India Builders Corporation vs Masood Asif on 12 August, 2009

 

 

IN 'THE HitI3:H C".:(}U§?T' OF' KARNATAKA AT B.§..:»%§§ALi:§§2§"; .

DATED THIS THE 1-zzm DAY_C}F__AUC§UST« ?2{;)(}i.§:  _ Q "
BEF0R3:}.._ ' u  '_ 4' 
THE H{)N'Bi..E MR;:Jp".§fTiCE:. ANA1'jI;IT§.{3v':...   1.
CIVIL F<EVISiON  1$;o. 1'g' 

BETWEEN:   --_
Ind1'aBui}§.1£;rs Corporati<§Vn_T" V 1   
"Sherifi'Centrc"'" 73;'1, st, £_\{iark's_  ;, .. 

Ba11ga1orc--560  _'  _  ' 

Rey. by its Nianaging Féu'i3fi1t:I'  _   
Mr.Ziauiia_Si2ezjfi'-._ 'V _;  *   

S/(3. Abdni  Siiv:*.ri4fi"*-ff.  r 

Aged ai)n1;t65)_jrc§;33;$V  "  "  ...I'~::tition::r

(By Mfs3.Kamal  'agfiématesz
AND: % " V' t 4

Mr.Ma3o0cL1 ?:s_%fi' » _ 
Cf  Nichoias J'0_¥;1u Milier

 V'  _ I{ing§t:,_::r;. Smith <';§v,"i~'*::e;u'c1'11s5:r:::.
 . l'}x:vu11us};;:i.1'"c"IFi--z2u:sc, €30, Guswcll Road
  I';;;)pn7tio:1v«f;3<3I§i'!T_'?'A.P.  Respondent

'(By/"sx-;_  Kamath, mm' Legal, Sri S.'T'.Prashanth
Kufizarg Acivéycate 3)

'Tiiis revision petiiion is flied under section £15 CFC,

  the nrrier dated 37.¥33.2€109, ptasaeri in ¥3ix.Nna896j2003,
311. the fiie of that: XIX Add}. City Civii Judgs, Bangalari: City,

Vtgverxuiing ihe objections raised by the judgment dsbtor tharein 85

This. revision pctitian msczfircd far csrdcrs on 2'?.O?'.2'C}O9,
Corning on far pmnnunccment this day, the Court maria the
fnilnwhxgs



ORDER

The petitioner {India    u

as judgment debtor in Ex.P.No.896)    ._

of xxx Add}. City Civil 85 at 

Ex.P.No.895/2003 is    claim

No.HC 02000728 dameeg. 1-3; by the High couxt
of Justice,      hokier is
one  ~.    V   

  were  under

sectiox;VV’4e;’§,% (if to the cause nofice issued

under” Order 2.2 CFC, judgment-debtor filed

” The Court on hearing learned Counsel

fee ” oonsiderafion of objections statement,

eve1:n ‘ 11edA objections. Therefore, judmcnbdehtor is

1 beige; t§1.1§s Couxt
” The relevant facts and proceedings necessary for

of this petition are as foiierwsh
., at

By a. Wxitten agreement dated 29.01.1999. _.-jndia
Builders Comoration and U.K.Part’:11em agreed to
and Mazmasooti Asif agreed to seil property ‘
47, Bethnal Green Road, London, _e.1.,._fgr ”
of £3,5£}0,000I~. A deposit of
exchange of contract, “V:}’i:e_ fer’~ L’
exchange of eenizxact vsfas on .5February
1999. The date for was 25.08.1999.

M/3. India Builders eomsaeon ;;…d;gm.;.;..1.b.o.; defaulted

in co1t1:Vpleti§_’)ii7e;f 11.08.1999, the eziecrevholder
issued iiqtice fag of ecmtzact to the soiicitor of

_jucigment~debter’e£ime1_yVAlibi/s.Kidd Rapinet.

