M/S ALCON ELECTRONICS PVT. LTD. versus CELEM S.A. OF FOS 34320 ROUJAN, FRANCE & ANR.
[2016] 8 S.C.R. 577, Supreme Court of India, 2016
Outcome: Dismissed (Dismissed)
Segment: Facts
[2016) 8 S.C.R. 577 
M/S ALCON ELECTRONICS PVT. LTD. 
v. 
CELEM S.A. OF FOS 34320 ROUJAN, FRANCE & ANR. 
(CivilAppea!No. 10106of2016) 
DECEMBER 09, 2016 
(A. K. SIKRI AND N. V. RAMANA, JJ.] 
A 
B 
Code of Civil Procedure, 1908- ss. 13, 44A(3) - When foreign 
iudgment not conclusive - Interlocutory order of an English court -
Dismissal of the application challenging its jurisdiction, alongwith . C 
a direction for payment of costs - Execution of, by Indian Court -
Held: To be conclusive an order or decree must liave been obtained 
after following the due judicial process by giving. reasonable notice 
and opportunity to all the proper and necessary parties to put forth 
their case - When once these requirements are fulfilled, the executing 
Court cannot enquire into the validity, legality or otherwise of the· D 
;udgment - On facts, the order passed by the English Court does 
not fall under any of the exceptions to s. 13 and it is a conclusive 
one - Said order falls within the definition of 'Order' and therefore, 
it is a judgment and thus. becomes a .. decree" as per Explanation 
to s. 44A(3) and the same is executable - Further, the costs imposed 
on the basis of the indemnity is not a penalty or tax - Thus, 
Explanation II to Section 44A does not re.fer to the costs as 
contemplated uls. 35"_ Although the interest on costs are not 
available due to exclusion of s. 35(3), it does not mean that Indian 
Courts are powerless to execute the decree for interest on costs ~ 
Thus,
the execution petition filed by the respondents for execution 
of the order passed by the English Court is maintainable. 
Dismissing the appeal, the Court 
HELD: 1.1 A plain reading of Section 13 CPC would show 
that to be conclusive an order or decree must.have been obtained 
after following the due judicial process by giving reasonable notice 
and opportunity to all the proper and necessary parties to put 
forth their case. When once these requirements are fulfilled, the 
executing Court cannot enquire into the validity, legality or 
otherwise of the judgment. [Para· 13) (585-B-C] 
577 
E 
F 
G 
H
578 
A 
B 
c 
D 
E 
F 
SUPREME COURT REPORTS 
[2016) 8 S.C.R. 
1.2 A glance on the enforcement of the foreign judgment, 
the position at common law is very clear that a foreign judgment 
which has become final and conclusive between the parties is not 
impeachable either on facts or law except on limited grounds 
enunciated under Section 13, CPC. In construing Section 13, CPC 
the plain meaning of the words and expressions used therein is 
to be looked at and not any other factors. Further, under Section 
14, CPC there is a presumption that the Foreign Court which 
passed the order is a Court of competent jurisdiction which of 
course is a rebuttable presumption. [Para 14) [585-C-E] 
1.3 The order passed by the English Court is an order on 
merits. The appellant who has submitted itself to the jurisdiction 
of the Court and on its own requested the Court to assess the 
costs summarily. While passing a reasoned order by dismissing 
the application filed by the appellant, English Court granted the 
costs against the appellant. The appellant did not prefer any appeal 
and inrleed sought time to pay the costs. The appellant, therefore, 
cannot be permitted to object the execution. It is a pure abuse of 
process of law and the-Courts should be very cautious in 
entertaining such petitions. [Para 16) [586-A-B] 
International Woollen Mills v. Standard Wool (UK; Ltd. 
2001 (3) SCR 166: 2001 (5) SCC 265 - referred to. 
1.4 The demand of the principles of comity of nation 
demands to
respect the order of English Court. Even in regard 
to an interlocutory order, Indian Courts have to give due weight 
to such order unless it falls under any of the exceptions under 
Section 13 CPC. Thus, the order passed by the English Court 
does not fall under any of the exceptions to Section 13 CPC and 
it is a conclusive one. [Para 18) [586-F-G) 
2.1 There is no dispute that England is a reciprocating 
territory for the purpose of Section 44A CPC. Section 44A CPC 
0 
indicates an independent right conferred on a foreign decree 
holder for enforcement of a Decree/Order in India. Section 44A 
is meant to give effect to the policy contained in the Foreign 
Judgments (Reciprocal Enforcement) Act, 1933. It is a part of 
the arrangement under which on one part decrees of Indian 
Courts are made executable in United Kingdom and on the other 
H part, decrees of Courts in the United Kingdom and other notified
M/S ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
579 
FOS 34320 ROUJAN, FRANCE 
parts of Her Majesty's dominions are made executable in India. A 
Therefore, the order passed by that Court is executable in India 
u/s. 44A CPC. [Para 20) [587-H; 588-A-C] 
2.2 On conjoint reading of 'decree', 'judgment' and 'order' 
from any angle, the order passed by the English Court falls within 
the definition of 'Order' and therefore, it is a judgment and thus B 
becomes a "decree" as per Explanation to Section 44A(3) of CPC. 
