MAKE MINISTERS PAY

Print edition : February 11, 2011

Vilasrao Deshmukh, the then Union Minister for Heavy Industries, after a Parliament session in November 2010. - R.V. MOORTHY

Forcing former Maharashtra Chief Minister Vilasrao Deshmukh to shell out Rs.10 lakh from his pocket will deter delinquency in public office.

ONE hopes that some public spirited citizen will move the High Court or the Supreme Court and ask it to strike down the Maharashtra government's outrageous and unheard of order to shell out Rs.10 lakh of the taxpayer's money to pay the fine that the Supreme Court had imposed for the personal wrongs of its former and delinquent Chief Minister, Vilasrao Deshmukh.

As H.M. Seervai pointed out, it is clear from Article 294 that assets and properties are vested in the Union or State governments for the purposes of the Union or the States, in short for a public purpose ( Constitutional Law of India; Fourth Edition; Volume 1; page 933, paragraph 10.418). Any executive or legislative action is subject to the fundamental rights. It is not the state which was found wrong by the court but a Minister who was punished because he had given a disgraceful and illegal direction. The Chief Minister was here on a frolic of his own. It was a personal act done by abusing the power of public office for political reasons.

On December 13, 2010, a Bench of the Supreme Court comprising Justices G.S. Singhvi and A.K. Ganguly indicted Vilasrao Deshmukh, now a Union Minister, for directing the police and the District Collector, in breach of the law, not to register criminal cases against a moneylender who was accused of charging callously exorbitant monthly interest at 10 per cent on loans advanced to poor farmers in Vidarbha, the country's suicide epicentre. He was one Gokulchand Sananda. But he was blessed with a son, Dilip Kumar, who, in turn, was blessed with a seat in the State Assembly. More than 30 criminal complaints (under the Moneylenders Act) were filed against Gokulchand. Deshmukh's intervention in 2006 served him. The court imposed a fine of Rs.10 lakh and directed that the amount be deposited with the State Legal Services Authority so that it can be used for fighting the case of poor farmers.

Deshmukh admitted before the court that he wrote a letter to the Buldhana District Collector in June 2006 not to pursue the complaint against Gokulchand. He also did not deny the two telephone calls made by his private secretary to the police stations concerned.

The court said: This being the ground reality, as CM of the State Mr Vilasrao Deshmukh, certainly acted beyond all legal norms by giving the direction to the Collector to protect members of a particular family. This amounts to bestowing special favour to some chosen few at the cost of the vast number of poor farmers.

On perusing the communication between the Collector and Deshmukh, the Bench concluded he had knowledge about the complaints. Even then he passed an order for a special treatment in favour of the family, which is unknown to law. It added: As a CM, Mr. Deshmukh has taken a solemn oath of allegiance to the Constitution but the directions he gave are wholly unconstitutional. (Bhadra Sinha, Hindustan Times, December 14, 2010).

Shocked by the gross abuse of power, the court said: Considering the entire matter in its proper perspective, this court is of the view that the way interference was caused from the office of the CM by his private secretary by two telephone calls on May 31, 2006, and the manner in which the District Collector was summoned by the CM on the very next day, June 1, 2006, for giving instructions to specially treat any complaint filed against MLA Dilip Kumar Sananda and his family members has no precedent either in law or in public administration.

The court directed registration of cases against the accused in the illegal moneylending ring and enhanced the cost imposed by the High Court on the State government from Rs.25,000 to Rs.10 lakh. Judging by the press reports, the fine was imposed on the State government.

A report in Asian Age of December 20, 2010, by Umesh Mohite cites instances of fines paid personally by the person indicted. How can the Contingency Fund be used in Deshmukh's case? Mohite recalls: This is the first time the state will be paying a fine from its own pocket. In the past, officials have been made to shell out fines ranging between Rs.1,000 and Rs.30,000. In fact, the Commissioner of Mumbai Police and [the] Additional Chief Secretary (Home) were made to pay a fine of Rs.30,000 each for taking undue, hasty action under the Maharashtra Prevention of Dangerous Activities Act against Arun Gawli in 1997.

