ROSHANLAL KUTHIALA & ORS. versus R. B. MOHAN SINGH OBERAI

ROSHANLAL KUTHIALA .& ORS.

R. B. MOHAN SINGH OBERAI October 11, 1974

. (H. R. KI:JANNA, M. H. BEG and V. R. KRISHNA IYER, JJ.)

Code of Civil Procedure (Act S of !908) t. 13~Enforcement of foreign judgment. Limitation Act (9 of J90R), s. 14-Scope of. Pract/ce-Appllcatfon of equity by Indian Courts.

The appellaot agreed to sell his hotel to the first respondent and the first res-pondent paid an earnest money of Rs. S lacs. Alleging breach of contract the tlrst respondent flled,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, wa.S not allowed to withdraw the amount before the disposal of the appeal. The appeal was allowed by the High Court, alid there· after, 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 gro'und that the appe-llant was an evacuee and also for the payment of the amount' in deposit to the Custo-dian. The amoun~ however continued to be in deposit in court. The respondent. appealed to tbe Federal Court of Pakistan against the Judgment of the High Court and. his appeal was allowed. The amount, however, continued to be in tfie Pakis-tan Treasury. In January, 1954, the appellant filed &. 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towards the satisfaction of the decree as orginally intended, &nd that his request for the refund may be treated as withdrawn, and that the objections tiled by the Custodian dismissed. As result of political understanding between the two countries; court deposits were agreed to be tran.qferred to the respective countries. Oa 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 o.f his decree. T.he High Court dismissed the application but the Supreme Court of Pakistan allowed it and dl.recterl the transfer of the deposit to the concerned autho-rity in India after dismissing the Custodian's objections. But the deposit conti· nued in the Pakistan Treas~;~ry.

The respondent thereupon moved the High Court of Punjab in India for leyying execution of his decree and invoked the provisiolb of the lndian ·Independence (Legal Proceedings) Order, 1947. The High Court dismissed the execution appJi. cation. Jn appeal, the Supreme Court of Jndia held that the forum for enforcement and the process for getting relief and execution of the fore'gn decree was suit under ss. 9 and 13, .Civil Procedure Code, in the Compdent Court. The respon-dent thereupon filed suit for recovery of the decree amount based on the forei$D judgment in his favour and the trial couit and tlie High Court. in appe~al, "decided m his favour.In appeal, to this Court, it was contended by the appellant. :· d> that the decree of the Federal Court of Pakistan which was 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 Jndiau Limitation Act, 1908 for suit upon foreigri decree having expired long ago the suit was barred by .limitation; and (3) in any event,th sum of Rs. 3 lacs already deposited to the credit of the decree in the Lahore Court, having been actually ad· .lusted towards the. decree, the appellant would be liable only for sum of R,a. 2 lacs together with subsequent interest.

Allowing the appeal on the la:st ground,

HELD : 1. (a) foreign judgment is enforceable by suit upon the judgment and it shall be c9nclusivc as to any matter thereby directly adjudicated upon bet~n the same parties subject· to the ~ceptions enumerated ins. 13, C.P.C. In the present case, th.e 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 s. 13.

[SOOO·H}

(h) 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 r~po1ldent was not entitled to sue for the amount and that the Custodian alone had such right. [501F-H]

(2) Section 14 of the Linlitation Act, 1908, saves tbe respondent's suit from the bar of limitation. [SOZ D]

It is sine qua non of claim under s. 14 that the' earlier proceeding is prose-cuted in good faith; and any circumstances, legal or factual, which inhibits enter· tainment or consideration by the court of the dispute on the merits comes within the scope of s. 14. [1 ]Section 14 is also wide enough to cover periods covered by cxec:u-tion proceedings. In the present case, the launching of execution of the Pak:istani decree in India was done after consulting twc> leading Indian lawyers and the cir· cumstance shows the bona fides of the respondent; and the prosecution of the e:teo cution proceedi,ngs in the High Court of Punjab was repelled, because and only because, the institution of such proceedings on the execution side was without jUJis· diction. The question thus was one of initial jurisdiction of the Court to entertain the execution proceedings. [502B·H; S03A-C]

Raghunath Das v. Gokal Chand and Another [1959] S.C.R. 817 at 818, India Eleclrlc Works1Ltd. v. James Mantosh & Anr. (1971] 2 S.C.R. 397 at 401 and '111t Associated Holels of India Ltd. and Another v. R. B. Jodha Mal Kuthalfa [1961] 1 S.C.R. 2S9 at 272 referred to.

