Tag Archives: rule of law

Is the path to god one of anarchy?

Criticising a Supreme Court judgment is one facet of democracy, but physically violating the enforcement of the ruling, is just unacceptable promotion of anarchy

Somasekhar Sundaresan

The state of Kerala is the epicentre of unrest. Ranging from a retired Supreme Court judge at one end of the spectrum to the rabid-law-illiterate at the other end, a concerted vocal bunch of critics is incessantly attacking the majesty of the Supreme Court in their opposition to a Constitutional Bench’s ruling in the Sabarimala case. The choice of words, quite apart from the choice of arguments, and in particular, personalised ad hominem attacks on individual judges is incessant among some of the devout.

Religion has always been a holy cow in our Republic. “Hum jail jayenge lekin fine nahi bharenge,” said a popular “guru” with a penchant for a double-prefixed honorific, when a penalty was imposed on him by the environment law tribunal for desecrating the environment around the Yamuna river. His gigantic festivities entailed our armed forces building the infrastructure for his events. The head of state graced his event. The impunity in his conduct was writ large. Many “literate” talking heads did not think too poorly about how strident the “guru” was and the example a teacher was setting for the society. In fact, some who would otherwise pontificate on dharma and karma defended his contemptuous conduct — not in an apologist form.

Sabarimala has created a different league for this attitude. Not a day has passed in recent weeks without some message ranging from the nasty to the sad to the ridiculous, being received on social media, particularly from some of the devout who make the pilgrimage to the shrine.

The point is not about whether one agrees with the judgment or whether a judgment may be criticised. This column will not go into the merits of that case at all — suffice it to say this author does not share the anxiety and angst suffered by those who disagree with the judgment. But the point surely is the virulence with which society is headed firmly in the direction of anarchy, unless people in responsible positions who have taken to criticising the verdict introspect and engage in course correction.

It is not for nothing the adage: “The Supreme Court is not final because it is always right, but the Supreme Court is always right because it is final.” If we are to have a Republic that is secure in the rule of law, we have to learn to respect the verdicts delivered by the Supreme Court, no matter how much one may disagree with it. Criticising the judgment is one facet of democracy, but physically violating and preventing the enforcement and acceptance of a ruling, is just unacceptable promotion of anarchy.

First, unlike most of the law-making in India, a ruling by the Supreme Court is not a product involving an absence of public consultation. We do not have either a formal requirement or a substantial practice of public consultations and deliberations before a new law is introduced. The government agencies and departments that pilot laws made by them through Parliament are loath to engage with the public on draft law. Worse, Presidential Ordinances are known to be issued with laws taking effect overnight. On the other hand, a court ruling, particularly on a matter such as this case, is one that is conducted in full public view, with the right of citizens to intervene and be heard and participate in the process of judicial review. Now, when all of these efforts are indeed taken, and the outcome is unpalatable, the only way to ensure we have a sane society where anarchy does not prevail, is to accept the outcome and move on to closure. Not doing so, and worse, promoting the rejection of a verdict of a Constitution Bench of the Supreme Court is anarchist in character.

Second, picture any unpalatable verdict of the highest court of the land not being accepted and enforcement of the decision being positively defied. Say, the rate at which you have to pay income tax is challenged and the courts disagree with you. If one starts saying one disagrees with the ruling and heaps scorn on judges not being aware of the perceived problems with paying tax, there would be a breakdown of social order. This is true for non-acceptance of any verdict flowing from the Constitution. Another hypothetical example that comes to mind is a dictatorial Prime Minister who loses elections, potentially refusing to vacate office. It would be a case of total anarchy. The protests against the Sabarimala verdict, with defiance of court orders being at the core of it, is a clear pointer to a march to anarchy. Imagine, the Supreme Court ruling on the Ram Janmabhoomi–Babri Masjid dispute, leading to either Hindus or Muslims refusing the accept the outcome, and instead instigating mobs to “reject” and frustrate the verdict. Or imagine, every person who illegally occupies any property, refusing to vacate it despite losing in the Supreme Court — all these are examples of the breakdown of the rule of law.

