A Supreme Court of India verdict on a national ban on digital currencies has reportedly now been delayed to the end of the year. Photo: Reuters
The Supreme Court of India. Photo: Reuters

As India’s economy continued to slow Prime Minister Narendra Modi went around the United States on a visit to the United Nations last week, extolling India’s strengths as a great investment destination. Among the virtues for future investors that he mentioned: an independent judiciary.

But a flurry of controversial decisions taken by the Supreme Court over recent weeks has raised questions about the “independence” of the Indian judiciary and made prospective investors nervous. The court has passed arbitrary orders on the promotion or transfer of senior judges and kept crucial cases pending for an inordinate period while doing little to rein in the government’s excesses.

One senior advocate, Harish Salve, blamed the Supreme Court for the nation’s economic slowdown. Salve said in an interview that the slowdown began with Court’s judgment on the “2G scam” case in 2012. The “2G scam” happened under the watch of previous prime minister Manmohan Singh. It was alleged that licenses for 2G spectrum were given out after top officials received bribes.

A public interest litigation in the Supreme Court led to the cancelation of 122 licenses given to eight companies and sank investments made by several foreign telecom companies.

This, Salve said, had a negative impact on foreign investors. “I can understand holding people responsible for the wrong distribution of licenses in 2G,” he said. “Blanket cancellation of licenses where foreigners are investing … see, when a foreigner invested, it was your rule which said he must have an Indian partner. The foreigner did not know how the Indian partner got a license. Foreigners invested billions of dollars, and with one stroke of the pen, the Supreme Court knocked all of them out. That’s when the decline of the economy began.”

Foreign investors have sold $4.5 billion of Indian shares since June. This occurred after investors poured $45 billion into India’s stock market amid hope that the economy would flourish under Modi.

‘Not sure about judiciary’

But Salve’s lament only partly addressed what the highest echelons of India’s judiciary have witnessed currently. A top judge has resigned, while another one has been shunted out to a smaller court unceremoniously.

In India, a collegium of the most senior Supreme Court judges headed by the Chief Justice decide on the promotion and transfer of senior judges. The collegium is seen as a mechanism that carefully guards the independence of the judiciary.

However, the recent transfer of the Chief Justice of the Madras High Court, Justice Vijaya Kamlesh Tahilramani, to the Meghalaya High Court and her subsequent resignation raised disturbing questions.

Tahiramani, who had been heading a court with 75 judges, was moved to a court that has only three judges. The transfer of a High Court chief justice in such a manner is unheard of and goes against established norms.

Former Supreme Court judge Justice Ruma Pal believes the system is not working. “The mystique of the process, the small base from which the selections were made and the secrecy and confidentiality ensured that the process may, on occasions, make wrong appointments and, worse still, lend itself to nepotism.”

While sections of the Madras High Court Bar Council have questioned the lack of transparency about the exact reason for Tahiramani’s transfer, the collegium mentioned that the decision had been taken “in the interest of better administration of justice.”

Some investors have voiced concern. “While we may not understand the judicial reasoning of the judges, we are definitely concerned about the lack of consistency in India’s senior judiciary,” a senior investor, known for investing in technology startups, told Asia Times.

“In case of any dispute, the courts remain the last option. While we would like to minimize lawsuits, sometimes they become necessary to enforce contracts, or even push back against the government and its faulty policies. As investors, we are no longer sure about the Indian judiciary.”

Another investment banker pointed out that inconsistent judgments are proving to be a major hurdle for investments. “We have had major issues with taxation for a number of years. Most of these disputes head to the High Courts or the Supreme Courts. From an investment perspective, while we sympathize with the government on some issues, the courts have not inspired any confidence.”

A former Indian diplomat, who handled investment and trade issues in service, pointed out that an independent judiciary used to be a key attraction for investors.

“After the 1991 liberalization of the Indian economy, many investors used to approach our missions for details on investing in India,” the former diplomat told Asia Times. “An independent judiciary was always a major attraction for them. They need the judiciary to protect them against government excesses and tax or contractual disputes that can undermine their investments.”

