Even as the apex court pulled up Patanjali Ayurved for misleading ads, there are allegations of pharma companies giving Rs 1,000 crore to political parties through electoral bonds. Are these “underhand deals” now claiming lives?

By Sanjay Raman Sinha

Patanjali Ayurved’s efforts to peddle its questionable drugs in the marketplace and the silence of the government is just the tip of the iceberg, pointing to the existence of a larger cabal that is pushing spurious medical products and drugs to gullible customers.

With the electoral bonds issue cropping up, the sinister nexus between the central and state governments and pharma companies has become evident.  Two trends are discernable in the electoral funding pattern of pharma firms. First, many pharma companies who donated large sums via electoral bonds were under the scanner of the Enforcement Directorate and Income Tax department. Huge amounts of bonds were bought by these companies following searches and raids. Secondly, at least 22 of the 35 pharma firms donated Rs 945 crore worth of electoral bonds to parties holding power in states where the firms have manufacturing units. This is because the power lies with the state government to take action against drug companies’ manufacturing units. At least 11 political parties took money from pharma companies and most were regional outfits. In many instances, drug companies donated money to the BJP after central agencies initiated a probe into alleged tax evasion or other financial crimes like money laundering (see box: Pharma quid pro quo). 

The quid pro quo, often insinuated in the Supreme Court’s hearings of electoral bonds, is corroborated by the fundings by pharma companies. The most recent example of big pharma malfeasance is Patanjali Ayurved. 

Recently, Patanjali Ayurved faced the heat in the Supreme Court as a two-judge bench took to task the company founder, yoga guru Ramdev, and its managing director Acharya Balakrishna for their misdemeanours and brazen behaviour.  Justices Hima Kohli and Ahsanuddin Amanullah took strong exception to Patanjali for the breach of undertaking it had given to the Court. 

On February 27, the Court had issued a contempt notice to Patanjali Ayurved in response to the company’s continued publication of misleading advertisements claiming to offer permanent cures for various diseases. In November 2023, the company had given an assurance to the Court “to not release any statements that made unsubstantiated claims about medicinal efficacy or criticise any system of medicine”. However, Patanjali Ayurved kept on with its misleading advertisements. 

Taking note of this insolent intransigence, the bench lambasted the company for misleading the nation and cocking a snook at the Court. The bench warned the company and also upbraided the central government for failing to take any action against misleading advertisements despite being aware of them. 

The bench told Solicitor General Tushar Mehta to file a detailed affidavit to “dispel the impression” that the government machinery, both at the central and state levels, was complicit with Patanjali. During the hearing, Justice Kohli stressed: “What you have to dispel is that you and the state government are not complicit in this whole activity…. Disparaging other fields of medicine in the manner that has been done by the proposed contemnors is most unacceptable. We are assuming even if you did not put it in the public domain, at least you told them that it is nothing more than a supplementary, do not tom-tom it as a cure. Still, you chose to keep your eyes shut. We are wondering why Union of India did it.” And in a dramatic moment, Ramdev’s lawyer apologised to the Court with folded hands.

Even as the Supreme Court ticked off the government for turning a Nelson’s Eye to Patanjali Ayurved’s misdeeds, the Congress alleged that seven of the 35 pharmaceutical companies which have contributed Rs 1,000 crore to political parties through electoral bonds were being investigated for manufacturing poor quality drugs such as cough syrups and Remdesivir. Congress general secretary Jairam Ramesh alleged “underhand deals” between the government and the pharmaceutical companies so that they can carry out their businesses after giving donations to the ruling party. “Chanda Do, Dhanda Lo” was his refrain. 

This is not the first time that Patanjali Ayurved has flouted norms to mint money in the pharma marketplace. In August 2022, the Indian Medical Association (IMA) took legal action in response to a Patanjali advertisement titled, “Misconceptions spread by Allopathy: Save yourself and the country from the misconceptions spread by pharma and medical industry”. The twin charges propagated misinformation to denigrate Allopathy and exaggerated claims about the efficacy of its own drugs. 

According to the IMA, these statements violated both the Drugs and Other Magical Remedies Act, 1954 (DOMA) and the Consumer Protection Act, 2019 (CPA).

Dr Punita Hasija, past president, IMA Haryana, told India Legal: “Misleading advertisements are not a good thing. It makes people buy medicines which may not be conducive to health and create serious health problems. The Indian Medical Association has taken a very strong stand on the issue and we are thankful to the Supreme Court for dealing with the issue strictly.” (See box on Patanjali’s faulty products.)

Misleading health advertisements are the bane of the medical and pharma industry and the exaggerated health benefits are often not backed by medical research. The ads often use famous personalities to provide testimonials about the advertised product, thus easily fooling people, often with harmful results. Teleshopping sites and TV capsules abound with such exaggerated claims for medical products and services.

In 2019, 61 companies faced probe by the industry watchdog Advertising Standards Council of India (ASCI) for misleading health ads and violation of advertising guidelines. The ASCI found violation of norms by companies dealing with health products like hair oil, cough syrups, advanced bariatric and robotic surgeries, among others. Many products were promoted by well-known companies. The ASCI website abounds with such cases.

Dr Naresh Chawla, vice president of the Delhi Medical Council, told India Legal: “Misleading the innocent and gullible public by advertisements is a very serious issue. Patanjali of Baba Ramdev is a recent example. The Supreme Court has taken a strong stand and will penalise. The government should not only enact stringent laws, but implement them religiously.”

According to an Economic Times report of June 6, 2013: “A maximum of 31 complains were upheld in the health and personal care sector, where big firms such as Dabur, Procter & Gamble Hygiene & Health Care, Hindustan Unilever and Johnson & Johnson were found to be violating ASCI code.”

The ASCI, unfortunately, lacks teeth, and the regulatory framework to act against pharma crimes is woefully inadequate. The last two years have seen a barrage of cases where generic cough syrups have killed children, eye drops have caused blindness and cancer drugs found contaminated.  

In 2022, 66 children in Gambia died a painful death after they were given Indian-made cough syrup. The syrup was manufactured by India’s Maiden Pharmaceuticals and exported to the African country. In 2019, 17 children died in Jammu and Kashmir after consuming a syrup made by a company called Digital Vision. The violations continue unabated.

India produces 20% of the world’s generic medicine, thereby getting the mantle of the biggest manufacturer. The nation boasts of a $50 billion drug-manufacturing industry which exports medicines to over 200 nations and makes 60% of all vaccines. However, the burgeoning Indian pharma industry also carries within its womb the seeds of deceit and devastation. Rogue medical firms play the game of death with reckless and unbridled abandon as grey areas in regulation make them operate with impunity and escape punishment. As per 2018 figures of the Central Drug Standard Control Organisation, about 4.5% of all generic drugs in the Indian market are substandard.

The risks of counterfeit drugs have cross-border ramifications as well. Apart from the Gambian tragedy in 2021, fake vials of remdesivir, an antiviral drug used to treat Covid, were sold in bulk at shockingly inflated prices and were even exported. In 2013, Ranbaxy Laboratories pleaded guilty in a US court to felony charges over the manufacture and distribution of adulterated drugs made in its manufacturing facilities in India. In 2016, two Indian pharmaceutical companies were charged with exporting counterfeit diabetes drugs. From 2022 till last year, Indian drug makers were issued nine US Food and Drug Administration warning letters. Checks at manufacturing units have been abysmally low and have been red flagged by the American body.

The right to health is a corollary to the right to life and guaranteed to citizens by the Constitution. Spurious drugs are drug formulations which conceal the true identity of the product and are sold resembling a popular brand. Drug regulation is governed by an outdated Drugs and Cosmetics Act. Despite modifications in the law, it is still ill-equipped to regulate a complex market.

Dr Punita Hasija said: “Quality control of drugs is the domain and responsibility of drug controllers. In every district, there are drug inspectors who inspect pharmacies and drug factories and ensure that proper guidelines are being adhered to for the safety and efficacy of medical products. These are life threatening practices and should definitely be curbed. IMA stands by the government for strict action against the wrongdoers. IMA doesn’t have penal powers, and the laws are not strong enough to deter wrongdoing. Hardly anyone gets punished.”

Last year, the central government launched a nationwide move against firms making substandard drugs and cancelled the manufacturing licenses of 18 pharmaceutical companies. Despite the penal action, the spurious drug market is booming and misleading medical advertisements add to the peril. 

