Earlier this week, the World Bank and its investment arm, the International Finance Corporation, published the Doing Business Report 2008 that ranks 178 countries in the world, providing an objective measure of business regulations and their enforcement across those countries. This year, India ranks 120 out of 178 countries, which is 12 notches above its previous year’s ranking of 132. The Report also summarises India’s position (here) on the basis of various parameters. However, there is no cause for celebration as India ranks far below several other emerging economies in providing a legal and regulatory framework that facilitates business and commerce.
As for the good news, the report throws positive light on India’s improvement on two counts, viz. (i) reduction in the number of days taken for export – from 27 days to 18 days (improving India’s ranking on the parameter of cross-border trading from 142 to 79); and (ii) access to credit (where India’s ranking improved from a ranking of 62 to 36). On all other parameters, India’s rankings have either remained the same or deteriorated from the previous year.
One aspect that is worthy of note is India’s high performance in the area of protecting investors, where India is ranked at 33 (previous ranking of 32). This is thanks to a robust company law regime coupled with a widely-expanding corporate governance and disclosure regime that has been put in place by the Securities and Exchange Board of India (SEBI) over the last few years.
On a Chindia comparison (which is becoming increasingly inevitable these days!), India has fared marginally better than China in moving up 12 notches from the previous year compared to China’s climb of 9 notches. But, on absolute terms, China is ranked at 83 compared to India’s 120. India’s performance among other emerging economies is generally lackluster, though it is somewhat comparable with the two other BRIC economies, Brazil (at 122) and Russia (at 106).
Reports such as this offer impetus for introspection. The Government itself cites the Doing Business Report while contemplating economic reforms in various sectors. Once again, we need to revisit some of the issues that are responsible for India’s current ranking in the world economy.
First, there are the regulatory hurdles. Several aspects of doing business in India require multiple procedures to be complied with. There are multiple agencies involved in administering different regulations. Often, there is duplication involved – firms are required to file the same information (or variants of the same information) with different authorities who often act at cross-purposes. What is required therefore is proper streamlining of procedures for carrying on business in India – reduction in the number of procedures as well as number of authorities involved. Further, there is a need for proper coordination among authorities.
Second comes bureaucratic delays. Applications for approvals or licences take inordinately long due to delays in decision-making by the governmental authorities. This frustrates businesses and causes valuable time and opportunity losses. There is a dire need for cutting down time frames for governmental decision-making.
Third is the lack of transparency is decision-making. Often, little or no reasons are provided for delays or rejections in the governmental approval and licensing system. Such opacity is also the cause for corruption at several echelons of the governmental machinery, that in and of itself is another cause for obstructing ease of business activity in India.
Fourth is problems with enforcement. Although India does have robust substantive laws in various spheres (that have withstood the test of time – Contract Act being one example) there is much left to be desired in the enforcement of these laws. The primary problem is in lack of capacity within the judicial system to absorb enforcement tasks and perform them satisfactorily. The court systems are overburdened with so many pressing issues and are unable to cope with the caseload. It is disheartening to note India ranks at 177 for contract enforcement (only above Timor-Leste) and it takes 1,420 days on an average for a successful party to recover on a contract suit.
It is therefore obvious that the continuing reforms need to address all these issues in a timely manner.
Friday, September 28, 2007
Thursday, September 27, 2007
Mandal II: Solicitor General & Justice Pasayat disagree
Today's hearing was marked by a sharp exchange of views between Justice Pasayat and SG. Justice Pasayat asked why spend on higher education, when elementary education needs funds, as Article 21 A is a fundamental requirement.
The SG disagreed with the Judge saying social empowerment under Article 15(4) is equally important and there is no need to prioritise. Article 21A can't be served at the expense of A.15(4), the SG explained. "We have to serve both the Articles simultaneously", the SG said. The SG pointed out that Justice Pasayat's premise is wrong.
To this, Justice Pasayat retorted: "Will you construct second floor first, and then ground floor? Your effort for higher education will require less effort, if Article 21A is met. " Justice Raveendran supported Justice Pasayat on this issue saying money spent on foundation is not visible, unlike the money spent on higher education. Justice Pasayat agreed that the Sarva Siksha Abhiyan is a sincere effort, but it is apparently not sufficient. He hinted that the money being spent on building the requisite infrastructure for higher education, to increase the seats to cater to the OBC quota may well be spent on primary education.
The SG concluded his arguments in the afternoon. Mr.Parasaran will begin his submissions on October 3.
The SG disagreed with the Judge saying social empowerment under Article 15(4) is equally important and there is no need to prioritise. Article 21A can't be served at the expense of A.15(4), the SG explained. "We have to serve both the Articles simultaneously", the SG said. The SG pointed out that Justice Pasayat's premise is wrong.
