ICLP Book Discussion:Anuj Bhuwania’s ‘Courting the People’ – I: A Radical Revision

(Over the course of the coming week, The Indian Constitutional Law and Philosophy blog will host a book discussion of Anuj Bhuwania’s Courting the People: Public Interest Litigation in Post-Emergency India. Courting the People is an important new book that brings an entirely fresh perspective to Public Interest Litigation [“PIL”] in India. In this opening post, I will introduce the main themes of the book. This will be followed by comments from myself, Suhrith Parthasarathy, and Aparna Chandra. At the end, Anuj Bhuwania will respond).

Over the last three decades, an almost unshakeable narrative has emerged with respect to the Indian Supreme Court’s PIL jurisprudence. PIL, we are told, emerged out of a contrite Supreme Court’s determination to make up for its constitutional abdication during Indira Gandhi’s Emergency. Led by pioneering and visionary judges in the 1980s, PIL began as a democratic exercise, seeking to make justice accessible to the poorest and most marginalised of citizens. Defined by relaxed rules of locus standi, an expansion of Article 21 of the Constitution, and wide-ranging remedial action, PIL was a noble and inspiring judicial endeavour. But, as is often the fate with noble endeavours, it was eventually corrupted. In the late 1990s, influenced by a changed political economy and an increasingly corrupt and dysfunctional political executive, a “neoliberal” Supreme Court swerved sharply away from PIL’s original objectives, and began to cater to a permanently outraged urban middle class, taking on issues such as polluted cities, forest management, and so on. Still later, in the 2000s, the Court turned its focus to “good governance”, moving even further away in philosophy and orientation from the 1980s. This has led to natural and obvious problems.

This narrative – that insists upon the fundamental goodness of PIL, while decrying certain “abuses” that have crept in over time – is fundamentally challenged by Bhuwania in Courting the People. Its importance lies in the fact that makes a thoroughgoing critique of PIL as an institution, instead of simply tinkering at the edges. Bhuwania’s core claim – a radically revisionist claim – is that the well-documented “abuses” of PIL cannot be separated from its core features. PIL – Bhuwania argues – originated with certain pathologies; for a while, these pathologies were hidden or obscured, at least partly because what the Court was doing resonated with the ideological predilections of its primary interlocutors in the legal academy, at the bar, and in the media. But now, with the Court itself having committed an ideological volte face, those pathologies appear starker, and are sought to be explained away as “abuses”. This, according to Bhuwania, obscures more than it reveals. In his colourful way of putting it:

“PIL has often been talked of as a romance – if anything, as a romance gone wrong. In this book I will argue that PIL was a tragedy to begin with and has over time become a dangerous farce.” (p. 12)

What are these pathologies? Through a survey of legal doctrine, as well as an ethnographic study conducted by Bhuwania, who spent two years observing (and sometimes being involved with) PIL proceedings before the Delhi High Court, the following themes emerge:

First, after the filing of the petition, the Public Interest Petitioner becomes peripheral to the proceedings. Bhuwania talks of the famous Sheela Barse case (in the mid-1980s), which was about prison reforms; when Sheela Barse herself wanted to withdraw the PIL, the Court refused to allow her to do so, and went on with the case anyway. In the 1990s, this phenomenon accelerates, and is complemented by cases where the Court itself initiates proceedings (Court on Its Own Motion versus ______), without the existence of a public interest petitioner. One result of this – and this is a standard theme throughout the book – is that a PIL that begins as an issue about a specific, narrow subject (such as, say, solid waste management) is transformed into an “omnibus case” that reaches monstrous proportions, and becomes about dealing with social problems on a huge scale (Godavarman, for instance, is basically the Supreme Court undertaking management of India’s forests).

Although Bhuwania doesn’t develop the argument further, the problem with this kind of a process is obvious. PIL began as a mechanism of securing justice to persons who were unable to approach the Court of their own accord, whether because of poverty, a lack of awareness of their rights, or for another similar reason. The public interest petitioner was deemed to be acting on their behalf before the Court. In other words, the public interest petitioner is the only link between the Court and the people whose “interests” are (supposedly) central to the litigation. Removing her, therefore, betrays PIL’s very raison d’etre.

Secondly, Bhuwania shows how, in a number of PIL cases, the Public Interest Petitioner is replaced by an amicus curae (“friend of the Court”), who often happens to be a senior, well-established lawyer. The conversation is limited to the Court and the amicus. Bhuwania cites a particularly sickening example of this in the Forest Case (one of the Supreme Court’s largest PILs): at a hearing, Sanjay Parikh, who was representing indigenous persons directly interested in the outcome of the PIL, was not allowed to make arguments, and was instead told that the interests of the indigenous persons would be taken care of by the amicus. By taking the examples of several PILs at both the Supreme Court and the Delhi High Court, Bhuwania shows how the direction of “big-ticket” PILs ends up being virtually taken over by the amicus, who becomes a clearing house for interlocutory applications, and assumes the task of guiding the PIL through succeeding benches of the Court.

Thirdly, Bhuwania points out that a number of parties interested parties are never heard in Court. At the very beginning of the book, he recounts an incident where, attempting to halt an ongoing slum demolition, he was shown “a notice [that] listed a writ petition under which its demolition had been ordered, which none of the inhabitants of the settlement had ever heard of.” (p. 11) This – he shows – was particularly common practice during the Delhi High Court’s PIL-managed slum demolition drive in the mid-2000s. Pointing to a PIL that began as something entirely different, but somehow became about slum clearances around the Yamanua bed, Bhuwania notes that:

“The court here made its own accusations, came up with its own facts and ordered its own remedy, without feeling the need to hear anybody else.” (p. 90)

Harsh, but true.

A combination of these three factors – the marginalisation of the original petitioner, the primacy of the amicus, and the failure to hear affected parties – ensures that PIL cannot in any sense be called “democratic”, or be said to be about “democratising justice” (or, in the words of one of its most enthusiastic cheerleaders, an instance of “demosprudence”). On the contrary, it is an exemplar of elite, top-down “justice”. One of Bhuwania’s important insights is that despite its elitist and exclusionary character, PIL, from its very inception, has been justified in the name of the people (and hence, the title, Courting the People). Bhuwania draws some disturbing parallels between Emergency-era slum clearances, and the slum demolition drives of the 2000s. Both, he points out, were ultimately justified by similar rhetoric.

Fourthly, the refusal to hear interested parties is accompanied by an eschewal of standard rules of evidence. Bhuwania points out that this began with a case that is normally hailed as the gold standard of PIL: Bandhua Mukti Morcha vs Union of India. In that case, which was about the exploitation of workers at stone-crushing quarries, the Court had appointed a Commission to bring out a report. The defendants objected to the report, arguing that it was based on ex parte statements, which had not been subjected to the rigours of cross-examination. Bhagwati CJI rejected this argument by stating that PIL was not “adverserial” litigation, and characterised by procedural flexibilities. Two decades later, the chickens truly came home to roost when, in the slum demolition cases, the Delhi High Court simply refused to hear factual arguments aimed at demonstrating that the slums, in question, were not illegal structures.

As a related point, Bhuwania also shows how the Courts’ PIL jurisprudence has essentially turned into death by a thousand interim orders. PILs are defined by continuing proceedings: instead of a final judgment resolving a case, the proceedings are kept alive through interim orders, passed from time to time, over years. Unlike a final judgment, interim orders do not have to be reasoned. Consequently, some of the most far-reaching impacts of PIL take place through – what is effectively – pure judicial fiat.

Fifthly, a combination of all the four factors – impoverished participation and a rejection of evidentiary standards – necessarily yields outcomes that often have catastrophic consequences. Bhuwania takes the example of the Delhi Vehicular Pollution Case (which, again, began as a narrowly-focused PIL, but soon ballooned into a PIL for dealing with pollution in Delhi). At various points, the Supreme Court passed orders freezing the number of auto-rickshaws in the city, and also mandating a compulsory switchover to compressed natural gas (CNG). What resulted was the following:

“… studies have shown that before the Supreme Court’s double whammy, most auto rickshaws were owned by drivers themselves, but the effect of the fuel change and the permit freeze was that almost the entire fleet of auto rickshaws came under the control of financiers and drivers were converted into wage labourers.” (p. 55)

Readers will recognise here Lon Fuller’s famous argument that the judiciary is particularly ill-suited for resolving “poly-centric” disputes: that is, disputes involving multiple factors and aspects, where a move aimed at resolving one aspect will have knock-on effects on the system as a whole; such disputes, Fuller argues, require the kind of fine-grained balancing that the Court simply does not have the resources to indicate (in the PIL contest, this argument has been made by Lavanya Rajamani). Bhuwania’s insight, however, takes us one step further: given that the Court has chosen to adjudicate poly-centric disputes through PIL, one would expect it to pay even greater heed than normal to ensuring full representation of all stakeholders, and rely even more on the opinions of domain experts. Instead, the judiciary has gone the exact other way.

