Limitation For Filing An Application For Execution Of A Foreign Decree

A No.2175 OF 2020 @ SLP(C) No.8123 of 2015 titled Bank of Baroda v/s Kotak Mahindra Bank Ltd. dated 17.03.2020
“What is the limitation for filing an application for execution of a foreign decree of a reciprocating country in India?”
Considering the rival arguments before us, the following issues arise for consideration:
(i) Does Section 44-A 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

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. We only approve the following observations:
“(19) To sum up of our conclusions, we are of the view that S. 44­ A (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 sub ­section 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…”

In our view Section 44-A 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

 Uthamram  vs.  K.  M.  Abdul  Kasim AIR 1964 Mad 221  which held that the law of limitation of the  forum country would apply. 
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.
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 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.
34. We have 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.  
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 C P C. 

QUESTION NO. 3

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 44 A can be filed. In this regard,when we read sub­ section (1) and sub­-section (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 sub­-section (1) and also a certificate 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 sub-­section (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 
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 here in above.  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 Article 37 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 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 steps ­in 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 under Section   44 A will  accrue  only after the execution proceedings in the cause country are finalized and the application under Section 44A of the C P C can be filed within 3 years of the finalization 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 part ­satisfaction, if any, of the decree, as required by Section  44 A will not tantamount to step ­in ­aid 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 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 finalization of the execution proceedings in the cause country

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