Changes in debt recovery laws growth positive

Secured credit is the driving force of the economy and growth of credit creates wealth and generates employment. Recent Amendment Act to change debt recovery laws passed by Parliament proposes certain path-breaking changes in the registration systems as well as in priority to secured credit over taxation dues. This will create an environment conducive to growth of credit not only by banks and financial institutions (FIs) but by all other secured lenders.

In terms of amendments to the SARFAESI Act, the Central Registration System established under the Act is to be extended to all secured lenders who will be able to register any security interest created in favour of the lender over immovable, movable or intangible property belonging to the borrower. The registration system is also to be extended to attachment orders on property issued by any taxation or other authority or by any court. Such registration system when implemented will result in creating a national database of all encumbrances on property rights and all lenders will be in a position to ascertain whether the property offered as security for any loan is already encumbered or under attachment.

One other aspect of the new registration system is that it is not compulsory and secured lenders have the option to register particulars of a property mortgaged, charged or hypothecated to them or any modification or satisfaction of such charge. But one distinct advantage of registration will be that there will be public notice of security created and any dealings with such property shall be subject to registered security interest. Hence, there is adequate incentive to register security interests over any property right for secured lenders. Similarly, enabling provision is made to extend the registration system to all taxation authorities having powers to issue attachment orders.

As far as priority to secured creditors over taxation dues is concerned, all the taxation authorities whether at central, state or local authority level operate on the principle that Crown debts have a priority over all other claims, including claims of secured creditors. Many states have incorporated provisions in tax laws declaring that arrears of tax dues shall have a first charge on the assets of the assessee and, in such cases, banks and FIs as secured creditors rank below the revenue claims. Further, revenue authorities have powers to charge penal interest on delayed tax payments and, in many cases, substantial part of the recoveries made by banks / FIs has to be paid to tax authorities.

Exception to the principle of priority to claims of revenue over secured creditors is provided under insolvency laws. Sections 529 & 529A of the Companies Act, 1956 now incorporated in the Sections 325 & 326 of the Companies Act, 2013 recognise the rights of secured creditors to claim priority over taxation dues subject to priority extended to workmen’s dues on pari passu basis.

Similar priority was recognised under the insolvency laws for individuals and non-corporates. The above principles contained in old insolvency laws have been incorporated in the new Insolvency and Bankruptcy Code, 2016.

Outside the insolvency laws, banks/ FIs have rights of recovery under the SARFAESI Act, 2002 and RDDB & FI Act, 1993. In the absence of any provisions in the above debt recovery laws recognizing priority to secured creditors over taxation dues, the Supreme Court had held that priority given under the state laws shall prevail over debt recovery laws and secured creditors cannot have priority over taxation dues.

Recent amendments to the SARFAESI Act and RDDB & FI Act have totally changed the status of banks/ FIs in the order of priority. Newly inserted Section 26E of the SARAFESI Act and Section 31B of the RDDB & FI Act recognise priority of banks/ FIs as secured creditors over taxation dues. This amendment is also conducive to promote low-cost credit by enhancing availability of secured credit.

Such amendments to debt recovery laws for banks / FIs are related to the legislative powers of Parliament to legislate on ‘banking’, because lending is the principal business activity of banks and speedy recovery of loans is part of the banking laws. The provisions made in the Union law passed pursuant to legislative powers of Parliament shall prevail over the state laws making contrary provision giving priority to state taxation dues under article 254(1) of the Constitution. Hence, the amendments made to the debt recovery laws are constitutionally valid and shall override state laws.

States need to appreciate that secured credit is the engine of growth in the economy. Such priority provided to secured credit will create an environment of growth for low-cost secured credit, which will trigger creation of wealth, generate employment and facilitate overall growth and development in the economy, and better tax collection by states.

http://blogs.economictimes.indiatimes.com/et-commentary/changes-in-debt-recovery-laws-growth-positive/

Supreme Court backs move to ban highway liquor vends

The Supreme Court indicated on Wednesday that it would order shutting of all liquor vends on national and state highways for the safety and security of commuters who get “distracted” after seeing the shops, causing accidents.

