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EDITORIAL

NOIDA/DELHI

THE HINDU THURSDAY, MAY 12, 2016

A tale of two judgments

thursday, may 12, 2016

Lessons from
Uttarakhand
ormer Uttarakhand Chief Minister Harish Rawats victory in the floor test was a foregone
conclusion after the Supreme Court barred nine
dissident Congress legislators from participating in the confidence vote. The votes of 27 remaining
loyalists and a six-member bloc have seen him through.
The result, which has been confirmed by the Supreme
Court, brings an end to the Bharatiya Janata Partys political misadventure in exploiting the dissidence within the
Congress and attempting to install a government either
run or backed by defectors. Ever since the government
led by it hastily imposed Presidents Rule on the eve of a
floor test scheduled in March, it has been unable to convince the judiciary of the justification for doing so. Two
legal principles stood in the way of its plan: the bar on defection and the primacy of the floor test in determining a
governments majority. Whatever be the right of legislators to disagree with their leadership, it is limited by the
rule against defection, as the law stands at present. In Uttarakhand, of course, the situation was complicated by
the fact that a clear majority in the State Assembly
made up of BJP and rebel Congress MLAs had pressed
for a division of votes in writing in advance of the Appropriation Bill being taken up. While there is no escaping
the fact that Mr. Rawat had lost his majority in the House,
one lesson from the development is that one piece of impropriety (remaining in oice by the use of the Speakers
disqualification powers) does not justify another piece
of possible illegality (the imposition of Presidents Rule
after attempts at toppling a government were stalled).
As for Mr. Rawat, he will still have to face possible
prosecution if the CBI decides to press ahead with its
probe into a sting operation that showed him ofering
bribes to some MLAs for their support. The legal challenge to his reinstatement is also by no means over, with
the Supreme Court still to take a view on whether the disqualification of the rebel Congress MLAs was valid. At a
larger level, the Uttarakhand crisis raises important
questions that are relevant to the functioning of democracy: should Chief Ministers who have lost their majority
take recourse to the anti-defection law to stay in power?
Is disqualifying inconvenient MLAs an acceptable way of
managing the majority of a government? On the flip side,
should a few lawmakers, who constitute a fraction of a
partys strength in the legislature, be allowed to topple a
regime at the behest of the opposition? While the floor
test rule to prove majority laid down by the Bommai
judgment must remain, the time may have come to rethink the provisions that give Speakers untrammelled power to adjudicate on the issue of defection, particularly
when such rulings can have a direct bearing on a trust
vote. Bommai insured State governments to a large extent against the Centres machinations, as the BJP has just
rediscovered to its embarrassment. But the growing misuse of the anti-defection law by ruling parties across the
political spectrum suggests that Assemblies need some
insurance against scheming State governments as well.

Closing the
tax bolthole
ore than three decades and several billions
of dollars of lost revenue after India entered
into a bilateral Double Taxation Avoidance
Agreement with Mauritius, the two countries have finally renegotiated the terms of their agreement. The signing, this week, of the protocol for amending the treaty means that with efect from April 1, 2017,
companies and investors resident in Mauritius will have
to pay capital gains tax on the sale of shares purchased,
on or after that date, in a company based in India. The
amendment to the convention has been some time coming. In 2011, the UPA government had informed Parliament that a joint working group was in place since 2006
to ensure adequate safeguards to prevent misuse of the
DTAA and that work was in progress to strengthen the
agreement and improve the exchange of information on
tax matters. However, nothing concrete emerged. The
present NDA government too, in its first full Budget, presented in 2015, acceded to opposition from overseas investors and postponed the implementation of the General Anti-Avoidance Rules (GAAR) to 2017. It is against this
backdrop that the amendment to the DTAA with Mauritius comes as a very welcome development that could
help plug a significant loophole for tax avoidance. The
practice of setting up companies in Mauritius merely to
take advantage of the DTAA and the prevailing low tax
rates there will now be rendered pointless. There is to be
a mandatory check of the main purpose and bona fides of
a business a firm based in Mauritius will be deemed to
be a shell or conduit company if its total operational expenses in that country are less than Rs.27 lakh. It will not
be eligible for the 50 per cent reduction in tax rate on capital gains to be applicable to investments made under the
amended DTAA during a transitional two-year period
between April 1, 2017 and March 31, 2019. From April 1,
2019, all transactions attracting capital gains tax for investments made out of Mauritius will be taxed at the full
applicable rate prevailing at the time in India.
The DTAA amendment will also ensure Indias conformity to the Organisation for Economic Cooperation
and Development and G20-led guidelines on combating
base erosion and profit shifting. In 2015, the OECD had
spelt out a series of measures countries needed to take to
curb abusive tax avoidance by multinational enterprises
including steps to tighten double taxation avoidance
treaties. For a country keen to play a greater role in global
decision-making, the move to seal a key route for the
round-tripping of capital generated out of tax-dodging
enterprises will help boost both revenue and confidence
in the rule of law in India. It is beyond doubt that ensuring
a level playing field for all international investors, irrespective of domicile, can only serve to enhance Indias attractiveness as an investment destination in the long run.

