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REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10106 OF 2016 ARISING OUT OF

SPECIAL LEAVE PETITION (CIVIL) NO. 19791 OF 2013

M/S ALCON ELECTRONICS PVT. LTD.                       ...APPELLANT

VERSUS

CELEM S.A. OF FOS 34320 ROUJAN, FRANCE & ANR. ..RESPONDENTS

JUDGMENT

N.V. RAMANA, J.

1. In this appeal by special leave, the appellant—judgment debtor assails

the impugned judgment dated 8th April, 2013 passed by the High Court

of Bombay in Civil Revision Application No. 680 of 2011, whereby the

High Court has dismissed the application filed by the appellant seeking

declaration  that  the  Judgment  and  Order  dated  19th October,  2006

passed by the High Court of Justice, Chancery Division, Patents Court,

England (hereinafter referred to as ‘the English Court’) is not executable

before the District Court at Nasik, by confirming the order dated 15th

April, 2011 passed by the District Judge-2, Nasik.

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2. The facts in nutshell are that the respondents herein filed a Suit against

the appellant before the English Court for infringement of patent vested

in  the  respondents  besides  other  reliefs.  In  the  said  suit,  the

appellant-defendant filed an application challenging the jurisdiction of

the English Court. In that application, the reliefs sought by the appellant

include the relief that the respondents—original claimants  have to pay

the  costs  to  the  appellant  occasioned  by  filing  the  application  to  be

summarily assessed. The English Court by its Order dated 19th October,

2006 dismissed the claim of the appellant and further directed it to pay

the  costs  of  application to  the respondents—original  claimants  set  at

£ 12,229.75. Thereafter it appears that the appellant agreed to pay the

costs and sought for some time. When the respondents filed a petition

for execution in India, the appellant opposed it in an application on the

ground that the order of English Court is not executable. The executing

Court  dismissed  the  same  which  was  confirmed  by  the  High  Court.

Hence the appellant is before us by way of this appeal.

3. The appellant made following submissions assailing the Judgment of the

Courts below-

a. An interlocutory Order of English Court with respect to its own

jurisdiction (with or without a direction for payment of costs) does

not amount to a judgment ‘on merits of the case’ and is therefore

not  conclusive  under  Section 13(b)  of  the  Civil  Procedure  Code

(CPC for short).

b. In the alternative, the Order of the English Court in the present

case does not amount to ‘decree’ under Explanation 2 to Section

44A of the CPC.

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c. Without prejudice to the aforesaid,  the part  of  the order  of  the

English Court relating to the payment of interest on costs should

not  be executed in view of  the deletion of  the erstwhile Section

35(3) of the CPC.

4. The Respondents have responded in the following manner. The decree

passed by the English Court is very much a decree on merits as the

English Court has not only given a detailed Judgment on merits of the

matter  but  also  considered  the  entire  evidence  as  produced  by  the

parties  including  oral  evidence  by  way  of  witness  statements,

documentary  evidence  produced  by  the  parties  and  the  application

challenging the jurisdiction of the English Court has been decided finally

on merits of the case put forth by the defendants. Nothing further was

required to be done insofar as consideration of the application of the

appellant challenging the jurisdiction of the English Court is concerned.

5. It is submitted that Explanation-II to Section 44A is concerned, the same

does not refer to costs which are defined under Section 35 of the CPC.

The costs having been quantified have assumed the character of a money

decree for costs which cannot be equated, either with a fines or penalty

which is imposed on a party by the Court or taxes payable to a local

authority or to a Government or other charges of like nature. It is the

submission of the respondent that the legislative intent was to keep out

of the purview of Section 44A the execution of the foreign decree if it

related to payment of either taxes or charges of a like nature or a fine or

penalty. Even an arbitration award has been excluded. At best it could

be argued that compensatory costs in respect of false or vexatious claims

which have been defined under Section 35A could be excluded.

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6. It  is  further submitted that  Section 13,  CPC specifically  excludes the

execution of such decrees which are mentioned under Clauses (a) to (f)

thereof and this Section does not mention decrees for the costs.

7. Furthermore  they  respond  that  the  Judgments  Act,  1838  of  United

Kingdom, as amended in 1993, provides that every judgment debt shall

carry interest @ 8%. The rules framed in U.K. provide for interest to run

from the  date  the  Judgment  is  given.  The  rules  also  provide  that  a

judgment or order takes effect from the day when it is given on merits or

such dates as Court may specify. The Rules further provide that a party

must comply with a judgment or order for the Payment of an amount of

money (including costs) within 14 days of the date of Judgment or order

unless the judgment or order specifies a different date for compliance or

any of the rule specify a different date for compliance or the Court has

stayed the proceedings or execution.

