Delhi High Court
International Development Research ... vs Smt. Durgeshwari Sahi on 25 January, 2007
Author: Swatanter Kumar
Bench: Swatanter Kumar, H.R. Malhotra
JUDGMENT Swatanter Kumar, J.
1. International Development Research Centre (hereinafter referred to as 'the appellant') questions the correctness and legality of the judgment and decree passed by the learned Single Judge of this Court in exercise of its original jurisdiction inter alia but primarily on the ground that the appellant being 'Foreign State' is entitled to the protection of provisions of Section 86 of the CPC (hereinafter referred to as 'the Code') and the suit in question, thus, was not maintainable against the appellant.
2. Before we proceed to discuss this substantial question of law, reference to the facts giving rise to the present Regular First Appeal would be necessary.
3. Smt. Durgeshwari Sahi, respondent herein claimed that she was the owner and landlord of the property situated at 17, Jor Bagh, Lodhi Road, New Delhi. The suit property was leased out by her to the appellant vide registered lease deed dated 7.2.1994 for a period of five years starting from 1.4.1994. In terms of the lease deed, the rent of the premises was fixed at Rs. 40,000/- per month for first three years where after it was to be Rs. 48,000/- p.m. w.e.f. 1st April, 1997 to 31st March, 1999. The entire advance rent for the said two years was payable before 31st March, 1997 failing which the lease would stand terminated from 1st April, 1997 and the appellant was liable to hand over the vacant and peaceful possession of the property to the respondent. It was further pleaded by the reaspondent that instead of paying the advance rent in terms of the agreement, certain unnecessary queries were raised by the appellant including demand of perpetual lease deed executed by the Department of Land and Development, Ministry of Urban Affairs, Govt. of India in favor of the respondent. Apprehending the default on the part of the appellant, the respondent served a legal notice stating that they should make the payment of the entire advance rent of 11,52,000/- for the relevant period failing which the lease would stand terminated w.e.f. 1.4.1997. Despite service of such legal notice, no payment was made resulting in filing of the present suit wherein, the respondent in her plaint, claimed possession of the suit property as well as prayed for passing of a decree for a sum of Rs. 9 lakhs on account of mesne profits/damages for the use and occupation of the premises w.e.f. 1st April, 1997 to 30th May, 1997 @ 15,000/- per day and also claimed the same damages for future till the date the possession of the property was handed over to her. She also claimed interest @ 24% per annum. This suit was contested by the appellant who claimed that it was a Canadian, public sector, non commercial, international corporation created in 1970 by an act of the Parliament of Canada and as per its objective and purposes, it was a 'foreign state'. It was also pleaded that it was a Crown owned corporation and was not present in India to conduct commercial or profit-making activities, thus was entitled to the protection of Section 86 and the present suit was not maintainable against them. They in fact denied the ownership of the plaintiff and claimed that in absence of title of ownership, the suit was not competent and the plaintiff could not pray for the relief. The suit was instituted without permission of the Ministry of External Affairs which has to accord such permission to any person to institute a legal action against a foreign entity which is a representative of a foreign government and it alone can determine the status and dimensions of the activities of such foreign entity, of its function in India and whether such entity was entitled to diplomatic protections, as such the suit could not have proceeded in law. On merits, it was stated that the facts in plaint were not correct. The premises was to be leased to the appellant for ten years and not for five years with possibility of further extension. They had spent more than Rs. Fifty lakhs on the repair of the premises and if the period was five years, they would not have spent so much of money on the premises. According to the appellant, the respondent had failed to provide any documents showing her ownership over the suit property despite demand and the presumption would be that she is not owner of the property. It was also averred that there were four agreements in respect of leased premises between the plaintiff and the defendant and another family members. All the agreements had not been placed on record as they were sham transactions and the plaintiff had only produced on record the lease agreement which could be correctly interpreted in isolation. The appellant in the written statement also took up the stand that there was no occasion for not making the payment and in fact the respondent had received payments much in excess of the amount due and to coerce the further amounts from the appellant, the respondent had informed that she was likely to get notice from the L & DO for payment of charges on account of mis-user as the premises was not being used for residential purposes. Vide their letter dated 31st March, 1997 in addition to other fax messages they had asked the respondent to furnish the documents which were not furnished and the payment was not disbursed which of course was paid under the orders of the court. In fact, the plaintiff owed defendant a balance amount of nearly Rs. Ten lacs after adjusting the sum of Rs. 11,52,000/- payable to them. It was denied that the appellant was liable to pay charges @ 15,000/- per day as per the agreement. On these grounds, the defendant had prayed for dismissal of the suit .
