Coronavirus and the Constitution – XXIX: Sub-National Debt & Art. 293(4) – Some Constitutional Concerns [Guest Post]

[This is a Guest Post by Harshil Watson.]

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Recently, the Finance Minister, while declaring the final tranche of the Covid-19 economic package, acceded to the request of the States, and raised their borrowing limit to 5 per cent of Gross State Domestic Product (“GSDP”), up from 3 per cent before, fixed by the Union Government (hereinafter referred to as “Center”) under the Fiscal Responsibility and Budget Management Act, 2005. In itself, this is a welcome move. Allowing States to borrow an additional Rs 4.28 lakh crore this year will provide them with the resources to fight COVID-19 and perhaps, help them maintain their budgeted expenditure allocations. However, this increment comes with certain attached conditions.

As per the announcement, the first tranche of additional borrowings from the Center amounting to 0.5 per cent of GSDP will be unconditional. However, the next 1 per cent of borrowing will be allowed in four tranches, linked to reforms in the areas of ease of doing business, implementation of the Center’s ‘one nation one ration card’ scheme, implementation of power sector reforms to be brought in through Electricity Amendment Act, 2020, and working towards increasing revenues of urban local bodies. States will be allowed to borrow the final tranche of an additional 0.5 per cent only if they ‘completely’ achieve the targets in three of the four reform areas.

The two types of conditions imposed, out of which one is tied to specific purposes and the other is an implementation-based performance condition, form the subject matter of this post.

Concept of Borrowing under the Constitution

293. Borrowing by States

(1) Subject to the provisions of this article, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits, if any, as may be so fixed

(2) The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under Article 292 are not exceeded, give guarantees in respect of loans raised by any State, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India

(3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government

(4) A consent under clause ( 3 ) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.”

While States have the authority to borrow under Article 293 (1) of the Constitution, the Center exercises control through Article 293 (3), which requires state governments that are indebted to the Centre to seek its consent before borrowing. While giving such consent, the centre may impose conditions as it may deem fit under Article 293(4). As all the States owe money to the Centre, in effect, today no State can raise loan without the Centre’s consent. The States are also debarred from raising any loan out of India. Foreign loans can be raised exclusively by the Centre.

The imposition of the above-mentioned performance conditions through Article 293(4) by the Government is unprecedented. On a perusal of previous reports of the Finance Commissions (e.g. here and here), one may note that the Finance Commissions, while deciding the quantum of the loans to be granted to the States, have always taken under consideration only financial factors like debt-GSDP ratio, debt to revenue ratio, fiscal deficit etc. Thus, it is only the first time that the Government, without any such recommendation of the Finance Commission, has decided to impose implementation-based performance goals.

Therefore, the unprecedented use of Article 293(4), clubbed with its widely worded language, poses various Constitutional concerns such as:

1. By directing the States to implement Central schemes, whether the Center has confused its financial power under Art. 293, with its administrative power of control under Art. 256?
2. By tying the borrowed funds of the State to specific purposes, whether the Center has encroached upon the financial autonomy of the States, and in effect disturbed the Federal character of the Constitution?
3. By coercing States into implementing Central schemes, whether the Center has violated the inherent limitation of ‘consent’ and ‘cooperation’ in Art. 293?

Colourable Exercise of Power under Article 293(4)

With respect to the first question, I argue that power under 293(4) to impose conditions is purely a financial power of the Center, which exists by virtue of it being an existing lender, and this financial power must not be confused with its general power of control over the States under Art. 256.

The underlying premise of the power under Art. 293(4) is the outstanding debts of the State. This suggests that a possible purpose of this provision is to protect the rights of the Centre in its capacity as a creditor. Apart from this, a broader purpose of creating a mechanism to facilitate macroeconomic stability may also be discernible, as State indebtedness negatively affects general government debt, i.e. the fiscal health of the nation as a whole. Since clause (4) enables the Central Government to impose conditions only when granting consent under clause (3), reading these two clauses together suggests that such conditions should also be limited to questions of State indebtedness and macroeconomic stability. In other words, conditions which do not pertain to State indebtedness and which have no fiscal stabilising effect would be beyond the ambit of clause (4).

Article 256: Obligation of States and the Union

The executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that State, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.

If we were to also assume power under Art. 293(4) to mean an administrative power of control, it couldn’t have been the intention of the makers of the Constitution to restrict this power only to States with outstanding loans. This would lead to an absurd conclusion that only the States with outstanding loans are to implement the central schemes and not the others who have no pending debts. There exists no rational connection between outstanding debts and implementation of central schemes. It is only because all the States today are indebted to the Union, that the Centre has misunderstood this limited power of a lender with its administrative power of control under Art. 256.

Federalism and Financial Autonomy of the States

By now, it has been held by numerous judgements that the Courts should not adopt an approach which has the effect of or tends to have the effect of whittling down the powers reserved to the States. In light of this, it may be possible to argue that conditions imposed under clause (4) of Article 293 should not impinge on the federal character of the Constitution, beyond what is strictly required for the purposes of this provision.

I argue that the Center, by directing state spending towards specific central projects, has encroached upon the financial autonomy of the States and has used this power to get a backdoor entry into domains exclusively reserved for the States. Under Art. 266, money received through loans by Central Government, until it is repaid, forms part of the State Consolidated Fund and the States have the autonomy to determine their spending priority. Along with loans, Central assistance also flows to the States through grants under Art. 282.

Art. 282: Expenditure defrayable by the Union or a State out of its revenues The Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or the Legislature of the State, as the case may be, may make laws

As these are ‘grants’ by the centre to the States, the States are under no obligation to return these sums. Therefore, essentially being the Center’s money, these are also linked to specific purposes and often used to incentivize States to implement central schemes. However, this is not the case with loans under Art. 293. Because it is borrowed based on State’s needs and because it forms part of the State Consolidated Fund, States have significant autonomy over its spending and any law/exercise of any executive power of the Center, which takes away this autonomy of the State, is antithetical to the principle of Federalism.

For instance, one of the conditions imposed in the current scenario is the reforms to be undertaken in the domain of ease of doing business. Ease of doing business is an ideological condition – what if Kerala, as a communist-run State, does not want to prioritise business? Can the centre essentially impose an economic model under the guise of Article 293? Indeed, the Kerala government may have different priorities for allocating resources. Such conditions, then, conflict with the principle that States have the freedom to determine their spending priorities.

Demarche from Cooperative Federalism to Coercive Federalism

While the Center has, through its powers under Art. 293(4), encroached upon the domain exclusively reserved for the States, the fact that the Center has chosen to practically coerce States in implementing the Central schemes is a greater problem in the Indian Federal landscape. ‘Cooperative Federalism’ may not be a Constitutionally enforceable obligation, but is certainly a principle inherent in the Federal idea and also fundamental to the successful operation of the federation in practice, particularly where the vertical fiscal imbalance is such a dominating feature of that landscape.

The idea of ‘cooperative federalism’ is something which has also now been acknowledged by the Indian Courts in various judgements. (See Jindal Stainless). More so, the Court in the State of Rajasthan, notes the observation of Granville Austin wherein he is of the view that “the Constitution of India was perhaps the first constituent body to embrace from the start what A.H. Birch and others have called “cooperative federalism”. 

‘Cooperative Federalism’, as the Constituent Assembly debates suggest, becomes more important particularly in the context of Art. 293. Article 293 was picked up from Section 163 of the Government of India Act, 1935. Interestingly, that section under the Act had a protective clause, which went as:

(4) A consent required by the last preceding subsection shall not be unreasonably withheld, nor shall the Federation refuse, if sufficient cause is shown, to make a loan to, or to give a guarantee in respect of a loan raised by, a Province, or seek to impose in respect of any of the matters aforesaid any condition which is unreasonable.

While the whole section was picked as it is, this particular subsection was dropped. The only reason that could be gathered on a reading of the Constituent Assembly Debates on Draft Article 269, is, that the adoption of a Constitution brought with itself a paradigm shift from coercive Federalism to cooperative Federalism. On one will notice a sense of security amongst the members and a great trust in the concept of cooperative Federalism. M. Ananthasayanam Ayyangar, in regards to draft Article 268 and 269 remarked:

In the present Government of India Act, there is a clause that this consent ought not to be delayed or unreasonably delayed. There is no such provision in this article, because it is thought such a provision is not necessary. Under the Government of India Act, it was thought there will be a different agency who will not be, a national of this country, in charge of the administration. But now with national governments in the provinces and a national government at the Centre, it is felt that such a provision is not necessary. I hope articles 268 and 269 will meet the situation.

Similarly, Granville Austin in his book “Constitution of India – Cornerstone of a Nation” (9^th ed. 2005 at p.233), has stated thus: —

When this Article was under consideration, seven out of the nine provinces had outstanding loans. Yet, the provincial governments evidently did not believe that this put them unduly in the grip of the Union and did not oppose either the Article or the proviso. Nor, it seems, has the working of this Article during the last decades been detrimental to the interests of the States.

 

A structuralist reading of the Article suggests that the decision of the members to not include a saving provision like S. 163(4) in the present-day Article 293, on the basis of the coming into being of a cooperative federalist structure, must be taken into account while interpreting the provisions of this Article. The fact that the States were denied foreign borrowing, making the Center their only resort, was accompanied by an inherent expectation that such a dominant position of the Center will not be used to coerce States into implementing Central reforms.

In light of this historical trajectory, the inherent limitation of cooperative federalism must be taken into account in reaching the conclusion that the Center cannot legally compel the States into prioritising their spending to Central reforms, as this would amount to practical coercion.

Way Forward

Unlike Art. 275, wherein the Central Government shall make grants-in-aid to States as per Finance Commission’s recommendations, there is no statutory duty under Art. 293 to consult any specialized body before granting loans or imposing conditions. Conventionally, on the discretion of the Union, the quantum of borrowing and the conditions to be imposed forms part of the Terms of Reference (ToR) to the Finance Commission. However, as this happens only on the discretion of the Union, in the present case, the conditions imposed are without any recommendations from the Finance Commission. Thus, this must pave way for establishment of something on lines of Loan Council, like in foreign jurisdictions.

In this regard, Australia’s efforts in adopting a cooperative fiscal mechanism by establishing an Australian Loan Council are worth noting. The Council meets once a year and consists of the Prime Ministers of the Centre and the States. Each State has one vote, but the Centre has two and a casting vote. All loans are arranged by the Centre and then distributed among the various governments in accordance with an agreed formula. This arrangement has reduced competition among the governments for funds and thus loans can now be arranged on more advantageous terms than was possible before

Conclusion

Hence, based on the above arguments, reading of Article 293 suggests that the conditions imposed by the Centre will not fit into the limited ambit of Article 293(4).

Whether or not the Supreme Court ever gets an opportunity to visit the interpretation of powers under Article 293(4) is yet to be seen. In the event that it does, there may be cause to speculate that the Court may uphold the older regime of strong financial intergovernmental relations between the Center and the States in the light of the robust federal structure – we claim to possess.

The Supreme Court’s Madhya Pradesh Government Formation Judgment – V: A Rejoinder [Guest Post]

[Editor’s Note: Justice is an indivisible concept. We cannot, therefore, discuss contemporary Supreme Court judgments without also acknowledging the Court’s failure – at an institutional level – to do justice in the case involving sexual harassment allegations against a former Chief Justice. This editorial caveat will remain in place for all future posts on this blog dealing with the Supreme Court, until there is a material change in circumstances.]

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[This is the fifth post in the series examining the Supreme Court’s judgment in Shivraj Singh Chouhan v Speaker, Legislative Assembly of Madhya Pradesh and Ors. This is a guest post by Anmol Jain.]

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We must be careful to remember that the desirability of a particular rule of law, should not in any event by confused with the question of existence of the same, and constitutional morality should never be replaced by political morality, in deciding what the Constitution mandates.

-Shrimanth Balasaheb Patil v. Hon’ble Speaker, Karnataka Legislative Assembly

 

On the Constituent Assembly Debates

In my previous post, I had argued that the action of the Governor in the Madhya Pradesh government formation case, directing the Chief Minister to hold a trust vote in the Assembly, was unjustified. Based on the two responses on my article (here and here), I stand corrected that Article 163 is not the source of the power of the Governor, but that it merely guides the exercise of power vested, for the present matter, under Articles 174 r/w 175(2) of the Constitution. However, while maintaining my argument, I shall attempt to further substantiate it in this post.

Let’s start with the interpretation of the contentious part of Article 163. It states that:

There shall be a council of Ministers with the chief Minister at the head to aid and advise the Governor in the exercise of his functions, except in so far as he is by or under this constitution required to exercise his functions or any of them in his discretion.

Relying on the Constituent Assembly debates, I had argued that the Governor can act in his discretion only in those scenarios where the Constitution specifically empowers her. In the general opinion of the Assembly – also shared by Dr. Ambedkar and T.T. Krishnamachari – these were set out by Articles 175 and 188 of the Draft Constitution. And Dr. Ambedkar had indeed stated on 1^st June 1949 that:

I personally myself would be quite willing to amend the last portion of clause (1) of Article 143 if I knew at this stage what are the provisions that this Constituent Assembly proposes to make with regard to the vesting of the Governor with discretionary power. My difficulty is that we have not yet come either to Article 175 or 188 nor have we exhausted all the possibilities of other provisions being made, vesting the Governor with discretionary power. If I knew, I would very readily agree to amend Article 143 and to mention the specific Article, but cannot be done now.

