Self-inflicted Wounds

When the Supreme Court directed the Government of India to establish a National Disaster Mitigation Fund in May 2016, Finance Minister Arun Jaitley observed that India’s judiciary was destroying its institution structure “step by step, brick by brick”. Who is responsible for this judicial activism is a matter of debate, but there is no debating the fact that the judiciary is spreading its tentacles in all directions, with unintended collateral consequences. The issue really comes down to how the judiciary defines its core mission and priority: an institution that provides quick, effective justice in the everyday humdrum world of living and conducting commerce, or a visionary think tank dispensing jurisprudential principles on matters of state policy?

Generally speaking, as societies develop and become structurally and technologically complex, preserving order requires the creation of a variety of new and complicated laws. Some of these laws require domain expertise, others create too much room for newer types of high volume litigation, yet others require a unique mindset to adjudicate on. India’s evolving IPR regime is typical of laws that require high domain expertise. Our tax regime is a great example of a legislature inventing new taxes, opening doors to a bewildering variety of new litigation. As for the need for a special mindset, I can do no better than identify BIFR, a tribunal designed not to adjudicate on rights and obligations, but to revive businesses. To cut to the chase, the era of the generalist judiciary is well behind us. This reality is widely recognised, yet our judiciary continues to be generalist in orientation, structure and organisation.

The solution has always been common knowledge. India has for decades legislated a variety of specialised tribunals into existence. These are designed to be run by specialists who can very quickly decide a lot of cases. The reality is different. These tribunals are stuck in a logjam no different from the one being suffered by the courts. Reason: India’s tribunals end up mimicking Indian courts in skillsets, structure and procedure, with predictable results. Let’s look at a typical recent example.

The Competition Commission of India is an antitrust body created to promote competition, combat anticompetitive practices, prevent abuse by dominant enterprises, and so forth. It’s a proactive job, rather different from the after-the-fact autopsies judges normally conduct. It takes some years of academic and in-market commercial experience to understand the dynamics of markets, to comprehend how certain behaviours distort markets, and to acquire expertise in this discipline. For this reason, this body, by its very constitution consists of a chairperson and between two and six members. All of them are eligible for appointment if they have “special knowledge of, and such professional experience of not less than 15 years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs or competition matters, including competition law and policy”, among others.

Any institution is only as good as the people who run it. The current Chairman is a former IAS officer who served as secretary in the Union Ministry of Women and Child Development. Two members retired from the Indian Economic Service, one of them several decades ago. One is a retired IAS officer who served as secretary, Food Chemicals and Fertilizers. Another member is a former judge of the Delhi High court, before which he was variously a Metropolitan Magistrate and a member of a Rent Control Tribunal.

The ‘constitutional problem’ carries into the Competition Appellate Tribunal. The qualification for the job includes “professional experience of not less than 25 years in competition matters including competition law and policy, international trade, economics, business”, etc. In reality, this tribunal has three retired Supreme Court judges serving it. As for the rest, we have a former director in the Ministry of Corporate Affairs, a former secretary of CCI, an IAS officer and a bureaucrat formerly with the Central Board of Direct Taxes. I do not question the competence of these respected personalities in what they do, but anti-trust regulation is not their core competence. Does great expertise in serving government or the judiciary constitute 25 years of specialised knowledge of international trade, finance, accountancy, management, and so forth? Surely, to acquire great expertise in international trade, you have to be a trader, rather than a civil servant issuing trade licences to traders, or a reader of legal tomes citing judgements on trade!

Indeed, my fundamental objection to the way we constitute tribunals goes beyond the absence of domain expertise. Ageing is irreversible and inevitable. Our respect for our elders ought not to eclipse our pragmatism. If a senior judge is still on top of his game, I don’t see why his tenure should not be extended within the judiciary, his services used to decide the crores of cases that await judicial attention. I don’t see the logic in retiring him from court work and appointing him to a specialised tribunal, forcing him to learn new skills. It makes more sense to promote the evolution of an ecosystem of independent professionals who specialise in relevant skills.

Why does India believe that all domain wisdom resides only in its bureaucrats and its judges? I put it down to an extraordinarily optimistic self-belief, which is reflected in the courts’ judgements. One example will suffice. The original Companies Amendment Act 2002 envisaged tribunals substantially run by technical members. Chennai lawyers did not agree. In Union of India vs. R. Gandhi, President, Madras Bar

Association [(2010) 11 SCC1], the court was called upon to decide if transferring the powers of the High Court under the old company law to the NCLT violated the doctrine of separation of power, thereby eroding the independence of the judiciary. Given the kind of jurisdiction that had been transferred, the Supreme Court of India took the view that where “jurisdiction to try certain category of cases are transferred from Courts to Tribunals only to expedite the hearing and disposal or relieve from the rigours of the procedural laws, there is obviously no need to have any non-judicial Technical Member”. This means that if courts fail to do a job well, any institution you create to do the job better must use the same people who couldn’t get the job done in the first place!

This was by no means the deepest cut. The court took the view that “it is erroneous to assume that company law matters require certain specialised skills which are lacking in Judges”. Having thus decided that judges were expert enough to decide technical matters, it also went on to increase the term of appointment of members from three years to five because “a term of three years is very short and by the time the members achieve the required knowledge, expertise and efficiency, one term will be over”. Clearly, after holding that retired judges were technically competent, it expected them to be taught the job!

Now, we may adopt the cynical narrative that legal judgements on such matters are only turf wars between bureaucrats and judges seeking to slice the post-retirement employment pie. I’d like to take a more liberal view. Everyone, not just judges, is sceptical of executive intentions and wants to keep a wary eye on how tribunals function. They do this by inserting retired judges into them. Lost completely in translation is the idea that generalist judges cannot be the optimal resource to run specialised tribunals. The descent into dysfunction is thus paved with perfectly good intentions. The judiciary is preoccupied with socially engineering a more ethical society. Deep down, the tribulations of business struggling to resolve commercial disputes before a judiciary that barely functions is not really on the agenda. It is upon this distorted priority that the judiciary must introspect. Is it unfair to ask any institution to perform its key role before it assumes new ones? Is it wrong to be realistic in assessing one’s capability, modest in one’s ambition, and crystal clear in one’s understanding of where one’s karmic duties lie?.

Originally published on August 14, 2016 in Business Today.



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