"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Friday, October 31, 2008

Financial News

Insurers move into T-bills, certificates of deposits
Why weren’t the rating agencies up to grade?
$2.83 b raised via ECBs

News and Views

Reoprt on Cash for Vote Scam Finalised
Reportedly a divided stands taken by the members and seeks for further investigation. The scam was an added blot on the democratic India. A no-confidence motion and political cartwheels, which once again proved that there are no permanent friends and foes in party politics, served whose interest? The core but forgotten issues but India's sovereignty and right to self-determination( in the backdrop of Nuke deal) and the power of the executive to sign treaties and agreements without parliamentary sanction or approval. The winning of motion (by whatever means) made the government forget it promises to discuss the matter in the House or it simply find this unnecessary. My be absolutely unnecessary after the move for privilege motion was ruled out on the technical reason that PM is not a member of the Lok Sabha.

India Opposes Putting Asbestos in Hazardous List

The rest recognises it as a threat and want to get rid of it. Where to dumb this hazardous substance, should have been a major problem but now have an easy solution. When countries like India are ready to invite these substances in, why should such a question bother the developed world. India boasts about a green bench in SC and dedicated ministries for environment at central and in certain states. It has laws to deal with environmental issues, though its adequacy and effect may be questioned. The news clearly indicates whose interest the delegates were serving by opposing the inclusion of asbestos in the hazardous substance list and at whose cost. Any way, life comes cheaper in India.

SC on Appreciation of Evidence When Eye Witnesses Tender Inconsistent Versions

Take on Narco Test by the Committee of Lok Sabha MPs Probing the Cash-for-Votes Scandal

Wednesday, October 29, 2008

Financial News

Falling oil prices: Grab the opportunity for reform
A crisis on all streets
Socialism to save capitalism!
‘No proposal for hiking OVL’s investment limit now’
CII for cut in interest rates, focus on growth
Sikkim taking banking to every household

News and Views

Word of Caution from CAG on NREGA
NREGA is also facing the same destiny of most of the government run benefit programme for the deserving. The report of the CAG highlights; under utilisation of funds, delayed or non- payment, inadequacies in maintenance of records and lack of accountability, as some of the reasons. These reasons are not new, they are the very same that plague every scheme of the government, whichever ministry be in charge. Despite such remarks time and again by CAG and other audit offices, if things do not change, it is time to rethink about how we react to these reports. Are they forming part of just another file or is there any action taken on such report. Seldom do we here that action has been taken on the finding of CAG. Without paying due attention to the recurring failure factors of the government sponsored programmes, pumping in more money or announcing more schemes would not 'ameliorate the poor' as every other scheme claim to be.

Law Commission Suggests Registration of Marriages and Divorces

See the report here.

Marriages and divorces being a domain under personal law has always been sensitive. The proposals for registration of marriages through civil adminstration have faced criticisms or apprehensions from certain quarters. This suo motu suggestion of the Law Commission need to be brought to public discsussion and opinion should be formed. Marriages and divorces do not rest only in the relgious turf but involves soical and legal issues. A law that could address these concerns need to be brought in without hampering any of the rightful religious elements involved within.

Panel: Why Shroud Judges’ Appointment in Secrecy?

It has been said 'sunlight is the best disinfectant'. Then why shouldn't sunlight flow through the process of judicial appointment, which admittedly is infected. Independence of judiciary is a crucial aspect for the survival of any polity and an indispensable aspect of constitutionalism. All discussion of independence and accountability of judiciary ought to start from the appointment of judges. Information regarding the appointing process is part of the right to information of any citizen of India. It is this right that need to be jealously guarded not the current maintenance of the secrecy shrouding the judicial appointment.

From EPW

Review of the National Policy for Urban Street Vendors
This commentary analyses the reasons for the failure of the policy is making any positive changes in the existence of the street vendors, who have defenite place in the urban economy. They still face the harassment by authorities and deprivation of their findamental rights. To the author, the policy failed in in more than one count, lack of a time frame to translate the policy into reality being the foremost. Want of realistic approach, unenthusiastic apporoach of the governments bolstered by the approach of policy to palm off most of the governmnet's duties to NGO's, non action on the pormised changes in IPC, which enable the police to extort the hawkers figure as other reasons for failure. The existing urban local laws are not in tune with the policy and need amendments to be in harmony with the policy.
Where Law and Research Intersects
See also here. Text of the Bill available here.
Post-script on Singur

Saturday, October 25, 2008

From the Supreme Court of India

Illustration for an Entangled Legal Web
Chinnakarupathal v. A.D Sundarabai Civil Appeals Nos. 5267-69 OF 2002.
Decided on 24-10-08
A cause of action that began its life pre- independance and carried through three generations was decided yesterday by the SC, hopefully in finality. The cause of action for this civil suit began in 1946 by non payment of a sale price. The decree of the sub- court was reversed later by the HC. Meanwhile, the decree holder had already availed the decree amout on furnishing guarantee of the current suit propoerty and absocnded. The guarnateed property was auctioned and the legal heirs of the auctioned property through this extended legal battle is trying to get back the property and in final attempt to bring it under the the provisions of the Tamil Nadu Agriculturists Relief Act, 1938. The appeal is rejected by the SC.
The Review Power of the Government to be Used within Reasonable Time
M.P. Housing Board v. Shiv Shankar Mandil Civil Appeal Nos. 3840-3841 of 2001. Judgment dated 24-10-08
This depicts the plight of an entreprenuer who proposed to commence an industrial unit in 1991 and till yesterday was fighting a battle to enjoy the lease hold which was granted by one department of the government and objected by another after the grant and the execution of the deed. The idustrial depratment granted the lease but the M.P Housing Board chose to object it as the Survey Number was in the middle of a residential plan of the Board.
The collector found it relevant to review his decision of grant of leas after lapse of three years. Meantime the first repsondent herein had already started construction. The case reached the HC and the repsondent got a favourable order both from the single and division bench. Against the order of which, this appeal is filed.
Besides the technicalities involved in the revenue lands and its management, this case deals with the effect of delay in reviewing its own decision by the government and held that such delay could be fatal and found the case in favour of the respondent.

Impact of Re- Assessment Order

M/s Kanpur Edibles Pvt. Ltd. v. Commissioner, Trade Tax, U.P. Civil Appeals. Decided on 24-10-08

The effect of re-assessment order on the earlier order is the issue of determinatin in this case. Previosly decided case by the SC, [M/s Kundan Lal Srikishan, Mathura (U.P.) v. Commissioner of Sales Tax, U.P. and Anr. (1987 (1) SCC 684)] and the later amendment to the U.P Sakes Tax Act to get over the judgment is the issue herein.

