Enforcement of Judgments 2023 Comparisons

Inspection of Public Records

Both public and private companies incorporated under the company laws applicable in India are required to file statutory reports which declare their financial statements, including annual returns, profit and loss statements, details of charges attached to any company asset and balance sheets which can be accessed from the records of the respective company from Ministry of Corporate Affairs. The web portal https://www.mca.gov.in/content/mca/global/en/home.html is accessible to the public to download all such information for a nominal fee.

The details of the immovable assets of a person can be retrieved from Land Revenue authorities in a specific district where such immovable property is located. 

In the event that an insolvency or bankruptcy proceeding has been initiated against a company, the details of proceedings initiated and the status of the proceedings can be accessed online on the portal of Insolvency and Bankruptcy Board of India: https://ibbi.gov.in/en.The services of an investigator or asset tracing agency can also be used.

Information regarding public records, including details of the assets of public officers, can be sought under the Right to Information Act, 2005 by any person.

Court Orders

Under Order XXI Rule 41(2) of the Code of Civil Procedure, 1908 (“CPC”), a court has the power to direct the judgment debtor to file an affidavit of the asset. However, such an affidavit of assets can only be directed upon an application having been filed on behalf of a decree-holder under Order XXI Rule 41(2) of the CPC. Such a direction cannot be passed suo motu by an executing court.

Additionally, Order XXXVIII Rule 5 of the CPC provides for attachment of property while the judicial proceedings are pending. The court can invoke this statute when there is a threat of disposal or removal of assets. 

Under Section 151 of the CPC, courts in their inherent power can issue Mareva injunctions on an application where there is a real risk of the defendant's assets being dissipated with an intention to make a judgment against the defendant void and unenforceable.

Judgments and decrees are crucial parts of the justice system. Under the CPC, the judgment is the final decision of the court based on the pleadings and evidence submitted by the parties involved in a case, and the decree is the formal expression of the judgment of the court that sets out the rights and obligations of each party involved in the case. In other words, a judgment is a decision of the court while a decree is a formal enforceable order of the court based on the decision. Execution proceedings can be initiated before the court or any other authority as per the provisions of the CPC to enforce the decree. A decree conclusively determines the rights of each party involved in the case and is binding upon them.

There are different types of judgments and decrees that can be passed by the court. The types of judgments are:

• Default judgment – a default judgment is issued when one party fails to appear in court or respond to a claim within the specified timeframe. The court may then decide the case in favour of the non-defaulting party based on the available evidence.
• Interlocutory judgment – an interlocutory judgment is issued in the course of a trial proceeding. It only deals with specific issues or points of law but does not determine the final outcome of the case.
• Summary judgment – a summary judgment is granted when the court determines that there are no genuine issues of material fact in dispute, and the case can be resolved based on the law and evidence presented. It is typically granted without a full trial.
• Final judgment – a final judgment determines the final outcome of the case and is given at the conclusion of the proceedings.

A decree can be preliminary, final or partial under the CPC. A preliminary decree is given when further proceedings are pending before the court. It decides the rights of the parties involved in a case but does not completely dispose of the suit. A final decree is passed after the preliminary decree and gives effect to the same. A partial decree decides some claims and leaves the other claims to be decided at the time the final decree is passed.

The other types of decrees are:

• Consent decree – a consent decree is passed after an agreement is reached by the parties involved in a dispute and presented to the court for approval. It becomes formal once the court accepts and enters it.
• Money decree – a money decree requires one party to pay a sum of money to the other party as compensation for losses or damage suffered.
• Declaratory decree – a declaratory decree declares the legal rights and obligations of parties involved in the case.
• Prohibitory decree – a prohibitory decree requires a party to refrain from doing a specific act.
• Ex-parte decree – an ex-parte decree is passed without notice or in the absence of the defending party at the instance of the other party.
• Mandatory decree – a mandatory decree requires a party to perform a specific action.

The process for enforcing or giving effect to the decree or judgment of the court is termed “execution”. It is a proceeding that mandates the judgment-debtor to give effect to the decree and enable the decree-holder to recover the costs granted to him by the said decree. 

Enforcement proceedings fall within the ambit of Sections 36 to 74 and Order 21 of the CPC. Under Section 38 of the CPC, a decree can be executed either by the court that passed it or by the court to which it is sent for execution. Common methods of enforcement include:

• by delivery of property that is specifically decreed (Section 51(a));
• by attachment and sale of the property (Sections 51(b) and 60-64);
• by sale of the property without attachment (Sections 51(b) and 65-67); or
• by appointing a receiver (Section 51(d)).

