(1) Deposit Condition in DRTs
Many
of our new clients inform that in their DRTs, the advocates and
judges are insisting for initial deposits at the time of filing of
the written statement or for granting the stays. We have repeatedly
informed that such conditions are illegal. The relevant facts and
law are as under:-
(a) Prior
to 2004, in DRT Act 1993, there was a condition of deposit at the
stage of filing of written statement but after the SC Judgement in
the matter of Mardia Chemicals, the said condition of deposit was
removed and the Act was amended. Hence no deposit is required to be
made at the time of filing of the written statement by the borrower.
(b) If
the borrower has filed the counter-claim and if the said
counter-claim is more than the claim of the bank, there is no need
of submitting any stay application and hence there is no question of
any deposit.
(2) Counter-claim is a must in DRTs
We
have repeatedly informed that without counter-claim, the defence of
the borrowers and guarantors in DRTs is incomplete. In almost all
the cases, it is found that such counter-claim is much more than the
claim of the banks and hence prima facie there is ‘No Debt Due’.
Under such facts and circumstances there can not be any recovery
till the said ‘No Debt Due’ condition is finally decided by the DRTs.
Such decision needs proper adjudication which will take a very long
time.
(3) DRT is a Trial Court
We
have repeatedly informed that DRT is a trial court where proper and
full trial has to take place to ascertain the facts. The said facts
are contained in documents which are in power and possession of the
banks. Hence all the relevant documents are required to be produced,
inspected and brought on record. This will itself will take long
time and by this process only the wrong doings of the banks and
hence the consequent counter-claim will be proved.
(4) Video Recording in DRTs
We
have repeatedly informed that the video recording in DRTs should be
commenced. In fact as early as 2007, we demonstrated the complete
process and system before the District Judge, Indore and it was
appreciated by him. This was reported to the High Court and the
Supreme Court but till date it has not been introduced. Recently Mr
Mathews and his team has done commendable work in this direction and
the day is not far when we will have video recording in court rooms.
(5) The above matters are the Highlights of this 400th Issue
of our Weekly Mail
With
this 400th issue
of DRT Weekly mail, we are completing a history unmatched by any
organization in the field of defence of the borrowers and guarantors
and hence we have brought out the above important matters on this
historic occasion. In this connection we have received several mails
and phone calls. One of such mails is reproduced below:-
--------- Forwarded message ----------
From: Rohit
tibrewal <rohit.tibrewal14@gmail.com>
Date: Wed, Feb 3, 2016 at 8:35 AM
Subject:
To: Ram Kishan <ramkishandrt@gmail.com>
Dear Sir
Your mails are really helpful guides. They reflect that success is
hard work, dedication to the job at your hand and the determination
that whether win or lose, apply the best to the task at hand. The
will to win is important but the will to prepare is vital, your
mails are really mentor, they are lights and guides in darkness.
Sir, your talent is gods gift, what you are doing is gifting back to
god.
DRT Solutions Weekly Mail – 399th Issue
dated 29th January
’16
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) Draft
Insolvency and Bankruptcy Bill 2015
The
following news item is self explanatory:-
Joint
Parliamentary Committee invites Comments on the Draft Insolvency and
Bankruptcy Bill, 2015
Knn
India
http://knnindia.co.in/economy/joint-parliamentary-committee-invites-comments-on-the-draft-insolvency-and-bankruptcy-bill,-2015/2-13566.go
New Delhi, Jan 27 (KNN) The
long awaited Bankruptcy Code has reached the crucial stage of
approval by the Parliament of India.
The Code prepared by the Vishwanathan Committee and approved by the
Cabinet was placed before the Parliament and the House of People has
decided to refer it to a Joint Parliamentary Committee.
By a recent notification the JPC secretariat has asked comments of
the stakeholders by 10th February, 2016.
The draft Insolvency and Bankruptcy Code must be considered as a
watershed development for ‘Easing of Doing Business’.
The Insolvency and Bankruptcy Bill, proposed by the Vishwanathan
Committee, fulfils a long standing demand from the Industry and
business for an legal environment facilitating easy exit from a
non-viable venture.
Structured on the model of U S Bankruptcy Code, the greatest
contribution of the proposed Act, if enacted, will be repelling of
draconian Presidency Towns Insolvency Act, 1909 and the Provincial
Insolvency Act, 1920 under which the straight path for an insolvent
was prison.
The cornerstones of the proposed act are the transparent processing
of the bankruptcy / insolvency case and stipulation of strict time
frame for the entire process.
The draft Bill proposed a total time frame of 180 days for closure
of any bankruptcy / insolvency proceeding, which in certain cases
could be closed in straight 90 days.
The draft even proposes the maximum number of days an Bankruptcy /
Insolvency Adjudication Authority may take at each stage to dispose
of the matter thus overriding long pendency in judicial procedures.
.
The real paradigm shift proposed in the draft Bill is in the
treatment of the Proprietary and Partnership firms, which
constitutes nearly 99% of the MSME sector in India.
While some legal framework already exists for the Bankrupt/
Insolvent corporate entities; for the non-corporate firms any
failure of the entity meant lifelong hassles for the owner(s).
While there are quite a few laudable initiatives under the proposed
Act, there are also issues of concern particularly regarding
treatment of Bankrupt/ Insolvent non corporates to which category
the Indian MSMEs predominantly belong.
The existing Debt Recovery Tribunals (DRT) have been proposed to be
the Adjudicating Authorities in relation to insolvency matters of
individuals and (partnership) firms. With their present focus on
expeditious adjudication and recovery of debts due to banks and
financial institutions, how these institutions will be able to take
a balanced view on the creditors’ and debtors’ interests, is a big
question.
The experiences of majority MSMEs are these DRTs mostly take care of
the Bankers’ interests.
The draft Bill also specifies the crucial role of processing the
Insolvency / Bankruptcy application from an individual / firm and
preparation of the ‘Repayment Plan’ to the Resolution Professional.
In India today, where there is not much expertise available on
Insolvency resolution and large number of Non-Performing Assets of
the Banks, availability of required number of Resolution
Professionals to expeditiously process the Insolvency cases will be
a big question.
Another glaring lapse, according to the experts, in the proposed
Bill is while the archaic Bankruptcy Acts have been proposed to be
repealed, the two more recent Acts, viz., Recovery Of Debts Due To
Banks And Financial Institutions Act, 1993, popularly known as DRT
ACT and Securitisation And Reconstruction Of Financial Assets And
Enforcement Of Security Interest Act, 2002, popularly known as the
SARFAESI Act, have been left intact.
Both these acts are at present the principal tools of the Banks, who
in most cases are the predominant creditors of any entity, corporate
and non- corporate, for realisation of debts and with the enactment
of the proposed Insolvency and Bankruptcy Bill should become
infructuous.
(2) Denied
Justice, Dalit wants to Give Up Indian Citizenship
The
following news item is self explanatory:-
Denied justice, dalit family wants to give up Indian citizenship
Ashish Chauhan | TNN | Jan 24, 2016, 01.30 PM IST
http://timesofindia.indiatimes.com/city/ahmedabad/Denied-justice-dalit-family-wants-to-give-up-Indian-citizenship/articleshow/50704885.cms
Ahmedabad: In a shocking case of apathy , a dalit family has offered
to give up their Indian citizenship because they are being deprived
of their constitutional right to justice --in a case of
land-grabbing by local strongmen of their Sabarkantha village. This
offer comes after more than four letters from the CM, eight from the
Gujarat governor, two from the DGP , four from the social welfare
minister and 50 from various state secretaries, who have not yet
been able to help them.
Chandu Nadiya (42), a native of Ahmedpura village of Talod taluka of
Sabarkantha district, had in 2007 found that his ancestral land
measuring around 30 bighas (71,340 square metres) was transferred to
four people from the same village. They began a legal fight to get
their land back, but they would not have imaging that this would
multiply their miseries.
Nadiya had in 2011first approached the local authorities like the
mamlatdar, deputy collector and the revenue department, but as no
relief came, they moved to the Special Investigation Team (SIT) for
land cases and the revenue tribunals. However, the SIT order went
against them, stating that the case has been disposed in the Supreme
Court.
