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Posted on 02 March, 2016, No Comments Comments admin
The Congress Vice-President, Shri Rahul Gandhi, has claimed that the Prime Minister hardly consults his senior Ministers. If Shri Rahul Gandhi is to be believed, then Smt. Sushma Swaraj is not consulted on the Pakistan policy, Shri Rajnath Singh was unware of the Nagaland accord and, presumably, I am unware of the Budget proposals.
As one evolves from a young to a middle-aged one, we certainly expect a certain level of maturity. The more I hear Shri Rahul Gandhi, the more I start wondering “how much does he know – when will he know”.
The Prime Minister should be the natural leader of the party and the Government. In the NDA it is so. The UPA was quite different. The Prime Minister is to lead by example. The present Prime Minister not only works hard and involves himself in the functioning of the various departments of the government, but inspires his team to work harder than we would have normally. Each one of us, whether the External Affairs Minister, Home Minister or myself, are responsible for each important decision taken by each of one departments. We do not by-pass the Prime Minister who is always available for consultation and guidance. After hearing Shri Rahul Gandhi, I think India has made the right choice between the Prime Minister who leads the Government and a Prime Minister who is merely implementing decisions taken elsewhere.
Shri Rahul Gandhi’s views are shaped by the environment of a political party which has evolved into a ‘crowd around a family’. The UPA model of governance was that if a person outside the family is the Prime Minister, he should be reduced to being a figure-head. Given a choice between a ‘hands-on’ Prime Minister or a ‘nominal’ head, I would unhesitatingly choose the former.
Posted on 25 February, 2016, No Comments Comments admin
THE LEADER OF THE HOUSE (SHRI ARUN JAITLEY): Sir, I must confess that initially, when this debate started, I had no intention of intervening or speaking in this debate. My colleague, the HRD Minister, Mrs. Smriti Irani, would reply to the debate at the end. But, after hearing two very distinguished Members of this House, Mr. Sitaram Yechury and the Leader of the Opposition, I think this debate, which has been taking place, is somewhere missing or side-tracking the real issue.
Should we have universities where there is openness, there is freedom, there is scope for academic excellence? Of course, we must have that. Should we allow different ideas to clash and be created and further mature in universities? Of course, we must do that. Can there ever be an argument in a democracy like ours that there must be only one ideology or only one idea, which must emerge? Obviously, not.
And, therefore, let us set this debate at rest that neither the National Democratic Alliance, nor the BJP, nor this Government, ever subscribes to this philosophy that only one idea must mature and grow in universities. We are entitled to be criticized. I have absolutely no difficulty with that. If some student belonging to a weaker or deprived section of society suffers a mental distress, that issue has to be squarely addressed and we can all speak in the same language, because humanity demands that our concern must be the same.
But the issue — and I regret to say that — which actually is the core issue, that squarely relates not to the amount of academic licence which is available in universities; it must be; we can be a little more gracious and allow some more scope for a debate; we also have in universities youngsters doing many things and as they grow and mature, they realize that probably this was not the ideal behaviour at that time, but that is a licence the society allows. Some amount of radical romancing can also take place in academic institutions.
But the core question is, and I regret that even Azad sahib has dealt with it in only one casual sentence: Are we going to give respectability to those whose primary ideology is that they want to break this country? After all, what has happened in the case of two persons alleged to be involved in terrorist actions and convicted by the highest court? You had the Bombay case, of 12th March, 1993. Our fairness of the system was that not only did the accused get a fair trial, but also he got at least, several rounds of appeal, review, corrective petitions before the Supreme Court. He even got the facility of midnight-hearings, which many of us would not have got. So, the system went out of the way to accommodate a person, against whom a grave charge was that he had blasted the city of Bombay and killed hundreds of people. Can anybody say that his martyrdom should be celebrated? …(Interruptions)…
Sir, let us be very clear about the kind of functions, which were organized in Hyderabad and also in JNU. What was the function eventually? What was the programme in Jawaharlal Nehru University? A circular is taken out. Two of our very distinguished Members, Yechury ji and Shri D.P. Tripathi, had been former Presidents of the students’ unions. They are more familiar with that university than I am. No doubt, it has thrown up many scholars. It should evolve as an institution of excellence. Nobody wants to campaign against such a campus. A pamphlet is taken out. The Congress have a history of never having supported the fringe. You are a mainstream party. You have ruled this country more than any other political party. How was this meeting called? I am not getting into disputed tapes and all this. Here is a group of people who call for this cultural programme on the 9th February. The pamphlet and the poster are titled, ‘A Country Without a Post Office.’
No, no, at least, our conscience, Sitaram ji, can react differently to this कि इस देश की यह हालत कर दो कि इसका अता-पता न रहे। ‘A Country Without a Post Office’ और ‘A Country Without a Post Office’ का जो pamphlet निकलता है, इसको कोई डिस्प्यूट नहीं कर रहा है, यह दीवारों पर चिपकाया जाता है। ‘A Country Without a Post Office’ उसकी भाषा यह है कि judicial killing of Afzal Guru and Maqbool Bhatt. 6-6, 8-8 rounds सुप्रीम कोर्ट के सामने मिले।
Please allow me to complete. We didn’t interrupt you Sitaram ji. So, let us be fair in the debate. I regret to say that I read a statement today where my very distinguished former colleague actually adding respectability to this charge of judicial killing that the judges decided wrongly to execute him. People belonging to mainstream don’t make such statements. ‘A Cultural Evening to Protest against What is the History of Forcible Occupation of Jammu & Kashmir’, the circular says this. We can censor the whole debate, ignore the real facts and then say academic freedom is in peril. No academic freedom will ever be in peril in this country. Now, on this, a pamphlet is circulated justifying this and that pamphlet, I regret, is more against the Government which the UPA led, which the Congress historically led. The kind of language which is used, ‘Kashmir did not belong to Nehru, nor does it belong to Manmohans and Modis in recent times, who keep flaunting this ‘inalienable crown’ to this whole world, they consciously invisible as to how the occupation of territory has taken place through might and brutal force…’ Then it speaks about the right of self- determination. Then, it speaks about, ‘Today in Tihar Jail two graves lie in desolation — Maqbool Bhatt and Afzal Guru.’ This is the meeting of 9th. When the University realizes that it can’t be held.
Sir, I am conscious of the rule of procedure that when a case is pending in court, we don’t argue because we may create a prejudice against the accused. And, therefore, I do believe that every student including those whose names are there, the names of the people here in this circular, each one of them will have a fair trial and I don’t want to prejudice their trial also by naming them. Two of them have been arrested. The Police is looking for some others. They all belong to an Ultra-Left philosophy. Mr. Raja, if you want evidence against the name that you took, I can give it but it will unnecessarily prejudice his fair trial, which is not my intention. Notwithstanding the ban, this function is held. Some other people also come. बाहर से आते हैं नकाब पहनकर और नकाब पहनकर जब आते हैं और एक अल्ट्रा-लेफ्ट माओइस्ट और एक सेपरेटिस्ट और यह कोई दस-बीस फ्रिंज नहीं था, यह संख्या सैकडों में बन गई और नारे क्या लगे, ‘’कश्मीर की आजादी तक भारत की बरबादी तक जंग चलेगी, जंग चलेगी’’। ‘भारत के टुकड़े-टुकड़े इंशाअल्लाह, इशांअल्लाह।” The pamphlets which they have circulated, which nobody is denying, just bear a complete evidence. What is the Police supposed to do? Whether the person about whom Shri Raja has mentioned, wrongly went there; his intention was different, that is all for investigation to come out. I keep his case out. He is entitled to a fair trial. Of course, what happened in the Patiala House is condemnable. But vandalism is condemnable and sedition is free speech! Nobody can subscribe to this ideology and least of all should ever the Congress Party subscribe to it. Of course, vandalism should be condemned. The accused are entitled to a fair trial. Nobody should hold demonstrations in courts. But, at the same time, what is the factual matrix? In one university, it is the alleged martyrdom of Yakub Memon, and in the other university, it is the martyrdom day of Afzal Guru. और येचुरी साहब, अफज़ल गुरु किस चीज का प्रतिनिधित्व करता था, हम सब जानते हैं। हम मनुवाद, ब्राह्मणवाद और पूंजीवाद के खिलाफ संघर्ष का प्रतिनिधि नहीं था। अफजल गुरु के शहादत के दिन हम मनुवाद और पूंजीवाद के खिलाफ नारे लगाए और इसलिए आज याकूब मेमन का कार्यक्रम करें और डॉ. अम्बेडकर का फोटो लगा दें, उससे वह कोई माओवादी, अम्बेडकरवादी नहीं बन जाएगा। आप अगर अम्बेडकर साहब के विचार इन विषयों पर जानना चाहते हैं, तो Let us just see what Dr. Ambedkar has to say. उनके जितने भाषण हुए शायद सबसे प्रभावी भाषण था जो 25 नवम्बर, 1949 को उन्होंने दिया। Each one of his interventions is in golden words. 26 तारीख को संविधान स्वीकार हुआ और 25 को तो पूरा संविधान तैयार हो गया था तो he moved the motion. We remember his speech only for… (Interruptions)… Yes, you quoted it — till political democracy becomes social democracy, an economic equality, egalitarianism, etc. Yes, he said that. But he also said two other things in that speech. Now let me first of all concede, and I am not doing it only for this because we have all studied history, that in the Communist Party of 1949 and the Communist Party of 2016, there is a sea change in the evolution. In 1949, you were a part of the Telangana struggle. Things have evolved since then. But Dr. Ambedkar was speaking in 1949. So what he said in 1949 about the Communists, probably among the Maoists who take that attitude, and amongst other radicals, that still holds good. तो इसिलए कोई अलगाववाद की बात करे और उनका नाम ले ले।
When he framed the Constitution and gave it, — this was in the 1949 context — he said, “The condemnation of the Constitution largely comes from two quarters – the Communist Party and the Socialist Party. Why do they condemn the Constitution? Is it because it is really a bad Constitution? I venture to say, ‘no’. The Communist Party wants a Constitution based upon the principle of Dictatorship of the Proletariat. They condemn the Constitution because it is based upon Parliamentary democracy. The Socialists want two things. The first thing that they want is that if they come to power, the Constitution must give them the freedom to nationalize or socialize the private property without payment of compensation. The second thing that they want is that the Fundamental Rights mentioned in the Constitution — and this is important — must be absolute and without any limitations so that if their party fails to come to power, they would have the unfettered freedom not merely to criticize but also to overthrow the State. These are their main grounds on which the Constitution is being condemned.” Now, let us forget 1949. I know for a fact that the CPM and CPI of today, as mainstream Communist Parties, are very much a part of the Parliamentary democracy as we are. I am not addressing them. But now, if from 1949, you translate what Dr. Ambedkar said about the Maoists, they want an absolute right of free speech, not reasonable restrictions, so that they can use the Constitution in order to overthrow the Parliamentary system because they don’t believe in it. That is precisely the reason that this misconceived argument has arisen. Now, let us concentrate on vandalism, which is terrible, but, at the same time, in the name of academic freedom, sedition must become a part of free speech! Can hate speech ever be free speech? Obviously, it can’t be. Can you have free speech to say, “I have arrived to break this country into pieces?” “भारत के टुकड़े-टुकड़े और जब तक टुकड़े नहीं होगें, जंग होगी।” अब आप संविधान को देखिए, जो डॉ. अम्बेडकर ने बनाया I In the Constitution itself, when he says in Article 19 (1) (a) Freedom of Expression, what does he say, as a restriction, in Article 19 (2)? It is sovereignty of India, integrity of India and public order. These are a part of the reasonable restrictions, which Pandit Nehru, Dr. Rajendra Babu, Dr. Ambedkar, all of them put into the Constitution.
