Professional Documents
Culture Documents
Upendra Baxi*
I. INTRODUCTION
THE YEAR under review has failed to produce any case-law on the
choice of law aspects of the conflicts law; but, as usual, some
interesting decisions on foreign judgments, jurisdiction prorogation,
and domicile are available. The year 1974 already promises a more
exciting outcropping of conflicts cases;1 but, for the present, one has to
be content with the modest fare.
decisions are being referred to, but only through headnotes or through
summaries of the main principles afforded in leading, and authoritative,
English treatises on conflict of laws.4 This, of course, remains unjustifia-
ble, however plausible the arguments of excessive workload of the appe-
llate courts may be.
The real problem seems to be that there are very few lawyers interes-
ted or competent in the subject; and, what is worse, the number of
academic specialists in the subject is pitifully small. The latter has the
consequence far more fateful than the present professional illiteracy of
the Bar. Unless a whole generation of students is trained soundly in the
substantive domain of conflicts law, the development of conflicts juris-
prudence in this country will continue to be retarded. Law schools in
India may well consider making instruction in the subject with adequate
reference to Indian materials compulsory, rather than optional. Of course,
similar demands can be made for other subjects; but it remains incon-
trovertible that conflict of laws is among the least developed subjects in
, India. To let an entire field of law, affecting human lives in multifarious
ways, virtually unattended5 is a default for which law teachers must
remain accountable to lawmen specially and the community generally.
II. DOMICILE
4. For facile, and totally misleading, reliance on headnotes see Badat v. East
India Co., A.I.R. 1964 S.C. 538 and the critique by U. Baxi, Allepey Turmeric Fin-
gers and Arbitral Awards : Spices in the Conflict of Laws 10 J.I.L.L 150 at 163-65
(1968). And for judicial overreliance on case-summaries in English text-books see
infra note 36 et seq.
5. Virtually unattended not, however, wholly so. See for the bibiliography of
available literature footnotes 6 and 40 in U. Baxi, Conflict of Laws IV A.S.I.L.
227 at 229, 257 (1967-68).
6. Compare Shanno Devi v. Mangaidas Sain, A.LR. 1961 S.C. 58 with Kulathil
MammuY. State of Kerala, A.I R. 1966 S.C. 1614 and see Baxi, supra note 4 at
232-43.
The Calcutta High Court reversed the decision holding that "for the
purpose of the application of the Hindu Marriage Act one need not
Section (2)(1) (c), on the other hand, does refer to "any other person
domiciled in the territories to which this Act extends". The court observes,
as regards this provision, that it
Moreover, the latter section makes the Act applicable "to any other
person domiciled in the territory to which the Act extends" who is a
Hindu (not Muslim, Christian, Parsi or Jew)
unless it is proved that any such person would not have been
governed by the Hindu Law or by any custom or usage as a part
of that law in respect of any of the matter dealt with herein if this
Act had not been passed.
This section does not bear the interpretation proffered by the court.
Instead of its applying to "persons domiciled in other territories" and
"governed by Hindu Law", it applies to persons domiciled in India
(save Jammu and Kashmir) who are neither manifestly Hindus in the
broad sense of the Act nor Muslims, Christians, Parsis or Jews but who
are, by way of rebuttable presumption, governed by Hindu law or usage
or custom. The court itself seems (with respect) to appreciate this
limited import of section 2(1) (c) when it observes that the "GorKhas of
Nepal of persons like the appellant belonging to the Gorkha tribe must
be regarded normally as Hindus unless contrary is established by proper
evidence . ."1B
All this is true; but this does not justify any conception of "extra-terri-
torial" reach of the Act. Moreover, under the rules of private inter-
national law, both lex loci celebrations and lex domicilii rules will operate
so as to enhance the ambit of the application of the Act. In fact, the
Act embodies the substance of the conflicts lex domicilii rule concerning
the essential validity of marriage. The Act applies thus to all other
persons who, being Hindus or governed by Hindu law, are domiciled in
Indian territories (save Jammu and Kashmir), even though they may be
"outside the said territories".
