Just a few days back we had written over a recent decision of the Supreme Court wherein the Haj subsidy given by the Government was declared to be constitutionally valid and not a violative of the secular character required to be donned by the Government. In a similar spate of reasoning a Division Bench of the Kerala High Court, in a decision authored by the Chief Justice of the High Court himself, has declared that the promotion of Islamic Banking by the Government is not violative of the Constitutional provisions. Holding that whether such an activity could at all be taken place was a question which was required to be answered by the Reserve Bank of India, the High Court set to naught the challenge to the constitutional propriety of the action of the Government to promote Islamic Banking.
The Division Bench of the Kerala High Court in observed in Dr. Subramaniam Swamy v. State of Kerala inter alia as under;
2. W.P.(C).No.35180 of 2009 is filed with the prayers as follows:
"a) call for the records leading to the case and issue a writ of certiorari or any other appropriate writ, order or direction, quashing Exhibit.P1.b) issue such other appropriate writ, oder or direction which this Hon'ble Court may deem fit in the circumstances of the case.c) award costs to the Petitioner".
3. The impugned order-Exhibit P1 is an Order dated 14.10.2009 evidencing a decision taken by the Government of Kerala. The relevant portion reads as follows:
"The Islamic Financial Services (IFS) Industry has grown substantially over the years forming a significant segment within global financial services and is generating lot of interest as an alternative model of financial intermediation. Growing awareness and demand for investment and financing in compliance with Shariah principles as well as increasing level of affluence have provided a fillip to Islamic Financial Services. With the objective of promoting an interest-free financing entity that follows Shariah principles, Government had entrusted KSIDC with conducting studies and looking into various aspects of formation of an Islamic Investment Company in Kerala for attracting investments in a right manner as per the Shariah of the Muslim Community to the development of the common public at large. The professional studies conducted on this project have concluded that there is a genuine commercial potential for an Islamic Financial Institution based in Kerala that has the potential to become a global payer.
2. The Minister for Industries convened a meeting of investors at Thiruvananthapuram on 15.07.2009 to discuss the formation of Islamic Financial Institution and decided to incorporate a company with 11% equity contribution from KSIDC and the remaining 89% from private investors.3. The Board of KSIDC had approved a share contribution of Rs.110 Lakhs (11% of the initial paid up Share Capital) to the proposed Company and decided to proceed with further steps for registration of the Company for promoting the Islamic Financial Institution.
4. Govt. have examined the matter in detail and found that the decision of the Board of Directors of KSIDC is within the area of their competence and delegation of powers and hence accord sanction for proceeding with further steps for registration of the Company."
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10. The main ground of the attack in both the writ petitions is that the decision of the State of Kerala and the K.S.I.D.C. which is an instrumentality of the State of Kerala to contribute to the share capital of the 6th respondent is inconsistent with the constitutional obligation of these two bodies to function on secular principles. Though it is not clearly pleaded it was specifically argued by Dr. Subramaniam Swamy that the impugned decision of the State of Kerala would be directly contrary to the mandate contained under Article 27 of the Constitution of India which reads as follows:
"27. Freedom as to payment of taxes for promotion of any particular religion.- No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denomination."
11. On the other hand, the State and the K.S.I.D.C. pleaded in their counter affidavits that the impugned decision was taken in order to garner huge amounts of unutilised funds from the Gulf countries available with the non-resident Indians working in those countries with a view to utilise such funds for the investment in the State of Kerala for the development of its people by promoting and providing financial assistance to the industries in the State of Kerala. In substance the respondents do not dispute the fact that a decision was taken to participate in the business of the 6th respondent company. They claim that notwithstanding the references in the Government Order dated 14.10.2009 and the advertisement issued by the 3rd respondent that the intention of the 6th respondent is to function in accordance with the requirements of Shariah, the motive and object of the State of Kerala and the K.S.I.D.C. is purely secular, i.e. to derive a commercial benefit from the business to be carried on by the 6th respondent. Therefore they cannot be accused of flouting the constitutional mandate of running a secular State. It is also the case of all the respondents that notwithstanding the fact that the 6th respondent company proposes to run its business in compliance with the principles of Shariah the 6th respondent is bound to function strictly in accordance with the law of this country. So long as the 6th respondent company so functions the fact that in addition to compliance with the law of the land the company also proposes to comply with a further requirement of running the business in accordance with the principles of Shariah does not make the activity of the company in any way inconsistent with the requirement of the secularism mandated under the Constitution. Therefore the State and its instrumentalities are not prohibited by the Constitution to be associated with such a business activity of the 6th respondent company.