Therefore, if, in prime campuses even. — all right, let’s forget the controversy at stake — nobody has denied that programme. In Jadavpur University, they weren’t saying, “ब्राह्मणवाद से आजादी’’ It was ‘’मणिपुर मांगे आज़ादी, कश्मीर मांगे आजादी, मिजोरम मांगे आजादी, गिलानी मांगे आजादी, अफज़ल गुरु मांगे आज़ादी।” The question is: Does the Indian Constitutional order allow this or not? And, now, to say that this kind of an act must go on and be ignored by the State, yes, Azad Saheb, if there is a fear of war with its ownself, it is a war on the territory of India. Let us forget the idea of India. It is the geography on the territory of India, which is being attacked today. Who lives if India does not survive? Therefore, it is the territory of India and, if you go back to Dr. Ambedkar’s speech, बहन जी, मैं चाहूंगा कि आप इसको निश्चित रुप से एक बार पढ़ लीजिए, उसी भाषण में डॉ. अम्बेडर कहते हैं कि आज के समय में हम लोग जो लोकतंत्र दे रहे हैं, इस देश को खतरा किससे है?
उन्होंने कहा कि इस देश का इतिहास रहा है कि इस देश के इतिहास में भीतरी ताकतें इस देश को तोड़ने का प्रयास करती रही हैं, जैसे जयचदं ने तोड़ने का प्रयास किया, जब शिवाजी लड़ाई लड़ रहे थे तो कुछ मराठा मुगलों के साथ चले गए और जब सिख लोग लड़ाई लड़ रहे थे तो गुलाब सिंह दूसरी तरफ चले गए। These are all a part of his speech of 25th November, 1949. Therefore, “India will be at war with itself” in the words of Shri Ghulam Nabi Azad…
Sir, I remember, sitting in the same chair, as he is, for five years, in Chhattisgarh, when the Maoists came and killed 73 CRPF jawans, everybody said, — Mr. Chidambaram was the Home Minister — that the Home Minister should resign. If you look up the record, I spoke from the same chair and said as to why Mr. Chidambaram should not resign. I said, “The moment he resigns, he gives Maoists a sense of victory.” That was my speech sitting there. And, therefore, कम से कम इस ईश्यू पर तो आप हमारे साथ होते! मुझे खेद है।
मुझे कम से कम इस बात का कोई संदेह नहीं है कि इस सदन में बैठे हुए जितने सदस्य हैं और वे जिन पार्टियों का प्रतिनिधित्व करते हैं, वे इस राष्ट्र की मुख्य धारा के साथ हैं, लेकिन दुर्भाग्य यह है कि कुछ लोग पहले सोचते हैं और फिर कदम उठाते हैं। यह एक ऐसी वारदात थी कि आपकी पार्टी ने पहले कदम उठा लिया और सोचा बाद में, इसलिए कि यह पश्चिमी बंगाल के चुनाव से पूर्व दोस्ती का प्रयास है।……(व्यवधान)… Sir, let me answer this question of PDP as well. The Congress (I) has believed and I believe too that if we are to fight the separatist forces in Jammu and Kashmir, the national parties will have to work with the mainstream party of Jammu and Kashmir whether it is the National Conference or the PDP. The National Conference had worked with us and they have worked with them. अगर हम यह कहते है कि नेशनल कॉन्फ्रेंस और पीडीपी को अलग रख दो और इसिलए अगर पीडीपी के साथ आज हम हैं या पहले आप नेशनल कॉन्फ्रेंस के साथ थे या पहले नेशनल कॉन्फ्रेंस हमारे साथ थी, तो …(व्यवधान)…
उसमें बिल्कुल स्पष्ट है कि कश्मीर की मेनस्ट्रीम पार्टीज़ के साथ हमारे वैचारिक मतभेद होते हुए भी नेशनल पार्टीज़ को काम करना पड़ेगा, क्योंकि हमें अलागवादियों से लड़ना है। इसिलए PDP के विषय पर हम अपोलोजेटिक होंगे, यह एक समझौता है और यह राष्ट्र हित में है। क्षेत्रीय पार्टियों के साथ आपने भी समझौता किया और हमने भी किया।
बिना सोचे हुए, उन माओवादियों और उन नकाबपोशों के, जो भारत को तोड़ने के नारे लगा रहे थे, उन्हें आप respectability देने पहुंच गए? क्या वहां पुलिस mainstream के खिलाफ थी? What does the Police do? If, in the heart of Delhi slogans are raised about breaking India, should the Police remain a mute spectator? यह जो misconceived विचार आया कि पुलिस को campus में नहीं जाना चाहिए, Of course, normally, the Police avoids going into the campus.
Is it not allowed? Is it a sovereign territory like a foreign mission?
Let me read. …(Interruptions)…. Let me read two statements. …(Interruptions)…
Let me read two statements. Congress was in power in 1983. Mrs. Indira Gandhi was the Prime Minister. Q. No. 2055 says, “Whether it is a fact that on 11th May, 1983 the Police entered the JNU campus without permission of the Vice-Chancellor and the students were mercilessly beaten up.’ The answer was given by the then Education Minister. ‘The Vice-Chancellor and two senior functionaries of the University were held in illegal confinement for 50 hours at the residence of the Vice- Chancellor by a section of students. On the basis of the complaint registered at the Police Station, the Police entered the campus. As the Vice-Chancellor was under illegal confinement, there was no opportunity to even obtain his permission, if any required, to enter the campus. The students resisted the entry. However, no student was beaten up. Three hundred and seventy students, including 50 girls, were arrested for keeping him under illegal confinement.’
After I finish speaking, you please answer. The charge was illegal confinement because there was no “भारत को तोड़ो” slogans. It is much worse if for illegal confinement you can enter the JNU; Just because there are West Bengal elections round the corner doesn’t mean that the Congress Party will now take a stand that you never enter a campus even if slogans to break this country are being raised there. A University campus is not a sovereign territory.
I think, the Jawaharlal Nehru University is an integral part of India. Therefore, Indian law applies and, therefore, if the penal code is being violated, the Police has a right to enter. The tragedy of 9th February is not only that the slogans were raised, the tragedy also is, how can National Party say, ‘these arrests are bad; police should not have entered?’ You are, indirectly or directly, adding respectability to a movement which was a charter to break this country into pieces.