(3) In India, the historical and artificial distinction between e9ui~ and law does not exist and equity itself is enforced as law with all its built m lu.nitatlons. 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 Mt be invoked against it, but, while applying the lnw, the coun can and must ameliorate unwitting rigow-s inflicted by legalisms, where there is room f,or play by the use of equity. (S03H; S07G: S09C·D]In the present case, neith~r party w~ blameworthy and indeed both \YCfO agreed at 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. Taklna pragmatic view of .he justice of the case, the Coun has to see who should bear the loss in these circumstances. Although the courts and the parties as!>umed that the coun dep.osit as specially carmarkro towards. the discharge of the decree, because of supervening political up.heavals, and eventual disregard of the court's order by the Pakistan Government, the decree-holder-respondent could not withdraw the sum. The equjty arises largely from the iniquity of foreign government's refusal to carry .out the directions of its municipal courts. Therefore, the deposit of Rs. 3 lacs should be treated as pro tamo discharge of the decree io favour of the res-pondent from that date when t:1e appellant a1trecd for such ad.iustment. The decree amount as on the d~ote inclusive of costs incurred will have to be calculated and Rs: 3 lacs deducted therefrom. There will be decree in favour of the respondent only for the balance which would carry 5% interest from then on as stipulated in the decree. [S04C, B;,505P·H; 509F·G]

Chowthmttll Manganmu/1 v. The Ca/cu/la Wheat and Seeds Association I.L.R. 51 Cal. 1010 and Shco Cho/(lm Sahoo v. R(lhut Hosstin I.L.R. 4 Cal. 6 referred tO. .

CIVIL APPELLATE JUlUSDICTION : Civil ~ppeals Nos. 2248 & 2303 ~ 1%l .

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, Naunit Lal and Lalita Kohli, for ·the apPellant (In CA No. 2248/68).

A. K. Sen, M. C. Bhandare and Rameshwar Natlt, for respon4e~ts. Nos. 1 & 2 (In CA No. 2248/68). .·'

B. P. Singh, for respondents i-fos. 4, 6-ll(ln CA. No. 2248/68).

A. K. Sen and M. c.' Bh~ndare, for the appellanr (In CA .No . . . 2303/68);

S. T. Desai, A. Subba Rao, Naunit Lal and IA/ita 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 ~s Court by cert_ificates, JlDder 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 other-wise is not pressed, si.nce counsel concedes the decision to be just).

The subject matter is large, the rounds of litigation many, the ··· ar&uments long and yet the issues of law and disputes of fact .are few although their ultimate decision w)lere 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 tum the forensic focus on the three-pronged· attack on the decree made by counsel fdr the appellant Shri S. T. Desai.

Even so, the sequence and significance ()f events leading up to the-current controversy, ,sprawling across India and Pakistan and survi-ving 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 ownet: of Sedous Hotel, agreed to sell it on October 2, 1946 for price of Rs. 52,75,000/- to the 1st respon-dent Oberoi, who became name in the hotel industry. An earnest money of Rs. 5,00,000/- was advanced and the time fixed for comp-letion· of the sale was January 20, 1947. On alleged breach .of cont-ract, (::ivil Suit No: 514/61 of 1946 was filed in the Court of the Senior Sub-Judge, Lahore, by the 1st respondent (Oberoi) as the Ist plain-tiff and the Associated Hotels of India Ltd., as the 2nd plaintiff, for recovery of the earnest money with interest. decree in favour of the lst 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 js obscure, if not oblique_

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 uproot-ing 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 Co\lrt (on 21-12-53) in reversal of the High · Court's decree. Thus the final Court in Pakistan at the relevant time granted decree in favour of the I st respondent, against the appellant, and that stands. This landmark event closes the chapter of substantive rights and here begins 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.

Two crucial factors gave 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. brief narration of those matters is now necessary to follow the deve-lopment of the dispute before us. In the High Court, stay of execution was sought and granted on condition of deposjt ofRs. 3,00,000/-on July, 16 1949 and furnishing of security for the balan~e. 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 th~ money before disposal of the appeal. All this took place in July, 1949. Thus key fact, whatever its impact. emerges that the judgment-dehtor (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. 5,00,000/- 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 little later, but it is sufficient to state, at this stage, that this Ordinance contemplates the appointment of Custodians of Evacuee Property and invests them with certa-in 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 evac11ee property shall vest and shall be deemed always to have vested in the Custodian with effect from the first day of March, 1947."

