1970 (10) TMI 77 - HC - Indian Laws

Summary

Issues Involved:
1. Immunity of the second defendant according to the general principles of International Law.
2. Jurisdiction of the Court to try or entertain the suit.
3. Bar of the suit against the second defendant under Section 86 of the Code of Civil Procedure.
4. Appealability of the order dismissing the Notice of Motion.

Detailed Analysis:

1. Immunity of the Second Defendant According to the General Principles of International Law:
The second defendant, the German Democratic Republic, claimed immunity from the jurisdiction of the local courts based on the principles of International Law. The court examined the doctrine of immunity as recognized in various jurisdictions, including England and the United States, and confirmed that the principle of immunity extends to foreign sovereign states unless they voluntarily submit to the jurisdiction of the court. The court cited several authoritative sources and precedents, including decisions from the House of Lords and the Supreme Court of India, to affirm that a foreign sovereign state enjoys immunity from being sued in municipal courts.

The court also considered the evidence provided by the Government of India, including statements from Prime Ministers and official certificates, which indicated that the Government of India had de facto relations with the German Democratic Republic. The court concluded that the second defendant was recognized as a de facto sovereign state by the Government of India and was therefore entitled to immunity under International Law.

2. Jurisdiction of the Court to Try or Entertain the Suit:
The second defendant argued that the court lacked jurisdiction to entertain the suit due to its sovereign immunity. The court examined the procedural aspects and determined that the claim for immunity should be decided at the earliest opportunity to avoid unnecessary litigation. The court held that the procedure adopted by the second defendant, by way of a Notice of Motion, was appropriate for raising the claim of immunity. The court emphasized the necessity of deciding the immunity claim first to prevent the second defendant from being compelled to defend the suit on other points.

3. Bar of the Suit Against the Second Defendant Under Section 86 of the Code of Civil Procedure:
The second defendant also claimed immunity under Section 86 of the Code of Civil Procedure, which requires the consent of the Central Government for suing a foreign state. The court noted that the Chamber Summons making this application had been dismissed, and the appeal against the dismissal was also rejected. The court held that the issues related to Section 86 would have to be dealt with at the hearing of the suit and could not be re-agitated in the appeal against the Notice of Motion.

The court further clarified that Section 86 modifies the doctrine of immunity under International Law to the extent that it requires the consent of the Central Government for suing a foreign state. However, the principles of International Law regarding immunity still apply in India, subject to the modification introduced by Section 86.

4. Appealability of the Order Dismissing the Notice of Motion:
The court addressed the preliminary objection raised by the respondents that the order dismissing the Notice of Motion was not a "judgment" within the meaning of Clause 15 of the Letters Patent and was therefore not appealable. The court analyzed the nature of the order and concluded that the dismissal of the Notice of Motion, which included a claim for immunity, was a final decision on the merits of the controversy between the parties. The court held that the order was a "judgment" as it affected the rights and liabilities of the parties and was therefore appealable.

The court also distinguished between the two prayers in the Notice of Motion: prayer (a) sought the dismissal of the suit in limine, while prayer (b) sought the trial of preliminary issues. The court held that the dismissal of prayer (a) was a final decision on the claim of immunity and was appealable, whereas the dismissal of prayer (b) was not appealable as it merely sought the trial of preliminary issues.

Conclusion:
The court allowed the appeal, holding that the second defendant was entitled to immunity as a foreign sovereign state under the principles of International Law. The suit against the second defendant was dismissed, and the plaintiffs were directed to pay the costs of the second defendant. The court also ordered the refund of the amount deposited as security for the costs of the respondents in the appeal.