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PETITIONER: FORASOL

       Vs.

RESPONDENT: OIL & NATURAL GAS COMMISSION (AND VICE VERSA)

DATE OF JUDGMENT25/10/1983

BENCH: MADON, D.P. BENCH: MADON, D.P. MUKHARJI, SABYASACHI (J)

CITATION:  1984 AIR  241            1984 SCR  (1) 526  1983 SCALE  (2)1110  CITATOR INFO :  RF         1986 SC 137  (63)  RF         1991 SC 351  (3)

ACT:      Code  of  Civil  Procedure,  1908-s.  47-Decree  passed according to  award in  foreign currency without fixing rate of exchange-In  execution proceedings  court must decide and select proper  date for fixing rate of exchange-Criteria for selection of date-Date which puts plaintiff in same position in which he would have been had the defendant discharged his obligation when  he ought  to have  done. Proper date is the date of decree.      Arbitration Act,  1940-s. 17-Judgment  according to the award-When it is. Provisions of s. 17 are different from the provisions of s. 26 (1) of the English Arbitration Act.      Precedents-English decisions  not binding but have high pursuasive value.      Practice & procedure-General practice & procedure to be followed  by   plaintiff  while   claiming  sum  in  foreign currency, arbitrator  while making the award and court while passing decree-Laid down.

HEADNOTE:      Forasol, a  French Company  having its principal office in Paris,  France, entered  into a  contract on February 17, 1964  with   Oil  and   Natural  Gas  Commission  (ONGC),  a Government of India undertaking, for carrying out structural drilling in  relation to  the exploration  for oil in India. Article IX-3  of  the  contract  provided  that  the  amount payable to  Forasol on  account of  operational fee, standby fee, and  equipment charges  shall  be  computed  in  French Francs and  ONGC shall  pay 80%  of that  amount  in  French Francs in  Paris, France,  and the  remaining 20%  in Indian rupees using a fixed conversion rate of FF. 1.033=Re. 1.000. Art  IX-3.2  provided  that  certain  other  charges,  e.g., insurance, freight,  etc., incurred  by Forasol  were to  be reimbursed to  Forasol by  ONGC  in  Indian  rupees  if  the expenditure was  initially incurred  by  Forasol  in  Indian rupees, otherwise in French Francs. Article X-2, X-3 and X-4 of the contract set out estimates of the payments to be made to Forasol  in French  Francs, the  invoicing rules  and the rate of  payment. Under  Art. X-3.3, Forasol was to indicate

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in each  of its invoices, the amount payable to it in French Francs and  the amount  payable to it in Indian rupees under the contract.  Art. XI  provided for  payments to be made to Forasol in  Indian rupees.  The contract which was initially for a  period of  one year  was extended  twice and Addendum Nos. 1,  2 &  3 were  added  to  the  Contract.  During  the extended  period  of  the  contract  the  Indian  rupee  was devalued in  June 1966 and consequently Forasol made a claim for conversion of Indian rupees into French 527 Francs at  a rate higher than the rate specified in Art. IX- 3. The  disputes and  differences which  arose  between  the parties were  referred to  arbitration. The  Umpire who made the award  directed certain  payments to  be made  in French Francs, but  did not  specify the  rate of exchange at which the French  Francs were  to be converted into Indian rupees. The award  further directed that from November 30, 1966, the rupee portion  should be converted at the higher rate of FF. 1,000 equal  to rupees  1,517.80. The award was filed in the Delhi High Court and the High Court passed a decree in terms of  the  award  simpliciter  without  fixing  any  date  for conversion of  the French  Francs into  Indian rupees,  with interest at  the rate  of 6%  per annum from the date of the decree till  the date  of payment  Neither party  raised any objection to the said award or to the form in which the said decree was  passed. Forasol filed an application in the High Court for  execution of  the decree. ONGC contended that the enhanced  rate  of  exchange  specified  in  the  award  was applicable only  with respect  to the  interest  payable  to Forasol from  November 30,  1966 and that to the rest of the payments to  be made under the award either in French Francs or in  Indian rupee,  the  contract  rate  of  exchange  was applicable. A  single Judge  of the High Court held that the contract rate  of exchange applied only to the rupee part of the payment  in respect  of the  items specified  in Art. IX .3.1 and that in respect of the other payments to be made to Forasol in  French Francs the rate of exchange prevailing at the date  of the  decree would  apply. In appeal, a Division Bench of  the High  Court held  that the  enhanced  rate  of exchange specified in the award applied only to the interest payable to Forasol and that with respect to the rupee amount the contract  rate of exchange applied. It further held that as the  award was  in  French  Francs,  by  reasons  of  the provisions of  the Foreign  Exchange Regulation  Act,  1973, before executing  the award  the French Francs would have to be converted  into Indian  rupees at  the rate  of  exchange prevailing on  the date of the said award. This judgment and order of  the Division  Bench was  challenged in these cross appeals. The  questions which  arose for consideration were: (1) Whether the rate of conversion mentioned in the contract applied to  all the  payments to  be made under the contract whether in  Indian rupees or in French Francs, or only to 20 per cent  of the amount in French Francs, payable by ONGC to Forasol in Indian rupees in respect of Forasol’s operational fee, standby  fee and  equipment charges;  (2)  whether  the enhanced  rate  of  exchange  specified  in  the  award  was applicable to  all the  payments in Indian rupees under Art. IX-3.1 of the contract to be made by ONGC to Forasol or only to the  interest on  the amount  in French Francs payable to Forasol by  ONGC; and  (3) which  was the  proper date to be selected for converting into Indian rupees the French Francs part of  the award  in respect  of which no rate of exchange had been  fixed either by the contract or by the award ? Two further  questions   which  were  inextricably  linked  with question No.  (3) above  were: (1)  whether an arbitrator or

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umpire can  make an  award in  a foreign  currency; and  (2) whether a  court can  simpliciter pass  a decree in terms of such an  award without  specifying the  rate of  exchange at which the  foreign currency amount will have to be converted into Indian rupees.      Allowing the  appeal of  Forasol and dismissing that of ONGC, 528 ^      HELD: 1.  Under Art. IX-3.1 of the contract Forasol had agreed to accept 20 per cent of its operational fee, standby fee and  equipment charges  in Indian rupees but wanted that the remaining  80 per cent of these fees and charges as also the other  amounts  which  were  payable  to  it  under  the contract should  be paid  to it  in French  Francs only.  If Forasol were  to indicate  separately in  its  invoices  the payment to  be made  to it  in French  Francs and  in Indian rupees and  if the  payment of such Francs was to be made in Paris, France,  in French  Francs, the question of providing for a  rate of  exchange in the said contract for converting French  Francs   into  Indian   rupees  cannot  arise.  Such conversion rate  could only  be in  respect  of  the  amount payable to  Forasol in Indian rupees. It is thus only the 20 per cent  of the said fees and charges computed in French in Forasol’s invoices but payable in Indian rupees which was to be converted  at the  rate  of  exchange  specified  in  the contract. This  interpretation receives further support from Art. 2.2  of Addendum  No. 2  and Art. 2.5 of Addendum No. 3 under which amounts refundable by Forasol to ONGC were to be refunded in  the same  currency in  which ONGC had paid them earlier. [544 C-F]      2. The Division Bench of the High Court was in error in holding that  the enhanced rate of exchange specified in the award applied  only to  the amount  of interest  payable  to Forasol. The  enhanced  rate  of  exchange  applied  to  the payments in  Indian rupees under Art. IX-3.1 of the contract to be  made by  ONGC to  Forasol from and after November 30, 1966. [548 D-E]      3. In  an action  to recover  an amount  payable  in  a foreign currency,  five dates  compete for  selection by the Court as  the proper date for fixing the rate of exchange at which the  foreign currency  amount has to be converted into the currency  of the  country in  which the  action has been commenced and decided. These dates are:      (1) the date when the amount became due and payable;      (2) the date of commencement of the action;      (3) the date of the decree;      (4) the  date when the court orders execution to issue; and      (5) the  date when  the  decretal  amount  is  paid  or realized.      In a  case where  a decree had been passed by the court in terms of an award made in a foreign currency a sixth date also enters  the competition, namely, the date of the award. [548G-549B]      The question which one out of the dates mentioned above is the  proper date  to be  selected by  the Court  does not appear to  have been  decided in this country. The question, however, has  formed  the  subject-matter  of  decisions  in England. The  English decisions  are of  Courts of a country from which  we have  derived our  jurisprudence and  a large part of  our laws  and in which the judgments were delivered by judges held in high repute. Undoubtedly, none 529 of these  decisions are binding upon this Court but they are

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authorities  of  high  pursuasive  value  to  which  we  may legitimately turn for assistance. Whether the rule laid down in any  of these  cases can  be applied  by our Courts must, however, be  judged in the context of our own laws and legal procedure and  the practical  realities of litigation in our country. [549G; 568G]      Miliangos v.  George Frank (Textiles) Ltd., L.R. [1976] A.C. 443; Tomkinson and Anr. v. First Pennsylvania Banking & Trust Co., L.R [1961] A C. 1007; [1960] 2 All E.R. 332; Sub- nom in  re United  Railways of  Havana and  Regla Warehouses Ltd.,  L.R.   [1960]  Ch.   52;  [1959]   1  All  E.R.  214; Jugoslavenska Oceanska  Plovibda v.  Castle  Investment  Co. Inc., [1973]  3 All E.R. 498’ Beswick v Beswick, L.R. [1968] A.C 58;  [1967] 2 All E.R. 1197; Dr. Mann, The  legal Aspect of Money,  3rd Edn.  [1971], p. 363; Schorsch Meier G.m.b H. v. Hennin,  [1975] 1 All E.R. 152; Miliangos v. George Frank (Textiles) Ltd.,  [1975] 1 All E.R. 1076; Practice Statement (Judicial Precedent),  (1966) 1  W.L.R 1234;  Owners of M.V. Eleftherotria v.  The owners of M.V. Despina R-The Dispina R and Services  Europe  Atlantique  Sud  (Seas)  of  Paris  v. Stockholms. Redriaktiebolag  Svea of  Stockholm, L.R. [1979] A.C. 685;  Practice directions, [1976] 1 W.L.R. 83; [1976] 1 All E.R. 669; The Zafuo, John Carllom & Co. Ltd v. Owners of S.S. Zafiro,  L.R. (1960)  p. 1 at 14; [1959] 2 All F.R. 537 at 544;  E.D. &  F. Man  v. Socite Annonyme Tripolitiane Das Usines De Raffinage De Sucre, [1970] 2 Lyod’s L.Rep. 416 and Russel on Arbitration 20th edn. page 375, referred to.      4. When a foreigner has to receive a sum of money which should justly  be payable  to him  in a foreign currency and because of the default of the paying party, seeks to recover its payment  through the  court, the  first  question  which arises is  whether a  court in India would have jurisdiction to pass  a decree for a sum expressed in a foreign currency. Though on  principle there  is no  reason why a court should not be able to do so, no court can pass a decree directing a defendant to  do an impossible or an illegal act and in view of the  provisions of  our Foreign  Exchange Regulation Act, 1973, and  the  restrictions  contained  therein  on  making payments in  a foreign  currency, if  a decree  were  to  be passed  simpliciter   for  a  sum  expressed  in  a  foreign currency, it  would be  to direct the defendant to do an act which  would   be  in  violation  of  the  Foreign  Exchange Regulation Act,  1973. Such a decree can, therefore, only be passed by  making the payment in foreign currency subject to the permission  of the  foreign exchange  authorities  being granted.  If,   however,  the   authorities  do   not  grant permission for  payment of  the  judgment  debt  in  foreign currency, it would not be possible for the defendant to make such payment,  resulting in  the decree  becoming infrutuous and the  plaintiff getting nothing under it. The court must, therefore,  provide  for  the  eventuality  of  the  foreign exchange authorities  not granting  the requisite permission or even  if such  permission is  given,  the  defendant  not paying the  decretal debt,  or not  wanting to discharge the decree by  making payment  in foreign  currency or in Indian rupees. This can only be done by the decree providing in the alternative for  payment of a sum of money in Indian rupees, which will  be equivalent  to the  sum  decreed  in  foreign currency. It  is but just that a man, who is in law entitled to receive  a sum  of money  in a  foreign currency,  should either receive  it in  such currency  or should  receive its equivalent in Indian rupees. It is here that the question 530 of the  date which  the court  should select  for converting foreign currency  into Indian  rupees arise.  The court must

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select a  date which puts the plaintiff in the same position in which he would have been had the defendant discharged his obligation when  he ought to have done, bearing in mind that the  rate   of  exchange   is  not  a  constant  factor  but fluctuates, and  very often  violently fluctuates, from time to time.      The date  when the  amount became due and payable, does not have  the effect  of putting  the plaintiff  in the same position in  which he  would have  been  had  the  defendant discharged his  obligation when  he should have done because between that  date and the date when the suit is decreed the rate of  exchange may  have fluctuated  to the  plaintiff  s prejudice,  resulting   in  the  amount  decreed  in  rupees representing only  a fraction  of what  he was  entitled  to receive. Equally,  the possibility  of the plaintiff getting more than  what he  had bargained  for in  case the  rate of exchange had  fluctuated in  his favour cannot be ruled out. To select the date when the amount became due or the "breach date", as  the English  courts have  termed it,  is thus  to expose the  parties to  the  unforesecable  changes  in  the international monetary  market. The selection of the "breach date" cannot,  therefore,  be  said  to  be  just,  fair  or equitable. [568H 569D]      The date  of the commencement of the action or suit, is equally subject  to the same criticism. The selection of the date of  the filing  of the suit would, therefore, leave the parties in  as uncertain  and precarious  a position  as the selection of  the date when the amount became payable or the "breach date". [569 E-H]      To select the date of the decree as the conversion date would be  to adopt  as unrealistic a standard as the "breach date" because a money decree and the payment by the judgment debtor  of  the  judgment  debt  under  it  are  two  vastly different matters  widely separated  by successive execution applications and  objections  thereto  unless  the  judgment debtor chooses to pay up the judgment debt of his own accord which is  generally not  the case.  In the  vast majority of cases  a   money  decree  is  required  to  be  enforced  by execution. [570 A-E]      The  selection  of  the  date  when  the  court  orders execution to  issue is equally beset with difficulties. [570 G]      In selecting  the date of payment as the proper date of conversion  there   are  three   practical  and   procedural difficulties, namely,  payment of  court fees, the pecuniary limit of the jurisdiction of courts and execution. [572 B-E]      This then  leaves the  court with only three dates from which to  make the  selection, namely,  the  date  when  the amount became  payable, the  date of  the filing of the suit and the  date of  the judgment, that is, the date of passing the decree.  It would  be fairer to both the parties for the court to take the latest of these dates, namely, the date of passing the  decree, that is, the date of the judgment. [575 F] 531      5. Under  section 17  of the  Arbitration Act, 1949 the judgment which  the court  pronounces is to be "according to the award".  Where the  award directs a certain sum of money to be  paid and  the court,  in a  case  where  it  has  not modified or corrected the award under section 15, pronounces judgment for a different sum, the judgment cannot be said to be "according to the award". In the same way, where an award directs payment  of a  sum of  money in foreign currency and the court  while pronouncing judgment provides for its rupee equivalent at the rate of exchange prevailing on the date of

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the award,  the  court  will  not  be  pronouncing  judgment "according to  the award"  if in  the meantime  the rate  of exchange has varied, because at the date of the judgment the foreign currency equivalent of the amount in rupees provided in the judgment would be different from the foreign currency sum  directed  to  be  paid  by  the  award.  The  judgment, therefore, can  only be  said to be "according to the award" if it directs payment of the rupee equivalent at the rate of exchange prevailing  on the date of pronouncing the judgment which date  is the  same as  the date  of the passing of the decree. [584G-585B]      6. The  Division Bench  of the High Court has committed an error  in equating  s. 26  (1) of the English Arbitration Act with  s. 17  of our Arbitration Act. The reason for this error is  that the Division Bench has proceeded upon a wrong assumption  that   the  procedural  scheme  of  the  English Arbitration Act  is the same as that of our Arbitration Act. The provisions  for enforcing an award under the English Act and under  our Act are different. Granting leave under s. 26 of the English Act and pronouncing judgment according to the award and  passing a  decree under  s. 17  of our  Act  mean different things  and have  different  results.  A  judgment according to the award under s 17 of our Act will speak only from the  date of  the judgment  which will  not be the case under s.  26 (1)  of the English Act, for while in the first case what  will be  enforceable by  the  processes  by  law, namely execution,  will be the decree passed in terms of the award, in  the second  case it  will be  the  award  itself, unless the  applicant desires  to have  judgment entered  in terms of the award. [585C, 585E]      Satish Kumar  and ors.  v.  Surinder  Kumar  and  ors., [1969] 2 S.C.R. 244, distinguished.      7. The practice, which ought to be followed in suits in which a  sum of  money expressed  in a  foreign currency can legitimately be  claimed by the plaintiff and decreed by the court is  as follows. In such a suit, the plaintiff, who has not received  the amount  due to  him in  a foreign currency and, therefore,  desires to seek the assistance of the court to recover  that amount, has two courses open to him. He can either claim  the amount due to him in Indian currency or in the foreign  currency in which it was payable. If he chooses the first  alternative, he  can only  sue for that amount as converted into  Indian rupees  and his  prayer in the plaint can only  be for a sum in Indian currency. For this purpose, the plaintiff  would have  to convert  the foreign  currency amount due to him into Indian rupees. He can do so either at the  rate of exchange prevailing on the date when the amount became payable  for he was entitled to receive the amount on that date  or, at  his  option,  at  the  rate  of  exchange prevailing on  the date  of the  filling of the suit because that is the 532 date on  which he is seeking the assistance of the court for recovering the  amount due  to him.  In  either  event,  the valuation of the suit for the purposes of court-fees and the pecuniary limit of the jurisdiction of the court will be the amount in Indian currency claimed in the suit. The plaintiff may, however, choose the second course open to him and claim in foreign  currency the  amount due to him. In such a suit, the proper  prayer for  the plaintiff  to make in his plaint would be  for a  decree that the defendant do pay to him the foreign currency  sum claimed  in the  plaint subject to the permission of  the concerned  authorities under  the Foreign Exchange Regulation Act, 1973, being granted and that in the event of  the foreign  exchange authorities not granting the

