Archive for ◊ May, 2014 ◊

• Saturday, May 31st, 2014

PRAVEEN DALAL MANAGING PARTNER OF PERRY4LAW AND CEO OF PTLBI have recently analysed the procedural aspects of the Ordinance issued by the President of India Mr. Pranab Mukherjee regarding appointment of Mr. Nripendra Misra. Prima facie this Ordinance has been promulgated in conformity with the Constitutional requirements and there are little reasons to agitate against the same. However, the allegations of “Political Impropriety” cannot be ignored in these circumstances. The only thing that remains to be seen is what “Potential Benefits’ the appointment of Mr. Misra would bring in these circumstances. Nevertheless, no “Constitutional Infirmity or Illegality” can be attributed to this Ordinance as on date.

Chapter III of the Constitution of India deals with the Legislative Powers of the President. Article 123 (1) of Constitution of India provides that if at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require. Article 123 (2) provides that an Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance-(a) Shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and (b) May be withdrawn at any time by the President. The Explanation to Article 123(2) provides that where the Houses of Parliament are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause. Article 123(3) provides that if and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void.

By virtue of Article 123(1), the promulgation of an Ordinance is not necessarily connected with an “emergency” but issued by the President in case he is convinced that it is not possible to have the Parliament enact on same subject immediately and the circumstance render it necessary for him to take “immediate action”.

The Ordinance regarding Mr. Misra was duly approved by the President of India and the requirements of Article 123 have also been satisfied.  It is very difficult to challenge the “Subjective Satisfaction” of the President of India before the Supreme Court of India that is based upon the “Aid and Advise” of Council of Ministers under Article 74(1) of the Constitution of India. Article 74(1) provides that there shall be a Council of Ministers with the Prime Minister at the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such advice. However, the proviso to the Article 74(1) provides that the President may require the Council of Ministers to reconsider such advice, either generally or otherwise, and the President shall act in accordance with the advice tendered after such reconsideration. Clearly the President of India did not find anything wrong with the Ordinance in question and did not find it a fit case to be “Reconsidered”.

Further, the Constitution of India provides two “Parliamentary Checks” vis-a-vis the promulgation of Ordinance under Article123 (2) (a). The Parliament can pass resolutions disapproving the provisions of the Ordinance. There is also a provision regarding automatic expiry of the Ordinance within six weeks of the reassembly of the Houses of the Parliament unless passed by the Parliament. This gives a chance for the Parliament to debate on the Ordinance and review it accordingly. Further, an Ordinance made by the President is not an Executive, but a Legislative act. Hence, it is a “Law” within the meaning of Constitution. Clause 3 of the Article 13 mentions that the term “Law” includes Ordinance and it is void to the “Extent of Contravention” of the Rights conferred by Part III of the Constitution. Article 367(2) of the Constitution also provides that any reference in this Constitution to Acts or Laws of, or made by, Parliament, or to Acts or Laws of, or made by, the Legislature of a State, shall be construed as including a reference to an Ordinance made by the President or, to an Ordinance made by a Governor, as the case may be.

On a number of occasions, the Supreme Court of India has made it clear that the Court is competent to enquire whether in exercising his Constitutional Power in promulgating Ordinances; the President has exceeded the limits imposed by the Constitution. For instance, in DC Wadhwa v. State of Bihar (1987) the Supreme Court held that the Legislative Power of the Executive to promulgate Ordinances is to be used in exceptional circumstances and not as a substitute for the law making power of the Legislature.  Here, the court was examining a case where a State Government (under the authority of the Governor) continued to “Re-Promulgate Ordinances”, that is, it repeatedly issued new Ordinances to replace the old ones, instead of laying them before the State Legislature. A total of 259 Ordinances were re-promulgated, some of them for as long as 14 years.  The Supreme Court argued that if Ordinance making was made a usual practice, creating an “Ordinance Raj” the Courts could strike down re-promulgated Ordinances. As far as Mr. Misra’s Ordinance is concerned this is the first time such an Ordinance has been promulgated and that also to give effect to the “Public Reforms” works to be undertaken by the new Government. Thus, the chances of “Judicial Review” are very negligible in this case.

The Ordinances promulgated by the President are required to be laid before both the Houses of Parliament. Normally, Ordinances are laid on the first sitting of the House held after the promulgation of the Ordinances on which formal business is transacted. The Parliament has framed certain rules to ensure that this power is not abused by the Executive, simply to avoid a vote or debate in Parliament. Rule 66 and Rule 71 of the Rules of Procedure and Conduct of Business in the Council of States (Rajya Sabha) and the House of the People (Lok Sabha), respectively seek to make the Executive accountable to the Parliament by appending an explanatory Statement along with Ordinance.

