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Tag: Supreme Court

Taking a stand on sitting down

SayakDasguptaA few years ago, I had read an article about the peculiar social and cultural differences between Japan and the west. It was written by an American man who had married a Japanese woman and settled down in Tokyo. He wrote of an incident when his parents-in-law had come to eat dinner. As they entered, the writer, as a matter of habit, proceeded to help his mother-in-law take her coat off and put it on the coat rack. He then realised that his father-in-law had not taken too kindly to that rather innocent act. The writer’s wife told him later that while taking your guest’s coat was a gesture of polite hospitality in the west, in Japan it was an act of deep intimacy – one only husbands can do for their wives. When it comes to love, the Japanese are culturally not as flamboyant, effusive and demonstrative as the Americans or Europeans (the Japanese millennial might be more westernised, but this seemingly still holds true for most of Japan). They don’t hug and kiss each other all the time. They don’t say “I love you” at the end of every conversation. Instead, the Japanese show their affection for their spouses and even their children through a hundred small acts that demonstrate caring and intimacy. This restrained, understated form of love might seem strange and even silly to westerners, but that doesn’t make it any less valid. In fact, it has its own charm and beauty.

This is also true of Indians. I am sure only a minority of the Indian readers of this blog will have actually heard their parents or grandparents openly profess their love for each other. And your mother or father might not actually say the words, but they show you they love you in other ways (making your favourite food, feeding you before they eat, giving you extra portions), and perhaps you do the same. Now, imagine if some people found this unspoken love ridiculous and made it a rule that every morning before you take a bath you must step outside your house and shout “I love my mother/father/spouse” loudly, for everyone to hear. Isn’t that strangely intrusive and oddly obtrusive at the same time? What does bathing have to do with loving your family? Why do you have to demonstrate to everyone regularly that you love your mother? Do you really need to remind yourself that you love your father? Will this make you love them more?


Shyam Narayan Chouksey (Image from Facebook)

The Supreme Court’s interim order pursuant to the writ petition filed by Shyam Narayan Chouksey seems to suggest that your love for your country should be demonstrated openly and publicly every time you go to a theatre to watch Shah Rukh Khan romance an actress in the Swiss Alps or Salman Khan single-handedly beat up the entire Indian mafia. Many people have asked a very pertinent question: why movie theatres? On the face of it, playing the national anthem before a film might seem like quite an arbitrary way to instil patriotism in people. It’s like making people sing ‘Vande Mataram’ every time they open a book. But film as a medium is optimal for eliciting an affective reaction. When people go to watch a film, you have a large group of people in a single enclosed space completely focused on whatever is happening on the screen. It is the perfect setting to make you feel whatever the person in control wants you to feel. As author China Mieville has said, “You know how easy it is to emotionally manipulate you. Hollywood is a factory to manipulate you. That is what it does. That is what it is for. Emotion is very easy to manipulate. You’re in a darkened room, there are loud noises, there’s light shining in the darkness. It is an overwhelming experience in certain ways. I think quite a lot of the time when people say ‘I liked it’, what they mean is something along the lines of ‘I was temporarily stupefied by noises and lights for which my limbic system has no adaptive evolutionary mechanisms to respond with.’” The movie theatre’s unique ability to sweep you off your feet is why it has historically been the preferred venue for propaganda. Of course, it was in a movie theatre where this all began.


The disputed scene from Kabhi Khushi Kabhi Gham (Image from YouTube)

In 2001, Shyam Narayan Chouksey was in Jyoti Talkies, a movie theatre in Bhopal, watching Karan Johar’s Kabhi Khushi Kabhi Gham. In one scene clearly designed to pull at the heartstrings of the patriotic NRI, an Indian-origin child born in the UK surprises his parents by singing the Indian national anthem at an event in his preppy private school. Mr. Chouksey immediately stood up for the anthem, but was inconsolably dismayed to see that everyone else hadn’t done the same. In fact, some even booed at him (probably because he was blocking the screen). He was also angered by the movie’s treatment of the national anthem. He filed a writ at the Madhya Pradesh High Court and it went to a double bench. Coincidentally, one of the judges was Dipak Misra J, the same judge who delivered the interim order on November 30, 2016. The 2003 judgment delivered by Misra J is quite a read, with several paragraphs dedicated to flowery, grandiose, baroque (to the point of incoherence) praise of the national anthem. “The national anthem is pivotal and centripodal to the basic conception of sovereignty and integrity of India,” it declares. “It is the marrow of nationalism, hypostasis of patriotism, nucleus of national heritage, substratum of culture and epitome of national honour.” Denouncing the scene in the film in which a young boy falters while singing the national anthem, Misra J writes: “They have not kept in mind ‘vox populi, vox dei’. The producer and the director have allowed the National Anthem of Bharat, the alpha and omega of the country to the backseat. On a first flush it may look like a magnum opus of patriotism but on a deeper probe and greater scrutiny it is a simulacrum having the semblance but sans real substance. There cannot be like Caesar’s thrasonical brags of ‘veni, vidi, vici.’ The boy cannot be allowed to make his innocence a parents rodomontrade, at the cost of national honour. In our view it is contrary to national ethos and an anathema to the sanguinity of the national feeling. It is an exposition of ad libitum.” The High Court’s decision was to ban Kabhi Khushi Kabhi Gham until the scene in question was deleted.


Justice O. Chinnappa Reddy who delivered the Bijoe Emmanuel judgment (Image from

The judgment referred extensively to the landmark case of Bijoe Emmanuel & Ors. vs. State of Kerala & Ors. AIR 1987 SC 748. On July 8, 1985, the Emmanuel siblings – 15-year-old Bijoe, 13-year-old Binu and 10-year-old Bindu – were attending school when the headmistress announced that the national anthem would be sung in the classroom. The siblings stood up but did not sing, as they were Jehovah’s Witnesses, a specific Christian sect that prohibits its followers from singing in praise of anything or anyone apart from their god. Their father, V.J. Emmanuel asked for a special concession for his children on religious grounds and the headmistress and senior teachers agreed. However, word reached a member of the legislative assembly who raised the matter in the house and soon a senior school inspector ordered the headmistress to expel the children. Mr. Emmanuel filed a writ petition in the Kerala High Court, but when the decision went against him, he appealed to the Supreme Court. The Supreme Court upheld the students’ right not to sing the national anthem, stating that their fundamental rights under Articles 19(1)(a) and 25(1) had been infringed. In its 2003 judgment, the Madhya Pradesh High Court seems to have relied specifically on the following paragraph from the Bijoe Emmanuel judgment: “We may at once say that there is no provisions of law which obliges anyone to sing the National Anthem nor do we think that it is disrespectful to the National Anthem if a person who stands up respectfully when the National Anthem is sung does not join the singing. It is true Art. 51-A(a) of the Constitution enjoins a duty on every citizen of India ‘to abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem.’ Proper respect is shown to the National Anthem by standing up when the National Anthem is sung. It will not be right to say that disrespect is shown by not joining in the singing.”

Misra J seems to have relied on a literal reading of this paragraph when he, in the interim order dated November 30, 2016, made it compulsory for all moviegoers to stand up when the national anthem plays in a movie theatre. He writes in the order, “Be it stated, a time has come, the citizens of the country must realise that they live in a nation and are duty bound to show respect to National Anthem which is the symbol of the Constitutional Patriotism and inherent national quality. It does not allow any different notion or the perception of individual rights, that have individually thought of have no space. [sic] The idea is constitutionally impermissible.” And showing respect means standing because that has been mentioned in the Bijoe Emmanuel judgment. One wonders, if there had been no Bijoe Emmanuel judgment, would the order have made it compulsory for people to sing it as well? Just like there is no provision of law that obliges anyone to sing the national anthem, there is also no provision that obliges anyone to stand for the national anthem. The Prevention of Insults to National Honour Act, 1971, a tiny act with just four sections, states in Section 3: “Whoever intentionally prevents the singing of the Indian National Anthem or causes disturbances to any assembly engaged in such singing shall be punished with imprisonment for a term, which may extend to three years, or with fine, or with both.” Would sitting quietly during the singing of the national anthem constitute prevention of singing the national anthem?


