Coronavirus and the Constitution – XXXV: Dialogic Judicial Review in the Supreme Court

On the 27th of April, a three-judge bench of the Supreme Court (Justices Chandrachud, Rao, and Bhat) passed a brief order in the suo motu case, In Re: Distribution of Essential Supplies and Services During Pandemic. Recall that the previous set of hearings in the case had led to a degree of confusion over whether the ongoing litigation before various state High Courts was to cease, in view of the fact that the Supreme Court had now taken cognisance of a range of issues connected to the pandemic. In its 27th April order, however, the Court clarified that “the High Courts have a robust understanding of ground realities and are grappling with the practical issues and problems which have arisen in their jurisdictions as a result of the outbreak of the pandemic... hence, there is no reason or justification to interdict the exercise of the jurisdiction of the High Courts.” The Court went on to – correctly – point out that there may nonetheless arise “certain national issues or issues of a systemic nature which have their origin beyond the boundaries of a particular State” – and that it would be with respect to those issues that the Court would assume Article 32 jurisdiction.

A future post will discuss some of the High Court orders during the course of the last two weeks. In this post, let us consider the Supreme Court’s 27th April order. Importantly, in paragraph 6, the Court went on to outline the scope of its enquiry. The Court’s approach, I would suggest, ought to be best understood within the framework of dialogic judicial review, which we have discussed previously on this blog, in relation to a few High Court orders during the first wave of the pandemic. Dialogic review enables us to escape the false binary of the Court “managing the pandemic” on the one hand, and being a “mute spectator” on the other. In essence, under dialogic review, “the judicial forum is a site of dialogue between courts, citizens, and the government; often, the very process of the government being called upon to explain its decisions before the courts reveals important shortcomings in the decision-making process (as well as in the substantive nature of the decision itself), which can then be corrected.”

From this perspective, the 27th April order addressed four issues: the supply of oxygen, medical infrastructure, supply of medical drugs, and vaccination. The first and the fourth are particularly important for our purposes here. With respect to oxygen, recall that a number of issues arose – and continue to arise – in the High Courts, as medical oxygen is supplied to the states, from a common pool controlled by the centre. the Court required the government, inter alia, to provide information on projected demand, the steps taken to meet that demand, monitoring of supply, and – crucially – the basis of allocation from the central pool to the states, as well as the methodology used for communication of state needs to the centre, to ensure a match between demand and supply.

The Court did something similar with respect to vaccines. It noted that after May 1, everyone above the age of 18 would be eligible to be vaccinated. Consequently, it required the the union government to provide specific information about projected requirement, projected steps taken to meet it, the basis of allocation between states, and – importantly – “the basis and rationale which has been adopted by the Union government in regard to the pricing of vaccines. The government shall explain the rationale for differential pricing in regard to vaccines sourced by the Union government on one hand and the states on the other hand when both sources lead to the distribution of vaccines to citizens.

On the issues of both oxygen availability and vaccines, the Supreme Court’s order is an excellent example of dialogic review in action. Essentially, the Court asked the union government to explain the basis of its actions with respect to allocation of oxygen, and allocation and (differential) pricing of vaccine. This performs two functions: first, that of transparency. It ensures that vital decisions do not remain opaque but, through their airing in Court, are subjected to public dialogue and scrutiny (note that because of the non-functioning of Parliament, there is a heavier-than-normal burden upon the shoulders of the Court to ensure transparency). Secondly, once the bases of the decisions are made available, the Court is in a position to subject them to judicial scrutiny, under established constitutional law standards, while remaining cognisant of the fact that due deference is to be accorded to the executive in managing a public health crisis. For example, even under a public health crisis, the executive cannot act arbitrarily, must have a reasonable basis for its actions, and its actions must still remain proportionate to the scale of the crisis. The Supreme Court’s 27th April order marks an important first step towards starting that process of accountability.

These are, of course, early days. One must also be aware of the limits of judicial action, in terms of impact on the ground, during a crisis. However, with those caveats in mind, the 27th April order has asked all the right questions. It remains to be seen what the answers will be, and where we go from here.

Evasion, Hypocrisy, and Duplicity: The Legacy of Chief Justice Bobde

At midnight today, Sharad Bobde will no longer be the Chief Justice of India.

As on previous occasions (see here and here), this post will assess the legacy of the outgoing Chief Justice. In the case of Chief Justice Bobde, this might seem a somewhat difficult task. What can one even say about a tenure that lasted seventeen months, through a particularly stormy time, and yielded precisely zero judgments of constitutional import, other than a late set of guidelines on the appointment of ad-hoc judges? But, as we shall see, the absence of constitutional judgments does not mean that CJI Bobde did not enjoy a hugely consequential tenure. Through a refusal to hear cases (judicial evasion), shoddily reasoned “interim orders” (hypocrisy), and the arbitrary allocation of cases under the “master of the roster” powers (duplicity), CJI Bobde’s tenure saw the further acceleration of trends begun under his predecessors: that of the Supreme Court, in effect, turning into an Executive Court (see here). The difference between CJI Bobde and his predecessors was that under the latter, there were still occasions when the Supreme Court continued to act like a “court”, as we understand it. Under CJI Bobde, there was very little evidence of that.

I preface this post with three caveats. First, many of the interim orders that I will discuss were per curiam, i.e., authored and signed by all the judges on the bench. While CJI Bobde, by virtue of being the Chief Justice, headed those benches, in formal terms, he was not the sole author of those orders: the “bench”, as a whole, was. The reason why these orders are discussed as CJI Bobde’s legacy is that, as any observer knows, most puisne judges rarely disagree with the senior judge on the bench. Disagreement is even rarer when the senior judge is the Chief Justice. Thus, while this post is not meant to absolve puisne judges of their responsibility in being co-signatories to the orders that it will critique, its central thesis – that they constitute the legacy of CJI Bobde – remains intact.

Secondly, it may be argued that conducting constitutional hearings with multiple judges and a battery of lawyers was no longer feasible once the pandemic began, and the lockdown was imposed. To this, two answers may be made. First, the Supreme Court was functioning normally during the first five months of CJI Bobde’s tenure, but the only significant constitutional hearings were repeated attempts to send the Sabarimala case to a bench of nine judges, and the referral hearing in Article 370. More importantly, however, during the pandemic, constitutional courts all over the world made arrangements to hear significant cases online. And a five-judge bench of the Supreme Court itself heard the Maratha Reservation Case earlier this year. Consequently, the pandemic itself was no reason for the Court not to schedule – and hear – matters of constitutional import.

Thirdly, in view of various remarks that fell from the Supreme Court today, it feels important to reiterate that critique is neither personal, nor “destructive” of the institution. Supreme Court judges wield tremendous power, and Chief Justices even more so. This blog has always taken the view that the function of words is to call power to account, and – when necessary – to do so adversarially. This post continues in that spirit.

Two Days in Spring

CJI Bobde’s tenure is perhaps best summed up by what transpired in Courtroom No. 1 of the Supreme Court on two days. On 26th March 2021, a three-judge bench comprising of CJI Bobde and Justices Bopanna and Ramasubramanian passed an interim order refusing to stay the electoral bonds scheme, which allows for limitless, anonymous corporate donations to political parties. The electoral bonds scheme had been notified at the beginning of 2018, and been immediately challenged thereafter. At the time, Dipak Misra J. was Chief Justice. He did not list it for substantive hearing. Then came Chief Justice Gogoi, who initially followed suit, then listed the matter on an urgent application just before the 2019 general election, and hypocritically claimed that there was not enough time to hear such an important case. This judicial hypocrisy was raised to the level of fine art during the tenure of CJI Bobde. He also did not hear the matter throughout his tenure, before listing an urgent interim application just before the (still-ongoing) state elections, and granting it one day of hearing. Going further than CJI Gogoi, CJI Bobde wrote in his order that the fact that the “bonds had been released without impediment in 2018, 2019, and 2020” was one of the grounds why there was no urgent necessity for a stay. The Supreme Court’s own evasion of the case, thus, became a ground for it to deny relief to the petitioners.

Not only that, however, CJI Bobde’s order went on to grant a presumptive seal of approval to the electoral bonds scheme, based on a series of logical leaps and absurd presumptions (summed up here). A starring role was played by the the Court’s observation that electoral bonds were not, actually, anonymous. Anyone who wanted to know who was donating to a political party could simply look up companies’ financial statements, political parties’ statements of accounts, and then engage in a “match the following” exercise. However, as commentators pointed out, this was simply false, as a matter of law and fact: thanks to various legal amendments that accompanied the enactment of the electoral bonds scheme, a “match the following” exercise was not possible. That apart, even if it was, this was an astounding argument coming from a Court that has, in the past, piously commented on the “right to know” in the context of elections: that citizens, in order to find out who funds political parties, would have to access a political party’s statement of account, look at the numbers, access (all?) companies’ annual statements, look at the numbers, and see if anything matched. That CJI Bobde believed this was a legitimate burden to foist upon the voting public was extremely revealing. Not only was the order shoddily reasoned, but even if the arguments had been correct on their own terms, all they revealed was contempt for citizens’ rights, and a bending-over-backwards to shield the government from scrutiny.*

Later that same day, CJI Bobde, sitting in a bench of three, heard a case involving the deportation of Rohingya refugees to Myanmar. The hearing stood out for a range of unverified statements made by government counsel, CJI Bobde’s apparent bewilderment that Article 21 applied to non-citizens, and – in particular – his refusal to hear counsel for the UN Special Rapporteur. This last was another particularly hypocritical move given that the Supreme Court has, over the previous four decades, built its reputation on the basis of how it has relaxed the rules of standing in order to protect fundamental rights. A few days later, however, the bench’s order on the hearing surpassed even his order in the electoral bonds case. As I wrote here, the order ignored every contention that had actually been raised by petitioners’ counsel. It recorded “serious allegations” by the Union of India (pertaining to national security and to “touts”) without any scrutiny. And on the issue of ongoing political persecution in Myanmar, which was directly relevant to the principle of non refoulement, it made the wholly illogical remark: “we cannot comment on what is happening in another country.” In short, CJI Bobde’s bench condemned the refugees to be deported to a country that had engaged in a genocidal war of persecution against them, in an “interim order” that could not muster up a single legal – or logical – argument in its defence.