I have absolutely no doubt that Shri Anand Sharma, with all his best intentions, and his leader have every right to go there. I have no doubt that you would condemn even more strongly these slogan than I have condemned. I have absolutely no doubt. My only problem is, you must realize that issue is not that some course is being tinkered with or some politicization is taking place. You have a situation where slogans against the integrity of India and against the sovereignty of India are being raised. And, let us be very clear. We did not enact Section 124 (a) of IPC which says that ‘whoever, by words spoken or visible representation or any action’ are enough…
Sir, the most celebrated case in post-Independence India — there was only one Constitution Bench — was in 1962. Everybody cites that, because that is from where you get this principle. I will hand over a copy of this to my friend for bedtime reading. I was going through the slogans raised and the speeches made. This was Pandit Nehru’s Government, which leveled the charge. The Trial Court convicted the man, High Court convicted him and the Supreme Court upheld the conviction. There was not a single slogan to break the country. The speech was by a communist leader from Begusarai. It is an old stronghold of Mr. Raja’s party; so, he is smiling. The speeches were, ‘Today these Congress goondas are sitting on the gaddi due to mistake of people. When we drove the Britishers, we shall strike to turnout these goondas as well. These official dogs will be liquidated along with the Congress goondas. These Congress goondas are banking upon the American dollars and imposing various kinds of taxes on the people. ‘This is the speech.
1962 की। उस समय पंडित जी भारत के प्रधानमंत्री थे। हम तो बहुत छोटी पार्टी थे। आपने 124 (A) लगाया, सुप्रीम कोर्ट तक पांच जजों की खंडपीठ ने इसको अपहोल्ड कर लिया। जिस लीगल सिद्धांत का आप जिक्र कर रहे हैं, the entire speech is by a leftist leader against the Congress Party. I am reading the judgement; it quotes it. The tragedy of Bengal is that now there are three Congress parties in Bengal. There is a Congress party, there is a Trinamool Congress and there is a Congress (Marxists). So I yield to Mr. Derek O’Brien, there is a Congress, there is Trinamool Congress and there is a third one.
To come back to a more serious point, Sir, I would only urge this, the accused have been arrested, some of them; the investigations are on. The Home Minister has yesterday said, the Police will be more than fair. Please don’t — by getting into the side lanes — camouflage this great offence which has taken place. It is a very serious offence. These are the tendencies of these ultras of diverse ideologies, one is the Jihadist and the other is the Maoist, which is an alliance of them. हम तो नये सत्ता में आए हैं। आप तो बहुत पुराने अनुभवी हैं और इसीलिए मैं कह रहा हूं कि पहले सोच लेते जे0एन0यू0 जाने से पूर्व। इन सारे तथ्यों की गंभीरता को समझ लेते तो शायद वहां जाने की नौबत न आती। आज़ाद साहब, आपको तो स्पष्ट स्टैंड लेना पड़ेगा, ये नहीं कि मैं हिंसा के खिलाफ हूं और उन नारों के खिलाफ हूं। आपकी राजनीति की दिशा कहीं न कहीं दिखलाती है कि वह बहुत छोटा विषय था, बड़ा गंभीर विषय एचआरडी मिनिस्ट्री बन गई। यह वास्तविक स्थिति नहीं है। हमारी सहयोगी जब जवाब देंगी, तो उसके तथ्य भी सामने आएंगे। आपने ठीक कहा कि आपकी पार्टी के दो महान नेता एक प्रधानमंत्री, एक उस समय के पूर्व प्रधानमंत्री थे, आतंक के सामने उनकी कुर्बानी हुई है। You should be more vigorous in speaking against terror than we are and we should speak in the same language and, therefore, who are speaking in terms of using jung to break the country, please don’t do anything which adds respectability to their movement. That is all I have to say. Thank you.
Posted on 13 February, 2016, No Comments Comments admin
Former Presidents and Prime Ministers rarely speak, but when they do, the nation should listen to them with rapt attention. They represent the wisdom of the nation. They are expected to be non-partisan, render constructive advice and at times send a powerful message even to their own political party to act in broader national interest. Having consistently held Dr. Manmohan Singh, the former Prime Minister in high respect, I expect the same from him.
I have read his interview in the latest edition of “India Today”, particularly his concern that the Prime Minister and the Government are not reaching out to the opposition. He feels that the Government is not doing enough to move up the country’s economy.
I am sure if Dr. Singh would dispassionately analyse the present Government, he would really realize the India has a Government where the Prime Minister has the last word, where natural resources are allocated without corruption through transparent process, where industrialists no longer visit North Block to push files/decisions, where environmental clearances are dealt with in routine and not stalled on sadistic or corrupt considerations. Has there been any change in the work culture of the Government? During the UPA Government, the public sector banks were hardly run by their own Boards or even by North Block. They were run from 24, Akbar Road. In Power and Infrastructure areas, sectoral challenges were not addressed during the UPA. It is the present Government which is clearing up these accumulated challenges.
Many stalled infrastructure projects have now started moving. India’s journey is from ‘policy-paralysis’ to a global ‘bright-spot’, as the fastest growing economy moves on notwithstanding major challenges.
On consultations with the opposition, almost all political parties except the Congress, support the GST. The Congress has done a volte face. Both the Parliamentary Affairs Minister and myself have discussed the GST with every senior Congress leader in Parliament. Is the Congress position on “Constitutional cap” not motivated by real politics? The economist in Dr. Singh should advice his party that tariff are not provided for in the Constitution. This is what nation expects from the senior leaders and statesmen like former Prime Ministers.
Posted on 24 December, 2015, No Comments Comments admin
The Winter Session of Parliament has just concluded yesterday. The Winter Session gives rise to a few legitimate thoughts which I must share.
On Parliamentary Democracy:
Parliamentary Democracy has been India’s foremost strength. Different shades of political opinions, regions, States, communities, tribes, all find their way in the decision making process in Parliament. Parliamentary protests are not unheard of in India. In extreme cases there are precedents of disturbance in the past. But the last two sessions have witnessed a clear stand of the Congress Party that Parliament shall not be allowed to function. Most of the congress leaders, in private, have expressed helplessness over the decision of their leadership that Parliament must be disturbed continuously. The moot question which arises for the Congress Party is, ‘how does India legislate?’ The Standing Committee mechanism which worked exceedingly well since 1993, has been weakened in the Rajya Sabha, by the House repeatedly appointing Select Committees, questioning the opinions of the Standing Committee. If this tendency continues, a successful institution of Standing Committee could be hurt. The Government, therefore, has adopted an alternative option of a Joint Committee to consider the Bankruptcy Law. There are other options being suggested, such as to pass legislation without a Standing Committee or drafting laws in a manner to fit them into the definition of Money Bills. The latter two are not preferred options. The Congress Party leadership must seriously explore that its disproportionate and irrational approach in dealing with Parliament is hurting institutions. If Pandit Nehru can be credited in the initial years of our democracy of having laid down of healthy precedents being established, the current generation in control of the Congress Party will find a place in history of having weakened what their ancestors established. Has the country not lost out by delaying the GST since the last year’s Budget Session? How far is it desirable to pass important legislations on the last day without discussion? Statistically, we have passed a law. But has Parliament applied its mind to the law?
Vulgarity:
Is vulgarity the new norm of Indian politics? I hope not.
Some months ago a few Members of the Bharatiya Janata Party made statements which were not appreciated even by the Party. The Party President cautioned them and advised them to refrain from making such statements. The result of the caution are visible.
What about the statements made by the Hon’ble Chief Minister of Delhi about the Prime Minister and others, both inside and outside Delhi Assembly? If any functionary of the Government of India were to use such language, it would witness a nationwide outrage. People in positions are expected to act with restraint. They cannot be outlandish. Vulgarity is not a right available to them. The political discourse cannot be couched in vulgar language. Falsehood delivered with vulgar overtones is not a substitute of truth. Lumpenisation of public discourse can never be high point of politics. Functionaries of the Delhi Government and its supporters have lowered the level of political discourse. They rely heavily on general falsehood without ever stating the specifics. The Aam Aadmi Party’s success in Delhi seems to have misled the Congress Party that vulgarity brings votes. Indian public opinion has a sense of fairness. It is time that public opinion expresses its outrage against the lowering of the level of public discourse.
Posted on 23 December, 2015, No Comments Comments admin
ECONOMIC OFFENCES: DEFINITION AND GENESIS
While commemorating its golden jubilee in 1995, one of the key commitments of countries at the United Nations was the urgent need for international cooperation in countering transnational crime. In the 20th century, while the most common forms of transnational crime are economic offences, the exact nature and ambit of such offences has not been clarified in any international forum, thus far. While several attempts have been made to formulate a comprehensive definition for what constitutes an ‘economic offence’ or an ‘economic crime’, none have proved to be universally accepted. This is because different national regimes treat economic offences differently, making it difficult to have a uniform definition of such offences. Notwithstanding, it is possible to draw upon certain general principles from different regimes, which are instrumental in identifying and understanding an economic offence.
The Eleventh United Nations Congress on Crime Prevention and Criminal Justice (Bangkok, April 2005) (hereinafter “UN Congress”) attempted to broadly define an “economic crime” as those activities which involved one or other form of economic gain or financial or material benefit. In the opinion of the UN Congress, economic crimes included economic fraud and all identity-related crimes, except for those that did not necessarily contain an economic element or motive. While specifically noting that there was an absence of any comprehensive definition of economic crimes, the UN Congress attempted to identify the key components of such crimes, by defining specific crimes within the ambit of such offences.
Hence, for instance, the crime of fraud, which forms part of economic crimes, was observed to have two meanings. While in most countries, legislation has limited the offence of “fraud” to cases where there was economic loss to victims, the terms “fraud” and “fraudulent” were observed to be commonly used by officials, academics and others to describe general conduct involving the use of dishonesty or deception, but not necessarily causing any financial benefit or loss. Instances where genuine identity information or documents are secretly taken or misappropriated without the knowledge of the person concerned, were described as “identity theft”. Furthermore, other instances where identities were used to deceive individuals and institutions were referred to as “identity fraud”.