In the instant case, the Court at England, after following the 
principles of natural justice, by recording reasons and very 
importantly basing on the application of the appellant itself, has 
conclusively decided the issue with regard to jurisdiction and C 
passed the order coupled with costs. Hence, the order passed by 
the Foreign Court is conclusive in that respect and on merits. 
Hence executable as a decree. [Para 21) [589-A-B] 
Johnstone v. The Law Society of Prine!!. Edward 
Island 2 PEIR B 28 (1988) - referred to. 
3.1 A penalty normally means a snm payable to the State, 
not to a private claimant, so the costs imposed on the basis of the 
indemnity is not a penalty or tax. Therefore, the Explanation II 
D 
to Section 44A does not refer to the costs as contemplated under 
Section 35 of the CPC. The costs having been quantified have 
assumed the character of a money decree for costs and cannot E 
be equated, either with a fine or penalty which is imposed on
a 
party by the Court or taxes claimed and are taxes payable to a 
local authority, Government, or other charges of a like nature. 
[Para 28) [590-H; 591-A] 
3.2 The ap11ellant submitted that as per Section 35A of the 
F 
CPC, no Court should pass any order for the payment of 
compensatory costs exceeding Rs.3,000/- or exceeding the limits 
of its pecuniary jurisdiction of the said Court whichever amount 
is less; and that since the costs imposed exceeded the bar 
imposed by Section 35A, therefore, the order of the English Court G 
is not executable. The submission lacks merit and is rejected. A 
bare perusal of Section 35A shows that bar operates on the Indian 
Courts with regard to imposition of costs in respect of false or 
vexatious claims or defences. The bar is not attracted in the 
instant case as the Court that has ordered the costs is the High 
Court of Justice in England which is not governed by the H
580 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
A 
provisions of the CPC and that the respondent merely approached 
the Indian Courts for the satisfaction of a foreign decree. 
Moreover, the nature of compensatory costs prescribed in Section 
35A of the CPC are different from 'costs' dealt with in Section 35 
of the CPC as the former are limited to the claims of defences of 
B 
c 
D 
E 
F 
G 
a party which are frivolous or vexatious. It is settled that before 
awarding costs under Section 35A of the CPC, the Court should 
satisfy itself that the claim was false or vexatious to the knowledge 
of the party who put it forward and that the interests of justice 
require the award of such compensatory costs. In the instant case, 
no clajm has been advanced by the appellant that the claim filed 
by the respondents is false or vexatious, therefore, the bar in 
Section 35A is not applicable. [Paras 29, 30] [591-B-F] 
4.1 It is to the reciprocal advantage of the Courts of all 
nations to enforce foreign rights as far as practicable. To this 
end, broad recognition of substantive rights should not be 
defeated by some vague assumed limitations of the Court. When 
substantive rights are so bound np in a foreign remedy, the refusal 
to adopt the remedy would substantially deprive parties of their 
rights. The necessit" of maintaining the foreign rights outweighs 
the practical difficulties involved in applying the foreign remedy. 
In India, although the interest on costs arc not available
due to 
exclusion of s. 35(3), the same does not mean that Indian Courts 
are powetlcss to execute the decree for interest on costs. Indian 
Courts arc very much entitled to address the issue for execution 
of the interest amount. [Para 35] [593-B-C] 
4.2 The Execution Petition filed by the Respondents for 
execution of the order passed by the English Court is 
maintainable under the relevant provisions. Therefore, there is 
- no reason to interfere with the impugned order. [Para 36) [593-
D-E] 
2001 (3) SCR 1662 
Case Law Reference 
referred to 
Para 17 
CIVIL APPELLATE JURUSDICTION: Civil Appeal No. I 0 I 06 
of2016. 
From the Judgment and Order dated 08.04.2013 of the High Court 
H 
of Judicature at Bombay in Civil Revision Application No. 680of2011.
M/S ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
581 
FOS 34320 ROUJAN, FRANCE 
Shyam Divan, Sr. Adv. D. M. Nargolkar, Adv. for the Appellant. 
