Category Archives: Miscellaneous

ICLP Turns Four :: Some Thoughts on the Office of the Chief Justice and Other Supreme Court Miscellany

The Indian Constitutional Law and Philosophy blog turns four years old today. The last four years have been fairly turbulent: there have been important two-judge bench decisions on diverse facets of civil rights (freedom of speech and expression, equality and the right to vote, homosexuality, and many more); Constitution bench judgments on the judges appointments’ and the basic structure, the freedom of trade, and on the death penalty; seven-judge bench decisions that have upended the jurisprudence on ordinances and have reaffirmed the jurisprudence on electoral speech; a nine-judge bench decision on inter-state taxation (with another nine-judge bench decision on privacy due by the end of the month); a lot of Article 142; and some interesting contributions from the High Courts. On this blog, the attempt has been – and always will be – to analyse, discuss and criticise our courts’ constitutional jurisprudence in a straightforward, forthright and adversarial manner, and with as little technical jargon as possible. The idea is both to hold our justices to account, and to create a forum for open and public discussion about the Constitution.

I have used previous blog anniversaries to discuss issues at the interface of constitutional practice and scholarship in India (for example, the need for doctrinal engagement and problems of access). My concerns arise from my own position at this interface: for three out of four years of the blog’s existence, I have been a practicing lawyer in Delhi, in different forums. From November 2016, I have been at the Supreme Court, and have had a degree of exposure to some of its inner workings.

It is from that perspective that I want to highlight two issues today, which need greater scholarly and public scrutiny than they otherwise get. The first is the Office of the Chief Justice. Although it is rarely discussed, the position of the Chief Justice is one that has tremendous power, and that power flows from two things: The CJI’s discretion in “listing” cases, and the CJI’s discretion in constituting the roster of the Supreme Court.

Let’s take the second issue first. For the most part, the Supreme Court sits in benches of two judges (at present, there are thirteen functioning courtrooms in the Supreme Court – thirteen benches). In most of these benches, the senior judge is rarely crossed by his junior colleague, so effectively, these are one-judge benches. Judges have their individual proclivities when it comes to almost all areas of law: one judge might tend to be pro-labour, another judge might always vote to uphold the death penalty, a third judge might be very skeptical about claims brought to court by big builders. It therefore matters tremendously how the roster is arranged. Readers will recall, for example, that period in the mid-2000s where Justices Sinha and Pasayat were virtually writing duelling judgments on the death penalty – Justice Sinha would commute, Justice Pasayat would affirm; a convict’s fate, often, would depend upon whether his case went up before the former or the latter. Consequently, how the Chief Justice arranges the roster – and what kinds of matters go before which bench – needs to be scrutinised in detail. There needs to be far greater detail paid to judges’ ideological predilections over the course of their judicial career, and how that maps on to the kinds of cases they are assigned to here.

This issue acquires even greater significance in constitutional issues, where larger benches sit. It is the Chief Justice who decides the composition of five-judge, seven-judge or nine-judge benches; it is he who picks, out of the nearly thirty-odd judges on the Court (at any given time), which five, or seven, or nine, will be sitting on a bench. Again, as an institutional issue, this gives whoever occupies the position of the Chief Justice tremendous power to influence the outcome of a decision simply through the act of picking a bench. I am not alleging bad faith, or even saying that this is a bad thing (although, in my view, the fairest outcome would be through a draw of lots); however, once again, it needs to be scrutinised. Who has the Chief Justice picked to hear an important constitutional case about civil liberties? What is the prior record of these judges on the point? Do they have any experience adjudicating such cases before? And so on.

The second power of the Chief Justice is the power to list cases. By now, everyone knows about the huge problems of backlog that are faced by the Supreme Court (and all other courts). This entails a massive queue for cases to be heard: if “leave” is granted in a particular case (see below), it will likely come up for hearing five or six years later. The queue, however, can be broken through an oral “mentioning” before the Chief Justice: at 10 30 in the morning, before hearings start, lawyers line up in Court No. 1 to “mention” a matter before the CJI; in many cases, the “mentioning” is a request for an “early listing”, because of some urgency. The CJI has absolute discretion to allow or deny a mentioning request for an early hearing, just as he has an absolute discretion in deciding when larger benches are to assemble (along with their composition).

The issue, of course, is that certain cases are simply more urgent than others (it’s also important to recall that when it was established, the Supreme Court was primarily expected to function as a constitutional court; constitutional cases now occupy a negligible part of its docket). Through the course of the last year, I’ve chronicled, in particular, the career of two cases where time has been of particular essence (Aadhaar, and the Delhi Govt vs Union of India case). There are cases which, if not heard in good time, effectively entail that one sides wins and the other side loses (The Delhi Govt vs Union of India case is a classic example of this). In such a situation, the CJI’s decision to accept or reject a mentioning request for an early hearing is no longer innocuous: inevitably, it acquires a political dimension. Consequently, it is important to scrutinise what kinds of cases that CJI allows for an early hearing, and what kinds of cases he does not, because the ramifications of delay in our system effectively, at times, amount to deciding a case in favour of one side without ever having a hearing. “Absolute discretion”, therefore, is not good enough.