To this, Justice Pasayat retorted: "Will you construct second floor first, and then ground floor? Your effort for higher education will require less effort, if Article 21A is met. " Justice Raveendran supported Justice Pasayat on this issue saying money spent on foundation is not visible, unlike the money spent on higher education. Justice Pasayat agreed that the Sarva Siksha Abhiyan is a sincere effort, but it is apparently not sufficient. He hinted that the money being spent on building the requisite infrastructure for higher education, to increase the seats to cater to the OBC quota may well be spent on primary education.
The SG concluded his arguments in the afternoon. Mr.Parasaran will begin his submissions on October 3.
Wednesday, September 26, 2007
Mandal II: Solicitor General's robust submission continues
September 26 was Solicitor General's second day of submission before the Constitution Bench in Mandal II case. Mr.Vahanvati, to borrow the words of Mr.P.S.Krishnan, Advisor to the Minister for Education, effectively delivered the message to the Bench that it was fallacious to suggest that the Government is pursuing OBC reservations as part of vote-bank politics. Mr.Krishnan said: "At last the Government of India is fighting back. In no other case earlier in recent times, the Government of India has fought back with so much commitment, understanding and sensitivity."
Mr.Krishnan should know better than anyone else. Mr.Krishnan came in for special mention by the SG during his submissions today, for the effort he put in to dig up facts relating to inclusion of various backward castes by the National Commission for Backward Classes. Mr.Krishnan had earlier served as the Member Secretary of the NCBC. The Bench took notice of Mr.Krishnan's presence in the Court, while the CJI expressed his dismay that he quit the NCBC long back, thus suggesting that whatever be his contribution, it cannot now come to the aid of the NCBC.
That apart, today's hearing was notable for the number of witticisms lightening the mood in the Court. It all started with the SG remarking that there were communities which refused to be labelled as OBCs. Justice Dalveer Bhandari called it 'Pride vs. Pragmatism', thus suggesting that those who wanted to be labelled as OBCs, swallowed their pride, in view of the economic benefits that reservation brought.
Justice Raveendran asked what was the explanation for the fact that many castes were included mechanically, without application of mind. He agreed that where there was opposition to an inclusion, the NCBC would have applied its mind, and given a good decision. But in most cases, the opposition to inclusion was not there. Hence, inclusion was done in a routine and cursory way. The SG, however, claimed that in all such cases, there was proper application of mind. There were 200 such communities which were included. They were backward for centuries, but not included earlier, because between the State Lists and the Central Lists there were differences.
Taking out such castes at random, for illustration, the SG said he was simply amazed by the rich diversity of Indian society. "It is fascinating" he said. The choice of castes by the SG for illustration, however, drew a lighter remark from Justice Raveendran who said he was perhaps choosing only those States from where the members of the Bench hailed! (except perhaps Justice Bhandari who felt left out!) A community which survived on sooth-saying as a calling, (a caste which grew bull trained to sooth-saying through gestures), folk entertainers, fortune tellers, professional mourners or even those castes centered around sycophancy as a traditional calling. Justice Pasayat remarked this is one calling (sycophancy) which many in the country would share, and would even be ranked as No.1 in the world!
The SG suggested that the Indra Sawhney Bench had upheld the current OBC lists. Under Paragraph 72 of the Judgment, it said caste can be the beginning. Once it is identified it can be included, it becomes includable in the SCBC list. Thus caste was the basis for inclusion in 14 States in 1993. There is no harm if the Centre uses the same basis for inclusion in the remaining states after that. There were 1432 castes in the State Lists; 2430 under the Mandal List; under the Common List, there were 1350. It is incorrect to say that subsequent inclusions were made whimsically, arbitrarily, and without any application of mind and for extraneous reasons, because in September 1993,a caste was identified as a backward class on the basis of traditional occupation. Caste was a starting point; all subsequent revisions followed the same basis. If traditional occupations, and hereditary callings were relevant for 14 States, extension of the same to other States cannot be condemned. To be precise, 297 new castes were included after 1993 under the Central List on the same principle.
Other significant points made by the SG are :
1. Exclusion of Creamy Layer under Article 16(4) was justified because posts were limited. Under Article 15(5), however, the seats were not limited, but increased under the impugned Act; hence, it was not necessary to exclude the creamy layer. The Notification -yet to be issued under the impugned Act - will not exclude the creamy layer. It is for the Supreme Court to decide whether the Government is right.
2. Balaji case represents old thinking insofar as Article 15(4) was read as Proviso and an exception to Article 15(1) and A.29(2). State of Kerala v. Thomas marks the new thinking: the Constitutional mandate to remove inequality flows from Article 14, 15 and 16. Article 29(2) is irrelevant.
