Full Judgment Text
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PETITIONER:
ROSHANLAL KUTHIALA & ORS.
Vs.
RESPONDENT:
R.B. MOHAN SINGH OBERAI
DATE OF JUDGMENT17/10/1974
BENCH:
KRISHNAIYER, V.R.
BENCH:
KRISHNAIYER, V.R.
KHANNA, HANS RAJ
BEG, M. HAMEEDULLAH
CITATION:
1975 AIR 824 1975 SCR (2) 491
1975 SCC (4) 628
CITATOR INFO :
RF 1990 SC 334 (34)
RF 1990 SC1480 (78)
ACT:
Code of Civil Procedure (Act 5 of 1908) s. 13-Enforcement of
foreign judgment.
Limitation Act (9 of 1908), s. 14-Scope of.
Practice-Application of equity by Indian Courts.
HEADNOTE:
The appellant agreed to sell his hotel to the first
respondent and the first respondent paid an earnest money of
Rs. 5 lacg. Alleging a breach of contract the first
respondent filed a suit in the sub-court Lahore, for return
of the earnest money, and the suit was decreed. The
appellant filed an appeal to the High Court at Lahore and
the execution of the decree was stayed on condition of his
depositing Rs. 3 lacs. The appellant deposited the amount
but the decree holder (first respondent), on objection by
the appellant, was not allowed to withdraw the amount before
the disposal of the appeal. The appeal was allowed by the
High Court, and thereafter, the appellant moved the High
Court for refund of the deposit made by him. The Pakistan
(Administration of Evacuee Property) Ordinance, 1949, having
come into force by then, notice was given by the High Court
to the Custodian and the Custodian prayed for staying the
return of the amount on the ground that the appellant was an
evacuee and also for the payment of the amount in deposit to
the Custodian. The amount however continued to be in
deposit in court. The respondent appealed to the Federal
Court of Pakistan against the Judgment of the High Court and
his appeal was allowed. The amount. however, continued to
be in the Pakistan Treasury. In January, 1954, the
appellant filed a petition in the High Court of Lahore
praying, that the amount of Rs. 3 lacs deposited by him may
be directed to be adjusted towards the satisfaction of the
decree as orginally intended, and that his request for the
refund may be treated as withdrawn, and that the objections
filed by the Custodian dismissed. As a result of political
understanding between the two countries, court deposits were
agreed to be transferred to the respective countries. On
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the strength of that law in Pakistan the respondent moved
the High Court at Lahore for transfer of the deposit of Rs.
3 lacs to the concerned officer or authority in India on the
ground that the money was deposited in part satisfaction of
his decree. The High court dismissed the application but
the Supreme Court of Pakistan allowed it and directed the
transfer of the deposit to the concerned authority in India
after dismissing the Custodian’s objections. But the
deposit continued in the Pakistan Treasury.
The respondent thereupon moved the High Court of Punjab in
India for levying execution of his decree and invoked the
provisions of the Indian Independence (Legal Proceedings)
Order, 1947. The High Court dismissed the execution appli-
cation. In appeal the Supreme Court of lndia heid that the
forum for enforcement and the process for getting relief and
execution of the foreign decree was a suit under ss. 9 and
13, Civil Procedure Code, in the Competent Court. The
respondent thereupon filed a suit for recovery of the decree
amount based on the foreign judgment in his favour and the
trial court and the High Court, in appeal, decided in his
favour.
In appeal, to this Court, it was contended by the appellant
: (1) that the decree of the Federal Court of Pakistan which
wag the foundation of the action in India had vested
automatically in the Custodian under the Pakistan Ordinance
of 1949, and that therefore, the respondent had no right to
recover on the basis of the foreign judgment; (2) the six
years period available under art. 117 of the Indian
Limitation Act, 1908 for a suit upon a foreign decree having
expired long ago the suit was barred by limitation; and (3)
in any event the sum of Rs. 3 lacs already deposited to the
credit of the decree in the Lahore Court, having been
actually adjusted towards the decree, the appellant would be
liable only for a sum of Rs. 2 lacs together with subsequent
interest.
492
Allowing the appeal on the last ground,
HELD : 1 (a) A foreign judgment is enforceable by a suit
upon the judgment and it shall be conclusive as to any
matter thereby directly adjudicated upon between the same
parties subject to the exceptions enumerated in g. 13,
C.P.C. In the present case, the judgment of the Pakistan
Court was in favour of the respondent, and none of the
nullifying clauses in that section being attracted, it is
conclusive under g. 13.
[50OG-H]
(b Since the decree was not treated as evacuee property
under s. 3 of the Pakistan Administration of Evacuee
Property Act, 1957, it is not evacuee property, and
therefore, did not vest in the Custodian. The Custodian
never demanded any right qua the decree-holder-respondent
nor as stepping into his shoes. His claim in the Lahore
court was that the appellant became an evacuee and that the
amount should not be returned to him, and, at no stage did
the appellant even contend that the respondent wag not
entitled to sue for the amount and that the Custodian alone
had such right. [50IF-H]
(2) Section 14 of the Limitation Act, 1908, saves the
regpondent’s suit from the bar of limitation. [502 D]
It is a sine qua non of a claim under g. 14 that the earlier
proceding is prosecuted in good faith; and any
circumstances, legal or factual, which inbibits enter-
tainment or consideration by the court of the dispute on the
merits comes within the scope of s. 14. Section 14 is also
wide enough to cover periods coered by execution
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proceedings. In the present case, the launching of
execution of the Pakistani decree in India was done after
consulting two leading Indian lawyers and the circumstance
shows the bona fides of the respondent; and the prosecution
of the execution proceedings in the High Court of Punjab was
repelled, because and only because, the institution of such
proceedings on the execution side was without jurisdiction.
The question thus was one of initial jurisdiction of the
Court to entertain the execution proceedings. [502E-H; 503A-
C]
Raghunath Das v. Gokal Chand and Another [1959] S.C.R. 817
at 818, India Electric Works Ltd. v. James Mantosh & Anr.
[1971] 2 S.C.R. 397 at 401 and The Associated Hotels of
India Ltd. and Another v. R. Y. Jodha Mal Kuthalia [1961] 1
S.C.R. 259 at 272 referred to.