Mr Deshmukh had called the Superintendent of Police and [the] Collector at Buldhana to stall police action (under the law). Also, while it is an unwritten rule that the official because of whom the fine is imposed on the state, is supposed to pay the same from his pocket, this is the first time the state will be paying a fine out of its coffers.

More, the government has ordered police officials not to record phone calls. This is also open to challenge. The calls are not personal but public and record the work of a law-enforcing investigative agency. To tamper with the public record is to undermine the integrity of its work and undermine the rule of law. The courts will be hampered.

SATISH SHARMA, FORMER Minister of State for Petroleum and Natural Gas, a file photograph.-V. SUDERSHAN

Forcing Vilasrao Deshmukh to shell out Rs.10 lakh from his own pocket will deter delinquency in public office. As Machiavelli said, a man will sooner forget the death of his beloved than the confiscation of his property. Inroads into the pockets will induce a sense of responsibility and accountability in Ministers and civil servants.

This would not be a particularly radical innovation. Far more than is realised, the principle of personal liability of public servants for wrongs done to citizens is already part of Indian law. Our law of civil wrongs or torts is entirely based on English case law as followed in Indian cases. And, as Lord Denning has summed up, it is a settled principle of English law that when an official duty is laid on a public officer, by statute or by common law, then he is personally responsible for seeing that the duty is carried out if the duty is broken, and injury done thereby to one of the public, then the public officer is answerable. The injured person can sue him in the civil courts for compensation.

Suits for damages

Before the summary remedy of prerogative writs came into vogue, the familiar remedy was a suit for damages against the officials concerned. The famous cases which centred round John Wilkes two centuries ago were suits for damages against the officials who executed illegal warrants of arrest and search as if they were private individuals.

This principle still holds good and has been restated in a classic work on administrative law commonly accepted as an authority in Indian courts: Public authorities, including Ministers of the Crown, enjoy no dispensation from the ordinary law of tort and contract except insofar as the statute gives it to them. Unless acting within their powers, they are liable like any other person for trespass, nuisance, negligence, and so forth.

Statutes that confer power on Ministers or civil servants do not protect them if the power is exercised without reasonable care to the detriment of a citizen's rights. Failure to perform statutory duties, likewise, exposes officials to suits for damages. A candidate who lost an election because the polling officer failed to provide proper ballot papers, a postmaster who failed to deliver letters for 10 days, the managers of a statutory lottery who failed to declare the right winner, a customs officer who refused to clear goods except on payment of excessive duty, and a municipality which failed to remove garbage had each to pay damages to the person aggrieved. A Governor of Jamaica and a Secretary of State suffered the same fate.

It is strange that in a country that has witnessed some of the gravest possible abuse of power by Ministers, never has the delinquent been made to pay for the well-recognised tort of misfeasance by a public officer in the discharge of his public duties. It consists of either malicious exercise of power or intentional usurpation of power with full knowledge that it does not legitimately belong. Neither is rare. The law assigns to malice a meaning different from what the dictionaries give it. It means acting for a reason and purpose knowingly foreign to the administration; for considerations extraneous (read, political).

It is open to the plaintiff to sue the state or its Minister or both. The British Ministry of Agriculture, Fisheries and Food was ordered to pay damages for improper revocation of a general licence to import turkeys from France. The Prime Minister of Quebec was ordered to pay damages personally by the Supreme Court of Canada in 1959. Acting on instructions which he had no right whatever to give, the Quebec Liquor Commission revoked the licence of a person who had aroused the Prime Minister's ire because he provided bail for fellow-members of a sect whose activities were offensive to the government.

The fact that the Premier believed that he was acting in the best interest of Quebec was irrelevant, the court ruled. Nor was proof of malice necessary. The issue simply was usurpation of power, for which he had to compensate the citizen whom he had wronged. This is good law in India as well where extralegal interference in administration is all too common.

The law goes further to say that in such cases exemplary damages should be awarded. As Lord Devlin put it, for oppressive, arbitrary or unconstitutional action by the servants of the government exemplary damages must be awarded. The servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service. The award will curb the arbitrary and outrageous use of executive power and serve a useful purpose in vindicating the strength of the law.

