Monthly Archives: October 2015

Guest Post: The Delhi High Court’s Decision on the CAG’s DISCOM Audit

(In this guest post, Malavika Prasad analyses the Delhi High Court’s decision on the CAG DISCOM audit issue)

The Delhi High Court held yesterday, in United Rwas Joint Action v. Union of India and ors., that the Comptroller and Auditor General cannot be entrusted with the audit of DISCOMs in Delhi, under Article 149 of the Constitution of India read with the duties laid down under the CAG Act, 1971. The allegation in the public interest petition was that DISCOMS were inflating their cost of operation by making purchases of equipment from sister companies at values above the market price, thereby profiteering from the tariffs collected from consumers. The Delhi Electricity Regulatory Commission lacked the wherewithal to check this overpricing and thus, the GNCTD’s direction to the Comptroller and Auditor General of India, to conduct audit under Article 149 read with Section 20 of the CAG Act, was valid.

The DISCOMs argued that only 49% of the shareholding in DISCOMs is in the hands of Delhi Power Corporation Ltd., a GNCTD corporation, while 51% is privately held, thus bringing DISCOMs outside the ambit of Section 20 of the Act. The GNCTD contested this view by pointing out that the functions of DISCOMs were public in nature. The counsel for the CAG questioned the claim that DISCOMS are wholly private companies, adverting to not only the monetary funding (of more than Rs.2400 crores of public money ) by the State, but also the assets of the Delhi Vidyut Board that were transferred to DISCOMs, under Section 15 of the Reforms Act. Likewise, the public-interest petitioner pointed out that distribution infrastructure was made available to DISCOMs for free, and its character as a resource of the State cannot be ignored.

Dismissing the public interest petition, the Court faulted the procedure adopted by the GNCTD, holding that Section 20 could not have been invoked without notice of the “proposal for such audit”, as envisaged by Section 20(3). The proposal ought to be more than merely the desire or intention to audit, and must contain terms and conditions of the audit, as arrived at after consultation between the Government and the CAG according to Section 20(1), and reasons that led to the satisfaction that audit was necessary (Para 47). The Court also held, in a bid to prevent the GNCTD from undertaking another similar “misguided exercise”, on merits, that the CAG audit of DISCOMs would not be consistent with Section 20(3) and in public interest:

  1. In our opinion, the question, whether it is possible for the concerned government to take any action against a body or authority on the basis of the report of CAG, under the laws otherwise applicable to such body or authority and / or under the agreement, if any of the concerned government with such body or authority, would be a relevant consideration, whether it is expedient in public interest to direct such audit or not. Needless to state that if under the law applicable and / or the agreement, the concerned government is unable to take any action against the body or authority of which audit is sought to be directed in exercise of powers under Section 20, the audit cannot be said to be expedient in public interest; after all the audit is not be an empty exercise / formality.

The Court appears to have taken this view, to prevent what they apprehend to be a colourable exercise of power by the GNCTD, to fix tariffs. This is evidenced from the Court’s conclusion that according to Transmission Corporation of Andhra Pradesh Limited Vs. Sai Renewable Power Private Limited (2011) 11 SCC 34, the scheme of the electricity regulatory statutes is to grant supremacy to Regulatory Commissions on all matters regarding tariff fixation. Regulatory powers and functions once entrusted to Regulatory Commissions, after the Reform Act, cannot be sought to be exercised by the State Governments and State Boards. The Court records:

We highlight that the CAG refused to go into the question of unbundling of DVB, with respect whereto it had already submitted a report and which had been considered by PAC. Thus, the purpose of audit was / is not whether privatisation has served any purpose or whether the terms of transfer Scheme were in the interest of GNCTD. The sole purpose / purport of audit thus is tariff determination.

Thus, since neither the Legislature nor the GNCTD had the power to reduce tariffs charged by DISCOMs, an audit by the CAG under Section 20(3) would be an empty formality. Neither the Legislature nor the GNCTD would be able to take any action against DISCOMS, even if all the allegations in the litigation are proved to be true. Therefore, a CAG audit under Section 20 would not be in public interest (Para 48-59, 68-72).

There are two problems with this view. First, it was nobody’s case that the report of the CAG will be employed towards tariff fixation, and it is undoubted that tariff fixation is within the sole preserve of the Electricity Regulatory Commissions. Second, this view of the audit as of merely instrumental worth completely ignores the inherent value of an independent audit by the CAG. The logic of Article 149 itself was to advance Parliamentary control of executive and the public funds, by placing an independent Auditor in charge of scrutiny of accounts. It appears to have escaped the Court that so long as there is public money substantially funding an enterprise, independent scrutiny and accountability of such finances is inherently in public interest. If the logic of the Court held water, then no audit under Section 20 of the Act, of an authority functioning under a regulatory framework, could ever be found to be in public interest.

The Court then goes on to hold that the powers of a DERC, to approve costs incurred by a Licensee, and even direct audit, as evident from Clause 10 of the License terms, show that DISCOMs incurring expenditure above a certain amount were already required to obtain approval of the DERC. Thus, the CAG could not possibly arrive at a different conclusion (Para 74). The Court holds:

  1. Once by law a regulatory body has been constituted with powers inter alia have the accounts of the DISCOMs audited, there can be no other audit at the instance of the State Government. Moreover the said law as well as the Regulations made thereunder and the terms and conditions on which license has been granted by the DERC to the DISCOMs are found to contain and provide the same powers, if not wider, in the DERC in relation to the accounts of DISCOMs. We are unable to decipher anything, which DERC cannot and which CAG can unearth. DERC is neither found to be helpless nor dependent on the balance sheet filed by DISCOMs.”

