Final india legal 15 september 2015 by India Legal

PATEL AGITATION: Nightmare for Modi

SURVEY:

Startling revelations about what Muslim women think of Personal Law

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September 15, 2015

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WHO KILLED FTIL? The inside account of how a series of legal and bureaucratic maneuvers led to the arrest of stock exchange czar Jignesh Shah and destroyed a true “Make in India” financial enterprise 22

THE GREAT FALL OF CHINA What does it mean for India? 62

POLITICAL PARTIES Hypocrisy on RTI 14 SEX VIDEOS Legal loopholes 50

EDITORIAL Judiciary wields a big stick to improve government schools 03

LETTER FROM THE EDITOR

INDERJIT BADHWAR

A TASTE OF THEIR OWN MEDICINE

ERHAPS one of the most powerful news developments of the year— lost in the din of Indo-Pak relations and cloak-and-dagger spy stories— is how India’s courts have struck a commendable and unprecedented legal blow to waste, fraud, corruption and nepotism in government-run schools which have been the enemies of the constitutional right to basic quality education for this nation’s children. When the Supreme Court of India and the High Court in Allahabad speak as one powerful voice, holding the administration solely responsible for the abysmal condition of state-run schools, the government needs to sit up and listen—and listen hard. The latest missile came from Justice Sudhir Agarwal three days after India celebrated Independence Day this August 15. In a scathing judgment that should make every Indian state sit up and take note, the judge, acting on petitions filed by a UP teacher, Shiv Kumar Pathak, and several others regarding the appointment of teachers and filling of vacancies, passed an unusually stern and innovative order. He asked the UP chief secretary to ensure that government servants, elected representatives and members of judiciary “and all other persons who get any benefit or salary from state exchequer or public fund” send their children to primary schools run by the

State Board for Secondary Education. He also ruled that “penal provisions” be laid down for those who violate the order. “Appropriate provisions can be made by government so as to ensure that ward(s)/ child/children of persons are compelled necessarily to receive primary education in the primary schools run by the Board,” the order said. Those who disagree with this order have, of course, the right to contest it legally through the appeals process on various grounds such as individual liberty, the right of freedom of choice and association and the rest of it. But the outpouring of support for the judgment, which expressed extreme dismay at the way in which governing dispensations have insulted and made a mockery of the very concept of basic education, demonstrates it is a long-overdue shock-treatment for the bureaucracy and public officials.

hortly after the order, the UP government terminated the services of Pathak who is being hailed by his supporters, parents and teachers as a whistleblower who exposed the systemic rot pervading the selection and appointments system. Similar exposes in the forms of writs and PILs have been doing the rounds of the courts, roundtripping from the High Court to the Supreme Court and back since 2011, with judges INDIA LEGAL September 15, 2015

LETTER FROM THE EDITOR

“Though huge money is being invested and spent every year in the name of welfare, of basic education to the wards of poor people but actually nothing has improved.”

TWO INDIAS (Left) Ninety percent of UP’s children get rudimentary education in ramshackle schools; (facing page) The elite, including government servants’ children, get world class facilities

making sharp observations and issuing directives to cleanse the system under which nearly 3,00,000 posts of teachers are lying vacant. There are about 1.25 lakh primary schools in the state of UP run by the UP Basic Shiksha Parishad. The High Court spared no punches. It castigated the Basic Education department for “mindless, negligent, casual amendments” in rules pertaining to appointment of teachers, besides “defective government orders” issued from time to time which paved way for “multifarious litigations resulting in not only delay in appointment of primary teachers but also a very heavy pressure on this court”.

he judge’s order, as Prime Minister Modi said about a recently passed Act, is a necessary remedial injection which will attack the disease, notwithstanding the side effects of the treatment. It is tantamount to giving babus and politicians a taste of their own medicine. Let their children, insulated from reality in elite private schools, suffer like all other ordinary kids in these neglected hell holes that pass off as schools. Then only—when their own ox is being gored—will they show an interest in improving the quality of education and teachers in these schools.

September 15, 2015

I will quote at length from Judge Agarwal as well as from an earlier Supreme Court judgment on the same subject because they deserve wide dissemination through the media. First from Judge Agarwal: “… It is a matter of common knowledge that basic education in State of U.P. is being administered through the Department of Basic Education, which is under the Secretary (Basic Education) and is under a separate ministry. Annual budget allocation for maintaining basic schools recognized by U.P. Board of Basic Education (hereinafter referred to as ‘Board’) under the provisions of U.P. Basic Education Act, 1972 (hereinafter referred to as ‘Act, 1972’) is one of the highest budgetary allocations…The recruitment of thousands of posts at a time used to commence but got trapped in huge litigation due to unmindful, irregular and casual approach of the official(s) responsible for managing such recruitment, lack of accountability and credibility as well as sincerity. Unmindful and casual legislation by way of frequent amendment of Rules has worsened the situation. “Today, judicial cognizance can be taken of the fact that there are three categories of Primary Schools running in the State of U.P., imparting education to minor children of this State. One of such categories, which is cater-

ing to the need of almost 90 per cent of the population of minor children, are run by Board and in the most shabby conditions. “There are a very few number of Primary Schools run by elite and highly privileged category of people which are branded public schools. Some English/Convent Schools are run by Christian minority wherein children of poor and lower-middle class have virtually negligible scope. This category of Schools basically cater to the need of highly rich people, high class Bureaucrats, Ministers, peoples’ representatives, like, Members of Parliament, Members of Legislative Assemblies and high-middle class people. The wards of a limited class of elite society can get education therein. Most of the people cannot meet even financial standards of fees. Admission standards are very strict and mostly available due to high resources. These Schools have best kind of infrastructures, tutorial staff and all other facilities. These Schools can be termed as ‘Elite Schools’. “In the second category comes, those Primary Schools which are run by normally some private bodies or individuals, catering to wards of lower middle class. Though infrastructure in these Schools is not so sophisticated and ultra modern as that of Elite Schools, still is much better and comparati-

vely even tutorial staff is sufficiently good. They may be termed ‘Semi-Elite Schools’. “However, in the third category comes almost all Primary Schools run and managed by Board under its administration. These can be termed as ‘Common-men’s Schools’. They are the Schools, who cater to the entire category of rural class, urban rural class and those who cannot afford expenses of other two categories. The number of students therein constitute almost 90 per cent population of minor children in the State. The real catch lies here.

“T

he Constitution has now recognized primary education as a fundamental right for children from 6 to 14 years of age, i.e., virtually upto ClassVIII. In the name of discharge of this constitutional obligation, as already said, more than 1.25 lac and odd Jr.P.S. and Sr.P.S. are being run by Board of Basic Education, for which funds are provided by State. The education in these Schools is supposed to be free, but that is how everything is free. Virtually a complete lack of infrastructure one can find in these Schools. After more than 65 years of independence, these Schools are still struggling to have basic amenities for children, coming thereat, like drinking water, space for natINDIA LEGAL September 15, 2015

LETTER FROM THE EDITOR

“Any person who has some capacity and adequate finances, sends his child/children in Elite and Semi-Elite Primary School.” ural calls etc. Even classrooms are in extremely shabby and bad conditions. At many places, classes are being run in open space. The structure, if any, is in dilapidated condition. Though huge money is being invested and spent every year in the name of welfare, of basic education to the wards of poor people but actually nothing has improved.

“I

t is not difficult to understand, why conditions of these Schools has not improved. The reason is quite obvious and simple, though the State Government is not able to see. There is no real involvement of administration with these Schools. Any person who has some capacity and adequate finances, sends his child/children in Elite and Semi-Elite Primary School. They do not even think of sending their wards for primary education to Schools run and managed by Board. Whether it is the District

PATH-BREAKING JUDGMENT (Right) Justice Sudhir Agarwal of the Allahabad High Court has provided an innovative solution to the plight of government schools in UP

September 15, 2015

Collector or Police Chief in the District or any other Government Servant, they ensure that their children should get primary education in Primary Schools having better infrastructure and other facilities which obviously belong to first and second categories of Primary Schools, as noted above and completely exclude third category Schools, i.e. Common-men’s Schools. The public administration therefore has no actual indulgence to see functioning and requirements of these schools. These schools have become a mode of earning political mileage instead of real catering to its need. “The common men’s schools cater the need of Primary Education to only those poor people, whom Hon’ble Mr. Justice Krishna Iyer once said, ‘tiny million Indians’, who find it difficult to make arrangement for two times of meals what to talk of other things. Whatever is made available by system they have no choice but to avail it in conditions ‘as and where it is’. The Government at the level of State and Central, both, are harping every time and almost very frequently on the need of improved Primary School, but their intention has not resulted in execution and reality at grass root level. “The hard real fact is that these institutions, run by Board of Basic Education, are victim of highest level of misappropriation, maladministration and widespread corruption. Standard of teaching is the biggest casualty. Nobody cares for making improvement in the standard of tutorial staff. A competition is going on for political reasons to make lacs of vacancies available in Primary Schools as a source to create committed voters by appointing persons, if not illiterate, but not really competent to teach children of Primary School. A competition is going on to somehow get such persons appointed as teachers in these schools whom they would not like at all to teach their own children. Initially, after making statutory rules under Act, 1972, in 1975, 1978 and 1981, the State tried to fill up the gap of teachers vacancies by appointing much lesser qualified persons i.e. Shiksha Mitra, Anganbari Karyakatri etc. A persistent effort is going on now to absorb these persons as Teachers in Primary Schools run by the Board, if necessary, even by frequent amend-

ments in Rules, without caring but compromising with standard. Is State not answerable to the people at large that competent Teachers should be appointed in Primary Schools by those who are administering institutions so as to make such institutions at par with those where they like to have their wards taught. Since bureaucrats, politicians, rich people and others, all have their alternative channel by having their wards taught in Primary Schools falling in the category of Elite and SemiElite, nobody cares of the standard to be maintained in Primary Schools of the Board.

“A

competition is going on to bring standard of Common-men’s Schools down, as much as possible. In my view, now the time has come where immediate attention need be drawn for improvement, not only of infrastructure in these institutions but first of all in respect of teaching staff. That is the basic purpose for which the entire system of Basic Education is, consuming huge public money from public exchequer. The time has come where State must make it compulsory to all those who gets salary, perks and other benefits from State exchequer to have their wards sent to Primary Schools maintained by Board which I have termed Common-men’s Schools and not to Schools which, come in the category 1 and 2, i.e., Elite and Semi-Elite and are privately managed. In case, any one flouts this condition, a penal provision should also be made. It is only then the improvement of these institutions will be ensured by those who are responsible for its management in a proper way. It will also boost social equation. It will give an opportunity to children of common men to interact and mix-up with children of so-called high or semi high society, giving them a different kind of atmosphere, confidence and other opportunities. This would give a boost and bring revolution in changing Society from grass root level. The initial level mixing among all children will

Let their children, insulated from reality in elite private schools, suffer like all other ordinary kids in these neglected hell holes that pass off as schools. have a different consequences. “Moreover, when Officials/Government servants would be required to send their wards for primary education in institutions maintained by the Board, they would become serious enough to look into the requirements of concerned Primary Schools and would ensure that same are made available and Schools are run in good/best conditions and standard, else it may affect their own wards… “… Therefore, the Chief Secretary, U.P. Government is directed to take appropriate action in the matter in consultation with other Officials, responsible in this regard, to ensure that the children/wards of Government servants, semi-Government servants, local bodies, representatives of people, judiciary and all such persons who receive any perk, benefit or salary etc. from State exchequer or public fund, send their child/children/wards who are in age of receiving primary education, to Primary Schools

STERN STRICTURES (Above, L-R) Justices UU Lalit and Dipak Misra had come down heavily on UP administration for not filling vacant posts in schools

INDIA LEGAL September 15, 2015

LETTER FROM THE EDITOR

Almost 2,000 years back, Kautaliya had stated that parents who do not send their children to have the teachings, deserve to be punished. Anil Shakya

SHAPING THE FUTURE (Above) The importance of dedicated and well-trained teachers can’t be over-emphasized

run by Board. He shall also ensure to make penal provisions for those who violate this condition; for example, if a child is sent to a Primary School not maintained by Board, the amount of fee etc. paid in such privately managed Primary School, an equal amount shall be deposited in the Government funds, every month, so long as such education in other kind of Primary School is continued. This amount collected can be utilised for betterment of schools of Board. Besides, such person, if in service, should also be made to suffer other benefits like increment, promotional avenues for certain period, as the case may be. This is only illustrative. The appropriate provisions can be made by Government so as to ensure that ward(s)/ child/children of persons, as detailed above, are compelled necessarily to receive primary education in the Primary Schools run by Board.”

arlier, in March 2014 the Supreme Court, after hearing arguments on the same subject, had ordered the UP government to fill teachers’ posts lying vacant since 2011 within 12 weeks. When the state simply refused to comply, Justices Dipak Misra and Uday Umesh Lalit ruled on December 17 of that same year: “Despite the aforesaid order, the State has not carried out the appointment process.” They gave the state

September 15, 2015

one more, short deadline pointing out that the state’s inaction was in violation of Article 21A, as inserted by the Constitution (Eightysixth Amendment) Act, 2002, providing free and compulsory education of all children in the age group of 6 to 14 years as a Fundamental Right as well as the legislation on the Right of Children to Free and Compulsory Education. Almost 2,000 years back, the Justices reminded the bureaucrats, Kautaliya had stated that parents who do not send their children to have the teachings, deserve to be punished. Similar was the climate in England almost seven centuries back. “Thus, the significance of education can be well recognized,” they wrote. In such a situation, we cannot conceive that the posts would lie vacant, students go untaught and the schools look like barren in a desert waiting for an oasis. The teacher shall serve the purpose of oasis in the field of education…. The competent authority shall file a compliance report, failing which they shall face the consequences as the law provides and the law does not countenance disobedience of the law and orders of the court.” The price for non-compliance is clear in Judge Agarwal’s judicial edict.

editor@indialegalonline.com

SEPTEMBER 15, 2015

ISSUE. 01 Editor Inderjit Badhwar Managing Editor Ramesh Menon Deputy Managing Editor Shobha John Executive Editor Ajith Pillai Business Editor Shantanu Guha Ray

Political Editor Bhavdeep Kang Associate Editor Meha Mathur Deputy Editor Prabir Biswas Art Director Anthony Lawrence Deputy Art Editor Amitava Sen Graphic Designer Lalit Khitoliya Photographer Anil Shakya News Coordinator/Photo Researcher Kh Manglembi Devi Production Pawan Kumar

LEAD

The fate of Jignesh Shah

MEDIA

Whose right is paramount?

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September 15, 2015

GLOBAL TRENDS

Chinese checkers

As the dragon kingdom braces for a period of economic instability, STRATFOR analyzes its institutions, especially its polity that’s still averse to openness and dissent. Also, SHANTANU GUHA RAY writes about its impact on India

In the debate about child pornography, the issue of amateur sex videos preying on innocent girls has been lost. Why aren’t ISPs being charged for this, asks ABHAY VAIDYA SCIENCE

Small matter, big debate

As scientists prepare to study the tiniest particles, neutrinos, in an underground science facility in Tamil Nadu, an environmentrelated debate has erupted. MURALI KRISHNAN reports

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A landmark survey has shown that Muslim women want the triple talaq to be banned. AJITH PILLAI reports on the winds of change sweeping the women of this community

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It’s my life

How a promising commodities trading czar who could have been a sterling exponent of Modi’s “Make in India” dream, was brought down. SHANTANU GUHA RAY provides an insight into the saga

CFO Anand Raj Singh VP (HR & General Administration) Lokesh C Sharma Circulation Manager RS Tiwari

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LEGAL EYE

SUPREME COURT

Come clean

The funding of political parties is often foggy and most want to be outside the purview of RTI. BHAVDEEP KANG describes how they use legal loopholes to escape scrutiny STATES

Patel rebellion

Gujarat was up in flames as the Patel community, headed by Hardik Patel, demanded reservations. RK MISRA writes about how the state was held to ransom

Tale of two states The bitter feud between AP and Telangana over the division of assets has reached the Supreme Court. BHAVDEEP KANG on how the center will need great tact to keep both states happy

ENVIRONMENT

Government in a hurry

CRIME

Costly exercise

A detailed system for tracking criminals through a database of behavioral pattern has become a white elephant for the FBI. A report by PROPUBLICA

The environment ministry is giving clearances to industrial and infrastructure projects in eco-sensitive zones in a jiffy, ignoring regulatory norms. DINESH C SHARMA investigates

REGULARS

VOLUME. IX

Edit................................................................................3 Quote-Unquote...........................................................12 Ringside......................................................................13 Supreme Court............................................................18 Courts......................................................................... 20 National Briefs.............................................................35 International Briefs.......................................................79 Campus Update......................................................... 80 Wordly Wise.................................................................81 People......................................................................... 82 Cover Design: AMITAVA SEN

INDIA LEGAL September 15, 2015

QUOTE-UNQUOTE

“Good Taliban, bad Taliban...good terror, bad terror...this won’t work. A decision has to be taken—are you with terrorism or with humanity?” — PM Modi, while addressing a massive gathering in Dubai, on NDTV

“I am Dawood Ibrahim. If others are free to morph me into an object of aversion…I am also free to project myself in an extremely self-denigrating image.” — Valson Thampu, St Stephen’s College principal, alleging that he is being hounded like an animal in a sexual harassment case in his college, in The Times of India

“Eighteen years ago, I lost faith in god and today, I lost faith in the judiciary. Money power augurs so well with the institutions…”

“Shatrughan Sinha doesn’t require a tag. My unblemished credibility is my achievement.” — The veteran actor, on whether he is angry with the BJP which seems to have sidelined him, in The Times of India

“Parliamentary democracy is safe because of the people of India, not because of politicians.” — NCP chief Sharad Pawar, in The Times of India

— Neelam Krishnamurthy, who lost her children in the 1997 Uphaar tragedy, on the Supreme Court offering relief to the Ansal brothers, in The Indian Express

“Modi has only one quality— fooling people. He can fool everyone. He can befool even god.” — RJD chief Lalu Yadav, hitting out at the prime minister while addressing a rally in Bihar, in The Times of India

“Woh dossier ki baat karte hain… hum unko zinda aadmi dikhayenge (they talk of dossiers, we will show them a live terrorist).” — Foreign minister Sushma Swaraj, reacting to Pakistan NSA Sartaz Aziz flashing details of India’s involvement in terror across the border, at a press conference

September 15, 2015

“Nitish has got justice. This is a huge victory. I am vindicated. It’s a big day for all of us.” Aruna

— Neelam Katara, after Supreme Court upheld the conviction of Vikas Yadav, Vishal Yadav and Sukhdev Pehalwan in her son’s murder case, in The Indian Express

VERDICT In law a man is guilty when he violates the rights of others. In ethics he is guilty if he only thinks of doing so. —Immanuel Kant

INDIA LEGAL September 15, 2015

SUPREME COURT/ Political Parties/ RTI, 2005

The `

However, after coming to power, it appears to have undergone a change of heart. Forced to respond when the SC issued a notice to the political parties and the Union of India on a petition by the Association for Democratic Reforms (ADR) and Delhi resident Subhash Chandra Aggarwal for enforcement of the CIC order, it reiterated the UPA’s stand. The government claimed in its affidavit that political parties were established under the RPA and not under the Constitution or any other law. Hence, they could not be treated as public authorities, despite getting huge financial support from governments.

20,000 Loophole

HE world’s largest democracy reveals a vulgarly feudal character when political parties are faced with the demand for transparency and accountability. Voters, these parties maintain, are not entitled to ask how political organizations mobilize resources and what they do with them. Ours but to vote sans reason why; theirs not to make reply (apologies to Alfred Lord Tennyson). The BJP government, in what amounted to an inexplicable U-turn, told the Supreme Court last month that political parties did not fall within the ambit of the Right to Information (RTI) Act, 2005, because they were not “public authorities”. The affidavit also underlined a crying need for amendment to the Income Tax 1961 and Representation of People (RPA) 1951 Acts, in order to ensure accountability and transparency in the funding of political parties.

