The Delhi High Court Order in P. Chidambaram v. ED: Three Thoughts

This week saw the arrest of a former Union Minister, P. Chidambaram, in connection with allegations of corruption and money laundering in what has popularly been called the "INX Media" case. In this post, I'm not interested in the arrest itself — the pageantry of which has already attracted much discussion — but the initial order of the Delhi High Court on 20.08.2019 which dismissed Mr. Chidambaram's plea for Anticipatory Bail and set the ball rolling [more on anticipatory bail generally, here].

Please read the order when you can, and if you can't read it in full, then make sure to read Paragraph 21 onwards. This section of the order discusses three different sets of arguments / judicial choices that I want to bring into sharper focus through this post.

Custody and Cooperation

The High Court relied upon an old decision of the Supreme Court in CBI v. Anil Sharma [(1997) 7 SCC 187] to re-iterate that custodial interrogation should be granted when an accused, who has prior judicial protection from arrest, refuses to "cooperate" with the investigation and renders it a "mere ritual". This is good as an abstract principle: people should not be allowed to frustrate legal processes. But what about the specifics? 

The verb "cooperate" means to work jointly towards the same end. Taking this to its logical end in the setting of criminal investigations would entail a total negation of the right to silence, which is certainly not what any court could agree to. So, then, it is a question of how much cooperation is enough? In this case, the prosecution argued that the accused appeared for questioning but then gave "evasive" replies, and the Court agreed that this was frustrating the investigation. But it did so without shedding any light on what "evasive" meant, and thus left us in the dark about our spectrum. 

We need to figure out where should an accused person fall in the spectrum of total submission to police, and evading investigation, to satisfy the judicial conscience. Supplying this clarity will not only help future courts make better decisions while dealing with complex problems and give greater certainty to the law. Narrowly tailoring the need for arrest and custody also foster an interpretation of criminal procedure in line with the constitutional commitment to personal liberty.  

Gravity of Offences and Bail 

One of the reasons for rejecting Mr. Chidambaram's bail application was the gravity of offences that are alleged to have been committed by him. Factoring in the gravity of the alleged offence to decide whether or not the accused should be granted bail is today part of the judicial fabric on the law of bail in India, and I do not argue that courts should not consider the gravity of allegations. Rather, the problem is that while this argument might operate well in the realm of abstraction, it does not enjoy smooth sailing when we descend into the particulars [discussed from another angle, here]. 

Let's take an example. If it's a case of alleged murder, then well, it is very difficult to disagree about the basic allegation of someone having died. Some elements of the allegation are, therefore, beyond doubt even at the investigative stage. This logic also works in cases where, say, a public servant is caught taking a bribe red-handed. But this does not work when we infer criminality from neutral facts. To rely upon gravity in those situations is to basically invite the police to create good stories and level serious charges, with a view to ensure that bail is harder to get. 

To make judicial decision-making better, and limit the denial of personal liberty, perhaps courts could interrogate this distinction a bit more and put prosecutors and police officers to stricter scrutiny where the allegations are inferential before relying upon gravity as a ground to deny bail. Maybe this could help prevent cases from ending up in smoke as well, rather than arresting persons and asking them to make statements that will ultimately be inadmissible in court. Just a thought.

Prosecutorial Courts: Economic Offences and the White-Knight Syndrome

The High Court in Paragraph 21 indicates that one reason for dismissing the bail application was that it could not "permit the prosecution in this sensitive case to end up in smoke like it has happened in some other high profile cases." Once the political cheerleading subsides, we should take a long hard look at this claim. Leaving aside everything, it is extremely worrying, and possibly illegal, for a court to subject an individual to arrest and custodial remand because of past prosecutorial failures. Surely we can have better solutions than locking people up to fix lapses in how state agencies investigate and prosecute crimes. 

What is on display here is a trend of the court turning prosecutor, and it is something that has often been on display in the context of economic crimes in the past. The High Court is only following the trends that the Supreme Court has been setting since the 2-G Scam days, when it closely monitored a CBI investigation and found a deprivation of the habeas writ under Article 226 to be constitutional. This "White Knight" syndrome has been discussed on the blog at length, and Paragraph 21 of the High Court with its surface-level anguish about the problem of economic offenders is just the latest variant of that syndrome on display. It will be very interesting to see what the Supreme Court does when it hears the cases in the coming week.

The Asthana Judgment and the Puzzle of Section 17-A, PC Act

A few weeks ago, a Single Judge Bench of the Delhi High Court dismissed the petitions filed by Mr. Rakesh Asthana and others, seeking to quash the criminal investigations initiated against them by registration of a First Information Report [FIR] under provisions of the Indian Penal Code 1860 [IPC] and the Prevention of Corruption Act 1988 [PC Act] [See, Devender Kumar v. CBI, WP (Crl.) 3247 of 2018, decided on 11.01.2019]. The allegations, briefly, were that the concerned officers were extorting the complainant into paying them huge sums of money to close investigations being run by the CBI. It took the complainant almost a year after the first alleged incident of extortion to register a complaint with the CBI, which then lodged an FIR against the concerned CBI officers. 

The Section 17-A Issue

The High Court judgment dismissing the petitions discusses several arguments, but the focal point of attack for the CBI officers was a lack of sanction under the new Section 17-A of the PC Act, that was inserted in 2018. This Blog has discussed Section 17-A in depth earlier, and for convenience the text of the provision is copied below (the judgment copies the incorrect provision, amazingly):

(1) No police officer shall conduct any enquiry or inquiry or investigation into any offence alleged to have been committed by a public servant under this Act, where the alleged offence is relatable to any recommendation made or decision taken by such public servant in discharge of his official functions or duties, without the previous approval [relevant authorities mentioned] 

... 

Provided that no such approval shall be necessary for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept any undue advantage for himself or for any other person: 

Provided further that the concerned authority shall convey its decision under this section within a period of three months, which may, for reasons to be recorded in writing by such authority, be extended by a further period of one month. [Emphasis supplied]

Briefly, the point to be noted is that Section 17-A applies to investigations. This is different from the existing provisions in Indian law that require police to obtain sanction before prosecuting public servants.

The High Court's View on Section 17-A
In dismissing the petitions, the High Court naturally held that there was no need for prior sanction to register the FIR. How did it come this conclusion? The analysis is distilled in Paragraph 36 onwards, and I have shortened them to two broad points:

• One, Section 17-A is only designed to protect bona fide decisions. If the act is "ex-facie criminal or constitutes an offence" prior approval is unnecessary. The alleged acts — extortion and threatening persons — cannot be in "discharge of official functions or duties of the public servant" and so no sanction is needed. 
• Section 17-A is not attracted as this case involves "no recommendation or decision on record by a public servant in the discharge of his official functions" [Emphasis mine].

There is other rhetoric as well, on the lines of speedy investigations being in the best interests of all and that the law does not defer to personalities, but these are the broad legal reasons for the High Court's view. The first point is an old one and sourced from the existing law on sanction to prosecute, where the Supreme Court has restricted sought to eliminate any need for sanction where acts are per se a crime, such as entering into a conspiracy. The second point, though, is new, and an ingenious take on the text of Section 17-A PC Act. While the section mentions nothing about decisions "on record", the Court has introduced that to exclude this case from the need for sanction.

A Critique of the High Court View

The thrust of the Delhi High Court decision is to interpret Section 17-A as a safeguard for the good officer. In the words of the Court, the purpose of sanction "can be read to be only to provide protection to officers who discharge their official functions and / or duties with diligence, fairly, in an unbiased manner and to the best of their ability and judgment, without any motive for their personal advantage or favour." 

This approach has held the judiciary in good stead in cases involving sanction to prosecute officers for several decades, but is not without faults. The most natural one being that this involves placing the cart before the horse: the judiciary ends up judging whether the act was bona fide or not at the outset, whereas that job is for the sanctioning authority. 

This logical problem is greatly accentuated in the case of Section 17-A of the PC Act, which triggers at the stage of investigation itself. After all, this is the first step in the case, and it is impossible for the allegations to be concrete as the FIR is not the outcome of a thorough investigation. Moreover, the language of Section 17-A is very loose — it seeks to not only protect the decision, but also acts that are relatable to it. 