When the aggrieved persons filed an RTI inquiring in such an SC
order, the reply stated that the case had never reached the apex
court. One SIT member wasn't even present on the day of verdict, on
July 24, 2014.
Following this setback, the victim started approaching the state
secretaries of the social welfare and revenue departments, and the
authorities ordered that action be taken against those responsible
and the state government employees involved in the case. Again, no
actions were initiated. This led the farmer to approach the director
general of police (DGP), who on June 20 directed the filing of an
FIR against all the accused. However, that too remained unheard by
the district authorities.
Nadiya then wrote eight let ters to
Governor O P Kohli. Fed up, the dalit man sought euthanasia for him
and his family including his wife, two daughters aged 12 and five
respectively and his three-year-old son.Kohli also directed that
stern action be taken in the case, but it did not get any response.
At last, Nadiya wrote four letters to chief minister Anandiben
Patel, seeking action in this case. However, the authorities have
remained unmoved. Nadiya then wrote to the CM again, stating that he
has become a victim of `intolerance' and offered to give up his
citizenship.
When contacted, Nadiya said, "There is no meaning to keeping such
futile documents like voters' ID card or ration card, when we are
not given constitutional rights. Even the CM's orders are not
followed, so there is no option left for me.So, as a final protest,
my family and I can give up our citizenship."
Sabarkantha district collector P Swaroop denied the dalit family's
charge as "just misrepresentation of facts." "The land was earlier
belonging to them, but they had long ago sold it to other people.
When the issue went to the social justice and welfare department, we
gave a proper reply that the land did not belong to Nadiya.The case
was decided at the mamlatdar level twice and once at the collector
level," added Swaroop.
DRT Solutions Weekly Mail – 398th Issue
dated 22nd January
’16
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) SC
– SARFAESI can not override Rent Control Laws
The
following news item is self explanatory:-
SARFAESI Act cannot override Rent Control Laws; Tenants cannot be
evicted using provisions of SARFAESI Act: Supreme Court By:
Ashok KM | January 21, 2016
http://www.livelaw.in/sarfaesi-act-cannot-override-rent-control-laws-tenants-cannot-be-evicted-using-provisions-of-sarfaesi-act-supreme-court/
A tenant cannot be arbitrarily evicted by using the provisions of
the SARFAESI Act as that would amount to stultifying the statutory
rights of protection given to the tenant. A non obstante clause
(Section 35 of the SARFAESI Act) cannot be used to bulldoze the
statutory rights vested on the tenants under the Rent Control Act,
the Court said.
In a significant ruling, Supreme Court of India has held that the
provisions of the SARFAESI Act cannot override the provisions of the
Rent Control Act. Apex Court Bench comprising of Justices V. Gopala
Gowda and Amitava Roy, in Vishal N. Kalsaria vs. Bank of India, said
that non obstante clause as in section 35 of the SARFAESI Act cannot
be used to bulldoze the statutory rights vested on the tenants under
the Rent Control Act.
Context The Appellants were the tenants occupying the property
mortgaged in the Bank. Since the landlord defaulted payment of dues,
the Bank proceeded under SARFAESI Act, and the Magistrate allowed
the application of the bank seeking possession of the mortgaged
properties which are in actual possession of the Appellant. The
Appellants approached Small causes court and the court passed an
interim injunction against obstructing the possession of the
appellant over the suit premises during the pendency of the suit.
The Appellants, as interveners, then filed an application as an
intervener to stay the execution of the order of Magistrate which
was refused. Relying on ‘Harshad Govardhan Sondagar v. International
Assets Reconstruction Co. Ltd.’, the Magistrate held that when the
secured creditor takes action under Section 13 or 14 of the SARFAESI
Act to recover the possession of the secured interest and recover
the loan amount by selling the same in public auction, then it is
not open for the Court to grant an injunction under Section 33 of
the Rent Control Act. The Magistrate also held that order passed in
Rent suit cannot be said to be binding upon bank. The tenants
approached Supreme Court. SARFESI Act cannot override Rent Control
Laws The Apex Court held that a landlord cannot be permitted to do
indirectly what he has been barred from doing under the Rent Control
Act, more so when the two legislations, that is the SARFAESI Act and
the Rent Control Act operate in completely different fields.
Rejecting the contention of the Bank that the SARFESI Act override
provisions of Rent Control Act, the Court said that if it were to be
accepted, it would render the entire scheme of all Rent Control Acts
operating in the country as useless and nugatory since tenants would
be left wholly to the mercy of their landlords and in the fear that
the landlord may use the tenanted premises as a security interest
while taking a loan from a bank and subsequently default on it. A
landlord would simply have to give up the tenanted premises as a
security interest to the creditor banks while he is still getting
rent for the same. In case of default of the loan, the maximum brunt
will be borne by the unsuspecting tenant, who would be evicted from
the possession of the tenanted property by the Bank under the
provisions of the SARFAESI Act. Under no circumstances can this be
permitted, the Bench said. Harshad Govardhan Sondagar case
misinterpreted The Court also said that decision in Harshad
Govardhan Sondagar case cannot be understood to have held that the
provisions of the SARFAESI Act override the provisions of the Rent
Control Act, and that the Banks are at liberty to evict the tenants
residing in the tenanted premises which have been offered as
collateral securities for loans on which default has been done by
the debtor/landlord. The Court said ‘Random sentences have been
picked up from the judgment and used, without any attempt to
understand the true purport of the judgment in its entirety’ In
Harshad Govardhan Sondagar case, the Apex Court had held that where,
however, the lawful possession of the secured asset is not with the
borrower, but with the lessee under a valid lease, the secured
creditor cannot take over possession of the secured asset until the
lawful possession of the lessee gets determined. Tenant can only be
evicted under Rent Control Laws. The Court also observed that tenant
can be evicted only after following the due process of law, as
prescribed under the provisions of the Rent Control Act. A tenant
cannot be arbitrarily evicted by using the provisions of the
SARFAESI Act as that would amount to stultifying the statutory
rights of protection given to the tenant, the Bench said. The Court
also said that in view of the Rent Control Act, the onus to get such
a deed registered is on the landlord and hence neither the landlord
nor the banks can be permitted to exploit the fact of
non-registration of the tenancy deed against the tenant. Section 35
SARFESI Act only extends to Laws operating in same field. A non
obstante clause (Section 35 of the SARFAESI Act) cannot be used to
bulldoze the statutory rights vested on the tenants under the Rent
Control Act. The expression ‘any other law for the time being in
force’ as appearing in Section 35 of the SARFAESI Act cannot mean to
extend to each and every law enacted by the Central and State
legislatures and It can only extend to the laws operating in the
same field, the Court held.
(2) Making
Indian Arbitration Effective
The
following news item is self explanatory:-
Making Indian
arbitration effective
Amendments to the Arbitration Act could boost investors’ confidence
in India
By: Alipak
Banerjee and Vyapak
Desai | January
15, 2016 2:15 AM
Due to certain controversial decisions made by the Indian judiciary
in the last decade—especially in cases involving a foreign
party—investors have kept a close watch on the development of
arbitration laws in India. They have often criticised the judiciary
for its interference in international commercial arbitration and
extraterritorial application of domestic laws to awards obtained
outside the country. Foreign investors and corporate entities
considered it as a major risk factor for doing business in India. In
fact, the delay in the judicial process led to the first investment
arbitration claim against the country in the White Industries vs the
Republic of India case, where the Republic of India was directed to
pay a hefty sum by the arbitral tribunal.
In 1996, the Arbitration and Conciliation Act, 1996, was passed with
the optimism that it would bring in winds of change, but fell into a
chasm of its own. A number of decisions from the courts slowly but
surely ensured that the preferred seat in any cross-border contract
was always a heavily negotiated point and, more often than not,
ended up being either Singapore, New York or London—the established
global arbitration centres.
However, developments in arbitration jurisprudence through recent
court decisions have now shown the support of the judiciary in
enabling India to adopt international best practices. Never before
has one seen so many pro-arbitration rulings by the Indian courts.
