Foreign-State immunity under civil procedure can be waived by long participation in suit proceedings without timely objection.

Waiver of the protection under section 86 of the Code of Civil Procedure was found where the defendant, despite claiming foreign-State immunity, had appeared, filed pleadings, participated in interim proceedings and given undertakings for many years before objecting; that conduct amounted to submission to the court's jurisdiction, so prior consent could no longer be insisted upon. The court also noted that a wholly government-owned company may, in an appropriate case, be treated as the instrumentality or alter ego of a foreign State for section 86 purposes, and that commercial activity does not by itself exclude the statutory protection. On the facts, however, the waiver made the suit maintainable.

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Issues: (i) Whether the appellant had waived the protection available under section 86 of the Code of Civil Procedure, 1908 by submitting to the jurisdiction of the Court and participating in the proceedings for a long period without raising the objection. (ii) Whether the appellant, though incorporated as a company and engaged in commercial operations, was a foreign State or its alter ego so as to attract the bar of section 86 and require prior consent of the Central Government.

Issue (i): Whether the appellant had waived the protection available under section 86 of the Code of Civil Procedure, 1908 by submitting to the jurisdiction of the Court and participating in the proceedings for a long period without raising the objection.

Analysis: The objection under section 86 was raised only after about sixteen years from the institution of the suit, although the appellant had already appeared, filed pleadings, taken part in interim proceedings and furnished undertakings to the Court. Waiver is an intentional relinquishment of a known right, and the conduct of the appellant showed submission to the jurisdiction of the Court. The right under section 86 was available from the inception of the provision and no new right was created by later judicial exposition.

Conclusion: The appellant waived the protection, if any, under section 86 and could not resist the suit on the ground of want of prior consent.

Issue (ii): Whether the appellant, though incorporated as a company and engaged in commercial operations, was a foreign State or its alter ego so as to attract the bar of section 86 and require prior consent of the Central Government.

Analysis: A corporate body wholly owned and controlled by a foreign Government may, in a proper case, be treated as the instrumentality or alter ego of that foreign State for the purpose of section 86. The appellant's shareholding remained entirely in governmental hands, and its incorporation as a company did not by itself destroy the character claimed for immunity purposes. The fact that it carried on commercial activity did not exclude section 86, because the statutory scheme permits consent even in commercial matters. However, once waiver was established, the protection could no longer be invoked to defeat the suit.

Conclusion: The appellant was entitled to claim foreign State protection in principle, but the suit remained maintainable because that protection had been waived.

Final Conclusion: The appeal failed since the objection based on section 86 could not be sustained after the appellant's conduct amounted to waiver, and the suit was held maintainable.

Ratio Decidendi: A foreign-State immunity objection under section 86 of the Code of Civil Procedure, 1908 can be waived by conduct amounting to submission to the court's jurisdiction, and a wholly Government-owned corporate undertaking may fall within the statutory protection where the facts justify treating it as the foreign State's instrumentality.

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