Chapter A4
The Four Noble Truths of Indian Courts
Many kids in my day dealt with ‘system architecture’ for the first time when they asked their dad why he had purchased a small Fiat car and not a Willy’s Jeep. Why couldn’t a Jeep drive on a road like talcum powder could glide off a baby’s bottom? The answer was obvious enough. If you wanted to drive on rough ground, you had to have a high suspension. When you took that kind of vehicle on to tarmac, a lot of air passed under the vehicle making it buoyant and unstable. In addition, if you wanted to ride the potholes, you had to stiffen the suspension. When the same car drove on a tarred surface, this stiff suspension made a crater of every pothole with the result that mother found it very uncomfortable to sit in. In the result, mother had her Fiat and you lamented the loss of your macho ambition.
It’s the same with any legal system. The Justice Machine is designed to achieve certain results and to do that, it has a certain internal logic. It’s outside the scope of this book to explain why the Justice Machine has one system architecture but not another but we do need to accept that it does indeed have a system architecture. By definition, this means that it is good at doing things that are compatible with its system architecture and vice versa. Let me illustrate my meaning.
The Justice Machine is grounded in liberalism which you may not find elsewhere in Indian culture. By liberalism, I mean that it puts the individual, and the rights of the individual, at the heart of the system. This critically impacts its functioning. Consider criminal law. On the principle of it, it’s so very simple to pick up someone you suspect of murder and beat a confession out of him. If the law allowed you to hang a man based on his confession, you wouldn’t take more than a day to catch, try, convict and hang a murderer. Such a system can easily deliver quick justice. The problem is you will never achieve ‘real’ justice this way because with a little skill, you can inflict so much pain on a suspect that he will confess to anything. Modern medicine does its bit. Intolerable pain can lead to cardiac arrest, but you can have a doctor on standby to inject a shot of Papaverine directly into the heart the moment the suspect goes into cardiac distress. Then you can continue your torture procedure. The upshot is that by law, a confession made by a criminal to a cop is of no relevance in a criminal trial. The police have to prove their case using other evidence.
Then again, if you are to hang a man, can you begin by assuming that he is guilty and ask him to prove he is not? How do you prove a negative? Can you personally prove that you have never murdered anyone? How will you do that, using what evidence? The upshot is that every accused is innocent unless otherwise proven. This means that the cops have to prove every element of the crime: the fact that a crime was committed, that the accused did it or most likely did it, that he had a motive, and that no one else could equally have done it making him squarely guilty. This means that the accused only has to sit back and criticise everything the cops show the judge. In practice, if the cops need to show six connected facts but show only five, the accused goes free.
Then again, to hang a man, what kind of evidence will you accept? Can you hang a man because A said that B had told him that C had seen the accused at the murder spot on the evening of the killing? Or would you demand that C come and swear he had seen the accused there? The rule of best evidence means that you need a lot of witnesses to prove a lot of connected facts and if they should contradict each other, or there is a gap in the chain, the accused walks free. In all this, I make no comment on the ability of any accused to cajole, intimidate, bribe or blackmail one or more witness to go back on their story or tell lies in court for any one or more of a hundred reasons.
That apart, the accused is also entitled to present an alternate sequence of events in his defence. Since the burden is so heavy on the police, those accused of crimes don’t usually use this right. But push comes to shove, if an accused finds himself facing an airtight case, he can get someone to say he was 200 km away on the evening of the crime and there is not a lot the police can do about it.
What we end up with is a criminal administration that is cumbersome, slow, inefficient and unable to hang a high percentage of those who are accused of murder. The system architecture determines how a criminal case is compiled, fought, proved and concluded. Whatever be the motives and agendas of the players in the Justice Machine, its system architecture is such that overnight justice is impossible. The Justice Machine has no self-doubt about this. Let a hundred guilty men go scot free, it freely admits, before one innocent man is hanged!
It follows then that if you wish to bend the Justice Machine to your purpose and make it do what you want, you have to understand how it works and what its capabilities are. The easy way to do this is to capture the essence of its ‘behaviour’. If you think about it, it’s not terribly important how a car works: what matters is how it behaves when you drive it. This behaviour can be reduced to a set of rules and these rules can guide us in our search for a strategy for a case we want to file and win. Indeed, I would argue that if you want to win in an Indian court, you have to adapt your strategy and tactics to these rules of engagement. These rules of engagement are in terms absolute and remain immutable: I therefore call them The Four Noble Truths of the Justice Machine. To these we now turn.
Noble Truth 1:
The system architecture punishes the victim of a legal injury.
Most people in the business world have at one time or another faced a bounced cheque. When this happens, you have two basic options. Your classic option is to approach a civil disputes court and complain that money owned to you has not been paid. If you choose this route, you have to pay your court fees up front and then prove that money was owed to you, was not paid and therefore you are entitled to get a court order. When we contextualize this to complex commercial transactions, the first element of it – proving that money is owed to you – becomes an elaborate process. To prove this, you need many witnesses. These witnesses swear to different elements of the facts. The more complex the case, the more elaborate the trail of the case, the more expensive and the more prolonged. When the amount owed is not large enough to justify the effort, the litigation is unaffordable.
To get around this complexity, we amended our Negotiable Instruments law in 1988. This new law now allows you to sue NOT on the ground that money is owed to you but on the ground that your debtor paid you by cheque but it was dishonoured. Let me explain this. It does not matter what money was owed to you for what reason etc. It’s enough that somebody needed to pay you and gave you a cheque. The cheque is your holy cow. In this frame, the dishonour of the cheque is itself a legal injury and all you have to do is prove that the cheque was dishonoured. That narrows the issues considerably, making the trial short, simple and quick. Theoretically, such cases can be decided in months, if not weeks.