The term “financial crime” was defined to include all crimes that are committed using major financial systems or are committed against those systems themselves. Such crimes were observed to be closely related to economic crimes, and were said to include money-laundering, certain forms of corruption affecting financial institutions, and other major economic crimes that are perpetrated by means of such financial structures. The terms of “commercial crime” and “commercial fraud” were also defined and were said to include any form of criminal activity involved in a monetary or barter transaction, ranging from large commercial dealings to small bargains in the marketplace.
Although the exercise of defining the various manifestations of economic crimes was useful in understanding the broad features of such crimes, it also ran the risk of overly fragmenting the approach to addressing such crimes. The UN Congress also noted that, while it was difficult to comprehensively define economic crimes, the broad understanding of such crimes that was captured in most jurisdictions was of any action or omission that either ran counter to public economic policy, or threatened basic principles of public economic order.
In an article titled “The Boardroom to the Cellblock: The Justifications for Harsher Punishment of White-Collar and Corporate Crime” by J. Scott Dutcher (37 Ariz. St. L.J. 1295 (2005)), the rationale for criminal punishment for white collar crimes, which are a form of economic crimes that are committed by individuals with a high social status, was explained comprehensively. According to the author, white collar crimes are an invention of globalisation. The offenders of such crimes occupy powerful positions and are driven by personal interest and greed. The example of Raj Rajaratnam and Rajat Gupta both convicted in the United States on charges of insider trading provide a classic case in point.
While the sophistication of these crimes makes them difficult to trace back to the individuals who committed them, the financial losses that such crimes instigate make them a nightmare for individual businesses and policy-makers. Consequently, the author is of the view that such crimes require harsh punishments that would deter offenders, who are powerful and educated individuals, from taking the risk of committing them.
White collar crimes constitute one of the most grievous forms of economic offences and are capable of toppling over businesses and pushing back economies. The huge financial gains and losses involved in white collar criminal activities are the primary reason for this. Consequently, States are encouraged to put in place adequate measures to deter the commission of crimes of such magnitude.
The growth of white collar crimes amongst a plethora of economic offences is a relatively recent phenomenon in India. This is not to say that economic offences did not exist previously— however, while economic crimes in pre-independence India were primarily traditional offences of theft, fraud and cheating, the nature of such crimes has changed considerably over the years. As a result both methods of investigation, prevention and adjudication of such offences need to keep pace. This is the main theme of this discussion below.
THE PRE-INDEPENDENCE ERA
The Ministry of Home Affairs, Government of India, defines economic crimes to mean criminal acts done either solely or in an organised manner with or without associates or groups with intent to earn wealth through illegal means, and carryout illicit activities violating the laws of the land, other regulatory statutory provisions governing the economic activities of the Government and its administration.
While drafting the Indian Penal Code, Lord Macaulay included the crimes of theft, smuggling, cheating, counterfeiting, criminal breach of trust, fraud or larceny and misappropriation or embezzlement in economic crimes. Macaulay’s motivations for including such crimes within the Indian Penal Code present an interesting justification. The traditional economic offences of theft, extortion, robbery and dacoity, criminal misappropriation of property, criminal breach of trust, receiving of stolen property, cheating, fraudulent deeds and disposition of property, mischief and criminal trespass are found under the Chapter on “Offences against Property” in the Indian Penal Code. These offences are made punishable on the ground that they constitute violations of the right to property.
According to Lord Macaulay, the right to property was a creature of law that required the sanction of penal law to remedy “imperfect or obscure” operation of civil law over such right. As evident in “The Indian Penal Code: With Notes” by W. Morgan and A.G. Macpherson, Esqrs., Lord Macaulay noted in respect of offences against property that :
The substantive civil law, in the instances which have been given, is different in different countries and in the same country at different times. As the substantive civil law varies, the penal law, which is added as a guard to the substantive civil law, must vary also. And while many important questions of substantive civil right are undetermined, the Courts must occasionally feel doubtful whether the provisions of the Penal Code do or do not apply to a particular case.
I shall elucidate upon the nature of some of the offences, as envisaged by Lord Macaulay under the Indian Penal Code, for more clarity over the rationale for their inclusion. The crime of theft, for instance, as mentioned under Sections 378 to 382 of the Indian Penal Code, includes the individual crime of theft itself, theft in dwelling house, theft by clerk or servant of property in possession of master, and theft after preparation made for causing death, hurt or restraint in order to commit theft. As per notes on the Indian Penal Code, Courts were required to have regard to the principles of civil law while ruling upon the crime of theft. Thus the most common economic offence essentially had no independent jurisprudence but operated as a civil law matter would.
The crime of extortion, as mentioned under Sections 383 to 389 of the Indian Penal Code, deals with (1) general crime of extortion, (2) putting person in fear of injury in order to commit extortion, (3) extortion by putting a person in fear of death or grievous hurt, (4) putting person in fear of death or of grievous hurt, in order to commit extortion, (5) extortion by threat of accusation of an offence punishable with death or imprisonment for life, etc, and (6) putting person in fear or accusation of offence, in order to commit extortion. The notes on the Indian Penal Code describe the crime of extortion, like theft, to belong to those classes of offences that involve wrongful gain. However, as rightfully observed by Lord Macaulay:
The dishonest intention to obtain property is common to both these offences; but in theft, the object of the offender is to take property which is in the possession of a person out of that person’s possession, and it is part of the definition that the offender’s intention should be to take “without that person’s consent”.
The offence of extortion is distinguished from theft by this obvious circumstance that it is committed by the wrongful obtaining of a consent, and not without consent. It is distinguishable from robbery by this feature that the property is obtained by means of such fear of injury as does not amount to the fear of instant death or personal hurt, which is part of the offence of robbery.
The criminal misappropriation of property includes the dishonest misappropriation of property and dishonest misappropriation of property possessed by deceased person under Sections 403 and 404 of the Indian Penal Code respectively. As mentioned in the notes on the Indian Penal Code:
In the offence of criminal misappropriation, there is not necessarily an invasion of the possession of another person by an attempt to take from him that which he possesses. The offender is already in possession of the property; and is either law-fully in possession of it, because either he has found it or is a joint owner of it, or his possession, if not strictly lawful, is not punishable as an offence, because he has acquired it under some mistaken notion of right in himself or of consent given by another.
The dishonest intention to appropriate the property of another is common to theft and to criminal misappropriation. But this intention which in theft is sufficiently manifested by a moving of the property must in the other offence be carried into action by an actual misappropriation or conversion.
The offence of criminal breach of trust includes the general offence of criminal breach of trust, criminal breach of trust by carrier, criminal breach of trust by clerk or servant, and criminal breach of trust by public servant, or by banker, merchant or agent as mentioned under Sections 405 to 409 of the Indian Penal Code. As mentioned in the notes on the Indian Penal Code:
This offence like the offence of Criminal Misappropriation is characterised by an actual fraudulent appropriation of property. There is not originally a wrongful taking or invoking as in theft, but the offence consists in a wrongful appropriation of property, consequent upon a possession which is lawful.
The offence is distinguishable from Criminal Misappropriation, because the subject of it is not property, which by some casualty or otherwise, but without criminal means, comes into the offender’s possession; but property which is entrusted to the offender by the owner or by other lawful authority and which the offender holds subject to some duty or obligation to apply it according to the trust.
From a reading of the above-mentioned offences, it is evident that Lord Macaulay carefully delineated distinct economic offences based on their nature and applicability. At the same time, severe criminal punishments were not envisaged since they were essentially envisaged ‘as a guard to the substantive civil law’. In Rajendra Prasad v. State of Uttar Pradesh, (1979) 3 SCC 646, the Supreme Court discussed Lord Macaulay’s intentions while drafting the Indian Penal Code, by stating that:
The basic principle of the nineteenth century Indian Penal Code, said Lord Macaulay who drafted it, is ‘the principle of suppressing crime with the smallest possible amount of suffering’. He lays this down as an unassailable axiom rather than as a contention for debate.
Hence, the above discussion demonstrates that the traditional economic offences under the Indian Penal Code were not codified by Lord Macaulay with the intention of imposing harsh punishments on the perpetrators of such crimes. Rather, these offences were solely intended to punish crimes against the property of a person, which were not regarded to be of as serious nature as crimes against the body but consequently not adequately deterred by civil penalties. Hence they operated as a halfway house between civil law and criminal law that penalised offences against the body. This interpretation of economic offences was, however, slated for a change after India’s independence in 1947.
THE LICENCE RAJ
In a paper titled “The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India” (Philippe Aghion, Robin Burgess, Stephen J. Redding,and Fabrizio Zilibotti, American Economic Review, 98(4): 1397-1412), the authors discuss the period preceding liberalization in India at length. According to the facts noted in the paper, immediately following its independence in 1947, India embarked on a period of centrally planned industrialization. The centerpiece of this plan was the Industries (Development and Regulation) Act, 1951, which made it mandatory to procure a license to run any industry in India and promoted industrial development in a controlled manner. Since the Government of India had complete control over the grant of licenses to Indian industries under the Act, the phase during which the Act was in operation is also known as the period of the license raj.
