2011 (8) TMI 1181 - SC - Indian Laws

Consumer Forum proceedings deemed 'suits'; no sovereign immunity for foreign state; Carriage by Air Act prevails.

Ethiopian Airlines Versus Ganesh Narain Saboo

The Supreme Court held that proceedings before the Consumer Forum are considered 'suits' and that a foreign state or its instrumentality, such as ... Whether the appellant Ethiopian Airlines is entitled to sovereign immunity in this case - proceedings before the Consumer Forum are suits - According to the respondent there was gross delay in arrival of the consignment at the destination, which led to deterioration of the goods. the respondent filed a complaint. the State Commission held that the complaint filed by the respondent was not maintainable. The respondent aggrieved by the said order preferred an appeal before the National Consumer Disputes Redressal Commission (`the National Commission'). The National Commission categorically observed in the impugned judgment that Section 86 of the Code of Civil Procedure (for short `C.P.C.') was not applicable since the case in dispute is covered under the provisions of the Consumer Protection Act, 1986 (`the Act'). The National Commission set aside the order passed by the State Commission and remitted it to the State Commission so that the State Commission could decide it afresh in accordance with law. The appellant, aggrieved by the said order, has preferred this appeal on the ground that a foreign State or its instrumentality cannot be proceeded against under the Act without obtaining prior permission from the Central Government. The appellant contends that a foreign State or its instrumentality can legitimately claim sovereign immunity from being proceeded against under the Act in respect of a civil claim. HELD THAT:- 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. It may be pertinent to mention that the Parliament has recognized this fact while passing the Consumer Protection Act, 1986 and the Carriage by Air Act, 1972. Section 86 was itself, a modification and restriction of the principle of foreign sovereign immunity and thus, by limiting Section 86's applicability, the Parliament through these acts, further narrowed a party's ability to successfully plead foreign sovereign immunity. 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. The preliminary objection raised by the appellant before the court is devoid of any merit and must be rejected. However, we agree with the findings of the National Commission so far as it has remitted the matter to the State Commission for adjudication. In the facts and circumstance of this case, we direct the State Commission to dispose of the case as expeditiously as possible. Issues Involved:1. Whether proceedings before the Consumer Forum are considered 'suits'.2. Whether a foreign state or its instrumentality can claim sovereign immunity under the Consumer Protection Act, 1986.3. Applicability of Section 86 of the Code of Civil Procedure (CPC) to proceedings under the Consumer Protection Act.4. Whether the Carriage by Air Act, 1972 overrides the provisions of the CPC in cases involving international air carriers.Detailed Analysis:1. Whether proceedings before the Consumer Forum are considered 'suits':The Supreme Court examined whether proceedings before the Consumer Forum qualify as 'suits'. The term 'suit' is not explicitly defined in the Carriage by Air Act, 1972, nor is it provided that the term will have the same meaning as in the CPC. The Court referred to Black's Law Dictionary, which defines 'suit' as 'any proceeding by a party or parties against another in a court of law.' The Court concluded that in common parlance, the term 'suit' includes all judicial or quasi-judicial proceedings where disputes are adjudicated before an impartial forum. Therefore, proceedings before the Consumer Forum fall within this definition. This interpretation aligns with the earlier judgments in Patel Roadways Limited and Economic Transport Organization, which confirmed that proceedings before Consumer Forums come within the sweep of the term 'suit'.2. Whether a foreign state or its instrumentality can claim sovereign immunity under the Consumer Protection Act, 1986:The appellant, Ethiopian Airlines, contended that it could claim sovereign immunity under the Act. The Court examined the doctrine of sovereign immunity and its application under Indian law. It referred to the judgment in Mirza Ali Akbar Kashani v. The United Arab Republic, which stated that Section 86(1) of the CPC modifies the doctrine of immunity recognized by International Law, allowing foreign states to be sued in Indian courts with the consent of the Central Government. The Court also considered international principles of restrictive immunity, which limit immunity for commercial transactions. The Court concluded that Ethiopian Airlines, engaged in commercial activities, could not claim sovereign immunity under the Consumer Protection Act, 1986.3. Applicability of Section 86 of the Code of Civil Procedure (CPC) to proceedings under the Consumer Protection Act:The appellant argued that Section 86 of the CPC, which requires Central Government consent to sue a foreign state, should apply to proceedings under the Consumer Protection Act. The Court noted that the Consumer Protection Act is a special statute enacted to provide remedies to consumers through a summary procedure, distinct from the CPC. Section 13 of the Act explicitly provides for limited applicability of CPC provisions. The Court emphasized the principle of expressio unius, which implies that the legislature's express inclusion of certain CPC provisions in the Consumer Protection Act indicates the exclusion of others. Therefore, Section 86 of the CPC does not apply to proceedings under the Consumer Protection Act.4. Whether the Carriage by Air Act, 1972 overrides the provisions of the CPC in cases involving international air carriers:The Court examined the Carriage by Air Act, 1972, which gives effect to the Warsaw Convention governing international air carriage. Section 7 of the Act deems high contracting parties to have submitted to the jurisdiction of Indian courts for suits brought under the Act. The Court noted that the Carriage by Air Act is a special statute that provides a comprehensive framework for the rights and liabilities of carriers and passengers. The Act's provisions, including those on jurisdiction and liability, take precedence over general statutes like the CPC. The Court concluded that the Carriage by Air Act, 1972, overrides the CPC in cases involving international air carriers, and Ethiopian Airlines could be subjected to suit in Indian courts without requiring Central Government consent under Section 86 of the CPC.Conclusion:The Supreme Court held that proceedings before the Consumer Forum are considered 'suits' and that Ethiopian Airlines, engaged in commercial activities, cannot claim sovereign immunity under the Consumer Protection Act, 1986. The Court also ruled that Section 86 of the CPC does not apply to proceedings under the Consumer Protection Act, and the Carriage by Air Act, 1972, overrides the CPC in cases involving international air carriers. The National Commission's order was partially set aside, and the matter was remitted to the State Commission for adjudication. The appeal was disposed of, with parties bearing their own costs.