In simplistic terms, if we may here anticipate Shri Desai's submis-sion, there was 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 on further direction that intimation be given ~o the Custodian to take appropriate pro-ceedings, if he thought fit. Thus alerted, the officer hastened. Hardly had 4 days passed when the Custodian moved the High Court for interdictip.g the return of the amount on the score that the entitled party was· an evacuee under the aforesaid 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 extra-legal misfortune which has 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 prayer for payment Ollt to him of the amount in deposit, as, accord-ing 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 Com-· missioner sent request to the High Court in these te~ms:

"From

S.S. JAFRI ESQUIRE C.S.P. REHABILITATION COMMISSIONER AND SECRETARY TO GOVERNMENT PUNJAB, REHABI-LITATION DEPARTMENT.

THE REGISTRAR HIGH COURT OF1UDICATURE' PUNJAB LAHORE Dated Lahore the 4th January, 1954

Subject :-Hedous Hotel Lahore Deposit of Rs. 3 lacs in the· High Court of Lahore.

MEMORANDUM

sum of Rs. 3,00,000 was deposited by R.B. Jodha Mal of Hoshiar~ pur, in tho High Court Lahore for tho bonofit of tho Associated Hotel of India Limited. decroe was passed by the Senior Civil Judge ·Labore in favour of the Associated Hotel of India Limited against R.B. Jodha Mal for sum of Rs. 5,08,333·5·4. The deposit of Rs. 3,00,000 was mad~ 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 cannot be paid until instructions from Government ofPakistan are received jnthe 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 II Deposits; not bearing interest Departmental and Judicial Depo-sits 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.

Reh. Ace. G/333, Dated Lahore, 4th January, 1954."

Thus the amount remained frozen. couple of days later (January ~) 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 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 <>n 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 S.uprcme 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 trapsfer of deposits. This enactment had its counterpart in India. As result of political understanding reached between the two countries, Court and other deposits were agreed to be trans-ferred to the respective countries into which the evacuees entitled to them had moved. On the strength of this law Shri Oberoi the decree-holder, moved the High Court at Lahore for transfer of the deposit

of Rs. 3,00,000/- together with the records relating there~o [1]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 later stage, that in this application Shri Oberoi h,ad categorically asserted:

8 "That Rai Bahadur ·Mohan Singh, decr~e-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 oe 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·ctaims 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 hands of the Supreme Court.

Shri Oberoi's contention was :

"That the Federal Court of Pakistan having passed decree ~n favour of the petitioner aild 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 deeide 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 ofRai Bahadur Jodha Mal. The money having been deposited in relation to decree of the Court, for the purpose of being applied to the satisfaction of that decree, and such decree standing exclusively in th~ name of Rai Bahadur MJhan Singh Oberoi, he might appear to have secondary and indirect interest in the money .... "

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 perem-ptory terms:

''We, therefore, have no hesitation in ~olding that both Rai Bahadur Jodha Mal Kuthalia, the depositor, and Rai Bahadur Mohan Singh Oberoi, for whose benefit the .deposit was made !lie within the purview of section 4 of the Transfer

of Evacuee, Deposits Act, 1954, "evacuees" a·nd 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 Govern-ment has specified in this behalf for disposal in accordance with the law."

In the sorry scheme of affairs this direction remained 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 stiU, after lapse of 14 years, in Pakistan Treasury.

The scene now shift~ to India, Both the drama tis personae move to India and, perhaps make good. Here is decree paralysed by cir-cumstances beyond the control of the parties. The decree-bolder 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.l5 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 Chandigarb, 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 th.e repository of all such rights .. The property in the decree being nega-tived, the prysent respondent failed. Many other findings hostile to his claim w~re 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. t33(t)(a) and (c) of the Consti-tution. In that appeal the judgment debtor (present appellant) resisted the proceedings, filing statement of the case through· his advocate Shri Naunit La!, as required by the Supreme Court Rules (fhis statement has pertinence to the point regarding limitation vis-a-vis 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 Pakjstani decree could be straight executed invoking 0·45, r.l5, C.P.C. When one gets entangled 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 inessentials, Gajendragadkar ]. (as he then was) speaking for the Court, came to the scope and sweep of the Indian Independence (Legal Proceedings) Order, cleared