The drug business works with its lever-system of “incentives” or gifts to doctors. They are plied with freebies for prescribing preferred drugs. The case involving promotion and prescription of Dolo-650 mg tablets has gone to the court. Dolo-650 was the most commonly used treatment for Covid-19. The Federation of Medical & Sales Representatives Association of India (FMRAI) had accused the manufacturer of giving doctors gifts worth Rs 1,000  crore to get them to prescribe Dolo-650  as medication. 

The petition of FMRAI said that the top seven pharma companies together had spent Rs 34,187 crore in marketing over eight years. These constitute 20% of the cost of drugs and include direct and indirect benefits to doctors such as gifts, entertainment, trips and hospitality. 

It must be noted that the Supreme Court had ruled that pharma companies are not entitled to claim tax exemption on the expenditure incurred for giving incentives to doctors to promote their medical products.  The whole business of gifts can turn unsalutary if unreliable products are pushed at the cost of reliable ones.

The Planning Commission has been quoted as saying that pharmaceutical marketing and aggressive promotion contributes to the irrational use of drugs and therefore, there is a need for a compulsory code to identify and penalise unethical promotion by these companies.

Drug pricing has been a sensitive issue with profiteering hitting patients. Healthcare capitalism has been at the forefront of jacked up prices.

As per media reports, for each dose sold to private hospitals, Serum made profits up to 2,000% and Bharat Bio Tech up to 4,000%. A committee was formed way back in 2015 to control drug prices, but the recommendations are yet to see the light of day. The government is yet to formulate a comprehensive policy on the trade margin of expensive medicines.

As the pharma buccaneers make hay while the sun shines, the dire need to reform the healthcare regime is acutely being felt. Watchdog bodies lack teeth, regulations have grey areas and the industry has no penchant for self-regulation. In such a scenario, as the courts wield the stick, it becomes incumbent for the government to proactively initiate structural and normative changes to ensure a safe and secure healthcare ecosystem. 

It is also necessary that the government clears the smokescreen (as demanded by the Supreme Court) and cuts any umbilical cord that binds it to nefarious pharma companies and takes strict action against culpable companies.

The Allahabad High Court has rejected the anticipatory bail plea of Satish Chandra Gupta, a London (U.K)-based accused in the crores rupees scam.

A Single Bench of Justice Sameer Jain passed this order while hearing a Criminal Misc Anticipatory Bail Application filed by Satish Chander Gupta.

The anticipatory bail application has been filed on behalf of the applicant to enlarge him on anticipatory bail in Sessions Trial under Section 447 of the Companies Act arising out of Complaint U/ s 439 (2) R/W, Section 436 (1)(a) & (d) R/W Proviso to Section 212(6) R/ W 212 (14) of the Companies Act, 2013 R/W 621 (1) of the Companies Act, 1956 pending in the Court of Special Judge (Companies Act)/ Additional Sessions Judge, Kanpur Nagar.

At the very outset, R.P.S Chauhan, counsel appearing on behalf of Union of India raised following preliminary objections:-

(a) applicant directly approached this Court for his pre arrest bail under Section 438 Cr.P.C. without approaching the court concerned under Section 438 Cr.P.C.

(b) applicant is a resident of the United Kingdom (U.K) and is residing in the U.K and not in India, therefore, there is no apprehension of his arrest.

Counsel appearing on behalf of Union of India submitted that applicant straight-way filed instant anticipatory bail application before the Court without approaching the court concerned and no special circumstances has been disclosed by him in this regard, therefore, considering the law laid down by the Full Bench of Five Judges of this Court in the case of Ankit Bharti and others Vs State of U.P and another 2020 (3) ADJ 575, the instant anticipatory bail application is not maintainable.

He further submitted that admittedly applicant is the resident of London (U.K.) and investigation of the case has already been concluded and on the basis of the complaint, he has been summoned and till date no warrant has been issued against him, therefore, applicant is not having any belief of his arrest, therefore, on this ground also the instant anticipatory bail application is not maintainable.

He also submitted that if the applicant is released on anticipatory bail then under the pretext of order of pre-arrest bail, he will never return to India for trial. He further submits that no blanket protection can be given to the applicant under Section 438 CrPC.

He further submitted that there are several examples in the past, if an accused once fled from India he never turned up to face the legal proceedings.

Against the preliminary objections raised by the counsel appearing on behalf of Union of India, learned Senior Advocate appearing on behalf of the applicant submitted that from perusal of the provisions of Section 438 CrPC it is apparent that anticipatory bail application can be filed either before the court of sessions or before the Court, therefore, if applicant opted to file the anticipatory bail application directly before the Court then he did not commit any illegality and it cannot be said that his anticipatory bail application is not maintainable.

The Court noted that,

From the record, it reflects that a criminal complaint was filed against the applicant and several others under the provisions of Companies Act. Applicant, is the accused in the complaint and as per allegation he was Ex Director in a Foreign Entity and he also connived with other entities in running of fraudulent/abusive merchanting trade business and thus caused huge losses of crores of rupees to the bank and is liable to be punished for offence under Section 447 of Companies Act, 2013.

Five Judges Full Bench of this Court in the case of Ankit Bharti (supra) held, the anticipatory bail application can be filed before this Court directly but only in special circumstances and special circumstances must necessarily exist and be established as such before jurisdiction of the Court is invoked directly.

As per five judges Full Bench of the Court an application for pre-arrest bail can only be entertained by this Court directly in only exceptional circumstances and not in routine manner and for entertaining such application directly special circumstances must exist.

In case at hand, in the entire anticipatory bail application, applicant did not disclose any special circumstances why he directly approached this Court without approaching the court concerned under Section 438 Cr.P.C, however, in the supplementary affidavit dated 26.11.2023 applicant averred that in view of the provisions of Section 438 Cr.P.C there is no bar if applicant directly files anticipatory bail application before the Court. In view of the Court, it is not a special circumstance on the basis of which, the instant anticipatory bail application can be entertained directly by the Court.

Further, applicant is the resident of London (U.K) and as per the view expressed by the Single Judge of the Court in the case of Vinod Kumar (supra), which was approved by the Full Bench of the Court in the case of Ankit Bharti (supra) if an accused resides outside the concerned jurisdiction of sessions judge, then he can file anticipatory bail application directly before the Court if faces threat of arrest. Even five judges of the full Bench of the Court in case of Ankit Bharti (supra) held that such application must rest on strong foundation with regard to apprehension of arrest. Therefore, threat of arrest of the applicant is necessary for maintainability of his anticipatory bail application directly before the Court.

The second objection of the Union of India is also with regard to belief of arrest of the applicant. Therefore, the core issue is whether the applicant is having belief in his arrest.

In the case at hand, admittedly the applicant is not residing in India and he is resident of London (U.K). The investigation of the case has already been concluded and one complaint applicant was summoned along with others and till date no warrants have been issued against him. Therefore, the question is whether the applicant still has belief in his arrest.

“In the case of Vijay Babu (supra) it appears that the investigation of the case was pending, therefore, the Single Judge of the Kerala High Court observed in that context that due to the advancement in investigative technology and communication, the various agencies of investigation could even arrest a person outside the India but in case at hand, investigation has already been concluded and after filing of complaint till date only summons have been issued against the applicant. Therefore, prima facie in the matter it appears, there is no apprehension of the arrest of applicant who resides in London (U.K).

Further, the Court finds force in the argument advanced by learned counsel appearing on behalf of Union of India that if blanket protection is given to the applicant under Section 438 Cr.P.C then possibility cannot be ruled out that he will never return to India.

Therefore, considering the facts and circumstances of the case discussed above, in my view, both the preliminary objections raised by Union of India are well founded and instant anticipatory bail application is not maintainable”, the Court further observed while rejecting the bail application.

The Supreme Court on Monday came down heavily on the State Bank of India for being selective, while submitting details of the electoral bonds to the Election Commission.

The order was passed by the Bench of Chief Justice of India (CJI) DY Chandrachud, Justice Sanjiv Khanna, Justice B R Gavai, Justice J B Pardiwala and Justice Manoj Misra, while hearing a petition alleging that SBI not furnishing unique numbers of electoral bonds to the Election Commission.

The Bench ruled that SBI cannot be selective and has to disclose all conceivable electoral bond details in its possession, including unique bond numbers that would disclose the link between the buyer and the recipient political party.

The Apex Court further directed SBI to disclose all information related to the Electoral Bonds which was in possession of the bank.