Making political parties transparent about funding has not been easy. As they don’t need to reveal the source of contributions which are `20,000 or less, they often get away. Can this loophole be plugged? By Bhavdeep Kang

CONVENIENT CATCH Even if that argument is accepted, political parties still have to submit their accounts to the Election Commission and file their income tax returns. The catch here is that they do not need to reveal the source of contributions amounting to `20,000 or less. Under Section 29C of the RPA, the treasurer of a political party must declare “contribution in excess of twenty thousand rupees received by such political party from any person in that financial year”. This provision is in consonance with the

Political parties claim that malicious RTI queries by rivals will affect their ability to conduct business freely. They say the contributors’ anonymity must be maintained. Section 13A of the IT Act, which states: “In respect of each such voluntary contribution in excess of twenty thousand rupees, such political party keeps and maintains a record of such contribution and the name and address of the person who has made such contribution”. Studies by the ADR, co-petitioner in the matter, have revealed that a substantial portion of funds raised by political parties comes from the sale of coupons, printed and sold by them in question and hence, not open to public scrutiny. The EC and IT authorities can only accept the party’s claims on funds generated through coupon sales—provided, of course, that each individual contribution is `20,000 or less. By the same token, if a political leader is garlanded with currency notes, he need not declare it—provided the garland costs `20,000 or less. And even if it’s worth much more, who is to know? The money may go

POLITICAL FEAST (Below-L-R) The BJP and Congress spared no expenditure in reaching out to the electorate during the 2014 Lok Sabha Elections

IGNORING CIC ORDER What the 98-page (including annexures) affidavit to the SC did not explain is why, for two years, political parties defied an explicit order of the Central Information Commission (CIC), a judicial body, to respond to RTI queries. They did not appeal against the CIC order in any court of law; they simply ignored it. Unlike any other citizen or organization in the country, they flouted a judicial order without fear of prosecution. The CIC then came up with the stunning observation that it lacked the power to enforce compliance by the political parties (see box). The UPA government’s only response to the CIC order was to move a Bill aimed at amending the RTI Act in order to—effectively—grant immunity from public scrutiny to political parties. The Bill lapsed after the BJP took a nuanced stand saying it was not opposed to greater transparency. Photos: UNI

September 15, 2015

INDIA LEGAL September 15, 2015

SUPREME COURT/ Political Parties/ RTI, 2005

“Take disciplinary action for ignoring CIC orders” Prof Jagdish Chhokar, head of the Association for Democratic Reforms, tells BHAVDEEP KANG that only 20 to 25 percent of the declared income of a political party is from known sources. Excerpts: It appears that the political parties in question did not challenge the CIC order for two years; they simply ignored it. Surely, that is a ground for prosecution? This is a grey area. The CIC issued five or six notices to the political parties. They did not respond. We moved a petition before the CIC saying they should be fined for noncompliance and we should be compensated. The CIC then issued a show cause notice, to which they did not respond. On March 16 this year, a full bench of the CIC ruled that it had no power to take action against them. It suggested that we, the petitioners, were free to take up the matter with any other forum. So we approached the Supreme Court. I would say that yes, there are grounds for disciplinary action for non-compliance, actually open defiance, of the decision of the highest statutory body under the RTI Act. If, through suitable amendments to the RPA and IT Act, political parties are compelled to reveal the source of all donations

against verifiable addresses, would that resolve a big part of the problem? In American parlance, this ain’t gonna happen. It’s a hypothetical question, a very big ‘IF’. But regarding transparency in funding, the fact is that only 20 to 25 percent of the declared income is from known sources. We are not even talking about the undeclared income which is widely believed to be very substantial. In any case, democracy is not merely about doing things we are obliged to do. In the interests of society, we all do things we are not obliged to do by law. Does the AAP method of mobilizing funds stand scrutiny? The party is only two years old and its account statements have yet to find their way into the public domain. But they have not appointed public information officers although they support bringing political parties within the ambit of RTI....A substantive assessment will have to await scrutiny and analysis of their declared financial statements.

into the private coffers of the neta or the party tijori. Bahujan Samaj Party chief Mayawati, known for her flashy jewelry and vast properties, has used this loophole to excellent effect. She informed the authorities that her party mobilized resources through “small gifts and contributions” from its vast base of poor supporters, which formed the source of her immense income. Chartered accountant Amod Agarwal

September 15, 2015

NO ACCOUNTABILITY? (Clockwise from left) Election rallies of SP, BSP and AAP

supports the government stand. “In the light of existing laws, the affidavit is quite correct. Political parties submit their accounts to the EC and file IT returns. Either of these two authorities is free to question them, as per the law”. BJP’s Sudhanshu Mittal, who was regarded as a fund manager par excellence in NDA I, agrees. “The `20,000 question is a different issue. If you want to address that, you will have to take another approach,” he says. SOLUTIONS GALORE Eminent lawyer and anti-corruption crusader Prashant Bhushan, who represents the petitioners, agrees that plugging the `20,000 loophole would go a long way in facilitating transparency in the funding of political parties. Aggarwal believes a far better idea would be at least partial state funding of elections, as suggested by the Inderjit Gupta and Dinesh Goswami committees. It would also go a long way in eliminating the deployment of black money, largely raised through real estate and narcotics (earlier through excise). The ADR found that even with the protection of the `20,000 clause, parties were unable to submit proper accounts. In many

cases, the PAN numbers of contributors were not furnished, money received through cheque was not accounted for and the party claimed to have given money to candidates who denied having received it. Adequate grounds, one would have thought, for penalizing them. Political parties have opposed accountability under RTI by diverting the debate to a question on their functioning rather than financing. They claim that malicious RTI queries by rivals will affect their ability to conduct business freely. As for revealing sources of funds, they say the anonymity of contributors must be maintained in order to protect that privacy. Those who contribute to a particular political party may fear reprisal from rival parties if their identities are made known. AAP STAND Contrast this with the methods adopted by the Aam Aadmi Party. A journalist colleague describes his experience: “A bunch of young IT professionals were on a fund-raising mission in Bangalore. I offered a small contribution—`500—in cash, on condition that I would not have to give them my name or

Anil Shakya

phone number. They refused. Finally, I gave them a friend’s name and number, which they duly noted. Within hours, he received a text thanking him for his contribution.” The AAP has called for a review of the center’s stand, pointing out that it had not bothered to call an all-party meeting before filing its affidavit before the apex court. The nod-and-wink attitude to fund-raising by political parties was exemplified by an incident at the BJP’s headquarters—11, Ashok Road—in December 2008. An estimated `2 crore went missing from the party’s vault. Party officials raised an outcry, but no police complaint was filed. Questions raised at the party’s media briefing were brushed aside with a brief statement to the effect that the matter was being investigated internally. Clearly, it was a case of easy come, easy go. IL INDIA LEGAL September 15, 2015

SUPREME COURT

Nothing wrong with 364A HERE is nothing unconstitutional or even unreasonable about death sentence mandated under Section 364A of IPC for kidnapping for ransom, the apex court clarified. It held that capital punishment was appropriate, especially at a time when terrorists resorted to kidnapping to make the government kowtow to their demands. The section was incorporated in 1993-94, as an amendment brought by parliament. The bench also made it clear that the death sentence was applicable only in

Illustrations: UdayShankar

the “rarest of rare cases” and if the kidnapping was done by a terrorist. Section 364A of IPC states that whoever kidnaps or abducts a person and threatens to kill or hurt him or her, or kills or hurts him or her for ransom, shall be punished with death, or life imprisonment and will also be fined. The court was responding to a petition filed by a convict, who was given death sentence under Sections 364A and 302 (murder) for kidnapping and murder. He had questioned the constitutional validity of Section 364A.

FSSAI slammed for advisory HE apex court pulled up the Food Safety and Standards Authority of India (FSSAI) for exceeding its brief. It questioned the advisory issued by the regulator in 2013 under which companies needed to seek approval from the FSSAI for a wide range of dietary food and health supplements, which already had a license. The Bombay High Court had already struck down the advisory, ruling it ultra vires. Vital Nutraceuticals Pvt Ltd and Indian

Drug Manufacturers Association had approached the high court, pleading that FSSAI could not issue such an advisory as it violated Section 92 of the Food Safety and Standards Act, 2006. The apex court agreed with the high court’s ruling and asked the FSSAI to justify its action under the Act. It was not convinced by the regulator’s plea that the advisory was necessary to ensure food safety standards in India.

September 15, 2015

ABA Ramdev’s plea that all cases filed against him in various parts of the country for his comments against Rahul Gandhi be heard in a single court was accepted by the apex court. It decided that all cases will be heard

at a trial court in Patna. The court also decided that the date the hearing will commence is September 21. The yoga guru had said in April last year that Gandhi’s visit to Dalit households was nothing more than a “picnic and honeymoon”. A flurry of judicial complaints was registered under the Scheduled Castes and Scheduled Tribes (Prevention) of Atrocities Act in as many as eight states. The apex court clarified that in case Ramdev didn’t want to be physically present at the hearing, he would have to seek approval from the trial court.

AKING a grim view of the spate of farmers’ suicide in India, the apex court asked the center to revisit its existing policy framed for their welfare. It also pointed out that the 2007 policy was unable to mitigate or root out the catastrophe faced by farmers due to crop loss. It did not accept the contention of the center that the suicide rate had fallen and it was leaving no stone unturned to ensure farmer’s welfare. The court ruled that not a single suicide was

acceptable. It gave the center six weeks to respond. The court was reacting to a petition filed by a NGO from Punjab, Youth Kamal Organization, which wanted the center to offer the farmers monetary assistance.

Ansal brothers get relief T was their advanced age and peculiar facts and circumstances of the case that brought relief to the Ansal brothers, the owners of Uphaar theater in south Delhi. A three-judge bench ruled that although they stand convicted for criminal negligence and need to go to jail for two years, they could walk free if they paid a fine of ` 60 crore to the Delhi government to set up a trauma center or upgrading the existing centers. While Sushil Ansal served a jail term of five months and 20 days, Gopal Ansal was in jail for 4 months and 20 days. A raging fire in the cinema hall led to the

Contempt notice for police chief ELHI police commissioner BS Bassi was slapped a contempt notice by the apex court as the Delhi police had failed to arrest a senior official of a UB Group company, as ordered by the court. The nonbailable warrant (NBW) was issued by the court in a cheating case filed against the company by Gandharb Singh Bhadwal, who had a fixed deposit in the company. The court was livid with the tone and tenor of the response filed by Delhi police regarding its failure to carry out its orders. Bhadwal allegedly could not get back his

Pay heed to farmers’ suicides

Ramdev hearing in a single court

money in 2004, as the concerned company, McDowell Krest Finance Ltd, had gone bust in 2000. The cheating case filed by him in the trial court as well as the Delhi High Court fell through. But the apex court took cognizance of his appeal and issued notices to all persons related to the case. All of them appeared in court except one. The court took note of the repeated absence of ex-director Krishna Murthy and issued a NBW against him. It entrusted the task of executing the warrant to Delhi police commissioner, who failed to carry it out.

death of 59 people in 1997. The victims’ association had fought a protracted legal battle for 18 long years. The CBI had pleaded for a two-year jail term for the brothers. The trial court, while holding them responsible for negligence had ruled a two-year jail term. But the Delhi High Court felt that one-year jail term was enough. The Ansals had appealed against the verdict. The case was referred to a three-judge bench of the SC, from a two-judge bench earlier to decide on the sentence.

Stricture to search engines HE Supreme Court took strict cognizance of the allegation that search engines were not adhering to laws in India. The court was responding to a PIL which stated that advertisements on sex determination of fetus were appearing on Google India, Yahoo India and the Indian wing of

Microsoft, which was illegal in India. The court asked them to file their responses within two weeks. As an interim measure, it asked the search engines to remove such existing advertisements with immediate effect. This is in line with Section 22 of the PreConception & Pre-Natal Diagnostic Techniques (PCPNDT) Act, 1994.

INDIA LEGAL September 15, 2015

COURTS

Mandatory voting stayed

HE unique law brought in by the Gujarat government, which made voting compulsory in elections to local bodies, received a jolt when the Gujarat High Court stayed its notification till further orders. The court felt that Gujarat Local Authorities (Amendment) Act 2009 violated the fundamental rights of citizens enshrined in the constitution. It observed that just as the right to vote was a privilege enjoyed by citizens, similarly the right

not to vote equally rested with them, and the state could not make it a rule. The court gave its ruling on a petition of advocate KR Koshi who had challenged the new law recently notified by the state government, which mandated a fine of `100 on those violating the law. Incidentally, the Gujarat was the first state in the country to enact such a law. Elections to local bodies in the state were slated for September and October this year.

EFUSING to change its April 7 order that had banned diesel vehicles more than 10 years old from plying in Delhi and NCR, the National Green Tribunal (NGT) left it to the concerned authorities whether to impose fines on such vehicles in NCR or not. The green court was reacting to a plea from the Ministry of Road Transport and Highways that the court should modify the order con-

Pachauri to go abroad

Interim relief to Maggi

trial court in Delhi accepted the plea of former TERI Director General RK Pachauri that he needed to participate in a global meeting on climate issues in China and Japan between August 21 and September 1. Pachauri is accused of having sexually harassed a colleague in TERI and a probe is on in the case. Pachauri’s counsel pleaded that attending the meeting was critical for him as a scientist on global climate change and pointed out that so far he had not impeded the probe in any manner. However, the court wanted him to give two local sureties of `2 lakh each and intimate the Indian embassies in China and Japan about his arrival there. He was also told to update the court about his itinerary and submit photocopies of his tickets, visa and passport. The court also directed him to inform it and the concerned investigating officer once he comes back to India.

HE Bombay High Court struck down the order of the Food Safety Standard Association of India (FSSAI) and the Maharashtra Food and Drug Administration (FDA) that had banned all varieties of Maggi noodles in India. The ban was imposed on June 5. The court felt that the order was arbitrary and defied natural justice. Nestle India, the manufacturers of Maggi noodles, had approached the high court against the ban. However, it’s not a win-win situation for Nestle India as yet. The court ordered that Nestle India must

NGT refuses to modify order

September 15, 2015

No action on CAG report HE draft report of the CAG on power distribution companies in Delhi may be a shot in the arm for the Kejriwal government, but the Delhi High Court has barred it from taking any action on the report. The court also considered the report as “interim”. The report had accused all the three discoms of irregular practices and inflating their assets, thus cheating consumers of Delhi. The discoms—BYPL and BSES—had gone to court pleading that they be provided with a copy of the draft report, the Delhi government be held back from initiating any action based on the report, and the said report be treated as an interim one. The companies also took objection to the disclosure of the report by the CAG. The CAG clarified that it had merely shared the report with the Delhi government for comments and even cited a letter to the Delhi government stating the report to be kept under wraps.

get its noodles tested afresh within six weeks at three centers approved by the National Accreditation Board for Testing and Calibration Laboratories (NABL) in Hyderabad, Mohali and Jaipur. If the tests rule that the noodles are safe for consumption, only then can Nestle India bring them back into the market, the court ordered. The court felt that the test results of the current labs could not be relied upon as they were not accredited under FSSAI. The tests showed that Maggi noodles contained MSG and an overdose of lead.

Green signal to Rohtang N a welcome relief to all the tourism stake-holders in Manali, including tourists, the NGT relaxed its ban on vehicle movement for tourism on the Manali-Rohtang road till November 30. The extension will allow 400 diesel

sidering public interest. The ministry pointed out that truck operators were planning a strike as the NGT order prevented the Delhi, Haryana and Uttar Pradesh governments from issuing fitness certificates to such vehicles. And in case of a strike, the entire national capital territory would be deprived of its supply of essential materials. It pleaded that the government could not challan them till the application was pending. The green tribunal reminded the parties to the petition that even the Supreme Court had approved the NGT’s order and it was not possible to rescind.

and 600 petrol vehicles to visit Rohtang Pass on a daily basis. The enforcement of the ban had led to a drastic fall in tourist arrivals to Manali—a cause of concern to tour operators, hotels and taxi operators. The green tribunal had passed the ban order due to environmental concerns on February 6, 2015 but had relaxed it till August 14 in May.

— Compiled by Prabir Biswas Illustrations: UdayShankar INDIA LEGAL September 15, 2014

LEAD/ Corporate/ Jignesh Shah

By Shantanu Guha Ray

INDIA’S ICARUS

September 15, 2015

Jignesh Shah blazed like a meteor and burnt out like one. This entrepreneur, who could have been a sterling exponent of Prime Minister Narendra Modi’s “Make in India” program, aimed to take commodities trading online and took on institutional forces such as the National Stock Exchange (NSE). However, in a surprising twist of fate, he was done in by challengers and arrested on May 7, 2014. It all started in 1988 when Shah started Financial Technologies India Limited (FTIL) and two commodity exchanges—MCX (Asia’s second largest) and National Spot Exchange Limited (NSEL), which was India’s first electronic spot exchange. He began trading in 2008 and did so well that he set up exchanges in Singapore, Bahrain, Dubai, Mauritius and Botswana. Problems started when MCX decided to take on the NSE-promoted commodity exchange—NCDEX, a competitor—thereby challenging the primacy of NSE. A bureaucrat even expressed concerns at the declining market share of NCDEX in comparison to MCX, suggesting that this raised suspicions that NSE and its subsidiaries were under government protection and patronage. Meanwhile, NSEL too did very well. But irregularities were found in it and in 2013, a payment crisis hit it, leading to the eventual loss of `5,689.95 crore for investors and Shah’s arrest. However, on August 22, 2014, Shah got bail from the Bombay High Court after three months in custody. There is now a move to merge NSEL with FTIL so that the resources of FTIL can be used for settling the liability. So how did the entrepreneur, who was once in charge of BSE’s online trading, get embroiled in this mess? Has the Economic Offence Wing (EOW) of Mumbai Police been able to find any money trail against FTIL or Shah? Read on.

F things had gone Jignesh Shah’s way, the billionaire would have been the Czar of Exchanges, with his presence all over the world. With his business acumen and smart moves, he was riding a crest from which few could have toppled him. But then, that was his mistake. As people in power zeroed in on him, the fall was quick, surprising and meteoric. Today, out on bail, Shah must be anguished and frustrated each time his car speeds over the Andheri flyover, and his eyes fall on a familiar grey-blue structure of glass—Financial Technologies India Limited (FTIL). (FTIL was once the promoter company of MCX, MCX Stock Exchange and India Energy Exchange. MCX and MCX Stock Exchange have now been sold and India Energy Exchange is in the process of being sold. FTIL now is just a risk management software company for broking and financial companies. Once, its market cap was a little over `5,000 crore, but it is now down to around `1,200 crore.) For Shah, FTIL was the realization of a dream for which he had worked hard for over two decades. This was his baby—Exchange Square, which housed MCX, Asia’s second largest commodity exchange, and its stock exchange, MCXSX, whose license he had procured after a longdrawn-out legal battle. Till fate played a cruel joke on him. Today, Shah is a resigned man. His life’s work of starting exchanges and robust financial institutions is in a shambles as he is entangled in the crosswires of the government and a slew of regulatory agencies. ZEROING IN ON FTIL Those who sympathize with Shah believe that the NSEL crisis was a convenient handle to bring to heel Shah and the parent company of his exchanges—FTIL. For starters, Shah was thrown out of his exchange ventures, such as MCX, MCX-SX, IEX and four overseas ventures by the Ministry of Consumer Affairs on the advice of Forward Markets Commission (FMC). There is now evidence that the Ministry of Corporate Affairs (MCA) and FMC are honing in on FTIL, whose new board of directors was introduced INDIA LEGAL September 15, 2015

LEAD/ Corporate/ Jignesh Shah

BUREAUCRATIC MOVES (Right) KP Krishnan, joint secretary in MoF between 2005 and 2010, was the man who played a key role in putting the heat on Shah and his commodity

in November 2014. Both are pushing for the supersession of FTIL’s board and declaring its directors as “not fit and proper” as they are opposing the proposed merger of NSEL with FTIL. The matter is currently in the Bombay High Court. The new board, which took over the reins in November 2014, now includes luminaries, such as Venkat Chary, former chairman of FMC; A Nagarajan, ex-IAS; Justice (retd) RJ Kochar; advocate Berjis Desai and managing partner of J Sagar Associates; Anil Singhvi, CEO of Ambuja Cements and chairman, Ican Investment Advisors, an agency specializing in the interests of minority stakeholders. This board took over after more than a year of the crisis, which unfolded in July 2013. But this fact was ignored by the MCA and it held responsible the new directors of FTIL for the NSEL payment crisis. The MCA had also alleged that FTIL and its new board of directors are mismanaging NSEL and selling its 26 percent stake in MCX at a loss of `290 crore. On the contrary, it was the FMC that directed FTIL to sell its entire holding (26 percent) in MCX by declaring it as a “not fit and proper” entity. In bureaucratic language, it means a company not capable of running its operations.