A bench headed by Chief Justice TS Thakur came down heavily on states for not heeding the Centre’s advice to not give licences to the vends on the highways. Instead, the states have increased the number of licences, the bench pointed out. The first communiqué was released in 2007, since then the Centre has been sending notices to the states.

“We would not like any vend on national highways, state highways, advertisements, or signage about the availability of liquor shops. We will direct all highway authorities to remove all sign boards. It should be absolutely free from any distraction or attractions. It should not be visible. Visibility is the first temptation,” Justice Thakur said.

The court was hearing petitions challenging various high court verdicts, which disapproved the sale of liquor on highways. The courts have held that the shops be located at a distance from where they are neither visible nor accessible to the commuters.

“You can start a door delivery of liquor,” the bench told counsel for Jammu and Kashmir who argued if the vends are away from the highway, people would have problems accessing them due to the terrains.

Punjab government counsel also faced the court’s ire for defending the liquor lobby’s interest. “You are acting like a mouthpiece for the liquor lobby by defending the policy,” the bench told the advocate who pleaded the ban should be made effective from April 1, 2017 to avoid a revenue loss of `1,000 crore to the exchequer.

Supreme Court Orders Facebook, Google, Microsoft To Block Rape Videos Circulating On Their Platforms

There is an evil side to social media as well, the one which we sometimes conveniently ignore or refuse to accept its existence. But, that evil is lurking around, choosing its next victim online.

One such evil is the circulation of rape videos on various social media platforms. Videos of sexual exploitation and rape are actually sold in large numbers in states like UP, Bihar, Rajasthan for as low as Rs 50. Shady dealers from rural hinterland acquire these videos, and make a business out of that.

And as per reports, these dealers acquire such sick videos from social media portals like Youtube and Dailymotion. And once a customer buys this video, it is again been re-circulated on the social media via WhatsApp, Facebook and the trauma of the victim continues.

Understanding the gravity of the situation, Supreme Court has ordered Facebook, Google, Microsoft to immediately place a ban on these videos.

A bench headed by Justice Madan B Lokur said, “The social media which is used to circulate the explicit clips should also be called in to ascertain their view as to how this can be curbed. We are issuing notice”,

This order was passed to Additional Solicitor General Maninder Singh.

Representing Govt. of India, Additional Solicitor will now issue notices to these social media portals and ask them to devise methods which can stop the sharing and viewing of these videos.

Why Supreme Court Intervened?

The Bench was hearing a PIL filed by Sunitha Krishnan who had initiated the popular #ShameTheRapistCampaign. Under this campaign, she received rape videos of more than 200 victims, which are being shamelessly shared across social media platforms, and instead of damaging the ‘reputation’ of the rapists, is destroying the life of the victims.

After her campaign, Govt. instructed CBI to investigate these videos, and book the culprits – both the rapists and those who are buying such videos and then circulating them on social media.

Interestingly, last month, the Court asked whether social media portals can held accountable and declared as accused in this case? This observation was made because these social media portals are the mediums through which such videos propagate, and if they are declared as accused along with the rapists and buyers of such videos, then it can turn out to be an interesting legal case study.

Analysts are saying that social media portals are mere platforms for sharing content, and hence, they cannot be held responsible for the type of the content. But yes, they can certainly block some specific type of content, if it harnesses evil and hatred.

Taking actual data from National Crime Record Bureau statistics, the apex court has asked the Centre to point out measures taken by the Govt. to stop cyber crimes against women and children.

As per arguments made by the Centre, it was revealed that Home Ministry has established exclusive Indian Cyber Crime Coordination Centre, which will work to stop such cyber crimes, including sharing of rape videos.

A statement from the Home Ministry said, “In order to tackle cyber crimes comprehensively, MHA has already set up an expert committee to recommend a roadmap for tackling the menace,”

Trademarks : Iceland v. Iceland : The battle for exclusivity

Iceland (the country ) is a leading exporter of frozen fish and seafood to several countries in the EU. Recently, native companies like ‘Clean Iceland’ and ‘Iceland Gold’ have faced trouble in marketing their products due to confusion over the name which clashes with ‘Iceland Foods’ – a renowned frozen food supermarket chain that has subsisted since the 70’s.

