India Legal 23 April 2018

NDIA EGALL
` 100
I
www.indialegallive.com
April 23, 2018
NinemonthsaftertheintroductionofGST,howsuccessful
hasIndia’sbigbangtaxreformbeen?Anexpertanalysis
Dilip Bobb on the shame and
horror of Kathua and Unnao atrocities
Ambedkar’s dark
forebodings

HIMRAO AMBEDKAR is once again
the political flavour of the season. As
Dalit agitations flare up across the
nation, highlighting the dilution and
sidestepping of laws aimed at prevent-
ing and punishing atrocities against Scheduled
Castes, parties competing for the 2019 general
election smell the galvanising and shifting of a
vote bank. So leaders, including those from the
ruling BJP, have turned into Ambedkar flag-
wavers in the hope of attracting the faithful to
their side.
While Dalits understand Ambedkar visceral-
ly, because as an “untouchable” who faced
horrendous caste oppression, and then rose
to become the chief architect of free India’s
Constitution—he is in their bones. He is
their messiah as were Martin Luther King and
Nelson Mandela. Their messages were the
same: legal freedom and constitutionalism
mean nothing as long as systematic discrimina-
tion, preserved by habit, religion or custom is
not eradicated.
The withdrawal of the British from India,
Ambedkar believed, did not automatically create
a free nation. Rather, the exit of the British
was an event which would create the conditions
for real freedom. That would be the real chal-
lenge for India’s new leaders: a fresh struggle to
rid this land of institutionalised prejudice, pre-
served as a handy tool by the British to perpetu-
ate their Raj.
No matter how hard the BJP may try to claim
Ambedkar’s legacy, there is no gainsaying that as
chief draftsman of the Constitution, as the real
father of Indian constitutionalism, Ambedkar’s
energies were focused on eliminating the caste
system which had virtually reduced one-sixth of
the nation’s inhabitants to “untouchable” non-
persons. He blamed Hinduism—or the perpetua-
tion of power through the convenient use of
ancient scriptures combined with the mumbo-
jumbo of self-appointed seers—for this situation.
In a sense, he was like Martin Luther, Hul-
drych Zwingli and John Calvin who rebelled
against the Roman Catholic Church and brought
about the Reformation and the Protestants. In
fact, Ambedkar burned the Manusmriti, the
Brahmanical code of social conduct, in public,
and later converted to Buddhism, much to the
chagrin and anger of Vir Savarkar, one of the
founding ideologues of the RSS and the Hindu
Right. But Ambedkar was more than just a rebel
against religion. He was an original political
COMPETITIVE
AMBEDKARISM
Inderjit Badhwar
Letter from the Editor
B
Ambedkarburned
theManusmriti in
public,andlater
convertedto
Buddhism,muchto
thechagrinand
angerofVirSavarkar,
oneofthefounding
ideologuesofthe
RSSandHinduRight.

4 April 23, 2018
thinker whose thoughts have been published by
Columbia University. He was India’s David
Hume, John Locke, Thomas Jefferson and
John Adams.
H
ow many of our leaders who are now
claiming his legacy for political gain
have even read his works (except for
convenient quotes passed on to them by their
Googling spin doctors), or followed his oration,
arguments, and scientific temper in the
Constituent Assembly debates which are the
equivalent of America’s Federalist Papers? There
is a careful weave that knits together all his
thoughts: We will fail as a Republic and will
never become a true nation unless we stamp out
the evil of the caste system and the misery it
perpetuates by classes who claim a Divine
Right to rule.
Ambedkar wrote at one point: “If [the]
Hindu Raj does become a fact, it will, no doubt,
be the greatest calamity for this country. No
matter what the Hindus say, Hinduism is a men-
ace to liberty, equality and fraternity. On that
account it is incompatible with democracy.
Hindu Raj must be prevented at any cost. But is
Pakistan the true remedy against it?”
Also, for those who are stuffing their propa-
ganda chests with Ambedkar allure items in
preparation for the upcoming elections, here’s
another piece of advice from the man himself:
“There are many lower orders in the Hindu soci-
ety whose economic, political and social needs
are the same as those of the majority of the
Muslims, and they would be far more ready to
make a common cause with the Muslims for
achieving common ends than they would with
the high caste of Hindus who have denied and
deprived them of ordinary human rights for cen-
turies. To pursue such a course cannot be called
an adventure. The path along that line is a well
trodden path. Is it not a fact that under the
Montagu-Chelmsford Reforms in most Provin-
ces, if not in all, the Muslims, the Non-Brah-
mins, and the Depressed Classes united together
and worked the reforms as members of one team
from 1920 to 1937? Herein lay the most fruitful
method of achieving communal harmony among
WhileDalitsunderstandAmbedkarviscerally,becauseasan
“untouchable”whofacedcasteoppression,andthenroseto
becomethechiefarchitectoftheConstitution—heisintheir
bones.HeistheirmessiahaswereMartinLutherKing
(below)andNelsonMandela(right)

| INDIA LEGAL | April 23, 2018 5
Hindus and Muslims, and of destroying the dan-
ger of a Hindu Raj. Not partition, but the aboli-
tion of the Muslim League and the formation of
a mixed party of Hindus and Muslims is the only
effective way of burying the ghost of Hindu Raj.”
A
nd here are his views on meat eating:
“The Census Returns show that the meat
of the dead cow forms the chief item of
food consumed by communities which are gener-
ally classified as untouchable communities. No
Hindu community, however low, will touch cow's
flesh. There is no community which is really an
Untouchable community which has not some-
thing to do with the dead cow. Some eat her
flesh, some remove the skin, some manufacture
articles out of her skin and bones.”
Ambedkar remained deeply concerned that
India would not survive as a nation or democracy
unless it tackled the Scheduled Castes’/Sche-
duled Tribes’ oppression head-on through vari-
ous measures, including reservations. Article 17
of the Constitution is brief and blunt:
“‘Untouchability’ is abolished and its practice
in any form is forbidden. The enforcement of any
disability arising out of ‘Untouchability’ shall be
an offence punishable according to law.”
Although Ambedkar favoured extending
reservations in politics and jobs and education
for SCs and STs beyond the prescribed 10 years,
to compensate for the rights denied to them over
centuries, he was opposed to reservations being
so all-encompassing that they would shrink the
pool of open competition and hinder merit. He
favoured, instead, affirmative action and equality
of opportunity for “backward” groups. He urged
that the state machinery and the courts and legal
system should be proactive in discovering, root-
ing out, and punishing any form of discrimina-
tion as spelled out in Articles 15 and 16.
Instead of listening to today’s political propa-
gandists trying to appropriate Ambedkar’s
words, we could do him no higher honour than
to listen to the great man himself.
The accompanying box (on the next spread)
contains excerpts from his last speech delivered
on November 25, 1949, in the Constituent
Assembly on adoption of the Constitution. It is
hope mixed with a terrible foreboding that ignor-
ing the rights granted to the downtrodden could
doom the new Indian experiment.
NomatterhowhardtheBJPmaytrytoclaimAmbedkar’slegacy,aschief
draftsmanoftheConstitution,hisenergieswerefocusedoneliminatingthe
castesystem.HeblamedHinduismforthissituation.
UNI

6 April 23, 2018
I
f we wish to maintain democracy not
merely in form, but also in fact, what
must we do? The first thing in my judg-
ment we must do is to hold fast to consti-
tutional methods of achieving our social
and economic objectives. It means we
must abandon the bloody methods of
revolution. It means that we must aban-
don the method of civil disobedience,
non-cooperation and satyagraha. When
there was no way left for constitutional
methods for achieving economic and
social objectives, there was a great deal
of justification for unconstitutional meth-
ods. But where constitutional methods
are open, there can be no justification for
these unconstitutional methods. These
methods are nothing but the Grammar of
Anarchy and the sooner they are aban-
doned, the better for us.
The second thing we must do is to
observe the caution which John Stuart
Mill has given to all who are interested in
the maintenance of democracy, namely,
not “to lay their liberties at the feet of
even a great man, or to trust him with
power which enables him to subvert their
institutions.” There is nothing wrong in
being grateful to great men who have
rendered life-long services to the country.
But there are limits to gratefulness, As
has been well said by the Irish patriot
Daniel O’Connell, no man can be grateful
at the cost of his honour, no woman can
be grateful at the cost of her chastity and
no nation can be grateful at the cost of
its liberty.
This caution is far more necessary in
the case of India than in the case of any
other country. For in India, Bhakti or what
may be called the path of devotion or
hero-worship, plays a
part in its politics
unequalled in magni-
tude by the part it
plays in the politics of
any other country in
the world.
Bhakti in religion
may be a road to the
salvation of the soul. But
in politics, Bhakti or
hero-worship is a sure
road to degradation and
to eventual dictatorship.
The third thing we must
do is not to be content
with mere political
democracy. We must
make our political democracy a social
democracy as well. Political democracy
cannot last unless there lies at the base
of it social democracy. What does social
democracy mean? It means a way of life
which recognizes liberty, equality and fra-
ternity as the principles of life. These
principles of liberty, equality and fraternity
are not to be treated as separate items in
a trinity. They form a union of trinity in the
sense that to divorce one from the other
is to defeat the very purpose of democra-
cy. Liberty cannot be divorced from
equality, equality cannot be divorced
from liberty. Nor can liberty and equality
be divorced from fraternity. Without
equality, liberty would produce the
supremacy of the few over the many.
[Equality without liberty would kill
individual initiative.] Without fraternity,
liberty would produce the supremacy of
the few over the many. [Equality without
liberty would kill individual initiative.]
Without fraternity, liberty and equality
could not become a natural course of
things. It would require a constable to
enforce them.
We must begin by acknowledging the
fact that there is complete absence of
two things in Indian Society. One of these
is equality. On the social plane, we have
in India a society based on the principle
of graded inequality which means eleva-
tion for some and degradation for others.
On the economic plane, we have a soci-
ety in which there are some who have
immense wealth as against many who
live in abject poverty. On the 26th of
January 1950, we are going to enter into
a life of contradictions. In politics we will
have equality and in social and economic
life we will have inequality. In politics we
will be recognizing the principle of one
man one vote and one vote one value. In
our social and economic life, we shall, by
reason of our social and economic struc-
“Theevilsthatlie
acrossourpath”Ambedkar knew well that unless reservation in jobs and
legislatures was given to the Dalits, they would never be in a
position to be equal partners in the administration of the
country and would remain oppressed and slaves forever.
Excerpts from his speech:
drambedkar.co.in

