summons in the execution

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proceedings the Appellant filled an Application praying for

dismissal of the execution application as it was filed

without following the procedure prescribed under Sections

38, 39 and 40 of the Code of Civil Procedure. In reply to

this Application the Respondent contended that the execution

was under Section 44- A of the Code of Civil Procedure and

as such there was no requirement to observe the provisions

of Sections 38, 39 and 40 of the Code of Civil Procedure.

In view of this stand the Appellants filed another

Application stating that the decree was not on merits and as

per the provisions of Section 44(A) read with Section 13(b)

of the Code of Civil Procedure the Court had to refuse to

execute the decree. Both the Applications were heard by the

Civil Judge (Junior Division), Ludhiana. By two separate

Orders dated 15th March, 1999, both the Applications were

dismissed.

The Appellant then filed Civil Revision No. 2703 of

1999 against two Orders dated 15th March, 1999. This Civil

Revision came to be dismissed by the impugned Judgment dated

9th December, 1999. By this Judgment the High Court found

that the decree was not on merits but it still dismissed the

Revision on the ground that the second Application was

barred by the principles of constructive res-judicata. It

is against this Judgment that these two Appeals have been

filed. The Appellant has filed the Appeal [arising out of

SLP (Civil) No. 2250 of 2000] against dismissal of their

Revision. The Respondent has filed Appeal [arising out of

SLP (Civil) No. 5332 of 2000] against that portion of the

impugned Judgment which holds that the decree was not on

merit.

One further fact which must be mentioned is that the

Appellant has now filed a Suit in Ludhiana against the

Respondent claiming damages in a sum of Rs. 4 lacs for

having supplied goods of an inferior quality and for having

committed a breach of the contract. That Suit is still

pending. The first question for consideration is whether

the High Court was right in holding that the second

Application was barred on principles of constructive

res-judicata. It must be noted that the first Application

was on the ground that the provisions of Sections 38, 39 and

40 of the Code of Civil Procedure had not been complied

with. In that Application the defence taken was that the

decree was being executed under the provisions of Section

44-A of the Code of Civil Procedure. In view of this stand,

before any decision was given, the second Application had

been filed. Both the Applications were heard together. In

other words the second Application was filed and heard

before any decision was given in the first Application.

Both the Applications were only decided on 15th March, 1999.

There was thus no question of their being a decision finally

deciding a right or claim between the parties. Mr.

Hingorani however submitted that this case would be covered

by Explanation IV to Section 11 of the Code of Civil

Procedure. He submitted that in the earlier Application the

defence regarding non compliance of Section 13(b) could have

been taken but had not been taken. He submitted that it was

not open to the Appellants to take such a defence in a

subsequent Application. In our view there is no substance

in this submission. Explanation IV to Section 11 of the

Code of Civil procedure would have come into play only if

some decision had been finally given before the second

Application was filed. In that event it could have been

urged that all available points should have been urged

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before that decision was given. In this case the second

Application was filed before any decision on the first

Application was given. The Appellants could have, instead

of filing a second Application, amended their first

Application and taken these pleas in that Application

itself. Had they amended the first Application there would

be no bar of res-judicata or constructive res judicata. If

that be so one fails to understand how the second

Application was barred by principles of res-judicata or

constructive res- judicata. To be remembered that the

Orders were passed after hearing arguments on both the

Applications. Under such circumstances no question arises

of their being any res-judicata or constructive

res-judicata.

At this stage it must be mentioned that Mr. Hingorani

relied upon cases of Janki Vallabh v. Moolchand and others

reported in AIR (1974) Rajasthan 168, Baijnath Prasad Sah v.

Ramphal Sahni and another reported in AIR (1962) Patna 72,

P.K. Vijayan v. Kamalakshi Amma reported in AIR 1994 SC

2145, Mohanlal Goenka v. Benoy krishna Mukherjee and Ors.

reported in (1953) SCR 377 in support of his submission that

the principles of res-judicata and/or constructive

res-judicata also apply to execution proceedings. It is not

necessary to deal with these authorities as there can be no

dispute to the proposition that principles of res-judicata

and/or constructive res-judicata apply to execution

proceedings. However, as stated above, in this case there

was no final decision which operated as res- judicata.

