PETITIONER: MIRZA ALI AKBAR KASHANI Vs. RESPONDENT: UNITED ARAB REPUBLIC AND ANR. DATE OF JUDGMENT: 05/08/1965 BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. HIDAYATULLAH, M. SHAH, J.C. SIKRI, S.M. CITATION: 1966 AIR 230 1966 SCR (1) 319 CITATOR INFO : R 1972 SC 202 (8) D 1987 SC 9 (17) F 1991 SC 814 (2) ACT: Code of Civil Procedure, 1908, s. 86(1)-Suit against foreign State Consent of Central Government whether necessary -'Ruler of a foreign State' whether distinguishable from foreign State for the purpose of the section. HEADNOTE: The appellant filed a suit for breach of contract against the respondents on the Original Side of the Calcutta High Court. The first respondent was the United Arab Republic while the second respondent was one of its departments. The suit was filed without obtaining the consent of the Central Government under s. 86(1) of the Code of Civil Procedure, but the High Court granted leave to the appellant under cl. 12 of the Letters Patent. The respondents entered appearance but claimed that leave under cl. 12 of the Letters Patent be cancelled and the plaint be rejected. Their contention was that the suit was incompetent inasmuch as the suit was in substance against the Ruler of the United Arab Republic and consent of the Central Government under s. 86(1) was necessary before it was filed. They also urged that respondent no. 1 was a sovereign State and as such it enjoyed absolute immunity from being sued under the Rules of International Law adopted and applied by the municipal law of India. The trial court did not accept either of these contentions and passed a decree in favour of the appellant. The respondents appealed under the Letters Patent to the Division Bench of the High Court. The Division Bench agreed with the trial court that s. 86(1) wag not applicable to the appellant's suit because the said section referred to the Ruler of a foreign State and not to a foreign State as such. In This connection the High Court observed that only in the case of a monarchical State could the Ruler be taken to be identical with the State. However, on the alternative plea of the respondent based on immunity under International Law, the Division Bench differed from the trial court and decided in favour of the respondents. Consequently the appellant's plaint stood rejected. With certificate from 'the High Court the appellant came to this Court. HELD : (i) As a matter of procedure it would not be permissible to draw a sharp distinction between the Ruler of a foreign State and a foreign State of which he is the Ruler. This is apparent from the fact that s. 87 provides that even when a Ruler of a State sues or is sued, the suit must be in the name of the State. It is also remarkable that though the heading of ss. 84-87B does not in terms refer to foreign States at all, s. 84 in terms empowers a foreign State to bring a suit in a competent court; obviously the Legislature did not think that the case of a foreign State would not be included under 'he heading of this group of sections. [328 A-D] (ii)Section 86 is a counterpart to s. 84. Whereas s. 84 confers a right on a foreign State to sue, s. 86(1) in substance imposes a liability on foreign States to be sued. The foreign State can sue, as laid down in the proviso to s. 84 to enforce a private right vested in the Ruler of such State 320 or in any officer of such State in his public capacity. By 'private right' in this context is meant rights which can be enforced in the municipal courts of a foreign State as distinguished from a political or territorial rights which must be settled under International Law by agreement between States. As a counterpart, s. 86(1) proceeds to prescribe a limited liability against foreign States. The first limitation is that such a suit cannot be instituted except with the consent of the Central Government. The second limitation is that the Central Government shall not give consent unless it appears that the case falls under one or the other cls. (a) to (d) of s. 86(2). Having provided for this limited liability to be sued the Legislature has taken care to save Ruler of a foreign State from arrest, except with the consent of the Central Government and has directed that no decree shall be executed against the property of any such Ruler; that is the effect of s. 86(3). What is exempted here is the separate property of the Ruler himself and not the property of the Ruler as head of the State. [332 B-H] HajonManick v. Bur Sing, II Cal. 17, referred to. (iii)When s. 86(i) refers to a Ruler of a foreign State, it refers to the Rulerin relation to the said State, and means the person who is for the time being recognised by the Central Government to be the head of that State. In view of the definition of 'Ruler' in s. 87 (1) (b) it is difficult to accept the argument that the expression 'the Ruler of a foreign State under s. 86(1) can take in cases only of Rulers of foreign States which are governed by a monarchical form of Government. In view of the definition, when s. 86(1) refers to Rulers of foreign State, it refers to Rulers of all foreign States whatever be their form of Government whether monarchical or republican. [330 H-331 A] Besides, on principle, there is no reason why it should be assumed that the Code of Civil Procedure always