From 2012 to 2015, the Supreme Court delivered various landmark
rulings showing a much-needed pro-arbitration approach, such as
declaring the Indian arbitration law to be seat-centric; removing
Indian judiciary’s power to interfere with arbitrations seated
outside the country; referring non-parties to an arbitration
agreement to settle disputes through arbitration; defining the scope
of public policy in foreign-seated arbitration; and determining that
even fraud is arbitrable.
In furtherance to measures taken by the Indian government in support
of the ‘ease of doing business’, after two aborted attempts in 2001
and 2010 to amend the arbitration law, on October 23, 2015, the
President promulgated the Arbitration and Conciliation (Amendment)
Ordinance, 2015. The amendments incorporated the essence of major
rulings passed in the past two decades, including most of the
recommendations of the 246th Law Commission Report, and clarified
the major controversies that arose in recent years.
Thereafter, on January 1, 2016, the Arbitration and Conciliation
Amendment Act, 2015, was notified in the official gazette, which
amended the provisions of the 1996 Act prospectively. The amendments
are aimed at taking drastic and reform-oriented steps to bring the
Indian arbitration law on a par with global standards and provide an
effective mechanism for resolving disputes with minimal court
interference. The amendments came into effect keeping in mind the
objective of the Act to provide a speedy and cost-effective dispute
resolution mechanism which would give finality to the parties.
In tune with arbitration-friendly jurisdictions, the amendment Act
has introduced a fast-track procedure where arbitrations can be
completed expeditiously. The arbitral tribunals have been given a
12-month time-line for completion of arbitrations seated in India,
which can be extended by six months with the consent of the parties.
This time-line is stricter than the average time taken for an
arbitration in any other jurisdiction, which is usually about 18-24
months. The amendment Act has gone a step further by prescribing
time-lines for expeditious disposal of arbitration applications
which are required to be filed before courts, in aid of the
underlying arbitration.
The amendment Act has also introduced significant changes by giving
the parties the flexibility to approach Indian courts for interim
relief in aid of foreign-seated arbitrations, which reverses the
position rendered by the ruling in Bharat Aluminum Co vs Kaiser
Aluminum Technical Service Inc on this issue. In accordance with
international standards, the ‘costs follow the event’ regime has
been introduced, which will help in reducing filing of frivolous
claims. In addition, the tribunal’s power to grant interim
protection has been made akin to the powers of the court, thereby
encouraging the parties to take recourse before the arbitral
tribunal. It will, in effect, reduce the burden on the court which,
in any case, is suffering from a huge backlog of cases. In order to
streamline the process, interim orders passed by tribunals seated in
India will be deemed to be the order of court and thus enforceable.
Arbitration thrives on the principle of integrity, independence and
impartiality of the arbitrators. To that effect, guidelines and
detailed schedules on ineligibility of arbitrators have been
introduced by the amendment Act, which is undoubtedly commendable
and brings Indian law on a par with international standards.
As India was viewed as a jurisdiction which offered excessive
judicial interference, the grounds on which awards arising out of
international commercial arbitrations seated in the country may be
challenged has been limited. In addition, contrary to the previous
position, the amendment Act has mandated no more automatic stay on
filing a challenge to an arbitral award in absence of a specific
order from court.
The amendments are salutary with an aim to make India an attractive
investment destination, but it may not be possible to adhere to all
the strict standards prescribed. For example, in a complex
arbitration, it may not be possible to complete the entire
arbitration within 12 months and, therefore, we will see more
applications being filed before the courts for extension of time.
Further, by giving the amendment Act prospective effect, the
amendments would not be applicable on the existing arbitrations
which have commenced before October 23, 2015; it thereby reduces the
immediate impact of such amendments. The appointing authority for
arbitrators (i.e. in absence of party-nominated arbitrators) is
still the court and any recourse to the courts adds on to their
burden, which, in any event, are suffering from pendency of cases.
Instead, a nationwide institution could have been established to
administer and also act as appointing authority from a larger pool
of practitioners who have experience in dealing with complex
disputes. Independent of the amendments, there is also an urgent
need to introduce a change in the mindset and culture in the way
arbitrations are conducted in India to make it an efficient and
effective alternate dispute resolution mechanism.
The year 2015 saw a huge rise in cross-border transactions in the
country. The Competition Commission of India saw a record filing of
115 merger and acquisition cases—the highest registered in a
calendar year—and even foreign direct investment went up by 40%.
Therefore, the amendment Act is a step towards the right direction
and will help promote ease of doing business in India, thereby
boosting investor confidence.
DRT Solutions Weekly Mail – 397th Issue
dated 8th January
’16
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) Insolvency
Resolution System
The
following news item is self explanatory:-
A robust insolvency resolution system can speed up loan recovery for
banks
BL RESEARCH BUREAU:
Banks can now hope to recover more from their bad loans, if the Bill
to consolidate and amend all laws relating to insolvency resolution
is passed in the Lok Sabha. Currently, banks take as long as 15
years in certain cases to recover their money, which substantially
erodes the value of the assets.
According to a World Bank report, it takes, on an average, more than
four years to wind up a company in India, which is more than twice
the time taken in China and in the US (1.5-1.7 years). In the
process, creditors in India recover only 25 cents to a dollar,
compared to 36 cents in China and a substantial 80 cents in the US.
The proposed legislation — the Insolvency and Bankruptcy Code 2015 —
which fixes a time limit of 180 days, for completion of the
insolvency-resolution process, can be a huge positive for the
banking sector.
The main reason for the delay in the bankruptcy process in India has
been the existence of multiple laws governing insolvency According
to KV Karthik, Partner, Financial Advisory Services, Deloitte Touche
Tohmatsu India LLP, in India, besides the Companies Act, 2013,
bankruptcy is dealt with by three major legislations — the Sick
Industrial Companies (SICA), the Recovery of Debts due to Banks and
Financial Institutions Act, 1993 (RDDB Act) and the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI).
Different agencies
“As a result, four different agencies — High Courts, Company Law
Board, the Board for Industrial and Financial Reconstruction (BIFR),
and the Debt Recovery Tribunals (DRTs) — have overlapping
jurisdiction. This tends to cause delays in the process. A
well-drafted bankruptcy law can overcome these challenges,” he says.
A resolution time of 180 days, as proposed under the new Bankruptcy
Law, should also give banks leeway to secure a significant portion
of the receivables. “Most banks prefer to be secured creditors and
would have disbursed loans against receivables or inventory.
By the time the recovery proceedings can be initiated by the bank,
the value of these receivables/ inventories or assets tend to
depreciate significantly in value, leading to poor recovery for the
banks under the existing system,” says Karthik.
Under the proposed Bankruptcy Law, lenders also do not have to wait
until a loan is declared as stressed or to has turned bad to trigger
the process of financial and other re-structuring. “They can take
action at the early stages when stress is observed, such as when a
financial default occurs,” adds Kathik.
The new resolution process also involves resolution professionals
who will work along with a committee of creditors, thereby giving
creditors a say in the process.
The other interesting aspect is that the code allows the corporate
debtor itself to initiate the insolvency-resolution process once it
has defaulted on a debt.
“It is a huge benefit for the economy as a whole. It allows room for
shutting down a business if things go wrong. So, an entrepreneur is
given a chance to move on and lenders are also paid off,” says
Jaideep Iyer, Group President - Financial Management, YES Bank.
Inefficacy of DRTs
Often liquidating assets to pay off debt is also delayed because
banks are unable to agree among themselves regarding the sale of the
assets.
The new code designates the National Company Law Tribunal (NCLT) and
DRT as the adjudicating authorities for corporates and individuals,
respectively, for resolution of insolvency. This can help reduce
conflicts between lenders.
“If there is a bankruptcy code which is properly drafted and allows
both lenders and borrowers to ensure that the insolvency resolution
happens in 180 days then it is a huge positive for the banking
sector. That along with strategic debt restructuring and other tools
will help banks reduce the stress on their balance sheets,” says
Iyer. He adds that under the existing structure the resolution gets
dragged on for infinity. The existing DRTs are also not effective
due to lack of expertise and staffing.