Nivedhitha points out the fact that these two provisions were subsequently amended by the Constituent Assembly to remove the discretionary power of the Governor, and despite Mr. Kamath’s comment on the 3^rd of August recalling the Assembly that it must now delete the clause granting discretionary powers upon the Governor, the clause sustained in the Constitution. And thus, she argues:

Therefore, the final text of the Constitution provided for complete ministerial responsibility. It is thus clear that the debates and the final text of Article 163 have no nexus between them.

I argue that there is a nexus between the debates and the final draft. The central argument that was mooted and widely accepted in the Assembly was that being a nominated member, the Governor must not be given discretionary powers that can override the decisions of an elected government. And thus, the discretionary powers of the Governor must be limited. But is such discretion limited to only those provisions that explicitly state that the Governor must act ‘in her discretion’ or it also extends to those scenarios where the Governor does not have the access to the aid and advice of the Council of Ministers and thus, is circumstantially required to act in her discretion? The comments by Dr Ambedkar or Krishnamachari would indicate that the former situation is correct. However, I argue these comments were made based on the narrow study of the provision. It is important here to refer to what Pandit Thakur Das Bhargava had to say about Mr. Kamath’s proposal to delete the clause granting discretionary powers to the Governor:

Sir, I beg to oppose the Amendment of Mr. Kamath. Under Article 143 the Governor shall be aided in the exercise of his functions by a Council of Ministers. It is clear so far. … My submission is that it is wrong to say that the Governor shall be a dummy or an automation. As a matter of fact according to me the Governor shall exercise very wide powers and very significant powers too. If we look at Article 144 it says: “The Governor’s ministers shall be appointed by him and shall hold office during his pleasure.”

So her has the power to appoint his ministers. But when the ministers are not in existence who shall advise him in the discharge of his functions? When he dismisses his ministry then also he will exercise his functions under his own discretion.

Then again, when the Governor calls upon the leader of a party for the choice of ministers, after a previous ministry has been dissolved, in that case there will be no ministry in existence; and who will be there to advise him? Therefore he will be exercising his functions in his discretion. It is wrong to assume that the Governor will not be charged with any functions which he will exercise in his discretion. Article 175 and 188 are the other Articles which given him certain functions which he has to exercise in his discretion.” (Emphasis mine)

And perhaps on a later realization about such situations and the requirement of the Governor to act in his discretion, no amendment was proposed even when Mr. Kamath reminded Dr Ambedkar of his previous speech. Therefore, the debates are very much necessary for us to appreciate the fact that Article 163 vests discretionary powers to the Governor to the extent that there are explicit provisions in the Constitution that requires her to act in her discretion. Such provisions might either clearly state that the Governor must act ‘in her discretion’ or omit so because it is only logical that in the absence of Ministers’ aid and advice, the Governor has to act in her discretion.

Moreover, this understanding not only makes the debates relevant, but also allows us to interpret the Constitution in a workable fashion. Lastly, if Article 163 (or 143 in the draft Constitution) would have been amended only because Articles 175 and 188 were subsequently amended to divest the Governor of her discretionary powers, this would mean that the phrase ‘under the Constitution’, appearing in Article 163, had no purpose to serve.

Before to I move on the specifics of the judgment in the Madhya Pradesh government formation case, it is important to briefly note the developments on the discretionary powers of the Governor. Post 1950, the discretionary powers of the Governor were expanded through certain amendments. Even judicially, the courts have upheld the exercise of discretionary powers of the Governor in exceptional cases in order to avoid ‘complete breakdown of constitutional machinery’. In this regard, Justice Lokur noted in Nabam Rebia that:

As the years have gone by, more and more unusual if not extraordinary situations have arisen. These situations have led, in theory, to greater discretionary powers being conferred on the Governor through decisions rendered by this Court and the High Court. In my view, this is really a step backward and contrary to the idea of responsible government advocated in the Constituent Assembly.

It is in this light that we must approach the decision of the Supreme Court in the Madhya Pradesh government formation case.

On the decision of the Supreme Court

In the introduction to his post, Amlan notes my argument that ‘while directing a government to face a no-confidence motion, initiated inside the house, is within the scope of the Governor’s ‘discretionary directions’ [Part A], independently directing a trust vote when no such motion exists is beyond his discretion. [Part B].’ I shall respond to both these parts in seriatim.

With respect to Part A, the decision of the Supreme Court in Nabam Rebia provides us the necessary guidance. The Court, at ¶152, explicitly notes that in case there is a no-confidence motion against the government, and the Chief Minister and his Council of Ministers advise the Governor to prorogue the Assembly to deny a vote on the motion, then ‘the Governor need not accept such advice.’ The reasoning for this is quite straightforward: the executive must always be accountable to the Legislature and hold its confidence. If the executive recommends any action that denies the Legislature an opportunity to exercise checks on the executive, then the Governor, upholding the larger principle of executive accountability, must act against the advice of the Council of Ministers. This norm attempts to uphold the principle of executive accountability beyond the bare text of the Constitution and I shall come back to this later in this post.

Now coming to Part B, I must initiate our discussion with the Sarkaria Commission and the Punchhi Commission reports regarding the discretionary powers of the Governor with respect to summoning of the Legislative Assembly. At ¶4.11.19 of its report, Sarkaria Commission noted that:

“Normally, the State Legislature is summoned by the Governor on the advice of the Chief Minister. … However, the exigencies of certain situations may require a departure from this convention. The Governor, then, exercises his own discretion to summon the Assembly. He exercises this discretion only to ensure that the system of responsible government in the State works in accordance with the norms envisaged in the Constitution.” (Emphasis mine)

After noting certain situations like ‘where the Chief Minister designedly fails to advise the summoning of the Assembly within six months of its last sitting’, the Commission notes that:

“The exigencies of the situations described above are such that the Governor must necessarily over-rule the advice of his Ministry if he is to ensure that the relevant constitutional requirements are observed both in letter and spirit. … [T]he Governor would, in the special circumstances, be within his constitutional right in summoning the Assembly in the exercise of his discretion. … We, therefore, recommend that, if the Chief Minister neglects or refuses to summon the Assembly for holding a “Floor Test”, the Governor should summon the Assembly for the purpose.” (Emphasis mine)

Similarly, the Punchhi Commission noted that:

4.5.03 … He [The Governor] should advise the Chief Minister to summon the Assembly as early as possible. If the Chief Minister does not accept the Governor’s advice, the Governor may, summon the Assembly for the specific purpose of testing the majority of the Ministry. (Emphasis mine)

These excepts make it amply clear that the Governor must exercise her discretionary powers to summon the Legislative Assembly only in those scenarios where the Assembly is not in session and the Government is not advising the Governor to summon the Assembly as it fears losing the motion of confidence. However, the Madhya Pradesh scenario was different.

Let’s unfold the sequence of events so that I can put forth my argument more clearly. Here is a news report dated February 13, 2020 which notes that ‘[t]he Budget Session of the Madhya Pradesh Assembly shall begin here from March 16.’ Therefore, the Governor had, with the aid and advice of the Council of Ministers, duly summoned the MP Legislative Assembly to meet on March 16^th. On account of certain developments – like the submission of resignations by the MLAs – on March 14^th, two days prior to the scheduled meeting of the Assembly, the Governor addressed a letter to the Chief Minister directing him to face a trust vote in the Assembly. When the Assembly met on the 16^th, the opposition did not move any motion of no-confidence. If the Assembly had lost the confidence in the Government, such a motion should have been moved. After the day’s proceedings, the Assembly was adjourned.

Two important events must be noted. First, the Council of Minister had duly advised the Governor to summon the Assembly. Second, despite certain political events, they stood by their advice and the Assembly met on the 16^th. This scenario is completely different from the one noted by the Sarkaria Commission and the Punchhi Commission or even the one noted by the Supreme Court in Nabam Rebia. Therefore, I argue that in the peculiar setting of events in the Madhya Pradesh case, the Governor had no discretion to direct the Government to face a trust vote.

At this stage, we must confront the question regarding adjournment of the Assembly. Amlan argues that the adjournment circumvented the scope of having a ‘political process’ to roll out inside the Assembly and as the Government indulged in ‘delay tactics’, the exercise of discretion by the Governor was justified. Though I agree with him on the first part, I contest that the exercise of discretionary powers was the right answer to this ‘constitutional impasse’.

I argue that when the Assembly was adjourned by the Speaker, and thus effectively denying the Legislature an opportunity test whether the executive government holds the confidence of the Assembly, the opposition must have challenged the adjournment based on the principle of executive accountability. And thereby, a ruling must have come from the Supreme Court, perhaps on the lines of the UK Supreme Court’s prorogation judgment, that the action of adjournment by the Speaker denied an opportunity to the elected legislative body to exercise its constitutional powers as well as the statutory power to move a no-confidence motion in order to check whether the executive holds the confidence of the Assembly.

Concluding Remarks

For a consequentialist, the above arguments might not matter because ultimately – be it through a no-confidence motion or through the exercise of Governor’s discretion – the government would have had to face a trust vote. But when seen from a larger perspective, these are nothing but incremental steps that hinder the development of constitutional conventions. An impasse in the Assembly must be resolved within the Assembly. A ruling must have come on the checks on the power of the Speaker to adjourn the Assembly when the ruling party stands in a weak position. The creation of another situs of power would not resolve the situation. The ideal position must be to create checks on the existing power. When the Sarkaria Commission recommended the exercise of discretion by the Governor in summoning the Assembly, the recommendation was towards checking the unfettered nature of ‘aid and advice’ clause that effectively dilutes the rule of executive accountability to the Assembly. Similarly, in the present matter, a desirable position was imposing checks on the power of the Speaker and not to make that Office nugatory. If the Governor can direct the Government to face a trust vote even in those cases where the Assembly is duly summoned, then the entire purpose of having the process of no-confidence motion stops making sense. The opposition, then, will always rush to the Governor and seek a direction for holding a trust vote. So, instead of having executive accountability to the Legislature, it creates a regime of executive accountability to the Legislature through a nominated Office.

I started this post with an observation made by the Supreme Court in Shrimanth Balasaheb Patil v. Hon’ble Speaker, Karnataka Legislative Assembly and wish to conclude by quoting another observation from the same decision:

The scrupulous discharge of duties by all guardians of the Constitution include the duty not to transgress the limitations of their own constitutionally circumscribed powers by trespassing into what is properly the domain of other constitutional organs.

Coronavirus and the Constitution – XIX: The State Disaster Risk Management Fund and the Principle of Equal Distribution [Guest Post]

[This is a guest post by Devesh Kumar.]

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Federal grants to states are necessary as no system of distribution can possibly meet the need for natural development and social services, which are usually the responsibility of states. In order to meet the requirements, the central government provides the finances in the form of grants to state governments. The federal structure of Indian Constitution [“Constitution”] lays down many institutional strategies for fostering intergovernmental cooperation between the centre and states. For an instance, under Article 275, the Central government shall make grants-in-aid to States as per Finance Commission’s recommendations. Such grants are given to those states which are in need of financial assistance.

These federal grants become extremely necessary for a state during emergency situations like the COVID-19 pandemic where the state government itself cannot handle such a situation. Keeping this in mind, the Central government on 3^rd April 2020 released Rs 17,287.08 crore to different states to enhance their financial resources to deal with the various challenges in the fight against this pandemic. The grant includes Rs 6,195.08 crore towards ‘revenue deficit grant’ under the recommendations of the 15th Finance Commission to 14 states, and Rs 11,092 crore in advance under the State Disaster Risk Management Fund [“SDRMF”] to states to build quarantine facilities.

However, this distribution of funds is very contentious. Kerala, one of the worst affected states, received a mere Rs 157 crore under SDRMF. On the other hand, Rs 802 crore was allocated to Odisha, a state with far fewer reported cases and migrants, which is 5 times the allocation of Kerala. So, why is there such inequality and is it justified under the Constitutional framework? If not, then what must be done in order to rectify such a mistake? In this blog, I shall try to answer these questions.

Concept of Grants- in- aid under the Constitution of India

The idea of fiscal need has been borrowed from Australia. Section 96 of the Constitution of Australia provides that Special grants are justified when a state, through financial stress from any cause, is unable efficiently discharge its functions as a member of the federation. In India, the Parliament has the power to make such grants under Article 275 and 282 of the Constitution. Article 282 states that ‘the centre may make grants for any public purpose notwithstanding that the purpose is not one with respect to which Parliament may make laws.’ Such grants are used for a number of purposes like promoting state action in all significant areas of the nation; even the centre may give grants as an incentive to the states. Thus, the financial resources of the centre and states are pooled together with a view to achieve certain preferred national goals, such as fighting COVID-19 together.

Under Article 275 of the Constitution, the central government can provide statutory grants to states. Such grants are given to those states which are in need of financial assistance, in the form of unconditional grants. Currently, the central government distributed the funds to all state governments under this provision, since the SDRMF is a statutory fund provided under Article 48 of the Disaster Management Act, 2005 and the 15^th Finance Commission has recommended for such grants to the tune of 28, 983 crores for the year 2020-21.

Recognizing the problem of financial imbalances, the Constitution empowers the Finance Commission to resolve such imbalances by making recommendations on tax devolution and grants in aid of revenues. The analysis of intergovernmental transfers shows that that the tax devolution and grants given on the recommendations of the Finance Commission have a strong equalizing element. However, in the case of COVID- 19 funding, the purpose of establishing the Finance Commission seems defeated. As stated earlier, the grants categorized by the Finance Commission do not seem fair and equalizing. Therefore, we need to look into the constitutionality of such grants.