If a notice of a statutory resolution given by a private member, seeking disapproval of an Ordinance is admitted by the Chairman, Rajya Sabha or the Speaker, Lok Sabha, as the case may be, time has to be provided by the Government for discussion thereof. The resolution after discussion is put to vote first; because if the resolution is adopted, it would mean disapproval of the Ordinance and the Government Bill seeking to replace that Ordinance would automatically fall through. If the resolution is negatived, the motion for consideration of the Bill is then put to vote and further stages of the Bill are proceeded with.

Although the Parliament is responsible for the law making process yet founding fathers of the Constitution considered Ordinances making power to be a “Necessary Evil”. They believed that the Ordinance making power should be delegated to the Executive to deal with such situations when the existing law is not enough to deal with the present circumstances and the Parliament is not in session.

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• Friday, May 30th, 2014

PRAVEEN DALAL MANAGING PARTNER OF PERRY4LAW AND CEO OF PTLBNarendra Modi’s Government is all set to brace the first Lok Sabha session (16th Lok Sabha) on June 4-11 after coming into power. This would enable the Government to spell out crucial Policies and their implementation strategy. This would be more on the side of introductory session where preliminary formalities like swearing the new MPs, appointment of the Speaker, addressing of the Joint Session of the two Houses of Parliament by President Pranab Mukherjee, discussion on the Presidential address, etc would be undertaken. Prime Minister Mr. Narendra Modi will give his reply to the motion of thanks on the Presidential address at the end of the discussion. The Modi Government will have a separate budget session towards the June-end or early-July to present its first full budget.

Everything may go very smooth except the recent Ordinance on Telecom Regulatory Authority of India (TRAI) that cleared the way for appointment of Mr. Nripendra Mishra in the Prime Minister’s Office (PMO) as Modi’s Principal Secretary. The Congress Party contends that the Ordinance for Nripendra Misra’s appointment smacks of “Impropriety”.  It contends that Nripendra Misra, as a former chairman of TRAI was ineligible to join the Government in any position because Section 5(8) of the TRAI Act, 1997, explicitly forbids it.

Some contend that instead of waiting to amend the TRAI Act, 1997 in Parliament, and explaining why it felt the legal bar on post-retirement jobs was too sweeping, the Government issued an Ordinance, so that Misra could report to work. The episode frames a seeming impatience with legal requirements in a case that involves an individual rather than an urgent point of principle. The Modi Government invoked an emergency power given to the Executive to meet an emergent situation, for an individual appointment.

Some also contend that this step of the Government could be the first instance where a Government at the Centre promulgates an ordinance even before proving its majority on the floor of the House, which, incidentally, is a mere formality for the Modi government, with the BJP itself having a simple majority in the Lok Sabha.

Though the BJP, which leads the ruling NDA having 66 members in the Rajya Sabha, has downplayed the controversy raised by the Congress, which leads the UPA having 86 members in the Upper House, experts believe that if the government fails to enlist support of floating parties like the AIADMK (10), BSP (14) and the BJD (5), it will have no option but to convene a Joint Sitting of both the Houses to get the Parliamentary nod on the Ordinance paving way for the appointment of Mr. Misra as principal secretary to the Prime Minister.

The Modi Government is in a minority in Rajya Sabha and if it fails to get the nod of the Upper House on TRAI ordinance, options are still open under Article 108 of the Constitution for a Joint Session of the Parliament to approve it. Article 108(1) of the Constitution provides that if after a Bill has been passed by one House and transmitted to the other House-

(a) The Bill is rejected by the other House; or

(b) The Houses have finally disagreed as to the amendments to be made in the Bill; or

(c) more than six months elapse from the date of the reception of the Bill by the other House without the Bill being passed by it, the President may, unless the Bill has elapsed by reason of a dissolution of the House of the People, notify to the Houses by message if they are sitting or by public notification if they are not sitting, his intention to summon them to meet in a joint sitting for the purpose of deliberating and voting on the Bill:

Provided that nothing in this clause shall apply to a Money Bill.

Article 108(3) provides that where the President has under clause (1) notified his intention of summoning the Houses to meet in a joint sitting, neither House shall proceed further with the Bill, but the President may at any time after the date of his notification summon the Houses to meet in a joint sitting for the purpose specified in the notification and, if he does so, the Houses shall meet accordingly.

Article 108(4) provides that if at the joint sitting of the two Houses the Bill, with such amendments, if any, as are agreed to in joint sitting, is passed by a majority of the total number of members of both Houses present and voting, it shall be deemed for the purposes of this Constitution to have been passed by both Houses: Provided that at a joint sitting-

(a) If the Bill, having been passed by one House, has not been passed by the other House with amendments and returned to the House in which it originated, no amendment shall be proposed to the Bill other than such amendments (if any) as are made necessary by the delay in the passage of the Bill;

(b) If the Bill has been so passed and returned, only such amendments as aforesaid shall be proposed to the Bill and such other amendments as are relevant to the matters with respect to which the Houses have not agreed; and the decision of the person presiding as to the amendments which are admissible under this clause shall be final.