(2) Procedure for Judges’ Appointments
The
following news item is self explanatory:-
CONSTITUTION, JUDICIARY HELP INDIAN DEMOCRACY BLOSSOM’
Saturday, 19 December 2015 | PNS | BHUBANESWAR | in Bhubaneswar
http://www.dailypioneer.com/state-editions/constitution-judiciary-help-indian-democracy-blossom.html
Democracy has taken roots in India because of its Constitution and
strong judiciary, said former judge of Orissa High Court Justice AS
Naidu said on Thursday.
“India’s Constitution is one of the best in the world and its
judiciary unbiased and strong. This has helped the country remain
strong in spite of its diversity,” he observed at Legal Spectra-
2015, the 3rd All India Legal School Meet organised by the SOA
University.
The fact that the Indian Constitution has undergone many amendments
only points to the fact that the Constitution is living and not
static, he said, adding that several landmark judgements of the
Supreme Court have helped the country’s thought process.
Advocate General Surya Prasad Mishra and Utkal University of Culture
Vice-Chancellor Prof Debendranath Jena attended the programme as
guests of honour. Former OUAT Vice-Chancellor Prof DP Ray of
presided.
Students representing ten law schools from across the country are
participating in the four-day meet.
Justice Naidu referred to ten landmark judgements of the apex court
which included the Keshavananda Bharati case, the Shahbano case and
the Indira Sawhney case saying they redefined the path that India
needed to pursue. Law students must be aware of such judgements, he
said.
The Keshavananda Bharati judgement, he said, held that the
Parliament can amend any part of the Constitution as long as it does
not alter the basic structure of the Constitution. In the Shahbano
case, the court awarded alimony to a Muslim woman after divorce even
when the Personal Law was against it.
The other cases he referred to included the right to life case
involving Maneka Gandhi, the Olga Telis case, the Union Carbide
case, the Nirabati Behera case concerning custodial violence,
judicial appointment case, the Visakha case and the Aruna Shanbaug
case.
DRT Solutions Weekly Mail – 396th Issue
dated 18th December
’15
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) Procedure for Judges’ Appointments
The following news item is self explanatory:-
Supreme Court leaves it
to Centre to draft procedure for judges’ appointments
The final order reaffirms the primacy of the CJI, and at the same
time abstains from issuing directives that had to be binding also on
the CJI and the four seniormost judges in the collegium.
Written
by Utkarsh
Anand | New Delhi | Published:December
17, 2015 1:47 am
http://indianexpress.com/article/india/india-news-india/supreme-court-leaves-it-to-centre-to-draft-procedure-for-judges-appointments/
Exactly two months after it quashed the proposed National Judicial
Appointments Commission (NJAC), the Supreme Court on Wednesday
refrained from issuing any positive directive to improve the
collegium system and left it to the Centre to consult the Chief
Justice of India for drafting a new memorandum of procedure for
judges’ appointments.
Listing out “only broad suggestions for consideration”, a
constitution bench led by Justice J S Khehar agreed with Attorney
General Mukul Rohatgi that preparing a memorandum of procedure for
appointments in the higher judiciary fell in the executive’s domain,
and the nine-judge benches had also left the task to the government.
The nine-judge benches in Second Judges and Third Judges case in the
1990s had accorded primacy to the Chief Justice of India in making
judicial appointments so as to ensure independence of the judiciary
while assigning to executive the bureaucratic task of drafting the
memorandum of procedure in terms of its directions.
On Wednesday, the five-judge bench also clarified that there has to
be “faithful implementation of the principles laid down in the
Second Judges case and the Third Judges case” in case the new
memorandum is drafted. It connotes that the government will have no
leeway to introduce any element of surprise in the memorandum since
it will have to pass the CJI’s muster, besides conforming to other
principles enumerated in the 1990s rulings.
“The Government of India may finalise the existing memorandum of
procedure by supplementing it in consultation with the Chief Justice
of India. The Chief Justice of India will take a decision based on
the unanimous view of the collegium, comprising the four seniormost
puisne judges,” said the bench.
The CJI and four seniormost judges comprise the collegium, which has
been persistently criticised for being opaque and lacking
guidelines. While quashing by 4:1 majority constitutional amendment
and the proposed NJAC, which was to replace the collegium system,
the bench had embarked upon the ancillary exercise of improving the
collegium as three of the five judges on the bench also criticised
the existing system.
The Centre, state governments, lawyers’ bodies and petitioner
lawyers such as Fali S Nariman and Anil Divan were heard by the
constitution bench, which also comprised Justices J Chelameswar,
Madan B Lokur, Kurian Joseph and Adarsh K Goel.
The final order reaffirms the primacy of the CJI, and at the same
time abstains from issuing directives that had to be binding also on
the CJI and the four seniormost judges in the collegium. Further,
the bench sought to strike a balance with suggestions relating to
eligibility criteria, procedural transparency, a secretariat of
collegium and complaint redressal mechanism, although underlining
that additional measures in the new memorandum must come “without
sacrificing the confidentiality of the appointment process” and only
in terms of judgments in Second Judges and Third Judges cases.
The new memorandum, the court said, may indicate certain eligibility
criteria, such as minimum age of judges, and criteria for
consideration along with the procedure to be made available on the
website of the court concerned and on the website of the Department
of Justice of the central government.
On transparency, the bench said minutes of collegium meetings along
with dissenting opinion by judges on names may be recorded “while
making provision for confidentiality of minutes consistent with the
requirement of transparency in the system of appointment”.
For better management of the system of appointment of judges, the
memorandum may provide for the establishment of a secretariat for
each high court and Supreme Court and prescribe its functions,
duties and responsibilities, said the court.
(2) Judiciary Space Issues
The following news item is self explanatory:-
Stop-gap arrangements won't solve judiciary's space issues: Bombay
HC
Monday, 14 December 2015 - 5:45am IST
http://www.dnaindia.com/mumbai/report-stop-gap-arrangements-won-t-solve-judiciary-s-space-issues-bombay-hc-2155284
The High Court had recently directed the Union ministry of finance (MoF)
to approach the Mumbai Port Trust (MbPT) with a proposal asking for
land to accommodate the Debt Recovery Tribunal (DRT) and Debt
Recovery Appellate Tribunal (DRAT). Additional Solicitor General
Anil Singh and Advocate Mohamedali Chunawala, however, informed the
court that MbPT has received 32 such proposals from various
departments of the Maharashtra government and so the MoF proposal
may not be decided on a priority basis.
The bench then said, "If the port trust has in its possession land
on which some structures have been erected and constructed long time
back, but presently unused and unutilised, then, the structures and
the lands beneath can be handed over. Thereafter, the other
ministries and departments in the central government can put up a
court complex, wherein it would be possible to house the tribunals
such as Debt Recovery Tribunal (DRT) and Debt Recovery Appellate
Tribunal (DRAT). It is time that such lasting and permanent solution
is found."
The court gave the direction while hearing a petition filed by Suraj
Jadhav, who had approached the court highlighting the problems faced
by the litigants after the Mumbai chairperson of DRAT proceeded on a
medical leave since April and the charge was transferred to the
Chennai tribunal. Only after the matter was filed in the High Court,
the ministry appointed a full-time chairman for Mumbai.
Earlier, the president of the DRT bar association, Advocate Umesh
Shetty, had told the court, "The DRT and DRAT are presently
operating from one building in Ballard Pier. Collectively, the area
used would be around 7,500 square feet. This much space is not
sufficient for the functioning of the tribunal. Amenities such as
water-coolers, sitting area, toilets are not available. Because of
space constraints, complete digitalisation is not possible, delaying
the uploading of judgements/orders."
DRT Solutions Weekly Mail – 395th Issue
dated 11th December
’15
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) Video Recording Court Proceedings
The following news item is self explanatory:-
CENTRE AWAITS SC NOD ON VIDEO-RECORDING COURT PROCEEDINGS
S
Nambrath2015-11-300
http://rtn.asia/g-c/15908/centre-awaits-sc-nod-on-video-recording-court-proceedings
The central government is awaiting feedback from the Supreme Court
before expanding digitization of court proceedings by introducing
audio and video recordings of proceedings.
