Consumer Protection Act, 1986:
ss. 25 and 27 – Execution of decree – Decree against insurer holding it liable to pay the insurance amount as agreed – Execution petition – During pendency of the petition, the insurer (judgment debtor) paid the decreed amount – Insured (decree holder) disputed the payment on the ground that value of the foreign currency payable should have been calculated on the conversion rate applicable on the date of payment – District Forum as well as State Commission held that foreign currency conversion rate has to be calculated as on the date of payment – However, National Consumer Commission held that conversion rate has to be as on the date of subject shipment – On appeal, held: Interpretation of decree in a manner which may amount to substitution of a new decree is not countenanced under law – The court has to determine the relevant date for conversion of currency, in accordance with terms and conditions of contract – As per insurance contract in the present case, the insurer was required to pay the insurance claim in accordance with the conversion rate of the invoiced foreign currency on the date of subject shipment for which the invoice was issued – The interpretation given by District Forum and State Commission to the decree in question, is contrary to the terms of the contract and amounts to drawing a new decree which is not permissible – The payment already made by the insurer was as per the terms of the contract and thus the insurer has complied with the decree.
ss. 25 and 27 – Execution proceedings – Power of execution court – Scope of – Held: Executing court while executing a decree cannot go beyond the decree and has to take the judgment on its face value – When decree is ambiguous, it becomes the bounden duty of the executing court to interpret the decree – However, the court has to be very cautious in supplementing its interpretation and conscious of the fact that it cannot draw a new decree. Dismissing the appeal, the Court
HELD: 1. 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. 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. [Para 18] [429-C-E]
2. Admittedly, during the pendency of the execution proceedings an amount of Rs. 4,86,953 as 90% value of 11,875.75 Euros as on 24.4.2002 and interest thereon of Rs. 6,33,653 as directed by the court were paid by the respondent. Both the State Commission and District Commission interpreted the order dt 12.10.2006 observing that Euro conversion rate has to be calculated as on the date of payment and hence the respondent company has to pay the remaining amount. However the NCDRC has taken a different view while interpreting clause 17 of the agreement and concluded that conversion rate has to be as on the date of subject shipment for which the invoice was issued and as the full amount with the same calculation is paid by the respondent, NCDRC has dismissed the revision petition. [Para 20] [429-G-H; 430-A-B]
3. For 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 and if such a clause is not available in the agreement then the courts have to determine the best possible date. In the present facts, 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. 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. The order passed by NCDRC is strictly in accordance with the settled legal position and there is no infirmity with the order. [Paras 27 and 28] [434-E-H; 435-B]
4. 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. The respondent 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. [Para 29] [435-C-E]
Forasol v. ONGC, (1984) Suppl. SCC 263 : [1984] SCR
526 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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