Holding

The Court held that the Central Government's refusal to grant sanction on vague political grounds was unlawful and set aside the order, directing a reasoned reconsideration as the foreign state could be sued under Section 86 when statutory conditions are satisfied.

Summary

The petitioner, an Indian contractor, performed maintenance work for the Algerian Embassy in 1976 and claimed unpaid dues of about Rs.27,000. He sought permission under Section 86(4)(aa) of the Code of Civil Procedure to sue the Embassy, but the Central Government refused on vague "political grounds." The Supreme Court examined whether such a refusal complied with the doctrine of sovereign immunity, the requirements of Section 86/87 CPC, and principles of natural justice. It held that the foreign state could be sued when the statutory conditions are met and that the Government’s refusal without specific reasons violated natural justice. Consequently, the Court set aside the Government’s order, directed a reconsideration with a reasoned decision, and ordered the Union of India to explore settlement options. The writ petition was disposed in favour of the petitioner.

Issues considered

Whether the Central Government can refuse consent to sue a foreign state under Section 86 CPC on the basis of "political grounds" without specific reasons.
Whether the doctrine of sovereign immunity bars a contractual claim against a foreign embassy possessing immovable property in India.
Whether the order refusing sanction must comply with the principles of natural justice and be reasoned.
Whether there is any statutory provision for appeal against the Central Government's sanction order.
Whether the petitioner’s right to claim unpaid dues is enforceable under Indian law despite foreign state immunity.

Legislation cited

Code of Civil Procedure, 1908s. 86, s. 87
Limitation Act, 1963

Subjects

sovereign immunityforeign stateSection 86 CPCnatural justicepolitical groundright to sueArticle 32writ petitioncontractual claimembassy

Judgment

HARBHAJAN SINGH DHALLA
A
V.
UNION OF INDIA

NOVEMBER 5, 1986

B [SABYASACHI MUKHARJI AND K.N. SINGH, JJ.]

Suit against an ambassador of a foreign state-Doctrine of
immunity and the maxim Par in Parem N-on habet jurisdictionem-
Central Government refusing to grant permission to sue Jhe Embassy
"on political grounds"-Propriety of the order-Code of Civil Proce- (
C dure, 1908, Sections 86 and 87 scope and nature of-Administrative~
orders and Principle of Natural Justice, following of-Right of a citizen '
to carry on the work of maintenance and repairs and Court's duty to
safeguard his right.

The appeUant, an Indian national who had undertaken general
D maintenance work and repairs ·at the Embassy of Algeria and at the
residence of the then ambassador in New Delhi hi the year 1976, in
order to recover certain alleged payments due from the Embassy sought
the consent of the Central Government under section 86(4)(aa) of the
Code of Civil Procedure which was refused on "political grounds" .
Hence the writ petition by the aggrieved citizen.
E
ADowing the petition, the Court,

HELD: I.I Immunity of foreign States to be sued in the domestic
forum of another State was and still is part of the general international
law and international order. In India where the rule of law prevails, the
F foreign State ought to be entitled to such immunities but to no more as
are enjoyed by the domestic state before its own Tribunal. [I 19E, 120H] ~

Mirza Ali Akbar Kashani v. United Arab Republic and Anr.,
[1966] 1SCR319, foUowed.

G Cristina 1938 A.C. 485 at 498; and Rahimtoo/a v. Nizam of
Hyderabad and Anr., 1958 Appeal Cases 379 at 418, quoted with
approval.

