Privacy, Self-Incrimination and Article 20(3) – II: Kathi Kalu Oghad

M.P. Sharma vs Satish Chandra, as we saw in the last post, held that the meaning of the phrase “to be a witness”, under Article 20(3), was analogous to “to furnish evidence”. This broad interpretation of Article 20(3) was questioned, and in 1961, an eleven-judge bench of the Supreme Court, in State of Bombay vs Kathi Kalu Oghad, had occasion to reconsider the scope of the constitutional guarantee against self-incrimination. The basic question, in Kathi Kalu, was whether fingerprints and handwriting samples were hit by the Article 20(3) bar – or, in other words, whether compelling an accused to provide their fingerprints, or a handwriting sample, was equivalent to compelling them to be a “witness” against themselves. Incidental to this central question, the case also involved constitutional challenges to some of the provisions that made it possible: S. 73 of the Evidence Act, which empowers the Court to direct a person to provide handwriting or signature samples; Ss. 5 & 6 of the Identification of Prisoners Act, which allowed a Magistrate to obtain a photograph or measurements of any person; and S. 27 of the Evidence Act which allow, in evidence, statements made by the accused while in the custody of a police officer, which result in a discovery (of other relevant evidence).

There can be no doubt that if – following M.P. Sharma vs Satish Chandra, “to be a witness” meant “to furnish evidence”, then compelled taking of fingerprints or handwriting samples surely come within its meaning. The Court held, however, that Sharma’s observations, on this point, were incorrect. It noted that:

“… though they may have intended to protect an accused person from the hazards of self- incrimination, in the light of the English Law on the subject – they could not have intended to put obstacles in the way of efficient and effective investigation into crime and of bringing criminals to justice. The taking of impressions or parts of the body of an accused person very often becomes necessary to help the investigation of a crime. It is as much necessary to protect an accused person against being compelled to incriminate himself, as to arm the agents of law and the law courts with legitimate powers to bring offenders to justice. Further more it must be assumed that the Constitution-makers were aware of the existing law, for example, s.73 of the Evidence Act or ss. 5 and 6 of the Identification of prisoners Act (XXXIII of 1920). Section 5 authorises a Magistrate to direct any person to allow his measurements or photographs to be taken, if he is satisfied that it is expedient for the purposes of any investigation or proceeding under the Code of Criminal Procedure to do so.” 

There are two glib assumptions here that are very troubling: first – that a Constitutional guarantee – a fundamental right, no less – is to be bound by the scope of traditional English common law (which has never been too friendly to the accused); and secondly – that a fundamental right must be interpreted in light of colonial-era legislations such as the Evidence Act and the Identification of Prisoners Act, and not the other way round. The other possibility – that the Constitution was the culmination of a decades-long struggle against a repressive police State (observations to this effect abound in the Constituent Assembly Debates), and that therefore, its fundamental rights ought to be read not as continuing an authoritarian tradition, but as marking a decisive break with it in favour of an expansive notion of civil liberty, was never even considered by the Court – let alone analysed.

There is a further problem. In the cited paragraph, the Court laid out the accepted dichotomy, between protecting an accused from self-incrimination, and serving the goals of law-enforcement. But surely, just as taking the impressions of parts of a body is often necessary to help in the investigation of a crime, torturing a person to make him confess may be equally necessary in an investigation. In either case, not allowing the police to do so becomes an “obstacle” towards bringing criminals to justice. The Court’s reasoning – that the constitutional framers could not have intended to throw up obstacles in the path of law-enforcement therefore does nothing to explain what the scope of the self-incrimination guarantee is, because any protection of individual rights is bound to make the job of the police harder. So if we do accept that Article 20(3) guarantees some rights, we must look elsewhere for their ambit.

This the Court did by looking at the issue from “another angle”. It noted that “the giving of finger impression or of specimen signature or of handwriting, strictly speaking, is not “, to be a witness”. “To be a witness” means imparting knowledge in respect of relevant fact, by means of oral statements or statements in writing, by a person who has personal knowledge of the facts to be communicated to a court or to a person holding an enquiry or investigation.”