‘Iceland Foods’ for several years used to be under the control of Icelandic investors and later Icelandic banks. As the spokesperson for the retailer said, “the relationship came to an end with a £1.5bn buyout of the company in 2012, but Iceland the company has continued to have a good relationship with Iceland ,the country through the ownership of three Iceland stores there, export sales of Iceland products to other retailers throughout the country, and sponsorship of the Icelandic national team in this year’s European football championships.”

‘Iceland Foods’ is currently a UK-based but South African owned supermarket chain.

The Icelandic government has begun legal proceedings to ensure that the trademark of ‘Iceland’- that is exclusively owned by the supermarket chain is cancelled. These steps have been taken primarily to protect native companies that are unable to promote themselves abroad in association with their place of origin, as is their right, for it is a place that they are rightly proud of and which enjoys a positive national branding.

The supermarket’s founder and chief executive, Malcolm Walker, said: “A high-level delegation from Iceland Foods is preparing to fly to Reykjavik this week to begin negotiations, and we very much hope for a positive response and an early resolution of this issue.”

The negotiations are hoped by both sides to bring an end an issue that has the potential to erupt into a long-term battle. According to Iceland Foods, they have no desire to stand in the way of a country that is making use of their own name to promote their goods as long as it does not conflict with the long standing business that the supermarket chain had established over the years.

The Icelandic government has also been clear on its stance and it does not intend to force the supermarket to register a new name, it is only seeking to end the company’s right to assert the Iceland trademark to block native companies from using “Iceland.”

Gujarat High Court Passes Verdict Against Entry Tax On Ecommerce Goods - Reduces Liability On Marketplaces

In the case of E-commerce Marketplaces Vs Gujarat State Entry Tax, the Gujarat High Court has reportedly granted some relief to the companies. The tax liability can now be reduced to the extent of central sales tax paid in the state of origin.

The order was passed by a division bench of Justice MR Shah and Justice BN Karia of Gujarat High Court, in a case relating to Flipkart and its group company Instakart. The ruling will ensure that the total tax paid on the goods purchased by consumers in Gujarat from ecommerce companies is equal to the tax paid levied on similar goods in the state.

The decision is in line with the judgement given by the Supreme Court on November 11, 2016, wherein the states were allowed to impose an entry tax on ecommerce goods, but also mandated to ensure that it should not discriminate when compared with the tax imposed on similar goods by a state on its local traders.

Long Story Short.

The Gujarat government passed the bill to levy entry tax on goods purchased through ecommerce portals in March 2016. As per the government, the previous bill affected the local traders as the goods on ecommerce websites were sold at a much cheaper price as no taxes were levied on these goods.

The ecommerce marketplaces including Flipkart, Amazon and Snapdeal alleged that they are a facilitator and an intermediary. The tax, if applicable, should be imposed on the merchant directly, and not on the marketplace. However, looking at the innumerable transactions happening via ecommerce marketplaces, states find it easier to impose the tax on the marketplace or delivery entity instead of the seller.

After Flipkart, Amazon too filed a case against Gujarat State Government for imposing Entry Tax. Flipkart also sued the states of Uttarakhand, Assam, Rajasthan, and Madhya Pradesh on similar lines.

Prior to this, in October 2015, Flipkart, Amazon and Snapdeal had collectively decided to stop delivering products exceeding INR 5,000 in value, in UP and Uttarakhand. The decision was made citing the harassment by tax authorities, wherein buyers needed to file VAT form and provide the details of vehicle shipping good while purchasing goods from them.

Other States With Taxes On Ecommerce Goods

Uttarakhand: In December 2015, the Uttarakhand government had imposed 10% tax on all ecommerce goods entering the state. In response, Flipkart filed a case against the state of Uttarakhand for imposing this entry tax on ecommerce goods.

Jammu and Kashmir: Tax is levied in case of non-registered dealers and individuals for goods above INR 4,999.

Maharashtra: The state has an entry tax on ecommerce goods.

Sikkim and West Bengal: Both the states have 1% tax on ecommerce goods.

