Roaster determination prerogative of Chief Justice: High Court

In a recently reported decision [Maverick Holdings and Investments Pvt. Ltd. v. Registrar General AIR 2010 Kar 99], a Division Bench of the Karnataka High Court has concluded that determination of roster of the High Court and the allocation of work to the judges is the sole prerogative of the Chief Justice of the High Court. The Bench dismissed with cost the petition challenging the vesting of jurisdiction by the Chief Justice in respect of a particular matter before a High Court Judge and prayed for a determination that the "Chief Justice has no authority to order to place an application filed to recall an order dismissing the writ petition before a Judge other than the Judge who passed the dismissal order".


Declaring the law, the Division Bench made the following observations;

8. We now proceed to consider the correctness of the impugned order passed by Hon'ble Chief Justice assigning the case to some other Judge. Mr. Basava Prabhu Patil learned Senior Counsel on behalf of 9th respondent has vehemently sought to justify the order impugned in this petition placing reliance upon the decision reported in (2001) 2 SCC 294 (Rajasthan High Court Advocates' Association v. Union of India) paragraph 11. the relevant portion is extracted hereunder:

11. ... The Chief Justice of the State cannot, thereafter, artificially or indirectly take away the jurisdiction belonging to one and confer it on the other. Conferring a discretion on the Chief Justice to order any case or class of cases arising in any district within the territorial jurisdiction of permanent Bench at Jaipur shall be heard at Jodhpur cannot spell out a power to define where the cause of action shall be deemed to have arisen in a writ case. 

9. Another decision relied upon by him is reported in (1998) 1 SCC 1 (State of Rajasthan v. Prakash Chand). 

10. In this regard, it is necessary to extract Rule 5 of the Rules and it reads: 

every petition or application for review, reconsideration or correction of a judgment, decree, order or sentence shall be posted before the Original bench which pronounced, made or passed such judgment, decree, order, or sentence or if the judge or any of the judges who constituted the said bench is not available by reason of death, retirement, or absence, before any other bench constituted in the same manner on the original bench. 

From a bare reading of the aforesaid rule it is clear that if any judge or judges who passed the judgment, decree or order are not available by reason of death, retirement or absence, petitions or applications mentioned therein can be posted before any other bench. 

11. Assignment of judicial work is the prerogative of Hon'ble Chief Justice. On 4-6-2008 the High Court of Karnataka established two Circuit Benches at Dharwad and Gulbarga and territorial jurisdictions were also fixed with Principal Bench at Bangalore by issuing the notification. Since judge, who has passed the order dismissing the writ petition for non-prosecution was not available in Principal Bench and was sitting at another Circuit Bench, the application filed to recall the dismissal order was assigned to another Judge having roster. This has been done by the Hon'ble Chief Justice in exercise of the administrative power. The power of Hon'ble Chief Justice in this regard is wide and the same is reflected in the following decisions relied upon by Sri Basavaprabhu S. Patil, learned Senior Counsel appearing on behalf of Sri Brijesh Paul, learned Counsel for 9th respondent.

12. A Full Bench of this Court in the case of Narasimhasetty v. Padmasetty reported in 1998(3) Kar.L.J 73 has found as under: 

12. So far as the first question is concerned, Rule 6 of the High Court Rules in unambiguous terms confers an absolute power on the Chief Justice to constitute benches and allot/distribute judicial work amongst them. This power can be exercised only by the Chief Justice of the High Court and not by any puisne Judge or any bench comprised of them. The provisions made in the said Rule has now been recognised by the Supreme Court as an absolute procedural law ensuring maintenance of judicial discipline and proper functioning of the High Court in the case, of State of Rajasthan v. Prakash Chand and Ors. on the review of catena of decisions on the point has approved the view taken by the Full Bench of Allahabad High Court in case of Sanjay Kumar Srivastava v. Acting Chief Justice. In this decision it was inter alia held that: 

In view of the above, it is clear that the Chief Justice enjoys a special Status not only under Constitution but also under Rules of Court, 1952 made in exercise of powers conferred by Article 225 of the Constitution. The Chief Justice alone can determine jurisdiction of various Judges of the Court. He alone can assign work to a Judge sitting alone and to the Judges sitting in Full Bench. He alone has the jurisdiction to decide which case will be heard by two or more Judges. 

13. The conferment of this power exclusively on the Chief Justice is necessary so that various Courts comprising of the Judges sitting alone or in Division Bench etc., work in a Co-ordinated manner and the jurisdiction of one Court is not overlapped by other court. If the Judges were free to choose their jurisdiction or any choice was given to them to do whatever case they may like to hear and decide, the machinery of the Court would collapse and the judicial functioning of the Court would cease by generation of internal strife on account of hankering for a particular jurisdiction or a particular case. The nucleus for proper functioning of the Court is the "self and "judicial" discipline of Judges which is sought to be achieved by rules of Court by placing in the hands of the Chief Justice full authority and power to distribute work to the Judges and to regulate their jurisdiction and sittings. 

14. In view of the said pronouncement of law by the Supreme court, since the existence and proper functioning of an independent judiciary, like the High Court, is a part of the essential basic structure of our Constitution, all the legislative Acts and the administrative or executive orders concerning the High Court administration must conform with the law laid down by the Supreme Court. If there be any irreconcilable statutory provision or order, then the same has to be read down so as to give supremacy to the powers of the Chief Justice in constituting the Benches and allocation/distribution of judicial work among them. All the provisions of the High Court Act and the rules framed thereunder including the provisions for intra-Court appeal have to be read as being subject to the said power of the Chief Justice. 

13. A Division Bench of this Court in the case of Bab Mahabaleshar Revankar v. Syndicate Bank reported in ILR 1992 Kar 3477 has held at paragraph 4 as under: 

Therefore, in view of Rule 5 of Chapter III of the Rules it is open to any other similar Bench to review the order passed by a Judge.... 

14. A single Judge of this Court in the case of Prabhakar, M. v. V. Venkataswamy reported in 1982(2) Kar.L.J 446 has held that: 

The application having been posted by special order of Chief Justice, there was no violation of Rules 4 and 5 of Chapter X of the Rules. 

15. In view of the clear pronouncements of the Apex Court, Full Bench and Division Bench and Single Judge decisions regarding the powers of Hon'ble Chief Justice in the matter of allocation of cases and assignment of roster to Hon'ble Judges and for the reasons assigned by the Hon'ble Chief Justice in the impugned order, we hold that the action of Hon'ble Chief Justice impugned in this writ petition is legal and valid and the impugned order need not be quashed. The declaration sought that the impugned order is contrary to Rule 5 of the Rules cannot be issued and the prayer is mis conceived. The petition is mischievous one and therefore the same is liable to be dismissed with costs. 

Have a look at the decision.

Necessary and Proper Parties: The law revisited.

In a recent decision the Supreme Court has explained the rule relating to necessary parties to a suit. Firmly embedded in the Code of Civil Procedure, the principle of non-joinder effective keeps a check on the claims of a party from denying him the rights unless the necessary and proper persons are made parties to the suit. The Supreme Court was dealing with a similar challenge from a decision of the Bombay High Court and considering the occasion thought it fit to clarify the law by explaining the principles underlying therein.