Arrest and detention for up to three months is also possible (Sections 51(c) and 55-59), but this is less common.

The procedure is simple and requires an application seeking execution to be filed before a competent court/authority with jurisdiction within 12 years from the date of the decree. It should necessarily contain information such as the name of the parties and the date of the decree. It is required to be in writing, duly signed and verified by the applicant specifying that the applicant is aware of the facts of the case.

During the course of execution proceedings, a decree-holder can also apply to the court to provide directions to the judgment debtor to disclose any assets and liabilities. If the execution petition is filed within two years from the date of the decree, notice is not mandatory. If the court feels that the issue of notice would defeat the purpose of the execution and cause delay, then a notice is not issued. Otherwise, notice is sent to the judgment debtor to show cause as to why the judgment should not be executed. 

An application for execution of a decree other than a decree for mandatory injunction can be filed within 12 years as per Article 136 of the Limitation Act. The limitation for execution of a decree for a mandatory injunction is three years as per Article 135 of the Limitation Act. There is no limitation to executing a decree for a permanent injunction. The period of limitation commences from the date when the decree becomes enforceable, but an exception has been made in respect of the decree for perpetual injunction for which there is no period of limitation, and it can be enforced at any time.

The execution proceedings will entail costs including court fees, advocate's fees, and other miscellaneous expenses which may be recoverable from the judgment debtor. The CPC does not set time limits for the execution of either domestic or foreign decrees. Execution proceedings could take anywhere between one month to several years from the date of filing the execution petition, depending on a number of factors including service of notice to the judgment debtor, the nature of the objections raised by the judgment debtor, the nature of interim relief sought, the caseload of the executing court, the quantum of costs and, most importantly, type of assets involved. However, in the case of Rahul S Shah v Jinendra Kumar Gandhi & Others, reported in (2021) 6 SCC 418, the court held that the executing court must dispose of the execution petitions within six months, from the date of filing, which may be extended only by recording reasons in writing for such delay.

Under Order XXI Rule 41(2) of the CPC, the court has the power to direct the judgment debtor to file an affidavit of assets. However, such an affidavit of assets can only be directed to be filed upon an application having been filed on behalf of the decree-holder under Order XXI Rule 41(2) of the CPC. Such a direction cannot be passed suo motu by the executing court. 

A defendant may challenge the enforcement of a judgment on the various following grounds in an appeal: 

• Lack of jurisdiction – The party challenging the enforcement may argue that the court that issued the judgment did not have the proper jurisdiction over the case or the parties involved. If the court lacked jurisdiction, the judgment may be unenforceable.
• Violation of due process – If the party against whom the judgment was issued was not given proper notice of the proceedings or did not have the opportunity to present its case, it may challenge the enforcement on the grounds of a violation of due process rights.
• Fraud or misrepresentation – If the judgment was obtained through fraud, misrepresentation, or by concealing material information, the affected party may seek to challenge its enforcement.
• Public policy – In some jurisdictions, a judgment that is contrary to the public policy of the enforcing country may be refused enforcement.
• Res judicata – The principle of res judicata prevents the same parties from relitigating the same issues already decided in a prior final judgment. If the judgment is based on issues that have already been conclusively decided in another court, it may not be enforceable.
• Error of fact or law – The judgment debtor can challenge the judgment by citing an error of fact or law. If the legal provisions applied by the court while making the judgment/decree have any error, defect or irregularity in any proceeding which affects the merits of the case, the same can be challenged in an appeal.

Additionally, while the appeal proceedings are pending, the party may seek a stay on the effect of the judgment as there is no automatic stay on the enforcement under Order 41, Rule 5(1), CPC. A specific stay must be obtained either from the court that granted the judgment, or an appellate court, and such a stay can be granted only on sufficient cause being shown. In some cases, the court may grant a stay of execution proceedings on terms such as the deposit of security (Order 21, Rule 29, CPC).

All types of judgments are enforceable in India. These include money judgments, summary judgments, ex-parte judgments, and default judgments. Subject to the judgment being conclusive (that is, not subject to any appeal/stay), there is no judgment that cannot be enforced.

The details of all judgments are available on the respective court’s official website. Certified copies of judgments can also be applied for and obtained from the court’s registry. 

A judgment-debtor cannot apply to remove or expunge a judgment from the registry once it has been satisfied. Instead, any judgment debtor who has satisfied a judgment debt should apply to the court for satisfaction to be recorded.