Bihar: Shipments below INR 10,000 have tax applicable.

Himachal Pradesh: If the TIN is not mentioned then entry tax is levied. A 5% entry tax for individual & non-registered dealers, and 3% for government bodies.

Madhya Pradesh: In his budget speech, Madhya Pradesh Finance Minister Jayant Malaiya said the government wishes to impose an entry tax of 6% on goods purchased online to compensate for the loss due to ecommerce.

Assam: According to recent reports, Assam was also planning to levy a tax on ecommerce goods.

A few state governments charge these taxes in form of octroi and the amount ranges from 3% to 6% in different states. The situation is expected to become clear with the induction of the GST in April 2017, provided ecommerce marketplaces are defined correctly, so as to have the right kind of tax levied on them.

The development is first reported by ET.

India’s Supreme Court Says Movie Goers Must Listen to National Anthem Before Screenings

India’s millions of Bollywood-mad movie goers will soon start a trip to the cinema with a mandatory dose of patriotism.

The country’s Supreme Court said in an order Wednesday that all movie theaters should play the national anthem with an image of the Indian tricolor on the screen before the start of any feature film. All those present in the hall “are obliged to stand up to show respect,”

The national anthem has long has been played in theaters in a few Indian states including Maharashtra, home to Mumbai where the Bollywood movie industry is based, but this is the first time that the apex court has given an order making it mandatory in all cinemas across the country.

The court’s ruling comes at a time when patriotism is in the headlines as Prime Minister Narendra Modi tries to rally the diverse nation behind him to fight corruption, untaxed money, and terrorism.

“Be it stated, a time has come, the citizens of the country must realize that they live in a nation and are duty bound to show respect to national anthem which is the symbol of the constitutional patriotism,” the two-judge bench’s order said, invoking India’s constitution, which says respecting the national anthem is one of the fundamental duties of every Indian citizen.

The court said it had issued the directives “for love and respect for the motherland is reflected when one shows respect to the national anthem as well as to the national flag.”

The court was hearing the petition from Shyam Narayan Chouksey, a 77-year-old retired government engineer and social activist based in the city of Bhopal in central India. Mr. Chouksey said in an interview that he wanted the court to “clear all the doubts and confusions regarding the proper use of the national anthem.” He said he was unhappy with what he saw as the rampant misuse and commercialization of the national anthem.

Mr. Chouksey said that the idea came from his youth days when cinemas played the anthem after the movie ended. “But the people were in a rush to go and they rarely paid attention.”

“In Europe and America, people don’t throw garbage and litter everywhere because they have public spirit,” Mr. Chouksey said. “In India, people don’t have that public spirit, which begins through respect for the national ideals and symbols like the national anthem.”

The court said the order should be enforced within 10 days. It didn’t specify what action the authorities could take against violators but said that it was giving directives only as an “interim measure” awaiting the response of the federal government in New Delhi. The next hearing in the case is on Feb. 14.

A lawyer for the Indian government told the court that the government will bring the order to public attention through electronic and print media.

Some critics said Wednesday that the order took the tradition of playing the national anthem at events too far, citing Nobel Laureate Rabindranath Tagore, composer of the song.

“It is my conviction that my countrymen will gain truly their India by fighting against that education which teaches them that a country is greater than the ideals of humanity,” he wrote in a 1917 essay on nationalism.

Source: http://blogs.wsj.com/indiarealtime/2016/12/01/indias-supreme-court-says-movie-goers-must-listen-to-national-anthem-before-screenings/

Kiku Sharda controversy: Are India’s dealings with comedy is schizophrenic?

Not everyone can get away depicting a public figure — the head of a ‘spiritual group’ at that — in a multicoloured crochet two-piece. Or in a bejewelled body suit bearing the words ‘Royal Rock Star’. Or tossing aside an elephant by its legs. Or demolishing a rugby team single-handedly. These inspired images of Dera Sacha Sauda chief Baba Gurmeet Ram Rahim Singh are not depicted by comedian Kiku Sharda, who has been sent to 14 days’ judicial custody for mimicking the godman on a comedy show. These are scenes from the Gurmeet-starring, Gurmeet-directed, Gurmeet-written films, MSG: The Messenger and its sequel.