ture, continue to deny the principle of
one man one value. How long shall we
continue to live this life of contradictions?
How long shall we continue to deny
equality in our social and economic life?
If we continue to deny it for long, we will
do so only by putting our political
democracy in peril. We must remove this
contradiction at the earliest possible
moment or else those who suffer from
inequality will blow up the structure of
political democracy which this Assembly
has to laboriously build up.
The second thing we are wanting in is
recognition of the principle of fraternity.
What does fraternity mean? Fraternity
means a sense of common brotherhood
of all Indians – of Indians being one peo-
ple. It is the principle which gives unity
and solidarity to social life. It is a difficult
thing to achieve. How difficult it is, can
be realized from the story related by
James Bryce in his volume on American
Commonwealth about the United States
of America. The story is–I propose to
recount it in the words of Bryce himself
that “Some years ago the American
Protestant Episcopal Church was occu-
pied at its triennial Convention in revising
its liturgy. It was thought desirable to
introduce among the short sentence
prayers a prayer for the whole people,
and an eminent New England divine pro-
posed the words ‘O’ Lord, bless our
nation'. Accepted one afternoon, on the
spur of the moment, the sentence was
brought up next day for reconsideration,
when so many objections were raised by
the laity to the word nation as importing
too definite a recognition of national
unity, that it was dropped, and instead
there were adopted the words ‘0’ Lord,
bless these United States.”
There was so little solidarity in the
U.S.A. at the time when this incident oc-
curred that the people of America did not
think that they were a nation. If the peo-
ple of the United States could not feel
that they were a nation, how difficult it is
for Indians to think that they are a nation.
I remember the days when politically-
minded Indians resented the expression
“the people of India.” They preferred the
expression the “Indian nation.” I am of
the opinion that in believing that we are a
nation, we are cherishing a great delu-
sion. How can people divided into sever-
al thousands of castes be a nation?
The sooner we realize that we are not
as yet a nation in the social and psycho-
logical sense of the world, the better for
us. For then only we shall realize the
necessity of becoming a nation and seri-
ously think of ways and means of realis-
ing the goal. The realization of this goal
is going to be very difficult—far more dif-
ficult than it has been in the United
States. The United States has no caste
problem. In India there are castes. The
castes are anti-national. In the first place
because they bring about separation in
social life. They are anti-national also
because they generate jealousy and
antipathy between caste and caste. But
we must overcome all these difficulties if
we wish to become a nation in reality.
For fraternity can be a fact only when
there is a nation. Without fraternity, equal-
ity and liberty will be no deeper than
coats of paint. These are my reflections
about the tasks that lie ahead of us. They
may not be very pleas-
ant to some. But there
can be no gainsaying
that political power in
this country has too
long been the monop-
oly of a few and the
many are only beasts of
burden, but also beasts of prey. This
monopoly has not merely deprived them
of their chance of betterment; it has
sapped them of what may be called the
significance of life.
These down-trodden classes are tired
of being governed. They are impatient
to govern themselves. This urge for self-
realization in the down-trodden classes
must not be allowed to devolve into a
class struggle or class war. It would lead
to a division of the House. That would
indeed be a day of disaster. For, as has
been well said by Abraham Lincoln, a
House divided against itself cannot stand
very long. Therefore the sooner room is
made for the realization of their aspira-
tion, the better for the few, the better for
the country, the better for the mainte-
nance of its independence and the
better for the continuance of its demo-
cratic structure.
This can only be done by the estab-
lishment of equality and fraternity in all
spheres of life. That is why I have laid so
much stress on them. I do not wish to
weary the House any further. Indepen-
dence is no doubt a matter of joy. But let
us not forget that this independence has
thrown on us great responsibilities. By
independence, we have lost the excuse
of blaming the British for anything going
wrong. If hereafter things go wrong, we
will have nobody to blame. Except our-
selves. There is great danger of things
going wrong. Times are fast changing.
People including our own are being
moved by new ideologies. They are get-
ting tired of Government by the people.
They are prepared to have Governments
for the people and are indifferent whether
it is Government of the people and by
the people.
If we wish to preserve the Consti-
tution in which we have sought to en-
shrine the principle of Government of the
people, for the people and by the peo-
ple, let us resolve not to be tardy in the
recognition of the evils that lie across our
path and which induce people to prefer
Government for the people to
Government by the people, nor to be
weak in our initiative to remove them.
That is the only way to serve the country.
I know of no better.
ANGER SPILLS OUT
The recent Dalit agitation
against the SC verdict on
the SC/ST Atrocities Act
UNI

ContentsVOLUME XI ISSUE 23
APRIL23,2018
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8 April 23, 2018
India’s Tryst with GST
Nine months into the new goods and services tax regime, a look-back at some of the
implementation blunders that hit small businesses and measures taken to rectify them
LEAD
14
Rape of India
The horrific rapes and murders in
Kathua and Unnao are a reality
check on where Indians, as a
society and community, are heading
FOCUS
18
Red-Faced over Unnao
The Allahabad HC pulled up the
advocate general for his appalling attitude
in the rape case where BJP MLA Kuldeep
Sengar is the accused
20

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Contact:editor@indialegallive.com
Ringside .........................10
Delhi Durbar ...................11
Courts.............................12
National Brief...........35, 41
International....................47
Media Watch ..................50
MYSPACE
STATES
No Bar to Benches
Upendra Baxi says that though the demand for HC benches is often
an emotive issue, there is no law restricting more from coming up
26
Hanged for
their Beliefs
Courts have come out in
support of those who have
been implicated and arrested
for their ideologies and said that
being a member of a banned
organisation is no crime
42
44
As China makes inroads into the Maldives, the world watches nervously at the
growing might of a country which thinks nothing of infringing on others’ territory
Dragon’s Playing Field
GLOBALTRENDS
48Sniff out
Fake News
How do you identify false news? Solid
sources and some healthy scepticism can
go a long way while it’s also wise to seek
out trustworthy news organisations
Cover Design:
ANTHONY LAWRENCE
American Dream in Jeopardy
The H1B route to the US is tougher with the Trump administration’s
stance leading to Indian companies reducing their visa applications
OPINION
36
No Point Asking
Despite government assurance that non-performing assets can
be recovered, at least 70 percent cannot be
COMMERCE
32
LEGALEYE
Promises and Lies
Guarantees from politicians notwithstanding, the demand for a
bench in western Uttar Pradesh has been hanging fire
30
When the Saints Go Marching
A move by Madhya Pradesh Chief Minister Shivraj Singh Chouhan to make five
sadhu babas ministers of state has been challenged in the High Court
38
Survival of the Fittest
Two high courts in the
country have made it
possible for lawyers in
the subordinate judiciary
to be eligible to become
senior advocates
22
Gone Girl
A widow desperately looking for her missing 20-year-old daughter
is forced to approach the apex court due to police inaction
21
COURTS

10 April 23, 2018
“
RINGSIDE
“2018 is an incredibly
important year for elec-
tions. Not just with the
US midterms, but
around the world there
are important elections
—in India, in Brazil, in
Mexico, in Pakistan and
Hungary—that we want
to make sure that we do
everything we can to
protect the integrity of
those elections.”
—Facebook founder and
CEO Mark Zuckerberg
while testifying before
the US Congress
“The Army, Navy or Air
Force make their deci-
sions on what they want,
what combination of
equipment they want... if
an Indian produce type
fits in, then they take it.
But I can’t for a moment
imagine that I will prevail
upon them....”
—Defence Minister
Nirmala Sitharaman at
Defence Expo 2018
“You (Rahul Gandhi)
can’t wake up early and
can’t skip one meal, and
you talk of bringing
change in the country?”
—BJP spokesperson
Sambit Patra, referring
to Congress leaders
eating chhole-bhature on
the day the party obser-
ved a symbolic fast from
10.30 am to 4.30 pm at
Rajghat, New Delhi
“We are devastated and
feel embarrassed in fac-
ing the society because
the media has portrayed
my husband as a rape
accused. My children
are in a state of trauma.”
—Sangeeta Senger, the
wife of BJP MLA Kuldeep
Singh Senger from
Unnao who has been
accused of raping a 17-
year-old girl
“Both the watchdogs (judiciary and
media) have to be vigilant, barking for
saving democracy.... The barking is to
alert the owner and if even the barking is
not yielding...barking dogs will be left
with no option but to bite. Such a situa-
tion is the exception to the old saying
that barking dogs seldom bite.”
—Justice Kurian Joseph, while interacting with students of
the Kerala Media Academy
“The reason behind the
tension is reservation to
SC/ST, which is around
50 percent…. If upper
castes are given benefit
of 25 percent reserva-
tion, the ongoing ten-
sion can be ended….”
—Union Minister of State
for Social Justice and
empowerment Ramdas
Athawale
“Nothing more precious
than life. Winning gold
for the 3rd time is
indeed a proud moment
for all of us but this is
my tribute to those
innocent kids who
have lost their lives in
an accident in
Himachal Pradesh.”
—Wrestler Sushil Kumar
dedicating his Common-
wealth Games gold to the
children who died in a
bus accident in HP

An inside track of
happenings in Lutyens’ Delhi
Delhi
Durbar
Twitter: @indialegalmedia
Website: www.indialegallive.com
Contact: editor@indialegallive.com
In diplomatic terms, it is referred to as a “reset”.
Post-Doklam, relations between the two Asian
giants, China and India, had reached a new nadir.
Now, both sides seem to be striving for a “reset” in
order to ensure that Narendra Modi’s visit to Beijing
in June for bilateral talks is not a flop show—a key
focus of his meeting with President Xi Jinping is to
get Beijing to abandon its objections to India being
in the Nuclear Suppliers Group which provides
access to the latest technology.
A flurry of high-profile visits will take place
before the June meeting. An Indian delegation was
at the Boao Forum for Asia—China’s annual
Davos-type confab. It included Ratan Tata, FICCI
General Secretary Sanjaya Baru and the chief
economist of the Aditya Birla Group, Ajit Ranade.
They will be followed by India’s defence minister
Nirmala Sitharaman and foreign minister Sushma
Swaraj later this month while NITI Aayog vice-chair-
man Rajiv Kumar will also be in Beijing in May as
part of an economic dialogue.
Then, just before the Modi visit, National
Security Adviser Ajit Doval will head there for talks
with China’s vice-foreign minister—the equivalent of
foreign secretary—Kong Xianyou. The two had met
in Delhi earlier this month.
THE CHINA SYNDROME
Finance Minister Arun Jaitley’s medical
condition and the post-operative con-
finement after his kidney transplant will
pose some tricky problems for the Modi
government. The earlier plan was to get
Piyush Goyal to handle the finance min-
istry in addition to the railways portfolio
till Jaitley is fit enough to resume work.
The plan now faces a hurdle with Goyal
and his wife’s alleged links to Shirdi
Industries and other companies becom-
ing a political hot potato with the
Opposition crying foul. Moving him to
finance will only add to the clamour.
The second problem to do with Jaitley’s
medical leave is the media. Jaitley’s
other responsibility apart from finance
and corporate affairs, was managing the
media, an area where he is a seasoned
practitioner—in fact, his nickname in
media circles is Bureau Chief because of
his extensive contacts among media
owners, editors and “influencers”. One
call from him has ended or curtailed
many a journalistic career. No one else in
the BJP has that kind of network and
clout. At a politically pivotal time, that
attribute will be sorely missed.
It’s the David and Goliath syn-
drome. Last week, on a trip to
Bihar, Narendra Modi declared
in public that “in the past week,
over 8.5 lakh toilets have been
constructed in Bihar”. Quick as
a flash, RJD leader and Lalu
Prasad’s heir apparent,
Tejashwi Yadav, tweeted that to
achieve that feat, over 85 toilets
would need to be built every
minute! Fodder for thought.
TAILPIECE
MEDICAL PROBLEMS
In a rare first for India,
all defence attaches
posted in Indian
embassies/high com-
missions abroad were
summoned to Delhi last
week. Their brief, as
enunciated by defence minister
Nirmala Sitharaman at a meeting
with all 44 attaches, was to play a
pro-active role in changing India’s
image as the world’s biggest arms
importer to that of a country
which is a major manufacturer of
military platforms.
The attaches may be based in
44 capitals but are accredited to 95
countries. They were then herded
off to the Defence Expo on the out-
skirts of Chennai to help in selling
the theme: “India: The Emerging
Defence Manufacturing Hub” where
substantial “Made in India” weapon-
ry was on display, from Tejas fighter
jets to BrahMos and Aakash mis-
siles, Arjun tanks and warships
docked in Chennai harbour. For the
defence attaches, it is literally a
wake-up call. So far, foreign diplo-
matic postings for armed forces
personnel has been seen as a
cushy job, with junkets and recep-
tions. Now, as arms salesmen, they
need to polish their act.
ARMS AND
THE MEN