Justice Ruth Bader Ginsburg

Earlier this year, American football player Colin Kaepernick caused a huge controversy in the US when he sat or kneeled during the American national anthem in a series of matches to protest the killing of several black US citizens by the police. Was he being unpatriotic? Many of his fellow athletes didn’t think so and joined him. When asked about it in an interview, Justice Ruth Bader Ginsburg said, “I think it’s really dumb of them. Would I arrest them for doing it? No. I think it’s dumb and disrespectful. I would have the same answer if you asked me about flag-burning. I think it’s a terrible thing to do. But I wouldn’t lock a person up for doing it. I would point out how ridiculous it seems to me to do such an act. It’s dangerous to arrest people for conduct that doesn’t jeopardise the health or well-being of other people. It is a symbol they are engaged in.” This is the point. Forcing people to demonstrate faux patriotism under the threat of arrest is dangerously close to totalitarianism. Playing the national anthem in movie theatres serves no reasonable purpose and has, in fact, been the cause for violence in the recent past, including the case of Salil Chaturvedi, who was assaulted in a movie theatre in Goa for not standing up for the national anthem. Why did he not stand up? He is a paraplegic. In the 90s, he had represented India in two wheelchair tennis tournaments. “Irrespective of my contribution to the country, I still need to prove my patriotism,” he said. People have varied relationships with their nation and have varied ways of expressing them. Forcing everyone to conform to one arbitrary way of engaging with their country will not make them more patriotic. As Justice Chinnappa Reddy said at the very end of the Bijoe Emmanuel judgment, underlining, in my opinion, the true spirit of the decision: “our tradition teaches tolerance; our philosophy preaches tolerance; our constitution practices tolerance; let us not dilute it.”


Rabindranath Tagore

One last thing. The author of our national anthem, Rabindranath Tagore, was often very vocally critical of the very concept of a “Nation”. In 1916, he visited Japan and was alarmed by what was being done in the name of nationalism there. I started this piece with Japan and it seems natural that I should end with Tagore’s observations about it: “I have seen in Japan the voluntary submission of the whole people to the trimming of their minds and clipping of their freedom by their government, which through various educational agencies regulates their thoughts, manufactures their feelings, becomes suspiciously watchful when they show signs of inclining toward the spiritual, leading them through a narrow path not toward what is true but what is necessary for the complete welding of them into one uniform mass according to its own recipe. The people accept this all-pervading mental slavery with cheerfulness and pride because of their nervous desire to turn themselves into a machine of power, called the Nation, and emulate other machines in their collective worldliness.”

(Sayak Dasgupta wanders around looking for things to do.)

Written by myLaw

Open court hearings in review petitions after Mohd. Arif (2014)

SohamGoswami_DeathPenaltyProcedureThe Supreme Court of India has qualified the scope and extent of the right to life enshrined in Article 21, through a series of judgments from A.K. Gopalan v. State of Madras, AIR 1950 SC 27 to Maneka Gandhi v. Union of India, AIR 1978 SC 597, ensuring that infringements upon life and personal liberty may only be made through “fair, just and reasonable procedure”.

So what of the procedure extinguishing life from a person who has been found guilty of capital offences? There is a comprehensive procedure under Indian law to ensure that a person sentenced to death may be afforded the maximum opportunities to present his side of the case so that he can hopefully be acquitted or his sentence commuted. A Court of Sessions, which is the competent court to record evidence and convict the accused, must cite its reasons in writing (Section 367 of the Code of Criminal Procedure, 1973) for awarding the death sentence and must then submit that decision to the state’s High Court for confirmation (Section 366). The sentence is considered valid only after confirmation and the convict may (if the High Court certifies the case under Article 134 of the Constitution) move the Supreme Court. The convict has a right of appeal if the High Court has either (a) overturned an acquittal or lesser conviction by the Court of Sessions and awarded the death sentence or (b) withdrawn proceedings before the Court of Sessions and conducted the same in the High Court.

The Supreme Court’s review jurisdiction

Under Article 137 of the Constitution, the Court may review cases decided by them. Order XL of the Supreme Court Rules, 1966 further require review to be done in chambers (that is, by judges, conferring amongst themselves without the assistance of counsel) and based on written pleadings made by counsel.

The Supreme Court in P.N. Eswara Iyer v. Registrar, Supreme Court of India, AIR 1980 SC 808, upheld the constitutional validity of Order XL, Rule 2 (requiring review in chambers), citing the heavy burden upon the Supreme Court to hear oral arguments in all cases within its jurisdiction.

The Supreme Court however, in Mohd. Arif v. Registrar, Supreme Court of India and Others, (2014) 9 SCC 737, dealt with the question of whether death sentence cases would form a class by themselves, meriting separate treatment.

The disagreement in Mohd. Arif

Writing for the majority, Justice Rohinton F. Nariman held that due to the nature of the death penalty, where:

1. the punishment is irreversible, and

2. due to lack of sentencing guidelines, it is left to various judges as to the quantum of sentence to be awarded (for instance, one judge might award the death sentence in a certain case, while another judge might sentence someone to life imprisonment for the same offence and same circumstances), sentencing was often arbitrary;

the highest standard of scrutiny was required in such cases.

Justice Rohinton F. Nariman interpreted Justice V.R. Krishna Iyer’s (the author in P.N. Eswara Iyer) ruling as allowing for such cases to be heard orally in open court. He quotes paragraph 29A of P.N. Eswara Iyer “…indeed, there is no judicial cry for extinguishment of oral argument altogether.”

However, Justice Chelameswar dissented, holding that the question of arbitrary sentencing did not arise as the same judges of the Supreme Court who passed the original judgment were required to sit on the review bench.

However, Mohd. Arif (the lead petitioner) was denied the opportunity to file a review petition himself. This was because he had already submitted a curative petition (the last option in the Supreme Court) and the Court held that to grant him a review petition now would infinitely delay the process. The review petition is filed and admittedor dismissed prior to the curative petition.

Eventually, a Constitution Bench of the Supreme Court on January 19, 2016 allowed Arif to re-open his review petition on the ground that he would be the only person not receiving the benefit of a review petition, which would be unfair to him; further, the dismissal of the curative petition should not preclude the petitioner from receiving the benefit of a review petition in open court, no matter how slim the chance of success may be.

As one can see upon perusal of the judgment in Mohd. Arif, the purpose was to ensure that, no matter how slim, people receiving the death sentence should be given as many opportunities as permissible under the law for evidence to be re-appreciated. However, the problem that is apparent from the dissent of Justice Chelameswar is that ordinarily, the same Bench hearing the original case on merits deals with the review petition (unless any of the judges retire). It is unlikely therefore, that they would change their opinion on whether the convict should receive the death penalty; thus, the purpose of the review petition is not realised.

The purpose of the review bench, as is evident from Order XL of the Supreme Court Rules, is to merely check whether there is an error apparent on the face of the record. The composition of the bench should therefore, not matter, as the matter for appraisal should not lead to different conclusions. At the same time, the same judges having already looked into the matter once, would ordinarily not be willing to sit and review the whole case again.
Mohd. Arif is however, a pathbreaking judgment given its implications for prisoners on death row—that at the penultimate stage of proceedings at the Supreme Court, they are entitled to an open court hearing and reappreciation of evidence in their case argued by their lawyer. It remains to be seen, however, the manner in which Supreme Court deals with these petitions.


(Soham Goswami, currently in the third year at ILS Law College, Pune, is an intern at the Centre on the Death Penalty. The views expressed in this article are his alone.)

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Supervening circumstances and the commutation of a death sentence: A more definitive law from the Supreme Court

ProceduralLawOfTheDeathPenalty_RahulRamanIf the situation that prevailed at the time a sentence of death was delivered has changed, can the Supreme Court take those changed circumstances into account to commute a sentence of death? Less than two years ago, the Supreme Court in Shatrughan Chauhan v. Union of India, 2014 (3) SCC 1, looked into whether executing a death sentence notwithstanding the existence of such supervening circumstances would violate among other things, Article 21 of the Constitution. After weighing such circumstances in different petitions, it commuted the penalty of fifteen individuals to life imprisonment and laid down a more definitive law on the Court’s power of commutation.

