Realizing Decrees And Awards In India: A Classic Case Of Failed ‘Execution’ – Trials & Appeals & Compensation

Anarba Groub


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As a lawyer practicing in Indian courts one is often asked,
almost regularly in fact, “how long before the decree is
enforced?”
. To that one question there is a standard
answer “I do not know”.

Instances of the Indian courts sympathizing with the
difficulties faced by a decree-holder in reaping the fruits of the
litigation are abundant; these date back to 1872 in General
Manager of the Raj Durbhunga v. Coomar Ramaput Sing
and go all
the way until the recent case of Air Liquide Deutschland GmbH
v. Goyal MG Gases (P) Ltd.

The Government, in its zeal to simplify doing business in the
country, has pursued various steps, one of which is improving the
alternate dispute resolution mechanism. A faster resolution of
disputes rightly fosters a healthier business environment. Thus,
since 2015, the Arbitration Act, 1996 has seen frequent amendments.
They do not however, address the most important aspect -
“enforcement”. Enforcement is eventually conducted under
the execution mechanism provided for decrees under the Code of
Civil Procedure, 1908. The anomaly then is stark – an award, even
if pronounced within the timelines stipulated under the 1996 Act,
languishes in the courts, awaiting to be enforced, defeating the
very purpose of speedy resolution of disputes.

Although India has entered, in our Prime Minister’s words,
Amrit Kaal with respect to ease of investment, such
ambitions cannot be achieved if after successfully surviving a hard
and long litigious battle, or post arduous and time-consuming
negotiations, an investor is not able to enjoy the fruits of his
labour. Such investor would in fact see this as a failing on part
of the state machinery, including courts, to provide adequate
protective support.

Pertinently, the Supreme Court in Shub Karan
Bubna v. Sita Saran Bubna
had suggested that the Law
Commission should consider moving away from separate execution
proceedings altogether and instead implement a continuous civil
dispute resolution process. Since this was not implemented, in
Rahul S. Shah v. Jinendra Kumar Gandhi, the Supreme Court
issued several directions to “end the unnecessary ordeal
of litigation faced by parties awaiting fruits of
decree”.
Importantly, now the executing courts are to
dispose of all execution proceedings within 6 months from the date
of filing, which period can only be extended by recording reasons
for delay. This, however, does not address the underlying
epidemic.

India is the 6th largest economy in the world after
USA, China, Japan, Germany and the United Kingdom. Having said
that, its civil justice system still ranks at an abysmal 110 out of
139 nations.

The problems that mar the judiciary are not at all difficult to
narrate. These include an overworked and understaffed judicial
machinery, lack of state support, inadequate court / judicial
infrastructure, antiquated laws and an unwillingness on the part of
stakeholders to change with times. These problems translate into
long winded court hearings, adjournments, frequent objections by
judgement-debtors, delayed disclosure of assets, never-ending
appeals, non-inclination of the courts to resort to penal measures,
cumbersome procedural road blocks, resistance to use newer
technologies and to generally move on with times.

Investors do not suffer any illusions; they recognize that
disputes in business are a given.  What they want is
protection of investment. Indian courts and the Government have
done precious little to address this concern of investors. In a
recent address, Justice D.Y. Chandrachud said, “Court is
yet another service which is provided by the State to all its
citizens
“. It is about time that the Government and
judiciary wake up to the reality – that there is a deficiency
in providing this service.

If the Indian dream is to be realized, it is imperative that the
Government invests in court infrastructure, nay overhauls it and
that the courts expedite the rate of disposal of cases, more
particularly execution/enforcement proceedings. As a matter of
practice, courts should resist the temptation to entertain pleas
against enforcement especially those that are technical in nature.
This will also mean overhauling the Code of Civil Procedure,
simplification and streamlining of the law on enforcement
proceedings, reducing procedural hurdles, weaning off unnecessarily
time-consuming bureaucratic processes and imposing strict timelines
at various stages of a proceeding. Currently, a wide variety of
modes of execution in respect of different types of assets exist.
Furthermore, navigating the law on attachment of assets, obtaining
warrants for sale and the like, bring the process to a crawl. Just
the aspect of completing service or issuing notice on the judgement
debtor is itself cumbersome, considering we are well past our prime
in the age of technology. This needs to be addressed, now.

Keeping the execution / enforcement procedure separate from the
suit needs to be re-assessed   as also observed by the
Supreme Court. It goes without saying nothing will be achieved if
the other stake holders in this arena, namely the lawyers and the
litigants, do not play ball.

The system should be such, that when an investor says,
“Show me the money!”, we should be able to
deliver like Jerry Maguire.

The article has been published in Financial
Express

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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