Athree-judge bench of the Supreme Court
headed by the chief justice of India (CJI)
has reiterated that even though the CJI is the
first among equals as a judge, he commands
the “exclusive prerogative” to allocate cases
and form benches as master of the roster.
Justice DY Chandrachud who wrote the ver-
dict has made it clear that “as a repository of
constitutional trust, the CJI is an institution in
himself”. The powers assigned to the CJI are
crucial to the “efficient transaction of the
administrative and judicial work of the
Court,” the bench ruled.
The top court cleared the air while dis-
missing a petition by Ashok Pande, who
while questioning the unilateral powers of the
CJI to decide on the benches and assign
work to them, had pleaded for changes in the
Practice and Procedure rules of the apex
court related to that area.
Seniority of a judge as per appointment
dates has “no bearing on which cases a
judge should hear”, the bench observed. It
also made it clear that there is nothing called
“senior” and “junior” judges in the top court,
while lashing out at the petitioner who sought
to bracket the judges in those categories.
The bench referred to the Supreme Court
Rules, 2013 to support its point of view,
asserting that the petitioner has no locus
standi to “seek a direction that the benches
of the court should be constituted in a partic-
ular manner...”
The judgment also said that apex court
judges are drawn from the high courts and
the Bar and they command wide experience.
To think that a particular judge is more com-
petent would “cast reflection on the compe-
tence and ability of other judges to deal with
cases assigned by the CJI”.
Courts
12 April 23, 2018
—Compiled by India Legal team
The Supreme Court has direct-
ed the Registrar General of the
Karnataka High Court to submit a
report stating whether trial court
records were destroyed in a case
even when the concerned appeal
was pending before the High
Court. A two-judge bench issued
the order to verify the allegation.
It was hearing a Special Leave
Petition (SLP) in which the allega-
tion was made. The SLP was
filed challenging the Karnataka
High Court's judgment that had
found the appellant guilty of rape.
The appellant was earlier acquit-
ted by the trial court.
“CJI is an institution,” says SC
SC wants report on
destroyed records
The panchayat election
process in West
Bengal has been stayed
by the Calcutta High
Court till further orders.
The Court took exception
to the State Election
Commission (SEC) can-
celling its order to post-
pone the filing of nomina-
tions by another day and
then rescinding it citing
legal infirmities. The
SEC’s plea questioning
the maintainability of the
petition from the BJP
against the Commission’s
order, was turned down
by the Court. It wanted to
know whether the SEC
had done anything to
enable people to file their
nominations. The next
hearing is on April 16.
Panchayat election process in
WB stayed by Calcutta HC
Chief Justice of India Dipak Misra
The Women and Child
Development Ministry will
move a cabinet note on April 16
to amend POCSO—the
Protection of Children Against
Sexual Offences Act. “I have
been deeply, deeply disturbed by
the rape case in Kathua and all
the recent rape cases that have
happened on children. I and the
ministry intend to bring an
amendment to the POCSO Act
asking for the death penalty for
rape on children below 12
years,” said Maneka Gandhi the
minister for women and child
development, in a video posted
on YouTube.
Eight-year-old Asifa was kid-
napped on January 10, raped
again and again and killed by a
group whose motive was to drive
her nomadic Bakarwal communi-
ty out of the Rasana area of
Kathua in Jammu. The police
charge-sheet, submitted three
months on, contain horrific
details about how the crime was
perpetrated. Eight have been
arrested.
Jammu and Kashmir Chief
Minister Mehbooba Mufti, too,
has said her gov-
ernment would
bring in a strin-
gent law to
make the death
penalty
mandatory
for rapists
of minors.
Death penalty for
child rapists
soon: Maneka

lection, which, of course, is of para-
mount importance, let us first look at
some fundamental issues. Did the policy
decisions work out well? Were they
properly implemented? Was the tech-
nology support adequate? What was
the impact?
One of the five basic aims of GST
was to substantially reduce, if not totally
eliminate, the cascading of taxes by pro-
T’S been nine months since India
implemented GST. There cannot
be any doubt that the country
needed it. Efforts were on
since 2006 to get this tax regime
implemented. Finally, it was intro-
duced in July 2017. The question now is
how has the GST regime worked since
its launch.
Before coming to GST revenue col-
Lead/ GST So Far...
BoththeGSTCouncilandtaxpayerswillhavetolookatthisnewtaxregimeas“workin
progress”foratleastonemoreyear,andcontinuetotakequickcorrectiveactions
By Sumit Dutt Majumder
viding seamless flow of input tax credit
at each stage of the flow of goods and
services in the supply chain. The second
aim was to cut down the compliance
costs by clubbing together 17 indirect
taxes of the centre and states. These two
targets have been achieved substantially,
except that five petroleum products and
alcohol for human consumption could
not be brought within GST. This broke
I
14 April 23, 2018
Has It Worked?
Anthony Lawrence

of the country’s trade is inter-state and
destination-consumption states, such as
UP, Bihar and Odisha, will have more
revenue from IGST, besides their own
SGST for intra-state trade. Since these
states would get richer in revenue, it is
expected that this extra money
would be spent in development of infra-
structure and power generation, and
thereby attract industries. Thus, in
course of time, all these populous states
would also become industrialised.
Green shoots are expected in two or
three years.
On the issue of technology support,
it was clear from the beginning that for
administering GST, a robust IT infra-
structure would be sine qua non. Thus,
we got GSTN, the IT infrastructure.
The role of GSTN was to facilitate the
administering of certain basic business
processes like registration, payment, fil-
ing of returns and claiming of refunds.
It was also to facilitate invoice upload-
ing and matching of returns/invoices so
as to ensure that the credit taken by the
recipient was actually paid by the sup-
plier. Given the huge responsibility on
GSTN, it was expected that it would
undergo test runs in respect of all the
aforesaid business processes before
implementation. However, the policy-
makers finalised all the business
processes and formats only a few days
before the target date for GST, thus
the credit flow and dented the efforts
to reduce compliance costs in the
supply chain of petroleum products
and alcohol.
The third aim was to reduce logistics
and transportation costs. Under
GST, this was achieved by replacing
Central States Tax (CST) with
Integrated GST (IGST) for inter-state
trade. This resulted in consolidation of
warehouses, abolition of entry tax
(octroi) and sharp reduction in trans-
portation time and cost.
However, there are some dark
clouds. As GST revenues started going
south, both the centre and states decid-
ed to have a system of generation of e-
way bills that would contain particulars
of the goods and transportation. GST
officers have been empowered to stop
trucks, examine the bill and goods any-
where on highways. The scheme was
implemented from April 1, 2018—first
for inter-state movement, and later for
intra-state movement. Trade and indus-
try felt this was a disruption in the free
flow of goods. In fact, instead of random
highway checks, a better option would
be strengthening of the Directorate of
GST Intelligence so that the checks can
be undertaken in specific cases based on
intelligence and risk assessment.
Another step to check evasion of taxes
would be quick finalisation of the
scheme of invoice matching.
The fourth aim was to make India a
common economic market. In the pre-
GST era, state VAT rates differed in dif-
ferent states. This led to distortions in
investment decisions based solely on tax
considerations. Entry tax and mandato-
ry stopping of trucks at inter-state
checkposts, coupled with different state
VAT rates, were ideas contrary to a
common economic market. These
malaises have been remedied in the
GST regime. Therefore, one can now
look at India as “one nation, one com-
modity, one tax”.
The fifth aim that stemmed from the
structure of GST was to have equitable
growth of industry across the country.
While some states were highly industri-
alised, there were others which were
populous and lagged far behind. As
GST is a destination-based consump-
tion tax, in cases of inter-state trade,
the state’s share of GST accrues to the
destination state. Broadly, 40 percent
AsGSTrevenuesstartedgoingsouth,
boththecentreandstatesdecidedto
haveasystemofgenerationofe-way
billsthatwouldcontainparticularsofthe
goodsandtransportation.
GST EFFECT: Businesses feel officers
stopping trucks for checks has led to
disruption in the flow of goods
Tax base (1): 1.05 crore taxpayers
Number of composition dealers (2):
18.7 lakh
Number of taxpayers expected
to file Monthly Returns (GSTR 3B)
[(1)-(2)] = (3): 86.37 lakh
Monthly Returns GSTR 3B filed (4):
59.51 lakh
Number of Non-Filers [(3)-(4)]:
26.86 lakh
Numberofnon-filers
Photos: Anil Shakya

