Case: Meenakshi Saxena and Ors Vs. ECGC Ltd. and Ors

date nearest or most nearly preceding such date, stating in his plaint what such rate of exchange is. He should further give an undertaking in the plaint that he would make good the deficiency in the courtfees, if any, if at the date of the judgment, at the rate of exchange then prevailing, the rupee equivalent of the foreign currency sum decreed is higher than that mentioned in the plaint for the purposes of courtfees and jurisdiction. At the hearing of such a suit, before passing the decree, the court should call upon the plaintiff to prove the rate of exchange prevailing on the date of the judgment or on the date nearest or most nearly preceding the date of the judgment. If necessary, after delivering judgment on all other issues, the court may stand over the rest of the judgment and the passing of the decree and adjourn the matter to enable the plaintiff to prove such rate of exchange. The decree to be passed by the court should be one which orders the defendant to pay to the plaintiff the foreign currency sum adjudged by the court subject to the requisite permission of the concerned authorities under the Foreign Exchange Regulation Act, 1973, being granted, and in the event of the foreign exchange authorities not granting the requisite permission or the defendant not wanting to make payment in foreign currency even though such permission has been granted or the defendant not making payment in foreign currency or in Indian rupees, whether such permission has been granted or not, the equivalent of such foreign currency sum converted into Indian rupees at the rate of exchange proved before the court as aforesaid. In the event of the decree being challenged in appeal or other proceedings and such appeal or other proceedings being decided in whole or in part in favour of the plaintiff, the appellate court or the court hearing the application in the other proceedings challenging the decree should follow the same procedure as the trial court for the purpose of ascertaining the rate of exchange prevailing on the date of its appellate decree or of its order on such application or on the date nearest or most nearly preceding the date of such decree or order. If such rate of exchange is different from the rate in the decree which has been challenged, the court should make the necessary modification with respect to the rate of exchange by its appellate decree or final order. In all such cases, execution can only issue for the rupee equivalent specified in the decree, appellate decree or final order, as the case may be. These questions, of course, would not arise if pending appeal or other proceedings adopted by the defendant the decree has been executed or the money thereunder received by the plaintiff. 27. In the light of the ratio laid down by this court in determining the relevant date for conversion of currency, the first procedure to be adopted by the court is to decide the same in accordance with terms of the contract, if such a clause is not available in the agreement then the courts have to determine the best possible date, then this court went ahead and dealt with the procedure to be adopted. But in the present facts that exercise is not relevant as there is a specific clause in the agreement i.e clause 17 which deals with rate of interest. The clause clearly says that currency should be converted into rupees at the bank buying rate of exchange at Mumbai on the date of relevant shipment. A close look at the relevant order dt. 12.10.2006 also discloses that the district forum has granted interest on the amount from 24.7.2002 which can be construed that the District Forum though has not mentioned about clause 17 of the agreement but taking in to consideration the very same clause has given interest from that day. The interpretation given by District Forum as well as the State Commission to the order dt. 12.10.2006 is contrary to the terms of the agreement and amounts to drawing a new decree which is not permissible. 28. We are unable to agree with the contentions of the learned counsel for the appellant that the NCDRC has gone beyond the decree and the NCDRC ought not to have gone into clause 17 are meritless hence rejected. In a case of this nature the only remedy available to the court is either to look at the terms of the contract or in the absence of the same to follow the procedure laid down by this court in the above stated judgment. The order passed by NCDRC is strictly in accordance with the settled legal position and we do not find any infirmity with the order. 29. In conclusion, reading the judgment as a whole, without undertaking a piece meal approach as suggested by the appellant herein, interpreting the decree in a manner which may amount to substitution of a new decree is not countenanced under law. Therefore, it is clear that as per the insurance contract, the respondent insurer was required to pay the insurance claim in accordance with the conversion rate of the invoiced foreign currency in Indian rupee as per the bank buying rate of interest at Mumbai on the date of subject shipment for which the invoice was issued. We are apprised of the fact that the respondent judgment debtor has paid an amount of Rs. 11,23,906/ to the petitioner during the pendency of execution proceedings. The aforesaid payment was calculated on the basis of conversion rate applicable at the time of shipment of invoiced value and the interest awarded by the consumer forum. In view of the same the respondent has complied with the order of the forum by paying full and final amount in terms of the order. 30. Hence, we find no grounds to interfere with the order of the NCDRC which is based on sound principles of law.