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SUPREME COURT OF INDIA
DEEPAK GUPTA, ANIRUDDHA BOSE, JJ.
Bank of Baroda – Petitioner
Versus
Kotak Mahindra Bank Ltd. – Respondent
Civil Appeal No.2175 of 2020 @ Special Leave Petition (Civil) No.8123 of 2015
Decided On : 17-03-2020
(a) Code of Civil Procedure, 1908 - Section 44A - Applies only to money decrees. (Para 10)
(b) Limitation Act, 1963 - Section 2 and 4 - Word ‘application’ includes an application for execution of a decree, even a foreign decree - Delay and laches applicable to writ proceedings distinguished. (Para 13)
(c) Code of Civil Procedure, 1908 - Order XXI Rule 3 and section 44A - Cause of action - A concept relating to civil suits and not to execution petitions - A decree becomes enforceable the day it is passed - Filing of an application under Section 44A will not create a fresh period for enforcing the decree - Limitation starts from the date of passing of decree. (Para 15, 17)
(d) Code of Civil Procedure, 1908 - Section 44A - Foreign decree must be treated as an Indian decree as on the date it was passed. (Para 18)
(e) Code of Civil Procedure, 1908 - Section 44A - Section 44A only enables District Court to execute the foreign decree as if it had been passed by an Indian court - It does not deal with period of limitation. (Para 19, 20)
(e) Interpretation of statute - Limitation law - Nature - In India, as in common law, law of limitation normally taken as procedural law - Change in view - Limitation law leading to extinguishment of rights or remedies - Cannot be termed as a procedural law - almost all common law countries also not treating law of limitation as procedural law. (Para 27, 31)
(f) Code of Civil Procedure, 1908 - Section 44A - 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. (Para 30, 35)
(g) Limitation act, 1963 - Article 136 - Deals only with decrees passed by Indian courts, unlike Article 39 which specifically deals with dishonoured foreign bills and Article 101 which deals with suits filed upon a judgment including a foreign judgment. (Para 36, 37)
(h) Code of Civil Procedure, 1908 - Section 44A r/w Order XXI rule 11 and Article 137, Limitation Act, 1963 - No foreign decree can be executed unless a certified copy of the decree, and, the certificate along with an application in terms of subsection (2) is filed - Such application would be covered by Article 137 - Applicable limitation would be 3 years. (Para 38, 39)
(i) Code of Civil Procedure, 1908 - Section 44A r/w Order XXI rule 11 and Article 137, Limitation Act, 1963 - execution of foreign decree - Commencement of limitation - In case no step is taken for execution in cause country - 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. (Para 40)
(j) Code of Civil Procedure, 1908 - Section 44A r/w Order XXI rule 11 and Article 137, Limitation Act, 1963 - Execution of foreign decree - Commencement of limitation - In case steps are taken for execution in cause country and execution is not fully satisfied - Application for execution can be filed in India within a period of 3 years from the finalisation of the execution proceedings in the cause country. (Para 41, 43)
Facts of the case:
“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.
The appellant bank filed an execution petition 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 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. The trial court dismissed the execution petition as time barred holding that Article 136 of the Limitation Act, 1963 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 upheld the view of the trial court.
Finding of the Court:
In case no step is taken for execution in cause country, 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 steps are taken for execution in cause country and execution is not fully satisfied, application for execution can be filed in India within a period of 3 years from the finalisation of the execution proceedings in the cause country.
Result: Appeal dismissed.
JUDGMENT :
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.
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 Indi
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