Pertinent legal issues which arise while enforcing a foreign judgment in an Indian jurisdiction are as follows:

• Reciprocity – Issues concerning enforcement of foreign judgement arise in respect to enforcement of foreign judgment where the country whose judgment is to be enforced in India is not specified under section 44A of the CPC as a reciprocating territory. As distinct from the practice in countries which are not declared as reciprocating territories, more simplified procedures apply to the enforcement of foreign judgments where a country has been declared to be a reciprocating territory under the said section. The requirement of reciprocity for the enforcement of foreign judgments by some countries means that they will only enforce judgments from countries that, in turn, enforce judgments from their own courts. 

• Jurisdictional issues – The test of conclusiveness of foreign judgment as provided under Section 13(a) of the CPC provides for one of the six exceptions to the conclusiveness of a foreign judgment that except when it has not been provided by a court of competent jurisdiction the foreign judgment shall be conclusive. This means that the enforcing court may examine whether the foreign court had jurisdiction over the case and the parties involved. If the foreign court lacks jurisdiction, the judgment may not be enforceable. See also “Lack of jurisdiction” in 2.5 Challenging Enforcement of Domestic Judgments for more guidance on this matter.

• Due process – This provides that a hearing is based on the rules and principles of equal opportunity and ensures that the resolution of legal matters is achieved on the basis of equity and the principle of audi alteram partem as a legal necessity. The enforcing court may review whether the foreign judgment was issued following proper due process, including whether the defendant was properly served with notice and had an opportunity to present their case and that the delivery of judgment was done on the basis of hearing the matter on the merits of the case. 
• In a recent pronouncement in the order in Transasia Private Capital Limited v Gaurav Dhawan, the ex-parte foreign judgement of the High Court of Justice Business and Property Courts of England and Wales Commercial Court (QBD) was recognised under the reciprocal arrangement. (The High Courts of England have been designated as “superior courts” by means of Notification No. F.-34-I/52-L dated 1 March 1953, passed by the Government of India in the exercise of the power conferred by Explanation 1 to Section 44A of the CPC). The judgment in a foreign court had proceeded on the basis that the judgment debtor stood duly served in accordance with the law applicable in the United Kingdom and the proper opportunity was provided to the judgment debtor. An ex-parte interim order was passed enjoining judgment the debtor's assets during the pendency of an execution petition in Delhi High Court, which was filed due to a reciprocal arrangement between the territories (the High Courts of England where the foreign judgment was passed and in the High Court of Delhi where the execution petition was being filed). The judgment debtor challenged the ex parte proceedings by way of a review petition and an appeal to challenge the interim order for an injunction, but the same was affirmed in favour of the petitioner in the present case. The judgment debtor’s objections to the execution petition on the ground that the foreign judgment was not conclusive under Section 13 of the CPC and was not considered. See also 2.5 Challenging Enforcement of Domestic Judgments.

• Public policy – It is to be stated that the enforcing court may refuse to enforce a foreign judgment if it violates the public policy of the jurisdiction where enforcement of the foreign judgment is sought. What constitutes a violation of public policy can vary from one country to another. See “Res judicata” in 2.5 Challenging Enforcement of Domestic Judgments.

• Contradiction with local judgments – The enforcing court may consider whether the foreign judgment contradicts a prior judgment on the same issue between the same parties in the local jurisdiction. In this regard, even res judicata plays a role, when there is a conflict in the judgment passed by a superior court of a foreign country and an earlier judgment of a competent court in a suit in India passed between the same parties. In such a case, enforcement of such judgment is not permitted in light of the applicability of the principle of res judicata defined under section 11 of the CPC: “No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court…”
• Compliance with international conventions – Where the countries involved are parties to international conventions or treaties related to the recognition and enforcement of foreign judgments, pertaining to those cases compliance with the treaty's requirements is crucial for enforcement of a foreign judgment.
• Limitations period – The enforcing court may examine whether the enforcement action is brought within the applicable limitations period in the local jurisdiction of the court enforcing such foreign judgment.
• Non-mutual recognition – It is quite possible that some countries may not recognise or enforce judgments from specific jurisdictions based on political or diplomatic reasons.

The jurisdiction’s approach to enforcement for different types of judgments is treated the same, regardless of the variety of judgments.

Foreign judgment is not enforced when not given on merits, opposed to natural justice, obtained by fraud, or in cases of default judgments, and if given on exceptions (a) to (f) mentioned under Section 13 of the CPC. In these circumstances, it is held to be unenforceable in India.

There is no formal process for recognition of a foreign judgment.

