Period of limitation for the execution of a decree issued by a foreign court shall be the limit specified in the concerned foreign country - Synopsis
Dilpreet Singh 18 Mar 2020

The Supreme Court held that the limitation period for the implementation of a judgment passed in India by a foreign court (from the reciprocating country) should be the limitation prescribed in the reciprocating country.

The Bench of Justice Deepak Gupta and Justice Aniruddha Bose held that the limitation period should begin to run from the date the judgment was passed in a reciprocating country's court. However, if the holder of the decree initially takes steps-in-help to implement the decree in the country of cause and the decree is not completely fulfilled, then he may file a petition for execution in India within 3 years from the completion of the execution proceedings in the country of cause, the bench said.

In an appeal filed by Bank of Baroda, the following questions was considered by the Apex Court

(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?

The Limitation Act does not provide for any limitation period in respect of the execution of a foreign decree passed in a reciprocating country. The crux of the Attorney General's submission was that the cause of action to file a petition for execution occurs only when a petition is filed under Section 44A of the CPC which states that a decree passed by a court in a reciprocal country should be regarded as an Indian Decree. The Court rejected this submission and observed: "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"

In reaction to the first question, the Bench held that section 44A only permits the execution of the decree by the District Court and further provides that the District Court shall follow the same process as it follows when executing an Indian decree, but does not lay down or indicate the limitation period for filing such a request for execution.

The bench made the following observations while addressing the other questions:

Article 136 deals only with decrees issued by Indian civil courts

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 'including a foreign judgment' in Article 101 of this very Schedule which is part of the Act.. 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.

Law of limitation is not merely a procedural law

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 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.

Written application in terms of Order 21 Rule 11(2) Necessary

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.

Application for executing a foreign decree covered under Article 137

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 Article 137 of the Limitation Act and the applicable limitation would be 3 years.

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