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Shanti Prasad Agarwalla And Others v. Union Of India And Others
Factual and Procedural Background
The petitioners own premises No. 31, Shakespeare Sarani, Calcutta, which had been leased to the Consulate General of the USSR on December 14, 1957 for 23 years at a rent of Rs 8,000 per month. The lease was due to expire on January 14, 1981. On July 6, 1980, the petitioners notified the Consulate that they would not extend the lease and demanded possession.
Because Section 86 of the Code of Civil Procedure (CPC) requires Central Government consent before suing a foreign State, the petitioners applied to the Government on December 5, 1980. When no decision was forthcoming, they:
- Filed a writ petition in the Calcutta High Court, securing an order on January 21, 1982 directing the Government to decide the application within four months.
- Filed a second writ when that order was ignored; on June 21, 1983 the High Court again directed a decision, this time within one month.
- Filed the present writ petition under Article 32 of the Constitution before the Supreme Court after continued inaction.
During pendency of the Article 32 petition, the Central Government finally issued an order dated February 1, 1984 refusing consent “on political grounds.” The petition was amended to challenge this refusal.
Legal Issues Presented
- Whether the Central Government’s refusal of consent under Section 86 CPC on the vague ground of “political grounds,” without disclosing reasons, is legally sustainable.
- Whether the impugned order should be quashed and the matter remitted to the Central Government for a fresh, reasoned decision in compliance with Section 86 and principles of natural justice.
Arguments of the Parties
Petitioners’ Arguments
- The refusal “on political grounds” contravenes the principles laid down by the Supreme Court in Mirza Ali Akbar Kashani v. United Arab Republic and Harbhajan Singh Dhalla v. Union of India, which require an objective, reasoned decision under Section 86.
- Lack of specific reasons violates natural justice because the petitioners cannot meaningfully challenge an opaque decision.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Mirza Ali Akbar Kashani v. United Arab Republic (1966 1 SCR 319; AIR 1966 SC 230) | Section 86 imposes two limitations: (a) suit against a foreign State requires Central Government consent; (b) consent can be granted only if the case falls within clauses (a)–(d) of §86(2), providing statutory guidance to the Government. | Invoked to show that the Government must act within the confines of §86(2) and cannot rely on vague, extraneous considerations. |
| Harbhajan Singh Dhalla v. Union of India (1986 4 SCC 678) | Even though the decision under §86 is administrative, it must follow natural justice: give a fair hearing and record clear, objective reasons. | Relied upon to invalidate the bare reference to “political grounds” as insufficient and contrary to the duty to provide intelligible reasons. |
Court's Reasoning and Analysis
The Supreme Court found the expression “political grounds” unintelligible and unsupported by any disclosed material. Citing the two earlier decisions, the Court held that the Central Government must:
- Confine its consideration to the criteria enumerated in Section 86(2) CPC.
- Observe natural justice by granting the petitioners a hearing and issuing a reasoned, comprehensible order.
Because the impugned order lacked such reasons and gave no indication of the statutory factors considered, the Court declared it unsustainable. It therefore quashed Order No. 10245-EE/82 dated February 1, 1984 and remitted the matter to the Government for a fresh decision after hearing the petitioners.
The Court also noted that a negotiated settlement was “pre-eminently” suitable, especially given that the Government had reportedly secured alternate premises for the Consulate.
Holding and Implications
Petitions ALLOWED; impugned order quashed; matter remitted. The Central Government must reconsider the petitioners’ request for consent under Section 86(2)(c) CPC and issue a reasoned decision within three months. No costs were awarded.
Implications: The ruling reinforces that decisions under Section 86 must be reasoned and consistent with statutory criteria, underscoring the applicability of natural justice even to administrative consents involving foreign States. While it sets no new legal precedent, it affirms existing jurisprudence and offers the parties an opportunity for either a properly reasoned governmental decision or an amicable settlement.
