Judgment

N. P. SINGH, J.- The defendant is the appellant in this appeal. The suit in question was filed by the respondent, for a decree for Rs. 2,40,000/ - alleging that the respondent had purchased diverse spare-parts and accessories from the appellant, which were found to be damaged. The appellant is a company incorporated under the appropriate laws of the West Germany and is carrying on its business in West Germany as also at Calcutta.

2. An objection was taken at the initial stage on behalf of the appellant that it was a department and,/ or agent and or instrumentality of the Government of German Democratic Republic, which is recognised as a sovereign foreign State and as such the suit in question cannot be entertained against the appellant without prior consent of the Central Government as required by S.86 of the Code of Civil Procedure (hereinafter referred to as "the Code"). The same plea was taken even on behalf of the carrier, which also belongs to and is owned by the German Democratic Republic. In support of the stand and in order to attract the bar of s. 86 of the Code, the appellant produced the certificate dated 18-9-1981 granted by the Counsul General of the German Democratic Republic at Bombay saying

"VEB Deutfracht Seereederei Rostock, abbreviated as D.S.R. commonly known as D. S. R. Lines constitutes a department of the Government of the German Democratic Republic exercising the right of a legal entity."

The Constitution of the Germen Democratic Republic was also produced. Reference was made to Art. 12 of the said Constitution which says:---

"Mineral resources, mines, power stations, barrages and large bodies of water, the natural resources of the continental shelf, the larger industrial enterprises, banks and insurance companies nationally-owned farms. traffic routes, the means of transport of the railways, ocean shipping and civil aviation, and telecommunication installations, are nationally-owned property, private ownership thereof is inadmissible."

3. In respect of the carrier also, the Counsul General of the German Democratic Republic at Bombay granted the certificate saying that the said vessel "is owned by the people of the German Democratic Republic and, hence, owned by the State."

4. A learned Judge of the Calcutta High Court by order dated 3-2-1982 allowed the objection taken on behalf of the appellant and rejected the plaint saying that in absence of written consent by the Central Government, as required by S.86 of the Code, the suit filed on behalf of the respondent could not be entertained. On appeal filed on behalf of the respondent, the Division Bench set aside the order of the trial Judge and directed that whether the suit cannot be entertained in absence of consent of the Central Government, should be considered during the trial of suit.

5. One of the principles of International Law is that every sovereign State respects the independence of every other foreign State. This absolute independence and the international comity underlines, the relationship between sovereign States. The object of S.86 of the Code is to give effect to the principles of International Law. 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. It can be said that effect of S. 86 thus is to modify the extent of doctrine of immunity recognised by the International Law. If a suit is filed in Indian Courts with the consent of the Central Government as required by S. 86, it shall not be open to any foreign State to rely on the doctrine of immunity. Sub-sec. (1) of S. 86 says in clear and unambiguous terms that no foreign State may be sued in any Court, except with the consent of the Central Government certified in writing by the Secreta