The National Advisory Committee has recently come out with a Communal Violence Bill. The Bill is intended to prevent acts of violence, or incitement to violence directed at people by virtue of their membership to any “group”. An existing Bill titled the “Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005” pending in the Rajya Sabha (analysis here). The main features of the NAC Bill are explained below: The Bill makes illegal acts which result in injury to persons or property, if such acts are directed against persons on the basis of their affiliation to any group, and if such an act destroys the secular fabric of the nation. Such acts include sexual assault, hate propaganda, torture and organized communal violence. It makes public servants punishable for failing to discharge their stated duties in an unbiased manner. In addition, public servants have duties such as the duty to provide protection to victims of communal violence and also have to take steps to prevent the outbreak of communal violence. The Bill establishes a National Authority for Communal Harmony, Justice, and Reparation to prevent acts of communal violence, incitement to communal violence, containing the spread of communal violence, and monitoring investigations into acts of communal violence. The Authority can also inquire into and investigate acts of communal violence by itself. The Bill also provides for the setting up of State Authorities for Communal Harmony, Justice, and Reparation. The central or state government has been given the authority to intercept any messages or transmissions if it feels that it might lead to communal violence. This power is subject to existing procedures which have to be complied with for intercepting messages and transmissions. Importantly, if public officers are liable to be prosecuted for offences under the Bill, and prior sanction is required for such prosecution, the state government has to grant or refuse sanction within 30 days. If not, then sanction will be deemed to have been granted. The Bill also allows the states to set up one or more Human Rights Defender of Justice and Reparations’ in every district. The Human Rights defender will ensure that those affected by communal and targeted violence are able to access their rights under existing laws. Apart from these, the Bill also establishes state and district-level authorities for assessing compensation for victims of communal violence. States also have numerous obligations towards victims, such as the establishment of relief camps, ensuring proper facilities, medical provisions and clothing for those within such camps, etc. The states government also has the obligation to create conditions which allow the return of victims of communal violence to the place of their ordinary residence.
The government's acquisition of land for projects has been facing protests across the country, the violence in Uttar Pradesh being only the latest. What is Land Acquisition? Land acquisition is the process by which the government forcibly acquires private property for public purpose without the consent of the land-owner. It is thus different from a land purchase, in which the sale is made by a willing seller. How is this process governed? Land Acquisition is governed by the Land Acquisition Act, 1894. The government has to follow a process of declaring the land to be acquired, notify the interested persons, and acquire the land after paying due compensation. Various state legislatures have also passed Acts that detail various aspects of the acquisition process. Land is a state subject. Why is Parliament passing a law? Though land is a state subject, "acquisition and requisitioning of property" is in the concurrent list. Both Parliament and state legislatures can make laws on this subject. Is there a new Act being proposed? The government had introduced a Bill to amend this Act in 2007. That Bill lapsed in 2009 at the time of the general elections. The government has stated its intent to re-introduce a similar Bill, but has not yet done so. What are the major changes being proposed? There are significant changes proposed in the 2007 Bill with regard to (a) the purpose for which land may be acquired; (b) the amount of compensation to be paid; (c) the process of acquisition; (d) use of the land acquired; and (e) dispute settlement mechanisms. We explain these briefly below. Purpose: Currently, land may be acquired for a range of uses such as village sites, town or rural planning, residential purposes for poor or displaced persons, planned development (education, housing, health, slum clearance), and for state corporations. Land may also be acquired for use by private companies for the above purposes or if the work "is likely to prove useful to the public". The 2007 Bill had a narrower list: (a) for strategic naval, military or air force purposes; (b) for public infrastructure projects; and (c) for any purpose useful to the general public if 70% of the land has been purchased from willing sellers through the free market. Compensation: The current Act requires market value to be paid for the land and any other property on it (buildings, trees, irrigation work etc) as well as expenses for compelling the person change place of residence or business. It explicitly prohibits taking into account the intended use of land while computing market value. The 2007 Bill requires payment of the highest of three items: the minimum value specified for stamp duty, the average of the top 50 per cent by price of land sale in the vicinity, and the average of the top 50 pc of the land purchased for the project from willing sellers. For computing recent land sale, the intended land use is to be used. Thus, agricultural land being acquired for an industrial project will be paid the price of industrial land. Process of acquisition: Several changes are proposed, including the requirement of a social impact assessment. Any project that displaces more than 400 families (200 in hilly, tribal and desert areas) will require an SIA before the acquisition is approved. Use of land acquired: The 2007 Bill requires the land acquired to be used for that purpose within five years. If this condition is not met, the land reverts to the government (it is not returned to the original land owners). If any acquired land is transferred to another entity, 80 pc of the capital gains has to be shared with the original land-owners and their legal heirs. Dispute Settlement: Currently, all disputes are resolved by civil courts, which results in delays. The 2007 Bill sets up Land Acquisition Compensation Dispute Resolution Authority at the state and national levels. These authorities will have the power of civil courts, and will adjudicate disputes related to compensation claims. Does the proposed Bill address the major issues? The Bill narrows the uses for which land may be acquired. It also changes the compensation due and links that to the market price for which land is to be used. There could be significant changes in acquisition for use by private industry. Firstly, they would have to purchase at least 70 pc of the required land from willing sellers (presumably, at fair market price). Second, the compensation amount for the remaining (upto 30 pc of land) could be significantly higher than the current method. This would be at a premium to the average paid to the willing sellers, and it would be based on intended industrial or commercial use which usually commands a higher price than agricultural land. However, the effect on acquisition for projects such as highways and railways will not be significant, as there is no benchmark for price determination for such use. This article appeared in Rediff News on May 12, 2011 and can be accessed here.