(3)In India, the historical and artificial distinction
between equity and law does not exist and equity itself is
enforced as law with all its built in limitations. Our
equitable jurisdiction is not hidebound by tradition and
blinkered by precedent, though trammelled by judicially
approved rules of conscience. When law speaks in positive
terms equity may not be invoked against it, but, while
applying the law, the court can and must ameliorate
unwitting rigours inflicted by legaligms, where there is
room for play by the use of equity. [503H; 507G; 509C-D]
In the present cage, neither party was blameworthy and
indeed both were agreed at a stage that the deposit should
go in satisfaction of the decree affirmed by the final court
in Pakistan. The decree holder had laid claim to the sum to
the exclusion not only of the Custodian but also of the
judgment-debtor. Taking a pragmatic view of the justice of
the case, the Court has to see who should bear the loss in
these circumstances. Although the courts and the parties
assumed that the court deposit as specially earmarked
towards the discharge of the decree, because of supervening
political upheavals, and eventual disregard of the court’s
order by the Pakistan Government, the decree-holder-
respondent could not withdraw the sum. The equity arises
largely from the iniquity of a foreign government’s refusal
to carry out the directions of its municipal courts.
Therefore, the deposit of Rs. 3 lacs should be treated as a
pro tanto discharge of the decree in favour of the res-
pondent from that date when the appellant agreed for such
adjustment. The decree amount as on the date inclusive of
costs incurred will have to be calculated and Rs. 3 lacs
deducted therefrom. There will be a decree in favour of the
respondent only for the balance which would carry 5%
interest from then on as stipulated in the decree. [504C, E;
505F-H; 509F-G]
Chowthmull Manganmull v. The Calcutta Wheat and Seeds
Association I.L.R. 51 Cal. 1010 and Sheo Cholanm Sahoo v.
Rahut Hoysein I.L.R. 4 Cal. 6 referred to.
493
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2248 &
2303 of 1968.
From the Judgment & order dated the 30th August, 1968 of the
Delhi High Court (Himachal Bench), Simla in Regular First
Appeals No. 21 of 1967).
S. T. Desai, A. Subba Rao, Naunmt Lal and Lalita Kohli, for
the appellant (In CA No. 2248/68).
A.K. Sen, M. C. Bhandare and Rameshwar Nath, for respondents
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Nos. 1 & 2 (In CA No. 2248/68).
B. P. Singh, for respondents Nos. 4, 6-11(In CA. No.
2248/68).
A. K. Sen and M. C. Bhandare, for the appellant (In CA No.
2303/68);
S.T. Desai, A. Subba Rao, Naunit Lal and Lalita Kohli, for-
respondents Nos. 1, 2 & 4-9 (In CA. No. 2303/68).
The Judgment of the Court was delivered by
KRISHNA IYER, J.-The principal appeal, C. A. 2303 of 1968,
has arrived in this Court by certificates, under Art.
133(1)(a) of the Constitution, granted by the High Court of
Delhi. (The other, C.A. 2248 of 1968 has been extinguished
by efflux of time and even otherwise is not pressed, since
counsel concedes the decision to be just).
The subject matter is large, the rounds of litigation many,
the arguments long and yet the issues of law and disputes of
fact are few although their ultimate decision where justice
and law have, we think, come to cordial terms, has been
reached after uneasy hours but with an easy conscience.
Hopefully, we avoid burdening the judgment with heavy
historical material much of which has been. wisely
jettisoned to help turn the forensic focus on the three-
pronged attack on the decree made by counsel for the
appellant Shri S. T. Desai.
Even so, the sequence and significance of events leading up
to the current controversy, sprawling across India and
Pakistan and surviving for nearly three decades now, may be
unfolded with advantage. Now to the story. Lahore was the
venue of the earlier forensic episodes. The legal saga
formally began in undivided India when the 1st appellant,
Kuthalia, the owner of Sedous Hotel, agreed to sell it on
October 2, 1946 for a price of Rs. 52,75,000/- to the 1st
respondent Oberoi, who became a name in the hotel industry.
An earnest money of Rs. 5,00,0001- was advanced and the time
fixed for completion of the sale was January 20, 1947. On
alleged breach of contract, Civil Suit No. 514/61 of 1946
was filed in the Court of the Senior Sub-Judge, Lahore, by
the 1st respondent (Oberoi) as the 1st plaintiff and the
Associated Hotels of India Ltd., as the 2nd plaintiff, for
recovery of the earnest money with interest. A decree in
favour of the 1st plaintiff was made in the sum of Rs.
5,08,333-5-4 with future interest and costs. So far as the
2nd plaintiff was concerned the reason for whose presence as
party is obscure, if not oblique-
494
the suit was dismissed. An appeal was successfully carried
by the present appellant to the High Court of West Pakistan
in Lahore since, by the time the trial Court’s decree was
made the "Great Divide" had happened with all the blood and
tears of political history and traumatic effects on the law
and life in both the countries. The uprooting and
overturning of human masses led to ’evacuee’ legislation on
both sides of the frontiers and the common case of the
parties is that both of them are evacuees under the relevant
Pakistani laws. The Lahore High Court, on 24th November,
1949 dismissed the suit in toto, but, undaunted, Shri Oberoi
moved the Federal Court of Pakistan which restored the
decree of the trial Court (on 21-12-53) in reversal of the
High Court’s decree. Thus the final Court in Pakistan at
the relevant time granted a decree in favour of the 1st
respondent, against the appellant, and that stands. This
landmark event closes the chapter of substantive rights and
here begins a set of encounters in realising the fruits of
the decree. The crescendo of this unique series is the
persuasive but opposing ’submissions’ we have listened to.
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Two crucial factors gave a dramatic turn to the course of
the conflict viz., ’evacuee’ legislation and the deposit of
Rs. 3,00,000/- in Court, in connection with the decree,
pending the High Court appeal. A brief narration of those
matters is now necessary to follow the development of the
dispute before us. In the High Court, stay of execution was
sought and granted on condition of deposit of Rs. 3,00,000/-
on July, 16 1949 and furnishing of security for the balance.
Pursuant thereto, the sum was deposited by the judgment-
debtor into the executing Court, but the decree holder, on
objection by the former, was not allowed to withdraw the
money before disposal of the appeal. All this took place in
July, 1949. Thus a key fact, whatever its impact, emerges
that the judgment-debtor (appellant) had put into Court this
substantial sum but he had also prevented the respondent
getting instant benefit of it.
The social disasters of the political surgery already
adverted to were alleviated by legislative bandaging of
economic wounds through laws to rehabilitate evacuees on
either side. As part of this package, the Pakistan
(Administration of Evacuee Property) Ordinance, 1949 was
promulgated. This legislation defines an ’evacuee’ and, as
stated earlier, the contestants in this case are both
admittedly evacuees. Section 2(3) of the Pakistan Ordinance
defines ’Evacue property’and one of the points in
controversy before us is as to whether the decree passed by
the Federal Court of Pakistan for the sum of around Rs.