So why has Sharda been jailed for “outraging religious feelings”? Simply because he made fun of the godman in a comedy show, while Gurmeet and his followers are dead earnest. The irony is that in 2007, Gurmeet was accused by radical Sikh organisations for hurting religious sentiments by ‘mimicking’ Guru Gobind Singh in an ad. India’s dealings with comedy is schizophrenic.

Jokes on public figures and deities ricochet in living rooms and websites, essentially wherever the identity of those laughing is not brought to light. Once a comic take on anyone considered ‘important’ moves from this profane semi-private space to the sanctimonious public one, angry hysterics — fine material for public spectacle — tumble out to claim space in the ‘competitive outrage’ domain. Thus a petition to the Supreme Court demanding a ban on ‘Santa-Banta’ jokes, which the apex court has said it will “examine seriously”. Sharda’s arrest for making fun of Gurmeet in a comedy show is even more ludicrous. If it wasn’t a sad commentary on the extreme prickliness tolerated and encouraged in 2016 India, it would have made for extremely absurdist comedy.

http://blogs.economictimes.indiatimes.com/et-editorials/kiku-sharda-controversy-are-indias-dealings-with-comedy-is-schizophrenic/

Scrapping NJAC: Judiciary versus not executive but will of the people

A five-judge Constitution bench of the Supreme Court on Friday scrapped the National Judicial Appointment Commission – passed by Parliament as the 99th amendment to the Constitution – disallowing the Executive a hand in selection of judges for appointment to High Courts and the Supreme Court.

Though one of the judges, Justice Chelameshwar had his reasons to uphold the validity of NJAC, the ruling will prevail till the government of the day at the Centre decides its future course of action to protect its Constitutional amendment. Therein is the recipe for a future confrontation between the judiciary and the executive on the issue of judicial independence.

India is free, egalitarian and democratic and values judicial independence. This independence in practice has to be seen in the level of transparency in the appointment of judges to the higher judiciary. The Indian judiciary, by dint of carrying on the task of upholding the Constitution and champion the fundamental rights of the people, has necessarily to be seen to have judicial accountability for itself.

What better way to uphold than to have a system of judicial appointments not exclusively headed and maintained by judges themselves? That is where the NJAC comes into the picture. And by scrapping the NJAC, the judiciary has opened itself to a lot of questioning. It is not the case of the judges appointing a bad judge or a good judge; it is of whether it can ever look fair for judges to appoint judges among themselves.

Judicial independence is a concept born in the United States where ironically, the selection and appointment of judges is clearly a political process with all powers retained by the executive. In India, on the contrary, the NJAC was a step towards enlarging the appointments panel to include the judiciary itself. The prevalent, collegium process of the judiciary itself appointing judges was felt a bit too independent an exercise which brought about the question of judicial accountability. That these are times when the Indian judiciary is seen to exercise judicial activism through frequent observations on the country’s political and social life, thus reinforcing that the executive is at times weak and at best indecisive, is an altogether separate matter.

It is the same principle of judicial accountability that provides a hierarchical system of the Supreme Court over the high courts and the high courts over the subordinate judiciary. However, the Supreme Court does not have an authority above it. So, how will the apex court account for accountability? The age of whimsical Victorian morality is long past us and Indian judges themselves have often admitted that they too are humans and therefore subject to mistakes. They are the conscience-keepers of the Constitution. Does it mean they are accountable only to themselves?

The entire controversy between the judiciary and the executive over the appointment system arose because of follies committed by both in the past. In the early years after Independence, it was so that most of the judges of the Supreme Court were previously judges of the high courts, with the senior-most of them taking over as Chief Justice of the apex court. It was in 1958 that the Law Commission of India found that the process did not take merit into account.

The Commission’s view-point was ignored until former Prime Minister Indira Gandhi decided to openly interfere with the judicial appointments, thus confirming her authoritarian mood that would eventually plunge India into the dark period of Emergency. In 1973, she appointed Justice Ajit Nath Ray as the Chief Justice, superseding three justices. She obstinately named his successor too – Justice MH Beg – superseding Justice HR Khanna who, coincidentally had dissented in a 1975 case on the need for Emergency detenus to have recourse to legal remedy.