A 
G. K. Masand, Subhash Bijlani, Yogesh Kumar Dahiya, Ms. Manjul 
Dahiya, Chandra Bhushan Prasad, Advs. for the Respondents. 
The Judgment of the Court was delivered by 
N. V. RAMANA, J. I. In this appeal by special leave, the 
B 
appellant-judgment debtor assails the impugned judgment dated 81h April, 
2013 passed by the High Court of Bombay in Civil Revision Application 
No. 680of2011, whereby the High Court has dismissed the application 
filed by the appellant seeking declaration that the Judgment and Order 
dated 191h October, 2006 passed by the High Court of Justice, Chancery 
C 
Division, Patents Court, England (hereinafter referred to as 'the English 
Court') is not executable before the District Court at Nasik, by confirming 
the order dated 151h April, 2011 passed by the District Judge-2, Nasik. 
2. The facts in nutshell are that the respondents herein filed a Suit D 
against the appellant before th,~ English Court for infringement of patent 
vested in the respondents besides other reliefs. In the said suit, the 
appellant-defendant filed an application challenging the jurisdiction of 
the English Court. In that application, the reliefs sought by the appellant 
include the relief that the respondents-original claimants have to pay the 
costs to the appellant occasioned by filing the application to be summarily 
assessed.
The English Cout1 by its Order dated 191h October, 2006 
dismissed the claim of the appellant and further directed it to pay the 
costs of application to the respondents-original claimants set at 
£ 12,229.75. Thereafter it appears that the appellant agreed to pay the 
costs and sought for some time. When the respondents filed a petition 
for execution in India, the appellant opposed it in an application on the 
ground that the order of English Cout1 is not executable. The executing 
Cout1 dismissed the same which was confirmed by the High Court. 
Hence the appellant is before us by way of this appeal. 
E 
F 
3. The appellant made following submissions assailing the Judgment 
of the Courts below-
· 
G 
a. An interlocutory Order of English Court with respect to its 
own jurisdiction (with or without a direction for payment of 
costs) does not amount to a judgment 'on merits of the 
case' and is therefore not conclusive under Section 13(b) 
H
582 
A 
B 
c 
D 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
of the Civil Procedure Code (CPC for short). 
b. In the alternative, the Order of the English Court in the 
present case does not amount to 'decree' under Explanation 
2 to Section 44A of the CPC. 
c. Without prejudice to the aforesaid, the part of the order of 
the English Court relating to the payment ofinterest on costs 
should not be executed in view of the deletion of the erstwhile 
Section 35(3) of the CPC. 
4. The Respondents have responded in the following manner. The 
decree passed by the English Court is very much a decree on merits as 
the English Court has not only given a detailed Judgment on merits of 
the matter but also considered the entire evidence as produced by the 
parties including oral evidence by way of witness statements, 
documentary evidence produced by the parties and the application 
challenging the jurisdiction of the English Court has been decided finally 
on merits of the case put fo1ih by the defendants. Nothing further was 
required to be done insofar as consideration of the application of the 
appellant challenging the jurisdiction of the English Court is concerned. 
5, It is submitted that Explanation-II to Section 44A is concerned, 
the same does not refer to costs which are defined under Section 35 of 
E 
the CPC. The costs having been quantified have assumed the character 
of a money decree for costs which cannot be equated, either with a 
fines or penalty which is imposed on a
party by the Court or taxes payable 
to a local authority or to a Government or other charges oflike nature. It 
is the submission of the respondent that the legislative intent was to keep 
out of the purview of Section 44A the execution of the foreign decree if 
F 
it related to payment of either taxes or charges of a I ike nature or a fine 
or penalty. Even an arbitration award has been excluded. At best it could 
be argued that compensatory costs in respect of false or vexatious claims 
which have been defined under Section 35A could be excluded. 
6. It is further submitted that Section 13, CPC specifically excludes 
G 
the execution of such decrees which are mentioned under Clauses (a) 
to (f) thereof and this Section does not mention decrees for the costs. 
7. Furthermore they respond that the Judgments Act, 1838 of 
United Kingdom, as amended in 1993, provides that every judgment 
debt shall carry interest@ 8%. The rules framed in U.K. provide for 
H 
interest to run from the date the Judgment is given. The rules also provide
MIS ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
583 
FOS 34320 ROUJAN, FRANCE [N. V. RAMANA, J.] 
that a judgment or order takes effect from the day when it is given on 
A 
merits or such dates as Court may specify. The Rules further provide 
that a party must comply with a judgment or order for the Payment of an 
amount of money (including costs) within 14 days of the date of Judgment 
or order unless the judgment or order specifies a different date for 
compliance or any of the rule specify a different date for compliance or 
B 
the Court has stayed the proceedings or execution. 