What they mean FTIL: Financial Technologies India Limited—a financial services company offering technology IP to create and trade on next-generation financial markets and two commodity exchanges—MCX and NSEL. MCX: Multi Commodity Exchange—promoted by Jignesh Shah, now owned by Kotak Securities. BSE: Bombay Stock Exchange, a government entity. NSE: National Stock Exchange, a private entity. NSEL: National Spot Exchange Limited promoted by Jignesh Shah. NCDEX: National Commodity and Derivatives Exchange, an NSE-promoted commodity exchange.

September 15, 2015

NMCE: National Multi Commodity Exchange—promoted in 1999 by a group of Indian commodity-based corporations and public agencies, it is India’s third largest commodity and derivatives exchange. FMC: Forward Markets Commission is the regulator of commodity futures markets in India. EOW: Economic Offence Wing of Mumbai Police. MCA: Ministry of Corporate Affairs regulates the functioning of the Indian corporate sector in accordance with law. MoF: Ministry of Finance. SEBI: Securities and Exchange Board of India, the market regulator. FCRA: Foreign Contribution Regulation Act.

league of trusted and coveted exchanges globally. This, according to market sources, did not go down well among competitors. On the home front, a bourse like MCX was competing with top Chinese exchanges in terms of value traded. By 2007, MCX was handling 90 percent of trades across electronic commodity exchanges.

ENOUGH EVIDENCE? While investigative agencies established the entire `5,600 crore money trail with 24 defaulters, no evidence was actually found against Shah. Even the Bombay High Court validated that neither Shah nor FTIL nor NSEL has received a single paisa of the disputed amount while granting bail to Shah on August 22, 2014. The MCA has, meanwhile, been delaying presenting the proposed merger order dated October 21, 2014, before the Bombay High Court following a severe corporate sector and shareholder backlash. Instead, it moved the Company Law Board with the intention of superseding the board under Section 397 of the Company Act to facilitate the merger of NSEL with FTIL. This would make FTIL liable for default payments on the NSEL platform. The FTIL controversy goes back to 2007, when it took electronic exchanges to uncharted markets like the Middle East, Africa and Singapore. Here, its bourses created strong financial institutions and the figures traded on these bourses placed them in the ivy

KRISHNAN’S ROLE The FMC that regulated commodities exchanges was under the purview of the ministries of agriculture and consumer affairs. Instead of approaching these ministries with any concerns about competition, the Ministry of Finance (MoF) decided to talk to banks and institutions holding stakes in the exchange. One bureaucrat who took unusual interest in NCDEX (a National Stock Exchange—NSE—subsidiary) was KP Krishnan, joint secretary in MoF between 2005 and 2010. Krishnan was supposed to be in a regulatory role overseeing the functioning of bourses. However, an RTI application helped obtain a copy of an internal note (given below) from Krishnan, dated December 19, 2007, where he expressed con-

FTIL took electronic exchanges to uncharted markets. Here, its bourses created strong financial institutions. This did not go down well among competitors. cerns about the declining market share of NCDEX in comparison to MCX. It urged the NCDEX management to improve its performance and NSE to increase its ownership of NCDEX. Krishnan further suggested that LIC and NABARD (both government-controlled bodies) should be asked to relinquish their shares up to 5-6 percent each in favor of NSE so that it could become a strong anchor investor (one with maximum say in a company) in NCDEX. This letter raised questions among market analysts whether both NSE and its subsidiaries were under the then government’s protection. A detailed questionnaire sent by India Legal to Krishnan on August 23 about his alleged involvement in the FTIL crisis remained unanswered. For the record, NSE in the last 16 years had beaten the Bombay Stock Exchange WORKING ON A PLAN (Left) The internal note written by Krishnan in 2007

INDIA LEGAL September 15, 2015

LEAD/ Corporate/ Jignesh Shah

LEGAL POSITION (Right) Excerpts from the Bombay High Court judgment, delivered by Justice Abhay M Thipsay

KP Krishnan suggested that LIC and NABARD should be asked to relinquish their shares up to 5-6 percent each in favor of NSE so that it could increase its hold on NCDEX.

September 15, 2015

(BSE) and become the face of stock trading in India. There was a stamp of NSE not only in the stock exchange market in India, but also at SEBI, the market regulator, and the finance ministry. Market analysts agree that at times, it was difficult to differentiate the regulator from the regulated, i.e., between SEBI and NSE. NSE margins were in excess of 60 percent—something that monopolies only enjoy. BSE suffered, as did 20 regional stock exchanges. In such a climate, it was sacrilegious on the part of Shah to think he could beat NSE in the exchange market. The writing was clear on the wall—it would be a matter of time before Shah entered the stock market, challenging NSE’s numero uno status. METHODICAL ELIMINATION To Shah’s credit, he had fought many corporate and legal battles to realize his dream of starting commodity, electricity, equity and currency exchanges. And he often outwitted competitors due to his quick thinking. But what he did not see coming was a methodi-

cal elimination of the empire he had so assiduously built over two decades. In Delhi, official rumor-mongering began to paint Shah as a buccaneering industrialist. SEBI and RBI had opened up the currency derivatives trading in India and stock exchanges were allowed to seek a license for trading in this asset class. Expectedly, FTIL—together with MCX—applied for a stock exchange license. It was granted, with permission only for currency derivatives segment. The crucial stock-trading segment, however, was withheld. MCX-SX came into being and very soon, beat NSE in the currency derivatives segment. The first move happened from Delhi. The finance ministry started pushing in a series of policy measures to protect the monopoly of NSE, starting with a cap of five percent on an owner of a stock exchange. Even persons acting in concert were to be clubbed within the five percent. Only banks were allowed extra ownership. NSE played under the rules and resorted to questionable pricing. MCX-SX challenged it and won a case in the Competition

Commission, which slapped penal damages on NSE. Not to be outdone, SEBI kept on denying MCX-SX permission to trade in equity stocks for three years without assigning a reason. Finally, it was the intervention of the Bombay High Court and the Supreme Court that forced SEBI to grant permission to MCX-SX to trade in equity stock. SEBI had earlier declined to grant a licence to MCX-SX to launch equity trading platform. And then, one evening, the rivals of Shah got an opportunity to get him. The NSEL payment crisis hit the markets, giving them a golden opportunity to annihilate FTIL and Shah.

The official, who spoke on condition of anonymity, said Krishnan’s letter was the first step towards “destroying Shah and his empire”. And then came the payment settlement crisis at NSEL. “All actions taken against it by the government post this crisis at the end July 2013 were part of the ‘Finish FTIL Plan’. Who is bothered about small traders who have lost their money?” the official further said. But Krishnan was not alone. Helping him was another powerful bureaucrat, Ramesh Abhishek, who ran the FMC. In Mumbai, stock market brokers say FMC is one of the most confused, uncertain and vacillating regulators in India and it was hardly in a position to sit in judgment over FTIL and declare its business “not fit and proper”. In April 23, 2012, the finance ministry wrote to NSEL on the advice of FMC that certain contracts traded on it were in violation of Foreign Contribution Regulation Act (FCRA). Players in Mumbai’s financial markets were surprised. When an exemption is already provided to those contracts from the “operations of the provisions of FCRA” under a Gazette notification of June 5, 2007, then how could these contracts be violating FCRA terms? But FMC had no clarity on this issue. On July 19, 2013, it wrote to the finance ministry saying the exemp-

ANOTHER CRITIC (Below) Ramesh Abhishek, head FMC, also played a key role

NOT NEUTRAL Krishnan’s letter, mentioned earlier, suggests how the finance ministry—then under P Chidambaram—became the strategist and key enabler for NSE. “It showed the ministry was not neutral and that it would do anything to ensure NSE retain its monopoly. Killing competition was no crime if FTIL and Jignesh Shah can be annihilated,” said a top ministry official. INDIA LEGAL September 15, 2015

LEAD/ Corporate/ Jignesh Shah

Shah visited the EOW offices 21 times, though he was called seven times. Despite keeping him in custody for 108 days, EOW didn’t interrogate him.

FACING THE BRUNT (Below) Anjali Sinha, MD, NSEL was suspended for irregularities

tion gazette notification was “silent (read not clear) on the status of exemption— whether it was a general exemption or it was for specific provisions of the FCRA—to the contracts at NSEL”. This was a tacit admission that there was nothing illegal about the contracts at NSEL. Nonetheless, NSEL responded to a show cause notice from the finance ministry on May 23, 2012, explaining its position. The government did not respond. A reminder followed from NSEL on October 18, 2012. But the ministry did not respond. After a long wait, on July 12, 2013, the finance ministry asked NSEL to shut down these contracts immediately. PANIC-STRICKEN The order to close the market immediately, courtesy FMC, was catastrophic, to say the least. It created total panic, leading to a settlement failure of `5,600 crore. Panicky brokers were livid, wanting to know that if FMC was not clear on the status of the exemption and on what basis did it issue the show cause notice to NSEL. Also, why didn’t it ask the market to be closed in May 2012 when the crisis was first reported. That, they said, would have led to a payment settlement crisis of just `2,000 crore. (In 2012, the total volumes of trading on NSEL hovered around `2,000 crore.) The FMC, however, did not respond. It was clear to many that the crisis had happened purportedly because the stocks that were sold were absent and a payment

September 15, 2015

failure was obvious. Worse, the brokers, who enticed their clients to trade, later went on record having inspected the warehouses and confirming adequacy of stocks. So where did the stock vanish? The brokers did not answer. NSEL also instituted an internal enquiry and charge-sheeted errant officials. Shortly thereafter, the then MD, Anjani Sinha, was suspended as also some other officials. The government machinery swung into action and implicated Shah and all other directors on the board of NSEL. On paper and legally, it was clear that Shah did not directly owe even a rupee of the `5,600 crore loss to anyone and it was the brokers who mis-sold the product on NSEL platform. But Shah was hounded. Shah was arrested by EOW officers for “non-cooperation with EOW”, thereby “deliberately avoiding interrogation”. The Economic Offence Wing (EOW) of Mumbai Police—which carried out its investigations—told the Bombay High Court that it was not able to find any money trail against Shah. NO INTERROGATION The reality was the opposite. Shah had visited the offices of EOW 21 times, though he was called seven times. He even opened up a mini NSEL office with computers at the premises of EOW to help track the missing cash. And despite keeping him in custody for 108 days in a jail outside Mumbai, EOW did not interrogate him and confessed the same before the Mumbai High Court, saying they did not find any money trail to FTIL, NSEL and Shah. The judge then granted Shah bail. A forensic audit was ordered on NSEL by FMC. The auditor submitted its report without seeking the NSEL management’s view. Using the draft audit report, the FMC declared Shah, two others and FTIL “not fit and proper” to hold any position on the board or the management of any exchange. Surprisingly, the report had a disclaimer that it cannot be used for any judicial or criminal process. The order has been challenged in the Bombay High Court and the hearing is yet

to take place. And FMC, without waiting for the judiciary to complete the process, forced FTIL to reduce its holding in MCX to a maximum of 2 percent. On October 21, 2014, precisely two days before Diwali, Krishnan—who was on the verge of being shunted out of the finance ministry because the NDA regime had swept to power—invoked a rarely used legal provision in order to force FTIL to merge with NSEL. This move set a dangerous precedent as it would have destroyed the value of an estimated 63,000 shareholders of FTIL who voted against the merger in an open ballot. The move would have also saddled Shah’s flagship company with the balance of defaults and crushed it. Shah, an avid reader of biographies of JRD Tata and Sony co-founder Akio Morita, was tired and devastated. He believed his success was unpalatable to the mandarins of the finance ministry and he was not a popular person for the powerful business elite of south Mumbai. MAKE IN INDIA? In July 2014, FTIL agreed to sell its remaining stake in MCX to Kotak Mahindra Bank, and Shah was forced by FMC and other regulators like SEBI and CERC (Consumer Electricity and Regulatory Commission) to divest from many of his other exchanges. Corporate India was flummoxed. How could the Indian government kill something so successful, a product which could have been part of Prime Minister Modi’s “Make in India” program? If the objective of FMC was to disallow FTIL any say in the management of MCX, it could simply have asked it to recall its directors on the board of MCX and put a stay on FTIL voting rights. But the game plan seemed larger. As of now, FTIL has exited from all exchanges, incurring losses running into thousands of crores. Even as the FTIL has challenged the government order and the courts are debating its validity, there is yet another government order to take over the management of FTIL by force. The writing on the wall

Markets made easy Commodity exchange: An exchange where various commodities and derivatives are traded. Spot exchange: The rate of a foreign-exchange contract a buyer expects to pay for a foreign currency (in another currency). Bourses: A stock market where you can buy and sell securities, commodities,

options and other investments. Currency derivatives: Future and options contracts in which you buy or sell a particular currency pair (i.e. dollarrupee, euro-rupee or poundrupee) instead of stocks. Agriculture commodity: Products, such as grains, dairy and livestock, which are meant for investments by the public. Brokerage firms: Companies which serve a clientele of investors who trade public stocks and other securities.

is clear. If the FTIL management is replaced by government nominees, there would be no one in it to challenge future orders. Worse, the ministry claims there are 13,000 “investors (actually trading clients)” who have lost their money. Thereafter, and based on permission from the Bombay High Court Committee, NSEL wanted to establish the identity of each client in its record. But the brokers, it is reliably learnt, advised their clients to decline any information. SERIOUS MALPRACTICES Brokers too were under the scanner and directors of three leading brokerage firms were arrested too. As per investigating agencies, top brokerages indulged in serious malpractices such as proxy accounts, rampant client code modifications and PAN lending amongst others. Some trading clients have also filed cases against their brokers, accusing them of wrongfully conducting illicit trades on their documents. The malpractises of PAN lending and client code modification spelt doom for thousands of unsuspecting clients, because these pirated credentials were used by their brokers into creating forged loan agreements, which made unsuspecting clients liable for recoveries several times higher than the amounts they had parked with these brokers.

Shah was thrown out of his exchange ventures, such as MCX, MCX-SX, IEX and four overseas ventures by the Ministry of Consumer Affairs on the advice of FMC.

INDIA LEGAL September 15, 2015

LEAD/ Corporate/ Jignesh Shah

Timeline April 12, 1988: Jignesh Shah started Financial Technologies India Limited, a financial services company offering technology IP to create and trade on next-generation financial markets. November 10, 2003: FTIL started MCX. February 28, 2004: NSEL was conceptualized from the then prime minister’s vision to create a national “Single Market”. July 8, 2004: Then finance minister, in his budgetary speech, asserted the importance of spot market. May 31, 2006: FMC seek concept paper from MCX for creation of national spot market. January 2007: 11th Planning Commission recommends setting up of spot exchanges. June 5, 2007: NSEL was approved as a spot exchange along with two other spot exchanges by Department of Consumer Affairs by issuing gazette notifications giving exemption to contracts from the “operations of the provisions FCRA”. December 19, 2007: Internal note from KP Krishnan, expressing concerns about the declining market share of NCDEX in comparison to MCX and asking NSE to buy out NABARD and LIC stake in NCDEX in order to give tough competition to MCX. April 23, 2012: On the basis of FMC’s recommendation, Ministry of Consumer Affairs issued show cause

notice to NSEL despite detailed clarifications given by it. May 23, 2012: NSEL responds to show cause notice from ministry. No response from government. October 18, 2012: Reminder from NSEL. No government response. July 12, 2013: FMC asks NSEL to stop launching any fresh contracts and settle existing contracts on their due dates. July 18, 2013: FMC reverses its stance and informs the government that it closed down NSEL validity. December 2013: FMC declares FTIL not fit and proper. FTIL sold its stake in MCX. FTIL sold its stake in MCX SX. May 7, 2014: Shah arrested on charges of non-cooperation by EOW despite being summoned seven times by EOW and he voluntarily having visited it 21 times. August 22, 2014: Shah gets bail from the Bombay High Court. October 21, 2014: Krishnan invokes legal provision to force FTIL to merge with NSEL on the basis of recommendation made by FMC. November 21, 2014: Jignesh Shah steps down as the MD & CEO of FTIL and new board of directors inducted in FTIL.

Shah does not talk, nor visit the FTIL building he lorded over. People close to him have compared his life to that of Abhimanyu, son of Arjuna. In short, the brokers ensured profits at the clients’ expense. Interestingly, trading clients Sharad Saraf and his son Pankaj, the main complainants against NSEL defaulters, cut back-door deals with certain major defaulters and settled their unclaimed dues. India Legal has copies of the backroom deals. Such deals were undertaken without the knowledge of investigating agencies, courts or affected parties and weakened the stand against defaulters. The logic proffered in favor of FTIL and NSEL merger is that the latter is bereft of any resources and therefore, FTIL resources

September 15, 2015

can be used for settling the liability on behalf of the defaulters. Senior officials of FTIL are worried about the fate of 63,000 well-defined equity shareholders whose cash is involved. Worse, the livelihood of thousands is being jeopardized. But there are no answers. Shah does not talk, nor does he visit the majestic FTIL building he lorded over. People close to him have compared his life to that of Abhimanyu, son of Arjuna, who was pushed into chakravyuha (cubicle) by the Kaurava kings and killed mercilessly without defense. Shah lives in hope and wants to rise like a phoenix from the ashes. When he meets people, he shares his next vision—to create 108 digital disrupters for 12 different industries that will create India’s biggest digital wonder and sustain the nation till 2025. But that’s another story. IL

LEAD/ Corporate/Bureaucracy’s Role

Decrees obtained by NSEL against defaulters

The Final Blow Came Joint secretary KP Krishnan’s letter suggests that competing interests were threatened by FTIL’s growing clout

confidential note by KP Krishnan, then joint secretary in Department of Economic Affairs (DEA), which was sourced through an RTI query, shows the government’s interest in helping National Stock Exchange (NSE), a private equity entity. Krishnan, thanks to his posting and clout, was the blue-eyed boy of the then finance minister, P Chidambaram. In this note, Krishnan said that two public sector undertakings, LIC and NABARD, should be ordered to divest their shareholding in NCDEX in favor of NSE so that it could become the single-largest shareholder of NCDEX. The note states that “the immediate need for this arises from the desire to revive NCDEX which must be done as early as possible so as to provide credible competition to MCX”. MCX, incidentally, was the crown jewel of FTIL, and India’s topmost and the world’s second-biggest commodity exchange. NSEL was not even operational then. This note was initialed by Chidambaram. At the time of this note, neither MCX nor NCDEX (both commodities exchanges) were within the regulatory purview of Krishnan or the ministry of finance, but were regulated by the Ministry of Consumer Affairs (MoCA). It is, therefore, surprising why Krishnan went beyond his jurisdiction. 2004: THE DIE IS CAST The beginning of FTIL’s end began in early October 2004 when finance minister Chidambaram and minister of Consumer Affairs, Food and Public Distribution Sharad Pawar discussed converging regulators of financial and commodity markets into a single entity, quite unlike the global trend where both had separate regulators. Pawar stiffly opposed the idea as agricultural commodities came under his ministry and he wasn’t willing to let go of such a huge turf. Pawar, with his political clout, managed to thwart Chidambaram’s aspirations and succeeded in keeping commodities markets out of Chidambaram’s clasps. However, later Chidambaram was at the helm when FTIL’s downfall began.

