Tuesday, January 16, 2018

Unlettered rebellion

On November 12, 2017, we wrote under the caption 'Supreme Court' as follows:

"We can expect more fireworks from the Supreme Court in the near future. A recent cartoon regarding the American Congress says that what was meant to be an institution of checks and balances has become an institution of only checks (cheques). It is hoped that our Supreme Court will not reduce itself to be similarly portrayed. " We took exception to the Chief Justice taking administrative decision in a case that potentially involves him.

It is our misfortune that we have been proved correct. Four judges of the Collegium of the Supreme Court  have publicly questioned the administrative style of the Chief Justice.

Legalservicesindia.com says,

"As far as possible a Judge should keep off the media. He should refrain from expressing his views in media on matters either pending before him or likely to appear for judicial consideration. Else he may be accused of prejudging the issue and his neutrality may be questioned thereby. Lord Widgery, Lord Chief Justice of England since 1971 to 1980, said that “the best judge is the man who should not court publicity and should work in such a way that they don’t catch the eyes of the newsmen”. Lord Hailsham said that the “best judges are those who do not find their names in the The Daily Mail and still, who abhor it” (quoted from David Pannick QC, 'Judges')"

Judges are after all human beings. But problem arises when they want to prove this time and again by their behaviour. We sorrowfully witnessed the case of Justice Karnan who egregiously ran his brother judges down and because he was only a High Court judge, he ran into trouble. What the four judges have done in convening a press meet and distributing copies of a letter they had earlier  written to the Chief Justice is karnanesque plus . These four deserve the treatment that was meted out to Karnan with greater force. 

If these recalcitrant judges are treated with kid gloves, such acts of infamy will become frequent. If judges in various High Courts rise in revolt against their Chief Justices, will the Supreme Court have any moral authority to discipline them?

Why did these eminent judges call for a press meet? If the purpose was only to ensure correction of deviant administrative practices, it could be pardoned. The purpose as it turned out was much less noble. As Justice Chelameswar unknowingly admitted, "We don't want some wise men in future accuse us of having sold our souls." They only want to be beyond personal criticism. Their primary intent is not protection of judicial propriety. They have let down judicial dignity trying to promote their public image.

The foursome did not discuss the administrative problem with other judges of the Supreme Court probably because they thought that the Collegium judges were a class apart and it was infra dig to confabulate with their 'juniors'. They claimed in their letter that the Chief Justice was only the first among equals. They failed to realise that puisne judges (there are 20 judges in the Supreme Court junior to the Collegium five) were as eminent as them in their legal expertise and were equally capable of judging cases of 'national importance'. A false sense of superiority misled the four to throw the time-honoured principle of judicial restraint to the winds.

Chelameswar's conduct has been abominable. Immediately after the avoidable press meet, he committed the cardinal indiscretion of meeting a politician, D.Raja. Raja meeting the judge is bad enough. But Raja has gone on record that the suggestion for meeting was made by the judge during a phone conversation. So, Chelameswar took the initiative for a personal meeting with a politician. Far from abjuring politics which a judge is supposed to do, Chelameswar has become incestuous with politics. 

Chelameswar is respected as a judge who maintains judicial integrity. If he himself denigrates judiciary in this manner, we can only fearfully imagine what other judges are up to. We desperately need a renaissance in our legal system with a rules-based legislation on judges' responsibility and duties to keep Karnans and Chelameswars at bay.

The word 'unlettered' also means unenlightened. That is why we call this rebellion unlettered though a letter is the pivot of this controversy.

Sunday, January 14, 2018

Thuglak's 48th annual meeting

January 14th saw the 48th annual meeting of Thuglak readers at the Music Academy, Chennai. The editor, S.Gurumurthy, said the next annual meeting is likely in Coimbatore.