In 1980, the Privy Council followed this ruling and awarded exemplary damages in a case that concerned the abuse of the power of preventive detention. The Privy Council confirmed on appeal that the regulations were unconstitutional and the detention was unjustified. The state's appeal court had raised the $5,000 damages awarded by the trial court to $18,000. The Privy Council upheld the increase and explicitly approved Lord Devlin's dicta.

True, the National Security Act, 1980, like most Indian statutes, bars suits and prosecution against the Central or State governments and their officers for anything in good faith done or intended to be done in pursuance of the Act. The omnibus General Clauses Act, 1897, defines the words good faith when they occur in a Central statute to mean where it is in fact done honestly, whether it is done negligently or not. Curiously, the expression good faith as defined in the Penal Code (Section 52) requires the exercise of due care and caution. There is thus a stricter test for exemption from criminal liability for the citizen and a weaker one for exemption from civil liability for the state and its officials.

FORMER HARYANA CHIEF Minister Bhajan Lal. In a case in 1985, the Supreme Court repeatedly mentioned and censured his role in favouring, unfairly, one company over another.-AKHILESH KUMAR

That apart, the total exclusion of negligence itself as a ground of state liability is clearly violative of the fundamental right to equality and to equal protection of the law. It is void. Here is a classic instance of a colonial statute that stands unamended although it makes a mockery of the rule of law and impedes the Indian citizen's access to courts of law. It is unlikely that this impediment can long survive if citizens assert their rights and make Ministers and civil servants pay for the wrongs they perpetrate.

The Supreme Court came close to imposing on a Minister who deals with public funds and public property the responsibilities of a trustee. In a shocking case it backtracked. The error must now be put right whether in A. Raja's 2G spectrum case or in Deshmukh's.

Petrol pump case

On September 25, 1996, a Bench of the Supreme Court, comprising Justices Kuldip Singh and Faizan Uddin, quashed 15 scandalous allotments of petrol pumps by Satish Sharma, Minister of State for Petroleum and Natural Gas, and issued a show-cause notice to him ( Common Cause vs Union of India (1996) 6 SCC 530). On November 4, 1996, after a full hearing, it ordered him to pay a sum of Rs.50 lakh as exemplary damages to the government exchequer and directed the Central Bureau of Investigation (CBI) to register a case against him for investigation in the light of the findings of fact ((1996), 6 SCC 593).

But, on August 3, 1999, another Bench of the court, comprising Justices S. Saghir Ahmed, K. Venkataswami and S. Rajendra Babu, allowed Sharma's review petition and held that the judgment was vitiated by errors apparent on the face of the record, which has resulted in serious miscarriage of justice ((1999), 6 SCC 667). These very words are apt characterisations of the judgment Justice Saghir Ahmed delivered on behalf of the Bench and of its order recalling the earlier order of payment of Rs.50 lakh by Sharma and a CBI probe against him. For, the Bench completely overlooked a relevant ruling delivered by the court itself and mis-stated the law on misfeasance in public office with grave and lasting consequences. This judgment must be overruled before long.

Consider the gross errors. Justice Saghir Ahmed ruled that the petitioner Common Cause, headed by the dedicated H.D. Shourie, not being an applicant for allotment of a petrol outlet could not have obtained a finding in the civil suit that the petitioner [Satish Sharma, who had filed a review petition] had committed the tort of misfeasance in public office. there has to be an identifiable plaintiff or claimant whose interest was damaged by the public officer maliciously or with the knowledge that the impugned action was likely to injure the interest of that person. This is inconsistent with the sound exposition by the Bench itself of the distinction between the private law of tort and the public law.

It is in flat contradiction to the court's earlier ruling, which is directly on point. In Shivsagar Tiwari vs Union of India and Others, decided by Justices Kuldip Singh and B.I. Hansaria on October 11, 1996, concerning Sheila Kaul, Minister for Urban Development (the housing scam), the court, recalling English and Commonwealth cases, said:

We are conscious that the aforesaid cases dealt with injury to a third party (following misuse of power) who had sought damages for the loss caused, whereas in the present case there is no injury as such to any third person. Even so, the aforesaid cases have been referred for two purposes. Firstly and primarily, to bring home the position in law that misuse of power by a public official is actionable in tort. Secondly, to state that in such cases the damages awarded are exemplary. The fact that there is no injury to a third person in the present case is not enough to make the aforesaid principles non-applicable. (1996, 6 SCC 558. See also (1996), 6 SCC 599 on exemplary damages.)

