(1) No 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:
Provided that a person may, as a tenant of immovable property, sue without such consent as aforesaid a foreign State from whom he holds or claims to hold the property.
(2) Such consent may be given with respect to a specified suit or to several specified suits or with respect to all suits of any specified class or classes, and may specify, in the case of any suit or class of suits, the court in which the foreign State may be sued, but it shall not be given, unless it appears to the Central Government that the foreign State:
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(a) Has instituted a suit in the court against the person desiring to sue it, or
(b) By itself or another, trades within the local limits of the jurisdiction of the court, or
(c) Is in possession of immovable property situate within those limits and is to be sued with reference to such property or for money charged thereon, or
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(d) Has expressly or impliedly waived the privilege accorded to it by this section.
(3) Except with the consent of the Central Government, certified in writing by a Secretary to that Government, no decree shall be executed against the property of any foreign State.
(4) The preceding provisions of this section shall apply in relation to—
(a) Any Ruler of a foreign State;
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(aa) Any Ambassador or Envoy of a foreign State;
(b) Any High Commissioner of a Commonwealth country; and
(c) Any such member of the staff of the foreign State or the staff or retinue of the Ambassador or Envoy of a foreign State or of the High Commissioner of a Commonwealth country as the Central Government may, by general or special order, specify in this behalf, as they apply in relation to a foreign State;
(5) The following persons shall not be arrested under this Code, namely:—
(a) Any Ruler of a foreign State;
(b) Any Ambassador or Envoy of a foreign State;
(c) Any High Commissioner of a Commonwealth country;
(d) Any such member of the staff of the foreign State or the staff or retinue of the Ruler, Ambassador or Envoy of a foreign State or of the High Commissioner of a Commonwealth country, as the Central Government may, by general or special order, specify in this behalf.
(6) Where a request is made to the Central Government for the grant of any consent referred to in sub-section (1), the Central Government shall, before refusing to accede to the request in whole or in part, give to the person making the request a reasonable opportunity of being heard.
Section 86, as amended by the Amendment Act, 1976, has given adequate importance to the concept of State instead of a ruler and has accordingly substituted for the words “Ruler of a foreign State” the words “a foreign State”, although the provisions relating to suits against a foreign State embodied in this section apply also to any ruler of a foreign State.
Further, sub-section (5), newly added by the Amendment Act, 1976, lays down that the following persons shall not be arrested under the Code, namely:—
(a) Any Ruler of a foreign State;
(b) Any Ambassador or Envoy of a foreign State;
(c) Any High Commissioner of a Commonwealth country;
(d) Any such member of the staff of the foreign State or the staff or retinue of the Ruler, Ambassador or Envoy of a foreign State or of the High Commissioner of a Commonwealth country, as the Central Government may, by general or special order, specify in this behalf.
The immunity under S. 86, C.P.C. upon the Ruler of a foreign State is limited to a suit and does not extend to any other proceedings. The section does not contemplate the obtaining of consent at any other stage except at the institution.
The object of section 86, C.P.C. is to give effect to the principles of International Law that every sovereign State respects the independence of every other foreign State. But, in India it is only a qualified privilege because a suit can be brought with the consent of the Central Government in certain circumstances.
Just as an independent sovereign State may statutorily provide for its own rights and liabilities to sue and be sued so can it provide rights and liabilities of foreign States to sue and be sued in its Courts? In view of section 86 before any action is launched or a suit is filed against a foreign State, the person concerned has to make a request to the Central Government for grant of the necessary consent as required by sub-section (1) of section 86 and the Central Government has to accede to the said request or refuse the same after taking into consideration all the facts and circumstances of the case. On a plain reading of different sub-sections of S. 86, it is apparent that no foreign State may be sued in any court in India, except with the consent of the Central Government which has to be certified in writing by the Secretary to that Government.
In a sense it amounts to a bar on the power of court itself which is entitled to try all suits of civil nature in view of section 9 of the Code. But section 9 itself recognises the limitation on such courts to try any suit the cognizance whereof is either expressly or impliedly barred. As such whenever a relief is sought against a foreign State, the court before which such claim is lodged has to examine whether the person concerned has got the consent of the Central Government in terms of section 86 of the Code.