The SBI Chairman was further directed to file an affidavit by 5 pm of March 21, stating that it has not suppressed any information.

Appearing for SBI, Senior Advocate Harish Salve apprised the Bench that if the numbers of electoral bonds were to be given, it would comply with the court orders.

Appearing for the Centre, Solicitor General Tushar Mehta argued that the ultimate aim was to curb black money and the Apex Court must know how this judgment was being played outside the court.

He contended that witch-hunting has started on another level and not at the level of the Central government. Those before the court have started giving press interviews and deliberately embarrassing the court. A series of social media posts, at least intended to cause embarrassment, have started, he added.

The SG further requested the Apex Court to consider issuing directions in this regard.

The CJI observed that as judges, they were only on the rule of law and worked as per the Constitution. This court was only to work for the governance of the rule of law in this polity. As judges, they were also discussed in social media but their shoulders were broad enough to take this. The Apex Court was only enforcing its directions of the judgment, he added.

Earlier on Sunday, a petition was filed in the Supreme Court seeking disclosure of the details of electoral bonds sold from March 1, 2018, to April 11, 2019, including the alphanumeric number, date of purchase, denomination, and names of donors & parties to the ECI.

The plea contended that once the entire Electoral Bond Scheme was held to be violative of Article 19(1)(a) of the Constitution, the citizens were entitled to know the details of the donor and donee of the entire period from March 2018 onwards (the date when the scheme became functional).

It said the data available on the platform of the Election Commission represented only 76 percent of the total bonds and the voters were not aware of the details of the remaining 24 percent of the Electoral Bonds.

Represented by Senior Advocate Vijay Hansaria and Advocate Sneha Kalita, the petition submitted that the cut-off date of April 12, 2019, was relevant only for furnishing information by political parties to the Election Commission as an interim arrangement when the matter was sub-judice before the Supreme court.

Once this court struck down the entire Electoral Bond Scheme and the amendments to the Representation of the People Act, 1951, the Companies Act, 2013 and the Income Tax Act, 1961 by the Finance Act, 2017, in its February 15 verdict, the voters were entitled to know the funding to the political parties by the Electoral Bond for the entire period.

Another petition filed by the Citizen’s Rights Trust submitted that 9,159 bonds worth Rs 4,002 crore have been sold between March 2018 to April 2019, which should also be disclosed.

SBI was directed to submit the details of the bonds purchased from April 12, 2019, to February 15, 2024 to the ECI by March 6. The bank sought extension of time till June 30 to furnish the details. However, the Supreme Court refused to consider the request and ordered the bank to disclose the details by the close of business hours on March 12.

Electoral bonds have been put to rest, but the controversies remain. It is time for India to use this extraordinary judgment of the Supreme Court and the consequential revelations to change the way we look at donations and lobbying

By Sujit Bhar

A major, right-leaning media house has sent out an almost celebratory tweet, saying that the Adani Group, Reliance and the Tatas are not on the electoral bonds list that the State Bank of India (SBI) handed over to the Election Commission of India (ECI) and which the latter has uploaded on its website as per the instructions of the Supreme Court.

The names acknowledged in the tweet are Grasim Industries, Bharti Airtel, Megha Engineering, Torrent Power, DLF Commercial Developers and some others.

What does that prove, even while maintaining that this observation is erroneous? It means that certain companies, that have been in a somewhat poor moral light so far, are actually as pure as driven snow. Here is a caveat.

One donor company, Qwik Supply Chain Pvt Ltd, which had donated about Rs 410 crore to the fund, is actually indirectly owned by Reliance Industries.

A Reuters investigation reveals that Tapas Mitra, one of the directors of Qwik Supply Chain, sits on the board of at least six companies that are part of the Reliance group headed by Mukesh Ambani.

A donation of Rs 410 crore is peanuts for Reliance. Recently Mukesh Ambani spent over Rs 800 crore (some estimates go up to Rs 1,000 crore) on the pre-wedding celebrations of his son Anant Ambani. If the public is to believe that Reliance, Adani and the Tatas have stayed away from donating to the powers that be, as well as to other political powers, then there is serious doubt over the intellectual capabilities of the general public of India.

As for the involvement of the Adani Group, the same Reuters report reveals that Navayuga Engineering Company Limited is another company that bought electoral bonds. This company came into the limelight last year for a rather shady reason.

This was the company contracted to build the Silkyara Tunnel in Uttarakhand that collapsed. It also constructed the Polavaram dam and operated Krishnapatnam port in Andhra Pradesh that has now been taken over by the Adani group. It also used to operate a power transmission project in Gujarat that has been acquired by the Adani group.

Navayuga’s purchase of electoral bonds was worth Rs 55 crore, of which Rs 30 crore was bought on April 18, 2019, just before the Lok Sabha elections.

Highest payout

The highest payout has been from one strange company, called Future Gaming and Hotel Services. The total purchase of bonds by this company is a stupendous Rs 1,368 crore. The head honcho of this company is a person called Santiago Martin, otherwise also referred to India’s “lottery king,” a person who has faced several financial investigations about his financial dealings by government authorities, including by the Enforcement Directorate. He was even under arrest for a while in 2008 in a land scam case.

The amount of money this shady character has thrown into the electoral bond coffers clearly proves not only his complicity in deals that are not exactly above board, but that much of that money has been funnelled through him by other important, high-profile entities.

Another controversial name crops up in the data. This is of Megha Engineering and Infrastructure Limited, associated with the Kaleshwaram lift irrigation project in the state. Megha Krishna Reddy is the top man here, and its association in the controversial water pipeline project in Odisha is known.

When Congress leader Revanth Reddy was not yet the chief minister of Telangana, he had written to the then chief minister K Chandrashekar Rao, alleging that the Megha Krishna Reddy group was a major contributor to the Prudent Electoral Trust. Prudent Electoral Trust is the largest among all the 18 electoral trusts in the country, accepting tax-exempt donations to political parties.

It was set up in 2013 and has received over Rs 20,000 crore. Eight major groups donated heavily to this trust, including the ArcelorMittal group headed by LN Mittal, the GMR group that operates airports in Delhi and Hyderabad, the Essar group controlled by the Ruia family, the Airtel/Sunil Bharti Mittal group, and the RPG Sanjiv Goenka group of Kolkata.

A full audit of these trusts will also reveal tons of information. The functioning of these trusts had recently been investigated by Reuters, revealing scary amounts of money that have moved through these. The now-banned electoral bond system is another, more powerful, instrument.

A tool to an end

Much remains in the domain of the unknown than has been revealed, but at least the Supreme Court has handed all political parties and, especially activists, a long handle to use against corruption.

A very pertinent suggestion has been made by former Congress minister and Rajya Sabha MP Kapil Sibal. He said: Like it was done in the 2G case, where an SIT was made, in this case also an SIT should be constituted to probe the matter. We have to see how the law will see it now. It should also be found out who donated to the PMCARES (fund). It’s a matter of investigation which party got how many funds (sic).” 

Whether a special investigative team will be constituted or not depends a lot on the outcome of the ensuing general elections, but it has to be pointed out that the SBI should not be allowed to get away with merely acting as a post office for sensitive data. There are a number of reasons for this. First, how could it allow a junior officer to reply to summons of the top court of the country? Secondly, how was it that with thousands of crores sloshing around in its books, no audit trail was deemed necessary? True that the bonds needed to be redeemed in 15 short days, but in any system, that much money always creates a distortion in the books.

The third issue is the sheer audacity of the bank in deciding to avoid the apex court till the bench headed by Chief Justice of India DY Chandrachud issued a contempt proceeding threat. The SBI is an institution that has earned a great deal of disrepute as being the favoured bank for all who have quit the country with massive loans, never wanting to pay them back.

The SBI, as per its own chest thumping, is the largest bank in India by total assets (the HDFC Bank tops the list in terms of market capitalisation) and has control over a fourth of the Indian market. It serves over 48 crore customers through 22,405 branches and was also one of the largest employers in the world with 245,652 employees as of March 31, 2021.

A bank with so much muscle power had initially claimed before the Supreme Court that a matching job would take till June 30. The head honchos of the bank need to be given a lesson in probity.

The omerta

It has been common knowledge that the Bharatiya Janata Party (BJP) got more than half the funds from the redemption of bonds between 2018 and 2024. It is also true that every political party worth its name has received massive donations through these bonds and through the 18 trusts.

