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India Legal 21 January 2019

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Overdue Reform
An All-India Judicial Service will enhance productivity, and quality of services at the district level would improve dramatically, says Prof Madhava Menon

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India Legal 21 January 2019

  1. 1. NDIA EGALL STORIES THAT COUNT ` 100 I www.indialegallive.com January 21,2019 OverdueReformAnAll-IndiaJudicialServicewillenhanceproductivity,andqualityofservicesatthedistrict levelwouldimprovedramatically,saysProfMadhavaMenon Cattle Crisis: Sitting on a time bomb New Reservation Policy: Will it sustain scrutiny? C o
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  3. 3. HEN India Legal recently ran a story on remarks made by Attorney General KK Venugopal warning about the dangers of spreading the doctrine of “constitutional morali- ty,” little did we realise that the subject would give rise to a heated debate—within the covers of this magazine—between some of the leading intellectu- al luminaries of this nation. Pratap Bhanu Mehta has penned a superb essay elsewhere on this subject asking simply, what is constitutional morality? He explains that the phrase “rarely crops up” in discussions within India’s Constituent Assembly. “Of the three or four scattered uses of the phrase, only one reference has any intellectual significance. This is, of course, Ambedkar’s famous invocation of the phrase in his speech, ‘The Draft Constitution’, delivered on 4 November 1948.” In the context of defending the decision to include the structure of the administra- tion in the Constitution, he quotes at great length the classicist, George Grote. The quotation is worth reproducing in full: “The diffusion of ‘constitutional morality’, not merely among the majority of any community, but throughout the whole is the indispensable condi- tion of a government at once free and peaceable; since even any powerful and obstinate minority may render the working of a free institution impracticable, without being strong enough to con- quer ascendance for themselves.” What did Grote mean by “constitutional morali- ty”? Ambedkar quotes Grote again: By constitutional morality, Grote meant… a paramount reverence for the forms of the constitu- tion, enforcing obedience to authority and acting under and within these forms, yet combined with the habit of open speech, of action subject only to definite legal control, and unrestrained censure of those very authorities as to all their public acts combined, too with a perfect confidence in the bosom of every citizen amidst the bitterness of party contest that the forms of constitution will not be less sacred in the eyes of his opponents than his own. Andre Beteille argues in a book that constitu- tional morality is important for constitutional laws to be effective. “Without constitutional morality, the operation of a constitution tends to become arbitrary, erratic, and capricious.” According to a review in Oxford Scholarship Online, he makes a distinction between “constitutional democracy” and “populist democracy”. He says democracy has sur- vived in India by moving away from the ideal of a constitutional democracy towards a more populist form. It looks at the Emergency of 1975-77 to show the connection between anarchy and the abuse of power as two forces that are both antithetical to constitutional morality. He also examines the link between constitutional morality and the principle of civil disobedience, which under the leadership of Mahatma Gandhi became the cornerstone of India’s nationalist movement. In a recent edit in this magazine, we referred to the most recent judicial pronouncements on this subject. Immediately after donning the mantle of chief justice of India, Justice Ranjan Gogoi offered some clue as to what the Supreme Court under him would be like. His priority, he declared, would be to focus on the vast backlog of cases and filling judi- cial vacancies. Those, however, are largely adminis- trative in nature requiring strict discipline, qualities he is well known for. What assumes much greater importance was his attempt to revive a national conversation on “constitutional morality”. Stating that people are divided “more than ever” along the lines of caste, religion and ideology, Justice Gogoi’s core message was that judicial beliefs must be con- tinuously evaluated on the touchstone of constitu- tional morality. He defined “true patriotism to the Constitution” as adherence to constitutional moral- ity. For most people inured to political venality and muscular majoritarianism, that objective may seem utopian but viewed in the context of recent judg- ments by the highest court in the land, it is extremely significant. IS THE CONSTITUTION MORAL? Inderjit Badhwar Letter from the Editor W 4 January 21, 2019 JusticeRanjan Gogoiattempted toreviveanational conversationon “constitutional morality.”Hiscore messagewasthat judicialbeliefs mustbe continuously evaluatedonthe touchstoneof constitutional morality.The objectiveis extremely significantinthe contextofrecent judgmentsbythe SupremeCourt.
  4. 4. Under his predecessor Chief Justice Dipak Misra, the Supreme Court had struck down Section 377 of the Indian Penal Code, saying it was uphold- ing “constitutional morality” and not “majoritarian morality” while deciding to decriminalise homosex- uality. The verdict overruled a previous judgment which held that only a small number of people were exercising their rights. As the former CJI said later at a conference of law students, “it’s not the number that determines the right. A right permis- sible under the constitution is a right that has to be respected”. That right was also witnessed in the Supreme Court ruling on Sabarimala to allow women into the temple. It was seen as correcting a discrimina- tory social and religious practice that was violative of Part III of the Constitution. Constitutional morality basically rejects the transactional view of the Constitution or majority opinion which is the key to managing a vast country like India with its diversity of cultures, communities, castes, religions and customs. B ut when Venugopal recently asserted that judicial reliance on this concept could upset the separation of powers doctrine and sabo- tage the right of the legislature to make and enforce laws, Professor Upendra Baxi, among the tallest in the firmament of legal luminaries wrote in India Legal: “Courts are constitutionally mandated to adjudicate matters which raise competing con- tentions regarding core human rights. Constitu- tional morality contains a set of goals and methods by which to address these conflicts. The apex court has never said that all public policy always offends constitutional morality, but only that the courts must choose the latter when the two are in visible conflict. The dialectic between public morality and constitutional morality serves well the promotion of constitutional good governance and the produc- tion of constitutionally sincere citizens. I hope that my good friend Venu {KK Venugopal} finds ample scope for re-examination of his current expostula- tions and exhortations.” In this issue we carry yet another article, posed as a set of questions by none other than the venera- ble and redoubtable Prof Madhava Menon whose legal scholarship is also an international phenome- non. I reproduce here his concluding statement: “The issue to my mind is not the importance or relevance of the concept of Constitutional Morality in working out the provisions of the Constitution. Rather, it is about the use and abuse of the doctrine in constitutional decision-making. No doubt, democracy as a system of governance may not serve the constitutional goal always. That is a price socie- ty has to pay for accepting a democratic form of government and polity. The remedy for preventing majoritarian excesses lies more in cultivating the natural sentiment of people for maintaining Constitutional Morality (as Dr Ambedkar seemed to think) rather than in showing ‘less deference to the legislature’ in the matter of constitutional val- ues as some judges seem to think. The ugly conse- quence which resulted in forcible enforcement of the Supreme Court judgment in Sabarimala by a government controlled by a party of ‘non-believers’ cannot be dismissed as a conflict between public morality and Constitutional Morality. It is indeed a portent of what the attorney general believed to be the possible outcome for rule law and democracy if Constitutional Morality turns out to be yet anoth- er tool beyond ‘Basic Structure’ for exercising judi- cial power.” Pratap Bhanu Mehta’s brilliant scholarship on this topic shines as he argues in what could be the defining statement on the issue—that the Indian Constitution was made possible by a constitutional morality that was “liberal at its core”. Not liberal in the “eviscerated ideological sense”, he continues, but in the deeper virtues from which it sprang: “An ability to combine individuality with mutual regard, intellectualism with a democratic sensibili- ty, conviction with a sense of fallibility, deliberation with decision, ambition with a commitment to institutions, and hope for a future with due regard for the past and present.” | INDIA LEGAL | January 21, 2019 5 Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com CRUCIAL VIEWPOINTS (Above left) Pratap Bhanu Mehta’s brilliant scholarship on constitutional morality is significant to understand the concept; Andre Beteille has made a value-added distinction between “constitutional democracy” and “populist democracy”
  5. 5. ContentsVOLUME XII ISSUE10 JANUARY21,2019 OWNED BY E. N. COMMUNICATIONS PVT. LTD. A -9, Sector-68, Gautam Buddh Nagar, NOIDA (U.P.) - 201309 Phone: +9 1-0120-2471400- 6127900 ; Fax: + 91- 0120-2471411 e-mail: editor@indialegalonline.com website: www.indialegallive.com MUMBAI: Arshie Complex, B-3 & B4, Yari Road, Versova, Andheri, Mumbai-400058 RANCHI: House No. 130/C, Vidyalaya Marg, Ashoknagar, Ranchi-834002. LUCKNOW: First floor, 21/32, A, West View, Tilak Marg, Hazratganj, Lucknow-226001. PATNA: Sukh Vihar Apartment, West Boring Canal Road, New Punaichak, Opposite Lalita Hotel, Patna-800023. ALLAHABAD: Leader Press, 9-A, Edmonston Road, Civil Lines, Allahabad-211 001. Editor Inderjit Badhwar Senior Managing Editor Dilip Bobb Deputy Managing Editor Shobha John Executive Editor Ashok Damodaran Contributing Editor Ramesh Menon Deputy Editors Prabir Biswas Puneet Nicholas Yadav Senior Writer Vrinda Agarwal Art Director Anthony Lawrence Deputy Art Editor Amitava Sen Senior Visualiser Rajender Kumar Photographers Anil Shakya, Bhavana Gaur Photo Researcher/ Kh Manglembi Devi News Coordinator Production Pawan Kumar CFO Anand Raj Singh Sales & Marketing Tim Vaughan, K L Satish Rao, James Richard, Nimish Bhattacharya, Misa Adagini Circulation Team Mobile No: 8377009652, Landline No: 0120-612-7900 email: indialegal.enc@gmail.com PublishedbyProfBaldevRajGuptaonbehalfofENCommunicationsPvtLtd andprintedatAcmeTradexIndiaPvt.Ltd.(UnitPrintingPress),B-70,Sector-80, PhaseII,Noida-201305(U.P.). Allrightsreserved.Reproductionortranslationinany languageinwholeorinpartwithoutpermissionisprohibited.Requestsfor permissionshouldbedirectedtoENCommunicationsPvtLtd.Opinionsof writersinthemagazinearenotnecessarilyendorsedby ENCommunicationsPvtLtd.ThePublisherassumesnoresponsibilityforthe returnofunsolicitedmaterialorformateriallostordamagedintransit. AllcorrespondenceshouldbeaddressedtoENCommunicationsPvtLtd. Senior Content Writer Punit Mishra (Web) 6 January 21, 2019 14Long Overdue Reform With the introduction of the All India Judicial Service, the quality of services at the district level will improve remarkably, says legal luminary Prof NR Madhava Menon LEAD 18Political Puppet The sacking of CBI Director Alok Verma shows that the central investigation agency will continue to be a caged parrot squawking the tune of its political masters INVESTIGATION 22Questionable Quota Parliament has passed a constitutional amendment bill introducing 10 percent reservation for the economically backward classes. Is it legally tenable? FOCUS
  6. 6. | INDIA LEGAL | January 21, 2019 7 Trump and Tragedy REGULARS Followuson Facebook.com/indialegalmedia Twitter:@indialegalmedia Website:www.indialegallive.com Contact:editor@indialegallive.com Cover Illustration & Design: ANTHONY LAWRENCE Ringside............................8 Courts ...............................9 Is That Legal...................10 Delhi Durbar ...................12 Media Watch ..................49 Nearly a million US government workers are being held hostage by the president’s attempts to extort $5.7 billion from Congress to build a border wall with Mexico 48 Above All Suspicion The MP High Court dismissed the petitions of two advocates complaining they were not appointed district judges as they had faced criminal prosecution though they had been acquitted 30 Telecom Web RCom’s attempt to pay Ericsson for its services with a plan to sell airwaves to Reliance Jio has led to a triangular contest and a stalemate in the Supreme Court GLOBALTRENDS COMMERCE OPINION Another “Surgical Strike”? 42 The Punjab & Haryana High Court has slammed the municipal authorities for failing to curb “green” encroachments in residential areas in Chandigarh Misplaced Priorities Instead of spending its scarce resources on education and healthcare, the UP government is building gaushalas for abandoned cattle and levying cess on it Proceed With Caution Eighteen months after GST was introduced, two big issues—drop in compliance rate and revenue shortfall—are causing jitters. Some corrective steps are proposed Sparring Over Spas Points to Ponder In a sternly worded judgment, the Madras High Court has warned the Chennai police against treating all spas as illegal brothel houses Prof NR Madhava Menon sparks off a new debate by mulling the idea of constitutional morality espoused by the Supreme Court 28 34 38 A Watery Mess 40 The National Green Tribunal has pulled up the centre for a notification on extraction of groundwater, calling it unsustainable ENVIRONMENT STATES COURTS COLUMN 26 Murders Most Foul The apex court has asked the CBI if there is a common link to club the probes of the Gauri Lankesh, MM Kalburgi, Narendra Dabholkar and Govind Pansare killings. But their families prefer that the SIT investigation carry on CRIME On the Job The Supreme Court Collegium has recommended two more names for elevation as justices of the apex court, taking its total strength to 28 SUPREMECOURT 25 32 46