8. Moreover,  all  the  Orders  of  the  Court  are required to  be obeyed and

implemented, unless the Court itself sets a date for its non-execution.

Otherwise orders will only remain a piece of paper and merely decorate

the file of litigant, which would lead to an impression being created in

the minds of the litigants that they could with impunity avoid to obey the

Court  Order.  It  is  neither  the  legislative  intent  nor  the  desire  of  the

Judiciary.

9. Legislative intent of  executing Orders relating to payments of costs is

clear from amendment carried out to section 36, CPC to clarify that the

provisions  relating  to  execution  of  decree  or  order  include  payment

under a decree or order as well.

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10. We have heard the learned counsel on either side at length and perused  

the record. The following issues fall for our consideration:

(1) Whether the order passed by the Foreign Court falls within the

Exceptions to Section 13 of the CPC?

(2) Whether  the  order  passed  by  the  Foreign  Court  amounts  to  a

“decree” and the same is executable?

(3) If answer to issue No. 2 is in affirmative, whether the decree for

costs would fall within the ambit of Explanation 2 of Section   44A

(3) of CPC and makes it inexecutable?

(4) Whether  interest  on  costs  would  fall  within  the  ambit  of

Explanation 2 of Section 44A of CPC?

(5) Whether the interest on costs can be executed in India in view of

deletion of Section 35(3) of CPC?

11. In re Issue No. 1 — Admittedly the English Court passed an order dated

19th October, 2006 dismissing the application passed by the appellant

questioning the jurisdiction of the Court. The appellant itself at the time

of filing the application has prayed the Court to summarily assess the

costs to be paid to him in the event of his application being allowed. Both

the  appellant—defendant  as  well  the  respondents—claimants

participated in the proceedings by adducing their respective oral as well

as documentary evidence. Skelton arguments on behalf of both parties

were filed before Court. The appellant herein has filed schedule of costs

at £ 25,406.30. Then the English Court has passed a detailed order on

19th October, 2006 on the question of jurisdiction holding that it  has

jurisdiction to entertain the Suit and also directed the defendants to pay

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the costs of the application which was summarily assessed at a sum of

£ 12,429.75.

12. It appears that the appellant herein has accepted the order and sought

for time to pay the costs. Moreover, it did not choose to approach the

appellate Court assailing the order and the same has attained finality. In

spite  of  the  same,  the  appellant  filed  the  application  opposing  the

execution  petition  filed  by  the  respondents.  The  first  and  foremost

ground of attack against the order passed by the English Court is that

the order is not conclusive as per Section 13(b), CPC. Such argument

appears to be attractive but we are not able to appreciate the same in the

facts  and circumstances of  the case.  Before we proceed further,  it  is

appropriate to have a look at Sections 13 and 14 of CPC which read as

under:

Section  13.  When  foreign  judgment  not  conclusive  :  A foreign  judgment  shall  be  conclusive  as  to  any  matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except—

(a) where  it  has  not  been  pronounced  by  a  Court  of competent jurisdiction;

(b) where it has not been given on the merits of the case;  

(c) where it appears on the face of the proceedings to be founded  on  an  incorrect  view  of  international  law  or  a refusal to recognise the law of India in cases in which such law is applicable;

(d) where  the  proceedings  in  which  the  judgment  was obtained are opposed to natural justice;

 (e) where it has been obtained by fraud;  

(f) where it sustains a claim founded on a breach of any  law in force in India.

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Section 14. Presumption as to foreign judgments: The Court shall  presume  upon  the  production  of  any  document purporting to be a certified copy of a foreign judgment that such judgment  was pronounced by  a  Court  of  competent jurisdiction, unless the contrary appears on the record; but such  presumption  may  be  displaced  by  proving  want  of jurisdiction.

13.  A plain reading of Section 13, CPC would show that to be conclusive an

order or decree must have been obtained after following the due judicial

process by giving reasonable notice and opportunity to all the proper and

necessary parties to put forth their case. When once these requirements

are fulfilled, the executing Court cannot enquire into the validity, legality

or otherwise of the judgment.