The judiciary stung by such blatant misuse of power, and turning a blind eye to the less than proficient postures of the two Indira’s appointees, decided to bring in safeguards. The issue that remained unresolved in major judicial debates and in the deciding of such cases in courts was the nature of “consultation” (of who-ever, the Chief Justice or the President through the executive, etc) in the appointment of judges. Through rulings in what are called the First Judges’ Case (1981), the Second Judges’ case (1993) and the third Judges’ case (1998), the judiciary twisted and turned with this word.

First it said the Constitution talks about “consultation” and not “concurrence”, meaning thereby that while the Chief Justice can be consulted, the opinion of the President and not of the Chief Justice will have primacy. That was fine with the Constitutional provision. Then it made a turn, saying the opinion of the Chief Justice should have primacy. This was against the provision of the Constitution which says the President will appoint the judges after consulting the Chief Justice. This amounted to the judiciary becoming what some legal experts a self-appointed institution which was not as per the Constitution. The judiciary elsewhere in the world does not have such freedom to appoint judges by itself. In any case, since then, the collegium system came into existence which nullified the role of the executive in higher judicial appointments, the executive nursing its political wound saying the judiciary was over-reaching and that the executive would have to have a say in the appointments.

The NDA government brought in a bill to set up the NJAC. It was passed by Parliament in 2014 and came into force from this April. At last count 20 states had ratified it. However, some legal experts challenged it in the supreme court saying it stifled the role of the chief justice of the Supreme Court, subverts the independence of the judiciary and works against the “basic structure” of the Constitution.

Their contention was that the “basic structure” of the Constitution is not amenable to change at all and that judicial independence is one key aspect of the “basic structure” and therefore cannot be diluted by Parliament. A landmark judgement in 1973 (Kesavananda Bharathi case) had classified certain elements of the Indian Constitution as "basic structure". It has been held that the “basic structure” of the Constitution cannot and should not be tinkered with, as it belongs to the core of the Constitutional spirit.

The fight between independence – whose? -- and accountability – whose? -- has only begun.

The larger issue the judiciary will have to think about is the primacy of the will of the people in democratic India. Both Houses of Parliament had passed the NJAC Bill and 20 state assemblies have already ratified it. By committing itself against the NJAC, the Supreme Court with one stone wasted the opportunity of tweaking the NJAC to its satisfaction in consultation with the government and, secondly, has put itself in an impossible position to defend in future its preferred system of appointing judges on its own.

http://www.ibnlive.com/blogs/india/vvp-sharma/scrapping-njac-judiciary-versus-not-executive-but-will-of-the-people-14329-1152631.html

Supreme Court suspends ban - Mumbai dance bars to open

Acknowledging the right of women bar dancers to follow their profession, the Supreme Court suspended Thursday a legal provision banning dance performances in Maharashtra and directed the state government to grant licences to the bar owners without insisting on the prohibitory legislation. Critical of the 2014 amendment in the Maharashtra Police Act that had imposed a total ban on dance bars and dance performances, a bench of Justices Dipak Misra and P C Pant noted that the state government re-enacted a similar piece of legislation after the top court struck down a prohibitory provision in 2013.

The bench rejected Maharashtra government’s argument that the two provisions were different and the 2014 amendment was perfectly valid. “The difference that is perceptible from the provisions which have been reproduced above are really immaterial,” it said. The bench went on to note that there are situations when the “legislature steps in to remove the base” of a judgment and to validate a provision after the court has declared the provision as unconstitutional. In some other cases, the legislature brings an amendment whereby the defects pointed out by the court are removed, said the court, adding: “Significantly, in the present case, similar provision has been introduced by enhancing the sentence of fine.”

Underlining the necessity of issuing the interim order after it was told that the dance bars have been closed in the state since 2005 and nothing changed even after the apex court’s 2013 judgment, the bench said: “We think it appropriate to stay the operation of the provisions enshrined under Section 33A(1) of the Act.”

