REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2175 OF 2020  @ SPECIAL LEAVE PETITION (CIVIL) NO.8123 OF 2015

BANK OF BARODA                              …PETITIONER(S)

Versus

KOTAK MAHINDRA BANK LTD.                …RESPONDENT(S)

J U D G M E N T

Deepak Gupta, J.

Leave granted.

2. “What is the limitation for filing an application for execution

of a foreign decree of a reciprocating country in India?”   is the

short but  interesting question which arises for decision in this

case.

3. Vysya  Bank,  which is the  predecessor of the respondent

Kotak Mahindra Bank Ltd., issued a letter of credit for US

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$1,794,258 on behalf of its customer M/s. Aditya Steel Industries

Limited in favour of M/s. Granada Worldwide Investment

Company, London.   The appellant Bank of Baroda was the

confirming bank  to the  said letter  of  credit.  The  Vysya  Bank

issued instructions to the  London branch  of the  appellant  on

12.10.1992 to honour the letter of credit.   Acting on this

instruction the London branch of  the appellant discounted the

letter of credit for a sum of US $ 1,742,376.41 and payment of

this  amount was made to M/s Granada Worldwide  Investment

Company on 13.10.1992.   

4. The appellant Bank of Baroda filed a suit against the Vysya

Bank for recovery of its dues on 19.04.1993 in London.  This suit

was decreed by the High Court of Justice, Queens Bench,

Divisional Commercial Court of London (hereinafter referred to as

the ‘London Court’) on 20.02.1995 and a decree for US

$1,267,909.26 along with interest thereon was passed in favour

of the appellant bank and against Vysya Bank.   The decree was

not challenged and became final.   

5. It appears that some talks went on between the two banks

with regard  to the  satisfaction of the  decree.  On 28.08.1995,

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Vysya Bank placed an inter­bank deposit of US $ 1,400,000 with

the main branch of the Bank of Baroda on rollover basis with a

request that the decree passed by the London Court be not

executed.  However, later in 2003 ING Vysya Bank, filed a petition

before the Debt Recovery Tribunal (DRT) for recovery of US

$1,400,000.  Those proceedings are being contested by the Bank

of Baroda and it appears that the proceedings before the DRT are

still pending and we make it clear that anything said by us in this

appeal will not affect those proceedings, since we are only dealing

with the issue of  limitation for filing an execution petition of a

decree passed by a foreign court of a reciprocating country.   

6. On 05.08.2009, the appellant bank filed an execution

petition i.e. almost 14 years after the decree was passed by the

London Court for execution of the same in terms of Section 44A

read with Order 21 Rule 3 of the Code of Civil Procedure, 1908

(CPC) for recovery of Rs.16,43,88,187.86.  This execution petition

was contested mainly on the ground that the same had not been

filed within the period of limitation. On 20.07.2013 the Additional

City Civil  & Session Judge,  Bangalore dismissed the execution

petition as time barred holding that Article 136 of the Limitation

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Act, 1963 (for short ‘the Act’) applies and the execution petition

should have been filed within 12 years of the decree being passed

by the London Court.   Aggrieved, the bank approached the High

Court which vide judgment dated 13.11.2014 upheld the view of

the trial court.   

7. Sh. K. K. Venugopal, learned senior counsel appearing for

the appellant urged that the Act does not prescribe any period of

limitation for execution of a foreign decree passed in a

reciprocating country.   He submits that in such eventuality

principles of delay and laches as applicable to writ proceedings

may apply and, therefore, he has relied upon a long list of dates

to show that the Bank of Baroda was pursuing the matter and

was trying its best to get the matter settled with  Vysya Bank and

urges that there  is no delay  in  filing the petition.  His second

submission is that since no limitation is provided under the Act,

the cause of action to file an execution petition arises only when a

petition is filed under Section 44A of the CPC which provides that

a decree passed by a court in a reciprocating country should be

treated as an Indian decree and, therefore, the limitation for 12

years provided under Article 136 of the Act applies only from that

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date because that is the date when the cause of action arises and

the decree is treated to be an Indian decree.   