Relevant part of the judgment in given below

"8. It is to be noted that in Kundan Lal's case (supra) it was observed that on initiation of the re-assessment proceedings the original order of assessment becomes inoperative. But Explanation III to sub-Section (1) of Section 21 makes the position clear that where an order of assessment or re-assessment is in existence before the issuance of the notice under sub-section (1) it continues to be effective as such until varied by an order of assessment or re-assessment made under Section 21 in pursuance of that notice. In other words, an order of assessment or re-assessment which was in existence at the point of time the notice was issued, continues to be effective unless it is varied. If it is not varied it goes without saying that it continues to be operative and effective. The period for making assessment or re-assessment is provided in sub-section (2) of Section 21. The period fixed for making assessment or re-assessment under any provision of the Act for any assessment year is two years from the end of the concerned assessment year. However, this period can be extended in terms of the proviso to sub-section (2) if the Commissioner on his own or on the basis of reasons recorded by the assessing officer is satisfied that it is just and expedient to do so to make the assessment or the re-assessment after the expiration of the period provided in sub-section (2) but in any event not after the expiration of 4 years from the end of such year notwithstanding that such assessment or re-assessment may involve a change of opinion. In other words, the maximum period available for making assessment or re-assessment is 4 years from the end of the assessment year in question. That is no exception to this position because sub-section (2) of section 21 itself provides that such assessment or re-assessment may be made under any provision of the Act which includes Section 10-B. ... The Commissioner or the authorized officer is empowered to pass such order with respect thereof as he thinks fit. The crucial expressions in Section 10B(1) are "for the purpose of satisfying himself as to the legality or propriety of such order" and "with respect thereof".

In the present case what the revisional authority was empowered to test was the legality or propriety of the order cancelling the notices issued under Section 21(1) by order dated 29.5.2003. Such an exercise cannot encompass an order of assessment. It is of significance to note that the original orders have not been varied and could not have been varied after the period of limitation. What could not have been directly achieved has been attempted to be done in an indirect manner. If the revisional authority was of the view that the order dated 29.5.2003 was not legal, then that order would have been varied if it was found that order lacked legality or propriety. The expression "with respect thereof" makes the position clear that for testing the legality or propriety of the order (in the instant case the order dated 29.5.2003) if any order was to be passed that had to be passed with respect thereof. Such an order does not empower the revisional authority to make an order of assessment. As noted above, what the revisional authority has done is to substitute the original orders of assessment in the garb of testing the legality and/or propriety of the order cancelling the notices. Such a course is not countenanced and has no legal basis. Therefore, the High Court was not justified in interfering with the order of the Tribunal. The impugned orders of the High Court are set aside and the appeals are allowed but without any order as to costs."

Principles to be Followed in Dealing With Appeal Against Acquittal

State of Maharashtra v. Ahmed Shaikh Babajan Criminal Appeal Nos. 25-29 of 2002. Decided on 24-10-08

The following are the general principles regarding powers of the appellate court while dealing with an appeal against an order of acquittal:-

This was held in Chandrappa & Ors. Vs. State of Karnataka

"(1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded.
(2)The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law.
(3)Various expressions, such as, "substantial and compelling reasons" "good and sufficient grounds", "very strong circumstances", "distorted conclusions", "glaring mistakes", etc. are not intended to curtail extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of "flourishes of language" to emphasise the reluctance of an appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion.
(4) An appellate court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court.

(5)If two reasonable views are possible on the basis of evidence on record and one favourable to the accused has been taken by the trial court, it ought not to be disturbed by the appellate court."

Friday, October 24, 2008


UK Law Firms in India

Decriminalisation of Suicide See the 210th Report of the Law Commission here

Relief for Dismissed Godhra Cops

Vacancies in the Higher Judiciary

Cash for Judge Scam

South Korean Military v Chomsky?

Supreme Court on Withdrawal Cases Under POTA

Ghost of a Law


The case came up before the Supreme Court as Criminal Appeals. The appellants are categorised generally into two; relatives of the victims of the unfortunate incidents at Godhra and Akshardham temple carnages, and those who are accused under POTA. The Act provides for the setting up of Review Committees (RC) to look into the abuses of the legislation. If the RC, on review, finds that a charge made against an accused prima facie is unsubstantiated, it can recommend withdrawal of the case under section 60 of the Act. This provision was challenged before the HC of Madras earlier as the power of RC is an interference by the executive in the judicial power and that the direction by the RC to withdraw proseccution is an interefence with the right of the state to prosecute an offence. The HC upheld the validity of the provision highlighting that RC’s recommendation has to go through section 321, Cr.PC procedure for withdrawal of cases and judicial scrutiny therefore is ensured that it will not amount to meddling with judicial power. SC had later affirmed the HC's decision in appeal.

In the present case the relatives of the victims are arguing that section 2(3) of the POTA Repeal Act, shall be held unconstitutional as it interferes with judicial power. The claim of the accused under POTA is that section 2(3) shall not be made subject to section 321 Cr.PC.

This appeal arise from the order of the HC of Gujarat upholding the constitutional validity of section 2 (3) of the repeal Act. HC held that section 2(3) is in pari materia with section 60 (4) to (7), the constitutional validiy of which has been upheld already. As also section 2 (3) shall be subjected to section 321 Cr. PC for the same reason of the same language used in both sections and previous SC decision.

Question of Law and Issues

i) Whether sub-section (3) & (5) of section 2 of the Repealing Act are unconstitutional and therefore invalid; and (ii) Having regard to section 2(3) of the Repealing Act, when the Review Committee records an opinion that there is no prima facie case for proceeding against the accused under POTA, whether the proceedings shall be deemed to have been withdrawn against such accused or whether it is necessary for the Public Prosecutor to file an application seeking consent of the court for withdrawal from prosecution under Section 321 of the Code.


On Constitutional Validity: The court upheld the constitutional validity of the provision. There are two judgments in the case. One by CJI and the other by Justice Dalveer Bhandari, concurring but offering different rationale. CJI finds that there should be different appreciation of a ‘live and current’ legislation and one that is being ‘wound up’ ie. a repeal enactment, while determing their constitutional validity.

Following referral points were set by the CJI to determine the constitutional validity

"(a) Parliament has the exclusive competence to legislate on terrorism and terrorist and disruptive activities which threaten the security, integrity and sovereignty of the country, as they fall under Entry 1 of List I of the Seventh Schedule to the Constitution. Alternatively, they would fall under the residuary power conferred on Parliament under Article 248 read with Entry 97 of List I of Seventh Schedule (vide Kartar Singh v. State of Punjab - 1994 (3) SCC 569).

(b) There is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it, to show that there has been a clear transgression of the constitutional principles. (Vide State of Jammu & Kashmir vs. Triloki Nath Kosha - 1974 (1) SCC 19)

(c) A law made by the Parliament can be struck downby courts on two grounds and two grounds alone : (1)lack of legislative competence; and (2) violation offundamental rights guaranteed under Part-III of theConstitution or any other constitutional provision. Thereis no third ground. (Vide State of Andhra Pradesh vs.Mcdowell & Co. - 1996 (3) SCC 709).