The second day was the 22nd of April, one day before CJI Bobde’s retirement. As India reeled under the second wave of Covid-19, a number of High Courts sprung into action, to protect citizens’ right to life: the Delhi High Court and the Bombay High Courts passed crucial orders on the availability of oxygen supply. The Delhi High Court, indeed, sat till after 10 PM to ensure that oxygen reached hospitals so that patients’ lives could be saved. The very next day, however – acting on an application filed by Vedanta Ltd asking that it be allowed to reopen its closed plant for the purposes of manufacturing oxygen – the Court created a “suo motu” petition with respect to Covid-19. It appointed Vedanta’s counsel, Mr. Harish Salve, as an amicus (he withdrew the next day). It then passed an extraordinary order justifying what was effectively an attempt to interfere with High Courts that were doing their job. CJI Bobde – joined by Justices Bhat and Rao – noted that “the High Courts have passed certain orders which may have the effect of accelerating and prioritising the services to a certain set of people and slowing down the availability of these resources to certain other groups whether the groups are local, regional or otherwise.”

Now this is a very serious accusation, and one would expect that when the Supreme Court effectively accuses High Courts of acting to benefit their own jurisdictions, it would be accompanied by unimpeachable evidence. However, there was zero – yes, zero – evidence that accompanied the order. CJI Bobde and his brother judges did not produce a single High Court order that, according to them, had “slowed down the availability of resources” to any group. And it was on the basis of this unproven assertion – along with many other dubious claims (see this thread) that the Court issued notice and asked various petitioners to show cause why “common orders” should not be passed on an extraordinarily broad range of issues, from the “supply of oxygen” to the “method and manner of vaccines”. Once again, the judicial hypocrisy was striking: throughout his tenure, CJI Bobde had repeatedly told petitioners to “approach the High Courts”, that “we are trying to discourage Article 32 petitions”, and – in an extra-judicial interview during the first wave of Covid – publicly taken an “executive knows best, the Courts should refrain from interfering” line when it came to judicial scrutiny of State action during the pandemic.**

There is a pattern to these three orders.*** First, they were all “interim orders”, passed while the underlying substantive petitions remained unheard. In the first two cases, the substantive petitions were pending for years, a classical form of judicial evasion where the Court’s failure to decide a case benefits the central government; in the third case, the basis of Vedanta’s application was a pending petition that was being heard by another judge, and taken away from him, presumably by the Chief Justice exercising his opaque, uncanalised “master of the roster” powers. Secondly, they were passed on the basis of factual and legal assertions that were either entirely speculative or blatantly untrue. Thirdly, arguments inconvenient to the conclusion were simply ignored. And fourthly, the outcome, in each of these cases, favoured the central executive. In sum, the effect of the Supreme Court’s conduct was to turn it into an extended arm of the executive, either through silence or through unreasoned decrees.

Evasion

Previously on this blog, I have defined “judicial evasion” in the following terms:

… by keeping a case pending, and delaying adjudication, the Court effectively decides it in favour of one of the parties (most often, the party in a stronger position, i.e., the government), simply by allowing status quo to continue.

At the time that CJI Bobde’s tenure began, in November 2019, the following important constitutional cases were pending adjudication:

  • The constitutional challenge to the effective abrogation of Article 370, and the splitting of the erstwhile state of Jammu & Kashmir into two union territories (from 6th August, 2019)
  • The constitutional challenge to EWS reservations (from 10 January 2019)
  • The Constitutional challenge to the Aadhaar amendment ordinance (later the Act) (from July 2019)
  • Judicial review over money bills (from 13 November 2019)

At the beginning of CJI Bobde’s tenure, the constitutional challenge to the Citizenship Amendment Act (CAA) also came to Court.

CJI Bobde’s tenure, as mentioned above, lasted seventeen months. On the date of his retirement, not one of these cases had been substantively heard or decided. In each of these cases – with the possible exception of the CAA – judicial evasion directly favoured the central executive. In the 370/Union Territory cases, it allowed the continued consolidation of a status quo that has, by now, turned into a fait accompli (recall that although the case itself was not before the Chief Justice, the power of constituting Constitution Benches remains within the sole prerogative of the Chief Justice). In the EWS reservations case, in the absence of a stay, the reservations in question continue. The Aadhaar amendment ordinance – which sought to revive provisions of the Aadhaar Act that were struck down by the Supreme Court in the Puttaswamy judgment – continues to be in force. So does the Aadhaar Act itself, which would fail if the Court was to find that judicial review over speakers’ certification of money bills was indeed permissible (although with Aadhaar, once again, fait accompli means it is difficult to see how ground realities will now be reversed, regardless of legal outcomes).

Seventeen months. Not a single judgment on any of these constitutional issues. There is little more to say, other than to point out that under CJI Bobde, the Supreme Court facilitated the creation of multiple fait accompli that directly benefited the central executive.

Hypocrisy

I have, in the first section of this post, dealt with three “interim orders” passed by benches headed by CJI Bobde’s benches, which stand out for their lack of reasoning, reliance on incorrect or misleading facts, and pro-executive outcomes. A fourth example is perhaps the most egregious of the lot. In February of 2020, in a detailed and reasoned order, the Karnataka High Court granted bail to twenty CAA protesters. The matter was appealed to the Supreme Court, where CJI Bobde – alongside Justices Gavai and Surya Kant – stayed the bail order, thus ensuring that individuals who had been set at liberty by the High Court would have to stay in jail pending trial. This order stayed in force for six months, until in September 2020, the Supreme Court quietly lifted it. At no point did CJI Bobde’s bench provide any reasoning for why twenty men had to spend six months in jail, even after the High Court had ordered their release. No reasoning was given for why the High Court’s order was insufficient, or what changed in six months to make it sufficient. This, in other words, is rule by interim order, where CJI Bobde’s bench exempted itself from the obligation of providing reasons for its (hugely consequential) actions.

Duplicity

The Supreme Court of India has twenty-nine judges. As might be expected, these judges hold very different views on a range of issues, including the interpretation of fundamental rights. Some judges set a very high store by personal liberty, and believe that the State ought to be held to strict account when it curtails the liberty of citizens. Other judges view personal liberty as something of a nuisance, and see nothing wrong with individuals spending months or years behind bars, without trial.

This multiplicity of views does not mean, however – as some scholars have argued – that “there is not one Supreme Court, but fourteen Supreme Courts of India.” This is not true for the simple reason that, after a series of judgments delivered during the tenure of CJI Dipak Misra (discussed on this blog), the Chief Justice, as Master of the Roster, has absolute, opaque, and uncanalised power in assigning cases to specific benches: others abide our question, thou art free. Let us therefore be very clear that until the Master of the Roster system is reformed, there is one Supreme Court, and that is the Supreme Court of the Chief Justice of India. It follows that when that Court speaks with a forked tongue, the responsibility lies on precisely one set of shoulders – the Chief Justice.

As an example of this forked tongue under the tenure of CJI Bobde, compare the contrasting fortunes of two members of the media, Arnab Goswami and Siddique Kappan. Both were arrested and incarcerated at around the same time, in October/November 2020: the Mahrashtra government booked Goswami for abetment to suicide, while Kappan was “picked up” while on his way to cover the Hathras gangrape, and later booked under the National Security Act (for a detailed timeline, see here). Petitions on behalf of both individuals landed before the Supreme Court: Goswami’s through a Special Leave Petition challenging an order of the Bombay High Court refusing him bail, and Kappan’s (initially) through a habeas corpus under Article 32 of the Constitution.**** Goswami’s case was listed overnight, heard, and bail was (correctly) granted; in a judgment delivered later in the month of November, Chandrachud J. (correctly) stated that “even a day” spent in jail was a day too many, from the perspective of personal liberty.

None of that, however, had any bearing on Kappan’s case, which the CJI kept for himself. First, the CJI asked why Kappan’s lawyers couldn’t approach the Allahabad High Court (a particular irony, given the CJI’s strenuous efforts to stop the High Courts from functioning, on the penultimate day of his tenure). Then, on multiple days the case was adjourned because CJI Bobde was busy hearing the corporate dispute between the Tatas and Cyrus Mistry. On the date of writing this piece, more than six months have passed since Kappan’s arrest. The Supreme Court – that ruled on the validity of Goswami’s bail in a single day – hasn’t seen fit to pass a reasoned judgment. Kappan remains in jail, with the latest news being that he has been hospitalised with Covid. If – as A.G. Noorani wrote – that Chief Justice Gogoi had driven “a coach and four” upon the writ of habeas corpus – the last bastion of the individual against State overreach – than CJI Bobde came back for the remains, and drove a truck over them, just to make sure that the writ was truly dead.

As I have said above, this is not a case of poly-vocality, or the dissonance of jurisprudence which comes with twenty-nine judges in a single institution. That excuse cannot fly when the Chief Justice retains absolute powers of case allocation. It is, then, not dissonance, but duplicity: duplicity in the exercise of the powers of the master of the roster, which – as this blog has pointed out before – in the context of the structure of the Supreme Court, have transformed into substantive powers to direct the outcomes of cases. This is, of course, a single example. They could be multiplied.

Conclusion: The Mouse under the Throne

As with previous posts, I have limited this critique to CJI Bobde’s judicial orders, and to his conduct as the Master of the Roster. I have not, therefore, considered a range of problematic statements made in court, such as, for example, “we will hear the case when the violence stops“, “the RTI is being misused“, and “women should not be at protests.” These are on the record, and history will judge.

Some commentators have classified Chief Justice Bobde’s tenure as that of a CJI who, effectively, did nothing in the face of multiple crises. This is a tempting – and not entirely incorrect – position to take. After all, it was under the stewardship of CJI Bobde that the Supreme Court, for all practical purposes, and barring a few honourable exceptions, went missing during the first wave of Covid-19, its behaviour – and deference to the central executive – particularly egregious during the migrants’ crisis; and it was under the stewardship of CJI Bobde that vital constitutional cases went into cold storage, if not buried altogether.

In my view, however, this would be a mistake. When summing up the tenure of CJI Gogoi, I wrote that he had overseen the rise of the executive court, a court that spoke the language of the executive, and had become indistinguishable from it. Under CJI Bobde, this process was accelerated, but in a more insidious form: because, while you can critique a judgment, it is much harder to critique a non-judgment, or a five-page interim order (although the shoddiness of the interim orders in question, as pointed out above, makes them fail even on their own terms). It is much more difficult to show how inaction has the effect of benefiting the central executive and to unpack judicial evasion, rather than to show how a judgment is flawed in its understanding of fundamental rights and State power. But the entire tenure of CJI Bobde, as we have seen, was either evasion or judgment by interim order, where in either case, and invariably, the executive always prevailed.