September 15, 2015

PLAYING A ROLE Chidambaram had signed the note written by Krishnan

Sr. No. 1 2 3 4 5

Defaulter Name ARK Imports Pvt Ltd Yathuri Associates Aastha Minmet India Pvt Ltd Juggernaut Projects Ltd Swastik Overseas Corporation Total

Amount (in Cr) 719.37 264.96 12.50 145.00 91.19 1233.02

2012 ONWARDS—FMC ROLE After the FMC was designated the agency to supervise and regulate spot exchanges, it sought clarification from NSEL regarding the exemption from the “operations of the provisions of Foreign Contribution Regulation Act (FCRA)”. Without checking the validity of the earlier general exemption granted to spot exchanges, FMC reported to the MCA of violation by NSEL. Despite NSEL’s detailed clarification in February 2012, the FMC sent a letter to the Department of Consumer Affairs on April 10, 2012, stating that NSEL had breached conditions of the exemption notification. It called upon the MCA to take action against NSEL. A counter-explanation with reminders by NSEL met with no response from the FMC. After a year, without prior notice, the FMC chairman Ramesh Abhishek on July 12, 2013, pushed the Ministry of Consumer Affairs to direct NSEL to halt launching of further and fresh contracts, leaving NSEL members and trading clients in the lurch. What was surprising was that while NSEL was asked to stop trading, another spot commodity exchange platform—NCDEX Spot Exchange—continued to function without a hitch. Further, FMC wrote a letter to the Ministry of Consumer Affairs—now sourced through RTI—that NSEL was closed abruptly without checking the legal validity (see letter). Meanwhile, defaulters, who had taken money from the trading members against their goods, started clandestinely selling the goods, while brokers who had indulged in margin funding and client code modification, panicked and sent recovery notices to their unsuspecting clients. However, NSEL secured nearly 84 percent of default monies by way of judicial decrees and injunctions on admission of dues by defaulters. The final nail in the coffin was delivered on October 2014 when Krishnan was to leave for a new posting. Before that, he made

Order of

Order Date

Bombay High Court Bombay High Court Bombay High Court Bombay High Court Bombay High Court

20/07/2015 18/12/2014 23/12/2014 23/12/2014 18/12/2014

Details of injunction obtained by NSEL against defaulters till date: Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12

Amount Claimed in TPN / Suit / Section 9

Name of Defaulter Vimladevi Agrotech Limited Namdhari Rice & General Mills Namdhari Food International Pvt Ltd P.D. Agro Processors Pvt Ltd White Water Foods Pvt Ltd Mohan India Pvt Ltd & Tavishi Enterprises Pvt Ltd N.K. Proteins Ltd NCS Sugars Ltd Spin-Cot Textiles Pvt Ltd MSR Food Processing Metkore Alloys & Industries Ltd Shree Radhey Trading Co Total

14.02 10.75 53.07 680.23 86.12

23/12/2014 23/12/2014 23/12/2014 11/4/2014 10/10/2014

1,037.84

1/12/2014

937.89 58.85 38.26 8.82 94.83 34.59 13055.27

3/2/2015 10/24/2013 22/11/2013 20/2/2015 12/3/2015 23/12/2014

FTIL’S STAKE SALE FTIL Exits

Value Realized in INR (crore)

USD 150 million (Rs. 900 crore+) NBHC 230 MCX 887 MCX SX 63 IEX 73 Total Value Realized till date* 2153+ Total Debt in FTIL 474 SMX

Date of BHC Order for Injunction

Neither MCX nor NCDEX were within the purview of Krishnan, it is surprising why he went beyond his jurisdiction.

sure that the MCA, based on the August 2014 recommendation of the FMC, served a draft notice of amalgamation of NSEL with FTIL on October 21, 2014. This was done under the pretext of public interest, undermining the overall interests of 63,000 shareholders of FTIL. FMC’S FAILURE The FMC did not follow the way SEBI hanINDIA LEGAL September 15, 2015

LEAD/ Corporate/Bureaucracy’s Role

OMINOUS SIGNS? (Top) In 2004, union minister Sharad Pawar thwarted FM Chidambaram’s move to control the commodities markets (Above) FMC’s letter to consumer affairs ministry sounding the death knell for NSEL

September 15, 2015

dled the 2006 IPO scam of NSDL. Then, SEBI chased 107 equity broker entities and recovered 25 percent of the monies due to 12 lakh investors. In the NSEL crisis, seven defaulters owed 85 percent of the total default amount, while 30 brokers accounted for 70 percent of total dues. FMC could have chased only 7-10 defaulting entities and solved the crisis. In his August 4, 2013, meeting with brokers and defaulters, Abhishek was assured by defaulters that they would pay back in a phased manner. Despite this assurance and the subsequent empowering of the FMC through gazette notification of August 6, 2013, it did nothing to disgorge defaulters’ assets. However, it turned its focus on NSEL, FTIL and its promoters.

NATIONAL BRIEFS

WRONG AMALGAMATION? Experts say this proposed merger was wrong. Their reasons: Hearing Pending: MCA is invoking Section 396 despite the matter pending for hearing. It has not given FTIL’s stakeholders an audience despite MCA promising to do so in the High Court. It has also ignored its own circular that sets out guidelines for amalgamation. No public interest involved: The amalgamation does not serve any public interest as it undermines the interest of over 63,000 legitimate shareholders of FTIL against the purported number of 13,000 trading clients on NSEL platform. Six percent of trading clients account for 66 percent of outstanding settlement obligation from the defaulters. Seven defaulters account for 85 percent of the total default amount. Trading Clients: The Bombay High Court has noted that the trading clients had been calling themselves as “investors” and termed these people “bogus traders”. Concept of limited liability: By seeking to merge the subsidiary with parent company, the MCA is undermining the principle of Limited Liability which is the fundamental edifice of Company Law. There are extenuating circumstances to stop this amalgamation. These are: Alleged lack of financial resources: FTIL is supporting NSEL by forwarding a loan of `15 crore towards working capital and will continue to do so, says the current FTIL management. Alleged lack of HR: NSEL has 57 fulltime staff of which 18 are senior management, who are working towards recovery from defaulters. Alleged slow pace of recovery: NSEL has been able to secure a recovery amount of `4288.29 crore from defaulters through ways of decrees on admission and injunction. In addition, brokers have been already paid `542.99 crore, thereby cumulatively addressing liabilities of `4831.28 crore out of the total `5,600 crore. Therefore, 86.27 percent of default amount has been secured for recovery through decrees from the Bombay High Court and injunctions from other courts. IL

Abolish death penalty, says Law Commission A NEW draft report of the Law Commission has recommended ending death penalty except in terrorism-related cases. The draft report, circulated among the members, supports doing away with capital punishment, according to a report in The Indian Express. The Commission, headed by Justice AP Shah (left), is likely

Madras HC notice to BCCI THE MADRAS High Court has issued a notice to the Board of Control for Cricket in India (BCCI) on a petition submitted by Chennai Super Kings (CSK), challenging the order of Justice Lodha Committee suspending its Indian Premier League (IPL) franchise. CSK had been suspended following the 2013 betting scam involving its top official, Gurunath Meiyappan. A division bench, comprising Chief Justice Sanjay Kishan Kaul and Justice TS Sivagnanam, also allowed Cricket Association of Bihar (CAB), on whose plea the Supreme Court had directed the probe in IPL-6 betting and spot fixing scandal, to implead in the case.

to submit its report in coming days, though the seven full time members of the Commission might not be in unison on the issue. Interestingly in 1962, in its 35th report, the Commission had recommended retention of death penalty. The report assumes significance in the light of a debate generated over the hanging of Yakub Memon.

Guwahati HC bans small cars THE GUWAHATI High Court has banned the launch and sale of small cars that do not meet crash-test norms in Assam. The order is in response to a petition that sought to make vehicles safer. The petitioner sought stringent safety standards in the state, which consists of many mountainous regions. A crash

test, like the Global New Car Assessment Program (NCAP), which is followed in Europe and developed markets, is what the petitioner is seeking. The order bans cars that weigh below 1,500 kg. Popular models such as Maruti Suzuki Alto, Swift, Hyundai i10, EON, and Honda Jazz have been hit following the order.

Shortage of HC judges ACCORDING TO the latest data compiled by the law ministry, as on August 1, 2015, nearly 24 high courts across the country were working with just 633 judges, as against the approved strength of 1,017. The Collegium System, wherein judges recommended names of judges for appointment and elevation, has been done away with by the National Judicial Appointments Commission (NJAC) Act, but the new substitute is yet to take shape. The Chief Justice of India has refused to take part in a meeting with the Prime Minister in the selection committee of the panel under the new law, thus leaving the new system in a limbo.

Case dismissed THE US Court of Appeals has affirmed a previous district judge’s order that had dismissed the lawsuit against Congress president Sonia Gandhi, for human rights violations in connection with the 1984 anti-Sikh riots. The lawsuit was filed by a Sikh group, named Sikhs for Justice (SFJ). The court rejected the SFJ petition, citing lack of merit. In June 2014, US District Judge Brian Cogan dismissed the human rights violation lawsuit by SFJ against Gandhi due to “lack of subject matter jurisdiction” and failure to state a claim. Gandhi's lawyer eminent Indian-American attorney Ravi Batra termed the appeals court ruling as “historic”.

Therefore, no judge can be elevated as chief justice of a high court, transferred to another high court or elevated to the supreme court as there is no system in place for the purpose. Only the high courts of Meghalaya, Sikkim and Tripura face no shortage of judges.

INDIA LEGAL September 15, 2015

STATES/ Gujarat/Patel Agitation

SEETHING RAGE ON MODI’S HOME TURF

In a move that has befuddled many, the powerful and affluent Patel community in Gujarat, under the leadership of young Hardik Patel, has gone on the rampage demanding reservations. How will this fury be tamed? By RK Misra in Ahmedabad

like microbes multiply by dividing, so does an India riven by caste-based reservations. There is ample evidence of this in the rich state of Gujarat, which has been up in flames recently because of the agitation of the numerically strong and financially solid Patidar (Patel) community which demands quotas. Constituting about 14 percent of Gujarat’s total population of 63 million, they have 21 percent voter representation and are demanding caste-based reservation under the Other Backward Classes (OBC) category. This, despite the fact that they hold a castiron grip over the state. The political, administrative, legislative, trade and industrial levers of power in Gujarat are in their hands. In fact, 8 of the 24 ministers in the Anandiben Patel government and 42 of 182 legislators in the Gujarat Vidhan Sabha are Patels. Even the state BJP president, RC Fardu, belongs to their caste. UST

OPENING A PANDORA’S BOX Hardik Patel at the rally in Ahmedabad, demanding reservation for Patels

SNOWBALLING MOVEMENT The Patels’ demand for reservation has plunged Gujarat into an unprecedented turmoil. The agitation, which began less than two months ago, has snowballed into a movement of sorts, catapulting its hitherto unknown 22-year-old leader, Hardik Patel, into national limelight. On August 25, at a massive rally in Ahmedabad, he demanded that Anandiben

personally come to the venue to receive their charter of demands under pain of an indefinite fast. Aware that this move for a fast had split the hastily united leadership of the Patidar movement, the administration retaliated in the only way it could. After night, a lathi-charge ensued, with the attacking cops damaging parked vehicles and arresting Hardik along with four of his fasting colleagues. The reprisal was fast and stunning, leaving the government dazed. As news of the arrest spread like lightening, the entire state was up in flames, with government property, state transport buses, police stations and the police themselves becoming prime targets of Patel ire. With public appeals from both the chief minister and Prime Minister Narendra Modi falling on deaf ears, large contingents of paramilitary forces were airlifted in aid of the State Reserve Police Force (SRPF) and the Rapid Action Force. Hastily summoned columns of the army too carried out a flag march in Ahmedabad.

Though Patel was released in an hour, it was too late to stop the mayhem. An unrepentant Hardik told India Legal: “The full responsibility for the proliferating violence rests squarely on the shoulders of the administration. We had organized a huge rally, gathering almost 18 lakh people from all over the state without a blemish. Everything ended peacefully and the rallyists went back without a hitch. It was thereafter in the night that the police brutally attacked the remaining people at the ground without any provocation and took me into custody for no rhyme or reason. The result is there for all to see.” The statewide bandh called by him on August 26 after his release was a success, with “gangs” going around forcing shops, offices and business establishments to close down under pain of violence.

PATEL POWER (Above) The show of strength at the Ahmedabad rally

HIMALAYAN GOOF-UP Political analysts have termed the goof-up by the government as Himalayan. A veteran

Photos: UNI

September 15, 2015

INDIA LEGAL September 15, 2015

STATES/ Gujarat/Patel Agitation

The Patidars’ game plan now is to enlarge the scope of their stir to the national level so as to force a review of the policy on reservation.

TROUBLED TIMES (Right) The movement was in part designed to embarrass Chief Minister Anandiben Patel

Gujarat watcher said: “Laid low by the rapidly proliferating public agitation by the Patels, the government lost its nerve. It should have exercised patience to allow the differences within the various warring constituents to concretize.” A senior bureaucrat, who handled numerous crises under both the Modi and Anandiben governments, said on condition of anonymity: “Forced to play second fiddle to a greenhorn over the last two months, the government initially underestimated and then, was completely out of its depth in dealing with the agitators. It resorted to a knee-jerk reaction and came a cropper.” But it should have heeded Hardik’s speech, which clearly spelt out that if their demands were not met, they would escalate the stir to the national level. He also unfolded the roadmap for it. “Apart from the 1.80 crores in Gujarat, we number 27 crores in the country, with both Bihar chief minister Nitish Kumar and Andhra Pradesh chief minister Chandrababu Naidu being in our community fold. Besides, we have a total of 117 MPs in the present parliament,” he reeled off. This was obviously a problem headed straight for Modi’s doorsteps in Delhi.

The Patidars’ game plan now is to enlarge the scope of their stir to the national level so as to force a review of the policy on reservation, with a single-point criteria of it being only for the economically backward class. KEEPING VIGIL It is common knowledge that both the RSS and Modi favor it and would not be averse to a national debate on the subject. Highly placed sources aver that the Sangh Parivar has been keeping a sharp vigil on the agitation, with some of their leaders being in touch with VHP constituents. At the same time, they do not want any harm to come to the Anandiben government and are keen to apply the brakes to ensure this. Nevertheless, what is exercising the minds of common people are these questions —Who is Hardik Patel and what is his background? Where does the agitation derive its managerial acumen and financial wherewithal? Incidentally, Hardik Patel is the son of a farmer who also doubles up as a dealer of submersible pumps. He belongs to a middle class family from Chandrapur village in Viramgam taluka near Ahmedabad. A commerce graduate from an Ahmedabad college,

Hardik is fond of cricket and has represented Baroda in inter-district cricket tournaments. Not many in the state know about his political affiliations, though there have been talks that he was at one stage involved with the Aam Aadmi Party. By his own admission, he has no political affiliations, nor does he support any political party. “I have a one-point program, ie, to ensure that the Patidars achieve the purpose they set out to fulfill for which I am prepared to go to any length,” he told India Legal. DISSIDENT GROUP The fact of the matter is that the movement for OBC reservations for the Patels was the brainchild of a group of sidelined and disgruntled BJP leaders from the same community who had made common cause with others opposed to Anandiben. Her detractors were aware that she was in position to accede to their demands. They were also aware that she enjoyed Modi’s confidence and would not be permitted to be replaced. The idea was to embarrass her with a subdued showing in the

September 15, 2015

ensuing elections to local self-government bodies due later this year. They were, however, in for a shock when the agitation took off in right earnest, riding on the shoulders of the frustrated youth of the Patidar community. They were fed with visions of jobs aplenty through talks of a “Gujarat model” during Modi’s 12-year rule in the state. The BJP dissidents who backed this stir soon lost control of it and found themselves rendered irrelevant even as Hardik’s irreverent style and refusal to play footsie with the ruling party politicians only added to his aura. The Intelligence Bureau has already submitted the names of those from the ruling BJP who were involved in aiding and abetting the Patidar movement and these have found their way to Modi through Anandiben. For the moment, things stand delicately poised. While the issue of reservations acquiring national overtones to stimulate a debate is acceptable, this will not be at the cost of the Anandiben Patel government in Gujarat. IL

BOILING ANGER (Above) Violence erupted after Patel’s arrest

INDIA LEGAL September 15, 2015

STATES/ AP vs Telangana

a n a g n a Tel

The immediate concern is the bifurcation of the AP High Court. Currently, the composition of judges is heavily weighted in favor of Andhra.

Andhra vs Andhra The battle of egos between the chief ministers of the two states has reached the Supreme Court and is a long festering one. How will the center handle it? By Bhavdeep Kang

HE slugfest between the chief ministers of Andhra and Telangana, each bashing the other on the noggin with criminal charges, may be a comic treat for YouTube viewers. But in the two newbie states, no one is laughing. Least of all the legal community. Wily Telangana CM K Chandrashekhar Rao or “KCR” deftly set the ball rolling by entangling his Andhra counterpart Chandrababu Naidu or “Babu” in a cash-for-votes scam. Babu hit back at KCR with telephone-tapping charges. They threw the book— in this case, the IPC—at each other and the matter is now before the Supreme Court. Other flash points include serious concerns such as water-sharing and petty ones like denial of a building permit for Babu’s new house in Hyderabad. The fisticuffs are fuelled as much by a clash of egos as the acute economic disparities between the SWORN ENEMIES Andhra Pradesh Chief Minister Chandrababu Naidu (left) and Telangana Chief Minister K Chandrashekhar Rao (right)

two regions. The feud between the two, once buddies or at least co-conspirators and now sworn enemies, is long standing. AP HIGH COURT Perhaps the most immediate of many concerns is the bifurcation of the Andhra Pradesh High Court and the filling of vacancies in the lower courts. Currently, say Telangana lawyers, the composition of judges is heavily weighted in favor of Andhra. Earlier this year, the AP High Court ruled that it would serve both states until the central government sets up a separate court for Andhra, after which the Hyderabad HC would serve Telangana (in accordance with Section 31 of the AP Reorganisation Act 2014). A division bench comprising then Chief Justice Kalyan Jyoti Sengupta and Justice PV Sanjay Kumar put the ball in the center’s court, adding that the AP government would have to decide where to set up the new HC. For Telangana, a separate HC is a matter of urgency. According to Shravan Kumar, who represents the Telangana Young Advocates’ Association: “Of the 49 judges, only six are from Telangana. The rest are mainly from Andhra. In the lower judiciary, we find 85 percent domination by Andhra.” In the matter of filling up vacancies, this gives Andhra a natural advantage. Says Kumar: “In Andhra, there is a

culture of competitive examinations, which we in Telangana do not have. So they walk away with all the posts, in every field.” The Supreme Court has ordered that all vacancies be filled by mid-September, rejecting Attorney-General Mukul Rohatgi’s plea that appointments cannot be made unless Telangana puts in place a separate judicial cadre. An order that must be obeyed for fear of swift reprisal. The removal of the Karnataka HC registrar-general for not respecting the deadline to fill up posts a couple of months ago has had a salutory effect. Sentiment against Andhra and the union home ministry, responsible for bifurcation of the HC, runs high in Telangana. The perception that adjudication on the controversial Sections 8 and 10 of the AP Reorganization Act will go in favour of Andhra has added urgency to Telangana’s demand for bifurcation. FRIENDS TURNED FOES First, a brief recap. Babu and KCR started their careers with the Youth Congress, later switching to the Telegu Desam Party (TDP). Babu

CAUGHT IN THE CROSS-FIRE (Above left) Governor ESL Narasimhan (Below) Andhra HC that is the main bone of contention

Photos: UNI

August 31, 2015

INDIA LEGAL September 15, 2015

STATES/ AP vs Telangana

The fisticuffs are fuelled as much by a clash of egos as the acute economic disparities between the two regions. The feud between the two sworn enemies is long standing.

