Doing business in Kashmir
Everyone has a view on the troubled northern state. But what if the laws that govern it were applied to the corporate world?
Kashmir (it matters not if social media warriors had even considered volunteering for basic National Cadet Corps service as students), this column will simply seek to translate what living in Kashmir can feel like if the legal framework applicable there were to be made applicable to an Indian corporate.
Let’s take the simplest and the most obvious cause of state high-handedness in areas like Kashmir (as indeed large parts of the North East) and see how it would feel to work in corporate India if the same cause were replicated. Essentially, let’s adapt the law applicable in Kashmir to the law governing running business in corporate India. This is necessary since most people with the strongest views on Article 370, which reflects the contract by which Kashmir joined the Indian Union, have never read the Armed Forces (Jammu & Kashmir) Special Power Act, 1990 (the dreaded “AFSPA”), which governs life on the street in Kashmir.
It is easy to read, however uneasy the reading can be for the reader. It has barely eight effective provisions. In a nutshell, any government officer can do anything with your life and property, and never be called to account. Forget having checks and balances in the form of tribunals such as the National Company Law Tribunal or the Securities Appellate Tribunal. Forget bringing errant public servants to book through anti-corruption measures in courts of law. Read on for what would govern life under AFSPA in the corporate or industrial world:
If the government is of the opinion that any industry poses danger that use of severe measures is necessary to prevent violations of law, the government may declare the whole or any part of such industry to be a “disturbed industry”.
Any government officer may, if he is of the opinion that it is necessary, fire upon or otherwise use force, even to
1. 2.
the causing of death, against any person, who is acting in contravention of any law or order, do so in a disturbed industry.
Any government officer may, in a disturbed industry, destroy any place from which violation of law is likely to be made or attempted to be made.
Any government officer may arrest without warrant any person against whom a reasonable suspicion exists that he is about to commit an
3. 4.
offence and may use such force as may be necessary to arrest.
Any government officer may enter and search, without warrant, any premises to effect such arrest or to recover any person believed to be wrongfully restrained or confined or any property reasonably suspected to be stolen property, and may for that purpose use such force as may be necessary, and seize any such property.
Any government officer may stop,
5. 6.
search and seize any vehicle reasonably suspected to be carrying any person against whom a reasonable suspicion exists that he has committed or is about to commit an offence, and may, for that purpose, use such force as may be necessary to effect such stoppage, search or seizure.
Every person making a search under this Act shall have the power to break open the lock of any door, almirah, safe, box, cupboard, drawer, package or other thing, if the key is withheld.
7. 8.
Without approval of the government, no person who has used or claims to have used powers under this law can be prosecuted or sued.
Not too long ago, the Securities and Exchange Board of India Act was sought to be amended to permit search and seizures without the need for even a warrant. In fact, a Presidential Ordinance contained such provisions. A Parliamentary Standing Committee met various stakeholders and representatives of industry and rightly killed the provision although it was believed that “war like” powers were necessary to combat securities market abuse.
The Finance Act, 2017, has indeed brought in a provision protecting the tax department from having to explain how it had “reason to believe” or “reason to suspect” that led to a search and seizure operation. When such powers begin to get mildly used, fellow Indians living in the corporate bubble will get a faint whiff of what life can be like when you run a grocery store in the streets of Kashmir or the North East. Until then, there will be no let up in the enthusiasm to wage war on social media against civilians being punished for protesting against excesses encouraged by incentives embedded in the legal policy governing these regions.