The Finance Commission recommendations and test of its Constitutionality

Eminent jurists such as H.M. Seervai identified fiscal independence as one of the features of the federal character of the Constitution. The principle of federalism is well-founded in the recommendations, as under Article 280(3) it decides the share of revenue, grants, etc. The Finance Commission recommendations include both the vertical and the horizontal devolution of union revenue. In the present case of vertical devolution, the criteria adopted by the commission have caused the decrement in the transfer to a few states like Kerala. This has caused serious implications on the autonomy of states in terms of their financial powers.

The Constitution of India envisages the sharing of tax between the centre and state, where the centre has to share some portions of its tax with the states. The objective of federal transfer is fiscal equalization and the Commission (as an expert body) has to make recommendations in a fair and equitable manner. The right to equitable distribution incorporates the concept of equality, which is fundamental to republicanism and the rule of law. The recommendations, being a constitutional mandate on the Finance Commission under Article 280(3), evidently attract the principle of equitable distribution based on equality. Hence, the Commission is obligated to take into account the above principles of federalism and equality.

Where did the Finance Commission go wrong?

The total SDRMF allocation for the year 2020-21 is Rs 28,983 crore. The latest release for the response to COVID-19 is Rs 11,092 crore; this sum is split into the ratio suggested by the 15th Finance Commission. The allocation formula for the fund was changed, and the 15th Finance Commission proposed a new system before the COVID-19 crisis. The criteria inter alia include previous expenditure, population and area of the State. Unfortunately, the Finance Commission did not consider any specific criterion pertaining to COVID-1,9 like number of confirmed cases. As a result, its findings are odd in this context as Kerala receives Rs 53 lakh per patient while Odisha receives some Rs 160 crore per patient. Therefore, the after-effects of 15^th Finance Commission recommendations show that the formula used by the Commission was arbitrary and results in the violation of equitable distribution of the revenue.

The Finance Commission’s goals include inter alia equity principle, efficiency, predictability and stability, where its transfers are meant to rectify the horizontal imbalances among the states. The preamble of the Constitution guarantees the equality of status and of opportunity. Therefore, D.D. Basu in his commentary on the Constitution of India (ed. 8, p. 9301) states that the Finance Commission, while discharging its duties, has to look into the needs of the states and come up with the principles to take account of various factors such as:

• The budgetary need.
• The promotion of activities of national importance.
• The special needs of a particular state, etc.
• The need of equalizing the social services and administration standards to a national level.

These transfers aimed at bringing equalization serve as a valuable aid to the stability of a federation and the citizenship rationale. The foregoing assertion is based on a premise that no matter wherever a citizen lives, she should have access to certain important economic and social rights.

Further, the doctrine of equality enshrined in the Constitution is fundamental to the rule of law and therefore is the basic feature of the Constitution. Such equality has been breached in present case since relevant considerations pertaining to pandemic are not being taken into account has led to the arbitrary decision. The funds were distributed rather taking into account the irrelevant considerations such as geographical area, population etc. Therefore, recommendations based on irrelevant parameters violate the right to equality of residents of Kerala. Now, in order to rectify the same, the Finance Commission must change the parameters and include relevant parameters like number of confirmed cases as suggested by the opposition. However, this process would be time-consuming and such delay will not serve the purpose. Therefore, the centre must adopt the other way of providing grants to the discriminated states by drawing its power from Article 282 of the Constitution.

The Way forward

In the current situation where various states are facing financial stress, it is the responsibility of the central government to provide them discretionary grants allowed under Article 282 of the Constitution. As discussed above, such grants are discretionary in nature and it depends upon the will of the central government to grant the same. However, the centre cannot do away from its responsibility by merely citing its discretion. There are many instances (here, here and here) where the Supreme Court and High Courts in India have struck down the unfettered discretion of the authority. In a democratic country like India, unfettered discretion should not exist with any organ of the state.  Going by same reasoning, the central government should not be allowed to use its unfettered discretion without looking at relevant considerations. Therefore, in present situation of financial distress, discretionary grants must be provided to the States that are in need of such finances.

Guest Post: Jammu and Kashmir’s New Domicile Reservation Policy – Some Constitutional Concerns

[This is a Guest Post by Varun Kannan].

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On 31^st March, the Ministry of Home Affairs notified the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020 (‘the Adaptation Order’). This executive order has, inter alia, created a new domicile reservation policy for government jobs in the Union Territories of Jammu and Kashmir and Ladakh.

After explaining the procedure adopted for enacting this new domicile reservation policy, I shall raise certain constitutional concerns with respect to this procedure. Specifically with respect to the newly constituted Union Territory of Jammu and Kashmir, I shall argue that the conversion of the erstwhile State into a Union Territory, coupled with the continued imposition of President’s Rule has given the Centre Government a carte blache to enact such policies without any pre-legislative consultation.

The Adaptation Order and the new domicile policy

Through the Adaptation Order notified by the Union Home Ministry, a total of 127 State laws applicable to the Union Territories of Jammu and Kashmir and Ladakh have been amended or repealed. The State legislation which has been amended to give effect to the new domicile policy is the Jammu and Kashmir Civil Services (Decentralization and Recruitment) Act, 2010. The Adaptation Order has inserted Section 3A to this Act, which prescribes new eligibility criteria to be deemed as a ‘domicile resident’ of Jammu & Kashmir. The new eligibility criteria inter alia includes requirements such as (i) the person should have resided in Jammu & Kashmir or Ladakh for a mimumum period of 15 years; or ii) the person should have studied for a period of seven years and appeared for Class 10^th/12^th Board Examinations through an educational institution located in the Union Territory.

After the notification of the Adaptation Order, there was an uproar over the ‘inadequacy’ of the new domicile reservation policy, as it was applicable only to a limited category of government jobs. The Union Home Ministry then notified a Second Adaptation Order on 3^rd April, which took into account this stringent criticism and extended the applicability of the new domicile reservation policy to all government posts.

In the Adaptation Order, it is stated that this Order derives legal force by virtue of Section 96 of the Jammu and Kashmir Reorganization Act, 2019 (‘the Reorganization Act’). To recall, the Reorganization Act has bifurcated the erstwhile State of Jammu and Kashmir into two separate Union Territories of Jammu & Kashmir and Ladakh respectively. This statute was introduced simultaneously with the Presidential Order and the Statutory Resolution which amended Article 370 of the Indian Constitution, on 5^th August 2019. To understand the nature and purpose of the Adaptation Order, it is instructive to refer to Section 96 of the Reorganization Act. Section 96 falls under Part XIV of the Reorganization Act, which consists of “Legal and miscellaneous provisions”. It states as follows:

For the purpose of facilitating the application in relation to the successor Union Territories, of any law made before the appointed day, as detailed in Fifth Schedule, the Central Government may, before the expiration of one year from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or other competent authority. (emphasis supplied).

 

The Fifth Schedule referred to above consists of the Central and State Laws that are applicable in the newly formed Union Territories of Jammu and Kashmir and Ladakh. One striking aspect of Section 96 is that it confers the Central Government the power to amend or repeal any Central or State law applicable in the Union Territories, if it considers it to be ‘necessary and expedient’. This power is available for a period of one year from the appointed date i.e. the date on which the Reorganization Act came into force, which was fixed as 31^st October 2019. Now, such a provision enabling the adaptation and modification of existing laws by the Executive is not unique to this Reorganization Act. A similar provision is also present in the Section 101 of the Andhra Pradesh Reorganization Act, 2014, which confers the appropriate government with similar powers of adaptation and modification.

Now an important question arises with respect to the scope and ambit of the power of ‘adaptation and modification’ conferred by Section 96. The question that arises here is whether the power conferred by Section 96 is limited to making adaptations and modifications solely for purposes of procedural and administrative efficiency, and whether it extends to making policy alterations, such as the new domicile policy.

The scope and ambit of the power of ‘adaptation and modification’.

From a plain reading of Section 96, it is evident that the purpose of this provision is to adapt or modify any law for the purpose of facilitating its application to the successor Union Territories, if the Central Government feels that it is necessary and expedient to do so. This is further qualified by a one-year time limit, which means that adaptations and modifications can be made for a period of one year from the date on which the Reorganization Act has come into force.

The presence of a one-year time limit and the words “for the purpose of facilitating the application in relation to the successor Union Territories, of any law” indicates that such adaptations and modifications made through executive orders can be undertaken only for procedural and administrative matters connected with the bifurcation and the conversion of the erstwhile State into a Union Territory. This also implies that policy changes made through executive orders which are unconnected to this process of facilitating the application of existing laws shall be beyond the ambit of Section 96. This interpretation is also in line with the Supreme Court’s decision in the landmark In Re: The Delhi Laws Act case, where it was held that the Legislature cannot delegate matters of legislative policy to the Executive.

Keeping in mind the wording of Section 96 and the In Re: Delhi Laws Act decision, it can be argued that Section 96 cannot be used to make any substantive policy changes by amending existing laws; and it is restricted to matters of procedure and administration that are necessary for facilitating the smooth application of existing laws to the newly constituted Union Territories. Hence, the question that arises here is whether the Adaptation Order, insofar as it amends an existing law to create a new domicile policy, is ultra vires Section 96, and whether it goes beyond the ambit of the parent statute. At first glance, the answer may appear to be in the affirmative. However, there are other provisions in the Reorganization Act and the Indian Constitution, which may be invoked as possible justifications.

A possible constitutional justification?

To address this issue, it is significant to note that as per the Reorganization Act, the Union Territory of Ladakh does not have a Legislature, and is to be administered by a Lieutenant Governor, acting on behalf of the President. On the other hand, the Union Territory of Jammu and Kashmir follows a model similar to Pondicherry and Delhi, and is envisaged to have a Legislature and a Council of Ministers headed by the Chief Minister. As the Union Territory of Ladakh does not have a Legislature and is to be administered solely through the Lieutenant Governor, the Adaption Order may be justified by referring to Section 58 of the Reorganization Act, and by invoking Article 240 of the Indian Constitution.

Section 58 makes Article 239 and Article 240 applicable to the Union Territory of Ladakh. Article 240 accordingly states that for Union Territories that fall within the ambit of Article 239 (such as Pondicherry and now Ladakh), any Regulation made by the President which amends or repeals any applicable law shall have the same force as an Act of Parliament. Hence, with respect to the Union Territory of Ladakh, the Adaption Order can be considered as a Regulation made by the President under Article 240, and can be justified on these grounds. However, with respect to the Union Territory of Jammu and Kashmir, the position is significantly different.

Unlike Ladakh, Article 240 is inapplicable to the Union Territory of Jammu and Kashmir. This is by virtue of Section 13 of the Reorganization Act and the proviso to clause (1) of Article 240. Section 13 states that the provisions contained in Article 239A of the Constitution as applicable to Pondicherry shall also be applicable to the Union Territory of Jammu & Kashmir. Furthermore, the proviso to Article 240(1) states that if a body is created under Article 239A to function as the Legislature for the Union Territories enlisted under Article 239A (which now includes Pondicherry and Jammu and Kashmir), then until the first meeting of the legislature, the President may make Regulations for that Union Territory.

This may be used as a justification by the Central Government in a possible constitutional challenge, as the Union Territory of Jammu and Kashmir is currently under President’s rule, and no Legislative Assembly has been created after the passage of the Reorganization Act. It may contend that even if the Adaptation Order is ultra vires the ambit of Section 96 of the Reorganization Act, it is saved by Article 239A and the proviso to Article 240(1). Another justification that the Central Government may give is that following the 5^th August statutory resolution, the concept of ‘permanent resident’ as given in the Jammu & Kashmir Constitution has ceased to exist.

This is because following the 5^th August statutory resolution, the Jammu & Kashmir Constitution (which defined a permanent resident under Article 6) has been done away with. Along with this, even Article 35A of the Indian Constitution, which empowered the State Legislature to define the “permanent residents” of the erstwhile State, was abrogated. This abrogation of the concept of “permanent resident”, it can be argued, has led to a vacuum in the domicile eligibility criteria applicable in the newly constituted Union Territories.

Imposition of President’s rule and conversion into Union Territories: A larger constitutional question

Keeping this possible justification aside, there is a larger constitutional question that we must address here. As the Union Territory of Jammu and Kashmir is envisaged to have a Legislative Assembly, Article 239A read with the proviso to Article 240(1) permits the issuance or executive orders by the President (i.e. the Central Government) only until the first meeting of the Legislative Assembly, after fresh elections are held. It is pertinent to note here that Jammu & Kashmir was under President’s rule prior to its conversion to a Union Territory, and has continued to remain in President’s rule even after 31^st October 2019 (when the Reorganization Act came into force). Article 356 of the Indian Constitution has continued to hold fort in Jammu and Kashmir since 19^th December 2018, and there is no information on any proposal to have fresh elections in the near future. The continued imposition of President’s rule and the conversion of the State into two separate Union Territories has given the Central Government a carte blanche to indiscriminately take advantage of the statutory and constitutional provisions referred to above, and rule by executive decree.

The rationale behind the Central Government wanting this unbridled power can be highlighted by referring to the Supreme Court’s decision in NCT of Delhi v. Union of India. In its decision, the Supreme Court held that although Delhi is a Union Territory and akin to a quasi-State, the actions of an elected government and an elected Legislature shall bind the Lieutenant Governor – for all matters that are within its legislative domain. Although this decision was based on an interpretation of Article 239AA of the Constitution, it applies squarely to Jammu & Kashmir – as akin to Delhi, Jammu and Kashmir is envisaged to have a Legislature despite being a Union Territory. This implies that for all matters within its legislative domain, the Legislature of the Union territory of Jammu and Kashmir shall stand supreme, and bind the Lieutenant Governor and Central Government. Hence, if fresh elections had been held and a Legislative Assembly had been constituted, the Home Ministry could not have indiscriminately taken the benefit of 239A, the proviso to Article 240(1), and Section 96 of the Reorganization Act, to bring about radical changes such as the new domicile policy.