This view of the Court is patently erroneous, as it is contrary to Section 20 itself. Section 20(1) states:

(1) Save as otherwise provided in section 19, where the audit of the accounts of any body or authority has not been entrusted to the Comptroller and Auditor-General by or under any law made by Parliament, he shall, if requested so to do by the President or the Governor of a State or the Administrator of a Union territory having a Legislative Assembly, as the case may be, undertake the audit of the accounts of such body or authority on such terms and conditions as may be agreed upon between him and the concerned Government and shall have, for the purposes of such audit, right of access to the books and accounts of that body or authority:

Provided that no such request shall be made except after consultation with the Comptroller and Auditor-General.

Section 20(3) provides:

“(3) The audit referred to in sub-section (1) or sub-section (2) shall not be entrusted to the Comptroller and Auditor-General except where the President or the Governor of a State or the Administrator of a Union territory having a Legislative Assembly, as the case may be, is satisfied that it is expedient so to do in the public interest and except after giving a reasonable opportunity to the concerned body or authority to make representations with regard to the proposal for such audit.”

The requirements of Section 20 are:

  1. the audit of an authority, if not entrusted to the CAG under any law of the Parliament
  2. may be entrusted to the CAG, on request of the President or Governor of a State/Administrator of a UT on the terms and conditions agreed upon between the CAG and the concerned Government
  3. after consultation with the CAG
  4. if the President/Governor/Administrator is satisfied that it is expedient so to do in the public interest
  5. after giving opportunity to represent against the proposal for audit

Clearly, while Section 20(1) is permissive of an audit not legislatively entrusted to the CAG to be entrusted to the CAG on certain conditions, it nowhere prevents an audit that is within the powers of an ordinary regulatory authority, from being entrusted to the CAG. Thus, the view of the Court that the regulatory authority’s powers to conduct audit cannot be divested in favour of the CAG finds no statutory basis.

Finally, the Court holds at para 78, the DERC’s lack of wherewithal to exercise its audit powers is held to be “no reason to fall back to the procedures and modalities prescribed in the pre-regulator regime.” Again, at para 80, the Court holds that the failure of the statutory body to perform its duties “cannot set in motion the regime prevalent prior to the constitution of the regulatory body.”

The Court here, in one fell swoop, dismisses the Constitutional office of the CAG altogether as a prior regime for audit, thus subordinating it to the regulatory regime made out by the electricity legislations. This leap of constitutional logic is needless to say, neither supported by the Constitutional text nor doctrine. The Constitution is the source of legislative (and consequently regulatory) powers. The Constitution also constitutes the office of the Comptroller and Auditor General, in Articles 148-151. Regulatory regimes and authorities born from an exercise of legislative powers, and sometimes delegated legislative powers, are therefore necessarily subordinate to powers and authorities constituted in the Constitution. Thus, regulatory audit mechanisms do not (and indeed cannot) replace or substitute the constitutional office of the CAG, and the two powers of audit must necessarily be found to co-exist. As judges are often wont to say, the stream cannot indeed rise higher than the source.

(Malavika is a Delhi-based advocate)

 

 

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Filed under Article 149 - CAG, Miscellaneous

Cora Chan’s Paper on Proportionality and Standards of Review

I’ve just finished reading a fascinating paper titled ‘Proportionality and Invariable Baseline Intensity of Review’, by Professor Cora Chan. The paper deals with judicial review standards of legislative action under the UK Human Rights Act, and addresses many of the issues that we have touched upon in our discussion of the educational disqualifications case. In particular, borrowing from Joseph Raz, Professor Chan introduces a helpful distinction between “first-order” and “second-order” justifications that the State might adduce in justifying action under challenge. First-order justifications pertain to the merits of the case. In the educational disqualifications case, for instance, first-order justifications involve the government producing evidence to show that uneducated people are unsuited to perform the tasks of governance. The Court can evaluate this evidence alongside contrary evidence offered by the other side, or even on its own terms, and decide if the State’s case is made out. Second-order justifications, on the other hand, involve the State not producing evidence of its claim, but arguing that the Court should refrain from evaluating evidence in the first place, and trust or defer to the State’s unsubstantiated/unproven evaluation. This could be because the State has greater institutional competence or greater legitimacy to balance the competing considerations and arrive at a conclusion. Again, in the educational restrictions case, second-order justifications involve the State arguing that the link between education and governance requires data the State is better placed to evaluate, and that therefore the Court should not substitute its own judgment; or, alternatively, that this is a question of policy that the State can legitimately act upon.

Professor Chan argues that second-order justifications do not have equal force in all cases; they strength of the justifications depend upon the nature of the right, the extent of the restriction, and so on; and indeed, the justifications must themselves be justified by evidence (e.g., the State’s prior record of success or failure). The nub of the paper, in my view, is in the following paragraph:

“The government proves its case solely with first-order reasons of institutional competence when it can adduce reasons and evidence to persuade the court on the merits that it is correct. It relies on second-order reasons of superior intelligence-gathering ability when it claims that there is useful information to support its case but it cannot reveal such information to the court. It relies on second-order claims of superior expertise when it claims that it has general expertise in deciding this kind of issue (eg national security questions) but is unable to persuade the court on the merits of the particular case in question. These second-order claims can only be validly established if the government body can adduce evidence, such as its institutional features, qualifications and past performance, to persuade the court that it indeed possesses the said general expertise or useful intelligence. Likewise, a second-order claim of superior democratic legitimacy in making a certain decision can only be established if the government can produce evidence, such as the degree of public participation in the decision-making process, to show that the decision was indeed democratically made. If a court grants second-order claims without probing their evidential basis, it would be granting mere assertions or presumptions about the government’s superior institutional competence – neither of which can count as cogent second-order reasons.”