But surely there is nothing in the inherent meaning of the word “witness” that requires this constricted interpretation. The Oxford Dictionary, for instance, defines the word “witness” both as “a person who sees an event”, and, more simply, as “evidence; proof.” The Court’s thinking was revealed soon afterwards, though, when it held that “the giving of a “personal testimony’ must depend upon [the accused's] volition. He can make any kind of statement or may refuse to make any statement. But his finger impressions or his handwriting, in spite of efforts at concealing the true nature of it by dissimulation cannot, change their intrinsic character.”

The underlined portion is crucial, because it demonstrates that, underlying the Court’s seemingly textual interpretation of the word “witness”, is a deep-sated fidelity to the crime-control model. Finger impressions and handwriting have an “intrinsic character”, that is changeless, beyond the accused’s control and – ultimately – verifiable. The content of a “statement”, on the other hand, is entirely within the control of the accused, and if it is self-incriminatory, then it is just that much more likely that it is distorted or untrue.

The Court put another gloss upon its holding, by stating that the testimony – to fall within Article 20(3) – must itself have a tendency of incriminating the accused – i.e., “it should be a statement which makes the case against the accused person at least probable, considered by itself. A specimen handwriting or signature or finger impressions by themselves are no testimony at all being wholly innocuous because they are unchangeable except in rare cases where the ridges of the fingers or the style of writing have been tampered with.” Notice how “innocuous” is run together with “unchangeable”, although they do not – for one moment – mean the same thing. Once again, underlying all this is the concern with determining true, accurate information, that can make the process of identifying the guilty efficient and accurate.

In their concurring opinion, Das, Sarkar and Da Gupta JJ. maintained – following M.P. Sharma – that to be a “witness” included furnishing of evidence. They held, however, that “evidence of specimen handwriting or the impressions of the accused person’s fingers, palm or foot, will incriminate him, only if on comparison of these with certain other handwritings or certain other impressions., identity between the two sets is established. By themselves, these impressions or the handwritings do not incriminate the accused person. or even tend to do so. That is why it must be held that by giving these impressions or specimen handwriting, the accused person does not furnish evidence against himself.” Immediately afterwards, the concurring judges noted that “this view, it may be pointed out, does not in any way militate against the policy underlying the rule against “testimonial compulsion”… there is little risk, if at all, in the investigator or the prosecutor being induced to lethargy or inaction because he can get such handwriting or impressions from an accused person.” The concurring opinion, thus, is even more transparent about is allegiance to the crime-control model: the whole point of the guarantee against testimonial compulsion is to ensure that the investigator doesn’t become “lethargic”, because he has the option of squeezing self-incriminating information out of the accused, and thereby fails to collect other relevant or valuable evidence.

We therefore see how, in Kathi Kalu - unlike in M.P. Sharma – the basic conceptual framework within which Article 20(3) is analysed is the crime-control model. In focusing on volition and unchangeability, however, the eight majority judges left a zone of doubt for investigatory techniques such as narco-analysis and brain-mapping, that operate at the interface of volition/no volition, and accuracy/unreliability. The Court, therefore, would have another chance at conceptualising its understanding of Article 20(3). That will be the subject of the next post.

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Privacy, Self-Incrimination and Article 20(3) – I

Previously on this blog, we have discussed in detail the right to privacy in the context of State surveillance. In the context of surveillance, we understand privacy as every individual’s right to a zone of autonomy, where his communications or actions are subject to no interference. Privacy, however, has another important aspect: the aspect of each individual’s right to bodily integrity, especially in the teeth of the State’s law-enforcement procedures. Under the Indian Constitution, this idea – or something like it – finds a place in Article 20(3), and takes the form of the traditional common-law right against self-incrimination. Article 20(3) reads: “No person accused of any offence shall be compelled to be a witness against himself.” It closely follows the wording of the Fifth Amendment to the American Constitution, which likewise provides that “[no person] shall be compelled in any criminal case to be a witness against himself.