8. On the other hand, Mr. V.V.S. Rao, learned senior counsel

appearing for the respondent urged that the law of limitation of

England would apply in this case. It is undisputed that the

limitation period as per English law is 6 years for execution of a

decree, and hence the respondent’s submission is that the decree

having been passed on 20.02.1995, no petition for execution of

that decree could be filed after 20.02.2001. The alternative

argument  of learned senior  counsel for the  respondent is that

even if the Indian law of limitation were to apply, the limitation

period for execution of a foreign decree would be determined as

per Article 136 of the Act.   Section 44A of the CPC clearly

provides that a decree passed in a reciprocating country should

be treated as an Indian decree and, therefore, the same must be

enforced within 12 years from the date of passing of the decree as

provided by Article 136 of the Act.   

9. To appreciate the rival contentions of the parties, it would be

necessary to refer to  Section  44A of the  CPC which reads  as

follows:

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“44A.  Execution of decrees passed by Courts in reciprocating territory.– (1) Where a certified copy of a decree of any of the superior Courts of any reciprocating territory  has  been filed in  a  District Court,  the decree may be executed  in as  if it  had been passed by the District Court.

(2) Together with the certified copy of the  decree shall be filed a certificate from such superior court stating the extent, if  any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction or adjustment.

(3)  The provisions of  section 47 shall  as  from the filing of the certified copy of the decree apply to the proceedings of  a District  Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the  satisfaction  of the  Court that the  decree falls within any of the exceptions specified in clauses (a) to (f) of section 13.

Explanation 1.­ "Reciprocating territory" means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and “superior Courts”, with reference to any such territory, means such Courts as may be specified in the said notification.

Explanation 2.­ "Decree" with reference to a superior Court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty, but shall  in no case include an arbitration award, even if such an award is enforceable as a decree or judgment.”

10. At the outset, we may note that the aforesaid section was

inserted  in the CPC in the year 1937.   Prior to that,  a decree

passed by any Court in a foreign country could not be executed in

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India and only a suit could be filed on the basis of the judgment

passed by a foreign court.   Section 44A brought about a change

in law in respect of reciprocating countries which agreed to

respect the judgments and decrees passed in each other’s courts.

From a bare reading of Section 44A CPC it is crystal clear  that it

applies only to money decrees and not to other decrees.  

11. Considering the rival arguments before us, the following

issues arise for consideration:

(i) Does Section 44A merely provide for manner of

execution of foreign decrees or does it also indicate the

period of limitation for filing execution proceedings for

the same?   

(ii) What  is the period of limitation  for  executing a decree

passed by a foreign court (from a reciprocating country)

in India?

(iii) From which date the period of limitation will run in

relation to a foreign  decree (passed in a reciprocating

country) sought to be executed in India?

Question No. 1

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12. A careful analysis of Section 44A hereinabove shows that a

decree passed by any superior court of a reciprocating territory

can be executed in India as if it had been passed by the District

Court  before  whom  it is filed.  Sub­section  (2)  of  Section 44A

casts an obligation on the person filing such application to file a

certified copy of the decree.   Such person must also file a

certificate from the superior court which passed the decree

stating the extent, if any, to which the decree has been satisfied

or adjusted.   This certificate shall be conclusive proof of the

extent of such satisfaction/adjustment.  Sub­section (3) provides

that  from the date of filing of  certified copy of the decree, the

provisions of Section 47 of CPC shall apply to such proceedings.

The District Court can refuse to execute any such decree if it falls

within exceptions (a) to (f) of Section 13.   The first Explanation

provides the definition of reciprocating territory and superior

courts.  Explanation 2 is important which provides that a decree

must be a decree under which a sum of money is payable

excluding  certain sums such as those payable  as  taxes, fines,

penalties etc. and also excludes arbitration awards by the foreign

courts.   

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13. At the outset, we may note that we are not at all in

agreement with the submission of Shri K.K. Venugopal that no

limitation is applicable.   These are not writ proceedings but

execution proceedings.   The Act is a complete code in itself and

Section 3 clearly sets out that subject to the provisions contained

in Section 4 to Section 24 of the Act, every suit instituted, appeal

preferred, and application made after the prescribed period shall

be dismissed even if limitation has not been set up as a defence.

The word ‘application’ used is wide enough to include an

application filed for execution of a decree, even a foreign decree.

Therefore, the principles of delay and laches which may be

applicable to writ proceedings cannot be applied to civil

proceedings and are not at all attracted in proceedings filed under

the CPC which, in our opinion, must be filed within the

prescribed period of limitation.   

