Swiss Bank Account and the Rule of Law 

(By K. Ramakumar, Sr.Advocate, High Court of Kerala)

The House of Lords, the highest justicing body in historical England has preferred national security and threat to the Britishers on British streets to the rule of law. This astounding declaration coming from the mother country of the rule of law has astonished many. Our Bhagat Singh was hanged by the Britishers in the name of rule of law. So was Veera Pandya Kattabomman. Yet, that court has now capitulated reversing the Divisional Court on the ground of a threat from a foreign country against detection of fraud in a Swiss Bank Account (See 2008 (4) All E.R. 927).

Remember ADM., Jabalpur ?

A Serious Fraud Office is functioning in England under the superintendence of its Director and the Attorney General of England. It started an investigation into the allegations of bribery by a Defence and Aerospace Company in relation to military aircraft contracts with Saudi Arabia. As the enquiry progressed, Prince Bandar bin Sultan bin Abdul Aziz of al Saud, ordered : - “Get it stopped”, and threatened that the Typhoon Contract was going to be stopped and the intelligence and diplomatic relations would be pulled. The Director of S.F.O. and the Attorney General succumbed to the pressure and decided to discontinue the investigation. The Corner House Research, a nonprofit making organization, sought judicial review of that decision before the Divisional Court. On the argument of the Crown, Moses Lord Justice declared :-

“So bleak a picture of the impotence of the law invites at least dismay, if not outrage. The danger of so heated a reaction is that it generates steam; this obscures the search for the legal principle. The challenge, triggered by this application, is to identify a legal principle which may be deployed in defence of so blatant a threat. However abject the surrender to that threat, if there is no identifiable legal principle by which the threat may be resisted, then the court must itself acquiesce in the capitulation.”

The conflict was between the rule of law and threat of a foreign country to pull off not only a defence deal but the diplomatic relations as well. It was clearly a threat to the administration of public justice within the United Kingdom. The words of Lord Justice Simon Brown in 1995 (3) All E.R.37 were quoted :- 

“One thread runs consistently throughout all the case law: the recognition that public authorities must beware of surrendering to the dictates of unlawful pressure groups. The implication of such surrender for the rule of law can hardly be exaggerated. Of course, on occasion, a variation or even short-term suspension of services may be justified. As suggested in certain of the authorities, that may be a lawful response. But it is one thing to respond to unlawful threats, quite another to submit to them - the defence, although perhaps difficult to define, will generally be easy to recognize. Tempting though it may sometimes be for public authorities to yield too readily to threats of disruption, they must expect the courts to review any such decision with particular rigour - this is not an area where they can be permitted a wide area of discretion. As when fundamental human rights are in play, the courts will adopt a most interventionist role”.

Lamented Lord Justice Moses: -

“The constitutional principle of the separation of powers requires the courts to resist encroachment on the territory for which they are responsible. In the instant application, the Government’s response has failed to recognize that the threat uttered was not simply directed at this commercial, diplomatic and security interests; it was aimed at its legal system.”

The rule of law enforced by the courts, it was held, is the ultimate controlling factor on which the Constitution is based. How the courts protect law by ensuring the independence of the decision maker free from pressure and threat was emphasized by the Divisional Court. The court held: -

“The courts are entitled to exercise their own judgment as to how best they may protect the rule of law, even in cases where it is threatened from abroad. In the exercise of that judgment, we are of the view that a resolute refusal to buckle to such a threat is the only way the law can resist.”

“Surrender deprives the law of any power to resist for the future. In Ex. P. Phoenix Aviation (1995) 3 All E. R.37 at 62, Simon Brown, L.J., criticized the public authorities who failed to consider what he described as ‘the awesome implications for the rule of law’, and inevitable impact upon the ever more enthusiastic future conduct of the protestors. The context of the threat, in the present case, was the investigation of making bribes to foreign public officials, an offence introduced in 2001. If the Government is correct, there exists a powerful temptation for those who wish to halt an investigation to make sure that their threats are difficult to resist. Surrender merely encourages those with power, in a position of strategic and political importance, to repeat such threats, in the knowledge that the courts will not interfere with the decision of a Prosecutor to surrender. After all, it was that appreciation which, no doubt, prompted the representatives of the Saudi Arabian Government to deliver the threat.”