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requisite permission  or the  defendant not  wanting to make payment in  foreign currency even though such permission has been granted  or the defendant not making payment in foreign currency or  in Indian  rupees, whether  such permission has been granted  or not,  the defendant do pay to the plaintiff the rupee  equivalent of the foreign currency sum claimed at the rate of exchange prevailing on the date of the judgment. For  the   purposes  of   court-fees  and  jurisdiction  the plaintiff should,  however, value  his claim  in the suit by converting the  foreign currency  sum claimed  by  him  into Indian rupees at the rate of exchange prevailing on the date of the filing of the suit or the date nearest or most nearly preceding such date, stating in his plaint what such rate of exchange is.  He should  further give  an undertaking in the plaint that  he would make good the deficiency in the court- fees, if any, if at the date of the judgment, at the rate of exchange  then  prevailing,  the  rupee  equivalent  of  the foreign currency  sum decreed  is higher than that mentioned in  the   plaint  for   the  purposes   of  court-fees   and jurisdiction. At  the hearing of such a suit, before passing the decree,  the court  should call  upon the  plaintiff  to prove the  rate of  exchange prevailing  on the  date of the judgment or on the date nearest or most nearly preceding the date  of   the  judgment.  If  necessary,  after  delivering judgment on  all other  issues, the court may stand over the rest of  the judgment  and the  passing of  the  decree  and adjourn the  matter to  enable the  plaintiff to  prove such rate of  exchange. The  decree to  be passed  by  the  court should be  one which  orders the  defendant to  pay  to  the plaintiff the  foreign currency  sum adjudged  by the  court subject  to   the  requisite  permission  of  the  concerned authorities under the Foreign Exchange Regulation Act, 1973, being granted,  and in  the event  of the  Foreign  Exchange authorities not  granting the  requisite permission  or  the defendant not  wanting to  make payment  in foreign currency even  though   such  permission  has  been  granted  or  the defendant not  making payment  in  foreign  currency  or  in Indian rupees,  whether such  permission has been granted or not, the  equivalent of  such foreign currency sum converted into Indian rupees at the rate of exchange proved before the court as  aforesaid.  In  the  event  of  the  decree  being challenged in appeal or other proceedings and such appeal or other proceedings  being decided  in whole  or  in  part  in favour of  the plaintiff,  the appellate  court or the court hearing the application in the other proceedings challenging the decree  should follow  the same  procedure as  the trial court for  the purpose  of ascertaining the rate of exchange prevailing on  the date  of its  appellate decree  or of its order on  such application  or on  the date  nearest or most nearly preceding  the date  of such decree or order. If such rate of  exchange is  different from  the rate in the decree which  has  been  challenged,  the  court  should  make  the necessary modification  with respect to the rate of exchange by its appellate decree or final 533 order. In  all such  cases, execution can only issue for the rupee equivalent  specified in  the decree, appellate decree or final  order, as  the case  may be.  These questions,  of course,  would   not  arise   if  pending  appeal  or  other proceedings adopted  by the  defendant the  decree has  been executed or  the money thereunder received by the plaintiff. [587D-589C]      8. Just as the courts have power to make a decree for a sum of  money expressed in a foreign currency subject to the limitations and conditions set out above, the arbitrators or

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umpire have  the power  to make  an award for a sum of money expressed in  a foreign  currency. The arbitrators or umpire should, however,  provide in  the  award  for  the  rate  of exchange at  which the  sum awarded  in a  foreign  currency should be  converted in the events mentioned above. This may be done  by the arbitrators or umpire taking either the rate of exchange  prevailing on the date of the award or the date nearest or most nearly preceding the date of the award or by directing that  the rate  of exchange at which conversion is to be  made would  be the  date when  the court pronounces a judgment according  to the  award and  passes the  decree in terms thereof  or the  date nearest or most nearly preceding the date  of the judgment as the court may determine. If the arbitrators or  umpire omit  to  provide  for  the  rate  of conversion, this  would  not  by  itself  be  sufficient  to invalidate the  award. The  court may either remit the award under section  16 of  the Arbitration  Act,  1940,  for  the purpose of fixing the date of conversion or may do so itself taking the date of conversion as the date of its judgment or the date  nearest or most nearly preceding it, following the procedure outlined  above for  the purpose  of proof  of the rate of  exchange prevailing  on such date. If, however, the person liable under such an award desires to make payment of the sum  in foreign  currency awarded  by the arbitrators or umpire without  the award being made a rule of the court, he would be  at liberty  to do so after obtaining the requisite permission of  the concerned  authorities under  the Foreign Exchange Regulation Act, 1973,      9, In  the instant  case the  party entitled to receive the  money-Forasol-was  a  foreign  party.  Under  the  said contract, the currency of account was a foreign currency and so was the currency of payment except for a portion thereof. Forasol was,  therefore, entitled, on payment not being made to it by ONGC, to receive in French Francs the amounts which became payable  to it  in that  currency.  The  Umpire  was, therefore, justified  in providing  that the amounts payable under the  said award  to Forasol in French Francs should be paid in  French currency.  The Umpire  has, however, neither provided  that   such  payment   would  be  subject  to  the permission  of   the  foreign   exchange  authorities  being obtained nor  specified the conversion rate to be applied in the eventualities  set out  above. That,  however, does  not make any  difference because  neither party  has objected to the said award on this ground. On the contrary, both parties have accepted  the said  award as binding and conclusive, As mentioned above,  this omission  on the  part of  the Umpire could have  been corrected by the High Court when it came to pronounce judgment  according to the said award and pass the said decree  in terms thereof. The decree passed in terms of the said  award, however,  does not specify either the rupee equivalent of the amount in French Franch payable to Forasol or the  rate of  exchange at  which the  conversion of  such amount into  Indian rupees  should be  made. To that extent, the decree  passed in  terms of  the said  award by the High Court was not 534 a proper  decree. Both  the parties  have, however, accepted the said decree and have not challenged it on this ground in any proceedings.  In any event, the aforesaid mistake in the said decree  was one  which could have been got corrected by an application for review or by an application under section 152 or, in any event under section 151, of the Code of Civil Procedure, 1908. The decree has now become final and binding upon the  parties. Both  the parties  have accepted the said decree and  the said decree cannot, therefore, be said to be

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invalid on  the ground  of the  above  omission  to  specify either the  rupees equivalent of the French Franc portion of the said  award or the rate of exchange at which such French Franc portion was to be converted into its rupee equivalent. For these  reasons we  hold that  the learned  Single  Judge rightly  took  the  date  of  the  decree  as  the  date  of conversion. [590C-591B]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos. 628 & 629 of 1981.      Appeals by  Special Leave  from the  Judgment and Order dated the  21st December,  1979 of  the Delhi  High Court in E.F.A.(O.S.) No. 5 of 1977.      Shankar Ghosh, and D.N. Gupta, for the Appellant in CA. 628/81 & for Respondent in CA. No. 629/81.      B. Dutta  for the  Respondent in  CA.  628/81  and  for appellants in CA. No. 629/81.      The Judgment of the Court was delivered by      MADON, J.  These cross  appeals by  special leave arise out of  execution proceedings  adopted by  Forasol, a French Company, having  its  principal  office  in  Paris,  France, against the Oil and Natural Gas Commission, a statutory body incorporated under  the oil  and Natural Gas Commission Act, 1959 (Act  XLIII of  1959),  hereinafter  for  the  sake  of brevity referred to as ’ONGC’.      On July 30, 1962 the Government of India invited global tenders for  structural drilling  for exploration  of oil in the Jaisalmer  area of the State of Rajasthan. The tender of Forasol was  accepted by  the Government  of  India  and  in pursuance thereof a contract dated February 17, 1964, headed "Structural Drilling  Contract", was  entered  into  between ONGC and  Forasol. Under  the said  contract,  ONGC  engaged Forasol to  carry out structural drilling in relation to the exploration for  oil in  the Jaisalmer  area of the State of Rajasthan on  the terms and conditions contained in the said contract. 535 The said  contract was  for a  period of one year commencing from the  date of  the start  of the drilling work. The said contract also gave an option to ONGC to extend the period by one more  year. Article IX-3 of the said contract dealt with the currency of payment. It provided as follows:           "IX-3.1. The  operational  fee,  standby  fee  and      equipment  charges   payable  to   FORASOL  have   been      specified in  French Francs in Article IX-1.1.1. to IX-      1.1.1. above.  The amount payable to FORASOL on account      of aforesaid  fees and  charges shall  be  computed  in      French Francs  ONGC shall  pay  80%  of  the  aforesaid      amount in French Francs and the remaining 20% in Indian      Rupees using  a fixed  conversion rate of FF. 1.033=Re.      1.000." Under Article  IX-3.2 the  cost as  well as  the  insurance, packing, forwarding  and clearing  charges in respect of the materials provided  by Forasol  and the  freight, insurance, packing, forwarding  and clearing charges for transportation from a sea port or air port in France to India and back to a sea port in France or outside France if Forasol so chose, in respect of  the rig,  equipment, machinery,  tools and other materials provided  by Forasol  were  to  be  reimbursed  to Forasol by  ONGC in  Indian rupees,  if the  expenditure was initially incurred by Forasol in Indian rupees, otherwise in French Francs.

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    Under  a   Credit  Agreement  arrived  at  between  the Government of  India  and  the  Government  of  France,  the Government of France had agreed to provide credit facilities to a  limited extent  to the  Government of  India  for  the import of  plant, machinery, equipment and materials and for execution of  certain projects  including  oil  exploration. Under the  said Credit  Agreement, credit was to be given by the French  suppliers to  the Indian  buyers in  the form of acceptance of payments on deferred basis upon the conditions laid down  in the  letters dated February 5, 1962, exchanged between the  Governments of  India and France. Consequently, in respect  of the  said contract,  Forasol had agreed under Article X-1.1  thereof to  accept payment of its fees, costs and charges payable in French Francs on deferred basis under the overall conditions of the said letters exchanged between the two Governments and Forasol and ONGC had agreed upon the estimates of  the payments  to be  made to Forasol in French Francs under  the said contract, the invoicing rules and the mode of payment. Articles X-2, X-3 and X-4 of the 536 said contract  set out  such estimates,  invoicing rules and the mode  of payment.  Under Article  X-3.3, Forasol  was to indicate in  each of it invoices the amount payable to it in French Francs  and the amount payable to it in Indian rupees under the  said contract.  So far  as the  mode of  deferred payment of  French Francs  was  concerned,  Article  X-4.1.1 provided for remittance by ONGC in French Francs immediately following the  signing of  the said  contract of a sum of FF 73, 437.49,  being the 19/800th part (i.e. 1.25 per cent) of the total  estimated amount  of  Forasol’s  operational  and stadby fees  and equipment charges, cost of the materials to be provided by Forasol and transportation charges in respect of Forasol’s  rig, equipment,  machinery  and  tools.  Under Article X-4.1.2, subsequent to the above remittance ONGC was to remit  to Forasol  in French  amount 15/800th  part (i.e. 1.875 per  cent) of the total estimated amount in respect of the said  items mentioned  above, that  is FF  110,156.23 on each 5th  day of  August and  February, the  first  of  such payments to  be made  on August  5, 1962  and  the  last  on February 5, 1965. Article X-4.2 provided for payment by ONGC to Forasol  of the  balance of  the amount  due to  Forasol. Under Article  X-4.2.1, on  receipt  of  each  of  Forasol’s invoices in  respect of  operational fees,  standby fees and equipment charges  accepted by  ONGC, Forasol was to present to ONGC a set of 14 promissory notes payable to CNEP (Paris) of equal  value totalling  to  87.5%  of  the  French  Franc Portion of  the amount  for which  each of the said invoices had been  accepted by  ONGC and  maturing on  the 5th day of August and of February, the first such dates being August 5, 1965 and  the last  being February  5, 1972.  Within fifteen days of  the date  of receipt  of the said promissory notes, ONGC was  to return  the said  promissory notes  to  Forasol (Paris) duly signed and stamped.      Article  X-4.2.2  provided  for  payment  of  the  said promissory notes. The said Article was as follows:           "X-4.2.2. ONGC  binds itself,  irrevocably, to pay      in French  Francs the  promissory notes  given by it to      Forasol. Forasol  shall present the promissory notes to      CNEP (Paris)  for collecting  payment on  the dates  of      maturity ONGC  shall place  with CNEP (Paris), at least      one day before each date of maturity, adequate funds to      cover the  total value of the promissory notes maturing      on that date." 537      Under Article X-4.3 ONGC undertook to pay to Forasol in

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French Francs  simple interest at the rate of 5 per cent per annum and also a credit insurance charge at the rate of 1.08 per cent  per annum. The other sub-articles of Article X-4.3 provided for  calculation of  interest and insurance charges and for  submission by  Forasol every six months of invoices in respect  thereof. Article  X-4.3.2, inter  alia, provided that-           "ONGC shall  accept each  invoice for the interest      and insurance  charge  and  shall  remit  the  invoiced      amount to Forasol in French Francs as early as possible      but not  later than  two months  after receipt  of  the      invoice." Provision was  also made  by the  said Article  X-4.3.2  for drawing of promissory notes payable at CNEP (Paris) maturing on each 5th day of August and of February, the first of such dates being  August 5,  1965 and  the last  being August  5, 1971. Under Article X-4.3.3 ONGC bound itself, "irrevocably, to pay  in French  Francs the  promissory notes for interest and insurance  charge given  by it  to Forasol."  Article XI provided for  payments to  be  made  to  Forasol  in  Indian rupees. Under  Article XI.1.1. the rupee payment part of the operational  and   standby  fees,   equipment  charges   and transportation charges  payable to  Forasol under  the  said contract was  estimated to  be FF  1,495,216 and ONGC was to pay to Forasol as an advance 10 per cent of the said amount, namely, FF 149,522, in Indian rupees using a conversion rate of FF  1.033 equal  to Rupee  1.000. The  balance amount  in respect of  the aforesaid  item was  to be  paid by  ONGC to Forasol in Indian rupees using a conversion rate of FF 1.033 equal to Rupee 1.000 in the manner set out in the other sub- articles of Article XI.      On account  of the  hostilities  between  Pakistan  and India which  broke out  in September 1965 the work under the said contract  could not  be completed and the operations to be carried  out there  under had to be suspended. The period of  the   said  contract   was  thereupon   extended  by   a supplementary agreement  being Addendum No. 1 dated December 6, 1965, by a period of six months with effect from the date on which  the drilling operations in the Jaisalmer area were resumed at  the expiry  of  the  period  of  suspension.  By another supplementary  agreement being  Addendum No. 2 dated July 30,  1966, the  period of the said contract was further extended by a period of five months from the moment at which all the equipment of 538 Forasol  then   under  repair   at  Jodhpur  arrived,  after completion of  the repairs at the new drill-site, where ONGC might like  to have  drilling operations to be started under the said  Addendum No.  2. Article  2.7 of the said Addendum No.2 provided as follows:           "2.7. In  case Forasol  has to  refund to  ONGC an      amount  which  cannot  be  adjusted  or  has  not  been      adjusted against  Forasol’s invoices  for the  last two      months of  the five  months period  of  this  Addendum,      Forasol shall  refund the  amount in  cash in  the same      currency in which ONGC had paid it earlier." By another  supplementary agreement  being  Addendum  No.  3 dated February  23, 1967,  the period  of the  contract  was further extended  till the  completion of  the  drilling  of Manhere Tibba  Well No.  1 and in case ONGC should decide to test the  said well till the completion of such test or till April 18.1967.  whichever was  earlier. Article  2.5 of  the said Addendum No. 3 Provided as follows:           "2.5, In  case Forasol  has to  refund to  ONGC an      amount  which  cannot  be  adjusted  or  has  not  been

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    adjusted against  Forasol’s invoices  for the period of      extension stipulated  in  Article  1.2  above,  Forasol      shall refund the amount in cash in the same currency in      which ONGC had paid it earlier." It may  be mentioned  that each  of the  said  supplementary agreements provided that all the terms and conditions of the original contract  which were not repugnant to the terms and conditions agreed  to for such supplementary agreements were to continue  to apply  until the  termination  of  the  said contract.      The extended  period of  the said  contract expired  on April 13, 1967.      In June  1966, during  the extended  period of the said contract, the Indian rupee was devalued, and consequently in the course  of correspondence  which took  place between the parties Forasol made a claim for conversion of Indian rupees into French  Francs at a rate higher than the rate specified in Article IX. 3 of the said contract. 539      It may  also be mentioned that ONGC paid to the income- tax  authorities   towards  the  income-tax  liabilities  of Forasol three sums aggregating to Rs. 11,95,304 as specified below:           (1)  Rs. 1,25,304 on September 14, 1967,           (2)  Rs. 4,70,000 on February 14, 1968, and           (3)  Rs. 6,00,000 on March 23, 1968.      During the  period of  extension covered  by  the  said Addendum No.  3 and after the expiry of that period disputes and  differences  arose  between  the  parties.  These  were referred to  arbitration as  provided in  the said contract. The parties appointed their respective arbitrators. The time for making the award was extended from time to time with the consent of the parties but as Forasol did not consent to any further  extension,   the   disputes   were   referred   for arbitration to  Mr. N.  Rajagopala Iyyangar, a retired judge of  this   Court,  being   the  Umpire   appointed  by   the arbitrators. In  the arbitration  proceedings  Forasol  made claims against  ONGC and  ONGC made  counter-claims  against Forasol. On  March 8,  1972, the  Umpire  entered  upon  the Reference and  on December  21, 1974,  the Umpire  made  his award. To  the said  award an erratum was annexed by which a particular  portion  to  the  said  award  was  deleted  and substituted by  a fresh  portion to  which  we  will  revert later. For  the present,  suffice it to say that by the said Erratum the  Umpire awarded  that from November 30, 1966 the rupee portion  should be  converted at the rate of FF 1, 000 equal to Rs. 1,517. 80 instead of the rate of exchange of FF 1,033 equal  to Re. 1,000 provided in Article IX. 3.1 of the said contract  and that this enhanced rate of exchange would apply to both Forsal and ONGC.      The said award was filed in the Delhi High Court and on May 7,1975,  a decree  in terms  thereof was  passed by that High Court with interest at the rate of 6 per cent per annum from the  date of the decree till the date of payment of the net decretal  amount. It  is pertinent  to note that neither party raised  any objection to the said award or to the form in which the said decree was passed.      After the  said decree  was drawn  up, Forasol filed in March 1976  an application  for execution of the said decree being Execution No. 77 of 1976. Under the said award certain amounts were directed by the Umpire to be paid to Forasol by ONGC in French 540 Francs and certain amounts in Indian rupees, and the amounts payable by  Forasol to  ONGC were to be adjusted and set off

