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Can the govt claim immunity when entering contracts under the President’s name? Here’s what SC has ruled
The Supreme Court has held that the government, when entering into a contract under the President’s name, cannot claim immunity from the legal provisions of that contract under Article 299 of the Constitution, in a recent case.
A Bench led by Chief Justice of India (CJI) DY Chandrachud said, “Having considered the purpose and object of Article 299, we are of the clear opinion that a contract entered into in the name of the President of India, cannot and will not create an immunity against the application of any statutory prescription imposing conditions on parties to an agreement, when the Government chooses to enter into a contract”.
The case dealt with an application filed by Glock Asia-Pacific Limited, a pistol manufacturing company, against the Centre regarding the appointment of an arbitrator in a tender-related dispute.
Article 298 grants the Centre and the state governments the power to carry on trade or business, acquire, hold, and dispose of property, and make contracts for any purpose, while Article 299 delineates the manner in which these contracts will be concluded. Articles 298 and 299 came after the Constitution came into effect and the government entered into contracts even in the pre-independence era. According to the Crown Proceedings Act of 1947, the Crown could not be sued in court for a contract it entered into.
Article 299 of the Constitution provides that “all contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President or by the Governor of the State” and that all such contracts and “assurances of property made in the exercise of that power shall be executed” on behalf of the President or the Governor by persons in a manner as directed and authorised by them.
Further, the phrase ‘expressed to be made and executed’ under Article 299 (1) means that there must be a deed or contract in writing and that it should be executed by a person duly authorised by the President of the Governor on their behalf.
The objective behind Article 299(1), as per the 1954 top court ruling in ‘Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram & Ors’, is that there must be a definite procedure according to which contracts must be made by agents acting on the government’s behalf; otherwise, public funds may be depleted by unauthorized or illegitimate contracts. It implies that contracts not adhering to the manner given in Article 299(1) cannot be enforced by any contracting party.
However, Article 299 (2) says that essentially, neither the President nor the Governor can be personally held liable for such contracts.
The May 19 ruling delivered by the Bench, also comprising Justices PS Narasimha and JB Pardiwala, dealt with an application filed by Glock Asia-Pacific Limited against the Centre on the appointment of an arbitrator in a dispute.
Glock Asia Pacific entered into a contract with the Ministry of Home Affairs for the supply of 31,756 Glock pistols. Subsequently, there was a dispute between the two parties due to the Centre invoking a performance bank guarantee. A performance bank guarantee, similar to a letter of credit, is the bank’s promise that it will meet the debtor’s liabilities, provided that he fails to meet the contractual obligations.
Glock then issue a notice invoking arbitration, nominating a retired Delhi High Court judge as the sole arbitrator. When the government was called to accept this, it said that the arbitrator’s nomination violated one of the tender conditions that said an officer in the Law Ministry, appointed by the MHA Secretary, would be the arbitrator in case of a dispute.
Thus, Glock challenged this clause in the agreement, which allowed a government officer to resolve the difference between the two parties as an arbitrator, as one party here was the MHA itself.
(Courtesy:- The Indian Express, 30 May 2023)
Petitions against two PMLA provisions need to stop: Supreme Court
The Supreme Court on Monday said the trend of filing petitions challenging the constitutional validity of certain provisions of the Prevention of Money Laundering Act (PMLA) must stop, even as it decided to take up on Tuesday a batch of petitions filed by persons facing a probe in the alleged Chhattisgarh liquor scam case.
“You are challenging the vires of Section 50 and 63 of PMLA that is already decided by a three-judge bench of this Court in Vijay Madanlal Chaudhary & Others v Union of India (decided in July 2022),” the vacation bench of justices Bela M Trivedi and Prashant Kumar Mishra said. “Where is the question of challenging the vires again when the 3-judge bench decision is binding?”
Section 50 of PMLA deals with the powers of the Enforcement Directorate to summon any person whose attendance is considered necessary to give evidence or produce any document during the course of any investigation or proceedings under the law. Such proceedings are akin to a judicial proceeding and whatever stated by the person is held admissible as evidence in a court. Section 63 provides for punishment for giving false testimony.
The observations came while hearing a batch of petitions filed by persons facing probes in connection with a money laundering investigation into a allotment of liquor licenses. The directorate began its probe into the alleged scam in selective grant of liquor licenses on a commission that surfaced out of a 2022 income-tax department charge sheet filed against Indian Administrative Service officer Anil Tuteja and others before a Delhi court.
Making observations in the case ahead of the hearing on Tuesday, the bench said, “One after the other, so many petitions are being filed. Why should we entertain them? Prima facie, it appears this has to be stopped.”
(Courtesy:- Hindustan Times, 30 May 2023)
One Cannot Malign Judicial Officers By Using Social Media: Supreme Court
One cannot malign judicial officers by using social media, the Supreme Court observed today while dismissing a plea challenging a Madhya Pradesh High Court order that sentenced a man to 10 days in jail for making corruption allegations against a district judge.
A vacation bench of Justice Bela M Trivedi and Justice Prashant Kumar Mishra said it was not inclined to interfere in the matter.