In focusing on a bona fide decision, is the judgment not giving a simple way out of Section 17-A sanction by telling us that complaints should be framed so as to avoid any mention of official decisions? It is impossible to apply the bona fide decision test with any sense of objectivity. If we keep going down this road, what Section 17-A will be reduced to is the judiciary vetting every FIR, in addition to the vetting by the executive branch that the provision originally contemplated.

This then brings me to the second point, of requiring decisions on be "on record" for Section 17-A to apply. As ingenious as the solution may be, the fact is that these words are not there in Section 17-A and thus amount to the court re-writing the statute. This re-writing is usually impermissible unless the law has a gap or a clear and obvious error. Both seem to not apply here, which make this ground a rather weak one.

Conclusion: The Puzzle of Section 17-A 

The Delhi High Court's decision in Devender Kumar offers one of the few judicial engagements of Section 17-A currently available and deserves to be discussed widely. At its heart, the Delhi High Court is driven by the idea that Section 17-A is driven to protect bona fide decisions in the same way as the existing law did. But in extending the protection of sanction from prosecution to investigation, it becomes very difficult for courts to actually figure out when decisions are good or bad. This makes it equally difficult to accept the High Court's view of the purpose behind Section 17-A. Rather, one would argue that the purpose is exactly to confer a blanket protection to public servants, except if they are caught red-handed. This is perhaps why the expedited sanction of three months is provided for as well. This blanket view will also take away the need for courts to review each case to decide if sanction is needed or not. It will be fascinating to see how different courts perceive the issue going forward, and also to see how many courts engage with the other ground of Devender Kumar of only applying Section 17-A to recorded decisions. 

Amendments to the Prevention of Corruption Act: Punishing Bribe Givers

In what might just be the biggest statutory shake-up since the Prevention of Corruption Act, 1988 [PC Act] came on the statute books, the Prevention of Corruption (Amendment) Bill 2018 was passed by the Rajya Sabha on July 19, and the Lok Sabha on July 24. That means it will become law unless the extremely  rare event of a President withholding assent occurs. News reports have posted bulletins, and some are ready with explainers as well, but there is naturally a lot that is left out by the media. In this multiple-part series, I take stock of what is likely to become the new regime for the regulation and prosecution of corruption offences in India. In this post, I take up the new Section 8 that punishes private persons for giving bribes.  

Punishing Bribe Givers: The Text

Many people subscribed to popular news outlets would have seen messages carrying the update about the amendments with punishment of bribe givers being the headline. There is good reason for this excitement: the existing mechanism under the PC Act did not create an offence of "bribe giving", and such conduct could only be indirectly punished. This was done through Section 12 of the PC Act, by alleging the private person aided or abetted the misconduct by the public servant. The only other kind of bribe giving punishable was under Section 8 which targeted the middleman acting as the conduit between the private person seeking the benefit, and the public servant amenable to corruption.

Not anymore. The recent amendments to the PC Act change Section 8, which will look like this:

Section 8: 

(1) Any person who gives or promises to give an undue advantage to another person or persons with intention - 

(i) to induce a public servant to perform improperly a public duty; or 

(ii) to reward such public servant for the improper performance of public duty; 

shall be punishable for a term which may extend to seven years ...

Provided that ... this section shall not apply where a person is compelled to give such undue advantage ... [and] shall report the matter to [law enforcement] within seven days from the date of giving such undue advantage. 

...

(2) Nothing in sub-section (1) shall apply to a person, if that person, after informing a law enforcement authority or investigating agency, gives or promises to give any undue advantage to another person ... to assist [law enforcement] in its investigation against the latter.

Section 8 also has an Explanation that says: (i) it doesn't matter if the bribe is given / promised to the person who is to perform / has performed the corrupt acts, and (ii) it doesn't matter if X gives / promises the bribes directly or through a third party. 

Understanding the Bribe Giving Offence

Let's break Section 8 up to see the conduct it seeks to prohibit, and the mental state it requires to be linked to that conduct for it to be labelled criminal. Section 8 punishes giving / promising to give an "undue advantage" to induce / reward a public servant to "perform improperly a public duty". Putting it crudely, Section 8 covers the giving / promising of bribes as inducement / rewards for corrupt acts by public servants. The giving / promising need not be done directly, as explained by the provision. It must be made to another person, and while this can certainly be the targeted public servant, it can be any other person as well.    

This conduct must be performed intentionally for it to be punished under Section 8. It means nothing short of the clearest case ought to go through, since intention is the highest standard for mental state in criminal law. One imagines the prosecution will need to show (i) a clear offer / promise / giving of a bribe, (ii) a link between X (private person) and Z (corrupt public servant), and (iii) some evidence of the particular corrupt act that X wants from Z / Z has committed. This is what the Illustration to Section 8 also suggests (not reproduced above): it says P (private person) is guilty of the offence where she gives S (public servant) a sum of Rs.10,000 to ensure P is granted a license over all other bidders. Note, though, that the text itself does not require that S must get whatever is given by P to "another person" for getting S to ensure the license is approved.

As important as the offence itself is the Proviso to Section 8(1) that carves out an important exception to protect persons who are "compelled" to give bribes. This is an acknowledgment of existing social realities where public servants exploit their position to demand undue favours for performing their duties. To trigger the benefit of the Proviso, the victim must go and file a report with the concerned authorities within a week. Another important exception to Section 8 is codified in the second Proviso, which protects the long-standing use of "entrapment" (called trap cases in the field) as a technique to nab corrupt public servants. So, persons who conduct a sting operation to assist investigations cannot be prosecuted either.   

Potential Problems
Few would argue that bribe giving should not be punished. But, it is worthwhile to ask ourselves how will the police catch bribe givers? Bribery is a covert transaction: I am not going to tell everyone that I bribed a public servant, which means either (a) the public servant goes to the police, or (b) other aggrieved persons go file complaints. Let's take both scenarios. If the idea is for public servants to report bribes, they also need protection from prosecution. But while there is an exception to protect a cooperating bribe giver, there is no exception for cooperating bribe takers in the new law.

Perhaps the legislature thought - as many others might - that public servants are going to be an unlikely source of information and there is no need for an outright exception. The most likely source of initiating legal action is then the persons who suffer from corruption. Go back to the illustration, when P is awarded a license by S who was bribed. Many other bidders will be aggrieved on losing out, and it could be assumed that someone asks the police to investigate. There is an obvious problem but: in what is labelled a corrupt system, some aggrieved bidders will always smell foul play when they lose out, possibly giving rise to as many false cases as genuine ones. It is then incumbent on police to make sure that false cases are not carried through - not the kind of reassurance one wants in India where police distrust runs high.       

The problems continue when we consider the benevolent protection for oppressed bribe givers. Let's begin with the seven day reporting limit: What if police arrests a person for giving bribes before she files a complaint? Will it mean that no arrests for Section 8(1) offences can happen within seven days to avoid this scenario? Or will it mean, perhaps, that police will now find it easy to compel persons to cooperate in making cases against public servants by turning bribe givers into cooperators? Then there is the reporting itself. While the proviso calls for reporting the incident, it says nothing about what happens thereafter. How will police decide whom to believe in a potential swearing match between two purported victims - the allegedly oppressed bribe giver or the vexatiously prosecuted public servant? Will the alleged victims be required to make a statement on oath before a Magistrate, or file an affidavit?

And, finally, how to interpret "compelled", to identify when a person was compelled to pay bribes? There is no explanation in the proposed amendments, which means we must look elsewhere. The most famous interpretation of compulsion in India came from the Supreme Court in context of Article 20(3) of the Constitution, which says that "no person accused of an offence shall be compelled to be a witness against himself". There, in Kathi Kalu Oghad [1962 SCR (3) 10] a bench of Eleven Justices held compulsion meant physical duress: i.e., you needed objective physical acts to prove that you were forced to testify against your will. I imagine that this will not be the standard applied in context of the PC Act. But how broad a meaning of "compelled" will be appropriate, and what consequences might it have on the earlier interpretation arrived at in the context of Article 20(3) itself?