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against the  amounts payable by ONGC to Forasol. In the said execution application  the rupee credit in favour of Forasol was converted  into French  Francs at  the rate  of Rupee 1. 5178 equal  to FF  1.000 being the enhanced rate of exchange specified in  the said  award. After  deducting the  amounts payable to  ONGC the balance payable to Forasol was shown as FF 5,  89, 727.51  being the  equivalent of  Rs. 11, 79, 455 with interest  on the principal sum upto the date of payment and the  costs of execution. The mode of execution specified in the said execution application was attachment and sale of the movable properties belonging to ONGC and specified in an annexure  to   the  said   execution  application.   In  its objections to  the said execution application ONGC contended that the  enhanced rate  of exchange  specified in  the said award was  only with  respect to  the  interest  payable  to Forasol from  November 30, 1966, and that to the rest of the payments to  be made  under  the  said  award  the  rate  of exchange mentioned in Article IX-3.1, namely, FF 1.033 equal to Rupee  1.000, was  applicable and that this contract rate of exchange  applied both  to the  French Franc part as also the Indian rupee part of the said contract. ONGC also raised certain  other   contentions.  On   the   basis   of   these contentions, it  was submitted  by ONGC  that instead of any amount being due to Forasol a sum of Rs. 6,43,831.44 was due by Forasol  to ONGC.  The learned  Single Judge of the Delhi High Court who heard the said execution application rejected all the  contentions of ONGC. He held that the contract rate of exchange applied only to the rupee part of the payment in respect of  the items  specified in  Article IX-3.  1 of the said contract  and that  in respect  of such  payments  from November 30, 1966, the enhanced rate of exchange provided in the said  award was  to apply  but in  respect of  the other payments to  be made to Forasol in French Francs the rate of exchange prevailing  at the  date of  the decree, namely, FF 1.000 equal  to Rs.  1.938 would  apply. The  learned Single Judge directed  that ONGC could satisfy the judgment debt by making payment  in French  Francs or, if it so preferred, by paying the  equivalent of it in Indian rupees at the rate of exchange prevailing  at the  date of  the decree and further ordered that  if the decretal amount was not paid within two weeks, attachment  as prayed  for should  issue. Against the said judgment  and order  of the  learned Single  Judge ONGC filed an  intra-court appeal  being E.F.  A. (OS) 5 of 1977. The Division  Bench of the Delhi High Court, which heard the said appeal, upheld the contention of ONGC that the 541 enhanced rate  of  exchange  specified  in  the  said  award applied only  to the  interest payable  to Forasol  and that with respect  to the  rupee amount due to ONGC and which was to be adjusted against French Francs payable to Forasol, the contract rate  of exchange  applied. It further held that as the said  award was  in French  Francs,  by  reason  of  the provisions of  the Foreign Exchange Regulation Act, 1973 (46 of 1973),  before executing the said award the French Francs would have to be converted into Indian rupees at the rate of exchange prevailing  on the  date of the said award, namely, FF 1.000  equal to Rupee 1.831. The Division Bench negatived the other  contentions raised  by ONGC.  It is  against this judgment and  order of  the Division Bench of the Delhi High Court that the present cross appeals have been filed.      So far  as Forasol’s  appeal is  concerned, four points were urged on its behalf before us.      These points were:      1.   The rate  of exchange specified in Article IX-3. 1           of the  said contract,  namely, FF  1.033 equal to

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         Rs. 1.000,  was applicable  only to 20 per cent of           the payment to be made in Indian rupees by ONGC to           Forasol.      2.   The Umpire  by the  said award  fixed the  rate of           exchange at  FF 1.000  equal to Rs. 1.5178 as from           November  30,  1966,  in  respect  of  such  rupee           payments only.      3.   The sum  of Rs.  10,19,380.39, being  the  balance           amount of  the sum of Rs. 11,95,304 which remained           payable to  ONGC by  Forasol  in  respect  of  the           income-tax paid by ONGC on behalf of Forasol after           making adjustments  against the  claim of Forasol,           was to be adjusted, as directed by the said award,           against Forasol’s  claim in  French Francs  on the           respective dates  of each  payment of tax, namely,           on September  14, 1967,  February  14,  1968,  and           March 23,  1968, and  as all  these payments  were           made after  November 30,  1966, and  as under  the           said award  the  enhanced  rate  of  exchange  was           directed to apply to 542           both parties, the said sum of Rs. 10,19,383.39 was           to be  adjusted against  the French Franc claim of           Forasol at  the enhanced rate of FF 1.000 equal to           Rs. 1.5178.      4.   So far  as the payment to Forasol in French Francs           was concerned,  neither the  said contract nor the           said  award  provided  for  conversion  of  French           Francs into  Indian rupees  and  the  said  decree           having been  passed in  foreign currency,  in case           ONGC did  not or  could not make payment in French           Francs, the  rate of  conversion of French Francs,           into Indian  rupees could  only be  at the rate of           exchange  prevailing  at  the  date  of  the  said           decree, that  is, on  May 7,  1975, which  was  FF           1.000 equal to Rs. 1.938.      ONGC, on  the  other  hand,  submitted  that  the  said contract provided a fixed rate of exchange of FF 1.033 equal to  Re.  1.000  for  all  amounts  payable  under  the  said contract, whether  in  rupees  or  in  French  Francs,  and, therefore, that  rate alone  should be  taken as the correct conversion ratio  except with  respect to  interest  on  the amount in  Franch Francs  payable to  Forasol in  respect of which the  Umpire had  enhanced the  rate of  exchange to FF 1.000 equal  to Rs.  1.5178.  In  the  alternative,  it  was submitted  that  the  conversion  rate  should  be  the  one prevailing at  the date  of the  said  award,  that  is,  on December 21, 1974, namely, FF 1.000 equal to Rs. 1.831.      Thus, there  are four different rates of exchange which feature in this case, namely,-      Rate provided in the          FF 1.033   =   Rs. 1.000      said contract      Rate fixed by the             FF 1.000   =   Rs. 1.5178      Umpire      Rate at the date of the       FF 1.000   =   Rs. 1.831      said award namely      on December 21, 1974      Rate at the date of           FF 1.000   =   Rs. 1.938      the decree, namely,      on May 7, 1975 543      We shall  first examine  the said contract to determine whether the rate of conversion mentioned in the said Article IX-3.1 applied  only to 20 per cent of the amounts in French Francs payable  by ONGC  to  Forasol  in  Indian  rupees  in

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respect  of  Forasol’s  operational  fee,  standby  fee  and equipment charges  as contended  by Forasol  or  whether  it applied to  all payments to be made under the said contract, whether in rupees or in French Francs, as contended by ONGC. In doing  so, a cardinal fact must be borne in mind, namely, that it  was a contract entered into between a foreign party and a  Government of  India undertaking  and that  under the said contract  the foreign  party had  agreed to  carry  out structural drilling  in relation to the exploration for oil, discovery of  oil being  of vital importance to the national interests of  India. From  the nature of things, the foreign party would  not desire  payment  for  the  services  to  be rendered and  the equipment  to  be  supplied  by  it  in  a currency  with  which  it  had  no  connection  and  of  the continuous stability  of which  it could not be certain. The foreign party would, therefore, naturally desire and bargain for payment  in the  currency of its own country, namely, in French currency.  The more so, as under the Credit Agreement entered into  between  the  Government  of  France  and  the Government of India the Government of France had agreed that credit should  be given by French suppliers to Indian buyers by accepting  payment on  deferred basis  for the  import of plant, machinery,  equipment and  materials and execution of certain   projects    including   oil    exploration,   and, accordingly, under  Article X-1.1.  of the said contract the French party,  Forasol, had  agreed to  accept  on  deferred basis payment  of the amounts due to it in French Francs. We have earlier  referred to  the relevant Articles of the said contract  as  also  extracted  some  of  them  in  order  to emphasize that  though under the said Article IX-3.1 Forasol had agreed  to accept  20 per  cent of  its operational fee, standby fee  and equipment  charges  in  Indian  Rupees,  it wanted that  the remaining  80 per  cent of  these fees  and charges as  also the  other amounts which were payable to it under the  said contract  should be  paid to  it  in  French Francs only  and should  not  be  made  dependent  upon  the stability of  the Indian rupee in the international monetary market. To  recapitulate, the  invoicing rules provided that in each  of its  invoices Forasol should indicate separately the amount  payable to  it in  French Francs  and the amount payable to it in Indian rupees and that so far as the French Franc part  was concerned, an initial payment was to be made immediately upon  the signing  of the  said contract and the balance was to be paid by remittances in French Francs. Such remittances were to be made by Forasol presenting 544 to ONGC a set of promissory notes payable in Paris and under Article X-4  2.2 of the said contract ONGC irrevocably bound itself to pay in French Francs the promissory notes given by it to  Forasol, Similar  provisions were  made in  the  said contract for  payment of  interest and  insurance charges to Forasol. If  Forasol were  to  indicate  separately  in  its invoices the  payment to  be made to it in French Francs and in Indian  rupees and  if the  payment of such French Francs was to  be made  in Paris  in French Francs, the question of providing for  a rate  of exchange  in the said contract for converting French  Francs into  Indian rupee  cannot  arise. Such conversion rate could only be in respect of the amounts payable to Forasol in Indian rupees. It is pertinent to note that under  Article IX-3.1  the amount  of fees  and charges payable to  Forasol were to be computed in French Francs and thereafter 80  per cent  thereof was  to be  paid in  French Francs and the remaining in Indian rupees. Even with respect to such twenty per cent Forasol did not want to be dependent upon a  possible fluctuation  in the  exchange rate of rupee

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and, therefore,  the 20 per cent part of the amount computed in French  Francs was  covenanted to be converted at a fixed rate provided  in the  said Article  IX-3.1.  This  is  made abundantly clear  by the  express terms  of the said Article IX-3.1 when  it states  that "ONGC  shall  pay  80%  of  the aforesaid amount  in French  Francs and the remaining 20% in Indian Rupees  using a fixed conversion rate of FF 1.033=Re. 1.000." It is thus only the 20 per cent of the said fees and charges computed  in French Francs in Forasol’s invoices but payable in  Indian rupees  which was  to be converted at the aforesaid rate  of exchange  specified in the said contract. This interpretation  receives further  support from  Article 2.2 of  Addendum No.  2 and  Article 2.5  of Addendum  No. 3 extracted above under which amounts refundable by Forasol to ONGC were  to be refunded in the same currency in which ONGC had paid them earlier. The contention of ONGC that the fixed rate of conversion provided in Article IX-3.1 applied to all payments to be made under the said contract to Forasol must, therefore, be rejected.      What  next  falls  to  be  considered  is  whether  the enhanced rate  of exchange  specified by  the Umpire  in the said award  applied only  to the  amount payable  by way  of interest to  Forasol as  contended by  ONGC. This contention was rejected  by the  learned Single  judge but found favour with the  Division Bench  of the  Delhi High  Court.  It  is necessary to  set out  some further facts in order to decide this point  During the  course of  the  hearing  before  the Umpire, ONGC had 545 filed a  statement showing  the adjustment  of the amount of French Francs  due to  Forasol against the amount of income- tax paid  by ONGC  on behalf  of Forasol.  It was,  however, erroneously assumed  by the  Umpire that  the said statement was an agreed one. After the Umpire had drafted his award he handed over  a copy  of it to the parties in order that they might point  out to him any incorrect statements or mistakes of a clerical or similar nature so that he could correct the same before  the award  was made and published. Accordingly, both the  parties appeared before the Umpire and agreed that there were  certain errors  in the draft award and requested the Umpire  to correct  these  errors  before  he  made  and Published his  award. The  Umpire  thereupon  corrected  the errors jointly pointed out to him by appending an Erratum to the said  award. In  the said Erratum the Umpire pointed out that the  aforesaid statement  was not  an agreed one and he directed that  certain  portions  of  the  award  should  be deleted and  substituted by  fresh paragraphs set out in the said Erratum.  In the  said Erratum the Umpire first pointed out certain  errors of  calculation and in the mentioning of figures which had been occurred. He then proceeded to state:           "Incidentally  it   was  pointed   out  that   the      statement on  pages 145-6  and in  the penultimate  and      last two  paragraphs on page 149 regarding the document      filed before me, as regards the adjustment of FF claims      due to  Forasol against the income-tax paid by ONGC was      not an   agreed  statement, but a statement prepared by      O.N,  G.C.  on  their  own  to  which  Forasl  had  not      consented,  As  a  result  of  this,  the  question  of      adjustment of the income-tax paid against FF claims, as      set out  in the  last para on page 149 and in the first      two paragraphs  on page  150 would  be deleted  and  in      their place  the Award would state that ’the amounts of      income-tax paid  by ONGC  shall be adjusted against the      FF claims  due to  Forasol on the date when each amount      was paid in the manner set out earlier in the Award.’

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         "To achieve  this purpose  the paragraphs on pages      149  and   150  beginning   with  the   words  ’In  the      calculation of  the interest  on the  several invoices’      and  ending   with  ’I  have  already  dealt  with  the      conversion rate  and there  is no  need to  go into  it      again’ on page 150 shall be deleted and a new paragraph      inserted, which will read as follows: 546      X          X          X             X            X           ’...as a  result the  aggregate figure of interest      payable to  Forasol by O.N.G.C. upto 30-6-1974 would be      FF 12,91,290,06. From this a small adjustment has to be      made...when these  are  adjusted  the  amount  due  for      interest  by   O.N.G.C.  to   Forasol   would   be   FF      12.88.185.35.’           ’This  figure   of  FF   12,91,290,06   has   been      calculated on  the basis of conversion rate of FF 1.033      to a rupee (or FF 1033 for every Rs. 1,000/-) which was      the rate  of exchange  agreed to  between thee  parties      under  Article  XI.  1.1.1  of  the  Agreement.  Messrs      Forasol have put forward before me a claim for enhanced      rate of interest and their claim is that this should be      Rs. 1,5178  for every  FF or  Rs. 1517,80  for every FF      1,000, I find that there is considerable correspondence      in the  course of  which they  have made  a claim  that      after devaluation of the rupee there should be a change      in the  rate of  exchange, Though  there is no specific      letter in  the file  agreeing to the enhancement I find      that in the later invoices demand has been made subject      to the  claim for enhanced rate of exchange. In view of      this I  consider that  from  30,11,1966  Rupee  portion      should be Converted at FF 1 = Rs. 1.5178 or FF 100= Rs.      1.517.80. Of  course this  rate of exchange would apply      to both the parties, Farasol and the O.N.G.C.’           ’As stated  earlier this  has been worked out only      upto 30.6.1974  and in  accordance with  the directions      contained in this award interest shall be calculated on      the principal  amount  right  upto  21.12.1974  on  the      entire amount  of  principal  and  the  entire  sum  of      principal and  interest would thereafter carry interest      at 6%  per annum, as stated in the other portion of the      award."           (The emphasis has been supplied by us.)      Article XI-1.1  of the said contract referred to in the said Erratum provided as follow:-           "XI-1.1.1 On  the basis  of the figures arrived at      in Articles  IX-2.1 and  IX-2.2 above and in accordance      with the  condition laid  down in Article IX-3.1 above,      the total 547      of FORASOL’s  operational and  standby fees,  equipment      charges and  transportation charges  payable in  Indian      Rupees under  this contract,  is  estimated  to  be  FF      1,495, 216,  Following signature of this contract, ONGC      shall pay  to FORASOL,  as an  advance, 10a/c  of  this      amount  i.e.  FF  149,522  in  Indian  Rupees  using  a      conversion rate of FF 1.033 = Rs. 1.000."      In order  to reach  the conclusion  which it  did,  the Division Bench  of the  Delhi High  Court relied  upon  that portion of the said Erratum where the Umpire has stated that Forasol has  put forward  before him  a claim  for "enhanced rate of  interest", overlooking  the other  portions of  the said Erratum,  particularly the  portion emphasized by us in the above  extract as also the fact that by the said Erratum certain  portions   of  the  said  award  were  deleted  and

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substituted by  fresh paragraphs.  On a perusal of the above extract from  the said Erratum, it is obvious that the claim made by Forasol was not for an enhanced rate of interest but for  an   enhanced  rate   of  exchange  by  reason  of  the devaluation of  the rupee. This is made clear by the rest of the very  same sentence  in the  said Erratum  in which this claim made  by Forasol  was referred  to, namely, "and their claim is  that this should be Rs. 1.5178 for every FF or Rs. 1.5178 for  every FF 1,000," If the claim of Forasol was for an enhanced rate of interest, the claim would have been that interest should be payable to it not at the contract rate of five per  cent per annum but at a higher rate and not that a higher rate  of exchange  should be  provided. The very next sentence which also we have emphasized clarifies that in the correspondence which took place between the parties, Forasol had made  a claim  that after devaluation of the rupee there should be  a change in the rate of exchange. Obviously, this change would be with respect to the rupee payment to be made to Forasol.  The very direction of the Umpire in this behalf makes it  clear that  he was not dealing only  with the rate of interest  for by  the said  direction, which  too we have emphasized in  the above  extract, the  Umpire awarded  that from November  30, 1966,  "Rupee portion should be converted at FF  1 =  Rs. 1.5178  or FF  1,000 =  Rs. 1,5178"  and  he further awarded  that "this  rate of exchange would apply to both the  parties, Forasol and the O.N.G.C." The question of the enhanced  rate of  exchange applying to both the parties would not  arise if  the enhanced  rate of exchange was with respect only to the interest payable to Forasol. 548      We are  fortified in  the conclusion we have reached by the fact that so far as the adjustment of claim of ONGC with respect to  income-tax paid  by it was concerned, the Umpire by the  said Erratum  expressly deleted  from the said award the portion  in  which  such  adjustment  was  made  at  the contract rate of FF 1.033 equal to Re. 1,000 and substituted it by fresh paragraphs. Under the said Erratum these amounts were directed  to be  adjusted from November 30, 1966 at the enhanced rate  of exchange  provided in  the said Erratum as all these amounts were paid by ONGC after the said date.      Another fact which fortifies this conclusion is that by the last  paragraph of  the  portion  of  the  said  Erratum extracted  above,   in  addition  to  an  enhanced  rate  of exchange, the  Umpire has  also awarded  a  higher  rate  of interest, namely,  six  per  cent,  on  the  entire  sum  of principal and interest from December 22, 1974.      The Division  Bench of the Delhi High Court was, the in error  in   holding  that  the  enhanced  rate  of  exchange specified in  the said  award applied  only to the amount of interest payable to Forasol. For the reasons stated above we find that  this enhanced  rate of  exchange applied  to  the payments in  Indian rupees  under Article IX-3.1 of the said contract to  be made  by ONGC  to  Forasol  from  and  after November 30,1966.      The question  which now  remains to  be  considered  in Forasol’s appeal is the date to be selected by the Court for converting into  Indian rupees  the French Franc part of the said award  in respect of which no rate of exchange has been fixed either by the said contract or the said award.      In an  action to recover an amount payable in a foreign currency, five  dates compete  for selection by the Court as the proper date for fixing the rate of exchange at which the foreign  currency  amount  has  to  be  converted  into  the currency of  the  country  in  which  the  action  has  been commenced and decided.