3. Doctrines of strict scrutiny, narrow tailoring, suspect legislation do not apply to India, as our society, unlike America, is not race-based. Caste is not race.
4. Sarva Siksha Abhiyan has shown dramatic results (a claim disputed by Justice Pasayat), and Mr.P.P.Rao's claim that Article 21 A is a dead letter is unacceptable.
Mr.Vahanvati will continue his arguments on September 27.
Mr.Krishnan should know better than anyone else. Mr.Krishnan came in for special mention by the SG during his submissions today, for the effort he put in to dig up facts relating to inclusion of various backward castes by the National Commission for Backward Classes. Mr.Krishnan had earlier served as the Member Secretary of the NCBC. The Bench took notice of Mr.Krishnan's presence in the Court, while the CJI expressed his dismay that he quit the NCBC long back, thus suggesting that whatever be his contribution, it cannot now come to the aid of the NCBC.
That apart, today's hearing was notable for the number of witticisms lightening the mood in the Court. It all started with the SG remarking that there were communities which refused to be labelled as OBCs. Justice Dalveer Bhandari called it 'Pride vs. Pragmatism', thus suggesting that those who wanted to be labelled as OBCs, swallowed their pride, in view of the economic benefits that reservation brought.
Justice Raveendran asked what was the explanation for the fact that many castes were included mechanically, without application of mind. He agreed that where there was opposition to an inclusion, the NCBC would have applied its mind, and given a good decision. But in most cases, the opposition to inclusion was not there. Hence, inclusion was done in a routine and cursory way. The SG, however, claimed that in all such cases, there was proper application of mind. There were 200 such communities which were included. They were backward for centuries, but not included earlier, because between the State Lists and the Central Lists there were differences.
Taking out such castes at random, for illustration, the SG said he was simply amazed by the rich diversity of Indian society. "It is fascinating" he said. The choice of castes by the SG for illustration, however, drew a lighter remark from Justice Raveendran who said he was perhaps choosing only those States from where the members of the Bench hailed! (except perhaps Justice Bhandari who felt left out!) A community which survived on sooth-saying as a calling, (a caste which grew bull trained to sooth-saying through gestures), folk entertainers, fortune tellers, professional mourners or even those castes centered around sycophancy as a traditional calling. Justice Pasayat remarked this is one calling (sycophancy) which many in the country would share, and would even be ranked as No.1 in the world!
The SG suggested that the Indra Sawhney Bench had upheld the current OBC lists. Under Paragraph 72 of the Judgment, it said caste can be the beginning. Once it is identified it can be included, it becomes includable in the SCBC list. Thus caste was the basis for inclusion in 14 States in 1993. There is no harm if the Centre uses the same basis for inclusion in the remaining states after that. There were 1432 castes in the State Lists; 2430 under the Mandal List; under the Common List, there were 1350. It is incorrect to say that subsequent inclusions were made whimsically, arbitrarily, and without any application of mind and for extraneous reasons, because in September 1993,a caste was identified as a backward class on the basis of traditional occupation. Caste was a starting point; all subsequent revisions followed the same basis. If traditional occupations, and hereditary callings were relevant for 14 States, extension of the same to other States cannot be condemned. To be precise, 297 new castes were included after 1993 under the Central List on the same principle.
Other significant points made by the SG are :
1. Exclusion of Creamy Layer under Article 16(4) was justified because posts were limited. Under Article 15(5), however, the seats were not limited, but increased under the impugned Act; hence, it was not necessary to exclude the creamy layer. The Notification -yet to be issued under the impugned Act - will not exclude the creamy layer. It is for the Supreme Court to decide whether the Government is right.
2. Balaji case represents old thinking insofar as Article 15(4) was read as Proviso and an exception to Article 15(1) and A.29(2). State of Kerala v. Thomas marks the new thinking: the Constitutional mandate to remove inequality flows from Article 14, 15 and 16. Article 29(2) is irrelevant.
3. Doctrines of strict scrutiny, narrow tailoring, suspect legislation do not apply to India, as our society, unlike America, is not race-based. Caste is not race.
4. Sarva Siksha Abhiyan has shown dramatic results (a claim disputed by Justice Pasayat), and Mr.P.P.Rao's claim that Article 21 A is a dead letter is unacceptable.
Mr.Vahanvati will continue his arguments on September 27.
