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PATEL AGITATION:

Nightmare for Modi

36

SURVEY:

Startling revelations about what Muslim


women think of Personal Law

44

NDIA
EGAL
I L

www.indialegalonline.com

September 15, 2015

`100

WHO
KILLED FTIL?
The inside account of
how a series of legal
and bureaucratic
maneuvers led to
the arrest of
stock exchange
czar Jignesh Shah
and destroyed a true
Make in India
financial enterprise 22

THE GREAT
FALL OF
CHINA
What does it
mean for
India? 62

POLITICAL
PARTIES
Hypocrisy
on RTI 14
SEX VIDEOS
Legal
loopholes 50

EDITORIAL
Judiciary
wields a
big stick
to improve
government
schools 03

LETTER FROM THE EDITOR

INDERJIT BADHWAR

A TASTE OF
THEIR OWN
MEDICINE

ERHAPS one of the most powerful


news developments of the year
lost in the din of Indo-Pak relations
and cloak-and-dagger spy stories
is how Indias courts have struck a
commendable and unprecedented legal blow
to waste, fraud, corruption and nepotism in
government-run schools which have been the
enemies of the constitutional right to basic
quality education for this nations children.
When the Supreme Court of India and the
High Court in Allahabad speak as one powerful voice, holding the administration solely
responsible for the abysmal condition of
state-run schools, the government needs to sit
up and listenand listen hard.
The latest missile came from Justice
Sudhir Agarwal three days after India celebrated Independence Day this August 15. In a
scathing judgment that should make every
Indian state sit up and take note, the judge,
acting on petitions filed by a UP teacher, Shiv
Kumar Pathak, and several others regarding
the appointment of teachers and filling of
vacancies, passed an unusually stern and
innovative order.
He asked the UP chief secretary to ensure
that government servants, elected representatives and members of judiciary and all
other persons who get any benefit or salary
from state exchequer or public fund send
their children to primary schools run by the

State Board for Secondary Education.


He also ruled that penal provisions be
laid down for those who violate the order.
Appropriate provisions can be made by government so as to ensure that ward(s)/
child/children of persons are compelled necessarily to receive primary education in
the primary schools run by the Board, the
order said.
Those who disagree with this order have,
of course, the right to contest it legally
through the appeals process on various
grounds such as individual liberty, the right of
freedom of choice and association and the
rest of it. But the outpouring of support for
the judgment, which expressed extreme dismay at the way in which governing dispensations have insulted and made a mockery of
the very concept of basic education, demonstrates it is a long-overdue shock-treatment
for the bureaucracy and public officials.

hortly after the order, the UP government terminated the services of Pathak
who is being hailed by his supporters,
parents and teachers as a whistleblower who
exposed the systemic rot pervading the selection and appointments system. Similar
exposes in the forms of writs and PILs have
been doing the rounds of the courts, roundtripping from the High Court to the Supreme
Court and back since 2011, with judges
INDIA LEGAL September 15, 2015

LETTER FROM THE EDITOR

TWO INDIAS
(Left) Ninety
percent of UPs
children get
rudimentary
education in
ramshackle
schools; (facing
page) The elite,
including
government
servants
children, get
world class
facilities

making sharp observations and issuing directives to cleanse the system under which nearly 3,00,000 posts of teachers are lying vacant.
There are about 1.25 lakh primary schools
in the state of UP run by the UP Basic
Shiksha Parishad.
The High Court spared no punches. It castigated the Basic Education department for
mindless, negligent, casual amendments in
rules pertaining to appointment of teachers,
besides defective government orders issued
from time to time which paved way for multifarious litigations resulting in not only delay
in appointment of primary teachers but also a
very heavy pressure on this court.

he judges order, as Prime Minister


Modi said about a recently passed Act,
is a necessary remedial injection
which will attack the disease, notwithstanding the side effects of the treatment. It is tantamount to giving babus and politicians a
taste of their own medicine. Let their children, insulated from reality in elite private
schools, suffer like all other ordinary kids in
these neglected hell holes that pass off as
schools. Then onlywhen their own ox is
being goredwill they show an interest in
improving the quality of education and teachers in these schools.

September 15, 2015

I will quote at length from Judge Agarwal


as well as from an earlier Supreme Court
judgment on the same subject because they
deserve wide dissemination through the
media. First from Judge Agarwal:
It is a matter of common knowledge
that basic education in State of U.P. is being
administered through the Department of
Basic Education, which is under the Secretary
(Basic Education) and is under a separate
ministry. Annual budget allocation for maintaining basic schools recognized by U.P.
Board of Basic Education (hereinafter
referred to as Board) under the provisions of
U.P. Basic Education Act, 1972 (hereinafter
referred to as Act, 1972) is one of the highest
budgetary allocationsThe recruitment of
thousands of posts at a time used to commence but got trapped in huge litigation due
to unmindful, irregular and casual approach
of the official(s) responsible for managing
such recruitment, lack of accountability and
credibility as well as sincerity. Unmindful and
casual legislation by way of frequent amendment of Rules has worsened the situation.
Today, judicial cognizance can be taken of
the fact that there are three categories of
Primary Schools running in the State of U.P.,
imparting education to minor children of this
State. One of such categories, which is cater-

Though huge
money is being
invested and
spent every
year in the
name of
welfare, of basic
education to
the wards of
poor people
but actually
nothing has
improved.
ing to the need of almost 90 per cent of the
population of minor children, are run by
Board and in the most shabby conditions.
There are a very few number of Primary
Schools run by elite and highly privileged category of people which are branded public
schools. Some English/Convent Schools are
run by Christian minority wherein children of
poor and lower-middle class have virtually
negligible scope. This category of Schools
basically cater to the need of highly rich
people, high class Bureaucrats, Ministers,
peoples representatives, like, Members
of Parliament, Members of Legislative
Assemblies and high-middle class people.
The wards of a limited class of elite society
can get education therein. Most of the people
cannot meet even financial standards of fees.
Admission standards are very strict and
mostly available due to high resources. These
Schools have best kind of infrastructures,
tutorial staff and all other facilities. These
Schools can be termed as Elite Schools.
In the second category comes, those
Primary Schools which are run by normally
some private bodies or individuals, catering
to wards of lower middle class. Though infrastructure in these Schools is not so sophisticated and ultra modern as that of Elite
Schools, still is much better and comparati-

vely even tutorial staff is sufficiently good.


They may be termed Semi-Elite Schools.
However, in the third category comes
almost all Primary Schools run and managed
by Board under its administration. These can
be termed as Common-mens Schools. They
are the Schools, who cater to the entire category of rural class, urban rural class and those
who cannot afford expenses of other two categories. The number of students therein constitute almost 90 per cent population of
minor children in the State. The real catch
lies here.

he Constitution has now recognized primary education as a fundamental right for children from 6
to 14 years of age, i.e., virtually upto ClassVIII. In the name of discharge of this constitutional obligation, as already said, more than
1.25 lac and odd Jr.P.S. and Sr.P.S. are being
run by Board of Basic Education, for which
funds are provided by State. The education in
these Schools is supposed to be free, but that
is how everything is free. Virtually a complete
lack of infrastructure one can find in these
Schools. After more than 65 years of independence, these Schools are still struggling to
have basic amenities for children, coming
thereat, like drinking water, space for natINDIA LEGAL September 15, 2015

LETTER FROM THE EDITOR

Any person who has some capacity


and adequate finances, sends his
child/children in Elite and Semi-Elite
Primary School.
ural calls etc. Even classrooms are in extremely shabby and bad conditions. At many
places, classes are being run in open space.
The structure, if any, is in dilapidated condition. Though huge money is being invested
and spent every year in the name of welfare,
of basic education to the wards of poor people
but actually nothing has improved.

t is not difficult to understand, why


conditions of these Schools has not
improved. The reason is quite obvious and simple, though the State
Government is not able to see. There is no
real involvement of administration with these
Schools. Any person who has some capacity
and adequate finances, sends his child/children in Elite and Semi-Elite Primary School.
They do not even think of sending their wards
for primary education to Schools run and
managed by Board. Whether it is the District

PATH-BREAKING
JUDGMENT
(Right) Justice Sudhir
Agarwal of the Allahabad
High Court has provided
an innovative solution to
the plight of government
schools in UP

September 15, 2015

Collector or Police Chief in the District or any


other Government Servant, they ensure that
their children should get primary education
in Primary Schools having better infrastructure and other facilities which obviously
belong to first and second categories of
Primary Schools, as noted above and completely exclude third category Schools, i.e.
Common-mens Schools. The public administration therefore has no actual indulgence to
see functioning and requirements of these
schools. These schools have become a mode
of earning political mileage instead of real
catering to its need.
The common mens schools cater the
need of Primary Education to only those poor
people, whom Honble Mr. Justice Krishna
Iyer once said, tiny million Indians, who find
it difficult to make arrangement for two times
of meals what to talk of other things.
Whatever is made available by system they
have no choice but to avail it in conditions as
and where it is. The Government at the level
of State and Central, both, are harping every
time and almost very frequently on the need
of improved Primary School, but their intention has not resulted in execution and reality
at grass root level.
The hard real fact is that these institutions, run by Board of Basic Education, are
victim of highest level of misappropriation,
maladministration and widespread corruption. Standard of teaching is the biggest casualty. Nobody cares for making improvement
in the standard of tutorial staff. A competition is going on for political reasons to make
lacs of vacancies available in Primary Schools
as a source to create committed voters by
appointing persons, if not illiterate, but not
really competent to teach children of Primary
School. A competition is going on to somehow get such persons appointed as teachers
in these schools whom they would not like at
all to teach their own children. Initially, after
making statutory rules under Act, 1972, in
1975, 1978 and 1981, the State tried to fill up
the gap of teachers vacancies by appointing
much lesser qualified persons i.e. Shiksha
Mitra, Anganbari Karyakatri etc. A persistent
effort is going on now to absorb these persons
as Teachers in Primary Schools run by the
Board, if necessary, even by frequent amend-

ments in Rules, without caring


but compromising with standard.
Is State not answerable to the
people at large that competent
Teachers should be appointed in
Primary Schools by those who are
administering institutions so as
to make such institutions at par
with those where they like to have
their wards taught. Since bureaucrats, politicians, rich people and
others, all have their alternative
channel by having their wards
taught in Primary Schools falling
in the category of Elite and SemiElite, nobody cares of the standard to be maintained in Primary
Schools of the Board.

competition is going on
to bring standard of
Common-mens
Schools down, as much as possible. In my view, now the time has come where
immediate attention need be drawn for
improvement, not only of infrastructure in
these institutions but first of all in respect of
teaching staff. That is the basic purpose for
which the entire system of Basic Education is,
consuming huge public money from public
exchequer. The time has come where State
must make it compulsory to all those who
gets salary, perks and other benefits from
State exchequer to have their wards sent to
Primary Schools maintained by Board which
I have termed Common-mens Schools and
not to Schools which, come in the category 1
and 2, i.e., Elite and Semi-Elite and are privately managed. In case, any one flouts this
condition, a penal provision should also be
made. It is only then the improvement of
these institutions will be ensured by those
who are responsible for its management in a
proper way. It will also boost social equation.
It will give an opportunity to children of common men to interact and mix-up with children of so-called high or semi high society,
giving them a different kind of atmosphere,
confidence and other opportunities. This
would give a boost and bring revolution in
changing Society from grass root level. The
initial level mixing among all children will

Let their children, insulated from reality in


elite private schools, suffer like all other
ordinary kids in these neglected hell holes
that pass off as schools.
have a different consequences.
Moreover, when Officials/Government
servants would be required to send their
wards for primary education in institutions
maintained by the Board, they would become
serious enough to look into the requirements
of concerned Primary Schools and would
ensure that same are made available and
Schools are run in good/best conditions and
standard, else it may affect their own wards
Therefore, the Chief Secretary, U.P.
Government is directed to take appropriate
action in the matter in consultation with
other Officials, responsible in this regard, to
ensure that the children/wards of
Government servants, semi-Government servants, local bodies, representatives of people,
judiciary and all such persons who receive
any perk, benefit or salary etc. from State
exchequer or public fund, send their
child/children/wards who are in age of receiving primary education, to Primary Schools

STERN STRICTURES
(Above, L-R) Justices UU Lalit
and Dipak Misra had come
down heavily on UP
administration for not filling
vacant posts in schools

INDIA LEGAL September 15, 2015

LETTER FROM THE EDITOR

Almost 2,000
years back,
Kautaliya had
stated that
parents who do
not send their
children to
have the
teachings,
deserve to be
punished.
Anil Shakya

SHAPING THE FUTURE


(Above) The importance of
dedicated and well-trained
teachers cant be
over-emphasized

run by Board. He shall also ensure to make


penal provisions for those who violate this
condition; for example, if a child is sent to a
Primary School not maintained by Board, the
amount of fee etc. paid in such privately managed Primary School, an equal amount shall
be deposited in the Government funds, every
month, so long as such education in other
kind of Primary School is continued. This
amount collected can be utilised for betterment of schools of Board. Besides, such
person, if in service, should also be made to
suffer other benefits like increment, promotional avenues for certain period, as the case
may be. This is only illustrative. The appropriate provisions can be made by
Government so as to ensure that ward(s)/
child/children of persons, as detailed above,
are compelled necessarily to receive
primary education in the Primary Schools
run by Board.

arlier, in March 2014 the Supreme


Court, after hearing arguments on the
same subject, had ordered the UP government to fill teachers posts lying vacant
since 2011 within 12 weeks. When the state
simply refused to comply, Justices Dipak
Misra and Uday Umesh Lalit ruled on
December 17 of that same year: Despite the
aforesaid order, the State has not carried out
the appointment process. They gave the state

September 15, 2015

one more, short deadline pointing out that


the states inaction was in violation of Article
21A, as inserted by the Constitution (Eightysixth Amendment) Act, 2002, providing free
and compulsory education of all children in
the age group of 6 to 14 years as a
Fundamental Right as well as the legislation
on the Right of Children to Free and
Compulsory Education.
Almost 2,000 years back, the Justices
reminded the bureaucrats, Kautaliya had
stated that parents who do not send their
children to have the teachings, deserve to be
punished. Similar was the climate in England
almost seven centuries back.
Thus, the significance of education can be
well recognized, they wrote. In such a situation, we cannot conceive that the posts would
lie vacant, students go untaught and the
schools look like barren in a desert waiting
for an oasis. The teacher shall serve the purpose of oasis in the field of education. The
competent authority shall file a compliance
report, failing which they shall face the consequences as the law provides and the law does
not countenance disobedience of the law and
orders of the court.
The price for non-compliance is clear in
Judge Agarwals judicial edict.

editor@indialegalonline.com

SEPTEMBER 15, 2015

VOLUME. IX

ISSUE. 01
Editor
Inderjit Badhwar
Managing Editor
Ramesh Menon
Deputy Managing Editor
Shobha John
Executive Editor
Ajith Pillai
Business Editor
Shantanu Guha Ray

Political Editor
Bhavdeep Kang
Associate Editor
Meha Mathur
Deputy Editor
Prabir Biswas
Art Director
Anthony Lawrence
Deputy Art Editor
Amitava Sen
Graphic Designer
Lalit Khitoliya
Photographer
Anil Shakya
News Coordinator/Photo Researcher
Kh Manglembi Devi
Production
Pawan Kumar

LEAD

The fate of Jignesh Shah

22

How a promising commodities


trading czar who could have been a
sterling exponent of Modis Make in
India dream, was brought down.
SHANTANU GUHA RAY provides an
insight into the saga

CFO
Anand Raj Singh
VP (HR & General Administration)
Lokesh C Sharma
Circulation Manager
RS Tiwari
Vice-President (Ad-Sales)
Vivek Mittal-09810265619
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sales@indialegalonline.com

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10

September 15, 2015

SUPREME COURT

Come clean

14

The funding of political parties is often foggy and most want to be outside the purview of
RTI. BHAVDEEP KANG describes how they use legal loopholes to escape scrutiny
STATES

Patel rebellion

36

Gujarat was up in flames as the Patel community, headed by Hardik Patel, demanded
reservations. RK MISRA writes about how the state was held to ransom

Tale of two states


The bitter feud between AP and Telangana over the division of assets has
reached the Supreme Court. BHAVDEEP KANG on how the center will
need great tact to keep both states happy

40

LEGAL EYE

Its my life

44

A landmark survey has


shown that Muslim
women want the triple
talaq to be banned.
AJITH PILLAI reports on
the winds of change
sweeping the women of
this community
MEDIA

Whose right is paramount?

GLOBAL TRENDS

Chinese checkers

62

As the dragon kingdom braces for a period of economic


instability, STRATFOR analyzes its institutions, especially its
polity thats still averse to openness and dissent. Also,
SHANTANU GUHA RAY writes about its impact on India

50

In the debate about child pornography, the issue of amateur


sex videos preying on innocent girls has been lost. Why arent
ISPs being charged for this, asks ABHAY VAIDYA
SCIENCE

Small matter, big debate

54

As scientists prepare to study the tiniest particles, neutrinos, in


an underground science facility in Tamil Nadu, an environmentrelated debate has erupted. MURALI KRISHNAN reports
ENVIRONMENT

Government in a hurry

58

CRIME

Costly exercise

72

A detailed system for tracking criminals through a database of


behavioral pattern has become a white elephant for the FBI. A
report by PROPUBLICA

REGULARS

The environment ministry is giving clearances to industrial


and infrastructure projects in eco-sensitive zones in a jiffy,
ignoring regulatory norms. DINESH C SHARMA investigates

Edit................................................................................3
Quote-Unquote...........................................................12
Ringside......................................................................13
Supreme Court............................................................18
Courts......................................................................... 20
National Briefs.............................................................35
International Briefs.......................................................79
Campus Update......................................................... 80
Wordly Wise.................................................................81
People......................................................................... 82
Cover Design: AMITAVA SEN

INDIA LEGAL September 15, 2015

11

QUOTE-UNQUOTE

Good Taliban, bad Taliban...good


terror, bad terror...this wont work. A
decision has to be takenare you
with terrorism or with humanity?
PM Modi, while addressing a massive
gathering in Dubai, on NDTV

I am Dawood Ibrahim. If others


are free to morph me into an
object of aversionI am also free
to project myself in an extremely
self-denigrating image.
Valson Thampu, St Stephens College
principal, alleging that he is being hounded
like an animal in a sexual harassment case
in his college, in The Times of India

Eighteen years ago, I lost faith in


god and today, I lost faith in the
judiciary. Money power augurs so
well with the institutions

Shatrughan Sinha
doesnt require a tag. My
unblemished credibility is
my achievement.
The veteran actor, on
whether he is angry with the
BJP which
seems to
have
sidelined
him, in
The Times
of India

Parliamentary
democracy is safe
because of the people
of India, not because
of politicians.
NCP chief Sharad Pawar, in
The Times of India

Neelam Krishnamurthy, who lost her


children in the 1997 Uphaar tragedy, on the
Supreme Court offering relief to the Ansal
brothers, in The Indian Express

Modi has only one quality


fooling people. He can fool
everyone. He can befool
even god.
RJD chief Lalu Yadav, hitting out at
the prime minister while addressing a
rally in Bihar, in The Times of India

Woh dossier ki baat karte hain


hum unko zinda aadmi dikhayenge
(they talk of dossiers, we will show
them a live terrorist).
Foreign minister Sushma Swaraj, reacting to
Pakistan NSA Sartaz Aziz flashing details of
Indias involvement in terror across the border,
at a press conference

12

September 15, 2015

Nitish has got justice.


This is a huge victory. I
am vindicated. Its a big
day for all of us.
Neelam Katara, after Supreme
Court upheld the conviction of
Vikas Yadav, Vishal Yadav and
Sukhdev Pehalwan in her sons
murder case, in The Indian
Express

Aruna

VERDICT
In law a man is guilty when he violates the rights of
others. In ethics he is guilty if he only thinks of doing so.
Immanuel Kant

INDIA LEGAL September 15, 2015

13

SUPREME COURT/ Political Parties/ RTI, 2005

The `

20,000
Loophole

HE worlds largest democracy


reveals a vulgarly feudal character when political parties are
faced with the demand for
transparency and accountability. Voters, these parties maintain, are not entitled to ask how
political organizations mobilize resources and
what they do with them. Ours but to vote sans
reason why; theirs not to make reply (apologies
to Alfred Lord Tennyson).
The BJP government, in what amounted to an
inexplicable U-turn, told the Supreme Court last
month that political parties did not fall within
the ambit of the Right to Information (RTI) Act,
2005, because they were not public authorities.
The affidavit also underlined a crying need for
amendment to the Income Tax 1961 and Representation of People (RPA) 1951 Acts, in order to
ensure accountability and transparency in the
funding of political parties.

