Subversion of law in law-making

The abuse of law in the very making of law may sound deeply ironical. Yet, it is surprisingly common

Subversion of the law in legislation is common. Parliamentary processes are subverted by lawmakers in Parliament, occupants of high office subvert the faith reposed in them by the Constitution, Parliament is subverted by governments, and law made by Parliament is subverted by government departments and regulators while writing subordinate law. This is also correspondingly true of law-making in the states.

Let’s start at the bottom. Regulators are routinely given powers by the legislature to write regulations to “carry out the provisions of” the main law. Since excessive delegation could be struck down as being arbitrary and unconstitutional, the laws also set out some process requirements for writing subordinate law. For example, the Securities Contracts (Regulation) Act imposes a statutory obligation to conduct public consultation on draft amendments to a stock exchange’s bye-laws followed by the formal amendments taking effect when notified in the official gazette. However, routinely, substantive amendments to the bye-laws have been systematically implemented by the capital market regulator through “circulars”, an instrument not even recognised under the law. For form’s sake, every such circular ends with an instruction to stock exchanges to amend their bye-laws but the substantive content is given immediate effect. Often, even the formality of the actual amendment to the bye-law is not implemented but the “law” created through the circulars gets enforced.

Government agencies are notoriously unmindful of the law under which they write rules. They also issue “advisories” and “guidelines”. Unless the rules, advisories or guidelines are challenged through a writ petition and the challenge is upheld, these instruments, however illegal, would operate as “law” and govern the lives of society. Usually such subversions are not challenged unless they cause material hurt. Typically, one would chicken out before the State unless a fight is inevitable. A simple recent example is the successful challenge to the Food Safety and Standards Authority of India’s advisory imposing an obligation to get food products approved before launch.

Moving up the food chain, the subversions played out in Parliament and State Legislatures are of a higher order. Members of the Rajya Sabha have been known to abuse the conduct of proceedings to stall the government’s attempts to pass legislation. To beat this abuse, the government has been merrily labelling all sorts of draft law as “money bills” (draft law governing taxation measures), which need approval of just the Lok Sabha. The principle is that the people directly vote MPs to the Lok Sabha, delegating to them the power to deal with their money. All other laws need approval of both Houses of Parliament. As a check and balance, the Constitution relies on an occupant of high office, the Speaker of the Lok Sabha, to conclusively certify the draft law as a “money bill”. The Aadhaar Act, which is nothing but legislation that gives statutory status to the Unique Identification Authority of India (just like any law that would set up any other government agency like say, the insurance regulator or the Competition Commission of India) was classified by the government as a “money bill” and happily endorsed by the Speaker, enabling circumvention of the Rajya Sabha.

An abuse to beat an abuse is the order of the day. While this may sound fair to some, it exonerates the first abuse that began the trading of abusive conduct, in the eyes of others. The effects can be disastrous. The Foreign Exchange Management Act, brought in with the specific objective to de-criminalise violation of exchange controls, has been made a criminal law again with an amendment that was not even taken to the Rajya Sabha since the amendment was tucked into a money bill. In other words, a law passed by both Houses of Parliament can get amended solely by the Lok Sabha.

Whether the Speaker’s certification of a money bill can be called into question in the teeth of an explicit bar in the Constitution is now under litigation in the Supreme Court. Truly ironical, since the Supreme Court was party to judicial imposition of the “environment compensation charge”, a fiscal measure that ought to have been done through only a money bill. The charge, applicable on entry of vehicles into Delhi, is nothing but an “entry tax” and if not, a “cess” — something the Constitution reserves for members of law-making bodies directly elected by the people. The courts first imposed the tax and the Delhi government legislated later. Deepening the irony is the fact that a nine-judge bench heard detailed arguments on a constitutional challenge to imposition of entry tax by various states on the ground that such tax violated the constitutionally guaranteed freedom of trade, commerce and intercourse within India.

An abuse to beat an abuse in law-making has a rich history. Prior to the newly elected National Democratic Alliance (NDA) government, the United Progressive Alliance government had felt cornered by the parliamentary standing committee, which was simply sitting on its review of amendments proposed to the Sebi Act. The government used, for the third time in a row, its power to promulgate a presidential ordinance. Since it would fall foul of the analysis in a celebrated Supreme Court judgment on the use of ordinances, the government simply tucked in a single new provision in the third version, to be able to claim that the third ordinance was not a third promulgation of the same ordinance. The NDA government took the cue. Amendments to the land acquisition law were effected thrice through an ordinance.

With Lokayukta (ombudsman) laws, some state legislatures have been cleverer than tax-structuring practitioners who are criticised. Where the law requires a due process to appoint or sack the ombudsman, they would repeal the law itself with a simple majority, or worse, through an ordinance. The office of the ombudsman or the provisions that govern appointments would vanish. New legislation would follow under which an incumbent of the government’s choice could get appointed.

When law-making institutions violate law when making law, they set the tone for the kind of conduct that is acceptable from society. The devil does quote the scripture.

This piece was published in the column titled Without Contempt in the Business Standard edition dated October 25, 2016

Nobel prizes, peace and plebiscite

One must consult the public when making law but law-making cannot be left to the masses

Earlier this month, the Nobel Peace Prize was conferred on Colombian President Juan Manuel Santos. He had brokered a peace deal attempting to end a half-century-old civil war between the republic and the Revolutionary Armed Forces of Colombia, called the “FARC”. The Nobel Prize could be a consolation prize. Just days before the announcement of the Nobel Peace Prize, the people of Colombia voted against the peace deal in a referendum.