Both private and public companies were required to obtain a license and register with the Government during the license raj regime. These licenses were aimed at meeting production targets under the five-year development plans of the newly independent India. The Government control over industrial development was also intended to accelerate industrialization and economic growth in targeted areas and to reduce regional disparities in income and wealth across different regions in India.
Under the Industries Act, an industrial license was required to (i) establish a new industrial unit, (ii) carry on business in an existing unlicensed industrial unit ,(iii) significantly expand an existing industrial unit, (iv) start a new product line in the unit or, for that matter,(iv) change the location of the unit. Applications for obtaining the industrial license were required to be made to the Ministry of Industrial Development and then reviewed by an inter-ministerial Licensing Committee. The socialistic leaning of the Indian Government immediately post independence was the primary reason for the license-raj.
However, due to the overly bureaucratic nature of the licensing process, there was considerable uncertainty regarding the process of license-approval. According to the Hazari Committee set-up under the chairmanship of Dr. R.K. Hazari, who was a consultant with the Planning Commission, to review Industrial Licensing, 35% of license applications in the year 1959-1960 were rejected, with the rejected applicants accounting for approximately 50% of the investment value of all applications. The inordinate delays in the approval process of the license were also very common during the time. Neither were the applicants provided explicit criteria for the award of the license, nor were they given an opportunity to defend their license application prior to its cancellation. In fact, the Licensing Committee reviewed license applications on a sequential, first-come, first-serve basis in view of the five-year development goals.
The operation of this system suffered from several drawbacks. The principal among them was the rampant corruption in the grant of licenses. The Licensing Committee always tended to favor the larger industrial houses, which were not only better informed, but were also instrumental in submitting multiple applications early on in order to foreclose the planned number of applications required to be received. The poor also suffered significantly due to the rampant corruption, which led to the diversion of public funds intended for social welfare.
To combat these evils, the first major law titled Prevention of Corruption Act (PCA), 1947, was enacted to prevent unauthorized encashment of postwar reconstruction funding. The Anticorruption Bureau was also established by the Parliament in 1961 to investigate violations of the PCA. The punishment under the PCA entailed a maximum term of 5 years. In the case of C.I. Emden v. State of Uttar Pradesh, AIR 1960 SC 548, the constitutional validity of Section 4(1) of the Prevention of Corruption Act, 1947 was challenged before the Supreme Court of India. The said section stated that “if any trial of an offence punishable under s. 161 or s. 165 (offences relation to public servants that were repealed by the PCA of 1988) of the Indian Penal Code, it is proved that an accused person has accepted or obtained, or has agreed to accept or attempted to obtain, for himself or for any other person, any gratification (other than legal remuneration) or any valuable thing from any person, it shall be presumed unless the contrary is proved that he accepted or obtained or agreed to accept or attempted to obtain, that gratification or that valuable thing, as the case may be, as a motive or reward such as is mentioned in the said section 161, or as the case may be, without consideration or for a consideration which he knows to be inadequate.” While upholding the validity of the said Section, the Supreme Court observed that:
Mr. Anthony, for the appellant, contends that this section offends against the fundamental requirement of equality before law or the equal protection of laws. It is difficult to appreciate this argument. The scope and effect of the fundamental right guaranteed by Art. 14 has been considered by this Court on several occasions; as a result of the decisions of this Court it is well established that Art. 14 does not forbid reasonable classification for the purposes of legislation; no doubt it forbids class legislation; but if it appears that the impugned legislation is based on a reasonable classification founded on intelligible differentia and that the said differentia have a rational relation to the object sought to be achieved by it, its validity cannot be successfully challenged under Art. 14.
Legislature presumably realised that experience in courts showed how difficult it is to bring home to the accused persons the charge of bribery; evidence which is and can be generally adduced in such cases in support of the charge is apt to be treated as tainted, and so it is not very easy to establish the charge of bribery beyond a reasonable doubt. Legislature felt that the evil of corruption amongst public servants posed a serious problem and had to be effectively rooted out in the interest of clean and efficient administration. That is why the Legislature decided to enact s. 4(1) with a view to require the raising of the statutory presumption as soon as the condition precedent prescribed by it in that behalf is satisfied.
In addition to PCA, which was later amended in 1988, several other statutes to regulate economic offences, including the Monopolistic and Restrictive Trade Practices Act, 1969, and the Foreign Exchange Regulation Act (FERA), 1973, were also enacted during the license-raj.Some of these acts entailed harsh punishments for economic offences; however, harsh penalties as a legislative trend was still in its nascent stages.
While interpreting statutes enacted during the license raj, the judiciary at the time, also considered it expedient to give higher deference to the intent of the legislature in the specific context of economic statutes. For instance, in the case of R.K. Garg and Ors. v. Union of India (UOI) and Ors., (1981) 4 SCC 675, where the Supreme Court was asked to rule upon the constitutional validity of the Special Bearer Bonds (Immunities and Exemptions) Act, 1981,it was observed by P.N. Bhagwati J. that:
Another rule of equal importance is that laws relating to economic actives should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrine or straight jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislature judgment in the field of economic regulation than in other areas where fundamental human rights are involved.
In another case of Akadasi Padhan v. State of Orissa, AIR 1963 SC 1047, where the constitutional validity of a provincial act that prohibited all persons except the Government or its officers and agents to purchase or transport ‘kendu’ leaves was under challenge, the Supreme Court noted that:
In interpreting such a provision, it is essential to bear in mind the political or the economic philosophy underlying the provisions in question, and that would necessarily involve the adoption of a liberal and not a literal and mechanical approach to the problem. With the rise of the philosophy of Socialism the doctrine of State ownership has been often discussed by political and economic thinkers. Broadly speaking, this discussion discloses a difference in approach. To the socialist, nationalisation or State ownership is a matter of principle and its justification is the general notion of social welfare. To the rationalist, nationalisation or State ownership is a matter of expediency dominated by considerations of economic efficiency and increased output of production.
These decisions that economic offences committed during the license raj were primarily of the traditional kind contained in the IPC. The higher judiciary, which had not yet reached its activist phase, also showed greater deference to the intent of the legislature at the time as well. All of these trends, however, changed after the liberalization of the Indian economy.
GLOBALISATION AND LIBERALISATION OF THE INDIAN ECONOMY
Post-1991, industrial licensing was abolished in India in almost all industries and a policy of liberalization was adopted. Specifically, tariff and non-tariff barriers were slashed to open up the Indian economy for the inflow and outflow of international goods. As noted in the book titled “Indian Economic Reforms: An Assessment” by K. C. Reddy, the rationale for liberalization was to actively encourage and assist Indian entrepreneurs to exploit and meet the emerging domestic and global opportunities and challenges. The inflow of foreign direct investment into India in the 1990s, not only increased the role and importance of the private sector in the Indian economy but has also heightened the need for focus on business ethics and corporate integrity. To understand the various corporate governance issues in the financial sector, the Naresh Chandra Commission was set-up by the Department of Company Affairs under Ministry of Finance in 2002. One observation made by this commission was that unlike in many other countries, effective corporate governance in India did not emerge from financial crisis, but rather from increasing international competition that resulted from liberalization.
In view of this, a range of economic statutes such as the Prevention of Corruption Act, 1988, Prevention of Money Laundering Act, 2002 and Foreign Exchange Management Act, 1999 (FEMA) were enacted during this time. These acts created new economic offences of money laundering and smuggling of foreign currency and created relatively harsher punishments than the acts during the license raj. Moreover, a trend of self-regulation also began to gain momentum in view of the reduced control of the Government and increased control of the market and the private sector.
In the case of Attorney General for India and Ors. v. Amratlal Prajivandas and Ors, AIR 1994 SC 2179, the constitutional validity of two enactments, namely, Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974 (COFEPOSA) and Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) was challenged before the Supreme Court. While upholding the validity, the Supreme Court made several pertinent observations, namely:
Till the wind of liberalisation started blowing across the Indian economic landscape over the last year or two, the Indian economy was a sheltered one. At the time of independence, India did not have an industrial base worth the name. A firm industrial base had to be laid. Heavy industry was the crying need. All this required foreign exchange. The sterling balances built up during World War II were fast dissipating. Foreign exchange had to be conserved, which meant prohibition import of several unessential items and close regulation of other imports. It was also found necessary to raise protective walls to nurture and encourage the nascent industries. These controls had, however, an unfortunate fall-out. They gave rise to a class of smugglers and foreign exchange manipulators who were out to frustrate the regulations and restrictions – profit being their sole motive, and success in life the sole earthly judge of right and wrong. As early as 1947, the Central Legislature found it necessary to enact the Foreign Exchange Regulation Act, 1947 and Imports and Exports (Control) Act, 1947. Then came the import (Control) Order, 1955 to place the policy regarding import on a surer footing. In the year 1962, a new Customs Act replaced the antiquated Sea Customs Act, 1878. The menace of smuggling and foreign exchange violations, however, continued to rise unabated. The Parliament then came forward with the conservation of Foreign Exchange and Prevention of Smuggling Act, 1974 (COFEPOSA). It provided for preventive detention of these anti-social elements.