(d)The power and competence of Parliament to makelaws in regard to the subjects covered by the legislativefields committed to it, carries with it the power to repeallaws on those subjects. The power of the Parliament torepeal a law is co-extensive with the power to enact sucha law. (See Justice G.P. Singh's Principles of StatutoryInterpretation - 11th Edition, Page 633).

(e)The Legislature may prescribe special procedure tomeet special situations and to meet special objectives solong as they are not arbitrary or discriminatory. [KathiRaning Rawat v. The State of Saurashtra - 1952 SCR 435and In Re : The Special Courts Bill, 1978 - 1979 (1) SCC380].

(f) If any Central Act is repealed, without making anyprovision for savings, the provisions contained in section6 of General Clauses Act, 1897 will apply. But where the repealing Act itself contains specific provisions in regard to savings, the express or special provision in the Repealing Act will apply. Section 6 of General Clauses Act makes it clear that it will not apply, when a different intention appears in the Repealing Statute. Where the provision relating to savings is excluded, the repeal will have the effect of complete obliteration of the statute. (vide State of Orissa v. M.A.Tullock & Co. - 1964 (4) SCR 461, Nar Bahadur Bhandari v. State of Sikkim - 1998 (5) SCC 39 and Southern Petrochemicals Industries Co. Ltd. v. Electricity Inspector - 2007 (5) SCC 447)."

The power of the parliament while enacting repeal legislation and the effect of it is summarised by the CJI. It is said that the parliament have plenary power to repeal any statute and it will be inapplicable for all future purposes, and can wipe out rights accrued and pending proceedings under the Act, if saving clause is specifically excluded. The logic flows from this is that, when parliament have the outright power to repeal an Act without any saving, obliterating all pending proceedings, it very well have the competency to enact a repeal legislation that can put stop to proceeding abruptly, in this case, on the recommendation of the RC. Therefore, the determination of the issue is done as given below:

“Natural consequence of repeal, as noticed above, is complete obliteration including pending proceedings. Continuation of a pending proceeding is possible only on account of the deeming fiction created by the savings clause in the Repealing Act which provides for continuation of the proceedings as if the Principal Act had not been repealed. Therefore any provision in the Repealing Act for having a pending proceeding, with any further provision for termination of such pending proceedings, is a provision relating to `winding up' matters connected with the Repealed Act. By no stretch of imagination such a provision can be termed as interference with judicial power, even assuming that such a provision in a live unrepealed statute may be considered as interference with judicial power.”

On Subjecting Section 2 (3) to Section 321 Cr. PC: The legislative intent on the application of section 2(3) is clear to the effect that there is no requirement of subjecting this section to section 321 Cr.PC. The logic offered is that, if section 321 requirement is made applicable, the effect of deemed withdrawal provided in secction 2 (3) will be rendered nugatory. That for the court, will amount to rewriting of the provision.

On Lack of Judicial Supervision on Withdrwal of Cases: The contention by the realtives of the victims that there will be no judicial supervision for withdrawal of cases, is negatived the court. The existnece of writ jurisction and appellatte jurisdiction under Article 136 for the court will address the issue.

Court makes a distinction between the scheme of the POTA section 60 with section 2 of the repeal Act to overrule the HC judgment which has made section 2(3) subject to section 321 Cr. PC. The reasoning of the HC was that the SC in a earlier case had determined that withdrawal of complaints under section 60 shall be as per the requirement of the section 321. Section 60 and 2 are pari materia. Therefore section 2(3) is suject to section 321.

The Final Decision in Court's Own Words; "[w]e therefore hold that once the Review Committee on review under section 2(3) of the Repealing Act, expresses the opinion that there is no prima facie case for proceeding against the accused, in cases in which cognizance has been taken by the Court, such cases shall be deemed to have been withdrawn. The only role of the Public Prosecutor in the matter is to bring to the notice of the court, the direction of the Review Committee. The court on satisfying itself as to whether such an opinion was rendered, will have to record that the case stands withdrawn by virtue of section 2(3) of the Repealing Act. The court will not examine the correctness or propriety of the opinion nor exercise any supervisory jurisdiction in regard to such a opinion of the Review Committee. But we make it clear that if the opinion of the Review Committee is challenged by any aggrieved party in writ proceedings and is set aside, the Court where the proceedings were pending, will continue with the case as if there had been no such opinion."

SSRN Articles

Arbitration is a creature of contract. It is a mode of dispute resolution which is only available to parties who have agreed to resort to it. Yet, it is widely perceived as the most suitable and the dominant method for the settlement of international commercial disputes. Why is it, then, that parties must opt in for a solution which appears as the most natural one in the community? The Article explores whether arbitration could become a default solution and thus lose its contractual foundation. The core of the Article discusses the numerous objections that such a proposition raises. Most importantly, I argue that the legitimacy of arbitrators would not be significantly lower than the legitimacy of courts, and that recent developments in specialized fields of international arbitration have shown that arbitrators can serve the public functions of courts. At the end of the Article, a model of non-consensual arbitration is proposed.
The prevalence and influence of Internet users and bloggers has risen exponentially in recent years,1 even to the extent that "citizen journalism" can cause the downfall of a prominent and respected network news anchor. In the flurry of "Memogate," anonymous bloggers, unaffiliated with traditional news media organizations, called into question the credibility of the documents DanRather revealed in a CBS News broadcast. When the bloggers' reporting resulted in Rather's resignation, they were dubbed "the Woodward and Bernstein of Rathergate."At a time when an individual sitting in front of a computer can wield enormous political and social influence through his or her journalistic efforts, the traditional concept of what constitutes a journalist or a member of the news media should change. Today, citizens can disseminate news to the public themselves, regardless of their professions, resources or training. The traditional top-down system of the news media and the age of the nightly network news broadcast has transformed into a system of bottom-up newsgathering. Under this system, everyone, "regardless of who they are, why they write or how popular they are," can become a journalist. The increased ease of reporting associated with advancing technology, however, complicates the legal questions surrounding the First Amendment freedom of the press, the logistics of newsgathering, and the state testimonial protections for reporters. This Note argues the federal government should create a testimonial privilege for newsmen, either by statute or common law. This "reporter's privilege," consistently claimed by reporters and rejected by common law courts, is essential to an efficient and effective free press. This is especially true in light of the traditional role of the press as the "Fourth Estate": a fourth branch in the system of government checks and balances.This Note examines the complexities of the reporter's privilege and how it has been interpreted in the context of advancing technology. Part I examines the history of the debate behind the reporter's privilege, stemming from the newspapers. Part II explores the question of privacy and its unique application to the anonymity that the Internet provides to bloggers and online newsmen. Part III discusses the legal questions surrounding blogs more specifically, including the courts' current rulings that relate to Internet speech and newsgathering. In Part IV, this Note argues that bloggers should be considered journalists, and calls for a federal shield statute that protects all newsmen from compelled testimony in response to a subpoena. The proposed statute would apply regardless of the medium these reporters employed in the dissemination of news. It further proposes that the criteria for determining who qualifies for the federal privilege should be based on the product an individual produces, rather than professional affiliation or chosen medium. Yet, to address the interests of the justice system and of civil plaintiffs, this Note proposes an exception to the grant of privilege for misprision of felony, an additional statutory protection for whistle blowers, and a balancing test to accommodate the differing priorities of parties to a civil claim.
This essay reviews the state of game theory in legal scholarship and finds that it remains excessively focused on one tool: the Prisoners' Dilemma. I claim that this focus is not justified, that it distracts legal scholars from exploiting other insights of game theory, particularly the problem of coordination. I show how the need for coordination is as pervasive and important to law as the Prisoners' Dilemma, illustrating with game theory discussions of constitutional law, international law, property disputes, traffic, culture, gender roles, and many other topics

