Bombay High Court
K.S.Dhondy vs Her Majesty The Queen Of Netherlands & ... on 27 February, 2013
Author: D.Y.Chandrachud
Bench: D.Y.Chandrachud, A.A. Sayed
VBC 1/6 app493.12-27.2
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O. O. C. J.
APPEAL NO.493 OF 2012
IN
NOTICE OF MOTION NO.2651 OF 2004
IN
SUIT NO. 2175 OF 1994
K.S.Dhondy. ...Appellant.
Vs.
Her Majesty the Queen of Netherlands & Anr. ...Respondents.
....
Mr.Rohan Cama i/b. Mr.Pravin D.Kadam for the Appellant.
Mr.Kirti Munshi with Mr.Vikash Kumar i/b. Mr.Anil T. Agarwal for Respondent
No.1.
.....
Mr.S.R.Rajguru with Mr.Ashok Verma for Respondent No.2.
CORAM : DR.D.Y.CHANDRACHUD AND
A.A. SAYED, JJ.
February 27, 2013.
ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.) :
Admit. With the consent of Counsel, taken up for hearing and final disposal.
2. A suit has been filed by the Appellant for recovery of an amount of US $ 25 million together with interest at 19.5% per annum against the Respondents. The First Respondent is the sovereign head of Netherlands while the Second Respondent is the Union of India. The Appellant claims to have been the owner of a vessel which was taken on charter hire by the Dredging Corporation of India Ltd. on 10 November 1989. According to the Appellant, a national of the First Respondent was engaged as an expert to attach certain equipment to the vessel which was to operate on bed levelling operations at the Port of Old Mangalore. The vessel capsized. The Appellant ::: Downloaded on - 09/06/2013 19:41:18 ::: VBC 2/6 app493.12-27.2 alleges that it was due to the negligence of the expert. The Appellant instituted a suit against the First Respondent on the basis that under a Bilateral Trade Agreement between India and Netherlands, the Government of Netherlands has undertaken to reimburse and/or pay any amounts that may have become due by reason of any default inter alia by its employees/representatives. In paragraph 23A of the Plaint, the Appellant seeks to place reliance on Article 5 of the Bilateral Trade Agreement under which it is alleged that the Government of India was to bear the liability in respect of the damages caused by an expert in the performance of the task assigned and that any claim against the First Respondent shall to that extent be precluded.
3. The suit was instituted before this Court on 30 May 1994. A Notice of Motion was taken out by the First Defendant for dismissal of the suit against the First Defendant for non-compliance of Section 86 of the Code of Civil Procedure, 1908, on the ground that the plaint did not disclose any cause of action against the First Defendant and on the ground that the claim against the First Defendant is barred by limitation. The Learned Single Judge by the impugned order dated 20 January 2011, exercised jurisdiction under Order 7 Rule 11 of the Code of Civil Procedure, 1908, and dismissed the suit against both the First Defendant and the Union of India, the Second Defendant. In so far as the First Defendant is concerned, the suit was dismissed for want of permission of the Union of India under Section 86 of the Code of Civil Procedure, 1908, and also on the ground that no cause of action was revealed against the First Defendant and on the ground of limitation. The ::: Downloaded on - 09/06/2013 19:41:18 ::: VBC 3/6 app493.12-27.2 Learned Single Judge also proceeded to dismiss the suit against the Second Defendant on the ground of limitation and on the absence of a cause of action.
4. Now, in so far as the First Defendant is concerned, a suit against the sovereign head of the State of Netherlands could not have been instituted without the permission of the Union of India under Section 86(1) of the Code of Civil Procedure, 1908. Section 86(1) reads as follows:
"86. Suits against foreign Rulers, Ambassadors and Envoys. - (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."
The provisions of Section 86 have been held to be mandatory in the judgment of the Supreme Court in Veb Deautfracht Seereederei Rostock (D.S.P. Lines) a Department of the German Democratic Republic. vs. New Central Jute Mills Co.Ltd. 1 In that view of the matter, the dismissal of the suit as against the First Defendant for want of compliance with the provisions of Section 86 was correct. Where permission of the Union of India has not been obtained to institute a suit against a foreign State, the plaint would be liable to be rejected under Order 7 Rule 11(d) on the ground that the suit appears from the statements in the Plaint to be barred by any law.