Mirza Ali Akbar Kashani v. Unired Arab Republic and Anr., AIR
1960 Calcutta 768, approved.
H

114
H.S. DHALLA v. UNION OF INDIA ll5

\ 1.2 Indian Constitution guarantees·. tbe right ofa citizen to carry A
OD bis business and carry OD trade freely mbject to certain limitations
as contained in the relevant· provisions of the Constitution. In the in-
stant case, the petitioner bad the right to be paid bis reasonable rem;
muneration or dues in accordance with the law subject to the bargain
between the parties and subject further to any reasonable prohibitions
or restrictions under the law of the country. Tbe disputes that bas B
·'! arisen have to be resolved both under the principles of Lex Loci Con-
tractus and lex Situs. Since the disputes have ·not been judicially de-
termined nor the claim held frivolous, a foreign State in this country if
J.... it fulfills tbe conditions stipulated in sub-section (2) of section 86 of the
' J ·.Code of Civil Procedure would be liable to be sued. That would be in
conformity with the Principles of international law as recognised as part C
of our domestic law and in accordance with the Indian Constitution and
-f human rights. [118G-119B, 122G]
1.3 It is true that the provisions both of sectioni; 86 and 87 of the
Code of Civil Procedure are intended to save the foreign states from
harassment which would be caused by the institution of a suit but except D
in· cases where the claim appears to be frivolous patently, the Central
Government should normally accord consent or give sanction against
foreign states unless there are cogent poUtical and other reasons. Nor-
mally, however, it is not the function of tbe Central Government to
attempt to adjudicate upon the merits of the case intended to be made
by the litigants in their proposed suits. It is the function of the courts of E
competent jurisdiction and the Central Government cannot under sec-
tion 86 of the Code usurp that function. Tbe power given to the Central
Government must be exercised in accordance wiJb the principles of
natural justice and in consonance witb'tbe principle that reasons must
appear from tbe order. [123H-124C]
F
Maharaj .Kumar Tokendra Bir Singh v. Secretary, to the Govern-
ment of India, Ministry of Home Affairs and Anr., AIR 1964 SC 1663,
followed.

1.4 There is no provision of any appeal from the order of the
Central Government in either granting or refusing to grant sanction (i
under section 86 of the Code. This sanction or laCk of sanction may,
however, be questioned in the appropriate proceedinp in court but
inasmuch as there is DO provision Of appeal, it is neces.1i11ry that there
should be an objective evaluation and examination by the appropriate
authority of relevant and material factors in exercising its jurisdktion
under section 86 by the Central Government. There is an implicit re- II
116 SUPREME COURT REPORTS (1987] 1 S:.C.R.

A quirement of obsenance of the Principles or natural justice and·also the Y
implicit requirement that decision must he expressed in such a manner
that reasons can he spelled out from such decision. [124H-125B]

1.5 Though this is an administrative order, in a case of this
nature, there should he rell§Ons. H the administrative authorities are
B enjoined to decide the rights of the parties, it is essential that such y
administrative authority should accord fair and proper hearing to the
person to he affected by the order and give sufficiently clear and explicit
reasons. Such reasons must he on relevant material factors objectively 1
considered. There is no claim of any privilege that disclosure of reason~
would undermine the political or national interest of the country. [125C]
c
1.6 The expression 'political ground' covers a wide range and
connotes without further particulars vague and fanciful attitude. The ')....
refusal by the Central Government to accord its sanction to sue the
foreignambassador,inthiscase,isnotinaccordancewithlaw. [124F, 125C]

D
ORIGINAL JURISDICTION: Writ Petition No. 67 of 1985

(Under Article 32 of the Constitution of India)

Dr. Gaurl Shanker (Amicus Curiae) for the Petitioner.
E

1
Madho Sudan Rao, Mrs. K.ittu Kumarmangalam and C. V. Subba
Rao for the Respondent.

The Judgment of the Court was delivered by

F SABY ASACHI MUKHARJI, J. Harbhajan Singh Dhalla, the
petitioner herein asserts that he is going from piller to post to collect
Rs.27,000 which according to him is due from the Algerian Embassy,
he further asserts that this is a case where a little man's small claim is
attempted to be thwarted by technical device. He is an Indian
National. He had undertaken general maintenance work at the
G Embassy of Algeria in India and at the residence of the then Ambas-
sador of Algeria in New Delhi in the year 1976. He claims that his
rightful dues in respect of the said work runs into more than · 'r
Rs.28,500. He says that he has been depri•ed of the same. He states
that he is in search of a remedy but the remedy alludes him and his
claim remains uninvestigated and tindecided.
H
H.S. DHALLA v. UNION OF INDIA (MUKHARJI, J.) 117