In any case, through its extensive review of doctrinal developments in the common law world, the article shows that more and more, jurisdictions are beginning to adopt nuanced and sensitive standards of review of State action where important rights are at stake, and are increasingly abandoning the unsatisfactory, Wednesbury-oriented “rational review” standards. The article deals with questions regarding the burden of proof, the standard of proof, evaluation of evidence, and questions or proportionality, and shows that each question requires searching theoretical discussion.

It is to be hoped that sensitivity to the nuances involved in such cases eventually finds its way into our Article 14 jurisprudence as well.

 

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The Educational Disqualifications Case: A Round-Up

Today, the Supreme Court finished hearing arguments and reserved judgment in constitutional challenge to the Haryana Panchayati Raj Act, bringing to an end a protracted judicial process that began last year with the passage of a similar ordinance in Rajasthan. On this blog, we have been covering the developments since that time. Here is a curated list of blog posts on the subject, as we await judgment in this important civil rights case.

  1. The Constitutional Challenge to Rajasthan’s Panchayati Raj Ordinance, January 5, 2015 (arguing that educational and other disqualifications contravene the freedom to vote and to contest elections, which are protected by Article 19(1)(a)), available here
  2. The Rajasthan High Court’s (interim) Decision on the Panchayati Raj Elections, January 16, 2015 (arguing that the High Court’s focus on the number of people disenfranchised by the law ignores the character of an individual right), available here
  3. Guest Post – I: The Panchayati Raj Ordinance Case and Article 14: A Codicil, January 17, 2015 (Vasujith Ram argues that educational restrictions bear no nexus with the stated objectives of the 73rd and 74th Constitutional Amendments, designed to introduce local government), available here
  4. Guest Post – II: The History of Educational Qualifications for Democratic Participation in India, January 20, 2015 (Udit Bhatia discusses the history of educational qualifications on voting and contesting, from colonial times to present day), available here
  5. Guest Post: The (New) Rajasthan Educational Qualifications Ordinance: Lessons from Pakistan, August 3, 2015 (Ayushi Singhal argues that Article 21A casts an obligation upon the State to provide education, because of which it cannot penalise its citizens for not having one by disqualifying them form contesting; she also draws upon the experiences of the Supreme Court of Pakistan, which struck down a similar legislation), available here
  6. Haryana’s Educational Qualifications Ordinance Becomes an Act, September 9, 2015, available here
  7. Election Disqualifications and the Constituent Assembly Debates, October 1, 2015 (arguing that a close reading of the Constituent Assembly Debates prohibits the kinds of disqualifications imposed by the Rajasthan and Haryana laws), available here
  8. Paragraph 85 of Justice Chelameshwar’s Dissenting Opinion in the NJAC Case, October 19, 2015 (drawing out the conceptual distinction between age-based restrictions and substantive restrictions upon voting and contesting), available here
  9. Election Disqualifications, Representation Reinforcement, and the Case for a New Standard of Article 14 Review, October 22, 2015 (arguing that the structure of a democratic republic and the nature of judicial review requires a higher threshold under Article 14 for laws that tinker with the election process), available here

For the reasons that I’ve provided in the essays above, I believe that the Haryana Act violates Articles 14, 15(1) and 19(1)(a) of the Constitution, and is completely inconsistent with the structural foundations of republican democracy that form part of the basic structure of the Constitution. The basic purpose of elections is not to select the most effective, or most competent candidates based on some a priori screening process that excludes certain sections of the population altogether, but to give effect to the peoples’ choice. Consequently, a bar upon standing for political office is equally a restriction upon the right to vote. Furthermore, the restrictions – educational, property and debt-based – target the most vulnerable sections of the society (especially women), and ensure further exclusion and marginalisation from political power.

It remains to be seen whether the Court will look at things the same way. However, at the very least, it is to be hoped that it will seriously engage with the constitutional questions, and not merely give us the trite “the right to stand is only a statutory right” slogan. That is true, but as I (and others) have tried to show, the issue is far deeper and more complex than the simple absence of a right to stand in the constitutional text.

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Filed under Article 14, Equality, Local Government (Panchayati Raj)

Election Disqualifications, Representation-reinforcement, and the Case for a New Standard of Article 14 Review

On October 27, final arguments before the Supreme Court will resume in the Haryana Panchayati Raj Amendments case, dealing with the constitutionality of educational, property and debt disqualifications upon the right to run for elected office. On this blog, we have covered the issue extensively. In my last post on the subject, I will argue that election disqualification cases require a higher threshold of judicial review under Article 14 than the near-toothless “rationality” standard.

The core legal issue in the case turns upon Article 14, which guarantees equality before law and equal protection of laws to all individuals. Under the two-pronged Article 14 test, first established by the Supreme Court in Anwar Ali Sarkar, any legislative classification that allocates benefits and burdens on a differential basis, will be unconstitutional unless:

(a) there is intelligible differentia between the classes created

(b) the differentiation bears a rational nexus with a legitimate governmental objective

In the Panchayati Raj cases, there is no dispute that the classifications are intelligible. The dispute centres upon (b). The State argues that there is a “rational nexus” between education, and the performance of administrative functions by elected officials in local government. With the property (i.e., needing to have a functional toilet in your home) and debt disqualifications, the State’s claim is vaguer: it goes, roughly, that people without a functional toilet or with outstanding debt repayments cannot serve as model citizens, whose example can be followed by the rest of the electorate. I will leave this aside for the moment, and focus on educational disqualifications, since that seems to be the strongest argument in favour of the State.

Two further questions arise:

(a) Who bears burden of demonstrating the connection between education and the performance of public functions – the government or the challengers to the law? (Article 14 case law is divided on this point.)

