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Appeal from Appellate Order No. 59 of 1960, decided on 16th July 1963.

Performance‑Determination of law governing contract‑Presumptions: lex loci contractus and lex loci solu tion is‑Expressed intention of parties determines proper law of contract and overrides every presumption.

Dicey's Conflict of Laws, pp. 579, 584, 593 & 594 ref.

S. 5 (1) (b)‑Contract‑Both parties resident in Pakistan entering into contract in India to be performed in Pakistan in accordance with Pakistan Law‑Such contract, held, not hit by S. 5 (1) (6).

Alcock v. Smith (1892) 1JCh. D. 238 and Embirieos v. Anglo Austrian Bank (1906) 1 K B D 677 ref.

, O. XXI, r. 2(2) Payment of sum towards decretal amount out of Court evidenced by receipt‑‑Question of adjustment of such sum not pressed before executing Court within 90 days of date of receipt‑Payment cannot be accepted as certified.

Alluri Bapanna v. Inunganti Vengayya and others A I R 1937 Mad. 511 and Prakash Singh v. Allahabad Bank Ltd. A I R 1937 Mad. 56 ref.

Md. Fazlul Karim for Appellant.

B. N. Chowdhury with Haradhan Sarkar for Respondent.

On 22nd of May 1950 two Pakistanis were in Calcutta and on the very same day entered into a contract for sale of certain movable properties in Pakistan for a certain sum to be paid in Pakistan. The plaintiff‑respondent instituted a suit for a sum of Rs. 1,500 the consideration money and the suit was decreed for the said sum and the cost of Rs. 269‑13‑0. Several execu tion cases were started but they were disposed of without satis faction of the decree and ultimately on 23rd of November 1959 an execution case was started and was numbered Execution Case 72 of 59. The judgment‑debtor appellant filed an objection under section 47 of the Code of Civil Procedure contending inter alia that execution case was not maintainable in view of the fact that the contract entered into India was hit by the provision of Foreign Exchange Regulation Act, and that in any view of the matter the judgment‑debtor was entitled to get a credit of Rs. 185 paid to the decree‑holder and admitted to have been received by the decree‑holder as per Exh. 1. This objec tion under section 47 of the Code of Civil Procedure was opposed by the decree‑holder contending inter alia that the contract was not barred by the provision of Foreign Exchange Regulation Act, that the objection regarding maintainability of the suit and the execution case was barred by res judicata in view of the decree and the previous execution case started by decree‑holder where the judgment‑debtor did not take any objection based on the Foreign Exchange Regulation Act, and that payment of Ra. 185 was not certified by the decree‑holder and recorded by the Court as provided under Order XXI, rule 2 (2). The afore said contentions of the decree‑holder were given effect to by the Courts below. Hence the present appeal.

2. Mr. Fazlul Karim, the learned Advocate for the appel lant, has pressed only three grounds first, that the present execu tion case is hit by the Foreign Exchange Regulation Act, second, that the execution case is not maintainable and the third, adjustment of Rs. 185 should have been recorded by the Courts below.

3. In support of his first contention, the learned Advocate have referred to the provision of section 5 (1) (b) of the Foreign Exchange Regulation Act and also to the case of Alcock v. Smith ((1892) 1 Ch. D. 238) and the case of Embirleos v. Anglo‑Austrian Bank ((1906) 1 K B D 677).

4. By section 5 (1) (b) it has been provided that no person in, resident in, shall‑

"draw, issue or negotiate any bill of exchange or promissory note acknowledge any debt, so that a right (whether actual or contingent) to receive a payment is created or transferred in favour of any person resident outside Pakistan."

It is an admitted fact that both the parties to the contract are Pakistanis and at the relevant date they were in Calcutta where they entered into the contract in question. In such a case the proper law governs a contract and "the proper law of a contract means the law, or laws by which the parties intended, or may fairly be presumed to have intended, the contract to be governed ; or (in other words) the law or laws to which the parties intended or may fairly be presumed to have intended, to submit themselves". It is further well established principle that:

"Prima facie the proper law of the contract is presumed to be the law of the country where the contract is made (lex loci, contractus)."

This presumption applies wholly in the country where it is mad or may performed anywhere, or performed in another country. This is the first presumption.

