Are Fundamental Rights Really Part of the Basic Structure of the Constitution ? --

New Insights Gleaned from the Book
‘The Kesavananda Bharati Case’ by T.R. Andhyarujina

(By Srinath Girish, Advocate, Calicut)

When I saw this book for the first time, I had a vague memory of having read about this case long ago in the Constitutional Law text at Law College. Something to do with how the Supreme Court, by a majority decision, held that Parliament cannot amend the Constitution in such a manner as to alter its basic structure.

There were several other cases in that text in the same chapter - Golak Nath, Minerva Mills.The gist of all such cases to be memorised, reproduced on the answer sheet for the examination and promptly shelved in the recesses of memory, in all probability never to be recalled again.

I am sure the situation is similar with all other lawyers who concentrated on civil, criminal and other run-of-the-mill matters after graduation and never appeared in a Constitutional matter in their careers.

Years later, having convinced myself that I had surely acquired a bit more legal acumen than in the Law College years, I picked up this book by Senior Counsel T.R. Andhyarujina, who passed away recently. Frankly, it was the book description that made me curious about it. It says that the book is ‘The Untold Story of Struggle for Supremacy by Supreme Court and Parliament’.

So I read it - and gained a totally different insight into the working of our democratic institutions, the equations between and within the Bench and the Bar and the process by which a nation’s future can be shaped by the decision in a single momentous case.

The author appeared along with the legendary H.M.Seervai on the side of the Government and thus had a ringside view of events. In the very beginning of the book, he regrets the fact that ‘India’s greatest Constitutional case was regrettably heard and decided in a manner most unconducive to a detached judicial decision’.

All throughout, the case was marred by political overtones. The balance of power between the pillars of democracy was threatened, with the Government playing all its aces to obtain a favourable verdict granting it absolute power to amend the Constitution, the primary target being the Fundamental Rights guaranteed by it. In the Golak Nath case, wherein the Supreme Court had held by the narrowest of majorities (6 to 5) that Paliament has no power to amend the Constitution in any way affecting Fundamental Rights, the Government had lost. Now it was banking on the Kesavananda Bharati case, to be heard by a 13 Member Bench, principally to consider the correctness of the decision in Golak Nath.

His Holiness Kesavananda Bharati Sripadagaveru was only a name lender. In the proceedings, he did nothing else but lend his name, by virtue of the petition he filed challenging the placing of the Kerala Land Reforms Act and the amendments thereto in the 9th Schedule of the Constitution.

The Congress party had obtained a massive majority in Parliament and was confident of the electorate’s backing to restore the supremacy of Parliament’s power to amend the Constitution in any manner it pleased. The Bench was headed by Chief Justice Sikri, known to be antagonistic to the Government’s stand. Nani Palkhivala, the versatile genius, spearheaded the challenge against the Government.

What better setting for a mega judicial thriller?

One has read in novels of the Perry Mason and the John Grisham variety, of lawyers trying to pack the jury with members who they feel would serve their clients’ cause. From this book, it appears that there was a deliberate attempt by the Government to pack the Bench with Judges who were likely to favour it.

There were tensions inter sethe Learned Judges on the Bench, ego clashes between the Attorney General Niran De and H.M.Seervai, both appearing for the Government and between Palkhivala and his opponents. Several sparring bouts ensued between the Bench and the Bar, to the extent that even a walkout by counsel was threatened. The Chief Justice was due to retire and wanted a judgment before he did. A Judge fell ill thrice during the proceedings, in the midst of speculation as to whether such illness was feigned or not, delaying the decision further. The hearing consumed 67 days, Palkhivala grumbling that he was given only 31 days for his submissions while the other side got 34.

On the 24th of April, 1973, a day prior to the Chief Justice’s retirement, eleven separatejudgments were read out in Court. 6 Judges held that the amending power was limited by inherent and implied limitation in the Constitution including Fundamental rights, while 6 others held that there were no limitations on the power of Parliament to amend the Constitution. The Judgment that clinched the verdict against the Government was that of Justice H.R.Khanna.

But as the author points out, the reasons stated by Justice Khanna differed completely from those stated by the 6 Judges who held against the Government. While the others held that the Fundamental Rights were inviolable, Justice Khanna relied more on the interpretation of the word ‘amendment’ and opined that amendment of the Constitution cannot have the effect of destroying or abrogating its basic structure or framework. The author points out that at no point did Justice Khanna uphold the inviolable nature of Fundamental Rights, in fact he rejected such a theory.

So could it be really said that the acclaimed View of the Majority actually represented the view of the majority of the judges in the case? The View of the Majority was in fact only a summarisation of the judgements on a paper prepared and produced by the Chief Justice on the day of judgment and passed along for the signatures of the other Judges. What is more, it was signed by only 9 of them. Four Judges merely passed on the paper to their neighbouring colleague without signing it. However, all Judges signed the Common Order of the Court remitting the cases to the Constitution Bench. There was no discussion by the Judges as to what the real view of the majority was.

The author emphatically states that the reports of AIR and SCC about the case are wrong and mixed up. No ratio of the Kesavananda Bharaticase can be derived from the so-called ‘View of the Majority’. The dictum that ‘Parliament cannot amend the basic structure or framework of the Constitution’ was the conclusion of only a single Judge and not that of a majority of them. In the words of Palkhivala “Thus by a strange quirk of fate, the judgement of Justice Khanna with whom none of the other Judges agreed has become the law of the land.”

For a case known widely as the ‘Fundamental Rights Case’, it is amazing that there is no conclusive finding that Fundamental Rights are to be considered a part of the basic structure of the Constitution. It took a ‘clarification’ by Justice H.R. Khanna two and a half years later in the Indira Gandhi case to actually bring them under the said purview.

The remainder of the book narrates the aftermath of the Judgment, the supersession by the Government of Senior Judges to pave the way for Justice A.N. Ray as the Chief Justice (which later resulted in the Supreme Court taking over the power of appointment of Judges in the Supreme Court Advocates-on-Record Associationcase, an attempt to review the Kesavananda Bharati judgement (which ended in an abrupt dissolution of the Bench by Chief Justice Ray without any apparent reason), further attempts by the Government to overcome the judgment, which were thwarted by the Judgment in the Minerva Millscase, how the judgment was perceived in other countries and so on.

The opinion of the author is that following the further interpretations of the Basic Structure of the Constitution by the Supreme Court, in the end, there was no clear victory either for the Supreme Court, the Parliament or the Government. Each side triumphed in its own way.

So this is the true story of the case which generations of law students have studied as part of their curriculum and never really analysed. We have always taken it as a given fact that Fundamental Rights are inviolable (except for the one with respect to Property). Reading this book made me understand how narrowly the hallowed Fundamental Rights, that we revere and swear by, almost became irrelevant in this wonderful Nation of ours.

A must-read for anyone who is interested in how Democracy works.

Kerala High Court on Co-operative Law -- A Digest of Cases, 2016

(By R.Muralidharan, Puducherry Civil Service Officer (Retd.), Director Catalyst [The Training People]

Kerala, the God’s own country, is a forerunner in the development of Co-operative movement and as a natural corollary the development of co-operative law, profounded by the Kerala High Court, through the path-breaking judgments and out of box adjudication of cases. An insight of the judgments will certainly enhance the overall knowledge and its impact on the co-operative movement,per se. This article delineates the judgments rendered by the Kerala High Court, reported during 2016, chapter-wise.

Registration of Co-operative Societies

(i) When the State Government was granting exemption to a Co-operative Society to extend its area of operation, overlapping into the area of operation of other co-operative societies, it cannot be said that the co-operative societies affected by the order of the State Government has no locus standito challenge the order extending area of operation. Power of the State under S.101 is in no way limited or curtained by S.7(1). There is no inhibition in exercise of power under S.101 by the State after registration of the society. Even after registration of the society, if public interest demands and there are cogent reasons, the power of exemption under S.101 can be exercised. Moreover, no such limitation can be read in the wide power given under S.101 which does not contain any limitation except to the conditions mentioned therein, as held by the Division Bench in Pantheerankavu Service Co-operative Bank Ltd. v. State of Kerala(2016 (3) KLT SN 72 (C.No. 61).

