Saturday, January 31, 2009
Initial reports indicate that Chawla has refused to resign, while the CEC is reluctant to comment on Ram's story, let alone reveal the contents of his recommendation. Ram's story raises at least two specific issues. They are:
A. Can the CEC recommend EC's removal suo motu?
The CEC himself has taken the stand in his affidavit to the Supreme Court that he can. The CEC, according to Ram's story, claimed that he based himself on his own experience and observations of Mr. Chawla’s work as Election Commissioner. If the CEC takes the stand that he initiated his review of the EC's conduct as the EC after receiving a complaint from the BJP (even though he later rejected the BJP's allegations as irrelevant) it may not be very convincing. Therefore, it is useful to read his own affidavit to the Supreme Court, and Mr.Ashok Desai's legal opinion given to Mr.B.B.Tandon, his predecessor in April 2006, both of which I do not have presently, in order to throw light on how the CEC defends himself. In the absence of a complaint or a petition, there should have been a formal reference from the Executive to the CEC. As there is no formal reference, one can assume that the BJP's petition to the CEC led to his review of Chawla's conduct as the EC.
B. The SC's judgment in the T.N.Seshan case shows that the CEC's reasons for removal of an EC must be based on intelligible and cogent considerations. As we don't have a copy of the CEC's recommendation to the President, we can't yet say whether the reasons he advanced are intelligent and cogent. The SC's judgment in the Seshan case is here.
In this previous post, Arun reflects on the history of Article 324, and suggests that the SC has gone into this in its judgment in the S.S.Dhanoa case. It is worth reproducing from Arun's post (which itself draws from the Dhanoa judgment) what Ambedkar had said on the present Article 324(5):
Commenting upon Clause (4) of the then Article 289 (now Clause (5) of Article 324), Dr. Ambedkar stated as follows:
So far as Clause (4) is concerned, we have left the matter to the President to determine the conditions of service and the tenure of office of the members of the Election Commission, subject to one or two conditions, that the Chief Election Commissioner shall not be liable to be removed except in the same manner as a Judge of the Supreme Court. If the object of this House is that all matters relating to Elections should be outside the control of the Executive Government of the day, it is absolutely necessary that the new machinery which we are setting up, namely, the Election Commission should be irremovable by the executive by a mere fiat. We have, therefore, given the Chief Election Commissioner the same status so far as removability is concerned as we have given to the Judges of the Supreme Court. We, of course do not propose to give the same status to the other members of the Commission. We have left the matter to the President as to the circumstances under which he would deem fit to remove any other member of the Election Commission, subject to one condition that the Chief Election Commissioner must recommend that the removal is just and proper.(Emphasis supplied)
In his previous post, Arun makes the point (with which Dilip concurs) that in the matter of removal of the Election Commissioners, the CEC's recommendation need not be binding on the Government. Arun's another previous post on this issue is also helpful in determining the correctness of CEC's action, and provides necessary links to the contemporary debate in 2007 including this retort from the CEC to an earlier incorrect report in The Hindu.
The initial reaction to the CEC's recommendation focusses mainly on its timing,with several observers making the point that it is this which makes the CEC's action motivated. But these observers probably miss the point that the CEC was perhaps keen to follow the due process, that is, give Chawla a notice, wait for his reply etc. which has taken nearly a year's time. Therefore, the criticism of the CEC's action must be based on other grounds, not necessarily on its timing. It will be, therefore, interesting to know what grounds which the CEC himself cites to justify his suo motu recommendation, if only to know how vulnerable they are.
Friday, January 30, 2009
He then went on to articulate what he saw as five ruptures associated with “law”, stating that at one level, these ruptures exist in our theoretical understanding of the scope/thought of law, but at another level, they are also ruptures in our experience of the law. He argued that the resolution/reconciliation of the issues produced through these ruptures will not come through a theoretical engagement with the concept of law but by thinking practically as to how law relates to the world.
1. Law and Order: Prof Mehta stated that order is what the law cannot achieve because it demands some sort of sacrifice and yet increasingly, law is being asked to create its own order. The likely outcome of this process is not that there will be more order in society but that the integrity of the law will be compromised in achieving this order. In some senses, our engagement with the law is wavering between the two extremes of violence and law.
2. Law and Authority: The rule of law depends upon the recognition of the authority of enacted laws. Yet law itself has never lived up to its idealized manifestations. While its authority depends upon its ability to resist gross manipulations, sometimes law gives in to such manipulations. Our society today is characterized by conflict and increasingly we are asking law to mediate differences. But does law have the power to adjudicate between these deep differences of opinion? Plato’s nightmare was that in a democracy, everyone would be entitled to their opinion. However, as can be seen from contradictory committee reports on the Gujarat riots, one condemning and the other absolving Modi, today law’s capacity to adjudicate the very facts that it relies upon is in doubt. This mocks the idea of public reason which is at the very core of the idea of law.
3. Law and representation: As Hobbes, Rousseau, Kant all perceived, law’s authority and legitimacy depends upon its being representative. The central problem of modern theories of law lies in identifying in what way enacted laws are “ours”. In an apparent reference to judicial decisions overturning legislation/intervening to hold representatives with criminal/corruption records accountable, he stated that we are increasingly dealing with a world where law is mostly an antidote to representative politics, insofar as representative politics is itself under strain. There is both radical and populist scepticism about the idea of representation.
4. Law and Justice: The question as to how law relates to justice is an age old one. The conditional obligation that lawmakers impose is not that of “justice” in the abstract but that of “justice in relation to law”, which sometimes seems to produce unjust outcomes.
5. Law and Legitimacy: Old social contract theories still ground the legitimacy of law. Why do practices of popular authorization not produce laws that are legitimate? Why is it that laws are enacted in our name and yet we are not satisfied with the outcome?
These five ruptures determine not just our theoretical predicament but also our practical experience of the law. What then remains of the idea of rule of law? According to Dr. Mehta, law provides us a shifting set of modus vivendi. He concluded his remarks by stating that our dilemma is that we are looking at law to resolve the crisis in our society, and yet the crisis in law derives from a wider crisis in society.