Making political parties


transparent about funding
has not been easy. As they
dont need to reveal the
source of contributions which
are `20,000 or less, they
often get away. Can this
loophole be plugged?
By Bhavdeep Kang

IGNORING CIC ORDER


What the 98-page (including annexures) affidavit
to the SC did not explain is why, for two years,
political parties defied an explicit order of the
Central Information Commission (CIC), a judicial body, to respond to RTI queries. They did not
appeal against the CIC order in any court of law;
they simply ignored it. Unlike any other citizen or
organization in the country, they flouted a judicial order without fear of prosecution. The CIC
then came up with the stunning observation that
it lacked the power to enforce compliance by the
political parties (see box).
The UPA governments only response to the
CIC order was to move a Bill aimed at amending
the RTI Act in order toeffectivelygrant
immunity from public scrutiny to political
parties. The Bill lapsed after the BJP took a
nuanced stand saying it was not opposed to
greater transparency.
Photos: UNI

14

September 15, 2015

However, after coming to power, it


appears to have undergone a change of heart.
Forced to respond when the SC issued a
notice to the political parties and the Union
of India on a petition by the Association for
Democratic Reforms (ADR) and Delhi resident Subhash Chandra Aggarwal for
enforcement of the CIC order, it reiterated
the UPAs stand.
The government claimed in its affidavit
that political parties were established under
the RPA and not under the Constitution or
any other law. Hence, they could not be treated as public authorities, despite getting huge
financial support from governments.
CONVENIENT CATCH
Even if that argument is accepted, political
parties still have to submit their accounts to
the Election Commission and file their
income tax returns. The catch here is that
they do not need to reveal the source of contributions amounting to `20,000 or less.
Under Section 29C of the RPA, the treasurer
of a political party must declare contribution in excess of twenty thousand rupees
received by such political party from any person in that financial year.
This provision is in consonance with the

Political parties claim that malicious RTI


queries by rivals will affect their ability to
conduct business freely. They say the
contributors anonymity must be maintained.
Section 13A of the IT Act, which states: In
respect of each such voluntary contribution
in excess of twenty thousand rupees, such
political party keeps and maintains a record
of such contribution and the name and
address of the person who has made such
contribution.
Studies by the ADR, co-petitioner in the
matter, have revealed that a substantial portion of funds raised by political parties comes
from the sale of coupons, printed and sold by
them in question and hence, not open to
public scrutiny. The EC and IT authorities
can only accept the partys claims on funds
generated through coupon salesprovided,
of course, that each individual contribution is
`20,000 or less.
By the same token, if a political leader is
garlanded with currency notes, he need not
declare itprovided the garland costs
`20,000 or less. And even if its worth much
more, who is to know? The money may go

POLITICAL
FEAST
(Below-L-R) The
BJP and Congress
spared no
expenditure in
reaching out to the
electorate during
the 2014 Lok
Sabha Elections

INDIA LEGAL September 15, 2015

15

SUPREME COURT/ Political Parties/ RTI, 2005

Take disciplinary action


for ignoring CIC orders
Prof Jagdish Chhokar, head of the Association for
Democratic Reforms, tells BHAVDEEP KANG that
only 20 to 25 percent of the declared income of a
political party is from known sources. Excerpts:
It appears that the political parties
in question did not challenge the
CIC order for two years; they
simply ignored it. Surely, that is
a ground for prosecution?
This is a grey area. The CIC issued
five or six notices to the political parties. They did not respond. We
moved a petition before the CIC
saying they should be fined for noncompliance and we should be compensated. The CIC then issued a
show cause notice, to which they
did not respond. On March 16 this
year, a full bench of the CIC ruled
that it had no power to take action
against them. It suggested that we,
the petitioners, were free to take up
the matter with any other forum. So
we approached the Supreme Court.
I would say that yes, there are
grounds for disciplinary action for
non-compliance, actually open defiance, of the decision of the highest
statutory body under the RTI Act.
If, through suitable amendments
to the RPA and IT Act, political
parties are compelled to reveal
the source of all donations

against verifiable addresses,


would that resolve a big part of
the problem?
In American parlance, this aint
gonna happen. Its a hypothetical
question, a very big IF. But regarding transparency in funding, the fact
is that only 20 to 25 percent of the
declared income is from known
sources. We are not even talking
about the undeclared income which
is widely believed to be very substantial. In any case, democracy is
not merely about doing things we
are obliged to do. In the interests of
society, we all do things we are not
obliged to do by law.
Does the AAP method of mobilizing funds stand scrutiny?
The party is only two years old and
its account statements have yet to
find their way into the public
domain. But they have not appointed public information officers although they support bringing political
parties within the ambit of RTI....A
substantive assessment will have to
await scrutiny and analysis of their
declared financial statements.

into the private coffers of the neta or the


party tijori.
Bahujan Samaj Party chief Mayawati,
known for her flashy jewelry and vast properties, has used this loophole to excellent effect.
She informed the authorities that her party
mobilized resources through small gifts and
contributions from its vast base of poor supporters, which formed the source of her
immense income.
Chartered accountant Amod Agarwal

16

September 15, 2015

supports the government stand. In the light


of existing laws, the affidavit is quite correct.
Political parties submit their accounts to the
EC and file IT returns. Either of these two
authorities is free to question them, as per
the law.
BJPs Sudhanshu Mittal, who was regarded as a fund manager par excellence in NDA
I, agrees. The `20,000 question is a different issue. If you want to address that, you will
have to take another approach, he says.
SOLUTIONS GALORE
Eminent lawyer and anti-corruption crusader Prashant Bhushan, who represents the
petitioners, agrees that plugging the `20,000
loophole would go a long way in facilitating
transparency in the funding of political parties. Aggarwal believes a far better idea
would be at least partial state funding of elections, as suggested by the Inderjit Gupta and
Dinesh Goswami committees. It would also
go a long way in eliminating the deployment
of black money, largely raised through real
estate and narcotics (earlier through excise).
The ADR found that even with the protection of the `20,000 clause, parties were
unable to submit proper accounts. In many

NO ACCOUNTABILITY?
(Clockwise from left)
Election rallies of SP, BSP
and AAP

cases, the PAN numbers of contributors were


not furnished, money received through
cheque was not accounted for and the party
claimed to have given money to candidates
who denied having received it. Adequate
grounds, one would have thought, for penalizing them.
Political parties have opposed accountability under RTI by diverting the debate to a
question on their functioning rather than
financing. They claim that malicious RTI
queries by rivals will affect their ability to
conduct business freely.
As for revealing sources of funds, they say
the anonymity of contributors must be maintained in order to protect that privacy. Those
who contribute to a particular political party
may fear reprisal from rival parties if their
identities are made known.
AAP STAND
Contrast this with the methods adopted by
the Aam Aadmi Party. A journalist colleague
describes his experience: A bunch of young
IT professionals were on a fund-raising mission in Bangalore. I offered a small contribution`500in cash, on condition that I
would not have to give them my name or

Anil Shakya

phone number. They refused. Finally, I gave


them a friends name and number, which
they duly noted. Within hours, he received a
text thanking him for his contribution.
The AAP has called for a review of the
centers stand, pointing out that it had not
bothered to call an all-party meeting before
filing its affidavit before the apex court.
The nod-and-wink attitude to fund-raising by political parties was exemplified by an
incident at the BJPs headquarters11,
Ashok Roadin December 2008. An estimated `2 crore went missing from the partys
vault. Party officials raised an outcry, but no
police complaint was filed.
Questions raised at the partys media
briefing were brushed aside with a brief
statement to the effect that the matter was
being investigated internally. Clearly, it was a
case of easy come, easy go. IL
INDIA LEGAL September 15, 2015

17

SUPREME COURT

Nothing wrong with 364A


HERE is nothing unconstitutional or
even unreasonable about death
sentence mandated under Section
364A of IPC for kidnapping for ransom,
the apex court clarified. It held that capital punishment was appropriate, especially at a time when terrorists resorted
to kidnapping to make the government
kowtow to their demands.
The section was incorporated in
1993-94, as an amendment brought
by parliament.
The bench also made it clear that the
death sentence was applicable only in

Illustrations: UdayShankar

the rarest of rare cases and if the kidnapping was done by a terrorist.
Section 364A of IPC states that whoever kidnaps or abducts a person and
threatens to kill or hurt him or her, or kills
or hurts him or her for ransom, shall be
punished with death, or life imprisonment and will also be fined.
The court was responding to a petition filed by a convict, who was given
death sentence under Sections 364A
and 302 (murder) for kidnapping and
murder. He had questioned the constitutional validity of Section 364A.

FSSAI slammed for advisory


HE apex court pulled up the Food
Safety and Standards Authority of India
(FSSAI) for exceeding its brief. It questioned the advisory issued by the regulator
in 2013 under which companies needed to
seek approval from the FSSAI for a wide
range of dietary food and health supplements, which already had a license.
The Bombay High Court had already
struck down the advisory, ruling it ultra
vires. Vital Nutraceuticals Pvt Ltd and Indian

Drug Manufacturers Association had


approached the high court, pleading that
FSSAI could not issue such an advisory as
it violated Section 92 of the Food Safety and
Standards Act, 2006.
The apex court agreed with the high
courts ruling and asked the FSSAI to justify
its action under the Act. It was not convinced by the regulators plea that the advisory was necessary to ensure food safety
standards in India.

Contempt notice for police chief


ELHI police commissioner BS Bassi
was slapped a contempt notice by the
apex court as the Delhi police had
failed to arrest a senior official of a UB Group
company, as ordered by the court. The nonbailable warrant (NBW) was issued by the
court in a cheating case filed against the
company by Gandharb Singh Bhadwal, who
had a fixed deposit in the company.
The court was livid with the tone and
tenor of the response filed by Delhi police
regarding its failure to carry out its orders.
Bhadwal allegedly could not get back his

18

September 15, 2015

money in 2004, as the concerned company,


McDowell Krest Finance Ltd, had gone bust
in 2000. The cheating case filed by him in
the trial court as well as the Delhi High Court
fell through. But the apex court took cognizance of his appeal and issued notices to
all persons related to the case.
All of them appeared in court except one.
The court took note of the repeated absence
of ex-director Krishna Murthy and issued a
NBW against him. It entrusted the task of
executing the warrant to Delhi police commissioner, who failed to carry it out.

Pay heed to farmers


suicides

Ramdev hearing in a
single court

ABA Ramdevs plea that all


cases filed against him in
various parts of the country
for his comments against Rahul
Gandhi be heard in a single court
was accepted by the apex court. It
decided that all cases will be heard

at a trial court in Patna.


The court also decided that the
date the hearing will commence is
September 21.
The yoga guru had said in April
last year that Gandhis visit to Dalit
households was nothing more
than a picnic and honeymoon. A
flurry of judicial complaints was
registered under the Scheduled
Castes and Scheduled Tribes
(Prevention) of Atrocities Act in as
many as eight states.
The apex court clarified that in
case Ramdev didnt want to be
physically present at the hearing,
he would have to seek approval
from the trial court.

AKING a grim view of


the spate of farmers
suicide in India, the
apex court asked the center
to revisit its existing policy
framed for their welfare. It
also pointed out that the
2007 policy was unable to
mitigate or root out the
catastrophe faced by farmers due to crop loss.
It did not accept the contention of the center that the
suicide rate had fallen and it
was leaving no stone unturned to ensure farmers
welfare. The court ruled that
not a single suicide was

acceptable. It gave the center six weeks to respond.


The court was reacting
to a petition filed by a NGO
from Punjab, Youth Kamal
Organization, which wanted
the center to offer the farmers monetary assistance.

Ansal brothers get relief


T was their advanced age and peculiar facts
and circumstances of the case that brought
relief to the Ansal brothers, the owners of
Uphaar theater in south Delhi. A three-judge
bench ruled that although they stand convicted
for criminal negligence and need to go to jail for
two years, they could walk free if they paid a fine
of ` 60 crore to the Delhi government to set up a
trauma center or upgrading the existing centers.
While Sushil Ansal served a jail term of five
months and 20 days, Gopal Ansal was in jail for
4 months and 20 days.
A raging fire in the cinema hall led to the

death of 59 people in 1997.


The victims association had fought a
protracted legal battle for 18 long years. The CBI
had pleaded for a two-year jail term for
the brothers.
The trial court, while holding them responsible for negligence had ruled a two-year jail term.
But the Delhi High Court felt that one-year jail
term was enough. The Ansals had appealed
against the verdict.
The case was referred to a three-judge bench
of the SC, from a two-judge bench earlier to
decide on the sentence.

Stricture to search engines


HE Supreme Court took strict cognizance of
the allegation that search engines were not
adhering to laws in India. The court was
responding to a PIL which stated that advertisements on sex determination of fetus were appearing
on Google India, Yahoo India and the Indian wing of

Microsoft, which was illegal in India.


The court asked them to file their responses
within two weeks. As an interim measure, it asked
the search engines to remove such existing
advertisements with immediate effect.
This is in line with Section 22 of the PreConception & Pre-Natal Diagnostic Techniques
(PCPNDT) Act, 1994.

INDIA LEGAL September 15, 2015

19

COURTS

Mandatory voting stayed

HE unique law brought in by


the Gujarat government, which made voting compulsory
in elections to local bodies,
received a jolt when the Gujarat
High Court stayed its notification till
further orders.
The court felt that Gujarat Local
Authorities (Amendment) Act 2009
violated the fundamental rights of
citizens enshrined in the constitution. It observed that just as the
right to vote was a privilege enjoyed by citizens, similarly the right

not to vote equally rested with


them, and the state could not make
it a rule.
The court gave its ruling on a
petition of advocate KR Koshi who
had challenged the new law recently notified by the state government,
which mandated a fine of `100 on
those violating the law.
Incidentally, the Gujarat was the
first state in the country to enact
such a law. Elections to local bodies in the state were slated for
September and October this year.

Pachauri to go abroad
trial court in Delhi accepted the plea of former TERI
Director General RK Pachauri that he needed to participate in a global meeting on climate issues in China
and Japan between August 21 and September 1. Pachauri
is accused of having sexually harassed a colleague in TERI
and a probe is on in the case.
Pachauris counsel pleaded that attending the meeting
was critical for him as a scientist on global climate change
and pointed out that so far he had not impeded the probe in
any manner.
However, the court wanted him to give two local
sureties of `2 lakh each and intimate the Indian embassies
in China and Japan about his arrival there. He was also told
to update the court about his itinerary and submit photocopies of his tickets, visa and passport. The court also
directed him to inform it and the concerned investigating
officer once he comes back to India.

20

September 15, 2015

No action on CAG report


HE draft report of the CAG on power distribution companies in Delhi may be a shot in the arm for the
Kejriwal government, but the Delhi High Court has
barred it from taking any action on the report. The court
also considered the report as interim.
The report had accused all the three discoms of irregular practices and inflating their assets, thus cheating consumers of Delhi. The discomsBYPL and BSEShad
gone to court pleading that they be provided with a copy of
the draft report, the Delhi government be held back from
initiating any action based on the report, and the said report
be treated as an interim one. The companies also took
objection to the disclosure of the report by the CAG.
The CAG clarified that it had merely shared the report
with the Delhi government for comments and even cited a
letter to the Delhi government stating the report to be kept
under wraps.

NGT refuses to
modify order
EFUSING to change its April 7
order that had banned diesel
vehicles more than 10 years
old from plying in Delhi and NCR, the
National Green Tribunal (NGT) left it
to the concerned authorities whether
to impose fines on such vehicles
in NCR or not.
The green court was reacting to
a plea from the Ministry of Road
Transport and Highways that the
court should modify the order con-

sidering public interest. The ministry


pointed out that truck operators were
planning a strike as the NGT order
prevented the Delhi, Haryana and
Uttar Pradesh governments from
issuing fitness certificates to such
vehicles. And in case of a strike, the
entire national capital territory would
be deprived of its supply of essential
materials. It pleaded that the government could not challan them till the
application was pending.
The green tribunal reminded the
parties to the petition that even the
Supreme Court had approved the
NGTs order and it was not possible
to rescind.

Interim relief to Maggi


HE Bombay High Court struck
down the order of the Food
Safety Standard Association of
India (FSSAI) and the Maharashtra
Food and Drug Administration (FDA)
that had banned all varieties of
Maggi noodles in India. The ban
was imposed on June 5.
The court felt that the order was
arbitrary and defied natural justice.
Nestle India, the manufacturers of
Maggi noodles, had approached the
high court against the ban.
However, its not a win-win situation for Nestle India as yet. The
court ordered that Nestle India must

get its noodles tested afresh within


six weeks at three centers approved
by the National Accreditation Board
for Testing and Calibration Laboratories (NABL) in Hyderabad, Mohali and Jaipur. If the tests rule that
the noodles are safe for consumption, only then can Nestle India bring
them back into the market, the court
ordered.
The court felt that the test results
of the current labs could not be
relied upon as they were not accredited under FSSAI. The tests showed
that Maggi noodles contained MSG
and an overdose of lead.

Green signal to
Rohtang
N a welcome relief to all the tourism
stake-holders in Manali, including
tourists, the NGT relaxed its ban on
vehicle movement for tourism on the
Manali-Rohtang road till November 30.
The extension will allow 400 diesel

and 600 petrol vehicles to visit


Rohtang Pass on a daily basis.
The enforcement of the ban had led
to a drastic fall in tourist arrivals to
Manalia cause of concern to tour
operators, hotels and taxi operators.
The green tribunal had passed the ban
order due to environmental concerns
on February 6, 2015 but had relaxed it
till August 14 in May.

Compiled by Prabir Biswas


Illustrations: UdayShankar
INDIA LEGAL September 15, 2014

21

LEAD/ Corporate/ Jignesh Shah

INDIAS ICARUS

22

September 15, 2015

By Shantanu Guha Ray


Jignesh Shah blazed like a meteor and burnt out like
one. This entrepreneur, who could have been a sterling
exponent of Prime Minister Narendra Modis Make in
India program, aimed to take commodities trading
online and took on institutional forces such as the
National Stock Exchange (NSE). However, in a
surprising twist of fate, he was done in by challengers
and arrested on May 7, 2014.
It all started in 1988 when Shah started Financial
Technologies India Limited (FTIL) and two commodity
exchangesMCX (Asias second largest) and National
Spot Exchange Limited (NSEL), which was Indias first
electronic spot exchange. He began trading in 2008
and did so well that he set up exchanges in Singapore,
Bahrain, Dubai, Mauritius and Botswana.
Problems started when MCX decided to take on the
NSE-promoted commodity exchangeNCDEX, a
competitorthereby challenging the primacy of
NSE. A bureaucrat even expressed concerns at the
declining market share of NCDEX in comparison to
MCX, suggesting that this raised suspicions that
NSE and its subsidiaries were under government
protection and patronage.
Meanwhile, NSEL too did very well. But irregularities were found in it and in 2013, a payment crisis hit it,
leading to the eventual loss of `5,689.95 crore for
investors and Shahs arrest. However, on August 22,
2014, Shah got bail from the Bombay High Court after
three months in custody. There is now a move to merge
NSEL with FTIL so that the resources of FTIL can be
used for settling the liability. So how did the entrepreneur, who was once in charge of BSEs online trading,
get embroiled in this mess? Has the Economic Offence
Wing (EOW) of Mumbai Police been able to find any
money trail against FTIL or Shah? Read on.

F things had gone Jignesh Shahs way,


the billionaire would have been the
Czar of Exchanges, with his presence
all over the world. With his business
acumen and smart moves, he was riding a crest from which few could have
toppled him. But then, that was his
mistake. As people in power zeroed in on him,
the fall was quick, surprising and meteoric.
Today, out on bail, Shah must be anguished
and frustrated each time his car speeds over the
Andheri flyover, and his eyes fall on a familiar
grey-blue structure of glassFinancial Technologies India Limited (FTIL). (FTIL was once the
promoter company of MCX, MCX Stock Exchange and India Energy Exchange. MCX and
MCX Stock Exchange have now been sold and
India Energy Exchange is in the process of being
sold. FTIL now is just a risk management software company for broking and financial companies. Once, its market cap was a little over
`5,000 crore, but it is now down to around
`1,200 crore.)
For Shah, FTIL was the realization of a dream
for which he had worked hard for over two
decades. This was his babyExchange Square,
which housed MCX, Asias second largest commodity exchange, and its stock exchange, MCXSX, whose license he had procured after a longdrawn-out legal battle. Till fate played a cruel
joke on him.
Today, Shah is a resigned man. His lifes work
of starting exchanges and robust financial institutions is in a shambles as he is entangled in the
crosswires of the government and a slew of regulatory agencies.
ZEROING IN ON FTIL
Those who sympathize with Shah believe that
the NSEL crisis was a convenient handle to bring
to heel Shah and the parent company of his
exchangesFTIL. For starters, Shah was thrown
out of his exchange ventures, such as MCX,
MCX-SX, IEX and four overseas ventures by the
Ministry of Consumer Affairs on the advice of
Forward Markets Commission (FMC). There is
now evidence that the Ministry of Corporate
Affairs (MCA) and FMC are honing in on FTIL,
whose new board of directors was introduced
INDIA LEGAL September 15, 2015

23

LEAD/ Corporate/ Jignesh Shah

BUREAUCRATIC
MOVES
(Right) KP
Krishnan, joint
secretary in MoF
between 2005
and 2010, was the
man who played
a key role in
putting the heat
on Shah and his
commodity

in November 2014. Both are pushing for the


supersession of FTILs board and declaring
its directors as not fit and proper as they are
opposing the proposed merger of NSEL with
FTIL. The matter is currently in the Bombay
High Court.
The new board, which took over the reins
in November 2014, now includes luminaries,
such as Venkat Chary, former chairman of
FMC; A Nagarajan, ex-IAS; Justice (retd) RJ
Kochar; advocate Berjis Desai and managing
partner of J Sagar Associates; Anil Singhvi,
CEO of Ambuja Cements and chairman, Ican
Investment Advisors, an agency specializing
in the interests of minority stakeholders.
This board took over after more than a year
of the crisis, which unfolded in July 2013.
But this fact was ignored by the MCA and it
held responsible the new directors of FTIL
for the NSEL payment crisis.
The MCA had also alleged that FTIL and
its new board of directors are mismanaging
NSEL and selling its 26 percent stake in
MCX at a loss of `290 crore. On the contrary,
it was the FMC that directed FTIL to sell its
entire holding (26 percent) in MCX by
declaring it as a not fit and proper entity. In
bureaucratic language, it means a company
not capable of running its operations.