Conclusion and Next Post
The amended Section 8 of the PC Act creates a new offence that potentially opens a veritable flood of prosecutions in a country seemingly plagued by corruption.  The offence itself has been designed in a way to make prosecutions tougher though, as it requires proof that a person gave / promised an undue advantage intending it to be an inducement / reward for corrupt acts. The offence also carries a much-needed exception to protect against the unfair prosecution of persons who are victims of corruption. All of this will translate into several issues when the law comes into force, some of which I identified and discussed above. The few questions I raised confirm the beliefs that the new Section 8 is bound to be the site of significant litigation in the months and years to come. Another reason for that is the last proviso to Section 8(1), that was not reproduced in this post. This is not in the nature of an exception, but provides that commercial bodies can also be prosecuted for giving bribes, and will be the subject of the next post which will also take us to the amended Section 9.

(this post was updated on July 26, 2018, at 9:20 AM)

The Supreme Court Decision in Asian Resurfacing of Road Agency

Yesterday, a Three-Justices' Bench of the Indian Supreme Court decided a batch of forty-six petitions referred to it, with the lead petition being Asian Resurfacing of Road Agency P. Ltd. v. Central Bureau of Investigation [Crl. Appeal Nos. 1375-76 of 2013, (Asian Resurfacing)]. The decision carries two separate opinions - one by Justice Goel for himself and Justice Sinha, and a concurrence by Justice Nariman. The issues common to these petitions (which date back to 2013), were (i) what is the scope of Section 19(3)(c) of the Prevention of Corruption Act, 1988 [PC Act] (which places some prohibitions on granting of stays in corruption trials), and (ii) whether an order on charge in trials for PC Act offences can be challenged in Revision proceedings before a High Court under Section 397 Cr.P.C. The Court answered these questions as follows: (i) Section 19(3)(c) of the PC Act prohibits granting of stays for any reason, but does not take away the inherent powers of High Courts to grant stays under Section 482 Cr.P.C., and (ii) an order an charge in PC Act cases can be challenged via Revision proceedings before the High Court, as it is not a purely interlocutory order [orders on charge being the judicial stamp on the allegations by the prosecution, where the judge concludes there is enough basis to start taking evidence in the case]. 

Neither opinion answers both issues - Justice Goel mainly addresses the Revision petition problem [Paragraphs 25, 35], and Justice Nariman engages with the issue of stays [Paragraphs 8-11]. If one was to be a purist, these parts of the opinions are what form the ratio, or that part which should be followed in later cases. But such fine lines are hardly ever drawn with Supreme Court decisions, especially so with those by three Justices. And Asian Resurfacing might well prove more important for the large parts of obiter in Justice Goel's opinion, for he created new rules for how stay orders will be granted by courts - "stay orders" here being orders by which the proceedings can be halted by a superior court while it decides a petition brought before it. Now, stay orders shall lapse in all civil or criminal cases upon the expiry of six months unless "in an exceptional case" the presiding judge passes a "speaking order" explaining why continuing the stay was more important than proceeding with the trial [Paragraphs 35-36, Goel J.]. Having explained the effect of the decision, let me now turn to the reasoning adopted for deciding the two questions, before addressing the other remarkable parts in both opinions.

What Was The Problem?

The problem arose because of a decision by a two judges' bench of the Delhi High Court delivered by the current CJI in Anur Kumar Jain [2011) 178 DLT 501 (DB)] (previously discussed here and here). In that case, the Delhi High Court had held that (i) there can be no revision proceeding against orders on charge in PC Act cases, and (ii) while proceedings under Section 482 Cr.P.C. or under Article 226 / 227 of the Constitution were not barred, no order staying the trial could be passed because it was barred by Section 19(3)(c). The practical effect of this was that litigants challenged orders on charge through petitions under Section 482 Cr.P.C. but without getting a stay of proceedings. It should be clear why stay orders were so sought after - if the trial kept proceeding, then any order from the High Court on the point of charge could potentially be useless. Since the High Court could not grant a stay, litigants turned to request the trial court to defer recording of evidence until the High Court decided the petition. Now, High Courts have clogged dockets, and without extremely reputed counsel one is unlikely to get a petition disposed fast enough, and even then most petitions would eventually prove futile. This legal position made it unfairly prohibitive for litigants (both with means and without) to challenge orders on charge despite having good bases to do so.

The legal basis of the Delhi High Court's opinion was tenuous on both issues. It had decided that the order on charge in PC Act cases was an "interlocutory" order, and so could not be challenged through a Revision petition because of the specific bar against this under Section 397(2) Cr.P.C. But it had come to this conclusion by attempting to distinguish earlier Supreme Court precedent in Madhu Limaye [(1977) 4 SCC 551], by suggesting it had been modified by another Supreme Court decision in V.C. Shukla [1980 (Supp) SCC 92] (discussed previously here). With respect to the ban on stay orders, the High Court relied on the Supreme Court decision in Satya Narayan Sharma [(2001) 8 SCC 607] which had held that Section 19(3)(c) of the PC Act completely prohibits granting any stay orders by any court, including by the High Court under Section 482 Cr.P.C. The Supreme Court had arrived at this conclusion in Satya Narayan Sharma without discussing the nature of inherent powers under Section 482, and how several decisions including Madhu Limaye had interpreted the scope of these powers being untrammelled as they were intended to do justice and prevent abuse of process.

How did the Supreme Court Decide the Issues?

The Court held that the Delhi High Court in Anur Kumar Jain was wrong on both counts, while it did correctly hold that exclusion of Revision petitions did not control the scope of a High Court's inherent powers or constitutional jurisdiction. The issue on the nature of orders on charge was straightforward enough - the Court approved the legal position in Madhu Limaye, which had held that "interlocutory" for purposes of Section 397(2) Cr.P.C. was not to be seen as referring to everything except the final judgment. In doing so, it relegated the decision in V.C. Shukla to historical insignificance by holding that that the decision was purely limited to the special statute it was concerned with, and did not affect the position of law. So, the position of law governing PC Act cases remained what the Court had held in Madhu Limaye, and by that standard, orders on charge were not "interlocutory" and remained open to challenge through Revision petitions under Section 397 Cr.P.C. [Paragraphs 24-25, Goel J.].

The legal aspects of the issue regarding granting stay orders in PC Act cases was addressed by Justice Nariman. He reasoned, first, that while Section 19(3)(c) of the PC Act did go beyond merely sanction issues [contrary to what the Petitioners argued (Paragraphs 7-8, Nariman J.)], it did not cast an absolute ban on granting stay orders. Rather, he read this together with Section 19(3)(b), and said that the power to grant stay orders to prevent failures of justice did exist [Paragraph 8, Nariman, J.]. The second part of his reasoning extended this power to High Courts. For this, he reasoned that inherent powers of a High Court were not granted by the Criminal Procedure Code but arose because of the High Court being a Court of Record with powers to punish for its contempt, and the origins of inherent power were thus properly traced to the Constitution itself. Section 19 of the PC Act, by overriding application of anything in the Criminal Procedure Code, therefore could not affect exercise of the constitutional authority by High Courts - under Section 482 Cr.P.C. as well as Articles 226 / 227 of the Constitution [Paragraphs 9-11, Nariman, J.]. High Courts had full powers to grant stay orders even in PC Act cases, and this conclusion meant that the Court's earlier decision in Satya Narayan Sharma was no longer good law.

Everything Else - Rules on Stay Orders and the Ghost of Suneja

Both opinions are curious things - Justice Goel says nothing about the legal issue on stays, and yet his opinion will shake up how courts across the country regulate stay orders in all sorts of cases. And then there is the ghost of Girish Kumar Suneja v. CBI [(2017) 14 SCC 809 (Suneja)] - another decision by three Justices where the Supreme Court considered the same issues. Let's take up both in order.

