Manharlal Trikamdas Mody and another v Sumikin Bussan International (HK) Limited

JudgeGeorge Wei JC
Judgment Date30 June 2014
Neutral Citation[2014] SGHC 123
Docket NumberOriginating Summons No 601 of 2013 (Summons No 5391 of 2013)
Citation[2014] SGHC 123
Published date04 July 2014
Hearing Date28 January 2014
CourtHigh Court (Singapore)
Defendant CounselAndrew Chan / Alexander Lawrence Yeo (Allen & Gledhill LLP)
Plaintiff CounselAndrew Ang / Andrea Tan (PK Wong & Associates) (instructed) / Peh Chong Yeow / Si Hoe Tat Chorng (Advent Law Corporation)
George Wei JC: Introduction

The first plaintiff (“P1”) is the husband of the second plaintiff (“P2”). Both P1 and P2 (hereinafter referred to collectively as “the Plaintiffs”) were adjudged bankrupt in Singapore on 4 February 2005. The Plaintiffs are permanent residents of Singapore although it is undisputed that they are also Indian nationals. The defendant (“the Defendant”) is a company incorporated under the laws of the Hong Kong Special Administrative Region (“the HKSAR”). It is undisputed that the Defendant does not have any presence in Singapore at all.

The Defendant, being a judgment creditor of P1, commenced execution proceedings against a property located in Mumbai, India (“the Mumbai property”) about ten years ago. In Originating Summons No 601 of 2013 (“OS 601/2013”), the Plaintiffs are seeking to restrain the Defendant from continuing with the legal proceedings in India against the Plaintiffs and the Official Assignee (“the OA”). Leave to serve out of jurisdiction was also sought by the Plaintiffs in order for OS 601/2013 to be served on the Defendant in the HKSAR. The application before me today is Summons No 5391 of 2013 (“SUM 5391/2013”), which is taken out by the Defendant. In this application, the Defendant seeks to set aside OS 601/2013 and the order granting leave to serve out of jurisdiction (“the service order”), as well as the actual service on the Defendant in the HKSAR. After considering the evidence and the arguments made by all parties, I am allowing the Defendant’s application in SUM 5391/2013. I now give the reasons for my decision.

The facts

The background facts to this longstanding dispute between the Plaintiffs and the Defendant are complex, involving litigation in the HKSAR, India, and now, Singapore. Therefore, there is a need to first set out a brief summary of the main events leading up to the present application (viz, SUM 5391/2013) to set aside OS 601/2013, the service order and the actual service on the Defendant in the HKSAR. Given the multiplicity of proceedings across different jurisdictions, I will consider the legal proceedings in the HKSAR, India and Singapore separately for ease of reference.

Legal proceedings in the HKSAR

Legal proceedings were first commenced in the HKSAR back in 2001 by the Defendant against P1. The Defendant succeeded in obtaining a judgment (“the HKSAR judgment”) against P1 on 31 May 2002 for the sum of US$618,331.26. The application for leave to appeal by P1 was dismissed.

In October 2002, the Defendant commenced proceedings to enforce the judgment debt and subsequently obtained a charge over a property in the HKSAR (“the HKSAR property”) belonging to P1. On 14 January 2005, the HKSAR property was sold and the sum of HK$215,528 was paid to the Defendant in partial satisfaction of the judgment debt. It is undisputed that the outstanding judgment debt remains unsatisfied till date.

At this juncture, it also bears noting that P2 was not involved in the HKSAR proceedings. Thus, P2 was never a judgment debtor of the Defendant.

Legal proceedings in India

On 26 June 2003, the Defendant commenced execution proceedings (“the execution proceedings”) in the High Court of Bombay against the Mumbai property belonging to P1 (of which P2 also claims an interest in). The execution proceedings were by way of a claim to enforce the HKSAR judgment against P1 in India.

Between June 2003 and early 2005, numerous applications and hearings involving the Defendant and the Sheriff of Mumbai (“the Sheriff”) took place before the High Court of Bombay. These resulted in, amongst others, the issuance of a warrant of attachment, a certificate of attachment (returned by the Sheriff) and a warrant of sale in the first half of 2004.

While the execution proceedings were ongoing in India, the Plaintiffs were adjudged bankrupt in Singapore on 4 February 2005. At this juncture, I note from across the different documents that have been placed before me that there is a slight discrepancy as to the precise date on which the Plaintiffs were adjudged bankrupt. That date is stated as 9 February 2005 in the Plaintiffs’ written submissions whereas it is stated as 15 February 2005 in the Defendant’s written submissions. In both P1 and P2’s affidavits, 4 February 2005 is referred to as the correct date. After perusing the affidavits and the exhibits attached therein, including the letters that were sent by the OA, I am of the view that the relevant date should be 4 February 2005. In any event, nothing turns on this slight discrepancy as it is undisputed that the bankruptcy orders were granted in February 2005. Further details of the bankruptcy proceedings in Singapore will be provided later in this judgment (see [21]–[22] below).

