India legal, July 31, 2014 by India Legal

ic no Pr

NDIA EGAL I L Sonia-Rahul and the National Herald scam

Ramesh Menon’s account of Modi’s war room

ati 50 t i v In `

www.indialegalonline.com

JULY 31, 2014

`100

STORIES THAT COUNT

JAITLEY’S GUJARATI THALI

RNI No. UPENG/2007/25763

BUT WHERE’S THE MAIN DISH? Budget 2014 is a smorgasbord of snacks—small feel-good sops—rather than the much awaited feast of radical measures for national economic reconstruction EXCLUSIVE

cror t 0 0 1 ` sas uplif e

`7sm0arcrtorcie ty

per

mad

`10t s0tartups dali

ka el crore fa re

THE LAW

mi 00 r

tri

Harrowing saga of 10 stranded Indians on an oil tanker off Sharjah

e cror

l Executive-judiciary

cro

igr

y le oun pr ade g In cror og rsh di e ra ip a m

SWEETHEART DEALS

HOW SUGAR BARONS AND POLITICIANS CON THE PUBLIC

relations nosedive l Your birthright to adopt l Stopping Uncle Sam’s snooping on the world

PROBE

Diamond merchants’ `1,300 crore bank heist

ce n Pri atio 0 Invit `5

INDIA L EGAL NESS’ MESS

www.indialegalonline.com ` 100

July 15, 2014

STORIES THAT COUNT

FOREIGN POLICY

SEAWARD

NOW AT YOUR

HO! The Indian Ocean dictates a new strategic doctrine China looks afresh at India z Musharraf exclusive: Advani derailed agreement on LoC

RNI No. UPENG/2007/25763

KERALA’S DESPERATE HOUSEWIVES GOPAL SUBRAMANIUM: POLITICS OVER MERIT? NAJMA’S MUSLIMATICS ONLINE SNOOPING, UNDER SCANNER

Raghu Rai’s Two Faces Of Fate ice n Pr atio 0 Invit `5

INDIA L EGAL Gay Rights Revisited

Death Penalty Still Hanging

Internet Censorship Off With His Face!

www.indialegalonline.com ` 100

June 30, 2014

STORIES THAT COUNT

MODI’S COWBOY

RNI No. UPENG/2007/25763

DON’T MESS WITH ME

INDIA’S NEW NSA AJIT KUMAR DOVAL 36

BADAUN: India’s Shame ice n Pr atio 0 Invit `5

INDIA L EGAL NEW G0VERNMENT: CHARGE OF THE MODI BRIGADE

` 100

June 15, 2014

STORIES THAT COUNT

Inside

Ali Baba’s Cave

([FOXVLYH DFFRXQW RI WKH RSXOHQW OLIHVW\OH DQG VHFUHW SROLWLFDO DQG FRUSRUDWH FRQQHFWLRQV RI PHDW H[SRUWHU DQG KDZDOD WUDGHU 0RLQ 4XUHVKL ZKR ZDV UDLGHG E\ ,7 DJHQF\ 14

ALSO RISING SEX ADDICTION the need to track and treat repeat offenders

US IMMIGRATION FRAUD KRZ Á\ E\ QLJKW RSHUDWRUV GXSH PLOOLRQDLUHV

DOORSTEP!

INDIA LEGAL, the nation’s first independent, glossy magazine reaches more than 200,000 readers across all the states of the union. The readers include young professionals, housewives, politicians, policymakers, businessmen, bureaucrats and, of course, all members of the legal establishment. It is the latest offering from the ENC GROUP that runs the APN TV Channel and publishes Views ON News, the fortnightly media monitor, and Akbari, a monthly Urdu journal. The magazine is edited by internationally acclaimed media personality INDERJIT BADHWAR with a team of the most experienced, independent, award-winning professionals. Credibility, quality, relevance and high production values are its hallmarks. The magazine is not a handbook or a legal digest for special interest reading. Its writing style, choice of stories appeal to a wider and sophisticated general audience of decision-makers, corporates and politicians. The thrust of INDIA LEGAL is a mix of trends, breaking stories, investigations, thought-inspiring features, fresh information, views and insight. Where INDIA LEGAL departs from the ordinary is the realization of a new angle—that a breaking story usually involves a powerful legal perspective. And this is where the magazine breaks from the crowd in order to offer a stimulating and useful reading experience. Don’t miss a single issue. Keep yourself updated with penetrating, different, information available nowhere else: consumer rights, court decisions that affect you and your family, groundbreaking exclusive investigations fortnight after fortnight.

For special subscription offers or regular deliveries at your doorstep, contact your newspaper vendor.

RNI No. UPENG/2007/25763

CONTROVERSIAL JUDICIAL APPOINTMENTS :LOO 0RGL DFFHSW *RSDO 6XEUDPDQLXP DQG 5RKLQWRQ 1DULPDQ·V HOHYDWLRQ WR Supreme Court?

Lobby of Qureshi mansion

ice n Pr atio 0 Invit `5

INDIA L EGAL ` 100

May 31, 2014

STORIES THAT COUNT

VERDICT 2014

BETTER DAYS ARE HERE AGAIN

ARE THEY? DEMISE OF VOTE BANKS? WHY MUSLIMS ARE NOT SCARED HOPE vs HYPE MODINAMA: BIOGRAPHIES AND COMICS HONEYMOON PERIOD: NO IFs AND BUTs GANGES CATCHES FIRE POLITICO-TOONS

Stunning range The moment you come across the word “legal”, it may give you cold sweat down the spine. I did not even want to open India Legal, but then curiosity got the better of me and Oh Boy! You have come out with a magazine that really impressed me with its range and quality. Congratulations and keep it up. —Ashok Patel, via email A breather for lawyers I am a Colombo-based lawyer. I find your journal fascinating because it widens a lawyer’s vision beyond the reach of law that ordinarily confines lawyers to the attraction of filthy lucre. —Gomin Dayasri, Colombo A fascinating read I read India Legal from cover to cover. It’s a terrific piece of work—a wonderful accomplishment. Congratulations. I was fascinated by your review of the “real” Abscam story. Yes, Hollywood is its own reality. It goes without saying that your publication speaks to some of the vast differences and similarities between India and China—a central theme of To The Mountaintops. —Jim I Gabbe, Co-publisher, Raconteur, New York

EXCELLENT FEEDBACK

Legal insights India legal was a pleasant surprise. I realized most of the issues surrounding us have a legal tint. —Madhu Menon, Ahmedabad

LETTER FROM THE EDITOR

INDERJIT BADHWAR

ARTICLE 370 AND ALL THAT

OW many people in India, especially the well-heeled, know what Article 370 is? Most people I talk to believe it is a special provision promulgated by anti-Indian communal Kashmiri governments to prevent outsiders (read “Hindus”) from buying land in Kashmir. Nothing could be further from the truth. The prohibition against outsiders buying land in Kashmir was introduced by the Dogra rulers, who bought the territory from the British in 1846 under the Treaty of Amritsar. And Article 370—giving special status to Jammu and Kashmir (J&K)—is a creation, creature and feature of the Indian constitution. Its abolition was first articulated by Jana Sangh’s founding father Syama Prasad Mookerjee and later championed by LK Advani and BJP ideologues in the heyday of Hindutva politicization, who projected the article as a crass example of “minority appeasement”. With the advent of Narendra Modi as prime minister, the debate has re-surfaced dramatically, after Jitendra Singh, BJP MP from Udhampur and a minister of state in the PMO, raised the issue. Chief Minister Omar Abdullah of J&K reacted vehemently: The state, he said, cannot be a part of India without Article 370. He tweeted: “So the MoS says process/discussions to revoke Article 370 have started... not sure who is talking... long after Modi government is a distant memory, either J&K won’t be part of India or Article 370 will still exist. Article 370 is the only constitutional link between J&K and rest of India... talk of revocation is not just ill-informed, it’s irresponsible.” The so-called diehard “nationalists” pounced on Abdullah’s tweet, dubbing him an anti-national and a separatist. Again, nothing could be further from the truth. This attitude reflects yet another abysmal demonstration of historical ignorance and the consequent vulnerability of falling into the communal trap. Omar and his party, the National Conference, are as Indian as apple pie is American. They are actually the custodians of, and heir to, the historical process that joined J&K to India. Even non-Kashmiris, who have cared to read the constitution and studied the somewhat tortuous journey of the once independent princely state ruled by Dogra Maharaja Hari Singh into the Union of India in 1948, are warning of the danger of serious repercussions in the state from irresponsible utterances on Article 370. CPM General Secretary Prakash Karat said: “Such talk of aboli-

July 31, 2014

tion of Article 370 will alienate people of Kashmir. This is a harmful step against the interests of the country.” He rightly noted that among the framers of the constitution, PM Jawaharlal Nehru was the most articulate advocate for the special provision. The state of J&K was one among 565 independent princely states within British India under varying degrees of suzerainty to the Crown. During the political unification and integration of India into a single administrative framework following independence and partition, these states had the option of remaining free or joining Pakistan or India through a device known as the Instrument of Accession. The initial signing of the Instrument was tantamount to an MoU between the Indian Dominion and the state, under which the government of India took over defense, communications, currency and foreign affairs. The critical part was the follow-up: the execution of a separate Instrument of Merger, through which the states surrendered most of the residual powers, which remained with them, to create the India we now know as a country.

he ruler of J&K, however, held out. Maharaja Hari Singh wanted independence, and most of his fellow Kashmiris who followed a fierce regional identity—Kashmiriyat— sympathized with him, even though in their domestic politics they favored a grassroots movement led by Sheikh Abdullah (Omar’s grandfather), the founder of the National Conference, for ending the monarchy and establishing a liberal democracy. In 1948, Pakistani raiders, backed by the military, invaded Kashmir to annex it by force, hoping that the Muslim majority population would rise in revolt on the side of the invaders and join the newlycreated Muslim state of Pakistan. The opposite happened. Hari Singh, politically supported by Abdullah (who, ironically, was in jail then for anti-monarchist activism) signed the Indian Instrument of Accession to enable Lord Mountbatten, the last Viceroy, to send the Indian army to repel the invader. The Instrument was a “temporary measure”, under which J&K surrendered defense, foreign affairs and communications. The ultimate future of the state, the agreement said, would be determined by the people of Kashmir. Indian troops steadily drove back the invaders. In January 1949, Nehru took the matter to the UN, in which the belligerents

agreed to a ceasefire, a Line of Control monitored by the UN, and various Security Council resolutions backing a plebiscite in Kashmir. Meanwhile, the Indian Constituent Assembly was busy framing the country’s constitution, and Abdullah, (who was subsequently freed from jail by the Maharaja and made martial law administrator) along with other members of his party, became part of India’s Constituent Assembly. Because the J&K issue had been internationalized through UN resolutions and various pledges given regarding the Kashmiris’ right to self determination, the Indian constitution framed Article 370 as the only window through which Indian laws could apply to Kashmir. The article clearly states that it could be modified, accepted or rejected only by Kashmir’s Constituent Assembly, which was also in session framing the state’s own constitution. In January 1957, Kashmir’s constituent assembly finally voted overwhelmingly to accept Article 370, granting it a special status within India. But unlike the case of other states, the Instrument of Accession was not converted into an Instrument of Merger. This is a key element in Delhi’s relations with Srinagar. Even though Article 370 technically “empowers” the President of India to repeal or modify Article 370, he cannot do it without the prior consent of Kashmir’s Constituent Assembly. But the Constituent Assembly wound up its work in the mid-1957 and dissolved itself! Any unilateral revocation of Article 370 by fiat or by amending the Indian constitution would internationalize the Kashmir problem, which is the last thing that India wants. Because such an act would sever the administrative, legal and constitutional umbilical cord that binds India to Kashmir. It would weaken pro-Indian secular parties in Kashmir and further strengthen the hands of separatists. It would create a historical anomaly in which, legally, Kashmir would revert to a pre Instrument of Accession status! The additional erosion of the state’s autonomy beyond the three original subjects of defense, foreign affairs and communications actually happened through political subterfuge and Machiavellian maneuvers. Even though Kashmir was admitted into the Indian union under Article 1 of the Indian constitution, Article 370 stipulates that Indian laws beyond the subjects agreed to cannot be extended to Kashmir without the consent of the Constituent Assembly while it was in session or, later, the state assembly.

land-locked people with distinctive ethnic features, their language a mixture of Persian and Sanskrit, the Kashmiris have a ferocious identity fixation, which they have defended against the Mughals, Pathans and Sikhs in the past. Given the chance, Kashmiris have a proclivity for gravitating towards independence rather than affiliation or merger, as even their Hindu king Hari Singh had wanted to do, In 1953, as Kashmir’s Constituent Assembly was in session—a year after the Sheikh and Nehru signed the Delhi Accord guaranteeing Kashmir’s autonomy—Delhi suspected that Abdullah and his party would persuade the Constituent Assembly to vote to

reject Article 370, which had already become a part of India’s constitution, subject to final approval by Kashmir’s assembly. It was this suspicion that led to the arrest of the Sheikh and his followers. The Sheikh’s absence for the prolonged periods of time during his detention, paved the way for Delhi’s subsequent political manipulation of the Kashmir Constituent Assembly as well as successive state assemblies.

ew Delhi used these opportunities to dilute Kashmir’s autonomy with the consent of pliable state governments created by the “Dilli Durbar”. Elections were either rigged or uncontested. This, rather than communalism, is at the root of Kashmiri resentment against India. As historian and senior lawyer AG Noorani wrote: “From 1953 to 1975, Chief Ministers of that State had been nominees of Delhi. Their appointment to that post was legitimized by the holding of farcical and totally rigged elections in which the Congress party led by Delhi’s nominee was elected by huge majorities.” Frontline magazine once quoted what it called “an authoritative description of a blot on our record”, written by BK Nehru, governor of Kashmir from 1981 to 1984, in his memoirs Nice Guys Finish Second; (pp. 614-5), published in 1997, and which most of us overlook. “Those who cavil at Article 370 of the Indian Constitution and the ‘special status’ of Kashmir constitutionally ought to remember the ‘special’ treatment meted out to it politically. Which other State has been subjected to such debasement and humiliation? And, why was this done? It was because New Delhi had second thoughts on Article 370. It could not be abrogated legally. It was reduced to a husk through political fraud and constitutional abuse. The current debate is much more than about restoration of Article 370 by erasing the distortions. It is about redressing a moral wrong.’” Other politicians are coming around to seeing Article 370 from this broader perspective. JD(U) leader and Bihar chief minister Jitan Ram Manjhi criticized the Modi government for raking up the issue, saying it would have an adverse impact on the country. Mayawati has alleged that the controversy was generated only to create polarization. To his credit, however, Prime Minister Modi has not been shrill on the issue. He has preferred to use words like “debate” and “discussion.” He is a pragmatist who believes that the language of competitive elections is different from the language to be used when exercising power and governing. Modi’s ally, Punjab Chief Minister Parkash Singh Badal has hinted that wiser counsel will prevail. He called Modi “an experienced and visionary leader, who will take a call on such issues only after due consultation with the entire political leadership.” Finally, there’s nothing unconstitutional about giving Kashmir special status under Article 370. Article 2 of the constitution states with unflinching clarity: “Parliament may admit into the union, or establish, new states on such terms and conditions as it thinks fit.”

editor@indialegalonline.com INDIA LEGAL July 31, 2014

JULY 31, 2014

VOLUME. VII

ISSUE. 22

Editor-in-Chief Inderjit Badhwar Managing Editor Ramesh Menon Executive Editor Alam Srinivas Senior Editor Vishwas Kumar Contributing Editors Naresh Minocha, Girish Nikam Associate Editor Meha Mathur Deputy Editors Prabir Biswas, Probir Pramanik

LEAD

Did Jaitley wimp out on budget?

The BJP had promised the moon during the election campaign, leading the country to believe it had the alternative blueprint. But Arun Jaitley’s budget revealed that Modi’s regime had no short-term mantra to kick-start growth and revive investments, writes ALAM SRINIVAS

Art Director Anthony Lawrence Senior Visualizer Amitava Sen Graphic Designer Lalit Khitoliya Photographer Anil Shakya News Coordinator Kh Manglembi Devi Production Pawan Kumar Verma CFO Anand Raj Singh VP (HR & General Administration) Lokesh C Sharma Director (Marketing) Raju Sarin GM (Sales & Marketing) Naveen Tandon-09717121002 DGM (Sales & Marketing) Feroz Akhtar-09650052100 Marketing Associate Ggarima Rai For advertising & subscription queries sales@indialegalonline.com

Published by Raju Sarin on behalf of E N Communications Pvt Ltd and printed at CIRRUS GRAPHICS Pvt Ltd., B-61, Sector-67, Noida. (UP)- 201 301 (India) All rights reserved. Reproduction or translation in any language in whole or in part without permission is prohibited. Requests for permission should be directed to E N Communications Pvt Ltd . Opinions of writers in the magazine are not necessarily endorsed by E N Communications Pvt Ltd . The Publisher assumes no responsibility for the return of unsolicited material or for material lost or damaged in transit. All correspondence should be addressed to E N Communications Pvt Ltd .

OWNED BY E. N. COMMUNICATIONS PVT. LTD. NOIDA HEAD OFFICE: A -9, Sector-68, Gautam Buddh Nagar, NOIDA (U.P.) - 201309 Phone: +9 1-0120-2471400-432 ; Fax: + 91- 0120-2471411 e-mail: editor@indialegalonline.com website: www.indialegalonline.com MUMBAI OFFICE: Arshie Complex, B-3 & B4, Yari Road, Versova, Andheri, Mumbai-400058 RANCHI OFFICE: House No. 130/C, Vidyalaya Marg, Ashoknagar, Ranchi-834002. LUCKNOW OFFICE: First floor, 21/32, A, West View, Tilak Marg, Hazratganj, Lucknow-226001. PATNA OFFICE: Sukh Vihar Apartment, West Boring Canal Road, New Punaichak, Opposite Lalita Hotel, Patna-800023. ALLAHABAD OFFICE: Leader Press, 9-A, Edmonston Road, Civil Lines, Allahabad-211 001.

July 31, 2014

SUPREME COURT

Jostling for judges

Executive-judiciary relations hit rock bottom, as Chief Justice RM Lodha joined issue with the NDA regime over judicial appointments. RAJENDRAN NAIR KARAKULAM and SHOBHA JOHN CONTROVERSY

The Gandhis’ business sense

VISHWAS KUMAR analyzes how Young Indians, owned by Sonia and Rahul Gandhi, acquired the control of National Herald, with `5,000 crore assets FOCUS

All that bitterness around sugar Yet another largesse to the sugar mills, this time a subsidy by the NDA government. BHAVDEEP KANG explores the nexus between sugar barons and ruling regimes, at the expense of farmers and consumers

Stranded, at sea

A group of Indian workers are stuck without food or water on an oil tanker off Sharjah port. With their passports confiscated, 10 Indians now fear the worst. PROBIR PRAMANIK probes whether they are victims of an oil smuggling racket

GLOBAL TRENDS

Uncle Sam or Peeping Tom?

Was that sparkle for real?

SPORTS

The ball, in Jaitley’s court

42 46

When the economic crisis set in, Indian diamond traders faked their sales to avail of huge loans. VISHWAS KUMAR investigates the case of Suranis, who siphoned off `1,300 crore from Indian and Hong Kong banks

RIGHTS

Of human bonds

RSS’ mediaman

ALSO

Ram Madhav’s inclusion in the BJP is to blunt Arun Jaitley’s clout, smoothen relations with the RSS, and use his diplomatic and academic contacts, says BHAVDEEP KANG

America’s NSA weaves a worldwide web of spy tools to snoop on every single entity in the world. ALAM SRINIVAS wonders whatever happened to its ideals of individual rights and piracy

PROBE

PROFILE

Does creed come in the way of motherly affection? A ruling by the Supreme Court does away with an anomaly, which deprived non-Hindus of the right to adopt. ANUBHA RASTOGI reports

He batted for BCCI’s tax exemption as the board’s vice-president till a year ago. Now, as FM, will Arun Jaitley change his stand? ALAM SRINIVAS describes the possibilities

BOOKS

1,38,900 trips to victory Travelling 3 lakh kilometers, targeting villages without even a radio set, Modi made use of every medium possible to send out the message to the last man that a vote for the BJP was a direct vote for him. RAMESH MENON describes the war room efforts of the party, in Modi Demystified

REGULARS

EXCLUSIVE

Kashmir expert Wajahat Habibullah’s take on Article 370 ......................24 IAF’s over-reliance on foreign aircraft, and what the defense budget portends.............32 Realtors’ tall and unrealistic promises........50 Lack of toilets in dalit households, and the resulting insecurity for the womenfolk................62

The passing the parcel game in the Indian bureaucracy..................64

Letter from the Editor …............ .........................................................4 Letters…..............................................................................................8 Quote-Unquote ...............… ................................................................9 Ringside ..........................… ..............................................................10 Supreme Court..................................................................................16 Briefs .................................................................................................77 Consumer Corner..............................................................................78 Is That Legal?....................................................................................80 Wordly-wise .......................................................................................81 People ...............................................................................................82 Cover Design: ANTHONY LAWRENCE INDIA LEGAL July 31, 2014

LETTERS Postal woes India Post’s service in Gurgaon, particularly for National Media Complex (NMC) residents, is a cruel, classic, tyrannical fraud. I’m a victim of my innumerable letters missing. Last year, I sent two airmail covers with five important financial instruments from Boston to NMC executive secretary; she never got these. Later, I sent another airmail cover to her at a Delhi address. That too never reached. Incidentally, a few years ago, after losing so many of my important letters, including cheques, I went to the post office and met the area postmaster about the horrible postal service for NMC residents. He took me to a small room deluged with letters, greeting cards, magazines, and much other postal material, and asked me: “How I can deliver this? There are not enough postmen, and they have only bicycles to carry and deliver this stuff, how can they, poor guys do that?” But what do you do with the heap? “We destroy, burn and sometimes sell all this as wastepaper.” I was horrified. I even complained to a very senior postal department official in Delhi. He too expressed helplessness. So, that’s what has been going on; with nothing done so far, and we’re losing our mail day in and day out. God save the India Post department. MR Dua, Gurgaon

SC is forward-looking

www.facebook.com/indialegalmagazine

www.twitter.com/indialegalmag

July 31, 2014

While the recent judgment of the Supreme Court that fatwas have no judicial standing is welcome, there are certain aspects that need thinking. Let us hope the power-hungry politicians, while championing women’s empowerment do not nullify the judgment as they did in the Shah Bano case to snatch the bread from the mouths of helpless destitute women. It is important to remember that for the uneducated laity, any pronouncement by a religious authority is accepted as the word of God. It is interesting that these authorities are being asked to clarify civil and criminal matters even after 12 centuries of the establishment of Islam. The unfortunate part is that the Muslim theologians continue to deal with the queries with a medieval mindset. Picking and choosing the solution as per convenience is their forte. It is important for the government to give the widest possible publicity to the judgment, particularly the younger generation. JC Trivedi, Ahmedabad

New frontier Your article on Indian sea power (The Final Frontier, July 15) was truly informative. For the first time, I realized the potential that the sea holds for us. It’s amazing how we have not utilized this potential, nor have we woken up to the threat perception. I hope that the Modi government will become proactive in pursuing a sea policy. Pratik Bhasin, Delhi

Clarification A letter by Miranda Ingudam from New Delhi in the May 15, 2014 issue of India Legal, titled, “A thought to the women” had her personal opinions. It was not written in her official capacity. — Editor

Please email your letters to: editor@indialegalonline.com Or write to us at: India Legal, ENC Network, A-9, Sector 68, Gautam Buddh Nagar, Noida (UP) - 201309

QUOTE-UNQUOTE

“In test cricket, we have heard of players who score a century or a double century on their debut. But I do not know of any batsman who becomes a captain in the very first test he plays and scores a triple century!”

“We hope to eradicate man-made laws from Britain and the world. We call upon the Queen to give up playing God... she would be expected like all women in Britain to be covered from head to toe.”

—LK Advani congratulating Prime Minister Narendra Modi for BJP’s performance in Lok Sabha elections 2014

“Condoms promise safe sex, but the safest sex is through faithfulness to one’s partner. Prevention is always better than cure.”

— Al Muhajiroun leader Anjem Choudary, on his Islamic vision for the world

“If any opponent of TMC touches any TMC girl, any father, any child, I will destroy his entire family. Aamar chheleder dhukiye debo, rape kore chole jaabe....(I will unleash my boys, they will rape them....)” —Trinamoool Congress MP Tapas Paul, after CPI(M) supporters allegedly attacked TMC workers in Krishnanagar, West Bengal

“Amused and appalled in equal measure by the reactions from people on the Sharapova-Sachin non-issue. We are not the center of the earth!!” —Harsha Bhogle on nasty comments on social media after tennis star Maria Sharapova said she didn’t know who Tendulkar was

—Union Health Minister Harsh Vardhan on AIDS prevention measures

“When I was born, someone hinted to my mother that ‘beti to bojh hoti hai’ (a daughter is a burden) and therefore she should kill me” —HRD Minister Smriti Irani, speaking to students about female foeticide

“When an airline comes to Malaysia, I compete. I don’t try and block them....The days of monopoly and cartels have gone.” —Air Asia Chief Tony Fernandes, on the hostile reception his airline got from competitors INDIA LEGAL July 31, 2014

Aruna

VERDICT “Justice will not be served until those who are unaffected are as outraged as those who are.”

— Benjamin Franklin

July 31, 2014

SUPREME COURT/ appointments row

JOSTLING OVER JUDGES

Amitava Sen

the gopal subramanium controversy and the belligerence of chief justice rm lodha on judiciary’s independence have forced the center to look afresh into judges’ appointments By Rajendran Nair Karakulam and Shobha John

f you thought all was fair and square in the judiciary, think again. The unseemly tussle between the two important arms of the government—the judiciary and the executive—over senior advocate Gopal Subramanium’s appointment as Supreme Court (SC) judge, has shown how heavy the stakes are. The row led to a fresh debate on the formation of a Judicial Appointments Commission (JAC), although the Modi government has put the

July 31, 2014

idea on the backburner, as of now. A collegium of five SC judges had recommended Subramanium’s name, along with chief justices of Calcutta and Orissa High Courts, Arun Mishra and Adarsh Kumar Goyal respectively, and senior lawyer Rohinton Nariman when the UPA was in power. The center requested the collegium to reconsider Subramanium’s case. The names of three others were cleared for SC judges. Feeling let down by the decision and a campaign that questioned his integrity, Subramanium withdrew his candidature on June 25. In a TV interview, he revealed his hurt: “I am known to be utterly, utterly, utterly independent, which means I am inaccessible....” PLANNED ONSLAUGHT The segregation of Subramanium was done by the Modi government on the basis of “adverse” reports by the Central Bureau of Investigation (CBI) and the Intelligence Bureau (IB). The CBI alleged that he had met 2G scam-accused A Raja’s lawyers while he was solicitor general, a charge Subramanium has denied. The IB had cited “personality oddities” such as Subramanium mentioning his spiritual instincts in the exposure of gold pilferage from Padmanabhaswamy Temple in Thiruvananthapuram. Caught in this sudden maelstrom, Chief Justice of India (CJI) RM Lodha showed his unhappiness over the unsavory affair, and in the first serious embarrassment to the government, criticized it. He said: “I fail to understand how the appointment to a high

JUDICIARY’S IRE (Left) Chief Justice RM Lodha has taken umbrage at the casual manner in which the center handled the Gopal Subramanium (right) appointment issue

constitutional post has been dealt with in a casual manner.” The CJI insisted that at no cost could the independence of the judiciary be compromised. Although law minister Ravi Shankar Prasad refused to comment, the curt reaction already set the ball rolling on apex court’s fight with the Modi government on the judiciary’s independence. The fact that this had to happen to Subramanium of all people must have compounded Lodha’s unhappiness. He holds him in high personal regard and had lamented on his resignation earlier as solicitor general in 2011 during UPA’s rule. He had gone on record to appreciate Subramanium by saying that the lawyer had ably conducted every single case on behalf of the center, and this showed his “high character, sweet manners and single-minded application.”

Crisis management The future of the Judicial Appointments Commission Bill and the Judicial Accountability Bill hangs in the balance, as the Modi government decided to hold them from becoming laws. The reason prima facie seems to be the crisis created by the Chief Justice RM Lodha’s terse reaction to the center’s refusal to clear the name of Gopal Subramanium.

The government probably wants to buy time and defuse the crisis in order to avoid a direct clash between the executive and judiciary. In the meantime, it will discuss the bills with jurists, retired apex court judges and supreme court bar association after the budget session of parliament. The confabulations may take a few months after the process starts. The center also wants to avoid an

embarrassing situation in which the supreme court strikes down a law passed by parliament to do away with the collegium system. The Judicial Appointments Commission bill aims to replace the collegium system of appointing judges to the Supreme Court and high courts. The Judicial Accountability Bill lays down a code of conduct for the judiciary. INDIA LEGAL July 31, 2014

SUPREME COURT/ appointments row

Post of contention

he chief justice was abroad when Gopal Subramanium wrote a nine-page letter to the CJI on June 25, withdrawing his consent to become an SC judge. He said; “I am unable to dispel the sense of unease that the judiciary has failed to assert its independence by respecting likes and dislikes of the executive.” The CJI said that after learning about the development, he had, on June 25, talked to Subramanium and told him to wait for his return three

days later. But he didn’t and quit. Aggrieved over the turn of events, the CJI at a farewell function for Justice BS Chauhan, slammed the center for dropping Subramanium’s name, saying: “I do not approve of it (the segregation). It was done without my knowledge and consent.” He said these events had cast aspersions on the independence of judiciary. “I promise 1.2 billion people of India that the independence of judiciary will not be compromised. I will be the first

Of course, this is of no consideration to the ruling party, whose rejection of Subramanium seems simple—he was the amicus curae in the Sohrabuddin fake encounter case in which the names of Narendra Modi and his right-hand man Amit Shah figured prominently. POWER STRUGGLE The system of judicial appointments was ridden with controversy since 1970 and criticized by the executive for giving too much power to the judiciary. As per the existing system, appointment of SC judges is at the discretion of the judiciary; the executive can only ask the collegium to reconsider a recommendation. In case a name is re-recommended, the executive has to clear the name, but it has the option of sitting on the file indefinitely. And, there was all likelihood that the present government could have sat on Subramanium’s file for months. Luckily for it, Subramanium quit before that. The collegium system has had its critics in the legal fraternity too. In recent times, it has been criticized for its opacity, unaccountabil-

The collegium system has been defined as a “solution which has proved much worse than the disease”. The new JAC system may see confusion and more power play. 14

July 31, 2014

person to leave this chair if judiciary’s independence is compromised.” He said he had protected independence of the judiciary for 20 years. The CJI also criticized Subramanium for making public his letter withdrawing consent to become a judge. When contacted, law minister Ravi Shankar Prasad refused to comment. A senior government functionary said: “We exercised the right we have got under the constitution.”

ity and the hubris of the judiciary in considering itself the sole guardian of judicial independence. There have been charges of nepotism in the appointments process, lack of an adequate tenure for the chief justices of high courts, the consultation process being secretive and meritorious candidates from the bar and high courts being denied an opportunity to serve on the bench for undisclosed reasons. Law Commission of India Chairman Justice AP Shah has described the collegium system as a “solution which has proved much worse than the disease” and “exemplifies the misalignment between the core values of judicial independence and judicial accountability.” Senior Supreme Court lawyer Harish Salve said: “I have been a critique of this collegium system. It is not serving the Indian judiciary or democracy.” Now, the same system has been called into question for denying independence to the judiciary and for political interference in judicial appointments. HOW FAIR IS IT? The collegium system is an extremely sensitive one and requires the judiciary and the executive to place confidence in one another without airing views in public. What if the government of the day had gone public with the comments of the Chief Justice of the Gujarat High Court Bhaskar Bhattacharya that it was because he had opposed the appointment of former CJI Altamas Kabir’s sister to the Calcutta High Court bench when

Gopal’s replacement

enior advocate Uday Umesh Lalit is likely to be appointed Supreme Court judge in place of Gopal Subramanium. This is the first time that two advocates are being appointed as judges: Both are from Maharashtra, the other being Rohinton Nariman.

he was a member of that collegium that he was not elevated to the SC? Bhattacharya had then written to Kabir: “When time came for the selection of Smt Shukla Kabir Sinha as a judge of the high court, I was pressured to agree to such a proposal as a member of the collegium, but I thought it would amount to committing rape of the Calcutta High Court, which was like my mother and if I didn’t raise any objections that would amount to closing my eyes while my mother was being raped.” It is often difficult to reason why one person is recommended by the SC, while clarifications are sought for others. In 2009, when the then collegium recommended the names of Swatanter Kumar and CK Prasad, Kumar’s name was cleared for SC judge, while Prasad’s elevation was stuck because of some complaints against him. So, what does the constitution say about the appointment of SC judges? Article 124(2) provides that every SC judge shall be appointed by the president after consultation with such judges as he thinks fit, which must include the chief justice. The current system of appointing judges on the recommendation of a collegium, consisting of the chief justice and four senior-most judges, has been arrived at through a series of cases known as the “Three Judges Cases”, each granting more independence to the judiciary. In the first case, SP Gupta vs Union of India case of 1981, known as the “Judges Transfer Case”, the executive became powerful and had the last word on appointment of judges. The judgment faced a lot of criticism on the ground that the appointments were prone to political influence and hampered the independence of the judiciary. It was held

that the proposal for appointment to a high court can emanate from any of the four constitutional functionaries mentioned in Article 217—which include the president, the CJI and the state governor—and not necessarily from the chief justice of the high court. However, in 1993, the independence of the judiciary was restored. The Advocates on Record case, aka “Judges Appointment case” laid down that the opinion of the CJI has primacy in case of a conflict of opinion between the executive and judiciary. It was in this case that the collegium system of appointment was initiated and the CJI was bound to seek the advice of his two senior-most colleagues. The third case was a presidential reference seeking clarifications over the second case judgment. In this case, the court merely enlarged the collegium from three to five of the senior-most judges and arrived at the current system of appointment. BANKING ON JAC The UPA government moved a Constitution (120th Amendment) Bill, 2013, granting constitutional status to the Judicial Appointment Commission Bill by amending Article 124 and Article 217. It has been passed by the Rajya Sabha and has to be moved in the Lok Sabha. The bill proposes a commission headed by the CJI which will have as members, two senior-most judges, the law minister and two eminent persons nominated by the prime minister, the CJI and the Leader of the Opposition. It also proposes to make the central and state government responsible for making a recommendation to the commission along with chief justices of high courts. The establishment of the JAC would mean that the executive has a bigger say in judicial appointments. The JAC would ensure that any unreasonable action of the judiciary is prevented by the executive and any politically motivated action of the executive is checked by the judiciary. However, it may bring in multiple influences from the executive, judiciary, state governments and independent experts and lead to a chaotic situation. Let’s hope that the JAC, if appointed, will lay the ghosts of the past to rest. IL —with inputs from Shailendra Singh and Sanjai Pathak

It’s now official

midst all the brouhaha, Justice Adarsh Kumar Goel, Justice Arun Mishra, and senior advocate Rohinton Nariman (top-bottom) took over as judges of the Supreme Court on July 7. With these three appointments, the number of judges in the apex court went up to 27. Three vacancies were still pending.

INDIA LEGAL July 31, 2014

SUPREME COURT

Batting for e-courts

Illustrations: Aruna

acklog of cases is an issue that has bothered the judiciary no end. The chief justice himself has suggested measures to tackle the issue. Now it’s the turn of Justice B Lokur to come up with solutions. In a meeting with law interns from law schools across the world, he suggested that the country should have e-courts, go digital on cases, ensure that courts are computerized and video conferencing between jails and courts is enabled. Expressing regret that cases drag on for years despite advancements in information technology and a glut of computer professionals in India, Lokur stated that e-courts, where case proceedings and witness deposition can be recorded and retrieved, will be useful for all stakeholders.

Rape can’t be a weapon

here is no doubt that law enforcing agencies and society at large need to wake up to rape. However, women, too, have used rape to settle scores with men. A two-judge vacation bench was faced with a legal dilemma in a case, wherein a woman had accused her partner of rape after their three-year live-in relationship broke up. She alleged that her partner had sexually abused her, promising they would get married, and even shot an indecent video. The man, who had filed a petition in the apex court against his arrest, contended that she had entered into the relationship fully aware that he was married with two children, and his divorce petition was pending. On its enquiry if “breach of promise to marry” could lead to rape charges and if a precedent

July 31, 2014

Fatwa has no legal basis

A existed of indictment by the apex court, the bench learned that a judgment did exist, provided other factors are taken into account. Pulling up the man for the indecent video, the court decided to take up legal issues in the case at a later date. It also slapped a notice to the Delhi police, which was investigating the case for more than a year.

fter its ruling this February that fatwas are a matter of faith and the courts can only come in when an individual’s rights are violated, the Supreme Court said in July that ignoring such diktats from Shariat courts or muftis will not attract legal proceedings. Categorically stating that fatwas have no legal sanction, a two-judge bench dismissed their existence in a free India. It also made it clear that if anybody tries to ensure their observance through coercion, the action will be deemed illegal. The judgment was in response to a petition by a Delhi-based advocate, who objected to bodies like Darul Qaza and Darul Iftaa influencing the social and religious freedom of people through parallel courts, run to settle disputes.

The flip side of Section 498A

his is a ruling that will bring immense relief to men who land up in prison along with parents on false charges of tormenting their wives for dowry. The apex court observed that women were using stringent anti-dowry laws to harass or blackmail their husbands and in-laws. Low conviction rate in dowry cases indicate that something is amiss. A two-judge bench warned the police that it should refrain from arresting or detaining anybody under Section 498A in a dowry complaint, and follow the checklist under Section 41 of CrPC thoroughly, before taking any action. The checklist takes into account all possible angles to justify the arrest. Adding another layer of sieve, the bench added that in case of arrest, the officer needs to submit a report to and produce the person in front of a magistrate.

The arrest will be held valid only if the magistrate validates it. Noting that the nature of Section 498A has earned dubious distinction, the bench said the ruling shall apply to all offences which entail imprisonment of less than seven years.

Bail, not jail for Tejpal

ven persons accused of shocking crimes have the right to life and liberty. This was the standpoint of the apex court while granting regular bail to former editor of the Tehelka magazine Tarun Tejpal, who had filed a petition. Seeking to end the culture of “jail, not bail”, wherein the judiciary has been averse to granting bail during the trial stage for people charged in heinous crimes, the apex court in this case enforced “bail, not jail” practice in the interest of fair trial. It took cognizance of the fact that the investigation was over, the chargesheet had been filed in court and there was no way the trial would be over soon. The bench ruled that holding back Tejpal in prison would violate right to life under Article 21. It directed the trial court in Goa to give the judgment within eight months, and warned Tejpal not to influence the trial or tamper with evidence.

Quantum of punishment

nstances of people spending a few years in prison or undergoing life imprisonment, or going to the gallows for a single crime are common. But what happens if a person has been indicted for multiple offenses in a single trial? In such cases, the courts in some cases settle for life imprisonment for the most serious crime and opt for successive jail terms of various periods for other offenses. But the Supreme Court barred the courts from doing so, saying it was against the tenets of law. A two-judge bench ruled that once a convict got a life imprisonment, there was no need for further imprisonment. Section 31 (2) clearly states that the total punishment for a convict in several crimes must not exceed 14 years, and the bench took cognizance of this legal provision. It said that life imprisonment implied “imprisonment for full and complete span of life” so there was no room for further sentences. The judgment was given in an Odisha case, where the trial court had ordered death for man who was found guilty of kidnapping a minor girl, raping her and finally murdering her. However, the high court converted the death penalty to life imprisonment after looking into other factors. INDIA LEGAL July 31, 2014

LEAD/ budget 2014

Post-budget EDITOR’S NOTE FINANCE Minister Arun Jaitley’s “first journey” budget produced a deafening no-bang. Its chief characteristic appeared to be a lack of vision on real problems needing urgent solutions, such as debt-equity risk, which discourage new investments because project clearances are interminably delayed. There was no thrust on the revival of manufacturing through labor reforms. Disinvestment took a back seat, although he promised sale of shares in public sector banks to retail investors. Initiatives on foreign direct investment, including the insurance sector, were wishy-washy. The budget left big question marks. How does one revive growth and capital expenditure? Where is the insulin shot for a diabetic economy, the more colorful phrase for stagflation—the debilitating combination of low growth, unemployment and inflation? The budget did not meet macro market expectations. It contained, instead, sops for micro-political constituencies rather than blockbuster measures for changing the parameters of Indian economic policy. What happened to Narendra Modi's “minimum government, maximum-governance” catchphrase? What India got instead was a polyglot of a thousand schemes, which will be like a honey pot to swarms of babus. There was a huge gap in terms of what Modi said and what Team Modi delivered. And, P Chidambaram, the former finance minister, seemed to have the last laugh as he “welcomed” the new government to the realities of the marketplace. The key questions: Is the budget equal to Modi’s mandate? What did Jaitley signal? Is this the real face of Modinomics and an admission that the in-your-face “Gujarat Model” cannot be replicated on a national scale? Did Jaitley wimp out? Or conversely, is this a good budget badly presented? Or, is it simply a psychological move—a feel-good budget to make people spend more and feel comfortable? Executive Editor ALAM SRINIVAS sneaks a peep into Jaitley’s mind, during the hours after his budget speech. He probes the finance minister’s thought process and winnows the chaff from the grain in a lively, no-holds-barred analysis. 18

July 31, 2014

ruminations

ALAM SRINIVAS’ JAITLEY DIARY SCENARIO 5.35 AM, July 11, 2014: Aaaargh! How my back hurts. I must be the only finance minister (FM) who took a five-minute break during the budget speech. My back ached so much that I had to sit down to deliver the rest of it. But more than the physical condition, it was my mind that was in turmoil for the past 45 days. We made many promises to most sections of society. There were many expectations—among industry, investors,

individuals and experts. My first budget was government’s first major policy document. We said that we would hit the ground running. My budget had to prove it conclusively. Sadly, the morning newspapers the day after spoiled my mood. This is how The Economic Times, India’s leading pink daily, headlined its budget piece: “A Chidambaram budget with saffron lipstick”. This was the worst criticism INDIA LEGAL July 31, 2014

LEAD/ budget 2014 / jaitley’s diary

Photos: UNI

I could get. How could Swaminathan Aiyar ever compare me to P Chidambaram, the former FM, whose budgets I ripped apart? He didn’t get it. I said in my speech that I faced challenges because of the previous regime’s legacy. I had little elbow room to maneuver in terms of revenues, expenditure and taxation. I had to ensure high growth and low inflation, an almost impossibility in monetary terms. Yes, I know I criticized UPA-II for not achieving these twin objectives. But, I was then in the opposition. I could not sympathize with Chidambaram. I had to attack him. As I finalized the details in the past few weeks, I had to show ambitious intent and exaggerated promises, play vote-bank politics, include ideological nuggets from BJP’s manifesto and RSS’ agenda, replicate the Gujarat model on an all-India level and, of course, give sops to investors and individuals.

July 31, 2014

This government is about image and symbols. Thus, I had to include new welfare schemes named after “our” leaders. 6.47 AM, July 11, 2014: Big-bang reforms! Big-ticket announcements! Insulin shots! This is what everyone expected. But, give me a break. I have been the FM for only 45 days! I had to first understand the “real” state of the economy. How could I announce huge decisions without discussions and deliberations? Do you think it is easy to slash subsidies, kick-start growth, combat inflation, and manage the fiscal deficit? Experts said I should introduce the Goods and Services Tax (GST). But there is no consensus among the states’ chief ministers (CMs) on it. The most vociferous critics are our own CMs. I have to wean them to my side. It needs constructive talks. This is why I announced that I will seriously take it up with the CMs and reach a conclusion by the

Food subsidy

Revised estimates (RE)

Source: Economic Survey of India

end of the financial year. The Economic Survey idea for a part-GST was humbug. Then, there was a suggestion about subsidies. I should rein them, especially those on food and fuel. But this is a huge exercise. It involves radical shifts in mindsets. It requires a complete revamp of the existing system. Can it be done in 45 days, a few months or a few years? No. It will require at least two full terms to achieve the objective. So, I said that we will target subsidies to the poor, exactly what Chidambaram tried to do. 7.56 AM, July 11, 2014: I decided to opt for a half-bang (some may say no-bang) strategy. A slew of steps were announced on taxes. I said there will be no retrospective taxes, unless it was necessary—I know, even the UPA-II said it—and I said that such cases would need to be first cleared by a senior committee—I know, even the UPA-II said it. But the most important step was to allow

Fertilizer subsidy

Revised estimates (RE)

Source: Economic Survey of India

advance rulings on taxes for most investors. Isn’t that great! It will imply that there will be minimal disputes between companies and the taxmen. No more controversial cases like Vodafone, Nokia, etc. And didn’t I allow higher exemption limits for individual taxpayers? Not many highlighted my bold steps to hike FDI (foreign direct investment) limits to 49 percent in defense and insurance. I understand there is no difference between 26 and 49 percent for a foreign investor. Both give him similar minority control. But didn’t these moves send the right signals globally? That this regime may oppose FDI in organized retail, but welcomes it in other sectors. 8.33 AM, July 11, 2014: Growth, inflation, unemployment and fiscal deficit! These four pillars of development hung over my head, and that of the nation, like four Damocles’ swords. I cried when onion prices shot up, and Met department declared a below-

RAW DEAL (Extreme left and above) The budget has few proposals to boost agriculture. Jaitley has no plan to revamp Agricultural Produce Marketing Committee Acts

INDIA LEGAL July 31, 2014

LEAD/ budget 2014 / jaitley’s diary

Food inflation (wholesale price index)

Source: Office of the Economic Advisor, DIPP

“I had to show ambitious intent, make hyped-up promises, appease vote banks, implement BJP and RSS agenda, copy the Gujarat model, and give sops to investors.” LOST OPPORTUNITY The Modi-government has been unable to initiate a fire-fighting strategy to contain the mounting inflation curve in the budget

July 31, 2014

average and delayed monsoon. It requires systemic supply-side changes to curb prices. More important, it requires coordination and consensus between the center and states. Right now, only a handful states are ruled by us or our coalition partners. There is no way I could have pushed for changes in the states’ Agricultural Produce Marketing Committee Acts, which are major bottlenecks. I could only announce that “the Central Government will work closely with the State Governments to reorient their respective APMC Acts.” Which could take months to achieve, and bad monsoons would prove to be the last straw. Similarly, growth cannot happen in a short time. Right now, I could only improve the sentiments and ensure higher investments in infrastructure, which might contribute to growth in the medium term. This is why I announced that Real Estate Investment Trusts (REITs), which proved to be non-starters in India but were successful globally, will have pass-through for the purpose of taxation. This incentive is enough for huge funds to flow into the realty sector, which will boost housing and construction. The same benefits will accrue to the innovative Infrastructure Investment Trusts, a mod-

ified REIT-like structure, to ensure flow of funds. I admit the introduction of REITs was already in process—SEBI issued draft guidelines in October 2013—but the pass-through tax was an obstacle that I removed. A major problem is the financing of infrastructure projects. Banks are not keen to lend because of the long period of the loans, and the risks attached with such projects. I allowed banks to extend loans “with flexible restructuring to absorb potential adverse contingencies”. And I allowed them to raise long-term funds with minimum restrictions on requirements to keep a part of it as cash or investments in government securities. My biggest employment-generation plan was the `10,000-crore corpus for startups. Most jobs globally come from small and medium enterprises. If India has to shift gears, and move away from jobless growth witnessed in the past decade, this is the way forward. We have to encourage entrepreneurship and small firms. These measures will not change the realities in a jiffy. India will stutter towards growth. In my speech, I could only assure that 7-8 percent growth will happen in 2-4 years. Not to forget that the fiscal deficit will come down from 4.1 to 3 percent of GDP in two years. 1 PM, July 11, 2014: P, P, P! This has become my nemesis. My prime minister feels that PPP (public-private partnership) is the panacea for growth and our economic and social problems. It started with the railways budget, and I had to follow the principle. I

FDI inflows (in $ million) 2500

2000

1500

1000

500

Source: dipp.nic.in

Growth rate 10

mentioned PPP or PPPs 12 times in my speech. My boss thinks this model will lead to a flood of Indian and foreign funds to finance our grand infrastructure and other plans. In my heart, I realize that there are issues with PPP. In the past, across sectors like roads and highways, it has resulted in corruption and crony capitalism. The existing models and contracts were criticized by all the stakeholders, who drafted the model PPP agreements. This is why I clarified that while India is the largest PPP market with 900 projects, “we have also seen the weaknesses of the PPP framework, the rigidities in contractual arrangements, the need to develop more nuanced and sophisticated models of contracting and develop quick dispute redressal mechanism”. Therefore, I allocated `500 crore to set up 3P India, an institution to achieve these objectives. 3P India may take months to finalize and finesse model agreements that will satisfy the parties. But it is a beginning of a process. By the end of our tenure, you will see the results. 10 PM, July 11, 2014: My biggest headache was to pander to social, ideological, religious and vote-bank demands by my prime minister, the RSS, and our CMs. To please my

supreme leader, I allocated `200 crore for Sardar Patel’s iron statue, the tallest in the world, in Gujarat, `100 crore for beautification of ghats, and `2,000 crore for Gangacleaning plan. I hinted at projects to link our rivers. To indicate who was now in power, I included new programs and institutions, named after our favorite leaders like Deen Dayal Upadhay, Syama Prasad Mookerjee, and Jai Prakash Narayan. I announced the revision of royalty on mining products, as most of the mining states are ruled by us. Vote-bank tactics forced me to provide `100 crore to finance Dalit-promoted startups, `500 crore for Kashmiri migrants (Pandits), and `100 crore to uplift the madrasas. RSS was placated through proposals on conservation of heritage and archaeological sites. Grand schemes—one of them an existing one announced by UPA-II—like Digital India (broadband in every village) and National Rural Internet and Technology Mission— were included in the speech. At the end of the day, it led to the making of a chillad (loose change) budget. I was forced to give `50 crore here, `100 crore there and `500 crore elsewhere. IL

Source: RBI Bulletin

SECTORAL BENEFITS Manufacturing and infrastructure have got a leg-up in this year’s budget

INDIA LEGAL July 31, 2014

PROFILE/ wajahat habibullah

“ABROGATION OF ARTICLE 370 IS UNREALISTIC”

india’s first chief information officer, who also served in kashmir as an ias officer, speaks about the trials and tribulations of nation-building By Rajendra Bajpai

ew Indians under 50 realize how precarious the country’s condition was at the time of independence. There were secessionist movements in northeast India; Kashmir was attacked by Pakistani raiders, and in the 1960s, Tamil Nadu threatened to break away from the mainland. There was no guarantee that India would

July 31, 2014

remain united. “(Our greatest success) is that we have not only remained united but the feeling of nationhood is now much stronger. Every Indian is proud of being an Indian,” says Wajahat Habibullah, former civil servant, erstwhile chairman of the National Minorities Commission, and the country’s first chief information commissioner. Habibullah should know what nationhood

means for he grew up in an India that was coming to grips with its own existence and facing challenges to becoming a separate nation. The son of General Inayat Habibullah, the founder of National Defence Academy Khadakwasla, Habibullah had an upper-class upbringing in Lucknow, went to Doon School and read history at St. Stephen’s college in Delhi. He joined IAS in 1968 and retired in 2005. He was admired in bureaucratic circles for his insights on complex issues impacting India, including Kashmir, on which he is considered an expert by New Delhi. While responding to a query on the greatest failure that challenges nationhood, Habibullah says: “We have not built into our society the kind of harmonious multiethnic living that goes with building a nation. It’s a threat to our very nationhood.” Drawing from years of experience in Jammu and Kashmir (J&K), most of it in the valley, as an IAS officer, Habibullah informs: “The sense of nationhood is all pervasive and cuts across caste and linguistic boundaries although it was something that was alien to India.” KASHMIR DILEMMA Habibullah was posted in J&K during the turbulent years of the 1990s, and was perceived as the only human face of New Delhi. As divisional commissioner of Srinagar, he was responsible for the peaceful surrender of more than two dozen armed terrorists in the Hazratbal shrine hostage drama in 1993. Reacting to the BJP’s plan to abrogate Article 370, which confers special status on J&K, Habibullah says that much of the debate is ill-informed. “Article 370 makes J&K a part of India. Its abrogation is, therefore, unrealistic unless you want to get rid of the state.” Having penned several books on Kashmir, the prominent being My Kashmir: The Dying of the Light, Habibullah is forthright while talking about the plight of the Kashmiri pandits, who fled their homes in the aftermath of terrorist attacks in the 1990s. He says that attacks on pandits were planned and executed by Pakistan’s ISI, which wanted them to leave the valley and make the exodus appear like a Hindu-Muslim problem. “About 3,700 pandits are still living in the valley and they have

Anil Shakya

lived through more than 20 years of turbulence and insecurity.” The former bureaucrat also blames the center for not providing adequate security to the pandits. However, Kashmiri pandits and Muslims are now spread across India. Many of them live and work abroad, and few may want to return home although some might want to come back as tourists to refresh memories. Although Kashmir has grabbed headlines in Indian media for more than 60 years, what about the community’s presence in print and electronic media? “There was a time I regretted that there were not enough Kashmiris in the media to project their point of view. But that problem has been addressed and there is a strong Kashmiri presence in the media.”

UNCERTAIN FUTURE The fate of Kashmiri pandits, who fled from their homes in the 1990s still hangs in the balance

ROLE OF CIVIL SERVANTS Habibullah is candid about what’s wrong with the civil service which he regards as elitist. “The concept of an elite civil service has no place in a democracy,” he says, adding

The elite civil service has no place in India. The current system is based on mistrust. We need to decentralize it, and have a CEO to implement panchayat decisions. INDIA LEGAL July 31, 2014

PROFILE/ wajahat habibullah

INDIA’S TRIUMPHS AND TRAGEDIES

ndia represents an unprecedented experiment in nationbuilding, after centuries of being part of empires that laid the foundations for its geographic boundaries. This experiment is unprecedented because it differs radically from the idea of a nationstate rooted in European experience, which is based on national boundaries demarcated by ethnic, linguistic, and religious uniformity. In India an outstanding lawyer, with a solid background in English law, sought to build a nation—what was to become Pakistan—on the grounds of religion. Malaysia’s founders sought to build a secular state, with a bias towards the bhoomiputra (indigenous Malays, who were overwhelmingly Muslim) in a nation with two dominant ethnic communities. The people of the Philippines and Indonesia, ethnically more homogeneous but with differences in religion, also sought (with varying degrees of success) to build their nations through recourse to democratic and dictatorial means. India, on the other hand, has for centuries been a cultural and economic multiethnic tapestry. And how did we address the issue of such diversity? India, describing itself as a “Union of States” with a strong unitary bias, framed its constitution with three lists: union, state and concurrent. In the latter, the center has the final say; residual powers are specifically left

NEW BACKDROP FOR GOVERNANCE A training session for IAS officers at the Lal Bahadur Shastri National Academy of Administration, Mussoorie

with the union. Emerging from a bloody partition amid doubts that the country could hold together as a modern democracy, India sought to weave itself together into a cultural fabric that allowed ethnic groups minimum political autonomy.

his then must be looked upon as India’s triumph achieved by no other nation except in modern times by the US to a much more limited extent. But we would be wrong to take this triumph for granted. Today, the nation as a whole is faced with dramatic change. Governance itself finds transition accelerated both in concept and form. Governance has of course always been subject to continuing change, as is the

The Indian nation state was different from the European ones and the newly-formed countries. But this experiment now has chinks. Collusion, not coordination, rules governance. 26

July 31, 2014

nature of democratic evolution, and this has been marked from the time of Independence. From a means to perpetuate imperial rule, governance developed into a means of seeking equitable economic growth. The initial Indian political leadership when we won our freedom was westernized in its education. It was hence paternalist. The civil services were therefore an object of respect. Such service, even though not legally so, was in practice close to being hereditary. This civil service oversaw the running of a “socialist” economy: the state was omnipresent. The welfare state was seen as a necessity, but time has shown that its achievements, although many, were hardly commensurate with such expectations. Now the state finds itself in a period of transition across the board: social, economic, political. Politicization of the civil services commenced in the late 1960s, and picked up pace in the early 1970s. This was the time when the term “committed bureaucracy” came to be coined. The civil service had

been trained not to question political decision-making. With the maturing of the political element in governance that element also realized its strength. There was therefore a need for these two basic elements of governance to come together in terms of mutual understanding of functions and demands. Despite much change, however, this coming together has to this day remained largely elusive. The social change brought about by a socialist economy has impacted on the political factor. The earliest dramatic manifestation was in what was then among the leading states of the country, Tamil Nadu, and then the State of Madras. This was with the onset of the DMK, which stood for separation from the Indian mainstream. That state has largely made the political adjustments as being part of the diverse nation state of India, while jealously guarding the identity of the Tamil, which was required. We find several northern states at present in the process of making such adjustments.

ut an unfortunate ramification of these changes has been the rise of corruption and the dilution of established ethical norms. This has been compounded, not mitigated by economic change, signaled by what is described as liberalization. For the state this meant giving up control. Access to decision making by those within government is receding. With the rise of the assertiveness of business houses, entrenched means of access to ill-gotten gains by the state hierarchy is increasingly limited, with the erosion of established corruption channels. Collusion instead of coordination is now increasingly marked between politicians (because of the need for election funding), business houses, and bureaucrats. There is even gossip of bureaucrats being on sale, and we have had shocking exposes in the past years that I must admit to having left me shaken. — Excerpts from the speech given by Wajahat Habibullah at the Upendra Vajpeyi Memorial Lecture

holmertz

that “at the district level, there is the Mughal system of patwaris and tehsildars, while at the secretariat level there is a British system. Both the systems were devised to rule the country, but the time has now come to decentralize the system to go to the village level.” So, how to go about It? “What India needs is a CEO who would implement the decisions of the panchayats,” says Habibullah, who was also secretary, government of India, Ministry of Panchayati Raj (local government). Lashing out at the way the civil services is structured in India, Habibullah says the secretariat system is based on mistrust, rather than trust, and is not in keeping with the democratic polity of the nation.

AGENT OF PEACE It was due to Habibullah’s efforts that armed terrorists in control of the Hazratbal Mosque in October 1993 had surrendered

INDIA’S FIRST CIC As the country’s first chief information commissioner (CIC), it was Habibullah who had implemented the Right to Information Act in 2005 after it was passed by parliament. So what was his experience as CIC? “Initially, I found, most of the inquiries were coming from government servants seeking information on pensions and promotions, etc. Later, NGOs started filing for information from hospitals on dispensing medical treatment to people below the poverty line.” Elaborating further, he says: “In the beginning, there were very few inquiries from rural areas but thanks to the awareness spread by Doordarshan, nearly 40 percent of the inquiries are now from villagers.” IL INDIA LEGAL July 31, 2014

CONTROVERSY/ the gandhis/national herald assets

BIZARRE MATHS are sonia gandhi, rahul and some congress leaders part of a criminal conspiracy to take over a national daily with assets of up to `5,000 crore? By Vishwas Kumar

Anil Shakya

NDIAN media faced one of its worst periods between 2009 and 2011. Publications closed down, employees were fired and salaries slashed remorselessly. One was a newspaper I worked for. Within a fortnight, around 100 young journalists lost their jobs. However, a good piece of “news”

July 31, 2014

cropped up from an unexpected quarter—the Congress wished to revive and relaunch National Herald, a newspaper founded by Jawaharlal Nehru that stopped printing in 2008. Soon, all tenants of Herald House, a prime property on India’s Fleet Street— Bahadur Shah Zafar Marg—were asked to vacate and an army of workers took

over, as the building started getting repaired and repainted. We, too, took an avid interest in the goings-on. Meanwhile, some enterprising journalists even confirmed from their “political sources” that the Congress was, indeed, going to relaunch the newspaper. Some hopefuls even submitted their CVs.

THE PLAYERS AND THE CRUSADER (Top right) Sonia Gandhi; (above L-R) Rahul Gandhi, Oscar Fernandes, and Motilal Vora, the alleged conspirators; (below) BJP’s Subramanian Swamy, the one-man demolition squad. (facing page) the multi-crore Herald House

Cut to 2014. Senior BJP politician Subramanian Swamy filed a criminal complaint against Sonia Gandhi, her son Rahul and others for trying to “take over” National Herald properties worth `5,000 crore. In an ex-parte order, metropolitan magistrate Gomati Manocha agreed there was prima facie evidence to indicate a conspiracy to cheat and misappropriate National Herald properties. She issued summons on June 26, 2014, for the appearance of the members of the Gandhi family and other Congress politicians on August 7. WHAT A CONSPIRACY! Apart from Sonia and Rahul, others who were summoned included Motilal Vora, treasurer, All India Congress Committee (AICC), Oscar Fernandes, general secre-

tary, AICC, Suman Dubey, journalist, and Sam Pitroda, former chairman of the National Innovation Council. All of them are directors in Young Indian Ltd (YI), a company incorporated in 2010 and which took over the `90 crore debt of Associated Journals Limited (AJL), the publisher of National Herald and other newspapers. AJL stopped printing National Herald, Navjivan and Qaumi Awaz in 2008. Swamy accused Sonia and Rahul, and others of conspiring to cheat and misappropriate funds by just paying `50 lakh, by which YI obtained the right to take over `90 crore which AJL owed the Congress party and also its highvalue real estate. YI was incorporated on November 23, 2010 with `5 lakh as paid up capital under the Companies Act; Sonia and Rahul, owned 38 percent each in the company, while 12 percent each were held by Vora and Fernandes. In December, 2010, YI’s board passed a resolution to “own” the `90 crore debt of AJL. The company got this money as unsecured zero-interest loan—in several installments over several years—from the Congress party. AJL approved it. (As per the Election Commission, no politi-

cal party can enter into deals with a commercial enterprise, including loans.) Later, according to the complainant, AJL held a board meeting and decided that it did not have the assets or cash to repay the loan to YI. Hence, the board decided to sell out to YI for a consideration of `50 lakh. AJL became a 100 percent subsidiary of YI. In another bizarre sequence of events, the Congress party which had allegedly not demanded the repayment of the loan from AJL, wrote off the loan as “irrecoverable”. The people, who possibly took this decision within Congress, were none other than Sonia, Rahul, Vohra and Fernandes, the senior office bearers of

By merely paying `50 lakh, Young Indian Ltd, in which Sonia and Rahul Gandhi are majority owners, got ownership of National Herald, with the help from the Congress. the party who together owned 100 percent of YI. Thus, alleged Swamy, by a mere payment of `50 lakh, YI acquired ownership of AJL. The balance sheet of AJL showed it owned several real estate assets including a multi-storied building in the prime area of Delhi’s Bahadur Shah Zafar Marg. AJL also has real estate in Lucknow, Bhopal, Indore, Mumbai, Panchkula and Patna. Magistrate Manocha’s order said that while the balance sheet valued these assets at `2,000 crore, the market value may be `5,000 crore. What’s important to note is that INDIA LEGAL July 31, 2014

CONTROVERSY/ the gandhis/national herald assets

Why the case stands The following were the observations of the Metropolitan Magistrate to each of Subramanian Swamy’s allegation: Section 405 IPC: Criminal Breach of Trust What the law says The accused entrusted with property or dominion over property must (a) dishonestly misappropriate or convert it to his own; or (b) dishonestly use or dispose of that property or willfully suffer any other person to do so in violation of law. Why the case? The accused persons—Sonia Gandhi, Rahul Gandhi, Motilal Vohra, Oscar Fernandes—were key office bearers of the Congress and trustees of the funds of this party. The funds were to be utilized to advance the purposes for which the Congress was formed. As per the reply to an RTI application filed by the complainant and also as per the constitution of the Congress, these funds could not have been advanced in the form of an interest-free loan to a public limited company, namely the AJL. Further, Vohra, as director and CMD of AJL, fraudulently misrepresented that AJL had no net worth and was unable to repay the debt to the Congress. Thus, he appears to have committed criminal breach of trust on the existing shareholders of AJL, as well as against the company, said the court. Section 420 IPC: Cheating and Dishonestly Inducing Delivery of Property. What the law says The ingredients required to constitute cheating are: i) There should be fraudulent or dishonest inducement of a person by deceiving him; ii) the person so deceived should be induced to deliver any property to any person, or be intentionally induced to do or omit to do anything which he would not do and the act or omission should be one which causes or is likely to cause damage to the person induced. Why the case? By publication of objects of the Indian National Congress through the official website or otherwise, the Congress induced public persons to contribute by way of donations and membership fees.

July 31, 2014

The party also got exemption from tax. However, the office bearers of the Congress, by advancing an interest free loan to AJL, a company involved in commercial activity, appear to have defrauded those who gave donations or paid fees. Section 403 IPC: Dishonest Misappropriation of Property What the law says Whoever dishonestly misappropriates or converts to his own use any movable property, shall be punished with imprisonment for a term which may extend to two years or with fine, or both. Why the case? The aforesaid accused persons not only committed criminal breach of trust, but formed Young Indian to acquire control over the assets of AJL. Young Indian is not involved in any business activity. Thus, the rent/revenue generated by AJL properties are being dishonestly misappropriated by the directors of Young Indian. In effect, the assets of AJL are virtually filling the personal kitties of the directors of YI, who have themselves not substantially invested in the AJL. Section 120A IPC: Criminal Conspiracy What the law says To establish criminal conspiracy: 1) There must be an agreement between the persons who are alleged to conspire; 2) that the agreement should be for doing an illegal act, for doing by illegal means an act which, may not itself be illegal. Why the case? Public money appears to have been cleverly transferred to the hands of the few by creating a company (YI) for this purpose. From the complaint and the available evidence so far, it appears that YI was, in fact, created as a cloak to convert public money to personal use or as a special purpose vehicle for acquiring control over `5,000 crore worth of assets of AJL. And since all the accused persons have allegedly acted in consortium with each other to achieve the nefarious purpose, there are sufficient grounds for proceeding against all of them.

YI wasn’t interested in AJL’s media businesses. In fact, the company changed its articles of association and told the Registrar of Companies (RoC) that it would “not engage in publishing any newspaper, including the National Herald”. Therefore, the suspicion arose that YI was more interested in AJL’s real estate rather than the newspapers. And true to this mindset, YI leased Herald House, situated on Delhi’s Fleet Street (Bahadur Shah Zafar Marg) for commercial purposes. And who did it lease it to? None other than the Congress-led Government of India (GOI); Ministry of External Affairs (MEA) rented the property to open a passport office. Let us now understand the entire conspiracy, as explained by Swamy in his complaint and in which magistrate Manocha found enough evidence to issue summons to YI’s directors. Apart from the `90 crore loan, AJL had minor liabilities. Therefore, it could have easily sold a small portion of its real estate to repay liabilities. And if AJL did not wish to continue in the media business, it should have sold all the assets, repaid the Congress’ loan, and shared the remaining amount (`2,000-5,000 crore) with its 200odd shareholders. However, when AJL sold out to YI, it transferred the assets to Sonia, Rahul, Vora and Fernandes, who owned the latter company. Future investigations and court hearings will clarify the following issues. Did AJL’s board seek its shareholders’ permission before deciding to sell out to YI? Do the Gandhi family and other Congress politicians own a majority in AJL, whose 200 shareholders as per RoC’s 2011 records include Nehru (Rahul’s great grandfather), Feroze Gandhi (Rahul’s grandfather), and Vijay Lakshmi Pandit (Nehru’s sister)? Now a Finance Bill amendment says that if any income benefiting an individual will lead to cancelation of the trust’s registration. IL

INDIAA L EGAL NEW G0VERNMENT: CHARGE OF THE MODI BRIGADE

10 00 00 ` 100

May 31, M 31 014 4 June 15,2014 2014

STOR TOR ORIES RIES RIES S THAT TH THA T T COUNT COU COUNT NT NT STORIES

Inside

VERDICT 2014

BETTER DAYS ARE HERE AGAIN

BETTER DAYS Ali Baba’s ARE HERE AGAIN

ARE THEY?

Cave

([FOXVLYH DFFRXQW RI WKH RSXOHQW OLIHVW\OH DQG VHFUHW SROLWLFDO DQG FRUSRUDWH FRQQHFWLRQV RI PHDW H[SRUWHU DQG KDZDOD WUDGHU 0RLQ 4XUHVKL ZKR ZDV UDLGHG E\ ,7 DJHQF\ 14

ALSO

POLITICO-TOONS

RISING SEX ADDICTION

RNI No. UPENG/2007/25763

DEMISE OF VOTE BANKS? WHY MUSLIMS ARE NOT SCARED HOPE vs HYPE MODINAMA: BIOGRAPHIES AND COMICS HONEYMOON PERIOD: NO IFs AND BUTs GANGES CATCHES FIRE

need toBANKS? track and treat DEMISE OFthe VOTE repeat offenders WHY MUSLIMS ARE 48 NOT SCARED US IMMIGRATION FRAUD HOPE vs HYPE KRZ Á\ E\ QLJKW RSHUDWRUV GXSH PLOOLRQDLUHV MODINAMA: BIOGRAPHIES 34 AND COMICS CONTROVERSIAL PERIOD: HONEYMOON JUDICIAL APPOINTMENTS :LOO 0RGL DFFHSW *RSDO NO IFs AND BUTs 6XEUDPDQLXP DQG 5RKLQWRQ FIRE GANGES CATCHES 1DULPDQ·V HOHYDWLRQ WR Supreme Court?

POLITICO-TOONS

Lobby of Qureshi mansion

ririce on P taatitio 0 InInviti `5

G L INDIA L EGAL Ali A li Baba’sDON’T Cave Cave MESS WITH ME 50

: Internet Censorship G0VERNMENT: G0V ERNMENT: Gay Rights NEW G0VERNMENT DeathERNMENT Penalty Revisited Hanging Off With His Face! CHARGE OF Still THE MODI BRIGADE BRIGADE June 30, J 15,, 2014 15

www.indialegalonline.com

ce n Pri atio 0 Invit `5

INDIA L EGAL

` 100

STORIES THAT COUNT

Inside

SEAWARD

HO!

( O L ([ ([FOXVLYH DFFRXQW RI W I WK WKH RSXOHQW OLIHVW\OH DQG WKH RSXOHQW OLIHVW\OH DQG VH VHFUHW SROLWLFDO DQG VHFUHW SROLWLFDO DQG FR FRUSRUDWH FRQQHFWLRQV RI P HDW H[SRUWHU DQG KDZDOD PHDW H[SRUWHU DQG KDZDOD WWUDGHU 0RLQ 4XUHVKL ZKR WU DGHU 0RLQ 4XUHVKL ZKR Z DV UDLGHG E\ ,7 DJHQF\ ZDV UDLGHG E\ ,7 DJHQF\ 14

ALSO

RISING SEX ADDICTION the need to track and treat repeat offenders

US IMMIGRATION FRAUD KRZ Á\ E\ QLJKW RSHUDWRUV KRZ Á\ E\ QLJKW RSHUDWRUV GXSH PLOOLRQDLUHV

CONTROVERSIAL JUDICIAL APPOINTMENTS :LOO 0RGL DFFHSW *RSDO :LOO 0RGL DFFHSW *RSDO INDIA’S NEW NSA AJIT KUMAR DOVAL 6XEUDPDQLXP DQG 5RKLQWRQ 36 1DULPDQ·V HOHYDWLRQ WR 1DULPDQ·V HOHYDWLRQ WR Supreme Court?

BADAUN: India’s Shame Lobby of Qureshi Qur hi mansion i

www.indialegalonline.com ` 100

STORIES THAT COUNT

FOREIGN POLICY

MODI’S COWBOY

NESS’ MESS July 15, 2014

z RNI No. UPENG/2007/25763

STORIES THAT COUNT

VERDICT 2014

e Priic ioon itaatit 0 InInvit `5

RNI No. UPENG/2007/25763

INDIA L EGAL ` 100

May 31, 2014

RNI No. No UPENG/2007/25763 UPENG/2007/25763

ce n Pri atio 0 Invit `5

The Indian Ocean dictates a new strategic doctrine China looks afresh at India Musharraf exclusive: Advani derailed agreement on LoC KERALA’S DESPERATE HOUSEWIVES GOPAL SUBRAMANIUM: POLITICS OVER MERIT? NAJMA’S MUSLIMATICS ONLINE SNOOPING, UNDER SCANNER

Raghu Rai’s Two Faces Of Fate

DEFENSE/ air power

ON THE WINGS OF A PRAYER the delays in acquisitions are symptomatic of the ills plaguing the indian air force—inability to take quick decisions, lack of political will and obsolete aircraft By Vishwas Kumar

low and steady, it is said, wins the race. And the defense establishment in India seems to have taken that adage a tad too seriously. For a defense deal, said to be the mother of all such deals, and which started seven years back is yet to be concluded. In 2007, the Ministry of Defense (MoD) launched an ambitious program to boost air power by acquiring 126 Medium Multi-Role Combat Aircraft (MMRCA) at a whopping $10.24 billion (`40,000 crore). Two years after the long-drawn trial process culminated in the selection of French Rafale fighter planes manufactured by Dassault, the deal is yet to be inked. This has led to a depleted strength of 38 fighter squadrons. Compare this to China’s 84, and Pakistan’s 21. China’s People Liberation Army Air Force has roughly 550 J-7s, while the fifth generation J-20 is expected to be operational by 2018-19 and the J-31 by 2020-21. As for Pakistan, the Chinese-made JF-17s will form the backbone of its air force.

SLOTHFUL INTENT In an attempt to find out which way the wind is blowing, French foreign minister Laurent

UNI

July 31, 2014

PIB

Fabius landed in India on June 30 and met Defense/Finance Minister Arun Jaitley and discussed the MMRCA deal. However, the new government is unlikely to immediately take a decision on such a huge purchase. This is likely only when a full-fledged defense minister is appointed after the forthcoming budget session in July-August. Even if the deal is signed in 2015, the first plane will be produced in India only in 2019-20. The IAF needs an ideal mix of low, medium and high range fighter planes to tackle multiple situations. At present, it lacks low and medium range planes. Its air power situation has been further aggravated by a threedecade-long delay in indigenous development and production of LCA (Light Combat Aircraft). So, the IAF has to depend on aged Russian MiGs and induction of Sukhois. These vexatious issues were discussed

FDI in defense FDI in defense manufacturing from 26 percent to 49 percent. Ownership of such joint ventures will stay with Indian companies. `5,000 crore additional allocation for defense, taking the amount earmarked to `2,29,000 crore. Jaitley says it’s better to buy defense equipment from Indian-owned joint ventures, rather than the present practice of buying most of the equipment from 100 percent foreign-owned multinationals.

recently at a roundtable conference, “Air Power in India”, organized by Vayu, a top defense and strategic affairs magazine, and Stratpost, a defense news website, and moderated by India Legal. The panelists were Admiral Arun Prakash; Air Chief Marshal SP Tyagi; Air Marshals Harish Masand, Nirdosh Tyagi, M Matheswaran, Jimmy Bhatia and P Barbora; Vice Admiral (retd) Shekhar Sinha; Brigadier (retd) Gurmeet Kanwal; Captain PVS Satish; Major General Ashok Mehta; Air Commodore Suren Tyagi; journalist and strategic affairs expert George Verghese; and defense experts Pushpindar Singh, Saurabh Joshi and Abhijit Bhattacharya. AILING MACHINES Wreckage of an IAF MiG 21 which crashed during a routine sortie in South Kashmir in May

TESTING WATERS (Top) The Foreign Minister of France, Laurent Fabius, meeting Union Minister for Finance, Corporate Affairs and Defense Arun Jaitley in New Delhi to find out about the MMRCA deal

MOUNTAIN WARFARE Speaking at the event, Brigadier (retd) Kanwal said that India’s next war would be fought in the mountains. “Kargil, a limited war fought with Pakistan in 1999, reinINDIA LEGAL July 31, 2014

DEFENSE/ air power

Gurmeet Kanwal Brigadier (retd)

Arun Prakash Admiral (retd)

SP Tyagi Former Air Chief

“Even a war with China will first start in the mountainous regions. Land forces (the army) will have difficulty in maneuvering the high mountains. Air power is needed to destroy entrenched enemy positions so that land forces can move in.”

“The ten years of UPA-I and UPA-II were one of the worst for the armed forces— a wasted decade. By 2017, there will be a shortfall of ten fighter squadrons, even as six aged MiG-21 Bison squadrons will have to continue till 2022.”

“The public sector organizations linked to the air force, such as Hindustan Aeronautics Limited are headed by political appointees, rather than those from the IAF. We have very little role to play in running these PSUs.”

forced the importance of air power. Even a war with China will first start in the mountainous regions. My argument is simple. Land forces (the army) will have difficulty in maneuvering the high mountains surrounding our borders in the east and the west. Our enemies will always have an advantage due to topography. In such a scenario, air power will destroy entrenched enemy positions so that land forces can move in. So, air power should be augmented if we want to secure our borders. It has to be given priority.” Admiral Prakash blamed India’s political leadership for neglecting the needs of the armed forces. The last ten years of UPA-I and UPA-II, he said, were one of the worst for the armed forces and were a “wasted decade” in terms of building defense capabilities. His assessment is based on hard facts. Out of the ten years of UPA rule, AK Antony was defense minister for close to eight years, from October 2006 to May 2014. The proposal to acquire MMRCA was finalized during his tenure. Earlier, in 2001, the IAF started discussions on filling the gap between the indigenously-developed LCA and the Russian imported “heavy” SU-30 MKI. Tragically,

July 31, 2014

due to mismanagement, neither is the LCA close to completion, nor the MMRCA deal. And alarmingly, by 2017, there will be a shortfall of 10 fighter squadrons, even as six “aged” MiG-21 Bison squadrons are forced to continue till 2022. The Indian Navy will have two-three fighter squadrons by 2017-18. LACKLUSTRE LEADERSHIP The IAF, too, is to be blamed for poor leadership, Prakash said. “What stopped the IAF from taking proactive ownership of its indigenous development programs? Can our government afford costly acquisitions from foreign countries? It is said that fifth generation fighter planes, presently being developed by foreign countries, could cost `1,200 crore each. Should we buy these costly planes? Does our government has so much resource to spare,” he asked. “The IAF leadership should take ownership of all on-going projects, including the much-delayed LCA because the future lies in developing indigenous weapons and technologies,” he said. Former Air Chief Tyagi said that while the Indian Navy had ownership over most of indigenous programs, this could not be

Anil Shakya

Ajai Shukla Defense analyst

Vinod Misra Retired Secretary-Finance (MoD)

Shekhar Sinha Vice Admiral (retd)

“Our defense forces want costly weapons to fight simultaneously with China and Pakistan. We have fought one war with China in 1962 and everyone knows the result. China’s defense forces have galloped away. We need to be realistic.”

“We should acquire high-end technology to develop fighter planes, considering the future security scenario. That could be possible by acquiring them from foreign vendors and then developing them indigenously with collaborators.”

“If we purchase good technology at a high cost, it doesn’t solve the purpose. No defense force in the world gets money to build fool-proof capabilities. We need to focus on threat evaluations and prepare our capabilities accordingly.”

implemented in the IAF due to historical and other reasons. He said that public sector organizations linked to it such as Hindustan Aeronautics Limited (HAL) were headed by political appointees, rather than those from the IAF. “We have very little role to play in running the affairs of HAL and other defense PSUs,” he clarified. As for the MMRCA issue, Ajai Shukla, defense analyst and columnist, was emphatic that the acquisition process should be stopped and the deal scrapped. He said the reason was a simple cost-benefit analysis. The MMRCA project, he said, had gravely upset IAF’s budget to acquire and develop other weapons, without bringing any longterm benefits. “Our defense forces want costly weapons to fight simultaneously with China and Pakistan. We have fought one war with China in 1962 and everyone knows the result. In the meantime, China’s defense forces have galloped away. So, we have to take a realistic look at the situation,” he said. “Can our economy allow these costly acquisitions? Is there no option? These critical questions must be analyzed by the defense forces, especially the IAF,” he added.

However, Vinod Misra, secretary-finance (retd), ministry of defense, who played a key role in finalizing MMRCA’s acquisition proposal, sought to clarify matters. He said that many discussions and much planning stretching up to almost two years, had taken place before the MoD had decided to acquire the fighter planes. “In the end, we (IAF chiefs and bureaucrats) were in agreement that keeping in view the future security scenario, we needed to acquire high-end technology to develop fighter planes. That could be possible by first acquiring them from foreign vendors and then developing them indigenously with their collaborators,” he said. MMRCA VISION The MMRCA deal ensures that initially a few planes will be acquired from foreign vendors, but the bulk will be manufactured in India. Misra pointed out that in the deal, the compulsory investments by the foreign vendor in local companies during joint production facilities was 50 percent of the deal amount, as compared to the normal 30 percent. Tyagi, too, defended the MMRCA price tag. He said that for the first time, the INDIA LEGAL July 31, 2014

DEFENSE/ air power

ent is around 1.75 percent of the GDP, in comparison to 3-4 percent of the GDP that of China. Almost 80 percent of the defense budget goes into “committed liabilities” (salaries, money for deals, etc), which leaves little for new acquisitions.

PIB

LACK OF VISION The proposal to purchase MMRCA aircraft of French manufacturer Dassault is still in limbo

concept of life cycle costs (LCC) was introduced to get maximum value for the dollar spent. LCC is the ratio between the expected time that a weapon/plane will last, in comparison to the money spent on its acquisition. “We consciously made an attempt for the first time to get a costly plane, but which was good, efficient and long-lasting,” he said. The IAF’s experience with MiGs, also called “flying coffins”, had been unsatisfactory due to the large number of accidents it was involved in due to engine and mechanical failures. DETERRENCE, THE BEST POLICY Vice Admiral (retd) Shekhar Sinha suggested that India should follow the UK in its acquisition strategy, which focuses on getting value out of technology. “If we purchase good technology at a high cost, it doesn’t solve the purpose. We need a dedicated team of experts too,” explained Sinha. “We should always remember that no defense force in the world gets money to build fool-proof capabilities. What we need to focus on is threat evaluations and prepare our capabilities accordingly,” he said. “We need to build a dissuasive deterrence instead of building wholesale capabilities, which requires huge money. Can our government allocate such funds at the cost of ignoring other basic requirements like health, education, etc?” he asked. It is important, felt the experts, to enhance the defense budget, which at pres-

July 31, 2014

CRIPPLED AIR POWER Speaking of the shortfall of fighter squadrons, Pusphindar Singh said that a large number of IAF fighters were obsolete and had reached an exhaustion point in their structural limits. “Withdrawal of these aircraft is no longer a matter of choice, but a matter of necessity and safety,” he said. He summed up Indian air power’s grave crisis: force levels were reducing to alarming lows even as rivals were expanding and modernizing; the LCA program had dragged on for three decades; and the acquisition of MMRCA was floundering. The armed forces need to be far more proactive in engaging with the administration and industry and the administration itself must streamline acquisitions, keeping in mind the broader strategic picture and economic realities. Experts said that without clarity on the country’s strategic vision vis-à-vis neighbors, the defense forces were unable to project their requirements and state of preparedness. Prakash said: “I am hopeful that the new government will come out with a strategic document to end the state of permanent confusion among the armed forces about their present and future enemies. We (defense forces) implement the political leadership’s strategic vision. All our future requirements in terms of weapons, modernization, force strength and logistics are based on projected roles. If we need more engagement in world affairs, the political establishment has to provide the budget for it.” Ashok Mehta demanded that the political leadership come out with a written strategic document. “The armed forces have been asking the political leadership for strategic clarity for a long time. We have high hopes from the Modi government, which has got a huge mandate. During elections, Modi had promised that the defense forces would be taken care of. We hope he keeps his promise.” India’s security hinges on this assurance. IL

FOCUS/ sugar subsidies

IS THAT

SWEETENER

NEEDED? nda’s bailout package for sugar mills has to do with politics. it will help finance assembly elections and woo sugarcane farmers’ votes By Bhavdeep Kang

ne of the first decisions that the Narendra Modi regime took was to announce a huge bailout for the sugar sector. Ironically, one of the last announcements by the previous UPA-II regime was similar: an even higher subsidy package for sugar mills. Clearly, politics, more than economics, was at play in both the cases. The UPA government felt it could gain electoral advantages in sugar-producing states such as Maharashtra and Uttar Pradesh. The strategy flopped. The fact that Maharashtra, the largest sugar grower and manufacturer, is headed for assembly polls later this year, was seen as the prime motivation for the NDA’s generosity. An additional fact was that Akhilesh Yadav’s state government in Uttar Pradesh is at loggerheads with the sugar producers. There is a move to impose governor’s rule in the state, and force assembly elections almost three years before the scheduled

July 31, 2014

dates. Union minister Nitin Gadkari was apparently the main mover behind the recent handout. Needless to say, he owns a mill. But how do the two subsidies—`6,600 crore by UPA-II, and `4,400 crore by NDA— help the political parties. Well, the two amounts add to `11,000 crore, or the exact amount that sugar mills owed to sugarcane farmers, which is a testimony to our cockamamie sugar economy. The purpose of the payouts was to protect the farmers—the money was to be used to clear their arrears. UPA’s package was to be used for that purpose. This incentive was in addition to an earlier partial-decontrol in sugar distribution, which resulted in net savings of `2,700 crore for the sugar producers, and hefty export subsidies. NDA’s package set the same condition: pay the farmers. In both the cases, the attempt was two-fold: woo the mills to finance the elections, and to grab the farmers’ votes. BAD ECONOMICS Can a sugar factory buy raw materials on credit, not ante up and then wait for taxpayers to come to its rescue? “By law, farmers should be paid within 15 days of delivering their cane to the mills. But the latter don’t follow the rule and the state governments don’t bother to make sure they do,” says former Union Agriculture Minister Som Pal. “I can tell you that a sugar mill (owned by a well-known

business group Group) in Baghpat (UP) owes farmers `170 crore for the last two years. Can you imagine the level of distress among the farmers in the region?” he asks. Given this state of affairs across the state, somewhat belatedly, UP cracked down on recalcitrant mill owners, with arrears having breached `7,400 crore in the 2013-14 crushing season. The bulk of this—over 90 percent—was due on private mills. The state lodged FIRs against 57 sugar mills for nonpayment and issued recovery notices against 19. The sugar mills retaliated by threatening a year-long shutdown. The UP Sugar Mills Association told the state government that farmers’ expectations were unrealistic. Sugar mills suffered a loss of `3,000 crore in 201213, it claimed, because farmers were paid a higher price of `280 per quintal for the cane, although the center recommended a fair and remunerative price (FRP) of `170. State governments can overrule center’s FRP because each cane-growing and sugarproducing region may have different production and transportation costs. Although states are obliged to make up for the differences between the two prices, in case they ask mills to pay a higher price, a technical loophole allows the mills to escape it. Simultaneously, sugar prices fell. The average ex-mill price in UP slumped from `3,600 per quintal in 2012 to `2,950 the next year, or a slide of 18 percent. However, UP

mill owners’ arguments looked weak, when seen in the context of Gujarat, where mill owners paid farmers a price of `275 per quintal in 2012-13, and had no arrears. In Maharashtra the state government announced `230 as FRP, leading to widespread protests and a subsequent hike to `265. FARMERS’ RIGHTS “Why shouldn’t sugarcane farmers demand higher prices?” asks food policy analyst Devinder Sharma. After all, their costs have gone up each year. If government employees can get increases in daily allowances and hikes through

BITTER AFTER-TASTE (Top) A common sight in western UP of Sugarcane growers queueing up to supply to sugar mills, the payments for which are much delayed; (above) unloading of sugarcane at a sugar mill

INDIA LEGAL July 31, 2014

FOCUS/ sugar subsidies

Production of sugarcane & sugar

Sugar prices in June of respective years (`/Kg) Year

Delhi

Mumbai

Bangalore

2010

2011

2012

2013

2014

38*

*Price for May; June not reported’

Statistics: agricoop.nic.in *As per the 3rd Advance Estimate (2013-14) of Department of Agriculture and Cooperation, released on May 15, 2014

the pay commissions, farmers need to get higher minimum support prices (MSPs) for their agriculture produce. Unlike wheat and paddy farmers, who grow two crops a year, cane growers are paid once a year because it’s an annual crop. Sharma cites a study by Karnataka’s University of Agricultural Sciences, which concluded that the market value of sugarcane products, if properly utilized, is `40,000 per ton. Therefore, the problem is not that the farmers are overpaid, but that the mills are run inefficiently. However, the mill owners of UP want cane prices to be linked to that of sugar. The state set up a panel to look into the issue; the panel, which was to submit its report by April, 2014, missed the deadline. In 2012, the Rangarajan Committee on the rationalization of the sugar sector suggested a 70:30 revenue-sharing arrangement

NDA’s decisions on the sugar sector will have two implications: anger consumers, who will pay up higher prices, and further push up the food subsidy bill. 40

July 31, 2014

33 indiansugar.com

between the farmers and sugar mills. It said that while the FRP pricing system should be retained as a floor price to be paid to farmers upfront at the beginning of the sugar season, the final annual earnings of the mills should be shared six months later. The trouble with this approach is that FRP, like MSP in food grains, tends to be too low and does not take account of the high risks in agriculture. Farmers can suffer losses due to crop failures. Moreover, sugar prices can be extremely volatile; if the mills’ annual earnings are slim because of internal and external factors, cane growers would be in serious trouble. Besides, sugarcane is highly perishable, and the farmers have no holding capacity. Add to this the fact that mill owners are organized and prone to cartelization. Thus, there is a need to protect the farmers. At the end of the day, farmers are best served by viable mills, whether private, cooperative or state-owned. Sugar cooperatives were formed in Maharashtra to avoid the exploitation of farmers; in 1950, farmers of 44 villages in Ahmednagar set up the first cooperative sugar factory. But today, these cooperatives are highly politicized, mismanaged and as sick as the private mills. MORE INCENTIVES With the viability of the mills in mind, the NDA took another big decision: it increased the import duty on sugar from 15 percent to 40 percent. The logic was that the move will dissuade importers—Indians seem to have a preference for foreign sugar—and, therefore, lead to higher demand for domestic sugar. Retail prices moved up; share prices of listed sugar manufacturers rose in tandem as investors felt their financials will improve. While the price bump will make the sugar industry happy, the government has to worry

UNI

about two implications. One, it will make the consumers unhappy; they are already burdened with huge food inflation. Two, as stated earlier, UPA-II discontinued the levy system, which forced mills to supply sugar at a subsidized rate for distribution through Public Distribution System (PDS), or ration shops. So, while the government would buy sugar at market rate, it would supply it at a lower price to poor consumers, inflating the center’s food subsidy bill. The NDA regime also decided that 10 percent ethanol, a byproduct of molasses, produced in sugar mills, should be blended with petrol. This will enable the mills to earn extra revenues. But the oil companies have to agree. “Opening up the sector fully could be the answer. Let the market decide the prices of cane and sugar”, advises Alok Sinha, former chairman of Food Corporation of India. Obviously, he adds that there is a simultaneous need for an independent sugar sector regulator, which can protect farmers from cartelization. The government has to ensure farmers’ remuneration, viability of the mills, and availability of sugar at a reasonable price in the retail market. Is there a way to keep all the stakehold-

ers happy? If liquor baron Ponty Chadhha was still alive, he could have come up with an answer. Despite the controversies that engulfed him, he owned highly-profitable sugar mills in UP and Punjab, which also produced 30 MW of power each from cogeneration plants that used bagasse, a byproduct of the mills, as fuel. He produced alcohol from molasses, although his distillery was sealed in 2012 for violating pollution norms. If it is serious about the health of the sugar industry, the government has to formulate a policy that forces the sugar mills to become viable. One of the ways is diversification of their products, like Chadhha did. But since banks are reluctant to lend money to this sector, the solution may lie in the Sugar Development Fund. The government has to keep a sharp eye on the private mill owners, so that the latter don’t indulge in gold-plating of their projects to siphon off money, and renege on payments. Efficiency rather than subsidy is the only way forward. IL

GROWERS’ PLIGHT (Top) Farmers in Belgaum, Karnataka demonstrate in front of the collectors office demanding pending payment for sugarcane in May 2014; (above) Sugarcane farmers’ protest escalated in western UP in May-June this year. INDIA LEGAL July 31, 2014

GLOBAL TRENDS/ nsa /spying

AND THEM america’s nsa covertly and overtly used other intelligence agencies, global tech firms, and agents to snoop on the entire world By Alam Srinivas

NE hundred and ninety three countries (including India), or almost all the nations that exist today! One hundred and twenty two global leaders, including German Chancellor Angela Merkel, presidents of Syria, Malaysia, Peru and Colombia, and prime minister of Ukraine! Political parties and right-wing organizations such as India’s Bharatiya Janata Party, Pakistan People’s Party, Egyptian Muslim Brotherhood and National Salvation Front. Multilateral agencies such as the United Nations, World Bank, Atomic Energy Agency, European Union, Asian Development Bank, and League of Arab States. In an Orwellian, almost surrealistic, kind of mindset, world’s “biggest brother”,

July 31, 2014

Anthony Lawrence

America’s National Security Agency (NSA), snooped and tapped on all the above individuals, nations and institutions, apart from millions of ordinary citizens across the world. When Edward Snowden, the agency’s whistleblower, released thousands of documents that revealed the expanse of the surveillance, it shocked the world. Leaders were aghast; the NSA, it seemed, had no respect for friends and went after the enemies. When the Washington Post wrote about NSA’s bid to keep a tab on the BJP, the Narendra Modi regime responded with anger. An official told a newspaper that New Delhi considered it “highly objectionable”. External Affairs Minister Sushma Swaraj raised the issue with the American envoy in New Delhi. Although President Barack Obama invited Modi to the US after he became the prime minister, America had earlier refused to issue a tourist or any other visa

to the latter after the 2002 Gujarat riots. As the German investigative magazine, Der Spiegel, wrote in its several pieces on Snowden-NSA disclosures: “The agency can intercept huge amount of emails, text messages, and phone conversations. The NSA even monitored the mobile telephone of German Chancellor Angela Merkel.” The worst was that most of the countries’ intelligence agencies, including Ger-many, actively helped the NSA to do so. “Snowden documents also indicate that Germany’s foreign intelligence agency, the BND, and its domestic intelligence agency, the Bfv, work closely with the NSA in sites around Germany,” it said. The UK’s electronic surveillance and security agency, GCHQ, went up a step further. According to a report in The Guardian, it had its own covert operation to eavesdrop on digital data, which was set up by the NSA. Both GCHQ and NSA shared each other’s data. Programs like Prism and Tempora, developed by these agencies, allowed them to access the systems (and social networking sites) of nine of the world’s biggest internet companies such as Google, Facebook, Microsoft, Apple, Yahoo and Skype. NSA acknowledged the existence of Prism, dubbed it “one of the most valuable, unique and productive accesses”, and claimed that the service was made available to other intelligence organizations. “Thanks to changes to US surveillance law… Prism was established in December 2007 to provide in-depth surveillance on live communications and stored information about foreigners overseas,” said The Guardian.

ome of the technology firms, whose names cropped up in Prism, said that they did not allow NSA to pro-actively access data from their systems, but did comply with the US laws when asked for specific data. In a statement, after Snowden’s revelations, Google said that “it cared deeply about the security of our users’ data. We disclose user data to government in accordance with

German agencies allowed NSA to set up snooping sites. Britain’s GCHQ worked closely with US’ “big brother”. Google and Microsoft cooperated with NSA. the law….” It added that the company, contrary to allegations, “does not have a back door for the government to access private user data.” Others like Apple maintained that they had no knowledge of Prism or any other NSA’s programs. However, documents prove that some of the tech companies like Microsoft may have provided NSA with unbridled access to their systems. For example, NSA claimed that “for Prism collection against Hotmail, Live, and Outlook.com emails will be unaffected because Prism collects this data prior to encryption.” These services are owned by Microsoft, but the company reiterated it provided data as per the law. NSA documents, said The Guardian, showed that it used both illegal and collaborative methods to collect private internet data. For example, it used supercomputers to break encryptions through “brute force”, and made a breakthrough in 2010. It spent $250 million to work with technology firms to “covertly influence” their product designs. Britain GCHQ has been working to develop ways into encrypted traffic on the “big four” service providers named as Hotmail, Google, Yahoo and Facebook. However, the NSA and US administration support Prism and other programs. One of the officials said that “the program is subject to oversight by the foreign intelligence surveillance court, the (US) executive and Congress. It involves extensive procedures, specifically approved by the court, to ensure that only non-US persons outside the US are targeted, and that minimize(s) the acquisition, retention and dissemination of incidentally acquired information about US persons.” James Clapper, the US Director of National Intelligence, claimed that these programs “are used to protect our nation from a wide variety of threats.” INDIA LEGAL July 31, 2014

GLOBAL TRENDS/ nsa /spying The NSA and GCHQ have jointly operated a program to intercept data from Yahoo and Google networks.

The

NSA Revelations

A British Program to bulk collect images from Yahoo webcam chart: “It would appear that a surprising number of people use webcam conversations to show intimate parts of their body to the other person.”

The NSA tested a technique for using drones to map "the Wi-Fi fingerprint of nearly every major town in Yemen."

Wellspring Optic Nerve

NSA and GCHQ efforts to intercept information transmitted by phone apps, including Angry Birds.

VictoryDance Angry Birds

Swedish-American surveillance of Russia

Honey Traps

Hacking Angela Merkel

The NSA targeted German Chancellor Angela Merkel’s cellphone.

Graphics: Lalit Khitoliya

July 31, 2014

A Swedish-American effort to spy on Russian leadership.

HappyFoot

LinkedIn Hack

A GCHQ program to monitor hotel reservations for “governmental hard targets.”

A network of active command and control servers around the world that can be used for “industrial scale exploitation.”

Turbine

An NSA effort to use Web cookies and data from phone apps to identify users’ devices and physical locations.

Engineers at a Belgian telcom were infected with malware, via a technique called QuantumInsert, when they pulled up their LinkedIn profiles.

Dishfire

An NSA program to collect images from emails for facial recognition.

FOREIGN

This is a plot of the USA’s National Security Agency (NSA) programs revealed in the past year, according to whether they are bulk or targeted, and whether the targets of surveillance are foreign or domestic. Most of the programs fall squarely into the agency’s stated mission of foreign surveillance, but some— particularly those that are both domestic and broad-sweeping —are more controversial.

An NSA program to collect up to 200 million text messages a day worldwide.

Muscular

Royal Concierge

A British spy effort to conduct covert Internet investigations, including sexual “honey-traps.”

The Smurf programs get inside iPhones and Android devices, turning on microphones, tracking location, and managing power.

NoseySmurf, TrackerSmurf, DreamySmurf, ParanoidSmurf

An NSA effort to collect hundreds of millions of contact lists from email and instant messaging accounts.

The NSA collected 5 billion records a day of cellphone locations worldwide.

A program, ended in 2011, to sweep up domestic Internet metadata such as the To and From fields in emails.

BULK Tracfin amasses gigabytes of data about credit card purchases.

Co-Traveler/FASCIA

Internet Metadata

Buddy List, Address Book Spying Tracfin

The Prism program collects data from the servers of US technology companies.

Tapping Underseas Cables A British effort to monitor YouTube video views, URLs “liked” on Facebook and Blogger visits.

Squeaky Dolphin

Phone Metadata

Prism

Turmoil A large network of clandestine surveillance “sensors” to collect data from satellites, cables, and microwave communications around the world.

Cellphone Location Test

Cracking cellphone encryption

In 2010 and 2011, the NSA tested bulk collection of location data from Americans cellphones.

The NSA has the capability to defeat a widely-used cellphone encryption technology.

The Upstream program collects communications transiting the Internet via commercial partners codenamed Fairview, Stormbrew, Blarney and Oakstar.

50,000 implants ANT catalog Various techniques—with names like IronChef and DropoutJeep—used to inject surveillance software into Apple, Cisco, Dell and other products.

Gilgamesh

Upstream

The wellknown and controversial program to collect phone call recordsaka metadata of nearly all Americans.

DOMESTIC

An NSA map of 50,000 computers worldwide it has implanted with surveillance malware.

Companies – including BT, Vodafone, and Verizon Business – GCHQ access to their underseas cables.

Monitoring Privacy Software The NSA collected information about users of privacy software including visitors to two Massachusetts Institute of Technology computers.

An NSA program to geolocate people’s SIM cards via Predator drones. The Egotistical animal programs are techniques to track users of Tor anonymizing software.

EgotisticalGoat and EgotisticalGiraffe Source: ACLU, ProPublica

TARGETED

INDIA LEGAL July 31, 2014

PROBE/ money laundering/gem traders

DIAMONDS AREN’T FOR EVER

N the 1990s and 2000s, ethnic, tribal and religious conflicts in Africa led to the booming trade in “blood diamonds”, which were extracted by militant groups in the continent and sold globally at cheap rates to finance the purchase of weapons. The global financial crisis of 2008 led to a new phenomenon, “paper diamonds”, which existed only on paper but were used by traders to get loans from banks. As the crisis deepened, the merchants found it difficult to repay the loans; some siphoned off the money through shell companies. One of the biggest defaulters was JB Diamonds, once the largest Indian exporter. Owned by Jivrajbhai Surani, the group owes `800 crore to the State Bank of India and another `500 crore to Hong Kong-based banks. In fact, the Hong Kong authorities alleged that the Suranis had funneled the money out of the country to their personally-owned companies and bank accounts. When one of the group’s main offshoot in Hong Kong, Sugem, was declared bankrupt in 2010, the bankruptcy trustees could not recover the money and alleged that it was laundered to Dubai, where one of the family member lives. An investigation by the bankruptcy administrator, which looked at the Suranis’ Hong Kong businesses and global link-

July 31, 2014

Graphics: Anthony Lawrence

the surani-owned jb group case points to a corrupt system post-2008 global crisis, wherein indian diamond merchants routed bank funds into shell companies and personal accounts By Vishwas Kumar

ages, revealed that lenders of Sugem suffered a loss of $68 million. This included the $30 million loan from the Antwerp Diamond Bank (ADB). The report concluded that “notional losses” from Suranis’ operations “could reach a maximum of $160 million”. The investigators felt that the Suranis indulged in “well-planned fraudulent transactions and even money laundering activities”, which involved Sugem and dozens of firms, owned directly or indirectly by the family. Systemic schemes were designed to maintain the “maximum borrowing from ADB”, and business arrangements were made to “hideaway” and “ring-fence” Sugem’s and-

personal assets from the creditors. Most transactions took place in the months before Sugem filed for bankruptcy. For example, in the second half of 2009, huge funds passed through its bank accounts, which were later red flagged by the bankruptcy administrator. The flow of funds through the accounts peaked at $80 million a month in September 2009, compared to the average monthly turnover of $10.6 million between 2007 and 2009. These, said the report, were signs of money laundering. On a single day, December 10, 2009, deals worth $16.9 million were signed with six Dubai-based firms, which were possibly connected to the Suranis. The investigators felt these were “unusual transactions” aimed to divert Sugem’s assets “in anticipation of the appointment of the receivers by ADB”. Suspiciously, ever since Sugem was adjudged bankrupt, its owner, Bhupendra Jivrajbhai Surani, one of the two sons of Jivrajbhai Surani, frequently travelled to Dubai. Most of the over $70 million of trade

LOST GLITTER Jivrajbhai Surani with his younger son Bhupendra

INDIA LEGAL July 31, 2014

PROBE/ money laundering/gem traders

the same or similar contact details, and some of these vendors were operating from residential premises previously owned by (Bhupendra) Surani,” said the report. One of Sugem’s rough diamond suppliers was the India-based JB Diamonds, owned by Bhupendra’s father. In the three months before Sugem’s receivership, the company sold diamonds worth $11.4 million back to JB Diamonds. Virak Exports, which received HK $19.9 million from Sugem on November 20, 2009, paid the amount three days later to Cosom, which was Sugem’s customer. Other transactions between Cosmo and Sugem resulted in the payment of $13.8 million by the former. Cosmo was owned and controlled by Sugem’s employee.

HEADY DAYS Bhupendra with his wife Varsha

debts, i.e. receivables from firms to whom the diamonds were sold, and “other receivables” were not supported by “proper documents”. In fact, the investigators felt that the bulk of the “other receivables” seemed “commercially unjustified” and could be mere accounting entries to fool the receivers.

etween February 27 and December 29, 2009, Sugem inked suspicious deals with 11 Hong Kong-based vendors. The former employees and directors of the company signed the invoices on behalf of the latter entities, which supplied the diamonds. “Many of these vendors were apparently owned by the employees of Sugem with

JB Diamonds owes `800 crore to SBI and `500 crore to Hong Kong-based banks. It seems a portion of the money was channelized to personal accounts and Dubai firms. 48

July 31, 2014

ccording to the investigators, these deals were devised to achieve several objectives. In some cases, like CosmoSugem ones, the idea was “to achieve some form of circular cash flow movement from various ‘vendors’ back to Sugem for servicing bank loans”. In the Dubai and JB Diamonds transactions, money was siphoned off from Hong Kong. The agreements with local firms, owned by former employees and directors, were created to show higher revenues, which enabled Sugem to borrow more money from ADB and other creditors. The JB Diamonds Group, named after its two founders—the main partner Jivrajbhai Surani and Bhagwan Kukadia—was founded in 1965. Surani’s ancestors were farmers, who hailed from Bhavnagar's Dharuka village in the Saurashtra district of Gujarat. Popularly known as Jivrajbhai Dharukawala, he migrated to Surat at the age of 17, and met Kukadia. Together, they pumped in `1,000 and established themselves in the diamond hub of Varachha, Surat. By the 1990s, JB Diamonds was among the top diamond exporters in the world. In 1993, Jivrajbhai’s elder son, Jitender, moved to Hong Kong. Eight years later, his younger son, Bhupendra, joined his brother, and took over the businesses when Jitender decided to go to USA to set up an independent business. At its peak, in 2007, the group’s valuation was $2-3 billion, its annual turnover was `10,000 crore, it employed 1,800 people, and

Illegal fund flow A graphic account of how the money and diamonds travelled

U wh ses ich thi en s tra tai de ls it to s to h hig ow he hi In r A gh l loa ieu DB er r ns o f loa eve of hi $3 ghe ns nue 0 rr s; m ev n en ue s,

was a member of the prestigious Diamond Trading Corporation, which regulates most of the global trade. In the 2000s, Bhupendra dreamt of expanding the business to other sectors. He wanted to establish a global conglomerate with interests in real estate, hospitality, mining, and oil and gas, apart from diamonds. The group announced huge investments in the three emerging markets—India, China and the Middle East. In 2006 and 2007, the group held press conferences in India, Dubai and Hong Kong, and announced grandiose plans—a 60-storey tower in Dubai, a land bank of over 20 million square feet for property development with a value of $440 million in India, and projects worth $20 million in Indonesia. The group said it would acquire land in Goa to erect India’s first Sofitel hotel. It purchased the 40-room Coconut Grove Hotel in the same state. In 2007, Jatin Chutke, then the group’s vice president for corporate affairs, said that the Suranis would ink deals worth `10-15 billion in the mining and hospitality sectors in India. After he met the then minister of state for finance Pawan Bansal and finance secretary Vinod Rai, Chutke said: “We're conducting due diligence for acquiring iron ore, bauxite and limestone mines in Karnataka, Rajasthan, Maharashtra, Gujarat and Goa and will also set up a five-star hotel at Goa. At a later stage, we will look at Jharkhand and Chhattisgarh for mining operations.” He claimed that the group had acquired a coal mine in China, which gave it access to over 800 million tons of coal, on a 30-year lease. Further, it hoped to set up a coal-tomethanol refinery in China, which would be operational by late 2008. He added that the Suranis had mining rights for iron ore, coal, bauxite and gold in Indonesia, Angola and Tanzania, and were building office complexes and hotels in Dubai and Oman. The first sign that the Suranis were spending beyond their means came in 2007. Bhupendra, flying high on his dreams, took a Citibank loan to buy a second-hand, 15-seater Gulfstream jet for `80 crore. “One of his advisors told him that if he wanted to do business in India, he had to flaunt his

ANTWERP (ADB)

HONG KONG

Sugem procures diamonds from 11 vendors Sugem buys rough diamonds from the firm

SUGEM

JB DIAMONDS

Deals worth $16.9 mn inked with 6 firms

Sugem sell back rough diamonds worth $11.4 mn Pays $13.8 mn in several transactions

Sugem pays $2.57 mn for rough diamonds

COSMO

VIRAK

Transfers $2.57 mn after 3 days

DUBAI

Deals used to siphon off money from Hong Kong

PERSONAL ACCOUNTS

wealth to woo politicians and bureaucrats. So, he acquired the Gulfstream and spent an equivalent amount in repairs,” reminisces a former employee. The next year, the younger son purchased a limited-edition Maserati, an Italian car that cost `1-2 crore.

ronically, the Gulfstream landed the Suranis in trouble. After the global financial crisis of 2008, Bhupendra was unable to repay the $12.8 million loan to Citibank; the bank filed a case in Hong Kong to recover the money. In September 2009, Sugem filed for bankruptcy; it was put under a receiver in January 2010. The bankruptcy led to many other murky disclosures. Back in India, his father, Jivrajbhai, lost his financial and political clout. Years ago, he had entered politics and was close to former Gujarat chief minister Keshubhai Patel. He became Gujarat BJP’s vice-president in 1998. However, when Keshubhai was sidelined in 2001, Jivrajbhai was out of favor. In 2007, he joined Congress at the behest of his colleague, Shankarsinh Vaghela; but the Congress never came to power in the state. Jivrajbhai admitted to a newspaper: “I haven't seen such a hard time during my four decades in this business. There is hardly any demand and we have had to lay-off 50 percent of our staff.” The Indian income tax department raided the group in 2010. Now with both Indian and foreign banks after them, the Suranis may lose their diamonds, businesses and respect. IL

LEGACY OF SHAME Bhupendra with his son Parth

INDIA LEGAL July 31, 2014

PROPERTY/ builder flats/quality

OWNER’S PRIDE? realtors promise heaven but when a buyer moves into his dream flat, he finds that the builder has actually cheated him in several ways. one needs to become assertive and opt for legal recourse By Ritu Goyal Harish

URING the realty boom a decade ago, as the demand for urban housing increased, builders and developers in metros and Tier-I cities rose up to the challenge. Not only did they build apartments, they reinvented themselves to cater to the need of aspirational homebuyers. Projects and apartments became fancier— residential complexes came with clubhouses, gymnasiums, swimming pools, gardens, even Spas and jogging tracks. Soon, the buyers were spoilt for choices. The lure of a housing complex, replete with desired amenities, became overpowering and projects that sold as self-sustaining units became popular. As the market turned bad—especially after 2008—the bubble began to burst. Buyers realized that builders adopted unfair trade practices that hurt their interests. Complexes were not based on plans approved by the local civic bodies, promises related to amenities were not kept, there were delays in giving possession and conveying of the property, and homes were beset with bad construction and sub-standard materials. In addition, the realtors cheated on per square foot (PSF) related to carpet, built-up and super built-up areas. Owners were charged additional amounts for parking spaces (which is illegal in Maharashtra). The list of grievances of the buyers continued to rise over the years. Their woes got accumulated and litigations followed.

July 31, 2014

Sandeep Raj, 34, a software professional from Pune, bought his dream apartment in 2006 after much deliberation. Indeed, he liked the project so much that he convinced his UKbased sister to purchase a flat in the same housing project. When he got the possession of his threebedroom apartment two years later, he was in for a rude shock. There were construction flaws, which included slanted beams, lowheight ceilings and damaged sanitary. When the builder did not respond to his complaints, he approached the District Consumer Court in Pune. He was not alone; among the 23,000 cases filed in court, over 20 percent pertained to housing cases against builders. ALL THAT SPARKLE One of his problems was about the brochures and promotional materials that are used to sell dreams to the potential buyers. Most often, the actual plans vary from the brochures, and the customer gets to know about it only after the possession. “Builders have unique ways to cheat you. At the design stage, they show you the frills that are not feasible, like elevated gardens. When you move into your home, they say, ‘sorry, the design was not approved by the fire department’. This is common,” says Sandeep. Builders charge a “lifetime maintenance” fee but by the time the society or the complex is built, it is exhausted. They serve you with bloated bills for expenses such as 24-hour power back-up, 24-hour water supply, and maintenance of common amenities, which the residents have to accept. Often, the buyers are not automatic members of club house, gymnasium, and swimming pool. They have to buy the memberships; these amenities were earlier shown as part of the project, but later given to third parties. Worse, builders add a discreet clause that states that common amenities (for which the buyers paid a premium) can never be

Besides bad construction, realtors cheat on carpet, built-up and super built-up areas. They lure with frills like terrace garden, without civic agencies’ approval. owned by the residents’ welfare association, and will be in the control of the builder. A few agreements state that while the buyers are free members of the pool and club, they will have to pay for “using” them. CUTTING CORNERS Ravi Karandeekar, a real estate watcher in Pune, explains: “Builders cheat by not giving what they promise. Buyers are victimized and feel that they have become prisoners of the developers.” Adds Sandeep: “The builders use common spaces for transformers (a requirement of the electricity board that cannot be denied), which is never mentioned in the builders’ brochures. The problem is that for irregularities in construction, the builder has to pay a miniscule fine to the civic bodies.” For example, the ceiling heights are reduced by several inches. In a 10-storey building, a reduction by 8-9 inches results in

huge financial savings. Most buyers do not notice them. Therefore, buyers need to be careful about these issues. “Buyers should look at one of the earlier projects of the builder and talk to residents. They should also retain a copy of the brochure,” suggests Sudhakar Velankar, founder of Grahak Hitavardhini, a Pune-based organization. “Buyers must become more assertive when faced with such contentious situations,” he adds. Sandeep, who won a substantial compensation from the district forum, but who opted for an out-of-court settlement when the case went to the Supreme Court, spent about three years fighting for his rights. “Builders take the buyer for granted. The laws are in place, all we have to do is to take up the fight,” he says. “No one in my complex was willing to fight with the builder although their apartments had the same issues. There was a lack of motivation and collective responsibility,” he adds. IL INDIA LEGAL July 31, 2014

RIGHTS/ adoption rules

BEYOND BIOLOGICAL BONDS sc allows non-hindu families to adopt a child, raising hackles of religious organizations but giving a new hope to childless parents and orphaned children By Anubha Rastogi

HEN Sushmita Sen decided to adopt a child almost two decades ago, many Indian singles and couples wondered: Can we also adopt without going through a maze of bureaucracy and paperwork? The answer is: yes and no. Indian law allows adoption, but also imposes several caveats that donâ&#x20AC;&#x2122;t make it easy. For years, the Hindu Adoptions and Maintenance Act, 1956 (HAMA) was the only law on adoption. But it was limited to adoption of, and by, Hindus, Sikhs, Buddhists and Jains; and people from other religions, including Muslims, Christians and Jews, had to turn to the Guardians and Wards Act, 1890 (GAWA). Under GAWA, people who adopted had the legal status of guardians and not the parents, and the child was only a ward. Thus, the adopted child in, say, a Muslim or a Christian family, did not enjoy equal inheritance rights and other benefits, as an adopted child in a Hindu family did.

Illustrations: Anthony Lawrence

July 31, 2014

Eight years ago, social activist Shabnam Hashmi challenged the law on behalf of nonHindu children and parents, hit by the legislative vacuum. Her petition sought the right to adopt for every person irrespective of religion and sex, and the right of every child to be adopted irrespective of religion and sex. Hashmi went to court to be legally recognised as the parent of her adopted daughter, who, under the law, was regarded as her ward. She was shown as a ward in the service books of her husband Gauhar Raza, a scientist working with the government of India, and was, therefore, not entitled to the same benefits as other family members. Hashmi was determined to remove this anomaly.

ashmi finally has a reason to rejoice. In February, the Supreme Court gave Muslims and other non-Hindu communities the right to legally adopt a child under the amended Juvenile Justice (Care and Protection) Act, 2000. This law provides for adoption as one of the means of rehabilitating children in need of care and protection. Even though it was enacted in 2000 and amended in 2006, the rules for its implementation were framed in 2007. Interestingly, the All India Muslim Personal Law Board questioned the act on the ground that Islamic law did not put an adopted child on a par with a biological child. The board also wanted the Child Welfare Committees under the Juvenile Justice Act to ensure that Islamic tenets were considered while giving a Muslim child for adoption. The Supreme Court said that with the amendment to the Juvenile Justice Act to include aspects of adoption, a legislative vacuum had been filled. The apex court also observed that the new rules on adoption were in line with guidelines issued by the Central Adoption Resource Agency (CARA) in 2006 and 2011. The government, on its part, informed the Supreme Court that adoption, irrespective of religion and sex, was already taking place under the provisions of the Juvenile Justice Act. Between January 2013 and September 2013 itself, 19,884 adoptions had taken place. On the submissions made by the All India

The delay factor ACCORDING to the Central Adoption Resource Authority (CARA) 19,136 were adopted in the four-year period between 2010 and 2013. Maharashtra has the highest number of children adopted, with 4,397 finding homes in the past four years. The figures for other states were: Tamil Nadu (1,892), West Bengal (1,719), Andhra Pradesh (1,547) and Karnataka (1,477). The lowest number of adoptions were reported from Uttarakhand, Himachal Pradesh and the North-eastern statesâ&#x20AC;&#x201D; fewer than 25 each. One of the major reasons for the low number of adoption of children is delay in procedure, as admitted by a senior official of CARA.

Muslim Personal Law Board, the Supreme Court observed that the Juvenile Justice Act was an enabling and optional legislation, and, therefore, could not be bound by the rules of personal laws. The court added that the act was a small step towards the mandate of Article 44 of the constitution seeking a Uniform Civil Code, and observed that at present it would not be advisable to direct the central government to look into developing a secular law like the Special Marriage Act, as the country was not ready for a healthy discourse on the uniform civil code. The court reiterated that the Juvenile Justice Act filled the vacuum and at present that was sufficient. However, the court rejected Hashmiâ&#x20AC;&#x2122;s plea for adoption to be considered a fundamental right even though it will be in the process of constant evolution with the right to life. The elevation of the right to adopt or be adopted would have to wait until conflicting thought processes had dissipated. The All India Muslim Personal Law Board had opposed the appeal on the ground that Muslim Personal Law does not recognise adoption, but it does not prohibit a childless couple from taking care of and protecting a child with emotional and material support. The court felt that an enabling legislation that ensured adoption to take place, irrespective of religion and sex, was sufficient at this stage. A significant step towards a more humane society. (Turn page for story on the agony of lost motherhood) INDIA LEGAL July 31, 2014

RIGHTS/ adoption rules/ diary

(the anguish of a woman who wanted to adopt a child) I was 35 years old, five years into my marriage (my second) and with no children to call my own. My husband, single child of divorced parents, who wasn’t–still isn’t– fond of kids (perhaps, bearing scars of his own childhood) finally gave in to my desire and we decided to register with one of the top adoption agencies in Delhi. I will admit at the outset that between my husband and me, I was more proactive when it came to organizing meetings with the adoption officer, getting the paperwork in order and essentially finding out the basic procedure for adoption. My husband said he was supportive of adoption for the “sake of my happiness”. Given his background, I should have guessed that having children for my sake would not be enough–in time, it would be one of the cruelest realities that would haunt me for a lifetime. At that time, however, simply getting a “yes” from him was enough to look forward to a lifelong commitment of joy, nurturing and the responsibility of raising a beautiful girl child who was already out there in the world, waiting to come home. What got served eventually, after we signed up with the adoption agency, was a suicidal cocktail of depression, spiked heavily with a long waiting time–days of depression wondering just how long the adoption process takes; unanswered calls; ambiguous statements by adoption officers to call up “a month later” and then “another month” and then “six months later”. Here’s what happened after we submitted our papers to the relevant agency after completing–rather, starting–our legal process in November 2011. Nothing moved for three months and we had absolutely zero idea of what–or what not–to expect. There was no communication from the agency. And suddenly one day in February 2012, we were asked to attend a “counseling” session, along with a few other “adoption-expectant” parents, the next day! I understood (having gone through Google search and spo-

July 31, 2014

ken to some other friends, who had adopted children) that along with a counseling session, a home visit by the adoption officer was also mandatory. This appointment was fixed for mid-March, 2012. Twenty-four hours before the D-day, however, the meeting was cancelled and was rescheduled for mid-April. What I experienced with the agency time and again was communication breakdown, unanswered calls, zero explanation about the process, and the sound of my broken heart. Post the home visit, we were once again left in a lurch. Either my calls went unanswered or there were ambiguous statements (“we’ll call”; “don’t call”; “it’s a long wait”; “there are no kids right now”; “we can’t help it”; “we have no news”). All this while, I didn’t know how to explain to friends and family why things were so slow on the adoption front simply because I was not receiving any answers from the adoption agency. In the meantime, to “prepare” for the arrival of the baby (we had requested for a healthy, 3-month-old baby girl), I left my full-time job (after a decade of working as

a journalist) to freelance. I started conducting craft workshops with children at home and essentially started living a life that I always wanted. But two years later, when I got tired of simply waiting and staring at blank walls of my home, I got back to working in an office in the midst of people. After nearly two-and-a-half years, I got a call (for the first time, the agency called on its own) and I was informed that twin baby girls, one-year-olds, had been identified for us. My first thought (after “moving on” to a better job profile) was that of shock. In all honesty, after two-and-ahalf years, I felt like I had to suddenly make a life-altering decision. The phone call had changed my life. After the initial few minutes, however, I had a beaming smile on my face. I knew this was what I wanted the most. Back home, my husband threw a fit and, to cut a long story short, made it clear that he was unhappy with the idea. “I’m not prepared for one, two is too much to ask,” he said. My mother-in-law, after supporting me initially, dissuaded me. So did my parents (they had seen my husband’s negative reaction). But I was adamant on adopting the children. We met the children in the adoption center (they looked so much like me) and I hoped my husband would come to terms with it. He didn’t and months later he would confess to me that he “felt nothing looking at them”. On her part, the adoption officer immediately dissuaded me from adopting the twins but affirmed that we had the first right of refusal. I bought more time, stressing my husband was having the initial jitters. Week after week I begged the very patient adoption officer to wait, as I was “working” on him to change his mind. Four months down the line, after fighting, begging, screaming, crying, rebelling, struggling, threatening suicide, sweettalking, even seducing, I finally gave up my fight for motherhood. In the interim, thinking that I could bring about a change by altering my mind and environment, I had been buying clothes, toys, taking the kids for their health checkup, preparing their room. All my friends, after all, had done all this when they had kids. Only, they had their husbands to support them. I was all alone. It’s been five months since I went to the adoption agency on that cold, winter morning in Delhi. My husband had to come along with me and together we told the adoption officer that “we will let this opportunity pass”. We handed over the bagful of clothes, milk bottles,

sippers, accessories and toys that I’d bought for the babies, along with two pairs of silver bangles that I’d purchased for them. I left the health reports with the officer and requested everything be given away to the lucky family that would eventually adopt them. I refused to see them one last time for fear of breaking down the n-th time, and when the officer said she was sorry for me, all I could say was “they deserve much better parents.” On her part, the adoption officer admitted that our “unique case” showed that ticking the boxes of one home visit, one counseling session and simply completing paperwork is not enough. “We should have done more,” she said, sounding genuinely apologetic. Looking back, I wish I’d kept up better communication with my husband through that phase; I wish I’d continued sharing my dreams with my husband; I wish I’d seen his denial. And though I cannot blame anyone, I so wish there had been more communication with the adoption agency on a more regular basis, complete with many more counseling sessions with experts, more home visits than just one during the “waiting” phase. I wish we had been not a “file” but a real, living, imperfect couple in the eyes of the adoption agency that could have seen at the outset some fatal signs and given us pep talks. Instead of two beautiful babies, I cradle in my arms today broken dreams of motherhood, a shabby relationship, an unsteady future. I’ve never had the guts to call up the agency after the episode; the agency doesn’t call me either. The twins have been adopted. “A well-off family in Delhi”, as the officer informed my husband one last time before the calls completely stopped. I’d like to believe I have moved on but I still feel the gentle tug of their little bodies against my chest. I still hear their wails–a faint echo of the time when they were getting their health checkups–and I still hear their laughter when they were comfortable in my arms during that brief time. I cry when I’m alone and tell nobody. My friend says I carry the symptoms of a woman who has had a miscarriage. I feel it was abortion because I took the decision to not have them in my life anymore. As a “mother”, I’m happy the twins are in a better, more secure, place. But as a woman, I'll never forgive myself for being weak, buckling under pressure and giving up two very beautiful children. Archana Sharma INDIA LEGAL July 31, 2014

FOCUS/ sanitation

BOTTOM OF THE

HEAP

the deplorable status of dalits is borne out by the abysmal number of toilets in their households By Vikas Pathak

S the rest of the world has marched into the 21st century, India, a country of over a billion people, is still grappling with basic problems of sanitation. This, after 67 years of Independence. The lack of toilets is endemic in many rural households and has spiked crimes rates in various states, as rapes are often perpetuated on women when they go out of their homes to relieve themselves. The rape and subsequent murder of two cousins in Katra Sadatganj village in Badaun district of Uttar Pradesh in June is an apt example. But, like everything else in India, this too is mired in caste and class distinctions; it is the socially backward sections that are most deprived of this basic right—a proper toilet in their homes. This leads the deprived women to trudge to fields far away from their homes after

PRIMITIVE LIFE No of toilets in 440 lakh dalit households in India: less than 150 lakh

No of toilets in 330 lakh rural dalit households: 75 lakh

No of toilets in 130 lakh slum households: 90 lakh Source: Census 2011

July 31, 2014

dark and become easy targets for predators and rapists. While Prime Minister Narendra Modi promised universal sanitation in his election speeches and even said that toilets need to be prioritized over temples, the sheer magnitude of the problem is truely overwhelming. While the constitution abolished untouchability under Articles 16, 17, 46 and 335 and provided a framework for positive discrimination to help dalits get access to stable jobs, the reality is far different. Even basic amenities are hard for them to come by. According to household data for the 2011 Census, toilet availability at home is the least for those at the bottom of the social pyramid—dalits in villages. While the Census does not provide data for OBCs—the category to which the Badaun girls belonged—the data for Scheduled Castes (SC) can be taken as representative. Out of the 440 lakh SC households in India, less than 150 lakh have a toilet, barely a third. Just 75 lakh of the 330 lakh dalit households in rural India have a toilet. That’s 23 for every hundred households. As for slum households, just 90 lakh out of 130 lakh have toilets. Let’s look at state-wise figures for a better perspective. Of the 65 lakh rural dalit households in Uttar Pradesh (UP), only 8 lakh have toilets. That’s a dismal 12 percent in India’s most populous state. But UP as a whole, lags behind in toilets, with just 15 lakh households out of 76 lakh (19 percent), having one.

any other states suffer from the same malaise. Bihar, despite being hailed for development under Nitish Kumar’s Janata Dal (United) government, has just 3 lakh toilets among its 32 lakh dalit households, barely 10 percent. As for rural dalit households, it’s even lower at 2.2 lakh toilets, among 29.8 lakh households in the state. In Maharashtra, which goes to the polls in October, only 5.8 lakh of the

NOTHING STATELY State

Rural dalit households

All figures in lakhs

Toilets

Bihar

29.8

2.2

Maharashtra

17.8

5.8

Gujarat

4.9

1.47

Punjab

7.4

Kerala

4.54

3.7

Source: Census 2011

roughly 17.8 lakh rural dalit households have a toilet. This is barely 33 percent, an abysmal figure for a state from where dalit icon BR Ambedkar hailed. In the prosperous Gujarat, the prime minister’s home state, and often touted as a modern, business-friendly one, the picture is none too good either. Of the 4.9 lakh rural dalit households, just 1.47 lakh have toilets. In Punjab, another affluent state, out of 13 lakh dalit households in villages, just 7.4 lakh have toilets. However, Kerala, hailed for its development model, fares far better. Out of 4.54 lakh rural Dalit households, 3.7 lakh have toilets, an impressive 82 percent.

o why has there been a lackadaisical attitude towards building toilets? JNU sociologist Vivek Kumar, who specializes on dalits, says: “If dalits don’t have land to build houses with thatched roofs and cremation grounds in many parts of India, how will they build toilets? There is no targeted policy on the part of governments towards this goal. There was the Indira Awas Yojana, a social welfare program to provide housing for the rural poor, but the money provided was too meager for building one room, leave alone toilets.” As for the success of Kerala in building toilets, Kumar says: “Universal education helps in improving access to toilets, as it creates hygiene consciousness. Kerala’s strides in education have helped it beat more prosperous states by miles,” Kumar adds. Sadly, while the debate over development was endemic during the recent Lok Sabha polls, the ground reality is far different for India’s rural poor. Basic services have con-

Amitava Sen

centrated more on the middle and affluent sections. Mobile penetration is an apt example. While the 2011 Census showed that just 47 percent of all households in India had toilets at home, 63 percent had telephones and 53 percent had mobiles. It’s time we bring about a toilet revolution in India. Let there be a collective endeavor to elevate the marginalized lot by providing them at least basic hygiene. IL INDIA LEGAL July 31, 2014

PROFILE/ ram madhav

RSS’ WINDOW TO THE WORLD ram madhav’s inclusion in the bjp is to blunt arun jaitley’s clout, smoothen relations with the rss, and use his diplomatic and academic contacts By Bhavdeep Kang

rom time to time, the RSS deputes those it deems its best and brightest to its political arm. Deen Dayal Upadhyay, Nanaji Deshmukh, Lal Krishna Advani, Atal Bihari Vajpayee, KN Govindacharya and Sanjay Joshi come to mind. In keeping with this hallowed tradition of generational change, Ram Madhav—the best-known face of the RSS— has been sent forth to serve the BJP. The rumor is that he will be appointed as one of party’s general secretaries; he may eventually become its organising secretary. Representing the convergence of NDA government, the BJP and the RSS, he occupies a unique niche in the “sanghiverse”. While he is generally regarded as being “Narendra Modi’s man” and enjoys his confidence, those who know

July 31, 2014

him say Madhav is, first and last, an RSS man. With his boss and the newly-anointed BJP president, Amit Shah, a staunch Modi loyalist, he will serve to balance the BJP-RSS hegemony of the Arun Jaitley-Suresh Soni duo (Soni is number three in RSS). Madhav was seen primarily as “the communicator”, responsible for transmitting the RSS view to the media and the world within its reach. Officially, the RSS did not have a spokesperson; the post of pravakta was created for him. The fact that RSS supremos, particularly the current sarsanghchalak Mohan Rao Bhagwat and his number two, sar karyavaha Suresh ‘Bhaiyyaji” Joshi, are given to cryptic off-the-cuff remarks open to diverse interpretations, compelled him to do damage control with the media. He became spokesperson at a critical time

for the BJP, when it had taken a battering after the Gujarat riots of 2002. His adroit handling of the media naturally raised hackles in an organization wedded to the concept of prasiddhi parimukta, which roughly translates into staying away from fame. Elements within the sangh questioned the necessity of a spokesperson and he responded by avoiding the limelight. This abnegation had a boomerang effect and the sangh decided to expand its interface with the media by drawing up a panel of spokespersons. De facto, Madhav remained the primary channel between the media and the RSS. When Bhagwat told sangh workers (a month before polling for the 2014 general elections) to quit chanting “NaMo-NaMo”, journalists turned to Madhav for interpretation. Did this mean the RSS was miffed with Modi and not support him for prime minister? Nothing of the sort, said the imperturbable Madhav. Merely, the RSS wanted its workers to pro-actively highlight national issues, not cruise along on a personality wave.

adhav is the proverbial iceberg, keeping nine-tenths of his persona—and activities—below the surface. Few people, even within the media, know he has been the liaison between the RSS and the NDA government ever since it took oath on May 26. Prior to that, he was instrumental in coordinating the sangh parivar’s crucial role in the 2014 poll campaign—a first for an organization that prides itself on staying away from politics. The soft-spoken, bespectacled and unflappable 49-year-old’s most significant successes are unknown outside the parivar. A decade ago, he was given the job of establishing a connect between the RSS and the outside world. Today, his contacts with the international diplomatic community run wide and deep. No one in the RSS is as widely travelled and no one, other than the foreign secretary and a couple of veteran diplomats, can boast a more extensive network among diplomats. Some ambassadors are just a phone call away. With his entry into the BJP, Madhav becomes a valuable resource for diplomats who had the foresight to cultivate, through him, a relationship with the RSS. Naturally,

Madhav is a communications expert and crisis manager. He coordinated RSS’ role in the 2014 poll campaign. From May 26, he was the main link between the BJP and RSS. he is expected to play a role in foreign ministry appointments. He has also cultivated bureaucrats within the IAS and the IPS. The RSS leader has established beachheads in academic institutions worldwide, a slow and frustrating process, given the deep suspicion of “Hindu fundamentalism”. The fact that he is a voracious reader came in handy. It was to this end that he set up India Foundation, one of many RSS think-tanks, but certainly the most active. It has brought out numerous publications. Madhav’s own book, India and China: Uneasy Neighbours after Fifty Years of the War is a critique of India’s China policy during and after the Nehru years. Madhav’s association with the sangh started early. As a bal swayamsevak, he acted as a courier during the Emergency, carrying messages to protestors who had gone underground. After the mandatory training at the Nagpur officers’ training camp (OTC), he became a full-time pracharak. Born and brought up in Andhra Pradesh, he was spotted by a senior BJP leader from the state, who mentioned his name to the powers that be. The turn of the century found Madhav at Keshav Kunj, the RSS headquarters in Delhi. Early on, he realised the importance of IT as an outreach tool. Long before the social media became integral to everyday life, he was making the RSS website interactive, as director of its publications division. As a communications specialist, he could always be trusted to have the latest cellphone. His attire might be simple—Fabindia kurtas—but his phone, tablet and laptop are invariably high-end. To be fair, Madhav’s success can be attributed in some measure to Bhagwat’s willingness to adapt to the challenges of a changing global scenario—perhaps the first sarsanghchalak since Balasaheb Deoras to display that kind of flexibility. Having said that, Madhav took the ball and ran with it. IL INDIA LEGAL July 31, 2014

SPORTS/ bcci/tax exemption

Anthony Lawrence

WILL UMPIRE JAITLEY RESCUE BCCI? will the former cricket board official-turnedfinance minister change his stance and force the board to pay up its tax dues of `2,500 crore? By Alam Srinivas

July 31, 2014

ESS than a year ago, he was a negotiator for the Board of Control for Cricket in India (BCCI) to sort out the latter’s tax issues with the finance ministry. Today, he is the man who will make the choices as the country’s finance minister. Less than 12 months ago, he pleaded with the tax officials to continue exemptions given to the BCCI in the past. Today, the taxmen will dance to his financial tune. Will the past influence Arun Jaitley’s BCCI-related decisions? It seems that the “conflicts of interest” within the BCCI have spread to the finance ministry. The Supreme Court will consider issues related to N Srinivasan, the stepped-aside president of BCCI whose son-in-law was allegedly involved in match fixing. But will the new FM, and former vice president of BCCI, go after the board or give it a reprieve? Whose side will he bat for? Jaitley will be the third umpire in three BCCI cases. First, as the FM, he will decide whether the board continues to enjoy its

UNI

tax incentives, or pay the `2,300 crore demanded by the income tax (IT) department? Second, as a senior minister in this regime, he can influence the future of the still-to-be-ratified Sports Development Bill, which said BCCI was a “public authority”. Third, as the FM, he will determine whether the board pays the `155 crore service tax on earnings from the IPL. INCOME TAX MUDDLE In 1984, the finance ministry clarified that “promotion of sports” was a “charitable activity” and exempted the BCCI from paying taxes on its income. The board was registered with Director of Income Tax (Exemption), Mumbai, under Section 12A of the Income Tax Act, and the incentive was given under Section 11. This continued for over two decades; the BCCI did not pay tax of `56 crore in the assessment year 2004-05, `33.64 crore in 2005-06 and `125.64 crore in 2006-07. On June 1, 2006, the BCCI amended its “objects”, which is a list of its current and proposed activities. The changes allowed the board to participate in other sports. It could award sponsorships to players in other games, and contribute to sports institutions like the National Sports Development Fund. Tax officials felt that this move de-registered the BCCI under Section 12A. The logic was that the 1984 registration implied it was granted for the “objects” that were then submitted to the IT department. With the June 2006 changes, the registration became null and void and the tax exemption, which was based on the registration, stood withdrawn. Since IPL’s first season in 2008, IT authorities felt that the BCCI’s revenues were “commercial”, and stemmed from “entertainment”. With the commercialization of cricket, it said that the board’s activities were in the nature of business. The huge increase in the BCCI’s revenues indicated that it was no longer involved in “charitable” activities, but had become corporatized. Therefore, the board was asked to pay tax on its revenues from the assessment year 2007-08. According to media reports, the tax slapped on BCCI for the past seven years was `2,300 crore.

The BCCI is exempt from paying taxes because sports promotion is a charitable activity; But IT authorities say its activities, like IPL, are commercial, hence taxable. The board contested the IT department’s claim. Its logic was that other sports bodies were exempt from tax; its investment in noncricket games could not lead to de-registration. Seventy percent of its revenues were shared with state cricket associations and players. Even if the IT department withdrew the exemption, it could only tax the remaining 30 percent income. MINOR VICTORY The BCCI won a minor victory when the Madras High Court ruled that the exemption given to Tamil Nadu Cricket Association (TNCA) could not be revoked. The arguments given by the IT department were similar to those that it applied to the BCCI. The court said that TNCA’s activities could not be termed commercial because it received money from the BCCI, and earned revenues from matches organized on behalf of the board. “We do not think (that) by the INDIA LEGAL July 31, 2014

SPORTS/ bcci/tax exemption

POWER PLAY (Clockwise from right) Finance Minister Arun Jaitley wields the power to decide BCCI’s fate; anchors Karishma Kotak and Archana Vijaya, adding to the glamor quotient of the game

volume of receipt one can draw the inference that the activity is commercial,” said Justice Chitra Venkataraman. But this October 2013 order raised other pertinent questions. If TNCA could enjoy tax exemptions because it received money from the BCCI, could the latter be given the same tax break? Wouldn’t one of the two parties have to pay taxes? The answer lay in the high court judgment. Justice Venkataraman concluded that to revoke the registration under Section 12A, the IT authorities would have to prove that the “activities (of the association or board) are not fitting with the objects of the association and that the dominant activities are in the nature of trade, commerce and business”. The judge added that what was important was to see “whether the activities are genuine or carried out in accordance with the objects of the association”. In BCCI’s case, contrary to the TNCA, the objects were amended in June 2006. This fact may turn the legal tables on the board. JAITLEY’S ROLE As the former vice president of BCCI, Jaitley’s role in the IT case was revealed in the draft minutes of the meeting of the board’s working committee, held on July 28, 2013, at Hotel Taj Bengal, Kolkata. They read: “Mr Arun Jaitley and Mr Rajeev Shukla reported that they had met the authorities in the Finance Ministry and made a presentation on Income Tax and Service Tax issues…. Mr Arun Jaitley further informed the House that the authorities had assured to look into the issues….” The minutes for the meeting, held at the same venue on September 1, 2013, said: “Mr Srinivasan explained that in order to get over the income tax and service tax issue, it was necessary that the Board enters into an agreement with all the State Units wherein the Board clarifies that the subsidy given to the State Units was against certain services rendered…. He also informed that Mr Rajeev Shukla and Mr Arun Jaitley had spoken to the Finance Ministry and the response was awaited.” Shukla did not speak to India Legal. One can argue that the BCCI’s IT case is

July 31, 2014

in the courts and the FM will have no role to play in the matter. But he can influence the Central Board of Direct Taxes (CBDT) to issue fresh rules, or re-look at such cases. UNDER THE SCANNER The BCCI has stalled attempts by legal activists and governments to make it transparent. It took the excuse that it was registered as a private society and not open to public scrutiny. Despite criticism, the board continued to hide its decision-making process and finances. This was evident from the draft minutes of its working committee meeting on July 28, 2013. The chief information commissioner (CIC) asked the board to appear before it on July 25, 2013, along with documents related to land allotment, tax concessions and others. At the meeting, the board members took the stance that “as per the earlier decisions of the CIC, RTI (Right to Information Act) does not apply to the BCCI…. Further, the Board filed a writ petition in the Hon’ble Madras

In 2013, as BCCI’s VP, Jaitley lobbied with the finance ministry against tax notices issued to the board. He earlier questioned the need to bring the board under RTI Act. because most of its members, and those of the state cricket associations, are politicians. In a recent interview, the new sports minister, Sarbananda Sonowal, said that there needs to be “more discussion” on the bill. It is a question of involving all stakeholders— players, trainers, coaches and federations. “We should take their view on any kind of initiative in the future,” he added. The billion dollar question is: What position will Jaitley take during a parliamentary debate on it?

Getty Images

High Court. The Hon’ble High Court granted stay on the proceedings called by CIC….” But the fear within the BCCI was the proposed sports bill, which threatened to force sports authorities, including the BCCI, to become transparent. It was in this context that Jaitley told the working committee in July 2013 that the “sports ministry has appointed a committee to redraft the original sports bill…. He further informed that one of the major issues with the revised draft is that the National Sports Federations are to be treated as ‘Public Authority’ and therefore open to RTI. The members requested Mr Arun Jaitley to go through the Draft Sports Bill and advise the BCCI.” Jaitley’s advice was in vain, as the redrafted bill did bring the BCCI under RTI. The bill is yet to be ratified by parliament. In 2011, when a similar bill was planned, politicians from most political parties opposed it. As expected, the BCCI criticized it. It was successful in nipping the bill in the bud

SERVICING NEW TAXES In a written submission, the finance ministry told the Parliament Standing Committee on Finance (2011) that the BCCI had to pay IPL-related service tax on franchise fees it earned from team owners, payments to consultants like IMG (UK), and income from sale of game rights (telecast, live streaming, etc). However, the ministry was “concerned with the evasion of service tax in relation to the IPL,” said the Committee’s 38th report (August 2011). BCCI paid a service tax of `64 crore in 2008-09 and `94 crore the next year. Between April and December 2009, 24 showcause notices were issued for `70.62 crore of unpaid service tax. This included a showcause notice for `36.53 crore, which was related to telecast rights. By February 1, 2011, “a total of 102 showcause notices demanding a duty of `160.28 crore have been issued, out of which `5 crore have been recovered…,” the ministry told the Standing Committee. It was against this background that the BCCI sought Jaitley’s help to resolve the issue, as was evident from the draft minutes of the board’s working committee meetings in July and September 2013. How will the finance ministry now pursue this issue? Clearly, a small period of Jaitley’s new innings will be spent on negotiating these doosras, carom balls, and knuckle balls. IL INDIA LEGAL July 31, 2014

Illustrations: Anthony Lawrence

GOVERNANCE/ files

PUTTING UP WITH BABUCRACY

monitored by the out-tray and anxious about what’s going into their ACRs, the bureaucrats don’t have to give a damn about how much work’s being actually done By Jagdish Sagar 64

July 31, 2014

N the 1930s, David Symington, ICS, left the glories of district administration to be a deputy secretary. A peon explained to him: “When a file is finished, put it down on the other side; I will take it away”. The first file, “Indent for Office Stationery”, was two inches thick, but the last note read: “As per usual. May be approved.” He initialed it where it said “Deputy Secretary” and heard a satisfying “bang” as it fell to the floor. The next one, four inches thick, was “Volume of Official Correspondence, Measures to Reduce”... Some four decades later, deep in the bowels of North Block, I found myself at the same game, and it’s still played today. It doesn’t matter if one file is about an

indent for pencils and the next one about a declaration of war, you take them up one by one and, after such ratiocination and literary effort as you feel inclined to put in, sign it and hear that satisfying sound as it drops to the floor. The system monitors you by your disposal of files and replies to letters, not by whether you actually get anything done or whether your letters say anything useful, and you’ll go home with the sense of a good day’s work done if you’ve dropped everything that found its way to your table into that out-tray on the floor. If you are, say, an IAS officer you can handle any job anywhere in the country no matter how lazy you are: there’s a huge, employment-intensive industry of “putting up” files and letters for your approval. It’s usually safe to sign and pass it on, downwards or upwards. Now, if the file is going upwards, and if you’re clever and enterprising, have ideas of your own, or would just like to earn brownie points, you can summarize the whole history of the thing, add your own spin, and put up a “self-contained note”; you will be appreciated for simplifying your bosses’ task. Over a hundred years ago, Lord Curzon described a file that took 10 years doing the rounds before it landed on his table. Each contributor wanted to shine, score a point, show that he was contributing. That’s still the case: One of the denizens of North Block in the 1970s was a joint secretary (JS) sitting on top of a brilliant deputy secretary (DS), who would write splendid “self-contained” notes; JS would send the file back repeatedly with sundry questions and comments, which poor DS would keep clarifying until his original note was buried under a few dozen pages. JS would then write DS’s note and put it up to the Secretary as his own.

he file can metamorphose with successive contributions: someone sends it back to the putter-up with a slightly irrelevant query, starting off a catena of notes that take the file further and further from its original subject, like the game in which each child in a circle whispers something to the next, and then you compare what the first one said with what the last one heard.

The system judges you by your disposal of files and replies to letters, not by whether you actually get anything done or whether your letters say anything useful. Anyway, it is usually the Minister —rightly so—or someone who has the Minister’s confidence, who decides what needs to be done. A Minister who wants to get something done (good or bad) picks people who will make sure it happens, and anyway there’ll be a scramble to keep the Minister happy: the one safeguard against the inertia of the bureaucracy is its obsequiousness in putting up what the boss wants to read. For what the boss isn’t bothered about, or doesn’t know about, the files will keep going up and down and round and round. Again, those who do actually get things done have often had to invest time and effort in window dressing to make sure the file will look okay for the record: the noting side of the file might almost become a work of fiction. And again, those below you, cautiously, cussedly or downright mischievously, may compel you to overrule them, which can be a risk: someone will assume you were up to no good, or why should you have taken the trouble? Or your subordinates might simply refer the file laterally to someone else, who will refer it to someone else, and so on ad infinitum: there may be little you can do to retrieve the file without looking “interested” in it. (It can be fatal to be described as “interested” in anything.) At the turn of this century, as Minister of State for (among other things) administrative reforms, Arun Shourie wrote a hilarious and revealing account of files that had come his way. But being a journalist, he hadn’t a clue what to do about it: he seemed simply to have been scoring the point that journalists are brighter than babus (which—dare I say it?—might not be true.) However, there are always tired old remedies around. In 2005 the Second Administrative Reforms Commission, headed by Veerappa Moily, recommended:“The Manual of Office Procedure emphasizes the INDIA LEGAL July 31, 2014

GOVERNANCE/ files

importance of processes, but its stipulations are largely related to file management and recordkeeping. In practice, this has therefore meant dilution of the intended focus on outcomes… The commission feels that this can be remedied by each Department specifying its key objective. … the introduction of a performance management system in the Government. This would ensure a built-in evaluation system to assess the quality of decision making.” Not a single original thought, a rehash of what’s been said hundreds of times, the jaded argot of “administrative reform”. It’s obviously true that the bureaucracy is process-oriented: but the answer isn’t simply to natter on about fixing objectives and the chimera of a “built-in evaluation system”. Why not, for starters, just improve the process?

he Government , after all, isn’t a company with a bottom-line to measure performance. It’s usually impossible to measure the quality of work in the secretariat by specifying objectives: for example nobody may worry too much, at the time, whether a piece of legislation or a central scheme is thoughtfully drafted. Much is done in haste because the Government wants to score a point or look like it’s doing something: we’ll discover later how ill-considered it all was, and by then the persons responsible will have moved on with their “outstanding” ACRs (annual confidential reports). Objective achieved.

July 31, 2014

Again, the serial noting system is tied up with a particular administrative structure: a “Section ” at the bottom—a dingy place full of dog-eared files and industrious clerks— which is the starting point and ultimate home of all files; its original note goes up through the hierarchy, each level pushing it on, adding its wisdom or referring it back down (ultimately to the Section, from where it commences its upward journey once more.) Nor is this genuinely participative: a “putter-up”, who may be the only person who has seriously studied the question, may never get a chance to correct some appalling bloomer in what eventually goes to the Minister. One of the working groups set up by the first Administrative Reforms Commission in the 1960s did actually describe the absurdity of this system and suggested several alternative ways of doing things. None of this found any mention in the Report of the Administrative Reforms Commission that came out in 1966, and the topic has never been broached since. The way things are is simply too comfortable. Even the Government’s IT wing, the National Informatics Centre (NIC), merely comes up with systems to track and monitor the movement of files; no one has the imagination to put technology to any better use. The most obvious possible reform is a “broadcast” method: the deciding level for any particular decision circulates either a position paper or a draft letter or cabinet note or whatever to all those concerned simultaneously on an intranet (regardless of hierarchical level), takes all their inputs (it’ll be presumed they’ve agreed if they don’t meet a deadline) and finalizes the document; perhaps, if it’s complicated, after a second or third round. No notes, just comments and tracked changes to drafts. Something like that would actually be more transparent, more participative; it would force people to learn their jobs and stretch their brains rather than just pushing the file on with a bit of casual wisdom; it might compel senior people to learn how to use Word; and it could replace the section with a database. That’s no panacea—there never is one, for the bureaucracy—but it’s a low hanging fruit that no one wants to bite. IL

EVERY FORTNIGHT INDIA LEGAL WILL BRING YOU NEWS, ANALYSES AND OPINION FROM THE SHARPEST INVESTIGATIVE REPORTERS AND MOST INCISIVE LEGAL MINDS IN THE NATION ON MATTERS THAT MATTER TO YOU rice on P tati 0 Invi `5

INDIA L EGAL NESS’ MESS

e Insid

’s Baba

Ali Cave

T OUN AT C

S TH

RIE STO

FOREIGN POLICY

SEAWARD

HO!

W RII QG RXQW OH D DFF HVW\ W\OH VLYH OLIH ([FOX SXOHQW FDO DQG RQV RI W OD WKH R W SROLWL RQQHFWL DZD VHFUHRUDWH F HU DQG KL KR VKL ZQF\ H FRUS W H[SRUW 4 UH U X 4 H 14 PHD HU 0RLQ E\ ,,7 DJ WUDG UDLGHG E ZDV

ALSO

RNI No. UPENG/2007/25763

763 07/25 G/20

Lobby of

mansi Qureshi

` 100

STORIES THAT COUNT

The Indian Ocean dictates a new strategic doctrine China looks afresh at India Musharraf exclusive: Advani derailed agreement on LoC

zTION DDIC treat d EX A NG So track anenders RISIN ed tto peat off ed 48 e ee n ep rre the z D FRAU TIONzSHUDWRUV A R G MMIIG\ QLJKW R LRQDLUHV US IM \ E SH PLOO 34 Á\ KRZ Á GX SIAL VER TRO TMENTS CON OIN KERALA’S SDO DESPERATE HOUSEWIVES R P * P W I L A GL DFFHS RKLQWRQ ICIA R UDIC GOPAL SUBRAMANIUM: POLITICS OVER MERIT? 5 JU :LOO 0LXP DQG YDWLRQ WR HOH Court?MUSLIMATICS DPDQ DQ·VNAJMA’S UD U E X e 6 45 1DULP Suprem

EN No. UP

0 ` 10

www.indialegalonline.com

ONLINE SNOOPING, UNDER SCANNER

Raghu Rai’s Two Faces Of Fate

ENC

INDIAL EG rice tit on P IInnvitita `50

Gay R Revisights ited

Death Still Penalt y Han ging

June 30, 20 14

Intern et C Off W en ith H sorship is Fa ce! www.i ndial eg

AL DON’T M ESS WITH M E alonli

STO RIE

BAD AUN : Ind

INDIA’S

NEW NS

A AJIT

ia’s S

KUMAR

DOVAL

ham

ne.co

` 10 0

MOD I’S C OWB OY

RN R NII No o.. UP UPE EN E NG//2 NG /20 /20 200 07 7/2 /25 5 57 76 763 3

NDIA L

EGAL

T: E MEN RIGAD B ERN G0V MODI 14 15, 20 NEW F THE June O RGE CHA

RNI

Invit atio `5 n Price

July 15, 2014

S TH

AT C

OUN

BOOKS/ ramesh menon/modi demystified

HAVE TEA WITH 68

July 31, 2014

narendra modi made unprecedented use of pr machinery to reach out to the last man. And newspapers and channels played willing mediums. india legal’s managing editor Ramesh Menon’s book details his strategy threadbare

Photos: UNI

HE power of Modi’s marketing was not restricted to the aspirational, modern, urban elite but stretched far and wide. During the All India Congress Committee session in New Delhi on 17 January, party leader Mani Shankar Aiyar derogatorily commented that Modi could never become India’s prime minister but the party could make place for a tea stall for him at the meeting venue, taking a dig at Modi’s humble origins. In response, the BJP decided to hold informal meetings at tea shops and call them “Chai Pe Charcha”. It focused on politically crucial states such as Uttar Pradesh and Bihar to highlight their backward-class PM candidate who once sold tea with his father. As results showed, the backward classes were emotionally drawn to Modi. The “Chai Pe Charcha” events in 4,000 locations were estimated to have reached 50 lakh people, who drank tea from paper cups that had Modi’s photo on them, listening to political discussions that showcased the BJP as an alternative. The party’s research team found that there were about 19,000 villages in Uttar Pradesh and 11,000 in Bihar with a population of 2,000 or more and they had absolutely no media penetration of any kind, not even radio sets. These remote villages were not being targeted by any political party. For the first time since Independence, the BJP reached out to them with 650 GPSenabled video vans that would showcase Modi and his work in Gujarat and what the BJP wanted to do if it came to power. Such video vans made 1,38,900 trips into the interiors of Uttar Pradesh and Bihar. The research team also found that in many places, when asked if they would vote for the BJP, people’s answer was “No”. But when the same people were asked if they would vote for Modi if he were the candidate, the answer was invariably “Yes”. So they tweaked the campaign to make voters feel they were voting for Modi if they voted for the BJP. A new slogan was coined: “Kamal ka button dabao, Modi ko pradhan mantri banao (A vote for the lotus [the BJP’s election symbol] is a vote to make Modi the prime minister)”. The basic theme of the campaign was that every BJP candidate was fighting the election to ensure a Modi victory. The leader himself often asked people for votes in his name and not that of the local candidate he shared the dais with. The BJP also reached out to far-flung areas using Doordarshan, All India Radio and regional media in dialects like Mythili and Bhojpuri, something the ruling Congress could have easily done but did not. It also heavily advertised in Urdu newspapers in an effort to reach out to Muslims, who were apprehensive of the rise of the BJP. It conducted customized campaigns in areas dominated by Muslims, asking them to get over their fear psychosis and elect a government that could give the community jobs, development and a better INDIA LEGAL July 31, 2014

BOOKS/ ramesh menon/modi demystified

Truth and fiction

BRAND LOYALTY Common people related to Modi for his humble chaiwala background

quality of life. In Kashmir, its slogan “Jannat yahan par vikas kahan? (Paradise is here but where is development?)” made an impact as BJP leaders kept asking why such a beautiful state had made no headway...

t every political gathering, no matter which corner of the country it was in, Modi customized his speech to make it relevant. He sized up the audience and spoke extempore, getting immediate attention as he talked of local issues. In Chennai, Tamil Nadu, he spoke of the need for Sri Lankan Tamils to be given rights, safety and respect. In Arrah, Bihar, he said that the absence of electricity was not news but the presence of it was. In Mysore, Karnataka, he said he could make the city a tourist’s paradise like Gujarat. In Barmer, Rajasthan, he said he wanted to create a separate body to look after desert regions. In Dehradun, Uttarakhand, he asked why men from Garhwal and Kumaon regions should only be soldiers as good schools and universities could make officers out of them. In Varanasi, Uttar Pradesh, he said the Ganga needed to be cleaned as the river had turned toxic in many places. Everywhere, he was lustily cheered by crowds as he managed to strike a chord. As he crisscrossed India, Modi rejuvenated the party that had got demoralized over the ten years it had spent out of power. He instilled a sense of direction into leaders and

July 31, 2014

he line between the credible and the incredible is thin and on one too many occasions Modi found himself overstretched. Interestingly, ‘crisis perception management’ was one of the key duties of Modi’s PR agents. In a feature article in Open magazine in July 2013, journalist Jatin Gandhi wrote that the Gujarat government was then in the process of finalizing a new contract with a PR agency, as the current one, held by Delhi-based Mutual PR, was to expire in a few months. The government’s international contract, held worldwide by Apco, ended in March 2013. Gandhi accessed the “Request for Proposal” document. The devil, he noted, was concealed in the detail of objectives such as: ‘Crisis perception management and informing the Commissionerate of Information about impending stories about Gujarat State / leadership’. “The ‘leadership’ clearly refers to Modi,” Gandhi wrote.“‘Crisis perception management’ essentially kicks in at times when Modi goofs up.” But the goof-ups are often too difficult to be explained away by smart PR lexicon. Like his remark in an interview to Reuters, comparing Muslim victims of the 2002 riots to a puppy dying under his car’s wheel. Or the one made to the Wall Street Journal in June 2012 that malnutrition among children under five was explained by middle class girls in Gujarat being “more figure conscious than health conscious”. In March 2013, the National Indian American Public Policy Institute based in Chicago arranged a trip of three US Congress members, Aaron Schock, Cynthia Lummis and Cathy Rodgers, to Gujarat. But Modi’s PR factory made it seem to the media like the Obama administration had sent them. The national media soon smelt a rat, investigated and found that it was a purely private visit and did not have the concurrence of the US government in any way. Incidentally, it was this very institute which worked with a group called Overseas Friends of BJP to get Modi an invite from the Wharton School in the US to address its students that same month. But the invite was suddenly withdrawn as the institute thought it best not to get into any controversy since the US had denied a visa to the leader for more than a decade in sight of the post-Godhra riots. Arguably the biggest faux pas involving Modi took place in June 2013, with a story in The Times of India claiming that he had rescued 15,000 Gujaratis from the killer floods in Uttarakhand—using eighty Toyota Innovas, four Boeings and twenty-five luxury buses— even though the army wasn’t able to rescue more than a few hundred. This incident in particular proved

to be great fodder for the Congress, which derisively gave him nicknames such as Rambo and feku (liar). Then there were his series of gaffes in which he jumbled up historical facts, at times those pertaining to his own party’s ancestry. Describing Syama Prasad Mookerjee as a “proud son of Gujarat” at an event in November 2013, he credited him with setting up the radical “India House in London under the very noses of the English.” “He was considered the guru of Indian revolutionaries,” he said. “He died in 1930, but before he did so, he expressed the wish that his ashes be kept carefully so they could be returned to a free India.” Mookerjee, however, was born in Kolkata, not Gujarat; died in 1953, not 1930; passed away in India; and was cremated in West Bengal. Modi’s reference was in fact to Shyamaji Krishna Verma, a Sanskrit scholar and nationalist born in Gujarat’s Mandvi city on 4 October 1857. Mookerjee served as minister for industry and supply in Jawaharlal Nehru’s cabinet. He quit the Congress and founded the Bharatiya Jana Sangh—the BJP’s ancestor—in 1951. He was jailed in 1953 while protesting against restrictions on the entry of Indian nationals into Jammu and Kashmir and died in prison. Moreover, this foot-inmouth incident happened just days after Modi had said the ancient university of Takshashila was in Bihar whereas it was in what is now Pakistan. As Modi made tall claims, the Congress war room realized the need to puncture them with solid research. At 9 Pandit Pant Marg in central Delhi, the residence of Deepender Singh Hooda—who was a Congress MP from Rohtak in Haryana in the Lok Sabha that concluded in 2014 and headed the party’s social media initiative—researchers constantly went through reams of information to counter his claims. Hooda led the counter-Modi strategy on social media and also gave inputs to leaders... Sandeep Dikshit, then the Congress MP from East Delhi, doubled up as the party spokesperson and the head of its research team. At his Pandara Park residence in central Delhi, a team of five meticulously documented every figure and piece of economic data used by Modi and ran fact checks. If they were wrong, they were shared with the teams of Hooda and Ajay Maken, Congress MP from the New Delhi constituency and head of the party’s communication cell. The facts were passed on to those appearing on TV debates and released on social media.

Targeting 19,000 villages in UP and 11,000 in Bihar, the BJP reached out to them with 650 GPS-enabled video vans, making 1,38,900 trips.

workers as he sold the dream of a better future. His energy and aggressiveness made him look like a decisive leader in a hurry, catching the imagination of an impatient electorate. “It is amazing how much energy he has,” says Ajay Singh, who was part of the BJP war room, adding that Modi slept for hardly four hours a day. “We worked 24x7 since January, often going to bed in the early hours of the morning, but it was such fun,” says Ajay Jasra, a corporate communication specialist in the BJP war room. Modi was turned into a brand and deliberately advertised as one. The multiple campaigns surrounding him were high-decibel, relentless and expensive and outshone the Congress’s, which seemed tired in comparison. Ajay Maken, who was in charge of the Congress campaign, admitted to the media that the BJP had outdone his party, while Jairam Ramesh, a former minister, said that the BJP had spent `5,000 crore on showcasing Modi... Ajay Singh points INDIA LEGAL July 31, 2014

BOOKS/ ramesh menon/modi demystified

Tactfully, the BJP gave out the message to the voters that every vote they cast for the party would go directly to Modi, as if he was contesting from all the seats directly. out, “Tactically, we kept money aside for the last two weeks to create a shock-and-awe campaign as we saw that the Congress had given up. We unleashed a campaign in Modi’s voice, which said, ‘Aapka diya gaya vote seedhe mujhe milega (Every vote you cast will directly come to me),’ to create a feeling that Modi was contesting all the BJP seats...”

DASHED HOPES BJP’s landslide win put paid to Jayalalithaa, Naveen and Mamata’s chances of calling shots at the center

July 31, 2014

media hungry for TRPs and eyeballs latched onto the Modi campaign, further advancing his cause. The Hindu’s rural affairs editor P Sainath observed: “That building of a cult around Narendra Modi was a propaganda triumph. But it worked because we are India’s most media-saturated electorate ever... Never before have the media participated in an Indian election to the extent and in the manner they did this time. For weeks, any speech by Modi in any distant district ran live on several channels.” He added that some major corporate

houses with big media holdings formed “cells” to help advance the Modi campaign. A study by the CMS Media Lab, part of the Centre for Media Studies, New Delhi, found that he hogged over a third of prime time news telecast on five major channels. And that was between 1 March and 30 April. From 1 to 11 May, Modi’s time crossed the 50 percent mark—over six times what Rahul Gandhi got and ten times the share of Kejriwal. Moreover, quite a bit of Kejriwal’s coverage was negative, which was not the case with Modi.

ith a strong momentum in his favour, Modi gave his campaign a final push in the last lap of the election by taking the fight to the enemy camp and holding a rally in Amethi, the constituency of his principal opponent Rahul Gandhi, in support of BJP candidate Smriti Irani. “This is my younger sister Smriti Irani. I chose her for Amethi, but not to create fresh problems for the mother and son (Sonia Gandhi and Rahul),” he said on his rival’s turf. He went on to describe Amethi as one of India’s most backward districts because of “forty wasted years” and “three wasted generations”. The rally Gandhi held in Modi’s constituency of Varanasi just days later seemed like an inadequate response and only reinforced the impression that the Congress vice-president had been on the defensive throughout the election. His sister Priyanka entered the fray to bat for him but it was too late in the day, and her invocation of her martyred father betrayed the feeling that the Congress was running out of options and resorting to old emotive appeals. As the bitterly fought election drew to a close, Modi was all over. Commenting on the unprecedented scale of Modi’s outreach, Kunal Pradhan and Uday Mahurkar of India Today wrote in an article titled Maximum Campaign: “Wherever you are in India, whatever your politics, and whomever you did or didn’t vote for, the spec-

tre of Modi hangs over the 2014 Lok Sabha elections. So relentless has been his campaign, so dramatic his delivery, and so ubiquitous his development message, that he has converted a complex parliamentary system into a presidential-style referendum on himself. Over the last nine months, Modi has travelled 3,00,000 km, or seven times the Earth’s equatorial circumference. He has attended 5,187 events, addressed 477 rallies in twenty-five states while sleeping barely five hours a night, and harnessed the Internet and mobile telephony to connect with an estimated 230 million people, or one in every four voters. That’s more people than the population of Brazil and three times the combined annual traffic of the Delhi and Mumbai airports.” Long before the results of the election were out, the outcome was a foregone conclusion. But when the results were finally out, the outcome surpassed everyone’s expectations. On the morning of 16 May 2014, all doubts about a hung parliament were laid to rest as the BJP seemed set to win a clear majority. In the event, the party bagged 282 seats in the 543-member Lok Sabha, ten more than needed to form a government on its own. It was the first time since 1984 that a single party had managed to win a simple majority... The Congress was reduced to its worst ever tally of forty-four. No party secured the minimum of fifty-five seats needed for its leader to be officially recognized as the leader of the Opposition. Modi himself handsomely won both the seats he contested—Vadodara by a margin of 5,70,128 votes and Varanasi by 3,36,854 votes. In Amethi, Gandhi managed to win, but only by 1,07,903 votes, down from a margin of 3.70 lakh in 2009.

artographers painted India’s map saffron as the BJP won all seats in Gujarat, Rajasthan, Goa, Himachal Pradesh, Uttarakhand and Delhi. In Madhya Pradesh, it won twenty-seven of the twentynine seats, while in Chhattisgarh it won ten of eleven. With alliance partners, it won a whopping seventy-three of the eighty seats in Uttar Pradesh, forty-two of the forty-eight in Maharashtra and thirty-one of forty in Bihar. The Congress, on the other hand, could in no

state cross the double-digit mark. In Uttar Pradesh, the BJP’s performance was stellar as two of the seven seats it ceded went to Sonia and Rahul Gandhi and the winners in the other five were all family members of Mulayam Singh Yadav, whose Samajwadi Party was in power in the state. Mayawati’s Bahujan Samaj Party, founded on caste lines with the backward classes as its backbone, was washed out without a single seat... The only states without any BJP presence were Kerala, Sikkim, Manipur and Mizoram, while the only regional leaders who survived Modi’s onslaught were Jayalalithaa, whose party won thirty-seven of thirty-nine seats in Tamil Nadu; Mamata Banerjee, whose Trinamool Congress got thirty-four of forty-two seats in West Bengal and Naveen Patnaik, whose Biju Janata Dal secured twenty of the twenty-one seats in Odisha. They had all been hostile to Modi in the run-up to the polls, ostensibly in the hope that they would be able to play kingmaker in the event of no alliance emerging victorious, but Modi no more had need for their handsome tallies. But, for its euphoric win, the BJP had the first-past-the-post system of elections to thank, pointed Sainath. Its vote share had been 31 per cent, the lowest for a majority government at the Centre. The difference between the vote shares of the Congress and the BJP was just of twelve percentage points but it translated into a 500 per cent difference in seats. In Tamil Nadu, the DMK got 23.6 per cent of the votes but bagged zero seats. The BJP-led five-party alliance got 18.6 per cent but won two seats. In West Bengal, the Left Front got nearly 30 per cent of the votes and just two seats. The Congress got less than 10 per cent but took four. The Trinamool Congress got 40 per cent of the votes but 80 per cent of the seats. On 16 May 2014, India’s electoral arithmetic showed that a prime minister, who had been in the making for years, decades perhaps, had finally arrived to take charge with a firm mandate. But the quirks of that arithmetic also revealed that he had arrived with a burden of dissension, fears and anxieties which may never cease bearing down on him from time to time. IL

MODI DEMYSTIFIED The Making of a Prime Minister By Ramesh Menon HarperCollins Publishers India

Pages: 263 Price: `499

INDIA LEGAL July 31, 2014

EXCLUSIVE/ stranded indians

GULF OF

HELL

harrowing saga of a group of Indian workers, who are still held captive on an oil tanker off Sharjah, and forced to survive without enough water or food By Probir Pramanik

AT THE MERCY OF SEA (Top) Hamoda-K, the oil tanker on which the Indian crew is being held; (facing page) prison-like conditions under which Indian workers in Abu Dhabi live

July 31, 2014

aught between the devil and the deep-sea is an oil tanker, with a motley crew of Indians, its Greek owner, and a UAEbased shipping agent. At the center of the depressing tale is Hamoda-K, a Togalese registered oil tanker. It is yet to be determined whether it is one of the numerous “rogue” ships that ply on one of the busiest yet perilous maritime channels. For the past couple of months, it has been “anchored” off the UAE coast a few nautical miles from the Sharjah port. Its crew, 10 Indians and a lone Sudanese national, are without adequate water or food, and have not been paid salaries for the past three months. The video footage obtained by India Legal

shows two crew members highlighting the difficult conditions in which they are living. Rajiv Singh, a crew member, told India Legal: “We have been without proper food or water for the last 15 days. G Tankers, which owns the ship, has not paid us our promised salaries for the last three months amounting to about `2 lakh. We have been threatened that unless we continue to work in ‘illegal diesel’ business we will not be paid.” Echoing Singh is another un-named crew member from Kerala: “We want to get out. Please help us get out of this place. When we ask about our dues, they say since you are an Indian, call up the general manager. We were given a mobile number of the shipping firm that has leased the vessel. When contacted, the crew was told that the owner of G Tankers (which owns the vessel) was in jail in Greece.” Anis Thomas, an official for the Greeceregistered company, accuses the tanker crew of being in cahoots with Somali pirates. He alleges that the members illegally pumped off and sold a part of the precious natural gas oil cargo. Countering the allegations, the ship’s captain, Ragvir Singh, blames the owners and the agent of falsely implicating the crew

Nefarious human trafficking

hen they head to the “promised land” their minds are ecstatic with hope. Poverty, they think, will be history. Dubai has always been seen as a golden land, with umpteen opportunities for the Indian migrants, who would soon be able to turn the fortunes of their poverty-stricken families back home. Most of these laborers are from Punjab, Uttar Pradesh, Bihar, Bengal and Kerala, hoping that their sojourn is going to change their lives. Then they are hit by the harsh realities. Promised lucrative jobs with unheard of salaries ranging between `1.5 lakh to 2 lakh per month, these gullible people are duped by organized international cartels of modern-day slave traders. Only to be entangled in forced labor. India Legal is in possession of exclusive video footage from a stranded ship, which reveals the sordid saga of a group of 10 Indians crew members, all at sea. Investigations expose the grim reality of the complicated connect between modern-day slave trade, piracy and the oil mafia. They highlight the plight of thousands of South Asian nationals, including Indians, who end up in labor camps across the Gulf countries. Apart from the horrific work conditions on the ships, mostly registered in small African countries like Liberia, Togo, Benin and Ghana, the migrant Indian workers are being regularly beaten and forced to work long hours at sea

for months on end—and even years. Besides, they are sucked into the vortex of high-sea piracy, forced to work on “oil-running” vessels that are operated and run by organized shipping cartels and cross-border smugglers. The entire saga brings to light the larger question of how the Indian government turns a blind eye to the nefarious travel agents and touts operating from India. Due to a skewered foreign policy, especially the lack of a clear-cut policy for Middle East, hapless workers have to live with a precarious legal status. On arrival to the Gulf, their passports are invariably taken away by the local sponsors (employers), as most countries in the Middle East require foreign workers to have a “kafeel” or a local sponsor to recommend a visa for an expatriate. The residence permit or “iqama” is then issued to the expat in the name of the sponsor. This gives the sponsor virtual control over the life of the expat.

The owner of the oil tanker accuses the crew, including the captain, of siphoning off natural gas oil worth $60,000 in cahoots with Somali pirates.

to “put the lid” on the well-oiled illegal crossborder trade in natural gas oil.

n an exclusive interview, Thomas, manager of the UAE-based Al Taawon Shipping, the agent of the vessel, gave reasons for the plight of the tanker and its crew. “One reason why Hamoda-K has been anchored off Sharjah coast for the past month is due to non-payment of anchorage by the owner. A shipping agent has to pay for port anchorage. The ship has not been permitted to come to the port because the owner has not paid us. But the real issue is more serious than this issue, or what the crew seems to be disclosing.” He charges that the crew, masterminded by the ship’s captain, “cheated” G Tankers of $60,000. Explains Thomas: “Hamoda-K loaded 65 tons of natural gas oil from the UAE for a buyer in Somalia. However, when the tanker reached its destination, there was a shortage of 35 tons.” Both Al Taawon and G Tankers maintain that the missing cargo was sold off to Somali pirates on the high seas. Thomas adds: “The Greek owner has refused to relieve the crew and the captain or pay salaries until $60,000 is recovered.” Sympathizing with the plight of the crew members, Thomas says: “As an Indian, I understand the plight of the crew members. But, as the ship’s agent, our role is limited. Unless we get remittance from the owner, INDIA LEGAL July 31, 2014

EXCLUSIVE/ stranded indians

Illegal Oil Trade from Iran

Bandar Abbas PERSIAN GULF

Sea route Oil traders disguise Iranian exports as Iraqi fuel oil and smuggle it to Iranian ports Small barges are used to transport the natural gas oil to tankers, which may be owned by small and big firms, but are registered in tiny nations The tankers either go towards Somalia where the oil is sold to the pirates, or they reach South Africa

AFGHANISTAN

IRAN

SAUDI ARABIA

PAKISTAN

Karachi INDIA

UAE Al Hamriyah

Iranian diesel gets smuggled from coastal areas of the Pakistan-Iran border

OMAN

RED SEA

YEMEN GULF OF ADEN

ETHIOPIA

ARABIAN SEA

Diesel is smuggled through land route to Afghanistan, and Sindh and Punjab in Pakistan

Bosaaso

SOMALIA KENYA

Land route

Land route Sea route

Irani oil traders transfer smuggled nature gas oil in plastic drums via land route to Afghanistan and Pakistan

Graphic: Anthony Lawrence

HEADING FOR MISERY Indian workers in Dubai, where many of them end up in leading a life of stress and uncertainty

we cannot clear the crew’s salaries. However, on humanitarian grounds, we have provided food and water to the crew.” The ship’s captain disagrees: “The allegation of the crew selling off a part of the cargo—that too mid-sea—is concocted. We were attacked by Somali pirates in the Gulf of Aden. We sent an SOS to the NATO forces. The pirates escaped on seeing a NATO chopper. You can check with NATO forces patrolling the waters off the Somali coast about the attack on April 23. We were attacked again on our return journey and were saved in the nick of time by the presence

of a British naval vessel. When we reported the attacks to the authorities on our return, we were asked to head to Bandar Abbas (Iran) and wait there.”

hanks to global sanctions against Iran, there is a rise in illegal trade over land and sea routes with neighboring nations. One of the major products that’s smuggled from Iran is natural gas oil, or diesel. Experts estimate that up to 10 million liters may be sold in the black market every day. Global analysts contend that the rise in domestic consumption of fuel can be attributed to the illicit trade. Ship owners, shipping agents, pirates and established firms are involved in the racket. Willy-nilly, Indians have got involved, mostly as crew members of the ships. They often fall prey to the illicit oil traders and end up in jails. Over 300 Indians are languishing in jails in Egypt, Qatar, UAE and other Gulf countries for their alleged role in the racket. While going to press, India Legal learnt that the owner had offered a “compromise formula” to the clear the salaries of HamodaK’s crew and relieve them on their arrival at Sharjah. They wait with a new hope. IL

—With inputs from Ursilla Ali and Akshat Agarwal

July 31, 2014

BRIEFS

Yusuf Bhai’s brothers in arms The legal dispute between legendary actor Dilip Kumar and his two brothers over a property in Mumbai’s posh Pali Hill has estranged the siblings. Kumar’s wife Saira Banu, in an affidavit on his behalf before the Bombay High Court, has stated that the brothers—Ahsan and Aslam—have no right over the bungalow, which was demolished for redevelopment. Banu also states that her husband doesn't have the funds to get new apartments for the brothers and that they should stop abusing his goodwill. Ahsan and Aslam, who resided with their brother at the bungalow till it was razed in 2007, approached the court seeking implementation of an agreement made in the same year.

No to trial by media

The Bombay High Court has directed the Maharashtra government to consider issuing a circular imposing restrictions on the police from giving media briefings or disclosing information acquired during an investigation. Hearing a PIL filed by advocate Rahul Thakur seeking restraint on trial by media, a division bench of Justices Abhay Oka and AS Chandurkar remarked that quality of the investigation may be compromised in such a case.

Pistorius, mentally sound

A mental health expert panel has said that South African Olympian Oscar Pistorius, on trial for the murder of his girlfriend, model Reeva Steenkamp, at his Pretoria home last year was not suffering from a mental illness when he killed her. Prosecutors say Pistorius murdered Reeva in cold blood following an argument on the Valentine's Day in 2013. The athlete says he mistook her for an intruder. The trial began in March but was delayed for six weeks so that he could be submitted for a psychiatric evaluation.

In judiciary’s favor Lifer for Pallavi killer A Mumbai court handed life sentence to Sajjad Ahmad Moghul, the watchman found guilty of assaulting, molesting and killing young Mumbai lawyer Pallavi Purkayastha in her flat in 2012. The 25-year-old lawyer was murdered in her highrise apartment in central Mumbai. Observing that the crime did not fall in the 'rarest of the rare' category, sessions judge Vrushali Joshi, who had found Moghul guilty for the murder, pronounced the life sentence. Moghul killed Purkayastha for resisting his advances.

In an initiative that will address the problem of the huge backlog of cases, the Law Commission has suggested few measures that include new courts, relaxation in the retirement age of subordinate court judges and recruiting new judges. These were part of a report on manpower planning in judiciary submitted to Law Minister Ravi Shankar Prasad by its chairman Justice (retd) AP Shah. Prasad has assured serious action.

Space hurdle for Delhi HC

The shortage of courtrooms in the Delhi High Court has thrown justice delivery mechanism into a tailspin, putting a spanner in the center’s plan to increase the number of high court judges in Delhi. The high court has informed the government that it does not have enough courtrooms and facilities for the proposal to ramp up judges’ strength from 48 to 60. The high court has apprised the government that it requires better infrastructure. The court presently has 33 courtrooms and needs to create 12 additional courtrooms. INDIA LEGAL July 31, 2014

CONSUMER WATCH

How can buyers enforce their rights and seek remedial measures Sincerity doesn’t pay

Illustrations: Aruna

It seems that the country’s leading bank punishes customers for being honest. Mumbaikar Mohan Gunjal found it the hard way. he informed his bank— State Bank of India (SBI)—that it had failed to register `15,000 debit transaction from his bank account, but ended up paying an interest of `27,000. The 55-year-old, who holds a savings account with the SBI’s University Road branch, had on January 1, 2008, withdrawn `30,000 from a kiosk in two installments. When he got the bank’s statement a few days later, he noticed that only one transaction of `15,000 was recorded. Gunjal wrote to the branch asking

them to deduct the additional `15,000. However, Gunjal later realized that the second `15,000 that he withdrew was not through a SBI ATM card, but his ICICI credit card. He submitted an application to SBI, asking for the mistake to be corrected and `15,000 deposited back into his account at the earliest, as he had to pay a high interest on cash withdrawal using a credit card. The bank, however, did not respond despite repeated requests. It took six months to deposit the money back. Gunjal, in the meantime had to pay a compound interest on the withdrawal to ICICI amounting to `27,000. Gunjal moved the Pune District Consumer Grievance Redressal Forum. Observing that it was wrong to deduct `15,000 from the complainant’s account without verifying facts, the consumer forum directed SBI to pay him interest on `15,000. It also asked the bank to pay `4,000 separately as compensation for mental and physical agony and legal charges.

Snake bite Buying an insurance policy should ensure that a nominee gets the monetary benefits. But insurance companies often resort to unfair practices. Calling New India Assurance Company’s refusal to pay a monetary claim “unfair practice”, a Mumbai consumer redressal forum directed the company to pay a woman `5 lakh with interest within a month. The woman, whose husband died of snake bite, was refused the insurance benefit on the ground that she failed to produce her husband’s post-mortem report. Dombivili resident Ashok Bhoir had taken a “luxury membership” of the Pancards Club in 2007. One of the club’s schemes was benefit of insurance policies to its members, courtesy a tieup with the insurance company. The club got Bhoir two insurance policies worth `5 lakh and `25,000 each. A year later, Bhoir, while giving fodder to his

July 31, 2014

livestock, got bitten by a venomous snake. He was rushed to a hospital, but succumbed to cardio-respiratory failure. Subsequently, the hospital issued a death certificate and sent it to the local police station. Though the insurance company sanctioned `19,604 towards mediclaim, the company refused the accidental death claim of `5 lakh. Observing that the company’s action showed unfair practice, the forum said: “There is no proof with the insurance company to show there is any mischief or malafide intention of the complainant in demanding the claim.” It held that the company should have taken note of the hospital’s report and allowed the claim on “humanitarian grounds”. The forum directed New India Assurance to pay `5 lakh with 9 percent interest from the date of filing the complaint. It slapped `25,000 for mental agony and litigation costs.

Brakes on crooked dealer

Sacked for Gulf Air It may seem bizarre that officials of a West Asian airline can’t understand Arabic but it was this problem that cost a passenger working in Doha a well-paid job. Hem Kumar who worked in Doha, had come to India on August 28, 2008, and was to return by October 20, 2008. On October 17, when he arrived at the airport to catch a flight, he was denied a boarding pass by Gulf Air officials. The reason: the airline staff could not understand the “re-entry” journey printed in Arabic. Kumar managed to get the English version for the airline staff to comprehend. Thereafter on October 18, the officials of Gulf Air admitted their fault, but Kumar had to face the same scenario at the airport. Somehow, he managed to reach Doha, but it was too late. He was terminated from his job for not reporting in time. The district consumer forum has, after six years, held the airline guilty and asked it to pay a compensation of `20 lakh to Kumar for “unparalleled agony and harassment”. It blamed the airline for denying the boarding pass to Kumar despite going through the English version of the visa, which clearly indicated “re-entry” journey. Questioning the airline for compelling Kumar to arrange for the English version, the forum said that it should have official translators at the airport. The airline failed to cite convincing reasons as to why its officials failed to understand Arabic. While empathizing with Kumar, the forum observed that although the compensation was not enough to meet the financial loss, it was the maximum monetary relief that a district forum could award.

Beware of wily car dealers taking you for a ride! A district consumer forum in Delhi has applied the brakes on one such underhanded dealer. The Delhi East District Consumer Redressal Forum has asked a Honda car agency to pay a compensation of `70,000 to a woman who was overcharged in the name of being provided accessories. Gagan Vihar resident Kusum Vohra had purchased a Honda Brio from Capital Cars Private Ltd on February 18, 2013, for `4.76 lakh, which included free insurance of the vehicle. But the agency issued a receipt of only `4,54,067, which included the car’s cost and the registration cost. Vohra was not provided any car accessories. The forum pointed out that some car dealers who were duping customers were also evading service taxes. It directed the trade taxes department to survey the operation of these car dealers and take appropriate action.

A case of poor treatment Hairfall is now a common problem, with people opting for a variety of treatments. Veena BR of Bangalore too went to Vibes Healthcare, Jayanagar for a solution. At first, she was advised a herbal treatment for `90,000, which was brought down to `40,000. Veena paid the amount. Later she was sent to a doctor who prescribed her stem cell procedure for `80,000. Veena coughed up the remaining amount. But after the first sitting itself, Veena suffered a lot and opted out of the treatment. Now, she wanted her money back. The wellness centre refused, saying it was against the invoice rules. Veena approached the First District Additional Consumer Disputes Redressal Forum. The Forum after going through the case, asked Vibes to pay `80,000 to Veena, which included `73,000 as refund, `5,000 as compensation for deficiency in service and `2,000 as cost of litigation. It ruled that invoice rules were not valid in this case. Amitava Sen

INDIA LEGAL July 31, 2014

IS THAT LEGAL?

Born with a silver spoon

A man wants to transfer his property to the children of his son. At the time of executing the will, the man does not have any grandchildren. How can he go about it? As per Section 13 of the Transfer of Property Act, 1882, a property can be transferred “for the benefit of ” an unborn child. He should first create a “life interest” in the property for a living person; transfering the property to a person who may “enjoy” the property but does not have ownership rights over it. Once the child is born, he or she gets the interest in the property. But the child may only get possession and ownership of the property on attaining adulthood, at the age of 18.

What’s in a plural? The term “damage” seems quite easy to understand. But the plural form of the same word may cause confusion in a conversation between a lawyer and a layman. What does the term mean? Damage is harm or injury to a person or property—the loss caused by one person to another or to his property, either with the purpose of injuring him, through negligence, carelessness, or an inevitable accident. On the other hand, damages attempt to measure in economic terms the extent of harm a person has suffered due to someone’s actions. These are awards, typically money, paid to a person as compensation for loss or injury.

July 31, 2014

Patient’s prerogative Can a doctor perform an important and necessary surgery on me without informing me? If any procedure is performed on you without your express consent, it amounts to trespass against your body, and is punishable. In the case of Samira Kohli vs Prabha Manchanda (2008), the 44-year-old Samira Kohli visited her gynaecologist upon suffering prolonged menstrual bleeding. Dr Prabha Manchanda recommended a laproscopy test for affirmative diagnosis and asked the patient, Samira, to return the next day. She complied and was put under general anaesthesia for the purpose of performing the laproscopy. However, while she was still under anaesthesia, the doctor informed her mother, who had accompanied her, that a hysterectomy (removal

Illustrations: Amitava Sen

of the uterus) was required. Taking the mother’s consent, Dr Manchanda went ahead and removed the patient’s uterus, along with her ovaries and fallopian tubes. Upon recovery, Samira was aghast at the news that her organs had been removed without her consent. In the ensuing case, the Supreme Court held that even though the surgery was performed for the benefit of the patient, it could not be done so without authorization. The doctor was ordered to pay compensation of `25,000 to the patient.

Employment hazards? If a person suffers an injury due to an accident while travelling to the factory in which he is employed, can he claim compensation from his employer? If the employee is using regular public transport or his own conveyance, he cannot claim any compensation from his employer. Under Section 3 of the Workman’s Compensation Act, 1923, a person may only claim compensation when the injury that he suffers has some causal connection with his employment. The accident should have occurred “out of or in the course of ” employment. Therefore, in case where employees are obliged to travel in a particular manner in he course of their employment, there are valid grounds for claim.

In Saurashtra Salt Manufacturing Co vs Bai Valu Raja, the Supreme Court held that the employees were required to take a boat to reach the factory. As their boat capsized, the circumstances for accident arose due to employment and, therefore, the employer had to pay compensation.

have fun with english. get the right answers. play better scrabble. By Mahesh Trivedi

D: Appointment letter

D: Go on!

1. She’s pretty even at 45. She’s a GLM. A: Girl liked by men B: Good looking madam C: Good looking mum D: Great looks and more

8. When surprised, you DON’T say this: A: Whammo! B: Hurray! C: Heads up! D: Jeepers!

15. Sexual desire for parent of opposite sex. A: Oedipus complex B: Superiority complex C: Parentomania D: Sod’s Law

2. . Know the correct spelling? A: Cameraderie B: Camaraderie C: Cameradarie D: Camarederie

9. A dipsomaniac likes …… . A: alcohol B: food C: juices D: burgers

16. One of the following has a wrong spelling: A: Connoisseur B: Embarassment C: Lieutenant D: Perennial

3. Emoticon for ‘No comment’. A: {} B: 0) C: :-X D: :>

10. I will have to paddle my own ....... . A: canoe B: boat C: cycle D: oar

4. A mountaineer is also called a ...... A: ridge-runner B: rocker C: climbster D: crab

11. When you are upset, you are …… in the face. A: blue B: red C: white D: black

17. Oceanarium. Solarium. But what’s leprosarium? A: A type of bacteria B: Medicine for diarrhoea C: A leper hospital D: No such word

5. Gita is envious ..... her friend. A: with B: of C: on D: for

12. Bête noire means… …. A: best friend B: disliked person C: gambler D: political rival

6. To feel someone’s collar is to ...... . A: hug B: help C: arrest D: sympathize

13. To flay is to ……. . A: beat B: throw C: criticize D: press

19. When Hema said “The very idea!”, she meant .......... A: I agree with you B: My idea was stolen C: I don’t agree with you D: I knew it

14. One of these does NOT mean “go away!”: A: Go fly a kite! B: Go jump in the lake! C: Go climb a tree!

20. How much is “baker’s dozen”? A: Eleven B: Thirteen C: Twelve D: Six

7. What’s the meaning of “walking papers”? A: Encyclopedias B: Newspapers C: Notice of being fired

18. A toffee for decoding TOEFL. A. Test of English as a Foreign Language B. Test of English Fluency C. Teaching of English Fluency D. Test of English Fluency Learning

ANSWERS 1. Good Looking Mum 2. camaraderie 3. {} 4. ridge-runner 5.of 6. arrest 7. Notice of being fired 8. Heads up! 9. alcohol 10.canoe 11. blue 12. disliked person 13. criticize 14.Go on! 15.Oedipus complex 16.Embarassment 17. A leper hospital 18. Test of English as a Foreign Language 19.I don’t agree with you 20.Thirteen

Y L D R WO 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 July 31, 2014

Photos: UNI

PEOPLE / tragedies around the world

SHOCK TREATMENT Unable to understand what happened, a child sits at a clinic after being injured by shrapnel from bombs dropped by forces loyal to Syria's President Bashar al-Assad in Aleppo's al-Sakhour district.

TEARS OF JOY Sherin, an Indian nurse caught up in fighting in Iraq, hugs her sister after arriving at Kochi. She was one of 46 nurses who had been holed up in a hospital in the Iraqi city of Tikrit and held by suspected militants.

MISTAKEN IDENTITY? Police try to protect a man from being hurt by anti-government protesters who accuse him of being a government spy during an anti-government demonstration in Caracas.

POINTLESS DEATH Relatives mourn at the funeral of 21-year-old nurse Yulia Izotova in Kramatorsk, eastern Ukraine. Witnesses say she was shot by the Ukrainian army.

MINDLESS VIOLENCE Rescue workers collect evidence at the site of a bomb blast at a vegetable and fruit market on the outskirts of Islamabad that killed 23 and injured 39.