Sixthly, these factors lead not only to bad results, but also to inadequate understanding of the problems at hand. As Bhuwania points out, in the context of the slum demolition cases, the overriding rhetoric that emerges from the Courts is that “public land” is being illegally occupied, at the expense of taxpayers, and therefore needs to be cleared. However, this is a very simplistic explanation of both the causal issue, as well as in its attribution of moral agency. What it ignores, for instance (and here Bhuwania draws on the work of Usha Ramanathan), is:

The cause of the ‘illegal’ occupation of public land is… directly attributable to the non-performance of state agencies.’The 10th Plan document of the Planning Commission of India itself noted that up to 90 per cent of the deficit in urban housing at the time pertained to the urban poor and was attributable to the non-provision of housing to slum dwellers. The courts, throughout this period, ignored any attempt to bring to its notice to any such systemic analysis.” (p. 85).

Seventhly, the overarching justification for PIL – right from its inception – was outcome-based. Bhuwania points to many statements made by Justice Bhagwati – which focused on how what mattered were what the Courts were doing (readers will recall that this is also the justification offered by PIL’s primary academic defenders). What this ended up doing, Bhuwania argues, was naturally that:

“Once a frankly instrumental role is accepted for PIL courts, with its decisions moored only by concepts as capacious as ‘social justice’, whose meanings necessarily vary with the zeitgeist, it should be no surprise that the issues taken up by a new generation of PIL judges for their social activism are of a very different sort from the original votaries of PIL.” (p. 116)

This last paragraph takes us to the heart of Bhuwania’s argument. The instances of “bad PILs”, or “abuses of PIL” were simply made possible because of what PIL allowed judges to do, the kinds of power it vested them with, and how it dispensed with existing rules of procedure as unnecessary, or as impediments to justice. In the case of criminal law, for instance:

“… the delegitimisation of legal procedure that accompanied the rise of PIL in India… has actually made it easier for courts to justify and overlook departures from the basic principles of criminal procedure that mark such statutes.” (p. 26).

Consequently – to sum up Bhuwania’s argument – it makes no sense to talk of “good PILs” and “bad PILs”, or “abuses of PIL”. The problem is PIL.

This is a bold and radical argument, that goes against the grain of prevailing academic, legal, and judicial consensus. Over the course of the coming week, we will discuss some of its claims further, and in greater detail.

 

 

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Online Speech and Intermediary Liability: The Delhi High Court’s MySpace Judgment

On the 23rd of December, a division bench of the Delhi High Court handed down its judgment in MySpace vs Super Cassettes. In the process, the Court laid down some important legal principles regarding intermediary liability in the case of copyright claims, the scope of safe harbour provisions, and injunctions. The judgment, therefore, has significant ramifications for online speech, and ought to be studied closely. It is also worth reading because it is one of the first Indian judgments (to my knowledge) that focuses upon the special characteristics of the Internet from the point of view of expanding online speech, and not contracting it. As I shall argue, on the core question before it – that is, balancing online speech with the statutory mandate of protecting copyright – the Court successfully negotiated a minefield of legal and technical issues, and – apart from one finding – managed to tread a fine line between the competing interests.

Background

In 2008, Super Cassettes filed a suit against MySpace. It argued that a lot of the songs and other audio-visual content that MySpace hosted on its website violated its copyright. It further argued that MySpace profited from this through advertisements that were inserted into the videos. Furthermore, MySpace’s existing systems of protecting copyright – i.e., a terms of service agreement with its users directing them not to violate copyright, a notice-and-takedown system where MySpace would take down copyright infringing material on being notified by the holder, and a Rights Management Tool, whereby copyright holders could sign up, create digital fingerprints of its content, and then submit it to MySpace, who would then block mirror content – could not absolve it of liability under Indian law. Super Cassettes argued that MySpace had violated provisions of the Copyright Act. It sought a permanent injunction, and damages.

MySpace argued, on the other hand, that it was an intermediary, and had no role to play in making, modifying, or uploading content upon its website. The advertisements that were shown just before a video played were through an automated process, depending upon matches between keywords. Consequently, MySpace was not modifying any content in its own right, and was protected under the safe harbour provisions of the Information Technology Act. Furthermore, a general injunction to remove copyright-infringing material was impossible to comply with, because not only were there more than 100,000 works on the website which MySpace would have to sift through, but it would also have to monitor every future work that was uploaded on its website.

On hearings for interim orders, the single judge of the High Court found that MySpace was prima facie in breach of the Copyright Act by providing a “space” where infringing material was published, and with “knowledge” that such material was being published (the two requirements under Section 51(a)(ii) of the Copyright Act). The single judge further held that MySpace’s role went beyond that of an intermediary; and in any event, under the proviso to Section 81 of the Information Technology Act, the provisions of that Act (including the safe harbour provisions) were clearly subservient to copyright law. MySpace’s safeguards – such as the Rights Management Tools – were not relevant to a finding of liability for copyright infringement, and could only come into play as factors for mitigating damages. Consequently, the single judge granted a qua timet injunction (i.e., an injunction against future acts), prohibiting MySpace from allowing uploads of any material that breached Super Cassette’s copyright, and to delete from its website the songs and other content about which Super Cassettes provided it with the relevant details.

MySpace appealed.

Issues before the Division Bench

At the outset, it is important to note that the division bench of the High Court was concerned only with the issue of the injunction order – that is, the order of injunction – and not with the overall suit between the parties. Consequently, Justice S. Ravindra Bhat, writing the judgment of the Court, framed the following three legal issues for adjudication:

 “First whether MySpace could be said to have knowledge of infringement as to attract Section 51(a)(ii) and consequent liability; Second, does proviso to Section 81 override the “safe harbor” granted to intermediaries under Section 79 of the IT Act third, possibility of harmonious reading of Sections 79 and 81 of the IT Act and Section 51 of the Copyright Act.” (paragraph 31)

Knowledge of Infringement

Section 51(a)(ii) of the Copyright Act states that copyright shall be infringed when a person “permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright.”

The Division Bench agreed with the single judge that MySpace’s website was a (virtual) “place”, from which MySpace earned profit (paragraph 34). The key question was whether, in the absence of specific notice, MySpace could be said to be “aware” or have “reasonable grounds to believe” that copyright infringement was taking place on its website. The single judge had held that the very presence of safeguard provisions and tools (such as notice-and-take-down) in MySpace’s user agreements signalled a “general awareness” that copyright was being infringed on its website, and this was enough for liability to be attracted under S. 51(a)(ii). The Division Bench disagreed. In paragraph 35, Justice Bhat held:

“Simply put, that test [of general awareness] overlooks that unlike “real” space, in a virtual world, where millions of videos are uploaded daily, it is impossible under available technology standards to identify the streaming content, which actually infringes. Knowledge has a definite connotation, i.e a consciousness or awareness and not mere possibility or suspicion of something likely. The nature of the Internet media is such that the interpretation of knowledge cannot be the same as that used for a physical premise.”

He then went on to develop this argument in the succeeding paragraphs, noting that in the specific context of the Internet, where a system could store “millions” of videos, the concept of “constructive”, or assumed knowledge, from the offline world, could not simply be transplanted here. Rather:

“The requirement is to give specific information to the content host or the website(MySpace) that infringement occurs with respect to the specific work. A general or vague description of the works would be insufficient as this then leaves room for MySpace to rely guesswork as to what content has to be removed. Therefore, the onus is upon the plaintiff to give detailed description of its specific works, which are infringed to enable the web host to identify them.” (paragraph 36)

Super Cassettes argued, however, that it had notified to MySpace a list of more than 100,000 songs in which it had copyright. The Division Bench held that this was insufficient, especially because when MySpace had done a preliminary scan of these 100,000 songs, it had found that many of them had been uploaded by distributors or performers who might well have been covered under copyright exceptions (such as, perhaps, fair use). Consequently, the Division Bench held:

“It is only when a specific work is mentioned can it be said that MySpace possesses knowledge of a work being infringed on its website. Providing long lists of all works, tasking MySpace with identifying and removing infringing content is not enough. It is only when MySpace has specific or actual knowledge or when it has reasonable belief, based on information supplied by SCIL and if despite such knowledge or reasonable belief it fails to act can it be held liable for infringement…  in other words, an indiscriminate and blind acceptance of SCIL‟s entire list to run a general filter and “take down” all content would result in grave damage and result in likely multifarious disputes: with up-loaders, many of whom are original creators in their own right and might have used a miniscule quantum of the copyrighted content in… their larger original creation; with distributors, who might hold genuine licenses and with others who create versions, remixes or original titles which may have little content; still there may be other content uploaders whose material only superficially resembles with the titles owned by SCIL, because of the lyrics or titles but is otherwise genuine creation with its independent copyright.” (paragraph 38)

In the present case, therefore, the Court held that MySpace had no prima facie knowledge of infringement (paragraph 39).