It appears to me that the five “ruptures” that Dr. Mehta spoke about are true of law at any given stage and time of its evolution and history. Yet, perhaps what makes these ruptures especially significant in India today is that our expectations from law and the institution that administers it, i.e. the judiciary have risen due to the larger crisis of public institutions in our society. It is when law/the judiciary fails to meet our expectations because it is inherently and institutionally incapable of meeting them that we perceive a crisis in the “rule of law” and experience outcomes that make a “mockery of public reason”. Therefore, we need to resolve the crisis in our society by reforming public institutions that stand for each of the values which the law seeks to attain and which are simultaneously seen in rupture with the law in our practical experience of the law. In my opinion, these include:
· Order (police reform);
· Authority (judicial autonomy and accountability as well as executive compliance with judicial decisions);
· Representation (reform of electoral and other processes to prevent election of criminal/corrupt representatives and ensuring that our elected representatives are truly representative of all their constituents and not mere exploiters of caste/religion vote banks);
· Justice (reform of civil and criminal procedure and enhancement of judicial capacities to ensure a reduction in delays in administration of justice)
· Legitimacy (reform of the legislative process, strengthening of legislative capacities, greater involvement of civil society in the law making process, perhaps supra majority requirements for highly contentious laws).
Clearly then Dr. Mehta’s talk goes beyond the issue of the nature and limits of judicial authority and is in fact more fundamentally a call for reform of public institutions in India, whether legislative, executive, judicial or political. In light of the recent Satyam scandal discussed in detail on this blog here and here, I think the call for reform extends to private actors like corporations that due to their sheer size and the magnitude of their impact on people’s lives are “public” in a very real sense of the term.
In his article, Vennard argues that the effectiveness and the accountability of the government is clearly promoted by having a recognised leader. The argument that a Cabinet chairperson looking after the PM's functions is sufficient does not appeal to Vennard. He recalls that in 1956 Rab Butler chaired the Cabinet for several months during Anthony Eden's illness. But he notes that although Eden was abroad in Jamaica, it was possible for Butler to remain in contact with Eden and to take instructions from him, or even recall Eden if necessary. Just contrast this with how our Prime Minister was completely inaccessible for governance for a week. He warns that the role of the PM is not confined to chairing the Cabinet, and that situations could develop which would require decisive leadership. If presented with such scenarios, an individual whose role is limited to chairing the Cabinet may find that he is unable to command sufficient authority. Recalling that Eden's absence occurred when Britain was in the process of disengaging from the Suez conflict, Vennard questions whether Eden was correct in taking leave on health grounds, when the situation was grave. Eden ultimately resigned shortly after he returned from his leave of absence.
Manmohan's absence when the country has just recovered from the Mumbai attack points to the inherent dangers to our security, and the potential risks of PM's absence, when such a crisis recurs.
Vennard's suggestion is to provide for an Acting PM. In the absence of a Deputy PM who could take over as the Acting PM, he says, the Cabinet Ministers should be empowered to appoint one of their number as Acting PM. Vennard does not include India in his comparative study. But India, in my view, appears unique in that it enables a Prime Ministerial succession with all the flexibility that is required for an interim period, without compromising or diluting his authority, powers or functions. Sadly, our leaders have not realised the inherent potential of Article 74 to address the situations like the one we are currently facing.
Thursday, January 29, 2009
Both Justice Pasayat and the Solicitor-General may consider the ongoing debate in the U.S. following the Inauguration very relevant to what they have said about terrorism in India. While Yoo chastised President Obama in a recent article(Obama made a rash decision in Gitmo)another commentator, Charles Fried, in the course of defending officials like Yoo, made the following observation, which succinctly sums up the discomfort of those defending the indefensible while pursuing harsh counter-terrorism policies. He said:
"Our physical survival is not what is of overriding moral importance (people give up their lives all the time for some higher value) but our survival as decent human beings acting for a decent society. And we cannot authorize indecency without jeopardizing our survival as a decent society."
Wednesday, January 28, 2009
Guest Blogger: Manoj Mitta
Why there was no need for Manmohan Singh to resign
If it is alright for Pranab Mukherjee to officiate for Manmohan Singh during his illness, then Gulzarilalal Nanda could well have filled the void in 1964 and 1966 without going through the formality of taking oath as Prime Minister. Or so says my friend V Venkatesan while disagreeing with my explanation of how the cabinet is carrying on despite the Prime Minister’s temporary absence. In reality, Nanda is no precedent to today’s situation because both his stints followed the incumbent’s death, not illness. That makes all the difference.
For, contrary to Venkatesan’s impression, the Constitution does make a distinction between a casual vacancy and a temporary absence, even if it did so in the context of the President. Article 65 (1) says in the event of a vacancy in the office of the President by reason of “his death, resignation or removal or otherwise,” the Vice President shall act as President till a new one is elected. And Article 65(2) says when the President is unable to discharge his functions owing to “absence, illness or any other cause,” the Vice President shall discharge his functions till the President resumes his duties.
Given the calibrated approach displayed by the Constitution in the case of the President, there is little reason to suggest that similar flexibility cannot be adopted in the case of Prime Minister in the absence of provisions corresponding to Articles 65(1) and (2). Since there is no vacancy just now in the office of the Prime Minister, there was no need for Mukherjee or anybody else to be sworn in as Manmohan Singh’s successor upon his hospitalisation. Instead, on the analogy of Article 65(2), somebody could well officiate for Manmohan Singh till he recovered enough to resume his duties.
Such an interpretation would also save the constitutional system a great deal of stress. For, if the PM were to resign for any reason (whether due to an illness or otherwise), then the entire council of ministers would have had to go with him. Whoever had been sworn in as PM for the interim period or otherwise, would also have had to get a team of ministers sworn in along with him or after him. This is because when an ordinary minister resigns, there will be a vacancy only in his ministry. But if the PM resigns, then the whole government collapses.
The term of the council of ministers is co-terminus with that of the PM’s. This does not however detract from the fact that the PM is first among equals in what is known as the “cabinet government.” Though other cabinet ministers are appointed on his advice, they are not subordinates who can be overruled by the PM. As Article 74 says, it is the council of ministers that aids and advises the President, and as Article 75 says, it is again the council of ministers that is collectively responsible to Lok Sabha. The only special provision that is there for the PM is the one that casts a duty on him to be a conduit between the President and the council of ministers.
Tuesday, January 27, 2009
1. The media, the government and a lot of other commentators are refering to the violent attacks in Mangalore as a form of "moral policing", albeit violent. I find this very objectionable. The phrase "moral policing" attaches some sort of moral legitimacy to the act and only questions the act if it becomes violent. What the Mangalore attackers did and a lot of other misguided mobs are doing in India on a regular basis is nothing but sheer hooliganism with the intention of causing terror and gaining political mileage (and not necessarily in that order). There is no, and cannot be any, moral legitimacy attached to such acts by characterising such acts as "moral policing". I think we need to recognise these actions for what they are- plain and simple hooliganism- and stop using the word "moral policing". I hope the police, political class and civil society take such events more seriously than they currently do and treat them as what they clearly are- a threat to our fundamental values.
