India Legal 31 December 2016

NDIA EGALL
December 31, 2016 `100
www.indialegallive.com
I STORIES THAT COUNT
TheGatheringStormInsiders fear the tables may be turning as Modi’s 5O-day deadline approaches
Jaya’sTroublingLegalLegacy

MODI’S
EXPERIMENT
WITH TRUTH
INDERJIT BADHWAR
economy of the cash which oxygenates it
and have no back-up ventilators, its lungs
collapse. Rohilkhand—and reports from
most regions of India seem to suggest sim-
ilar distress—is gasping for breath.
The rabi crop sowing season, mostly
wheat, is behind schedule for want of diesel
for irrigation and fertilizer. Rural liquidity,
on which market towns bustle and flourish,
is kaput. Potatoes and tomatoes are rotting
in mandis even as villagers have no cash to
purchase them.
Migrant labor which sent back earnings
to their villages from larger towns are
returning home empty-handed and jobless
and scrounging on the savings of relatives
and older parents. Real estate and land
transactions have collapsed along with con-
sumer spending. Weavers and artisans
are borrowing food because there’s no pay-
day anymore.
Paytm and digital transactions are a
space-age away. Even if one can understand
the idea of a cashless economy as a brilliant
idea, the idea of cashless banks and ATMs
is mind-blowing. The queues are longer.
There are not hours but repeated days of
waiting in lines which spare neither young
nor old, man or woman, beggar or disabled.
And yet, while the anger escalates and
the restiveness mounts… many of these
wretched of the earth bear their suffering
with stoicism even as they grit their teeth
and curse. Increasingly, they are exploding
into anti-Modi sloganeering, but there
are those who, even as they berate their
LETTER FROM THE EDITOR
HAVE just returned from a 600-km
reportorial road trip, accompanied by
a camera crew from India Legal’s sister
concern, APN NEWS, after covering a
part of UP’s Rohilkhand area which
starts unrolling from Delhi’s suburban
Ghaziabad and stretches through Buland-
shahr, Narora, Gunnaur, Sahaswan, Bad-
aun, Bilsi, Bareilly, Moradabad, Rampur…
well, you can see it on the map.
It is a relatively prosperous, mostly far-
ming area crisscrossed by bad roads, mar-
ket towns, wholesale mandis and bustling
Tier-3 cities. They grow everything here.
Sugarcane, maize, rice, wheat, potatoes,
bajra, urad daal, mustard, leafy greens,
cauliflower galore. The small towns trade
feverishly—in commodities, private rural
micro-credit, potato futures, consumer
goods, cloth, machine tools, as well as
human labor which the area’s thousands of
villages export to larger towns to work as
petty vegetable vendors or daily wagers.
I have covered famines and droughts in
Bihar and eastern UP since I was a cub
reporter and I know rural distress when I
see it. I do not exaggerate when I report
today—as I have done for a documentary
for APN—that the government’s demoneti-
zation has virtually drained the economic
bloodline of this region, reducing it to a
grim shadow of its former relatively pros-
perous self.
To change the metaphor: You don’t need
to be an expert or an economist to under-
stand that when you empty a cash-based
I
3INDIA LEGAL December 31, 2016
Even if one can
understand the
idea of a cash-
less economy as
a brilliant idea,
the idea of
cashless banks
and ATMs is
mind-blowing....
There are not
hours but
repeated days of
waiting in lines
which spare
neither young
nor old....

doing the rounds is the forbearance of the
brave Indian jawan standing for days
guarding our borders as against the churl-
ish impatience of those having to stand for
a few hours in bank queues.
On the face of it, this is an inane non-
sequitur. It is like telling a passenger being
crushed to death in an overcrowded bus to
stop complaining because a brave Indian
astronaut is sitting cramped for months in
an ISRO spaceship circling the earth.
Actually, here too, the Modium is the
Message. The NAMO appeal is subliminal:
Since black money funds terror, the com-
mon man at home is also a soldier who
must suffer the same privation at home as
the jawan on the LoC in fighting this com-
mon enemy; to complain is, therefore,
unpatriotic and anti-national.
Forget the political motives or the mac-
ro-economic debate for the moment. This
is pure political theatre at its best, aimed at
testing Modi’s personal strength and his
capability of imposing his writ and will
on the nation. The dialog is sprinkled with
buzzwords like “renunciation,” “faqir” and
“sacrifice”, which have a far greater reso-
nance with ordinary Indians than the
macroeconomic arithmetic of “`15 lakh
crore vs `5 lakh crore” etcetera.
Modi’s is a clarion call for class warfare,
not of the physical kind, but of the psycho-
LETTER FROM THE EDITOR
LETHAL BLOW
APN coverage of
misery in
Rohilkhand, UP
4 December 31, 2016
You don’t need
to be an expert
or an economist
to understand
that when you
empty a
cash-based
economy of the
cash which
oxygenates it
and have
no back-up
ventilators, its
lungs collapse.
abject misery, praise Modi for having taken
a good decision.
Why?
This is an area into which most pundits
have feared to tread. But let me hazard an
analysis. Leading international economists,
among them Bharat Ratna and Nobel
Laureate Amartya Sen, Manmohan Singh,
Swarajya editor R Jagannathan, Paul
Krugman, Prem Shankar Jha and the RSS’s
own Swadeshi ideologue, the venerable
Govindacharya, have condemned Modi’s
move as a disastrous example of self-
defeating economic adventurism. So have
burgeoning posts on social media.
G
overnment spin doctors, in a bait-
and-switch con game, have
changed the goalpost from demon-
etization to digitalization. All may be miss-
ing the point. Modi’s opponents cannot
fight or defeat him politically, nor his pro-
pagandists defend him economically,
because his stake is not party politics or
economic policies but his own personal
religion. It is his own cunning experiment
with his own version of the truth, no matter
how perverse you may find it.
There’s another home truth about the
art of propaganda: The more far-fetched
the lie, the greater its credibility. The same
holds true for analogies. The current one

tish, millions of Indians voluntarily burned
their British-made garments in public bon-
fires: As Modi told a recent audience: “I am
a faqir. I will sling my jhola on my back and
move on…I have nothing to lose.”
The subliminal message is just as you
suffered with Gandhi to get rid of slavery
under White Raj, you are now suffering
with me to get rid of your serfdom to Black
Money Raj. As one wise friend observed:
“He has people believing in not only a bet-
ter tomorrow but a more self-righteous
tomorrow.” The catch: The time-frame
within which the hopes he holds out may be
belied is shorter—that is his risk in his pri-
vate experiment.
So, it’s NOT the economy, stupid! Or
will Modi be proved wrong?
Footnote: There is one crucial difference.
The masses never saw Gandhi seeking
power for himself. His satyagraha was to
empower others.
logical genre in which the worker, standing
endlessly in queue, is relishing a “revenge”
against the fat cat who Modi says stole the
common man’s money and impoverished
him by stashing it into black cash which he
is now being forced to surrender while also
being punished for it.
Many of those in queues will beat their
chests over what they have been reduced to,
yet at the end, repeat “but Modi’s intentions
are good,” out of fear of retaliation. Some
are paid BJP workers instructed to hog the
camera space. Not surprisingly, the most
vociferous pro-Modi voices when you turn
the camera on them are known black-mar-
keters and merchants. Ask the person in
queue whether he sees any of the black
money merchants waiting in the lines and
the universal answer is an emphatic No,
Only The Poor Are Suffering Because The
People With Black Money Were Tipped Off
By Bankers And Politicians And Have
Already Converted Their Loot.
O
f course, there’s an irony! The con-
tradictions are obvious! The suf-
fering is for real. The economists,
Left and Right, predicting long-term eco-
nomic chaos may well be right. But in my
view, all this is inconsequential to Modi’s
theatre. At a political level, it has dramatur-
gical and symbolic perfection that strikes
deeply into the Indian psyche. It is a bril-
liant pre-modernist idiom which even
Guru Golwalkar and the wise men of Nag-
pur could not master.
In Gandhian idiom, Modi, no matter
how colorful his expensive attire, is still the
revolutionary “naked faqir” (Gandhi) who
destroyed the well-clad Churchill. In reli-
gious terms, he is the Buddha-like seeker,
the tyagi who left his wife and family
and suffered terribly to seek the truth to
end Kalyug.
His crusade against the Kalyug of Black
Money resonates with many Indians with
Gandhi’s culture of satyagraha which
involves the masses in a ritual of self-sacri-
fice, a “yagna” as Modi called it, of self-fla-
gellation, a participation in purification to
achieve freedom from oppression. During
the Swadeshi Movement against the Bri- editor@indialegalonline.com
Modi’s crusade
against the Kalyug
of Black Money
resonates with many
Indians with
Gandhi’s culture of
satyagraha which
involves the masses
in a ritual of self-
sacrifice, a “yagna”...
to achieve freedom
from oppression.
Udayshankar

DECEMBER31,2016
Economic Emergency
The focus of the government’s demonetization drive has shifted suddenly—from
fighting black money to leading the nation into a cashless era—plunging it into
troubled times
20
LEAD
This Himalayan kingdom, too, is affected by demonetization which has impacted
trade, tourism and pilgrimages
36Bhutan’s Rocky Road
6 December 31, 2016
As India attempts to go digital and cashless in a hurry, threats of cyber crime haunt
banks, traders, customers and investors
28Cyber Scams
Demonetization has hit the financial system of this state’s border districts.
How will the resulting public fury be contained?
32Bengal’s Powder Keg
Former Union Carbide chairman Warren Anderson escaped the clutches of law for
the Bhopal gas tragedy. But the then collector and SP have been issued summons
38MP Babus in a Fix
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VOLUME. X ISSUE. 8
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Editor (Content & Planning) Sujit Bhar
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Technical Executive Sonu Kumar Sharma
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STATES

