Sovereign Immunity in its Several Senses: Act of State, Immunity in Tort, Personal Immunity and Foreign State Immunity

The expression sovereign immunity is used in Indian law for at least four distinct things, and treating them as one produces confusion. It describes the immunity of the State from liability in tort for acts done in the exercise of sovereign functions, which is the sense examined elsewhere. It describes the doctrine of act of State, under which certain exercises of sovereign power are not cognisable by municipal courts at all. It describes the personal immunity conferred on the President and the Governors by Article 361. And it describes the immunity of a foreign State from the jurisdiction of Indian courts, which rests on entirely different principles and has moved decisively in the opposite direction. This topic sets out those four senses, the rival line of Indian authority that narrowed the first, and how each stands today.

1. The Four Senses

Sense	What it means	Present position
Immunity in tort	The State is not liable for torts committed in the exercise of sovereign functions	Survives formally but is confined to inalienable functions and is unavailable in public law
Act of State	Certain exercises of sovereign power are not cognisable by municipal courts at all	Confined to acts against persons not owing allegiance, and not to acts under municipal law
Personal immunity under Article 361	The President and Governors are not answerable to any court for the exercise of their powers, and no process issues against them personally	Intact as to personal answerability; the validity of the action itself remains reviewable
Foreign State immunity	A foreign State is not subject to the jurisdiction of Indian courts	Restrictive; immunity does not extend to commercial activity

2. Act of State and the Rival Indian Line

📖 Secretary of State for India v. Hari Bhanji, ILR (1882) 5 Mad 273

Facts: Salt was transported by a merchant after paying the duty then leviable. While the goods were in transit the duty was raised, and the authorities demanded and collected the difference before permitting delivery. The merchant sued the Secretary of State for the excess amount recovered. The Government relied on the reasoning in the P. and O. Steam Navigation case, contending that the levy and collection of customs duty was an exercise of sovereign power for which no action lay.

Held: The Madras High Court held the suit maintainable and decreed it, and in doing so read the earlier decision much more narrowly than the Government contended. It held that the immunity recognised in P. and O. is confined to acts of State properly so called, that is, acts done in the exercise of sovereign power which are not justiciable by municipal courts at all, such as acts of war, the making of treaties and the annexation of territory; it does not extend to every act done under a claim of sovereign authority. Where the Government acts under the sanction of municipal law, and the complaint is that it has exceeded or misapplied that law, the ordinary courts have jurisdiction and the plea of sovereign immunity is not available. The Court observed that the East India Company's immunity had never been understood to cover acts done in the exercise of powers conferred by statute.

Ratio: Sovereign immunity is confined to acts of State not cognisable by municipal courts. Where the Government acts under municipal law, its acts are justiciable and the immunity does not apply, however sovereign the function may appear.

The decision represents the rival line to the broad reading of P. and O., and although Kasturi Lal followed the broader view in 1965, the narrowing effected by N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205 brought the law substantially back to the position stated in Hari Bhanji more than a century earlier: statutory power is not sovereign power, and only inalienable functions attract the immunity.

3. Act of State Today

Confined to persons not owing allegiance. An act of State can be pleaded against a foreign national or a person not a citizen and not under the protection of the State; it cannot be pleaded against a citizen.
Classical instances are acts of war, the making and breaking of treaties, the annexation or cession of territory and the recognition of States.
It is not available for acts done under municipal law, which are justiciable however important the function (Hari Bhanji).
It does not survive the assumption of sovereignty. Once territory has been acquired and the Constitution extended to it, the inhabitants are entitled to the protection of the ordinary law.
It is distinct from immunity in tort, which concerns liability for wrongs rather than the jurisdiction of the court.

4. Personal Immunity under Article 361

Article 361 in substance

Clause (1) provides that the President and the Governor of a State shall not be answerable to any court for the exercise and performance of the powers and duties of their office, or for any act done or purporting to be done in the exercise of those powers and duties; with a proviso preserving the right to bring appropriate proceedings against the Government. Clause (2) provides that no criminal proceedings whatsoever shall be instituted or continued against them in any court during the term of office. Clause (3) provides that no process for arrest or imprisonment shall issue against them during the term. Clause (4) provides that no civil proceedings in which relief is claimed against them in respect of anything done in a personal capacity shall be instituted during the term except after two months' notice.