5,00,0001- or the deposit of Rs. 3,00,000/- in connection
with that decree, is ’evacuee property’. We may have to
dilate on the scheme and provisions of this Pakistan
Ordinance a little later, but it is sufficient to state, at
Custodians of Evacuee Property and invests them with certain
powers. Right away we may read s.6 (1) of the Ordinance
since its effect has impact on one of the important
contentions urged by Mr. Desai :
"6(1) All evacuee property shall vest and
shall be deemed always to have vested in the
Custodian with effect from the first day of
March, 1947."
495
In simplistic terms, if we may here anticipate Shri Desai’s
submission, there was a statutory vesting of the decree
obtained by Oberoi in the Custodian and no rights accruing
from that decree could be claimed by the former. The
foundation of the present suit thus collapsed, according to
him. We will investigate the merits of this knock-out blow
to the plaintiff’s case in due course. Two other
legislations, the Transfer of Evacuee Deposit Act, 1954 and
the Pakistan Administration of Evacuee Deposit Act, 1954 and
the Pakistan Administration of Evacuee Property Act, 1957
loom large as the legal chronicle continues. The former
primarily provides inter alia for transfer of court deposits
of evacuees by each country to the other and the latter
saves some items from the all-embracing of operation evacuee
property. More later.
Anyway, the present appellant, when be won in the High
Court, moved for refund of the deposit by his application of
December 1, 1949. Follow-up by way of an order for refund
was natural the Court having dismissed the suit. But the
Court tacked oh a further direction that intimation be given
to the Custodian to take appropriate proceedings, if he
thought fit. Thus alerted, the officer hastened. Hardly
had 4 days passed when the Custodian moved the High Court
for interdicting the return of the amount on the score that
the entitled party was an evacuee under the aforesaid
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Ordinance of 1949. The High Court thereupon stayed refund
of the deposit to the appellant by an order dated December
20, 1949. The sequel shows that this amount has eluded the
hands of both parties up till now, an extralegal misfortune
which has a bearing on the ultimate relief claimable in this
appeal.
To resume the fluctuating fortunes of the deposit, the main
apple of discord. The Custodian’s petition of 20th
December, 1949 included a prayer for payment out to him of
the amount in deposit, as, according to him, it belonged to
Kuthalia (the defendant) an evacuee. However, it was kept
pending on notice having been ordered to the depositor. But
when the suit by Oberoi was decreed by the Federal Court,
the right to refund put forward by the defendant
disappeared. Even so, since both parties were evacuees the
Rehabilitation Commissioner sent a request to the High Court
in these terms:
"From
S.S. JAFRI ESQUIRE C.S.P.
REHABILITATION COMMISSIONER AND SECRETARY TO GOVERNMENT
PUNJAB, REHABILITATION DEPARTMENT.
To
THE REGISTRAR HIGH COURT OF JUDICATURE
PUNJAB LAHORE
Dated Lahore the 4th January, 1954
Subject:-Hedous Hotel Lahore Deposit of Rs. 3 lacs in the
High Court of Lahore.
496
MEMORANDUM
A sum of Rs. 3,00,000 was deposited by R.B. Jodha Mal of
Hoshiarpur, in the High Court Lahore for the benefit of the
Associated Hotel of India Limited. A decree was passed by
the Senior Civil Judge Lahore in favour of the Associated
Hotel of India Limited against R.B. Jodha Mal for a sum of
Rs. 5,08,333-5-4. The deposit of Rs. 3,00,000 was made in
part payment of the above decree. R.B. Jodha Mal preferred
an appeal in the High Court against the order of the Civil
Judge. This appeal was accepted on 24th November, 1949.
Against this decree of the High Court the Associated Hotel
of India Limited, filed an appeal in the Federal Court of
Pakistan. This appeal was accepted by the Federal Court on
21st of December, 1953.
2.Since both the contesting parties are evacuees the amount
in question can not be paid until instructions from
Government of Pakistan are received in the matter. It is
therefore requested that the amount of Rs. 3,00,000 may
please be deposited in the Treasury under the detailed head.
"Sale proceeds of Immovable Property and debts due to
Evacuee etc." Under the head. "P. Deposits and Advances
Part 11 Deposits not bearing interest Departmental and
Judicial Deposits Civil Deposits, Deposits on account of
Evacuee Estates" in the accounts of the Deputy
Rehabilitation Commissioner (Rent and Repairs), Lahore under
intimation to this office.
(Sd.) GHULAM SHABBIR,
Deputy Secretary Rehabilitation,
for Rehabilitation Commissioner and Secretary to Government
Punjab Rehabilitation Department.
No. U. Reh. Ace. G/333, Dated Lahore 4th January, 1954."
Thus the amount remained frozen. A couple of days later
(January (6) the defendant Kuthalia moved the High Court at
Lahore not for refund of the deposit-which he could not ask
for in view of the Federal Court decree-but praying ’that
the aforesaid amount of Rs. 3,00,000/- may be directed to be
adjusted towards satisfaction of the decree as originally
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intended and the request for refund be treated as withdrawn
and the objections filed by the Deputy Custodian be
dismissed.’ Anyway, the lid was put on this part of the lis
bearing on the Custodian’s claim to keep the deposit in
Pakistan by the Supreme Court of Pakistan, holding to the
contrary. To appreciate this decision of the Supreme Court
reference has to be made to s-4 of the Pakistan Ordinance I
of 1954 (which reincarnated as Act VI of 1954 with the same
name) relating to transfer of deposits. This enactment had
its counterpart in India. As a result of political
understanding reached between the two countries, Court and
other deposits were agreed to be transferred to the
respective countries into which the evacuees entitled to
them had moved. On the strength of this law Shri Oberoi the
decreeholder, moved the High Court at Lahore for transfer of
the deposit
497
of Rs. 3,00,000/- together with the records relating thereto
’to such officer or authority in India as the Central
Government has by order specified in this behalf or
specifies in future as the provisions of’ the said Act fully
applies to it.’ It may incidentally be mentioned since it
has considerable importance at a later stage, that in this
application Shri Oberoi had categorically asserted:
"That Rai Bahadur Mohan Singh, decree-holder
submits that judgment-debtor had no interest
in the. said sum and the same is lying
deposited with this Hon’ble Court for the
payment to him, as it was deposited for the
due performance of such decree as may
ultimately be passed in his favour. The said
decree-holder contends that no other person
has any right or interest in the said amount
and that the same is lying with this Court in
trust for payment to him. The judgment-debtor
has accepted this position, and claims no
right or interest in the said amount."
Although the High Court declined to uphold the claim for
transfer of the deposit under Act. VI of 1954, on being
approached by the decree-holder the matter received
different treatment at the bands of the Supreme Court.
Shri Oberoi’s contention was:
"That the Federal Court of Pakistan having
passed a decree in favour of the petitioner
and the sum deposited being for the
satisfaction of the decretal amount this
Hon’ble Court has erred in holding that the
petitioner had no interest in the deposit. it
was neither within its jurisdiction to decide
the same nor its decision on that point is
legal and correct."