Lead/ GST So Far...
16 April 23, 2018
deferred by two months.
As for policy issues, by and large,
these worked out well except for some
monumental blunders. One was with
regard to small business. First, the
threshold exemption for small business
was the lowest in the world at only `20
lakh. Internationally, the threshold
varies between `80 lakh and `1 crore.
Then, there was a decision that there
would be no threshold exemption for
inter-state trade. It meant that the
moment someone did inter-state supply
like, say, from Okhla in Delhi to
Gurgaon in Haryana, he would forfeit
the benefit of threshold exemption of
`20 lakh, and he would have to pay GST
and all the compliance requirements.
So, many small businesses decided to
stop inter-state trade but in the process,
they lost business in a big way. Their
business shrank for another reason—
leaving very little time for GSTN to
make all the business processes opera-
tional on the day of implementation.
Worse still, full-scale test runs could not
be undertaken for all the operations
before the day of introduction. There
must have been some compelling rea-
sons for the government to stick to the
target date. But, the consequence was
that there were many glitches in the
GSTN system in the first month of
implementation itself. As a stop-gap
measure, some of the processes were
made offline and a new simplified
return, GSTR 3B, was put in place. The
scheme of invoice matching for ensuring
compliance was also postponed. To add
to the woes of small and medium busi-
nesses, the much-publicised services of
GST Suvidha Providers for helping them
in their interaction with GSTN were
also not made available. Thus, the first
taste of GST implementation was
bitter. All these things could have been
avoided if the implementation had been
reverse charge mechanism. Big busi-
nesses were mandated to pay GST and
meet all compliance requirements on
behalf of the unregistered suppliers
(read small business below the thresh-
old). The result—big business stopped
transactions with small suppliers.
Coming soon after demonetisation, this
broke the back of small business. On a
rough estimate, small businesses con-
tribute around 75-80 percent of total
employment in the country.
Now let’s come to GST rates. Leaving
aside the exempted goods, GST has a
four-tier rate structure—5, 12, 18 and 28
percent. Broadly, the rate structure is
based on the principles of “capacity to
pay” and “who uses those goods”—very
poor, poor, common man, rich and
super rich. Besides, most of the items in
the 28 percent slab also suffer a com-
pensation cess—a cess collected by the
centre to compensate states for the rev-
enue loss after implementation of GST.
Most countries, except Australia,
Singapore, Malaysia, and some others,
have more than one GST/VAT rate
(mostly two slabs); France has five slabs.
In a country like India where people are
Oneofthemonumentalblundersof
thenewtaxationsystemhasbeenwith
regardtosmallbusinesses.The
thresholdexemptionforthemwasthe
lowestintheworldatonly`20lakh.
August
September
October
November
December
January
February
July
0
10
20
30
40
50
60
70
80
90
100
Initialhiccups
GST revenue collection
over the last year
In `1,000 crore
INEQUITABLE IMPLEMENTATION
Under the new tax regime, it is the small
businesses that have been hit the hardest

dealers who are required to file returns
every quarter. Thus, the balance of
86.37 lakh tax-payers were required to
file monthly returns. As against this,
only 59.51 lakh filed GSTR 3B returns
for February. This is around 70 percent
of the total expected returns, which me-
ans there are around 30 percent non-
filers. Among them, a good number
would be those who got registered as
per the law on threshold in the beginn-
ing, but came out of GST after the clau-
ses relating to inter-state supply and
reverse charge mechanism were amen-
ded. Leaving them aside, there will be a
substantial number of non-filers who
could be potential tax evaders. There
has also been evasion by way of misutil-
isation of input tax credit, particularly
during the transition period. Therefore,
a more active role for Directorate
General of GST Intelligence and quick
introduction of invoice matching will
have to be considered on top priority to
catch these tax evaders. Surely, intro-
duction of the e-way bill cannot be a
substitute for the measures mentioned
above; it will at best be a clumsy effort.
Notwithstanding the misadventure
of introducing GST in July 2017 at a
time when GSTN was not ready, efforts
by the GST Council to set it right and
rectify wrong policy decisions and
skewed tax rate structure have made
GST move ahead. Both the Council and
taxpayers will have to look at the
progress of GST as “work in progress”
for at least one more year, and continue
to take quick corrective action.
Though there seems a slow-down in
decision-making by the GST Council,
one would expect it to be as active, if
not more, as it was in the months of
September-October last year so that
GST can move forward with alacrity.
—The author is former chairman,
Central Board of Excise
and Customs
at different economic levels, it is appro-
priate to have four slabs. Of course,
there is scope to reduce the slabs to
three after GST settles down next year.
As for the items put in different slabs,
there were many discrepancies. Too
many items were put in higher slabs of
GST, and there was discontent.
In the light of these issues, there
were protests across the country. Small
business was the worst affected. So were
exporters when huge amounts of export
refund claims were blocked because of
the skewed procedure. This compelled
the GST Council to undertake a series of
course corrections.
First, the clause regarding withdraw-
al of exemption in the case of inter-state
supplies which affected small businesses
most was suspended. Also kept in
abeyance was the clause relating to
reverse charge mechanism. These pro-
vided some relief to small business.
Further, relief was provided to the
MSME sector by expanding the scope of
the composition scheme. The upper
limit of eligibility was raised to `1 crore.
Export procedures were also simplified
and certain innovative export facilita-
tion schemes were outlined.
The list of items in different slabs of
GST was also rationalised. Initially,
there were more than 250 items in the
28 percent slab. But by November, 178
items were taken out of this highest slab
and put in lower slabs. Similarly, many
items in the 18 percent and 12 percent
slabs were brought down to the 12 per-
cent and five percent slabs, respectively.
IT glitches, irrational tax structure
and certain policy glitches jointly con-
tributed to giving a bad name to GST in
its initial months of implementation.
However, it is creditable that the GST
Council acknowledged the mistakes and
undertook immediate course correction.
GSTN too got into the act quickly. As of
now, their challenge is to provide a
seamless e-way bill system, finalise the
formats of returns and provide an effec-
tive invoice-matching mechanism.
Finally, let’s come to GST revenue
collection. It is a given that in almost
every country, in the first year of imple-
mentation, GST revenue collection
takes a dip due to various reasons relat-
ed to beginner’s hiccup. Notably, GST
collection was higher in the first three
months of implementation—`93,590
crore, `93,029 crore and `95,132 crore
in July, August and September, respect-
ively. It fell in October and November
to `85,931 crore and `83,716 crore, res-
pectively. Then the collections picked
up a bit in December with `88,929
crore, only to fall in January and Febru-
ary at `86, 318 crore and `85, 174 crore,
respectively.
As for the tax base, 1.05 crore taxpa-
yers have been registered till March 25,
out of which 18.17 lakh are composition
Amongthecoursecorrectionsundertaken
bytheGSTCouncilwassuspensionofthe
clauseregardingwithdrawalofexemption
ininter-statesupplieswhichaffected
smallbusinessesthemost.
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
Australia Canada* Japan Mexico New
Zealand
Turkey Poland UK IndiaGermany
* Provinces in Canada charge additional rates Source: Bloomberg
GlobalGSTratesRate
VATRates

18 April 23, 2018
...More sickening than the actual
crime is the manner in which politi-
cians, policemen and even lawyers have
attempted, openly and brazenly, to
shield the accused. Despite the horrific
and brutal nature of the crime, and the
national outrage it inspired, it was only
after a barrage of criticism that the
prime minister broke his silence with a
statement. The silence of the bigwigs
was as damning as the evidence regard-
ing the perpetrators of the rapes that
have shamed this nation beyond all the
love jihads and lynching of minorities.
Even UN secretary general
Antonio Guterres termed the gangrape
and murder in Kathua as a “horrific”
incident and asked Indian authorities
to ensure that the guilty were brought
to justice.
There is now a madness gripping this
country, fuelled by motivated and man-
ufactured hyper-nationalism, horribly
misplaced Hindu pride, misogyny and
Focus/Column Dilip Bobb/ Unnao and Kathua Atrocities
The Rape of India
This week has been one of the darkest in India’s contemporary history. The nation
has been witness to the shocking, nauseating details of the rape of two girls, one an
eight-year-old child and the other a teenager...
UNI

the perpetual curse of India’s caste
system. That has been reflected in our
politics, where hype and hysteria and
abusive exchanges have become the new
normal. This week’s events should be
cause for national mourning, yet there
are so few tears, so little remorse, and,
chillingly, no repentance or regret on the
part of those sick, twisted minds who
destroyed the life of one and took the
life of another innocent girl. It was, in
the end, not the rape of innocent girls, it
was the rape of India.
If there is any consolation, it is in the
fact that the Supreme Court has agreed,
of its own accord, to take up both the
cases and wants it mentioned in writing
that the lawyers in Kathua, in Jammu,
agitated to prevent the filing of a
chargesheet against the rape accused
and, additionally, that these lawyers
threatened those representing the family
of the eight-year-old who was raped.
The second case is more revealing of
the depths we now occupy. It took place
in Unnao, in India’s most populous
state, and the main accused is a legisla-
tor who belongs to the ruling dispensa-
tion. Just reading the account of how
the teenager was raped, in September
last year by Kuldip Singh Sengar, a pow-
erful upper caste politician, how the
police refused to act, her attempt to
commit suicide outside the house of the
chief minister, and the subsequent death
of her father, tortured in police custody,
is a reality check for those who believe
that ache din are here, that “Beti
Bachao, Beti Padhao” was a commit-
ment, not a slogan, and that saffron-
clothed politicians like Yogi Adityanath
are God’s chosen ones.
This is now the age of hate-mongers.
It is also the age where competitive com-
munalism and the unending patriarchy
of Indian society can provide a cloak of
invincibility to its practitioners. Just
read, if your tears allow you, the details
of the Kathua rape, an act of such per-
versity that it actually took place inside a
temple. There is a police chargesheet
which, even in its stilted, formatted lan-
guage exposes the barbaric and medieval
culture that survives in many parts of
this country. It details how a little child
from a nomadic community had taken
her family’s horses to graze in a nearby
forest and never returned. She was
drugged, taken to a local temple, and
eight men, including local policemen,
raped her repeatedly. One of them even
invited a friend from Meerut, hundreds
of miles away, to take part. The eight-
year-old child was strangled and then hit
over the head till she was dead.
For all those who have remained
silent and indifferent to the rapes, and
what is taking place around us, I have
one request. Look at her photograph.
This is the carefree innocence of a child,
the eyes full of hope and laughter and
the promise of tomorrow. Her father
says she was mischievous but responsi-
ble enough to stay out late in the forest
to ensure every horse and sheep they
owned had reached home. The bigger
tragedy is the communal contours of the
case. The girl was a Muslim, a minority
in Jammu. Immediately after the rape, a
self-appointed Hindu group staged
demonstrations in support of the
rapists, and, predictably, raised nation-
alist slogans and waved the national
flag. That one act shows the impact of
the hate mongering—fuelled by hyper
and TRP-chasing television anchors,
politicians and right-wing activists. The
flag conceals and covers all sins, or so
they believe. It would be difficult to find
a greater level of depravity than to com-
munalise the rape of a child.
There are places and events which
are signposts to the direction we as a
nation and a people are taking. Nellie,
Babri Masjid, Bhopal, the Emergency,
Godhra riots, 26/11, Nirbhaya. They are
reminders of man’s inhumanity to man.
That list now includes Kathua and
Unnao. They hold up a mirror to our
darkest side, as people, and as Indians.
There is much wailing and breast-beat-
ing on social media but very little angst.
Angst refers to a feeling of anxiety or
dread, typically about the human condi-
tion. Now is that time. If the events of
the past week, and the muted reactions,
are any indication, we have lost the
one thing that defines us as a species—
our humanity.
DEATH OF HUMANITY
BJP MLA from Unnao Kuldip Singh
Sengar arrested for the alleged
rape; (facing page) Priyanka
Gandhi at a protest march in Delhi
UNI