But that is not how the Justice Machine deals with it. In practice, a court doesn’t want mischievous professional blackmailing litigants to victimize innocent businessmen by enmeshing them in criminal courts and litigation. Practically, if a cheque you received is dishonoured, you have to go to court to ‘prima facie’ show that you have a case at all. This means you have to make your statement giving all the facts. You have to call a bank official to prove that a cheque was dishonoured. Given the speed at which the Justice Machine works, this could take half a dozen hearings spaced over a year. Once concluded, the court now sits down to hear your arguments on why the accused should be summoned to court. It evaluates the facts, the law and in culmination decides that yes, you are right. At this point, the court issues notice to the other side. In this process, you may have invested another six months. Successfully navigated, you are now past the ‘preliminary stage’.
Now begins the ‘issue notice’ circus. Doubtless, you will have to ‘grease’ your way as the court summons travel from the Judges table to the stenographer to the court reader to the court clerk who then sends it to the local police station for service to the accused. It is more than likely that the notice will not be served at the first opportunity. Cops are grossly overworked and can’t find the time. Even if they do show up, the accused dodges the warrants and is ‘out of station’, ‘not available’, served on an ‘incorrect address’ or some other slick Sudhir excuse. Summons will come back only to be sent out again to the accompaniment of the usual lubrication and months will pass between hearings. Eventually, you will get fed up and apply to the court for the issue of bailable warrants.
For those who don’t know, bailable warrants are coercive, meaning that once they are issued, the accused has to go to the local police station and sign a bond promising that he will appear in court on the next date of hearing. If he fails to do that, he gets arrested. Chances are pretty good your debtor will sign the bond. He has the ability to skip out and disappear right after that event but then living the life of the fugitive for what remains of his life may not be his thing. Hopefully, he shows up in court on the appointed day. Thus, two or more years after you first petitioned the criminal court, the debtor will appear and the hearing of the cheque bouncing case will now begin in earnest.
How the plot now unfolds depends on the accused. If he has a lot of money and very little time, he will immediately settle the case and pay you. You in turn will be so relieved at your good fortune that you will immediately drop the case and go home. In the result, despite this fast procedure, the accused would have kept your money for two years for free and used it to finance his business. Who needs a banker when he has the legal system to help him use you to bankroll him for up to two years, or more?
On the other hand, if the accused has no money but a lot of time, he will deny that you have a case and leave you to prove it. You are now in the business of proving the same case a second time to the magistrate, the only difference being that the accused will now also cross examine your witnesses. Depending on the complexity of the case, this could take several more years of delays. Whether the accused prolongs the case this way depends on his private cost-benefit analysis. What is this litigation costing him in terms of lawyer’s fees etc.? Is he able to use your money to finance his business and make more money at a rate higher than his legal costs? What is the risk that he will lose the case and suffer disproportionately? At each stage, he will make his business calculations. When he finds that there is no business case left, he will approach you for a settlement which you promptly accept because you are truly fed up.
You can immediately see the problem that informs court processes. The Justice Machine wants to be fair. Fair makes sense when parties are equally placed but where they are not, fair will always favour the side that has put the counter party in jeopardy. When a man goes to court over a bounced cheque, he has already been done in. He is already a victim. It takes effort to go to court. In these circumstances, treating the debtor ‘equally’ is the same as putting the perpetrator of a legal wrong at an advantage. This obsession with equality before the law brings on some very strange results. Let me share one example with you.
Back in June 2018 2018, we amended our cheque bouncing law to empower courts to order debtors to pay 20% of the amount written on a bounced cheque to the creditor within 60 days (as interim compensation) regardless of whatever story the debtor had to explain his behaviour. As is common with Indian laws, this amendment built enough ifs and buts into the law to make the 60-day period very flexible. If the debtor lost the cheque bouncing case and felt compelled to appeal, the court had the power to ask him to make a further deposit of 20%. Presumably, the law makers felt that this up-front payment would at least finance the creditors litigation in the same way that the other 80% helped finance the debtor’s litigation!
In practice, this could never work. Over the medium term, State Bank of India charges about 16% on a clean overdraft while most courts award 7 to 12% interest on judgements they hand out to creditors. With that kind of spread, there is no business case to ever pay a creditor. With some adroit handling, any sharp businessman can finance his entire business on bounced cheques and unpaid debts. Forcing the debtor to pay 20% does not change the essential arithmetic. Besides, fighting a battle over 20% has two main fall outs. First, the whole case is delayed as the creditor tries to persuade the court to let him have his 20%. Getting this kind of order passed takes several dates of hearing and wastes time. What if the magistrate doesn’t give you your 20%? You now have to appeal the order and that could take some years more to decide.
That’s not the only problem. Magisterial courts are clogged. You don’t get a case hearing more than a couple of times a year. Time periods specified by law are meaningless when judges have no time. If you are frustrated by these delays, you may vent your rage by filing an appeal against the delay. For sure, the appeal court would be sympathetic. But what will the appeal court do then? Very likely, the appeal court will order the magistrate to decide your case quickly. It will then send you back to the magistrate’s court. Now you have a bigger problem. You lost time in the appeal court and now you have a magistrate who is seriously upset. The magistrate is only human. He vents his frustration too. What’s to stop him from deciding your case in ways you may not like wherever there is room for judicial discretion? I can quote you dozens of cases where the Supreme Court has directed a High Court to decide a case within a timeline only for the litigant to find that the High Court didn’t really pay much attention to the direction!
