This order decides ONLY the maintainability objection. It does not decide whether the judgment debtors breached the 5 July 2018 settlement, whether the royalty and post-dated-cheque claims stand, or any other substantive question in the execution — those remain before the roster bench.
- Case
- Ozone Spa Pvt Ltd v. Co-Incept Hospitality Pvt Ltd & Ors
- Court
- High Court of Delhi
- Decision
- Bench
- Subramonium Prasad, J
- Judgment by
- Subramonium Prasad, J
- Case numbers
- EX.P. 56/2022; EX.APPL.(OS) 3172/2022; EX.APPL.(OS) 1200/2024; EX.APPL.(OS) 1958/2024
- Outcome
- Judgment dated 6 October 2026 rejecting the maintainability objection to the execution petition in EX.P. 56/2022. The petition proceeds to hearing on the merits before the roster bench; no substantive enforcement order passed yet.
Delhi High Court keeps an execution petition for a Rs 1.19 crore decree on its board
On 6 October 2026, the Delhi High Court rejected an objection that it could not execute its own decree merely because the amount sought to be recovered had fallen below the court's Rs 2 crore pecuniary jurisdiction. Justice Subramonium Prasad held that under Sections 37 and 38 of the Code of Civil Procedure, 1908, the court which passes a decree retains the power to execute it, and that an alteration in the pecuniary limit does not take away that power.
The ruling came in Ozone Spa Pvt Ltd v. Co-Incept Hospitality Pvt Ltd & Ors (EX.P. 56/2022). Ozone Spa, the decree holder, is seeking execution of a consent decree dated 19 July 2018 for Rs 1,19,43,000, passed in CS (COMM) 870/2018. One judgment debtor argued that because the decretal amount was below Rs 2 crore, the execution petition was not maintainable before this Court.
From a franchise dispute to a consent decree
The dispute arose from a franchise agreement dated 28 December 2013, under which Co-Incept Hospitality got franchise rights for ten years to run a gym, spa and salon at A-36, Vishal Enclave, Rajouri Garden, New Delhi under Ozone's brand. A supplementary agreement dated 5 November 2015 fixed royalty at Rs 1,50,000 per month plus taxes, irrespective of revenue.
When disputes arose, Ozone Spa filed CS (COMM) 870/2018 — a commercial suit for recovery of Rs 2,53,66,750 and a permanent injunction. The parties then entered into a Settlement Deed on 5 July 2018, and the High Court decreed the suit in terms of that settlement on 19 July 2018.
Ozone Spa alleges breach of the settlement: no post-dated cheques from 1 February 2020, royalty of Rs 75,000 per month unpaid from 1 April 2020, and the outlet closed without notice. These are the decree holder's allegations; the merits of the execution petition remain to be decided.
The question: does the decretal amount govern execution jurisdiction?
The Court framed the short question: is the execution petition maintainable when the amount sought is less than the pecuniary jurisdiction of the Court? Judgment Debtor No. 4 argued that the Commercial Courts Act, 2015 displaces Sections 38 and 39 CPC — the Commercial Division can entertain only suits, applications and appeals satisfying the Rs 2 crore specified value, so the execution petition should not lie here either.
JD-4 relied on Asian Patent Attorneys Assn (Indian Group) v. Registrar General, Delhi High Court (2026 SCC OnLine Del 360) and contended that as a special legislation, the Commercial Courts Act prevails over the CPC in case of conflict.
The decree holder countered that Sections 37 and 38 CPC give the decree-passing court jurisdiction to execute even if the pecuniary limit is altered; that Section 12(1)(a) of the Commercial Courts Act applies only to any application, appeal or suit — not to execution proceedings, which are governed by the CPC; and that Section 16 of the Act expressly makes the CPC (as amended by that Act) applicable, with no explicit provisions on execution procedure.