As pointed out above, the new domicile policy had been criticized by leaders across political parties, who claim that it is inadequate, and only granted domicile reservation for a limited category of government jobs. Fearing major backlash, the Home Ministry notified another Adaptation Order and amended the law once again, to bring within its ambit all government posts. This is exactly what exacerbates the problem further. If there was an elected Legislature in the first place, such a domicile policy could only have been passed through legislation, after a debate and discussions involving members from across party lines. The conversion to Union Territories coupled with the imposition of President’s rule has prevented any such discussion from taking place, and has granted the Central Government a carte blanche to make policy prescriptions without any pre-legislative consultation process.

While the Home Ministry is free to contend that once there is an elected legislature, the Legislature may further amend or repeal the changes after discussion, this shall only buttress my primary point – that as the presence of a Legislature is envisaged, such legislative policy prescriptions should be left solely within its domain. This only culminates in one common end – which is the need for a greater legal and judicial conversation on whether it is within the spirit of the constitutional framework to indefinitely impose and repeatedly extend President’s rule under Article 356, and rule virtually by executive decree. Until this status quo remains, there shall only be rule by law in Jammu & Kashmir, and not rule of law.

Guest Post: Article 131 and the Power of State Governments to Challenge Laws: A Response to Amlan Mishra

[This is a guest post by Kevin James.]

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This post is a response to Amlan Mishra’s interesting piece on the question of whether States can challenge central laws, published on this blog a few days ago (available here). The immediate context for this is the suit filed by Kerala on January 15^th against the Centre before the Supreme Court, challenging the constitutional validity of the Citizenship (Amendment) Act, 2019 (“CAA”). This suit was filed under Article 131 which vests exclusive jurisdiction in the Supreme Court over legal disputes between the Centre and States. On the basis of a structural interpretation, Mishra argues that Article 131 ought to be read as granting States the right to challenge central laws. In this post, I address the same question through a different approach, and arrive at a different conclusion.

‘Legal Right’ under Article 131

For a suit under Article 131 to be maintainable, a key requirement is that the dispute must involve a question of a law or fact “on which the existence or extent of a legal right depends”. But what is the meaning of a ‘legal right’? In jurisprudence, a legal right is generally understood to be an immunity against the legal power of another. For example, against the power of the State, citizens possess a legal right to freedom of speech and expression under Article 19. Thus, while the State may exercise certain powers over its citizens, it cannot violate a citizen’s right to freedom of speech.

Similarly, in a federation underpinned by a written constitution, individual States also have certain rights against the powers of the Centre. The requirement under Article 131 is that the dispute should involve a question of law, the answer to which will determine whether or not a State has a legal right against the power of the Centre in that particular case. A good example of a case where this requirement is clearly met is the suit filed by the State of Chhattisgarh against the Centre under Article 131. This suit, filed a day after Kerala’s suit, challenges the constitutional validity of the National Investigation Agency (NIA) Act, 2008. In the wake of the 2008 Mumbai terrorist attacks, this statute established the NIA as a central agency for the investigation of terror-related cases. Chhattisgarh challenged Parliament’s legislative competence to enact such a law on the ground that it encroaches upon the State’s power over “Police” as per the Seventh Schedule of the Constitution (List II, Entry 2).

This fulfils Article 131’s subject-matter requirement as follows: The answer to the question of whether Parliament has the competence to pass the NIA Act will determine whether Chhattisgarh has a legal right to conduct its own investigations through its police, against the power of the Centre to conduct investigations in the State through the NIA. The State is directly affected by this matter, and whether or not it has the aforesaid right against the Centre’s power in this case depends upon the constitutional validity of the NIA Act.

The Article 256 argument

From the above analysis, it follows that the first question that needs to be answered for Kerala’s suit to be maintainable under Article 131 is: Do States have a legal right against the Centre’s power over citizenship? Unlike in the USA, all Indians have a single Indian citizenship and the Centre has exclusive legislative and executive power over it (List I, Entry 17). Thus, a citizenship law, even if unconstitutional and violative of fundamental rights, does not directly affect any legal right of a State. In other words, no State has a legal right against the power of the Centre over citizenship. The question of law, ‘does the CAA violate fundamental rights?’, does not meet the subject-matter requirement of Article 131 as the existence of a legal right of any State does not depend on it.

Perhaps for this reason, Kerala’s suit frames the specific dispute under Article 131 in terms of Article 256. Article 256 requires States to ensure compliance with central laws, and vests in the Centre a power to give directions to recalcitrant States for this purpose. In effect, Kerala argues that the legal dispute in this case stems from the fact that the State will be compelled to enforce an unconstitutional law, thereby violating the legal rights of the State.

However, if the CAA is declared to be unconstitutional (and there are nearly 150 petitions in the Supreme Court challenging the CAA through other routes), then there is no question of it being enforced, let alone anyone being compelled to enforce it. As said earlier, a legal right is an immunity against a legal power. The effect of the CAA being declared unconstitutional would be that the Centre would have no power to direct its enforcement in the first place, and thus there is no question of a State having a right against such a power. Therefore, this contention does not meet Article 131’s requirement either.

The fundamental rights argument

Kerala’s suit also states that the dispute involves the enforcement of the fundamental and other rights of its inhabitants. But does a violation of the rights of a State’s inhabitants constitute a violation of the legal right of the State for the purposes of Article 131?

Typically, fundamental rights are enforced through Article 32, which confers a fundamental right to move the Supreme Court for this purpose. This is in addition to Article 226, which provides a broader remedy before the High Courts for enforcing fundamental and other rights. With the advent of Public Interest Litigations (PILs) several decades ago, entities other than the directly aggrieved persons can move the Supreme Court on their behalf. Article 32 petitions are typically filed against the Central or State Government, but interestingly, there have been cases where these governments have themselves filed petitions under Article 32.

In 2017, when West Bengal sought to challenge the Aadhaar Act under Article 32, the Supreme Court orally observed that a State cannot file such a petition against a central law. However, it did not give any reasons to support this view. On this question, the court should have looked at its judgment in the 2015 case of Union of India v. V. Sriharan, which was regarding the State of Tamil Nadu’s decision to remit the life sentences of Rajiv Gandhi’s assassins. In this case, the Centre moved the Supreme Court against the State of Tamil Nadu for the enforcement of the fundamental rights of the victims of the 1991 blast. This was done under Article 32, in the Centre’s capacity as parens patriae or guardian of its citizens. This case illustrates how Article 32 could be used by a State to enforce fundamental rights. As such, there does not seem to be any reason to interpret Article 32 in a manner that prevents the State or the Centre from moving the Supreme Court.

If Kerala wished to challenge the constitutional validity of the CAA on the ground of violation of fundamental rights, the nature and source of the remedy would flow from the persons whose rights are being enforced, and not from the State that seeks to enforce them. Therefore, in my view, Kerala should have moved the Supreme Court under Article 32 to challenge the CAA, and not under Article 131. Of course, if Kerala were to choose this route of challenging the CAA, it could technically have acted on behalf of anyone whose fundamental rights were violated, and not just its own inhabitants. But to move under Article 131, the dispute needed to be concerning the constitutional relationship between the Centre and the States, and the rights and powers that flow from this relationship.

In summary, I submit that the answer to the question of whether States can challenge central laws rests on the following. If the challenge is made under Article 131, then it should be on the ground of legislative competence and not for violation of fundamental rights. In a case of violation of fundamental rights, States should be able to challenge central laws under Article 32, and not Article 131.

Given the absolute majority at the Centre, opposition politics appear to have moved to the Centre-State sphere. The possibilities and limitations of the federal scheme of our Constitution will thus be rigorously examined, and questions such as the ones raised by Kerala’s suit will only become more prominent in the near future. Although the CAA appears to be unconstitutional on several grounds, and although many States have rightly expressed their opposition to the same, there are constitutional limits to the articulation of these concerns along federal lines. Kerala’s suit against the CAA looks likely to attract one such limitation.

Guest Post: Article 131 and the Power of State Governments to Challenge Laws

[This is a guest post by Amlan Mishra.]

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The question of whether Article 131 of the Constitution can be used by states to challenge the vires of a Central legislation was referred to a larger bench of the Supreme Court in State of Jharkhand v. State of Bihar. With Kerala and Jharkhand challenging the constitutionality of Central laws, this question has come to the limelight again. In this piece I put forward a structuralist interpretation of the Constitution, to argue that states have such a right. ‘Structural interpretation’ here is taken to indicate the use of multi-provisional implications which are sensitive to the context and purpose of the provisions of the constitution.

Legal position so far

Article 131 provides that the Supreme Court shall have original jurisdiction to try cases between different federal units, if the dispute involves ‘any question of law’ on which the ‘existence or extent of a legal right depends’. The reference to a larger bench is for the interpretation of the words ‘legal right depends’. Two cases of the Supreme Court propose contradictory interpretations to this question. Both cases fail to offer any substantial philosophical or structural reading of the constitution in arriving at their conclusions.

First, consider State of Karnataka v. Union of India, where the Supreme Court held that ‘legal right’ here does not just mean the ‘legal right of the state’, but includes any legal right of State government or of other people. This case identified two ingredients that are necessary for an original suit under A. 131, a) the two parties (states or centre) and b) a substantial question of law arising out of ‘some legal right’. The interpretation of ‘legal right’ was delinked from the concept of a ‘cause of action’, such that the legal right of the ‘plaintiff’ (in this case, the state) need not be violated to move an original suit under this Article. The absence of a ‘legal right of the plaintiff’, the court held, should not stop the court from hearing the parties on merits. J. Chandrachud stressed on the ‘delicate relationship’ between the centre and the state to point out that the constitutional capacity of the litigants under Article 131 should not be narrowly limited. J. Bhagwati in his opinion undertook a textual reading of the Article, by noting that it does not explicitly say ‘legal right of the plaintiff only’. In absence of such a clear indication in the article, he was unwilling to read the concept of ‘cause of action’ into it.

The second case is State of MP v. Union of India wherein the constitutionality of a legislation was held to be unassailable by a state government moving a suit under Article 131. It gave a strained explanation which hinged on the 42^nd Amendment and its subsequent repeal. It held that the amendment had, in the past, weakened writ jurisdiction under Articles 32 and 226 by giving exclusive jurisdiction to the Supreme Court, to adjudge constitutionality of central laws by inserting Art. 131A. So the latter repeal of Art. 131A, the court held, should be understood to mean that constitutionality of central laws are now to be decided solely under the writ jurisdiction of the courts. State of Madhya Pradesh does not, however, articulate as to why an additional challenge to constitutionality of statute cannot be moved under Article 131 (as is the case in Kerala’s challenge to the Citizenship (Amendment) Act, 2019), alongside other petitions under Art. 32. A petition under one need not limit the other.

In what follows I propose that using a structural interpretation of the Constitution, states have the right to challenge Central laws under Article 131.

Structuralist reading of Article 131: Basic structure as supra-statutory duty

The immutability of the key provisions of the Constitution, in the face of executive or legislative action, is a crucial facet of liberal democratic Constitutions. For example, the US Constitution provides under Article IV that the federal government shall guarantee a ‘republican form of government’. Deriving from this (see Ambedkar’s statement drawing the parallel), the Indian Constitution under Article 356 provides that the President’s rule can be invoked if the administration of the state is ‘against the provisions of the Constitution’.

In SR Bommai v. Union of India, Article 356 was invoked in 3 BJP ruled states, on the grounds that the state governments were acting against secular principles during the Babri Masjid demolition. The Supreme Court observed that ‘administration according to the provisions of the Constitution’ includes within its ambit more than mere ‘governance in accordance with electoral democracy’. It also includes fidelity to fundamental values of the Constitution, such as secularism. Accordingly, the test of ‘government in accordance with the Constitution’ demanded adherence to the ‘basic structure’ of the Constitution. Consider these statements by the judges.

Justice Sawant observed:

Any profession and action that go counter to [secularism] are a prima facie proof of the conduct in defiance of the provisions of the Constitution.

Similarly, Justice Reddy observed:

[I]t is clear that if any party or organisation seeks to fight the elections on the basis of a plank which has the proximate effect of eroding the secular philosophy of the Constitution it would certainly be guilty of following an unconstitutional course of action.

It is to be noted that SR Bommai did not hold merely that anti-secular actions were a violation of basic structure, (thereby integrating basic structure considerations into the review of a higher executive’s action). It also established concomitantly, as Gary J. Jacobson argues in The Wheel of Law (2003), that the Union government has the power to take positive action to uphold the basic structure. Thus ‘electors’ and ‘courts’ were not the only decision-makers as to whether a government was working ‘against the provision of the Constitution’. The centre could also invoke Article 356 to put forward its version of the Constitutional truth and the courts, by reviewing such an exercise, could adjudicate if that reading of the Constitution was correct. In Bommai, the courts rooted this power of the Centre – in the duty of elected governments to not only abide by the basic structure but also to positively enforce it. Consider this by J. Ramaswamy in Bommai:

Secularism . . . is a part of the fundamental law and basic structure of the Indian political system to secure to all its people socio-economic needs essential for man’s excellence with material and moral prosperity and political justice.