What they mean


FTIL: Financial Technologies India
Limiteda financial services company offering technology IP to create and trade on next-generation
financial markets and two commodity exchangesMCX and NSEL.
MCX: Multi Commodity Exchangepromoted by Jignesh Shah,
now owned by Kotak Securities.
BSE: Bombay Stock Exchange, a
government entity.
NSE: National Stock Exchange, a
private entity.
NSEL: National Spot Exchange
Limited promoted by Jignesh Shah.
NCDEX: National Commodity and
Derivatives Exchange, an NSE-promoted commodity exchange.

24

September 15, 2015

NMCE: National Multi Commodity


Exchangepromoted in 1999 by a
group of Indian commodity-based
corporations and public agencies, it
is Indias third largest commodity
and derivatives exchange.
FMC: Forward Markets
Commission is the regulator of
commodity futures markets in India.
EOW: Economic Offence Wing of
Mumbai Police.
MCA: Ministry of Corporate Affairs
regulates the functioning of the
Indian corporate sector in
accordance with law.
MoF: Ministry of Finance.
SEBI: Securities and Exchange
Board of India, the market regulator.
FCRA: Foreign Contribution
Regulation Act.

ENOUGH EVIDENCE?
While investigative agencies established the
entire `5,600 crore money trail with 24
defaulters, no evidence was actually found
against Shah. Even the Bombay High Court
validated that neither Shah nor FTIL nor
NSEL has received a single paisa of the disputed amount while granting bail to Shah on
August 22, 2014.
The MCA has, meanwhile, been delaying
presenting the proposed merger order dated
October 21, 2014, before the Bombay High
Court following a severe corporate sector and
shareholder backlash. Instead, it moved the
Company Law Board with the intention of
superseding the board under Section 397 of
the Company Act to facilitate the merger of
NSEL with FTIL.
This would make FTIL liable for default
payments on the NSEL platform.
The FTIL controversy goes back to 2007,
when it took electronic exchanges to uncharted markets like the Middle East, Africa and
Singapore. Here, its bourses created strong
financial institutions and the figures traded
on these bourses placed them in the ivy

league of trusted and coveted exchanges


globally. This, according to market sources,
did not go down well among competitors.
On the home front, a bourse like MCX
was competing with top Chinese exchanges
in terms of value traded. By 2007, MCX was
handling 90 percent of trades across electronic commodity exchanges.
KRISHNANS ROLE
The FMC that regulated commodities
exchanges was under the purview of the
ministries of agriculture and consumer
affairs. Instead of approaching these ministries with any concerns about competition,
the Ministry of Finance (MoF) decided to
talk to banks and institutions holding stakes
in the exchange. One bureaucrat who took
unusual interest in NCDEX (a National
Stock ExchangeNSEsubsidiary) was KP
Krishnan, joint secretary in MoF between
2005 and 2010.
Krishnan was supposed to be in a regulatory role overseeing the functioning of
bourses. However, an RTI application
helped obtain a copy of an internal note
(given below) from Krishnan, dated December 19, 2007, where he expressed con-

FTIL took electronic exchanges to


uncharted markets. Here, its bourses
created strong financial institutions. This did
not go down well among competitors.
cerns about the declining market share of
NCDEX in comparison to MCX. It urged the
NCDEX management to improve its performance and NSE to increase its ownership
of NCDEX. Krishnan further suggested that
LIC and NABARD (both government-controlled bodies) should be asked to relinquish
their shares up to 5-6 percent each in favor of
NSE so that it could become a strong anchor
investor (one with maximum say in a company) in NCDEX. This letter raised questions
among market analysts whether both NSE
and its subsidiaries were under the then governments protection.
A detailed questionnaire sent by India
Legal to Krishnan on August 23 about his
alleged involvement in the FTIL crisis
remained unanswered.
For the record, NSE in the last 16 years
had beaten the Bombay Stock Exchange
WORKING ON
A PLAN
(Left) The
internal note
written by
Krishnan in 2007

INDIA LEGAL September 15, 2015

25

LEAD/ Corporate/ Jignesh Shah

LEGAL POSITION
(Right) Excerpts
from the Bombay
High Court
judgment,
delivered by
Justice Abhay
M Thipsay

KP Krishnan
suggested that
LIC and
NABARD
should be
asked to
relinquish their
shares up to
5-6 percent
each in favor of
NSE so that it
could increase
its hold
on NCDEX.

26

September 15, 2015

(BSE) and become the face of stock trading


in India. There was a stamp of NSE not only
in the stock exchange market in India, but
also at SEBI, the market regulator, and the
finance ministry.
Market analysts agree that at times, it
was difficult to differentiate the regulator
from the regulated, i.e., between SEBI and
NSE. NSE margins were in excess of 60 percentsomething that monopolies only
enjoy. BSE suffered, as did 20 regional
stock exchanges.
In such a climate, it was sacrilegious on
the part of Shah to think he could beat NSE
in the exchange market. The writing was
clear on the wallit would be a matter of
time before Shah entered the stock market,
challenging NSEs numero uno status.
METHODICAL ELIMINATION
To Shahs credit, he had fought many corporate and legal battles to realize his dream of
starting commodity, electricity, equity and
currency exchanges. And he often outwitted
competitors due to his quick thinking. But
what he did not see coming was a methodi-

cal elimination of the empire he had so


assiduously built over two decades. In
Delhi, official rumor-mongering began to
paint Shah as a buccaneering industrialist.
SEBI and RBI had opened up the currency derivatives trading in India and stock
exchanges were allowed to seek a license for
trading in this asset class. Expectedly,
FTILtogether with MCXapplied for a
stock exchange license. It was granted, with
permission only for currency derivatives
segment. The crucial stock-trading segment, however, was withheld. MCX-SX
came into being and very soon, beat NSE in
the currency derivatives segment.
The first move happened from Delhi.
The finance ministry started pushing in a
series of policy measures to protect the
monopoly of NSE, starting with a cap of five
percent on an owner of a stock exchange.
Even persons acting in concert were to be
clubbed within the five percent. Only banks
were allowed extra ownership.
NSE played under the rules and resorted
to questionable pricing. MCX-SX challenged it and won a case in the Competition

Commission, which slapped penal damages


on NSE. Not to be outdone, SEBI kept on
denying MCX-SX permission to trade in
equity stocks for three years without assigning a reason. Finally, it was the intervention
of the Bombay High Court and the Supreme
Court that forced SEBI to grant permission
to MCX-SX to trade in equity stock. SEBI
had earlier declined to grant a licence to
MCX-SX to launch equity trading platform.
And then, one evening, the rivals of Shah
got an opportunity to get him. The NSEL
payment crisis hit the markets, giving them
a golden opportunity to annihilate FTIL
and Shah.

The official, who spoke on condition


of anonymity, said Krishnans letter was
the first step towards destroying Shah
and his empire. And then came the payment settlement crisis at NSEL. All
actions taken against it by the government post this crisis at the end July 2013
were part of the Finish FTIL Plan. Who
is bothered about small traders who
have lost their money? the official further said.
But Krishnan was not alone. Helping
him was another powerful bureaucrat,
Ramesh Abhishek, who ran the FMC. In
Mumbai, stock market brokers say FMC
is one of the most confused, uncertain
and vacillating regulators in India and it
was hardly in a position to sit in judgment over FTIL and declare its business
not fit and proper.
In April 23, 2012, the finance ministry wrote to NSEL on the advice of
FMC that certain contracts traded on it
were in violation of Foreign Contribution Regulation Act (FCRA). Players
in Mumbais financial markets were surprised. When an exemption is already
provided to those contracts from the
operations of the provisions of
FCRA under a Gazette notification of June 5, 2007, then how
could these contracts be violating FCRA terms? But FMC had
no clarity on this issue. On July
19, 2013, it wrote to the finance
ministry saying the exemp-

ANOTHER CRITIC
(Below) Ramesh
Abhishek, head
FMC, also played
a key role

NOT NEUTRAL
Krishnans letter, mentioned earlier, suggests how the finance ministrythen under
P Chidambarambecame the strategist
and key enabler for NSE. It showed the
ministry was not neutral and that it would
do anything to ensure NSE retain its
monopoly. Killing competition was no
crime if FTIL and Jignesh Shah can be
annihilated, said a top ministry official.
INDIA LEGAL September 15, 2015

27

LEAD/ Corporate/ Jignesh Shah

Shah visited the EOW offices 21 times,


though he was called seven times. Despite
keeping him in custody for 108 days, EOW
didnt interrogate him.

FACING THE
BRUNT
(Below) Anjali
Sinha, MD, NSEL
was suspended
for irregularities

tion gazette notification was silent (read


not clear) on the status of exemption
whether it was a general exemption or it
was for specific provisions of the FCRAto
the contracts at NSEL. This was a tacit
admission that there was nothing illegal
about the contracts at NSEL. Nonetheless,
NSEL responded to a show cause notice
from the finance ministry on May 23, 2012,
explaining its position. The government did
not respond. A reminder followed from
NSEL on October 18, 2012. But the ministry did not respond.
After a long wait, on July 12, 2013, the
finance ministry asked NSEL to shut down
these contracts immediately.
PANIC-STRICKEN
The order to close the market immediately,
courtesy FMC, was catastrophic, to say the
least. It created total panic, leading to a settlement failure of `5,600 crore. Panicky
brokers were livid, wanting to know that if
FMC was not clear on the status of the
exemption and on what basis did it issue the
show cause notice to NSEL. Also, why
didnt it ask the market to be
closed in May 2012 when the
crisis was first reported.
That, they said, would have
led to a payment settlement crisis of just `2,000
crore. (In 2012, the total
volumes of trading on
NSEL hovered around
`2,000 crore.) The
FMC, however, did
not respond.
It was clear to
many that the crisis
had happened purportedly because
the stocks that
were sold were
absent and a payment

28

September 15, 2015

failure was obvious. Worse, the brokers,


who enticed their clients to trade, later went
on record having inspected the warehouses
and confirming adequacy of stocks.
So where did the stock vanish? The brokers did not answer. NSEL also instituted
an internal enquiry and charge-sheeted
errant officials. Shortly thereafter, the then
MD, Anjani Sinha, was suspended as also
some other officials. The government
machinery swung into action and implicated Shah and all other directors on the board
of NSEL.
On paper and legally, it was clear that
Shah did not directly owe even a rupee of
the `5,600 crore loss to anyone and it was
the brokers who mis-sold the product on
NSEL platform. But Shah was hounded.
Shah was arrested by EOW officers for
non-cooperation with EOW, thereby
deliberately avoiding interrogation. The
Economic Offence Wing (EOW) of Mumbai
Policewhich carried out its investigationstold the Bombay High Court that
it was not able to find any money trail
against Shah.
NO INTERROGATION
The reality was the opposite. Shah had visited the offices of EOW 21 times, though he
was called seven times. He even opened up
a mini NSEL office with computers at the
premises of EOW to help track the missing
cash. And despite keeping him in custody
for 108 days in a jail outside Mumbai, EOW
did not interrogate him and confessed the
same before the Mumbai High Court, saying they did not find any money trail to
FTIL, NSEL and Shah. The judge then
granted Shah bail.
A forensic audit was ordered on NSEL
by FMC. The auditor submitted its report
without seeking the NSEL managements
view. Using the draft audit report, the FMC
declared Shah, two others and FTIL not fit
and proper to hold any position on the
board or the management of any exchange.
Surprisingly, the report had a disclaimer
that it cannot be used for any judicial or
criminal process.
The order has been challenged in the
Bombay High Court and the hearing is yet

to take place. And FMC, without waiting for


the judiciary to complete the process, forced
FTIL to reduce its holding in MCX to a
maximum of 2 percent.
On October 21, 2014, precisely two days
before Diwali, Krishnanwho was on the
verge of being shunted out of the finance
ministry because the NDA regime had
swept to powerinvoked a rarely used legal
provision in order to force FTIL to merge
with NSEL.
This move set a dangerous precedent as
it would have destroyed the value of an estimated 63,000 shareholders of FTIL who
voted against the merger in an open ballot.
The move would have also saddled Shahs
flagship company with the balance of
defaults and crushed it.
Shah, an avid reader of biographies of
JRD Tata and Sony co-founder Akio Morita,
was tired and devastated. He believed his
success was unpalatable to the mandarins
of the finance ministry and he was not a
popular person for the powerful business
elite of south Mumbai.
MAKE IN INDIA?
In July 2014, FTIL agreed to sell its remaining stake in MCX to Kotak Mahindra Bank,
and Shah was forced by FMC and other regulators like SEBI and CERC (Consumer
Electricity and Regulatory Commission) to
divest from many of his other exchanges.
Corporate India was flummoxed. How
could the Indian government kill something
so successful, a product which could have
been part of Prime Minister Modis Make
in India program?
If the objective of FMC was to disallow
FTIL any say in the management of MCX, it
could simply have asked it to recall its directors on the board of MCX and put a stay on
FTIL voting rights. But the game plan
seemed larger.
As of now, FTIL has exited from all
exchanges, incurring losses running into
thousands of crores.
Even as the FTIL has challenged the
government order and the courts are debating its validity, there is yet another government order to take over the management of
FTIL by force. The writing on the wall

Markets
made easy
Commodity exchange: An
exchange where various
commodities and derivatives
are traded.
Spot exchange: The rate of
a foreign-exchange contract
a buyer expects to pay for a
foreign currency (in another
currency).
Bourses: A stock market
where you can buy and sell
securities, commodities,

options and other investments.


Currency derivatives:
Future and options contracts
in which you buy or sell a particular currency pair (i.e. dollarrupee, euro-rupee or poundrupee) instead of stocks.
Agriculture commodity:
Products, such as grains, dairy
and livestock, which are meant
for investments by the public.
Brokerage firms:
Companies which serve a
clientele of investors who
trade public stocks and other
securities.

is clear.
If the FTIL management is replaced by
government nominees, there would be no
one in it to challenge future orders. Worse,
the ministry claims there are 13,000
investors (actually trading clients) who
have lost their money. Thereafter, and based
on permission from the Bombay High Court
Committee, NSEL wanted to establish the
identity of each client in its record. But the
brokers, it is reliably learnt, advised their
clients to decline any information.
SERIOUS MALPRACTICES
Brokers too were under the scanner and
directors of three leading brokerage firms
were arrested too. As per investigating
agencies, top brokerages indulged in serious
malpractices such as proxy accounts, rampant client code modifications and PAN
lending amongst others.
Some trading clients have also filed cases
against their brokers, accusing them of
wrongfully conducting illicit trades on their
documents. The malpractises of PAN lending and client code modification spelt doom
for thousands of unsuspecting clients,
because these pirated credentials were used
by their brokers into creating forged loan
agreements, which made unsuspecting
clients liable for recoveries several times
higher than the amounts they had parked
with these brokers.

Shah was
thrown out of
his exchange
ventures, such
as MCX,
MCX-SX, IEX
and four
overseas
ventures by
the Ministry of
Consumer
Affairs on the
advice of FMC.

INDIA LEGAL September 15, 2015

29

LEAD/ Corporate/ Jignesh Shah

Timeline
April 12, 1988: Jignesh Shah started Financial
Technologies India Limited, a financial services company offering technology IP to create and trade on
next-generation financial markets.
November 10, 2003: FTIL started MCX.
February 28, 2004: NSEL was conceptualized from
the then prime ministers vision to create a national
Single Market.
July 8, 2004: Then finance minister, in his budgetary
speech, asserted the importance of spot market.
May 31, 2006: FMC seek concept paper from MCX
for creation of national spot market.
January 2007: 11th Planning Commission recommends setting up of spot exchanges.
June 5, 2007: NSEL was approved as a spot
exchange along with two other spot exchanges by
Department of Consumer Affairs by issuing gazette
notifications giving exemption to contracts from the
operations of the provisions FCRA.
December 19, 2007: Internal note from KP
Krishnan, expressing concerns about the declining
market share of NCDEX in comparison to MCX and
asking NSE to buy out NABARD and LIC stake in
NCDEX in order to give tough competition to MCX.
April 23, 2012: On the basis of FMCs recommendation, Ministry of Consumer Affairs issued show cause

notice to NSEL despite detailed clarifications given


by it.
May 23, 2012: NSEL responds to show cause notice
from ministry. No response from government.
October 18, 2012: Reminder from NSEL. No
government response.
July 12, 2013: FMC asks NSEL to stop launching
any fresh contracts and settle existing contracts on
their due dates.
July 18, 2013: FMC reverses its stance and informs
the government that it closed down NSEL validity.
December 2013: FMC declares FTIL not fit and
proper. FTIL sold its stake in MCX. FTIL sold its stake
in MCX SX.
May 7, 2014: Shah arrested on charges of
non-cooperation by EOW despite being summoned
seven times by EOW and he voluntarily having visited
it 21 times.
August 22, 2014: Shah gets bail from the Bombay
High Court.
October 21, 2014: Krishnan invokes legal provision
to force FTIL to merge with NSEL on the basis of recommendation made by FMC.
November 21, 2014: Jignesh Shah steps down as
the MD & CEO of FTIL and new board of directors
inducted in FTIL.

Shah does not talk, nor visit the FTIL


building he lorded over. People close
to him have compared his life to that
of Abhimanyu, son of Arjuna.
In short, the brokers ensured profits at
the clients expense. Interestingly, trading
clients Sharad Saraf and his son Pankaj, the
main complainants against NSEL defaulters, cut back-door deals with certain major
defaulters and settled their unclaimed dues.
India Legal has copies of the backroom
deals. Such deals were undertaken without
the knowledge of investigating agencies,
courts or affected parties and weakened the
stand against defaulters.
The logic proffered in favor of FTIL and
NSEL merger is that the latter is bereft of
any resources and therefore, FTIL resources

30

September 15, 2015

can be used for settling the liability on


behalf of the defaulters. Senior officials of
FTIL are worried about the fate of 63,000
well-defined equity shareholders whose
cash is involved. Worse, the livelihood of
thousands is being jeopardized. But there
are no answers.
Shah does not talk, nor does he visit the
majestic FTIL building he lorded over.
People close to him have compared his life
to that of Abhimanyu, son of Arjuna, who
was pushed into chakravyuha (cubicle) by
the Kaurava kings and killed mercilessly
without defense.
Shah lives in hope and wants to rise like
a phoenix from the ashes. When he meets
people, he shares his next visionto create
108 digital disrupters for 12 different industries that will create Indias biggest digital
wonder and sustain the nation till 2025.
But thats another story. IL

LEAD/ Corporate/Bureaucracys Role

The Final Blow Came


Joint secretary KP Krishnans letter suggests that competing interests
were threatened by FTILs growing clout

confidential note by KP Krishnan, then joint


secretary in Department of Economic Affairs
(DEA), which was sourced through an RTI
query, shows the governments interest in helping National Stock Exchange (NSE), a private
equity entity. Krishnan, thanks to his posting and clout, was
the blue-eyed boy of the then finance minister, P Chidambaram. In this note, Krishnan said that two public sector
undertakings, LIC and NABARD, should be ordered to divest
their shareholding in NCDEX in favor of NSE so that it could
become the single-largest shareholder of NCDEX. The note
states that the immediate need for this arises from the desire
to revive NCDEX which must be done as early as possible so
as to provide credible competition to MCX. MCX, incidentally, was the crown jewel of FTIL, and Indias topmost and the
worlds second-biggest commodity exchange. NSEL was not
even operational then. This note was initialed by
Chidambaram. At the time of this note, neither MCX nor
NCDEX (both commodities exchanges) were within the regulatory purview of Krishnan or the ministry of finance, but
were regulated by the Ministry of Consumer Affairs (MoCA).
It is, therefore, surprising why Krishnan went beyond his
jurisdiction.
2004: THE DIE IS CAST
The beginning of FTILs end began in early October 2004
when finance minister Chidambaram and minister of
Consumer Affairs, Food and Public Distribution Sharad
Pawar discussed converging regulators of financial and commodity markets into a single entity, quite unlike the global
trend where both had separate regulators. Pawar stiffly
opposed the idea as agricultural commodities came under his
ministry and he wasnt willing to let go of such a huge turf.
Pawar, with his political clout, managed to thwart
Chidambarams aspirations and succeeded in keeping commodities markets out of Chidambarams clasps. However, later
Chidambaram was at the helm when FTILs downfall began.