Shukla J. (on his behalf and on behalf of Seth J.) negatived this conten-
tion in both the cases. In effect, the court decided in both the cases,
that article 5 in terms speaks of "rights which would accrue at the com-
mencement of the Constitution" which latter term, according to article
394, means 26 January 1950. Shukla J. concedes that articles 5 to 9,
among other articles, came into effect on 26 November 1949; but he feels
"that fact cannot be equated with the commencement of the Constitu-
tion".19 On this point, the court's reasoning is not so clear as one would
(with respect) wish it to be. No doubt, article 5 in terms confers citizen-
ship upon persons who were domiciled in the territory of India (and who
also fulfilled some other requirements) "at the commencement of the
Constitution". But if this latter phrase were to be construed to refer
only to 26 January 1950, what meaning can one give to the command of
article 394 that article 5, along with others, "shall come into force at
once ?" What, if anything, in article 5 is to come into force at once if
the term "commencement of this Constitution" is to compel us to make
26 January 1950 as the date decisive for the operation of article 5 ?
Counsel for Wali Mohmmad and Fida Hussain relied on the first
part of article 394 and made it basis to their whole argument. The
ingenious argument proceeded somewhat as follows (though this is not
how it appears to have been made or appreciated by the court) : (i) arti-
cles 5 and 7 came into operation on November 26, 1949, by virtue of the
first part of article 394; (ii) their clients were Indian citizens by virtue of
that part of article 394 as they were domiciled (and born) in India as on
26 November 1949; (iii) they left for Pakistan only after 26 November
1949; (iv) the persons migrating after 1 March 1947 who are not to be
deemed citizens of India are only those who were not domiciled in India
on 26 November 1949, the day when article 5 came into force.
But does this orthodox way of distinguishing the two situations have
any reasoned basis? Both articles 6 and 7 open with non-obstante clauses.
Article 6 excludes article 5; article 7 excludes both articles 5 and 6. The
scope of the non-obstante clause in article 7 is thus undoubtedly wider;
but this aspect is scarcely so decisive as to make Shanno Devi reasoning
altogether and automatically irrelevant.
20. Ibid.
21. Wali Mohammad 47.
22. Wali Mohammad 46-47 ; Fida Hussain 366-67.
23. Supra note 21.
24. See supra note 6.
November 1949; not on 26 January 1950. Why then should the latter
date come into operation in the construction of relevant (and decisive)
time-periods in article 7 but not in article 6? This question is completely
independent of the perplexities of article 5 and the antinomies of article
394.
One can only hope that on so momentous a matter for the individuals
concerned as Indian citizenship the judiciary in the future will not give
to the questions here posed so short a shrift.
under and in connection with this bill of lading shall be judged in the
U.S.S.R.", the Union of India filed in India a suit for recovery of
Rs. 4,792.62 for the alleged short delivery of the cargo. The trial judge
determined that Indian courts had jurisdiction bult referred the matter to
the city civil court, Madras, to find an authoritative answer to the question
as to where the cause of action arose under sections 19 and 20 of the
Civil Procedure Code, 1908.26 The latter coprt directed the case further
to the Division Bench for a "fresh look" upon the matter in view of
compelling and conflicting policy considerations.27
The parties who make their choice of the Tribunal should normally
be bound by their contract. That should especially be the case as
to the choice of the law applicable to the contract. But it seems to
me that enforcement by the Indian courts of the choice of foreign
tribunal cannot be ruled as imperative, but it should depend on the
balance of convenience in particular circumstances and the
exigencies of justice.29
The learned Chief Justice further considered the view of Cheshire that
unless the court's discretion "in favour of allowing the English action to
continue is exercised sparingly, there is a danger that foreign merchants
will lose faith in the efficacy of arbitration clauses".30 But he felt that
the "prospect of the danger apprehended by Cheshire" should not out-
weigh a judicious and just exercise of the inherent discretion of the
court.81
26. Ibid.
27. Ibid.
28. 1970-71 Madras L.J. 548.
29. Id. at 549 (emphasis added).
30. Ibid; see G.C. Cheshire and P.M. North, Cheshire's Private International Law
206 n. (8th edn., 1970).
