The Plea of Limitation XIII: Cause Country v. Forum Country

We have used the expressions ‘cause country’, which will mean the country in which the decree was issued [England] and ‘forum country’, which would mean the country in which the decree is sought to be executed [India]. 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.

There is increasing interaction and interplay between the people across the globe. There are more and more international business deals being done. The view worldwide appears to be that the limitation law of the ‘cause country’ should be applied even in the ‘forum country’. 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.

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 decree 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 in a ‘forum country’.

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.

The 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, 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.

Hon’ble Justice Deepak Gupta, Bank of Baroda v. Kotak Mahindra Bank Ltd., [Civil Appeal No. 2175 of 2020].