Independent judiciary at stake

Meanwhile, the judges’ collegium came under criticism for the transfer of another judge. In May it had recommended that Justice Akil Kureshi, a senior judge in the Bombay High Court, be appointed as chief justice of Madhya Pradesh High Court. The union government stalled the approval for months even as it cleared the names of other judges for elevation. The collegium later changed its decision after a letter from the national government calling for it to reconsider Kureshi’s post and appointed him as chief justice of Tripura, a much smaller high court.

Kureshi, as a high court judge in 2010, had sent Amit Shah, Union home minister and former Bharatiya Janata Party (BJP) president, to police custody in the Sohrabuddin fake encounter case.

Sohrabuddin was a wanted criminal with around 60 pending cases when he was allegedly killed in police custody in 2005, when Amit Shah was the Gujarat home minister.

Justice Tahilramani, one of only two women Chief Justices at present, had also upheld the conviction and life imprisonment of 11 accused in the Bilkis Bano gang-rape case. The incident took place in 2002 during anti-muslim riots in Gujarat while Modi was the state’s chief minister.

The Supreme Court’s reputation as an independent institution was also questioned when it found “no time to consider other cases” with the Ayodhya temple destruction Babri Masjid case underway.

Kashmir petitions delayed

The Court also pushed the date of hearing several petitions relating to the lockdown of Kashmir forward to November 14. That delay makes the issue complicated, as Jammu and Kashmir will cease to be a state on October 31. But the Court brushed aside such concerns by saying it was still possible for the Reorganization Act, covering the division and downgrading of the state, to be rolled back.

The petitions challenge the constitutional validity of BJP’s move to revoke Article 370 in the state. They also raise questions about human rights violations, liberty, press freedom and right to life of close to seven million people under a communication blockade since August 5.

The Supreme Court has also been accused of sending out the wrong message with its way of dealing with writs of habeas corpus.

Tamil Nadu Minister of Parliament Vaiko had filed a habeas corpus petition on September 11 to get his friend and former Jammu and Kashmir chief minister Farooq Abdullah before the court.

A day before the petition was due to be heard, the authorities passed an order for Abdullah to be detained. The Supreme Court bench headed by Chief Justice Ranjan Gogoi said Abdullah had been detained under the Public Safety Act and reasoned that there were no issues of merit in the petition and dismissed it. Ironically, the government had maintained that Abdullah was not in detention even though his movements, along with other politicians, had been restricted.

Meanwhile, the Chief Justice’s observation in Court, linking cold weather to the freedom to move around in Srinagar, once again, in critics’ view, highlighted that provisions of the law are being interpreted along extra-Constitutional lines.

Iltija Mufti, daughter of detained politician and former Jammu and Kashmir chief minister Mehbooba Mufti, had sought the court’s permission to travel freely in Srinagar and meet her mother. Although the court granted her permission, CJI Gogoi in an oral observation asked her: “Why do you want to move around? It is very cold in Srinagar.”

In over 40 transfers of High Court judges over the last two years, the collegium has given the same justification that these moves were done “in the interest of better administration of justice.”

However, the Deccan Herald said that some reports suggested that Justice Tahilramani’s transfer was punishment for refusal to facilitate the appointment, pushed by senior judges in the Supreme Court, of lawyers as High Court judges.

The Chief Justice of India then said he had told the Central Bureau of Investigation to take action on an Intelligence Bureau report that accused Justice Tahilramani of “irregularities” in regard to the purchase of two flats in Chennai, Tamil Nadu.

This has raised serious questions as to why the collegium approved her transfer to another court. The alleged “irregularities” were also noted after Justice Tahilramani resigned, making the decision seem like an afterthought. Would this have been overlooked if Justice Tahilramani confirmed the collegium’s decision and not resigned?

These decisions have led to speculation on whether India’s top court truly is independent and free of political influence or manipulation.

And this has undermined Modi’s claim at the Bloomberg Global Business Forum in New York that India is a stable investment destination for global investors, as the country grapples with its economic slowdown.

The judiciary’s supposed “independence” does not seem as inspiring as the prime minister would like investors to believe.

(Additional reporting by Saikat Datta)

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