31. Ibid.
In the instant case, the court upheld the professio juris stipulation;
accordingly, all "questions and disputes" could only be determined in
accordance with the provisions of the Merchant Shipping Code of the
U.S.S.R. The court found that there were no "sufficient" reasons to
"bail the Union of India out" of a deliberate undertaking concerning the
application of Soviet law.83
conflict of laws.37 Nor, according to the court, that its views will
"necessarily impede or hamper international trade".38
The court also felt that the amount of Rs. 5,000 was too small to
justify the expense of "driving the Union of India to Russian Courts".39
The size of the amount claimed under a suit, and the expense of recover-
ing it in foreign courts, is "one of the circumstances which can legitimately
be taken into account in enforcing a foreign jurisdiction clause".40
This approach of the Madras High Court is, with respect, contrary to
the growing modern common law hospitality to prorogation clauses, also
shared abundantly by the Indian courts.41 What were the grounds in
this case justifying the departure from the prima facie rule that the con-
tractual stipulation concerning forum selection should be respected ? The
fact that courts have not always and invariably enforced the forum-
selection clause cannot indeed be a ground for not enforcing such a clause
in a particular case. This fact by itself only testifies to possibilities of
exceptions being made to the rule in proper situations. It does not and
cannot mean that the rule has, or should have, as many as frequent
exceptions as courts may desire.
Nor were most of the Eleftheria grounds present. The only Eleftheria
ground conceivably relevant in this case was the first: namely, "in what
country the evidence on issues of fact is situated, or more readily available,
and the effect of that on the relative convenience and expense of trial"
as between the Indian court and the foreign court.42 No doubt, the
relevant evidence of short delivery was available relatively easily at Naga-
pattinam port in India. But then such evidence is always available at the
port of delivery. The real question is: would the presentation of this
evidence in a Russian court cause so much inconvenience and expense
as to justify Indian courts assuming jurisdiction regardless of an express
contractual stipulation to the contrary?
The only other ground involved, which is original to the Madras High
Court's reasoning in the instant case, is simply the smallness of the
amount at issue. Is this at all a justifiable policy consideration? It is
I think that it is essential that the court should give full weight to
the prima facie desirability of holding plaintiff's to their agreements.
In this connection, I think that the court must be careful not just to
pay lip service to the principle involved and then fail to give effect to
it because of a mere balance of convenience.
The Madras High Court has paid in the instant case only lip service to
the principle. It is evident that neither counsel nor the court studied
the Eleftheria decision carefully. Instead, regrettably, the court merely
followed the principles which Brandon J. formulated on the basis of
previous decisions,47 missing altogether the crucial fact that even their
application did not result in a refusal of the stay of the suit in that case.
Recalling the salutary principles laid down by the same High Court
in the landmark case of Mjs Laxminarayan Ramniwas v. Lloyd Tristino...^
Justice S. Mukharji ruled that the parties must be held to their con-
tractual stipulation, unless some unfairness or injustice may actually
result in so doing. Where such a result was proved to the satisfaction
of the court, the court may allow the local action.50
Although the Calcutta High Court does not even refer to the Eleftheria
decision (unlike the Madras High court), it arrives at an outcome which
is substantially similar to the Eleftheria.61 The court rejects the argu-
ment that Calcutta is a more convenient judicial forum since the Bul-
garian company has its agents there (indeed all over the world) by obser-
ving that the plaintiff in this case is the Union of India, which too has
similar facilities for initiating suits in foreign fora. Underlying this
rejection of the Union's argument is the wise principle that the mere fact
that a foreign shipping company's agents are located within the jurisdic-
tion of an Indian court is not by itself at all decisive of the enforceability
of a prorogation clause. Merchant shipping operations^ require such
agencies at almost all major ports in the world. Shipping companies can-
not be fairly asked to wind up their agencies if their prorogation clauses
are to be judicially enforced.
forum and chose foreign law to govern their transaction, they must be
assumed to have taken into consideration the foreign exchange aspects.
Besides, these are relevant not just to the Indian trader or corporation;
they are relevant to both the Indian and the foreign parties. We cannot
assume off hand that a Bulgarian corporation or any other foreign corpo-
ration would necessarily have the foreign exchange facilities which their
Indian counterparts do not have. Indeed, further, if there are govern-
mental restrictions, of a very drastic nature, on such use of foreign
exchange reserves one may even argue that the entire contract becomes
impossible of performance.
The court qualifies this above observation by reference to the "facts and
circumstances of this case".64 Obviously, one fact and circumstance here
is that the Government of India is a party which pleads foreign exchange
difficulties. However, it is therefore, not to be assumed that the court
is thereby confining its observations to such a situation only.
It is obvious that there are other facts and circumstances in this case.