“”” 5; the notice, Mfs.Ind:i,a Builders

V{i.12%igment–debto1j asserted that it was entitled

te file contract and tserminate the agreement On

25.08.3.§’§9, _iud.gment-debtor instituted legal pmoeedings

(ie<;:ree-hoider in the Central London County Ceurt,

.A eiaiming that notice to eompiete the agreement ciated

29.01.1999 was invalid and sought for a declaration that it

3%..»

was entiticd to rescind the conizact, following scn:£c_c of
notice on 25.08.1999, ciaiming return of deposit
also for an order of i11_i1m(:tion to resttxain the "

solicitors from disposing of the deposit, ' H '

4. The decree-holder filed’ of %»
counter claim. The notice ” was
sewed on 26.08.1999.§§tngi §2’é;’0’3’i}V1999, as
instructed by the _i11dg:n’e’:zV1:§§1c;§f§ti;$r:Vstateracnt was

prepared by support of an

intcrio{i1;’tory M] s. Halsey Lightly, the
soiicitors thai ‘decree-holder in relation to the

3313 dispésifig: of sum of £1’75.000[ — held by them as

18.03.2000, Endia Buiiders Corpoxafion

filed a écftrncc ané counter claim. On

G8.(3’6.2Ci30’v order was made for removal of M[s.K11dd

V .’}”€ap:i;n.ctV'{s¥o1icitors ofjudgment-debtnri fiom Conn: rceontis.

4__ i,.»-<.T'f/(2%: .

5. On 27.01.2060, the decree-holder flied

claim in the Cfcntral London County Court, f<::r_.';'a1:—- .

that agreement dated 29.(}1.1999__'waisM"iiet';v. '

tenninated by the judgmentdebtof.fo1j 'drémeiges~

_iudgInent–debtor for its __to L'

and / or for breach of contxact. b

By" ictter dated jmglgxnent-debtor
expressed its intention but in fact,
did not 00. §'–..3jo.fl By eon-;.~V::j; 0 0505 2?.02.2002, the
pmceeaaags and transferred from Central

London High Ciourt ofJusi1'ce, Chancery

_ Lond"¢n,.§r 0331. On 14.00.2002, notice of trial was

fieeree-ho1der's solicitors on the judg1nent-

_fi0§1;§iz1ent debtor was aware of date of trial. The

'jilcifiznesrjaite ':i'*;i)tor did not appear before the High Court of

3 Jusjicegfflhancexy Division, London.

On consideration of documents, evidence on mcozti

' after hearm" g the solicitors of the dec:z'ee~hoEder, the High

Court of Justice, Chancery Division, Lon€Io1:1,;""'II1€?1§£i€§:e_

decrw, sought to be exeeuted in

initiation of Ex.P.No.896/2003
judgment-debtor had no business 0:;«a,5dee$s in 1 'V

6. Before the exmufine ‘_i’1u:xgi:#;:g1:ne§3t-debtor
filed objection stat:eme1;:i;._ “§s1:;d ‘0bjecfie11 staten1ent
and raised the foiiflwiez ‘V
The .judgngep%i.’%Vdgigd%eé:. High Court of

Justice, fiurportcad to have been

made éigaiizstwliidie, Cbrporation (iudgmenbdebtoli.

The _iudgfiie;1t–edei3to f:_iswEizot the defendant named in the

_ abovze ;futigme1it j?.1dgment~debtor is not aware of any

name India Buiiders Corporation Plc. The

conclusive. The judgznent-debtor had not

V _ entered agreement with decree-holder or his Ofic1aI’

, L.§cg1;;itiaVt:):e. The judgment–debto:r had not entered into an

agieeizstem far eatzzsideration of £3,5{}0,0G{1/-. The judgment-

wiebtor is not aware of any entity by name “India Builders

V Corporation, Pie and U.K. Partners, who are stated to have

entered into an agreement with Mr.Masood 4′

holder). ‘Th: judgzrnclzmdcbtor had not authoriségi

(signatory to agreement} to

cimugnstanccs, the judgment-dcbt£)r__ 1109.’

favour of decrcc–hoIdcr and §ic;w%$:i:f:§I10i€ier.1rcd’ V

an}; enforceable right _i11dgm£:i1i~{ic:b§tor. The
entire proceedings = of Justice.