  7. 7. 8 January 21, 2019 “ RINGSIDE “If you get a chance, visit the old city area in Jaipur. Idols in temples...are crying as no puja can be conducted. No prop- er rituals can be car- ried out...people throw bones and meat within temple premises....” —BJP MLA from Udaipur Gulab Chand Kataria urging Hindus to unite in Rajasthan “The best gift that I have received was 2014. I have learnt from it.... The more difficult my oppo- nents make my life, the harder it is for me, the better it is for me.... I appreciate the attacks....” —Congress President Rahul Gandhi to Gulf News “Today we are with- drawing from the Ayushman Bharat scheme. Now, the Centre will have to bear the entire cost of the scheme as we will no longer pay our share of the money. Why should we pay if it (Centre) takes all the credit?” —West Bengal CM Mamata Banerjee at a rally in West Bengal “Nitin Gadkari should be made deputy PM and UP CM Adityanath should be engaged in religious works...Raj- nath Singh should be appointed UP CM. Amit Shah should... hand over the charge...to Shivraj Singh Chouhan....” —BJP leader Sangh- priya Gautam on the waning of the Modi charisma “People are concer- ned that we are try- ing to bring some- body (outsiders), which is false. With- out that Bill, we are surrendering our- selves to the philoso- phy of Jinnah.…” —Senior Assam minister Himanta Biswa Sarma on the need to pass the Citizenship (Amendment) Bill, 2016 “As a mother, I used to feel the pain and made those remarks in anger.... Still, I apologise. What else can I do?” —Former J&K CM Mehbooba Mufti on her remarks justify- ing the killing of local youths in firing by the security forces “...After 100 days, all of us will be before the public. The CBI is not going to win an election for any- one. The CBI is going to ask us ques- tions...but the public is going to decide and they are ready to teach them (BJP) lessons.” —Former UP CM Akhilesh Yadav on the CBI probing the mining scam in UP “By far this is my best achievement. Has to be on top of the pile. When we won the World Cup, I was a young player. I saw the others getting emotional. This series will give us a different identity as a team. What we've been able to achieve is something to be really proud of.” —Team India captain Virat Kohli after India won its maiden Test series in Australia
  8. 8. The capital will soon play host to the Nani Palkhivala (left) birth centenary quiz on constitutional law. It will be held on February 3 from 10 am to 5 pm at Hotel Taj Vivanta near Khan Market. A steering committee led by former CJI MN Venkatachaliah (as chair- man), former Governor and Rajya Sabha MP TN Chaturvedi (as working chairman) and including former CJI Dipak Mis- ra and Justice Sujata Manohar, Muralidhar C Bhandare, Soli J Sorabjee, Fali S Nariman, Prof Upendra Baxi, Arvind P Datar, Iqbal Chagla, PH Parekh and the Director, IIPA, has been set up to oversee the event, with Maj Gen Nilendra Kumar (retd) as its honorary secretary. Courts | INDIA LEGAL | January 21, 2019 9 Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com —Compiled by India Legal Team SC unhappy with frivolous PILs The January 10 proceedings in the Babri Masjid-Ram Janmabhoomi title suit ended with a surprise development, with one of the judges on the bench recusing himself from the hearing. Justice UU Lalit (left), who was part of the constitution bench along with CJI Ranjan Gogoi and Justices SA Bobde, NV Ramana and DY Chandrachud, decided to recuse himself after a lawyer representing one of the petition- ers pointed out that Justice Lalit had appeared for former UP Chief Minister Kalyan Singh in another case related to the title dispute. In the light of this development, the matter has been deferred to January 29 when a fresh constitu- tion bench will assemble to decide the sched- ule for the commencement of arguments. State governments not clearing pending expenditure bills of their respective high courts is nothing new. But the Nitish Kumar- led Bihar government seems to have gone a bit too far. It has been three years that the bills raised by the Patna High Court have been pending with the state government, awaiting clearance, despite repeat- ed reminders. In fact, another reminder, the seventh one, has already been sent to the govern- ment. The bills run into several crores of rupees. The Supreme Court refused to stay the National Green Tribunal’s (NGT) order set- ting aside the Tamil Nadu government’s deci- sion to close Vedanta’s Sterlite copper plant in Tuticorin. The Court sought a response from Vedanta on the state government’s appeal against the NGT’s order. In August 2018, the NGT bench of Justice Adarsh Kumar Goel had passed an order permitting Vedanta to access the administrative unit of its controversial copper plant. Before that, in April 2018, the Tamil Nadu Pollution Control Board had declined to renew the plant’s con- sent to operate for failing to comply with environmental laws. Subsequently, the plant was ordered to be permanently closed. ASupreme Court bench of Chief Justice Ranjan Gogoi and Jus- tice SK Kaul expressed concern about young lawyers abusing the court process by filing increasingly frivolous PILs. Two successive PILs were listed before the bench; one prayed for the Aligarh Muslim University to be renamed, while the other sought access to clean pub- lic toilets to be made a fundamen- tal right. Incidentally, the PILs were filed by two young members of the bar, advocates Rudra Vikram Singh and Anshul Chowdhary, respec- tively. This led CJI Gogoi to remark: “What has happened to the young members of the legal profes- sion?” No stay on NGT order to reopen Sterlite plant: SC Ayodhya hearing deferred again to January 29 Bihar govt sitting on High Court bills Nani Palkhivala birth centenary quiz on February 3
  9. 9. 10 January 21, 2019 ISTHAT In which cases can the Supreme Court entertain an appeal? In any civil or criminal matter decided by the High Court of any state, the aggrieved party may move the Supreme Court by fil- ing an appeal. However, the case must in- volve a substantial question of law as to the interpretation of the Constitution. In order to invoke this appellate jurisdiction, the concerned High Court must certify under Article 134A that a substantial ques- tion exists with regard to the interpretation of the Constitution. Article 133(1) also em- powers the apex court to hear appeals against any order, decree, judgment of a High Court if the latter certifies that the case involves a substantial question of law of general importance. An appeal can also be filed before the Supreme Court under Article 134 in certain criminal matters. Fur- ther, Article 136 is a special provision that empowers the top court to hear appeals coming from any court or tribunal in India in the form of a special leave to appeal. What other course of action can be taken instead of going to a court for resolving a dispute? To reduce the increasing judicial backlog in courts, certain alternative dispute resolu- tion processes have been created, including arbitration, mediation and conciliation, to resolve cases outside the court process. Arbitration is a process in which a neu- tral third party renders a decision based on the merits of the case. In India, this proc- ess is governed by the Arbitration and Con- ciliation Act. The award given by the arbi- trator is binding on the parties. The process of mediation aims to reach a consensual solution between the disputing parties with the assistance of a person appointed as a mediator. In conciliation, the dispute is resolved by compromise and voluntary agreement but the parties are not bound by the award given by the conciliator. Ways to Resolve a Dispute Outside Court —Compiled by Sankalan Pal Matters in Which SC Has Appellate Jurisdiction Ignorance of law is no excuse. Here are answers to frequently asked queries regarding matters that affect us on a day to day basis What is the procedure to apply for a succession certificate for immovable property under Indian law? To obtain a succession certificate, a peti- tion must be filed before the district judge within whose jurisdiction the deceased per- son ordinarily resided at the time of his or her death, or if at that time he or she had no fixed place of residence, the district judge within whose jurisdiction any part of the property of the deceased is located. It’s relevant to note that the petition must be filed in the place where the deceased had lived and not where the petitioner lives. Further, it must be supported by the death certificate of the deceased. After the peti- tion is filed, a notice is issued to all the other legal heirs inviting their objections, and if there are any, the court hears them. A notice is also published in a newspaper for inviting objections within 45 days. Foll- owing this, the court issues a succession certificate in the name of the petitioner. Procedure to Obtain a Succession Certificate ? Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com Can a petition be filed in the Supreme Court against the Election Commission of India? A petition can be filed in the Supreme Court against the Election Commission of India (EC) under Clause (1) of Article 300 of the Constitution. This clause provides that the Government of India can sue or be sued in the name of the Union, subject to any provi- sions which the Parliament or state legisla- ture has enacted. According to Article 12 of the Constitution, the term “State” includes any authority that is created by the Consti- tution and has the power to make laws. The EC is an autonomous constitutional authority responsible for administering elections in India. It operates under the authority of the Constitution as per Part XV, and is therefore a part of the Government of India, and hence can be proceeded against in a court of law. EC’s Decisions Can be Challenged in Court
  10. 10. 12 January 21, 2019 An inside track of happenings in Lutyens’ Delhi Prime Minister Narendra Modi’s ribbon-cutting peregrinations are cutting a daily swathe across land and air. Ordinary mortals wonder how he manages to find time to do the job he was entrusted with—running the government. One day it is the world’s tallest statue in his home state (below, right), another sees him off to the other end of the country to open Asia’s longest rail-cum-road bridge across the mighty Brahmaputra. This coming week will see him in Kollam, Kerala, for the inaugura- tion of a bypass that will cut travel time on the national highway from Thiruvananthapuram to Alleppey by approximately 30 minutes. Modi’s name is seldom attached to matters so modest and mundane as a 10-km bypass, but there is a reason. The last time he went to Kollam was just before the 2016 assembly elections when a firecracker tragedy at a temple near the city led to the death of scores of people. The elections a month later saw the BJP winning its first ever seat in the state assembly. With the general elec- tion around the corner, Modi’s sojourn to the bypass, his spin doctors hope, will give the party a new toe-hold in the state which usually regards the BJP as an ille- gal alien. BJP President Amit Shah recently overhauled the party organisation and constituted several com- mittees for different tasks related to the Lok Sabha polls due in April-May while also appointing new in- charges for states. The exercise shows a curious tug-of-war between the Modi-Shah duo and the RSS leadership in Nagpur. Veterans Sushma Swaraj (above), Nitin Gadkari (centre) and Uma Bharti— all with strong Sangh ties—have been kept out of the party’s election manifesto panel, headed by Rajnath Singh, and the publicity committee, headed by Arun Jaitley. Gadkari, who has been in the news for taking pot shots at the govern- ment on prickly issues like unemploy- ment, has instead been given the unspectacular task of reaching out to NGOs and social organisations while Swaraj, who recently opted out of elec- toral politics, has been entrusted with the boring task of preparing poll literature. Smriti Irani—the garrulous Union min- ister most known for flaunting her ties with Modi—has been kept out of all cru- cial panels. Union Agriculture Minister Radha Mohan Singh, Union Rural Development Minister Narendra Tomar and Tribal Affairs Minister Jual Oram have all been kept away from crucial panels at a time when farmer and rural distress has cost the BJP dearly in recent assembly polls. Interestingly, though, second-rung leaders who aren’t acolytes of the Modi- Shah duo but enjoy the confidence of the Sangh have been assigned key tasks in different states. THE RUMBLINGS WITHIN CITIUS, ALTIUS, FORTIUS, REALLY?