The Bench inter alia observed as under;

8. The general rule in regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. But this general rule is subject to the provisions of Order I Rule 10(2) of Code of Civil Procedure (‘Code’ for short), which provides for impleadment of proper or necessary parties. The said sub-rule is extracted below:

“Court may strike out or add parties. 

(2) The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.”

The said provision makes it clear that a court may, at any stage of the proceedings (including suits for specific performance), either upon or even without any application, and on such terms as may appear to it to be just, direct that any of the following persons may be added as a party:  (a) any person who ought to have been joined as plaintiff or defendant, but not added; or (b) any person whose presence before the court may be necessary in order to enable the court to effectively and completely adjudicate upon and settle the question involved in the suit. In short, the court is given the discretion to add as a party, any person who is found to be a necessary party or proper party. A ‘necessary party’ is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a ‘necessary party’ is not impleaded, the suit itself is liable to be dismissed. A ‘proper party’ is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance. 

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12. Let us consider the scope and ambit of Order I of Rule 10(2) CPC regarding striking out or adding parties. The said sub-rule is not about the right of a non-party to be impleaded as a party, but about the judicial discretion of the court to strike out or add parties at any stage of a proceeding. The discretion under the sub-rule can be exercised either suo moto or on the application of the plaintiff or the defendant, or on an application of a person who is not a party to the suit. The court can strike out any party who is improperly joined. The court can add anyone as a plaintiff or as a defendant if it finds that he is a necessary party or proper party. Such deletion or addition can be without any conditions or subject to such terms as the court deems fit to impose. In exercising its judicial discretion under Order 1 Rule 10(2) of the Code, the court will of course act according to reason and fair play and not according to whims and caprice. This Court in Ramji Dayawala & Sons (P) Ltd. vs. Invest Import – 1981 (1) SCC 80, reiterated the classic definition of ‘discretion’ by Lord Mansfield in R. vs. Wilkes – 1770 (98) ER 327, that ‘discretion’ when applied to courts of justice, means sound discretion guided by law. It must be governed by rule, not by humour; it must not be arbitrary, vague, and fanciful, ‘but legal and regular’. We may now give some illustrations regarding exercise of discretion under the said Sub-Rule. 

12.1) If a plaintiff makes an application for impleading a person as a defendant on the ground that he is a necessary party, the court may implead him having regard to the provisions of Rules 9 and 10(2) of Order I. If the claim against such a person is barred by limitation, it may refuse to add him as a party and even dismiss the suit for non-joinder of a necessary party.

12.2) If the owner of a tenanted property enters into an agreement for sale of such property without physical possession, in a suit for specific performance by the purchaser, the tenant would not be a necessary party. But if the suit for specific performance is filed with an additional prayer for delivery of physical possession from the tenant in possession, then the tenant will be a necessary party in so far as the prayer for actual possession.

12.3) If a person makes an application for being impleaded contending that he is a necessary party, and if the court finds that he is a necessary party, it can implead him. If the plaintiff opposes such impleadment, then instead of impleading such a party, who is found to be a necessary party, the court may proceed to dismiss the suit by holding that the applicant was a necessary party and in his absence the plaintiff was not entitled to any relief in the suit.

12.4) If an application is made by a plaintiff for impleading someone as a proper party, subject to limitation, bonfides etc., the court will normally implead him, if he is found to be a proper party. On the other hand, if a non-party makes an application seeking impleadment as a proper party and court finds him to be a proper party, the court may direct his addition as a defendant; but if the court finds that his addition will alter the nature of the suit or introduce a new cause of action, it may dismiss the application even if he is found to be a proper party, if it does not want to widen the scope of the specific performance suit; or the court may direct such applicant to be impleaded as a proper party, either unconditionally or subject to terms. For example, if ‘D’ claiming to be a co-owner of a suit property, enters into an agreement for sale of his share in favour of ‘P’ representing that he is the co-owner with half share, and ‘P’ files a suit for specific performance of the said agreement of sale in respect of the undivided half share, the court may permit the other co-owner who contends that ‘D’ has only one-fourth share, to be impleaded as an additional defendant as a proper party, and may examine the issue whether the plaintiff is entitled to specific performance of the agreement in respect of half a share or only one-fourth share; alternatively the court may refuse to implead the other co-owner and leave open the question in regard to the extent of share of the vendor-defendant to be decided in an independent proceeding by the other co-owner, or the plaintiff; alternatively the court may implead him but subject to the term that the dispute, if any, between the impleaded co-owner and the original defendant in regard to the extent of the share will not be the subject matter of the suit for specific performance, and that it will decide in the suit, only the issues relating to specific performance, that is whether the defendant executed the agreement/contract and whether such contract should be specifically enforced. In other words, the court has the discretion to either to allow or reject an application of a person claiming to be a proper party, depending upon the facts and circumstances and no person has a right to insist that he should be impleaded as a party, merely because he is a proper party.

Have a look at the decision.

No human right violation for non-allotment of land: High Court

In a recently reported decision [Maharashtra Housing & Area Development Authority v. Maharashtra State Human Rights Commission, AIR 2010 Bom 104], the Bombay High Court has declared that no human rights of a citizen can be said to be violated for not having been allotted land by the Government even after having applied for the same. The High Court thus ruled that the Human Rights Commission had no jurisdiction to pass an order in such a matter.

Allowing the petition of the land alloting authority and setting aside the order of the Human Rights Commission, the High Court observed inter alia as under;

12. The Respondent No.2 though claiming rights under that contract did not sue in a Civil Court for enforcement of her right. She instead filed the Petition before the Human Rights Commission. She claims that her human rights are effected.

13. Human Rights as defined in Section 2(d) of the Protection of Human Rights Act, 1993 (the Act) means: 

The rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants and enforceable by Courts in India .

The Universal Declaration of Human Rights set out the rights of all humans qua their residence and property thus:

Article 3: Everyone has the right to life, liberty and security of a person. Article 13(1): Everyone has the right to freedom of movement and residence within the borders of each state.

Article 17(1): Everyone has the right to own property alone as well as an in association with others.

Article 17(2): No one shall be arbitrarily deprived of his property.

14. The Respondent No.2 eloquently argued in person and urged that the right to obtain a residence by a women such as her, who is a spinster, upon performance of her part of the contract by payment of the consideration required for the allotment, is a human right because if the tenement is not allotted to her she would be shelterless and her right to life as well as dignity as a human being would be adversely effected. It is on this premise that the order impugned by MHADA as being without jurisdiction has been passed by the State Human Rights Commission under the Protection of Human Rights Act, 1993 directing MHADA to give her one tenement as aforesaid.

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17. It may at once be mentioned that the right to the property which was earlier a Fundamental Right under Article 31 to the Constitution, was omitted therefrom by the 44th amendment to the Constitution (w.e.f.20th June 1979). 

18. The term Human rights itself denotes rights relating to the aspects enunciated in the definition. Hence it would be rights of humans relating to their life, liberty, equality and dignity as against the rights with regard to their properties. 