Reciprocating Territory

The decree holder must file an application for execution of the foreign judgment or decree in the competent Indian court. A certified copy of the decree and a certificate from the superior court of the foreign country stating the amount, if any, that has been satisfied under the decree must also be submitted. Following the application, the executing court will call on the judgment debtor to show cause against the execution of the decree. At this stage, the judgment debtor has the right to object to enforcement on the grounds that the judgment offends any of the conditions specified in Section 13 of the CPC.

The various stages in an execution proceeding instituted in India to enforce a decree under Section 44A of the CPC are stated as follows.

• Application for execution: The decree holder must file an application for execution of the decree before the competent court which shall be in writing, signed and verified by the applicant.
• Notice to show cause: The court will then issue notice to the person against whom execution is sought, requiring them to show cause as to why the decree should not be executed.
• No contest: If the person against whom the decree is to be executed does not appear or show cause as to why the decree should not be executed, the court will recognise and enforce the foreign decree as if it were a judgment of the Indian court and will allow the decree-holder to execute the judgment against the assets of the judgment debtor.
• The decree holder can apply to the court to provide directions to the judgment debtor, instructing them to disclose any assets and liabilities. If these assets are disclosed, the court will proceed with the attachment and sale of such assets to execute the decree in favour of the decree holder.

Non-reciprocating Territory

The judgment holder must file suit on the foreign judgment or decree with a limitation period. Only once the suit is allowed and decreed can it be executed as a domestic decree in terms of Order 21 of the Code of Civil Procedure, but it also has to pass the test laid down under Section 13 of the CPC.

If the foreign judgment or decree is not contested, the entire process may take about one to two years. If enforcement of the foreign judgment or decree is contested, it could take anywhere between two and three years. However, the time taken to enforce varies from one jurisdiction to another, depending on the complexity of the case and the workload of the court.

The defendant can challenge the recognition and enforcement of a foreign judgment by disputing that the judgment falls within the exceptions set out in Section 13 of the CPC. For instance, the defendant may object on the following grounds:

• the foreign judgment does not conform to public policy and is fraudulent;
• the foreign judgment was not issued by a court of competent jurisdiction;
• the foreign judgment is not based on the merits of the case;
• the foreign judgment was passed in contempt of Indian law or based on an incorrect view of international law;
• the foreign judgment contravenes the principles of natural justice or is in breach of any law in force in India; or
• the application is time-barred.

In India, arbitral awards are categorised as two main types based on the location of the arbitration and the parties involved: domestic arbitral awards and foreign arbitral awards.

Domestic Arbitral Awards

A domestic arbitral award is an award made in an arbitration that takes place within India. It involves disputes between parties that are both based in India or where the subject matter of the dispute is within India. The arbitration is governed by the provisions of the Arbitration and Conciliation Act, 1996 (ACA).

Enforcing domestic arbitral awards

Domestic arbitral awards are enforced under Part I of the ACA. After receiving the award, a party can apply to the appropriate court for the enforcement of the award. The court has the authority to pass a decree in terms of the award, making it legally binding and enforceable.

Foreign Arbitral Awards

A foreign arbitral award is an award made in an arbitration conducted outside India. It involves disputes where at least one of the parties is based in a country other than India or where the subject matter of the dispute is located outside India. Foreign arbitral awards can be further categorised based on whether the award falls under the New York Convention or the Geneva Convention.

Awards under the New York Convention

Awards falling under the New York Convention are awards made in the territory of a country that is a party to the New York Convention. India is a party to the New York Convention.

Awards under the Geneva Convention

Awards falling under the Geneva Convention are awards made in the territory of a country that is a party to the Geneva Convention. India is a party to the Geneva Convention.

Enforcing foreign arbitral awards

Foreign arbitral awards are enforced under Part II of the ACA. A party seeking to enforce a foreign arbitral award in India needs to file an application for enforcement before the appropriate court. The court will then determine whether the award meets the requirements for recognition and enforcement under the relevant convention and Indian law. If the court is satisfied, it will pass a decree, making the foreign award enforceable in India as if it were a domestic award.

India is a party to both the New York Convention and the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 (Geneva Convention). However, an award is only enforceable if it was made in the territory of another state that is identified by the Government of India in the Official Gazette as being bound by either convention.

Domestic and Foreign Arbitral Awards

Pertinent legal issues which are witnessed while enforcing an arbitral award in India, whether domestic or foreign can broadly be categorised in the following ways.

Award beyond the scope of reference

The reference of a dispute under an agreement defines the limits of the authority and jurisdiction of the arbitrator. If the arbitrator had assumed jurisdiction not possessed by him, the award to the extent to which it is beyond the arbitrator’s jurisdiction would be invalid and liable to be set aside.

