Hindustan Construction Company v UoI: A Critical Appraisal (Part I)

A critique should not be suppressed because it is unpopular. In line with the mandate of this blog (which reproduces the words of HM Seervai), as noted at the top of this page, this post along with subsequent posts critically appraises the recent decision of the Supreme Court in Hindustan Construction Company v  UoI (pdf)(2019: SC).

Readers of this blog, we are sure, would have read the decision. Therefore, we do not present a descriptive comment of the decision and instead move straight to criticisms of the decision and possible arguments that go against the said criticisms.

Our task in this endeavour is to explore the justifiability of justifications proffered in the said decision. It is not only the eventual conclusions that are important, but the justifications offered therefor. The first criticism is addressed in this post.

Criticism 1: The Supreme Court entertained a writ under Article 32 filed by commercial entities questioning the constitutional validity of a law that is avowedly economic in nature

A set of writ petitions were filed by commercial/ corporate entities directly in the Supreme Court and claimed violation of the fundamental rights, including the rights under Articles 14, 19, and 21, and the constitutional right to property under Article 300A. The Supreme Court entertained it, without any whisper as to the maintainability of a writ petition on what is really a commercial issue by commercial organisations directly in the Supreme Court. How could the Supreme Court directly entertain a writ petition in an issue relating to commercial affairs?

In the recent times, the Supreme Court has refused to hear more serious issues, directly affecting life and liberties of persons, in at least two matters, whose news reports are here and here. Surprisingly, the SC did not give any justifications as to why it was entertaining the writ petitions in Hindustan Construction, despite the settled law. 

The court did not even justify why it was directly hearing the writ petition without even a justification.

Contra Arguments: Ideally, the Supreme Court should have explained why it was doing so: the law has been in disarray several times in the past four years, and it was in the interest of commerce that there is a finality to the issue as regards the retrospective applicability of the 2015 amendments. An uncertain legal state of affairs would affect the economy of the nation, and therefore, it was important to settle the law swiftly and surely. 

Think of a counterfactual: Assume that a scenario where the Supreme Court dismissed the writ petitions and directed the parties to approach the relevant High Courts. It is possible that the amendment could have been challenged in different High Courts and it is possible that different High Courts could have reached opposite conclusions just like how they had post-2015 on the question of retrospective applicability of the 2015 amendments. Again, it would have taken a few months or so for the matter to reach the Supreme Court, by which time several HC decisions would have been rendered and parties could have altered their stance based on outcomes of such decisions. Therefore, it was important for the Supreme Court to immediately settle the law. 

Another important argument against the aforesaid criticism is that if a High Court hold the statute unconstitutional, it would bring again to the fore the territorial applicability of the decision of the High Court. To avoid such uncertainties, it was perhaps important for the Supreme Court to address the situation on an urgent basis. The decision does not record if this issue was ever raised before the Supreme Court. It would be interesting to have a look at the record to see if it was. 

More on the decision in another post.