Friday, October 28, 2005

An appraisal of India’s contemporary ‘promise’ and an analysis of the UPA government’s draft Education Bill

Devesh Kapur has recently authored an overview of Indian politics and governance which makes for interesting reading. Subtitled “Conflicting prospects for the world’s most populous democracy,” the piece highlights both the positives and negatives of the current situation in India, and contains some stimulating assertions about various issues, including the courts and legal process in India. Kapur’s writings are typically deeply researched, and provide stimulating ideas about many contemporary issues of interest. (Click here for access to his working papers and here for his other published papers).

My focus in this post is on Kapur’s analysis of the woeful situation regarding education in India:

“Critics of liberalization in India incessantly harp on the necessity of increasing national government expenditures on health and education. They are loath to admit that primary education and health are principally the responsibilities of the state authorities. Even the Marxist government in power in the state of West Bengal for more than a quarter century has failed to make much progress in providing universal primary health and education (the one realm where communist governments have had relative success). The reason is simple: an unwillingness to enforce the basics of public administration by ensuring that well-paid government employees—from health workers who don’t show up at clinics to teachers who don’t show up to teach—do their jobs, because those same civil servants are an intrinsic part of the ruling party.”

While Kapur may be right in pointing out that the states in India should take greater responsibility for education, the legal and constitutional history of the issue is not so clear-cut.

In British India, at least since 1935, education had been listed as a subject for which only the provinces (states) could enact legislation. Granville Austin tells us that during the drafting of the constitutional provisions relating to education in the constituent assembly, there was a debate among the framers about whether education should be shifted to either the union or concurrent lists, so that the Central government would be able to enact laws on education. Maulana Azad, who went on to become independent India’s first Union minister for Education, strongly opposed leaving education entirely to the states, and garnered support for his view from Nehru and other influential members of the Constituent Assembly. Azad argued that it was necessary to give this power to the Central Government so that uniform national standards for education could be established. However, some of the other framers believed that the states should also have the competence to make policies and enact laws relating to education. They were prompted, in part, by the knowledge that the several languages spoken across India would require a decentralized approach to education. The situation was resolved by retaining education in the state list, but also including entries relating to higher education and scientific and technical institutions in the Union and Concurrent lists, thereby giving the Central government the power to make policies and enact laws to regulate essential aspects of education. It was also agreed among the framers that the Central government would have the power to make national policies for coordinating the provision of educational services.

It is a well documented fact that successive Central governments in independent India neglected the issue of primary education. Until 1979, India spent less than 1% of its GDP on programmes for education. In 1976, via the 42nd constitutional amendment, education was moved from the State to the Concurrent list, presumably to give the Central government a larger role in enabling the provision of education at a national level. However, not much changed on the ground as a result of this legal change.

In 2002, the right to education for children between the ages of 6 and 14 became a fundamental right (via the 86th Constnl Amendment Act). There was an intense debate about the nature and ambit of the right, as well as about the financial allocations which would be necessary to secure the right – an overview of these issues is provided in this Frontline essay by Anil Sadagopal.

Activists involved in education have long asserted that creating a right for education was not the issue (especially because the Supreme Court had already asserted such a right in the early-1990s). What is crucial is the manner in which the right is administered through legislative and executive action.

The NDA government had come up with a legislative effort to implement the new fundamental right which was severely criticized by child rights activists and groups. The UPA government has apparently released a new Bill which has been subjected to intense scrutiny and criticism, which is only to be expected, given the contentious nature, long history and vital importance of the issue, for which no easy solutions are at hand.

India Together (which has a long running series of pieces focusing on Law) is going to feature a series of articles on the UPA’s bill on education and the first in the series focuses on the main elements of the Bill which have been most criticized by child rights groups.

This will surely be an issue that will garner more national attention in the months ahead, as it should.

Monday, October 24, 2005

Regulation Masterclass

The recent proposal to re-staff the regulatory agencies in the power sector prompted two very thoughtful responses from Prof Navroz Dubash and Sudha Mahalingam. Navroz argues that countering the democracy deficit in regulatory institutions is not only about appointing suitable regulators with technical expertise, but more importantly about the open consultative process that regulators follow as exercises in considered public reasoning. This echoes Richard Stewart's path breaking work [The Transformation of American Admin Law 1977 Harv LR] articulating the democratic quality of administrative action more generally, something all of us administrative lawyers must read to appreciate the new challenges in maintaining the democratic pedigree of the emerging regulatory Indian state.

Two other modes of preserving the democratic character of regulation could be explored. First, independent regulators should be required to report regularly to the Legislatures and the relevant House Committees. This would substitute for the individual Ministerial responsibility to Legislatures which is likely to confined hereafter to matters of policy. These public spectacles where the Executive Agency gives account for its actions and policy to the Legislature will bring to the fore the particular role and function of both organs of government. This is particularly important as the British style of government we adopted after Independence seldom required executive bureaucrats to be directly responsible to the legislature and hid from view this aspect of the separation of powers doctrine's application.

Secondly, the statutory power of the government to set overarching policy objectives that regulators are obliged to follow will effectively maintain the democratic control over the regulator. Sudha Mahalingam suggests that the Ministry's frustration with the regulators cross subsidy surcharge calculations which threaten to make open access distribution a non-starter has spurred the present proposal to replace them altogether. Surely, regulatory policy at this level of detail - formula for cross subsidy surcharge - is a matter best left to regulators and far too detailed to be a matter on which the Government/Ministry may issue directions to it, even where the Ministry believes that it has better expertise on the matter. The Ministry should commit itself to persuade rather than sack the regulators!

She goes on to argue that the present approach to the power sector makes the mistaken assumption that market pricing of electricity is possible and further that tariff fixing is a technical rather than political process. This is surprising as it would seem to me that neither of these propositions would operate as uncontested premises in any argument for a regulatory authority which sets up a regulated market to achieve BOTH market and non-market objectives. Surely our core concern should be with the process by which regulators balance various stakeholders - the market, the government and consumers - when designing tariff policy. The success of regulation will, as Prof Navroz insightfully points out, not rest on regulators being 'three wise men' but on their ability to conduct themselves with probity, impartiality and competently at the altar of public reason.

Friday, October 21, 2005

GLOSSING OVER CORRUPTION IN THE JUDICIARY

In Justice Sabharwal’s interview in The Hindu that Arun has referred to, the new CJIS’s views on corruption in the judiciary makes for interesting reading. He says:
“Wherever little corruption is there, as far as the subordinate judiciary is concerned, we see every day the compulsory retirement of judicial officers. As far as the higher judiciary is concerned, it is very, very minimal.”

Contrast this with the statement of another Chief Justice of India, S.P. Bharucha,J. He candidly admitted that “up to 20 percent of the judges in India are corrupt” The Centre for Media Studies has published its findings on corruption in the judiciary which again is indicative that the public perception of the judiciary is that it quite a corrupt institution.

In spite of this lament, Prashanth Bhushan testifies that there has not been a single official investigation against a judge in the last 15 years. Justice Bharucha also pointed out that with respect to the higher judiciary, the only remedy is impeachment which experience has proved to be fairly impracticable and flawed. There does exist an alternate, in-house mechanism evolved after the decision in C. Ravichandran vs. Justice A. M. Bhattacharjee (1995), but this too does not inspire much confidence. This view has been endorsed by others- from the Bar, the Bench and the press.

What has changed in the couple of years that separates the tenures of Justice Bharucha and Justice Sabharwal for judicial corruption to become “very, very minimal”?

Justice Sabharwal also adopts the high moral ground when he challenges: “Tell me, is there any other organisation where, on account of peer pressure, a High Court judge resigns? It is only happening in the judiciary.”
I cannot recollect any instance when a judge has resigned on account of peer pressure. On the other hand, the experience has been to the contrary. Arun, is a previous post has already referred to the instance where 2 High Court judges in Punjab obtained membership in an elite club in a dubious manner. Chief Justice Roy was shunted out after his attempt in seeking an explanation from these judges triggered a wonderful act of camaraderie wherein almost all judges of that Court went on leave en masse in an expression of solidarity with these 2 judges. Certain judges of the very same High Court were also said to be involved in the notorious UPSC jobs-for-cash scandal, but nothing much came out of an enquiry commissioned under the in-house procedure.