8. Moreover, all the Orders of the Court are required to be obeyed 
and implemented, unless the Court itself sets a date for its non-execution. 
Otherwise orders will only remain a piece of paper and merely decorate 
the file oflitigant, which would lead to an impression being created in the 
minds of the litigants that they could with impunity avoid to obey the 
Court Order. It is neither the legislative intent nor the desire of the 
Judiciary. 
c 
9. Legislative intent of executing Orders relating to payments of 
costs is clear from amendment carried out to section 36, CPC to clarify 
that the provisions relating to execution of decree or order include payment D 
under a decree or order as well. 
10. We have heard the learned counsel on either side at length 
and perused the record. The following issues fall for our consideration: 
( 1) 
Whether the order passed by the Foreign Court falls
within , E 
the Exceptions to Section 13 of the CPC? 
(2) 
Whether the order passed by the Foreign Court amounts to 
a "decree" and the same is executable? 
(3) 
lfanswer to issue No. 2 is in affirmative, whether the decree 
for costs would fall within the ambit of Explanation 2 of F 
Section 44A (3) ofCPC and makes it inexecutable? 
(4) 
Whether interest on costs would fall within the ambit of 
Explanation 2 of Section 44A of CPC? 
(5) 
Whether the interest on costs can be executed in India in 
view of deletion of Section 35(3) of CPC? 
11. In re Issue No. 1 -Admittedly the English Court passed an 
order dated 19'h October, 2006 dismissing the application passed by the 
appellant questioning the jurisdiction of the Court. The appellant itselfat 
the time of filing the application has prayed the Court to summarily assess 
G 
H
584 
SUPREME COURT REPORTS 
(2016] 8 S.C.R. 
A the costs to be paid to him in the event of his application being allowed. 
B 
c 
Both the appellant-defendant as well the respondents-claimants 
participated in the proceedings by adducing their respective oral as well 
as documentary evidence. Skelton arguments on behalf of both parties 
were filed before Court. The appellant herein has filed schedule of costs 
at£ 25,406.30. Then the English Court has passed a detailed order on 
J 9•h October, 2006 on the question of jurisdiction holding that it has 
jurisdiction to entertain the Suit and also directed the defendants to pay 
the costs of the application which was summarily assessed at a sum of 
£ 12,429.75. 
12. It appears that the appellant herein has accepted the order 
and sought for time to pay the costs. Moreover, it did not choose to 
approach the appellate Court assailing the order and the same has attained 
"finality. In spite of the same, the appellant filed the application opposing 
the execution petition filed by the respondents. The first and foremost 
ground of attack against the order passed by the English Court is that 
D the order is not conclusive as per Section 13(b), CPC. Such argument 
appears to be attractive but we are not able to appreciate the same in 
the facts and circumstances of the case. Before we proceed further, it 
is appropriate to have a look at Sections 13 and 14 of CPC which read. 
as under: 
E 
F 
G 
H 
Section 13. When foreign judgment
not conclusive : A foreign 
judgment shall be conclusive as to any matter thereby directly 
adjudicated upon between the same parties or between parties 
under whom they or any of them claim litigating under the same 
title except-
( a) 
where it has not been pronounced by a Cou11 of competent 
jurisdiction; 
(b) 
where it has not been given on the merits of the case; 
( c) 
where it appears on the face of the proceedings to be founded 
on an incorrect view of international law or a refusal to recognise 
the law oflndia in cases in which such law is applicable; 
(d) where the proceedings in which the judgment was obtained 
are opposed to natural justice; 
(e) 
where it has been obtained by fraud; 
(f) 
where it sustains a claim founded on a breach of any law in 
force in India.
MIS ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
585 
FOS 34320 ROUJAN, FRANCE [N. V. RAMANA, J.] 
Section 14. Presumption as to foreign judgments: The Court shall A 
presume upon the production of any document purpo11ing to be a 
certified copy of a foreign judgment that such judgment was 
pronounced by a Court of competent jurisdiction, unless the contrary 
appears on the record; but such presumption may be displaced by 
proving want of jurisdiction. 
B 
13. A plain reading of Section 13, CPC would show that to be 
conclusive an order or decree must have been obtained after following 
the due judicial process by giving reasonable notice and opportunity to 
all the proper and necessary parties to put forth their case. When once 
these requirements are fulfilled, the executing Court cannot enquire into 
the validity, legality or otherwise of the judgment. 