(ii) The relief sought in batch of Writ Petitions in Kalpetta Co-operative Urban Society Ltd. v. Joint Registrar of Co-operative Societies(2016 (4) KLT 802) is for a declaration that S.7(1)(c) of the Act which impedes the registration of new Co-operative Societies of similar type in the same area of operation is hit by Art.19(1)(c) of the Constitution, the said provision is illegal and unconstitutional. A consequential direction was sought to command the Joint Registrar to consider the petitioner’s application in the light of the Assistant Registrar’s recommendation.

Section 7(1)(c) refuses to register a co-operative society, it reveals two facets : (i) it compels the members of a proposed society to either join a similar existing society or not join one at all; and (ii) it would suggest that the existing society has a corresponding duty to take such new persons as members who, but for the existing society, would have formed a new society. Therefore, it negates the will of two sets of people: (a) denies desire of non members to form a society, (b) denies the will of existing members to admit those non-members.

The Court held that S.7(1)(c) is ultra viresand unconstitutional for it falls foul of Article 19(1)(c) of the Constitution. The Legislature is at liberty to bring in any regulatory measures-without coming into conflict with the constitutional mandate – to administer the co-operative societies in the sweep of public order and morality. A direction was issued to the authorities to consider petitioners applications without reference to the constitutionality invalidated S.7(1)(c) of the Act.

Membership

Bulk admission of new members in society just prior to election was the issue in Saly Sabu v. Vaikom Taluk Co-operative Agrl. and Rural Development Bank(2016 (2) KLT SN 122 (C.No.143).Judicial mandate and directives of Joint Registrar for consideration of large number of applications within short span of time cannot be said that the managing committee of bank has resorted to bulk enrolment with an eye on impending election. As the issue concerning requirement of active membership was awaiting judgment of the Full Bench, it cannot be a ground to stall the election process.

Management

(i) Section 28 (1D) and (1E) has no application when society was registered for one taluk and by a subsequent event, i.e., by division of taluk, it became society of more than two taluks. In the present case in Adhithya Varma Raja v. Irinjalakuda Co-operative Agricultural & Rural Development Bank Ltd.(2016 (1) KLT SN 78 (C.No.83)) before the DivisionBench, the first respondent bank was already divided into two prior to 2003 when two taluks were separated. In 2013 another taluk was formed. The first respondent society was already registered prior to the formation of new taluk. S.28(1D) thus relates to those societies which were got registered for more than one taluks without bifurcation of assets and liabilities. S.28(1D) is not attracted and S.28(1D) and (1E) cannot be looked into for finding out a procedure for effecting bifurcation in the facts of the present case.

(ii) In Govindan v.Joint Registrar of Co-operative Societies (General)(2016 (1) KLT 905)it was held that S.33 contemplates that the initial term of the administrative committee shall be six months extendable by six more months. The extension is neither mechanical nor mundane. The administrative committee must be in a position to earn the extension; it has to demonstrate that despite its best efforts, it could not hold elections within six months. It is not the question of their not taking steps to hold the election, but it ought to be their inability, despite their best efforts, to hold the election. In the present instance despite the administrative committee’s gross inaction, the first respondent has mechanically extended the term thus rewarding the committee’s inaction and inefficiency too.

(iii) If a candidate is disqualified as on the date of nomination, he cannot get rid of that disqualification by any act that is undertaken by him between the time of filing of the nomination and the time of scrutiny. Fact that candidate has cleared loan subsequently would not remove him from being disqualified. The Court while dealing in John Mathew v. Panamaram Service Co-operative Bank Ltd.(2016 (2) KLT SN 15 (C.No.18)placed reliance on the judgment of the Division Bench in Moosa v. Joint Registrar(1994 (2) KLT 943).

(iv) If an administrator effects a regular appointment in a society that appointment shall be without jurisdiction, ultra viresand void. It may be possible for an administrator or administrative committee to appoint employees on a temporary basis with prior permission of the Registrar. Such appointments will cease to have effect once the administrator or administrative committee vacates office. Their continuance will be till regular recruitment takes place. This was the ruling inRajan v. State of Kerala(2016 (2) KLT SN 74 (C.No.86).

(v) In Titus v. Joint Registrar of Co-operative Societies (General)(2016 (2) KLT SN 83 (C.No.96)it was held that sub-rule (3) of R.16 provides for two contingencies: (i) ineligibility ab initio; (ii) ineligibility subsequent. Sub-rule (4) provides only for ineligibility subsequent. In so far as the first contingency is concerned, the provision admits of no ambiguity. If the disqualification predates the admission of a person as member, the managing committee is competent to rule on the dispute. Sub-rule (3) further empowers the managing committee to examine the dispute of a member becoming ineligible subsequently, a contingency taken care of sub-rule (4). In both sub-rules two different adjudicatory authorities have been specified. In the present instance, the dispute is concentrating disqualification ab initio– the disqualification predates the second respondent’s admission as a member. The petitioner suffered ineligibility on first count, he was a minor when he was admitted into the respondent bank as a member. The petitioner ought to have approached the managing committee complaining of the second respondent’s ineligibility.

(vi) The special officer, an appointee of the Government, is expected to play the role of a catalyst; a transitional executive required to exercise his power to the minimal extent to ensure that the society has become functional and operational, as held in Padmanabhan v. Thalassery Primary Co-operative Agricultural and Rural Development Bank(2016 (2) KLT 803). The enhancement of share value to ` 500 in the inaugural general body meeting under aegis of the special officer cannot be sustained for it is in violation of the statutory mandate under S.28(1E). Consequently exclusion of the member on the premise that they do not remit the enhanced share value cannot be countenanced.

It is evident that the registration of the society shall be with the members of the committee so bifurcated. The special officer shall also constitute the committee elected from among the members of the bifurcated society. The special officer is appointed for a very limited purpose. He is, in fact, a facilitator empowered to do all that is necessary during the transitional period. His role is more limited than that of an administrator. Metaphorically, the special officer is the air host of the society on its ‘next journey’ after its initial landing in the name of bifurcation. The air host, cannot, at any rate be the pilot. The pilot is the managing committee to be elected through the democratic process. The special officer is not empowered to enroll new members at any stage. He is eligible to constitute the committee of the new society after bifurcation only with the existing members who were allotted to the society based on the territorial division.

(vii) It is trite that for any action for disqualification of a member that is taken pursuant to R.16(3) and (4), the disqualification should continue till the date of initiation of action for removal of a member on the ground of the said disqualification. The phraseology used in R.16(4) clearly indicates that the ineligibility should be a continuing one continuing till the time when the Registrar initiates action for declaring that the member concerned has ceased to be a member of the society. In other words, the ineligibility should be one that was suffered by the member subsequent to his acquisition of membership and should be one that continues till the date of initiation of proceedings under R.16(4) against the member, so held in Sivadasan v. Joint Registrar (General) (2016 (3) KLT SN 7 (C.No.6).

(viii)On a harmonious reading of S.30, R.18(a) and R.36(1)(b) of the Rules, it is categorical and clear that, in order to call a special general body proposed by a member or members, there should be a requisition in writing from one fifth of the total number of members of the society. That apart as provided under R.18(a), the managing committee is vested with powers to make inquiries with respect to the complaint made by any member of a society against any other member proposing to bring a resolution against such member. Therefore, after the inquiry made by the committee in accordance with R.18(a) on a proposal from a member and if it decides to constitute a special general body, then it should have a requisition in writing from one fifth of the total number of members, vide Cochin City Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies(2016 (3) KLT SN 51 (C.No.37).

(ix) Looking at the phraseology used in S.33(1A) it is clear that the Registrar on securing permission from the Government is to extend the term of the ‘said administrator or administrative committee’, which means that if already the authority in power was the administrative committee, on the basis of permission secured from the Government, the Registrar has only the power under S.33(1A) to extend the term of the said ‘administrative committee’. In other words, the Registrar is entitled to extend the period of the administrator only if an administrator was appointed under S. 33(1)(b). However, the phraseology used is ‘extend’ in S. 33(1A) and in the second limb of S. 33(1)(b). If the intention was to replace the administrative committee after the expiry of one year period, the term used would have been ‘appoint’. The terms ‘extend’ and ‘appoint’ are two different connotations carrying different meanings, and cannot replace each other, unless it is defined so under the Act is the ruling in Hamsa v. State of Kerala(2016 (3) KLT 429).