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    These dates are:      (1)  the date when the amount become due and payable;      (2)  the date of the commencement of the action; 549      (3)  the date of the decree;      (4)  the date when the court orders execution to issue;           and      (5)   the date  when the  decretal amount  is  paid  or           realized.      In a  case where  a decree has been passed by the court in terms of an award made in a foreign currency a sixth date also enters  the competition, namely, the date of the award. The case before us is one in which a decree in terms of such an award has been passed by the court.      The said  award directed certain payments to be made in a foreign  currency, namely,  French  Francs,  and  did  not specify the rate of exchange at which the French Francs were to be  converted into Indian rupees and the decree which was passed by  the Delhi  High Court  was in  terms of  the said award simpliciter  without fixing any date for conversion of the French  Francs into Indian rupees. As mentioned earlier, neither party  filed any  objection to  the said award or to the passing  of the said decree in the terms in which it was passed. The  question whether  an arbitrator  or umpire  can make an  award in  a foreign  currency  is,  therefore,  not directly in issue before us nor the question whether a court can simpliciter  pass a  decree in  terms of  such an  award without specifying the rate of exchange at which the foreign currency amount  will  have  to  be  converted  into  Indian rupees. Though  at the  first blush  these questions  do not appear to arise for our determination, they are inextricably linked with  the question  which we  have to  decide and  we will, therefore,  have to  address ourselves  to them in due course.      The question which one out of the dates mentioned above is the  proper date  to be  selected by  the court  does not appear  to  have  been  decided  in  this  country,  and  no authority of any Indian court on this point has been brought to  our  notice.  The  question,  however,  has  formed  the subject-matter of  decisions in England and both the learned Single Judge  as also  the Division  Bench of the Delhi High Court have referred to the decision of the House of Lords in Miliangos v.  George  Frank  (Textiles)  Ltd.(1)  and  other English  cases.   They  have   however,  reached   differing conclusions, the  learned  Single  Judge  holding  that  the conversion of French Francs into Indian 550 rupees should  be made at the rate of exchange prevailing on the date  of the  said decree and the Division Bench holding that such  conversion should  be at  the  rate  of  exchange prevailing at  the date  of  the  said  award.  It  will  be convenient, therefore,  to turn now to the English decisions on the  point to ascertain whether we can find some guidance from them  in arriving  at our conclusion. The judicial view on this  point in England has undergone a radical change and it will  not be  out of  place to ascertain the earlier view which the  courts in  England took  and the  view which  now prevails with  them and  to take  a brief survey of how this change in view came about.      In Tomkinson  and another v. first Pennsylvania Banking & Trust  Co.(1) (better  known as the Havana case) on appeal from the  decision of  the Court  of Appeal,  sub-nom In  re United Railways  of Havana  and  Regla  Warehouses  Ltd.,(2) after reviewing  the earlier authorities, the House of Lords held that  an English court cannot give judgment for payment

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of an  amount in foreign currency, and that for the purposes of litigation  in England  a debt  expressed  in  a  foreign currency must  be converted  into sterling with reference to the rate  of exchange  prevailing on  the date when the debt was payable.  Lord Denning,  who was  then a  member of  the House of  Lords, delivered a concurring judgment in which he pointed out  that the  origin of this rule was that sterling was for  a long  time regarded  as a  stable  currency,  the constant unit  of value  by which,  in the  eye of  the law, everything else  was measured,  and that so long as sterling was regarded  as stable  while other  currencies fluctuated, justice was  best done by taking the rate of exchange at the date of  the breach;  the creditor  being entitled to be put into as  good a  position as if the debtor had done his duty and paid  the debt on the due date and the creditor was only truly put  into such  a position  if the  debt was converted into sterling  at that  date. At  the same time Lord Denning also posed  a question  whether the  rule was  still  to  be applied when  sterling had  lost the value which it once had by reason  of the devaluation of the pound. He however, came to the conclusion that though such a rule was apt to produce an injustice to a foreign creditor who was owed money in the currency of  his own  country if  he chose to sue in English courts  instead  of  his  own,  he  must  put  up  with  the consequences. The  rule affirmed in the Havana case is known as the "breach date rule". 551      The next  decision which requires to be noticed is that of the Court of Appeal in Jugoslavenska Oceanska Plovibdo v. Castle Investment  Co. Inc.(1)  As this authority was relied upon by  the Division Bench of the Delhi High Court in order to arrive at its decision on this part of the case and as it formed the  sheet-anchor of the submission made on behalf of ONGC that  the proper  date of conversion should be the date of the award, it is necessary to examine what was decided in this case  in some detail. In that case, the plaintiffs were awarded a  sum expressed  in United  States  dollars  in  an arbitration held  in London. The defendants having failed to pay the  sum awarded,  the plaintiffs  sought leave  of  the court under  section 26  of the  Arbitration Act,  1950,  of England  to   enforce  the   award.  In   support  of  their application the  plaintiffs filed  an affidavit  showing the rate of exchange prevailing at the date of the award and the amount of the award in pound sterling and claimed the amount due under  the award  on the said basis. The questions which fell for  determination were whether an award expressed in a currency other than sterling was valid and lawful and, if so whether it  was enforceable  under the  said section 26. The Master dismissed  the application and the order of dismissal was affirmed  by Kerr J. On appeal, the court of Appeal held that the  award was  valid and  leave should  be granted  to enforce it, On the question whether English arbitrators have jurisdiction to  make an  award for  payment  in  a  foreign currency, the Court held that in a proper case they could do so and  that in  the case  before them  since the  money  of account and the money of payment under the charter party out of  which  the  disputes  between  the  parties  arose  were expressed in  United States  dollars  the  arbitrators  were entitled to  make their  award in  the same currency. It was further held  that leave  should be  granted to  enforce  an award expressed in a foreign currency provided the applicant had  filed   an  affidavit  showing  the  rate  of  exchange prevailing at the date of the award and giving the amount of the award converted into sterling. When that case fell to be decided Lord  Denning was  a member  of the Court of Appeal,

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having accepted  appointment as  Master of the Rolls. In the course of  his judgment in that case, Lord Denning M.R. said (at pages 501-2):           "The reason  why some  people have thought that an      award by  English arbitrators  must be  in sterling  is      because they  have  regarded  it  as  equivalent  to  a      judgment by an 552      English judge  which must  be in sterling. But there is      this difference. When commercial men are in dispute and      go to  arbitration,  they  wish  to  have  the  dispute      resolved. They  want a  decision one  way or the other.      Once given, they abide by it, The losing party pays up.      There is  rarely any need to call in the sheriff or his      officer to  enforce the award. So it is perfectly fair,      as between  them, for  the arbitrator to make his award      in the currency which is appropriate to their dealings.      But, when a plaintiff goes to a court of law, it is, as      often as  not, because the defendant cannot pay or will      not pay,  The plaintiff  wants to  get judgment against      him and,  if need  be, levy  execution on  his effects.      This is  so much  in the  mind of  the courts that they      have  ruled  that  they  will  give  judgment  only  in      sterling. That  is the  one currency  which is known to      the court  and to  the sheriffs  and their  officers. I      venture to  suggest that this view of the courts should      be open for reconsideration. If the money payable under      a contract  is payable  in a foreign currency, it ought      to be  possible for  an English court to order specific      performance of  it in  that foreign  currency; and then      let the exchange be made into sterling when it comes to      be enforced. I know that this is not yet the law. There      is high authority against it: see Re United Railways of      Havana and Regla Workhouses Ltd. But the House of Lords      have since  then held that specific performance can be,      ordered of  a contract  to make  a money  payment:  see      Beswlck v.  Beswick.(1) This  may point  the way  to  a      relaxation of  the old  rule and  enable the courts, in      proper circumstances,  to order  payment into a foreign      currency, such  as is  suggested by  Dr.  Mann  in  his      book.(2)           At any rate, there is no reason why the rule about      judgments of the courts should be extended to awards by      arbitrators, I  think we  should hold  that arbitrators      have  jurisdiction  to  make  an  award  in  a  foreign      currency whenever  that is the proper currency in which      payments under the contract should be made. 553           "The next question is the manner of enforcing such      an award.  It would,  no doubt, be possible to bring an      action on the award and seek a judgment from the courts      in sterling. In that case the rate of exchange would be      taken at  the date  of the award. But another way is to      seek the  leave  of  the  court  under  s.  26  of  the      Arbitration Act 1950 which says:           ’An award  on an  arbitration  agreement  may,  by      leave of the High Court or a judge thereof, be enforced      in the  same manner  as a judgment or order to the same      effect, and  where leave  is so  given, judgment may be      entered in terms of the award.           "If the  words ’to  the same  effect’ are  read as      meaning ’in  the  same  terms’,  there  would  be  some      difficulty in  applying this  section to  an award in a      foreign currency,  But I do not think they mean ’in the      same terms  They only  mean that  the judgment or order

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    must have  ’the same  effect’. If  the sum  awarded  is      converted into  sterling at the rate of exchange at the      date of  the award,  it does  have the same effect. The      proper course is for the applicant to file an affidavit      showing the  rate of  exchange at the date of the award      and giving  also the amount of the award converted into      sterling. Then  leave will  be given to enforce payment      of that sum,"      (The emphasis has been supplied by us.) It may  be mentioned  that the  defendants did not appear at any stage  of the  proceedings and  were not represented and there was  no  appeal  to  the  House  of  Lords  from  this judgment.      Whether  we   should  accept   the  decision   in   the Jugoslavenska case  as laying  down the  correct rule  to be applied so  far as courts in this country are concerned is a matter which  we will discuss after completing our survey of English authorities.      The question  again arose before the Court of Appeal in Schorsch Meier G.m.b.H. v. Hennin. That was not a case of an arbitration but it was an action by a German company against an 554 English firm  in an  English court for the price of goods in German  deutschmarks   in  which   currency   the   contract stipulated that  payment of  the price  should be  made. The action was  commenced by  the plaintiffs  in the West London County Court  for the sum of DM 3,756.03 being the amount of the price  of goods  sold and delivered. Under the contract, the money  of account  and the  money of  payment were  both German deutschmarks. At the time when the sum had become due the rate  of exchange was $ 1 equal to DM 8.30. At that rate the sterling  equivalent of  DM 3,756.03 was $ 452 sterling. Some time  later sterling  was devalued.  As a  result  $  1 sterling was  only worth  DM 5.85 and consequently the value of $  452 had  fallen to DM 2,664. If the rule in the Havana case applied  the plaintiffs  would have  got judgment for $ 452 which  would have  meant only a sum of DM 2,664. whereas if they  were able to claim and get judgment in deutschmarks the sterling  equivalent of  DM 3756.03  would be  $ 641. In other words, by getting judgment in sterling, the plaintiffs would lose  one-third of  the money  due to them; whereas by getting it  in deutschmarks  they  would  recover  the  full amount. The  plaintiffs declined  to give  any evidence with reference to  the rate  of exchange  but asked  for judgment only in  deutschmarks as the Federal Republic of Germany was a member  of the European Economic Community, They did so by relying upon  article 106  of the  Treaty of  Rome which  by section 2(1) of the European Communities Act, 1972, had been made part of the law of England. The County Court judge held that the  said article  106 had  no bearing  on the  rule of common law  and that he could give judgment only in sterling and accordingly  dismissed the  action. The plaintiffs filed an appeal. In this case too the defendant did not appear and was not  represented before  the Court of Appeal. The appeal was allowed.  With reference  to  the  English  law  on  the subject, apart  from the  Treaty of Rome, Lord Denning M.R., the afther  referring to  the rule  in the Havana case, held that the  reasons for  the rule  had ceased  to  exist  and, therefore, the  court was  at liberty  to discard  the  rule itself on the principle, "cessante ratione legis cessat ipsa lex" He further said (at pages 156-7):      "Only last  year  we  refused  to  apply  the  rule  to      arbitrations. We  held that  English  arbitrators  have      jurisdiction  to   make  their   awards  in  a  foreign

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    currency, when  that  currency  of  the  contract:  see      jugoslavenska Oceanska  plovibda v.  Castle  Investment      Co. Inc.  The time has now come when we should say that      when the  currency of a contract is a foreign currency-      that is to say, when 555      the money  of account  and the  money of  payment is  a      foreign currency-the  English courts have power to give      judgment in  that foreign  currency, they  can make  an      order in  the form:  ’It is  adjudged this day that the      defendant do  pay to  the plaintiff’ so much in foreign      currency (being  the currency  of the contract)’ or the      sterling equivalent  at the  time of  payment’. If  the      defendant does  not honour  the judgment, the plaintiff      can apply  for leave  to enforce  it. He should file an      affidavit showing  the rate  of exchange at the date of      the  application  and  give  the  amount  of  the  debt      converted into  sterling at  that date. Then leave will      be given to enforce payment of that sum.      (The emphasis has been supplied by us.) So far  as the  Treaty of Rome was concerned, the Court held that the  purpose of the said article 106 was to ensure that the creditor  in one member State should receive payment for his goods  in his own currency if it was the currency of the contract without  any impediment or restriction by reason of changes in the rate of exchange. With respect to the form of the judgment,  Lord Denning,  with whom Foster J. concurred, held that  he would  "adjudge that  the debtor do pay to the plaintiff DM 3,756.03 or the sterling equivalent at the time of payment" meaning thereby, as Lord Wilberforce pointed out in the Miliangos case (at page 468), the date when the court authorizes enforcement of the judgment in terms of sterling. Lawton L.J.,  the third  member of  the court,  on the other hand, was  of the opinion that the judgment should be in the from in  which the  plaintiffs had  asked for it, namely, in deutschmarks and  the plaintiffs  must be  left to extricate themselves from  the intricacies  of  the  law  relating  to execution and  exchange control.  There was no appeal to the House of Lords against this judgment of the Court of Appeal.      We now  come to  the case  of Miliangos v. George Frank (Textiles) Ltd.  How that  case reached  the House  of Lords makes interesting  reading by  itself. Prior to the judgment being delivered  in the  Schorsch Meier  case, Miliangos,  a Swiss, brought  an action  against George  Frank  (Textiles) Ltd., an  English company,  claiming the sum of Swiss Francs 415, 522.45  due to him for the price of polyester yarn sold and  dilivered  to  the  English  company  under  a  written contract. The  claim of  the Swiss  plaintiff was based upon invoices sent  to the  English company  and accepted by that company 556 and  alternatively   on  two  bills  of  exchange  drawn  in Switzerland by  the plaintiff and accepted by the defendants but which  had been  dishonoured on  presentation  on  their respective due  dates. This  alternative claim  was for  the amounts of  the said bills of exchange, namely, Swiss Francs 273,619.45 and  Swiss Francs  27,394 respectively,  and  the cost of  protesting the  bills and  interest. The  plaintiff apparently had  been advised  about the  position in English law and  had accordingly  claimed judgment in sterling as at the breach  date. The  defendants claimed that the plaintiff had committed a breach of contract inasmuch as a part of the yarn dilivered  to them was unifit for the purpose and filed a counter-claim for damages. Thereafter, the plaintiff filed a second  suit on another contract in which the claim was on

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the  same   alternative  counts.   Both  the   actions  were consolidated and  set down  for  hearing,  but  before  they reached hearing by their letter dated November 22, 1974, the defendants abandoned  their defence  and  counter-claim  and stated that  they would submit to judgment. Four days later, on November 26, 1974, the Court of Appeal delivered judgment in the Schorsch Meirer case. Thereupon the plaintiff amended the statement  of claim  in the first action and claimed the amount due in Swiss Francs as an alternative to the claim in sterling. Bristow  J. held  that the Schorsch Meirer case so far as it related to countries which were not members of the European Economic  Community was obiter and had been decided per incuriam in that only one party had been represented and all the  relevant authorities had not been cited. He further held that  the decision  in that  case was inconsistent with what the  House of  Lords had  held in  the Havana  case and accordingly  he   gave  judgment  for  the  sum  claimed  in sterling. The  plaintiff went in appeal (Miliangos v. George Frank (Textiles)  Ltd. The  Court of  Appeal held  that  the Schorsch Meier  case was  not decided  per incuriam  and was binding upon  the trial  court and  gave  judgment  for  the plaintiff in  Swiss Francs.  The  English  company  went  in appeal to the House of Lords. We are not concerned with what was said  in that  case with respect to whether the Schorsch Meier case  was decided  per incuriam  or not and whether an English court could depart from the rule in the Havana case. Suffice it  to say  that the  House of  Lords by  a majority (Lords Simon  of Glaisdale  dissenting)  held  that  it  was legitimate for  the House  of the  Lords to  depart from the "breach date  conversion" rule and recognize that an English court was  entitled to  give judgment  for a  sum  of  money expressed in a foreign 557 currency in  the case of obligations of a money character to pay foreign  currency under  a contract,  the proper  law of which was  that of  a foreign country, and when the money of account was that of that country or possibly of some country other than  the United  Kingdom. The  House of Lords further held that  the instability  which had  overtaken  the  pound sterling  and  other  major  currencies  since  its  earlier decision in  the Havana  case  as  well  as  the  procedures evolved in  consequence thereof by the English courts and by arbitrators in  the City  of London  to  secure  payment  of foreign  currency   debts  in  foreign  currency,  justified departure from  that  decision  in  terms  of  the  Practice Statement  (Judicial   Precedent)  (under  which  the  House affirmed its  power to  depart from a previous decision when it appeared  right to  do so,  recognizing that too rigid an adherence  to   precedent  might  lead  to  injustice  in  a particular case  and unduly  restrict the development of the law) since  a new and more satisfactory rule could be stated to enable  the courts to keep step with commercial needs and would   not   involve   undue   practical   and   procedural difficulties.      We are  concerned here  with what was said in that case with respect  to the date to be taken for converting foreign currency into  English currency.  Lord Wilberforce  held (at pages 468-9)  that the claim should be made specifically for the  foreign  currency  and  to  this  might  be  added  the alternative "or the sterling equivalent at the date of....." and that  as regards  the conversion  date to be inserted in the claim  or in  the judgment of the court, though the date of judgment was a workable date, he would favour the date of payment meaning  thereby the  date when the court authorizes enforcement of the judgment in terms of sterling, because in

