Gist of EPW April Week 2, 2019

The Economic and Political Weekly (EPW) is an important source of study material for IAS, especially for the current affairs segment. In this section, we give you the gist of the EPW magazine every week. The important topics covered in the weekly are analysed and explained in a simple language, all from a UPSC perspective.

TABLE OF CONTENTS

1. Constitutional Rights, Judicial Review and Parliamentary Democracy
2. Facilitation and Whistle-blower Protection by Indian Firms

1. Constitutional Rights, Judicial Review and Parliamentary Democracy

Introduction

• In the 70th year of the Republic we find ourselves engaged in a heightened debate on the imperatives of preserving the constitutionally bound jurisdictional equilibrium/ separation of powers between the legislative, executive and judicial branches of the Indian state even as we celebrate the expansion of fundamental freedoms and the resilience of our democracy.
• It is about the reach of judicial review power exercised by the Supreme Court and the high courts, often extended through the agency of what is popularly known in India as Public Interest Litigation (PIL) or social action litigation.
• The excellent contribution of the Supreme Court is in asserting the inviolability of constitutional rights, particularly the right to dignity as the core constitutional value notwithstanding, but the rightful limits of judicial intervention in the executive and legislative domains need to be addressed.
• This article seeks to advance the debate on related jurisprudential issues in the larger framework of a functioning parliamentary democracy.

The original rationale and justification of PIL

It has emerged as a primary instrument in the expansion of judicial review is best summed up in the words of its principal and early propounders, Justices P N Bhagwati and V R Krishna Iyer, as:

• A strategic arm of the legal aid movement which is intended to bring justice within the reach of the poor masses, who constitute the low visibility area of humanity.
• PIL is brought before the Court not for the purpose of enforcing the right of one individual against another as happens in the case of ordinary litigation, but it is intended to promote and vindicate public interest, which demands that violation of constitutional or legal rights of a large number of people who are poor, ignorant or in a socially or economically disadvantaged position should not go unnoticed and unredressed.

Instrument of Judicial Review

• In D C Wadhwa v State of Bihar (1987), the Court, expounding the philosophy of limited government, declared that the exercise of executive power has to be within the parameters of constitutional restraint failing which any member of the public has sufficient interest in the subject matter to impugn the practice by means of a writ petition, which the Court is bound to entertain and adjudicate.
• Through an expansive interpretation of Article 21 of the Constitution in Maneka Gandhi v Union of India (1978), the Court held that the “procedure established by law” envisaged in the said article had to be just, reasonable and fair to pass the test of constitutionality. Most significantly, through a conjoint reading of Articles 14, 19 and 21, the Court read the right to life under Article 21 as a right to live with dignity.
• In M Nagaraj v Union of India, the Court declared profoundly that fundamental rights in Articles 14, 19 and 21 “stand at the pinnacle of the hierarchy of constitutional value” in a fulsome recognition that “human dignity, equality and freedom were conjoined, reciprocal and covalent values” (Liebenberg 2005).
• Earlier in Board of Trustees of the Port of Bombay v Dilipkumar Raghvendranath Nadkarni, the Court had reiterated that “life” in Article 21 must encompass “the graces of human civilization that makes life worth living.”
• The Court’s expanding human rights jurisprudence recognised as fundamental, the citizens’ right to food, health, and education.
  • Instances of the Court’s intervention to expand the frontiers of these rights to include redressal for the killing of innocent people in false encounters and relief to the victims of custodial violence, etc, can be multiplied.
• In closing the cycle of expansive interpretation, the Court recognised the Directive Principles of State Policy as “the conscience of the Constitution” which give shape and meaning to fundamental rights. Imparting a dynamic dimension to the right to equality under Article 14, the Court has read the absence of arbitrariness as integral to the guarantee of equality and non-­discrimination.

Constituent Power

• The courts entrenched an expansive approach in articulating constitutional philosophy, established the foundational principles for the exercise of its judicial review jurisdiction traceable to Articles 13, 32, 136, 142 and 147 of the Constitution. (The high court’s judicial review jurisdiction is anchored in Article 226 of the Constitution.)
• It proceeded to hold that judicial review was a “constituent power,” and an integral component of the unalterable basic structure of the Constitution.
• The seeds of transformational jurisprudence aimed at the empowerment of disadvantaged citizens and governance accountable to the discipline of the Constitution were thus sown.