The petitioners had claimed that the executive, while exercising its power under Articles 72 or 161, did not consider any supervening events. In a few previous decisions such as Triveniben (1989) and Jagdish v. State of Madhya Pradesh (2009), the Court had declared that it had a duty to protect a prisoner’s right to life till his last breath. This provided the Supreme Court with the legal basis to take supervening circumstances into consideration and those pleaded in Shatrughan Chauhan included delay, insanity, solitary confinement, and procedural lapses.

Delay in processing mercy petitions

The question of whether the executive’s delay in processing a mercy petition should be considered a supervening circumstance has troubled the Court for a long time. There is no stipulated time limit within which the executive has to dispose a mercy petition and often, there is inordinate delay.

Earlier, a division bench of the Supreme Court in T.V. Vatheeswaran v. State of Tamil Nadu, AIR 1983 SC 361, had held that a delay of two years in execution of a sentence after the judgment of the trial court would entitle the prisoner to plead for commutation of his sentence of death to life imprisonment. Soon after however, a three-judge bench in Sher Singh and Others v. Union of India, AIR 1983 SC 465, held that delay alone could not be a good enough ground for commutation of death sentence, and overruled the two-year delay rule. Nevertheless, this decision acknowledged a prisoner’s right to a fair procedure at all stages – trial, sentencing, and incarceration.

To resolve this apparent conflict, a constitution bench took up this issue in Triveniben v. State of Gujrat, 1988 (4) SCC 574. In a landmark verdict, the Court held that while an undue delay would entitle a punished individual to invoke Article 32, Vatheeswaran’s “two-year delay rule” was not correct.

The Court relied on this decision in Shatrughan Chauhan. It held that while considering the rejection of a clemency petition, the Court could not overlook the pain caused to the convict. Therefore, the Court was well within its judicial power under Article 21 read with Article 32 of the Constitution to hear a convict’s grievance and commute a death sentence to life imprisonment if it is found that that there had been undue, unexplained, and inordinate delay in execution due to the pendency of a mercy petition.

The Court decided not to lay down any compulsory period within which the President has to decide a mercy petition. While the Court would make such a determination on the facts and circumstances of individual cases, it suggested that the executive should itself weigh the aspect of delay while disposing of a mercy petition.

The Court also said that the decision of the Court in Devender Pal Singh Bhullar v. State (NCT) of Delhi, 2013 (6) SCC 195, which had disqualified cases under the Terrorist and Disruptive Activities (Prevention) Act, 1987 from scrutiny on account of delay, was per incuriam. Any person sentenced to death could avail “delay” as a supervening circumstance regardless of the offence and the statute under which he has been convicted. Later, the Supreme Court recognised this finding in Navneet Kaur v. State of NCT of Delhi, Curative Petition (Criminal) No. 88 of 2013 (Supreme Court) to commute Devender Pal Singh Bhullar’s death sentence to life imprisonment.

Insanity or mental illness

The next ground considered by the Court was that of “insanity” or “mental illness” as a supervening circumstance. The Court after referring to several international conventions like the International Covenant on Civil and Political Rights concluded that this was a valid supervening circumstance. It noted that once mental illness of the convicted individual is medically certified, executing him would be in violation of the international convention to which India was a party, and of Article 21 of the Constitution.

Solitary confinement

Despite underlining its own finding in Sunil Batra v. Delhi Administration and Others, 1978(4) SCC 494, the Supreme Court decided not to interfere on the ground of “solitary confinement” in Shatrughan Chauhan. Later however, the Allahabad High Court in People’s Union for Democratic Rights v. Union of India, 2015(2) ADJ 2015 and the Supreme Court in Ajay Kumar Pal v. Union of India, 2014(13) SCALE 762 held that “solitary confinement”, along with other factors, was a permissible supervening circumstance to commute death sentence to life imprisonment.

Procedural lapses

The final ground raised was that of “procedural lapses” made by the executive while disposing of mercy petitions. The Court held that the procedures prescribed for the Ministry of Home Affairs were a necessary requirement under Article 21 to treat the death row convicts fairly. It noted that the President should be provided with all the relevant material to assist him in disposing the mercy petitions. The concerned departments cannot give or seek piecemeal information regarding the petition to be decided. However, the scrutiny of a procedural anomaly would be done on a case-to-case basis.

The circumstances raised in Shatrughan Chauhan are not exhaustive. The addition (or removal) of supervening circumstances to this list would depend on the judicial attitudes to reconciling convict’s rights with those of the victim or the society. Further, despite the unambiguous decisions in Triveniben and Shatrughan Chauhan, it is entirely up to the Court to see on an individual basis, how to interpret ‘undue and unexplained’ delay and whether to permit it as a supervening circumstance.

(Rahul Raman is a Project Associate at the Centre on the Death Penalty, National Law University, Delhi.)

Written by myLaw

Amendments to shield eminent domain from the courts have left the Constitution without private property rights

Since Independence, there have been several special laws that have been used by both Union and state governments to acquire land Suhrith_Parthasarathyfrom private individuals. Many of them continue to exist. But, for more than a century, the Land Acquisition Act of 1894 has stood as the centrepiece of the Indian state’s policy of expropriation, used most frequently to acquire private property.

Viewed broadly, the 1894 statute canonised a power of eminent domain, which was thought to be a facet intrinsic to a sovereign. The law gave the authority to government to acquire private land for what the state perceived to be a public purpose, in exchange for a compensation, which, when determined under the process prescribed by the statute, was almost always grossly derisory.

The Union Minister for Rural Development in the UPA government, Jairam Ramesh (left), and Union Minister for Urban Development in the NDA government, Venkaiah Naidu, addressing press conferences on the land acquisition law in September, 2013 and March, 2015.

The Union Minister for Rural Development in the UPA government, Jairam Ramesh (left), and Union Minister for Urban Development in the NDA government, Venkaiah Naidu, addressing press conferences on the land acquisition law in September, 2013 and March, 2015 respectively.

It also allowed the state the authority to acquire land unbothered by the economic and social impact that the acquisition might have on the landowner. The statute did not prescribe any social or environmental impact assessment as a precondition for expropriation, and it also imposed no obligation on the government to rehabilitate those displaced by the acquisition. The lack of any safeguards in favour of the landowner effectively meant that the poor person’s land was viewed as the sole property of the state, as property that could be subjected to legally sanctioned fraud and plunder. It was in this backdrop that in early 2014, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“LARR Act”) was brought into force to replace the 1894 law.

The new act was designed to bring an end to a century-long form of oppression. It sought to define the public purpose, for which land could be acquired, with particular clarity; in cases where land was to be acquired for a private project, the consent of at least 80 per cent of the landowners was mandated; the state was barred from acquiring land for the purposes of establishing private hospitals and private educational institutions; a detailed social impact assessment (“SIA”) and an environmental impact assessment was mandated as a precondition to any acquisition; and, most crucially, compensation for lands acquired was to be fixed at four times the market value of the land, in cases where the property was situated in a rural area, and at two times the market value for properties situated in an urban area.

In all, the LARR Act, which was enacted on a largely bipartisan platform, was meant to usher an era of a more participative democratic process, where the people could have a genuine say in how their land is used. Unfortunately, these changes were far too short-lived.

Immediately upon assuming office, the Narendra Modi-led government criticised the LARR Act as a measure aimed at thwarting development. The premise of the new government’s argument was that expropriation of private property through powers of eminent domain stimulates economic growth, and brings about greater commercial expansion. The LARR Act, as they saw it, was simply antithetical to commonly understood notions of eminent domain.

Their solution, while awaiting parliamentary approval to amend the law, was to bring forth an ordinance. This ordinance, which amends the LARR Act, among other things, does the following. One, it removes a previous bar on acquisitions by the state for the purposes of establishing private hospitals and educational institutions. Two, it removes the necessity to secure the consent of landowners when property is acquired for the purposes of redistribution to private entities. Three, it eliminates the requirement for an SIA when land is acquired for a special category of purposes, including for the purposes of national security and the defence of India, and for purposes of establishing “industrial corridors,” and “infrastructure” projects.