 

Jacobson reads this as “[g]overnment is being invited to act in furtherance of the basic features of the Constitution, not simply to refrain from acting in situations where fundamental rights have been threatened or violated.”(Pg. 150)

Is this invitation to act in furtherance of the Constitution a one way street? Surely, no counterpart of Article 356 exists for the states to move against the Centre. However, Article 356 is useful to see how one unit’s interference in the sphere of another is justified if it is to further the basic structure of the Constitution. The centre, by virtue of its more dominant position, can discipline the states if they don’t follow the basic structure.

But states also have a similar, albeit less explicit obligation to defend the Constitution in their respective spheres. This is by virtue of the oath a Governor takes where he swears to ‘preserve, protect and defend’ the Constitution. The Chief Minister of a state similarly swears to act ‘according to the Constitution’. In Manoj Narula v. Union of India the court read the oath to confer a ‘constitutional expectation’, albeit non-binding, upon the Prime Minister and the Chief Minister, to not include criminals in their cabinets. The oath of these functionaries, read with Jacobson’s idea that states have a positive duty to enforce the basic structure, raises a strong Constitutional expectation in the state government to defend and work in furtherance of the basic structure. What happens when their constitutional obligation/expectation to protect and defend the Constitution is in the opinion of the state in conflict with any act of the centre?

To illustrate this let me draw an analogy between the basic structure of the Constitution and Radbruch’s idea of ‘Supra- Statutory authority’. Evolved after the carnage of the holocaust, the principle says that actions of any government functionary should not be tested just on the ‘positive law’/’orders of superiors’ but also against some basic supra-statutory principles like human rights. The oath of a Governor can be said to test the action of a State Government (acting under his name) on the touchstone of the Constitution. This cannot, however, mean that the states should dissent when confronted with an unconstitutional act by the Centre. The Constitution, as I discuss below, forbids such dissent. There should be an alternative mechanism to voice this disagreement.

Enforcing unconstitutional directions?

Crucially, Article 247 under the Indian Constitution provides that directions can be issued to the State government, inter-alia to not impede the Centre’s executive functioning. Article 365 provides that non-adherence to instructions of the Centre is enough to invoke Article 356 in the states. Such a compulsory direction from the Centre cannot exist in absence of the right to challenge the constitutionality of the Central government legislation on the ground that it goes against the duty of the centre to act in furtherance of the basic structure. For example, if during the enforcement of the recently enacted Citizenship (Amendment) Act, 2019, the Centre directs State Government to make its machinery available for verifying the documents of refugees in India for eligibility for citizenship, the state may have to enforce what it feels is an unconstitutional act of the centre.

The states then should have a mechanism to clarify if it is indeed a violation of the Constitution. It can be done only by challenging it with reference to the Constitution.

Integrating text with structure

Let us see if we can apply the aforesaid structural reading to the text of Article 131. Article 131 uses in clear terms the phrase: ‘legal rights depends’. What I propose is to look closely at J. Chandrachud’s opinion in State of Karnataka. He stressed the ‘delicate federal relationship’ of India to read the words ‘legal right depends’ liberally. Inherent in this idea is the understanding that ‘the legal right’ should arise in the course of the federal relationship, which admittedly is incapable of precise description. On similar lines, in the case of State Bihar v. Union of India the court noted that ‘the legal right [under Article 131] should arise in the context of the constitution and the federalism it sets up’.

What is important to note here is that the Indian Constitution does not provide ‘rights’ (claim rights) to constituent units against each other (in the strict Hohfeldian sense). Instead it gives them ‘power to legislate’ (see Article 246). In addition to this the Constitution provides for immunities (enjoyed by constitutional functionaries), duties, privileges (enjoyed by legislators), and expectations (arising out of oaths) to/on constituent units [jural relationships]. More often than not, all constitutional provisions confer on constituents a fusion of these ‘jural’ terms. For example Article 356, as Jacobson’s exposition shows, confers on the central government a ‘power + duty’ to enforce provisions of the Constitution in a state.

Let us imagine these ‘jural relationships’ as spheres inside of which the units must operate, with occasional access to each other’s sphere as laid down in the Constitution [jural spheres]. It is the unconstitutional encroachment into each other’s ‘jural spheres’ that must be at stake for a dispute to fall under Article 131. Each unit, as I have established above, enforces the Constitution in its own sphere. [See a similar characterisation of the word ‘rights’ in J. Bhagwati’s opinion in State of Karnataka]

For the Centre, enforcement of the Constitution maybe mean incursion into the state’s sphere through the invitation in Article 356 to act in furtherance of the Constitution. This is an issue squarely under the jurisdiction conferred by Article 131 as illustrated by State of Rajasthan v. Union of India, wherein Article 131 was used to challenge the dissolution of State Legislative Assembly. Similarly a duty/expectation to defend the Constitution in a state is also incumbent on the States acting in the name of their higher functionaries. A violation of core constitutional values by the centre may then infringe the higher functionaries ability to ‘defend the Constitution’, thereby infringing on the sphere of action of the state.

Such a conflict of ‘legal rights’ may not seem as obvious a conflict as the issue of ‘who can try the Chief Minister of the state for corruption’ (a question involved in State of Karnataka). But this is definitely a question arising out of the federalism set up by the Indian Constitution. Thus the phrase ‘legal right depends’ can be read to mean competing jural relationships in the Constitution which arise from the obligation of each constituent unit to enforce and uphold the Constitution in its respective sphere.

In sum, therefore, if the states hold a good faith belief that the enforcement of the CAA or the NRC (for example) runs contrary to core constitutional tenets, Article 131 ought to be read as granting to them the right to challenge this before the Court, and contest the centre’s understanding of what the Constitution allows.

Guest Post: The Unconstitutionality of the CBI

(This is a guest post by Rishav Ambastha.)

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There has been a proliferation of agencies at the Centre, exercising investigative powers, such as the Central Bureau of Investigation, the National Investigation Agency, the Narcotic Control Bureau, etc. This gives rise to some important constitutional questions, with federal implications. This is because legislation on the subject of the ‘police’ is within the exclusive jurisdiction of the states, under the Seventh Schedule of the Constitution. In this essay, I examine the ambit of the legislative entry ‘police’, and argue that the concept of investigation is at the core of such powers. Resultantly, any exercise of such power on behalf of the Central Legislature or Central Executive would be beyond its legislative competence, and therefore unconstitutional.

The Judgment of the Guwahati High Court

Indeed, the Guwahati High Court, in Navendra Kumar v. Union of India, held that the resolution of the Ministry of Home Affairs, which constituted the Central Bureau of Investigation [“CBI”], is non est in law. The High Court further held that the resolution is not traceable to Section 2 of Delhi Special Police Establishment Act, 1946 (“the DSPE Act”), which empowers the Central Government to constitute a special police force for a Union Territory. And additionally, it held that, in any case, the Parliament does not have any legislative competence to constitute a police force, traceable to either to Entry 8 or Entry 80 of List I. Resultantly, the creation of what is effectively a federal police force, through a notification by the central Executive, cannot be constitutionally justified. However, the Supreme Court has stayed the operation of the judgment, and has not heard the case in the last five years.

Entry 8, List I

The fundamental question is of legislative competence of the Parliament to enact a law to establish a police force with the power of investigation. In this regard, the Guwahati High Court held that the Central Bureau of Investigation cannot be traced to Entry 8 of List I, Seventh Schedule (which is titled “Central Bureau of Intelligence and Investigation”) of the Constitution, because the term ‘investigation’ appearing in the entry ‘Central Bureau of Intelligence and Investigation’ has a narrow remit. It is limited for the purpose of finding out what’s happening in the different states, and not in the sense of the word “investigation” as it understood under section 2(h) of the Code of Criminal Procedure, 1973, and which pertains to the investigatory powers of an organised police force. This interpretation also finds support in the Constituent Assembly debates:

Constituent Assembly Debates, Vol. IX, 29^th August, 1949; “The Honourable Dr. B. R. Ambedkar: The point of the matter is, the word “investigation” here does not permit and will not permit the making of an investigation into a crime because that’ matter under the Criminal Procedure Code is left exclusively to a police officer. Police is exclusively a State subject; it has no place in the Union List. The word “investigation” therefore is intended to cover general enquiry for the purpose of finding out what is going on. This investigation is not investigation preparatory to the filing of a charge against an offender which only a police officer under the Criminal Procedure Code can do.”

 

Entry 80, List I

Furthermore, in Mangament of Advance Insurance v. Shri Gurudasmal, the Supreme Court acknowledged that the Section 6 of the DSPE Act relates to Entry 80 of List I, which allows the Central Government to enact laws for the purpose of extension of jurisdiction of one state to another, with the consent of the latter. In this context, the word ‘State’ in the Entry 80 of List I includes a Union Territory. The DSPE Act is traceable to two entries of different schedules. First, Entry 2 of List II, which is the power to enact laws in respect of police and second, Entry 80 of List I, which is power to enact laws to extend jurisdiction of police of one state to another. The relative legislative competence of the legislature of the province qua the central legislature (pre-Constitution) in relation to the state legislature qua the Parliament (post-Constitution) is still preserved. Entry 80 of List I of the Seventh Schedule of the Constitution relates to Entry 39 of List I of the Seventh Schedule of the Government of India Act, 1935.

It is argued that the Union does not have any policing powers, specifically, power to create agency at the Central level for the purpose of carrying out investigation into penal offences. It is to be borne in mind that the power to enact laws with respect to criminal law and criminal procedure is placed in Entry I of List III of the Seventh Schedule. While, the Union may do so, it cannot in itself create institutions which will exercise the police power except for the Union Territories.

The idea that the Union can legislate and establish a police force for Union Territory and then use that, albeit with the consent of the state, to use it as a police force for investigation of offences within other states, is therefore flawed. Doing so is a colourable exercise of power of the Parliament. The ambit of Entry 80 of List I cannot a contemplate a legislation which provides powers of investigation to the Union within the states which is within the exclusive jurisdiction of the state. That power cannot be exercised to grant jurisdiction to police which is in essence a police force of the Union. The Union cannot exercise police powers in the states for which it lacks the legislative competence to enact a law.

Section 6, DSPE Act

One potential problem with this argument is that the Section 6 of the DSPE Act allows the state to consent to the extension of the power and jurisdiction of one state to another. Typically, this would involve the extension of powers and jurisdiction of the police of one state, which has legislative competence to legislate on it, to another state. But, since the Union has power to create a police force, in effect, it ends up exercising police powers throughout the territory of India, which, as I have argued is a colourable exercise of the power of the Parliament.

The Contrary Judgment of the Bombay High Court

The Bombay High Court, in Pragyasingh Chandrapal Thakur v. State of Maharashtra, analysed the legislative competence of the Parliament to enact National Investigation Agency Act, 2008 (herein after referred as NIA Act). The act in addition to creating offences also, under Section 3(1), establishes a police force to investigate offences. Further, under Section 6, the central government has the power suo moto, without any consent of the state, to direct investigation in offences mentioned in the Schedule (which also includes offences of the Indian Penal Code, 1860). This power trammels over the investigative power of the state, since any investigation by the NIA into such offences automatically terminates any investigation conducted by the state into the schedule offences once the NIA takes over.

The Bombay High Court traced the NIA Act to Entry 8 of List I (Central Bureau of Intelligence and Investigation). This brings out the conflict in the understanding the scope of this entry between the Bombay High Court and Guwahati High Court. The conflict pertains to scope of understanding investigation, which is whether it means investigation as contemplated in the Code of Criminal Procedure, 1973 or as understood in the Constituent Assembly debates, which is limited for the purpose of finding out what’s happening in the vicinity of the states.

In addition to being contrary to the interpretation provided in the Constituent Assembly Debates, the Bombay High Court further has the effect of effacing Entry 2 of List II – the police. It seems to suggest it is open to the Union to create an agency for investigation of offences it enacts, because creation of a police force is only ancillary to enactment of penal offences.  However, the creation of a police cannot be an exercised through an ancillary power, because it is explicitly put in the State List (List II). Such interpretation would trample over the exclusive domain of the state list. Typically, this would involve the extension of powers and jurisdiction of the police of one state, which has legislative competence to legislate on it, to another state. But, since the Union has power to create a police force, in effect, it ends up exercising police powers throughout the territory of India, which, as I have argued is a colourable exercise of the power of the Parliament.

It would also raise questions about the fundamental understanding about the core functions of police. One core aspect of the function of police is to maintain law and order. However, that is already covered within the Entry 1 of List II. If it is stated that maintenance of law and order is the only core aspect of the police function, then Entry 2 of List II becomes redundant. Investigation and prosecution of offences is the other important function of the police, which I argue is what Entry 2 of List II contemplates.

The approach of Guwahati High Court is consistent with my conceptualisation of the Entry 2 of List II, which is that only Police duly constituted by States is competent to undertake investigation. The view of the Bombay High Court that word ‘investigation’ in Entry 8 of List I to mean investigation in terms of CrPC upends the constitutional tilt in favour of the states in the matters of policing powers and bestows that power in the Union. If both the Union and the State were to be contemplated to exercise powers of investigation concurrently, it would have been best placed in the List III of the Seventh Schedule. However, it is not.

