Introduction:
In India, there are two statutes dealing with personal insolvency (including proprietorships and partnerships). One is Presidency Towns Insolvency Act, 1909, applicable to the erstwhile presidency towns of Bombay, Calcutta and Madras. The other one is Provincial Insolvency Act, 1920, applicable to the rest of India. The district court has the jurisdiction to try cases pertaining to insolvency under the Act.
When an order of insolvency is passed, all personal properties of the individual are vested in the Official Assignee appointed by the government of India, who then realizes it and allocates it among the creditors of the insolvent. An insolvent person is barred from enjoying several civil rights. Further, criminal proceedings can also be initiated against the insolvent.
A concept slightly different from insolvency is bankruptcy which is very popular in the western countries. A bankruptcy is when a person voluntary declares himself as an insolvent and goes to the court. On declaring the person as ‘bankrupt’, the court is responsible to liquidate the personal property of the insolvent and distribute it among the creditors of the insolvent. This process is rather amicable which seeks to avoid the threatening calls and gestures of the creditors. It provides a fresh lease of life to the insolvent. However, declaration of personal bankruptcy also has its own disadvantages. Following are some prominent ones in India:
- Societal stigma is faced by the insolvent. In India, bankruptcy or insolvency is considered as extremely demeaning. People hesitate in declaring bankruptcy because of the fear of being ostracized by the society.
- The insolvent person loses credibility in the eyes of future creditors. His repaying capabilities are often questioned and he develops the image of a defaulter. He remains on the CIBIL list for 10 years during which it becomes almost impossible for him to take loans.
- In India, the whole process is time consuming because of slow functioning of the courts. As per the World Bank data the time to resolve insolvency in India in years is 4.3.
Considering the abovementioned reasons, the Government of India has set in motion a plan to overhaul the existing bankruptcy laws and replace them with one that will facilitate easy and time bound closure of businesses. The draft legislation is based on the report of a high level panel headed by former law secretary T.K. Viswanathan. The finance ministry has put up the Insolvency and Bankruptcy Bill, 2015 on its website for public comments till 19 November, after which it will place the bill before Parliament in the winter session for approval.
The Insolvency and Bankruptcy Bill, 2015
The proposed bankruptcy code is aimed at creating an overarching framework to make it easier for sick companies as well as individuals to either wind up their business or engineer a turnaround, and for investors to exit.
It will cover individuals, companies, limited liability partnerships, partnership firms and other legal entities registered in India as may be notified, except for those with a dominantly financial function.
RECOMMENDATIONS OF THE BILL
a. Insolvency Regulator: The Bill proposes to establish an Insolvency Regulator to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and informational utilities.
b. Insolvency Adjudicating Authority: The Adjudicating Authority will have the jurisdiction to hear and dispose of cases by or against the debtor.
The Debt Recovery Tribunal (“DRT”) shall be the Adjudicating Authority with jurisdiction over individuals and unlimited liability partnership firms. Appeals from the order of DRT shall lie to the Debt Recovery Appellate Tribunal (“DRAT”).
The National Company Law Tribunal (“NCLT”) shall be the Adjudicating Authority with jurisdiction over companies, limited liability entities. Appeals from the order of NCLT shall lie to the National Company Law Appellate Tribunal (“NCLAT”).
NCLAT shall be the appellate authority to hear appeals arising out of the orders passed by the Regulator in respect of insolvency professionals or information utilities.
c. Insolvency Professionals: The draft Bill proposes to regulate insolvency professionals and insolvency professional agencies. Under Regulator’s oversight, these agencies will develop professional standards, codes of ethics and exercise a disciplinary role over errant members leading to the development of a competitive industry for insolvency professionals.
d. Insolvency Information Utilities: The draft Bill proposes for information utilities which would collect, collate, authenticate and disseminate financial information from listed companies and financial and operational creditors of companies. An individual insolvency database is also proposed to be set up with the goal of providing information on insolvency status of individuals.
e. Bankruptcy and Insolvency Processes for Companies and Limited Liability Entities: The draft Bill proposes to revamp the revival/reorganization regime applicable to financially distressed companies and limited liability entities; and the insolvency related liquidation regime applicable to companies and limited liability entities.