the .Iegal·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 presen~ suit falls within Section 4(1) at all. The answer to the question must obviously be in the negative. The m'aterial 8 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 Su~Judge at Lahore. The original contract had taken place at Lahore, the property agreed to be sold. was situated at, Lahore, the eat nest amount of R~. 5,00,000/· was paid by the appellants to the respondent at Lahore, the breach of the contract took place at Lahore, and so under S~ction 20(c) ofihe Code of Civil Proce-dure 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 ~s not disputed. There is, therefore, no-doubt that·the trial Court could have proceedeQ to deal with this suit even if the Order in question had not been p'assed; and so the statutory fiction raised by the provisions of the Order cannot be ·invoked enforcing decree passed by the Federal Court in· an appeal arising from ··such suit. In our opinion~ therefore, the Hi_$.h Court was in error in holding that the provisions of Section 4 applied t.o the decree . sought to be executed by the appella~ts." ·

The view, though in reversal of the High Court's holding, did not effect the ultimate outcome. For the Court ruled that the execu-tion orthe foreign decree, as if i~ were one of the Supreme Court .of 'India, was misconceived. In other words, the forum for enforcement and the process for getting relief viz., suit under s. 9 and 13 of the C.P.C. in the com·petent Court of ot1ginal 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 Pro-·ceedings) Order. · ·

This extinguished the. fires of controversY regarding ·executability but ign1ted 'the current original suit. Shri Oberoi, discomfited in execution, was driven to filing regular suit for recovery of the decree am~mnt . 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 aU points that has · escalated the appellant's litigation tO" the top judicial deck, this Court, urging his triple opposi-tion to the plaintiff's decree.

Sbri 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, had vested automatically in the Custodian ·under the Pakistan Ordinance of 1949 and, therefore, the 1-2S5Sup.CI/75 .

plaintiff Obcroi 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 bo allowed on that ini· tial ground alone.

His second submission was that the six-year period available under Art. 117 of the Indian Limitation Act for suit upon a· foreign decree had long ago expired, reckoned from the date when the Federal Court of Pakistan granted the present plaintiff 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 th<: Indian Limita,tion Act. In the facts and circumstances of the present case, Shri De~ai repel~ this rescue operation as misapplication of the relevant provisions.The last, yet to our mind the most meaningful, point urged by the appellant, was that a)t hough decree for Rs. 5,00,000/- had been awarded by the Pakistan Court in favour of the present plaintiff, 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 st~m 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 component of the branch of jurisprudance bearing on execution of foreign deerees.

We proceed to examine the soundness of these three contentions in the order set out above.

Locus Standi

Ordinarily, suit on fact of foreign decree is sustainable and s. 13 C.P.C., sets out the limitations on the amplitude of the right. This proposition is not disputed but what Shn Desai argues is that the decree being 'evacuee property' ~nder the Pakista~J 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 OberoL under other enactments in both countries but qua holder of foreign decree he, cannot bring suit to recover the debt-an infirmity affecting the root of his right.

The plaintlff's answer is simple and sufficient and deflates the defendant's resistance, based on 'evacuee' legislation. foreign judg-ment is enforceable by suit upon the judgment which creates nn 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, Qeing conclusive under s. 13, the defendant could not be heard to urge to the contrary.

Even so, let us analyse, the evacuee law -based bar, to see if it has substance.

To appreciate the merit of this argument, it is necessary, as ear-lier 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 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 decree 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 moment that it is-:"and ·at the first flush 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 Admini-stration of Evacuee Property Act, 1957 (XII of 1958) carves out category of evacuee property out of the Custodian:s control. Does this decree thus escape the net ? Yes, if 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 atter 1st January; 1957.

(1) Notwithstanding anything ·contained in this Act, no ( 7) 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 proper-ty, on or after the said date.

