THE ASSOCIATED HOTELS OF INDIA, LTD. AND ANOTHER versus R. B. JODHA MAL KUTHALIA

Citation: [1961] 1 S.C.R. 259 · Decided: 23-08-1960 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Dismissed

Judgment (excerpt)

1 S.C.R. SUPREME COURT REPORTS 
259 
THE ASSOCIATED HOTELS OF INDIA, LTD. 
AND ANOTHER 
v. 
R. B. JODHA MAL KUTHALIA. 
(B. P. SINHA, c. J., J. L. KAPUR, P. B. GAJENDRA· 
GADKAR, K. SuBBA RAo and K. N. WANCHOO, JJ.) 
Partition of India-Creation of two Dominions, India and 
Pakistan-Formation of new provinces and transfer of territories-
Decree passed by Federal Court of Pakistan-Whether executable in 
India-Evacuee laws-Whether affect such decree-The Indian 
Independence Act, r947, s. 9-The Indian Independence (Legal 
Proceedings) Order, r947, art. 4, els. I, 2, 3-Code of Civil Proce-
dure, r908 (V of r908), 0. 45, r. r5. 
On October 2, 1946, the Associated Hotels of India Ltd., 
and its managing director, Mohan Singh Oberoi, appellant l and 
2 respectively, entered into an agreement with the respondent 
for purchasing certain property from the latter for a price of 
Rs. 52,75,000 and paid Rs. 5 lacs as earnest money; but as the 
respondent's title to the property was found to be defective the 
sale was not completed. The appellants filed a suit in the Court 
of Senior Subordinate Judge at Lahore for the recovery of 
Rs. 5,10,qf,o which included the earnest money and interest 
accruing thereon, and the suit was decreed for Rs. 5,08,333/ 5/ 4 
with future interest in favour of appellant No. 2 on March 14, 
1949. The claim of appellant No. l was rejected. On appeal 
by the respondent the High Court at Lahore reversed the decree 
of the trial 'court and dismissed the suit on November 21, 1949· 
The Federal Court of Pakistan on appeal by the appellants 
allowed the appeal of appellant No. 2 on December 21, 1953, 
and restored the decree passed in his favour by the trial court. 
After the rassing of the decree by the trial court and before the 
decision o the respondent's appeal in the Lahore High Court 
the appellants had put the decree in execution which was 
stayed at the request of the respondent on condition that the 
respondent should deposit Rs. 3,00,000 in the High Court and 
furnish security for the balance of the decretal amount. In 
course of the execution proceedings and .after the Federal 
Court's decree in favour of appellant No. 2 the main question 
that arose, inter alia, was whether the deposited sum of 
Rs. 3,00,000 should be applied towards the satisfaction of the 
decree of the Federal Court and paid to the decree-holder after 
transferring it to India or whether the custodian of evacuee pro-
perty in Pakistan was entitled to the money as evacuee property. 
The decree-holder and the judgment-debtor were both agreed 
that the money in question vested in the decree-holder and 
34 
August a3. 
260 
SUPREME COURT REPORTS 
[1961] 
1960 
should as requested by him be either transmitted to India or 
paid to pim. This was resisted by the custodian and the High 
The Amcoaled Coutt held that the money could not be transferred to India, 
/Jotels nf India, and directed the custodian to report what interest any evacuee 
Ltd. l.;. Anolh" had in the money. It was under these circumstances that the 
v. 
appellants made the present application to the Punjab High 
I!. Ii. Jodha Mal Court (India) under 0. 45, r. 15, and s. 151 of the Code of Civil 
Kulhalia 
Procedure with a prayer for transmitting to the C<:urt of the 
Senior Subordinate Judge, Simla, the proceedings between the 
parties for execution of the sai<I decree in accordance with the 
provisions applicable for execution oi original decrees passed by 
the said Judge. Their contention w•s that as a result of the 
provisions of Art. 4(3) of the Indian Independence (Legal Pro-
ceedings) Order, 1947, the decree passed in favour of appellant 
No. 2 bv the Federal Court of Pakistan had become executable 
in India as if it had been passed by the Supreme Court of l ndia. 
The respondent resisted this on the grounds that the applica-
tion was not entertainable and the decree could not be executed 
in the absence of a certificate as required by 0. 21, r. 6(b) of the 
Cede of Civil Procedure, that the decree did not attract the 
provisions of Art. 4(3) of the Order and that ihe decree in ques-
tion having vested in the Custodian appellant No. 2 was not 
entitled to execute it. The relevant portion of Art. 4 of the 
Indian Independence (Legal Proceedings) Order, 1947, runs 
thus:--
"Notwithstanding the ·creation of certain new provinces 
and the transfer of certain territories from the Province of 
Assam to the Province of East Bengal by the Ir.dian Indepen-
·c1ence Act, 19

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