I do hope that Justice Sabharwal does not gloss over the reality of judicial corruption, and tries to tackle this problem head- on.

An interview with the new Chief Justice of India

Yesterday, The Hindu carried a short news-item announcing the appointment of Justice YK Sabharwal as the new CJI with effect from Nov 01, 2005. Today's edition of the paper features an interview with Justice Sabharwal where he sticks to the expected line for new occupants to the post for much of the time, but has this interesting response to a question about his views on the death penalty:

"I believe that as long as it's there in the IPC, whatever may be my personal feelings they must be kept out. If a case comes under the category of cases where the death penalty has to be inflicted, it must be inflicted. I don't want to bring in my personal views about the death penalty and say that, despite the legal provision and despite the provision of IPC, I will not award it. If you ask my personal opinion, not as a Judge of the Supreme Court but as a citizen of this country, I will say my personal opinion is that we should not have the death penalty and that we can have a life sentence for entire life. This is because it is difficult for anyone to award something that cannot be restored. At the same time, there are strong viewpoints. In the whole of Europe, it [capital punishment] is not there. In many of the States in the U.S., it is not there. In many other countries, it is not there. It is a socio-political question and ultimately whether it is to be continued or not is a decision to be taken by the Indian Parliament."

Earlier this year, Justice Sabharwal had objected to the appointment of a former director of the Central Bureau of Intelligence (CBI) as a member of the National Human Rights Commission (The appointment was later upheld by a larger bench of the Supreme Court in April 2005, leading to this protest by a human rights group).

I may be clutching at straws, but these are good signs for those of us who are interested in human rights issues, and would like to see the Supreme Court engage more vigorously -and seriously - with comparative constitutional law.

Recovering bad debts: A national priority and an ‘interesting’ approach

In yesterday’s Hindu, Jairam Ramesh identifies a pressing national priority:

“THE UNITED Progressive Alliance Government has embarked on major new publicly-funded programmes in employment generation, rural infrastructure, education, health, nutrition, social security for unorganised sector workers, and urban renewal. These programmes have been long overdue. Clearly, additional resources have to be found quickly.”

He puts forth some suggestions for raising such resources. My focus is on his second suggestion:

“A second route is through recovery of what is owed to banks and financial institutions by the corporate sector. Today, the overall level of non-performing assets (NPAs) in the entire financial system is close to Rs.1,20,000 crore. Of this, roughly Rs.50,000 crore are the NPAs on account of the corporate sector in banks and financial institutions, with the balance constituting NPAs of the priority sector in banks and NPAs in cooperative and rural banks. Even if a quarter of this is recoverable, it will make a substantial difference to public spending. Recently, Parliament has given the Government full legal powers to accelerate recovery. There will be no political dispute or controversy if this is pursued aggressively.”

Clearly, the law has an important role to play in attaining this objective. However, efforts at reforming the law have not produced particularly successful results in the past. One such effort was the enactment of the Recovery of Debts Due to Banks and Financial Institutions Act, 1994 (I have always been struck by the irony inherent in the title of the Act). Generally referred to as the DRT Act, this piece of legislation has run into difficulties and is not perceived as being successful. An academic paper available online assesses the historical evolution of this Act over time, mentions the legal challenge it was subject to and how that was overcome, and also provides some details about the manner in which it has been implemented.

In 2002, Parliament enacted the Securitisation of Assets and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 (generally referred to as the SARFESI Act). This legislation appears to have made it easier for banks and financial institutions to act against defaulters. However, they continue to face the problem of finding effective ways to bring defaulters to the negotiating table. In the mid 1990s, the media ran several stories of how banks and financial institutions had hired toughies to act as recovery agents and there were several reports of the strong-arm tactics that were used, which often fell foul of the law.

A few days ago, Sucheta Dalal wrote a column in the Indian Express focusing on how one particular company called 'Adhikrut Jabti Evam Vasuli’ (translated, it means official seizure and recovery agency) is going about the task of recovering bad debts in an innovative manner. After analysing the website of the company, Dalal notes:

“Its list of clients (including 20 top nationalised and cooperative banks) is backed by appointment and commendation letters. There is a detailed description of services offered (investigation, survey, custody, security, valuation and sale of assets etc), which is accompanied by a list of ‘duties’ and an explicit fee structure. The most interesting aspect of the website was its elaborate ‘code of conduct’ and specific guidelines to be followed in its recovery effort.

As Bhatia [the head of recovery operations – a ‘college going’ woman] tells me, the key to their way of doing business is the process they follow. She has a whole checklist of tasks that precede an …. operation to embarrass a defaulter. The first step: ‘‘I research to check the ability to pay and other businesses.’’ …. Secondly, she writes to the company and asks them to pay up. When that fails an operation is planned. This involves informing the local police station and requesting that a constable accompany the recovery team. The building society is notified of the action and defaulter is also given the exact date and time when the recovery team would arrive for collection. This is aimed at providing plenty of opportunity for a person to avoid embarrassment and at least start a negotiation with the bank. As a further precaution, the actual operation is video-recorded and made available to the bank to avoid any charge of misbehaviour against the recovery team.

… Another aspect of this unusual recovery firm is the sophisticated code of conduct prescribed for its employees and posted on its website. It promises ‘‘dignity and respect to customers’’ and a debt collection policy that is not ‘‘unduly coercive in collection of dues’’ but ‘‘built on courtesy, fair-treatment and persuasion’’. It also promises ‘‘fairness and transparency in repossession, valuation and realisation of security’’.”

Dalal’s piece describes how the recovery agency ensured that a high profile restaurant in Mumbai paid up its dues to a prominent bank. It certainly makes for interesting reading. The website of the recovery company indicates that it has recovered a total of Rs 2274.78 lakhs over a period of 6 years.

While this approach does seem to be an improvement over the strong-arm tactics used by recovery agents in previous years, I wonder if it doesn’t tread on the boundary of actions that debt recovery agents can undertake legally. It may well be, however, that unconventional approaches may be required to attend to this pressing problem.

Tuesday, October 18, 2005

UNEASE WITH ARBITRATION

All’s not well with resolving disputes through arbitration in India. Conceived as a faster and less expensive mode of dispute resolution by experts chosen by the parties themselves, arbitration has often been billed and promoted as the solution to overloaded court dockets. The enactment of the Indian Arbitration and  Conciliation Act, 1996 on the lines of the UNCITRAL Model Law was intended to encourage resolution of disputes through arbitration. Almost a decade down the line, the picture doesn’t look all that rosy.
  • Arbitration seems to be have added one more tier to the already multi-layered system of Indian adjudication. Parties often find themselves spending more time in courts even during the pendency of arbitral proceedings.

  • The work load of courts seems to have actually increased with parties approaching courts for appointment of arbitrators, for interim measures of protection, for substitution of arbitrators, to challenge interim orders passed by arbitral tribunals, to challenge or enforce arbitral awards etc.

  • Public confidence in arbitration has become a bit shaky- what with whispers abounding about the suspect integrity of certain arbitrators, about undue delay in completing arbitral proceedings, virtually no regulation of arbitral procedure etc.

  • The grounds for challenging an arbitral award are very narrow, and even a patently illegal award is binding on the parties. The only substantive ground of challenge of an arbitral award is to establish that the award is contrary to “public policy”, a delightfully vague legal expression.

  • The costs involved are often enormous and sometimes, whimsical and unreasonable.

The Law Commission has dealt with some of these issues in its report and has recommended amendments to the law. I recently came across an interesting article authored by Goolam Vahanvati, presently the Solicitor- General of India which highlights some of these concerns. The piece was published in the Deccan Chronicle, Hyderabad Edition on July 26, 2003. The articles was published in response to the Supreme Court judgment in ONGC v. Saw Pipes. I tried in vain to find an online link to the article, but here is a typed copy of the entire article. I hope this constitutes fair use.