The issue of how delays end up affecting the outcome of a case brings me to the second point I want to write about: granting leave and interim orders. Let me explain the meaning of “granting leave”. When the Supreme Court was established, one of its functions was to hear appeals from High Court decisions. Not all appeals, however, but only those where there was a substantial and important question of law, or where different High Courts were in disagreement – in short, cases that deserved to be heard by the highest, constitutional court. In most cases, the High Court, when deciding such a case, would issue a “certificate of leave to appeal” to the Supreme Court; i.e., the High Court would itself say that there was an important question of law involved, which the Supreme Court should resolve (if you read some of the old SC cases from the 1950s, you can still see this in the opening line of the judgment). If the High Court did not say so, however, the losing party before the High Court could still petition the Supreme Court for “special leave to appeal” – i.e., convince the Supreme Court that the High Court was mistaken in refusing to grant a certificate of appeal. “SLPs” were supposed to be allowed only in exceptional circumstances (and that is still the position in the UK’s judicial structure). When the Court did allow the SLP, it “granted leave” to appeal. The SLP (Special Leave Petition) was then “admitted”, and became an “appeal”, which would be heard by the SC as such.

As has been chronicled extensively, the SC’s SLP jurisdiction has now snowballed into monstrous proportions (the SC sets apart two days out of the five day week – Monday and Friday – just to hear SLPs). More importantly, however, the SC now disposes off SLPs in two ways: on the first date, it may “issue notice” to the other side, then hear the SLP as an SLP on a fixed date, and dispose it off. Or it may “grant leave” (in the traditional sense); in such a situation, the SLP is converted into an appeal, and it then goes into the five-or-six-year-long queue of appeals. Consequently, in practice, if a bench “grants leave” in a case, it is parking away the case for a few years.

Consequently, the decision to grant leave assumes tremendous consequence, because if the case is not going to be heard for a few years, then during that time, the High Court judgment will continue to hold the field (unless the SC grants a stay); as discussed above, in many cases, this effectively amounts to deciding in favour of whoever is in a better position at the time the case came to Court. However, this position would be reversed entirely if a stay was granted. The High Court’s judgment would cease to operate until the SC decided the case, and the winner in the High Court would suddenly become the loser.

There are two recent examples of this in the domain of constitutional law. In the middle of 2016, the High Court of Patna struck down the State of Bihar’s prohibition law in an extensive and closely-reasoned judgment (the judgment was covered on this blog). The case came before the Supreme Court, where it was promptly stayed (it is reported that Justice Dipak Misra observed that “liquor and fundamental rights cannot go together” while staying the judgment). I have not been able to track down what happened to the case, but there is something particularly troublesome about a detailed, constitutional judgment of the High Court, which was argued at length before that forum, being effectively rendered a nullity in a two-minute hearing at the SC. The other example is what the Supreme Court did with a Gujarat High Court judgment, which had held that denial of tex exemption to a film about homosexuality was discriminatory. On appeal, the SC granted leave and stayed the High Court judgment, meaning that the film lost its tax exemption. As the Indian Express correctly noted at the time, the SC effectively “shelved” the film.

What these cases show us is that “granting leave” and “interim stay” – two legal mechanisms that are supposed to be uncontroversial issues of procedure – are now substantive issues: because of the massive backlog and years-long queue at the SC, these “procedural” decisions often effectively decide peoples’ rights. And this happens without a full hearing or a reasoned judgment (there exists a detailed jurisprudence dealing with when interim stays should be granted, but in my time at the SC, I have rarely – if ever – seen judges invoke it).

My point, therefore, is this: as an institution, the Supreme Court cannot be effectively studied as you would study other constitutional courts: through a close reading of decided cases, legal doctrine, and transcripts of written and oral arguments (recall that transcripts aren’t even available for our Supreme Court). The Indian Supreme Court has to be studied through the actions of the Chief Justice in listing and refusing to list, through the actions of the Chief Justice in constituting benches, through the movement or non-movement of the queue of pending cases, and through judges’ one-line orders granting leave and staying, or refusing to do so.

And this leads to a strange situation: if you’re a traditional legal scholar, working at a university, you will simply be unable to do this. You have to be in Court and a witness to things actually happening to even know what is going on (because much of this is never recorded in the final orders). On the other hand, if you’re in Court every day from 10 30 to 4, a as a practicing lawyer, where will you ever have the time to write high quality legal scholarship?

