The year of the Supreme Court

OUT OF COURT

In the year that is coming to a close, the Supreme Court lived up to the claim that it is the most powerful court under any democratic Constitution.

It directed the CBI to file a first information report against the then Uttar Pradesh Chief Minister Mayawati in the Taj Corridor scam, upbraided Gujarat Chief Minister Narendra Modi for the shoddy investigations in the communal riots cases, acquitted Tamil Nadu Chief minister Jayalalithaa of corruption charges and struck down a central law which diluted its earlier order on disclosure of personal details of elected representatives.

The Supreme Court has also stalled the use of legislative privileges against the media in The Hindu case. It interfered in inter-state disputes like distribution of the waters of the Cauvery and Krishna rivers and the construction of the Sutlej-Yamuna canal.

While the judiciary pointed its finger at politicians in gross cases, a few fingers were unwittingly pointed against itself. Some high court judges were caught in financial and sex scandals, leading to resignations.

Some others fought back and slapped contempt of court charges against a number of newspapers. Chief Justice V N Khare confessed that he could not get a wink of sleep for several days after reading the news reports of the sexcapades. However, he stayed the proceedings against the newspapers.

On the economic front, the most far-reaching judgement of the Supreme Court was in the Bharat Petroleum Corporation Limited disinvestment case. It stalled the much-touted government policy on a technical ground.

However, the government has managed to reopen the question in another case, and the Chief Justice has promised to take a second look at the disinvestment issue. But for the moment, it is full stop for the disinvestment policy.

Another significant judgement was the one permitting foreign investment through the Mauritius route. The court upheld the circular issued by the Central Board of Direct Taxes exempting Mauritius-based foreign investment companies from paying capital gains tax on their investments in India under the Double Taxation Avoidance Treaty between the two countries. Earlier, the Delhi High Court had quashed the circular, leading to drastic reduction in foreign investments in this country.

The pharmaceutical industry and the Central government were caught in a logjam throughout the year over the drug price policy. The government will not be able to announce its new drug price control order as the Supreme Court has stayed the implementation of the earlier one.

The government argues that the court should not interfere in the policy and it was a misconceived apprehension that many life-saving drugs have not been included in the national list of essential drugs.

However, those who oppose the price control order argue that the criterion of cost-effectiveness adopted by the government was faulty. If that was applied, only 34 of the 356 essential drugs would be left in the price control order.

In contrast, the telecom industry made peace with itself and the government when it decided to avoid the litigation route towards the end of the year. The tobacco industry is, meanwhile, on tenterhooks due to the court's ban on cigarette ads and other restrictions pending the Bill in Parliament.

Three Acts of Parliament faced serious trouble in the Supreme Court. The court has asked the government to amend the Securitisation Act appropriately so that the harsh provisions against debtors were made fair and reasonable.

The government has not brought in any acceptable suggestions yet. The packing of the Competition Commission of India with bureaucrats provoked stinging comments from the Supreme Court. That law also may have to be amended to give adequate representation to the judiciary.

Since most of these cases have been carried over to the New Year, the answers the Supreme Court gives to these issues are bound to create significant impact on politics and the economy. With an election year around, one should also expect a number of new constitutional riddles to land in the lap of the court.