Thus, perhaps the best image for understanding where CJI Bobde has brought the Supreme Court is this: in classical literature, the judiciary is sometimes called “lions under the throne” (via Bacon). The implications, for present-day jurisprudence, are obvious: the task of the judiciary is to keep a check on the rulers without supplanting them. But now think of a mouse under the throne, who sometimes squeaks, and sometimes ventures out to bite the toes of anyone coming before the ruler. One need not press the image too hard, but only say: a judiciary on its way to becoming a mouse under the throne is a sad sight indeed.


*Note, however, that electoral bonds are asymmetrical, in that the government – via the SBI – is in a position to know who is donating money. This is why judicial evasion in this case has the effect of benefiting the central executive.

**The day after the hearing – i.e., today – the Supreme Court bench observed that people were misrepresenting its order, especially as it had not stayed the High Court proceedings. This is disingenuous: the absence of a formal stay (which would have been truly indefensible) is not a ground for praise, and nor does it indicate an absence of interference. A record of oral arguments before the Court shows that government counsel specifically stated that they would inform the various High Courts that the Supreme Court had taken cognisance of the matter. Indeed, later the same day, government counsel did exactly that. It is a different matter that the various High Courts elected to proceed with the cases before them nonetheless. That apart, the Supreme Court’s order, in asking petitioners before the various High Courts to “show cause” why common orders should not be passed on a range of issues is problematic on its own terms, for reasons discussed in the body of the blog post.

*** Which – taken together, and other than the Article 224A guidelines – are probably the only significant orders on constitutional issues that CJI Bobde’s benches passed during his tenure (other than the initial, wholly unprincipled expansion of the Court’s review jurisdiction of the Sabarimala issue, which I have discussed previously on this blog, and whose unprincipled character was revealed in how the Court refused to apply it in the first significant review case before it after Sabarimala, i.e. the Aadhaar Review).

****To forestall an inevitable – and flawed – objection, technically, the requirement for admission of a special leave petition is meant to be more stringent than that of an Article 32 petition, with the hint being in the word “special”.

Intermediary Guidelines and the Digital Public Sphere: Tracing first originators

The previous post (here) set out how social media companies are key facilitators of public discourse, and structure the digital public sphere. The Intermediary Guidelines distinguish between ordinary intermediaries and ‘Significant Social Media Intermediaries’ (“SSMIs”) and Rule 4 sets out “due diligence” obligations that SSMIs must satisfy to avail of legal immunity for content shared on their platforms. In other words, a violation of Rule 4 of the Intermediary Guidelines does not itself impose liability on SSMIs, but it exposes them to a significant risk of liability given the large volumes of content being transacted on their platforms.

This post examines the requirement that SSMIs providing messaging services identify the “first originator” of specific content on their platforms pursuant to judicial or government orders. I begin by setting out the content of the requirement. Next, I briefly examine the role of secure communications and anonymity under the Indian Constitution. I then set out the technical proposals as to how a first originator may be identified and finally evaluate whether Rule 4(2) would survive constitutional scrutiny.

The ‘Traceability’ Requirement

Rule 4(2) obligates SSMIs that are “providing services in the nature of messaging” (think WhatsApp, Signal, Telegram, and iMessage) to “enable the identification of the first originator of the information on its computer resource”. SSMIs are required to comply with this obligation in two situations;

(1) where a judicial order is passed; or

(2) where an order is passed under Section 69 of the IT Act and the Information Technology (Procedure and Safeguards for interception, monitoring and decryption of information) Rules, 2009 (“IT Decryption Rules”).

The IT Act defines an “originator” as anybody who generates, transmits, or stores content. The effect of the rule is to enable the identification of the first user profile on a computer resource to generate, transmit or store a specific piece of information. While Rule 4(2) postulates a judicial order ordering identification, it does not mandate it. Orders under Section 69 are passed by senior civil servants, so there is no meaningful check on executive power. Further, the Union Government insists this is a measure to fight illegal content that has widespread reach; however, Rule 4(2) itself contains no threshold for ‘virality’ and could in principle apply to any content that was shared more than once. If there is more than one “originator”, there is de-facto a “first originator”

Rule 4(2) includes three safeguards and creates one legal presumption. First, an identification order may only be passed for the purposes of “prevention, detection, investigation, prosecution or punishment” of offences “related to” the sovereignty, integrity, or security of India, friendly relations with foreign states, public order, or the incitement of offences relating to any of these headings but also rape, sexually explicit material, or child sexual abuse. Second, an identification order cannot be passed where a less intrusive means to identify the first originator exists. Third, no SSMI is required to disclose the “contents of any electronic message or any other information related to the first originator, or any information related to its other users

Finally, Rule 4(2) also states that if the first originator of content on the messaging platform is located outside India, the first originator within India (i.e., the first person who generates, stores, or transmits the content in India) “shall be deemed” to be the first originator with respect to that content.

Privacy and Proportionality in India

In the last post we examined how social media companies constitute the digital public sphere. This is borne out empirically in the case of messaging platforms as well. In a recent study conducted by the Reuters Institute and the University of Oxford, 52% of Indian respondents reported getting their news via WhatsApp. 60% clicked on news links, 46% posted or shared news on the platform, and 39% took part in group or private discussions. Messaging platforms facilitate public discourse and allow citizens to shape public opinion, perhaps best demonstrated by the high levels of political content on these platforms. Anonymity and security thus form crucial barriers against political speech being chilled.

Messaging platforms also allow individuals to share constitutionally protected but socially stigmatised views, ensuring individual autonomy and dignity. It allows people to securely discover and express themselves, and effectively organise with other citizens to create centres of countervailing power. As the former UNHRC Special Rapporteur noted, being protected from the public gaze may allow citizens to discover and share ideas they may otherwise be persecuted for. “The ability to search the web, develop ideas and communicate securely may be the only way in which many can explore basic aspects of identity, such as one’s gender, religion, ethnicity, national origin or sexuality.” However, the security provided by privacy is especially fragile. Courts have recognised that where even the threat of surveillance exists without a remedy, there exists an interference with a citizen’s privacy.

Almost two decades ago, the Supreme Court in PUCL recognised that Indians have a constitutionally guaranteed right to communicate privately. In Puttaswamy,the Court articulated a vision of privacy grounded in individual autonomy that interacted and enabled the enjoyment of other rights guaranteed by the Constitution, most notably the right to freely and privately hold and express opinions, and associate with other citizens (¶412). In other words, privacy forms a necessary foundation to the enjoyment of the rights and privileges guaranteed by the Constitution. The Indian Constitution thus guarantees private and secure communications to both protect individual autonomy and facilitate democratic self-governance.   

Any infringement on a citizen’s right to communicate privately must therefore satisfy the test of proportionality: (1) the infringing measure must pursue a legitimate state aim; (2) the measure must substantially further the state aim; (3) the measure must be the least restrictive option amongst equally effective alternatives; and (4) the measure must not have a disproportionate impact on rights holders.

Rulemaking power

Before we examine the issue of privacy and encrypted messages, there exist a preliminary issue of the very power to frame such a rule. The prefatory text to the Intermediary Guidelines notes that the Guidelines are issued under the powers granted to the Union Government by Sections 87(2)(z) and 87(2)(zg) of the IT Act. The former grants the Union Government power to frame web-site blocking rules and the latter grants power to frame rules to regulate the immunity granted to intermediaries. In short, neither of the sub-clauses relate to monitoring or tracing content on computer networks. The government may argue that Rule 4(2) forms legitimate regulation of intermediary immunity, but this is belied by the fact that the IT Act itself grants the government to monitor and decrypt content in a separate and independent provision, namely Section 69. Section 69 has its own rule-making provision, Section 87(2)(y), and the government has already framed the IT Decryption Rules under this section.   

Operationalising ‘Traceability’

There exists a gap between Rule 4(2) mandating SSMIs to identify the first originator and the platforms being able to do so – and this is because all major messaging platforms such as WhatsApp, iMessage, and Signal are end-to-end encrypted. This means even if the messages on these platforms were monitored or intercepted, the messages would first need to be decrypted using a decryption key for their contents to be read. It is important to understand that the decryption key is stored on the user’s devices and not with platforms, so WhatsApp could not reveal the contents of messages even if it wanted to do so to comply with Rule 4(2). Further, the decryption key is unique between users, and changes over time. So even if a decryption key were acquired, it would reveal the contents of one chat for the limited period that the specific decryption key was used.

Understanding this, the impossibility of the task demanded of SSMIs comes into picture. How does a messaging platform trace a piece of content across thousands, potentially millions of chats (none of which it possesses decryption keys for) to locate the first originator? This tension is borne out in the IT Decryption Rules drafted in 2009. The Rules define “decryption assistance” as “allow access, to the extent possible, to encrypted information”. This is further buttressed by Rule 13(3) of the IT Decryption Rules, which states that “Any direction of decryption of information issued under rule 3 to intermediary shall be limited to the extent the information is encrypted by the intermediary or the intermediary has control over the decryption key.”      

Given that Rule 4(2) of the Intermediary Guidelines expressly states that an order to identify a first originator shall be “as per” the IT Decryption Rules, it may plausibly be argued that an identification order under Rule 4(2) would simply not apply to a platform which does not possess the decryption key. In fact, Facebook has expressly contended that a ‘best efforts’ obligation to assist the government does not contemplate a platform radically modifying its platform to allow the government to trace originators. However, while the Union Government states that it does not want to break end-to-end encryption, it has insisted that platforms are obligated to modify their functionality to enable tracing first originators.

There have been two prominent proposals on how traceability may be achieved without breaking end-to-end encryption. The first proposal was mooted by one Professor Kamakoti and is discussed in Aditi Agrawal’s piece (here). More recently however, anonymous officials from the Ministry of Electronics and IT have argued that a “hash constant” may be used to identify originators.

Hashes

The idea of a hash is to assign every distinct message a unique hash identifier. Briefly, if User P sends the message “I plan to undermine the Indian Government” to User Q, the message is assigned a hash identifier, for simplicity say the identifier is ‘52’. User Q now forwards the message to Users R, S, and T, who go on to send it to hundreds or thousands more until it reaches User M who believes the message to be illegal. Now, an investigative agency can ask the platform to run a search against all messages having the identifier 52, to find when it first appeared – with User P.