As is plainly evident, the proposed amendments, which are presently in force through the operation of the ordinance, seeks to revert us to a slightly modified version of the 1894 law, by virtually removing the spine of the LARR Act. The changes amount, as G. Sampath, wrote in The Mint, to what the Marxist geographer David Harvey might have described as “accumulation through dispossession.” The question now is: would these changes, if ultimately enacted by Parliament, be constitutionally sustainable?

Eminent domain and the constitutional right to property

The Constitution of India, as originally enacted, on the one hand, guaranteed to citizens a right to property, while, on the other hand, implanted in the state an express authority to take property through an exercise of a power of eminent domain. Article 19(1)(f), subject to reasonable restrictions in the public interest, guaranteed to all citizens the right to acquire, hold and dispose off property. Article 31 provided that any acquisition of property by the state may be done only for a public purpose and upon payment of compensation, through a validly enacted law. What this meant was that once a person’s privately owned property was acquired by the state in accordance with Article 31, his or her right to hold the property subject to reasonable restrictions under Article 19 was rendered otiose.

In the earliest cases that emanated in post-Independence India out of the exercise by the state of its power to acquire property, the Supreme Court tended to view Article 31 as an embodiment of a power of eminent domain, which inheres in the state as a sovereign.

The term “eminent domain,” wrote Justice Mahajan in State of Bihar v. Kameshwar Singh, (1952) 1 SCR 889, could be traced back to the year 1625 and to the great jurist Hugo Grotius’s work, De Jure Belli et Pacis. “The property of subjects is under the eminent domain of the State, so that the State or he who acts for it may use and even alienate and destroy such property,” wrote Grotius, “not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility, to which ends these who founded civil society must be supposed to have intended that private ends should give way. But it is to be added that when this is done the State is bound to make good the loss to those who lose their property.”

The meaning of eminent domain, in its irreducible terms, was, therefore, according to Justice Mahajan, (a) a “power to take” land (b) “without the owner’s consent,” (c) “for the public use,” after payment of compensation. In the initial years, the power, thus understood, seemed to impede the state in implementing its socialistically driven policies of expropriating land owned by zamindars more than it benefited it. Yet, as we have seen in the decades since, the very idea of viewing eminent domain as a power that is intrinsic to a sovereign has proved problematic. (Usha Ramanathan, “A Word on Eminent Domain”, Displaced by Development – Confronting Marginalisation and Gender Injustice).

Justice Vivian Bose, however, notably warned against using a “doubtful” term such as eminent domain to understand the Indian state’s power to acquire property. Doubtful, not because the term is “devoid of meaning,” but because it enjoys a different shade of meaning in different countries. “In my opinion, it is wrong to assume,” he wrote in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning & Weaving Co. Ltd., AIR 1954 SC119, “that these powers are inherent in the State in India and then to see how far the Constitution regulates and fits in with them. We have to interpret the plain provisions of the Constitution and it is for jurists and students of law, not for Judges to see whether our Constitution also provides for these powers and it is for them to determine whether the shape which they take in India resemble any of the varying forms which they assume in other countries.”

The final draft of Article 31, which constitutionalised the power of eminent domain, was arrived at purely through compromise. There were some in the Constituent Assembly who believed that land had to be usurped from zamindars, without payment of any compensation (or at any rate, by paying only a minimal, meagre amount) to help herald a more equal and just society, while there were others who argued for a strong protection of property rights, requiring the fulfilment of elements of due process prior to any expropriation. The ultimate provision, contained in Article 31, which was almost literally adopted from Section 299 of the Government of India Act, 1935, as Namita Wahi has pointed out, pleased neither group. It merely transferred the debate on the right to property to the court halls around the country. And, contrary to popular discourse, barring few instances where the courts have restrained Parliament’s powers, by objecting to specific acquisition laws, judges have predominantly allowed the state substantial leeway in exercising its power of eminent domain.

Amending the Constitution, protecting eminent domain from the courts

The Supreme Court of India

The Supreme Court of India

Yet, it was in fear of intervention by the courts that the First Amendment to India’s Constitution (whose validity was upheld by the Supreme Court in Sankari Prasad Singh Deo v. Union of India, AIR 1951 SC 458) was introduced in 1951, inserting not only Article 31A, which immunised land reform laws from challenges against violation of fundamental rights, but also Article 31B and concomitantly Schedule IX to the Constitution, which protected 13 particular legislation from challenge under Part III of the Constitution, with added retrospective effect. By virtue of these amendments, the crux of the challenge to the Bihar Land Reforms Act, 1950, which had been struck down by the Patna High Court, prompting the first amendment, was effectively rendered futile. Nonetheless, the Supreme Court, in State of Bihar v. Kameshwar Singh, (1952) 1 SCR 889, found that the Act, which sought to redistribute estates in Bihar, was based on a legitimate public purpose, and was therefore in consonance with Article 31.

Immediately after Kameshwar Singh’s case, the Supreme Court rendered a judgment, in State of West Bengal v. Bela Banerjee, AIR 1954 SC 170, which was significant in its elaboration of the importance of the right to property (Seervai, Constitutional Law of India), and which ultimately led to the Constitution’s Fourth Amendment. Here, a provision of the West Bengal Land Development and Planning Act, 1948 was challenged as violating Article 31, as it limited the compensation payable to the market value of the land as on December 31, 1946.

The word “compensation,” as used in Article 31, the Supreme Court ruled, referred to a “just equivalent of what the owner has been deprived of,” and, therefore it found that the provision offended the Constitution. As a result of this decision, Parliament introduced the fourth constitutional amendment and altered Article 31(2) to provide that a law under which compensation is determined for acquisition of land could not be questioned on the ground that such compensation is inadequate.

This amendment, as the legendary constitutional law scholar H.M. Seervai wrote, was considered in four different cases, P. Vajravelu Mudaliar v. Special Deputy Collector, Madras, AIR 1965 SC 1017, Union of India v. Metal Corporation of India, AIR 1967 SC 637, State of Gujarat v. Shantilal Mangaldas, AIR 1969 SC 634, and RC Cooper v. Union of India, AIR 1970 SC 564 (“the Bank Nationalisation Case”). Each of these cases contradicted the other on the issue of compensation under Article 31. Ultimately, it was the decision in the Bank Nationalisation Case, which was heard by a bench of ten judges, that proved most telling, rendering the fourth amendment’s purport nugatory, and reverted the law to the position established previously by the court in Bela Banerjee. The Supreme Court held in the Bank Nationalisation Case that the word compensation as used in Article 31, even after the fourth amendment, continued to denote a just equivalent of what the landowner had been deprived of. As had become common by now, when a court’s ruling tended to affect the ideology of the government in power, what resulted was a constitutional amendment: in this case, the 25th amendment.

Through this, Article 31(2) was altered, and the word “compensation” was replaced with the word “amount”; acquisitions under Article 31 were expressly removed from being subject to the right guaranteed under Article 19(1)(f), as was held in the Bank Nationalisation case; and laws giving effect to the directive principles contained in clauses (b) and (c) of Article 39 could no longer be questioned on the ground that they violated the rights guaranteed in Articles 14, 19 or 31.

Eventually, the Supreme Court in Kesavananda Bharati v. State of Kerala, AIR 1973 SC 1461, struck down the last limb of the 25th amendment alone. Here, a 13-judge-bench famously held that constitutional amendments could not be used as a tool to abrogate the basic structure of the Constitution: in this case, the power of the courts to judicially review Parliamentary law.

For the purposes of the right to property, though, it was Justice Khanna, whose opinion in Kesavananda proved the most decisive, that continues to resonate. He held that the right to property was not a part of the basic structure in his efforts to illustrate the fact that fundamental rights could, in limited circumstances, be annulled through constitutional amendment.

The jagged hole left by the 44th amendment

The decision in Kesavananda heralded an era of a battle between the government and the court over who holds the ultimate authority to interpret the Constitution. The give and take between Parliament and the Supreme Court may not quite have completely thwarted the state’s program to bring forth land reforms—if anything, the courts sought to place the odd impediment that they found was mandated under the Constitution.