made a distinction between Rulers of foreign States governed by monarchical form of Government and those which were governed by Republican form of Government. The Legislature which framed the relevant provisions of the Code was aware that there were several States in which the monarchical form of Government did not prevail. It could not have been the intention of the framers of the Code of Civil Procedure that monarchical States should be liable to be sued under s. 86(1) subject to the consent of the Central Government in the municipal courts of India, whereas foreign States not so governed should fall outside s. 86(1) and thus be able to claim immunity under International Law. When s. 87(1) (b) was introduced in 1951 it must have been intended that the definition of 'Ruler' therein should include all heads of foreign States whatever their form of Government. [331 E-F] (iv)The effect of the provisions of s. 86(1) appears to be that it makes astatutory provision covering a field which would otherwise be coveredby the doctrine of immunity under International Law. Every sovereign State is competent to make its own laws in relation to the rights and liabilities of a foreign State to be sued within its own municipal courts. Just as an independent sovereign State may statutorily provide for its own rights and liabilities to sue and be sued, so can it provide for the rights and liabilities of foreign States to sue and be sued in its municipal courts. That being so it would be legitimate to hold that the effect of s. 86(1) is to modify to a certain extent the doctrine of immunity recognised by International Law. This section provides that foreign States can be sued within the municipal courts of India with the consent of the Central Government and when such consent is granted as required by s. 86(1), it would not be open to a foreign State to rely on the doctrine of immunity under International Law because the municipal courts in India would be 321 bound by the statutory provisions, such as those contained in the Code of Civil Procedure. [333 B-E] Chandulal Khushalji v. Awad Bin Umar Sultan Nawaz Jung Bahadur, I.L.R. 21 Dom. 351 referred to. (v)Section 86(1) thus applies to cases where suits are brought against Rulers of foreign States and foreign States fall within its scope whatever be their form of Government. The Section applied to the present suit, and the consent of the Central Government not having been obtained before it was filed, the suit was barred. [334 B-C] [in view of the decision that s. 86(1) barred the suit, the Court did not find it necessary to deal with the question whether the respondents were justified in claiming absolute immunity under International Law.] [334 C] JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 220 of 1964.
Appeal from the judgment and order dated April 17, 1961 of
the Calcutta High Court in Appeal from Original Order No. 11
5 of 1960.
R.Chowdhury, S. Mukherjee and S. N. Mukherjee, for the
appellant.
B.Sen, V. A. Seyid Muhammad, P. K. Das and P. K. Bose for
the respondents.
The Judgment of the Court was delivered by
Gajendragadkar, C.J. This appeal arises out of a suit filed
by the appellant, Mirza Ali Akbar Kashani, against the two
respondents, the United Arab Republic, and the Ministry of
Economy, Supplies, Importation Department of the Republic of
Egypt at Cairo, on the Original Side of the Calcutta High
Court. By his plaint, the appellant claimed to recover from
the respondents damages assessed at Rs. 6,07,346 for breach
of contract. According to the appellant, the contract in
question was made between the parties on March 27, 1958.
Respondent No. 2 which was a party to the contract had
agreed to buy tea from the appellant upon certain terms and
conditions; one of these was that respondent No. 2 would not
place any further orders in India for purchase of tea with
anyone else during the tenure of the contract and that it
would, in every case, give the appellant the benefit of the
first refusal for respondent No. 2’s additional
requirements. The appellant alleged that during the tenure
of the contract, the respondents had wrongfully placed an
order for the supply of tea with a third party without
giving the appellant a chance to comply with the said
requirement. That is how the respondents had committed a
breach of a material term of the contract.
322
Formerly, the Republic of Egypt and the Republic of Syria
were two independent sovereign States. They, however,
merged and formed a new Sovereign State on February 22,
1958. This new sovereign State is known as the United Arab
Republic and is referred as respondent No. 1 in the present
appeal. This new State has been recognised by the
Government of India. Respondent No. 2 has been working as a
department of respondent No. 1 and is a part and parcel
thereof. The present suit was instituted on August 10,
1959. It is common ground that the appellant did not obtain
the consent of the Central Government to the institution of
the suit under s. 86 of the Code of Civil Procedure. The
appellant, however, applied for leave under Clause 12 of the
Letters Patent in view of the fact that a part of the cause
of action had arisen within the jurisdiction of the Calcutta
High Court. This leave was granted to the appellant by the
learned trial Judge.