Before examining the judicial history of Article 20(3), it is important to note that the right against self-incrimination is part of a family of procedural safeguards accorded to persons accused of criminal offences. What is the underlying philosophy of these safeguards? In a famous article in 1964, titled Two Models of the Criminal Process, the American jurist Herbert Packer proposed two answers to this question. Under the “crime control model”, the ultimate goal of the criminal process is the “repression of criminal conduct.” “In order to achieve this high purpose,” Packer wrote in a subsequent article, “the Crime Control Model requires that primary attention be paid to the efficiency with which the criminal process operates to screen suspects, determine guilt, and secure appropriate dispositions of persons convicted of crime.” Simplifying greatly, “the criminal process thus must put special weight on the quality of administrative fact-finding. It becomes important, then, to place as few restrictions as possible on the character of the administrative fact-finding processes and to limit restrictions to such as enhance reliability, excluding those designed for other purposes.

The crime-control model is to be contrasted with the “due process model”. This holds that “the combination of stigma and loss of liberty that is embodied in the end result of the criminal process is the heaviest deprivation that government can inflict on the individual.” Therefore,   “because of its potency in subjecting the individual to the coercive power of the state, the criminal process must… be subjected to controls that prevent it from operating with maximal efficiency.” The classic example is, of course, the presumption of innocence.

To put it impressionistically: the crime control model is most concerned with finding and punishing the guilty; the due process model focuses, instead, on protecting the basic rights of the accused against the State machinery. The dividing lines are not always clear, but one example that might put the point across is the fate of the exclusionary rule in various jurisdictions. The exclusionary rule stipulates that evidence obtained through illegal means (e.g., a warrantless search, or through torture) is inadmissible in Court. Naturally, the quality and relevance of evidence is entirely unrelated (in most cases) to the manner in which it was obtained. Consequently, the criminal control model, which is concerned with accurate determination of guilt, will only judge evidence with regard to its relevance, and will see little reason to deny admitting illegally obtained evidence (and this is the position, for instance, in England in India). On the other hand, the due process model, which is concerned with protecting citizens’ rights (against, e.g., warrantless searches and torture) might well determine that an effective way of protecting these rights is to ensure that evidence obtained in their violation, cannot be used against the accused.

What is particularly interesting to note is that the right against self-incrimination can fit within both these models. Compelled testimony – simply by virtue of being “compelled” will often be flawed. Reasonable criminals are unlikely to willingly give evidence incriminating themselves, and history bears witness to the fact that coerced, false confessions have been the norm rather than the exception. Consequently, the crime control model, with its focus on accurate determination of guilt and innocence, has good reason to guarantee a right against self-incrimination. The due process model, of course, is concerned with the rights violations that invariably accompany compelled, self-incriminatory testimony, and has equal – if different – reason to guarantee that right as well. However, the difference is not merely academic: if, for instance, an infallible truth-serum is invented, then its use under the crime control model would no longer be problematic, since the central objection to compelled testimony – the likelihood of inaccuracy – has been removed. On the other hand, for obvious reasons, it would continue to be problematic under the due process model.

In the beginning of this post, we had suggested that Article 20(3) embodies an aspect of the right to privacy – privacy as bodily integrity. That statement now needs to be modified: the text of Article 20(3) suggests that it might be about crime control – or it might be about due process rights (or embody a balance of both concepts). While the presence of Article 20(3) within the fundamental rights chapter suggests it was the due process model – along with the attendant rights to privacy – that the framers had in mind, we shall see that the judiciary has often taken a different view of things. Indeed, it is the clash between the two models that has largely shaped the judicial history of the constitutional guarantee against self-incrimination.

Article 20(3) – to repeat – provides that “no person accused of any offence shall be compelled to be a witness against himself.” Three important phrases must be interpreted: “accused of any offence”, “compelled” and a “witness against himself.” The Supreme Court was first called upon to lay down the meaning of this section in the 1954 case of M.P. Sharma vs Satish ChandraThe question in that case was whether a search and seizure under Sections 94 and 96 of the 1898 Criminal Procedure Code violated Article 20(3) of the Constitution. At the outset, Jagannadhadas J. clarified that “The fundamental guarantee in article 20(3) comprehends within its scope not merely oral testimony given by an accused in a criminal case pending against him, but also evidence of whatever character compelled out of a person who is or is likely to become incriminated thereby as an accused. It, therefore, extends not only to compelled production of documents by an accused from his possession, but also to such compelled production of oral or documentary evidence from any- other person who may become incriminated thereby as an accused in future proceedings.” It was therefore argued that a forcible search and seizure was simply an indirect way of accomplishing what Article 20(3) forbade – obtaining self-incriminating testimony from an accused.