14.  A glance on the enforcement of the foreign judgment, the position at

common law is very clear that a foreign judgment which has become

final and conclusive between the parties is not impeachable either on

facts  or  law except  on limited grounds enunciated under  Section 13,

CPC. In construing Section 13, CPC we have to look at the plain meaning

of the words and expressions used therein and need not look at any

other factors. Further, under Section 14, CPC there is a presumption

that the Foreign Court which passed the order is a Court of competent

jurisdiction which of course is a rebuttable presumption. In the present

case, the appellant does not dispute the jurisdiction of the English Court

but its  grievance is,  it  is  not  executable on other  grounds which are

canvassed before us.

15. The appellant contends that the order of the English Court is not given

on merits and that it falls under Section 13(c) of the CPC as a result of

which it is not conclusive and therefore inexecutable. We cannot accept

such submission. A judgment can be considered as a judgment passed

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on merits  when the Court  deciding the case gives opportunity to  the

parties to the case to put forth their case and after considering the rival

submissions, gives its decision in the form of an order or judgment, it is

certainly an order on merits of the case in the context of interpretation of

Section 13(c) of the CPC.

16. Applying the same analogy to the facts of the case on hand, we have no

hesitation to hold that the order passed by the English Court is an order

on merits. The appellant who has submitted itself to the jurisdiction of

the  Court  and  on  its  own  requested  the  Court  to  assess  the  costs

summarily. While passing a reasoned order by dismissing the application

filed  by  the  appellant,  English  Court  granted  the  costs  against  the

appellant.  Had  it  been  the  case  where  appellant’s  application  was

allowed  and  costs  were  awarded  to  it,  it  would  have  as  well  filed  a

petition for the execution of the order. Be that as it is, the appellant did

not  prefer  any  appeal  and indeed sought  time to  pay  the  costs.  The

appellant,  therefore,  cannot  be  permitted  to  object  the  execution.  It

cannot  be  permitted  to  blow  hot  and cold  at  the  same time.  In  our

opinion, it is a pure abuse of process of law and the Courts should be

very cautious in entertaining such petitions.

17. In  International  Woollen  Mills v.  Standard  Wool  (UK)  Ltd.1,  this

Court observed :

“...Even where the defendant chooses to remain ex parte and to keep out, it is possible for the plaintiff to adduce evidence in  support  of  his  claim  (and  such  evidence  is  generally insisted on by the Courts in India), so that the Court may give  a decision on the merits  of  his  case  after  a  due consideration  of  such  evidence  instead  of  dispensing with such consideration and giving a decree merely on

1   AIR 2001 SC 2134

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account of the default of appearance of the defendant.

In  the  former  case  the  judgment  will  be  one  on  the merits of the case, while in the latter the judgment will be one not on the merits of the case. Thus it is obvious that the non-appearance of the defendant will not by itself determine the nature of the judgment one way or the other. That appears to be the reason why Section 13 does not refer to ex parte judgments falling under a separate category by themselves...”

18. The principles of  comity of  nation demand us to respect the order of

English Court. Even in regard to an interlocutory order, Indian Courts

have to give due weight to such order unless it falls under any of the

exceptions under Section 13 of the CPC. Hence we feel that the order in

the present case passed by the English Court does not fall under any of

the exceptions to Section 13 of the CPC and it is a conclusive one. The

contention  of  the  appellant  that  the  order  is  the  one  not  on  merits

deserves  no  consideration  and  therefore  liable  to  be  rejected.

Accordingly, Issue No. 1 is answered.

19. In re Issue No. 2 — The next ground put forth by the appellant is that

the order being an interlocutory order does not have the shades of a

‘judgment’ to be executed before the Indian Court and hence the order

not being a ‘decree’ is in executable. To appreciate this, it is appropriate

to have a look at Section 44A of CPC  

44A. Execution of decrees passed by Courts in  reciprocating territory—   (1) Where a certified copy of 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.

(2) Together with the certified copy of  the decree shall  be filed a certificate from such superior Court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of

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proceedings  under  this  section,  be  conclusive  proof  of the extent of such satisfaction or adjustment.

(3) The provisions of section 47 shall as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in clauses (a) to (f) of section 13.

Explanation  1—  "Reciprocating  territory"  means  any country  or  territory  outside  India  which  the  Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and "superior Courts", with reference to any such territory, means such Courts as may be specified in the said notification.

