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2013 (2) TMI 340 - HC - Companies LawMaintainability of Suit of recovery on non obtaining of permission of the Union Government under Section 86 of the CPC - Recovery of dues together with interest based on a contract for carrying out the work of interior decoration at certain offices of the Appellant - Held that:- Section 86 of the CPC applies to a suit instituted against a corporate body which carries on trading or business activities so long as the ownership of the share capital vests in a foreign State. Where section 84 confers a right on a foreign State to sue, sec 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. 86(1) In deciding as to whether a particular foreign State is a foreign State for the purpose of Section 86 recognition de jure or de facto by the Union Government had the same consequence. Foreign companies carry on business in India. They bring investment, finance and trade. Indian companies carry on business abroad, taking with them investment and our enormous human resource base. The contractual and commercial obligations which they assume are governed by the discipline of the law. In their commercial and business operations such corporate entities cannot claim an immunity to civil actions. Qatar Airways carries on commercial airline operations. It brings and takes passengers and cargo to and from India. It operates offices, engages employees, solicits business and carries on activities of a commercial airline here, as abroad. The claim is founded on a purely contractual and commercial dealing between the Appellant and the Respondent. The Appellant is not a foreign State within the meaning of sub- Section (1) of Section 86. It has a distinct legal personality of its own which finds recognition in the contractual relationships into which it enters. Those contractual relationships occasioned by its business activities in India would be subject to the jurisdiction of a competent court in this country. For these reasons, the learned Single Judge was not in any error in holding that the suit was maintainable. The Union Government has been correct in its assertion that the question of permission of the Union Government did not arise and, as urged by ASG, that the provisions of Section 86 are not attracted. Appeal stand dismissed. On the request of Counsel appearing on behalf of the Appellant and in order to enable the Appellant to seek recourse to its remedies against this judgment continue the stay granted on 8 August 2012 for a further period of four weeks from today. In view of the dismissal of the Appeal, the Notice of Motion taken out in appeal does not survive.
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