Focus/ Allahabad High Court/Unnao Rape Case
20 April 23, 2018
HE Uttar Pradesh govern-
ment’s brazen attempt to
shield BJP’s Unnao legislator
and rape accused Kuldeep
Singh Sengar caused huge
embarrassment to Chief Minister Yogi
Adityanath. The government ended up
with more egg on its face when advocate
general Raghvendra Singh told the Alla-
habad High Court that the accused
won’t be arrested.
Singh told the Bench headed by
Chief Justice Dilip B Bhosale that
Kuldeep Singh will not be arrested
before the completion of formalities pre-
scribed under the CrPC, inviting the
Court’s wrath. “We are constrained to
record the approach and attitude of the
learned Advocate General during the
course of hearing, in contending that no
accused person, including Kuldeep
Singh, can be arrested without the
Investigating Officer following the pro-
cedure prescribed under CrPC and col-
lecting evidence in support of the allega-
tion of rape,” the Court said.
The Bench also took cognizance of
the AG’s refusal to arrest Kuldeep Singh.
Referring to the AG’s statement, the
Bench said: “It is sought to be urged
that the FIR has been registered by the
police against Kuldeep Singh on 12
April 2018 and that the Investigating
Officer after recording statement of wit-
nesses, including the accused and the
prosecutrix under Section 161 CrPC
would proceed, and on credible evi-
dence, the accused may be arrested but
as on date he submits that the accused
Kuldeep Singh would not be arrested on
merely registering of the FIR.”
An angry Bench remarked: “The
approach of the learned Advocate
General is not only appalling but shocks
the conscience of the Court in the back-
drop of the instant case.”
A former law officer said he did not
recall any other advocate general of the
state being rebuked by the Court in
this manner.
This was not the first time that the
AG has drawn the ire of the Court. In
August, he was pulled up by it for being
absent during the “important and seri-
ous” case involving Adityanath. In what
was possibly the first time, the Court
passed a restraining order against the
AG asking him to remain in Allahabad
for the case.
That Singh contradicted his col-
league, additional advocate general
Manish Goel, on a point of law also left
the judges flabbergasted.
Such is the AG’s attitude that even
the SC indicted him and asked him to
appear before it and explain why he had
not been appearing before the High
Court when summoned.
T
Court Rebukes
Advocate General
IrkedovertheUPgovernment’srefusaltoarrestBJPMLAand
rapeaccusedKuldeepSinghSengar,theCourtpulledup
RaghvendraSinghforhisappallingattitude
By Atul Chandra in Lucknow
InAugust,AdvocateGeneralRaghvendra
SinghwaspulledupbytheCourtforbeing
absentduringthe“importantand
serious”caseinvolvingAdityanath.
wikimedia.org

Courts/ Missing Daughter Case
HE phrase, running from
pillar to post, would aptly
describe the ordeal of a
widow from Rohtak in
Haryana who has been
frantically searching for her
daughter. She went missing from a
coaching centre in Kota, Rajasthan, on
July 16, 2016. The girl was an MBBS
aspirant and had been admitted for
coaching classes in preparation for the
AIPMT entrance examination.
The woman, Omi Hooda, initially
registered an FIR in Haryana. The
Haryana police forwarded it to the
Rajasthan police for investigation. With
her daughter remaining untraced, and
her petitions to lower courts having no
effect, Omi approached the Supreme
Court with a habeas corpus petition
(requiring authorities to bring the
person before the court).
The apex court acted with alacrity,
realising that the case was an unusual
one involving a missing girl, a grieving
mother and questions that related to the
Right to Life, a fundamental right.
A bench headed by Chief Justice
Dipak Misra, along with Justice AM
Khanwilkar and Justice DY Chandra-
chud, asked the Ministry of Home
Affairs as well as the Haryana and
Rajasthan governments to respond and
file a status report on the whereabouts
of the girl.
The widow also seeking enforcement
of the Right to Life pleaded in the Court
that the police failed to take any action
in the case. She also recounted the histo-
ry of the case—from filing the first FIR
to a habeas corpus petition placed before
the Rajasthan High Court, which direct-
ed her to move an application before the
trial court of the state. She lamented that
despite all this, her daughter remained
untraceable. She told the Court that she
had approached by the police authorities
of both the states but they were not seri-
ous about investigating the case or trac-
ing her daughter.
The widow also made an alternate
prayer in her petition, saying that if her
daughter is no more, than at least her
body should be found and given to her
for performing the last rites.
Omi also stated in her petition that
representations were also made to the
prime minister and chief ministers of
Haryana and Rajasthan seeking their
intervention in the matter, but nothing
had been done. Left with no choice, the
widow said she had approached the
Supreme Court as a last resort.
Had the apex court not acted and
taken up the case promptly on humani-
tarian grounds, Omi’s missing daughter
would have just been another case of the
poor and downtrodden being denied
justice and police action because of their
humble background.
LEGAL ACTION (Top) The SC took up the
missing girl’s matter on humanitarian
grounds; The case was heard by a bench of
CJI Dipak Misra (above left) and Justices AM
Khanwilkar (centre) and DY Chandrachud
T
Gone GirlAwidowdesperatelylookingforher
20-year-olddaughterisforcedto
approachtheSupremeCourtdueto
policeinactionandapathy
By India Legal Bureau
TheSupremeCourthasaskedthe
ministryofhomeaffairsaswellasthe
HaryanaandRajasthangovernmentsto
respondandfileastatusreportonthe
whereaboutsofthegirl.

Courts/ Senior Advocates’ Designation
22 April 23, 2018
EW directives by the
Supreme Court on the
procedure to designate
advocates as senior advo-
cates, and making even
those in subordinate
courts eligible for this office have been
welcomed. While the Punjab and
Haryana and Kerala High Courts have
issued notifications on the basis of these
guidelines, there is also cynicism over
objectivity in the final selections.
The Supreme Court had, in October
last year, come out with guidelines for
designating senior advocates while
deciding a PIL which had sought to
bring in transparency and overhaul of
the “opaque and discriminatory system”
of designating lawyers as senior advo-
cates. The petition had challenged the
constitutional validity of Sections 16 and
23(5) of the Advocates Act of 1961,
which recognises two classes of advo-
cates—senior advocates and other advo-
cates. Section 16(2) stipulates who may
be designated as a senior advocate.
The idea behind the directives, which
are to be followed by the Supreme
Court and all high courts, was to bring
in transparency in the procedure. Earl-
ier, the process was completed and des-
ignation accorded by the full bench of
the apex court and high courts. How-
ever, this process took place behind
closed doors and left several aspiring
advocates disappointed.
SUBORDINATE JUDICIARY
Advocates practising in district and sub-
ordinate courts had a grouse that they
were not even considered for such a
prestigious designation despite some of
them having a flourishing and long-
standing practice. This, they said, was
discriminatory and unfair.
Recognition, Finally!
BasedonSupremeCourtguidelines,twohighcourtsinthecountryhavemadeitpossiblefor
advocateseveninthesubordinatejudiciarytobeeligibletobecomesenioradvocates
By Vipin Pubby and Naveen Nair
N
Anthony Lawrence

The directive issued by the Punjab and
Haryana High Court says: “Advocate
shall be eligible to be designated as a
Senior Advocate, if he or she is an
Advocate, duly registered with a Bar
Council constituted under the Advocates
Act, 1961 and is ordinarily practicing in
the Punjab and Haryana High Court or
in a court subordinate to it for a period
of not less than 10 years.”
Terminder Singh, who has been prac-
tising in district and session courts for
over two decades, told India Legal: “It is
a good and long-awaited move.” He said
that the long and commendable service
rendered by experienced and efficient
counsel in subordinate judiciary would
now get due recognition.
As per the new guidelines, all mat-
ters relating to the designation of senior
advocates in the Supreme Court and
all high courts shall be dealt with by a
permanent committee to be named the
Committee for Designation of Senior
Advocates. It will be headed by the
Chief Justice of India and consist of two
seniormost judges of the Supreme Court
and the attorney general. They will
nominate another member of the Bar to
be part of the Committee. Similarly, for
high courts, the committee will be head-
ed by the chief justice of that court and
consist of two seniormost judges of the
high court and the advocate general who
will then nominate a member of the Bar
to the Committee.
The Supreme Court had issued a
slew of guidelines, including setting up
of a permanent committee led by the
chief justice of India, to accord senior
designation to lawyers in October last
year. Some high courts like the Kerala
High Court and lately, the Punjab and
Haryana High Court, have issued no-
tifications on the basis of these
guidelines.
PERMANENT SECRETARIAT
Giving the directive, a three-judge
bench headed by Justice Ranjan Gogoi
has said that besides the CJI, the com-
mittee will include a seniormost apex
court or high court judge, as the case
may be. The bench, also comprising
Justices RF Nariman and Navin Sinha,
proposed the setting up of a permanent
secretariat which would collate informa-
tion about a candidate to be considered
for the senior designation.
The committee will consider aspects
such as the number of years put into
practice, judgments in cases where the
lawyer has played a part, pro bono liti-
gation and the test of personality, it
said. The directive also includes a de-
tailed procedure leading to grant of
designation.
After all other criteria are met, the
committee will interview the candidate.
The interview will count for 25 points.
Out of these, 10 points will be awarded
to those with more than 10 years’ stand-
ing at the Bar, and 20 to those with over
20 years’ standing. The legal formula-
tions advanced by the advocate concer-
ned in reported and unreported cases,
pro bono work, and domain expertise
will count for 40 points.
The directive said that the lawyer
concerned will have to undergo a test of
personality in which he will be inter-
viewed. The bench directed that the per-
manent secretariat will put the names of
candidates being considered for senior
designation on the website to invite sug-
gestions of stakeholders. It specifies that
“once cleared by the Committee, the
names will be sent to the Full Court for
approval, which will vote openly. If a
secret ballot is necessary, the views of
the majority will be carried”.
OPAQUE SYSTEM
The Supreme Court had in March last
year referred the PIL to a larger three-
judge bench. It had sought transparency
in and overhauling of the “opaque sys-
tem” of designating lawyers as senior
advocates, terming it discriminatory. It
had also tagged a petition pending in
the High Court challenging the constitu-
tional validity of Sections 16 and 23(5)
of the Advocates Act, 1961, which pro-
vide the statutory basis for designation
of lawyers as senior advocates.
Intervening in arguments, Attorney
General KK Venugopal had told the
Court that the designation of senior
advocates cannot be termed “bad in
Thethree-judgebenchof
(LtoR)JusticesRanjan
Gogoi,RFNarimanandNavin
Sinhaproposedapermanent
secretariattocollateinfor-
mationaboutacandidateto
beconsideredforthe
seniordesignation.
“Rulescanonlydeterminethe
decision-makingprocess.But
ultimately,whatmattersisnot
justtheprocessbutthedecision
itself.Thereisaneedtoensure
thattheultimatedecisionisfair,
objectiveandjudicious.”
—KaleeswaramRaj,
advocateinKochi