4. The learned Counsel appearing for the appellant has heavily relied upon the judgment of the Supreme Court in the case of Veb Deutfracht Seereederei Rostock (D.S.R. Lines) A Dept. of the German Democratic Republic v. New Central Jute Mills Co. Ltd. and Anr. , wherein the court stated that the principle of international law is that every sovereign state respects the independence of every other foreign state. The object of Section 86 of the Code is to give effect to the principles of international law and no foreign state corporation can be sued in India without sanction of the authority. The immunity extends to any undertaking or corporation of a foreign state, as such, a suit cannot be instituted against such undertaking or corporation of the foreign state without permission of the Central Government. He also contended that object of Section 86 further is to save the foreign states from being harassed by defending suits in which there is hardly any merit.
5. No doubt, these are the paramount objects of Section 86 of the Code and they must be decided at the earliest opportunity available. Otherwise, it will neither be to the advantage of the parties nor would achieve the object of these statutory principles. The provisions relating to the extent of doctrine of immunity is also provided under this Section and the Central Government could grant or decline the permission sought for in consonance with the stated principles. Once, the Central Government is satisfied that a cause of action had accrued to the applicant against any foreign company or corporation which shall be deemed to be a foreign state, keeping in mind the facts of the case, such consent may be accorded by the Government giving the benefit of immunity and protection extended to a foreign state on the basis of international law. Such immunity or protection should not be stretched to a limit so that a foreign company and corporation, trading within the local limits of jurisdiction of the court concerned, may take a plea of Section 86, and prima facie it appears that it is liable to be sued for its omission or any breach of the terms of the contract, more so, when such breach has caused injury to the plaintiff. While referring to various provisions, the court held as under:
9. In the case of Royal Nepal Airlines Corpn. v. Monorama Meher Singh Legha , a Division Bench of the Calcutta High Court held that Nepal Airlines Corporation having is office at Calcutta shall be deemed to be department of the Government of Nepal on the basis of the documents 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.
6. The clear emphasis of the provision is that it has to be a foreign state or an undertaking or corporation which would be doing such functions as were being done by the foreign state or its agency. Wherever the undertakings have their own legal entity and are corporate and/or juristic personalities, such corporations may be part of a State but still have their own independent existence.
7. The view taken by the Supreme Court in the case of Mirza Ali Akbar Kashani v. the United Arab Republic and Anr. is consistent with the view taken by the Supreme Court and followed by different Courts. While relying upon the judgments of the Supreme Court, a Division Bench of this Court in the case of Syrian Arab Republic v. A.K. Jajodia (DB) expressed the view that an accommodation from a private individual/citizen of the country taken for residence by the United Arab Republic would not entitle them to invoke the Doctrine of Immunity, much less diplomatic immunity, where the premises were bonafide. The following observations of the Supreme Court clearly indicate the implications and limitations which will control the applicability of the provisions of Section 86(1) of the Code and they read as under:
The effort of the provision of Section 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 right and liabilities of 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 right 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 Section 86(1) is to be modify 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 Central Government and when such consent is granted as required by Section 86(1), it would not be open to a foreign State to rely on 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, Section 86(1) is not merely procedural; it is in the sense a counterpart of Section 86. Whereas Section 84 confers a right on a foreign State to sue, Section 86(1) in substance imposes a liability on foreign State to be sued.
8. The provisions of Section 86 opens with a negative mandate to the effect that no foreign State may be sued in another Court, which otherwise is competent to try a suit except with a certificate in writing issued by the competent authority/Central Government. Thus, the two conditions precedent for entertainment of a suit are :
(a) The competence of the Court to try such suits; and
(b) Certificate issued by the Central Government.