The Lok Pal (anti-corruption body) Bill has generated widespread interest in the past few days.
The Bill is an attempt by the government, under massive pressure due to corruption charges, to gain some of its lost ground. However, civil rights activists, including Anna Hazare, Swami Agnivesh, Kiran Bedi and Arvind Kejriwal, have termed the draft legislation as weak and demanded that fifty per cent of the members in the committee drafting the bill should be from the public.
But the common man appears to be in the dark about the scope of the proposed bill.
Here's an FAQ on the controversial bill.
What is the controversy between the government and Anna Hazare about?
Anna Hazare and other civil society activists have proposed a draft Lok Pal Bill to tackle the menace of corruption. The Prime Minister formed a sub-committee of the Group of Ministers to discuss the issue with these activists. However, these two groups were unable to reach an agreement on the provisions of the Lok Pal Bill. According to the government, the activists demanded that the government should accept the Bill drafted by them without any changes.
What steps has the government taken to enact the Lok Pal Bill?
In January 2011, the government has formed a Group of Ministers chaired by Shri Pranab Mukherjee to suggest measures to tackle corruption, including examination of the proposal of a Lok Pal Bill.
What is the purpose of the office of Lok Pal?
The office of the Lok Pal is the Indian version of the office of an Ombudsman who is appointed to inquire into complaints made by citizens against public officials. The Lok Pal is a forum where the citizen can send a complaint against a public official, which would then be inquired into and the citizen would be provided some redressal.
What are issues that have generated debate on the Lok Pal Bill?
There are diverging views on issues such as the inclusion of the office of the Prime Minister, Ministers and Members of Parliament, inclusion of judges, and powers of the Lok Pal. Some experts contend that all public officials should be accountable while others feel that the autonomy and privilege of Parliament require the Prime Minister, Ministers, and Members of Parliament to be accountable only to Parliament.
Have there been other attempts to establish the institution of Lok Pal at the central level?
Yes. The Lok Pal Bill has been introduced eight times in the Lok Sabha (1968, 1971, 1977, 1985, 1989, 1996, 1998 and 2001). However, each time the Lok Sabha was dissolved before the Bill could be passed, except in 1985 when it was withdrawn.
Have any expert commissions made recommendations on the office of Lok Pal?
Yes, a number of commissions have made various recommendations regarding the necessity of the office of the Lok Pal, its composition, powers and functions, and jurisdiction. The commissions, which dealt with the Lok Pal include the First Administrative Reforms Commission of 1966, the National Commission to Review the Working of the Constitution of 2002 and the Second Administrative Reforms Commission of 2007. The Lok Pal Bills that were introduced were referred to various Parliamentary committees (the last three Bills were referred to the Standing Committee on Home Affairs).
What are the present laws that deal with corruption of public officials in India?
Public servants (such as government employees, judges, armed forces, and Members of Parliament) can be prosecuted for corruption under the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. However, the Code of Criminal Procedure and the 1988 Act require the investigating agency (such as the CBI) to get prior sanction of the central or state government before it can initiate the prosecution process in a court.
Have the state governments been more successful in setting up bodies to redress public grievances against administrative acts?
So far 18 state governments have enacted legislation to set up the office of Lokayukta and Uplokayukta (deputy Lokayukta). The 18 states are: Andhra Pradesh, Assam, Bihar, Chhattisgarh, Delhi, Gujarat, Jharkhand, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Uttarakhand, and Uttar Pradesh.
Which other countries have the office of the Ombudsman for grievances?