19. Such Human Rights relating to life, liberty, dignity and equality effectively come into play when the act of State by virtue of any legislation or delegated legislation is considered: to cite it was considered by the Supreme Court in the case of M/s. Shantistar Builders Vs. Narayan Khimalal Totame & Ors. (1990) 1 SCC 520 whilst upholding the Urban Land (Ceiling and Regulation) Act, 1976 as a Social legislation thus: 

The right to life would take within its sweep the right to food, the right to clothing, the right to decent environment and a reasonable accommodation to live in. The difference between the need of an animal and a human being for shelter has to be kept in view. For the animal it is the bare protection of the body, for a human being it has to be a suitable accommodation which would allow him to grow in every aspect physical, mental and intellectual. The Constitution aims at ensuring fuller development of every child. That would be possible only if the child is in a proper home. It is not necessary that every citizen must be ensured of living in a well built comfortable house but a reasonable home particularly for people in India can even be mud-built thatched house or a mud-built fireproof accommodation. The growing realisation of the disparity between the increase in the home-less urban population and lack of corresponding rise in accommodation led to the passing of the Urban Land (Ceiling and Regulation) Act and acquisition of vacant sites for purposes of housing.

20. This would not apply to individual rights of parties even against the State which require to be effectuated upon contracts entered into between parties. 

21. Following the case of Shantistar Builders the Supreme Court upheld the notification of the Government under Section 17(1A) of the Land Acquisition Act upholding the urgency for grant of residential accommodation to persons from Scheduled Caste and Scheduled Tribes.In the case of Chameli Singh Vs. State of U.P. AIR 1996 SC1051 the Supreme Court observed that the right to life included the right to food, clothing and housing. Therefore State was enjoined to promote with special care the interest of weaker sections of the society. It was held that the right to residence and settlement was a Fundamental Right under Article 19(1)(c) of the Constitution and a facet of the right to life. Consequently,the planned development by way of massive housing scheme undertaken by the State as its economic policy was considered. The opportunity and facility to be provided by the State to build the houses was appraised. The infrastructure necessary to enable weaker sections to live and develop as a human being was cogitated. The requirement of having a property and capacity for acquiring property was essentially considered. The squalid residential environment which is a constant threat to health and life was required to be removed as provided in the UN Centre for human settlement by way of a global strategy. Judicial notice was taken of the condition in which weaker sections lived. Following the case of Pahwa Vs. Lt. Governor of Delhi (1985) 1 SCR 588 it was held that the notification issued under Section 17(4) of the Land Acquisition Act would be valid and could not interfered with because the urgency for providing houses to weaker sections was always urgent. It being a national problem and a constitutional obligation, it was observed that the provision for compensation to the persons whose land was acquired for being provided to weaker sections under Section 23(1) of the Land Acquisition Act was a factor which obligated urgent acquisition.

22. It can be seen that the enforcement of the right of residence as a part of the Fundamental or Human Rights can be enforced against the State under legislation or delegated legislation of the scheme. Though such a right exists the entire populace cannot claim to be given a flat or such other residence from the government under any contract sought to be entered into by them. A right under a contract is a civil right. It can be enforced against the other contracting party whose obligation is set out under the contract. Those rights are enforceable in civil Courts. Consequently for all those rights which arise under any contract or a specific statutory provision can be enforced thereunder in the appropriate forum only. It is for any aberration under State policy, government inaction or as a residuary provision where no statutory rights can be enforced though Civil Courts that the jurisdiction of the Human Rights Commission would come into play. On individual basis for contractual right such jurisdiction is not conferred upon Human Rights Commission.

Have a look at the decision.

No right to continue curing by prayer: High Court

In a short and crisp, recently reported decision [AIR 2010 Ker 103, K.P.HAFSATH BEEVI v. STATE OF KERALA] the Kerala High Court has declared that right to practice medicine propagating cure on the basis of prayer is not entitled to protection under the constitutional provision which guarantees freedom of business and profession to the citizens.

The High Court inter alia observed as under;

Having heard learned counsel for parties, the following emerge. Firstly, in terms of Article 19 of the Constitution, the petitioner has a right to pray and to perpetuate her ideas as to religion, even by being part of a peaceful assembly, and to move freely for such purpose. Secondly, the State and its officers are entitled to reasonably restrict such activity if it tends to offend security, public orders, decency, morality and sovereignty and integrity of India. This includes reasonable restrictions on the basis of public health and public tranquility; such restrictions being imposable in the interest of the general public. Thirdly, Article 51A(h) provides that it shall be the duty of every citizen of India to develop a scientific temper, humanism and the spirit of enquiry and reform. Balancing the duties of the petitioner in this regard and her fundamental rights referable to Part III of the Constitution, it has necessarily to he held that the impugned orders, to the extent they require the petitioner to desist from offering cures for illness on the basis of prayers, is a reasonable restriction imposed on grounds of public health, morality etc., particularly when she has no authentic scientific certification in support of any claim of such ability to cure.

For these reasons the High Court allowed the claim of the Government that they were entitled to restrict such practices being covered under 'reasonable restrictions' which serve as an effective fetter on the constitutional right of freedom to practice business or profession of one's choice.

Have a look at the decision.

Compounding FEMA offences: RBI

In a Circular issued recently, the Reserve Bank of India has explained the backdrop and the changes made in the Foreign Exchange (Compounding Proceedings) Rules, 2000 relating to compounding of offences under the Foreign Exchange Management Act, 1999 (FEMA). A.P. (DIR Series) Circular No. 56 [RBI/2009-10/508] clarifies the method to apply for such compounding, the scope and manner of compounding, issuance of compounding order, prerequisites of compounding process etc. to clarify the framework to this effect. 

In respect of the power being exercised by RBI to this effect, the Circular notes as under;

The compounding  of the contravention under the FEMA, 1999 was implemented by the Reserve Bank by putting in place the simplified procedures for compounding with effect from February 1, 2005 with a view to providing comfort to the citizens and corporate community by minimizing transaction costs, while taking a serious view of the wilful, malafide and fraudulent transactions. It has been decided to put in place an updated procedure for compounding of contravention/s under FEMA on the basis of observations made over the last few years on the compounding process on a continuous basis and the experience gained in dealing with compounding applications. The objective is rationalization and streamlining of the process and the procedure for compounding and to enhance transparency and effect smooth implementation of the compounding process. The directions contained in the compounding of contravention/s issued vide A.P. (DIR Series) Circular No.31 dated February 1, 2005 are superseded by this circular.

Non-registration of same-sex marriage no violation of human rights: ECHR

In a recent decision in the matter of Schalk and Kope v. Austria, the European Court of Human Rights (ECHR) has held that there is no requirement under the European Human Rights law to allow same-sex couples to marry. In this case, "the applicants alleged in particular, that they were discriminated against as, being a same-sex couple, they were denied the possibility to marry or to have their relationship otherwise recognised by law" and that "the applicants argued that in today’s society civil marriage was a union of two persons which encompassed all aspects of their lives, while the procreation and education of children was no longer a decisive element. As the institution of marriage had undergone considerable changes there was no longer any reason to refuse same-sex couples access to marriage". 

The Court was, however, not impressed. The provisions of the European Convention of Human Rights were examined to hold that the bar to registration of same-sex marriage did not constitute a violation thereof. As a reminder, the ECHR also noted "that marriage has deep-rooted social and cultural connotations which may differ largely from one society to another. The Court reiterates that it must not rush to substitute its own judgment in place of that of the national authorities, who are best placed to assess and respond to the needs of society". Have a look at the decision.

National Green Tribunal Act, 2010 passed

The Gazette of India has recently carried the The National Green Tribunal Act, 2010 which received the assent of the President of India on June 2, 2010 to covert the bill into law. The Act provides for "the establishment of a National Green Tribunal" meant  towards an "effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal rights relating to environment" wherein it is included within the scope of the Tribunal to give "relief and compensation for damages to persons and property".

