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TMI Blog2020 (3) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 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 Code of Civil Procedure and, therefore, the provisions of Section 47 of the Act and Order 21 of Code of Civil Procedure will apply. In our considered view, Section 44A has nothing to do with limitation. Thus, Section 44A only enables the District Court to execute the decree and further provides that the District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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. Thus, 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 Code of Civil Procedure 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the satisfaction of the decree. On 28.08.1995, Vysya Bank placed an inter-bank 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Code of Civil Procedure which reads as follows: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the decree has been satisfied or adjusted. This certificate shall be conclusive proof of the extent of such satisfaction/adjustment. Sub-section (3) provides that from the date of filing of certified copy of the decree, the provisions of Section 47 of Code of Civil Procedure 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. 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orceable 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 Sub-section (1) of Section 44A is a deeming provision which 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. v. Finsbury Borough Counci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the court executing a decree. Execution of a decree is governed Under Order 21 of Code of Civil Procedure and, therefore, the provisions of Section 47 of the Act and Order 21 of Code of Civil Procedure will apply. In our considered view, Section 44A has nothing to do with limitation. 20. 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 Code of Civil Procedure 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 Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. 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 decree-holder would have to go to another country (forum country) to take benefit of the decree. 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 Edition J.H.C. Morris, et. al., (Eds.), Dicey's Conflict of Laws , 6th Edn., Stevens Sons Ltd., Sweet Maxwell, Ltd., pp. 860-861 (1949), where it has been said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsen 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 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 time-barred 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 li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition) 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 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 action, 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, implementin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vate 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 (b) except where that matter falls within Sub-section (2) below, the law of England and Wales relating to limitation shall not so apply. (2) A matter falls within this Sub-section 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 Sub-section (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 Sub-section (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 Sub-section (1)(a) above any discretion conferred by the law of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viously this will be subject to the decree being executable in terms of Section 13 of the Code of Civil Procedure. 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 '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 state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cross-decree, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use 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 44A will accrue only after the execution proceedings in the cause country are finalised and the application Under Section 44A of the Code of Civil Procedure 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 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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