In her piece, Aditi notes that this may not work as platforms generate hashes based on: (1) the contents of the messages; and (2) the keys between users, which are constantly changing. Therefore, the message between User P and User R will have a different hash from the same message sent from User P to User T. This means that any one hash would be of limited value as it would disclose identical messages, between two users, sent when a specific decryption key was in use. All other identical messages would have different hashes.

Ironically, if this is not the case, the consequences are far grimmer. Because hashing ties an identifiable value to the contentsof a message (e.g., 52=I plan to undermine the Indian Government), the platform, and consequently the government, could know every user on the platform who has that message on their phone. This is contrary to Rule 4(2) itself, which states that SSMIs shall not be required to disclose the contentsof the message or any information related to other users. (Sidebar | it is entirely conceivable that over time the government shifts from searching for hashes that equal “I plan to undermine the Indian State” to hashes that equal “I don’t like the Indian Government.”)

Constitutional scrutiny

The proportionality test is a cumulative one, and for the sake of brevity I only highlight the most striking issues with Rule 4(2). First, the State bears the onus of demonstrating that the measure (tracing first originators) furthers its stated aims (preventing the incitement of offences against the integrity of India, sexually explicit material etc.). The law recognises that nearly any measure may potentially be useful or desirable for governments to achieve the cessation of crime and ideally, requires that the State demonstrate the measure in question is “necessary” to achieve its stated aims.

Why first originators?

It is unclear how tracing the first originator assists the State in achieving its aims. We cannot assume that the first originator createdthe content. This logic is defeated as Rule 4(2) cannot cover cross-posting; a twitter user could create and upload a video that is subsequently downloaded and shared on WhatsApp – the first originator is not the creator. Rule 4(2) itself rejects the creation rationale by acknowledging that content may be created outside India but sent to India – creating a ‘first receiver’ of sorts. Now if we were to argue that this ‘first receiver’ is facilitating the spread of the illegal content in India, how do we justify overlooking other originators for domestically sourced content? Imagine I send “illegal” content to User X, who forwards it to a group with several thousand users – who is facilitating the spread of illegal content and whom should the law be more focussed on identifying, and how should liability be apportioned between User X and me?   

Further, as Nandan Kamat noted, secondary liability for repeating and disseminating speech varies depending on the offence (public order, defamation, etc.) In some regimes, each re-publication (forward) constitutes a wholly new publication while in other cases liability for repeating content is minimal. The level of due diligence a speaker exercises before sharing content varies widely based on the content and the platform. Context is also crucial. Imagine illegal content is circulating on Platform A and Platform B. On Platform A, the content is being used to incite violence but on Platform B the content is being used to generate counter-speech against violence. As Rule 4(2) states that the contents of the messages cannot be disclosed, how do we differentiate between the originator on the two platforms? The first originator on Platform B may provide context by displaying the contents of her messages, but she should not have to, she should not even be implicated in a criminal proceeding for making constitutionally protected speech. All in all, Rule 4(2) is a blunt instrument most likely to limit the spread of both legal and illegal content by creating a massive chilling effect on users.

Are first originators the first?

Another major issue is that there is a distinction between proving that content first originated from a particular device or user profile and proving that the person who owns the device sent the content. The possibilities for manipulation are endless, ranging from virtual sim-cars linked to foreign numbers that are sold on all major app-stores for as little as ₹100 to picking up somebody’s phone or acquiring remote access privileges. This manipulability and arbitrariness are aggravated by the fact that Rule 4(2) is limited to a single SSMI’s platform (excluding cross platform posting) and the geographic restrictions.

Imagine a piece of “illegal” content is widely circulating on WhatApp (or even better, a smaller messaging service falling below the threshold of an SSMI). User X using a virtual (foreign) sim cross posts it to Telegram by sending it to his mother, and then uses her phone to forward it back to User X’s Indian Telegram. User X now forwards it to a Telegram group with 5,000 users. User X’s mother is the first originator. Therefore, how far the identity of the ‘first originators’ user profile or device can aid in criminal prosecution or curbing misinformation is highly questionable.

Alternative measures

The State must also demonstrate that tracing the first originator is the least intrusive method of achieving its aim among effective alternatives. While there seems to exist some uncertainty within the Union Government how the identification of first originators will be operationalised, the present proposals are particularly intrusive and risk the privacy of other users. An order under the IT Decryption Rules does not require judicial authorisation, and no remedy is provided to users. Because the government itself is a substantial actor on messaging platforms, the necessary independence of identification orders has not been secured. While Rule 4(2) prohibits an identification order from being passed where less intrusive measures exist, there exists no legal structure to guarantee or even scrutinise an incompetent or mala fide claim by an investigative agency that this is actually the case. Further, if hashing were to be employed, basic safeguards such as data retention and expiry are not in place – how long can a hash identifier associated with content be active?

This leaves the Government with a high burden to demonstrate that Rule 4(2) achieves something other measures simply cannot. This is undermined by the fact that mobile platforms already provide the Government a host of ‘basic subscriber data’ allowing the Government to trace users. For example, under the Criminal Procedure Code the Government already requests platforms to provide users’ phone numbers, names, device info, app version, start and end times, last connection, IP and email addressed and web-client data. The Government also has other legal powers such as wiretapping, geo-location, and physical surveillance of suspects. Further, the Government can also use human intelligence to infiltrate and track users on messaging platforms, as reporters have done to investigate the organised spread of misinformation. In summary, the Government has a host of alternative investigative tools while citizens rely almost exclusively on encryption to protect their communications.          

Conclusion

Encrypted communications are a thorny issue world over and law enforcement agencies are lobbying hard to access user messages. But given the importance of encrypted messaging to the autonomy and dignity of citizens, and its centrality to shaping public discourse in India, any restrictions must be strictly scrutinised from the lenses of the rule of law and due process to address the power imbalances that exist between citizens and the State. How Rule 4(2) will be operationalised will have a substantial bearing on its legality. However, as it stands today, the identification of first originators requires weakening the privacy of millions of Indian users to ineptly trace a few potentially bad actors; actors that we are unclear whether we should, or how we will, ultimately hold guilty.    

Complicity in Genocide: The Supreme Court’s Interim Order in the Rohingya Deportation Case

When an order of the Supreme Court of India is likely to have the direct effect of sending a group of persecuted refugees back into the hands of a genocidal military State, quibbling over legalities is perhaps a fool’s errand. However, the six-page interim order of the Court allowing the deportation of Rohingya refugees back to Myanmar – authored by Chief Justice Bobde, and Justices Bopanna and Ramasubramanian – stands out not only for its inhumanity, but also for its failure to comply with the most basic principles of legal reasoning. It therefore becomes important to continue to hold the Supreme Court to account upon the touchstone of the rule of law, even when the Court itself has abandoned it: both to maintain a record, and in the (perhaps forlorn) hope that a day will come when orders such as these will be remembered in the same way as the turning away of the Jewish refugees on board the MS St. Louis, back into the Nazi death-camps.

The Issues

The legal and constitutional issues arising out of the Rohingya deportation case were set out by Suhrith in a guest post last week. In short, Suhrith pointed out that even if it was to be accepted that the international law principle of non refoulement (i.e., that refugees cannot be sent back to their home country if they face a well-founded fear of persecution) was not a principle of jus cogens – and therefore not directly binding upon India – there are other reasons under the Indian Constitution for why it is impermissible for the State to deport the Rohingya back into an ongoing genocide. These are:

  • At least two High Court judgments have held that the principle of non-refoulement is part of Article 21’s guarantee of the right to life and personal liberty, available to all persons.
  • Even though India has not ratified the Refugee Convention, it is signatory to a number of international treaties that incorporate the principle of non-refoulement (and other applicable principles, such as the prohibition against racial discrimination).
  • Even though India has not ratified the Refugee Convention, there is nothing in Indian domestic law that requires the Indian government to contravene the principle of non-refoulement. Consequently, following the principles outlined in the Vishaka judgment (among others), non-refoulement and other treaty principles are a part of the Indian legal landscape.

The Reasoning

Unsurprisingly, the six-page interim order of the Supreme Court fails to address a single one of these contentions. The reasoning of the Court – such as it is – is to be found in three paragraphs – paragraphs 12 – 14 – of the order, which I extract here:

We have carefully considered the rival contentions. There is no denial of the fact that India is not a signatory to the Refugee Convention. Therefore, serious objections are raised, whether Article 51(c) of the Constitution can be pressed into service, unless India is a party to or ratified a convention. But there is no doubt that the National Courts can draw inspiration from International Conventions/Treaties, so long as they are not in conflict with the municipal law. Regarding the contention raised on behalf of the petitioners about the present state of affairs in Myanmar, we have to state that we cannot comment upon something happening in another country.

It is also true that the rights guaranteed under Articles 14 and 21 are available to all persons who may or may not be citizens. But the right not to be deported, is ancillary or concomitant to the right to reside or settle in any part of the territory of India guaranteed under Article 19(1)(e).

Two serious allegations have been made in reply of the Union of India. They relate to (i) the threat to internal security of the country; and (ii) the agents and touts providing a safe passage into India for illegal immigrants, due to the porous nature of the landed borders. Moreover, this court has already dismissed I.A.No. 142725 of 2018 filed for similar relief, in respect of those detained in Assam.

It would be hard to cram in more non-sequiturs, sleights of hand, and untenable legal propositions in the space of three short paragraphs. After noting that India has not ratified the Refugee Convention (which is correct), the Court observes that “National Courts can draw inspiration from International Conventions/Treaties, so long as they are not in conflict with the municipal law.” Having observed this, the Court then goes on to say … nothing at all. Recall that the entire argument of the petitioners was that there do exist international treaties, which are not in conflict with municipal law, and compliance with which would require that the Rohingyas not be deported. However, the Court makes no mention of that argument, thus leaving the legal proposition simply hanging.

Instead, the Court makes an utterly senseless statement: “regarding … the present state of affairs in Myanmar, we … cannot comment upon something happening in another country.” This is senseless, because there exists a whole range of situations in which Courts have to comment on “something happening in another country” (think of extradition disputes, for example, or even common-or-garden conflict-of-laws cases). Indeed, in this case the situation in Myanmar is relevant to the adjudication precisely because the petitioners’ argument was centred around non refoulement, which in turn is premised upon the fact that in that “other country”, there is a genocide in progress. Thus, the Court’s glib “we … cannot comment upon something happening in another country” is not only senseless as a judicial statement in a judicial order, but amounts to active abdication of the Court’s role under the Constitution, and allows the Court to completely evade the core of the petitioners’ argument: the moment an argument of non refoulement is made, the Court cannot but comment on “what is happening in another country.”