The Court commenced by going into the legal and doctrinal history of the right against self-incrimination. Interestingly, it looked to Wigmore on Evidence, citing justifications grounded in the crime-control model: that it prevented “extorted confessions” (but then why would it extend to documents?) and afforded witnesses “a free atmosphere in which they can be persuaded to come forward to furnish evidence in courts and be of substantial help in elucidating truth in a case.” It then clarified that “”To be a witness ” is nothing more than ” to furnish evidence “, and such evidence can be furnished through the lips or by production of a thing or of a document or in other modes… every positive volitional act which furnishes evidence is testimony, and testimonial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the, negative attitude of silence or submission on his part… [the guarantee under Article 20(3) therefore] would extend to any compulsory process for production of evidentiary documents which are reasonably likely to support a prosecution against [an accused individual].” 

While expanding the reach of Article 20(3), the Court declined to find that a search and seizure violated it. The petitioners had relied upon a series of American cases such as Boyd vs United States and Weeks vs United States for the proposition that search and seizure was equivalent to compelled production of documents. The Court found, however, that those cases rested upon the fact that the search/seizure in question was illegal, and therefore a violation of the American Fourth Amendment, for which there was no equivalent in the Indian Constitution. Consequently, and relying upon various textual provisions of the CrPC, it held that “there is no basis in the Indian law for the assumption that a search or seizure of a thing or document is in itself to be treated as compelled production of the same… when the Constitution makers have thought fit not to subject such regulation to Constitutional limitations by recognition offundamental right to privacy, analogous to the American Fourth Amendment, we have no justification to import it, into a totally different fundamental right. by some process of strained construction.”

The Court’s reading of Boyd and Weeks is questionable, as is its choice to interpret a Constitutional, fundamental right-guaranteeing provision (Article 20(3)) in light of a colonial criminal legislation. However, that apart, what is interesting to note is how elements of the crime control model and the due process model are present – and in tension – throughout the judgment. In reading “witness” to include both oral testimony and documentary evidence, the Court veers towards the due-process model, since fears of inaccurate testimony are much reduced – if not eliminated altogether – when it comes to compelled production of documents. However, in stating the justifications for the right, the Court focuses on the crime control model, and its verdict – refusing to equate search/seizure with compelled production depends upon its finding that unlike the American Constitution, the Indian contains no guarantees of privacy. And this tension, as we shall see in subsequent posts, has dogged the Court’s Article 20(3) jurisprudence throughout its history.

 

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SFLC’s Report on Surveillance in India

The Software Freedom Law Centre has released a detailed, fifty-page report on surveillance in India. The Report can be accessed here. Although I haven’t read it yet, a summary of issues (see here) suggests that it is comprehensively written, and a job well done.

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Supreme Court Rules on Oral Hearings for Death Penalty Reviews

In a brief – and interesting – judgment today, a Constitution Bench of the Supreme Court ruled – by a 4-1 majority – that death penalty review petitions must be heard orally, in open court. The background of the case was that Order XL, Rule 3 of the Supreme Court Rules allows for review petitions to be decided by “circulation” – i.e., in the chambers of the judges, without oral argument. The constitutionality of Order XL, Rule 3 had been challenged before a Constitution Bench of the Supreme Court in P.N. Eswara Iyer vs Registrar, Supreme Court of India. Krishna Iyer J., writing for the majority, upheld the provision dispensing with oral arguments for reviews. The present Court, being bound by the judgment in P.N. Eswara Iyer, carved out a specific exception for the death penalty, because of its Article 21 implications. It did so by invoking specific observations made by Krishna Iyer J, in that case, namely “…presentation can be written or oral, depending upon the justice of the situation“, and “…the problem really is to find out which class of cases may, without risk of injustice, be disposed of without oral presentation.” (para 40)

Nariman J., writing for the majority, went into the judicial history of Article 21 from A.K. Gopalan to Maneka Gandhi, via R.C. Cooper, before holding that:

“… death sentence cases… are a distinct category of cases altogether. Quite apart from Art.134 of the Constitution granting an automatic right of appeal to the Supreme Court in all death sentence cases, and apart from death sentence being granted only in the rarest of rare cases, two factors have impressed us. The first is the irreversibility of a death penalty. And the second is the fact that different judicially trained minds can arrive at conclusions which, on the same facts, can be diametrically opposed to each other.” (para 29)

And, soon after:

… when on the same set of facts, one judicial mind can come to the conclusion that the circumstances do not warrant the death penalty, whereas another may feel it to be a fit case fully justifying the death penalty, we feel that when a convict who has suffered the sentence of death and files a review petition, the necessity of oral hearing in such a review petition becomes an integral part of “reasonable procedure” [under Article 21].