(b) Even if there is some connection between the two, how close, or “tight” must that connection be, in order that the government may legitimately strip citizens of their right to contest elections? This, in turn, has two aspects:

(b1) How strong must the evidence be that shows a correlation? Is a mere statistical correlation sufficient, or is something more required?

(b2) Must the law in question be framed so as to achieve its goal while curtailing the rights of citizens to the minimal extent necessary? In technical terms, is the law “narrowly tailored”? Or, to put it in other terms yet, is there another avenues open to the government to achieve the same goal without restricting the rights at issue?

Under the United States Equal Protection clause, these issues are addressed under a three-pronged tiered structure of judicial scrutiny. The lowest tier is “rationality review”, commonly applied to economic and tax legislation, which matches our basic Article 14 test. Then there is “intermediate scrutiny“, which applies to sex discrimination and commercial speech cases, inter alia. This is akin to a proportionality test, where the State is required to show a substantial fit between the law and some important governmental objective, but need not show an exact fit. The highest standard is “strict scrutiny”, which applies, for instance, to affirmative action. Here, the State must show that the law is “narrowly tailored” to achieve a “compelling State interest”. The varying levels of scrutiny are meant to track the importance of the constitutional rights at stake.

At least in the context of discrimination cases, the Indian judiciary has not yet seen fit to adopt a tiered model under Article 14. Part of the reason for this is that the structure of our Constitution is different. Articles 15 and 16 – for which there is no equivalent under the American Constitution – expressly prohibit discrimination on grounds of caste, race, sex etc. For this reason, discrimination jurisprudence need not be drawn out from an omnibus Article 14, but finds a ready home in Articles 15 and 16.

Nevertheless, in the 1970s, the Indian Supreme Court realised that a rationality review standard was inadequate. This is because it is far too deferential to the State. A “rational connection” between a classification and a purpose is an extremely low threshold; in fact, in certain cases, it will be no threshold at all, as any classification will have a rational connection with some purpose. Unless the State is unwilling to state that purpose in Court (for political or other reasons), or if the purpose is itself unconstitutional, Article 14 provides little more than a parchment barrier against State action.

The Supreme Court’s response, however, was unfortunate. Instead of developing a tiered approach to Article 14, on the basis of the interests involved, it created a new “arbitrariness” test, holding that “equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law.” But if rationality review was too deferential to the State, the “arbitrariness” test presents, in a sense, the opposite difficulty: it vests unconstrained discretion in the hands of judges, with no guidelines for determining what must happen for a legislation to be considered “arbitrary”. A good example is Nargesh Mirza’s Case, where the Supreme Court held that terminating employment upon first pregnancy was arbitrary, but terminating it upon the third pregnancy was not!

The arbitrariness test of Article 14, therefore, is intellectually indefensible. Are we then stuck with the rational review standard, which – it would seem – would let the government clean off the hook in cases that are as important as the Panchayati Raj case? I would suggest not – and further, that in cases relating to election disqualifications, the Court must hold the State to a higher threshold under Article 14. Not only must the evidentiary burden of justifying its claims fall upon the State, but at the very least, the State must demonstrate a substantial and proportionate – if not strict – relationship between the classification and the goal. My argument rests upon the nature and justification of judicial review over the action of elected representatives in a democracy.

Consider the basic question first: under normal Article 14 cases, why do we require only a low threshold of “rationality” between the classification and the purpose? There are two reasons for this. One, of course, is that the legislature has greater expertise to frame policy than courts do. As the Court pointed out in Federation of Hotels and Restaurants Association of India, in the context of economic legislation, “having regard to the wide variety of diverse economic criteria that go into the formulation of a fiscal-policy legislature enjoys a wide latitude in the matter of selection of persons, subject-matter, events, etc., for taxation.”

But the other – and even more important – is that the legislature has the legitimacy to do so because it is elected by the people, and the Courts aren’t. Classically, we think of courts as counter-majoritarian institutions – their job is to ensure the protection of individual rights that might be jeopardised in a majoritarian system of elections/representative democracy. In other words, legislative policy is presumptively legitimate, and therefore entitled to judicial deference, because it is the product of a body that can trace its authority to the people (through elections). Judicial review itself gains its legitimacy – and by extension, its limits – through its function as a counterweight against the possible abuses of this process.

But this leads to the following corollary: if the legislative policy tries to change the ground rules of the electoral process itself, then it loses the presumption that operates in its favour. This is because every law that restricts the franchise, or restricts who can stand, impacts the democratic legitimacy of the body that will be formed as a result of those restrictive elections. Consequently, the primary basis of the low Article 14 standard of rational review is undermined when the law itself takes away the foundation of why the low standard is justified in the first place. Therefore, for laws that affect the political process, such as restrictions on voting and standing, should be subjected to a higher standard of review. The Court should place an affirmative burden upon the legislature to provide evidence that shows that its restrictions are necessary to achieve the goal that it seeks to achieve, and are narrowly tailored. What the Court is seeking to protect here is not the value choices that are the outcomes of the legislative process, but the integrity of the process itself, which creates the legitimacy of the values that emerge.

In the United States, this goes by the name of “representation reinforcement”: the Courts’ task is to zealously safeguard the process through which representative democracy gains its legitimacy (i.e., through elections). Its origin is in the famous Footnote Four in the Carolene Products Case, which while maintaining that legitimacy constraints only allowed the Court to conduct a rationality review in economic classification cases, an exception was made – inter alia – for laws that would distort the political process. The reason for this – to repeat – lies no in the constitutional text, but in the underlying structure of representative democracy set up by the Constitution. In the words of constitutional scholar John Hart Ely, what the Court needs to look at in employing a higher standard of scrutiny is not the abstract importance of the values at stake, but “whether the opportunity to participate either in the political processes by which values are appropriately identified and accommodated, or in the accommodation that those processes have reached, has been unduly constricted.