Limits on Stay Orders 

In recent years, several government bodies have cast a beady eye on stay orders and the delays they cause in the legal system (see here and here). The Court itself has been quite vocal about stay orders being granted too loosely and matters dragging on endlessly. In Asian Resurfacing itself, the Court notes how the FIR was registered in 2001 - seventeen years ago - and the case is still at the stage of charge (although no explicit mention of stay orders is made). Thus, a move which tightens this process can arguably be considered as a positive move for the Indian legal system. To this extent, I agree, but I maintain a cautious optimism over what this case could achieve. We must remember that this is happening in appeals where two specific legal issues regarding the PC Act were referred to a larger bench of the Supreme Court, and none of them was about delays through stay orders in the entire legal system. Thus, it remains fully possible for a subsequent bench of the Court to go ahead and remind us that these observations could not be binding. The chances of this are not remote, considering how a large part of litigation in India involves lawyers strategically using stay orders. On a related note, it should also concern us that the Court was ready to come at these sweeping conclusions without citing any recent data on the problem - it cited portions of a 2012 decision in Imtiaz Ahmed [(2012) 2 SCC 688] which had nothing to do with civil litigation either. Do we know how many cases will be affected by this ruling? Was there a better way than to issue a diktat sitting from New Delhi, that will now rumble on slowly through the vast legal system across India and cause havoc in several cases? Perhaps there was, but now, unless something changes one can expect a fair bit of turmoil as all courts across the country determine the impact of what the Supreme Court said in Asian Resurfacing.

Girish Kumar Suneja

Which brings me to Suneja - a decision that had been the subject of some criticism on this blog (see here, and here) [Full disclosure: I was involved in the litigation in a connected petition for petitioners who had challenged the impugned order, and thus lost in the Supreme Court]. Suneja also addressed both of these issues (unnecessarily, as I argued previously), and had come at diametrically opposite conclusions: the Court had held that (i) Revision proceedings against PC Act orders on charge are barred, (ii) that this prohibition also barred challenging such orders under Section 482 Cr.P.C. as this indirectly lifted the ban on Revision proceedings, and finally (iii) that Section 19(3)(c) of the PC Act completely barred stay orders from being granted. Now, since Suneja was also decided by three Justices, the Supreme Court could not overrule it in Asian Resurfacing. So we find both opinions trying to arrive at a compromise - holding that the conclusions in Suneja were incorrect without actually saying that the decision was wrong. And it makes for a sad spectacle. Justice Goel's opinion admits that "seemingly conflicting observations" were made in Suneja, but it did not displace Madhu Limaye, which remained good law through all these years [Paragraph 25, Goel J.], and strangely enough, goes ahead and favourably cites Suneja to begin his lament against delays [Paragraph 26, Goel, J.]. 

Justice Nariman tries to salvage Suneja by indirectly admitting that some parts of that decision were incorrect and conflicted with other parts which contain "an exposition of the law correctly setting out what has been held earlier in Madhu Limaye". But judgments must be read as a whole, and thus he asks that these parts be read "harmoniously" to arrive at the correct conclusion, i.e. the one that he has arrived at [Paragraph 17, Nariman, J.]. I am yet to fully wrap my head around how this happens: the parts of Suneja that are admittedly incorrect are in fact the holding of the case on two PC Act issues that we have flagged here [Paragraphs 25, 29 and 32 of Suneja]. The lone paragraph in Suneja that Justice Nariman says is "correctly setting out" the law [Paragraph 38 of Suneja], comes when the Court is deciding whether or not litigants could challenge orders on charge through Article 226 / 227 of the Constitution, after the Court has already decided that litigants cannot challenge these orders under the Cr.P.C. And even if one agrees that Paragraph 38 of Suneja should control, I struggle to understand how it controls on the issue of granting stays, which it says nothing about. 

Conclusions

Asian Resurfacing has already made headlines for its limits on stay orders. Those observations are of undoubted significance, but for reasons that I already expressed above, I remain wary of hailing it as a game-changer just yet. The decision is also striking for providing an insight into a peculiar problem that the Supreme Court has often faced - genuine disagreement between two sets of benches on what the law should be. The institutional dynamics of the Court have not always been conducive to neat solutions in these scenarios, and something similar has happened between Asian Resurfacing and the 2017 decision in Suneja. The Supreme Court in Asian Resurfacing has tried to remove the ground on which Suneja stood without finding it incorrect, but the reconciliation is far from satisfactory. Despite how both opinions refused to call it so, the conclusions in Asian Resurfacing are certainly in conflict with what was held by the three Justices in Suneja, which makes the conclusions arrived at in Asian Resurfacing of questionable legal force. This means that, technically, one can argue that the decision in Asian Resurfacing is little more than a bright facade with a hollow core and should not be followed by courts. Only time will tell how the decision is received.   

Bail Provisions of Section 45 PMLA Struck Down - Some Hits and Misses

Two days ago, a Two Judges' Bench of the Indian Supreme Court decided a batch of writ petitions led by Writ Petition (Crl) No. 67 of 2017 titled Nikesh Tarachand Shah v. Union of India & Anr. [Nikesh Shah] in which it struck down the parts of Section 45 of the Prevention of Money Laundering Act 2002 [PMLA] which concerned the grant of bail. The Court held that these parts violated Articles 14 and 21 of the Constitution - guaranteeing a right to equality, and protection against deprivation of the right to life and personal liberty by a procedure not established by law. The effect of this judgment is that bail petitions earlier subject to a stringent standard under Section 45 PMLA will now be tested on the less taxing standards of Sections 439 and 437 of the Criminal Procedure Code 1973 [Cr.P.C.]. This post has four parts - (i) explaining how money laundering and the PMLA work (which I'd urge you to skim through even if you're a lawyer, because at times the judgment reflects some lack of knowledge on the Court's part), (ii) charting out how the Court did what it did, (iii) showing where the Court goes wrong, and finally (iv) what this judgment might mean for the many other statutes with similar clauses that have not been examined by the Court yet. 

What is the PMLA, What are the Schedules, and What does Section 45 do?

The PMLA is India's answer to its global commitment to tackle money laundering, which (at the cost of oversimplification) means representing assets obtained through illegal acts as untainted. In line with global standards, the PMLA covers all kinds of conduct connected with this process of representing black as white (doing, aiding, abetting, attempting etc), as long as one knowingly did so [Sections 3 and 4]. The PMLA not only makes this is an offence but also triggers connected civil actions of attaching and confiscating the tainted assets themselves [Sections 5-8]. 

Notice how the entire idea of money laundering is linked to some underlying illegal act which results in generating some proceeds - cash or kind. While some countries don't require that illegal act to be a crime, India does, and the PMLA calls it a 'Scheduled Offence' [Section 2(y)] i.e. offences that are part of the Schedules to the PMLA. There are three Schedules - A, B, and C - and Schedule A contains the bulk of offences and Schedule C is basically the same thing applied in a transnational context. Schedule B contains only one offence - Section 132 of the Customs Act 1962 which criminalises making false declarations before customs officers. Importantly, when the underlying offence is one from Schedule B, the PMLA will only apply if the allegations involve a value of at least one crore rupees. There is no such minimum monetary limit for cases with Schedule A offences. It wasn't always like this, and the history behind these Schedules became quite important in Nikesh Shah which requires me to discuss it here.

When the PMLA came into force in 2005, Schedule A only had two paragraphs carrying offences punishable under the Indian Penal Code 1860 [IPC] for waging war against India and nine offences from the Narcotics, Drugs and Psychotropic Substances Act 1985 [NDPS Act]. Schedule B contained the bulk of offences, along with a lower minimum threshold of thirty lakhs for the value of allegations. Then around 2010 India wanted to join the Financial Action Task Force [FATF] as a member. The FATF is a global body created by the G-8 for money laundering and membership is a big deal [India is the only South Asian member state till today]. When the FATF conducted its evaluation of Indian money laundering laws, it heavily criticised the monetary limit for the cases in Schedule B [paragraph 167 of the linked report]. The logic was that the limit would allow money laundering to escape under the radar as people would just deal in smaller tranches over a slightly elongated period of time. So the FATF recommended the limit be abolished [paragraph 175]. The government sought to do this by simply moving all Schedule B offences to Schedule A, which was done through the 2013 Amendment, leaving Schedule B empty for the time being.