A move by the DGCA to cancel the licenses of pilots who feign sickness
has rebounded with pilot unions serving the regulator with a legal notice
Dogfight in the Skies 66
FollowusonFacebook.com/indialegalmedia
andTwitter.com/indialegalmedia
70WHO has dropped the word “counterfeit” and replaced it with “substan-
dard and falsified” for drugs in keeping with public health concerns
What’s in a Name?
Cover Design : ANTHONY LAWRENCE
Cover Photo : GETTY IMAGES
MEDICINE
A judgment in a defamation case involving the kin of the chief justice
and a journalist is set to decide the limits of free speech in Bhutan
51Fight for Freedom
FOCUS
62Repeated infiltrations by terrorists have shown the vulnerability of the
defense forces which need to gird themselves to tackle new realities
India’s Vulnerable Army
The UK government’s exercise to have a public consultation on it has
stirred a hornet’s nest. Even in the UK, this is an emotive and ugly issue
Britain’s Caste Divide
GLOBAL TRENDS
74
It’s not the physician but a burgeoning army of middlemen that hospitals
are pampering. An extract from Dr Kamal Mahawar’s The Ethical Doctor
Reign of the Tout
BOOKS
78
A collection of new vocabulary spawned by cashless, new India
When Cash Became Trash
SATIRE
82With rising instances of verbal and physical intimidation by lawyers,
the Law Commission is now examining the 1961 Advocates Act
54Lawyer, Regulate Thyself
41A new political axis emerges as OBCs, Dalits, Muslims and Patidars
join hands to take on a government that is lurching from stir to stir
BJP Flounders in Gujarat
COURTS
Though the HC has asked the Haryana government to take a call on
the frozen body of Ashutosh Maharaj, a Dera chief, it is clearly reluctant
58Frozen Faith
REGULARS
Responses ...................................................................8
Quote-Unquote ......................................................... 10
Ringside .................................................................... 11
Dilli-Durbar...............................................................12
Courts.........................................................................14
Media Watch............................................................17
National Briefs........................................................... 18
International Briefs......................................................77
Wordly Wise .............................................................. 81
Political parties gear up for the big fight in UP in the face of currency
demonetization, caste polarization and law and order issues
44Polls in Notebandi Times
POLITICS
Her demise notwithstanding, some of the cases filed against
Jayalalithaa over the last 23 years will continue
48Jaya’s Fraught Legacy
LEGAL EYE
SECURITY
AVIATION

8 December 31, 2016
RESONSES
“Cashless Economy is a
Utopian Idea”
The lead story on demonetization— “It is a foolish step... The poor will suffer the most”
—posted on Indialegallive.com and featured in the December 15 issue of India Legal
garnered phenomenal response. It went viral on Facebook and Twitter. Here are some of
the best responses we got:
This is a hasty and a very foolish step without
considering its consequences, especially in the
unorganized sector and for the common people.
We were very much disturbed by the decision of
the PM as it is going to affect the very fabric of
Indian economy which depends on liquid cash.
—Prof PC Narasimha Reddy
The hype about black
money and the black
economy was the cre-
ation of armchair
economists like Arun
Kumar and the
Leftists who were
blaming the elite.
Now that the secular
lobby has been
caught with pants
down, the Leftist
lobby is against
demonetization.
They should understand
that the black economy was good for
money-lenders (who bled poor farmers and
laborers), gamblers, match-fixers, extortionists,
illegal hawala operators, etc. What use is money
in cold storage for the economy except during
elections, anti-establishment agitations like India
Against Corruption, stone-pelting, bomb blasts,
riots etc.
—Ramaj
With about 80 percent transaction in cash, 70
percent population living in villages and with a
large section of them being illiterate, cashless
economy is a utopian idea. Moreover, in many
villages in eastern India and the North-East,
there is little existence of commercial banks.
— Debasish Chatterjee
I consider Professor Arun Kumar a real authority
on black economy. Here also he has analyzed
the issue in a scholarly manner and without
any bias.
—R Singh
I don’t think his analysis is suited for the current
economy or situation. No one can predict this
new model.
—Sivakumar J
With due respect to the author, he seems to be
very affected by demonetization. On a different
note, the background of all the images shows a
lavish place. Who knows where the money came
from to decorate it in such a way?
—Manas Mitra
It doesn’t require Arun Kumar to tell us the
impact of demonetization, but if it can contain
terrorism and Naxalism even by one percent, it’s
worth the pain of standing in queues to get our
own hard-earned money, while those with hoards
of black money watch from cars and laugh at us.
As a citizen, I doubt the intention behind
demonetization. The decision seems to be influ-
enced by politics more than economics. That is
why we see that not one of the politicians,
bureaucrats, actors, top industrialists or even
swamis who are the main holders of black
money being arrested.
Anyway, let us wait till December 31 and see
how honest this idea is. Hope Modi hits at the

root cause. Corruption, lack of transparency,
high taxes, etc, need to be addressed first to
strike at the root.
—Vasanth Reddy
Whatever Arun Kumar said is correct. But he
ignored the major impact of the scheme—
accountability. In case of suspicion, the money
can be traced. The larger fish cannot get away in
the present scenario as they don’t have much of
a choice. One thing that’s needed for the country
now is stringent scrutiny.
—Roop Chand
I agree with Professor Arun Kumar’s views. I
feel there are hidden agendas and it is part of a
long-term plan. There is a method in the
madness/cleverness to favor something. May we
expect a white paper by the government on the
sudden proclamation and viciousness of
painting everyone opposing it? Let it be probed
by a JPC.
—Arun Singh
If you take out 85 percent blood from someone’s
body and then put five percent into it, what will
happen? That person will die. Similarly, when you
take out 85 percent liquidity from the economy
and slowly replace it by five percent, the circula-
tion of income comes down. Your facts are not
clear. The government is not hijacking anyone’s
money. People are allowed to use all the money
they have, only now they will have to check its
use. The government has an eye on everyone
and can differentiate between who is poor and
who is honest.
—Alpesh Rathod
On the day of the demonetization announce-
ment, I had `2.7 lakh cash with me. My average
monthly expense is `0.6 lakh. After depositing all
the money, I have drawn `30,000 so far and
found it sufficient. We are used to holding five to
50 times more cash than we actually need and
transact. The perceived problem of liquidity,
based on money in circulation, will not lead us to
a logical discussion. You cannot reliably estimate
or guess the quantum of liquid cash
— Ranjit Kumar
Please email your letters to:
editor@indialegallive.com
Or write to us at:
India Legal, ENC Network,
A-9, Sector 68, Gautam Buddh
Nagar, Noida (UP) - 201309
—Compiled by Puneet Mishra

There is this concept of
Paytm. Pay To Modi, that’s the
idea behind cashless econo-
my. That a few people should
get maximum benefit from
cash transactions.
—Congress Vice-President Rahul
Gandhi, in The Times of India
10 December 31, 2016
QUOTE-UNQUOTE
We will fight to protect every last American
life. During the campaign I also spent time
with American workers who were laid off
and forced to train the foreign workers
brought in to replace them. We won’t let this
happen anymore.
—US President-elect Donald Trump, on cases like
that of Disney World wherein people were hired on
H-1B visas, speaking to his supporters in Iowa
I salute the people of India for whole-
heartedly participating in this ongoing
yagna against terrorism, corruption and
black money.
—Prime Minister Narendra Modi, on Twitter
People send representatives
to speak, not to sit on dharna
or create any trouble on the
floor. That is D level. Only a
few weeks in a year do
parliaments meet.
—President Pranab Mukherjee,
expressing dismay over the chaos in
parliament, at a function in Delhi
Pakistan is conspiring
to divide India on reli-
gious lines but it will not
succeed…. If it does
not mend its ways, it
will get splintered into
10 pieces and India will
have no role in it.
—Home Minister Rajnath
Singh, at the Martyrs’ Day
function in Kathua district
Congress has only exposed its illiteracy about
the law of the land. They believe that black
money can be turned into legitimate cash just
by depositing it in banks…. It seems that
they subscribe to the Virbhadra Singh
School of taxation.
—BJP spokesperson Meenakshi Lekhi,
in The Times of India
I am no one or in no position to
question someone else’s technique or
faults.... I am not going to sit here and
play sarcastic mind games. I want
to focus on good cricket and that is
exactly what we have done.
—Indian captain Virat Kohli, on England team’s
last batsman James Anderson’s remark that the
Indian captain's technical deficiencies were not on
display because of the docile Indian pitches, in
India Today

“I shall tell you a great secret my friend. Do not wait for
the last judgment, it takes place every day.”
Albert Camus, author, 1913-1960
VERDICT

The stars seem aligned for foreign secre-
tary S Jaishankar to get an extension when
his term ends next month. He was appoint-
ed on January 29, 2015, just two days
before he was due to retire and since then,
has become one of Prime Minister
Narendra Modi’s most trusted officials. He
has played a major role in Modi’s foreign
policy outreach and global agenda and is
also seen as invaluable to National Security
Advisor Ajit Doval. In fact, with foreign min-
ister Sushma Swaraj unwell for most of
2016, it was Jaishankar who dealt with the
PMO. The buzz is that he could even get a
two-year extension till the full term of the
NDA government. His experience and
expertise on China and the US have stood
him in good stead and his views on isolating Pakistan have found favor
with the PMO. The other officer in line for the job is Anil Wadhwa, ambas-
sador in Rome. A dark horse, who is also Modi’s favorite, is Navtej
Sarna, ambassador to the US.
BJP MP Meenakshi Lekhi has
been keeping a low profile in the
demonetization debate raging on
TV. Reason: she fears being
reminded of the manner in which
she had attacked the UPA govern-
ment’s decision in 2014 to with-
draw all currency notes issued
prior to 2005. As BJP
spokesperson then,
Lekhi had rubbished
demonetization as a
“gimmick” which was
“anti-poor”. But
despite keeping off
TV, the feisty MP has
been helping Modi’s
demonetization drive
in her own way. She has been active at
the RSS headquarters in Delhi instruct-
ing sewaks on going cashless. She has
been training them to use smartphones
and apps like Paytm to carry out their
daily transactions. And many vouch
that she is not only an effective com-
municator but also teaches well in the
matra bhasha!
Post the successful kidney transplant surgery of
External Affairs Minister Sushma Swaraj, it is
now clear that the PM will have to undertake a
minor cabinet reshuffle after the Winter Session
to appoint a new foreign minister. Swaraj has
conveyed to the PMO that she could take as
long as six months to fully recover. There are
important foreign policy related issues coming
up, including a visit by Modi to Israel, the first by
an Indian PM. India also has to deal with the
unpredictable nature of a Trump presidency.
Modi is unlikely, sources say, to promote either of
the two ministers of state in the ministry, General
VK Singh and MJ Akbar, and will opt for some-
one he is close to and can trust implicitly.
ReplacingSushma
ForeignAffairs
DELHI DURBAR
Here’s an inside track on
happenings in Lutyen’s Delhi
Tech-savvyLekhi

