SABIHUDDIN AHMED, J.--These four appeals are directed against a common order of a learned Single Judge in Execution Applications Nos. 15, 16, 17 and 18 of 1991 whereby objections to a decree of the High Court of Justice Chancery Division, Manchester, U.K (hereinafter mentioned as British Court) were rejected and the execution applications were directed to proceed.
2. The fact which are not seriously in dispute appear to be that in June, 1989 the respondents filed a suit against the appellants claiming that the appellants had agreed to sell and the respondents had agreed to purchase certain immovable properties in Hyde Park Mansions, London. According to the agreement between the parties certain amounts by way of service charges under leases were required to be paid by the appellants to the respondents, which they failed to pay despite completion of sale and purchase in May, 1986. The respondent-company filed a suit in the British Court and Writ of Summons were issued to the appellants all of whom were residents of Pakistan. It is admitted that summons were served and at least the appellant in H.C.A. 78 of 1995 (Seema Walid) applied for time to file objections. Time was granted, but the appellant did not submit to the jurisdiction of the trial Court and the respondents' suits were decreed upon no notice of intention to defend having been given by the appellants on 6th July, 1990. The appellants applied for setting aside of the order dated 6th July, 1990, but that application came to be dismissed, after hearing the parties on 20th March, 1991. The appellants preferred appeals in July, 1991 but apparently they were also dismissed.
3. Thereafter the respondents sought to execute the decrees through this Court under section 44-A, C.P.C. Through execution applications Nos.15 to 18 of 1991. The appellants filed objections, but by order dated 18-5-1992 a learned Single Judge ruled that the objections could not be heard unless the appellants furnished security in terms of Order 21, Rule .23-A, C.P.C. The appellants preferred appeals against the aforesaid order before a Division Bench which were disposed of by a consent order darted 27-8-1992 whereby the order of the learned Single Judge dated 18-5-1992 was set aside and the matter was remanded to the learned Single Judge. Upon remand another learned Single Judge hearing the execution applications noticed that the Appellate Bench had not decided the question of requirement of furnishing security under Order 21, Rule 23-A, C.P.0 and thereafter proceeded to consider the question of non-furnishing of security as well as the merits of the case.
By the impugned order dated 8-8-1995 he held that furnishing security was a condition precedent for objecting to execution of any money decree including a decree of a foreign Court and therefore, the appellants' objections could not be heard. Moreover, proceeding on merits he found the objections to be unsustainable and directed that the decree be executed. The appellants have questioned this order through these appeals.
4. On the question of security Mr. Muhammad Ali Saeed learned counsel for the appellants relied upon the pronouncement of a Division Bench of this Court in Abdul Malik Badaruddin v. Gors Venor Casino Limited (PLD 1993 Karachi 449) wherein it was inter alia held that the provisions of Order 21, Rule 23-A, C.P.0 do not apply to foreign decrees or judgments sought to be executed under section 44-A, C.P.C. Apparently this judgment was not brought to the notice of the learned Single Judge passing the impugned order and indeed supports Mr.Saeed's contention. Mr.Raja Qureshi learned counsel for the respondents candidly conceded this position. Accordingly we would hold that the mere non-furnishing of security would not bar the entertainment of objections to execution taken by the appellant. This evidently brings us to the merits of the controversy and it needs to be examined whether the findings of the learned Single Judge are sustainable on facts and law. In this context Mr. Muhammad Ali Saeed contended that under section 44-A(3) that foreign decree could not be executed unless it was shown to the satisfaction of the Court that the decree did not fall within any of exceptions laid down in clauses (a) and (0 of section 13. He further contended that judgment and decree had not been pronounced by a Court of competent jurisdiction, had not been given on merits and was obtained through proceedings opposed to natural justice. As such it was hit by clauses (a), (b) and (d) of section 13.
5. Mr. Muhammad Ali Saeed learned counsel for the appellant in the first instance argued that the judgment sought to be executed was not pronounced by a Court of competent jurisdiction and was hit by clause (a) of section 13, C.P.C. Relying upon the admitted facts that - the defendants/appellants were domiciled and residing in Pakistan where summons had been served through publication Courts in United Kingdom could not assume jurisdiction over the matter.
Learned counsel argued that the competence of foreign Courts should be viewed from the stand- point of International law and not the procedural law of the country where the suit is brought or where the judgment is proposed to be enforced. He therefore, contended that the Courts in United Kingdom could be deemed to be competent to pronounce judgment only under two conditions namely either the defendants should have been domiciled or, residents of the territory where the judgment was pronounced or had voluntarily submitted to such jurisdiction. He emphatically contended that territory where the cause of action had accrued was altogether irrelevant for the aforesaid purpose.