This brings us to problem no 2. The law always gives wide discretionary power to the Judges. This is as it should be. The law is a human institution designed to be administered to people and there are so many varied circumstances in life that one size can never fit all. That said, judicial discretion also means that a judge’s emotions, relationships, obligations and ideological preferences become central to the result you get. Very often, it becomes a case of getting a favoured lawyer to appear before him and get this discretionary order. Favoured lawyer means premium fees. This means that young and cheaper lawyers who handle the bulk of cheque bouncing cases in the country are not going to cut it anymore. How much of the 20 percent will survive to arrive in your hands after you have paid the celebrity counsel?
It seems to me that we have the tools to fix our cheque bouncing laws but not the correct mental attitude to do it. We need to change our priorities. The law should stop trying to balance the scales between debtor and creditor, giving both an equal chance to win the judicial match! The law should burden the debtor and put him on the back foot till he has discharged his debt to the creditor. If a cheque bounces, it’s not the creditor who should be trying to get the debtor into jail: it should be the debtor begging a court to keep him out of jail without paying the money. The law needs simply say that if a cheque bounces, the debtor goes to jail unless a magistrate intervenes for specified legal reasons. This intervention has to be temporary and renewed for good legal reasons for another temporary period. Given the risks, it would make perfect sense for the debtor will find a way to honour his cheques rather than run around from court-to-court week after week trying to keep himself from being sent to jail.
To me, this is a perfectly rational law to make. It’s true that people in deep financial trouble will end up in jail, as they do in Dubai, but then parties make decisions in their business wisdom, right or wrong. If they are wrong, there is no reason to allow that party to shift the business risk to a third party. There is no rational reason why courts should be allowed to insert themselves into the distribution of business risk and protect one party or another from its bad commercial call. If I miscalculate my cash flow, I must find a way to pay for my own errors. Here is the main thing to remember: a man can give money without security to his debtor and that’s his choice. If he chooses to give money believing that the cheque he receives in return is a form of security, it is for the debtor to keep his word or go to jail for it. It’s not the law’s job to help the debtor and victimize the creditor. In any case, it is the debtor’s job to ensure that he has the money before he writes cheques for his creditors. Why should the law be the one to start prescribing the morning-after pill?
I do not discount the possibility that the cheque bounced because the computer program malfunctioned or worse, a sophisticated fraudster fabricated a cheque and is now blackmailing me when I actually owe him nothing. Worse things happen in the world. They don’t happen every day. If a debtor shows that he is the victim of fraud, protect him by all means. But then, how much protection do debtors need based on hypothetical situations? In the end, it’s a fake cheque and the blackmailer will very likely find that he ends up in trouble. Why should the law assume that every creditor is a blackmailer till he proves he is not? It’s ridiculous. And yet, the law offers a remedy which in effect makes a criminal of the victim of a crime.
Perhaps a day will come when the law redraws its priorities. Till it does, we need to internalize this noble truth and mould our strategies to take in its impact. We need to be aware that the system architecture of the Justice Machine is such that if you are a victim of a legal wrong, the Justice Machine will make you suffer for it.
The solution is of course obvious. This will be explored in the next chapter.
Noble Truth 2:
The Justice Machine is designed for the producer, not the consumer.
In discussing this noble truth, we must recognize the essential difference between fact and narrative. It is different between ‘what it is’ and ‘what it means’. This has been the subject of intense study in recent decades. Research has combined philosophy, cognitive science and neurobiology to show how narratives actually change how the brain processes facts. This research shows that our brain can take the same facts and understand them differently depending on the narrative in which these facts are packaged. At the cutting edge of this research, brain scans show us precisely what features of these narratives interrupt or facilitate narrative comprehension. More significantly, research has uncovered ‘structural features’, not just content, which impacts narrative influence. This has great relevance to (for instance) recruitment of committed cadres to terrorist movements.
To be clear, ‘facts’ themselves are not narratives. It is the way in which ‘facts’ are narrated that mobilizes action. Consider the assertion ‘Hinduism is under attack’. This is just an idea. It becomes a narrative when motives and meanings are assigned to all the elements of this idea. Thus, Hinduism is under attack acquires meaning when it comes packaged within Aurengzeb’s repressive laws, the Mughal history of patricide and fratricide, high Muslim reproduction rates in modern India, and whatever else besides. It is narratives that makes it possible to believe in Islamic ‘Love Jihad’. In a vacuum, facts are merely facts. Narratives give meaning to facts based on an idea.
Here’s the thing. Ideas or facts are either true or they are not. Narratives are not like that. Narratives are either successful or they are not. This is why it is entirely irrelevant whether Hinduism is indeed under attack. If it works during election time, mobilizing voters and influencing their behaviour, that more than serves the purpose of the narrative. It follows that an idea can be entirely illogical, even daft, but it can still influence behaviour if it is located within a powerful narrative.
This does not mean that a narrative can be entirely outlandish. A narrative does not need to be truthful, but it does need to be believable. This can be achieved in two ways: it is either packaged in half-truths in a way that it is difficult to deny, or it is narrated by a credible source (such as for instance a great scholar). It helps if the narrative is not too far removed from the believer’s everyday experience. You can remind people that Shah Rukh Khan’s wife and Salman Khan’s mother are both Hindu. This makes ‘Love Jihad’ seem entirely plausible. Similarly, by promoting the visibility of the lunatic fringe within the Islamic community on TV, you can convince Hindus that their way of life is under attack. This is why ridiculous fatwas by the most inconsequential mullas have been projected on national news networks in recent times.
As often as not, narratives are received in childhood, or early youth and then never tested by the believer. These narratives then control perceptions. I have many friends who view the conduct of Muslims within the parameters of their own inherited narratives. We know they pray to something located in Saudi Arabia, so they are anti India! That Lord Shiva finds his abode in Tibet (China actually!) is not part of the same narrative. We can safely assume that as human beings, we are able to intelligently and rationally evaluate the narratives of others, but not our own!