The representation-reinforcing role of the Court was taken to its apotheosis by Chief Justice Earl Warren of the United States Supreme Court in the 1960s. Writing the judgment of the Court in Kramer vs Union Free School DistrictJustice Warren provided the most lucid justification of the argument being made here:

“When we are reviewing statutes which deny some residents the right to vote, the general presumption of constitutionality afforded state statutes and the traditional approval given state classifications if the Court can conceive of a “rational basis” for the distinctions made are not applicable… the presumption of constitutionality and the approval given “rational” classifications in other types of enactments are based on an assumption that the institutions of state government are structured so as to represent fairly all the people. However, when the challenge to the statute is in effect a challenge of this basic assumption, the assumption can no longer serve as the basis for presuming constitutionality.”

Closer home, in Subhash Chandra, the Indian Supreme Court cited John Hart Ely in a paragraph that is of some importance:

Courts must guard against that protective discrimination clauses are not used as pretexts for an invidious purpose. The political compulsions and extraneous vote considerations in the functioning of the legislature are mentioned by a prominent political science scholar, John Hart Ely in his landmark book, Democracy and Distrust. He says that “special scrutiny, in particular its demand for an essentially perfect fit, turns out to be a way of ‘flushing out’ unconstitutional motivation.”… Protective discrimination may be used to curtail the extremely hard won civil and political rights granted by the Constitution. We have the backdrop of freedom struggle to engage with in this regard. Rights of the accused as part of the fair trial rights, equality rights, right to liberty and personal autonomy and other such rights are to be fiercely protected against any blind policy onslaught of the times. The government must have a overwhelming compelling interest to justify limitations on the freedom of association, free exercise of religion, free speech, right to vote, right to travel et al.”

Notice something curious here: the freedom of association, the free exercise of religion, free speech and the right to travel are all fundamental rights that are part of the constitutional text. (19(1)(c), 25, 19(1)(a), 19(1)(d)). In the middle of listing out these rights, the Court also includes “the right to vote”, which – as we have heard many times, often from the Court itself – is a “mere statutory right”. Why is this? The answer, I suggest, is that although the right to vote is not part of Part III of the Constitution, safeguarding its effective exercise is a key aspect of the judicial role in deepening and preserving the democratic structure set up by the Constitution.

Let us now come back to Article 14, and the list of questions I outlined at the beginning of the essay. A higher threshold of scrutiny would require that:

(a) The government bears the burden of demonstrating the connection between the law and the purpose it claims to fulfill. The government must provide tangible evidence that absence of education jeopardises and undermines the ability of an elected representative to perform his functions. The Court cannot simply take the government’s claim at face value, on the ground that it is possesses the competence and expertise to make such judgments.

(b1) The evidence must be strong, going beyond mere correlation.

(b2) Most importantly, the State must show that its proposed restriction is narrowly tailored to achieving the goal, or at the very least, is a proportionate way of achieving the goal. In this context, various other provisions of the Panchayati Raj Act – such as those providing for extensive assistance to elected representatives – will become important. The government must show that a complete prohibition on standing is required to preserve the functioning of the administration; other solutions – such as the one just mentioned above (or, for that matter, a sponsored crash course for successful candidates after their election) will not serve the purpose equally well. This will also ensure that there is no repeat of situations such as that in Javed vs State of Haryana, where the State’s justification for limiting the right to stand to persons with less than two children was the completely unrelated purpose of encouraging the State’s family planning program!

By imposing these burdens upon the State, the Court can ensure that a move that potentially deprives representative democracy of its legitimacy by screening out candidates before the people even have a chance to exercise their choices at the ballot box, is being taken only under a situation of strict and urgent necessity. Notice that the argument here is not that all restrictions upon participation in the electoral process are automatically unconstitutional. It is that the government must be held to a very high standard of justification before such restrictions can be allowed to pass. This requires a tiered model of Article 14 review, and because of the centrality of elections to the democratic process, I suggest it is one that the Court should adopt.

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Filed under Article 14, Equality, Local Government (Panchayati Raj)

Paragraph 85 of Justice Chelameshwar’s Dissenting Opinion in the NJAC Case

While re-reading Justice Chelameshwar’s dissenting opinion in the NJAC Judgment, I just came across – what seems to me to be – a rather significant observation. In paragraph 85, Justice Chelameshwar writes:

“Article 326 prescribes that election to Lok Sabha and the Legislative Assemblies shall be on the basis of adult suffrage. One of the components is that the prescription of the minimum age limit of 18 years. Undoubtedly, the right created under Article 326 in favour of citizens of India to participate in the election process of the Lok Sabha and the Legislative Assemblies is an integral part (for the sake of convenience, I call it an ELEMENT) of the basic feature i.e. democracy. However, for some valid reasons, if the Parliament were to amend Article 326 fixing a higher minimum age limit, it is doubtful whether such an amendment would be abrogative of the basic feature of democracy thereby resulting in the destruction of the basic structure of the Constitution. It is worthwhile remembering that the minimum age of 18 years occurring under Article 326 as on today came up by way of the Constitution (Sixty-first Amendment) Act, 1988. Prior to the amendment, the minimum age limit was 21 years.”