  11. 11. | INDIA LEGAL | January 21, 2019 13 Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com Delhi Durbar India’s foreign ministry officials are scratching their heads trying to figure out China’s latest advice to the US on its Afghanistan policy. China has gone on record stating that President Trump should not abruptly withdraw 14,000-odd US troops from Afghanistan. This is strange. In view of the traditional US-China competi- tion for global spheres of influence and innate mutual distrust, notwithstanding growing economic ties, the dragon should be dancing with joy at the prospect of Uncle Sam vacating a neighbouring, strategic area. “They [US] have been in Afghanistan for 17 years. If they are leaving the country, they should try to leave in a gradual and a responsible way,” said Lijian Zhao, deputy Chinese ambassador in Islamabad. Lijan told Pakistan’s GTV News that the Taliban and the Afghan government need to nego- tiate a political solution to the 40-year-old war. According to Indian diplomats in the know, the main reason seems to be the US’s increasing reliance on India as a str- ategic partner to play a larger role in the Afghanistan peace process. A sudden withdrawal of the US would create a vacu- um that would increase India’s already strong leverage in Afghanistan, while a protracted negotiating process with the US still present would give China the time and space to join the parleys and increase its influence in that region with the help of its main ally, Pakistan. INSCRUTABLE NEIGHBOURThe recent assembly poll results in Madhya Pradesh, Chhattisgarh and Rajasthan proved that the cloak of invincibility has slipped off Prime Minister Narendra Modi and his dop- pelganger, BJP President Amit Shah. Now, the passage of the controver- sial Citizenship Amendment Bill has given NDA constituents from India’s North east reason to derail the Modi- Shah duo’s Mission 21 (winning 21 of the region’s 25 Lok Sabha seats). The Asom Gana Parishad (AGP) has already quit its alliance with the BJP, turning the saffron party’s dream of sweeping Assam in the general election, due in April-May, into a mirage. Discordant notes are now being struck by the BJP’s other regional allies—the Mizo National Front in Mizoram, the National Peo- ple’s Party in Meghalaya, the Indi- genous People’s Front of Tripura and the Nationalist Democratic Progres- sive Party (NDPP) in Nagaland. The NDPP is also upset over the centre’s delay in signing the Naga Accord. The turmoil in the BJP’s North East Democratic Alliance has given the Congress party an obvious rea- son to hope for regaining control of its decades-old bastion that was ste- adily eroded by the saffron tsunami since 2014. The Congress’s central leadership has already instructed for- mer Assam Chief Minister Tarun Gogoi to put his rivalry with AGP boss Prafulla Mahanta (above) beh- ind and also reach out to other NDA allies in the North east. Gogoi has welcomed the AGP’s decision to snap ties with the BJP and appealed for an alliance to defeat the BJP. Next, Gogoi could reach out to the All India United Democratic Front (AIUDF) chief Badruddin Ajmal for a pre-poll alliance in Assam, an idea the former chief minister has been known to bitterly resent in the past. SLIDING POCKET BOROUGH South Block mandarins are privately sounding alarms that India’s defence preparedness, already a matter of grave concern for military and geopolitical strategists, could plunge further if politics and scandals con- tinue to bedevil the modernisation and acquisition process. Under pres- sure of accusations of graft and influence peddling by the middle man-politician nexus for several decades, the latest being the Agusta-Westland chopper deal and the Rafale MMRCA combat fighter contract deal for 36 aircraft for the Indian Air Force, the scenario looks bleak. Says a summary provided by a prominent security analysis think tank: “Abused by foreign vendors who violate contracts and get away with non fulfilment of offset obliga- tions and exploited by indigenous crony capitalists India’s Defence Acquisition System seems to be in a continuous negative spiral of indeci- sion, project delays, cost over-runs and funding challenges....” DEFENCE DILEMMA
  12. 12. Lead/ All-India Judicial Service 14 January 21, 2019 OR a long time, judicial reform concerned itself with the problem of delay and pendency in the system. This continues with no solution in sight. Of late, the issues relat- ing to judicial appointments, judicial activism, judicial accountability and dig- italisation engaged the attention of stakeholders. Several committees and commissions appointed by the govern- ment from time to time have made rec- ommendations to set the system right. However, many of them remain unim- plemented. It is business as usual in the A Long Overdue ReformUnlikeotherpublicservices,thejudiciarygetslessmeritorious candidatesduetofrustratingproceduresandinefficient practices.WithAIJS,productivityandqualityofservices atthedistrictlevelwouldimproveremarkably By Prof NR Madhava Menon BATTLING PENDENCY Lawyers at Gurugram District and Sessions Courts F judiciary despite mounting arrears and reports of creeping inefficiency and cor- ruption, alienating the public who now look for alternatives for access to justice. A judicial system consists of three el- ements—laws, institutions and the per- sonnel involved. Laws and institutions are not self-executing and it is the per- sonnel who make the system deliver. The inadequacies of laws and institu- tions, to a large extent, can be overcome if the personnel who man the institu- tions are competent and motivated pro- fessionals. If judicial reforms are looked at from the above perspective, there can
  13. 13. | INDIA LEGAL | January 21, 2019 15 be no doubt that the single-most impor- tant step to put the system on the right track is to induct meritorious people in adequate numbers to preside over courts and tribunals. The National Judicial Appointment Commission for the high- er judiciary and the All-India Judicial Service (AIJS) for the subordinate judi- ciary are, therefore, the twin strategies to get the system to deliver both on quality and quantity. The First National Judicial Pay Commission (Justice Jagannath Shetty Commission), inter alia, recommended the introduction of AIJS at the district judge-level after detailed deliberation with all stakeholders for increasing efficiency in the system. The Supreme Court accepted the recommendations of the Commission, including the AIJS proposal. According to media reports, all state governments, except Tamil Nadu and West Bengal, at that time accepted the AIJS proposal. Unfortu- nately, the then central government did not take necessary follow-up action and let the proposal die a natural death. It was pointed out in legal circles that cer- tain High Courts were also not keen to have the AIJS as they thought that their control over the subordinate judiciary would get diluted in the process. The Bar, which has been vocal in its opposi- tion to most proposals of reform in the judicial system, did not raise any objec- tion to the introduction of AIJS. A very significant reform which would have made a big difference in the administra- tion of justice at the district level was thus buried by the neglect and indiffer- ence of the Union Ministry of Law and Justice, which now wants to revive the proposal after nearly three decades! In 2011, the Government of India set up the National Mission for Justice Anil Shakya
  14. 14. 16 January 21, 2019 Delivery for a five-year period with a view to eliminate delay and arrears and to modernise judicial processes with technology and management reforms. It is understood that the Mission’s life is extended up to 2020. In several meet- ings of the Mission Advisory Committee, the AIJS proposal was raised and rec- ommended for early introduction. It was the unanimous view of all those involved that efficiency, productivity and quality of services at the district level would improve remarkably with the adoption of AIJS. G iven the regular supply of talent- ed law graduates from National Law Schools and similarly placed institutions, there are now in the profession, advocates with seven to ten years of practice experience who would be inclined to join the district judiciary as they have a chance to get promoted to the higher judiciary in reasonable time. They don’t have to retire as district judges if they show good performance at the district level. The job profile and sta- tus in the judiciary are certainly more attractive than what is on offer in other central services. If the judicial academies give proper training and High Courts provide the freedom within identified parameters to innovate at work, district judges’ effi- ciency will increase considerably and this would reduce appeals arising from their decisions. For motivated young men and women, job satisfaction and personal reputation are more important than money and power. They are less likely to become corrupt as they consid- er their professional career more signifi- cant than anything else. Bar-Bench relations are also likely to change for the better, a desirable reform in the present circumstances. So-called language barriers will not be a serious problem as youngsters learn languages quickly. Many law graduates are already proficient in more than one Indian lan- guage as they spend five years and more studying law at a law school outside their home states. In short, the time for AIJS is now and it will bring a remark- able breakthrough in further integration of the legal and judicial system of the country, giving it quality and efficiency, much-needed presently. AIJS has become essential for anoth- er reason as well. The existing system under which High Courts or State Public Service Commissions are recruit- ing judges to the district judiciary is so full of loopholes, delays and inefficiency that it is unable to produce enough qualified candidates to fill the vacancies. In some cases, even those limited selec- tions are challenged in unending litiga- tion, denying judiciary the services of meritorious candidates. It is sad that while other public services get relatively better candidates, the judicial services even at the district level are left to man- age with less meritorious candidates or with none after prolonged selection pro- cedures and substantial expenses. This is not because the judiciary is not an attractive service to the talented, but because of frustrating procedures and inefficient management practices. AIJS selection by a central agency under judi- cial supervision will make the difference that the system is waiting for. Finally, does AIJS hit the federal structure of the polity as contended by some people? In this connection, it is necessary to recall the words of Dr BR Ambedkar. While introducing the Draft Constitution, he said: “….When diversity created by division of authority in a dual polity goes beyond a certain point, it is capable of producing chaos. The Draft Constitution has sought to forge means and methods whereby India will have Federation and at the same time will have uniformity in all basic matters which are essential to maintain the Unity of the country. The means adopt- ed by the Draft Constitution for this purpose are (i) a single judiciary, (ii) uniform laws, civil and criminal, and (iii) a common All India Service to man important posts.” Dr Ambedkar felt that federal polity LONG WAIT Litigants wait outside Tis Hazari courts Lead/ All-India Judicial Service Anil Shakya
