Tag: constitutional law

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Supreme Court of India

Rigorous scrutiny of process of distributing natural resources: “Coalgate” judgment advances Supreme Court jurisprudence

GautamBhatia_SupremeCourtofIndiajpgIn a landmark judgment last week, the Supreme Court held that the central government’s allocation of coal blocks to public and private companies during the seventeen years between 1993 and 2010 was illegal and ultra vires the Constitution. The coal block allocation scam, popularly known as “Coalgate”, came to the forefront of the political and legal landscape when a 2012 report by the Comptroller and Auditor General (“CAG”) accused the government of causing huge losses (Rs. 1.86 lakh crore) to the public exchequer in its coal allocations. The same year, M.L. Sharma and Common Cause separately filed petitions before the Supreme Court, challenging the allocation. The petitions were clubbed together and heard jointly by the Court, which delivered its judgment last Tuesday. The political and economic ramifications of Manohar Lal Sharma v. The Principal Secretary (“Coalgate”) are already being felt. The judgment is also of great interest because of its significant contribution to one of the most important constitutional issues in contemporary India: the judicial review of the government’s distribution of natural resources.

The Spectrum Cases – the Supreme Court’s scrutiny of process and policy

In a previous post here, I had discussed the Supreme Court’s opinions in the “2G Spectrum Cases”. In the First Spectrum Case, the Court invoked the principle of equality under Article 14, the common law doctrine of “public trust” (that is, the government acts as a trustee of the people in its ownership and distribution of natural resources), and the requirement of managing natural resources in order to serve the common good (drawn from the Directive Principles of State Policy) to hold that a public auction was the only acceptable way of distributing natural resources to private parties for exploitation. In other words, the Court not only scrutinised – and invalidated – the process by which distribution took place, but also the policy. The Court’s judgment (I argued) conflated two separate issues: the government’s obligations under the Directive Principles and the public trust doctrine, and the Court’s power (or lack thereof) to enforce those obligations. In deciding not only upon the process, but also the policy of allocation, the Court overstepped its authority in entering a field that was both beyond its competence and its legitimacy.

After the First Spectrum Case, the Court embarked upon a process of self-correction. In the Second Spectrum Case (a Presidential reference), the Court limited the holding of the First Spectrum Case only to spectrum allocation, and held that it did not lay down a requirement for public auctions being the only legitimate methods of distribution in all cases. The Second Spectrum Case left open the question, however, of the extent to which the Supreme Court could substitute its own opinions about legitimate policy for that of the government, and various observations in that case point in different directions. In Coalgate, the Supreme Court has gone a long way towards answering that question.

Before the Court, the petitioners contended that the coal block allocation violated statutory requirements under the Mines and Minerals (Regulation and Development) Act, 1957 and the Coal Mines (Conservation and Development) Act, 1974 as well as the public trust doctrine, and Article 14. In paragraphs 12 through 73, the Court examined the statutory question (see an analysis here), and found that the allocation was illegal. Ordinarily, this would preclude any need to examine the constitutional question. However, perhaps in view of the government’s history of amending laws retrospectively to get around court decisions, the Court then proceeded to consider the constitutional questions as well.

The Supreme Court’s refusal to second-guess government policy

SupremeCourt_CoalgateThe process of allocation was done by a Screening Committee constituted by the Ministry of Coal. In paragraph 82 of its judgment, the Court framed the three constitutional issues that arise for its consideration: first, whether the allocation of coal blocks ought to have been done via public auction; secondly, whether the allocations based on the Screening Committee’s recommendations were unconstitutional; and thirdly, whether the allocations made via government “dispensation” (through the Ministry of Coal) were unconstitutional. The Court settled the third question on the basis of statutory violations (paragraph 153). Therefore, we shall focus here on the first two questions. Notice that while the first question pertains to the policy of allocation (public auction versus all other methods), the second question is about the process of allocation.

The Court correctly noted that the first question required it to consider the two spectrum cases discussed above. Affirming the Constitution Bench’s opinion in the Second Spectrum Case, it noted the Central Government’s contention that the increase in input price (due to a public auction) would have a “cascading effect” upon the economy (paragraph 100), the detailed objections of the state governments (such as, for example, that auctions would lead to the concentration of industries) (paragraph 100), and the supply-demand mismatch in 1993 (paragraph 102). On the basis of these considerations, the Court held:

WorkSafeAntiSexualHarassment“[We] cannot conduct a comparative study of various methods of distribution of natural resources and cannot mandate one method to be followed in all facts and circumstances, then if the grave situation of shortage of power prevailing at that time necessitated private participation and the Government felt that it would have been impractical and unrealistic to allocate coal blocks through auction and later on in 2004 or so there was serious opposition by many State Governments to bidding system, and the Government did not pursue competitive bidding/public auction route, then in our view, the administrative decision of the Government not to pursue competitive bidding cannot be said to be so arbitrary or unreasonable warranting judicial interference. It is not the domain of the Court to evaluate the advantages of competitive bidding vis-à-vis other methods of distribution / disposal of natural resources.”

This is consistent with the opinion in the Presidential Reference Case, namely that an auction is required only when the aim of an allocation is to maximise revenue (because clearly, under Article 14, an auction is the only method that bears a rational nexus with an objective of revenue maximisation), but that it is open to the government to have objective other than revenue maximisation, which are also consistent with the public trust doctrine and Article 39. In this case, the Court examined the material on record, which clearly indicated that the government’s objectives went beyond direct revenue maximisation, and refused to substitute its own opinion of which policy would be most consistent with public trust and the Directive Principles. This is exactly how it should be.