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 himsrlf impleaded as co-appell?.nt in the Feder;>.\ 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 final freeze, for the

prescribed life span of six years under Art. 117 of the Limitation Act had admittedly run out. The t:escue 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 interpretation~ by counsel D!Verth!~e : 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 plaintift' to attract these rejuvinatory and exclusionary provisions. Courts must a~ far as is reasonably permissible put liberal construc-tion on documents to save, not to scuttle, when faced with 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 subsisting 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 denial of the plaintiff's claim. But, in th~ view we take of the applicabilitY of s. 14, further probe into or pronouncement on t~e 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 advocatels authoritY to acknowledge liability in the course of 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 thr extent we are called I upon to consider.

It is sine qua non of claim under s.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. Bona. fides is thus writ large in his conduct. The controversy is that the de-fect ofnon-executability ofthe foreign decree by virtue of the Governcr General's Order does not savour of jurisdictional or like error but {)fa mere misconstruction of Ia~. We need not labour the obvious that here the prosecution of the execution proceedings was repelled because and on.ly because the institution of such proceeding on the -execution side was without jurisdiction. Normally, money claim .due under foreign decree can be enforced on the original side by ·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 special forum t•iz, 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 proceedings4See 1959 SCR 817 at 818). After all. s. 47 jtself contemplates. transmigration of souls as it were of execution

petitions and suits. The substantial identity ll'of the subject matter. of the lis is pragmatic test. Moreover, the defects· that will attract the provision are not merely juri~dictional strictly so called but others more or less neighbours to such deficiencies. Any circum-stance legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits, comes within the scope of 8 the section and liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has 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] I 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 huge scaling down of the figure will be the result. While Shri Desai staked his case on equitable con-siderations 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 less extreme form, is impregnable. "What is truth said jesting Pilate (in Jesus trial) and would not stay for an answer.'' We choose to pa_use 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 unde-fined rules of equity are unruly horses and in India legal rights cannot be chased out by nebulous notions of good conscience labelled equity. In sense, he is right but to deny equitable jurisdiction for courts to promote justice is too late and too tall jurisprudential proposition in any system. For, equity is not anti-law but moral dimension of law rather, it is the grace and conscience of living law acting only intersti-tially. The quintessence of this concept may be stated thus :

"All great sy:>tems or jurisprupcnce have mitigating principle or set of principles, by the application of which sub-stantial 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 jurispmdence, "eg_uity" is the name which is given to thjs feature or aspect of law in ieneral. "(1)

Certainly when taw speaks in positive terms, equity may not. be in~ voked against it; b\lt while applying the law the Court cnn and must (1) American Jurisprudence 2nd Edn. Vol. 27 p. 516.

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 executioll 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 uph¢avals and eventual disr.egard of the Court's order by th.e Pakistan Goyemment th~ judgment creditor would have withdrawn this sum. B\lt 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 potential right to claim the money.Now, close-up of Lhe post-decretal happenings with special refe-rence to the conduct of either party bears on the 'conscience' of the situation. Neither party was blameworthy and indeed both were a.greed at stage that the deposit should go in satisfaction of the decree affirmed by the final court. The judgment wns delivered on December 21, 1953. Most probably the Christmas vacation. intervened and soon after the reopening (January 6, 19 54) the judgment debtor rushed to the Lahore High Court with the rcqucst that his application for withdrawal of deposit filed 4 years' back be dismissed ~~ 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 u.djusted toward satisfaction of the decree as origini\IIY intended and th: request for refund be treated as · withdrawn and the objections filed by the Deputy Custodian be dis-missed." In this application he stated that the i\mount was deposited 'towards partial satisfaction of the decree as 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 fittal success in the Supreme Court proved Dead Sea fruit, the judicial order having beer• ignored by t1te Government but the fact remains that he averred in his application of March 31, 1954, in harmony with the position r.aken ur hy the judgment debtor.

"(1) That on 6th Jattu:uy 1954 Rai Bahadur Jodha Mal Kuthalia filed an application praying that the sum' of

Rs. 3,00,000/· which he bad deposited in this Hon'ble Court on 15th/16th July, 1949, in pursuance of the order passed by ·this Court on 27th April1949 for the due performance of decree as may ultimately be binding upon him be paid to Rai Bahadur Mohan Singh Ob:roi decree-holder towDrds portloiBatlsfactlon of the decree and that his application, dated 1 Sth December, 1949, for refund of tho said amount bo troated aa withdrawn and consequently tho objection and tho 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 ad the same is lying deposited with this Hon'ble Coun 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 110 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 Jws accepted tlrls -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 ~nactment 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 thereto to such officer or authority in India as the Central Government has by orde~, specified in this behalf or specifies in future as the provision oft he 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 p.aid to the said decree-holder at Lahore."