Chancel]; on the High

Court of J1;3i$tt_, £)_ivisi;§t_1, VL0’I”1hd0I1. ‘I’hcjudg1ncnt.

debtor: had wngémocver with the decree-
holder. %1f;1e__;aa,gn§cn£41§b<mr had neither initiated any

pxooccdingab Court of Justice, Cihanceiy

.' V. Limgdon iibf appointed any solicitor to enter

pmctwdings. The _iu£ig:11cnt madc by the

Justice, Chancery Division, London is a

gxoduct' {if fraud played on the judgmenbdcbtor and it is not

" before the executing Court. The judgment-debtor

' new notice of any counter claim stated to have been flied

'by the decree-holder. The _ju(igment–debtor had po eocasicm

'}\?a Q. '\~– P'~'~""0&45'*'~'

to challenge the same bcfom the High ;"éif' _

Chanccxy Division, London. The judgment to

enforced is not a judgment on merits, b1$taii1¢d.

The judgment is opposed to fif ;ii:1s?t:i¢£;, z§s %»

the _iudgment-debtor had The
judgmcnbdebtor had Hpi§v<v)ccedings
or consolidation of of pIocccd;In' gs
without of is contrary
to the 'C.P.C. Themfore, the
to entertain the
exocufign debtor had not made: a

Wittlcss Lstaéféifiént :26.08.1999. This is a false and

V' d9cura}éii£"'I3hc said witness statcmcnt was not

Los Angcics on the said date. Th: foreign

'i1i(EgitLcnt.iS' .1-gadt conclusive and it falls within the puzvicw of

._sub~se<: t'i:::ns 13(b} to (f) C.P.C. The dccrcctal amount is in

't_'!1fi xli_atI1rc of "penalty. As such decree cannot be executed

finder section 44–A of CBC. The Indian Law of Contracts. in

particular section 74 of the Indian Contract: Act (ices 130?”;

A5 ~ A, «..飣’?L-

recognise levy of penalty for breach of oemtract.

the decree is ccmtrary to the law in India.

7. I have heard Sri S.S1tcvat:’j§a,
for judgmt-:nt~debtor and Sri; Udaya

Counsel for decree-hokicr.

8. Sri S.S1ecvat$.éa;’1cg:Ag;cc;’ Cpunscl appearing
for judgInent–dc’htQ-r, filed by the
_iudgmcnt–¢:’i_t:b31;9r’ made following
V
I. fihould not have entertained

_ . ‘pr:3i:it:i§’)n it;r no11~pmduci1’on of Cicrtifxcate of
V» the High Court of Justice, Chancery
3 T. fgondon, which is mamiatory under section

M ‘ 44¢£§7g£i::.P.c.

ii. aiicged sum of money payabit under the decree,

A I purported to be passed against judgment-dcbtar for

recovery’ of penalty is not cnforccabic under section

444%. of C.P.C.

RI.

IV.

M/s. India Builders Corporation hm _

in any of the proceedings referred. . ‘l’3f;é

judgment is made against

PIC, which is altogcthmt 3 dififixfiixt cntitfiri %»

decree cannot be
The judgment of .Jus’fivf§Ae,VAVV£3han(:cry
Elivision, London i’s# played on the
ma Cm’j%% %%%4 _ %

The i»?np1_x”gnflééi’jud”g:j;cf1t._ zicyt <x)nciusiv¢ and it is not
given .éfi7mcfifs. – A'

TiA1e_13.*o(:eedMM ' judgment is obtained are

A. -onposétl piinéipiéfi of natural justice. The judgment
sustains a founded on breach of section 74 of
‘V V ..’C.’ont:x3ct Act.

statztmcnt statcci to have hem made: by

Shcrifl’ is a concocted document;

9. Sri Udaya Holia, learned senior Counsel appmring

VA ¢:i::::cmt:~hc,3kicr has made following subIn.issions:-

The production of Certificate of Safis .

sccfion 4443 of C.P.(Z’.. is a ‘non-‘-é ” ” 2

prcaduction of the same Wouki I1§J{ §’3:1l.§{
execution Ciourt. The ;

that it had made any
amgnnt. The part of
the dccmctal amqun f._ of Justice,
“tb.1;<§ugh its solicitom,
whicig Vof the decnw under

Mi 5;. "C£)rpora1:.ion is the defendant in

'.231; £ng.é.-_. £71:-.ic11 uIfim' atelylended in the

""" H Thcrcfozt, judgment-debtor mnnot

to contend that it was not a party to the

— A and the judmcnt obtaalcd is a product of

_ ‘§;5§+;d.