“SORE PIPES
You are probably wondering what this unusual title is all about. It is about the reaction to a recent Supreme Court judgment in the case of ONGC Vs. Saw Pipes Limited, an arbitration case. Sore is how one would have to describe the reaction of the arbitration community to this judgement. One retired judge has shot off a long article in which he argues that this judgment is wrong and should be referred to a larger bench. He also mentions that a series of seminars and discussions are being organized to discuss and analyse this judgment. I am told that another eminent retired judge has openly wondered whether he could say he was not bound by the judgment.

Why all this uproar? The answer is simple. Under the new Arbitration and Conciliation Act, 1996, everybody proceeded on the basis of the scope for challenge to arbitral awards was extremely narrow. The new Section 34 made an arbitral award liable to be set aside on very limited grounds such as incapacity of a party, invalid arbitration agreement, failure to give notice of the arbitral proceedings, dealing with disputes not dealt with and if “the arbitral award was in conflict with the public policy of India.”

Public policy has always been an unruly horse, difficult to define and even more difficult to tame. Incapable of precise definition, there were always two approaches to public policy. The narrow approach or the broad approach. This has led to considerable confusion and in fact, in one House of Lords judgment it was said that public policy is an unsafe and treacherous ground for legal decision.

Notwithstanding this, lawyers proceeded to give diverse interpretations to the expression “public policy”. In the Supreme Court judgment in Renusagar’s case, they construed the words in a narrow sense as meaning something more than a violation of the law of India. It was construed to mean the violation of the fundamental policy of Indian law, the interests of India, and justice or morality. In the Saw Pipes Ltd case, the judgment of the Supreme Court consisting of M.B. Shah and Arun Kumar JJ, discards the narrow approach. The learned judge, Justice Shah, refers to Section 28 of the Arbitration Act which mandates that the arbitral tribunal has to decide the dispute “in accordance with the substantive law for the time being in force in India”. They accepted the submission of Ashok Desai, former attorney general of India, that an award passed in contravention of the provisions of the Arbitration Act itself must be liable to be set aside. There is considerable merit in the submission that it would be incongruous if a court would find that an award is contrary to Indian law but still holds that it would not be set aside and allowed to stand.

It is true that arbitration is supposed to be an efficacious, effective, speedy and cheap remedy. It is true that an arbitration is supposed to be an alternative dispute resolution mechanism and people were to be encouraged to resort to arbitration so as to lessen the load on courts. This was the spirit with which many approached the new Arbitration Act and the thinking worldwide was to restrict the scope of challenge to arbitral awrds to extremely limited grounds. All over the world arbitration is promoted as the preferred remedy for dispute resolution.

There has been a rethink in India with regard to how arbitrations are conducted leading the former chief justice of this country to observe in a judgment that arbitration “in this country is a racket”. I wrote about this sometime ago and I understand that the article caused considerable resentment in some quarters.

It was never my intention to taint everybody with the same brush. In fact, as far as I am concerned, personally, I hardly do any arbitration work given the constraints that the office puts on me, but interact with persons whose practice is arbitration oriented. Senior counsel whose practice mainly revolves around arbitration, most of whom almost exclusively appear for large public corporations, are quite agitated.

Several questions are raised. They feel strongly that these questions have to be addressed honestly and in a straightforward fashion without any unnecessary indignation and unnecessarily getting upset. These questions include the following:

Is it true that arbitration is no longer speedy?

Is it true that this is because of the difficulty to get three arbitrators to agree upon dates?

Is it true that hearings are being prolonged by unnecessary prolix arguments and that lawyers go on merrily without being stopped?

Is it true that charges are levied for a full day’s fees even though the hearings do not extend more than half a day’s session?

Is it true that arbitrations are no longer a cheap affair?

Is it true that some arbitrators are demanding fees for reading papers and then in fact when the arbitration proceedings start, it becomes clear that the papers have not been read at all?

These are only some questions which require serious consideration. The bull has to be caught by the horns.

What is even more serious is that people are more increasingly raising questions about the role of the individual arbitrators. Here again I must make it clear that these apply to a few and individual cases only and may well be aberrations.

Consider the case of a lady advocate who was bitterly complaining sometime ago about the problems she had with a lawyer from Delhi who had been appointed as an arbitrator by a party who happened to be his regular client. He did not disclose the relationship and though she knew about this, she was unable to prove it. She challenged him but he denied the relationship.

All through the conduct of the arbitration it was clear that the person concerned was not an impartial arbitrator. He was proceeding as if he was an advocate for one of the parties.
This, I am told, is happening more and more.

Another very senior lawyer with a huge experience in arbitrations told me that in certain cases some arbitrators suggest answers to the witnesses of the parties who have appointed them. Some even mould the evidence suitably.

If this is true, and I am not saying it is, it is a very serious matter. Unfortunately, these statements are made in hushed undertones given that the persons whom they are talking about may have held high judicial offices earlier.

It is my respectful submission that the Supreme Court judgment in the Saw Pipes case is a reaction to this very environmental and atmospheric condition.

It was inevitable that the Supreme Court would take notice of all this. It is only when the comfort level relating to the manner in which arbitrations are conducted in this country rises and comes on par with that of international arbitrations, that one will legitimately be able to argue that there is a case for making arbitral awards virtually free from challenge.”

ONE “FLU” OVER THE CUCKOO’S NEST: OF AN UNRELENTING ROCHE AND AN INDIAN ROBIN-HOOD

Once again, the relationship between patent rights and public health has made mainstream media –and this time, in the context of the notorious AVIAN FLU, which is spreading rapidly.

A recent news item states that Roche, which holds the patent over Tamiflu is unwilling to license it, despite the fact that it cannot produce enough quantities to cater to an outbreak, should one occur. It notes:


“Tamiflu, a pricey antiviral pill invented in a Bay Area lab and made in part from a spice used in Chinese cookery, has emerged as the world's first line of defense against bird flu should the deadly strain begin its feared spread among human beings

As nations begin to stockpile the drug in anticipation of a flu pandemic, calls are mounting for countries to sidestep patents on the drug -- as Brazil first did for AIDS medications -- and make their own generic versions

But Swiss pharmaceuticals giant Roche, which acquired rights to the drug from Gilead Sciences Inc. of Foster City in 1996, said Wednesday it had no intention of letting others make it

Roche ... fully intends to remain the sole manufacturer of Tamiflu,'' said company spokesman Terry Hurley

The immediate problem is not the cost of Tamiflu, which runs about $60 for a 10-pill course of treatment, but a staggering gap between the sudden demand for it and the capacity of its sole manufacturer to produce it.”

This is a rare case, where the price of a patented drug is not as much of an issue, as the fear of under-production and the ability to satisfy demand in a timely fashion. It therefore presents an easier case for the issuing of a compulsory licensing, a point that I will come to in a moment.

Enter, CIPLA, an Indian pharmaceutical company, which once again attempts to play Robinhood by threatening to go ahead and producing generic versions (Oseltamivir), despite Roche’s patents. A NY Times report states:

“A major Indian drug company announced yesterday that it would start making a generic version of Tamiflu, the anti-influenza drug that is in critically short supply in the face of a possible epidemic of avian flu."Right or wrong, we're going to commercialize and make oseltamivir," said Dr. Yusuf K. Hamied, chairman of Cipla of Bombay, using the drug's generic name and acknowledging that he might face a fight in the Indian courts with Roche, the Swiss pharmaceutical giant that holds the patent.”

Can CIPLA do so? On the one hand, there’s the technical issue of whether it can reverse-engineer TAMIFLU and manufacture quantities quick enough to cater to rising demands. Leaving this aside for a moment, lets focus on the issue of issue of legality¾an issue of far more relevance to this blog. Can CIPLA do this without violating patent laws? This is where we come to issues such as compulsory licensing.

