# MIRZA ALI AKBAR KASHANI v. UNITED ARAB REPUBLIC AND ANR

- **Citation:** [1966] 1 S.C.R. 319
- **Court:** Supreme Court of India
- **Decided:** 1965-08-05
- **Case number:** Civil Appeal No. 220 of 1964
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah, J. C. Shah, S. M. Sikri
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mirza-ali-akbar-kashani-v-united-arab-republic-and-anr-3562
- **Pages:** 16

## Headnote

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
sec don.
,
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 Lnited Arab Republic while the second respondent was one of its department.:;.
The suit was filed without obtaining the consent of the Central
Government under s. 86( I) of the Code of Civil Procedure, but the High
Coun 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 \Vas in substance against the Ruler of the United Arab Republic and consent of the
Central Government under s. 86( l) 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) wa• not applicable to the appellant's suit because the
said section referr.zd to the Ruler of a foreign State and not to a foreign
State as such. In tllis 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.
Consequenily ttie
appdlant'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 Stale 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-Dl
(ii) Section 86 is a counterpart to s. 84.
Whereas s. 84 Cllnfers a
right on a foreign State to sue, s. 86( 1) in substance imposes a liabilitv on
foreien States to be sued. The forei.lm State can sue) a<; laid down •n the
proviso to s. 84 to enforce a private i'ight vested in the Ruler of such State
320
SUPllEME COURT llEPORTS
(1966] l S.C.R.
or in any officer of such Stale in his public capacity. By 'private right' in
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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.
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a counterpart, s. 86(1) proceeds to prescribe a limited liability agaimt
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 els. (a) to (d) of s. 86(2). Having
B
provided for this limited liability to be sued the Legislature has taken care
to save Ruler of a foreign Stale from arr"'t, except with the consent of the
Central Government and has directed that no decree shall be executed
aga

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MIRZA ALI AKBAR KASHANI
v.
UNITED ARAB REPUBLIC AND ANR.
August 5, 1965
[P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
M. HIDAYATULLAH, J. C. SHAH AND
S. M. SIKRI, JJ.]
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
sec don.
,
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 Lnited Arab Republic while the second respondent was one of its department.:;.
The suit was filed without obtaining the consent of the Central
Government under s. 86( I) of the Code of Civil Procedure, but the High
Coun 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 \Vas in substance against the Ruler of the United Arab Republic and consent of the
Central Government under s. 86( l) 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) wa• not applicable to the appellant's suit because the
said section referr.zd to the Ruler of a foreign State and not to a foreign
State as such. In tllis 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.
Consequenily ttie
appdlant'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 Stale 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-Dl
(ii) Section 86 is a counterpart to s. 84.
Whereas s. 84 Cllnfers a
right on a foreign State to sue, s. 86( 1) in substance imposes a liabilitv on
foreien States to be sued. The forei.lm State can sue) a<; laid down •n the
proviso to s. 84 to enforce a private i'ight vested in the Ruler of such State
320
SUPllEME COURT llEPORTS
(1966] l S.C.R.
or in any officer of such Stale in his public capacity. By 'private right' in
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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.
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a counterpart, s. 86(1) proceeds to prescribe a limited liability agaimt
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 els. (a) to (d) of s. 86(2). Having
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provided for this limited liability to be sued the Legislature has taken care
to save Ruler of a foreign Stale from arr"'t, 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
properly of the Ruler as head of the State. (332 B-H]
Hajon Ma11ick v. Bur Sing, 11 Cal. 17, referred to.
(iii) When s. 86( I) refers to a Ruler of a foreign State, it refers to
the Ruler in relation to the said State, and means tho person who is for the
time being rc-cogniscd by the Central Go,·ernment to be the head of that
Slate.
In view of the definition of 'Ruler' in s. 87 (I )(b) it is difficult
to accept the argument that the expr=ion 'the Ruler of a foreign Slate'
under s. 86( I) 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( I) refers to Rulers of foreign Stale, 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 ic; 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 GO\emmcnt. 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 tho 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( I) and thus be able to claim immunity under International
Law. When s. 87(1 )(b) was introduced in 1951 it must ha\'e been intended that the definition of 'Ruler' therein should include all beads of
foreign States whatever their form of Government. (331 E-F]
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(iv) The effect of the pro\'isions of •· 86(1) appears to he that it
makes a statutory provision covering a field which v.1ould otherwise be
covered by the doctrine of immunity under International
l~w. Every
sovereign State is competent to make 1ts own laws in relation to the rights
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and liabilities of a foreign State to be sued within its own municipal courts.
Just as an independent sovereign State may statutorily pro\ide for ils own
rights and liabilities to sue and be sued, so can it provide for tho rights
and liabilities of foreign States to sue and be sued in its municipal coum.