Of course, one has a right to critically examine a verdict and deal with flaws in the rationale adopted in arriving at a judgment. No one can quarrel with that. However, if one were to show utter disregard to honouring the ultimate court’s ultimate verdict, and instead, if one were to promote vigilante activism to oppose and frustrate the verdict, one would truly be aligned with the dreaded concept of being a “Maoist”, committed to overthrow the state and the Constitution of India.

This column was published under the title Without Contempt in the editions of Business Standard dated October 26, 2018

Capacity building is imperative

If the executive believes its agencies can and must play judge, it must invest in building capacity in regulators to conduct court-like proceedings in a fair, objective, firm and yet polite manner

By Somasekhar Sundaresan

The last edition of this column spoke about the Securities Appellate Tribunal being hamstrung in conducting final hearings due to two out of three posts remaining vacant. Tribunals often come in for comment and the concept is often critiqued, typically for how they are staffed, despite playing the role of courts. More often, they come in for comment (like the last edition) for how they do not get staffed.

However, public debate is woefully lacking in discussion about how the “courts” from which appeals lie in the tribunals are staffed, how they are not staffed, and if they are at all equipped to deliver on the expectations from them under the law.

First, India’s regulatory design typically centres around creating a regulator for an activity and then creating a tribunal to hear appeals from decisions of the regulator. Further appeals from the tribunal is invariably to the Supreme Court, bypassing the high courts completely. While much of the focus of public debate is on the tribunals being alternates to the higher judiciary, what gets missed out really is that it is the regulator that bypasses the judiciary, and that too, by legislative design.

Under every legislation that creates a regulator, certain specific and limited powers of a civil court are conferred on the regulatory agency — for example, on the Competition Commission of India or the Securities and Exchange Board of India. How equipped the regulators are in playing judge and how well-equipped the institutions are to withstand comparison with court-like dispensation of justice, are really the questions to ask.

Usually a generic motherhood edict is set out in these legislation: “the regulator shall comply with principles of natural justice”. What this means, how it is meant to play out, and how it actually plays out, can be an unruly horse. Two regulators governed by an identical standard, can completely vary in how this is handled. For example, the approach of one regulator in providing inspection of the record would totally vary from the approach of another regulator in performing the same task. Even within a regulatory organisation, one officer may do the right thing by letting a person accused of a wrong get access to a full and proper inspection of the record, while another officer may get aggressive and quibble. Typically, such quibbles emerge over giving access only to what is “relied upon” to support the accusation; over holding back from inspection any material that would undermine the accusations; and over arguing that only what is not relied on to make an allegation can never be “relevant”, even if such material would undermine the accusation. Each individual case, depending on how wronged the person accused feels, then begins its journey up the appellate chain and at times, years and years are lost squabbling. Ironically, those who deny proper access to the record usually accuse that request for access as a dilatory tactic.

Second, legislation creating regulators, usually oust the jurisdiction of civil courts on matters over which the regulator has jurisdiction. This is often a source of great confusion — a regulator can punish and enforce, and in cases, remedy. But a regulator would not be able conduct a private trial, weigh evidence, and assess damages to award compensation. In other words, if you were to believe that someone hurt your rights available to you under a regulatory legislation — say, the Insurance Act, 1938 — and want to be compensated for being wronged, you cannot “litigate” before the regulator. If you were to approach the regulator, the regulator may be disinterested, because of the scale, size and relevance of the case, or because it does not believe in getting involved is its duty. If you wanted to force the regulator’s hand, you would need to file a writ petition in a Constitutional court asking for a direction to be issued to the regulator to do its statutory duty. If the regulator were to entertain your complaint and get involved, the regulatory official in question may not have the bandwidth and wherewithal to conduct an adversarial proceeding between two persons — a complainant and the person complained against.

On the other hand, a regulator would be able to punish and enforce against the wrongdoer. The regulator may issue remedial directions to the wrongdoer. However, without specific powers, the regulator would not be able to conduct a proceeding for a compensatory claim, assess reasonable damages and award compensation. Legislation could be amended to empower a regulator to do so, but one must tread carefully, because it would then also mean the power is coupled with a duty to use the power — precisely what bogs down our courts.