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22. Two submissions made by the petitioners are required to be examined. The first is that the decision of the State to associate itself with the business of the 6th respondent is contrary to the Constitutional requirement that the State should be a secular State. The 6th respondent Company, which professes to run the business of non-banking financial institution in a manner which is compliant with Shariah is in essence a Company mixing the business with religion. Shariah is a body of law based on the religious principles enunciated in Koran, the holy book followed and venerated by "Umma", i.e., the Muslim brotherhood around the world. Therefore, any association of the State with the 6th respondent would amount to actively promoting or assisting the religion. Such an activity would be inconsistent with the principles of secularism, which is one of the goals sought to be achieved by the Constitution.
23. On the other hand, it is the case of the respondents that though the 6th respondent proposes to conduct the business complying with the dictates of Shariah, the 6th respondent is bound by the law of the land and is obliged to comply with all the requirements of the laws made under the Constitution of India. Therefore, such a business is purely a secular aspect of the Muslim Canon law. Hence, the State is not prohibited from associating with such a business.
24. To resolve the above issue, we are of the opinion that a clear understanding of the expressions "secularism", "religion", "secular activity associated with religious practice" is necessary.
25. The ambit and meaning of the expression "secularism" contained in the preamble of the Constitution fell for the consideration of the Supreme Court in S.R. Bommai v. Union of India [(1994) 3 SCC 1]. A Larger Bench of the Supreme Court, of nine Judges, considered the issue. Six separate opinions were delivered. Four Judges - Justice P.B.Sawant, Justice K.Ramaswamy, Justice B.P.Jeevan Reddy who spoke for himself and Justice S.C.Agrawal - made an elaborate enquiry into the meaning of the expression "secularism". Justice Sawant, on an analysis of Articles 25 to 30 and also Articles 14 to 16, the preamble of the Constitution and Article 51A of the Constitution, opined at para 146 as follows:
"These provisions by implication prohibit the establishment of a theocratic State and prevent the State either identifying itself with or favouring any particular religion or religious sect or denomination. The State is enjoined to accord equal treatment to all religions and religious sects and denominations.",
and again at para 148 the learned Judge held as follows:
"One thing which prominently emerges from the above discussion on secularism under our Constitution is that whatever the attitude of the State towards the religions, religious sects and denominations, religion cannot be mixed with any secular activity of the State. In fact, the encroachment of religion into secular activities is strictly prohibited. This is evident from the provisions of the Constitution to which we have made reference above. The State's tolerance of religion or religions does not make it either a religious or a theocratic State. When the State allows citizens to practise and profess their religions, it does not either explicitly or implicitly allow them to introduce religion into non-religious and secular activities of the State. The freedom and tolerance of religion is only to the extent of permitting pursuit of spiritual life which is different from the secular life. The latter falls in the exclusive domain of the affairs of the State".
Justice Ramaswamy in his judgment at para 178 held as follows:-
"Though the concept of "secularism" was not expressly engrafted while making the Constitution, its sweep, operation and visibility are apparent from fundamental rights and directive principles and their related provisions. It was made explicit by amending the preamble of the Constitution 42nd Amendment Act. The concept of secularism of which religious freedom is the foremost appears to visualise not only of the subject of God but also an understanding between man and man. Secularism in the Constitution is not anti-God and it is sometimes believed to be a stay in a free society. Matters which are purely religious are left personal to the individual and the secular part is taken charge by the State on grounds of public interest, order and general welfare. The State guarantee individual and corporate religious freedom and dealt with an individual as citizen irrespective of his faith and religious belief and does not promote any particular religion nor prefers one against another".