Courts/ Senior Advocates’ Designation
24 April 23, 2018
law” and it does not violate Article 14
(equality before law). He had argued
that lawyers should be accorded the des-
ignation of senior advocate on the basis
of merit and not the number of cases
they had won.
Some of the senior lawyers these
writers spoke to were cynical about the
new procedure. They said it involved a
lot of subjectivity and they would like to
hold their comments. “Let’s wait for the
names they select for the designation
after the introduction of the new proce-
dure,” said one of them.
HIGH COURT POWERS
In Kerala, too, doubts were expressed
about the Supreme Court guidelines for
designating senior advocates. A petition
in the Kerala High Court recently said
that as per Section 16 of the Advocates
Act, 1961, such powers cannot be vested
with the High Court and hence, the
rules should be declared ultra vires of
the Act. The petition, filed by two advo-
cates, C Anil Kumar Kallesseril and PM
Manash, called the High Court of Kerala
(Designation of Senior Advocates) Rules
2018 as “void, inoperative and made
beyond the powers of the honourable
High Court of Kerala”.
One condition for a person to be des-
ignated a senior advocate is that the
lawyer must have practised for 10 years
as well as have filed tax returns for the
same period. After the “Committee for
the Designation of Senior Advocates”
goes into all the credentials of the appli-
cant, he would have to be voted for by
two-thirds of the judges present in the
full court. If rejected, the advocate
would not be eligible to apply again for
the next two years.
The main contention of the petition-
ers is that submitting an application for
the designation only amounts to can-
vassing for the post, which is against the
etiquette of the profession. “The practi-
cal result of submitting an application
for designation means ‘I consider myself
senior, please recognise that’, which is
nothing short of canvassing about
one’s merit, ability and honour,’’ says
the petition.
However, not everyone agrees with
the petitioners. “Nobody can be appoint-
ed a senior advocate one fine morning.
There is a norm for it, which was being
followed earlier too. The process has
been streamlined further, which I feel
is good for the profession,’’ Thoufeek
Ahamed, an advocate based in Kochi,
told India Legal. “The rules should also
have more provisions to oversee the con-
duct of lawyers after they are designated
as senior advocates.”
Other advocates feel that the success
of such rules would depend on how
judiciously the judges use them while
making the decision. “Rules can only
determine the decision-making process.
But ultimately, what matters is not just
the process but the decision itself. There
is a need to ensure that the ultimate
decision is fair, objective and judicious,”
said Kaleeswaram Raj, another advo-
cate in Kochi.
He said the institution of a stronger
mechanism is in itself a positive move.
Also, the guidelines saying that income
alone is not the criterion for such desig-
nations are a great improvement from
the previous model, he said.
While the new rules ask for proof of
IT returns for 10 years, it is only a mini-
mum requirement to show that the
lawyer has been active in his profession.
Acommitteewillconsidervarious
aspectsbeforedesignatingsomeonea
senioradvocateandthisincludesthe
numberofyearsputinpractice,
judgmentsofvariouscases,andsoon.
FACILITATING
THE PROCESS
Kerala High
Court
and (below)
Punjab and
Haryana High
Court

enacted. However, this 1976 amend-
ment has not addressed “economic” and
“other disabilities”. Surely, the denial of
access to justice is a major constitution-
al disability, which legal aid and services
may only partly alleviate.
The Supreme Court in 2012 [Brij
Mohan Lal v. Union of India] further
affirmed that “it is the constitutional
duty of the Government to provide the
citizens of the country with such judicial
infrastructure and means of access to
Justice” so that “every person is able to
receive an expeditious, inexpensive, and
fair trial”.
HE Supreme Court, in many
decisions, has upheld a basic
human right of access to
judicial remedies. The
Constitution was itself
amended by the insertion of
a new Directive Principle of State Policy
(Article 39-A) which prescribes that the
“State shall secure that the operation of
legal system promotes justice based on
equal opportunity” and that “opportuni-
ties for securing justice are not denied
to any citizen by economic or other dis-
abilities”. The revision also contained
the provision of legal aid which has been
ThoughthedemandformoreHighCourtbenchesoftenturnsintoanemotionalandpolitical
issue,thereisnolawrestrictingmorefromcomingup
No Constitutional Bar
on More Benches
T
26 April 23, 2018
My Space Upendra Baxi/ Making Justice Accessible
No doubt, that decision related to
judicial appointments in fast track
courts, but the Court explicitly negatives
the argument that “financial limitations
or constraints” may restrict this consti-
tutional and “basic fundamental human
rights”. Most crucial is the accentuation
of the “judicial infrastructure” and
“means of access to justice”, raising two
related questions: Do “access to justice”
rights then include a right to decentrali-
sation of judicial administration? If not,
does the existing policy for High Court
benches violate any adjudicatory policy
regarding access to judicial infrastruc-
PITCHING FOR BENCHES
UP lawyers demanding a western
bench of the Allahabad High
Court, in New Delhi
Anil Shakya

51(2) of the State Reorganization Act,
1956, says further that permanent
benches may be created by a presiden-
tial order after consultation with the
chief justice and the governor of the
new state. In either case, there is no
explicit bar on the creation of new per-
manent benches as this does not violate
the constitutional requirement of a sin-
gle High Court for each state.
Indeed, the Report begins with an
unattributed quote: “A legal system that
works to serve the community is better
than the academic conceptions of a bevy
of Platonic guardians unresponsive to
public needs.” This prefatory quote can
be read in many ways (for example, as a
general argument against platonic
philosopher-kings) but perhaps is best
read in terms of public convenience, ie,
the convenience of the litigating public
and grassroots lawyers.
MATHEMATICAL MODELS
This argument also brings in the judi-
cial process. Here, removal of “conges-
tion” of cases in High Courts is offered
as one of the principal reasons. The
Commission made a similar argument
in recommending an additional bench
in Agra. But would this lead to decon-
gestion or more congestion? Unfortu-
nately, proposals for or against the cre-
ation of benches are generally devoid of
mathematical models of optimal-run
litigation or filing behaviour.
The convenience argument often
considers distance as an enemy of jus-
tice, whereas proximity and localisation
are favoured. Justice closer home rather
than far removed to state capitals is
preferred. Often, the usual complaint is
of high expenditure and some sharp
practices at the Bar. This indicates that
there should be reform of legal profes-
sions, a difficult and parlous enterprise.
The linkage between proximity and
justice is intuitively appealing and very
often urged, even agitated for. Whether
this will lead to a justification for more
benches is a question that needs to be
raised and studied in depth. It is here
that questions about overall efficiency
ture? My opinion in both cases is a
resounding yes.
GEOGRAPHY OF ACCESS
Access to justice is now accepted as a
virtue of lawyering and justicing, but
disagreement persists about the geogra-
phy of access among litigants, lawyers,
and justices and prevents action. The
location of benches often turns into an
emotional, and political, issue and fur-
nishes an alibi for adjudicative and
political inaction. Surely, location deci-
sions can prove irksome as may be seen
in two instances.
Justice Jaswant Singh, in his land-
mark report in the eighties, was able to
depict how lawyers in Uttar Pradesh
were bitterly divided over where to
locate the High Court Circuit Bench in
the western region, but decided that it
should be in Agra. Certain sections of
the Bar in western Uttar Pradesh still
take recourse to a symbolic strike today
over the non-creation of a bench in that
region. In Odisha, while most District
Bar Associations favoured Sambalpur as
the site of the western bench, some
lawyers protested at the exclusion of
Balangir, Rourkela, and Bhawanipatna
and engage in a symbolic strike ever so
often. A stalemate still continues.
The simple procedure for decision in
this regard was clarified by the Union
law minster in a written reply in the Lok
Sabha on April 28, 2016. Any decision
must first obtain the consent of the chief
justice, then the governor of the state,
then, a “complete proposal from the
State Government” is to “provide infra-
structure and meet the expenditure” so
that the matter is finally placed for the
consent of the central government.
NO CONSULTATION
But this procedure betrays no trans-
parency. There may be operative norms
for the Judiciary and the Executive, but
these remain beyond public knowledge
and scrutiny. There is no requirement
that the state or the centre must
appoint a commission and the commis-
sion’s report ought to be seriously con-
sidered and that the reasons for not
accepting the recommendations should
be made public. Nowhere does this pro-
cedure contemplate the formal engage-
ment of the Indian and State Bar
Council or associations of lawyers,
including the organised associations of
the Bar in the concerned state.
The Justice Jaswant Singh
Commission said that the constitutional
position under Article 214, providing
that there shall be a High Court for
each state does not debar the creation
of new benches of High Courts. Section
Thelocationofbenchesoftenturnsinto
anemotional,andpolitical,issueand
furnishesanalibiforadjudicativeand
politicalinaction.Surely,location
decisionscanproveirksome.
ENSURING ACCESS TO ALL
The Madurai bench of the
Madras High Court
twitter.com