The power to effect disgorgement has indeed been introduced into the Sebi Act, 1992, but that can only cover ensuring that a wrong-doer does not get to enjoy the wrongful gains made. If the gains do not sit with a person, there would be nothing to disgorge from him. Today, the jurisdiction of courts is ousted only over what the regulator is empowered to do. Arguably, where the regulator does not have the power to assess and award damages and costs, the jurisdiction of the normal court would not get ousted.

All in all, careful thought is required on how we empower our regulators — and whether they should play the full role of a court. If they were to be empowered to play the full role of a court, it would raise the same furore as with the debate over tribunals. Today, so much happens with the regulators simply because of the half measures in giving them some powers — they look like courts, function like courts, but are not courts.

Finally, at the least, serious capacity building efforts and judicial training of the institution on what constitutes proper compliance with natural justice is vital. Expending serious resources on basic disputes such as natural justice compliance is a drain on not just time but also financial resources of the regulator and of course, the accused. At the least, a uniformity of practice within the same regulatory organisation would be an imperative for predictability and ease in conducting regulated activity. It is not enough to jostle for space in the intra-Constitutional conflict between the executive and the judiciary. If the executive believes its agencies can and must play judge, it must invest in building capacity in regulators to conduct court-like proceedings in a fair, objective, firm and yet polite manner.

This was published as my column titled Without Contempt in the editions of Business Standard dated August 2, 2018

Surgical strike at a chronic ailment

Our regulators have to go beyond procedural reform and gaming of processes to improve rankings on Ease of Doing Business

By Somasekhar Sundaresan

It was a judgement waiting to be written. The conduct of the government in litigating on issues long-decided by courts and clogging the courts, even while mouthing platitudes about how the government must not indulge in frivolous litigation, has been called out by the Supreme Court in a crisp and precise judgement.

The seven-page order, imposing costs of Rs 100,000 on the government (yet again), is a must-read not only for every government department at the Centre and the states, but more importantly for every regulator that doubles up as civil courts and generates litigation by writing orders, even on closed issues, merely because the parties before it are different. Remarkably, in the order (passed in a government service litigation — titled Union of India & Others vs Pirthvi Singh & Others) the Supreme Court has pressed the right button by observing that India suffers badly in the World Bank’s Ease of Doing Business rankings primarily because of such conduct by government agencies.

A quick look at the facts would show what is regular and well-expected from the government, state agencies and regulators. The Supreme Court came to dismiss a bunch of appeals filed by the Union of India in December 2017. The very same issues came up again in a new appeal by the Union of India in 2018, and that appeal was dismissed in March 2018. When dismissing this appeal, the Supreme Court noted that the appeal in question was unnecessary and vexatious since many cases had already been decided in the same manner. To ensure this is taken seriously, costs of Rs 100,000 were imposed on the Central government.

The appeal now dealt with by the Supreme Court had agitated the same issue and was filed in March 2018. The government took no steps to withdraw the appeal despite the earlier misadventure having invited strictures and costs.

The judgement notes: “The Union of India must appreciate that by pursuing frivolous or infructuous cases, it is adding to the burden of this Court and collaterally harming other litigants by delaying hearing of their cases through the sheer volume of numbers. If the Union of India cares little for the justice delivery system, it should at least display some concern for litigants, many of whom have to spend a small fortune in litigating in the Supreme Court.”

The judgement quotes from a 2010 document titled, “National Litigation Policy” as part of a pompously-named “National Legal Mission to Reduce Average Pendency Time from 15 Years to 3 Years”. This document, made under the UPA government has been adopted by the current NDA government with a newer version in 2015, followed by an “Action Plan” formulated in 2017. One of the principles supposed to have been adopted is that the government would be an efficient and responsible litigant. One of the listed traits of an “efficient litigant” is that “bad cases are not needlessly persevered with” while a trait of a “responsible litigant” is “that litigation would not be resorted to for the sake of litigating”. Observing that that removal of unnecessary government cases would save valuable court time that could be spent in resolving other pending cases, the document notes that the “easy approach” of adopting the line of “let the court decide” must be eschewed.