If there is an answer, I haven’t found it yet.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 20(3) provides:

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

The requirements of Section 20 are:

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

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

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

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

(Malavika is a Delhi-based advocate)

 

 

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New Blog: Criminal Law, Procedure and Evidence

For readers interested in criminal law, procedure and evidence in India, a fascinating set of themes, “The Proof of Guilt” is a new blog dedicated to these issues. The last few posts examine the Uber controversy, the landmark three-judge bench decision on the scope of S. 138 of the Negotiable Instruments Act, and the recent ‘Terror Boat’ incident. Do head on over there and check it out!

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Guest Post: The Supreme Court Rules on the Powers of the CAG

(This is a guest post by Manish)

Earlier this week, Justice Radhakrishnan of the Supreme Court delivered a judgment with far-reaching consequences: In Association of Unified Tele Services Providers v. Union of India (sitting with Vikramajit Sen, J.), he upheld the right of the Comptroller and Auditor General of India (CAG) to audit the books of private telecom companies.

The matter involved two sets of cases that were heard together as they involved similar facts and questions of law. A brief overview of the law and facts (described in greater detail in paragraphs 6-10 of the judgment) is necessary to provide some context. Under the Indian Telegraph Act, 1885, the Department of Telecommunications of the  Government of India (DoT) issues licenses to private companies (referred to in this piece as “telecom service providers” or “TSPs”)  to provide mobile telephony services in the country, for which the telecom service providers pay a license fee to DoT. The license agreement contains a number of terms and conditions that the licensee (the TSP) is subject to. Among these are accounting requirements which are spelt out in Paragraph 22. Of particular interest is clause 22.3(a), which empowers the licensor (i.e. DoT) or the Telecom Regulatory Authority of India (TRAI) to call for or examine any books of accounts of the licensee at any time without assigning any reason therefor, and places an obligation on the licensee to supply these documents. Clause 22.5 and 22.6 respectively empower the DoT to get an audit and a special audit of the licensee’s accounts carried out. We will return to the significance of these clauses later.

In January 2010, TRAI issued a notice to private telecom service providers, directing them to submit books of accounts for inspection by the CAG under Rule 5 of the Telecom Regulatory Authority of India, Service Providers (Maintenance of Books of Accounts and other Documents) Rules, 2002. Rule 5 requires TSPs to produce books of accounts, documents and related statements and information to TRAI for enabling an audit by the CAG under s. 16 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971 (“CAG Act”).

Both the notice as well as Rule 5 were challenged in writ petitions filed by the Association of Unified Tele Services Providers (AUTSP), an industry body comprising various Indian TSPs, as being in violation of section 16 of the  CAG Act and Article 149 of the Constitution of India.

Meanwhile, in a separate context, and in furtherance of the notice issued by TRAI, the DoT in March 2010 issued a notice to the telecom service providers directing them to provide details of their books of accounts for the previous three years to the CAG for audit. Following this, the Director General of Audit, Post and Telecommunication issued another notice in May 2010, requesting the telecom service providers to provide the required information. The telecom service providers challenged these notices before the Telecom Telecom Disputes Settlement and Appellate Tribunal (TDSAT) as being in violation of the terms of the license agreement. The TDSAT allowed the challenge and quashed the notices, holding that under Clause 22.5 of the license agreement, an audit was permissible only if the DoT were to form an opinion that the accounts submitted by the service providers were inaccurate and misleading, which was not done in the instant case. The DoT filed appeals before the Supreme Court, which were clubbed with the writ petitions filed by AUTSP and heard together.

The Supreme Court dismissed the writ petitions and allowed the appeals, grounding its reasoning in the powers of the CAG under the Constitution. In order to appreciate the reasoning of the Court, a brief overview of these powers is in order (discussed in paras 33-36 of the judgment). The office of the Comptroller and Auditor General of India derives its power from a relatively lesser-known provision of the Constitution – Article 149, the relevant portion of which reads as follows:

 

The Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament (…)” [emphasis supplied]

 

In furtherance of this Article, Parliament in 1971 enacted the CAG Act, which outlines the CAG’s powers, functions and the procedure for the exercise thereof in detail. Section 16 of the CAG Act specifically deals with the CAG’s functions in relation to the Consolidated Fund of India (CFI):

 

It shall be the duty of the Comptroller and Auditor-General to audit all receipts which are payable into the Consolidated Fund of India and of each State and of each Union territory having a Legislative Assembly and to satisfy himself that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue and are being duly observed and to make for this purpose such examination of the accounts as he thinks fit and report thereon.