The facts were set out in detail, with Satish Sharma's notings, in Justice Kuldip Singh's judgment. The court issued notice to all the 15 allottees, 13 of whom filed affidavits in justification. It recorded that Satish Sharma has, however not chosen to file any affidavit. The Secretary in his Ministry, Vijay L. Kelkar, did and justified the allotments on two grounds. First, they were made prior to the court's order of March 31, 1995, endorsing certain guidelines to regulate discretionary allotments of petrol pumps. Secondly, they were made on merits of each case it is denied that they were made on account of alleged relationship and/or any improper motive. He thus contested the charges upfront. The court, thereupon, directed him to file a further and better affidavit with reference to the specific instances, which he did. The files were also produced.

In the teeth of this record, Satish Sharma contended, in his reply to the show-cause notice, that he was not a party in the case and these proceedings were defended by the Central government in a non-adversarial manner by placing all the facts before this Hon'ble Court. The reviewing Bench ought to have thrown out his petition for this brazen mis-statement alone.

He was Minister from January 8, 1993, to May 16, 1996. The court's guidelines of March 31, 1995, stopped the rake's progress. The first allotment was made on January 31, 1993, to a son of Buta Singh, Minister for Civil Supplies; the last on May 19, 1995 to Satish Sharma's driver's mother.

In at least two cases, the Under Secretary, S.K. Singh, pointed out the irregularities. In each, Satish Sharma used the standard formulation: I have examined the application carefully. None was officially received by the Ministry, the court noted. All seem to have approached the Minister directly. Since no advertisements were issued, how the applicants came to know of the availability of the pumps is not a mystery. The grounds that Satish Sharma cited were either poverty or unemployment. Six of the allottees were related to his officials, two to politicians. The rest were either chairmen or members of the oil selection boards or their relations. The court found that this was done to influence them and to have favours from them.

Justice Kuldip Singh relied on the Supreme Court's landmark ruling in 1994 on misfeasance in public offices and observed: A Minister in the Central government is in a position of a trustee in respect of the public property under his charge and discretion. He did not hold him to be a trustee as such, still less applied the law of trusts, civil or criminal, to Ministers.

But the reviewing Bench called it a philosophical concept which reflects the image of virtue in its highest conceivable perfection, apparently, inapplicable to ordinary mortals. The Bench not only overlooked the court's own rulings to the contrary but the fact that English rulings mention the ingredient of injury only because no case of mere nepotism was decided. However, the other ingredients listed are relevant to Sharma's conduct as noted above. In his classic judgment in 1964 on exemplary damages, Lord Devlin mentioned this essential ingredient: where there has been oppressive, arbitrary or unconstitutional action by the servants of the government.

In our polity where public accountability is not strong, the Bench ought not to have insisted on injury to an identifiable person. Abuse of power is a wrong to the nation. It also overlooked an important consideration when it held that the state cannot legally claim that since one of its Ministers or officers had violated the fundamental rights of a citizen or had acted arbitrarily, it would be compensated by awarding, exemplary damages against that officer or minister. This is odd. The state never sues its Ministers. It is the citizen who does that. His success in court will compel the government to throw out the delinquents it protects, as in Sheila Kaul's case. The court next proceeded to identify the public law offence of misfeasance in public office with the criminal offence of breach of trust as defined in the Penal Code (Section 405).

A Chief Minister censured

The court very well knew of the steep decline in the standards of public morality. Consider this case decided by the Supreme Court itself on May 8, 1985, in which the clearest reference was made to the Chief Minister of Haryana, Bhajan Lal ( Ram & Shyam Co. vs the State of Haryana; AIR 1985 Supreme Court, page 1147). It set aside an order of the Director of Industries dated May 25, 1981, granting a mining lease to M/s. Pioneer Crushing Co., (Respondent) for a mere Rs.4,50,000. The court directed the Government of Haryana to grant a right to the appellant, Ram & Shyam Company, in the form of contracts usually entered into in similar cases on terms embodied in the order. This company was in fact the highest bidder in the earlier auctions. But the Chief Minister directed the grant of a licence to Pioneer Crushing Co. instead, without even informing Ram & Shyam Company.

