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SC ruling on rights of foreign decree holder

Our Legal Correspondent

NEW DELHI, Aug. 28

IN a significant judgment, the Supreme Court has ruled that Section 44A of the Code of Civil Procedure (CPC) confers an independent right on a foreign decree holder to enforce the same in India.

``It is a fresh cause of action and has no co-relation with jurisdictional issues. The factum of passing of the decree and the assumption of jurisdiction pertaining thereto, do not really obstruct the full play of the provisions of Section 44A CPC'', the court added.

The ruling was handed down by a Division Bench comprising Mr. Justice S.B. Majumdar and Mr. Justice Umesh C. Banerjee in separate but concurring judgments while dismissing two appeals.

Assumption of Admiralty jurisdiction by the Andhra Pradesh High Court and passing of an interim order of arrest in execution of a judgment and decree of the High Court of Justice Queen's Bench Division, Admiralty Court in London dated November 9, was the key issue for consideration in the appeals.

An execution petition was filed before a single judge of the High Court in terms of Section 15 of the Admiralty Courts Act and section 44A read with Order XXI Rule 10 CPC for executing the decree issued by the High Court of Justice Queen's Bench Division Admiralty Court in an action by the first respondent, Teavliris Salvage (International) Ltd, against the second respondent herein claiming damages for repudiation of an L.O.F. salvage contract. The second respondent was the owner of vessel, m.v. Al Quam ar ex Al Tabith.

Pending the execution petition, the decree holder prayed for an interlocutory order to issue a warrant of arrest against the vessel together with hull, tackle, engines, machinery equipment stores etc.

The single judge of the High Court on September 15, 1999 granted an interim order as prayed for on a prima facie view that the execution petition could be filed in the High Court which is otherwise having original admiralty jurisdiction.

The appellant, m.v. AL Quamar filed a petition seeking vacation of the interim order principally on the ground that the ownership of the ship having been transferred bona fide and for a valuable consideration to Quamar Shipping Ltd, the ship as attached in the terms of the September 15, 1999 order, could not possibly be kept under attachment in execution of the decree against the original owner being the respondent No. 2 herein.

The single judge declined to vacate the interim order and expressed the view that the case needed to be heard. The appellant moved the appellate forum, which dismissed the appeal.

The Supreme Court judges in their judgment said that the legal fiction created by Section 44A CPC made the Andhra Pradesh High Court, the court which passed the decree and as such competency of the High Court to entertain the execution proceedings could not be doubted in any way. ``We do dot find any merit in the appeals before us and thus the same are liable to be dismissed'', they added.

The order of dismissal, however, the judges pointed out, would not preclude the appellant to obtain release of the attached ship on furnishing a bank guarantee of a nationalised bank for a suitable amount to the satisfaction of the Registrar (judicial) o f the High Court, pending the execution proceedings.

``In case the execution petition ultimately succeeds on merits against the appellant, it will be open to the respondent No. 1, decree-holder to encash the bank guarantee towards its claim in the execution proceedings'', the judges observed.