6. In an elaborate and erudite address Mr.Saeed cited a large number of precedents from several jurisdictions in support of his view. It may not be necessary to refer to all the cited precedents but some important ones need to be taken note of. The first in point of time appears to be the pronouncement of the Judicial Committee of the Privy Council in Sardar Gurdyal Singh v. . The Raja of Farid Kot (1894 AC 670). In this case the Raja of Farid Kot a ruler of a princely State obtained two ex parte decrees against the appellant (who had at some point of time served as treasurer to the Raja) from the State Courts. An action founded upon these judgments (which were to be treated as foreign judgments in British India) was latter brought against the appellant in a Court at Lahore where the appellant was then residing. The matter was litigated up to the Privy Council which held that the action brought at Lahore must fall on the ground that the Farid Kot Court had no jurisdiction on any recognized principle of International Law against a man who had left the State territory and was domiciled elsewhere when the action was brought. Learned counsel also referred to two decisions of this Court in the cases of Swindells & Sons v. Haji Muhammad Abdullah (PLD 1957 Karachi 933) and Ghulam Ahmed and others v. Dr.Sarosh Rattanji Wadia (PLD 1959 Karachi 624). In the first case an action was brought against the judgment-debtors by the plaintiff/decree- holder before the Queen's Bench Division at Liverpool, writ of summons were served at Karachi where the judgment-debtors resided and upon their failure to appear ex parte decree was passed.
This decree was sought to be executed in Karachi under section 44-A, C.P.C. Inamullah Khan, J. (as his Lordship then was) held that since the defendants/judgmentdebtors did not reside in nor did they submit themselves by appearance or otherwise to the jurisdiction of the English Court the Queen's Bench was not competent to pass the decree. It may be mentioned here that his Lordship took note of the arguments that under Order 11, Rule 1 of the Supreme Court Rules of England British Courts would have jurisdiction in respect of breach committed within its jurisdiction of a contract wherever made. Nevertheless, he proceeded to hold that in the case at hand it had not been alleged that breach of contract had been committed within the jurisdiction of the Queen's Bench and that in any case the Rules and Procedure of British Court had no application in Pakistan after independence.
7. Learned counsel then relied upon a Division Bench Judgment of this Court in Ghulam Ahmed and another v. Dr.Sarosh Rattanji Wadia (PLD 1959 Karachi 624). In this case the respondent had filed a suit against the petitioner for recovery of medical charges for treatment to the applicants and their families at Bombay between 1946 and 1949 before the Court of Small Causes, Bombay. The applicant at the time of filing of the suit was residing and carrying on business at Karachi. The Bombay Court, however, decreed the suit ex parte against the applicants and upon this decree a suit was filed and decreed by the Small Causes Court, Karachi. In a revision application preferred by the applicant, their Lordships followed the principle laid down in Sardar Gurdyal Singh's case and held that in the absence of a statutory power to pronounce judgment against a person residing outside its territorial jurisdiction, a Court could not pronounce judgment in the personam against any person who was not domiciled or actually residing within the territorial jurisdiction of the Court unless such person voluntarily submitted to the jurisdiction of the Court.
8. Mr. Saeed emphatically argued that in the above context the mere fact that the cause of action according to the procedural law of a particular country arose within its territorial jurisdiction would be of little significance in determining whether such Court had jurisdiction to pronounce upon the controversy. Though this proposition sloes not appear to have directly dealt with in the above cited precedents (except for some brief observations. In Swindells' case), learned counsel placed reliance upon the judgment of the Dacca High Court in Fazal Ahmed and others v. Abdul Bari and another (PLD 1952 Dacca 152) at page 164 of he report Guha, J. Expressed his agreement with certain decisions taken by the High Courts of Calcutta, Allahabad and Madras to the effect that cause of action is not a general ground of jurisdiction recognized in International Law and no foreign judgment can be regarded as given by Court of competent jurisdiction simply on the ground that the cause of action arose within its jurisdiction and by the local law of the foreign State etc.
9. Mr. Saeed also drew our attention to Cheshire and North's Treatise on Private International Law (13th Edition) where the authors recorded their opinion at page 420 in the following words: "According to the decisions that have dealt with the matter up to the present, it is undoubted that the various circumstances considered above exhaust possible cases in which a foreign Court possesses international competence. Thus it is not sufficient that the cause of action, as for instance a breach of contract or a commission of a tort accrued in foreign country."
10. Indeed Mr. Saeed appears to be correct in asserting that under the Traditional Common Law Rules of Private International Law an action on the basis of a foreign judgment could only be maintained if the defendant in the aforesaid judgment was a resident or at least physically present in the foreign country at the time of commencement of proceedings or had submitted to or agreed to submit to the jurisdiction of such foreign Court. The mere fact that the cause of action had accrued within the jurisdiction of such Court would not confer competence upon such Court in an International sense so as to make its judgments recognizable and enforceable in Britain. The Privy Council and the King's Bench decision in Sardar Gurdyal Singh v. Mahraja of Farid Kot (1894 AC 670) and Emanuel v. Symon (1908) 1 KB 302) could be treated as the leading authorities for this proposition.