So much for the first paragraph. In the second paragraph, the Court advances a regressive and disturbing legal proposition, based upon an unsubtle sleight of hand. After noting that the rights under Article 21 and 14 are available to non-citizens (a record of the hearings indicates that the Court was unaware of this during oral argument until it was specifically pointed out), the Court then holds that “the right not to be deported” does not fall within Articles 21 or 14, but 19(1)(e) (freedom to reside or settle in any part of India), which is available only to citizens. The sleight of hand, of course, lies in the fact that the petitioners were not claiming a free-standing right against deportation: they were claiming a right against deportation to a country where they were in active danger from an ongoing genocide. This is where the right to Article 21 comes in, which perhaps needs to be restated, as the Court appears to have forgotten it:

“No person shall be deprived of his life or personal liberty except according to a procedure established by law.”

It perhaps needs to be spelt out for the benefit of the Court that deporting people back into an ongoing genocide might violate an individual’s right to life and personal liberty. That said, the Court’s attempts to confine the issue to Article 19(1)(e) appears a lot like an approach to Part III of the Constitution that walls off individual fundamental rights into separate silos, with no overlap between Articles 14, 19, and 21. In popular imagination, there is a case that did that. It was called A.K. Gopalan vs State of Madras. It was, we are told, overruled by Maneka Gandhi vs Union India, and that Articles 14, 19, and 21 now formed a “golden triangle”, but perhaps that is also only in popular imagination. That apart, the Court’s order drives home yet again a tragic irony that this blog has frequently pointed out: in 2021, Article 21 and “the right to life” includes everything under the sun, but the one thing it does not include is an individual’s right to life.

We now come to the third paragraph, which is quite extraordinary. In courtroom lingo, there is a term counsel often use to describe their rival’s arguments: that he or she is “only creating prejudice.” A lawyer says this when their rival is not making a legal argument, but attempting to manipulate the emotions of the judge in order to influence the outcome of the case (for example, through character assassination of one of the parties in divorce case). In the past few months, we have regularly seen government counsel attempt to create prejudice by playing the national security card, especially in the litigation around the restriction of internet access in Kashmir. In this third paragraph, however, it is the Court that engages in creating prejudice. It does so by reiterating the “serious allegations” of the Union of India (which have already been set out in its summary of arguments of parties) – of a “threat to internal security” and the misuse of “porous borders by touts.” Notice that the Court makes zero effort to engage with either of these “serious allegations.” There is no question of evidence, of burden of proof, of sifting arguments, of legal standards – the things that you expect from a “Court of law” – there are only these “serious allegations”, simply hanging there, without anything more. What business the Court has inserting “serious allegations” into the operative part of its judgment if it has no intentions of engaging with them is left to the imagination of its readers.

We can therefore see that in what passes for “reasoning” in this judgment, not only does the Court fail to address any of the arguments of the petitioners, but the “arguments” it does provide come from judgments that it keeps telling us belong to the bad old Gopalan days, long consigned to infamy. Indeed, if there is one judgment that the final paragraph is eerily reminiscent of, it is (unsurprisingly) ADM Jabalpur (a frequent occurrence these days). The Court says that the Rohingyas “shall not be deported unless the procedure prescribed for such deportation is followed.” Just like in ADM Jabalpur, the Court said that a policeman could shoot someone on sight with impunity as long as the right official had signed the authorising order, here the Court is saying that the refugees can be deported back into an ongoing genocide as long as the right officials (presumably) have signed the deportation papers.

One final point: in paragraph 3 of the judgment, the Court says:

Sh. Chandra (sic!) Uday Singh, learned senior counsel representing the Special Rapporteur appointed by the United Nations Human Rights Council also attempted to make submissions, but serious objections were raised to his intervention.

Much like in the third paragraph discussed above, the Court simply says “serious objections were raised”, and leaves the rest to the imagination. What were these objections? What made them serious? How did Sh. Chander Uday Singh respond to them? On what basis did the Court refuse to allow him to place his submissions? None of this is explained; that apart, to anyone remotely familiar with the workings of the Supreme Court, the hypocrisy here is simply staggering. Recall that this is a Court that has built its entire reputation over the last four decades on loosening the rules of standing and easing access, in the “larger interests of justice.” There is little doubt that where the issue concerns the legal rights of refugees under international law, the UNHRC Special Rapporteur has excellent grounds for intervention – or, at the very least, far better grounds than the interventions the Supreme Court allows on a daily basis, from persons who have no connection to a case at hand.

Conclusion

By way of conclusion, there is one thing about the order – taken as a whole – that is perhaps most disturbing of all. Historically, when Courts pass morally unconscionable orders, they do so shamefacedly. Judges write about how if they had a choice, they would not pass such an order – but that they are bound by the law, which leaves them no choice. ADM Jabalpur is, of course, a famous example of this, where the judges repeatedly emphasised how their moral senses were outraged at the State’s arguments, but that the law compelled them to take a course they had no option to deviate from.

The Rohingya order reflects none of that. There is not even a smidgen of unease that the result of the order might be to deliver refugees into the hands of a genocidal military. In fact, the only thing the judges have to say on the issue is: “we cannot comment on another country.”

Perhaps what is most disturbing, then, is not the absence of legal sense in the Court’s order, but the death of its moral sense.

Guest Post: Conditional Legislation and Executive Power – The constitutional challenge to the IBC personal guarantor notification

[This is a guest post by Aakanksha Saxena, Pooja Vasandani and Pranav Narsaria. The authors assisted Senior Counsel appearing for some of the Petitioners.]


The Insolvency and Bankruptcy Code, 2016 (“IBC/the Code”) was enacted with a view to inter alia provide for the timely resolution of insolvency of corporate persons, partnership firms, and individuals, with a  focus on the maximization of value of assets of such persons. Section 1(3) of the Code provided for the coming into force of the Code and/or its various provisions, on such date as the Central Government would by notification appoint. Several provisions were thus brought into force by the Central Government from time to time.

Vide its  (“Notification”), purportedly issued in the exercise of the power conferred on the executive under section 1(3), the Central Government brought into force the majority of Part III of the Code titled “INSOLVENCY RESOLUTION AND BANKRUPTCY FOR INDIVIDUALS AND PARTNERSHIP FIRMS”, with a limited application viz. , “only in so far as they relate to personal guarantors to corporate debtors”. Given the apparent overstepping by the executive in the Notification, in the background of the limited scope of Section 1(3), as well as other concerns in respect of the Rules and Regulations pertaining to personal guarantors that also stood notified, the constitutional validity of the Notification was challenged before several High Courts, and the Hon’ble Supreme Court (“Court”) subsequently brought up all the cases to itself for hearing. Furthermore, the Court limited the hearing to arguments on whether the MCA had the power to issue the Notification. The hearing has been completed and the Court has reserved its judgement.

In this blog, the authors will cover the specific ground of challenge to the Notification being the overreach of the executive qua Section 1(3) of the Code, the Union of India’s arguments in support thereof and the attempted consequent widening of conditional legislation, and the larger issue facing the Court in this matter.

Ground of challenge

The concept of ‘conditional legislation’ has been elaborately explained by the Court in Sardar Inder Singh v. State of Rajasthan, wherein the Court held that, “Such legislation is termed conditional, because the legislature has itself made the law in all its completeness as regards “place, person, laws, powers”, leaving nothing for an outside authority to legislate on, the only function assigned to it being to bring the law into operation at such time as it might decide.”

Now, Section 1(3) of the IBC provides that:

It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code shall be construed as a reference to the commencement of that provision.”

Thus from a plain reading of the section, it is a classic case of ‘conditional legislation’, wherein the legislature has itself made the law, and the only function assigned to the executive is to bring the law into operation at such time as it may decide. The proviso only extends this power to bringing the provisions of the IBC into force on different dates.

However, vide the Notification, the executive sought to bring the majority of part III of the IBC into force only with respect to one class of debtors, i.e., personal guarantors to corporate debtors. This has the effect of modifying part III of the IBC, which did not otherwise create any distinction between the insolvency / bankruptcy of an individual and that of a personal guarantor to a corporate debtor. Part III provides for “Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms”, and thereafter refers to these two categories of persons simply as debtors.  The effect of the Notification is that it in substance modifies the text of the actual sections of Part III, despite the clear absence of any element of legislation/legislative authority having been conferred upon the Central Government. The words “only in so far as they relate to personal guarantors to corporate debtors” forming a part of the Notification are attempted to be added like a rider to each of the sections mentioned in the Notification, clearly rendering such an exercise outside the scope of Section 1(3) of the IBC. What is interesting to note is that Part III nowhere even contains or uses the term “personal guarantor”. This argument formed the basis of the challenge mounted to the Notification, which if successful, will render the government liable to re-notify the provisions in a valid manner, or, the legislature will be required to amend the text of the Code itself and bring in a category of personal guarantors independently, both of which will then be required to stand the test of judicial review.

Other arguments canvassed by the Petitioners also arose from the inconsistency between the avowed object of the Code viz. that of revival and maximisation of value, and the frame of Part III which focuses on recovery by way of the repayment plan, and Part III being contrary to the Indian Contract Act.

Union of India’s arguments

The Union of India relied on the Insolvency and Bankrupcty Code (Amendment) Act, 2017, which had amended Section 2(e) of the IBC. Section 2 deals with the classes of persons to whom IBC shall apply. Prior to this amendment, Section 2(e) provided that the IBC would apply to “individuals and partnership firms”. The amendment substituted clause (e) and added three classes in its place. i.e.:

(e) personal guarantors to corporate debtors;

(f) partnership firms and proprietorship firms; and

(g) individuals, other than persons referred to in clause (e).”

On the basis of this amendment it was argued that Section 1(3) r/w section 2(e) authorized the executive to bring into force any part of the IBC with respect to a specific class specified in Section 2, which in this case was the class of personal guarantors to corporate debtors. The Union relied on the lack of challenge to the amendment of Section 2(e) to bolster its case of widening the scope and ambit of Section 1(3) vis-à-vis its own powers of notifying the law.