Epistolary Jurisdiction

• A process where citizens may write letters to apex court which stand treated as writ petitions for the enforcement of fundamental rights)

Judiciary entering the domains of Executive and legislature

• Moving beyond ensuring basic rights for citizens, the Court decisively extended its review jurisdiction to what are ex facie functions assigned originally and exclusively to the Executive Branch under the constitutional scheme.
  • Petitions to the Court have invoked judicial review in “public interest” to question major policy decisions of the government concerning policy choices, for example, in what are now known as the 2G spectrum and coal mines allocation cases.
• Challenge to proceedings of legislative assemblies and decisions of the speaker have also been entertained by the Court.
  • Decisions of the Court voiding a constitutional amendment approved by Parliament to alter the procedure for appointment of judges,
  • Exercising Review Powers in what is popularly known as the Armed Forces (Special Powers) Act (AFSPA) case following the constitution bench decision in the Naga People’s Movement of Human Rights v Union of India (1982)20 —to hold that the use of excessive force by the Manipur police or the armed forces of the union was not permissible and that a writ petition under Article 32 of the Constitution against such impermissible use of force was admissible—has extended the Courts’ review jurisdiction to cover not only administrative decisions but to domains hitherto regarded as the exclusive preserve of legislatures.
  • The long arm of judicial power has been extended to advising Parliament to “create a separate offence for lynching and provide adequate punishment for the same”
  • to “frame a law for disqualification of political candidates facing criminal charges to cure the malignancy,”
  • “To bring about a law to regulate street hawkers,”
  • “To bring law appositely to cover the field of honour killing.”
• Relaxed rules of locus standi, enabling a “public-spirited citizen” to knock at the doors of superior judiciary for redressal of a public wrong and vindication of a public duty by addressing the Court even through a letter/postcard, has created what is known as the “epistolary” jurisdiction which has extended the Court’s access to virtually every citizen who can show an infraction of a constitutional right as articulated in the Court’s pronouncements.

These cases are illustrative of the Court’s activist role located in the “living tree” constitutionalism

Concerns due to Expansive Judicial Review

• Protagonists of a wide judicial review jurisdiction argue that it subserves the rule of law
• They reject it as being anti-majoritarian or anti-democratic by locating its sanction in the Constitution itself—the social contract that reflects the will of the people.
• It has also been suggested that the separation of legislative and judicial space is premised that the legislature “is responsive to the popular will, [is] attuned to constitutional values and has greater capacity than the judiciary”
• The contrarians persist with a view in favour of restraint, arguing that in a democracy, people exercise their sovereignty through elected representatives and not through the unelected judges who must defer to the wisdom of parliamentary majorities.
• “Judicial supremacy,” “judicial excessivism,” or “despotism of an oligarchy” are seen as antithetical to democracy. Thus, arrangements of governance embodied in the Constitution resulting from the exercise of their free will cannot be used to deprive the ultimate masters of the right of final decision over their destiny. It is argued that “juridification of politics and politization of the judiciary” would be a loss for both the legislature and judiciary
• Activism of the Court towards a progressive expansion of judicial review has been criticised also on the basis of “institutional competence” where they have neither the competence nor the legitimacy”
  • The fate of the Court’s majority decision in the Sabarimala case is a resounding affirmation of the logic of the Court’s limited institutional competence and judicial restraint proposed by Justice Indu Malhotra in her minority judgment
    • A decision of the apex Court which invoked “essentiality” to test the freedom of religion has been criticised as an “obscure exercise [that] draws the court into an area which is arguably beyond its competence [and] gives power to judges to decide on matters of religion
  • In an eloquent exposition in the National Judicial Appointments Commission (NJAC) case, Justice Chelameshwar in his eloquent minority judgment rejected a distrust of the legislators in securing the constitutional fundamental and argued that:
    • To assume or assert that judiciary alone is concerned with the preservation of liberties and does that job well, is an assumption that is dogmatic, bereft of evidentiary basis and historically disproved…
  • In Manohar Lal Sharma v Union of India, the Court declined to entertain a PIL seeking the Court’s directions to restrain the union government from incurring security and other expenses with respect to certain individuals in the state of Jammu and Kashmir, holding that “nationally sensitive issues concerning the security of the nation …should be left to the executive … and that these writs are judicially unmanageable.”

The Court has been blamed for re-writing the Constitution and of judicial legislation in the guise of interpretation. The burgeoning judicial power has been criticised as “little more than an invocation and vehicle for judicial ideologies to masquerade as constitutional evolution,” and “academicians substituting an ideal of justice for the concrete articulation of justice actually in the Constitution”

Importance of Judicial Review

• Expansive Judicial Review jurisdiction is that it advances the cause of justice, human rights, reasonableness, tolerance and the basic principles of morality and good faith, all of which constitute the substantive aspect of democracy and rules out only those choices that are ex-facie unreasonable and inconsistent with democracy
• Human rights are seen as an ethical force to provide “inspiration for legislation” and are strong ethical pronouncements as to what should be done. Hence, the rise of the judiciary as a political and policymaking institution
• Liberal democracy needs to protect itself against “the rule of the mob.”
• John Adams stated that “despotism or unlimited sovereignty or absolute power is the same in a majority of a popular assembly, an aristocratic council, an oligarchical junto and a single emperor”

