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Issues Involved:
1. Whether the appellant, Kenya Airways, can be held to be a Foreign State within the meaning of section 86 of the Code of Civil Procedure, 1908? 2. If yes, whether the first respondent was required to obtain the consent of the Central Government before filing the present suit as required by the aforesaid section? 3. Whether the third defendant has waived its right under section 86 of the Code? 4. Whether the communication dated 2nd June, 1995, addressed by the Ministry of External Affairs, Government of India, to the plaintiff entitled the plaintiff to file the present suit on the hypothesis that no consent under section 86 is required to be obtained prior to filing of the present suit? Issue-wise Detailed Analysis: 1. Whether the appellant, Kenya Airways, can be held to be a Foreign State within the meaning of section 86 of the Code of Civil Procedure, 1908? The court examined whether Kenya Airways qualifies as a "foreign state" under section 86 of the Code of Civil Procedure. The third defendant (Kenya Airways) was incorporated under the Companies Act in Kenya, with its share capital held by two government officials. The court considered the Memorandum and Articles of Association, which indicated that the company was fully owned and controlled by the Government of Kenya. Despite being engaged in commercial activities, the court concluded that Kenya Airways, being wholly owned by the Government of Kenya, is entitled to sovereign immunity under section 86 of the Code. 2. If yes, whether the first respondent was required to obtain the consent of the Central Government before filing the present suit as required by the aforesaid section? The court referred to the Supreme Court's ruling that emphasized the necessity of obtaining the Central Government's consent before filing a suit against a foreign state, as mandated by section 86 of the Code. The Supreme Court's judgment in the case of "Veb Dautrfraght Seereederi Restock (D.S.P. lines) Department of the German Democratic Republic" reinforced that the trial court must first determine whether the appellant is a foreign state and if the plaintiff was required to obtain consent. The court acknowledged that the plaintiff did not obtain the necessary consent before filing the suit, which would typically render the suit non-maintainable. 3. Whether the third defendant has waived its right under section 86 of the Code? The court noted that the defendants raised the issue of immunity under section 86 of the Code after a lapse of almost sixteen years from the date of filing the suit. The defendants had participated in the proceedings, filed written statements, and furnished undertakings without initially raising the plea under section 86. The court concluded that the defendants had submitted to the jurisdiction of the court and, by their conduct, waived their right to claim immunity under section 86. The court held that the suit is maintainable despite the lack of prior consent from the Central Government. 4. Whether the communication dated 2nd June, 1995, addressed by the Ministry of External Affairs, Government of India, to the plaintiff entitled the plaintiff to file the present suit on the hypothesis that no consent under section 86 is required to be obtained prior to filing of the present suit? The court considered the communication from the Ministry of External Affairs, which stated that no permission under section 86 was necessary. However, the court emphasized that the communication did not alter the legal requirement of obtaining consent under section 86. The court reiterated that the third defendant's waiver of its right under section 86 was the primary reason for the suit's maintainability, rather than the communication from the Ministry. Conclusion: The court ultimately confirmed the trial court's finding that the suit is maintainable, though on different grounds. The appeal was dismissed with costs, and further proceedings in the suit were stayed for six weeks to allow the appellant to approach the Supreme Court.
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