(x) Government contribution or share are provided and secured in a society not only to support the society with financial assistance but also ensuring its functioning properly and legally. It is clear that the petitioner is not at liberty to return the shares to suit its convenience. The attempt of the petitioner in Pattanakkad Service Co-operative Bank Ltd., v. Joint Registrar of Co-operative Societies(2016 (3) KLT SN 86 (C.No.74)was to get over the apprehended proceedings under S.32 which thus means since S.65 inquiry was going on, petitioner could not comprehend that it is likely to end in the proceedings under S.32 (1).

Election

(i) Rule 35A(v) clearly states that the persons included in the voters list should be supplied with identification cards and this process shall be stopped two days before the date of polling. It is evident that the identification cards can be issued to the members till the penultimate day of the election. The objection concerning identity cards was rather premature, as held in Jerome Christudas v. State of Kerala(2016 (1) KLT SN 69 (C.No.70).

(ii) If the division of wards has a statutory objective to be achieved, it cannot be denied vis-a-viswomen and other reserved categories of the society. The division of wards in part to the exclusion of women and other reserved categories cannot be sustained. As regards the prejudice being caused of non-division of wards as far as the reserved categories are concerned, it ought to have come from any of the persons affected thereby. In the present instance, neither a woman candidate nor any other reserved category has made out any grievance in that regard. On the other hand, it seems that the candidates of reserved category have already filed their nominations on a non-ward basis. The society’s failure to divide the wards to accommodate the reserved categories does not substantially affect the statutory mandate, going by the doctrine of substantial compliance. In the absence of any challenge by any affected person, the election process cannot be interdicted, as held in Narayanan Kutty v. Joint Registrar of Co-operative Societies(2016 (4) KLT SN 43 (C.No. 46).

(iii) In Thiruvalla East Co-operative Bank Ltd.,v. State Co-operative Election Commission(2016 (4) KLT 965) it was held that the committee is vested with enough powers to pass a resolution sufficiently earlier to the term of expiry of the committee. Moreover, it was the decision of a democratically elected body to surrender office on an earlier date, thus enabling the incoming committee to take over the management and have its full term. Therefore, any manner of interference with the said democratic political will is not expected from an executive authority. Election Commission does not have power to reject a resolution passed by the committee ahead of 60 days before expiry of the term of the committee.

Properties and Funds of the Societies

In Radhakrishna Kurup v. Nadakkal Service Co-operative Bank Ltd. & Ors. (2016 (4) KLT82)it was held that S.56A providing that if society acquires any immovable property during its realizing a loan amount, it shall dispose it of within seven years from then, is unconstitutional being violative of Art.14. It suffers, incurably, from the vice of unreasonable, irrational classification offending the principle of equality guaranteed under Art.14 of the Constitution.

Granted that the co-operative spirit permeates the whole scheme of the legislation, still it is not discernible that at the cost of the welfare of all the members, a defaulter should be rewarded with the sale proceeds of the property just because that it is the bank, rather than a third party, that has bid the property. Therefore, classification by way of segregation of the co-operative bank as a distinct entity to have a restriction imposed that it cannot own the so-called non-banking asset beyond particular period is susceptible on the ground of unreasonable classification, with a taint of hostile discrimination, too.

Audit, Inquiry and Inspection

(i) On a harmonious reading of Ss.65 and 68, it can be seen that the phraseology employed therein is ‘any person who is or was interested with the organization or management’. Therefore, the retirement of the petitioner or continuance in service is not a subject matter to be considered in an inquiry conducted under S.65 by the Registrar in his routine business by virtue of the powers conferred on him under S.65 of the Act. Even if there is an audit report and no discrepancy was found out, still Registrar is vested with powers under S.65 to conduct an inquiry and take appropriate actions in accordance with law, as held in Muraleedharan v. State of Kerala(2016 (3) KLT 339).

(ii) The Joint Registrar appointed an enquiry officer under S. 66(2) and the officer submitted his report two months after his retirement. No procedural parameters followed by the Joint Registrar before appointing vigilance officer subsequently. Joint Registrar cannot take recourse of S.68A once enquiry is initiated under S.66. Appointment of vigilance officer to conduct parallel enquiry was not proper, vide Wayanad District Police Co-operative Society Ltd. v. Registrar of Co-operative Societies, Thiruvananthapuram & Ors.(AIR 2016 (NOC) 604 (Ker).

Surcharge

Going by S.68, it is categorical and clear that in the course of an audit, inquiry or inspection, if it is found that any person, who is or was entrusted with the organization or management of such society or who is or who has at any time been an officer or an employee of the society, has made any payment contrary to the Act, the rules or the bye-laws, or has caused any deficiency in the assets of the society by breach of trust or willful negligence etc., the first respondent is vested with powers to proceed against such persons who have caused the loss and recover the same. The action initiated by the first respondent is in accordance with law, after providing opportunity to the petitioners to contest the proceedings. True, the third respondent bank may have a remedy in terms of agreement, but that will not in any manner circumscribe or whittle down the powers of the first respondent to proceed under S.68 of the Act, is the ruling in Pramod v. Joint Registrar of Co-operative Societies(2016 (3) KLT SN 37 (C.No.31). 

Disputes

(i) The issue for determination in Kerala State Co-operative Agricultural and Rural Development Bank Ltd., v. Joint Registrar of Co-operative Societies(2016 (1) KLT 572) waswhether the first respondent has the inherent jurisdiction to decide the issue of regularisation of the service of the second respondent’s wife and incidentally the conferment of other service benefits. In P.S.Raveendran v. State ofKerala & Ors. (2007 (3) KLT 558), the Division Bench has categorically held that in any matter concerning service dispute, the Registrar or the Joint Registrar, even while exercising their powers under R.176 cannot have any jurisdiction in the light of the exclusionary provision under S. 69. The said judgment is an authority for the proposition that what has been raised by the second respondent, which resulted in the order, was nothing but a service dispute. The issue of regularising the employee’s services or claiming any residuary service benefits is a service dispute and is eminently amenable to the jurisdiction of an arbitrator under S.69 of the Act.

(ii) The principle of forum non convenienscan be pressed into service if territorialjurisdiction is conferred on multiple places. The Courts have uniformly held that convenience of all parties should be considered while determining the place of adjudication. The doctrine of dominus litus yields to the principle of forum non conveniens keeping in view it is always the petitioner who chooses the forum in the first instance, vide Saji Mattathil v. Joint Registrar of Co-operative Societies(2016 (2) KLT 514).

(iii) A person who raised a grievance must show how he has suffered legal injury. Generally a stranger having no right to any post or property cannot be permitted to intervene in the affairs of others. Evidently, it is not only a question of right but also of interest, as held in Jomon Augustin v. State of Kerala(2016 (2) KLT SN 77 (C.No. 88)). 

(iv) Clause (d) of S. 69(2) is quite comprehensive and indeed an efficacious remedy concerningthe service disputes of whatever nature. Even a dispute concerning the misappropriation by an employee is squarely covered by the said provision. The proceedings have been rightly initiated against the second respondent, vide Vaniamkulam Panchayat Vanitha Sahakarana Sangham v. Kerala Co-operative Tribunal(2016 (2) KLT SN 78 (C No.90).

(v) The Arbitration Court is the substitute to a Civil Court and also any other adjudicatory forum concerning the election disputes.It has, therefore, all the necessary trappings and powers of a Civil Court. In Angadi Service Co-operative Bank Ltd., v. Nissamu Kutty (2016 (2) KLT SN 88 (C.No.101)it was held that any restrictive interpretation of the provisions, especially S. 70 and R. 67 would render the Arbitration Court an inferior Tribunal not having the powers of a Civil Court though it is statutory supposed to be a substitute to a Civil Court. The Legislature has not contemplated a situation where a person approaching a Civil Court could get a superior relief, but on the other hand, the same person approaching an alternative forum would be entitled to an inferior relief. The arbitrator is eminently empowered to exercise his powers for the appointment of an expert as deems appropriate to render complete justice.