Narratives run as a powerful threat throughout our public discourse. When a poor man builds a hut by trackside, an ‘encroacher’ has ‘illegally occupied’ government land ‘in defiance’ of the law under the protection of ‘slumlords’. When I build a house in an illegal colony like Delhi’s Sainik Farm, I am ‘harassed’ by ‘corrupt’ inspectors in search for ‘bribes’ who ‘interfere’ with my property. Take another example. In an endless public campaign to demonize Auto-rickshaw drivers who, for urban elites, seem to personify rapacious opportunism like no other, ‘rude and aggressive’ drivers are intermittently accused of ‘harassing’ citizens and ‘demanding’ double fares ‘taking advantage’ of rush hour. We don’t stop to ask why it costs four times more to register a private auto rickshaw than it does to register a small car at the local road transport authority. We do not ask why commercial auto rickshaw licenses are concentrated in the hands of so few or why these licensees charge extortionist daily rentals from the drivers. Airlines on the other hand double their fares on rush days but are still projected as ‘struggling’ carriers, ‘reeling’ under the impact of ‘unsustainable prices’ and ‘uneconomic low fares’ who need to ‘recoup’ some of their losses. We do however ask why ‘tax payer’s money’ is used to ‘subsidize’ Indian Airlines which then ‘undercuts’ the other airlines causing ‘tremendous losses’ to the whole industry. Such is the power of narratives that we think of the same fact in entirely different ways because of the language used to describe the facts. This is how form becomes substance.
Something of the same phenomenon informs law making and it then goes on to ‘control’ judicial behaviour. We have framed an unfair land acquisition law where owners are simply dispossessed because somebody very far away decides to take that land and give it to someone else. In the course of this transaction, the original owner receives a low price for the land the law takes away from him. Worse, he is usually not paid even this fractional sum for years together, sometimes decades. The Government then marks up the price of the same land, makes a tidy profit and sells it to private interests. It is possible to do this in a democracy only because this kind of coercive sovereign robbery is wrapped in a laudable narrative. Thus, for instance, the conversion of peasant farms to golf clubs is projected as ‘development’ and the original ‘owners’ are reclassified as ‘claimants’. Our reactions would be very different if we were to hear a narrative which speaks of ‘the reduction of lush and bountiful grain producing land which for generations has fed the mouths of the poor and the needy’ to ‘evil enclaves of slothful self-indulgence by hedonistic predatory elites’. If we saw acquisition as ‘land grab’, landowners as ‘victims’ and compensation as ‘peanuts for helpless peasants’, our attitudes to the laws we make, indeed the things we do, would change radically. Historically, this is how it has always been. When the British Government ejected indigenous people from their community owned forests, their ‘relationship with the forest’ was ‘settled’. When plains dwellers lost title to their lands to a newly created class of zamindars, agricultural land was thus subject to a ‘permanent settlement’.
The point here is not to change the ‘language’ of legal issues to favour peasants and victimize industry. To do that would be to replace one prejudice with another, one propagandist line with another, one demagogue with another, and, most of all, one moral judgment with another. To make fair and just laws, we need legal discourse free of semantic spin and narrative distortion.
Within the innards of the Justice Machine, powerful narratives control the manner in which stake holders perceive of themselves. This gravely influences their behaviour. Thus, there are no service providers in the Justice Machine: only Judges who ‘preside’ over a court, lawyers who facilitate justice by ‘appearing’ and……court staff who absorb the grease you provide to lubricate the wheels of justice!! When mere mortals arrogate to themselves the power, and the wisdom, to deliver something as undefinable as justice, there is little reason for them to see themselves as sellers of a service for a price. Their narrative prevents them from thinking about the cost of the service, the delivery time, the quality standards and similar mundane matters of value for money. What is but a function in the running of a smooth society of coexisting human is now a great elevated almost holy dispensation: the ordinary rules of economic common sense don’t apply. This is one reason why you can never convince service provider in the Justice Machine to prioritize the needs of the fee-paying customer. Till such time as the stake holders in the Justice Machine change the narrative within which they locate their activities, we are not going to see anything change in the way justice is delivered in India.
To close the loop, I can also supplement my argument by drawing attention to less elevated forces at work here. The Justice Machine is a monopoly and has no competitors. For reasons I come to shortly, it is not truly capable of privatization. There is a natural tendency of any monopoly to service itself, rather than the purpose for which it was built. Look around you. Like a good monsoon song in a Hindi movie featuring a sultry siren, India’s institutional structure is soaking wet in an all-pervasive environment of institutional callousness, of self-serving irrelevance, which no one really wants to accept. Do government undertakings provide goods or services to their consumers, or jobs to political constituencies and perks to politicians and their cronies? Do the civil services exist to govern, or to service the personal ambitions of the governors? Everywhere, the sovereign functions of state increasingly service producers, not consumers. Would you be shocked and dismayed if the Justice Machine did more for its producers, rather than its consumers?
The conclusion is inescapable. When you walk into the legal world, you do it knowing that the Justice Machine doesn’t think that it exists only to make sure that you get the justice that you think you deserve as you define it. It has its own agendas. You must mould your strategy to its agendas, or you will be doomed.