DISCONTENT FLOWS (Below) The sharing of waters of the Nagarjunasagar dam is a sore point (Above right) Telangana state protestors

September 15, 2015

revolted against TDP founder (and his fatherin-law), NTR, in 1995, with KCR taking his side. He later joined Babu’s cabinet. In 1999, Babu – then riding high as a key member of the ruling BJP-led National Democratic Alliance (NDA) – relegated KCR to the post of deputy Speaker. It was an insult KCR would never forgive, particularly after intermediaries brokered a truce, only to have Babu renege on his commitments. KCR quit the TDP to launch the Telangana Rashtra Samiti (TRS) in 2000. The KCR-YSR Rajasekhara Reddy combine swept the 2004 assembly and Lok Sabha polls and KCR got a cabinet berth in the UPA government, only to quit in 2006 over the Telangana issue. Both KCR and Babu went into decline until YSR’s demise in 2009. The UPA finally caved and allowed bifurcation of Andhra Pradesh in 2014. Telangana, it is said, was an idea whose time had come, after 60 years of sporadic, at times bloody struggle. However, the move— dictated by the necessity of hanging on to the state which had the maximum number of MPs in 2004 and 2009—achieved the reverse. The Congress was decimated and both KCR and

Babu surged back to power. Since then, they have bickered ceaselessly over the division of assets, control over institutions and common capital (for the next ten years) of Hyderabad. Law and order is under Section 8 of the Reorganization Act, directly under the governor. Telangana questions the constitutional validity of Section 8, while Babu insists that guidelines be framed for its implementation. Section 8(3) is peculiar in that it says the governor shall act on the advice of the Telangana council of ministers but, at the same time, grants full discretion in exercising his “individual judgment”. The HC dismissed a PIL against Section 8 earlier this year. Governor ESL Narasimhan, being a UPA appointee, contends with a trust deficit vis-a-vis the two CMs, who watch out for any hint of partisanship. A senior Congress leader observed that Babu’s belligerence is exacerbated by the fact that he was caught flat-footed in the cash-forvote scam. “As I understand, his conversation with the nominated MLA who alleged a bribe had been offered to him by TDP, was inadvertently recorded by an aide and fell into the hands of the Telangana police. This gave KCR a club to beat him with,” he says. Babu, however, claimed the purported recording was fake and countered with a telephone-tapping charge. Two TDP MLAs have been arrested by the Telangana Anti-Corruption Bureau (ACB)

in connection with the charge of bribery. According to senior Eenadu journalist G Krishnamohan Rao, KCR was reined in only when home minister Rajnath Singh prevailed on him to go slow on the case after “Babu came to Delhi and met everyone”. SPECIAL STATUS A more serious concern for Babu is the demand for special status to Andhra. While the UPA did not specifically include it in the Act, the Congress and the YSR Congress have both raised the demand, saying the promise of the then central government must be honoured. For Babu, putting pressure on the NDA to deliver is a political compulsion. BJP general secretary P Murlidhar Rao observed: “Special status for Andhra has not been rejected. It is under consideration.” Regardless of this half-hearted assurance, in order to avoid upsetting Tamil Nadu and other neighboring states, Andhra will in all likelihood be generously compensated in ways other than the grant of special status. In parliament, MoS finance Rao Inderjit Singh had stated that special status was off the table for any and all states, other than the 11 already granted. Like the bifurcation of the HC, division of assets is proving to be a slow process. The Sheela Bhide panel was set up last June to determine the disposition of state-level institu-

tions between the two. A year-and-a-quarter later, de-merger reports have been submitted for only two-thirds of the 90 entities listed in the Act. Water is a current and future flashpoint, now that Telangana is an upper riparian state. Any irrigation projects initiated by the state would impact Andhra. The semi-drought this year has sparked off a furious exchange of letters, each state charging the other with arbitrarily taking up new irrigation projects in violation of the AP Reorganization Act. Sharing of water from Nagarjunasagar and Telangana’s insistence on the Palamuru and Dindi lift irrigation projects have alarmed Andhra. Telangana has hit back by questioning the Pattiseema lift irrigation project. The process of reorganization is delicate, given the prevailing sentiment in Telangana that it has historically gotten the short end of the stick. It sees itself as underdeveloped and discriminated against in terms of allocation of resources, although it is the custodian of considerable mineral wealth. People here are now impatient for freedom and want the state to chart its own course, even if means taking the occasional misstep—like the cheap liquor policy and motor vehicle entry tax. Expediting the separation of the judiciary and division of assets will go a long way to defusing tensions between the two states. Even so, considerable tact and skill on the part of the central government is imperative to ensure that both parties are satisfied. IL

DEMANDING DIVISION (Above) Women agitating for the formation of a separate state of Telangana, finally granted in February 2014

INDIA LEGAL September 15, 2015

LEGAL EYE/ Muslim Personal Law/Survey

Surprising Revelations A survey among Muslim women in 10 states threw up startling results. Almost 92 percent wanted talaq to be banned. With an NGO publishing a model nikah namah, are the signs of change on the horizon? By Ajith Pillai

HAT the Muslim Personal Law is gender unjust and discriminates against women is wellknown and has been articulated on several intellectual platforms. But now, perhaps for the first time, an extensive survey has been conducted to give voice to ordinary and marginalized Muslim women about a law that has an important bearing on their marital and adult life. The outcome of the study is not only revealing but should make Muslims as well as lawmakers sit up and introspect. The survey was conducted among 4,710 Muslim women across 10 states between July and December 2013 by the Bharatiya Muslim Mahila Andolan (BMMA), which describes itself as a “secular, autonomous and rightsbased Muslim women’s movement”. VITAL QUESTIONS Among the questions asked were: what should be the minimum age for marriage;

should men be allowed to keep more than one wife and should the oral system of divorce or triple talaq, which bypasses the established legal system, be banned. The results of the survey reflect that an overwhelming number of Muslim women are not only against what they feel is an archaic law but they also want the government to codify a new legislation which is non-discriminatory, gender sensitive and relevant to modern times. The BMMA operates in 12 states and for the survey, its activists and volunteers reached out to respondents in urban and semi-urban centers in Maharashtra, Gujarat, Bihar, Rajasthan, Madhya Pradesh, Jharkhand, Odisha, West Bengal, Karnataka and Tamil Nadu. Answers to the BMMA survey reflect the frustration among Muslim women (see graphs) with certain practices followed in the name of the Personal Law. For example, as many as 92.1 percent respondents were against the unilateral or oral divorce system or talaq. They wanted it banned. A sizeable majority, 88.5 percent, wanted the qazi who sends the notice of oral divorce to be punished. But what came as a surprise was that 95.5 percent of those polled had not even heard about the All India Muslim Personal Law Board (AIMPLB) which claims to be a representative body of Muslims in the country. Zakia Soman, one of the co-founders of BMMA, said: “The AIMPLB is only an NGO like any of us. It has simply been given too much importance by the media and politicians. The average Muslim does not recognize it or even know of its existence.” Indeed, for the record, the AIMPLB is a non-government body set up in 1973 “to adopt suitable strategies for the protection and continued applicability of Muslim Personal Law”. But the popular perception is that the organization is a quasi-official one whose reactions must be sought on every Muslim issue. DON’T TAMPER The AIMPLB, on its part, has been critical of the survey and the conclusions drawn, including the one calling for a ban on talaq. Maulana Abdul Raheem Qureshi, spokesper-

What came as a surprise in the survey was that 95.5 percent of those polled had not even heard about the All India Muslim Personal Law Board. son of the AIMPLB, reportedly had this response: “Which sane Muslim in the country is not aware of the AIMPLB? We are not in favor of tampering with Muslim laws. The Islamic system gives a way out of a difficult marriage—it allows couples a chance of coming out of a bad relationship.” When contacted by India legal, a representative of the AIMPLB refused to elaborate further, saying that he would not like to comment without seeing the survey and could not go by a few sketchy media reports. That apart, how much credibility should one give to the survey and the organization that conducted it? When contacted by India Legal, activists who work with Muslim women in Gujarat, Mumbai and Delhi vouched for the genuineness of the BMMA, although they differed with it on ideological grounds. “They have fought against communal forces and have taken up issues that affect the lives of Muslim women. So we should not be dismissive of its survey. After all, it confirms that women are fed up with the patriarchy that rules the Muslim clergy and the Personal Law. But will the data be taken as seriously as, say, the study conducted by the Sachar Commission? Was the same rigueur

Photos: Anil Shakya

September 15, 2015

INDIA LEGAL September 15, 2015

LEGAL EYE/ Muslim Personal Law/Survey

92.1% Muslim Women Want Triple Talaq Banned AROUND 4,710 adult Muslim women, from the middle and lower middle class, took part in the survey conducted between July-December 2013, by the Bharatiya Muslim Mahila Andolan (BMMA). Responses were elicited from urban and semi-urban centers in 10 states—Maharashtra, Gujarat, Bihar, Rajasthan, Madhya Pradesh, Jharkhand, Odisha, West Bengal, Karnataka and Tamil Nadu. A majority of 78.7 percent women were homemakers. 12.7 percent respondents were employed in the unorganized sector, 7.9 percent in the organized sector and others, 0.7 percent. The annual income of 73.1 percent was below ` 50,000, of 18.3 percent between ` 50,000 and `1 lakh, and of 8.6 percent above `1 lakh. The respondents included 87.6 percent Sunnis, and 4.1 percent Shias. 8.3 percent claimed they were unaware of which sect they belonged to.

Yes 37.2%

Yes 88.9%

No 62.8%

No 1.4%

Put behind bars 51.4% Pay compensation 36.2% Pay fine 12.4%

Yes 4.5% No 95.5%

Yes 92.1% No 7.9% Should polygamy be allowed after consent from first wife?

Should religious leaders support Muslim women’s demand for codification of laws?

Yes 86.7% No 3.4%

Should arbitration be made mandatory before divorce is finalized?

Yes 93% No 7%

Should there be a legal ban on the practice of unilateral triple divorce or talaq?

Don’t know 9.7%

What should be the punishment for a man who unilaterally divorces his wife?

The Questionnaire Have you heard of the All India Muslim Personal Law Board

Should the government help the community to codify its personal laws?

Should polygamy be allowed if first wife is terminally ill?

Don’t know 9.9% Should Darul Qaza/ qazis come under government regulation?

Yes 89.5% Should husband take the permission of the court before second marriage?

Yes 75.5% No 24.5% Should the qazi who sends the notice of unilateral divorce be punished?

No 3.4% Don’t know 7.1% Will codification help Muslim women get justice?

Yes 27.1%

Yes 88.5%

Yes 83.3% No 2.8%

No 72.9%

No 11.5%

Don’t know 13.9%

Lalit Khitoliya

followed in collating the findings? And is codifying the Personal Law of utmost priority today or are there more urgent issues that need to be addressed?” wonders an activist. She says that the BMMA is unlike other progressive women’s organizations in that it swears by the Quran and feels that any change should be within the framework of the Holy Book. According to another activist, it “holds the Quran in one hand and the Indian constitution in the other”. It believes that the Quran is just and fair to women and that it is its warped interpretation that has

September 15, 2015

caused so much mischief. Talking about the survey, Soman told India Legal: “It became possible because of our volunteers and team members. They showed the patience to interact with the women and draw them out to answer several sensitive questions. It took us six months to collect the responses.” She says there was nothing political in the survey or the timing of its release in the second week of August. “The survey was carried out in 2013 and it took us time to collate the data and also to finalize the report that accompanies it,” she says.

UNFAIR TO WOMEN In the report, Seeking Justice Within the Family by Dr Noorjehan Safia Niaz and Zakia Soman, the authors point to what they feel is the crux of the problem. To quote: “The Shariat (Islamic laws based on the Quran), as practiced in different parts of the country are subject to multiple interpretations and misrepresentations which more often than not are unfair to women. Often the injunctions in the Quran are violated in the name of the Shariat.... It is not difficult to guess as to what is the perspective and understanding of

some of the men who dispense justice at the Shariat courts across the country! Most of the time the verdicts in family matters end up being unfairly pro-men and anti-women. These can hardly be said to be based on Quranic injunctions.” The way forward that the BMMA has come up with, after consultations with women from various strata of society as well as legal experts and social activists, is to work within the framework of the Muslim religion and push for a law that is Quran compliant and yet, without the inadequacies and INDIA LEGAL September 15, 2015

LEGAL EYE/ Muslim Personal Law/Survey

Law Unto Itself Instances of flawed notions of right and wrong, with horrifying results

USLIM Personal Law in India is based on the interpretations of Shariat (Islamic laws) and can vary from place to place and from person to person. It largely deals with marriage and family matters, including divorce, custody of children, inheritance of property, etc. Since it is not codified, women activists complain that the many interpretations of Shariat laws have been extremely patriarchal and biased towards men. It is also alleged that by invoking the Shariat to justify arbitrary interpretations, women have been denied their rights spelt out in the Quran. The Shariat, liberal Muslims point out, is man-made and not divine. But its divinity is invoked to justify unjust acts like triple talaq. It was in the post-1857 era that the British introduced laws to reform society. In keeping with its divide and rule policy, separate rules were framed for Hindus and Muslims. For the latter, two laws were enacted —Shariah Application Act, 1937, and the Dissolution of Muslim Marriage Act, 1939. To put it in a nutshell, the first merely stated that Shariat laws will govern all Muslims. It did not go into specifics but left it to the interpretation of Shariat courts manned by clerics or those given the task of interpreting. The second law empowered women by giving them the right to opt out of a bad marriage on nine counts. Divorce was earlier banned for Muslim women and led to several conversions to other religions to dissolve their marriages. In post-Independent India, no changes were made. It was the Shah Bano case which created a storm in 1985. The woman from Indore was divorced by her husband in 1978 under the Muslim Personal law. But she approached the courts for maintenance. The case reached the Supreme Court, which ruled in 1985 that under Section 125 of the CrPC, Shah Bano be paid maintenance of TURNING POINT `500 per month by her husband. Shah Bano’s case was a This led to outrage among the watershed moment for Muslims Muslim community and the Congress government under Rajiv Gandhi buckled under pressure and passed the Muslim Women (Protection of Rights on Divorce) Act 1986, which virtually overturned the apex court decision. Under it, the husband is liable to pay alimony for three months after the divorce, following which the woman has to turn to her relatives for financial support. In case they fail to help, the court can order the Wakf Board or the state to provide for the woman and her children. The constitutional validity of the 1986 Act was challenged in 2001 in the Supreme Court. Shariat laws have no legal binding in India and Shariat courts can do nothing more than advise those who approach it. Fatwas passed by them are also mere advisories.

September 15, 2015

inequalities that the Personal Law has in its current form. A draft Muslim Family Law has already been circulated. “We plan to take it up with the government and with the people. We want the law codified,” says Zakia. The BMMA has also formulated and published a model nikah namah or marriage contract, which, in contrast to the ones generally used in India, safeguards the rights of both spouses, and is fully in accordance with the Quran. It was framed by a team of Muslim women scholars with the help of the well-known Islamic scholar, the late Dr Asghar Ali Engineer. Several marriages, according to the BMMA, have been conducted in Maharashtra and Gujarat, using this nikah namah. It remains to be seen if the BMMA’s campaign for a codified Muslim Personal Law will overcome resistance from the clergy and the powerful conservative political lobby within the community. One issue that the lobby raises is the word “Bharatiya” in the full form of BMMA. But the organization is clear that “Bharatiya” means Indian and it does not believe in allowing Hindutva elements to monopolize the term. Zakia also maintains that she and others associated with the organization are strongly opposed to Hindutva oriented politics and will not allow their campaign to be exploited by vested interests. IL

MEDIA/ Amateur Sex Videos

Pawns in the porn game

Anthony Lawrence

Despite the mounting concerns about child pornography, the govt has forgotten amateur sex videos, which prey on young women. Why aren’t ISPs being criminally charged for giving access to them? By Abhay Vaidya

HAT is the nature, if not criminal, of YouTube amateur sex videos such as Mumbai College Girl MMS Scandal 2013 (with 6.14 lakh views) or Hot Indian Sexy Young Lady Sex with Boyfriend (with 3.9 million views)? There are thousands of such videos available to porn consumers in India, such as Indian College girl hot sexy scandal in classroom, Indian Girls Hostel Video Leaked and Medical College Ragging, all of which ought to be pursued by the police, booked and banned outright.

These videos are not sophisticated pornography produced by a well-regulated industry as in the US, but amount to acts of crime. In some cases, their presence in a mass medium like the internet has even led to suicides by young girls. VULNERABLE WOMEN Unfortunately, it was sex videos such as these that remained hidden from the public glare during a recent debate on the right to pornography in the privacy of our homes. What did not come into focus was the vulnerability of minors and young women who were filmed secretly by mobile phone cameras, spycams and webcams. Porn websites, Internet Service Providers (ISPs) and telecom companies generate high revenue through the popularity of such sex videos which are consumed voraciously on the mobile phone platform and the computer network. They may not fall in the category of child porn. Nevertheless, these videos are of a criminal nature because they have been shot or uploaded without consent. Why aren’t ISPs being charged with criminal conduct for providing access to such videos? It is not surprising that there is a wider audience for porn now. When a woman pens a signed essay in a popular Marathi newspaper under the headline: “I watch porn. What about you?”, we know that the nation has come a long way on the porn expressway.

ment’s stand before a bench headed by Chief Justice HL Dattu and said India cannot be a totalitarian state and the government’s intention was only to ban child pornography. He acknowledged that “pornography is a grey area without any straight answers” and if people want to watch it in the confines of their home, there was no way that the government could stop it. The government also did not want to do moral policing, Rohatgi said, and added in the same breath that there were issues relating to the freedom of speech and expression as enshrined in Article 19 (1)(a) of the constitution which need to be respected. The government has already withdrawn its order banning 857 pornographic websites and has assured that a mechanism would be worked out between ISPs and the Department of Telecommunications to ban child pornography. But is also high time the government tackles the menace of young girls and women being filmed secretly. This has been growing by leaps and bounds AT THE RECEIVING END (Left) HRD Minister Smriti Irani discovered a hidden camera atop a changing room in a Fab India outlet; (Below) AG Mukul Rohatgi defended the govt position on porn sites in SC

GROWING ACCEPTANCE? This was amply clear in the heated debates on TV and social media in August, when the right to pornography in the privacy of homes was discussed. There can now be no turning back in terms of a blanket ban on pornography in India. This was realized by a chastened Narendra Modi government. Not surprisingly, Attorney-General Mukul Rohatgi made all the right noises before the Supreme Court during a hearing on August 10. Rohatgi clarified the governAnil Shakya

September 15, 2015

INDIA LEGAL September 15, 2015

MEDIA/ Amateur Sex Videos

the modesty and privacy of innocent victims. These include the Delhi schoolgirl MMS, which has inspired filmmakers in Bollywood. These videos are remotely operated, and are shot during intimacy with a partner, in rest rooms, changing rooms, hotel rooms and trial rooms. One old man, who was arrested in Pune some years ago, had installed spycams in various rooms of a flat that he had rented out exclusively to college girls. Much of this sexual material is generated in the form of “revenge porn” by ex-lovers, with the intention of destroying the lives of young women. “You never know where the pinhole cameras could be hidden—they have been found behind mirrors in hotel rooms and typically, near electrical fittings. The safest thing for women to do is to ensure minimum lighting while undressing or during intimate moments,” says cyber-security expert Capt Raghu Raman.