2.What is the difference between the Mumbai attackers and the Mangalore attackers? Despite being aware of the perils of comparison, I think the later constitute a more serious problem for us as a society. Even if one is able, at some unbelievable societal & philosophical level, to reconcile a ghastly incident like the Mumbai attack as an act perpetrated by "foreign elements", it is impossible to reconcile the Mangalore attacks. After all, the Sri Ram Sena is an organisation formed by Indians and supported by other Indians, including a number of mainstream political and non-political actors. The LeT and Ajmal Kasab are not. Failure to control and prevent incidents like the Mangalore attack is certainly a more serious challenge to our society.
Monday, January 26, 2009
1. Letter to the Union Minister for Health and Family Welfare from Sama, a women’s health group suggesting changes to the Draft ART Bill, 2008 (thanks to Ms.Sarojini).
2. Business and Ethics of Surrogacy in EPW.
Sunday, January 25, 2009
In response to my request to share with us the highlight of his RTI saga, he wrote as follows:
"Delhi High Court is designated court to entertain writs against decisions of Central Information Commission. Counsels for public-authorities usually obtain ex-party stay-orders against CIC verdicts and thereafter continue getting adjournments after adjournments in our adjournment-based judicial system, thus harming the very cause of implementation of ‘Right-To-Information Act’ for providing a petitioner required information in a time-bound period. Otherwise also, many-a-times, cases against CIC verdicts do not come for hearing because of over-stretch of earlier cases listed for hearing on that day.
"Necessary reforms are utmost necessary at Delhi High Court to overcome this situation at a time when RTI Act is getting momentum fast. Firstly since CIC verdicts provide sufficient time to public-authorities for implanting CIC order, RTI petitioners should be served notice first avoiding any ex-party stay-orders against CIC verdicts. Interestingly even caveats are not entertained from RTI petitioners in probability of public-authority filing a writ at the Court!
"Secondly, a particular day in the month say first Monday of every month may be fixed at Delhi High Court when the concerned bench may hear writs only against CIC verdicts in a manner that next adjournment in any such case may not be more than a month. Department of Justice obtained an ex-party stay-order against CIC verdict on one of my RTI petitions in April 2007, and the case has not moved further even an inch in last 21 months with 12 adjournments! Central Information commission should be taken as role-model where requests for adjournments from public-authorities are usually not entertained till petitioner agrees."
CIC's website carries one of his articles here. Two more recent landmark decisions from the CIC on the basis of his RTI applications can be read here and here.
Update:Dr.Rajeev Dhavan's article 'What is the hitch your honour?' can be read here, as carried in Mail Today on Jan.26. Pratab Bhanu Mehta's for the judges' sakes was carried in IE Jan.27.
Saturday, January 24, 2009
1. There is no lacuna in Art.74: Having provided in Art.65 that the Vice-President can officiate as President in the absence of the President, did the Constitution-makers forget to include a similar provision in the case of the Prime Minister? In the U.S., the electors of the President know who is the Vice-Presidential candidate, who will take over as the President if there is a vacancy. Therefore, the U.S.Constitution provided for such a succession. In India, which follows Parliamentary democracy, voters do not know who the Prime Minister will be after the elections, let alone his successor, in case of a sudden absence of the PM. Therefore, our Constitution-makers wisely refrained from copying the American model. Instead they worded Article 74 to require that there ought to be a Council of Minister headed by the Prime Minister all the times. That is, the two ingredients of Article 74 are inseparable twins. The Constitution does not envisage an absentee Prime Minister. Like every one, Manoj agrees that the PM is absent, and will be absent for a month at least. Therefore, the right course would be for the PM to resign, and let his successor be sworn in as the next PM, in accordance with what his party decides.
2. Why does our Constitution not recognise an officiating PM?: The answer lies in Manoj's own story where he claims, apart from other things, the PM also has access to the nuclear button. Can such a responsibility be entrusted to someone who is just officiating - whether legally or through a formal/informal mechanism, as Mr.Pranab Mukherjee does now? In 1948, the question of access to nuclear button might not have arisen, but the Constitution-makers did know that the office of the PM is endowed with serious and onerous responsibilities, and it requires a full-fledged leader who enjoys the confidence of the House. An officiating PM cannot enjoy the confidence of the House, even if the Constitution had sanctioned it. Therefore, they expected the ruling party or coalition to quickly move in, elect a new leader, and ask that leader to accept the office of the PM, in case there is a sudden vacancy. A vacuum in the office of the PM, even for a few hours, is a serious matter. Remember 1984 when the nation took a few hours to choose Indira Gandhi's successor? What we are likely to witness is vacuum for several days, which is ominous. Here, precedents may be cited - Vajpayee when he was hospitalised or even MGR when he went to the U.S. for treatment as the Chief Minister for nearly a month. Well, these were flawed precedents which did not correctly reflect the spirit of Article 74.
3. Is the Prime Minister first among the equals? A bare reading of the Constituent Assembly Debates on December 30, 1948, when it discussed draft article 61 (corresponding to the current article 74) suggests that the office of the Prime Minister was conceived as the supreme one, and an inevitable concomitant of Parliamentary democracy. One Member K.T.Shah wanted deletion of the words "with the Prime Minister at the head' from draft Article 61(1), but the amendment was rejected after a lengthy reply from Ambedkar.
"Supposing you have no Prime Minister; what would really happen? What would happen is this, that every Minister will be subject to the control or influence of the President. It would be perfectly possible for the President who is no adidem with a particular Cabinet, to deal with each Minister separately singly, influence them and thereby cause disruption in the Cabinet. Such a thing is not impossible to imagine. Before collective responsibility was introduced in the British Parliament you remember how the English King used to disrupt the British Cabinet. He had what was called a Party of King's Friends both in the Cabinet as well as in Parliament. That sort of thing was put a stop to by collective responsibility. As I said, collective responsibility can be achieved only through the instrumentality of the Prime Minister. Therefore, the Prime Minister is really the keystone of the arch of the Cabinet and unless and until we create that office and endow that office with statutory authority to nominate and dismiss Ministers there can be no collective responsibility.
