M/s. Rana Chairs vs Director General (Town Planning), K.M.C. And Ors

The affidavit placed in support of the execution petition traces the course of the litigation from its inception to the revival of the decree for enforcement.

The deponent, proprietor of M/s. Rana Chairs and authorised to represent the decree-holder, states that the suit was instituted for recovery of Rs.50,83,155/-, together with pendente lite and future interest at the rate of 18% per annum and costs. The claim arose from the supply, fitting and installation of chairs at Sarat Sadan Hall, Behala, the contract having been secured after the plaintiff emerged as the lowest tenderer.

It is recorded that an ex parte decree dated 17th September, 2015 was passed in CS (OS) No. 1090 of 2013 by the High Court of Delhi. An execution petition thereafter came to be instituted before the Calcutta High Court. Upon notice, the judgment-debtor was directed to deposit the decretal amount within three weeks. During the currency of the execution proceedings, the judgment-debtor invoked Order IX Rule 13 of the Code of Civil Procedure before the Delhi High Court, where an interim order dated 26th April, 2017 stayed the operation of the decree. In consequence, the execution proceedings remained in abeyance.

The affidavit further narrated that, by judgment and order dated 5th October, 2018, Hon'ble Mr. Justice Manmohan dismissed the application under Order IX Rule 13 CPC, vacated the interim protection declined the plea relating to limitation. A certified copy of the judgment was annexed in support of the execution application. The deponent affirmed no appeal had thereafter been preferred against the said judgment, rendering the decree capable of immediate execution. The affidavit concluded with a prayer for appropriate orders in terms of the tabular statement, asserting that further delay in execution would occasion substantial prejudice to the decree-holder.

The annexed judgment of the Delhi High Court revealed that the defendants sought to set aside the ex parte decree by attributing their absence to legal advice suggesting that the suit would fail on the ground of territorial jurisdiction. They contended that knowledge of the decree was acquired only upon receipt of notice in the execution proceedings and relied upon the principles governing Order IX Rule 13 CPC, particularly the exposition in G.P. Srivastava v. R.K. Raizada. The plaintiff resisted the application by asserting that the defendants had been duly served, had consciously elected to remain absent, and had approached the Court beyond the prescribed period of limitation.

After examining the rival contentions and the governing precedents, including Parimal v. Veena alias Bharti, the Delhi High Court held that the defendants possessed full knowledge of the suit and had deliberately refrained from entering appearance upon a speculative assumption that the action would fail for want of territorial jurisdiction. Such conduct, the Court held, did not furnish a legally acceptable explanation within the ambit of "sufficient cause" under Order IX Rule 13 CPC. The application was consequently dismissed both on the ground of limitation and on merits, thereby leaving the ex parte decree intact and capable of execution.

The chronology reflects a sustained course of execution proceedings undertaken by the decree-holder following the ex parte decree dated 17th September, 2015, whereby the Delhi High Court awarded a sum of Rs.50,83,155/-, together with pendente lite and future interest at the rate of 18% per annum and costs quantified at Rs.1,00,000/-.

Execution commenced before this Court, leading to an order dated 28th November, 2018, whereby the bank account of the Kolkata Municipal Corporation was attached to the extent of approximately Rs.52 lakhs. Though the Corporation thereafter preferred RFA (OS) No. 8 of 2019 before the Delhi High Court with an application seeking condonation of delay, the appeal came to be dismissed on 4th July, 2022. The challenge carried to the Hon'ble Supreme Court by way of Special Leave Petition also met the same fate on 28th April, 2023.

Consequent upon the decree attaining finality, the Executing Court directed release of the attached amount in favour of the decree-holder on 16th May, 2023. Thereafter, by order dated 28th February, 2024, the learned Single Judge directed payment of Rs.77,02,308.02 towards decretal interest. The subsequent intra-court appeal resulted in a direction to the Registrar, Original Side, to compute interest at the contractual rate of 18% per annum on the decretal principal. The Registrar's computation, placing the payable amount at Rs.82,02,526.68, together with continuing interest from 13th June, 2024 until realization, received affirmation by the Division Bench on 19th September, 2024.

A further Special Leave Petition preferred by the Corporation was dismissed, liberty being reserved only to seek review on the limited question relating to computation of interest after deposit. Pursuant thereto, the review proceedings culminated in a recalculation by the Registrar, followed by an order dated 18th July, 2025, directing payment of Rs.76,48,414.50 within eight weeks, subject to further interest in default. On 11th August, 2025, the Division Bench modified the order by restoring the rate of interest to 18% per annum, in consonance with the decree passed by the Delhi High Court. The Corporation's final challenge before the Hon'ble Supreme Court also proved abortive, the Court clarifying by order dated 22nd September, 2025 that payment was to be effected strictly in accordance with the decree of the Delhi High Court. The record further reflects that Rs.25 lakhs has been paid only towards the interest component in terms of the earlier judicial directions, leaving the balance liability to be satisfied in accordance with the decree and the subsequent orders passed in execution.