C 
14. A glance on the enforcement of the foreign judgment, the 
position at common law is very clear that' a foreign judgment which has 
become final and conclusive between the parties is not impeachable 
either on facts or law except on limited grounds enunciated under Section 
13, CPC. In construing Section 13, CPC we have to look at the plain D 
meaning of the words and expressions used therein and need not look at 
any other factors. Fmiher, under Section 14, CPC there is a presumption 
that the Foreign Court which passed the order is a Court of comp<:tent 
jurisdiction which of course is a rebuttable presumption. In
the present 
case, the appellant does not dispute the jurisdiction of the English Court E 
but its grievance is, it is not executable on other grounds which are 
canvassed before us. 
15. The appellant contends that the order of the English Court is 
not given on merits and that it falls under Section 13(c) of the CPC as a 
result of which it is not conclusive and therefore inexecutable. We cannot 
F 
accept such submission. A judgment can be considered as ajl!dgment 
passed on merits when the Court deciding the case gives opportunity to 
the parties to the case to put forth their case and after considering the 
rival submissions, gives its decision in the form of an order or judgment, 
it is certainly an order on merits of the case in the context of interpretation 
of Section 13(c) of the CPC. 
G 
16.' Applying the same analogy to the facts of the case on hand, 
we have no hesitation to hold that the order passed by the English Court 
is an order on merits. The appellant who has submitted itself to the 
jurisdiction of the Court and on its own requested the Court to assess the 
costs summarily. While passing a reasoned order by dismissing the H
586 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
application filed by the appellant, English Court granted the costs against 
the appellant. Had it been the case where appellant's application was 
allowed and costs were awarded to it, it would have as well filed a 
petition for the execution of the order. Be that as it is, the appellant did 
not prefer any appeal and indeed sought time to pay the costs. The 
appellant, therefore, cannot be permitted to object the execution. It cannot 
be permitted to blow hot and cold at the same time. In our opinion, it is a 
pure abuse of process of law and the Courts should be very cautious in 
entertaining such petitions. 
17. 
In International Woollen Mills v. Standard Wool (UK) Ltd.1, 
this Court observed : 
" ... Even where the defendant chooses to remain ex parte and to 
keep out, it is possible forthe plaintiff to adduce evidence in support 
of his claim (and such evidence is generally insisted on by the 
Courts in India), so that the Court may give a decision on the 
merits of his case after a due consideration of such evidence 
instead of dispensing with such consideration and giving a 
decree merely on account of the default of appearance of 
the defendant. 
In the former case the judgment will be one on the merits 
of the case, while in the latter the judgment will be one not 
on the merits of the case. Thus it is obvious that the non-
appearance of the defendant will not by itself determine the nature 
of
the judgment one way or the other. That appears to be the 
reason why Section 13 does not refer to ex parte judgments falling 
under a separate category by themselves ... " 
18. The principles of comity of nation demand us to respect the 
order of English Court. Even in regard to an interlocutory order, Indian 
Courts have to give due weight to such order unless it falls under any of 
the exceptions under Section 13 of the CPC. Hence we feel that the 
order in the present case passed by the English Court does not fall under 
any of the exceptions to Section 13 of the CPC and it is a conclusive 
one. The contention of the appellant that the order is the one not on 
merits deserves no consideration and therefore liable to be rejected. 
Accordingly, Issue No. I is answered. 
I AIR 2001SC2134
M/S ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
587 
FOS 34320 ROUJAN, FRANCE [N. V. RAMANA, J.] 
19. In re Issue No. 2- The next ground put forth by the appellant 
A 
is that the order being an interlocutory order does not have the shades of 
a 'judgment' to be executed before the Indian Court and hence the order 
not being a 'decree' is in executable. To appreciate this, it is appropriate 
to have a look at Section 44A of CPC 
44A. Execution of decrees passed by Courts in B 
reciprocating territory-
(!) Where a certified copy of decree of any of the superior 
Courts of any reciprocating territory has been filed in a District 
Court, the decree may be executed in India as if it had been passed 
by the District Court. 
C 
(2) Together with the certified copy of the decree shall be filed a 
certificate from such superior Court stating the extent, if any, to 
which the decree has been satisfied or adjusted and such certificate 
shall, for the purposes of proceedings under this section, be 
conclusive proof of the extent of such satisfaction or adjustment. 
D 
(3) The provisions of section 47 shall as from the filing of the 
ce1tified copy of the decree apply to the proceedings of a District 
Court executing a decree under this section, and the District Comt 
shall refuse execution of any such decree, if it is shown to the 
satisfaction of the Court that the decree falls within any of the 
E 
exceptions specified in clauses (a) to (t) of section 13. 