"...I have not been able to understand why, for instance, Prof. K. T.Shah thinks that the Prime Minister ought to be eliminated.If I understood him correctly, he thought that he had no objection if by convention a Prime Minister was retained as part of the executive. Well, if that is so, if Prof. K. T.Shah has no objection for convention to create a Prime Minister, I should have thought there was hardly any objection to giving statutory recognition to the position of the Prime Minister.
In England, too, as most students of constitutional law will remember, the Prime Minister was an office which was recognised only by convention. It is only in the latter stages when the Act to regulate the salaries of the Minister of Cabinet was enacted. I believe in 1939 or so, that statutory recognition was given to the position of the Prime Minister, Nonetheless, the Prime Minister existed.
"I want to tell my friend Prof. K. T. Shah that his amendment would be absolutely fatal to the other principle which we want to enact, namely collective responsibility. All Members of the House are very keen that the Cabinet should work on the basis of collective responsibility and all agree that is a very sound principle. But I do not know how many Members of the House realise what exactly is the machinery by which collective responsibility is enforced.Obviously, there cannot be a statutory remedy. Supposing a Minister differed from other Members of the Cabinet and gave expression to his views which were opposed to the views of the Cabinet, it would be hardly possible for the law to come in and to prosecute him for having committed a breach of what might be called collective responsibility. Obviously,there cannot be a legal sanction for collective responsibility. The only sanction through which collective responsibility can be enforced is through the Prime Minister. In my judgment collective responsibility is enforced by the enforcement of two principles. One principle is that no person shall be nominated to the Cabinet except on the advice of the Prime Minister.
"Secondly, no person shall be retained as a Member of the Cabinet if the Prime Minister says that he shall be dismissed. It is only when Members of the Cabinet both in the matter of their appointment as well as in the matter of their dismissal are placed under the Prime Minister, that it would be possible to realise our ideal of collective responsibility. I do not see any other means or any other way of giving effect to that principle. Supposing you have no Prime Minister; what would really happen? What would happen is this, that every Minister will be subject to the control or influence of the President. It would be perfectly possible for the President who is no adidem with a particular Cabinet, to deal with each Minister separately singly, influence them and thereby cause disruption in the Cabinet. Such a thing is not impossible to imagine.
"Before collective responsibility was introduced in the British Parliament you remember how the English King used to disrupt the British Cabinet. He had what was called a Party of King's Friends both in the Cabinet as well as in Parliament. That sort of thing was put a stop to by collective responsibility. As I said, collective responsibility can be achieved only through the instrumentality of the Prime Minister. Therefore, the Prime Minister is really the keystone of the arch of the Cabinet and unless and until we create that office and endow that office with statutory authority to nominate and dismiss Ministers there can be no collective responsibility."
Not all of Ambedkar's fears may be relevant now. But they help us to understand why the Constitution-makers considered the office of the Prime Minister and the President differently, and did not provide for an officiating Prime Minister.
Friday, January 23, 2009
This has infuriated the lawyers enough to go on a series of strikes demanding that the law should not be notified.
There are two strands of criticisms: criminal law will lose it power of deterrence, and, more specifically, that section 498A IPC cases dealing with cruelty against a woman by her husband and in-laws will lose teeth.
In this article, I detail the changes brought in by the amendment and also respond to the first criticism as being misplaced.
The government's main motive in bringing this amendment appears to be to free up space in our prisons and reduce the burden on our criminal courts. In fact, the latter is the main worry of some lawyers - the new amendments might drastically reduce the number of bail cases. While prison populations should reduce, I explain in my article that courts will continue to be clogged up since the amended law opens new (and, in my opinion, welcome) avenues of challenging arrests and impending arrests. Therefore, the lawyers' self-serving worry is also misplaced.
The critique from a section of the women's movement regarding section 498A was not responded to in the article. Here is an attempt to do so:
In an illuminating essay titled “Protecting Women against Violence?: Review of a Decade of Legislation, 1980-1989”, in State and Politics in India (Partha Chatterjee, ed.), Oxford University Press, New Delhi, 1997, Flavia Agnes had questioned the wisdom of Indian feminism's demand for successive law reforms that had only ended up further empowering the state. Feminism's important intellectual contribution was dismantling the private-public divide - something most contemporary civil liberties movements have come to accept and accomodate. However, there is much good in traditional ideas like the presumption of innocence, scepticism of the state and limited and justified exercise of police powers, which are often sacrificed not just by the women's movement, but also other social justice movements (SC/ST Prevention of Atrocities Act, 1989 being one example). On the other hand, the Protection of Women from Domestic Violence Act, 2005 is one example of a legislation that can respond to social justice concerns effectively without necessarily curtailing civil liberties. I believe there is a lot more to be said about Indian social justice movements' uneasy, if not sometimes antithetical, relationship with the civil liberties movement; as well as on their choice of the state as their site of struggle.
The broader debate aside, surely section 498A cannot be the only feminist concern. The state routinely uses its police powers to arrest, harrass, intimidate, abuse, torture and blackmail the most vulnerable sections of our society - sex workers, bar dancers, hijras, street children, beggars and other minorities. A good section, if not the majority, of this 'lumpen' prolitariat is constituted by women. The new provision will not stop their exploitation - but it surely will be one more weapon to fight such exploitation. If, and when, the spirit of the new provision is institutionalised within the police force, it will be really difficult to arrest these 'petty criminals'. Is this not something that should at least be considered as part of the equation?
Links to the legislative history of the provision (Hat tip to Venkatesan):
1. 154th Report, Law Commission of India
2. 128th Report, Rajya Sabha Standing Committee on Home Affairs
That judges are not well paid is a commonly aired grievance and was cited as the reason for the recent hike in judges’ salaries approved by the Union Cabinet. A similar complaint has been repeatedly made in the US by none other than the Chief Justice and other SCOTUS judges in speeches and before Congress of that problem now having ‘reached the level of a constitutional crisis’. This NYT article (link via marginalrevolution) cites two studies that challenge this claim as it pertains to the US. The first of them is a study of judicial pay-versus-performance in federal circuit courts and the second of state court judges. While it is no doubt true that the Indian system of appointments is very different and is difficult to compare with either of them, the first study is probably the closer of the two to India as direct election of judges is not involved.
Scott Baker who authored the first study found a few small but significant effects. One is that low pay is associated with slightly fewer dissents. Another is that judges coming from private practice write opinions faster than those coming from positions as government lawyers (again, this effect is not ‘terribly big’).