5. The Plaintiff-Appellant had addressed a letter to the Union of India 1 AIR 1994 SC 516 ::: Downloaded on - 09/06/2013 19:41:18 ::: VBC 4/6 app493.12-27.2 on 15 October 1993 seeking consent to sue the First Defendant. Admittedly, no consent was received. In paragraphs 23A and 24A of the Plaint, it is sought to be submitted that since no letter was received in response from the Union of India, the Appellant is entitled to proceed on the basis that there was an implied consent of the Union of India. A provision for implied consent cannot be a matter of interpretation, but would have to be elucidated by an express statutory provision. The provisions of Section 86 do not provide any such deeming fiction. The provisions of Section 86 also apply against the head of a foreign State by virtue of clause (a) of sub-section (4).
6. There is no merit in the contention that the First Respondent waived the defence relatable to Section 86. In the judgment in Kenya Airways vs. Jinibai B.Kheshwala,2 a Division Bench of this Court held that the plea of absence of the permission under Section 86 could not be raised by the Defendant in that case sixteen years after the institution of the suit and after submitting itself to the jurisdiction of the Court. The Defendants had filed appearance, appeared in the proceedings, furnished undertakings and made statements thereby avoiding the appointment of the Receiver and filed a written statement where the plea under Section 86 was not raised. It was in this background that the Division Bench held that the Defendant had submitted to jurisdiction and was estopped from raising the plea of the suit being not maintainable for want of permission under Section 86. In the present case, there is nothing to indicate that the First Respondent had submitted to the jurisdiction of this Court before the motion was filed before 2 AIR 1998 Bombay 287 ::: Downloaded on - 09/06/2013 19:41:18 ::: VBC 5/6 app493.12-27.2 the Learned Single Judge raising the issue of absence of permission under Section 86. Issues have still not been framed in the suit. Hence, there was no question of waiver.
7. In the circumstances, in the absence of permission of the Union of India under Section 86(1), the dismissal of the suit against the First Respondent was in order.
8. Now, in so far as the Second Defendant, the Union of India, is concerned, it must be noted, at the outset, that no application as such was moved under Order 7 Rule 11(d). The Union of India, it may be noted, was impleaded as a party to the suit on 2 July 2004. A Notice of Motion was taken out by the First Respondent for the rejection of the suit against it. But quite apart from that, the Learned Single Judge, in our view, was wholly in error in dismissing the suit against the Union of India on the ground of limitation. The Learned Single Judge held that the period of limitation would commence on 28 February 1989 when the vessel capsized and the period of limitation would be three years under Article 113 of the Limitation Act, 1963. Limitation raises a mixed issue of law and fact. In our view, the Learned Single Judge was not justified in rejecting the Plaint as against the Second Defendant on the ground of limitation without an issue being struck and being tried before the Court.
Since we have upheld the rejection of the Plaint as against the First Respondent only on the ground that permission under Section 86(1) of the Code of Civil Procedure, 1908, was not obtained, we clarify that we have had no occasion to express any view on merits on the issue as to whether the suit ::: Downloaded on - 09/06/2013 19:41:18 ::: VBC 6/6 app493.12-27.2 is or was barred by limitation which question would have to be determined after the issue is duly framed. Also, the issue as to whether a cause of action exists or is disclosed against the Union of India is kept open.
9. In the circumstances, we dispose of the appeal in the following terms:
-(i) The impugned order of the Learned Single Judge shall stand confirmed in so far as it orders rejection of the plaint as against the First Respondent under Order 7 Rule 11(d) of the C.P.C.;
-(ii) The rejection of the Plaint as regards the Second Respondent is set aside and the suit is restored to the file of the Learned Single Judge. This would, however, not preclude the Union of India, if it is so advised from moving an appropriate application before the Learned Single Judge.
10. In view of the fact that the Plaintiff is a senior citizen, we expedite the disposal of the suit and grant liberty to the Appellant to move the Learned Single Judge for appropriate directions.
11. There shall be no order as to costs.
( Dr.D.Y.Chandrachud, J.) ( A.A. Sayed, J. ) ::: Downloaded on - 09/06/2013 19:41:18 :::