By K Raveendran
The Supreme Court verdict on interest waiver during the moratorium announced in the wake of Covid pandemic and the consequent lockdown upholds the importance of natural justice in the interpretation of law, at the same time steering clear of areas that are beyond the expertise of the court.
As an approach, it is laudable. But it raises the question as to whether the court has been consistent in following the same approach in all the matters that come for its consideration from time to time. If there is no consistency, it is not only bad in terms of jurisprudence, it would amount to denial of justice to a large number of affected parties.
Even while excusing itself from interfering with policy issues, the court has acted decisively in striking down penal interest for the period of the moratorium, which was duly allowed by the Reserve Bank and the government. Penal interest for wilful defaulters is one thing and subjecting victims of natural calamities or unexpected turn of events quite another and the court was firm on such stand.
But overall, the judges stuck to the position that courts should stay away areas which are primarily the domain of the national authority and that its intervention in such matters can be justified only in exceptional cases of violation of basis rights of the affected people or natural justice, more than the law.
It has been a well-established policy that the courts will not concern themselves with the intricacies of trade and commerce and that it is beyond the scope of judicial review to consider whether one set of policies would be better than another set. Wisdom and advisability of economic policy are ordinarily not amenable to judicial review, the court pointed out.
The court was very clear the legislature should be allowed free play as it has to deal with complex problems which do not admit of solution through any doctrinaire or straitjacket formula and this particularly true in case of legislation dealing with economic matters.
The observation by the court that it can only strike down some or entire directions issued by the authority under question, in this case the RBI, if it is satisfied that the directions were wholly unreasonable or violative of any provisions of the Constitution or any statute is perfect logic by all yardsticks.
But it is doubtful whether the courts have consistently followed the norm. There are any number of cases where natural justice has been overlooked in preference to the letter of the law, which may be based on a strictly mechanical view of issue under consideration.
In fact, it must be incumbent of the courts to see whether any particular law has violated natural justice, although it may have come through all the required legislative process. The courts may have done this in cases relating to fundamental rights as enshrined in the Constitution, but there are so many other instances where the rules upheld by the court may not necessarily have served the principle of natural justice.
That is why it is important that the logic employed by the court in striking down penal interest for the period of moratorium is applied more broadly and uniformly. The court’s jurisdiction or expertise in the subject matter of consideration should not be an excuse not to intervene when there is gross violation of natural justice or even common sense, for that matter. Because there is no sense superior to common sense and this has been a well-accepted principle in jurisprudence.
It would have been a joke to declare a moratorium, which is a waiver of the responsibility to make whatever payment with the stipulated time and then charge penal interest for failure to pay on time. This is what the central government has been asking for in the interest of securing the robustness of the banking sector. It would be like giving someone a gift and then asking for its payment. There are many business models that flee customers by resorting to such unethical practices.
But that is not something any responsible government can do, although it cannot be said with any amount of certainty that our governments have not been practising such ‘craft’ on the people. (IPA Service)