Is SC’s Sahara-Birla papers judgment a blow for or to democracy?

If courts are chary of initiating “process of law” which could undermine authority of a Constitutional functionary, what mechanisms can citizens use to ensure “rule of law” over said functionaries

Photo by Sonu Mehta/Hindustan Times via Getty Images

Ruchi Gupta

Updated: 28 Jun 2017, 3:32 PM

The Supreme Court’s dismissal of Common Cause’s plea for a probe into the papers [hereafter Papers] recovered after Central Bureau of Investigation and Income Tax Department raids on offices of the Sahara and Birla groups, requires more deliberation than the binary Opposition versus Government snap judgment it has spawned. The Papers recovered, along with crores of unaccounted cash, purportedly named senior politicians across political parties, including most notably Prime Minister Modi when he was then the Chief Minister of Gujarat, as recipients of alleged bribes worth tens of crores.

The political ramifications clearly weighed on the judges’ mind when they struck down the petition stating, “There has to be some cogent material which is prima facie reliable…in case we do not insist for the same and order investigation, process of law can be misused and no democracy can function if investigation is set in motion against high Constitutional functionaries without cogent material”. This logic flies in the face of the Constitution Bench judgment of the Supreme Court in Lalita Kumari case (2014) 2 SCC 1, wherein the Court held that “if the information given clearly mentions the commission of a cognizable offence, there is no other option but to register an FIR forthwith. Other considerations are not relevant at the stage of registration of FIR, such as, whether the information is falsely given, whether the information is genuine, whether the information is credible, etc. These are the issues that have to be verified during the investigation of the FIR”. With this context, the following observations are pertinent while evaluating the judgment and its impact on constitutional democracy.

Even before the judgment, oral observations by the bench dismissing the validity of the Papers had significantly undermined the Opposition’s demand of the Government (not the Court) for an independent probe. This is because in the face of a recalcitrant Government, the judiciary is seen as the last bulwark to institute accountability in public life, flowing from its role as a neutral arbiter of right and wrong. However, while the Court may be neutral, it is important to note that its rulings are bench specific. Two judges—former Supreme Court judge and Former Lokayukta of Karnataka, Justice Santosh Hegde and former Chief Justice of Delhi High Court, Justice AP Shah—among others wrote to the Central Board of Direct Taxes asking it to forward the Sahara Birla papers to the CBI for a thorough investigation. These two former judges perused the same papers that the SC bench did and came to the conclusion that the circumstances (raids, unaccounted cash, IT Dept interrogation etc) “make out more than an adequate case for directing a credible and independent investigation” as per law. Both judges are held in very high esteem. In fact, Justice Shah was appointed by the current Government to look into the high profile Reliance-ONGC dispute. It follows that the SC judgment is very much specific to the bench and while the judgment represents closure of the legal avenue to force investigation, it is by no means the last word on the relevance and authenticity of the papers.

In fact, some aspects of the justification marshalled by the Court to dismiss the plea are particularly weak. For instance, the Supreme Court held, “We find the materials placed on record in Sahara and Birla case are random computer sheets, diaries, emails, etc. Those are not maintained in required manner. Further, in the case of Sahara, the Income Tax Settlement Commission [ITSC] has already concluded that those are not admissible”. This is counter-intuitive. Large amount of unaccounted cash (black money)—₹25 crores and ₹137 crores—were found during raids on Birla and Sahara. Black money by definition is kept off the books. It follows that black money transactions too will not be “maintained in required manner”. Records maintained strictly for internal use are bound to be cursory and cryptic since they are expressly meant to evade third party verification. To hold further investigation hostage to the informal nature of these records is clearly untenable since their “evidentiary value” can be determined only through investigation in the first place. In fact, unlike the scribbles of the Jain Hawala case, there is more than enough information available to initiate an investigation given that the Papers record in specific and verifiable detail the date, place, amount of bribe, name of person who gave the bribe, and the recipients of bribe. Moreover, the ITSC order that the Supreme Court referred to buttress its claim that the papers were fabricated is itself under cloud because of the unprecedented haste with which it overruled counterclaims by the IT Department to provide immunity to Sahara. The IT Department had on the contrary held that the documents were credible because on the basis of those very documents alone, Sahara had surrendered income of ₹1,217 crores.

Finally, with the Court chary of initiating a “process of law”, which could undermine the authority of a Constitutional functionary, it is not clear what institutional mechanisms are available to the citizen to ensure the “rule of law” over said functionaries. The Central Government has not appointed the Lokpal—whose very raison d'être is to look into such allegations of political corruption – for the last two years. This follows a pattern established by the Prime Minister while he was the Chief Minister of Gujarat when he kept the post of the state Lokayukta vacant for nine years. When Justice Mehta was appointed as the Lokayukta by the Governor in 2011, the Gujarat Government under Chief Minister Modi appealed against the appointment. After a protracted legal battle, the SC upheld the appointment in January 2013. It is notable that the Gujarat Government then filed a review petition and curative petition against the order leading Justice Mehta to resign in August 2013. In his letter of resignation to the Governor, Justice Mehta wrote that “A Lokayukta unwanted by the government cannot get all the necessary and timely support from a reluctant government”. At the same time, the Gujarat Government also amended the Lokayukta Act to give the Chief Minister the sole power of appointment, overriding Opposition protests.

With the above context, it is for the reader to judge whether the Supreme Court ruling was a blow for or to democracy.

Ruchi Gupta is associated with the Congress party, and tweets at @guptar. Views expressed are personal