Absence of relevant guidelines: Constitutional infirmity in the procedural lapses

The Court then examined the process of allocation, via the Screening Committee. In Paragraphs 109 through 151, it examined the minutes of the 36 meetings of the Screening Committee between 1993 and 2005. The Court found that in its first seventeen meetings, the Screening Committee, at no point, examined the inter se merits of the various applicant companies (paragraph 128). Even when, in its eighteenth meeting the Steering Committee did raise the question of framing guidelines for making that determination, no guidelines were actually framed (paragraph 132). And even when guidelines were framed, the Court found that they “did not lay down any criterion for evaluating the comparative merits of the applicants.” (paragraph 134) The Court noted that in its subsequent meetings, the Screening Committee made its allocations without a discussion about the inter se merits of the applicant companies (see, for example, paragraph 135, 137, 138, and 139 for specific instances), and even changed its own guidelines repeatedly (paragraph 136). In 2005, for the first time, the Screening Committee advertised for applications, but yet again, its allocations demonstrated no comparative assessment or evaluation of the applicants (see, for example, paragraphs 143, 146.1, and 148 for specific instances).

On the basis of these findings, in paragraph 150, the Supreme Court listed twenty-two procedural flaws with the allocation process, most of which had to do with the absence of any considerations about the inter-se merit between the applicant companies, the lack of any objective criteria for making that determination, and the constant changes in the norms and guidelines.  Thus, in paragraph 154, the Court held:

(From left to right), Chief Justice R.M. Lodha, Justice Madan B. Lokur, and Justice Kurian Joseph of the Supreme Court of India, the bench in the "Coalgate" decision.
(From left to right), Chief Justice R.M. Lodha, Justice Madan B. Lokur, and Justice Kurian Joseph of the Supreme Court of India, the bench in the “Coalgate” decision.

“To sum up, the entire allocation of coal block as per recommendations made by the Screening Committee from 14.07.1993 in 36 meetings and the allocation through the Government dispensation route suffers from the vice of arbitrariness and legal flaws. The Screening Committee has never been consistent, it has not been transparent, there is no proper application of mind, it has acted on no material in many cases, relevant factors have seldom been its guiding factors, there was no transparency and guidelines have seldom guided it. On many occasions, guidelines have been honoured more in their breach. There was no objective criteria, nay, no criteria for evaluation of comparative merits. The approach had been ad-hoc and casual. There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily. Hence, the allocation of coal blocks based on the recommendations made in all the 36 meetings of the Screening Committee is illegal.”

It is crucial to note the Court’s assessment of the policy vis-à-vis the process. The Court upheld the non-use of a public auction as a method of distribution because, on a prima facie perusal of the material placed on record by the government, there were evident purposes behind the allocation that went beyond revenue maximisation. The Court did not substitute its own opinion of the legitimacy and validity of the purposes. On the other hand, while holding the process illegal, the Court did so on the basis that the government had placed no material to demonstrate how the allocations were made in a fair and non-arbitrary way. Therefore, much like its holding on the issue of auction, once again, the Court did not go into the question of whether the outcome of the government’s decision on allocation was valid or not, or into the merits of the guidelines; it restricted itself to the question of whether, in the process of allocation, the guidelines included essential considerations of merit and competence for deciding between applicant companies or not. It was the absence of relevant guidelines that constituted the basis of the Court’s decision, holding that the allocation was illegal.

Coalgate, therefore, represents an advance upon the route first marked out by the Court in the Second Spectrum Case. The Court will examine, for legality, the process of distributing natural resources. It will examine whether, during the process, the government has taken into account relevant considerations to ensure transparency and fairness. It will not, however – keeping in mind considerations of institutional competence and legitimacy – question the outcome of the process, or the policy behind the process.

The Court’s judgment is pragmatic and wise, and deserves to be lauded. One question remains open, however: what if the Screening Committee had prescribed guidelines for deciding inter-se merit between applicants, but the petitioners argued that the Committee’s allocation was contrary to its own guidelines? In other words, what degree of scrutiny will the Court apply to the government’s implementation of its own procedures, when disputed factual issues arise? Unlike an auction, where a violation of the results of the auction can be objectively determined, that enquiry is much harder to undertake when standards are at least partly subjective. Will the Court apply a hands-off test, taking the government’s determinations at face value, and insisting only upon the presence of guidelines (as it does, for instance, under Article 356) or a proportionality test, drawn from administrative law? Or, keeping in mind the principles of public trust and Article 39, will it subject them to a more rigorous scrutiny? Perhaps we need another Constitution bench to decide that question.

(Gautam Bhatia blogs at Indian Constitutional Law and Philosophy.)

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Supreme Court of India

A valid reason – On constitutionalism and the removal of governors

KhageshGautamThe Governor of a state is appointed for a five-year term but serves at the “pleasure of the President”, which under our Constitution, is effectively the pleasure of the Union Cabinet. Assume that a political party, let’s call it Party A, was in office in New Delhi, enjoying a majority in Parliament. During its five-year term, P is elected as the President of India and the Union Cabinet advises P to appoint G as the Governor of a state. Later, Party A loses the general elections and Party B is voted into office. Now, the Union Cabinet comprising members of political party B wants to remove G from office. Well, all they have to do is advice P to do so, right?

