Report No. 193
As we are dealing with section 11 in detail, we shall extract it once again:
"Sec.11: Suits on contracts entered into outside the territories to which the Act extends: (1) Suits instituted in the territories to which this Act extends on contracts entered into in the State of Jammu and Kashmir or in a foreign country shall be subject to the rules of limitation contained in this Act.
(2) No rule of limitation in force in the State of Jammu and Kashmir or in a foreign country shall be a defence to a suit instituted in the said territories on a contract entered into in that State or in a foreign country unless -
(a) the rule has extinguished the contract; and
(b) the parties were domiciled in that State or in the foreign country during the period prescribed by such rule."
It will be seen that section 11 requires the provisions of the Indian Limitation Act, 1963 to be applied in cases where a suit is filed in India in respect of a cause of action on a contract entered into in a foreign country or Jammu and Kashmir. The only exception contained in subsection (2) is that the foreign law will apply only if it has extinguished the contract and another condition is that the parties were domiciled in the foreign country during the period prescribed by the law of the foreign country.
In the commentary on the old Limitation Act of 1908 by U.N. Mitra of 1949 edited by Prof. S. Venkataraman, it is stated that the section 11 was based on the principles laid down in English cases. According to English law, remedies, as distinguished from rights, are to be pursued according to the law of the place where the action is instituted. (Darby and Bosanquet, 2nd Ed, pp.15, 58, 59) The reason for the rule is as stated in Huber v. Steiner, (1835) 2 Bing (NC) 202 which has been referred to in Chapter I.
That decision was cited with approval by the Privy Council in Ruckmaboye v. Lulloobhoy Mottichand, (1835) 5 Moore's Ind App. 234 (268) where it was stated as follows: "Courts of law being instituted by every nation for its own convenience, the nature of the remedies available therein and the time and modes of proceeding therein are regulated by the nation's own views, of what is just and proper and expedient and it is not obliged out of any comity to the countries to depart (in the matter of procedure) from its own opinions of what is just and proper and expedient".
The principle contained in section 11 based on the previous state of English law in Commonwealth countries has, as stated in the previous chapters, undergone a revolutionary change bringing the law in common law countries on par with the law in civil law countries whereby limitation law of a foreign country is treated as substantive law and results in extinguishing the right itself and not merely the judicial remedy and such law has to be applied by the forum countries in preference to the law of limitation in the forum country which may, except for transnational cases, still remain procedural.
So far as the exception with two clauses (a) and (b) stated in section 11 (2) under the 1908 and 1963 Acts is concerned, it is stated by Prof. Venkataraman that it was drawn from Story's Conflict of Laws, section 582 where the twin conditions now mentioned in section 11(2) were stated. We have already referred in the previous Chapters to the changes in law in UK, Australia and other countries and nowhere we find the second condition laid down in section 11(2)(b) that, "and the parties were domiciled in that State or in the foreign country during the period prescribed by such rule".
As rightly pointed by Sri V.R. Manohar and W.W. Chitaley in their Commentary (6th Ed, 1991) at p.280 on the Limitation Act, 1963, this condition in section 11(2)(b) does not fit into the present times and requires to be deleted. The authors say:
"Moreover, the insistence on domicile of the parties (section 11(2)(b)) in the Foreign State as a necessary prerequisite to the availability of the defence based on foreign period of limitation, appears, in the present submission to be at odds with contemporary realities of our times which have witnessed an enormous expansion in the growth of international trade with advances in means of communication and transport. Further, the claim of domicile being used as a connecting factor for the ascertainment of the applicable (law) to a contract of a purely commercial nature has little merit to commend it. It is hoped that when the revision of the law is undertaken, this and the other aspects discussed earlier will receive due attention."
We agree that for the reasons stated by the authors, section 11(2)(b) condition must be deleted.
The Full Bench decision of the Madras High Court in Muthukanni v. Andappa, (AIR 1955 Mad 96) considered section 11 of the 1908 Act. No doubt it was also concerned with section 13 of that Act, which corresponds to section 15(5) of the 1963 Act. Sec. 13 of the old Act stated that "In computing the period of limitation for any suit, the time during which the defendant has been absent from the Provinces of India and from the territories beyond the Provinces of India under the administration of the Central Government, shall be excluded". Rajamannar CJ, in the course of discussion of the law under section 11 referred to the general principle as follows:
"the general principle is also well-settled that in regard to such actions all matters of procedure are governed by the 'lex fori', the law of the country in which the action is brought. Statutes of limitation, unless affecting immovable property, in so far as they bar the remedy of a plaintiff, are always considered to be statutes relating to procedure. So, the statute of limitation in force in the country in which the action is brought, will be applicable and not the statute of limitation which might obtain in the place where the cause of action arose, or the contract was made.
There is, however, one exception to this general rule, namely, where, by the proper law governing the transaction in respect of which an action is brought, the statute of limitation in force in the country in which the cause of action arose or the contract was made operates not only to bar the remedy but also to extinguish that right, the rules of limitation in the country in which the suit is brought have no application. (Halsbury's Laws of England, Vol VI, p.355)"
Reference was also made to Huber v. Steiner, (1835) 2 Bing NC 202 and to Ruckmaboye v. Lullabhoy Mottichand, (1851-54) 5 Moore's Ind App 234. The Madras High Court also referred to sec. 11(2)(b).
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