The Supreme Court notes: “…under the garb of ease of doing business, the judiciary is being asked to reform. The boot is really on the other leg.” Having noted the Ease of Doing Business rankings (India ranks among the lowest in contract enforcement year after year, despite the gaming coupled with reform in other areas), the court has really touched upon a critical area. While government litigates blindly, regulatory agencies, that are mini-republics with the legislative, executive and judicial functions rolled up into one entity, are the worst. Regulatory agencies are themselves given the powers of the civil courts and they start the process of prosecuting and ruling all on their own. Often, the quasi-judicial rulings of regulators are upheld in appellate tribunals but many an order gets set aside. These are routinely appealed. Worse, even when earlier rulings are available, regulators persist with repeating their overruled rulings hoping that appeals to the higher courts (in most legislation, it is directly to the Supreme Court) would lead to different outcomes. Even when the court has not stayed the tribunal’s rulings, regulators continue to ignore appellate decisions. There are even cases where a newly appointed regulatory official wants to leave his mark and re-interprets decades-old jurisprudence, which despite failure in appeal, is further carried in appeal.

In the case at hand, the Supreme Court also noted that the government was blowing up money on 10 lawyers, including an Additional Solicitor General and a Senior Advocate, expending tax payers’ monies wastefully. This too is typical and par for the course with regulators. Engaging senior law officers of the government, and senior private lawyers with respectable names and standing, is the easiest way to project that the frivolous appeal has something unique on facts that would warrant ignoring earlier closed decisions, and overturn, at times, decades of jurisprudence. In the courts of many judges, appeals by regulators perceived to be “experts”, are admitted for the asking, while appeals by private litigants are put to a higher standard, often disposed of at the stage of admission — the wrong assumption being that regulators are more responsible in deciding what to appeal.

The apex court’s observations are a reminder of one serious facet of what ails the justice delivery system. Our regulators have to go beyond procedural reform and gaming of processes to improve rankings on Ease of Doing Business. Conducting a thorough 100-percent audit of all pending appeals filed by regulators to decide what ought to be withdrawn, would be a good way to start.

This column was published under the title Without Contempt in the editions of Business Standard dated May 24, 2018

Fugitive law can victimise the victim

By Somasekhar Sundaresan

The Presidential Ordinance on fugitive economic offenders is highly likely to be celebrated by the masses. Yet, its constitutional validity is suspect. It is yet another law that have the best intentions as its premise but can end up wreaking havoc on the innocent, who may well be victims of fugitives, but would pay the price for unintended consequences.

Here is how this law can cause grievous injury to the innocent. The most serious inroad into the rights of a person who may not be the fugitive but could well be the victim of the fugitive, is contained in the provisions on “disentitlement”. Under this provision, once an individual is declared to be a “fugitive economic offender”, any court in India may, at its discretion, disentitle any company from putting forward or defending any civil claim, if the individual authorised by the company to sue in its behalf, or any promoter of the company, or even any key managerial personnel or the company, or indeed any majority shareholder of the company has been declared a fugitive economic offender.

In other words, the company which would be injured because its promoter ran away, or indeed because its key managerial person ran away, could be the one facing the disentitlement from being able to pursue any civil claims. An example would make it good. Let’s say the managing director, or indeed, a promoter of a company is alleged to have committed a “scheduled offence” — these are offences listed in a schedule to this law — for which the person is issued a warrant and refuses to come back to India, civil courts could rule that no litigation for recovery of even legitimate dues owed to such a company cannot be pursued.

The principle underlying the concept of disentitlement is that one who does not subscribe to the rule of law in India may be denied the protections afforded by Indian law. However, this provision goes beyond the person rejecting the rule of law in India. It has the potential to cause serious injury to persons who may themselves be injured by the rejection of Indian law by the fugitive who has left the country. This would translate into a perverse incentive for law enforcers — grab the headlines and show stringency of action by hurting a company that is operating in India. This approach loses sight of the fact that those within reach are those who subscribe to Indian law and are seeking protection of the rule of law by filing legitimate claims. Likewise, it has no regard to the fact that the ransom of ill-treating those who are in India could have no coercive impact on the fugitive — her decision to turn fugitive would have already factored in the possibility of atrocities being heaped on the company she left behind.