More News

Madras Law College Students on Rampage

SC Judgements

Krishak Bharati Cooperative Ltd. v. Joint Commissioner of Income Tax Civil Appeal No. 6244 of 2008 (arising out of SLP(C) No. 3802/07) decided on October 21, 2008 by S.H. Kapadia and B. Sudershan Reddy, JJ. In this case, the Supreme Court had to decide on whether the Service Charge received by the appellant- assessee from the activity of producing Heavy Water can be considered as Profit for the purposes of Section 80-I of the Income Tax Act, 1961.

Bal Kishan v. State of Himachal Pradesh Criminal Appeal No. 1659 of 2008 (arising out of SLP (Crl.) No.1571 of 2008) decided on October 22, 2008 by Arijith Pasayat and Mukundan Sharma, JJ

The court allowed the appeal finding that there is not enough evidence against the appellant. The statement of the prosecutrix that the assailants were referring to each other using names and the name of the appellant happened to be the same as one among them is not enough evidence to find guilt, especially due the fact the identification parade was not properly conducted and have no value in the eye of law.
The issue here is the way the police had conducted the identification parade. Prosecutrix have admitted that police have shown her the accused persons before the parade. The test identification parade thereby lost its evidentiary value. This reveals the sorry state of investigation of crimes by the police, which becomes self-defeating and puts a heavy cost on dispensation of justice.


Companies Bill Introduced in Lok Sabha Also see here. See here for the Press Release by the Ministry of Corporate Affairs. The Bill as introduced in Lok Sabha is avalable here.

Text of Limited Liability Partnership Bill 2008 is available here

Challenge on the Appointment of HC Judge- SC Calls for Records
Appreciation of the Ground of Insanity
Central Universities Bill Introduced

Thursday, October 23, 2008


National Language?

Gutka Firm Fined for Wanting Retd. Judges With Contacts in the Judiciary!

On the Cartel of Gas Exporting Countries

Land Acquisition Laws and Reform

SC 'No' to CBI Probe on Nun Rape

News and Thoughts

Court Suggests for a Body to Regulate Muslim Marriages and Divorce
Religion and personal laws have always been sensitive issues. The ultra sensitivity, gained and granted, is counterproductive. Today everyone including the legislatures want to be politically correct and ensure vote banks. The suggestion of the court will be a step beneficial for the community itself. The Kerala High Court has pointed out that the declared Islamic countries have such regulatory and conciliatory bodies.
A grant of 65 % more the budgetetory allocation seems to be impressive. An economist would be in a better position to analyse its reach and adequecy. The challenge would be the transferring of benefits to the deserving through governmental channels, which are notoriously corrupt. Developing and actualising social audit should be given equal importance for an effective monitoring of the scheme.
The committee has also suggeted for establishment of regional benches of High Courts. The representation of the weaker sections of the society in all fields, including judiciary, is crucial for the emancipation of those sections and the entire society. The rationale of the committee is that the present judiciary lacks to appreciate the 'social flavour' of certain legislations. Look forward to see the data on which the committee has based this observation. Alarmingly, this is a reminder of the logic for superceding senior judges for the appointment of CJI by Indira Gandhi, that 'we need forward looking judges'.

Wednesday, October 22, 2008

House of Lords Decisions

House of Lords decides on the validity of displacement of inhabitants of Chagos Islands, Indian Ocean [In this decision, the House of Lords cites an SSRN paper]
[This judgement also discusses principles of Judicial Review, Legitimate Expectations]

House of Lords on Apparent Bias [Here the Palestinian Appellant contends that the Jewish Adjudicator was biased]

House of Lords on ECHR, Family Life and Justice This is an interesting case that depicts the clash betwen laws of two entirely different legal systems.

SSRN Articles

Freeman, Rebecca Villa & Andrew Wicks, Note on Insider Trading
The action of insider trading is examined in its legal perspective, namely, as fraud. The proof of insider trading hinges on several factors, including the definition of nonpublic information, the action of an insider who is consciously trading or enabling others to trade on inside information, and the breach of fiduciary responsibility. The "test of scienter" requires the deliberate attempt to deceive, manipulate, or defraud. This note examines several court cases in relation to these factors.

Freeman & Bennett, The Exxon Valdez Oil Spill
This case requires students to assess Exxon's ethical responsibilities in the aftermath of the large-scale environmental disaster caused by one of its tankers running aground in Prince William Sound, Alaska. Through a detailed chronology of events and descriptions of the roles played by the various individuals involved in the accident, the case provides a forum for discussing to what extent a company can and should be involved in compensating for such a disaster.

The US Supreme Court Judgement in EXXON SHIPPING CO. ET AL. v. BAKER ET AL. can be found here


