A recent decision of the Delhi High Court in Mashreq Bank v. Navin Khilnani, (dated 9.11.2005), has held that since the foreign judgment was rendered after a very detailed analysis and after bestowing considerable thought to the defence version, it was one on merits and thus, complied with the requirement of section 13 (b) of the Code of Civil Procedure, 1908 (CPC) [‘whether foreign judgment not conclusive’]. A judgment passed ex parte or merely because the defendant was not present or a judgment in default simpliciter will not be enforceable in India as it would not be on merits.

The Delhi High Court was faced with an issue whether a judgment rendered by the Queen's Bench Division of the High Court of United Kingdom was on merits or not. In a petition filed by the plaintiff Bank before the Delhi High Court (based on the aforesaid judgment) the defendant contended that the same had not been delivered on merits and therefore was not conclusive under the Code of Civil Procedure.

The plaintiff had initiated proceedings before the English Court based on the default on the part of the defendant under a guarantee deed executed by him. The defendant took the plea of undue influence and fraud practiced upon him by his brother of which the plaintiff Bank had constructive notice. Although there was no appearance on behalf of the defendant before the English Court the Judge minutely examined the defense in light of the material on record and held that the defendant's plea was not sustainable. The Judge took note of various factors including that the defendant was an experienced businessman holding an MBA degree and had been representing group of companies in the Bank.

The foreign judgement was thus enforced.