Senior UP minister Azam
Khan’s apology submit-
ted in the Apex Court over
his comments on the
Bulandshahr gangrape
(UP) was not considered
“unconditional” by the apex
court. Khan was asked to
submit another one in tune
with the Court’s November
17 order.
Khan had gone on
record saying that the
dastardly gangrape was
nothing but a political
conspiracy.
Attorney General Mukul
Rohatgi and senior lawyer
Fali S Nariman, who are
amicus curiaes in the case
were not satisfied with the
apology’s content and told
the Court that it did not go
with its order.
The Court would vali-
date in the next hearing
whether the new apology is
unconditional. It would also
examine whether a person
holding public office could
make disparaging com-
ments on rape and murder
incidents, despite the out-
come of Khan’s case.
The Supreme Court kept up its pres-
sure on the center for constituting a
Lokpal as early as possible. It had dur-
ing an earlier hearing warned that it
would itself form the Lokpal if the gov-
ernment procrastinated further. In a
recent hearing, the Court
asked the center to sub-
mit the report of the par-
liamentary standing com-
mittee that had proposed
changes in the Lokpal and
Lokayuktas Act 2013.
The changes were
necessitated after the Leader
of the Opposition’s post became
infructuous after the 2014 Lok Sabha
poll results.
The LoP was part of the committee
under the Act to select the chairperson
and members of Lokpal. The new
Lokpal bill presented before parlia-
ment, had changed the post to Leader
of the Largest Opposition Party.
The PIL drawing the Court’s atten-
tion to the formation of Lokpal was
filed by the NGO Common Cause.
The Apex Court also wanted to be
apprised by the center as to what
other changes were needed to make
Lokpal workable.
The counsel for the center
informed the Court that the gravity of
the situation was conveyed to highest
echelons of power and reiterated that
the process would be fast-tracked The
matter was to come up for hearing
again on December 14.
Although it did not pass an
order on removal of liquor
vends and signages leading to
liquor shops on national and
state highways, the Supreme
Court expressed serious concern
over accidents caused by drun-
ken driving.
The Court indicated that it
may order closure of such liquor
shops in future. The observation
came while the Apex Court was
hearing a clutch of petitions
seeking amendments to the
excise laws in that regard.
The Court expressed dis-
pleasure over many states failing
to shut down liquor shops on
highways. It pulled up the center
too for neglecting the issue for
almost a decade and crying foul
now. The logic that revenue
coming from the sale of liquor
from such shops outweighed
other concerns did not pass
muster with the Court.
Some states like Puducherry,
Punjab, Haryana and liquor mer-
chants associations tried hard to
plead that there was nothing
amiss with liquor shops along
highways, but failed to convince
the Court. Rather, they were
pulled up for being irresponsible.
SC seeks report on Lokpal
law changes
Azam Khan to file
another apology
Court may ban liquor
vends on highways
COURTS

The controversy over the appointment of
AMU vice-chancellor (VC) Lt Gen
Zameeruddin Shah (retd) remained unresolved
as the Supreme Court decided to take it up
again in January 2017. It will, however, also
hear simultaneously the arguments on whether
AMU is a minority institution, thus slotting both
the petitions together.
Shah’s appointment was challenged by
Syed Abrar Ahmed in the Allahabad High Court
on the ground that all UGC stipulations in this
regard were flouted with impunity. While the
High Court had struck down the plea, this was
later taken up by the apex court.
Ahmed’s counsel pleaded that AMU could
not bypass UGC guidelines, being a central
university. According to the UGC laws, a
VC of a central university must be a dis-
tinguished academician with at least 10
years’ experience as a professor or hold-
ing an equivalent position in an aca-
demic organization.
The counsels for AMU and Shah
countered that AMU had been perceived
as a minority institution over the years
and a renowned Muslim person had
been always been at the helm.
The center, however, stood by the
Supreme Court verdict delivered in
1967, which said that AMU was a cen-
tral university as it was born through an
act of parliament.
SC clubs two AMU pleas for hearing
The Supreme Court pointed out that the
current punishment (two-year jail term,
a fine or both) for causing death due to rash
and negligent driving was too soft a deter-
rent for reckless drivers.
“There has to be a fear of law among
the people…” the Court said. It directed the
center through its counsel Mukul Rohatgi to
look into Section 304A of IPC closely in
terms of a much severe punishment and
respond within 8 weeks. The Court pointed
out frequent deaths and disabilities wrought
by drunk-driving accidents.
Earlier, the Court had rapped the center
for not acting on its order to amend Sec-
tion 304A.
Stringent law on reckless driving
Rulers of princely states got relief from
the Supreme Court, which ruled that
money earned from putting a part of their
palatial properties on rent could not be
taxed by the income tax authorities. The
Court’s observations came during the hear-
ing of a plea of a ruler of the erstwhile prin-
cely state of Kota. He had given out a por-
tion of his Umed Bhawan Palace on rent.
The IT department had kicked off the
process of tax calculations on his income
from rent in 1984. This was despite the
center’s declaration that such properties
could not be included in the income tax
bracket through Section 10 (19A). The
Commissioner of Income Tax and Income
Tax Appellate Tribunal had disapproved
the action of the IT department.
Thereafter the department had
approached Rajasthan High Court, which
upheld the action of the department, rul-
ing that the Kota ruler could not put a por-
tion of his palace on rent and yet claim
tax exemption; that was possible only
when he occupied the entire property.
But the Apex Court ruled that Section
10 (19A) had awarded tax exemption for
the “palace” and it could not be interpreted
differently and even lashed out at the IT
department for its action.
No tax for putting palace on rent

COURTS
Triple talaq is unconstitutional
Even as the Supreme Court is yet to
take a call on the constitutional
validity of triple talaq, the Allahabad
High Court has ruled that the practice
is cruel, discriminatory, against the
constitution and denies rights to
Muslim women. It further added that
personal laws of any community can’t
take precedence over the Constitution.
The Court’s views echoes the
stand taken by the center in the
Supreme Court.
The Court’s observation came
while hearing a petition filed by a cou-
ple from UP who sought protection
from harassment. During the hearing,
the Court came to know that the hus-
band had a previous wife whom he
had divorced through triple talaq.
“Woman cannot remain at the
mercy of a patriarchal set-up….
Triple talaq has been deprecated and
not followed by all sects of Muslim
community…. It impedes and drags
India from becoming a nation,” the
Court said.
—Compiled by Prabir Biswas, Illustrations: UdayShankar
Twist in
divorce law
In a significant ruling on
divorce among Hindus, a full
bench of the Bombay High
Court has said that divorce
decrees awarded under the
Family Court Act could be
contested within 90 days,
as mentioned in the Hindu
Marriage Act 1955. The
previous time-limit under
the Family Courts Act, 1984,
was 30 days.
The verdict lays to rest the
confusion between the two
laws. The High Court had ear-
lier referred the matter to a
larger bench to clear the
confusion.
The verdict will come as a
relief to couples who have
been divorced by family
courts and want to appeal in
higher courts.
Show respect to National anthem
All patrons must stand up as a mark of
respect when the national anthem is
being played in cinema halls, the Supreme
Court ruled. The Court also made it
mandatory for theaters to show the nation-
al flag on screen while the anthem was
being played, before a movie starts.
The Court wanted to inject a feeling of
“committed patriotism and nationalism”
among Indians. It also ruled that neither
should there be commercial exploitation or
dramatisation of the anthem, nor should it
be used for entertainment purposes. And
doors of cinema halls can’t be kept open
until the anthem ends, the Court made it
clear. In later rulings, the Court declined a
request for an order to play the anthem in
courts, gave a relaxation for the disabled
and posted the hearing against its anthem
order to February 14.
Delhi HC clarifies copyright laws
Adivision bench of the Delhi High Court
ruled that Rameshwari Photocopy
Service—accused of copyright infringe-
ment by five international publishers for
photocopying their books as DU course
material —could not be held guilty as it
was done for educational purposes. While
pointing out that it was the “purpose” and
“utility” that mattered, the Court allowed it
to photocopy unlimited text if deemed fit by
the course syllabus. The matter has been
sent back to ascertain whether education
was indeed the purpose.
Five international publishers had earlier
approached the Court alleging that distribu-
tion of “coursepacks” by the shop in Delhi
University was a copyright violation. A
single bench hearing the plea did not
agree. The publishers then approached a
larger bench.

O
pen magazine has opened a can
of worms with its cover story on
demonetization in its November
18 issue. Titled Freedom at Midnight, the
piece, written by PR Ramesh, the maga-
zine’s managing editor known for his
access to the finance ministry, carried the
sensational claim that an anchor at NDTV
was being questioned by Income Tax offi-
cials over the source of funds for his
recent purchase of a house in
Chanakyapuri. Ramesh did not name
anyone but as most of NDTV’s anchors
are female, the list of potential buyers
(if the story is true) is relatively small.
For those unfamiliar with Delhi,
Chanakyapuri is the capital’s pampered
diplomatic enclave where property prices
are stratospheric. There has been much
speculation in media circles about the
anchor’s identity unless, of course, it is a
case of someone high up in the ministry
getting back at NDTV for personal reasons
or as part of official knee-jerk attacks on
independent media.
T
he favorite guessing game, and
not just in media and government
circles, is what will Arnab
Goswami do next? It is now known that
Rahul Shivshankar from News X, who
once worked under Arnab at Times
Now and is pretty much a clone in
terms of anchoring style, will move
back to take the studio chair vacated
by Arnab. The latest buzz is that Arnab
is close to finalizing a deal involving
Rajya Sabha MP Rajeev
Chandrashekar and Rupert Murdoch’s
Star TV. Bangalore-based
Chandrashekar is an entrepreneur
whose company Jupiter Capital owns
and operates media companies includ-
ing Asianet News, Kannada Prabha and
Suvarna News 24X7. He also has radio
stations but he has always wanted a
national media profile and Arnab gives
him that opportunity. A tie-up with Star
TV will offer the perfect troika as Uday
Shankar, Star TV’s CEO, is essentially a
newshound and once headed what is
now TV Today, the television news bou-
quet from the India Today group. Talks
are reportedly on and it is certain that
Arnab will not just be the lead anchor
and CEO of the new channel but also
have some equity in the venture.
Watch this space.
Noise about Arnab
N
ewsX, the channel started by
Peter and Indrani Mukerjea,
could soon see yet another
change of ownership. The news chan-
nel is currently owned by Information
TV (ITV), run by Kartikeya Sharma
(with Rahul Shivshankar as editor).
The acquisition was the third change
of ownership. Peter and Indrani, cur-
rently in police custody, had run into
financial trouble and sold their stake
to Jehangir Pocha and Vinay Chajlani.
Pocha (now deceased) was widely
believed to be a front for Niira Radia (the
Radia tapes clearly suggest as such),
while Chajlani is from the Nai Dunia news-
paper group. ITV had bought them out to
add to its media presence which includes
the Hindi news channel India News. Now,
it appears that Rajat Sharma of India TV is
looking to get into the English news chan-
nel space and is reportedly in talks to buy
a majority stake in NewsX. Sharma is con-
sidered close to the powers-that-be and
his channel is among the more profitable
in the Hindi news space, just behind Aaj
Tak. Both sides are keeping their cards
close to their chests but sources confirm
that talks are on.
I
t’s rare to hear of a
Doordarshan journalist
getting death threats but
that is precisely what has got
the state-owned broadcaster
into a controversial tangle.
The journalist, Satyendra
Murli, started getting death
threats after he addressed a
press conference at the
Press Club of India on
November 24, and declared
that Prime Minister Narendra
Modi’s address to the nation
announcing demonetization
was actually a recorded
message and not live. If true,
that would put a dramatic
new spin on the demonetiza-
tion narrative. Ever since, the
journalist has been inundat-
ed with hate mail and threats
and has also been hauled
up by his bosses and ques-
tioned about his sources and
motives.
Dissenter in DD
The NewsX Saga
Anchor’s Aweigh!
MEDIAWATCH