The Interplay Between the Copyright Act and Intermediary Liability under the IT Act

This brought the Court to issues 2 and 3 (see above). MySpace had sought sanctuary under Section 79 of the Information Technology Act. Section 79 provides a safe harbour to intermediaries from being held liable for unlawful content on their servers. This safe harbour is lost if the intermediary receives “actual knowledge” that it is hosting unlawful content. And recall that in Shreya Singhal vs Union of India, the Supreme Court had held that “actual knowledge” under Section 79 was limited to either a court order, or a government directive.

As we can see, there is an overlap between Section 51 of the Copyright Act and Section 79 of the IT Act. Section 51(a)(ii) makes an entity liable for secondary infringement if it is “aware” or has “reasonable grounds for believing” that infringement is happening on its “place”. Section 79, which otherwise protects intermediaries, nonetheless revokes this protection if the intermediary has “actual knowledge” that its platform is being used for law-breaking (which includes copyright violation). Now, the key question is this: if the general standard of protection afforded to intermediaries under the IT Act (actual knowledge) – as interpreted in Shreya Singhal – is greater than the general protection in cases of secondary infringement under the Copyright Act (non-awareness), then which of the two laws will apply to the specific case of an intermediary whose website is being used for potential copyright infringement? Or, to put the question another way: if the intermediary does not have “actual knowledge” (as per Shreya Singhal) under S. 79 – that is, if it has not been notified by a court order or by the government that copyright infringement is taking place – can it nonetheless be held liable under Section 51 if it has the “awareness” of copyright infringement (as held by the Division Bench in Issue 1) taking place?

It is here that I part ways with the Division Bench. Super Cassettes argued that the IT Act was not applicable at all to cases of copyright infringement, since the proviso to Section 81 of that Act stated that “nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act.” The Division Bench – in my view, correctly – rejected this argument. It pointed to the language of Section 79 itself, which itself had an overriding clause: “Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3)…” – which, according to the Division Bench, meant “that the only restriction to be placed in the application of Section 79(1) is contained within the section: Section 79 (2) and Section 79 (3).” Consequently:

“In this Court‟s opinion, Section 79 grants a measured privilege to an intermediary. However, that would not mean that the rights guaranteed under the Copyright Act are in any manner curtailed. All Section 79 does is regulates the liability in respect of intermediaries while the Copyright Act grants and controls rights of a copyright owner. Under the circumstances, it is difficult to conceive how one would pose a barrier in the applicability of the other. The true intent of Section 79 is to ensure that in terms of globally accepted standards of intermediary liabilities and to further digital trade and economy, an intermediary is granted certain protections. Section 79 is neither an enforcement provision nor does it list out any penal consequences for non-compliance. It sets up a scheme where intermediaries have to follow certain minimum standards to avoid liability; it provides for an affirmative defence and not a blanket immunity from liability.” (paragraph 47)

In the succeeding paragraphs, the Court stressed on the fact that “Parliament by amending the IT Act intended to create a separate provision and regime for intermediaries…”, and that “given the supplementary nature of the provisions- one where infringement is defined and traditional copyrights are guaranteed and the other where digital economy and newer technologies have been kept in mind, the only logical and harmonious manner to interpret the law would be to read them together.” So far, so good. However, in paragraph 50, the Court then held:

“Section 79(3) of the IT Act specifies that when a person has actual knowledge or upon notification by the appropriate government or its authority fails to expeditiously remove or disable access to an unlawful content then the immunity granted under Section 79(1) is revoked. The knowledge contemplated under this section is actual knowledge. In Shreya Singhal (supra), Section 79(3) with Rule 3(4) of the Rules were read down to mean receipt of actual knowledge from a court order or on being notified by the appropriate government. However, this was in respect of restrictions under Article 19(2) of the Constitution of India. The Supreme Court was conscious of the fact that if millions of requests for take down are made, it would become difficult for intermediaries (such as Google) to identify legitimate requests. In the case of copyright laws it is sufficient that MySpace receives specific knowledge of the infringing works in the format provided for in its website from the content owner without the necessity of a court order.”

However, instead of reading Section 51 of the Copyright Act and Section 79 of the IT Act harmoniously, this effectively subordinates the latter to the former. In the first part of its judgment, the Court undertaken an independent analysis of Section 51, and arrived at a “knowledge” standard for intermediaries. This standard – of specific notice – was considerably less protective than Section 79 IT Act’s requirement of “actual knowledge” through a court order or the government. In paragraph 50, the Court simply adopted the specific notice standard “in the case of copyright laws.” In other words, intermediaries who were otherwise protected under Section 79 of the IT Act would lose their safe harbour if they were given specific notice of copyright infringement by the copyright owner, even in the absence of a court order or a government directive.

The Court justified this by pointing to the “red flag” requirements under the American DMCA, which is another form of notice-and-take-down. That, however, cannot be an answer to why the actual notice standard laid down in Shreya Singhal would be diluted to specific notice in case of copyright claims. And the broader problem is this: even under the Division Bench’s heightened requirement of “specific notice”, the primary onus of deciding upon the validity of a copyright claim, and deciding whether or not to take down content (thus restricting online speech) rests upon a private party – MySpace. The problems with this approach have been well-documented: facing the threat of losing their safe harbour and being sued for damages, private parties will err on the side of taking down content. MySpace, in all likelihood, will have neither the resources to parse Super Cassette’s notice to see whether the infringing content is saved by fair use, or by de minimis use, or any other exception to copyright infringement – and nor will it be willing to take the risk of affirmatively rejecting a notice, and then facing the possibility of extended litigation. It was precisely because of this that the Supreme Court in Shreya Singhal restricted “actual knowledge” to a court order or a government notification. In my view, the Division Bench unjustifiably dilutes that standard for copyright claims.

Furthermore, the matter is somewhat complicated by the operative part of the judgment. In paragraph 68(b), in its record of its findings, the Court notes:

“Section 51(a)(ii), in the case of internet intermediaries contemplates actual knowledge and not general awareness. Additionally, to impose liability on an intermediary, conditions under Section 79 of the IT Act have to be fulfilled.”

However, this seems to run counter to what came before: under this, Shreya Singhal’s actual knowledge standard under Section 79 would apply over and above Section 51’s actual knowledge standard that the Division Bench laid down while discussing Issue 1.

Here is one possible reconciliation: since MySpace was already following a notice-and-take-down rule, the Division Bench’s discussion on specific notice should be limited to finding that what MySpace was doing was consistent with law. The Division Bench did not say that a specific notice would be sufficient to erase safe harbour as a general proposition of law. Rather, in paragraph 68(b), it made clear that the general proposition of law was that intermediaries would continue to be protected even in cases of copyright infringement, unless Shreya Singhal’s standard of actual knowledge was satisfied.

This would be a far more speech-protective reading of the judgment. However, it is a difficult one to sustain, in light of the clear observations of the Court, which we discussed above. This is one issue, then, on which the judgment’s import is – in my view – slightly unclear.

Qua Timet Injunctions

Lastly – and very importantly – the Division Bench agreed with MySpace’s contention that the qua timet injunction was virtually impossible to enforce. Justice Bhat made the crucial observation that:

“A further balancing act is required which is that of freedom of speech and privatized censorship. If an intermediary is tasked with the responsibility of identifying infringing content from non-infringing one, it could have a chilling effect on free speech; an unspecified or incomplete list may do that. In an order of relief such as that passed by the learned Single Judge, MySpace would be in contempt of court for not complying with an order, which is otherwise impossible or at best onerous and cumbersome of performance. In order to avoid contempt action, an intermediary would remove all such content, which even remotely resembles that of the content owner. Such kind of unwarranted private censorship would go beyond the ethos of established free speech regimes.”

(Of course, as I argued above, it is precisely this privatised censorship which is a problem with the specific notice standard that the Court did endorse).