Who Should Have the Final Word in the Appointment of Judges

UN Initiative on Global Financial Crisis -Panel for Finanacial Reform

Review Committee Recommendation Binding on POTA Courts

Generational Shift In Feminiss Movement

A Former PM Jailed for Irregularity While in Office

Tuesday, October 21, 2008

From Supreme Court of India

Guru Nanak Dev University v. Sanjay Kumar Katwal. Civil Appeal No. 2252 of 2006. Date of judgment 21-10-08
The first respondent was admitted to a Law College under the appellant university for LL.B programme. The admission was after common admission test and the academic qualification required for admission was as follows;
"Candidates who have passed Bachelor's Degree of Guru Nanak Dev University or any other equivalent examination recognized as such by the University with not less than 45% marks; or Master's Degree of Guru Nanak Dev University or of any other University recognized as equivalent thereto."
The respondent have passed MA degree of Annamalai University through Open University System (OUS). He wrote the first semester exam and undergone the second semester as well. Thereafter he was asked not to continue as he was lacking entry level qualification. Incidentally OUS system of Annamalai University does not require a Bachelor degree qualification to undergo a MA programme. Against the order of expulsion the respondent approached the HC and got a favourable order. The order is appealed here.
The appellants have raised three contentions
1. The word 'or' in the entry level qualification should be read as, 'in case the applicant does not have 45% marks in the Bachelor programme, MA degree could be considered'. In essence it should not be read disjunctively but as creating a conditional clause.
2. A person not having a Bachelor degree cannot have a Masters degree and therefore his Masters degree is irregular.
3. The OUS programme of the Annamalai University is not recognised by the appellant university, whereas Correspondence as well as Distance Education courses are recognised. The Annamali University itself has made distinctions between these three programmes.
The court could not find merit in the first two contentions. On the first contention court said that the word 'or' has in certain occasions have been read as 'and', but the current situation does not call for it. Also "... the word `or' cannot obviously be read as referring to a conditional alternative, then such condition is not specified."
The second contention was rejected because Annamalai University provide for such admission.
The third contention was found to be valid. "The first respondent has passed his M.A. (OUS) from Annamalai University through distance education. Equivalence is a technical academic matter. It cannot be implied or assumed. Any decision of the academic body of the university relating to equivalence should be by a specific order or resolution, duly published. The first respondent has not been able to produce any document to show that appellant university has recognized the M.A. English (OUS) of Annamalai University through distance education as equivalent to M.A. of appellant university. Thus it has to be held that first respondent does not fulfil the eligibility criterion of the appellant university for admission to three year law course."
Though the respondent is technically ineligible to be admitted, the court in the present circumstances; being allowed to write examination, before which it was the responsibility of the university to verify eligibility and having won the case at HC and continued his studies, wished not to interfere with his career and ordered continuation of enrolment as students or if he has already completed the course for declaration of the result.

From Supreme Court of India

On quashing of complaint under section 482 of Cr. P.C
State of Andhra Pradesh v. Bajjoori Kanthaiah. Date of Judgment 20-10-08. Available at http://www.judis.nic.in/

Illustrative categories mentioned by the court for quashing
"(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the F.I.R. or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a Police Officer without an order of a Magistrate as contemplated under S. 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6)Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."


Cut in Sales Tax on ATF. Airlines demand rationalisation of tax on ATF. Also see here
Nagarjuna Constructions Ltd v. Govt. of AP & Ors. CIVIL APPEAL NO. 1438 OF 2004 decided on October 20, 2008 by the Supreme Court of India (Dr. Arijit Pasayat & P. Sathasivam, JJ.) on payment of seigniorage fee to the government. Available at http://www.judis.nic.in/


Some Issues Concerning Democracy
Today the Hindu carries two news items that raises some issues related to democracy. First is the notice of the CPI (M) to move a privilege motion against the PM in Rajya Sabha on the Nuke deal. The second is the information that the current Parliamentary session is to be curtailed to be reconvened later in December.
The issues involved are
1. First ofcourse is the impact of the deal on democracy and the need to have a Parliamentary supervision on the executive's treaty making power. Its a part of a larger debate, both legal and political.
2. The technicality of moving a privilege motion against a member who is not part of the House. If accountablity of the executive to the legislature is the principle, the technicality shouldn't matter.
3. Proroguing of a Parliamentary session is legal and every political party may say it is necessary this time due to upcoming elections in three states. The fact that the monsoon session was skipped for obvious reasons need to be borne in mind. Parliamentary session are vital for any democracy, for the function of law making and accountablity. Statistics on the number of days Indian Parliament meet reveal a decling trend which is unhealthy for a democracy.

Monday, October 20, 2008

A Note to Financial Market Regulators

This EPW commentary is a note to the financial market regulators and those who seeks more transparency in market regulation. Transparency, for the authors (John Eatwell, Robert Reoch), is not a solution.

Analysis of Impact of Financial Crisis on Democracy

This editorial article of EPW give an anlysis how democracy is made to react in economic crisis from the US experience. The earlier unwilling congress had changed as they were made to understand how critical the situation is and being reminded them of their responsibility. The issue the article raises is what is the bargain that common people got in this bail out plan. How congress could have made it better for the people than benefit a class who is marked by the “ruthless pursuit of wealth by any and all available means” is highlighted in the editorial. There were clear public opposition about the bail out plan, the question is could the congress reflect the "little man's" will.

From Supreme Court of India

On Liability of Insurer
M/s. Rahee Industries Ltd. v. Export Credit Guarantee Corpn. of India Ltd. Date of judgment 18-10-08
Compounding of Offence Under Section 307 IPC
Ishwar Singh v. State of Madhya Pradesh. Date of judgment 18-10-08
Legal Position on Legitimate Expectation
M/S Sethi Auto Service Station v. Delhi Development Authority. Date of judgment 18-10-08

Relevant part of the judgment on the doctrine

27. An examination of the afore-noted few decisions shows that the golden thread running through all these decisions is that a case for applicability of the doctrine of legitimate expectation, now accepted in the subjective sense as part of our legal jurisprudence, arises when an administrative body by reason of a representation or by past practice or conduct aroused an expectation which it would be within its powers to fulfill unless some overriding public interest comes in the way. However, a person who bases his claim on the doctrine of legitimate expectation, in the first instance, has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment.
The Court could interfere only if the decision taken by the authority was found to be arbitrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and not taken in public interest. But a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. The court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected.
Therefore, a legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited.

Available at http://judis.nic.in/supremecourt/chejudis.asp


Demand to Pass Bill for Autonomy of Certain Districts of Arunachal
Discussion on Drilling Holiday
On Resignation of MPs
China for Liberalised Land Use Rights
Probe Against IMF Managing Director for Alleged Nepotism
Proposal for More Restirctions for Immigration in UK for Non- Eurpoean Nationals

Rigging in U.S Elections?


Judicial Appointment and the Government

SEBI and Participatory Notes

Nuclear Reactors and Liability Framework for Accidents in India

Sales Tax Waiver for Lotteries and Printed Materials

Saturday, October 18, 2008

Friday, October 17, 2008

US Arbitration Fairness Act

Below is an Article in the InsideCounsel
"Arbitration Attack" From InsideCounsel Magazine October 2008 Issue
By Melissa Maleske
October 1, 2008