The issue today is about the entire issue of secrecy and of the “quid-pro-quo” that exists (and has barely been proved). The Supreme Court’s landmark judgment last month that held the electoral bond scheme to be “unconstitutional” was because, as the Court put it, it violated citizens’ right to information.

The courts, the institutions and the political parties willing, this can turn out to be a critical phase in this democracy’s workings.

If one believes that corporate bodies donate to political parties just for their love of those parties, then it would not be a very smart thought to hold. Every business investment calculates its return on investment. One has to learn to accept this fact. One has to also learn to accept that the earlier (post-Independence era) system of a complete blackout of information—of even the fact that there have been political donations—was as harmful.

Instead of an information blackout, the country might learn to live with an open system where donations are publicly acknowledged, and lobbying is accepted as a norm. Lobbying is legal in the US, and could easily be acknowledged within this country. The fact that India has moved away from its socialist ideals has been established in every mind. It is now necessary to use this judgment of the Supreme Court to come clean and let the people really participate more proactively in nation building.

That could avoid fiascos such as the electoral bonds.

The apex court’s verdict on the Electoral Bonds Scheme signals the coming of age of a strong citizen rights jurisprudence in the country. Another laxman rekha has been breached, and for good, but is there an alternative?

By Sanjay Raman Sinha

As the Supreme Court struck down the Electoral Bonds Scheme (EBS), it also demolished a major bulwark of the government. The five-judge bench of Chief Justice of India (CJI) DY Chandrachud, and Justices Sanjeev Khanna, BR Gavai, JB Pardiwala and Manoj Misra gave a unanimous historic verdict which has the potential to not only cleanse the funding process, but also protect voter rights.

During the argument stage of the case, the Attorney General R Venkataramani had made a case for total information blackout of EBS donors and beneficiaries, asserting that right to know stops at the threshold of the EBS. Right to know is not a general right available to citizens, he said. By doing so, the government sought not only to infringe on the right to information of citizens, it also drew a laxman rekha which the citizens were told not to cross, and for no good reason. The CJI had taken to task the senior most law officer of the government. But that’s another story. 

The point is that the government’s effort to stonewall the funding information was effectively decimated. The EBS verdict is an exoneration of the judiciary’s stand on a range of issues pertaining to voters’ rights and individual freedom. Electoral funding is not going to be the same ever again.

Vijay Hansaria, senior advocate in the Supreme Court, had argued for the petitioners in the EBS case. Speaking to India Legal, he said: “The verdict is very important for our electoral reforms. I believe positive changes will come. Over a crore of funds are transferred in one go by big donors. In cash, this can be voluminous. I had argued in the Court that cash donations should be stopped and digital transactions and bank transfers should be promoted. This will promote transparency.”

The right of voters to know about the criminal antecedent of the candidate is also part of the fundamental rights. This was brought out in the Lok Prahari vs Union of India case wherein the bench stated: “…voter speaks out or expresses by casting vote and such a speech is part of the fundamental right under Article 19(1)(a). This Court after taking into consideration various aspects of the matter… held that for the effective exercise of his fundamental right, the voter is entitled to have all relevant information about the candidates at an election…”

In the State of Uttar Pradesh vs Raj Narain and Others (1975), the Constitution bench of the Supreme Court held: “The people of this country have a right to know every public act, everything that is done in a public way by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing.” 

The legal antecedents clearly support the verdict of the five-judge bench hearing the electoral bonds matter wherein it has struck down the restrictions on the right to information of voters.

Shailesh Gandhi, former Central Information Commissioner and noted RTI activist, spoke to India Legal on the RTI aspect of the verdict: “As a transparency advocate, I am very happy at this judgment saying that things should be transparent, and there is no doubt about this. However, there are some things that we need to understand before rejoicing on this judgment. It has taken seven years for the Supreme Court to come up with this decision. In the meantime, there have been various instances where the Supreme Court’s decisions have not been implemented by the government. One such case I am aware of personally is in 2011 when I was the Information Commissioner. I had ordered RBI to reveal various information to be disclosed to citizens like loan defaulters’ lists, audit reports of banks, inspection reports and more in a RTI appeal. The RBI obtained stay orders on these. The Supreme Court in 2015 upheld all my decisions and said there was no need to change anything and unless our courts give decisions in a time-bound manner, these methods will continue frustrating the rule of law.”

Despite the verdict, funding of elections is going to be a thorny matter for some time to come. An alternative arrangement has to be devised. 

A look at the funding models of other countries can help. In countries like the United States, the United Kingdom, Switzerland and Singapore, the focus is on transparency, disclosure and proper reporting on political contributions. These examples highlight the global consensus on transparency in the political funding process.

In the present dispensation, there seems a one-to-one relationship between big ticket donors and the receivers, especially political parties in power. No wonder then, quid pro quo arrangements formed the crux of some of the major arguments during the hearing stage. 

The Law Commission of India in its 255th Report had noted the concern of financial superiority translating into electoral advantage. It was observed that lobbying gives undue importance to big donors and certain interest groups at the expense of the ordinary citizens, violating “the right of equal participation of each citizen in the electoral process”.

In the United States, amidst public concern over the influence of large donors in political campaigns, an opinion poll was conducted in 2018 which found that 74% of Americans surveyed felt it was “very” important that “people who give a lot of money to elected officials not have more political influence than other people”.

The people giving a lot of money are obviously the corporate entities as the value of donations above Rs one crore is in large numbers. Ninety four percent of the contributions through electoral bonds have been made in the denomination of Rs one crore. Such contributions can only come from the corporate world and may provide more political influence than other people.

Thus, EBS not only provides an unequal playing ground for political parties, it also infringes upon the right to information of the voter by anonymising contributions through bonds which is violative of Article 19(1)(a) of the Constitution. 

In the EBS case, the petitioners had argued that Section 154 of the Finance Act, 2017 violates Article 14 of the Constitution. The primary ground of challenge was that the amendment to Section 182 of the 2013 Act is manifestly arbitrary as it allows companies, including loss-making companies, to contribute unlimited amounts to political parties.

After referring to Article 14 and also to a series of court verdicts, the apex court bench came to the conclusion that “it is now a settled position of law that a statute can be challenged on the ground it is manifestly arbitrary.”  Thereafter, the bench held that: “Unlimited contribution by companies to political parties is antithetical to free and fair elections because it allows certain persons/companies to wield their clout and resources to influence policymaking.” 

Sometime back, the former RBI Governor Raghuram Rajan had critiqued the EBS. He had asserted that it favours the ruling party in political funding, thus creating an unbalanced playing field.

The irony is that the Finance Act, 2017 was passed as a Money Bill with the primary aim to curb black money within the electoral system. However, the amendments legitimised electoral corruption at a large scale.  The passage of EBS as a Money Bill is under examination by a larger bench.

The fact of the matter is that the political class works in a concerted way to achieve its narrow ends, ideological differences notwithstanding. Two examples underline the fact. In 2013, Rahul Gandhi had publicly torn the ordinance brought by the Congress to save convicted legislators from disqualification.

In 2003, the Vajpayee government had prevented the criminal antecedents of candidates to be revealed. The Vajpayee government had tried to bypass the verdicts of the High Court and the Supreme Court and amended the Representation of People Act and added Section 33A and 33B to it. When read together, these Sections held that candidates will not be liable to disclose any information regarding their criminal antecedents.

The amendment was challenged in the apex court and in People’s Union for Civil Liberties vs Union of India (2003), the amendment was struck down as being ultra vires the Constitution as it aimed to impose a blanket ban on the dissemination of information by candidates. The Court held it void as it infringed upon the right of voters to know. Thereafter, the Supreme Court made it mandatory for candidates with criminal antecedents to publish information about the criminal charges filed against them. This is history, but it directly relates to machinations of political dispensation to curtail the right to know of the candidates, which had been effectively achieved under the EBS regime.

The election funding policy was tweaked during the Vajpayee rule. The Income Tax Act was amended to make donations made to parties to be treated as expenditure and this gave tax advantage to the donors. A political party was expected to file its re­turns. Cheque donations, instead of cash, was expected. However, most of the donors were reluctant to disclose the donation details. Secrecy was thought to be a shield for potential political reprisal. The law was further amended by the UPA government facilitating the formation of an electoral trust which was supposed to distribute pooled donations to various political parties. Then as the Modi government’s new amendments were eased in, the EBS regime came into vogue.

Reviewing the EBS, the bench held: “Electoral Bond Scheme does not fulfil the least restrictive means test. The Electoral Bond Scheme is not the only means for curbing black money in Electoral Finance. There are other alternatives which substantially fulfil the purpose and impact the right to information minimally when compared to the impact of electoral bonds on the right to information.”

