# BANK OF BARODA v. KOTAK MAHINDRA BANK LTD

- **Citation:** [2020] 5 S.C.R. 492
- **Court:** Supreme Court of India
- **Decided:** 2020-03-17
- **Case number:** Civil Appeal No. 2175 of 2020
- **Bench:** Deepak Gupta, Aniruddha Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bank-of-baroda-v-kotak-mahindra-bank-ltd-34491
- **Pages:** 24

## Headnote

Limitation Act, 1963 - Arts. 136 and 137 - Executing a decree
passed by a foreign court (from a reciprocating country) in India -
Period of limitation for - Held: 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 - However, this will be subject to the decree being executable
in terms of s.13 of the CPC.
Code of Civil Procedure, 1908 - s. 44A - Limitation Act, 1963
- s.44A indicates period of limitation to execute the foreign decree
or not - Held: s.44A only empowers the District Court to execute
the foreign decree as if it had been passed by the said District Court
- s.44A 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.
Limitation Act, 1963 - Art. 137 - 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 - Held: 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 i.e. the country in which decree was
issued, 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.
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Dismissing the appeal, the Court
HELD: 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?
1. In view of this Court, Section 44A of Code of Civil
Procedure, 1908 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 view of this Court, Section 44A has nothing to do with
limitation. [Para 19][503-C-E]
2. 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. [Para 20][503-F]
3. In view of this Court 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. [Para
21][504-A-B]
What is the period of limitation for executing a decree
passed by a foreign court (from a reciprocating country) in India?
4. 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
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or by judicial decisions have now taken the view that