As the Arbitration Fairness Act of 2007 continues its slow journey through Congress, debate over the bill is escalating. Public Citizen and the U.S. Chamber of Commerce, major voices respectively for and against the bill, have released battling analyses of identical data that either validates or conflicts with the assertion that arbitration favors corporations, depending on which group is analyzing it. Editorials, statistics and anecdotes have popped up in news outlets and blogs, discussing either the stress on the civil litigation system that will heighten if the billpasses or the harm to individuals that will continue if it does not.
Businesses that rely on mandatory and binding pre-dispute arbitration agreements in their contracts with consumers, employees or franchisees should take notice. The bill would amend the Federal Arbitration Act to do away with the widespread practice. Arbitration would continue to be an option for resolving disputes with those groups but could not be forced on them.
Introduced in July 2007 in the House, with an identical bill in the Senate, the bill has gained momentum and support in Congress—102 representatives have co-sponsored the House bill that Rep. Henry Johnson, D-Ga., introduced. The bill took another step toward enactment as the House Judiciary Subcommittee on Commercial and Administrative Law voted in July to send it on to the full committee for mark up. Opponents of the legislation insist it interferes with a system that has been working to the benefit of both sides since enactment of the Federal Arbitration Act in 1925.
“Arbitration did not simply pop out of a vacuum. It emerged because of defects in our civil litigation system,” says Peter B. Rutledge, a professor at the University of Georgia School of Law. Rutledge has testified in opposition to the bill and released papers in defense of arbitration with support from the Chamber.
Opaque ProcessWhile arbitration began as a cheaper and faster way to resolve disputes than taking a case to court, consumer and employee rights groups say forcing consumers and employees into the present-day arbitration process is unfair.
“[Consumers] are either unaware of binding mandatory arbitration being in the contracts, or, even if they’re aware of it, they can’t negotiate it anyway,” says David Arkush, director of Public Citizen’s Congress Watch division. “Because it’s forced on them in this way, there’s an inherent danger in how arbitration is conducted.”
To begin with, there is the so-called “repeat player phenomenon,” the theory that, because the company chooses the arbitration forum, it is in competing forums’ interest to favor corporate clients.
Supporters of the Arbitration Fairness Act say there is plenty of room for injustice to hide within the opaque arbitration process, which is often conducted entirely in secret and does not allow for appeal of opinions that parties are often not even allowed to view. While opponents of the bill say arbitration provides financial benefits for individuals, supporters say the argument is questionable since losers in arbitration usually must pay their opponents’ legal fees. In addition, the arbitration process has grown more complicated and time consuming, and thus more costly—more like litigation.
The Act does not tackle the asserted shortcomings of the arbitration system head on; rather, it simply gives consumers, employees and franchisees the chance to weigh the benefits of arbitration and make an informed choice, just as a company can do in deciding whether to arbitrate disputes with another business.
“The companies are saying, ‘We need to force consumers into arbitration or they won’t do it,’” Arkush says. “That’s basically an admission that arbitration is unfair to consumers, because if it were fair, you wouldn’t have to force them.”
Help or Harm?Rutledge counters that the criticism of arbitration has focused more on anecdotal horror stories of consumer victims of arbitration than empirical evidence of injustice, while analysis on the bill’s potential economic impact also is absent. “Rather than assuming that by eliminating pre-dispute arbitration [consumers, employees and franchisees] will somehow magically get better treatment in the civil justice system, let’s understand what the outcomes are in those different systems,” he says.
Some say the bill, aimed at helping consumers, could actually hurt them.
For instance, a July letter from the Consumer Bankers Association to the House Subcommittee on Commercial and Administrative Law states the bill “will force the parties to pay higher legal fees and costs to resolve their disputes.”
A May letter to Congress from the Chamber and numerous business groups drew similar conclusions: “[Without] the option of arbitration, consumers would be faced with two choices—to try to navigate the legal system on their own, or to abandon their claim.”
That may be true, but lost in these arguments is that arbitration would still be on the table. The bill takes no action against the practice itself, only the pre-dispute agreements.
“The point that is getting across the least, and that there’s the most misunderstanding about, is that people think this bill would actually outlaw arbitration,” Arkush says. “That’s not true at all. All the Arbitration Fairness Act would do is ensure that consumers actually have a choice about going to arbitration.”
Choosing ArbitrationThe Chamber’s statistics seem to suggest that, if given a choice and knowledge of arbitration’s supposed benefits, most people would choose to arbitrate rather than go into litigation. As cited in its May letter to Congress, a poll for the Chamber’s Institute for Legal Reform found that 82 percent of the public prefers arbitration to litigation as a means to settle disputes.
“I think what you may end up seeing is an initial bump in litigation cases,” says Ed Shapiro, chair of the litigation and dispute resolution practice at Much Shelist. “Then once everything quiets down, people may evaluate and decide that maybe arbitration is a better way.”
Still, there is no question that the Act would force some companies to rethink their contracts with consumers, employees and franchisees. And its current retroactivity provision could put many past contracts in doubt, although House subcommittee members have expressed interest in doing away with it.
Assuming most companies turn to mandatory arbitration for cost savings, companies would have to budget for increased litigation, at least until they can see the full impact of the bill on their own dispute resolution strategies. Proponents of the bill say such pains are necessary to ensure fairness in a flawed system, and that the Arbitration Fairness Act is the only way to do this short of revamping the entire established arbitration system.
“No matter what procedural fixes we put in place, no matter what reforms, no matter what sort of heavy-handed regulation of the conduct of arbitration we might put in place, there are always going to be gaps and loopholes and problems with it,” Arkush says.

For a brief critique on the Article see here.

Consitution of Ecuador

THe Constitution of Ecuador, 2008 is available here (in Spanish). Its Partially translated version (Google Translation) is available here.


New Method to Compensate Property Owners for Displacement? Also see here.

Leaderpage Article in The Hindu on Petroleum Rich States, Constitution and Presidential Power

Law Commission on Manual Scavenging

Group Solidarity and Democracy in India

Limits on FII's Fund Allocation between Debt and Equity Removes by SEBI

US Insurance Regulator to Study Financial Raters

CAG and Auditing of PPPs

Thursday, October 16, 2008

From the High Court of Kerala

The Right of the Detainee to Know the Grounds
The High Court of Kerala held yesterday that a person detained under the Kerala Anti- Social Activities (Prevention) Act, 2007, (find the enactment at http://lawkerala.com/reso/anti_social.pdf) has the right to get a copy of the evidences and documents that form the basis of detention order by the appropriate authoirty. The detainee has the right to know why he has been considered as a goonda under the Act. Section 3 of the Act empowers the appropriate authority (the District Collector), to issue detention orders of 'goondas and known rowdies'. This decision reiterates the duty as per section 7 (2) of the Act. Section 7 (1) prescribes that the officer arresting a person under the Act is to read out the detetion order and give a copy of the order to the arrestee.


SEBI demands report from Foreign Institutional Investors on Indian Securities Lent Abroad

Success of National Do Not Call Registry?

TRAI's Decision to Impose Licence Fee on Tower Cos.

RBI Cuts CRR Again

SEBI Consent Order in IPO Scam. The Consent Order can be accessed from here.


