MEENAKSHI SAXENA vs. ECGC LTD(FORMERLY KNOWN AS EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD)

REPORTABLE THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No.5681/2018 (Arising out of SLP (C) No. 6286 of 2017) Meenakshi Saxena & Anr. …Appellant (s) Versus

  JUDGMENT   AMANA   N.V. R , J.   1. Leave granted. This   case   arises   out   of   the   impugned   order   dated 2. 20.10.2016, in Revision Petition No. 614 of 2015, passed by the   National   Consumer   Disputes   Redressal   Commission [ hereinafter   referred   as   ‘ ’   for   brevity]   wherein   the NCDRC NCDRC has allowed the Revision and set aside the order of Signature Not Verified Digitally signed by VISHAL ANAND Date: 2018.05.18 16:07:44 IST Reason: the   District   Forum   which   was   confirmed   by   the   State Commission. 1 3. A brief reference to the facts of the case necessary for the disposal of this case are that, the appellant had purchased an   insurance   policy   No.   SCR0000093,   dated   27.07.2000, from respondent no. 1 against any loss suffered due to the reason of risks involved in the export of goods from India. Under Clause 13 of the contract, the respondent had agreed to pay 90% of the accrued loss, in the following manner­ Clause   13­   Percentage   of   loss   payable:   The portion   of   the   amount   of   loss   which   the Corporation hereby agrees to pay shall be 90%. 4. It would be necessary to note that the parties had explicitly included a clause concerning the rate of currency exchange in the following manner­ :   All   payments Clause   17   ­   Rate   of   Exchange under this policy shall be in Indian Rupee at the head   office   of   the   Corporation   and,   for   the purpose of payment of premiums and losses, the gross invoice value of the shipments invoiced in a foreign currency shall be converted into Indian Rupee at the Bank buying rate of exchange at Mumbai   on   the   date   of   the   relative   shipment PROVIDED THAT, devaluation of the currency in which the buyer has to pay takes place before the claim   is   paid,   the   amount   claimed   in   Indian currency shall be based on the devalued rate. 2 5. Coming back to the narration of the facts, appellant had sent a consignment of the goods by invoice no. 1, dated 01.04.2002, to M/s. Parveena Enterprises (NF) France for value of 11875.75 Euro vide bill of Lading No. PONLDEL 27008966 dated 24.04.2002. Even though the purchaser of the goods accepted the delivery, but failed to make payments to the appellant [seller]. After considering the claim of the appellant, respondent no. 1 offered to pay a compensation amounting to 79.5% of the loss, instead of 90% of the loss. 6. Aggrieved by the same, appellant filed a complaint before the District forum against the respondents, alleging deficiency in service on the part of the respondent. 7. The District Forum by order dated 12.10.2006, allowed the complaint and directed the respondent herein (Insurer) to pay as under­ We accept the present complaint and direct the   Ops   to   pay   the   90%   of   the   value   of 11875.75 Euro  (goods exported by the petitioner vide   Lading   No.   PONLDEL   27008966   dated 24.04.2002) together with interest at rate of 12% per   annum   from   24.7.2002   (because   three months time was sufficient for the OPs to settle the   claim) till the  realization together  with Rs. 3300/­ as litigation expenses within a period of 3 30 days from the date of receipt of copy of this order. (emphasis provided) 8. Even the appeal before the State Commission and a further revision   before   the   NCDRC   were   ended   up   in   dismissal, therefore,   the   order   passed   by   the   District   Forum   with regard to the liability of the respondent/insurance company has attained finality. 9. Despite the order dated 12.10.2006, passed by Ld. District Forum,   when   the   respondent   no.   1   failed   to   make   the payment to the petitioner­complainant as per the terms set­ out therein, the appellant preferred an Execution Petition No. 34 of 2013 before the District Forum, Panipat. During the pendency of the execution petition, the respondent paid a sum of Rs. 11,23,906/­ to the appellant/decree holders calculated   on   the   basis   of   conversion   rate   of   11,875.75 Euros as on 24.04.2002 and the interest calculated thereon. The   appellant/decree   holders   while   accepting   the   said payment   disputed   that   the   payment   satisfied   the   decree, mainly on the plea that value of the Euros payable should 4 have been calculated on the conversion rate applicable on the date of payment. 10. The   District   Forum   taking   into   consideration   all   these aspects,   has   allowed   the   Execution   Petition   with   the following observations: “After hearing counsel for both the parties and after perusal of the order of this forum it is very clear that this forum has passed an order to pay 90% of value of 11,875.75 Euro. As such, the OP was   to   pay   the   amount   in   Indian   currency whichever   was   the   value   of   Euro.   Specifically, when court is passing an order for payment of amount as value of Euro the OP is bound to pay the   value   of   Euro   when   he   is   making   the payment. Order of this forum was passed in 2006 but till 2013 ECGC has not paid the amount to the complainant in compliance of the order.  Now at   this   stage   it   is   well   settled   law   that executing court cannot go behind the decree under execution. In view of the order of this Forum, the ECGC has to pay the value of Euro when he is paying the amount.  