He also tests whether paying more creates a judiciary less motivated by its own influence. He quotes Ann Althouse who claimed thus: “If the pay is low, the judges will be the kind of people who don’t care that much about money. They might be monkish scholars, or they might be ideologues who see in the law whatever it is they think is good for us. . . . Low judicial pay should trouble us not because the judges will somehow lack ‘excellence.’ It should trouble us because the law will be articulated by ideologues and recluses.” He examines this question by asking whether the monetary loss suffered by judges correlates with citation bias, i.e., a greater incidence of citation of opinions of their ideological brethren but finds little evidence to support this contention.
He concludes that “the effect of low judicial pay is non-existent, at least when judicial pay is measured against the next best financial opportunity for most circuit judges. Low pay does not impact voting patterns, citation practices, the speed of controversial case disposition, or opinion quality.
… Low judicial salaries erect a barrier to entry onto the bench for some candidates. But this barrier is inconsequential if those candidates who are willing to take judgeships are indistinguishable from those candidates driven from the applicant pool by low judicial salaries. That is the story these data support.”
In the other study, the authors set out arguments about the factors that ought to determine judicial pay. One of the points they make is about comparison between judicial salaries and that of other legal professionals:
“…Judicial pay should advance the interests of the public. Whereas the existing debate focuses on comparisons between the salaries of judges and other legal professionals such as lawyers and law professors, the relevant question is not whether these salary differences are unfair. Compensation should be designed so as to give judges incentives to perform their office diligently in the public interest and to attract qualified people to judgeships. When raising salary does not change, or worsens, incentives, it is inadvisable; when it attracts people to judgeships who are more productive in the private sector or improves the patronage opportunities of elected officials, it is also inadvisable.
… We should pay judges more only if the incremental increase in pay will improve the social value of judicial performance more than the social cost of the higher pay.”
The big challenge, they acknowledge, is in determining that social value. The question they raise is relevant even to India given the opacity of our system of judicial appointments: could the increase in compensation trigger greater patronage opportunities in a system where elected officials have a more modest role to play?
Sunday, January 18, 2009
The first, an article titled “Globalisation and Foreign Direct Investment: Topical Issues and Case Studies” by Dr. Linda S. Spedding sets out some general principles governing FDI and also discusses the role of transnational corporations in improving risk management and governance. The article also covers the importance of linkages between globalisation and sustainable development.
In “Capturing Opportunity and Controlling Legal Risk : India’s US-Bound Deals in Challenging Times”, David Laverty outlines the legal landscape in the US that applies to Indian companies investing there. Laverty observes that, unlike India, the US does not have a detailed set of systems dealing with foreign investment notification and approvals, but that “there are still restrictions that apply in the US, but these are less common for acquisitions of private companies that are not engaged in defense or national security related activities”.
The three remaining articles discuss specific matters involving FDI in India:
1. The cover story “FDI and Globalisation” by Dara P. Mehta outlines the significant changes in economic policy that were effected in 1991 when the Indian economy was opened up to foreign investment. That represents a radical approach as the Indian economy had followed protectionist policies for several decades until then. Although this has resulted in economic development and growth since the early 1990s, Mehta outlines a series of issues involving FDI that continue to act as a bottleneck towards attracting further FDI. The first is a general issue that signals that a robust legal set up for FDI that is yet to fully evolve. The article notes:Overall, the timing of this topic for Halsbury’s Law Monthly is interesting. Governments all over the world (let alone India) are busy working on economic packages to boost development and employment, in order to overcome the economic slowdown and crisis. FDI forms an important part of this package. India too has consistently been taking measures to boost FDI, slowly but steadily, through a cautious approach. In that context, it is useful to pause and assess matters of legal policy and interpretation regarding FDI, as Halsbury’s Law Monthly has done. The take away from this discussion is that there is a need for greater certainty on the FDI policy – that ought to come from clearer policies written by the Government and appropriate (and purposive) interpretation of these policies in their working by the bureaucracyMehta then goes on to deal with certain specific issues such as (i) Press Note 1 of 2005 (that prevents foreign investors who had previous ventures in India from availing of the automatic route for further investments); and (ii) downstream investments by “foreign owned holding companies”, which present significant obstacles to foreign investment. In the case of Press Note 1 above, it is the strict rules laid down by the Government that pose an issue, while in the case of downstream investments it is a difficult (and somewhat far-fetched) interpretation adopted by the bureaucracy that causes problems. These are technical matters involving specific regulations, and the interested reader may refer to the article for further details.
“The Legal Framework to Regulate FDI
Ideally, a complex subject like FDI should be regulated by a single agency of the Government, acting under the authority of the same statute or of rules and regulations, properly framed under that statute. Unfortunately in India, this subject is administered by several agencies, some of whose function overlap each other. To make things worse, matters relating to policy are announced and reviewed by at least two agencies of the Government of India, the Department of Industrial Policy and Promotion (“DIPP”) whose executive arm is the Secretariat for Industrial Assistance (“SIA”) and by the Foreign Investment Promotion Board (“FIPB”).
Statutory regulation is effected by the Foreign Exchange Management Act 1999 (“FEMA”) and by the rules and regulations made thereunder. But, very often, the non-statutory policy measures that are announced by the SIA in the form of the so called Press Notes conflict or are inconsistent with some of the regulations and regulations issued under FEMA. Policy measures that are announced by these Press Notes are non-justiciable, whereas the decisions of the Reserve Bank of India made under FEMA or under any of the rules or regulations made under FEMA can in appropriate case be made subject to judicial review. These multi-level agencies of administration of FDI cause bewilderment and confusion to foreign investors and certainly do not promote the cause of the globalisation of FDI. Moreover, the bureaucracy considers that these press notes are equivalent to a rule or notification issued under a statute and regards them to be as immutable as the laws of the Medes and Persians!”
2. In “Recent FDI Dampeners”, Atul Dua and Amit Mehta paint the issues with a broader brush. Apart from interpretation of the FDI regulations discussed by Dara Mehta above, they argue that certain recent decisions by Indian courts and tribunals on taxation matters will prove to be a dampener for further FDI. In particular, they refer to the decision of the Bombay High Court in the Vodafone case and that of the Authority for Advance Rulings (AAR) in the Fosters case. In both these cases, income earned by foreign investors was held to be taxable in India although the income was arguably earned and received outside India. The basic message is that the long arm of the Indian tax man is a cause for concern for foreign investors.
3. Amid this mood of pessimism comes a more sanguine outlook in Ramni Taneja’s article “Judicial Perspectives Regarding Foreign Direct Investment and Globalisation”. Ramni points to various decisions of Indian courts that have usually refrained from interfering on matters of economic policy. She concludes that the “Indian judiciary has in its judgments consistently preserved as unassailable the economic and industrial policy of the Government of India, and its natural concomitant, i.e. the FDI policy”. But, note that this assessment is confined only to the FDI policy, and does not deal with taxation matters which present the opposite position as discussed by Atul Dua and Amit Mehta above.