## Text

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BANK OF BARODA
v.
KOTAK MAHINDRA BANK LTD.
(Civil Appeal No. 2175 of 2020)
MARCH 17, 2020
[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]
Limitation Act, 1963 - Arts. 136 and 137 - Executing a decree
passed by a foreign court (from a reciprocating country) in India -
Period of limitation for - Held: 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 - However, this will be subject to the decree being executable
in terms of s.13 of the CPC.
Code of Civil Procedure, 1908 - s. 44A - Limitation Act, 1963
- s.44A indicates period of limitation to execute the foreign decree
or not - Held: s.44A only empowers the District Court to execute
the foreign decree as if it had been passed by the said District Court
- s.44A 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.
Limitation Act, 1963 - Art. 137 - 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 - Held: 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 i.e. the country in which decree was
issued, 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.
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Dismissing the appeal, the Court
HELD: 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?
1. In view of this Court, Section 44A of Code of Civil
Procedure, 1908 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 view of this Court, Section 44A has nothing to do with
limitation. [Para 19][503-C-E]
2. 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. [Para 20][503-F]
3. In view of this Court 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. [Para
21][504-A-B]
What is the period of limitation for executing a decree
passed by a foreign court (from a reciprocating country) in India?
4. 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
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or by judicial decisions have now taken the view that the law of
limitation cannot be treated as a purely procedural law. Reference
may be made to the law in the United Kingdom and the United
States of America. [Para 31][509-E-F]
5. The view worldwide appears to be that the limitation law
of the cause country should be applied even in the forum country.
Furthermore, this Court is 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. [Para 33][511-C]
6. It has been 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. [Para 34][511-D]
7. This Court answers the question 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 CPC. [Para 35][511-E]
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?
8. The question that then arises is that from which date the
limitation starts. This Court envisages 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
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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. [Para 40][513-H; 514-A-E]
9. The second situation is when a decree holder takes stepsin-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 view
of this Court, 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 years. 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. [Paras 41, 42][514-F-H;
515-A]
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10. This Court answers 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. [Para 43][515-B]
Income Tax Commissioner v. S. Teja Singh AIR 1959
SC 352 : [1959] Suppl. SCR 394 - referred to.
Lakhpat Rai Sharma v. Atma Singh AIR (58) 1971
P & H 476; Uthamram v. K.M. Abdul Kasim Co. (AIR
1964) (Mad 221) - referred to.
Sheik Ali v. Sheik Mohamed AIR 1967 Mad 45
- not approved.
East End Dwellings Co. Ltd. v. Finsburry Brough
Council 1951 (2) All E.R. 587 - referred to.
Sir Lawrence Collins et. al., "Dicey, Morris, & Collins
on The Conflict of Laws , 14th Edn., Sweet & Maxwell
pp. 198-199 (2006) - referred to.
Case Law Reference
[1959] Suppl. SCR 394
referred to
Para 18
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2175
of 2020.
From the Judgment and Order dated 13.11.2014 of the High Court
of Karnataka at Bangalore in Civil Revision Petition No.433 of 2013.
K. K. Venugopal, A.G., Ms. Praveena Gautam, Deepak Tyagi,
Pawan Shukla, Ankur Talwar, Raja Ram, Ms. Sweety Pandey, Sai
Anukaran, Advs. for the Appellant.
V. V. S. Rao, Sr. Adv., D. Bharat Kumar, Tadimalla Bhaskar
Gowtham, Aman Shukla, Siddharth Sinha, Vishal Arun, Raghu
Vamsy D.V., Advs. for the Respondent.
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The Judgment of the Court was delivered by
DEEPAK GUPTA, J.
1. Leave granted.
2. "What is the limitation for filing an application for execution of
a foreign decree of a reciprocating country in India?" is the short but
interesting question which arises for decision in this case.
3. Vysya Bank, which is the predecessor of the respondent Kotak
Mahindra Bank Ltd., issued a letter of credit for US $1,794,258 on behalf
of its customer M/s. Aditya Steel Industries Limited in favour of
M/s. Granada Worldwide Investment Company, London. The appellant
Bank of Baroda was the confirming bank to the said letter of credit.
The Vysya Bank issued instructions to the London branch of the appellant
on 12.10.1992 to honour the letter of credit. Acting on this instruction
the London branch of the appellant discounted the letter of credit for a
sum of US $ 1,742,376.41 and payment of this amount was made to
M/s Granada Worldwide Investment Company on 13.10.1992.
4. The appellant Bank of Baroda filed a suit against the Vysya
Bank for recovery of its dues on 19.04.1993 in London. This suit was
decreed by the High Court of Justice, Queens Bench, Divisional
Commercial Court of London (hereinafter referred to as the 'London
Court') on 20.02.1995 and a decree for US $1,267,909.26 along with
interest thereon was passed in favour of the appellant bank and against
Vysya Bank. The decree was not challenged and became final.
5. It appears that some talks went on between the two banks with
regard 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.
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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 Civil & Session Judge, Bangalore
dismissed the execution petition as time barred holding that Article 136
of the Limitation Act, 1963 (for short 'the Act') applies and the execution
