Wednesday, November 11, 2009

The recusal debate

Vivek Reddy's most-admired piece seems to have contributed to a healthy debate on the subject of recusals. Here, I wish to share with readers two interesting responses I received - one from Shamnad Basheer and another from K.V.Dhananjay.

I also found P.P.Rao's article on recusal by Judges (Go to Article and click 'Accusation of bias against Judges')published in Tribune very informative. I welcome readers' feedback to these responses, and to P.P.Rao's article.

Shamnad Basheer:
This logic can be stretched ad absurdum . Why don’t we just have a simple test of “is the interest (whether pecuniary or otherwise) significant enough to influence the judge”? A determination in this regard can be made by a special body constituted for this purpose (comprising of senior judges + senior counsels with no interest in the matter and/or academics (or other reasonably objective stakeholders)). The pecuniary vs non pecuniary distinction is arbitrary to some extent—since a judge who owns a share worth Rs 10 may still have to recuse himself under this standard.



K.V.Dhananjay:

This 'recusal' business is simply going out of hand in India. A judge of the Karnataka High Court, L.Narayanswamy recused himself a few days ago in a case that involved a Bank in which the judge happens to hold some 'account'. If only this were to be taken as a precedent, no judge of the Karnataka High Court could possibly hear any case that involves the BESCOM (the sole State company that distributes electricity in Bangalore and which, of necessity, powers judge's residences and the High Court). Or say, a case involving Toyota Motors Company because Judges of the High Court are daily transported in cars manufactured by Toyota Motors. Better yet, no judge in India (excepting judges of rural courts who must be waiting for their sanctioned computers) could possibly adjudicate on any dispute involving Microsoft Corporation simply because Microsoft happens to manufacture the operating system or one or more applications installed in computers used by or for judges.

A judge should, invariably, recuse himself while adjudicating a dispute involving a company the shares of which are held by that Judge. After all, shares of publicly traded companies have no intrinsic value and a decision may itself become 'market moving information'. Further, the securities laws in India, like it is in other countries, forbids the acquisition, possession or dissemination of 'market moving information' by any person except through sanctioned channels. A judge who generates 'market moving information' through his decision is placed in 'no better privileged position' under the securities laws than say, any insider within that company.

4 comments:

Renu Gupta said...

@ Shamnad: The suggestion that you make takes us into more procedural aspects thereby delaying adjudication (separate committees for each case where a judge is interested). Here eventually, the final blame for an alleged biased judgment given by the interested judge, would be put on such committee instead of the judge. Then people would want to know whether the committee was in any other manner influenced. There may even be situations where a number of judges are interested in a particular matter. For instance, it will not be unusual to discover that a fair number of sitting supreme court judges have shares in any of the Reliance companies.

@ Dhananjay: A very interesting analysis vis-avis insider trading. However, I think that since SEBI regulations regarding Insiders, require an insider to have access to “unpublished price sensitive information”, a decision resulting in movement in price of shares of a company cannot be treated as unpublished price sensitive information.

Renu Gupta said...

After reading P.P Rao's article, the questions thatc ome to my mind are :
1) Would a lawyer on being asked by a judge, whether you have any objection to my adjudicating the dispute, despite my disclosure of interest, ever reply in the affirmative?

2) Is there any precedent where the response of the lawyer has been in the affirmative?

3) I think Justice Scalai's principles of recusal are extremely sound. He set these out in a memo when he was said to be interested in a case against the US govt, because he had gone duck hunting with Dick Cheney, VP

Shamnad Basheer said...

Dear Renu,

You've raised some important points. Let me use the occassion to clarify further. The scheme proposed would not mean that judges are absolved of taking an independent call themselves on their suitability at the first instance. Indeed they do--and if they are honest enough to admit conflict, they will recuse themselves. This situation provides for those cases--where the judges aren't sure as to whether there is a conflict in the first place. If judges refuse to flag it up despite a potential conflict, either parties or members of the public could send a note to the Committee alleging that there may be a conflict. This situation also provides (to some extent) for fears that merely leaving the challenge upto parties may not work--as very few lawyers would want to take on the judges.

Yes--this system may involve delays and costs--but once standards begin emerging from such committee decisions, presumably, all players will begin to have more certainty around conflict rules and not have to raise challenges/questions each time.

Renu Gupta said...

http://businessworld.in/bw/2009_11_16_Justice_Kapadia_Recuses_From_ITC_Matter.html