The rule: Sections 37 and 38 CPC keep execution with the decree court
The Court set out Sections 37, 38 and 39 CPC. Section 37 defines the “court which passed the decree” and, through clause (b), deals with a court of first instance that has ceased to exist or has ceased to have jurisdiction to execute the decree. Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution.
Relying on Gulab Chand Sharma v. Saraswati Devi (1974 SCC OnLine Del 202, Division Bench) and Pearey Lal and Sons (Pvt.) Ltd. v. M/s Jamuna Properties (P) Ltd. (2004 SCC OnLine Del 11), the Court explained that “where the court of first instance has ceased to exist” means the abolition or total extinguishment of the court — not a mere alteration of its pecuniary or territorial jurisdiction.
Reasoning: the suit's value at filing is what matters
Applying the rule to the facts, the Court noted that the suit was filed for recovery of Rs 2,53,66,750 — above this Court's pecuniary threshold. The decree under execution is for Rs 1,19,43,000, a lower figure arrived at through the 5 July 2018 settlement. That reduction, the Court held, does not bar this Court from executing its own decree.
“The contention that alteration in pecuniary limit of the court which passed the decree would also take away the power of such Court to execute the said decree cannot be accepted,” the Court observed, drawing strength from the Explanation to Section 37, which keeps the court of first instance competent to execute its decree even where it loses jurisdiction over the area in which the subject matter lies.
The Court rejected JD-4's reliance on the Asian Patent Attorneys decision as “completely misconceived”: that judgment dealt with an administrative order dated 17 November 2016 directing the Registry not to entertain execution petitions for decrees below Rs 2 crore; the Division Bench quashed that administrative order and left the maintainability question open for decision on the judicial side — which is what this judgment decides.
Finally, on the Commercial Courts Act objection, the Court held that Section 16 of the Act makes the CPC, as amended by that Act, applicable to commercial disputes of a specified value, so Sections 37 and 38 CPC apply to commercial decrees as well. “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 Court held.
Outcome and limits
The challenge to the maintainability of the execution petition was rejected. The matter goes to the roster bench on 14 October 2026, where the petition will proceed on its merits.
This order decides only the jurisdictional objection — not whether the judgment debtors breached the 5 July 2018 settlement or whether the royalty and cheque claims stand. The judgment is dated 6 October 2026 and bears the court’s digital-issuance stamp of 13 October 2026. Rajesh Mahindru appeared for Ozone Spa; Sanjela Gupta for judgment debtors 2 and 3; and Dr. Amit George, Kunal Kher, Rupam Jha and Manju Gautam for judgment debtor 4.
BANTHRY ANALYSISFor law students
The core teaching point is the distinction between a court's existence and its jurisdiction under Section 37 CPC: a change in pecuniary or territorial limits does not “kill” the court for execution purposes. “Court which passed the decree” is a term of art — the executing court is defined by who decreed the suit, not by the arithmetic of the decretal amount.
A second point is how the Court handled the “special legislation prevails” argument. Rather than treating the Commercial Courts Act as ousting the CPC entirely, the judgment reads Section 16 of the Act as a pipeline clause: the CPC, as amended by the Act, governs where the Act is silent — and the Act is silent on execution. Specialness fills gaps rather than creating vacuums.
Finally, notice the sequencing: the suit was properly filed above the threshold, and settlement reduced the recovery. Had the original suit itself been below Rs 2 crore, it could never have been instituted before the Commercial Division at all. The jurisdictional anchor is the suit as instituted — which is why a settlement discount cannot knock an execution out of the forum.
READING PROMPTSQuestions for a closer reading
- Why did the Court hold that the Rs 2 crore pecuniary threshold does not bar the Delhi High Court from executing the Rs 1,19,43,000 decree?
- How does the Explanation to Section 37 CPC support the Court's conclusion about a court retaining execution power despite jurisdictional changes?
- Why did the Court reject the argument that the Commercial Courts Act, as a special legislation, excludes Sections 37 and 38 CPC from execution of commercial decrees?