The Constitution itself clearly lays out heightened powers for the CJI. Broadly, these are:
The CJI swears in the President and Governors;
the President must consult with the Chief Justice before appointing Supreme Court or High Court judges;
Article 127 gives the CJI power to appoint ad hoc Supreme Court judges
Article 128 the power to sit retired Supreme Court judges
Article 130 the power to sit the Court outside of Delhi (with the President's approval)
Article 146 the power to appoint officers and servants of the Court
Article 222 the power to move high court judges to another high court
Articles 257, 258, and 290 which gives the CJI the ability to appoint an arbitrator to resolve certain financial disputes between the centre and the states
He or she is also paid a bit more than the rest of the justices, (presumably) for taking on these additional responsibilities.
[note some of these powers are performed in conjuction with other justices, but the Chief Justice must be part of the process]
Beyond this though I would argue the CJI has also gained additional powers either through judicial decisions or just judicial practice that were not explicitly given in the Constitution:
1. The power to select justices for benches (as explained in the post below)
2. An arguably stronger ability to appoint judges on the Supreme and High Courts than the Constitution envisioned (This being affirmed by the Supreme Court in its constitutional case law.)
3. By more often sitting on a three judge bench than other justices his opinions routinely carry more weight. On a two-judge bench the junior judge usually defers to the senior, similarly on a three judge bench with the CJI, but the difference is that a three judge opinion is usually deferred to in the face of a conflicting two judge opinion - in this way the CJI's routine opinions carry more weight than other senior judges on their two-judge benches.
4. The power to decide which cases get heard and when. Although this process is rather opaque, my understanding is that if a CJI doesn't want a case to come up or wants it to come up right away, it can be made to happen.
5. The spokesperson for the Court, and its most public face. I am not sure if you can say this was not envisioned by the Constitution, but it is striking. For example, in the Hindu in 2008 Chief Justice Balakrishnan's name appeared in 273 articles, while Justice Katju only 24, Justice Pasayat 69, Justice Bhandari 26, Justice Kabir 28, and Justice Kapadia 16. Contrast this to a search of SCOTUS justices in the NY Times in the same time period where Chief Justice Roberts was mentioned in 66 articles, Justice Scalia in 61, Justice Stevens in 49, and Justice Kennedy (the now most important swing vote) in 158 articles.
6. Most letter PILs are addressed to the CJI whose office goes through the first wave of filtering (taking out complaints against judges, etc.) before they are turned over to the Registrar's PIL office who goes through the next round of filtering (which removes the vast majority of them before they even reach an admission bench of the Supreme Court). In this process the CJI's office is the only justice's office that will come in contact with these letter petitions before they make it to the PIL office.
Just because some of these powers were not explicitly given in the Constitution, doesn't make them unconstitutional, and I am not making that argument. At least in this post I'm not even arguing that the CJI has too much power - Judith Resnik in the US, for example, has questioned the wisdom of having the Chief Justice there wield as much administrative power as he does. I'm more curious about why this power arose.
My hunch is that much of it has to do with the size of the Supreme Court. With 25 other justices it's a rather unwieldy organization that is difficult to control. (What percentage of law professors in India can even name all of its current members?) As the court increases in size the Chief Justice ironically gains more power as the coordinator of all these other judges (who cycle through fairly quickly because of term limits thus creating collective action problems when they try to organize). This is something to keep in mind as an increase in the size of the Court is contemplated.
One thing this type of analysis does is refocus attention on the selection process of the CJI. Currently it's simply by seniority. This is not as innocuous as it sounds though since through birthday math one can determine whether someone will become a CJI depending on when they are appointed. Therefore, the CJI and the other judges involved in appointments are effectively choosing who to raise from the high courts to become a CJI at a later date (assuming they stay in good health, do not resign, etc.). This isn't necessarily a bad outcome. Arguably, this allows for the system to choose CJI's that have the proper background and temperament for the job.
Other alternatives would include having the CJI picked more explicitly by the political branches (something that for now seems ruled out, but perhaps could be considered at a later date). Alternatively, there could be an election for CJI from amongst the judges on the Supreme Court. This doesn't seem desirable as it could lead to vote trading on cases or a politicking that could bring down the prestige of the Court and create unhealthy rivalries. A rotation model where each justice could be CJI for a month has coordination and consistency problems, although perhaps some tasks could be delegated in this way. Finally, you could have a system where the CJI or judges are picked by a counsel that includes both judges and members of the political branches.
One could also work to simply reduce the power of the CJI. Cases could be assigned purely through lottery, cases could come before the Court on a pre-regimented schedule, the CJI could more regularly sit on a two judge bench, some administrative tasks concerning court employees could be given over to an independently appointed officer, etc.
I'd be curious to hear others thoughts. Did I miss some of the CJI's powers? Did I mischaracterize them? Why did these arguably additional powers arise and do any require reform? These are just some initial observations which I hope to build on later, but in the meantime I hope others do as well.
I recently got a chance to keep going back through five judge benches above on which the CJI has sat (again through Manupatra searches). I found no dissents (although a few concurrences) until Chief Justice Sharma's dissent in R.C. Poudyal v. Union of India in 1993, about 15 years ago.
In this case the reservation in the Sikkim legislative assembly for Sikkimese of "Bhutia-Lepcha" origin and for "Sangha" Buddhist Lamaic monasteries was challenged (the Sangha reservation also used a separate electoral roll). The challengers argued this reservation violated the Constitution's essentially republican and secular nature and the concept of "one person-one vote." The majority of three judges found that these reservations did not violate the Constitution or its fundamental features. Chief Justice Sharma and Justice Agrawal had separate dissents. Chief Justice Sharma argued that the Constitution did not allow for religious reservations or separate electoral rolls so these reservations were unconstitutional.