My Space / Upendra Baxi/ Making Justice Accessible
28 April 23, 2018
with time and care.
The arguments against proliferation
deserve serious attention, not a knee-
jerk response. No doubt, advocates that
link proximity with justice do, and will,
argue that decentralisation of justice
institutions is a public good and a social
virtue. Cogent ways must be devised to
meet this argument. Perhaps, the day
will never come when there is a High
Court bench for each district in a state.
But this is no argument against the cre-
ation of some benches in larger states.
There is no denying that bar associa-
tions will compete inter se with each
other about location decisions. Bad
blood between fractions of the bar and
even counter-agitations over location
decisions, plus local pride and personal-
ity conflicts are often pre-eminent.
Conflict over location decisions is often
prolonged, bitter and anti-authority.
MANAGING DISSENT
High volatility among lawyers and
sometimes the populace may be a rela-
tively novel phenomenon for the judici-
ary, but it is not for governance institu-
tions or the Executive-Legislature com-
bine. Governance is, in one sense, the
may arise for those regions denied judi-
cial decentralisation.
ANTI-EXPANSION ARGUMENTS
Law reformers and justices themselves
are not unanimous in their views about
additional benches. The Law
Commission of India expressed itself
twice against it (in the 4th and 14th
reports), though it later reversed its
stance (in the18th report). However, the
arguments of the learned justices may
well be classified in terms of judicial
integrity, tradition and proliferation.
The argument of judicial integrity
assumes many forms. Some have to be
stated only to expose their hollowness.
For example, there is the argument that
chief justices’ authority may be weak-
ened or that there would be lack of
“cohesion” and widespread “fragmenta-
tion”. These syndromes occur also where
there are no benches within the state;
and the outcries of fragmentation pre-
sume that it is necessarily a bad thing in
itself, despite Article 39-A and the apex
court’s own decisions! There is further
no evidence that the High Court’s
authority will be weakened.
The arguments based on “tradition”
have initially more persuasion. No doubt
a High Court at a central place acquires
more tradition than the many constitut-
ed benches and these struggle to devel-
op a tradition of their own.
However, this argument should not
overlook the fact that traditions develop
effective management of public dissent.
Cross-sectional volatility is, to put it
another way, the very stuff of democrat-
ic politics.
Indeed, there is no ground for saying
and doing nothing by the paramount
institutions of governance. Deep sensi-
tivity to justified demands is also one
way of governance. The history of pos-
tures towards demands for decentralisa-
tion of justice institutions is one replete
with indifference, non-consultation and
non-decision.
The way ahead ought to be different
and more participative. Ad hoc
approaches ought to yield to a clear
enunciation of access to the administra-
tion of justice. The CJI and High Court
chief justices may, in the first place,
articulate the criteria for formation of
benches which will be discussed with
the Bar and other affected interests.
After that, the Executive and
Legislature should enunciate a clear
national policy of access to justice and
judicial infrastructure. The idea that
there should be peripatetic circuit jus-
tices may also be explored as an alterna-
tive to permanent benches.
Access to courts is too vital a consti-
tutional affair to be left to the whims
and fancies of lawyers and justices, the
Executive and the Legislature.
The time has come after six decades
of the Constitution to have a more
workable and sensible national policy
rather than ad hocism and deafening
silence on actual demands for access
to justice.
—The author is an international
law scholar, an acclaimed teacher and
a well-known writer and he draws on
some materials from his first Sailabala
Pujari memorial lecture at the NLUO,
Cuttack. Sailabala was the first woman
lawyer in western Odisha and led the
long movement for the bench
at Sambalpur
Perhaps,thedaywillnevercomewhen
thereisaHighCourtbenchforeach
districtinastate.However,thisisno
argumentagainstthecreationofsome
benchesinlargerstates.
JUSTICE FOR ALL
Allahabad High Court

In the run-up to the 2017 assembly
election, BJP president Amit Shah had
assured a delegation of law-yers from
Agra that if his party came to power in
UP, it would work towards creation of
the new bench.
In 2014, the JD(U) MP and
spokesperson KC Tyagi appealed to
Union Law Minister Ravi Shankar
Prasad to take measures for setting up
an HC bench in western UP in the
interest of “10 crore people”. “One has to
travel at least 600 km from any western
UP district to reach Allahabad” and the
cost incurred made litigation prohibi-
tive for the poor, he said. Tyagi remind-
ACH time there is a demand
or a promise to set up a sepa-
rate bench of Allahabad High
Court in western Uttar Pra-
desh, lawyers of Allahabad
rise in opposition. The issue
has been hanging fire for more than 60
years, making the creation of a bench
for the region as difficult as the carving
out of a separate state.
A familiar scenario unfolded recently
with western UP lawyers reviving the
demand and their counterparts in Alla-
habad opposing it. In February, approxi-
mately one lakh lawyers of 22 western
UP districts struck work for a week in
support of their demand. When Alla-
habad lawyers responded with a strike
to oppose the demand in April, the
western UP lawyers again launched
a protest.
FALSE PROMISES
Time and again, politicians have fuelled
the hopes of western UP lawyers but
failed to deliver. During a visit to Mee-
rut last year, UP law minister Brijesh
Pathak reportedly said: “We know that
lawyers from western UP have been suf-
fering for many years and have been agi-
tating for long... We assure you that we
will resolve this issue very soon… and I
assure you that we will set up the High
Court bench soon.”
Setting up a permanent bench in the
region was recommended to the centre
by UP’s chief minister, Sampurnanand,
in 1955. The Justice Jaswant Singh
Commission too endorsed this proposal
in 1985. Various governments in the
state and centre backed the suggestion
but did not walk the talk.
Legal Eye/ Benches for High Courts
Despitepromisesbythepoliticalestablishment,thedemandforaseparatebenchin
westernUPhasbeenhangingfireformanyyears
By Atul Chandra in Lucknow
ed Prasad of the support the BJP
extended to the demand when he raised
the issue in the Rajya Sabha.
UP REGIONS
The three-member Justice Jaswant
Singh panel was appointed by the Union
government in 1981 and it recommend-
ed the setting up of a High Court bench
at Agra. If created, the bench would
have catered to the five divisions of
western UP comprising the districts of
Meerut, Bulandshahr, Saharanpur, Gau-
tam Budh Nagar, Ghaziabad, Hapur,
Shamli, Muzaffarnagar, Moradabad,
Rampur, Agra, Firozabad, Mainpuri,
Rampur, Mathura, Aligarh, Etah,
Hathras, and so on.
E
Settingupapermanentbenchinthe
regionwasrecommendedbyUPCM
Sampurnanandin1955.TheJaswant
SinghCommissiontooendorseditin
1985.Butnoactionhasbeentaken.
OPPOSING CHANGE Allahabad High Court
lawyers protesting against the demand of
their counterparts from western UP for a
separate bench
30 April 23, 2018
Walk the Talk
dnaindia.com

one bench at Lucknow itself is difficult
for the chief justice of the high court
and adding another bench will not only
make the running of the court more dif-
ficult but also compromise the sanctity
of the institution. He said the idea of a
separate bench was impractical as “it
won’t help clear backlog”.
Western UP lawyers say that Allaha-
bad lawyers are against the idea of ano-
ther bench as they fear losing out on
their clients and, therefore, their in-
come. “A bench in western UP will
mainly serve the interests of Delhi
lawyers,” Chaturvedi countered.
No bench can be created without the
concurrence of the chief justice of the
High Court concerned and in the case
of Allahabad High Court, a full court
headed by the then chief justice, DY
Chandrachud, had shot down the idea
in 2012, Chaturvedi said.
Oudh Bar Association President
LP Mishra described the opposition to
the bench as unfortunate and against
the interest of litigants. “Litigants’
interest should be given primacy
because there is no logic in forcing
them to travel to Alla-habad via
Lucknow,” Mishra said. He suggested
that till the formation of a western UP
bench, the revenue divisions of Meerut,
Moradabad, Agra, Saharanpur,
Bareilly and Kanpur should be allocat-
ed to the Lucknow bench. Incidentally,
MP has circuit benches at Indore
and Gwalior.
Mishra criticised the central and
state governments for not implement-
ing the Justice Jaswant Singh Commi-
ssion report which “categorically
favoured extension of jurisdiction of the
Lucknow Bench”.
Western UP lawyers argue that there
are other high courts, including the
Lahore High Court, which are closer for
litigants than the one in Allahabad and
the cost of travelling, besides boarding
and lodging, make litigation exorbitant
for the poor. More than 54 percent of
cases in UP are said to be from the
western part of the state.
The Central Action Committee, a
body of western UP lawyers, also argues
that the creation of a separate bench
would reduce the pendency of cases in
Allahabad, where, according to the
National Judicial Data Grid, pendency is
highest in the country. According to
data re-leased in February 2018, pen-
dency in Allahabad High Court stood at
nine lakh cases in 2016-17.
Countering the allegations, the
Allahabad lawyers argue that distance is
no criterion to decide the setting up of a
High Court bench. “You can’t have
another Supreme Court in the south.
Distance is only an excuse,” said IK
Chaturvedi, president of the Allahabad
Bar Association, stressing that his fra-
ternity in Allahabad strongly believes in
one state, one bench. The Constitution,
they argue, allows one Supreme Court
in the country and one high court in
every state.
IMPRACTICAL SUGGESTION?
Calling the demand “politically motivat-
ed”, as it is always raised before elec-
tions, Chaturvedi said that managing
WesternUPlawyersarguethatthere
areotherhighcourtswhichare
closerforlitigantsthantheonein
Allahabadandthecostsinvolvedmake
litigationexorbitantforthepoor.
DIFFERENT PERSPECTIVES: (Clockwise
from far left) Brijesh Pathak, Uttar Pradesh
law minister; IK Chaturvedi, president,
Allahabad Bar Association; KC Tyagi, JD(U)
MP and spokesperson
UNI

Commerce/ Bank NPAs
32 April 23, 2018
F the over `2.41 lakh
crore non-performing
assets (NPA) that public
sector banks had piled up
till September 2017, at
least `1.68 lakh crore, or
70 percent, cannot be recovered, going
by the average recovery rate in such
cases. While banks can legally take
action for recovery, the asset value that
they can now pursue would have shrunk
drastically. These are called impaired
assets. This leaves recovery of personal
possessions such as Vijay Mallya’s King-
fisher Villa in Goa the only other option.
The overall NPA amount of `2.41
lakh crore was a figure admitted by Shiv
Pratap Shukla, minister of state for
finance, in the Rajya Sabha on April 3.
This did not include the amounts looted
by diamond traders Nirav Modi and
Mehul Choksi from Punjab National
Bank (PNB) and was arrived at before
the unravelling of ICICI Bank’s sweet-
heart deal to Videocon and before Axis
Bank’s Shikha Sharma’s position at the
helm was found untenable.
However, the minister insisted that
these loans “continue to be liable for
repayment. Recovery of dues takes place
on an ongoing basis under legal mecha-
nisms, which include, inter alia, the
Securitisation and Reconstruction of
O
Bumbling
Banks
Financial Assets and Enforcement of
Security Interest Act, Debts Recovery
Tribunals and Lok Adalats. Therefore,
write-offs do not benefit borrowers”.
In short, it means that banks retain
the legal option to enforce payment.
Herein lies the catch. According to
reputed corporate lawyer Virender
Ganda, the average recovery rate is 25-
30 percent in cases of NPAs (see box).
Technically, renaming a loan as an NPA
is an accounting procedure to remove a
large sum forwarded as a bad business
decision. By the same logic, the bank’s
assets reduce by that many crores,
which also means that its overall per-
formance plummets as it is not allowed
to accept deposits beyond stated asset
levels and cash reserve ratio amounts
kept with the RBI against deposits.
Ganda said: “While the enforcement
process can continue, restrictions
imposed by the RBI would not allow the
bank to take in fresh deposits, hence
harming its future prospect of other
loan advancements. Loans and their
DespitegovernmentassurancethatNPAscanbe
recovered,atleast70percentremainbeyondreach,
evenwithlegaloptionsavailabletothebanks
By Sujit Bhar
Technically,renamingaloanasanNPAis
anaccountingproceduretoremovea
largesumforwardedasabadbusiness
decision.Bythesamelogic,thebank’s
assetsreducebythatmanycrores.
Anil Shakya