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]18. The whole purpose of Execution proceedings is to enforce the verdict of the court. Executing court while executing the decree is only concerned with the execution part of it but nothing else. The court has to take the judgment in its face value. It is settled law that executing court cannot go beyond the decree. But the difficulty arises when there is ambiguity in the decree with regard to the material aspects. Then it becomes the bounden duty of the court to interpret the decree in the process of giving a true effect to the decree. At that juncture the executing court has to be very cautious in supplementing its interpretation and conscious of the fact that it cannot draw a new decree. The executing court shall strike a fine balance between the two while exercising this jurisdiction in the process of giving effect to the decree.We are compelled to observe that an order which is passed in the year 2006 is still subject to litigation till date for the simple reason minimum care is not taken by the forum to clarify the reckoning date for conversion rate of currency.22. In a contractual matter, when the decree is silent with regard to the reckoning date of conversion of foreign currency in to Indian rupees, what would be the methodology to be followed by the executing courtis no more res integra, as this court has an occasion to deal with elaborately in the case of Forasol v. ONGC, 1984 (Supp.) SCC 263, the facts of that case revolved around a contract entered into between ONGC and Forasol for carrying out structural drilling in relation to the exploration of oil in the Jaisalmer area.24. This Court recognized the principle that a determination of relevant date for conversion of currency would first take place in accordance with the contractual provision and thereafter, if such explicit determination is not available, then the court would have to determine the best possible date25. Further this court recognized the discretion of the Court to select the relevant dates and pointed out some of them in the following manner24. In an action to recover an amount payable in a foreign currency, five dates compete for selection by the Court as the proper date for fixing the rate of exchange at which the foreign currency amount has to be converted into the currency of the country in which the action has been commenced and decided(1) the date when the amount became due and payable;(2) the date of the commencement of the action;(3) the date of the decree;(4) the date when the Court orders execution to issue; and(5) the date when the decretal amount is paid or realised25. In a case where a decree has been passed by the Court in terms of an award made in a foreign currency a sixth date also enters, the competition, namely, the date of the award. The case before us is one in which a decree in terms of such an award has been passed by the Court. (emphasis supplied)26. Ultimately this Court on an extensive analysis came to a conclusion in the following manner-70. It would be convenient if we now set out the practice, which according to us, ought to be followed in suits in which a sum of money expressed in a foreign currency can legitimately be claimed by the plaintiff and decreed by the court. It is unnecessary for us to categorize the cases in which such a claim can be made and decreed. They have been sufficiently indicated in the English decisions referred to by us above. Such instances can, however, never, be exhausted because the law cannot afford to be static but must constantly develop and progress as the society to which it applies, changes its complexion and old ideologies and concepts are discarded and replaced by new. Suffice it to say that the case with which we are concerned was one which fell in this category. In such a suit, the plaintiff, who has not received the amount due to him in a foreign currency, and, therefore, desires to seek the assistance of the court to recover that amount, has two courses open to him. He can either claim the amount due to him in Indian currency or in the foreign currency in which it was payable. If he chooses the first alternative, he can only sue for that amount as converted into Indian rupees and his prayer in the plaint can only be for a sum in Indian currency. For this purpose, the plaintiff would have to convert the foreign currency amount due to him into Indian rupees. He can do so either at the rate of exchange prevailing on the date when the amount became payable for he was entitled to receive the amount on that date or, at his option, at the rate of exchange prevailing on the date of the filing of the suit because that is the date on which he is seeking the assistance of the court for recovering the amount due to him. In either event, the valuation of the suit for the purposes of court fees and the pecuniary limit of the jurisdiction of the court will be the amount in Indian currency claimed in the suit. The plaintiff may, however, choose the second course open to him and claim in foreign currency the amount due to him. In such a suit, the proper prayer for the plaintiff to make in his plaint would be for a decree that the defendant do pay to him the foreign currency sum claimed in the plaint subject to the permission of the concerned authorities under thebeing granted and that in the event of the foreign exchange authorities not granting the requisite permission or the defendant not wanting to make payment in foreign currency even though such permission has been granted or the defendant not making payment in foreign currency or in Indian rupees, whether such permission has been granted or not, the defendant do pay to the plaintiff the rupee equivalent of the foreign currency sum claimed at the rate of exchange prevailing on the date of the judgment. For the purposes of court fees and jurisdiction the plaintiff should, however, value