14. The main argument of Shri K.K. Venugopal is that limitation

will  start running only  after the  petition under Section 44A  is

filed.  According  to him,  the cause of  action  for  executing the

decree  in India arises only  after the application under Section

44A is filed.  This view has also been taken by a Full Bench of the

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Madras High Court in the case of  Sheik Ali  vs.  Sheik

Mohamed1.   This view is however contrary to the view taken by

the Punjab & Haryana High Court in Lakhpat Rai Sharma vs.

Atma Singh2.   

15. We have carefully considered the matter and at the outset

we may note that there is no concept of cause of action in so far

as an execution  petition is concerned.   Cause of action is a

concept relating to civil suits and not to execution petitions.

Cause of action is nothing but a bundle of facts which gives rise

to a legal right enabling the plaintiff to file a suit.   On the other

hand, a decree is a determination already made by a court on the

basis of  a reasoned judgment.  In case of a decree  it  becomes

enforceable the day it is passed.  Therefore, we are clearly of the

view that filing of an application under Section 44A will not create

a fresh period for enforcing the decree.

16. We clarify that  for the purpose of this  judgment we have

used the expressions, “cause country” which will mean the

country in which the decree was issued (in this case England),

1 AIR 1967 Mad 45 2 AIR (58) 1971 P&H 476

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and “forum country” which would mean the country in which the

decree is sought to be executed (in this case India).

17. If we accept the view urged by Shri K.K. Venugopal, that the

date from which the limitation will be considered, will be the date

of filing of certified copy of the decree it would lead to ludicrous

results.  Taking the example of the present case, the limitation to

execute a decree in United Kingdom is 6 years.  However, in India

it is 12 years.  The decree becomes enforceable on the date it was

passed and, therefore, if the law of the cause country is to apply,

the limitation would be 6 years and if the law of  forum country

were to apply, it would be 12 years.  If the view urged is accepted

then the decree holder can keep silent for 100 years and,

thereafter,  file a certified copy of the decree and the certificate

and then claim that the  decree can be executed.  That  would

make a mockery of the legal process not only of the cause country

but also of the forum country.   The clock of limitation cannot be

kept in abeyance for 100 years at the choice of the decree holder.

We, therefore, reject this contention.

18. The main argument raised on behalf of the appellant is that

sub­section (1) of Section 44A is a deeming provision which

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provides that the decree shall be executed as if it had been

passed by an Indian court.   It is urged that this deeming

provision should be given its full meaning and when the statute

directs an imaginary state of affairs to  be taken  as real, one

should imagine also as real the consequences and incidents

which flow from  the same.  Reference  has  been  made to the

judgment in  East End Dwellings Co. Ltd.  vs.  Finsbury

Borough Council3 wherein it was held as follows:

"…If  one is  bidden to treat an imaginary  state  of affairs as real,  one must surely,  unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It  does  not say that,  having  done so,  one must  cause  or  permit  one’s imagination to  boggle when  it  comes to  the  inevitable  corollaries  of that state of affairs."

The aforesaid observations by the House of Lords have been

approved  by this  Court in  Income Tax Commissioner  vs.  S.

Teja Singh4.   The Madras High Court5  and the Punjab and

Haryana High Court6 have taken the view that the foreign decree

3 1951 (2) All E.R. 587 4 AIR 1959 SC 352 5 In Uthamram vs. K. M. Abdul Kasim Co., AIR 1964 Mad 221 6 In Lakhpat Rai Sharma vs. Atma Singh, AIR (58) 1971 P&H 476

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has to be executed in India as if it had been passed by an Indian

court and the legal fiction must be extended to its logical end.

Therefore, the foreign decree must be treated as an Indian decree

as on the date it was passed.  However, the Punjab and Haryana

High Court held in Lakhpat Rai Sharma (supra) that if no step

for execution of the decree and no step­in­aid for such an

execution is taken in an Indian court on or before the limitation

prescribed, then the execution petition has to be dismissed on the

ground that it is time barred.  It rejected the contention that the

application for certificate of non­satisfaction given to the foreign

court should be treated to be a step­in­aid and excluded while

calculating the period of limitation.

19. Does Section 44A create a fresh period of limitation by

extension of the deeming provision?.  In our view, Section 44A is

only an enabling provision which enables the District Court to

execute the decree as if the decree had been passed by an Indian

court and it does not deal with the period of limitation.   A plain

reading of Section 44A clearly indicates that it only empowers the

District  Court to execute the foreign  decree  as if it  had  been

passed by the said District Court.  It also provides that Section 47

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of  the Act shall, from the date of  filing of  certified copy of  the

decree, apply.   Section 47 deals with the questions to be

determined by the court executing a decree.   Execution of a

decree  is  governed under Order  21 of  CPC and, therefore, the

provisions  of  Section 47  of the  Act  and Order  21  of  CPC will

apply.  In our considered view, Section 44A has nothing to do

with limitation.   