Not so fast. Even though he may not be very ‘pleased’ to issue orders removing G, who is probably a fellow member of Party A, Article 74(2) (known as the ‘Presidential Aid and Advice Clause’) makes it mandatory for him to do so when the Union Cabinet ‘advises’ so. As it happens, the same thing has been done many times before in the history of the Indian republic. In fact, Party A probably did the same thing while they were in office.

In 2010, a unanimous Constitution Bench of five judges of the Supreme Court in B. P. Singhal v. Union of India, (2010) 6 SCC 331, held that another member of Party A would not have the locus standi to approach the Supreme Court on behalf of G and seek a writ prohibiting the Union Cabinet from removing the latter from office. “The petitioner has no locus to maintain the petition in regard to prayers claiming relief for the benefit of the individual Governors”, the Court had said refusing to issue a writ of prohibition “quashing the removal of the four Governors” and a writ of mandamus allowing the Governors to complete the remainder of their five-year terms. This other member of party A could, however, maintain the petition if there was a substantial question of public importance involved – he just cannot seek a writ of prohibition on behalf of G.

The petitioner in Singhal had argued that the President cannot ‘withdraw’ his ‘pleasure’ under Article 156(3) in an arbitrary manner but can do so only in some ‘rare and exceptional circumstances’ on grounds similar to those prescribed for impeachment of the President or a Supreme Court judge and that even when the pleasure is withdrawn, a notice and a hearing would have to be given to the Governor and a speaking order will have to be passed. In response, the government, citing Article 74(2), argued that the Supreme Court cannot enquire into the advice tendered by the Union Cabinet to the President and that while of course the President cannot remove the Governor arbitrarily and there has to be a reason for removing the Governor, there is no requirement for the President to actually tell the Governor (or for that matter anyone else) what that reason actually is. Therefore, since the Supreme Court cannot inquire into that reason as well, the removal is effectively not subject to any judicial review.  The Court steered a middle course and held – “The doctrine of pleasure … is not a license to act with unfettered discretion to act arbitrarily, whimsically or capriciously. It does not dispense with the need for a cause for withdrawal of the pleasure. In other words, the “at pleasure” doctrine enables the removal of a person holding office at the pleasure of an authority, summarily, without any obligation to give any notice or hearing to the person removed, and without any obligation to assign any reasons or disclose any cause for the removal, or withdrawal of pleasure. The withdrawal of pleasure cannot be at the sweet will, whim and fancy of the authority, but can only be for a valid reason.”

Therefore, while there is no reason for the President to actually inform the Governor of the reasons for removal, there has to be a ‘valid reason’. But who will decide whether there was a valid reason? No prizes for guessing. The Supreme Court.

Shekhar Dutt, M.K. Narayanan, and Ashwani Kumar have all recently resigned as Governors of Chattisgarh, West Bengal, and Nagaland respectively and there has been media attention on Shiela Dixit's position as the Governor of Kerala. All images are from the Press Information Bureau.
Shekhar Dutt, M.K. Narayanan, and Ashwani Kumar have all recently resigned as Governors of Chattisgarh, West Bengal, and Nagaland respectively and there has been media attention on Shiela Dixit’s position as the Governor of Kerala. All images are from the Press Information Bureau.

So is the fact that Party A went out of office and Party B formed the government a valid reason? The Court rejected the contention that “Governors should be in “sync” with the policies of the Union Government or should subscribe to the ideology of the party in power at the Centre”. “As the Governor is neither the employee nor the agent of the Union Government, we also reject the contention that a Governor can be removed if the Union Government or party in power loses “confidence” in him.”

A Governor’s refusal to act on the advice of a State Cabinet that enjoys the confidence of the legislature of that State, on the other hand, is a very valid reason to remove a Governor. The Court in Singhal quoted with approval, Homi Seervai’s observation to this extent. Seervai of course, made two errors — the economist’s error of believing that people behave rationally and the constitutionalist’s error of believing that people occupying high constitutional offices behave honourably. It would clearly be a waste of political capital for the Union Cabinet to insist on the removal of a Governor notwithstanding the manner in which a Governor is discharging office, even if a Governor has acted on the advice of the State Cabinet. Further, it is precisely to address the problematic behavior of high constitutional functionaries that the Supreme Court had observed in Singhal and elsewhere, that the Governor’s is not a political office. Further, in S. R. Bommai v. Union of India, (1994) 3 SCC 1, a nine-judge bench of the Supreme Court interpreting Article 74(2) held that even though the actual advice tendered by the Union Cabinet to the President is beyond the scope of the judicial review, the materials on the basis of which the President has made the order can be examined. But the burden of proof, which the petitioner has to satisfy, to compel the Court to actually require the government to produce these materials in Court is extremely high.

So then, what constitutes a valid reason to remove a Governor? Well, that of course, still depends on the facts and circumstances of each case.

Khagesh Gautam is an Assistant Professor of Law at Jindal Global Law School and teaches constitutional law.