It was emphasized that courts and lawyers have a duty to prevent surrender to the threats to the rule of law to prevent what happened in Fiji, Pakistan and Uganda. See the observation : -

“Our courts and lawyers have the luxury and privilege of common law and statutory protection against power which threatens the rule of law. All the more important, then, that they provide support and encouragement to those in a less happy position. How do they do so, if they endorse surrender, when in Uganda the courts are forced to resist when those whom they have released on bail are re-arrested on the court room steps by armed agents of the executive or when the Chief Justice of Fiji and Pakistan are deposed by military rulers?”

Ultimately, rejecting the theory of State necessity, the Divisional Court upheld the challenge to the decision of the Director and its affirmation by the Attorney General.

Significantly, the House of Lords reversed the decision of the Divisional Court, of course with reluctance. Lord Bingham took note of the strange circumstances : -

“The Director was confronted by an ugly and obviously unwelcome threat. He had to decide what, if anything, he should do. He did not surrender his discretionary power of decision to any third party, although he did consult the most expert source available to him in the person of the Ambassador and who, however, properly left the decision to him. The issue in these proceedings is not whether the decision was right or wrong, nor whether the Divisional Court or the House agreed with it, but whether it was a decision which the Director was lawfully entitled to make. Such an approach involves no affront to the rule of law, to which the principles of judicial review give effect. (See R on the application of Alconbury Developments Ltd. v. Secretary of State for the Environment, Transport and the Regions (2001) UK.....2 All E.R. 929 at 73 (2003) 2 AC 295 per Lord Hoffman).”

Baroness Hale of Richmond expressed her helplessness in the matter in the following words: -

“My Lords, I confess that I would have liked to be able to uphold the decision (if not every aspect of the reasoning) of the Divisional Court (2008) EWHC (Admin). (2008) 4 All ER 927). It is extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort.”

She noted the consequence of risk to British lives on British streets, and concurred to reverse the Divisional Court.

The House was confronted with a situation of a clear conflict between the rule of law and a threat from an ally country of stiff diplomatic measures in case the fraud continued to be investigated. The Apex Court of England ruled that the decision of the Attorney General and the Director of S.F.O., cannot be faulted on the principles of judicial review and the exercise of discretion by them cannot be interfered with by the House.

What a sad thing to happen in the country of Lord Atkin !

Some Thoughts on Vasanthakumari and Joint Transfers

(By K.G. Balasubramanian, Advocate, High Court of Kerala)

I read 2009 (3) KLT 43 - Vasanthakumari v. Omanakkuttan Nair - with genuine interest. I was reminded once again of the resplendent glory of Transfer of Property Act that has survived 1947 followed by “We, the People”, KLR Act etc. It was nostalgic to come across a provision almost obscured by desuetude, hesitantly waking up, unlike some distant cousins in the Contract Act. When I say obscured, I do not mean just by time, but by legislative changes in these unjust times.

I have always been in envious awe of the last 3, 4 generations of lawyers who had grand legal encounters in courts, with uncanny sense of law and logic, developing the perfect, if not faultless, legislations of 19th century and early 20th, leaving legal classics in their wake for new generation lawyers like me to gloat over, that “this is My Past”.

Too bad, I felt, Vasanthakumari had no opposition. Did poor Omanakkuttan think a walk over would not be granted? But, a walk over Vasanthakumari did have, despite the learned Judges’ initial unwillingness.

But, Sir, did I notice correctly? I feel, the learned Judges would have probably disappointed Vasanthakumari had “The Benami Transactions (Prohibition) Act, 1988” been brought to their notice.

In that Act, unless the context otherwise requires, “Benami transaction” means any transaction in which property is transferred to one person for a consideration paid or provided by another person. S.3(2) provides that nothing in sub-s.(1) shall apply to 

(a) the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter;

(remainder of the section omitted for the purpose of this dissection). 

S.4 provides that (1) “No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.

(2)  No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.

(3) Nothing in this section shall apply, -

(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or

(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.

Now, I have my own impression that challenge of gender discrimination apart, there is no reason to exclude husband and son from S.3(2)(a). Family Courts Act does not create any new right, except as to procedure and jurisdiction for enforcement of rights under existing laws. The facts narrated in the judgement do not, to my notice, make out a case u/S.4(3)(b) for Vasanthakumari. She can be only in S.4(1), (2) situations.

Oh, Vasanthakumari,

Daughter of Spring,

Love withered,

Law weathered,

You did bring Spring,

Without the fragrance

Of roses and lilies!

I remain

Yours contentiously 

Awaiting Autumn

That is mine!    

