Foreign Court Order Executable in India under Section 44A CPC. Costs Decree Enforceable, Interest Allowed.

The Court held that the order of the Foreign Court was conclusive and executable under Section 44A of the CPC. The decree for costs was deemed executable as it did not fall under the exclusions of Explanation 2 to Section 44A. Additionally, the interest on costs could be enforced in India despite the absence of a specific provision in Indian law. The appeal was dismissed, and costs were awarded against the appellant.

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Issues Involved:
1. Whether the order passed by the Foreign Court falls within the Exceptions to Section 13 of the CPCRs.
2. Whether the order passed by the Foreign Court amounts to a “decree” and the same is executableRs.
3. If the answer to issue No. 2 is in the affirmative, whether the decree for costs would fall within the ambit of Explanation 2 of Section 44A (3) of CPC and makes it inexecutableRs.
4. Whether interest on costs would fall within the ambit of Explanation 2 of Section 44A of CPCRs.
5. Whether the interest on costs can be executed in India in view of the deletion of Section 35(3) of CPCRs.

Issue-wise Detailed Analysis:

Issue No. 1: Whether the order passed by the Foreign Court falls within the Exceptions to Section 13 of the CPCRs.
The appellant argued that the order of the English Court is not conclusive under Section 13(b) of the CPC as it was not a judgment on the merits of the case. The Court held that the English Court's order dated 19th October 2006 was passed after giving both parties the opportunity to present their case, and it was a detailed order addressing the jurisdiction issue and awarding costs. The appellant had accepted the order and sought time to pay the costs without appealing it, which means the order attained finality. The Court concluded that the order was on merits and did not fall under any exceptions to Section 13 of the CPC, making it conclusive and executable.

Issue No. 2: Whether the order passed by the Foreign Court amounts to a “decree” and the same is executableRs.
The appellant contended that the order was interlocutory and did not constitute a 'decree'. The Court referred to Section 44A of the CPC, which allows for the execution of decrees from reciprocating territories like England. The definitions of 'decree', 'judgment', and 'order' under the CPC were examined, and it was concluded that the order passed by the English Court, which included a conclusive decision on jurisdiction and costs, qualifies as a 'decree' under Explanation 2 to Section 44A. Therefore, it is executable in India.

Issue Nos. 3 & 4: Whether the decree for costs would fall within the ambit of Explanation 2 of Section 44A (3) of CPC and makes it inexecutableRs.
The appellant argued that the decree for costs should be excluded under Explanation 2 of Section 44A, which pertains to taxes, fines, or penalties. The Court clarified that costs are not penalties or taxes but are compensation for litigation expenses. The Law Commission's 240th Report and various legal principles were cited to explain that costs are a reimbursement for litigation expenses and not punitive. Therefore, the decree for costs does not fall under the exclusions of Explanation 2 to Section 44A and is executable.

Issue No. 5: Whether the interest on costs can be executed in India in view of the deletion of Section 35(3) of CPCRs.
The appellant argued that interest on costs is not recognized under Indian law due to the deletion of Section 35(3) of the CPC. The Court noted that while Indian law does not currently provide for interest on costs, the substantive right to interest on costs as per the Judgments Act, 1838 of the UK should be recognized and enforced in India. The Court emphasized the principle of comity of nations and the necessity to enforce foreign rights, concluding that the execution of the interest on costs is maintainable.

Conclusion:
The Court held that the order of the English Court is conclusive and executable under Section 44A of the CPC. The decree for costs does not fall under the exclusions of Explanation 2 to Section 44A, and the interest on costs can be executed in India despite the deletion of Section 35(3) of the CPC. The appeal was dismissed with costs.

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