The Court also noted that if MySpace was forced to remove content in accordance with the vague terms of the qua timet injunction, it might even end up being in breach of its contract with its users, in cases where lawful content ended up being taken down. Consequently, the Court finished by holding:

“Without a notice containing the details and location of the exact works in which infringement is complained of, MySpace cannot be expected to scan through such large number of videos to discern infringement. This is not only impractical but also dangerous for reasons discussed previously. A vague order of injunction against works which are yet to exist is not only contrary to law but also impossible to monitor. Therefore, SCIL cannot give vague and general lists of its works but will have to give notice with specific details as well as locations of the works, which the appellant shall remove within 36 hours of receiving such notice.” (paragraph 66)

This is very important, in particular, because it bucks the trend of the High Courts granting qua timet injunctions (accompanied by John Doe orders) almost as a matter of course.

Conclusion

MySpace vs Super Cassettes is a landmark judgment that contributes in no small measure to an evolving international jurisprudence on online free speech and intermediary liability. The High Court pays close attention to the characteristics of the internet, and is very solicitous to how its holdings will affect the flow of information on the internet. Unlike other judgments, where the fluid and flexible nature of the internet has been used to justify greater regulation, the Delhi High Court, in MySpace, is concerned to ensure that this fluidity and flexibility is not stifled by legal concepts developed for the offline world. While its exact finding on the interplay between the Copyright Act and the IT Act is a little unclear, the judgment breaks new ground in its analysis of actual knowledge (for intermediaries) under the Copyright Act, its refusal of a qua timet injunction, and its finding that the Copyright Act will not exclude the safe harbour provisions of the IT Act. It is a judgment that should be studied and discussed closely.

 

 

 

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A Companion Blog

I have started a new blog called The Public Sphere which (I hope) will become a companion blog to ICLP. The Public Sphere will focus on two areas of law where disparities of power and structural inequalities make the application of constitutional norms particularly important, but where such norms are often ignored: the workplace and the family.

The objectives of the blog are set out here. The first two posts – on the Supreme Court’s decision to refer the correctness of the BWSSB judgment (definition of “industry” under the Industrial Disputes Act) to a nine-judge bench – may be found here and here.

I look forward to more of the same kind of engagement that has made writing ICLP so rewarding over the last three-and-a-half-years.

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Guest Post: The Supreme Court’s Entry Tax Judgment – II: The Dissents

(In this second part of their two-part series, Aditi Dani and Vikram Hegde examine the dissenting opinions in the nine-judge Supreme Court bench’s entry tax decision.)

In a video recently doing the rounds on social media, Justice Rohinton F. Nariman, at a lecture organized by the Bombay Bar Association at the Bombay High Court, on the importance of dissenting opinions, refers to the words of a Chief Justice of the United States’ Supreme Court, Charles Evans Hughes: the “role of a dissenting opinion in a court of last resort is an appeal to the brooding spirit of the law and the intelligence of a future day”. It is in this spirit that we may consider the dissenting and differing opinions in this case.

Banumathi J. and ‘local area’

Banumathi J., differs from Justice Thakur’s opinion on one crucial aspect. The Chief Justice holds that intra state discrimination was never within the scope of consideration of the Constituent Assembly, and hence rejects the argument that Article 304(b) would have be made applicable to taxes to act as a bulwark against intra-state discriminatory levy. Banumathi J., instead, relies on the observations made in State of Bihar and Ors. v. Bihar Chamber of Commerce and Ors., that “the State is a compendium of local areas …. the purposes and needs of local areas are no different from the purposes and needs of the State.” She observes that the Entry tax is a State level levy and the entry tax revenue is treated as the State Revenue. It is spent on the development of local bodies and the State in general. It is the State which has the power to tax; the local authorities themselves cannot levy the tax. Where the local areas cover the entire State, the difference between the ‘State’ and ‘a local area’ practically disappears. She points out the distinction between the levy of entry tax and levy of octroi, observing that the latter is only a local levy; entry tax is not collected is at the behest municipality or a panchayat attached to a checkpost. She does not advert to Shaktikumar M. Sancheti v. State of Maharashtra in this respect, which has been referred to by Justice Chandrachud.

Justice Chandrachud

While Justice Bhushan rightly refers to Justice Chandrachud’s judgment as scholarly, it would have certainly been much easier to understand, if only he had employed a little more clarity in a few places. Justice Chandrachud does a thorough job of tracing the socio-economic and political compulsions behind the guarantee enshrined in Article 301 and the Constitutional history in respect of freedom of trade and commerce (and Mr Harish Salve had advanced extensive arguments on this point).

On merits, Justices Chandrachud concludes thus:

A tax is not necessarily a restriction in every case – A tax may amount to a restriction where its direct and inevitable effect is to restrict the freedom of trade, commerce and intercourse. To establish whether a tax is a restriction for the purposes of Part XIII of the Constitution, the person who seeks to assail the validity of that tax under must show that it amounts to a restriction on the freedom on the flow trade and commerce guaranteed by Article 301. The test of ‘direct and inevitable effect’, for the purpose of Part XIII is not applicable to determine infringement of the fundamental right under Article 19(1)(g). The latter involves an individual right, whereas in context of Part XIII, the matter is to be looked at from the perspective of trade and commerce as a whole.

It may be inferred from his judgment that he does not agree with the majority on non-discriminatory taxes not constituting an infraction of Article 301. He observes that:

“The proposition that taxes do not constitute a restriction on the freedom of trade and commerce (save and except for a discriminatory tax which violates Article 304(a)) does not reflect a valid constitutional principle. … As a statement of constitutional principle, neither of the two positions which lie at the extreme ends of the spectrum is valid : at one end is the position that all taxes are restrictions and at the other end, is the position that no tax (except a discriminatory tax on goods) is a restriction.”

In other words, Article 304(a) does not exhaust the universe of taxation contemplated in Article 304; Discriminatory taxes not levied on goods, or discriminatory taxes levied on goods in “public interest”, are outside Article 304(a); Article 304(a) only prohibits the levy of a tax:

  • on ‘goods’
  • ‘imported from other States’
  • which discriminates between goods imported and similar goods produced or manufactured in that State.

Article 304(a) does not cover taxes on persons (profession taxes or luxury tax) or taxes on activities (betting and gambling): A discriminatory tax which is not on goods is not within the prohibition of that Article. Similarly, a discriminatory tax on goods which does not traverse State boundaries would also not fall within the ambit of Article 304(a), though it would offend Article 301. In that case, a State may justify the imposition of such a tax in the public interest, but it must meet the requirements of Article 304(b). If Article 304(b) were to be construed to not include taxes, such a course of action would be barred, however legitimate the State interest.

Articles 304(a) and (b) may be read conjunctively or disjunctively, depending on whether the tax legislation carries ‘restrictions’: this part is a bit confusing, for he doesn’t say so explicitly. An overall reading of his judgment would suggest that he concludes thus. He observes that:

  • In the context of Article 304(a), the use of the expression ‘may’ in the prefatory part, together with ‘and’, which separates clauses (a) and (b), indicates that the true meaning and intent is conveyed by the joint and several and/or.
  • The Legislature may impose a tax falling under clause (a) as well as a reasonable restriction falling under clause (b). Alternately it may impose one of them.
  • However, when it imposes a tax and/or a restriction, the state legislature has to abide by the conditions of clauses (a) and (b) respectively.
  • Unless the tax imposed constitutes a ‘restriction’, the proviso to Article 304(b) will have no application for, it is only when there is a restriction that the question of its reasonableness can arise.

Article 304(a) does not contemplate only the levy of tax under Entry 52 of List II: The expression “any tax” in Article 304(a) does not mean a tax which is referable to only one subject of legislation falling under a taxing entry in List II. When a legislature legislates, the full range of its plenary powers is available to it, since the source of legislative power is traceable to Articles 245 and 246, and not to the entries in the Lists. The legislatures are not confined to imposing a tax under one entry while formulating a fiscal law. Hence, Article 304(a) does not fetter the States from ensuring an equality of tax burden between goods that are imported from other states and goods manufactured or produced within.

The entire State is not a ‘local area’ – A local area cannot be defined with reference to the entire state. Justice Chandrachud relies on the decision in Shaktikumar M. Sancheti v. State of Maharashtra (1995) 1 SCC 351 as also the 73rd Constitution Amendment which fortifies the principle laid down in Diamond Sugar Mills Ltd v. State of U. P. (dealt with in Shaktikumar Sancheti’s case) that a local area an area administered by a body (such as Municipalities, Panchayats or local board) constituted under the law for the governance of local affairs in any part of the state.