First, lets take the position in India. I’m not sure that there’s any serious threat of legal action in India. The new regime patent regime that grants patents for pharmaceutical products came into force only on 1 January 2005 (with retrospective effect) and it will be a while before Roche’s application goes through the rigmarole of examination, opposition etc in order to be granted a patent. Till the patent is granted, (likely to take a year, at the very least), CIPLA is free to produce this drug. Of course, once the patent is granted, CIPLA can be injuncted. But will it be liable for damages for the ‘interim’’ infringement? Not so, under the new 2005 regime¾since the section that provides for retrospective damages does not apply to pharmaceutical ‘mailbox’ applications.


Lets assume for a moment that Indian law does prohibit from CIPLA from manufacturing this in India. What are its options?


1. The Indian Patent Act has one of the most comprehensive compulsory licensing regimes and the recent 2005 amendments have only expanded the scope of this regime. Assuming that Roche cannot adequately cater to the demands of the Indian market (if an when an outburst occurs), then CIPLA could invoke the following grounds:
a. Section 84 (1) (a) of the Patents Act, arguing that “the reasonable requirements of the public with respect to the invention have not been satisfied”.
b. If 60 dollars is not an affordable price for the common Indian, CIPLA could invoke section 84 (1) (b) arguing that “that the patented invention is not available to the public at a reasonably affordable price.”
c. I’m guessing that Tamiflu is not being manufactured in India (either directly by Roche or by any of its partners in India). If that is indeed the case, then CIPLA could also invoke the ground under 84 (1) (c) that “the patented invention is not worked in the territory of India.” However, it is not clear whether such a provision is TRIPS compliant.
d. The 2005 amendments to the Indian Patent Act provide an automatic compulsory license to generic companies, in so far as pharmaceutical mailbox applications are concerned. Thus for example, if Roche filed a mailbox application covering Tamiflu and if CIPLA produced a generic version of this prior to 2005, then it could ask for a compulsory license on a ‘reasonable royalty” basis. However, since CIPLA did not produce any generic version of TAMIFLU prior to 2005, it cannot invoke this ground.

2. A more creative option is for CIPLA to relocate its Tamiflu operations to Bangladesh (or tie up with companies there) and manufacture the generic version from there. It wouldn’t even have to pay any royalties in this case.

Being a Least Developed Country, Bangladesh has time till 2015 (under TRIPS) to implement product patents for pharmaceuticals. Contrary to popular notions of Bangladesh being so poor that it cannot support a domestic pharmaceutical industry, one would be surprised to learn that Bangladesh does have a robust industry.

CIPLA could even export the product from Bangladesh to India. You might ask: isn’t parallel importation a patent violation? (assuming that there is a patent in India). Not in this case, and certainly, not after the recent changes to India’s patent regime.

The earlier section 107A (b) provided that it was not an infringement to import a patented product, provided such import was from an exporter, who was ‘duly authorised by the patentee to sell or distribute the product’. The 2005 Act now makes such import easier by dispensing with the authorisation required from the patentee¾it mandates that the exporter of such patented product only be ‘duly authorised under the law to produce and sell or distribute the product’.

Under this amended provision, CIPLA could set up base in Bangladesh to manufacture and export medicines to India. Absent a patent in Bangladesh, and/or any other law barring manufacture/exports, such company would presumably be ‘duly authorised’ under the laws of Bangladesh to ‘sell or distribute the product’.


Therefore, currently, CIPLA faces negligible risk while manufacturing, selling or importing into India. But what of its exports to the US or EU markets? This is a little tricky, since a patent right in these jurisdictions means that Roche can prevent CIPLA from importing TAMIFLU versions. Here again, the only way out is through the grant of a compulsory license. This is precisely what a US senator and a CPTech letter propose.

Interestingly enough, the US does not have any compulsory licensing clauses within its patent regime that can be invoked by private parties directly¾rather this has to be worked into the ‘takings clause’ in 28 USC §1498 and perhaps the ‘eminent domain’ principle enshrined in the fifth amendment to the US constitution. Under these principles, the government could use the patent either directly or indirectly (through third parties) without the permission of the patentee, subject only to payment of some reasonable compensation.

The US threatened to do something similar with Bayer’s patent during the Anthrax crisis and I don’t see why it wouldn’t step in now, particularly since Roche is yet to don its humanitarian robes and commit to some serious licensing.

Unlike the US, most European member states, and the UK in particular, have compulsory licensing provisions within their patent regime. Section 48A of the UK Patent Act provides that a compulsory licence can be granted if “a demand in the UK for the patented product is not being met on reasonable terms”

As I mentioned earlier, apart from the legal issues, there is also the technical issue of whether CIPLA can do this in good time. While a WHO official and Roche sound sceptical about the ability to reverse engineer Tamiflu in a short time and come up with a generic substitute, CIPLA’s President, Hamid birms with confidence. I extract from the news item:

WHO flu chief Stohr is not optimistic that generic producers would be able to make Tamiflu. He told reporters in San Francisco that the drug takes a full year to make and involves a potentially explosive process that would drive out all but the most sophisticated manufacturers. It would take a generic supplier at least "two years" to put a plant into action.


Roche claims that “Making the drug involves 10 complex steps…. and the company believes that it will take another company two to three years, starting from scratch to produce it.”Dr. Hamied, Chairman of CIPLA however dismissed that claim, saying that he initially thought it would be too hard but that his scientists had finished reverse-engineering the drug in his laboratories two weeks ago. He said he could have small commercial quantities available as early as January.Asked if he thought Dr. Hamied was making an idle boast, Mr. Hurley declined to comment.”

I would wager that Dr Hamid is right here—and being an excellent chemist himself and not just an MBA laden proprietor, I’m sure he knows what he is talking about.

I’d advise Roche to hire a new PR division and rethink their strategy, as this is a very sensitive issue. With the flak that the pharmaceutical industry seems to receiving on an almost daily basis for placing profits over human lives, they should immediately commit to a widespread licensing scheme with low royalty rates. A good licensing strategy would at least ensure that they make some money (through licensing fees). If the government decides to take over their patent or worse still “revoke” it (as happened with Agracetus’ patent covering transgenic cotton in India), they would get nothing.

This is not to say to say that Roche is not doing anything to help. Indeed, today’s news item states that it is donating three million packs of Tamiflu to the WHO and a small quantity to Romania. However, what is perturbing is it’s intention to remove the sole producer.

"Roche and its partners fully intend to remain the only manufacturer of Tamiflu and are best qualified to scale up production," spokesman Daniel Piller said on Friday.

If it does indeed have the wherewithal to supply, this is not an issue. However, at this stage, one cannot state this for sure, particularly since Roche refuses to release production figures.

A guaranteed and timely supply of this drug is critical, particularly, since Tamiflu is thought to work best within 36 hours of symptoms. What is interesting is that Roche has stated that if need be, it would outsource production¾so perhaps Indian generics would gain either way. I would wager that with CIPLA’s heroic statements about breaking its patent, CIPLA would be way down in the list, when it comes to Roche chosing outsourcing partners!!


All the above is only to show that even in major healthcare crises of this sort, we still have to grapple with property rights. A recent article in nature states that “We have the means to make a vaccine against pandemic flu. But quarrels over money, science and politics mean it could come too late”. You can bet that patents make up for a large chunk of the “money” equation.

Also, I’m wondering that if we have so many issues with Roche’s existing patent, what are we going to do when the virus mutates or develops resistance?

"There are now resistant H5N1 strains appearing, and we can't totally rely on one drug (Tamiflu)," said William Chui, honorary associate professor with the department of pharmacology at the Queen Mary Hospital in Hong Kong.

We need to quickly think of innovative ways to decrease the incidence of patent blockages and of incentivising rapid research in this area. Tamiflu is only the first line of defence and is not a vaccine—and yet, its patents threaten to pose problems.

The actions of an Indian research institute are exemplary in this regard, where, IGIB, headed by Dr SK Brahmachari used an in-house “gene decipher” software to determine the functions of 3 genes of the SARS virus¾rather than applying for patents, they made these results available via their website, so as to speed up research on a potential SARS vaccine. This generosity was spurred in some part by the fact that the genome of the SARS virus itself was available in a public database. Do we see an open source model being built here? Whatever the case, we need more such commitments in times like this and not a strict insistence on property rights.