  15. 15. | INDIA LEGAL | January 21, 2019 17 Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com would be strengthened in consistent with the unity of the country by having a single judiciary with uniform laws and an all-India judiciary. In fact, a uni- fied judiciary helps to institutionalise the idea of co-operative federalism. Although the Constitution empowers Parliament to establish separate courts for enforcement of Union laws, it has, in the interest of unity and integrity of the nation and economy, continued the system of a single integrated judiciary for the Union and states. O f course, there is a justifiable complaint that the government (State as well as central) is pro- viding very little financial support to the judiciary. According to available data, except Delhi, all states are provid- ing less than one percent of their budg- et for subordinate judiciary. In fact, more than half of the amount spent on the judiciary is raised by the judiciary itself through collection of court fees, stamp duty and miscellaneous charges (Agenda Notes of the Conference of Chief Ministers and Chief Justices of High Courts, 2006). The plan funds provided by the Union government to the judiciary varied from a mere `700 crore in the Tenth-Plan to a couple of thousand crores in the Twelfth Plan. A centrally sponsored scheme for develop- ment of infrastructure for subordinate judiciary brought central/state funds on a 50:50 basis. The Thirteenth Finance Commission recommended substantial increase in central funding of the judiciary, includ- ing subordinate courts. A report of the Justice Jagannath Rao Committee, appointed by the Supreme Court on the subject of judicial impact assess- ment, wanted the government to make the fund for additional judicial time required to implement Union laws to be fully included in the Financial Memorandum wherever a law/bill is introduced. This amount should be additionally provided to the judiciary independent of the regular budget. Given the limited finances available with states, the funds required for an integrated all-India judiciary have to be necessarily provided by the central gove- rnment. Such an approach will streng- then the federal scheme of governance while enabling the judiciary to manage its internal administration efficiently without having to depend on the govern- ment for getting even basic facilities. —The author is a former Director of the National Judicial Academy and is presently Hony. Director of the Kerala Bar Council MKN Academy for Continuing Legal Education, Kochi MOTIVATED CANDIDATES Prospect of a lucrative career will draw meritorious students into the judicial service Ifthejudicialacademiesgiveproper trainingandHighCourtsprovidethe freedomwithinidentifiedparametersto innovateatwork,districtjudges’ efficiencywillincreaseconsiderably. UNI
  16. 16. Investigation/ CBI 18 January 21, 2019 he recent goings-on at the highest echelons of the CBI and the government make for a thrilling Bollywood script. A prime minister and his palace intrigue, deafening political uproar, courtroom drama, feuding cops, corrup- tion scandals—the script has all it takes to set cash registers ringing. But this potboiler isn’t something you enjoy watching while gorging on popcorn and cola. It is a grim reality that makes a mockery of India’s democracy and its institutions. Late evening on January 10, Alok Verma was summarily discharged as CBI director, a post he was conditionally reinstated to by the Supreme Court just 48 hours earlier at the end of an acerbic legal battle against the central govern- ment and the Central Vigilance Commission (CVC). The verdict for his reinstatement, authored by Chief Justice Ranjan Gogoi, had slammed the manner in which Verma was sent on leave by the CVC and the government through a midnight order on October 23. However, it also made Verma’s continuance as CBI chief subject to a final decision to be reached within a week by the selection panel that had appointed him. The selection panel consists of the prime minister, the chief justice of India and the leader of Opposition (or the largest Opposition party) in the Lok Sabha. The chief justice, having authored the verdict on Verma’s plea challenging the October 23 decision, recused himself from the selection panel and nominated Justice AK Sikri to take his place ins- tead. Unsurprisingly, the same princi- ples of conflict of interest and morality did not force Modi to recuse himself from the panel. This, despite the role of the Prime Minister’s Office, and by extension the prime minister himself, in allegedly forcing the October 23 action against Verma and interfering in the CBI’s functioning, being questioned on several occasions. Verma was shunted out after Modi and Justice Sikri concluded that some allegations made against him in a CVC inquiry report were grave enough to warrant action. However, seven other allegations investigated by the CVC against Verma, including one of receiv- ing bribes, were found to be unsubstan- tiated (see box). The selection panel’s third member, Congress leader Mallikarjun Kharge, demanded that Verma be allowed to continue as CBI chief and also present his defence before the panel. Soon after the selection panel’s deci- sion, the government decided to transfer Verma as Director General, Fire Services, Civil Defence and Home Guards. There was no explanation on how an officer dismissed from heading one government agency on grounds of professional misconduct was fit to head three other units. Verma, a 1979 batch IPS officer, in a tersely worded letter to Chandramouli C, secretary of the Department of Personnel and Training, turned down his new posting and instead, resigned Under Fire ThesordidepisodeofCBIdirector AlokVerma’sreinstatementandlater sackingshowsthepowergames embroilingIndia’stopinvestigating agency.Aspollsnear,thisdramacould spilloverintothepoliticalarena By Puneet Nicholas Yadav T Incontrasttotheurgencyitshowedin sackingVerma,thecentreandtheCVC areyettotakeasimilaractionagainst RakeshAsthana,aGujaratcadreofficer knownforhisproximitytoModi.
  17. 17. | INDIA LEGAL | January 21, 2019 19 from service on January 11. The news of Verma’s resignation coincided with another development. The Delhi High Court, in a verdict authored by Justice Najmi Waziri, dis- missed a plea filed by CBI special direc- tor Rakesh Asthana seeking quashing of the FIR filed against him by the probe agency. This was linked to a bribery case involving Hyderabad-based business- man Sathish Babu Sana and controver- sial meat exporter Moin Qureshi. The Court also vacated the interim stay on Asthana’s protection from arrest and directed the CBI to complete its probe against him within 10 weeks. That the genesis of the present crisis in the CBI began with the feud between Verma and Asthana is now widely known. A bulk of the charges against Verma that were investigated in the CVC inquiry came from complaints filed by Asthana. Verma has maintained that Asthana’s complaints to the CVC were the direct result of the CBI closing in on his alleged financial improprieties and other misconduct. Further, Verma’s frosty equations with Central Vigilance Commissioner KV Chowdary, the author of the inquiry report, are well-known and precede the current imbroglio by over a year. When Verma was sent on leave on October 23, there was an alleged attempt to hush up the cases against Asthana. All CBI officers who were probing Asthana were either transferred or reassigned on October 24 by Nageswara Rao, the interim CBI chief. In the 48 hours that Verma returned as CBI director following his reinstate- ment, he rescinded these transfers. But then, Rao returned as the interim CBI chief on January 11, and promptly restored his earlier orders of October 24. I n contrast to the urgency it showed in shunting Verma out of the CBI, the government and the CVC are yet to take a similar action against Asthana, a 1984 batch Gujarat cadre officer known for his proximity to Modi. Though currently on forced leave, Asthana continues to hold the rank of CBI special director. Coming to Verma’s resignation letter, he notes that “natural justice was scut- tled and the entire process was turned upside down” to ensure that he was removed from the post of CBI director. He goes on to say that the selection committee “did not consider the fact” that the entire CVC report is premised on charges alluded by Asthana “who is presently under investigation by the CBI” and that the “CVC only forwarded a purportedly signed statement of the complainant, and the complainant never came before Hon'ble Justice (Retd.) AK Patnaik (supervising the inquiry)”. The Supreme Court had, while hear- ing Verma’s plea, directed that the CVC inquiry must be supervised by Justice Patnaik, a former apex court judge. Verma further says that “Justice Patnaik has concluded that the findings/ conclu- sions of the report are not his”. Justice Patnaik has confirmed Verma's claim. In an interview to The Indian Express, Justice Patnaik termed Verma's sacking as a “very, very hasty decision”. “There was no evidence of cor- ruption regarding Verma....I have said in my report (filed separately with the Supreme Court) that none of the find- ings of the CVC's report are mine,” said Justice Patnaik. VermawasshuntedoutafterModiandJusticeSikri(centre)concludedthatsomeallegationsraisedintheCVCinquiryreportwere graveenoughtowarrantaction.Theselectionpanel’sthirdmember,CongressleaderMallikarjunKharge(right),however,dissented. UNI UNI
  18. 18. Investigation/ CBI 20 January 21, 2019 Biasedprobe? Here are the CVC’s inquiry report findings against Verma sourced from Mallikarjun Kharge’s dissent note to the selection committee Allegation against Alok Verma Finding Influencing investigation by taking bribe No evidence of payment of bribe; further investigation required for verifying circumstantial evidence a. Exclusion of a suspect from being named as an accused in an FIR – IRCTC scam b. Tried to call off searches/raids in Patna Allegation (a) substantiated; amounts to serious misconduct and warrants disciplinary and other actions Allegation (b) not substantiated Inordinate delay in finalising investigation report in bank fraud case against main accused, indicating favouritism towards the main accused Allegation found to be correct Transfer of SIR related to Joint Director, CBI Allegation not substantiated Not taking action on certain intelligence inputs Allegation not substantiated Illegal gratification in ongoing preliminary enquiry against land acquisition in Haryana Allegation not substantiated; further enquiry will be required Failure to take action in gold smuggling case at IGI airport Allegation partially substantiated; recommended to be re-investigated by different branch of CBI Helping the cattle smugglers; comman- dant of BSF Allegation not substantiated Attempts to induct tainted officers into CBI Allegation found to be substantiated Undue interference in CBI cases against ED officials Allegations have either not been substantiated or require further investigation His comments leave Modi, and even Justice Sikri, in a very embarrassing and suspicious position. Is it not surprising that the selection committee, which included a sitting Supreme Court judge, did not find it important enough to examine Justice Patnaik’s views that contradicted the CVC report and gave Verma a clean chit? The slugfest over Verma’s ouster has spilled over into the political arena. Congress president Rahul Gandhi has been claiming that Verma was sacked to prevent him from ordering a prelimi- nary inquiry into the controversial Rafale deal. “Why is the PM in such a tearing hurry to sack the CBI Chief? Why will he not allow the CBI Chief to present his case in front of the selection committee? Answer: RAFALE,” Gandhi tweeted when the selection committee was still in a meeting to decide