Explanation 2.— "Decree" with reference to a superior Court  means  any  decree  or  judgment  of  such  Court under  which a sum of  money is  payable,  not  being a sum payable in respect of taxes or other charges of a like nature or in respect to a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment.

20.  As far as the explanation with regard to reciprocal territory is concerned,

there  is  no  dispute  that  England  is  a  reciprocating  territory  for  the

purpose of above Section. Section 44A of CPC indicates an independent

right  conferred  on  a  foreign  decree  holder  for  enforcement  of  a

Decree/Order in India. Section 44A was inserted by Section 2 of the Civil

Procedure Code (Amendment) Act, 1937 (Act No. 8 of 1937). This Section

is meant to give effect to the policy contained in the Foreign Judgments

(Reciprocal  Enforcement)  Act,  1933.  It  is  a  part  of  the  arrangement

under which on one part decrees of Indian Courts are made executable

in  United  Kingdom and  on  the  other  part,  decrees  of  Courts  in  the

United Kingdom and other notified parts of Her Majesty’s dominions are

made executable in India. It is to be seen that as United Kingdom is a

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reciprocating territory and the High Court of Justice, Chancery Division,

England being a recognized superior Court in England. Therefore, the

order passed by that Court is executable in India under Section 44A of

the CPC. Now we come to the next limb of the argument put forth by the

appellant that the order passed by the English Court does not amount to

a decree and hence it is not executable. It is no doubt correct, Section

44A  of  CPC  deals  with  “execution  of  decrees  passed  by  Courts  in

reciprocating  territory”.  Before  we  further  decide  this  issue  it  is

appropriate to have a look at how decree, order and foreign judgment are

defined under the CPC.

21. As per Section 2(2) of the CPC, "decree" means the formal expression of

an  adjudication  which,  so  far  as  regards  the  Court  expressing  it,

conclusively determines the rights of the parties with regard to all or any

of the matters in controversy in the suit and may be either preliminary

or final. It shall be deemed to include the rejection of a plaint and the

determination of any question within Section 144 of CPC but shall not

include (a) any adjudication from which an appeal lies as an appeal from

an order, or (b) any order of dismissal for default.

Then  a  “foreign  judgment”  is  defined  under  Section  2(6)  as

judgment of a foreign Court.  “Judgment” as per Section 2(9) of C.P.C.

means the statement given by the Judge on the grounds of a decree or

order.  Order  is  defined  under  Section  2(14)  of  CPC  as  a  formal

expression of any decision of the Civil Court which is not a ‘decree’. Then

Explanation  2  to  Section  44A  (3)  says  "decree"  with  reference  to  a

superior Court means any ‘decree’ or ‘judgment’. As per the plain reading

of the definition ‘Judgment’ means the statement given by the Judge on

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the grounds of decree or order and order is a formal expression of a

Court.  Thus  “decree”  includes  judgment  and  “judgment”  includes

“order”.  On conjoint reading of ‘decree’, ‘judgment’ and ‘order’ from any

angle, the order passed by the English Court falls within the definition of

‘Order’ and therefore, it is a judgment and thus becomes a “decree” as

per Explanation to Section 44A(3) of CPC.  In this case, the Court at

England, after following the principles of natural justice, by recording

reasons and very importantly basing on the application of the appellant

itself, has conclusively decided the    issue with regard to jurisdiction

and  passed  the  order  coupled  with  costs.  Hence  in  our  considered

opinion,  the order  passed by the  Foreign Court  is  conclusive in that

respect and on merits. Hence executable as a decree and accordingly the

issue is answered.

22. In re Issue Nos. 3 & 4 — The next  contention advanced is that the

decree for costs does not attract the Explanation II of Section 44A which

concerns itself with taxation or other charges of like nature or in respect

of  fine or  other penalty.  We have to first  see the nature of  the costs

imposed by the decree for interpreting the relevant explanation. Before

referring to the principles/guidelines in the decisions cited, it would be

apposite to advert to the concept of ‘costs’  and the general principles

governing the award of costs. Law Commission in its 240th Report on

“Costs on Civil Litigation” provides valuable resource on nature of costs

in India as well as England.

23. The ‘costs’ signifies the sum of money which the Court orders one party

to pay to another party in respect of the expenses of litigation incurred.

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Except  where  specifically  provided  by  the  statute  or  by  rules  of  the

Court, the costs of proceedings are in the Court’s discretion.