32

September 15, 2015

PLAYING A
ROLE
Chidambaram
had signed the
note written
by Krishnan

Decrees obtained by NSEL against defaulters


Sr.
No.
1
2
3
4
5

Defaulter Name
ARK Imports Pvt Ltd
Yathuri Associates
Aastha Minmet India Pvt Ltd
Juggernaut Projects Ltd
Swastik Overseas Corporation
Total

Amount (in Cr)


719.37
264.96
12.50
145.00
91.19
1233.02

2012 ONWARDSFMC ROLE


After the FMC was designated the agency to
supervise and regulate spot exchanges, it
sought clarification from NSEL regarding the
exemption from the operations of the provisions of Foreign Contribution Regulation Act
(FCRA). Without checking the validity of the
earlier general exemption granted to spot
exchanges, FMC reported to the MCA of violation by NSEL. Despite NSELs detailed clarification in February 2012, the FMC sent a letter
to the Department of Consumer Affairs on
April 10, 2012, stating that NSEL had
breached conditions of the exemption notification. It called upon the MCA to take action
against NSEL. A counter-explanation with
reminders by NSEL met with no response
from the FMC.
After a year, without prior notice, the FMC
chairman Ramesh Abhishek on July 12, 2013,
pushed the Ministry of Consumer Affairs to
direct NSEL to halt launching of further and
fresh contracts, leaving NSEL members and
trading clients in the lurch. What was surprising was that while NSEL was asked to stop
trading, another spot commodity exchange
platformNCDEX Spot Exchangecontinued to function without a hitch. Further, FMC
wrote a letter to the Ministry of Consumer
Affairsnow sourced through RTIthat
NSEL was closed abruptly without checking
the legal validity (see letter). Meanwhile,
defaulters, who had taken money from the
trading members against their goods, started
clandestinely selling the goods, while brokers
who had indulged in margin funding and client
code modification, panicked and sent recovery
notices to their unsuspecting clients.
However, NSEL secured nearly 84 percent
of default monies by way of judicial decrees
and injunctions on admission of dues by
defaulters. The final nail in the coffin was delivered on October 2014 when Krishnan was to
leave for a new posting. Before that, he made

Order of

Order Date

Bombay High Court


Bombay High Court
Bombay High Court
Bombay High Court
Bombay High Court

20/07/2015
18/12/2014
23/12/2014
23/12/2014
18/12/2014

Details of injunction obtained by NSEL against defaulters till date:


Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12

Amount Claimed
in TPN / Suit /
Section 9

Name of Defaulter
Vimladevi Agrotech Limited
Namdhari Rice & General Mills
Namdhari Food International Pvt Ltd
P.D. Agro Processors Pvt Ltd
White Water Foods Pvt Ltd
Mohan India Pvt Ltd & Tavishi
Enterprises Pvt Ltd
N.K. Proteins Ltd
NCS Sugars Ltd
Spin-Cot Textiles Pvt Ltd
MSR Food Processing
Metkore Alloys & Industries Ltd
Shree Radhey Trading Co
Total

14.02
10.75
53.07
680.23
86.12

23/12/2014
23/12/2014
23/12/2014
11/4/2014
10/10/2014

1,037.84

1/12/2014

937.89
58.85
38.26
8.82
94.83
34.59
13055.27

3/2/2015
10/24/2013
22/11/2013
20/2/2015
12/3/2015
23/12/2014

FTILS STAKE SALE


FTIL Exits

Value Realized
in INR (crore)

USD 150 million


(Rs. 900 crore+)
NBHC
230
MCX
887
MCX SX
63
IEX
73
Total Value Realized till date*
2153+
Total Debt in FTIL
474
SMX

Date of BHC
Order for
Injunction

Neither MCX
nor NCDEX
were within
the purview
of Krishnan, it
is surprising
why he went
beyond his
jurisdiction.

sure that the MCA, based on the August 2014


recommendation of the FMC, served a draft
notice of amalgamation of NSEL with FTIL on
October 21, 2014.
This was done under the pretext of public
interest, undermining the overall interests of
63,000 shareholders of FTIL.
FMCS FAILURE
The FMC did not follow the way SEBI hanINDIA LEGAL September 15, 2015

33

LEAD/ Corporate/Bureaucracys Role

OMINOUS SIGNS?
(Top) In 2004, union
minister Sharad Pawar
thwarted FM
Chidambarams move
to control the
commodities markets
(Above) FMCs letter to
consumer affairs
ministry sounding the
death knell for NSEL

34

September 15, 2015

dled the 2006 IPO scam of NSDL. Then, SEBI


chased 107 equity broker entities and recovered 25 percent of the monies due to 12 lakh
investors. In the NSEL crisis, seven defaulters
owed 85 percent of the total default amount,
while 30 brokers accounted for 70 percent of
total dues.
FMC could have chased only 7-10 defaulting entities and solved the crisis.
In his August 4, 2013, meeting with brokers
and defaulters, Abhishek was assured by
defaulters that they would pay back in a phased
manner. Despite this assurance and the subsequent empowering of the FMC through gazette
notification of August 6, 2013, it did nothing to
disgorge defaulters assets. However, it turned
its focus on NSEL, FTIL and its promoters.

WRONG AMALGAMATION?
Experts say this proposed merger was wrong.
Their reasons:
 Hearing Pending: MCA is invoking Section
396 despite the matter pending for hearing. It
has not given FTILs stakeholders an audience despite MCA promising to do so in the
High Court. It has also ignored its own circular that sets out guidelines for amalgamation.
 No public interest involved: The amalgamation does not serve any public interest as it
undermines the interest of over 63,000 legitimate shareholders of FTIL against the purported number of 13,000 trading clients on
NSEL platform. Six percent of trading clients
account for 66 percent of outstanding settlement obligation from the defaulters. Seven
defaulters account for 85 percent of the total
default amount.
 Trading Clients: The Bombay High Court
has noted that the trading clients had been
calling themselves as investors and termed
these people bogus traders.
 Concept of limited liability: By seeking to
merge the subsidiary with parent company,
the MCA is undermining the principle of
Limited Liability which is the fundamental
edifice of Company Law.
There are extenuating circumstances to
stop this amalgamation. These are:
 Alleged lack of financial resources: FTIL is
supporting NSEL by forwarding a loan of
`15 crore towards working capital and will
continue to do so, says the current FTIL
management.
 Alleged lack of HR: NSEL has 57 fulltime staff of which 18 are senior management, who are working towards recovery
from defaulters.
 Alleged slow pace of recovery: NSEL has
been able to secure a recovery amount of
`4288.29 crore from defaulters through
ways of decrees on admission and injunction. In addition, brokers have been already
paid `542.99 crore, thereby cumulatively
addressing liabilities of `4831.28 crore out
of the total `5,600 crore. Therefore, 86.27
percent of default amount has been secured
for recovery through decrees from the
Bombay High Court and injunctions from
other courts. IL

NATIONAL BRIEFS

Abolish death penalty,


says Law Commission
A NEW draft report of the Law
Commission has recommended
ending death penalty except in
terrorism-related cases. The
draft report, circulated among
the members, supports doing
away with capital punishment,
according to a report in The
Indian Express.
The Commission, headed by
Justice AP Shah (left), is likely

Madras HC
notice to BCCI
THE MADRAS High Court
has issued a notice to the
Board of Control for Cricket
in India (BCCI) on a petition
submitted by Chennai Super
Kings (CSK), challenging the
order of Justice Lodha
Committee suspending its
Indian Premier League (IPL)
franchise. CSK had been
suspended following the
2013 betting scam involving
its top official, Gurunath
Meiyappan.
A division bench, comprising
Chief Justice Sanjay Kishan
Kaul
and
Justice
TS
Sivagnanam, also allowed
Cricket Association of Bihar
(CAB), on whose plea the
Supreme Court had directed
the probe in IPL-6 betting
and spot fixing scandal, to
implead in the case.

to submit its report in coming


days, though the seven full time
members of the Commission
might not be in unison on the
issue. Interestingly in 1962, in
its 35th report, the Commission
had recommended retention of
death penalty. The report assumes significance in the light of
a debate generated over the
hanging of Yakub Memon.

Guwahati HC bans small cars


THE GUWAHATI High Court
has banned the launch and
sale of small cars that do not
meet crash-test norms in
Assam. The order is in
response to a petition that
sought to make vehicles safer.
The petitioner sought stringent safety standards in the
state, which consists of many
mountainous regions. A crash

test, like the Global New Car


Assessment Program (NCAP),
which is followed in Europe
and developed markets, is
what the petitioner is seeking.
The order bans cars that
weigh below 1,500 kg. Popular
models such as Maruti Suzuki
Alto, Swift, Hyundai i10,
EON, and Honda Jazz have
been hit following the order.

Shortage of HC judges
ACCORDING TO the latest data compiled by
the law ministry, as on August 1, 2015, nearly
24 high courts across the country were working
with just 633 judges, as against the approved
strength of 1,017. The Collegium System,
wherein judges recommended names of judges
for appointment and elevation, has been done
away with by the National Judicial
Appointments Commission (NJAC) Act, but
the new substitute is yet to take shape. The
Chief Justice of India has refused to take part in
a meeting with the Prime Minister in the selection committee of the panel under the new law,
thus leaving the new system in a limbo.

Case dismissed
THE US Court of Appeals has
affirmed a previous district
judges order that had dismissed the lawsuit against
Congress president Sonia
Gandhi, for human rights violations in connection with the
1984 anti-Sikh riots. The lawsuit was filed by a Sikh group,
named Sikhs for Justice
(SFJ). The court rejected the
SFJ petition, citing lack of
merit. In June 2014, US
District Judge Brian Cogan
dismissed the human rights
violation lawsuit by SFJ
against Gandhi due to lack of
subject matter jurisdiction
and failure to state a claim.
Gandhi's lawyer eminent
Indian-American attorney
Ravi Batra termed the appeals court ruling as historic.

Therefore, no judge can be elevated as chief justice of a high court, transferred to another high
court or elevated to the supreme court as there
is no system in place for the purpose. Only the
high courts of Meghalaya, Sikkim and Tripura
face no shortage of judges.

INDIA LEGAL September 15, 2015

35

STATES/ Gujarat/Patel Agitation

SEETHING RAGE
ON MODIS
HOME TURF

In a move that has befuddled


many, the powerful and affluent
Patel community in Gujarat,
under the leadership of young
Hardik Patel, has gone on
the rampage demanding
reservations. How will this
fury be tamed?
By RK Misra in Ahmedabad

like microbes multiply by


dividing, so does an India riven
by caste-based reservations.
There is ample evidence of this
in the rich state of Gujarat,
which has been up in flames
recently because of the agitation of the numerically strong and financially
solid Patidar (Patel) community which
demands quotas.
Constituting about 14 percent of Gujarats
total population of 63 million, they have 21
percent voter representation and are
demanding caste-based reservation under
the Other Backward Classes (OBC) category.
This, despite the fact that they hold a castiron grip over the state. The political, administrative, legislative, trade and industrial
levers of power in Gujarat are in their hands.
In fact, 8 of the 24 ministers in the
Anandiben Patel government and 42 of 182
legislators in the Gujarat Vidhan Sabha are
Patels. Even the state BJP president, RC
Fardu, belongs to their caste.
UST

OPENING A
PANDORAS BOX
Hardik Patel at the rally in
Ahmedabad, demanding
reservation for Patels

SNOWBALLING MOVEMENT
The Patels demand for reservation has
plunged Gujarat into an unprecedented turmoil. The agitation, which began less than
two months ago, has snowballed into a movement of sorts, catapulting its hitherto
unknown 22-year-old leader, Hardik Patel,
into national limelight.
On August 25, at a massive rally in
Ahmedabad, he demanded that Anandiben
Photos: UNI

36

September 15, 2015

personally come to the venue to receive their


charter of demands under pain of an indefinite fast. Aware that this move for a fast had
split the hastily united leadership of the
Patidar movement, the administration retaliated in the only way it could. After night, a
lathi-charge ensued, with the attacking cops
damaging parked vehicles and arresting
Hardik along with four of his fasting colleagues. The reprisal was fast and stunning,
leaving the government dazed.
As news of the arrest spread like lightening, the entire state was up in flames, with
government property, state transport buses,
police stations and the police themselves
becoming prime targets of Patel ire. With
public appeals from both the chief minister
and Prime Minister Narendra Modi falling
on deaf ears, large contingents of paramilitary forces were airlifted in aid of the State
Reserve Police Force (SRPF) and the Rapid
Action Force. Hastily summoned columns of
the army too carried out a flag march in
Ahmedabad.

Though Patel was released in an hour, it


was too late to stop the mayhem. An unrepentant Hardik told India Legal: The full
responsibility for the proliferating violence
rests squarely on the shoulders of the administration. We had organized a huge rally,
gathering almost 18 lakh people from all over
the state without a blemish. Everything
ended peacefully and the rallyists went back
without a hitch.
It was thereafter in the night that the
police brutally attacked the remaining people
at the ground without any provocation and
took me into custody for no rhyme or reason.
The result is there for all to see.
The statewide bandh called by him on
August 26 after his release was a success,
with gangs going around forcing shops,
offices and business establishments to close
down under pain of violence.

PATEL POWER
(Above) The show of
strength at the
Ahmedabad rally

HIMALAYAN GOOF-UP
Political analysts have termed the goof-up by
the government as Himalayan. A veteran
INDIA LEGAL September 15, 2015

37

STATES/ Gujarat/Patel Agitation

The Patidars
game plan now
is to enlarge
the scope of
their stir to the
national level
so as to force a
review of the
policy on
reservation.

TROUBLED TIMES
(Right) The movement
was in part designed
to embarrass
Chief Minister
Anandiben Patel

38

September 15, 2015

Gujarat watcher said: Laid low by the rapidly proliferating public agitation by the Patels,
the government lost its nerve. It should have
exercised patience to allow the differences
within the various warring constituents to
concretize.
A senior bureaucrat, who handled numerous crises under both the Modi and Anandiben governments, said on condition of
anonymity: Forced to play second fiddle to a
greenhorn over the last two months, the government initially underestimated and then,
was completely out of its depth in dealing
with the agitators. It resorted to a knee-jerk
reaction and came a cropper.
But it should have heeded Hardiks
speech, which clearly spelt out that if their
demands were not met, they would escalate
the stir to the national level. He also unfolded
the roadmap for it.
Apart from the 1.80 crores in Gujarat, we
number 27 crores in the country, with both
Bihar chief minister Nitish Kumar and
Andhra Pradesh chief minister Chandrababu
Naidu being in our community fold. Besides,
we have a total of 117 MPs in the present parliament, he reeled off. This was obviously a
problem headed straight for Modis
doorsteps in Delhi.

The Patidars game plan now is to enlarge


the scope of their stir to the national level so
as to force a review of the policy on reservation, with a single-point criteria of it being
only for the economically backward class.
KEEPING VIGIL
It is common knowledge that both the RSS
and Modi favor it and would not be averse to
a national debate on the subject. Highly
placed sources aver that the Sangh Parivar
has been keeping a sharp vigil on the agitation, with some of their leaders being in
touch with VHP constituents. At the same
time, they do not want any harm to come to
the Anandiben government and are keen to
apply the brakes to ensure this.
Nevertheless, what is exercising the
minds of common people are these questions
Who is Hardik Patel and what is his background? Where does the agitation derive its
managerial acumen and financial wherewithal?
Incidentally, Hardik Patel is the son of a
farmer who also doubles up as a dealer of
submersible pumps. He belongs to a middle
class family from Chandrapur village in
Viramgam taluka near Ahmedabad. A commerce graduate from an Ahmedabad college,

Hardik is fond of cricket and has represented


Baroda in inter-district cricket tournaments.
Not many in the state know about his political affiliations, though there have been talks
that he was at one stage involved with the
Aam Aadmi Party.
By his own admission, he has no political
affiliations, nor does he support any political
party. I have a one-point program, ie, to
ensure that the Patidars achieve the purpose
they set out to fulfill for which I am prepared
to go to any length, he told India Legal.
DISSIDENT GROUP
The fact of the matter is that the movement
for OBC reservations for the Patels was the
brainchild of a group of sidelined and disgruntled BJP leaders from the same community who had made common cause with others opposed to Anandiben. Her detractors
were aware that she was in position to accede
to their demands. They were also aware that
she enjoyed Modis confidence and would not
be permitted to be replaced. The idea was to
embarrass her with a subdued showing in the

ensuing elections to local self-government


bodies due later this year.
They were, however, in for a shock when
the agitation took off in right earnest, riding
on the shoulders of the frustrated youth of
the Patidar community. They were fed with
visions of jobs aplenty through talks of
a Gujarat model during Modis 12-year rule
in the state. The BJP dissidents who backed
this stir soon lost control of it and found
themselves rendered irrelevant even as
Hardiks irreverent style and refusal to play
footsie with the ruling party politicians only
added to his aura.
The Intelligence Bureau has already submitted the names of those from the ruling
BJP who were involved in aiding and abetting the Patidar movement and these have
found their way to Modi through Anandiben.
For the moment, things stand delicately
poised. While the issue of reservations
acquiring national overtones to stimulate
a debate is acceptable, this will not be at the
cost of the Anandiben Patel government
in Gujarat. IL

BOILING ANGER
(Above) Violence erupted
after Patels arrest

INDIA LEGAL September 15, 2015

39

STATES/ AP vs Telangana

a
n
a
g
n
a
Tel

Andhra vs Andhra
The battle of egos between the chief ministers of the
two states has reached the Supreme Court and is a
long festering one. How will the center handle it?
By Bhavdeep Kang

HE slugfest between the chief


ministers of Andhra and
Telangana, each bashing the other
on the noggin with criminal
charges, may be a comic treat for
YouTube viewers. But in the two
newbie states, no one is laughing.
Least of all the legal community.
Wily Telangana CM K Chandrashekhar Rao or
KCR deftly set the ball rolling by entangling his
Andhra counterpart Chandrababu Naidu or Babu
in a cash-for-votes scam. Babu hit back at KCR with
telephone-tapping charges. They threw the book
in this case, the IPCat each other and the matter is
now before the Supreme Court. Other flash points
include serious concerns such as water-sharing and
petty ones like denial of a building permit for Babus
new house in Hyderabad.
The fisticuffs are fuelled as much by a clash of
egos as the acute economic disparities between the
SWORN ENEMIES
Andhra Pradesh Chief Minister
Chandrababu Naidu (left) and
Telangana Chief Minister
K Chandrashekhar Rao
(right)

Photos: UNI

54

August 31, 2015

The immediate concern is the bifurcation


of the AP High Court. Currently, the
composition of judges is heavily
weighted in favor of Andhra.

two regions. The feud between the two, once


buddies or at least co-conspirators and now
sworn enemies, is long standing.
AP HIGH COURT
Perhaps the most immediate of many concerns
is the bifurcation of the Andhra Pradesh High
Court and the filling of vacancies in the lower
courts. Currently, say Telangana lawyers, the
composition of judges is heavily weighted in
favor of Andhra. Earlier this year, the AP High
Court ruled that it would serve both states until
the central government sets up a separate court
for Andhra, after which the Hyderabad HC
would serve Telangana (in accordance with
Section 31 of the AP Reorganisation Act 2014).
A division bench comprising then Chief Justice
Kalyan Jyoti Sengupta and Justice PV Sanjay
Kumar put the ball in the centers court, adding
that the AP government would have to decide
where to set up the new HC.
For Telangana, a separate HC is a matter of
urgency. According to Shravan Kumar, who
represents the Telangana Young Advocates
Association: Of the 49 judges, only six are
from Telangana. The rest are mainly from
Andhra. In the lower judiciary, we find 85 percent domination by Andhra. In the matter of
filling up vacancies, this gives Andhra a natural
advantage. Says Kumar: In Andhra, there is a

culture of competitive examinations, which we


in Telangana do not have. So they walk away
with all the posts, in every field.
The Supreme Court has ordered that all
vacancies be filled by mid-September, rejecting
Attorney-General Mukul Rohatgis plea that
appointments cannot be made unless
Telangana puts in place a separate judicial
cadre. An order that must be obeyed for fear of
swift reprisal. The removal of the Karnataka
HC registrar-general for not respecting the
deadline to fill up posts a couple of months ago
has had a salutory effect.
Sentiment against Andhra and the union
home ministry, responsible for bifurcation of
the HC, runs high in Telangana. The perception that adjudication on the controversial
Sections 8 and 10 of the AP Reorganization Act
will go in favour of Andhra has added urgency
to Telanganas demand for bifurcation.
FRIENDS TURNED FOES
First, a brief recap. Babu and KCR started their
careers with the Youth Congress, later switching to the Telegu Desam Party (TDP). Babu

CAUGHT IN THE
CROSS-FIRE
(Above left) Governor
ESL Narasimhan
(Below) Andhra HC that
is the main bone of
contention

INDIA LEGAL September 15, 2015

41

STATES/ AP vs Telangana

The fisticuffs are fuelled as much by a clash of


egos as the acute economic disparities between
the two regions. The feud between the two
sworn enemies is long standing.