CM
YK

In 1947, Justice Felix Frankfurter of the U.S. Supreme

Court advised one of the
chief architects of Indias
Constitution, Sir Benegal
Narsing Rau, to delete the
ABHINAV
words due process of law
CHANDRACHUD from the text of Indias draft
Constitution. However, two
recent cases, one decided by the Supreme
Court and the other by the Bombay High
Court, tell a very interesting, yet conflicted,
story about the incorporation of the U.S. doctrine of substantive due process in Indian
constitutional law.
The 5th and 14th amendments to the U.S.
Constitution provide that a person cannot be
deprived of life, liberty or property, without
due process of law. Only a few decades before the meeting between Frankfurter and
Rau took place, the U.S. Supreme Court had
used the due process clause in the 14th
amendment to invalidate social welfare legislation. This phase in American constitutional history is often described as the
Lochner era, named after the dreaded case
of Lochner v. New York (1905) in which the
Supreme Court invalidated a New York law
which prohibited confectionary establishments from employing workers for more
than 60 hours per week. The Lochner era is
said to have come to an end around 1937,
starting with the decision of the U.S. Supreme Court in West Coast Hotel v. Parrish
(1937), when President Franklin Delano Roosevelt threatened to pack the Supreme
Court with favourable justices in order to ensure the survival of his ambitious New Deal
legislation.
Rau and Ambedkar
Even though the Lochner era had come to
an end around a decade prior to the meeting
between Frankfurter and Rau, Frankfurter
believed that the words due process of law
imposed an undue burden on the judiciary
and that they should be deleted from the
draft Indian Constitution.
Even prior to his meeting with Frankfurter,

Two recent rulings hark back to a key debate

during the writing of the Indian Constitution
about the incorporation of the American doctrine
of substantive due process
Rau (who was the Constitutional Adviser to
the Constituent Assembly) was having serious misgivings about the due process clause.
His meeting with Frankfurter was the final
nail in the due process coin for the Indian
Constitution. In March 1947, Dr. B.R. Ambedkar, a product of Columbia Law School himself, had drafted a provision for the Indian
Constitution which was very similar, if not
identical, to the due process clause of the
14th amendment. It read: Nor shall any
State deprive any person of life, liberty and
property without due process of law. After
Raus meeting with Frankfurter, Ambedkars
clause was substantially altered. Property

However, beginning in the 1970s, an activist

Supreme Court started incorporating the
U.S. constitutional doctrines of procedural
due process and substantive due process
in India. Though Article 21 formally provides
that a persons life and personal liberty can
be deprived so long as there is merely a procedure established by law (that is, a validly
enacted law), the doctrine of procedural due
process mandates that this procedural law
must be fair, just and reasonable. The doctrine of substantive due process enables a
court to question not merely procedural
laws, but the substantive value choices of the
legislative branch of government as well.

