DEEPAK WADHWA Vs. AEROFLOT

JUDGEMENT

(1.) The question raised in tins case is whether the principles of International Law as transformed from time to time about sovereign immunity apply in India in face of the provisions contained in Section 86 of the Code of Civil Procedure, 1908.

(2.) Mr. Deepak Wadhwa, plaintiff/decree-holder obtained from this Court on May 28, 1981 an ex-parte decree for the recovery of Rs. 4,32,066 with costs against AEROFLOT (Soyiet Airlines). He took out on July 22, 1981 the execution of the decree and prayed for the issue of warrants of attachment of the amount lying in the current account No. 30/84011 with State Bank of India, Main Branch, Parliament Street, New Delhi in the name of AEROFLOT and then calling the amount for payment to the decree-holder. A show cause notice was issued to the judgment-debtor who filed an application, being E.A. 174181, for declaring that the suit instituted by the decree-holder was incompetent, invalid and untenable and the decree is non-est. inexecutable and a nullity. The plea is that AEROFLOT (Soviet Airlines) is a General Department of International Air Services of the U.S.S.R.; that it is a Governmental organisation of the Union of Soviet Socialist Republics and all its belongings are the property of the U.S.S.R.; that it is a foreign State within the meaning of the expression as used in Section 86 of the Code of Civil Procedure, 1908 (for short called the Code); that it could not be sued except with the consent of the Central Government certified in writing by a Secretary to that Government as provided in sub-section (1) of Section 86 and that the requisite consent has not been obtained. Similarly no' decree can be executed against the property of a foreign State except with the consent of the Central Government by a Secretary to that Government, as provided in sub-section (3) of Section 86.

(3.) The defence of the decree-holder is two-fold. Firstly, he says that the petition under Section 86 of the Code is not maintainable since the suit filed by the plaintiff is under a special procedure prescribed under the Carriage by Air Act, 1972. The decision as to how to regulate the rights and liabilities of the carriers in international flights was made on October 12, 1929 in a Convention for the unification of certain rules relating to international carriage by air which Convention was signed at Warsa on October 12, 1929 which was amended by the Hague Protocol on September 28, 1955 and our Parliament had enacted Act 69 of 1972 i.e. the Carriage by Air Act, 1972 (for short called the Act) to give effect to the aforesaid Convention for the international carriage. The provisions of the aforesaid convention have been embodied in the Schedules to the Act and have the force of law in India in relation to any carriage by air to which these rules apply irrespective of the nationality of the aircraft performing the carriage. Since U.S.S.R. is a party to the convention of Warsa, accordingly, the provisions of the Act are applicable to the facts of the present case as the suit is under a special enactment and not under an ordinary law. The Act is a special Act to deal with the rights' and liabilities of the carriers as well as the forum of any action by damages. The contention is that the provisions of Section 7(1) of the Act will prevail over Section 86(1) of the Code. Consequently, the decree obtained by the plaintiff/decree-holder is argued as valid in law and no permission under Section 86 of the Code is required to be obtained for execution. Secondly, it is denied that AEROFLOT (Soviet Airlines) is a General Department of International Air Services of the Union of the Soviet Socialist Republics. It is denied that the same is a Governmental Organisation of the Union of Soviet Socialist Republics. Even if it is found that the Airlines AEROFLOT is wholly owned by the Government of U.S.S.R., the submission is that as a carrier as distinct from the Government off U.S.S.R., it is placed on the same footing as Air India/Air France/other carriers which are operating in India. At the bearing, this second defence is developed that the doctrine of sovereign immunity is not applicable to the ordinary commercial transactions, as distinct from the Governmental acts' of a sovereign State. The suit of the plaintiff/ decree-holder arose out of the breach of contract for the carriage of the decree-holder and his goods from Delhi to Frankfurt by AEROFLOT (Soviet Airlines) by flight No. SE-558. The decree-holder claimed in the suit Rs. 25,066.60 as cost of the articles contained in the attache case vide Baggage Ticket No. S.V. No. 47163 not delivered back to the decree- holder and Rs. 7,000 as refund of the airfreight charges from Delhi to Frankfurt one way as the Journey was not allowed to be performed. In addition, the decree-holder claimed Rs. 4 lacs as damages in the form of 10 per cent loss of profit on firm contracts, 12 per cent incentives which was to be given to the decree-holder by Government of India on exports and 30 per cent loss of profits of replenishment licenses, caused on account of the inability of the decree-holder to reach for the purposes of entering into binding contracts with the intending purchasers at the destination in time because of the facts, neglects and defaults of AEROFLOT.