Tuesday, September 25, 2007
Contempt of Court: Arundhati Roy case revisited
The Delhi Mid-Day case has focussed our attention on the Contempt of Courts Act, and the threat to freedom of speech and expression. In 2001-02, I had closely observed how the Supreme Court circumvented the Act to punish Arundhati Roy, even though in terms of Court's own reasoning, the grounds for doing so did not exist. In the light of the Mid-Day case which revealed the Court's refusal to examine the contemners' plea of truth as a defence, I studied the Arundhati Roy case again to compare it with the present case. Both are suo motu cases, with the petitioners failing to secure the consent of the Attorney General or the Solicitor General as required by the Act, but succeeding to convince the Court to issue notice to the alleged contemners.
The Supreme Court issued notices to Arundhati Roy, Medha Patkar and Prashant Bhushan for criminal contempt following a dharna organised by the Narmada Bachao Andolan outside the Supreme Court on December 13, 2000. The bench comprising Justices Ruma Pal and G.B. Pattanaik, which heard the case, concluded that the petition did not contain allegations that the participants in the dharna had picketed the gates of the court and prevented lawyers or litigants from entering or leaving the court premises. Such allegations, if made and substantiated, could have constituted criminal contempt under sub-sections 2 (c)(ii) and (iii) of the Act. The bench also agreed that procedurally, the petition was deeply flawed and should not have come up before the court for this reason.
But all this did not stop the Supreme Court from issuing a fresh notice of criminal contempt on Arundhati Roy for the three paragraphs in her affidavit.
In response, Arundhati Roy filed an affidavit denying that she had attributed any improper motive to any particular Judge and refuting the allegation that she had "scandalised" the authority of the judiciary. The notice was issued on the basis of a misreading of her first affidavit, she said. She had also stated that she could not be persuaded to change her impressions about the Court because the Court had neither ordered an inquiry into the functioning of the Registry to find out how a grossly defective petition against her was admitted, nor taken action against the petitioners for filing a false case.
In their judgment, Justices Pattanaik and Sethi said that they had no option but to convict her because she had committed the offence of criminal contempt of the Court by "scandalising its authority with mala fide intentions" and, further, had not shown "any repentance or remorse." Instead, they said, she had persistently and consistently tried to justify her action which, prima facie, was contemptuous of the Court. The Judges did not address her grievance about the Court's failure to order an inquiry into the role of the Registry and to take action against the petitioners.
In explaining why they had no option but to convict Arundhati Roy, the Judges expansively cited two factors on top of the lack of remorse on her part that explained why she had "landed herself in the dock of the court." The first factor was that she "drifted away from the path on which she was traversing by contributing to the Art and Literature." The second factor was that she had "resorted to all legal tactics and pretences" (sic) to frustrate the present proceedings against her. Even a critic of Arundhati Roy would find it difficult to believe how these factors had any bearing on her conviction for criminal contempt of court.
It is a generally accepted practice in legal circles that one cannot use the court's proceedings to criticise the court. But the Court issues notice to an alleged contemner with a view to providing an opportunity to the person to explain why action should not be taken against the person for an action that is prima facie contemptuous of the court. If the alleged contemner uses this opportunity to defend himself or herself - as Arundhati Roy has done through her first and second affidavits - the person cannot be held guilty for not showing any sense of remorse or for consistently choosing to justify his or her action. The very objective of the practice of issuing notice, as an instrument to ensure due process of justice, will be defeated if the Court were to suggest that the alleged contemner has no option but to apologise to the Court on receipt of a notice for contempt.
Did Arundhati Roy make critical remarks about the Court with mala fide intentions? The bench concluded she did. However, to sustain this conclusion, the bench failed to provide any substantiation of the charge. Instead, it hurled a patently unfounded allegation against her: "She wanted to become a champion to the cause of the writers by asserting that persons like her can allege anything they desire and accuse any person or institution without any circumspection, limitation or restraint."
Arundhati Roy's affidavit did not contain any such assertion. Nor did her comments elsewhere. But the bench went on to find that her attitude showed "her persistent and consistent attempt to malign the institution of the judiciary found to be the most important pillar in the Indian democratic set-up." Citing a proposition in law that the law punishes an archer no matter whether his arrow hits or misses the target, the Court concluded: "The respondent is proved to have shot the arrow, intended to damage the institution of the judiciary and thereby weaken the faith of the public in general and if such an attempt is not prevented, disastrous consequences are likely to follow resulting in the destruction of rule of law, the expected norm of any civilised society."
The distinction between making an allegation against a particular Judge/Court and the Judiciary in general has always been blurred by the Court. In the A.Roy case, the Bench which issued notice to her said she had attributed motives to a particular Court in her affidavit of harrassing her. In the Judgment, however the Pattanaik-Sethi Bench held that she was guilty of contempt, as her affidavit had defamed the entire Judiciary. The question raised by her was if she had indeed attributed motives to a particular Court, then that Court should recuse itself from deciding on her case. The judgment circumvented this argument by suggesting that her action scandalised the Judiciary in general.