In another case of Manzoor Ali Khan v. Union of India (UOI), AIR 2014 SC 3194, the constitutional validity of Section 19 of Prevention of Corruption Act, 1988 (prior sanction), was under challenge before the Supreme Court of India. While upholding the section, the Supreme Court observed the following principles from its prior decisions:
The adverse impact of lack of probity in public life leading to a high degree of corruption is manifold. It also has adverse effect on foreign investment and funding from the International Monetary Fund and the World Bank who have warned that future aid to underdeveloped countries may be subject to the requisite steps being taken to eradicate corruption, which prevents international aid from reaching those for whom it is meant. Increasing corruption has led to investigative journalism which is of value to a free society. The need to highlight corruption in public life through the medium of public interest litigation invoking judicial review may be frequent in India but is not unknown in other countries.
The above decisions demonstrated a trend towards harsher punishments for economic offences such as bribery and smuggling in view of its deleterious effects on the economy. This trend was a direct result of liberalization, which increased the wealth disparity among the masses and pushed India towards a more capitalist structure of governance. This was concomitant with the growth of an activist and populist Court.
In Vineet Narain v. Union of India, (1998) 1 SCC 226, popularly known as the Jain Diaries case, the Supreme Court began— what is now a common process in large-scale criminal investigations particularly in economic offences— a Court-monitored probe. On 25th March, 1991, an alleged official Ashfak Hussain of the terrorist organisation Hizbul Mujahideen, was arrested in Delhi. Subsequent to his interrogation, raids were conducted by the Central Bureau of Investigation (CBI) on the premises of Surender Kumar Jain, his brothers, relations and businesses. During the raid, the CBI seized two diaries and two note books from the premises. They contained detailed accounts of vast payments made to persons identified through their initials only. The initials, however, corresponded to the initials of various high-ranking politicians, in power and out of power, and of high ranking bureaucrats. However, no action was taken to investigate the contents of the diaries or the allegations against high profile persons. Consequently, writ petitions were filed in the public interest under Article 32 of the Constitution of India to direct the CBI to take action immediate action in the matter.
The key issue before the Court were whether judicial review was available for activating the investigative process, an executive function. Answering in the affirmative it issued wide-ranging directions not only to monitor the probe itself through a device known as the ‘continuing mandamus’ but also recommended steps for reform of the CBI and the CVC. It directed the government to make the latter a statutory body and made the CBI accountable to it. The fact that the offences in question were economic weighed heavily with the Court:
“The adverse impact of lack of probity in public life leading to a high degree of corruption is manifold. It also has adverse effect on foreign investment and funding from the International Monetary Fund and the World Bank who have warned that future aid to under-developed countries may be subject to the requisite steps being taken to eradicate corruption, which prevents international aid from reaching those for whom it is meant.”
Similarly, in Dr. Subramanian Swamy v Director CBI (2014) 8 SCC 682, the issue before the Court was whether Section 6-A of the Delhi Special Police Establishment Act, 1946 requiring the CBI to take sanction from the appropriate government before commencing an enquiry against any public servant above the rank of a Joint Secretary is unconstitutional and contrary to the Right to Equality protected under Article 14 of the Constitution. According to the Supreme Court, Section 6-A of the DSPE Act, was unconstitutional for the reason that it created two classes of Government servant with no rational nexus to the purposes of the DSPE Act. The Court did not go into the question of the arbitrariness of Section 6-A but struck it down purely for reason that it created an unreasonable classification with no nexus to the purpose of the Act.
Due to the reasoning adopted, this judgment left open the possibility that the Government simply extends the protection of sanction before beginning inquiries to all Government servants and not just those who are of the rank of Joint Secretary and above. This is the leveling down problem in equality jurisprudence and an unintended consequence of a judicial order that failed to appreciate the greater degree of protection that senior government officers require to perform their professional obligations freely and fairly.
These judgments demonstrate both the potential and pitfalls of the evolving judicial role in economic offences. While such a role carries great promise of ensuring probity and establishes high standards for rectitude in public life, it comes at the cost of the judiciary straying into areas that are beyond their legitimacy thereby leading to several unintended consequences. This is seen clearly from the Subramaniam Swamy case which in its alacrity to strike down a statutory provision, failed to take into account the protection from prosecution necessary for senior officials as envisaged in the Act. As a result, while its intention was lofty, the jurisprudence that it laid down was counter-productive— now, all government officers could also be protected by a sanction requirement before CBI commences investigation, were a law to such an effect passed.
This expansive judicial role is also manifested in a different way— in stricter judicial scrutiny of offences in money-laundering cases, even at the stage of grant of bail. In Union of India (UOI) v. Hassan Ali Khan and Anr., (2011) 10 SCC 235, which involved alleged money-laundering on a large scale, the Court cancelled bail despite the link at that stage between the accused, the large sums of money that had been seized, and possible purposes for which they may be used, being nebulous. It said,
“…It is true that at present there is only a nebulous link between the huge sums of money handled by the Respondent No. 1 and any arms deal or intended arms deals, there is no attempt on the part of the Respondent No. 1 to disclose the source of the large sums of money handled by him. There is no denying the fact that allegations have been made that the said monies were the proceeds of crime and by depositing the same in his bank accounts, the Respondent No. 1 had attempted to project the same as untainted money. The said allegations may not ultimately be established, but having been made, the burden of proof that the said monies were not the proceeds of crime and were not, therefore, tainted shifted to the Respondent No. 1 under Section 24 of the PML Act, 2002. …
…The High Court having proceeded on the basis that the attempt made by the prosecution to link up the acquisition by the Respondent No. 1 of different Passports with the operation of the foreign bank accounts by the said Respondent, was not believable, failed to focus on the other parts of the prosecution case. It is true that having a foreign bank account and also having sizeable amounts of money deposited therein does not ipso facto indicate the commission of an offence under the PML Act, 2002. However, when there are other surrounding circumstances which reveal that there were doubts about the origin of the accounts and the monies deposited therein, the same principles would not apply….”
Again, in Gautam Kundu v. Manoj Kumar, Assistant Director, Eastern Region, Directorate of Enforcement (Prevention of Money Laundering Act) Govt. of India, Criminal Appeal No. 1706 of 2015 (Arising out of SLP (Crl.) No. 6701 of 2015), the Court held:
“… We have heard the learned Counsel for the parties. At this stage we refrained ourselves from deciding the questions tried to be raised at this stage since it is nothing but a bail application. We cannot forget that this case is relating to “Money Laundering” which we feel is a serious threat to the national economy and national interest. We cannot brush aside the fact that the schemes have been prepared in a calculative manner with a deliberative design and motive of personal gain, regardless of the consequence to the members of the society…”
Though these are illustrative examples of the judicial attitude towards bail in PMLA cases, it is clear that in economic offences, the development of jurisprudence of courts has been such that courts have steadily expanded their own power, perhaps filling in for a retreating government, in widening the ambit of economic crimes. The concept of absolute liability for inherently dangerous industries (Oleum Gas Leak case), the widening remit of offences relating to the environment (continuing mandamus in the Godavarman case including a series of contempt orders) and a range of innovative and arguably expansive constitutional remedies (cancellation of all licenses in the 2G spectrum case) are all manifestations of such expansion.
However there is one continuing similarity in the jurisprudence, both in the licence Raj and in the post-liberalisation era—judicial deference in not striking down key legislation as unconstitutional has continued unabated. Like the Bearer Bonds case described above or Delhi Cloth and General Mills v. Union of India, AIR 1983 SC 937where the Court upheld the restriction on companies having to deposit 10% of their maturing deposit in a scheduled bank, government security etc., even in the current scenario, courts are slow to strike down legislation that has a direct bearing on economic matters, including offences, as unconstitutional. In J. Jayalalitha v. U.O.I. & Anr., (1999) 5 SCC 138, the question before the Court was whether Section 3 of the Prevention of Corruption Act, 1988 insofar as it empowered the State Government to appoint as many Special Judges as may be necessary “for such case or group of cases” as may be specified in the notification, was violative of Article 14 for vagueness. Repelling this contention, the Court held:
“…In order to achieve the object of the Act, how many special judges would be required in an area could not have been anticipated by the legislature as that would depend upon various factors. The number of judges required for an area would vary from place to place and from time to time. So also requirement of a separate special Judge for a case or group of cases in addition to the area special judge who could have otherwise dealt with that case or those cases would also depend upon various variable circumstances. Therefore, no fixed rule or guideline in that behalf could have been laid down by the legislature. The legislature had to leave it to the discretion of the Government as it would be in a better position to know the requirement.”
Taken together, the evolving jurisprudence is asign of a legal and judicial system attempting to cope up with the dynamic nature of economicoffencesin post liberalisation India. As is evident, both the nature of such offences in law and judicial approaches to interpretation are changing, attempting to keep up with the ever-changing nature of such crimes themselves. One can only recall the words of the Santhanam Committee Report (1964)which was well ahead of its time in dealing perceptively with economic crimes:
The advance of technology and scientific development is, contributing to the emergence of “mass society” with a large rank and file and small controlling elite, encouraging the growth of monopolies, the rise of a managerial class and intricate institutional mechanisms. Strict adherence to high standards of ethical behavior is necessary for the event and honest functioning of new social, political and economic processes. The inability of all sections of society to appreciate the need, results in the emergence and growth of White Collar Crimes, and renders enforcement of laws, themselves not efficiently deterrent, more difficult. This type of crime is more dangerous, not only because the financial stakes are higher but also because they cause irreparable damage to public morals. Tax-evasion and avoidance, share-pushing, mal-practices in the share market and administration of companies, monopolistic control, usury, under-invoicing or over-invoicing, hoarding, profiteering, sub-standard performance of contracts of construction and supply, evasion of economic laws, bribery and corruption, election offences and mal-practices are some examples of white collar crime.