(vi) In Rema Devi v. Joint Registrar of Co-operative Societies (General)(2016 (3) KLT 50)it was held that the arbitrator under S.70 is conferred with power enabling it to decide on the core issue placed before it for consideration. The said ultimate power provided to the arbitrator is broader, wider and deeper, than trivial, peripheral or an ancillary issue that crop up during the course of the proceedings or thereafter. Viewed in that manner, it can be seen that if the power is vested to decide a more serious issue, then the power to decide an issue to set aside an award or to restore an application dismissed for default is an axiomatic power that is implied and deemed under S.70 of the statute itself. If such implied, deemed and inherent powers are not available to such authorities, justice will be a casualty at their hands. Such proceedings will become uneconomic, cumbersome and delayed. If such power is not exercised by the arbitrator, result will be opening up docket explosion before the appellate tribunal and constitutional Courts. Therefore, merely because an ex parteaward is passed, the arbitrator will not become functus officio. The authority by doing so is not accomplishing the end result of objective evaluation by deciding the dispute on merits and therefore the authority is still vested with power inherently to restore the application or set aside the award and fully discharge the function empowered under the provisions of law.

(vii) The jurisdiction to decide the disputes is not restricted to those disputes provided in clauses (a) to (d) of S. 69(2) alone. An inclusive meaning given to the term dispute does not in any manner take away the jurisdiction to decide the dispute covered by S. 69(1). The term ‘employee’ occurring in S.69(1)(c) cannot be interpreted to mean an employee envisaged under S.80 of the Act and included in the Appendix. As long as the petitioner employer and the second respondent do not dispute that the second respondent was employee under them as collection agent, the complaint of the second respondent against the removal or disengagement can only be one coming under S.69(1)(c) of Act, which is necessarily to be decided by the Arbitration Court. The Joint Registrar cannot in exercise of his powers conferred under the Rules, interfere with or deal with a dispute overriding the exclusion of his authority by virtue of the provisions contained in the Act, by adopting summary procedure under R.176, by rescinding resolution of the petitioner Co-operative Society. This ruling was given in Kanjoor Service Co-operative Bank Ltd., v. Joint Registrar of Co-operative Societies (General)(2016 (3) KLT 73).

(viii) The provision in S.69, if understood in the light of the definition of ‘dispute’ as contained in S. 2(j) would make it clear that the jurisdiction of the Civil Court is excluded in respect of disputes involving matters touching the business, constitution, establishment or management of a society among or between persons enumerated in S. 69 of the Act. A dispute between a society and its agent would certainly falls under S. 69(1)(c), but that by itself is not sufficient to exclude the jurisdiction of the Civil Court. In order to exclude the jurisdiction of the Civil Court, the dispute should primarily be a dispute involving a matter touching the business, constitution, establishment or management of the society. The suit as against the first defendant is a suit for realization of the pecuniary loss caused by the first defendant to the plaintiff on account of the wrongful act committed by the first defendant. The said claim can be regarded only as a suit for realization of damages. Such a suit cannot be said to be a suit involving a matter touching the business of the society and hence the second appeal failed, as held in Hyrunnisa v. Koothali Service Co-operative Bank Ltd.(2016 (3) KLT 255).

(ix) Power of Ombudsman is excluded when the dispute is by and between the bank and its employees or its members, vide Nadathara Farmers Service Co-operative Bank Ltd., v. Kerala Co-operative Ombudsman(2016 (3) KLT SN 113 (C.No.105).

(x) Whether a register in Form 32 on the basis of which the list of 611 members has been prepared has to be gone into under S.69. Similarly, the infraction, if any, of Ss.16A and 19A are also matters to be adjudicated as and when a statutory dispute is raised. The cutoff date for implementation of the amended provision of R.18A has been clarified to be 26.11.2016. The implementation of the amended provisions of the Kerala Co-operative Societies Act and the Rules does not therefore depend on the birth of a co-operative year, as held by the Division Bench in Cherian Eapen v. Thiruvalla East  Co-operative Bank Ltd.(2016 (4) KLT SN 61 (C.No.70).

(xi) On the issue can the petitioner’s appointment be interdicted without an opportunity of hearing to him unless the petitioner was guilty of practicing fraud in securing the appointment, the Court in Jayarani v. Assistant Registrar of Co-operative Societies (2016 (4) KLT 653) held that the petitioner has never been put on notice at any point of time. It is trite to observe that no order without hearing the affected person can be sustained, for the right to prior hearing is an important facet of the natural justice, a quasi-fundamental right. S. 69 (1) is eloquent on the adjudicatory mechanism concerning the service disputes. If the dispute is raised by an employee or any other person than the employer itself, the recourse ought to be the Co-operative Arbitration Court. The remedy, indeed, is efficacious. The Registrar has plenary powers under R.176 to rescind a resolution passed by the managing committee of a society. Evidently, the power conferred on the Registrar or his delegate is a species of subordinate legislation. S.69 on the other hand provides for the dispute resolution mechanism involving the quasi-judicial authorities – service disputes included. An employee of a society or a third party questioning any aspects of service in the society shall approach only the Co-operative Arbitration Court under S.69. Expressed in the negative, the question of a private person approaching the Registrar or the employer, the very society complaining against the appointment of a person does not arise.

Appeal, Revision and Review

The Court has never laid down that 90 days is the period within which a revision petition, in the absence of any statutory period of limitation, has to be filed. More than the length of the delay, the nature and cause of delay assumes importance in considering whether a revision petition has been filed on time. It is more a question of laches than delay. The explanation is to be the satisfaction of the adjudicatory forum. The satisfaction varies from case to case. The Court while exercising its powers of judicial review would be slow to interfere with the discretion exercised by an adjudicatory authority, be it a revisional forum, on the issues such a delay condonation. This view was held in Thalassery Co-operative Rural Bank Ltd., v. State of Kerala(2016 (2) KLT SN 81 (C.No. 93)).

Deduction from Salary

Section 37 provides for remedial mechanism for the creditor bank to straight away deduct from the salary of the principal borrower or the guarantor without recourse to the due process of obtaining an award or a decree and then seeking remittances from the garnishee. The provision begins with a non obstante clause. The moot question in Sukumaran v. Kollam District Co-operative Bank Ltd.(2016 (1) KLT SN 39 (C.No.38)) is whether the retirement benefits partake the character of salary. The Division Bench in 2005 (4) KLT 619 has emphatically held that even guided by S. 37 the term ‘salary’ cannot be extended to the retirement benefits. On the above premises, the first respondent cannot be heard saying that the salary includes the retirement benefits, especially DCRG as well.

Multi State Co-operative Societies

(i) Section 11(4) of MSCS Act only enumerates the items of information that is required by the first respondent to be objectively satisfied concerning the need for amendment of bye-laws of the society. The expression ‘any other particulars’ at best, can only be clarificatory in nature as regards the information thus far produced before the Registrar. It cannot be a compliance altogether on a different plane as regards obtaining an extra-legal consent from an authority extraneous to the scheme of the Act, vide Haldar Vikas Credit Co-operative Society Ltd. v. Central Registrar of Co-operative Societies(2016 (1) KLT SN 77 (C.No. 81).

(ii) A promoter of a proposed Multi-State co-operative society cannot be compelled to obtain a ‘no objection certificate’ from the Registrar of Co-operative Societies of the State concerned(Zeena v. Central Registrar of Co-operative Societies(2016 (1) KLT 811)).

Income Tax Act

A primary agricultural credit society, registered as such under the Kerala Co-operative Societies Act and classified so under that Act is entitled for exemption under S.80P of the Income Tax Act. A return filed by the assessee beyond the period specified under S.139(1) or 139(4) or under S.142(1) or S.148 can also be accepted and acted upon provided further proceedings in relation to such assessments are pending in the statutory hierarchy of adjudication in terms of the provisions of the I.T. Act, as held by the Division Bench in Chirakkal Service Co-operative Bank Ltd., v. Commissioner of Income Tax(2016 (2) KLT 535).