The learned Judge after taking notice of the position obtaining in the United States of America opined at para 180 as follows:
"Thereby this Court did not accept the wall of separation between law and the religion with a wider camouflage to impress control of what may be described exploitative parading under the garb of religion".
Justice Jeevan Reddy, once again, on a consideration of the relevant Articles of the Constitution, at para 304 opined as follows:
"While the citizens of this country are free to profess, practice and propagate such religion, faith or belief as they choose, so far as the State is concerned, i.e., from the point of view of the State, the religion, faith or belief of a person is immaterial. To it, all are equal and all are entitled to be treated equally. How is this equal treatment possible, if the State were to prefer or promote a particular religion, race or caste, which necessarily means a less favourable treatment of all other religions, races and castes. How are the constitutional promises of social justice liberty of belief, faith or worship and equality of status and of opportunity to be attained unless the State eschews the religion, faith or belief of a person from its consideration altogether while dealing with him, his rights, his duties and his entitlements? Secularism is thus more than a passive attitude of religious tolerance. It is a positive concept of equal treatment of all religions. This attitude is described by some as one of neutrality towards religion or as one of benevolent neutrality. This may be a concept evolved by western liberal thought or it may be, as some say, an abiding faith with the Indian people at all points of time.
That is not material. What is material is that it is a constitutional goal and basic feature of the Constitution as affirmed in Kesavananda Bharati [(1973) 4 SCC 225] and Indira N. Gandhi v. Raj Narain [1975 Supp SCC1]. Any step inconsistent with this constitutional policy is, in plain words, unconstitutional. This does not mean that the State has no say whatsoever in matters of religion. Laws can be made regulating the secular affairs of temples, mosques and other places of worships and maths (See S.P.Mittal v. Union of India [(1983) 1 SCC 51]".
Again at para 307, the learned Judge observed as follows:
"In short, in the affairs of the State (in its widest connotation) religion is irrelevant; it is strictly a personal affair. In this sense and in this behalf, our Constitution is broadly in agreement with the U.S. Constitution, the First Amendment whereof declares that "Congress shall make no laws respecting an establishment of religion or prohibiting the free exercise thereof..." (generally referred to as the "establishment clause"). Perhaps, this is an echo of doctrine of the separation of Church and State; may be it is the modern political thought which seeks to separate religion from the State - it matters very little".
The substance of Bommai's judgment, as can be culled out from the above extracted portions of the judgment in so far as it deals with the meaning of the expression "secularism" obtaining in the preamble of the Constitution and the secular nature of the State emerging from the scheme of various provisions of the Constitution, is that there is no wall of separation between the State and the religion as understood in the context of the American Constitution. The expression "wall of separation" originally employed by Thomas Jafferson in the context of the 1st amendment to the American Constitution, which declares:
"Congress shall make no laws respecting an establishment of religion or prohibiting the free exercise thereof............"
The question whether the framers of the Indian Constitution imported the theory of "wall of separation" into Indian Constitution initially fell for consideration of the Madras High Court in Kidangazhi Manakkal Narayanan Nambudiripad v. State of Madras [AIR 1954 Madras 385]. Justice Venkatarama Aiyar, speaking for the Bench, on an elaborate examination of the scheme of the American Constitution as expounded by the various decisions of the American Supreme Court and the scheme of the Indian Constitution, opined:
"Apart from making provisions in respect of particular subjects, the Constitution does not enact a general prohibition of legislation in respect of "establishment of religion". In this respect our Constitution makes a substantial departure from the American Constitution".
He further held:
"On the other hand, there are provisions in our Constitution which are inconsistent with the theory that there should be a wall of separation between Church and State".
The Bench concluded that:
"It is difficult in the face of these provisions to accede to the contention that our Constitution has adopted the American view that the State should have nothing to do with religious institutions and endowments. It would, therefore, not be safe to build any argument based on the "establishment of religion" clause in the first Amendment and the decisions interpreting the same.",
a conclusion which found acceptance by the apex Court in Bommai's case, as already noticed earlier.