Cornelius C. J., speaking for the Court, overruled the
pretended claim of the 2nd plaintiff, the Associated Hotels
of India Ltd., rejected the Custodian’s objections and
ruled:
". . . It would appear that prima facie the
principal and direct interest in the money is
that of Rai Bahadur Jodha Mal. The money
having been deposited in relation to a decree
of the Court, for the purpose of being applied
to the satisfaction of that decree, and such
decree standing exclusively in the name of Rai
Bahadur Mohan Singha Oberoi, he might appear
to have a secondary and indirect interest in
the money...."
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In short, the highest court directed the transfer of the
deposit, subject to an innocuous finding by the High Court
about both contestants being evacuees. In fulfilment of the
Supreme Court’s remand the High Court of West Pakistan
passed final orders in these peremptory terms:
"We, therefore, have no hesitation in holding
that both Rai Bahadur Jodha Mal Kuthalia, the
depositor, and Rai Bahadur Mohan Singh Oberoi,
for whose benefit the deposit was made are
within the purview of section 4 of the
Transfer
498
of Evacuee, Deposits Act, 1954, "evacuees" and
direct that the deposit be sent to the
Custodian of Evacuee Property, along with the
record of the case, for transmission to such
an authorised officer or authority in India as
the Central Government has specified in this
behalf for disposal in accordance with the
law."
In the sorry scheme of affairs this direction remained a
dead letter. Courts can only command, but if Governments
ignore them, the finer flame of the rule of law is puffed
out and the darker forces of rule by executive diktat choke
the life breath of the law. Anyway, the Supreme Court’s
order notwithstanding, the deposit of Rs. 3,00,000/lies idle
still, after a lapse of 14 years, in Pakistan Treasury.
The scene now shifts to India. both the dramatis personae
move to India and, perhaps make good. Here is a decree
paralysed by circumstances beyond the control of the
parties. The decree-holder Oberoi, after taking legal
advice at the highest level, moved the High Court of Punjab
at Chandigarh for levying execution of his decree, which, by
passage of time, had added adipose by way of interest and
remained undiminished by the deposit in the Pakistan Court
to the credit of the decree. The swollen sum claimed in
execution was 10,79,820/4. In doing so he sought the aid of
s.4(3) of the Indian independence (Legal Proceedings) Order,
1947 read with O.XLV, r.15 and s. 15, C.P.C. Many road
blocks in the way of the executability of the decree were
placed by the judgment debtor but the High Court of Punjab
at Chandigarh, assisted by eminent counsel, elaborately
considered the many legal questions and dismissed the
execution petition. The Court found that the situs of the
decree which was ’property’ was Lahore and so Oberoi, an
evacuee, had been divested of all interest therein, the
Pakistan Custodian being the repository of all such rights.
The property in the decree being negatived, the present
respondent failed. Many other findings hostile to his claim
were also rendered by the High Court However, the quietus
to this Operation execution was given by the Supreme Court
of India where the parties, engaging top legal talent,
hopefully reached, obtaining leave under Art. 133(1)(a) and
(c) of the Constitution. In that appeal the judgment debtor
(present appellant) resisted the proceedings, filing a
statement of the case through his advocate Shri Naunit Lal,
as required by the Supreme Court Rules (This statement has
pertinence to the point regarding limitation vis-avis s. 19
of the Limitation Act, to be dealt with later). The Court,
after stating the facts of the long litigation, punctuated
by the puzzling waves of evacuee legislation, by-passed
issues unnecessary to the determination of the case
(although decided by the High Court) and came to the crux of
the matter whether this Pakistani decree could be straight
executed invoking 0.45, r.15, C.P.C. When one gets entangled
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in the skein of details impertinent to the core issue, the
true problem gets obfuscated. This happened, to an extent,
in the High Court. Side-stepping these in essentials,
Gajendragadkar J. (as he then was) speaking for the Court,
came to the scope and sweep of the Indian Independence
(Legal Proceedings) Order, cleared
499
the legal cobwebs and laid bare the object and ambit of that
law in the back-ground of the historic surgery of Indian
geography which took place then. The Court concluded thus :
"The next question which must be considered is
whether the present suit falls within Section
4(1) at all. The answer to the question must
obviously be in the negative. The material
allegations made by the appellants in the
plaint filed by them in the present suit
clearly show that the whole cause of action
had accrued within the jurisdiction of the
Senior Sub-Judge at Lahore. The original
contract had taken place at Lahore, the
property agreed to be sold was situated at
Lahore, the earnest amount of Rs. 5,00,0001-
was paid by the appellants to the respondent
at Lahore ’ the breach of the contract took
place at Lahore, and so under Section 20(c) of
the Code of Civil Procedure the suit was
properly filed in the Court at Lahore and the
jurisdiction of the said Court to try the suit
was in no manner affected by the passing of
the Act or the transfer of territory. This
position was not and is not disputed. There
is, therefore, no doubt that the trial Court
could have proceeded to deal with this suit
even if the Order in question had not been
passed; and so the statutory fiction raised by
the provisions of the Order cannot be invoked
enforcing a decree passed by the Federal Court
in an appeal arising from such a suit. In our
opinion, therefore, the High Court was in
error in holding that the provisions of
Section 4 applied to the- decree sought to be
executed by the appellants."
The view, though in reversal of the High Court’s holding,
did not effect the ultimate outcome. For the Court ruled
that the executiorn of the foreign decree, as if it were one
of the Supreme Court of India, was misconceived. In other
words, the forum for enforcement and the process for getting
relief viz., a suit under s. 9 and 13 of the C.P.C. in the
competent Court of original jurisdiction could not be
circumvented or short-circuited by resort to the exceptional
methodo logy indicated in s. 4(1) or (3) of the Indian
Independence (Legal Proceedings) Order.
This extinguished the fires of controversy regarding
executability but ignited the current original suit. Shri
Oberoi, discomfited in execution, was driven to filing a
regular suit for recovery of the decree amount based on the
foreign judgment in his favour and indeed success attended
his efforts, since the trial Court and the High Court made
shortshrift of all the pleas to non-suit him.
It is this defeat on all points that has escalated the
appellant’s litigation to the top judicial deck, this Court,
urging his triple opposition to the plaintiff’s decree.
Shri Desai’s ’submissions’ logically and sequentially, were
three. Firstly, the decree of the Federal Court of
Pakistan, which was the foundation of the present action,
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had vested automatically in the Custodian under the Pakistan
Ordinance of 1949 and, therefore, the
7-255Sup.CI/75
500
plaintiff Oberoi had no right to recover on the basis of the
foreign judgment. Absent locus standi or cause of action,
his suit was bound to fail and therefore the appeal was
bound to be allowed on that initial ground alone.