But governments, impatient as they were, thought it necessary to bring forth a plethora of constitutional amendments aimed at placing land laws completely beyond the scope of judicial review. Ultimately, in 1978, the Janata Party, which had come into power following the Indira Gandhi-enforced Emergency, through the 44th constitutional amendment, removed altogether the guarantee of the right to property as a fundamental right. Both Article 19(1)(f) and Article 31 were completely obliterated. In their place, Article 300A was introduced, according the right to property the mere non-fundamental status of a legal right. These amendments, as Seervai argued, failed to grasp that Articles 19(1)(f) and 31 “were so closely interwoven with the whole fabric of our Constitution that those rights cannot be torn out without leaving a jagged hole…”

In the short run, the 44th amendment might have even helped in bringing forth more equivalence in land ownership, as desired by the government at the time. But, during the decades that followed, with an atmosphere of neo-liberalism taking over the Indian polity, the amendment has only contributed towards increasing discrimination. The power of eminent domain has been regularly abused to serve private interests. As Namita Wahi has pointed out, a number of measures have been introduced to place property at the hand of select institutions and corporations, often transcending constraints of public purpose contained in the original doctrine of eminent domain. (Namita Wahi, “State, Private Property and the Supreme Court”, Frontline).

For instance, “with the enactment of the Special Economic Zones Act in 2005,” wrote Wahi, “the acquisition of land by government to hand over to private industry which had happened in an ad hoc manner in previous decades became official government policy.” The meaning of “public purpose” has been expanded to absurd lengths, and different governments have overseen the most arbitrary expropriation of land, particularly from farmers, through the archaic, and draconian, Land Acquisition Act of 1894. These acquisitions have been rarely, if ever, disturbed by the courts, and even the compensation paid to individual landowners has been seldom enhanced.

What’s more, state governments also enacted their own special legislation to acquire land, bypassing, in the process, even the minimal safeguards contained in the central law.

Thus far, the Supreme Court has not ruled on the merits of the validity of the 44th constitutional amendment. It has only occasionally taken the pains to point out that the removal of the right to property from Part III has accorded substantial leeway to the state in expropriating land. (See for example, KT Plantation Pvt Ltd. v. State of Karnataka, (2011) 9 SCC 1.) Most of the Supreme Court’s decisions seem to indicate that it too has been equally buoyed by the supposed joys of liberalisation.

When viewed in this context, the LARR Act of 2013 represented a substantial breakthrough. It sought to realign the nature of property in India, by guaranteeing to citizens a right to own and hold land, which ought to ideally enjoy fundamental status. To the extent that it provided not only for an enhanced and more just compensation, but also for a social and environmental impact assessment, and for a voice to landowners, the LARR Act was a decidedly successful piece of legislation. It is therefore that the present ordinance, which seeks to remove many of the integral facets of the LARR Act, has to be considered as an anathema. To make things worse, by virtue of the 44th amendment, the state can today argue convincingly that the ordinance is legally valid and that it stands on substantial constitutional bedrock.

None of the diktats of the LARR Act, which have been removed by the ordinance, can be considered as constitutionally mandated, if we were to assume that the 44th amendment has accorded the state a carte blanche over private property, as some Supreme Court decisions seem to suggest. (See for example, Jilubhai Nanbhai Khachar v. State of Gujarat, AIR 1995 SC 142).

A historic re-interpretation of the Constitution is required

The state, unless convinced by the abiding public sentiment on the matter, would argue in the case of the proposed amendments: firstly, that the consent of landowners and the conduct of an SIA are simply not required as a matter of constitutional guarantee, and secondly that in the absence of an express prohibition of acquisition by the state for private purposes, the argument that the ordinance violates traditional notions of eminent domain, in allowing acquisition of land for private educational institutions and private hospitals, does not pass muster.

To negate such submissions, we would require the Supreme Court to shed its apathy, and to interpret the Constitution in its right spirit. The court will have to reconsider the understanding of eminent domain that has pervaded its jurisprudence, over the years. The removal of the fundamental right to property, by the 44th amendment, cannot be considered as a final nail in the coffin of rights over land.

To rebut the notion that eminent domain inheres in a sovereign, we might require an intervention that transcends mere judicial review, an intervention that is democratically justifiable. But what the courts can do is to examine Article 14, and the basic guarantee to the people of equal protection of the laws. Interpreted in its finest light, the right to equality ought to impose a superior obligation on the state to protect private property, and to give people a genuine say in how their land is used. To not hold so would negate the very idea of citizenship.

(Suhrith Parthasarathy is an advocate practising at the Madras High Court.)

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Sweet sixty-five

NoticeAndStayAdityaVerma_SupremeCourtcolumnIn the eleven months between December, 2013 and October, 2014, of the thirty Supreme Court judges in office at the moment, eleven will turn sixty-five and retire. Unsurprisingly, due to the staggered increase in the strength of Supreme Court judges from eight to thirty-one since 1950, this is the highest rate of retirement in the history of the institution by number. Even in terms of percentage (approximately thirty-seven), the proportion is among the highest for any equivalent period (including resignations and deaths in office).

Supreme Court judges who will retire between October 2013 and December 2014

These eleven judges currently preside over all but four of the fifteen benches of the Supreme Court.

Following the convention of seniority, we should expect three judges to hold the office of Chief Justice over this period — the incumbent Justice P. Sathasivam, followed by Justice R. M. Lodha, and then by Justice H. L. Dattu.

While their sheer number makes these changes significant, it is difficult to speculate if they will lead to a change in the institutional character or overall judicial policy of the Supreme Court. Even in administrative and procedural aspects of Supreme Court practice, where the Chief Justice has discretion, due to the relatively short terms of the individual office bearers, it is tough to consistently implement new policies over a reasonable period of time and assess results.

If the Judicial Appointments Commission starts to function during this period, it will provide an opportunity to analyse what rules and conventions it creates for itself, and how it follows them.

From the lawyers’ perspective, there will be some uncertainty about the fate of cases listed for final disposal or regular hearing before particular judges, if arguments in such cases are expected to take more than a week or two, for instance. The quick succession of retirements will pose a serious logistical challenge, particularly to ensure that part-heard cases do not have to be re-argued ab initio before a new bench due to unforeseen circumstances, and that judges have sufficient time to deliberate and write detailed judgements, where necessary. There may also be cause to be wary of cheeky requests for adjournment not explicitly intended to avoid a case being heard before a particular judge!

One may wonder: why do judges retire? Why at 65? Why do they not have the option of continuing as long as they are physically and mentally fit for the role? In theory, Article 128 of the Constitution provides a mechanism for a retired judge to sit and act as a judge of the Supreme Court. In practice, this provision may just as well not exist.


The idea that judges should retire is neither universal nor consistently followed across the world. For instance, appointment to the United States Supreme Court is for the lifetime of the judge (unless a judge resigns or is removed upon impeachment).

ThurgoodMarshall_SCOTUS_die_at_110_lifetime_appointmentA general argument may be raised that not having an age of retirement allows too much power to an individual judge over a long period of time, and, therefore, change is necessary. There may even be a chance that a judge may wish to continue in office without being physically or mentally fit for the role. On the contrary, in India, where the Supreme Court does not sit en banc, the power that an individual judge has, may be limited in practice. The risk of a judge wishing to stay on the bench for the sake of it may be speculative.

In the respective courts of last resort in many other countries, such as the U.K., Australia, and Canada, retirement ages of judges range between seventy and seventy-five. The Justice Venkatachaliah report (2002) recommended sixty-eight as the age of retirement of judges of the Supreme Court of India. The issue of the appropriate age for retirement of judges was discussed at length in the Constituent Assembly Debates as well. Though he eventually agreed with sixty-five in 1949, an excerpt from Jawaharlal Nehru’s speech is a good starting point for the debate:

This business of fixing age-limits in India in the past was, I believe, governed by entirely the service view. The British Government here started various services, the I.C.S. which was almost manned entirely by Britishers and then later on some Indians came in, and other services. The whole conception of Government was something revolving round the interests of the services. No doubt, these services served the country; I do not say anything against that. But, still, the primary consideration was the service and all these rules were framed accordingly.

With regard to judges, and Federal Court Judges especially, we cannot proceed on the lines of the normal administrative services… A young man may be exceedingly good, an old man may be bad. But the point is if an old man has experience and is thoroughly fit, mentally and otherwise, then it is unfortunate and it is a waste from the State’s point of view to push him aside, or force him to be pushed aside, and put in some one in his place who has neither the experience nor the talent, perhaps. We are going to require a fairly large number of High Court Judges. Of course the number of Supreme Court Judges will be rather limited. Nevertheless, there are going to be more and more openings, and the personnel at our disposal is somewhat limited.