20. Section 44­A clearly provides that it is only after the filing of

the certified copy and the certificate, that the provision of Section

47 CPC will become applicable.   This clearly indicates that this

section only lays down the procedure to be followed by the

District Court.   Though we do not approve of the view taken by

the Madras High Court in Sheik Ali  (supra), that limitation will

start running on filing of an application under Section 44A, we

only approve the following observations:

“(19) To sum up of our conclusions, we are of the view that S. 44­A(1) is confined to the powers and manner of execution and has nothing to do with the law of limitation. The fiction created by the sub­section goes no further and  is  not for  all  purposes,  but  is designed to attract  and apply  to execution of foreign  judgments by the District Court  its own powers of execution and the manner of it in relation to its decrees, without reference to limitation…”  

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21. In our view Section 44A only enables the District Court to

execute the decree and further provides that the District Court

shall follow the same procedure as it follows while executing an

Indian decree, but it does not lay down or indicate the period of

limitation for filing such an execution petition. We answer

question number 1 accordingly.  

Question No.2

22. Articles 136 and 137 of the Act read as follows:

   Article 136, Limitation Act, 1963:

For the execution of any decree (other than a decree granting a mandatory injunction) or order of any civil court.

Twelve years

When the decree or order becomes enforceable or where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, when default in making the payment or  delivery in respect of  which execution  is sought, takes place:

Provided that an application for the enforcement or execution of  a  decree

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granting a perpetual injunction shall not be subject to any period of limitation.

          Article 137, Limitation Act, 1963:

PART II­OTHER APPLICATIONS

Any other application for which no period of limitation is  provided elsewhere in this division.

Three years When  the right to apply accrues.

23. If  we hold that  Article  136 is  to apply then the period of

limitation in case of any foreign decree would be 12 years

regardless of the limitation which may be prevalent in the country

where the decree  was  passed, i.e., the  cause country.   If the

decree is to be executed in another jurisdiction, i.e., the  forum

country, which law should apply?   Whether the law of limitation

as applicable  in  the  cause country  or the  forum country  would

apply?

24. There is also the issue of conflict of laws between the cause

country  and the  forum country.  As far  as  the  present  case  is

concerned, it is not disputed that the limitation for executing a

decree in England is 6 years in terms of Section 24 of the

Limitation Act of 1980 of the United Kingdom.   Rule 40.7 of the

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Civil  Procedure  Rules  of  England provides that  a judgment  or

order takes effect from the date it is given or made or such later

date  as the  court  may specify.  The decree therefore  becomes

enforceable on the date when it was passed and as far as this

case is concerned, the date of passing of the decree is

20.02.1995.   If the limitation is 6 years then obviously the

execution petition should have been filed on or before 20.02.2001

and if the limitation was 12 years in terms of Section 136 of the

Act, the execution petition would still be barred by limitation as

the execution petition was filed in 2009.   

25. There is increasing interaction  and  interplay  between  the

people across the globe.  There are more and more international

business deals being done.   There is an increasing exchange of

views in the fields of art, literature, sports, etc.   Goods are sold

across the world, online.  All these could lead to litigation, which

may have the cause in one country but the judgment debtor may

not have any property in that cause country and the decree­holder

would have to go to another country (forum country)  to take

benefit of the decree.   

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26. The earlier view was that the law of limitation being a

procedural law, the law of the  forum country  would govern the

field.  This is reflected in Dicey’s observations in ‘Conflict of Laws’,

6th Edition7, where it has been said as follows:

“Whilst,  however, it is  certain that  all  matters which concern  procedure  are in  an  English court governed by the law of England, it is equally clear that everything  which  goes to the substance  of a party’s rights and does not concern procedure is governed by the law appropriate to the case.