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some cases, particularly where there was an appeal, the date of judgment  might impose  upon the  creditor a considerable currency risk,  Lord Wilberforce  further observed  (at page 469):           In the  case of  arbitration, there may be a minor      discrepancy,  if   the  practice  which  is  apparently      adopted (see  the Jugoslavenska  case (1974)  Q.B. 292,      305) remains  as it is, but I can see no reason why, if      desired, that  practice should not be adjusted so as to      enable conversion  to be made as at the date when leave      to enforce in sterling is given."      (The emphasis has been supplied by us.) 558      Lord Cross of Chelsea pointed out (at pages 497-8) that it  would  be  absurd  to  have  one  rule  with  regard  to arbitrations on  debts expressed  in a  foreign currency and another with  regard to actions on similar debts and that in a  case  where  the  defendant  failed  to  deliver  foreign currency for  the payment  of which  the judgment was given, the date for its conversion into sterling should be the date when the  plaintiff was  given leave to levy execution for a sum expressed  in sterling. Lord Edmund-Davies, referring to the Jugoslavenska  case,  said  (at  page  501)  that  being governed by  section 26  and sub-section  (1) of  section 36 (which deals  with enforcement  of foreign  awards)  of  the Arbitration Act, 1950, the award of American dollars in that case of  necessity had  to be converted into sterling at the rate of  exchange prevailing  on the date when the award was made and that but for that fact, the most just rate would be that prevailing  when the  award was being enforced, for the plaintiff had  been kept  out of  his money  until then  and there was  no reason  why this latter rate should not be the one adopted  when judgments  expressed in a foreign currency are  being   enforced.  According   to  Lord  Edmund-Davies, Miliangos should  have been  given judgment mutatis mutandis in the  form approved  of by  Lord Denning  M.R. in Schorsch Meier case,  namely, that  "it is this day adjudged that the defendant do pay to the plaintiff 416,144.20 Swiss francs or the sterling equivalent at the time of payment", which would mean, as  pointed out by Lord. Wilbeforce (at page 368), the date when  the court  authorizes enforcement of the judgment in terms  of sterling, Lord Fracer of Tullybelton opined (at page 502)  that to  take the date of the commencement of the action might  result in consequences as unjust as taking the breach date  because between the commencement of an action a period of  a year  or more might easily elapse, allowing for appeals, before  payment was  made  and  that  the  date  of judgment would  be better but there seemed no reason why the latest practicable  date, namely,  the date  when the  court authorizes the  enforcement of  the judgment  should not  be taken. Lord  Simon  of  Glaisdale  held  in  his  dissenting judgment that  there was  no reason  for departing  from the rule laid  down in the Havana case and that this should only be done  by Parliament  on executive  or expert advice. With reference to  the Jugoslavenska case Lord Simon observed (at page 489):           "If the sterling judgment rule and the breach date      rule were  to be  reconsidered by  a properly qualified      body, no doubt the Jugoslavenska case would come within      its purview." 559      The principle  laid down  by the  House of Lords in the Miliangos case  was extended  by it to include a claim based on damages  for torts  and for  breaches of  contract in its decision in  Owners of  M.V. Eleftherotria  v. The Owners of

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M.V. Despina  R-The Despina R and Services Europe Atlantique Sud (Seas)  of Paris  v. Stockholms Rederiahtiebolag Svea of Stockholm, better  known as  The Despina  R, in  two appeals heard one  after the  other and  disposed  of  by  a  common judgment.      The first  appeal arose  out of a collision between two Greek ships,  the Despina  R and  the Eleftherotria in which the latter  was damaged.  The Eleftherotria  was owned  by a Liberian company  which had  its head office in Piracus. The managing agents had their principal place of business in New York and  the bank  account used  for  moneys  received  and payments made  on behalf  of the  owners was  a U.S.  dollar account in  New York.  An agreement  was reached  under  the terms of  which the  owners of  the Despina R were to pay to the owners  of the Eleftherotria 85 per cent or the loss and damage suffered  as a  result of the collision. The expenses of repair  had been  incurred  in  various  currencies.  The question whether  the damages were to be paid in sterling or some other  currency was  referred to  the Admiralty  judge. Brandon J. held that he had jurisdiction to award damages in a foreign  currency, but  that he  was bound by authority to award them  in the  currency of  expenditure. The  Court  of Appeal, dismissing  an appeal by the owners of the Despina R and allowing a cross appeal, held that here was jurisdiction to award  damages in  tort  in  sterling  or  in  a  foreign currency, and  that, in  the circumstances  of the case, the appropriate currency  was the  plaintiffs’  currency  rather than the currency of the expenditure.      The second  appeal was  in respect of a cargo of onions shipped to  Brazil by  the French  charterers of  a Swedish- owned motor  vessel, the  Folias. The cargo arrived damaged, and the  cargo receivers’  claim for  damages was settled by the charterers  in Brazilian cruzeiros, which they purchased with French Francs, their normal business currency. The hire under the  charter party was payable in U.S. dollars and the proper law  of the  contract was English law. In arbitration proceedings the  owners  admitted  their  liability  to  the charterers, but  contended that  payment should  be made  in cruzeiros. By then the 560 value of  the cruzeiro  against the  French Francs  was half what it  had been  when the  charterers had  paid the  cargo receivers.  The  arbitrators  made  their  award  in  French Francs, On  a special  case stated  Robert Goff J. held that the award  should have  been made  in cruzeiros as being the currency of  the loss. On appeal by the charterers the Court of Appeal restored the award of the arbitrators.      The owners  of the  Despina R  as also the Swedish ship owners went  in appeal  to the  House  of  Lords.  Both  the appeals were dismissed. The House held that in a claim based on tort,  it was  fairer to give judgment in the currency in which the loss was sustained than in the sterling equivalent at the date of the breach or loss; that the principles to be applied in  ascertaining the currency of the loss were those of restitution  in integrum  and  reasonable  foreseeability and, therefore,  where a  plaintiff proved that he conducted his business  in a  specific currency  and it was reasonably foreseeable that  he would the that currency to purchase the necessary  currency   to  meet   the  immediate  and  direct expenditure caused  by the  defendant’s tort,  then judgment should  be   expressed  in  the  plaintiff’s  currency  and, accordingly, the  Court of  Appeal had  properly varied  the order  from  a  judgment  expressed  in  the  currencies  of expenditure to  the currency  of the  business conducted  on behalf of  the owners  of the  Eleftherotria,  namely,  U.S.

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dollars. The  following passage  from the  opinion  of  Lord Wilberforce (at pages 696-7) is instructive:           "I do  not think  that there  can now be any doubt      that given  the ability  of an  English court  (and  of      arbitrators sitting  in this  country) to give judgment      or make  an award  in a  foreign currency,  to  give  a      judgment  in   the  currency  in  which  the  loss  was      sustained produces a juster result than one which fixes      the plaintiff  with a sum in sterling taken at the date      of the breach or of the loss." It was  further held  that where  the terms  of  a  contract governed by  English law did not expressly or by implication show that  the parties  had intended  that payments  arising from a breach of contract were to be paid in the currency of account or  other named  currency,  the  court  should  give judgment in  the currency  that best  expressed the  party’s loss; that, although the appeal in the second case concerned a  charterparty   which  expressly   stated   that   certain contractual payments  should be  made in  U.S. dollars,  the terms of  the charterparty  did not  show that  payment  for damage arising out of a breach of contract 561 was to  be made  in that  currency; that,  arising from  the owners, breach  the charterers  had used  French  Francs  to purchase the  necessary cruzeiros  to settle  the receivers’ claim and,  in those  circumstances, the Court of Appeal had correctly  affirmed   the  arbitrators’  decision  that  the currency that  best expressed  the charterers’  loss was the currency of  their business,  namely,  French  Francs.  With respect to  the arbitrators jurisdiction to make an award in a foreign currency, Lord Wilberforce said (at pages 702-3);           "In my  opinion a  decision in  what currency  the      loss was  borne or  felt can be expressed as equivalent      to finding  which currency  sum appropriately or justly      reflects the  recoverable loss.  This is  essentially a      matter  for  arbitrators  to  determine.  A  rule  that      arbitrators may  make their  award in the currency best      suited to achieve an appropriate and just result should      be a  flexible rule  in which  account must be taken of      the circumstances in which the loss arose, in which the      loss was  converted into  a money  sum, and in which it      was felt by the plaintiff. In some cases the ’immediate      loss’  currency  may  be  appropriate,  in  others  the      currency in  which it was borne by the plaintiff. There      will be  still others in which the appropriate currency      is the  currency of the contract. Awards of arbitrators      based upon  their appreciation  of the circumstances in      which the  foreign currency  came to be provided should      not be set aside for, as such, they involve no error of      law."      It will  also be  useful to  refer  at  this  stage  to certain  Practice   Directions  given,  following  upon  the Miliangos case,  with respect  to claims  and  judgments  in foreign currency  and enforcement  of  such  judgments.  The Miliangos case  was decided  on  November  5,1975,  and  the Practice Directions  in question  were issued  by the Senior Master of  the Supreme  Court of  judicature (Queen’s  Bench Division) on  December 18,1975,  with the concurrence of the Chief Chancery  Master acting  on the authority of the Vice- Chancellor so  far as  they applied  to the  practice in the Chancery Division, and of the Senior Registrar of the Family Division. so  far as  they applied  to the  practice in that Division. As pointed out in Halsbury’s Laws of England, 4th 562 ed.,  vol.   37,  para.  12,  practice  directions  "provide

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directions as  to matters  of practice and procedure for the assistance and guidance of litigants in the conduct of their proceedings, and  in the  administration  of  civil  justice generally, and, although they lack the force of law they are of enormous  value, to  the courts,  to practitioners and to all who  are involved  in the civil judicial process". Under the Practice  Directions dated  December 18,1975,  mentioned above, before  a writ  of summons  is issued  in  which  the plaintiff makes  a claim  for a  debt or a liquidated demand expressed in  a foreign  currency, the writ must be endorsed with a  certificate signed  by or on behalf of the solicitor of the  plaintiff or  by the  plaintiff, if  he is acting in person, certifying  the  rate  current  in  London  for  the purchase of  the unit of the foreign currency claimed at the close of  business on the date next or most nearly preceding the date  of the  issue of  the writ  and stating whether at that rate  of exchange the debt or liquidated demand claimed in the  writ amounts  to "$..  or exceeds $ 650 (as the case may be)",  This certificate  is required  for the purpose of ascertaining the  proper amount  of the costs to be endorsed on the  writ. The judgment which would be entered in respect of such  a claim  would show  that it has been adjudged that the defendant  do pay  the  plaintiff  the  sum  in  foreign currency for  which the  court has  ordered judgment  to  be entered or  its sterling  equivalent at the time of payment. Where a  defendant desires  to pay into court a sum of money in satisfaction  of the  claim in foreign currency he may do so subject  to the requirements of the Exchange Control Act, 1947. Where,  however, a  plaintiff  desires  to  enforce  a judgment expressed in a foreign currency by the issue of the writ of fieri facias, the praecipe for the issue of the writ must first  be endorsed  and signed  by or  on behalf of the solicitor of  the plaintiff  or by  the plaintiff,  if he is acting in  person, with a certificate certifying the rate of exchange current  in London  for the  purpose of the unit of the foreign  currency in which the judgment is expressed, at the close of the business on the date nearest or most nearly preceding the  date of  the issue of the writ and mentioning what the amount in pound sterling at that rate would be. The amount so  certified will  then be  entered in  the writ  of fi.fa. A similar certificate is required where the plaintiff desires to  enforce a  judgment debt  expressed in a foreign currency by adopting garnishee proceedings or other modes of execution.      The above  survey shows  the position in English law to be as follows: 563      (1)  Until  recently   the   rule   that   was   firmly           established was  that an  English court could give           judgment only in English currency and that for the           purposes of  litigation in  England to  recover  a           debt expressed  in a  foreign currency,  such debt           had to  be converted  into sterling with reference           to the  rate of  exchange prevailing  on the  date           when the  debt was payable. This rule was affirmed           by the House of Lords in the Havana case.      (2)  The reason  for this  rule was  that sterling  was           regarded as  a stable currency and a constant unit           of value;  and that by taking the rate of exchange           at the  date of the breach, the creditor was being           put into  as good  a position as if the debtor had           done his duty and paid the debt on the due date.      (3)  After sterling  ceased to be a stable currency and           became   subject    to   fluctuations    in    the           international  monetary   market  a  new  line  of

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         thinking  began   to   emerge,   particularly   in           commercial arbitrations  where foreign  currencies           were involved,  and the arbitrators in the City of           London started  making awards expressed in foreign           currency.      (4)  This new  trend found  judicial recognition in the           Jugoslavenska case  in which  the Court  of Appeal           held that  arbitrators in England had jurisdiction           to make  an award  in a foreign currency in a case           in which  the money  payable under  a contract  is           payable in a foreign currency. The Court of Appeal           further held  that section  26, now section 26(1),           of the  English Arbitration  Act, 1950,  should be           construed having  regard to  section 36(1) of that           Act,  which  deals  with  enforcement  of  foreign           awards, and that the words "to the same effect" in           the expression  "an award...may..  be enforced  in           the same manner as a judgment or order to the same           effect" in  section 26(1)  did not mean a judgment           or order  "in the same terms" but meant a judgment           or order  having "the  same effect"  this would be           achieved if the sum awarded were 564           converted into  sterling at  the rate  of exchange           prevailing on  the date  of the  award,  and  that           leave to  enforce an  award expressed in a foreign           currency should be given by the court provided the           applicant had  filed an affidavit showing the rate           of exchange as at the date of the award and giving           the amount of the award converted into sterling.      (5)  In the  Jugoslavenska case,  the Court  of  Appeal           took  the  date  of  the  award  as  the  date  of           conversion by  reason of the interpretation placed           by it  upon the  words "to  the  same  effect"  in           section  26(1)   of  the  Arbitration  Act,  1950,           because  an   award  could   for  the  purpose  of           enforcement have  the same effect as a judgment in           an action  on the  award only  if the  date of the           award were  taken as the date of conversion as, by           reason of  the decision  in the Havana case, which           was then  the law,  in such  an action the date of           conversion would  have  to  be  the  due  date  of           payment which,  the debt being crystallized by the           award, would  be the  date of  the award,  and the           judgment, therefore,  in such an action would have           to be given on that basis.      (6)  The development  in law  was carried  yet one step           further in  the Schorsch  Meier case  where in  an           action for the price of goods, the plaintiff being           a member  of the  European Economic Community, the           Court of  Appeal held  that the  court could  give           judgment to  the creditor in a foreign currency if           that was  the currency of the contract, that is to           say, if  the money  of account  and the  money  of           payment is  foreign currency.  The court also held           that the  date of conversion should be the date of           payment  meaning   thereby  as   Lord  Wilberforce           pointed out  in the  Miliangos case (at page 468),           the date when the court  authorizes enforcement of           the judgment in terms of sterling.      (7)  The Schorsch  Meier case  was not  decided  purely           upon Article  106 of  the Treaty  of Rome which by           section 2(1)  of  the  European  Communities  Act,           1972, had 565

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         been made  part of  the law of England, but it was           also decided  upon the  general principle that the           reasons for  the rule  in the  Havana case  having           ceased to  exist, the  court  was  at  liberty  to           discard the  rule itself.  Thus, what the Schorsch           Meier case  decided was  directly contrary  to the           decision of the House of Lords in the Havana case.      (8)  Both the Jugoslavenska case and the Schorsch Meier           case were  decided without  the other  side  being           represented. From this it does not follow that the           judgments delivered  in those cases were not folly           considered judgments. The leading judgment in each           of these  two cases was that Lord Denning M.R. who           at the date when the Havana case was decided was a           member of  the House  of Lords.  In his concurring           opinion  in   the  Havana   case  he  had  already           expressed a  doubt and  posed a  query whether the           "breach date"  rule should  continue to be applied           when sterling  had lost  the value  it once had by           reason of the devaluation of the pound.      (9)  The question  again fell  for consideration by the           House of  Lords in  the Miliangos  case.  In  that           case, the House of Lords departed from the rule in           the  Havana   case,  namely,   "the  breach   date           conversion" rule  and recognized  that an  English           court could give judgment in a foreign currency in           a case  where under a contract the money was to be           paid in  that currency  if the  proper law  of the           contract was  that of  a foreign  country and  the           money of  account was  of that  country. So far as           the date  of conversion was concerned, all the Law           Lords, except  Lord Simon  of   Glaisdale, were of           the opinion  that it  should be  the date when the           court authorizes  the enforcement  of the judgment           in terms of sterling.      (10) Though the  Jugoslavenska case  was not  expressly           overruled  in  the  Miliangos  case,  in  all  the           opinions delivered  in that  case  except  in  the           opinion of  Lord Frasser  of Tullybelton  where no           reference is  made to  that case,  it was  doubted           whether in the future the 566           rule in  the Jugoslavenska  case should  or  would           hold the  field. Lord  Wilberforce opined  that he           saw  no  reason  why,  if  desired,  the  practice           adopted in  that case should not be adjusted so as           to enable  coversion to  be made  at the date when           leave to  enforce the  award in sterling is given.           Lord Cross of Chelsea thought it absurd that there           should be  one rule  for arbitrations with respect           to debts  expressed  in  a  foreign  currency  and           another rule  with respect  to actions  on similar           debts.  Lord   Edmund-Davis  said   that  in   the           Jugoslvenska case  the rate of exchange prevailing           on the  date of the award had to be adopted by the           court because of the provisions of sections 26 and           36(1) of  the English Arbitration Act and that but           for such  provisions the  most just  rate would be           that prevailing when the award was being enforced.           Even Lord  Simon of  Glaisdale in  his  dissenting           opinion expressed the view that if Parliament were           to reconsider  the sterling  judgment rule and the           breach date  rule, the  rule in  the Jugoslavenska           case  would   come  within  the  purview  of  such           reconsideration.