Sweden, Finland, Denmark, the Netherlands, Austria, Portugal, Spain, New Zealand, Burkina Faso and the United Kingdom are some of the countries which have the office of an Ombudsman.
The article was published on rediff.com on April 5, 2011
In a recent judgement (Judgement on Feb 23 - Baldev Singh and Ors. V. State of Punjab), the Supreme Court reduced the sentence of three persons convicted of rape from 10 years to 3 and a half years, and also asked the three convicts to pay a fine of Rs 50,000 each to the victim. In reducing the sentence, the court drew from the provision in S. 376 (punishment for rape) of the Indian Penal Code which allows the court to reduce the sentence for "adequate and special reasons". There have been a number of past cases where the Supreme Court has reversed High Court decisions reducing sentences under this provision for not giving suitable reasons. In 2007, the Supreme Court struck down a decision of the Karnataka High Court which had reduced the sentence of a convicted rapist to 3 and a half years. The High Court had stated that the sentence should be reduced since the accused was "a young boy of 18 years belonging to Vaddara Community and Illiterate". The Supreme Court stated that there is a legislative mandate to impose a sentence for not less than 10 years. Only in exceptional cases, for "adequate and special reasons" can a sentence less than 10 years be imposed. It overturned the Karnataka High Court decision saying that there was an "absence of any reason which could have been treated as "special and adequate reason"". In Baldev Singh's case, the Supreme Court said: 1. The fact that the incident is an old one (the incident took place in 1997) is a circumstance which fits into "adequate and special reasons" for reducing a sentence. 2. The parties have entered into a compromise among themselves. The issue is whether this judgement has gone beyond the legislative mandate, and whether it has adhered to the principles laid down by earlier decisions of the Supreme Court. In 2007, the Supreme Court itself stated that for a crime like rape, strong reasons have to be given to reduce the sentence envisaged by the legislature. Moreover, the provision does not envisage the settlement of a crime by payment of compensation to the victim of a crime. A criminal act is seen in law as a crime against the whole of society (which is why the state's prosecution agency, and not the victim, goes to court against alleged criminals). Therefore, criminal actions such as rape (or murder, robbery, kidnapping etc.) cannot be "settled" by the payment of compensation under the Indian Penal Code. In this light, it should be interesting to see whether the State files an appeal against this judgement.
The union government is reportedly considering a legislation to create anti-corruption units both at the centre and the states. Such institutions were first conceptualized by the Administrative Reforms Commission (ARC) headed by Morarji Desai in its report published in 1966. It recommended the creation of two independent authorities - the Lokpal at the centre and the Lokayuktas in the states. The first Lokpal Bill was introduced in Parliament in 1968 but it lapsed with the dissolution of Lok Sabha. Later Bills also met a similar fate. Though the Lokpal could not be created as a national institution, the interest generated led to the enactment of various state legislations. Maharashtra became the first state to create a Lokayukta in 1972. Presently more than 50% of the states have Lokayuktas, though their powers, and consequently their functioning varies significantly across states. Existing institutional framework The Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI) are the two cornerstones of the existing institutional framework. However, the efficacy of the current system has been questioned.  Though the CVC (set up in 1964) is an independent agency directly responsible to the Parliament, its role is advisory in nature. It relies on the CBI for investigation and only oversees the bureaucracy; Ministers and Members of Parliament are out of its purview. Thus, presently there is no authority (other than Parliament itself) with the mandate to oversee actions of political functionaries. At the state level, similar vigilance and anti-corruption organisations exist, although the nature of these organisations varies across states. Karnataka Lokayukta Act The Karnataka Lokayukta is widely considered as the most active among the state anti-corruption units.  It was first set up in 1986 under the Karnataka Lokayukta Act, 1984. The Act was recently amended by the state government following the resignation of the Lokayukta, Justice Santosh Hegde. Justice Hegde had been demanding additional powers for the Lokayukta - especially the power to investigate suo-motu. Following the amendment, the Lokayukta has been given the suo motu powers to investigate all public servants except the CM, Ministers, Legislators and those nominated by the government. Following are the main provisions of the Karnataka Lokayukta Act:
- The public servants who are covered by the Act include the CM, Ministers, Legislators and all officers of the state government including the heads of bodies and corporations established by any law of the state legislature.
- The body is constituted for a term of five years and consists of one Lokayukta and one or more Upalokayuktas. All members must have been judges, with either the Supreme Court or some High Court.
- Members are appointed on the advice of the CM in consultation with the Chief Justice of the Karnataka High Court, the Chairman of the Karnataka Legislative Council, the Speaker of the Karnataka Legislative Assembly, and the Leader of Opposition in both Houses.