In addition, rejected the petitioners’ arguments that the review bench strength be increased from three to five (para 39). Regrettably, the Court also affirmed the Triveniben holding, that “time taken in court proceedings [in this case, thirteen and a half years] cannot be taken into account to say that there is a delay which would convert a death sentence into one for life”, and went on to say that its oral hearing rule would not apply to already-dismissed curative petitions.

One of the interesting aspects of today’s judgment is its setting apart of death sentences from all other sentences that have an impact on personal liberty, for special treatment under Article 21. The Court does so on the twin basis of the irreversibility of a death sentence, and the fact that different judges come to different conclusions about awarding death. The second point, however, is something that is common to all sentencing. Clearly, therefore, it acquires special constitutional significance when it is combined with the fact of irreversibility. In other words, irreversibility is what makes the possibility of arbitrariness in death sentencing (as opposed to ordinary sentencing) particularly problematic, and hence the need for the procedural safeguards under Article 21.

Recall, however, that in Bachan Singh vs State of Punjab, the Constitutional challenge to S. 354(3) of the CrPC, which requires judges to give special reasons, in writing, on the award of the death penalty, was dismissed. The majority, in that case, held:

The impossibility of laying down standards is at the very core of the criminal law as administered in India which invests the Judges with a very wide discretion in the matter of fixing the degree of punishment… The exercise of judicial discretion on well-recognised principles is, in the final analysis, the safest possible safeguard for the accused… In view of the above, it will be impossible to say that there would be at all any discrimination, since crime as crime may appear to be superficially the same but the facts and circumstances of a crime are widely different. Thus considered, the provision in Section 302, Penal Code is not violative of Article 14 of the Constitution on the ground that it confers on the Judges an un-guided and uncontrolled discretion in the matter of awarding capital punishment or imprisonment for life.”

In Bachan Singh, therefore, the Court considered differential judicial outcomes to be an integral part of criminal sentencing (thus discounting even the possibility of arbitrariness). Santosh Kumar Bariyar more or less departed from this position by subjecting the death penalty to rigorous Article 14 analysis, and proposing standards such as the principle of prudence (which have since been honoured more in the breach than in the observance). Today’s judgment extends the Bariyar line of argument by affirming that the death penalty is not like ordinary criminal sentencing, and must be subjected to exacting constitutional scrutiny. At least potentially, therefore, it leaves the field open for a future challenge that is based on a showing that the administration of the death penalty in India has become so arbitrary and unpredictable (that is, judicial minds are arriving at diametrically opposite conclusions, notwithstanding the same facts), that it is no longer possible for the punishment to survive, and simultaneously remain consistent with Article 14. Or, to put it another way, today’s judgment added a procedural safeguard (open court hearings) to the death penalty scheme, in order that it remain consistent with reasonable procedure under Article 21 — and in particular, to mitigate the potential arbitrariness of different judges arriving at different conclusions, an arbitrariness that becomes constitutionally problematic under Article 21 because of the irreversibility of the death penalty. This implies, of course, that different judges reaching different conclusions (without any discernible basis) is, contra Bachan Singh, which saw that as a praiseworthy aspect of judging, is actually problematic when it comes to the death penalty. Consequently, empirical studies demonstrating precisely that (whatever procedural safeguards there may be) might constitute a strong ground – sometime in the future – to challenge the prevalence of death penalty in India.