(5) A joint sitting may be held under this article and a Bill passed thereat, notwithstanding that dissolution of the House of the People has intervened since the President notified his intention to summon the Houses to meet therein.

Article 123 of the Indian Constitution empowers the President to promulgate ordinance when Parliament is in recess. As per sources in the Rashtrapati Bhawan the Ordinance regarding Mishra was duly approved by the President Pranab Mukherjee. So there is no “Constitutional Infirmity” with the Ordinance in question. The only question remains about the “Propriety” of Executive action in this regard. That is, at most, a “Moral Issue” and not a Constitutional/Legal one.

There is no doubt that Mr. Mishra is “Qualified and Experience Personnel” and his tremendous expertise would prove handy for not only the PMO but the Country at large. There is also no doubt that “National Interests” should prevail over any “Technical Arguments”. In the ultimate analysis we must analyse what “Potential Benefits” the appointment of Mr. Mishra can bring to our great Nation. I have no doubt whatsoever that the duo of Mr. Nripendra Mishra and Mr. Ajit Kumar Doval can bring “Unforeseen Rewards” for India and they should be allowed to work in a “Free and Non Controversial Manner”. Even those opposing the appointment of Mr. Mishra have no doubt about his caliber and competencies and they are just challenging the way he has been appointed.

If there is any “Constitutional Infirmity” with the Ordinance, then it must be challenged before the Supreme Court of India. If not, then the Ordinance must be challenged before the Parliament of India. However, “Political Impropriety” is hardly a reason and ground to derail the good work and reforms that the duo of Mr. Nripendra Mishra and Mr. Ajit Kumar Doval can bring to India. Of course, this is my “Personal Opinion” and others may disagree with me in this regard.

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• Monday, May 26th, 2014

PRAVEEN DALAL MANAGING PARTNER OF PERRY4LAW AND CEO OF PTLBBlack money has become a real nuisance for India as Indian wealth has been accumulating in foreign jurisdictions instead of being used for development of Indian masses. Decades of corruption has resulted in mass misappropriation of Indian wealth and deposit of the same in foreign banks. For reasons unknown, no concrete and effective efforts were undertaken by Indian government to bring back Indian wealth.

Most probably, the black money is owned by our corrupt politicians, greedy businessmen and criminals. In the absence of any cooperation from foreign banks and entities it has become a daunting task to bring back the black money. Nevertheless this is a weak stand and no excuse and a strong and well articulated approach would produce positive results. The only question is how far the new government is willing to take the challenge and show its metal.

Notification Of Creation Of Special Investigation Team (SIT) To Probe Black Money Deposited In Foreign Jurisdictions Expected Soon

These gloriously and golden words of Swami Vivekananda can help us in transforming India into a world power. “What we now want are muscles of iron and nerves of steel, gigantic will which nothing can resist, which can penetrate into the mysteries and the secrets of the universe, and will accomplish their purpose in any fashion, even if it meant going down to the bottom of the ocean and meeting death face to face”.

Now some ray of hope is there as the government is expected to bring out a notification by next week for creation of a Special Investigation Team (SIT). Sources in the Finance Ministry informed that a notification citing the terms of operations and final constitution of the SIT “would be made very soon” and most likely “by next week”. The Supreme Court on May 23 had granted one week’s time to the Centre to set up SIT to monitor all black money cases as per its direction. The Supreme Court of India has already held that Section 6A of DSPE Act requiring prior sanction of Central Government to prosecute corrupt senior bureaucrats is unconstitutional.

“SIT will prepare a comprehensive action plan including the creation of necessary institutional structure that can enable the country to fight a battle against generation of unaccounted money” the terms of reference for the SIT said. The SIT “shall report to the Court and shall inform the Court of all major developments by filing periodic status reports from time to time and for this purpose, the Union of India shall accord all the necessary financial material, legal, diplomatic resources both inside and outside the country to the SIT”.

The proposed SIT will be headed by former Supreme Court judge MB Shah with Justice Arijit Pasayat (retd) being the Vice Chairman. Heads or top officers of ten investigative and enforcement agencies of the country will be the members of the exclusive panel. The departments or officers that would form part of the SIT include Secretary of the Department of Revenue under the Ministry of Finance, a nominated Deputy Governor of RBI, Director of the Intelligence Bureau, Director of Enforcement, Director CBI, CBDT Chairman and Director General Narcotics Control Bureau. Also, DG Directorate of Revenue Intelligence, Director Financial Intelligence Unit and Joint Secretary (Foreign Tax and Tax Research) in the Finance Ministry will be its members.

