Supreme Court Clarifies Jurisdiction for Executing Foreign Decrees in Delhi: Messer Griesheim GmbH vs. Goyal MG Gases Pvt. Ltd. (2022)

Date of the Judgment: January 28, 2022
Citation: 2022 INSC 113
Judges: Justice Ajay Rastogi and Justice Abhay S. Oka. The judgment was authored by Justice Rastogi.
Can a High Court execute a foreign court’s money decree, or is that power reserved for the District Court? The Supreme Court of India addressed this question in a case concerning the execution of a foreign decree. The core issue was whether the High Court of Delhi, in its original jurisdiction, could execute a money decree from a superior court of a reciprocating territory, or if that power was solely vested with the District Court under Section 44A of the Code of Civil Procedure, 1908. The Supreme Court held that the High Court of Delhi does have the jurisdiction to execute such a decree if the value exceeds the pecuniary limits of the District Court.

Case Background

The appellant, Messer Griesheim GmbH (now Air Liquide Deutschland GmbH), initiated proceedings against the respondent, Goyal MG Gases Pvt. Ltd., in the High Court of Justice, Queen’s Bench Division, Commercial Court, United Kingdom (referred to as the “English Court”). This court is a superior court of a reciprocating territory, namely, the United Kingdom of Great Britain and Northern Ireland, as notified under Section 44A of the Code of Civil Procedure, 1908, vide a notification dated March 1, 1953. Initially, a default decree was passed against the respondent on February 6, 2003, due to their non-appearance. However, the respondent objected to this decree, leading the appellant to seek its setting aside. Subsequently, the English Court, on February 7, 2006, granted a money decree of US $5,824,564.74 in favor of the appellant. The respondent did not appeal this decree, which thus attained finality. The appellant then filed an execution petition in the High Court of Delhi on April 27, 2006, seeking to enforce the decree. At that time, the decretal amount exceeded Rs. 20 lakhs, which was the pecuniary limit for the Delhi High Court to exercise original jurisdiction under Section 5(2) of the Delhi High Court Act, 1966. The appellant stated that as of January 20, 2022, the decretal amount was approximately Rs. 99 crores.

Timeline

Course of Proceedings

The appellant initially filed an execution petition in the High Court of Delhi on April 27, 2006. The respondent raised objections under Section 13 of the Code of Civil Procedure, 1908, and later challenged the High Court’s jurisdiction under Section 44A of the Code. A Single Judge of the High Court overruled these objections and decided the execution petition in favor of the appellant on November 29, 2013. The respondent then appealed to the Division Bench of the High Court, which focused on the jurisdictional issue. The Division Bench concluded that Section 44A of the Code provides an independent right for foreign decree holders and that the High Court, not being a District Court, lacked the jurisdiction to entertain the execution petition. The Division Bench ordered the transfer of the case to the District Court. This decision was then appealed to the Supreme Court.

Legal Framework

The Supreme Court examined several key legal provisions:

• Section 2(4) of the Code of Civil Procedure, 1908: Defines “district” as the local limits of the jurisdiction of a principal Civil Court of original jurisdiction, including the ordinary original civil jurisdiction of a High Court.
• Section 6 of the Code of Civil Procedure, 1908: States that no court can have jurisdiction over suits exceeding its pecuniary limits.
• Section 13 of the Code of Civil Procedure, 1908: Specifies when a foreign judgment is not conclusive, including when it is not given by a court of competent jurisdiction or is obtained by fraud.
• Section 44A of the Code of Civil Procedure, 1908: Deals with the execution of decrees passed by superior courts in reciprocating territories. It states that a decree from such a court may be executed in India as if it had been passed by a District Court, provided a certified copy is filed in a District Court.
  
  (1) Where a certified copy of a decree of any of the superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court.
• Section 5 of the Delhi High Court Act, 1966: Grants the High Court of Delhi original, appellate, and other jurisdiction, including ordinary original civil jurisdiction in suits exceeding Rupees twenty lakhs.
  
  (2) Notwithstanding anything contained in any law for the time being in force, the High Court of Delhi shall also have in respect of the said territories ordinary original civil jurisdiction in every suit the value of which exceeds Rupees twenty lakhs.