On December 3, 1959, the respondents entered appearance in
the suit; and on December 17, 1959, they applied for an
order that the leave granted under Clause 12 of the Letters
Patent should be revoked, the plaint should be rejected and
further proceedings in the suit should be stayed. According
to the respondents, the trial Court had no jurisdiction to
entertain the suit inasmuch as the President of the United
Arab Republic was its Ruler and the suit was, in reality,
and in substance, a suit against him and as such, it was
barred under S. 86 of the Code. It was further averred on
their behalf that no part of the alleged cause of action had
arisen within the jurisdiction of the Court; and so, leave
could not be granted under Clause 12. At the hearing of
this petition, the respondents were allowed to urge an
additional ground in support of their plea that the leave
should be revoked; they urged that respondent No. 1 was a
foreign sovereign State and as such it enjoyed absolute
immunity from being sued in the trial Court under the Rules
of International Law as adopted and applied by the municipal
law of India.
These pleas were controverted by the appellant, It was urged
that S. 86 of the Code was not a bar to the present suit, as
the said section created a bar only against a Ruler of a
foreign State and the present suit clearly did not fall in
that category. According to the appellant, the immunity
from being sued without the sanction of the Central
Government to which s. 86 of the Code referred could not be
invoked by a foreign State such as respondent No. 1. The
appellant also urged that in view of the fact that the
transaction which has given rise to the present suit has
nothing to do with the governmental functions of respondent
No. 1, no immunity
323
could be claimed by the respondents under the doctrine of
International Law. The appellant further contended that by
appearing in the present proceedings and by filing pleas
thereafter, the respondents had submitted to the
jurisdiction of the Court and had waived their objection to
its jurisdiction.
The learned trial Judge held that s. 86 did not bar the
present suit. He accepted the contention of the appellant
that that bar could be invoked only against the Ruler of a
foreign State and not against respondent No. 1 which was an
independent sovereign State. On the question of the plea
raised by the respondents under International Law, the trial
Judge held that having regard to the nature of the
transaction which has given rise to the present suit, the
plea of immunity raised by the respondents cannot be
sustained. He also found against the respondents on the
question of waiver. In the result, the application made by
the respondents for revoking leave was dismissed by the
trial Judge.
The respondents then took the matter before the Court of’
Appeal of the Calcutta High Court under the Letters Patent.
Both the learned Judges who constituted the Court of Appeal
have upheld the finding of the trial Judge that s. 86 of the
Code does not create a bar against the present suit. They
have, however, reversed the trial Judge’s conclusions on the
question of immunity claimed by the respondents under
International Law as well as on the question of waiver.
They have held that it was not shown that the application
made by the respondents challenging the jurisdiction of the
trial Judge to entertain the suit could be reasonably
construed as submission to the jurisdiction of the Court by
them; and they have come to the conclusion that the doctrine
of International Law which recognises the absolute immunity
of sovereign independent States from being sued in foreign
courts created a bar against the present suit. In the
result, the appeal preferred by the respondents has been
allowed, the order passed by the trial Judge has been set
aside, and the plaint filed by the appellant has been
rejected under prayer (b) of the Master’s Summons. The
appellant has applied for and obtained a certificate from
the Court of Appeal and it is with the said certificate that
he has come to this Court in appeal.
Mr. R. Chaudhry for the appellant has contended that the
view taken by the Court of Appeal about the scope and effect
of the doctrine of immunity on which the respondents relied
is erroneous in law. In support of his argument, he has
urged that the trend of recent decisions and the tendency of
the development of Inter-
324
national Law in recent times indicate that the doctrine of
immunity in question can no longer be regarded as an
absolute and unqualified doctrine. He suggests that in
modem times, States enter into commercial transactions and
it would be inappropriate to allow such commercial
transactions the protection of the doctrine of immunity of
sovereign States from being sued in foreign countries. In
support of his argument, Mr. Chaudhry has very strongly
relied on the observations made by H. Lauterpacht who has
,edited the eighth edition of Oppenheim’s International Law.