The ministry of law and justice said that it has been getting
suggestions that following the digitization of court documents, a
move should be made to digitize and record entire proceedings.
At present, India follows the centuries-old custom of recording
court proceedings by writing them down. A clerk types almost
everything that is said in a courtroom by way of evidence.
However, with advancement in technology, it is now possible to
record the proceedings, as is done in foreign countries, at
virtually zero cost.
“The Government has been receiving suggestions for the
implementation of audio-video recording of court proceedings. The
issue has also been discussed in the meetings of Advisory Council of
National Mission for Justice Delivery and Legal Reform,” the
ministry of law and justice said.
However, said the ministry, the proposal has been deferred on the
suggestion of the Chief Justice of India.
“In the meeting of eCommittee of the Supreme Court of India held on
8th January, 2014, Hon’ble the Chief Justice of India advised
deferment of audio-video recording of court proceedings as this
would require consultations with Hon’ble Judges of Supreme Court and
High Courts,” it said.
Indian judges do not allow any recording devices to be brought into
the court, though such restrictions have become nearly impossible to
implement due to the possibility of recording using mobile phones,
which are allowed.
However, no official recordings of court proceedings are allowed at
present.
The policy of no-recording has also prevented the live broadcast of
court cases involving subjects of national interest — such as
corruption and politics — to the people.
In contrast, most of the proceedings of the Indian judiciary are
accessible to the citizens via live broadcasts through dedicated
channels.
Allowing the recording of court proceedings are expected to boost
transparency and reduce allegations of impropriety.
In countries like the US, many states allow court proceedings to be
recorded and broadcast. This has led to the emergence of channels
such as Court TV, which specialize in covering interesting judicial
cases.
India has a three-tier judiciary. At the lowest level is the trial
courts, where evidence is introduced and evaluated.
After this, there are two levels — High Courts at the state level
and the Supreme Court at the national level — where these judgments
can be appealed.
While individual cases go through the three tiers, cases of public
and national interest and those pertaining to governments and
organizations can be filed directly in the High Courts or the
Supreme Court.
(2) FIR Registration Must in Cognisable Offences
The
following news item is self explanatory:-
FIR Registration Must in Cognisable Offences'
Published: 08th December 2015 04:39 AM
Last Updated: 08th December 2015 04:39 AM
HYDERABAD: The Hyderabad High Court on Monday directed the DGPs of
Andhra Pradesh and Telangana states to issue instructions to all the
district police officers in their respective states to implement the
law laid down by the Supreme Court in registering complaints in
cognisable and non-cognisable offences.
Justice P V Sanjay Kumar was passing this direction in a petition
filed by V Mahindra and three others, challenging the action of the
police in not registering their complaint.
The judge, in his order, said in view of the judgment of the Supreme
Court in Lalita Kumari versus Government of Uttar Pradesh case, the
registration of a FIR is mandatory under Section 154 CrPC, if the
information discloses commission of a cognisable offence and no
preliminary inquiry is permissible in such a situation. If the
information received does not disclose a cognisable offence but
indicates the necessity for an inquiry, a preliminary inquiry may be
conducted only to ascertain whether a cognisable offence is
disclosed or not. The preliminary inquiry should be made time-bound
and in any case it should not exceed seven days and the police
authorities are bound to follow the due procedure laid down in
Section 155 CrPC. In any event, the police authorities must take
suitable action in the matter expeditiously.
The Supreme Court has also said that since the general diary/station
diary/ daily diary is the record of all information received in a
police station, all information relating to cognisable offences,
whether resulting in registration of a FIR or leading to an inquiry,
must be reflected in the said dairy and the decision to conduct a
preliminary inquiry must also be reflected therein.
Reiterating the Apex Court order, Justice Sanjay Kumar said that in
cases where the preliminary inquiry ends in closing the complaint, a
copy of the entry of such closure must be supplied to the first
informant forthwith and not later than one week disclosing the
reasons in brief for closing the complaint and not proceeding
further.
While making it clear that a police officer cannot avoid his duty of
registering a FIR if a cognisable offence is disclosed, the judge
recalled that the Supreme Court held that action must be taken
against the erring officers who do not register the FIR if
information received by him discloses a cognisable offence.
The judge disposed of the case directing the DGPs of both the states
to issue instructions in this regard to all the police officials in
their respective states.
DRT Solutions Weekly Mail – 394th Issue
dated 5th December
’15
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) New SC Chief Justice
The following news item is self explanatory:-
What you must know about new CJI Justice Tirath Singh Thakur
http://www.merinews.com/article/what-you-must-know-about-new-cji-justice-tirath-singh-thakur/15911669.shtml
Senior-most Supreme Court judge Justice Tirath Singh Thakur was
today sworn in as 43rd Chief Justice of India by the President
Pranab Mukherjee in Rashtrapati Bhavan. The 63-year old Justice
Thakur took oath in the presence of Prime Minister Narendra Modi,
NDA ministers, opposition leaders and former Chief Justices. Justice
Thakur's mother Saraswati Thakur and other family members were also
present at the function along with Attorney General Mukul Rohatgi.
Justice
T.S. Thakur's appointment as the highest-ranking judge in the
Supreme Court of India, is a clear sign that seniority reigns in the
highest judiciary. Justice Thakur took over the charge from Justice
H L Dattu who retired yesterday. It was former CJI Dattu who had
recommended the name of Justice Thakur as his successor.
CJI holds the highest judicial position in the country as well as
presiding in the Supreme Court. He/She also heads its administrative
functions.
Though there is no specific provision to appoint CJI, it is a
convention that the current CJI recommends a name to the government
as his successor. Subsequently, it is the Law Ministry that clears
his name and then the file travels to the Prime Minister's Office.
Finally, it reaches to the President and he gets appointed after the
President gives his nod.
Let's take a brief look at Justice Thakur's personal background, his
life and experience!
Justice T S Thakur is the son of D.D. Thakur who was an eminent
advocate in Jammu and Kashmir High Court. D.D. Thakur later became
the judge in HC and then the Union Minister. Born at Batroo in
Ramban district on January 4, 1952, Justice Thakur started his legal
practice in his father's chamber in the Valley state. He was a quick
learner and went on to represent as Pleader in many cases. Justice
Thakur plays badminton regularly to de-stress himself.
In 1990, Thakur was appointed as a senior advocate and invited to
the Bench as an additional judge of the J&K High Court. Before being
designated as acting Chief Justice of Delhi HC
in 2008, Thakur served as judge in HCs of Karnataka and
Delhi. At the time of his rise to the Supreme Court in Nov 2009,
Thakur was serving as the Chief Justice of the Punjab and HaryanaHigh
Court. Notably, Justice Thakur would have a year-long tenure as CJI
before he retires in Jan 2017.
Justice Thakur is known for his patience, elaborated and fair
hearings of cases. Famed for taking measures to clean the cricket
administration, Thakur handled the Indian Premier League spot-fixing
and betting case. His bench ordered to constitute a Supreme Court
committee headed by Justice RM Lodha to make the world's affluent
Cricket body BCCI, transparent and accountable.
While handling the case of Saradha chit fund scam, his bench ordered
a CBI investigation in the case. It brought much shame to the Mamata
Banerjee administration in West Bengal. Thakur is also hearing bail
applications of the accused in the multi-crore National Rural Health
Mission (NRHM) scam.
Moreover, Justice Thakur also leads the bench hearing Sahara-SEBI
clash. It is making Sahara Group to return Rs. 36,000 crore back to
investors allegedly duped for money.
Justice Thakur is famous for his meaty observations. It was him only
who reminded BJP administration of its pre-election promise to clean
River Ganga. Taking a dig at the government he had once said that,
"It would probably take them (government) another 200 years to do
the job."
(2) Banks worried over Recovery of Bad Debts
The following news item is self explanatory:-
Recovery of bad debt worries banks
Sidhartha,
TNN | Nov
30, 2015, 02.53AM IST
NEW DELHI: Almost 15 years ago, Daewoo filed for bankruptcy and a
few years later General Motors took over its auto business. More
than a decade later, while the Chevrolet Spark, which replaced the
Korean chaebol's Matiz, can still be spotted on the road, its Indian
plant lies in a shambles. Asset Reconstruction Company (India), or
Arcil, which used to spend around Rs 5 crore for maintaining the
facility near Noida, is still dealing with legal cases as a plan to
sell it didn't materialize.