However this is clearly beyond the scope of the power under section 1(3), as explained in Sardar Inder Singh, under a conditional legislation, the legislature has made a complete law as regards, ““place, person, laws, powers””, and thus the executive is not competent to enact a provision only in so far as it relates to a specific class of persons. Such exercise, if deemed necessary can only be done by the legislature. Thus, if the Government of India thought it was necessary to bring part III of the IBC into force only with relation to a specific class of persons, then such an exercise could only be done via a legislative amendment, as it would require modification of the provisions of the IBC.

There are various other enactments containing similar provisions, for instance the Companies Act, 2013 also has a similar provision viz. Section 1(3), allowing the executive to bring the provisions of the act into force at such time as it deems fit. If the Union’s arguments are accepted, then it would mean that the executive can step into the shoes of the legislature and modify the provisions in various different legislations framed by the Parliament in its wisdom.

‘Conditional’ and ‘Delegated’ legislation

The power to modify a provision is an extreme form of ‘delegated legislation’ which is distinct from ‘conditional legislation’. The distinction between the two forms of legislation has been elaborated by the Court in Vasu Dev Singh v. Union of India, wherein the Court stated that:

“The distinction between conditional legislation and delegated legislation is clear and unambiguous. In a conditional legislation the delegatee has to apply the law to an area or to determine the time and manner of carrying it into effect or at such time, as it decides or to understand the rule of legislation, it would be a conditional legislation. The legislature in such a case makes the law, which is complete in all respects but the same is not brought into operation immediately. The enforcement of the law would depend upon the fulfilment of a condition and what is delegated to the executive is the authority to determine by exercising its own judgment as to whether such conditions have been fulfilled and/or the time has come when such legislation should be brought into force. The taking effect of a legislation, therefore, is made dependent upon the determination of such fact or condition by the executive organ of the Government. Delegated legislation, however, involves delegation of rule-making power of legislation and authorises an executive authority to bring in force such an area by reason thereof. The discretion conferred on the executive by way of delegated legislation is much wider.”

A clear example of delegated legislation can be found in Section 239 of the IBC itself, which empowers the Central Government to make rules for carrying out the provisions of the IBC.

As elaborated by the Court in Vasu Dev Singh, the discretion and power granted to the executive in a case of ‘conditional legislation’ is extremely limited, i.e. limited only to the extent of notifying a date on which provisions shall come into force, and no further. Section 1(3) being a classic example of conditional legislation, the executive could not have gone beyond the power conferred to it and attempt a modification of provisions of part III of the IBC in the garb of exercise of ‘conditional legislation’.

As elaborated by the Court in Vasu Dev Singh, the discretion and power granted to the executive in a case of ‘conditional legislation’ is extremely limited, i.e. limited only to the extent of notifying a date on which provisions shall come into force, and no further. Section 1(3) being a classic example of conditional legislation, the executive could not have gone beyond the power conferred to it and attempt a modification of provisions of part III of the IBC in the garb of exercise of ‘conditional legislation’.

The question that the Court is faced with in this case is to determine whether the executive is empowered to in effect modify a provision in exercise of power granted by ‘conditional legislation’.

Conclusion

The Central Government is right in saying that the provisions of the IBC should be extended to personal guarantors of corporate debtors, as in most cases they are the promoters of the corporate debtors who play a huge part in bringing the corporate debtor to insolvency. However, the manner in which the Government has undertaken this exercise  would unfairly and incorrectly stretch the contours of the power of ‘conditional legislation’. The Court being faced with a long line of established precedent, ought not permit this manner of notification which will then grant the executive wider powers than would be legislatively intended.

Intermediary Guidelines and the Digital Public Sphere: Automated Filtering

In a previous post (here), I had argued that focusing on intermediary liability to regulate social media companies would likely weaken free speech and further entrench the power of large technology companies. However, with the adoption of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Intermediary Guidelines”), the government has adopted a liability centred approach – so let us take stock.

As the name suggests, the Intermediary Guidelines traverse well beyond the regulation of online intermediaries and raise several issues as discussed by the IFF (here and here) and the SFLC (here). The Guidelines are currently subject to a comprehensive legal challenge before the High Court of Kerala. At their core, the Guidelines change the obligations imposed on online intermediaries in ways that may fundamentally alter the public sphere. This post focusses on the obligation of social media companies to use ‘automated filtering mechanisms’ to weed out ‘illegal’ content.      

The Context

Content on the internet typically concerns three parties: (1) ‘content originators’ who post or share content; (2) online intermediaries who provide a platform for users to share content on; and (3) ‘content recipients’ who view the content posted by content originators. Conceptually, it is important to distinguish between websites that post their own content (a news organisations website), and online intermediaries that merely provide a platform (WordPress, which allows bloggers and readers to interact but has nothing to do with the content of individual blogs). When (inevitably) the material posted by a content originator violates the law, it raises the question of whether the online intermediary should be held secondarily liable for its role in spreading the illegal content.

Section 79(1) of the IT Act states that an online intermediary shall not be liable for this facilitative role. This ensures that intermediaries do not have to scrutinise each user post for potential illegality/liability that may be foisted on them, ensuring the free flow of user content on platforms such as Facebook and Twitter. However, given the wide reach of the internet, governments also typically want intermediaries to act as gatekeepers against some of the worst forms of content. As a result, in India, the immunity offered to intermediaries by Section 79(1) requires intermediaries to satisfy certain obligations. Crucially, under Section 79(2)(c), online intermediary must “observe due diligence”. This is where the Intermediary Guidelines become relevant, as Rules 3 and 4 of the Guidelines prescribe the ‘due diligence’ obligations of online intermediaries. In other words, if intermediaries want to avail of the legal immunity for any illegal content on their platforms, they must satisfy the conditions of Rule 3 and 4 of the Intermediary Guidelines.   

Scheme of the Guidelines

Rules 3 and 4 of the Intermediary Guidelines impose a system of differentiated obligations for ordinary online intermediaries and ‘Significant Social Media Intermediaries’ (“SSMIs”). As expected, the latter have significantly more onerous responsibilities to fulfill to avail of legal immunity. While this post focuses solely on SSMIs, it is worth spending a moment on this distinction. The Guidelines define an SSMI as an intermediary which: (i) has more “registered users in India” than a limit set by the Union Government; and (ii) primarily or solely enables online interactions between users and allows them to access, upload, and share content. The Union Government has since stated that the threshold for an SSMI is 5,000,000 “registered users in India”.

As a practical issue, it is unclear exactly how “registered users in India” will be calculated. Geographic locations are easily spoofed on the internet and the requirement is bound to create a few borderline cases involving some arithmetic gymnastics to avoid being classified as a SSMI. To add to this, platforms such as Signal and Telegram do not release country specific userbase data.

Taking a step back, it is also worth examining the trend to impose additional monitoring and filtering responsibilities on large social media companies. The increased burden on SSMIs to moderate their platforms is a tacit admission that these platforms form the bedrock of public discourse or a ‘digital public sphere’. In addition to cat videos, these platforms facilitate communication between citizens and the political centre of self-governance. Thus, these platforms aid democratic legitimating by allowing citizens to participate and shape public opinion. Suspending a citizen’s social media account is the modern-day equivalent of gagging them at a town hall. Simply put, SSMIs perform a very public function in our democracy and thus their regulation must balance the government interests in preventing harm in the public sphere (e.g., defamatory, or presumptively illegal content), with the free expression rights of internet users (included here is the right to access/receive information).  

Proactive Filtering Requirement

Rule 4 sets out the “due diligence” obligations of SSMIs. Rule 4(4) states that an SSMI:

shall endeavour to deploy technology-based measures, including automated tools or other mechanisms to proactively identify information that depicts any act or simulation in any form depicting rape, child sexual abuse or conduct, whether explicit or implicit, or any information which is exactly identical in content to information that has previously been removed or access to which has been disabled on the computer resource of such intermediary under clause (d) of sub-rule (1) of rule 3, and shall display a notice to any user attempting to access such information stating that such information has been identified by the intermediary under the categories referred to in this sub-rule.

The obligation in Rule 4(4) thus creates a best efforts obligation on SSMIs to utilise automated tools to proactively identify two classes of content. First, content that explicitly or implicitly depicts rape or child sexual abuse, and second, content that is exactly identical to content that has been taken down pursuant to Rule 3(1)(d). Under Rule 3(1)(d), content may be taken down pursuant to a court order or a government order (as noted here, there are virtually no limits on what the government may block). Although the provision does not expressly require an intermediary to block access to a page identified as hosting such content, absent a clear government clarification that users will still be permitted to view the flagged content, we may presume that the intermediary’s notice flagging the content will replace the web-page’s actual content – effectively blocking the content. (Sidebar | As takedowns under court or government orders themselves are haphazard and regularly not disclosed to the public, it is unclear what “categories” the user-facing notice will use, drastically reducing its usefulness as a transparency aid.)

Overcompliance and Monitoring

Rule 4(4) provides intermediaries a choice, they must either monitor their platforms for select types of illegal content and replace it with red-flag, or alternatively, they can forgo the legal immunity offered by Section 79(1) and risk being held secondarily liable for facilitating the spread of illegal content. Despite the musings of certain commentators, the impact of giving intermediaries such a choice should be obvious. As Jack Balkin notes, this approach ‘raises problems of collateral censorship and digital prior restraint.’ In other words, conditioning legal immunity on the effectiveness of a platform’s monitoring and takedown of illegal content is bound to make platforms overly cautious. They are likely to takedown content that could potentially be illegal but may not necessarily be so if adjudicated upon. As Balkin notes, this phenomenon is inherent to systems of intermediary liability as intermediaries have no incentives to protect the speech of unknown third-party users over their own coffers.

The result is that intermediaries may restrict a user’s post purely to avail the legal immunity provided by Section 79(1) – because they do not want to take the risk that if the post is later found to be illegal and they had failed to take it down, they could be held liable for disseminating it. Crucially, an intermediary may takedown/block speech that a user could tenably claim is constitutionally protected speech, but the user’s claim does not sufficiently alter the risk calculus of the intermediary, which operates under the outsized threat of liability. This problem is aggravated by the oddity that users do not have free speech rights vis-à-vis online platforms (private companies) yet these platforms undeniably constitute part of the digital public sphere.

