Supreme Court clarifies jurisdiction for executing foreign decrees in Messer Griesheim GmbH vs. Goyal MG Gases Pvt. Ltd. (2022)

Date of the Judgment: 28 January 2022

Citation: (2022) INSC 73

Judges: Justices Ajay Rastogi and Abhay S. Oka

When a foreign court grants a money decree, where should the decree holder go to enforce it in India? The Supreme Court of India recently addressed this critical question, clarifying the jurisdictional aspects for executing decrees from reciprocating territories. This judgment clarifies whether a High Court, in its original jurisdiction, can execute a foreign decree or if the decree holder must approach a District Court. The bench comprised Justices Ajay Rastogi and Abhay S. Oka, with Justice Rastogi authoring the opinion.

Case Background

Messer Griesheim GmbH, now called Air Liquide Deutschland GmbH (the Appellant), initiated proceedings against Goyal MG Gases Pvt. Ltd. (the Respondent) in the High Court of Justice, Queen’s Bench Division, Commercial Court, United Kingdom (English Court). This court is a superior court of a reciprocating territory, namely, the United Kingdom.

Initially, a default decree was passed against the Respondent on 6th February 2003 due to their non-appearance. The Appellant then issued a winding-up notice, which the Respondent contested, citing the default nature of the decree. To resolve this, the Appellant sought to set aside the default decree and obtain a decree on the merits of the case. The English Court, on 7th February 2006, granted a money decree in favor of the Appellant for a principal sum of US $5,824,564.74. The Respondent did not appeal this decree, and it attained finality.

The Appellant filed an execution petition in the High Court of Delhi on 27th April 2006. At that time, the decretal amount exceeded Rs. 20 lakhs, which was the pecuniary limit for the Delhi High Court to entertain such petitions. The Respondent raised objections, including a challenge to the Delhi High Court’s jurisdiction under Section 44A of the Code of Civil Procedure, 1908 (the Code).

The decretal amount, as of 20th January 2022, was approximately Rs. 99 crores.

Timeline

Course of Proceedings

The Single Judge of the High Court of Delhi overruled the preliminary objections of the Respondent and held that the High Court had jurisdiction to execute the foreign money decree, given that the value of the decree exceeded Rs. 20 lakhs on the date the execution petition was filed (27th April 2006). The Single Judge also directed the Respondent to deposit the original title deeds of a property in Sahibabad and provide an affidavit clarifying the property’s encumbrances.

The Respondent challenged this decision before the Division Bench of the High Court. The Division Bench focused on the singular issue of whether the High Court of Delhi had the jurisdiction to execute the money decree of the English Court under Section 44A of the Code. The Division Bench concluded that Section 44A provides an independent right to a foreign decree holder, distinct from domestic execution procedures. It held that only a District Court, as defined under Section 44A of the Code, has the jurisdiction to entertain such execution petitions. Consequently, the Division Bench directed the transfer of the execution petition to the District Court where the property to be attached was located.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 2(4) of the Code: Defines “district” as the local limits of the jurisdiction of a principal Civil Court of original jurisdiction, including the local limits of the ordinary original civil jurisdiction of a High Court.
• Section 6 of the Code: States that no court shall have jurisdiction over suits exceeding its pecuniary limits, unless expressly provided otherwise.
• Section 13 of the Code: Specifies when a foreign judgment is not conclusive, including instances where it was not given by a court of competent jurisdiction or was obtained by fraud.
• Section 44A of the Code: Provides for the execution of decrees passed by superior courts of reciprocating territories as if they were passed by a District Court in India. It states:
  
  “(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(2) of the Delhi High Court Act, 1966: Grants the High Court of Delhi ordinary original civil jurisdiction in suits where the value exceeds Rupees twenty lakhs.

The Court noted that the United Kingdom is a reciprocating territory as per a notification issued by the Ministry of Law. The decree from the English Court was thus considered a decree from a superior court of a reciprocating territory.

Arguments

Appellant’s Submissions:

• The High Court of Delhi has the jurisdiction to execute a foreign court’s decree if the value of the money decree exceeds the pecuniary limits under Section 5(2) of the Delhi High Court Act, 1966.
• The English Court’s decree is from a notified superior court of a reciprocating territory under Section 44A of the Code.
• The High Court of Delhi has ordinary original civil jurisdiction, subject to pecuniary limits.
• Section 44A should not be interpreted to mean that a civil court, lacking pecuniary jurisdiction, becomes a District Court for executing a foreign decree.
• In cities with split jurisdiction, the High Court should be considered a principal civil court of original jurisdiction when the pecuniary jurisdiction exceeds the prescribed limits.
• Execution proceedings are a continuation of the suit proceedings.

Respondent’s Submissions:

• Section 44A provides an independent right to a foreign decree holder for enforcement in India.
• The scheme of Section 44A is different from domestic execution under Section 39(3) of the Code.
• Section 44A confers exclusive jurisdiction on a “District Court” for executing a foreign decree.
• The provision does not mandate that the executing court must be competent to try the original cause.
• Section 44A gives a fresh cause of action, irrespective of the original cause.
• Pecuniary competence to try a suit is relevant for domestic decrees under Sections 38 and 39 of the Code, but not for foreign decrees under Section 44A.
• Section 5(2) of the Delhi High Court Act, 1966, refers to “suits” and does not include execution proceedings.
• Only the District Court has jurisdiction to execute a foreign decree.