Noble Truth 3:
The Justice machine has a caste system
Let’s ask ourselves why anyone would want to complain about their domestic help, their employees or for that matter a civil servant. Take the first. Why would anyone want to become a cook in your house? Does he do it to have this opportunity to serve you faithfully 16 hours a day without break seven days a week and pander to your every whim in order to have the satisfaction of knowing that he was a true karma yogi? Or is he slaving away for you so that he can get the best quality food he can as a perk, pick up some money along the way, secure his future and the future of his children, save enough to own a hut back in the village and maybe have a little nest egg for his old age? If he is indeed driven by his self-interest, would you not expect him to work as little as he can get away with, eat as much as he can, dip into the candy jar as often as he can, while continuously badgering you for raises, perks, freebies, home hut finance and a retirement fund?
Come to think of it, isn’t that what all your friends in the corporate world also do to their employees? Why would the domestic servant be different?
I need not labour the point. Once you get past the prejudice and the class bias, you will find that your maid, driver, office assistant, accounts guy, manager, CEO and anyone else who depends on you for his or her security behaves in exactly the same way as your corporate hot shot friends. It would be truly extraordinary to expect that service providers in the Justice Machine should be driven by motives that are more laudable than yours or live to a spiritual standard that is higher than yours.
Naturally, these motives are not confined to cash and the most basic of material needs. Maslow explored a whole hierarchy of human needs for us in his seminal paper on the subject back in 1943. His original conception has evolved ever since and is now quite sophisticated. It is now widely accepted that we are all driven by at least five essential layers of needs stacked as a pyramid. At the lowest level are ‘Physiological Needs’, meaning the need for food, water, air, sex and so forth. Above this level, humans have ‘Safety and Stability needs’: the need to feel physically, emotionally and financially secure in a stable environment. Naturally, this includes health and security. Together, these two needs are seen as basic human physiological needs.
The next two levels of human needs are viewed as ‘Psychological Needs’. Of these, level three of this pyramid is occupied by ‘Love and Attachment Needs’, i.e. the needs for unconditional love, support, and belonging. This cluster of needs also encompasses the need to belong to and feel attachment for a family, a group and a society. At the fourth level are found the ‘Self-Esteem and Power Needs’. Every human being needs to feel good about him or herself, to feel powerful and the need to be ‘respected’ by the world. This is the level at which we need to experience a sense of accomplishment.
Finally, at the fifth and highest level, we seek to attain the ‘Self Actualization Needs’. This is the most obtuse, yet an equally fundamental need. It is the need to feel that one has achieved one’s full potential, as also the need to express one’s creative energies.
The key takeaway here is that these needs are universal – there are no exceptions – and we would do well to remember that exactly the same needs are experienced by all participants in the Justice Machine. That includes judges and lawyers. It would be fanciful to expect that these normal rational people would be driven by motivations different from those driving the behaviour of the rest of the normal world.
What does this mean in practical terms? Let me use the judiciary by way only of illustration. At the most basic, a judge for instance wants his physiological needs to be met. While, some of these needs are best addressed within the confines of his home, a stable job in a dependable institution is a wonderful foundation on which to being the satisfaction of these needs. Next, he wishes to satisfy his safety and stability needs. Once again, the judiciary provides a strong foundation on the basis of which, he can begin to experience the safety and stability he needs to have a degree of physiological comfort. You will note that in the satisfaction of these needs, the performance of his professional duties plays no role: he only needs to ensure that he continues to have his job so that these needs continue to be met.
What role does the manner of performance of his professional duties play in the satisfaction of a judge’s Psychological Needs? For sure, Love and Attachment needs are concerned with events occurring within his personal social environment. For sure, belonging to the judiciary is a very soul satisfying way to address elements of this need. That said, being service oriented in the performance of his duties could, but need not necessarily, be central to the satisfaction of these needs. On the fourth layer of the pyramid sit the Self Esteem and Power Needs. A judge needs to feel powerful, the sense that he has the world, or some part of it, at his feet. A judge also needs to have a high sense of self-worth and the need to be ‘respected’ by the world. It is fear (or at least weariness) that he now seeks, and he wants to throw his weight at the world and test its reaction. We need to understand that these are by no means negative attributes. Most humans experience these states of being, and there is nothing invalid about it.
This brings us to the apex of Maslow’s pyramid of Needs. Here finally, at the fifth and highest level, every human seeks to address ‘Self Actualization Needs’. This is the most obtuse, yet an equally fundamental need. It is the need to feel that one has achieved one’s full potential, as also the need to express one’s creative energies. This is the level at which a judge experiences a sense of accomplishment. He begins to feel the need to do his job well, the need to look beyond himself. He now wants to ‘make a difference’, ‘be the change he wants to see’, ‘have the leadership of men’ and so forth. He wants to be admired and remembered. This is the level at which he aspires to be a superb judge.
What is the point I am making here? As we view the actions of most humans, it begins to dawn on us that security, power and then selfless service appear on the horizon in that order of priority. It is only when the ‘lower’ needs are met that a judge addresses his higher needs. For sure, these needs don’t exist in cast iron silos and there is plenty of fluidity between categories. Still, there is a certain mental, intellectual and spiritual evolution that every judge experiences as he continues to perform his duties over time. Why do judges succumb to the subtle psychological pressure of being lenient with lawyers they know? This is because the satisfaction of that need lies lower down on the pyramid than the need to be ‘above such subjectivity’. Why do provincial judges so easily issue notices requiring movie stars to appear before them to respond to all manner of bizarre cases filed by local lawyers? They do this because power lies lower in the hierarchy of needs than the soul satisfaction of being utterly impartial, or in the self-actualization imbedded in excellence of judgment. I can multiply examples endlessly.
In the same way, I can use as examples the other major stakeholder in the Justice Machine: the lawyers. We could run a similar analysis past you and for sure, we will come to the same conclusions.