The petitioner narrates his story that he had written to all and A
sundry to extend some help in obtaining his dues but nothing tangible
has resulted so far. The petitioner had approached the Ministry of
External Affairs for granting permission to sue the Algerian Embassy
for re;.overing his dues. After numerous letters and passaie of number
of years in the processing of his request, he received a letter from the ·
--.._- Ministry of External Affairs dated 26th November, 1983 which is An- B
nexnre 'A' to the petition. It states, inter alia. "After due considera-
tion the Government of India regrets"that permission to sue the State
• of Algeria cannot be given on political grounds". ·
,).., __
' ' It may.be mentioned that according to the petitioner he had done
the jobs of building maintenance, reconditioning and renovation work c
at the Embassy of Algeria and at the residence of the· then Ambas-
sador of Algeria in the year 1976. He completed the work assigned to
him and submitted the bills for Rs.29 ,000 w.hich were not settled in
toto and he claimed that even the sum of Rs.11,380 had not been,
settled by the Embassy. The balance, according to the petitioner,
accumulated to Rs.27,000 .at the rate of 18% interest. A representa- I)
tion was made to the Ministry of External Affairs. The Ministry
delayed action and then allegedly took up the matter with the Algerian
Embassy who in tum intimated the Ministry that according to the
accounts maintained by the Embassy all bills pertaining to work done
by the petitioner had been settled by the Embassy. The Embassy
further claimed to have issued a cheque bearing cheque No . 245273 E
amounting tci Rs.17,500 in favour of the petitioner on 17th June, 1976
which, according to the Embassy, was encashed by the petitioner the
same day. This fact was sought to be corroborated by the State Bank of
India with whom enquiries were made by the Ministry of External
Affairs. The petitioner, however, claimed. that though he received
payment against this ch~que, he had handed over the amount to the F
Financial Attache of the Embassy who paid him only Rs.3,330. The
petitioner alleged further that when he went to get the remaining
· amount, the financial attache had pointed a revolver at .iliffi and
threatened him with dire consequences. (See Annexure 'A' to .the
affidavit of the petitioner affirmed on 17th March, 1986-p.31 of the
Paper-Book). The petitioner mentianed hereinafter that he had G
requested the Ministry ·of External Affalrs to grant permission to sue
the State of Algeria under section 86 of the Code of Civil Procedure
for realisation of the claim with interest. The petitioner was given a
hearing as required under section 86 of the Code, according to the
respondent, on 2nd November, 1~83, which is, however, denied by the
petitioner. · · H
118 SUPREME COURT REPORTS [1987] 1 S.C.R.

A According to the affidavit of the respondent, which is the Union y-
of India, after giving due consideratiort, the Ministry was of the opi-
nion that no prima facie case had been made out artd it was decided not
to grant permission to the petitioner.

After receipt of the official communication from the Ministry as
B noted above, the petitioner got an appointment with' Late Smt. Indira
Gandhi, the then Prime Minister of India and requested her for com- Y
pensation from Prime Minister's relief fund or some loan from any
Nationalised Bank. He further alleged that Late Shrimati Gandhi
helped the petitioner to get a letter which was addressed to the }
Ministry of Fmance but the appropriate authorities failed to acknow- __,...\
c ledge the grievances and demands of the petitioner. In those circum-
stances the petitioner has approached this Court for issue of an
appropriate wri•. '.'r-

A rule Nisi having been issued on this application, an affidavit on
behalf of the respondent was filed. In the counter-affidavit on behalf
D of the Union of India, the facts as mentioned hereinbefore have been
reiterated and it was stated in the submission that the petition for
recovery of the compensation as claimed was not maintainable. It
involved the disputed questions of facts and there was no cause of
action against the Union of India. The petitioner filed an affidavit in
reply. There are certain annexures indicating as to what happened. -·A..
E For the purpose of disposing of the present application, it is not neces-
sary to refer to the same. ·

We have hear4 the parties. We requested Dr. V. Gauri Shankar,
Senior Advocate of this Court, to help us as amicus curie since the
petitioner was appearing in person. He has rendered valuable assist-
F ance and we record our appreciation and gratitude tor the same.