Over a thousand kilometres away in Jharkhand, lenders are trying to
get the local administration and the state government to protect
their interests in loans they had extended to a Rs 5,000-crore power
plant, which remains under construction and has even hit equipment
vendor Bhel that has a Rs 800-crore exposure. With no support from
the state, locals and unpaid vendors are taking away pipes and other
material from the under-construction facility.
While there has been a slowdown in fresh accretion to the pile of bad
debt of banks, which added up to Rs 3.14 lakh crore at
the end of September, recoveries have dwindled, exaggerating the
pressure. A
document prepared for a recent meeting of bank chiefs with finance
minister Arun Jaitley had noted that "the situation requires special
focus in banks like Bank of India, IDBI, Indian Overseas Bank, Bank
of Maharashtra, UCO Bank, and United Bank of India". At least two
lenders — BoI and IOB — have reported losses, while Dena Bank is
just sitting on the edge.
Over the years, thanks to persuasion by the Reserve Bank of India
and the finance ministry, banks have become more transparent about
recognizing non-performing assets. But there has been little
improvement when it comes to recovery, bankers admit. "The economic
environment is poor and companies are over-leveraged. So, even if we
want to sell an asset, we are not getting buyers or the right
price," said a senior executive.
But the bigger issue is the challenge posed by defaulters, who
approach multiple legal forums to delay the process of banks
initiating action. No one illustrates it better than Vijay Mallya
and the defunct Kingfisher Airlines, which approached several courts
to avoid getting the "wilful defaulter" tag. Mallya is not the only
one indulging in "forum shopping". "It is for the courts to
recognize that. If someone is using the legal options to delay the
process, we can't do much — courts need to take that into account,"
said a senior government official.
There is a problem with the infrastructure at the debt
recovery tribunals too, something that thefinance
ministry is trying to fix. In fact, sources said, it is
looking if the adjournments are too frequent and why people are
unwilling to join.
While minister of state for finance Jayant
Sinha had told TOI that a fund is being planned to deal
with impaired assets that can be revived, asset reconstruction
companies believe that the legal framework too needs to be
strengthened, and they have not been consulted on this.
DRT Solutions Weekly Mail – 393rd Issue
dated 20th November
’15
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) SC asks UP to Pay Compensation of Rs 10 lakh to an Officer
The following news item is self explanatory:-
Supreme Court asks UP to pay forest officer Rs 10 lakh
Bhadra Sinha, Hindustan Times, New Delhi Updated:
Nov 18, 2015 12:29 IST
http://www.hindustantimes.com/india/supreme-court-asks-up-to-pay-forest-officer-rs-10-lakh/story-8ng4Ex2bkDR2bbygaxBGzI.html
The Supreme Court has ordered the Uttar Pradesh government to pay Rs
10 lakh to a retired Indian Forest Service officer after being
falsely implicated in a corruption case. The officer fought a legal
battle for 10 years after a case was allegedly registered because he
refused to comply with the instructions of the then chief minister
in 2003.
Though the top court does not entertain petitions filed directly
before it seeking compensation, it did so in this case after noting
that the circumstances were very peculiar. A bench headed by justice
Ranjan Gogoi said it was necessary to protect an honest public
servant not only in his interest but in the larger interest of the
society. Ram Lakhan Singh, the court held, should be compensated for
the harassment and mental agony he underwent during the protracted
battle.
“Some upright officers resist corruption but they cannot alone
change the system which victimizes them through frequent punitive
transfers, threat to their families and fabricating, foisting false
cases,” the bench noted.
“In such a scenario, until and unless we maintain a fine balance
between prosecuting a guilty officer and protecting an innocent
officer from vexatious, frivolous and mala fide prosecution, it
would be very difficult for the public servant to discharge his
duties in free and fair manner. The efficiency of a public servant
demands that he should be free to perform his official duties
fearlessly and without any favour,” stated the court, adding there
was a dire necessity is to fill in the existing gap by protecting
the honest officers while making the corrupt officers realize that
they are not above law.
(2) TS Thakur appointed as Chief Justice of India
The following news item is self explanatory:-
Last
Modified: Thu, Nov 19 2015. 02 45 AM IST
TS Thakur appointed
43rd Chief Justice of India
Thakur will take over
from incumbent Chief Justice HL Dattu on 3 December; he has been a
judge of the apex court since November 2009
New
Delhi: Justice
T.S. Thakur has been appointed the 43rd Chief Justice of the Supreme
Court of India, an official statement said on Wednesday.
Thakur
will take over from incumbent Chief Justice H.L. Dattu on 3
December. He has been a judge of the apex court since November 2009.
Thakur was
head of the bench that delivered the popular verdict on the
controversies surrounding the Indian Premier League and initiated
administrative reforms within the Board of Control for Cricket in
India.
He has
also been hearing cases such as those on Sahara chief Subrata Roy’s
custody, the probe into the Saradha chit fund scam, the National
Rural Health Mission scam in Uttar Pradesh, and the legality of
allowing broadband licence holder Reliance Jio Infocomm Ltd to offer
voice services.
Thakur
recently headed the two-judge bench, which refused to entertain a
plea filed against a Bombay high court order staying the decision to
ban sale of meat in Mumbai during a Jain festival.
Thakur
will now head the next collegium of the Supreme Court with numerous
reforms being suggested to the process of making judicial
appointments.
Attorney
General of India Mukul Rohatgi, who was asked to draft a new
memorandum of procedure for appointment of apex court and high court
judges on Wednesday, said he would furnish the same within 15 days.
There are,
at present, four vacancies of the Supreme Court that will have to be
decided by the collegium after Dattu’s retirement. Under the
collegium system, a group of five seniormost Supreme Court judges
appoints other judges to the higher judiciary—the high courts and
the Supreme Court. Articles 124 and 217 of the Constitution
stipulate that judges will be appointed by the President of India
after “consultation” with the Chief Justice of India and other
judges.
On 5
November, a five-judge bench of Supreme Court headed by Justice J.S
Khehar clarified that there is no bar on the collegium appointing
judges to the top court. This bench recently declared the
Constitution (Ninety-ninth Amendment) Act, 2014, and National
Judicial Appointments Commission (NJAC) Act, 2014, unconstitutional.
The NJAC
was to replace the collegium system of appointment of judges, with
the selection being made by a panel consisting of the Chief Justice,
two seniormost judges of the apex court, the law minister and two
eminent persons to be appointed by a select committee of the prime
minister, Chief Justice and the leader of the opposition.
Born 4
January 1952, Thakur will have tenure as Chief Justice of a little
over a year and retire on 3 January 2017. Thakur was designated as a
senior advocate in 1990. On 16 February 1994, he was appointed as an
additional judge of the Jammu and Kashmir high court and transferred
as a judge of Karnataka high court in March 1994. He was appointed
as a permanent judge in September 1995 and transferred to the Delhi
high court in July 2004.
Thakur was
appointed acting chief justice of the Delhi high court on 9 April
2008 and on 11 August that year, he took over as chief justice of
the Punjab and Haryana high court.
Thakur is
currently the only judge to use a microphone during proceedings of
the Supreme Court and is also the executive chairperson of National
Legal Services Authority, which provides free legal services to the
poor.
Senior
advocate Prashant Bhushan welcomed Thakur’s appointment. “He has
always been a quiet, unassuming and judicious judge, and I expect
his tenure to be a fruitful one.”
DRT Solutions Weekly Mail – 392nd Issue
dated 13th November
’15
All Weekly mails right from 1st Issue to latest, click
links on top of this page
(1) Liberalism in India
The following news item is self explanatory:-
Liberalism in India
NOVEMBER 12, 2015
HTTP://WWW.NITICENTRAL.COM/2015/11/12/LIBERALISM-IN-INDIA-336473.HTML
The origin of Liberalism in India has its moorings in the Western
and Continental liberal philosophers, and contributed to the rise in
nationalism against the British domination. Over a period of time,
the liberal movement in India evolved, with the emergence of
inter-dependence of economic development and political stability.