The second question which arises is whether the above

mentioned decree of the English Court could be executed in

India. Section 44-A of the Code of Civil Procedure reads as

follows :

"44-A (1) 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 as if it had been passed by the District Court.

(2) Together with the certified copy of the decree shall

be filed a certificate from such superior Court stating the

extent, if any, to which the decree has been satisfied or

adjusted and such certificate shall, for the purposes of

proceedings under this section, be conclusive proof of the

extent of such satisfaction or adjustment.

(3) The provisions of section 47 shall as from the

filing of the certified copy of the decree apply to the

proceedings of a District Court executing a decree under

this section, and the District Court shall refuse execution

of any such decree, if it is shown to the satisfaction of

the Court that the decree falls within any of the exceptions

specified in clauses (a) to (f) of section 13.

Explanation I. - "Reciprocating territory" means any

country or territory outside India which the Central

Government may, by notification in the Official Gazette,

declare to be a reciprocating territory for the purpose of

this section, and "superior Courts', with reference; to any

such territory, means such Courts as may be specified in the

said notification.

Explanation 2 - "Decree' with reference to a superior

Court means any decree or judgment of such Court under which

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a sum of money is payable, not being a sum payable in

respect of taxes or other charges, of a like nature or in

respect of a fine or other penalty, but shall in no case

include an arbitration award, even if such an award is

enforceable as a decree or judgment."

By virtue of Sub-section (3) the Court shall refuse

execution if it is shown to the satisfaction of the Court that the

Decree falls within any of the Exceptions in clauses (a) to (f) of

Section 13.

Section 13 reads as follows :

"13. A foreign judgment shall be conclusive as to any

matter thereby directly adjudicated upon between the same

parties or between parties under whom they or any of them

claim litigating under the same title except -

(a) where it has not been pronounced by a Court of

competent jurisdiction;

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

case;

(c) where it appears on the face of the proceedings to

be founded on any incorrect view of international law or a

refusal to recognise the law of India in cases in which such

law is applicable;

(d) where the proceedings in which the judgment was

obtained are opposed to natural justice;

(e) where it has been obtained by fraud;

(f) where it sustains a claim founded on a breach of any

law in force in India.

Thus under sub-clause (b) if the decree has not been

given on the merits of the case then the foreign judgment is not

conclusive between the parties and the same cannot be executed

in India.

The question which then arises is whether the Decree,

set out herein, above can be said to be a decree on merits.

Parties have cited a large number of authorities of various

High Courts on the question as to when a decree can be said

to be on merits. In support of the contention that the

above mentioned decree is on merits reliance has been placed

upon the case of Sheikh Abdul Rahim alias S.A. Rahim vs.

Mohamed Din and another reported in AIR (1943) Calcutta 42.

In this case it has been held by the Calcutta High Court

that a person asserting that the judgment was not on merits

because no evidence was given must prove the same as there

is a presumption in Section 114 of the Evidence Act that

judicial acts have been regularly performed. On this

principle the Calcutta High Court has held that even though

a decree was given ex-parte the same must be presumed to be

on merits. In our view the law laid down in this case

cannot be said to be the correct law. Section 114 merely

raises the presumption, under illustration (e) thereof, that

judicial acts have been regularly performed. To say that a

decree has been passed regularly is completely different

from saying that the decree has been passed on merits. An

ex-parte decree passed without consideration of merits may

be decree passed regular if permitted by the rules of that

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Court. Such a decree would be valid in that country in

which it is passed unless set aside by a Court of Appeal.

However, even though it may be a valid and enforceable

decree in that country, it would not be enforceable in India

if it has not been passed on merits. Therefore for a

decision on the question whether a decree has been passed on

merits or not, the presumption under Section 114 would be of

no help at all. It must be mentioned that in support of

submission that it must be presumed that all formalities

were complied with and the decree passed regularly reliance

was also placed on cases of Krishna Kumar v. State of

Haryana reported in AIR 1999 SC 854 and The Commissioner of

Income Tax, A.P. v. M. Chandra Sekhar reported in AIR

1985 SC 114. In our view these authorities are of no help

in deciding the question under consideration. Even if we

presume that all formalities were complied with and Decree

was passed regularly it still would not lead to the

conclusion that it was passed on merits.