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ACLU vs Clapper: NSA Surveillance Appeal to be Heard Today

Previously on this blog, we have covered the oral arguments (see here and here) in ACLU vs Clapper, before the Southern District Court of New York. ACLU vs Clapper, of course, is the American Civil Liberties Union’s challenge to the NSA’s bulk surveillance “PRISM” program. We have also covered the decision of the Southern District Court of New York, which rejected the challenge and upheld PRISM, as well as its implications for India (see here). Today, the Second Circuit Court of Appeals will hear ACLU’s appeal from the District Court’s decision. ACLU has the details here, reiterating its Fourth Amendment (privacy) and First Amendment (free speech and association) . As we’ve noted before, both these rights occupy important places in the Indian Constitution as well; consequently, it will be well worth following the progress of this case, as it winds its way through the Appeals Court, and possibly up to the Supreme Court of the United States.

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Coalgate and Judicial Review of Distribution of Natural Resources

In the previous two posts, Manish has exhaustively analysed the Supreme Court’s verdict in M.L. Sharma vs Principal Secretary ["Coalgate"]. In the broader scheme of things, the judgment makes an important contribution to the Supreme Court’s evolving jurisprudence with respect to the judicial review of distribution of natural resources. Recall that in the First Spectrum Case, the Supreme Court had taken a highly interventionist stance with respect to the 2G Spectrum Scam, not only quashing the allocation of spectrum, but also – in effect – imposing a public auction as the only legitimate method for governmental distribution of natural resources. Recall also that in the Second Spectrum Case (a Presidential reference), the Supreme Court backtracked, limiting the holding of the First Spectrum Case (public auction required) to its specific facts (distribution of spectrum, not all natural resources), and also observing that while an auction was, presumably, the only legitimate method if the objective of distribution was to raise maximal revenue, it was also open to the government to set goals other than revenue maximisation, consistent with the common good. In such cases, clearly, an auction might not be the best method of distribution.

In Coalgate, the Supreme Court affirms the view of the Constitution Bench in the Second Spectrum Case. It accepts the government’s contentions that the requirements of the industry at the time of liberalisation provided strong reasons (in 1993) not to distribute coal blocks via auction. Nonetheless, it holds the allocation itself to be illegal. It does so by examining the minutes of all 36 Screening Committee Meetings (where the allocation decisions were taken), and finds that there were no relevant guidelines to determine inter-se merit and priority between applicant companies, and that whatever guidelines were there, were constantly changed. It also finds that there was no discussion about inter-se merit before allocations were awarded. On these grounds, it finds an Article 14 (arbitrariness) violation in the State action.

I’ve written in detail about the place of Coalgate within the broader framework of the Supreme Court’s natural resources jurisprudence elsewhere (see here and here). In this post, I want to focus on something specific: the standard of review that the Court does not directly expound, but which implicitly emerges out of its analysis.

The primary reason why the Court holds the allocations illegal – as mentioned just above – is because of the absence of guidelines that would help the Screening Committee decide which applicants would succeed. In the first set of meetings, it notes, there are no guidelines at all. When some kind of guidelines are framed, they make no mention of determining inter-se merit. Notice that there are three things that the Supreme Court does not do (or rather, it is spared doing, because of the absence of guidelines): examining the sufficiency of the guidelines for actually determining inter-se merit, examining the government’s factual assessment of inter-se merit within the framework of the guidelines, and examining the outcomes of the allocations.

All this sounds very familiar. Indeed, it is analogous to the Court’s jurisprudence under Article 356 (in the emergency powers chapter) of the Constitution. Article 356 allows for President’s Rule if “on receipt of report from the Governor of the State or otherwise, [the President] satisfied that a situation has arisen in which the government of the State cannot be carried on in accordance with he provisions of [the] Constitution.” In S.R. Bommai vs Union of India, the Supreme Court held:

“The President’s satisfaction [under Article 356] has to be based on objective material. That material may be available in the report sent to him by the Governor or otherwise or both from the report and other sources. Further, the objective material so available must indicate that the government of the State cannot be carried on in accordance with the provisions of the Constitution. Thus the existence of the objective material showing that the government of the State cannot be carried on in accordance with the provisions of the Constitution is a condition precedent before the President issues the proclamation. Once such material is shown to exist, the satisfaction of the President based on the material is not open to question. However, if there is no such objective material before the President, or the material before him cannot reasonably suggest that the government of the State cannot be carried on in accordance with the provisions of the Constitution, the proclamation issued is open to challenge.”