Conclusion

It is tempting to look at Entry 8 of List I (“Central Bureau of Intelligence and Investigation”), and automatically assume that the wording covers the CBI. However, in this essay, I have argued that this entry stipulates legislative competence for two purpose (i) establishment of an agency – Central Bureau of Intelligence and Investigation (ii) vesting of power to carry out its ‘investigation’, which is only for the purpose of intelligence gathering, unlike the power of investigation under section 2(h) of the CrPC. The investigation under this Entry is qualitatively distinct from the investigation under the CrPC which emanates from commencement of criminal proceedings in CrPC through either registration of a First Information Report under Section 154 of the CrPC or Complaint before Magistrate under Section 200 of the CrPC.

The Constitution, as it stands today does not allow the Union to create institutions to carry out investigation outside the territorial limit of Union Territory. This becomes even more important, since the Union has enacted various laws where it has assumed the power to investigate and prosecute for penal offences.

Guest Post: Constitutional Silences, Textual Impasses, and Structuralism – A Comparative Analysis of the NCT Delhi and Miller Judgments

(This is a guest post by Preetika Mathur, and is a follow-up to her previous piece on this subject.)

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The purpose of this post is to highlight some interesting similarities between the famous R (Miller) v Secretary of State for Exiting the European Union (“Miller”) decision of the UK Supreme Court and the recent NCT Delhi judgment of the Indian Supreme Court. A discussion of the key issues in NCT Delhi can be found here, here and here. An analysis of the final judgment can be found here.

The UK Supreme Court gave its judgment in the Miller case on 24^th January 2017. The Indian Supreme Court gave its judgment in NCT Delhi on 4^th July 2018. This post does not seek to argue that the Indian Supreme Court was necessarily influenced by Miller in its own reasoning – though no Constitutional Court decides cases in a vacuum. Rather, this post demonstrates how when faced with similar questions about the meaning of constitutional democracy, in two cases riddled with constitutional silences and textual impasses, the respective Courts resorted to similar tools from the limited judicial toolbox to reach their final decisions.

Similar Questions

Fundamentally, the central question for the Supreme Courts in Miller and NCT Delhi was the weight to be given to the constitutional principle of representative democracy in determining the key institutional relationships within a modern State. Specifically, the Supreme Courts in both cases had to decide on the extent to which to prioritise the value of representative democracy over other conflicting values advanced by the Union executives in both cases. In both cases the executive at the Federal level sought to prioritise the value of a stronger more empowered Union executive using the interests of the Nation State as a whole to justify their claim. In both cases, the Union executive claimed that a stronger more empowered executive at the Central level was in the interests of the unity, integrity and political expediency of the Nation State as a whole.

The Miller case arose from the Brexit referendum. In the referendum held on June 23^rd 2016, the UK voted to leave the EU by a majority of 51.9% for leave and 48.1% for remain. Article 50 of the Treaty of the European Union states that “any Member State” that “decides to withdraw from the EU in accordance with its own constitutional requirements” should serve a notice of that intention. In Miller, the Supreme Court was asked to decide on whether the UK’s constitutional requirements required the executive to obtain the prior authorisation of Parliament before it could serve its notice of intention to withdraw from the EU. The alternative contention advanced by the Government was that the executive could serve this notice of intention without prior Parliamentary permission.

The UK Government proposed to use its ‘Prerogative Powers’ to serve the notice of intention to withdraw from the EU without prior Parliamentary approval. Prerogative Powers find their origin in the personal powers of the monarch from the time when the monarch was the absolute and all powerful Head of State. The residue of these powers is now vested with the British Crown in Council – where the Crown (Queen) is merely nominal head with the residue of Prerogative Powers exercised by the Cabinet in reality. As Thomas Poole has written:

The UK Constitution recognises a bundle of prerogative powers… – or ‘Ministerial executive powers’, as a Commons Select Committee prefers to call them. These are the inherent common-law powers of the executive. ‘Inherent’ and ‘common-law’ because they have not been conferred by statute and their existence and conditions of application are matters to be recognized and determined by the courts (Philip Allott, ‘The Courts and the Executive: Four House of Lords Decisions’ (1977) 36 Cambridge Law Journal 255, 265-6). Although the bundle has dwindled significantly, it still covers a range of matters… The most important relate to national defence and foreign relations. What distinguishes them politically perhaps is the need for ‘unanimity, strength and despatch’ and a connection to the notion of salus populi (e.g. Chandler v Director of Public Prosecutions [1964] AC 763). What distinguishes them legally is that they do not require Parliamentary authorization.

The argument at the core of the Respondents case in Miller was that since the UK was a representative Parliamentary democracy, operationalising representative democracy took precedence over the governmental expediency gained through use of Prerogative Powers. Similarly in NCT Delhi the core of the Respondents case was that the Constitution through Article 239 AA had expressly conferred a Legislative Assembly on Delhi modelled on the Westminster style Parliamentary system with a Westminster style Cabinet. As a result, operationalising representative democracy had to take precedence over the priorities of the Union executive.

Similar Reasoning and Outcomes

Both cases are also similar because both the Supreme Courts used structuralist reasoning to navigate through constitutional silences and textual impasses. Vasudev Devdasan has already explained the difference between textual and structural approaches to constitutional interpretation in detail in his series of posts on NCT Delhi. In summary, textualism relies exclusively on the words of a particular provision in isolation from the broader institutional relationships created by the constitutional scheme. Structuralism does not look at the text of the provision in isolation. Instead, structuralism looks at the existence and position of a constitutional provision in its relationship to the existence and position of other constitutional provisions. This is in order to identify the institutional relationships envisaged by the Constitution in order to find answers to specific questions about institutional relationships.

Both Miller and NCT Delhi cases were riddled with silences – situations where the constitutional text does not speak. In his seminal piece ‘A Syntax of the Unsaid’ Professor Lawrence Tribe writes:

Indeed, to decree that we must ignore legal silences altogether is no more plausible than to command that we ignore the uncovered parts of a canvas or the pauses in a sonata…We must therefore reformulate, and reduce to more plausible dimensions, the resistance to silence as a source of law if the failure of that resistance is to be replaced with even a modest success. Without a more explicit grammar of how silences may and may not operate in the interpretation of law – a syntax of the unsaid – we may say that law cannot be made by silence, but the echo will return: “Oh yes it can, just watch!

In both the Miller and NCT Delhi cases, the opposing parties construed the textual silences in a manner that allowed them to arrive at diametrically opposed conclusions.

In NCT Delhi the constitutional text of Article 239 AA was silent on the Delhi’s precise place in the hierarchy between Union Territory and State. The Constitutional text of Article 239 (AA) (4) was silent on whether the Lieutenant Governor was bound by the ‘aid and advice’ of the constitutionally mandated Council of Ministers of the Delhi Government. Article 74 on the other hand explicitly says that the President of India “shall” act in accordance with the Aid and Advice of his Council of Ministers. Article 246 was silent on whether Delhi was a Union Territory for its purposes. The proviso to Article 73 was silent on whether it was applicable to Delhi.

In NCT Delhi, the Central Government tried to fill these silences with the assertion that Delhi was merely a Union Territory simpliciter. As a result, even though Delhi had the same legislative competence as a State for all purposes apart from relating to Entries 1, 2 and 18 of the State List it would not have the same executive competence as a State. This meant that Parliament had plenary powers with respect to the Union Territory of Delhi under Article 246 and the Union’s coextensive executive powers remained unaffected by the proviso to Article 73. As a result the Lieutenant Governor was not bound by the ‘aid and advice’ of his Council of Ministers.

 The Delhi Government tried to fill the silences in the constitutional text with the assertion that Delhi was a unique constitutional hybrid. This led the Delhi Government to arrive at the exact opposite conclusions to the Central Government with respect to the same constitutional provisions. The Delhi Government argued that since Delhi had the same legislative competence as a State for all purposes apart from Entries 1, 2 and 18 the Constitution intended to treat Delhi akin to a State for the purposes of the executive powers of the Delhi Government. As a result, Delhi had the same executive competence as a State in all areas apart from Entries 1, 2 and 18. Further, since Delhi was not a Union Territory simpliciter but a unique constitutional hybrid the proviso to Article 73 had bite with respect to Delhi and the Union’s executive powers were displaced by the proviso to Article 73.

The Miller case too, was riddled with constitutional silences. In Miller, like in NCT Delhi both parties used these silences to arrive at diametrically opposed interpretations of the same legal provisions. The Government wished to rely on an unwritten Prerogative Power in an unwritten constitution. The key pieces of legislation governing the issue were silent on whether the Prerogative claimed by the government really did exist and whether it could be used to remove the UK from the EU. The key pieces of legislation were The European Union Referendum Act 2015 which made legal provision for the Brexit Referendum and The European Communities Act 1972 which made the UK a member of the EU and brought EU law into UK domestic law. These silences in The EU Referendum Act 2015 and The European Communities Act 1972 led the Government to argue that they had a pre-existing Prerogative Power to make and unmake treaties at the international level. Since both The EU Referendum Act 2015 and The European Communities Act 1972 were silent on the issue of Prerogative Powers and neither Act explicitly or implicitly removed the pre existing Prerogative Power this pre existing power could be used by the Government to serve its notice of intention to withdraw. The Respondents arrived at the exact opposite conclusion from the silence. They argued that the Government did not have the pre existing Prerogative Power that they claimed to have. Since both The EU Referendum Act 2015 and The European Communities Act 1972 were silent on Prerogative Powers and neither Act expressly conferred such a power, the Government had no such Prerogative Power that it could rely upon. Specifically, the Governing was seeking to use Prerogative Power to alter and destroy domestic law rights – the Respondents argued that the Government had no Prerogative Power at the international level to alter or destroy domestic law rights.

The diametrically opposed constructions of the constitutional silences is also well demonstrated by the conflicting usage of the same metaphor by the Government and the Respondents throughout the case. Both sides relied on the metaphor of the “conduit pipe” to different ends. The Government argued that The European Communities Act 1972 (which brought EU law into UK domestic law) was merely a “conduit pipe” for whatever rights and obligations the Government decided to subscribe to at the international level. They relied on Section 2 of The European Communities Act 1972 which provides that EU law rights, remedies etc “from time to time provided for by or under the Treaties” were “to be given effect or used in the United Kingdom”. The Government argued that the words “from time to time” meant that The European Communities Act envisaged that the Government could through its treaty making/unmaking Prerogative at the international level increase or decrease the flow of rights and obligations down this pipe. The Government argued that The European Communities Act 1972 was ambulatory in that it envisaged varying levels and intensities of rights flowing down this pipe over time.

The Respondents in Miller turned the “conduit pipe” argument on its head. They argued that once rights had flowed down the pipe to become a part of domestic law, the Government did not have the Prerogative Power at the international level to take away or alter these domestic law rights. Further, the Respondents argued that The European Communities Act 1972 created a new legal order by introducing a new source of law into the UK and the Government was not simply seeking to decrease the flow of rights and obligations down the pipe but to destroy the pipe altogether. They argued that Section 2 of The European Communities Act 1972 did not envisage the destruction of the “conduit pipe” altogether. They argued that there is a vital difference between changes in domestic law resulting from variations in the content of EU law that arise from new EU legislation which “flow down the pipe” and changes in domestic law resulting from withdrawal from the EU altogether.

In NCT Delhi all the judgments of the Supreme Court (both majority and separate concurring) resorted to structural reasoning to cut through the silences and textual impasse in that case. All judgments relied heavily on and prioritised the structural principle of representative Parliamentary democracy concluding that the Lieutenant Governor was bound by the ‘aid and advice’ of his Council of Ministers. Specifically, this was because Article 239 AA was an exercise of constituent power; that had introduced Westminster style representative democracy into Delhi with a Westminster style cabinet system of government. An aspect of a Westminster style cabinet was the principle of collective responsibility. As a result, ultimate executive authority must vest with the Council of Ministers in Delhi and the Lieutenant Governor must be bound by their ‘aid and advice’ where Delhi has legislative competence (this was subject to the limitation that Delhi’s status as the national capital would require situations where this principle could be departed from, as acknowledged by Justice Chandrachud in his concurring opinion).

The Miller case was heard by a 11 judge bench of the UK Supreme Court. The Supreme Court by a majority of 8-3 found in favour of the Respondents. The majority gave a single judgment, Lord Reed, Lord Carnwarth and Lord Hughes dissented and wrote separate judgments each.

In Miller too the majority of the Supreme Court resorted to structural reasoning to identify the best approach to fill the silence and resolve the textual impasse. It viewed the dispute in the Miller case from several distinct structural perspectives to determine the most appropriate outcome in the case.

The first of these perspectives involved examination of the institutional relationships between the judiciary, the Crown and Parliament over the course of several centuries. The court noted that over this historical period the judiciary had progressively curtailed the Prerogative Powers of the Crown to further the interests of representative democracy and transfer power from the Crown to Parliament. The Courts had progressively curtailed the circumstances in which Prerogative Powers could be resorted to as well as the manner in which they could be used and the extent of their impact on domestic laws when used. The majority judgment of the Supreme Court described that in many ways the history of the common law had been an unbroken history of limiting the Prerogative. The Supreme Court cited a long unbroken line of authorities through which these developments had taken place. The first of these cases was the 17^th Century Case of Proclamations. The Court then cited a number of important 20^th Century decisions. This included the following extract from Lord Parker’s judgment from the 1916 decision of The Zamora:

The idea that the King in Council, or indeed any branch of the Executive, has power to prescribe or alter the law to be administered by Courts of law in this country is out of harmony with the principles of our Constitution. It is true that, under a number of modern statutes, various branches of the Executive have power to make rules having the force of statutes, but all such rules derive their validity from the statute which creates the power, and not from the executive body by which they are made. No one would contend that the prerogative involves any power to prescribe or alter the law administered in Courts of Common Law or Equity.