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Supreme Court of India

Competence and legitimacy: The Supreme Court’s opinions on the distribution of natural resources

GautamBhatia_SupremeCourtofIndiajpgWhat obligations does the State have when it decides to outsource the exploitation of natural resources to private parties? To what extent – if at all – can courts enforce those obligations? These questions have come to the forefront over the last few years and are bound to dominate the political and legal landscape for some time to come. Two events, in particular, have contributed to this: the 2G Spectrum Scam, and the Coal block allocation scam, political controversies that rocked the previous government, and which were ultimately litigated before the Supreme Court. While the Court has reserved its judgment in the latter case, it issued between 2012 and 2014, an assortment of opinions in the former (“the Spectrum Cases”). These opinions go some way towards clarifying the present Court’s stance on these two questions and provide some guidance towards anticipating how future cases will be decided.

Simplifying greatly, the 2G Spectrum controversy arose out of the government’s decision to allocate spectrum to telecommunications companies on a first-come-first-serve basis. The entire process was rent with irregularities, such as an arbitrary advancement of the deadline for applications, and was duly challenged before the Court (the First Spectrum Case). The challenge itself, however, went far beyond simply impugning the specifics of the individual case: it invited the Court to rule on the standards generally applicable to government’s alienation, transference, or distribution of natural resources – a question of policy, if there ever was one. The Court accepted the invitation. It held that in distributing natural resources, “the State [is] bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest.”

LawSchoolInductionIn the operative part of the Court’s opinion, these three principles – equality, public trust, and public interest (or common good) as obligations governing the State’s conduct – are repeatedly run together with little attention paid to the second important question: what is the Court’s institutional role in holding the State to these obligations? Equality, of course, is a constitutionally enforceable duty enforceable in the courts under Article 14. Additionally, the Court derived the doctrine of public trust (that is, in distributing natural resources, the State acts as a trustee for the people), and public interest or common good (whose difference from public trust is never satisfactorily explained) from Article 39(b), which is a non-enforceable Directive Principle of State Policy. Armed with this, the Court then held that “when it comes to alienation of scarce natural resources like spectrum etc., it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest… a duly publicized auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.”

Non-discrimination under Article 14 and the public interest

The bench in the First Spectrum Case - Justices G.S. Singhvi and A.K. Ganguly.
The bench in the First Spectrum Case – Justices G.S. Singhvi and A.K. Ganguly.

This paragraph is worthy of close scrutiny. Essentially, the Court transforms what is meant to be an Article 14 enquiry (requiring the State to adopt a non-discriminatory method) into a public interest enquiry, by holding that non-discriminatory methods of distribution necessarily protect the public interest. It then substitutes its own vision of the public interest for that of the State’s, and holds that the only method consonant with that public interest is an auction (indeed, the Court expressly overrode the Telecome Regulatory Authority’s (TRAI) opinion in favour of a first-come-first-serve allotment by holding that TRAI could not “make recommendations which would deny people from participating in the distribution of national wealth and benefit a handful of persons.”)

Courts lack the institutional legitimacy and the competence to hold the government to some standards

The Court’s opinion is unfortunate, because it conflates the two very distinct questions that were outlined at the beginning of the essay. In finding that the government is bound by standards of equality, public trust and the common good, it automatically takes upon itself the task of determining the content of those standards, as well as their enforcement. This, however, is anything but obvious: there are many things that the State ought to do, which must be enforced at the ballot box, via social movements or elsewhere – but not in the courts. This is because one of two reasons might exist to prevent courts from ruling on the matter: reasons of institutional competence, and reasons of institutional legitimacy. Structurally, courts are not equipped and do not have the resources – that is, they lack the competence – to decide certain issues (such as, for instance, the allocation of resources in the national budget). Separately, as unelected bodies, courts have limited authority to interpret laws and protect constitutionally guaranteed rights – they cannot, for instance, frame policy, because that is something that the peoples’ elected representatives are exclusively authorised to do. For all its Article 14 gloss, the Court’s opinion arguably transgresses both these principles, and its failure to engage with them is doubly troubling.

The bench in the Second Spectrum Case - Justices D.K. Jain, S.H. Kapadia, Ranjan Gogoi, Dipak Misra, and J.S. Khehar.
The bench in the Second Spectrum Case – Justices D.K. Jain, S.H. Kapadia, Ranjan Gogoi, Dipak Misra, and J.S. Khehar.

The Government’s reaction was a Presidential Reference attempting to re-litigate the issue under the guise of seeking a clarification on the scope of the judgment. A Constitution Bench of the Supreme Court retreated from the expansive position taken in the first of the Spectrum Cases. In the Second Spectrum Case, it focused on the use of the word “perhaps” in the previous opinion (“an auction is… perhaps the best method…), to hold that the First Spectrum Case was limited to its facts, and did not lay down any general principles. Unfortunately, the Second Spectrum Case, like its predecessor, failed to engage with issues of institutional competence and legitimacy. Once again, it took refuge in the boundlessly manipulable category of Article 14 “arbitrariness” to hold that “when… a policy [of distribution of natural resources] is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated to private entrepreneurs for commercial pursuits… adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14.”