9. Once these two ingredients are satisfied, the Court will proceed with the suit. The most prominent expression used by the Legislature under Section 86 is "foreign State". This expression should be understood and given a meaning which would help in achieving the object of the provision. Once the language of a provision is clear and unambiguous, it must be given its plain and simple meaning. There is no scope for unnecessarily expanding the scope of the expression or construing it so strictly that it would defeat the purpose of the provision. The Court should interpret such an expression with the help of rule of plain interpretation. In other words, it should give a simple interpretation and plain meaning of the term. What is a "foreign state" is itself explained under Section 87A of the Code. Section 87A(a) explains the term "Foreign State" as under:
87A. Definitions of "foreign State" and "Ruler".- (1) In this Part, -
(a) "foreign State" means any 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 persons who is for the time being recognized by the Central Government to be the head of the State.
(2) Every Court shall take judicial notice of the fact -
(a) that a State has or has not been recognized by the Central Government.
(b) that a person has or has not been recognized by the Central Government to be the head of a State.
10. Article 367(3) of the Constitution of India provides a meaning to the word "Foreign State" to be any State other than India. Recognition by the Central Government or a foreign state which has not been recognised by the Central Government, are the facts which the Court would take judicial notice of in law. This expression has been given different meanings and connotations, keeping in view the Statute or instructions wherever it appears. Even in common parlance, the expression is given a limited meaning as the Black's Law Dictionary, 8th Edition defines the word "foreign State" as a 'foreign country'.
11. One of the cardinal principles of international law is that every foreign state should respect the absolute independence of the other sovereign State. Necessary corollary thereto is that this independence of the State sovereignty must be respected within and outside the territory of the State. This may give rise to a conditional or an absolute immunity. The conditional or absolute immunity would necessarily have to co-relate itself to the foreign State or rulers. A corporation or a company of a foreign State, if otherwise entitled to such immunity or protection, the same can hardly be claimed in respect of its contractual obligations.
12. The expression "foreign State", even on its liberal construction, would not expand to a sphere which is void of any concept of sovereign action. The Legislature in its wisdom has restricted the language of the provision of Section 86 only to a "foreign state", thus emphasizing the concept of State Sovereignty. The scope of the suit to invite the bar of Section 86 should be such which sues a foreign state or its instrumentalities in relation to the functions of a State as understood in its wider sense. The Court is primarily concerned with whether the grievance of the citizens of India have been properly and legally dealt with. The disputes have to be resolved in terms of the law of this country. Even if both the principles might be attracted lex loci contractus as well as lex sites, in pure matters of contract in a private field may necessarily not invite the bar on Section 86, while matters relatable to State sovereignty and State functions may not escape such legal consequences. The protections available to the other States in Indian territory before the courts are based on the principle of non-intervention in the internal affairs of the other States. In the case of Mirza Ali Akbar (supra), the Supreme Court also observed "the political or territorial rights of another State may not be the subject matter of a suit before the Court in another land." While discussing the effect of the proviso to Section 84, the Court further observed that the private right to which the proviso refers is on the ultimate analysis that the right vesting in the State may vest in a Ruler or an Officer of the State in his public capacity but ultimately it is the right of the State and in relation to such rights the bar can be pleaded.