The Constituent Assembly debates that led to the framing of our Constitution demonstrated likewise, a clear disapproval of concentration of authority, in favour of dispersal and accountable power through institutional balances. It is in this framework of history and philosophy of limited government that the rationale of judicial review power has been repeatedly reiterated by the Court. Thus, in I R Coelho v State of Tamil Nadu (2007), the Court, referring to Articles 14, 19 and 21, articulated judicial review as “the principles of constitutionality … apart from the rule of law and separation of powers,” reasoning that “the principle of constitutionalism is now a legal principle which requires control over the exercise of Government power.”

Conclusion

• The challenge to “reconcile constitutional authority with popular sovereignty” raises larger questions about the quality of democratic representation, the primacy of individual choice and protection against the state’s oppressive power as a guarantee of the inviolability of human rights.
• While the Court’s jurisdiction as sentinel on the qui vive for protection and advancement of fundamental rights merits loud affirmation on first principles of constitutionalism, in the articulation of constitutional principles, the Court ought not to be seen as dismissive or disdainful of the processes of democratic governance.
• The presumption that the legislature understands the needs of its people and that even its discrimination and classifications are based on adequate grounds has been acknowledged by the Supreme Court
• In working out a compromise, the exercise of constituent power could be limited by a compelling necessity to intervene for the advancement of human rights
• The logic of balanced exercise of judicial power as an assurance of institutional stability and recognition of the boundaries of power is implicit in the constitutional arrangement and the Court’s fulsome acceptance of judicial fallibility. Evidently, interpretative finality vested in the Supreme Court cannot supplant constitutional supremacy with judicial supremacy.
• Thus Judges, wisened by experience, consistent by training, disciplined by law and elevated by knowledge are presumed to be equipped to weigh and balance competing values and principles—a function central to their role, and thereby establish “a diffusion of power which is characteristic of the whole”

2. Facilitation and Whistle-blower Protection by Indian Firms

Context

• Whistle-blowing is a critical aspect that helps in upholding corporate ethics. In recent times, there have been increasing awareness about whistle-blowing activities.
• The policies related to whistle-blowing among the BSE 30 companies in India are analysed.
• The findings indicate an urgent need to develop and enforce corporate policies to protect the whistle-blowers.

Definition of “whistle-blowing”

• The word “whistle-blowing” is of British origin and was derived from the practice of British police officers who blew their whistles to alert others of wrongdoing.
• In this regard, whistle-blowers and whistle-blowing have been helpful in unearthing various fraudulent and illegal activities in both the public and private sector organisations across the world.
• There are established laws across the world to facilitate whistle-blowing and to protect whistle-blowers.

Main Objectives of “whistle-blowers”

• Promotion of public interest
• Improvement of public service
• Preventing and eliminating wrongdoing in public and private sector organisations
• Promotion of compliance with laws,
• Encouragement and facilitation of disclosures
• Provision of procedures for whistle-blowing, and protection of whistle-blowers

Whistle-blowing in India

• In the Indian context, the concept of whistle-blowing dates back to the Arthashastra (around 300–250 BC) and there appears to have been some encouragement for whistle-blowing through reward systems in that era.
• Kautilya mentions that an informant who supplies information about misappropriation, if they succeed in proving it, get a reward.
• Though such systems were existent in the ancient texts, modern India did not take cognisance of whistle-blowing and pass legislations to facilitate it.
• But, the last two decades have witnessed a surge in recognising the need for whistle-blowing and whistle-blower protection.
• One of the first laws to protect whistle-blowers was suggested in 2001 by the Law Commission.
• Subsequently, the murder of 30-year-old Satyendra Dubey, a whistle-blower, made the Supreme Court direct the enactment of laws to handle whistle-blower protection.

Legislation

• After a reasonable bit of struggle, the whistle-blowers protection bill was introduced in 2012 and finally passed in 2014.
• These laws were aimed to facilitate whistle-blowing against public sector employees and bureaucrats. With Section 177 of Companies’ Act, 2013, the scope of whistle-blower protection extended to the private sector.
• The act directs the companies to establish vigil mechanism to report unethical behaviour or other concerns to management.
• It is mandatory for the listed companies, companies that accept deposits, and companies that have borrowed from financial institutions in excess of ₹ 50 crore under Section 177(9)
• Given this background, Indian companies have laid down whistle-blowing policies over the last four years. There has also been reasonable media coverage on issues related to whistle-blowing.
• In such a scenario, it is important to review the policies that have been made by these companies and the extent of facilitation and protection provided by them for whistle-blowing.