- The draft Bill lays down a clear, coherent and speedy process for early identification of financial distress and revival of the companies and limited liability entities if the underlying business is found to be viable.
- The draft Bill prescribes a swift process and timeline of 180 days for dealing with applications for insolvency resolution. This can be extended for 90 days by the Adjudicating Authority only in exceptional cases. During insolvency resolution period (of 180/270 days), the management of the debtor is placed in the hands of an interim resolution professional/resolution professional.
- An insolvency resolution plan prepared by the resolution professional has to be approved by a majority of 75% of voting share of the financial creditors. Once the plan is approved, it would require sanction of the Adjudicating Authority. If an insolvency resolution plan is rejected, the Adjudicating Authority will make an order for the liquidation.
- The draft Bill also provides for a fast track insolvency resolution process which may be applicable to certain categories of entities. In such a case, the insolvency resolution process has to be completed within a period of 90 days from the trigger date. However, on request from the resolution professional based on the resolution passed by the committee of creditors, a one time extension of 45 days can be granted by the Adjudicating Authority. The order of priorities in which the proceeds from the realisation of the assets of the entity are to be distributed to its creditors is also provided for.
f. Bankruptcy and Insolvency Processes for Individuals and Unlimited Liability Partnerships: The draft Bill also proposes an insolvency regime for individuals and unlimited liability partnerships also. As a precursor to a bankruptcy process, the draft Bill envisages two distinct processes under this Part, namely, Fresh Start and Insolvency Resolution.
- In the Fresh Start process, indigent individuals with income and assets lesser than specified thresholds (annual gross income does not exceed Rs. 60,000 and aggregate value of assets does not exceed Rs.20,000) shall be eligible to apply for a discharge from their “qualifying debts” (i.e. debts which are liquidated, unsecured and not excluded debts and up to Rs.35,000). The resolution professional will investigate and prepare a final list of all qualifying debts within 180 days from the date of application. On the expiry of this period, the Adjudicating Authority will pass an order on discharging of the debtor from the qualifying debts and accord an opportunity to the debtor to start afresh, financially.
- In the Insolvency Resolution Process, the creditors and the debtor will engage in negotiations to arrive at an agreeable repayment plan for composition of the debts and affairs of the debtor, supervised by a resolution professional. iii. The bankruptcy of an individual can be initiated only after the failure of the resolution process. The bankruptcy trustee is responsible for administration of the estate of the bankrupt and for distribution of the proceeds on the basis of the priority.
g. Transition Provision: The draft Bill lays down a transition provision during which the Central Government shall exercise all the powers of the Regulator till the time the Regulator is established. This transition provision will enable quick starting of the process on the ground without waiting for the proposed institutional structure to develop.
h. Transfer of proceedings: Any proceeding pending before the AAIFR or the BIFR under the SICA, 1985, immediately before the commencement of this law shall stand abated. However, a company in respect of which such proceeding stands abated may make a reference to Adjudicating Authority within 180 days from the commencement of this law.
EVALUATION OF RECOMMENDATIONS
The objective of the bankruptcy Law is to create a specialized class of insolvency professionals who will assist companies through the bankruptcy process. Insolvency information utilities will collect, collates, authenticate and disseminate financial information from listed companies and financial and operational creditors of companies. A database will be created to provide information on the insolvency status of individuals.
The committee also proposed an insolvency adjudicating authority that will have the jurisdiction to hear and dispose of cases by or against debtors. While the Debt Recovery Tribunal will be the adjudicating authority with jurisdiction over individuals and unlimited liability partnership firms, the National Company Law Tribunal will be the authority with jurisdiction over companies and limited liability entities.
