1/14/2018 The State Of Maharashtra vs Czechoslovak Airlines on 23 September, 1977

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The State Of Maharashtra vs Czechoslovak Airlines on 23 September, 1977

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4. This claim for complete immunity or exemption on the basis of the accused being a
department or a part of the Government of Czechoslovakia, was opposed by the prosecution.
It was contended that the Airlines is a commercial concern and the General Manager of that
concern was the employer within the definition of Rule 2(1) of the Payment of Wages (Air
Transport Services) Rules, 1968, so that the immunity from the process of municipal Courts
was not available.

5. The learned trial magistrate observed that there was no dispute that the State of
Czechoslovakia is an independent sovereign State recognised by the Government of India.
He also observed that it was not in dispute that the accused No. 1 is an enterprise, wholly
owned by the State of Czechoslovakia. This latter observation, however, is seriously denied by
Mr. Raja Bhonsale, the learned Public Prosecutor, appearing for the State. According to the
learned Magistrate, the offence was not alleged to have been committed by the accused No. 2
in his individual capacity, therefore, his responsibility was only that of a Manager or a
representative of the accused No. 1. The learned Magistrate upheld the contention of the
accused that there was an absolute sovereign immunity under International law. He relied
upon the decision reported in R.N. Airline Corporation v. Monorama . According to him., the
same principle was accepted by the Bombay High Court in its decision in G.D.R. v. Dynamic
Industrial Etc. (1970) 73 Bom. L.R. 183. He discarded the contention that the principle of
sovereign immunity should not be applied to commercial transactions and actions like the
present case, arising out of such transactions. He therefore, discharged the summons issued
against the accused and the complaint was dismissed. Aggrieved by that decision, the State of
Maharashtra has come in revision.

32. It is however, to be remembered that Section 86 of the Code of Civil Procedure, which
provides for taking a consent of the Central Government before proceeding against a foreign
sovereign in a civil Court, thereby implying that wherever such consent is granted, there
cannot be any claim for sovereign immunity, has been interpreted as not abrogating the
rules of private International law as to sovereign immunity. The provisions of the Code are
viewed as an additional direction or privilege to a foreign sovereign, providing an
immunity from being sued in the municipal Courts of this country without the previous
permission of the Central Government being obtained to the institution of such suit.

Sovereign immunity is not limited to actions arising out of the foreign sovereign's official
acts but extends also to his commercial activities and even to personal contracts like contracts
to marry. No distinction is drawn between acta imperiiand acta gestionis. Such a distinction,
though it is clearly very difficult to draw, is discernible in the practice of many other States,
and it may well be that English Courts have extended the doctrine of sovereign immunity
considerably further than international practice strictly requires. The results have proved
unfortunate and have led to the widespread dissatisfaction.

65. As remarked in that very decision the shift in world opinion can also be gathered from the
"Tate" letter addressed on May 19, 1952, by J.D. Tate, the acting legal adviser of the State

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1/14/2018 The State Of Maharashtra vs Czechoslovak Airlines on 23 September, 1977

Department, to the then acting Attorney-General of the United States notifying him of a
change in the policy of the Department of State with regard to the granting of sovereign
immunity to foreign governments. The letter first refers to what it describes as two
conflicting concepts of sovereign immunity. According to the classical or absolute theory a
sovereign cannot without his consent be made a respondent in the Courts of another
sovereign, while according to the newer or restrictive theory immunity is only recognised
with regard to acts done jure imperil as opposed to acts done jure gestionis. The letter goes on
to list those countries whose Courts accepts the absolute or the restrictive theory respectively-
including in the former class the United States itself and the British Commonwealth-pointing
out that in many of the countries whose Courts still applied the absolute theory academic
writers tended to support the restrictive theory and that a number of those countries were in
fact parties to and had ratified the Brussels Convention of 1926. It refers to the fact that the
United States itself does not claim immunity from suit in foreign Courts where it would not
be entitled to do so according to the restrictive theory, and says that it will hereafter be the
policy of the State Department to follow the restrictive theory of sovereign immunity when
considering the claims of foreign governments for the grant of such immunity.

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