In the case of Middle East Bank Ltd. vs. Rajendra

Singh Sethia reported in AIR 1991 Calcutta 335 a decree had

been passed ex parte and without service of notice on the

judgment- debtor. A number of authorities were cited before

the Court including the case of Abdul Rahim (supra). The

Court held that even though a decree may be ex parte it may

still be on merits provided it could be shown that the Court

had gone through the case made out by the Plaintiff and

considered the same and taken evidence of the witnesses put

up by the Plaintiff. It was held that if an ex parte decree

was passed in a summary manner under a special procedure

without going into the merits and without taking evidence

then those decrees would not be executable in India. Based

on this authority it was submitted that a decree could be

said to be not on merits only if it is passed in a summary

manner in any special or summary procedure. It was

submitted that such a decree i.e. a decree which has not

been passed in a summary manner in a summary proceeding

would be a decree on merits. This authority itself makes it

clear that the decree would not be on merits if Court has

not gone through and considered the case of the Plaintiff

and taken evidence of witnesses of the Plaintiff. It must

also be noted that in this case the Court ultimately held

that the concerned decree was not a decree on merits.

Reliance was placed upon the case of Gustave Nouvion vs.

Freeman and another reported in 15 Appeal Cases 1, wherein

it was held that if a foreign judgment finally and

conclusively settles the existence of the debt so as to

become res judicata between the parties, then the action can

be brought on such a judgment. Based on this it was

submitted that as the judgment and decree of the English

Court would operate as res judicata between the parties, it

would be a decree on merits, which could be enforced in

India. It must be seen that this judgment is based upon the

English law. The law in India is different by virtue of

Section 13 of the Code of Civil Procedure which provides

that if a decree is not on merits it cannot be enforced in

India.

Reliance was also placed upon the case of D.T. Keymer

vs. P. Visvanathan reported in AIR 1916 Privy Council 121.

In this case it has been held as follows :

"The whole question in the present appeal is whether, in

the circumstances narrated, judgment was given on the 5th

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May 1913, between the parties on the merits of the case.

Now if the merits of the case are examined, there would

appear to be, first, a denial that there was a partnership

between the defendant and the firm with whom the plaintiff

had entered into the arrangement; secondly, a denial that

the arrangement had been made; and, thirdly, a more general

denial, that even if the arrangement had been made the

circumstances upon which the plaintiff alleged that his

right to the money arose had never transpired. No single

one of those matters, was ever considered or was ever the

subject of adjudication at all. In point of fact what

happened was that, because the defendant refused to answer

the interrogatories which had been submitted to him, the

merits of the case were never investigated and his defence

was struck out. He was treated as though he had not

defended and judgment was given upon that footing. It

appears to their Lordships that no such decision as that can

be regarded as a decision given on the merits of the case

within the meaning of section 13, sub-section (b). It is

quite plain that that sub-section must refer to some general

class of case, and Sir Robert Finlay was asked to explain to

what class of case in his view it did refer. In answer he

pointed out to their Lordships that it would refer to a case

where judgment had been given upon the question of the

Statutes of Limitation, and he may be well founded in that

view But there must be other matters to which the

sub-section refers, and in their Lordships' view it refers

to those cases where, for one reason or another, the

controversy raised in the action has not, in fact, been the

subject of direct adjudication by the Court."

It was submitted that this Judgment lays down that

decree is not on merits if defence of the defendant has been

struck off. It is submitted that as, in the present case,

defence had not been struck off, the present decree would be

a decree on merits. In our view no such principle can be

drawn from this authority, if anything, this is an authority

against the proposition that the present decree was a decree

on merits.

Reliance was also placed upon the case of Ishri Prasad

vs. Sri Ram reported in AIR 1927 Allahabad 510. In this

case it was held that the phrase 'the merits of the case'

has to be understood in contradistinction to a judgment by

way of penalty. It was held that if a decree is passed by

way of penalty or on default then such a decree would not be

a decree on merits but if the decree is passed otherwise

even though it is an ex-parte it will be a decree on merits.

Reliance was also placed upon the case of Ram Chand vs.