24.  In  Johnstone v.  The Law Society of Prince Edward Island  2,  the

Canadian Court of Appeal speaking through McQuaid, J described costs

in the following words :

“…  the sum of money which the court orders one party to pay  another  party  in  an  action  as  compensation  for  the expense of litigation incurred. The definition continues to the effect  that  costs  are  awarded  as  compensation  (i.e. reimbursement); there is, unlike damages, no restitution in integrum, that is to say, no concept in costs, as there exists in damages, that the injured person should be placed, in so far as money can do so, in the same position as he occupied before the injury was suffered”.

25.  Under  the  Federal  Rules  of  Civil  Proceeding  (USA),  “costs  shall  be

allowed as of course to the prevailing party unless the court otherwise

directs.” In most of the States in US, the attorney’s fee is not allowed as

litigation cost. Costs can even be on interim Application. A bill of costs is

a certified, itemized statement of the amount of the expenses incurred in

bringing  or  defending  a  law  suit/proceeding.  The  charges/expenses

claimed are taxed by the Court or its officer according to the procedural

rules and set of norms.

26.  The basis  of  assessment of  costs in UK has been explained thus in

Halsbury’s Laws of England:

“Where the court is to assess the amount of costs (whether by  summary  or  detailed  assessment)  it  will  assess  those costs on the standard basis or on the indemnity basis, but the court will not in either case allow costs which have been unreasonably  incurred  or  are  unreasonable  in  amount. Where the amount of costs is to be assessed on the standard basis, the court will only allow costs which are proportionate to the matters in issue and will resolve any doubt which it may have as to whether costs were reasonably incurred or

2  2 PEIR B-28 (1988)

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reasonable  and  proportionate  in  amount  in  favour  of  the paying party. Where the amount of costs is to be assessed on  the  indemnity  basis,  the  court  will  resolve  any  doubt which  it  may  have  as  to  whether  costs  were  reasonably incurred  or  were  reasonable  in  amount  in  favour  of  the receiving party. Where the court makes an order about costs without indicating the basis on which the costs are to be assessed, or makes an order for costs to be assessed on a basis other than the standard basis or the indemnity basis, the costs will be assessed on the standard basis.”  

27.  The Part  44 of  the Civil  Procedure Rules (CPR) in the USA contains

general  rules  about  costs  and  entitlement  to  costs.  The  rules  are

supplemented by practice direction. However, part 44 does not apply to

the assessment of costs to the extent different provisions exist, for eg,

Access to Justice Act, 1999 and the Legal Aid Act, 1988. Further, the

general rule that the unsuccessful party will be ordered to pay the costs

of the successful party unless the court makes a different order does not

apply to family proceedings.

28.  It is important to note that a penalty in this sense normally means a

sum payable to the State, not to a private claimant, so the costs imposed

on the basis  of  the indemnity is not  a penalty or  tax.  Therefore,  the

Explanation II to Section 44A does not refer to the costs as contemplated

under  Section 35 of  the CPC. The costs  having been quantified have

assumed  the  character  of  a  money  decree  for  costs  and  cannot  be

equated, either with a fine or penalty which is imposed on a party by the

Court  or  taxes  claimed  and  are  taxes  payable  to  a  local  authority,

Government, or other charges of a like nature.

29. The appellant has advanced an argument that as per Section 35A of the

CPC, no Court should pass any order for the payment of compensatory

costs  exceeding  Rs.3,000/-  or  exceeding  the  limits  of  its  pecuniary

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jurisdiction of the said Court whichever amount is less. It is thus argued

by the appellant that in the present case, since the costs imposed exceed

the bar imposed by Section 35A, therefore, the order of the English Court

is not executable in the present case.

30. This argument lacks merit and deserves to be rejected. A bare perusal of

Section 35A shows that bar operates on the Indian Courts with regard to

imposition of costs in respect of false or vexatious claims or defences.

The  bar  is  not  attracted  in  the  present  case  as  the  Court  that  has

ordered the costs is the High Court of Justice in England which is not

governed by the provisions of the CPC and that the respondent merely

approached the Indian Courts for  the satisfaction of a foreign decree.