- Investigations involving the CM, Ministers, Legislators and those nominated by the government must be based on written complaints; other public servants can be investigated suo-motu.
- Reports of the Lokayukta are recommendatory. It does not have the power to prosecute.
The forthcoming Ordinance/ Bill Given that a Lokpal Bill is on the anvil, it might be useful at this point to enumerate some metrics/ questions against which the legislation should be tested:
- Should the Lokpal limit itself to political functionaries? Should CBI and CVC be brought under the Lokpal, thereby creating a single consolidated independent anti-corruption entity?
- Should Lokpal be restricted to an advisory role? Should it have the power to prosecute?
- Should it have suo-motu powers to investigate? Would a written complaint always be forthcoming, especially when the people being complained against occupy powerful positions?
- What should be the composition of the body? Who should appoint members?
- Should the Prime Minister be exempt from its purview?
- Should prior permission from the Speaker or the Chairman of the House be required to initiate inquiry against Ministers/ MPs?
What do you think? Write in with your comments. Notes:  Report of the Second Administrative Reforms Commission (ARC), 'Ethics in Governance' (2007)  Additional reading: An interview with the Karnataka Lokayukta
In the recently concluded Winter Session of Parliament, nine Bills were introduced. Of the Bills introduced, 4 bills have been referred to the relevant Standing Committee for examining the Bill. The Standing Committees have been given three months to scrutinize the bills, hold consultations and present a report. Details of these Bills are: 1. The Forward Contracts (Regulation) Amendment Bill, 2010 (to be examined by the Committee on Food, Consumer Affairs and Public Distribution) 2. The Multi-State Co-operative Societies (Amendment) Bill, 2010 (to be examined by the Committee on Agriculture) 3. The NIMHANS, Bangalore Bill, 2010 (to be examined by the Committee on Health and Family Welfare) 4. The National Identification Authority of India Bill, 2010 (to be examined by the Committee on Finance) The composition of the Standing Committees examining the Bills can be found here. Typically, during the process of review the parliamentary standing committees issue advertisements in newspapers inviting public feedback and comments on the Bill. As and when the advertisements appear, details can be found on the PRS website.
The issue of judges declaring their assets assumes importance in light of recent allegations and inquiries into allegations of wrongdoing by judges (read our post on the report of the Committee set up to examine allegations of wrongdoing by Justice Soumitra Sen of the Calcutta High Court). The Delhi High Court also gave a judgement recently, requiring judges of the Supreme Court to declare their assets. The Bill on judicial accountability (read summary here) requires judges to declare their assets to a specified authority within 30 days of them taking their oath of office. The assets of spouses and dependents is also required to be disclosed. The Bill also states that the assets declared will be put up on the website of the relevant court.
The Andhra Pradesh government issued an Ordinance on October 15, 2010, which stipulated conditions for the microfinance activities in the State. This Ordinance was ratified two months later on December 15, 2010 by the lower house of the Andhra Pradesh assembly. The key features of the Bill are: •All MFIs should be registered with the district authority. •No person should be a member of more than one SHG. •All MFIs shall make public the rate of interest charged by them on the loans extended. •There would be a penalty on the use of coercive action by the MFIs. •Any person who contravenes any provision of the Ordinance shall be punishable with imprisonment for a period of 6 months or a fine up to the amount of Rs 10,000, or both. The State assembly accepted most of the features from the earlier Ordinance in the Bill. However, the demand for a cap on the interest rates charged by the MFIs for the loans extended to the SHGs was rejected during the ratification.
The Judicial Standards and Accountability Bill, 2010 was introduced in the Lok Sabha on December 1, 2010. The Bill was introduced by the Shri M. Veerappa Moily, the Minister of Law and Justice. The Bill seeks to (a) lay down judicial standards, (b) provide for the accountability of judges, and (c) establish mechanisms for investigating individual complaints for misbehaviour or incapacity of a judge of the Supreme Court or High Courts. It also provides a mechanism for the removal of judges. Find the main features of the Bill explained here.