In this case two aspects require to be emphasized. First is the
right of a citizen to carry on his business and carry on trade freely
subject to limitation under the law. Our Constitution guarantees that
right subject to certain limitations as contained in the relevant articles
G of the Constitution. That right of the petitioner in this case was subject
to the provisions of law controlling, restricting or inhibiting that right.
The petitioner states that he had performed the general maintenance
work at the 'Embassy of Algeria and at the residence of the then
Ambassador of Algeria. Ille had therefore the right to be paid his
reasonable remuneration or dues in accordance with the law subject to
H the bargain between the parties and subject further to any reasonable
H.S. DHALLA v. UNION OF INDIA [MUKHARJI, J.) l lQ

prohibitions or restrictions under the law of the country. There are A
disputes in this case as we have noticed as to what is the amount due, if
any, and further whether any amount was paid as asserted by the
Algerian Embassy and as denied by the petitioner. These disputes
have to be resolved in accordance with the law of this country, both
under the principles of Lex Loci contractus as well as lex situs. The
Union of India has indubitably the jurisdiction and obligation in the B
appropriate case to give sanction but the Union cannot in any arbitrary
manner or administratively adjudicate those disputes or determine the
claim. The petitioner wants to have the disputes adjudicated as he
alleges that he has failed to realise the amount which, according to
him, is reasonably and lawfully due to him. The communication to the
petitioner which is impugned iri this application dated 26th November, c
1983 states that "permission to sue the State of Algeria cannot be
·given on political grounds". But in the affidavit filed on behalf of the
Union of India in these proceedings, it is stated that "The Ministry was.
of the opinion that no prima facie case was made out and the facts of
the case were not superiorily covered under section 86 of Code of Civil
Procedure. It is submitted that under section 86, paras 86( l) and (2), D
the Central Government has discretion to refuse consent as required
under that section." In this application, the court is not concerned with
the correctness or genuineness or otherwise of his claim or assertion,
except perhaps prima facie maintainability. What concerns this Court
) ... is whether the. grievances of the citizen of this country have been
properly and legally dealt with. E

Immunity of foreign States to be sued iri the domestic forum of
another State was and perhaps still is part of the general international
·. law and international order and it is not necessary for the present
'··· purpose to consider its origin. development and the trends in different
countries. As Professor H. Lauterpacht writes in "The British Year- F
book of International Law 1951" (Volume 28) on "The Problem of
·· Jurisdictional Immunities of Foreign States" at page 230 the assump-
tion of jurisdiction over foreign states by the domestic court was con-
sidered at one point of time to be contrary to the dignity of the foreign
states and as such inconsistent with the international courtesy and the
amity of international relations. This has been.in the past a persistent G
theme of judicial decisions. It may be noted that in so far as the
.:;.- doctrine of immunity owed its acceptance to the decisions of the. courts
of the United States it is explained to some extent by the fact that it
was by reference to dignity of the states of the Union that their immu-
nity from suit was urged insistently and repetitiously. During the
debales preceding the adoption of the Virginian Convention in 1978, H
:~

120 ·SUPREME COURT REPORTS [ 1987] I S.C.R.

A John Marshall stressed the element of indignity inflicted upon a state
by making it a defendant in an action. (Elliot, Debates-2nd Ed. 1836,
page 555). It may be of historical amusement specially in the context of
Indian Constitution and the growth and the history of the Indian
Constitution to note that in the leading case of Chisholm v. Georgia,
Dall, Page 419, 425(US) 1793, the main argument for the defendant
B state was that it was a 'degradation of sovereignty in the states to
submit to the supreme judiciary of the United States'. The courts of "<:
'.
the United States have gone to the length of relying on the argument of
dignity in the matter of immunity of foreign states from taxation. In
England, 'dignity', coupled or Identified with 'independence'. played 1
an important part as an explanation of the doctrine of immunity of - \
C foreign states.