The opinion was handed down the day before Chief Justice Sharma was set to retire. With such a small data set it's difficult to draw too many conclusions from this. However, it reminds one of Aharon Barack's more recent dissent in Adalah v. Ministry of Interior in 2006. The Israeli Supreme Court also uses smaller panels like the Indian Court. As President of the Israeli Supreme Court for almost a decade Barack had a controlling hand in setting up which judges sat on which panels. He rarely found himself in dissent (never as far as I know, but I haven't looked into this enough to make that broad a claim) until Adalah which was decided shortly before he was set to retire (and also was a larger 11 judge bench, which arguably is much more difficult for an executive judge to control). This may point to an executive judge's power not only coming from his or her ability to create panels that have judges that are more likely to favour the executive judge's opinion, but also out of the threat of potential sanctioning through ongoing interactions (i.e. not being placed on important panels in the future). This hypothesis though is difficult to show with such a small data set. Also, as I went through the Indian judgments over the last 15 years I found that although often certain judges would be in a minority dissent they would then be on a later larger bench with the Chief Justice again, so it does not appear they were being punished for not agreeing in an earlier decision. Again, you would need more detailed analysis to come out with a conclusion either way.
One of the comments on my last post on this topic made the insightful comment that we would also need to look at this phenomenon from the perspective of CJI's dissent records before they were CJI - i.e. if a CJI was often in dissent before becoming CJI and then never or rarely was after this would add an additional way of showing that he may be selecting judges that are more likely to favor his outcome preferences.
One final note, although I went through the Manupatra judgments with a fair amount of care Manupatra makes mistakes and I certainly make mistakes so if anyone knows of any dissent by a CJI in a five judge bench or above (or even a three judge bench) since Poudyal please let me know.
Saturday, January 17, 2009
DEMOCRACY AND CONSTITUTIONALISM IN INDIA: A STUDY OF THE BASIC STRUCTURE DOCTRINE.
BY Sudhir Krishnaswamy. OUP, Rs.625, pp.244.
This very significant book, released during the LASSNET Conference in New Delhi recently, is likely to substantially influence the way we understand the BSD. Having read the book carefully, I cannot resist the temptation to facilitate a debate on the major propositions of the author on our blog in the coming days. The author joins issue with a few prominent critics of the BSD. I have invited Mr.Raju Ramachandran, one such critic, to respond to the author's book on our blog at the earliest. In view of the likely debate between the author and others on our blog, I urge you to buy this book at the earliest,(to read and digest it in time) in order to meaningfully follow the discussion on our blog.
I was quite pleased to find law information publicly available on the judis and the indiacode. However, it was too difficult to look for anything on these websites and so I started building tool sets to play with law data. At a certain point I felt that integration of these small software pieces will be very interesting. I was still skeptic as to whether search on law documents meant anything to common people who do not know the law jargon. In any case I integrated the tool sets into a search engine and got pleasantly surprised when many of my common queries were well answered. So I deployed it as a publicly available service, called it Indian Kanoon and fortunately many people have found it useful over time. When actual people start using a service (whether free or fee-based), the demand for correctness and usability increases significantly. The need to understand the problems, think about the issues and fix them have kept me in tight grip. Indian Kanoon was announced last January in a very crude form and a number of changes have gone in the past year. So this post is mostly to highlight what all work has gone into indian kanoon in the last year, what the challenges were and what features are planned in future.
Integrating more legal documents Indian Kanoon started only with supreme court judgments and central laws. Clearly this was not sufficient to many people who wanted to search in high court judgments, law commission reports and law journals. Over last year, a number of other legal documents have been added. Firstly, the law commission reports and a law journal was added. The law journal "Central India Law Quarterly" has been digitized and was put up on Internet by Devaranjan. The only problem in their integration was that the many of these documents were images scanned from the books. So I used tesseract, a free OCR software supported by google, for extracting text from these images. However, the text extraction quality was just 90% and I am skeptical if google uses tesseract for its own google books project. Tarunabh pointed out the availability of constituent assembly debates that can be integrated. He pointed out two main problems in integrating them. First, the article numbers in the debates were different than in the constitution. Secondly, debates are cited in the court judgments using page numbers in the official books. But both of these numbers were not available in the digital copy provided by the government. So the only way out was to go back to the actual books. We did not want to give away the digital route yet. So we went to books.google.com that had a scanned copy of the debates. Tarunabh emailed Google to release those books in public domain as the copyright on them has expired the previous year. Google replied saying that they are not sure about the copyright expiration and will be conservative in making books publicly available. Finally, I loaned the books from a library, manually copied the page numbers and the association list between the article numbers in the debates and the article numbers in the Constitution and integrated the constituent assembly debates. Indian Kanoon was highly deficient in terms of high court judgments and even in Supreme court judgments as Dilip earlier pointed out on my blog. So I integrated the high court judgments and made Indian Kanoon more comprehensive.
Features Beside making Indian Kanoon comprehensive in terms of legal documents, a number of features to make searching easier have been added. The most common problem was the mis-spelling of Indian names and so I first added the most critical feature for spelling suggestions. Ability to search and order documents by date was added next. The search and forums were redesigned to look aesthetically appealing. In order to provide notifications for new judgments, RSS feed for court judgments was recently added. Finally, people may like to monitor documents related to certain words or phrases. So on Tarunabh's suggestion I added the RSS feed for any arbitrary query.
Contributing code back Developing indian kanoon software has been possible because of the availability of large amount of free software. As a result I was able to modify these software and customize it for law search. Indian Kanoon uses a feature rich open source database - Postgresql as the backend. When users submit a query, matching documents are found, ordered and the top few are shown. For each document, the search engine also displays a small text excerpt where the query terms appear. The text excerpt allows people to quickly evaluate whether the document is relevant to the query. The headline function developed for indian kanoon was contributed back to postgres and has been added to the postgres CVS head. Beside that a bug in postgres was fixed as well. I also sent the phrase search function to the postgres list. But, Teodor Sigaev, who merged OpenFTS in the Postgresql, wants a generic operator that can check for arbitrary distance between the lexemes. I have not yet got time to work on this operator. Beside development on the database, the Indian Kanoon forums has been released as djangobb - Django Bulletin board that uses the django web application framework. The judis recently moved to a really obfuscated website where the judgment did not have a stable URL. Prashant Iyengar pointed out that we are not getting the live feed from the judis. So I reverse engineered the website and released the judis reverse engineering code.
Future works Even after so much of work a number of things need to be improved on indian kanoon. Here is a list of changes that I think are required to make indian kanoon more comprehensive, more rich and better in search. Please feel free to suggest more.
1. Reverse engineering different court and tribunal websites so that indian kanoon can provide a live feed of all Indian court and tribunal judgments.