11. Mr. Raja Qureshi learned counsel for the respondent however, 'argued that once the Courts in United Kindgom had exercised jurisdiction in the matter the decision of such foreign Courts ought to be treated as conclusive in view of the subsequent pronouncement of the Privy Council in Brijlal Ramjidas and another v. Govindram Gordhandas Seksaria and others (PLD 1947 PC 150). In the aforesaid case a controversy had arisen before a Bombay High Court as to whether a judgment of the High Court Of Indore (which was a foreign Court) for the purpose of section 13, C.P.0 'was rendered by a Court of competent jurisdiction. It was not disputed that the parties were amenable to the jurisdiction of Courts in Indore but the respondent had averred that the District Judge and not the High Court was competent to adjudicate upon the subject-matter. The objection was unheld. By the Bombay High Court but the Privy Council reversed the findings holding that in the aforesaid context the views taken by the foreign Court i,e, the Indore High Court was conclusive. In our humble opinion the above pronouncement seems to indicate that when the controversy pertains to the jurisdiction of a particular forum within a foreign country the taken by such foreign Courts ought to be accorded sanctity. Nevertheless when the question of amenability of a non- resident foreigner to the jurisdiction of the C) Court of a particular country is involved the matter has to be examined from an International Law perspective.
10. Moreover, learned counsel argued that in the statement of claim (plaint) it was clearly asserted that the cause of action accrued within the jurisdiction of the foreign Courts where the contract between the parties had been entered and payment had to be made by the appellants. He contended that under Order 11,, Rule 1 of the Supreme Court Rules foreign Courts could exercise jurisdiction over non-resident foreigners in matters where cause of action had accrued within their jurisdiction and in the instant case summons were actually served upon the appellants and one of them responded to the same, sought time, but did not appear on the date of hearing. This statement of the law appears to be correct and we have noticed that Order 11 of the Supreme Court Rules is similar to section 20 of our C.P.C. Where a Court can exercise jurisdiction if the cause of action has accrued within its limits irrespective of the residence of the defendant.
13. Indeed as far as question of exercise of jurisdiction of British Courts over non-resident foreigners is concerned the common law principles seem to have stated in Cheshire and North quoted above in Chapter-12. Several rules premised on judgments of high authority have been stated at pages 302--305 and it appears that British Courts are competent to exercise jurisdiction where a claim is brought to enforce, rescind, dissolve or otherwise affect a contract or to recover damages or obtain any other remedy in respect of breach of contract in cases where a contract was made within the jurisdiction of such Courts or the breach is committed within such jurisdiction. We have gone through the statement of claim which is available in the files pertaining to the execution application and it appears that both these conditions are satisfied. This fortifies Mr.Raja Qureshi's contention to the effect that it could not be contended, from the stand-point of English Law that the Courts pronouncing judgement had no jurisdiction to do so.
14. Nevertheless, the cases and the Statement of law relied upon by Mr. Muhammad Ali Saeed presents a somewhat anomalous situation that whereas the English Courts would assume jurisdiction over a non-resident foreigner in a case like the present one, they would decline to recognize or enforce a foreign judgment where jurisdiction in similar circumstances has been assured by a foreign Court. This anomaly appears to be acknowledged by English Courts and jurists and therefore, in certain cases it has been held that the power of the Court to allow service of motion in foreign countries (which is discretionary under Order 11, Rule 1 of the Supreme Court Rules) ought to be exercised with extreme caution.