There are two ways of reading the above paragraph. One is that the Court, while narrowing the actual reach of the First Spectrum Case, has kept alive its overall import: public interest and the common good will determine what is or is not arbitrary under Article 14, and that determination ultimately vests with the Courts, to be exercised on a case to case basis. There is, however, another interpretation, which comes through in a subsequent paragraph: if the objective of a particular distribution is not directly social welfare or common good, but indirectly aims at that goal through maximising State revenue, then non-competitive methods will attract Article 14. For example, in the case of spectrum, if the government’s objective in allocating it to private parties is to maximise revenue (which it then – presumably – uses to further the common good), then a non-auction-based method violates Article 14. Notice that this is very close to the traditional Article 14 two-pronged test of intelligible differentia and rational nexus: clearly, differentiating spectrum applicants into those who applied before and after the cut-off date (first-come-first-served) bears no rational nexus with the purpose of revenue maximisation. Indeed, the Court seemed to be heading towards this conclusion (although it didn’t specifically make it), when it held in a subsequent paragraph: “Where revenue maximization is the object of a policy, being considered qua that resource at that point of time to be the best way to subserve the common good, auction would be one of the preferable methods, though not the only method. Where revenue maximization is not the object of a policy of distribution, the question of auction would not arise. Revenue considerations may assume secondary position to developmental considerations.”

The future development of the Court’s jurisprudence depends on which reading of the Second Spectrum Case – narrow or broad – is adopted by future Courts. In this essay, I’ve tried to suggest that it is the narrow reading – one that limits itself to a rigorous intelligible-differentia-rational-nexus Article 14 analysis – is truer to the institutional role of the Court.

Going beyond Article 14

The bench in the Third Spectrum Case - Justices Vikramjit Sen and K.S. Radhakrishnan.
The bench in the Third Spectrum Case – Justices Vikramjit Sen and K.S. Radhakrishnan.

In addition to the core arguments outlined above, the concepts of public trust and public good have played an additional role as background principle guiding the interpretation of legal provisions. In the Third Spectrum Case, a controversy arose over whether the Comptroller and Auditor General (“CAG”) was authorised to demand an audit of private telecom companies under its Article 149 powers. The key question was whether, in Article 149, the term “… any other authority or body”, that came after “Union” and “States” included purely private entities (which were therefore subject to a CAG audit). On a textual reading, it would seem that – on the principle of noscitur a sociis – the term was limited to bodies of a public or quasi-public character. The Court held, however, that “when the executive deals with the natural resources, like spectrum, which belongs to the people of this country, Parliament should know how the nation’s wealth has been dealt with by the executive and even by the UAS Licence holders. When nation’s wealth, like spectrum, is being dealt with by even the private parties, like service providers, they are accountable to the people and to the Parliament.” On a similar note, in Reliance Natural Resources Ltd. v. Reliance Industries Ltd., which involved an extremely complex dispute over the fixing of gas prices, the Court invoked the international law principle that a nations’ people have ultimate sovereignty over natural resources and the public trust doctrine, along with Articles 39(b) and (c) of the Constitution, to interpret Article 297 of the Constitution as prohibiting the State from entering “into a contract that permits extraction of resources in a manner that would abrogate its permanent sovereignty over such resources”, and that the State could not, inter alia, “transfer title of those resources after their extraction unless the [State] receives just and proper compensation.” These two cases demonstrate that Article 14 is not the only recourse available to the Court: it can use the public trust doctrine, and other similar concepts, as background principles to interpret constitutional and other provisions to conform to their requirements. How far it will go down that path before interpretation becomes invention, again, remains to be seen.

(Gautam Bhatia blogs at Indian Constitutional Law and Philosophy.)

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Article 370 – Understand the historical context and the text before you talk about repeal

RichaKaur_myLawPrime Minister Narendra Modi revived the debate over Article 370 of the Constitution of India during his election campaign. A brief tour of the factors that influenced the drafting of that constitutional provision and the interpretation of its text will provide better context to the debate that has followed Mr. Modi’s remarks. These factors include some of the events that transpired between the departure of the British from the subcontinent in August 1947 and the adoption of the Constitution of Jammu and Kashmir in January 1957.

The events that should inform any discussion about Article 370

Out of the 562 princely states in India, Kashmir was among those that the British did not rule directly. The British government transferred the state forever to Maharaja Gulab Singh under the Treaty of Amritsar, 1846, and fixed a nominal annual payment to protect his territories from external enemies. A key development in the history of Jammu and Kashmir in the twentieth century is the crystallisation of the popular opposition to the Maharaja’s rule through the Jammu and Kashmir National Conference, led by Sheikh Abdullah. With India’s independence, Maharaja Hari Singh, the ruler of Kashmir in 1947, had three options: to remain independent, merge with India, or merge with Pakistan. Pressing the Maharaja, who initially wanted to remain independent, to accede to India, Prime Minister Jawaharlal Nehru, in one of his letters said,

“It is of the most vital importance that Kashmir should remain in the Indian Union. But however much we may want this, it cannot be done ultimately except through the goodwill of the mass of the population. Even if military forces held Kashmir for a while, a later consequence might be a strong reaction against this. Essentially, therefore, this is a problem of psychological approach to the mass of the people and of making them feel being in the Indian Union will benefit them. If the average Muslim feels that he has no safe or secure place in the Union, then obviously he will look elsewhere. Our basic policy must keep this in view, or else, we fail.”

HariSingh_Nehru_SheikhAbdullah.jpg
From left to right – Hari Singh, Nehru, and Sheikh Abdullah.