The draft bill contains provisions to speed up the process of revival/reorganization of financially distressed companies and limited liability entities and the insolvency related liquidation regime applicable to companies and limited liability entities as it lays down a process for early identification of financial distress and revival of companies and limited liability entities if the underlying business is found to be viable. It proposes a timeline of 180 days for dealing with applications for insolvency resolution with an option of extending it by 90 days.
There are no perfect laws and bankruptcy codes anywhere in the world. However, it is imperative to have a robust insolvency code and to keep improving it to suit the specific needs of the country and the existing business environment. The presence of a strong framework to deal with corporate insolvency and creditor and debtor protection is vital to unlock new avenues for funding and foster growth in credit markets. Such a law would enhance the position of lenders who have traditionally been in a weaker position, without being unfair to scrupulous borrowers.
RIGHT TO INFORMATION & EVIDENCE
This is a time when a lot of information is being gathered with the help of RTI Act. In fact, there are specialists in the field popularly known as RTI Activists. Without going into the motive of the RTI Activists and thinking purely from a legal point of view the question arises is “Does the information gathered under the RTI Act can be termed as good evidence under the Evidence Act”.
The Information given under the RTI Act is in reply to the information sought by the Applicant under the RTI Act. This reply is correlated to the query and has to be in the context of information that is sought. Thus any reply can never be read in isolation and has to be read along with the information sought. Further, the information may not be complete and it is only based on what is there in record and is in reply to the query and therefore it is important to have the copy of the documents based on which the information is provided. This certified copy can be termed as good evidence.
Section 79 of the Indian Evidence Act reads as under:
“The Court shall presume to be genuine every document purporting to be a certificate, certified copy, or other document, which is by law declared to be admissible as evidence of any particular fact, and which purports to be duly certified by any officer of the Central Government or of a State Government, or by any officer in the State of Jammu and Kashmir who is duly authorized there to by the Central Government:Provided that such document is substantially in the form and purports to be executed in the manner directed by law in that behalf. The Court shall also presume that any officer by whom any such document purports to be signed or certified, held when he signed, the official character which he claims in such paper”.
Any person, who obtains the information under the Right to Information Act may either receive incomplete or complete information. It is, therefore, that when the informant is required to prove the case before any authority, or judicial authority, the same has to be proved completely by discharging the “onus”. The Public Information officer is parting with the information that is available on record, but the supplied information, although issued by the public authority remains “uncorroborated”.
Under Section 2 (j) (ii) of the RTI Act, the applicant can ask for certified copies of the documents or records. This certified copy of the document giving information can be admitted in the Court as Secondary Evidence. Note that under the RTI Act, the right to information includes the right to inspection of work, documents and records; taking notes, extracts or certified copies of documents or records; and taking certified samples of material held by the public authority or held under the control of the public authority. A citizen has a right to obtain information from a public authority in any relevant form including in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through print-outs provided such information is already stored in a computer or in any other device from which the information may be e-mailed or transferred to diskettes etc.
Information obtained under the RTI Act is part of the documents held by Public Authority, who are Gazetted officers. A certified copy of a document received by virtue of the RTI Act is secondary evidence as provided under Section 63 of Evidence Act, 1872. It can be used as Secondary Evidence in Court, since it is part of the Government records and provided by Govt. Authorities, certified under Govt. Seal.
For information obtained under the Act to be admissible in Court, it is essential that a certified copy of the same is obtained. The information can become important evidence and it can be used for proving one’s stand-in Court. Hence, it is advisable to base the pleading based on such information and ask the parties involved in litigation to produce the document by way of discovery as provided under the provisions of the Civil Procedure Code. Once, the documents are placed in compliance with the order of the court, it can be treated as authenticated and genuine documents. However, such documents placed on record by way of discovery are still required to be either proved or disproved as provided under the Indian Evidence Act. The “relevant fact” has to be established and proved.