What we get in the result is a kind of celebrity bias. This is unexceptional. If you were a judge, you would want to decide a high stakes case between two rich people about a multi crore scam before you would want to decide a case between two peasants about a street dog. If a movie star is listed as a party in a case, you would want him to appear before you. Very likely, you would not want to compel a politician to appear before you, perhaps because he has power over you! I will therefore cut to the chase and suggest to you the three basic rules driving the order of priority in which the Justice Machine proceeds to redress cases before it:
- The Financial Substance Principle: Money begets speed. The value of the stakes decides what is decided and in what time frame. High value cases will always have priority over nothing cases. Lawyers’ routinely demand that a judge prioritize their case because “thousands of Crores are riding on it”. It makes every player in the game feel more substantial.
- The Pecking Order Principle: Every primate society, every group and every tribe have its pecking order. This pecking order locates every member of the group within the hierarchy. It is no different for lawyers. Celebrity counsel will always get a better and more patient hearing than younger lawyers. This may be because they are more satisfying to hear, but droning on incoherently does not mean that celebrity counsel get cut to size and shut down summarily. Other things being equal, lawyers further up the pecking order get better treatment than those below them.
- The Visibility principle: Everybody wants fame, especially those who say they care nothing for fame. Fame is infectious and it is very virulent. If you are in the company of famous people, you are a famous person by association. If what you do is going to trigger fame, you want to be in that fame frame. You can be a nobody abusing a court on the road and no one gives a damn but if you are a latter day Arundhoty Roy, similar abuse can send you to jail for contempt. This is why cases reported in newspapers are decided on priority. A nobody lawyer can file a case in a mufassil town claiming to be offended by the sight of a movie star’s cleavage revealed one inch too much and it will be nothing. If this same news hits the paper, it would be only human if the magistrate would decide it with much fanfare.
The moral of the story if any is that before you knock the doors of the Justice Machine, you must ask yourself how far you, and the legal injury you represent, addresses the Hierarchy of Needs of the stakeholders in the Justice Machine. If you are high up on the ladder, you are already ahead of the curve and your passage through the system will be relatively, and I repeat, relatively painless. If you are not located high up on the Hierarchy of Needs, you will find that you receive little attention and your case soon grinds to a near halt. You would then need a strategy to beat the bias in the system and find a way to compensate for your insignificance.
Noble Truth 4:
Justice can’t easily be privatized.
‘Alternative dispute resolution’ has existed in India for a very long time. Generally speaking, hearings were held in the village chaupal under the peepul tree. The problem was the arbitrators always had collateral agendas. We tried to formalize a more objective arbitral process in 1940 but still failed to address issues that dogged the traditional peepul process! And there the matter remained, unaddressed for the next fifty years, till Narasimha Rao’s liberalization front-burnered it once more.
India opened up to foreign business in 1992. We lawyers worked at a frantic pace to write cross border contracts to reflect these new economic linkages. Very soon, these inbound investors realized that the contracts we wrote for them were meaningless unless India’s Justice Machine was able to quickly resolve commercial disputes under these contracts. What was to be done? Could they bypass our Justice Machine instead? We were asked to write foreign arbitration clauses into these agreements; indeed, these agreements came to be written ‘subject to’ foreign laws and jurisdiction.
It wasn’t a smart thing to do though. Alternative dispute resolution is a huge business opportunity and it makes no sense to open your market to foreigners but then not exploit the potential benefits it brings. Could we replicate these foreign arbitration rules in India and dispensed quick justice under our domestic laws? Stakeholders in the Justice Machine started to passionately advocate the beauty of arbitration as a solution to most ills of the Justice Machine. Arbitration came to be seen as a fast-track way to get past the logjam of crores of cases clogging Indian courts.
In 1996, we amended our arbitration laws in an attempt to conform them to the international standard. It has not worked. There were any numbers of reasons why. Privatizing a forum and the process it follows does not mean that you have altered the attitude of the service providers that run the forum. Noble Truth No 1 to 3 continued to apply. The system architecture that prevents the Justice Machine from providing efficient service continues to apply to Arbitration Tribunals. I have already told you a story in the opening chapter demonstrating some of these limitations. To make it worse, there are also a number of new reasons hampering Tribunals from functioning efficiently. Let me attempt a snapshot.
That we are a low trust society is our first problem. With our network of relationships, obligations and favour trading traditions, it is impossible to find an arbitrator who both sides unreservedly trust. Inevitably, we end up with three arbitrators. Each party appoints one arbitrator and then these two arbitrators together appoint the chief or presiding arbitrator. This means your cost of arbitration triples. It also means that you can’t use arbitration to resolve small claims. Parties have the option of agreeing to appoint a single arbitrator but they never seem to agree. You can always go to a court and ask it to appoint a single arbitrator: it may well be able to pressure the other side to agree. This is not necessarily a good thing. A court can always appoint someone inappropriate only because a favour is owed etc. The bigger problem is that courts are so busy it can take a year or two to appoint an arbitrator even when parties agree. Sometimes, it takes longer for parties to appoint an appropriate arbitrator thought a court than it takes a set of foreign arbitrators to decide a case before it!
This is only the beginning of the logjam. On the perfectly reasonable assumption that only judges are trained to decide legal issues, Indians like to appoint judges as arbitrators. Regrettably, judges are not available to deliver this service till they have retired. Let me put it bluntly: the constitution of India considers a man of 65 too old to judge a case in court but Indian parties routinely appoint retired judges as arbitrators’ decades after they have retired. Parties are then confronted with a whole host of practical realities. Many judges are very sharp and alert even decades after they retire but there is no predicting the age at which this may suddenly change. If that happens, the arbitration becomes unpredictable.