Justice Jagdish Singh Khehar has been recom-
mended to be the 44th Chief Justice of India.
He will succeed Justice TS Thakur who will demit
office on January 3, 2017. Khehar served as the
chief justice of Uttarakhand High Court and
Karnataka High Court and was the acting Chief
Justice of Punjab and Haryana High Court twice.
When he takes over, he will be the first Sikh to
occupy the important post.
Khehar had presided over the five-judge consti-
tution bench that struck down the controversial
National Judiciary Appointment Commission
(NJAC) Act for the appointment of judges as
unconstitutional.
JS Khehar
is the next CJI
NATIONAL BRIEFS
The income tax authorities have
accused Congress party member
and former chief minister of Punjab,
Captain Amarinder Singh, of giving a
false statement on oath in relation to a
foreign registered trust and properties
abroad. The trust was set up by his son
Raninder Singh. Earlier, Capt Singh was
questioned by the income tax depart-
ment regarding these properties. Capt.
Singh has said that this move is simply
due to political vendetta against him by
finance minister Arun Jaitley. He said
that the matter is now in court and the
income tax department and Enforcement
Directorate have not been able to
substantiate the charges for the
past two years.
Capt Amarinder under I-T lens
Headed by CJI TS Thakur, the
Supreme Court collegiums post-
poned recommending names of
judges to be appointed at the
Supreme Court till the new CJI joins
office on January 4, 2017. Seven
vacancies would arise following
Thakur’s retirement next month. After
January 3, the collegiums would
comprise the new CJI JS Khehar,
Justice Dipak Misra, Justice Jasti
Chelameswar, Justice Ranjan Gogoi
and Justice Madan B Lokur.
News of internal grouse
is doing the rounds with
Justice Chelameswar not
attending any meetings
since September after
complaining of lack of prop-
er framework for discussion
and recording of views by
members who are in the
zone of consideration for
being recommended
for appointment as
SC judges.
Seven vacancies to be filled after CJI joins
Former Indian Air Force chief, Air Chief
Marshal SP Tyagi (retired), and two
other key accused have been arrested for
criminal conspiracy and illegal gratification
charges by the CBI in the 2005-06 VVIP
chopper deal scam. Tyagi’s cousin Sanjeev
(Julie) Tyagi and lawyer Gautam Khaitan
are the two others in custody. Tyagi is
accused of tweaking technical require-
ments of the tender for copters to swing
the deal in favor of Finmeccanica sub-
sidiary Agusta Westland. This is the first
time that a former armed forces chief has
been held for corruption
Former IAF chief arrested
in VVIP chopper scam

The CBI has filed a
chargesheet against
former telecom minister
Dayanidhi Maran, his brother
Kalanithi Maran and others for
allegedly setting up an illegal
BSNL phone exchange at the
former’s residence. The others
named in the chargesheet are
the former minister's then per-
sonal secretary and two BSNL
chief general managers (now
retired). The CBI, which
alleges a loss of `1.78 crore
to the exchequer, has invoked
provisions under the Indian
Penal Code and the
Prevention of Corruption Act.
CBI chargesheets Dayanidhi Maran
Recently, law minister Ravi Shankar Prasad
insisted that the government has no inten-
tion of interfering with judicial appointments.
He said this on December 7, in response to a
question ont “Agenda Aaj Tak” as to why elect-
ed governments want control over the judiciary.
Prasad cited Dr BR Ambedkar’s remarks dur-
ing one of the Constituent Assembly debates
saying that they did not wish the power to
appoint judges to remain with one single hand.
The judiciary and the government have not
been able to agree, so far, on the details of the
memorandum of procedure to appoint judges.
West Bengal BJP leader
Manish Sharma has been
arrested by Special Task Force
(STF) and `2,000 notes worth
`33 lakhs were seized from him.
The STF also took several sus-
pected members of the coal
mafia into custody. Before
Bengal went to polls, the then-
state president of the BJP
minority cell, Shakeel Ansari,
had alleged that Sharma was
being fielded from Raniganj
because of his strong financial
power. In another incident, a
BJP youth leader from Salem
was arrested with bundles of
`2,000 notes worth `20.55 lakh.
Licencse of noted lawyer Indira
Jaisingh’s NGO Lawyers
Collective has been permanently
cancelled for alleged Foreign
Contribution (Regulation) Act viola-
tions. The Home Ministry’s order
claimed they had received foreign
funds between 2006-07 and 2013-
14 when Jaisingh was the
Additional Solicitor General of India.
In a statement issued by the NGO,
it termed the order as “preposter-
ous” and further said “strangely
enough, the order is passed on a
Sunday, when government offices
are closed”.
—Compiled by Sucheta Dasgupta, Nayantara Roy and Usha Rani Das
Minister assures “no interference”
BJP leaders held in West Bengal with cash
Indira Jaising NGO’s
license cancelled
Chief Election
Commissioner Nasim
Zaidi wants the law to be
amended to make
distribution of money
among voters by candi-
dates, their agents and
supporters, a cognizable
offense so that offenders
can be arrested without
bail. He also wants the
prison sentence
enhanced from six
months to two years. The
changes can be made via
an ordinance as there is
shortage of time, he has
suggested. He also pro-
poses that “paid news”
be made an offense
under the Representation
of the People Act, and the
punishment for filing of
false affidavits be
enhanced from six
months to two years.
EC pitches for amendment

F
ROM fighting the scourge of
black money to heralding a
brave new cashless digital era,
the government’s demonetiza-
tion drive has seen several
sharp twists and turns. As
many as 50 new announce-
ments have punctuated the one month since
the `500 and `1,000 currency notes ceased
to be legal tender from November 9.
The rash of revisions and counter-revi-
sions pertaining to the defunct currency and
the terms of returning it is seen by many
within the government as a manifestation of
the abysmal lack of planning that went into
the exercise. The aftershocks of India’s finan-
From fighting black money to leading
the nation into a cashless era, the
government’s demonetization drive
has taken a sharp turn, plunging the
nation into troubled times
By Ajith Pillai
LEAD/DEMONETIZATION/IMPACT
Anil Shakya
ThePlot
Unravels

zation could help fight black money. But we
thought the entire plan must have been
thought through. Now we know it was not.”
KEPT IN THE DARK
In fact, there is a buzz within the bureau-
cracy that perhaps even Union Finance
Minister Arun Jaitley was kept in the dark
till the very last minute. This speculation has
gained a degree of legitimacy after West
Bengal Finance Minister Amit Mitra revea-
led to TV host Karan Thapar in an interview
on December 8 that a senior cabinet minis-
ter had told him how the entire cabinet was
kept out of the loop.
Said Mitra: “I must confess that
cial 9/11 continue to shake the nation as it
enters the second month of disruption with-
out a pause.
The confusion within the government
was best explained to India Legal by a fin-
ance ministry official. “None of us knew any-
thing about what was coming. We first heard
of it on November 8 when the PM made the
announcement. I don’t think even at the sec-
retary level, people knew about it. The entire
decision-making process was bypassed. One
understands that demonetization was not
discussed in the cabinet or at the Cabinet
Committee on Economic Affairs (CCEA). We
were simply shocked, although many of us
wondered at the outset as to how demoneti-
If GDP declines by 2
percent, as predicted by
Dr Manmohan Singh, it
translates into a loss of
around `3 lakh crore. If it
goes down by 3.2 per
cent, as suggested by oth-
ers, then the loss would be
about `4.75 lakh crore.
Demonetization could
take away 4 lakh jobs in
the next one year. Sectors
where jobs will be affected
include e-commerce,
luxury goods stores, shop-
ping malls, textiles and
garments industry, tourism,
hospitality business and
aviation.
Employment opportu-
nity in the unorganized
sector, which accounts for
over 90 percent of India’s
work force, is fast drying
up. Those affected are
in the agriculture sector,
fisheries, construction
work, manufacturing and
services.
Several hawkers and
those plying trade have
seen a sharp drop in busi-
ness. Many have had to
return to their villages.
Several sectors are
bracing for a downturn in
business, including small-
scale industries, leather,
automobiles, real estate,
diamonds and gems,
cement, steel, consumer
durables, FMGC and the
retail business.
The rural economy is
reeling under the shock of
notebandi. Farmers are
finding it difficult to sell
their produce at mandis
because of the cash
crunch. Organizing funds
for inputs like fertilizer has
become very difficult.
Demonetization’s
downside
GAME OF PATIENCE
Waiting for hours in
queues to get `2,000, only
to return empty-handed on
many occasions, added to
the frustration of people

a Union cabinet minister said to me that
they (the entire cabinet) were taken to a
room and they thought the PM would speak
to them. But that did not happen. Instead,
they saw the Prime Minister on the TV scr-
een making the announcement to the entire
nation. They heard about it (demonetiza-
tion) like all of us—at the very same time.”
When asked about the identity of the
minister, Mitra said he was referring to a
“very senior member of the cabinet” and that
he had met him at a GST Council meeting in
Delhi in the first week of December.
The inference drawn by many was that the
minister in question could be none other
than Jaitley.
A day after Mitra’s disclosure, a Reuters
report surfaced throwing light on the man
behind the demonetization drive. He was
identified as Union revenue secretary Has-
mukh Adhia. A 1981 batch IAS officer, he
was principal secretary to Narendra Modi
from 2003-2006 when the latter was Guja-
rat chief minister. Adhia, a gold medalist
from IIM-Bangalore and a PhD in Yoga from
Swami Vivekanand Yoga University, Ban-
galore, enjoys the trust of the prime minister.
Adhia took over as revenue secretary in
September last year and officially reported to
the finance minister. But for all practical
purposes, he worked under the PM. He and
five others, sworn to secrecy, and a team of
researchers operated out of 7 Race Course
Road. They comprised the team that plann-
ed the demonetization exercise and included
data crunchers and those associated with
Narendra Modi’s social media campaign in
the 2014 general elections.
According to sources, the group zeroed in
on demonetization for the following reasons:
(a) it would root out black money by render-
ing undeclared income in high denomina-
tion notes invalid and unusable; (b) ensure
ECONOMY IN
REVERSE GEAR
(Clockwise from above) Lack of
work and demand was visible
everywhere, from daily labor to
jewelry showrooms. People
skipped their offices or
household duties to stand in
queues for cash
Photos: UNI