Our Rule is clear and well established.   The difficulty  of its application to  a  given  case lies in discriminating between matters which belong to procedure and matters which affect the substantive rights of  the parties.   In the determination of  this question two considerations must be borne in mind:­ (1) English lawyers give the widest possible extension to the  meaning  of the term  ‘procedure’. The expression, as interpreted by our judges, includes all legal remedies, and everything connected with the enforcement of a right.  It covers, therefore, the whole field of practice; it includes the question of set­off and counter­claim, the whole law of evidence, as well as every rule in respect of the limitation of an action or of any other legal proceeding for the enforcement of a right, and hence it further includes the methods, e.g., seizure of goods or arrest of person, by which a judgment may be enforced.”

xxx      xxx              xxx

Similar view was relied upon by the Division Bench of the Madras

High Court in the case of  Uthamram  vs.  K. M. Abdul Kasim

7 J.H.C. Morris, et. al., (Eds.), “Dicey’s Conflict of Laws”, 6th Edn., Stevens & Sons Ltd.,  Sweet & Maxwell, Ltd., pp.860-861 (1949).

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Co.8, which held that the law of limitation of the  forum country

would apply.   

27. Indian Courts have normally taken the view that the law of

limitation is a procedural law. We may point out that in Dicey’s

‘Conflict of Laws’ 14th Edition9, the view taken is entirely different.

The present thinking appears to be that law of limitation is not

procedural, especially when it leads to extinguishment of rights or

remedies. Hence, it cannot be termed as a procedural law.   

28. At this stage we may refer to Dicey’s Conflict of Laws 14th

Edn. which has summarised this change in view in the following

words:­

“The traditional approach has been thrown into some doubt by decisions in Australia and Canada.  In John Pfeiffer Pty Ltd v. Rogerson, the High Court of Australia indicated (obiter) that, at common law, statutes of limitation are substantive, rather than procedural.   In Tolofson  v.  Jensen  the Supreme Court of Canada rejected the traditional common  law  classification  of statutes of limitation and the distinction between right and remedy on which it is based and held that statutes of limitation are to be classified as substantive.   This approach  was confirmed  in  Castillo  v.  Castillo.  The Supreme  Court applied  a  one year limitation  period under the law applicable to the tort, Californian law, despite a provision of Alberta law which provided that Alberta  limitation  law  (which had a  two year period) should apply “notwithstanding that, in accordance with conflict of law rules, the claim will be adjudicated

8 AIR 1964 Mad 221 9 Sir Lawrence Collins et. al., “Dicey, Morris, & Collins on The Conflict of Laws”, 14th Edn.,  Sweet & Maxwell pp. 198-199 (2006).  

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under the substantive law of another jurisdiction.”   A majority of the Supreme Court of Canada held that this provision  had no application because the  claim was already time­barred when the action was brought.”

Even in relation to England it was observed:­

“Under the Foreign Limitation Periods Act 1984.   The Act  was  based  on the recommendations  of the Law Commission.  It adopts the general principle, subject to an exception based on public policy, that the limitation rules of the lex causae are to be applied in actions in England, even if those rules do not lay down any limitation period for the claim.  English limitation rules are  not to  be  applied  unless  English law is the lex causae or one of two leges causae governing the matter….”

29. This change in view can also be noted in the works of other

authors. In  Cheshire  & North’s  Private International  Law  (10th

Edn.) it can be seen that as per the older rules, the limitation of

English law  would  apply.  Hence  a claim  would  be  allowed in

England  if it fell  within the limitation period  prescribed  in its

laws, even if the action was time­barred as per the foreign law

applicable to the transaction/contract/dispute in question.

However, this raised various issues which were also highlighted.

It would be apposite to refer to the following paragraphs:­

“(I) The time within which an action must be brought

English law is  unfortunately committed to the view that statutes of limitation, if they merely specify a certain time after which rights cannot be enforced by action, affect procedure, not substance.  They concern, it is said, not the merits of the cause, but the manner

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in which the remedy must be pursued.   They ordain that the procedure of the court is available only when set in motion within a certain fixed time after the cause of action arose.   In the result, therefore, any relevant statute of limitation that obtains in the lex fori may be pleaded, while a statute of some foreign law, even though it belongs to the proper law of the transaction, must be disregarded.

xxx                       xxx xxx   

The rules of  English  private international law  upon this matter, however, pay little attention to the proper law of the transaction that is in issue.  Thus in a report of a judgment by ROCHE, J., it is said: “Foreign courts might  have  decided that the laws  of limitation were part of the substantive law, but he was unable to apply them as such.”  The result of this attitude is twofold.