His second submission was that the six-year period available
under Art. 117 of the Indian Limitation Act for a suit upon
a foreign decree had long ago expired, reckoned from the
date when the Federal Court of Pakistan granted the present
plaintiff a decree. By simple arithmetic he is right but
the plaintiff has sought to salvage his action from the
clutches of limitation by reliance on ss. 14 and 19 of the
Indian Limitation Act. In the facts and circumstances of
the present case, Shri Desai repels this rescue operation as
a misapplication of the relevant provisions.
The last, yet to our mind the most meaningful, point urged
by the appellant, was that although a decree for Rs.
5,00,0001- had been awarded by the Pakistan Court in favour
of the present plaintiff, a sum of Rs. 3,00,000/- had
already been deposited to the credit of that decree in the
Lahore Court and had been actually adjusted towards the
decree, with the result that the worst coming to the worst
only a sum of Rs. 2,00,000/- together with subsequent
interest could be claimed by the plaintiff, in law and
justice. The equities between the parties were a component
of the branch of jurisprudance bearing on execution of
foreign decrees.
We proceed to examine the soundness of these three
contentions in the order set out above.
Locus Standi
Ordinarily, a suit on fact of a foreign decree is
sustainable and s. 13C.P.C.,sets out the limitations on the
amplitude of the right. This proposition is not disputed but
what Shri Desai argues is that the decree being ’evacuee
property’ under the Pakistan Ordinance, it has already
vested in the Custodian by statutory Operation, so much so
the plaintiff has long ago ceased to be decree-holder. May
be other limited remedies, to get relief as an evacuee who
has lost large properties, may be available to Oberoi under
other enactments in both countries but qua holder of a
foreign decree he cannot bring a suit to recover the debt-an
infirmity affecting the root of his right.
The plaintiff’s answer is simple and sufficient and deflates
the defendant’s resistance, based on ’evacuee’ legislation.
A foreign judgment is enforceable by a suit upon the
judgment which creates In obligation between the parties.
Indeed, it ’shall be conclusive as to any matter thereby
directly adjudicated upon between the same parties’ subject
to the exceptions enumerated in s. 13 C.P.C. None of these
nullifying clauses being attracted, prima facie the foreign
judgment on which the plaintiff founds his present action is
unassailable. Certainly, the judgment of the Pakistan Court
was in favour of the plaintiff and, being conclusive under
s. 13, the defendant could not be heard to urge to the
contrary.
501
Even so, let us’ analyses the evacuee law based bar, to see
if it has substance.
To appreciate the merit of this argument, it is necessary,
as earlier pointed out, to follow the provisions of the
evacuee legislation in Pakistan. The Ordinance of 1949
defines ’evacuee’ [s. 2(2) and both the parties herein fall
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squarely within that definition. The second question then
is whether the decree, which is the source of the pla-
intiff’s rights, is ’evacuee property’ as defined in s. 2(3)
of the 1949 Ordinance or is ’Property’ as defined in s.2(5)
thereof. If it is, s. 6 of the said Ordinance will operate
to divest the plaintiff of his ownership of the decrce and
vest it in the Custodian, notwithstanding any other law to
the contrary (s.4 of the Ordinance is an over-riding
provision). The first point that falls for decision
therefore is to decide whether the decree of Shri Oberoi is
’evacuee property’. Assuming for a moment that it is-and at
the first Rush it is-an argument which neutralises this
contention is urged by the other side, based on the Pakistan
(Administration. of Evacuee).Property Act, 1957 (12/58).
There is hardly any doubt that the parties are ’evacuees’
within the meaning of this Act also. Even so, the Pakistan
Administration of Evacuee Property Act, 1957 (XII of 1958)
carves out a category of evacuee property out of the
Custodian’s control. Does this decree thus escape the net?
Yes, it it has not been treated as evacuee property. For,
although all evacuee property vests in the Custodian by
force of s. 7 of this Act s. 3(1) is of strategic signi-
ficance and reads:-
"3. Property not to be treated as evacuee property on or
after 1st January, 1957.
(1)Notwithstanding anything contained in this Act, no (?)
person or property not treated as evacuee or as evacuee
property immediately before the first day of January, 1957,
shall be treated as evacuee or, as the case may be, as
evacuee property, on or after the said date.
x x x x
x
Certainly, the judgment debtor is an evacuee and the
Custodian has treated him as such in court proceedings. But
has that decree been treated as evacuee property ? The
answer is an easy negative. The Custodian never demanded
any right qua decree holder nor as stepping into the shoes
of Shri Oberoi. Thus, whichever way we view the matter the
appellant must fail in this branch of his case. It is
pregnant with meaning that the Custodian did not seek to get
himself impleaded as a co-appellent in the Federal Court of
Pakistan and at no tier of the long-drawn out litigation in
Pakistan did the defendant contend that the plaintiff Oberoi
was no longer entitled to sue for the amount and that the
Custodian alone had such right if at all.
Bar of Limitation
The slow flow of the plaintiff’s rights along the stream of
statutory limitation would have normally been stilled into a
final freeze, for the
502
prescribed life span of six years under Art. 1 17 of the
Limitation Act had admittedly run out. The rescue raft on
which Shri Oberoi clutched O survival of his right to sue
was S. 19 and his life-belt, as it were, was s. 14. The
facts and law are fairly clear; their rival interpretations
by counsel n-verticle s diverged so much that the encounter
generated at the bar as ’much heat as light-inevitable, ’May
be, in an adversary system. Be that as it may, we will
scrutinise the case urged by the plaintiff to attract these
rejuvinatory and exclusionary provisions. Courts must as
far as is reasonably permissible put a liberal construction
on documents to save, not to scuttle, when faced with a plea
of limitation to non-suit an otherwise good claim.
Section 19, to help renew limitation., requires, as rightly
stressed by Shri Desai, an intention to own a subsisting
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liability by the debtor to the particular creditor. Mere
chronicles of litigations and recitals of documentary
events, it is argued, cannot be regarded as acknowledgement
if the whole drift of the writing is a denial of the
plaintiff’s claim. But, in the view we take of the
applicability of s. 14, a further probe into or
pronouncement on the legal labyrinths of s. 19 and the
rulings cited in that connection need not detain us.
Suffice it to say that we do not express any opinion on the
issue including an advocate’s :authority to acknowledge
liability in the course of a Statement of the Case. It all
depends on the circumstances of each case.
Section 14, which neatly fits in, is simple in its
ingredients, to the extent we are called upon to consider.