Order
1. The petitioners are the owners of premises No. 31, Shakespeare Sarani, Calcutta, which is in the occupation of the Consulate General of USSR as a tenant. It was leased on December 14, 1957 for a period of 23 years on a rent of Rs 8000 per month. The period of 23 years was to expire on January 14, 1981. Before the expiry of the said period, the petitioners served a notice dated July 6, 1980 intimating the Consulate General that they did not intend to extend the lease any further and demanded possession of the premises. As the possession was not delivered, they desired to sue for eviction and sought the consent of the Central Government to do so as required by Section 86 of the Code of Civil Procedure. The requisition for consent was sent to the Central Government on December 5, 1980. As no reply was received thereto within a reasonable time, the petitioners filed a writ petition in the High Court of Calcutta for a mandamus to command the Central Government to take a decision on their application for consent. In the said writ petition, the High Court passed an order on January 21, 1982 directing the Central Government to dispose of the application in accordance with law, after giving the petitioners an opportunity of being heard, as early as possible, preferably within a period of four months from the date of the order. Despite the passing of the said order as the Central Government failed to dispose of the application within the time allowed, the petitioners filed a second writ petition seeking a mandamus to command the Central Government to dispose of their application of December 5, 1980 in accordance with law. This second writ petition was disposed of on June 21, 1983 with a direction that the application should be disposed of within a month's time. Even that order was not complied with. The petitioners were then constrained to file the present writ petition under Article 32 of the Constitution in this Court. During the pendency of this writ petition, the Central Government passed an order dated February 1, 1984 rejecting the petitioners' application in the following terms:
“With reference to our correspondence with you regarding your application for permission for legal action against the Consulate General of the USSR, 31, Shakespeare Sarani, Calcutta, under Section 86 of the Civil Procedure Code, I am directed to state that this Ministry is unable to give permission to you on political grounds for such action.”
2. After the receipt of this communication, the petitioners amended the writ petition and sought a relief for quashing this communication also.
3. The learned counsel for the petitioners submitted that the aforequoted order cannot be sustained in view of two decisions of this Court, viz., Mirza Ali Akbar Kashani v. United Arab Republic (1966) 1 SCR 319, AIR 1966 SC 230 and Harbhajan Singh Dhalla v. Union of India (1986) 4 SCC 678.
4. In the first mentioned case, this Court observed as under: (SCR p. 332)
“The limitation on the liability of foreign States to be sued is twofold. The first limitation is that such a suit cannot be instituted except with the consent of the Central Government certified in writing by a Secretary to that government. This requirement shows the anxiety of the legislature to save foreign States from frivolous or unjustified claims. The second limitation is that the Central Government shall not give consent unless it appears to the Central Government that the case falls under one or the other of clauses (a) to (d) of Section 86(2). In other words, the legislature has given sufficient guidance to the Central Government to enable the said government to decide the question as to when consent should be given to a suit being filed against the Ruler of a foreign State.”
5. In the second case, the petitioner, an Indian national, had performed general maintenance work at the Embassy of Algeria and at the residence of the Ambassador of Algeria in New Delhi but he was not paid his dues and desired to sue the Algerian Embassy to recover the same. He approached the Ministry of External Affairs, Government of India, for permission to sue the State of Algeria under Section 86 of the Code for realisation of his dues. The Ministry of External Affairs, however, refused permission “on political grounds”, as in the present case. The petitioner filed a writ petition under Article 32 of the Constitution. Dealing with the ground on which the consent was refused, this Court observed that it was difficult to comprehend what was meant by the bald expression “political grounds” in the absence of further particulars. In paragraph 26 page 688, this Court summed up as under:
“This sanction or lack of sanction may, however, be questioned in the appropriate proceedings in court but inasmuch as there is no provision of appeal, it is necessary that there should be an objective evaluation and examination by the appropriate authority of relevant and material factors in exercising its jurisdiction under Section 86 by the Central Government. There is an implicit requirement of observance of the principles of natural justice and also the implicit requirement that the decision must be expressed in such a manner that reasons can be spelt out from such decision. Though this is an administrative order in a case of this nature there should be reasons. If the administrative authorities are enjoined to decide the rights of the parties, it is essential that such administrative authority should accord fair and proper hearing to the person to be affected by the order and give sufficiently clear and explicit reasons. Such reasons must be on relevant material factors objectively considered.”
(emphasis supplied)
6. In the present case also, it is difficult to comprehend what is meant by the expression “political grounds” used in the impugned order. It is not clear what political considerations necessitated the rejection of the application. The Central Government while considering the application under Section 86 of the Code must decide the application in accordance with the provisions of the section itself and state clearly and intelligibly its reasons for rejecting the application. In the instant case, we are unable to appreciate what political considerations weighed with the Central Government for rejecting the application. We, therefore, have no alternative but to quash the impugned Order No. 10245-EE/82 dated February 1, 1984 and remit the matter to the Central Government for taking a fresh decision in accordance with law after giving an opportunity to the petitioners of being heard.
7. We may incidentally point out that when this matter came up for hearing before this Court on July 23, 1985, this Court observed that it considered the case one which was pre-eminently fit for a settlement. It appears that thereafter no further progress seems to have been made in the direction of arriving at an amicable settlement. We are also told by the learned counsel for the petitioners that in the meantime the Government of India has acquired another land in Raja Santosh Road, Alipur for the Consulate. If that be so, we think that an amicable settlement would not be difficult to reach.
8. In the result, these petitions are allowed and the rule is made absolute to the effect that the Central Government will consider afresh the request of the petitioners for grant of consent under Section 86(2)(c) of the Code at an early date, preferably within three months from today. There will be no order as to costs.
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