Arguments

Appellant’s Arguments:

• The appellant argued that the High Court of Delhi has the jurisdiction to execute the foreign decree because the value of the money decree exceeded the pecuniary limits specified under Section 5(2) of the Delhi High Court Act, 1966.
• The appellant submitted that the English Court’s decree was from a notified superior court of a reciprocating territory under Section 44A of the Code of Civil Procedure, 1908.
• It was contended that when a city has split jurisdiction between the High Court and District Court based on pecuniary limits, the High Court should be considered the principal civil court of original jurisdiction for matters exceeding its pecuniary jurisdiction.
• The appellant argued that an execution petition is a continuation of the suit proceedings, and thus, the High Court should have jurisdiction.

Respondent’s Arguments:

• The respondent argued that Section 44A of the Code of Civil Procedure, 1908, provides an independent right for foreign decree holders and that the scheme of Section 44A is distinct from domestic execution under Section 39(3) of the Code.
• The respondent contended that Section 44A confers exclusive jurisdiction on a “District Court” for executing a foreign decree, and the High Court does not qualify as a District Court under this provision.
• The respondent submitted that the pecuniary competence of a court to try a suit is different from the jurisdiction to execute a foreign decree.
• It was argued that Section 5(2) of the Delhi High Court Act, 1966, confers limited original civil jurisdiction regarding “suits” and does not include execution proceedings.

Innovativeness of the argument: The appellant’s argument was innovative in that it sought to harmonize the provisions of Section 44A of the Code of Civil Procedure with the pecuniary jurisdiction of the High Court of Delhi under the Delhi High Court Act, 1966, arguing that the High Court should be considered the principal civil court of original jurisdiction when the value of the decree exceeds the pecuniary limits of the District Court. The respondent’s argument was based on a strict interpretation of Section 44A, asserting that the provision confers exclusive jurisdiction on the District Court, regardless of the pecuniary jurisdiction of the High Court.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the High Court of Delhi, in exercise of its original jurisdiction, is a competent court to entertain a petition for executing a money decree (in excess of Rs. 20 lakhs) of a foreign court which is notified as a superior court of a reciprocating territory under Section 44A of the Code of Civil Procedure, 1908.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• General Manager of the Raj Durbhunga v. Coomar Ramaput Sing, (1871-72) 14 MIA 605: The court noted the difficulties faced by decree holders in execution, as observed by the Privy Council in 1872.
  
  Reasoning: This case was cited to highlight the long-standing issue of delays and difficulties in the execution of decrees.

Legal Provisions:

• Section 2(4) of the Code of Civil Procedure, 1908: Defines “district” to include the local limits of the ordinary original civil jurisdiction of a High Court.
  
  Reasoning: The court relied on this definition to interpret “District Court” in Section 44A to include High Courts with original civil jurisdiction.
• Section 6 of the Code of Civil Procedure, 1908: States that no court can have jurisdiction over suits exceeding its pecuniary limits.
  
  Reasoning: The court considered this provision to highlight the importance of pecuniary jurisdiction in civil matters.
• Section 13 of the Code of Civil Procedure, 1908: Specifies when a foreign judgment is not conclusive.
  
  Reasoning: The court referred to this section to clarify the grounds on which a foreign decree’s execution can be refused.
• Section 44A of the Code of Civil Procedure, 1908: Provides for the execution of decrees passed by superior courts in reciprocating territories.
  
  Reasoning: This was the central provision in question, and the court interpreted it to determine which court had jurisdiction for execution.
• Section 5 of the Delhi High Court Act, 1966: Grants the High Court of Delhi original civil jurisdiction in suits exceeding a certain pecuniary value.
  
  Reasoning: The court used this provision to establish that the High Court has original civil jurisdiction based on pecuniary limits.