Miscellaneous

(i) The issue that came up for determination in Kadungalloor Service Co-operative Bank v. State of Kerala(2016 (1) KLT 67) was whether the petitioner bank was entitled to open its customer service centre without prior permission of the second respondent in terms of S.74B(2) of the Act and R. 80. The petitioner bank had chosen to call its new place of business which it established without prior permission, a customer service centre. Having held that the services rendered in a customer service centre are also part of the banking operations and that the customer service centre has the trappings of either a branch or an extension counter, the petitioner’s banking operations even in the name of a customer service centre, cannot be countenanced in the absence of prior permission from the second respondent. Any stipulation concerning any financial activities, be it banking or otherwise, requires strict interpretation and afortiori strict compliance with the statutory formalities.

(ii) The question of the husband’s implicitly incurring a liability on the contract entered into by his wife with third party, in the absence of the husband’s express or implied consent thereto does not arise. In this case, the wife contracted the loan having provided the sureties, who do not include her husband. The husband contracted the loan subsequently. The bank’s plea that it bona fidebelieved that the petitioner could offer his property as security is to be discounted. For by the time the wife took the loan, the husband was not at all in the picture, his loan was subservient. Unless a person is a party to loan transaction in whichever capacity the question of bank’s exercising the general lien vis-a-visthe property of that person, even if he or she were the spouse of the contracting party, does not arise. It falls foul of the contractual obligations of the banker and customer. In these circumstances inLonankutty Antony v. Joint Registrar of Co-operative Societies(2016 (2) KLT 281) it was held that the respondent’s bank action of retaining or withholding the petitioner’s title deeds even after his clearing the loan is per seillegal and arbitrary.

(iii) The Court observed that there may soon be some statutory mechanism in the place to protect the interests of bona fidepurchasers by way of title verification even in the case of properties under attachment, litigation, decretal title declarations (Sakthivel v. Marayour Service Co-operative Bank Ltd.(2016 (2) KLT SN 25 (C.No.31)). 

(iv) In Kasaragod Co-operative Educational Society Ltd. v. Registrar of Co-operative Societies (General)(2016 (3) KLT SN 53 (C.No.39),it was held that it is too well established a principle of business practice to be called in question that a creditor may as well impose conditions on the debtors commensurate with their creditworthiness, as well as their past relationship. It is entirely in the commercial wisdom of the respondent bank to insist that the petitioner complies with certain conditions. The Court cannot substitute the bank’s commercial wisdom with its own, even if it has any. Merely because some other bank has accepted the loanee’s proposal on relaxed conditions, the respondent bank’s action per secannot be termed as either discriminatory or arbitrary.

(v) Petition filed by the second respondent in Anil Kumar v. Joint Registrar of Co-operative Societies (General)(2016 (4) KLT SN 25 (C. No.27))was materially suppressed with the mala fideintention of ensuring that the judgment is not restored by the Court in any manner. The said suppression can never be stated to be an innocent mistake on the part of the petitioner since the petitioner is very well aware that the writ petitions filed by the petitioner were disposed of by a common judgment. The act and conduct on the part of the petitioner cannot be viewed lightly. Taking serious note of the fact the petitioner has suppressed material facts, abused the processes of the Court, interfered with the impartial and independent administration of justice, petitioner is not entitled to secure any relief and the Writ Petition is also liable to dismissed with appropriate cost of `50,000.

Employees of Societies

(i) The petitioner does not claim any graduation degree nor is there anything on the record to indicate that he possesses such degree. The only basis of promotion is claimed on the post graduate degree from the open university which cannot be relied nor on that basis it can be held that the petitioner fulfils the qualification as prescribed in R.186. Here the petitioner does not have any degree and has laid his claim for promotion on the basis of post graduate degree obtained from the respondent university which cannot be treated as equivalent to essential qualification as prescribed under R.186. He has never passed and obtained graduate degree qualification. There no error was committed by the Joint Registrar in refusing the approval of the promotion and the direction issued by the learned single Judge directing the Joint Registrar to reconsider cannot be sustained, as held by the Division Bench in Registrar of Co-operative Societies v. Sadananda (2016 (1) KLT SN 32 (C.No.27) .

(ii) The Government or the Registrar has the power to fix the staffing pattern of a society. By extension, it has got the power to sanction the posts as well. Filling up those posts based on the need and necessity is in the domain of the management. The manner and method of recruitment is certainly required to be prescribed by the Government, but not the actual timing of the recruitment. Such power is unavailable either from S.66 or S.66A or even S.80 of the Act. In Sunikuttan v. Ernakulam District Co-operative Bank Ltd.(2016 (1) KLT 448), the respondent bank has not refused to appoint or regularize the employees. Its only concern was that the time was not ripe for the regularisation of the petitioner’s services given the financial condition of the bank. It entirely lies in the domain of the employer to best assess the prospects of the organisation and then go for recruitment or regularisation as the case may be. The Government can guide even lead a society but it cannot take over the very administration of the society. There can be no usurpation.

(iii) In Joby Thomas v. Joint Registrar of Co-operative Societies(2016 (1) KLT SN 71 (C.No.73)) it was held that R.182 (4)(i) mandates that the society shall report the vacancy to the Co-operative Service Examination Board and the applications for appointment shall be invited by the Examination Board through notification in two newspapers in vernacular dailies having wide circulation in the area. The said stipulation applies to the societies covered by S.80B for conducting the examination to the posts over and above the cadre of junior clerks. In the present instance, the recruitment is concerning the post of an attender. 

 (iv) The employee was dismissed from service and was later reinstated. If there was a mere delay and in the absence of any default in remitting the amount, an interest of 12% be charged on amount due from the employer under the scheme. Levy of penal interest at 24% for the intervening period was not justified, vide Peringome Service Co-operative Bank Ltd., v. State Co-operative Employee’s Pension Board (2016 (1) KLT SN 87 (C. No.93).

(v) Rule 185(3) contemplates filling up of vacancies one by one in the ratio of 1:1 by promotion and direct recruitment. The bank is not entitled to take its own decision disregarding the mechanism provided in R.185(3) for deciding as to whether a particular vacancy has to be filled up by promotion or direct recruitment. Upholding the decision of the learned single Judge, the Division Bench in Jameela v. James Joseph (2016 (2) KLT SN 26 (C.No.33)observed that the bank has misinterpreted the rules to the benefit of the promotees which action is unsustainable.

(vi) The employees retiring on their attaining the age of superannuation and those voluntarily retiring cannot be treated as two classes of employees for the purpose of terminal benefits. Both are entitled to a pension, but as regards the family pension, a differentia was introduced. The differentia introduced is without any rational basis. It falls foul of the constitutional mandate of equality – equal protection of the law, vide Kochurani Thomas vs. State of Kerala(2016 (2) KLT SN 69 (C.No.81)

(vii) Mere use of the word ‘posts’ in sub-rule (1) R.185 does not take out the post of General Manager of the society out of the purview of sub-rule (1). Post is covered by rule-rule (1) and that is to be filled up by promotion (Mattanchery Mahajanik Co-operative Urban Bank Ltd. v. Rajendran(2016 (2) KLT SN 93 (C.No.(108)).

(viii) Going by the provisions of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and the authoritative pronouncement of law made by the Supreme Court, reservation which is not dependant on the identification of the posts should be deemed to have come into operation with effect from the date of commencement of the Act. The vacancies earmarked for physically handicapped under the PWD Act were to be reckoned not from the date of identification of posts, but with effect from the date of commencement of the Act or at least the entrustment of the selection to the said post to the Public Service Commission. The direction given to appoint persons with disabilities against the quota earmarked for the disabled was upheld by the Division Bench. The contention that 3% of vacancies could be filled up only after conducting a special recruitment was not accepted by the Division Bench in Ernakulam Regional Co-operative Milk Producers Union Ltd. v. State of Kerala(2016 (2) KLT 89).

(ix) Enhancement of ceiling limit under S. 4(3) of Payment of Gratuity Act, 1972 to `10 lakhs applies from the date of its original amendment, i.e., 24.5.2010 and not when the said amendment was later adopted by State. Provisions of the Gratuity Act straight away apply to employees of the Co-operative Societies in the State, as held in Nirmala Thomas v. Kerala State Co-operative Consumers Federation Ltd. (2016 (2) KLT SN 115 (C.No.136).