26. Our Constitution does not create an absolute embargo on the State's association with every and any religious activity; nor does the Constitution permit the establishment of a theocratic State. As observed in Bommai's case (supra), the State's attitude is one of the benevolent neutrality towards religion. While the Constitution grants a great degree of freedom of conscience and guarantees a fundamental right to freely profess, practice and propagate any religion, such a right is made subject to the requirements of public order, morality and health. Our Constitution also recognise a distinction between practices which are essentially religious and activities which are secular, but associated with religious practice. Such activities include the economic, financial, political activities associated with religious practices. They are expressly made amenable to regulation by law. The distinction is recognised by the Supreme Court in The Commissioner, Hindu Religious Endowments, Madras v. Sri.Lakshmindra Thirtha Swamiar of Sri Shirur Mutt [1954 S.C.R.1005=AIR 1954 S.C.282].
27. To understand the distinction, it is necessary to understand the meaning of the expression "religion". The Supreme Court in Shirur Mutt's case (supra) at pages 1023 and 1023 held as follows:
"What then are matters of religion? The word "religion" has not been defined in the Constitution and it is a term which is hardly susceptible of any rigid definition. In an American case [Davis v. Benson, 133 U.S.333 at 342], it has been said "that the term 'religion' has reference to one's views of his relation to his Creator and to the obligations they impose of reverence for His Being and character and of obedience to His will. It is often confounded with cultus of form or worship of a particular sect, but is distinguishable from the latter."
We do not think that the above definition can be regarded as either precise or adequate. Articles 25 and 26 of our Constitution are based for the most part upon article 44(2) of the Constitution of Eire and we have great doubt whether a definition of "religion" as given above could have been in the minds of our Constitution-makers when they framed the Constitution. Religion is certainly a matter of faith with individuals or communities and it is not necessarily theistic. There are well known religions in India like Buddhism and Jainism which do not believe in God or in any Intelligent First Cause. A religion undoubtedly has its basis in a system of beliefs or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it would not be correct to say that religion is nothing else but a doctrine or belief. A religion may not only lay down a code of ethical rules for its followers to accept, it might prescribe rituals and observances, ceremonies and modes of worship which are regarded as integral parts of religion, and these forms and observances might extend even to matters of food and dress.
The guarantee under our Constitution not only protects the freedom of religious opinion but it protects also acts done in pursuance of a religion and this is made clear by the use of the expression "practice of religion" in article 25".
It was argued by the Attorney General that the right of freedom of religion guaranteed under the Constitution is limited only to the religious activities proper and does not extend to the secular activities associated with religious practice which are not essential part of the religion. Such authority of the State to restrict the fundamental rights guaranteed under Articles 25 and 26 flows from the opening clauses of both the Articles which state that the rights guaranteed therein are subject to "public order, morality and health",
Dealing with the submission, the Supreme Court held at page 1025 as follows:
"In the first place, what constitutes the essential part of a religion is primarily to be ascertained with reference to the doctrines of that religion itself. If the tenets of any religious sect of the Hindus prescribe that offerings of food should be given to the idol at particular hours of the day, that periodical ceremonies should be performed in a certain way at certain periods of the year or that there should be daily recital of sacred texts or oblations to the sacred fire, all these would be regarded as parts of religion and the mere fact that they involve expenditure of money or employment of priests and servants or the use of marketable commodities would not make them secular activities partaking of a commercial or economic character; all of them are religious practices and should be regarded as matters of religion within the meaning of article 26(b). What article 25(2)(a) contemplates is not regulation by the State of religious practices as such, the freedom of which is guaranteed by the Constitution except when they run counter to public order, health and morality, but regulation of activities which are economic, commercial or political in their character though they are associated with religious practices".