15. At this stage it may be mentioned that the above mode of resolving the anomaly may not be appropriate in Pakistan where section 20, C.P.C. Unlike Order 11, rule 1 of the Supreme Court Rules of England, does not leave any discretion with the Court and requires it to entertain a suit even against a non-resident foreigner as long as it can be shown that the cause of action accrued within the territorial jurisdiction of the Court. In this context it might be pertinent to refer to the pronouncement of the India in Viswanathan v. Abdul Wajid AIR 1963 SC 1 relied upon by Mr. Raja Qureshi. In this case question of recognition of a judgment of a Court in Bangalore which at the relevant time was part of Mysore and a foreign Court for the purpose of section 13, C.P.C. Directing the defendants (who were residing outside the State) to re-transfer the shares of a Company (which also had its offices outside Mysore) arose. It was observed that there was no general rule of Private International Law that a Court could in no event exercise jurisdiction in relation to persons, matters or property outside jurisdiction. The Supreme Court of Canada as well in some recent pronouncements taken a radically different approach towards recognition. In Morguard Investment Limited v. D.C. Saboya (1991) 76 DLR 256 the Court dealing with the question of recognition and enforcement of foreign judgments applicable in inter-provincial cases declined to follow the rule laid down in Emanuel v. Symon (1908) 1 KB 302 and proceeded to hold that a greater degree of recognition and enforcement within the Canadian Federation was required than had been the case under English Common Law Rules, keeping in view the need in modern time to facilitate flow of wealth, skills and people across State lines. Though this case related to recognition of a judgment within the. Canadian Federation its principles were extended even to judgment delivered in sovereign foreign States in the subsequent case of Mouses v. Shore Boat Builders Limited (1993) 106 DLR (4th) 654. In this case the respondent, a British Colombian Company having no place of business in Alaska (U.S.A.) had built a boat for the appellant and upon some defects having been found the appellant brought an action for damages and obtained a judgment from an Alaskan Court. Holding that judgments ought to be recognized and enforced by a Canadian Court. The Supreme Court held that the subject-matter had a real and substantial connection with Alaskan Courts where the contract was performed and the right to claim damages for breach accrued. It was observed that "it would be odd indeed if a Canadian Court would refuse to recognize and enforce a judgment of a foreign Court in a situation where the foreign Court assumes jurisdiction on the same basis on which Canadian Courts assume jurisdiction"..
16. Another aspect of the matter that has caused us some anxiety stems from the difference between sections 13 and 44-A, C.P.C. Under section 13 a foreign judgement is not enforceable per se but a suit on its basis has to be filed though it is conclusive with respect to a matter adjudicated upon between the parties subject to six specified exceptions. The first exception being that it will not be conclusive when it has not been passed by a Court of competent jurisdiction and the authorities cited before us show that competence is to be reckoned in an international sense and this exception would become applicable if the defendant was not residing within the territorial jurisdiction of the foreign Court at the time of institution of the action or had not voluntarily submitted to the jurisdiction of such Court. Section 44-A on the other hand stipulates that the decree of superior Court of United Kingdom can be directly executed as if it has been passed by a District Court. Clause (3) of this section however, stipulates that the Court shall refuse execution if it is shown that it falls within any of the six exceptions contained in section 13. This appears to lead to a somewhat anomalous situation that the decree of a Court in United Kingdom which is 'directly executable as a decree of a District Court in Pakistan may become unexecutable merely because that Court was not considered to possess jurisdiction in an "international" sense notwithstanding the fact that under its own system of laws it had full powers to pass such decree.
17. These questions do not appear to be considered in the weighty body of the case-law cited before us. Nevertheless since we are bound by pre-Partition pronouncement of the Privy Council in Sardar Gurdyal Singh's and of a Division Bench of this Court in Ghulam Ahmed's case. We are constrained to hold that the decree of the English Court could not be deemed to have been passed by a Court of competent jurisdiction as admittedly appellants were not residing within the jurisdiction of such' Court at the time of institution of the action.
18. Mr. Raja Qureshi alternatively submitted that the appellant had submitted to the jurisdiction of the foreign Court and therefore, the decree was duly enforceable. In this context learned counsel pointed out that from the record of the execution application that notice of writ of summons was received by the appellant but failed to appear on the given date whereupon ex parte judgment was passed. He applied for setting aside such judgement and by order dated 4th April, 1991 the application was dismissed after hearing counsel for both parties. We have gone through the cases cited by learned counsel for the parties and it seems that when a defendant appeared before a foreign Court only to protest against assumption of jurisdiction he cannot be assumed to have voluntarily submitted to such jurisdiction. Nevertheless, when he also takes up defences on merits a clear submission can be inferred. Similarly when he applies to have a default judgment set aside and appeals as to merits of the claim such appeal would normally amount to submission to jurisdiction. Nevertheless, if the appeal or application is merely premised upon a jurisdictional issue it would not be treated as submission. Unfortunately none of the applications moved by the appellants for setting aside the ex parte judgment have been placed on record.
19. In the circumstances since there is no material to show that the appellant had submitted to the jurisdiction of the Courts in Britain and in view of the binding precedents referred to in para.17, we are constrained to allow this appeal on the ground that the foreign judgment was not pronounced by a Court of competent jurisdiction. In view of the above it is not necessary to examine the remaining contentions of Mr. Muhammad Ali Saeed. The impugned judgment of the learned Single Judge is therefore, set aside, but there shall be no order as to costs. A copy of this judgement may be forwarded to the Secretary, Ministry of Law, Government of Pakistan and Secretary, Pakistan Law Commission to consider the desirability of amending the relevant provisions of C.P.C. In view of the anomalies pointed out.