Verma’s fate. After Verma was sacked, Gandhi tweeted: “Fear is now rampaging through Mr Modi’s mind. He can’t sleep. Sacking the CBI Chief Alok Verma twice in a row, clearly shows that he is now a prisoner of his own lies.” W hile keeping up the pressure on Modi by shooting from Verma’s shoulder is a political necessity for the Congress, it also knows that for now it has to be careful with the tenor of its diatribe. Given that the deci- sion to sack Verma had the concurrence of the representative of the chief justice on the selection panel, the Congress does not want to antagonise the top court. However, party leaders told India Legal that Justice Sikri is due to retire in March, and if, like many of his retired peers from the top court, he takes a post-retirement job offered by the Modi government, “the allegation of a quid pro quo would be easier to raise”. India Legal has also learnt that the CBI could soon proceed with an investi- gation against Verma on Asthana’s allegations. Verma’s troubles aren’t over yet. All eyes are now on who the selec- tion panel will select as the next full- time director of the CBI. Another excerpt from Verma’s resignation letter must be quoted here. “Institutions are one of the strongest and most visible symbols of our democ- racy and it is no exaggeration that the CBI is one of the most important organ- izations in India today. The decisions made yesterday will not just be a reflec- tion on my functioning but will become a testimony on how the CBI as an insti- tution will be treated by any government through the CVC who is appointed by majority members of the ruling govern- ment. This is a moment for collective introspection, to state the least.” One wonders if the prime minister, months before the Lok Sabha poll cam- paign, has time for this introspection. Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com
  19. 19. Focus/ Quotas 22 January 21, 2019 The passage of the Bill paves the way for Prime Minister Narendra Modi’s government to introduce a 10 percent reservation over the existing 49.5 per- cent reserved for Scheduled Castes, Scheduled Tribes and Other Backward Classes for “the economically weaker sections of society in higher educational institutions, including private institu- tions” and in government jobs. The amendment seeks to negate the cap of 50 percent on reservations that was set HE fear of electoral rever- ses is the most potent tool that determines the actions of a government—or its Opposition. Nowhere is this more apparent than in the unfortunate charade that played out in both Houses of Parliament on January 8 and 9 when the Constitution (124th Amendment) Bill was passed, abetted by a rare unanimity between the Treasury and Opposition benches. Reservation Ruckus T Thecentre’smovetohave10percentquotafortheecono- micallypoorovertheexisting49.5percentforSCs,STsand OBCsmaybeapollgimmick,butwillitstandlegalscrutiny? By Puneet Nicholas Yadav Photos: UNI
  20. 20. | INDIA LEGAL | January 21, 2019 23 by the Supreme Court through various judgments, notably in the Indra Sawhney case, and also the constitution- al and legal obligation of not providing reservations purely on the basis of eco- nomic backwardness. As Articles 15 and 16—which now stand amended—are not subject to the requirements of constitutional amend- ments laid out in Article 368 (2) (ratifi- cation by at least half of the state legisla- tures following passage by Parliament), the government is now free to issue an executive order granting the new quota. Whether the amendments, specifically meant to benefit the upper caste and electorally significant communities such as the Thakurs, Jats, Marathas and Patels, is legally sustainable is a question that is now being debated. Expectedly, a day after the Bill was passed by the Rajya Sabha, NGO Youth for Equality moved a plea in the Sup- reme Court challenging the amend- ments to Article 15 and 16. It stated that the amendment violates “one or the other basic feature of the Constitution, and hence such a manifest and obvious violation of the Constitution ought to be prevented”. So what are the political compulsions that forced the Modi government and the Opposition to join hands for the pa- ssage of the Bill? The Bill comes weeks after the BJP was voted out in MP, Chhattisgarh and Rajasthan in favour of the Congress. The poll outcomes show that the saffron tide had receded in urban areas where the opponents of the existing reservation policy— upper castes—constitute a formidable vote base. T he push for additional reserva- tion also coincides with Congress President Rahul Gandhi’s high- pitched diatribe against the Modi sarkar for perpetuating alarming rates of unemployment and failing to deliver on its 2014 poll promise of generating 10 million jobs annually. It also comes towards the fag end of its term which has, since 2014, seen agitations for reservations across states by the forward castes such as the Thakurs, Jats and Patels. The move is, thus, a clear sign of desperation of the BJP, shoddily pre- sented in the garb of social justice. For the BJP, the electoral benefits of the move are not hard to imagine. Not surprisingly, with everyone in his gov- ernment in self-congratulatory mood, the prime minister too did his usual chest-thumping, terming the Bill “a vic- tory for social justice” which “ensures a wider canvas for our Yuva Shakti to showcase their prowess and contribute towards India’s transformation”. The Opposition was simply given a fait accompli by Modi—resisting the Bill’s passage would have meant antago- nising the over 15 percent upper caste vote and giving the BJP a chance to claim that its political rivals criticise the government over unemployment but oppose a “historic act” that could rectify the malaise. In both Houses of Parliament, with the exception of a handful of negative votes, the Bill sailed through with the required two-thirds majority of mem- bers present and voting to enable a con- stitutional amendment. The negative votes included three in the Lok Sabha (AIMIM chief Asaduddin Owaisi and IUML MPs ET Mohammed Basheer and P Kunhalikutty), seven in the Rajya Sabha (MPs from the RJD, DMK and IUML), and some conveniently timed abstentions and walk-outs. The Opposi- tion benches hemmed and hawed, att- acking the Modi government for “yet another jumla”, but voted in favour of a Bill they otherwise opposed “because it was in the interest of the society”. Congress MP Kapil Sibal pointed out three foreseeable hurdles before the new reservation is implemented: “First is the complete non-application of mind on the part of the government in introduc- ing this Bill; second, the constitutionali- ty of this Bill; third, the implementation of this Bill.” Sibal said that the Bill vio- lates the top court’s Indra Sawhney ver- dict as also the basic structure doctrine enumerated in the Kesavananda Bharati judgment. Nonetheless, he voted in favour of the Bill. Union law minister Ravi Shankar Prasad disagreed with Sibal’s objections, stating that the “basic structure of the Constitution has nothing to do with reservations… In this Bill we are adding a clause to Article 15 where reservation will be given in educational institutions and employment and under Article 16 to public employment. Our reservation will not touch the existing reservation for SCs, STs and OBCs”. He also dismissed the Opposition’s contention that the Bill violates the Indra Sawhney verdict. Though the Bill may have sailed through, there is a major legal hurdle ahead. The majority verdict in Indra Sawhney, passed by a nine-judge Cons- titution Bench headed by then Chief Anylegalbattlewouldclearlytakemore thanfivemonthsfortheSupremeCourt toresolve.Anddecipheringwhoarethe economicallybackwardpaintsaneven moreproblematicsituation. FALSE HOPE? (Facing page) Demonstrators at a Jat Aarakshan Adhikar rally demanding reservation for the community; youth queue for registration at a job fair in Rajasthan
  21. 21. Focus/ Quotas 24 January 21, 2019 Justice MN Venkatachaliah, had cate- gorically said: “…Constitutional philoso- phy being against proportional equality the principle of balancing equality or- dains reservation, of any manner, not to exceed 50 per cent.” It had added: “A backward class cannot be determined only and exclusively with reference to economic criterion.” Despite this, several states have tried to breach the 50 percent cap, with Tamil Nadu even going to the extent of having a quota of 69 percent. But none of these have stood legal scrutiny. Tamil Nadu’s additional 19 percent quota was legally upheld, but only after it increased the same number of seats in the unre- served category. Any legal challenge to the 50 percent cap on reservations will have to be adju- dicated by a bench of no less than 11 judges. Such a battle would clearly take more than five months for the Supreme Court to resolve, by which time the Modi government’s time in office would be over. If the legal road ahead is rocky, the practical challenges in its implemen- tation and the social turmoil it would unleash would be no less. Dalit scholar and Osmania Univer- sity professor Kancha Ilaiah Shepherd told India Legal: “Those who are now lobbying for reservation for the savarna (upper caste) people are the same peo- ple who until yesterday were claiming that the quota system has killed merit. It is their own argument that they are now trying to negate. Secondly, I believe that if the government has decided to put the 50 percent cap behind, then it must first increase the quota for the bahujans (Dalits and backwards) in proportion to their population.” U nion ministers Anupriya Patel and Ramdas Athawale have already demanded that the cen- tre make public the findings of the Socio-Economic Caste Census (SECC) 2011. Both, along with other Opposition leaders, believe that the proportional representation of SCs, STs and OBCs will have to be significantly hiked if the caste census data is revealed. Deciphering who are the economical- ly backward paints an even more prob- lematic situation. If reports are to be believed, the government considers the following as economically poor: a family with an annual income of less than `8 lakh, or with a residence of less than 1,000 square feet area or agricultural land holding of less than five hectares or a plot of less than 100 yards in notified municipal areas or 200 yards in non- notified municipal areas. This criteria, say Opposition leaders, is laughable. “First, where is the empiri- cal data to ascertain who all qualify under these categories? Second, if one takes 2011-12 as the base year then India’s net per capita annual income, at constant prices, is just `80,000-85,000, what is the sense in declaring `8 lakh annual income as the yardstick for eco- nomic backwardness? Also, real estate prices differ from place to place—a 1,000-square-foot residence in south Delhi or south Mumbai is worth crores. How is its owner poor?” asked RJD MP Manoj Jha. But, while the government has prom- ised new reservation in jobs, where are the employment opportunities? According to a report by newslaundry.com: “If we take a look at the Modi years, around 1.78 lakh jobs have been added at the central govern- ment level (since 2014). This works out to around 45,000 jobs a year, on an average. If a reservation of 10 percent would have been in place for the eco- nomically weaker sections of the society, it would have added 4,500 jobs per year.” This, when job creation in public sector enterprises has been on a steady decline over the past four and a half years while over 10 million youth are being added to the workforce annually. The recent “Unemployment Rate in India” report by the Centre for Moni- toring Indian Economy shows that the unemployment rate has been rising, peaking at a 27-month high of 7.38 per- cent as of December 2018. In addition, the number of employed Indians fell by 10.9 million over the last 12 months as salaried employees lost their jobs due to a combination of economic factors. So, while Modi can promise 10 per- cent new reservation, is he really gener- ating enough jobs to accommodate them? A WhatsApp joke sums it up best: “This 10 per cent reservation for economically backward people is like a lollypop which has a glittery cover and a stick but no toffee inside.” Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com “Firstisthecompletenon-applicationof mindonthepartofthegovernmentin introducingthisBill;second,the constitutionalityofthisBill;third,the implementationofthisBill.” —CongressMPKapilSibalonitspitfalls “BasicstructureoftheConstitutionhas nothingtodowithreservations….Our reservationwillnottouchtheexisting reservationforSCs,STsandOBCs.” —LawministerRaviShankarPrasad, disagreeingwithSibal