As usual, the meeting started sharp at 6.30 p.m. though Arun Jaitley, the chief guest arrived 10 minutes late. Gurumurthy referred to punctilious punctuality of great people like Morarji Desai. Relative to Cho, Gurumurthy is dour. Yet, the magazine's readership has not dwindled proving the strength of the editorial team. The Academy was overflowing with people even one hour before the scheduled start of the meeting. Video clips of Cho's speeches in earlier annual meets were shown. Cho had prophetically declared that no one would be found guilty in the 2G- scam. Cho's sarcasm on Manmohan Singh and P.Chidambaram was a delight to experience once more.

Responding to readers' queries, Gurumurthy condemned the press meet of four judges of the Supreme Court wondering what would happen if the High Court judges also followed suit. In his view, the four judges need to apologise for their errant behaviour. He was all praise for Rajanikanth and his proposed style of spiritual politics.

G.Viswanathan, the educationist,  sought consistent and more punitive measures against corruption. He supported simultaneous elections to the Lok Sabha and state Assemblies. GV was one of the confidants of Cho.

Jaitley had come with a prepared lecture. But after listening to various readers and partly understanding their views, he decided to dump his prepared text and focused on where the country is headed. He lamented that the Congress party has lost its moorings and only adopts the agenda of other forces. He blamed this sorry state of affairs on over-reliance on a family. In his view, a family-dominated political party can succeed only if the family members are great leaders themselves. Inevitably, he compared the present generation in the family with Pandit Nehru and hinted at the chalk and cheese difference. Admiring Indira Gandhi's nationalism, he pitied Rahul Gandhi's support to divisive forces. (Arun Jaitley was also imprisoned during the emergency.) Joint effort by jihadi and left elements to bring about chaos in the country was pointed out by him. Predictably, he referred favourably to bold steps taken by Narendra Modi, be it demonetisation or GST or anti-benami legislation.

Coimbatore will be luckier than Chennai next January 14th.

Tuesday, January 09, 2018

IOB's controversial proposal

Indian Overseas Bank was promoted by a business community (Chettiars) that is known for its conservatism and adherence to laws in letter and spirit. It is therefore ironic that IOB has now proposed to appropriate Share Premium Account to set off whopping accumulated losses. It is true that post-nationalisation, the character of banks has changed drastically. But nobody would have expected a laid-back bank like IOB to come up with a financial engineering masterpiece as it has done now.

The bank has convened an Extraordinary General Meeting of its shareholders on January 30th ( Martyrs' Day !) Is the bank making its shareholders martyrs? The move is controversial because as the bank has rightly mentioned in its notice convening the meeting, the use of Share Premium Account to set off Accumulated Losses is not envisaged in Banking Companies Act or Banking Regulation Act. As the bank conveniently states, "it is neither permitted nor prohibited". IOB's pragmatic view is stated as follows:

"The Bank is of the view that this is the most practical
and economically efficient option available to the
Bank in the present scenario so as to present a true
and fair view of the financial position of the Bank."

Does dubious deletion of Accumulated Losses by utilising funds from Share Premium Account present a true and fair view of the financial position of the bank? Since banking-related Acts are silent on this aspect of financial engineering, we can draw lessons from the Companies Act.

The Companies Act permits appropriation from Securities Premium only for five purposes. 1) to write off preliminary expenses, 2) to write off discount on issue of securities, 3) to provide for premium on redemption of securities, 4) to issue bonus shares, 5) to enable buy-back of share capital.

Therefore, a non-banking company can not do what IOB proposes to do. Banks are expected to be more conservative and are not supposed to adopt expedient measures to whitewash their financial statements. IOB's notice to shareholders hints that RBI's approval for this innovative move has been obtained. According to Banking Regulation Act (Sec 17 (2) ) and RBI's reiteration in 2006, any appropriation from Share Premium Account by a bank should be notified to RBI within 21 days with proper justification.

This proposed move will set a precedent for other banks to follow. A larger bank like ICICI Bank which is indubitably smarter in presentation of financial statements may be waiting in the wings to appropriate from Securities Premium Account to bolster its Profit and Loss Account whenever a future contingency arises. Such future contingencies are more likely than not.