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    (11) The principle  laid down in the Millangos case was           extended by  the House of Lords in the case of The           Despina R  to actions  in tort and for damages for           breach of  contract on  the  ground  that  it  was           fairer to  give judgment  in the currency in which           the  loss  was  sustained  than  in  its  sterling           equivalent at  the date of the breach or loss, the           principles  to  be  applied  in  ascertaining  the           currency of  the loss being those of restitutio in           integrum  and  reasonable  foreseeability  of  the           plaintiff using  a particular  foreign currency to           purchase  the   necessary  currency  to  meet  the           immediate and  direct expenditure  caused  by  the           defendant’s tort  or breach  of contract.  It  was           further held  that in  the case of arbitrations it           was for  the  arbitrators  to  determine  in  what           currency the  loss was  borne or felt and that the           rule that  arbitrators may make their award in the           currency best suited to achieve an appropriate and           just result  should be  a flexible  rule in  which           regard should be had to the 567           circumstances in  which the  loss arose,  in which           the loss  was converted  into a  money sum, and in           which it was felt by the plaintiff.      (12) So far  as practice  and procedure  is  concerned,           under the  Practice Directions  dated December 18,           1975, for  the purpose  of ascertaining the proper           amount of  the costs to be endorsed on the writ of           summons   the   plaintiff’s   solicitor   or   the           plaintiff, if  he  is  acting  in  person,  is  to           certify the  rate of exchange current in London at           the close of the business on the date next or most           nearly preceding the date of the issue of the writ           and to mention the sterling equivalent at the rate           of the  sum in  foreign currency  claimed  in  the           action. The  judgment is to be entered for the sum           in foreign  currency adjudged  by the  court to be           payable by  the defendant  to the plaintiff or its           sterling equivalent  at the  time of payment. None           the less  if a  judgment  is  to  be  enforced  by           execution, the  application for  execution  is  to           state the  rate of  exchange current  in London on           the date nearest or most nearly preceding the date           when the application is made.      We have spent some time in ascertaining the English law on the  subject by reason of the absence of any authority of any Indian  court on  this point  and  because  the  learned Single Judge  has based  his decision  on the Miliangos case while the  Division Bench  of the Delhi High Court has based its  on   the  Jugoslavenska   case.  Further,  the  English decisions referred  to by us are of courts of a country from which we  have derived our jurisprudence and a large part of our laws and in which the judgments were dilivered by judges held in  high repute.  Undoubtedly, none  of these decisions are binding upon this Court but they are authorities of high persuasive value  to which  we  may  legitimately  turn  for assistance. Whether the rule laid down in any of these cases can be applied by our courts must, however, be judged in the context of our own law and legal procedure and the practical realities of litigation in our country. When a foreigner has to receive  a sum of money which should justly be payable to him in a foreign currency and, because of the default of the paying party,  seeks to  recover  its  payment  through  the court, the first question which arises is whether a court in

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India would have 568 jurisdiction to  pass a  decree for  a sum  expressed  in  a foreign currency. Though on principle there is no reason why a court  should not  be able  to do  so no  court can pass a decree directing  a defendant  to do  an  impossible  or  an illegal act  and in  view of  the provisions  of our Foreign Exchange  Regulation   Act,  1973,   and  the   restrictions contained therein  on making payments in a foreign currency, if a  decree  were  to  be  passed  Simpliciter  for  a  sum expressed in  a foreign  currency, it would be to direct the defendant to  do an  act which  would be in violation of the Foreign Exchange  Regulation Act,  1973. Such  a decree can, therefore, only  be passed  by making the payment in foreign currency subject  to the  permission of the foreign exchange authorities being  granted. If  however, the  authorities do not grant  permission for  payment of  the judgment  debt in foreign currency, it would not be possible for the defendant to make  such payment,  resulting  in  the  decree  becoming infructuous and  the plaintiff getting nothing under it. The view of  Lawton L.J.  in the  Schorsch Meier  case that  the plaintiff should  be given  judgment in the form in which he asked for  it and must be left to extricate himself from the intricacies of  the law  relating to  execution and exchange control does not commend itself to us for it does not appear to us  to be  conducive to  the ends  of justice.  The court must, therefore,  provide for the eventuality of the foreign exchange authorities  not granting  the requisite permission or even  if such  permission is  given,  the  defendant  not paying the  decretal debt,  or not  wanting to discharge the decree by  making payment  in foreign  currency or in Indian rupees. This can only he done by the decree providing in the alternative for  payment of a sum of money in Indian rupees, which will  be equivalent  to the  sum  decreed  in  foreign currency. It  is but just that a man, who is in law entitled to receive  a sum  of money  in a  foreign currency,  should either receive  it in  such currency  or should  receive its equivalent in Indian rupees. It is here that the question of the date  which  the  court  should  select  for  converting foreign currency  into Indian  rupees arises. The court must select a  date which puts the plaintiff in the same position in which he would have been had the defendant discharged his obligation when  he ought to have done, bearing in mind that the  rate   of  exchange   is  not  a  constant  factor  but fluctuates, and  very often  violently fluctuates, from time to time.  With these  considerations in  mind, we  will  now examine the  feasibility of  the several dates set out by us at the beginning of our discussion on this point.      The first  of the  five dates  listed  earlier  by  us, namely, the  date when  the amount  became due  and payable, does not have the effect 569 of putting  the plaintiff  in the  same position in which he would have  been had the defendant discharged his obligation when he  should have  done because between that date and the date when  the suit is decreed the rate of exchange may have fluctuated to  the plaintiff’s  prejudice, resulting  in the amount decreed  in rupees  representing only  a fraction  of what he was entitled to receive. Equally, the possibility of the plaintiff getting more than what he had bargained for in case the  rate of  exchange had  fluctuated  in  his  favour cannot be  ruled out.  To select,  as the English courts had done earlier,  the date  when the  amount became  due or the "breach date", as the English courts have termed it, is thus to expose  the parties  to the  unforeseeable changes in the

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international monetary market. The selection of the  "breach date" cannot,  therefore,  be  said  to  be  just,  fair  or equitable because  in a  case where the rate of exchange has gone against  the plaintiff, the defendant escapes by paying a lesser  sum than  what he  was bound  to and  thus is  the gainer by  his default  while in the converse case where the rate  of  exchange  has  gone  against  the  defendant,  the defendant would  be subjected to a much  greater burden than what he should be.      The second  of the  dates mentioned  above, namely, the date of  the commencement  of the action or suit, is equally subject to the same criticism. This date was rejected in the Miliangos case  because, according  to Lord  Wilberforce (at page 469), it placed "the creditor too severely at the mercy of the  debtor’s obstructive  defences.. or the law’s delay" In that case Lord Fraser of Tullybelton pointed out (at page 502) that  if the  date of  the commencement  of the  action "were to be taken for conversion, a period of a year or more might easily  elapse. allowing  for appeals,  before payment was made." In our country, it is the misfortune of litigants that by  reason of  ever-increasing  volume  of  litigation, overcrowded court  dockets and undermanned courts, suits are often not disposed of for an unconscionably long time and if we take  into account  the  time  that  would  be  spent  in appeals,  further   appeals,   and   revision   and   review applications which  may  be  filed,  the  longevity  of  the litigation is doubled, if not tripled, so that none can with any  certainty   predict  even   a  probable  date  for  its termination. The  selection of the date of the filing of the suit would, therefore, leave the parties in as uncertain and precarious a  position as the selection of the date when the amount became payable or the "breach date". 570      We will  now consider  the feasibility of selecting the third date,  namely,  the  date  of  the  decree.  A  decree crystallizes the  amount payable  by the  defendant  to  the plaintiff and  it is the decree which entitles the judgment- creditor to  recover the judgment debt through the processes of law.  An  objection  which  can,  however,  be  taken  to selecting this date is that the decree of the trial court is not the  final decree  for there  may be  appeals  or  other proceedings against  it in  superior courts  and by the time the matter  is finally  determined,  the  rate  of  exchange prevailing on  that date  may be  nowhere  near  that  which prevailed at  the date  of the decree of the trial court. To select the  date of  the decree  of the  trial court  as the conversion date would, therefore, be to adopt as unrealistic a  standard  as  the  ’breach  date".  This  difficulty  is, however, easily  overcome by  selecting the  date  when  the action is  finally disposed of, in the sense that the decree becomes final  and binding  between the  parties  after  all remedies against  it are  exhausted. This can be achieved by the court  which hears the appeal providing that the date of its decree  or other  proceeding  in  which  the  decree  is challenged would  be the  date for conversion of the foreign currency sum  into Indian  rupees in  cases where the decree has not been executed in the meantime. The real objection to selecting this date, however, is that a money decree and the payment by the judgment debtor of the judgment debt under it are  two   vastly  different  matters  widely  separated  by successive execution  applications  and  objections  thereto unless the  judgment-debtor chooses  to pay  up the judgment debt of  his own  accord which is generally not the case. In the vast  majority of cases a money decree is required to be enforced by execution.

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    Would the  proper date  of conversion  then be the date when the court-orders execution to issue ? This date appears to have  found favour with all the Law Lords who decided the Miliongos case, except Lord Simon of Glaisdale. We, however, find  the   selection  of   this  date  equally  beset  with difficulties. Execution  of a decree is not a simple matter. In execution  of a money decree, first the judgment-debtor’s property has  to be  attached. Pending  attachment  a  third party, at  times set up by the judgment-debtor, may prefer a claim to  the attached  property. Such claim will have to be investigated and  determined by  the executing  court.  Even where no  claim is preferred the attached property cannot be brought to  sale  immediately.  A  proclamation  giving  the prescribed particulars has to be first made. Even after such proclamation, the  property cannot  be put up for sale until after the expiry of the period prescribed by O. 21 r. 68 of 571 the Code  of Civil Procedure, 1908 (V of 1908), unless it is subject to  speedy and  natural decay or when the expense of keeping it  in custody  is likely  to exceed its value. Even after the  sale has  taken  place  the  judgment-debtor  may further hold  up the  receipt of  the sale  proceeds by  the decree-holder by  raising objection  to the  conduct of  the sale. Even  otherwise, at  times, a  fresh auction  sale may have to  be held if the auction purchaser commits default in paying the  balance of  the purchase  price. A  considerable time would  thus elapse  between the  date  when  the  court orders execution to issue and the date of the receipt of the sale proceeds  by the  decree-holder. This  passage of  time would as  much expose  the decree-holder  to the  hazards of fluctuations in  the rate of exchange as selection of any of the  three  dates  we  have  discussed  above.  Yet  another difficulty in  selecting the  date  when  the  court  orders execution to issue is that at times the judgment debt is not recovered in  full when  the attached  property is  sold  in execution.  This   necessitates  a   second  application  in execution for  attaching other  properties of  the judgment- debtor and  even the  sale of these properties may not cover the  deficit,   thus  necessitating  yet  another  execution application. They  would lead  to an  anomalous position for the court  would have  to fix  the rate  of exchange for the entire decretal  debt at  the time  of  granting  the  first application for  execution and then, if the rate of exchange has varied  in the  meantime, to  fix a  different  rate  of exchange for  the unrealized  balance of the decretal amount at  the   time  of   granting  the  second  application  for execution,  and   equally  so  with  respect  to  successive applications for  execution. Thus,  with respect to portions of the  same decretal debt different rates of exchange would come to be fixed at different times.      A further  difficulty in selecting the date of granting an execution  application is  that execution  can only issue for a  sum expressed  in Indian  currency. What  is being is executed is the decree and the sum for which execution is to issue  in  a  money  decree  must,  therefore,  be  for  the particular  sum  specified  in  the  decree,  that  is,  the judgment debt.  It cannot  be  for  a  sum  which  would  be determined and  fixed by  the executing court at the time of granting the  execution application, for under o.21 r. 11(2) (g) of the Code of Civil Procedure, 1908, an application for execution has  to state  "the amount  with interest (if any) due upon the decree".      The above difficulties would rule out the taking of the date when  the court  grants an application for execution as the date of

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572 conversion and  would make  inapplicable to  our courts  the rule laid down in the Miliangos case.      As regards  the selection  by the  court of the date of payment as  the proper date of conversion, that was the date taken in  the Schorsch  Meier case;  but as Lord Wilberforce pointed out  (at page  468) in the Miliangos case, this only means the  date when the court authorizes enforcement of the judgment in  terms of sterling. As we have seen, in England, according to  the Practice  Directions  dated  December  18, 1975, the  form of  the judgment  to be entered requires the defendant to  pay the  sterling equivalent  of  the  foreign currency sum  adjudged at the time of payment. This would be the most  logical date  and one  which  does  justice  to  a plaintiff who  has come  to court  to recover a sum of money payable to him in a foreign currency. If the principle to be applied is  that the  plaintiff should  be put  in the  same position in  which he  would have  been  had  the  defendant discharged  his  obligation  on  the  due  date,  then  that principle is  best served  by the  court taking  the date of payment as the date of conversion. In adopting this date we, however, find  ourselves  faced  with  three  practical  and procedural difficulties,  namely, payment of court-fees, the pecuniary limit of the jurisdiction of courts and execution.      So far  as court-fees  are concerned, we have a Central Act, namely,  the Court-fees  Act, 1870 (VII of 1870), which applies, either  with or without amendments, to those States and Union  Territories which  have not repealed and replaced it  by   their  own   legislation.  The   States  and  Union Territories which  have their own legislation on the subject are Andhra  Pradesh, Gujarat,  Himachal Pradesh,  Jammu  and Kashmir,  Karnataka,   Kerala,   Maharashtra,   Pondicherry, Rajasthan, Tamil  Nadu and West Bengal. Under all Court-fees Acts, no plaint can be filed in any court without payment of court fees. The plaintiff, therefore, has to value his claim in the  suit and  pay the court-fees thereon computed in the manner provided  in the  relevant Court-fees  Act. So far as money suits  are concerned,  the court-fees  payable are  ad valorem court-fees according to the amount claimed which may or may  not be  subject to  a ceiling  depending upon  which Court-fees Act  applies. A suit for a sum of money expressed in a foreign currency is also a money suit and the plaintiff in such  a suit will have to pay court-fees according to the amount claimed.  As, however, a court in India cannot, as we have pointed  out  above,  pass  a  decree  simpliciter  for payment of  a sum  in a foreign currency in such a suit, the plaintiff will have to make an alternative 573 claim in  his plaint for the rupee equivalent of the foreign currency sum claimed. He will, therefore, have to pay court- fees on  the amount  of the  rupee  equivalent.  Such  rupee equivalent as at the date of the institution of the suit can only be at the rate of exchange prevailing on that date. If, therefore, a plaintiff were to make the alternative claim on the basis  of the  rupee equivalent  at the time of payment, the value  of the  suit for the purposes of court-fees would be incapable  of computation for it would not be possible to say what  the rate of exchange on that date would be. It may be argued  on the  analogy of  a suit  for accounts  or  for partition or  for  administration  or  for  winding  up  and accounts of  a partnership  that the  plaintiff  can  put  a tentative valuation  in his plaint computed according to the rate of  exchange prevailing  on the date of the institution of the  suit and  give an  undertaking to  pay  the  deficit court-fees if  at the time of payment of the amount decreed,

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the rate  of exchange  has fluctuated  in his favour so that the amount  realized in  rupee equivalent  is more  than the amount mentioned  in the  plaint. There is, however, a basic difference between  a money  suit and a suit for accounts, a partition suit,  an administration  suit  or  a  partnership suit. In  these types  of suits,  a  preliminary  decree  is passed to ascertain the amount due to the plaintiff and when such  amount   is  ascertained,   a  final  decree  for  the ascertained sum  is passed.  In a money suit, however, there can be only one decree. It is, therefore neither permissible in law nor feasible for the plaintiff in a suit in which his claim is for a sum of money in a foreign currency to give an undertaking to  make good  the deficiency in court-fees when he receives  payment. In  fact, a  part or even the whole of the judgment  debt may  not be recovered at all. Even in the other types  of suits  mentioned above,  it is  not when the ascertained amount  is received  by the  plaintiff that  the deficit court-fees  are to  be paid  by him.  They are to be paid when the amount due to the plaintiff is ascertained. In the type  of suits  we are  concerned with in these appeals, the plaintiff  can at the highest give an undertaking to pay the deficit,  if any,  in the court-fees if at the time when the judgment  is given  and the  decree  passed,  the  rupee equivalent is more than at the date of the suit by reason of the fluctuation in the rate of exchange, but it would not be permissible for him to give such an undertaking for any date subsequent to  the date  of the  passing of  the decree.  An additional difficulty would be that it is the court in which a suit  is instituted which has to ensure at the time of the institution of the suit that the proper court-fees have been paid.  The   deficit  court-fees,   therefore,   cannot   be calculated and the balance 574 thereof recovered by the executing court. These difficulties would rule out both the date when the court orders execution to issue  and the date of payment of the decretal debt to be taken as the date of conversion.      These difficulties  do not  arise in England. Under the English law, the Lord Chancellor has power, with the consent of at  least three Judges of the Supreme Court of Judicature and the concurrence of the Treasury, to fix fees to be taken in the  High Court  and the  Court of Appeal (see Halsbury’s Laws of  England, 4th  ed., vol.  10,  para.  908).  In  the exercise of  this power, Supreme Court Fees Orders have been made from  time to time. The order currently in force is the Supreme Court  Fees Order,  1980 (S. I. 1980 No. 821), under which the  fee payable in the case of a writ endorsed with a claim for a liquidated sum not exceeding & 2,000 is & 35 and in any  other case  it is & 40, civil proceedings in England being commenced by issuing a writ. Thus, in England, a fixed court-fee is  payable, the  amount thereof varying dependant only upon  whether it  is an action for a liquidated sum not exceeding &  2,000 or  not. In  England, therefore,  as  the court-fees payable  are not  ad  valorem  court-fees  in  an action to  recover a  sum of  money expressed  in a  foreign currency, it  would be immaterial for the purposes of court- fees whether  the plaintiff  claims in  the alternative  the sterling equivalent  of that  amount as  at the  date of the judgment or  as at  the date  when the  court gives leave to enforce the judgment or as at the date of payment because in any of  these cases, the court-fees payable by the plaintiff will not  vary except  where by reason of the fluctuation in the rate  of exchange  the amount adjudged or the amount for which leave  to enforce  the judgment is given or the amount paid exceeds & 2,000 in a case where less than that has been

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claimed in  the action.  It should  be  noted  that  English practice also  recognizes  the  difficulty  which  would  be encountered in issuing execution for a sum in sterling to be determined  at  the  date  of  payment  or  realization  and accordingly the Practice Directions dated December 18, 1975, require  that   where  a  plaintiff  desires  to  enforce  a judgment, he  must mention  in the application made for that purpose the  sterling equivalent of the foreign currency sum adjudged calculated  at the  rate of  exchange prevailing on the date  nearest or  most nearly  preceding the date of the application for  execution, and  the writ of execution would then issue for such sterling equivalent.      So far as the limit of pecuniary jurisdiction of courts is  concerned,  under  section  15  of  the  Code  of  Civil Procedure, 1908, every 575 suit is  to be  instituted in  the court of the lowest grade competent to  try it.  We have  in India  a large  number of courts of  various grades with different pecuniary limits of jurisdiction. In  money suits,  it is  the amount claimed in the suit  which will determine the particular court in which the suit  is to  be instituted, This determination cannot be done with  reference to  a foreign  currency. It can only be done  with   reference  to   Indian  currency.  This  is  an additional reason  why thy plaintiff must in his plaint give the rupee  equivalent of the foreign currency sum claimed by him in  the suit  by converting it into Indian rupees at the rate of  exchange prevailing  at the date of the institution of the suit.      The difficulty  with respect  to execution  which would arise if the court were to select the date of payment as the date of  conversion is  that  execution  must  issue  for  a specific sum  expressed in  Indian currency  "due  upon  the decree." It  cannot issue  for  a  sum  which  would  become ascertainable only  when realized  or paid  as would  be the case were execution to issue for the rupee equivalent at the time of  payment  in  rupees  of  a  foreign  currency  sum. Further, as  pointed our  earlier, execution  can issue only with respect to the amount due upon the decree.      For the  above reasons,  it is  not possible  for us to accept the  date of  payment or  realization of the decretal debt as the proper date for the rate of conversion.      This then leaves us with only there dates from which to make our  selection, namely, the date when the amount became payable, the  date of the filing of the suit and the date of the judgment,  that is,  the date  of passing the decree. It would be  fairer to  both the  parties for the court to take the latest  of these  dates, namely, the date of passing the decree, that is, the date of the judgment.      The learned  Single Judge  of the Delhi High Court also reached the  same conclusion.  He, however,  did so  relying upon the  Miliangos case under an erroneous belief that when in that  case it was held that the proper date should be the date when  the judgment  becomes enforceable  what was meant was the  date when the judgment was given, that is, when the decree was  passed. The learned Single Judge was in error in so reading  the judgment  of the  House of  Lords. when  the majority in  the Miliangos  case spoke  of the date when the court gives leave to enforce the judgment what they were 576 referring to  was not  the date of the judgment but the date on which  the court  gives leave to execute the judgment. In Halsbury’s Laws  of England  (4th ed, vol. 17, para 401) the word ’execution’ is defined as follow:           "The  word   ’execution’  in   its  widest   sense