The immunity is personal and temporal: it protects the holder from being made answerable and from process during the term, and it does not validate the act. The validity of a Proclamation or an order issued by the President or a Governor remains fully examinable, as the decisions on Article 356 establish, and the proviso to clause (1) preserves proceedings against the Government itself. What cannot be done is to summon the holder, to implead him personally or to prosecute him while he holds office.

5. Foreign State Immunity

📖 Ethiopian Airlines v. Ganesh Narain Saboo, (2011) 8 SCC 539

Facts: A consignment carried by a foreign national airline, wholly owned by a foreign State, was damaged, and a complaint was filed before the consumer forum. The airline contended that it was an instrumentality of a foreign sovereign State and that section 86 of the Code of Civil Procedure barred proceedings against it without the consent of the Central Government, so the forum had no jurisdiction.

Held: The Supreme Court rejected the plea of immunity. It held that the doctrine of absolute sovereign immunity has given way internationally to the restrictive theory, under which a State is immune in respect of its sovereign or public acts but not in respect of its commercial or trading activities; the modern position is reflected in the United Nations Convention on Jurisdictional Immunities of States and Their Property and in the legislation of many countries. The Court held that where a foreign State or its instrumentality engages in commercial activity within India, it must be answerable in the Indian courts for obligations arising from that activity, and cannot claim the protection meant for sovereign acts; to hold otherwise would leave Indian consumers and traders without a remedy against entities doing business here. The complaint was accordingly held maintainable.

Ratio: The restrictive theory of foreign State immunity applies in India. A foreign State or its instrumentality carrying on commercial activity is answerable in Indian courts in respect of that activity, whatever its sovereign character otherwise.

6. The Four Senses Distinguished

Basis	Immunity in tort	Act of State	Article 361	Foreign State immunity
Who is protected	The Indian State	The Indian State	The President and Governors personally	A foreign State and its instrumentalities
What is excluded	Liability for the tort	The jurisdiction of the court	Personal answerability and process	The jurisdiction of the court
Against whom pleadable	Anyone	Persons not owing allegiance	Anyone	Anyone suing in India
Basis	Article 300 and pre-Constitution law	The nature of sovereign acts	Express constitutional provision	International law and comity
Present reach	Inalienable functions only	Very narrow	Intact but personal and temporal	Restrictive; commercial acts excluded
Does it validate the act?	No; it bars the remedy	The act is not examinable	No; the act remains reviewable	No; it bars the forum

⚠ Immunity from liability, immunity from jurisdiction and immunity from process are three different things

Much of the confusion in this area comes from treating every immunity as the same kind of bar. Immunity in tort concedes that the court may hear the case and holds that no liability attaches; the claim fails on the merits. Act of State and foreign State immunity deny that the court may hear the matter at all; the claim fails for want of jurisdiction, and the merits are never reached. Article 361 denies neither: the act may be examined and the Government may be sued, but the holder of the office cannot be made a party or served with process while he remains in office. Identifying which kind of bar is being asserted settles most of the questions that arise, including whether the claim may be brought against somebody else, whether it may be brought later, and whether the underlying action remains open to challenge.

7. The Position in Summary

Sovereign immunity is used in four distinct senses: immunity in tort, act of State, the personal immunity of the President and Governors under Article 361, and foreign State immunity.
Sovereign immunity in tort is confined to acts of State not cognisable by municipal courts, and where the Government acts under municipal law its acts are justiciable (Hari Bhanji), a position substantially restored by N. Nagendra Rao.
Act of State is now very narrow, being pleadable only against persons not owing allegiance and not in respect of acts done under municipal law.
Article 361 confers a personal and temporal immunity from answerability and process on the President and Governors, without validating the act, whose legality remains examinable and against which proceedings may be brought against the Government.
Foreign State immunity follows the restrictive theory: a foreign State or instrumentality carrying on commercial activity in India is answerable in Indian courts in respect of that activity (Ethiopian Airlines).

8. Related Topics and Provisions

Doctrine of Sovereign Immunity (Topic 134) and Government Liability in Tort (Topic 132).
Sovereign Immunity vs Constitutional Tort (Topic 137) and Public Law Compensation (Topic 133).
Vicarious Liability of the State (Topic 136) and Liability for Negligence (Topic 135).
Parliamentary Control over the Executive (Topic 150): the review of Proclamations notwithstanding Article 361.
Rule of Law (Topic 8) and Dicey's Rule of Law (Topic 9).
Constitution of India: Articles 294, 299, 300 and 361; Code of Civil Procedure, 1908, sections 80 and 86.