  22. 22. | INDIA LEGAL | January 21, 2019 25 Supreme Court/ Vacancies HORTLY after he took over as chief justice of India, Ranjan Gogoi warned state governments and High Courts (HCs) that the Supreme Court will take over the process of filling up vacancies in the lower judiciary if they fail to expedite the exercise. “We are telling all high courts and states that we are keeping you under constant gaze. If you cannot fill vacancies, then we will take over….We want our judges to be in place,” the CJI had said. The task of filling up vacancies ac- ross all levels in the judiciary is a gigan- tic one, but the CJI is leading by exam- ple. Since he assumed office, four judges have been sworn in as judges of the Supreme Court. In the first week of January, the SC Collegium, comprising of the five senior most judges—CJI Gogoi and Justices AK Sikri, SA Bobde, NV Ramana and Arun Mishra—met and after extensive discussion, recommend- ed the names of two more judges. They are Chief Justice Dinesh Maheshwari of the Karnataka High Court and Justice Sanjiv Khanna of the Delhi High Court. This will take the strength of the Court to 28, leaving three vacancies. According to the resolution, posted on the SC website, while recommend- ing the names of Justices Maheshwari and Khanna, the Collegium took into consideration the combined seniority on an all-India basis of chief justices and senior puisne judges of High Courts, apart from their merit and integrity. The Collegium also kept in mind the desirability of giving due rep- resentation on the bench of the Supreme Court, as far as possible, to all the High Courts. Earlier, the Collegium had met on December 12, 2018, to recommend names for judgeship in the Supreme Court and transfers of chief justices and judges of High Courts. The resolution read: “The then Collegium on 12th December, 2018 took certain decisions. However, the required consultation could not be undertaken and completed as the winter vacation of the Court intervened. By the time the Court re- opened, the composition of the Collegium underwent a change. After extensive deliberations on 5th/6th January, 2019, the newly constituted Collegium deemed it appropriate to have a fresh look at the matter and also to consider the proposals in the light of the additional material that became available.” J ustice Dinesh Maheshwari was appointed as a judge of the Rajas- than High Court on September 2, 2004 and transferred to Allahabad High Court on July 19, 2014. He was elevated as chief justice of Meghalaya High Court on February 24, 2016 and transferred to Karnataka High Court on February 12, 2018. He is No 21 in the combined sen- iority of High Court judges. Justice Sanjiv Khanna was appointed as a judge of the Delhi High Court on June 24, 2005. He is No. 33 in the combined sen- iority of High Court judges. The last time the Collegium recom- mended names (four of them) for eleva- tion to the Supreme Court was in November. The centre then had notified their appointments in less than 48 hours. CJI Gogoi had then said that he was “simply overawed” by the speed with which the government had moved. It is hoped that the centre shows the same alacrity this time too. CJI Leads by Example TheSCCollegiumhasrecommendedtwomorenamesforele- vationasjusticesoftheapexcourt,takingitsstrengthto28 By India Legal Bureau Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com S Whilerecommendingthenamesof JusticeDineshMaheshwari(left)and SanjivKhanna,theCollegiumconsidered combinedseniorityonall-Indiabasis apartfrommeritandintegrity.
  23. 23. Column/ Constitutional Morality Prof NR Madhava Menon 26 January 21, 2019 FTER reading Professor Upendra Baxi’s comment on Attorney General KK Venugopal’s concern over Constitutional Morality being used by the Sup- reme Court as yet another weapon to strike down laws (India Legal, Decem- ber 24, 2018), I felt like raising some fundamental questions on the debate. This is in order to clarify to myself and citizens like me about the implications of the debate for the future of rule of law and constitutional governance. The questions are as follows: 1. As an overarching principle of consti- tutional governance, is not the concept of Constitutional Morality and whatever it means applicable to all three wings of the State and the citizenry? If so, when the legislature, which represents “WE, ture of democracy itself? 3. Given the fact that there is no single Supreme Court to decide on constitu- tional questions and there are multiple courts, depending on the constitution of benches, and also given the fact that often important constitutional questions are decided by benches with a one- or two-vote majority and further, given the general impression that the rule of colle- giality is very often missing among judges, how does the power dynamics of the bench impact on constitutional gov- ernance and rule of law? 4. Is the Court free to invoke Constitu- tional Morality to decide against the text of the Constitution as in the case relat- ing to appointment of judges to the higher judiciary? 5. When Constitutional Morality is invoked by judges of the same bench to come to opposite conclusions as during the Sabarimala judgment, what is the message it gives for constitutional gov- ernance and rule of law? 6. Is the Court the custodian of people’s faith and belief as well? Can it possibly interdict on customs and practices tra- ditionally followed by religious denomi- nations on grounds other than what are provided for in Article 26? Are there judicially manageable standards to eval- uate every religious practice in every religion? Is not complementarity of con- stitutional institutions also part of Constitutional Morality? 7. What happens when two Funda- mental Rights, one guaranteed to indi- viduals and the other to groups of peo- OneofIndia’stoplegalscholarssparksoffanewdebatebyponderingtheissueof thebasicstructureoftheConstitution A Eight Burning Questions AttorneyGeneralKKVenugopal’sconcern overConstitutionalMoralitybeingusedby theSCasanotherweapontostrikedown lawhasimplicationsforthefutureofrule oflawandconstitutionalgovernance. THE PEOPLE”, makes a law, is it not fair to say that such a law can be pre- sumed to incorporate Constitutional Morality? Should the Court in such cir- cumstances be obliged to seek strict scrutiny and positive evidence to strike it down through judicial review? 2. Is there any justifiable fear in the public mind that too much power is get- ting concentrated in the judicial wing without proper checks to prevent judi- cial excesses and that works to the detri- ment of not only Constitutional Morality and Rule of Law, but to the basic struc- Anil Shakya
  24. 24. | INDIA LEGAL | January 21, 2019 27 ple, contradict each other? If right to privacy is interpreted to mean the pre- vention of the State taking necessary steps to ensure security, what will hap- pen to right to life and right to freedom of individuals? Who is best to judge the right balance between liberty and security in the era of terrorism and digi- tal transaction? 8. Could Dr BR Ambedkar be wrong when he said that Constitutional Morality is a “sentiment” which has to be cultivated among the people as it is not natural to them? Can the attorney general be faulted when he said that as far as Dr Ambedkar’s invocation of the doctrine is concerned, it was more a mandate to the people and their repre- sentatives, rather an additional source of power for the Court? The issue, to my mind, is not the importance or relevance of the concept of Constitutional Morality in working out the provisions of the Constitution. Rather, it is about the use and abuse of the doctrine in constitutional deci- sion-making. No doubt, democracy as a system of governance may not serve the constitu- tional goal always. That is a price society has to pay for accepting a democratic form of government and polity. The remedy for preventing majori- tarian excesses lies more in cultivating the natural sentiment of people for maintaining Constitutional Morality (as Dr Ambedkar seemed to think) rather than in showing “less deference to the legislature” in the matter of constitu- tional values, as some judges seem to think. The ugly consequence which resulted in forcible enforcement of the Supreme Court judgment in Sabarimala by a government controlled by a party of “non-believers” cannot be dismissed as a conflict between public morality and Constitutional Morality. It is indeed a portent of what the attorney general believed to be the possible outcome for rule of law and democracy if Constitu- tional Morality turns out to be yet another tool beyond “Basic Structure” for exercising judicial power. —The author is a former Director of the National Judicial Academy and is presently Hony. Director of the Kerala Bar Council MKN Academy for Continuing Legal Education, Kochi Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com WhenConstitutional Moralityisinvoked byjudgesofthe samebenchto cometoopposite conclusionsas duringtheSabarimala verdict,whatisthe messageitgivesfor constitutional governanceand ruleoflaw? CouldDrBRAmbedkarbewrong whenhesaidthatConstitutionalMorality isa“sentiment”whichhastobe cultivatedamongthepeopleasitis notnaturaltothem? UNI
  25. 25. Courts/ Chennai’s Spas & Massage Parlours 28 January 21, 2019 N what is a relief to owners of spas and massage parlours in Chennai, the Madras High Court has con- demned the city police for wanton- ly treating them as illegal brothel houses. In a hard-hitting judgment, Justice N Anand Venkatesh, who was hearing a batch of petitions filed by vari- ous spas and massage centres in Che- nnai, said: “In recent times, this court witnessed a flurry of cases challenging the action initiated by the police against spas and massage centers, its owners and women working as massage thera- pists in these centers, under the Im- moral Traffic (Prevention) Act. In all these cases the owners were added as the accused and the women working in these centers were shown as victims involved in prostitution.” He added: “Outlook of the society regarding spas and massage centers should change. Ignorance of science towards massage centers must change. Preconditioned mind of the majority, who unfortunately see spas and massage centres as brothel houses, must change and this is an urgent need.” The judge quashed the FIRs regis- tered against nine therapists, including a woman therapist from Indonesia, and a spa called Alwarpet in South Chennai. Explaining one case, the judge said: “Here we have an instance of an officer, accompa- nied by witnesses, proceeding into the bedroom of a young girl and pushing open a closed door, without having even the civility of a knock or other warning to her to prepare for the intrusion. Such conduct would be quite inexcusable, unless the officer thereby hopes to gather the evi- dence which is essential for proof of any charge.” Justice Venkatesh further added: “The police have no legal right to prevent a spa being operated by anyone even if the therapy was done by persons of one sex to those belonging to the opposite sex. A health spa, where cross-gender massages is a worldwide phenomenon, there is no legal prohibition and to borrow the wordings of the Supreme Court, except the majoritarian impulses rooted in moralistic tradition which was attempt- ing to impinge upon individual autono- my.” The judge also ordered a compen- sation of `2.5 lakh to the female Indonesian massage therapist for being detained for 26 days by Inspector K Natarajan of Neelangarai police station who booked a case against her employer. The judge also ruled that the compensa- tion be given to her through the Indone- sian consulate and this amount be re- covered in monthly instalments from Inascathingindictmentofthepolice,theMadrasHighCourtsaidthattheseestablishments shouldnotbeseenasillegalbrothelhousesandquashedFIRsregisteredagainstninetherapists By R Ramasubramanian in Chennai I Brothel Brouhaha NOTHING TO HIDE There are around 100 professional spas and massage parlours in Chennai which abide by the law justdial.com