“Just because you don’t get a favourable order doesn’t mean that you will malign the judicial officer. Independence of (the) judiciary doesn’t just mean independence from (the) executive but also from outside forces. This has to be a lesson for others also. “He should have thought twice before casting any aspersion on the judicial officer. He maligned the judicial officer. Think of the damage done to the judicial officer’s image,” Justice Trivedi observed orally.
The counsel appearing for the petitioner sought leniency from the Supreme Court and said the imprisonment order was excessive.
The lawyer said this is a matter pertaining to personal liberty and the applicant has already been in jail since May 27.
The top court bench then remarked, “We’re here to decide on law, not show mercy. Especially to such persons.”
(Courtesy:- NDTV, 30 May 2023)
Lawyers’ forum urges Supreme Court to bar judges from accepting political appointments within two years of retirement
A lawyers’ forum has urged the Supreme Court to bar apex court and high court judges from accepting political appointments within two years of retirement, citing the need to safeguard against judicial independence being undermined or seen to be undermined.
The petition highlights how Justices (retired) Ranjan Gogoi and S. Abdul Nazeer, who were part of the five-judge bench that delivered the Ayodhya verdict, had respectively been appointed Rajya Sabha member and Andhra Pradesh governor.
“The nomination to the Rajya Sabha, just four months after his retirement, raises the question… should judges stop accepting post-retirement jobs offered by the government, at least for a few years after retiring, because accepting such posts could undermine the public perception about (the) independence of the judiciary,” it says.
As Chief Justice of India, Gogoi had “presided over politically sensitive cases (Assam NRC, Sabarimala, Ayodhya, Rafale, CBI) in which the government was a party”, the petition, filed by the Bombay Lawyers Association on behalf of its founder president Ahmad Mehdi Abdi, says.
It says three judges from the Ayodhya bench accepted political appointments but does not name the third. The allusion seems to be to Justice Ashok Bhushan, who was appointed chairperson of the National Company Law Appellate Tribunal after retirement. However, the tribunal’s chairmanship is not a political appointment.
Under the Companies Act, 2013, a person cannot be appointed chairperson of the tribunal unless they are, or have been, a supreme court judge or a high court chief justice. The other two members of the Ayodhya bench were Justice S.A. Bobde (now retired) and present Chief Justice D.Y. Chandrachud.
“It is often feared that a judge who is nearing retirement could decide cases in a manner that pleases the government in order to get a favourable post-retirement position,” the petition, filed through advocate Manish Kumar Gupta, says.
“If a judge decides highly controversial and contested cases in favour of the government and then accepts a post-retirement job, even if there is no actual quid pro quo, would this not lead to the public perception that the independence of the judiciary is compromised?”
The petition recalls that the Law Commission’s 14th report had in 1958 recommended banning post-retirement government employment for Supreme Court judges because the government was a major litigant in the courts. But the recommendation was never implemented.
(Courtesy:- The Telegraph Online, 31 May 2023)
Court must not act mechanically under section 319 of CrPC to summon accused: SC
The Supreme Court said on Friday a court must not act mechanically under section 319 of the Code of Criminal Procedure (CrPC) to summon an accused merely on the ground that some evidence has come on record.
A bench of Justices Dipankar Datta and Pankaj Mithal made the observation while dismissing an appeal filed by a man challenging a summoning order in a case lodged under Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act.
“A court must not act mechanically merely on the ground that some evidence has come on record implicating the person sought to be summoned; its satisfaction preceding the order thereunder must be more than prima facie as formed at the stage of a charge being framed and short of satisfaction to an extent that the evidence, if unrebutted, would lead to conviction,” the bench said.
The top court said section 319 CrPC, which envisages discretionary power, empowers the court holding trial to proceed against any person not shown or mentioned as an accused, if it appears from the evidence that such person has committed a crime.
“Therefore, what is essential for exercise of the power under section 319, CrPC is that the evidence on record must show the involvement of a person in the commission of a crime,” it said.
The top court was hearing a plea filed by Jitendra Nath Misra challenging an order of the Allahabad High Court.
An FIR was registered by Khalilabad Police Station in Sant Kabir Nagar district under Sections 419 (cheating by personation), 420 (cheating), 323 (voluntarily causing hurt), 406 (criminal breach of trust) and 506 (criminal intimidation) of the Indian Penal Code and certain sections of the SC/ST Act.
As per the complaint, Mishra, his brother Dharmendra and an unknown person assaulted and abused the complainant and his wife.
The Special Court constituted under the 1989 Act took cognisance of the offence and framed charges against Dharmendra and the trial commenced.
The court later summoned the appellant for trial along with Dharmendra.
The top court said both the complainant and his wife, while testifying before the court, described the manner of assault inflicted by Dharmendra and the appellant, and the utterances made by the two brothers, and there appears to be no contradiction at all.
(Courtesy:- The Telegraph Online, 2 June 2023)
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Legal News in this Weekly Legal Update are compiled by Team www.deepakmiglani.com