Special CBI judge O.P. Saini acquitted all the accused in the 2G spectrum allocation scam cases. The accused included A Raja, then Telecom Minister, K. Kanimozhi, daughter of M. Karunanidhi of the DMK, Shahid Balwa, Sanjay Chandra, Reliance Telecom and Gautam Doshi, amongst others. An accompanying case had Ravi Ruia, Anshuman Ruia and Essar Group companies as accused. The scam pertained to the allocation of telecom licences arbitrarily, in a manner which the accused companies were allegedly favoured. The main allegations included manipulation of administrative procedures, policy and law in order to allow ineligible companies to obtain licences. The investigation had also shown that Rs. 200 crore had been paid as illegal gratification.
The Centre for PIL had filed a petition seeking a court-monitored investigation into the 2G scam by the CBI, which was granted by Supreme Court in December 2010 (Centre for PIL & Ors vs Union Of India & Ors, C.A. 10660 of 2010, order dated 16.12.2010). The court not only monitored the investigation, but set up a special court for the trial and also appointed a special public prosecutor, U.U. Lalit, then Senior Advocate. Lalit was elevated as Supreme Court judge in 2014, after the evidence in the two main cases was almost complete. Subsequently, Senior Advocate Anand Grover was appointed as the Special Public Prosecutor by the Supreme Court.
The judgement suffers from a number of serious legal infirmities. It ignores the realities of government functioning and on this basis proceeds to disbelieve crucial evidence adduced by the prosecution. For example, the court found that the evidence of some junior officers that A. Raja had passed on oral instructions through his private secretary could not be believed because they were not recorded in the file. It is well known that corrupt senior officers and ministers act through oral instructions, none of which are allowed on file. To insist that persons will be held responsible only if the illegal instructions are in writing has the effect of giving the green signal to massive corruption in the government. Additionally, the court has focused on technicalities when addressing the movement of Rs. 200 crore from a company owned by Shahid Balwa, who had obtained a telecom licence through another company, to a DMK mouth piece, Kalignar TV, eventually rejecting the prosecution evidence in this regard as well.
The judgment, which has en masse rejected important prosecution evidence on legally tenuous principles, strikes a body blow to the anti-corruption movement in the country. The CBI and Enforcement Directorate, soon after the pronouncement of the judgment, have stated that they will appeal against the judgment in the Delhi High Court. [CBI v A Raja and Ors, Complaint Case No. 01 of 2011, dated 21.12.2017]
Major decisions:
- Supreme Court overturns NCLAT judgment on operational creditors: The Supreme Court has answered two important questions pertaining to the Insolvency and Bankruptcy Code, determining the status of the certificate under Section 9(3)(c) and a demand notice of an unpaid operational debt issued by a lawyer on behalf of the operational creditor. The NCLT and NCLAT have on various occasions held that the operational creditor has to mandatorily get a banker’s certificate that it did not receive the defaulted amount after the notice. Further, it had been held if the notice under section 8 had not been issued by an authorised representative of the company itself, it will be void. The Supreme Court, in the present judgment, held that the submission of a banker’s certificate was not mandatory, but directory. On the point of lawyer issuing notice, the Bench observed that Section 8 of the Code talks of the operational creditor “delivering” the demand notice and not “issuing” it. It was, therefore, obvious, the Bench concluded, that such notice could be made by an authorised agent only. The forms in the Code require the person serving demand notice to “state position with or in relation to the operational creditor” and the Supreme Court found that this was a very wide expression, which specifically includes a position, which, is outside or indirectly related to the operational creditor, including a lawyer [Macquarie v Shilpi Cable Technologies, Civil Appeal No. 15135, order dated 15.12.2017].
- Notice issued on PIL to include farmers in OBC: The Supreme Court has issued a notice on a PIL to the Centre, Gujarat Government and the National Commission for Backward Classes, praying that ‘farmers’ should be included in the category of OBC. It also challenges an Office Memorandum issued by the Centre and the Gujarat Government, which increased the income slab for OBC from Rs 6 to Rs 8 lakh arguing that the same was without any basis. It also calls for the Court to lay down guidelines for determining the income limits to guide the government in the future [Rajeshkumar Patel v Union of India, Writ Petition (Civil) 1177/2017, order dated 15.12.2017].