The enactment of the law takes into account the (i) United Nations Conference on the Human Environment which took place at Stockholm in June, 1972 and also the (ii) United Nations Conference on Environment and Development which took place at Rio de Janeiro in June 1992, in both of which India was a participant, (iii) the judicial pronouncements in India construing the right to healthy environment as a part and parcel of the right to life guaranteed under Article 21 of the Constitution of India, to constitute the Tribunal conferring the jurisdiction to decide on environmental issues, considering the "involvement of multi-disciplinary issues" relating to environment.

The Act [vide Section 14] provides that "the Tribunal shall have the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of any legal right relating to environment) is involved" besides the questions which arise of "out of the implementation" of the specified enactments. The power to provide for "relief and compensation to the victims of pollution and other environmental damage", "for restitution of property damaged" and "restitution of environment" is also within the purview of the Tribunal in terms of Section 15.

The importance of the enactment and the seriousness with which the Government has constituted the Tribunal can be gauged from the fact that the Act provides for imprisonment upto three years and a fine which may extend to ten crore rupees (in case of individuals whereas it can be upto twenty five crores rupees for a company) as penalty for non-compliance with the orders of the Tribunal whereas there is a separate provision for prosecution of directors of a company in such cases.

To allow flexibility of working to the Tribunal, Section 19 provides that the technicalities of the Code of Civil Procedure shall not restrain the working of the Tribunal which would rather be guided by the principles of natural justice whereas Section 22 provides that an appeal against the decision of the Tribunal would lie straight to the Supreme Court of India. The jurisdiction of civil courts is specifically excluded in matters falling within the domain of the Tribunal. 

The Act, even though published, would come into effect only upon a notification to such effect being made by the Central Government. Once that is so done, the National Environment Tribunal Act of 1995 and the National Environment Appellate Authority Act of 1997 would stand repealed. Once can only hope that this is soon done and the country's environment gets a pro-active watchdog instead of requiring the environmental concerns being raised at their own spirit and cost by public spirited citizen.

Exchange Rate Manipulation and International Law

In a recent update from the American Society of International Law we find the coverage on a interesting issue; the international law relating to exchange rate manipulation. Written in the backdrop of the United States urging (or rather pressurizing) the Chinese Government to undertake reform of the currency valuation of China, the paper covers over the 'Existing International and Domestic Law on Exchange Rate Manipulation' covering the IMF mandate, the domestic law of United States on the issue, the stipulations under the WTO agreements to make interesting insights on the issue. The paper provides an interesting insight on the issues involved and the possible outcomes under international law. 

Have a look at the paper. 

Doctors cannot practice at residence: High Court

Being of the view that the advanced machines employed in medicine today are too much of a nuisance to the common folk and also that the garbage emanating from medical treatment is injurious if disposed generally, the Allahabad High Court in a recent decision has upheld the local body notification directing the doctors to stop particising in residential colonies even if they own the houses. The High Court thus directing seizure of activities involving various machinery by the doctors in residential complexes while allowing consultancy activities only in such premises.

The High Court inter alia observed as under;

 12. All the petitioners are qualified and registered medical practitioners. They have a right to run their private medical clinics for giving professional advice to the patients. A doctor's clinic run in a portion of the residential house, which may either be small and sufficiently big but which may not occupy the entire area with a waiting hall, a dispensary or even a small diagnostic facility may not convert the user of a premise from a residential user to commercial user. A non-nuisance professional activity running by doctors, lawyers, consultant, architect, chartered accountant, property consultants, government guides may also fall in the same category. The trouble starts when the doctor or any other consultants uses a substantial part of the building, for the activity including the incidental activities such as x-ray, ultrasonography, pathology, operation theatre and wards in which patients are admitted. These activities together with the consultancy, overreaches the limit of the user for professional use.

12. The counsels for the State and UP Awas Evam Vikas Parishad have not placed before us any bye laws or regulations made by UP Awas Evam Vikas Parishad, which may prohibit such activities. The condition of allotment/hire purchase/purchase, however, clearly provides that the dominant user of the building/plot on which the constructions are raised should be residential and that allottee/purchaser should not use the premises for business or commerce.

13. In the present case, we find that all the petitioners are using the residential houses for the purposes of running their clinics and have also converted the use of the dominant portion of the building for providing activities such as x-ray, ultrasonography, pathology, operation theatre, private wards and general wards. Some of these wards are so small, that they may hardly accommodate one bed in the room. The argument advanced by Shri Arvind Srivastava, that such user is incidental to medical practice, cannot be accepted. No reasonable person in such case can say that the user of the building has not been changed from residential to commercial.

14. In these writ petitions all the doctors have extended their consultancy to include the diagnostic techniques as well as admitting patients in the rooms and halls converted as wards. The professional activity in also these cases has converted the user of the house from residential to commercial for which all the doctors have therefor applied for and have electric connections for commercial purposes.

15. The rights given to carry on profession, including medical profession under Article 19 (1) (g) of the Constitution of India, are subject to reasonable restrictions in public interest. Such restrictions can be placed by the law made by the State under Article 19 (6) or may be imposed under an agreement to which the person may subscribe, in the interest of other residents. We do not find that a notice for cancellation of registration is a restriction on the right of a person to practice profession. The UP Awas Evam Vikas Parishad and Chief Medical Officer have not passed any such orders directing the petitioners to stop medical practice. They have only cautioned them to stop using the premises for commercial purposes. If they want to continue to use the diagnostic techniques and surgeries and admit patients, they should shift the place of their business to some other place, where such activity is permitted. The user of the premises by the professionals for a purpose other than the purpose for which it was allotted or purchased by him is not a restriction on the right to carry on the profession.

16. The medical professionals running nursing homes are also required to obtain registration for running ultrasound machines, permission from the Atomic Energy Commission for the use of x-ray plant and to dispose of the medical waste after obtaining registration and the facilities provided under the Bio Medical Waste Management Rules. There is nothing on record to show that the petitioners have obtained these permissions and licenses. 

17. The restrictions placed by the UP Awas Evam Vikas Parishad for using a residential accommodation allotted/purchased for any purpose other than residential purposes is also for maintaining a peaceful environment for other residents in the residential colonies. Any business or commercial activity involves these houses to be visited by patients and their relatives, use of motor vehicles, parking, and putting pressure of the civic amenities such as electricity, water, sewer and roads. It also affects the tranquility of the residential area used by the senior citizen and the children. The change of the dominant user of the building in a residential colony not only affects the immediate neighbors but all the residents of the colony and thus it is essential that in the residential colonies, the constructions should be used dominantly for residential purposes.

18. We do not find that the petitioners have been asked to stop their medical practice or to stop the patients visiting in their clinics. They have been simply asked to stop the use of diagnostic techniques including x-ray, ultrasonography, pathology, running of operation theatre, maternity centres and for using their houses for admitting patients. Such an activity is violative of the terms and conditions of purchase and constructions of the houses and the land use, and can be regulated by the UP Awas Evam Vikas Parishad both by giving notice of cancellation of the allotment or by taking steps to cancel the registration under which such activity is being carried out. The Chief Medical Officer, Etawah has registered the petitioners as medical practitioners, under a declaration given by them to run the consultancy clinics the petitioners. The petitioners are obliged to abide by their declarations.