Firstly, an English statute of limitation is a good idea plea to an action brought in England, notwithstanding that the action  is still  maintainable according to the proper law of the transaction.

xxx               xxx xxx   

Secondly, the extinction of the right of action by the proper law of the transaction is not a bar to an action in England.  In other words, if the permissible period is longer in England than in the foreign country the plaintiff is at liberty to sustain his action here.

30. In Cheshire & North’s Private International Law (15th

Edition) it is noted that this change of applying the law of

limitation as applicable in the cause country whose law applies to

the transaction/contract/dispute was a welcome one. The

following paragraphs are relevant:­

“(a) The time within which a action must be brought

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Until 1984, English law was committed to the view that statutes of limitation, if they merely specified a certain time after which rights could not be enforced by actin, affected procedure and not substance.   This meant that limitation was governed by English law, as the law of the forum, and any limitation provision of the applicable law was ignored.   Where, however, it could be shown that the effect of a statute of limitation of the foreign applicable law was not just to bar the plaintiff’s remedy, but also to extinguish his cause of action, then the English courts would be prepared to regard the  foreign rule as substantive and to  be applied  in England.

The common law rule, which has been criticised in a number of common law jurisdictions, tends to have no counterpart in civil law countries which usually treat statutes of limitations as substantive. Furthermore, the Contracts (Applicable Law) Act 1990, implementing the European Community Convention on the Law Applicable to Contractual Obligations  (1980), provides that the law which governs the essential validity of a contract is to govern “the various ways of extinguishing obligations, and prescription and limitation of actions”. In 1982 the Law Commission concluded that “there is a clear case for the reform of the present English rule” and their recommendations formed the  basis of the Foreign Limitation Periods Act 1984.

The general  principle  of the  1984 Act  abandons  the common law approach which favoured the application of the domestic law of limitation.  Instead, the English court is to apply the law which governs the substantive issue according to English choice of law rules, and this new approach is applied to both actions and arbitrations in England.   In the case of those few tort claims, such as defamation, to which the common law choice of law rules still apply,  English law, as the law of the forum, will remain relevant because of the choice of law rule which requires actionability both by the law of the forum and by the law of the place of the tort. The corollary  of the  main rule is that  English law  is  no longer automatically to be applied.  There is, of course, a significant difference between a rule under which a claim is to be held to be statute barred in England if statute barred under the governing law, a reform which

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seems widely to be welcomed, and a further rule that, if  the claim is not statute barred abroad, it must be allowed to proceed in England.”

31. The old position under common law was that limitation was

treated as a procedural law.   In countries following civil

jurisdiction, the  law of limitation has never  been  treated as a

procedural law but as a substantive law.  In recent years, almost

all the common law countries have either brought a new

legislation or by judicial decisions have now taken the view that

the  law of  limitation cannot be treated as a purely procedural

law.   We may make reference to the law in the United Kingdom

and the United States of America.  

32. Section 1  of the  Foreign Limitation Periods  Act,  1984 as

applicable to the United Kingdom reads as follows:

“Application of foreign limitation law.

1. – (1) Subject to the following provisions of this Act, where in any action or proceedings in a court in England and Wales the law of any other country falls (in accordance with rules of private international law applicable by any such court) to be taken into account in the determination of any matter—

(a) the law of that other country relating to limitation shall apply in respect of that matter for the purposes of the action or proceedings, subject to sections 1A and 1B; and

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(b) except where that matter falls within subsection (2) below, the law of England and Wales relating to limitation shall not so apply.

(2) A matter falls within this subsection if it is a matter in the determination of which both the law of England and Wales and the law of some other country fall to be taken into account.

(3) The law of England and Wales shall determine for the purposes of any law applicable by virtue of subsection (1)(a) above whether, and the time at which, proceedings have been commenced in respect of  any matter; and, accordingly, section 35 of the Limitation Act 1980 (new  claims in  pending  proceedings) shall apply in relation to time limits applicable by virtue of subsection (1)(a) above as it applies in relation to time limits under that Act.

(4) A court in England and Wales, in exercising in pursuance of subsection (1)(a) above any discretion conferred by the law of any other country, shall so far as practicable exercise that discretion in the manner in which it is exercised in comparable cases by the courts of that other country.

(5) In this  section “law”, in relation  to  any  country, shall not include rules of private international law applicable by the courts of that country or, in the case of England and Wales, this Act.”