Esher L.J. in The Parlement Beige (1880) LR. SP.D. 197, 207
had observed: "From all these authorities it seems to us, although
other reasons have sometimes been suggested, that the real principle
on which the exemption of every sovereign from the jurisdiction of
D every Court has been deduced is that the exercise of such jurisdiction
would be incompatible with his regal dignity-that is to say, with his
absolute independence of every superior authority." In the said case,
Lord Justice Brett at pages 214, 220 of the report referred variously to
'independence and dignity' and to 'equality and independence' as the
basis of immunity. To tlie same effect are the observations of Lord
-A.
E Macmillan in Cristina, [1938] A.C. 485 at 498. According to Professor
Lauterpacht these strained emanations of the notion of dignity were an

1
archaic survival and therefore these could not and should not continue
as a rational basis of immunity.

The legal development of this aspect has been discussed by
F Sompong Sucharitkul in "State 1mmunities and Trading Activities in/
International Law". Professor H. Lauterpacht has also discussed this
aspect in the said article "The Problem of J_urisdictional Immunities of -
Foreign States" in "The British Year Rook of International Law 195/"_

The problem was also discussed by several High Courts and this
G Court: These have been noted in the Bench decision of the Calcutta
High Court in United Arab Republic and another v. Mirza Ali Akbar
Kashani, AIR 1962 Calcutta 387.
'
In India where rule of law prevails, the foreign State ought to be
entitled to such immunities llut to no more as are enjoyed by the
H domestic State before its own Tribunal. This was observed by Ray, J.
H.S. DHALLA v. UNION OF INDIA [MUKHARJI, J.] 121

sitting singly, as the Chief Justice of India then was, in Mirza Ali
Akbar Kashani v. United Arab Republic and another, AIR 1960 A
Calcutta 768.

Lord Denning in Rahimtoola · v. Nizam of Hyderabad and
Another, [1958] Appeal Cases 379 at 418 observed in the context of
English courts: "There is no reason why we should grant to the depart-
ments or agencies of foreign Governments an immunity which we do B
not grant our own, provided always that the matter in dispute arises
within the jurisdiction of our courts and is properly cognizable by
-' ~them". ·

Lord Denning noted in the said decision as early as 1957 that
among the decisions of the English· courts, one would not find con- C
sistency on this aspect. Lord Denning was of the view that there was no
uni.form practice or uniform rule. It may incidentally be noted that. this
was the opinion of Lord Denning expressed in the House of Lords.
Viscount Simonds in his opinion observed that he should not be taken '
to have assented to the views of Lord Denning upon a number of
questions and authorities in regard to which the House of Lords had D I
not the benefit of the arguments of counsel or the judgments of the
courts below.

It is instructive to note what Lord Denning had to say on matters
on which he had expressed views without the help of counsel of the
parties. Lord Denning concluded at pages 423-424 of the report as E
follows: ...

"My Lords, I acknowledge that., in the course of this opi-
nion, I have considered some questions an'd authorities
which were not mentioned by counsel. I am sure they gave
all the help they could and I have only gone iµto it further F
because the law on this subject is of great oonsequence and,
as applied at present, it is held by many to be unsatis-
factory. I venture to think that if there is one place where it
should be reconsidereion principle-without being tied to
particular precedents of a period that is past-it is here in
this House: and if there is one time for it to be done, it is G
now, when the opportunity offers, before the law gets any
more enmeshed in its own net. This I have tried to do.
Whatever the outcome, I hope I may say, as Holt CJ. once
did after he had done much research on his own: "I have
stirred "these points, which wiser heads in time may
settle." (Emphasis supplied). H
122 SUPREME COURT REPORTS [1987] I S.C.R.

