TMI Blog1965 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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. 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 sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute 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 conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational 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 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 hist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents 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 notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 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 right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 substantiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler, 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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