These days the Courts are allowing information obtained under RTI as evidence in an increasing number of cases. In fact in one of the recent cases Madhya Pradesh High Court held that “certified copy of documents obtained under Right to Information Act 2005 can be admitted as secondary evidence” (Narayan Singh vs Kallaram @ Kalluram Kushwah decided on 19 March 2015, Writ Petition No. 7860/2014) it held that Clause (f) of Section 65 of Evidence Act makes it crystal clear that a certified copy permitted under the Evidence Act or by any other law in force can be treated as secondary evidence. Right to Information Act, in courts view, falls within the ambit of “by any other law in force in India”. The definition of “right to information” makes it clear that certified copies of documents are given to the citizens under their right to obtain information. In the court’s view, the court below has rightly opined that the documents can be admitted as secondary evidence. Hon’ble Court did not see any merit in the contention that the documents obtained under the Act of 2005 are either true copies or attested copies. Court held that the definition aforesaid shows that the same are certified copies. Even otherwise, it is interesting to note that in Black Dictionary, the meaning of “certified copy” is as under:-“Certified copy” – a copy of a document or record, signed or certified as a true copy by the officer to whose custody original is entrusted.”
The Court further held that “Since the documents are covered under section 65 of the Evidence Act, there was no need to compare the same with the originals”.
CDs are documents and can be considered as evidence under the law: SC
The Supreme Court has ruled that a compact disc (CD) is a document under Section 3 of the Indian Evidence Act, 1872. The Court also held that a CD has to be exhibited/played by the trial court to enable the public prosecutor to admit or deny its genuineness under Section 294 of the Code of Criminal Procedure (CrPC).
The decision was rendered by a Division Bench of PC Pant and Dipak Misra JJ. in an appeal against the decision of the High Court of Punjab and Haryana in the case of Shamsher Singh Verma Vs. The state of Haryana.
The appellant-accused is on trial for molestation of his niece and is currently lodged in jail. He had sought to rely on the recording of a conversation between his wife and son, and the father of the victim. The appellant had moved an application Section 294 of CrPC to get the CD player in the court for preserving a copy of the text contained, and therein for further communication to the Forensic Laboratory for establishing its authenticity. The application had however been rejected by the trial judge. The High Court had affirmed the order passed by a Special Judge.
The question before the Supreme Court was whether the Special judge was correct in denying the application to play the CD so that its genuineness could be considered and established. Relying on the various decisions of the Supreme Court, the Court interpreted Section 3 of the Indian Evidence Act to hold that a CD is a “document” and no need to make an application u/s 294 of Cr. PC.
“In R.M. Malkani vs. State of Maharashtra, this Court has observed that tape-recorded conversation is admissible provided first the conversation is relevant to the matters in issue; secondly, there is identification of the voice; and, thirdly, the accuracy of the tape-recorded conversation is proved by eliminating the possibility of erasing the tape record.
In Ziyauddin Barhanuddin Bukhari vs. Brijmohan Ramdass Mehra and others, it was held by this Court that tape-records of speeches were “documents”, as defined by Section 3 of the Evidence Act, which stood on no different footing than photographs.
In view of the definition of ‘document’ in Evidence Act, and the law laid down by this Court, as discussed above, the Court held that the “compact disc is also a document.”
The Court then proceeded to hold that since CD is a document under Section 3 of the Evidence Act, it is not necessary for the court to obtain admission or denial on a document under sub-section (1) to Section 294 CrPC personally from the accused or complainant or the witness. It held that the endorsement of admission or denial made by the counsel for the defence, on the document filed by the prosecution or on the application/report with which same is filed, is sufficient compliance of Section 294 CrPC. The court also turned down the contention of the respondent that the petition has been filed to prolong the trial.
“In our opinion, the courts below have erred in law in rejecting the application to play the compact disc in question to enable the public prosecutor to admit or deny, and to get it sent to the Forensic Science Laboratory, by the defence. The appellant is in jail and there appears to be no intention on his part to unnecessarily linger the trial, particularly when the prosecution witnesses have been examined.