Explanation 1--
"Reciprocating territory" means any country 
or territory outside India which the Central Government may, by 
notification in the Official Gazette, declare to be a reciprocating 
territory for the purposes of this section; and "superior Courts", 
with reference to any such territory, means such Courts as may 
be specified in the said notification. 
Explanation 2.- "Decree" with reference to a superior Cou1t 
means any decree or judgment of such Cou1t under which a sum 
F 
of money is payable, not being a sum payable in respect of taxes 
G 
or other charges of a like nature or in respect to a fine or other 
penalty, but shall in no case include an arbitration award, even if 
such an award is enforceable as a decree or judgment. 
20. As far as the explanation with regard to reciprocal territory is 
concerned, there is no dispute that England is a reciprocating territory 
H
588 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
A for the purpose of above Section. Section 44A of CPC indicates an 
independent right conferred on a foreign decree holder for enforcement 
of a Decree/Order in India. Section 44A was inserted by Section 2 of 
the Civil Procedure Code (Amendment)Act, 1937 (Act No. 8of1937). 
This Section is meant to give effect to the policy contained in the Foreign 
B Judgments (Reciprocal Enforcement) Act, 1933. It is a part of the 
arrangement under which on one part decrees oflndian Courts are made 
executable in United Kingdom and on the other part, decrees of Courts 
in the United Kingdom and other notified parts of Her Majesty's dominions 
are made executable in India. It is to be seen that as United Kingdom is 
a reciprocating territory and the High Court of Justice, Chancery Division, 
C England being a recognized superior Court in England. Therefore, the 
order passed by that Court is executable in India under Section 44A of 
the CPC. Now we come to the next limb of the argument put forth by 
the appellant that the order passed by the English Court does not amount 
to a decree and hence it is not executable. It is no doubt correct, Section 
D 44A of CPC deals with "execution of decrees passed by Courts in 
reciprocating territory". Before we further decide this issue it is 
appropriate to have a look at how decree, order and foreign judgment 
are defined under the CPC. -
21. As per Section 2(2) of the CPC, "decree" means the formal
expression of an adjudication which, so far as regards the Court expressing 
E 
it, conclusively determines the rights of the parties with regard to all or 
any ofthe matters in controversy in the suit and may be either preliminary 
or final. It shall be deemed to include the rejection of a plaint and the 
determination of any question within Section 144 of CPC but shall not 
include- (a) any adjudication from which an appeal lies as an appeal 
F from an order, or (b) any order of dismissal for default. 
Then a "foreign judgment" is defined under Section 2(6) as 
judgment of a foreign Court. "Judgment" as per Section 2(9) of C.P.C. 
means the statement given by the Judge on the grounds of a decree or 
order. Order is defined under Section 2( 14) of CPC as a formal expression 
G of any -decision of the Civil Court which is not a 'decree'. Then 
Explanation 2 to Section 44A (3) says "decree" with reference to a 
superior Court means any 'decree' or 'judgment'. As per the plain reading 
of the 'definition' Judgment' means the statement given by the Judge on 
the grounds of decree_ or order and order is a fonnal expression of a 
Court. Thus "decree" includes judgment and 'judgment" includes "order".-
H
MIS ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
589 
FOS 34320 ROUJAN, FRANCE [N. V. RAMANA, J.] 
On conjoint reading of'decree', 'judgment' and 'order' from any angle, A 
the order passed by the English Court falls within the definition of'Order' 
and therefore, it is a judgment and thus becomes a "decree" as per 
Explanation to Section 44A(3) ofCPC. In this case, the Court at England, 
after following the principles ofnaturaljustice, by recording reasons and 
very importantly basing on the application of the appellant itself, has 8 
conclusively decided the issue with regard to jurisdiction and passed the 
order coupled with costs. Hence in our considered opinion, the order 
passed by the Foreign Court is conclusive in that respect and on merits. 
Hence executable as a decree and accordingly the issue is answered. 
22. In re Issue Nos. 3 & 4 -
The next contention advanced is 
that the decree for costs does not attract the Explanation II of Section C 
44A which concerns itself with taxation or other charges oflike nature 
or in respect of fine or other penalty. We have to first see the nature of 
the costs imposed by the decree for interpreting the relevant explanation. 
Before referring to the principles/guidelines in the decisions cited, it would 
be apposite to adve1t to the concept of'costs' and the general principles D 
governing the award of costs. Law Commission in its 24Q•h Report on 
"Costs on Civil Litigation" provides valuable resource on nature of costs 
in
India as well as England. 