DISCONTENT FLOWS
(Below) The sharing of
waters of the
Nagarjunasagar dam is a
sore point
(Above right) Telangana
state protestors

42

September 15, 2015

revolted against TDP founder (and his fatherin-law), NTR, in 1995, with KCR taking his
side. He later joined Babus cabinet. In 1999,
Babu then riding high as a key member of the
ruling BJP-led National Democratic Alliance
(NDA) relegated KCR to the post of deputy
Speaker. It was an insult KCR would never forgive, particularly after intermediaries brokered
a truce, only to have Babu renege on his commitments. KCR quit the TDP to launch the
Telangana Rashtra Samiti (TRS) in 2000.
The KCR-YSR Rajasekhara Reddy combine
swept the 2004 assembly and Lok Sabha polls
and KCR got a cabinet berth in the UPA government, only to quit in 2006 over the
Telangana issue. Both KCR and Babu went
into decline until YSRs demise in 2009. The
UPA finally caved and allowed bifurcation of
Andhra Pradesh in 2014.
Telangana, it is said, was an idea whose
time had come, after 60 years of sporadic, at
times bloody struggle. However, the move
dictated by the necessity of hanging on to the
state which had the maximum number of MPs
in 2004 and 2009achieved the reverse. The
Congress was decimated and both KCR and

Babu surged back to power. Since then, they


have bickered ceaselessly over the division of
assets, control over institutions and common
capital (for the next ten years) of Hyderabad.
Law and order is under Section 8 of the
Reorganization Act, directly under the governor. Telangana questions the constitutional
validity of Section 8, while Babu insists that
guidelines be framed for its implementation.
Section 8(3) is peculiar in that it says the governor shall act on the advice of the Telangana
council of ministers but, at the same time,
grants full discretion in exercising his individual judgment. The HC dismissed a PIL against
Section 8 earlier this year. Governor ESL
Narasimhan, being a UPA appointee, contends
with a trust deficit vis-a-vis the two CMs, who
watch out for any hint of partisanship.
A senior Congress leader observed that
Babus belligerence is exacerbated by the fact
that he was caught flat-footed in the cash-forvote scam. As I understand, his conversation
with the nominated MLA who alleged a bribe
had been offered to him by TDP, was inadvertently recorded by an aide and fell into the
hands of the Telangana police. This gave KCR
a club to beat him with, he says. Babu, however, claimed the purported recording was fake
and countered with a telephone-tapping
charge. Two TDP MLAs have been arrested by
the Telangana Anti-Corruption Bureau (ACB)

in connection with the charge of bribery.


According to senior Eenadu journalist G
Krishnamohan Rao, KCR was reined in only
when home minister Rajnath Singh prevailed
on him to go slow on the case after Babu came
to Delhi and met everyone.
SPECIAL STATUS
A more serious concern for Babu is the
demand for special status to Andhra. While the
UPA did not specifically include it in the Act,
the Congress and the YSR Congress have both
raised the demand, saying the promise of the
then central government must be honoured.
For Babu, putting pressure on the NDA to
deliver is a political compulsion.
BJP general secretary P Murlidhar Rao
observed: Special status for Andhra has not
been rejected. It is under consideration.
Regardless of this half-hearted assurance, in
order to avoid upsetting Tamil Nadu and other
neighboring states, Andhra will in all likelihood be generously compensated in ways other
than the grant of special status. In parliament,
MoS finance Rao Inderjit Singh had stated that
special status was off the table for any and all
states, other than the 11 already granted.
Like the bifurcation of the HC, division of
assets is proving to be a slow process. The
Sheela Bhide panel was set up last June to
determine the disposition of state-level institu-

tions between the two. A year-and-a-quarter


later, de-merger reports have been submitted
for only two-thirds of the 90 entities listed in
the Act.
Water is a current and future flashpoint,
now that Telangana is an upper riparian state.
Any irrigation projects initiated by the state
would impact Andhra. The semi-drought this
year has sparked off a furious exchange of letters, each state charging the other with arbitrarily taking up new irrigation projects in violation of the AP Reorganization Act. Sharing of
water from Nagarjunasagar and Telanganas
insistence on the Palamuru and Dindi lift irrigation projects have alarmed Andhra.
Telangana has hit back by questioning the
Pattiseema lift irrigation project.
The process of reorganization is delicate,
given the prevailing sentiment in Telangana
that it has historically gotten the short end of
the stick. It sees itself as underdeveloped and
discriminated against in terms of allocation of
resources, although it is the custodian of considerable mineral wealth. People here are now
impatient for freedom and want the state to
chart its own course, even if means taking the
occasional missteplike the cheap liquor policy and motor vehicle entry tax.
Expediting the separation of the judiciary
and division of assets will go a long way to
defusing tensions between the two states. Even
so, considerable tact and skill on the part of the
central government is imperative to ensure
that both parties are satisfied. IL

DEMANDING DIVISION
(Above) Women
agitating for the
formation of a separate
state of Telangana,
finally granted in
February 2014

INDIA LEGAL September 15, 2015

43

LEGAL EYE/ Muslim Personal Law/Survey

Surprising Revelations
A survey among Muslim
women in 10 states threw
up startling results. Almost
92 percent wanted talaq to
be banned. With an NGO
publishing a model nikah
namah, are the signs of
change on the horizon?
By Ajith Pillai

HAT the Muslim Personal Law is gender


unjust and discriminates
against women is wellknown and has been articulated on several intellectual platforms. But
now, perhaps for the first time, an extensive
survey has been conducted to give voice to
ordinary and marginalized Muslim women
about a law that has an important bearing on
their marital and adult life. The outcome of
the study is not only revealing but should
make Muslims as well as lawmakers sit up
and introspect.
The survey was conducted among 4,710
Muslim women across 10 states between July
and December 2013 by the Bharatiya Muslim
Mahila Andolan (BMMA), which describes
itself as a secular, autonomous and rightsbased Muslim womens movement.
VITAL QUESTIONS
Among the questions asked were: what
should be the minimum age for marriage;
Photos: Anil Shakya

44

September 15, 2015

should men be allowed to keep more than


one wife and should the oral system of
divorce or triple talaq, which bypasses the
established legal system, be banned.
The results of the survey reflect that an
overwhelming number of Muslim women are
not only against what they feel is an archaic
law but they also want the government to
codify a new legislation which is non-discriminatory, gender sensitive and relevant to
modern times.
The BMMA operates in 12 states and for
the survey, its activists and volunteers
reached out to respondents in urban and
semi-urban centers in Maharashtra, Gujarat,
Bihar, Rajasthan, Madhya Pradesh, Jharkhand, Odisha, West Bengal, Karnataka and
Tamil Nadu.
Answers to the BMMA survey reflect the
frustration among Muslim women (see
graphs) with certain practices followed in the
name of the Personal Law. For example, as
many as 92.1 percent respondents were
against the unilateral or oral divorce system
or talaq. They wanted it banned. A sizeable
majority, 88.5 percent, wanted the qazi who
sends the notice of oral divorce to be
punished. But what came as a surprise
was that 95.5 percent of those polled had
not even heard about the All India
Muslim Personal Law Board (AIMPLB)
which claims to be a representative body of
Muslims in the country.
Zakia Soman, one of the co-founders of
BMMA, said: The AIMPLB is only an NGO
like any of us. It has simply been given too
much importance by the media and politicians. The average Muslim does not recognize it or even know of its existence. Indeed,
for the record, the AIMPLB is a non-government body set up in 1973 to adopt suitable
strategies for the protection and continued
applicability of Muslim Personal Law. But
the popular perception is that the organization is a quasi-official one whose reactions
must be sought on every Muslim issue.
DONT TAMPER
The AIMPLB, on its part, has been critical of
the survey and the conclusions drawn, including the one calling for a ban on talaq.
Maulana Abdul Raheem Qureshi, spokesper-

What came as a surprise in the survey was


that 95.5 percent of those polled had not
even heard about the All India Muslim
Personal Law Board.
son of the AIMPLB, reportedly had this
response: Which sane Muslim in the country is not aware of the AIMPLB? We are not
in favor of tampering with Muslim laws. The
Islamic system gives a way out of a difficult
marriageit allows couples a chance of coming out of a bad relationship. When contacted by India legal, a representative of the
AIMPLB refused to elaborate further, saying
that he would not like to comment without
seeing the survey and could not go by a few
sketchy media reports.
That apart, how much credibility should
one give to the survey and the organization
that conducted it? When contacted by India
Legal, activists who work with Muslim women in Gujarat, Mumbai and Delhi vouched
for the genuineness of the BMMA, although
they differed with it on ideological grounds.
They have fought against communal forces
and have taken up issues that affect the lives
of Muslim women. So we should not be dismissive of its survey. After all, it confirms
that women are fed up with the patriarchy
that rules the Muslim clergy and the Personal
Law. But will the data be taken as seriously
as, say, the study conducted by the Sachar
Commission? Was the same rigueur
INDIA LEGAL September 15, 2015

45

LEGAL EYE/ Muslim Personal Law/Survey

92.1% Muslim Women


Want Triple Talaq Banned
AROUND 4,710 adult Muslim women, from the middle and
lower middle class, took part in the survey conducted
between July-December 2013, by the Bharatiya Muslim
Mahila Andolan (BMMA).
Responses were elicited from urban and semi-urban
centers in 10 statesMaharashtra, Gujarat, Bihar,
Rajasthan, Madhya Pradesh, Jharkhand, Odisha, West
Bengal, Karnataka and Tamil Nadu.
A majority of 78.7 percent women were homemakers. 12.7
percent respondents were employed in the unorganized sector, 7.9 percent in the organized sector and others, 0.7 percent. The annual income of 73.1 percent was below `
50,000, of 18.3 percent between ` 50,000 and `1 lakh, and
of 8.6 percent above `1 lakh. The respondents included 87.6
percent Sunnis, and 4.1 percent Shias. 8.3 percent claimed
they were unaware of which sect they belonged to.

followed in collating the findings? And is


codifying the Personal Law of utmost priority
today or are there more urgent issues that
need to be addressed? wonders an activist.
She says that the BMMA is unlike other
progressive womens organizations in that it
swears by the Quran and feels that any
change should be within the framework of
the Holy Book. According to another activist,
it holds the Quran in one hand and the
Indian constitution in the other. It believes
that the Quran is just and fair to women and
that it is its warped interpretation that has

46

September 15, 2015

The Questionnaire
Have you heard of the All India Muslim
Personal Law Board

Yes 4.5%
No 95.5%
Should there be a legal ban on the practice of unilateral triple divorce or talaq?

Yes 92.1%
No 7.9%
Should polygamy be allowed after
consent from first wife?

Yes 27.1%
No 72.9%

caused so much mischief.


Talking about the survey, Soman told
India Legal: It became possible because of
our volunteers and team members. They showed the patience to interact with the women
and draw them out to answer several sensitive questions. It took us six months to collect
the responses. She says there was nothing
political in the survey or the timing of its
release in the second week of August. The
survey was carried out in 2013 and it took us
time to collate the data and also to finalize
the report that accompanies it, she says.

Should the government help the community to codify its personal laws?

Should polygamy be allowed if first


wife is terminally ill?

Yes 37.2%

Yes 88.9%

No 62.8%

No 1.4%
Dont know 9.7%

What should be the punishment for a


man who unilaterally divorces his wife?

Put behind bars 51.4%


Pay compensation 36.2%
Pay fine 12.4%

Should religious leaders support


Muslim womens demand for
codification of laws?

Yes 86.7%
No 3.4%

Should arbitration be made mandatory


before divorce is finalized?

Yes 93%
No 7%

Dont know 9.9%


Should Darul Qaza/ qazis come
under government regulation?

Yes 89.5%
Should husband take the permission
of the court before second marriage?

Yes 75.5%
No 24.5%
Should the qazi who sends the notice
of unilateral divorce be punished?

No 3.4%
Dont know 7.1%
Will codification help Muslim
women get justice?

Yes 88.5%

Yes 83.3%
No 2.8%

No 11.5%

Dont know 13.9%

Lalit Khitoliya

UNFAIR TO WOMEN
In the report, Seeking Justice Within the
Family by Dr Noorjehan Safia Niaz and
Zakia Soman, the authors point to what they
feel is the crux of the problem. To quote: The
Shariat (Islamic laws based on the Quran), as
practiced in different parts of the country are
subject to multiple interpretations and misrepresentations which more often than not
are unfair to women. Often the injunctions in
the Quran are violated in the name of the
Shariat.... It is not difficult to guess as to
what is the perspective and understanding of

some of the men who dispense justice at


the Shariat courts across the country! Most
of the time the verdicts in family matters end
up being unfairly pro-men and anti-women.
These can hardly be said to be based on
Quranic injunctions.
The way forward that the BMMA has
come up with, after consultations with women from various strata of society as well as
legal experts and social activists, is to work
within the framework of the Muslim religion
and push for a law that is Quran compliant
and yet, without the inadequacies and
INDIA LEGAL September 15, 2015

47

LEGAL EYE/ Muslim Personal Law/Survey

Law Unto Itself


Instances of flawed notions of right and wrong, with horrifying results

USLIM Personal Law in India is based on the interpretations of


Shariat (Islamic laws) and can vary from place to place and from
person to person. It largely deals with marriage and family matters, including divorce, custody of children, inheritance of property, etc.
Since it is not codified, women activists complain that the many interpretations of Shariat laws have been extremely patriarchal and biased
towards men. It is also alleged that by invoking the Shariat to justify
arbitrary interpretations, women have been denied their rights spelt out
in the Quran. The Shariat, liberal Muslims point out, is man-made and
not divine. But its divinity is invoked to justify unjust acts like triple talaq.
It was in the post-1857 era that the British introduced laws to reform
society. In keeping with its divide and rule policy, separate rules were
framed for Hindus and Muslims. For the latter, two laws were enacted
Shariah Application Act, 1937, and the Dissolution of Muslim Marriage
Act, 1939.
To put it in a nutshell, the first merely stated that Shariat laws will govern all Muslims. It did not go into specifics but left it to the interpretation
of Shariat courts manned by clerics or those given the task of interpreting. The second law empowered women by giving them the right to opt
out of a bad marriage on nine counts. Divorce was earlier banned for
Muslim women and led to several
conversions to other religions to
dissolve their marriages.
In post-Independent India, no
changes were made. It was the
Shah Bano case which created a
storm in 1985. The woman from
Indore was divorced by her husband in 1978 under the Muslim
Personal law. But she approached
the courts for maintenance. The
case reached the Supreme Court,
which ruled in 1985 that under
Section 125 of the CrPC, Shah
Bano be paid maintenance of
TURNING POINT
`500 per month by her husband.
Shah Banos case was a
This led to outrage among the
watershed moment for Muslims
Muslim community and the
Congress government under Rajiv
Gandhi buckled under pressure
and passed the Muslim Women (Protection of Rights on Divorce) Act
1986, which virtually overturned the apex court decision.
Under it, the husband is liable to pay alimony for three months after
the divorce, following which the woman has to turn to her relatives for
financial support. In case they fail to help, the court can order the Wakf
Board or the state to provide for the woman and her children. The constitutional validity of the 1986 Act was challenged in 2001 in the Supreme
Court. Shariat laws have no legal binding in India and Shariat courts can
do nothing more than advise those who approach it. Fatwas passed by
them are also mere advisories.

48

September 15, 2015

inequalities that the Personal Law has in its


current form. A draft Muslim Family Law
has already been circulated. We plan to take
it up with the government and with the people. We want the law codified, says Zakia.
The BMMA has also formulated and published a model nikah namah or marriage
contract, which, in contrast to the ones generally used in India, safeguards the rights of
both spouses, and is fully in accordance with
the Quran. It was framed by a team of
Muslim women scholars with the help of the
well-known Islamic scholar, the late Dr
Asghar Ali Engineer. Several marriages,
according to the BMMA, have been conducted in Maharashtra and Gujarat, using this
nikah namah.
It remains to be seen if the BMMAs campaign for a codified Muslim Personal Law
will overcome resistance from the clergy and
the powerful conservative political lobby
within the community.
One issue that the lobby raises is the word
Bharatiya in the full form of BMMA. But
the organization is clear that Bharatiya
means Indian and it does not believe in
allowing Hindutva elements to monopolize
the term. Zakia also maintains that she and
others associated with the organization are
strongly opposed to Hindutva oriented politics and will not allow their campaign to be
exploited by vested interests. IL

MEDIA/ Amateur Sex Videos

Pawns in the porn game

Anthony Lawrence

Despite the mounting concerns


about child pornography, the
govt has forgotten amateur sex
videos, which prey on young
women. Why arent ISPs being
criminally charged for giving
access to them?
By Abhay Vaidya
50

September 15, 2015

HAT is the nature, if not criminal, of YouTube amateur sex videos such as Mumbai College
Girl MMS Scandal 2013 (with
6.14 lakh views) or Hot Indian
Sexy Young Lady Sex with Boyfriend (with 3.9
million views)? There are thousands of such videos available to porn consumers in India, such as
Indian College girl hot sexy scandal in classroom,
Indian Girls Hostel Video Leaked and Medical
College Ragging, all of which ought to be pursued
by the police, booked and banned outright.

These videos are not sophisticated pornography produced by a well-regulated


industry as in the US, but amount to acts of
crime. In some cases, their presence in a
mass medium like the internet has even led
to suicides by young girls.
VULNERABLE WOMEN
Unfortunately, it was sex videos such as these
that remained hidden from the public glare
during a recent debate on the right to
pornography in the privacy of our homes.
What did not come into focus was the vulnerability of minors and young women who
were filmed secretly by mobile phone cameras, spycams and webcams.
Porn websites, Internet Service Providers
(ISPs) and telecom companies generate high
revenue through the popularity of such sex
videos which are consumed voraciously on
the mobile phone platform and the computer
network. They may not fall in the category of
child porn. Nevertheless, these videos are of a
criminal nature because they have been shot
or uploaded without consent. Why
arent ISPs being charged with criminal conduct for providing access to
such videos?
It is not surprising that there is a
wider audience for porn now. When
a woman pens a signed essay in a
popular Marathi newspaper under
the headline: I watch porn. What
about you?, we know that the
nation has come a long way on the
porn expressway.

ments stand before a bench headed by Chief


Justice HL Dattu and said India cannot be a
totalitarian state and the governments intention was only to ban child pornography. He
acknowledged that pornography is a grey
area without any straight answers and if
people want to watch it in the confines of
their home, there was no way that the government could stop it.
The government also did not want to do
moral policing, Rohatgi said, and added in
the same breath that there were issues relating to the freedom of speech and expression
as enshrined in Article 19 (1)(a) of the constitution which need to be respected.
The government has already withdrawn
its order banning 857 pornographic websites
and has assured that a mechanism would
be worked out between ISPs and the
Department of Telecommunications to ban
child pornography. But is also high time the
government tackles the menace of young
girls and women being filmed secretly. This
has been growing by leaps and bounds
AT THE RECEIVING END
(Left) HRD Minister Smriti Irani discovered a
hidden camera atop a changing room in a
Fab India outlet; (Below) AG Mukul Rohatgi
defended the govt position on porn sites in SC

GROWING ACCEPTANCE?
This was amply clear in the heated
debates on TV and social media in
August, when the right to pornography in the privacy of homes was discussed. There can now be no turning
back in terms of a blanket ban
on pornography in India. This was
realized by a chastened Narendra
Modi government. Not surprisingly,
Attorney-General Mukul Rohatgi
made all the right noises before the
Supreme Court during a hearing on
August 10.
Rohatgi clarified the governAnil Shakya

INDIA LEGAL September 15, 2015

51

MEDIA/ Amateur Sex Videos

the modesty and privacy of innocent victims.


These include the Delhi schoolgirl MMS,
which has inspired filmmakers in Bollywood.
These videos are remotely operated, and
are shot during intimacy with a partner, in
rest rooms, changing rooms, hotel rooms and
trial rooms. One old man, who was arrested
in Pune some years ago, had installed spycams in various rooms of a flat that he had
rented out exclusively to college girls.
Much of this sexual material is generated
in the form of revenge porn by ex-lovers,
with the intention of destroying the lives of
young women.
You never know where the pinhole cameras could be hiddenthey have been found
behind mirrors in hotel rooms and typically,
near electrical fittings. The safest thing for
women to do is to ensure minimum lighting
while undressing or during intimate
moments, says cyber-security expert Capt
Raghu Raman.