Post-independence, liberal ideas have contributed to India’s
constitutional and political development, protecting values such as
freedom of expression, democracy, human rights and secularism to
name a few.
An article discussing
classical liberal ideas and their proponents in India over the last
century has been documented which highlights the evolution of
liberalism in India, right from its inception to its modern day
manifestation.
P. Manish, Assistant Professor of Economics in the Sorrell College
of Business, Shruti Rajagopalan, Assistant Professor of Economics at
Purchase College, State University of New York, Daniel Sutter,
Professor of Economics at Troy University, and Lawrence H. White
Professor of Economics at George Mason University have contributed
to the article.
Intellectual currents before 1947:
In the 19th century India, prominent intellectuals like were
influenced by British and Continental liberals. The liberals who
supported individual rights and freedom founded the Indian National
Congress Party in 1885. But with the passing of time and also of
liberal leaders, the Indian National Congress lost its liberal
character, replaced by the new generation of Congress leaders with
socialist ideologies, the most important of them being Jawahar Lal
Nehru.
“Whereas the liberal Whig philosophy of the 18th century profoundly
influenced the founding and set the early course of an independent
United States, the democratic-socialist philosophy of the late 19th
century profoundly influenced the founding and set the early course
of an independent India.”
A Congress Socialist Party, headed by Nehru and made up of
socialists and planning enthusiasts was formed in 1934 which
organised a National Planning Commission in 1938, to determine the
role state planning could play in the growth of the nation.
The liberal critics of planning (1950-1975):
At a time when intellectuals and politicians in India and in the
world believed that centralised resource allotment was the way to
ensure growth and development, a broader movement opposed to
planning in the civil society emerged, backed by liberals such as
economist B. R. Shenoy, C. Rajagopalachari, Minoo Masani, Khasa
Subba Rao, A. D. Shroff, and Nani Palkhivala.
Rajagopalachari, who was the Governor General of India from 1948-
1950, had labelled Nehruvian socialism as a “permit–quota– license
raj,” a new kind of oppression following on the heels of the British
Raj. He formed the Swatantra (“Freedom”) Party in 1959 to provide
opposition to Congress. Its founders formulated 21 principles
emphasizing a goal of protecting individual liberty and limiting
government. Rajagopalachari also founded the Swarajya -an English
language weekly magazine in 1956, to discuss current economic and
social policy in the context of individual freedom and economic
liberty.
The Constitution of India was frequently amended during 1950–1978,
the peak era of socialism, to accommodate policies to salvage the
Five Year Plans. As a senior advocate in the Indian Supreme Court,
Nani Palkhivala argued some of the most important cases affecting
the constitution and the rule of law in India, who also described
this amendment process as the systematic defiling and defacing of
the Indian Constitution.
Liberals abroad oppose statism in India:
From 1975 and the Emergency, the years under Indira Gandhi were
characterised by the almost complete disappearance of liberal ideas
within India. However, opposition to statism in India came from
figures at institutions abroad.
Jagdish Bhagwati, an economist, experienced an “intellectual
conversion” around 1962 in favour of free trade and against the
protectionist policy and the associated ‘permit–quota–license raj.
Bhagwati co-authored books with his wife Padma Desai and T. N.
Srinivasan criticising the central planning system and licensing
regime. He moved to MIT in 1968 and later to Columbia, and
Srinivasan relocated to Yale in 1980 but continued to push for
liberalising reforms. Extending their critique, Arvind Panagariya-
an Indian-American economist and Professor of Economics at Columbia
University in his influential book India: The Emerging Giant, lays
out a roadmap for reforms in different sectors of the economy.
Re-emergence of a liberal movement in 1991:
India witnessed a revival of the liberal movement in 1991,
especially in the English-language business press and in policy
circles. Parth J Shah, an Austrian school economist, and head of the
Center for Civil Society (CCS) a liberal think tank in New Delhi is
considered as one of the key figures in this revival.
CCS conducts outreach programs for students and advocacy to promote
greater individual choice. It has also made commendable efforts to
rekindle public interest in the Indian classical liberal tradition
by making the works in this domain publicly available on IndianLiberals.in.
The works of Gurcharan Das and Sauvik Chakraverti have also added
due weightage to the criticisms of statism in India and its
undesirable consequences on the economy.
Explaining the deficiency of liberalism in the Indian academy:
To address the paucity of liberalism in the Indian academy, the
authors have mentioned:
“Throughout the era of central planning as well as during the years
of economic reform the liberal philosophy had a very minimal
presence in the halls of Indian academia. Almost all the academics
who hailed from India and were influenced by liberal ideas have
pursued their careers and their research in universities abroad.
This section seeks to outline a possible explanation for this dearth
of liberal academics in India.”
Also for the sole aim of professional growth, economic theories
supporting the government’s policies were advocated for by the
economists. The profession itself was being indirectly influenced
due to increasing government dominance over public universities and
higher education institutions.
(2) Need to Create New SC Benches
The following news item is self explanatory:-
Time to Examine the Need to Create New SC Benches
Published: 11th November 2015 06:00 AM
Last Updated: 11th November 2015 03:18 AM
http://www.newindianexpress.com/columns/Time-to-Examine-the-Need-to-Create-New-SC-Benches/2015/11/11/article3123192.ece
A long-pending debate has finally begun on reforming the Indian
judiciary. This is the right time to re-examine one suggestion that
has been repeatedly made but has not garnered the attention it
deserves. This is the recommendation that new benches of the Supreme
Court be created — made by the Parliamentary Standing Committee on
Home Affairs in its 56th, 61st and 72nd reports, the Committee on
Law and Justice in its 2nd, 6th, 15th 20th, 26th and 28th reports
and the Law Commission in its 95th, 125th and 229th reports. They
have asked for the creation of three new “Cassation benches” of the
Supreme Court which would be in the North-Eastern, Western and
Southern regions of the country.
These could handle civil and criminal appeals arising out of the
orders/judgments of the High Courts and the main bench in New Delhi
could focus solely on constitutional matters. This way the workload
would be better divided and case disposal rates would increase. The
biggest argument in favour of this reform is the tremendous relief
it would bring to the citizens of the country. Currently, one has to
travel all the way to New Delhi, incurring huge expenditure on
conveyance, lodging and work days lost. Then, there is the general
practice of bringing along one’s own lawyer, who has handled the
case in the High Court, to the Supreme Court which further increases
the cost. Adjournments are common and they add to the overall
expense.
During the Telangana agitation, several cases were filed in the
Supreme Court and mobilising funds for them was a herculean task as
their legal expenditure ran into lakhs of rupees.
The burden on the common citizen due to this inefficient system is
too well-known to elaborate and having benches in the four corners
of the country would bring tremendous relief to the citizens who
could access justice closer to home. For this reason, the demand has
been persistently raised. It is, therefore, highly unfortunate that
the Full Court of the Supreme Court has persistently opposed this
reform through resolutions passed in 1999, 2001, 2004 and 2006. The
most recent opposition was in 2010 when a Full Court of 27 judges,
headed by former Chief Justice KG Balakrishnan, passed a resolution
that reiterated the position that dividing the Court would undermine
the country’s unitary character and would destabilise the Court’s
integrity. This is an assertion and not an argument. The Full Court
has never explained to the government how such a move would
undermine the country’s unitary character or destabilise the Supreme
Court. Further, such a ‘unitary character’ does not exist as India
is a federation. As per Article 1 of the Constitution, India is a
Union of States.
This elementary fact seems to have been lost on the Court. It also
flies in the face of its own basic structure doctrine, which regards
federalism as part of the basic structure of the Indian
Constitution. It is also misleading to say that dividing the Court
would destabilise it. It is like saying that dividing the country
into more states would destabilise its integrity.
As experience has shown, creating new states such as Telangana,
Uttarakhand, Mizoram, etc have actually helped in addressing
legitimate issues and have made the country stronger and more
united. Similarly, creating new benches of the Supreme Court, far
from ‘destabilising’ it, will actually enable it to perform its
duties more efficiently, bring it closer to the common citizen and
increase its overall legitimacy.