That being so it would be legitimate to hold that the effect of s, 86( I ) is
to modify to a certain extent the doctrine of immunity recognised by
International Law. This section provides that foreign States can be •ued
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within the municipal courts of India with the consent of the Central
Government and when such consent is granted as required by s. 86( 1l.
it would not be open to a foreign State to rely on the doctrine of immunity
under International Law bec:iu..: the municipal courts in India would be
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KASHANI v. U.A.R. (Gajendragadkar. C.J.)
321
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bound by the statutory provisi(J!ls, such as those contained in the Code of
Civil Procedure. [333 B-E)
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Chandulal Khushalji v. Awad Bin Umar Sultan Nawaz Jung Bahadur,
I.L.R. 21 Bom. 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( I) 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 CJ
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. 115
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
Gajendmgadkar, CJ. 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 bad agreed to buy tea from the appellallt
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
SUPREME
CO~T REPORTS
{I 966] l S.C.R.
Fonncrly, the Republic of Egypt and the Republic of Syria
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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
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and is a part and parcel thereof. The present suit was instituted
on August I 0, 1959. It is common ground that the appellant did
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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
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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
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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 pica that the leave should be revoked; they urged
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that respondent No. I 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
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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.
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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
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KASHANI v. U.A.R. ( Gajendragadkar, C.J.)
3 2 J
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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.
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The learned trial Judge held thats. 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
C 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.
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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 immuE nity 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
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sovereign independent States from being sued in foreign courts
created a bar against the present suit. In the result, the appeal
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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
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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
SUPRJ!Kl! COUllT REPORTS
( 1966) I S.C.R.
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 transactiom 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 enuncrntmg
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 ha~ 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 tho 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 conceivro as belonging
essentially to a person of that system of whatsoever category(').
(!) Dicey's C~nfli<t ~j Laws, 7th Ed. pp. 132-33.
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KASHANI v. U.A.R. (Gajendragadkar, C.J.)
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A 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 Rahimto!la v.
Nizam of Hyderabad( 1 )
distinctly supports
Mr. Chaudhry's plea. That, in substance, is how Mr. Chaudhry
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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 he supported the finding of the courts
below that tl1e present suit was not barred under s. 86 of the Code,
c 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.
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Mr. B. Sen who appeared for the resp0ndents, 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
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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
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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
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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 Mr. 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
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a bar against the present suit.
That being our view, we do not
propose to consider whether the Court of Appeal was right in
(I) (1958] A.C. 379 .
326
SUPllEME COU1T llEPORTS
[1966] l S.C.R.
upholding the respondents' plea of absolute immunity under Int~-
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national Law.
Let us, therefore, deal with the problem raised
under s. 86 of the Code.
The relevant provisions arc to be found in sections 83-878 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 bys. 12 of the Code of Civil
Procedure (Amendment) Act, 1951 (No. II 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 arc
now dealt with by s. 878, 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 arc now entitled to be described as Rulers of former Indian States. That is why a specific
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and separate provision has been made in regard to Rulers of D
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 83-878.
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 as such.
We will presently cite the relevant sections and
construe them; but, for the present, we arc indicating the main
ground on which the decision of the learned Judges is founded.
Section 86 (I) 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 hy 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 Rulet" 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.
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KASHANI v. U;A.il. (Gdjendragadkar, C.J.)
327
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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
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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
c present 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 construction of s. 86(1) itself; but before construing the said section,
D 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''.
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The predecessor of this section in the Code of 1882 was s. 431 ;.
it read thus :-
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"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
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foreign State has not been recognised by Her Majesty
or by the Governor-General in Council."
In 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
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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
SUPREME COURT REPORTS
(l'l66] I S.C.R.
whereas s. 86 imposes a liability or obligation on the Ruler of a
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foreign State to be sued with consent of the Central C overnment.
lt is remarkable that though the heading of these sections dOCli
not in terms refer to foreign States at all, s. 84 in term; empowers
a foreign State to bring a suit in a competent Court.
It is true
that too much emphasis cannot be placed on the sig1ificance of
the heading of the sections; but, on the other hand, i:s relevance
B
eannot be dL~puted; 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 miod that even
when the Ruler of a State sues or is sued, the suit has to be c
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 effec1 of rcadLDg
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 foreigr. 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 pcrmissib e to draw a
D
sharp distinction between the Ruler of a foreign State< nd a foreign
State of which he is the Ruler. For the purpose of rrocedure, 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
E
by a foreign State under s. 84, the proviso makes it dear 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 i 1 any officer
of such State in his public capacity.
It will be recalled that
s. 431 (b) of the Code of 1882 had provided that he object of
the suit which could be filed under s. 431 should he to enforce
F
the private rights of the head or of the subjects of the foreign
State.