Today, if there are more cases than what a thrity-one-strong Supreme Court can decide in a reasonable amount of time, and there are judges who will be of retirement age or older but are able and willing to serve, at the very least, both thrity-one and sweet sixty-five merit a rethink.

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

Written by myLaw

Access, apps, and arithmetic

NoticeAndStayAdityaVerma_SupremeCourtcolumnThree days ago in Hauz Khas in New Delhi, on Chaudhary Dalip Singh Marg:

Me: “Bhaiya, Supreme Court chaloge?” (Brother (?), will you go to the Supreme Court?)

Auto-driver: “Kaunse waale?” (Which one?)

As I informed him that there is only one Supreme Court in India, ‘India Gate ke paas’ (‘Near India Gate’), I thought to myself whether there was any chance that the auto-driver was subtly driving home the point that the Supreme Court being located only in one place made it relatively inaccessible for the rest of the country, and that smaller benches all over the country was the way to go?

Now, that would be an enlightened auto-driver. He may be right or wrong about Supreme Court benches, but by this standard, the ‘ordinary litigant’ would likely be a truly informed and empowered one!

Of course, what gave the auto-driver away was ‘Ek Saket mein bhi toh hai’ (‘There is one in Saket as well.’). It would have meant precious little to him to learn that ‘Woh toh District Court hai’ (‘That is a District Court’). If the rule of law presupposes that citizens have a basic awareness of their courts, we have a long way to go.

The astute use of technology will doubtless be critical in making courts more accessible. The Supreme Court’s recently released Display Board application for Android mobile devices seems to be an attempt in this direction. After it was released (with some fanfare), I imagined that the app would look something like this:



Current Status - All Courts

Current Status – All Courts

Current Status - Court-wise

Current Status – Court-wise

Search by Judge Name

Search by Judge Name


Search by Court Number + Item Number

Search by Court Number + Item Number. Images courtesy Akhil Verma.








At the moment, the application replicates the Supreme Court Display Board as on the website. One hopes that it is a work in progress, with an update to follow soon (there is a Java version as well).

There are harmless quirks, and there are harmless quirks that can result in a case being dismissed for ‘non-appearance’. Imagine that you are an advocate on your very first visit to the Supreme Court. You are nervous, but prepared.  You have two ‘matters’ – one each in Court 14 and (the currently unoccupied) Court 15. It looks like you will not have to run around too much because the court rooms should be adjacent.

Beware! As you bound up the stairs from the main entrance, you will see Court 1 (the Hon’ble Chief Justice’s Court) in front of you, flanked by Courts 2 and 5 to your left, and Courts 3 and 4 to your right.

You eventually figure out that Courts 6-15 are accessible through a long corridor leading to the other end of the compound. The first room to your left after the corridor, thankfully, is Court 14. Phew! Next to that is… Court 12. Confused? Where is Court 15, or even 13 for that matter! You run along further, crossing 10, 8, and 6. Then 7, 9, 11, and 13, after which is 15 (more than 100 metres away from Court 14).

Remember: 5, 2, 1, 3, 4; 14, 12, 10, 8, 6, 7, 9, 11, 13, 15 (counting anti-clockwise).

Why this sequence? Beats me, though a Court by any other number would be just as cramped for space.

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

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Loot by lottery – illegal lottery controversy exposes holes in legal framework

The state of Kerala is brewing with controversy relating to the printing and sale of illegal lotteries. Every story relating to the issue has found its way to the front page of local newspapers and has become the topic of much debate between candidates contesting in the local body elections scheduled for this month.

Rumour has it that when a difference of opinion arose between the two promoters of Bhutan State Lottery – Monica Lottery Distributers and Martin Lottery Distributers, the former shadow-whistle-blew the latter’s irregularities. But as the controversy snowballed with the judgment of Justice P.R. Ramachandara Menon of the Kerala High Court, all interested parties buried the hatchet and fought against the judgment, which had restricted the number of lottery draws permissible in a week, to one.

Image here and on article banner originally published on rowland_rick's photostream on Flickr. Image published under a Creative Commons Attribution 2.0 Generic License.

Image here and on article banner originally published on rowland_rick’s photostream on Flickr. Image published under a Creative Commons Attribution 2.0 Generic License.

Apart from rumours, there have been consistent news reports about Megha Lottery (sub-agent of Martin Lottery) printing illegal lottery tickets at Shivakashi and at other private printing presses. The law specifically stipulates that lotteries should be printed only at presses approved by either the Reserve Bank of India or the Indian Bankers’ Council. Taking note of these press reports along with the fact that the government of Bhutan had not renewed the agreement with Martin Lottery, but had appointed Monica Lottery as the new promoter, the state government refused to accept advance tax from Megha Lottery. Payment of advance tax under Section 10 of the Kerala Tax on Paper Lotteries Act, 2005, is an essential condition for the transport of printed lottery tickets into the state of Kerala.

The Congress-led opposition were up in arms against this refusal, since Monica Lottery had been appointed in March 2010, and the government had taken action only in September 2010, implying that Finance Minister, Thomas Issac, had permitted Megha to sell illegal lotteries during the intervening period.

Megha Lottery, faced with indirect prohibition on the sale of lotteries, approached the Kerala High Court for a writ of mandamus directing the government to accept the payment of advance tax. The government objected to the writ petition, contending that Megha was not a ‘Promoter’ of Bhutan State Lottery. The Single Judge (P.R. Ramachandara Menon, J.) of the Kerala High Court, after recording the submission of the government of Bhutan, that Megha was indeed its promoter, allowed the petition in part and directed the Kerala Government to accept advance tax to the extent permissible under sub-section 4(h) and sub-section 4(j) of the Lotteries (Regulation) Act, 1998, which was a Central legislation.

Sub-section 4(h) states that ‘no lottery shall have more than one draw in week’ and sub-section 4(j) states that ‘the number of bumper draws of a lottery shall not be more than six in a calendar year’. The Single Judge, relying on the aforesaid provisions in the 1998 Act, went on to say that the practice of conducting more than one lottery in a week under different schemes and different names was not permitted under the Act. According to the judge, sub-section 4(h) was incorporated in the statute to protect poor and illiterate people, who belong to the lower strata of society from the lure and glitter of becoming rich on a new dawn. The ‘cooling period’ of one week is provided to prevent such people from gambling with their life. Therefore, the promoters of lotteries were directed to furnish a statement showing the details of the draws (under all names or schemes, put together) to be conducted during the succeeding month under sub-section 10(1) of the state Act while remitting advance tax.

This judgment was challenged before the Division Bench of the Kerala High Court, both by the Kerala Government as well as by the Megha Lottery Agency. The Division Bench, consisting of Justices Thottathil B. Radhakrishnan and P. Bhavadasan, vacated the direction of the Single Judge restricting the number of lotteries per week. The Division Bench held that the state or its promoter was entitled to organise any number of lotteries and any kind of lotteries. According to the Division Bench, Section 4(h) of the Lotteries (Regulation) Act, 1998 did not have any impact on the number of lotteries or schemes the government could organise.

The Division Bench of the Kerala High Court held that it was the Central Government that is duty bound to ensure that no provisions of the rule or Act were violated. According to the court, any action against any lottery or promoter had to come from the Centre, although the state was not powerless in informing the Centre about such violations. The High Court also dismissed the appeal filed by the State Government and upheld the finding of the Single Judge that Megha was the promoter of Bhutan Lotteries, and issued a direction to the State Government to accept the advance tax from the promoter without any interest. The court observed that no special contract was required to engage a promoter to distribute the lottery. The court concluded that it was for the State and Union Governments to ensure that there were no violations of the Lotteries’ Regulation Act and other rules “so that vulnerable sections of society are not exploited through the temptations offered by lotteries.”

It requires no special legal dissection to understand that the judgment of the Division Bench of the Kerala High Court is rendered in blatant violation of statutory provisions. Although the judgment is apparently delivered to protect vulnerable sections of society from the temptations offered by the lotteries, the court has subtly helped the lottery tycoons by nullifying the statutory restriction imposed on the number of lottery draws permissible in a week. The State Government is expected to approach the Supreme Court, which may render finality in this issue.