The second presumption is:

"When the contract is made in one country, and it is to be performed either wholly or partly in another, then the proper law of the contract may be presumed to be the law of the country where the performance is to take place (lex loci solutionis.) This presumption to certain aspects of a contract. It will usually apply to the mode of performance as distinguished from the substance of the obligation."

5. Then again in order to determine which law will apply it shall have to be gathered from the intention of the parties in the contract. When the intention of the parties to a contract, as to the law governing the contract, is expressed in words, this expressed intention determines the proper law of the contract, and in general overrides every presumption.

(See Dicey's Conflict of Laws, pp. 579, 584, 693 & 594).

6. Here in the present case the parties contracted in Calcutta for a transaction to be performed by both the parties in Pakistan. After the return to Pakistan the judgment‑debtor took the properties from the decree‑holder but did not pay the consideration money. Hence from this contract it is clear that the intention of the parties was that laws of Pakistan will govern the contract. Secondly, as the contract was going to be performed in Pakistan, the second presumption arises in the present case. It has not been contended by the learned Advocate for the appellant that if the contract had been entered into Pakistan then the same would be hit by the Foreign Exchange Regulation Act. Rather, it is, if the contract had been entered into Pakistan, the same would have been a valid in accordance with the law prevailing in Pakistan. Hence, in my opinion the contract entered into India is not hit by provision of the Foreign Exchange Regulation Act. As such in my opinion, the contract entered into India is not bit by the provision of the Foreign Exchange Regulation Act. As such it cannot be said that the decree passed at the instance of the decree‑holder on the basis of the contract is without jurisdiction and null and void. It maybe pointed out that the cases relied on by the learned Advocate for the appellant do not help him, rather it goes against him and support my above view.

7. In support of the second ground, namely, that the execu tion case is not maintainable, has been argued by learned Advo cate for the appellant that as the present execution case was filed beyond three years from 12th of August 1953, the execution case is not maintainable. This contention is not supported by the materials on the record, as it appear from the judgment of the lower Appellate Court that there had been some other execution cases started after 12th of August 1953.

8. It has been further submitted by the learned Advocate for the appellant that execution was stated by a person alleged to have the power‑of‑attorney from the decree‑holder, but the said power‑of‑attorney has not been filed and as such the execu tion case is not maintainable. This question requires investigation of facts, but it appears from the judgments of the Courts below that this point though raised in the objection petition was not pressed before any of the Courts below. Hence I do not find any substance in this contention.

9. Now coming to the last ground that in any view of the matter, the payment of Rs. 185 as evidenced by Exh.1 should have been adjusted towards the payment of the decretal dues. In support of this contention it has been contended that as the receipt was given by the decree‑holder no question of limitation arises. In support of this contention reliance has been placed on the case of Alluri Bapanna v. Inunganti Vengayya and others (A I R 1937 Mad. 511). In that case the decree‑holder transferred the decree to another person stating in the transfer deed that certain portions of the decree‑holder's dues were not recoverable from the judg ment‑debtor. After the transferee put the decree into execution objection was put in by the judgment‑debtor that certain sums might be credited towards the payment. Objection was taken by the transferee decree‑holder that that sum was not certified and recorded by the Court as provided under Order XXI, rule 2 (2). This contention of the decree‑holder was rejected on the ground that as the original decree‑holder admitted to have received the same in the transfer‑deed that receipt of payment did not come under sub‑rule (2) of rule 2 of Order XXI, but under Order XXI, sub‑rule (1) of rule 2, which does not require any period of limitation. This view also finds support in the case of Prakash Singh v. Allahabad Bank Ltd. (A I R 1937 Mad. 56). Hence the decision reported in A I R 1937 Mad. 511 has no bearing to the present case.

10. It is next contended by the learned Advocate that Exh. 1 goes to show that the decree‑holder received Rs. 185, on different dates and this receipt is sufficient compliance with the provision of rule 2 (1) of Order XXI. In my view, this payment really comes under the provision of rule 2 (2) of Order XXI, and as such it required the Court's recording and certifying of the payment or adjustment of the sum of money. But as this question of adjustment or payment of the said sum was not pressed before the executing Court before 90 days the same payment cannot be accepted as certified, Hence I find no substance in any of the contentions of the learned Advocate for the appellant.

11. The appeal is accordingly dismissed, and the judgment and order of the lower Appellate Court are affirmed. But in the facts and circumstances of the case, I direct the parties to bear their costs of all through.

S. Q. Appeal dismissed.

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