This order decides only Interim Application No. 556 of 2026. It does not decide any remaining objection to execution, the quantification of the amount now due under the UAE decree with interest, or the realisation of the judgment debtors' assets, which remain for the execution proceedings.
- Case
- Suresh Tulsidas Bhatia v. ARF SV 1 Sarl
- Court
- High Court of Bombay
- Decision
- Citation
- 2026:BHC-OS:24233
- Bench
- Abhay Ahuja
- Judgment by
- Abhay Ahuja
- Case numbers
- IA 556/2026 in COMEX 182/2025
- Outcome
- Interim Application No. 556 of 2026 dismissed: the Single Judge declines to reject Commercial Execution Application No. 182 of 2025 or to impound the Sale and Purchase Agreement of 9 September 2021, and the execution proceeds.
The decision
The Bombay High Court has rejected a stamp-duty objection raised to stop the execution in India of a UAE decree assigned by HSBC Bank Middle East to ARF SV 1 Sarl. Justice Abhay Ahuja dismissed Interim Application No. 556 of 2026, filed by the judgment debtors, which sought rejection of the execution application and impounding of the assignment agreement.
The Court held that the objection had already been decided by its order of 1 April 2024 and had attained finality, that the Maharashtra Stamp Act, 1958 does not apply to an assignment executed in the UAE, and that ARF, as assignee of the debt, is entitled to execute the decree as a transferee under section 49 and Order XXI Rule 16 of the Code of Civil Procedure, 1908, and as a person claiming under HSBC under section 146.
Background: a UAE decree, an assignment, and execution in Bombay
On 29 November 2022, the Sharjah Federal Court, Civil Court of Appeal, UAE passed a final judgment directing the Bhatias to pay AED 115,793,092 — approximately Rs. 271.62 crore — with interest at 5 per cent per annum from 23 September 2020 until realisation, to HSBC Bank. The Bhatias had signed personal guarantees on 16 May 2018, and the UAE courts held them liable as guarantors. HSBC had assigned the debt to ARF by a Sale and Purchase Agreement dated 9 September 2021, in the middle of the UAE proceedings, HSBC later closed its execution proceedings in the UAE on 19 January 2024, with nothing realised.
ARF then filed Commercial Execution Application No. 182 of 2025 in the Bombay High Court, seeking execution against the Bhatias' Indian properties and disclosure of their assets. By an order of 1 April 2024, the Court rejected the stamp-duty objection on four grounds, directed the Bhatias to disclose their assets within four weeks, and restrained them from dealing with their assets. Their Commercial Appeal No. 16 of 2025 under section 13 of the Commercial Courts Act, 2015 was dismissed as non-maintainable on 4 February 2025, and their Special Leave Petitions (Civil) Nos. 8759–8760 of 2025 were dismissed as withdrawn by the Supreme Court on 1 April 2025.
The issue: three objections to the execution
In the interim application, the Bhatias sought rejection of the execution application and impounding of the Sale and Purchase Agreement, contending that ARF was not the decree-holder, that it sought execution only by virtue of documents that did not comply with mandatory requirements of law, including payment of proper stamp duty. They also impleaded the authorities under the Maharashtra Stamp Act — the Inspector General of Registration and the Collector of Stamps — for adjudication of the duty payable.
ARF answered that the stamp objection had already been conclusively decided and that the assignment entitled it to execute. Three questions arose: whether the stamp objection could be re-agitated; whether the Stamp Act applies to a UAE-executed assignment; and whether an assignee can execute a decree passed after the assignment.
The rule: finality in execution, and the limits of the Stamp Act
The Court applied the principle that objections raised and decided during the preliminary stage of execution proceedings operate as res judicata at a subsequent stage of the same proceedings, relying on Barkat Ali v. Badrinarain (2008) 4 SCC 615. The order of 1 April 2024 had neither been set aside nor modified, the dismissal of the appeal as non-maintainable did not affect its finality, and withdrawing the special leave petitions meant the applicants had accepted it. An executing court cannot go behind the decree.
The four grounds given on 1 April 2024 were that the Sale and Purchase Agreement was executed in the UAE and is not an instrument relating to a thing to be done in India; that execution of a decree is not a thing to be done under an instrument chargeable with duty; that the bar under the Stamp Act concerns admissibility of evidence at trial and does not apply to an execution application; and that the objection would not come in the way of granting urgent reliefs. On assignment, the Court relied on section 49 of the Code (a transferee holds the decree subject to the equities enforceable against the original decree-holder), Order XXI Rule 16 (execution by a transferee) and section 146 (application by a person claiming under a decree-holder). In Jugalkishore Saraf v. Raw Cotton Co. (AIR 1955 SC 376), the Supreme Court held that a transferee of a debt may apply for execution under section 146 even where the document did not transfer the future decree itself.
The reasoning: a foreign decree cannot be made unexecutable by Indian stamp law
The Court held that the applicants had re-agitated the very same arguments already considered and decided on 1 April 2024, and that they deserved to be rejected. Even on the merits, the submission was untenable: the assignment was executed in the UAE and is not an instrument relating to a thing done or to be done in India, so the Maharashtra Stamp Act cannot apply to it. The execution of the decree "definitely cannot be termed as a thing to be done under an instrument, which is chargeable with duty under the Stamp Act." Accepting it would render any foreign decree or assignment unexecutable if unstamped in India — an absurdity, the Court said.
The Court also rejected the attempt to distinguish between the "enforceability" and the "executability" of a decree, relying on Prysmian Cavi E Sistemi S.R.L. v. Vijay Karia (2026 SCC OnLine Bom 1376), which held that once an award or decree is enforceable it necessarily becomes executable. On the assignment, the Court held that the agreement transferred the debts owing to HSBC, with the security, guarantees and the right to realise the debt. Clause 2.4 entitled ARF to everything conveyed to HSBC even after the assignment. Since HSBC never questioned the assignment, the borrowers could not complain about who recovered the debt. A judgment debt is not an actionable claim, the Court added, because no action is necessary to realise it; an assignment in writing of a future decree becomes a complete equitable assignment when the decree is passed, satisfying Order XXI Rule 16.
Outcome and what happens next
The interim application was dismissed. The Court recorded that ARF had stepped into the shoes of HSBC for all purposes relating to recovery of the debt, that it would not get more than what HSBC was entitled to under the judgment and decree, and that the only remedy available to it was to prosecute the execution application in the Bombay High Court, which was maintainable. The execution therefore proceeds. The order decides only the interim application; remaining objections, quantification and realisation of assets stay for the execution proceedings.
BANTHRY ANALYSISFor law students
Two ideas in this order are worth separating. First, finality within execution: an objection decided at an early stage of the same execution cannot be re-agitated later, even in a differently labelled application — that is res judicata and issue estoppel. Second, the assignment of a future decree: a decree is not an actionable claim under the Transfer of Property Act, so section 130 does not govern it; an assignment in writing of the debt, made while the suit is pending, operates as a contract to assign the decree, which becomes a complete equitable assignment when the decree is passed, and the assignee can then execute under Order XXI Rule 16 or section 146.
READING PROMPTSQuestions for a closer reading
- Why could the stamp-duty objection not be re-agitated in the interim application after the order of 1 April 2024?
- Why does the Maharashtra Stamp Act, 1958 not apply to the Sale and Purchase Agreement dated 9 September 2021?
- How can an assignee of a debt execute a decree that was passed only after the assignment was made?