In the early decades, the Supreme Court interpreted Article 21

faithfully to the intent of the framers of the Constitution.
However, beginning in the 1970s, an activist court started
incorporating the U.S. constitutional doctrines of procedural
due process and substantive due process.
was altogether deleted from this clause, to
make way for the extensive land reforms
which were being contemplated in the Constituent Assembly. Liberty was qualified
with the word personal, so as to limit its
meaning. And the words due process of law
were replaced with the words procedure established by law. Thus, Article 21 of the Indian Constitution now reads: No person shall
be deprived of his life or personal liberty except according to procedure established by
law.
In the early decades, the Supreme Court of
India interpreted Article 21 faithfully to the
intent of the framers of Indias Constitution.

In a recent case, Rajbala v. Haryana

(2015), a two-judge bench of the Supreme
Court of India strongly rejected the doctrine
of substantive due process in India. In this
case, the constitutional validity of the Haryana Panchayati Raj (Amendment) Act, 2015
was in question. Under the Act, five categories of persons were considered ineligible to
contest elections for certain oices in panchayats in Haryana (for example, those
against whom criminal charges of a certain
kind were framed, those who had not paid
their electricity dues, those who did not have
specified educational qualifications, those
who did not have a functional toilet in their

CARTOONSCAPE

homes, etc). The Act was challenged on the

ground that it was wholly unreasonable and
arbitrary and therefore violative of Article 14
of the Constitution. Though the Supreme
Court rightly held that a statute cannot be invalidated merely because it is arbitrary, it
also went on to reject the U.S. doctrine of
substantive due process by holding that Indian courts do not examine the wisdom of legislative choices unless the legislation is otherwise violative of some specific provision of
the Constitution, as to undertake such an
examination would amount to virtually importing the doctrine of substantive due
process employed by the American Supreme Court, and under the Indian Constitution the test of due process of law cannot
be applied to statutes enacted by Parliament
or the State Legislatures.
The Rajbala decision is particularly interesting because earlier Benches of the Supreme Court, in cases like Ramlila Maidan
Incident (2012) and Selvi v. State of Karnataka (2010), have repeatedly held that substantive due process and due process generally
are a part of Indian constitutional law under
Article 21 of the Constitution.
Beef in Maharashtra
Thereafter, in Shaikh Zahid Mukhtar v.
State of Maharashtra, decided on May 6,
2016, a Division Bench of the Bombay High
Court was dealing with the constitutional
validity of the Maharashtra Animal Preservation Act, 1976, as amended by the Maharashtra Animal Preservation (Amendment) Act,
1995, which received the assent of the President of India on March 4, 2015 (hereinafter,
the Beef Act). Among other provisions
which were challenged, Section 5-D of the
Beef Act made it a criminal ofence to have in
ones possession, in the state of Maharashtra,
the flesh of a cow, bull or bullock slaughtered
outside the State of Maharashtra. The question was whether this provision violated the
right to privacy under Article 21 of the Constitution. Section 5-D was struck down by the
court. It was held that the right to privacy is a
part of the right to life under Article 21 of the
Constitution, and that the right to eat the
food of ones choice, if the food itself is not injurious to health, is a part of the right to privacy. By declaring that the right to life under
Article 21 of the Constitution includes the
right to privacy, the Bombay High Court was,
in essence, circumventing the intent of the
framers of Indias Constitution (who had deliberately qualified the broad word liberty
with the word personal). Recognising an
unenumerated right like privacy is an example of substantive due process.
Section 9-B of the Beef Act cast the burden
of proof on the accused in some cases. The
court was examining its constitutional validity. This was a procedural due process inquiry, as the provision reversed a well-known
procedural rule of evidence in criminal trials,
that is, the burden of proof is on the prosecution. Section 9-B was also struck down by the
court. It was held that the right of life and
liberty under Article 21 clearly covers the
[substantive] due process aspect envisaged
in the American jurisprudence.
Thus, interestingly, while the Supreme
Court of India in the Rajbala case has strongly rejected the doctrine of substantive due
process, the Bombay High Court has, following earlier Supreme Court pronouncements,
applied and reiterated the doctrine in Indian
constitutional law.
Abhinav Chandrachud is an advocate at the Bombay
High Court.