SILVER SCREEN SCRIPTS Drishyam (top) and DevD (above) are among the movies based on MMS scandals

September 15, 2015

across India, especially in villages and small towns, where people are clearly not as smart as their smart phones. MODUS OPERANDI These short videos are done during tender private moments by unscrupulous “boyfriends” and others to blackmail the girls later. While these videos of women in various stages of undress or sexual acts don’t fall in the category of “child pornography”, they are of a criminal nature as they have been shot and uploaded without consent and invade

THRIVING MARKET Clearly, just as prostitution exists because there’s a thriving market for it, so do these clandestinely shot videos which are shown by porn sites and made available by ISPs on various platforms, including mobile ones. Porn sites solicit them on the internet itself, with attractive payment terms, thereby encouraging what could already be an organized crime. However, these illegally produced sex videos can’t be banned because they don’t necessarily constitute child pornography. They are of a criminal nature but just a fraction of cases get reported and acted upon by the police. One way to deal with this is to create mass awareness among school-going girls. They need to be counseled to be extra cautious about being secretly filmed in their private moments. Also, people engaging in such criminal activities need to be identified and booked by the police in large numbers. The most important step, however, is to demand that ISPs and telecom companies refuse to provide access to such sex videos. They are partnering in a criminal activity with producers of porn and other websites and platforms such as YouTube. IL

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SCIENCE/ Research vs Environment

Finding Neutrino An underground observatory in Tamil Nadu to study the tiniest particle imagined by man runs into green hurdles. But scientists are hopeful that it will surmount them and go on stream By Murali Krishnan

GROUND ZERO The site in Bodi Hills where the INO project is slated to come up

ndia will soon join the global high-end scientific Neutrino club with an ambitious project intending to study the properties of atmospheric neutrinos through the setting up of an underground lab. Neutrinos are sub-atomic particles produced by the decay of radioactive elements and are elementary particles that have almost no electric charge. Neutrinos are considered to be the tiniest quantity of reality

imagined by man. Their study would help us understand several fundamentals puzzling scientists and throw new light into the creation of the universe. Christened India-based Neutrino Observatory or INO, the project in Tamil Nadu will study atmospheric neutrinos some 1,300m below the rocky ground. But this ambitious `1,500 crore project that was cleared by the union cabinet earlier this year has run into a spot of bother, opposed by environment activists and a politician. LEGAL TROUBLE A Chennai-based environmental NGO, Poovulagain Nanbargal (Friends of the Earth) has moved the Southern Bench of National Green Tribunal, challenging the environmental clearance given to the construction of the INO neutrino detector. It claims the blasting of rocks in the Western Ghats could affect the fragile biodiversity hotspot. When the project comes up, it will be housed in 63 acres of land, about 2 km away from settlements in the Bodi West Hills region of Theni district, about 110 km west of

September 15, 2015

Madurai in Tamil Nadu and about 60 km from the Kerala border. Vaiko, the general secretary of the Marumalarchi Dravida Munnetra Kazhagam (MDMK) has also raised objections against the proposed project—one that was conceived in 2000. His contention in the Madras High Court (Madurai Bench) is that carrying out blasts in the zone can damage the underground aquifers and hence, impact the flow of water. In his public interest litigation (PIL) asking for a stop to the underground mission, he points to the reservoirs in Idukki and south Tamil Nadu, including Vaigai and Periyar dams in the vicinity. Despite the delay, scientists are hopeful of the project getting off the ground but are disappointed that the writs are taking up valuable energy and time. “The site is a wasteland, a barren land,” says INO project director, Naba Mondal of the Tata Institute of Fundamental Research in Mumbai. There is more than a semblance of truth in Mondal’s assertion, with a 2011 report of the Ministry of Environment and Forests stating that the forest clearance would be “notional” as “no forest land is

expected to be occupied, since both the tunnels and laboratories are underground”. What’s more, the Department of Atomic Energy has already clarified that the INO tunnel will be used for basic research and no radioactive waste will be dumped—another concern expressed by the litigants. “We are confident that this project will happen especially when so much money and time has been expended,” says D Indumathi, physicist and outreach coordinator of INO.

CO-OPTING THE LOCALS (Left) Scientists assuring villagers in Theni that the INO project will not affect the environment; (Above) Scientists associated with the INO project at the proposed site

MASSIVE PROJECT This project involves nearly 26 scientific institutions and about 100 scientists—a collaboration that is expected to grow further in the coming years. INO will be built around 1.3 km beneath the hills which provides a granite cover that blocks most other particles other than the neutrino. The 2 km-long tunnel with three caverns will house the 50,000-ton iron calorimeter neutrino detector which will be the world’s most massive neutrino detector. A neutrino detector is an apparatus designed to study neutrinos. Because neutrinos only weakly interact with other particles of matter, neutrino detectors must be very large in order to detect a significant number of them. “The technology that we are building indigenously is totally different from all the detectors that are built for neutrinos. We are using an iron calorimeter which is totally different from other scintillation detectors INDIA LEGAL September 15, 2015

SCIENCE/ Research vs Environment

Vaiko’s contention in the Madras High Court (Madurai Bench) is that carrying out blasts in the zone can damage underground aquifers and hence, impact the flow of water. that people would normally use,” explains Anil Prabhakar, a professor in electric engineering at IIT Madras. “While a lot of other basic fundamental particles have been studied in large experiments, the neutrino has always been elusive. India has the credit for having studied atmospheric neutrinos, one of the first countries to do so,” he adds. “We have been part of many collaborations abroad. Here, we have a fully Indian experiment where we have the chance to determine our own physics goals and ideas, our own experiments, our own equipment. And so we actually give the drive and direction ourselves,” maintains Indumathi.

DIVISIVE PARTICLES (Below, L-R) INO Project Director Naba Mondal and MDMK General Secretary Vaiko have divergent views on the environmental impact of the project

WONDER PARTICLES Neutrinos are probably the strangest of all elementary particles. Quick as light, unimaginable numbers of them race through space. It is a neutral subatomic particle with a mass close to zero and half-integral spin, which rarely reacts with normal matter. Neutrinos come in three types or flavour— electron-neutrino, muon-neutrino and tau-

neutrino. Each neutrino flavour has a slightly different mass, although physicists do not yet know exactly what those masses are. “These neutrinos do a three-level Jekyll and Hyde. They keep oscillating into each other. So sometimes you see a neutrino as one type and as it goes along, it oscillates or transforms into another type,” says Indumathi. Through these oscillations, scientists hope to determine the mass of these neutrinos. And this will be one of the main aims of this experiment that will be located in the INO lab. The mass differences among flavours are believed to be the main factor affecting how neutrinos oscillate or morph as they pass through space, people, matter and Earth. Calculations suggest there must be around 40 billion of the “invisible” neutrinos in a cubic centimetre of the atmosphere. MANY SPIN-OFFS Professor MVN Murthy, who is also associated with the project, underlines the importance of this endeavor. “We don’t understand many properties of neutrinos. Once that happens, you can address larger questions like matter and anti-matter asymmetry.”

September 15, 2015

Despite their smallness, the neutrino mass has far-reaching inferences. For example, the neutrino mass implies that neutrinos played a decisive role in the formation of the Universe. It potentially blurs the distinction between matter and antimatter, which might account for the apparent absence of antimatter. Questions still continue to haunt cosmologists about what makes up the universe. Dark matter accounts for about a fifth of the total matter in the universe, yet its nature and properties are still a mystery. “The rest is all unknown and that is why we call it Dark. In order to understand all these things, neutrinos are an important part which may lead to a better understanding of our universe,” adds Murthy. Most of the advanced countries are already working vigorously in neutrino science with dedicated labs. These include the US, Russia, France, Italy, China, Japan and South Korea. In March this year, China announced the construction of a neutrino observatory in its Jiangmen province with similar goals. Like the INO, the Jiangmen underground neutrino observatory is expected to be completed by 2020. Work has already begun there.

FRUITS OF SCIENCE So is there a race among growing economies to research neutrinos? “There are neutrino physicists everywhere on earth. There is also a proposed experiment in the Mediterranean Sea. Some are underground, some are on the surface of the earth, and some are at the South Pole. I think there is no limit to neutrino physicists in choosing sites,” says Indumathi. The ambitious project could open up new vistas in astronomy and astrophysics, communication and even in medical imaging, through the detector spin-offs. Besides, a lot of Indian companies and industries have already started to get involved in the construction of various components of the detector parts But when will the results of this project begin to filter? Physics simulation studies that have been under progress over the last few years indicate that scientists will need at least another five years of data accumulation before they get the first results. Even after the data is collated, it is estimated it will take at least 15 years in all. Precious time has already been lost and those involved in the project believe that science will be the biggest loser if this endeavor does not get off the ground. IL

TRANQUIL WATERS (Above) Environmentalists are worried that reservoirs in the vicinity like Periyar Lake will be affected by the project

INDIA LEGAL September 15, 2015

ENVIRONMENT/ Clearances

Open Sesame for Projects Ignoring environmental concerns, the government has given the green light for infrastructure, mining and industrial projects By Dinesh C Sharma

HE Modi government is in an overdrive on the environment clearance front. While on the one hand, it has effectively silenced dissenting voices like Greenpeace, on the other, procedures for green clearances have been put on fast track. The Ministry of Environment, Forests and Climate Change (MoEFCC ) has virtually turned into a green channel for industrial, mining, infrastructure and other projects. Rules and regulations are being bent and reinterpreted, expert advice overlooked and court orders being flouted in order to clear projects. Procedures for green clearances for Anil Shakya

DEATH TRAP The existing broad gauge railway track in Mahananda Wildlife Sanctuary in Assam poses a big danger to the elephant population

railnews.com

September 15, 2015

any project, which constitute environment, forest and wildlife, have been diluted in the name of “ease of doing business” while ignoring serious environmental concerns. The regulatory mechanisms for these clearances—Forest Advisory Committee (for forest clearance), expert appraisal committees (for environmental clearance) and National Board for Wildlife (NBWL, for wildlife clearances)—have been severely undermined in the past one year. ACTS VIOLATED The latest example of this trend is the reported decision of the ministry to allow diversion of forest land around protected areas without waiting for approval of the Standing Committee of NBWL (presided over by the minister). Similarly, rules relating to public hearings for projects and Environment Impact Assessment (EIA) are being flouted. All this, experts say, constitutes violation of different provisions of the Environment Protection Act, Wildlife Protection Act and orders of the Supreme Court in various cases. “The MoEFCC is trying to push forest clearances in several ways, bypassing necessary due diligence and application of mind with involvement of independent members,”

says Himanshu Thakkar, convener of the South Asia Network on Dams, Rivers and People. “The Forest Advisory Committee was reconstituted soon after the NDA government came to power and some of the independent members were removed.” This change has meant that projects that were rejected earlier on various grounds are being cleared. The 3,000 MW Dibang MultiPurpose Project in Arunachal Pradesh is a case in point, according to Thakkar. The project entails clearance of over 4,700 hectares of biodiversity-rich forest area which is home to several key wildlife and plant species. Despite severe environmental impact of this project and inadequacies pointed out in the EIA, the project was approved in September 2014. In July 2014, the NBWL was reconstituted by flouting the law that governs its functioning. Clause (e) of the Wildlife Protection Amendment Act, 2002, stipulates that the Board must have five representatives from non-governmental organizations. However, the notification dated July 22, 2014, mentions a nominee from the Gandhinagarbased Gujarat Ecological Education and Research (GEER) Foundation as non-official member. GEER is not an NGO but an

DEVELOPMENT TOLL (Above) The center’s eco-sensitive zone notification in mid-August stipulates only a 100m buffer zone around the Okhla bird sanctuary

Most glaring was clearance granted to a highway project (passing through Karnala bird sanctuary in Maharashtra), which was rejected by NBWL twice in the past.

INDIA LEGAL September 15, 2015

ENVIRONMENT/ Clearances

UNI

UNQUIET FLOWS THE RIVER (Above) Locals protests against the construction of Dibang Multi-purpose Project in Arunachal Pradesh; (right) Dibang River on which the dam will be built

The June 2015 meeting of the Standing Committee discussed 40 new projects, cleared 23 of them and rejected none. 60

September 15, 2015

organization that was floated by the Forests and Environment Department of the government of Gujarat. CLEARING HOUSE Similarly, Clause (f ) of the Wildlife (Protection) Act requires “ten persons to be nominated by the central government from amongst eminent conservationists, ecologists and environmentalists”, but just two experts have been nominated. One of the non-official expert members is a former conservator of forests from Gujarat. The Board has been discharging its work through the Standing

Committee chaired by the environment minister, and constituted under Section 5(A) of the Wildlife Protection Act. A review of its functioning in the past one year shows that it has become a clearing house for projects. The Committee’s mandate under the law is to closely examine projects proposed to be sited inside or in proximity of protected areas. The Standing Committee’s last meeting was held on June 2, 2015. A review of the minutes of this meeting, conducted by the EIA Resource and Response Centre (EIARRC), shows “a serious lack of deliberation and deviation from its mandate”. The com-

mittee cleared projects that were rejected by the previous NBWL, granted clearances to those for which site inspections were not done, approved those located inside critical elephant corridors, ordered site inspections after projects were approved and displayed “indulgent attitude towards non-compliant project proponents”. The June meeting discussed 40 new projects, cleared 23 of them and rejected none. Most glaring was clearance granted to a highway project (passing through Karnala bird sanctuary in Maharashtra), which was rejected by NBWL twice in the past and was opposed by the state’s wildlife warden on the ground that an alternate route was available. Three projects in critical elephant corridors were also cleared, including a railway line from New Jalpaiguri to Sevoke cutting across the Mahananda Wildlife sanctuary and involving clearance of 86.6 ha of forest land. The sanctuary is in a region that supports a large number of elephants. An existing broad gauge line has led to some 40 elephants being killed in the last eight years. Field inspection report of experts for this project has not been made public. SKEWED PERSPECTIVE “The standing committee of NBWL seems to be functioning more as a stamping house for

clearances rather than discharging its duties,” the EIARRC review has noted. “The attitude of the Board seems to be skewed towards project proponents over their mandate to assess proposals in strict conformity with Section 29 or Sub-section 6 of Section 35 of the Wildlife Protection Act.” The standing committee considered over a dozen road proposals in its meeting on August 18, 2015, and virtually recommended all of them. Three of these new road projects are within protected areas—one in Kedarnath Musk Deer Wildlife Sanctuary in Uttarakhand and two in Kaimur Wildlife Sanctuary in Uttar Pradesh. Thakkar points out that though the reconstitution of NBWL has been challenged in the Supreme Court for being in violation of the law and the court has given a stay, MoEFCC has been bypassing it and carrying forward work with the non-representative standing committee. “The way the government is demarcating the boundaries of ecosensitive zones around protected areas is not based on actual assessment of needs of protected areas, as it happened recently in the case of the Okhla bird sanctuary and earlier, in the case of many other protected areas,” says Thakkar. While project proponents would be rejoicing, is it achhe din for wildlife? IL

NEED FOR A COSTBENEFIT ANALYSIS (Above, left) The Karnala Bird Sanctuary will be hit by clearance given to a highway; (above) stone crushing activity near forest area at Nalthi in Jammu and Kashmir is threatening local ecology

INDIA LEGAL September 15, 2015

GLOBAL TRENDS/ China

The Price of Change

As China becomes increasingly globalized, is it also becoming more open and transparent in managing the internal turmoil, dissent and the uncertainties the currency is facing? By Rodger Baker

AST week was an eventful one for China. First, the People’s Bank of China shocked the financial world when it cut the yuan’s reference rate against the US dollar by nearly 2 percent, leading to a greater than 2 percent drop in the value of the yuan in offshore trading. The decline triggered a frenzy of speculation, including some expectations that the Chinese move would trigger a race to the bot-

OVERAWING GROWTH Despite controls, Chinese business has attracted global investments

September 15, 2015

tom for Asian currencies. Beijing said the adjustment was designed to fix distortions between the trading rate of the yuan and the rate it should have been at according to speculation, and that subsequent large shifts were unlikely. The International Monetary Fund, however, noted that the move could lead to a freer floating yuan — something the IMF has asked of Beijing before the organization considers including the yuan in its Special Drawing Rights basket of currencies. In comments made on the sidelines of its annual report on the Chinese economy, released later in the week, the IMF also noted that the yuan was not undervalued, despite the decline. Also last week, Chinese state media issued a warning to retired officials to stay out of politics and not misuse their former networks and prestige. The warning followed reports in state media suggesting that the annual unofficial gathering of current and former Party officials at Beidaihe was canceled and would not serve as a policy-making venue in the future. The reports noted that Party officials had already held several additional sessions in Beijing and that decisions were being made in the open, not in some secretive gathering of Party elders. Other reports circulating in Chinese media warned that former Party and military officials were involved in real estate speculation along with other economic mismanagement and needed to stop. Finally, last week China dealt with one of its worst industrial accidents in years—a series of explosions at a chemical short-term storage facility in the busy port city of Tianjin. More than 100 people were killed in the explosions and aftermath, prompting the

UNI

government to launch an investigation into illegal storage and improper safety procedures at that and other facilities around the country. Citizens have begun small-scale demonstrations in Tianjin to demand government reparations for damages as a result of the blast. In response, Beijing stepped up its media campaign against rumors, using state media to remind the public that the government publicly charged a Politburo standing committee member with corruption, so the public can trust the government to be open and not hide a conspiracy surrounding the Tianjin blast.

STARING AT UNCERTAINTY? A shopper at a discount store in January this year, when Chinese economy registered 7.3 percent growth, its weakest since the global financial crisis

f there is a common theme running through these events, it is the way Beijing is emphasizing its openness in decision-making, in reporting and in explaining its actions. This is not the China of the past that tried to hide the truths of major natural or man-made disasters INDIA LEGAL September 15, 2015

GLOBAL TRENDS/ China

is no longer effective at managing China, much less shifting it in a new direction.

THEY SHAPED THE DESTINY (Clockwise, from top) Mao Zedong, Deng Xiaoping and Xi Jinping have strongly influenced the country’s economic and political direction

September 15, 2015

from its citizens. It is not the China that operated by secret agreements made only after a consensus of Party elders, or the China that tried to protect Party officials at the expense of the public. Nor is it the China of tight currency controls, amid fears that the vagaries of global markets could affect China’s economic regulation. Or at least that is the message Beijing is trying to send. It is a message perhaps meant more for domestic than international consumption, but one that recognizes that neither abroad nor at home is there a lot of trust in the Chinese Communist Party or the government to pursue a transparent policy. The taint of corruption, collusion and nepotism remains strong and is perhaps even reinforced by the breadth and depth of the ongoing anti-corruption campaign. The reality is that China is in the midst of what may be its most serious crisis since the days of Deng Xiaoping. And the model of government and economy Deng put in place

s China emerged from the chaos of the Maoist era, Deng initiated three basic policies for China’s future growth and development, starting around the early 1980s. First, allow the economy more localized freedom, accepting that some areas would grow faster than others but that in the long run the rising tide would lift all boats. Second, prevent any single individual from truly dominating the Chinese political system. No longer could a figure like Mao Zedong exert so much personal influence that the entire country could be thrown into economic and social upheaval. Instead, China’s leaders would be locked into a consensusdriven model that limited any individual source of power and eliminated factions in favor of widespread networks of influence that overlapped so much they could not be truly divisive. And finally, walk softly internationally, be ruthless in the appearance of a non-interference policy and avoid showing any military strength abroad. This latter point was intended to give China time to solidify internal economic and social cohesion and strength while avoiding distraction or inviting undue military attention from its neighbors or the United States. In retrospect, Deng’s model worked exceptionally well for China, at least on the surface. While the Soviet Union collapsed, the Communist Party of China held together, even after Beijing’s mismanagement of Tiananmen Square. Although at times slow to respond or initiate proactive change, China’s leaders managed the country’s rapid economic growth in a way that avoided extreme social or political destabilization. The Party managed not only the leadership transitions set in motion by Deng, but also, amid intra-Party scandal, the latest transition to Xi Jinping. China’s leaders even managed the impact of the global economic slowdown and appear capable of

maintaining order even as economic growth rates slow considerably. But the relative calmness on the surface belies disturbing deeper currents. The dark secret of consensus rule was that, while appearing to provide stability, by the late 2000s it was doing more to perpetuate underlying structural problems that could delay or even derail actual reforms or economic evolution. The lack of radical shifts and turns, the avoidance of major recessions and the ability to defer significant but potentially destabilizing reforms made China look like an unstoppable juggernaut. China’s economy climbed past Japan’s and seemed destined to surpass the US economy. And if economic strength translated into total national strength, then China was emerging as a significant global power. Beijing even began breaking from Deng’s cautions on overt military power and started amore assertive foray into the East and South China seas, both because of a perceived need to protect its increasingly important sea lanes carrying natural resources and exports and because it was feeling more powerful and capable and wanted to act on those strengths. However, all economies are cyclical. As they grow through different stages, the deadwood needs to be trimmed and funding provided for the new shoots. Recessions, slowdowns, bankruptcies and sectorial collapses are all part of the natural economic process, even if they are disruptive in the short term. As China claims to be climbing the value chain in manufacturing and exports, it is not simultaneously trimming away older components of the economy or effectively weaning itself from the stability of large state companies that are disproportionately locking up available capital com-

pared with total employment. Parochial interests by local and provincial governments— themselves keen to avoid any sense of instability—have left massive redundancies intact across China’s manufacturing sectors, particularly in heavy industries, the backbone of early Chinese economic growth. Consensus politics allowed China to grow, but not in a healthy manner—and the global economy is no longer giving China the freedom to just keep pouring on the fertilizer and hope no one notices the rot spreading through the trunk and branches.

he leadership transition to Xi in 2012 was also not nearly as smooth as it first appeared. It occurred amid the Bo Xilai scandal, in which it appeared the former Chongqing Party Secretary was making a bid not only to reshape the direction of Chinese politics but also to usurp Xi’s rise to central Party and state leadership. What has emerged amid the ongoing anti-corruption campaign is that the challenge was much more serious than it may have appeared,

The economic policies are moving toward liberalization, but the political and social policies are moving toward autocracy.