Entry tax can be imposed on goods imported into India from other countriesEntry 83 of List I (customs) and Entry 52 of List II (entry taxes) have separate and distinct fields of operation. The distribution of powers with reference to the taxing entries in List I and II is mutually exclusive. Provisions of the Customs Act do not detract from the power of the state legislatures under Entry 52 nor do they denude the states from levying an entry tax once the taxable event under state law has occurred. Banumathi J. also makes a similar observation.

He agrees with the majority on the other counts i.e.

  • Prohibited from making a hostile discrimination, the State may however make a reasonable classification under Article 304(a).
  • To levy tax on goods imported from another State, it is not necessary for the State to produce or manufacture similar goods.
  • The concept of compensatory tax, replete with doctrinal problems, is best eschewed.

Two reasons why you should read his judgment closely:

  • For the history of socio-economic and political compulsions in creating and preserving fiscal autonomy of States. These observations may be relevant in construing the GST Amendment. But that is really the subject of a whole other post.
  • For referring to caselaw concerning the constitutional power to levy taxes.

Justice Bhushan

Justice Bhushan agrees with Justice Chandrachud on most counts, but agrees with the majority on overruling the compensatory tax theory. His is a fairly straight-forward judgment (though it spans 181 pages) and his direct and precise answers are appreciated. He concludes thus:

  • Levy of a non-discriminatory tax may constitute infraction of Article 301 if it impedes the freedom of trade, commerce and intercourse, unless saved under Article 302 – 304. He agrees with Justice Chandrachud here and disagrees with the majority.
  • A State law made under Article 304(a), not containing any restriction on the freedom of trade, commerce and intercourse, need not comply with Article 304(b). However, a law made under Article 304(a) which contains restrictions on freedom of trade, commerce and intercourse is also subject to the proviso to clause (b) of Article 304 of the Constitution. The compliance of Article 304(b) proviso whether required or not shall depend on the nature and content of the State legislation. Here also, Justice Bhushan agrees with Justice Chandrachud, on the true intent of the two clauses being joint and several.
  • The word ‘restriction’ appearing in Article 303(b) also covers tax legislation. Justice Bhushan agrees with Justice Chandrachud. He further holds that the ‘direct and immediate effect test’ as laid down in Atiabari and approved in Automobile Transport still holds good.
  • He disagrees with Justice Chandrachud (and the majority) on the imposition of tax on imported goods if no similar goods are manufactured / produced within the State. Justice Bobde agrees with Justice Bhushan in this respect. Justice Bhushan observes that imposition of tax on the locally manufactured or produced goods is a condition precedent for imposing tax on similar goods coming from other States. The question of discrimination shall arise only when first condition that is locally manufactured or produced goods are taxed by a State. No question of discrimination arises if the first condition is not fulfilled. For this purpose, he relies on State of Madhya Pradesh Vs. Bhailal Bhai and Others and Kalyani Stores Vs. State of Orissa .[1]
  • He agrees with the majority on grant of set offs / exemptions, observing that the same has to be limited to a specified category for a short period based on intelligible differentia; exemption in general terms of unlimited nature cannot be approved.
  • He does not comment upon the entire State being a local area and imposition of entry tax on goods imported into the Indian landmass.

Both dissenting judgments carry similar observations on Article 245 and 246 being the source of all legislative power, similar to the observations in the majority judgment. But these, being obvious and repetitive in nature, are not specifically adverted to here.

[1] Chandrachud J. also adverts to Kalyani Stores but observes that the principle laid down therein cannot be extrapolated to Article 304(a) where the tax which is imposed is not in the nature of a countervailing duty under Entry 51 of List II.

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Guest Post: The Supreme Court’s Entry Tax Judgment – I: The Majority Opinions

(In this two-part series, Aditi Dani and Vikram Hegde examine the decision of the nine-judge bench of the Supreme Court, delivered late last year, on the constitutional validity of entry taxes imposed by states)

How many 9 judge bench decisions have there been? Justice D.Y.Chandrachud, in his minority opinion in Jindal Stainless [4] v. State of Haryana, claims that there have been only eight reported decisions of 9 judge benches. Justice Ramana claims there have been only 17 judgements of 9 judges or more, of which four judgments are by eleven judge benches and one by thirteen judges, and hence 12 judgments by nine judge benches in all. A book released earlier this year, counts three more.

Whatever be the number, it increased by one on 11th of November when the Supreme Court pronounced its judgment in Jindal Stainless [4] v. State of Haryana. Alok Prasanna Kumar had covered the circumstances it arose in and the issues before the Court.

Preliminary Objection: Revisiting Old Judgments

It may be appropriate to mention the preliminary objections raised by some of the counsel, at the very outset, though the Court, in the course of the hearing did not deal with these issues, till they had almost become moot. Reliance had been placed on the decisions of Constitution Benches in Keshav Mills; Bengal Immunity Co. v. State of Bihar and Lt. Col. Khajoor Singh v. Union of India to state that precedent ought not to be disturbed unless there was a “baneful effect” on the public and there was a “fair amount of unanimity that the previous decision is ‘manifestly wrong’”. Perhaps Justice Ramana answers this best when he points out that approximately 60 Constitution Bench judgments have been overruled in 60 years hence implying that there was nothing wrong in reconsidering Atiabari Tea Company and Automobile Transport Company.

The Questions

The referring bench had framed eleven questions for consideration by the 9 judge bench. On the very first day of hearing, the Court distilled the 11 questions into four questions and set out to consider the following questions:

  1. Could the levy of non-discriminatory tax per se constitute infarction of Article 301?
  2. If yes, can compensatory tax also fall foul of Article 301?
  3. What are the test for determining whether a particular tax or levy is compensatory in nature?
  4. Are the entry taxes levied in the present batch to be tested with reference to both Article 304(a) and 304(b)?

As it turned out, the answer to the first question would render the answers to the rest of the questions either unnecessary or obvious. In answering the questions, the Court has delved into some other themes in law and polity which we shall examine.

The First Question

The First question, i.e., could the levy of non-discriminatory tax amount to a restriction of the freedom of trade, commerce and intercourse guaranteed under Part XIII of the Constitution, is crucial. While the Chief Justice and the concurring judges agree that this question is to be answered in the negative, they have different reasons for doing so.

Justice Thakur lays the ground for this examination by acknowledging some of the settled principles and tools of interpretation. The Constitution must be interpreted as a whole, and an interpretation that renders another provision redundant must be avoided and to achieving this may “involve ironing some rough edges”.

Then, expressing a sentiment that is echoed by all the judges in the majority, Justice Thakur holds that power of taxation is an attribute of sovereignty. The principle is well settled. However, this power has been recognized by the courts more readily in the case of the Union, than in the case of the states (see Jagannath Baksh Singh vs State of UP). This judgment, coming from a bench of nine judges, significantly lends its weight to strengthening the taxing power of the states where it affirms that state governments enjoy the sovereign power of taxation to the same extent as the Union.

The power of taxation is limited on two counts:

i) There are a host of provisions in the constitution which limit the power of taxation, mainly in Part XII of the Constitution.

ii) Such taxing power, as divided between the Union and the State cannot be deduced from a general entry on that subject in the lists in the seventh schedule. However, the constitutional limitation on the power of taxation must be express.

Justice Ramana expresses a similar opinion on the power of taxation of the states, which we shall examine in greater detail when we discuss federalism.

 Compensatory Tax

We may recollect here that the Court in Automobile Transport Company vs State of Rajasthan, had laid down that a “compensatory tax” would not amount to a restriction for the purpose of Part XIII of the Constitution. This, in a way acted as a mid-way view, between taxes being considered to be within the contemplation and the opposite view. The concept of Compensatory Tax, which had held the field for half a century, was rejected by almost all judges in Jindal Stainless [4]. On the one hand, all counsel for the assessees, barring two (Mr. Ganguli and Bagaria, senior counsel), conceded that the Compensatory Tax theory was either conceptually wrong or unworkable and impractical. The Union and the states would argue the same with added vehemence. Perhaps mindful that constitutional principles cannot be decided by consent of parties, but without expressly mentioning so, Justice Thakur examined the validity of compensatory taxes. Reasoning that there is no concept of tax being compensatory other than in a larger sense, in that all taxes are for public good, and compensatory taxes would obliterate the difference between a tax and a fee, Justice Thakur rejects the Compensatory Tax theory. That it is also unworkable in practice, is an added flourish to what is already decided.

Is tax a restriction of the freedom of trade, commerce and intercourse?

