2020 (3) TMI 1472 - SC - Indian Laws

Section 44A CPC doesn't create fresh limitation period for executing foreign decrees from reciprocating countries

The SC held that Section 44A of CPC does not create a fresh limitation period for executing foreign decrees from reciprocating countries in India. The ... Period Of Limitation for filing an application for execution of a foreign decree of a reciprocating country in India - Whether Section 44A of the Code of Civil Procedure creates a fresh period of limitation - Applicability of Article 136 of the Limitation Act, 1963 to foreign decrees - Appellant Bank of Baroda filed a suit against the Vysya Bank for recovery of its dues in London. 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 - HELD THAT:- 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. Cause of action is nothing but a bundle of facts which gives rise to a legal right enabling the Plaintiff to file a suit. On the other hand, a decree is a determination already made by a court 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 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. Period of limitation for executing a decree passed by a foreign court (from a reciprocating country) in India - 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. We have 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. 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 Code of Civil Procedure. 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 - 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 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 137 of the Limitation Act and the applicable limitation would be 3 years. From which date the limitation starts - 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. 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. 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 finalisation of the execution proceedings in the cause country. The appeal was dismissed, and the orders of both the lower courts were upheld, though for different reasons. Issues Involved:1. Interpretation of Section 44A of the Code of Civil Procedure regarding the limitation for execution of foreign decrees.2. Determination of the period of limitation for executing a decree passed by a foreign court from a reciprocating country in India.3. The starting point of the limitation period for executing such a foreign decree in India.Summary:Issue 1: Interpretation of Section 44ASection 44A enables the District Court to execute a decree passed by a superior court of a reciprocating territory as if it had been passed by the District Court. It requires filing a certified copy of the decree and a certificate from the superior court indicating the extent of satisfaction or adjustment of the decree. The court held that Section 44A is confined to the manner of execution and does not deal with the period of limitation for filing execution proceedings. The court rejected the argument that limitation starts only after filing a petition u/s 44A, emphasizing that limitation applies to execution proceedings and not writ proceedings.Issue 2: Period of Limitation for Executing a Foreign DecreeThe court analyzed Articles 136 and 137 of the Limitation Act, 1963. It concluded that the limitation period for executing a decree passed by a foreign court from a reciprocating country in India will be the limitation prescribed in the reciprocating foreign country. The court noted that the limitation law should be substantive, not procedural, and thus the limitation period of the cause country (where the decree was passed) should apply.Issue 3: Starting Point of Limitation PeriodThe court held that the limitation period starts from the date the decree was passed in the foreign court. If the decree holder takes steps-in-aid to execute the decree in the cause country, the right to apply u/s 44A will accrue only after the execution proceedings in the cause country are finalized. The decree holder must then file an application for execution in India within 3 years from the finalization of the execution proceedings in the cause country. The court clarified that applying for a certified copy of the decree or the certificate of part-satisfaction does not constitute a step-in-aid to execute the decree in the cause country.Conclusion:The appeal was dismissed, and the orders of the lower courts were upheld. The court provided clarity on the application of limitation laws concerning the execution of foreign decrees in India, emphasizing the substantive nature of limitation laws and the necessity to adhere to the limitation period prescribed in the cause country.