Therefore, without expressing any opinion as to the final merits of the case, this appeal is allowed, and the orders passed by the courts below are set aside.”
One of the most conspicuous and significant outcome of the process of globalization and liberalization has been the opening up of economies of evidently all the countries around the globe. There has been mounting pressure from members of the WTO for the opening of the legal services sector in India. On the other hand, there has been a strong apprehension of the Bar Association of India and particularly the Bar Council of India in permitting foreign law firms to enter India as according to them, it may lead to the shrinking of opportunities available to the domestic lawyer.
As India is a signatory to the General Agreement on Trade and Services (GATS), it has an obligation to liberalise its legal sector. It has not been able to make much headway on this due to stiff opposition from Indian lawyers’ representative bodies Bar Council of India (BCI) and Society of Indian Law Firms (SIFL) and legal cases against allowing foreign law firms to practice international law in India.
The Indian Legal Profession
The legal profession in India is one of the most lucrative and cumulative profession, with approximately more than 6 million advocates practicing in this arena. The chief players providing service in this sector includes individual lawyers and majorly family-run law firms. It is pertinent to note here that the right of an advocate to practice law is not a fundamental right but a statutory right; as it is governed by the provisions of the Advocates Act, 1961 (hereinafter to be known as ‘the Act’) and the Bar Council of India Rules, 1975 (hereinafter to be know as ‘the Rules).
The Act, states that from the appointed day, there will be only one recognized class of persons entitled to practice the profession of law; that is advocates. Section 2 (1) (a) of the Act defines an advocate as an advocate entered in any roll under the provisions of the Act. To be clearer, a person who has a law degree recognized by the Bar Council of India and who is enrolled with any State Bar Council is an advocate entitled to practice law in India. It is also to be noted that the Rules may prescribe a class of or category of persons entitled to be enrolled as advocates, also the conditions subject to which an advocate must have the right to practice and the circumstances under which a person must be deemed to practice as an advocate in a court.
It is worthwhile to note here that advocates are divided, broadly, into two groups: senior advocates and other advocates. Moreover, unlike the United Kingdom, where the legal services are rendered by two classes of legal professionals — barristers and solicitors; in India, there is no such classification per se. The role of the barrister comprises of litigation, i.e. representing clients in the proceedings of the courts and giving specialist legal opinions. Solicitors, conversely, advice their clients on an array of matters affecting their legal rights, including transactional work; but their work does not include litigation. In India, these two roles are fused; an advocate enrolled with the Bar Council of India (the body that regulates the legal professional) is competent to perform both the services and he often does so.
Moving forward, it is submitted that the legal profession in India, which is viewed as a ‘noble profession’, is not free from the shackles of regulations. In a number of judicial pronouncements delivered by the Honourable Supreme Court of India, these regulations have been justified on the ground of public policy and dignity of the profession.
It is pertinent to mention here that over the past decade there has been a sea change in this profession and it has become very competitive and promising. It may be said that the credit, though not absolutely, goes to the processes of globalization and commercialization, which has, by enlarging and modifying the Indian economy, resulted in an enormous demand for professional legal services all around the Indian nation. Needless to say, with the advent of globalization and the consequent development of corporate and other allied laws and regulations, the importance of corporate legal advice from lawyers has evolved into a much bigger practice than litigation practice and consequently has led to the establishment of the overwhelming number of law firms.
Unfortunately, though the demand in the Indian legal sector is met by the domestic lawyers, there is still a dearth of proficient professional legal services, due to the lack of fierce and adroit competition. At this juncture it would be worthwhile to take notice of the following observation made by the Hon’ble Justice Krishna Iyer as early as in the year 1976 in the case entitled Bar Council of India v. M V Dhabolkar – he noted “the law is not a trade, not briefs, not merchandise, and so the heaven of commercial competition should not vulgarise the legal profession”.