liquidity in banks reeling under Non-Per-
forming Assets amounting to over `6.30
lakh crore; (c) it would derail the election
plans of opposition parties and immobilize a
big chunk of their funds in two key poll-
bound states—UP and Punjab.
D-DAY ADVANCED
The original plan was to explode the “D-
Bomb” on November 18, a Friday. It was felt
that this would give a breather to banks to
swing into action over the weekend. How-
ever, the date was advanced to November 8
because of fears that the news may be leaked
to the media and would enable black money
hoarders to convert their loot to white.
Much of the groundwork for the “surgical
strike” was done by Adhia’s team. Data on
time taken to print and distribute new notes
was collated. Notes were prepared on the
after-effects of demonetization and how it
would impact various sectors and how banks
would benefit from a sudden inflow of funds.
Everything was factored in except one cru-
cial aspect—the overwhelming dependence
of the ordinary citizen on the `500 rupee in
day-to-day financial transactions.
A former bureaucrat in the know told
India Legal: “The calculations were made
rather haphazardly. I believe that if the plan
had been discussed in the finance ministry,
the glaring loopholes would have been point-
ed out. Similarly, had the CCEA been taken
into confidence, it would have raised several
objections and pointed out the pitfalls. But
that did not happen. I understand that even
the RBI was informed about the intro-
duction of new notes but very few people in
the central bank were aware of the enor-
mity, suddenness and scale of the demoneti-
zation exercise.”
In retrospect, the black money math was
rather simplistic. It was initially assumed
that of the `15.44 lakh crore of high denom-
ination notes in circulation, not more than
`8-9 lakh crore would be returned to the
banks. The unreturned (about `5 lakh crore)
money would constitute the black compo-
nent in circulation that could be declared
neutralized. This is the money that the gov-
ernment hoped it could leverage for develop-
ment work and to kick-start the economy.
NARRATIVE CHANGES
However, it became clear within a fortnight
of demonetization that no significant amo-
unt of black money has been neutralized. It
became evident by the volume of deposits in
banks that much of the money in circulation
would be returned. So the black money van-
quished through demonetization would not
be big enough to trumpet about and score
political brownie points.
Union revenue
secretary
Hasmukh Adhia
(above) and a
team of
researchers,
data crunchers
and those
associated with
Narendra
Modi’s social
media
campaign
planned the
demonetization
exercise.

The narrative had to be changed. By
November 20, the punchline was no longer a
“war on black money”. It had changed to a
“march towards a cashless economy”. The
prime minister’s speeches suddenly became
less focused on black money, although he
continued to berate those who opposed note-
bandi as belonging to the corrupt class.
Meanwhile, a month into demonetiza-
tion, only 30 percent of the money that had
been declared illegal was replaced with legal
tender by the RBI. The result: a severe cash
crunch that hit practically every strata of
society, more so the poor. Queues at banks
and ATMs have shown no signs of shrinking
and news that it would take at least six
months for normalcy to return spread panic.
People began to hoard acceptable curr-
ency at home and became austere in their
spending—an unwelcome sign for a growing
economy.
Even the IT raids on black money publi-
cized in the media were due to established
methods of detection and not thanks to
demonetization. What’s worse, in many of
the raids, the black money unearthed was in
the new `2,000 notes or its counterfeits. So
the introduction of new currency did not
deter fraudsters.
Frustration soon began to rear its head.
V Ranganathan, a former IIM professor who
initially backed the demonetization drive,
had this to say: “I now feel like kicking my-
self. I was among the first to welcome the
initiative on November 9. I thought the PM
and his team had all the logistics worked out
and the plan would roll out in an acceptable
manner. Today I feel like an idiot. And the
unfortunate part is the man on the ground
thinks that the rich guy is getting screwed so
it is worth paying for. The poor sucker does
not know that it’s people like him from the
lower strata who are getting screwed.”
Slowly but surely, the tide began to turn.
A Huffington Post-Business World-C Voter
survey on December 8 across India sho-
wed that sentiment was swinging against the
demonetization drive in both rural and
urban India. While people were highly sup-
portive of the government in the first two
weeks, the continuing cash crunch and
the prolonged disruption of their lives was
testing their patience. However, they still
were with the BJP given the disarray in the
opposition.
ECONOMIC EMERGENCY
The paucity of cash in banks imposed a rece-
ssion and an undeclared economic emer-
gency in the country. The farming commu-
nity is in dire distress with cooperative banks
On November 10, two days after demone-
tization was announced, a new entrant
to the payments bank sector was incorporat-
ed. The outfit, Jio Payments Bank Ltd (JPBL),
is a joint venture of Reliance Industries Ltd
and State Bank of India. The company
has received initial approval from the RBI to
operate.
The fact that Reliance Jio has tied up with
SBI, the largest PSU bank, is considered sig-
nificant. Many industry sources say that the
Jiojoinsthepack
SENSING
OPPORTUNITY
Chairman and
Managing Director
of RIL, Mukesh
Ambani with Prime
Minister Narendra
Modi. RIL has
seized the chance
to launch Jio
payments, in a
joint venture
with SBI
UNI

cashless and non-functional, several small-
scale sector units have had to shut shop and
the unorganized sector is in total disarray.
Industrial production has plummeted and
daily wage earners have no source of employ-
ment. There is chaos all around.
In fact, one question that looms large in
many minds is this: If the objective of demo-
netization was not fighting black money but
to only transform India into a cashless and
digital economy, then was it worth all this
pain and suffering?
The government has not been forthcom-
ing in providing answers. Instead, cabinet
ministers and party spokespersons have
been spreading Modi’s gospel of a cashless
society across the country. Typically, Comm-
erce Minister Nirmala Sitharaman described
demonetization a digital detergent that
would clean the economy. “This large, bold
and historic initiative was taken by the
Prime Minister keeping in mind the long-
term economic future of India,” she said.
Power minister Piyush Goyal described
demonetization as “innovative disruption”
while dismissing the criticism of two Nobel
Laureates—Amartya Sen and Paul Krugman
—as views of people who “either do not
understand the Indian psyche” or are “seized
by Modi-phobia”.
Professor Amartya Sen had described the
government’s demonetization move as a
“despotic action that has struck at the root of
economy based on trust”. And Krugman
pointed out that demonetization “seems like
a highly disruptive way to deal with the
problem of illicit hordes of cash, though it is
not clear what significant long terms gains
will come of it”.
HUGE TASK
So, what does one make of the march to-
wards a cashless economy? Like the fight
against black money, it too is a laudable
objective. But a shift from cash to a digital
economy cannot be achieved overnight. It
will take a lot of doing for a 120-crore plus
population to embrace a new system of
transaction when close to 90 percent retail
transactions are currently in cash. In fact, it
could take several years even if the commit-
tee set up under Niti Ayog’s chief executive
officer Amitabh Kant takes on the task of
“making India a cashless economy on a war
footing”.
The following factors point to the enor-
mity of the task ahead:
In the US which has been encouraging dig-
ital spending for decades, the cash compo-
nent has only been increasing. A report in
The New Yorker magazine in April
newly incorporated company may be the
largest beneficiary of the government’s
cashless drive given the nationwide net-
work of the SBI.
According to details submitted to the
Registrar of Companies, JPBL has seven
directors on its board, including SBI’s
deputy managing director (Corporate
Strategy and New Business) Manju
Agarwal. No date has been fixed for the
formal launch of the bank but its entry is
expected to be a game-changer and a big
plus for the Reliance group.
Nobel laureate
Professor Amartya Sen
described the
government’s
demonetization move
as a “despotic action
that has struck at the
root of economy
based on trust”.
Paul Krugman, also a
Nobel laureate, calls
demonetization “a
highly disruptive way”
to deal with the
problem of illicit
hordes of cash, and
doubts its long-
term gains.

IL
quotes official figures and notes that in the
last two decades, US currency in circulation
has more than tripled to about $1.4 trillion,
mostly in $100 bills. Given this, can India
turn cashless overnight?
The Indian spin that we are better poised
to go digital since the number of internet
users in India is higher than in the US is mis-
leading. Figures quoted in the website
Indiaspend note that with 34.2 crore inter-
net users, we may have overtaken the US but
this impressive figure only represents 27-28
percent of our population. This means that
73 percent Indians have no internet access.
Also, of the total 34.2 crore net users in the
country, only 13 percent are in rural India.
India may have 102 crore mobile sub-
scribers but only 17 percent adults have
smart phones which can download apps.
So the task of turning India digital is stu-
pendous.
Even the spread of banks is such that of the
1.38 lakh branches, only 47,000 are in rural
India. The spread of ATMs is also skewed
with 90 percent in 16 states and a sizeable
number in urban centers.
A huge majority of the unlettered popula-
tion do not trust banks and find it inconven-
ient to operate accounts. One estimate is that
80 percent of the population for all practical
purposes are unbanked.
The push towards a digital economy will
increase cyber crime which India is not
equipped to handle (see accompanying
story).
The digital push will, no doubt, boost the
business of existing and newly formed (see
box) electronic financial payment compa-
nies. Many of them have already begun
reporting a huge spurt in business since
demonetization and have begun to heavily
advertise their services in the media. But
could the drive towards a cashless economy
have been achieved without the pain of note-
bandi? Economic commentator and editor,
TN Ninan puts it rather succinctly: “These
objectives (establishing a digital economy
and introducing tax reforms) could have
been done independent of notebandi, which,
at this stage, looks like a bad idea, badly exe-
cuted on the basis of some half-baked
notions.”
CLUELESS
COMMONERS
Cart pullers in
Delhi waiting for
work in the
aftermath of
demonetization
Anil Shakya

A
S cash is in short supply post
demonetization, you use your
credit/debit cards wherever you
can. It is nice to carry plastic
money. But watch out for what
can happen. As you type in the details of
your card while shopping online, beware. As
you store passwords in your diary, beware.
You love technology as it makes your life eas-
ier, but beware of the hacker who is on the
prowl in another part of the world watching
every digital move you make.
Online payments are going to open up
lucrative opportunities for cyber criminals
who will trick you into divulging sensitive
banking information before you figure out
that you have been tricked.
With a large illiterate population forced
to use credit and debit cards or even mobile
phones to transact business, the danger is
real. There are millions of new Jan Dhan
accounts, mostly held by those who cannot
comprehend what cyber crime can do to
their hard-earned money. And this is one of
the biggest threats that India will face as
there is an almost maniacal hurry to go digi-
tal without having constructed firewalls to
protect people.
SPOOFING BANKS
This was evident when news came in recent-
ly that malicious phishing websites had been
created by cyber criminals that could spoof
26 Indian banks and in the process, steal
your banking information and siphon off
your money. These include top banks like
HDFC Bank, ICICI Bank, IDBI Bank and
State Bank of India. Think of smaller banks.
Digital
DangersAs India attempts to go digital and
cashless in a hurry, threats of cyber
crime haunt banks, traders,
customers and investors
By Ramesh Menon
LEAD/DEMONETIZATION/CYBER CRIME

