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In a recent decision of Messer Griesheim GmbH v. Goyal Mg
Gases Pvt. Ltd.1, the Hon’ble Supreme Court
held that High Courts having original civil jurisdiction were
empowered to execute a foreign court’s money decree falling
within their pecuniary limits under Section 44A of the Civil
Procedure Code, 1908 (CPC). In this article, we
navigate through the facts and findings of the Hon’ble Supreme
Court in the aforementioned case.
Brief Facts
The Appellant/ Decree Holder (Appellant) had
initiated proceedings before the High Court of Justice, Queen’s
Bench Division, Commercial Court, United Kingdom (English
Court) which is a superior court of a reciprocating
territory namely United Kingdom of Great Britain and Northern
Island notified under Section 44A of the CPC2. A default
decree dated 06.02.2003 was passed in the matter on account of
non-appearance of the Respondent/ Judgment Debtor
(Respondent) in the UK court.
The Appellant issued a winding-up notice to the Respondent who
objected to the same as the judgment dated 06.02.2003 was a default
decree. To meet the objection raised by the Respondent, the
Appellant approached the English Court and sought the setting aside
of the default decree and prayed for a decree on merits. It was at
this juncture, that the Respondent entered appearance and the
English Court by a judgment and decree dated 07.02.2006
(Foreign Decree) granted a money decree for a
principal sum of USD 58,24,564.74. The Respondent did not file any
appeal against the judgment and the Foreign Decree attained
finality. The Appellant filed a petition for execution of the
Foreign Decree in the High Court of Delhi (High
Court) on 27.04.2006. The total decretal amount on the
date of filing of the execution petition before the High Court was
exceeding INR 20 Lacs which was within the pecuniary limits of the
High Court in terms of Section 5(2) of the Delhi High Court Act,
1966 (Act of 1966). A reply to the execution
petition was filed by the Respondent on 17.01.2007 raising several
objections as envisaged under Section 13 of the CPC. Additionally,
an objection was also raised at a later stage that the High Court
had no jurisdiction to entertain the execution petition in view of
Section 44A of the CPC.
The Ld. single judge of the High Court overruled the preliminary
objections and held that since the execution of Foreign Decree of
the English Court was exceeding INR 20 Lacs at any given point of
time, the High Court would hold the exclusive ordinary original
civil jurisdiction. Thereafter, by way of a judgment dated
29.11.2013 the High Court allowed the execution petition. Aggrieved
by the judgment of the Ld. single judge, the Respondent approached
the division bench of the High Court.
The division bench of the High Court considered it appropriate
to examine the singular issue of jurisdiction of the High Court in
executing the Foreign Decree by exercising the original
jurisdiction in terms of Section 44A of the CPC. The division bench
of the High Court concluded that Section 44A is an independent
right conferred upon foreign decree holders for enforcement of a
foreign decree in India. It was observed that the filing of an
execution petition under Section 44A of the CPC constituted a fresh
cause of action and had no co-relation to the jurisdictional
issues. The scheme of Section 44A of the CPC was alien to the
scheme of domestic execution provided under Section 39(3) of the
CPC. Finally, the High Court held that, since it was not a
‘District Court‘ in terms of Section 44A of the
CPC, it was not vested with the jurisdiction to entertain the
execution petition and directed the same to be transferred to the
Court of District Judge within whose jurisdiction the property
sought to be attached was located. The Appellant challenged the
judgment of the division bench of the High Court before the
Hon’ble Supreme Court.
Moot Question
The moot question in the matter was whether the High Court in
exercise of its original jurisdiction, was a competent court to
entertain a petition for executing a money decree (in excess of INR
20 Lacs) rendered by a foreign Court which was undisputedly a
superior court of reciprocating territory under Section 44A of the
CPC.
Arguments for the Appellant
The Appellant submitted that the jurisdiction for the execution
of a foreign decree from a reciprocating territory vested with the
High Court, provided that the value of the money decree exceeded
the pecuniary limits as notified under Section 5(2) of the Act of
1966. The Appellant further submitted that there could be two or
more courts which are concurrently a principal civil court of
original jurisdiction subject to their pecuniary limits as
envisaged under Section 5(2) of the Act of 1966. If that being so,
when the pecuniary jurisdiction of a district court exceeds than
what is prescribed under the Act, it should be the High Court which
will be considered to be the principal court of original civil
jurisdiction as defined under Section 5(2) of the Act of 1966. The
Appellant contended that the division bench of the High Court
committed a manifest error in holding that the High Court was not
vested with the jurisdiction to entertain an execution petition for
not being a ‘District Court‘ defined within the
confines of Section 44A of the CPC.