28. Thus it can be seen that the Constitution guarantees the fundamental right to freely profess, practice and propagate any religion. However, every activity undertaken by the followers of a religion or religious denomination is not protected or free from the interference of the State on the ground that it forms part of a fundamental right guaranteed under the Constitution. The Constitution expressly recognises that there can be secular activities associated with a religious practice, such as economic, financial and political activities associated with a religious practice. Further the Constitution recognises the authority of the State to regulate such secular activities associated with a religious practice. Even with reference to the non-secular aspects of the religious practices the Constitution declares that the fundamental rights guaranteed under Articles 25 and 26 are subject to the demands of public order, morality and health. In other words, by necessary implication even those activities which can be called "purely religious" are also amenable to regulation by the State's law making authority if the State rationally comes to a conclusion that such practices are not conducive to the public order or requirements of morality of the society or harmful to the health of the society.
29. The resolution in the preamble to constitute a SECULAR REPUBLIC thus has two facets, i.e., that the State shall not unduly (i) interfere with the fundamental rights of the subjects to freely profess, practice and propagate any religion; (ii) unduly associate itself with any religious activity or favour in any way one religion over the other.
30. The complaint in the instant case is that the impugned action of the State of Kerala is objectionable on the ground that it amounts to undue association with a religious activity amounting to favouring or promoting a religion.
31. We have already examined the scheme of the Constitution in the context of the authority of the State to regulate the fundamental right to religious freedom. However the permissible limits of the State's association/entanglement with the religious activity is required to be examined.
32. The Constitution does not totally prohibit the association of the State with all the religious activity. Article 28 categorically prohibits any kind of religious instruction in any educational institution wholly maintained out of State funds. However, sub-Articles (2) and (3) thereof carve out exception to the above rule. Sub-Article (2) recognises the possibility of the existence of educational institutions established under any endowment or trust but under the administration of the State which are obliged by virtue of the mandates of the endowment or trust to impart religious instruction. Sub-Article (3) recognises the possibility of the experience of educational institutions which are established and administered by private parties which are recognised by the State and receive aid from the State, where religious instruction is imparted or religious worship is conducted. Article 28 does not prohibit the association of State with such institutions, either by way of administering such institutions or granting aid to such institutions or recognising such institutions, provided the student or his guardian, wherever the student is a minor, consents to attend such a religious instruction or worship. In our opinion, sub-Articles (2) and (3) clearly establish the fact that our Constitution does not adopt the American doctrine of "wall of separation". The kind of association of the State contemplated under sub-Articles (2) and (3) of Article 28 perhaps would be wholly impermissible under the scheme of American Constitution.
33. Even on the face of an express prohibition of the establishment of a religion by the State some interface between the State and religion is inevitable. Various activities of the State are challenged on the ground that they are inconsistent with the prohibition under the establishment clause. The US Supreme Court over a period of time recognised that there is a "zone of required accommodation". The Supreme Court formulated various tests to determine whether a particular State action is within the zone of required accommodation or not; such as the test of 'political neutrality', 'secular purpose', 'secular effect' and 'excessive entanglement'.
34. Another major difference between the Constitution of India and U.S. is that Article 30 guarantees a fundamental right in favour of the minorities, whether based on religion or language, to establish and administer educational institutions of their choice. Such express provision is absent in U.S. Constitution. The ambit of the said right has been the subject matter of debate before the Supreme Court in the case of St. Stephen's College v. University of Delhi [AIR 1992 SC 1630]. The majority of the Supreme Court, speaking through Justice K.Jagannatha Shetty, held that "minorities cannot be treated in a religious neutral way".The State is prohibited from discriminating against such educational institutions established and administered by a religious minority in the matter of granting aid to them. A Constitutional guarantee of the minority religious denomination's right to establish and administer educational institutions of their choice coupled with the guarantee of non-discrimination in the matter of granting aid is unknown to American constitutional system. Similarly, Article 290A mandates the payment of certain amounts from out of the Consolidated Funds of the States of Kerala and Tamil Nadu for the maintenance of certain Hindu temples and shrines, a Constitutional obligation necessitated by some historical compulsion. These Articles, in our opinion, clearly indicate that the State is not totally prohibited from having any association with religion or a religious denomination.