Implementing this reform only requires the support of the Chief
Justice of India. As per Article 130 of the Constitution, “The
Supreme Court shall sit in Delhi or in such other place or places,
as the Chief Justice of India may, with the approval of the
President, from time to time, appoint.” However, despite the best
attempts of the government to persuade it otherwise, the Supreme
Court has remained resolutely opposed to this vital reform.
This is truly unfortunate as the Court has chosen to ignore the
daily hardships of millions and in the name of vague and sentimental
principles obdurately enforced the status quo. This leaves the
government with only one choice — amending Article 130.
The government must bring in amendments, which take away this power
from the Chief Justice and give it to the President alone. This is
also the recommendation of the Law Commission. However, this will be
a long-drawn process as it will require special majorities in both
Houses and ratification by the state legislatures. The outcome will
be humiliating for the Supreme Court and it could well be remembered
as an institution that resisted reforms and required external
intervention for change.
Thus, the simpler way out which is also face-saving for everyone is
if the Court recognises the need for creating new benches and agrees
to do so. The Supreme Court like all institutions under the Indian
Constitution is a dynamic and living entity and must adapt to the
needs of the times to stay relevant. It is with this foresight that
the framers of the Constitution drafted Article 130 that gave the
Chief Justice of India the power to create new benches beyond the
national capital. Let us hope the judiciary honours their wisdom and
lets prudence prevail.
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’15
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(1) Bankruptcy Panel calls for Insolvency Regulator
The following news item is self explanatory:-
Bankruptcy panel calls for insolvency regulator
http://indianexpress.com/article/business/business-others/bankruptcy-panel-calls-for-insolvency-regulator/
A government-appointed committee has suggested setting up an
insolvency regulator to exercise regulatory oversight over
insolvency professionals and agencies in a bid to ensure speedier
winding up of insolvent companies and providing easier exit route to
investors.
The Bankruptcy Law Reforms Committee (BLRC), headed by TK
Vishwanathan, in its report has also recommended, for the first
time, bankruptcy and insolvency processes for individuals with
annual gross income of less than Rs 60,000 and aggregate assets of
not more than Rs 20,000. They can apply for a discharge from their
debts which are liquidated and unsecured up to Rs 35,000.
The proposed Bankruptcy Code will replace over a century old archaic
insolvency act — The Presidency Towns Insolvency Act, 1909 — and
ensure time-bound disposal of insolvency application.
“The Bill seeks to improve the handling of conflicts between
creditors and debtors, avoid destruction of value, distinguish
malfeasance vis-a-vis business failure and clearly allocate losses
in macroeconomic downturns. The Bill lays down a clear, coherent and
speedy process for early identification of financial distress and
revival of the companies and limited liability entities if the
underlying business is found to be viable,” an official statement
said. According to the draft, a timeline of 180 days has been
prescribed for dealing with applications for insolvency resolution
which can be extended for 90 days by the adjudicating authority,
though only in exceptional cases. The draft Bill also provides for a
fast track insolvency resolution process which may be applicable to
certain categories of entities. In such a case, the insolvency
resolution process has to be completed within a period of 90 days
from the trigger date. However, on request from the resolution
professional, based on the resolution passed by the committee of
creditors, a one-time extension of 45 days can be granted by the
adjudicating authority. According to World Bank, creditors in India
recover 25.7 cents on the dollar in 4.3 years compared to 2.6 years
in South Asia where one can recover 31.8 cents a dollar while in the
US, 80.4 cents a dollar in 1.5 years, due to absence of clear
bankruptcy guidelines. Earlier, the government had though enacted
the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest (Sarfaesi) Act to ensure that banks
get a preference over other stakeholders in settling of dues, India
lacks an effective over-arching mechanism to ensure quick winding up
of businesses and compensation to other stakeholders. According to
the Presidency Towns Insolvency Act, an individual can face charges
for non-payment of as little as Rs 500. “The adjudicating authority
will have the jurisdiction to hear and dispose of cases by or
against the debtor. The Debt Recovery Tribunal shall be the
adjudicating authority with jurisdiction over individuals and
unlimited liability partnership firms. The National Company Law
Tribunal will have jurisdiction over companies, limited liability
entities,” according to the draft. The resolution professional will
investigate and prepare a final list of all qualifying debts within
180 days from the date of application after which the adjudicating
authority will pass an order on discharging of the debtor from the
qualifying debts and accord an opportunity to the debtor to start
afresh, financially.
(2) Supreme Court Burdens
The following news item is self explanatory:-
M J Antony: Burdens the Supreme Court must shed
The power of judicial review is being stretched to breaking point
M J Antony November
3, 2015 Last Updated at 21:48 IST
The Supreme Court of India is said to be the most powerful court in
the democratic world. It showed in recent weeks that it could strike
down a Constitution
Amendment ratified
by 20 states, and 'legislate' to devise a collegium system not found
in the Constitution. On inviting suggestions to refurbish the
collegium, Union Minister Arun Jaitley's jibe was that the court was
acting as the constituent assembly.
Despite 65,000 cases in arrears, the court has enough adrenaline to
consider issues such as ban on Sardarji jokes on websites, polygamy
among Muslims and creating a safe corridor for wild elephants
crossing rail lines. However, a visit to the court or reading its
judgements would make one wonder whether it is a constitutional
court at all. The long-winded arguments droning on in the 14
courtrooms are mostly over civil disputes of distant past involving
land, revenue, disciplinary proceedings against employees,
interpretation of wills and other mundane subjects, which should
have ended in courts below.
In some recent judgements, the court itself has observed that there
should be some end to disputes over facts and it should not be
dragged to the constitutional court. Last month, it stated in the
judgement, Ram Bahal vs deputy director of Consolidation, that
"appreciation or re-appreciation of evidence must come to a halt at
some stage of the judicial proceedings and cannot percolate to the
constitutional court, exercising jurisdiction under Article
136 of
the Constitution."
This provision of the Constitution allows any losing party to
approach the Supreme Court even without the mandatory certificate
from the court that delivered the judgement. The apex court has
discretion to reject such special
leave petitions (SLP)
at the threshold, but in fact scores of them are admitted in a
normal week. This, despite the court itself having emphasised in
several judgements that this discretionary power should be used only
in exceptional cases when a question of a law of public importance
is involved or the judgement appealed against shocks the conscience
of the court.
The number of appeals entering the court through this gateway has
exceeded by far the writ petition route. So much so that in another
recent judgement, Leela Rajagopal vs Kamala Menon Cocharan, the
court reminded itself that the jurisdiction under Article 136 is
"highly circumscribed" and its use should be "highly economic". The
first court might have determined the facts through evidence and
examination of witnesses. The high court might have re-examined the
evidence on record. Therefore, it is not for the Supreme Court to go
through the facts "unless they give rise to questions of law that
require a serious debate or discloses wholly unacceptable
conclusions of fact, which plainly demonstrate a travesty of
justice."
However, these precepts are not followed in practice. For instance,
the list before the chief justice on Monday contained 72 cases, of
which 48 were SLPs and 15 appeals. Only one writ petition was
listed. The Ram Bahal case mentioned earlier started in 1974 and
related to three plots of land in a village. Another recent
judgement, Sant Ram vs Dhan Kaur, was an application for
clarification of a 2009 order, involving a 1966 sale of 96 sq yards
where a 14'/9' room was built illegally. In a tax appeal by the
revenue authorities, the court found that the amount involved was so
small that it was not worth even hearing, though the SLP was
admitted long ago. These are only specimens; there are rows of them.
Public interest petitions (PIL),
though they hog the headlines, take very little time of the court.
Only a dozen out of more than a thousand cases heard in a week are
PILs. Moreover, PILs benefit millions of people, who cannot approach
the court directly.
The really undesirable outgrowth of the Constitution is the
proliferation of SLPs, which are admitted and dumped in the record
rooms till another generation of judges take them up. It might be
true that the quality of judgements of the lower courts leaves much
to be desired. But there should be some finality somewhere. Repeated
review of disputed facts for decades benefits few except the second
generation of original petitioners and lawyers. Or 3G.