Says Editor Lauterpacht, “The grant of immunity from suit
amounts in -effect to a denial of a legal remedy in respect
of what may be .a valid legal claim; as such, immunity is
open to objection. The latter circumstance provides some
explanation of the challenge to -which it has been
increasingly exposed-in addition to the circumstance that
the vast expansion of activities of the modem State in the
economic sphere has tended to render unworkable a rule which
grants to the State operating as a trader a privileged
position as compared with private traders. Most States,
including the United States, have now abandoned or are in
the process of abandoning the rule of absolute immunity of
foreign States with regard to what is usually described as
acts of a private law nature. The position in this respect
in Great Britain must be regarded as fluid” (p. 273).
Even Dicey in his Conflict of Laws while enunciating, Rule
17 in relation to such immunity in unqualified form, has
made some comment to which Mr. Chaudhry has invited our
attention. It is true that Rule 17 says, inter alia, that
the Court has no jurisdiction to entertain an action or
other proceeding against any foreign State, or the head of
government or any ,department of the government of any
foreign State. Commenting on this rule, the learned author
observes that “the immunity is derived ultimately from the
rules of Public International Law and from the maxim of that
law, par in parem non habet imperium. The relevant rule of
Public International Law has become part of English law. It
is not impossible, however, that English law goes further
than the international legal system demands in this regard”.
Then the learned author subjects the English decisions to a
close analysis and concludes that it may well be that the
system of international law as a whole is moving towards a
“functional” concept of jurisdictional immunities which
would confine their scope to matters within the field of
activity conceived as belonging essentially to a person of
that system of whatsoever category(1).
(1)Dicey’s Conflict of Laws, 7th Ed. pp. 132-33.
325
Mr. Chaudhry naturally lays emphasis on these observations
of Dicey. He has conceded that the general consensus of
opinion as disclosed in the English decisions bearing on the
point is not in his favour, though the voice of dissent
raised by Lord Denning in Rahimtolia v. Nizam of
Hyderabad(1) distinctly supports Mr. Chaudhry’s plea. That,
in substance, is how Mr. Chaudhry has attempted to present
his case on the interesting question about the immunity of
sovereign States under International Law.
Whilst we were hearing Mr. Chaudhry on this point, we
enquired from him whether be supported the finding of the
courts below that the present suit was not barred under s.
86 of the Code, and he contended that his case was that that
finding was clearly right and the present appeal would have
to be dealt with on the footing that s. 86 created no
difficulty against the appellant. Mr. Chaudhry did not
dispute the correctness of the finding recorded by the Court
of Appeal on the question of waiver.
Mr. B. Sen who appeared for the respondents, however, urged
that he wanted to challenge the correctness of the finding
recorded by the Calcutta High Court as to the applicability
of s. 86 of the Code. He conceded that the trial Judge as
well as the two learned Judges who heard the Letters Patent
Appeal had agreed in holding that s. 86 was not a bar
against the present suit; but Mr. Sen’s argument was that
the said finding was plainly inconsistent with the true
scope and effect of s. 86. He also urged that the view
taken by the Court of Appeal as to the applicability of the
doctrine of immunity under International Law was right.
During the course of the hearing of this appeal, it thus
became clear that two questions fall to be considered by us;
the first is in relation to the application of s. 86 of the
Code; and the second in regard to the scope and effect of
the doctrine of immunity under International Law.
Logically, the effect of s. 86 has to be considered first,
because it is common ground that if we were to hold that s.
86 was a bar to the present suit, then the interesting point
about immunity under International Law may not have to be
considered. The appeal would, in that view, be liable to be
dismissed on the ground that the suit was barred by s. 86.
After hearing both Mir. Chaudhry and Mr. Sen, we have come
to the conclusion that the learned Judges of the Calcutta
High Court were, with respect, in error in holding that s.
86 does not create a bar against the present suit. That
being our view, we do not propose to consider whether the
Court of Appeal was right in
(1) [1959] A.C. 379.
326
upholding the respondents’ plea of absolute immunity under
International Law. Let us, therefore, deal with the problem
raised under s. 86 of the Code.
The relevant provisions are to be found in sections 83-87B
of the Code. The heading of these provisions is “Suits by
aliens and by or against foreign Rulers, Ambassadors and
Envoys”. The present sections have been introduced by s. 12
of the Code of Civil Procedure (Amendment) Act, 1951 (No.