The Supreme Court issued notices to Arundhati Roy, Medha Patkar and Prashant Bhushan for criminal contempt following a dharna organised by the Narmada Bachao Andolan outside the Supreme Court on December 13, 2000. The bench comprising Justices Ruma Pal and G.B. Pattanaik, which heard the case, concluded that the petition did not contain allegations that the participants in the dharna had picketed the gates of the court and prevented lawyers or litigants from entering or leaving the court premises. Such allegations, if made and substantiated, could have constituted criminal contempt under sub-sections 2 (c)(ii) and (iii) of the Act. The bench also agreed that procedurally, the petition was deeply flawed and should not have come up before the court for this reason.
But all this did not stop the Supreme Court from issuing a fresh notice of criminal contempt on Arundhati Roy for the three paragraphs in her affidavit.
In response, Arundhati Roy filed an affidavit denying that she had attributed any improper motive to any particular Judge and refuting the allegation that she had "scandalised" the authority of the judiciary. The notice was issued on the basis of a misreading of her first affidavit, she said. She had also stated that she could not be persuaded to change her impressions about the Court because the Court had neither ordered an inquiry into the functioning of the Registry to find out how a grossly defective petition against her was admitted, nor taken action against the petitioners for filing a false case.
In their judgment, Justices Pattanaik and Sethi said that they had no option but to convict her because she had committed the offence of criminal contempt of the Court by "scandalising its authority with mala fide intentions" and, further, had not shown "any repentance or remorse." Instead, they said, she had persistently and consistently tried to justify her action which, prima facie, was contemptuous of the Court. The Judges did not address her grievance about the Court's failure to order an inquiry into the role of the Registry and to take action against the petitioners.
In explaining why they had no option but to convict Arundhati Roy, the Judges expansively cited two factors on top of the lack of remorse on her part that explained why she had "landed herself in the dock of the court." The first factor was that she "drifted away from the path on which she was traversing by contributing to the Art and Literature." The second factor was that she had "resorted to all legal tactics and pretences" (sic) to frustrate the present proceedings against her. Even a critic of Arundhati Roy would find it difficult to believe how these factors had any bearing on her conviction for criminal contempt of court.
It is a generally accepted practice in legal circles that one cannot use the court's proceedings to criticise the court. But the Court issues notice to an alleged contemner with a view to providing an opportunity to the person to explain why action should not be taken against the person for an action that is prima facie contemptuous of the court. If the alleged contemner uses this opportunity to defend himself or herself - as Arundhati Roy has done through her first and second affidavits - the person cannot be held guilty for not showing any sense of remorse or for consistently choosing to justify his or her action. The very objective of the practice of issuing notice, as an instrument to ensure due process of justice, will be defeated if the Court were to suggest that the alleged contemner has no option but to apologise to the Court on receipt of a notice for contempt.
Did Arundhati Roy make critical remarks about the Court with mala fide intentions? The bench concluded she did. However, to sustain this conclusion, the bench failed to provide any substantiation of the charge. Instead, it hurled a patently unfounded allegation against her: "She wanted to become a champion to the cause of the writers by asserting that persons like her can allege anything they desire and accuse any person or institution without any circumspection, limitation or restraint."
Arundhati Roy's affidavit did not contain any such assertion. Nor did her comments elsewhere. But the bench went on to find that her attitude showed "her persistent and consistent attempt to malign the institution of the judiciary found to be the most important pillar in the Indian democratic set-up." Citing a proposition in law that the law punishes an archer no matter whether his arrow hits or misses the target, the Court concluded: "The respondent is proved to have shot the arrow, intended to damage the institution of the judiciary and thereby weaken the faith of the public in general and if such an attempt is not prevented, disastrous consequences are likely to follow resulting in the destruction of rule of law, the expected norm of any civilised society."
The distinction between making an allegation against a particular Judge/Court and the Judiciary in general has always been blurred by the Court. In the A.Roy case, the Bench which issued notice to her said she had attributed motives to a particular Court in her affidavit of harrassing her. In the Judgment, however the Pattanaik-Sethi Bench held that she was guilty of contempt, as her affidavit had defamed the entire Judiciary. The question raised by her was if she had indeed attributed motives to a particular Court, then that Court should recuse itself from deciding on her case. The judgment circumvented this argument by suggesting that her action scandalised the Judiciary in general.
Mandal II Case: Government begins arguments
The Solicitor General, G.E.Vahanvati began his arguments today, giving an outline of his submissions and that of his colleagues. He identified 11 issues, and suggested that Mr.Parasaran would be answering the contentions of Mr.K.K.Venugopal, while Mr.Gopal Subramanium would answer those of Mr.P.P.Rao.