Mehta on Chief Justice Lahoti’s jurisprudential legacy, and a similar attempt in the past

Yesterday’s Telegraph carries Pratap Bhanu Mehta’s evaluation of Chief Justice Lahoti’s tenure at the helm of the Indian judiciary. (Click here for a related post on this blog). Referring to Chief Justice Lahoti’s impact on jurisprudence, Mehta observes:

“ [Chief Justice Lahoti] catalysed some significant opinions that range from indefensible to potentially revolutionary. For instance, the court’s judgment upholding a Haryana government order that having more than two children should disqualify a candidate for running in local elections displayed neither constitutional sense or policy sagacity. In the Jharkhand affair, he overdid matters enough to raise concerns about trespassing on legislative prerogative. The decision on the Illegal Migrants (Determination by Tribunals) Act also waded into choppy political waters. The decision in Inamdar to take Article 19 seriously was potentially liberating, but marred by some ad hoc observations. He certainly kept the Supreme Court interesting, but made both politicians and constitutional experts nervous. But other than recounting specific judgments, can one describe him as having a judicial philosophy?

… … … Like with so many recent judges, he engages in what might be called the jurisprudence of exasperation. The function of law in this view is to express, both literally and figuratively, exasperation at the state of affairs. This is not a jurisprudence based on a concern for the formal allocation of powers. Nor does it consider carefully the actual consequences of law. Rather, it expresses a certain impatience with reality. So for instance, the judgment upholding the disqualification of candidates with more than two children was not interested in justifying the constitutional principle; nor did it really ask whether preventing a small number of people from running for office would have such an impact on our procreation propensities as to justify a drastic abridgment of rights. It ended up deriving a position from consternation at the rising population. Or take Inamdar. Much of it, especially the invocation of Article 19 was argued on principle but in the end the observations about the relationship between reservation and merit was more about an exasperation with what the judges think of as mediocrity, than a considered argument. Much in our society would prompt us to tear our hair out in exasperation. Judges now see it as their job to give these sentiments expression in law. But how far a jurisprudence of exasperation will sustain the authority of the court remains to be seen.”

These are provocative words, and I hope that others who have been following the current Supreme Court’s work as closely as Mehta will also weigh in.

Elsewhere in the same piece, Mehta notes the difficulties involved in assessing the judicial philosophies of Indian judges, and laments the fact that few Indian jurists have attempted to do so, making jurisprudence “almost completely moribund in India”. Mehta does note that there have been honourable exceptions among Indian legal jurists, and identifies Upendra Baxi, Rajeev Dhavan and SP Sathe specifically.

In this post, I will briefly describe the attempt of the late Prof PK Tripathi to evaluate the legacy of Chief Justice Gajendragadkar (who, as noted by Mehta, was closely identified with social reform). Chief Justice Gajendragadkar was the 7th Chief Justice of India, became a Supreme Court judge in 1957, and occupied the highest post (CJI ) between 1964-66. Soon after he retired, Prof Tripathi authored a massive 108 page review of his tenure as a Supreme Court judge, which was published in the Journal of the Indian Law Institute (Vol 8, Oct-Dec 1966, pp 479-587). The Journal of the Indian Law Institute was the leading law journal in India, with an outstanding reputation globally, reflected in the fact that some leading contemporary jurists of the world published their academic work in its pages.

PK Tripathi’s review, titled ‘Mr. Justice Gajendragadkar and Constitutional Interpretation’, encompasses a vast terrain, and analyses Justice Gajendragadkar’s judgements on the following topics: agrarian reform, religion and state, separation of powers between the executive and the legislature, relations between the State and its employees, freedom of trade and the taxing power of states, supremacy of the judiciary, and the Judiciary and legislative privileges. The last topic is especially focused on (occupying 43 pages), as Tripathi is extremely critical of Chief Justice Gajendragadkar’s majority opinion in Keshav Singh’s case (a landmark ruling seeking to strike a balance between powers of legislatures in respect of privileges and that of courts). Tripathi’s review is no exercise in hagiography. As noted, he is extremely critical of several aspects of Justice Gajendragadkar’s judicial philosophy (though, in keeping with the times, such criticisms are prefaced throughout with this phrase: “It is submitted with great respect”). Equally, Tripathi showers praise on Gajendragadkar’s rulings in the Balaji and Makhan Singh cases. In the concluding section, Tripathi praises the “great qualities of balance and restraint” which “predominantly marked the entire range of the judicial pronouncements of Mr. Chief Justice Gajendragadkar.” He then offers this prescient comment (at page 586):

“Possibly the most vulnerable aspect of Mr. Justice Gajendragadkar’s opinions has been the process of decimating the sanctity of the constitutional text that they seem to have inaugurated. … …. As is well-recognised, the dividing line between interpretation and alteration is tenuous and deceptive. Constitutional interpretation, therefore, can easily take the place of constitutional amendment, and the interpreter, that of the sovereign authority invested with the power of amending. As evidenced by his spirited defence of the amending power in the Sajjan Singh case, towards the end of his tenure in the Court, the learned Chief Justice seems to have sensed with some discomfiture the projected possibilities of the technique he himself had evolved and applied with such singular effectiveness. Whether or not it was too late by then will be for history to unfold.”

If you recall that these words were written in 1966, it becomes clear exactly how far-sighted they were, as events that unfolded over the next few decades did indeed demonstrate.

One may or may not agree with Prof Tripathi’s philosophy of constitutional interpretation, but there is no doubt that this particular piece – and his scholarship in general – exemplifies the type of jurisprudence that Mehta seems to be advocating for in his stimulating essay.

In seeking to revive jurisprudence in India, perhaps we should commence the task by uncovering, and learning from, previous attempts to establish a creative, socially relevant jurisprudence for India.

Friday, October 14, 2005

WILLING TO STRIKE BU

WILLING TO STRIKE BUT AFRAID TO WOUND
This is the title of an interesting piece [http://www.hindu.com/2005/10/10/stories/2005101000561000.htm] by N. Ravi which appeared in the Hindu on October 10,2005. While the order of the Supreme Court seems to have won more bouquets than brickbats, I would like to don the role of the Devil’s Advocate and focus on some of the disturbing issues that the judgment throws up. I hold no brief for Buta Singh, and my concerns are directed more towards the scope and extent of judicial review of a proclamation issued under Article 356. While any detailed analysis of the issue will necessarily have to await the release of the detailed judgment of the court, a few preliminary points seem to be in order.
One, the judgment is symptomatic of the Court’s tendency to delve deep into the political thicket. The Bihar Dissolution is not unique in India’s constitutional history, but the reaction of the Apex Court is certainly without precedent. Further, the dissolution could be justified on more than one count. The elections had thrown up a hung assembly and no concrete coalition of formation had yet been cobbled together which offered the possibility of a stable government. The popular press reported desperate measures by political parties to poach members of other political formations so as to reach the magical figure of a simple majority of members in the Assembly. Does a Governor have to sit by and permit horse trading, unethical coaxing and cajoling so that the political class somehow cobbles together a government? Is the formation of a government by means ethical or otherwise the sacrosanct end of a democratic society? In these circumstances, wouldn’t it be preferable to go back to the people and enable them to resolve the issue? In this view of the matter, would not the actions of the Governor and the President pass muster in light of the test laid down in the SR Bommai Case?
Whether the dissolution took place at midnight or mid-day; whether the Cabinet’s recommendation was forwarded to the President in Moscow or Delhi- aren’t all these but red herrings which surely should not influence judicial decision making?
I look forward to reading your views on this.

Insights into India's approach to the WTO, Third World coalitions and foreign policy

Shamnad's recent post reminded me of an academic paper by Andrew Hurrell and Amrita Narlikar, titled "A New Politics of Confrontation: Developing Countries at Cancun and Beyond". In this piece, Hurrell and Narlikar contest some of the conventional wisdom in International Relations Theory about how and why developing countries behave as they do in contemporary times. Hurrell and Narlikar argue that the recent confrontational politics at the WTO (as exemplified by the clashes at Cancun in Sep 2003) need to be understood in terms of a complex range of adaptive strategies pursued by developing nations. They assert that unlike the call for a New International Economic Order by developing nations in the 60s and 70s, the present challenge has not advanced a vision of an alternative development, and has instead demanded a change within the regime rather than a radical restructuring. They offer a number of explanations for the pursuit of such a strategy by developing nations, focusing primarily on India and Brazil. In so doing, they offer a number of insights into how decision-makers in both nations come to their final stances on foreign policy, WTO diplomacy, attitudes towards free trade, etc. Though the piece as a whole (which appears to be an extract from a longer research paper) is extremely interesting, I focus here on certain observations they make about India.