The margin of defeat had been narrow: 50.2 per cent to 49.8 per cent. Even if the peace deal had won the referendum it would be obvious that nearly one half of the nation was against it. When 260,000 people have been killed in five decades, it would be natural that public emotions against forgiveness could be high. It is easier to declare war than to make peace embracing an enemy. The political campaign that actually scuttled the peace deal related to two primary features. FARC leaders who would confess to war crimes in a special tribunal would get an eight-year sentence of “restricted liberty” — stopping short of going to jail. For the next two elections, the FARC would have a token reservation of 10 seats in the 268-seat legislature.

In successfully opposing these features, a deal that would have enabled removing land mines, locating “disappeared people”, replacing cocaine agriculture, rehabilitating child warriors, and more importantly, bringing to an end a half-century civil war, was defeated. One would have thought that even if unwilling to forgive, the people of Colombia would have been willing to pay even an expensive price to secure peace. Opposition to the peace deal could have also been based on the premise of getting maximum political capital without serious intent to derail peace. Yet, in the making of history, one has to be careful about what one wishes for. Strident political opposition in the belief that momentous changes provide a chance to build political visibility without much expense (or damage) can actually lead to inexplicable outcomes.

Referendums are a complicated business. They require boxing highly nuanced and complicated situations into the binary compass of a yes-or-no vote. Each side can overstate the risks and rewards of the outcome. In situations where there can never be a single correct answer (and life is full of them) referendums can go horribly wrong. In the case of Colombia, if the will of the people was indeed not for peace on these terms, even the deal would eventually not have been honoured, and civil war could have broken out later when suppressed resentment would have festered long enough for new eruptions.

Take the Brexit referendum. A marginal vote in the United Kingdom as a whole supported leaving the European Union (51.9 per cent to 48.1 per cent) — a true reflection of the values a majority of the people of the UK support. However, Scotland had voted emphatically to remain in the EU (62 per cent to 38 per cent) — a true reflection of the values an overwhelming majority of the people support. The Scottish were out-voted by those in England and Wales. Only two years earlier, the Scots had chosen to remain in the UK with a highly-divisive-although-decisive vote (55.3 per cent to 44.7 per cent). Now, they may want another referendum on whether to stay in a UK that is not part of the EU.

This is why in almost every political system law-making is not left to the masses on the street. One must consult the public when making law but law-making is the job of lawmakers. The masses are free to choose law-makers and empower them to make laws. Their role stops there. Mature political systems have an Upper House (Rajya Sabha) with diverse indirectly elected representation to be a check and balance on the directly elected representatives of the masses in the Lower House (Lok Sabha). To ensure that those in the Rajya Sabha do not get deluded, the purse strings are held only by those in the Lok Sabha. All matters involving taking out or bringing in money into the treasury are passed by the Lok Sabha even if the Rajya Sabha has a diametrically opposite view — more about that in the next column.

In Australia, perhaps fearful of being seen taking positions on a controversial subject, a non-binding plebiscite has been suggested for determining if gay marriages should be made legal. In other words, although the people of Australia have voted Members of Parliament, the MPs want the masses to provide inputs. This may be a smart move for politicians on both sides of the divide, who could then say they only followed the diktat of the people. In republics that have a robust constitution, even if the masses desire to change it, they would have to follow the constitution in how they change it. The extent to which basic features can be tampered with would also fall for interpretation by courts that are charged with interpreting the constitution.

Picture the Income Declaration Scheme, 2016, to give amnesty for past tax violations being put to vote in a referendum akin to Colombia placing controlled amnesty to the FARC before her people. Likewise, picture a proposal to convert the Siachen Glacier into a no-man’s land to seek a mutually face-saving cross-border peace deal with Pakistan being put to a referendum. An electorate that voted a government into power impressed with an anti-black money campaign would likely have rejected an amnesty. If spun well, it may have supported the scheme too. Yet, urban Indian voters who may be happy to grant amnesty to tax violators would be highly likely to consider vacating Siachen as an unthinkable non-negotiable slight to their national pride.

It is for a reason that in the 67 years after the Constitution took effect in India, there have been just two real referendums and that too in small regions and under controlled circumstances. In Goa, after an Indian military invasion drove out the Portuguese, a referendum was held not about whether to join India but about whether to join Maharashtra or to be a Union Territory. Goans eventually got full statehood only in 1987 — a move that the current Delhi government is working hard to emulate.

In 1975 (the year of the Emergency) the Indian military moved into Sikkim (then an independent country although a protectorate) to arrest the king and take charge before a referendum was held on whether to join India. A 97.5 per cent vote to abolish the monarchy and merge with India emerged. In Kashmir, a recommended plebiscite has been rendered impossible by both India and Pakistan. Neither nation will vacate the portion it holds for the plebiscite to be fair. The demography of Kashmir on each side of the Line of Control has been differently but indelibly altered. No Nobel Prize will get awarded for peace here in the foreseeable future, even as a consolation prize.

This edition of the column Without Contempt was published in the Business Standard on October 11, 2016