The court's observations are reproduced below in extenso: Shock and surprise was visible on the face of each one in the court. Shock was induced by the fact that public property was squandered away for a song by persons in power who hold the position of trust. Surprise was how judicial intervention can serve larger public interest. One would require multilayered blindfold to reject the appeal of the appellant on any tenuous ground so that the respondent may enjoy and aggrandise his unjust enrichment. On this point we say no more.

It added: To whom do you appeal in a State administration against the decision of the Chief Minister? The clich of appeal from Caesar to Caesar's wife can only be bettered by appeal from one's own order to oneself. Therefore, this is a case in which the High Court was not at all justified in throwing out the petition on the untenable ground that the appellant had an effective alternative remedy. The High Court did not pose to itself the question, who would grant relief when the impugned order is passed at the instance of the Chief Minister of the State. To whom did the High Court want the appeal to be filed over the decision of the Chief Minister? There was no answer and that by itself without anything more would be sufficient to set aside the judgment of the High Court. Vilasrao Deshmukh was also Chief Minister.

A unilateral offer, secretly made, not correlated to any reserved price made by the fourth respondent after making false statement in the letter, was accepted without giving any opportunity to the appellant either to raise the bid or to point out the falsity of the allegations made by the fourth respondent in the letter as also the inadequacy of his bid. The appellant suffered an unfair treatment by the state in discharging its administrative functions thereby violating the fundamental principle of fair play in action. When he gave the highest bid, he could not have been expected to raise his own bid in the absence of a competitor. Any expectation to the contrary betrays woeful lack of knowledge of auction process. And then someone surreptitiously by a secret offer scored a march over him. No opportunity was given to him either to raise the bid or to controvert and correct the erroneous statement.

The disposal of the contract pursuant to the letter by the fourth respondent to the Chief Minister is objectionable for more than one reason. The writer has indulged in allegations, the truth of which was not verified or asserted. The highest bidder whose bid was rejected on the ground that the bid did not represent the market price, was not given an opportunity to raise his own bid when privately a higher offer was received. If the allegations made in the letter influenced the decision of the Chief Minister, fair play in action demands that the appellant should have been given an opportunity to counter and correct the same. Application of the minimum principles of natural justice in such a situation must be read in the statute and held to be obligatory. When it is said that even in administrative action the authority must act fairly, it ordinarily means in accordance with the principles of natural justice variously described as fair play in action. That having not been done, the grant in favour of the fourth respondent must be quashed. Thus Chief Minister Bhajan Lal was repeatedly mentioned and repeatedly censured by the Supreme Court.

Judicial creativity is but an aspect of judicial activism within the law. There was ample ground before the court to erect the edifice of trusteeship; not in the sense of the offence in criminal law or even in civil law, but in public law as recognised by the authorities.

In Three Rivers District Council vs Bank of England (No. 3) it was held that the tort of misfeasance in public office was concerned with a deliberate and dishonest abuse of the powers given to a public officer and the purpose of the tort was to provide compensation for those who suffered loss as a result of abuse of power. The conclusions reached in that case, inter alia, were: The tort of misfeasance in public office is concerned with a deliberate and dishonest wrongful abuse of the powers given to a public officer. It is sufficient that the officer had actual knowledge that the act was unlawful or, in circumstances in which he believes or suspects that the act is beyond his powers, that he does not ascertain whether or not that is so or fails to take such steps as would be taken by an honest and reasonable man to ascertain the true position.

Misfeasance in public office is explained by William Wade in his book Administrative Law thus: Even where there is no ministerial duty as above, and even where no recognized tort such as trespass, nuisance, or negligence is committed, public authorities or officers may be liable in damages for malicious, deliberate or injurious wrongdoing. There is thus a tort which has been called misfeasance in public office, and which includes malicious abuse of power, deliberate maladministration and perhaps also other unlawful acts causing injury.

