Case: BANK OF BARODA Vs. KOTAK MAHINDRA BANK LTD

create a fresh period for enforcing the decree. 16. We clarify that for the purpose of this judgment we have used the expressions, cause country which will mean the country in which the decree was issued (in this case England), and forum country which would mean the country in which the decree is sought to be executed (in this case India). 17. 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. 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. vs. Finsbury Borough Council 1951 (2) All E.R. 587 wherein it was held as follows: …If one is bidden to treat an imaginary state of affairs as real, one must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It does not say that, having done so, one must cause or permit ones imagination to boggle when it comes to the inevitable corollaries of that state of affairs. The aforesaid observations by the House of Lords have been approved by this Court in Income Tax Commissioner vs. S. Teja Singh AIR 1959 SC 352 . The Madras High Court (In Uthamram vs. K. M. Abdul Kasim Co., AIR 1964 Mad 221 ) and the Punjab and Haryana High Court (In Lakhpat Rai Sharma vs. Atma Singh, AIR (58) 1971 P&H 476) have taken the view that the foreign decree has to be executed in India as if it had been passed by an Indian court and the legal fiction must be extended to its logical end. Therefore, the foreign decree must be treated as an Indian decree as on the date it was passed. However, the Punjab and Haryana High Court held in Lakhpat Rai Sharma (supra) that if no step for execution of the decree and no step-in-aid for such an execution is taken in an Indian court on or before the limitation prescribed, then the execution petition has to be dismissed on the ground that it is time barred. It rejected the contention that the application for certificate of non-satisfaction given to the foreign court should be treated to be a step-in-aid and excluded while calculating the period of limitation. 19. Does Section 44A create a fresh period of limitation by extension of the deeming provision?. 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 CPC and, therefore, the provisions of Section 47 of the Act and Order 21 of CPC 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 CPC 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 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…

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]From a bare reading of Section 44A CPC it is crystal clear that it applies only to money decrees and not to other decrees13. 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 period shall be dismissed even if limitation has not been set up as a defence. The word application used is wide enough to include an application filed for execution of a decree, even a foreign decree. Therefore, the principles of delay and laches which may be applicable to writ proceedings cannot be applied to civil proceedings and are not at all attracted in proceedings filed under the CPC which, in our opinion, must be filed within the prescribed period of limitation15. We have carefully considered the matter and 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. 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 decree17. 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 contentionIn 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 CPC and, therefore, the provisions of Section 47 of the Act and Order 21 of CPC will apply. In our considered view, Section 44A has nothing to do with limitation20. 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 CPC 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 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…21. In our view 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 accordingly24. There is also the issue of conflict of laws between the cause country and the forum country. As far as the present case is concerned, it is not disputed that the limitation for executing a decree in England is 6 years in terms of Section 24 of the Limitation Act of 1980 of the United Kingdom. Rule 40.7 of the Civil Procedure Rules of England provides that a judgment or order takes effect from the date it is given or made or such later date as the court may specify. The decree therefore becomes enforceable on the date when it was passed and as far as this case is concerned, the date of passing of the decree is 20.02.1995. 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 200933. 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 procedural34. 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 apply35. 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 CPC36. 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 situation37. 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 courts38. 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 44A 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 debtor39. 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 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 yearsWe 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 apply41. 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 44A will accrue only after the execution proceedings in the cause country are finalised and the application under Section 44A of the CPC 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 years42. 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 country43. 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.