Crux:
Leave was granted. The Court ruled on the topic, “limitation for filing an application for execution of a foreign decree of a reciprocating country in India.”
Bench:
Deepak Gupta, Aniruddha Bose
Appellant:
Bank of Baroda
Respondent:
Kotak Mahindra Bank Ltd.
Issue
What is the limitation for filing an application for execution of a foreign decree of a reciprocating country in India?
Facts
- The predecessor of Kotak Mahindra Bank Ltd, Vysya Bank issued a letter of credit 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.
- Acting on the instructions of the Vysya Bank, the London branch of the appellant discounted the letter of credit for a sum of US $ 1,742,376.41 and payment was made to M/s Granada Worldwide Investment Company.
- A suit against Vysya Bank was filed for recovery of its dues in London.
- This suit was decreed by the High Court of Justice, Divisional Commercial Court of London.
- The decree passed was not challenged.
- After almost 14 years, the appellant bank filed an execution petition in India for execution of the same.
Appellant’s contentions
- No period of limitation for execution of a foreign decree passed in a reciprocating country is prescribed by the Act.
- Taking into account a list of dates, it was submitted that there was no delay in filing the execution petition. The appellant was actively pursuing the matter.
- It was further submitted that the cause of action for filing an execution petition arises only when a petition is filed under Section 44A of the Code because there is no period of limitation provided.
Respondent’s Contention
- The respondent submitted that the Law of Limitation of England would apply in this case.
- According to that, the limitation period provided is at 6 years.
- The alternative argument was that even if the Act were to apply, the limitation period for execution of a foreign decree would be determined as per Article 136 of the Act.
Relevant paragraphs: (paragraph 22, 23 and 35 of the original judgement)
- Article 136 and 137 of the limitation act has been followed in the case, which states as follows - 12 years for the execution of any decree other than the decree of mandatory injunction and 3 years for any other applications and for which no period of limitation is provided elsewhere in this division.
- As a result, the decree takes effect on the date it was passed, which in this case is 20.02.1995. If the restriction is six years, the execution petition should have been filed on or before February 20, 2001, and if the limitation is twelve years, the execution petition would still be blocked by limitation because it was filed in 2009.
Final Decision
- The appeal was dismissed and the Bench gave a decision to uphold the orders of both the Courts.
- The limitation period in India for enforcing a decree issued by a foreign court (from a reciprocating nation) shall be the same as the reciprocating foreign country's restriction period. Obviously, this is conditional on the decree being enforceable under Section 13 of the CPC.
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