In their section focusing on how India conducts its WTO diplomacy, Hurrell and Narlikar begin with the perception which Shamnad referred to at the end of his post, by noting:

"Along with Brazil, India is a country that has long been seen as among the most proficient in WTO diplomacy. Indian commitment to Third World-ist coalitions of resistance in the WTO has continued even after it began its programme of economic liberalization in 1991 and despite frequent instances of complete isolation even after other coalition members have defected. The unbroken proficiency and leadership of the Indian delegation in Geneva has invited acknowledgement from many other developing country delegations; in the words of one African country, ‘'India is the voice of the voiceless in the WTO'.’"

Hurrell and Narlikar then go on to making some critical observations about how WTO policy is actually made within India. They note that despite India's democratic credentials, which would lead to the belief that the decision-making process is transparent and enables consultations with interested groups, the actual policy-making process is very insular. They note that the process is Geneva-based, rather than closely connected with the capital, even though the delegation is dominated by members from the Ministry of Commerce. They then make this important observation about the "serious lack of awareness of WTO issues" within India in general:

"Even while Indian universities have produced some of the leading economists in the world, very few universities focus on international economics and international political economy, let alone international trade law or WTO law. A few think-tanks and specialized institutes in economics (such as Indian Institute of Foreign Trade - IIFT and Indian Council for Research on International Economic Relations - ICRIER) conduct studies on some specialized sectors -– some of them commissioned by the government -– but these are few and scarcely provide the knowledge necessary to keep an active check on the negotiation process. In the case of NGOs, the picture is even gloomier. Few are able to engage proactively and constructively in debates relating directly to the technical issues covered by WTO negotiations (with some notable exceptions such as the Consumer Unity and Trust Society-– CUTS). The Ministry of Commerce holds occasional seminars to engage with civil society, but chooses whom to invite in these forums and whom to exclude."

This strikes me as being very true, and I believe this aspect needs to be emphasised. India's reputation for WTO diplomacy should not prevent resources being poured into this vital area.

Later on in the paper, Hurrell and Narlikar comment upon how India's trade policy and foreign policy often seem at odds with each other, and explore the influence of the two establishments being manned by people from differing backgrounds - the IAS and the IFS respectively. There are many other interesting insights, including their assertion that despite having adopted policies of liberalisation, "there continues to be a general suspicion of liberalisation" within India.

In this important paper, Hurrell and Narlikar offer telling glimpses into an area which is largely shut from the public domain. Those with an interest in these issues will, I am sure, benefit from a reading of this paper, even if they disagree with particulars of their argument or with its orientation.


Tuesday, October 11, 2005

Early reactions to the Rameshwar Prasad (Bihar dissolution) case

Since the Supreme Court has only issued an order as opposed to a reasoned judgment in the Rameshwar Prasad case, analysis of the ruling is necessarily constrained. The consensus among those who have reacted so far appears to be that the institution of Governors in the states needs an overhaul. Writing in yesterday's Indian Express, Pratap Bhanu Mehta argues:

"The court’s order will ... put pressure on governors to give objective evidence that [they] had made a good faith effort to find a government. In Bihar, the fact that no was even given an opportunity seemed to suggest mala fide. But here civil society should also take some of the blame. We have created an atmosphere where, in the case of fractured verdicts, the use of any possible criteria — single largest party, single largest pre-poll coalition — smacks of partisanship. When being invited determines your ability to form a government, and not the other way round, the governor has a difficult job. But solution is what the President Naryanan [found] in 1999 in inviting the BJP: issue a statement of reasons why a particular party has been invited. If that government fails, the case for dissolution becomes cogent. The courts will now force governors to exercise public reason, not subjective discretion."

(Aside : He also offers this interesting insight into the manner in which the Supreme Court resolves controversial issues: "[T]his case is symptomatic of the way in which the court operates. It acquires greater and greater formal powers for itself, but is reluctant to use them in opposition to actual political currents. So both Laloo Prasad Yadav and Arun Jaitley can look upon the court as a saviour. This may be a prudent modus vivendi; it is not the first principle of law.")

Today's Indian Express carries a column by Soli Sorabjee which contains an overview of the debates among the framers of our constitution on the office of the Governor,and also details some important historical moments in the evolution of the institution to its present state of crisis. He observes:

"The Governors’ role in imposition of President’s rule has been notoriously partisan. Their reports are tailor-made to advance the political aims and machinations of the Centre. The Supreme Court in the case of President’s rule imposed in Nagaland, in Karnataka and in Meghalaya ruled that the Governors’ reports on whose basis President’s Rule was imposed as tainted with malafides and declared the dissolution of the assemblies of those States as unconstitutional. The recent instances of misuse of the Governor’s office as exemplified by the Governors of Goa, Jharkhand and Bihar—the unholy trinity—would make even the angels weep."

Pankaj Vora makes a similar point while analysing the UPA government's gubernatorial appointments in today's Hindustan Times.




Sunday, October 09, 2005

Shekhar Gupta on subsidies

Shekhar Gupta has a nice editorial in Saturday's (8th Oct) Indian Express. He discusses the issue of large government subsidies (power, water, LPG and higher education) benefitting the middle and upper middle classes - rather than the poor. Subsidies create market distortions - and end up benefitting everybody but the poor. At the same time, misplaced subsidies have created unrealistic expectations amongst the middle class - cheap power (protests against 10% tariff hikes), cheap water, cheap education etc. How does one begin to build political consensus for the reform of public utilities and the phasing out of government subsidies? In large part, this will depend on the results of the privatization that has taken place so far, and whether there are any perceived efficiency gains - in Delhi, the results are clearly mixed. Also, for those based in Delhi and interested in regulatory issues, NCAER is organizing a seminar in Delhi on Monday - details are on the website.

Brilliant move by Brazil at the WTO

For those of you who follow intellectual property (IP) and international trade issues, I'm sure you’re aware of the rather schizophrenic nature of the US when it comes to enforcing international trade/WTO norms. While the US is one of the strongest enforcers of TRIPS obligations, it is also one of the most flagrant violators of antidumping and subsidy norms (the other side of the ‘international trade law’ coin).

Despite a WTO ruling almost 2 years back, the US continues with it’s notorious Byrd Amendment. I, for one, have always pondered about this and wondered why developing countries that were at the receiving end of US trade related sanctions (or threats) never leveraged this two faced behaviour to their advantage. Well, it seems the time has finally arrived and Brazil (which has been a sort of trend-setter in developing country IP policy) seems to be doing exactly this. I quote from a recent news item:

“Brazil yesterday formally asked the World Trade Organization toauthorize its request to impose over $1 billion in retaliation againstthe U.S. for its failure to eliminate WTO-illegal cotton subsidies, andasked that part of this retaliation take the form of suspension ofservices and intellectual property rights obligations.
Specifically, Brazil said in an Oct. 6 request to the WTO DisputeSettlement Body that it wants to suspend concessions in the areas ofcopyrights, trademarks, industrial designs, patents and protection ofundisclosed information, all areas subject to concessions under theWTO's Agreement on Trade Related Aspects of Intellectual Property Rights(TRIPS).One informed source agreed that Brazil's request "approaches a trend"among WTO members who want to retaliate against other members that donot comply with WTO rulings in a way that prompts them to comply, butwant to avoid imposing duties on imports, as these duties end up hurtingthe retaliating country. This source said this plan is "quite clever,"as it would likely put much more pressure on the U.S. to comply with thecotton panel decision."With tariffs, you only end up shooting yourself in the foot, and theymay not induce the U.S. to comply," this source said. In contrast, hesaid Brazil's proposal would "get the services and IPR people by thescruff of the neck," which would likely be much more effective inprompting U.S. compliance.”