As the Law Commission points outS.R. Bommai limits judicial review of an Article 356 proclamation to verifying whether there existed material that was relevant to a consideration that the government of a state cannot be carried on in accordance with the Constitution. What the Court cannot do is substitute its own opinion for whether a state government could or could not be carried on in accordance with the Constitution, and nor can it impugn the process by which the President (i.e., in effect, the Council of Ministers) came to that conclusion.

We can now see the similarities. The Court held the first batch of allocations (pursuant to the first twenty-one meetings) illegal because of the absence of any guidelines for determining how to select applicants on the basis of merit. It held the next batch illegal because even the guidelines that were framed were of no aid in determining the merit. Thus, the first batch related to the existence of objective 356 material, and the second batch related to its relevance – which, together, constitute the limits of judicial review under 356, and beyond which the Court, in Coalgate, did not go.

What will be particularly interesting in the future will be to see how far the Court takes its 356-analogous line of thought. Coalgate was a particularly easy case because of the absence of guidelines, or their prima facie irrelevance. What will happen if, for instance, the government does frame guidelines, which are at least prima facie relevant to determining merit – but its allocations are then challenged on the grounds that it has incorrectly – or unreasonably – applied its guidelines to the actual question of allocation, or misconstrued the objective requirements of the guidelines? Will the Court then adopt the Article 356 framework fully, and defer to the government? Or will it – keeping in mind Article 39(b) – adopt a more interventionist framework when it comes to questions of distributing natural resources to private entities? This is a fascinating question, and M.L. Sharma leaves it open – perhaps to be settled by another Court, adjudicating another scam.

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Guest Post: The Supreme Court’s “Coalgate” Judgment – II

(In this second, and concluding part, Manish examines the constitutional issues that arose in the Supreme Court’s “Coalgate” judgment)

The main argument advanced on behalf of the petitioners, challenging the allocation, was that the allocations made on the recommendations of the Screening Committee were illegal and ultra vires both the provisions of the 1957 and 1973 Acts, as well as Article 14 of the Constitution. It was argued that the Screening Committee failed to adhere to any consistent criteria while processing the applications, as a result of which coal blocks were allocated even to companies that were not engaged in any of the end-uses notified under section 3 of the 1973 Act. It was alleged, relying on the CAG report,  that some of these companies further sold the coal to government entities that were engaged in the notified end-uses, thus reaping “windfall profits” at the expense of the exchequer.

The Supreme Court accepts this argument after a long and detailed review of the Screening Committee’s work. It is unclear why the court chose to get into the substantive aspect of this argument – having declared that the issuance of allocation letters by the Central Government was in excess of its powers under the 1957 Act as well as the 1973 Act, the entire proceedings could have been quashed on that ground alone. Perhaps, the court was conscious of the fact that there was a major natural resource at stake here and that its order could have large economic impacts (the judgment opens with the lines “Coal is king and paramount Lord of industry”), therefore justifying greater substantive reasoning. As we will see, this consciousness permeates through to the final order as well. The Court merely begins the next part of its reasoning in para 69 with “Assuming that the Central Government has competence to make allocation of coal blocks…”, and then holds that the issuance of the allocation letter amounts to a grant of largesse by the State – thereby subjecting it to judicial review in light of the test of non-arbitrariness, as explained in Ramana Dayaram Shetty v. International Airports Authority and other cases. In para 82, it formulates three questions to be addressed in this regard:

(i) Whether the allocation of coal blocks ought to have been done only by public auction?

(ii) Whether the allocation of coal blocks made on the basis of recommendations of the Screening Committee suffer from any constitutional vice and legal infirmity?

(iii) Whether the allocation of coal blocks made by way of Government dispensation route (Ministry of Coal) is consistent with the constitutional principles and the fundamentals of the equality clause enshrined in the Constitution?

The first question is easily answered in the negative by the Court, relying on its opinion in the 2012 Presidential Reference Re: Natural Resources Allocation as well as earlier cases on the allocation of natural resources by the State. The Court recognises that in order to fulfill the mandate of Article 39(b) of the Constitution (distribution of material resources to serve the common good), auction may not necessarily be the best available method, and this would ordinarily be a matter of executive privilege. In para 105, the Bench observes that despite the fact that competitive bidding would have ensured “transparency, objectivity and very importantly given a level playing field to all applicants…”, it was not the prerogative of the Court to examine or evaluate the various methods available. The court in this respect defers to the Government’s stance that there was a grave shortage of power in the country at that time and hence auctioning, which would have driven prices higher, could not have been the best method to be adopted in the circumstances, holding that “in our view, the administrative decision of the Government not to pursue competitive bidding cannot be said to be so arbitrary or unreasonable warranting judicial interference.”