2. Currently indian kanoon cannot answer questions like "list of judgments in which a particular law section was held" and "search only in family law judgments". The problem is that we do not have enough semantic information about judgments. So I want to enable common users to start tagging documents. There will be two kinds of tagging: categorizing court judgments and laws into broad categories like family law, constitutional law, right to equality etc and secondly, tag whether a judgment explains, bolsters, or overturns a given law or judgment. The tags generated by the users will be available to everyone with the Creative Commons-Attribution-Share Alike license 3.0.
3. A number of people type in natural language in the search box. For example, someone will type "recent judgments from delhi high court". Even though we can answer these questions, we directly search the query to the documents. For example, the above query could have been reduced to "doctypes: delhi sortby: mostrecent". So what we need is a small natural language processor that can automatically convert such natural language queries to a more precise query that the engine can evaluate.
4. I only support searching for a set of words in the documents. Roy wanted a more sophisticated query langauge that supports boolean queries. This will enable people to issue more complicated queries like (freedom OR speech) AND (NOT expression).
5. With the addition of more data over time, Indian Kanoon takes more than a second to evaluate some queries. A number of software changes (or possible hardware upgrade) are required to bring back the evaluation time to sub-second.
Thursday, January 15, 2009
By Vinay Sitapati
I’ve written three serial pieces on the Binayak Sen case for The Indian Express:
1. why he’s been in jail-without bail for 19 months;
2. how the case against him is unravelling;
3. the politics behind the case
Since it’s a reporting piece, I’ve tried to inject very little of my own opinion. I’ve also tried to make it less partisan. As it is, I think a mistake his supporters made was to make it into a political issue (are you for or against salwa judum; how can a doctor be accused thus – it’s a conspiracy), instead of a legal issue (Is Sen guilty under Indian law?). I think the latter question is more clearly in Sen’s favour.
The larger question, which I’m working on for an op-ed piece, is why India’s many public institutions (the police, the magistracy, the high court, NHRC and Supreme Court; apart from the state govt.) failed Binayak Sen. Some (especially Binayak’s supporters abroad) believe this is an instance of a monolith, venal state going after its opponent. That’s the kind of thing that happens in dictatorships and banana republics. India is not one of them. Given our obvious weaknesses, we still have a genuine democracy, and some vigorous public institutions. Witness how the NHRC and the Supreme Court went after Narendra Modi post-Gujarat. Also, the Central govt. sympathises with Binayak, as I pointed out; but are powerless. But these institutions all failed Binayak Sen. Why?
My own sense is that in the face of Naxal terrorism (which, make no mistake, is a grave threat) these institutions have 'bought' the war cries declared by the state govt., and see Binayak's arrest as a political issue -- collateral damage in the war against Naxalites. For just one analogy, witness how so many US institutions -- Supreme Court, Senate, Congress, media -- all rallied around Bush in the heady initial days post 9/11, when they should have been questioning him instead. In other words, I’m interested in exploring the question: what happens to cross-institutional checks and balances, when the law goes to war (in the context of the Binayak Sen case). Any takers?
[Relevant Links: Chattisgarh High Court Judgment declining to grant bail to Binayak Sen. The SC order, which Vinay refers to in his story, is curiously not available on its site, though I managed to get the case number. It is SR 4949/2007, Binayak Sen vs.State of Chhatisgarh -VV]
Update:: (JAN.20, 2009): Read Vinay's oped piece here.
Wednesday, January 14, 2009
This new book promises to be an extremely provocative read on a subject of Indian public law that certainly merits far greater scholarly attention than it presently receives.
From the preface:
"... There is much in India's history that is embarrassing. There is also much that is exhilarating. And while there is much that speaks of love, understanding, mutual respect and the togetherness which holds India's vast and complicated reality in peace, there is also much that is divisive, cruel and inexplicable. History is both a discipline and a statement. In the hands of the politicized Hindu Right, this discipline has been transformed by a perverse politics which wants to transform India's communitarian generosity of spirit into communal ill-will.
Free speech has to be preserved in the overcrowded spaces of the media, on the streets and in the vast open spaces of our mind against the onslaught of corporatism, doubtful governance and invidious divisiveness. Freedom of the mind and the right to self-expression and argument can only survive if intolerance is met with tolerance, and tolerance is not seen as weakness."
Finally, it is important to note that the book is a collection of essays written between 2004 and 2007, and some of the material is drawn from articles previously published in journals such as JILI.
For those interested in the issue of free speech, Ronald Dworkin's writings on the Danish cartoon controversy and on the right to pornography will serve as excellent readings.
Monday, January 12, 2009
Friday, January 09, 2009
At this stage, it would be premature - events are still unfolding as you read this - to attempt a detailed analysis of what went wrong. That will have to await the availability of relevant facts. However, this does give rise to several issues for consideration, especially on the questions of whether there has been a failure of the existing regulations on corporate governance (that enabled the insiders within Satyam to suppress information of this magnitude and hoodwink investors, regulators and the public for a sustained period of time), whether there was a lapse on the part of regulators such as the Registrar of Companies, the stock exchanges and SEBI in probing further for any red flags, and more importantly, whether the ‘gatekeepers’ such as the independent directors and auditors were truly oblivious of the wrongdoings by the top management (or whether they bore a duty to investigate and seek further information). All these questions will hopefully find some answers in the near future. But, for the present purposes, it would be useful to refer to the array of issues raised by my co-contributor Mr. Jayant Thakur on the Indian Corporate Law Blog.
This episode has invoked strong reactions from the industry, media and the regulators. On the regulatory front, several regulators have already registered their objections or initiated investigations. The Registrar of Companies and SEBI have already initiated investigations, while the Institute of Chartered Accountants of India has announced that it would examine the role of the auditor, Price Waterhouse Coopers, as regards the misstatements in Satyam’s accounts. We can perhaps even expect special commissions or committees to be appointed by the Government to look into the case. The findings, of course, are unlikely to be forthcoming in the near future, especially in a complex case such as this.
At a more general level, this episode is likely to tangentially result in wide-ranging changes to Indian corporate governance norms. After all, such instances shatter investor trust in Indian companies, and more so in the software sector, which is a flag-bearer of Indian industry. The media has termed this India’s Enron, and we all know only too well that the regulatory outcome from the Enron crisis was the enactment of the Sarbanes-Oxley Act in the US. In India, the Minister for Company Affairs has already announced that the Companies Bill, 2008 (which is pending in Parliament) will be reviewed to strengthen the corporate governance regime in the light of recent developments. While Satyam’s case is unfortunate as it severely hurts the interests of all its stakeholders (investors, creditors, employees), it serves as a wake-up call to the Indian industry in general that imbibing corporate governance principles in “spirit” is of utmost importance.