petition should have been filed within 12 years of the decree being passed
by the London Court. Aggrieved, the bank approached the High Court
which vide judgment dated 13.11.2014 upheld the view of the trial court.
7. Sh. K. K. Venugopal, learned senior counsel appearing for the
appellant urged that the Act does not prescribe any period of limitation
for execution of a foreign decree passed in a reciprocating country. He
submits that in such eventuality principles of delay and laches as
applicable to writ proceedings may apply and, therefore, he has relied
upon a long list of dates to show that the Bank of Baroda was pursuing
the matter and was trying its best to get the matter settled with Vysya
Bank and urges that there is no delay in filing the petition. His second
submission is that since no limitation is provided under the Act, the cause
of action to file an execution petition arises only when a petition is filed
under Section 44A of the CPC which provides that a decree passed by
a court in a reciprocating country should be treated as an Indian decree
and, therefore, the limitation for 12 years provided under Article 136 of
the Act applies only from that date because that is the date when the
cause of action arises and the decree is treated to be an Indian decree.
8. On the other hand, Mr. V.V.S. Rao, learned senior counsel
appearing for the respondent urged that the law of limitation of England
would apply in this case. It is undisputed that the limitation period as per
English law is 6 years for execution of a decree, and hence the
respondent's submission is that the decree having been passed on
20.02.1995, no petition for execution of that decree could be filed after
20.02.2001. The alternative argument of learned senior counsel for the
respondent is that even if the Indian law of limitation were to apply, the
limitation period for execution of a foreign decree would be determined
as per Article 136 of the Act. Section 44A of the CPC clearly provides
that a decree passed in a reciprocating country should be treated as an
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Indian decree and, therefore, the same must be enforced within 12 years
from the date of passing of the 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 CPC 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 section 13.
Explanation 1.- "Reciprocating territory" means any country or
territory outside India which the Central Government may, by
notification in the Official Gazette, declare to be a reciprocating
territory for the purposes of this section; and "superior Courts",
with reference to any such territory, means such Courts as may
be specified in the said notification.
Explanation 2.- "Decree" with reference to a superior Court
means any decree or judgment of such Court under which a sum
of money is payable, not being a sum payable in respect of taxes
or other charges of a like nature or in respect of a fine or other
penalty, but shall in no case include an arbitration award, even if
such an award is enforceable as a decree or judgment."
10. At the outset, we may note that the aforesaid section was
inserted in the CPC in the year 1937. Prior to that, a decree passed by
any Court in a foreign country could not be executed in India and only a
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suit could be filed on the basis of the judgment passed by a foreign court.
Section 44A brought about a change in law in respect of reciprocating
countries which agreed to respect the judgments and decrees passed in
each other's courts. From a bare reading of Section 44A CPC it is crystal
clear that it applies only to money decrees and not to other decrees.
11. Considering the rival arguments before us, the following issues
arise for consideration:
(i)
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?
(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
12. A careful analysis of Section 44A hereinabove shows that a
decree passed by any superior court of a reciprocating territory can be
executed in India as if it had been passed by the District Court before
whom it is filed. Sub-section (2) of Section 44A casts an obligation on
the person filing such application to file a certified copy of the decree.
Such person must also file a certificate from the superior court which
passed the decree stating the extent, if any, to which 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 CPC 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
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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 limitation.
14. The main argument of Shri K.K. Venugopal is that limitation
will start running only after the petition under Section 44A is filed.
According to him, the cause of action for executing the decree in India
arises only after the application under Section 44A is filed. This view
has also been taken by a Full Bench of the Madras High Court in the
case of Sheik Ali vs. Sheik Mohamed1. This view is however contrary
to the view taken by the Punjab & Haryana High Court in Lakhpat Rai
Sharma vs. Atma Singh2.
15. 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 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
1 AIR 1967 Mad 45
2 AIR (58) 1971 P&H 476
BANK OF BARODA v. KOTAK MAHINDRA BANK LTD.
[DEEPAK GUPTA, J.]
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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
Council3 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 one's 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 Singh4.
The Madras High Court5 and the Punjab and Haryana High Court6 have
3 1951 (2) All E.R. 587
4 AIR 1959 SC 352
5 In Uthamram vs. K. M. Abdul Kasim Co., AIR 1964 Mad 221
6 In Lakhpat Rai Sharma vs. Atma Singh, AIR (58) 1971 P&H 476
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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. 44A(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..."
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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 accordingly.
Question No.2
22. Articles 136 and 137 of the Act read as follows:
Article 136, Limitation Act, 1963:
For the execution of any
decree (other than a decree
granting
a
mandatory
injunction) or order of any
civil court.