When Hari Singh declared Jammu and Kashmir independent in 1947, Pakistan immediately launched a guerrilla war to free the region, which had a majority of Muslims, from Hindu rule. The Maharaja, realising his inability to protect his territory, requested the Indian government for help. The Indian government insisted that Kashmir accede to India before it would send its army. The Maharaja agreed to the same and the Indian government and the Maharaja signed the accession treaty (“the Instrument”) on October 26, 1947.

Importantly, Clause 5 of the Instrument said that it could not be altered without the state’s consent. Clause 7 specifically protected the state’s right to ratify the application of any future constitution of India in its territory. It read:

“Nothing in this Instrument shall be deemed to commit me in any way to acceptance of any future Constitution of India or fetter my discretion to enter into arrangements with the Government of India under any such future Constitution.”

The Instrument did not result in the merger of Kashmir – governed by its own Constitution of 1939 – into India and only created a temporary settlement under which India’s government would look after the subjects of defence, foreign affairs, and communication while Kashmir would have its own constitution, flag, and Prime Minister. In a broadcast on November 2, 1947, Nehru spoke of the temporary nature of the Instrument.

“…Both the Kashmir government and the National Conference pressed us to accept this accession and to send troops by air, but made condition that the accession would have to be considered by the people of Kashmir later when the peace and order were established…”

AdvancedProfessionalCertificationinCorporateLawPractice_apcclpSome of the other important events that influenced the drafting of Article 370 were the political turmoil in Jammu and Kashmir, the United Nations resolutions calling for a plebiscite in the state on the issue of accession to India, the governments of both India and Pakistan establishing political control over the territories of Kashmir under their control, and the representatives of all the other states choosing, in India’s Constituent Assembly, to not assert their right to separate constitutions.

Jammu and Kashmir, unlike the other princely states, was not willing to accept the Constitution of India and was adamant on acting only on the basis of the terms of Instrument, specifically Clause 7. Gopalaswami Ayyangar, a Minister without portfolio in Nehru’s government, moved the Bill for Article 370 in India’s Constituent Assembly. He made the following argument.

“Till India became a Republic, the relationship of all the States with the Government of India was based on the Instrument of Accession. In the case of other Indian States, the Instruments of Accession will be a thing of the past in the new Constitution; the States have been integrated with the Federal Republic in such a manner that they do not have to accede or execute a document of accession for becoming units of the Republic. It would not be so in the case of Kashmir since that particular State is not yet ripe for this kind of integration due to special conditions prevailing in Kashmir. In the first place there has been a war going on within the limits of Jammu and Kashmir State — part of the State is still in the hands of the enemies, and in the second place, the Government of India have committed themselves to the people of Kashmir in certain respects. They have committed themselves to the position that an opportunity will be given to the people of the State to decide for themselves the nature of their Constitution.”

Sardar Patel, the then Minister of States in India, declared in the Constituent Assembly,

“In view of the special problem with which the Jammu and Kashmir Government is faced, we have made special provisions for the continuance of the State with the Union on the existing basis.”

Soon after India adopted its constitution, the National Conference’s leader Sheikh Abdullah — the interim Prime Minister of the state and the most popular leader of the state’s Muslims —called for independence from India. The government of India dismissed his government and placed him in preventive detention. Seven years after the Constitution of India was adopted, the Constitution of Jammu and Kashmir came into full force. Among its 158 sections is Section 3, which clearly states that, “The State of Jammu and Kashmir is and shall be an integral part of the Union of India” and is not amenable to change even using the amending provisions of that constitution.

Apart from these events, we can also learn much from the text of Article 370, including the use of the word “temporary” in its title.

Lessons from the text of Article 370

Mr. Ayyangar had said in the Constituent Assembly that Article 370 is labeled a ‘temporary’ provision in order to keep the door open for the day when the state of Jammu and Kashmir would merge with India and fully accept the Constitution of India.

Article370(1)_annotated

Sub-clause (a) of Clause (1) states that Article 238, which regulated the relationship between the Union and the princely states before the Seventh Amendment repealed it in 1956, shall not apply in relation to Jammu and Kashmir. Sub-clause (b) provides that the Parliament can make laws for the state of Jammu and Kashmir on matters in the Union and the Concurrent Lists (in Schedule Seven of the Constitution of India) only if the President (after consultation with the government of the state) declares that such a subject fits the description of the matters of defence, communication, finance, and external affairs. Sub-clauses (c) and (d) make it clear that at the time the Constitution came into effect, only Article 1 – which defines the components of the Union of India – and Article 370 itself, applied to the state. Other constitutional provisions can only be made applicable to the state with the agreement of the state government.

Therefore, even though Jammu and Kashmir is a constituent state of the Union of India under Schedule 1 of the Constitution of India, it is exempt from many provisions of the Constitution and is even allowed to have a separate constitution. With Union laws – other than those governing the subjects of defence, external affairs, finance, and communications – not applicable to the state without the permission of the government of Jammu and Kashmir, the state’s residents live under a separate set of laws, including those related to citizenship, ownership of property, and fundamental rights. The provisions of Article 370 and the other exceptions in the Constitution regarding the state have created a unique relationship between the Union government and the state. As MP Jain points out, “the two characteristic features of this special relationship are, (1) the State has much greater measure of autonomy and power than enjoyed by the other States and (2) Centre’s jurisdiction within the State is more limited than what it has with respect to other States.”