Verdict on a Judgment

(By T.P. Kelu Nambiar, Sr.Advocate, High Court of Kerala) 

Some well-meaning lawyer-friends asked me: “Why are you keeping a stiff upper-lip, and your blue pencil at rest, on the current controversial question of primacy of the Chief Justice of India in the context of appointment of Judges of the Supreme Court and the High Courts, the Park Avenues of Justice. Why don’t you speak out. Your opinion, perhaps, would be an ‘open sesame’ to the topic. You are not a ‘wounded lawyer’, awaiting the boon of all-merciful healer-time. Though I live a life on my own terms, I was provoked. It was a slap on my wrist. It tickled my funny bone. I thought, I should open up and wag my pencil, because I am asked to write for the legal fraternity, not for thriller-readers; and I am no Dan Brown to write a ‘Da Vinci Code’.

Reversing the normal process, with the utmost respect I start with the conclusion that the decision of the majority, of the nine-Judge Bench, in Supreme Court Advocates-on-Record Association case ((1993) 4 SCC 441) is not correct. (Mark, the Bench did not arrive at a collective conclusion.)

The majority (of seven learned Judges) have travelled through one-hundred-and-fifty printed pages to come to the conclusion that ‘no appointment of any Judge to the Supreme Court or any High Court can be made, unless it is in conformity with the opinion of the Chief Justice of India’. The dissenting view (of two learned judges) that ‘as regards primacy to be accorded to the view of the Chief Justice of India vis-a-vis the President, i.e. the executive, although his views may be entitled to great weight, he does not enjoy a right of veto, in the sense that the President is not bound to act according to his views’, was arrived at, in about seventy-five pages. (I write for those who have read the decision in full.)

I shall not make a lengthy travel with my blue pencil to endorse the conclusion come to by the ‘dissenting Judges’. I am not scripting an Ode to Judge-selection.

Neither the straight text nor the clear meaning of Arts.124 and 217 of the Constitution is capable of being read and interpreted to mean that the opinion of the Chief Justice of India is the final word. The references made by the majority to various ‘authorities’ only show that the primacy of the Chief Justice of India would be ideal. The majority kept out of mind that the Constitutional provisions are being interpreted, not reconstructed. The ‘wish’ of the majority alone is reflected in their opinion, not the ‘meaning’ of the Constitutional provisions.

It needs little emphasis to clarify that the Debates of the Constituent Assembly are unlike proceedings of the Parliament and Legislative Assemblies, or the Objects and Reasons of a legislation, or an Explanatory Note to statutory Rules. The Debates reveal the meaning and intention of an Article as finally adopted. The Constituent Assembly was composed of the “freely chosen representatives” of the people of India, as desired by Mahatma Gandhi, far back as 1922. The desire of the Mahatma was affirmed, from time to time, by various public bodies and political leaders, and the idea of Constituent Assembly had come to prevail largely as an ‘article of faith’ in almost all the politically-minded classes of the country. The address, on the 9th December 1946, (when, at eleven of the clock, the Constituent Assembly of India first met), of the Provisional Chairman Dr. Sachchidananda Sinha ‘to the Indian people’ reveals the constitution, nature and importance of the Constituent Assembly. The members of the Constituent Assembly were ‘great names’. The Supreme Court was not seen taken through the speech of Dr.Sachchidananda Sinha, and the ‘great names’. I hold the firm view that when one entertains a doubt regarding the meaning of a constitutional provision, the Debates of the Constituent Assembly are the sure guide.

Arts.124 and 217 are the Articles dealing with appointment of Judges of the Supreme Court and the High Courts, respectively. Those portions of these Articles, relevant for the present purpose, may be read here

 “124.... (2) Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal after consultation with such of, the Judges of the Supreme Court and of the High Courts in the States as the President may deem necessary for the purpose and shall hold office until he attains the age of sixty-five years”. 

“Provided that in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of India shall always be consulted”.

“217.....(1) Every Judge of a High Court shall be appointed by the President by warrant under his hand and seal after consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court, and shall hold office, in the case of an additional or acting Judge, as provided in Art.224, and in any other case, until he attains the age of sixty-two years”.