(x) Rule 185(A) read with S.80(B)(4) is introduced to provide employment for short periods with the avowed object of ensuring that unemployment is eradicated to a limited extent. Merely because such a provision is made under law that will not confer any legal right to a person appointed to claim regularization. There is no scheme or provision under law to regularize such services is the view held in Divya Gopinath v. Kerala State Co-operative Agri. & Rural Development Bank Ltd.(2016 (3) KLT 39).

(xi) When the State Government have been a general power to frame rules for regulating the service conditions of employees, service condition can be framed which may also include the procedure and manner for ordering suspension and the Regulation 4(iii) is fully covered by the statutory power given by the State under S.80(8) of the Act. The emergency power given to General Manager to suspend has to survive along with the statutory provision under R.198(6) that is the appointing authority who ultimately retains the power of ratification of suspension. The view of the learned single Judge holding that the General Manager has no power to suspend the employees was faulted by the Division Bench in Thrissur District Co-operative Bank Ltd. v. Sunny(2016 (3) KLT 79).

(xii) In case a person abandoning service without any valid explanation, a limited enquiry as to whether the employee concerned has sufficient explanation for not reporting for duty, after the period of leave had expired or failure on his part on being asked so to do amounts to sufficient compliance with the requirements of principles of natural justice. Merely for the reason that no orders were passed in the leave application does not mean that the delinquent officer can be relieved of the responsibility to join duty, as held in Thodupuzha Taluk Co-operative Rubber Marketing Society v. Kerala Co-operative Tribunal(2016 (4) KLT SN 41 (C.No.44).

(xiii) In Chittur Primary Co-operative Agricultural and Rural Development Bank Ltd.v. State of Kerala(2016 (4) KLT SN 42 (C.No.45)it was held that the provision contained inR.182(4)(viii) is only to the effect that in case the employer co-operative society concerned wants to make any appointment to the post, then necessarily the employer can make such appointments only from among the candidates included in the rank list/selection list so prepared by the board as per rules. This provision in the Rules cannot be understood to impose any obligation or duty on the co-operative society to fill up all or any other vacancies for which the selection process was finalized, all or any of the vacancies, at all costs or that the employer is left with no discretion not to fill up only vacancies etc. The Co-operative Examination Board, constituted in terms of provisions contained in S. 80B and R.182 (4) has not been given any powers by virtue of those provisions to issue any directions or supervisory guidelines to the appointment authorities concerned as to whether or not any or all such vacancies should necessarily be filled up. Its duty is to conduct the fair and meritorious selection process subject to the various guidelines and parameters in the provisions of the Act and Rules and also to ensure about the correctness of such rank list and report to the Joint Registrar about the irregularities, if any.

Judicial Reform As An Imperative*

(By Justice Jasti Chelameswar, Judge, Supreme Court of India)

Dear brother Kurian Joseph, Mr.Kaleeswaram raj, author of the book “Rethinking Judicial Reforms: Reflections on Indian Legal System”, Justice Basant, my one time colleague at the bench, Mr. Raju Ramachandran, senior advocate, ladies and gentlemen,

I am happy to be here this evening for a number of reasons.  A book release function is an event which I always enjoy whether I release or receive the book or simply participate in the programme. I know the author. The book is well written. I am not saying this to please the author.  I have gone through three or four articles of the book. Participating in this event gives me an opportunity to be in a gathering of Keralites, a state which I had the privilege of serving for 18 months. All these reasons are good enough to make me happy.

The occasion demands me to say something about the author and the book.

Mr.Kaleeswaram raj has argued a few cases before me when I was chief justice of high court of kerala and couple of times in the supreme court.  On one occasion, he was critical of one of the judgments rendered by me as chief justice of high court of kerala.  He said that I missed an opportunity of laying down something very profound.  It was this article of mr.Kaleeswaram which made me take a serious note of him, not because he was critical of my judgment but because I realised that he was a man who has the energy and enthusiasm to critically analyse the judgments. 

Lawyers are more willing to criticize judges than critically analysing the judgments.  Successful lawyers hardly have time or patience to critically analyse judgments.  Some lack determination and others the necessary resources to publish.

In his article, Mr.Kaleeswaram made a reference to Jacques Derrida. I confess that I have no in depth knowledge about Derrida’s theory of deconstruction, though I am broadly aware of the theory.  The reference to derrida really made me take note of Kaleeswaram raj’s intellectual abilities. I like people with that endowment.

I have an uncomfortable feeling that we have become a society which admires and promotes mediocrity. Brilliance is not admired. Mr.Kaleeswaram by now should have been a prominent figure in the indian legal system.  I believe that he has not got the recognition which is due to him.

I believe today that the kind of intellectual inquisitiveness which was exhibited by young lawyers of the earlier times and the excitement which they experienced when they had an opportunity to hear a brilliant argument in the court hall appears to be missing.  If I am proved wrong, I will be the most happy man. I am talking about the averages of the profession.  I know that some of the youngsters are brilliant.  The priority seems to have shifted from learning to money making. I am not at all against lawyers making money. Make it by all means. But make it honourably. That is what I was told when I was an youngster. Legal profession is something more than a mere occupation.  Arguing a case well or writing a good judgment or making a critical analysis of a judgment always gave me greater satisfaction.

I have heard disparaging remarks being made by people occupying high constitutional offices about lawyers who have an academic bent of mind. A very tragic state of affairs.

I believe the period between 1960 to 1990 did not attract the best minds to the legal profession. The best minds of those years were attracted to the study of medicine or technology. Some even opted for the civil services. However, there have been exceptions.

But post 1990s the situation is slowly changing, we find youngsters getting into the law colleges and profession, by choice. The choice is understandable.  Some of the successful lawyers in the Supreme Court make more money than successful film stars like Amitabh Bachchan or Rajinikanth. Perhaps that offers an explanation why the youngsters, are attracted towards the profession. I am not trying to denigrate the youngsters coming into the profession. I am trying to understand the various factors which attract youngsters.   Making money is one of the prime activities of all human beings. And the profession today has the potential of offering you limitless economic success. In the process, we find brilliant youngsters coming. I only hope honestly and pray that the future of this profession is going to be bright because ultimately the success of the judiciary depends upon the quality of the bar. The strength and the success of the judiciary, and the utility of the system depend upon the quality of the members of the bar. I see a hope. Some of the youngsters are simply brilliant. Today, they have greater avenues of information. Our generation and the previous generation coveted a photographic memory, I think it has simply become irrelevant in the modern world. Have a smart phone in your hand, your memory can be kept aside and you can retrieve anything what you want from that instrument. Before I acquired a smart phone, I used to remember at least 300-400 telephone numbers by heart. Today, I don’t remember my own telephone number, honestly ... Leave it there. !!

Having said so much about the profession, the lawyers and their state of affairs, I shall now come back to the book.  Mr. Raj in his book has touched various aspects of the legal system. I would like to mention only three of them for this evening. The first one is the most ‘glamorous’ topic for the last two years- the judicial appointment process. The second one is the eternal problem of indian judiciary – the law’s delays. The third topic is the better management of court system. In my view, they are all interconnected.

As far as the judicial appointment process is concerned, all of you are aware of the on-going story. There can never be a final word in this matter.  There are views and views. What was considered right in the 1950s and the 1960s became doubtful by the 1970s and the 1980s. By 1990s the process became objectionable and unconstitutional. A substitute was invented by a judicial interpretative process. However, with passage of time, doubts came to be expressed about the correctness of the substituted process. Another legislative experiment was made by way of the njac. And you know the result. The majority of the bench held it to be an unconstitutional exercise. Well, that’s the law declared and we are bound by it. But in a democracy, the debate can always go on and will go on; it will not stop. That is the beauty of a democratic system.