The aufhorisation issued to one Mnfiamid. to cater

into contract, cnfomcmcnt of contract and initiation of

claim by the dccrcc–hoidcr were never opwwd in the

estabiish that India Builders Corporation *

Builders Corporation are two _¢_i.ifi’c:_1jc:nt_”c-:1i’1:’ii:iV$:§’§v;».. 4′

vn. Aftcr transfer of pmcccdings a;*:i.e’LTTH’ig;§’%

Justice, Chancery Divi:-:i§)1;_!V..Lo11’§io1Vi, theT’:@g-;.egiVV,,r.i1dg e *

of the High Conn of Jfiflivision,
London. having ‘dfi-gfiiimcnts and witness
statement had n;ad.~3; i.f:&our of deeme-
hoidey, ‘i1;a-{culminated in the

fgot of natural _iust:1ce.

VIII. ‘:I “h’erc” opporttmity to judg:u:1cnt-
dCbf{}Iu’.. ‘ £31; was absfcntion of

.. j’i;(imefif-‘déilfifpgjifinm the impugned proceedings. The

., ‘i1;4g;fi§fit5dcbmr has raised frivolous and untenable

amid iiahility under the decree.

* of rival conmntions raised by psaflics and

“”sxubn2iSvsi§>ns of lcamcd tliounsci for names. following mints

‘ arise for dcttrn1ina1ion:~

1. Whether production of non–satisf;ié’ii’m_a…’._!: A4
certificate in terms of sub-sccti.on””-fizlv ‘0f ‘
section 44-«A CPC is a conditina
inittiatc execution pI0ccc(§ing:;” :3 ‘A
44-A cps? ” ” ” ” ‘ ‘

2. Whether the sum pay%fiz1 ¢ it; a
penalty and dccyj ig n§t%L¢;;{§rrea,T,i blc ‘
of pmvisions cotifgijlied 44–A of

3. a ciaim founded on

__ fiat iniflndia?

Corporation was not
5 frag: “p;:f'(_*.*ccc:a:iin.g-3., which culxninatcd

‘ ” . iI1 féivour of Mr.Masood Asif (deeme-
…..

?'”V

the decree in execution is a pmduct
V. ciiégraizd?

‘whemcr judgment made by the High Court of

Justrim, Chancery Division, London. was not

given on merits of the case’?

7. Whether proceedings in which judgméfit’ i.- A’

obtained are opposed to principlcspf 3 ‘
mmmp %%% % » *%

8. Whether the 11.’

ixltcrfcrtnce?

Rg: Point No. 1:

I 1. Sri S.Smcvavt:A§.£;; ‘ appearing
for judgment-dch_tor has fft’3:.z’«zVt&::’:V”.d:::(‘:rr2c-holder has
failed to utiie: certificate of non-
satzisfiactiox; of Justice, Chmcery
Divisiég, me Court below did not have
juxisc1ic£ion 😮 “petition under saction 44–

A of §§.’P..C.

1 consideration of provisions of sub-

44~A C.P.C., i find this is a prcxzctiural

‘ aspéc; does not perta:i:n to jurisdiction.

I 13. In a decision rcponcd in A1}? 1%? mnms 45 (in

£433 5-zse qr Sheik Air” Vs. Sheik Mohametfi, a Full Bench of

Wfixadras High Court has hcld:-

3′.’
O’\

….Wc are unable to accept this
on two grounds. The first isyqhat ” _
referred to, that before
Am, the Indian Courts will
to execute the foreign j1iii_ gn;ents’:3nd
event, therefore. there 50f the
application of A_ to Vvfbrinzign
judgments. The S1ib~scc.(l) of
8.44-A docs fl0t:.’Iii€;I.:l:i3’e “fh¢ ” a non-
‘ :aS° for the
Dismqci Sub-

AV does not pertain to
ju:–:sczicfion ..-our vmw’ pxnecdmal; it
conffiiigs .b<:'s.i;ie3 of cvkicntm as to the

»4;j'éo11cIusi¢cz;V1§$$ of the certificate in the spcc1fied'

A We with mspect, unable to agree
Mad LJ 41:2: (AIR 1964 Mad 2:21)
that unless a non-satisfaction
A eggfifigate is filed together with a certified copy of

ifomim decree, the mere filing of a certified

AA ' .__<:apy of the fzymign judgment or ciecrw;-: alone wiil
” not west the Disisict Court with jurisdiction to

execute.”