Deshmukh knew he had not the power to intervene, but intervene he did. No words need be wasted on A. Raja. The court will pronounce its verdict on the 2G spectrum case. The Supreme Court itself knew very well the gravity of Satish Sharma's wrongdoing: The conduct of the petitioner in making allotments of petrol outlets was atrocious, specially those made in favour of members, Oil Selection Board, or their sons, etc., and reflects a wanton exercise of power by the petitioner. This court has already used judicial vituperative [ sic] in respect of such allotments and we need not strain our vocabulary any further in that regard. Suffice it to say that though the conduct of the petitioner was wholly unjustified, it falls short of misfeasance in public office' which is a specific tort and the ingredients of that tort are not wholly met in the case. That being so, there was no occasion to award exemplary damages.

The law does not support the conclusion Justice Saghir Ahmed so confidently drew. He himself recalled: The court also appears to have invoked the Doctrine of Public Trust' which is a doctrine of environmental law under which the natural resources such as air, water, forests, lakes, rivers and wildlife are public properties entrusted' to the government for their safe and proper use and proper protection. Public Trust Law recognises that some types of natural resources are held in trust by the government for the benefit of the public. The Doctrine of Public Trust' has been evolved so as to prevent unfair dealing with or dissipation of all natural resources. This doctrine is an ancient and somewhat obscure creation of Roman and British law which has been discovered recently by environmental lawyers in search of a theory broadly applicable to environmental litigation.

This doctrine was considered by this court in its judgment in M.C. Mehta vs Kamal Nath to which one of us (S. Saghir Ahmed, J.) was a party. Justice Kuldip Singh, who authored the erudite judgement and has also otherwise contributed immensely to the development of environmental law, relying upon ancient Roman Doctrine of Public Trust', as also the work of Joseph L. Sax, Professor of Law, University of Michigan, and other foreign decisions, wrote out that all natural resources are held in trust' by the government. The doctrine enjoins upon the government to protect the resources for the enjoyment of the general public rather than to permit their use for private ownership or commercial purposes. But this doctrine cannot be invoked in fixing the criminal liability and the whole matter will have to be decided on the principles of criminal jurisprudence, one of which is that the criminal liability has to be strictly construed and offence can be said to have been committed only when all the ingredients of that offence as defined in the statute are found to have been satisfied.

The fallacy is glaring. A doctrine of public law is wrongly identified with an offence in criminal law. From trusteeship of natural resources (for instance, the spectrum) it is just a short step to trusteeship of public property and public money; allied to it is abuse of public office.

Deshmukh aborted the very commencement of the process of law. A popular hero, A.K. Fazlul Haq, interfered with it midstream. Huq was Chief Minister of undivided Bengal from 1937 to 1943. He interfered in the trial of a criminal case by a District Magistrate. Chief Justice Derbyshire's censure, in elegant prose, applies to Deshmukh and the likes of him ( Pollard vs Satya Gopal AIR 1943 Calcutta 594).

He said: If the legitimate and proper transport of food can be interfered with and the malefactors protected by the Chief Minister of the Province when they are brought before the courts of law, there is an end of law and order in the province.

The result is that instead of the orderly distribution of food there is a scramble for it, in which the weakest suffer. Mr Fazlul Haq was Minister for the Home Department at the time this rice looting took place. The looted rice was intended for the Berhampore Jail. The administration of jails is a matter with which the Home Department is charged. But neither the solemn oath nor public responsibility prevented him from doing this nefarious work.

A person who takes an oath or makes an affirmation to tell the truth in a judicial proceeding and breaks it is guilty of perjury and may be punished at law by the courts. A person, however, who on taking up an office is required by law to take an oath of office that he will faithfully perform the duties of that office takes what is called a promissory oath. The breach of a promissory oath, in the absence of a special provision of law to that effect, is not punishable at law. As far as I am aware there is no punishment in law for the breaking of the promissory oath taken by Mr Fazlul Huq when he assumed office as Chief Minister.

But the clear violation of it brands a man as unfit for public office. If solemn promissory oaths by persons who take high office in the State are to be disregarded as mere formalities there is no possibility of good government. Mr Huq is left to the contemplation and judgment of his fellowmen.

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