35. The question is, whether these provisions of the Constitution are to be understood as exhaustive of the permissible limits of the State's association with religion or a religious denomination or only indicative of the permissible limits of the State's association. In view of the Constitution Bench decision of the Supreme Court in Bommai's case (supra) declaring that the State's attitude is one of the benevolent neutrality in the matter of religion, we find it difficult to come to the conclusion that the abovementioned provisions are exhaustive of the permissible limits of the State's association with religion.
36. Then the question would be, whether the kind of association which the State of Kerala proposes to pursue and the impugned action is Constitutionally permissible? To answer the question, we also deem it appropriate to advert to another aspect of the Constitution. Under Article 298, it is declared that the executive power of the Union and of each State extends to carrying on of any trade or business and also to acquire, hold and dispose of property and making of contracts for any purpose. If the State has the freedom or the authority to carry on any trade or business or acquire, hold or dispose of property by entering into any contract for any purpose, to believe that the State is prohibited from carrying on any trade or business either with a religious organisation or denomination or an organisation though not religious but proposes to carry on its business in a manner compliant with a set of beliefs based on a religion, in our opinion, would be inconsistent with the established rules of interpretation of Constitutional documents. It is well settled that a broad and liberal spirit should inspire those who are entrusted with the duty of interpreting the Constitution. The complexity of administration of a modern State demands a great deal of 'play in the joints' of the State to secure the goal of maintaining benevolent neutrality with regard to religion. To disable the State by imposing fetters on the power of the State would neither be in accordance with the settled principles of Constitutional interpretation or economic health of the State. Therefore, to restrict the commercial interaction of the State even with a religious denomination, on the ground that it is inconsistent with the declaration that the State should be a 'Secular Republic' would be illogical having regard to the scheme of the Constitution. In our opinion, such interpretation of the Constitution is not warranted.
37. Whether the impugned decision of the State has the effect of promoting a religion: To find a constitutionally viable answer to the said question the principle that even religious associations are required to be treated with political equality and accorded equal civil opportunities for their development on par with other voluntary associations must be kept in mind. Such a principle emerges from the fundamental rights guaranteed under Articles 14 to 16, 19 and 25 to 30.
38. The grievance of the petitioners is that since the 6th respondent Company is proposed to be run in a Shariah compliant manner, association of the State with such a Company would have the effect of either promoting or aiding a religion. It is not very clear from the record nor the respondents, either the State of Kerala or the 6th respondent Company or its promoters, offer any explanation as to what exactly is meant by them when they proclaimed that the 6th respondent would carry on its business in a Shariah compliant manner.
39. Sharia, we understand, is the legal system based on the Koran and teachings of the Prophet Mohammed.
"Law in the eyes of the Muslim scholars was not in fact an independent or empirical study. It was the practical aspect of the religious and social doctrine preached by Mohammed. For the early Muslims there was little or no distinction between 'legal' and 'religious'. In the Koran the two aspects are found side by side, or rather interwoven one with the other, and so likewise in the Hadith. The study and interpretation of the Koran involved sometimes the one and sometimes the other, and nearly a century elapsed before scholars began to specialize in one or the other aspect. Ultimately they were distinguished by relative terms: 'ilm - `positive knowledge', denoting theology (though not excluding law), and fiqh, `understanding', denoting law (based on theology). Only at a much later date was Greek word `canon' (qanun) adopted to denote administrative rule as distinct from revealed law. (Thus `canon law' in Arabic should mean the exact opposite of canon in European usage.)The connexion between law and religion thus established by Mohammed and adopted by his followers persisted throughout all later centuries. Characteristically, all expositions of Muslim law begin with the `religious duties' or `acts of worship', such as ablution, prayer, and pilgrimage. As in other Semitic religions, law is thought of, not as a product of human intelligence and adaptation to changing social needs and ideals, but of divine inspiration hence immutable. For Muslims its proof-texts were to be found in the Koran and Prophetic Tradition; and on this assumption the jurists and theologians of the second century elaborated a structure of law that is, from the point of view of logical perfection, one of the most brilliant essays of human reasoning.