It appears that this clause gave rise to somt: 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; ancl in order to
remove the said doubt, the Code of 1908 LDserte:l the second
proviso to s. 84(1) which took the place of s. 431 of the Code of
G
I 8 82.
This proviso made it clear that the object of litigation
by a foreign State cannot be to enforce the right vesting in a
subject as such as a private subject; it p:mst be tht: enforcement
of a private right vested in the head of a State or in any officer
of such State in his public capacity.
In other word~. the suit
which can be filed under s. 84 and which could have been filed
JI
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 ~neaning some
-
•
KASHANI v. U.A.R. (Gajendragadkar, C.J.)
329,
A public officers of the said State.
The private right properly socalled 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. aJIY
stage.
B
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
c
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
territorial 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.
n Thus, the private right to which the proviso refers is, on the·
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
E
authorised to bring a suit under s. 84.
In Hajon Manick v. Bur Sing(') 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
F 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
G its political capacity may have as against another State in its
political capacity.
H
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) II Cal. 17.
330
SUPllEME COURT REPORTS
[1166] I S.C.R.
There is a proviso to this section with which we are no concerned
in the present appeal.
Section 86(2) deals with the ~ucstion of
consent which the Central Government is authorised D give, and
it lays down how the consent can be given and also I 'rovides for
cases in which such consent shall not be given.
Sc ;tion 86(3)
refers to the question of arrest and provides that no Ruler of a
foreign State shall be arrested except with the con:;ent of the
Central Government and no decree shall be executed against the
property of any such Ruler.
Section 86(4) extends th~ preceding
provisions of s. 8 6 to the three categories of Officers specified in
clauses (a), (b) and (c).
Section 86(1) as it stood prior to the amendment of 1951, 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 doe~ not appear
to be any material change made by the Amending Act.
The form
of the section and its structure have however been alt< red.
A
B
c
D
Then follows s. 87 to which we have already ref1-rred.
This
E
section provides that the Ruler of a foreign State m 1y sue, and
shall be sued, in the name of his State. This provisior of the present section is substantially the same as in s. 87 whi~h 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( I) as it
F
then stood.
Section 8 7 A(I) which has been added for the first time by the
Amending Act of 1951, prescribes the definitions of "foreign
State" and "Ruler"'. Section 87 A(I )(a) provides that in this Part,
"foreign State"' means any State outside India whi< h has been
G
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 t cad of that
State.
Reverting then to s. 86, there can be no difficulty in holding
that whens. 86(1) refers to a Ruler of a foreign Stat<, 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
H
•
•
•
..
KASHANI v. U.A.R. (G(ljendragadkar, C.J.)
331
.A
the head of that State.
In view of the definition prescribed by
s. 87A(l)(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
B of foreign States, it refers to Rulers of all foreign States whatever
be their form of Government. If the form of Government prevailing 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
·C
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 eome
ternlS of limitation are imported in construing s. 86(1), the arguD ment 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
E Republican form of Government.
Both forms of Government
have been in existence for many years past, and the Legislature
whlch 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
F
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
·G
question should be answered in the affirmative.
There is one more circumstance to which we may refer in
this connection.
We have alrearly 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
H
the rest of the provisions, the Legislature has introduced s. 87 A
which is a definition section. At the time when s. 87A<1 )(b)
defined "Ruler", it must have been plain to the Legislature that
332
SUPREME COUllT REPORTS
[1966] l S.C.R.
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 tie 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(l)(b).
Incidentally, the construction which we are inclined to place
on ~. 86(1) is harmonious with the scheme of the Code on this
point.
Section 84 authorises a foreign State to sue in 1espect of
the rights to which its proviso refers.
Having conferrcc 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 limitatic•n is that
such a suit cannot be instituted except with the consc 1t of the
Central Government certified in writing by a Secretar:r to that
Government.
This requirement shows the anxiety of t 1e 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 Governmen: 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 c ecide the
question as to when consent should be given to a suit being filed
against the Ruler of a foreign State.
Having provide{: for thi!
limited liability to be sued, the Legislature has taker care to
save the Ruler of a foreign State from arrest, except witt the consent of the Central Government similarly certified and ha; directed
that no decree shall be e~ccuted 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 thi' tends to
show that the Ruler of a foreign State within the cont.,mplation
of s. 86(1) must he the Ruler himself and not the State
In our
opinion, this v;cw is not well-founded.
The provisicn that a
decree pas.sed again,! the Ruler of a foreign State shall not be
executed against the oropcrty of such Ruler, rather tend; to show
that what is exempted is the separate property of the Ruler himself and not th~ 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 he the head, and the property
belonging to the Ruler individually.
We arc, therefore, satisfied
A
B
•
c
D
F.
•
F
G
H
•
A
B
c
D
KASHANI V. U.A.R. (Gajendragadkar, C.l.)
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.