TaxTMI 
TaxTMI 
2022 (2) TMI 1399
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....er in whose favor the decree dated 9.11.2017 is passed by the High Court of Justice, Queen's Bench Division of England and Wales - the Commercial Court, for a sum equivalent USD 42,59,395/- with interest. 3. The facts in the background stated in the nutshell are that the petitioner had executed irrecoverable personal guarantee on behalf of the Gujarat NRE Coke Limited. Since the said company failed to pay the dues, the suit came to be instituted by the respondent in English Commercial Court, resulting into decree as aforesaid. It is under Section 44A of the Code of Civil Procedure, 1908 (CPC) that the said decree is presented for execution before the Commercial Court at Jamnagar as the decree of reciprocating territory. 3.1 It may be stated that the execution proceedings were previously initiated before the Commercial Court, Rajkot being Execution Petition No.4 of 2018, which came to be transferred at Jamnagar and renumbered as Execution Application No.161 of 2019. It is relevant to state that before the Rajkot Commercial Court also application Exhibit 19 was filed seeking similar declaration that the Commercial Court did not have the jurisdiction to execute the decree. The praye....
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....decree, nor such powers can be read in the provisions of the Commercial Courts Act, 2015. 4.3 It was submitted with reference to the observations in Kerala Housing Board vs. K. A. Nagamani (2019) 6 SCC 429, which was in the context of enforcement of orders of the District Consumer Forum, State Consumer Commission or the National Consumer Commission that the executing proceedings is materially different from the nature of proceedings for adjudication of consumer complaint and that the execution proceedings are independent proceedings. It was sought to be submitted also that the trial court was not justified in relying on the decisions of this court in OCI Corporation vs. Kandala Export Corporation and others [(2017) GLH 383]. 4.4 A further argument is raised that the Commercial Court at England did not have the jurisdiction to entertain the suit of the respondent, since the dispute between the decree-holder and judgment-debtor was not 'Commercial Claim'. It was so submitted putting forward that instrument on which the claim of the decree-holder before the Commercial Court of the Queen's Bench Division was based, was in the nature of 'on demand bond' and not the 'personal guarantee....
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....the alleged personal guarantee did not make the dispute fall in any of the categories to attract the definition of the 'Commercial Dispute' under Section 2(1)(c) of the Commercial Courts Act. The ground was also canvassed that the application could not be said to be arising out of the proceedings of Commercial Court as the dispute before the English Court was also not 'commercial claim' hence the jurisdiction of Commercial Courts under Section 6 of the Commercial Courts Act 2015, will not have any play. 5.1 The aforesaid ground that the dispute is not commercial dispute within the meaning of the definition of the Act, 2015, was not only rejected but the Division Bench of this Court while dismissing the petition involving challenge to the rejection of the application Exhibit 19, the court answered the aspect observing that the liability of the petitioner was based on the maritime claim which was a commercial dispute and the personal guarantee which has been given by the petitioner raised a commercial dispute, which arose before and was tried by the English Court. The Division Bench thereafter recorded the following findings, (Para 12) "It clearly appears from the record that the ....
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....fficient and dispute resolution mechanism in respect of the commercial dispute which was viewed as an object for legislating the Commercial Courts Act. It was inter alia stated that, "Quick enforcement of contracts, easy recovery of monetary claims and award of just compensation for damages suffered are absolutely critical to encourage investment and economic activity, which necessarily involves the taking of financial and enforcement risks. A stable, certain and efficient dispute resolution mechanism is therefore essential to the economic development of any nation." 5.4 This object would also buttress the interpretation that the power to enforce the decrees cannot be viewed to be diverse from jurisdiction of commercial courts. 5.5 In Delhi Chemical and Pharmaceutical Works Private Limited and Another Vs. Himgiri Realtors Private Limited and Another, reasoned succinctly by observing, (Para 37) "Supreme Court also recently in Rahul S. Shah Vs. Jinendra Kumar Gandhi 2021 SCC OnLine SC 341 has lamented on the troubles of the decree holder, in not being able to enjoy the fruits of litigation on account of inordinate delay caused during the process of execution of the decree and h....