Before examining the product of this activity, it is of some importance to look a little more closely into the methods followed by the jurists in their endeavour to systematize their material, for the insight which it affords into the character of Muslim epistemology and reasoning.
The Koran and the Tradition are not, as it is often said, the basis of Islamic legal speculation, but only its sources. The real foundation is to be sought in the attitude of mind which determined the methods of utilizing these sources. The first question, then, is not `What is laid down in the Koran and the Hadith?', but `Why are the Koran and the Hadith accepted as sources of law?', and the second is `How are their prescriptions to be understood and applied?' To answer the first question by saying that Koran and the Hadith are accepted as infallible sources because they are the foundations and title-deeds of the religion of Islam is to argue in a circle. The ultimate reason is metaphysical and a priori. It is a conviction of the imperfection of human reason and its inability to apprehend by its sole powers the real nature of the Good or indeed any reality whatsoever. Absolute good and evil can therefore be known to men only through a divine revelation mediated through Prophets. By Divine Providence there has been a succession of such Prophets ever since, by the creation of Adam (who was the first of them), mankind has existed on this earth. The revelations accorded to these Prophets were all identical in principle, but formed a gradually developing series adapted to the stages of man's development. Each in turn expanded, modified, and abrogated the preceding revelations. The Koran is the final revelation and therefore contains the final and most perfect solutions for all questions of belief and conduct. (Quoted from HAR Gibb............)
It is claimed to be the municipal law followed by some countries in the Middle East. The principle of the private international law followed by all the countries which follow the Anglo-Saxon jurisprudence is that foreign law is always a question of fact in so far as municipal Courts are concerned. Therefore the question as to what are those principles of the law of Shariah which regulate the business such as the one proposed to be carried on by the 6th respondent Company is required to be clearly pleaded and proved.
40. In the absence of any clear pleading much less the proof of those principles of Shariah which the respondents propose to comply with while carrying on the business, we can only proceed on the view that the respondents proposed to carry on the business in accordance with some principles based on certain teachings of the Prophet. We must also make it clear that the respondents made an emphatic statement at the Bar that they are bound to follow each and every prescription of law of this country. In addition, they also intend to observe certain principles of Shariah.
41. In response to a specific query of the Court as to what are those principles of the law of Shariah which are inconsistent with the mandate of secular State contemplated by the Constitution of India or the laws of India, the petitioner rightly answered that unless the respondents plead clearly as to what are the principles of Sharia they propose to follow, it is not possible to answer the question.
42. In the circumstances we are only left with a situation that the respondents propose to carry on the business of a 'non-banking financial institution' in accordance with the laws of the land and in addition follow some principles of Shariah in carrying on such business.
43. Every legal system has some basis in some religion or religious beliefs. For example, all legal systems known to a civilized world disapprove activities such as theft, causing harm to fellow human beings, licentiousness, etc. It is also equally true that no major religion known to humanity approves any one of the above activities. Therefore, to categorize laws which disapprove or prohibit such activities as non-secular merely because the prescription of such laws also coincides with certain religious beliefs and avoid such State action that it should be non-secular would not be conducive to the promotion of an orderly society either secular or non-secular. If the purposes of the State are to be classified as "non-secular" simply because the mandate of the law made by the State coincided with the beliefs of a religion or originated in a religion, virtually no law can be made. In our opinion it is for the above mentioned reason both Articles 25 and 26 open with the clause:
"subject to public order, morality and health......"
The makers of the Constitution realised that there can always be claims that either a belief or conduct based on a belief is a part of the fundamental right to practice and profess a religion. If such a right were to be absolute most of the modern law would be offending the fundamental right to practice some religion or the other. The same principle in our opinion should apply in deciding the question whether the association of the State with any activity is to be classified as aimed at a non-secular purpose or promoting a religion.
44. It is not in dispute that whatever the basis of Shariah, the principles of Shariah are meant to regulate the conduct of human beings adhering to the said system of law. Such an adherence may be with a view to either secure the establishment of an orderly society and maintain the same or to secure the devine approval for the human conduct or both. Whatever be the motive of the adherent, so long as the belief results in regulating the interaction between human beings, in our opinion, it is required to be treated as a secular aspect of a religious belief.