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    signifies the  enforcement of  or giving  effect to the      judgments or orders of courts of justice. In a narrower      sense, it  means the  enforcement of those judgments or      orders by  a public  officer under  the writs  of fieri      facias,  possession,   delivery,  sequestration,  fieri      facias de bonis ecclesiasticis, etc." (The emphasis has      been supplied by us.)      This definition  also appeared  in the Third Edition of Halsbury’s Laws  of England  and was  cited with approval by Hewson J. in The Zafiro, John Carllon & Co. Ltd v. Owners of S.S. Zafiro.(1)  The most  usual method  of enforcement of a money judgment  in  England  is  by  writ  of  fieri  facial commonly called  fi.fa. (see Halsbury’s Laws of England, 4th ed., vo,  17, para.  462).  In  certain  cases,  a  writ  of execution to  enforce  a  judgment  or  order  cannot  issue without leave of the court. It is unnecessary to go into the details of  the procedure  relating to  execution in England for what  we have  stated above  is sufficient  to show that what the  majority in  the Miliangos  case meant by the date when the  court gives  leave to  enforce the judgment or the date when  the court  authorizes enforcement of the judgment was the  date when  the court  gives leave  to  execute  the judgment.      Does the  fact that the decree sought to be executed is one passed  in terms  of an award which directs payment of a sum of  money in  a foreign  currency make any difference to the date  of conversion  to  be  selected  by  the  court  ? According to  the Division  Bench of the Delhi High Court it does because,  relying upon  the Jugoslavenska case, it held that in  such a  case the  proper date for conversion of the foreign currency  sum awarded would be the date of the award in as  much as  there was no difference between the relevant provisions of  the English  Arbitration Act, 1950 (14 Geo 6, c.27),  and   our  Arbitration   Act,  1940   (X  of  1940), particularly section 26(1) of the English Act and section 17 of our Act. For reasons which we will presently set out, the Division Bench  of the  Delhi High  Court erred  in reaching this conclusion. 577      We have  set out earlier the facts of the Jugoslavenska case and  have  extracted  the  relevant  passage  from  the judgment of  Lord  Denning  M.R.  To  recapitulate,  in  the Jugoslavenska case,  the plaintiffs  had been  awarded a sum expressed in United States dollars in an arbitration held in London and  had sought  leave of the court under section 26, now section  26(1), of the Arbitration Act, 1950, to enforce that award.  In support  of this application, the plaintiffs had filed  an affidavit  showing the  rate of exchange as at the date  of the  award and the equivalent in pound sterling at that rate of the amount awarded to him and had claimed to enforce the  amount awarded  on that  basis. Two  questions, therefore, fell  for the  court’s determination.  They  were thus put  by Roskill  L.J. in  his judgment in that case (at page 504):           "The first  is whether  an  arbitrator  or  umpire      sitting in  England or Wales can lawfully make an award      in a  currency  other  then  sterling.  The  second  is      whether if such an award can be so lawfully made, it is      enforceable under s. 26.      To understand  the decision  of the  Court of Appeal so far as concerns the first question, we must bear in mind the then prevailing  state of  the law  in England and so far as concerns the  second question  the provisions of the English law relating  to enforcement of awards. At that time the old rule affirmed  by the  House of Lords in the Havana case was

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the law.  Under it an English court could give judgment only in English currency and in an action in England to recover a debt expressed  in a  forcing currency,  such debt had to be converted in  to sterling at the rate of exchange prevailing on the  date when  the debt  was  payable.  So  far  as  the provisions of  English law  relating to  enforcement  of  an award are concerned, the mode would depend whether or not it was a  foreign  award  as  defined  in  section  35  of  the Arbitration Act,  1950, which definition is mutatis mutandis the same  as the  definition of  "foreign  award"  given  in section 2  of our Arbitration (Protocol and Convention) Act, 1937   (VI of  1937). Sub-section  (1) of  section 36 of the English Act provides for enforcement of foreign awards. That section is in the following terms:      "36. Effect of foreign awards.-      (1)  A foreign  awards shall, subject to the provisions           of this  Part  of  this  Act,  be  enforceable  in           England 578           either by  action or  in the  same manner  as  the           award of an arbitrator is enforceable by virtue of           section twenty-six of this Act.      (2)  Any foreign award which would be enforceable under           this Part  of this Act shall be treated as binding           for all purposes on the persons as between whom it           was made,  and may accordingly be relied on by any           of those  persons by  way of  defence, set  off or           otherwise in any legal proceedings in England, and           any  references  in  this  Part  of  this  Act  to           enforcing a  foreign award  shall be  construed as           including references to relying on an award."      Though section 36 is headed ’Effect of foreign awards’, it will  be seen  that sub-section (1) of that section deals with enforcement  of foreign  awards while  only sub-section (2) deals  with the  effect of  foreign awards.  Thus, under section 36  (1) there are two alternative modes provided for enforcing a  foreign award in England, namely, (1) by action at law  on the  award, and  (2) by leave of the court in the same manner as the award of an arbitrator made in England is enforceable under  section 26.  Since, according  to the law then prevailing,  an English  court could only give judgment in sterling  and   required a  debt expressed  in a  foreign currency to  be converted  into English currency at the rate of exchange prevailing on the date when the debt was payable in an  action on a foreign award the plaintiff would have to make his  claim in English currency in respect of the sum of money awarded  to him  in a  foreign currency.  In  such  an action the  debt in  respect of which the plaintiff would be seeking judgment  would be  the sum  of money payable to him under the  award which  had by  virtue of  the award  become payable  to  him  on  the  date  of  the  award.  He  would, therefore, have  to convert the foreign currency sum awarded to him  into  English  currency  at  the  rate  of  exchange prevailing on the date of the award.      Before we  deal with  the second  mode of  enforcing  a foreign  award   provided  in  section  36(1),  it  will  be convenient to reproduce here the provisions of section 26 of the English Arbitration Act which are as follows:      "26. Enforcement of award.-      (1)  An award on an arbitration agreement may by, leave           of the  High Court or a judge thereof, be enforced           in 579           the same manner as a judgment or order to the same           effect, and  where leave is so given, judgment may

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         be entered in terms of the award.      (2)  If-           (a)  the amount  sought to  be recovered  does not                exceed the  current limit  on jurisdiction in                section 40  of the  County Courts  Act, 1959,                and           (b)  a  county   court  so  orders,  it  shall  be                recoverable (by  execution  issued  from  the                county court  or  otherwise)  as  is  payable                under an order of that court and shall not be                enforceable under sub-section (1) above.      (3)  An  application  to  the  High  Court  under  this           section shall  preclude an application to a county           court and  an application  to a county court under           this section  shall preclude an application to the           High Court."      Originally section  26 consisted  only  of  sub-section (1). Subsection  (2) and (3) were inserted in section 26 and the  original  section  renumbered  as  sub-section  (1)  by section 17(2)  of the  Administration of  Justice Act, 1977. The new  sub-sections (2)  and (3)  are immaterial  for  our purpose for  it was  the old  section 26, now section 26(1). which formed  the basis of the decision in the Jugoslavenska case.      Kerr  J.,   from  whose  judgment  the  appeal  in  the Jugoslavenska ease  was carried  to the Court of Appeal, had before deciding  the matter  made enquiries  of the  Central Office of  the High Court as to the practice in dealing with applications  under  section  36(1).  Roskill  L.J.  in  his judgment in the Court of Appeal has referred to this and has thus set out (at page 507) the information which Kerr J. had received:           "He was  told that  the practice  on  applications      under that  section is  that the  sum  awarded  in  the      foreign currency in question is converted into sterling      at the  rate prevailing  at the  date of  the award and      that, in  the absence  of any other objection, an order      is then  made giving leave to enforce the foreign award      in the  same manner  as a  judgment for  that resulting      sterling sum."      (The emphasis has been supplied by us.) 580      The award  in the  Jugoslavenska case was not a foreign award within  the meaning  of section  35 of the English Act for it  was made  in England,  though the  sum awarded there under was  expressed in  a foreign  currency, namely, United States dollars. In English law, an application to enforce an award under  section 26(1)  is only  one  of  the  modes  of enforcing an  award which is not a foreign award. Where such an application is granted, it is not necessary that judgment must be entered in terms of the award. Lord Denning M.R., in the course  of  his  judgment  in  the  Jugoslavenska  case, pointed out  (at page  502) that  in most  cases it would be unnecessary to enter judgment, for once leave was given, the award could  be enforced by the ordinary means of execution, but it  might be  necessary to  enter judgment  in order  to issue a bankruptcy notice and the latter words of section 26 enabled judgment  to be so entered. Roskil L.J. also pointed out (at  page 507)  that under  section 26(1)  there are two different steps which must be taken. First, the obtaining of leave to enforce the award in the same manner as a judgment, and secondly  and independently, when leave is so given, the entering of judgment in the terms of the award.      Section 26(1)  is not  exhaustive of the modes in which an award,  which is  not a  foreign award,  can be enforced.

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Such an  award can also be enforced by bringing an action on it in which case, as pointed out earlier, if the sum awarded were expressed  in a  foreign currency,  the judgment  would have to  be sought in sterling for which purpose the rate of exchange would  be taken as at the date of the award. In the Jugoslavenska case  the court  held that  an  arbitrator  or umpire in  England had  jurisdiction to  make an award for a sum of  money expressed  in a  foreign  currency  when  that particular currency was the appropriate currency in which to express it.  The difficulty  which faced  the court  was the manner of  enforcing such an award by reason of the decision in the  Havana case  under which an English court could give judgment only  in sterling.  This difficulty was resolved by the court  by referring to section 36(1) and holding that it would be  unreasonable that  an award  in a foreign currency made aboard  could  be  enforced  by  an  application  under section 26(1)  while the  same award,  if made  in  England, could not  be so  enforced. It  was for this reason that the court interpreted  the words  "to the same effect" occurring in section 26(1) as meaning "having the same effect" and not as meaning  "in the  same terms",  because, as  Lord Denning M.R. pointed  out, if  it were  to be  so interpreted, there would be some difficulty in applying the section to an award in a  foreign currency  but if the words were interpreted to mean that the judgment 581 or order  must have  "the same effect", it would follow that if the  sum awarded were converted into sterling at the rate of exchange  as at  the date  of the award it would have the same effect  as a  judgment or  order in  an action  on  the award. We may point out that Cairns L.J., however, felt some doubt  whether  the  sum  awarded  must  be  converted  into sterling before  leave to enforce the award was given but he did not  dissent because  both Lord Denning M.R. and Roskill L.J.  considered   that  it   should  be  so  converted.  As emphasized by us earlier, in the Jugoslavenska case the date of the  award was taken as the date of conversion because in an action  on such  an award the due date for payment of the debt would  be the  date of  the award. We have seen that in the Miliangos  case, though  the Jugoslavenska  case was not expressly over-ruled  none of the Law Lords who had occasion to refer  to it  were happy  with what  had been held there; Lord Wilberforce  opining that  there was  no reason why, if desired, the practice should not be adjusted so as to enable conversion to  be made at the date when leave to enforce the award in  sterling is  given; Lord Cross of Chelsea thinking it absurd  that there  should be  one rule  for arbitrations with respect  to foreign  currency debts  and  another  with respect to  actions on  similar  debts;  Lord  Edmund-Davies expressing his view that no basic distinction could be drawn for the  purposes of a conversion date between judgments and awards; and  even Lord  Simon of Glaisdale in his dissenting judgment stating  his belief  that  if  Parliament  were  to reconsider the  sterling judgment  rule and  the breach date rule, the  Jugaslavenska case  would come within the purview of such  reconsecration. In  view of  these observations and the fact  that the  Havana case is no longer the law in view of the decision in the Miliangos case, it is highly doubtful whether today  in England if the matter were carried higher, it would  be decided  in  the  same  way.  In  view  of  the Miliangos case  it cannot be said today that in an action on an award  the foreign currency sum directed to be paid under the award must be converted at the date of the award when it was payable.  It would have to be converted at the date when the court  gives leave to enforce the judgment. On principle

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there can be no difference between an action on an award and a case where instead of filing an action the plaintiff files an application  under section 26(1) for leave to enforce the award. If  in an  action on  the award  the proper  date  of conversion would  be the  date when the court gives leave to enforce the  judgment, where  an application  under  section 26(1) is  filed the proper date of conversion should also be the same, for then alone can the award, when leave is given, "be enforced  in the  same manner  as a judgment or order to the same effect". 582      We find that the Division Bench of the Delhi High Court has not  correctly appreciated  the ratio of the decision in the Jugoslavenska  case nor  the reasoning  upon which  that decision was  based. We also find that the Division Bench of the Delhi  High Court  has committed  an error  in  equating section 26(1) of the English Arbitration Act with section 17 of our  Arbitration Act.  The reason  for this error is that the Division  Bench of  the Delhi  High Court  has proceeded upon a  wrong assumption  that the  procedural scheme of the English  Arbitration   Act  is  the  same  as  that  of  our Arbitration Act.  In this connection, the Division Bench has referred to  section 22  of the English Act, under which the court has  power from  time to  time to  remit  the  matters referred  or   any  of   them  for  reconsideration  of  the arbitrator or  umpire, and section 23(1) of the English Act, under which  the court has power to remove any arbitrator or umpire for misconduct. These sections correspond to sections 16 and  11 our  Act, We fail to see what relevance either of these sections  had to  the question  in  issue.  Before  we proceed further  to discuss this aspect of the case, it will be convenient  to set out section 17 of our Arbitration Act, 1940. That section provides as follows:           "17. Judgment in terms of award.-           Where the  Court sees  no cause to remit the award      or any  of the  matters  referred  to  arbitration  for      reconsideration or  to set  aside the  award, the Court      shall, after  the time for making an application to set      aside the award has expired, or such application having      been made,  after refusing  it,  proceed  to  pronounce      judgment according  to the award, and upon the judgment      so pronounced a decree shall follow and no appeal shall      lie from such decree except on the ground that it is in      excess of,  or not  otherwise in  accordance with,  the      award."      What seems  to have impressed the Division Bench of the Delhi High  Court is  the fact  that in England the court is not bound  to grant leave to enforce the award but can, when such an  application is  made, on  objection being raised by the respondent,  either remit the award or set it aside, and that the  same can  also be done by a court in India when an award has been filed in court. We find that in adopting this line of approach the Division Bench has overlooked the basic differences between  the English procedure and the procedure under our  Act. The  provisions for enforcing an award under the 583 English Act  and under  our Act  are  different.  Under  the English Act,  if it  is sought to enforce an award by making an application  under section 26(1), such application has to be made  under O. 73 r. 3 of the Rules of the Supreme Court, 1965, by  an originating  summons. There  is  no  time-limit provided for taking out such a summons. There is, however, a time-limit provided  for making  an application to the court to remit  an award under section 22 or to set aside an award

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under section 23(2), under O. 73 r. 5(1) of the Rules of the Supreme Court,  1965, the period of limitation being 21 days after the  award has been made and published to the parties. An application  for leave to enforce the award under section 26(1) can,  however, be  made even  before the expiry of the time for  moving to  set aside  the award.  In such  a case, however, it can be resisted upon the ground that a motion to set aside  the award  to be  made. It is opined in Russel on Arbitration, 20th  ed. page  375, that  in such  a case, the party resisting  the application  would be required to show, upon  affidavit,  a  substantial  case  for  contesting  the validity of  the award, as well as to swear to his intention of doing so. Under section 17 of our Act, an application for a judgment according to the award can only be made after the time for  making an  application to  set aside the award has expired, or if such application has been made, only after it is refused. Under the English Act, the court is not bound to grant leave  to enforce,  the award.  In doubtful  cases, it would ordinarily  leave the  party to  pursue his  remedy by filing an action on the award. The court may also give leave to enforce the award only upon terms. An instance of this is the case  of E.D.  & F, Man v. Societe Annonyme Triaolitaine Des Usines De Raffinage De Sucre(1) where the applicant, who had throughout  admitted that  he owed  a certain  sum on  a cross-claim,  which   was  not   a  subject-matter   of  the reference, was  awarded a larger sum which made no reference to the  cross-claim, was  given leave  to enforce  the whole award as a judgment on an undertaking given by him to accept the difference  between the  two sums in satisfaction of the award and  the extinction  of the  cross-claim. Further,  in answer to  an application  for leave under section 26(1) the respondent may  set up  the defence  that  the  award  is  a nullity, or  is wholly  or in part ultra vires, or is bad on the face  of it.  If, however, his objection to the award is that arbitrator  has misconducted himself, or that the award was improperly  procured, his proper course would be to move to set the award aside, and, if necessary, to have the 584 application to  enforce the  award adjourned in the meantime (see Halsbury’s Laws of England, 4th ed., vol. 2, para 630). None of  these contentions  are available  to  a  respondent where an  application for  a judgment according to the award is made  under section 17 of our Arbitration Act, 1940. They can only  be raised by way of an application to set aside or remit the  award after the award has been filed in court and notice thereof issued to the parties under section 14 of the Arbitration Act,  1940. The period of limitation for such an application  is   prescribed  by   Article  119(b)   of  the Limitation Act,  1963 (XXXVI  of 1963).  If  the  period  of limitation expires  without any such application being made, the court,  on application made to it for that purpose, must proceed to  "pronounce  judgment  according  to  the  award" whereupon a  decree has  to  follow.  Section  17  expressly provides that in such a case "the Court shall ... proceed to pronounce judgment  according to  the  award  and  upon  the judgment so  pronounced a  decree shall  follow".  The  only ground upon  which such a decree can be challenged in appeal is that  "it is in excess of, or not otherwise in accordance with the  award". The  court before which an application for judgment in  terms of  the award is made, has, therefore, no discretion in the matter except possibly in a case where the award is  on the face of it patently illegal or violative of a provision  of the  law. Under section 26(1) of the English Act, when  leave is  given to  enforce the  award, it is not necessary that  judgment should  be entered  in terms of the