These are the professio juris and prorogation stipulations. In addition,
the court bears in view of the fact that the suit would not be time-barred
in the Bulgarian courts, if instituted within six months of the stay of the
Indian suit by the court. The Bulgarian Company agreed before the
court that it would not raise the question of limitation if the suit was so
filed before the Bulgarian court, although the suit was obviously time-
barred under the Hague rules.65
Moreover, the court decided to stay the action on the twin grounds
of the proper law of contract and the nature of dispute. The dispute
being one of short shipment and/or short delivery, evidence was available
in Bulgaria and India. Part of the dispute, the court felt, had to be
decided by Bulgarian law and part by recourse to the Hague Rules.68 A
conflict between the two will need to be settled by judicial interpretation.
All these "facts and circumstances" led the court to order a stay of
the suit. But, above all, the court continually emphasizes the fact of forum-
selection by the parties and the pro-prorogation trend both in "inter-
national trade" and judicial attitudes in common law countries.67
Mukharji J. cites an American Supreme Court decision which unequivo-
cally affirmed that the
One must conclude with the hope that the Calcutta High Court's cos-
mpolitan approach, often endorsed by the Supreme Court, will eventually
oust all anti-prorogation tendencies in Indian courts.
Notarial acts
The only major decision under this rubric is Susma Bala v. Bibuti
Bhusan a Full Bench decision of the Calcutta ftigh Court. While the
fact-law complex was a peculiar one, the decision does transcend this
complex and is related to the conflict of laws principles.
56. Ibid.
57. Ibid.
58. See supra note 51.
59. A.I.R. 1973 Cal. 295.
S.C. Ghose J. (speaking for Mitra C.J., S. Mukherji and Janah JJ. and
himself) found that the right to execute the notarial mortgage bond is
"a substantive right" like the right of appeal, and is not a mere matter
"method or manner or process" of procedure.60 The right of the holder
is the right to "have the mortgaged property sold without filing a suit".61
The French notarial mortgage bond has, the learned judge admits, no
direct counterpart in Indian procedural law; but the latter does have an-
alogous situations where, for example, certificates issued under the Public
Demand Recovery Act or the Income Tax Act are "executed straight-
away".62 Ghose J. concedes at the same time the procedure in execution
is "a part of adjective law" and there is no "vested right in procedure".63
Accordingly, the notarial bond can be executed as a decree under the
Civil Procedure Code, 1908.
64. See, for provocative assaults on this dichotomy, W.W. Cook, The Logical
and Legal Bases of the Conflict of Laws 154-93 (1942) ; A. Ehrenzweig, A Treatise on
Conflict of Laws 331-33 (1962).
65. A.I.R. 1973 Cal. 295 at 302.
66. Id. at 302; see also for the position of foreign notarial bonds generally
InRe.K.K. Ray {Private) Ltd. A.I.R. 1967 Cal. 636, and the analysis in Baxi,
Conflict of Laws IV A.S.I.L. Ill at 249-51 (1967-68).
67. S. 44-A, Civil Procedure Code, 1908 : (as amended in 1952) :
44-A(l) Where a certified copy of a decree of any of the superior courts of
any reciprocating territory has been filed in a District court, the decree
may be executed in India as if it has been passed by the District court;
The Madras High Court, accepting this contention, finds that the
(2) Together with the certified copy of the decree shall be filed a certificate
from such superior court stating the extent, if any, to which the decree had
been satisfied or adjusted and such certificate shall, for the purposes of
proceedings under this section, be conclusive proof of the extent of such
satisfaction or adjustment;
(3) The provisions of S. 47 shall as from the filing of the certified copy of the
decree apply to the proceedings of a District court, executing a decree
under this section, and the District court shall refuse execution of any
such decree, if it is shown to the satisfaction of the court that the decree
falls within any of the exceptions specified in clauses (a) to ( / ) of S. 13.
Explanation 1 : "Reciprocating territory" means any country or territory
outside India which the Central Government may, by notification in the Official
Gazettee, declare to be a reciprocating territory for the purposes of this section;
and 'superior courts' with reference to any such territory, means such courts
as may be specified in the said notification.