However, it added a caveat that “no performance of dance shall remotely be expressive of any kind of obscenity in any manner” and that “the licensing authority can take steps so that the individual dignity of a woman is not affected and there remains no room for any kind of obscenity.”

The bench said police and other government bodies have sufficient power to “safeguard any violation of the dignity of women through obscene dances” and they will make sure such performances do not adversely affect public order.

“As we are staying the provision, if the members of the petitioner apply for licence, the same shall be considered in accordance with law without taking note of the restriction as Section 33A has been stayed by us,” held the bench.

It asked state government to file its affidavit in response to a petition filed by the Indian Hotel and Restaurants Association and others, which have pleaded the court to declare as unconstitutional amended Section 33A. Before the amendment in 2014, Section 33A allowed dance performances in “exempted” establishments like three-star and five-star hotels but banned it elsewhere on an argument that the dance bars were obscene and acted as pick-up points for vulnerable girls. Such a classification between three-star and above hotels and other dance bars was held to be bad in law and the top court quashed the enabling provisions, slamming the “elitist” attitude of the state government.

The then Congress-led Maharashtra government moved to plug this legal loophole instead of accepting the court’s order to think of “imaginative alternative steps” so as “to bring about measures which should ensure the safety and improve the working conditions of the persons working as bar girls.”

The state cabinet decided to extend the ban to high-end hotels and private clubs too and amended Section 33A, thereby affecting a total ban on dance bars and dance performances.

http://indianexpress.com/article/india/india-news-india/dance-bars-to-reopen-in-maharashtra-as-supreme-court-puts-ban-on-hold/

Collegium system not perfect, but superior to NJAC, says former CJI

Does the government’s involvement in the appointment of judges to higher courts pose a threat to the independence of the judiciary? This question is central to the ongoing debate over the National Judicial Appointments Commission (NJAC). The NDA government's decision to replace the collegium system which has been in place since 1993, has left the legal fraternity somewhat divided.

A few members of the fraternity firmly believe the collegium system is "unconstitutional and anti-democratic" where judges are appointed through "secret soundings and cronyism" while others say that the government wants to "interfere" in the independence of the judiciary and it needs to be resisted.

The collegium comprises the Chief Justice of India, four senior most judges of the Supreme Court and the chief justice of a particular high court and its two senior most judges. The NJAC, which was brought into existence after inserting a new article (Article 124A) in the Constitution, consists the Chief Justice of India as ex-officio chairperson, two other senior judges of the Supreme Court, the Union Minister of Law and Justice and two eminent persons to be nominated by a committee consisting the Chief Justice of India, the Prime Minister, the Leader of Opposition in the Lok Sabha or where there is no such Leader of Opposition, then the Leader of the single largest Opposition party in Lok Sabha. The eminent persons shall be nominated for a period of three years and shall not be eligible for re-nomination.

At present, the Supreme Court is examining the constitutionality of the NJAC and has refused to accept the government’s demand that the matter be referred to a larger bench of 11 judges from the existing five-judge bench headed by Justice JS Khehar. The court has said the hearing of the case will "continue on merits".

Justice VN Khare, former Chief Justice of India, says there is nothing bad with the existing system but accepts that there is scope for its improvement. "There is nothing bad with the collegium system. It is, in fact, superior to the NJAC in many ways. It will also be unfair to say that it is not transparent. But yes, it can be further improved by making it more transparent. One or two persons nominated by the President can be included in the selection committee,” he toldFirstpost.

When asked who should be nominated, he says the President can nominate an ex-CJI or judge in the collegium. But he strictly says there should be “no say of politicians in the appointment of judges because usually, the government is the main opponent in the people’s cases and there is chances abuse of executive powers”.

He refused to accept the allegation of bias, favouritism and nepotism in the appointment of judges but accepted that there is corruption in judiciary. “I cannot claim that there is no corruption in the judiciary but its prevalence is negligible,” he added.