The main drawback in the legal framework that regulates the conduct of lotteries is the absence of any power for the State Governments. Under the Central Act of 1998, a State government can either declare the entire state as a lottery-free-zone or let all the lotteries reign freely in the state. The reason for such restricted power is that state governments alone were permitted to organise and conduct lotteries and not private individuals. Therefore to prevent any unfair discrimination between competing state governments, the Central Act denied them powers of regulation.

In reality, it is not the state government, but their private promoters under the seal of the government, that are organising and selling lotteries. Although the State of Kerala has devised the mechanism of advance tax to indirectly regulate the conduct of foreign state lotteries and their promoters, the courts have consistently stuck down any positive action regulating their conduct, as the same is within the executive realm of the Central Government.

Therefore, in order to save the poor and ignorant of the society from being cheated through the sale of illegal lotteries, the Central Act of 1998 has to be amended granting appropriate powers to state governments to regulate conduct of lotteries organised by the private promoters.

P. Thomas Geeverghese is an advocate at the Kerala High Court.

The view expressed in this article are personal.

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State of Karnataka v. Azad Coach (2010) – Are penultimate sales exempt from sales tax?

A Constitution Bench of the Supreme Court has, in State of Karnataka v. Azad Coach, finally shed some clarity on the issue of when penultimate sales, that is, a sale just before the one that occasions the export of the goods from India, would be entitled to exemption from the imposition of sales tax. This decision comes about in the context of Section 5 of the Central Sales Tax Act, 1956, (“the CST Act”) and hence requires a brief analysis of this provision as introduced and subsequently amended.

Section 5 of the CST Act

This provision provides for three important things: 1) the definition of a “sale in the course of export”; 2) the definition of a “sale in the course of import”; and 3) when a penultimate sale is deemed to be a “sale in the course of export”. Of these, the first and third limbs are relevant to this analysis.

As per Section 5(1), a sale is deemed to be in the course of export either when the sale occasions such export, or the sale has taken place through the transfer of title documents after the goods have crossed the customs frontier of India.

Section 5(3) deems any sale of goods immediately prior to the sale, (“the penultimate sale”) that occasion the export of “those goods” out of the territory of India also to be a sale in the course of export if the penultimate sale took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.

The rationale for Section 5(1) stems from Article 286(1)(b) of the Constitution of India, which provides that no law of a state shall impose, or authorise the imposition of any sales tax on the sale or purchase of goods when such sale or purchase takes place in the course of export of goods, and Article 286(2), which authorises Parliament to formulate principles for determining when a sale is in the course of import or export.

Section 5(3), which was introduced only in 1976, came about as a legislative response to the Supreme Court decision in Md. Serajuddin v. State of Orissa, (1975) 2 SCC 47, where the Court had held that only the sale by the exporter, and not the penultimate sale to the exporter, would be exempt from payment of sales tax by virtue of being a sale in the course of export. The Statement of Objects and Reasons to the Amending Act of 1976 captures the special economic situation prevalent in those times when many goods could be exported only by specified agencies such as the State Trading Corporation. Moreover, many goods were being exported taking the assistance of experienced export houses.

Since the sales to these agencies and export houses were actually meant to enable the agency or export house to export those goods in compliance with an existing contract or order and were thus inextricably connected with the export of the goods, it was felt necessary to exclude them from the ambit of sales tax. This exemption would also render Indian exports competitive by not exposing them to an additional sales tax burden.
1976 to 2010: the “Same Goods” Theory

In Sterling Foods v. State of Karnataka, (1986) 3 SCC 469, the assessee sought exemption for tax on the purchase of shrimps, prawns, and lobsters that were meant for subsequent export after going through the process of cutting of heads and tails, peeling, de-veining, cleaning and freezing, relying on Section 5(3).

In this context, the Supreme Court, while allowing for such exemption, held that Section 5(3) would be attracted only where the goods purchased by an assessee for the purpose of complying with the agreement or order for or in relation to export, were the same as those exported out of the territory of India. If by reason of any processing after purchase, the identity of the goods had changed to such an extent that commercially, and from the viewpoint of people in that trade, they had transformed into a new and different kind of goods for export, the purchases of original goods made by the assessee would not be in the course of export. On the facts of this case, the Supreme Court came to the view that the processing had not resulted in the goods losing their original character.

Relying on this decision, the Revenue sought to confine the scope of Section 5(3) to cases where the same goods were involved in the penultimate sale as well as the export sale, without losing their character or identity in any manner. In Vijayalakshmi Cashew Company v. Deputy Commercial Tax Officer, (1996) 1 SCC 468, the Supreme Court upheld the denial of exemption to the sale of raw cashew nuts, which were later converted to cashew kernels and exported. The Court reasoned that the raw cashew nuts could have been used for very many purposes and the process of extracting the kernels from these cashew nuts was indeed elaborate, and hence it could not be said that the raw cashew nuts purchased in the penultimate sale were the same as those sold to the exporter, that is, the cashew nut kernels. With this decision, the “same goods” theory had gained acceptance as a precedent.

However, immediately after the decision in Vijayalaxmi Cashew Co., the Supreme Court shed some more clarity on sale in the course of import in K. Gopinathan Nair v. State of Kerala, (1997) 10 SCC 1, such clarity seemingly leading to some more confusion. This was a judgment rendered in the context of Section 5(2) of the CST Act, which dealt with sale in the course of import rather than export. The assessees here were engaged in the purchase of raw cashew nuts and export of cashew kernels after processing the raw cashew nuts. They had placed orders for import of raw cashew nuts from African countries through the Cashew Corporation of India (“the CCI”), which was a canalising agency. Pursuant to these orders, the CCI had imported these raw cashew nuts and made them available to the assessees. Consequently, the assessees claimed that the subsequent sales transactions with the other users were purchases in the course of import and hence falling outside the purview of sales and purchase tax. They contended that these local sales had occasioned the import of the raw cashew nuts from Africa and were hence, in the course of import. This contention of the assessees was rejected by the Kerala High Court, leading to an appeal before the three-judge bench of the Supreme Court. The Supreme Court confirmed the view taken by the High Court and in the process, relied on some of its earlier judgments rendered in the context of Section 5(1). According to the Court, the requirement for sale in the course of export in sub-section 5(1) was the same as the requirement in sub-section 5(2). Hence, reliance was placed on the Constitution Bench decision in Ben Gorm Nilgiri Plantations Co., Coonoor v. Sales Tax Officer, Special Circle, Ernakulam, [1964] 7 SCR 706, where the Court had held that in cases where the export was inextricably linked up with the sale so that the bond between them could not be dissociated without committing a breach of the obligations between the parties arising under statute or contract, the sale would be in the course of export.

Endorsing this test, the Supreme Court in Gopinathan Nair had taken the view that a sale in the course of import must necessarily require the concerned sale to occasion the import and the sale and the import must have an integrated and intertwined connection.

The following principles were laid down by the Court as governing the issue of when a sale would be in the course of import or otherwise, of which principles (2) and (6) are most relevant to the present discussion:

(1) The sale or the purchase, as the case may be, must actually take place.

(2) Such sale or purchase in India must itself occasion such import, and not vice versa, that is, the import should not occasion such sale.

(3) The goods must have entered the import stream when they are subjected to sale or purchase.

(4) The import of the concerned goods must be effected as a direct result of the concerned sale or purchase transaction.

(5) The course of import can be taken to have continued till the imported goods reach the local users only if the import has commenced through the agreement between foreign exporter and an intermediary who does not act on his own in the transaction with the foreign exporter and who in his turn does not sell as principal the imported goods to the local users.

(6) There must be either a single sale which itself causes the import or is in the progress or process of import or though there may appear to be two sale transactions they are so integrally inter-connected that they almost resemble one transaction so that the movement of goods from a foreign country to India can be ascribed to such a composite well integrated transaction consisting of two transactions dovetailing into each other.

(7) A sale or purchase can be treated to be in the course of import if there is a direct privity of contract between the Indian importer and the foreign exporter and the intermediary through which such import is effected merely acts as an agent or a contractor for and on behalf of Indian importer.