Submissions Table

Issues Framed by the Supreme Court

The core issue before the Supreme Court was:

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

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following legal provisions:

• Section 2(4) of the Code: Definition of “District”.
• Section 6 of the Code: Pecuniary jurisdiction of courts.
• Section 13 of the Code: When foreign judgments are not conclusive.
• Section 44A of the Code: Execution of decrees passed by courts in reciprocating territory.
• Section 5 of the Delhi High Court Act, 1966: Jurisdiction of the High Court of Delhi.
• Section 24 of the Punjab Courts Act, 1918: Principal civil court of original jurisdiction.

Authorities Table

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Section 2(4) of the Code: The Court interpreted this section to mean that the definition of “district” includes the local limits of the ordinary original civil jurisdiction of a High Court.
• Section 6 of the Code: The Court acknowledged that courts have pecuniary limits, but clarified that these limits do not restrict the High Court’s jurisdiction in executing foreign decrees when the value exceeds the pecuniary limits as per Section 5(2) of the Delhi High Court Act, 1966.
• Section 13 of the Code: The Court noted this section in the context of the objections that can be raised against the execution of a foreign decree, but did not delve into its specific application in this case.
• Section 44A of the Code: The Court interpreted this section to mean that a foreign decree can be executed in India as if it were a decree passed by a District Court. However, it clarified that the term “District Court” includes a High Court exercising original civil jurisdiction based on pecuniary limits.
• Section 5(2) of the Delhi High Court Act, 1966: The Court relied on this section to establish that the High Court of Delhi has ordinary original civil jurisdiction in suits where the value exceeds Rupees twenty lakhs. This was crucial in determining that the High Court could execute the foreign decree in this case.
• Section 24 of the Punjab Courts Act, 1918: The Court noted that this section establishes the District Judge as the principal civil court of original jurisdiction, but clarified that Section 5(2) of the Delhi High Court Act, 1966, modifies this by conferring original civil jurisdiction on the High Court for suits exceeding certain pecuniary limits.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to provide an effective mechanism for the execution of foreign decrees, while also respecting the established pecuniary jurisdiction of the High Court. The Court emphasized that the definition of “District Court” under Section 44A of the Code should not be interpreted narrowly to exclude the High Court when it is exercising its original civil jurisdiction based on pecuniary limits. The Court also considered the practical implications of its decision, noting that execution proceedings are a continuation of the suit proceedings and should be handled by the court with the appropriate jurisdiction.

Fact:Law Ratio

The Supreme Court’s decision was influenced by a combination of factual and legal considerations. The factual aspects included the specific circumstances of the case, such as the value of the decree, the date of filing of the execution petition, and the relevant notifications. The legal considerations included the interpretation of Sections 2(4), 6, 13, and 44A of the Code, as well as Section 5(2) of the Delhi High Court Act, 1966. The Court’s analysis shows a higher emphasis on the legal provisions and their interpretation.

Logical Reasoning

Judgment

The Supreme Court held that the High Court of Delhi, in its original jurisdiction, is competent to entertain a petition for executing a money decree of a foreign court, provided the value of the decree exceeds the pecuniary limits of the High Court. The Court clarified that the term “District Court” in Section 44A of the Code includes the High Court when it exercises original civil jurisdiction based on pecuniary limits. The Court emphasized that execution proceedings are a continuation of the suit proceedings.

The Court’s reasoning was based on the following points:

• The definition of “district” under Section 2(4) of the Code includes the local limits of the ordinary original civil jurisdiction of a High Court.
• Section 44A of the Code allows for the execution of foreign decrees as if they were passed by a District Court, but this does not exclude High Courts with original civil jurisdiction.
• The pecuniary jurisdiction of a court is relevant, and the High Court of Delhi has original civil jurisdiction for suits exceeding Rupees twenty lakhs as per Section 5(2) of the Delhi High Court Act, 1966.
• Execution proceedings are a continuation of the suit proceedings, and the court with original jurisdiction over the suit should also have jurisdiction over the execution.

The Court quoted the following from the judgment:

• “It is an old saying that the difficulties of the litigant in India begin when he has obtained a decree.”
• “A litigant coming to Court seeking relief is not interested in receiving a paper decree when he succeeds in establishing his case.”
• “To read the expression “District Court” in Section 44A for execution of foreign decree, it will 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 1966.”

There were no dissenting opinions in this case.

Key Takeaways

• A High Court with original civil jurisdiction can execute a foreign money decree if the value of the decree exceeds its pecuniary limits.
• The term “District Court” in Section 44A of the Code includes a High Court exercising original civil jurisdiction based on pecuniary limits.
• Execution proceedings are considered a continuation of the original suit proceedings.
• Foreign decree holders can approach the High Court for execution if the value of the decree exceeds the pecuniary limits of the District Court.

Directions

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

Development of Law

The Supreme Court clarified that the term “District Court” under Section 44A of the Code includes the High Court when it exercises original civil jurisdiction based on pecuniary limits. This interpretation ensures that foreign decrees can be executed efficiently by the court with the appropriate jurisdiction, preventing unnecessary delays and procedural hurdles. The ratio decidendi is that a High Court exercising original civil jurisdiction based on pecuniary limits is competent to execute a foreign decree under Section 44A of the Code, provided the decree value exceeds the High Court’s pecuniary limits. This clarifies the previous position that only a District Court had the jurisdiction to execute a foreign decree under Section 44A of the Code.

Conclusion

The Supreme Court’s judgment in Messer Griesheim GmbH vs. Goyal MG Gases Pvt. Ltd. clarifies that a High Court, in its original jurisdiction, can execute a foreign money decree if the value exceeds its pecuniary limits. This decision ensures a more streamlined process for executing foreign decrees, preventing unnecessary delays and providing clarity on jurisdictional issues. The Court’s interpretation of Section 44A of the Code provides a more practical approach, aligning with the existing pecuniary jurisdiction of High Courts.