Supreme Court settles limitation on executing foreign decrees—law of reciprocating country applies; Bank of Baroda’s execution against Kotak barred
Case Name: Bank of Baroda v. Kotak Mahindra Bank Ltd.
Citation: 2020 INSC 299
Date of Order: 17 March 2020
Bench: Justice Deepak Gupta and Justice Aniruddha Bose
Held: The Supreme Court held that the limitation period for executing a foreign decree from a reciprocating country in India is governed by the limitation law of the cause country (i.e., where the decree was originally passed), not by the Indian Limitation Act. Section 44A of the CPC only provides the mechanism for execution it does not prescribe limitation. Since the English law prescribes a six-year limitation for enforcing decrees, Bank of Baroda’s execution filed after fourteen years was time-barred.
Summary: In 1995, the London High Court decreed in favour of Bank of Baroda against Vysya Bank (now Kotak Mahindra Bank) for USD 1.26 million. The decree attained finality but was not executed in the UK. Instead, Bank of Baroda filed an execution petition in Bengaluru in 2009 fourteen years later under Section 44A CPC, seeking enforcement of the foreign decree as that of an Indian court. The executing court and the Karnataka High Court rejected the petition as time-barred, applying Article 136 of the Limitation Act (12 years).
Before the Supreme Court, the bank argued that no limitation applied until it filed the petition under Section 44A, or that Article 136 should apply prospectively from that date. Rejecting this, the Court ruled that execution limitation runs from the date the decree becomes enforceable in the foreign country. Since English law (Limitation Act 1980, UK) prescribes a six-year period, the decree became unenforceable after February 2001. Section 44A merely allows execution “as if” it were an Indian decree it does not create a fresh period of limitation. The Court further clarified that Article 136 of the Indian Limitation Act applies only to decrees of Indian civil courts, while a foreign decree’s enforcement in India, if not covered by a specific article, would fall under Article 137 (three years) once the decree remains executable in its country of origin.
The Court aligned Indian law with global standards reflected in the UK Foreign Limitation Periods Act 1984 and Uniform Conflict of Laws Limitation Act 1982 (US) recognizing that limitation extinguishes substantive rights, not merely procedural remedies.
Decision: Appeal dismissed. The foreign decree was held barred by limitation, as the execution filed in India came after expiry of six years under English law. The Supreme Court affirmed that the limitation law of the reciprocating country governs execution in India, ensuring parity in international enforcement of decrees.