A With the observations of Lord Denning on the question of
immunity of the foreign states, the other Law Lords disassociated
themselves. Mr. Justice Bachawat, speaking for the Division Bench of
the Calrutta High Court, rejected the contention urged by counsel in
United Arab Republic'and another v. Mirza Ali Akbar Kashani (supra)
that the foreign State enjoyed the same immunity as a domestic state
B enjoyed and no more. This decision came up in appeal before this
Court in Mirza Ali Akbar Kashani v. United Arab Republic and Anr., >
[ 1966] 1 SCR 319 and this Court upheld the Bench decision of
the
Calcutta High Court and held that section 86(1) of the Code of Civil
Procedure as it stood at the relevant time was the statutory provision
covering a field which would otherwise be covered by the doctrine of
c immunity under ~nternational Law and save and except in ac<;ordancc
with the procedure indicated in section 86 of the Code a suit against a
foreign State would not lie. ,
\

Section 86 at the material time controlled the suit~ against
foreign States and provided that no foreign state might be sued in any
D Court otherWise competent to try the suit except with the consent of
the Central Government certified in writing by a Secretary to that
Government save and except, certain specified type of suits, with
which we are not concerned in this appeal. Sul>-section (2) of section
86 of the Code stipulates inter alia, that no such sanction shall be
given, unless the foreign State is in possession of immovable property
E situate within those limits and is to be sued with reference to such
property or for money charged thereon or by itself or another trade
within the local limits of the jurisdiction of the courts in India.

In this case the petitioner had a right to carry on the work of
maintenance and repairs in this country. This right is g~anted to him j
F under the Constitution and he trades within the local limits of the /"I
courts in India and the foreign State which he wants to sue has immov-
able property situate within the limits of this country. There is dispute
about the petitioner's claim. That dispute has not been judicially
determined. It has not been held that the claim of the petitioner is
frivolous. In that view of the matter, it appears to us that a foreign
G State in this country if it fulfils the conditions stipulated in sub-section ,
(2) of section 86 of the Code would be liable to b~ sued in this country.
That would be in conformity with the principles of international law as
recognised as part of our domestic law and in accordance with our
Constitution and human rights, the power given to the Central
Government must not be exercised arbitrarily or on whimsical grounds
H but upon proper reasons and grounds. The order merely states that the
H.S. DHALLA v. UNION OF INDIA [MUKHARJI, J.[ 123

Governmen.t could not grant the permission to sue the State of Algeria A
on political grounds. In respect of a building where a masonary work
was supervised by a contractor or an architect, how the dignity of a
foreign state or relationship between the two countries would be.
jeopardised or undermined or endangered, it is difficult to compre-
hend or understand from this reason nor are the reasons e1<plained or
B-
demonstrated in the counter-affidavit filed on behalf of the respon-
dent-Government. The reasons given in the counter-affidavit on the
other hand are different namely (a) the government found no prima
facie ground and (b) the claim was outside the provisions of section 86
' of the Code of Civil Procedure. The second ground now stated is
;..,_. patently erroneous and contradictory to the ground mentioned in the
letter dated 26th November, 1983. One should have thought that the c
political relationship between the two countries would be better served
and the image of a foreign State be better established if citizens' grie-
:
..... vances are judicially investigated. This would also be in consonance
/ with human rights.

Sub-section ( 6) of section 86 en joins that opportunity being given D
before passing of the order. There is dispute in this application as to
whether such reasonaJ?le opportunity was given. The respondent-
Union of India asserts that such opportunity was given. No satisfactory
evidence of such opportunity being given was produced before us.

The law on this aspect of sovereign immunity in England is reg- E
ulated by the State Immunity Act, 1978 which introduced or conferred
a number of exceptions to the basic rule of immunity. Although the
Act was designed in part to implement the European Convention of
State Immunity, it goes considerably further than the Convention in
restricting immunities. See in this connection Diecy & Morris 'The
Conflict of Laws,' 10th Edition page 157 (Volume 1). F

Dr. Gauri Shankar had drawn our attention to Maharaj Kumar
Tokendra Bir Singh v. Secretary, to the Government of India, Ministry
of Home Affairs and another, A.LR. 1964 S.C. 1663 which deals with
the conditions under which sanction under section 87B of the Code a.re
obtained and observed that in granting the consent, the Central G
Government was not to adjudicate upop the correctness of the claim.
The Court noted that the power conferred on the Central Government
+- to refuse to accord consent to the proposed suit shall be carefully
exercised. These principles ·would. be applicable to the facts of this
case. It is ti:ue that these provisions both of sections 86 and 87 are
H
intended to save the foreign states from harassment which would be
124 SUPREME COURT REPORTS [1987] 1 S.C.R.