Without being too literal or lega l i~t i ,· . it is clear that the decree-holder had laid claim to the sum to the e~d nsiCin, not only of the Custodian but also of the judgment-debtor. He should have ~ot the money, but did not. But all that the appellant could. rlo to help Sri Oberoi obtain the deposit he did. ·

Taking pragnl'liJ{: view <•f the iuHice of the case, the Court has to see who should bt>ar tht: lnss iP theq~ ci rcu m~tancc~ . Should the decree-holder be cligi oif f•)T Jw; 'pt:.u•ll.!. of ftesh' since he had not got paise towards his legal •J•t•:s ., Should the judgment-debtor bt directed to pay Rs. 3,0fi.O!:•Ili- twice over ev~n after both sides had, in the Pakistan Cou• r•::'• <·~cntc.rl that tlle decrec~holder atone was entitled to the depo~;' ·u;1\ that 11 o~ disbursed to him 7 The Hi&h Court at Lahore highr~;111 , j t.h i~ aL:itudc: nft.he parties thus:

[1975] 2 s.c.R •.

SUPREME COURr REPORTS

< . :_ R Jodhn Mal Kuth:ilia ·'The. p.>~itio~ tnked ~ajusfed t~w~rds the. s?.tisfaction of is th!'.t this depo_sl~ fit~~ ~ .The position taken up by-R.B. Mohan t~e decree ~fr~p.eesth~~ an~ither the judgment-d~btor n~r any . Stngh Ob~rot lS t h'mself has any right or tnterest tn the other person excep ' · deposit.'~ .

. • "' • • "' "The position of both R. B. Jodha Mal and. R. B. Mohar Sin his that the amount stands adjusted an~ v~sts m the decree-hol~er and for the purpo~edofthe applrc~~~on for transfer of deposit we will assume that 1t oes so ves .

The Sapreme Court of Pakistan viewed the matter slightly differently and observed:

"Certain facts stand out clearly. Since W:e money was de-posited under the orders of the Court by Rat ~ahadur.Jodha Mal and there being no order of the Court regarding the disposal of this money so Ril to divest Rai Bahadur Jodha Mal _of. his ownership thereof, it would appear that prfma Jqcle the pnnc1pal and direct interest in the money is that of Rat Bahadur Jcdha Mal. The moneyhavingbeen depositedir:t relation to~ dec:ee of the Court, for the purpose of being apphed to the sausf::ctton of thAt decree, 1\Ild such decree standing exclusively in the n~me of R?j B:\hadur Mohan Singh Oberoi, he might appeu to have &econd:\ry and indirect interest in the money."

What is l0udly obstrusivc from this narration is that, although the Court deposit presented to the parties but 1'. tel'.sing illusion, the Courts and the parties assumed the amouAt es specially eumukcd towards discharge of the decree. Expectantly Shri Obcroi, even nfter taking legal advice regardin$ executability of his decree in India, moved the Pakistan Court by petition dated December II, 1954 asserting rightly;

"Th;!.t the deposit beirtg for his benefit e.nd he being a-non-Muslim and an evacuee, is entitled to claim thP.t the sum be trans. · ferred to India in accordance with Section 4 Clf Act VI of !954, and that the words partly interested in the deposit mean parties to the said proceeding' or litigutions and nny other person who on · ~he f:I.C" of t~o record c~.n be considered to be partly interested !n the depos1t and therefrom it is contended that neither it IS contem:>h\ted thlt the Court would in\ite all claimants or cr~dit~rs to nuke . claim~ regarding the do:posit anJ would then ~JU~1ca~o rcgard1 ng the bona-fides of th~ir claims and order the dl&tn.butwn of. the deposit amongst tho:m accl.lrdingly. lll.lr wr.s enqu!rY of t~1s nntuu. contc:m~latcd, r.s no procedure for enqurry of t_lil!l Mtttre ha~ b.:cn provk!cd r.1r in this Section· The <;ourt IS mo:rl!~Y t~:!T\~mitting ClUtho1rity to tri\nsfer the deposit. D11t a.~ thli fl.Jlt\t Js still to be ~~ecidcd by this Hon'ble Court 1\nd r., tlu~ Hon'.hl~ Cl.lurt might take 1'. contr~ry view to the ~nc st:>.tclll!btwe. It ~~ s•Jbmittc:l"t thnt to avoid unnece_ssary