Amount is to be   paid   in   value   of   Euro   whichever   value exists at the time of payment, in compliance with the order of this Forum. In view of the above discussion, certainly ECGC has not paid the complete amount as per order passed by this Forum. Hence ECGC is further directed to   pay the amount    (sic) ( emphasis supplied ) 11. Respondent/insurance   company   being   aggrieved   by   the aforesaid order of the Executing Court approached the State 5 Commission of Haryana in Revision Petition No. 66 of 2014. The State Commission of Haryana did not find any merit in the petition and dismissed the same. Again, the respondent approached the NCDRC in revision being Revision Petition No. 614 of 2015. Interestingly, the NCDRC, by order dated 24.03.2015,   dismissed   the  revision  petition  as  withdrawn with   a   liberty   to   the   Respondents   to   approach   the appropriate forum. 12. However, thereafter, respondents approached this court by filing   a   special   leave   petition   being   SLP   (C)   No.   21085­ 86/2015 (later converted into Civil Appeal No. 6108­6109 of 2016). This Court by order dated 11.07.2016, while allowing the appeal, remanded the matter back to the NCDRC for consideration on merits under the revisional jurisdiction in the following manner­ We have heard learned counsel for the parties at some length. Our attention has been drawn by learned counsel for two parties to an order dated th 9  January, 2015 passed by a Full Bench of the National   Commission   in   Revision   Petition   No. 1792 of 2012 whereby the National Commission has taken the view that although no appeal is maintainable   against   the   order   passed   by   the State   Commission   in   exercise   of   its   appellate jurisdiction,   any   order   passed   by   the   State Commission   in   exercise   of   its   appellate   or revisional  jurisdiction can be challenged before 6 the   National   Commission   by   way   of   revision under   21(b)   of   the   Consumer   Protection   Act. Learned counsel for the appellant submits that the   appellant   is   ready   to   take   resort   to   the revisional   jurisdiction   of   the   National Commission   in   the   light   of   the   Full   Bench decision of the National Commission, mentioned above, and that the matter could for that purpose be remitted back to the National Commission. We accordingly allow these appeals but only th   to the extent that order dated 24       march, 2015   passed   by   the   National   Commission dismissing the revision petition filed by the appellant   shall   stand   set   aside,   Revision Petition   No.   614   of   2015   restored   and remitted   back   to   the   National   Commission for the disposal in accordance with the law in the light of the Full Bench decision of the National Commission, referred to earlier. ( emphasis supplied ) 13. On remand NCDRC, by order dated 20.10.2016, which is impugned   before   us   has   allowed   the   revision   of   the respondent on the ground that the Clause 17 of the Contract had explicitly provided for the rule for calculating the rate of conversion in the following manner­ 11.  On bare reading of the above, it is clear that as per the insurance contract, the opposite party insurer was required to pay the insurance claim as per 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 7 shipment   for   which   the   invoice   was   issued. Undisputedly, sum of Rs. 11,23,906 paid by the judgment debtor 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.   Therefore,   it cannot be said that any further amount is due from the opposite party under the decree. Both the fora below have passed the impugned order in utter disregard of the expressed term no. 17 of the   insurance  contract.  The  order  thus  suffers from   material   irregularity   and   cannot   be sustained. 14. Aggrieved by the order of the NCDRC, the petitioner is in appeal before this Court by a special leave petition. Heard   counsel   appearing   on   behalf   of   both   parties   and 15. perused the material available on record. 16. Before we dwell on to the merits of this case, we would like to note certain aspects of execution of a decree. Section 25 and 27 of the Consumer Protection Act, 1986, provides for execution of awards. It would be relevant to note that the ‘execution’ means­ The word ‘execution’ in its widest sense signifies the   enforcement   of   or   giving   effect   to   the judgments or orders of the court of justice. In a narrower   sense,   it   means   the   enforcement   of those   judgments   or   orders   by   a   public   officer under the writs of fierifacias, possession, delivery, 8 sequestration,   fierifacias   de   bonisecclesiaticis, etc. 17. The amended Section 25 of the Consumer protection Act, which   is   effective   from   15.3.2003   may   be   relevant   to   be noted ­  "25. Enforcement of orders of the District Forum, the   State   Commission   or   the   National Commission­  (1) Where   an   interim   order   made   under   this Act, is not complied with, the District Forum or the   State   Commission   or   the   National Commission, as the case may be, may order the property of the person, not complying with such order to be attached.  (2) No attachment made under sub­section (1) shall remain in force for more than three months at   the   end   of   which,   if   the   non­compliance continues, the property attached maybe sold and out of the proceeds thereof, the District Forum or the   State   Commission   or   the   National Commission   may   award   such   damages   as   it thinks fit to the complainant and shall pay the balance, if any, to the party entitled thereto.  (3) Where   any   amount   is   due   from   any person   under   an   order   made   by   a   District Forum,   State   Commission   or   the   National Commission, as the case may be, the person entitled   to   the   amount   may   make   an application to the District Forum, the State , as Commission or the National Commission the case may be, and such district Forum or the State   Commission   or   the   National   Commission may issue a certificate for the said amount to the 9 Collector of the district (by whatever name called) and   the   Collector   shall   proceed   to   recover   the amount in the same manner as arrears of land revenue." ( emphasis supplied ) The whole purpose of Execution proceedings is to enforce 18. 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. 19. In   the   facts   and   circumstances   of   the   case   there   is   no dispute about the fact that the liability of the respondent company to a tune of 90% value of 11875.75 Euros with interest   at   the   rate   of   12%   from   24.7.2002   has   attained 10 finality.     As   per   the   calculation   memo   filed   by   the appellant in execution proceedings she claimed total amount of Rs. 25,76,883.00 i.e  principal amount of Rs. 7,61,105.00 calculated @ Rs 71.21 per Euro as on 17.4.2013 being 90% value of 11,875.75 Euros. Further interest granted by the court   from   24.7.2002   to   24.4.2013   to   a   tune   of   Rs. 18,12,478.00. 20. 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 herein. 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. 11 21. In the light of the above findings of the forums, in the light of the arguments advanced, we have to examine whether the interpretation adopted is in the process of giving a true effect to   the   decree   or   they   have   gone   beyond   the   decree   by drawing a new 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. In   a   contractual   matter,   when   the   decree   is   silent   with 22. 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 court   is no more  , as this court has an occasion to deal with res integra 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. The contract mandated a part payment in the foreign currency i.e., French francs. Due to belligerent 12 situation prevalent between India and Pakistan in 1965, the contract   was   suspended.   In   the   meanwhile   the   Indian currency was devalued resulting in Forasol claiming higher conversion rate. As the dispute was not settled, the matter was referred to an arbitration. For the present, it is sufficient to   note   that   by   the   award   of   the   arbitrator/Umpire mandated   conversion   at   the   rate   of   FF   1000   equal   to 1517.80 instead of exchange rate of FF 1.033 equal to Re. 1.000. The aforesaid award was filed before the Delhi High Court, which accordingly passed the decree on 07.05.1975 without any objections from the parties as to the form.  23. Thereafter, the Forasol filed an application for execution of the award being Execution No. 77 of 1976. ONGC objected to   the   aforesaid   execution   by   contending   that   the   rate specified   in   the   award   was   to   be   limited   to   the   interest granted   thereon   and   the   same   does   not   affect   the   main contractual amount. The learned single Judge negatived all the   contentions   of   ONGC.   On   appeal   before   the   Division Bench, the High Court accepted the contention of ONGC and therefore, Forasol appealed before this court. The question 13 before the court was concerning choosing the best date for the rate of conversion was expressed as under­ 23.   The   question   which   now   remains   to   be considered in Forasol’s appeal is the date to be selected by the Court for converting into Indian Rupees the French Franc part of the said   award   in   respect   of   which   no   rate   of exchange   has   been   fixed   either   by   the   said . contract or the said award ( emphasis supplied ) 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 date. 25. Further this court recognized the discretion of the Court to select the relevant dates and pointed out some of them in the following manner­ 24.   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 14

( emphasis supplied ) 26. Ultimately this Court on an extensive analysis came to a conclusion in the following manner­

15 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 16 foreign   currency   sum   claimed   in   the   plaint subject   to   the   permission   of   the   concerned authorities   under   the   Foreign   Exchange Regulation Act, 1973, being 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 17 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 18

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 19 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.

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.

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 20 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.

NCDRC   which   is   based   on   sound   principles   of   law. Accordingly, this appeal is dismissed. ……………………………..J. AMANA                (N. V. R )    ………………………………J.                                                          (S. A BDUL  N AZEER ) N EW  D ELHI , M AY   18, 2018. 21