Limitation period for execution of foreign decrees settled

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The Supreme Court recently had the opportunity to ascertain the limitation period applicable to the execution of foreign judgments in India, which was an issue that lower courts had been struggling to resolve until now.

In the Bank of Baroda v Kotak Mahindra Bank case, the Bank of Baroda filed a suit in 1993 against Vysya Bank (the predecessor of Kotak) in London for recovery of its dues. Thereafter, a decree for US$1.2 million was passed by the High Court of Justice, Queens Bench, Divisional Commercial Court of London, in 1995.

After a lapse of almost 14 years, the Bank of Baroda in 2009 filed an application under section 44A of the Code of Civil Procedure (CCP), 1908, for execution of the decree before the Additional City Civil & Session Judge, Bengaluru. The application was opposed by Kotak, mainly on the ground that the same had not been filed within the period of limitation. The Sessions Court dismissed the application petition, 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. The order was confirmed by Karnataka High Court.

In appeal, the following questions of law came up for the consideration of the Supreme Court:

  • Does section 44A of the CCP 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?
  • What is the period of limitation for executing a decree passed by a foreign court (from a reciprocating territory) in India?
  • From which date will the period of limitation run in relation to a foreign decree (passed in a reciprocating territory) sought to be executed in India?

On the first issue, the Supreme Court rejected the argument that there is no limitation period for the execution of foreign decree in India, while observing that the term “application”, in section 3 of the act, shall be deemed to include execution petitions. The period of limitation shall be governed by the act and not by section 44A of the CCP, since the latter provides only for the procedure to be followed for executing a foreign decree.

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