Delhi High Court
Thai Airways International ... vs L.M.Khosla & Ors. on 5 March, 2012
Author: Indermeet Kaur
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 05.03.2012
+ C.R.P. 505/2004 & CM No. 5560/2010
THAI AIRWAYS INTERNATIONAL PUB. CO. LTD. ..... Petitioner
Through Mr.Sanjay Gupta, Adv.
versus
L.M.KHOSLA & ORS. ..... Respondent
Through Mr. J.K. Sharma, Adv.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J. (Oral)
1. Order impugned is the order dated 16.09.2004; application filed
by the defendant under Order 7 Rule 11 of Civil Procedure (hereinafter
referred to as the „Code‟) had been dismissed. The averments in the
application under Order 7 Rule 11 of the Code were that the defendant
(M/s Thai Airways International Pub. Co.) is a "sovereign state" within
the meaning of Section 86 of the Code and without the mandate of the
said provision having been complied with and the consent of the Central
Government not having been obtained, the present suit filed by the
plaintiff was not maintainable.
2. Record shows that a suit for declaration and injunction had been
filed by the seven plaintiffs; contention of plaintiff No. 1 was that he is
an ex-employee of defendant No. 1; he and his family members even
after their retirement were entitled to certain free passages of defendant
No. 1; accordingly a decree for declaration and perpetual injunction had
been sought.
3. In the course of the proceedings, the present application under
Order 7 Rule 11 of the Code had been filed; the grievance of the
defendant being that the bar of Section 86 of the Code is operational and
unless and until the consent of the Central Government is obtained, the
present suit could not have been filed. The impugned order had rejected
this prayer.
4. This controversy has now rested with the judgment of the Apex
Court in Ethiopian Airlines Vs. Ganesh Narain Saboo in Civil Appeal
No. 7037/2004 decided on 09.08.2011. In this case, the question which
had come up for decision before the Apex Court was as to whether
proceedings before the Consumer Forum are "suits" and whether the
embargo of Section 86 of the Code would operate under the Consumer
Forum Act. This question was answered in the negative; the Court was
of the view that the proceedings before the consumer forum do not come
within the sweep of the term „suit‟.
5. The Apex Court in the case of Ethiopian Airlines (supra) had
reiterated the observations of its earlier decision in the case of State of
Karnataka Vs. Vishwabharathi House Building Co-operative Society
and Others (2003) 2 SCC 412. While rejecting the plea sovereign
immunity of Ethiopian Airlines qua commercial transactions, the Apex
Court in the case had also noted:-
"70. Ethiopian Airlines is not entitled to sovereign immunity with respect to a
commercial transaction is also consonant with the holdings of other countries'
courts and with the growing International Law principle of restrictive immunity. For
instance, in England, in Rahimtoola v. H.E.H. The Nizam of Hyderabad and Ors.
(1957) 3 All E.R. 441, Lord Denning found that "there was No. reason why [a
country] should grant to the departments or agencies of foreign governments an
immunity which [the country does] not grant [its] own, provided always that the
matter in dispute arises within the jurisdiction of [the country's] courts and is
properly cognizable by them." Lord Denning also held that "if the dispute
concerns... the commercial transactions of a foreign government... and it arises
properly within the territorial jurisdiction of [a country's] courts, there is No.
ground for granting immunity," finding implicitly that it would not "offend the
dignity of a foreign sovereign to have the merits of such a dispute canvassed in the
domestic courts of another country."
..............................In the modern era, where there is close interconnection between
different countries as far as trade, commerce and business are concerned, the
principle of sovereign immunity can no longer be absolute in the way that it much
earlier was. Countries who participate in trade, commerce and business with
different countries ought to be subjected to normal rules of the market. If State
owned entities would be able to operate with impunity, the rule of law would be
degraded and international trade, commerce and business will come to a grinding
halt. Therefore, we have no hesitation in coming to the conclusion that the Appellant
cannot claim sovereign immunity. The preliminary objection raised by the Appellant
before the court is devoid of any merit and must be rejected."
6. The Apex Court had noted that Ethiopian Airlines must be held
accountable for its contractual and commercial activities and obligations
that it undertakes in India.
7. Applying the ratio of the aforenoted judgment, it is clear from the
averments made in the plaint that this was contractual transaction
entered into between the plaintiff and the defendant; hurdle/embargo of
Section 86 of the Code is clearly not applicable. Even on facts plaintiff
has filed a certificate alleging to be owner of 400 shares of the
defendant company; it having become a public limited company.
8. It is also an undisputed position that for dealing with the
application under Order 7 Rule 11 of the Code, it is only the averments
which are made in the plaint which have to be looked into and not the
defences sought to be set up by the defendant.
9. Be that as it may, the impugned order in no manner suffers from
any infirmity. This petition is clearly an abuse of the process of the
Court. It has been pending before this Court since the year 2004; even
today inspite of ratio of the judgment of Ethiopian Airlines having been
pointed out to the learned counsel for the petitioner, he has made every
effort to distinguish the said judgment but he has failed to do so. Petition
being an abuse of the process of the Court is dismissed with costs of
Rs.10,000/- to be deposited with Delhi High Court Legal Services
Committee.
INDERMEET KAUR, J
MARCH 05, 2012
A