A caused by the institution of a suit but except in cases where the claim
appears to be frivulous patently, the Central Government should nor-
mally accord consent or give sanction against foreign states unless
there are cogent political and other reasons. Normally, however, it is
not the function of the Central Government to attempt to adjudicate
upon the merits of the case intended to be made by the litigants in their
B proposed suits. It is the function of the courts of competent jurisdic-
tion and the Central Government cannot under section 86 of the Code
usurp that function. The power given to the Central Government must
be exercised in accordance with the principles of natural justice and in
consonance with the principle that reasons must appear from the (
order. We may note that in the counter-affidavit we do not find any· -,,-\
C such cogent reasons or due consideration.

It is well to bear in mind the two principles on which sovereign
immunity rest. So far. as the principle expressed in maxim par in parem
non habet jurisdictionem is concerned with the status of equality. The
other principle on which immunity is based is that of non-intervention
D in the internal affairs of other states. See in this connection Brownlie
"Principles of Public International Law" Third Edition J22-325. Much
has happened in different States since Marshall, C.J. of the United
States in The Schooner Exchange v. McFaddon, [!812] 7 Cranch 116;
Green, p. 237 Briggs, p. 413; Bishop, p. 659 explained the principle
and said that a state within its own territory as being "necessarily
E exclusive and absolute". In the days of international trade and com-
merce, international interdependence and international opening of
embassies, in granting sanction the growth of a national law in this
aspect has to be borne in mind. The interpretation of the provisions of
Code of Civil Procedure must be in consonance with the basic princi-
ples of the Indian Constitution.
F
The expression 'political ground' used in the communication of
the Government noted before covers a wide range as explained in
Aiyar's Law Lexicon page 986. It connotes without further particulars
vague and fanciful attitude.

G Corpus Juris Secundum Vol. 48 page 28 at pages 30 to 35 deals
with the various kinds of remedies by a citizen against foreign state. In
granting of sanction or refusing sanction under section 86, the Central
Govemment must bear these factors in mind.

In this case there is no provision of any appeal from the order of
H the Central Government in either granting or refusing to granl sane-
H.S. DHALLA v. UNION OF INDIA lMUKHARJI, J.] 125

tion under section 86 of the Code. This sanction or lack of sanction
A
may, however, he questioned in the appropriate proceedings in court
but inas~uch 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 B
and ·also the implicit requirement that decision must be expressed in
such a manner that reasons can be spelled 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
1 - -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.
c
Such reasons must be on relevant material factors objectively con-
sidered. There is no claim of any privilege that disclosure of reasons
would undermine the political or national interest of the country.
In the aforesaid view of the matter we order as follows: D
I.. Order dated 26th November, 1983 at Annexure 4 to this Peti-
tion is set aside;

2. Union of India is directed to reconsider the matter;

3. The Central Government should also explore the possibilities E
with Algerian authority of mutual settlement either by arbitration or
by other accepted legal norms;

4. The Union of India should pass reasoned order in accordance
with the principle of natural justice and keeping in view· the trend and F
the development of the international law as noted hereinbefore.
We further direct that the Central Government in considering
the question of accord of sanction should ignore the limitation of time
that may have lapsed in view of the action taken in obtaining the
consent in accordance with the principles of the Limitation. Act, -1963.
As the petitioner is. appearing in person the Union of India should G
ensure in considering' the case of the petitioner giving him proper legal
assistance. The writ petition is disposed of in the aforesaid manner.
In the facts and circumstances of the case, the petitioner is en-
titled to the costs of this application including the order for costs by the
order dated 5th February, 1986 passed in this matter. H
S.R.