11 of 1951). Prior to the amendment, the relevant sections
were 83-87. As a result of the amendment, cases of the
Rulers of former Indian States are now dealt with by s. 87B,
and the remaining provisions deal with foreign States and
Rulers of foreign States. It is a matter of history that
the Rulers of Indian States who could claim the benefit of
the provisions contained in sections 84 and 86 under the
Code of 1908 have ceased to be Rulers and are now entitled
to be described as Rulers of former Indian States. That is
why a specific and separate provision has been made in
regard to Rulers of former Indian States by s. 87B. That,
broadly stated, is the main distinction between the schemes
of earlier sections 83-87 and the present sections 83-87B.
The learned Judges of the Calcutta High Court who have
repelled the respondents’ contention that the present suit
is barred under s. 86 of the Code, appear to have taken the
view that s. 86(1)refers to Ruler of a foreign State and
not to a foreign State assuch. We will presently cite
the relevant sections and construe them; but, for the
present, we are indicating the main ground on which the
decision of the learned Judges is founded. Section 86(1)
says that no Ruler may be sued except with the consent of
the Central Government; and the learned Judges thought that
a Ruler must be distinguished as from a State and s. 86(1)
cannot be extended to a case of the State. The reference to
a Ruler made by s. 86(1) was contrasted with the reference
to a foreign State made by s. 84; and this contrast was
pressed into service in support of the conclusion that s. 86
cannot be invoked against a foreign State. Similarly, s.
86(3) grants exemption to a Ruler from arrest except with
the consent of the Central Government. A similar argument
is based on this provision to take the case of a foreign
State outside the purview of s. 86. Likewise, s. 85 refers
to a Ruler while authorising the Central Government to
appoint any person to act on behalf of such Ruler, and it is
said that this provision also brings out the fact that the
Ruler of a foreign State is treated as apart from the State
itself.
317
It appears from the judgments of the learned Judges that
they were prepared to concede that in regard to a State
which is governed by a monarchical form of Government, it
would not be permissible to make a distinction between the
State as such and its Ruler; and so, it was thought that in
regard to a monarchical State, s. 86 may conceivably apply,
though the words used in s. 86(1) do not, in terms, refer to
a State. On this view, the court of Appeal naturally
considered the question about the immunity of the
respondents under the provisions of International Law. The
point which arises for our decision thus lies within a
narrow compass; was the Calcutta High Court right in holding
that the ?resent suit does not fall under the purview of s.
86(1)? It is clear that if the answer to this question is
in the negative, the suit would be bad because it has been
filed without the consent of the Central Government.
The decision of this question depends primarily on the con-
struction of s. 86(1) itself; but before construing the said
section, it is necessary to examine s. 84. The present s.
84 reads thus:-
“A foreign State may sue in any competent
court : Provided that the object of the suit
is to enforce a private right vested in the
Ruler of such State or in any officer of such
State in his public capacity”.
The predecessor of this section in the Code of 1882 was s.
431 it read thus :-
“A foreign State may sue in the Courts of
British India, provided that-
(a) it has been recognised by Her Majesty or
the Governor-General in Council, and
(b) the object of the suit is to enforce the
private rights of the head or of the subjects
of the foreign State.
The Court shall take judicial notice of the
fact that foreign State has not been
recognised by Her Majesty or by the Governor-
General in Council.”
1908, s. 84(1) took the place of s. 431. In enacting this
section, an amendment was made in the structure of the
section and two provisos were added to it. We will
presently refer to the purpose which was intended to be
served by the second proviso.
It is plain that s. 84 empowers a foreign State to sue. In
other words, it confers a right on the foreign State to
bring a suit,
328
whereas s. 86 imposes a liability or obligation on the Ruler
of a foreign State to be sued with consent of the Central
Government, It is remarkable that though the heading of
these sections does not in terms refer to foreign States at
all, s. 84 in terms empowers a foreign State to bring a suit
in a competent Court. It is true that too much emphasis
cannot be placed on the significance of the heading of the
sections; but, on the other hand, its relevance cannot be
disputed; and so, it seems to us that the Legislature did
not think that the case of a foreign State would not be
included under the heading of this group of sections.
In this connection, it is necessary to bear in mind that
ever when the Ruler of a State sues or is sued, the suit has
to be in the name of the State; that is the effect of the
provision of S. 87, so that it may be legitimate to infer
that the effect of reading sections 84, 86 and 87 together
is that a suit would be in the name of the State, whether it
is a suit filed by a foreign State under s. 84, or is a suit
against the Ruler of a foreign State under s. 86 As a matter
of procedure, it would not be permissible to draw a sharp
distinction between the Ruler of a foreign State and a
foreign State of which he is the Ruler. For the purpose of
procedure, in every case the suit has to be in the name of a
State. That is another factor which cannot be ignored.
