Ozone Spa Pvt. Ltd. v. Co-Incept Hospitality Pvt. Ltd. & Ors.
Under sections 37 and 38 of the Code of Civil Procedure, the Court which passed a decree may execute it, and it does not lose that power because the decretal amount, after a settlement, is less than the Court's pecuniary threshold, since a Court ceases to exist only on abolition and not on a change in pecuniary jurisdiction; the Commercial Courts Act does not displace these provisions.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-10-11
Ozone Spa obtained a 2018 consent decree for ₹1,19,43,000 on a suit for ₹2,53,66,750 against Co-Incept Hospitality and others and sought execution in 2022. A judgment debtor argued that the High Court could not execute a decree below ₹2 crore. The Court held that it could, because the suit was filed above that value.
What happened
The decree holder and the judgment debtors entered a franchise agreement on 28 December 2013 for ten years, with a supplementary agreement on 5 November 2015 fixing royalty of ₹1,50,000 plus taxes. The decree holder filed CS (COMM) 870/2018 for recovery of ₹2,53,66,750 and an injunction. The parties signed a Settlement Deed on 5 July 2018 and, on an application under Order XXIII Rule 3, the Court decreed the suit on 19 July 2018 in terms of the deed for ₹1,19,43,000. The decree holder said the judgment debtors failed to issue post-dated cheques due on 1 February 2020, stopped paying royalty of ₹75,000 from 1 April 2020 and closed the outlet without notice, and filed Ex.P. 56/2022. Judgment debtor no. 4 objected that the amount sought is below the ₹2 crore specified value for the Commercial Division, so the High Court could not entertain the execution, relying on sections 7, 12 and 21 of the Commercial Courts Act and on Asian Patent Attorneys Assn. v. Registrar General, Delhi High Court (2026 SCC OnLine Del 360). The decree holder relied on sections 37 and 38 of the CPC and section 16 of the Commercial Courts Act. The Court reserved its decision on maintainability on 7 August 2026.
Questions before the court
- Can the High Court execute its own commercial decree when the decretal amount is below the ₹2 crore pecuniary threshold?
Why the court ruled this way
The Court reproduced sections 37 to 39 of the CPC and the Delhi High Court's Division Bench decision in Gulab Chand Sharma v. Saraswati Devi, which held that a court does not cease to exist merely because its pecuniary jurisdiction is altered, and Pearey Lal & Sons, which held the High Court does not lose jurisdiction to execute because of the increase in its pecuniary limit (paragraphs 13 and 14). The expression 'Court which passed the decree' ceases only on complete abolition, and the Explanation to section 37 shows that even a change of area does not take away the power of the Court that passed the decree (paragraph 15). Here the suit was for ₹2,53,66,750, above the threshold, and the decretal amount fell below it only because of the settlement, so the Court which passed the decree did not lose jurisdiction (paragraph 16). The Division Bench decision in Asian Patent Attorneys concerned an administrative order that the Registry not entertain execution petitions below ₹2 crore, which was quashed, and left the question open for judicial decision, so it was no answer (paragraph 17). Section 16 of the Commercial Courts Act applies the CPC as amended, so sections 37 and 38 apply to decrees in commercial suits, and only this Court can execute a decree in a suit filed here above ₹2 crore though the decretal amount is lower (paragraph 18).
Controlling point
The petition for execution was maintainable.
Order and next steps
The challenge to the maintainability of the petition was rejected, and the matter was listed for hearing on 14 October 2026 before the Roster Bench.
Practical implications
A decree holder whose commercial suit in the Delhi High Court was above ₹2 crore can execute the decree there even where a settlement reduced the decretal amount below that value.
Limits of this ruling
- The Court did not decide the merits of the execution, whether the settlement was breached or the liability of any judgment debtor; it decided maintainability only on a suit initially filed above the specified value.
Law and judgment source
- Code of Civil Procedure, 1908, sections 37, 38 and 39
- Commercial Courts Act, 2015, sections 12, 16 and 21
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Source checked: 2026-10-11 · Judgment paragraphs: paragraphs 1–20 · Later case history: not verified. Verify appeals, stays and subsequent orders before reliance.
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