23. The 'costs' signifies the sum of money which the Court orders 
one party to pay to another party in respect of the expenses of litigation E 
incurred. Except where specifically provided by the statute or by rules 
of the Court, the costs of proceedings are in the Court's discretion. 
24. In Jolinstone v. Tlie Law Society of Prince Edward Is/a11d1, 
the Canadian Court of Appeal speaking through McQuaid, J described 
costs in the following words : 
F 
" ... the sum of money which the court orders one party to pay 
another party in an action as compensation for the e~pense of 
litigation incurred. The definition continues to the effect that costs 
are awarded as compensation (i.e. reimbursement); there is, unlike 
damages, no restitution in integrum, that is to say, no concept in G 
costs, as there exists in damages, that the injured person should 
be placed, in so far as money can do so, in the same position as he 
occupied before the injury was suffered". 
25. Under the Federal Rules of Civil Proceeding (USA), "costs 
2 2 PEIR B-28 ( 1988) 
H
590 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
shall be allowed as of course to the prevailing party unless the court 
otherwise directs." In most of the States in US, the attorney's fee is not 
allowed as litigation cost. Costs can even be on interim Application. A 
bill ofcosts is a certified, itemized statement of the amount of the expenses 
incurred in bringing or defending a law suit/proceeding. The charges/ 
expenses claimed are taxed by the Court or its officer according to the 
procedural rules and set of norms. 
26. The basis of assessment of costs in UK has been explained 
thus in Halsbury's Laws of England: 
"Where the court is to assess the amount of costs (whether by 
summary or detailed assessment) it will assess those costs on the 
standard basis or on the indemnity basis, but the court will not in 
either case allow costs which have been unreasonably incurred 
or are unreasonable in amount. Where the amount of costs is to 
be assessed on the standard basis, the court will only allow costs 
which are proportionate to the matters in issue and will resolve 
any doubt which it may have as to whether costs were reasonably 
incurred or reasonable and proportionate in amount in favour of 
the paying party. Where the amount of costs is to be assessed on 
the indemnity basis, the court will resolve any doubt which it may 
have as to whether costs were reasonably incurred or were 
reasonable in amount in favour of the receiving party. Where the
court makes an order about costs without indicating the basis on 
which the costs are to be assessed, or makes an order for costs to 
be assessed on a basis other than the standard basis or the 
indemnity basis, the costs will be assessed on the standard basis." 
27. The Patt 44 of the Civil Procedure Rules (CPR) in the USA 
contains general rules about costs and entitlement to costs. The rules 
are supplemented by practice direction. However, part 44 does not apply 
to the assessment of costs to the extent different provisions exist, for eg, 
Access to Justice Act, 1999 and the Legal Aid Act, 1988. Further, the 
general rule that the unsuccessful party will be ordered to pay the costs 
of the successful party unless the court makes a different order does not 
appl~_ to family proceedings. 
28. It is important to note that a penalty in this sense normally 
means a sum payable to the State, not to a private claimant, so the costs 
imposed on the b«sis of the indemnity is not a penalty or tax. Therefore, 
the Explanation II to Section 44A does not refer to the costs JIS
M/S ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
591 
FOS 34320 ROUJAN, FRANCE [N. V. RAMANA, J.] 
contemplated under Section 35 of the CPC. The costs having been 
A 
quantified have assumed the character of a money decree for costs and 
cannot be equated, either with a fine or penalty which is imposed on a 
party by the Court or taxes claimed and are taxes payable to a local 
authority, Government, or other charges of a like nature. 
29. The appellant has advanced an argument that as per Section 
B 
35A of the CPC, no Court should pass any order for the payment of 
compensatory costs exceeding Rs.3,000/- or exceeding the limits of its 
pecuniary jurisdiction of the said Court whichever amount is less. It is 
thus argued by the appellant that in the present case, since the costs 
imposed exceed the bar imposed by Section 35A, therefore, the order of 
the English Court is not executable in the present case. 
C 
30. This argument lacks merit and deserves to be rejected. A bare 
perusal of Section 35A shows that bar operates on the Indian Courts 
with regard to imposition of costs in respect of false or vexatious claims 
or defences. The bar is not attracted in the present case as the Court 
that has ordered the costs is the High Court of Justice in England which 
is not governed by the provisions of the CPC and that the respondent 
merely approached the Indian Courts for the satisfaction of a foreign 
decree. Moreover, the nature of compensatory costs prescribed in Section
35A of the CPC are different from 'costs' dealt with in Section 35 of the 
CPC as the former are limited to the claims of defences of a party 
which are frivolous or vexatious. It is settled that before awarding costs 
under Section 35A of the CPC, the Court should satisfy itself that the 
claim was false or vexatious to the knowledge of the party who put it 
forward and that the interests of justice require the award of such 
compensatory costs. In the present case, no claim has been advanced 
by the appellant that the claim filed by the respondents is false or 
vexatious, therefore, the bar in Section 35A is not applicable. Accordingly 
the issue is answered. 