LETTERS TO THE EDITOR

Uttarakhand floor test
The wider question in the debate
around the floor test in the
Uttarakhand Assembly is about
who won in all this political strife
(Rawat confident after trust vote,
May 11). While the Congress claims
it was a win for the people of
Uttarakhand, the Bharatiya Janata
Party says it won on principles.
Both claims are political gimmicks.
There is no doubt that both parties
are not above board as far as using
money power to win Assembly
votes is concerned. If Harish Rawat
had to bargain to keep his flock with
him, the BJP used unethical means
to efect a split in the Congress.
There was no need for the BJP to do
all this as it was evident that the
Congress was losing its support
base in this State after a series of
wrongdoings.
While
Prime
Minister Narendra Modi has been
promising
cooperative
and
competitive federalism in the
country, the governments actions
in Uttarakhand are the opposite of
this. In this entire sordid episode,
the role played by the judiciary is
the only light in the dark tunnel of
political manipulations.

Letters emailed to letters@thehindu.co.in must carry the full postal address and the full name or the name with initials.

federalism lies in allowing

Opposition-led
governments,
which have also been duly elected
by the people, to rule the States
they are in power in. It is
unfortunate that so much time was
wasted in Parliament over
Uttarakhand and that important
issues like the finance bill, the
drought and water scarcity have
remained undiscussed.
R. Krishnamachary,
Chennai

When the crisis first unfolded in

March, the BJP exhibited an
eagerness to topple the incumbent
Congress government after a
similar exercise in Arunachal
Pradesh was pulled of. From the
word go, one saw the ugly face of
the BJP as it went about the task of
wooing the rebels and weaning
away members from the Congress
and the smaller parties so that the
BJP could inch towards a majority
of its own. The Uttarakhand
episode is a political setback for the
BJP and a clear signal that it should
pursue its goal of ridding the nation
of the Congress through popular
mobilisation
and
not
by
manufacturing palace coups.

Ravindranathan P.V.,
Bengaluru

J. Akshobhya,
Mysuru

The BJP-led government appears to

have shot itself in the foot. There is
no gainsaying the fact that the Modi
government has succeeded in
creating an unenviable impression
that it is in a tearing hurry to
dislodge all Congress-led State
governments in the country. The
imposition of Presidents Rule just
a day prior to the trust vote was
undemocratic, unethical and even
unconstitutional. The BJP should
draw some lessons from this
unpleasant experience and focus
on its oft-trumpeted agenda of
development. Politics of vendetta
hardly pays dividends.

The floor test result was a foregone

conclusion once the nine rebel
Congress MLAs were eliminated
from voting. There is no
justification in hailing it as a
triumph of democracy, for
disqualifying members elected by
the people cannot be a very
democratic thing, although it may
be a necessary evil to curb
defections and instability. It may be
appropriate to say that it is a victory
for the anti-defection law. In the
natural
course
of
political
developments,
the
Rawat
government would have fallen or
an election might have been
recommended sooner than later.

M.K. Bajaj,
Zirakpur, Punjab

The Uttarakhand development is a

bitter pill to the BJP that might is
not always right. The true spirit of

A.N. Lakshmanan,
Chennai

It is clear that the BJP government

at the Centre mishandled and

mismanaged the Uttarakhand issue

with an ulterior motive of not
letting a democratically elected
government function. The result
now is a slap in the face for the BJP.
However, events preceding the
trust vote, in the form of sting
operation videos and horsetrading, go to show that even the
Congress can play dirty. In their
quest to snatch and retain power,
the two largest national parties
have revealed their true faces.
B. Harish,
Mangaluru