Saturday, December 30, 2017

Rajini enters the cesspool

The threat or the promise has at last come true. Rajini, the Tamil superstar, has now taken the plunge during the dying hours of the year 2017. Will this herald better times for Tamil Nadu?

When asked about the prospects for his success in politics, he whimsically answered that entry itself is success. Does this show his sense of realism or betray his lack of confidence ? He is entering the political scene when politics in Tamil Nadu is both murky and mucky. This is a more consequential gamble than any that he might have taken in the movie land.

He says he will withdraw from politics if he is 'unable to deliver' within three years. This may read like a challenging and welcome statement today indicating his seriousness. In case he becomes a true politician within three years, he will realise that, in politics,  promises and pledges are meant to be broken. Political gutter in the state is now so stinky that it will be a remarkable wonder if the superstar is able to cleanse it in the time period he has given himself.

A new party will be formed and it will contest all the 234 seats for the Legislative Assembly. In the normal course the election should take place in 2021. Money power has become the most critical indicator of success in Tamil Nadu politics. How does Rajini plan to raise the necessary resources for this Herculean task? If he is able to do this, he will become beholden to the benefactors and the present venal state of politics will continue. Catch 22 situation !

Rajini's plans are already showing signs of contradiction. He has given himself three years to deliver and the first real challenge will appear only in 2021 ! It is of course possible that state elections may get advanced in view of unstable political situation prevailing now. Kamal Hassan's ever-indeterminate plan to make a foray into politics may introduce some more interesting uncertainty.

Rajini uses Lord Krishna's metaphor to claim that he makes his political avatar to rid politics of adharma. Does he similarly possess the optimal blend of integrity, guile and foresight to steer the state in the right direction? Only time will tell.

Monday, December 25, 2017

Political integrity

The word 'integrity' has at least three meanings. It refers to completeness (as in 'the government should protect nation's integrity). It also means unimpaired quality (example: a chemical's integrity). The third meaning refers to adherence to a code or dharma as in moral integrity or business integrity.

The by-election in R.K.Nagar assembly constituency may make us wonder what has happened to political integrity. A simple analysis of the campaign process and the result assures us that political integrity is intact, safe and secure.

It needs to be said upfront that political integrity demands symmetric behaviour from both the contestants and the voters. This election has come up trumps in this respect. As reports go, AIADMK donated Rs.6,000 per vote and TTV Dinakaran Rs.10,000. We do not know how much was gifted by DMK. The electorate proved their integrity by ensuring that AIADMK secured less than 60% of votes captured by TTV. This simple arithmetic shows that DMK must have given only Rs.3,000 per voter.

Let us now analyse TTV's integrity in all three dimensions.

Completeness: He has proved he is Jaya's only political heir by winning the election hands down. So he totally represents Jaya's party. Name and symbol have been wrongly allotted to the pretender faction of EPSOPS.

Unimpaired quality: Many attempts were made to change TTV. IT, ED raids are just two examples. But TTV  was not ready to alter his innate quality of being a benefactor to voters. Lots of cash might have been seized during raids. This did not disable TTV's liquidity. You may set fire to gold, does it ever lose its sheen?

Adherence to democratic code: This is where TTV has astounded the sceptics. The model code of elections which is strictly enforced in our democracy mandates that no cash can be distributed to voters in the constituency. What did TTV do? He took the voters out of the constituency and made arrangements for cash distribution only in neighbouring constituencies where no election was held. Some voters missed this opportunity. TTV did not let them down. The model code does not disallow noting of numbers of Rs.20 currency notes the possessors of which can receive cash after the election when the code ceases to be operative. Would TTV break the promise now that he has won? No way. If he reneges now, how can he win the general elections which may not be far away?

Why did the electorate massively vote for TTV? The answer is twofold. The symmetric expectation requires their compliance with the Rs.10,000 pact. The voters wanted to prove their integrity. Secondly, RK Nagar voters are lovers of democracy. They want to exercise their only democratic right of casting votes as frequently as possible to secure their livelihood. With ED cases awaiting finality, TTV may lose his Assembly membership anytime soon. TTV's representative will contest the soon-to-be held by-election and take care of voters' cash needs.