Since for granting consent the Central Government is required under section 86 (2) (b) to be satisfied as to whether such foreign State, by itself or by any other authority, trades within the local limits of the jurisdiction of the court concerned, it cannot be urged that commercial contracts relating to trade and business having been entered on behalf of a foreign State are beyond the purview of section 86 of the Code.
In the case of Royal Nepal Airlines Corpn. v. Monorama Mehar Singh Leg ha? a Division Bench of the Calcutta High Court held that Nepal Airlines Corporation having its office at Calcutta shall be deemed to be department of the Government of Nepal on the basis of the document produced before the court and as such was entitled to claim immunity from the process of the Indian Court to exercise its jurisdiction in respect of the claim for damages which had been brought by the plaintiff of the said suit.
But, at the same time, it must be impressed that any plea of immunity raised by a corporate undertaking of a foreign State, has to be examined on the basis of materials produced on behalf of such undertaking or corporation. The initial onus of establishing that such corporation or undertaking had right to immunity, must be discharged.
If it satisfies the court that because of any constitutional provision, although such corporation has its separate legal entity, still it shall be deemed to be a department of the State for purpose of immunity then only the onus will shift to the plaintiff to disprove any such claim.
Meaning of the term ‘sued’ ‘in Ss. 86 & 87-B:
A person is ‘sued’ not only when the plaint is filed, but also when the suit remains pending against him. The word “sued” covers the entire proceeding in. an action. It follows that consent is necessary not only for the filing of the suit against the ex-Ruler but also for its continuation from the time consent is required. Neither the suit could be filed nor could a suit already filed be maintained except with the consent of the Central Government. The prohibition in S. 87B, therefore, affects not only a suit instituted after the enactment of S. 87B but one which, though instituted before its enactment, is pending.
Doctrine of immunity of foreign Sovereign State from being sued in India how far modified (Mirza Ali Akbar Kashani v. United Arab Republic):
The provision in S. 86 (3) that a decree passed against a foreign State or its Ruler shall not be executed against the property of such State or Ruler does not tend to show that the Ruler of a foreign State within S. 86 (1) must be the Ruler himself and not the State. On the other hand, it tends, to show that what exempted is the separate property of the Ruler himself and not the property of the Ruler as head of the State. Section 86 (1) has the effect of modifying to a certain extent the doctrine of immunity recognised by International Law.
The section provides that foreign States can be sued within the municipal courts of India with the consent of the Central Government and, upon such consent being 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. In substance, S. 86 (1) is not merely procedural; in a sense it is a counterpart 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 limitation prescribed by it.
It is apparent from a perusal of S. 86 of the Civil Procedure Code that there is no absolute prohibition against a foreign State or its Ruler being sued in India. A foreign State or its Ruler can be sued with the consent of the Central Government certified in writing by a Secretary to that Government.
It is also provided that such consent should not be given unless it appears to the Central Government that the Ruler has instituted a suit in the court against the person desiring to sue him or by himself or another trades within the local limits of the jurisdiction of the court, or is in possession of immovable property situate within those limits and is to be sued with reference to such property or for money, charged thereon, or has expressly or impliedly waived the privilege accorded to him by this section.
Ambassadors and consuls of foreign Governments have appeared in the courts of the country as also of other countries claiming immunity on behalf of their respective Governments from being sued and in every case they have been heard. An accredited Ambassador or a Consul has always been and must be held to have sufficient authority to represent his Government. This is a matter of judicial notice.
It appears to be settled that a statement made on behalf of a foreign Government on a question whether a particular undertaking is government undertaking or not is conclusive. In the instant cage the plaintiff filed a suit against the Royal Nepal Film Corporation Ltd. and two others.
The Consul-General of Nepal on behalf of the corporation filed an application stating that the Corporation was an undertaking of Government of Nepal and since no permission under S. 86 of the Code of Civil Procedure was obtained from the Central Government, the suit was not maintainable against the Corporation. It was accordingly held that the suit was not maintainable against the Corporation and that S. 85, C.P.C. did not apply.