13. We may usefully refer at this stage to a judgment of a Single Bench of this Court in the case of B.L. Gupta Construction Company v. Sri Lanka High Commission in India and Anr. in Arb. P. No. 295/2004 decided on 29.9.2005, where the High Commission of Sri Lanka had invited tenders for construction of Sri Lankan pilgrimage hostel and certain disputes had arisen between the Contractor and commission resulting in filing of an application for reference by the Contractor. The Court considering the objections in regard to complete immunity, though primarily decided the question on the basis that the petition under the Arbitration Act was not strictly a suit as contemplated under Section 86 and thus, not being hit by the bar, but discussing the concept of availability of immunity on its own merit, held as under:
To examine this aspect illustratively, the servant of an ambassador who did not reside in his master's house, but rented and lived in another, part of which building was used for lodging, his goods in that house not being necessary for convenience of the ambassador were liable to be distrained for poor rates. The immunities enjoyed by those in service of a diplomatic agent are purely derivative. The privilege is the privilege of the employer and not privilege of the servant. The fiction of extra-territoriality is applied to the residence of diplomatic agent. Under the Vienna Convention on Diplomatic Relations, 1961, the private residence of a diplomatic agent shall enjoy the same inviolability and protection as the premises of the mission. However, the local Courts have jurisdiction with regard to immovable property held by the diplomat in his own capacity. Thus, the benefit of the functional protection is not extended in its absolute terms to the acts and deeds not falling within the specified limitations. The functions, which are of a diplomatic mission, is to extend its activity, have also been defined in Article 3 of 1961 Convention. Article 22 of the said Convention further explains in relation to the premises and property to which such a protection is available. Article 30 excludes in relation to what protections would not be available. The protection available to foreign State in a country have been ensured by Conventions, pronouncement of judgments with reference to the International Law, and the other source has been the codified law of the relevant country. In India, this protection has been recognised and accepted under the provisions of Section 86 of the Code of Civil Procedure and in its various amendments which took place from time to time. Under this provision, no suit against a foreign State would be maintainable before a Court of competent jurisdiction except with the consent of the Central Government certified in writing by the Secretary of that Government. Proviso to Section 86 further indicates the legislative intent in not enforcing the bar contemplated under Section 86(1) in certain cases in relation to tenancy in an immovable property. In face of the provisions of Section 86 of the Code, a citizen of the country is not remedy-less in bringing an action against a foreign State. The Supreme Court in the case of Harbhajan Singh Dhalla v. Union of India while relying upon Corpus Jurisdiction Secundum, vol. 48, p.28 at pages 30 to 35 illustrated the various kinds of remedies by a citizen against foreign State and the principles which the local state is required to follow in granting or refusing sanction, as contemplated under Section 86 of the Act. Where the purpose was to save the foreign State from harassment, which may be caused by institution of a suit, the very premise of which may be frivolous, there it was also indicated that consent may clearly be given unless there are cogent political and other reasons for declining such a consent. The principle of public necessity require liberal interpretation to such provisions and also ex facie determination, where the claim fell outside the provisions of Section 86 of the Code, the action by a citizen would be amenable to action before the court of competent jurisdiction.
Besides the above legal issue, the Court would also have to examine the factual matrix of the case for availability of the claim based on doctrine of immunity to the respondent. There is clear distinction between sovereign public and private acts. The public acts in contradistinction to private act would normally have some meaning in other laws. A public act would be referable to act of sovereign foreign State in its capacity as a State not having the element of private or individual interest or act. Member of a Commission of a foreign State in a country within its prescribed protocol may enter into an agreement, which does not have the essentials of a public obligation. An apparent example of such activity could be any commercial transaction, even if entered through the officer of the commission, still may in its true character be an individual or a private act like making construction, furnishing, furniture or doing such ancillary act at commercial level de hors discharge of his diplomatic public function as contemplated and understood in the convention treaties and the relevant laws. In somewhat similar circumstances, while dealing with a petition filed under Section 20 of the Arbitration Act, in the case of Uttam Singh Duggal & Co. Pvt. Ltd. v. United States of America, Agency of Inernational Development 2nd (1982) II DELHI 273, the Court while commenting on all the above contentions held as under :
8. Mr. Mridul contended that the Indian authorities on the subject have learned in favor of the view of absolute immunity. The counsel in support of this contention, relied upon United Arab Republic and Anr. v. Mirza, Ali Akbar Kashani, (4) and The German Democratic Republic v. The Dynamic Industrial Undertaking Ltd. (5). In United Arab Republic and another (supra) a Division Bench of the Calcutta High Court observed:
So far as the Calcutta High Court is concerned, it has adopted the rule of English law as the rule of Private International Law applicable to our country. The decisions of English Courts are uniform that in a personal action the immunity of a foreign State is absolute, unless it submits to the jurisdiction either by invoking it as a plaintiff or by appearing as a defendant without objection. The doctrine of restricted immunity based on the distinction between jure imperial and jure gestionis (Sovereign and non-Sovereign acts) cannot be accepted as the positive International Law of our country. The only restriction to the immunity of a foreign State recognised by the law of our country is that enacted by Section 2 of the Government Trading Taxation Act (III of 1926) and Section 86(2)(b) of the Civil P.C. Where there is no allegation that the defendant "trades" within the local limits of the Calcutta High Court, it does not fall within the exception and is entitled to immunity.