In respect of the second and third questions, though, the Court is less circumspect:

However, if the allocation of subject coal blocks is inconsistent with Article 14 of the Constitution and the procedure that has been followed in such allocation is found to be unfair, unreasonable, discriminatory, non-transparent, capricious or suffers from favoritism or nepotism and violative of the mandate of Article 14 of the Constitution, the consequences of such unconstitutional or illegal allocation must follow.

The Screening Committee constituted by the Central Government held 36 meetings between 1993 and 2010. The Supreme Court goes into a detailed review of each of these meetings (paras 108-149) and points out several infirmities in the procedure adopted by the Committee (para 150). First, there was no objective criteria for the selection of applicants laid down by either the Central Government or by the Committee itself. The court observes that the Committee only laid down vague guidelines at its first meeting which it kept varying subsequently, and blindly relied on the information provided by the applicants without verifying them. Further, the Committee functioned in a wholly non-transparent manner, with no advertisements released inviting applications, and allocations being recommended in favour of parties without considering their requirements, location or capacity, in breach of the Committee’s own guidelines. The norms for inter se priority allocation to two or more equally qualified applicants for the same block were not laid down until 2003, and even then the Court found serious problems with the application of these norms to selected parties. Thus, the entire proceedings of the Screening Committee were found to be tainted with manifest arbitrariness. It should be noted that besides a few passing references, the Court does not really engage with the question of arbitrariness vis-a-vis fairness in respect of grant of largesse or allocation of natural resources by the State. it seems to presume a settled position in this regard and largely focuses on establishing whether the facts at hand supported the petitioners’ position.

A peripheral point was also raised about the allocation of blocks by the Central Government to public sector undertakings (PSUs) run by the States, in furtherance a 2001 circular that permitted state PSUs to engage in coal mining. The Court quashed the circular as being ultra vires the legislative scheme of the 1973 Act which only permitted commercial mining by the Central Government or its companies, or companies engaged in notified end-uses. It held that the allocation of coal blocks to the state PSUs for engaging in commercial mining were also illegal, observing (para 153) that these blocks had, in many cases, been further handed over to private companies through joint ventures, thereby defeating the entire legislative object and scheme of the 1973 Act.

In its conclusion, the Court is scathing in its indictment of the Screening Committee:

To sum up, the entire allocation of coal block as per recommendations made by the Screening Committee from 14.07.1993 in 36 meetings and the allocation through the Government dispensation route suffers from the vice of arbitrariness and legal flaws. The Screening Committee has never been consistent, it has not been transparent, there is no proper application of mind, it has acted on no material in many cases, relevant factors have seldom been its guiding factors, there was no transparency and guidelines have seldom guided it. On many occasions, guidelines have been honoured more in their breach. There was no objective criteria, nay, no criteria for evaluation of comparative merits. The approach had been ad-hoc and casual. There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily. Hence, the allocation of coal blocks based on the recommendations made in all the 36 meetings of the Screening Committee is illegal. (emphasis supplied) [para 154]

The allocation having been declared illegal, the next question that arises is to the fate of the coal blocks that have already been allocated. The logical conclusion might be to assume that all these allocations would stand cancelled, or be expressly quashed by the Court as it did in the 2G Spectrum judgment. However, the Court, seemingly conscious of the criticism of its decision in that case, as well as the wide-ranging consequences of cancelling all coal block allocations since 1993 – many of which were made to currently functioning power plants and other infrastructure projects – chooses to tread cautiously, merely stating that “to this limited extent, the matter requires further hearing.” While this manner of splitting the verdict and the consequences seems to be drawn from criminal procedure (where separate hearings are held to determine guilt and sentence), it is seemingly unprecedented in a writ petition. The “further hearing” is scheduled for September 1, and all eyes will be on the Court to see how it deals with the matter.

 

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