The Court also cited the 1920 judgment of Attorney General v De Keyser’s Royal Hotel Ltd and the 1995 decision in R v Secretary of State for the Home Department, Ex p Fire Brigades Union. It held that these two cases had crystallised the principle that that the Crown cannot alter the common law or statute by an exercise of the Prerogative Power and nor can the Crown frustrate the purpose of a Statute – even if that Statute is not yet in existence. It also cited the 1965 judgment of Burmah Oil Co (Burma Trading) Ltd v Lord Advocate in which Lord Reid explained that the Royal Prerogative is a source of power which is “only available for a case not covered by statute. This historical analysis of institutional relationships within the British Constitution helped the Court to identify the role that it ought to take in the Miller case. After conducting its historical analysis of institutional relationships as developed through the case law, the Court concluded that: “It would be inconsistent with long standing and fundamental principle for such a far reaching change to the UK Constitutional arrangements to be brought about by ministerial decision or ministerial action alone”.

 This historical analysis and consideration of the development of the institutional relationship between judiciary, executive and legislature led to the second structural perspective that was used by the majority of the Supreme Court. The majority considered the proper relationship between the people of the United Kingdom and the executive. The majority concluded that this meant that the executive could not deprive people of domestic rights through Prerogative Power at international level. Such deprivations could only done by Parliament as this better protected the democratic interest of citizens.

The third structural perspective used by the majority of the Supreme Court was to compare the institutional arrangements in the British Constitution before The European Communities Act 1972, after its enactment and after its destruction to determine what had changed. The Court did not resort to more textualism to resolve the conflicting interpretations of the constitutional silences in The European Communities Act 1972 but instead opted to examine the bigger structural picture. It agreed with the Respondents that The European Communities Act had “effected a fundamental change in the constitutional arrangements of the United Kingdom” and introduced a new source of law entirely. It held that as a result the silences in The European Communities Act 1972 could not be construed to mean that Parliament had contemplated or intended that Ministers could cause the United Kingdom to withdraw from the European Treaties without prior Parliamentary approval.

“Working a Democratic Constitution”: The Supreme Court’s judgment in NCT of Delhi v Union of India

Today, a Constitution Bench of the Supreme Court delivered its judgment in NCT of Delhi v Union of India. Previously on this blog, I had written about the political consequences of the Court’s delay in hearing this case, and Vasudev Devadasan wrote a three-part series on the main substantive issues (Part I; Part II; Part III). Readers will recall that the dispute turned upon the “special status” of the National Capital Territory of Delhi. Not a “full state” and neither just a Union Territory, Delhi has an entire article dedicated to it: 239AA, which, read with the GNCTD Act and the Allocation of Business Rules, sets up a complicated legal structure defining how governance is to be carried out in Delhi.

Put simply, this legal structure envisages two constitutional authorities – the elected Chief Minister of Delhi (at the head of the Council of Ministers) and the Lieutenant-Governor, the appointee of the central government. When Delhi began life in the colonial era as the Chief Commissioner’s Province, it was ruled by an Administrator who, in effect, ruled as an autocrat. The spread of representative government through British India passed Delhi by, and it was only after Independence that, through incremental amendments to the Constitution (culminating in Article 239AA), representative institutions came to Delhi. During this time, the position of the Administrator was transformed into the Lieutenant-Governor [“LG“], and he became a representative of the central government in Delhi. This, ultimately, is what led to the constitutional ambiguity: in Indian states, the equivalent of the LG – the Governor – was little more than a titular head, bound to act upon the “aid and advice” of the elected government, with only a narrowly circumscribed sphere of discretion. However, as Delhi moved from an autocracy to a representative government, its status as the national capital prompted the Parliament to refrain from granting it full statehood. It is this that led to the unique situation where you had both an elected government and an LG who retained something of the old powers. And it was the precise demarcation of powers that brought the case to the Supreme Court.

At the heart of the dispute lay two articles: Article 239AA(3)(a), and Article 239AA(4). These articles state:

(3)(a) Subject to the provisions of the Constitution, the [Delhi] Legislative Assembly shall have power to  make laws for the whole or any part of the National Capital Territory with respect to any of  the matters enumerated in the State of List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1,2, and 18 of the State List and Entries 44, 65 and 66 of that List in so far as they relate to the said Entries 1,2,and 18.

…

(4) There shall be a Council of Ministers consisting of not more than ten percent, of the total number of members in the Legislative Assembly, with the Chief Minister at the head to aid and advise the Lieutenant Governor in the exercise to his functions in relation to matters with respect to which the Legislative Assembly has power to make laws, except in so far as he is, by or under any law, required to act in his discretion.

Provided that in the case of difference of opinion between the Lieutenant Governor and his Ministers on any matter, the Lieutenant Governor shall refer it to the President for decision and act according to the decision given thereon by the President and pending such decision it shall be competent for the Lieutenant Governor in any case where the matter, in his opinion, is so urgent that it is necessary for him to take immediate action, to take such action or to give such direction in the matter as he deems necessary.

To put matters very simply, there were two broad issues that arose. The first was the meaning of the phrase “aid and advise.” It was settled law – and also written into the Constitution through amendment – that in the case of the central government and the state governments, the words “aid and advise” – which are used in reference to the President and the Governors – mean “aid and advice that is binding.” In other words, the President and the Governors must act in accordance with the “aid and advice” tendered to them by the Council of Ministers. However, Delhi’s status as not-quite-a-state, and the absence of any explicit recognition that the LG had to act upon the aid and advice, allowed the Union Government to argue – and the Delhi High Court to hold – that in this regard, the LG’s position was not equivalent to the President and the Governors, and that he was not bound by the aid and advice of Delhi’s elected Council of Ministers. Let us call this Phase One: The Demarcation of Executive Power.

The second issue was about the meaning of the phrase “on any matter.” If the constitutional position was that the executive power of Delhi lay with the elected council of ministers, then the next question arose whether in all cases, the LG was authorised to have a “difference of opinion”, and escalate the matter to the President. In other words, did the phrase “any matter” mean “every matter”? Let us call this Phase Two: The Scope of the LG’s Power to Refer a Difference of Opinion to the President.

Phase One

I do not propose to go into the detailed arguments advanced in the three separate opinions, which together clock in at 535 pages. Broadly, this was the line of argument that all five judges agreed upon.

1. Representative democracy, exercised through Parliamentary institutions, characterised by principles of collective responsibility and accountability (“the Westminster system”), is at the heart of the Constitution.
2. Parliamentary democracy under the Indian Constitution envisages an elected, lawmaking body (“legislature”), and a council of ministers (“executive). The scope of operation of the legislature is defined under the Seventh Schedule of the Constitution, which lists out the fields under which the central and the state legislatures can pass laws. The power of the executive is co-extensive with that of the legislature: the executive can act in the same fields in which it is open to the legislature to pass laws. The head of the executive (President/Governor) acts in accordance with the “aid and advice” of the council of ministers.
3. Article 239AA, which explicitly creates an elected legislature for Delhi, clearly envisages that, at a broad level, Delhi is to be governed in accordance with the two principles set out above. To the extent that the text of Article 239AA is open to more than one interpretation, the interpretation that furthers the Constitution’s commitment to representative democracy must be preferred (see Chandrachud J.’s concurring opinion for a particularly clear articulation of this interpretive principle).
4. Therefore, the Council of Ministers for Delhi has the executive power to take action in all the fields in which the Delhi legislative assembly can pass laws (as per Article 239AA(3), this includes the State list (barring land, police, and law and order) and the Concurrent List of the Seventh Schedule). In this context, the aid and advice of the CoM is binding upon the LG. Under the Allocation of Business Rules, the CoM must at all times keep the LG informed, but they do not need to seek his concurrence. The purpose of information is so that the LG can decide wither to exercise the power vested in him under the proviso to Article 239AA(4) (which is what we shall discuss next).

Consequently, the judgment of the Delhi High Court, that had held that the LG was the actual head of the executive in Delhi, was incorrect.

Phase Two

In Phase One – demarcation of executive power – the Court held that, subject to the express constitutional limitations, which took land, police, and law and order out of the remit of the Delhi assembly and government (and placed other procedural limitations such as overriding federal legislative power and Presidential assent), Delhi had the character of a state: its assembly had legislative power, and its council of ministers had co-extensive executive power. The role of the LG, to this extent, was that of a titular head: he had a right to be informed, but he was also bound by the decision of the CoM.

This, then, led to the second issue: the proviso to Article 239AA(4) gave the LG a unique power that state Governors do not possess: if the LG had a difference of opinion with the CoM, then – subject to some conciliation measures provided for in the GNCTD Act and the Allocation of Business Rules – he could escalate the matter to the President. However, all five judges were in agreement that – contrary to the submission of the Union of India – the words “any matter” could not mean “every matter.” As Chandrachud J. correctly observed, if such an interpretation was to be placed on the proviso, then the rest of the scheme of Article 239AA would  come crumbling down. All three judgments are replete with statements to the effect that, under the guise of referring a difference of opinion, the LG cannot bring governance to a standstill.

However, the question then followed logically: if “any” did not mean “every”, then what did it mean? The Government of Delhi suggested that the word “any” should be restricted to the three entries of List II that were excluded from Delhi’s legislative competence under the state list – land, police, and law and order. On every other issue, the LG would remain bound by the “aid and advice” of the CoM. However, the Court rejected this interpretation, on the basis that if Delhi’s power was altogether denuded in respect of these three subjects, the question of a “difference of opinion” never arose.

The Majority opinion, authored by the Chief Justice, did not enumerate a list of subjects upon which the LG could “differ” and escalate the matter to the President. Instead, the majority held that a reference could be made only in “exceptional” circumstances, but did not elaborate – even illustratively – on what the word “exceptional” meant. A similar issue plagued Justice Bhushan’s opinion. He observed that the LG could not interfere in “routine” matters. But what does “routine” mean? In fact, Justice Bhushan’s 123-page opinion – in which he substantively agreed with everything that the other four judges held – was undone by some very loose language in Conclusion VIII, where he noted that the LG’s power is “not to be exercised in a routine manner… [but] when it becomes necessary to safeguard the interest of the Union Territory.” “Safeguard the interest” is so broad, that it practically converts “any matter” to “every matter”, which is exactly what all five judges held was not the way to read the proviso.

It was left to Chandrachud J. – in his concurring opinion – to provide concrete shape to the “exceptional” circumstances that might trigger the proviso. The basis of Chandrachud J.’s reasoning was that there was a reason why Delhi did not have full statehood: it was the national capital, and therefore, by its very nature, the Union Government would have a stake in it. Article 239AA recognised the Union Government’s stake in the national capital in two distinct ways: first, it did so in the legislative sphere: by taking land, police, and law and order out of the ambit of Delhi’s legislative powers, and giving Parliament the option to exercise lawmaking power even in the state list; and secondly, it did so in the executive sphere: by giving the LG the power to refer a difference of opinion to the President. It therefore logically followed that the scope of this power would have to be defined on the same basis: the LG could only make a reference when the issue concerned national interests, and not the interests of the NCT. According to Chandrachud J.:

“…it would be appropriate to construe the proviso as a protector of national concerns in regard to governance of the NCT. The Lieutenant Governor is a watchdog to protect them. The Lieutenant Governor may, for instance, be justified in seeking recourse to the proviso where the executive act of the government of the NCT is likely to impede or prejudice the exercise of the executive power of the Union government. The Lieutenant Governor may similarly consider it necessary to invoke the proviso to ensure compliance with the provisions of the Constitution or a law enacted by Parliament. There may well be significant issues of policy which have a bearing on the position of the National Capital Territory as a national capital. Financial concerns of the Union government may be implicated in such a manner that it becomes necessary for the Lieutenant Governor to invoke the proviso where a difference of opinion remains unresolved.” (para 142)

Although Chandrachud J. declined to set out an “exhaustive”, subject-wise list under the proviso, the illustrative list provided in the paragraph above – within the broader rubric of “national concerns” – makes it clear how the proviso is to be understood. It is submitted that the judgment is best interpreted by taking Chandrachud J.’s concurring opinion as clarifying the meaning of the phrase “exceptional situations” in the Majority’s opinion. In other words, the proviso kicks in if there is an “exceptional situation”, and an exceptional situation is where some executive action of the Delhi government clearly impinges upon a legitimate interest of the Union government qua Union government physically based in Delhi. To take a tangible example: the opening of mohalla clinics has nothing to do with national concerns, and therefore does not fall within the scope of the proviso.

Two further points: if the LG differs with the Delhi government, must she record her reasons in writing? And is there a specific time limit within which the “difference of opinion” must be forwarded by the LG to the President? On the first issue, the judgments are silent; however, given that all the judgments stress that the difference of opinion must be reasoned and not a “contrived difference” it follows virtually as a necessary implication that the LG must reduce the reasons for differing into writing. On the second issue, as well, the judgments are silent, and I submit, regrettably so. Only in his concurrence, Justice Bhushan suggested that the difference in opinion must be referred within a “reasonable time” of the LG having “seen” it, but declined to define with any further specificity what “reasonable time” meant.

No doubt, the judges intended that such issues be resolved through “constitutional statesmanship” – a phrase that, along with its variants – recurs throughout the judgments. However, given that this case only came to Court because of breakdown in “constitutional statesmanship”, it might have been better had these loopholes been firmly closed. This would have been in tune with the Supreme Court’s closing of various other loopholes that the framers, in their mistakenly optimistic view of human nature, had left to the mercy of constitutional conventions (the most recent example being the ordering of “floor tests” within 48-72 hours of election results, in case where there is more than one claimant to Chief Ministership).

