Case Update: Messer Griesheim Gmbh v. Goyal MG Gases Private Limited

Decided on 28 January 2022| High Court of Delhi

Background

This case considered the question as to 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 reciprocating territory under Section 44A of the Code of Civil Procedure 1908 (“Code”).

Brief facts

Griesheim Gmbh (“Appellant/Decree Holder”) who initiated proceedings before the High Court of Justice, Queen’s Bench Division, Commercial Court, United Kingdom, obtained a default money decree, vide an Order dated 6February 2003 (“Order”), in its favour, due to non-appearance of Goyal MG Gases Private Limited (“Respondent/ Judgement Debtor”). Consequently, the Appellant issued a winding up notice to the Respondent. The Respondent objected to the Order on the grounds that it was a default decree. Thereafter, in order to cure the default, the Order was set aside and the matter was heard on merits and a money decree vide Judgement and Decree dated 7 February 2006 (“7 February Decree”) was passed in favour of the Appellant for a principal sum of US $5,824,564.74. No appeal has been filed by Respondent.

The Appellant, thereafter, filed an execution petition before the High Court of Delhi on 27 April 2006 seeking enforcement and execution of the foreign order i.e. Judgement and Decree dated 7February. It was noted that United Kingdom was notified as s superior court of a reciprocating territory under Section 44A of the Code vide Notification No. SRO 399 dated 1March 1953.

The Appellant filed a petition for execution of money decree before High Court of Delhi, and as on 20 January 2022, the decretal amount, at face value, is approximately Rs. 99 crores. The Respondent raised an objection that the High Court of Delhi had no jurisdiction to entertain the execution petition in view of Section 44A of the Code. The Single Judge, however, overruled the preliminary objections of the Respondent and taking value of the execution of the 7 February Decree of the English Court exceeding Rs. 20 lakhs, decided the execution petition by a Judgment dated 29November 2013.

On appeal, the Division Bench of the High Court of  Delhi, vide Judgement dated 1 July 2014, arrived at the conclusion that Section 44A of the Code is an independent right conferred on a foreign decree-holder for enforcement of its decree in India. The Division Bench in essence observed that  “it is a fresh cause of action and has no correlation with jurisdictional issues. The scheme of Section 44A of the Code is alien to the scheme of domestic execution as provided under Section 39(3) [of the Code] and finally held that the High Court of Delhi, not being a District Court, in terms of Section 44A, is not vested with the jurisdiction to entertain [the] execution petition and directed it to be transferred to the Court of District Judge within whose jurisdiction the property sought to be attached is situated for being dealt with in accordance with law”. This present appeal challenged the Judgment dated 1 July 2014 of the Division Bench of the High Court of Delhi.

The Supreme Court’s findings

After considering the submissions of both parties, the Supreme Court observed that the decree of the High Court of England would be considered to be a decree of superior court of a reciprocating territory, as the 7 February Decree had been passed by the notified superior court of the reciprocating territory, namely, United Kingdom of Great Britain and Northern Ireland within the meaning of Section 44A of the Code vide Notification No. SRO 399 dated 1 March 1953 issued by the Ministry of Law.

“The expression ‘District” is defined under Section 2(4) of the Code and the term “District Court” referred under Section 44A of the Code, refers to the local limits of the jurisdiction of a principal civil Court of original jurisdiction and it includes the local limits of the ordinary original civil jurisdiction of a High Court and it is not disputed that Principal Civil Court of original jurisdiction is normally a District Court and the High Courts in India exercising ordinary original civil jurisdiction are not too many, but where there is a split jurisdiction based on its pecuniary value, notified from time to time, the District Court or the High Court in its ordinary original civil jurisdiction is competent to exercise power for execution of decree, including money decree of the foreign Court of reciprocating jurisdiction, provided other conditions are complied with as contemplated under Section 44A of the Code”, added the Supreme Court.

The Supreme Court further observed that once the pecuniary value exceeds what is prescribed under the relevant statute, the High Court of Delhi holds exclusive jurisdiction as a Court of ordinary original civil jurisdiction for execution of a foreign decree under Section 44A of the Code subject to the just objections which are available to the parties/Judgment Debtor as envisaged under Section 13 of the Code.

Therefore, the Supreme Court set aside the Judgement dated 1 July 2014 passed by the Division Bench of the High Court of Delhi and restored the matter to the file of the Division Bench of the High Court of Delhi to decide on merits. The Supreme Court observing that the present being an old matter where the foreign decree could not have been executed for almost 16 years by this time, directed that the matter be taken up on priority and be decided within 4 months.

Comment

The decree of the High Court of England would be considered to be a decree of a superior court of a reciprocating territory, within the meaning of Section 44A of the Code and subject to its pecuniary jurisdiction, the High Court of Delhi holds exclusive jurisdiction as a Court of ordinary original civil jurisdiction for execution of a foreign decree under Section 44A of the Code.

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