DREADING DEMOCRACY Protestors in Hong Kong demand universal suffrage from Chinese leadership on July 1, 2014, marking the 17th anniversary of the territory’s handover to China

UNI

INDIA LEGAL September 15, 2015

GLOBAL TRENDS/ China

including an alleged assassination plot against Xi. The recent pronouncements regarding former Party leaders and officials staying out of politics suggests that challenges to Xi’s position are still emerging. Xi’s decision to build a national security council and economic affairs advisory body, to which he belongs, has aroused opposition from former officials used to playing a role in shaping policy. Publicly canceling the unofficial Beidaihe summit was an overt strike against former officials. The consolidation campaign continues. While China faces some of its toughest economic challenges, and after it has stepped out into the South China Sea and international military affairs in a way it cannot easily pull back on, it is also contending with internal dissent and intra-Party fight-

INFORMATION DROWNED There was widespread anger over the rescue work of a capsized boat in Yangtze River in June which was shrouded in secrecy

Photos: UNI

The fear is that significant economic reform without tight political control would lead to a repeat of the Soviet experience.

RISING CORRUPTION The recent explosion in a chemical facility in Tianjin points to widespread corruption

September 15, 2015

ing. Xi’s consolidation drive, closely linked to the anti-corruption campaign, is all about tightening the reins of control to allow more rapid policy adjustments, force macropolicies on localities and accelerate the Party and state’s response time to changing circumstances. But that challenges decades of tradition and entrenched power and interests. It also creates a contradiction: The economic policies are moving toward liberalization, but the political and social policies are moving toward autocracy.

o manage the next phase of China’s economic opening and reform—something that changes in the global economy and decades of internal ossification are forcing upon Beijing— Xi is simultaneously cracking down on media, information, social freedoms and the Party itself. The fear is that significant economic reform without tight political control would lead to a repeat of the Soviet experience: the collapse of the Party and perhaps even the state. Each event, each headline, should be assessed in the context of this internal crisis. The currency dip—an important step in liberalizing yuan trading, gaining a role in the Special Drawing Rights basket and continuing China’s path toward yuan globalization (freeing the country at least a little from the dominance of the US dollar)—has auxiliary risks, not least of which is that a freer currency can move in directions far from those the government would like to see. The explosion in Tianjin is reinforcing the fears of rampant mismanagement and corruption. It has sparked a new round of conspiracy speculation and is placing the government in a position where it must deal with protesters in a major city as well as foreign investors and traders—again raising uncomfortable ques-

tions about safety and security in China. The warnings against retired officials interfering in politics may be more than just public relations attempts to highlight some newfound transparency. This is not to say China is on the verge of collapse, that the government and Party is about to fracture along internecine battle lines, or that economic reform is simply impossible in the face of entrenched interests. But none of these are out of the question. China has entered a stage of the uncertain. The transition to an internal demanddriven economy will not happen smoothly, nor will it happen overnight. The reduction in exports and the drain on investment is already under way. And with all of these issues sitting squarely on his shoulders, Xi is preparing for his September visit to the United States, where the litany of concerns about China expands daily. The transitory period is the most chaotic, the most fragile, and that is where China sits right now. IL

FLEXING MUSCLE, GLOBALLY Soldiers of China’s People’s Liberation Army prepare for the 70th anniversary of the end of World War-II on August 22, 2015, an event which was attended by 10 countries

—Courtesy Stratfor (Rodger Baker leads Stratfor’s analysis of Asia and South Asia and has been a Stratfor analyst for the last 18 years) INDIA LEGAL September 15, 2015

GLOBALTRENDS/ China/ India Impact

Despite the bloodbath in the global markets recently, experts say India is in a better position than other countries. This is due to its sturdier economic fundamentals and tight fiscal discipline By Shantanu Guha Ray

F High on Hope

or decades, the towering edifice of the Bombay Stock Exchange stood as a beacon of hope for India’s investors and the nation’s financial fortunes. But recently, as India unwillingly participated in a devastating rout of global markets, the very investors—now poorer by `7,00,000 crore—wondered how much worse it would become. But the bloodbath was not an isolated incident. The global sell-off did not just include equities, but currencies and commodities as well. The BSE Sensex plunged 5.9 percent on August 24 (1,625 points), making it the largest single-day decline since January 7, 2009. The Sensex had gone on to shed 64 percent in just nine months during that period, and many stocks lost over 90 percent of their value.

MARKET MAYHEM At BSE, out of 2,835 companies that traded on August 24, 2,477 declined, while only 303 managed to stay afloat. In this turmoil, the Indian rupee also fell to its lowest in two years at 66.74 to a dollar. A look at the sectorwise indices showed how widespread the losses were. All 12 sub-indices of the BSE closed deep in the red. Banking, auto, healthcare and capital goods particularly got a hammering. For quite some time now, markets have largely reflected an interesting global economic picture, with most (India’s included) remaining within a relatively narrow, sideways range before this crash. So it was expected that Indian markets would be impacted along with those in other parts of the world. Hemen Kapadia, a Mumbai-based market analyst, said the only markets to decline sharply for quite some time, say six months, were those exporting oil and other commodities, including Australia, Canada, Brazil, Norway and the Middle East. So where does India stand post the catastrophe? Assurances from finance minister

TAKING STOCK (Facing page) Worried onlookers at the BSE

The Indian markets are in a downtrend, with the Sensex’s closing high, dating back to January 29, 2015, at 29,682. There is no immediate positive trigger for stocks either. Arun Jaitley and Reserve Bank of India governor Raghuram Rajan notwithstanding, Kapadia said the only negative news for India was a lowering of its growth forecast for 2015 from 7.5 percent to 7 percent by the rating agency, Moody’s. But that did not impact the markets, nor did it contribute significantly to the crash. But still, experts claim it would be wrong to think Indian markets are insulated from world financial downturns. Globally, the year saw mixed economic signals, with Washington recording a modest growth, and Europe perking up before events in Greece dominated headlines. The biggest concern had been the persistent decline in oil and other commodity prices, as they could be suggesting a fall in demand rather than an increase in supply. CALM GOVERNOR At a seminar in Delhi, Rajan argued this very point, saying India’s impact would be less, rather lesser. By saying so, he tried to calm the currency market vis-à-vis the rupee. “I'll say that relative to other countries, India is in a good position with strengthening growth, a low current account deficit and narrowing fiscal deficit, moderating inflation, low shortterm foreign currency liabilities and sizeable exchange reserves,” said Rajan. Rajan said the global equilibrium was disrupted by China, whose stock market unexpectedly went into a bubble at the beginning of the year. The bubble eventually burst in June, setting off a chain of events that many experts claim was the most likely cause of the global mayhem. Rajan was joined by Jaitley who said the factors responsible for the markets were entirely external and there wasn’t a single domestic factor. “The turbulence is transient and temporary in nature, the markets will settle down once the turbulence is over.” Both were clear that it was China that

Photos: UNI

September 15, 2015

INDIA LEGAL September 15, 2015

GLOBALTRENDS/ China/ India Impact

â&#x20AC;&#x153;Relative to other countries, India is in a good position with strengthening growth, a low current account deficit and narrowing fiscal deficit, moderating inflation... and sizeable exchange reserves.â&#x20AC;? â&#x20AC;&#x201D;Raghuram Rajan, RBI governor triggered the crisis. Initially, Beijing took dramatic measures to curb the decline, and appeared to have succeeded at first. Then suddenly, experts say, the Chinese government devalued the yuan. The decision was ostensibly to pave the path for the inclusion of yuan in the SDR basket of the International Monetary Fund. Beijing was clear about its demand. It wanted yuan to be eventually a market-driven currency. After all, the Chinese economy badly needed a boost for its fledgling exports. CHAIN REACTION But there was a chain impact. Inevitably, other emerging markets following Chinaâ&#x20AC;&#x201D; including Indiaâ&#x20AC;&#x2122;sâ&#x20AC;&#x201D;brought their currencies down too. The fall in currencies triggered off a decline in most stock markets and the subsequent disequilibrium led to the global rout. â&#x20AC;&#x153;International investors are pulling-back funds from emerging markets like China, causing a slowdown, impacting US and European-based companies," Anand James, co-head, technical research, Geojit BNP Paribas, said in a telephonic interview. So what happens now? The future is quite

September 15, 2015

uncertain and much will depend on whether economies across the world continue to recover or whether the current turmoil in currencies and commodities would eventually translate into further downturns. India is not immune to global downturns, as was made painfully evident in 2008-09. Mandarins of the finance ministry would urgently need to accelerate the pace of reforms if the stock market is to stabilize without further damage. The Indian markets are in a downtrend now, with the Sensexâ&#x20AC;&#x2122;s closing high, dating back to January 29, 2015, at 29,682. And if Moodyâ&#x20AC;&#x2122;s forecast for Indiaâ&#x20AC;&#x2122;s growth turns out to be accurate, there is no immediate positive trigger for stocks either. No one would hazard a guess as to what would be the extent of decline; much will depend on global economic growth and Indian economic reforms. But there are some who still have hope. BETTER POSITION Still, analysts believe Indian markets could be hurt less given its sturdier economic fundamentals, including a narrow current account deficit and New Delhiâ&#x20AC;&#x2122;s commitment to maintain tight discipline over its finances. â&#x20AC;&#x153;We are facing a global market meltdown but the economic parameters would remain relatively stronger for India,â&#x20AC;? Deven Choksey, managing director at KR Choksey Securities, said in a telephonic interview. â&#x20AC;&#x153;The Indian economy is integrated with the rest of the world, it will benefit from growing markets but will also import global economic troubles,â&#x20AC;? he added. Will India be at risk if global conditions worsen? There have been four instances in the past three-and-a-half decades when New Delhi has grown more slowly than the overall global economy: 1984, 1991, 1997 and 2000. Like South Korea did it in the 70s, India has been able to manage its economic momentum even when the rest of world is in slowdown mode. But then, a lotâ&#x20AC;&#x201D;claim expertsâ&#x20AC;&#x201D;depends on performance of the monsoon or domestic policy responses. As the ebullient Niranjan Rajadhyaksa wrote in the Mint: â&#x20AC;&#x153;Past experience shows us it is tough, but not impossible.â&#x20AC;? IL

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CRIME/ Surveillance Tools/ United States

In Disuse, FBI’s Database on Rapists For roughly 30 years the FBI has virtually ignored a system meant to help cops track the behavioral patterns of violent criminals by T Christian Miller

ore than 30 years ago, the Federal Bureau of Investigation launched a revolutionary computer system in a bomb shelter two floors beneath the cafeteria of its national academy. Dubbed the Violent Criminal Apprehension Program, or ViCAP, it was a database designed to help catch the nation’s most violent offenders by linking together unsolved crimes. A serial rapist wielding a favorite knife in one attack might be identified when he used the same knife elsewhere. The system was rooted in the belief that some criminals’ methods were unique enough to serve as a kind of behavioral DNA—allowing identification based on how a person acted, rather than their genetic make-up. Equally important was the idea that local law enforcement agencies needed a way to better communicate with each other. Savvy killers had attacked in different jurisdictions to exploit gaping holes in police cooperation. ViCAP’s “implementation could mean the prevention of countless murders and the prompt apprehension of violent criminals,” the late Senator Arlen Specter wrote in a letter to the Justice Department endorsing the program’s creation.

September 15, 2015

COMMON PATTERN Low Adam Lorey Lane was among the few criminals nabbed due to the ViCAP system

n the years since ViCAP was first conceived, data-mining has grown vastly more sophisticated, and computing power has become cheaper and more readily available. Corporations can link the food you purchase, the clothes you buy, and the websites you browse. The FBI can parse your emails, cellphone records and airline itineraries. In a world where everything is measured, data is ubiquitous— from the number of pieces of candy that a Marine hands out on patrol in Kandahar, to your heart rate as you walk up the stairs at work. That’s what’s striking about ViCAP today: the paucity of information it contains. Only about 1,400 police agencies in the US, out of roughly 18,000, participate in the system. The database receives reports from far less than 1 percent of the violent crimes committed annually. It’s not even clear how many crimes the database has helped solve. The FBI does not release any figures. A review in the 1990s found it had linked only 33 crimes in 12 years. Canadian authorities built on the original ViCAP framework to develop a modern and sophisticated system capable of identifying patterns and linking crimes. It has proven particularly successful at analyzing sexualassault cases. But three decades and an estimated $30 million later, the FBI’s system remains stuck in the past, the John Henry of data mining. ViCAP was supposed to revolutionize American law enforcement. That revolution never came. Few law enforcement officials dispute the potential of a system like ViCAP to help solve crimes. But the FBI has never delivered on its promise. In an agency with an $8.2 billion yearly budget, ViCAP receives around $800,000 a year to keep the system going. The ViCAP program has a staff of 12. Travel and training have been cut back in recent years. Last year, the program provided analytical assistance to

local cops just 220 times. As a result, the program has done little to close the gap that prompted Congress to create it. Police agencies still don’t talk to each other on many occasions. Killers and rapists continue to escape arrest by exploiting that weakness. “The need is vital,” said Ritchie Martinez, the former president of the International Association of Law Enforcement Intelligence Analysts. “But ViCAP is not filling it.” Local cops say the system is confusing and cumbersome. Entering a single case into the database can take an hour and hits—where an unsolved crime is

To get information into the database, local cops and deputies had to fill out by hand a form with 189 questions. Only a few hundred cases a year were being entered. connected to a prior incident—are rare. False positives are common. Many also said the FBI does little to teach cops how to use the system. Training has dropped from a high of about 5,500 officers in 2012 to 1,200 last year. “We don’t really use ViCAP,” said Jeff Jensen, a criminal analyst for the Phoenix Police Department with 15 years of experience. “It really is quite a chore.” The FBI has contributed to the confusion by misrepresenting the system. On its website, the FBI says cases in its database are “continually compared” for matches as new cases are entered. But in an interview, program officials said that does not happen. “We have

plans for that in the future,” said Nathan Graham, a crime analyst for the program. The agency said it would update the information on its website.

he agency’s indifference to the database is particularly noteworthy at a time when emerging research suggests that such a tool could be especially useful in rape investigations. For years, politicians and women’s advocates have focused on testing the DNA evidence in rape kits, which are administered to sexual assault victims after an attack. Such evidence can be compared against a nationwide database of DNA samples to find possible suspects. Backlogs at police departments across the country have left tens of thousands of kits untested. But DNA is collected in only about half of rape cases, according to recent studies. A nationwide clearinghouse of the unique behaviors, methods, or marks of rapists could help solve those cases lacking genetic evidence, criminal experts said. Other research has shown that rapists are far more likely than killers to be serial offenders. Different studies have found that between one-fourth to two-thirds of rapists have committed multiple sexual assaults. Only about 1 percent of murderers are considered serial killers. Studies have questioned the assumptions behind behavioral analysis tools like ViCAP. Violent criminals don’t always commit attacks the same way and different analysts can have remarkably different interpretations on whether crimes are linked. And a system that looks for criminal suspects on the basis of how a person acts is bound to raise alarms about Orwellian overreach. But many cops say any help is welcome in the difficult task of solving crimes like rape. A recent investigation by ProPublica and The New Orleans Advocate found that police in four states repeatedly missed INDIA LEGAL September 15, 2015

CRIME/ Surveillance Tools/ United States

chances to arrest the former NFL football star and convicted serial rapist Darren Sharper after failing to contact each other. “We’re always looking for tools,” said Joanne Archambault, the director of End Violence Against Women International, one of the leading police training organizations for the investigation of sexual assaults. “I just don’t think ViCAP was ever promoted enough as being one of them.”

he US need only look north for an example of how such a system can play an important role in solving crimes. Not long after ViCAP was developed in the United States, Canadian law enforcement officials used it as a model to build their own tool, known as the Violent Criminal Linkage Analysis System, or ViCLAS. Today, the Royal Canadian Mounted Police maintains a database containing more than 5,00,000 criminal case profiles. The agency credits it with linking together some 7,000 unsolved crimes since 1995—though not all of those linkages resulted in an arrest. If the FBI collected information as consistently as the Mounties, its database would contain more than 4.4 million cases, based on the greater U.S. population. Instead, the FBI has about 89,000 cases on file. Over the years, Canada has poured funding and staff into its program, resulting in a powerful analytical tool, said Sgt Tony Lawlor, a senior ViCLAS analyst. One critical difference: in the US, reporting to the system is largely voluntary. In Canada, legislators have made it mandatory. Cops on the street still grumble about the system, which resembles the American version in the time and effort to complete. But “it has information which assists police officers, which is catching bad guys,” Lawlor said. “When police realize there’s a value associated with it, they use it.” The ViCAP program eventually

September 15, 2015

emerged from the fallout shelter where it began. It set up shop in an unmarked two-story brick office building in a Virginia business park surrounded by a printer’s shop, a dental practice and a Baptist church. In a lengthy interview there, program officials offered a PowerPoint presentation with case studies of three serial killers who were captured in the past eight years with the help of the ViCAP program. They called the system “successful.” “We do as good a job as we possibly

Violent criminals don’t always attack the same way. A system that looks for criminal suspects on the basis of how a person acts is bound to raise alarms about Orwellian overreach. can given our resources and limitations,” said Timothy Burke, a whitehaired, 29-year agency veteran who is the program manager for ViCAP. “As with anything, we could always do better.”

ierce Brooks was the father of the system. A legendary cop, he had a square jaw, high forehead and dead serious eyes. During 20 years with the Los Angeles Police Department, he helped send 10 men to death row. He inspired the fictional Sgt Joe Friday character in Dragnet. And he became famous for tracking down a pair of cop killers, a hunt chronicled in Joseph Wambaugh’s 1973 non-fiction bestseller, The Onion Field.