In all this moving around offences, nobody thought fit to look at what impact it would have on the rest of the PMLA - specifically, on Section 45 which spoke about bail. Since the money laundering offence was tied to the Scheduled Offence, Section 45(1) looked at that underlying offence and this decided how difficult it would be to get bail. If it was a Schedule A offence with a sentence of more than three years, the law placed two additional conditions for getting bail: (i) the public prosecutor had to be given a chance to oppose bail, and if the prosecutor chose to oppose bail, then (ii) the court had to satisfy itself that the defendant was "not guilty of such offence" and was not likely to commit any offence on bail, and the burden fell on the defendant to satisfy the court. For all other Schedule A offences, and all Schedule B offences, the regular bail clauses from the Cr.P.C. continued to apply. You can see how the 2013 amendments to the Schedules completely changed the look of Section 45 - the exceptional process became the norm. This new normal was under challenge before the Supreme Court in Nikesh Shah.

SC on Section 45 - Violates Articles 14 and 21
Petitioners argued that the constitutional protections of Articles 14 and 21 were violated by Section 45 PMLA, and the Court agreed to both contentions. Rather than address arguments first and then move to the Court's appreciation, I discuss both together for brevity.

Article 14
The Petitioners argued that linking the stringent bail clauses to offences in Schedule A that carried at least a three year maximum sentence was creating several irrational and arbitrary classifications which the Court encapsulated through examples [Paragraphs 24-27, and 35]. The Court found no basis to differentiate the harsh treatment meted out under Section 45 from the following hypothetical cases which according to the Court did not attract Section 45:

• When there is only the PMLA charge as the trial for the Scheduled offence was complete;
• When the PMLA allegation is based on a Schedule B offence;
• When the PMLA allegation is based on a Schedule A offence carrying a maximum sentence below three years;
• When a person is tried for a Part A offence with at least a three year term (versus a joint trial where the same person is tried together with the person with PMLA charges);
• When the person is released on Anticipatory Bail under Section 438 Cr.P.C. for allegations of the Scheduled Offence, before the PMLA charge was brought in. 

The Court was of the view that the seriousness of money laundering cases depended on the amount of money involved [Paragraphs 29-30]. Since Schedule A had no monetary limits, the Court concluded that the likelihood of being granted bail was being significantly affected under Section 45 by factors that had nothing to do with allegations of money laundering [Paragraphs 26-27]. When the Attorney General attempted to defend the scheme by painting the classification as a punishment-based one, the Court easily rebuffed his argument. First, the Court suggested there was no such scheme, but noted that even then, the idea should have something to do with the object of the PMLA. The Court showed how Schedule A had many offences that didn't seem related to money laundering [taking particular objection in Paragraph 34 to offences under the National Biodiversity Act being there], leaving out others that might have more rational connections to money laundering such as counterfeiting currency [Paragraphs 29-30]. The Court also adversely commented on how Schedule A had lumped different NDPS offences together, at the cost of ignoring how the parent Act treated those offences differently [Paragraph 32-33].

The Court noted also that Section 45 of the PMLA was different from other laws that carried similar requirements such as Section 20(8) of the Terrorism and Disruptive Activities (Prevention) Act 1987 [TADA]. The 'such offence' in TADA required a court to be satisfied that the defendant was not guilty of the TADA offence in question before granting bail. But in the PMLA, 'such' offence referred to the Scheduled Offence instead of the PMLA offence. So, the restrictions imposed by Section 45 PMLA were held to have no connection to the objects of the PMLA itself and thus the rational classification, if any, violated Article 14 [Paragraph 28].

Article 21
The Petitioners argued that requiring defendants to satisfy the court that they were not guilty of 'such' offence violated Article 21 by reversing the presumption of innocence and required the defendant to disclose her defence at the outset of the case. In the judgment the Court doesn't really address Article 21 independently - instead the Court suggest that because the provision violates Article 14 it cannot be 'procedure established by law' and therefore violated Article 21. Towards the end of the decision the Court begins discussing the argument though. It labels Section 45 a "drastic provision which turns on its head the presumption of innocence which is fundamental to a person accused of any offence." [Paragraph 38]. In the same paragraph it goes on to observe that "before application of a section which makes drastic inroads into the fundamental right of personal liberty guaranteed by Article 21 of the Constitution of India, we must be doubly sure that such provision furthers a compelling state interest for tackling serious crime. Absent any such compelling state interest, the indiscriminate application of section 45 will certainly violate Article 21 of the Constitution. Provisions akin to section 45 have only been upheld on the ground that there is a compelling state interest in tackling crimes of an extremely heinous nature."  

Hits and Misses
There are two questions that were at stake here: (i) did any part of Section 45 offend the Constitution, and if so, (ii) did the Court have no other option but to strike down the provision. Reading the decision, it seems like the Court felt there was so much wrong in the PMLA scheme it decided to throw the kitchen sink at one point rather than explain the issues. The Court answered both affirmatively but never explained to us whether any argument dispositive, or does every case need this sort of broad argumentation to succeed.

Classification and Article 14 first. After reading the legislative history behind the 2013 amendments and the FATF argument, do you think that the Court is right in concluding that higher the monetary allegations, more serious the PMLA case? I'm not so sure. Nor do I think there is much to be gained by placing emphasis (like the Court does) on how Schedule B today has a higher limit than the initial thirty lakhs to suggest that this is in fact the case. It is far more plausible that the one crore limit was placed keeping in mind the underlying offence (false declarations to customs officials in an enquiry) and the concerns of the export industry, which is already subject to Schedule A through Section 135 of the Customs Act 1962 (evading customs duty). Rather than attempt at answering what might be the basis for such a classification for the PMLA (and indirectly giving hints to the government on what might pass muster), the Court would have done well by restricting itself to answering whether the present classification between (i) PMLA allegations based on a type of Schedule A offences versus (ii) all other PMLA cases was intelligible and connected to the objects of the PMLA. As there was enough to show that the original intent (if any) behind Section 45 had not kept apace with the subsequent amendments to the Schedules in 2013, the Court could strike down this classification. But did that require striking down the whole clause?

This brings us to the other part of what did that classification achieve. If it sought to serve as a filter for PMLA cases when it came to administering a strict bail clause, we are left with no filter. Does that mean no PMLA case is serious enough to warrant an application of the clause, or will the clause apply to every PMLA case? Deciding this would need the Court to decide whether clauses such as Section 45 that required a court to find defendants 'not guilty' at the bail stage were constitutional. Rather than directly address this, the Court turned to how the text of Section 45 was flawed, as it referred back to the Scheduled Offence on deciding bail petitions. Since the scheduled classification had been struck down, there was nothing to refer to, and so the clause had to go. While there is little to fault this approach, I remain unconvinced that the Court had no option but to strike down the clause because of the text. The Court has performed far greater feats of legislative reconstruction than being asked to read 'such offence' in Section 45 PMLA as referring to the PMLA allegations rather than only the Scheduled Offence. After all, it stands to reason that a bail provision in the PMLA would want a PMLA special court to consider the PMLA allegations. In fact, many High Court decisions show this is how they were doing it. Heck, this is how the Court itself was doing it in Rohit Tandon at the start of November [Paragraphs 21-23 of the link]. I think this course was adopted as it helped secure two objectives. Not only did this take care of the PMLA clause which this bench of the Court clearly did not like much, it also helped to protect other statutes with similar clauses which the Court held met a 'compelling state interest' test.

This brings me to one last bit about Article 21 and the Eighth Amendment of the U.S. Constitution. The Court cites a previous decision in Rajesh Kumar v. State (NCT) of Delhi [(2011) 13 SCC 706] for the proposition that Article 21 of the Indian Constitution has incorporated the Eighth Amendment and its protection against excessive bail [Paragraphs 13, 19 of Nikesh Shah]. The Court also cites two American decisions [Paragraph 37] on bail for good measure. This is, unfortunately, wrong. Rajesh Kumar cited previous precedent in Sunil Batra to suggest that even though India did not have the Eighth Amendment or the 'Due Process' clause, the consequences were the same to prevent cruel and unusual punishment. Not only did both those decisions not mention the excessive bail clause, the references to the cruel and unusual punishment clause itself are highly contentious as an earlier bench of the Supreme Court had held it couldn't be pressed in India, and that decision continues to be cited. 