The observation is significant because Justice Chelameshwar is one of the two judges hearing the constitutional challenge to the Haryana Panchayati Raj Act, which mandates educational, property and debt-based restrictions upon running for Panchayat office. In this paragraph, there are two important points. The first is the admission that the right to participation in the electoral process (which would include both voting and standing for election) is part of the basic structure, despite not being an express “fundamental right” under Part III (an omission which has done significant damage to civil rights over the years). This would mean that restrictions upon participation in the electoral process must can only be justified through very strong reasons, and in a way that the core of the basic feature – democracy – is not damaged (using the “width and identity” test propouned in Nagaraj’s Case for deciding a basic structure violation).

Secondly – and even more significantly – I suggest that the restriction which Justice Chelameshwar deems to be acceptable, throws significant light upon that which is not acceptable. The restriction he talks about is an age barrier – whether 18 or 21. To sharpen the issue, let’s take a hypothetical: a mandatory minimum age for the consumption of alcohol, which is found in all jurisdictions (or an age of consent). Let us say that we are agreed that there has to be some minimum age barrier for alcohol consumption; the principle behind it is that the possible deleterious consequences of alcohol consumption requires needs to attain a certain degree of physical and mental maturity before one is allowed to consume alcohol. We may disagree over what that minimum age is – perhaps you may think that it should be 16, and I may think that it should be 18. But we do agree that there’s no bright line test for physical and mental maturity. Any line that we set, whether 16 or 18, will be underdetermined. It will end up excluding some people who would be physically and mentally mature enough, and including some people who aren’t. So whether the government ends up making it 16 or 18, we can’t really claim that it is an irrational classification, because the very nature of the process requires a there to be a rough estimate (age), which will not map exactly upon the rationale for the classification (maturity) – but it is the best that we have.

If we code this in Article 14 language, the intelligible differentia is age (our bright line); the governmental purpose is protecting people not in a position to make responsible choices from self-harm (legitimate, as everyone would agree); the rational nexus is a rough link between age and maturity (we agree that there is a rough connection, and also that it is impossible to be more precise).

But now compare this with a general restriction upon the sale of alcohol, as passed by some States, which also has an exemption for 5-Star establishments.  This is an entirely different case. Here the law implies that poorer people, who do not frequent 5-Star establishments, have less of an ability to control themselves on consumption of alcohol. In other words, the basic logic is the same – government acts to protect people who cannot make responsible choices from self-harm – but extends its classification to equate socio-economic status with perpetual minority, or the inability to make a responsible choice (a Kerala High Court decision upholding a liquor ban on these lines was upheld by the High Court, and has presently been stayed on appeal).

Let us now come back to voting and participating in elections. An age bar is exactly akin to an age bar on alcohol consumption. The basic logic is the same: the intelligible differentia is the bright line of age. The purpose is to maintain the integrity of the electoral process, since only people who have attained a certain degree of mental maturity are expected to make a responsible choice about who will govern them, or to actually carry on governance (this also explains why unsoundness of mind is another disqualification). The rational nexus is that age bears a rough relationship with maturity, and that greater precision is impossible.

Educational, property and debt disqualifications, on the other hand, are exactly like a liquor ban that exempts 5-Star establishment: it places a group of people in a position of perpetual minority, deeming their class or socio-economic status to disqualify them from acting as responsible participants in the process of governance (notice that the restriction operates upon voters (by circumscribing their range of choices) as well as candidates).

In stating that participation in elections is part of the basic structure, and that reasonable regulations can be imposed upon it, such as age restrictions, Justice Chelameshwar is entirely correct. The basis of the regulation is not in dispute, and the impossibility of an exact fit is not in dispute. Neither of those two conditions are met in the Panchayati Raj Act, and more importantly, if participation in elections is part of the basic structure, then the Government bears the burden of showing that essentially, the Panchayati Raj Act is akin to an age restriction. Consequently, Justice Chelameshwar should now extend his own logic, and strike it down.

(In the next – and my last post on the subject – I will argue that in any event, the Panchayati Raj Act should be held to a higher standard of scrutiny under Article 14 than mere “rational review”, and that for independent reasons, the affirmative burden should be on the government)

 

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The NJAC Judgment and its Discontents

In a landmark judgment today, the Supreme Court struck down the 99th Constitutional Amendment for being ultra vires the basic structure of the Constitution. The 99th Amendment was intended to replace the “collegium” system, in which the three senior-most judges of the Supreme Court had the final say on judicial appointments, with a National Judicial Appointments Commission (“NJAC”) consisting of the law minister, two “eminent persons”, and the three aforementioned judges. In striking down the NJAC, the Court also held that the collegium system of appointments had revived, and was operative. Justices Khehar, Lokur, Goel and Joseph wrote separate opinions for the majority, while Justice Chelameshwar dissented.

In an extended debate earlier on this blog, I had argued that Articles 124A and 124C, introduced by the Amendment, ought to be struck down. I, therefore, agree with the conclusion of the majority. However, I would also submit – with respect – that the four majority opinions are flawed in some serious respects, and lay down propositions of law which are not adequately defended or justified. In this essay, I will give a brief account of the majority holdings, and their discontents.

Background

Let us briefly go over the background to this case. Under the old Article 124, the President was to appoint judges in “consultation” with the Chief Justice, and other such judges that he might see fit to consult. In The Second Judges Case, a nine-judge bench of the Supreme Court held that the word “consultation” was to be read to mean “concurrence”, and as a result, established the collegium system, which upgraded the judiciary’s role from a formally consultative one, to one in which the three senior-most judges of the Supreme Court had the last word (“primacy”) in appointments. The 99th Amendment was Parliament’s attempt to overcome the holding of the Second Judges Case by replacing Article 124 with a new set of constitutional provisions, which established the NJAC. Article 124A detailed the composition of the NJAC (see above). Article 124C delegated the details of the selection process to parliamentary legislation, in pursuance of which the legislature framed the National Judicial Appointments Commission Act. Both the 99th Amendment and the Act were ultimately challenged before a Constitution Bench of the Supreme Court.

