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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