Conclusion
The slapdash manner in which the PMLA Schedules were amended in 2013 to appease the FATF had already caused some High Courts to address this issue of Section 45. The closest it came to striking down the clause was the Punjab & Haryana High Court's decision in Gorav Kathuria v. Union of India & Anr. where it held the bail provisions would not apply retrospectively to offences previously in Schedule B [Paragraphs 43-45 of Nikesh Shah]. When the Court declined to hear an appeal against the High Court order in Kathuria I thought that it had indirectly affirmed the validity of Section 45. The judgment in Nikesh Shah comes as a surprise, and marks the first occasion when the Court has looked at any part of the PMLA through a constitutional lens. There are other parts that are equally problematic - the asset forfeiture scheme and the compulsion on witnesses to make truthful declarations, for instance - that litigants may take to the Court being encouraged by this judgment.

As for the future impact of Nikesh Shah on other statutes that carry the same 'drastic provision', the stage is set for some litigation on that front as well. The Supreme Court has only approved of the TADA and the MCOCA provisions in the past, leaving the many others open to scrutiny on this new test of whether the provision furthers a 'compelling state interest'. The Court never answered that for the PMLA context while deciding the petitions in Nikesh Shah. Do you think it might conclude that the PMLA does not meet the test? What about the other statutes? I've re-pasted my list of statutes containing the clauses below after accounting for the ones that are not relevant anymore. Comments, as always, are welcome.

1. Section 437(1), Cr.P.C. (in cases of death and life imprisonment).
2. Section 12AA (inserted in 1981), of the Essential Commodities Act, 1955.
3. States of Punjab and Tripura inserted this provision as Section 439-A to the Cr.P.C. so applicable within their territory, in 1983 and 1993 respectively. This restricted bail to persons accused of certain offences, inter alia Section 121, 124-A IPC.
4. Section 37 (amended in 1989) of the Narcotic Drugs and Psychotropic Substances Act 1985 [NDPS].
5. Section 7A (inserted in 1994) of the Anti-Hijacking Act, 1982. 
6. Section 6A (inserted in 1994) of the Suppression of Unlawful Acts against Safety of Civil Aviation Act 1982. 
7. Section 8 of the Suppression of Unlawful Acts against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf Act 2002.
8. Section 51A (inserted in 2002) of the Wildlife Protection Act, 1972.
9. Section 43D (inserted in 2008) of the Unlawful Activities Prevention Act, 1967 [UAPA] (nearly identical).
10. Section 36AC (inserted in 2008) of the Drugs and Cosmetics Act, 1940.

Prosecuting Public Officials for their Mistakes

(This post first appeared on the Global Anticorruption Blog and has been cross-posted with permission)

In July 2011, Yingluck Shinawatra became Prime Minister of Thailand after her party (founded by her brother, former Prime Minister Thaksin Shinawatra) won a decisive electoral victory. One of her principal campaign promises was to establish a program to purchase rice from farmers at above-market prices then store the rice to reduce supply. The hope was that doing so would increase world prices—because of Thailand’s position as the leading global rice exporter—ultimately allowing the government to sell at a profit. Shortly after the election, Yingluck’s government implemented this program, and it worked well for a few months—until other global players increased their supply of rice, causing Thailand to lose billions of dollars in the process. This economic debacle was entirely predictable—and indeed was predicted by many experts. And the program itself was beset by allegations of fraud and corruption in its implementation.

But should the failure of the rice-buying program be the basis of a criminal charge of corruption and a prison sentence against Yingluck herself, in the absence of evidence that she was directly involved in any embezzlement, bribery, or other more conventional forms of graft? Section 157 of Thailand’s Penal Code allows for just such a prosecution, as this section makes it a crime for a public official to either dishonestly or “wrongfully discharge or omit to discharge a duty so as to expose any person to injury.” And last month, the Thai Supreme Court found Yingluck (out of power since she was deposed by a military coup in 2014) guilty and sentenced her to five years in prison. She fled the country before the verdict.

Thailand is not alone in adopting anticorruption laws that criminalize not only dishonest conduct (bribery, embezzlement, conflict of interest, etc.), but also negligence or incompetence. When India updated its anticorruption law in 1988, it added a new provision that makes it a criminal offense for a public official to “obtain for any person any valuable thing or pecuniary advantage without any public interest.” This broad offense was interpreted by a state High Court to not require any proof of dishonesty or criminal intent, and the Central Bureau of Investigation (India’s premier anticorruption agency) has routinely employed the provision in grand corruption cases to avoid the problem of having to prove corrupt intent. In perhaps the most high-profile such prosecution, the agency went after an ex-Prime Minister, Dr. Manmohan Singh. Dr. Singh was the Minister of Coal at a time when the Government decided to liberalize allocation of coal-blocks and to sell mining rights to private parties. In 2014, the Comptroller and Auditor General’s office reported the policy had caused losses worth billions of dollars because the rights had been sold for too little, through a process that was too ad hoc to be considered legal. Dr. Singh was subsequently charged under India’s broad law, though his trial has currently been stayed while his challenge to the constitutionality the law is pending before India’s Supreme Court. (There are clearly concerns in other quarters about the breadth of this statute: In 2016 a Select Committee of the Upper House of India’s Parliament submitted a report that suggested India eliminate this offense. Parliament hasn’t yet acted on this recommendation, but there are signs that it has some support.)

Is it appropriate to enact broad anticorruption laws that allow government officials to be convicted for dereliction of duty, acting in a manner contrary to the public interest, and the like? Anticorruption activists and prosecutors may find such statutes appealing: It is easier to secure convictions of elected officials who are suspected of corruption, but where it is too difficult to prove the specific intent necessary for traditional corruption offenses. But in fact these broad laws are likely to do more harm than good, and countries like Thailand and India would be better off without them. There are three main reasons for this:

• First, criminal prosecutions carry immense expressive value and signal to society that certain acts ought to be condemned. The message sent to society, when a court convicts a senior official for a policy failure absent any showing of dishonesty, is not likely to be that the government will not tolerate corruption, but rather that prosecutors and judges have broad power to jail leaders that they don’t like. This is only worsened by the inherently subjective nature of the crime in question. These prosecutions also blur the lines between genuinely dishonest conduct and policy mistakes, undermining the special condemnation that ought to be reserved for the former. On balance, even if prosecutions for dereliction of duty might enable prosecutors to convict leaders suspected of actual but unprovable graft, in the long term such prosecutions will only worsen the respect for rule of law in societies troubled by corruption in governance.
• Second, and connected to the first point, such broad offenses raise the very real risk of politically motivated prosecutions. In countries where voters are angry about corruption, politicians often stress increased anticorruption prosecutions to show their commitment to reform. What better way to show such commitment then by attacking the alleged corruption of the previous regime? And this is much easier to do when the prosecutors (influenced by the new government) need not actually prove dishonesty, but need only find some alleged failure to fulfill a duty, or some act not in the “public interest.” Not only are partisan witch-hunts contrary to the rule of law, they also don’t always make for sound cases, and can ultimately dilute both the strength of using the courts as an anticorruption force and the faith of the public in the integrity of the institutions of justice.
• Third, broad anticorruption laws that effectively criminalize negligence are likely to have an undesirable chilling effect on decision-making by public officials. When elected officials take bold moves they already run a risk of alienating their electorate and losing a re-election. Add to that the specter of eventual criminal liability once they’re out of office, and it officials are likely to become too timid to try anything even slightly bold or controversial. This fear of risk trickles down to any official tasked with implementing government policy.

To be sure, elected officials owe a duty to the citizenry to act in the public interest. If they fail to do so, and the failure can be proven to be due to dishonesty or greed, then more narrowly-drawn laws against bribery, embezzlement, and conflict of interest would apply. For serious errors that are made in good faith – or even in those cases where there’s suspicion of wrongdoing but it can’t be proved – there’s an alternative remedy already in place: elections. The political process is of course imperfect. Many Thais were likely frustrated that Yingluck didn’t seem to pay a serious political cost for the failure of the rice-buying scheme, and may have been relieved both by the coup that removed her from power and by her eventual conviction for dereliction of duty. But in the long term, the democratic process offers a better safeguard than allowing for politicians to be sent to jail for mistakes.