SILVER SCREEN
SCRIPTS
Drishyam (top) and DevD
(above) are among the
movies based on MMS
scandals

52

September 15, 2015

across India, especially in villages and small


towns, where people are clearly not as smart
as their smart phones.
MODUS OPERANDI
These short videos are done during tender
private moments by unscrupulous boyfriends and others to blackmail the girls
later. While these videos of women in various
stages of undress or sexual acts dont fall in
the category of child pornography, they are
of a criminal nature as they have been shot
and uploaded without consent and invade

THRIVING MARKET
Clearly, just as prostitution exists because
theres a thriving market for it, so do these
clandestinely shot videos which are shown by
porn sites and made available by ISPs on
various platforms, including mobile ones.
Porn sites solicit them on the internet itself,
with attractive payment terms, thereby
encouraging what could already be an organized crime.
However, these illegally produced sex
videos cant be banned because they dont
necessarily constitute child pornography.
They are of a criminal nature but just a fraction of cases get reported and acted upon by
the police.
One way to deal with this is to create mass
awareness among school-going girls. They
need to be counseled to be extra cautious
about being secretly filmed in their private
moments. Also, people engaging in such
criminal activities need to be identified and
booked by the police in large numbers.
The most important step, however, is to
demand that ISPs and telecom companies
refuse to provide access to such sex videos.
They are partnering in a criminal activity
with producers of porn and other websites
and platforms such as YouTube. IL

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encompassing policy and business drifts, the latest from inside the print and electronic
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40

SCIENCE/ Research vs Environment

Finding
Neutrino
An underground observatory in Tamil Nadu
to study the tiniest particle imagined
by man runs into green hurdles.
But scientists are hopeful that it will
surmount them and go on stream
By Murali Krishnan

GROUND ZERO
The site in Bodi Hills where
the INO project is slated to
come up

ndia will soon join the global high-end


scientific Neutrino club with an ambitious project intending to study the
properties of atmospheric neutrinos
through the setting up of an underground lab. Neutrinos are sub-atomic particles produced by the decay of radioactive elements and are elementary particles that have
almost no electric charge. Neutrinos are considered to be the tiniest quantity of reality

imagined by man. Their study would help us


understand several fundamentals puzzling scientists and throw new light into the creation
of the universe.
Christened India-based Neutrino Observatory or INO, the project in Tamil Nadu will
study atmospheric neutrinos some 1,300m
below the rocky ground. But this ambitious
`1,500 crore project that was cleared by the
union cabinet earlier this year has run into a
spot of bother, opposed by environment
activists and a politician.
LEGAL TROUBLE
A Chennai-based environmental NGO,
Poovulagain Nanbargal (Friends of the Earth)
has moved the Southern Bench of National
Green Tribunal, challenging the environmental clearance given to the construction of the
INO neutrino detector. It claims the blasting
of rocks in the Western Ghats could affect the
fragile biodiversity hotspot.
When the project comes up, it will be
housed in 63 acres of land, about 2 km away
from settlements in the Bodi West Hills region
of Theni district, about 110 km west of

54

September 15, 2015

Madurai in Tamil Nadu and about 60 km


from the Kerala border.
Vaiko, the general secretary of the
Marumalarchi Dravida Munnetra Kazhagam
(MDMK) has also raised objections against
the proposed projectone that was conceived
in 2000. His contention in the Madras High
Court (Madurai Bench) is that carrying out
blasts in the zone can damage the underground aquifers and hence, impact the flow of
water. In his public interest litigation (PIL)
asking for a stop to the underground mission,
he points to the reservoirs in Idukki and south
Tamil Nadu, including Vaigai and Periyar
dams in the vicinity.
Despite the delay, scientists are hopeful of
the project getting off the ground but are disappointed that the writs are taking up valuable
energy and time. The site is a wasteland, a
barren land, says INO project director, Naba
Mondal of the Tata Institute of Fundamental
Research in Mumbai. There is more than a
semblance of truth in Mondals assertion, with
a 2011 report of the Ministry of Environment
and Forests stating that the forest clearance
would be notional as no forest land is

expected to be occupied, since both the tunnels and laboratories are underground.
Whats more, the Department of Atomic
Energy has already clarified that the INO tunnel will be used for basic research and no
radioactive waste will be dumpedanother
concern expressed by the litigants. We are
confident that this project will happen especially when so much money and time has been
expended, says D Indumathi, physicist and
outreach coordinator of INO.

CO-OPTING THE LOCALS


(Left) Scientists assuring
villagers in Theni that the
INO project will not affect
the environment;
(Above) Scientists
associated with the INO
project at the proposed site

MASSIVE PROJECT
This project involves nearly 26 scientific institutions and about 100 scientistsa collaboration that is expected to grow further in the
coming years. INO will be built around 1.3 km
beneath the hills which provides a granite
cover that blocks most other particles other
than the neutrino. The 2 km-long tunnel with
three caverns will house the 50,000-ton iron
calorimeter neutrino detector which will be
the worlds most massive neutrino detector.
A neutrino detector is an apparatus designed to study neutrinos. Because neutrinos
only weakly interact with other particles of
matter, neutrino detectors must be very large
in order to detect a significant number of
them. The technology that we are building
indigenously is totally different from all the
detectors that are built for neutrinos. We are
using an iron calorimeter which is totally different from other scintillation detectors
INDIA LEGAL September 15, 2015

55

SCIENCE/ Research vs Environment

Vaikos contention in the Madras High Court


(Madurai Bench) is that carrying out blasts in
the zone can damage underground aquifers
and hence, impact the flow of water.
that people would normally use, explains Anil
Prabhakar, a professor in electric engineering
at IIT Madras.
While a lot of other basic fundamental
particles have been studied in large experiments, the neutrino has always been elusive.
India has the credit for having studied atmospheric neutrinos, one of the first countries to
do so, he adds.
We have been part of many collaborations
abroad. Here, we have a fully Indian experiment where we have the chance to determine
our own physics goals and ideas, our own
experiments, our own equipment. And so we
actually give the drive and direction ourselves,
maintains Indumathi.

DIVISIVE PARTICLES
(Below, L-R) INO Project
Director Naba Mondal and
MDMK General Secretary
Vaiko have divergent
views on the
environmental impact of
the project

WONDER PARTICLES
Neutrinos are probably the strangest of all elementary particles. Quick as light, unimaginable numbers of them race through space. It is
a neutral subatomic particle with a mass close
to zero and half-integral spin, which rarely
reacts with normal matter.
Neutrinos come in three types or flavour
electron-neutrino, muon-neutrino and tau-

neutrino. Each neutrino flavour has a slightly


different mass, although physicists do not yet
know exactly what those masses are.
These neutrinos do a three-level Jekyll
and Hyde. They keep oscillating into each
other. So sometimes you see a neutrino as one
type and as it goes along, it oscillates or transforms into another type, says Indumathi.
Through these oscillations, scientists hope to
determine the mass of these neutrinos. And
this will be one of the main aims of this experiment that will be located in the INO lab.
The mass differences among flavours are
believed to be the main factor affecting how
neutrinos oscillate or morph as they pass
through space, people, matter and Earth.
Calculations suggest there must be around 40
billion of the invisible neutrinos in a cubic
centimetre of the atmosphere.
MANY SPIN-OFFS
Professor MVN Murthy, who is also associated
with the project, underlines the importance of
this endeavor. We dont understand many
properties of neutrinos. Once that happens,
you can address larger questions like matter
and anti-matter asymmetry.

56

September 15, 2015

Despite their smallness, the neutrino mass


has far-reaching inferences. For example, the
neutrino mass implies that neutrinos played a
decisive role in the formation of the Universe.
It potentially blurs the distinction between
matter and antimatter, which might account
for the apparent absence of antimatter.
Questions still continue to haunt cosmologists about what makes up the universe.
Dark matter accounts for about a fifth of the
total matter in the universe, yet its nature and
properties are still a mystery.
The rest is all unknown and that is why we
call it Dark. In order to understand all these
things, neutrinos are an important part which
may lead to a better understanding of our universe, adds Murthy.
Most of the advanced countries are already
working vigorously in neutrino science with
dedicated labs. These include the US, Russia,
France, Italy, China, Japan and South Korea.
In March this year, China announced the construction of a neutrino observatory in its
Jiangmen province with similar goals. Like the
INO, the Jiangmen underground neutrino
observatory is expected to be completed by
2020. Work has already begun there.

FRUITS OF SCIENCE
So is there a race among growing economies to
research neutrinos? There are neutrino
physicists everywhere on earth. There is also a
proposed experiment in the Mediterranean
Sea. Some are underground, some are on the
surface of the earth, and some are at the South
Pole. I think there is no limit to neutrino
physicists in choosing sites, says Indumathi.
The ambitious project could open up new
vistas in astronomy and astrophysics, communication and even in medical imaging, through the detector spin-offs. Besides, a lot of
Indian companies and industries have already
started to get involved in the construction of
various components of the detector parts
But when will the results of this project
begin to filter? Physics simulation studies that
have been under progress over the last few
years indicate that scientists will need at least
another five years of data accumulation before
they get the first results. Even after the data is
collated, it is estimated it will take at least 15
years in all. Precious time has already been lost
and those involved in the project believe that
science will be the biggest loser if this endeavor does not get off the ground. IL

TRANQUIL WATERS
(Above)
Environmentalists are
worried that reservoirs in
the vicinity like Periyar
Lake will be affected by
the project

INDIA LEGAL September 15, 2015

57

ENVIRONMENT/ Clearances

Open Sesame for Projects


Ignoring environmental
concerns, the
government has given
the green light for
infrastructure, mining
and industrial projects
By Dinesh C Sharma

HE Modi government is in an overdrive on the environment clearance


front. While on the one hand, it has
effectively silenced dissenting voices
like Greenpeace, on the other, procedures for green clearances have been put on fast
track. The Ministry of Environment, Forests and
Climate Change (MoEFCC ) has virtually turned
into a green channel for industrial, mining, infrastructure and other projects. Rules and regulations
are being bent and reinterpreted, expert advice overlooked and court orders being flouted in order to
clear projects. Procedures for green clearances for

DEATH TRAP
The existing broad gauge
railway track in Mahananda
Wildlife Sanctuary in Assam
poses a big danger to the
elephant population

railnews.com

58

September 15, 2015

Anil Shakya

any project, which constitute environment,


forest and wildlife, have been diluted in the
name of ease of doing business while ignoring serious environmental concerns.
The regulatory mechanisms for these
clearancesForest Advisory Committee (for
forest clearance), expert appraisal committees (for environmental clearance) and
National Board for Wildlife (NBWL, for
wildlife clearances)have been severely
undermined in the past one year.
ACTS VIOLATED
The latest example of this trend is the reported decision of the ministry to allow diversion
of forest land around protected areas without
waiting for approval of the Standing
Committee of NBWL (presided over by the
minister). Similarly, rules relating to public
hearings for projects and Environment
Impact Assessment (EIA) are being flouted.
All this, experts say, constitutes violation of
different provisions of the Environment
Protection Act, Wildlife Protection Act and
orders of the Supreme Court in various cases.
The MoEFCC is trying to push forest
clearances in several ways, bypassing necessary due diligence and application of mind
with involvement of independent members,

says Himanshu Thakkar, convener of the


South Asia Network on Dams, Rivers and
People. The Forest Advisory Committee was
reconstituted soon after the NDA government came to power and some of the independent members were removed.
This change has meant that projects that
were rejected earlier on various grounds are
being cleared. The 3,000 MW Dibang MultiPurpose Project in Arunachal Pradesh is a
case in point, according to Thakkar. The
project entails clearance of over 4,700
hectares of biodiversity-rich forest area
which is home to several key wildlife and
plant species. Despite severe environmental
impact of this project and inadequacies
pointed out in the EIA, the project was
approved in September 2014.
In July 2014, the NBWL was reconstituted by flouting the law that governs its functioning. Clause (e) of the Wildlife Protection
Amendment Act, 2002, stipulates that the
Board must have five representatives from
non-governmental organizations. However,
the notification dated July 22, 2014,
mentions a nominee from the Gandhinagarbased Gujarat Ecological Education and
Research (GEER) Foundation as non-official
member. GEER is not an NGO but an

DEVELOPMENT
TOLL
(Above) The
centers eco-sensitive
zone notification in
mid-August
stipulates only a
100m buffer zone
around the Okhla
bird sanctuary

Most glaring
was clearance
granted to a
highway project
(passing through
Karnala bird
sanctuary in
Maharashtra),
which was
rejected by
NBWL twice in
the past.

INDIA LEGAL September 15, 2015

59

ENVIRONMENT/ Clearances

UNQUIET FLOWS
THE RIVER
(Above) Locals
protests against the
construction of Dibang
Multi-purpose Project
in Arunachal Pradesh;
(right) Dibang River
on which the dam
will be built

The June 2015


meeting of the
Standing
Committee
discussed 40
new projects,
cleared 23 of
them and
rejected none.
60

September 15, 2015

organization that was floated by the Forests


and Environment Department of the government of Gujarat.
CLEARING HOUSE
Similarly, Clause (f ) of the Wildlife
(Protection) Act requires ten persons to be
nominated by the central government from
amongst eminent conservationists, ecologists
and environmentalists, but just two experts
have been nominated. One of the non-official
expert members is a former conservator of
forests from Gujarat. The Board has been
discharging its work through the Standing

Committee chaired by the environment minister, and constituted under Section 5(A) of
the Wildlife Protection Act. A review of its
functioning in the past one year shows that it
has become a clearing house for projects. The
Committees mandate under the law is to
closely examine projects proposed to be sited
inside or in proximity of protected areas.
The Standing Committees last meeting
was held on June 2, 2015. A review of the
minutes of this meeting, conducted by the
EIA Resource and Response Centre (EIARRC), shows a serious lack of deliberation
and deviation from its mandate. The com-

UNI

mittee cleared projects that were rejected by


the previous NBWL, granted clearances to
those for which site inspections were not
done, approved those located inside critical
elephant corridors, ordered site inspections
after projects were approved and displayed
indulgent attitude towards non-compliant
project proponents.
The June meeting discussed 40 new projects, cleared 23 of them and rejected none.
Most glaring was clearance granted to a
highway project (passing through Karnala
bird sanctuary in Maharashtra), which was
rejected by NBWL twice in the past and was
opposed by the states wildlife warden on the
ground that an alternate route was available.
Three projects in critical elephant corridors
were also cleared, including a railway line
from New Jalpaiguri to Sevoke cutting across
the Mahananda Wildlife sanctuary and
involving clearance of 86.6 ha of forest land.
The sanctuary is in a region that supports a
large number of elephants. An existing broad
gauge line has led to some 40 elephants
being killed in the last eight years. Field
inspection report of experts for this project
has not been made public.
SKEWED PERSPECTIVE
The standing committee of NBWL seems to
be functioning more as a stamping house for

clearances rather than discharging its duties,


the EIARRC review has noted. The attitude
of the Board seems to be skewed towards
project proponents over their mandate to
assess proposals in strict conformity with
Section 29 or Sub-section 6 of Section 35 of
the Wildlife Protection Act.
The standing committee considered over
a dozen road proposals in its meeting on
August 18, 2015, and virtually recommended
all of them. Three of these new road projects
are within protected areasone in
Kedarnath Musk Deer Wildlife Sanctuary in
Uttarakhand and two in Kaimur Wildlife
Sanctuary in Uttar Pradesh.
Thakkar points out that though the
reconstitution of NBWL has been challenged
in the Supreme Court for being in violation of
the law and the court has given a stay,
MoEFCC has been bypassing it and carrying
forward work with the non-representative
standing committee. The way the government is demarcating the boundaries of ecosensitive zones around protected areas is not
based on actual assessment of needs of protected areas, as it happened recently in the
case of the Okhla bird sanctuary and earlier,
in the case of many other protected areas,
says Thakkar.
While project proponents would be
rejoicing, is it achhe din for wildlife? IL

NEED FOR A COSTBENEFIT ANALYSIS


(Above, left) The
Karnala Bird
Sanctuary will be hit
by clearance given to
a highway; (above)
stone crushing
activity near forest
area at Nalthi in
Jammu and Kashmir
is threatening
local ecology

INDIA LEGAL September 15, 2015

61

GLOBAL TRENDS/ China

The Price

As China becomes
increasingly globalized, is it
also becoming more open
and transparent in managing
the internal turmoil, dissent
and the uncertainties the
currency is facing?
By Rodger Baker

AST week was an eventful


one for China. First, the
Peoples Bank of China
shocked the financial world
when it cut the yuans reference rate against the US
dollar by nearly 2 percent,
leading to a greater than 2 percent drop in
the value of the yuan in offshore trading.
The decline triggered a frenzy of speculation, including some expectations that the
Chinese move would trigger a race to the bot-

OVERAWING
GROWTH
Despite controls,
Chinese business has
attracted global
investments

62

September 15, 2015

of Change
tom for Asian currencies. Beijing said the
adjustment was designed to fix distortions
between the trading rate of the yuan and the
rate it should have been at according to speculation, and that subsequent large shifts
were unlikely. The International Monetary
Fund, however, noted that the move could
lead to a freer floating yuan something the
IMF has asked of Beijing before the organization considers including the yuan in its
Special Drawing Rights basket of currencies.
In comments made on the sidelines of its
annual report on the Chinese economy,
released later in the week, the IMF also noted
that the yuan was not undervalued, despite
the decline.
Also last week, Chinese state media issued
a warning to retired officials to stay out of
politics and not misuse their former networks and prestige. The warning followed
reports in state media suggesting that the
annual unofficial gathering of current and
former Party officials at Beidaihe was canceled and would not serve as a policy-making
venue in the future. The reports noted that
Party officials had already held several additional sessions in Beijing and that decisions
were being made in the open, not in some
secretive gathering of Party elders.
Other reports circulating in Chinese
media warned that former Party and military
officials were involved in real estate speculation along with other economic mismanagement and needed to stop.
Finally, last week China dealt with one of
its worst industrial accidents in yearsa
series of explosions at a chemical short-term
storage facility in the busy port city of
Tianjin. More than 100 people were killed in
the explosions and aftermath, prompting the

UNI

government to launch an investigation into


illegal storage and improper safety procedures at that and other facilities around the
country. Citizens have begun small-scale
demonstrations in Tianjin to demand government reparations for damages as a result
of the blast. In response, Beijing stepped up
its media campaign against rumors, using
state media to remind the public that the
government publicly charged a Politburo
standing committee member with corruption, so the public can trust the government
to be open and not hide a conspiracy surrounding the Tianjin blast.

STARING AT
UNCERTAINTY?
A shopper at a discount
store in January this
year, when Chinese
economy registered 7.3
percent growth, its
weakest since the
global financial crisis

f there is a common theme running


through these events, it is the way
Beijing is emphasizing its openness in
decision-making, in reporting and in
explaining its actions. This is not the China
of the past that tried to hide the truths of
major natural or man-made disasters
INDIA LEGAL September 15, 2015

63

GLOBAL TRENDS/ China

is no longer effective at managing


China, much less shifting it in a
new direction.

THEY SHAPED THE


DESTINY
(Clockwise, from top)
Mao Zedong, Deng
Xiaoping and Xi Jinping
have strongly influenced
the countrys economic
and political direction

64

September 15, 2015

from its citizens. It is not the


China that operated by secret
agreements made only after a
consensus of Party elders, or the
China that tried to protect Party
officials at the expense of the
public. Nor is it the China of
tight currency controls, amid
fears that the vagaries of global
markets could affect Chinas
economic regulation.
Or at least that is the message Beijing is trying to send. It
is a message perhaps meant
more for domestic than international consumption, but one
that recognizes that neither
abroad nor at home is there a lot
of trust in the Chinese
Communist Party or the government to pursue a transparent
policy. The taint of corruption,
collusion and nepotism remains strong and
is perhaps even reinforced by the breadth
and depth of the ongoing anti-corruption
campaign.
The reality is that China is in the midst of
what may be its most serious crisis since the
days of Deng Xiaoping. And the model of
government and economy Deng put in place

s China emerged from the


chaos of the Maoist era,
Deng initiated three basic
policies for Chinas future growth
and development, starting around
the early 1980s. First, allow the
economy more localized freedom,
accepting that some areas would
grow faster than others but that in
the long run the rising tide would
lift all boats. Second, prevent any
single individual from truly dominating the Chinese political system.
No longer could a figure like Mao
Zedong exert so much personal
influence that the entire country
could be thrown into economic and
social upheaval. Instead, Chinas
leaders would be locked into a consensusdriven model that limited any individual
source of power and eliminated factions in
favor of widespread networks of influence
that overlapped so much they could not be
truly divisive. And finally, walk softly internationally, be ruthless in the appearance of a
non-interference policy and avoid showing
any military strength abroad.
This latter point was intended to give
China time to solidify internal economic and
social cohesion and strength while avoiding
distraction or inviting undue military attention from its neighbors or the United States.
In retrospect, Dengs model worked
exceptionally well for China, at least on the
surface. While the Soviet Union collapsed,
the Communist Party of China held together,
even after Beijings mismanagement of
Tiananmen Square.
Although at times slow to respond or initiate proactive change, Chinas leaders managed the countrys rapid economic growth in
a way that avoided extreme social or political
destabilization. The Party managed not only
the leadership transitions set in motion by
Deng, but also, amid intra-Party scandal, the
latest transition to Xi Jinping. Chinas leaders even managed the impact of the global
economic slowdown and appear capable of

maintaining order even as economic growth


rates slow considerably.
But the relative calmness on the surface
belies disturbing deeper currents. The dark
secret of consensus rule was that, while
appearing to provide stability, by the late
2000s it was doing more to perpetuate
underlying structural problems that could
delay or even derail actual reforms or economic evolution. The lack of radical shifts
and turns, the avoidance of major recessions
and the ability to defer significant but potentially destabilizing reforms made China look
like an unstoppable juggernaut. Chinas
economy climbed past Japans and seemed
destined to surpass the US economy. And if
economic strength translated into total
national strength, then China was emerging
as a significant global power.
Beijing even began breaking from Dengs
cautions on overt military power and started
amore assertive foray into the East and South
China seas, both because of a perceived need
to protect its increasingly important sea
lanes carrying natural resources and exports
and because it was feeling
more powerful and capable
and wanted to act on those
strengths.
However, all economies
are cyclical. As they grow
through different stages,
the deadwood needs to be
trimmed and funding
provided for the new shoots. Recessions, slowdowns,
bankruptcies and sectorial
collapses are all part of the
natural economic process,
even if they are disruptive
in the short term.
As China claims to be
climbing the value chain in
manufacturing and exports,
it is not simultaneously
trimming away older components of the economy or
effectively weaning itself
from the stability of large
state companies that are
disproportionately locking
up available capital com-

pared with total employment. Parochial interests by local and provincial governments
themselves keen to avoid any sense of instabilityhave left massive redundancies intact
across Chinas manufacturing sectors, particularly in heavy industries, the backbone of
early Chinese economic growth.
Consensus politics allowed China to grow,
but not in a healthy mannerand the global
economy is no longer giving China the freedom to just keep pouring on the fertilizer and
hope no one notices the rot spreading
through the trunk and branches.

he leadership transition to Xi in 2012


was also not nearly as smooth as it
first appeared. It occurred amid the
Bo Xilai scandal, in which it appeared the
former Chongqing Party Secretary was making a bid not only to reshape the direction of
Chinese politics but also to usurp Xis rise to
central Party and state leadership. What has
emerged amid the ongoing anti-corruption
campaign is that the challenge was much
more serious than it may have appeared,

The economic
policies are
moving toward
liberalization, but
the political and
social policies are
moving toward
autocracy.