- --~ -:--:- ... --)--

'·-' ROSHANLAL V, M, S. OBI'.RAI (Krisfl11a Jyer, J.) 501 delay, the ·court might be pleased to issue such notices that ·1 considers proper to the public or to any other parties it consL dcrs fit to do so t~at the ~~tter may be finally adjudicated at the next d~te of,~eanng. It IS, therefore, prayed th~.t it be ordered accordmgly. The fair inference flo"Ys from this st:eam of facts that the judgment-B debtor had '~ash~d h1s h::> . .I~ds off .this sum and the decree-holder had clung t~ It WI~~ qu::!.S!-propnctary claim. In such situation, is it just that 1f politically paramount but legally extraneous forces blocked the payment to the decree-holder (he may still get it although it may be 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 few of them inhibited by space and relevance, it falls to be mentioned· nt the threshold, contrary to the tenor of Shri Sen's contention, that equity jurisprudence is flexible and meets the challenge of new situations withcut the law. "New days may bring the people into new ways oflife and give them new outlooks: 0 and with those chnnges there may come need for new rules of law •. . .......•. (1)" But legislation l:!gs. Here steps in ·equity for, the role of judge, is to develop the I2.w 2.nd ndapt 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. nc t being guilty of <>.ny bl::>.m<'-ble conduct, therefore, shoul~ no~ be dcpnved of any part of his decree. Equity is not pe~alty but JU.stlce <;11d even t where neither party. as here, is at f:!ult, equttable cons1d~rat1C.'ns may 6hape the remedy. Lord Denning sroke of the new eqUity tha~ was neede.d (5 Current Leg<'. I Pro bkms 1952, p. n an~ Marshall sa1d t~at the time to write jinfs to the role of the JUdtcH:tr~ m t~e field <'f equity h<!.d not come (See Law Justice & Equity Essays 1n tnbute to Keeton p. 66). Of course not ~ovcl sentiments but well-settle~ rules •. not the Chancellor's foot but st:\ndard-sizcd shoes, serve the Judge 1n the~e pathles5 wocds. True, as Keeton said : ([2]) "an equitable doctrine may prove malleable in the ha~ds or Lord Denning but intr::>.ct:>.ble in the h~.nds of Lord Just tee Harman." and I blmlcered n .mort, our by. equttable precedent, th?ugh trununclled . JUf!S . . d' . tctton Is . no t h'd bound 1 by .~cute~~ •• r .. ,by 11 ~ tradition ~hrot· proved rul..:1 of conscience. With thts background \\C "[111 ]~~~s~rily furni~h ~be d~:cidcd cases, alive to the fact th:'t they cannot n;c~~~hore· In the In every case clear kg~l lodestu to steer [115 ]~u; · · uity ·of J>rc:~ent ca>e the equity arises largely frcm t et ~~~s to carry for..:ign government's refusal, for rct~sons ~T~·eh?lnnn~q~cncs~ cannot out the directions of its municip<!l courts. 15 u [1 ]II be missed. & Soru Lttl London p, I. (2) OJ Current ~lon-Sheritlen leg1l Probk<IH, on "Equity" p. 37, 19S2 Vol. S, 1'169 SteveoEdn. [5 ]Sl r I .$' 1ac.Pitman nnd Sons l,.td. London.

.!!.\. ., . t '! . i :; .. -1' ;. :

[1975J 2 s.c.R.

SUPREME COURT REI'OR rs

Sri Desai drew our attention to Cllowtlrmu/1 Manganmu/1 v. 71re Calcutta Wheat and Seeds Association(!); Sheo Gholam Sahoo v. Rahut Hosscin(2); Mehar Chand v. Shiv lal & Anr.(l); Kothamastl Venkata Subbayya v. Udatlta Pit<:llayya(•); Ex parte Ba1mer In re Keyworth(5) and Bird v. Barstow('). few other cases also were cited but since nothing fresh is contributed by them reference is not made to them.