John Bartlett reported in Vol. III Indian Cases 523. In

this case it has been held as follows :

"The next contention that has been raised for the

appellant to show that the respondent's suit on the foreign

judgment did not lie, is that the said judgment was not

passed on the merits, and that, therefore, it cannot be

enforced by the Indian Courts. In my opinion this

contention has no force. The writ of summons issued by the

High Court in England was, it is admitted, duly served on

the appellant in this country, but the latter did not,

within the time allowed for that purpose, enter an

appearance and deliver a defence. The respondent had (under

the rules of procedure that govern the Supreme Court) the

right, at the expiration of the prescribed period, to enter

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final judgment for the amount claimed, with costs. The writ

aforesaid was especially endorsed with the statement of

claim, containing all the necessary particulars, and there

is nothing to show that the application for leave to serve

the writ was not supported by affidavit or other evidence

stating the several particulars required by Order XI, rule

4. In short, the proceedings held in the high Court of

England appear to have been strictly in accordance with the

existing rules of procedure, which are not shown to be in

any way contrary to the fundamental principles of justice

and fair play ; and the judgment passed against the

defendant on the facts of the case must be considered as one

passed on the merits. It does not proceed on any

preliminary point, i.e., a point collateral to the merits of

the case, but is based on the merits as disclosed by the

pleadings before the Court, if the defendant did not, in

spite of notice of action, choose to appear and defend it,

the judgment passed by the Court in plaintiff's favour was

not the less a judgment on the merits, because it was not

founded upon detailed evidence which the plaintiff might

have produced had the defendant entered an appearance and

contested the claim. The position to my mind is the same as

if the defendant had appeared and confessed judgment. In

support of his contention that the judgment in question

cannot be considered as one passed on the merits, the

appellant's counsel has relied on the following passage in

Sir William Rattigan's Private International Law (1895) at

pages 234-235:

"It would seem to be equally plain that, if, for

instance, it should happen that by the law of a foreign

country, a plaintiff was entitled to judgment simply on the

non-appearance of a defendant who had been duly served, and

without adducing any evidence whatever in support of his

claim, or if the wrong-headedness of a foreign Judge should

induce him to so decide, the plaintiff would not be entitled

in an English Court to sue upon a judgment so obtained. If

on no other ground, such a judgment of a foreign Court

would, at all events, be so contrary to the fundamental

principles of the Law of England as, for this reason alone,

to be incapable of receiving any effect in a British Court."

The above passage does not, however, as I read it, support

the present appellant's position, as it cannot, in my

opinion, be affirmed in this case that the plaintiff has

obtained judgment from the High Court in England "simply on

the non-appearance of the defendant without adducing any

evidence whatever in support of his claim." Under Order XI,

rule 4, the plaintiff's application for leave to serve the

writ of summons out of the jurisdiction must be supported by

affidavit or other evidence stating that the plaintiff has a

good cause of action * * * * and the grounds upon which the

application is made, and leave can only be granted if the

Court or Judge is satisfied that the case is a proper one

for the service prayed for. The necessary procedure must be

presumed to have been followed in this case, and it has not

been shown by the appellant that it was not so followed.

The affidavit filed by the present plaintiffs- respondents

in pursuance of the above rule, would, in my opinion,

constitute "evidence in support of the claim" within the

purview of the principle laid down in the passage quoted

above, and the judgment obtained after service of the writ

on the defendant as required by the rules of the Supreme

Court would, I think, be a judgment on the merits. If,

however, the passage relied upon does not bear the

construction I have placed upon it, if, that is to say, it

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means that thee can be no judgment on the merits, unless,

after the service of the writ on the defendant in the

regular way the plaintiff has adduced some evidence, oral or

documentary, in support of his claim, such as he would have

produced if the defendant had appeared and contested the

claim, then, with all possible respect for the learned

author of that passage, I venture to think that the rule

laid down by him is expressed in too wide language, and I

should be reluctant to follow it unless it were supported by

clear authority. I can discover no such authority either in

Dicey's "Conflict of Laws" (p. 411), or in any other

standard text-book on the subject; and I do not think that

the maxim enunciated by Sir William Rattigan himself as the

one applicable in such cases, viz., that the judgment passed

must not contravene the fundamental principles of a rational

system of law, supports the wide proposition, which it has

been urged, is laid down in the passage quoted above."