from your spoofed online banking page.
Once criminals have this data, a page will
pop up announcing that there has been an
error and you should therefore try after some
time. This often happens in online transac-
tions. When you log in later, you could well
find that you have been robbed off your cash.
Here is another alarming incident that
should indicate what lies ahead. Cobalt, a
group of hackers, recently targeted ATMs
across Europe making them dispense huge
amounts of cash using malicious software.
Such realities should make India realize that
while going digital might be a great idea, it
should not do it in a hurry without creating
the necessary safeguards.
Just a few weeks back, major banks in
India like SBI, HDFC Bank, ICICI Bank,
Axis Bank and YES Bank blocked over 3.2
Think of cooperative banks in villages.
FireEye, a cyber security firm from the
US, discovered a new domain called csecure-
pay.com that was registered a couple of
months ago which served fake logins from
the 26 banks. This should worry millions of
India. In its report, “2017 Security
Landscape-Asia Pacific Edition”, FireEye
claimed that ATMs, particularly in underde-
veloped countries, were vulnerable as they
continued to use old software which could
easily be broken into by cyber criminals.
When you unsuspectingly navigate to the
URL to get to your bank, you are gently
taken to a page which looks like the one your
bank has. You are requested to enter the
bank account number, pin, mobile number,
email address and other details. As you do
this, malicious software copies crucial data
Illustrations: Anthony Lawrence
Saudi Arabia’s aviation
agency was attacked last
month by an aggressive
computer virus intended to
disrupt high-profile govern-
ment targets, officials and
experts said. The attack
reportedly emanated from
outside the country, and
used a version of Sha-
moon, malware used to tar-
get the Saudi energy sector
four years ago. The Saudi
government confirmed the
latest breaches, reports
The New York Times.
Cyberattacksstrike
SaudiArabia

million debit cards that were compromised
by cyber criminals. It was one of the biggest
breaches in the financial sector in India.
There is reason to fear.
SUPREME COURT MOVE
As there has been a huge surge of cyber
crime, the Supreme Court recently asked the
center if it was contemplating setting up
exclusive cells to probe such crimes. It
was shocked at the circulation of rape videos
on social media by criminals. With the
government failing to come up with an
answer, a bench of Justices Madan B Lokur
and UU Lalit pointed out that no action
had been taken in the last one year
though the government had said it was
working on it. The Court had taken suo
motu cognizance of the growing number
of cyber crimes in the country after Prajwala,
a Hyderabad-based NGO, had written to the
Chief Justice of India about numerous rape
videos being circulated
through WhatsApp. It had
directed the CBI to investi-
gate all the cases.
After numerous banks
worldwide were cheated by
cyber criminals, the
Reserve Bank of India ear-
lier this year asked banks
to step up the vigil against
cyber crimes and work out
a security policy. Banks
should also have a system
to exchange information
with other banks and
develop a quick response
system to deal with
increasing cyber crime,
financial fraud and data
theft.
The RBI missive came
after a heist in a
Bangladeshi bank early
this year when cyber thie-
ves issued instructions to transfer $951 mil-
lion out of a Bangladesh bank’s account at
the New York Federal Reserve. Fortunately,
most of them were declined. But an amount
of $81 million was transferred to a bank
in the Philippines. It was never found. It
naturally shook up the international ban-
king community.
While numerous small Indian entrepre-
neurs are quickly trying to switch to digital
technology to manage payments, it has
opened a new window of opportunity for
cyber criminals. We have seen how they
can swiftly and effectively operate fraudulent
monetary transfers and do counterfeiting
of credit and debit cards. India with its
huge population will definitely be on their
radar. It will be easier for them as India
will have more mobile phones than most
other countries.
Firms that have anything to do with
financial services will now have to
build robust cyber risk management
programs to achieve invincible security.
They have no option but to do this as soon
as they can. Cyber thieves have already
demonstrated how dangerous they can be.
You might just be their next victim. IL
In its report, “2017 Security Landscape-Asia Pacific
Edition”, FireEye claimed that ATMs, particularly in
underdeveloped countries, were vulnerable as
they used old software.
LEAD/DEMONETIZATION/CYBER CRIME

T
HE traditional salesman’s
pitch goes like this: The
world runs on that one
salesman selling some-
thing somewhere. When
that stops, the world stops.
In the north-eastern dis-
tricts of West Bengal, namely South
Dinajpur, Nadia, Malda, 24 Parganas
(North) and others, something like this has
happened following Prime Minister
Narendra Modi’s announcement of banning
Waiting to
Explode `500 and `1,000 currency notes on
November 8. The entire economy of the area
virtually vanished into thin air. Nobody was
selling, no one was buying.
Sure the entire nation is reeling under a
terrible cash crunch—as it should when 86
percent of the currency in circulation is
sucked out through a hastily formulated and
poorly implemented policy change—but
these districts near the Bangladesh border
now exist in a virtual vacuum.
The economy of these districts of farmers
THE CASH CRASH
People queue up at a
bank in Barasat, North
24 Parganas
Note crunch in the
wake of demonetization
has hit the economy in
the border districts of
West Bengal. How will
the resulting public fury
be contained?
By Sujit Bhar
LEAD/DEMONETIZATION/ECONOMY

rests on a few “verticals”. Farming is possibly
the only legal one—mangoes from Malda
were once the much awaited summer delica-
cy of all of Bengal, a leading export item that
has seen a massive dip in the recent past.
Malda and its adjoining districts pro-
duced five lakh tons of the fruit per year,
almost five percent of the national output.
But an advisory from India’s Agricultural &
Processed Food Products Export
Development Authority (APEDA) earlier
this year said that the Ministry of Climate
Change & Environment of the UAE was
alarmed at the high level of pesticide found
in fruits and vegetables imported from India.
This effectively shut out the mango export
market to the UAE, where almost 70 percent
of Indian mangoes used to be shipped. This
was the second blow after eastern European
countries banned such exports for similar
reasons last year, before revoking the ban
later. By then, Indian mango exports had
dipped from 63,500 tons in 2011-12 to
43,000 tons in 2014-15.
The other “verticals” exist in the shadows.
They are: human trafficking into India; cat-
tle smuggling out of India; the growing, pro-
cessing and sale of heroin, and the huge
“cash” inflow to fund terrorist sleeper cells.
The National Investigation Agency (NIA)
has found this area to have the maximum
number of such sleeper cells in the country.
How have such criminal activities sur-
vived and even thrived in these areas? The
reason has been a lack of political will, some-
thing that has denied the requirement to
form the required logistics of checks and bal-
ances for long.
It started as simple vote bank politics.
These have been the areas where infiltration
from Bangladesh has been rampant, the bor-
der being extremely porous. Unofficial esti-
mates put this at over 650 people per day.
The interesting part is that many of those
who walked in from across the border would
be immediately welcomed by political par-
ties—the Left Front during its rule and the
Trinamool Congress (TMC) thereafter—who
not only provided them official identity
papers, such as Aadhaar Cards, voter IDs,
etc., but also turned a blind eye when some
even got to “buy” land, according to a senior
police officer. Of course, these land deals are
fake, too, because there isn’t any land left in
those areas to sell promptly to one who was
a “foreigner” maybe a week before.
Therein lies the catch. Much of the esti-
mated `400 crore Fake Indian Currency
Much of the estimated `400 crore FICN in
circulation in India sloshes around in the
border districts because this is the main
point through which it enters the country.
SITTING ON A VOLCANO
Scenes from the Kaliachak
riots that shook Malda on
January 3
Youtube

hundreds of cattle are driven across the bor-
der, with the BSF unable to open fire because
of “friendly neighbor” restrictions. This has
come down with the center’s stringent cow
protection policy, hitting the Bangladesh
beef industry hard.
It had been estimated that about two mil-
lion heads of cattle used to be smuggled out
each year, amounting to a staggering $600
million-a-year underground “trade”.
This “black” economy had a large FICN
component, too. Much of this money would
slip through the system’s loopholes to the
terrorist sleeper cells. The rest went to
unsuspecting farmers, villagers, tribesmen
and others. With banks few and far between,
such activity flourished unhindered and
uncontrolled.
Black wealth was generated, siphoned off
by the criminally minded within political
parties and not till they reached the banks
(which was rare) did they face any real hur-
dle. People went about their “work”, growing
poppy on paddy fields, acting as “mules” to
freshly-minted FICN that had just arrived
from across the border, earning a decent
“commission”, and sometimes, delving in a
bit of agriculture and also politics.
It has been estimated that in these dis-
Notes (FICN) in circulation in India sloshes
around in this region, simply because this is
the main transit point for almost
all FICN that enters the country (printed
illegally in Pakistan and those printed
illegally in Bangladesh). Much of all
such illegal transactions happen in FICN,
mostly unknown to the dealers in these cur-
rency notes.
This is true for the reverse traffic that
happens across the border, too: that of illegal
cattle smuggling. In the dark of the night
Mamata Banerjee
is seeking
opportunity in
demonetization
which could
plunge the state
in a deep crisis.
With large parts of
the state waiting
to explode, she
has much to
worry about.
PARTY ON!
Government doles to
“registered” pujas
to appease Trinamool
workers have dried up
UNI
UNI
LEAD/DEMONETIZATION/ECONOMY

IL
The economy of
the border
districts has
been reduced to a
vacuum with `500
and `1,000 legal
tenders being
banned. Fake
currency that had
entered even
villagers’ homes is
now useless.
tricts, quite like in the rest of India, over 80
percent of all transactions were in cash. But,
unlike the rest of India, nearly 40-45 percent
of those cash transactions were in FICN.
And `500 and `1,000 currency notes formed
most of it. The situation post demonetization
is critical.
Here are some of the possible scenarios:
1. Scenario today: Poppy growers had
clashed with the police in the Kaliachak
area of Malda on January 3 this year.
Initial communal flare-up reports were dis-
missed by the intelligence bureau, as well as
by chief minister Mamata Banerjee, and
rightly so, because it was later found that the
police had accompanied some excise officials
and destroyed a large portion of the poppy
crop. This was a no-no as per an unwritten
agreement between the lawkeepers and the
poppy growing mafioso. The mafia, there-
fore, wanted to teach the police a lesson.
Akhil Bharat Hindu Mahasabha leader
Kamlesh Tiwari had, on December 3 last
year, allegedly insulted the Prophet
Muhammad at a Lucknow rally, and this
was used by the mafioso to draw in commu-
nal sentiments.
Future scenario: This time, the mafioso
crops will not sell. There is no money. And
there is little that the law enforcement
machinery can do to contain public (read
mafioso) fury if it erupts.
2. Scenario today: Cattle smuggling yielded
a huge “black” surplus within the local socie-
ty, and a large portion of that slipped quietly
into illegal cartels, as well as into some
undisclosed political coffers. It was enough
to fund social “peace” and stem
disquiet that was festering in an employ-
ment vacuum.
Future scenario: This social “security
bank” and political funding bank has disap-
peared. Quite like in the cities, where the
“syndicates” siphoned money out of real
estate ventures and where the ruling TMC
doled cash for locality pujas, a lot of this
money was redistributed to realize the polit-
ical ambitions of the rulers. A huge law and
order chaos looms on the horizon. Also,
there being a ban on legal cattle exports, a
huge inventory will build up in the region,
needing tending to and controlling.
3. Current scenario: FICN has, through the
years, entered the farmer’s homes, into his
small savings in cash, his insurance against
rainy days and for small seed, fertilizer and
pesticide purchases, his medical bills. This
went hunky dory for so long.
Future scenario: Now, when the farmer
goes to revive his Jan Dhan Yojana account
and deposit those currency notes, he will be
in for a shock when the banks declare them
as FICN. There is absolutely no social safety
net to help the farmers survive this tragedy.
The region is waiting to explode, and no
fire tenders are in sight. Mamata Banerjee
has a lot to worry about as she sets her sights
on New Delhi.
20%
80%
46%
Cash transactions 80%
Fake currency
transactions 46% (of 80%)
Transaction
by banks 20%
NoCurrency!
The economy of Bengal’s border districts today
WITHERING BUSINESS
Pesticides robbed Malda mangoes of their biggest
market, the UAE, where almost 70 percent of the
Indian produce would be shipped