Wbat are tbe principles 'lis·a-vis the problem here ? That mere security deposit docs 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 condi· tioned by its. being made available to discharge the decree on disposal of the appeal and for means beyond the control or conduct of the judg-ment debtor the money is not forthcoming to liquidate the liability can he be asked to pay over again ? In Clrowthmu/1 Manganmull v. The Calcutta Wheat and Seeds Association (Supra), Sande]:son C. J. observed (at p. 1013)

"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 fruitsoftheirsuccess. See Birdv. Barstow(6). It may be put in other words, viz., that the amount paid into Court was the money of the plaintiff rcsondents subject to their succeeding in the :\ppeal and thereby showing that the decree in their favour by the learned 1 udge on the Original Side was correct. The words which were used by Lord Justice James in the case of Ex-parte Banner, i11re Keyworth(') are npplicable to this case. The Learned Lord Justice said th?.t the effect of the order was that· 'the money which was paid hto c,,urt belonged to the party who might be eventually found entitled to the sum."

The head note in Sheo Giro/am Salrvo v. Rahut Hossain (supra) roads :

"When money or moveable property has been deposited in Court on behalf of judgment-debtor in lieu of security, for the purpose of staying sale in executiOI\ of 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, not with~ tanding that the decree-holder has omitted to draw it out of Court for more than • hree ye1rs. and that more than three years have elapsed since .ny proceedings have been taken in cxccut ion of the dc<:r~e. and :•at the tlecrre for tha1 r.:a~o11 i<> nnw incnpnblc of cxecu-HI.

LL.R. 5! Cal. 1010. , n •I \ISS) S7 P.LR. 350. \ ~) 11\74(9) Ch. 379.

t.!) l.L.R. 4 Cal. 6. (4J A.I.R. 1960 Andhra Prnde$h 349. \u) (1892) 1 Q.B.D. 94.

Semble.-When money or moveable property is deposited in Court in such c.1.se as the above, ihe Court, upon confirmation of the order for sale, holds the deposit in trust for the decree-holder, and is at liberty to realize it and pay the pro-ceeds over to him to the extent of his decree."

The equity i•t 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 conse-quences of Partition should not disadvantage the judgme~lt debtor. ln India the historical and artificial distinction between Equity and Law docs not exist and equity itself is enforced as law with all the built-in limit'ations 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 formal order of the Lahore Court directing adjustment of the amount toward!\ the decree has not been passed, we direct the whole sum. whether ic remain in Pakistan or is eventually transfen:cd to lndia, belong tt' and with&mwable oJtly by tho decrce-hold.er . . since justice and good consciettco plainly require it. Equitable remedies by courts -an institutionalised strategy in the myriad sitUlLtion:\ of c~'mplex modern societies are an expanding universe. bttt, for the obvious relief we grant here, 1\0 resort to any theoretical basis is needed.

Bc<\ring these canOl\:> in mind. wo must crystallise the benefit the appellattt c:'.n justly get. Till the date of the Federal Court decision · on December 2 I, 1953 the decree-hoJUer could not draw the deposit. Indeed. only when the judgment-debtor agreed itt 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 eqttit-able adjustment arise. This later event was when Shri Obc;roi applied by C. M. 120 of 1954 to the High Court at Lahore on 31-3-54. So, the decree :\mount as on that date, inclusive of costs it\curred. will have to be calculated and Rs. 3 lakhs deducted. The balance will, as stipulated in the decree. carry 5% intere!\t from then on. We make it clear that the cntirll cosLs incurred i11 thl' suit in lnlliu, I. r. in the trlal court will nlso be payable but in regnrd to the apP.eals in the Delhi High Court :met in this Court the decree-holder wtll he awarded proportionate costs. Of course. the dteree-holder lost in his attempt to execute tho foreign decree in India and we leave the costs of those proceedings well alone. In the light of these directions the executin~

510 SUPREME COUJl1' REPORTS [1975] 2 s.c.a.

court will quantify the amount currently recoverable and proceed to levy execution. The appeal is substantially dismissed but is also allow· ed in part as abovi: indicated. C. A. 2248 of 1968 is dismissed but no order as to costs.

We have, through the chemistry of ju~t adjustment mixed in the crucible of law and equity, endeavoured to end feud over money; but who knows whether Time, the supreme devourer of system.o; temporal, will spare this principle of 'good conscience' from the seput. chre of buried values ? ·

Appeals allowed.

Ml5SSup.CIJ1S-2.500-t~0-7S-GIPF.