What is the right appointment process? Who should be the appointing authority?  Should there be a consultative process in the matter of judicial appointments and who should be the participants in such process? Who will have the last word? Who will have the primacy in the consultative process? These are all questions which possibly have multiple answers.  Irrespective of the answers to each of the above questions, the fact remains that all the exercise is meant for finding out the best available material for manning the judicial system. All of us are aware of the fact - though most of us are not willing to speak - that the selection process leaves something more to be desired.  Whether we are really picking up the best possible or available material for the bench?  It is a question which each one of us will have to answer for ourselves. I believe that the best possible material perhaps is not being picked up for elevation to the bench. So how do you solve this problem? It is an eternal experiment and the eternal vigilance of the bar is the price. Unless the bar as a body is vigilant about it, unless the bar speaks up and expresses its views about the process, things will not change.

If you want, I will tell you an example.  A few years back I was in Gauhati. I was the chief justice of the high court, and a recruitment process took place for junior civil judges’ post. We had to select about 75 candidates to the post of junior civil judges. The selection process was concluded with a written examination and a viva voce programme. After the programme was concluded, I received a delegation from a particular organisation. For obvious reasons, I am not mentioning the names. The grievance of the organisation was regarding selection of 12 or 14 candidates who were not the “children of the soil”- who hailed from the other states and got selected.  According to the delegation, that resulted in depriving “the children of the soil” the opportunity of 12 or 14 appointments.  I tried to convince the members of the delegation that such an argument is impermissible under our constitutional scheme. On the other hand, it positively prohibits it.  Of course, the members of the delegation were not very convinced about it! But then they had no answer to it. At least, in law, there is no answer to it. Then the second reason I gave them is relevant for us:- that is, if these 12 or 14 candidates were ignored (for whatever reason), necessarily the next best had to be selected.  I told them that it was not going to be my problem. I would leave that court some day or other, if not immediately. (it took me three years to leave that court). But the bar would be stuck with those less qualified people; they will have to appear before those less accomplished judges and at some point of time, later the bar would complain that they have to appear and argue before substandard judicial officers for whose appointment only the bar would be responsible.

What happened thereafter is not relevant for our purpose. For various reasons we are not able to pick up the right persons, in the sense, the best persons. I am not saying all those who are picked up are not the right people, but there could be better choices. We invent hundred and one reasons for preferring the less than desirable candidates.
I think, the sooner we get rid of this, the better.  It is better for this country and the system.

Some nine years ago, I said on the diamond jubilee event of the gauhati high court as the chief justice of that court that I didn’t want to make any high sounding speech. I simply said that I want my children and grandchildren to live in this country with dignity, therefore I need to protect this institution. If each one of us remembers this fact, everything would be alright in this country. Somebody could be arrested by the police illegally.  Somebody could be robbed on his way back home.  Unless you have some system in place to protect you from such criminal activities, you will not be able to live in peace or with dignity in the country. Therefore, we need a good, clean, competent and efficient judiciary. And each one of us who is associated with the system at this stage owes an obligation, owes a duty to make every effort to establish or maintain such a judicial system.

Let us come to the topic of delays and better management of the legal system. Delay is a huge topic. There are innumerable reasons behind it.  It may not be possible to touch all of them, not necessary also in a book release function. One of the necessary or inevitable factors which contribute to the delay is the low level efficiency of the system, of the personnel which man the system.  When I talk about the personnel, I am talking about both the bar and the bench. The efficiency levels are not up to the requisite standard.  All of you are practising here. Just visit any court (in the supreme court) on any monday or friday. In my opinion, at least 60% of the cases which are brought before the supreme court on monday and friday should not have crossed the gates of the high court.

This country lived without a supreme court for a hundred years before the establishment of the supreme court. Very few matters went to the privy council, after the federal court came into existence, for various reasons – distance and expenses etc. But the point is not that.the high courts enjoyed such a status and such a prestige. The quality of the High Courts was such that in those years, in quite a large number of cases, people never thought of questioning the decisions thereafter. Today, the situation is different. All kinds of matters are brought before the Supreme Court. I am not blaming the litigant, he may have a genuine grievance. But the question is, can the supreme court handle all these? Is it possible in any country for the highest court to handle every legal problem occurring in the country, is the question. If we don’t devise a system, if we don’t improve the efficiency of the system to assure the litigant about the quality of the adjudicatory process and the efficiency and integrity of the system, the Supreme Court is bound to be flooded with litigation which it cannot handle. Bail applications, delay condonation petitions, panchayat and municipal ward elections disputes - everything has to come up to this court. It only speaks not very well of the efficiency of the system. On Bhagwan das road – undoubtedly you find some of the best lawyers in the country here - some of these brilliant lawyers will always be able to toss up some questions of law to be examined by the supreme court. 

At least in my view - some of my brothers may not agree with me - the supreme court cannot attend to every legal error committed by the system in this country. That’s not the job of supreme court. If the supreme court starts correcting every error committed by every judicial body or a quasi-judicial body in this country, it cannot do its job, i.e., constitutional adjudication - in one of my recent judgments (Reena Suresh Alhat v. State of Maharashtra & Anr.(2017) 3 SCC 119)  I quoted felix frankfurter  in whose view, the court would be failing in its larger duty as ultimate law giver of the country, if it will be settling individual disputes between the parties. But all this is happening because, all of us believe, at least lot of us believe, that the quality of the high courts, nowadays, is not good. I have heard quite a few people saying it. The question is how do we strengthen the high courts? How do we improve the quality? As I mentioned earlier, improvement of the quality of the institution necessarily starts from the improvement of quality of the bar. Until we attempt it, the improvement in quality will not come.

The management of the court is another problem. At various levels the management problem occurs. Management problems are inherent in the model which we adopted in this country. Since the highest court of the country sits in division benches- some 13 courts are sitting today - we are bound to have management problems. What is decided in the first court is not known to the second court on the same day. On the same day, on the same issue, there is possibility of two violently differing opinions coming out. This happens because we have adopted this model of division benches. How many cases are referred to larger benches every year on the ground that there are conflicting opinions on a particular question of law. That is the proof of the failure of management system or the shortcomings of the highest court. Because it is not just the supreme court; it is the highest court. If we have two conflicting judgments on any issue, the confusion percolates down creating more and more litigation. Because the moment you have two judgments, naturally lawyers will start relying upon those judgments and the judges at the high court and the subordinate courts will be wondering what to follow.

I shall tell you an anecdote which is a facially amusing but little deeper examination gives a sad story. It was almost a quarter century back. I was appearing in an election petition for the returned candidate. Incidentally it’s a matter of excitement for me those days. The returned candidate happened to be the then chief minister of Andhra Pradesh. His election was challenged on certain grounds (of corrupt practice). It was the 1983 election.1983-84 were eventful years. The chief minister decided to dissolve the assembly and go for a fresh election in 1985. Election was held. The old election petition was still pending. The matter was adjourned on a number of occasions for various reasons.  There was a preliminary objection which I raised in that matter based on the judgment of the supreme court in M.Karunanidhi v. H.V. Hande (1983) 2 SCC 473).           

Eventually after the 1985 assembly elections took place, the learned judge to whom the election petition was assigned, entertained a doubt in view of the dissolution of the assembly, whether the election petition was still required to be tried. I conceded that the matter had to be tried for the reason that there was an allegation of corrupt practice, and if proved, the chief minister was liable for disqualification. The learned judge had his own doubts. Because the disqualification is not automatic. Prior toMrs.Gandhi’selection case (1975), the disqualification was automatic.  The moment the high court recorded the finding that the returned candidate is guilty of corrupt practice, a disqualification from contesting any election for the next six years automatically followed. Post 1975, since an amendment was made to the representation of people act, the disqualification is made discretionary. Therefore, the learned judge desired to hear the attorney general and ordered notice to the A.G.

 Mr. Parasaran was the attorney general those days. He was busy – most probably with the bhopal gas case. There were two or three adjournments.  Finally Mr. Parasaran came. He told the court: that there was no choice but to try the matter.