DREADING
DEMOCRACY
Protestors in Hong Kong
demand universal
suffrage from Chinese
leadership on July 1, 2014,
marking the 17th anniversary
of the territorys handover
to China

UNI

INDIA LEGAL September 15, 2015

65

GLOBAL TRENDS/ China

including an alleged assassination plot


against Xi.
The recent pronouncements regarding former Party leaders and officials
staying out of politics suggests that
challenges to Xis position are still
emerging. Xis decision to build a
national security council and economic
affairs advisory body, to which he
belongs, has aroused opposition from
former officials used to playing a role
in shaping policy.
Publicly canceling the unofficial
Beidaihe summit was an overt strike
against former officials. The consolidation campaign continues.
While China faces some of its
toughest economic challenges, and
after it has stepped out into the South
China Sea and international military
affairs in a way it cannot easily pull
back on, it is also contending with
internal dissent and intra-Party fight-

INFORMATION
DROWNED
There was widespread
anger over the rescue
work of a capsized boat
in Yangtze River in June
which was shrouded
in secrecy

Photos: UNI

The fear is
that significant
economic
reform without
tight political
control would
lead to a
repeat of the
Soviet
experience.

RISING
CORRUPTION
The recent explosion
in a chemical facility
in Tianjin points to
widespread
corruption

66

September 15, 2015

ing. Xis consolidation


drive, closely linked to the
anti-corruption
campaign, is all about tightening the reins of control to
allow more rapid policy
adjustments, force macropolicies on localities and
accelerate the Party and
states response time to
changing circumstances.
But
that
challenges
decades of tradition and
entrenched power and
interests. It also creates a
contradiction: The economic policies are moving
toward liberalization, but
the political and social
policies
are
moving
toward autocracy.

o manage the next


phase of Chinas economic opening
and reformsomething that changes
in the global economy and decades of internal ossification are forcing upon Beijing
Xi is simultaneously cracking down on
media, information, social freedoms and the
Party itself. The fear is that significant economic reform without tight political control
would lead to a repeat of the Soviet experience: the collapse of the Party and perhaps
even the state.
Each event, each headline, should be
assessed in the context of this internal crisis.
The currency dipan important step in liberalizing yuan trading, gaining a role in the
Special Drawing Rights basket and continuing Chinas path toward yuan globalization
(freeing the country at least a little from the
dominance of the US dollar)has auxiliary
risks, not least of which is that a freer currency can move in directions far from those the
government would like to see. The explosion
in Tianjin is reinforcing the fears of rampant
mismanagement and corruption. It has
sparked a new round of conspiracy speculation and is placing the government in a position where it must deal with protesters in a
major city as well as foreign investors and
tradersagain raising uncomfortable ques-

tions about safety and security in China. The


warnings against retired officials interfering
in politics may be more than just public relations attempts to highlight some newfound
transparency.
This is not to say China is on the verge of
collapse, that the government and Party is
about to fracture along internecine battle
lines, or that economic reform is simply
impossible in the face of entrenched interests. But none of these are out of the question. China has entered a stage of the uncertain. The transition to an internal demanddriven economy will not happen smoothly,
nor will it happen overnight. The reduction
in exports and the drain on investment is
already under way. And with all of these
issues sitting squarely on his shoulders, Xi is
preparing for his September visit to the
United States, where the litany of concerns
about China expands daily.
The transitory period is the most chaotic,
the most fragile, and that is where China sits
right now. IL

FLEXING MUSCLE,
GLOBALLY
Soldiers of Chinas
Peoples Liberation
Army prepare for the
70th anniversary of the
end of World War-II
on August 22, 2015,
an event which
was attended by
10 countries

Courtesy Stratfor
(Rodger Baker leads Stratfors analysis of
Asia and South Asia and has been a Stratfor
analyst for the last 18 years)
INDIA LEGAL September 15, 2015

67

GLOBALTRENDS/ China/ India Impact

Despite the bloodbath in


the global markets recently,
experts say India is in a
better position than other
countries. This is due to
its sturdier economic
fundamentals and tight
fiscal discipline
By Shantanu Guha Ray

High on
Hope

Photos: UNI

68

September 15, 2015

or decades, the towering


edifice of the Bombay Stock
Exchange stood as a beacon
of hope for Indias investors
and the nations financial
fortunes. But recently,
as India unwillingly participated in a devastating rout of global markets,
the very investorsnow poorer by `7,00,000
crorewondered how much worse it would
become.
But the bloodbath was not an isolated
incident. The global sell-off did not just
include equities, but currencies and commodities as well. The BSE Sensex plunged
5.9 percent on August 24 (1,625 points),
making it the largest single-day decline since
January 7, 2009. The Sensex had gone on to
shed 64 percent in just nine months during
that period, and many stocks lost over 90
percent of their value.
MARKET MAYHEM
At BSE, out of 2,835 companies that traded
on August 24, 2,477 declined, while only
303 managed to stay afloat. In this turmoil,
the Indian rupee also fell to its lowest in two
years at 66.74 to a dollar. A look at the sectorwise indices showed how widespread the
losses were. All 12 sub-indices of the BSE
closed deep in the red. Banking, auto,
healthcare and capital goods particularly got
a hammering.
For quite some time now, markets have
largely reflected an interesting global economic picture, with most (Indias included)
remaining within a relatively narrow, sideways range before this crash. So it was
expected that Indian markets would be
impacted along with those in other parts of
the world. Hemen Kapadia, a Mumbai-based
market analyst, said the only markets to
decline sharply for quite some time, say six
months, were those exporting oil and other
commodities, including Australia, Canada,
Brazil, Norway and the Middle East.
So where does India stand post the catastrophe? Assurances from finance minister

TAKING STOCK
(Facing page) Worried onlookers at the BSE

The Indian markets are in a downtrend, with the


Sensexs closing high, dating back to January
29, 2015, at 29,682. There is no immediate
positive trigger for stocks either.
Arun Jaitley and Reserve Bank of India
governor Raghuram Rajan notwithstanding,
Kapadia said the only negative news
for India was a lowering of its growth forecast for 2015 from 7.5 percent to 7 percent
by the rating agency, Moodys. But that did
not impact the markets, nor did it contribute
significantly to the crash.
But still, experts claim it would be wrong
to think Indian markets are insulated from
world financial downturns. Globally, the year
saw mixed economic signals, with
Washington recording a modest growth, and
Europe perking up before events in Greece
dominated headlines. The biggest concern
had been the persistent decline in oil and
other commodity prices, as they could be
suggesting a fall in demand rather than an
increase in supply.
CALM GOVERNOR
At a seminar in Delhi, Rajan argued this very
point, saying Indias impact would be less,
rather lesser. By saying so, he tried to calm
the currency market vis--vis the rupee. I'll
say that relative to other countries, India is in
a good position with strengthening growth, a
low current account deficit and narrowing
fiscal deficit, moderating inflation, low shortterm foreign currency liabilities and sizeable
exchange reserves, said Rajan.
Rajan said the global equilibrium was disrupted by China, whose stock market unexpectedly went into a bubble at the beginning
of the year. The bubble eventually burst in
June, setting off a chain of events that many
experts claim was the most likely cause of the
global mayhem.
Rajan was joined by Jaitley who said the
factors responsible for the markets were
entirely external and there wasnt a single
domestic factor. The turbulence is transient
and temporary in nature, the markets will
settle down once the turbulence is over.
Both were clear that it was China that
INDIA LEGAL September 15, 2015

69

GLOBALTRENDS/ China/ India Impact

Relative to other countries, India is in a good


position with strengthening growth, a low
current account deficit and narrowing
fiscal deficit, moderating inflation... and
sizeable exchange reserves.
Raghuram Rajan, RBI governor
triggered the crisis.
Initially, Beijing took dramatic measures
to curb the decline, and appeared to have
succeeded at first. Then suddenly, experts
say, the Chinese government devalued the
yuan. The decision was ostensibly to pave the
path for the inclusion of yuan in the SDR
basket of the International Monetary Fund.
Beijing was clear about its demand. It wanted yuan to be eventually a market-driven
currency. After all, the Chinese economy
badly needed a boost for its fledgling exports.
CHAIN REACTION
But there was a chain impact. Inevitably,
other emerging markets following China
including Indiasbrought their currencies
down too. The fall in currencies triggered off
a decline in most stock markets and the subsequent disequilibrium led to the global rout.
International investors are pulling-back
funds from emerging markets like China,
causing a slowdown, impacting US and
European-based companies," Anand James,
co-head, technical research, Geojit BNP
Paribas, said in a telephonic interview.
So what happens now? The future is quite

70

September 15, 2015

uncertain and much will depend on whether


economies across the world continue to
recover or whether the current turmoil in
currencies and commodities would eventually translate into further downturns.
India is not immune to global downturns,
as was made painfully evident in 2008-09.
Mandarins of the finance ministry would
urgently need to accelerate the pace of
reforms if the stock market is to stabilize
without further damage.
The Indian markets are in a downtrend
now, with the Sensexs closing high, dating
back to January 29, 2015, at 29,682. And if
Moodys forecast for Indias growth turns out
to be accurate, there is no immediate positive
trigger for stocks either. No one would hazard a guess as to what would be the extent of
decline; much will depend on global economic growth and Indian economic reforms.
But there are some who still have hope.
BETTER POSITION
Still, analysts believe Indian markets could
be hurt less given its sturdier economic fundamentals, including a narrow current
account deficit and New Delhis commitment
to maintain tight discipline over its finances.
We are facing a global market meltdown but
the economic parameters would remain relatively stronger for India, Deven Choksey,
managing director at KR Choksey Securities,
said in a telephonic interview.
The Indian economy is integrated with
the rest of the world, it will benefit from
growing markets but will also import global
economic troubles, he added.
Will India be at risk if global conditions
worsen? There have been four instances
in the past three-and-a-half decades when
New Delhi has grown more slowly than the
overall global economy: 1984, 1991, 1997 and
2000.
Like South Korea did it in the 70s, India
has been able to manage its economic
momentum even when the rest of world is in
slowdown mode. But then, a lotclaim
expertsdepends on performance of the
monsoon or domestic policy responses. As
the ebullient Niranjan Rajadhyaksa wrote in
the Mint: Past experience shows us it is
tough, but not impossible. IL

NO I
DULAT
HOLDS
BARRED

THERueS
SISupNGremLEe CouMO
rt to the rescen
Karat
wom - Brinda

TEESTAS BAIL:
Whats the political significance?

16

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kitbag 30

BIKRAM
VOHRA:
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in India 42

Shantanu Guha
Malegaon prose Ray interviews
cutor Rohini Salia
n
August 15,

2015

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CRIME/ Surveillance Tools/ United States

In Disuse, FBIs
Database on Rapists
For roughly 30 years the FBI has virtually ignored a system meant to help
cops track the behavioral patterns of violent criminals
by T Christian Miller

ore than 30
years ago, the
Federal Bureau
of Investigation
launched a revolutionary computer system in a
bomb shelter two floors beneath the cafeteria of its national academy. Dubbed the
Violent Criminal Apprehension Program, or
ViCAP, it was a database designed to help
catch the nations most violent offenders by
linking together unsolved crimes. A serial
rapist wielding a favorite knife in one attack
might be identified when he used the same
knife elsewhere.
The system was rooted in the belief that
some criminals methods were unique
enough to serve as a kind of behavioral
DNAallowing identification based on how
a person acted, rather than their genetic
make-up. Equally important was the idea
that local law enforcement agencies needed
a way to better communicate with each
other. Savvy killers had attacked in different
jurisdictions to exploit gaping holes in
police cooperation.
ViCAPs implementation could mean
the prevention of countless murders and the
prompt apprehension of violent criminals,
the late Senator Arlen Specter wrote in a
letter to the Justice Department endorsing
the programs creation.

72

September 15, 2015

COMMON PATTERN
Low Adam Lorey Lane
was among the few
criminals nabbed due to
the ViCAP system

n the years since ViCAP was first


conceived, data-mining has grown
vastly more sophisticated, and
computing power has become cheaper
and more readily available. Corporations can link the food you purchase,
the clothes you buy, and the websites
you browse. The FBI can parse your
emails, cellphone records and airline
itineraries. In a world where everything is measured, data is ubiquitous
from the number of pieces of candy
that a Marine hands out on patrol in
Kandahar, to your heart rate as you
walk up the stairs at work.
Thats whats striking about ViCAP
today: the paucity of information it
contains. Only about 1,400 police
agencies in the US, out of roughly
18,000, participate in the system. The
database receives reports from far less
than 1 percent of the violent crimes
committed annually.
Its not even clear how many crimes
the database has helped solve. The FBI
does not release any figures. A review
in the 1990s found it had linked only
33 crimes in 12 years.
Canadian authorities built on the
original ViCAP framework to develop a
modern and sophisticated system
capable of identifying patterns and
linking crimes. It has proven particularly successful at analyzing sexualassault cases. But three decades and an
estimated $30 million later, the FBIs
system remains stuck in the past, the
John Henry of data mining. ViCAP was
supposed to revolutionize American
law enforcement. That revolution
never came.
Few law enforcement officials dispute the potential of a system like
ViCAP to help solve crimes. But the
FBI has never delivered on its promise.
In an agency with an $8.2 billion yearly
budget, ViCAP receives around
$800,000 a year to keep the system
going. The ViCAP program has a staff
of 12. Travel and training have been cut
back in recent years. Last year, the program provided analytical assistance to

local cops just 220 times. As a result,


the program has done little to close the
gap that prompted Congress to create
it. Police agencies still dont talk to each
other on many occasions. Killers and
rapists continue to escape arrest by
exploiting that weakness.
The need is vital, said Ritchie
Martinez, the former president of the
International Association of Law
Enforcement Intelligence Analysts.
But ViCAP is not filling it.
Local cops say the system is confusing and cumbersome. Entering a single
case into the database can take an hour
and hitswhere an unsolved crime is

To get information
into the database,
local cops and
deputies had to fill
out by hand a form
with 189 questions.
Only a few hundred
cases a year were
being entered.
connected to a prior incidentare rare.
False positives are common. Many also
said the FBI does little to teach cops
how to use the system. Training has
dropped from a high of about 5,500
officers in 2012 to 1,200 last year.
We dont really use ViCAP, said
Jeff Jensen, a criminal analyst for the
Phoenix Police Department with 15
years of experience. It really is quite
a chore.
The FBI has contributed to the confusion by misrepresenting the system.
On its website, the FBI says cases in its
database are continually compared
for matches as new cases are entered.
But in an interview, program officials
said that does not happen. We have

plans for that in the future, said


Nathan Graham, a crime analyst for
the program. The agency said it would
update the information on its website.

he agencys indifference to the


database is particularly noteworthy at a time when emerging
research suggests that such a tool could
be especially useful in rape investigations. For years, politicians and
womens advocates have focused on
testing the DNA evidence in rape kits,
which are administered to sexual
assault victims after an attack. Such
evidence can be compared against a
nationwide database of DNA samples
to find possible suspects. Backlogs
at police departments across the
country have left tens of thousands of
kits untested.
But DNA is collected in only about
half of rape cases, according to recent
studies. A nationwide clearinghouse of
the unique behaviors, methods, or
marks of rapists could help solve those
cases lacking genetic evidence, criminal experts said. Other research has
shown that rapists are far more likely
than killers to be serial offenders.
Different studies have found that
between one-fourth to two-thirds of
rapists have committed multiple sexual
assaults. Only about 1 percent of murderers are considered serial killers.
Studies have questioned the
assumptions behind behavioral analysis tools like ViCAP. Violent criminals
dont always commit attacks the same
way and different analysts can have
remarkably different interpretations
on whether crimes are linked. And
a system that looks for criminal
suspects on the basis of how a person
acts is bound to raise alarms about
Orwellian overreach.
But many cops say any help is
welcome in the difficult task of solving
crimes like rape. A recent investigation by ProPublica and The New
Orleans Advocate found that police in
four states repeatedly missed
INDIA LEGAL September 15, 2015

73

CRIME/ Surveillance Tools/ United States

chances to arrest the former NFL football star and convicted serial rapist
Darren Sharper after failing to contact
each other.
Were always looking for tools, said
Joanne Archambault, the director of
End Violence Against Women International, one of the leading police
training organizations for the investigation of sexual assaults. I just dont
think ViCAP was ever promoted
enough as being one of them.

he US need only look north for


an example of how such a system can play an important role
in solving crimes. Not long after ViCAP
was developed in the United States,
Canadian law enforcement officials
used it as a model to build their own
tool, known as the Violent Criminal
Linkage Analysis System, or ViCLAS.
Today, the Royal Canadian Mounted
Police maintains a database containing
more than 5,00,000 criminal case profiles. The agency credits it with linking
together some 7,000 unsolved crimes
since 1995though not all of those
linkages resulted in an arrest.
If the FBI collected information as
consistently as the Mounties, its database would contain more than 4.4 million cases, based on the greater U.S.
population. Instead, the FBI has about
89,000 cases on file.
Over the years, Canada has poured
funding and staff into its program,
resulting in a powerful analytical tool,
said Sgt Tony Lawlor, a senior ViCLAS
analyst. One critical difference: in the
US, reporting to the system is largely
voluntary. In Canada, legislators have
made it mandatory.
Cops on the street still grumble
about the system, which resembles the
American version in the time and effort
to complete. But it has information
which assists police officers, which is
catching bad guys, Lawlor said. When
police realize theres a value associated
with it, they use it.
The ViCAP program eventually

74

September 15, 2015

emerged from the fallout shelter where


it began. It set up shop in an unmarked
two-story brick office building in a
Virginia business park surrounded by a
printers shop, a dental practice and a
Baptist church.
In a lengthy interview there, program officials offered a PowerPoint
presentation with case studies of three
serial killers who were captured in the
past eight years with the help of the
ViCAP program. They called the system successful.
We do as good a job as we possibly

Violent criminals
dont always attack
the same way. A
system that looks for
criminal suspects on
the basis of how a
person acts is
bound to raise
alarms about
Orwellian overreach.
can given our resources and limitations, said Timothy Burke, a whitehaired, 29-year agency veteran who
is the program manager for ViCAP.
As with anything, we could always do
better.

ierce Brooks was the father of


the system. A legendary cop, he
had a square jaw, high forehead
and dead serious eyes. During 20 years
with the Los Angeles Police Department, he helped send 10 men to death
row. He inspired the fictional Sgt Joe
Friday character in Dragnet. And he
became famous for tracking down a
pair of cop killers, a hunt chronicled in
Joseph Wambaughs 1973 non-fiction
bestseller, The Onion Field.