The Draft Article before the Constituent Assembly corresponding to Art.124 was Art.103; and the Draft Article corresponding to Art.217 was Art.193. The Constituent Assembly Debates reveal the attention and anxiety bestowed upon framing these Articles. Several amendments were moved. Some members moved amendments on the lines of giving primacy of views, in the appointments, to the Supreme Court/Chief Justice of India. Winding up the proceedings, Dr.Ambedkar said, after an elaborate exposition of the features involved:

“With regard to this matter, I quite agree that the point raised is of the greatest importance. There can be no difference of opinion in the House that our judiciary must both be independent of the executive and must also be competent in itself. And the question is how these two objects could be secured. There are two different ways in which this matter is governed in other countries. In Great Britain the appointments are made by the Crown, without any kind of limitation whatsoever, which means by the executive of the day. There is the opposite system in the United States where, for instance, offices of the Supreme Court as well as other offices of the State shall be made only with the concurrence of the Senate in the United States. It seems to me, in the circumstances in which we live today, where the sense of responsibility has not grown to the same extent to which we find it in the United States, it would be dangerous to leave the appointments to be made by the President, without any kind of reservation or limitation, that is to say, merely on the advice of the executive of the day. Similarly, it seems to me that to make every appointment which the executive wishes to make subject to the concurrence of the Legislature is also not a very suitable provision. Apart from its being cumbrous, it also involves the possibility of the appointment being influenced by political pressure and political considerations. The draft article, therefore steers a middle course. It does not make the President the supreme and the absolute authority in the matter of making appointments. It does not also import the influence of the Legislature. The provision in the article is that there should be consultation of persons who are ex hypothesi, well qualified to give proper advice in matters of this sort, and my judgment is that this sort of provision may be regarded as sufficient for the moment.

“With regard to the question of the concurrence of the Chief Justice, it seems to me that those who advocate that proposition seem to rely implicitly both on the impartiality of the Chief Justice and the soundness of his judgment. I personally feel no doubt that the Chief Justice is a very eminent person. But after all, the Chief Justice is a man with all the failings, all the sentiments and all the prejudices which we as common people have, and I think, to allow the Chief Justice practically a veto upon the appointment of Judges is really to transfer the authority to the Chief Justice which we are not prepared to vest in the President or the Government of the day. I therefore, think that is also a dangerous proposition”. 

The views of Dr.Ambedkar are reflected in Arts.124 and 217. I am sure, I follow.

The majority of the Judges, constituting the Constitution Bench, has laboured much to come to the view that primacy should be accorded to the views of the Chief Justice of India. The decision is not what the Articles mean, but what the Articles should have been, or should be. This, with great respect, is not interpreting the Articles, but constructing entirely different Articles, which is not the function of the Court. There was an indication in the speech of Dr.Ambedkar that the question of variation in Arts.124 and 217 could, be looked into at a later stage. It is not for the Supreme Court to finalise the variation. The Supreme Court could have suggested the variation for the consideration of the Government.

I, too, can deliver verdict. One fears only that which he does not understand. I do not want to win. I prefer not to lose. This is a creative writing, which I love. I do not want this write-up to be protected under patent. Nor have I obtained letters patent therefor. Anybody can do anything with this. I simply believe my own opinion. It is not my habit to whisper. I proclaim aloud I do not use spiritual vocabulary while scripting on a subject like this. Articles 124 and 217 are verily Articles without multiple layers of meaning. Those Articles are misjudged and misinterpreted, is my respectful view. I should think, I have not made an odd choice of vocabulary. I underline the concluding remarks of Dr.Ambedkar, the Indian Tribonian, and the contributions of Sir B.N.Rau, who compiled and consolidated the legal code of India, that is, the Constitution of India.

The Constitution of India is not the magic of many. It is a product of hard, diligent, untiring, remarkable and intelligent labour of the Constituent Assembly of India, which was composed of ‘great names’, and which occupies the place of first glory. Every lawyer should remember what somebody said: ‘What do they know of English Law, who only English Law know’; and should realise: ‘What do they know of Constitutional Law, who only Constitution of India know’. Lawyers should have close acquaintance with the Debates of the Constituent Assembly. The Constituent Assembly is a ‘Foundation’ in the names of those who constituted it, unlike a court, which is not a foundation in anybody’s name, alive or dead. And, that is that. 

The ‘judicial’ tear in the fabric of the ‘People’s Constitution needs urgent ‘legislative’ darn. I call immediate attention of the Union Government to repair the damage and restore the pristine look. I am sure, the Government would realise that the Constitution, of ‘We, the People of India’, is not a mere play of Squirrel Nutkin and Tom Kitten.