Report No. 193
Chapter II
Section 11 of the Limitation Act (Suits on contracts entered into outside the territories to which the Act extends)
The Limitation Act, 1963 extends to the whole of India except the State of Jammu and Kashmir. But, section 11 makes special provision for 'suits on contracts entered into outside the territories to which the Act extends'.
Section 11 reads as follows:
"Section 11: (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."
Section 11(1) and 2(a) embody the principles in vogue in England at the time of passing of this Act in 1963. At that time, the law in England was that in respect of actions filed in England on the basis of contracts entered into abroad (i.e. outside England), the law of limitation being procedural, the English Law of Limitation applied and not the law of limitation of the country where the contract was entered into. There was, however, one significant exception, namely, that if the foreign law of limitation had itself extinguished the right in the foreign country, then English Courts would apply the foreign law and hold that the right was also extinguished even if the action was filed in England within the period of limitation prescribed by English law. This exception applied in India also.
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