Its downhill from there. In these golden years after retirement, priorities and motivations change with each passing day. After years of slaving on the bench, a retired judge wants to relax a bit, have leisurely vacations, tickle his grandkids as they sit on his laps, play the professional baraati, and regale litigation teams with stories about the good old days, and so forth. A retired person feels he or she has earned the right to a little comfort, a little leisure and a little of the good life. That’s true for all senior citizens, not just judges. I for one totally sympathize with this evolved attitude, but how do you then manage the unfolding litigation?
These realities create uncertainty and escalating costs. Hearings are cancelled at short notice for health reasons. When hearings are held, declining health and rising need for comfort create cost challenges. Arbitrators prefer to live in suites in luxury hotels, travel business class, eat exotic foods, drink exotic drinks and meet their extended family and friends in the hotel. For any older person, the main way to get youngsters to visit them is to offer the kids a fine dining experience. Guess who is paying for it? Arbitration law allows arbitrators to decide where to hold hearings: parties invariably face pressure to hold hearings in exotic locations. It can be relentless, spiralling up costs and decimating legal budgets.
This mindset also reflects in the frequency with which hearings are scheduled and the way proceedings occur in arbitration. Retirement sometimes brings on a regrettable social isolation. Hearings become extensions of social life. There are a lot of tea breaks, a lot of interruptions because of ‘hamare zamanae main’ stories, and not all attention is focussed on the legal issues at hand. Retired judges may be less likely to spend fewer off-time hours updating themselves on the latest evolution of the laws. If, in the meantime, a new law is legislated from a different legal paradigm, some retired judges may still see the new law through the prism of the old law’s mindset. It’s sometimes difficult to get focussed attention from the entire tribunal for a prolonged period of time. When one does get the required focus, it may be patchy and legally flawed.
There is too the problem of fees. Arbitrators charge by the ‘sitting’ and most sittings are two hours long. The system has a built-in incentive to increase the number of sittings. This is easy to do with chai breaks, joke sessions and political discourse. If you get 45 minutes of effective work during a two-hour arbitration hearing, you are ahead of the curve. By the time the next sitting comes along a few months down the road, everything is forgotten and lawyers must start again. Not that the lawyers mind: they too charge by the hour! It gets worse if a party files something of any length before the Tribunal. The Tribunal is free to charge ‘reading fees’. These can go up to 30 lakhs for a set of pleadings and evidence. I have had a case where reading fees were charged six times during the course of a case: in the beginning, after a successive set of amendments were allowed, before final arguments, while writing the award and then again when post-award clarification were sought. The bills pile up.
If you were terminally cynical, you would make the argument that at the end of the day, arbitration is a post-retirement sinecure no one wants ended. Everyone is being paid to keep the show on the road and most likely, at least one contending party also wants the decision in the case deferred indefinitely. We have seen this already in the case we encountered in Chapter One where for much of the time, both parties didn’t want the case ended. What you have then is more of the same: anything the Justice Machine can fail to do; alternative dispute resolution can fail to do even more spectacularly.
In 2015, India tried to fix the most pressing of problems of our arbitral processes with yet another set of amendments. Two changes were particularly relevant to our discussion here. First, they limited the time a Tribunal had to finish a domestic arbitration to 12 months following the date the Tribunal ‘entered on the reference’. ‘Entered on the reference’ means the date by which all arbitrators became aware that they have been appointed to the Tribunal. Naturally, the time taken to appoint arbitrators etc was not included in this period. If the arbitrators needed further time to make the award, parties were at liberty to agree to one extension of 6 months. Further extension was not permitted except on the orders of the court.
As you can see, this is an escape hatch. Arbitrators can hear a matter for 17 months and then throw up their hands and tell Parties to go to court and get them another extension. What choice does a party have? Can any party write off 17 months of effort in such circumstances? Then again, courts do not decide anything very quickly which means that it could be a year or more before they grant an extension. In any case, the Court has only difficult choices before it. Should it extend a process that has gone on for some time and made some progress or should it give up on the Tribunal and start a new process with new delays?
The other significant amendment is far less ambitious. The amended arbitration law now recommends a ‘model fee’. It is not mandatory. By definition, once arbitrators are appointed, they are at liberty to reject this recommendation and ask for a higher fee. Refusal to agree means the Tribunal may choose not to proceed with this. This works to the advantage of the party that doesn’t want the case decided. Noble Truth Number applies once again!
It is too early to say if either amendment will have any impact on the total picture. I am not optimistic. In the larger scheme of things, these two are but tips of the iceberg.
Perhaps the greatest concern of all is the uneasy alliance between the courts and these tribunals. Who has priority over which part of the legal process? Do Tribunals have sovereign power over the actual case and its decision? Or did courts have the power to overturn what the Tribunals do? If the courts can overturn what Tribunals do, then arbitration before the Tribunal is only round one of the dispute resolution process. Once the Tribunal has given its decision, the loser can go to a court and start a fresh process of re-deciding everything again based on the same facts.
When India created a new arbitration law in 1996, it was largely based on the international model law so we know there was no ‘in principle’ reason why it would not work efficiently. That’s not how things turned out. A lot of the responsibility rests with the courts. Indian courts do not like to restrict their power, and sometimes it’s for very good reasons. Let’s just say that for a variety of reasons, arbitrators, bureaucrats, politicians, and whoever else you can think of do some very strange things. We are a low-trust society as I have said. We are unable to make the assumption that if someone exercises authority over another, he shall do so fairly, with no collateral motive. In such a society, courts hesitate to abdicate their ability to correct any and every error that ‘pricks their conscience’. The courts ‘powers’ have expanded and contracted from time to time depending on where and how the pushback came ever since Independence. This ebb and flow is a central part of India’s judicial history.