Then in regard to the scope of the suit which may be filed
by a foreign State under s. 84, the proviso makes it clear
that the suit which can be filed by a foreign State must be
to enforce a private right vested in the Ruler of such State
or in any office. -of such State in his public capacity. It
will be recalled that s. 431(b) of the Code of 1882 had
provided that the object of the suit which could be filed
under s. 431 should be to enforce the private rights of the
head or of the subjects of the foreign State. It appears
that this clause gave rise to some doubt as to whether a
suit could be brought by a foreign State in respect of the
private rights of the subjects of that State; and in order
to remove the said doubt, the Code of 1908 inserted the
second proviso to s. 84(1) which took the place of s. 431 of
the Code of 1882. This proviso made it clear that the
object of litigation by a foreign State cannot be to enforce
the right vesting in subject as such as a private subject;
it must be the enforcement of a private right vested in the
head of a State or in any office of such State in his public
capacity. In other words, the suit which can be filed under
s. 84 and which could have been filch under s. 431 of the
Code of 1882, must relate to a private right. vested in the
head of the State or of the subjects meaning some
329
public officers of the said State. The private right
properly so called of an individual as distinguished from
the private right of the State, was never intended to be the
subject-matter of a suit. by a foreign State under the Code
of Civil Procedure at any stage.
That takes us to the question as to what is the true meaning
of the words “private rights”. In interpreting the words
“private rights”, it is necessary to bear in mind the fact
that the suit is by a foreign State; and the private rights
of the State must, in the context, be distinguished from
political rights. The contrast is not between private
rights or individual rights as opposed to those of the body
politic : the contrast is between private rights of the
State as distinguished from its political or territorial
rights. It is plain that all rights claimed by a foreign
State which are political and teritorial in character can be
settled under International Law by agreement between one
State and another. They cannot be the; subject-matter of a
suit in the municipal courts of a foreign State. Thus, the
private right to which the proviso refers is, on them
ultimate analysis, the right vesting in the State; it may
vest in the Ruler of a State or in any officer of such State
in his public capacity; but it is a right which really and
in substance vests in, the State. It is in respect of such
a right that a foreign State is authorised to bring a suit
under s. 84.
In Hajon Manick v. Bur Sing(1) a Division Bench of the
Calcutta High Court had occasion to consider the denotation
of the words “private rights” spoken of in s. 431, clause
(b) of the Code of Civil Procedure, 1882, and it was held
that the said words do not mean individual rights as opposed
to those of the body politic or State, but those private
rights of the State which must be enforced in a Court of
Justice, as distinguished from its political or territorial
rights, which must, from their very nature, be made the
subject of arrangement between one State and another. They
are rights which may be enforced by a foreign State against
private individuals as distinguished from rights which one
State in its political capacity may have as against another
State in its political capacity.
That takes us to s. 86. Section 86(1) with which we are
directly concerned reads thus :-
“No Ruler of a foreign State may be sued in
any court otherwise competent to try the suit
except with the consent of the Central
Government certified in writing by a Secretary
to that Government.”
(1)11 Cal. 17.
330
There is a proviso to this section with which we are not
concerned in the present appeal. Section 86(2) deals with
the question of consent which the Central Government is
authorised to give, and it lays down how the consent can be
given and also provides for cases in which such consent
shall not be given. Section 86(3) refers to the question of
arrest and provides that no Ruler of a foreign State shall
be arrested except with the consent of the Central
Government and no decree shall be executed against the
property of any such Ruler. Section 86(4) extends the
preceding provisions of s. 86 to the three categories of
Officers specified in clauses (a), (b) and (c).
Section 86(1) as it stood prior to the amendment of 195 1,
read thus :-
“Any such Prince or Chief, and any Ambassador
or Envoy of a foreign State, may, with the
consent of the Central Government, certified
by the signature of a Secretary to that
Government but not without such consent, be
sued in any competent Court.”
So far as the other provisions are concerned, there does not
appear to be any material change made by the Amending Act.
The form of the section and its structure have however been
altered.