Adding that the government passed the NJAC Act in “undue haste and without consulting the judiciary”, Professor Faizan Mustafa, vice chancellor of NALSAR University of Law, Hyderabad, told Firstpost, “The independence of the judiciary is not the private right of judges; it is the right of citizens. Ultimately, judicial legitimacy rests on public confidence in the courts. Appointment of judges is seen as a crucial mechanism to achieve judicial independence. Judges must be independent of executive, senior judges and in their ideology.”

“The NJAC in its present form may not achieve these ideals," he says arguing "We had the primacy of executive in the appointment of judges in the first four decades of our republic. Though most of the judges picked up under this system were independent, upright and fearless, at times the government did succeed in appointing several pliant and submissive judges." He feared that the NJAC with Law minister as member may be used by the government in appointing judges of its choice. “Moreover, since the government is biggest litigator, it should not be allowed to cherry pick judges.”

There’s no clarity even on the two ‘eminent persons’ and the vagueness is deliberate, he said. "They are to be selected by the Prime Minister, the Leader of Opposition and the Chief Justice of India. One possibility is that two politicians would join hands and make the CJI’s opinion irrelevant as there is no mention that the selection should be unanimous or alternatively the CJI in the hope of becoming Lokpal, Governor or NHRC Chairman would join the Prime Minister and make the opinion of the Leader of Opposition insignificant”.

Advocate Shahid Ali, senior lawyer at the Delhi High Court, says the “attempt to interfere in the independence of judiciary through the NJAC will prove to be fatal for the democracy and detrimental for fundamental rights guaranteed in the Constitution”.

Advocate KC Mittal, former president of Delhi High Court Bar Association and ex-chairman of the Bar Council of Delhi, strongly opposes the collegium system but appears to be apprehensive about the future of the NJAC.

“After an extensive debate about the role and power of the judicial processes, the framers of Constitution never agreed to absolute power to the judiciary in matter of appointment of judges, leave aside the so-called innovative idea of collegium. The text of our solemn document is very clear and unambiguous,” he told Firstpost.

“Prior to 1993, the executive alone had the over-riding power to make the appointments in consultation with the judiciary. The names of aspirants to judgeship or recommendations thereto by the Chief Justice of a High Court would get examined in the closed system of the executive. It was not bound by the recommendations and was competent to take final decision,” he argues.

However, in the Supreme Court Advocates-on Record Association vs Union of India case, the nine-judge bench took over the power by judicial interpretation to introduce the collegium system and make recommendations binding on executive. Thus, the concept of “consultation” was judicially transformed into “concurrence”.

“The system introduced by the judgment as reinforced by 1998 reference to the Supreme Court has been practiced by the apex court and blindly followed by the government since then. The Constitution remains as it was before the 1993 verdict.

Interestingly, he says, the reaction of the bar then was positive as it thought that the removal of “evils” in the appointment of judges would lead more welcome reforms, which would take care of “massive complaints of nepotism, favouritism and even corruption”. “But soon, within a couple of years, disappointment with the system was creeping as the scenario did not change. Post 1993, the experience of two decades is that the system made by the judiciary proved to be no less worse than what was prevalent in the pre-collegium days.

The veteran lawyer alleged some compromise matrix works in recommending the names at the whim and fancies of each member of the collegium. “This is not gossip but truth filtering out of the experience and knowledge gathered over the years. Everyone connected with the administration of justice pontificates on the need to fill up vacancies but refuses to remove the basic causes affecting the process of appointment based on give-and-take. This pick-and-choose formula is disastrous as it undermines the creditability and veracity of collegium mechanism. To put it differently, the experiences have shown that those who have God Father in the higher ups make task easy and smooth to push the name(s), even get cleared by the IB (intelligence Bureau) to ultimately make appointment comfortably,” Mittal said.

He said people believe in evolution of the system but with the passage of time it becomes redundant. “When the executive-controlled system failed, the collegium came in. When collegium is now under shadow, we jumped to the NJAC but where is the guarantee that the new law would not go the same way? Is it humanly possible that six members of a supreme body will have firsthand knowledge of each and every candidate? They would ultimately depend either on hearsay or some source of their own. This again would be unscientific, irrational, unpractical and unworkable,” 

http://www.firstpost.com/india/collegium-system-not-perfect-superior-njac-says-former-cji-2242812.html