Issues

As I had argued in my summary of the NJAC debate, the Constitution Bench would be required to answer the following questions:

124A: In light of the fact that the Second Judges Case is binding upon the present bench,

(a) Did The Second Judges Case hold that judicial independence is affected by the nature or manner of judicial appointments?

(b) If yes, then did the Second Judges Case hold that judicial primacy in appointments is part of the basic structure, because it preserves judicial independence?

(c) If yes, then did the Second Judges Case also hold that judicial primacy in appointments is a necessary requirement for the protection of judicial independence?

124C: In light of the fact that under the Constitutional scheme, appointment of judges is a constituent power contained in the Constitution, is it consistent with the separation of powers to move it from the Constitution to the domain of parliamentary legislation? Can the power of the parliament be relatively aggrandised at the expense of the executive and judiciary?

None of the judgments (majority or minority) dealt with Article 124C and the separation of powers. On Article 124A, the four majority opinions, with varying degrees of emphasis and analysis, answered “yes” to each of the three questions.

Referral and Merits

Another preliminary remark, for the sake of clarity. During the course of arguments, the Union requested the bench to refer the matter to an eleven judge bench, in order to reconsider the correctness of The Second Judges Case (in my view, this would have been the correct thing to do). The Court, while declining immediate referral, indicated that it would fully deal with the question while handing down its final judgment. Consequently, the majority opinions of Justices Khehar, Lokur and Goel are divided into two parts: the rejection of the referral, and the finding of unconstitutionality (there is also a third part dealing with the question of whether Justice Khehar ought to have recused himself, but we can ignore that for now). This is somewhat unfortunate, because in the judgments, the considerations that weighed with the Court in declining referral tend to become blurred with the arguments on unconstitutionality, leading to a significant amount of confusion.

Let me explain. In rejecting referral, the majority is, in effect, stating that there are no good reasons to review The Second Judges Case. In doing so, the majority attempts to show that The Second Judges case was correctly decided insofar as, the collegium is consistent with the scheme of the Constitution. Now, whatever you think about this conclusion, it doesn’t even come close to answering the question of the 99th Amendment’s constitutionality. This is because the answer to that question depends upon whether the collegium arose only out of the Court’s textual interpretation of the word “consultation” (in which case, the parliament is entitled to amend Article 124, get rid of “consultation”, and simply remove the basis of The Second Judges Case), or whether the Court found it to be part of the basic structure (in which case, obviously, Parliament couldn’t amend it away). This was substantially in issue between the parties, and the judgments of Justices Lokur and Goel record it (while failing to substantially address the dispute).

In other words, the constitutionality of the collegium does not imply the unconstitutionality of the 99th Amendment. Unfortunately, however, the majority opinions, at various points, seem to be taking the latter as the natural consequence of the former. This, as I will attempt to show, damages the overall structure of the holding.

Justice Khehar’s Majority Opinion

Justice Khehar’s leading opinion (clocking in at 440 pages) provides, broadly, five reasons why the Second Judges Case was correctly decided. First, he argues that judicial primacy in appointments was repeatedly accepted by the Court since the case of Shamsher Singh. The First Judges Case, which held that the veto lay with the Executive, and which was overruled by The Second Judges Case, was thus a lone aberration in a continuous line of precedent (paragraph 60, referral opinion). Secondly, he argues that the collegium does not violate the constitutional scheme by effacing the participation of the Executive, since the President (acting on the aid and advice of the council of ministers) can still object to recommended names, provide his reasons, and so on: only the last word, in case of a stalemate, is with the collegium (paragraph 68, referral opinion). Thirdly, in the Constituent Assembly Debates, judicial appointments were specifically discussed in the context of judicial independence, making it clear that the constitutional scheme regards appointments as an integral part of judicial independence (paragraph 76). Fourthly, in the Constituent Assembly Debates, while the word “consultation” was being discussed, Dr. Ambedkar clearly stated that it was intended to “curtail the will of the Executive” (paragraph 78). Consequently, if the idea was to “shield” the appointments process from the executive, the Second Judges Case was correct in giving “consultation” a meaning that going beyond its dictionary equivalent (paragraph 79). At the same time, Dr Ambedkar was hesitant about giving a complete veto to one individual – the Chief Justice. The Collegium achieves the desired balance between the two positions, by placing primacy in the hands of a plurality of judges. And fifthly, consistent practice since Independence allowed the Chief Justice the final say in judicial appointments (paragraph 86).

While I have no quarrel with the proposition that judicial appointments are part of judicial independence, I find Justice Khehar’s fourth point particularly troubling. Justice Khehar moves glibly between “curtail the will of the Executive” and “shield the appointments process from the Executive”. The two, however, are not equivalent. As Justice Chelameshwar argues in dissent, the history of the Constituent Assembly Debates suggests that what the framers were worried about was preventing Executive dominance in the appointments process. This appears a more persuasive reading of the “curtailing the will of the Executive”, one that does not necessitate judicial primacy as a corollary.