 

One of the objections raised by AUTSP was regarding the scope of the CAG’s powers under Article 149. It was strenuously argued that the words “any other authority or body” had to be read ejusdem generis with the preceding words “of the Union and of the States”, and could therefore only be intended to cover Government authorities or bodies, thus excluding private companies from the scope of the CAG’s audits (much like, for instance, in the case of Article 12, where the term “other authorities”, in the context of fundamental rights obligations, has been read narrowly to cover only State-like entities). In a great example of judicial craftsmanship, Radhakrishnan, J. uses Article 266 of the Constitution to reject AUTSP’s argument, holding that the license fees paid by the telecom service providers would accrue to the CFI and thus be amenable to audit by the CAG under Article 149:

 

Article 266 says, all the public moneys received by or on behalf of the Government of India shall be credited to CFI. CAG can carry out examination into the economy, efficacy and effectiveness with which the Union of India has used its resources, and whether it has realized the entire licencee fee, spectrum charges and also whether the Union of India has correctly carried out the audit under Clauses 22.5 and 22.6 of UAS Licence Agreement. CAG’s examination of the accounts of the Service Providers in a Revenue Sharing Contract is extremely important to ascertain whether there is an unlawful gain to the Service Provider and an unlawful loss to the Union of India, because the revenue generated out of that has to be credited to the Consolidated Fund of India.”         (para 41)

 

Having thus firmly established the CAG’s competence to audit private firms in cases involving revenue-sharing arrangements with the Government, the Court then easily dismisses the challenge to the TRAI notice and Rule 5, holding them to be in consonance with the CAG Act and Article 149:

 

Rule 5 obliges every service provider to produce all such books of accounts or documents referred to in sub-rule (1) of Rule 3 so that the CAG can carry out audit entrusted to it by virtue of the powers conferred under Article 149 read with Section 16 of Act of 1971. Rule 5 only manifests conferment of powers upon CAG in relation to the accounts of bodies in the nature of private service providers which we have already found is consistent with Article 149 of the Constitution.”          (para 49)

 

The Court then proceeds to set aside the order of the TDSAT, which it holds was incorrectly premised on the assumption that the CAG audit was being carried out in furtherance of Clause 22.5 of the license agreement. It holds that the impugned notices were in fact issued in furtherance of the power in Clause 22.3 of the license agreement, which did not require the DoT to form any opinion or assign any reasons, and were hence not bad in law. The net effect is that the telecom service providers are now required to comply with the notices issued by TRAI and DoT and hand over their books of account to the CAG for inspection.

The implications of the judgment are significant. Every project or service carried out under public-private partnership, involving a revenue sharing model, will now be  subject to a CAG audit. There have been previous examples of CAG audits and inspections of private companies’ books accounts: most prominent from recent memory are the power distribution companies in Delhi and Reliance Industries’ Krishna-Godavari basin gas exploration, but these were carried out in a haze of legality with the threat of litigation looming large. With this authoritative pronouncement, the Supreme Court has cleared the way for large-scale audits of such projects.

More interesting is the subtle, but significant, shift of the power balance in the Constitutional administrative machinery that the Supreme Court has advanced through this judgment. In para 34, Radhakrishnan, J. declares the CAG’s powers under the Constitution to be a part of its basic structure, thereby preventing the Government from taking away these powers by legislation or Constitutional amendment:

 

Duties and powers conferred by the Constitution on the CAG under Article 149 cannot be taken away by the Parliament, being the basic structure of our Constitution (…)”

 

The Supreme Court seems to be implying doubts about Parliament’s ability to carry out effective and corruption-free governance, continuing its trend from recent years where it has taken the initiative to oversee investigations into scams and clean up electoral politics, simultaneously been pushing for a greater role for Constitutional authorities like the Election Commission and the CAG. The thread of good governance and public trust runs clearly through the judgment. Right at the beginning (para 3) Radhakrishnan, J. quotes from the 2G judgment and the Presidential Reference on allocation of spectrum:

 

We have to examine the above-mentioned issue in the light of the various constitutional, statutory and licensing provisions, bearing in mind the fact that we are dealing with “spectrum”, which is universally treated as a scarce finite and renewable natural resource, the intrinsic utility of that natural resource has been elaborately considered by this Court in Centre for Public Interest Litigation and others v. Union of India (…) and in (…) Natural Resources Allocation, in Re: Special Reference No.1 of 2012 (…). This Court reiterated that the spectrum as a natural resource belongs to the people, though State legally owns it on behalf of its people because State benefits immensely from its value.

 

The Court returns to the theme of the State as custodian, whether of natural resources or public funds, at several points in the judgment. However, by empowering itself and other Constitutional authorities to be keepers of the public trust, the Supreme Court is shifting the delicate balance of power that exists between different institutions of government. Whether this will ensure better governance in the longer run, only time will tell.

(Manish is a legal researcher based in Delhi. The views expressed are his own.)

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