In our view the passage in Sir William Rattigan's

Private International Law (1895) at pages 234-235,

reproduced above, states the correct law. With great

respect to the learned Judges concerned the restricted

interpretation sought to be given cannot be accepted. With

greatest of respect to the learned Judges we are unable to

accept the broad proposition that any decree passed in

absence of Defendant, is a decree on merits as it would be

the same as if Defendant had appeared and confessed

Judgment. We also cannot accept the proposition that the

decree was on merits as all documents and particulars had

been endorsed with the statement of claim. With the

greatest of respect to the learned Judges they seem to have

forgotten at stage of issuance of writ of summons the Court

only forms, if it at all does, a prima-facie opinion.

Thereafter Court has to be consider the case of merits by

looking into evidence led and documents proved before it, as

per its rules. It is only if this is done that the decree

can be said to be on merits. It was also submitted that the

burden of proving that a decree was not on merits is

entirely on the Appellants. It was submitted that no

evidence had been led by the Appellants to show that the

decree was not on merits and for that reason it must be

presumed that the decree is on merits. In support of this

submission reliance was placed upon the authority in the

cases of R.M.V. Vellachi vs. R.M.A. Ramanathan reported

in AIR 1973 Madras 141, R. Viswanathan vs. Rukn-ul-Mulk

Syed Abdul Wajid reported in 1963 (3) S.C.R. 22.

Undoubtedly the burden of proving that the decree is not on

merits would be on the party alleging it. However Courts

never expect impossible proofs. It would never be possible

for a party to lead evidence about the state of mind of the

judge who passed the decree. Of course, amongst other

things, the party must show that the decree does not show

that it is on merits, if necessary the rules of that Court,

the existence or lack of existence of material before the

Court when the decree was passed and the manner in which the

decree is passed. All this has been done in this case. It

was also submitted that the Courts of law are not concerned

with the result and even though the result may be repugnant

to the Court, still the Court cannot relieve the party from

the burden if the law provides for a contingency. In

support of this reliance was placed upon the case of The

Martin Burn Ltd. vs. Corporation of Calcutta reported in

AIR 1966 S.C. 529 and Firm Amar Nath Basheshar Dass v. Tek

Chand reported in AIR 1972 S.C. 1548. There can be no

dispute to this proposition. However this proposition cuts

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both ways. If the decree is not on merits then, even though

the Court may be reluctant to leave the Respondents remedy

less, the Court would still have to refuse to enforce the

decree. In support of the proposition that such a decree

could not be a decree on merits. Reliance has been placed

upon the authority in the case of Algemene Bank Nederland NV

v. Satish Dayalal Choksi reported in AIR 1990 Bombay 170.

In this case a summary suit had been filed in Hong Kong. In

that suit leave to defend was granted to the defence. Thus

the High Court had prima facie considered the merits of the

matter and had granted unconditional leave. Thereafter the

defendant filed a written statement. It appears that the

defendant applied to the Reserve Bank of India for foreign

exchange in order to engage lawyer in Hong Kong and his

application was not granted by the Reserve Bank of India.

As a result the defendant could not appear at the trial and

an ex parte decree came to be passed against the defendant.

The question which arose before the Court was whether such a

decree could be said to be a decree on merits. A large

number of authorities were cited before that Court and it

was ultimately held as follows :

"28. In the light of these authorities I have to see

whether in the present case the Hong Kong court gave its

decision on the merits of the controversy. The Hong Kong

Court had before it the defence which was filed by the

present defendant. The defence questioned the execution of

the guarantee to repay the debts of Madhusudan & Co. Ltd.

The entry of 7.4.85 in the Register of Guarantees was also

questioned by the defendant. In the absence of the

defendant, these contentions raised by him could not have

been considered. The judgment which is before me does not

indicate whether actually any evidence was led before the

Hong Kong Court and whether the Court went into the merits

of the case. The judgment merely sets out that "on the

defendant's failure to appear and upon proof of plaintiff's

claim," the judgment is entered for the plaintiff. The

plaintiff-Bank has emphasised the words "upon proof of

plaintiff's claim". They have also produced the original

guarantee which bears in one corner a sticker showing that

it was exhibited before the Hong Kong Court. The

plaintiff-Bank has not said in its affidavit that the

documents which were tendered before the court were properly

proved or that anybody on behalf of the bank had given

evidence to establish the plaintiff's claim. This becomes

relevant because it is the contention of the defendant that

the guarantee which he had given was a blank and undated

guarantee. It had been misused by the plaintiff-Bank in the

present case. The defendant has also relied upon

alterations and erasures in the plaintiff-Bank's register of

guarantees to show that this undated guarantee was

subsequently entered in the register by altering another

entry to indicate that it was given around 7th April 1985.