The EBS verdict takes into its gamut not only electoral funding, but also voters’ right to know, donor privacy and political contributions by companies. Like a deft surgeon, the Supreme Court has removed the diseased portions, but an alternative system needs to be devised and put in place to regenerate the electoral funding process.

The Calcutta High Court has directed the Enforcement Directorate (ED) to investigate the matter related to non-payment of provident fund (PF) dues to a bunch of jute mill workers by various jute companies like Delta Mills.

The order was passed by the single-judge Bench of Justice Abhijit Gangopadhyay on Thursday in a late-night hearing.

The counsel appearing for the petitioners submitted that the dues were to the tune of an average of Rs 2.5 lakh each for 10 workers, amounting to a total of around Rs 25 lakh.

Earlier on Thursday, Justice Gangopadhyay had called for the directors of the companies and directed them to be questioned by the Serious Fraud Investigation Unit (SFIO).

The counsel appearing for SFIO apprised the High Court Bench that the directors were actually sham directors, who were laborers in the company who were asked to take up a directorial role in exchange for money.

The single-judge Bench then called for DSG Dhiraj Trivedi for the national agency and asked him why the ED could not take up an investigation into the matter.

The DSG submitted that ED could only investigate scheduled offenses, and that criterion would only be met if the ingredients for Section 447 of the Companies Act, 2013, had been established and if an FIR had been lodged.

After hearing the submissions and analyzing the ingredients of Section 447 of the Companies Act, the Court noted that the same eere writ large in this case. It directed the SFIO to lodge an FIR at the local police station in order to enable the ED to begin their investigation.

The Calcutta High Court has directed the Enforcement Directorate (ED) to investigate the matter related to non-payment of provident fund (PF) dues to a bunch of jute mill workers by various jute companies like Delta Mills.

The order was passed by the single-judge Bench of Justice Abhijit Gangopadhyay on Thursday in a late-night hearing.

The counsel appearing for the petitioners submitted that the dues were to the tune of an average of Rs 2.5 lakh each for 10 workers, amounting to a total of around Rs 25 lakh.

Earlier on Thursday, Justice Gangopadhyay had called for the directors of the companies and directed them to be questioned by the Serious Fraud Investigation Unit (SFIO).

The counsel appearing for SFIO apprised the High Court Bench that the directors were actually sham directors, who were laborers in the company who were asked to take up a directorial role in exchange for money.

The single-judge Bench then called for DSG Dhiraj Trivedi for the national agency and asked him why the ED could not take up an investigation into the matter.

The DSG submitted that ED could only investigate scheduled offenses, and that criterion would only be met if the ingredients for Section 447 of the Companies Act, 2013, had been established and if an FIR had been lodged.

After hearing the submissions and analyzing the ingredients of Section 447 of the Companies Act, the Court noted that the same eere writ large in this case. It directed the SFIO to lodge an FIR at the local police station in order to enable the ED to begin their investigation.

By Akash Yadav

Cybercrime has significantly expanded in recent years, including phishing, identity theft, and fraud. The number of cyberattacks on India increased by 37% in just the preceding year. Future predictions indicate that cybercrime will spread more widely. This highlights the need for tougher laws and more effective, deterrent legal systems to combat cybercrime. In this case, examining the nation’s current cybersecurity laws to see if they offer sufficient defence against these crimes becomes intriguing, if not essential. The current article examines cyber laws in India, shedding insight on the Information Technology Act, 2000’s (IT Act, 2000) dispute resolution procedures in particular. With the rapid expansion of the digital landscape, disputes related to cybercrimes, data breaches, online defamation, and intellectual property violations have become increasingly prevalent. In this context, Alternative Dispute Resolution (ADR) mechanisms are playing a crucial role in resolving conflicts efficiently and cost-effectively within the Cyber regulations are especially important in nations like India, where the internet is widely utilised. Cyber laws are in place to regulate the digital exchange of information, software, information security, e-commerce, and monetary transactions. India’s cyber laws have paved the way for electronic commerce and electronic governance in the nation, as well as increased the scope and use of digital media, by ensuring optimum connection and reducing cybersecurity risks. But there are several detriments that walk along with the existing laws as well.

There are predominantly four cyber laws that India embraces:

Information Technology Act, 2000 The Information Technology Act, which was enacted in 2000, governs Indian cyber legislation. The main goal of this Act is to provide eCommerce with trustworthy legal protection by making it easier to register real-time information with the government. However, as cyber attackers became more cunning, coupled with the human predisposition to misuse technology, a number of adjustments were made.

Companies Act, 2013
The Companies Act, 2013 gave the SFIO (Serious Frauds Investigation Office) the authority to prosecute Indian corporations and their directors on account of cyber frauds. SFIOs have also become much more stringent and harsh in this area after the promulgation of the Companies Inspection, Investment, and Inquiry Rules, 2014. All regulatory compliances, including cyber forensics, e-discovery, and cybersecurity diligence, are well- covered by the law. The Companies (Management and Administration) Rules, 2014 establishes robust requirements for corporate directors and executives in terms of cybersecurity obligations and responsibilities.

Indian Penal Code (IPC), 1860
The Indian Penal Code (IPC), 1860, along with the Information Technology Act, 2000 are both used to prosecute identity theft and related cyber offences. False documentation (Section 464), forgery (Section 465), forgery pre-planned for defrauding (Section 468), reputation harm (Section 469) and presenting a forged document as real (Section 471), are the main provisions of the IPC that concern cyber scams.

Cybersecurity Framework (NCFS)
The most trusted worldwide certifying organization, the National Institute of Standards and Technology (NIST) has approved the Cybersecurity Framework (NCFS), which provides a standardized approach to cybersecurity. The NIST Cybersecurity Framework includes all necessary rules, standards, and best practices for effectively managing cyber-related risks. The flexibility and cost-effectiveness of this system are top priorities.

Among the aforementioned laws, the Informational Technology Act, 2000 remains much in discussion owing to being the only data protection law India carried with it for several years now. When we talk about the dispute resolution mechanism, it is this Act that comes into the discussion, as for others, Dispute resolution mechanism under the IT Act, 2000

The Information Technology Act, 2000 created quasi-judicial bodies, such as adjudicating officers, to resolve disputes (civil as well as criminal). The adjudicating officer has the power to award compensation as a civil remedy as well as impose fines for violations of the law, giving him civil and criminal rights similar to those of a court. The Cyber Court of Appeal is the first level of appeal, with its chairman and any additional members appointed by the central government. A second appeal may be filed with the competent High Court within 60 days from the date of the decision of the Cyber Appellate Tribunal.

Referee officer

The central government appoints an “Adjudicating Officer” (AO) who has the power to take decisions. According to the Ministry of Electronics and Information Technology (“MeitY”), the Secretary of the Information Technology Department of each state is by default designated as the AO of that state. The AO is a quasi-judicial entity because it has the ability to:

1. Order an inquiry, i.e., conduct an investigation into the violation of the IT Act, 2000 on the basis of the evidence presented; And
2. The judge, that is, determines the amount of compensation or penalty that will be given in case of violation.

Decision-making process according to the provisions of the IT Law 2000

The selection process under the Information Technology Act, 2000 has been discussed in the following directions:

File a complaint with the AO.

The AO issued notice to the concerned parties regarding the date and time of the first hearing.

On the date specified in the notice, the AO explains the alleged violations to the accused party. Three possible cases are then given below:

The accused pleads guilty, or the accused person shows cause why an investigation should not be conducted against that person, or The accused did not appear. In that case, the AO conducts the investigation in the absence of that person. If the situation described in point (a) arises, the consequence will be imposition of penalty or compensation as prescribed by the IT Act, 2000 of the AO.

If the case at point (b) occurs, the results are as follows:

The AO decides based on the parties’ reports and/or the preliminary investigation to determine whether there is sufficient cause to request an investigation. The AO will fix another date for furnishing documents or evidence and then finally pass an order based on the evidence produced. The AO dismissed the complaint for lack of sufficient grounds to pursue the complaint.

The AO has jurisdiction over cases where compensation or loss is less than INR 5 crore. The AO has the power to order an investigation of a complaint at any time after receipt of the complaint. An officer from the Office of the Controller of Certifying Entities, or (CERT-In), or a deputy police chief leads the investigation.general civil and criminal procedures are abided by. realm of cyber law.