“Brooks’ imagination was admired, but his thoroughness was legend,” Wambaugh wrote. In the late 1950s, Brooks was investigating two murder cases. In each, a female model had been raped, slain and then trussed in rope in a manner that suggested skill with binding. Brooks intuited that the killer might commit other murders. For the next year, he leafed through out-of-town newspapers at a local library. When he read a story about a man arrested while trying to use rope to kidnap a woman, Brooks put the cases together. The man, Harvey Glatman, was sentenced to death, and executed a year later. The experience convinced Brooks that serial killers often had “signatures”—distinct ways of acting that could help identify them much like a fingerprint. An early adopter of datadriven policing, Brooks realized that a computer database could be populated with details of unsolved murder cases from across the country, then searched for behavioral matches. After Brooks spent years lobbying for such a system, Congress took interest. In July 1983, Brooks told a rapt Senate Judiciary Committee audience about serial killer Ted Bundy, who confessed to killing 30 women in seven states. The ViCAP system could have prevented many of those deaths, he said. “ViCAP, when implemented, would preclude the age-old, but still continuing problem of critically important information being missed, overlooked, or delayed when several police agencies, hundreds or even thousands of miles apart, are involved,” Brooks said in a written statement. By the end of the hearing, Brooks had a letter from the committee requesting $1 million for the program. Although the program was endorsed by then-FBI director William Webster, agency managers weren’t particularly thrilled with the new idea. The FBI grafted ViCAP into a new operation—the Behavioral Analysis

CRIME TRAIL IN CANADA Daryn Johnsrude was killed at the age of 16 by serial killer Clifford Olson in 1981. The killer was nabbed thanks to Canada’s effective ViCLAS program

Unit. The profilers, as they were known, were later made famous by Thomas Harris’ The Silence of the Lambs as brainy crime fighters who combined street smarts and psychology to nab the worst criminals. But at the time, the unproven unit was seen as a kind of skunk works. The FBI housed it in the former fallout shelter—“ten times deeper than dead people” as one agent later recalled. It was a warren of rooms, dark and dank. Others referred to the oddball collection of psychologists, cops and administrators as “rejects of the FBI” or the “leper colony,” according to Into the Minds of Madmen, a non-fiction account of the unit. Still, the new program captured the imagination of some. Murder mystery author Michael Newton penned a series of novels which, while not quite bestsellers, featured the heroic exploits of two ViCAP

agents “accustomed to the grisly face of death and grueling hours on a job that has no end.”

rooks was the first manager for the ViCAP program. The agency purchased what was then the “Cadillac” of computers—a VAX 11/785 nicknamed the “Superstar.” It filled up much of the room in the basement headquarters and had 512KB of memory. (An average household computer today has about 4,000 times more memory.) Brooks was “ecstatic” when the system finally came online on May 29, 1985, according to the account. His enthusiasm was not to last. To get information into the database, local cops and deputies had to fill out by hand a form with 189 questions. The booklet was then sent to Quantico, where analysts hand-coded the infor-

mation into the computer. It was a laborious process that flummoxed even Brooks. He had a hard time filling out the booklet, according to one account—as did officers in the field. Only a few hundred cases a year were being entered. Enter Patricia Cornwell, the bestselling crime author, famous for her novels featuring Dr Kay Scarpetta, medical examiner. In the early 1990s, she visited the subterranean unit during a tour of the academy. She recalled being distinctly unimpressed. An analyst told her that ViCAP didn’t contain much information. The police weren’t sending in many cases. “I remember walking into a room at the FBI and there was one PC on a desk,” said Cornwell, who had once worked as a computer analyst. “That was ViCAP.” A senior FBI official had told Cornwell that the academy, of INDIA LEGAL September 15, 2015

CRIME/ Surveillance Tools/ United States

which ViCAP was a small part, was in a financial crunch. She contacted Utah Senator Orrin Hatch, a friend, and told him of the academy’s troubles. In 1993, Hatch shepherded a measure through Congress to put more money into the academy—and ViCAP. As the money made its way to the bomb shelter, the FBI conducted a “business review.” It found that local cops were sending the agency only 3 to 7 percent of homicides nationwide. The miniscule staff— about 10 people—could not even handle that load, and was not entering the cases on a timely basis. Cops on the street saw the system as a “black hole,” according to Cold Case Homicide, a criminal investigation handbook. The FBI decided to kill the program. They picked Art Meister to be the hit man. Meister spent much of his career at the FBI busting organized crime, beginning at the New Jersey field office. He rose through the ranks to supervise a national squad of more than 30 agents, investigating mob activities at home and overseas. He had no real experience with behavioral analysis or databases. But he did have an analytical approach that his superiors admired. They gave him instructions: “If it doesn’t work, do away with it. Kill it,” recalled Meister, now a security consultant with the Halle Barry Group. Meister heard plenty of complaints. At one conference of police officers from across the country, a cop pulled Meister aside to talk about the program. “I’ve used it and all it gives me is bullshit leads,” the officer told him. “The general perception was by and large that the program didn’t work,”

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EULOGIZED IN FICTION Novels by Michael Newton on the exploits of two ViCAP agents

Meister said. But instead of killing ViCAP, Meister became the system’s unlikely champion. Even with its small staff, the program was connecting far-flung lawenforcement agencies. The 189 questions had been slimmed to 95—making it easier to fill out the form. Meister used the new funding from Hatch’s bill to reach out to 10 large jurisdictions to persuade them to install terminals that could connect with the database. By 1997, the system was receiving 1,500 or so cases per year—a record, though still a fraction of the violent crimes committed. Meister saw the potential for the database to help solve sexual-assault

crimes. He pushed the development of new questions specifically for sexual-assault cases. They weren’t added to the system until after his departure in 2001. “I felt it would really pay off dividends,” Meister said. “There are a lot more serial rapists than serial killers.” But he found it difficult to make headway. Top officials showed no real interest in the program. After all, it was designed to help local law enforcement, not the agency. Meister called ViCAP “the furthest planet from the sun”—the last in line to get funds from the FBI. His efforts to improve it “were met with skepticism and bureaucratic politics. That’s what drove me nuts,” he said. By the time he left, the program was muddling along. “ViCAP never got the support that it needs and deserves.” Meister said. “It’s unfortunate.”

n July 13, 2007, at 4 in the morning, a 15-year-old girl was sleeping in her bedroom in Chelmsford, a former factory town in northeastern Massachusetts bisected by Interstate 495. She was startled awake when a man dressed in black with a ninja mask pressed his hand against her face. He placed a knife to her throat and told her “If you make any noise, I’ll fucking kill you.” The girl screamed, rousing her mother and father. The parents rushed in, fighting with the man until they subdued him. Adam Leroy Lane, a

truck driver from North Carolina, was arrested. In his truck, Massachusetts police found knives, cord and a DVD of Hunting Humans, a 2002 horror film. Analysts for ViCAP, which has a special initiative to track killings along the nation’s highways, determined that the Massachusetts attack was similar to an earlier murder that had been committed in New Jersey. Acting on the tip, New Jersey state police detectives interviewed Lane in his jail cell. Lane confessed to killing Monica Massaro, a 38-year-old woman, in her home in the town of Bloomsbury—just a few blocks off Interstate 78. Lane, dubbed the Highway Killer, was connected via DNA samples to a killing and a violent attack in Pennsylvania; both women lived near interstates. Lane is now serving a life sentence in Pennsylvania. New Jersey State Police Detective Geoff Noble said his case had been stalled. But once ViCAP connected Noble to Massachusetts police officers, they provided him a receipt that placed Lane at the truck stop in the small town where Massaro was killed. And when Noble confronted Lane, the killer started talking. Under a state attorney general’s directive, all New Jersey law enforcement agencies are supposed to report serial crimes to ViCAP. “The information provided by ViCAP was absolutely critical,” Noble said. “Without ViCAP, that case may have not ever been solved.” FBI officials said the case, one of three success stories provided to ProPublica, showed the critical role of the database. (The other two: The case of Israel Keyes, a murderer who committed suicide after his arrest in Alaska in 2012 and has been linked to 11 killings; and that of Bruce Mendenhall, a trucker now serving a life sentence in Tennessee who was linked to the murder of four women in 2007.) “Given what we have, it’s a very successful program,” Burke said.

But in a dozen interviews with current and former police investigators and analysts across the country, most said they had not heard of ViCAP, or had seen little benefit from using it. Among sex-crimes detectives, none reported having been rewarded with a result from the system. “I’m not sending stuff off to ViCAP because I don’t even know what that is,” said Sgt Peter Mahuna of the Portland, Oregon, Police Department. “I have never used ViCAP,” said Sgt. Elizabeth Donegan of Austin, Texas. “We’re not trained on it. I don’t know what it entails of whether it would be useful for us.”

In the US, reporting to the system is largely voluntary. In Canada, legislators have made it mandatory. All Canadian law enforcement agencies now file reports to the system. Even Joanne Archambault, the director of the police training organization who sees the potential of ViCAP, didn’t use it when she ran the sex-crimes unit at the San Diego Police Department: “In all the years I worked these crimes, we never submitted information to ViCAP,” she said. “As a sex-crime supervisor, we invested time in effort that had a payout.” Local authorities’ skepticism is reflected in the FBI’s statistics. In 2013, police submitted 240 cases involving sexual assault to the system. The FBI recorded 79,770 forcible rapes that

year. Local agencies entered information on 232 homicides. The FBI recorded 14,196 murders. “It's disappointing and embarrassing,” said Greg Cooper, a retired FBI agent who directed the ViCAP unit before becoming the police chief in Provo, Utah. “The FBI has not adequately marketed the program and its services. And local law enforcement has not been committed to participating.” Not all rapes or murders involved serial offenders, of course. But with ViCAP receiving information on only about 0.5 percent of such violent crimes, it struggles to identify those that do. “Cops don’t want to do more paperwork,” said Jim Markey, a former Phoenix police detective and now a security consultant. “Anytime you ask for voluntary compliance, it won’t be a priority. It’s not going to happen.”

ut at some agencies where ViCAP has been incorporated into policing, commanders have become staunch defenders of its utility. Major JR Burton, the commander of special investigations for the Hillsborough County Sheriff ’s Office in Tampa, Florida, said detectives at his agency are mandated to enter information on violent crimes into the database. “I love ViCAP,” said Burton, who served on a board of local law enforcement officials that advises the FBI on the system. “There’s many cases where you don’t have DNA. How do you link them together?” Burton said he understood the frustration that other police experience when they get no results back from the system. When pressed, Burton could not cite any investigations in his jurisdiction that had benefitted from the database. But he said the time and effort to use the system was worth it. “It allows you to communicate across the nation, whether serial homicide or serial rapist,” Burton said. “That’s awesome in my book.” INDIA LEGAL September 15, 2015

CRIME/ Surveillance Tools/ United States

SUPPORT AMONG LAWMAKERS (L-R) Two senators who felt that a database like ViCAP was needed were Orrih Hatch of Utah and Arlen Scepter of Pennsylvania

FBI officials said they had taken steps to address complaints. In July 2008, the program made the database accessible via the Web. Police can now enter their own searches, without having to rely on an FBI analyst, through any computer with an Internet connection. The program has also whittled down the number of questions. Graham says he tells police that it should take only about 30 minutes to enter the details of a case. “I tell them if they can fill out their taxes, they can fill out the ViCAP form,” Graham said.

n November 1980, children began vanishing across Canada. Christine Weller, 12, was found dead by a river in British Columbia. A year later, Daryn Johnsrude, 16, was found bludgeoned to death. In July 1981, six children were killed in a month, ages six to 18. They were found strangled and beaten to death. The killer: Clifford Olson, a career criminal, who eluded capture in part because the different jurisdictions where he committed his crimes had never communicated. The murders prompted Canadian police officials to create a system to track and identify serial killers. After an initial effort failed, the Royal Canadian Mounted Police sent investigators to study the ViCAP program. They returned troubled by some aspects. The FBI system was not being used by many police agencies. Nor did it track sexual assaults. The

September 15, 2015

The FBI found that local cops were sending the agency only 3 to 7 percent of homicides nationwide. The miniscule staff could not even handle that load.... Mounties decided to improve on the US system by developing their own behavioral crime analysis tool— ViCLAS. The ViCLAS system has three advantages over its American cousin: people, money and a legal mandate. More than a hundred officers and analysts work for the system, spread across the country. It’s funded at a reported cost of $14 million to $15 million per year. The most important development was that over the years, local legislative bodies passed laws making entry mandatory. All Canadian law enforcement agencies now file reports to the system. The agency also greatly expanded the list of crimes that can be entered. Any crime that is “behaviorally rich”— usually an incident involving a criminal and a victim—can be entered into the database. It also created stringent

INTERNATIONAL BRIEFS

quality control. A Canadian analyst who uncovers a link between crimes must submit the findings to a panel for review. Only then can the case be released to local agencies—reducing the chances for bad leads. Today, Canada’s system has been repeatedly endorsed by senior police officials as an important tool in tracking down killers and rapists. The agency routinely publishes news-letters filled with stories about crimes that the system helped to solve. One study called ViCLAS the “gold standard” of such systems worldwide. The Mounties now license ViCLAS for an annual fee to police forces in Belgium, the Czech Republic, France, Germany, Ireland, the Netherlands, New Zealand, Switzerland and the United Kingdom. The volume of information submitted has made all the difference, Lawlor said. The system works when enough agencies enter cases to generate results. But agencies are reluctant to enter cases until they see results. “It’s a catch–22 situation,” Lawlor said. “If nothing goes in, then nothing can go out.” When Burke, ViCAP’s program manager, speaks at national law enforcement conferences, he asks how many people in the audience have heard of his program. Typically only about one-half to two-thirds of the hands go up. A smaller percentage say they actually use it. “We don’t have a club to force them to sign up with us,” Burke said. The program’s main goal now is to ensure that the 100 largest police agencies in the country are enrolled. About 80 are. The agency continues to slowly develop its software. Training occurs monthly to encourage more participation. The FBI doesn’t see the need for major changes to ViCAP, Burke explained. “It’s still supportive,” Burke said. “It’s still viable.” IL —Courtesy ProPublica

British activist faces defamation charge A THAI court has charged British labor rights activist, Andy Hall, with criminal defamation. A research by him alleging severe labor abuses in Thailand's Natural Fruit Company, a key supplier to European markets, got him into a legal tangle. Natural Fruit has filed four cases against Hall following the publication of the report titled “Cheap Has a High Price”,

Graft charges filed

UN tribunal stalls case

CORRUPTION CHARGES have been filed by Brazil's attorney-general against Brazil’s speaker in the lower house of congress, Eduardo Cunha, and former president, Fernando Collor de Mello. The case centers on the duo’s involvement in a 10-year-old billion-dollar scheme involving the state-run oil company Petrobras. Both have denied wrong-doing, and Cunha posted on social media that he had no intention of resigning from office. He denounced the charges as being politically motivated, according to a report in The Guardian. The case will proceed before the federal supreme court. Under Brazilian law, charges against federal congressmen and other top government officials can only be filed and judged by the supreme court, and it takes years for the judgment to be passed.

A UN tribunal on August 24 asked India and Italy to suspend all court proceedings involving two Italian marines, charged with killing two Indian fishermen in 2012. It asked both the countries to report on the case by September 24. The 21-member International Tribunal for the Law of the Sea (ITLOS), located in Hamburg, Germany, delivered a split verdict of 15 in favor and 6 against. Italy took the case to ITLOS as it was not happy with the trial of its marines. Italy claims the incident occurred on international waters, so India does not have the jurisdiction to try Italian marines. ITLOS is an independent judicial body established by the

Brazil’s ex-president Fernando Collor de Mello

Egypt’s anti-terrorism law

PRESIDENT ABDEL Fattah Al Sisi of Egypt has approved an anti-terrorism law that gives the state sweeping powers to penalize journalists for contradicting official accounts of militant attacks. The law gives security officers sweeping immunity from prosecution and expands the surveillance powers of the government. Under the law, trials for suspected militants will be fast-tracked through special courts and anyone found guilty of joining a militant group could face 10 years in prison. Authorities claim the measures will halt attacks by Islamic militants but legal experts argue that the new law will muzzle voices that are critical of Al Sisi’s authoritarian rule.

published by the Finnish civil rights group Finnwatch, in 2013. Natural Fruit is asking for damages of around 7 million pounds. Interestingly, Hall was acquitted by a court last year on another defamation charge relating to an interview with Al-Jazeera network, wherein he spoke about labour abuses.

United Nations Convention on Law of the Sea to adjudicate disputes arising out of the interpretation and application of the convention.

Martial law in Venezuela EMERGENCY HAS been declared along parts of Venezuela’s border with Colombia after clashes between smugglers and soldiers. Venezuela President Nicolas Maduro has imposed martial law in the border areas, according to The Independent. He announced 60 days of martial law in five municipalities in the north-western state of Tachira. Venezuela's price controls and subsidies on gasoline and food have led to rampant smuggling. People are taking advantage of Venezuela's low prices to sell goods at higher prices across the border. There has also been a recent introduction of a fingerprint scanning system to restrict the menace.

INDIA LEGAL September 15, 2015

CAMPUS UPDATE

NATIONAL LAW School of India University (NLSIU), Bengaluru, in collaboration with Karnataka State Law University, Hubli, is organizing a one-day seminar to mark the completion of a decade of the Right to Information Act, which came into force on October 12, 2005. Even though it continues to face challenges, the RTI Act has indisputably provided the institutional mechanism for accountability. The seminar “Good Governance-The RTI Way”, will be held on October 12 at Krishnappa Memorial Hall, NLSIU, Bengaluru.

Guidelines on incest cases NATIONAL LAW University, Delhi, in association with Counsel to Secure Justice (CSJ) and HAQ: Centre for Child Rights, is holding a national-level dialogue to formulate guidelines for incest cases. The dialogue aims to bring together all stakeholders who handle incest and child abuse cases. They will not only prepare guidelines but also deliberate on how these should be implemented. This dialogue will be held on September 3, 2015, at NLU, Delhi.

Event on military law and justice GUJARAT NATIONAL Law University (GNLU) became the first Indian law varsity to conduct a program on “Military Law and Justice”. The seven-day program, the first session of which was conducted in August, focused on Indian military laws, constitution and the armed forces, the court-martial system, and comparative practices of the military judicial system in the UK and the US. It was inaugurated by retired Lieutenant-General DB Shekhatkar. The participants included officers from the army, navy, air force, Indo-Tibetan Border Bolice and Border Security Force. Apart from them, post-graduate and under-graduate students of GNLU also participated.

Child rights and law A ONE-DAY training program on child rights will be organized by Rajiv Gandhi National University of Law, Punjab, in association with National Human Rights Commission, on October 17. A wide range of laws guarantee children their rights and entitlements as provided in the constitution and in the UN Convention of the Rights of the Child. The training program aims to provide a useful platform to students, research scholars, academicians, advocates, policy makers, child rights activists and others to understand the challenges in protecting the rights of children.

September 15, 2015

1. Boffo. A: Bluff master B: Very successful C: Failure D: Duffer 2. Correct spelling? A: Belwether B: Bellweather C: Belweather D. Bellwether 3. Yellow peril. A: Threat to US from Asians B: Jaundice C: Cowardice D: Diarrhoea 4. One usage is wrong. A: An army of dogs B: A herd of giraffes C: A brood of chickens D: A murder of crows 5. A cognoscente. A: A well-read person B: An old-fashioned man C: A connoisseur D: A foreigner 6. Paget’s disease. A: Cosmetic affliction B: Kidney ailment C: Bone disorder D: Vitamin deficiency 7. Vicereine. A: Vamp B: Female viceroy C: Vice-chancellor’s wife D: Sorceress

Have fun with English. Get the right answers. Play better scrabble. By Mahesh Trivedi

8. Part and parcel, ways and means but might and …. A: mane B: main C: right D: fight 9. Annus horribilis. A: African hornbill B: Annual auditing C: Yearly gathering D: Awful year 10. IMTNG. A: I am (ready) tonight B: I am in a meeting C: I am tomboy naughty girl D: I am the next generation 11. King Charles’s head. A: Huge ransom B: Dandruff C: Arrogant man D: Obsession 12. Ball-park figure. A: Zero B: Hour-glass figure C: Wax figure D: Rough estimate 13. To shoot the breeze. A: To chat B: To fart C: To severely criticize D: To score zero 14. Zonked out.

A: Asleep B: Dead C: Exhausted D: Failed 15. Bodacious. A: Sensuous B: Impressive C: Burly D: Boastful 16. Melomania. A: Craze for flowers B: Craze for music C: Craze for gossiping D: Craze for words 17. One who makes maps. A: Graphologist B: Illustrator C: Cartographer D: Visualiser 18. Yard bird. A. Prisoner B. Eagle C. Early riser D. Corpse 19. Irish confetti. A: Bricks B: Flowers C: Cologne water D: Cheer leaders 20. Doxy. A: Prostitute B: Fluffy dog C: Youngest daughter D: File for documents

ANSWERS

1. Very successful 2. Bellwether 3. Threat to US from Asians 4. An army of dogs 5. A connoisseur 6. Bone disorder 7. Female viceroy 8. main 9. Awful year 10. I am in a meeting 11. Obsession 12. Rough estimate 13. To chat 14. Asleep 15. Impressive 16. Craze for music 17. Cartographer 18. Prisoner 19. Bricks 20. Prostitute

Seminar on RTI

Y L D R O W ISE

SCORES

0 to 7 correct—You need to do this more often. 8 to 12 correct—Good, get the scrabble board out. Above 12—Bravo! Keep it up! textdoctor2@gmail.com

INDIA LEGAL September 15, 2015

PEOPLE / Aqua Magic

MAKING A SPLASH A girl cools off in the waters of the Ganges during a hot summer morning in Allahabad.

COOL HALO A man bathes at a tubewell in Amritsar.

DROPLETS OF DELIGHT A boy enjoys under a water fountain at a park in Tokyo.

MOUTH WATERING A girl plays with water from a fountain at Gorky park in Moscow, Russia.

GOTCHA! Women run as men throw water at them as part of traditional Easter celebrations in Szenna, Hungary. â&#x20AC;&#x201D; Compiled by Kh Manglembi Devi Photos: UNI

September 15, 2015

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