Judgment

How each authority was viewed by the Court:

• General Manager of the Raj Durbhunga v. Coomar Ramaput Sing [CITATION]: The Court used this case to illustrate the historical difficulties in decree execution, emphasizing the need for efficient execution mechanisms.
• Section 2(4) of the Code of Civil Procedure, 1908 [CITATION]: The Court relied on this definition to interpret “District Court” in Section 44A to include High Courts with original civil jurisdiction.
• Section 6 of the Code of Civil Procedure, 1908 [CITATION]: The Court considered this provision to highlight the importance of pecuniary jurisdiction in civil matters.
• Section 13 of the Code of Civil Procedure, 1908 [CITATION]: The Court referred to this section to clarify the grounds on which a foreign decree’s execution can be refused.
• Section 44A of the Code of Civil Procedure, 1908 [CITATION]: The Court interpreted this section to determine which court had jurisdiction for execution, concluding that the High Court could exercise such jurisdiction when the pecuniary limits of the District Court were exceeded.
• Section 5 of the Delhi High Court Act, 1966 [CITATION]: The Court used this provision to establish that the High Court has original civil jurisdiction based on pecuniary limits, which is relevant for executing foreign decrees under Section 44A.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors:

• The need for an effective mechanism for the execution of foreign decrees, particularly when the decree amount is substantial.
• The High Court’s established original civil jurisdiction for cases exceeding a certain pecuniary value under Section 5(2) of the Delhi High Court Act, 1966.
• The interpretation of “District Court” in Section 44A of the Code of Civil Procedure, 1908, to include the High Court when it exercises original civil jurisdiction due to pecuniary limits.
• The understanding that execution proceedings are a continuation of the original suit.

Logical Reasoning:

The Court considered the argument that the term “District Court” in Section 44A of the Code of Civil Procedure, 1908, should be interpreted strictly to exclude the High Court. However, the Court rejected this interpretation, emphasizing that the definition of “district” in Section 2(4) of the Code includes the local limits of the ordinary original civil jurisdiction of a High Court. The Court also noted that execution proceedings are a continuation of the original suit, and therefore, the court with the appropriate pecuniary jurisdiction should handle the execution.

The Supreme Court held that the High Court of Delhi has the jurisdiction to execute the foreign decree in this case. The Court reasoned that the expression “District Court” in Section 44A should be construed to be a court holding ordinary original civil jurisdiction in terms of its pecuniary limits. Since the decretal amount exceeded the pecuniary limits of the District Court, the High Court of Delhi, with its original civil jurisdiction, was the appropriate forum for execution.

The Court stated that “it would be impossible to read into Section 44A of the Code that even though the pecuniary jurisdiction of Civil Court is restricted, still for the purpose of execution of a foreign decree, it becomes the District Court in respect to those matters which fall within the ordinary original civil jurisdiction of the High Court.” The Court further clarified that “the expression “district” defined under Section 2(4) of the Code will have to be given its true effect.” Additionally, the Court emphasized that “execution always is in continuation of the proceedings.”

There was no minority opinion in this case.

Key Takeaways

• The High Court of Delhi has the jurisdiction to execute foreign decrees if the value of the decree exceeds the pecuniary limits of the District Court.
• The term “District Court” in Section 44A of the Code of Civil Procedure, 1908, includes High Courts exercising original civil jurisdiction due to pecuniary limits.
• Execution proceedings are considered a continuation of the original suit.
• This judgment clarifies the forum for executing foreign decrees in cities with split jurisdiction between the High Court and District Court.

Directions

The Supreme Court quashed the judgment of the Division Bench of the High Court of Delhi and restored the case to the Division Bench. The Supreme Court directed the Division Bench to take up the matter on priority and decide it on its merits as expeditiously as possible, but no later than four months.

Development of Law

The ratio decidendi of this case is that for the purpose of execution of a foreign decree under Section 44A of the Code of Civil Procedure, 1908, the term “District Court” includes a High Court exercising original civil jurisdiction when the pecuniary value of the decree exceeds the limits of the District Court. This clarifies the jurisdictional issue in cities like Delhi, where the High Court has original civil jurisdiction for cases exceeding a certain pecuniary value. There is no change in the previous position of law, but the present judgement clarifies the position of law.

Conclusion

In conclusion, the Supreme Court’s judgment in Messer Griesheim GmbH vs. Goyal MG Gases Pvt. Ltd. clarifies that the High Court of Delhi has the jurisdiction to execute foreign decrees when the value of the decree exceeds the pecuniary limits of the District Court. This decision ensures that foreign decrees can be efficiently executed in India, particularly in cities where the High Court exercises original civil jurisdiction based on pecuniary limits. The judgment provides clarity on the interpretation of Section 44A of the Code of Civil Procedure, 1908, and ensures that decree holders have a clear path for executing foreign decrees in India.