There is no material to show that these aspects of the

dispute were ever examined by the Hong Kong Court. The

Court seems to have proceeded to pronounce the judgment in

view of the defendant's failure to appear at the hearing of

the case to defend the claim on merits.

29. In my view, in these circumstances, the case before

me falls under the ratio laid down by the Privy Council in

Keymer's case (AIR 1916 P.C. 121). The decision of the

Hong Kong Court is not given on examination of the points at

controversy between the parties. It seems to have been

given ex parte on the basis of the plaintiff's pleadings and

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documents tendered by the plaintiff without going into the

controversy between the parties since the defendant did not

appear at the time of the hearing of the suit to defend the

claim. The present judgment, therefore, is not a judgment

on the merits of the case. Hence this is not a fit case

where leave can be granted under Order 21 Rule 22 of the

Code of Civil Procedure for the purpose of executing the

decree here."

In our view this authority lays down the correct

proposition of law.

Reliance was also placed upon the case of Chintamoni

Padhan and others vs. Paika Samal and ors. reported in AIR

1956 Orissa 136. In this case it has been held that a

judgment on the merits is one which is entered after a full

trial of the issues through pleadings, presentation of

evidence, and arguments by both sides. It is held that the

expression 'judgment on the merits' implied that it must

have been passed after contest and after evidence had been

let in by both sides. In our view the authority also cannot

be said to be laying down the correct law. In a given case

it is possible that even though Defendant has not entered

evidence the Plaintiff may prove its case through oral and

documentary evidence. If after consideration of oral and/or

documentary evidence an ex parte decree is passed, it would

be a decree on merits.

In the case of Trilochan Choudhury vs. Dayanidhi Patra

reported in AIR 1961 Orissa 158, the above mentioned

decision in Chintamoni Padhan's case has been overruled. In

this case it is held that under Section 13(6) even an ex

parte judgment in favour of the plaintiff may be deemed to

be a judgment given on merits if some evidence is adduced on

behalf of the Plaintiffs and the judgment, however brief, is

based on a consideration of that evidence. Where however no

evidence is adduced on the plaintiff's side and his suit is

decreed merely because of the absence of the defendant

either by way of penalty or in a formal manner, the judgment

may not be one based on the merits of the case. In our view

this authority lays down the correct law. In the case of

Govindan Asari Kesavan Asari vs. Sankaran Asari

Balakrishnan Asari reported in AIR 1958 Kerala 203, it is

held as follows :

"In construing S. 13 of the Indian Civil Procedure Code

we have to be guided by the plain meaning of the words and

expressions used in the section itself, and not by other

extraneous considerations. There is nothing in the section

to suggest that the expression judgment on the merits has

been used in contradistinction to a decision on a matter of

form or by way of penalty.

The section prescribes the conditions to be satisfied by

a foreign judgment in order that it may be accepted by an

Indian Court as conclusive between the parties thereto or

between parties under whom they or any of them litigate

under the same title. One such condition is that the

judgment must have been given on the merits of the case.

Whether the judgment is one on the merits, must be apparent

from the judgment itself. It is not enough if there is a

decree or a decision by the foreign Court. In fact, the

word 'decree' does not find a place anywhere in the section.

What is required is that there must have been a judgment.

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What the nature of that judgment should be is also indicated

by the opening portion of the section where it is stated

that the judgment must have directly adjudicated upon

questions arising between the parties.

The Court must have applied its mind to that matter and

must have considered the evidence made available to it in

order that it may be said that there has been an

adjudication upon the merits of the case. It cannot be said

that such a decision on the merits is possible only in cases

where the defendant enters appearance and contests the

plaintiff's claim. Even where the defendant chooses to

remain ex parte and to keep out, it is possible for the

plaintiff to adduce evidence in support of his claim (and

such evidence is generally insisted on by the Courts in

India), so that the Court may give a decision on the merits

of his case after a due consideration of such evidence

instead of dispensing with such consideration and giving a

decree merely on account of the default of appearance of the

defendant.