Whistle Blowers Protection Act, 2014

Whistle Blowers Protection Act, 2014 is an Act in the Parliament of India which provides a mechanism to investigate alleged corruption and misuse of power by public servants and also protect anyone who exposes alleged wrongdoing in government bodies, projects and offices.

The wrongdoing might take the form of fraud, corruption or mismanagement. The Act will also ensure punishment for false or frivolous complaints.

Main Objective

• An Act to establish a mechanism to receive complaints relating to disclosure on any allegation of corruption or wilful misuse of power or wilful misuse of discretion against any public servant and
• To inquire or cause an inquiry into such disclosure and to provide adequate safeguards against victimization of the person making such complaint and for matters connected therewith and incidental thereto.

Salient Features

• The Act seeks to protect whistle blowers, i.e. persons making a public interest disclosure related to an act of corruption, misuse of power, or criminal offense by a public servant.
• Any public servant or any other person including a non-governmental organization may make such a disclosure to the Central or State Vigilance Commission.
• Every complaint has to include the identity of the complainant.
• The Vigilance Commission shall not disclose the identity of the complainant except to the head of the department if he deems it necessary. The Act penalizes any person who has disclosed the identity of the complainant.
• The Act prescribes penalties for knowingly making false complaints.

Limitations of the Act

• The lack of public debate and consultation on the bill seems to indicate the danger of it becoming another “paper tiger”. Typically, ministries proposing draft legislation involve a process of public consultation to give the public an opportunity to carefully critique its provisions.
• The law has neither provisions to encourage whistleblowing (financial incentives), nor deals with corporate whistle-blowers.
• It does not provide a penalty for attacking a complainant.
• The act has a limited definition of disclosure, and does not define victimisation. Other countries (such as the United States, United Kingdom and Canada) define disclosure more widely and define victimisation.

Analysis of whistle-blowing policies of Corporates

• To analyse whistle-blowing policies of Corporates top 30 companies listed on the Bombay Stock Exchange (BSE) that constitute Sensex were chosen for the study.
• The corporate ethics in these companies should throw light on the overall practices of corporate governance among the Indian corporate sector.
• In the facilitative aspect, the procedural and confidence-related issues were studied. In the procedural issues, the analysis first relates to the appropriate authority for the purpose of whistle-blowing.
• Interestingly, 20% of the companies did not touch upon the procedural aspects at all. Further, in terms of mode of complaint, only about half the companies provided postal details and a similar proportion cited email as a medium. In addition, only about 10% companies allowed complaints through telephone.
• It is surprising to note that about 20% of the companies mandated that the complaint will be entertained only if it is filed within 30 days of complainant becoming aware of the wrongdoing.
• In contrast, none of the companies provided any timelines for action to be taken against the misdoer.
• A key component of whistle-blowing regulation is related to the protection provided to the whistle-blower. With regard to that, we find that anonymity is typically encouraged by companies across the world to encourage whistle-blowing.
• In the Indian scenario, we do not find firms encouraging anonymous complaints. We find that only five of the 30 companies seem to allow anonymous whistle-blowing.
• A good practice in whistle-blowing policy is to mention the kind of wrongdoings, the potential retaliation, and the explicit protection in the context of the organisation.
• This was not necessarily the case with the companies considered in this study. The study found that almost one-fourth of the companies do not even mention protection explicitly.
• Another key component of whistle-blowing policy is the way to handle honest mistakes by the complainant.
• This is important as the complainant sometimes may not be sure of whether there has been a wrongdoing but could file a complaint just to make sure something unethical or illegal or wrong does not happen.
• Another interesting aspect in the policies is that they mention that employees should report further if they are not provided protection. This seems to be a strange provision.
  • First, the policy should provide confidence that the protection would be provided and there is no concern related to not obtaining provision.
  • Second, if at all there is a case of protection not being provided, there is high doubt on what further reporting by employee could achieve. Instead, some committee could be probably set up to monitor retaliation due to whistle-blowing for the complainant.

Conclusion

• There is a need for these organisations to improve the policies along both these lines, dimensions of facilitation and protection.
• Both facilitation and protection have to be taken seriously by the firms and the procedures need to be laid down such that there is an encouragement for whistle-blowing.
• The current policies seem to indicate that the firms have just laid down the policies more out of an obligation than with any enthusiasm.
• The firms also need to understand that fraud reporting will also help reduce costs to the firms due to frauds, and developing an ethical culture could also be of benefit to them.
• At this stage, the policies are so weak that they cannot even be called paper tigers.

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