- Penalty of Rs 1 lakh imposed on petitioner seeking imposition of Prohibition: An NGO from Vishakhapatnam had filed a petition in the Supreme Court asking it to direct the implementation of the Directive Principles of State Policy in Article 47 of the Constitution, which requires the state to work towards the prohibition of intoxicating drinks, amongst others. The NGO had conducted a study in the slums of Vishakhapatnam and came to the conclusion that increased alcohol consumption was a cause for the increase in violent incidents, illnesses, mental disorders etc. It sought an audit on manufacture, distribution and supply, sale and consumption of various types of liquor, and an appropriate direction to the Union of India and respondents to prepare an action plan with regard to creating awareness on ill-effects of consumption of alcohol. On hearing the petition, the court not only dismissed it but also imposed a penalty of Rs. 1 lakh [Chaitanya Sravanthi v Union of India, Writ Petition (Civil) Nos. 1186/2017, order dated 15.12.2017].
- Notice issued on PIL challenging the day time ban on condom ads: The Rajasthan High Court has issued notice to the Centre in a PIL challenging the recent ban on condom ads between 6 am and 10 pm, indicating that such ads are indecent for children. The petitioner, an NGO working with HIV +ve persons, argued that the directive is without any basis and ignorant of the situation prevailing in the country, highlighting how the awareness about condoms is very low in rural areas. It further argued that the ban will be a hindrance in the plans launched by the government and NGOs to promote safe sex, especially among young teens [Global Alliance for Human Rights v Union of India, Civil Writ No. 23387/2017, order dated 20.12.2017].
- Delhi footwear manufacturers to pay damages to Christian Louboutin for infringement of trademark: The Delhi High Court has awarded damages to the French Designer, Christian Louboutin, for the infringement of its trademark ‘red sole’, which has over the years become very famous. In India, Louboutin has very limited distribution, having one store in Delhi and one in Mumbai. Two dealers in Delhi were using this signature design on their footwear. The red sole design was found to enjoy trans-border reputation, and in India, because of various factors including tourist travel, in-flight magazines, Internet and broadcasting of various films and television programmes. The goodwill of the red sole was found to have spilled over to India from various countries and Indian customers found to be well aware of its reputation. Thus the traders were ordered to pay damages [Christian Louboutin v Pawan Kumar, Civil Suit (Commercial) 714/2016, order dated 12.12.2017].
- Accused in Ryan school murder case to be tried as an adult: The Juvenile Justice Board has ruled that the 16 year old student, accused of killing Pradyumnan Thakur at Ryan International School, will be tried as an adult. It was determined that the offence was heinous and the facts of the case warranted such treatment, as the teenager was mature enough to understand the consequences of his acts. The Board relied on various medico-legal reports to come to the conclusion. The Board, however, clarified that if he was to be convicted, he would be kept in a correctional home till he turns 21 and during the duration of the trial he will be kept in an observational home in Faridabad.
- Wife going to work against the wishes of the husband is not cruelty: The Allahabad High Court has ruled that a wife working against the wishes of her husband cannot qualify as ‘cruelty’, a ground for divorce under the Hindu Marriage Act. The Court underscored the freedom of a woman to work and develop her personality. Further, when the woman marries a man, she is not to be treated as subservient to him, but equal to him. Thus, the woman joining a service against the wishes of her husband cannot be grounds of divorce [ Gurpreet Kaur v Shri Rajeev Singh, First Appeal Defective No. 6 of 2011, order dated 18.12.2017].
Other legal developments:
- MCA allows filing of overdue annual returns and financial statements by disqualified directors until March 31: Directors recently disqualified under Section 164(2) of the Companies Act for non filing of annual statements will be allowed to file them under a scheme of condonation. The new date of filing these overdue statements is March 31, 2018. Earlier the MCA had disqualified more than 3 lakh directors in a move to combat the inflow of black money.
- No subsidy diversion without Aadhaar holder’s informed consent: The UIDAI authority has issued a directive to banks and National Payments Corporation of India indicating that the bank account to which LPG and other subsidies will be received cannot be switched without an express consent of the Aadhaar card holder. This directive has come in the light of incidents being reported where, when individuals linked their Aadhaar with their Airtel Payments Bank or a second bank account, they stopped receiving the money in the account they had specified earlier. Banks and Airtel had automatically switched the accounts with NPCI Aadhaar Payments Mapper.
Prepared by Amritananda Chakravorty ([email protected]) and Mihir Samson ([email protected]), Delhi based practicing Advocates.
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