Several States in the United States of America have adopted the

Uniform Conflict of  Laws Limitation  Act,  1982  evolved  by the

National Conference of Commissioners on Uniform State Laws.

Sections 2 and 3 of this Act read as follows:

“Section 2: (a) Except as provided by sec 4, if a claim is substantively based:  

(1) upon the law of one other state, the limitation period of that state applies; or  

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(2) upon the law of more than one state, the limitation period of one of those states chosen by the law of conflicts of laws of this State, applies.  

(b) The limitation  period of this  State  applies to  all other claims.”  

“Section 3: If the statute of limitations of another state applies to the assertion of a claim in this State,  the other States’ relevant statutes and other rules of law governing tolling and accrual apply in computing the limitation period,  but  its statutes and other rules of law governing conflict of laws do not apply.”

33. The view worldwide appears to be that the limitation law of

the  cause country  should be applied even in the  forum country.

Furthermore, we are of the view that in those cases where the

remedy stands extinguished in the  cause country  it virtually

extinguishes the right of the decree­holder to execute the decree

and creates a corresponding right in the judgment debtor to

challenge the execution  of the  decree.  These  are substantive

rights and cannot be termed to be procedural.  As India becomes

a global player in the international business arena, it cannot be

one of the few countries where the law of limitation is considered

entirely procedural.

34. We have already clearly indicated that if the law of a forum

country  is silent with regard to the limitation prescribed for

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execution of  a foreign decree then  the limitation of the  cause

country would apply.   

35. We  answer  question  no.  2  by  holding that the limitation

period for  executing  a  decree  passed  by  a foreign  court (from

reciprocating country) in India will be the limitation prescribed in

the reciprocating foreign country. Obviously this will be subject to

the decree being executable in terms of Section 13 of the CPC.  

Question No. 3

36. Coming to the third question, as far as Article 136 of the Act

is concerned, we are of the view that the same only deals with

decrees passed by Indian courts.   The Limitation Act has been

framed mainly keeping in view the suits, appeals and applications

to be filed in Indian courts and wherever the need was felt to deal

with something outside India, the Limitation Act specifically deals

with that situation.   We may refer to Article 39 of the Act which

specifically deals with dishonoured foreign bills.   Article 101 of

the Act deals with suits filed upon a judgment including a foreign

judgment. The framers of the Act specifically mentioned

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‘including a foreign judgment’ in Article 101 of this very Schedule

which is part of the Act.   

37. When dealing with the applications for execution of decrees

the law makers could have easily said ‘including foreign decrees’.

This having not been said,  it appears that the intention of the

legislature was that Article 136 would be confined to decrees of

Indian courts.   Furthermore, Article 136 clearly states that the

decree or order should be of a civil court.  A civil court, as defined

in India, may not be the same as in a foreign jurisdiction.   We

must also note the fact that the new Limitation Act was enacted

in 1963 and presumably the law makers were aware of the

provisions of Section 44A of the CPC.  When they kept silent on

this aspect, the only inference that can be drawn is that Article

136 only deals with decrees passed by Indian civil courts.

38. Having said so, we are clearly of the view that some

clarification needs to be given with regard to the period in which

an application under Section 44A can be filed.   In this regard,

when we read sub­section (1) and sub­section (2) of Section 44A

together it is obvious that what is required to be filed is a certified

copy of the decree in terms of sub­section (1) and also a certificate

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from the court in the cause country stating the extent, if any, to

which the decree has been satisfied or adjusted.   These are the

twin requirements and no foreign decree can be executed unless

both the requirements are met.   It is essential to file not only a

certified copy of the decree but also the certificate  in terms of

sub­section (2). That, however, does not mean that nothing else

has  to  be  filed.  The only inference is that the decree  can be

executed only once these documents are filed. The executing

court cannot execute this decree and certificate unless the decree

holder also provides various details of the judgment debtor that

is, his address, etc. in India and the details of the property of the

judgment debtor.  These particulars will have to be provided by a

written application filed in terms of clause (2) of Rule 11 of Order

21 of the CPC which reads as follows:

(2) Written application. – Save as otherwise provided by  sub­rule (1), every  application  for the execution of a decree shall be in writing, signed and verified  by  the applicant  or  by  some other  person proved to the satisfaction of the Court to be acquainted with the facts of the case, and shall contain in a tabular form the following particulars, namely :­

(a) the number of the suit; (b) the names of the parties; (c) the date of the decree; (d) whether any, appeal has been preferred from the decree;