Have done away with the mid-way status quo, the paths that remained to be chosen between were the two relatively extreme ones, i.e., that either taxes can constitute a restriction of the Freedom of Trade and Commerce (as guaranteed by the Constitution) or they do not. This was framed by Justice Thakur as a choice between the views of Justice Gajendragadkar and Chief Justice B.P.Sinha, in Atiabari Tea Company. Justice Thakur relies upon the very wording of Article 304 to hold that Articles 304(a) and 304(b) refer to two different topics altogether. Article 304(a) is considered, by Chief Justice Thakur, to be the only provision containing any restrictions on the power of taxation.

Further reasoning that the expression “may impose by law” in Article 304(a) does not constitute a restriction on the power to tax, Chief Justice Thakur reduces the scope of the restriction to the effect that taxation of import of goods is justified only if similar goods manufactured within the state are also taxed. The restriction also means that there cannot be any discrimination between locally produced goods and imported goods of similar nature.

Some amount of attention is paid to the non-obstante clause in Article 304 and its implications. Relying upon the opinion of Justice S.K. Das in Automobile Transport Company, Justice Thakur holds the non-obstante clause to be applicable to the Article 304(b) alone. This is perhaps what he means when he earlier says “ironing out rough edges”.

Where Chief Justice Thakur arrives upon the conclusion on the basis of the brass tacks, Justice Bobde, concurring, adopts a more conceptual approach. Justice Bobde holds that Entry Tax is an impost levied in the course of the freedom of trade. But for freedom of trade, there would be no transaction and there would be no occasion for the levy of a tax and hence Entry Tax is not a restriction of the freedom of trade and commerce.

Justice Shiva Kirti Singh agrees with his maternal grandfather, Chief Justice B.P.Sinha, who in Atiabari held that taxes simpliciter would not amount to restrictions on free trade and commerce. However, he disagrees with Justice Sinha on his comments in Atiabari that a high rate of tax may amount to a restriction. Justice S.K.Singh says “these observations create practical difficulties of insurmountable proportions. Hence these deserve to be treated as obiter or interpreted in the light of the entire passage, to mean suchtaxes which impose an impediment to the free flow of trade, commerce and intercourse by creating discriminatory tariff wall/trade barrier” (emphasis in the original).

Justice Ramana, though, approaches the issue from a somewhat activist standpoint, ultimately bases his conclusions on a highly technical examination. He views the presence of a non-obstante clause in 304(a) as an indication that the Constitution protects the State legislations under Article 304(a) and (b) from overemphasized effect on freedom of trade under Article 301.

Justice Ramana then examines the Indian Judgments on the point in detail, and finally holds that if a state makes a law on subjects enumerated in Entry No. 45 to 63 of List II, of the Seventh Schedule, it is doubtful whether it can be invalidated only on grounds of violation of Article 301 and Article 304(a). Recognizing that various provisions of Part XII (Finance) deal with taxes and in Part XIII (Trade) only Article 304(a) mentions taxes, Ramana J. holds that these parts are distinctly separate. Every tax law made by a state need not be answerable to general provisions relating to trade, commerce and intercourse. Justice Ramana reasons that Article 304(a) is an isolated provision dealing with discriminatory taxes alone and this cannot be an evidence of 301 being applicable to tax statutes and held that since there are a number of restrictions envisaged in the provisions of Part XIII, Freedom of Trade under Article 301 must be understood to be only clarificatory and not absolute.

This view is echoed by Justice Banumathi who also makes a distinction between Part XII and Part XIII of the Constitution. Justice Banumathi also makes takes into consideration the sum total of powers conferred on the Union and the States in the constitutional scheme and determines that the Parliament has occupied an overwhelming space and that the power to make reasonable restrictions in public interest is therefore with the states. To subject even the tax levying power to presidential assent as contemplated under Article 304(b) is to erode the pillars of federalism this country is built on.

Also, though the Court in Atiabari had not based its judgment upon the position of law in Australia, where a similar “Commerce Clause”, being Section 92 of the Australian Constitution, provides for freedom of trade and commerce, there was reference to decisions of the Australian High Court in James v. Commonwealth and Commonwealth v. Bank of New South Wales. Chief Justice Thakur accepts the contention on behalf of the states that these judgments have been since overruled in Australia in Cole v. Whitfield and holds that the support that Atiabari and Automobile drew from Australian law, has “fizzled out” with the passage of time. Justice Ramana, examining the law in Australia, notes that in Cole v. Whitfield and later cases, the High Court of Australia held that Section 92 of the Australian Constitution only meant that Australia would be free from protectionist burdens.

In the US Constitution, the relevant clause is Article 1 Section 8 Clause 3, which is also known as the Commerce Clause. Justice Ramana examines the decisions wherein the Court had limited the power of the States to pass restricting legislations and also points out the shift in 1977, when it was clarified that it is only discriminatory restrictions by way of taxation that would be affected and holds that our Constitution directly provides what the Supreme Court of US has interpreted.

Justice Thakur thus answers the first question by stating that levy of taxes on import of goods from other states is not by itself and impediment under the scheme of Part XIII of the Constitution. This naturally means that a non-discriminatory entry tax would not have to pass through the more rigorous procedure in Article 304(b). Bobde, Shiva Kirti Singh, Ramana, and Banumathi concur with this decision.

Such a conclusion by the Court has a bearing upon the other questions that arise in the matter. On whether a non discriminatory tax would have to be tested under Article 304(b), the majority answers in the negative.

An argument was advanced on behalf of the assessees that when a state does not produce a particular type of goods but levies an entry tax on such goods and an equal tax imposed on such goods manufactured within the state, it would amount to discriminatory taxation though facially it would be an equal tax. This argument, which took up significant time of the court (the heuristic example given during the hearings, but didn’t find its way into the judgment, was that of coconuts in Punjab: If Punjab imposes an Entry Tax on coconuts imported into Punjab equal to the excise duty on coconuts produced in Punjab, such an entry tax, it was contended, would be discriminatory as no coconuts are produced in Punjab) is rejected by Justice Bobde with reasoning which is beautiful in its simplicity. Justice Bobde points out that discrimination would arise only when the state produces goods similar to those imported. When the state doesn’t produce such goods, the question of discrimination does not arise.

 Historical view

Justice Thakur, as do many other judges, takes a look at the historical circumstances which necessitated Part XIII of the Constitution. Pre independence, India was divided in to several Princely states, apart from the territories held by the British Raj. The lack of economic unity was acutely felt and discussed extensively in the Constituent Assembly. This gave rise to Part XII of the constitution, a fact accepted by all judges Atiabari onwards.

The judgment is also notable the multiple references to the collection of documents titled Framing of India’s Constitution edited by B. Shiva Rao. While this is certainly not the first judgment to do so, it is perhaps notable for the extent to which it relies upon the work for its understanding. This is of great help to the Court in considering this aspect not only on the basis of the statements made by various members and leaders of the Constituent Assembly, but also on the basis of the transition of the “Commerce Clause” from being part of the Fundamental Rights chapter in the earlier drafts of the constitution and eventually being moved to constitute a chapter by itself. The “germ plasma” for Article 301 comes from clause 13 in the draft submitted by the sub-committee on fundamental rights in the Constituent Assembly.

The references to the speeches of the members of the Constituent Assembly are numerous and many sections including a humorous interlude by Shri P.S.Deshmukh on the proliferation of non-obstante clauses are extracted wholesale.

The extracts of the Constituent Assembly show that the prominent voices, Dr. Ambedkar, Alladi Krishnaswami Ayyar, T.T.Krishnamachari etc. were quite keen on the removal of trade barriers within India and that the three points guiding Dr. Ambedkar when framing the scheme of Free Trade and commerce were i) To the extent possible, and in the interest of India as a whole, free trade between the units should be permitted as far as possible. ii) The interests of the states cannot be disregarded, iii) The Centre is to intervene in the case of any crises. On the other hand, C. Rajagopalachari expressed his concern that a lot of the “units” (states) were dependent on revenue from such entry taxes and would be hit if such taxes were taken away in the name of free trade.

The result of this examination of history is best summed up by Justice Ramana who in his concurring opinion states that the power of the State to levy any tax on goods imported is specifically saved and declared in the final clause, therefore it would be impermissible to test a law imposing entry tax with reference to Article 304(b). Taxes were not intended to be a restriction of the freedom of trade.

 Federalism

The judgment is notable for the multiple expositions on the nature and importance of federalism in India and also its centrality to our polity.