The major thrust of Mr.Vahanvati's submissions this morning was the contention that Articles 15(4) and 16(4) are not exceptions to Articles 15(1) and 16(1), but are emphatic statements of equality, as implicit in Articles 15(1) and 16(1). Both 15(4) and 16(4) begin with the expression, "Nothing in this Article...shall prevent the State". His suggestion was that this very expression is indicative of the emphatic character of this clause.
He also contended that the American doctrines of strict scrutiny and compelling necessity cannot apply to India.
He argued that caste can be the basis to identify class, as many backward castes are centered around certain backward occupations.
He was critical of the argument that many castes have been added to the list of OBCs as part of vote-bank politics, and suggested his compilation clearly shows that every inclusion and rejection of demand for inclusion, is based on objective grounds. As examples, he cited the case of inclusion of only Jats of Rajasthan (excluding two districts) by the NCBC and the Lingayats of Karnataka.
Inequality is easy, but equality is difficult. Equality involves surviving against the current.
I intend to go through Mr.Vahanvati's written submissions, so as to apprecitate his submissions better with the relevant case law.
The major thrust of Mr.Vahanvati's submissions this morning was the contention that Articles 15(4) and 16(4) are not exceptions to Articles 15(1) and 16(1), but are emphatic statements of equality, as implicit in Articles 15(1) and 16(1). Both 15(4) and 16(4) begin with the expression, "Nothing in this Article...shall prevent the State". His suggestion was that this very expression is indicative of the emphatic character of this clause.
He also contended that the American doctrines of strict scrutiny and compelling necessity cannot apply to India.
He argued that caste can be the basis to identify class, as many backward castes are centered around certain backward occupations.
He was critical of the argument that many castes have been added to the list of OBCs as part of vote-bank politics, and suggested his compilation clearly shows that every inclusion and rejection of demand for inclusion, is based on objective grounds. As examples, he cited the case of inclusion of only Jats of Rajasthan (excluding two districts) by the NCBC and the Lingayats of Karnataka.
Inequality is easy, but equality is difficult. Equality involves surviving against the current.
I intend to go through Mr.Vahanvati's written submissions, so as to apprecitate his submissions better with the relevant case law.
Friday, September 21, 2007
Contempt & Sentence: How Judges Outsmart Journalists
In the Mid-Day case, the Delhi High Court sentenced three senior journalists and a publisher of Mid-Day to four months imprisonment, after having found them guilty of contempt of court, following their expose of former Chief Justice Y.K. Sabharwal's alleged misconduct while in office. This morning, Manoj Mitta (go to Times City, `Truth about hole in contempt law' p.2) suggested in The Times of India that there is a loophole in the latest amendment to Contempt of Courts Act, which provided for truth as a defence. His reading was that the proviso enabling truth as a defence was added to Section 13 of the Act, which deals with sentencing of the contemner. Hence, he suggested that at the time of arguments over sentencing, the Court would have no option but to grant the plea of truth as a defence, even though the same Court might have denied this plea while hearing the plea of the defence opposing the contempt charge against the accused.
Manoj Mitta noted: This is probably the first time the new Section 13 will be tested in a contempt case against journalists. But as ill-luck would have it, the occasion for testing it did not arise today.
As the arguments in the Delhi High Court before the Division Bench headed by Justice R.S.Sodhi revealed, the proviso to Section 13 was invoked by the defence counsel, Rohit Kumar. He also referred to the stay of their conviction by the Supreme Court, and in view of the stay, he pleaded that the Bench should not impose a sentence, but only consider imposing a fine. The Bench however, found these arguments irrelevant to the question of sentencing, as the contemners were not ready to apologise. The Bench, therefore, considered imposing the maximum sentence of six months imprisonment, on the contemners, in accordance with the Act. The Bench finally imposed four months imprisonment on the contemners, but released them on bail, as directed by the Supreme court which granted stay of conviction.
Manoj's interpretation of Section 13 and the proviso added to it in 2006 to enable truth as a defence was quite valid. One expected that both the Bench and the defence counsel would read his story before the proceedings began in the High Court. Yet, the interpretation did not make any impact on the proceedings. Why? Because the Bench was smarter. While holding the contemners as guilty of contempt, the Bench did not think the proviso to Section 13 was relevant, even though it was raised by Shanti Bhushan. In their brief order too, the Bench took note of his argument that truth is a defence, but ignored it, because it took a broader view of the contempt charge.
The Bench suggested that the contemners were guilty of contempt of the court, because Justice Sabharwal's brother Judges who sat with him in the sealings case must have been scandalised by the allegations against Justice Sabharwal. For these brother Judges, the truth of the allegations against Justice Sabharwal did not matter. Therefore, the Bench did not feel the need to consider the plea of truth as a defence.