Section 84 and the following sections of the Civil P.C. do not exhaustively lay down the law on the subject of the immunity of a foreign State and cannot be construed as overriding principles of International Law.
9. In the German Democratic Republic (supra), a Division Bench of the Bombay High Court observed as under :
A foreign Sovereign State is entitled to immunity from being sued in municipal courts under the principles of International Law. The principles of International Law would be applicable in India, but in its application Section 86 creates an exception. In International law the immunity is absolute, subject only to the exception or exceptions recognised in International Law, one of such exceptions being when foreign sovereign State waives the privilege of immunity. Section 86 creates another exception, the exception being where the requisite consent is given by the Government of India as provided under Section 86. But the provisions of Section 86 would to that extent operate as another exception and to that extent modify the principles of International Law. But subject to such exception the relevant principles of International Law would still be applicable in India.
The doctrine has yet not been curtailed in England to exclude its applicability to commercial transactions. If the doctrine which is well established for over a large number of years requires, in view of changed circumstances, to be at all modified in India, it is highly desirable that the Supreme Court as the highest Court of the land should, in a proper case, lay down the principles.
10. A perusal of the authorities cited above would show that both the Courts had held in favor of absolute immunity following the English law as it then was. I have on a consideration of the latest English law on the subject observed that the international law on the doctrine of immunity has in England since 1975 undergone a change and restrictive theory of immunity has been accepted as the part of the English law on sovereign immunity. The American law also seems to be taking a similar view. See Alfred puphill of London Inc. v. Republic of Cuba (1976) 425 US 682 (6).
11. I find no plausible reason why the prevalent English law on sovereign immunity be not adopted in India. This also is in consonance with justice, equity and good conscience.
12. Mr. Mridul contended that assuming the concept of restrictive sovereignty applies that the commercial transactions are not immune, the transaction in question is not a commercial transaction because there is no buying and selling involved and, therefore, the restrictive theory of immunity cannot be applied. I do not agree in this contention. The US AID had entered into a building contact with the plaintiff M/s Uttam Singh Duggal and Company. Mr. Mridul may be right in contending that the contract is not a transaction or a trading or commercial character but, in my view the transaction cannot be placed anything above a purely private act. No sovereign or public act is involved in the transaction . It may sometime become difficult to differentiate between a sovereign private and public acts; in order to differentiate between a sovereign act and a private act one will have to look into the nature or to the purpose of the transaction. The transaction as already stated was purely a construction contract and it would, in my opinion, would best be termed a private commercial act.
13. There is also another reason for not accepting the plea of immunity. The Central Government had by its letter dated 26th March 1981 accorded its consent under Section 86 of the Code of Civil Procedure for suing US AID regarding the performance of the contract dated 15th January 1969. Mr. Mridul contended that Section 86 is applicable only to a suit and since a petition under Section 20 of the Arbitration Act is not a suit Section 86 will not be applicable and, therefore, the consent accorded by the Central Government is of no avail to the petitioner. It appears to be a common case that Section 86 only applies to a suit and that a petition under Section 20 of the Arbitration Act is not a suit within the meaning of the expression "suit" as used in Section 86 of the Code of Civil Procedure. In my opinion, the fact that Section 86 is only applicable to a suit and the petition in hand not being a suit is not governed by Section 86 will not make any difference. The fact remains that the Central Government has not chosen to uphold the plea of immunity on the facts of this case and this in a way suggests that the Central Government wants to restrict the theory of immunity only to sovereign act and not to a sovereign private act or commercial activity.
