M J Antony: Judiciary clears way for policymakers

OUT OF COURT

The Supreme Court has retreated one more step from the economic field which it believes belongs to experts.

The judiciary is persistently accused of interfering in political and social issues. It recently issued a notice to the Goa Speaker which he refused to accept. In the recent past it had intervened in the making or unmaking of governments in some states. Several cases touching upon social problems are before the courts. Admissions to nursery schools, speed governors in Delhi buses, littering on the roads all come under the court's scan.

However, one field from where the judiciary is continuously withdrawing is the economic policy. With each judgement, the Supreme Court has pulled out of this ground one step. The latest instance was the decision in Vayudoot Karamchari Sangh vs Indian Airlines Ltd.

There was a long-standing dispute among the Indian Airlines management, its employees and the erstwhile Vayudoot staff over their seniority and fitment after the merger of two airlines in 1993. When the issues were taken to the Delhi high court, the single judge asked the government to reframe the policy of cadre merger. However, a division bench set aside the order, leading to appeals in the Supreme Court.

The employees lost their case as the apex court asserted that the authorities were not bound to negotiate with them before formulating the policy regarding the post-merger arrangement regarding the work placement. The policy would not be rendered arbitrary merely because the employees' associations were not consulted.

The main judgement relied upon in this case is the 2002 decision in the Balco Employees Union dispute. The government wanted to disinvest the public sector undertaking and the employees complained that they were not party to the policy decision. The Supreme Court ruled that the government was not bound to consult them. The company was 'state' for the purpose of law as it was a government undertaking and it should abide by the principles of fairness, non-discrimination and non-arbitrariness. However, the judgement emphasised that "there is no principle of natural justice which requires prior notice and hearing to persons who are generally affected as a class by an economic policy decision of the government."

In the present case, the Supreme Court once again underlined its stand that unless a policy decision was arbitrary, unreasonable or capricious, it could not be challenged by the employees. These are matters regarding which judges and lawyers can hardly be expected to have much knowledge by reason of their training and experience. In the case of the merger of two undertakings, experts in the field conduct lengthy deliberations and discuss all aspects of the fusion. Their decision cannot be easily modified or set aside by the judiciary, the judgement said.

This hands-off policy is the trend in other fields also. In Zippers' Karamchari Union vs Union of India, the employees challenged the sanction given to a Japanese project in Haryana. Rejecting their petition, the Supreme Court said: "In matters of trade and commerce, or economic policy, the wisdom of the government must be respected and courts cannot lightly interfere with the same unless such policy is contrary to the provisions of the Constitution or any law or such policy is wholly arbitrary."

In another judgement, PTR Exports vs Union of India, the Supreme Court gave a free hand to the government in export and import matters. It stressed that the exporters have no 'vested right' to get licences. It laid down certain rules in this context. Some of them:

When the government is satisfied that a change in the policy is necessary in public interest, it would be entitled to revise the policy and lay down a new policy.

The court would prefer to allow free play to the government to evolve fiscal policy in public interest and act upon the same.

The government is also free to determine priorities in the matter of allocation, allotment or utilisation of finances.

Such judgements from the Supreme Court have become more frequent, and they touch upon the various aspects of the economic life of the country. This is a trend which started with the economic liberalisation launched in the early 1990s. This is in clear contrast to the aggressive intervention of the courts in matters of civil liberties and political corruption. Both trends benefit society, and both attract brickbats from expected quarters.