The other perverse incentive endorsed by this law is that commercial counter-parties who have scant regard for the rule of law could start defaulting on their dues to a company whose promoter or key managerial personnel is declared a fugitive. Despite being a solvent company, the company the fugitive leaves behind would face a potential prohibition on the sovereign assurance that validly contracted promises given to the company must be enforced. Open doors, it is said, tempt even saints — once a company’s promoter or key managerial personnel is declared a fugitive, every person who has a contract with the company would be entitled to move applications before courts trying claims for enforcement by the company, asking for the discretion in the new law to be used to debar claims by the company.

To have any individual declared as a fugitive economic offender, an application has to be moved by the authorities asking the competent court to make the declaration that the person named in it is a fugitive. However, even while moving the application, the authority has the power to attach any property listed in the application, for 180 days. In other words, way before successfully getting a declaration that the person named is a fugitive, properties that may not even belong to the individual named, can be attached without any need for the attachment to be blessed by a court of law, so long as the property is identified in the application and the authorities have “reason to believe” that the property represents “proceeds of crime”.

Interestingly, the attachment would automatically run for 180 days without even a warrant. The non-fugitive person who owns the property would get just one week to file his say in the matter, which too would start after the attachment. Another provision in the law explicitly provides that the person other than the fugitive, whose property is so attached, would have to shoulder the burden of proving that the property was acquired without knowledge of it being proceeds of crime.

The term “proceeds of crime” is not just the fruits of criminal activity listed in the schedule to the law. It also includes “the value of such property” (meaning despite it being evident that the proceeds of crime were deployed elsewhere, anything equivalent in value may be chased and attached). Besides, “where such property is outside the country”, any other property “equivalent in value held within the country” would constitute “proceeds of crime”. Therefore, all one has to show is that the value of the benefits from “crime” is represented as part of the value of the property being attached regardless of whose hands the property resides in — it would be attached for 180 days, and it is for the owner of that property to show within a week that she did not have knowledge of such property being proceeds of crime.

Finally, what are the crimes listed in the schedule? Apart from the economic offences found in the Indian Penal Code, the provisions that would lead to a “scheduled offence” are generic provisions from company law where fraud is alleged, and inexplicably (following the footsteps of ill-advised amendments to the anti-money laundering law) even violations of takeover regulations. While offences such as insider trading and market manipulation are understandable members of the list of scheduled offences, listing violations of takeover regulations could simply mean that the state just gave itself a tool to come after businesses with a heavy hand if it so chooses.

This is not at all a comment about the colour of any political party in power. The listing of the takeover regulations as a scheduled offence in the law on money-laundering was done by the UPA government. The NDA government has now made it a scheduled offence under this law. In short, regardless of the party in power, you would do well to be careful and beware the long arm of the state.

This column was published under the title Without Contempt in the Business Standard editions dated May 10, 2018

About justice & conspicuous consumption

When a crime is committed, everyone seems to have a view on who has done wrong, and regardless of judicial outcome through due process of law, theories of how justice was done or not done mushroom
By Somasekhar Sundaresan
The Allahabad High Court has set aside the conviction of the Talwars in the tragic twin of teenager Aarushi Talwar and domestic help in The High Court ruled that the evidence was not adequate to secure conviction of the parents. The trial itself could have well qualified for mistrial in other jurisdictions going by the media coverage fed by the investigators and prosecutors, but that is now par for the course with any trial in India.


The same public drama that unfolded during trial has erupted all over again. There are those who have no doubt that the parents are guilty of murdering their child. They have come up with cynical arguments such as: “Therefore, nobody killed Aarushi.” Or, “The court has only said evidence is inadequate. They are of course guilty.” Or, indeed, with statements such as “What a successful peddling of innocence through a book and a movie!”