Then follows s. 87 to which we have already referred. This
section provides that the Ruler of a foreign State may sue,
and shall be sued, in the name of his State. This provision
of the present section is substantially the same as in s. 87
which occurred in the Code of 1908. The said section
provided that a Sovereign Prince or Ruling Chief may sue,
and shall be sued, in the name of his State. This provision
naturally conforms to s. 86(1) as it then stood.
Section 87A(1) which has been added for the first time by
the Amending Act of 1951, prescribes the definitions of
“foreign State” and “Ruler”. Section 87A(1)(a) provides
that in this Part “foreign State” means any State outside
India which has been recognised by the Central Government;
and (b) “Ruler”, in relation to a foreign State, means the
person who is for the time being recognised by the Central
Government to be the head of that State.
Reverting then to S. 86, there can be no difficulty in
holding that when s. 86(1) refers to a Ruler of a foreign
State, it refers to the Ruler in relation to the said State,
and means the person who is for the time being recognised by
the Central Government to be
3 31
the head of that State. In view of the definition
prescribed by s. 8 7A (1) (b), it seems difficult to accept
the argument that the expression “the Ruler of a foreign
State” under s. 86(1) can take in cases only of Rulers of
foreign States which are governed by a monarchical form of
Government. In view of the definition of a foreign Ruler,
it is plain that when s. 86(1) refers to Rulers of foreign
States, it refers to Rulers of all foreign States whatever
be their form of Government. If the form of Government pre-
vailing in a foreign State is Republican, then the Ruler of
the said State would be the person who is recognised for the
time being by the Central Government to be the head of that
State. In other words, the definition of a Ruler clearly
and unambiguously shows that whoever is recognised as the
head of a foreign State would fall within the description of
Ruler of a foreign State under s. 86. That being so, we do
not think in reading s. 86(1), it would be permissible, to
import any terms of limitation; and unless some terms of
limitation are imported in construing s. 86(1), the argument
that the head of a Republican State is not a Ruler of that
State cannot be upheld.
Besides, on principle, it is not easy to understand why it
should be assumed that the Code of Civil Procedure always
made a distinction between Rulers of foreign States governed
by monarchical form of Government and those which were
governed by Republican form of Government. Both forms of
Government have been in existence for many years past, and
the Legislature which framed the relevant provisions of the
Code was aware that there are several States in which
monarchical form of Government does not prevail. Could it
have been the intention of the framers of the Code of Civil
Procedure that monarchical States should be liable to be
sued under s. 86(1), subject to the consent of the Central
Government, in the municipal courts of India, whereas
foreign States not so governed should fall outside s. 86(1)
and thus be able to claim the immunity under International
Law ? In our opinion, no valid ground has been suggested
why this question should be answered in the affirmative.
There is one more circumstance to which we may refer in this
connection. We have already noticed that while amending the
provisions, the Amending Act of 1951 has dealt with the
question of Rulers of former Indian States separately under
s. 87B, and having made some formal and some substantial
changes in the rest of the provisions, the Legislature has
introduced s’ 87A which is a definition section. At the
time when s. 87A(1)(b) defined “Ruler”, it must have been
plain to the Legislature that
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this definition would take in all heads of foreign States
whatever the form of government prevailing in them may be;
and so, it would not be unreasonable to hold that the object
of the definition was to make it clear that Rulers of
foreign States to which s. 86(1) applied would cover Rulers
of all foreign States, provided they satisfied the
requirements of the definition of s. 87A(1)(b).
Incidentally, the construction which we are inclined to
place on s. 86(1) is harmonious with the scheme of the Code
on this point. Section 84 authorises a foreign State to sue
in respect of the rights to which its proviso refers.
Having conferred the said right on foreign States, s. 86(1)
proceeds to prescribe a limited liability against foreign
States. The limitation on the liability of foreign States
to be sued is twofold. The first limitation is that such a
suit cannot be instituted except with the consent of the
Central Government certified in writing by a Secretary to
that Government. This requirement shows the anxiety of the
Legislature to save foreign States from frivolous or
unjustified claims. The second limitation is that the
Central Government shall not give consent unless it appears
to the Central Government that the case falls under one or
the other of clauses (a) to (d) of s. 86(2). In other
words, the Legislature has given sufficient guidance to the
Central Government to enable the said Government to decide
the question as to when consent should be given to a suit
being filed against the Ruler of a foreign State. Having
provided for this limited liability to be sued, the
Legislature has taken care to save the Ruler of a foreign
State from arrest, except with the consent of the Central
Government similarly certified and has directed that no
decree shall be executed against the property of any such
Ruler; that is the effect of s. 86(3).