Services and the ACB

There were two specific issues that were litigated before the Court: who had control over Delhi’s civil service, and who had control over the Anti-Corruption Bureau. The former, as everyone knows, has acquired specific salience in recent days. The Court did not return a specific ruling on either issue, and presumably, it will be settled by smaller benches.

On the first issue, my reading of the judgment is that the Delhi government clearly has control over the services. This follows from a combined reading of the majority judgment, and Chandrachud J.’s concurrence. The majority clearly held that barring the three excluded subjects – land, police, and law and order – GNCTD had co-extensive legislative and executive powers over all other fields in Lists II and III. “Services” features under Entry 41 of List II, which states: “State public services; State Public Service Commission.”

The Union of India argued that Entry 41 specifically used the word “state”. Delhi was not a “state”. Consequently, services were excluded from its ambit. This argument, however, was specifically addressed by Chandrachud J. in paragraphs 128 – 130 of his judgment, where he noted that the use of the word “state” throughout the Constitution was not dispositive; where appropriate according to context, “state” would include “union territories.” When you read this back into the majority’s clear statement that the executive power extends to every entry apart from the three specifically excluded, the conclusion that services lie within the executive power of the Delhi government becomes irresistible.

The ACB issue, however, remains unresolved; before the Court, the dispute was whether the ACB came within the definition of “police” or not. The Court expressed no opinion on this, and so this, now, must be argued afresh before a smaller bench.

Conclusion

The Supreme Court’s judgment (I take “judgment” here to refer to all three opinions) in National Capital Territory of Delhi v Union of India correctly identifies representative democracy as a fundamental feature of the Indian Constitution, and correctly interprets Article 239AA in a manner that, within the textual boundaries of the provision, strengthens representative democracy. Its analysis of the constitutional history of Delhi, and the application of constitutional principles to the interpretation of Article 239AA, repays close study. On the subject of the proviso to Article 239AA(4), however, it suffers from a lack of specificity, a defect that – I submit – can be remedied by treating Justice Chandrachud’s concurrence as clarifying the Majority.

One last point: the length. Again. 535 pages. How unnecessary it is, once again, is conceded by the judges themselves. In paragraphs 117 and 118, Justice Bhushan notes:

117. I have perused the elaborate opinion of My Lord, the Chief Justice with which I substantially agree, but looking to the importance of the issues, I have penned my own views giving reasons for my conclusions.

118. I have also gone through the well researched and well considered opinion of Brother Justice D.Y. Chandrachud. The view expressed by Justice Chandrachud are substantially the same as have been expressed by me in this judgment.

That this occurs at page 531 of 535 tells its own story. If there is “substantial agreement”, then the “importance of the issues” simply does not justify penning a full-fledged separate opinion, which multiplies pages, multiplies the effort involved in reading, and also multiplies the possibilities of future confusion when lawyers use semantic distinctions between separate opinions to re-litigate issues that everyone thought were settled.

 

Guest Post: Structure of Freedom – Federalism in the Context of Padmaavat

(This is a guest post by Karan Lahiri, a practicing lawyer.)

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Earlier this month, the Supreme Court passed an interim order in the case of Viacom 18 Media Pvt. Ltd. & Ors. v. Union of India & Ors., lifting the bans that the state governments of Gujarat and Rajasthan had imposed on the screening of Sanjay Leela Bhansali’s Padmaavat, the release of which faced violent protests from fringe Rajput groups. It also tied the hands of States like M.P. and Haryana, where similar executive orders were being contemplated, from following suit. Whether one sees this as a reaffirmation of constitutional values, or, more cynically, as a grasping of low-hanging fruit in these fraught times for the Court, the issues thrown up are worth discussing from the standpoint of constitutional doctrine.

In an article published in the Mint, which can be accessed here, I’ve examined how the Padmaavat interim order drew from the Aarakshan judgment (Prakash Jha Productions v. Union of India), as also the 1989 judgment in S. Rangarajan v. P. Jagjivan Ram, both of which establish that States have a positive duty to protect free expression by maintaining law and order. The sequitur is that the States cannot throw up their hands when faced with a heckling mob, and point to instances of violence caused by such hecklers to justify censorship on grounds of law and order.

Apart from addressing the issue of the States’ duty to maintain public order and protect, I believe that the Order vaguely pointed at another important idea, which ought to have been fleshed out in a more organized, coherent manner, when it said –

“Once the parliamentary legislation confers the responsibility and the power on a statutory Board and the Board grants certification, non-exhibition of the film by the States would be contrary to the statutory provisions and infringe the fundamental right of the petitioners.”

The fact that there is a specialized statutory board is not really relevant here. This should not have sounded like an argument on institutional competence. The emphasis ought to be on the fact that this board, i.e. the CBFC, is a creature of Parliamentary legislation. To drive this argument home, the Court ought to have looked at Schedule VII of the Constitution, which divides legislative fields between the Union and the States. Entry 60, List I places “[s]anctioning of cinematograph films for exhibition” as an area in the exclusive domain of the Union Parliament. The power of the States, under Entry 33 List II, extends only to “cinemas subject to the provisions of entry 60 of List I”. This means that, first, States can only regulate individual cinemas through legislation. Second, this power is specifically subordinated to the Union Parliament’s power under Entry 60, List I, making it clear that States have no power whatsoever to enter into the content of the films screened in these cinemas.

One of the few judgments of the Supreme Court which has looked into this division of power between the Union and the States is Union of India v. Motion Picture Association, where the Court observed: –

“The basic purpose of the impugned laws which deal with licensing of cinema halls, and prescribing conditions subject to which such licences can be granted, is to regulate the business activity of the exhibitors of cinematograph films. Obtaining a licence for running such cinema theatres is for the purpose of regulating this business. This purpose has a direct nexus with Articles 19(1)(g) and 19(6) of the Constitution. The source of legislation under this head can be traced to Entry 33 of List II which entitles the States to legislate on “theatres and dramatic performances; cinemas subject to the provisions of Entry 60 of List I; sports, entertainments and amusements”.

That is why State laws have been framed for regulating the terms and conditions on which a licence for exhibiting films at cinema theatres can be obtained. Part III of the Cinematograph Act, 1952 which applies to Union Territories is also in the exercise of the legislative powers under Entry 33 of List II. Since Delhi was a Union Territory and is now National Capital Territory since 1991 by virtue of the Constitution 69th Amendment Act, 1991, Parliament has the power to legislate under this entry also [see Article 246(4) and the relevant provisions of Article 239-AA]. Entry 60 List I on the other hand deals with “sanctioning of cinematograph films for exhibition”. Censorship provisions, for example, would come under Entry 60 of List I and these would directly relate to Article 19(1)(a) and Article 19(2) of the Constitution. The basic purpose of these impugned provisions is, therefore, to regulate the business of exhibiting films in cinema theatres under Entry 33 List II.”

Justice Sujata Manohar, who penned this decision, identified that States can only regulate the business activity of the individual cinema hall, whereas legislation touching the content of the film lies exclusively within the domain of Parliament. This clear delineation of legislative powers ought to have been expressed clearly in the Supreme Court’s interim order.

This line of argument, where federalism and structure blend with rights and freedoms, and where the domain of impact of one tier in a federal system is fenced in, consequently enhancing liberty (e.g. by tying the hands of States in domain of censoring cinema), is not novel. In the United States, it has been used to great effect in advancing the rights of the LGBT community in challenges to the Defence of Marriage Act (DOMA), a federal legislation that had prevented same-sex couples married under their State laws from accessing federal benefits. Judge Boudin of the U.S. Court of Appeals for the First Circuit, in Massachusetts v. HHS, while striking down DOMA, placed the regulation of the rules and incidents of marriage within the domain of the States, and said that federal statutes intruding on matters customarily within State control are to be “scrutinized with special care”. Judge Boudin pointed quite clearly to the blending of structure and rights when he said: –

“True, these federalism cases examined the reach of federal power under the Commerce Clause and other sources of constitutional authority not invoked here; but a statute that violates equal protection is likewise beyond the power of Congress. See Moreno, 413 U.S. at 541 (Douglas, J., concurring). Given that DOMA intrudes broadly into an area of traditional state regulation, a closer examination of the justifications that would prevent DOMA from violating equal protection (and thus from exceeding federal authority) is uniquely reinforced by federalism concerns.”

Therefore, federalism was used by Boudin to justify a closer scrutiny of laws violating the equal protection clause of the US Constitution. This rationale was picked up and taken much further by Justice Anthony Kennedy in the US Supreme Court’s decision in US v. Windsor, fusing federalism with the right of same-sex couples to live with dignity. He wrote: –

“Against this background DOMA rejects the long-established precept that the incidents, benefits, and obligations of marriage are uniform for all married couples within each State, though they may vary, subject to constitutional guarantees, from one State to the next. Despite these considerations, it is unnecessary to decide whether this federal intrusion on state power is a violation of the Constitution because it disrupts the federal balance. The State’s power in defining the marital relation is of central relevance in this case quite apart from principles of federalism. Here the State’s decision to give this class of persons the right to marry conferred upon them a dignity and status of immense import. When the State used its historic and essential authority to define the marital relation in this way, its role and its power in making the decision enhanced the recognition, dignity, and protection of the class in their own community. DOMA, because of its reach and extent, departs from this history and tradition of reliance on state law to define marriage.

The Federal Government uses this state-defined class for the opposite purpose—to impose restrictions and disabilities. That result requires this Court now to address whether the resulting injury and indignity is a deprivation of an essential part of the liberty protected by the Fifth Amendment. What the State of New York treats as alike the federal law deems unlike by a law designed to injure the same class the State seeks to protect.”

Kennedy used federalism a little differently from Boudin. While Boudin used it to justify a higher degree of scrutiny, Kennedy used federalism to define a constitutional baseline against which to test DOMA. His argument, at its most basic, runs a little like this: –

1. Only States can regulate marriage.
2. States have used this power to recognize the rights of same-sex couples and their right to live with dignity. [This is the baseline set by Kennedy.]
3. The Federal government, in enacting DOMA, has not only intruded into the domain of the State but also deprived the same class of people whose rights were recognized by the State of important benefit. This is, according to Kennedy, “strong evidence of a law having the purpose and effect of disapproval of that class”.

In other words, the ratcheting back of privileges by the Federal government (an interloper in the domain of States) tested against the baseline set by the States has been used by Kennedy to justify the conclusion that same-sex couples have been singled out for particular disability.

I have attempted to provide these two examples from American constitutional jurisprudence to clarify my own ideas on the link between structure and freedom, perhaps as a starting point for further examination and writing. To this end, I felt it might be useful to think aloud, in the hope that the reader may get a flavor of my claims from a few disjointed threads: –

1. I think there is a need to look at our Constitution’s structural features more closely, and map this onto the larger doctrinal topography of Indian fundamental rights jurisprudence. For instance, the fact that these structural features (such as the interplay between Entry 60, List I and Entry 33 List II) have freedom-enhancing effects in certain cases cannot lead to the conclusion that they were inherently intended to be freedom enhancing. For this to hold good, there would need to be some evidence of this in our constitutional history supporting this claim, which is perhaps one avenue of inquiry for systematic research.
2. Second, I recognize the fact that, in general, arguments flowing from federalism (or, indeed, any structural argument, even if it flows from the horizontal separation of powers between the three branches of government) do not, inherently, enhance or constrict freedom. A State law enhancing the breadth of rights may fall to a federalism objection. I am also aware that arguments flowing from structure are agnostic with respect to political valence and the desirability of outcomes. For instance, Boudin’s decision (mentioned above) cites S. v. Lopez, where the conservatives on the U.S. Supreme Court came together to strike down gun control legislation by deploying arguments founded in structure.
3. I am interested, more specifically, in the formulation and deployment of arguments where there is a hybridity, so to speak, brought about by fusing structure and freedom, and the outcomes in such cases.
4. Most particularly, it would be worth thinking about such hybridity as both a doctrinal and rhetorical tool in the hands of a judge (and, perhaps, developing a schema that explains particular cases, such as the DOMA cases in the U.S.), as also a strategy in the arsenal of constitutional lawyers, particularly in the face of a conservative bench. A conservative bench, ordinarily wary of expanding freedoms, would perhaps be more amenable to an argument addressing structure and In the Padmaavat case, the bench was headed by the present Chief Justice, who penned the judgment in Devidas Ramachandra Tuljapurkar v. State of Maharashtra, where he created a new class of “historically respected personalities”, previously unknown in our jurisprudence, and used it to justify curbing the breadth of provocative artistic expression touching upon such personalities. Arguably, a pure rights-based argument about Padmaavat, where the Karni Sena’s objections stem from the portrayal of Rani Padmini, a “historically respective personality”, may not have gained traction. What the Padmaavat order tells us, perhaps, is that in the face of a conservative Court, fusing rights with structure may make for a more successful formulation of arguments against intrusive state action.

One concluding point: it needs to be emphasized, for the sake of completeness, that the States could not have relied on Entry 1 of List II, giving the States the power to legislate on “public order”, or on Article 19(2), which allows for reasonable restrictions on free speech on grounds of “public order”, to justify their actions. This is because it would have been difficult to demonstrate that anything in the film constituted the proverbial “spark in a powder keg”, i.e. that the message has a clear tendency to disrupt public order, especially at a time when the movie had not even been released. Obviously, measures designed to maintain public order would have addressed themselves to the violent mob looking to silence expression, and not to an unreleased movie.