It is a sine qua non of a claim unders.14 that the earlier
proceeding is prosecuted in good faith. It is beyond cavil
that before launching on execution of the Pakistani decree
Shri Oberoi had taken advice from two leading Indian lawyers
and set about the job diligently. Bonafides is thus writ
large in his conduct. The controversy is that the defect of
non-executability of the foreign decree by virtue of the
Governor Cieneral’s order does not savour of a
jurisdictional or like error but ,of a mere misconstruction
of law. We need not labour the obvious that here the
prosecution of the execution proceedings was repelled
because and only because the institution of such proceeding
on the ,execution side was without jurisdiction. Normally,
’a money claim due under a foreign decree can be enforced on
the original side by a suit under ss. 9, 13 and 26, C.P.C.
in the appropriate Court and the executing court has no
jurisdiction to straightway levy execution under 0.21,
c.p.c. An exception is provided in this regard by the
Governor General’s Order and a special forum viz, the High
Court is indicated when the decree to be executed is of the
Supreme Court of Pakistan. All this pertains to
jurisdiction and in the Associated Hotels case this Court
negatived executability solely on grounds jurisdictional or
quasi-jurisdictional. Section, 14 thus comes to the rescue
of the defendant in this suit.
Certainly, Section 14 is wide enough to cover periods
covered by execution proceedings (See 1959 SCR 817 at 81’8).
After all, s. 47 itself contemplates transmigration of souls
as it we re of execution
503
petition and suits. The substantial identity of the subject
matter of the lis is a pragmatic test. Moreover, the
defects that will attract the provision are not merely
jurisdictional strictly so called but others more or less
neighbours to such deficiencies. Any circumstance legal or
factual, which inhibits entertainment or consideration by
the Court of the dispute on the merits, comes within the
scope of the section and a liberal touch must inform the
interpretation of the Limitation Act which deprives the
remedy of one who has a right (see (1971)2 SCR 397 at 401).
In the Associated Hotels case (i.e. the very lis in its
earlier round on the execution side this Court pointed out
[1961] 1 SCR 259 at 272) that the question was one of
initial jurisdiction of the Court to entertain the
proceedings. Thus in this very matter, the obstacle was
jurisdictional and the exclusionary operation of s. 14 of
the Limitation Act was attracted.
Equitable Adjustment
The last ditch battle fought by the appellant relates to the
deposit of Rs. 3,00,000/- which, if deducted from the date
of payment into Court from the amount decreed a huge scaling
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down of the figure will be the result. While Shri Desai
staked his case on equitable considerations which must be
applied while executing foreign decrees, Shri Ashok Sen
wondered what legal principle could sanction such inroad
into sums legitimately due. While Shri Desai’s two earlier
defences are easily vulnerable, we think his plea on equity,
in a less extreme form, is impregnable. "What is truth said
jesting Pilate (in Jesus trial) and would not stay for an
answer." We choose to pause and answer that Truth is Law
cast in the compassionate mould of justice and equity being
one of its facets.
Shri Sen’s strenuous submission summed up fairly is that
undefined rules of equity are unruly horses and in India
legal rights cannot be chased out by nebulous notions of
good conscience labelled equity. In a sense, he is right
but to deny equitable jurisdiction for courts to promote
justice is too late and too tall a jurisprudential
proposition in any system. For, equity is not anti-law but
a moral dimension of law rather, it is the grace and
conscience of living law acting only interstitially. The
quintessence of this concept may be stated thus
"All great systems or jurisprudence have a
mitigating principle or set of principles, by
the application of which substantial justice
may be attained in particular cases wherein
the prescribed or customary forms or ordinary
law seem to be inadequate. From the point of
view of general jurisprudelice, "equify" is
the name which is given to this feature or
aspect of law in general."(1)
Certainly when law speaks in positive terms, equity may not.
be, invoked against it; but while applying the law the Court
can and must
(1) American Jurisprudence 2nd Edn. Vol. 27 p. 516.
504
ameliorate unwitting rigours inflicted by legalisms, where
there is room for play, by the use of equity. After all,
equity is the humanist weapon in the Court’s armoury,
whereby broad justice may be harmonised with harsh law,
based, of course, on established principles. In the present
case, certain sympathetic circumstances stand out
indubitably and the benign interference sought by the
appellant is spelt out of these facts. What are they ?
The judgment debtor did apply for stay of execution and, on
the direction of the High Court, did deposit rupees three
lakhs on July 16, 1949 (to be correct, out of it Rs.
50,000/- was paid in only on 16th August), not in discharge
of but as security for the decree pending the first appeal.
We cannot blink at the fact that but for supervening
political upheavals and eventual disregard of the Court’s
order by the Pakistan Government the judgment creditor would
have withdrawn this sum. But partially to antidote the
effect of this factor must be remembered the opposition of
the debtor to the creditor drawing the money from Court in
July 1949 when the 1949 Ordinance vesting evacuee property
in the Custodian had not been promulgated. And since the
appeal was allowed by the High Court and the suit dismissed,
the deposit ceased to be security for the decree, although
factually the money did not leave the custodia legis. Shri
Oberoi’s decree was re-born, as it were, only when the
Federal Court allowed his appeal on December 21, 1953. Till
then he had only a potential right to claim the money.
Now, a close-up of the post-decretal happenings with special
reference to the conduct of either party bears on the
’conscience’ of the situation. Neither party was
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blameworthy and indeed both were agreed at a stage that the
deposit should go in satisfaction of the decree affirmed by
the final court. The judgment was delivered on December 21,
1953. Most probably the Christmas vacation intervened and
soon after the reopening-(January 6, 1954) the judgment
debtor rushed to the Lahore High Court with the request that
his application for withdrawal of deposit filed 4 years’
back be dismissed as withdrawn and it be adjusted towards
the decree. ’It is therefore respectfully prayed’ concluded
the petitioner, ’that the aforesaid.’ amount of Rs.
3,00,000/- may be directed to be adjusted toward
satisfaction of the decree as originally intended and the
request for refund be treated as withdrawn and the
objections filed by the Deputy Custodian be dismissed." in
this application he stated that the amount was deposited
’towards partial satisfaction of the decree as a condition
for stay of execution......... Let us look at the decree-
holder’s stance. On March 31, 1954 he hopefully moved the
High Court at Lahore for transfer of the deposit to India on
the strength of s.4 of the Transfer of Deposit Ordinance
(later enacted as Act VII of 1954). True, his final success
in the Supreme Court proved a Dead Sea fruit, the judicial
order having been ignored by the Government but the fact
remains that he averred in his application of March 31,
1954, in harmony with the position taken up by the judgment
debtor.