19. Inspite of the repeated reminders given by the Court, the State Government has not made any law regulating the medical practice including the running of private nursing homes/diagnostic clinics and hospital. In the absence of any law covering the field the Court has to apply the test of reasonableness which may protect both the residents of the colony as well as patients visiting the doctors. It is inhuman for the patients to be given professional service in such small residential buildings. The size of the rooms of operation theatre, private wards and general wards would show that the doctors in order to earn money have converted small houses into nursing homes packing up the patients in unhygienic cubicles. A room measuring 9.5x9.5' can hardly be used as a hygienic private ward, and in any case a room measuring 15.1'x19' cannot be used as a general ward. The petitioners are apparently using the residential accommodation for running nursing homes putting their patients to serious inconvenience.

20. We do not find any good ground to interfere with the notices and the directions given by the Chief Medical Officer to the petitioners to shift their activities other than consultancy including diagnostic, surgical, and admitting the patients to a place other than the residential houses in the Awas Evam Vikas Colony. It will, however, be open to the petitioners to either shift the medical services, except the consultancy from their residential houses in the Awas Evam Vikas Colony to any other place, or to confine their activities in the colony only for consultancy. 

Have a look at the decision.

Easy Exit Scheme, 2010

Having examined that "certain companies have been registered under the Companies Act, 1956, but due to various reasons some of them are inoperative since incorporation or commenced business but became inoperative later on and are not filing their due documents timely with the Registrar of Companies" and also being of the view that these "companies may be defunct and are desirous of getting their names strike off from the Register of Companies", the Ministry of Corporate Affairs, Government of India has proposed Easy Exit Scheme, 2010 which gives "an opportunity to the defunct companies, for getting their names strike off from the Register of Companies".

The Scheme is of limited duration and expires on 31st August, 2010 and does not apply to those companies which are enumerated on the negative list such as listed companies; companies registered under section 25 of the Companies Act, 1956; vanishing companies; companies where inspection or investigation is ordered and being carried out or yet to be taken up or where completed prosecutions arising out of such inspection or investigation are pending in the court; etc. The Scheme specifies the procedure to be followed by the eligible companies whereupon following the same, the Registrar of Companies would strike off the name of the Company.

Company Law Settlement Scheme, 2010

Observing that "a large number of companies are not filing their due documents timely with the Registrar of Companies" because of which "records available in the electronic registry are not updated and thereby are not available to the stakeholders for inspection" and also that because of "not filing the documents on time, companies are burdened with additional fee and facing the prosecutions also", the Ministry of Corporate Affairs, Government of India has recently introduced the Company Law Settlement Scheme, 2010 "to give an opportunity to the defaulting companies to enable them to make their default good by filing belated documents and to become a regular compliant in future".

The Scheme proposes "condoning the delay in filing documents with the Registrar, granting immunity from prosecution and charging additional fee of 25 percent of actual additional fee payable for filing belated documents under the Companies Act, 1956", thereby ensuring that defaults are brought in line with the optimal set-up. The Scheme, however is of a limited duration and expires on 31st August, 2010.

Press and right to privacy of public figures:The law revisited

Whether those holding public offices can enjoy the same level of privacy as guaranteed to the other citizens by the Constitution, is a question perpetually doing the rounds among law circles. In a recent decision the Madras High Court revisited the issue in an allegation of invasion of right to privacy of the State Minister by the press having published his photograph on a daily basis along with the photograph of his wife and child. While the High Court declared the bar with respect to invasion of privacy of public figures was higher than the ordinary citizens, given the public offices they held, the invasion nonetheless could be alleged with respect to wife and the child. 


The High Court inter alia observed as under;

13. The Apex Court has held in a decision reported in (1994) 6 SCC 632 (R.RAJAGOPAL ALIAS R.R.GOPAL AND ANOTHER V. STATE OF TAMIL NADU AND OTHERS) as follows:

"26.We may now summarise the broad principles flowing from the above discussion:

(1) The right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by Article 21. It is a right to be let alone . A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, childbearing and education among other matters. None can publish anything concerning the above matters without his consent whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however, be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy.

(2) The rule aforesaid is subject to the exception, that any publication concerning the aforesaid aspects becomes unobjectionable if such publication is based upon public records including court records. This is for the reason that once a matter becomes a matter of public record, the right to privacy no longer subsists and it becomes a legitimate subject for comment by press and media among others. We are, however, of the opinion that in the interests of decency [Article 19(2)] an exception must be carved out to this rule, viz., a female who is the victim of a sexual assault, kidnap, abduction or a like offence should not further be subjected to the indignity of her name and the incident being publicised in press/media.

(3) There is yet another exception to the rule in (1) above indeed, this is not an exception but an independent rule. In the case of public officials, it is obvious, right to privacy, or for that matter, the remedy of action for damages is simply not available with respect to their acts and conduct relevant to the discharge of their official duties. This is so even where the publication is based upon facts and statements which are not true, unless the official establishes that the publication was made (by the defendant) with reckless disregard for truth. In such a case, it would be enough for the defendant (member of the press or media) to prove that he acted after a reasonable verification of the facts; it is not necessary for him to prove that what he has written is true. Of course, where the publication is proved to be false and actuated by malice or personal animosity, the defendant would have no defence and would be liable for damages. It is equally obvious that in matters not relevant to the discharge of his duties, the public official enjoys the same protection as any other citizen, as explained in (1) and (2) above. It needs no reiteration that judiciary, which is protected by the power to punish for contempt of court and Parliament and legislatures protected as their privileges are by Articles 105 and 104 respectively of the Constitution of India, represent exceptions to this rule. 

 (4) So far as the Government, local authority and other organs and institutions exercising governmental power are concerned, they cannot maintain a suit for damages for defaming them.

(5) Rules 3 and 4 do not, however, mean that Official Secrets Act, 1923, or any similar enactment or provision having the force of law does not bind the press or media.

(6) There is no law empowering the State or its officials to prohibit, or to impose a prior restraint upon the press/media."

14. This Court had an occasion to follow the above decision in a case reported in (2006) 2 M.L.J. 689 (R.RAJAGOPAL @ R.R.GOPAL @ NAKKHEERAN GOPAL AND ANOTHER V. MS.J.JAYALALITHA AND ANOTHER) and has held as follows:

"29. The fundamental right of freedom of speech is involved in these proceedings and not merely the right of liberty of the press. If this action can be maintained against  newspaper, it can be maintained against every private citizen who ventures to criticise the ministers who are temporarily conducting the affairs of the Government. In a free democratic society those who hold office in Government and who are responsible for public administration must always be open to criticism. Any attempt to stifle or fetter such criticism amounts to political censorship of the most insidious and objectionable kind. As observed in Kartar Singh's case (supra) the persons holding public offices must not be thin-skinned with reference to the comments made on them and even where they know that the observations are undeserved and unjust, they must bear with them and submit to be misunderstood for a time. At times public figures have to ignore vulgar criticisms and abuses hurled against them and they must restrain themselves from giving importance to the same by prosecuting the person responsible for the same. In the instant case, the respondents have already chosen to claim damages and their claim is yet to be adjudicated upon. They will have remedy if the statements are held to be defamatory or false and actuated by malice or personal animosity. 