14. The principles which control determination of such questions would require that the nature of the transaction between the parties, the cause of action and nature of the functions would be the precepts to such conclusion. It is imperative for a Court to consider the various legal concepts which emerge from the bare language of Section 86 and then alone to adjudicate a legal issue in relation to the maintainability of the bar of Section 86. The learned Single Judge in the impugned judgment and decree has dealt with this question and after dealing the same with some elaboration, held as under:
12. Taking into consideration all the provisions of the Act, read along with the documents placed on record it cannot be said that the centre is an agency of the Government of Canada or that it is a foreign state. In order to appreciate and come to the conclusion as to whether the defendant is a foreign state or an agency of the Government of Canada, the provisions of the Act are to be looked into, which created the institution, namely, the defendant. The communication dated 2.6.1983 only states that the defendant is an entity created by the Parliament of Canada, which is a fact. However, the view contained therein that the defendant is created and funded by the Parliament of Canada for the purpose of initiating, encouraging, supporting and conducting research is not borne out by the records of the case except for the fact that an initial grant was given by the Minister of Finance to establish the Account out of the special account for international development assistance in the account of Canada. The centre is to generate its own funds and amounts are to be realised by the centre by carrying out research technical development or from providing any other services in Canada or elsewhere under any contract or agreement.
13. In the light of aforesaid provisions of ;the Act and the documents placed on record, I am of the conscious view that the defendant is not a foreign State and does not enjoy the protection as provided for under Section 86 CPC. The decision in VEB DEAUTIRACHT SEEREEDEREI ROSTOCK (supra) and relied upon by the defendant in support of her contention is not applicable to the facts and circumstances of the present case. A perusal of the said decision would indicate that it was an admitted position in the said case that the appellant belonged to and was owned by the German Democratic Republic. The contention of the appellant therein was that it is a department and/or agent and/or instrumentality of the Government of German Democratic Republic, which is recognised as a sovereign foreign State. The same was admitted by the carrier and in the light of the aforesaid fact, the court came to the conclusion that the appellant is a foreign State and is protected under the provisions okf Section 86 CPC and that without consent of the Central Government no suit could be instituted against the appellant being a sovereign foreign State. In the present case, the Act under which the defendant was created, itself specifically provides that the defendant is not an agency of the Government of Canada, and therefore, it cannot be treated as a foreign State within the meaning of provisions of Section 86 CPC and, therefore, the preliminary objection raised by the defendant is held to be mis-placed and not tenable and it is held that the suit is maintainable against the defendant even without obtaining permission from the Central Government and that the provisions of Section 86 CPC are not applicable to the facts and circumstances of the present case.
15. Having concluded as above, the objection taken by the appellant was rejected and decree was passed in regard to possession. The learned Counsel for the appellant while relying upon the various clauses of the Act, establishing the International Development Research Centre and the copy of the letter of the Ministry dated 2.6.1983 contended that the object of the Centre was to establish, maintain and operate information data Centre facilities for research and other allied activities. This was created by an act of the Parliament, was controlled by the Government and as such the Centre was entitled to all the protections that a Foreign State would be entitled to in terms of Section 86 and that its status as a foreign governmental agency was accepted by the Central Government and, therefore, it was entitled to the protection of these provisions.