his claim in the suit by converting the foreign currency sum claimed by him into Indian rupees at the rate of exchange prevailing on the date of the filing of the suit or the date nearest or most nearly preceding such date, stating in his plaint what such rate of exchange is. He should further give an undertaking in the plaint that he would make good the deficiency in the courtfees, if any, if at the date of the judgment, at the rate of exchange then prevailing, the rupee equivalent of the foreign currency sum decreed is higher than that mentioned in the plaint for the purposes of courtfees and jurisdiction. At the hearing of such a suit, before passing the decree, the court should call upon the plaintiff to prove the rate of exchange prevailing on the date of the judgment or on the date nearest or most nearly preceding the date of the judgment. If necessary, after delivering judgment on all other issues, the court may stand over the rest of the judgment and the passing of the decree and adjourn the matter to enable the plaintiff to prove such rate of exchange. The decree to be passed by the court should be one which orders the defendant to pay to the plaintiff the foreign currency sum adjudged by the court subject to the requisite permission of the concerned authorities under thebeing granted, and in the event of the foreign exchange authorities not granting the requisite permission or the defendant not wanting to make payment in foreign currency even though such permission has been granted or the defendant not making payment in foreign currency or in Indian rupees, whether such permission has been granted or not, the equivalent of such foreign currency sum converted into Indian rupees at the rate of exchange proved before the court as aforesaid. In the event of the decree being challenged in appeal or other proceedings and such appeal or other proceedings being decided in whole or in part in favour of the plaintiff, the appellate court or the court hearing the application in the other proceedings challenging the decree should follow the same procedure as the trial court for the purpose of ascertaining the rate of exchange prevailing on the date of its appellate decree or of its order on such application or on the date nearest or most nearly preceding the date of such decree or order. If such rate of exchange is different from the rate in the decree which has been challenged, the court should make the necessary modification with respect to the rate of exchange by its appellate decree or final order. In all such cases, execution can only issue for the rupee equivalent specified in the decree, appellate decree or final order, as the case may be. These questions, of course, would not arise if pending appeal or other proceedings adopted by the defendant the decree has been executed or the money thereunder received by the plaintiff.27. In the light of the ratio laid down by this court in determining the relevant date for conversion of currency, the first procedure to be adopted by the court is to decide the same in accordance with terms of the contract, if such a clause is not available in the agreement then the courts have to determine the best possible date, then this court went ahead and dealt with the procedure to be adopted. But in the present facts that exercise is not relevant as there is a specific clause in the agreement i.e clause 17 which deals with rate of interest. The clause clearly says that currency should be converted into rupees at the bank buying rate of exchange at Mumbai on the date of relevant shipment. A close look at the relevant order dt. 12.10.2006 also discloses that the district forum has granted interest on the amount from 24.7.2002 which can be construed that the District Forum though has not mentioned about clause 17 of the agreement but taking in to consideration the very same clause has given interest from that day. The interpretation given by District Forum as well as the State Commission to the order dt. 12.10.2006 is contrary to the terms of the agreement and amounts to drawing a new decree which is not permissible28. We are unable to agree with the contentions of the learned counsel for the appellant that the NCDRC has gone beyond the decree and the NCDRC ought not to have gone into clause 17 are meritless hence rejected. In a case of this nature the only remedy available to the court is either to look at the terms of the contract or in the absence of the same to follow the procedure laid down by this court in the above stated judgment. The order passed by NCDRC is strictly in accordance with the settled legal position and we do not find any infirmity with the order.29. In conclusion, reading the judgment as a whole, without undertaking a piece meal approach as suggested by the appellant herein, interpreting the decree in a manner which may amount to substitution of a new decree is not countenanced under law. Therefore, it is clear that as per the insurance contract, the respondent insurer was required to pay the insurance claim in accordance with the conversion rate of the invoiced foreign currency in Indian rupee as per the bank buying rate of interest at Mumbai on the date of subject shipment for which the invoice was issued. We are apprised of the fact that the respondent judgment debtor has paid an amount of Rs. 11,23,906/ to the petitioner during the pendency of execution proceedings. The aforesaid payment was calculated on the basis of conversion rate applicable at the time of shipment of invoiced value and the interest awarded by the consumer forum. In view of the same the respondent has complied with the order of the forum by paying full and final amount in terms of the order30. Hence, we find no grounds to interfere with the order of the NCDRC which is based on sound principles of law.