Vaniyankandy Bhaskaran v. Mooliyil Padinhjarekandy Sheela Civil Appeal No. 6103 of 2008 (Arising out of S.L.P. (C) No. 1823 of 2007) decided on October 14, 2008 on the interpretation of Order XXI Rule 104 of the Code of Civil Procedure
Bench: Altamas Kabir and Markandey Katju, JJ

Available at http://www.judis.nic.in/

AP Public Procurement Bill

ICAI's Accounting for Service Concession Agreements

Bank Balance Sheet Disclosures and Amendments to the Banking Regulation Act, 1949

Law News

Regulation of Electronic Media -Supreme Court Explores the Possibility of Regulation by Legislation

Tackle Corruption and Inefficienacy in Lower Courts - CJI http://www.hindu.com/2008/10/16/stories/2008101656560100.htm

Calculating Seniority of Judicial Officers for Promotion B.S. Mathur v. Union of India (Writ Petition (C) Nos. 486 of 2007, 487/2007 & 502/2007) Date of Judgement 15-10-08. Available at http://judis.nic.in/supremecourt/chejudis.asp . See for news at http://www.hindu.com/2008/10/16/stories/2008101653511300.htm

Clubs are Public Places and No-Smoking Areas http://www.hindu.com/2008/10/16/stories/2008101659331200.htm

Wednesday, October 15, 2008

Manifest Disregard in US Arbitration- manifestly disregarded?


Supreme Court on Appreciation of Evidence by Interested Witnesses

State Rep. by Inspector of Police v. Saravanan & Anr. (Criminal Appeal No. 832 of 2002). Date of Judgement 14-10-08
Available at http://judis.nic.in/supremecourt/chejudis.asp
The court has reiterated two principles with regard to appreciation of evidence in a criminal case; evidence of interested witnesses and minor discrepencies as well as improvements in the statements of witnesses.
10. "... There is no rule of any presumption that the evidence of a related witness will always be an interested one or that such witness will have only a hostile attitude towards the accused facing trial."
The court quotes a 1999 decision (State of Rajasthan v. Teja Ram, (1999) 3 SCC 507) to establish the principle in the present case where the witnesses are the close relatives of the deceased thus, "when any incident happens in a dwelling house, the most natural witnesses would be the inmates of that house. It is unpragmatic to ignore such natural witnesses and insist on outsiders who would not have even seen anything."
The position of appreciation of evidence with minor discrepencies is held as follows
11. "... while appreciating the evidence of a witness, minor discrepancies on trivial matters without affecting the core of the prosecution case, ought not to prompt the court to reject evidence in its entirety. Further, on the general tenor of the evidence given by the witness, the trial court upon appreciation of evidence forms an opinion about the credibility thereof, in the normal circumstances the appellate court would not be justified to review it once again without justifiable reasons. It is the totality of the situation, which has to be taken note of. Difference in some minor detail, which does not otherwise affect the core of the prosecution case, even if present, that itself would not prompt the court to reject the evidence on minor variations and discrepancies."

Recent Judgment on Appointment of Arbitrator

Ludhiana Improvement Trust &Another v. M/s Today Homes and Infrastructure(Pvt) Limited (Civil Appeal No.6104 of 2008). Date of Judgment 14- 10 -2008
Avialable at http://judis.nic.in/supremecourt/chejudis.asp

The appellant and the respondent herein have entered into a contract for construction of a ‘City Centre’. The appellant trust issued a letter of intent to the respondent and entered into an agreement which includes an arbitration clause. Dispute arose between parties and the respondent chose to seek arbitration. They filed a petition for appointment of arbitrator before the Punjab and Haryana HC under section 11 (6) of the Arbitration and Conciliation Act, 1996. The court appointed an arbitrator which is being challenged in the present appeal.

The contention of the appellant is that the main agreement itself is been fraudulently obtained, therefore the arbitration agreement is void and unenforceable. The HC failed to appreciate the dictum of Seven Judges in S.B.P. and Company v. Patel Engineering Ltd. [2005 (8) SCC 618]. This case had held that the CJI while appointing an arbitrator under section 11 is exercising a judicial power and will have to decide on preliminary matters about jurisdiction, existence of arbitration agreement and arbitrable cause. It was contended that the HC followed the Konakn Railway decision (Konkan Railway Corporation Ltd. v. Rani Construction Private Ltd., [2002 (2) SCC 388], which was overruled by higher bench in Patel.

The respondent on the other hand “contended that the main Agreement and the Arbitration Agreement contained therein could not be equated as they were for different purposes. According to Mr. Shanti Bhushan, even if the main Agreement was held to be void, it [would] not affect the arbitration agreement which had been included in the main Agreement for the purpose of deciding such issue.”


17. … Unfortunately, relying on the earlier Constitution Bench decision of this Court in the Konkan Railway case (supra), the High Court left it to the learned Arbitrator appointed by it to decide the said issues under Section 16 of the 1996 Act, which was contrary to the directions given by the seven-Judge Bench of this Court in the Patel Engineering case (supra), which categorically overruled the decision of the Constitution Bench in the Konkan railway case. In fact, in sub-paragraphs (10) and (12) of Paragraph 47 of the said judgment, the seven-Judge Bench specifically indicated that the orders which had already been passed in applications under Section 11(6) of the 1996 Act, prior to the decision in the Patel Engineering case (supra), would be treated as valid, leaving all objections to be decided under Section 16 of the Act. It was also indicated that from the date of the judgment, however, the decision rendered in the Patel Engineering case (supra), would govern all applications and even pending applications under Section 11(6) of the 1996 Act.
18. We have, therefore, no option but to set aside the order of the Chief Justice and remit the matter for a fresh decision in keeping with the decision of the seven-Judge Bench in S.B.P. & Company vs. Patel Engineering Limited and Another [2005 (8) SCC 618].

Excerpts from Patel

38. It is necessary to define what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense, whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the arbitral tribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under Section 11(6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as may be necessary. We think that adoption of this procedure in the context of the Act would best serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the court at various stages of the proceedings before the Arbitral tribunal.

46. We, therefore, sum up our conclusions as follows:

i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power.

ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another judge of that court and by the Chief Justice of India to another judge of the Supreme Court.

(iii) In case of designation of a judge of the High Court or of the Supreme Court, the power that is exercised by the designated, judge would be that of the Chief Justice as conferred by the statute.

(iv) The Chief Justice or the designated judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be, his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate.

(v) Designation of a district judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act.

(vi) Once the matter reaches the arbitral tribunal or the sole arbitrator, the High Court would not interfere with orders passed by the arbitrator or the arbitral tribunal during the course of the arbitration proceedings and the parties could approach the court only in terms of Section 37 of the Act or in terms of Section 34 of the Act.

(vii) Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court.

(viii) There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act.

(ix) In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act.

(x) Since all were guided by the decision of this Court in Konkan Railway Corpn. Ltd. & anr. Vs. Rani Construction Pvt. Ltd. [(2000) 8 SCC 159] and orders under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or arbitral tribunals thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act.

(xi) Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending before them as on this date will stand transferred, to be dealt with by the Chief Justice of the concerned High Court or a Judge of that court designated by the Chief Justice.