While sentencing the contemners again, the plea of truth as a defence would have been relevant had Justice Sabharwal constituted a Single Judge Bench in the sealings case, and had not retired. In that context, truth of the allegations could have been tested. The Bench implicitly accepted the defence argument that contempt of Courts Act cannot be invoked, if the allegations were against retired Judges. Still the Mid-Day journalists were proceeded against because at stake was the honour of the brother Judges, who sat with Justice Sabharwal. The Bench alleged that the message being sent by the allegations was that the brother Judges connived at these allegations against Justice Sabharwal. As the allegations levelled by the Mid-day journalists were not against the brother Judges who are still in office, the question of granting the journalists' plea for truth as a defence did not arise at all.
So, what is the lesson from the Delhi Mid-Day case?
No allegation of corruption can be levelled against any Supreme Court Judge, because no Judge sits singly,(except perhaps during vacations) and it is always possible to circumvent the provision for truth as defence by claiming that the brother Judge/s against whom motives were not attributed were scandalised by the allegations.
UPDATE(I have made certain factual corrections, subsequent to my post yesterday.) Looking at the coverage of the issue in today's papers and on television, it appears that the suo motu use of the Contempt of Courts Act against the journalists by the Delhi High Court has backfired. Today, the issue no longer appears to be whether Justice Sabharwal is clean or not. The issue is the question of the freedom of media and the effectiveness of the amendment of the Contempt of Courts Act to provide for truth as defence. In a sense, the amendment has been effectively tested, even if the Court refused to consider the case against the Judges in the light of the amendment.
Manoj Mitta noted: This is probably the first time the new Section 13 will be tested in a contempt case against journalists. But as ill-luck would have it, the occasion for testing it did not arise today.
As the arguments in the Delhi High Court before the Division Bench headed by Justice R.S.Sodhi revealed, the proviso to Section 13 was invoked by the defence counsel, Rohit Kumar. He also referred to the stay of their conviction by the Supreme Court, and in view of the stay, he pleaded that the Bench should not impose a sentence, but only consider imposing a fine. The Bench however, found these arguments irrelevant to the question of sentencing, as the contemners were not ready to apologise. The Bench, therefore, considered imposing the maximum sentence of six months imprisonment, on the contemners, in accordance with the Act. The Bench finally imposed four months imprisonment on the contemners, but released them on bail, as directed by the Supreme court which granted stay of conviction.
Manoj's interpretation of Section 13 and the proviso added to it in 2006 to enable truth as a defence was quite valid. One expected that both the Bench and the defence counsel would read his story before the proceedings began in the High Court. Yet, the interpretation did not make any impact on the proceedings. Why? Because the Bench was smarter. While holding the contemners as guilty of contempt, the Bench did not think the proviso to Section 13 was relevant, even though it was raised by Shanti Bhushan. In their brief order too, the Bench took note of his argument that truth is a defence, but ignored it, because it took a broader view of the contempt charge.
The Bench suggested that the contemners were guilty of contempt of the court, because Justice Sabharwal's brother Judges who sat with him in the sealings case must have been scandalised by the allegations against Justice Sabharwal. For these brother Judges, the truth of the allegations against Justice Sabharwal did not matter. Therefore, the Bench did not feel the need to consider the plea of truth as a defence.
While sentencing the contemners again, the plea of truth as a defence would have been relevant had Justice Sabharwal constituted a Single Judge Bench in the sealings case, and had not retired. In that context, truth of the allegations could have been tested. The Bench implicitly accepted the defence argument that contempt of Courts Act cannot be invoked, if the allegations were against retired Judges. Still the Mid-Day journalists were proceeded against because at stake was the honour of the brother Judges, who sat with Justice Sabharwal. The Bench alleged that the message being sent by the allegations was that the brother Judges connived at these allegations against Justice Sabharwal. As the allegations levelled by the Mid-day journalists were not against the brother Judges who are still in office, the question of granting the journalists' plea for truth as a defence did not arise at all.
So, what is the lesson from the Delhi Mid-Day case?
No allegation of corruption can be levelled against any Supreme Court Judge, because no Judge sits singly,(except perhaps during vacations) and it is always possible to circumvent the provision for truth as defence by claiming that the brother Judge/s against whom motives were not attributed were scandalised by the allegations.
UPDATE(I have made certain factual corrections, subsequent to my post yesterday.) Looking at the coverage of the issue in today's papers and on television, it appears that the suo motu use of the Contempt of Courts Act against the journalists by the Delhi High Court has backfired. Today, the issue no longer appears to be whether Justice Sabharwal is clean or not. The issue is the question of the freedom of media and the effectiveness of the amendment of the Contempt of Courts Act to provide for truth as defence. In a sense, the amendment has been effectively tested, even if the Court refused to consider the case against the Judges in the light of the amendment.