Illegality of arbitral procedure

Failure to adhere to the established procedure or the procedure outlined in the relevant Act constitutes procedural misconduct. If the arbitral tribunal handles a matter that is evidently beyond its authorised scope, it would be considered misconduct by the arbitrator. A decision in which the arbitrator intentionally strays from the defined terms of reference and arbitration agreement will be seen as misconduct by the arbitrator.

Notice not given to parties

An award’s enforceability may be challenged if either of the parties did not get appropriate notice of the arbitrator’s appointment, arbitral procedure or was unable to present his case.

Award against public policy

Enforceability of an award which is against the public policy of India may be challenged.

Incapacity of parties

If one of the parties involved in the arbitration lacks the capacity to safeguard their own interests and is not represented by someone who can advocate on their behalf, the resulting award will not be legally binding on them and may be invalidated upon their request.

Patent Illegality of the Award

This condition only applies to domestic awards. If the award is suffering from patent illegality prima facie, such an award is not enforceable.

Approaches to enforcement of arbitral awards are the same, regardless of the different types of arbitral awards.

Domestic and foreign awards may be unenforceable if they:

• relate to subject matters that are not arbitrable under Indian law;
• affect the legal rights of third parties;
• are unreasoned; and/or
• pertain to in rem rights (eg, questions of insolvency).

In addition, domestic awards that are in conflict with the public policy of India may also be unenforceable.

The steps involved in enforcing an arbitral award in India are as follows.

• Obtaining a certified copy of the award: The party seeking enforcement must obtain a certified copy of the arbitral award from the arbitral tribunal.
• Filing the application for enforcement: The next step is to file an application for enforcement in the appropriate court. For domestic awards, the application is filed in the competent court where the arbitration took place. For foreign awards, the application is filed in the appropriate court where enforcement is sought (usually where the assets of the losing party are located).
• Providing supporting documents: Along with the application, the party seeking enforcement must submit the following documents –

1. the original or a certified copy of the arbitration agreement;
2. the original or a certified copy of the arbitral award; and
3. evidence proving that the award is either a domestic award or a foreign award under the ACA.
• Notice to the other party: The court will issue a notice to the other party against whom enforcement is sought. The other party will have an opportunity to respond to the application.
• Challenges to enforcement: The other party may raise objections or challenges to the enforcement of the award. The court will consider these objections and decide on the enforceability of the award.
• Examination of the award: The court will examine the award to ensure that it meets the requirements for enforcement under the Act. It will check for compliance with the formalities of the arbitration agreement and whether the award is in conflict with public policy.
• Enforcement order: If the court is satisfied that the award is enforceable, it will pass an enforcement order in favour of the party seeking enforcement. The award will then be treated as if it were a decree of the court.
• Enforcement as a decree: The winning party can now enforce the arbitral award as if it were a decree of the court. They can take appropriate steps to recover the awarded amount, such as attaching the losing party's assets or initiating execution proceedings.

There is no set procedure or timeline for decisions on the challenge; the actual time generally varies from six months to three years. The costs involved at each level are the attorneys’ fees and other legal expenses. Courts usually grant costs to the successful party; however, these costs are generally notional and not commensurate with the actual costs.

The grounds for challenging a domestic award are enumerated under section 34 of the Arbitration and Conciliation Act, 1996, while the grounds for challenging a foreign award are laid down under section 48 for awards arising out of the New York Convention, whereas awards arising from the Geneva Convention can be challenged under section 57 of the Act.

The following are the grounds for challenging the enforceability of an award which are common to all the sections mentioned above:

• The party against whom the award is invoked is not given proper notice of the arbitrator, or arbitral proceedings, or was otherwise able to present their case.
• The award deals with a difference not contemplated by, or not falling within, the terms of the submission to the arbitration, or contains decisions on matters beyond the scope of arbitration.
• The composition of the arbitration authority or the arbitration procedure was not in accordance with the agreement of the parties, or, absent any such agreement, was not in accordance with the law of the country where the arbitration took place.
• The subject matter of the dispute is not capable of settlement by arbitration under the law of India, or the enforcement of the award would be contrary to the public policy of India. An award conflicts with the public policy of India, only if, inter alia, (a) the making of the award was induced or affected by fraud or corruption, or (b) it is in contravention with the fundamental policy of Indian law, or (c) it is in conflict with the most basic notions of morality or justice. The second explanation to section 48(2) of the Act further clarifies that the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review of the merits of the dispute.

The following grounds for challenging the enforceability of an arbitral award are stipulated under Section 34 (for domestic awards) and under Section 48, but not under Section 57 of the Act:

• the parties to the agreement are under some incapacity; or
• the agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law in force for the time being.