Brooks imagination was admired,


but his thoroughness was legend,
Wambaugh wrote.
In the late 1950s, Brooks was investigating two murder cases. In each, a
female model had been raped, slain
and then trussed in rope in a manner
that suggested skill with binding.
Brooks intuited that the killer might
commit other murders. For the next
year, he leafed through out-of-town
newspapers at a local library. When he
read a story about a man arrested while
trying to use rope to kidnap a woman,
Brooks put the cases together. The
man, Harvey Glatman, was sentenced
to death, and executed a year later.
The experience convinced Brooks
that serial killers often had signaturesdistinct ways of acting that
could help identify them much like a
fingerprint. An early adopter of datadriven policing, Brooks realized that a
computer database could be populated
with details of unsolved murder cases
from across the country, then searched
for behavioral matches.
After Brooks spent years lobbying
for such a system, Congress took interest. In July 1983, Brooks told a rapt
Senate Judiciary Committee audience
about serial killer Ted Bundy, who confessed to killing 30 women in seven
states. The ViCAP system could have
prevented many of those deaths, he
said. ViCAP, when implemented,
would preclude the age-old, but still
continuing problem of critically important information being missed, overlooked, or delayed when several police
agencies, hundreds or even thousands
of miles apart, are involved, Brooks
said in a written statement.
By the end of the hearing, Brooks
had a letter from the committee
requesting $1 million for the program.
Although the program was endorsed by
then-FBI director William Webster,
agency managers werent particularly
thrilled with the new idea.
The FBI grafted ViCAP into a new
operationthe Behavioral Analysis

CRIME TRAIL IN
CANADA
Daryn Johnsrude
was killed at the age
of 16 by serial killer
Clifford Olson in
1981. The killer was
nabbed thanks to
Canadas effective
ViCLAS program

Unit. The profilers, as they were


known, were later made famous by
Thomas Harris The Silence of the
Lambs as brainy crime fighters who
combined street smarts and psychology to nab the worst criminals. But at
the time, the unproven unit was seen as
a kind of skunk works.
The FBI housed it in the former
fallout shelterten times deeper than
dead people as one agent later
recalled. It was a warren of rooms, dark
and dank. Others referred to the oddball collection of psychologists, cops
and administrators as rejects of the
FBI or the leper colony, according to
Into the Minds of Madmen, a non-fiction account of the unit. Still, the new
program captured the imagination of
some. Murder mystery author Michael
Newton penned a series of novels
which, while not quite bestsellers, featured the heroic exploits of two ViCAP

agents accustomed to the grisly face of


death and grueling hours on a job that
has no end.

rooks was the first manager for


the ViCAP program. The
agency purchased what was
then the Cadillac of computersa
VAX
11/785
nicknamed
the
Superstar. It filled up much of the
room in the basement headquarters
and had 512KB of memory. (An average household computer today has
about 4,000 times more memory.)
Brooks was ecstatic when the system
finally came online on May 29, 1985,
according to the account. His enthusiasm was not to last.
To get information into the database, local cops and deputies had to fill
out by hand a form with 189 questions.
The booklet was then sent to Quantico,
where analysts hand-coded the infor-

mation into the computer. It was a


laborious process that flummoxed even
Brooks. He had a hard time filling out
the booklet, according to one
accountas did officers in the field.
Only a few hundred cases a year were
being entered.
Enter Patricia Cornwell, the bestselling crime author, famous for her
novels featuring Dr Kay Scarpetta,
medical examiner. In the early 1990s,
she visited the subterranean unit during a tour of the academy. She recalled
being distinctly unimpressed. An analyst told her that ViCAP didnt contain
much information. The police werent
sending in many cases.
I remember walking into a room at
the FBI and there was one PC on a
desk, said Cornwell, who had once
worked as a computer analyst. That
was ViCAP. A senior FBI official had
told Cornwell that the academy, of
INDIA LEGAL September 15, 2015

75

CRIME/ Surveillance Tools/ United States

which ViCAP was a small


part, was in a financial
crunch. She contacted Utah
Senator Orrin Hatch, a friend,
and told him of the academys
troubles. In 1993, Hatch shepherded a measure through
Congress to put more money
into
the
academyand
ViCAP.
As the money made its way
to the bomb shelter, the FBI
conducted a business review.
It found that local cops were
sending the agency only 3 to 7
percent of homicides nationwide. The miniscule staff
about 10 peoplecould not
even handle that load, and
was not entering the cases on
a timely basis. Cops on the
street saw the system as a
black hole, according to Cold
Case Homicide, a criminal
investigation handbook.
The FBI decided to kill the
program. They picked Art
Meister to be the hit man.
Meister spent much of his
career at the FBI busting
organized crime, beginning at
the New Jersey field office. He
rose through the ranks to
supervise a national squad of
more than 30 agents, investigating
mob activities at home and overseas.
He had no real experience with behavioral analysis or databases. But he did
have an analytical approach that his
superiors admired. They gave him
instructions: If it doesnt work, do
away with it. Kill it, recalled Meister,
now a security consultant with the
Halle Barry Group.
Meister heard plenty of complaints.
At one conference of police officers
from across the country, a cop pulled
Meister aside to talk about the program. Ive used it and all it gives me is
bullshit leads, the officer told him.
The general perception was by and
large that the program didnt work,

76

September 15, 2015

EULOGIZED IN FICTION
Novels by Michael Newton on
the exploits of two ViCAP
agents

Meister said.
But instead of killing ViCAP,
Meister became the systems unlikely
champion. Even with its small staff, the
program was connecting far-flung lawenforcement agencies. The 189 questions had been slimmed to 95making
it easier to fill out the form.
Meister used the new funding from
Hatchs bill to reach out to 10 large
jurisdictions to persuade them to
install terminals that could connect
with the database. By 1997, the system
was receiving 1,500 or so cases per
yeara record, though still a fraction
of the violent crimes committed.
Meister saw the potential for the
database to help solve sexual-assault

crimes. He pushed the


development of new questions specifically for sexual-assault cases. They
werent added to the system until after his departure in 2001. I felt it
would really pay off dividends, Meister said.
There are a lot more serial
rapists than serial killers.
But he found it difficult
to make headway. Top officials showed no real interest in the program. After
all, it was designed to help
local law enforcement, not
the agency. Meister called
ViCAP the furthest planet
from the sunthe last in
line to get funds from the
FBI. His efforts to improve
it were met with skepticism and bureaucratic politics. Thats what drove me
nuts, he said. By the time
he left, the program was
muddling along. ViCAP
never got the support that
it needs and deserves. Meister said.
Its unfortunate.

n July 13, 2007, at 4 in the


morning, a 15-year-old girl
was sleeping in her bedroom
in Chelmsford, a former factory town
in northeastern Massachusetts bisected by Interstate 495. She was startled
awake when a man dressed in black
with a ninja mask pressed his hand
against her face. He placed a knife to
her throat and told her If you make
any noise, Ill fucking kill you.
The girl screamed, rousing her
mother and father. The parents rushed
in, fighting with the man until they
subdued him. Adam Leroy Lane, a

truck driver from North Carolina, was


arrested. In his truck, Massachusetts
police found knives, cord and a DVD of
Hunting Humans, a 2002 horror film.
Analysts for ViCAP, which has a
special initiative to track killings along
the nations highways, determined that
the Massachusetts attack was similar to
an earlier murder that had been committed in New Jersey.
Acting on the tip, New Jersey state
police detectives interviewed Lane in
his jail cell. Lane confessed to killing
Monica Massaro, a 38-year-old woman, in her home in the town of
Bloomsburyjust a few blocks off
Interstate 78.
Lane, dubbed the Highway Killer,
was connected via DNA samples to a
killing and a violent attack in
Pennsylvania; both women lived near
interstates. Lane is now serving a life
sentence in Pennsylvania.
New Jersey State Police Detective
Geoff Noble said his case had been
stalled. But once ViCAP connected
Noble to Massachusetts police officers,
they provided him a receipt that placed
Lane at the truck stop in the small
town where Massaro was killed. And
when Noble confronted Lane, the killer
started talking. Under a state attorney
generals directive, all New Jersey law
enforcement agencies are supposed to
report serial crimes to ViCAP. The
information provided by ViCAP was
absolutely critical, Noble said.
Without ViCAP, that case may have
not ever been solved.
FBI officials said the case, one of
three success stories provided to
ProPublica, showed the critical role of
the database. (The other two: The case
of Israel Keyes, a murderer who committed suicide after his arrest in Alaska
in 2012 and has been linked to 11
killings; and that of Bruce Mendenhall,
a trucker now serving a life sentence in
Tennessee who was linked to the murder of four women in 2007.) Given
what we have, its a very successful program, Burke said.

But in a dozen interviews with current and former police investigators


and analysts across the country, most
said they had not heard of ViCAP, or
had seen little benefit from using it.
Among sex-crimes detectives, none
reported having been rewarded with a
result from the system.
Im not sending stuff off to ViCAP
because I dont even know what that
is, said Sgt Peter Mahuna of the
Portland, Oregon, Police Department.
I have never used ViCAP, said Sgt.
Elizabeth Donegan of Austin, Texas.
Were not trained on it. I dont know
what it entails of whether it would be
useful for us.

In the US, reporting


to the system is
largely voluntary. In
Canada, legislators
have made it
mandatory. All
Canadian law
enforcement
agencies now file
reports to the
system.
Even Joanne Archambault, the
director of the police training organization who sees the potential of ViCAP,
didnt use it when she ran the
sex-crimes unit at the San Diego Police
Department: In all the years I worked
these crimes, we never submitted
information to ViCAP, she said. As a
sex-crime supervisor, we invested time
in effort that had a payout.
Local authorities skepticism is
reflected in the FBIs statistics. In 2013,
police submitted 240 cases involving
sexual assault to the system. The FBI
recorded 79,770 forcible rapes that

year. Local agencies entered information on 232 homicides. The FBI


recorded 14,196 murders.
It's disappointing and embarrassing, said Greg Cooper, a retired FBI
agent who directed the ViCAP unit before becoming the police chief in Provo, Utah. The FBI has not adequately
marketed the program and its services.
And local law enforcement has not
been committed to participating.
Not all rapes or murders involved
serial offenders, of course. But with
ViCAP receiving information on only
about 0.5 percent of such violent
crimes, it struggles to identify those
that do.
Cops dont want to do more paperwork, said Jim Markey, a former
Phoenix police detective and now a
security consultant. Anytime you ask
for voluntary compliance, it wont be a
priority. Its not going to happen.

ut at some agencies where


ViCAP has been incorporated
into policing, commanders have
become staunch defenders of its utility.
Major JR Burton, the commander of
special investigations for the Hillsborough County Sheriff s Office in Tampa, Florida, said detectives at his agency are mandated to enter information
on violent crimes into the database.
I love ViCAP, said Burton, who
served on a board of local law enforcement officials that advises the FBI on
the system. Theres many cases where
you dont have DNA. How do you link
them together?
Burton said he understood the frustration that other police experience
when they get no results back from the
system. When pressed, Burton could
not cite any investigations in his jurisdiction that had benefitted from the
database. But he said the time and
effort to use the system was worth it. It
allows you to communicate across the
nation, whether serial homicide or
serial rapist, Burton said. Thats awesome in my book.
INDIA LEGAL September 15, 2015

77

CRIME/ Surveillance Tools/ United States

SUPPORT
AMONG
LAWMAKERS
(L-R) Two senators
who felt that a
database like
ViCAP was needed
were Orrih Hatch
of Utah and Arlen
Scepter of
Pennsylvania

FBI officials said they had taken


steps to address complaints. In July
2008, the program made the database
accessible via the Web. Police can now
enter their own searches, without having to rely on an FBI analyst, through
any computer with an Internet connection. The program has also whittled
down the number of questions.
Graham says he tells police that it
should take only about 30 minutes to
enter the details of a case.
I tell them if they can fill out their
taxes, they can fill out the ViCAP form,
Graham said.

n November 1980, children began


vanishing across Canada. Christine Weller, 12, was found dead by
a river in British Columbia. A year
later, Daryn Johnsrude, 16, was found
bludgeoned to death. In July 1981, six
children were killed in a month, ages
six to 18. They were found strangled
and beaten to death.
The killer: Clifford Olson, a career
criminal, who eluded capture in part
because the different jurisdictions
where he committed his crimes had
never communicated.
The murders prompted Canadian
police officials to create a system to
track and identify serial killers. After
an initial effort failed, the Royal
Canadian Mounted Police sent
investigators to study the ViCAP
program. They returned troubled by
some aspects. The FBI system was not
being used by many police agencies.
Nor did it track sexual assaults. The

78

September 15, 2015

The FBI found that


local cops were
sending the agency
only 3 to 7 percent
of homicides nationwide. The miniscule
staff could not even
handle that load....
Mounties decided to improve on the
US system by developing their own
behavioral crime analysis tool
ViCLAS.
The ViCLAS system has three
advantages over its American cousin:
people, money and a legal mandate.
More than a hundred officers and
analysts work for the system, spread
across the country. Its funded at a
reported cost of $14 million to $15 million per year.
The most important development
was that over the years, local legislative
bodies passed laws making entry
mandatory. All Canadian law enforcement agencies now file reports to the
system.
The agency also greatly expanded
the list of crimes that can be entered.
Any crime that is behaviorally rich
usually an incident involving a criminal and a victimcan be entered into
the database. It also created stringent

quality control. A Canadian analyst


who uncovers a link between crimes
must submit the findings to a panel for
review. Only then can the case be
released to local agenciesreducing
the chances for bad leads.
Today, Canadas system has been
repeatedly endorsed by senior police
officials as an important tool in tracking down killers and rapists. The
agency routinely publishes news-letters filled with stories about crimes
that the system helped to solve. One
study called ViCLAS the gold standard of such systems worldwide.
The Mounties now license ViCLAS
for an annual fee to police forces in
Belgium, the Czech Republic, France,
Germany, Ireland, the Netherlands,
New Zealand, Switzerland and the
United Kingdom.
The volume of information submitted has made all the difference, Lawlor
said. The system works when enough
agencies enter cases to generate
results. But agencies are reluctant to
enter cases until they see results.
Its a catch22 situation, Lawlor
said. If nothing goes in, then nothing
can go out.
When Burke, ViCAPs program
manager, speaks at national law
enforcement conferences, he asks how
many people in the audience have
heard of his program. Typically only
about one-half to two-thirds of the
hands go up. A smaller percentage say
they actually use it. We dont have a
club to force them to sign up with us,
Burke said.
The programs main goal now is to
ensure that the 100 largest police agencies in the country are enrolled. About
80 are. The agency continues to slowly
develop its software. Training occurs
monthly to encourage more participation. The FBI doesnt see the need for
major changes to ViCAP, Burke
explained. Its still supportive, Burke
said. Its still viable. IL
Courtesy ProPublica

INTERNATIONAL BRIEFS

British activist faces defamation charge


A THAI court has charged British
labor rights activist, Andy Hall, with
criminal defamation. A research by
him alleging severe labor abuses
in Thailand's Natural Fruit
Company, a key supplier to
European markets, got him into a
legal tangle. Natural Fruit has filed
four cases against Hall following
the publication of the report titled
Cheap Has a High Price,

Graft charges filed

UN tribunal stalls case

CORRUPTION CHARGES have


been filed by Brazil's attorney-general against Brazils speaker in the
lower house of congress, Eduardo
Cunha, and former president,
Fernando Collor de Mello. The case
centers on the duos involvement in
a 10-year-old billion-dollar scheme
involving the state-run oil company
Petrobras. Both have denied
wrong-doing, and Cunha posted on
social media that he had no intention
of
resigning
from
office.
He denounced the charges as being
politically motivated, according to a
report in The Guardian.
The case will proceed before the
federal supreme court. Under
Brazilian law, charges against
federal congressmen and other top
government officials can only be
filed and judged by the supreme
court, and it takes years for the
judgment to be passed.

A UN tribunal on August 24 asked India and


Italy to suspend all court proceedings involving
two Italian marines, charged with killing two
Indian fishermen in 2012. It asked both the
countries to report on the case by September
24. The 21-member International Tribunal for
the Law of the Sea (ITLOS), located in
Hamburg, Germany, delivered a split verdict of
15 in favor and 6 against. Italy took the case to
ITLOS as it was not happy with the trial of its
marines. Italy claims the incident occurred on
international waters, so India does not have the
jurisdiction to try Italian marines. ITLOS is an
independent judicial body established by the

Brazils ex-president
Fernando Collor de Mello

Egypts anti-terrorism law

PRESIDENT ABDEL Fattah Al Sisi of Egypt has


approved an anti-terrorism law that gives the
state sweeping powers to penalize journalists for
contradicting official accounts of militant attacks.
The law gives security officers sweeping immunity from prosecution and expands the surveillance powers of the government. Under the law,
trials for suspected militants will be fast-tracked
through special courts and anyone found guilty
of joining a militant group could face 10 years in
prison. Authorities claim the measures will halt
attacks by Islamic militants but legal experts
argue that the new law will muzzle voices that are
critical of Al Sisis authoritarian rule.

published by the Finnish civil rights


group Finnwatch, in 2013.
Natural Fruit is asking for damages
of around 7 million pounds.
Interestingly, Hall was acquitted
by
a
court
last
year
on another defamation charge
relating
to
an
interview
with
Al-Jazeera
network,
wherein he spoke about labour
abuses.

United Nations Convention on Law of the Sea


to adjudicate disputes arising out of the
interpretation
and
application
of
the convention.

Martial law in Venezuela


EMERGENCY HAS been declared along
parts of Venezuelas border with Colombia
after clashes between smugglers and soldiers. Venezuela President Nicolas Maduro
has imposed martial law in the border areas,
according to The Independent. He
announced 60 days of martial law in five
municipalities in the north-western state of
Tachira. Venezuela's price controls and subsidies on gasoline and food have led to rampant smuggling. People are taking advantage of Venezuela's low prices to sell goods
at higher prices across the border. There has
also been a recent introduction of a
fingerprint scanning system to restrict the
menace.

INDIA LEGAL September 15, 2015

79

CAMPUS UPDATE

Seminar on RTI
NATIONAL LAW School of India University (NLSIU), Bengaluru,
in collaboration with Karnataka State Law University, Hubli, is
organizing a one-day seminar to mark the completion
of a decade of the Right to Information Act, which
came into force on October 12, 2005. Even though it
continues to face challenges, the RTI Act has indisputably provided
the institutional mechanism for accountability. The
seminar Good Governance-The RTI Way, will be held
on October 12 at Krishnappa Memorial Hall, NLSIU, Bengaluru.

Guidelines on incest cases


NATIONAL LAW University, Delhi, in association with Counsel to
Secure Justice (CSJ) and HAQ: Centre for Child Rights, is holding a national-level dialogue to formulate guidelines for incest
cases. The dialogue aims to bring together all stakeholders who
handle incest and child abuse cases. They will not only prepare
guidelines but also deliberate on how these should be
implemented. This dialogue will be held on September 3, 2015,
at NLU, Delhi.

Event on military law and justice


GUJARAT NATIONAL Law University (GNLU) became the first Indian law
varsity to conduct a program on Military Law and Justice. The
seven-day program, the first session of which was conducted in
August, focused on Indian military laws, constitution and the armed
forces, the court-martial system, and comparative practices of
the military judicial system in the UK and the US. It was inaugurated by
retired Lieutenant-General DB Shekhatkar. The participants included
officers from the army, navy, air force, Indo-Tibetan Border Bolice and
Border Security Force. Apart from them, post-graduate and under-graduate students of GNLU also participated.

Child rights and law


A ONE-DAY training program on child rights will be organized by
Rajiv Gandhi National University of Law, Punjab, in association with
National Human Rights Commission, on October 17. A wide range
of laws guarantee children their rights and entitlements as provided
in the constitution and in the UN Convention of the Rights of the
Child. The training program aims to provide a useful platform to
students, research scholars, academicians, advocates, policy
makers, child rights activists and others to understand the challenges in protecting the rights of children.

80

September 15, 2015

1. Boffo.
A: Bluff master
B: Very successful
C: Failure
D: Duffer
2. Correct spelling?
A: Belwether
B: Bellweather
C: Belweather
D. Bellwether
3. Yellow peril.
A: Threat to US from
Asians
B: Jaundice
C: Cowardice
D: Diarrhoea
4. One usage is wrong.
A: An army of dogs
B: A herd of giraffes
C: A brood of chickens
D: A murder of crows
5. A cognoscente.
A: A well-read person
B: An old-fashioned man
C: A connoisseur
D: A foreigner
6. Pagets disease.
A: Cosmetic affliction
B: Kidney ailment
C: Bone disorder
D: Vitamin deficiency
7. Vicereine.
A: Vamp
B: Female viceroy
C: Vice-chancellors wife
D: Sorceress

Have fun with English.


Get the right answers.
Play better scrabble.
By Mahesh Trivedi

8. Part and parcel, ways


and means but might
and .
A: mane
B: main
C: right
D: fight
9. Annus horribilis.
A: African hornbill
B: Annual auditing
C: Yearly gathering
D: Awful year
10. IMTNG.
A: I am (ready) tonight
B: I am in a meeting
C: I am tomboy
naughty girl
D: I am the next
generation
11. King Charless head.
A: Huge ransom
B: Dandruff
C: Arrogant man
D: Obsession
12. Ball-park figure.
A: Zero
B: Hour-glass figure
C: Wax figure
D: Rough estimate
13. To shoot the breeze.
A: To chat
B: To fart
C: To severely criticize
D: To score zero
14. Zonked out.

A: Asleep
B: Dead
C: Exhausted
D: Failed
15. Bodacious.
A: Sensuous
B: Impressive
C: Burly
D: Boastful
16. Melomania.
A: Craze for flowers
B: Craze for music
C: Craze for gossiping
D: Craze for words
17. One who makes
maps.
A: Graphologist
B: Illustrator
C: Cartographer
D: Visualiser
18. Yard bird.
A. Prisoner
B. Eagle
C. Early riser
D. Corpse
19. Irish confetti.
A: Bricks
B: Flowers
C: Cologne water
D: Cheer leaders
20. Doxy.
A: Prostitute
B: Fluffy dog
C: Youngest daughter
D: File for documents

ANSWERS

1. Very successful
2. Bellwether
3. Threat to US from
Asians
4. An army of dogs
5. A connoisseur
6. Bone disorder
7. Female viceroy
8. main
9. Awful year
10. I am in a meeting
11. Obsession
12. Rough estimate
13. To chat
14. Asleep
15. Impressive
16. Craze for music
17. Cartographer
18. Prisoner
19. Bricks
20. Prostitute

Y
L
D
R
WO ISE

SCORES

0 to 7 correctYou
need to do this more
often.
8 to 12 correctGood,
get the scrabble
board out.
Above 12Bravo!
Keep it up!
textdoctor2@gmail.com

INDIA LEGAL September 15, 2015

81

PEOPLE / Aqua Magic

MAKING A
SPLASH
A girl cools off
in the waters of
the Ganges
during a hot
summer
morning in
Allahabad.

COOL HALO
A man bathes at a tubewell in Amritsar.

DROPLETS OF DELIGHT
A boy enjoys under a water fountain at a park in Tokyo.

MOUTH WATERING
A girl plays with water from
a fountain at Gorky park in
Moscow, Russia.

GOTCHA!
Women run as men throw
water at them as part of
traditional Easter
celebrations in Szenna,
Hungary.
Compiled by Kh Manglembi Devi
Photos: UNI

82

September 15, 2015

RNI No. UPENG/2007/25763

Postal Regd. No. UP/GBD-197/2014-16


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