Fortunately, the terms of reference for the SIT are wide enough to cover a variety of cases and situations. SIT shall have jurisdiction over all the cases, where investigation has already commenced or pending or awaiting to be initiated or have completed with regard to instances of black money and illicit funds generated and sent to overseas destination and tax haven nations.

This is a golden opportunity for BJP government to bring back the Indian wealth and utilise it for public good. Even Income Tax Overseas Units (ITOUs) of India can be established in foreign countries to curb black money. However, India need a techno legal solution to deal with the current problem as neither technological nor legal approach would be sufficient to serve this purpose.

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• Wednesday, May 07th, 2014

Supreme Court Of India Holds That Section 6A Of DSPE Act Requiring Prior Sanction Of Central Government To Prosecute Senior Bureaucrats Is UnconstitutionalOn 17-12-2013 a three Judge Bench of Supreme Court of India held that that no approval from the Centre is required by the Central Bureau of Investigation (CBI) to prosecute senior bureaucrats in court-monitored corruption cases. Now a Constitution Bench (5 Judge) of Indian Supreme Court has held that Section 6A of the Delhi Special Police Establishment Act (DSPE Act), which granted protection to joint secretary and above officers from facing even a preliminary inquiry by the CBI in corruption cases, was violative of Article 14. From now onwards, no prior sanction would be mandatory for the CBI to conduct a probe against senior bureaucrats in corruption cases under the Prevention of Corruption Act.

A Constitution Bench comprising Chief Justice R.M. Lodha and Justices A.K. Patnaik, S.J. Mukhopadhaya, Dipak Misra and Ibrahim Kalifulla, while allowing the petitions filed by BJP leader Subramanian Swamy and the Centre for Public Interest Litigation, held that Section 6A of DSPE Act, which granted protection to joint secretary and above officers from facing even a preliminary inquiry by the CBI in corruption cases, was violative of Article 14.

Welcoming the court order, CBI Director Ranjit Sinha told The Hindu: “It is a landmark judgment that will empower the agency in the investigations into several cases pending due to the provision that has now been struck down by the Constitution Bench. We had for long been of the view that inquiry against senior officials need not require any prior permission.”

Writing the judgment, the CJI said, “Corruption is an enemy of [the] nation and tracking down a corrupt public servant, howsoever high he may be, and punishing such person is a necessary mandate under the PC Act, 1988. The status or position of a public servant does not qualify the person from exemption from equal treatment. The decision-making power does not segregate corrupt officers into two classes as they are common crime doers and have to be tracked down by the same process of inquiry and investigation.”

The Bench said, “Section 6A of the DSPE Act granting protection to one set of officers is directly destructive and runs counter to the object and reason of the PC Act, 1988. It also undermines the object of detecting and punishing high-level corruption. How can two public servants against whom there are allegations of corruption or graft or bribe taking or criminal misconduct under the PC Act, 1988, be made to be treated differently because one happens to be a junior officer and the other a senior decision maker?”

“The provision in Section 6A impedes tracking down the corrupt senior bureaucrats as without previous approval of the Central government, the CBI cannot even hold preliminary inquiry much less an investigation into the allegations. The protection under Section 6A has propensity of shielding the corrupt,” the Bench added.

Observing that there could not be any protection to corrupt public servants, the Bench said, “The aim and object of investigation is ultimately to search for truth and any law that impedes that object may not stand the test of Article 14. Breach of rule of law, in our opinion, amounts to negation of equality under Article 14. Section 6-A fails in the context of these facets of Article 14.”

Like almost any other judgement dealing with cases of corruption in high places, Tuesday’s order is related to the Supreme Court’s December 1997 ruling in the Vineet Narain v. Union of India case related to the Jain hawala scandal, involving payoffs to politicians by four Jain brothers who facilitated illegal foreign exchange transactions (termed hawala). That ruling, like Tuesday’s, sought to reduce the interference of the government in investigations of politicians and bureaucrats by CBI.

This is the third time the apex court has overturned a legislative action to fetter the CBI from inquiring against senior babus. On December 18, 1997, the court had struck down the “single directive” provision in Vineet Narain judgment. However, the “shield” for bureaucrats was restored when the Centre promulgated an ordinance on August 25, 1998. While SC’s intervention saw the provision deleted from the ordinance, the NDA government, headed by the BJP, on September 12, 2003 inserted Section 6A in the DSPE Act, which governs the CBI, to debar the agency from inquiring against top bureaucrats for corruption charges without prior permission of the Centre. It was challenged in 2005 by Subramanian Swamy and NGO “Centre for Public Interest Litigation”.

“It is very sad that this section was reintroduced even after the court’s decision in the hawala matter. This shows the extent to which both BJP and Congress governments were willing to go to prevent the prosecution of corrupt officials and offer them protection,” said lawyer Prashant Bhushan.” The Supreme Court maintained its view from the Vineet Narain v. Union of India case that “However high you may be, the law is above you”.

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