(8) The transaction in substance must be such that the canalizing agency or the intermediary agency through which the imports are effected into India so as to reach the ultimate local users appears only as a mere name lender through whom it is the local importer-cum-local user who masquerades.

A few riders about the decision in Gopinathan Nair deserve emphasis at this juncture. First, that this decision was not in the context of penultimate sale and Section 5(2). Second, and more important, that this decision did not have to address the “same goods” theory at all. In other words, the “same goods” theory could very well co-exist with the inextricable link test as the former dealt with the nature or character of the goods sold, and the latter with the nature of the transaction. Keeping these qualifications in mind, we can now discuss the factual matrix in Azad Coach.

Facts of the Present Case

The assessee here had entered into a contract with TELCO to manufacture and sell bus bodies to the latter, in pursuance of the latter’s obligation with the exporter, Lanka Ashok Leyland Ltd., Colombo, to manufacture and export buses to the exporter. The assessee was expected to fabricate bus bodies on the chassis supplied by the exporter in accordance with the specifications given by the exporter. The Revenue sought to levy sales tax on the penultimate sale between the assessee and TELCO on the ground that the subject matter of this sale was “bus bodies” while the subject matter of the export was “buses”, a product which was different in character from “bus bodies”.

The Revenue succeeded up to the tribunal stage, while the assessee succeeded before the Division Bench of the Karnataka High Court on appeal. The Revenue took it on appeal to the Supreme Court, where the Division Bench referred the matter to the Chief Justice for posting it before an appropriate larger bench. The primary reason for this reference, as seen from the decision of the Division Bench reported as State of Karnataka v. Azad Coach Builders, (2006) 3 SCC 338, was the apparent conflict between the decisions in Sterling Foods and Vijayalaxmi Cashew Co., on the one hand, and the decision in K. Gopinathan Nair, on the other. Thus, the matter came to be heard by a Constitution Bench of five judges, which delivered a unanimous verdict through Justice K.S. Radhakrishnan, on September 14, 2010.

Constitution Bench favours the Assessee

The Constitution Bench held that the penultimate sale of bus bodies entered into between the assessee and TELCO in this case would qualify for exemption from sales tax under Section 5(3). The Court has apparently followed the test in Gopinathan Nair and taken the view that for a sale to occasion the export of goods, there must exist such a bond between the contract of sale and the actual exportation that each link would be inextricably connected with the one immediately preceding it. Explaining the various phrases employed in Section 5(3), the Court held that the words ‘to comply with the agreement or order’ meant all transactions which were inextricably linked with the agreement or order occasioning the export. The expression ‘in relation to’ was also comprehensive and ought not to be construed in a restrictive manner.

Applying these principles to the case at hand, the Constitution Bench considered it material that the bus bodies were built to the specifications given by the foreign buyer, and on the chassis provided by them. These bus bodies were not of any use in the local market, and were specifically manufactured to suit the requirements and specifications of the foreign buyer. Hence, the sale of these bus bodies had occasioned the export of the goods.

Rejecting the “same goods” theory argument raised by the Revenue, the Court held that when the transaction between the assessee and the exporter and the transaction between the exporter and foreign buyer were inextricably connected with each other, this theory would have no application.

Section 5(1) and 5(3): Blurring the distinction

This decision has blurred the distinction between the respective requirements under Section 5(1) and 5(3). All the earlier decisions on the inextricable link between the sale and the export or import were in the context of deciding whether the sale had occasioned the import or not. Applying this test, the only conclusion that could really have been arrived at was that the agreement between TELCO and the foreign buyer in Colombo would amount to a sale in the course of export and hence exempt from payment of sales tax. The penultimate transaction between TELCO and the assessee was occasioned by the export and not vice versa. Hence, the inextricable link theory would not really render this sale of an input commodity to be in the course of export.

The Court, in such circumstances, was bound by the language of Section 5(3), which is a deeming provision. As per this provision, even a penultimate sale of the goods, which would otherwise not be a sale in the course of export of “those goods” since only the ultimate sale had led to the export, was deemed to be a sale in the course of export of those goods as long as it satisfied the requirements of this sub-section. These requirements in turn were that the sale took place after the agreement or order for or in relation to such export, and was for the purpose of complying with such agreement. The Court’s divergence from the “same goods” theory is inexplicable, as a plain reading of Section 5(3) insists on the penultimate sale being the sale of the same goods that are sought to be exported.

If the logic of the Supreme Court is followed, any sale of inputs required for the commodity sought to be manufactured and subsequently exported can also be inextricably linked with the export, especially if the foreign buyer insists on some specifications. This was not the intention behind the introduction of Section 5(3), as is seen from the extract of the Statement of Objects and Reasons, reproduced in the judgment. The purpose of this deeming provision was meant to address the issue of resort to intermediary export houses by the local seller, leading to a peculiar situation where the sale between the export house and the foreign buyer was exempt under Section 5(1), while the sale of the same goods to the export house was liable for payment of sales tax. The Supreme Court has ignored this rationale while importing the “inextricable link” theory to a sale under Section 5(3).

To conclude, the decision of the Supreme Court in State of Karnataka v. Azad Coach Builders Pvt. Ltd. is definitely a welcome one for traders and exporters who would otherwise have had to pay sales tax on the value of inputs purchased in order to fulfill their export obligation. This decision also has the incidental effect of lowering the price of the exported commodity since the sales of many of the inputs can be exempted from sales tax on the ground that they are inextricably linked with the export. This is an economically desirable outcome.

(Ananth Padmanabhan is an advocate at the Madras High Court.)

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Strike a balance: A comment on advocates who strike work

In his autobiography, Before Memory Fades, Fali S. Nariman wrote:

We demean ourselves and our profession when we resolve to strike work, and (so) paralyse the working of courts, where public cases and causes demand our expertise, intercession and assistance.

Pro-Telengana advocates recently boycotted courts in Andhra Pradesh. The protesting advocates had demanded a 42 per cent quota for advocates from the Telengana region in the appointments to various law officers, such as government pleaders and public prosecutors in courts, as a compensatory measure. After many days of stalemate, the Government finally acceded to the demands. The episode generated sharp and divergent public opinion about the mode of protest.

Andhra Pradesh High Court. Image here and on the article banner by Cephas 405; original image published here. Image published under the Creative Commons Attribution-Sharealike 3.0 License.

Andhra Pradesh High Court. Image here and on the article banner by Cephas 405; original image published here. Image published under the Creative Commons Attribution-Sharealike 3.0 License.

When the Supreme Court in Harish Uppal v. Union of India, (2003) 2 SCC 45 was faced with a similar question, it had observed:

It is settled law that it is unprofessional as well as unbecoming for a lawyer who has accepted a brief to refuse to attend Court even in pursuance of a call for strike or boycott by the Bar Association or the Bar Council. It is settled law that Courts are under an obligation to hear and decide cases brought before it and cannot adjourn matters merely because lawyers are on strike.

The Hon’ble Court had also asserted:

Unfortunately strikes and boycott calls are becoming a frequent spectacle. Strikes, boycott calls and even unruly and unbecoming conduct are becoming a frequent spectacle. On the slightest pretence strikes and / or boycott calls are resorted to. The judicial system is being held to ransom. Administration of law and justice is threatened. The rule of law is undermined.

However, a view has been expressed that the observations of the Hon’ble Supreme Court are apt only in situations where a lawful redress is available to remedy injustices. Instances of protest for self-determination almost certainly require special treatment. Without delving into the details and the correctness or otherwise of the pro-Telangana agitation, it has to be said that there is some substance to that view.

It would not be out of place to mention here that the movement for Indian freedom is replete with incidents of boycott of courts by lawyers and freedom fighters. In fact, resolutions adopted by the Indian National Congress during the Non-Cooperation Movement, included the ‘boycott of courts by lawyers and litigants’ on the agenda.

Lawyers are officers of the court and have an overriding professional duty to facilitate the administration of justice. Clearly, the ‘strike weapon’ ought to be employed sparingly and wisely and only as a last option, but each lawyer should decide whether and when to use it according to his or her own ‘political sensibility’.

(Pavan Kumar is an advocate at the High Court of Andhra Pradesh.)

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