"(1) That on 6th January 1954 Rai Bahadur
Jodha MalKuthalia filed an application praying
that the sum of
505
Rs. 3,00,000/- which he had deposited in this
Hon’ble Court on 15th/16th July, 1949, in
pursuance of the order passed by this Court on
27th April 1949 for the due performance of
decree as may ultimately be binding upon him
be paid to Rai Bahadur Mohan Singh oberoi
decree-holder towards partial satisfaction of’
the decree and that his application, dated
15th December, 1949, for refund of the said
amount be treated as withdrawn and
consequently the objection and the review
application of the Custodian dated the 20th
December 1949 be dismissed.
(3)That Rai Bahadur Mohan Singh, decree-holder
submits that judgment-debtor has no interest
in the said sum and the same is lying
deposited with this,Honable Court for payment
to him, as it was deposited for the due
performance of such decree as may ultimately
be passed in his favour. The said decree-
holder contends that no other person has any
right or interest in the said amount and that
the same is lying with this Court in trust for
payment to him. The judgment-debtor has
accepted this position and claims no right or
interest in the said amount.
(4) That the said decree-holder further
contends that in view of the "Ordinance No. 1
of 1954’Transfer of Evacuee Deposits Ordinance
1954’ and subsequent enactment of the said
Ordinance into an Act of the legislature to
the same effect, this Hon’ble Court is
requested to transfer the deposits of Rs.
3,00,000 along with the records relating
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thereto to such officer or authority in India
as the Central Government has by order,
specified in this behalf or specifies in
future as the provision of the said Act fully
applies to it.
In the alternative the said decree-holder
further prays that if for some reasons, this
Hon’ble Court decides that the said deposits
cannot be transferred to India under the
provisions of the said Act, it be held that
the Custodian of Evacuee Property is not
entitled to the same and it be paid to the
said decree-holder at Lahore."
Without being too literal or legalistic, it is clear that
tile decree-holder had laid claim to the sum to the
exclusion, not only of the Custodian but also of the
judgment-debtor. He should have got the money, but did not.
But all that the appellant could do to help Sri oberoi
obtain the deposit he did.
Taking a pragmatic view of the justice of the case, the
Court has to see who should bear the loss in these
circumstances. Should the decree-holder be eligible for his
’pound of flesh’ since he had not got a paise towards his
legal dues? Should the judgment-debtor be directed to pay
Rs. 3,00,000/- twice over even after both sides had, in the
Pakistan Court, represented that the decree-holder alone was
entitled to the deposit and that it be disbursed to him?
The High Court at Lahore highlighted this attitude of the
parties thus:
506
"The position taken up by R. B. Jodha Mat
Kuthalia is that this deposit stands adjusted
towards the satisfaction of the decree of
rupees five lacs.The position taken up by R.B.
Mohan Singh Oberoi is that neither the
judgment-debtor nor any other person except
himself has any right or interest in the
deposit."
*
"The position of both R. B. Jodha Mal and R.
B. Mohan Singh is that the amount stands
adjusted and vests in the decree-
holder and for the purpose of the application
for transfer of deposit we will assume that it
does so vest."
The Supreme Court of Pakistan viewed the matter slightly
differently and observed:
"Certain facts stand out clearly. Since the
money was deposited under the orders of the
Court by Rai Bahadur Jodha Mal, and there
being no order of the Court regarding the
disposal of this money so as to divest Rai
Bahadur Jodha Mat of his ownership thereof, it
would appear that prima facie the principal
and direct interest in the money is that of
Rai Bahadur Jodha Mal. The money having been
deposited in relation to P. decree of the
Court, for the purpose of being applied to the
satisfaction of that decree, and such decree
standing exclusively in the name of Rai
Bahadur Mohan Singh oberoi, he might appear to
have P. secondary and indirect interest in
the money."
What is loudly obstrusive from this narration is that,
although the Court deposit presented to the parties but P.
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teasing illusion, the Courts and the parties assumed the
amount as specially earn marked towards discharge of the
decree. Expectantly Shri Oberoi, even after taking legal
advice regarding executability of his decree in India, moved
the Pakistan Court by petition doted December 11, 1954
asserting rightly;
"That the deposit being for his benefit and he
being a nonMuslim and on evacuee, is entitled
to claim that the sum be transferred to India.
in accordance with Section 4 of Act VI of
1954, and that the words partly interested in
the deposit mean parties to the said
proceedings or litigations and any other
person who on the face of the record can be
considered to be partly interested in the
deposit and therefrom it is contended that
neither it is contemplated that the Court
would invite all claimants or creditors to
make claims regarding the deposit a
nd would
then adjudicate regarding the bona-fides of
their claims and order the distribution of the
deposit amongst them accordingly, nor was
enquiry of this nature, contemplated, as no
procedure for enquiry of this nature has been
provided for in this Section. The Court is
merely transmitting authority to transfer the
deposit. But as this Point is still to be
decided by this Hon’ble Court and as this
Hon’ble Court might take a contrary view to
the one stated above, it is submitted that to
avoid unnecessary
507
delay, the Court might be pleased to issue
such notices that it considers proper to the
public or to any other parties it considers
fit to do so that the matter may be finally
adjudicated at the next date of hearing. It
is, therefore, prayed that it be ordered
accordingly."
The fair inference flows from this stream of facts that the
judgment debtor had washed his hands off this sum and the
decree-holder had clung to it with a quasi-proprietary
claim. in such a situation, is it just that if politically
paramount but legally extraneous forces blocked the payment
to the decree-holder (he may still get it although it may be
a little luny to hope for it in the near future) the
hardship should fall on the judgment debtor ?
Precedents in profusion were cited on both sides bearing on
Court deposits as security for decree amounts and for allied
positions. While we will presently refer only to a few of
them inhibited by space and relevance, it falls to be
mentioned at the threshold, contrary to the tenor of Shri
Sen’s contention, that equity jurisprudence is flexible and
meets the challenge of new situations without the law. "New
days may bring the people into new ways of life and give
them new outlooks: and with those changes there may come a
need for new rules of law ............ (1)" But legislation
lags. Here steps in equity for, the role of a judge, is to
develop the law-and adapt it to the needs of the members of
his society (See Modern Law Review, Vol. 34,1971-p. 28).
Nor is Shri Sen right when he contends that his client
admittedly not being guilty of any blamable conduct,
therefore, should not be deprived of any part of his decree.
Equity is not penalty but justice and event where neither
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party, as here, is at fault, equitable considerations may
shape the remedy. Lord Denning spoke of the new equity that
was needed (5 Current Legal Problems 1952 p. 1) and Marshall
said that the time to write finis to the role of the
judiciary in the field of equity had not come (See Law,
Justice & Equity Essays in tribute to Keeton p. 66). of
course not novel sentiments but well-settled rules, not the
Chancellor’s foot but standard-sized shoes, serve the judge
in these pathless woods. True, as Keeton said :(2)
" an equitable doctrine may prove malleable in the hands of
Lord Denning but intractable in the hands of Lord Justice
Harman."