To avoid this very problem, the European Union expressly prohibits imposing a ‘general monitoring obligation’ on intermediaries to weed out illegal activity on their platforms (see Art. 15 E-Commerce Directive). In the context of requiring intermediaries to weed out copyright infringing material from their platforms, the European Court of Justice ruled as far back as 2012 that a general monitoring obligation was incompatible with the free speech rights of users as it may lead to legal content being caught in the dragnet of a web-filter. The court held that a general monitoring obligation exists where intermediaries had to install filters that: (i) were targeted at user content; (ii) applied indiscriminately to all users; (iii) were installed as a preventive measure; (iv) at the sole expense of the intermediary; and (v) for an unlimited period of time. Needless to say, Rule 4(4) ticks all the boxes of an unlawful general monitoring obligation.

Using Automated Filters

The use of automated systems is not new. Most large social media platforms already voluntarily use a host of automated tools to filter content. However, these are by no means perfect. Between Facebook’s takedown of iconic war photography, to Twitter’s suspension of an Indian lawyer’s account over the use of August Landmesser’s photo defying the Nazi salute – the mistakes of automated systems are well documented. Put simply, at their present state of development, automated systems are poor at evaluating cultural context, irony, or the critical analysis necessary to discern between illegal and legal content. Now consider the types of content Rule 4(4) requires such automated tools to block, ‘explicit or implicit depictions of rape and child sexual abuse’. Automated systems are unlikely to accurately determine the various layers of nuance associated with such content which may range from actual footage of child sex abuse to a critical commentary on sexual violence.

This issue is exponentially aggravated when the second target for automated filters is considered. Content may be taken down under Rule 3(1)(d) for a host of legal and legal but unconstitutional reasons. A court may pass an order to takedown defamatory content under Rule 3(1)(d). The Government may also pass an overbroad order blocking large swathes of content under Rule 3(1)(d). The effect is to create an ever-growing database of illegal content (infinitely more complex than even depictions of rape or child sex abuse) that automated systems must continually weed out. Furthermore, under Rule 3(1)(d) specific URLs are restricted. If an automated system is unable to discern exactly what content on that web-page was illegal, there exists a significant chance of collateral censorship as all content on that originally blocked page may be flagged as illegal and automatically blocked going forward. Finally, there are no safeguards to ensure that once content is no longer restricted under Rule 3(1)(b) (if a court modifies or the government withdraws an order), automated systems are immediately turned off.

Although Rule 4(4) uses the term “proactively”, it is unclear whether SSMI’s will be obligated to restrict content prior to publication even. A filtering system that restricts content prior to publication fundamentally privileges the interests in favour of restraining speech. In other words, it treats all speech identified by the filter as presumptively illegal, contrary to settled free speech doctrine. Lastly, even if the content is published, a user must be given the right to contest the application of the filter before it is taken down. While Rule 4(8) of the Intermediary Guidelines does postulate an ex-ante dispute resolution mechanism, it does not apply to content taken down pursuant to the automatic filtering under Rule 4(4). This is amplified when the relevance of the content is time sensitive, and no content-recipient has been identifiably injured. Famously, in Shreya Singhal, the Supreme Court struck down a requirement that intermediaries takedown content at the behest of a private complaint absent judicial adjudication. Where this leaves a requirement that intermediaries takedown content even prior to a private complaint will have to be seen.

Privacy

The use of automated filters also raises issues surrounding user privacy. Imposing a general monitoring obligation on intermediaries to constantly weed out “illegal” content requires them to conduct an ongoing analysis on all user content posted on their platforms. This exercise is likely to lead to a large dataset that links user profiles to any “illegal” content posted by them. Consider a user profile which repeatedly posted content that violated a ‘depictions of rape’ filter or ‘farmer protests’ filter – the intermediary would be in possession of this information which may: (i) be requisitioned by the government; or (ii) be hacked or leaked and made available to the public devoid of any context.

Parchment Barriers

The Union Government is not unaware of these harms, and Rule 4(4) includes three safeguards aimed at preventing these issues. First, the measures taken by intermediaries must be “proportionate” and must consider the ‘interests of free speech and privacy of users.’ Second, intermediaries shall implement “mechanisms of human oversight … including a periodic review of any automated tools deployed”. Lastly, the intermediary “shall evaluate the automated tools having regard to the accuracy and fairness of such tools, the propensity for bias and discrimination in such tools, and the impact on privacy”.

On paper, these are excellent considerations to have when deciding whether to use automated filtering. However, as regulatory text, it lacks the necessary specificity or enforceability to reign in the dangers of automated systems. None of the three safeguards provide any indication as to when an intermediary is in breach of them. How much oversight and review are necessary to maintain immunity? What is the level of efficacy the automated systems must achieve and what is a tolerable error rate? What forms of data collection for the purposes of such systems are impermissible? Additionally, the Guidelines and the IT Act fail to provide any form of regulatory oversight. There is no dedicated body to police these incredibly complicated systems being unleashed on Indian users, meaning that in the real world – compliance will be almost impossible to ensure on an ongoing basis.

Automated systems are not unregulatable. There exist several real world proposals on how to monitor such systems such as vetting the source code, black boxes, and perhaps most promisingly – ‘tinkering’. This involves systematically testing how such filters respond to sample content on an ongoing basis. However, such solutions require a regulatory framework and committed agencies. The safeguards set out in Rule 4(4) are more akin to parchment barriers – laudable on paper but easily circumventable by both intermediaries and the government in practice.

The so-called safeguards also raise the spectre of a more sinister threat that is now well-established in India’s legal system: that of ‘discriminatory legalism’. Simply put, the legal uncertainty and lack of a dedicated and independent agency to oversee SSMI filtering opens the door for the government to selectively prosecute SSMIs for either violating the filtering obligation or violating the safeguards. For example, if the SSMI does not takedown content unfavourable to the ruling party, a violation of the web-filtering may be alleged, and if the SSMI takes down content favourable to the ruling party, a violation of the safeguards may be alleged.  

Conclusion

This is the first post of a series examining the impact of the new Intermediary Guidelines on the digital public sphere in India. Requiring SSMIs to take an increased role in content moderation of public discourse is not an unreasonable demand. The deregulatory atmosphere in which online intermediaries emerged means that private companies now perform the core democratic function of facilitating public discourse and regulation must recognise this. The large volume of content on these platforms also means that the use of automated filters is inevitable.

However, this set of posts critically examines whether the form of regulation adopted by the Intermediary Guidelines is the best way of ensuring a vibrant digital public sphere. Making intermediaries’ legal immunity conditional on them ceaselessly monitoring content fundamentally alters their risk calculus towards content takedown. The lack of well-conceived regulatory framework to address the risks of automated filtering by social media companies leaves Indian citizens more at the mercy of large tech companies and government interference than ever. A diametrically opposite, but equally feasible approach suggested by Martin Husovec is to fine intermediaries for over-zealously taking down content. This incentivises intermediaries to invest in improving their content removal systems, as opposed to India’s approach which, at best, allows the social cost of lost speech to go unaddressed – and at worst, incentivises intermediaries to takedown more content than ever.

Guest Post: Government Contracts and Constitutional Remedies – A Critique of the Unitech Decision

[This is a guest post by Sholab Arora.]


This article analyses the recent judgment of the Supreme Court in Unitech v. TSIIC [2021 SCC OnLine SC 99], delivered by a bench comprising of Justices D.Y. Chandrachud and M.R. Shah, from the jurisprudential vantage point of the settled principles of law concerning the following two issues:

i) Whether a writ petition is maintainable in cases wherein issues arise purely within the private law domain of contracts even though such contracts have been entered into by a governmental authority; and

ii) Whether in a writ petition, a relief seeking refund of money simpliciter from governmental authorities can be granted.

This article disagrees with, and critiques, the judgment. But before analyzing the ruling in Unitech, it is imperative to have a conceptual understanding of the principles of law governing the aforementioned issues.

Case Law on Writ Jurisdiction and Governmental Contracts: A Conspectus

The issue whether a writ petition is maintainable in cases concerning governmental contracts has had a seemingly chequered history and a perusal of the relevant judgments of the Supreme Court, at a facile level, would reveal that somewhat contradictory and ambiguous positions have been taken therein. However, a uniform and consistent jurisprudential thread can be discerned from the case law, whose inception can be traced to the Constitution Bench judgment in K.N. Guruswamy v. State of Mysore [AIR 1954 SC 592] and appears to be maintained until the Three Judge Bench judgment in State of U.P. v. Sudhir Kumar Singh [2020 SCC OnLine SC 847]. I argue that the ruling in Unitech substantially departs from the settled jurisprudential thread, while purporting to maintain consistency.

In Guruswamy, the Court held that if the procedure of allotment of tender by a governmental authority is not open and transparent, a writ can be granted. In D.F.O., South Kheri v. Ram Sanehi Singh [(1971) 3 SCC 864], the Court, after referring to Guruswamy, held that a writ petition is maintainable if the action challenged is that of a public authority invested with statutory power even though the relief sought arises out of an alleged breach of contract. In Radhakrishna Agarwal v. State of Bihar [(1977) 3 SCC 457], the Court, after referring to Erusian Equipment and Chemicals Ltd. v. State of West Bengal [(1975) 1 SCC 70], held that only those actions of a governmental authority (within the contractual domain) can be analyzed under Article 226 on the touchstone of Article 14 which are at the threshold, or at the time of entering into a contract. After a contract has been entered into and the parties have fully entered the contractual field, a governmental authority is not encumbered with any constitutional obligation. However, even after a contract has been entered into, statutory obligations of a governmental authority can still be enforced.     

Not substantially departing from the principles laid down in the aforementioned judgments, the Court in D.F.O. v. Bishwanath Tea Co. Ltd. [(1981) 3 SCC 238] held that in case an issue complained of is purely breach of contract, even though by a governmental authority, the writ jurisdiction of a High Court cannot be invoked and the only remedy is institution of a suit. Thereafter, in Gujarat State Financial Corp. v. Lotus Hotels (P) Ltd. [(1983) 3 SCC 379], the Court held that a writ of mandamus can be granted against a governmental authority for enforcement of a contractual obligation, if essentially what the petitioner is seeking is enforcement of a statutory duty. In a similar vein, the Court in Bareilly Development Authority v. Ajai Pal Singh [(1989) 2 SCC 116] held that the writ jurisdiction cannot be invoked after a contract has been entered into unless statutory obligations are sought to be enforced, that is to say, a writ petition is maintainable in cases of statutory contracts but not in cases of non-statutory contracts. Pertinently, the Court further held that the actions of a governmental authority cannot be assessed on the touchstone of constitutional provisions after a contract has been entered into, which was even reiterated in Mahabir Auto Stores v. Indian Oil Corporation [(1990) 3 SCC 752].