Ineffective dispute resolution mechanism of cybercrime law in India

Although the cybersecurity law dispute resolution mechanism framework, as discussed above, appears promising in principle, it has not been proven to be effective in practice. Cyber conflicts receive little news coverage and there are no statistics on the number of cases heard by the police or courts. Possible gaps in the resolution mechanism have been presented below:

The AO is given immense power. They have jurisdiction over any law, rule, regulation or direction issued under the IT Act, 2000. At the same time, there are several AOs who are dealing with the same challenges. This leads to conflicting views on the same topic. For example, in the case of Rajendra Prasad Yadav v. ICICI Bank (2011), the AO concluded that since the bank is a legal entity, Section 43 of the IT Act is not applicable to it. On the other hand, AOs from other countries reached different conclusions. Section 43 has been used against companies in a number of situations. This may make it difficult for an organization to comply with the IT Act, 2000 as it may have to take into account the views of various AOs to operate across India.

To get an arbitration order passed under the IT Act, 2000, one has to visit the difficult-to- navigate websites of the state government. This issue is also not reported in major legal databases. The arbitration order must be stored in a central database so that officials and other stakeholders can refer to it when dealing with violations of the Information Technology Act, 2000. This will also enable Allows businesses to monitor online conflicts. According to the old MeitY decree from 2003, secretaries of state agencies responsible for information technology are considered AOs. In addition to carrying out their responsibilities as AOs, they are also responsible for managing their departments and are actively involved in working with the state government to which they are assigned. The dual nature of their work is extremely burdensome. Considering the increasing number of cyber crimes in the country, there is a need to restructure the AO appointment system.

The capacity of the AO must be increased. The UK Prosecution Service has drawn up a “Cyber Crime Prosecution Guide” which identifies the main types of cyber crime, such as computer hacking and social media offences, thus closing role as a guide for the trial of cybercrime cases. In India, similar guidelines need to be developed and implemented to ensure better complaints handling. There is no guidance document on cyber forensics or cyber forensics in the Indian regulatory environment. The “Electronic Evidence Examination Authority” was established under the Information Technology (Amendment) Act, 2008. This organization provides expert advice on electronic evidence. Various forensic laboratories have been appointed as examiners by MeitY. These labs are well versed in the field of cyber forensics. In contrast, the Investigation Rules 2003 have not been amended since the 2008 amendment legislation. The regulations need to be amended to allow AOs to require these inspectors to consider matters before them more efficient and effective. To better equip the police and other investigative agencies to handle such cases, it is necessary to establish rules or guidelines for cybercrime investigation.

As the digital landscape continues to evolve, so too does the role of ADR in cyber law. ADR mechanisms provide a valuable means of efficiently and effectively resolving disputes arising from online activities. By embracing ADR in the realm of cyber law, stakeholders can navigate the complexities of the digital world while promoting fair and accessible dispute resolution.

—Akash Yadav is a fifth-year BA. LL.B. student

The Allahabad High Court has directed a CBI investigation into the fraud worth crores and embezzlement of public money by Simbhaoli Sugar Limited Company in connivance with bank officials.

The Division Bench of Justice Mahesh Chandra Tripathi Justice Prashant Kumar passed this order while hearing a petition filed by M/S Simbhaoli Sugars Limited.

This is a shocking case of clear connivance of unscrupulous businessman and banks, wherein the bank officials have knowingly allowed the petitioner to syphon away almost Rs1300/- crores of the public money.

Here the banks had advanced hundreds crores of rupees to the petitioner company knowing the fact that they have already defaulted with the loans taken by other banks previously and been declared N.P.A, still the banks went ahead and approved loans running into several hundred crores and the entire loan was disbursed without following the mandatory steps/procedures, which banks are supposed to take before disbursing the loan.

After the default of the petitioner in paying back the loan of the first bank, the bank instead of proceeding to recover this amount, gave a long rope to the petitioner to take loan from the second bank.

This second bank also very easily without following the mandatory steps grants a loan without any adequate security, which was never paid back by the petitioner.

Thereafter, the petitioner moves on to the third bank for another loan and this bank also grants a loan without any due diligence, and without following the norms and guidelines of Reserve Bank of India for loans to the company, and without even adequate security or additional security and without doing any regulatory compliances this bank again disburses a huge loan and further, do not carry out the post disbursement supervision and lets the petitioner to syphon away the entire amount.

The petitioner adopted the same modus operandi again and again with 7 banks and surprisingly, rather shockingly, all the seven banks had extended loan facilities to the petitioner without any due diligence, credit approval, risk report appraisal and without following the RBI guidelines to advance loans to the companies and also without adequate security and in few of the cases a personal guarantee was given by the promoters to many banks.

Shockingly, the banks, even after declaring the petitioner’s account as NPA has not taken any effective steps to recover the amount. In fact it will not be wrong to say that no sincere effort had been taken by the banks and all the efforts shown to have been taken was nothing but just an eyewash.

The facts of the petition are that the petitioner company has a Sugar Mill in Simbhaoli, District Ghaziabad. This Mill has two other units. The petitioner herein, in the course of the business, had been taking loans from the banks. The issue started sometimes in the year 2003 where the company started defaulting in payment of the loan taken by the banks. In fact, the company had entered into an agreement for debt restructuring way back in the year 2007 with State Bank of India. It seems that they have not honored the terms of restructuring and, hence, the bank again in the year 2012 had to carry out another debt restructuring.

The petitioner company had been borrowing money from various banks and chose not to pay them back. As per the affidavits filed by the banks, the Company was declared NPA as on 31.03.2013. Once a Company is declared NPA as per the “Prudential Norms of Income Recognition” issued by the RBI no other bank would grant any kind of loan to such companies.

In spite of this, shockingly, the petitioners had been getting hundreds of crores of loans from various banks without even giving adequate security. Later, the banks came in as a consortium and wanted to settle the same through a Joint Lenders Meeting as a huge hair cut. The bank also started proceeding against the petitioner company in NCLT, Allahabad.

Before the Court, the petition has been filed by the petitioner Company seeking quashing of communication dated 26.07.2023 issued by the State Bank of India, wherein, the settlement offer of the petitioner was rejected and the bank had communicated that they will proceed to take legal action against the company.

The Court observed that,

From the above facts and record, it is evident that the instant case is a clear case of fraud being played by the petitioner in connivance with the bank officers as the banks one after the other had gone to sanction loans to the petitioner knowing the fact that the petitioner has defaulted in paying money to the other banks and shown no intention of paying back the loan. The loans given by the banks as working capital was well secured with the sugar stocks, even if the petitioner want to sell a bag of the sugar, the sale consideration, would necessarily has to come in the Escrow account.

Surprisingly, every time when the loan is given, on the security of sugar stocks how come the amount was not recovered by the banks and how the stocks were allowed to be sold without the bank getting its dues.

The banks while disbursing the loans have miserably failed or purposely did not carry out proper due diligence, credit appraisal, following the prudential norms, consider the risk report, did not take appropriate collateral security, failed to carry out regulatory compliances. Few of the banks even did not ask for personal guarantees of the promoters and the others got a personal guarantees of the promoters, who had given personal guarantees to various other banks. There was no post disbursement supervision by the banks, which is mandatory. The banks chose not to ask for additional security, no proper steps to recover the amount was taken by the banks even after the account were declared NPA. There is RBI guideline to advance the loans to the companies, which is an essential condition and surprisingly the same has not been followed by the banks.

The Court said that,

This is a case, which shocks conscience of the Court as to how few of the bank officers in connivance of the petitioner had advanced almost Rs.900 crores, of public money and had allowed the petitioner to syphon away the funds and did nothing but were the mute spectators when the entire fund was syphoned off. Even after the entire amount was syphoned off, the banks did not take any effective steps to recover the said amount.

The RBI Circular dated 01.07.2009 mandates all the banks for classification and reporting of fraud. The said Circular does not provide any exemption or relaxation to the banks not to report regarding fraud committed by unscrupulous borrowers. Even, Clause-6 of the Circular also mandates all the Public Sector Banks to report to the Fraud Cell of CBI in cases of fraud involving more than Rs 5 crores.

“In the matter, we do not find any recital in the affidavits filed by the banks, which may indicate that any point of time they had communicated to the RBI in the matter. In case, there is any fraud then in every eventuality the matter is to be referred to the CBI for investigation. Even otherwise, there is complicity as indicated above.