Twelve years

When the decree or order
becomes
enforceable
or
where the decree or any
subsequent order directs any
payment of money or the
delivery of any property to
be made at a certain date or
at recurring periods, when
default
in
making
the
payment
or
delivery
in
respect of which execution is
sought, takes place:

Provided that an application
for
the
enforcement
or
execution
of
a
decree
granting
a
perpetual
injunction
shall
not
be
subject to any period of
limitation.
Article 137, Limitation Act, 1963:
PART II-OTHER APPLICATIONS
Any other application for
which no period of limitation
is provided elsewhere in this
division.
Three years

When the right to
apply accrues.

23. If we hold that Article 136 is to apply then the period of limitation
in case of any foreign decree would be 12 years regardless of the
limitation which may be prevalent in the country where the decree was
passed, i.e., the cause country. If the decree is to be executed in another
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jurisdiction, i.e., the forum country, which law should apply? Whether
the law of limitation as applicable in the cause country or the forum
country would apply?
24. 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 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 Edition7,
where it has been said as follows:
"Whilst, however, it is certain that all matters which concern
procedure are in an English court governed by the law of England,
it is equally clear that everything which goes to the substance of a
party's rights and does not concern procedure is governed by the
law appropriate to the case.
Our Rule is clear and well established. The difficulty of its
application to a given case lies in discriminating between matters
7 J.H.C. Morris, et. al., (Eds.), "Dicey's Conflict of Laws", 6th Edn., Stevens & Sons
Ltd., Sweet & Maxwell, Ltd., pp.860-861 (1949).
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which belong to procedure and matters which affect the
substantive rights of the parties. In the determination of this question
two considerations must be borne in mind:-(1) English lawyers
give the widest possible extension to the meaning of the term
'procedure'. The expression, as interpreted by our judges, includes
all legal remedies, and everything connected with the enforcement
of a right. It covers, therefore, the whole field of practice; it
includes the question of set-off and counter-claim, the whole law
of evidence, as well as every rule in respect of the limitation of an
action or of any other legal proceeding for the enforcement of a
right, and hence it further includes the methods, e.g., seizure of
goods or arrest of person, by which a judgment may be enforced."
xxx
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Similar view was relied upon by the Division Bench of the Madras
High Court in the case of Uthamram vs. K. M. Abdul Kasim Co.8,
which held that the law of limitation of the forum country would apply.
27. Indian Courts have normally taken the view that the law of
limitation is a procedural law. We may point out that in Dicey's 'Conflict
of Laws' 14th Edition9, the view taken is entirely different. The present
thinking appears to be that law of limitation is not procedural, especially
when it leads to extinguishment of rights or remedies. Hence, it cannot
be termed as a procedural law.
28. At this stage we may refer to Dicey's Conflict of Laws 14th
Edn. which has summarised this change in view in the following words:-
"The traditional approach has been thrown into some doubt by
decisions in Australia and Canada. In John Pfeiffer Pty Ltd v.
Rogerson, the High Court of Australia indicated (obiter) that, at
common law, statutes of limitation are substantive, rather than
procedural. In Tolofson v. Jensen 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
8 AIR 1964 Mad 221
9 Sir Lawrence Collins et. al., "Dicey, Morris, & Collins on The Conflict of Laws", 14th
Edn., Sweet & Maxwell pp. 198-199 (2006).
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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 limitation
period for the claim. English limitation rules are not to be applied
unless English law is the lex causae or one of two leges causae
governing the matter...."
29. This change in view can also be noted in the works of other
authors. In Cheshire & North's Private International Law (10th Edn.) it
can be seen that as per the older rules, the limitation of English law
would apply. Hence a claim would be allowed in England if it fell within
the limitation period prescribed in its laws, even if the action was timebarred as per the foreign law applicable to the transaction/contract/dispute
in question. However, this raised various issues which were also
highlighted. It would be apposite to refer to the following paragraphs:-
"(I)
The time within which an action must be brought
English law is unfortunately committed to the view that statutes
of limitation, if they merely specify a certain time after which
rights cannot be enforced by action, affect procedure, not
substance. They concern, it is said, not the merits of the cause,
but the manner in which the remedy must be pursued. They
ordain that the procedure of the court is available only when set in
motion within a certain fixed time after the cause of action arose.
In the result, therefore, any relevant statute of limitation that obtains
in the lex fori may be pleaded, while a statute of some foreign
law, even though it belongs to the proper law of the transaction,
must be disregarded.
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The rules of English private international law upon this matter,
however, pay little attention to the proper law of the transaction
that is in issue. Thus in a report of a judgment by ROCHE, J., it is
said: "Foreign courts might have decided that the laws of limitation
were part of the substantive law, but he was unable to apply them
as such." The result of this attitude is twofold.
Firstly, an English statute of limitation is a good idea plea to an
action brought in England, notwithstanding that the action is still
maintainable according to the proper law of the transaction.
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Secondly, the extinction of the right of action by the proper law of
the transaction is not a bar to an action in England. In other
words, if the permissible period is longer in England than in the
foreign country the plaintiff is at liberty to sustain his action here.
30. In Cheshire & North's Private International Law (15th Edition)
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 actin, 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, implementing the European Community Convention on the
Law Applicable to Contractual Obligations (1980), provides that
the law which governs the essential validity of a contract is to
govern "the various ways of extinguishing obligations, and
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prescription and limitation of actions". In 1982 the Law
Commission concluded that "there is a clear case for the reform
of the present English rule" and their recommendations formed
the basis of the Foreign Limitation Periods Act 1984.
The general principle of the 1984 Act abandons the common law
approach which favoured the application of the domestic law of
limitation. Instead, the English court is to apply the law which
governs the substantive issue according to English choice of law
rules, and this new approach is applied to both actions and
arbitrations in England.