Execution of foreign decree in India in respect of loan recovery and validity of agreement which was executed outside India

If the lender and Borrower are both residing in USA the foreign lender can also obtain an executable decree/award from the foreign jurisdiction, however, when execution is applied in Indian courts the same foreign lender may faces difficulty in execution, as there are only a few countries which are recognized as a “reciprocating territory” under the Indian laws (Section 44 A of the Civil Procedure Code, 1908) whereby any decree or award passed by certain courts. Hence it is recommended that under the Equitable Mortgage Memorandum the jurisdiction for enforcement proceedings should be prescribed as Bangalore, India.

The Indian Contract Act 1882 recognizes all contracts entered into by parties competent to contract and having the elements of a valid contract as defined under the Act. Such contracts and agreements entered into by competent parties where ever in the world can be enforced in a court of law in India if for a valid reason the jurisdiction is India. In the case at hand, as the mortgage property is situated in Bangalore India and hence the jurisdiction for all legal matters pertaining to the Equitable Mortgage should to be Bangalore, India. Once this is defined in the agreement, the place where the agreement is executed or the consideration is delivered not of relevance and the same could be in USA for agreement to be legally enforced in the appropriate defined jurisdiction in India in case of a default by parties.