We also find that the bank officials had given a complete go bye to the Circular”, the Court further observed while disposing the petition.

In such situation, the Court directed to the CBI to investigate against each and every bank as to how the loans were sanctioned in contravention of the RBI Guidelines and Circulars and also enquire the officers of the banks, who had accorded approval while sanctioning the loan being Member of the Board/Credit Committee and also the officers, who had not taken any effective steps to recover the amount and also against the officers of the banks who failed to take any prompt action to realize the amount from the borrower and allowed the petitioner to siphon off the money.

“As the CBI is not a party before us, we request the Registrar General of this Court to communicate the present order to the Director, Central Bureau of Investigation, New Delhi.

In case, the CBI finds that there is a case of money laundering as per the provisions of Prevention of Money Laundering Act, 2002 they may also refer the matter to the Enforcement Directorate and take help to recover the said amount.

It is further directed that the petitioner will join the investigation and cooperate with the investigation team and if they do not do so, it is open for the investigation agency to proceed against the petitioner in accordance with law. The authorities should endeavor to find out the money trail, where it has been syphoned off and parked”, the order reads.

On Human Rights Day, National Human Rights Commission Chairperson JUSTICE ARUN KUMAR MISHRA highlighted the work done by the statutory body during his tenure. In an exclusive interview with RAJSHRI RAI, editor-in-chief, APN channel, he recounted the action taken by the Commission in critical areas and laid bare the blueprint for further action

Rajshri Rai: It has been observed that National Human Rights Commission (NHRC) has been proactive in cases and has issued notices to state governments on human rights transgressions. How effective has this initiative been? The question gains importance with the Human Rights Day falling on December 10.

Justice Arun Kumar Mishra: It’s not a matter of just two and a half years. NHRC has been at the forefront of protecting human rights since its inception. However, we have proactively issued advisories on all major human rights violation incidents for the last two and a half years. Earlier, we issued an advisory on bonded labour, which was accepted by the government. Pre-trial stage compensation was increased to Rs 20,000. On September 24, 2021, NHRC issued an advisory on the protection of human rights of persons engaged in hazardous and sewer/septic tank cleaning. There have been deaths of around 600-700 sewage cleaners per year, and in the advisory, we have required that sewage should be cleaned by mechanical methods and not by men. We had also instructed that until the whole process is fully mechanised, the workers should be provided with safety gear and accessories, helmets, flashlights, oxygen, and precaution devices to detect where poisonous gases are present. 

It is heartening to note that the centre has begun a “Namaste” programme wherein funds are provided to state government and local bodies to mechanise the sewage cleaning process. However, the funds are not being utilised by the beneficiaries. We had issued notice to all the states. We had issued advisories for bettering mental hospitals and on prevention of jail suicides in correctional homes. Eighty percent of deaths in correctional homes are due to suicides. Hence, we recommended that mental health check-ups be made ligature objects that facilitate hanging be removed, etc. We have also issued advisories for pollution control and directed bridging the digital divide.

RR: Child exploitation on the internet is a serious concern. NHRC has recommended changes to the POCSO Act for the protection of children. Also, an advisory on Child Sexual Abuse Material (CSAM) has been issued. How significant is it in dealing with the problem?

AKM: This is an international problem. Children are being bullied on the internet; they are subjected to sexual harassment and other forms of exploitation, leading even to suicide. Sexual molestation of children is also shown live on the internet. We organised international seminars and deliberated on the problem. On October 27, 2023, an advisory was issued to all states asking them to form a special cyber crime cell to deal with the menace. 

We also stressed that intermediaries should take off such horrific content/videos online. Earlier, action against intermediaries was supposed to be taken within 36 hours; we advised that such action should be taken within six hours. Awareness campaigns should be initiated, and concerned officials should be trained. 

We have suggested changes in the POCSO Act, that the “pornography” word should be replaced by “CSAM” as it is the sexual exploitation of children and a serious crime. The prevailing punishment is seven years or less. We have suggested in our advisory that punishment should be increased, and Section 2, Section 14, and other relevant provisions of the POCSO Act and IT Act should be amended accordingly. It should be the responsibility of intermediaries to stop such content on their platforms as they generate revenue.

RR: On CSAM, an advisory was issued to all states and Union territories with a request for an action taken report within two months. What changes have been recommended, and why was it deemed necessary?

AKM: Everyone is aware of their responsibility in this regard and the gravity of the situation. All states and the centre is expected to take proper corrective action in this regard.

RR: Recently, in an heartbreaking incident in Ujjain, a 16-year-old was so relentlessly cyberbullied for his queer identity that he took his own life. This is just one of the many incidents which have underlined the dangers of internet bullying. Will you raise such issues and ask for action?

AKM: We strongly condemn such activity. We are against cyberbullying and online games through which child exploitation happens. Children shouldn’t have access to such games, and governments, cyber cells, and gaming companies should take action in this regard. Forensic labs and digital forensics should be upgraded and broad-based. Police and people should be made aware of the problem.

RR: Today, LGBTQ rights are in focus. NHRC has issued an advisory on transgender welfare and has called for a policy to combat discrimination. What is the Commission’s blueprint for LGBTQ rights?

AKM: At NHRC, we have a core group that deliberates on the problems of the LGBTQ+ group. We had issued an advisory for the protection of the rights of transgenders, guidelines on sex change surgery, and treating transgender children as a daughter for receiving pension and gratuity, etc. In many states, transgender children do not have succession rights in agricultural land; we proposed to rectify this. Transgenders should get loans on easy terms by subvention of interest by the government. They should get proper skill development, and monetary benefits to Garima Greh should be released on time. Separate grievance cells, old-age homes and separate washrooms for them have also been recommended in an advisory. We have recommended that name change documents should be promptly verified. These are some of the measures by which NHRC has worked for the rights of the community.

RR: Air pollution has been a thorny issue. The Supreme Court has repeatedly reprimanded the concerned states for their inability to curb pollution. Clean air is an aspect of the right to life, and NHRC also showed concern in this area. What is the panacea for air pollution? Does the Commission have the clout to enforce anti-pollution norms?

AKM: NHRC aims to curb pollution by ensuring that clean air and water are available to citizens. Many pollution issues are outstanding with NHRC, and we expect the government to act on them. The government is doing that. The right to clean air and clean water is part of the constitutional guarantee of the right to life. The 1972 Stockholm Declaration and the United Nations have declared clean air and clean water as part of people’s right to life. NHRC takes care of polluting industries by instructing the concerned state pollution control boards to do the inspection and take action. They have successfully made the polluting factories comply with norms and desist from the act. It was a proud moment for us when, in Denmark, our work was commended internationally and was made a role model for other international human rights institutions to emulate. We have also been invited as experts in the Dubai conference so that other nations’ institutions can learn from NHRC. Pollution needs a global plan, and India subscribes to such a plan of action. 

RR: In September, the Commission also directed state governments to submit a roadmap within 15 days, ensuring the end of human intervention in cleaning hazardous septic tanks and sewage cleaning. NHRC had also warned of criminal action against erring officials. What is the ground situation now? What action is being taken against non-conformers?

AKM: We have issued instructions to all states in this regard. At the same time, whenever any incident of death in sewage/septic tank cleaning is reported in the newspaper, we take suo motu cognisance of it. We issue notices, register complaints, do a hearing and recommend compensation. Earlier, there was a compensation of Rs 10 lakh in such cases. In the Balram Singh case, Justice Ravindra Bhatt gave a commendable verdict, and on the lines of our advisory, has issued guidelines for mechanical cleaning and had instructed for a roadmap. It is heartening to note that the compensation has been raised to Rs 30 lakh, and instruction for mechanised cleaning is in line with our recommendations in advisory. Even instructions for compassionate appointment of kin of the deceased are in accordance with our advisory. If authorities do not take action in this direction, we propose to take action against them.

RR: Recently, Uttarkashi saw an unprecedented crisis in which 41 workers got trapped when an under-construction tunnel collapsed. The casualty has brought to focus the occupational hazards faced by workers. What is NHRC doing in this regard?

AKM: We had gone to North East, and there, in Kokrajhar, 43 workers had died in a tunnel that was being made for the railways. We had instructed for compensation, and the workers’ kin got Rs 5 lakh each, but some amount was not paid to them.

We intervened and ensured that the required monetary relief was provided to them. This is a form of human rights violation, and we intervene in every such matter and recommend relief.