Be that as it may, it is at this stage that Justice Khehar makes his major move. In paragraph 149 of his merits opinion, he says:

“... the word consultation… have to be read as assigning primacy to the opinion expressed by the Chief Justice of India (based on a decision, arrived at by a collegium of Judges), as has been concluded in the “Reference Order”. In the Second and Third Judges cases, the above provisions were interpreted by this Court, as they existed in their original format, i.e., in the manner in which the provisions were adopted by the Constituent Assembly, on 26.11.1949 (-which took effect on 26.01.1950). Thus viewed, we reiterate, that in the matter of appointment of Judges to the higher judiciary, and also, in the matter of transfer of Chief Justices and Judges from one High Court to any other High Court, under Articles 124, 217 and 222, primacy conferred on the Chief Justice of India and his collegium of Judges, is liable to be accepted as an integral constituent of the above provisions (as originally enacted). Therefore, when a question with reference to the selection and appointment (as also, transfer) of Judges to the higher judiciary is raised, alleging that the “independence of the judiciary” as a “basic feature/structure” of the Constitution has been violated, it would have to be ascertained whether the primacy of the judiciary exercised through the Chief Justice of India (based on a collective wisdom of a collegium of Judges), had been breached…

In one word – the word “therefore” – Justice Khehar simply assumes away the core controversy! In the first part of the paragraph, he correctly notes that the Second and Third Judges Cases held that the word “consultation” meant primacy of the Chief Justice’s opinion. But if that was all that those cases said, then surely it is open to the Parliament to amend the Constitution, remove the word “consultation”, and take away the basis of those judgments – which is what it did. It must additionally and independently be shown that the Second Judges Case held that judicial primacy was part of the basic structure. As Vishwajith and Suhrith have argued on this blog, there is enough evidence in The Second Judges Case to militate against this conclusion (I have argued to the contrary). In either event, Justice Khehar’s assumption that everything after the “therefore” flows from everything before it, is misplaced: and this is the fulcrum of his decision.

After holding that judicial primacy in appointments is part of the basic structure, the rest follows more or less automatically. Judicial primacy in the NJAC is lost by the veto accorded to the “eminent members”; consequently, Article 124A and the Act must be held unconstitutional (paragraph 239). Justice Khehar also holds that the term “eminent persons” is unconscionably vague, and strikes that down as well (paragraph 182). Incidentally, he also states – while striking down the NJAC Act – that ordinary law can be challenged on the grounds of the basic structure (paragraph 220).

The Other Majority Opinions

The opinions of Justices Lokur, Joseph and Goel largely follow this structure, with a few variations. Justice Lokur points out additionally, for instance, that the NJAC not only diminishes the role of the CJI, but also that of the President, by converting his role from participatory to that of rubber-stamping the NJAC’s recommendations (paragraph 486), and that the presence of the Law Minister may skew the process (paragraph 516). Justices Joseph (page 899) and Goel (paragraph 18) hold – in clearer terms than Justice Khehar – that The Second Judges Case held that judicial primacy is part of the basic structure – but like him, they provide no analysis to buttress key claim. The amount of time all judges spend on showing that judicial primacy has been a long accepted constitutional convention makes me feel, once again, that mixing up the questions of referral and merits has led to a deeply confused judgment. Even if judicial primacy in appointments was a long-established constitutional convention, Parliament is entitled to change that through an Amendment. To invalidate the Amendment, you must show that judicial primacy is part of the basic structure. That claim is asserted. It is not demonstrated, either through through the text and structure of the Constitution, or through a close reading of the Second Judges Case.

Unfortunately, in what is otherwise a powerful dissent, Justice Chelameshwar also seems to miss this point: he too does not analyse the Second Judges Case for its holding. This is, of course, as important for him as it is for the majority – because if The Second Judges Case did hold that judicial primacy was part of the basic structure, Justice Chelameshwar, as part of a five-judge bench, would be bound by it.

Conclusion

What then are the key holdings of the majority? I would summarise them as follows:

(1) Judicial appointments, being an integral facet of judicial independence, are part of the basic structure.

(2) Judicial primacy in judicial appointments (with executive participation) is also part of the basic structure.

(3) The collegium allows for Executive participation while maintaining judicial primacy through the Collegium.

(4) The NJAC violates the basic structure by doing away with judicial primacy through its veto provisions.

What does this mean for the future? Parliament can, if it wants, bring in a new NJAC. But, in accordance with this judgment, judges will have to have the last word as part of that Commission – perhaps through an express veto power.

For the reasons I have provided above, I believe that the central claim of the majority, upon which all else turns, is unsubstantiated; and going forward, it constricts possibilities for a new commission by requiring judicial primacy in appointments. Perhaps this is what the constitutional scheme requires, but if so, it needed a strong defence. The majority has failed to provide that.

Many may feel that the Judiciary – and constitutional democracy in India – has dodged a bullet, and nipped the spectre of fascism in the bud. There might be some truth to that claim. But for those who feel that the collegium has been built upon foundations of naked power, and maintained through rhetoric, smoke and mirrors, this judgment will offer cold comfort. There might be some truth to that as well.

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Harvard Workshop on Animals in Comparative Constitutional Law

Harvard Law School is seeking submissions for a workshop on Animals in Comparative Constitutional Law to be held on Thursday, February 18, 2016.

We invite scholarly submissions on any theme relevant to this topic, including pieces addressing constitutional theory, institutional design, and case studies grounded in the constitutional experiences of particular jurisdictions or regions.  We are also interested in topics that involve issues of religious law, such as the relevance of the halal and kosher debates to constitutional developments regarding animals (e.g. in Europe), and the religious dimensions of the constitutional protections for animals (e.g. in India).

Applicants should submit an abstract (between 500 and 1,000 words) to cgreen@law.harvard.edu, along with a C.V., by October 15, 2015.  All submissions must be in English.  Decisions on workshop participation will be communicated to applicants by October 29, 2015.

All selected participants will be expected to produce a working draft of their paper (approximately 10,000 words) by December 15, 2015, and to participate in person at our workshop, to be held at Harvard Law School, on Thursday, February 18, 2016.

Harvard Law School will cover the travel costs and local accommodations of participants.  The workshop is sponsored by the Animal Law & Policy Program and the Islamic Legal Studies Program.

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