Bank of Baroda vs Kotak Mahindra Bank Ltd.

1. In view of this Court, Section 44A of Code of Civil Procedure, 1908 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 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 view of this Court, Section 44A has nothing to do with limitation. [Para 19][503-C-E]

2. Section 44-A 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. [Para 20][503-F]

3. In view of this Court 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. [Para 21][504-A-B]

What is the period of limitation for executing a decree passed by a foreign court (from a reciprocating country) in India?

4. 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. Reference may be made to the law in the United Kingdom and the United States of America. [Para 31][509-E-F]

5. The view worldwide appears to be that the limitation law of the cause country should be applied even in the forum country. Furthermore, this Court is of the view that in those cases where the remedy stands extinguished in the cause country it virtually extinguishes the right of the decree-holder 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. [Para 33][511-C]

6. It has been already clearly indicated that if the law of a forum country is silent with regard to the limitation prescribed for execution of a foreign decree then the limitation of the cause country would apply. [Para 34][511-D]

7. This Court answers the question 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. [Para 35][511-E]

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?

8. The question that then arises is that from which date the limitation starts. This Court envisages 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 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. [Para 40][513-H; 514-A-E]

9. 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 view of this Court, in such circumstances the right to apply 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. It is clarified that applying in the cause country for a certified copy of the decree or the certificate of part-satisfaction, if any, of the decree, as required by Section 44A will not tantamount to step-in-aid to execute the decree in the cause country. [Paras 41, 42][514-F-H; 515-A]

10. This Court answers 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 steps-in-aid 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 within a period of 3 years from the finalisation of the execution proceedings in the cause country. [Para 43][515-B] Income Tax Commissioner v. S. Teja Singh AIR 1959 SC 352 : [1959] Suppl. SCR 394 – referred to.

Lakhpat Rai Sharma v. Atma Singh AIR (58) 1971

P & H 476; Uthamram v. K.M. Abdul Kasim Co. (AIR 1964) (Mad 221) – referred to.

Sheik Ali v. Sheik Mohamed AIR 1967 Mad 45

– not approved.

East End Dwellings Co. Ltd. v. Finsburry Brough Council 1951 (2) All E.R. 587 – referred to.

Sir Lawrence Collins et. al., “Dicey, Morris, & Collins on The Conflict of Laws , 14th Edn., Sweet & Maxwell pp. 198-199 (2006) – referred to.