14. From What has been held by the
Madxas High Court in the decision cited supxa,-if is V’
that production of certification v.r::ef~ u u
pmcetiurai aspect. Above all, the
case that it had pamy sausfiefithg ;l’:§-j§*”‘tl1.’3.e iiigh *
Court of Jusirice, Chapcety {hat the
execution of decree of limitation.

Therefore, I answer 1’€»o.::} i1’1.thc zieggitirgie.

Reg: Pomt.N§$s,f2 ” ‘V
Sri ” _’ ed senior Counsel appeanh g

for _iudgment¥dei§§§oqr”fefer’fing to Explanation ii to section 44-

_ A of Weuid §’1}fi3′?’J}]’.t that decree sought to be executed

.A~i$’«.fQ1″ of penalty. The High (301111: of Justice,

London, has accepted forfeiture of

£1′?F:,0C3§f ‘–‘,’ stated to have been deposited by the judgmezm

3 deb_:or, ii.; adsiiticmn has levied damages by way of penalty of

«, which is new sought to be recovered before the

T below.

aw. c:>—~– mt

16. The Icamcd senior Counsel placing _

judqj of Supreme Court, reported in AIR ‘195éo;s:;C-ij§9.s’ . .V

the case of Fateh Cfhand Vs.

that under section 74 of the Indian L.

covenant for forfeiture of of
contract, that wouid be ‘The senior
Counsel wouid further Court in the
afomstatod _jm}dgfo;§’:nt between the
provisions — Contract Act and
terms of contract and
supumocg “cf penalty. Thus, decree under

execution a contrary to section 74 of the

” V’ A :;1&;g&1 Contrac’ t magga it is not enforceable in India.

1 Qdaya Holla, teamed senior Counsel appearing

would submit that what has been awarded

under” impugned decree is damages and not penalty.

V’ = 18. The learned senior Counsel for dc<:ree–hoIdcr,

" Iéerymg on the judgment reported in AIR 1958 Keraia 1:25 (in

20

the law of the country where the oonI:m.§:_t_ ‘

made (icx loci oontractus) and as a «

presumption: “when the conufapt is ‘–
country, and is to be pcrforngcd »¢i ti1c1″” X A
partly in another, then the lav§_..of .t’.i:1e”
contract may be thfl.

country where the perforiiImV1<:cu is id –

(lcx ioci solutio}aisi};??«_ – M
In the casepn agreement and
xtconis rclatixsgvg’ ” had entered into

agreement No.39~4?, Bcthnal’

Gmcn V’ Liizzgiéan ; for total consideration of

£3.$(30.CX3i3,{f; was mortgaged to the City

, fl afii’-»I::;_§gf1Aa;:hargc was held by the City (Europe)

‘decfeajholdcr {Mr.Masooci Asifl was paying intcrcst

The Lcanned Judge of the High Court of

Division, London, dealing with claim for

H u ‘ ciamagéé ‘has heki:-

“£6. The breach of contract being Em my
judgment crystal clear, what are the
censequenoes? Those are clear, foihwing the

fit?’ ‘ k_&k.:,,,,.O,(_g\.

provisions of conditions 7.5.1 and 7.5.2. If

buyer fhils to complete in accordance A’

noficc to complete, the following ‘M
“The seller may rescind the .c£mtr&act’. iii:
does so he may forfeit and my; A’
accrued interest; he may :cscii’t}§éV.pmp§ri§.r;t

three, he may claim damagés,”

17. Mr.As;=§%s the deposit, to
keep it and “IV. Clear and
therefore: it secm s’ ‘£9 iimve “ii: shouki

have to <)iV1t.i§fV:iZ'aéa11rt..t:11at sum and

""" flit" with the
of 'Which has taken place,
ot}:er"ré§i€f*-fixfit is sought is a claim fir

_It:1éxti1ig it; the £1?5,000 ncver paid.