 After the attorney general completed his submission, the learned judge asked him for a clarification.  The learned judge asked, “Mr.Parasaran, there is a preliminary objection in this election petition based on karunanidhi’scase delivered in the month of march 1983.  Some 6 months later in A.Madan Mohan v. Kalavakunta Chandrasekhara (1984) 2 SCC 288) on the same question, a view which is apparently conflicting with the view of Karunanidhi’sjudgment was laid down. What am I supposed to do sitting in the high court, with two conflicting views from the supreme court in the same year?” The brilliant attorney general Mr. Parasaran gave a very devastating answer. He told the court, “Your lordships are very lucky. There are two judgments before your lordships today, to choose. Your lordships may choose to follow either of them.  But more often I am confronted with a situation in the Supreme Court where I rely on the earlier part of a judgment and my opponent relies on the later part of the same judgment”. Mind you, he said it. I have no reason to tell you lies today! I don’t know whether Mr. Parasaran remembers it or not. I still remember.

This problem is inherent in a system where the highest court sits in division benches. That’s what I am trying to tell you.

There are lot of such issues which are required to be examined and attended to. Mr.Kaleeswaram raj has tried to highlight some of these problems. The questions are: where do you find the solution and who should find solutions and what is the role of the members of the bar in finding the solutions to these problems. These are the questions I would like to pose to you. I think I have taken sufficiently long time from you. I congratulate Mr. Kaleeswaram raj, I congratulate the publishers and I thank each one of you for bearing with me. Thank you all.

Foot Note:-

*speech delivered by hon’ble Mr.Justice Jasti Chelameswar, judge, supreme court of India, on the occasion of launching of book ‘rethinking judicial reforms: reflections on Indian Legal System’ authored by Mr.Kaleeswaram raj, advocate, at the Indian law institute on 21st March, 2017.

Cognizance on Yogic-Yama

(By A.M Asharaf, Judicial First Class Magistrate, Adimali)

Anger is undesirous wave of feelings or thoughts. Preasure emanated from litigation makes dust-noisy situation. Prudent and wise attempt of courts is not to keep its hands tied. Expectation of people for the performance of Justice, technological advancements and explosion of laws in every aspect of modern life have contributed sky rocketing the mental imbalance of legal professionals too. In coping up with balancing or regulating of such tensed situation, will be fair to the public and parties to the lis. Intelligently handling the situation is the key to diminish cloudy sky. It is incumbent on every lawyers, officer of the court to dilute any unpleasant tensed situation with his inborn talent with the parameters of law. Judges are not interested parties to the legal struggle and not fighting for their own power, but a voyageour through the sea of difficulties to reach at the destination of truth and realities. Lawyers butterfly, who put grains and chalff in the adjudicating or revolving drum by flight-fight journey. However, they too succor the courts in the truth finding process, though, clash for protecting interest, values, actions or directions and often spark of conflict between Bar & Bench. Thus, conflicts in the mindsetting can result stress or tension among all, which may expose conflict of interest, which may mould in to an actual or perceived opposition of need and values, its result may be the loss of equilibrium of body and mind.

‘Yogic Yama’ is a mental medicine, to control waves of thoughts. In other words, tools for anger pressure management or may be understood as the avoidance of undesirable realms . Desire to win a case and urge to defeat a party in the lis, are the main root of anger in the atmosphere of courts. One commonalities is that, in all, an element of undesirous wave of feelings would be in praesanti i.e., Anger. When things have gone wrong, desire become frustrate, anger emerges, such anger would be expensive also or rather, less mental fitness and variety of stresses. In these juncture we can’t think equally, as we think, the negative and positive thoughts may result at the same time in the mind.   Here, the breathing techniques can bring a balanced deep and rest.

The irate reactions likely to result from anger. There may be factors affecting Anger, such as ego, ignorance, vengeance or exceed love. The range of anger may not be uniform in the minds of every one as the anger waves are undulates. Yogic Yama deals with the thoughts of mind or control of anger waves. The thought waves may either be intense (rajasic) or very slow (tamasic). Tamasic waves of thought are dull and gross. Rajasic waves are intense, agitated state of mind.

When we breath through left nostril, the left brain will be active. It is analytical, mathematical, scientific is rajasic. When we breath though right nostrils, right brain will be active. It is phylosophical, devotional, compassionate, and used for emotions like love, hartedness etc. and it is tamasic. A proper Anger control or emotion management is a proper balance between the right and left brains. Here the concept of ‘Yogic Yama’plays a lot. In Yogic Yama this equilibrium can be called as an union of “Prana”and “apana” i.e., pranayama. I would call it as Yogic -Yama. When it survives in our profession then call it as Judicial Yogic Yama.

The following methods may be adopted for not being affected by anger

1. Inner silence (antar mauna)

2. Leaving that place

3. Drinking immediately ice water

4. Awareness about sense and situation

So also there are ways to control anger by walking, observing and doing interested things etc. All the above are Yogic practices, such as Meditation, Karmayoga, Pranayama, Kriyas. In the recent past all the stated above have proven to be victorious in the world. Every one of us, however great or small or sinner, rich or poor, king or begger strives for happiness. Because, We desire the pleasantness.

Third Party Funding in Arbitration

(By Saurabh Bhagotra, Solicitor, Zaiwalla & Co.)

Originally arbitration was designed as a more cost effective method of dispute resolution to litigation. Unfortunately high-value arbitration proceedings have ended up being quite expensive as they are often managed like a court case. A Claimant is at a disadvantage if he or she does not have the financial resources to instruct a team of lawyers to deal properly with the matter under arbitration. This goes against the principle of a right to justice for all.

To overcome the issue of risking its own finances or to obtain additional financing to pursue a legal action, an individual can approach a third party (with no prior connection to the case or party) to agree to finance all or part of its legal costs, in expectation of receiving a substantial percentage of a monetary order should the party be successful.

Third party funding for litigation has been in existence for a while, mainly for court litigation matters, in many jurisdictions including the United States, England and Wales, Australia, Netherlands, France. In January 2017, the UK Justice Minister, Lord Keen of Elie confirmed that the UK government has no plans to introduce laws to regulate the third party funders in the same way as law firms. However, in England and Wales, the Association of Litigation Funders has published its own self-regulated code of conduct to be abided by its subscribing members.

Singapore

In contrast to the UK, on 1 March 2017 Singapore took an important step in codifying the law on third party funding in arbitration claims (third party funding for litigation is still not permitted in Singapore.) The new regulation allows a party to approach a third party funder to finance an arbitration claim seated in Singapore, including related applications to the Singaporean court seeking interim relief, and for the enforcement of an arbitration award.

The significant amendment, and difference to the law in England, is to the professional conduct rules regulating the lawyers. Singapore lawyers are now obliged to disclose to the arbitral tribunal, and to every other party, the existence of a third party funding arrangement and the identity of their client’s funder. 

There is however some concerns with regards to the disclosure obligation imposed on the Singaporean lawyers which will need further clarification. They are:

What happens to the disclosure obligation when a party is not being represented by a Singaporean registered lawyer/firm and is acting as a litigant in person, and is therefore not required to comply with the professional code of conduct?

If a party is represented by a foreign lawyer who is not registered or practising in Singapore, does that foreign lawyer have to comply with the disclosure obligations contained in the professional conduct rules regulating only Singaporean registered lawyers?  

Any additional disclosure obligation to disclose funding arrangements will likely increase the legal costs incurred by a funded party to comply with such requirement. It is also not yet clear whether these costs including additional costs to retain a funder are recoverable as the ‘costs of the Arbitration’ under these new regulations. (In Essar Oilfields v Norscot, the English High Court did allow a party to recover the costs of obtaining a third party funder).

There may be drawbacks to third party funding but it will no doubt protect smaller businesses by putting them in a position to hire a reputable law firm (domestic or foreign) without risking its limited funds.

There may be drawbacks to third party funding but it will no doubt protect smaller businesses by putting them in a position to hire a reputable law firm (domestic or foreign) without risking its limited funds.There is no doubt that the Singapore government has introduced these rules to increase Singapore’s attractiveness as the seat of arbitration, and to topple England from its preeminent position as an international arbitration hub. These recent reforms will allow parties to access diverse range of funding options to pursue arbitrations claims seated in Singapore and will also ensure that transparency is maintained between the litigating parties.

Foot Note:

If you would like further information on this topic, or require advice in relation to third party funding arrangement for your legal matter, please contact our team at info@zaiwalla.co.uk