It is indeed a “clever move” and developing countries have plenty to draw from this “thinking outside the box” move by Brazil. India, in particular, has a lot to gain, should Brazil succeed with this argument. On the one hand, India challenges antidumping/subsidy norms of the US before the WTO, and on the other hand, it remains at the receiving end, when it comes to intellectual property enforcement. Most folks are familiar with the notorious Special 301 Report of the US and the WTO complaint in 1999 against India, alleging that India’s patent regime did not grant interim protection to pharmaceutical inventions. The 2005 patent amendments in India are supposedly India’s final step towards complete TRIPS compliance. However, there are signs that the US (and more particularly the PhRMA) is closely watching to monitor the implementation of this legislation and check for TRIPS compliance. For those interested in this legislation, please see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=764066 where I’ve done a short analysis of the new regime.

I remember reading a piece that stated at as regards WTO disputes, Brazilian and Indian legal arguments matched up with the best in the world, reflecting the quality of lawyering in these countries. This novel argument by Brazil at the WTO is again evidence of this trend. Can’t speak too soon though—as this is just an argument put forward by Brazil to the WTO and a ruling is awaited. However, it’s an interesting and creative argument that if accepted, would, at some level set right the inequities imposed by international trade agreements, particularly TRIPS.

Friday, October 07, 2005

Bihar Dissolution Order

Earlier today, the Supreme Court has delivered its eagerly awaited verdict in the Bihar Dissolution Case. The case is called Rameshwar Prasad v. Union of India. The Court has ordered elections to go ahead, although it found the dissolution of the Assembly under Article 356 unconstitutional. I am not entirely sure who it favours, since both sides appear to have "hailed" it. Here is the full-text of the order, which can be obtained from Judis. The case was decided by a five-judge constitutional bench headed by Justice Y.K. Sabharwal, and included Justices K.G. Balakrishnan, B.N.Agarwal, Ashok Bhan, and Arijit Pasayat.

The General Elections to the Legislative Assembly of Bihar were held in the month of February 2005. The Election Commission of India, in pursuance of Section 73 of the Representation of the People Act, 1951 in terms of Notification dated 4th March, 2005 notified the names of the elected members.

As no party or coalition of the parties was in a position to secure 122 seats so as to have majority in the Assembly, the Governor of Bihar made a report dated 6th March, 2005 to the President of India, whereupon in terms of Notification G.S.R.162(E) dated 7th March, 2005, issued in exercise of powers under Article 356 of the Constitution of India, the State was brought under President's Rule and the Assembly was kept in suspended animation. By another Notification G.S.R.163(E) of the same date, 7th March, 2005, it was notified that all powers which have been assumed by the President of India, shall, subject to the superintendence direction and control of the President, be exercisable also by the Governor of the State. The Home Minister in a speech made on 21st March, 2005 when the Bihar Appropriation (Vote on Account) Bill, 2005 was being discussed in the Rajya Sabha said that the Government was not happy to impose President's Rule in Bihar and would have been happy if Government would have been formed by the elected representatives after the election. That was, however, not possible and, therefore, President's Rule was imposed.

It was also said that the Government would not like to see that President's Rule is continued for a long time but it is for elected representatives to take steps in this respect; the Governor can ask them and request them and he would also request that the elected representatives should talk to each other and create a situation in which it becomes possible for them to form a Government. The Presidential Proclamation dated 7th March, 2005 was approved by the Lok Sabha at its sitting held on 19th March, 2005 and Rajya Sabha at its sitting held on 21st March, 2005.

The Governor of Bihar made two reports to the President of India, one dated 27th April, 2005 and the other dated 21st May, 2005. On consideration of these reports, Notification dated 23rd May, 2005 was issued in exercise of the powers conferred by sub-clause (b) of Clause (2) of Article 174 of the Constitution, read with clause (a) of the Notification G.S.R.162(E) dated 7th March, 2005 issued under Article 356 of the Constitution and the Legislative Assembly of the State of Bihar was dissolved with immediate effect.

These writ petitions have been filed challenging constitutional validity of the aforesaid Proclamation dated 23rd May, 2005. Mr. Soli J. Sorabjee, Senior Advocate and Mr. P.S. Narasimha, Advocate and Mr. Viplav Sharma, advocate appearing-in-person have made elaborate submissions in support of the challenge to the impugned action of dismissing the assembly.

On the other hand, Mr. Milon K. Banerjee, Attorney-General for India, Mr. Goolam E. Vahanavati, Solicitor General and Mr. Gopal Subramaniam, Additional Solicitor General appearing for Union of India and Mr. P.P. Rao, Senior Advocate appearing for the State of Bihar also made elaborate submissions supporting the impugned Proclamation dated 23rd May, 2005. Many intricate and important questions of law having far reaching impact have been addressed from both sides. After the conclusion of the hearing of oral arguments, written submissions have also been filed by learned counsel.

Fresh elections in State of Bihar have been notified. As per press note dated 3rd September, 2005 issued by Election Commission of India, the schedule for general elections to the Legislative Assembly of Bihar has been announced. According to it, the polling is to take place in four phases commencing from 18th October, 2005 and ending with the fourth phase voting on 19th November, 2005. As per the said press note, the date of Notification for first and second phase of poll was 23rd September and 28th September, 2005, date of poll being 18th October, 2005 and 26th October, 2005 respectively. Notifications for third and fourth phases of poll are to be issued on 19th and 26th October, 2005 respectively.

Keeping in view the questions involved, the pronouncement of judgment with detailed reasons is likely to take some time and, therefore, at this stage, we are pronouncing this brief order as the order of the court to be followed by detailed reasons later. Accordingly, as per majority opinion, this court orders as under:

1. The Proclamation dated 23rd May, 2005 dissolving the Legislative Assembly of the State of Bihar is unconstitutional.

2. Despite unconstitutionality of the impugned Proclamation, but having regard to the facts and circumstances of the case, the present is not a case where in exercise of discretionary jurisdiction the status quo ante deserves to be ordered to restore the Legislative Assembly as it stood on the date of Proclamation dated 7th March, 2005 whereunder it was kept under suspended animation.


Note that the Court's "decision" is only an order with conclusions on the issues. The order notes that the case involves many "intricate and important matters," but explains that a detailed judgment with reasons "will take some time." Therefore, the order is a summary of the Court's conclusions. Presumably, a final decision with detailed reasons will come later. This course of action is unusual, although not without precedent. The Court had to decide the matter quickly since the election schedule had already been announced. Therefore, by rendering its conclusions in a brief order, it won some breathing time to write, I hope, a set of articulate opinions that clearly set out its reasons. In practical terms, these opinions must be delivered before January 2007 when Justice Sabharwal (to be Chief Justice of India next month under convention) will retire.

I hope that we can meaningfully analyze the final judgment when it becomes available online. It is also a good opportunity to understand how our present Supreme Court interprets S.R. Bommai v. Union of India, (1994) 3 SCC 1. That decision is now ten years old, but with one notable exception, it has received little legal analysis. But it was a binding precedent for the Rameshwar Prasad bench, and it will be interesting to see how it was relied on. Bommai is not cited in today's order. But the Court seems to have been influenced by it when it notes that this matter does not call for the exercise of "discretionary jurisdiction" to restore the dissolved assembly, a power that Bommai affirmed can be exercised in appropriate cases. Yet, that power has never been exercised in India since Bommai expressed declared that it was available (overruling the 1977 Rajasthan Case on this point).

Recent analytical newscolumns of interest to lawyers

Continuing our focus on regulation in India, here is a powerful critique of the recent governmental proposal to revamp power sector regulation in India (Thanks to Promod Nair for the link to the piece which appeared in the Hindu on Oct 05). Though the piece tends to be quite technical in places, it deserves close analysis because the issue of regulation, as Sudhir reminds us, is going to be of pivotal importance in the years ahead.