Exclusion of Jurisdiction and the decision in Girish Kumar Suneja

On 13 July 2017, a three-judges bench of the Supreme Court dismissed the petitions clubbed together with Girish Kumar Suneja v. CBI [SLP (Crl.) 9503 of 2016, hereafter Suneja]. The preliminary issue raised in these petitions was a challenge to the Supreme Court's order dated 25.07.2014, whereby aggrieved persons were confined to only approaching the Supreme Court with a "prayer for stay or impeding the progress in the investigation / trial", and jurisdiction of High Courts was thus excluded. This Blog, on an earlier occasion, had considered the Petitioners' case and argued that the impugned order of 25.07.2014 was bad, and readers may refer to that post for a recap. Here, I argue that the decision in Suneja does not offer any convincing justification for why the Court disagreed.

Excluding Jurisdiction: Missing the Forest for the Trees

In Suneja, the Court takes up three key arguments assailing the exclusion of jurisdiction caused by the order of 25.07.2014 and its effects - (1) Curtailment of the High Court's power to entertain petitions under Sections 397 and 482 Cr.P.C; (2) Exclusion of writ jurisdiction under Articles 226 and 227 of the Constitution; and (3) A violation of Article 14 caused by treating the 'coal-block allocation scam' cases under this special procedure. On all three counts, it disagreed with the Petitioners' claims. On closer examination, one can see how the Court does so not by engaging with the argument, but by avoiding it altogether.

Sections 397 and 482 Cr.P.C.

On the first issue of curtailing statutory powers of entertaining revision petitions [Section 397 Cr.P.C.] and quashing petitions [Section 482 Cr.P.C.], the Court reminds us that these are not rights, such as appeals, but entitlements. A High Court may refuse to entertain these petitions. This characterisation was never in doubt - the issue, was whether it was unconstitutional to deprive the High Court of even this ability to entertain such petitions. For this, the Court turns to the legislative history of Section 397(2) Cr.P.C. [which prevents revision petitions for challenging interlocutory orders] to elaborate that the scope of revision jurisdiction was restricted to prevent delay. But the Court does not conclude that the present petitions fall within this category, which renders these observations obiter. Perhaps proceeding with that assumption, the Court moves on to consider the scope of inherent jurisdiction under Section 482 Cr.P.C. Again, it talks of a 'rarest of rare' level for quashing petitions being entertained, implying that the issue must be very serious to warrant intervention. Still, no answers are offered to explain what warrants an exclusion of this jurisdiction altogether. One may then assume that the Court implies the exclusion was illegal, which is why it considers the tests for considering whether the present cases could have triggered an exercise of jurisdiction under these provisions. 

In doing so, the Court makes notable errors in law. For instance, in considering the interplay between revision and quashing the Court notes that "it is quite clear that the prohibition in Section 397 Cr.P.C. [of not proceeding against interlocutory orders] will govern Section 482 Cr.P.C. We endorse this view." This means that for Court, Section 397 applies to all final and intermediate orders, while Section 482 applies to interlocutory orders. Such a reading ignores the notwithstanding that comes at the start of Section 482, which has led the Supreme Court to conclude on several occasions that the scope of Section 482 remains untrammelled by the terms of Section 397 - most recently clarified by another bench of three judges in Prabhu Chawla [Crl. Appeal No. 844 of 2016, decided on 05.09.2016]. Remember, all this is irrelevant, because the present cases actually involved a question of why recourse to this jurisdiction could be barred. The Court only engages with that issue in its terse refusal to consider the decision in Antulay [(1988) 2 SCC 602]. Antulay was a decision by seven judges, but it is distinguished because the facts were different and it involved a trial before the High Court itself, and the impugned provision therein - Section 9 of the Criminal Law Amendment Act 1952 - in turn used the 1898 Cr.P.C. The facts, though different, led the seven judges in Antulay to consider why any court's jurisdiction could not be ousted, which would nonetheless be relevant here. That the bench in Suneja even raises the second point about the Cr.P.C. is simply shocking, since the allegations in Antulay concerned a period after 1973 and by which time the 1952 Act was being read with the new Cr.P.C. [as required by Section 8 of the General Clauses Act 1897].  

We are then left without any answers for the actual issue. For some reason the Court continues to miss the forest for the trees, and refuses to tell us why recourse to revision and quashing was made impermissible in the present batch of cases. It painfully continues to develop on the obiter by considering whether the batch of petitions met the standard of seriousness for interference under Section 482 Cr.P.C., and concludes that "challenge to orders of this non-substantive nature that can be agitated in a regular appeal is nothing but an abuse of the process of the Court." The observation is entirely misplaced. The Petitioners raised issues of law, arguing that certain findings suffer from impropriety - express grounds for interference under Section 397. But if recourse to that provision is barred, then what? Should recourse to Section 482 still remain impermissible? The Court ignores the peculiarity in the present set of facts, which have come about by its own hand. 

Article 226 and 227 of the Constitution

The conclusions on Article 226 and 227 also proceed on an assumption that the issues raised in the batch of petitions are 'trifling' and therefore would not warrant interference under writ jurisdiction. With due apologies for sounding repetitive, the bench again fails to explain how this jurisdiction can be ousted entirely. In fact, here, the bench expressly says "there can be no doubt that the jurisdiction of a High Court under Articles 226 and 227 cannot be curtailed, yet extraordinary situations may arise where it may be advisable for a High Court to decline to interfere." This volte-face is completed at the end of this part of the decision, where the bench says that "there is nothing extraordinary if the High Court ought not to interfere and leave it to this Court to take a decision in the matter in larger public interest". But this is not what has happened in the present case! In unequivocal terms, the High Court was barred from entertaining petitions. The Supreme Court is now attempting to portray the scenario as a willing refusal by High Court's to entertain cases, when it is actually an exclusion of jurisdiction by the Supreme Court itself. It is fair to say that nobody is fooled. 

Article 14 and Judicial Legislation

The argument under Article 14 in Suneja was twofold - the 'coal block' cases do not constitute an identifiable class, and even if they do this differentiation must be created through statute. The Court, expectedly, whips up the rhetoric to justify why the cases are an identifiable class in themselves. But the decision does not engage at all with the more pressing issue of how such classes can be created. It says that "the order passed by this Court does not amount to legislation in the classical mould but according special treatment to a class of cases for good and clear reason and in larger public interest as well as in the interest of the accused." There are obvious legal issues in judicially created classes for perpetrating discrimination. Judicial orders are imprecise, are creations of un-elected persons thus unrepresentative of the democratic process, and finally cannot be subjected to a challenge under Part III leaving no recourse for those aggrieved. The Supreme Court attempts to conveniently sidestep all of this by resorting to verbiage. Since nobody really knows what the 'classical mould' of legislation is, this is doublespeak for "the Supreme Court can do whatever it wants" - a highlight of the Court's White-Knight tendency in this arena of economic offences [previously discussed here].

Public Interest and the Rights of Accused Persons

There are three other heads of argument that are considered in Suneja - (1) violation of Article 21 by the procedure created by the impugned order, which is not established by 'law'; (2) illegal use of Article 142 of the Constitution to curtail both Statutory and Fundamental Rights of the Petitioners, and; (3) Illegally preventing a stay of proceedings. Rather than consider each of these in turn, it is easier to attack the common thread underlying these strands - the idea that public interest is a satisfactory justification to proscribe rights of accused persons. With great vigour the bench notes that "it is now time for all of us including courts to balance the right of an accused person vis-a-vis the rights and interests of individual victims of a crime and society. Very often, public interest is lost sight of while dealing with an accused person and the rights of accused persons are given far greater importance than societal interests and more often than not greater importance than the rights of individual victims. ... It is not as if the appellants have been denuded of their rights. It is only that their rights have been placed in the proper perspective and they have been enabled to exercise their rights before another forum." 