However, contrary to the abovementioned observation, it is humbly submitted that there has been a sea change in the erstwhile circumstances, not just in western countries but even in our homeland, and the never-ending processes of commercialization and globalization have resulted in the integration of the domestic economy of the countries with that of the world economy, which in turn has resulted in showing the signs of trade facet of legal profession all around the globe.
The controversy
The issue of liberalizing the Indian legal sector by allowing foreign firms to have an access to the Indian legal market is apparently not a new one and definitely has never been free from controversy. The opening up of the Indian economy in the early ’90s led to the entry of the foreign law firms in India. First cases that came to the limelight were opening up of liaison offices by Ashurst of UK and White & Case and Chadbourne & Parke of the US. These firms were granted permission under the Foreign Exchange Regulation Act (FERA) to start liaison activities only and not active legal practices.
However, the foreign firms and the foreign governments (mainly that of the United States and the United Kingdom) were not content with this reception and demanded more relaxation in the laws and policies, governing the subject of practice of the profession in India by the foreign firms and lawyers. From here started a series of protests by the domestic lawyers and law firms against the move of the Indian Government in allowing the foreign firms to set up liaisons offices in the country and eventually led to agitations thwarting any further relaxation in the matter of entry of foreign law firms.
Simultaneously, in 1995, Lawyers’ Collective, a public interest trust set up by lawyers to provide legal aid, moved Bombay High Court under section 29 of the Advocates Act, challenging the right of foreign law firms to “practice law” in India. It is submitted that the crucial question which needed the kind attention of an adjudication by the High Court was whether foreign law firms could set up offices in India and whether the term “practice the profession of law” extends beyond appearing before a court to advising clients and drafting legal documents.
It was vehemently contended by the Petitioners in the said Petition that the Act provides that only advocates enrolled in India are entitled to practice the profession of law in India. It was further argued that the term “practice the profession of law” would include not only appearance before courts and giving legal advice as an attorney, but also drafting legal documents, advising clients on international standards and customary practices and transactions.
Conversely, it was argued by the Central Government, who was the Respondent in the said Petition that Advocates Act only prohibits foreign lawyers from appearing before a court and not form advising clients and drafting legal documents. The Bombay High Court in the said case, observed in an interim order, “In our view, establishing a firm for rendering legal assistance and/or for executing documents, negotiations and settlements of documents would certainly amount to practice of law.” Thus, the Hon’ble High Court very aptly expanded the scope of the expression ‘practice of law’; thereby, including within its scope the practice of rendering legal assistance, executing documents and negotiating and settling the same.
Moreover, the Court also held that the Reserve Bank of India’s (RBI) license did not amount to a permission to practice law, but only to establish a liaison office to act as a communication channel between the head office and their parties in India. The High Court further ordered the government to conduct an inquiry into the issue and take appropriate action against the firms. This however, was overruled recently by the Bombay High Court which held that permissions granted by the Reserve Bank of India to the foreign law firms as mentioned above in the early nineties to set up liaison office in India, is not valid in law. The court also held that practice of law in India, both non-litigious and litigious, requires prior enrolment under the Indian Advocates Act, 1961. However, notwithstanding the said sub – judice litigation and the resistance accorded by the domestic lawyers, many other foreign firms have established their presence in India by entering into best friends agreements with the domestic law firms and are outsourcing their legal services to private as well as governmental organization. For instance, firms like Allen & Overy (advises on power projects, particularly in the oil & gas sector; acts for Indian banks, besides doing advisory work for corporate houses in India) , CMS Cameron(advised the government of Orissa on privatization of the state electricity system), Denton Wilde Sapte (advises Indian companies like Tata Electric and Gujarat State Energy Company) , Linklaters (represented clients in their disputes with the Maharashtra State Electricity Board), Baker and McKenzie, have been amongst the most active foreign law firms in India for the past two decades. It is submitted that all these firms have formidable experience in IPR, infrastructure and energy laws, domestic and cross border transactions, project financing, TMT, FDI, arbitration and financial laws.