30. As observed in R.Rajagopal's case (supra) the right to privacy has two aspects which are but two faces of the same coin. First the general law of privacy which offers a tort action for damages resulting from an unlawful invasion of privacy and secondly, the constitutional recognition given to the right to privacy which protects personal privacy against unlawful Government invasion. Though the right to privacy can be characterised as a fundamental right, as held in R.Rajagopal's case (supra) it is not an absolute right. In Time, Inc v. Hill 385 US 374 it was pointed out that in the case of public officials, insofar as their official function is involved, they are substantially without a right to privacy and factual error and content defamatory of official reputation or both, are insufficient for the award of damages for false statements unless actual malice knowledge that the statements are false or reckless disregard of the truth is alleged and proved. In a democratic set up a close and microscopic examination of private lives of public men is the natural consequence of holding of public offices. What is good for a private citizen who does not come within the public gaze may not be true of a person holding public office. What a person holding public office does within the four walls of his house does  not totally remain a private matter. We agree with Mr.Jothi that the scrutiny of public figures by media should not also reach a stage where it amounts to harassment to the public figures and their family members and they must be permitted to live and lead their life in peace. But the public gaze cannot be avoided which is a necessary corollary of their holding public offices.

31. We are also unable to accept the submission advanced by Mr.Jothi that the appellants should be asked to seek prior verification from the respondents before publishing any articles and publish the denial, if any, of the respondents. According to Mr.Jothi rule of prior verification is laid down in R.Rajagopal's case (supra). We are afraid that the submission of the learned counsel is based on total mis-interpretation of the observations of the Supreme Court. The Supreme Court has not laid down that the prior verification of the facts is must in all such cases. All that the Supreme Court indicated is that the proof that the member of the press or media acted after a reasonable verification of the facts would be sufficient. However, at the same time, it must be noted that the Supreme Court in R.Rajagopal's case (supra) has clearly held that a citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child bearing and education, among other matters and none can publish anything in reference to the above matters without his/her consent whether laudatory or critical."

15. It would be quite clear that there is no law empowering the State or its officials to prohibit or to impose a prior restraint upon the press or media and when a person is holding a public office, the comments and criticisms cannot be avoided since it is a necessary corollary. If such criticisms are attempted to be avoided, it would amount to political censorship. The acts done by a person in public life could be categorized as private and public. The acts and conduct of a person who holds office in Government and responsible for public administration are always open to criticism. When a publication is made in the press commenting or criticising the acts and conduct of a person which is connected to his public office and life, it cannot be made a condition that a prior verification of the facts should be done. But it would suffice if the media or the press has acted after a reasonable verification. But, at the same time, it should not be forgotten that the Apex Court in the case reported in (1994) 6 SCC 632 had made it clear that every citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child-bearing and education among other matters and no one can publish anything in reference to the above matters without his or her consent whether laudatory or critical.

16. In the case on hand, the following features are noticed by the Court. Admittedly, the first appellant is a Cabinet Minister of the Union Government. The documents placed by the appellants would clearly indicate that the respondents were constantly publishing the  photographs of the Minister with write-ups on different dates as mentioned above in the front cover page of their magazine. No doubt, the respondents had justification in levelling comments and criticisms as it would fall under the Freedom of Speech so long it is connected to or concerning with his official position as a Union Minister. But the instances are noticed which did not relate to his public life. The respondents have published the family photograph of the appellants. That apart, there was no necessity for publishing the photograph of the minor child. The UN Convention on the rights of the child 1989 has clearly adumbrated the rights of the child namely the right to preserve the identity, nationality and the family relations. The respondents had no explanation to offer why and under what circumstances, they published the photograph of the minor child. It is recorded in the impugned order that they gave an oral undertaking not to publish the photograph of the child in future. But, it is a matter of surprise to note that even without a written undertaking, the trial Court has closed the application in that regard. No doubt, it is an act of infringement of the right of the child by exposing the identity and the family relationship of the first appellant and thus, inserting the photograph cannot but be termed as an abuse.

17. The respondents have published the photograph of the second appellant, who is the wife of the first appellant. Apart from that, the news items published by the respondents would disclose the allegations made against her. It is not the case of the respondents that she is a public figure or she is in a public domain, and hence it has got to be termed that the publications made against the second appellant were infringement of her right to privacy which is guaranteed by the Constitution in her favour.

18. A scrutiny of the magazines would also indicate that there were instances in which the privacy of the first appellant was also invaded. For example two photographs of the Hon'ble Chief Minister and the first appellant were printed in the front cover page of the magazine dated 24.12.2008. A comparison of both the photographs and in particular, the second one, would no doubt seriously damage the image of the first appellant in the minds of the readers of the magazine. At no stretch of imagination, the respondents can be allowed to say that it was connected to or concerning with his public life. It is not the case of the respondents anywhere in the course of the entire counter that they made any verification with the appellants before making such publications.

19. When a citizen contests in an election and is voted to power and he enjoys the position in view of the confidence originally reposed on him by the people, he becomes more accountable to them. Higher the post and position more should be the degree of accountability. In a democratic society like ours, the accountability and transparency have a vital role to play. When a person is elected and reaches a high position and when he satisfies the test of accountability and transparency, naturally the confidence reposed on him by public would all the more increase than what was reposed on him before his coming to the position. Hence the contention put forth by the learned Senior Counsel for the appellants that in view of the official position of the first appellant as a Union Cabinet Minister, he is in a better position than a common citizen and hence the respondents should not give him the equal treatment cannot be countenanced.

20. Equally the contention put forth by the learned Senior Counsel for the respondents that they enjoy freedom of press and hence they could publish anything and everything cannot be countenanced. The respondents cannot be allowed to take shelter under the Doctrine of Freedom of Press, and the same cannot also be extended to publishing exclusively private affairs of the appellants calling it as connected to or concerned with public life.

Have a look at the decision.

Suspension of newspaper violates freedom of press: ECHR

In a recent decision in the case of Turgey and Others v. Turkey, the European Court of Human Rights (ECHR) has declared that suspension of publication of two newspapers by Turkey constituted violation of freedom of press. The suspension was carried out in view of a local court order on account of various news reports and articles published in the newspapers wherein "the impugned publications were mainly deemed to be propaganda in favour of a terrorist organisation". 

The ECHR followed its earlier ruling in the case of Ürper and Others v. Turkey as being squarely applicable and determinative of the law on the issue and even went on to grant damages to the newspapers as compensation for the violation. Have a look at the decision.

Kosovo legally declared independence: ICJ

In its opinion rendered yesterday, the International Court of Justice by a majority of 10 - 4 has declared that the declaration of independence by Kosovo on 17 February 2008  from Serbia did not violate international law. The declaration of independence was fiercely contested and the same is also evident from the list of international law experts who addressed the Court (page 7 to 10). The ICJ declared that it had jurisdiction over the matter and it would not decline to exercise its jurisdiction on the ground that "its opinion might lead to adverse political consequences" or that the request for opinion was made by the General Assembly instead of the Security Council.

On the main merits, the ICJ discussed the law relating to territorial integrity and declaration of independence as under Public International Law to observe that "that one of the major developments of international law during the second half of the twentieth century has been the evolution of the right of self-determination" to hold that "that general international law contains no applicable prohibition of declarations of independence. Accordingly, it concludes that the declaration of independence of 17 February 2008 did not violate general international law".