One can see three jurisprudential principles emerging from the case law development until 1990: first, a writ is not maintainable if the issue complained of is breach of contract simpliciter or if the relief sought is simply for enforcement of contractual obligation; second, a writ is maintainable if the contractual obligations of a governmental authority are ensconced within a larger statutory framework and what the petitioner essentially seeks is enforcement of statutory obligations [statutory contract – non-statutory contract dichotomy]; and third, a writ is maintainable if the petitioner claims that the actions of a governmental authority at the time of entering or not entering into a contract (but not thereafter) are violative of Article 14 [pre-contract – post-contract dichotomy].

In effect, expanding on the last of the aforementioned three principles, the Court in Sterling Computers Ltd. v. M/s M&N Publications Ltd. [(1993) 1 SCC 445] and Tata Cellular v. Union of India [(1994) 6 SCC 651] held that judicial review, on the touchstone of Article 14, has to be restricted to the decision making process concerning entering or not entering into a contract or allotment of tender and the same cannot be extended to the merits of the decision itself (which dictum was reiterated in Michigan Rubber (India) Ltd. v. State of Karnataka [(2012) 8 SCC 216]). Clarifying the second of the aforementioned three principles, the Court in Kerala SEB v. Kurien E. Kalathil [(2000) 6 SCC 293] held that “a contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body” and that in itself will not raise an “issue of public law”. Thereafter, in State of Bihar v. Jain Plastics and Chemicals Ltd. [(2002) 1 SCC 216] and NHAI v. Ganga Enterprises [(2003) 7 SCC 410], the Court reiterated the first of the aforementioned three principles i.e. “writ is not the remedy for enforcing contractual obligations” and “disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India”.

Then came the judgment in ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd. [(2004) 3 SCC 553] which muddied the jurisprudential waters. This judgment misconstrued the rulings in Guruswamy, Ram Sanehi Singh and Lotus Hotels (P) Ltd.  The Court in ABL International Ltd. held that “once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution” and “a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable”. This dictum flies in the teeth of the aforementioned three jurisprudential principles as this dismantles both the statutory contract – non-statutory contract dichotomy and the pre-contract – post-contract dichotomy. This departure from the settled principles of law was continued in Noble Resources v. State of Orissa [(2006) 10 SCC 236]. However, it was clarified in Noble Resources that judicial review will be restrictive in cases of breach of contract unlike matters which are at the threshold of a contract.

Realizing that the ruling in ABL International inverted the settled principles, the Court in Joshi Technologies v. Union of India [(2015) 7 SCC 728] clarified and re-emphasized the pre-ABL International position, although in a new fashion. The Court in Joshi Technologies held as follows:

…in pure contractual matters the extraordinary remedy of writ under Article 226 or Article 32 of the Constitution cannot be invoked. However, in a limited sphere where such remedies are available only when the non-Government contracting party is able to demonstrate that it is a public law remedy which such party seeks to invoke, in contradistinction to the private law remedy simipliciter under the contract…if the matter is governed by a contract, the writ petition is not maintainable since it is a public law remedy and is not available in private law field, for example, where the matter is governed by a non-statutory contract…The Court may not examine the issue unless the action has some public law character attached to it…where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable” [public – private dichotomy].

Pertinently, the Court revives the first of the three jurisprudential principles discussed hereinbefore, and subsumes the second principle i.e. the statutory contract – non-statutory contract dichotomy within the public – private dichotomy. However, the Court departs from the third principle i.e. the pre-contract – post-contract dichotomy. Hence, even if a public law issue is raised subsequent to the formation of a contract whereto a governmental authority is a party and its actions are sought to be challenged, the same can be entertained in a writ petition.

The question arises: When can it be said that a public law issue is raised? The answer is: first, when the concerned contract is a statutory contract; or second, when the petitioner claims violation of Article 14 within the contractual domain. And, violation of Article 14 can only be claimed when the procedural due process is not followed – which is the position floated in Guruswamy (although not in very clear terms) and followed and strengthened in Sterling Computers Ltd., Tata Cellular and Michigan Rubber (India) Ltd. It is important to understand that Joshi Technologies maintains the jurisprudential thread which undergirded the position of law before ABL International. It merely spreads the Article 14 – procedural due process principle throughout the contractual field instead of restricting the same to matters at the threshold of a contract. The position on violation of Article 14 vis-à-vis procedural due process becomes more evident in the Three Judge Bench Judgment of Sudhir Kumar Singh wherein the Court held that Article 14 stood violated because the tender was cancelled by the concerned governmental authority by breaching the audi alteram partem rule.

Case Law on Writ Jurisdiction and Refund of Money: A Conspectus

The case law development on whether in a writ petition, a relief seeking refund of money simpliciter from governmental authorities can be granted has not witnessed such a tumultuous evolution like the previous issue this article dealt with. Rather, the development has been quite certain and consistent. In Burmah Construction Co. v. State of Orissa [AIR 1962 SC 1320], the issue that arose before the Constitution Bench was whether refund of tax unlawfully collected by the State could be sought in a writ petition under Article 226. The Court held that a writ petition is maintainable if the petitioner is essentially enforcing a statutory obligation on the part of the State or an officer of the State to refund the tax illegally collected. If the obligation to refund the tax illegally collected cannot be traced to a statutory provision, then the only remedy left is to file a suit. In Suganmal v. State of M.P. [AIR 1965 SC 1740], the Constitution Bench held that a writ petition solely for refund of money is not maintainable, however, the same can be entertained when refund of money is sought as a consequential relief. For instance, when the petitioner challenges an assessment order and succeeds. In such a case, the Writ Court can grant refund of money as a consequential relief. This ruling was followed in Salonah Tea Co. Ltd. v. Suptd. of Taxes [(1988) 1 SCC 401], U.P. Pollution Control Board v. Kanoria Industrial Ltd. [(2001) 2 SCC 549] and Godavari Sugar Mills Ltd. v. State of Maharashtra [(2011) 2 SCC 439] wherein the Court reiterated the “distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment etc.” Even ABL International reiterates this principle of law.

There is, however, one judgment manifesting a departure from this settled principle of law i.e. Popatrao Vyankatrao Patil v. State of Maharashtra [Civil Appeal No. 1600 / 2020 (SC), Judgment dt. 14.02.2020]. In Popatrao, the appellant was the highest bidder in a public auction concerning excavation of a sand block. In pursuance of the allotment of the tender, the appellant submitted a sum of money with the government treasury, despite which, he was not put in possession of the concerned sand block. After trying his luck with the governmental authorities, the appellant filed a writ petition before the High Court seeking refund of the money deposited. The High Court refused to entertain the writ petition and relegated the appellant to a suit. On appeal, the Supreme Court held that the action of the State smacked of arbitrariness and was violative of Article 14, and granted the relief of refund. There are two issues with this judgment: first, the Court fails to realize that violation of Article 14 only arises within the contractual field when the procedural due process is not followed. Mere non-refund of money will not give rise to the same; and second, the Court ignores the settled principle of law that refund of money can only be directed in a writ petition when the same is sought as a consequential relief. Popatrao can only be considered as an aberration which gives rise to another aberration viz. Unitech.

Unitech v. TSIIC: An Analysis

In Unitech, the facts were that Unitech Ltd. was awarded the tender to develop, design and construct an integrated township project / multi services aerospace park on a particular land of about 350 acres [“subject land”] by Andhra Pradesh Industrial Infrastructure Corporation [“APIIC”], the predecessor-in-interest of Telangana State Industrial Infrastructure Corporation [“TSIIC”]. In pursuance of the allotment of the tender, Unitech Ltd. paid a sum of Rs. 165 crores. After the allotment of the tender, in a different litigation, it was held that the title and ownership of the subject land did not vest in the Government of Andhra Pradesh. Hence, the very foundation of the contract between Unitech Ltd. and APIIC / TPIIC stood eroded and the contract stood frustrated. As a result, Unitech Ltd. sought refund of the aforementioned sum of money, along with interest, from APIIC and TPIIC but in vain.

Thereafter, Unitech Ltd. invoked Article 32 jurisdiction seeking refund of money [W.P. (C) 302 / 2017]. The Court ordered that it was “not inclined to entertain the writ petition under Article 32 of the Constitution. However, the petitioners, if so advised, may approach the High Court under Article 226 of the Constitution” [Order dt. 01.05.2017]. Unitech Ltd. preferred a writ petition under Article 226 before the High Court, and both the Single Judge and the Division Bench granted the relief of refund, although differing on the interest amount. The matter approached the Supreme Court. Strangely, the Judgment records, the State of Telangana and TSIIC did not raise any objection as to maintainability of the writ petition under Article 226 or the entitlement of Unitech Ltd. to seek refund of money under Article 226. Be that as it may, the Judgment conducts an academic analysis on the issue of maintainability. The Court relies on ABL International, Sudhir Kumar Singh and Popatrao to hold that the writ petition in the instant case was maintainable and the High Court had rightly granted the relief of refund of money under Article 226.

To create a semblance of compliance with the public – private dichotomy, the Court’s purported justification is that there is a violation of Article 14 as the action of the State is arbitrary / unfair since “TSIIC, a state instrumentality, has not just reneged on its contractual obligation, but hoarded the refund of the principal and interest…” As we have seen, Article 14 violation has been restricted to cases where procedural due process was not followed by a governmental authority within the contractual domain. The same was the case in Sudhir Kumar Singh. The Court’s reliance on ABL International is misplaced as the pre-ABL International substantially stood revived in Joshi Technologies. Moreover, Popatrao is a mere aberration. If there was no allegation of non-compliance of procedural due process and the contract concerned was not a statutory contract, it is difficult to comprehend why the writ petition was held to be maintainable. Even if the Judgment is considered justifiable in expanding the scope of Article 14 violation in contractual matters, it clearly flies in the teeth of the settled principle of law that refund of money can only be claimed as a consequential relief in a writ petition, which was clearly not the case in Unitech. Therefore, it is humbly submitted that Unitech does not state the correct position of law and relies on the aberrational judgments, and as a consequence, muddies the jurisprudence on the subject.