Arguments for the Respondent
The Respondent while supporting the findings recorded in the
impugned judgment, submitted that Section 44A was an independent
right conferred on a foreign decree holder for enforcement of its
decree in India and the scheme of Section 44A was alien to the
scheme of domestic execution as provided in Section 39(3) of the
CPC. A domestic decree could be executed by a court which passed
the decree or court of competent jurisdiction to which it is
transferred for execution. However, the Respondent submitted that
insofar as the execution of foreign decree is concerned, it is
governed by an independent right under Section 44A of the CPC which
unequivocally confers the exclusive jurisdiction to a
‘District Court‘.
The Respondent also submitted that Section 5(2) of the Act of
1966 conferred a limited ordinary civil jurisdiction qua suits
above a certain pecuniary value and the expression ‘suit’
as used in Section 5(2) of the Act of 1966 had to be understood in
its ordinary sense as a civil suit. As such, the ambit of suit
would not include an execution proceeding. The Respondent while
relying on Section 4 of the Delhi High Court (Amendment) Act, 2003
which drew a distinction between a suit and other proceedings
submitted that the district court alone held the jurisdiction for
executing a foreign decree and no error had been committed by the
High Court in the impugned judgment.
Decision of the Hon’ble Supreme Court
The Hon’ble Supreme Court held that in order to appreciate
the submissions made, it would be relevant to first take a look at
the scheme of the CPC and also the relevant provisions of the Act
of 1966.
It was noted that the expression District stood defined under
Section 2(4) of the CPC and the term ‘District
Court‘ was referred under Section 44A of the CPC although
not defined. Therefore, on a conjoint reading, the Supreme Court
observed that ‘District Court‘ refers to the local
limits of the jurisdiction of a principal civil court of original
jurisdiction and includes the local limits of the ordinary original
civil jurisdiction of a High Court. The Supreme Court also observed
that it was not disputed that the principal civil court of original
jurisdiction is normally a district court (with some changes in
nomenclature) and the High Courts in India exercising ordinary
original civil jurisdictions are not too many. However, where there
was a split jurisdiction based on the pecuniary value as notified
from time to time, the district court or the High Court in its
ordinary original civil jurisdiction were held competent to
exercise power for execution of decree, including money decree of a
foreign court of reciprocating jurisdiction, provided other
conditions are complied with as contemplated under Section 44A of
the CPC.
Further, the Apex Court observed that Section 44A of the CPC
provided for execution of decrees passed by the foreign Courts in
reciprocating territories. It stipulated that where a certified
copy of a decree of any of the superior court of any reciprocating
territory had been filed in a district court of India, the decree
may be executed in India as if it had been passed by such district
court. It was noted that with the certified copy of the decree, a
certificate from the superior court would be required stating the
extent to which the decree has been satisfied or adjusted.
Finally, it was also observed that the ordinary original civil
jurisdiction was always exercised on the basis of pecuniary limits.
The Hon’ble Supreme Court held that it would be impossible to
read into Section 44A of the CPC that even though the pecuniary
jurisdiction of civil court is restricted, still for the purpose of
execution of a foreign decree, it became a ‘District
Court‘ in respect of those matters which fell within the
ordinary original civil jurisdiction. In this manner, the
expression ‘district’ defined under Section 2(4) would be
given its true effect. Thus, the Hon’ble Supreme Court
concluded that to read the expression ‘District Court’ in
Section 44A for execution of a foreign decree, it would be
construed to be a court holding ordinary original civil
jurisdiction in terms of its pecuniary limits as being notified
under Section 5(2) of the Act of 1966. Consequently, the appeal was
allowed.
Comment
Enforcement of a decree is one of the biggest hurdles that
litigants have been facing in India. As the old saying goes, the
difficulties of a litigant begin only when a decree is obtained.
The Hon’ble Supreme Court has shed much-needed clarity on the
jurisdictional conundrum in enforcement of a foreign decree from a
reciprocating territory under Section 44A of the CPC.
The authors would like to acknowledge the research and
assistance rendered by Ms. Diya Dutta, a student of MNLU,
Mumbai.
Footnotes
1. Messer Griesheim GmbH v. Goyal Mg
Gases Pvt. Ltd., Civil Appeal No. 521 of 2022.
2. Notification No. SRO 399 dated 1 March
1953 issued by the Ministry of Law as amended by GSR 201 dated 13
March 1958.
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