Explanation 2 : "Decree" with reference to a superior court means any decree
or judgment of such court under which a sum of money is payable, not being a
sum payable in respect of taxes or other charges of a like nature or in respect of
a fine or other penalty but shall in no case include an arbitration award, even
if such an award if enforceable as a decree or judgment,
$8, A.I.R. 1973 Mad. 14J,
general power of attorney was, in effect, filed by the appellant for herself;
and not in any representative capacity for the firm.69 Moreover, the
suits filed by the Singapore powerholder were, according to the court, not
"on behalf of the partnership".70 Accordingly, the court held that the
suit filed before the Singapore High Court "admittedly after the dissolu-
tion of partnership" and in the individual capacity of the appellant, did
not give rise to a decree of competent court which attracted section 44-A
of the Code.
If the court had rested on the fact-situation thus far presented the
present decision would have just been $n reiteration of familiar principles
of jurisdiction in the conflictual sense of the term. However, the court
does engage itself clearly with the question whether its decision would
have been different if the general power of attorney were executed clearly,
and the previous suits were also filed, on behalf of the firm. K Reddy
J. proceeds to say that even so the outcome would remain the same
because it was "the firm which submitted to the jurisdiction of the
Singapore court by filing suits and not the individuals constituting
partnership".71 To reinforce this conclusion the court cites the decision
in Guruswami v. Md. Khan Sahib,72 where despite the facts that the
British Indian defendant was a partner in a firm in Mysore State and
a cause of action arose out of the firm's business, the Bangalore court
(of the then native Indian State of Mysore) was held to be incompetent
as the defendant had not submitted to its jurisdiction.
The Chettiar court itself concedes that a foreign court will have
jurisdiction, where, inter alia "by an agreement a person has contracted
himself to submit himself to the forum in which the judgment is
obtained".73 If this is so, the question arises whether a partnership
agreement does not in itself, without more, by necessary implication, lead
to a submission to jurisdiction of the courts or the legal system under
the protection of which such an agreement is made. The Civil Procedure
Code recognizes that Indian courts have jurisdiction if "any of the
defendants .... at the time of commencement of suit...carries on business"
within Indian jurisdiction. Indian courts have also accepted the proposi-
tion that firms doing business in India by non-resident foreign partners
can be sued in India. Of course, the jurisdiction of Indian courts over
V. JURISDICTION
(a) the defendant, or each of the defendant when there are more
than one, at the time of the commencement of the suit...carries
on business or
(b) any of tjhe defendants, if there is more than one, at the time
of the commencement of suit...carries on business...or
suit under section 20 of the Civil Procedure Code. Since the corporation
was held not to have raised any objection before the city civil court, the
High Court (rightly) held that it had already submitted to its jurisdiction
through its having "waived" the right of objecting to the court's jurisdic-
tion.76 Nevertheless, the Full Bench (in what must amount, under the
traditional approaches to the concept of precedent, to a massive obiter)
proceeded to examine the appellant's main arguments.
The court held, rightly, that section 20 (a) of the Code had no appli-
cation in the instant case, since the first defendant (the agriculturist)
was resident in the Nizamabad District and was not amenable to the
jurisdiction of Hydarabad/Secundrabad courts.76 As far as the appli-
cability of clauses (b) and (c) was concerned, the appellant corporation
argued that it did not "carry on business" in Hyderabad, as by virtue of
Explanation II, it must be deemed to carry on business only at its "head
office" in Delhi, as it had no subordinate office anywhere else. It was
contended that the second part of Explanation II was accordingly not at
all attracted in the present case.77 The court skips over section 20 (b)
altogether but decides that section 20 (c) establishes jurisdiction of the
local courts, in view of the fact that the cause of action arose, at least
in part within their local limits of jurisdiction.78
But Explanation II is relevant for clauses (a) and (b) of section 20, in
that it prescribes where a corporation, as distinct from any other person,
can be said to "carry on business". The Explanation creates a fiction
to the effect that the corporation is deemed to "carry on business" where
it has its head and subsidiary offices, regardless of the fact that it actually
does or does not so do. All that a plaintiff need establish is that the
corporation has a Head Office : in fact, once this is established, it must
even follow that (as the court holds in the present case) it must have
subordinate offices, as otherwise the idea of a "head office" simply does
not make sense.8* Once the existence of the "head office" is proven, the
question usually is not whether it has any subordinate offices at all but
where it may be deemed to have subordinate offices.
81. Id. at 345. This approach bears out the hope expressed by this writer
that "a liberal interpretation of the term 'subordinate office* can go a long way
to further limit the scope of the section" and the rigour of what is "awkwardly
9harapterized as the 'head office' theory," See Baxi, supra note 6 at 26J,