16. Firstly, development of cultural activity or facilitation of information data Centres can not be strictly construed as a function of a foreign state in discharge of its sovereign obligations on a foreign land. Secondly, under Clause 18(1) of the Act, this Centre was said to be not an agent of Her Majesty and the Governor and Officers were not part of the public service. Furthermore, the copy of the letter dated 2.6.1983 describes the status of the appellant and nowhere in the letter it is stated that the said Centre has been treated as a foreign state by the Central Government of India in accordance with the provisions of Section 86 of the Act. No documents have been placed on record to show that the functions of the centre read in conjunction with their constitution would entitle them to be an instrumentality or corporation of a foreign State entitled to the protections of Section 86. Even in the case of Veb Deutfracht Seereederei Rostock (D.S.R.) A Dept. of the German Democratic Republic v. New Central Jute Mills Col. Ltd. and Anr. , the Supreme Court has categorically stated that a Corporation/undertaking of a foreign State can claim protection of Section 86 of the Act only if they were directly part of the activities of the foreign State. In other words, the constitution of such a body itself would not be the determinative factor in answering such an argument. The findings recorded by the learned Single Judge in relation to non-availability of the protection under the provisions of Sub-section of Section 86 of the Code to the appellant really do not call for any interference. The documents placed by the appellant on reocrd do not reflect that it is a foreign State or an instrumentality or corporation of a foreign State engaged in the functions of the State. The purpose of the provisions is certainly not to protect every private activity of a foreign corporation squarely falling in the domain of private rights. These kind of cases would not fall in the category where a person would be debarred from bringing a suit against a foreign corporation without consent of the Central Government. Thus, on this issue we have no hesitation in affirming the findings recorded in the judgment under appeal.
17. On the merits of the case, the Court mainly relied upon the written statement and documents by the defendants. They had entered into possession of the suit property in furtherance to the Lease Deed having been executed between the parties. The lease could be extended for a period of three years and even that period had come to an end. The Court could take into consideration the admission of a party either in the pleadings or from the documents on record. The plea of the appellant raised before us that the respondent was not the lawful owner of the property and hence could not claim any benefit in terms of the lease deed relating to recovery of mesne profits and possession, is without any substance. Once a lessee is always a lessee and a lessee who has been inducted by Lesser, cannot call upon the Lesser to prove his title to the property in order to seek remedies in law. The Lesser necessarily may not be the owner of the property for taking possession of the property. The reliefs claimed by the respondent in appeal are based upon the Lease Deed which was executed between the parties prior to handing over the possession of the suit property. This Lease Deed is not disputed in the written statement filed by the appellant. However, it was stated that there are other contracts entered into between the parties which have not been produced by the respondents before the Court. That argument would not advance the case of the appellant either in law or on facts, in as much as the Lease Deed which was duly executed between the parties has been admitted. In terms of the lease deed dated 1.3.1989, Smt. Durgeshwari was the owner of the property. She had leased out the premises to create sub-tenancies.
18. While relying upon the provisions of Order 2 Rule 6, the Court relied upon the documents placed on record including the Lease Deed dated 7.2.1994. The tenancy had come to an end by afflux of time and thus there was no occasion for the Lesser to serve notice terminating the tenancy. The only defense raised before that Court as well as before us was that the respondent was not the owner of the property which was squarely answered by the Court against the appellant. While relying upon the judgment of the Supreme Court in the case of Sri Ram Pasricha v. Jagannath and Ors. wherein the Court had held that in a suit for eviction a tenant can hardly question the ownership of the landlord in face of the provisions of Section 116 of the Evidence Act and more particularly when he was inducted by a registered Lease Deed by the same landlord. In fact, the learned Counsel appearing for the appellant had laid down main emphasis of his submissions on the question of bar under Section 86 of the Code of Civil Procedure to the maintainability of the suit which we have already discussed at some length. In the plaint, the plaintiff had relied upon only on a registered lease deed dated 7th February, 1994, the terms of which were binding between the parties and non-compliance whereof was the basis for taking action against the defendant in the suit. Execution of terms and conditions of this lease deed was not in dispute. If there were other agreements relating to fittings & fixtures or furnishings etc. making a reference to the same property, still that would have no bearing on the matters on issue in the present suit. The defendant had admitted the execution in terms of this agreement. The plea of estoppel would certainly be attracted in the facts and circumstances of the case. In fact, in the written statement filed by the appellant the factual matrix of the case was hardly disputed as pleaded in the plaint but the above two issues were raised. The submission of the appellant has been rejected by the impugned judgment which does not suffer from any error of law or jurisdiction.
19. Resultantly, we find no merit in the present appeal and the same is dismissed. However, in the facts and circumstances of the case, we leave the parties to bear their own costs.