Today, a number of provisions of the Constitution of India stand extended to the state of Jammu and Kashmir. Important amongst these are Article 356, which deals with the imposition of President’s rule in a state and the jurisdictions of the Supreme Court, the Election Commission, and the Comptroller and Auditor General. There is however, a vast area that still remains under the exclusive jurisdiction of the state government. The Indian Penal Code, 1860, the Prevention of Corruption Act, 1988, the Religious Institutions (Prevention of Misuse) Act, 1988, and the Delhi Special Police Establishment Act, 1946 are some crucial Union laws that are not at all applicable to the state. The Protection of Human Rights Act, 1993, the Commissions of Inquiry Act, 1952, the Unlawful Activities (Prevention) Act, 1967, and the Representation of the People Act, 1951 are only partly applicable.

Can Article 370 be amended under the provisions of the Constitution?

Article370(2)and(3)_annotatedThe answer is no. Article 368, which contains the provisions governing the amendment of the Constitution, applies to all the other states of India except Kashmir. In relation to Kashmir, a proviso has been added to Article 368 by the Constitution (Application to Jammu and Kashmir) Order, 1954, which says that no constitutional amendment “shall have effect in relation to the State of Jammu and Kashmir” unless applied by an order of the President of India, under Article 370. Clause 3 of Article 370 states that the President can issue a notification to cease the operation of Article 370 or to restrict it operation only on the recommendation of the Constituent Assembly of the state.

Thus any modification or deletion of this Article requires the recommendation of the state’s Constituent Assembly — an improbable condition, given that the Constituent Assembly of Jammu and Kashmir was dissolved in November 1957.

A solution that has been suggested to this obstacle is an amendment of the Constitution of India to remove the requirement that the recommendation of the Constituent Assembly is necessary to remove the Article. But even such an amendment under Article 368 requires issuance of a Presidential order under Article 370, which in turn will require the state government’s concurrence by the President under Clause (1)(d) of the current provision.

The consequences of repeal

Given that Article 370 represents Jammu and Kashmir’s “unique relationship” with India, a probable consequence of its repeal would be the undermining of the position of the state in relation to India. A.G. Noorani has argued that Article 1, which lists the territories of India, is applicable in relation to the state of Jammu and Kashmir only through Article 370 and that, therefore, the extinction of Article 370 would mean the exclusion of Jammu and Kashmir from the constitutionally listed territories of the Union of India. If, as he says, the application of Article 1 to Jammu and Kashmir is subservient to Article 370, the abrogation of Article 370 would sever the constitutional link between India and Jammu and Kashmir and the Indian constitution will automatically cease to be applicable to Jammu and Kashmir. As the former Chief Justice of the Jammu and Kashmir High Court, BA Khan argued last year, “if Article 370 is abrogated, then technically and legally, the foundation of Jammu and Kashmir’s accession to India would cease to exist.”

(Richa Kaur is part of the faculty on myLaw.net.)

(The article has been amended to reflect the fact that the proviso to Article 368 for the purpose of Jammu and Kashmir, has been added by the Constitution (Application to Jammu and Kashmir) Order, 1954. – Ed.)

Categories
Human Rights

A judgment very much in error — Part 3 (presumption of constitutionality and judicial overreach)

NoticeAndStayAdityaVerma_SupremeCourtcolumnWe need to get rid of two red herrings that have captured at least some of the debate that followed the Supreme Court’s decision in Suresh Kumar Koushal and Another v. NAZ Foundation and Others. The first is the issue of the presumption of constitutionality of the Indian Penal Code, 1860 (“IPC”) and the second relates to whether the Court characterised the Delhi High Court’s judgment as an instance of judicial overreach.

The question of presumtion of constitutionality

The rule of presumption of constitutionality of laws is that when any law is under judicial review, it is for the person challenging its constitutionality to establish its unconstitutionality. It is a rule of procedure applicable to cases in which the constitutional validity of a law has been called into question. It is not a substantive rule. If the law is not shown to be unconstitutional, its validity will be upheld. Conversely, the presumption of constitutionality is rebuttable, and it does not prevent a law from being declared unconstitutional.

The presumption of constitutionality of a law does not mean that a law is actually constitutional any more than the presumption of innocence until proof of guilt in criminal cases means that a person accused of a crime is actually innocent — it only means that the task of proving guilt lies on the prosecution.

Indian colonial laws authored by people like Thomas Babington Macaulay (left) and James Fitzjames Stephen (right) continue to benefit from the presumption of constitutionality.
Indian colonial laws authored by people like Thomas Babington Macaulay (left) and James Fitzjames Stephen (right) continue to benefit from the presumption of constitutionality. Macaulay is considered the author of the Indian Penal Code while Stephen is considered the author of the Indian Evidence Act. 

There is little controversy about the rule of presumption of constitutionality applying to laws made after the Constitution of India came into force. However, the IPC (including Section 377) is a pre-Constitution law. The High Court stated (Paragraph 105 of its judgment) and others have argued that the presumption of constitutionality of laws does not or ought not to apply to pre-Constitution laws, primarily because the colonial law could not possibly have anticipated the requirements of constitutional validity.

To the contrary, in Madhu Limaye v. Sub-Divisional Magistrate, (1970) 3 SCC 746, at page 753, a seven-judge bench of the Supreme Court has held:

“Pre-constitution laws are not to be regarded as unconstitutional. We do not start with the presumption that, being a pre-constitution law, the burden is upon the State to establish its validity. All existing laws are continued till this Court declares them to be in conflict with a fundamental right and, therefore, void. The burden must be placed on those who contend that a particular law has become void after the coming into force of the Constitution by reason of Article 13(1), read with any of the guaranteed freedoms.”

