He says an attempt is being made to dilute various legislations which could result in a spurt in corporate offences Proposed Act will take off deterrence
The letter of Justice AP Shah, former Chief Justice of the Delhi High Court and former Chairman of the Law Commission of India, to Prime Minister Narendra Modi asking the latter on de-criminalising economic offences in India that has become a hot topic in legal circles.
Justice Shah in his letter to the Prime Minister stated “instead of increasing transparency and accountability and making deterrents for wrong doers, an attempt is being made to dilute various legislations which could result in a spurt in corporate offences especially”. Former judges and several advocates of the Hyderabad High Court while supporting the views of Justice Shah felt that it was the primary responsibility of the Legislature to make deterrent laws that would protect the civil society from wrong doers and also ensure the strict enforcement of the existing statutes.
Justice Gopalakrishna Tamada, former judge of the Hyderabad High Court, felt it would not be good for the civil society if elected governments changed or diluted the spirit of laws as per their convenience.
Referring to the demand of Justice Shah for filing an appeal in the Satyam Computers fraud case, the former judge felt that “It is always good for governments, either at the Centre or at the state, to appeal whenever an adverse judgement is given and not filing an appeal would certainly create doubts in the minds of the public that the government had not appealed only to protect somebody.”
Justice Shah demanded that the Central Bureau of Investigation (CBI) file an appeal against the orders of the Sessions Court granting bail to the accused in the Satyam scam to restore public confidence in the rule of law.
Citing the demand of Justice Shah for the appointment the Lokpal, Justice Gopalakrishna said that he was unable to understand why the NDA government, which came to power on an anti-corruption plank, was delaying the appointment.
Referring to the intervention of the Supreme Court in 498 A of the IPC, which deals with dowry harassment cases, after many allegations of misuse of the provision, the former judge felt that the Union government had the power to amend laws whenever there were allegations of misuse, but in a democratic country the rulers had to make the statutes for public good not to protect wrong doers.
Justice P. Lakshman Reddy, former judge of the AP High Court, while appreciating the move of Justice Shah said, “No political party in the country is sincere enough to do public good. They are dependent on corporate funding.” He asked why corporates were not brought under the purview of the Right to Information Act which would enable citizens to know the source of funding of political parties. He said that on this issue all the political parties are together to protect the interests of the corporates. Referring to the alleged attempts to dilute the RTI Act, the former judge said “The existing RTI Act is a strong weapon in the hands of the public and diluting it is unfortunate, though there is an increase in cases of killing and threatening of whistle blowers.”
He said that the rulers had no guts to attempt the Anti-Defection Law which was aiding unethical politics, but they always made efforts to make laws to protect big wigs. He said “It is unfortunate that the government is crushing the voices raised; we are seeing the government question even the right of the people to approach courts.”
Mr C. Damodar Reddy, president of the Telangana High Court Advocates Association, referring to the proposed amendments to the RTI Act that the proceedings pending before the Commission shall abate on the death of the appellant, said that Justice Shah rightly pointed out that “such provision provides a perverse incentive to vested interests to silence the information seeker”. Citing the remarks of Justice Shah on political appointments to PSUs, Mr Damodar Reddy said PSUs were the spine of the country’s economy and making them political rehabilitation centres and filling them with persons who did not possess the required skills would weaken the economy of the country. Justice AP Shah who had also served as Chairman of the Law Commission, in his letter pointed out that “any campaign against corruption can become effective only when there is a basic change in the mindset of the government in favour of greater transparency and accountability through civil society participation at all levels of decision taking, devolution of authority and decentralisation of governance”.
He called for “strengthening of the democratic processes in every sphere of activity of the government” and noted that “bits and pieces of legislation without an overarching objective” would not deliver. He felt that the proposed decriminalisation of the Companies Act, 2013, would only take away deterrence.
He said that at a time when cases like “Kingfisher Airlines and United Spirits (Vijay Mallya Group), Nirav Modi, Mehul Choksi, Fortis Healthcare, etc. have come to light and non-performing assets (NPAs) of banks are at an all-time high of about `10 lakh crore, the Companies Act, which was expected to arrest any further decay of the system, is “ironically proposed to be decriminalised, that too with undue haste”.
He said that while most of the offences were anyway compoundable, the committee had to evaluate if existing compoundable offences could be treated as mere “civil offences” and if the existing non-compoundable offences could be categorised as “compoundable offences”.
While opposing the appointment of BJP leaders to PSU boards, he accused the NDA government of showing “utter callousness” in dealing with the management of public sector undertakings. While noting that at least 10 BJP politicians/spokespersons had been nominated on the boards of important PSUs,” he said such appointments “do not bode well for governance”.
Stressing the need for tightening of the provisions related to appointment of directors, he said there was no bar at present on any person, even if convicted by a court for tax evasion or money laundering, from becoming a director and this anomaly needed to be corrected urgently.
Justice Shah charged that the Finance Act, 2017 had surreptitiously done away with the limits on political donations prescribed under Section 182 of the Companies Act. He said the earlier limit of 7.5 per cent of the company’s average three year net profits was done away with and companies were no longer required to disclose the names of the parties to which the political donations were made.