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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,

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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

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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.

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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

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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

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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.

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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

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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

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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

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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-

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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 332 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

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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

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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. 335