According to Article 395 of the Constitution, two pre-Constitution laws that were obviously at odds with the Constitution were expressly repealed – the Indian Independence Act, 1947, and the Government of India Act, 1935. According to the Article 372, laws in force prior to the commencement of the Constitution shall continue in force, subject to the other provisions of the Constitution, until altered or repealed. This should be read with Article 13(1), which makes pre-Constitution laws void “in so far as they are inconsistent with the provisions of [Part III – Fundamental Rights]”. This constitutional stricture applicable to pre-Constitution laws applies in analogous terms to post-Constitution laws, by virtue of Article 13(2).

The standard for validity of laws remains the same, whether the law in question is a pre-Constitution law or a post-Constitution law. Therefore, if Parliament does not repeal a law (such as Section 377, IPC), it remains in force by virtue of Article 372, unless its unconstitutionality is established. It bears reiteration that the presumption of constitutionality does not imply that Section 377 is actually constitutional any more than the presumption of constitutionality implies that any post-Constitution law is actually constitutional.

If the presumption of constitutionality does not apply to pre-Constitution laws, two anomalies arise.

– Firstly, there is no reason for anyone to consider themselves bound by any provisions of a law such as the IPC (which also criminalises murder, for instance), unless those provisions are declared constitutional. Not having a presumption of constitutionality is another way of saying that the law is not valid until found to be so by the Supreme Court or any high court.

– Secondly, many pre-Constitution laws still in force today are relatively innocuous – for instance, the Indian Contract Act, 1872, the Transfer of Property Act, 1882, the much-loved Code of Civil Procedure, 1908, and a substantial chunk of the law of tort (not all pre-Constitution laws are in the form of statutes). Is there any reason these laws should not have the presumption of constitutionality?

The Supreme Court in this case was correct to state that the presumption of constitutionality applies to Section 377. The error, as far as this issue is concerned, was in then stating (in Para 32 of the judgment):

“While [the presumption of constitutionality] does not make the law immune from constitutional challenge, it must nonetheless guide our understanding of character, scope, ambit and import.”

Article13(1)_ConstitutionofIndia.jpgThe phrase ‘character, scope, ambit and import’ appears to refer to the constitutional challenge. In other words, the presumption of constitutionality appears to erroneously guide the understanding of the question of the validity of the law, as if the presumption is a self-reinforcing one. A procedural rule was allowed to have a substantive impact. The presumption is only a rule of procedure meant to indicate that the party challenging constitutionality must establish it to succeed.

The fact that Parliament has not interfered with Section 377 only means that the presumption of constitutionality is applicable to it, not that the law, by virtue of having implied popular approval, is somehow more likely to be constitutionally valid. Popular approval has no relevance to Article 13. The question of whether a law is consistent with fundamental rights has to be decided by analysing the law with reference to those fundamental rights, and not by looking at how many people (presumably) support that law. The Constitution guarantees fundamental rights and democracy, not fundamental rights subject to democracy.

Did the Supreme Court characterise the High Court judgment as a case of judicial overreach?

Two or three passages from the Supreme Court’s judgment appear to have created an impression (especially prior to the publication of the full judgment online) that the main reason for setting aside the judgment of the High Court was the doctrine of separation of powers, with the Court acknowledging that interpreting Section 377 as unconstitutional would be an instance of judicial overreach. These passages perhaps were:

“In fact a constitutional duty has been cast upon this Court to test the laws of the land on the touchstone of the Constitution and provide appropriate remedy if and when called upon to do so. Seen in this light the power of judicial review over legislations is plenary. However, keeping in mind the importance of separation of powers and out of a sense of deference to the value of democracy that parliamentary acts embody, self-restraint has been exercised by the judiciary when dealing with challenges to the constitutionality of laws.” (Paragraph 26)

“In its anxiety to protect the so-called rights of LGBT persons and to declare that Section 377 IPC violates the right to privacy, autonomy and dignity, the High Court has extensively relied upon the judgments of other jurisdictions.” (Paragraph 52)

“Notwithstanding this verdict, the competent legislature shall be free to consider the desirability and propriety of deleting Section 377 IPC from the statute book or amend the same as per the suggestion made by the Attorney General.” (Paragraph 56)

By describing the interpretation by the High Court of Section 377 as “legally unsustainable”, the Supreme Court has impliedly endorsed the previous interpretations of Section 377, as a result of which any carnal intercourse other than penile-vaginal sex is classified as ‘against the order of nature’. Admittedly, this position of law was a result of judicial interpretation, which is certainly not beyond the scope of the Supreme Court.

While deference to legislative preference may appear to be part of the overall reluctance to uphold the judgment of the High Court, adjudication upon the core issues of the constitutional validity of Section 377 vis-à-vis Articles 14, 15, and 21 was unavoidable. The judgment of the Supreme Court is unambiguous in concluding that in substance, Section 377, as interpreted prior to the judgment of the High Court, does not violate the Constitution.

(The previous parts of this article are here and here.)

(Aditya Verma practices as an Advocate at the Supreme Court of India. He is an alumnus of NLSIU, Bangalore, and is on the roll of solicitors in England and Wales.)