The ICJ also noted that Security Council resolution 1244 (1999), which operated in the territories declared independent also did not come in the way of legality of the declaration by Kosovo as the said resolution was only "to establish a temporary, exceptional legal régime which, save to the extent that it expressly preserved it, superseded the Serbian legal order and which aimed at the stabilization of Kosovo, and that it was designed to do so on an interim basis" and since the declaration of independence "was not intended by those who adopted it to take effect within the legal order created for the interim phase, nor was it capable of doing so", "but, rather, set out to adopt a measure the significance and effects of which would lie outside that order". The ICJ thus ruled that "Resolution 1244 (1999) thus does not preclude the issuance of the declaration of independence of 17 February 2008 because the two instruments operate on a different level: unlike resolution 1244 (1999), the declaration of independence is an attempt to determine finally the status of Kosovo." The Court went on to observe that "It follows that the authors of the declaration of independence were not bound by the framework of powers and responsibilities established to govern the conduct of the Provisional Institutions of Self-Government. Accordingly, the Court finds that the declaration of independence did not violate the Constitutional Framework."

 

The opinion was rendered in view of the reference by the General Assembly  of the United Nations submitting the question for an advisory opinion to the ICJ on the issue, the precise question being "Is the unilateral declaration of independence by the Provisional Institutions of Self-Government of Kosovo in accordance with international law?”

Have a look at the opinion of ICJ or the press-release for the issue in brief.

Development or maldevelopment? Supreme Court examines

Reflecting upon the situations involving "en masse relocation of the people dwelling upon the land that needs to be mined or at any rate getting the land freed from its inhabitants, for whom it may be the only source of sustenance", the Supreme Court in a recent decision expressed in no uncertain terms that the plight of those sought to be rehabilitated was far from being addressed and development as spoken of in the Indian Constitution could not be attained in true sense without having a bearing on have-nots of the country as well.

Given the fact that the sad state-of-affairs has been spoken of in detail, we take cue to reproduce a large section of the decision wherein the judges of the Supreme Court have taken notice of the glum-situation in elaborate details, which in a sense also seeks to strike chord with the naxal problem in the country. The Bench observed as under;

1. Speaking in the Constituent Assembly on November 25, 1949 Dr. B.R. Ambedkar, the chief architect of the Constitution of India made one of the most incisive remarks on it: 

“On the 26th of January 1950, India would be a democratic country in the sense that India from that day would have a government of the people, by the people and for the people. The same thought comes to my mind. What would happen to her democratic Constitution? Will she be able to maintain it or will she lose it again? This is the second thought that comes to my mind and makes me as anxious as the first… 

…On the 26th of January 1950, we are going to enter into a life of contradictions. In politics we will have equality and in social and economic life we will have inequality. In politics we will be recognizing the principle of one man one vote and one vote one value. In our social and economic life, we shall, by reason of our social and economic structure, continue to deny the principle of one man one value. How long shall we continue to live this life of contradictions? How long shall we continue to deny equality in our social and economic life? If we continue to deny it for long, we will do so only by putting our political democracy in peril. We must remove this contradiction at the earliest possible moment or else those who suffer from inequality will blow up the structure of political democracy which this Assembly has so laboriously built up.”

What would have been Dr. Ambedkar’s reaction to the facts of this case? This is one of the thoughts in our mind while dealing with the case.

2. Since independence India has indeed covered a long way on the path of development and economic growth. It continues to take long strides on that path. But how far have we been able to live down the fears expressed by Dr. Ambedkar about our democratic Constitution? How far have we been able to get rid of the contradictions in our life? This case raises these difficult questions.

3. We are anxious that India should develop and grow fast and become strong to take its rightful place in the comity of nations. 

4. Development is reckoned in terms of investments in urban infrastructure, roads and highways, communication, technology, extraction and commercial exploitation of minerals, generation of power, production of steel and other essential metals and alloys. Creation of wealth is of utmost importance. Redemption lies in GDP (Gross Domestic product). 

5. India does not lack material resources required for development. There are vast treasures of minerals lying buried deep inside its earth. But excavation of minerals from the bosom of the earth and putting them to good industrial and commercial use require lots of initial investment and highly advanced technology. Those too are now available as blessings of globalization. The imperialist’s formula of “philanthropy plus five percent” is the accepted norm. Public-Private Partnership (PPP) is the latest mantra. For some reasonable profits, companies and corporations, both Indian and multinational are willing and ready not only to do the mining for us but also to undertake the development of the region by providing schools, hospitals, and many similar amenities and facilities to the local population. Even the public sector undertakings are not lagging far behind in the race. 

6. But there is one catch. There is also the involvement of the human factor. Most of the mineral wealth of India is not under uninhabited wasteland. It lies mostly under dense forests and areas inhabited by people who can claim to be the oldest dwellers of this ancient country. Any large scale mining, therefore, needs not only huge investments and application of highly developed technology but also en masse relocation of the people dwelling upon the land that needs to be mined or at any rate getting the land freed from its inhabitants, for whom it may be the only source of sustenance. But then we have the laws to handle such situations. There is the Mines and Minerals (Development & Regulation), Act 1957, the Indian Forest Act, 1927, the Forest Conservation Act, 1980, (in many States) laws restricting and regulating trade in forest produce and above all the Land Acquisition Act, 1894 and its clone the Coal Bearing Areas (Acquisition and Development) Act, 1957 that envisage compulsory acquisition of land by the government for any public purpose on payment of its market value (plus solatium for the compulsory nature of acquisition!) to the land holder. The law is based on the twin sound principles of the eminent domain of the sovereign and the largest good of the largest number.

7. Seen thus, the whole issue of development appears to be so simple, logical and commonsensical. And yet, to millions of Indians, development is a dreadful and hateful word that is aimed at denying them even the source of their sustenance. It is cynically said that on the path of ‘maldevelopment’ almost every step that we take seems to give rise to insurgency and political extremism (which along with terrorism are supposed to be the three gravest threats to India’s integrity and sovereignty). 

8. The resistance with which the state’s well meaning efforts at development and economic growth are met makes one to think about the reasons for such opposition to the state’s endeavours for development. Why is the state’s perception and vision of development at such great odds with the people it purports to develop? And why are their rights so dispensable? Why do India’s GDP and HDI (Human Development Index, which is broadly used as measure of life expectancy, adult literacy and standard of living) present such vastly different pictures? With the GDP of $ 1.16Trillion (for 2008) Indian economy is twelfth largest in US Dollar terms and it is the second fastest growing economy in the world. But according to the Human Development Report 2009 (published by UNDP), the HDI for India is 0.612 (for 2007) which puts it at the 134th place among 182 countries. India has maintained the same HDI and rank since the previous year, and it continues to be categorized under “Medium Human Development”.

9. The counter argument goes like this. It is very often the process of development that most starkly confirms the fears expressed by Dr. Ambedkar about our democracy. A blinkered vision of development, complete apathy towards those who are highly adversely affected by the development process and a cynical unconcern for the enforcement of the laws lead to a situation where the rights and benefits promised and guaranteed under the constitution hardly ever reach the most marginalized citizens.

10. This is not to say that the relevant laws are perfect and very sympathetic towards the dispossessed. There are various studies that detail the impact of dispossession from their lands on tribal people. It is pointed out that even when laws relating to land acquisition and resettlement are implemented perfectly and comprehensively (and that happens rarely!), uncomfortable questions remain. For a people whose lives and livelihoods are intrinsically connected to the land, the economic and cultural shift to a market economy can be traumatic.

