Decree Below Rs 2 Crore Can Still Be Executed If Commercial Suit Was Filed For A Higher Amount: Delhi High Court

The Delhi High Court has ruled that it can execute a decree of less than Rs 2 crore if the commercial suit behind it was originally filed before the Court for a higher amount. Justice Subramonium Prasad rejected an objection to an execution petition filed by Ozone Spa Pvt Ltd against Co-Incept Hospitality Pvt Ltd and others.

Background

Ozone Spa and Co-Incept Hospitality signed a ten-year franchise agreement on December 28, 2013. It allowed the judgment debtors to run a gym, spa and salon in Rajouri Garden under the Ozone brand. After disputes arose, Ozone Spa sued for Rs 2,53,66,750 in CS (COMM) 870/2018. The parties settled on July 5, 2018, and the Court decreed the suit on July 19, 2018 for Rs 1,19,43,000. The decree holder later alleged that the judgment debtors stopped paying royalty, failed to issue post-dated cheques and closed the outlet without notice.

Judgment Debtor No. 4 argued that the amount was below the Rs 2 crore “specified value” for commercial disputes. It also said Sections 38 and 39 of the Code of Civil Procedure (CPC) did not apply to commercial suits, and relied on a Division Bench ruling in Asian Patent Attorneys Assn. (Indian Group). The decree holder countered that Sections 37 and 38 CPC allow the court that passed a decree to execute it, even if its pecuniary limit has changed.

The Court relied on earlier Delhi High Court rulings in Gulab Chand Sharma and Pearey Lal and Sons. These held that a court ceases to exist only upon complete abolition, not because its pecuniary jurisdiction changes. On the Division Bench ruling, the Court said:

“The said Judgment deals with an Administrative Order dated 17.11.2016 which directed the Registry of this Court to not entertain the execution petitions in which the decree passed by this Court is for a value less than Rs. 2 Crores. The Division Bench in the said Judgment quashed the Administrative Order dated 17.11.2016 and categorically observed that the question to entertain such execution petitions which are seeking to enforce a decree of a value less than 2 crores passed by this Court should be decided by the Court which hears it on the judicial side.”

It added that the Division Bench gave no opinion on maintainability. On the Commercial Courts Act argument, the Court observed:

“Section 16 of the Commercial Courts Act states that in a trial of a commercial dispute of a specified value, the provisions of CPC as amended by the Commercial Courts Act shall apply. Sections 37 and 38 CPC, therefore, apply to the decrees passed under the Commercial Courts Act. This Court has the jurisdiction to entertain Suits which are above Rs.2 crores and only this Court can execute a decree in a Suit which was filed in this Court for a value more than Rs.2 crores but the decretal amount is less than Rs.2 crores.”

The High Court rejected the objection to the maintainability of Ozone Spa’s execution petition. It held that the reduction in the amount payable under the settlement decree did not, by itself, deprive the Court of jurisdiction to execute it.

The matter was directed to be listed before the Roster Bench on October 14, 2026.