As an example, we can look back at the ‘Emergency’ in the Indira Gandhi era and examine the manner in which the Government tried to restrict Judicial Review. At that point in time, the courts’ powers contracted considerably. Conversely, we can look at the Manmohan Singh era and examine the manner in which the Supreme Court went about cancelling telecom licenses (and practically tell the Government how to run the country) even though some of these licenses were backed by Government of India sovereign guarantees. Then again, we can look at the law specifying the manner in which senior judges are to be appointed and promoted. In a series of three ‘judges cases’ between 1981 and 1998, the judiciary usurped to itself the sole power of judicial appointments. The legislature then pushed back with the NJUC Act of 2014 and the judiciary pushed back with their decision in the fourth Judges case in 2015. The resulting uneasy truce holds for the moment but no one is holding their breath. Seen from a big history perspective, the Legislature on the one hand and the Judiciary on the other hand have always been engaged in a never-ending tussle to decide who will have the last word on every subject under the sun.
Within the context of privatized justice as an alternative to our Court system, similar wars have been fought for a long time. I will give you one example. The 1996 Arbitration law tried to severely limit a court’s ability to interfere with the final award of an Arbitration Tribunal. Procedural violations apart, it said that an award may be set aside if it was “in conflict with the public policy of India”. Its explanation stated that “an award is in conflict with public policy if (a) the making of the award was induced by corruption, (b) it is contravention of the fundamental policy of India, and (c) it is in conflict with the most basic notions of morality and justice.”
The Supreme Court did not like these limitations, perhaps because weird decisions were placed before it and it could not find a way to fix them within the limitations of its powers. The obvious answer was to expand their own powers of judicial review, and they did so in a succession of cases, reaching a zenith in the 2014 decision in the ONGC case. The court now held as follows:
- The court defined the ‘fundamental policy of India’ to include: (i) compliance with Indian Statutes and judicial precedents, (ii) need for a judicial approach(iii) compliance with natural justice, and (iv) judgements must meet the standard of ‘Wednesbury’ reasonableness.
- The court also empowered itself to remedial recourse on the ground of justice and morality if an award ‘shocks the conscious of the court’.
- The court approved of ‘patent illegality’ as a ground to set aside an award defined as one or more of three heads: (a) contravention of the substantive law of India, (b) contravention of the Arbitration Act, and (c) contravention of the terms of the contract between parties.
Please note that none of these grounds found place in the plain language of the 1996 law. In truth, the words ‘patent illegality’ as a ground to set aside an award in the statute were not to be found in the law at all. If you are a layman, may I suggest that you ought not to be surprised. We are a diverse and difficult country; our law makers are less adept than they could be and the courts frequently improvise on their feet. Many of our laws are ‘judicially constructed’. Our objection to this judicial assertiveness would have to find its source elsewhere.
As you can see, the result of the ONGC judgment was that courts acquired the authority to overturn anything and everything an Arbitration Tribunal had done. What’s the point of going to a private judge if a Court can overturn everything a private judge has done: doesn’t it make sense to simply cut to the chase and go directly to the Court?
The saga is nowhere near ended though. Our Legislature didn’t think the courts had done a great job so far in giving quick justice to our citizens. It pushed back. In 2015, the legislature inserted Section 34(2A) into our arbitration law stating that an award “shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence”. Still, in deference to the judges, it also provided that in the case of international commercial arbitrations, a court could set aside an award if “patent illegality appeared on the face of the award”. At last, India’s arbitration law had the words ‘patent illegality’ somewhere in its text!
This amendment came up for judicial review in the 2019 Ssangyong Engineering case. The Supreme Court now had a choice to make: it could either sail with the legislature or lean back on it. It chose to limit its power in a sophisticated judgment that is still being widely studied. As I understand the judgment, the expression ‘public policy of India’ now means the ‘fundamental policy of Indian law’. What is India’s ‘fundamental policy’? The court has the answer. Typical examples would include the Foreign Exchange Management Act (because it’s in the national interest to conserve foreign exchange) or orders and judgments of a court (because they bind everyone without exception). As opposed to this, granting compound interest on an award for instance is contrary to an Indian law but it’s not fundamental to the policy of India.
Now here comes to supreme irony embedded in the Ssyangyong case. After approving the idea of limiting judicial review, the court still proceeded to do something that had never been done before in the history of Indian courts. It set aside the majority award (which it held was contrary to the most basic notions of justice) and upheld the minority award using its special powers under the Constitution of India! What we have now is a bunch of narrow rules where the court has limited its ability to overrule what Arbitral Tribunals but we have introduced the concept of minority awards eventually becoming the final decision of a court. For the legal community, that is just magic!
Lawyers have now changed strategy. If we can’t win an arbitration outright any more, all is not lost: we just have to make sure we get a top-class minority award! Bear in mind that most arbitration tribunals have three arbitrators, one of whom is appointed directly by each client. Is it too outlandish that in the years to come, we will now grow a generation of sponsored arbitrators whose main job would be to write a quality minority award? This will set off three rounds of litigation in the courts at the end of which process, hopefully, we will have a minority award being made a rule of the court. Don’t you just love the Justice Machine?
This brings us to that point where every man is forced to confront the Noble Truths of the Justice Machine and ask himself what he is to do in the circumstances. How do you navigate through the system architecture of this vast and complex organism and find a way to solve your legal problem? It’s a complex question, and that’s not the best place to find an easy answer. Still, we need an answer and so I have fashioned one. In my opinion, we can navigate the labyrinth of the Justice Machine if we use four ‘rules of the road’, rules that I call the Four-Fold Path. It is to these that we now turn.