Court holds that jurisdiction to execute decree lies with court which passed it, even if decretal amount post-settlement is less than Rs. 2 crores, affirming applicability of CPC Sections 37 and 38 to commercial suits
In a significant judgment dated October 6, 2026, the Delhi High Court, presided over by Justice Mr. Subramonium Prasad, clarified the maintainability of execution petitions where the decretal amount falls below the pecuniary jurisdiction threshold of the court, specifically in the context of commercial suits. The court held that the High Court retains jurisdiction to execute a decree passed by it even if, after a settlement, the amount decreed is less than Rs. 2 crores, which is the pecuniary limit prescribed for commercial cases in the High Court.
The case arose from a commercial dispute between Ozone Spa Pvt Ltd (Decree Holder) and Co-Incept Hospitality Pvt Ltd and others (Judgment Debtors), concerning a franchise agreement for the operation of a gym, spa, and salon. The original suit for recovery was filed for Rs. 2,53,66,750/-, which exceeded the Rs. 2 crore pecuniary limit. However, the parties settled through a Settlement Deed dated July 5, 2018, and the suit was decreed accordingly for Rs. 1,19,43,000/-.
The Judgment Debtors challenged the maintainability of the execution petition on the ground that the amount sought to be recovered was below Rs. 2 crores, and therefore outside the Delhi High Court's pecuniary jurisdiction. They contended that execution proceedings in commercial suits fall under the Commercial Courts Act, 2015, which restricts the jurisdiction of the Commercial Division of the High Court to disputes above Rs. 2 crores.
Rejecting this contention, the Court analyzed the interplay between the Commercial Courts Act and the Code of Civil Procedure (CPC). It emphasized that Sections 37 and 38 CPC define the "Court which passed the decree" and empower that court to execute the decree or transfer it for execution. The Court reiterated that a change in pecuniary jurisdiction after passing of the decree does not divest the court of its jurisdiction to execute the decree. The Court relied on the Explanation to Section 37 CPC, which clarifies that the court of first instance does not cease to have jurisdiction merely because of changes in territorial or pecuniary limits.
The Court further observed that the provisions of the Commercial Courts Act, 2015, specifically Section 16, preserve the applicability of CPC provisions, as amended, to commercial disputes. Therefore, execution of decrees passed in commercial suits is governed by CPC Sections 37 and 38, and not exclusively by the Commercial Courts Act. The Court noted that the pecuniary threshold for filing suits under the Commercial Courts Act does not automatically apply to execution proceedings.
The Court distinguished the cited Division Bench decision in Asian Patent Attorneys Assn. v. Registrar General Delhi High Court, 2026 SCC Online Del 360, which quashed an administrative order refusing execution petitions below Rs. 2 crores but did not decide the merits of maintainability. The Court held that such administrative instructions cannot override statutory provisions or judicial determination of jurisdiction.
In conclusion, the Delhi High Court held that the execution petition filed by Ozone Spa Pvt Ltd is maintainable before the High Court, despite the decretal amount being below Rs. 2 crores. The Court's ruling affirms that the court which passed the decree retains jurisdiction to execute it, preserving the rights of decree holders and providing clarity in commercial dispute resolution.
The matter was listed for further hearing before the Roster Bench on October 14, 2026.
Bottom Line:
Execution of decree - Commercial suit originally filed above pecuniary threshold of High Court - Mere fact that decretal amount under settlement decree is below Rs. 2 crores does not divest High Court of jurisdiction to execute decree passed by it, Sections 37 and 38 CPC continue to apply even to decrees passed in commercial suits.
Statutory provision(s):
Civil Procedure Code, 1908 Sections 37, 38, 39; Commercial Courts Act, 2015 Sections 12, 16, 21
Ozone Spa Pvt Ltd v. Co-Incept Hospitality Pvt Ltd, (Delhi) : Law Finder Doc Id # 2998087