It is true that this provision exempts the property of any
such Ruler from execution of any decree that may be passed
against a Ruler, and apparently, the High Court thought that
this tends to show that the Ruler of a foreign State within
the contemplation of s. 86(1) must be the Ruler himself and
not the State. In our opinion, this view is not well-
founded. The provision that a decree passed against the
Ruler of a foreign State shall not be executed against the
property of such Ruler, rather tends to show that what is
exempted is the separate property of the Ruler himself and
no*, the property of the Ruler as head of the State. A
distinction is made between the property belonging to the
State of which the Ruler is recognised to be the head, and
the property belonging to the Ruler individually. We are,
therefore, satisfied
333
that s. 86(1) applies to cases where suits are brought
against Rulers of foreign States and that foreign States
fall within its scope whatever be their form of Government.
We have already indicated that whenever a suit is intended
to be brought by or against the Ruler of a foreign State, it
has to be in the name of the State, and that is how the
present suit has, in fact, been filed.
The effect of the provisions of s. 86(1) appears to be that
it makes a statutory provision covering a field which would
otherwise be covered by the doctrine of immunity under
International Law. it is not disputed that every sovereign
State is competent to make its own laws in relation to the
rights and liabilities of foreign States to be sued within
its own municipal courts. Just as an independent sovereign
State may statutorily provide for its own rights and
liabilities to sue and be sued, so can it provide for the
rights and liabilities of foreign States to sue and be sued
in its municipal courts. That being so, it would be
legitimate to hold that the effect of s. 86(1) is to modify
to a certain extent the doctrine of immunity recognised by
International Law. This section provides that foreign
States can be sued within the municipal of India with the
consent of the Central Government and when such consent is
granted as required by s. 86(1), it would not be open to a
foreign State to rely on the doctrine of immunity under
International Law, because the municipal courts in India
would be bound by the statutory provisions, such as those
contained in the Code of Civil Procedure. In substance, s.
86(1) is not merely procedural; it is in a sense a counter-
part of s. 84. Whereas s. 84 confers a right on a foreign
State to sue, s. 86(1) in substance imposes a liability on
foreign States to be sued, though this liability is
circumscribed and safeguarded by the limitations prescribed
by it. That is the effect of s. 8 6 (1 ).
In Chandulal Khushalji v. Awed Ritz Umar Sultan Nawaz Jung
Bahadur(1), Strachey, J., had occasion to consider this
aspect of the matter in relation to the provisions of s. 433
of the Code of 1882. What s. 433 does, said the learned
Judge, “is to create a personal privilege for sovereign
princes and ruling chiefs and their ambassadors and envoy,,.
It is a modified form of the absolute privilege enjoyed by
independent sovereigns and their ambassadors in the Courts
in England, in accordance with the principles of
international law. The difference is that while in England
the privilege is unconditional, dependent only on the will
of the sovereign or his representative, in India it is
dependent upon the consent of the Governor General in
Council, which can
(1) I.L.R.21 Bom. 351 at pp. 371-2-
sup.CI/65—7
334
be given only under specified conditions. This modified or
conditional privilege is, however, based upon essentially
the same principle as the absolute privilege, the dignity
and independence of the ruler, which would be endangered by
allowing any person to sue him at pleasure, and the
political inconveniences and complications which would be
result’. We are inclined to think that this view correctly
represents the result of the provisions of S. 433 as much as
of those contained in s. 86(1).
In view of. our conclusion that s. 86(1) applies to the
present ,suit, it follows that in the absence of the consent
of the Central Government as prescribed by it, the suit
cannot be entertained. ,On that view of the matter, it is
not necessary to deal with the other question as to whether
the respondents were justified in claiming absolute immunity
under International Law. It is common ground that if there
is a specific statutory provision such as is contained in s.
86(1) which allows a suit to be filed against a foreign
State subject to certain conditions, it is the said
statutory provision that will govern the decision of the
question as to whether the suit has been properly filed or
not. In dealing with such a question, it is unnecessary to
travel beyond the provisions of the statute, because the
statute determines the competence of the suit.
The result is, the appeal fails and is dismissed. In view
of the fact that we are affirming the decision of the Court
of Appeal on ,a ground which did not succeed before that
Court, we direct that parties should bear their own costs
throughout.
Appeal dismissed.
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