When judgments are considered due and enforceable in your jurisdiction? If the debtor fails to satisfy the judgment, what is the procedure to enforce it in the local courts?
In terms of Section 33 of CPC, after hearing the case, the court shall pronounce judgment and decree shall follow. The decree is enforceable in terms of Section 38 read with Order XXI of CPC. There is no statutory time-limit to pay the debt amount because, generally the decree itself specifies the time limit to satisfy the decree.
Further, in terms of Section 19 (21) of RDDB Act, a Recovery Certificate is issued and in terms of Section 25 of RDDB Act, a Recovery Officer is appointed to execute/ enforce the judgment of the tribunal.
An arbitral award can be executed like a decree passed under CPC and in terms of Section 36 of Arbitration & Conciliation Act, 1996 read with Order XXI of CPC.
Payment in instalments
If the judgment calls for payment by the debtor in instalment, then the debtor shall be called a defaulter on the date when the instalment was due and payment was not made.
Procedure for enforcement
Procedure for enforcement of decree is governed under Order XXI of CPC, wherein execution of all kinds of decree is given in detail.
Further in terms of Section 25 of RDDB Act, the recovery can be done by various modes which have already been elaborated in the said Act.
As per Limitation Act, 1963, different period of limitation is provided for different types of decrees. The same are as follows:
- Article 135 – The limitation for filing execution of a decree granting a mandatory injunction is three years;
- Article 136 – The limitation for filing execution of a money decree or order granting delivery of any property or any order of a civil court is twelve years. However, for a decree granting a perpetual injunction, there is no limitation prescribed.
What are the rules in relation to filing an appeal against judgments rendered in the first and second instance?
In terms of Section 13 of Commercial Courts Act, 2015, an appeal in case of a decree passed under CPC shall lie in terms of Order XLIII of CPC, before Commercial Appellate Division established at High Court. No second appeal is prescribed under CPC against an order passed in an appeal arising out of a commercial dispute.
In case of a proceeding before DRT, an appeal shall lie before the DRAT in terms of Section 20 of RDDB Act.
In case of an arbitral award, no appeal is prescribed, however, an application can be filed under Section 34 of Arbitration & Conciliation Act, 1996 seeking to set aside the arbitral award.
Grounds for appeal
There can be various grounds for appeal under CPC and RDDB Act. Such grounds for challenging the judgment may inter alia include, that:
- the judgment is in contravention of any law for the time being in force in India;
- the judgment is suffering from any material irregularity which is error apparent on record;
- the procedure was not correctly followed;
- the judgment was passed ignoring the evidence;
- the judgment is in contravention of public policy of India.
In terms of Commercial Courts Act, 2015, an appeal against a judgment passed under CPC, can be filed within sixty days from the date of judgment.
An appeal under RDDB Act, can be filed before DRAT within thirty days. However, in case of delay in filing the appeal, the delay may be condoned by DRAT in its discretion, if the Appellant provides sufficient explanation for such delay.
How long do local courts normally take to determine and enforce debt recovery claims?
In so far as a civil action under CPC is concerned, there is no time limit prescribed and courts ordinarily takes 3-5 years to finally dispose off a suit. However, in case of a suit where summary procedure has to be followed, the same has to be disposed off in a time bound manner prescribed therein.
Under RDDB Act, the recommended time to complete the recovery proceedings under Sections 19(24) of the said Act is 180 days from the receipt of the application.
In an arbitration, as per Section 29A, the proceeding has to be concluded with twelve months of completion of pleadings, which can be extended for six months by the mutual consent of parties. In case further extension is required, an application is to be file before the competent Court.