Moreover, the nature of compensatory costs prescribed in Section 35A of

the CPC are different from ‘costs’ dealt with in Section 35 of the CPC as

the former are limited to the claims of  defences of a party which are

frivolous  or  vexatious.  It  is  settled  that  before  awarding  costs  under

Section 35A of the CPC, the Court should satisfy itself that the claim was

false or vexatious to the knowledge of the party who put it forward and

that  the  interests  of  justice  require  the  award of  such compensatory

costs. In the present case, no claim has been advanced by the appellant

that the claim filed by the respondents is false or vexatious, therefore,

the  bar  in  Section  35A  is  not  applicable.  Accordingly  the  issue  is

answered.

31. In re Issue No. 5 — It is the case of the appellant that the claim for

interest on costs is not recognized in the Indian law. It is to be noted that

matters of  procedure are to be governed by the  lex  fori, whereas the

matters of the substance are governed by  lex causae.  In this case, the

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question whether the interest on sum of decree of costs to be executed in

India is a matter of substance as the interest on decree is a substantive

right of the decree holder and does not concern itself with the procedural

law of the forum.

32. The appellant relied upon Section 35 of the CPC which enables Courts in

India to impose litigation costs at the discretion of the Court. However,

there is  no provision under the CPC or the Interest  Act,  1978 which

permits imposition of interest on litigation costs. Further tried to impress

upon that the amended Section 35(3) of the CPC permitted a Civil Court

to  grant  interest  on  costs.  The  unamended  Section  35(3)  stated  as

follows:

The  Court  may  give  interest  on  costs  at  any  rate  not exceeding six per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.

This Provision was consciously omitted in 1956 (pursuant to Act 66 of

1956). In view of the deletion of Section 35(3) of the CPC, it is argued

that grant of interest on costs is no longer recognized under India law.

33.  In this context, it is educative to read the following comments made in

the Debate on the Bill against the deletion of Section 35 (3), by Hon’ble

Member of Lok Sabha Shri Tek Chand;

“..In this connection, a reference has been made to section 35, sub-section (3), which according to clause 3 of the Bill, is to be omitted. Not that I have usurious propensities, but I do not like this provision. It is true that there should not be any profiteering  by  the  people;  I  concede  that,  but  there  are instances when the costs  amount  to  five  figures or  more, and there is no reason why, when an unsuccessful party is subjecting the successful party not only to a long dilatory and unending dispute, but also to frivolous and vexatious litigation whereby he is out of pocket to the tune of several thousands, the law or the legislature should be so solicitous that  such person should  not  pay interest,  if  he  does  not propose to pay or if he intends to delay the payment of the

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costs.  One  unfortunate  and  unhappy  feature  of administration of civil law in our land, is apart from delays and objections of frivolous and vexatious nature, justice is made available, if at all, at a very high and exorbitant price”.

34. The  Hon’ble  Member  of  Lok  Sabha  thus  articulated  that  omitting

sub-section (3) would encourage delay in realization of decree costs. A

reference to the Report of Law Commission and the views expressed in

Debate on the Bill, as extracted in the Law Commission Report (supra),

would indicate that the consequences of deletion of sub-section (3)  of

Section 35 were very much considered by the Parliament. When the idea

of deletion is not to encourage interest on costs as a source of income to

the litigants, the Parliament did not choose positively to prohibit interest

on costs by inserting suitable clause in Section 35.

35. It is to the reciprocal advantage of the Courts of all nations to enforce

foreign rights as far  as practicable.  To this  end,  broad recognition of

substantive  rights  should  not  be  defeated  by  some  vague  assumed

limitations of the Court. When substantive rights are so bound up in a

foreign  remedy,  the  refusal  to  adopt  the  remedy  would  substantially

deprive parties of their rights. The necessity of maintaining the foreign

rights outweighs the practical difficulties involved in applying the foreign

remedy. In India, although the interest on costs are not available due to

exclusion of Section 35(3), the same does not mean that Indian Courts

are powerless to execute the decree for interest on costs. Indian Courts

are very much entitled to address the issue for execution of the interest

amount. The right to 8% interest as per the Judgments Act, 1838 of UK

can be recognized and as well as implemented in India.

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36. Therefore, we are of the considered opinion that the Execution Petition

filed by the Respondents for execution of the order dated 19th October,

2006 passed by the English Court is maintainable under the relevant

provisions. Therefore, we do not find any reason to interfere with the

impugned order. Resultantly, the appeal is dismissed with costs.

                                                              ……………………………………J.

              (A.K. SIKRI)

NEW DELHI,        ……………………………………J. DECEMBER 09, 2016       (N.V. RAMANA)

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