While the Court merely makes a cursory reference to Shahid Balwa [(2014) 2 SCC 687], the same issue reared its head on that occasion. Here, again, it uses the arguments of the Petitioners against them in observing that in pressing for a stay of proceedings it seems that the conclusion of the trial is not an objective for them. These are serious cases of corruption, the Court notes, and so a stay order cannot be given for the asking. Such logic is fit for the pulpit, not for the Supreme Court. At the most basic level, the bench ignores the practical realities that plague the judiciary. The present petitions were filed sometime around winter 2016, and have been decided in July 2017. For whatever it is worth, the Petitioners did allege severe illegalities in the trial, and by refusing to consider the issue of stay at the earliest the Court allowed a potentially illegal trial to continue for six months. Within that time most of the evidence has been completed in two sets of petitions [Y. Harish Chandra Prasad v. CBI (Crl. Appeal No. 1145 of 2017) and P. Trivikrama Prasad v. CBI (Crl. Appeal No. 1153-54 of 2017]. How is that fair, and how is that a correct utilisation of judicial time? At a deeper level, the Court is effectively denouncing a class of persons from seeking an enforcement of their fundamental rights for no better reason in law than because it thinks it is against public interest. It does not realise that such rhetoric ultimately trickles down to trial courts, where an accused is then painted as guilty simply for choosing to remain silent [a fundamental right] and is thus subjected to lengthy pre-trial detention.

Conclusion

On all counts, Suneja is a bad decision. We get no further answers to why is it fair to exclude the High Court as a forum for jurisdiction beyond the bench re-iterating that this is in public interest. For this, it could have merely expressed agreement with the previous decision of Shahid Balwa and saved time. When the bench does try to engage with the legal issues, it fails to grasp what was at stake and flounders. Ultimately, the decision may result only in compounding uncertainty by using previously unheard of tests and expressions to explain what is, essentially, another instance of abusing the vast discretion vested with the unelected judges of our Supreme Court. 

(Disclaimer: The Author was engaged as a part of the team arguing for the Petitioners in Crl. Appeal No. 1145 of 2017)

Coal Block Allocation Cases and the Exclusion of Jurisdiction

The Supreme Court did three important things in Order dated 25.07.2014 in Manohar Lal Sharma v. Principal Secretary & Ors. [W.P. (Crl.) 120/2012]:

• Directing the competent authorities to issue requisite notifications to appoint Mr. Bharat Parashar as a Special Judge to exclusively deal with “offences pertaining to coal block allocation matters”;
• Transferred all cases pending before courts “pertaining to coal block allocation matters” to the Court of this Special Judge;
• Clarified that “any prayer for stay or impeding the progress in the investigation/trial can be made only before this Court and no other Court shall entertain the same.”

The Delhi High Court in Girish Kumar Suneja v. CBI [Crl. M.C. No. 3847/2016, decided on 27.10.2016] dismissed a petition under Section 482 Cr.P.C. as being non-maintainable, being of the view that the Order dated 25.07.2014 passed in W.P. (Crl.) 120/2012 by the Supreme Court completely excluded the jurisdiction of the High Court (excluding appeals against judgments). 

Today, the Coal Bench of the Supreme Court posted a batch of eight connected matters for hearing on the 6th of February (including the challenge against the Delhi High Court order in Suneja). These cases, both directly and indirectly, challenge an important issue of law: the exclusion of the High Court in either appeals, revisions, or writ jurisdiction in the coal block allocation cases. This has been discussed earlier on this blog, and I develop those thoughts in this post in support of the position that such an exclusion is unconstitutional. 

Testing Article 14

In State of West Bengal v. Anwar Ali Sarkar [AIR 1952 SC 75], the West Bengal Special Courts Act 1950 was struck down as there was no guidance offered by Section 5 of that Act in prescribing which category of cases merited the special procedure, which greatly differed from the ordinary procedure prescribed in the Cr.P.C. 

The Supreme Court thus upheld, in principle, creation of a specialised procedure through statute to address a particular category of offences. In Kedar Nath Bajoria v. State of West Bengal [AIR 1953 AIR 404], the majority concluded that the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 suffered from no infirmities when it allowed the executive to selectively send certain cases to Special Courts, as long as they were from a selection of economic offences provided for in the Schedule. Similarly, in Asgarali Nazarali Singaporewalla v. State of Bombay [AIR 1957 SC 503], the Supreme Court upheld the validity of the Criminal Law Amendment Act, 1952, which created a special procedure for the trial of offences under Sections 161, 165, 165A IPC and Sections 5(2) of the Prevention of Corruption Act, 1947 (all provisions now repealed). 

In Re Special Courts Bill [AIR 1979 SC 478], the Supreme Court answered a reference under Article 143(1) of the Constitution of India, when the President sought consideration on whether the Special Courts Bill, 1978, was constitutional. On the issue of Article 13, the Justice Chandrachud (as he then was) provided a thirteen-limb test to judge the Bill, and found that it passed muster. 

Adopting the tests laid down by the Supreme Court, it is apparent that the Order dated 25.07.2014 is bad in law. It creates a distinct category of cases “pertaining to coal block allocation matters” without specifying the scope and extent of this classification. Nothing is provided to show how the present classification carries any objective, and how it is connected to such an objective in the first place. 

Just, Fair, and Reasonable?

The particular classification enforced by the Order dated 25.07.2014 creates a procedure that violates Article 21 of the Constitution, for it is not just fair and reasonable following the test of Maneka Gandhi v. Union of India [AIR 1978 SC 597]. The Supreme Court has, since Vineet Narain [(1996) 2 SCC 199; (1998) 1 SCC 226], reluctantly agreed to monitor investigations in certain sensitive cases. These ‘Court-Monitored Investigations’, have the agency report directly to the Supreme Court during investigation to the complete exclusion of other forums. However, as clearly held in Vineet Narain, the exclusivity came to an end with the completion of an investigation, and regular criminal procedure resumed.

In the present case, the exclusivity continues for the entire duration of the trial, and thus offends Article 21 of the Constitution. The concept of a fair trial is embedded within the notion of Article 21, and the idea of a fair trial encapsulates within it the concept of effective forums of Appeal. The adjudication in appeal or extraordinary situations by a constitutional court, i.e. the High Court, is certainly part of the fair trial guarantee under Article 21. The decision by a Division Bench of the Supreme Court in Shahid Balwa v. Union of India [(2014) 2 SCC 687] where such an exclusion was upheld must be reconsidered. The nebulous concept of ‘large public interest’ cannot override the concrete constitutional guarantees made to every person under the Constitution of India.

As the denial of adjudication by the High Court for only a vague category of persons is clearly contrary to Article 21, it must then be determined whether there is any law to save such discrimination. The order dated 25.07.2014, would not be law for the purposes of Article 21, and therefore nothing saves the violation of Article 21 in the present case. 

Violating the Basic Structure?

The very exercise of the judiciary creating a special procedure for the trial of certain offences is contrary to the Basic Structure. The creation of offences, and the creation of their procedure, is a function well-vested with the Legislature in the separation of powers fundamental to the Constitution’s basic structure. Such usurpation of power offends the system of checks and balances that is inherent in the Constitution. It is akin to the process of re-promulgating ordinances, which a Seven-Judge Bench of Supreme Court recently held to be a fraud on the Constitution [Krishna Kumar Singh & Anr. v. State of Bihar & Ors, Civil Appeal No. 5875/1994, decided on 02.01.2017].

Furthermore, the Supreme Court in L. Chandra Kumar v. Union of India & Ors. [(1997) 3 SCC 261] found the complete exclusion of judicial review by the Administrative Tribunals Act, 1985 to be contrary to the basic structure of the Constitution. The power of the High Courts under Article 226/227 was specifically found to be part of the Basic Structure by the Constitution Bench in L. Chandra Kumar. Therefore, the exclusion of jurisdiction perpetrated by the Order dated 25.07.2014 is illegal, and accordingly cannot be given effect to.

Although it is settled that judicial orders are outside the purview of Part III of the Constitution [Naresh Sridhar Mirajkar, AIR 1967 SC 1], this cannot be utilised to do indirectly what is impermissible directly. A Seven-Judge Bench of the Supreme Court in A.R. Antulay v. R.S. Nayak & Ors. [(1988) 2 SCC 602] reviewed and set aside orders passed by another bench of the Court in proceedings whereby a special, but illegal, procedure was created to address the trial of certain offences against the erstwhile Chief Minister of Maharashtra. While doing so, it was observed that “the power to create or enlarge jurisdiction is legislative in character, so also the power to confer a right of appeal or to take away a right of appeal. Parliament alone can do it by law. No Court, whether superior or inferior or both combined can enlarge the jurisdiction of the Court or divest the person of his rights of revision and appeal."