Limitation law in Goa applied to Indian-law loan claims, making the Portuguese thirty-year rule inapplicable and the suit time-barred.

Article 535 of the Portuguese Civil Code was held not to govern limitation for a suit founded on a loan transaction and promissory note in Goa where the substantive cause of action arose under the Indian Contract Act and the Negotiable Instruments Act, both extended to the territory. Section 29(2) of the Limitation Act, 1963 saved local law only to the extent not excluded, and Article 535 was treated as procedural and inconsistent with the general limitation scheme. The Court held that the Limitation Act, 1963 applied, the contrary earlier view was overruled, and the suit was barred by limitation.

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Issues: Whether Article 535 of the Portuguese Civil Code continued to govern limitation for a suit based on a loan transaction and promissory note in Goa, or whether the Limitation Act, 1963 applied and the Portuguese provision stood impliedly repealed.

Analysis: Section 29(2) of the Limitation Act, 1963 saves local or special laws only to the extent they are not expressly excluded. The Portuguese Civil Code was held to be a local law only in relation to rights and liabilities arising under that Code itself. Where the cause of action arose under the Indian Contract Act and the Negotiable Instruments Act, both of which had been extended to Goa by the relevant regulations, the right and its enforcement were governed by the Indian legal regime and not by Article 535 of the Portuguese Civil Code. The Court held that Article 535 was procedural in character, that the Limitation Act, 1963 constituted the general law of limitation for the country, and that retaining a separate thirty-year period under the Portuguese Civil Code for Indian-law causes of action would create inconsistency and absurdity. On that basis, the earlier view treating Article 535 as a surviving local law of limitation for such suits was overruled.

Conclusion: Article 535 of the Portuguese Civil Code did not apply to the suit, the Limitation Act, 1963 governed the claim, and the suit was barred by limitation.

Ratio Decidendi: A local or special limitation provision continues only for causes of action arising under the law to which it belongs; where the substantive right arises under Indian statutes extended to the territory, a contrary local prescription is impliedly repealed by the general limitation law.

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