On 14 April 2005, P1 applied to the High Court of Bombay for a stay of the execution proceedings (“the bankruptcy stay action”) that were ongoing in India on the basis that P1 had been adjudged bankrupt in Singapore. The bankruptcy stay action was commenced with the written consent of the OA by way of a letter dated 13 April 2005. Subsequently, P2 applied to intervene in the bankruptcy stay action and to be joined as an interested party on the basis that she was a co-owner of the Mumbai property. P2’s application, however, was eventually dismissed in August 2005 for want of prosecution.

With regard to the bankruptcy stay action, a single judge of the High Court of Bombay granted, at first instance, an ad-interim stay of the sale of the Mumbai property on the basis of P1’s bankruptcy in Singapore. The Defendant appealed against that decision. The Division Bench of the High Court of Bombay (“the Division Bench”) allowed the appeal and discharged the ad-interim stay of the sale of the Mumbai property. It was held that the attachment was levied on the Mumbai property prior to the grant of the bankruptcy order in Singapore. On that basis, the bankruptcy order could not “affect the right of the attaching creditor of the insolvent”. The Plaintiffs, however, complain that this ruling was obtained by the Defendant’s failure to disclose to the Division Bench that it had filed a proof of debt in the ongoing bankruptcy proceedings in Singapore. In any event, P1 lodged an appeal against the decision of the Division Bench on 29 November 2005 and that appeal was pending before the Supreme Court of India (“the Indian Supreme Court”) as at the date of the hearing before me.

It appears that, at about this time in around September 2005, the terms of the sale of the Mumbai property were amended to recognise the rights of ING Bank, the then lessee of the Mumbai property. At first instance, a single judge of the High Court of Bombay permitted the amendment in order to allow ING Bank to remain in possession until it was repaid the rental security deposit. The Defendant appealed against this decision but the appeal was dismissed by the Division Bench on 2 May 2006. The Division Bench held that although ING Bank did not have a lien or a mortgage over the Mumbai property, it had an irrevocable licence to remain in possession until the rental security deposit was returned. P1 subsequently filed an appeal to the Indian Supreme Court on 23 January 2007.

Meanwhile, on 14 October 2006, P1 commenced a fresh action (“the reciprocating territory action”) to set aside the execution proceedings on the basis that the HKSAR was not a reciprocating territory as declared by the Indian government. Although a government notification issued in 1968 included Hong Kong as a reciprocating territory, P1 argued that the notification did not, in any event, cover the HKSAR. P1 also objected on the basis that the HKSAR High Court was not a superior court of record. It bears noting that these objections were being raised for the first time. It is further noted that the ground of attack in the reciprocating territory action is quite separate and distinct from that in the bankruptcy stay action, which was based on the bankruptcy order against P1 in Singapore.

On 17 February 2009, the Sheriff held an auction of the Mumbai property. This was followed by the Sheriff’s application to the High Court of Bombay in June 2009 for confirmation of the sale. It was at this stage when P2 filed an application to protect her interest in the Mumbai property. P2’s claim appears to be based on the assertion that the Mumbai property was purchased with investment earnings that had been deposited into the Plaintiffs’ joint bank accounts. Further details of P2’s application were not led in the evidence before me. It is noted that the Defendant’s position is that P2 does not have any interest in the Mumbai property.

With regard to the reciprocating territory action, P1’s application was dismissed at first instance by a single judge of the High Court of Bombay on 13 February 2008. P1 appealed and the Division Bench allowed the appeal, holding that the HKSAR judgment was not enforceable in India. As a result, the execution proceedings were discharged by the Division Bench. The Defendant has since lodged an appeal against the decision of the Division Bench and the appeal was pending before the Indian Supreme Court as at the date of the hearing before me.

As a result of the Division Bench’s decision to discharge the execution proceedings, the High Court of Bombay, on 12 July 2010, declined to confirm the sale and instead ordered the sale monies to be returned to the buyer.

On 4 October 2010, the Indian Supreme Court ordered all parties to maintain the status quo with respect to the Mumbai property pending the hearing of the appeal in relation to the reciprocating territory action. In summary, there are now (as at the date of the hearing before me) three appeals scheduled to be heard jointly by the Indian Supreme Court: P1’s appeal with respect to the bankruptcy stay action; P1’s appeal with respect to ING Bank’s application to protect...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT