The Tribune, Chandigarh, India

Finance Minister relents
Sends right signal to foreign investors

Bowing to criticism, Union Finance Minister Pranab Mukherjee has deferred for a year budgetary proposals meant to crack down on tax evasion. The March 16 budget had proposed the General Anti-Avoidance Rules, better known as GAAR, which empowered tax officials to open up any deal they suspected was structured to dodge taxes. The burden of proving innocence/tax liability was on the taxpayer, which now has been shifted to the tax collector. However, the controversial proposal to impose retrospective capital-gains tax on overseas deals involving the transfer of an Indian business stays.

Given the state of the Union finances, the Finance Minister is justified in trying to mop up resources. It is well known that Indian companies evade taxes by routing their investments through tax havens like Mauritius. However, foreign funds too use this route and feared the levy of tax in violation of an existing treaty with Mauritius. If two foreign firms make profits over the transfer of an Indian asset, their tax liability is unassailable. Foreign investors are not averse to paying legitimate taxes. But the move to make retrospective changes in tax laws was seen as an attempt to undo the tax relief granted by the Supreme Court to Britain’s Vodafone and contrary to international practices. The tax regime has to be simple, clear and competitive, and changes cannot be introduced every year.

Monday’s announcements lifted the stock markets and the rupee, which had drifted lower lately as foreign investors headed for the exit. Foreign funds touching $540 million were pulled out of stock markets in March and April, while the first two months of the year had seen inflows of $13 billion. Investor confidence has been shaken due to government indecision, annoying tax proposals in the budget, rising current and fiscal deficits, a negative rating by Standard and Poor’s and slowing growth. Mukherjee has removed only one small hurdle but damage has been done. The country’s image as an investor-friendly destination has taken a hit. The anti-austerity vote in Greece and France has deepened Europe’s troubles, with a spillover effect on India and other emerging economies.

Divorce Bill
Women must get a fair deal

In the new social order where “till divorce do us part” is as much a reality as the sacred vow of yesteryears, change in divorce laws was perhaps long overdue. Yet the Marriage Laws (Amendment) Bill 2010 drafted while keeping in mind the new social mores has run into rough weather. After being cleared by the Union Cabinet, it faced opposition in the Rajya Sabha. Some of the Bill’s provisions, including irretrievable breakdown of marriage as the ground for divorce and shortening of ‘cooling off period’ in particular have come under criticism. Indeed, it’s only fair to state that though divorce cases may be on the rise in India, the socio-cultural milieu of India cannot be compared with the Western value system. Many couples reconcile during the cooling off period and as compared to women, more men file for divorce.

The argument that easy and faster dispensation of divorce would work against women, however, is somewhat loaded if not outright fallacious. To assume that it is men alone who need to get out of the stranglehold of a relationship that has reached a point of no return is overlooking the new social reality of India. Many women in India whose marriage is on the rocks too want to get out of loveless relationships and get on with their lives. Yet, at the same time, it has to be ensured that scores of women left in the lurch do not become victims at the hands of the new law. Divorce should not become an excuse or tool for desertion.

Indeed, it’s nobody’s case that to expedite divorce procedure the Bill should be passed in haste. Issues like women’s share in the matrimonial property need to be debated and adequate safeguards must be built in to protect the rights of weaker section which given the ground level situation in India is invariably the fair sex. The interests of children and the contentious question of their maintenance too must be clearly specified. All implications must be thoroughly analysed before the Bill becomes law. A society in flux cannot afford laws that are ambiguous.

Thought for the Day

A diplomat is a man who always remembers a woman’s birthday but never remembers her age. — Robert Frost

ARTICLE

Coordinating counter-terrorism
Go about NCTC the right way
by Inder Malhotra

INDIA, arguably the worst victim of terrorism, does need the National Counter-Terrorism Centre. But the surest way of not getting it is the manner in which the Central government — or, more accurately, the unilateralist Union Ministry of Home Affairs — has gone about it. Without an iota of consultations with the states or with the political parties represented in Parliament, it imperiously issued an executive order setting up the NCTC and even prescribing its standard operational procedure (SOP).

This reminded me of what Jawaharlal Nehru had said in 1939 about a viceroy “heavy in body and heavy in mind” who, without consulting a single Indian, had declared India to be at war with Germany. However, today’s Congress leaders, heading the United Progressive Alliance government, seem to have no interest in Nehruvian values of building up national consensus on all major issues even at a time when the Congress majority in Parliament was overwhelming and Congress chief ministers of stature ruled all the states. Or has the present leadership lost the will and the capacity to carry others along with it?

That alone can explain the sequence of events following the February 3 notification. Predictably, chief ministers, especially of states ruled by non-Congress parties, protested vigorously (incidentally, the most vehement protest had come from Mamata Banerjee, a key ally of the Congress). New Delhi’s casual response was that the matter could be discussed at a routine meeting of chief ministers with Union Home Minister P. Chidambaram to discuss internal security in April. This infuriated most of the chief ministers. They said the subject was vital — because it “encroached” on the states’ rights and distorted the federal structure — and demanded a full-dress meeting. It was scheduled for Saturday, May 5.

Unfortunately, those who fixed this date overlooked that it was bang in the middle of all-out jockeying and manoeuvring over the race for Rashtrapati Bhavan. Everyone considers it a rehearsal for the 2014 general election. No wonder then that political discord was at its peak and, therefore, the May 5 meeting ended in deadlock with much greater acrimony than might otherwise have been the case. Is it any surprise that, in the media’s judgment, the logjam is unlikely to be broken any time soon?

This said, the flip side of the picture is that some of the chief ministers went too far in their rejection of the NCTC, as proposed at present, and used unduly harsh language while denouncing the Centre. This was particularly so in the case of J. Jayalalithaa of Tamil Nadu, Narendra Modi of Gujarat and Mamatadi of West Bengal. The trio rejects the very concept of an NCTC or a similar organisation. In doing so, it is being as unfair and unrealistic as the Union government is in acting unilaterally and issuing diktats to be followed meekly by the states. In this context it cannot be overlooked that at least one Congress chief minister, Turn Gagoi of Assam, spoke the language of his colleagues openly opposed to Chidambaram’s scheme of things. The private feelings of some other Congress chief ministers are different from their public stand.

In any case, no one, regardless of his or her position or responsibilities, can deny that the country’s counter-terrorism capacity needs to be strengthened across the board, that this has to be a joint effort of the Centre and the states, and that the need for a coordinating mechanism is inescapable.

Prime Minister Manmohan Singh was doubtless sincere when, inaugurating the meeting, he assured the assembled chief ministers that it was not a “Centre versus states issue” but the imperative of combating terrorism jointly. Why wasn’t this cooperative and sensible approach adopted before announcing that the NCTC was a fait accompli ? The states’ objection to a cut-and-dried and heavily flawed agency being imposed on them is legitimate.

The worst feature of the NCTC is that it is located in the Intelligence Bureau (IB) and supervised by its director. Worse, NCTC operatives have been invested with the power of search, seizure and arrest, something even the British imperialists had never permitted. Extension of these powers to the IB and its subordinates is nothing short of converting it into the Indian version of the KGB. This is no scare mongering. There are still enough of us around who know what the IB and other agencies shamelessly did during the Emergency.

Mercifully, Chidambaram has shown flexibility on this critically important issue. He is prepared to locate the NCTC somewhere other than the inner recesses of the IB. But on the powers of search, seizure and arrest, he remains firm. He insists these powers are essential, and to overcome the states’ misgivings he is prepared to make states’ anti-terror units part of the NCTC and to include state directors-general of police (DGPs) in its council.

On the other hand, he still seems to be in a hurry. For, he told the chief ministers that making the NCTC operational must not be delayed. Several chief ministers who do not reject the NCTC out of hand have made constructive suggestions that need to be discussed thoroughly. It is not enough for him to promise to give “full consideration” to these but to insist that the final decision would be the Centre’s. This would aggravate the Centre-states confrontation.

At present tempers and emotions on both sides are high, and the atmosphere is febrile. Let things cool down. Let the presidential poll be out of the way. Then let the Centre and the states get together calmly and discuss all issues threadbare, if necessary, by holding several meetings of chief ministers. At the same time, the anti-terror message should be carried to the people to secure their support.

We often claim that our anti-terror and counter-terror measures are similar to those of the United States. But have we looked at the way the Americans have managed to set up more than 320 new institutions? Immediately after 9/11 they appointed a bipartisan commission that made agreed recommendations, which were readily accepted by the country. Moreover, with the consent of the US Congress, they formed the new department of home security that functions independently and reports only to the President. Why cannot we be equally adroit?

MIDDLE

My guardian angel
by Guneeta Chadha

A few months back, as part of my early morning routine, I lazily moved towards the gate to pick up the newspaper. Seeing a cane basket kept unattended to near our car made me a little apprehensive. But soon my curiosity got the better of my fear and I mustered the courage to have a close look at it. To my utter surprise, snuggled inside the basket was a small pup. Looking around as to who could have left such a cute little thing like this and before I could call out to the neighbours, all of a sudden from the rear of the car, hiding himself quite cleverly, came out my son. Smiling at me and picking up the little thing from the basket, he said, “Yeh lo maa, ek aur bachcha paalo ab” (Take this mom, and rear up another baby now!). Hugging me, he said, “Happy Mother’s Day, Mom.”

It was a mixed bag of feelings, touched with the gift. It was a beautiful chocolate brown Labrador pup with green eyes and (she) had a fuchsia pink collar around her neck. But pretty soon anger got over my motherly love as I looked at him and said, “I’ve outgrown the feedings and the potty training.” Looking straight into his eyes, I asked him, “Who do you think will clean all the puddles and poop all over the house?” Sheepishly, he looked at me and then handed the pup to me. It seemed like an instant bond, for the moment I held her in my arms, all the anger just disappeared and began cajoling and cuddling the cutest thing I had seen.

It so happened that in the next few days, the entire family was busy finding a name for the new member of the family. Like proud parents, me and my husband were looking at the Net for female Labrador names. Alas! all the names seem to fail to please us, and it was my daughter’s creative observation that we were able to name her. “Hey guys, we’ll name her Kiwi, as she is chocolate and has kiwi green eyes,” she announced. (It so happens that her favourite fruit also is kiwi).

And, yes, Kiwi it was! Mischievous, cute and a complete bundle of joy, it not only made a place in my room, but in my heart as well. For not even two weeks old, and missing the warmth of her mother, she would snuggle in between my feet and sleep on them.

Marvelled at her presence and (smell) all around the house, I wonder that sometimes things happen for a reason. I didn’t realise at that moment that a gift bought by my son (with the money saved from his pocket money and his summer training project) would play such a detrimental role in my life in the coming months. As fate would have it, only after a few days when Kiwi came into my life, I lost my brother in the prime of his youth (who himself had been an avid dog lover). The love and care of the few-weeks-old Kiwi somehow became my emotional catharsis. So smitten and in a way obsessed I became about her, that my teenage daughter would joke saying that she is facing “sibling rivalry”. Her complaints were truly justified as many a time, while wanting to call my daughter’s name (Kittu as I sometimes lovingly call her), I would end up calling her ‘Kiwi’!

Once when I was baby-talking with our pup, cuddling and playing with me, my daughter patted on my back and said, “Mom, thank God, Kiwi cannot speak, otherwise you wouldn’t need me anymore.” Assuring her that she was just exaggerating it all, I smiled and said nothing more. In my heart of hearts I thanked God for sending me a guardian angel through my son. Yes, it was silence, yet the million words I could feel in her (Kiwi’s) eyes when in my moments of grief, I would talk to her and she would just look at me with her olive-green eyes in a stared silent assurance. As if she understood the pain and the vacuum which I felt, she would sometimes snuggle in my feet or would rub her wet nose on my cheeks. It’s been 10 months now and “yes, it helped me to heal”. I’ve learnt to remember my kid brother with a smile. Yes, Kiwi is my true guardian angel and I love her for that!

OPED LAW

The right to property is no more a fundamental right in the strict sense. It has become simply a statutory right. However, the Supreme Court has made any deprivation of private property subject to two conditions: public purpose and compensation
When govt acquires private property
Virendra Kumar

Villagers protest against the move to acquire their land for a nuclear plant at Gorakhpur in Haryana. A Tribune photograph

The state governments, as if in competition with each other, are on a spree of acquiring private properties for or in the name of development. In the maters of acquisition of private property, at least two issues of immediate public concern often come to the fore. First, whether the government is obligated to provide and prove the legitimacy of acquisition in terms of public purpose; second, whether the acquisition by the state creates a corresponding right to claim compensation in the person whose property has been acquired. Both these issues are of constitutional import and, thus, required to be dealt with accordingly.

Two limitations

Prior to the 44th amendment, the right to property enshrined in Part III of the Constitution was clearly a fundamental right of every citizen. As such, the supervening power of the state under article 31, read with article 19(1)(f) of the Constitution, inhering the doctrine of eminent domain (implying that in case of public utility, public rights take precedence over private rights), to acquire a citizen's private property was subject to two limitations: public purpose and payment of compensation.

However, judicial interpretations of the state power to compulsorily acquire or requisition private property under article 31 of the Constitution stood in the way of reconstructing our social order by abolishing the exploitative zimidari system as an integral part of land reforms.

This led to the chequered history of successive constitutional amendments, till this article 31 along with article 19(1)(f) was finally omitted by the 44th Constitution amendment in 1978 and simultaneously resurrected it simply as the 'right to property' in Part XII by adding a new Chapter IV consisting of one single article 300-A, which pithily provides that no person shall be deprived of his property save by the authority of law.

Since this constitutional about-turn, the question that has often come to the fore in matters of acquisition of private property is whether the doctrine of 'eminent domain' with the twin requirements of 'public purpose' and 'compensation' as conditions precedent is to be still read into article 300-A and in the statutory provisions enacted there under to deprive a person of his property.

Apparently, it seems to be true that the right to property, now not being a part of the structure of fundamental rights in Part III of the Constitution, is no more a fundamental right in the strict sense; it has become simply a statutory right, enabling the legislature to enact a law to deprive a person of his property without any let or hindrance. But still would it be legitimate to say that in the absence of the protective umbrella of article 13 that forbids the state from making any law which takes away or abridges the fundamental rights given in Part III of the Constitution, the legislature is free to enact any law permitting the state to deprive a person of his property in any manner it likes?

The case of Roerichs

This indeed is the question of core constitutional concern. In order to provide a clear and authoritative answer to this question, we may make a reference to a very recently decided case by the Constitution Bench of the Supreme Court (consisting of S.H. Kapadia, C.J. and Dr. M.K. Sharma, K.S.P. Radhakrishanan, Swatanter Kumar and Anil R. Dave, JJ.) in K.T. Plantation (P) Ltd. v. State of Karnataka (decided on August 9, 2011).

This case dealt with the estate of one Dr. Svetoslav Roerich and his wife, Devika Rani Roerich. Dr. Roerich was an internationally acclaimed painter, artist and recipient of many national and international awards, including Padma Bhushan in 1961, whereas Devika Rani Roerich, grandniece of Rabindranath Tagore, who had made valuable contribution to the Indian motion pictures and film industry, was known to be the "First Lady of the Indian Screen." She was awarded Padma Shri in 1958, and was also the recipient of the first Dada Saheb Phalke Award and the Soviet Land Nehru Award in1989.

Their sprawling estate included quite a few acres of land granted to them by the Karnataka Government in 1954 for linaloe cultivation (the produce that yields a perfume and is used to some extent in furniture and cabinetwork), valuable paintings, jewellery and artefacts. They had no issue and due to their old age and ailments they reportedly stayed in some hotel in Bangalore for a couple of years before their death. Some people who were associated with them had acquired possession of their valuable properties, which in due course of time became litigious.

In this queer situation one of the pivotal issues to be decided was whether, with a view to preserving the paintings, artefacts and other valuables of the Roerichs, the government could deprive the persons who had control or possession of their estate under the provisions of such laws as the Land Acquisition Act and the Land Reforms Act. (In fact, the government even explored the possibility of acquiring the landed properties of the Roreichs and other valuables for setting up an art gallery-cum-museum by drafting the Roerich and Devika Rani Roerich Estate (Acquisition and Transfer) Ordinance, 1992, which of course could not be issued.)

Justice Radhakrishanan, speaking for the Constitution Bench, analysed the two principles of 'public purpose' and 'compensation' by specifically asking whether these "principles of eminent domain are completely obliterated when a person is deprived of his property by the authority of law under Article 300-A of the Constitution." [Para 179]

In this respect, the basic propositions propounded by the Constitution Bench in the light of historical, comparative and constitutional perspective and also the Statement of Objects and Reasons for the enactment of article 300-A may be abstracted here:

Public purpose

1.Deprivation of property within the meaning of article 300-A, generally speaking, must take place for public purpose or public interest.

2. Any law, which deprives a person of his property for private interest, will be unlawful and unfair and undermines the rule of law and can be subjected to judicial review.

3.However, whether the purpose is primarily public or private has to be decided by the legislature, which of course should be made known.

4.The concept of public purpose has been given fairly expansive meaning which has to be justified upon the purpose and object of the statute and the policy of the legislation.

5.Public purpose is, therefore, a condition precedent, for invoking article 300-A. In other words, "the requirement of public purpose is invariably the rule for depriving a person of his property, violation of which is amenable to judicial review."

Compensation

1.The right to claim compensation or the obligation to pay compensation, though not expressly included in Article 300-A, "it can be inferred in that article."

2.If the state deprives a person of his property with no-compensation or nil compensation, it is obligated to justify its stand on justifiable grounds depending upon the legislative policy, object and purpose of the statute and host of other factors. Measures designed to achieve greater social justice, for instance, may call for lesser compensation, and such a limitation by itself will not make legislation invalid or unconstitutional or confiscatory.

3.Article 300-A clearly embodies the doctrine of 'rule of law', which implies that the law permitting deprivation has to be 'just, fair and reasonable'; that is, the limitation or restriction imposed on private property, including its deprivation should not be arbitrary or excessive or beyond what is required in public interest.

4.Thus, in each case on the issue of compensation, courts will have to examine the scheme of the impugned Act, its object, purpose as also the question whether payment of nil compensation or nominal compensation would make the impugned law unjust, unfair or unreasonable in terms of other provisions of the Constitution.

Despite the cessation of right to property as a fundamental right, the apex court, through inductive reasoning, has made any deprivation of private property subject to 'public purpose' and 'compensation' as conditions precedent. This indeed is one of fundamental principles of a democratic social order inherent in "all the provisions" of our Constitution, spelling out emphatically that "any interference with the peaceful enjoyment of possession should be lawful."

International law

Deprivation of property under article 300-A has serious implications in the context of international law and international investment agreements. This is so inasmuch as whenever a foreign investor operates within the territory of a host country, the investor and his properties are subject to the legislative control of the host country, along with the international treaties or agreements. It becomes, therefore, imperative to dispel any misgiving about the operation of article 300-A by conveying the foreign investors in the tone and tenor of the Constitution Bench: "Let the message, therefore, be loud and clear, that the rule of law exists in this country even when we interpret a statute, which has the blessings of Article 300-A."

However, lest the basic objective of the constitutional transformation from the 'fundamental right' to property to the 'statutory right' "simpliciter" is lost, the Constitution Bench has circumscribed the role of courts in the exercise of their power of judicial review. This has been done by judicially prescribing that the courts should not strike down a statute or a statutory provision, more especially when the right to property is no more a fundamental right, simply on the plea that the element of subjectivity makes their policy decision unreasonable, arbitrary or disproportionate. Else, "the court will be substituting its wisdom to that of the legislature, which is impermissible in our constitutional democracy."

The writer is the ex-Director (Academics), Chandigarh Judicial Academy.