The decree dated 17th September, 2015 directs payment of the principal sum of Rs.50,83,155/-, together with pendente lite and future interest at the rate of 18% per annum, litigation costs of Rs.1,00,000/-, and taxed costs of Rs.52,876.50. The decree contains no stipulation authorising capitalisation of accrued interest or levy of interest upon the interest component.

The records disclose that the judgment-debtor remitted a sum of Rs.52,15,317/- on 31st May, 2023, followed by a further payment of Rs.25,00,000/- on 17th November, 2023. The first payment satisfied the principal decretal amount together with the litigation costs and substantially discharged the taxed costs. The remaining taxed costs stood satisfied from the subsequent payment, whereafter the balance of the said payment became adjustable towards the accrued interest alone. Upon discharge of the principal on 31st May, 2023, the foundation for further accrual of future interest ceased. The decree furnishes no warrant for treating the accumulated interest as principal or for levying interest upon such interest.

The decree dated 17th September, 2015 passed by the High Court of Delhi has attained finality. The challenge thereto before the Division Bench of the Delhi High Court failed. The Special Leave Petition preferred before the Hon'ble Supreme Court also did not succeed. The Hon'ble Supreme Court, while declining interference, directed that payment shall be effected strictly in accordance with the decree passed by the High Court of Delhi. The decree, therefore, constitutes the sole source of rights and liabilities governing the present execution proceedings.

The decree awards recovery of the principal sum adjudged of Rs.50,83,155/-, together with pendente lite and future interest at the rate of eighteen per cent per annum, taxed costs of Rs.52,876.50, and litigation costs quantified at Rs.1,00,000/-.

Execution of a decree must remain confined within its four corners. An Executing Court possesses no jurisdiction either to enlarge or curtail the substantive rights flowing from the decree. The decree has to be enforced in the form in which it has attained finality. Equally, the computation undertaken in execution cannot travel beyond the express mandate contained therein.

Section 34 of the Code of Civil Procedure assumes considerable significance in this context. The Legislature has consciously employed the expression "principal sum adjudged" while conferring power to award future interest. The statutory language preserves a distinction between the principal amount adjudged and the interest awarded thereon. Unless the decree itself directs capitalisation or compound interest, accrued interest retains its independent character and does not merge with the principal so as to become capable of earning further interest.

The principles enunciated by the Hon'ble Supreme Court in Central Bank of India v. Ravindra, (2002) 1 SCC 367, explained that interest does not automatically become part of the principal in the absence of a contractual, statutory or decretal stipulation permitting capitalisation. The Constitution Bench in Gurpreet Singh v. Union of India, (2006) 8 SCC 457, while dealing with appropriation of payments in execution, reiterated that the manner of appropriation must accord with the decree and the governing legal principles. These decisions furnish the interpretative framework within which Section 34 must be applied.

The Registrar's report proceeds upon the basis that after deduction of the payment made on 31st May, 2023, the outstanding balance constituted the foundation for further calculation of interest at the decretal rate. The same exercise was repeated after adjustment of the payment made on 17th November, 2023.

The question is whether such computation accurately reflects the decree.

The decree itself does not authorise annual rests, capitalisation of accrued interest or levy of compound interest. Nor does it provide that interest already accrued shall merge with the principal so as to constitute a fresh principal attracting further interest. The order of the Hon'ble Supreme Court directing compliance strictly in accordance with the Delhi High Court decree necessarily obliges the Executing Court to adhere to the decree as drawn and not to introduce, through the process of computation, a liability absent from its terms.

At the same time, the Division Bench, by its order dated 16th April, 2024 in IA No. GA 1 of 2024 APOT No. 94 of 2024 with EC No. 5 of 2017 directed that payments made by the judgment-debtor shall be deducted from the aggregate amount then due and that interest would continue upon the balance. Such direction forms part of the binding judicial record. The expression "balance sum" employed therein must receive a construction consistent with Section 34 of the Code of Civil Procedure and the decree itself. It cannot be interpreted in a manner that would virtually substitute the expression "principal sum adjudged" occurring in Section 34 of the Code of Civil Procedure or enlarge the decree by permitting interest upon accrued interest where the decree contains no such stipulation.

The Registrar's report does not indicate any examination of this legal distinction. The computation proceeds entirely upon arithmetic without addressing whether the balance remaining after adjustment of the payments represented the unpaid principal or substantially consisted of accrued interest. Such enquiry was indispensable, for the character of the balance directly determines the permissibility of any subsequent levy of interest under Section 34 of Civil Procedure Code.

In these circumstances, this Court is unable to accept the Registrar's computation as a complete reflection of the decree without first examining whether the methodology adopted accords with the statutory limitation contained in Section 34 and the binding direction of the Hon'ble Supreme Court to execute the decree strictly according to its terms.

Accordingly, the Registrar's report is set aside.

The matter is remitted to the learned Registrar, Original Side, for preparation of a fresh statement of accounts.

While undertaking the exercise, the learned Registrar shall:

The learned Registrar shall complete the exercise within four weeks from the date of communication of this order.

Upon submission of the fresh report, the matter shall be placed before the Court for final orders.