Today, it is an unarguable fact that this list of economic offences identified by the Santhanam Committee has only increased and become more sophisticated. This is primarily owing to two factors- the quicker march of technological advancement the slower march of the law and jurisprudence. Courts have admirably attempted to fill the gap but their responses too are not based on the level of technical sophistication that is necessary. As a result, jurisprudence in this area has moved from deferential to expansive. This is a necessary but not sufficient condition to combat economic crimes.
This is thus a time for deep introspection and boundless initiative to ensure that the challenges India faces today— sophisticated white collar crime, newer forms of cyber crime and a general rise in complex economic offences can only be met by strong and appropriate responses from the Indian state. This needs the Parliament, Government and Judiciary acting in concert to fulfil the expectations of the people of India. This is an urgent need both to preserve the strength of the Indian economy as well as to ensure a high degree of moral probity in financial matters in public life.
Epilogue
As the economy has transformed from the ‘Licence Raj’ to a liberalised era, the nature of the offences has changed. The world economy has today integrated. Technology is a great facilitator. It also facilitates in economic crime. Money laundering, bank frauds, corruption, market manipulation, taxation frauds, are operations which are frequently seen in the liberalised era. The investigative agencies have to continuously upgrade their skills to be ahead of the perpetrators of these crimes.
I end with a note of caution. The Prevention of Corruption Act, 1988 was a pre-liberalisation law. It fails to distinguish between the corrupt decisions and an erroneous decision. Erroneous decisions which cause loss to the Government, are with the wisdom of hindsight, brought within the purview of the Act. This dissuades civil servants from taking correct and bold decisions in the interest of the economy. Defence purchases, commercial decision making, dis-investment and privatisation are examples of decisions which have suffered on this count. There is, thus, an urgent need to expedite review and amend the Prevention of Corruption Act to bring it in tune with the requirements of the liberalised economy.
Posted on 17 December, 2015, No Comments Comments admin
Free speech is unquestionably a pre-eminent Fundamental Right, but does free speech include the right to speak only falsehood? The Delhi Chief Minister, Mr. Arvind Kejriwal, seems to believe in untruth and defamation, delivered in a language that borders on hysteria.
A few days ago, a Secretary of the Delhi Government was searched and arrested after being caught red handed for allegedly accepting a bribe. The CBI had conducted the operation. The Delhi Government welcomed the move. Four days later, another official close to the Chief Minister was searched for an alleged offence which related to the pre-Kejriwal period. The Chief Minister raised two pleas. First, that it violates the federal structure of the Constitution. In addition, the Chief Minister used unacceptable adjectives against the Prime Minister and, second, he questioned the purpose of the search and tried to divert attention by linking it to the Delhi Cricket body rather than alleged corruption of this official.
Federalism
Federalism is not a one way stream. It is not always that the Union Government challenges the spirit of federalism. A State or a Union Territory, by its unacceptable conduct, can also be a threat to federalism. During the UPA Government, the Delhi Government, with no police or investigative powers, registered an FIR against two Union Cabinet Ministers of the UPA Government for voluntarily implementing a decision of the Cabinet. If State Governments start investigating decisions of the Union Cabinet there can be no greater threat to federalism. Delhi is a Union Territory with no Police powers. I had, on 12th February, 2013, written a blog and, as Leader of Opposition, condemned this violation of federalism by the Union Territory of Delhi.
If the Union Government were to consider using against the Delhi Chief Minister the adjectives that Mr. Kejriwal used against the Prime Minister, it would be legitimate to contend that this is not in consonance with the federal spirit. When two Chief Ministers, Mamata Banerjee Ji and Nitish Kumar Babu, supported Mr. Kejriwal, notwithstanding the use of highly objectionable words against the Prime Minister, can it be in consonance with the federal spirit? The two Chief Ministers need to redeem themselves by publicly distancing themselves from Mr. Kejriwal’s vocabulary.
Now that the heat and dust of the search of an IAS officer’s room has settled down, it is clear that the search had nothing to do with either the Chief Minister or his room. An official was being searched for an alleged offence in his earlier capacities. The CBI has adequately clarified that. Notwithstanding that, an actually false propaganda is being repeated continuously. Why should the Chief Minister place himself as a shield in front of an official who is facing investigation? Why should two eminent Chief Ministers lend themselves to support the blatant falsehood of Delhi’s Chief Minister?
The DDCA
It is a part of propaganda technique to deflect attention when you yourselves are in the dock. Finding himself acting as a shield to cover an officer under investigation, the Delhi Chief Minister has attempted to focus attention on me. He repeats endlessly that I misled the Parliament on the Delhi raid and that he has a series of allegations to make against me in relation to my tenure as President of the DDCA – Delhi’s cricket body. The Congress transiently joined Mr. Kejriwal’s company for the reason that its own leaders are in the dock for more than one reason.
Even though I am not concerned with cricket administration since 2013, a Member of Parliament has been writing to various governmental bodies with regard to Delhi’s cricket affairs. The UPA Government seized upon the opportunity and referred the complaints to the SFIO which investigated all his complaints over a period of time and submitted a detailed Report on 21st March 2013. The Report concluded in relation to the DDCA being registered under the Companies Act, that:-
“thus, in a nutshell, there are certain irregularities / non-compliance or technical violations, but no fraud (was) noticed as alleged”.
These technical and procedural violations were all compoundable and were compounded by Members against whom they were alleged. The SFIO, under the UPA regime, investigated and could not find a shred of evidence against me.
No personal allegation was ever made against me nor did I ever feel the need of contradicting it.
There are fake allegations such as escalation of cost of construction of a stadium. When work expands, cost escalations are integral. A brand new 42,000 capacity world class stadium was constructed by the EPIL, a public sector body at a total cost of around Rs.114 crores. At the same time, the UPA Government renovated two stadiums. The Jawahar Lal Nehru stadium was renovated at a cost of over Rs.900 crores and Dhyan Chand stadium was renovated at a cost of over Rs. 600 crores.
I have felt the need for stating the above in order to counter any unsubstantiated, non-specific allegations. I have left cricket administration in 2013. By referring to some facts of 2014 and 2015, he can’t drag me in.
Posted on 14 December, 2015, No Comments Comments admin
The last Session of the Parliament did not function. The current Session of the Parliament is also threatened with a wash out. The reasons for the wash out of the current Session keep changing by the hour. The nation is waiting for the Parliament to discuss public issues, to legislate and approve a historic Constitution Amendment enabling the GST. All this is being indefinitely delayed. The question we need to ask ourselves is, “are we being fair to ourselves and this country?”
Today, I re-read a speech on the Parliamentary system by Pandit Jawahar Lal Nehru. It was delivered on 28th March, 1957 – the last day of First Lok Sabha. The speech is a must read for all of us. An important paragraph of the speech reads thus:
“Here, we have sat in this Parliament, the sovereign authority of India, responsible for the governance of India. Surely, there can be no higher responsibility or greater privilege than to be a member of this sovereign body which is responsible for the fate of the vast number of human beings who live in this country. All of us, if not always, at any rate from time to time, must have felt this high sense of responsibility and destiny to which we had been called. Whether we were worthy of it or not is another matter. We have functioned, therefore, during these five years not only on the edge of history but sometimes plunging into the processes of making history.”
Those who claim the legacy of Pandit ji must ask themselves the question, what kind of history are they making.
Posted on 10 December, 2015, No Comments Comments admin
The Congress Party, for the past few days, has disrupted both houses of Parliament. Its Goebbelsian propaganda is that the party’s leadership is a victim of political vendetta. What then are the facts?
A company was created for the purpose of starting a newspaper ‘National Herald’. The company got allocation of prime land in several parts of the country. The land was meant to be used for the newspaper business. Today, there is no newspaper. There is only land and built up structures which are being commercially exploited.
A political party is entitled to collect funds for its political activities. For that purpose, it gets an exemption from payment of income tax. Rupees ninety crores from amongst the funds collected by the Congress Party are given to the newspaper company. Prima facie, it can be said that there a breach of the provisions of the Income Tax Act in as much as an exempted income is used for a non-exempt purpose.
The rupees ninety crore debt is then assigned to a Section 25 company for a paltry amount of rupees 50 lakhs. Tax exempted money effectively gets transferred to a real estate company. The real estate company now acquires 99% of the share-holding of the former newspaper company. Effectively, the Section 25 company substantially controlled by the leaders of the Congress Party now owns all the properties acquired for a newspaper publication, and for virtually no consideration, the Section 25 company owns all the assets. This profit will become huge taxable income in its hands.
Since 2012, as a private citizen, Dr. Subramaniam Swamy, alleges a breach of trust. It is the duty of every citizen to report an offence when it comes to his notice. Any citizen can set the process of criminal law into motion. A Trial Court issues summons on Dr. Swamy’s complaint. The accused leaders of the Congress Party move the Delhi High Court for quashing, which grants them an interim protection. Eventually, the Delhi High Court dismisses the petition of the accused. The accused now have two alternatives. They can either challenge the order in the Supreme Court or appear before the trial court and contest the case on merits.
