(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 on 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.