New Delhi: It took 16 years for two courts — the Delhi High Court and the Supreme Court — together to decide which forum, the HC or the district court, has the jurisdiction to execute a money decree issued by a foreign court of a reciprocating territory. In a case involving a German and an Indian company, the SC decided that the Delhi HC has the said jurisdiction.
Under the Code of Civil Procedure (CPC), a money decree is an order for the payment of money, including that as the alternative to some other relief. Under Section 44A of the CPC a ‘reciprocating territory’ is any country or territory outside India so specified, and orders passed by designated courts in these countries can be enforced in India.
Such was the inordinate delay in the current case that even the apex court bench, which recently adjudicated the dispute, could not refrain from commenting on it.
For the petitioner — German company Messer Griesheim GmbH (now called Air Liquide Deutschland GmbH — “still the screen is smoky”, lamented the SC in its 28 January verdict that declared that the Delhi High Court is the appropriate forum to hear the firm’s petition to execute a February 2006 foreign money decree in its favour and against an Indian company, Goyal MG Gases Private Limited.
“Instant case is the live illustration before us where the decree holder was able to get a money decree of a foreign court, which is notified as a superior court for a reciprocating territory way back on 7 February, 2006, and after 16 years have been rolled by still the screen is smoky and not clear as to which is the forum where he could approach for execution of a decree,” noted a bench led by Justice Ajay Rastogi in the judgment.
The SC disposed of the matter in three hearings held in January this year, more than seven years after the case came up before it.
‘Difficulties start with decrees’
The two companies will now have to go back to the Delhi HC and argue the matter on merits before a division bench. According to the German company’s submissions to the SC, the decretal amount (the amount decided in the decree), including the interest component, may come to approximately Rs 99 crore.
Since the 2006 decree remained unexecuted due to the litigation on a technical issue of jurisdiction, the SC has asked the HC to decide the matter within four months.
“It is an old saying that the difficulties of a litigant in India begin when he has obtained a decree. The evil was noticed as far back in 1872 by the Privy Council in relation to the difficulties faced by the decree holders in execution of the decree,” observed the SC judgement.
After more than a century, there has been no improvement, as the decree holder faces the same problem that was being faced in the past, it further said.
The case in England
The litigation journey for the German company commenced in January 2003 before the High Court of England, where it instituted proceedings against Goyal MG Gases Private Limited to recover the money it paid to a bank in London after the Indian firm defaulted in loan repayment.
As a 49 per cent stake holder in the Indian company, Messers Griesheim was a guarantor in a loan agreement between Goyal MG Gases and the bank.
Goyal MG Gases never appeared in the case, which led to an adverse order on 6 February, 2003.
But, when a demand notice was sent to Goyal MG Gases, it said it was unenforceable because the judgment was delivered in its absence.
In July 2005, Messer Griesheim applied to the England HC again, with a request to decide the dispute on merits. Strangely, this time Goyal MG Gases asked the HC not to set aside the earlier decree, but at the same time said it was unwilling to comply with it.
After an extensive hearing, the HC on 7 February, 2006 granted a money decree for a principal sum of US $5,824,564.74 in the German company’s favour. An annual interest of eight per cent from the date of judgment till payment was also ordered. No appeal was filed against this order, which means the decree attained finality.
Long-drawn litigation in India
Now, to get this decree executed, Messer Griesheim approached the Delhi HC in April 2006, which was opposed by Goyal MG Gases on 17 January, 2007. And, from here onwards began the taxing part of the litigation.
Nearly a year thereafter, Goyal MG Gases questioned the England HC’s jurisdiction to pass the decree. Arguments were advanced on this pleading and the matter remained partially heard.
But, a year later, in August 2009, Goyal MG Gases raised a fresh preliminary opposition on a technical ground and said the Delhi HC had no jurisdiction to hear the case.
It said the decretal amount exceeded Rs 20 lakh, which was the pecuniary limits of the Delhi HC at that time to hear civil suits and, therefore, the district court was the appropriate forum to hear the execution petition.
The HC dismissed Goyal MG Gases’ objections on 29 November, 2013 and directed it to deposit original title deeds of its property in Sahibabad.
However, the Indian firm petitioned against the judgment before a division bench of the HC, which on 1 July, 2014, overruled the single judge’s order. Confining itself to the jurisdiction issue, the HC held the district judge within whose jurisdiction the Indian firm’s property sought to be attached is situated, shall be empowered to entertain the execution petition.
Appeal before Supreme Court
Messer Griesheim GmbH questioned this finding before the SC, which in September 2014 issued notice on the appeal. Thus, began the saga of multiple hearings and adjournments.
In the next nine months, till July 2015, the case kept getting adjourned to give time to parties to file their written documents in the court.
As per 21 July, 2015 order, the case was to be heard after four weeks. However, the record of case proceedings uploaded on the SC portal shows the next hearing happened only a year later, on 4 July, 2016.
No hearing took place on that day and even on the following dates — 28 September, 18 October and 25 October.
On 22 November, 2016, the Indian firm’s counsel took time because he was unwell.
Interestingly, the petitioner’s counsel also asked the court to post the matter on 6 December, 2016 because, according to his arguing counsel, it was an “auspicious day” to commence the hearing. But the case never got listed on that day.
Later, between 3 March, 2017 and 23 October, 2018 the matter was taken up nine times and adjourned. It was then heard on 6 May, 2021, but deferred to 8 June, 2021.
After three more postponements — 29 September, 15 November and 25 November — the SC finally heard the parties at length on 11 January, 2022 and wrapped up the case in the next two dates.
(Edited by Saikat Niyogi)
Source: The Print