This Himalayan kingdom too is facing a
cash crunch which has affected trade,
tourism and pilgrimages to India
By Ramesh Menon in Thimpu
RockyRoadAhead
B
HUTAN, India’s neighbor, is
clearly feeling the pinch of
demonetization. A serious cash
crunch has already affected
border trade. India is Bhutan’s
largest trading partner and a free trade
regime exists between both the countries.
Indian currency is legal tender in Bhutan
and this Himalayan kingdom is a major re-
cipient of Indian aid and gets around `5,490
crore annually. India also exports electricity,
cement, iron dolomite, gypsum, ferro-alloys
and oranges to Bhutan.
Demonetization has affected farmers in
Phuentsholing, a town bordering India, and
LEAD/DEMONETIZATION/BHUTAN
they are struggling to sell potato and car-
damom stocks to Indian traders who are fin-
ding it difficult to make cash payments. Af-
ter demonetization, cardamom prices fell
from 900 Ngultrums a kg to 700 Ngultrums
(one Ngultrum is equivalent to an Indian
rupee). The unofficial exchange value of
`100 has now become about 130 Ngulturms
in the black market. There have been re-
ports of border villages in Assam now using
Bhutanese currency so that trade does not
come to a standstill. They fervently hope
that in the next few months, they will be
able to cash the Ngultrums in return for
Indian currency.
TRADING PARTNER
Sources told India Legal that India should
have made some alternative arrangements
to send in new currency notes to Bhutan as
it is a major trading partner and is wholly
dependent on India. Prime Minister Naren-
DIFFICULT DAYS
Shops in Paro,
Bhutan. The cash
crunch has seriously
affected business
Ramesh Menon

dra Modi has always stressed on his “Neigh-
borhood First” policy and said that ties with
neighboring countries would be his first pri-
ority and this would be the cornerstone of
India’s foreign policy.
The Bhutanese Central Bank has directed
banks to freeze withdrawals of Ngultrums by
Bhutanese individuals and companies in ex-
change for demonetized Indian currency of
`1,000 and `500.
Marketing advisor Bhim Raj Gurung of
the Food Corporation of Bhutan said that
demonetization of Indian currency has badly
impacted both the Bhutanese farmers and
the Corporation.
Potato exports from Bhutan to India have
also been seriously hit. According to reports,
there are more than 1,000 metric tons of po-
tatoes waiting to be sold. Hit by the cash
crunch, Indian traders have not been able to
buy it. Many farmers grow only potatoes as
they have been accustomed to deal with this
cash crop. The prices of potatoes have drop-
ped from 50 Ngultrums to 23 Ngultrums
due to the cash crisis.
Also, a substantial amount of business
between Bhutan and India was earlier main-
ly through the barter system. But in recent
times, many small traders come in and do
business using cash. They have now been
seriously affected. Shopkeepers in Thimpu
say that their cash flows have considerably
reduced as they depend a lot on Indian
tourists who have stopped coming. Sanjeev
Mehta, an economics professor at the Royal
Thimpu College, feels that if the tourism and
real estate sectors are hit due to demonetiza-
tion, the GDR rate would dip in Bhutan.
NO PILGRIMS’ PROGRESS
Demonetization has also affected pilgrim-
ages to India. At this time of the year, many
Bhutanese usually go on a pilgrimage to
India as the harvesting season is over. They
usually visit Buddhist monasteries in
Sikkim, Varanasi, Bodhgaya, Kushinagar
and Sarnath. They are now desperately ask-
ing Indian tourists to give them rupees as
they are unable to garner enough funds for
their pilgrimage. Sonam Tshering, who
works with the Bhutan Broadcasting
Service, was requesting every Indian he met
for some Indian currency as his parents were
scheduled to go to Bodhgaya in mid-
December. With great difficulty, he managed
to get `10,000, but it was not enough for a
fortnight-long visit to India and back.
Dechen Zam, a receptionist at Namgay
Heritage Hotel here, said: “I have persuaded
my parents to cancel their pilgrimage to
India as I have not been able to gather
enough Indian currency for them."
The Royal Monetary Authority (RMA) of
Bhutan, the country’s Central Bank, used to
earlier issue `15,000 per person every month
before demonetization changed the rules. It
reduced it to `10,000 per person per month
and then to `5,000. But even this small am-
ount is distributed to only 50 people every
day through a lucky dip. Many Bhutanese
travel from all over the country to Thimpu to
get this amount as Indian currency can only
be procured at this bank. The RMA has also
asked Bhutanese to avoid travelling on a pil-
grimage this year. But for faithful Buddhists,
this is not a solution.
Bhutan’s Economic Affairs Minister Le-
key Dorji said that Bhutan was in regular to-
uch with the Reserve Bank of India on the
need to replenish `100 notes to tide over the
current crisis. In an interview to Business
Bhutan, a Thimpu-based weekly, he said that
Bhutanese need to be vigilant about being
used by Indian agents in the exchange of
demonetized notes.
It looks like a long haul ahead.
Sources in Bhutan
said India should
have made some
alternative
arrangements to
send in new
currency notes to
the country as it is
a major trading
partner and is
wholly dependent
on India.
TRADE CRISIS
Potato exports from Bhutan
to India have also been hit
due to demonetization
IL

Former Union Carbide
chairman Warren
Anderson escaped the
clutches of law for the
Bhopal gas tragedy. But
the then collector and
SP are in legal trouble
for letting him go
By Rakesh Dixit
in Bhopal
IntheDockfor
Anderson’s
Bolting
I
T will always remain a mystery
as to who facilitated the breezy
escape of then Union Carbide
Corporation Limited (UCCL)
chairman Warren Anderson, the
main accused in the Bhopal gas
tragedy, out of India 32 years
ago. However, it was never a mystery as to
who executed the order. On December 7,
1984, it was then Bhopal collector Moti
Singh and Superintendent of Police Swaraj
Puri who had escorted him in their official
cars to Bhopal airport. Anderson flew in a
Madhya Pradesh government plane to Delhi
and subsequently, flew off to the US the
STATES
UNENDING WAIT
(Left and above) Women survivors of the gas
leak demand justice for their sufferings; the
iconic photograph of a child who died in the
tragedy, by Pablo Bartholomew
Wikimedia/obi

same evening. Now the officers, long retired,
are in legal trouble.
A
lower court in Bhopal has summoned
them on January 13, 2017, to explain
why they should not be prosecuted
for helping Anderson escape. The UCCL
chairman never returned to India and all
attempts by the CBI to extradite him to face
Indian courts for the world’s worst industrial
disaster proved futile. The disaster, caused
by the sudden release of 40 tons of toxic
methyl isocyanide gas from the defunct
Union Carbide factory on December 3, 1984,
killed over 3,000 and maimed over five lakh.
Anderson, who landed in Bhopal four
days after the gas leak, was arrested and kept
in a guest house. After a few hours in captiv-
ity, he was mysteriously released on “an
order from someone higher up”. The next
day he flew back to the US and managed to
secure bail from the police. It was alleged
that he had access to a landline phone where
he was detained and used his contacts. He
remained a proclaimed absconder till his
death at a nursing home in Vero Beach,
Florida, on September 29, 2014, at the age of
91. His ghost has now returned to haunt
those who helped him escape.
It was on November 19 this year that
Bhopal’s chief judicial magistrate (CJM)
Bhubhaskar Yadav passed an order that Moti
Singh and Swaraj Puri should be booked
under Sections 212 (harboring an offender),
217 (public servant disobeying direction of
law with intent to save a person from pun-
ishment) and 221 (intentional omission to
apprehend on the part of the public servant
bound to apprehend) of the IPC. The CJM
had summoned them on December 8.
However, as the judge was indisposed, the
next date for summons has been fixed on
January 13.
“Prima facie it is evident that thousands
of people were dying in Bhopal due to leak-
age of poisonous gases and the heads of the
district, the collector and the SP, were using
all their expertise and system to help a crim-
inal escape rather than helping the victims,”
the judge said on November 19. He said the
officers helped the main accused escape
without the approval of the court and despite
his being booked under a non-bailable
section (304—culpable homicide not
amounting to murder).
T
he order came on a petition filed by
Abdul Jabbar, an activist of the
Bhopal Gas Peedit Mahila Udyog
Sanghthan, in 2010. He did so in the wake of
a national uproar then over the light sen-
tence given to the accused by the Bhopal
CJM’s court. Seven accused were sentenced
to two years in prison and fined `1,00,000
each. The accused were prosecuted under
Sections 304-A, 336, 337 and 338 (all relat-
ed to deaths caused by negligence). Victims’
groups and activists who had sought more
serious charges criticized the verdict and
said death by negligence is most frequently
used when it involves car accidents and car-
ries a maximum two-year sentence.
The CBI, the Madhya Pradesh govern-
ment and the NGOs working for the sur-
vivors had filed criminal revision petitions
against the judgment before the Sessions
Court, Bhopal, which rejected the pleas on
August 28, 2012. Interestingly, the ex-offi-
cers’ own statements in the media and vari-
ous panels that probed Anderson’s escape
were cited by the judge as evidence
against them.
In his book, Bhopal Gas Trasadi ka Sach
(The Truth of Bhopal Gas Tragedy, 2009),
Moti Singh wrote: “Anderson did not appear
satisfied and kept on saying that he want-
Union Carbide
Corporation Limited
chairman Warren
Anderson, who landed
in Bhopal four days
after the gas leak, was
arrested and kept in a
guest house. After a
few hours in captivity,
he was mysteriously
released on “an
order from someone
higher up”.