Chief Justice Thakur lays the ground for upholding differentiation when he relies upon Video Electronics to approve of the thought that economic equality is possible only if all parts of the country develop equally. An economically backward state would have a greater leeway to impose taxation and other measures to promote industries within their own jurisdiction. As long as the discrimination does not promote an unfavourable bias and as long as discrimination is in favour of a particular class of industry and for a period of time, it is permissible. Exemptions etc. would not be discriminatory so long as the intention is to equalize the fall of the fiscal burden on goods from within and outside the state. However, the most evocative lines on federalism come from Justice Ramana. He makes an interesting observation that Economic Unity in India is not a sustainable assertion as “82.5˚ Meridian or Indian Standard Time line seems to starkly divide India broadly as affluent West and destitute East”. However, in the face of dismal economic statistics, Justice Ramana holds strikes a note of optimism and faith in the federal system where he says

All is not lost in what we have achieved. We have stood with each other and for what is right? We have enacted laws and struck them down for right reasons. We have been beaten down but never gave up. We have braved poverty and hunger. We have cared about neighbors and have strived to be a welfare State. We have constructed great many things and achieved many more. We have advanced on scientific fronts and reached distances in universe which were unfathomable five decades back. We have earned a respectable name in the international scenario. We have produced great artists, many leaders and great men. We were not scared so easily by any adverse situation. First step in solving any problem troubling the present is recognizing that there is one India but India as a union of States. States being independent entities under the Constitution require resource to perform their duties under the Constitution.”[1]

He also makes some important observations that under the Constitutional Scheme, the powers of the Union and States are parallel. And that Parliament cannot be a super legislature over the state assemblies. “The Union does not exist in isolation rather it is a co-operative association of the States”. Tracing the history of federalism, he opines that the overriding powers given to the Union are only exceptional circumstances and that the States are supreme in the sphere allotted to them.

The recognition of this constitutional ethos clearly has a concrete effect on the decision in Jindal Stainless[4]. For example the view of Seervai that if Article 304(b) is interpreted to include taxes, it would dislocate the whole scheme of taxation in the Constitution is relief upon. Holding that “it would be surprising if the Union Legislature, i.e., Parliament could not take away the taxing powers of the State Legislatures and yet it would be open to the Union Executive under Article 304(b) to deprive the State Legislatures of their taxing powers” Justice Thakur echoes the thoughts of Matthew J. in G.K.Krishnan v. State of T.N.

[1] These are the authors’ second most favorite lines in Justice Ramana’s judgment. The first place goes to his concluding statement – “Lastly, it was a wonderful sight to see young practitioners ably assisting their seniors which only goes on to reflect vibrancy of Indian Supreme Court Bar.”

(In the next post, the authors will discuss differences in view, and the dissenting opinions)

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Call for Papers: Colloquium on Judicial Reasoning at Jindal Global Law School

Judicial Reasoning and Judicial Behavior: Studying the Supreme Court of India

Colloquium hosted by Center for Public Law and Jurisprudence

Jindal Global Law School

Call for Papers

The role of the Supreme Court of India in shaping the post-colonial nation has been central to its study in the academy. The institution’s assertion of supremacy in a constitutional democracy, and its tense relationship with separation of powers have been focal points of scholarship, and rightly so. However, there have been fewer studies on its structures of reasoning, its role as a policy maker, the impact of its structural organization as well as the role that the individual biographies of judges have played in the shaping of the institution as a whole. With more than six decades of appellate and constitutional adjudication behind it, any analysis of the Supreme Court’s functioning is bound to be challenging. However, this is also makes the institution ripe for study using tools drawn from a gamut of social science disciplines.

Accordingly, we propose to deepen existing scholarship of the Supreme Court with a colloquium that will bring together scholars of the Supreme Court to analyze its methods, reasoning and its institutional organization. We invite papers on any of these aspects of the Court’s body of work from different disciplinary perspectives, and not merely those that come from a doctrinal analysis of judicial decisions. Accepted papers may form part of an edited volume that will center on the imprint of the Indian Supreme Court on the making of constitutional democracy in contemporary India.

The themes/ questions that the papers might address are as follows:

  1. Judges of the Court – Biographies, Ethnographies and Subjective Biases: Aside from George H. Gadbois’ monumental work biographing the judges of the Court, sociological work on the Court has been limited. Further, these works do not adequately consider the manner in which the background of the judges might affect their sympathies and decision-making. In particular, there is a need to investigate the nature of assumptions and biases that inform the decision-making patterns of individual judges, and this would require a combination of theoretical, quantitative and qualitative field research. This work requires combining publicly available data with the imposing informal knowledge of the Court that floats within its corridors and, there are several challenges to doing this form of work. It is however, a promising field for sociological investigation.

 

  1. Structural Questions – Procedures and the rules of the practice, including on appointment of judges and how these shape substantive decision-making? Does the working of the Supreme Court lend itself to certain forms of reasoning, e.g., the use of precedent and departure from earlier decisions? What are some of the structural constraints that affect judicial behaviour like dissent? How do structural aspects affect the nature of cases that are often heard? Do structural factors influence the outcome of cases, and work against the interest of certain classes of litigants? How has the two-judge bench phenomena affected the manner in which law has evolved? Whether the manner in which cases are allotted to benches has influenced the evolution of law? While conclusive research on several such questions may be difficult, it may allow for experimenting with innovative methods.

 

  1. Judicial Reasoning – Is the court largely formalist? Is there a cleavage between its interpretive techniques in constitutional cases and other cases? What might explain the variations in interpretive techniques across types of cases? What forms of ‘normativity’ may be discerned in its decision-making processes? What are some ethical and moral assumptions that form the basis of decisions? How does the court construct gender, caste and religious identities and the manner in which such constructions would influence law? Does a liberal or conservative bias ground the reasoning of the court in certain types of cases? How has the court explored ambiguity, which is inevitable in legal doctrine? What hermeneutic tools do judges employ when discerning doctrine from precedent? What has been the Court’s tryst of with the philosophical notion of legal realism?

 

  1. Policy-making and Doctrine – Beyond the usual dichotomy of a law-making/interpretive function, which has marginal use as an analytical tool, and with the assumption that the Court, as a political institution shapes policy, several interesting questions arise. While evolution of doctrine in itself is studied frequently by practitioners and academics alike, it would be worth examining whether the evolution in a particular direction can be explained by changes in the social, economic or political context in which such cases arose. Whether the activism shown by the Court varies depending on the subject-matter with which the case deals? Whether the policy-making objectives of the Court affect the docket of the Court? Whether patterns in decision-making could point to the socio-economic or political aims of the Court? Whether the Court is capable of certain discernable, coherent objectives, despite its regularly changing composition? Moreover, the ‘dialogic process’ between Courts and law-making bodies has become an important analytical framework to study the role of Courts in shaping policy – how can this be applied to the Indian Supreme Court? How do judges view an ‘audience’ to their pronouncements and how do considerations of reputation affect the Court? How does the court influence the popular discourse on various social, political issues?

These themes are of course, intended to be suggestive and we remain open to all innovative and incisive analysis of the Supreme Court in the making of the modern Indian republic.

The colloquium will be held on 29-30 April 2017 at Jindal Global University’s campus, Sonipat, Haryana, India.

We will be open to abstracts till February 15, 2017. Please email your abstract as an MS-Word (.doc, .docx) file without any identifying references to Sannoy Das [sdas@jgu.edu.in], along with a separate document that contains the title of the proposed paper, your name and designation.

Abstracts will be selected through a double blind peer-review process and selected authors will be notified by February 25, 2017. Draft papers will be due on April 23, 2017.

For clarifications, please write to sdas@jgu.edu.in.

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‘O Brave New World’: The Supreme Court’s Evolving Doctrine of Constitutional Evasion

The Government initiates a program on a national scale, which has far-reaching effects upon the lives of citizens. It stakes its credibility and prestige upon the program, and defends its transformative potential for the country. Critics disagree. Among other things, they argue that the program is illegal without the sanction of law, and also infringes constitutionally guaranteed fundamental rights. The critics move the Court, and request an early hearing, since the government’s program is changing facts on the ground on a daily basis. The Court hears the case. Perhaps it agrees with the critics, and invalidates the program. The government then has to go back to the drawing board, iron out the illegalities, and come back with another program (if it considers it to be worth the effort). Or, the Court agrees with the government, and holds the program to be legally and constitutionally valid, and the government carries on. In both situations, the Court pronounces upon the scope and limitations of the fundamental rights at issue.

That is an example of a well-working system of checks and balances. However, over the last few months, there are indications that this system is not working in quite the manner that it should. This is a cause for significant concern.