Tuesday, September 18, 2007
The Retail Debate Widens
Previous posts on this blog (here) discussed the issue of foreign direct investment (FDI) in retail trade. More recently, though, the debate has progressed beyond FDI. The issue has morphed itself into one of organised retail versus unorganised retail. This is evident from the fact that over the last couple of months, organised domestic retailers have been shown the door by some State Governments, prominent among them being Uttar Pradesh, West Bengal and Kerala after protests by the local unorganised players in the industry in the form of mom and pop kirana stores. Curiously enough, some of these State Governments had themselves invited the organized players in the first place to set up operations in their states.
From a legal, regulatory and policy-making perspective, this has important implications. While the FDI debate was largely being driven at the Centre, the domestic organized versus unorganized sector debate has shifted to the states. The State Governments possess licensing powers under the respective Shops and Establishments Acts to allow organized retailers to operate in their state, subject of course to checks and balances in terms of judicial review. The inevitable result of this phenomenon would be fragmented policy making and knee-jerk reactions by states. This would impede uniform policy making on what is becoming an important issue – retailization, which is affecting all emerging economies including India.
Today’s Business Standard carries an editorial that advocates the need for a proper policy intervention on this issue. It says:
“Any policy intervention has to take into account several factors. For one, any change of technology or scale will inevitably result in market shifts, which in turn could yield to downside effects like job losses, whether it is in retailing or in powerlooms replacing handlooms. The policy response in each case has to be to ensure that there are as few difficulties in absorbing the displaced in other parts of the economy - this implies facilities for re-training as well as ensuring that other parts of the economy grow well. Tax breaks for enterprises employing more labour (instead of for those employing more capital) and more labour flexibility for textile/garment firms wanting to expand operations come to mind immediately as some logical policy options. Any social cost-benefit analysis must also include the benefits reaped by millions of customers across the country through lower retail prices as well the benefits to farmers once the substantial wastages in the distribution chain get reduced. The policy responses being planned — a cess on large retailers, or restricting them to the outskirts of cities — are not very desirable because the government is then weighing in against efficiency. While it may be legitimate to try and ensure that small shopkeepers will not get affected, it also means that consumers will pay higher prices and that farmers will not benefit from lowered wastages in the supply chain.”
From this, it appears that what is required is a proper policy study on the impact of organized retail trade in the economy, by way of a cost-benefit analysis. It is only on the basis of the findings of such a study that the Government can frame a clear and coherent policy on organized retail. This would avoid the flip-flop approach on this issue as we have been witnessing over the last few months.
From a legal, regulatory and policy-making perspective, this has important implications. While the FDI debate was largely being driven at the Centre, the domestic organized versus unorganized sector debate has shifted to the states. The State Governments possess licensing powers under the respective Shops and Establishments Acts to allow organized retailers to operate in their state, subject of course to checks and balances in terms of judicial review. The inevitable result of this phenomenon would be fragmented policy making and knee-jerk reactions by states. This would impede uniform policy making on what is becoming an important issue – retailization, which is affecting all emerging economies including India.
Today’s Business Standard carries an editorial that advocates the need for a proper policy intervention on this issue. It says:
“Any policy intervention has to take into account several factors. For one, any change of technology or scale will inevitably result in market shifts, which in turn could yield to downside effects like job losses, whether it is in retailing or in powerlooms replacing handlooms. The policy response in each case has to be to ensure that there are as few difficulties in absorbing the displaced in other parts of the economy - this implies facilities for re-training as well as ensuring that other parts of the economy grow well. Tax breaks for enterprises employing more labour (instead of for those employing more capital) and more labour flexibility for textile/garment firms wanting to expand operations come to mind immediately as some logical policy options. Any social cost-benefit analysis must also include the benefits reaped by millions of customers across the country through lower retail prices as well the benefits to farmers once the substantial wastages in the distribution chain get reduced. The policy responses being planned — a cess on large retailers, or restricting them to the outskirts of cities — are not very desirable because the government is then weighing in against efficiency. While it may be legitimate to try and ensure that small shopkeepers will not get affected, it also means that consumers will pay higher prices and that farmers will not benefit from lowered wastages in the supply chain.”
From this, it appears that what is required is a proper policy study on the impact of organized retail trade in the economy, by way of a cost-benefit analysis. It is only on the basis of the findings of such a study that the Government can frame a clear and coherent policy on organized retail. This would avoid the flip-flop approach on this issue as we have been witnessing over the last few months.
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