In the former case the judgment will be one on the

merits of the case, while in the latter the judgment will be

one not on the merits of the case. Thus it is obvious that

the non-appearance of the defendant will not by itself

determine the nature of the judgment one way or the other.

That appears to be the reason why S. 13 does not refer to

ex parte judgments falling under a separate category by

themselves. A foreign Court may have its own special

procedure enabling it to give a decision against the

defendant who has failed to appear in spite of the summons

served on him and in favour of the plaintiff, even without

insisting on any evidence in support of his claim in the

suit.

Such a judgment may be conclusive between the parties so

far as that jurisdiction is concerned, but for the purpose

of S. 13 of the Indian Civil Procedure Code such a judgment

cannot be accepted as one given on the merits of the case,

and to that extent the law in India is different from the

law in other jurisdictions where foreign judgments given for

default of appearance of defendants are also accepted as

final and conclusive between the parties thereto. This

position was noticed and recognised in AIR 1927 Mad 265 (D).

The contention that the defendant who had chosen to remain

ex parte, must be taken to have admitted the plaint claim

was also repelled in that case as unsound and untenable.

His non-appearance can only mean that he is not inclined to

come forward and contest the claim or even to admit it.

His attitude may be one of indifference in that matter,

leaving the responsibility on the plaintiff to prove his

claim if he wants to get a decree in his favour. Such

indifference on the part of the defendant cannot necessarily

lead to the inference that he has admitted the plaintiff's

claim. Admission of the claim is a positive act and it

cannot be inferred from any negative or indifferent attitude

of the person concerned. To decree the plaint claim solely

on account of the default of the defendant and without

considering the question whether the claim is well-founded

or not and whether there is any evidence to sustain it, can

only mean that such a decree is passed against the defendant

by way of penalty.

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It will not satisfy even the minimum requirements of a

judgment on the merits of the claim. What such requirements

are, have been explained in Abdul Rehman v. Md. Ali

Rowther, AIR 1923 Rang 319 (J), in the following terms :

"A decision on the merits involves the application of

the mind of the Court to the truth or falsity of the

plaintiff's case and therefore though a judgment passed

after a judicial consideration of the matter by taking

evidence may be a decision on the merits even though passed

ex parte, a decision passed without evidence of any kind but

passed only on his pleadings cannot be held to be a decision

on the merits."

The same view was taken by the Patna high Court also in

Wazir Sahu v. Munshi Das, AIR 1941 Pat. 109 (K), where the

question when an ex parte decision can be said to be on the

merits, was answered as follows :

"An ex parte decision may or may not be on the merits.

The mere fact of its being ex parte will not in itself

justify a finding that the decision was not on the merits.

That is not the real test. The real test is not whether the

decision was or was not ex parte, but whether it was merely

formally passed as a matter of course or by way of penalty

or it was based on the consideration of the truth or

otherwise of the plaintiff's claim."

We are in respectful agreement with the view taken in

these two cases."

In our view this authority lays down the correct law.

In the case of R.M.V. Vellachi v. R.M.A. Ramanathan

Chettiar reported in AIR 1973 Madras 141, the facts were

almost identical to the present case. In that case also an

ex parte decree had been obtained. In this case it was held

as follows : "The Law of Civil Procedure governing the

institution of suits, service of summons upon the defendant,

the liberty to the plaintiff to apply for a decree against

the defendant in case of the defendant's default of

appearance, in the Supreme Courts of Penang and Singapore,

are all similar and identical and are on the same pattern as

the procedural laws in England, i.e., "The Rules of the

Supreme Court". The Full Bench decision of this Court

referred to above in ILR 50 Mad 261 = (AIR 1927 Mad 265)

(FB) which dealt with the enforceability of a judgment

obtained in the Supreme Court of Penang has been followed in

almost all the high Courts. This decision was rendered

about 45 years back and had been uniformally followed by

this Court. (Vide: the Bench decision of Jagadisan, J.

and Kailasam, J., in Sivagaminatha v. Nataraja, AIR 1961

Mad 385. It is unnecessary to refer to all the cases and it

is sufficient to refer to the latest Bench decision of this

Court reported in Mohammad Sheriff and Co. V. Abdul Jabbar

ILR (1966) 1 Mad 18 in which a Bench of this Court had to

deal with a similar problem arising out of a foreign

judgment rendered by the Supreme Court of Singapore on

default of appearance of the defendant. Veeraswami, J., (as

he then was), delivering the judgment on behalf of the

Bench, after referring to the relevant decisions, has

followed and applied the principle enunciated by the Full

Bench.

