Month: November 2013

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NOTA – Protecting the expression in voting

ManuChaturvedi_NOTA_therightnottovoteA decade ago, in People’s Union for Civil Liberties v. Union of India, the Supreme Court held that the mandatory public disclosure of the criminal records of candidates contesting constituency-based elections enjoyed the legal tutelage of Article 19(1)(a) of the Constitution of India.

Established jurisprudence dictated that the paradigm of speech and expression also entailed ancillary rights including the right to receive information that could best inform speech and expression. This view, adapted from several cases, drew on the catalytic relationship between awareness and the (right of) free expression. The Court had perused the nature of the right to vote and held that even though it was a statutory right, the final act of voting was a form of electoral expression and a vital source of sustained democratic engagement. The elector therefore, had a right to know the criminal antecedents of contesting candidates under Article 19(1)(a).

This year, the Supreme Court revisited the paradigm of electoral expression on the limited question of whether the principle of “secret ballot” applied to those citizens who — though statutorily eligible to cast a vote — wished to exercise the “right not to vote”. Tasked first with finding if such a right even existed in the electoral scheme, the Court pointed out that Section 79(d) of the Representation of People Act, 1951 (“RP Act”) defined an electoral right to include the right to vote as well as the right to refrain from voting. Moreover, Rules 41(1), 41(3), and 49-O of the Conduct of Election Rules, 1961 recognised the electoral right of voters not to cast a vote by laying down procedures to be followed in case such a right was exercised.

Having found in favor of its existence, it examined its nature, and concluded that a positive “right not to vote” was part of the expression of a voter within a parliamentary democracy. It had to be given effect to in the same manner as the right to vote — including a provision for maintaining the secrecy of ballot. Needless to add, it also came within the sweep of electoral expressions that, as held previously, enjoyed the protection offered by Article 19(1)(a) of the Constitution.

electronicvotingmachineThe Court reviewed the electoral scheme to see if electors exercising their right to not vote were treated at par with electors who cast a vote in favour of contesting candidates and found that only the voters who came out in support of a contesting candidate were able to cast a valid vote on the electronic voting machines in a manner that maintained secrecy of their ballot. Electors who wished to exercise their electoral right to not vote however, could not do so. They were instead forced to contend with the impugned provisions of Rule 49-O which laid down an elaborate procedure of identification and registration, thus, compromising the principle of secrecy extended to other voters.

In order to remedy this discriminatory treatment, the Court directed that the option “None of the Above” should be provided on voting machines in order to accommodate the expression of those exercising their right not to vote. The provisions of the RP Act and the Conduct of Election Rules, 1961, which compromised secrecy, were also held to be unconstitutional and struck down.

In my next post, I will deal with the Supreme Court’s use of the terms “negative vote” and “neutral vote”.

(Manu Chaturvedi (manuchaturvedi@gmail.com) practices law at the Supreme Court of India.)

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A Question of Law – Come show off your knowledge, get offers on drinks, and win prizes

AQuestionofLawbannerThis year, Rainmaker’s annual law quiz will be held at “100% Rock”, at Ambience Mall in Vasant Kunj, New Delhi. The quiz will begin at 6:30 pm on November 26. Come ready to enjoy offers on drinks and win cool prizes.

 

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Supreme Court of India

Medical negligence: Supreme Court rejects rigid formulae, demands nuance in calculating compensation

PrateekAndheriaThe Supreme Court’s judgment in Dr. Balram Prasad and Others v. Dr. KunalSahaand Others, on appeal from a decision of the National Consumer Disputes Redressal Commission, addressed key issues related to the payment of compensation in medical negligence cases.

The brief facts are in this report. Liability per se had already been decided by the Supreme Court in a previous round of litigation in 2009.The Court had then directed the Commission to arrive at a just figure of compensation. This time round, in a 210-page judgment, the Court increased the compensation awarded — from the Rs. 1.55 crore awarded by the Commission to Rs. 6.08 crore, perhaps the largest ever in such a case.