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award for  the purpose  of enforcing the award by execution. Under our  Arbitration Act, before an award can be enforced, a judgment  has to  be pronounced  according to the award, a decree has  thereupon to  follow and it is that decree which alone can  be enforced  by an application for execution made under O. 21 r. 11 of the Code of Civil Procedure, 1908.      It is  pertinent to  note that  the judgment, which the court pronounces  under section  17, is  to be "according to the award".  Where the  award directs a certain sum of money to be  paid and  the court,  in a  case  where  it  has  not modified or corrected the award under section 15, pronounces judgment for a different sum, the judgment cannot be said to be "according to the award". In the same way, where an award directs payment  of a sum of money in a foreign currency and the court  while pronouncing judgment provides for its rupee equivalent at the rate of exchange prevailing on the date of the award,  the  court  will  not  be  pronouncing  judgment "according to  the award"  if in  the meantime  the rate  of exchange has varied, because at the date of the judgment the foreign currency equivalent of the 585 amount in rupees provided in the judgment would be different from the  foreign currency  sum directed  to be  paid by the award. The  judgment, therefore,  can only  be  said  to  be "according to  the award" if it directs payment of the rupee equivalent at the rate of exchange prevailing on the date of pronouncing the  judgment which date is the same as the date of  the  passing  of  the  decree.  For  this  purpose,  the applicant must  satisfy the  court, either  on affidavit  or otherwise, as to the rate of exchange prevailing on the date of the  judgment or  on the  date  nearest  or  most  nearly preceding the date of the judgment.      Under section 17 of our Arbitration Act, judgment is to be pronounced "according to the award". The marginal note to the section  speaks of  "judgment in  terms of award". Under section 26(1)  of the  English Act,  once leave is given, an award becomes  enforceable in  the same manner as a judgment or order  "to the  same effect".  The  words  "to  the  same effect" were  interpreted in  the jugoslavenska  case not as meaning "in  the same terms" but as meaning having "the same effect", that is, as having the same effect as a judgment or order given  in an  action brought  on the  award.  Granting leave under section 26(1) of the English Act and pronouncing judgment according  to the  award and passing a decree under section 17  of our Act, therefore, mean different things and have different  results. A  judgment according  to the award under section  17 our  Act will  speak only from the date of the judgment which will not be the case under section 26(1), for while  in the first case what will be enforceable by the processes of  law, namely,  execution, will  be  the  decree passed in  terms of the award, in the second case it will be the award  itself, unless  the  applicant  desires  to  have judgment entered  in terms  of the  award which  he  is  not required to do as pointed out above.      On behalf of ONGC reliance was placed upon the decision of this  Court in  Satish Kumar and others v. Surinder Kumar and others.(1)  On the  strength of  this  decision  it  was submitted that  an award  was not a mere waste paper until a decree in  terms of  the award  has been passed but an award created rights  and liabilities  and, therefore,  since  the award in the instant case provided that a certain sum should be paid  in a foreign currency to Forasol, it spoke from the date when  it  was  made  and  published  and  the  rate  of conversion could,  therefore, only  be the  date of the said award. We  are unable  to see  how the above decision in any

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way bears out this proposition or lends support 586 to it  In that  case, an  award,  made  on  a  reference  to arbitration by  the parties  without the intervention of the court,  was   filed  in   court  under  section  14  of  the Arbitration Act,  1940. In an application made under section 30 to  set aside  the award, one of the objections taken was that  the   award  required   registration  as  it  affected immovable property  worth more  than Rs.100  in value and as the award  was not  registered, it  was  not  admissible  in evidence. This contention was upheld. It was in this context that this  Court observed  (at page  249) that "an award has some legal force and is not a mere waste paper. If the award in question  is not  a mere  waste paper  but has some legal effect it plainly purports to or affects property within the meaning of  s. 17  (1) (b)  of the  Registration  Act".  The question before  the Court in that case was whether a decree in terms  of an  unregistered award  could be  passed by the court in  a case where under the Registration Act, 1908 (XVI of 1908), the registration of the award was compulsory. This question is  very different from the one which we are called upon to decide.      It was  also submitted on behalf of ONGC that an award, unless it is set aside by the court, is a final adjudication of the  rights and  liabilities of the parties in respect of the matters  referred to arbitration and, therefore, Forasol could not claim to convert the French Franc part of the said award into  Indian rupees at the rate of exchange prevailing on the  date of the decree but can only do so at the rate of exchange prevailing  on the  date of the award. We find this submission wholly  untenable. Undoubtedly,  the said  award, not having been set aside or modified by the court, is final and binding  on the  parties and,  in respect of the matters referred to  arbitration, Forasol  cannot claim  any  amount from ONGC other than that awarded by the Umpire. Forasol is, however, not  making any such claim. It is claiming only the sum in French Francs which it has become entitled to receive from ONGC  under the  said award.  All that Forasol wants is that ONGC should pay to it the sum of FF. 5,89,727.51 due to it under  the said  award or  its rupee equivalent as at the date when  the court  pronounced judgment  according to  the said award and passed the decree in terms thereof. This is a very different  thing from  making a  claim de hors the said award. The  claim made  by Forasol is actually one under the said award for if the sum awarded to it in French Francs was not paid  or could  not be  paid by  ONGC, Forasol  would be entitled to  receive its  rupee equivalent.  On  the  decree being passed  in terms  of the  said award  the  said  award became  merged   in  the   said  decree   and  the   sum  of FF,5,89,727.51 payable to Forasol under 587 the said  award became  a judgment  debt payable  to Forasol under the said decree and, as pointed out above, at the time of passing the decree the court would have to direct payment of the  rupee equivalent  of this foreign currency debt only at the  rate of  exchange prevailing  on  the  date  of  the decree.      For the  reasons set  out above,  we are of the opinion that the rule in the jugoslavenska case cannot be applied to this country  and the  fact that  a decree is in terms of an award for  a sum  of money  expressed in  a foreign currency makes no difference to the date to be taken by the court for converting into  Indian currency  the foreign  currency  sum directed to  be paid  under the  award and  that  such  date should also be the date of the decree.

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    It would  be convenient if we now set out the practice, which according  to us,  ought to  be followed  in suits  in which a  sum of  money expressed  in a  foreign currency can legitimately be  claimed by the plaintiff and decreed by the court. It  is unnecessary  for us to categorize the cases in which such  a claim  can be made and decreed. They have been sufficiently indicated  in the English decisions referred to by us above. Such instances can, however, never be exhausted because  the  law  cannot  afford  to  be  static  but  must constantly develop  and progress  as the society to which it applies, changes  its  complexion  and  old  ideologies  and concepts are  discarded and  replaced by  new. Suffice it to say that  the case with which we are concerned was one which fell in  this category.  In such  a suit, the plaintiff, who has not received the amount due to him in a foreign currency and, therefore,  desires to seek the assistance of the court to recover  that amount, has two courses open to him. He can either claim  the amount due to him in Indian currency or in the foreign  currency in which it was payable. If he chooses the first  alternative, he  can only  sue for that amount as converted into  Indian rupees  and his  prayer in the plaint can only  be for a sum in Indian currency. For this purpose, the plaintiff  would have  to convert  the foreign  currency amount due to him into Indian rupees. He can do so either at the rate  of exchange prevailing on the date when the amount became payable  for he was entitled to receive the amount on that date  or, at  his  option,  at  the  rate  of  exchange prevailing on  the date  of the  filing of  the suit because that is  the date  on which  he is seeking the assistance of the court  for recovering  the amount  due to him. In either event, the  valuation of the suit for the purposes of court- fees and the pecuniary limit of the jurisdiction 588 of the  court will  be the amount in Indian currency claimed in the  suit. The  plaintiff may, however, choose the second course open  to him and claim in foreign currency the amount due to  him. In  such a  suit, the  proper  prayer  for  the plaintiff to  make in  his plaint would be for a decree that the defendant do pay to him the foreign currency sum claimed in the  plaint subject  to the  permission of  the concerned authorities under the Foreign Exchange Regulation Act, 1973, being granted  and that in the event of the foreign exchange authorities not  granting the  requisite permission  or  the defendant not  wanting to  make payment  in foreign currency even  though   such  permission  has  been  granted  or  the defendant not  making payment  in  foreign  currency  or  in Indian rupees,  whether such  permission has been granted or not, the  defendant  do  pay  to  the  plaintiff  the  rupee equivalent of  the foreign  currency sum claimed at the rate of exchange  prevailing on the date of the judgment. For the purposes  of   court-fees  and  jurisdiction  the  plaintiff should, however,  value his  claim in the suit by converting the foreign  currency sum  claimed by him into Indian rupees at the rate of exchange prevailing on the date of the filing of the  suit or  the date  nearest or  most nearly preceding such date,  stating in his plaint what such rate of exchange is. He should further give an undertaking in the plaint that he would make good the deficiency in the court-fees, if any, if at the date of the judgment, at the rate of exchange then prevailing, the rupee equivalent of the foreign currency sum decreed is  higher than that mentioned in the plaint for the purposes of  court-fees and  jurisdiction. At the hearing of such a  suit, before  passing the  decree, the  court should call upon  the plaintiff  to  prove  the  rate  of  exchange prevailing on  the date  of the  judgment  or  on  the  date

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nearest or  most nearly  preceding the date of the judgment. If necessary, after delivering judgment on all other issues, the court  may stand  over the  rest of the judgment and the passing of  the decree  and adjourn the matter to enable the plaintiff to  prove such  rate of exchange. The decree to be passed by the court should be one which orders the defendant to pay to the plaintiff the foreign currency sum adjudged by the  court  subject  to  the  requisite  permission  of  the concerned authorities  under the Foreign Exchange Regulation Act, 1973,  being granted,  and in  the event of the Foreign Exchange authorities  not granting  the requisite permission or the  defendant not  wanting to  make payment  in  foreign currency even though such permission has been granted or the defendant not  making payment  in  foreign  currency  or  in Indian rupees,  whether such  permission has been granted or not, the  equivalent of  such foreign currency sum converted into 589 Indian rupees  at the  rate of  exchange proved  before  the court as  aforesaid.  In  the  event  of  the  decree  being challenged in appeal or other proceedings and such appeal or other proceedings  being decided  in whole  or  in  part  in favour of  the plaintiff,  the appellate  court or the court hearing the application in the other proceedings challenging the decree  should follow  the same  procedure as  the trial court for  the purpose  of ascertaining the rate of exchange prevailing on  the date  of its  appellate decree  or of its order on  such application  or on  the date  nearest or most nearly preceding  the date  of such decree or order. If such rate of  exchange is  different from  the rate in the decree which  has  been  challenged,  the  court  should  make  the necessary modification  with respect to the rate of exchange by its  appellate decree  or final order. In all such cases, execution can  only issue for the rupee equivalent specified in the  decree, appellate decree or final order, as the case may be.  These questions,  of course,  would  not  arise  if pending appeal or other proceedings adopted by the defendant the  decree  has  been  executed  or  the  money  thereunder received by the plaintiff.      Turning now  to arbitrations, on principle there can be and should  be  no  difference  between  an  award  made  by arbitrators or  an umpire  and a  decree of  a court. In the type of  cases we are concerned with here just as the courts have power  to make a decree for a sum of money expressed in a foreign currency subject to the limitations and conditions we have  set out  above, the  arbitrators or umpire have the power to  make an  award for  a sum  of money expressed in a foreign currency. The arbitrators or umpire should, however, provide in  the award  for the rate of exchange at which the sum awarded in a foreign currency should be converted in the events mentioned  above. This may be done by the arbitrators or umpire  taking either  the rate of exchange prevailing on the date  of the  award or  the date  nearest or most nearly preceding the  date of  the award  or by  directing that the rate of  exchange at which conversion is to be made would be the date when the court pronounces judgment according to the award and  passes the  decree in  terms thereof  or the date nearest or most nearly preceding the date of the judgment as the court  may determine.  If the arbitrators or umpire omit to provide  for the  rate of  conversion, this  would not by itself be  sufficient to invalidate the award. The court may either remit  the award  under section 16 of the arbitration Act, 1940,  for the purpose of fixing the date of conversion or may  do so  itself taking  the date  of conversion as the date of  its judgment  or the  date nearest  or most  nearly

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preceding it, 590 following the  procedure outlined  above for  the purpose of proof of  the rate  of exchange  prevailing on such date. If however, the  person liable  under such  an award desires to make payment  of the  sum in foreign currency awarded by the arbitrators or umpire without the award being made a rule of the court,  he would  be at liberty to do so after obtaining the requisite  permission of the concerned authorities under the Foreign Exchange Regulation Act, 1973.      In the  case of  the said  award which had led to these appeals before  us, the party entitled to receive the money- Forasol-was a  foreign party.  Under the  said contract, the currency of  account was  a foreign  currency and so was the currency of  payment except  for a  portion thereof. Forasol was, therefore, entitled, on payment not being made to it by ONGC, to  receive in  French Francs the amounts which became payable to  it in  that currency. The Umpire was, therefore, justified in  providing that  the amounts  payable under the said award  to Forasol  in French  Francs should  be paid in French currency.  The Umpire  has, however, neither provided that such  payment would be subject to the permission of the foreign exchange  authorities being  obtained nor  specified the conversion rate to be applied in the eventualities which we have  set out  above. That,  however, does  not make  any difference because  neither party  has objected  to the said award on  this ground.  On the  contrary, both  parties have accepted the  said  award  as  binding  and  conclusive.  As mentioned above,  this omission  on the  part of  the Umpire could have  been corrected  by the  Delhi High Court when it came to  pronounce judgment  according to the said award and pass the  said decree in terms thereof. The decree passed in terms of  the said  award, however,  does not specify either the rupee  equivalent of the amount in French Francs payable to Forasol  or the  rate of exchange at which the conversion of such  amount into  Indian rupees  should be made. To that extent, the  decree passed in terms of the said award by the Delhi High  Court was  not a proper decree. Both the parties have,  however,  accepted  the  said  decree  and  have  not challenged it  on this  ground in  any proceedings.  In  any event, the  aforesaid mistake  in the  said decree  was  one which could  have been  got corrected  by an application for review or  by an  application under  section 152  or, in any event under  section 151,  of the  Code of  Civil Procedure, 1908. The  decree has  now become final and binding upon the parties. Both  the parties have accepted the said decree and the said  decree cannot, therefore, be said to be invalid on the ground of the above omission to specify either the rupee equivalent of the French Franc 591 portion of  the said  award or the rate of exchange at which such French Franc portion was to be converted into its rupee equivalent.      For the reasons set out above, we hold that the learned Single Judge rightly took the date of the decree as the date of  conversion.   In  his   order  on   the  said  execution application he  has, however,  given a  direction that  ONGC could satisfy  the judgment debt by making payment in French Francs or if they so preferred, by paying the equivalent sum in rupees  at the rate of exchange prevailing on the date of the decree. He was in error in not qualifying this direction by making the option given to ONGC to make payment in French Francs  subject   to  the   permission  of   the   concerned authorities under the Foreign Exchange Regulation Act, 1973. To this extent, the order passed by the learned Single Judge

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requires to be modified.      Turning now  to the appeal filed by ONGC, it was stated in the  Special Leave Petition filed by ONGC that it had two claims against  Forasol, the  first with respect to what was termed as  "tax differential" and the second with respect to interest on  the amounts  payable by  Forasol to  ONGC. Both these claims  were negatived by the learned Single Judge. It was expressly  stated in  paragraph 19  of the Special Leave Petition of  ONGC that  except for the aforesaid two claims, the judgment  and order  of the  Division Bench of the Delhi High Court should be affirmed.      ONGC’s claim  for tax differential was based on Article IV-1.2 of  the said  contract under which Forasol was to pay income-tax, surcharge  on income  tax and  all other  taxes, which  might  be  assessed  and  levied  by  the  income-tax authorities in India on the income of Forasol under the said contract as  well as  on the  income of  Forasol’s personnel from the  work performed  by them  under the  said contract. Under the  proviso to the said Article, if subsequent to the date of  the said  contract, the  tax rates  in  India  were changed so  as to  be higher than what they were at the date of the  signing of  the said  contract, ONGC  was to pay the difference to  Forasol and  if the  tax rates  became lower, Forasol was  to pay the difference to ONGC. This proviso was not to  be applicable  in respect  of the  taxes payable  by Forasol on  the income  of its personnel. The learned Single Judge has  pointed out  in his  judgment that  the claim  in respect of tax differential did not survive in as much as by the said  award the amounts paid by ONGC as tax on behalf of Forasol were  adjusted and  given credit  for. ONGC  did not challenge this finding in the appeal filed by it 592 in the  Delhi High  Court. None  the  less  ONGC  sought  to reagitate this  point in  its Special Leave Petition. At the hearing of this appeal, learned Counsel for ONGC stated that he was  not pressing  this point.  In the written submission filed on  behalf of  ONGC after  the hearing  of both  these appeals was  concluded, ONGC has, however, once again sought to raise  this point. The point not having been urged in the intra-court appeal  in the  Delhi High Court and also having been given  up at  the hearing  of these appeals before this Court, ONGC cannot be permitted subsequently to agitate this point in the written submissions filed on its behalf. In any event, in our opinion, the learned Single Judge was right in rejecting this claim of ONGC.      So far  as ONGC’s  claim for  interest is concerned, it has been  negatived both by the learned Single Judge and the Division Bench of the Delhi High Court. We find no substance in this  claim. The  relevant provision  of the  said  award which deals with payment of interest is as follows:           "Under the  contract there is no right to interest      to either  party except on French Francs. If the amount      paid by  ONGC to  the credit  of Forasol  in regard  to      Income Tax  and the  several  items  of  allowance  and      disallowance under  this award are worked out and it is      found that there is an amount payable to ONGC in French      Francs that  would carry interest, but if the amount is      in rupees  then no  interest could be allowed until the      date of the award." The amounts  on which  interest  is  claimed  by  ONGC  were payable by  Forasol in  rupees and  not  in  French  Francs. Therefore, by  the express terms of the said award, there is no right  in ONGC to claim any interest on these amounts and this claim for interest was rightly negatived.      In the  result, we  allow Civil  Appeal No. 628 of 1981

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filed by  Forasol and  set aside  the order  passed  by  the Division Bench  of the  Delhi High Court in the appeal filed by the oil and Natural Gas Commission, namely, E.F.A. (O.S.) 5 of  1977 and  we restore  and confirm the order passed and directions given  by the  learned Single  Judge of the Delhi High Court  in the  Execution Application  filed by Forasol, namely, Execution  No. 77  of 1976,  with this  modification that if  the Oil  and Natural Gas Commission wants to pay in French 593 Francs the  amount due  by it under the said decree, it will be at  liberty  to  do  so  after  obtaining  the  requisite permission of  the concerned  authorities under  the Foreign Exchange Regulation Act, 1973.      We dismiss  Civil Appeal  No. 629  of 1981 filed by the Oil and Natural Gas Commission.      The Oil  and Natural Gas Commission will pay to Forasol the costs  of both  the Appeals in this Court as also of the Appeal E.F.A. (O.S.) 5 of 1977 in the Delhi High Court. H.S.K.   CA No. 628/81 allowed and CA No. 629/81 dismissed. 594