11. On many occasions laws are implemented only partially. The scheme of land acquisition often comes with assurances of schools, hospitals, roads, and employment. The initial promises, however, mostly remain illusory. The aims of income restoration and house resettlement prove to be very difficult. Noncompliance with even the basic regulations causes serious health problems for the local population and contamination of soil and water.

12. But there is yet another far worse scenario where even the most basic obligation under the law is not complied with and even the fig leaf of legality is dispensed with. 

13. The case in question is a textbook example.

14. But before going into the facts of the case two other things need to be stated. This case comes from Orissa which is one of the seven states where a particularly violent group of political extremists, has been able to gain sufficient strength to pose a threat to Constitutional governance of the state. This group openly defies the democratic system of the country and is committed to overthrow the Constitution by brutal and murderous means. According to news paper reports, in the district of Sundergarh, where the acquired lands are situated, the extremist group looted 550 kilograms of explosives in April 2003 and in August 2009 blew up a railway station. 

15. The other fact is that this is not an isolated case. We have come across many such cases of land acquisition.

It was in this background that the Supreme Court required the Government to address with immediate concern the unpaid compensation to those displaced due to the acquisition of land in the State of Orissa who had been denied of the same due to the intense and prolonged legal battles between a mining company and the Government. One can only hope that this would serve as a reminder to the Government that all that is plans in the comfortable offices does not so reflect the true state of those in the rear and inaccessible parts of the country and to provide for them in the true sense.

Have a look at the decision.

High Court invokes 'National Litigation Policy'

We had an occasion to update on this blog few days back on the unveiling of the 'National Litigation Policy' and in a recent decision we find that the Bombay High Court has already invoked the Policy to direct the Government and in particular the department responsible for filing appeals relating to Indirect Tax matters, to ensure that frivolous appeals are not filed and the decision to file appeal is after proper scrutiny. The High Court referred to various decisions on the issue and also the National Litigation Policy to direct the authorities to ensure that "departmental heads not to go for appeals and litigation wherein tax or duty impact is not substantial, otherwise it results in harassment to theassessees and creates unnecessary burden on the infrastructure of the Revenue department." The High Court was particular stern on this attitude when it noted that "The 'let the Court to decide' attitude needs to be given go bye."

The High Court inter alia observed as under;

2. This appeal is directed against the order dated 29th October, 2009 passed by the Customs, Excise and Sales Tax Appellate Tribunal, West Zonal Bench at Mumbai (“Tribunal” for short) raising question of law; wherein central excise duty recoverable from the respondent, if at all Revenue succeeds, would be in the sum of Rs.1,21,219/. The question sought to be raised in this appeal relates to the imposition of penalty on the respondent. The said issue was considered by the Tribunal in para10 of its judgment with which no fault can be found. The view taken by the Tribunal is a reasonable and possible view. Hence appeal is liable to be dismissed for want of substantial question of law.

3. At this juncture, it is relevant to note that number of appeals are being filed before this Court; wherein the customs duty and/or central excise duty involved is negligible. One of the appeals bearing Central Excise Appeal No.1/2005 involved stake of Rs.5,000/only. It is noticed that most of the times the duty impact ranges between Rs.2 to 3 lakh; wherein, normally, senior advocates appear on behalf of Revenue assisted by two junior advocates. In spite of engaging multiple advocates, adjournments are sought. The matters are allowed to remain pending in the Court for a substantially long period of time. With the result, they come up for hearing on more than two or three occasions. Adjournments are always taken and granted by the Court considering the substantial cause shown for the adjournment. All this results in payment of heavy professional charges to the advocates appearing for the department. Sometimes the expenses incurred by  the Revenue are disproportionate to the stakes involved in the appeal and/or petition filed by the department. 

4. In the aforesaid scenario, one can take judicial notice of the fact that the Centre and the States have acquired the “government is largest litigant” tag, accounting for 70% of the 3 crore cases – over 2.1 crore pending in various Courts. 

5. Now, the Central Government has formulated a National Litigation Policy (NLP) to shed the tag “Largest Litigant”. Thus, keeping in view the policy of the Central Government, the time has come to invite attention of the Chairman of the Central Board of Excise and Revenue (“the Board”) to consider the necessity of taking policy decision not to file cases; wherein the duty/tax impact is negligible. The similar policy is already in vogue so far as Income Tax Department is concerned. The Central Board of Direct Taxes (“CBDT” for short) vide its circular dated 27th March, 2000 followed by other circulars dated 24th October, 2005 and 15th May, 2008 has taken a policy decision not to file appeals or references wherein the tax effect is less than the amount prescribed in the instructions issued from time to time, so as to reduce litigation before the High Courts and the Supreme Court. The said policy decision taken by the CBDT has definitely reduced volume of litigation, with the result, their officers are in a position to concentrate on the cases involving heavy stakes. The validity, impact and the binding nature thereof have been the subject matters of judicial scrutiny of this Court in the case of C.I.T. v. Pithwa Engg. Works, (2005) 276 ITR 519; C.I.T. v. Zoeb Y. Topiwala, (2006) 284 ITR 379, C.I.T. v. Camco Colour  Co., (2002) 254 ITR 565 and C.I.T. v. M/s.Polycott Corporation, 2009 (318) ITR 144 (Bom.); wherein this Court had occasion to observe as under:

8. On the other hand on behalf of the assessee learned Counsel submits that filing of an appeal is referable to the issues. In other words if in respect of an appeal which is to be filed where the monetary limit exceeds Rs.4.00 lakhs then in respect of the other years where the monetary effect is less the issue involved must be the same. Otherwise no appeal can be preferred.

9. Having considered the contentions, in our opinion, the instructions cannot be interpreted as a Statute though it is pursuant to the power conferred under Section 268A of the Income Tax Act. What the Court has to consider is the plain language of the paragraph and the object behind the said provisions. The object appears to be not to burden courts and Tribunals in respect of matters where the tax effect is less than the limit prescribed. Even before this instruction CBTD has been issuing instruction, the last one being on 24th October, 2005 where the monetary limit has been fixed. In those instructions the only exception had been that in cases involving substantial question of law of importance as well as in cases where the same question of law will repeatedly arise, either in the case concerned or in similar case, appeal should be filed without being hindered by the monetary limits. The present instructions seems even to limit the issues in so far as the same question of law or recurring issue except to the extent provided in para 5.

6. It has, therefore, become necessary for the Board to impress upon the departmental heads not to go for appeals and litigation wherein tax or duty impact is not substantial, otherwise it results in harassment to the assessees and creates unnecessary burden on the infrastructure of the Revenue department. The “let the Court to decide” attitude needs to be given go bye. 

7. On the aforesaid backdrop, we hope that the Chairman of the Central Board of Excise and Revenue shall consider the necessity of issuing circular, on the lines of the circulars issued by the CBDT, so as to reduce litigations arising out of indirect tax legislations. This will definitely go a long way to reduce pendency of the cases in the various Courts and at the same time will help the officers of the department to concentrate more on the cases involving heavy stakes. Eventually, litigation expenses, burden of the Courts as well as that of the Revenue department to a considerable extent would get reduced.

Have a look at the decision.