The learned Judge pointed out that the decree that

followed as a matter of course solely on account of the

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default of the defendant's appearance could not be a

judgment on merits, as no evidence was adduced and there was

no judicial consideration of the tenability or justness of

the claim. In view of this recent pronouncement of the

Bench of this Court which is binding upon us, the matter

does not require further elaboration. It is true that under

Section 44-A sub-clause (3), the burden is upon the

defendant who resists execution, to establish, to the

satisfaction of the Court which is called upon to execute

the decree, that the foreign decree suffers under any one of

the infirmities covered by any of the exceptions specified

in clauses (a) to (f) of Section 13, Civil Procedure Code.

We may refer to the Bench decision of the Calcutta High

Court in Abdul Rahim v. Mohamed Din, AIR 1943 Cal 42. In

the instant case, the respondent has discharged his burden

by placing ample materials that the foreign judgment cannot

be executed because the High Court of Singapore was not a

"Court of competent jurisdiction" within the meaning of

Section 13 (a) and that the defendant has not voluntarily

submitted to the decision of the Tribunal and also that the

decree of the High Court of Singapore was not given on the

merits of the case within the meaning of Section 13 (a)."

On the basis of this law let us now see whether the

present decree is a decree on merits. It is to be seen that

between the parties there is a controversy whether the

Appellant/defendant was at all served. As stated above it

is not necessary for us to resolve this controversy. For

the purposes of this Order only we will presume that the

Appellant had been served. Facts on record disclose that

before service was effected an affidavit had been filed in

the English Court by one Kaashif Basit, Solicitor for the

Respondent, to which affidavit had been annexed copies of

the the invoice and other relevant documents. On the basis

of this affidavit an order in the following terms came to be

passed :

"UPON reading the Affidavit of Kaashif Basit sworn 20

January 1998

IT IS ORDERED that the Plaintiff be at liberty to serve

the Summons in this action on the Defendant at 31,

Industrial Area-A, Ludhiana- 141003, Punjab, India, or

elsewhere in India, and that the time for acknowledging

service shall be 23 days after service of the Summons on the

Defendant."

This shows that leave to serve the Appellant was granted

after reading the affidavit. Thus at this stage the Court

had presumably seen the documents annexed thereto. The

Court has been careful enough to note that it had read the

affidavit. However, at this stage, only a prima facie

opinion was being formed. Thereafter the said Mr. Kaashif

Basit, Solicitor for the Respondent had filed an affidavit

of service stating that service had been effected on one

Yash Paul, who is claimed to be an employee of the

Appellant. To this Affidavit also all relevant documents

were annexed. Thereafter no documents are tendered nor any

evidence led. The English Court then pronounces the

judgment and decree, which has been set out herein above.

It does not even say that the second Affidavit had been

read. This Judgment and decree does not indicate whether

any documents were looked into and/or whether the merits of

the case was at all considered. It merely grants to the

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Respondent a decree for the amounts mentioned therein. To

be noted that the Appellant had, by his letter dated 8th

November, 1997, replied to the Notice of the Respondent

dated 18th October, 1997. In this reply it had been

mentioned that goods were of inferior quality and not as per

contract. Court has not applied its mind or dealt with this

aspect. It has not examined points at controversy between

the parties. It is given ex-parte as Appellant did not

appear at hearing of Suit. It is not a judgment on merits.

On the principles of law enunciated herein above, in our

view, it is clear that such a decree cannot be said to be a

decree on merits. Such a decree cannot be enforced in

India. In this view of the matter Civil Appeal No. of

2001 [arising out of SLP (Civil) No. 2250 of 2000] is

allowed and the Application of the Appellant that this

decree cannot be enforced in India as it is not on merits is

made absolute. Civil Appeal No. . of 2001 [arising out

of SLP (C) No. 5332 of 2000] stands dismissed. There will

be no order as to costs in both the Appeals.