Monday, December 18, 2017

A tragic miss for Congress

Hardik Patel (age 24), Jignesh Mevani (35) and Alpesh Thakor (40) are all strong leaders of different castes who are very useful supporters for any political party during elections (it is another matter that they will demand their pound of flesh if voted to power). All of them supported the Congress in Gujarat Assembly elections. This by itself should have enabled Congress to wrest power from BJP. On top of this is intense anti-incumbency factor. Farmers' deep distress and increasing economic inequality 'caused by Gujarat Model of growth' should have catapulted Congress to two-thirds majority in the assembly.

This logical development did not come about because the two focal adversaries, Narendra Modi and Rahul Gandhi, did something in tandem : both of them stood in the way of Congress' march to power, the former through ostensible sincerity and the latter through apparent insincerity. When Modi raised the bogey of Congress aligning with Pakistan towards the end of campaign, voters lapped it up. When Rahul tried to assert that he is a janeu-dhari Shiv-bakht, he over-estimated the gullibility of voters. Rahul's expedient discovery and superficial claim that he is a Hindu distanced true believers in Hinduism from Congress. Religious polarisation has been patented by BJP with first-mover advantage. Rahul Gandhi's me-tooism in this respect boomeranged on his party's chances to race to power. Rahul's political ineptness  showed up in his inability to run with the hare and hunt with the hound when he unsuccessfully tried to fuse together vikas and religiosity. Success in politics demands an ability to combine even more incompatible issues with greater ease.

Congress should not view the results as a welcome addition in its strength in the assembly. It should rather introspect over mishandling a favourable situation that any other political party would have easily leveraged to become the ruling party. A necessary corollary is to reconsider Rahul Gandhi's suitability for Congress presidentship.

Sunday, December 17, 2017

Takeaway from exit polls

The shelf-life of exit polls of Gujarat  elections gets over today. So, it is imperative that we make sense of the exit polls right now. Actual counting of votes scheduled tomorrow may confirm or contradict the exit poll findings to the delight or dismay of people depending on their political proclivities.

Rahul Gandhi spearheaded the Congress campaign. He has since become the President of the party. It is therefore unavoidable that he will gain respect or ridicule depending on the final results. Arrogating credit for victory and abdicating responsibility for defeat is an obsolete and unacceptable strategy.

22 years of BJP rule (misrule according to Rahul Gandhi) alongwith attendant anti-incumbency mood, immense inconvenience caused by demonetisation and trader-unfriendly implementation of GST should have dealt a death-blow to BJP and enabled a cakewalk for Congress. Disenchantment among Patidars , fusion among OBCs and dalits against BJP and poor performance by BJP in the local / panchayat elections preceding the Assembly elections were additional advantages to Congress.

Rahul Gandhi's reaction to credibility of exit polls is not known. But he commented that BJP has lost credibility among Gujarathis. It was also strange to hear him say that foundations of BJP in Gujarat are weak.

The political situation was ripe for Congress riding back to power. If Congress continues to fail at the hustings as told by the exit polls, it can only be interpreted as a consequence of fatally-flawed policy and approach of Rahulji. The 47-year old leader is not a newcomer to politics. He is misplaced as national leader of the main opposition party in the country. His metamorphosis as an energetic and persuasive leader during the Gujarat campaign was perhaps dubious.

This raises the question of tenability of Rahul Gandhi as President of Congress. It is obvious except to the most obsequious that he is in that position purely by accident of birth in a family. Congressmen need to accept the fact that the party is more important than any person. One may argue that only a Nehru-Gandhi can hold the party together in these perilous times. This argument is specious because the alternatives have not been tried for a long time. Continued reliance on the family will only aggravate the party's misery. A political party that totally depends on a family for its survival is fit only for dissolution.

If Rahul Gandhi relinquishes the party's presidency thrust on him by his mother, he will go down in history as a true democrat who placed party's interests (and country's interests because we need an effective opposition) above personal interests. Maybe this is too much to expect from a person brought up on the culture of entitlement.