In short, our equitable jurisdiction is not hide bound by
tradition and blinkered by precedent, though trammelled by
judicially approved rules of conscience. With this
background we will glance through the decided cases, alive
to the fact that they cannot necessarily furnish in every
case a clear legal lodestar to steer us sure ashore. In the
present case the equity arises largely from the iniquity of
a’ foreign government’s refusal,for reasons we cannot guess,
to carry out the directions of its municipal courts. This
uniqueness cannot be missed.
(1) Current Legal Problems, 1952 Vol. 5, Stevens & Song
Ltd., London p.1.
(2) Keeton-Sheriden on "Equity" p. 37, 1969 Edn. Sir Isaac
Pitrnan and Sons Ltd. London,
508
Sri Desai drew our attention to Chowthmull Manganmull v. The
Calcutta Wheat and Seeds Association(1); Sheo Gholam Sahoo
v. Rahut Hossein(2); Mehar Chand v. Shiv Lal & Anr.(3);
Kothamasu Venkata Subbayya v. Udatha Pitchayya(4); Ex parte
Banner In re Keyworth(5) and Bird v. BarstoW(6). A few
other cases also were cited but since nothing fresh is
contributed by them reference is not made to them.
What are the principles vis-a-vis the problem here ? That a
mere security deposit does not become an automatic
satisfaction of the decree when the appeal fails is simple
enough. But when the judgment debtor has paid into court
cash by way of security conditioned by its being made
available to discharge the decree on disposal of the appeal
and for means beyond the control or conduct of the judgment
debtor the money is not forthcoming to liquidate the
liabilities can he be asked to pay over again ? In
Chowthmull Manganmull v. The Calcutta Wheat and Seeds
Association (Supra), Sanderson C. J. observed ( at p. 10 1
3)
"In my judgment the effect of the order was
that the money was paid into Court to give
security to the plaintiffs that in the event
of their succeeding in the appeal they should
obtain the fruits of their success. See Bird
v. Barstow (6). It may be put in other words,
viz., that the amount paid into Court was the
money of the plaintiff respondents subject to
their succeeding in the appeal and thereby
showing that the decree in their favour by the
learned Judge on the Original Side was
correct. The words which were used by Lord
Justice James in the case of Exparte Banner,
in re Keyworth (5) are applicable to this
case. The learned Lord Justice said that the
effect of the order was that ’the money which
was paid into Court belonged to the party who
might be eventually found entitled to the
sum."
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The head note in Sheo Gholam Sahoo v. Rahut
Hossain (supra) reads :
" When money or moveable property has been
deposited in Court on behalf of a judgment-
debtor in lieu of security, for the purpose of
staying a sale in execution of a decree
pending an appeal against an order directing
the sale, which is afterwards Confirmed on
appeal, neither the depositor, nor the
judgment-debtor, can afterwards claim to have
such deposit refunded or restored to him,
notwithstanding that the decree holder has
omitted to draw it out of Court for more than
three years, and that more than three years
have elapsed since any proceedings have been
taken in execution of the decree, and that the
decree for that reason is now incapable of
execution.
(1) I.L.R. 51 Cal. 1010. (2) I.L.R. 4 Cal. 6.
(3) (1955) 57 P.L.R. 350.(4) A.I.R. 1960
Andhra Pradesh 349,
(5) 1874(9) Ch. 379. (6) [1892] 1 Q.B.D. 94,
509
Semble.-When money or moveable property is
deposited in Court in such a case as the
above, the Court, upon confirmation of the
order for a sale, holds the deposit in trust
for the decree-holder, and is at liberty to
realize it and pay the proceeds over to him to
the extent of his decree."
The equity in favour of an obligor, who has deposited the
obligated sum into Court pending proceedings in which he
assails his liability, is underscored by these rulings and
the principle cannot be different merely because the obligee
who ordinarily would have, without reference to the obligor,
drawn the money from Court is unable to get it for extra-
legal reasons as here. We are of the view that the justice
of the case, without crossing the path of any legal
provision, warrants our upholding the equity set up by the
appellant., Had the decree been executed in the haleyon days
in the Lahore Court this deposit would have been credited
and adjusted and the freak consequences of Partition should
not disadvantage the judgment debtor. In India the
historical and artificial distinction between Equity and Law
does not exist and equity itself is enforced as law with all
the built-in limitations we have adverted to.
To dispel possible misapprehension we declare that the whole
deposit and accretions will be drawable only by the decree-
holder. Though a formal order of the Lahore Court directing
adjustment of the amount towards the decree has not been
passed, we direct the whole sum, whether it remain in
Pakistan or is eventually transferred to India, belong to
and withdrawable only by, the decree-holder, since justice
and good conscience plainly require it. Equitable remedies
by courts an institutionalised strategy in the myriad
situations of complex modern societies are an expanding
universe, but, for the obvious relief we grant here, no
resort to any theoretical basis is needed.
Bearing these canons in mind, we must crystallise the
benefit the appellant can justly get. Till the date of the
Federal Court decision on December 21, 1953 the decree-
holder could not draw the deposit. indeed, only when the
judgment-debtor agreed in Court proceedings that the sum be
treated as pro tanto discharge of the decree and the decree-
holder moved the court on that basis could the benefit of
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equitable adjustment arise. This later event was when Shri
oberoi applied by C. M. 120 of 1954 to the High Court at
Lahore on 31-3-54. So, the decree amount as on that date,
inclusive of costs incurred, will have to be calculated and
Rs. 3 lakhs deducted. The balance will, as stipulated in
the decree, carry 5% interest from then on. We make it
clear that the entire costs incurred in the suit in India,
i. e. in the trial court will also be payable but in regard
to the appeals in the Delhi High Court and in this Court
the decree-holder will be awarded proportionate costs. of
course, the decree-holder lost in his attempt to execute the
foreign decree in India and we leave the costs of those
proceedings well alone. in the light of these directions the
executing
510
court will quantify the amount currently recoverable and
proceed to levy execution. The appeal is substantially
dismissed but is also allowed in part as above indicated.
C. A. 2248 of 1968 is dismissed but no order as to costs.
We have, through the chemistry of jut adjustment mixed in
the crucible of law and equity, endeavoured to end a feud
over money; but who knows whether Time, the supreme devourer
of systems temporal, will spare this principle of ’good
conscience’ from the sepulchre of buried values ?
V.P.S.
Appeals allowed.
M25SSup.CI/75-2,500-4-10-75-GIPF.
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