Doctor_HospitalThe Court’s observations on the ‘multiplier method’ are a key takeaway from the judgment. The multiplier method calculates compensation based on the estimated future income of the deceased. It depends on the age of the deceased at the time of death, since it multiplies the estimated figure of annual income by the estimated number of years the deceased would have been earning for. Tracing the history of this method to the concept of no-fault liability under the Motor Vehicles Act, 1988, the Court relied on precedent (para 65) to note first, the need for flexibility in its application generally and the inappropriateness of its strict application in the context of medical negligence where fault has been established (since the method was specifically designed for redressal of no-fault liability claims). After that, the Court re-evaluated the compensation for loss of future income of the deceased. Here, the judgment once again extolled the need for a case-by-case approach, and added a thirty per cent to the projected future earnings to account for possibilities of future advancement and the ‘future potential’ of the deceased.

While substantively, the Court has decided the case based on existing law, three points stand out. Firstly, there is a constant emphasis on flexibility, context, and regard to the overall circumstances and an eschewal of calculation methods based on rigid formulae. Secondly, rather than relying on doctrine alone, the Court adopted a consequentialist approach. It was comfortable ‘getting its hands dirty’ and addressed issues of inflation adjustment, interest from the date of filing the claim, and even adjusting projected income with currency fluctuations. The emphasis appeared to be on an effective decision rather than on precedent and legal rules alone, an attitude that I would think is laudatory, and particularly appropriate for consumer law.

Despite the private law context of the judgment, I believe it serves the policy objective of demanding due care and attention from the medical community. The nuance and attention in the judgment to context and consequence are also notable.

(Prateek Andharia is a final year law student at NALSAR University of Law, Hyderabad.)

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Supreme Court of India

21 years later — The unfortunate legacy of Indra Sawhney

AnanthPadmanabhan.jpgIndra Sawhney, which turns twenty-one on November 16, has the unfortunate legacy of being a decision of the Supreme Court that stands as much for circumvention as citation. This is perhaps natural, considering the decision’s feeble attempt to build a check dam around the flood of populism that reservations had become.

The Court ought to have categorically held: caste is not class. All those buts that followed — “but no reservations in promotions”, “but no reservations in excess of 50%”, “but no reservations for the creamy layer”, “but considerations of merit cannot be ignored” — and all those buts that subsequent decisions relied on Indra Sawhney to carve out — “but no consequential seniority”, “but no shifting of unfilled vacancies to the next year” — have been consistently eroded by State Legislatures, Parliamentary enactments, and egregious constitutional amendments that read more like provisions from a service law manual.

So, what do we really learn from this? That decisions of the Court, even the highest court, can rarely bring in checks on populism unless they are nurtured by parallel institutions, and subsequent benches that understand the essence of the earlier ruling. The failure of Indra Sawhney lies in both. It was fairly clear that our legislators and governments would not do anything much beyond going down the path of aggrandising certain segments of the “votebank” without really empowering them. As an unintended consequence of sorts, it became a matter of pride for this “class” to proudly declare on the floor of the house that the several, patently unconstitutional, enactments and amendments were indeed meant to override anti-egalitarian views expressed by the Court in Indra Sawhney and its successors.

The less predictable letdown was the Court’s response in M. Nagaraj v. Union of India, where it upheld reservations in promotion and the “constitutionalisation” of this opinion through Article 16(4A). The Judiciary laid to waste the right occasion to send out the strong, and legally right, message that equality meant the same regardless of the political process, that it would not make any difference whether values and rights were violated through the mechanism of a statute or permanently butchered through a constitutional amendment, and that decisions such as Indra Sawhney are sacrosanct and untouchable. By upholding Article 16(4A), the Court relegated Indra Sawhney to the dustbin, giving an easy way out to every Parliament of the future that wished to disregard whatever little was left of this decision’s salutary checks and balances.

This legacy is more of a constitutional tragedy, as we continue to witness mindless legislative overriding, especially in the volatile space of “reservations”. The most recent example is the response to P.A. Inamdar v. State of Maharashtra, a well-reasoned decision of the Supreme Court that immunised private educational institutions from excessive governmental interference and especially, “reservations” in the admission pool. Soon thereafter, Article 15(5) came through, proudly proclaiming the power of the State to usher in social justice through reservations.

Sadly, this is the story that the decision in Indra Sawhney passes on to future generations. The answer to unbridled reservations therefore, lies elsewhere, not in our courts, and as much as Indra Sawhney strove for otherwise, this continues to be the case.

(Ananth Padmanabhan is the author of Intellectual Property Rights – Infringement and Remedies.)