  26. 26. | INDIA LEGAL | January 21, 2019 29 the salary of Natarajan. In Chennai, if anyone wants to run a spa or massage centre, he has to get a licence from the revenue department of the Chennai Corporation. The licence fee is just below `2,000 per annum and it has to be renewed every year for the same amount. This “hair cutting and saloon” licence covers spas and massage parlours also. “There was huge misuse of this licence from the early 1980s to 2005. All sorts of immoral activities took place in massage centres. In those times, there were not many spas and around 90 per- cent of these centres were called mas- sage parlours and cross massages (gen- erally women to men and men to women) were the order of the day. But the situation changed after 2005,” said C Rajashekaran, an advocate with clients who run spas and massage centres. “After the arrival of software compa- nies and automobile giants like Ford, Hyundai and Mahindra in the outskirts of Chennai, genuine visitors to these spas and massage parlours increased. There are over four lakh IT and man- agement professionals working in these sectors. Their stress levels compelled them to visit them. This forced the arri- val of professional spas and massage centres in Chennai. They are profession- als and there is hardly any chance of them indulging in immoral activities,” said Rajashekaran. He said that one needs at least `5 crore to `7 crore to set up a professional spa. This investment is needed for state- of-the-art equipment, rentals, interior decoration and salaries for around 10 employees. That includes an MBBS doc- tor, therapist, yoga teacher, etc. “The doctor teaches the therapist how to han- dle a visitor according to his medical condition. If a client has a specific med- ical ailment, the therapist thoroughly diagnoses him before administering the relevant therapy or massage. They check the blood pressure and pulse rate before starting the body massage, steam bathing, etc. So the situation has got vastly improved from 2005 onwards,” he explained. P olice sources said that there are at least 100 professional spas and massage parlours in Chennai which are run strictly in accordance with law. “They pay their annual renew- al fees properly. But the problem is that there are parlours indulging in illegal activities and these are double the num- ber of these professional centres. These spas and massage parlours are just a camouflage to run full-fledged brothels and sometimes, the police is unable to differentiate between genuine ones and these illegal ones.” Also, there is the potential for For- eign Direct Investment (FDI) in this sector. An owner of a spa and massage centre told India Legal: “Spas and mas- sage parlours come under tourism and health sectors and renowned global players are waiting to come to Chennai and invest. But if law enforcing agencies behave in this manner, who will come and invest?” He added that Chief Minister J Jayalalithaa had conducted the first-ever Global Investors’ Conference in Chennai in September 2015. The second one will be held in Chennai later this month. Some circles are surprised that police excesses of this sort are happening when global investors are going to arrive shortly in the city. It is time that the administration takes appropriate steps to mitigate the situation. Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com “Outlookofthesocietyregardingspas andmassagecentersshouldchange. Ignoranceofsciencetowardsmassage centersmustchange.Preconditioned mindofthemajoritymustchange.” —JusticeNAnandVenkatesh, MadrasHighCourt Genuinevisitorstospasandmassage parlourshaveincreasedinChennaiwith thearrivalofsoftwarefirmsandauto giantslikeFord(below).Thishasledto professionalspasandmassagecentres. autocarpro.in
  27. 27. Courts/ Judges’ Criminal Record 30 January 21, 2019 O become a judge, good character means an un- blemished criminal record. The Madhya Pradesh High Court succinctly sent out this message by dismissing the petitions of two advocates who had challenged denial of their appointment as district judges after being selected for the posts in the entry level recruitment in 2017. The petitioners—Deep Narayan Tiwari and Nand Kishore Sahu—had argued that they had truthfully men- tioned the criminal cases pending against them while applying for the dis- trict judge’s posts. They also said that they had already been acquitted of the charges they faced before the selection. However, a division bench compris- ing Chief Justice SK Seth and Justice VK Shukla observed that mere acquittal in a criminal case would not be suffi- cient to infer that a candidate possessed good character. In its order, the bench refused to interfere with the decision of the High Court Scrutiny Committee that had re- jected the petitioners for judgeship because they had faced prosecution in two criminal cases. The petitioners had filed separate petitions which the High Court clubbed together in view of the similar nature of their grievances. Tiwari and Sahu were selected as district judges by the High Court for MP Higher Judicial Service (Entry Level) Direct Recruitment in the Bar Examination of 2017. Their names were included in the final list of selected candidates. However, in their joint TheMPHighCourtdismissedthepetitionsoftwoadvocateswhowerenotappointedasdistrict judgesduetocriminalcasesfiledagainstthemanddespitebeingacquittedofthecharges By Rakesh Dixit in Bhopal T No Room for Error STRONG REFERENCE The division bench of the MP High Court cited three past verdicts to justify its decision barandbench.com
  28. 28. | INDIA LEGAL | January 21, 2019 31 meeting, the Administrative Committee (Higher Judicial Services) and Exam- ination-cum-Selection and Appoint- ment Committee rejected the two lawyers’ selection without disclosing to them the reason for doing so. The petitioners took recourse to the Right to Information (RTI) Act to obtain the minutes of the joint commit- tee meeting held on July 18, 2018. The RTI information revealed that in respect of Tiwari, the Committee noted: “After due consideration (it is) resolved that though a case against Shri Deep Narayan Tiwari under sections 354/34, 186, 294 and 506-BB read with Section 34 of IPC resulted in acquittal, the case section 305/34 Indian Penal Code and 3(2)(v) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, is still pending before Special Judge (SC/ST), Shahdol. The candidature of the candidate is not recommended for appointment in view of reasons recorded.” Sahu’s appointment was also cancelled on the same ground. C hallenging this ground for can- cellation of their appointment, the petitioners submitted that the criminal cases against them had been quashed. KC Ghildiyal, the advo- cate for the petitioners, submitted that after the decision by the Committee, charges in the pending criminal case had been quashed by the High Court in the Deep Narayan Tiwari vs State of MP criminal appeal. The High Court had said in this case that “he has been dis- charged from the offence under Sections 506 and 385 of the Penal Code, 1860 and under Sections 3(1)(r) read with 3(2)(v)(a) of Atrocities Act, 1989”. The petitioners also contended that they had truthfully disclosed pendency of crimi- nal cases against them while applying for the district judge’s posts. However, the selection committee’s counsel submitted that the petitioners had no right to be appointed merely because they had honestly disclosed the criminal cases against them. It was also pointed out on behalf of the Committee that Tiwari was acquitted on August 8, 2018, whereas the panel had disquali- fied him in a meeting held on July 18, 2018. Therefore, on the date of appoint- ment of the petitioner, the criminal cases were still pending against him. After hearing both sides, the divi- sional bench cited three past judgments to conclude that “mere selection would not confer any right as appointment is always subject to character verification of a selected candidate”. The judges referred to the full bench judgment in Ashutosh Pawar vs High Court of MP which was passed in January last year. It pertained to the question of whether acquittal in criminal cases is proof of good conduct. In conjunction with this, the bench also cited the 2018 case of State of MP vs Abhijit Singh Pawar in which the Supreme Court held that “an employer can certainly take into account the job profile for which the selection is under- taken, the severity of the charges lev- elled against the candidate and whether the acquittal in question was an hon- ourable acquittal or was merely on the ground of benefit of doubt or as a result of composition”. The bench also referred to the Supreme Court judgment in the case of Union territory Chandigarh administration and others vs Pradeep Kumar to buttress its ruling. The petitions were then dismissed, with the Court observing: “We do not find any merit in the writ petitions. Admittedly, on the date of consideration of the cases of the petitioners for app- ointment, there were criminal cases pending against them and mere selec- tion would not confer any right as appointment is always subject to charac- ter verification of a selected candidate.” Interestingly, two more judges were disqualified by the MP High Court in October 2017 for violating the two- child norm, only to be reinstated six months later. In March 2018, the High Court rein- stated two additional district judges (ADJs) with the direction to grant them all consequential benefits except salary from the date of termination till the date of reinstatement. Advocates Ashraf Ali and Manoj Kumar had appeared in the Direct Recruitment Examination and were appointed ADJs at Jabalpur and Gwalior, respectively, in April 2017. When it was disclosed that Kumar had five children and Ali three, the High Court Selection Committee terminated their service in September 2017. The two ADJs moved the High Court, argu- ing that the termination orders had been passed without hearing them. The High Court took note of this and or- dered their reinstatement. However, in the present case, there seems no such succour. Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com AnMPHighCourtdivisionbenchofChief JusticeSKSeth(top)andJusticeVK Shuklasaidthatmereacquittalina criminalcaseisnotenoughtoinferthata candidatehasgoodcharacter.