The facts are clear. By a series of financial transactions, the leaders of the Congress Party created ‘Chakravyuh’ for themselves. They have to find their own exit route out of the ‘Chakravyuh’. They have acquired properties worth a huge amount without spending anything. They have used tax exempted income for a non-exempted purpose. They have transferred the income of a political party to a real estate company. They have created huge taxable income in favour of the real estate company. The Government, so far, has not taken any punitive action. The Enforcement Directorate has not issued any notice to them. The Income Tax authorities will follow their own procedure. The Criminal Court, meanwhile, has taken cognizance of the offence. The High Court has agreed with the Trial Court. The battle has to be fought legally. But the results of legal battles are always uncertain. The Congress is, therefore, crying foul and calling it political vendetta. Is that a charge against the Courts? The Government has passed no order in relation to the disputed transactions. There is equality before the law. No one is above the law. India has never accepted the dictat that the queen is not answerable to the law. Why should the Congress Party and its leaders not contest the notice before the Court? The Government cannot help them in the matter, nor can the Parliament. Why then disturb the Parliament and prevent the legislative activity from continuing? The answer to the Congress Party’s leadership landing up in a ‘Chakravyuh’ is to fight their battle legally and not disrupt Parliament. By disrupting democracy the financial web created by the Congress leaders cannot be undone.
Posted on 05 November, 2015, No Comments Comments admin
MEDIA’S RIGHT TO FREE SPEECH
The Constitution gave a pre-eminent position to the Right to Free Speech. Whereas, the other fundamental rights could be restricted through reasonable restrictions, the Right to Free Speech could only be restricted, if the restriction had nexus with any of the circumstances mentioned in Article 19(2) of the Constitution.
India’s post-Constitution history is an evidence of the fact that many Fundamental Rights have seen their weakening in the past sixty five years. The Right to Life and Liberty was literally extinguished during the Emergency. The Right to Trade has been adversely affected in the days of the regulated economy. The Right to Property was repealed during the Emergency.
However, the Fundamental Right of Free Speech and Expression has been consistently strengthened and never narrowed down. So a national policy of expanding and strengthening the right has continuously existed over a period of time.
In the initial years of the Constitution, the Supreme Court held that the excessive license fee for starting a newspaper was constitutionally invalid. Subsequently, in the very first decade, it was held that the Wage Board imposing an unbearable burden on a media organization, would offend Free Speech.
Can the business or commercial interest of a newspaper be segregated from the Right of Free Speech? Would the business of a newspaper fall within the domain of the Right to Free Trade or would it impact on the Right to Free Speech?
In the Sakal newspaper’s case, the Supreme Court was concerned with the policy imposed in 1960, wherein the government decided to regulate the selling price of a newspaper. The sale price would depend on the number of pages. The Government contended that it was only restricting the Right to Trade by a reasonable restriction in consumer interest.
The Supreme Court held that, if a newspaper was compelled to raise its price on account of the thickness of the newspaper it would have two consequences, either the thickness, i.e. the content would be reduced or alternatively, a newspaper would be compelled to raise its price, and, there was empirical evidence to suggest that an increase in price leads to loss in circulation. Thereby, the Right to Circulate is also a part of Free Speech.
Similarly, when the Government restricted the size of a newspaper on the ground that newsprint was scarce on account of paucity of foreign exchange and excessive imports would lead to an outgo of foreign exchange, the Supreme Court held that curtailing the number of advertisements in a newspaper would impact Free Speech, since advertisements themselves supplement the cost of content.
In a landmark judgement in the newsprint customs duty case, the Court was confronted with the question whether imposition of customs duty on newsprint can be challenged on the ground of it being “Tax on knowledge”. The court held that the business of a newspaper could never be segregated from its content.
In the Constituent Assembly, Ramnath Goenka had raised the issue that future Governments would not resort to crude methods like censorship but would pinch the pockets of the newspapers. Agreeing with this view, the Court held that newspapers shape the human mind, excessive tax on a newspaper itself could impact Free Speech if the purpose of the tax was not merely to raise revenue but to excessively burden the economy of the newspaper.
In the case of any trade, business or profession, taxation would be struck down only if it is confiscatory in nature, that is, if it makes the business impossible. But in the case of a media organisation, if it adversely impacts the right to free speech, that is, makes it excessively costly and prohibitive, then the tax itself can be challenged as an invasion of free speech.
Most other democracies have not accepted the American precedent, but we in India went ahead and accepted this particular right. I think in its entire evolution, the customs duty case — in its exposition of law and expanding the right — became a landmark, in that the distinction between the business of free speech and the right of actual content of free speech itself, was obliterated.
Carrying this logic further, the Supreme Court, in the Tata Yellow Pages case, included commercial Free Speech, i.e. advertising, to be a part of Free Speech. This proposition is still doubtful, since it could enable “paid” news to take the benefit of commercial speech being a part of Free Speech.
Paid news is a reality, and therefore if you follow the dicta of the American judgments which Tata Press has followed in India, will free speech also provide a right which extends to paid news? Obviously it does not sound logical, and therefore this issue has not come up before the courts. However, if there was to be a penal provision against paid news, it would have to be tested on the touchstone of whether it violates free speech or not.
Posted on 01 November, 2015, No Comments Comments admin
The World Bank has upped India’s ranking in the Ease of Doing Business by twelve positions. Last month the World Economic Forum had similarly upgraded India. Even though the push up numerically is modest, it marks the reversal of an adverse trend. Considering the number of steps taken in the last seventeen months, India’s position should have moved significantly higher. I understand that all steps have not been factored in since the World Bank criteria has a cut-off date and it also waits for announcements to translate into action before they can be factored. Quicker decision making, faster policy changes, eliminating corruption at the top and smoother clearances have played a significant role. The FIPB clearances and the environmental approvals are being routinely granted. Investors no longer queue up before the Mantralayas in Delhi lobbying for policy changes or approvals.
An equally encouraging factor is that the States have also altered their work culture. Investment is the starting point of all economic activity. An investment friendly State will be a natural destination. This realization has donned upon the States. Competitive federalism can be seen. The Gujarat model of Global Investors Meet has been replicated in Tamil Nadu, Madhya Pradesh, West Bengal and in Punjab. Rajasthan, this month, would be wooing global investors. Telangana and Andhra Pradesh have been reaching out to investors globally. Three States with a significant tribal population – Chhattisgarh, Jharkhand and Odisha, figure in the top six States in the World Bank Ease of Doing Business rankings. The work culture is changing in most States.
Last week the Central Government issued two important ordinances. The Arbitration Law has been changed to make arbitrations cheaper, faster and free from judicial intervention. To adjudicate quickly upon investment related matters, a commercial division is being constituted in all High Courts. This would improve the enforceability of contracts where India’s ranking is relatively poor. The obsolete Specific Relief Act which provides for damages as the normal remedy rather than enforcement, needs to be relooked. Having opened most sectors for foreign direct investment, time has come to examine whether some of the conditionalities on which FDI investment is permitted, have become anachronic. We need to cut down on the number of permissions required so that the time lag between the decision to invest and the actual investment can be shortened significantly. States must realise that local laws which enable availability of land, environmental permissions, sanction of building plans need a relook. Once an industrial zone or new township has been cleared for environmental sanctions, should individual structures require a separate environmental approval? Many countries have switched to an architect’s certificate as a substitute for building plans being sanctioned. When you compulsorily need a completion certificate for a building, the permission required for start of construction should be replaced by a regulatory mechanism. These additional changes will further improve India’s ranking for ease of doing business.
The ease of opening business must also be accompanied by an ease in exiting. For this, the framework of the Bankruptcy Law is being readied. Dispute resolutions with regard to public projects requires a quicker settlement mechanism. The same is being worked out.
Much has been done to ensure that award of natural resources and public contracts are completely transparent. To empower public servants to take simpler and bolder decision, many corrections are required in some obsolete provisions of Prevention of Corruption Act. The same have already been introduced in Parliament. At a time when the world growth is moving slowly, India aspires to grow faster. To add a percentage or two in our present growth rate, the ease of doing business coupled with a simpler direct and indirect taxation system, a higher investment in infrastructure and irrigation will play a significant role. A low oil and commodity regime is helping us in this direction.
While the Government led by Prime Minister Shri Narendra Modi is trying to accelerate India’s growth, there are many who have never intellectually accepted the idea of the BJP being in power. This obviously includes the Congress, many left thinkers and activists. Over decades they have practiced ideological intolerance towards BJP. Since 2002, the Prime Minister himself has been the worst victim of these ideological intolerance. Their strategy is twofold. Firstly, obstruct Parliament and do not permit reforms which will bring credit to Modi Government. Secondly, create, by structured and organized propaganda, an environment that there is a social strife in India. They wish to project India as an intolerant society. The truth is otherwise. Perpetrators of this propaganda never allowed alternative viewpoints to grow in either universities, academic institutions or cultural bodies that they have controlled. Their intolerance extends to not accepting an alternative ideological pole. Dadri was a stray incident. It was both unfortunate and condemnable. The guilty will be taken to task. Notwithstanding such aberrations, India remains a highly tolerant and liberal society. Our cultural values have imbibed co-existence. India has repeatedly rejected intolerance. It does not respond to provocations. It is, therefore, incumbent upon every well-wisher of India and the present Government to make sure that no action or statement of his provides a tool in the hands of those who want to obstruct India’s growth story. The obstructers have a simple plan – if they can’t fight politically, they fight with hostile propaganda.