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(e) whether any, and (if any) what, payment or other adjustment  of the matter in controversy  has been made between the parties subsequently to the decree; (f) whether any, and (if any) what, previous applications have been made for the execution of the decree, the dates of such applications and their results; (g) the amount with interest  (if any) due upon the decree, or other relief granted thereby, together with particulars of any cross­decree, whether passed before or after the date of the decree sought to be executed; (h) the amount of the costs (if any) awarded; (i) the name of the person against whom execution of the decree is sought; and (j) the mode in which the assistance of the Court is required whether­

(i) by the delivery of any property specifically decreed; (ii) by the attachment, or by the attachment and sale,  or  by the  sale  without  attachment,  of  any property; (iii) by the arrest and detention in prison of any person; (iv) by the appointment of a receiver; (v) otherwise, as the nature of the relief granted may require.

39. Therefore, a party filing a petition for execution of a foreign

decree must also necessarily file a written application in terms of

Order 21 Rule 11 clause (2) quoted hereinabove.   Without such

an application it will be impossible for the Court to execute the

decree.  In our opinion, therefore, this application for executing a

foreign decree will be an application not covered under any other

article  of the Limitation Act and would thus be covered under

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Article  137 of the  Limitation Act  and  the  applicable limitation

would be 3 years.   

40. The question that then arises is that from which date the

limitation starts.  We can envisage of 2 situations only.  The first

situation is one where the decree holder does not take any steps

for execution of the decree during the period of limitation

prescribed in the  cause country  for execution of decrees in that

country.   In such a case  he  has  lost  his right to  execute the

decree in the country where the cause of action arose.   It would

be a travesty  of justice if the  person having  lost  his rights  to

execute the decree in the  cause country  is permitted to execute

the decree in a forum country.  This would be against the principle

which we have accepted, that the law of limitation is not merely a

procedural law.   This would mean that a person who has lost

his/her right or remedy to execute the foreign decree in the court

where the decree was passed could take benefit of the provisions

of the Indian law for extending the period of limitation.   In the

facts of the present case, the limitation in India is 12 years for

executing a money decree whereas in England it is 6 years.  There

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may be countries where the limitation for executing such a decree

may be more than 12 years.  The right of the litigant in the latter

situation would not  come to an end at  12 years and  it  would

abide by the law of limitation of the cause country which passed

the decree.  Hence, limitation would start running from the date

the  decree was passed  in  the  cause country  and the period of

limitation prescribed  in  the  forum country  would  not  apply. In

case the decree holder does not take any steps to execute the

decree in the  cause country  within the period of limitation

prescribed  in  the  country  of the  cause, it  cannot  come  to the

forum country and plead a new cause of action or plead that the

limitation of the forum country should apply.

41. The second situation is when a decree holder takes steps­in­

aid to execute the decree in the cause country.   The proceedings

in execution may go on for some time, and the decree may be

executed, satisfied partly but not fully.  The judgment debtor may

not  have sufficient  property or funds in the  cause country  to

satisfy the decree etc.  In such eventuality what would be done?

In our considered view, in such circumstances the right to apply

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under Section 44A will accrue only after the execution

proceedings in the cause country are finalised and the application

under Section 44A of the CPC can be filed within 3 years of the

finalisation of the execution proceedings in the cause country as

prescribed by Article  137 of the  Act.  The decree holder  must

approach the  Indian court  along with  the certified copy of the

decree and the requisite certificate within this period of 3 years.    

42. It is clarified that applying in the  cause country  for a

certified copy of the decree or the certificate of part­satisfaction, if

any, of the decree, as required by Section 44A will not

tantamount to step­in­aid to execute the  decree in the  cause

country.

43. We answer the third question accordingly and hold that the

period of limitation would start running from the date the decree

was passed in the foreign court of a reciprocating country.

However, if the decree holder first takes steps­in­aid to execute

the decree in the  cause country, and the decree is not fully

satisfied, then he can then file a petition for execution in India

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within a period of 3 years from the finalisation of the execution

proceedings in the cause country.

44. In view of the discussion above we dismiss the appeal and

uphold the orders of both the Courts below, though for different

reasons.  No order as to costs.  Pending applications(s), if  any,

shall stand(s) disposed of.  

…………………………..J. (Deepak Gupta)

…………………………..J. (Aniruddha Bose)

New Delhi March  17,  2020

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