(xii) The decision in Konkan Railway Corpn. Ltd. & anr. Vs. Rani Construction Pvt. Ltd. [(2000) 8 SCC 159] is overruled.

Remaining Issue

The principle of Kompentenz-Kompetenz leaves the authority to decide upon the jurisdiction with the arbitrator. Section 16 of the Act reflects this principle and prescribes procedure for challenges. The Patel decision is actually duplicating this function by enabling the CJ also to perform the same function of determining preliminary issues.

The jugglery done by the Patel Court is that, the function of CJ in appointing an arbitrator is declared as not a mere administrative function but a judicial one, which empowers or rather mandates the office to determine preliminary disputes. Once it is so decided by the CJ, the arbitrator is ceased to entertain such issues. The court seemingly fears a situation where the CJ has appointed an arbitrator and the arbitrator finds that there is no arbitration agreement or arbitrable cause, the efforts and order of the CJ goes waste. The court apprehends that the creation will be in a position to annihilate the creature.

The matter to be discussed in this context is the purpose of the Act and the particular provision. Was this to see that where there is an arbitration possibility, the duty of the court is to set that machinery in motion as expeditiously as possible or to intervene and determine the preliminary issues and leave it then for arbitration. The whole tempo of the enactment stand for the first. The rejected arguments of Nariman in Patel holds much water. The court of course has a duty and possibility of intervention under section 34 once the award is passed.

The present decision has revived this question. Should the court decide the preliminary issue before appointing an arbitrator in a petition under section 11 of the Act.

Supreme Court News

Centre's Position on Ramar Sethu
Unfilled Reserved Seats in Central Educational Insitutions to be Filled from General Category - Supreme Court
The Court Refuse to Stay Actions by Gujarat Government on Nanavati Report

Tuesday, October 14, 2008

Law News

Canadian Supreme Court on Implied Terms in Employment Contracts in RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc decided on October 09, 2008

Affirmative Portfolios v Transnet (473/2007) [2008] ZASCA 127- Supreme Court of South Africa on the Parole Evidence Rule

House of Lords Debate on Counter Terrorism Bill (Posted in http://www.innertemplelibrary.blogspot.com/)

Deutsche Bank AG & Ors. v. Asia Pacific Broadband Wireless Communications Inc & Anr- Court of Appeal (Civil Division) on exclusive jurisdiction clause in Contract

Dharam Singh v. Karnail Singh & Ors.

The Supreme Court, in Dharam Singh v. Karnail Singh & Ors., (Arising out of S.L.P. (C) No.11713 of 2007) decided on October 13, 2008 had to decide whether there was any substantive question of law in the second appeal as per Section 100 of the Code of Civil Procedure, 1908.

The Plaintiff filed a suit before the Additional Civil Judge (Senior Division), Kharar for a declaration "to the effect that plaintiff had become owner of the suit property by way of extinguishment of equity of redemption qua the rights of the defendants and further with consequential relief of restraining the defendants from transferring the suit property in favour of any body..."
The Trial Court decided in favour of the Plaintiff. An appeal was filed before the Additional District Judge, which was dismissed. A second appeal was filed before the Punjab and Haryana High Court, which was allowed. Hence the Suit- Plaintiff filed a case before the Supreme Court challenging the judgement of the High Court.

The Supreme Court held:
1. Under Section 100 CPC jurisdiction of the High Court to entertain a second appeal is confined only to such appeals which involve a substantial question of law and it does not confer any jurisdiction on the High Court to interfere with pure questions of fact while exercising its jurisdiction under Section 100 CPC.
2. Where the High Court is satisfied that in any case any substantial question of law is involved, it shall formulate that question under Sub-section (4) and the second appeal has to be heard on the question so formulated as stated in Sub- section (5) of Section 100.
3. Under Section 100 CPC, after the 1976 amendment, it is essential for the High Court to formulate a substantial question of law and it is not permissible to reverse the judgment of the first appellate court without doing so.
4. The Proviso to sub-section (5) of Section 100 is applicable only when any substantial question of law has already been formulated and it empowers the High Court to hear, for reasons to be recorded, the appeal on any other substantial question of law. The expression "on any other substantial question of law" clearly shows that there must be some substantial question of law already formulated and then only another substantial question of law which was not formulated earlier can be taken up by the High Court for reasons to be recorded, if it is of the view that the
case involves such question.
5. A perusal of the impugned judgment passed by the High Court does not show that any substantial question of law has been formulated or that the second appeal was heard on the question, if any, so formulated. That being so, the judgment cannot be maintained.
Hence, the Supreme Court remitted the matter to the High Court so far as it related to Second Appeal for disposal. No order as to costs was made.

Law News

SC refers SIMI ban to a larger bench Also See the News Report in The Hindu
SC Stays arrest of Barjinder Singh
Jet Airways and Kingfisher to Join Hands [implications on competition in the industry?]
SC on Rizwanur Case
Former CJI VN Khare on Gujarat Riots and Nanavati Commission
Op-Ed on the Role of Legislators in the Indian Express


The Power of Information
See http://www.hindu.com/2008/10/14/stories/2008101459461100.htm
A study on the use of Right to Information Act, 2005 reveals the power of information to revamp the system.

Concern Over Judicial Appointments

See http://www.hindu.com/2008/10/14/stories/2008101454530800.htm

Appointment of judges to higher judiciary has always been an eye of storm. The provisins of the Constitution of India is practically re-written by the judicial decisions, presently, the third judges case. Even the detailed prescriptions by the Supreme Court therein prove unsatisfactory in securing transaparency in appointments, which is crucial for both the independence of judiciary as well as its quality.

The Standing Committee on the Ministry of Law and Justice had filed a report and asked the Centre to consider evolving a new mechanism of appointments of judges. (http://www.hindu.com/2006/08/18/stories/2006081802181400.htm). The CJI himself have stated the need to streamline the present appointment process as it has "some difficulties and mistakes", while felt bound by the Supreme Court's decision. (http://www.outlookindia.com/pti_news.asp?id=612176). The NCRWC has given detailed suggestions on the issue which may be found at http://lawmin.nic.in/ncrwc/finalreport/v1ch7.htm

The consultations by the NCRWC have probed into the need of having an All India Judicial Service for the subordinate judiciary. http://lawmin.nic.in/ncrwc/finalreport/v2b1-15.htm. Find the consultation paper on higher judiciary at http://lawmin.nic.in/ncrwc/finalreport/v2b1-14.htm

See also, http://www.hindu.com/2006/12/01/stories/2006120107340100.htm, http://timesofindia.indiatimes.com/India/351_HC_judges_appointed_bypassing_SC_collegium/rssarticleshow/2679385.cms, http://www.indlaw.com/search/news/default.aspx?348069ee-3143-4ceb-95b6-17aecaab19eb