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55. One more submission of the petitioners which is required to be examined is the submission made on the basis of paragraph 4 of the counter affidavit filed on 07.09.2010 by the Union of India. Paragraph 4 of the counter affidavit reads as follows:
"Government of India have always maintained that in the current statutory and regulatory frame work, it is not legally feasible for banks in India to undertake Islamic Banking activities in India or for branches of Indian Banks abroad to undertake Islamic Banking outside India. This has been the stance of the Government of India even while giving reply to Questions in the Parliament as well as in response to various VIP correspondences on the subject. The said stance of the Government of India is applicable mutatis mutandis to the activities of NBFCs also."
The petitioners argued that in view of the stand taken by the Government of India, the State of Kerala cannot be a shareholder in a company which proposes to carry on the business in Sharia compliant manner.
56. On the other hand, it is argued by Dr.Dhavan that the opinion such as the one contained in the affidavit filed by the Under Secretary of the Government of India in the Ministry of Finance is not determinative of the Constitutional interpretation. Secondly, even on the examination of the language of the statement of Mr. M.M. Dawla (Under Secretary), it is his opinion that the activities of the Islamic Banking are not legally feasible "in the current statutory and regulatory frame work". Dr. Dhavan submitted that the issue before this Court is the Constitutionality of the action of the State of Kerala, but not whether the existing statutory framework permits the carrying on of "Islamic Banking" activity. He further submitted that except making such an omnibus statement no specific prohibition contained in any statute which makes it impermissible to carry on the Islamic Banking is brought to our notice.
57. We see substantial force in the submission made by Dr. Dhavan. The Supreme Court in Sanjeev Coke Manufacturing Co. v. M/s.Bharat Coking Coal Limited [(1983) 1 SCC 147] at paragraph 25 held as follows:
"But, in the ultimate analysis, we are not really to concern ourselves with the hollowness or the self-condemnatory nature of the statements made in the affidavits filed by the respondents to justify and sustain the legislation. The deponents of the affidavits filed into court may speak for the parties on whose behalf they swear to the statements. They do not speak for the Parliament. No one may speak for the Parliament and Parliament is never before the court. After Parliament has said what it intends to say, only the court may say what the Parliament meant to say. None else. Once a statute leaves Parliament House, the Court is the only authentic voice which may echo (interpret) the Parliament. This the court will do with reference to the language of the statute and other permissible aids. The executive Government may place before the court their understanding of what Parliament has said or intended to say or what they think was Parliament's object and all the facts and circumstances which in their view led to the legislation. When they do so, they do not speak for Parliament. No Act of Parliament may be struck down because of the understanding or misunderstanding of parliamentary intention by the executive Government or because their (the Government's) spokesmen do not bring out relevant circumstances but indulge in empty and self-defeating affidavits. They do not and they cannot bind Parliament. Validity of legislation is not to be judged merely by affidavits filed on behalf of the State, but by all the relevant circumstances which the court may ultimately find and more especially by what may be gathered from what the legislature has itself said."
In other words, the Supreme Court held that while interpreting the Constitution or determining the constitutional validity of the statutes the court cannot be guided by the views expressed by individual officers of the State as the court has to ascertain the true meaning of the statutes made by the legislature. In our opinion, the principle applies with a greater vigour in determining the constitutionality of the State action.
58. We do not propose to deal with this question any further for the reason that whether the 6th respondent company can carry on the business such as the one proposed by the Union of India or whether such a business is prohibited by any statute are questions which in our opinion are primarily to be dealt with by the Reserve Bank of India. The Reserve Bank of India is yet to examine this question and we do not propose to preempt such an examination. We are also conscious of the fact, assuming for any reason, that there is some provision in law which either seek to regulate or prohibit such an activity of the 6th respondent, the right of the 6th respondent or its shareholders to question the constitutionality of such a regulation or prohibition cannot be ignored or jeopardised.
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