The Aadhaar Hearing

The first substantive hearing in the constitutional challenge to the government’s Aadhaar Program took place on 23rd September, 2013 (all orders in Writ Petition 494/2012 can be accessed here). On that day, a two-judge bench of the Supreme Court admitted the petition for hearing, and passed the following order:

… no person should suffer for not getting the Adhaar card inspite of the fact that some authority had issued a circular making it mandatory.

On 8th October, 2013, the case was listed for “final hearing” on 22nd October, 2013. On 26th November, 2013, the Court passed directions for impleadment of all states and union territories. The case then proceeded to a three-judge bench. Through the course of January to April 2014, the three-judge bench heard arguments by Mr Shyam Divan, senior counsel for the Petitioner, on a number of dates. At the end of April, the case was listed for July, but only came up for hearing next more than a year later, on 21st July, 2015. Through the last week of July and the first week of August, the three-judge bench heard arguments from both Mr Divan and Mr Gopal Subramaniam .

At this point, the Attorney-General argued that there was no fundamental right to privacy under the Indian Constitution, and cases that had consistently held to the contrary since Gobind vs State of MP in 1975 were wrongly decided, since they had ignored binding eight and six-judge bench decisions. He asked for a reference to a larger bench. The Court agreed. On 11th August, 2015, it passed a detailed reference order.  In the order, it noted that:

“We are of the opinion that the cases on hand raise far reaching questions of importance involving interpretation of the Constitution. What is at stake is the amplitude of the fundamental rights including that precious and inalienable right under Article 21. If the observations made in M.P. Sharma (supra) and Kharak Singh (supra) are to be read literally and accepted as the law of this country, the fundamental rights guaranteed under the Constitution of India and more particularly right to liberty under Article 21 would be denuded of vigour and vitality.”

The Court also stated:

“Having regard to importance of the matter, it is desirable that the matter be heard at the earliest.”

Until the time that the case could be heard by a larger bench, the Court also issued the following directions:

“The production of an Aadhaar card will not be condition for obtaining any benefits otherwise due to a citizen… [and] the Unique Identification Number or the Aadhaar card will not be used by the respondents for any purpose other than the PDS Scheme and in particular for the purpose of distribution of foodgrains, etc. and cooking fuel, such as kerosene. The Aadhaar card may also be used for the purpose of the LPG Distribution Scheme.” 

There was one more substantive hearing, on 15th October, 2015. A five-judge bench of the Court added some more schemes to the ones listed out in the 11th August order, for which the Aadhaar Card could be used. The Court reiterated that:

We will also make it clear that the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other.”

And:

“Since there is some urgency in the matter, we request the learned Chief Justice of India to constitute a Bench for final hearing of these matters at the earliest.”

A five-judge bench is constituted by the Chief Justice at his discretion. After the hearing of 15th October (fifteen months ago), the case has not been heard. In the meantime, the government’s conduct is well-known. The Aadhaar Act was passed, to give statutory sanction to the program (questions have been raised about the constitutionality of the Act as well, especially regarding excessive delegation and the fundamental right to privacy). Despite numerous Supreme Court directions that Aadhaar could not be made mandatory, there have been reports on an almost weekly basis that an Aadhaar Card is effectively a requirement for some or the other benefit (the most recent one being today, for the MGNREGA). Contempt petitions have been filed before the Court, which remain pending.

In light of the Government’s conduct over the last year and a half, the Court’s refusal to hear the case goes beyond ordinary situations of matters being stuck in the courts for long periods because of judicial backlog and pendency. Aadhaar is a classic case where the more the Court delays, the greater the Government’s ability to eventually present it with a fait accompli – the fait accompli being that Aadhaar coverage becomes so deep, pervasive and intertwined with citizens’ lives, that even if the Court was to hold it unconstitutional, it would be, virtually, a technical or physical impossibility to undo it – or, if not an impossibility, the cost of disruption would be so prohibitively high, that no Government could reasonably implement it, even if it wanted to.

For these reasons, when the new Chief Justice assumed office this week, the case was mentioned before him for an urgent hearing. The request was declined (with observations that are deeply concerning, if they reflect the Court’s institutional position on fundamental rights). Presumably, it will not be heard any time soon – despite two judicial observations from the middle of 2015 highlighting the urgency of the case, and the need for a quick hearing.

Demonetisation

On November 8, 2016, the Prime Minister announced that Rs. 500 and 1000 notes would cease to be legal tender from midnight. In the coming weeks, this announcement was followed by a slew of notifications from the Reserve Bank that placed various restrictions on what citizens could or could not do with their money – how much they could withdraw from ATMs, how much they could withdraw from banks etc. At the time, the Prime Minister made the prediction – which now appears to be a little optimistic – that normalcy would return within fifty days – that is, by the end of the year.

As Namita Wahi argues, there are substantive legal arguments for the proposition that the demonetisation policy violated both law and the Constitution. On the first, arguably, the policy was ultra vires the RBI Act, and consequently, required the sanction of either a law, or an Ordinance (there is an Ordinance now). And secondly, that the Policy violated the right to property (Article 300A), as well as the fundamental rights to trade and life.

These arguments were raised by various petitioners challenging various aspects of the policy, who moved the Court soon after November 8. A number of abortive hearings took place over the course of the last week of November, and the first half of December. Finally, the Court referred the case to a five-judge bench, and formulated a number of questions about the legality and constitutionality of demonetisation.

It is now almost two months after the initial announcement. The Prime Minister’s self-imposed time limit of 31 December has expired. Many deaths have been reported. Much of the cash that was supposed to have been taken out of circulation is – reportedly – back in banks; whether or not it is true, surely, if not now, then soon enough, demonetisation will begin to wind itself down. In the meantime, there is no sign of the Constitution Bench.

Judgment by Evasion

Rarely – if ever – are contesting parties before a Court on equal terms. Before the Supreme Court, one party will always have the judgment of the lower Court in its favour, and consequently (absent a stay) will benefit from the case getting held up in the Court. In that sense, Aadhaar and Demonetisation are simply incidents of a broader problem of delay and backlog, where failure to hear and decide cases expeditiously does not cause equal harm to both sides, but benefits one at the cost of the other.

However, there is something more here. First of all, Aadhaar and Demonetisation are not ordinary cases – they are classically about the exercise of immense coercive State power against citizens. Adjudicating the legal validity of such State action is at the heart of why we have an independent judiciary. It is the reason why there is a system of checks and balances: because when power on such a scale is unrestrained by the rule of law and by constitutional norms, history has told us more than enough times what follows.

Secondly, as discussed above, this is not a case involving disputed property where, ten years later, the Court can decide the case and order the person in possession of the property to hand it over the victorious litigant. Aadhaar and Demonetisation are cases where, if the Court does not decide the issue within a certain period of time, any future decision will be an exercise in futility. It makes no sense to decide Demonetisation next year, after the policy has run its course – whatever rights were violated (if, that is, rights are being violated) cannot then be redressed. Similarly, it makes no sense to decide the constitutionality of Aadhaar after the program has begun to be used to avail virtually all (public, and some private) social services, and can no longer feasibly be disentangled from the daily lives of citizens.

Consequently, by refusing to decide, the Supreme Court effectively does decide – in favour of the Government. In effect, it upholds the validity of Aadhaar without hearing arguments on the constitutional questions, and without passing a reasoned judgment on Aadhaar and the right to privacy. In effect, it upholds the Government’s Demonetisation policy without deciding whether it is open to the State to place onerous restrictions on what citizens are allowed to do with their own money. In effect, it takes the side of State power, against citizen.

It is open to the Supreme Court to do so. But if that is what it is doing, then it ought to have the moral courage to defend its position in a reasoned judgment. It ought to explain – publicly – to citizens the scope of their fundamental right to privacy, and the manner in which Aadhaar is consistent with it. Once the Supreme Court decides, then its judgment can be engaged with, defended, criticised, its reasoning scrutinised closely, its positions critiqued. That is how it ought to be. But by simply refusing to hear and decide the case, where the consequences of non-decision are both terribly high and absolutely decisive, the Court only ends up abdicating its role as the organ of the State that is meant to stand between citizen and government power, and to keep the latter within its constitutionally-defined spheres.

The fact that this is how two of the most important constitutional issues in recent times have fared in the Supreme Court suggests that scholars of the Court can no longer make do simply with studying what the Court has held, and the jurisprudence that it has created through its judgments. Scholars must now also study this evolving jurisprudence of Constitutional evasion, which is defined by refusal, and by silence.

 

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