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.... of the Arbitration and Conciliation Act, 1996 shall be filed in and heard, decided and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such commercial court has been constituted." 6.2 In Vadodara Mahanagar Seva Sadan formally known as Municipal Corporation Vs. M. S. Khurana Engineering Limited, being Special Civil Application No.13736 of 2018, the petitioner Corporation had challenged order of the Commercial Court in relation to the award of the arbitrator for which the execution petition was filed before the Commercial Court. The contention was raised on behalf of the petitioner that though the application for setting aside the arbitral award may be pending before the Commercial Court, the execution petition of the contractor would not be competent as it was for the amount below Rs.1 Crore. 6.2.1 The Division Bench stated and observed, "Section 37 of the CPC pertains to definition of Court which passed a decree and provides that the expression "Court which passed a decree", or words to that effect, shall, in relation to the execution of decrees, unless there is anything repugnant in the subject or context, be deemed to inclu....
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....tituted in the High Court. It is not in dispute that the subject matter of the arbitration, award whereof is under execution, was of the specified value." 6.3.1 It was the contention canvassed before the Delhi High Court on behalf of the judgment-debtor that the jurisdiction of the Commercial Courts or Commercial Divisions is only over suits or arbitrations, subject matter whereof qualifies as a commercial dispute and not over proceedings of decrees passed in the said suits over enforcement of awards passed in the arbitrations. The Delhi High Court stated, (Para 33) "Section 2(1)(i) of the Commercial Courts Act defines "Specified Value" in relation to a commercial dispute, as the value of a subject matter in respect of a suit as determined in accordance with Section 12. Reference therein is thus expressly to a "suit", as distinct from an "execution". Section 12 however refers to the specified value of the subject matter of the commercial dispute in a suit, appeal or application. Thereby, the ambit of specified value is increased, from that in Section 2(1)(i), with reference to a "suit" alone, to an appeal or an application also. Finally, Sections 6 and 7, while prescribing the j....
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.... applications for execution of arbitral awards of a specified value, subject matter whereof was a commercial dispute." 6.3.4 We fully concur with the reasons and decision of the Delhi High Court. 6.4 Coming to the facts of the present case, it is the decree of English Court, the reciprocating territory, is being executed under Section 44A, CPC. This provision in the CPC, 1908, provides for Execution of decrees passed by the Courts in reciprocating territory. It provides that certified copy of a decree of any superior Courts of any reciprocating territory is filed in the district court, the decree may be executed as if it has been passed by the district court. Sub section (2) of Section 44A provides for filing of certified copy regarding satisfaction of decree to the extent of such satisfaction or adjustments. Sub section (3) says that as per the provisions of Section 47 shall as from filing of the certified copy of the decree apply to the proceedings of a district court for executing a decree under this Section. The execution can be refused if it is shown that the decree falls within any of the exception in Section 13. 6.4.1 At this stage, it may be stated that Section 13, CPC p....
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....inues to exists. In the execution proceedings initiated to execute the decree of the commercial court, the characteristics of the 'commercial dispute' is not lost, rather the dispute continues in the same nature, that is the 'commercial dispute'. 6.7 The jurisdiction of the commercial court under Section 6 of the Commercial Courts Act extend to try all suits and applications relating to commercial dispute of specified value. The word 'specified value' has been defined under Section 2(i) of the Commercial Courts Act. The word 'applications' under Section 6 would include execution applications and also proceedings relating to commercial dispute of specified value. The jurisdiction of the commercial court therefore necessarily extends to the execution application arising from the judgment and decree of the commercial court. 6.8 There remains hardly any substance in the submission that since the provisions relating to execution were not amended while amending certain provisions of CPC as per the Section 16 of the Commercial Courts Act, the commercial court does not have the jurisdiction to try and decide the execution petitions. Merely because there is no amendment in relation to the....