31. In re Issue No. 5 -
It is the case of the appellant that the 
claim for interest on costs is not recognized in the Indian law. It is to be 
noted that matters of procedure are to be governed by the lex Jori, 
whereas the matters of the substance are governed by lex causae. In 
this case, the question whether the interest on sum of decree of costs to 
be executed in India is a matter of substance as the interest on decree is 
a substantive right of the decree holder and does not concern itself with 
the procedural law of the forum. 
D 
E 
F 
G 
H
592 
A 
B 
SUPREME COURT REPORTS 
[2016] 8 S.C.R. 
32. The appelfantreiied upon Section 35 of the CPC which enables 
Courts in India to impose litigation costs at the discretion of the Court. 
However, there is no provision under the CPC or the Interest Act, 1978 
which permits imposition of interest on Jitigation costs. Further tried to 
impress upon that the amended Section 35(3) of the CPC permitted a 
Civil Court to grant interest on costs. The unamended Section 35(3) 
stated as follows: 
The Court may give interest on costs at any rate not exceeding 
six per cent per annum, and such interest shall be added to the 
costs and shall be recoverable as such. 
c This Provision was consciously omitted in 1956 (pursuant to Act 66 of 
I 956). In view of the deletion of Section 35(3) of the CPC, it is argued 
that grant of interest on costs is no longer recognized under India law. 
33. In this context, it is educative to read the following comments 
made in the Debate on the Bill against the deletion of Section 35 (3), by 
D 
Hon'ble Member of Lok Sabha Shri Tek Chand; 
" .. In this connection, a reference has been made to section 35, 
sub-section (3), which according to clause 3 of the Bill, is to be 
omitted. Not that I have usurious propensities, but I do not like 
this provision. It is true that there should not be any profiteering 
E 
by the people; I concede that, but there are instances when the 
costs amount to five figures or more, and there is no reason why, 
when an
unsuccessful party is subjecting the successful party not 
only to a long dilatory and unending dispute, but also to frivolous 
and vexatious litigation whereby he is out of pocket to the tune of 
several thousands, the law or the legislature should be so solicitous 
F 
that such person should not pay interest, if he does not propose to 
pay or if he intends to delay the payment of the costs. One 
unfortunate and unhappy feature of administration of civil law in 
our land, is apart from delays and objections of frivolous and 
vexatious nature, justice is made available, if at all, at a very high 
G 
and exorbitant price". 
34. The Hon'ble Member of Lok Sabha thus articulated that 
omitting sub-section (3) would encourage delay in realization of decree 
costs. A reference to the Report of Law Commission and the views 
expressed in Debate on the Bill, as extracted in the Law Commission 
H 
Report (supra), would indicate that the consequences of deletion of sub-
M/S ALCON ELECTRONICS PVT. LTD. v. CELEM S.A. OF 
593 
FOS 34320 ROUJAN, FRANCE [N. V. RAMANA, J.] 
section (3) of Section 35 were very much considered by the Parliament. 
A 
When the idea of deletion is not to encourage interest on costs as a 
source of income to the litigants, the Parliament did not choose positively 
to prohibit interest on costs by inserting suitable clause in Section 35. 
35. lt is to the reciprocal advantage of the Courts of all nations to 
enforce foreign rights as far as practicable. To this end, broad recognition 
B 
of substantive rights should not be defeated by some vague assumed 
limitations of the Court. When substantive rights are so bound up in a 
foreign remedy, the refusal to adopt the remedy would substantially 
deprive parties of their rights. The necessity of maintaining the foreign 
rights outweighs the practical difficulties involved in applying the foreign c 
remedy. In India, although the interest on costs are not available due to· 
exclusion of Section 35(3), the same does not mean that Indian Courts 
are powerless to execute the decree for interest on costs. Indian Courts 
are very much entitled to address the issue for execution of the interest 
amount. The right to 8% interest as per the Judgments Act, 1838 of UK 
can be recognized and as well as implemented in India. 
D 
36. Therefore, we are of the considered opinion that the Execution 
Petition filed by the Respondents for execution of the order dated l 9'h 
October, 2006
passed by the English Court is maintainable under the 
relevant provisions. Therefore, we do not find any reason to interfere 
with the impugned order. Resultantly, the appeal is dismissed with costs. 
E 
Nidhi Jain 
· Appeal dismissed.