RR: Women wrestlers’ alleged sexual harassment case has brought the spotlight back on women’s exploitation in organisations and disregard of the POSH Act. In May, NHRC gave 16 non-complying sports federations a month to submit a detailed report on the status of the constitution of sexual harassment panels and steps taken to address reported violations. How relevant was the report, and what is the status currently?

AKM: On our notice of May 11 regarding the formation of the internal complaints committee (ICC), we issued notice to not only 16 sporting bodies, but a lot more. More than 52 bodies replied that either they have formed the committee or are in the process of creating it. Even the BCCI, in compliance with our directions, has formed the ICC in September. We will assess the compliance shortly. It is not only a matter of the formation of ICC, but a change in societal attitude towards women and strict enforcement of laws. Sexual Harassment of Women at Workplace Act (POSH Act) was made in 2013 after the Supreme Court framed guidelines in the Vishakha case. Any infringement of the Act must be punished. 

RR: One of the most horrendous incidents in the recent past was that of Manipur. How effective has the NHRC intervention been?

AKM: On the reprehensible Manipur incidents, we heard complainants and officials of Manipur in Guwahati and came to the conclusion that the situation has not returned to normal. We also noted that ingress was not normal on major roads and insisted that obstructions be removed, and roads be opened for travelling. We had asked for early disbursement of compensation for the dead. Out of 180 dead persons, the state has disbursed compensation to the next of kin of 93 deceased; the rest are to be paid. Also, we had instructed that Rs 10 lakh be granted as an aid to rebuild homes destroyed in the violence. We had ordered surveys to be done in six weeks and financial assistance to be given so that they could rebuild their homes and return to their place. We had requested that people living in transit camps be offered employment, education for children, and nutritious food.

RR: North East is an oft-neglected area. People from this area often face discrimination in other parts of the country. Recently, NHRC has taken the initiative to take corrective measures in this area. What are the key points of concern? How was this initiative received, and what are the bottlenecks?

AKM: North East communities are very empowered. Their society is well developed. Even at the panchayat level, they are very aware and demand their rights strongly. We have received specific complaints of police excesses and torture, and we are in the process of taking action on it. If the police are found on the wrong foot, we recommend compensation for the aggrieved. We have also directed for preserving cultural heritage from destruction in Buddhist villages.

RR: Health for all is the aim of the government, but ground-level realities are different. Despite the spread of the health services network, quacks have been operating with impunity and putting the lives of people in danger. Have any complaints been made in this regard?

AKM: We have taken note of many such incidents—some based on the complaint, some suo motu. We are taking action on it. Most incidents have been reported from Odisha, Bihar and some other states. It should be incumbent on states to provide better healthcare facilities as it is an extension of the fundamental right to life. Quality and affordable treatment should be made available to all, and the government has rightly taken policy action in this regard. Some expensive medicines and medical treatments are now affordable to low-income people.

RR: Mental health is an area of concern. How do you see the issue in human rights terms? Recently, NHRC has said most mental health establishments need to be restructured as per contemporary requirements.

AKM: Mental health issues should be managed according to the Mental Health Care Act of 2017, a comprehensive law. Unfortunately, state governments haven’t taken heed to the provisions and aims of the Act. Review Boards and mental health authorities have not been formed. Halfway homes for recovered mental health patients have not been made. The patients who have recovered from illness are not taken back by their families, and they are compelled to live in hospital; they should be provided with half way homes. We have issued instructions to the Director General of Police of all states and surveyed all 47 mental hospitals in the country. I visited four mental hospitals in Ranchi, Agra and Gwalior with members. The condition is not good. The infrastructure needs to be reoccupied and upgraded, and state governments must take care of the facilities.

RR: In September, the National Human Rights of Asia Pacific adopted the “Delhi Declaration” on human rights. How relevant is the declaration in today’s milieu, especially for India and global efforts towards human rights amelioration? How has the international community risen to the occasion?

AKM: Delhi Declaration is concerned with human rights in the world. The issue of pollution and cybercrime is a global concern. In cybercrime, earnings from criminal commerce are also a global challenge. The profits of criminal commerce are only third in quantum with that of the yearly budget of America and China. Cybercrime crosses boundaries and happens in every country. Crimes like data hacking, slavery, trafficking, and child sexual exploitation are all happening via the Internet. It needs global partnership and collaboration in crime control.

RR: At a time when NHRC is making global partners and taking commendable initiatives, the Global Alliance of National Human Rights Institutions has deferred the NHRC’s accreditation for the second time. How do you see this development?

AKM: Their main objection is that the 1993 Human Rights Act needs to be amended. This Act was assessed many times for accreditation since 1999 and was considered and accepted as compliant with the Paris principles and accorded “A” status by the Alliance during India’s accreditation process. Suddenly, in 2017, they thought that the recruitment process of members was wrong. How could it be so? India has pioneered the establishment of the Human Rights Commission. India was the first country to promulgate an Act after the Paris Principles. India formulated the Protection of Human Rights Act in 1993, the first in the world. For 20 years, the Alliance had accepted the Act of 1993. Now they are saying that applications should be invited for recruitment of members in the Commission, which means that the chief justice of India, judges of the Supreme Court, chief justices of High Courts and judges of High Courts should give application for appointment. I will never apply for any post. 

Our Human Rights Commission’s constitution is the strongest in the world. Our parliament has made one of the strongest laws on human rights. They should study our constitutional scheme and our laws. 

Another objection is that our police are not independent. That, again, is wrong. Human rights violation investigation is being done by police. The 15 crore rupees compensation recommended by us is on the recommendation of the police officers in the Investigation Division of the Commission. Our investigation wing is independent, but they presume it is not independent. Our Secretary General is a senior IAS officer who joins us after serving the government for 30 years or more. He is an expert in administrative governance, a man of impeccable integrity. He cannot interfere in the probe or complaint system, so how can it be said that the Secretary General is biased? We have raised these points in reply and expect they will come and study our system. In some countries, they induct ministers into the Human Rights Commission. In India, former chief justices and Supreme Court judges have dedicated their lives to the nation. How can a finger be raised in the process of an appointment?

RR: It is not every day that the NHRC and the Supreme Court are at odds. But during the Bengal elections, the Calcutta High Court showed its displeasure over the suo motu action of the Commission to appoint observers to probe poll violence. How would you comment on the Commission’s stand?

AKM: We welcome the Supreme Court’s decision. The Supreme Court has said what we wanted. The Court has said that the NHRC is competent to take action against poll violence. Regarding the Court quashing our order, the decision was given two days before the High Court order. It was said in the order that the State Election Commission and NHRC make efforts to curb poll violence. 

Poll violence is a fact in West Bengal. We took cognisance of the matter and said the Election Commission may work closely with us to curb poll violence. The Court also noted that the Election Commission deploy observers. We also accept that the Election Commission is empowered to deploy observers. But our decision was before the High Court hadn’t issued the order, nor was the High Court informed about our decision. Our decision was not required as the Supreme Court had already passed the verdict on the responsibility of the Election Commission to deploy observers in the poll. We are happy with the decision as we stand for violence-free poll. Impartial voting, free from violence is a human right in democracies.

RR: Political parties are announcing freebies. How do you see the issue? Should political freebies be banned? 

AKM: I don’t want to comment on any individual party or particular freebie announcements. But if we speak of Directive Principles of State Policy mentioned in Part IV of the Constitution, these are guiding principles of state governance. These principles are for uplifting people with low incomes and promoting distributive justice. If the state announces policies for improving the lot of people with low incomes, it is suitable as it is constitutionally mandated. But if the upper or financially strong class is offered freebies, it becomes debatable, and the state and courts have to ponder and decide on it.

RR: In October, the National Human Rights Commission turned 30. How do you see the journey till now and the challenges ahead? Do you feel the need for more powers for NHRC, and what is your take on inactive State Human Rights Commissions?

AKM: We don’t want any further teeth. Our notice is sufficient to stop human rights violations. Regarding whether our recommendations are binding, some High Courts have said they are binding, and some are not. However, our experience has shown that our recommendations are taken very seriously, and the compliance rate is approximately 90%, which is very good because even some court decrees still need to be complied with for 20-25 years. 

As for inactive and defunct State Commissions, we meet with State Human Rights Commissions at least twice yearly and coordinate to work together and discuss problems. There is some staff shortage in some State Commissions, but the overall infrastructure is good. In 90% of places, such a problem doesn’t exist, and the Commissions are working quite well in handling human rights issues. They are doing spot investigations, too.