Today's Hindu carries a column by a person involved with the National Campaign for People's Right to Information. Reminding readers that the central Right to Information Act comes into force on Oct 12, the piece sets out powerful examples by which the right can be used, and concludes:

"A few million applications across the country by concerned citizens on issues that interest them will bring a major change in India and be a determined move towards the Swaraj we desire. There is a great need to spread the usage of this countrywide, so that transparency and good governance triumph. We now have the power; we only need to use it. It is simple to use, and the benefits are immense."

Lastly, today's Indian Express carries a column by Saeed Naqvi analysing the ongoing process of constitutional change in Kenya. Commenting on the forthcoming referendum to increase the powers of the Kenyan Presidency, Naqvi provides insightful background notes on the ethnic, religious and tribal politics of contemporary Kenya. The piece is an affirmation and illustration of the concept that trying to analyse constitutional law without a grounded understanding of the local politics of a culture, is an exercise in futility.


Thursday, October 06, 2005

Taking Suffering Seriously

On many issues, I'm not what you'd call a "bleeding-heart liberal." But I purloined the caption for this post from Professor Baxi's famous piece on public interest litigation in India. I'm using it to reflect on this article in today's Hindu about this old woman in Chennai. It was quite heart-wrenching to read. It talks about how an old, old woman (an unbelievably ancient 112 according to the article) who was beaten-up by goondas and thrown out of her dwellings. She sought justice and got none -- until recently when two young lawyers noticed her plight. Through their intervention, the Tamil Nadu legal aid folks have taken up her cause in court. And I do hope she prevails.

I first grew angry reading this story. It reminds me that, despite our recent economic achievements, we have a long way to go in providing a stable and secure social-security framework for all our people, especially our citizens. You don't have to be a communist to realize the importance of providing such benefits. Indeed, an important measure of a country's progress and economic development is how it cares for its elderly and retirees. This woman had no where to go, and no one cared for her. Surely our society (and it does not have to be the government) can do much more for people like her.

But there is a glimmer of hope in this article too. It shows that, despite its shortcomings and failures, our judicial system does protect about the poor, the infirm, and the underprivileged. The actions of the two lawyers (my heroes for today) who found this woman and the judge who promptly took the case reveals that our much-maligned profession does have a very noble side to it. They remind me of why many of us (speaking for myself, at least) were attracted to law school in the first place. Growing up in India, it is hard to avoid visible manifestations of injustice, deprivation, and misery in daily life. Suffering and struggle are present everywhere you go -- in great measure and with discomforting frequency.

The idealists among us thought legal education would enable us make a difference. Law School would equip us with the skills to end these outrages and make our India a better place. The less motivated (but also concerned) ones became lawyers to quench that dismaying sense of guilt about these problems. As our careers have progressed, many of us, me included, have strayed into other more seemingly attractive avenues. Yet, these wanderings have not extinguished that burning desire in us to demand that justice be done. Stories, such as this one, suggest that we, as lawyers, have so much more to do. What Nehru said paraphrasing the Mahatma is probably apt to quote in this context:

The ambition of the greatest man of our generation has been to wipe every
tear from every eye. That may be beyond us, but as long as there are tears
and suffering, so long our work will not be over.

Wednesday, October 05, 2005

The role of the Judiciary in India's constitutional democracy - an old issue revisited

Today's Indian Express carries a thoughtful Op-ed piece by Bimal Jalan on the continuing controversy about the proper roles of the judiciary and the legislature in our constitutional democracy. Jalan carries forward a tradition of prominent Indian economists who have gone on to careers in government, and is currently a nominated Rajya Sabha MP. (His website provides further details about his career and also contains some of his speeches).

In commenting upon one of the classic issues of constitutional theory, Jalan notes that India' s recent political history adds a new flavour to the dilemma:

"In taking a view on relative powers, it is also necessary to consider certain important changes that have taken place in India'’s political landscape in the past 15 years or so. First, in the Centre as well as in several states, a coalition of parties constitutes a majority and forms the government. However, many of the parties in coalition are bitterly opposed to each other in some states (or at the Centre) where they are not parts of the ruling coalition. Secondly, since 1989, the average tenure of the government in power at the Centre has been relatively short. There have been as many as six general elections and seven governments (not counting the present government).

An important consequence of indecisive electoral verdicts and short tenures has been that ideology and programmes have now become largely inconsequential. Any party is willing to combine with any other party for possible political or electoral gain. Most parties now have one or two leaders who decide on [the] party'’s choice of candidates. The leader also decides whether to join a coalition and who would represent the party in government. Coalitions, leaders and ministers may come and go, but when in power, nothing prevents them from imposing their will on Parliament, revers[ing] policy decisions taken only a few months ago, and pass[ing] any law, or even the budget, by a voice vote without discussion.

Against this perspective, can there by any doubt that, on balance, the country is better off with the judiciary as an additional checkpoint on legality of actions taken by the legislature and the executive?"

As legal scholars continue their debate over issues of constitutional theory, it is important to bear in mind such considerations of pragmatism and realpolitik. In Jalan's case, it is clear that his long years amidst the tumble of Indian politics have added a rich layer of pragmatism to his analysis of contemporary events.

Tuesday, October 04, 2005

On the mission of Ramachandra Guha

I would like to revisit Ram Guha's article that Arun posted on the 28th of September. I decided that I would make an independent posting and not simply comment on Arun's post since in my mind it brought up a couple of issues that merit further attention.

Arun sets up Guha writing as scholarship that legal academics would do well to learn from. However having followed Guha's biographical essays over the last couple of years I couldnt disagree more with Arun about their usefulness for academic and scholarly reflection. The piece that we have been directed to is I think a case in point.

While I am not for a moment quarelling with the literary significance of biographical writing I am not sure that it necessarily provides us with a model for academic reflection and scholarship. This I think is amply reflected in this particular essay, which says nothing whatsoever on the significance of Amartya Sen or Andre Beteille to their respective fields of scholarship. While Guha is skillful writer who evokes the biographic richness of Indian public life, I think that we must be extremely cautious in offering him as a model for academic scholarship. As Arun himself has pointed out and as this essay demonstrates Guha can often be given to hagiographic interpretations of important intellectual and political figures while glossing over the intellectual and political problems that concern them. For example in this case it is not at all clear why Sen and Beteille are the 'finest and most honorable intellectuals of our land and our time'. Im sure that many would agree with Guha but without justification it becomes nothing more than an empty assertion.

What then is the task of Academic writing and reflection (in law as well as other social sciences)? In my mind I have little doubt that academic writing involves identifying and solving intellectual problems. While I can fully understand Arun's concern that academic writing strive for clarity I think it also has to bite the bullet and deal with difficult questions problems and questions (For instance like the question 'what is law?' that Hart takes up in his book 'the concept of law') . In doing so its immediate relevance, interest and significance to the so called broader public might be limited. Arun seems to worry about this excluding possibility lurking in academic activity however Im not sure if there is any other way in being an academic? Wonder if others have thoughts on the matter?

Regulation Law 101

The Business Page of today's Telegraph would work well as an Reading List on an Introductory Course on Regulation Law in India. To start with, notice TRAI's ability to articulate a policy of promoting rural telephony and transfer large funds to effect that - activities previously shrouded in the dark corridors of the Union Department of Telecom. Not so proficient is the Petroleum Ministry in arbitrating between the interests of GAIL and Reliance in the Natural Gas pipeline business where GAIL complains about deparmental favouritism! The lack of clarity in the scope and jurisdiction of the regulatory institutions - the RBI as a central bank administering the Banking Regulation Act and the Indian Chartered Accountants Institute the self regulatory body for auditors - keeps Ramesh Gelli and cohorts at what was the GTB chuckling with delight. And finally, the Power Ministry is hell bent on clipping the power regulators wings and returning policy making and tariffs to the bureaucratic barons and politicians who man this big department.

All this should leave noone in doubt that Regulation Law is at the heart of the reformulation of Indian Public law and provides the principles for redesigning the Indian state. It's about time that all of us gave this a serious look in and produce useful knowledge that aids (or hinders!) this enterprise.