Bhopal court order in 2010.
The Shivraj Singh government is in a
dilemma over the court order on registration
of FIRs against Moti Singh and Puri. After
all, it was the Justice Kochar Commission,
instituted by the state government, which
had given a clean chit to the officers. Though
the report was submitted to the state govern-
ment in February last year, it is yet to be
tabled in the assembly. Sources said that as
per the Commission’s report Moti and
Swaraj followed instructions of their seniors.
The report states that then prime minis-
ter Rajiv Gandhi and then home minister
Narasimha Rao had verbally ordered the
Union cabinet secretary to ensure the release
of Anderson. The cabinet secretary passed
on the orders to Madhya Pradesh chief secre-
tary Brahma Swaroop and, subsequently, the
Hanumanganj police station was ordered to
allow Anderson to walk free. Several reports
have suggested that Gandhi was pressured
by the US to let Anderson go.
Senior Congress leader Arjun Singh, who
was then chief minister of MP, wrote in his
autobiography A Grain of Sand in the
Hourglass of Time that home secretary RD
Pradhan had called him “on the instructions
of then Union home minister PV Narasimha
Rao”. Pradhan denied the allegation, saying
he was chief secretary of Maharashtra at the
time and became Union home secretary only
in January 1985.
The truth will never be known.
ed to look at the scenario here (Bhopal) and
to meet with the chief minister.” He added:
“Despite being told that there was huge
resentment among people and it was not
possible for him to visit anywhere, he
(Anderson) kept on evading the proposal to
leave for Delhi. He agreed to leave Bhopal
only after a discussion of 1.5-2 hours and
only then signed the bail document.”
Moti Singh also wrote that Anderson
managed to get away by using a phone in the
room where he was detained. “Had we
removed the landline phone from his room,
Anderson would not have escaped. He possi-
bly made calls to contacts in the US to help
him leave India.” The US embassy reported-
ly mounted pressure on the Indian govern-
ment, which released Anderson on a person-
al bond of `25,000.
M
eanwhile, Swaraj Puri told the
Union Carbide Toxic Gas Leakage
Enquiry Commission (also known
as the Justice KL Kochar Commission): “We
arrested him on the basis of a written order
but released him on an oral order”, which he
said came “from higher-ups”. Puri was
sacked in September 2006 when a case was
filed against him for using an NRI quota for
his son’s admission to a college in Indore.
After retirement, he was appointed as a
member of Complaint Regulatory body of
the Narmada Valley Development Tribunal,
but was removed from there also after the
IL
Ex-Superintendent of
Police Swaraj Puri
He told the Union
Carbide Toxic
Gas Leakage Enquiry
Commission that
Anderson was
arrested on the
basis of a written
order but released
on an oral order
that came “from
higher-ups”.
Abdul Jabbar of
Bhopal Gas Peedit
Mahila Udyog
Sangathan
He filed a plea in
2010 in the wake
of a national
uproar over the
light sentence
given to the
accused by
the Bhopal
CJM’s court.
STATES

STATES
W
ITH less than a year
to go for assembly
elections, the ruling
BJP in Gujarat is a
worried lot. Gone is
the bravado and blus-
ter that led to the ali-
enation of almost all major caste configura-
tions in the two years after Narendra Modi
left for Delhi. Instead, anti-BJP groups have
united to take on the Gujarat government
which has literally been lurching from one
stir to another.
It was in November that a new caste con-
figuration emerged in the state. A joint rally
of OBCs and Dalits with support from the
Patels marked the emergence of a new polit-
ical axis in Gujarat. Muslims had already
announced their support to the Dalits.
Heading these caste configurations is a new
youth leadership which is not in awe of
established political parties.
These leaders are: Alkesh Thakore who is
spearheading the OBC-Dalit campaign un-
der the aegis of the Ekta Manch, Jignesh Me-
wani who is coordinating the Dalit offensive
and of course, Hardik Patel of the Patidar
Anamat Andolan Samiti (PAAS). The
Gujarat:BJPBlundersOnA new political axis has emerged in this state as OBCs, Dalits,
Muslims and Patidars join hands to take on a government that
seems to lurch from stir to stir
By RK Misra in Gandhinagar
A POTENT THREAT
Hardik Patel being
welcomed by
supporters
on arrival at
his hometown
Viramgam, after his
release from Lajpore
Central Jail in Surat,
this year
UNI

OBC-Dalit rally had all three voicing their
support for the stir.
GROWING STIR
Realizing that a mere change of chief minis-
ter—from Anandiben Patel to Vijay Ru-
pani—may not be enough, the government
earlier this month opened a line of commu-
nication with Hardik Patel. Predictably, the
opening round of talks between the two par-
ties failed with the warring Patels threaten-
ing to restart their stir. However, the second
round on December 8 saw the PAAS delega-
tion handing over various documents to back
their claims that many states had implemen-
ted more than 49 percent reservations des-
pite a Supreme Court order.
“Where there is a will, there is a way. The
constitution provides for 50 percent reser-
vation of which 27 percent is reserved for
OBCs. Our demand all along has been that
we should be included in the OBCs,” said
Hardik to India Legal. The PAAS convener
made it clear that the Patels would resume
their agitation if they found the government
lacking in sincerity.
PAAS has been demanding reservations
for Patidars in government jobs and educa-
tional institutions, setting up of a statutory
commission on the lines of the OBC commis-
sion for redressal of their grievances, with-
drawal of all cases against Patidar leaders
and initiating penal action against police
officers responsible for atrocities perpetrated
on them during the agitation. PAAS is also
demanding a compensation of `35 lakh to
the next of kin of all those who lost their lives
during the stir and a government job for at
least one person from each of these families.
The Patidar stir, which started in July
2015, took 14 lives. PAAS activists, including
Patel, were arrested and charged with sedi-
tion. Others were subsequently bailed out.
Hardik was given bail on the condition that
he would leave Gujarat. He has since been
staying in Udaipur, though he has been per-
mitted to shift to Uttarakhand.
Deputy chief minister Nitin Patel said:
“The government is bound by the ambit of
constitutional provisions and will discuss
with all concerned stakeholders to find an
amicable solution.” A panel of ministers has
already been set up for the purpose and he is
heading it.
CAUGHT IN A BIND
Hardik’s demand for the inclusion of
Patidars among OBCs is a treacherous mine-
field for the government. The OBCs, led by
Alpesh Thakore, have already made it clear
that they will not tolerate any dilution of the
quantum of their reservation and have been
muscle-flexing.
Ironically, the issue chosen by them is
liquor prohibition. Though Gujarat has been
“dry” since its birth, its present lax prohibi-
STATES
For over 16 months now, many social and
caste groups have been agitating against the
Gujarat government. This includes the Patels,
SC/STs, OBCs as well as the Dalits.
NEW POLITICAL AXIS
(Clockwise from below
left) Jignesh Mewani is
coordinating the Dalit
offensive against the
Gujarat government;
Alkesh Thakore is
heading the OBC-Dalit
campaign; supporters
of Hardik Patel waiting
for his release from
Lajpore jail
UNI

IL
tion policy has become a magnet for anti-
BJP groups to take on the government.
Though touted as dry, Gujarat is as wet as a
watermelon. Thakore has been organizing a
series of public meetings across the state
pointing to the ruinous effects of drinking
and has administered an oath to his follow-
ers to shun liquor. He has been demanding a
Bihar-like strict anti-liquor law. However,
they intend to intensify their agitation from
January next year by taking out awareness
marches through 112 of the 182 Vidhan Sa-
bha constituencies. Clearly, elections are also
playing on their minds.
Such a show of force would normally have
raised the hackles of the BJP government
headed by Rupani. But, realizing the poten-
tial for damage that these groups can do, the
government immediately asked senior cabi-
net minister Bhupendrasinh Chudasama to
promise that the government would seek le-
gal opinion and if need be, table a new bill in
the ensuing assembly session to tighten pro-
hibition laws. This was a departure from the
earlier haughty approach of the government
when glorifying the Gujarat model.
ON THE WARPATH
For over 16 months now, numerous social
and caste groups have been agitating stri-
dently against the government. While the
Patels are demanding reservation in jobs and
education under the OBC quota, SC/STs and
OBCs are on the warpath against any change
in this policy. Dalits have already taken up
cudgels against the government after cow
vigilantes lynched four of them for skinning
a dead cow. And now, the prohibition policy
is another weapon in their armory.
Though the opposition Congress is yet to
get its act together and the Aam Admi Party
is still desperately trying to stitch up some
semblance of a presence in Gujarat, this
caste grouping is clearly giving the ruling
BJP here anxious moments.
The history of communal conflict in Guj-
arat is replete with instances of Dalits bac-
ked by majoritarian caste groups being at
strife with the minority community. How-
ever, this traditional alignment has under-
gone a drastic change in the last 16 months,
more so after the Dalit lynchings in Somnath
district which led to a statewide Dalit outcry
and forced a change of guard with Anan-
diben being replaced by Rupani. Muslims,
who were at the receiving end of cow protec-
tion vigilantes, immediately rallied to the su-
pport of Dalits with OBCs joining the axis
and the Patidar leadership also announcing
its support. The clock seems to have come
full circle against the ruling BJP which de-
rives its strength from propagation of majo-
ritarian politics.
With the prohibition issue now becoming
a millstone around the BJP government’s
neck, efforts to sow dissension among them
have come a cropper. The agitation has virtu-
ally brought the BJP government to its
knees. This was quite a change from its ear-
lier stand where it did everything to subju-
gate the leaders. Hardik was kept in jail for
an extended period, with sedition charges
also slapped against him and others. He was
even forced out of Gujarat on court orders.
But the BJP has had to eat crow now. The
Patidars were the backbone of the BJP. Not
only will a dent in this vote bank cause a set-
back to the party, any likelihood of the three
castes making common cause would spell
disaster for it in the 2017 polls. This could
play havoc with the BJP’s chances of return-
ing to power at the center in the 2019 gener-
al elections.
Not only will a dent in the Patidar vote bank
cause a setback for the BJP, but if other castes
make common cause it would spell disaster
for it in the 2017 assembly polls.
CRISIS MANAGERS
(Clockwise from left)
Former CM Anandiben
Patel, present CM Vijay
Rupani and Deputy CM
Nitin Patel

POLITICS
I
T is often said that UP is India
and India is UP. It is also said
that the road to Raisina Hill is
through Lucknow. With assem-
bly polls early next year, it will, no
doubt, be a Kurukshetra as the
stakes are high for all parties, be
it the ruling Samajwadi Party, the BJP, BSP
supremo Mayawati, the Congress and other
stakeholders. Over the past 25 years, the SP
and the BSP have been alternating in UP.
It is clear that this will be a multi-cor-
nered contest as there are no significant
political realignments. Even as parties were
preparing for the coming battle, Prime
Minister Narendra Modi in one stroke
As this crucial state goes to the polls next year, political parties gear
up for a royal fight in the face of demonetization, caste polarization
and law and order problems
By Kalyani Shankar
UP’sModernKurukshetra
changed the election scenario not only in UP
but in other poll-bound states such as
Punjab, Manipur, Goa and Uttarakhand by
his demonetization move.
The first response from the opposition
was that Modi wanted to wipe out the cash
reserves of his opponents. The presumption
was that the BJP would have secured its own
funds much before the demonetization
move. Whether this is true or not, the
poll campaign of other parties has been
adversely hit.
SWINGING FORTUNES
In the 2012 elections, of the 403 seats, the
SP swept 224 and 29.29 percent of the vote
Photos: UNI

India Legal 31 December 2016

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