All companies are currently governed by the Companies Act, 1956. The Act has been amended 24 times since then. Three committees were formed in the last ten years, chaired by Justice V B Eradi (2001), Naresh Chandra (2002) and J J Irani (2005) to look into various aspects of corporate governance and company law. The Companies Bill, 2009 incorporates some of these recommendations. Main features The major themes of the Bill are as follows: It moves a number of issues that are currently specified in the Act (and its schedules) to the Rules; this change will make the law more flexible, as changes can be made through government notification, and would not require an amendment bill in Parliament. On a number of issues, the Bill moves the onus of oversight towards shareholders and away from the government. It also requires a super-majority of 75 percent shareholder votes for certain decisions. The powers of creditors have been enhanced in cases where a company is in financial distress. It has new provisions regarding independent directors and auditors in order to strengthen corporate governance. Finally, the bill increases penalties, and provides for special courts. Types of companies The Bill provides for six types of companies. Public companies need to have at least seven shareholders, and private companies between two and 50 shareholders. Charitable companies should have at least one shareholder, may have only certain specified objectives, and may not distribute dividend. Three new types of companies have been defined, which have less stringent provisions. These are one-person companies, small companies (private companies with capital less than Rs 50 million and turnover below Rs 200 million), and dormant companies (formed for future projects, or no operations for two years). Corporate Governance The Bill defines the duties of directors and norms for composition of boards. The number of directors is capped at 12. At least one director should be resident in India for at least 183 days in a calendar year and at least a third of the board should consist of independent directors. The Bill also sets guidelines for auditors. Certain related persons such as creditors, debtors, shareholders and guarantors cannot be appointed as auditors. Certain services such as book-keeping, internal audit and management services may not be undertaken by the auditors. Removal of an auditor before completion of term requires approval of 75 percent of the shareholders. Adjudication The Bill provides for a National Company Law Tribunal (NCLT) to adjudicate disputes between companies and their stakeholders. It also establishes an Appellate Tribunal. The NCLT may ask the government to investigate the working of a company on an application made by 100 shareholders or those who hold 10 percent of the voting power. Arrangements All arrangements such as mergers, takeovers, debt split, share splits and reduction in share capital must be approved by 75 percent of creditors or shareholders, and sanctioned by the NCLT. Standing Committee’s Recommendations The Parliamentary Standing Committee on Finance has submitted its report, and suggested several significant amendments. Corporate governance Substantive matters covered in various corporate governance guidelines should be contained in the Bill. These include: separation of offices of Chairman and Chief Executive Officer; limiting the number of companies in which an individual may become director; attributes for independent directors; appointment of auditors. Delegated legislation The Committee noted that the Bill provided excessive scope for delegated legislation. Several substantive provisions were left for rule-making and the Ministry was asked to reconsider provisions made for excessive delegated legislation. The Ministry has agreed to make some changes to include the following provisions in the Act: the definition of small companies; the manner of subscribing names to the Memorandum of Association; the format of Memorandum of Association to be prescribed in the Schedule; the manner of conducting Extraordinary General Meetings; documents to be filed with the Registrar of Companies. The Committee recommended that provisions relating to independent directors in the Bill should be distinguished from other directors. There should be a clear expression of their mode of appointment, qualifications, extent of independence from management, roles, responsibilities, and liabilities. The Committee also recommended that the appointment process of independent Directors should be made independent of the company’s management. This should be done by constituting a panel to be maintained by the Ministry of Corporate Affairs, out of which companies can choose their requirement of independent directors. Investor protection The Ministry, in response to the Committee’s concerns for ensuring protection of small investors and minority shareholders, indicated new proposals. These include: enhanced disclosure requirements at the time of incorporation; shareholder’s associations/groups enabled to take legal action in case of any fraudulent action by the company; directors of a company which has defaulted in payment of interest to depositors to be disqualified for future appointment as directors. The Ministry also made some suggestions on protection of minority shareholders/small investors, which the Committee accepted, including the source of promoter’s contribution to be disclosed in the Prospectus; stricter rules for bigger and solvent companies on acceptance of deposits from the public; return to be filed with Registrar in case of promoters/top ten shareholders stake changing beyond a limit. Corporate Delinquency Recommendations include: subsidiary companies not to have further subsidiaries; main objects for raising public offer should be mentioned on the first page of the prospectus; tenure of independent director should be provided in law; the office of the Chairman and the Managing Director/CEO should be separated. The Committee emphasised that the procedural defaults should be viewed in a different perspective from fraudulent practices. Shareholder democracy The Committee recommended that the system of proxy voting should be discontinued. It also stated that the quorum for company meetings should be higher than the proposed five members, and should be increased to a reasonable percentage. Foreign companies The Bill requires foreign companies having a place of business in India and with Indian shareholding to comply with certain provisions in the proposed Bill. The Committee observed that the Bill does not clearly explain the applicability of the Bill to foreign companies incorporated outside India with a place of business in India. It recommended that all such foreign companies should be brought within the ambit of the chapter dealing with foreign companies. Next steps The report of the Standing Committee indicates that the Ministry has accepted many of its recommendations. It is likely that the government will take up the Bill for consideration and passing during the winter session, which starts on 9th November. This article was published in PRAGATI on November 1, 2010