  29. 29. HE on-going tussle between Ericsson and Reliance Communications (RCom) in the Supreme Court makes an interest- ing case study on corpo- rate disputes and its effect on the rule of law, as also on the public exchequer. The case was initially fought between Ericsson and RCom in the National Opinion/ Ericsson-Reliance Communications Tussle 32 January 21, 2019 Company Law Tribunal (NCLT) in Mumbai for the recovery of dues to the tune of approximately `1,500 crore that the latter owed to the former. The case has also entangled the Department of Telecom (DoT) which has an independent claim of more than `2,800 crore from RCom towards spec- trum usage charges. The dispute can be traced to 2013 when Ericsson entered into agreements with RCom and its Group companies (Reliance Infratel Limited and Reliance Telecom Limited) for managing and optimising the latter’s telecom infra- structure. When RCom and its subsidiaries failed to pay Ericsson for services pro- vided between 2013 and 2017, Ericsson filed an insolvency petition before NCLT in Mumbai claiming that RCom owed it nearly `1,500 crore. The petition was admitted by NCLT, but the proceedings were soon stayed by the National Comp- any Law Appellate Tribunal (NCLAT) after Ericsson agreed to settle for `550 crore if that amount was paid within 120 days. RCom failed to do so and the case went to the Supreme Court in August 2018, when RCom gave an undertaking that it would pay the agreed sum by September 30, 2018. In the meanwhile, DoT, which became concerned over RCom’s finan- cial health owing to the NCLT proceed- ings, issued it a demand notice for pay- ment of dues of spectrum usage charges from 2006-07 onwards. This had to be either paid or secured by bank guarantees before the Depart- ment could approve a proposed deal between RCom and Reliance Jio for sale of the former’s airwaves. According to DoT, RCom’s spectrum dues had to be paid or secured by bank guarantees either by RCom (the seller) Caught in a Tangle T AsRComfailedtopayEricssonbythe extendeddeadline,thelatterreacted stronglywithacontemptpetitionin theSupremeCourtseekingcivil imprisonmentofRCom’schairman, AnilAmbani.Themoveprompted RComtomakeapartpaymentof `131croreincourt RCom’sattempttopayEricssonforitsserviceswithaplanto sellairwavestoRelianceJiohasledtoatriangularcontestand astalemateintheSupremeCourt By Apoorv Kurup
  30. 30. | INDIA LEGAL | January 21, 2019 33 RCom-Reliance Jio spectrum sale. However, the government has recently declined to approve the deal after Reliance Jio refused to commit to pay RCom’s past dues for spectrum usage charges. As expected, RCom failed to pay Ericsson by the extended deadline. Ericsson responded strongly with a con- tempt petition in the Supreme Court seeking civil imprisonment of RCom’s chairman, Anil Ambani. The move prompted RCom to make a part pay- ment of `131 crore in court. RCom’s attempt to associate its pre- vious undertaking to pay Ericsson with its plan to sell airwaves to Reliance Jio is creating a triangular contest between Ericsson, RCom and DoT. This is ultimately leading to a stale- mate that the Supreme Court realises is not in anyone’s interest. (Court orders indicate that the agreement between Ericsson and RCom was not predicated on funds that RCom hoped to raise from its sale of spectrum to Reliance Jio.) Moreover, RCom gave an undertak- ing to the Supreme Court that it would pay Ericsson by a stipulated date. Such solemn promises voluntarily made in a court of law by a party skilled in com- merce should not ordinarily be rescind- ed or caveated, particularly when they form part of a settlement that was reached for the very purpose of expedi- tiously ending litigation. Insofar as DoT’s spectrum dues are concerned, it is public money which should be paid or secured as best as pos- sible and with minimal exposure to fluc- tuating market valuations of land or the worth of a company. Bank guarantees are, and will continue to be, the surest and most viable mechanism for securing public revenue. —The writer is a Supreme Court advocate Twitter: @indialegalmedia Website: www.indialegallive.com Contact: editor@indialegallive.com or Reliance Jio (the purchaser) by fol- lowing the Department’s Spectrum Trading Guidelines of 2015. According to these guidelines, the seller must clear all its dues prior to concluding any agreement for spectrum trading. The government is also entitled to recover amounts which were not known to the parties at the time of the effective date of trade from the buyer and/or seller. The guidelines also state that any such trade in airwaves can be permitted only after the rights and lia- bilities of the seller are transferred to the buyer. RCom, which challenged DoT’s demand notice in the Telecom Appellate Tribunal (TDSAT), denied that it owed the spectrum charges because the Department’s method for calculating such dues did not comply with a prior TDSAT judgment (which has been appealed but has not been stayed by the Supreme Court). RCom also contended that it urgent- ly needed to sell its spectrum to Reliance Jio to raise funds to repay debtors such as Ericsson. After a prolonged battle, TDSAT passed an interim order in October 2018 directing DoT to permit the spectrum sale between RCom and Reliance Jio on the condition that the former would secure 50 percent of the spectrum dues claimed by DoT by pledging certain lands owned by a subsidiary in Navi Mumbai. RCom was, therefore, not required to furnish bank guarantees. That same month, the Supreme Court granted RCom a final extension up to December 15, 2018, to pay the amount owed to Ericsson. The fate of Ericsson’s dues, which RCom had separately undertaken to pay, was now inextricably linked to DoT’s dues. D oT appealed against TDSAT’s interim order in the Supreme Court. The Court asked RCom to furnish a corporate guarantee in addition to the pledge of land. It con- currently directed DoT to approve the AccordingtoDoT,RCom’sspectrumdues hadtobepaidorsecuredbybank guaranteeseitherbyRCom(theseller)or RelianceJio(thepurchaser)byfollowing theSpectrumTradingGuidelinesof2015.
  31. 31. Commerce/ GST Revenues FTER one and a half years of GST implemen- tation, policymakers are grappling with two imp- ortant issues. The first is a drop in compliance rate of tax filers and the second is a substan- tial fall in GST revenue collection; both are interconnected to a great extent. Union Minister of State for Finance Shiv Pratap Shukla, in response to a question raised in the Lok Sabha, rec- ently said that the percentage of taxpay- ers who had not filed returns associated with payment of GST has steadily increased from 10.56 percent in Novem- ber 2017 to over 28 percent in Novem- ber 2018. The data further showed that under the composition scheme where traders, manufacturers, and the like pay a nominal tax annually based on turn- over and where the compliance proce- dure is simple, the percentage of non-fil- ers has risen to 25.37 percent in July- September 2018 as against 15.03 perc- ent in the corresponding period of 2017. One of the basic objectives of the introduction of GST was to keep the Inaseeminglyworryingdevelopment,therehasbeenadropincompliancerateandarevenue shortfall.Butgoingbyinternationalexperience,theseissuescouldgetsortedwithintwoyears By Sumit Dutt Majumder Photos: UNI A Where’s the Money, Honey? HEAR US, TOO! Akhil Bharatiya Udyog Vyapar Mandal activists protesting against GST in Lucknow 34 January 21, 2019
  32. 32. compliance burden simple and tax rates moderate, thus ensuring voluntary dis- closure by taxpayers. This was expected to lead to a larger tax base, which in turn was to give the tax buoyancy. How- ever, that has not happened as evident from the data above. L et us first try to understand the issue of missing taxpayers, i.e., taxpayers who have stopped filing tax returns. The obvious reason for the drop in filing returns is non-payment of tax. When GST was hurriedly imple- mented on July 1, 2017, there were many flaws, including GSTN, the IT infra- structure, which was not fully in place and beset with many glitches. One clause stated that inter-state suppliers of goods and services would not be entitled to any threshold exemp- tion. This meant that a supplier of goods and/or services based in Okhla in Delhi would have to pay GST, even if his turn- over was below the threshold, the moment he supplied to a purchaser in Gurgaon in Haryana or Noida in Uttar Pradesh. There was another clause relat- ing to reverse charge mechanism. If a registered taxpayer purchased goods and/or services from an unregistered supplier whose turnover was below the threshold and hence did not need to be registered, the former would be in a soup. Either he would have to pay the GST and file returns on behalf of the unregistered supplier, or ask the latter to get registered even though his turn- over was below the threshold. In order not to lose business, some unregistered suppliers of goods and/or services got themselves registered and paid GST although their turnover was below the threshold. These two clauses coupled with a very low threshold dis- rupted small businesses. This, in turn, led to the closure of many small estab- lishments and consequent unemploy- ment. Realising the far-reaching fallout of going overboard in formalising the in- formal sector of small business, the GST Council relaxed the compliance burden a few months later. First, the clause regarding disentitlement of threshold benefit for inter-state suppliers of serv- ices (not goods) was kept in abeyance. Second, the clause relating to reverse charge mechanism was also kept in abeyance. Consequently, a substantial number of suppliers of goods and servic- es, who had got themselves registered and paid GST in the initial months be- cause of these two clauses, got them- selves unregistered and stopped paying GST and filing returns. It is not clear whether this important aspect has been factored in while deter- mining the percentage drop in compli- ance rate of tax filers. If not, the per- centage drop will have to be recalculat- ed. In either case, one will have to act on the compliance shortfall, whatever may be the number. It is not difficult to identify the traders who were registered but were not filing returns. Thereafter, leaving aside the traders who have stopped pay- ing tax for legitimate reasons as explain- ed above, GST officers can proceed against other registrants who have not been paying tax and filing returns. GST is based on the principle of trusting and facilitating trade, while simultaneously taking stern action against those who are non-compliant. There are elaborate enforcement provi- sions such as search, seizure, arrest, etc, under GST laws. The structure of GST is such that not many officers are now necessary for the basic assessment work as it follows the principle of self-assess- ment. The main responsibility of officers is now in the areas of scrutiny of re- turns, including detection of non-filing, selective audit based on risk factors and collection of intelligence, detection of cases of non-compliance and follow-up enforcement action. In fact, in his written reply to Par- liament, the minister stated: “The Toeasethecomplianceburden,theGST Councilhaslatelytakensome correctivemeasures.Thedecisiontotake outseveralitemsfromthehighest28 percentslabwasonesuchstep. | INDIA LEGAL | January 21, 2019 35

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