A serving Chief Minister suddenly

became a dismissed CM. Then he
became a reinstated CM, thanks to a
short-lived High Court judgment.
Within 24 hours he became a
former CM and is now on his way to
become a rejuvenated CM, as a
result of a time-tested and trusted
trust vote under the watch of the
Supreme Court. I wonder which
Chief Minister in this country has
donned so many avatars in a short
span of time. The director of this
flop show, the Bharatiya Janata
Party, needs some more lessons in
planning and direction as the
heroes of this show, the judiciary
and Mr. Rawat, have won the
national award.
B. Subrahmanyam,
Vizianagaram, Andhra Pradesh

U.K.s stand on Mallya

It is disappointing and sad that
India could not have its way in the
Mallya case (India fails to get
Mallya deported, May 11). By
virtue of staying in a foreign
country, corporate bigwigs seem to
have the last laugh as far as facing
charges of wrongdoing are
concerned. Both Lalit Modi and
Vijay Mallya have shown that they
can remain unfettered from the
legal stranglehold of Indian laws.
N. Visveswaran,
Chennai

It is anybodys guess whether Mr.

Mallyas U.K. residency permit and
valid visa to stay there were wellthought-out plans. With virtually
all legal avenues exhausted, there is

very little scope for India to bring

him back. What is the point in
having an extradition treaty? The
only way out for Indias
nationalised banks to recover their
dues would be to publish summons
in all newspapers in the U.K., take
an ex parte order and sell all his
assets in India. This may also
backfire as recently there were no
takers for some of his properties
that are mired in litigation.

efectiveness of pictorial labels a

study in the Asian Pacific Journal
of Cancer Prevention is one such
example. Tobacco companies are
known to throw a spanner in the
works when their interests are
threatened. While there is scope for
improvement in tobacco control
measures in India, one must
appreciate the steps being taken by
the government and the judiciary in
prioritising health management.

V. Lakshmanan,
Tirupur, Tamil Nadu

Dr. Arun K. Simon,

Coimbatore

UPSC results

Dynamics in West Asia

Women have once again managed

to steal the thunder from the men in
the civil services exams of 2015
(Delhi woman Tina Dabi tops
UPSC exam, May 11). It is
heartening to note that past failures
have not deterred some of the
aspirants who managed to pass
with flying colours this time.

Economically,
socially
and
politically, the threats before Saudi
Arabia have the potential to
diminish its status in the global
order (Alls not well in the
kingdom, May 10). However, even
as India looks toward Iran and
other countries to diversify its oil
imports, it is important not to allow
bilateral relations with Saudi
Arabia to deteriorate. In addition to
playing host to lakhs of expatriate
workers and the consequent
benefits of remittance, Saudi
Arabia also exerts tremendous
influence on the Pakistani elite.
India can leverage its good
relations with the kingdom to try
and influence Pakistans actions
towards us. Indias must conduct its
foreign policy on the principle of
enlightened self-interest.

N.J. Ravi Chander,

Bengaluru

Though Athar Aamir-ul-Shafi

Khan, who came second in the
UPSC exams, has said, where you
come from doesnt matter, it does
actually, especially in his case, for
the people of troubled Jammu and
Kashmir. His success should now
greatly inspire the youth of this
State as most of them appear to be
misled and misguided by various
destructive elements. One hopes
that the Jammu and Kashmir Chief
Minister uses his example to tell
people in her State about choosing
the path to success.
Bal Govind,
Noida

Up in smoke?
One of the focus areas of tobacco
control policies is to convey to
people the risks associated with
smoking, for which labels on the
hazards of tobacco consumption
serve as an excellent method
(Editorial, May 10). Larger
warnings are a step in the right
direction towards helping a person
quit tobacco consumption as
numerous
studies
have
consistently demonstrated the

Rahul L. Nair,
Bengaluru

Bangladeshs future
A society that does not give space
to its intellectuals is forced, sooner
rather than later, to accept
extremism. No great religion,
including Islam, allows brutal
attacks on innocents. It is a shame
that such attacks have become
frequent because Bangladesh has
failed to ensure the most basic of
human freedoms the right to live
(Editorial, May 9). The passivity of
the government to the attacks
reveals its unease with tackling
religious extremism at a political
level.
Meghana A.,
Shell Cove, NSW, Australia
ND-ND