Others, with a contrary disposition, make arguments such as: “How could one even dream of accusing parents of murdering their child to begin with? There was no case here.”


In short, society is divided largely between those who believe the Talwars were guilty and those who believe they could never be guilty. Almost everyone has a certainty of belief stronger than what any eyewitness could harbour. Of course, there was none in this case.


hile this is a physical criminal case involving murder, in the corporate-business-financial sector, such an approach of society is consistently universal. In every single case, everyone in society has a clear view on who has done wrong, in what manner, and regardless of the judicial outcome through due process of law, theories of how was done or was not done mushroom.


In most financial sector laws, the enforcement folks do not even have to convince a court of of their story — they themselves can pass orders indicting an accused. In appeal, it is the defence that is on trial — the appellant has to convince the relevant tribunal that the order is not sustainable. Justice, in such circumstances, has become a matter of conspicuous consumption. It is easy to assail a victorious appellant as someone who got away for want of proper evidence — an alias for saying society will treat an accused as guilty even if courts do not believe her to be guilty.


Add to the mix, the practice of passing ex parte orders (orders passed without even a hearing) with clear and firm conclusions even before investigations are completed. A regulator can take a public position, however wrong investigations may subsequently prove them to be, and pass orders imposing restraints on the suspect. Having done so, the process of a “post-decisional hearing” and the suspect’s efforts at getting the restraints removed necessarily entails the defence being put on trial. The regulator gets a lot of mileage by attacking the credibility of the defence, without caring to first demonstrate the basis and validity of the unilateral ex parte order in the first place. In the eyes of society, that the state machinery has found fault with someone and believes that she has done wrong, is enough to make the suspect a convict.


Little wonder then that colourful use of language often seeks to make up for absence of articulated reasons in such orders. Indeed, even in the Aarushi case, the trial judge who wrote the order buying into the prosecution story, is reported to have taken pride in an interview with Avirook Sen (author: Aarushi; the interview is set out in Sen’s book on the case) in how he flew down his son, whose command over English was put to use to write a good quality order.


No one can really predict what will eventually happen to the Talwars in the judicial process. A further appeal is likely to follow — it may or may not succeed. The Supreme Court will eventually rule. That court is necessarily right because it is final. It is not final because it is right. Regardless of judicial outcome, sections of society have very clear and firm views on their guilt or on their innocence.


Worldwide, even after final rulings by supreme courts, convicts have been pulled out of prison or even out of death row because of relentless efforts by journalists and television documentaries, whose intrigue about a case refuses to let them accept what meets the eye and what is dished out to selective ears. That a book even got written on this case in India, with an independent resolve to probe facts rather than re-hash the versions given by prosecutors, is the Indian media’s saving grace.


That a movie-maker even took interest in a story of this nature to risk a commercial film on it is also not common. For a movie like Talvar, that is accused of influencing the outcome in the appeal, there has also been a movie such as No One Killed Jessica, which spoke about accused being wrongfully absolved (unwittingly, the name has laid down a popular expectation that when there is a crime, if the accused has not done it, the crime never took place). That movie too followed meticulous journalistic work proving how witnesses had lied during trial.


Somehow, the sight of a specific person going to prison for a crime seems to warm many an Indian heart as compared with the sight of seeing the evidence stacked up against an accused just not withstanding judicial scrutiny. There is a nice coinage that has been developed for this concept: “collective conscience”.The concept was, for example, relied on to confirm the death sentence for an accused in the case involving the attack on Parliament, even while acknowledging that the evidence and the quality of trial was weak.


In other words, if a case shakes up society well enough to have its attention rivetted, the standard of would practically vary. Therefore, the incentive for prosecutors and regulators is perversely weighed in favour of scandalising a case strongly enough for society’s attention to stay rivetted to the lurid details dished out, leaving it open to ignore facts and evidentiary standards. Of course, whether someone going to jail or someone being let off is more acceptable for a society’s collective conscience is a pointer to what kind of society we are as a collective.


This column was published under the title Without Contempt in the Business Standard editions dated October 19, 2017

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