TotalPSUBankNPAs
(as of September 2017)
`2,41,911 crore
interests are a bank’s principal activity.”
Regarding loan recovery, the RBI’s
instruction to banks is simple. It says:
“In the absence of a clear agreement
between the bank and the borrower for
the purpose of appropriation of recover-
ies in NPAs (i.e. towards principal or
interest due), banks should adopt an
accounting principle and exercise the
right of appropriation of recoveries in a
uniform and consistent manner.”
The RBI also states: “Banks are req-
uired to classify non-performing assets
further into three categories based on
the period for which they have remained
non-performing and the realisability of
the dues: Sub-standard Assets, Doubtful
Assets, Loss Assets.”
Of these, the last category (Loss
Assets) is critical. The definition of this
category states: “A loss asset is one
where loss has been identified by the
bank or internal or external auditors or
the RBI inspection but the amount has
not been written off wholly. In other
words, such an asset is considered
uncollectible and of such little value that
its continuance as a bankable asset is
not warranted although there may be
some salvage or recovery value.”
Banks have declared NPAs but have
not revealed how much is due in which
category. In his reply, the minister also
stated that the “RBI has apprised that
borrower-wise credit information is not
available for disclosure under Section
45E of the Reserve Bank of India Act,
1934. Section 45E provides that credit
information submitted by a bank shall
be treated as confidential and not to
be published and otherwise disclosed.”
For publicly traded companies, however,
such information is readily available
UNDER THE SCANNER
(Clockwise from top) A Punjab National Bank
branch in Delhi, ICICI Bank’s Chanda
Kochhar and Axis Bank’s Shikha Sharma
CountrieswithWorst
NPAsintheWorld
(Q2, 2017)
1. Greece 36.37
2. Italy 16.35
3. Portugal 15.52
4. Ireland 11.85
5. India 9.85
Figures in percent
Source: CARE

WhatisanNPA?
According to an RBI circular: “An
asset, including a leased asset,
becomes a non-performing asset
when it ceases to generate income
for the bank.” The circular also
states that a loan or advance
becomes an NPA when:
Interest and/or instalment of princi-
pal remain overdue for a period of
more than 90 days in respect of a
term loan
The account remains “out of
order”—in which generally the out-
standing balance remains continu-
ously in excess of the sanctioned
limit/drawing power for 90 days—in
respect of an Overdraft/Cash Credit
(OD/CC)
Other reasons
34 April 23, 2018
The LoUs were not backed by collateral
and the money advanced was too over-
whelming, considering the merchants’
India-based assets. “Assessing the value
of a diamond in India (where gold is the
standard) is a difficult task,” he said.
“Plus, if the underlying quality of the
asset (diamond) was doubtful, then the
entire exercise was dubious.” Hence, talk
of recovery—even though legally ten-
able—is shooting in the dark.
According to CARE Ratings, in the
second quarter of 2017, India’s NPAs
stood at the fifth spot in the world.
This was behind Greece, Italy, Portugal
and Ireland. India’s NPA ratio is
9.85 percent, which has been cate-
gorised as “very high”. The burden
now falls on the Insolvency and
Bankruptcy Code and the National
Company Law Tribunal to try and lower
these figures through restructuring and
recovery. But the task is easier said
than done.
with a little search.
The basic idea of recovery would be
to make sure that the asset value being
targeted for recovery remains steady. In
the case of an NPA, the first thing to be
hit is the goodwill of the company. This
erodes a large portion of the assets
value. “Bank CEOs, chairpersons and
other head honchos have been treating
all these deposits in their banks as free
money, to be given to whoever suits
their whims and fancies,” Ganda told
India Legal. “In the process, little due
diligence was done to ensure that the
loans advanced were matched by suffi-
cient collateral.”
Referring to the Nirav Modi and
Choksi cases, he said that the asset base
of Gitanjali Gems, for example, was so
low that it deserved little or no loan.
“BankCEOs,chairpersonsandotherhead
honchoshavebeentreatingallthese
depositsintheirbanksasfreemoney,to
begiventowhoeversuitstheirwhims.”
—VirenderGanda,corporatelawyer
MAJOR FRAUDSTERS
(L to R) The erstwhile Kingfisher Airlines’
Vijay Mallya, diamond jewellers Mehul
Choksi and Nirav Modi
Commerce / Bank NPAs

Justice Kurian Joseph has written to
Chief Justice of India Dipak Misra
asking him to establish a bench of
seven seniormost judges to suo motu
take up the matter of the government
sitting on the collegium’s recommen-
dation to elevate a judge and a senior
advocate to the apex court, The col-
legium had decided in February to
recommend senior advocate Indu
Malhotra and Justice KM Joseph,
Chief Justice of Uttarakhand
High Court.
In a strongly worded appeal,
Justice Kurian Joseph said, “It is the
first time in the history of this court
where nothing is known as to what
has happened to a recommendation
after three months.” The “very life and
existence” of the Supreme Court is
under threat and “history will not par-
don us”, if the court doesn’t respond to
the government’s unprecedented act,
the letter said.
Govtsitsonproposals:
KurianJosephtoCJI
Briefs
The government has finally
scrapped its notification on
a ban on sale of animals for
slaughter in livestock markets
and come out with new draft
rules. The rules do away with
the controversial clause on
“restrictions on sale of cattle” so
now cows can be sold in animal
markets even for slaughter
wherever it is legal. The regula-
tion on livestock market under
the May 2017 rules was opposed
by states where beef is not
banned. It made even transport
of cattle more difficult and
caused inconvenience to agricul-
turalists and dairy farmers. It
also resulted in a rise in the
number of cattle that were past
their use as dairy animals.
Govt scraps ban on sale
of cows for slaughter
—Compiled by Sucheta Dasgupta
The legal fraternity will
be eagerly looking for-
ward to the May 1 release
of Arun Shourie's latest,
Anita Gets Bail: What Are
Our Courts Doing? What
Should We Do About
Them? The title refers to
Shourie's personal experi-
ence of the Indian judicial
system when his wife,
Anita, was issued a non-
bailable warrant “for evad-
ing summons never served,
that were ostensibly issued
for having built a house
which she never did, on a
plot that she never owned”.
The book, to be published
by HarperCollins, analyses
whether the judiciary has
lived up to its role. Know-
ing Shourie, and his repu-
tation for being frank and
outspoken, it’s bound to be
critical and controversial.
In recent interviews, he
has taken the view that the
integrity and independence
of the judiciary are under
stress. Shourie's great
strength is his meticulous
research which, according
to the pre-release material,
shows how a judge manip-
ulated facts to let a promi-
nent politician off. What
makes it more relevant is
the current situation where
the judiciary seems to be at
war with itself. Combining
his many avatars—as jour-
nalist/editor, economist,
politician and activist—
Shourie's book will be both
timely and necessary.
Political parties in India are now
exempt from scrutiny of their for-
eign fundings received since 1976. They
can receive political donations not only
from Indians living abroad but also
from foreign companies with Indian
subsidiaries. The Foreign Contribution
(Regulation) Act, 2010, which in its
previous version banned political par-
ties from receiving foreign funding, was
amended recently without debate dur-
ing the passing of the Finance Bill.
Activists have strongly criticised the
smuggling in of this legislation which,
they argue, empowers foreign govern-
ments and entities to take control of
parties. Many believe it was a face-saver
for both the BJP and the Congress,
which were found guilty of accepting
funds from companies owned by
London-listed mining group Vedanta
Resources between 2004 and 2012.
Parties can now get
foreign funding
Soon, Anita Gets Bail
The ministry of women and child dev-
elopment is facing a problem of plen-
ty. While many departments are starving
for funds, the MWCD has been writing to
the NITI Aayog and state governments to
send proposals so it can increase the fund-
ing for various schemes, said Rakesh Sri-
vastava, secretary, MWCD, at a meet host-
ed by NGO Prayas and the Human
Liberty Network. “I would have liked the
annual grants raised from `725 crore to
`7,000 crore, but there are no proposals,”
Srivastava said. The meet discussed prac-
tical difficulties faced by
those running shelters for
juveniles in implemen-
ting the Integrated
Child Protection
Scheme, 2009. One
challenge was the paltry
sum allocated for after-
care—per child `2,000.
MWCD not getting
proposals for funds

Opinion Kris Lakshmikanth/ H-1B Visas
36 April 23, 2018
ThismethodofgoingtotheUSisfull
ofhurdles,andthatincludesthe
Trumpadministration’shardline
stance.ThishasledtotopIndian
firmsreducingtheirvisaapplications
Stephen Yale-Loehr, professor of immi-
gration law practices at Cornell Law
School, said the number of H-1B peti-
tions that received requests for addition-
al evidence last year increased more
than 40 percent over the previous year.
“That trend is likely to continue this
year,” he said.
FitzGerald said a petition will be
rejected if the USCIS deems it to be
incomplete (if they find missing signa-
tures, missing or incorrect filing fee
checks and missing or incorrectly
checked boxes). He said these have
increased the administrative work for IT
firms and lawyers in auditing the check-
list for all H-1B filings. This and the
increase in requests for evidence have
resulted in higher legal fees, which too
discourages Indian companies from fil-
ing too many petitions.
“One should expect the same sort of
H-1B carnage like last year. No matter
how well one responds to the request for
HERE is a lot of news
floating around about H-
1B filings for the fiscal year
beginning January 2019.
Let me clear the mist. The
total ceiling for H-1B visas
for 2019 stands unchanged and is
65,000. In addition, there is a special
quota of 20,000 for any person who has
done his post-graduation in the US.
H-1B filing began on April 2, and
will conclude when the immigration
authority—the US Citizenship and
Immigration Services (USCIS)—deter-
mines that it has received enough appli-
cations to meet the upper limit of
65,000 visas that can be issued in a
year. Last year, the H-1B visa limit was
reached on April 7 (five working days)
and for post-graduates too, it was the
same date.
In 2016, 1,99,000 applications
were received. In fact, this was the
first time when the total applications
T
A Pipe
Dream
fell after 2013. But it went up again in
2017 when the USCIS received
2,36,000 applications.
APPLICATIONS TO FALL
This year, according to many experts,
the number of applications will fall. For
instance, Scott FitzGerald, partner in
US immigration firm Fragomen
Worldwide, said the general consensus
seems to be that filing of H-1B petitions
by Indian IT services companies would
be down this year, “possibly by as much
as 50 percent compared to recent years”.
H-1B visa rejection rates, including
for renewals, have risen markedly.
“OneshouldexpectthesamesortofH-1B
carnagelikelastyear,nomatterhowwell
onerespondstotherequestforevidence
orarguesthecasebeforetheAAO.”
-—CyrusMehta,NewYork-basedlawyer
UNI

India Legal 23 April 2018

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