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SEBI officers should be trained in conducting legal searches

DeekshaSinghThe Securities and Exchange Board of India (“SEBI”) now has new powers of search, seizure, arrest, detention, and attachment of property. This followed the promulgation of the Securities Law (Amendment) Ordinance, 2013 and the securities regulator has turned to the Income Tax (“IT”) department for help in training its officers in the exercise of these powers. For a detailed analysis of these powers, see this link.

Jurisprudential background

The powers of search, seizure, arrest, and detention — whether exercised by civil authorities like the IT department or the police — are intrinsically linked to certain basic human rights. In particular, Articles 19 and 21 of the Constitution of India, 1950, have been interpreted, in a number of cases, to be directly linked to the right to due process of law.

In Kishore Singh Ravinder Dev v. State of Rajashthan, AIR 1981 SC 625 — a landmark judgment regarding the rights of accused persons — the Supreme Court highlighted the necessity of ensuring that the constitutional, evidentiary, and procedural laws of our country protect the dignity of the accused as a human being and grant him the benefits of a just and fair trial.

Specifically with reference to procedure, in Maneka Gandhi v. Union of India, AIR 1978 SC 597, the Supreme Court underlined that the state must follow just, fair, and reasonable procedure.

While these principles, of course, form the backbone of criminal procedure, they are equally applicable to procedures for arrests, search, and seizure followed by civil authorities like the IT department and now, the SEBI.

In this post, we will discuss some key principles relating to the search and seizure powers of the IT department that are dealt with in Section 132 of the Income Tax Act, 1961. These principles should apply equally to the SEBI.

Basis of search and seizure

For an assessing officer to conduct a legal search and seizure process, that assessing officer should have information about undisclosed amounts of money and reasonably believe that that person is likely to suppress books of accounts and other relevant documents.

In Commissioner of Income Tax v. Ramesh Chander, (1974) 93 ITR 450 (Pun.), the Punjab and Haryana High Court held that the condition precedent for authorising a search and seizure is that the assessing officer must have reason to believe the necessity of carrying out such a search and seizure. The power can be exercised only if this condition is fulfilled.

On the same lines, a search and seizure operation by the SEBI, which would mostly occur — one would imagine — in insider trading cases, should be backed by a demonstrable belief on the part of the authorising officer that such an operation is, in fact, necessary.

Use of material from illegal searches

An interesting principle applicable to searches conducted by the IT department is that if a search is rendered illegal on a technicality, it will not result in the material obtained from such a search being excluded for the purposes of ordinary assessment.

Binoculars_search_seizureIn Pooran Mal Etc. v. Director of Inspection (Investigation), Income Tax, 1974 AIR 348, the Supreme Court held that materials obtained during an illegally or irregularly conducted search or seizure can be utilised for the purpose of an ordinary assessment. In this case, the Court upheld the validity of the provisions of Section 132. Further, on admissibility of evidence, it stated:

“Courts in India and in England have consistently refused to exclude relevant evidence merely on the ground that it is obtained by illegal search or seizure. Where the test of admissibility of evidence lies in relevancy, unless there is an express or implied prohibition in the Constitution or other law, evidence obtained as a result of illegal search or seizure is not liable to be shut out.”

This case was examined in later cases relating to admissibility of evidence obtained through illegal search, and the Supreme Court in State of Punjab v. Baldev Singh expressed a nuanced opinion of the decision in the Pooran Mal Case.

“[T]he judgment in Pooran Mal’s case cannot be understood to have laid down that an illicit article seized during a search of a person, on prior information, conducted in violation of the provisions of Section 50 of the Act, can by itself be used as evidence of unlawful possession of the illicit article on the person from whom the contraband has been seized during the illegal search”.

We can conclude therefore, that while evidence will be admissible if there is an illegality during the search process, evidence obtained during the search can be rendered inadmissible if an illegality occurs at the threshold of the search.

While the same principles may apply to searches conducted by the SEBI, SEBI officers should still be trained in conducting legal searches. Given that these powers have been granted to expedite action by the SEBI in cases involving fraud, insider trading, and other serious violations, it is important that the SEBI does not allow proceedings to be stalled owing to technical flaws in process.

We should note that the principles mentioned above evolved over time through various decisions related to the IT department and stem from the language and intent behind Section 132 of the Income Tax Act, 1961. It still remains to be seen whether the provisions of the Securities Law (Amendment) Ordinance, 2013 will find their way into a statute and what principles will govern the SEBI’s exercise of its newfound powers.

(Deeksha Singh is part of the faculty on myLaw.net.)