” ‘ damages is advanced by

on the basis of the decision of

_ Millichamp V. Jones [1982] 1 WLR
V particular at 1430 and upon that of the
‘ .33§;ag’o£’ity of the Court of Appeal in the case of

Eamon Cm Navicra SA V Hapag Lloyd

International SA 11935} IWLR 435, and in

particular fhc passages which Mr.Grfit.hs relied
on at pages 450, 481, 452 and 45?. Those
decisions and conditicsn ‘?’.5. 1 provide

22

Mr.G;~if1:iths with support, but the
provisions of 7.5.2 are probably of thcm§ci§’cs§ ‘§W

suficient to justify the claim of is A

foxwaxd. The Courtwiil then:-icy; bawazvi’ * _

of £173,000 and interest oifi

conttactuai rate contained fium”

26*' Iflthrtlmy 1999." ' ' A"  AV

21. Therefore, 5,; oamm    of
damages, according to    between

paras' s is a pcna1i3r_    of Justice,

Tix}i;1don.”_”VV”i’i’1c judgment awarding
damagcst as .. not contravene provisions of

scctiqxy “:}.1c]. Contact Act. The paras’ 5 had

<*t~ii1 U.K., in respect of property situate

acljudicafion of damages by applying

R ct: be termed as brcacli of any law in force

in fhc cizcumstanccs, it cannot be hcfl that decree

V' » éxccfifion is being enforced to recover penalty as stated

gm Explanation 11 to sectiien 44»–A C..P.C. It is also not

mfaossihlc to hold that decmc sustains a claim founded on

breach of section ?'4 of the Indian Contract _

reasons, points 2 35 3 are ansvmred in the ncgsxifia, V

Reg: Faint Nos. 4 8:. 5:

22. It is the <:ontentics:1_ of ,;'t1<'i';z,:u1cnt.-fir;V1;::t:o:'£* L»

8111121" em Corporation) that n¢$t*».a§" rt} to the
proceedings. The .11I1<_i:¢érV_ is ffiroduct of

fraud.

23. The appcarixlg for

_judgmcnt-(ii-;btg$i;_»V 2 of agn=:e_ mcnt dated

29.01:’;99Q– India Builders Corporation
had not ax14ti1ofi;sk;cVi to sign the agmcment. In the

agrcgfimcnt d¢21t’cx;i: 1999, the buyer has been described

3;.r:LDfi§i%§s CORPORATION of Shcrifi” Centre,

1,’ ViA;[«%,<3t.§;ra:ks Road, Bangalore-560 001 India and UK

Péiitzaers' of 16.1; 163, Commercial Road, London, E1 LDA".

AA ' The icarxmd senior Counsel appearing for

u_§':?1£ig9Ament-debtsr, mftzrring to various documants would

""§ubm:;t that in the Ciaim Form stated to have been

24

by judgxncnt-debtor (Claim No.CL953063), ‘
London County Court, the claimaxgthas bcéii’ as u V’
“INDIA BUILDERS CORPORATION v;PLt”3g’C *fhe§;’

to have been instituted by sol;3€:_ii:9;:s of M

25. The Icamedv Sf.;’I3,i0I”wA*’.’f§’)1′ j;idVgméiv;t–debtor
Wouid further submit by the High
Court of Justziagrc; the claimant
has been j.f§§D_I§”~”_EijII,D§RS CORPORATION
PLO”, ‘A for Private limited
Compa;:.y).r the: claimant has been

described’ V’:-1§ ” infiia Corporation plc. Therefore,

_iudg11_’§: cfi*ix-dcbtdr” nfsthing to do with the India Buikiers

Therefore, Icarncd senior Counsel

_j€§d”g.mant-debtor would submit that judgment-

‘ VV _ dcbicr was lfist a party to the aforestatcd proceedings.

” The kamed senior Counsel appearing for decree»

hAr before

2?'. The learned    for decree-
holdcr would     were to be any