The regulations hampering the development of the Indian legal sector.
The first and the foremost legislative enactment which, according to many, seeks to hinder the development of the Indian legal sector is the Advocates Act Passed in the year 1961 by the Parliament of Republic of India. The Act seeks to regulate and consolidate the laws relating to legal practitioners and at the same time also provides for the constitution of Bar Councils and an All – India Bar. Next in the line is the Bar Council of India Rules, 1975, which also, according to many, has left no stone unturned in impeding the liberalization of the sector. It is pertinent to mention here that there exist certain provisions in the Act and the Rules which blatantly imposes restrictions on trade-oriented legal service sector by not just precluding foreign players from practicing law in India but also by creating heavy restrictions for the domestic players as well. These restrictions have no doubt profoundly hampered the rate of development in the sector and the interest of patrons of legal services.
It would be worthwhile to summarize the provisions which preclude the liberalization of the legal sector in a point form for a better understanding:
1. The first and the foremost provision which aims at shackling the liberalization of the legal sector in India is Section 24 of the Advocates Act. Section 24 of the Act provides that only advocates recognized under the Act can practice law and further mandates that a person shall be qualified to be admitted as an advocate on a State roll, if he fulfills the following conditions, namely: –
- He is a citizen of India (Provided that subject to other provisions contained in this Act, a national of any other country may be admitted as an advocate on a State roll, if citizens of India, duly qualified, are permitted to practice law in that other country) ;
- He has obtained a degree in law from a law school recognized for the purposes of this Act by the Bar Council of India.
Thus, on a plain reading of the said Section 24, it becomes quite evident that the Act stipulates that foreign citizens, other that the citizens of the Reciprocating Country, have no right whatsoever to practice the profession of law in India.
2. Secondly, in India, there is an absolute bar on advocates from advertising and soliciting for any purpose and indicating the area of specialization. It is submitted that the bar on advertising has created a situation which is adverse to the interest of the patrons of this legal service since non – advertising precludes the consumers from making an informed choice. Moreover, the restriction on domestic firms and advocates from advertising their area of expertise has also hampered the healthy competition which would otherwise have prevailed.
3. Thirdly, in India, only a natural person can practice law and the same is apparent from the combined reading of Sections 24, 29, and 33 of Advocates Act. As a result, there is no scope for an artificial juristic body to act as a lawyer. In other words, a legal service provider cannot be incorporated as a company and still continue to practice the profession of law in India, as per the provisions of Advocates Act, 1961.
4. Fourth, the Rules in clear and unequivocal terms prohibits advocates from entering into partnership or any other arrangement for sharing remuneration with any person or legal practitioner who is not an advocate. In other words, lawyers are precluded from entering into any kind of co-operation with non-lawyers.
Moving forward, it is interesting to note that the Report of the High-Level Committee on Competition Policy and Law under the Chairmanship of Shri S.V.S. Raghavan has very categorically summed up the effect of the existing regulatory system in professional services as follows: “… the legislative restrictions in terms of law and self-regulation have the combined effect of denying opportunities and growth of professional firms, restricting their desire and ability to compete globally, preventing the country from obtaining the advantage of India’s considerable expertise and precluding consumers from the opportunity of free and informed choice”.
It is to be noted that the restraining provisions laid down above, not just prevent the liberalization of the existing legal scenario and imposes shackles on lawyers from having a healthy legal practice, but at the same time also proves to be adverse to interests of the patrons of legal services. Moreover, it is to be noted that the provisions of the Act, which seeks to impose ‘artificial entry barriers’, is in contravention of competition policy and the Competition Act, 2002.
The Competition Act, 2002, provides for several factors that shall be considered in deciding whether an agreement has a considerable adverse effect on competition. These factors include the creation of barriers to the new entrance into the market, accrual of benefits to consumers, improvements in production or distribution of goods or provision of services and lastly promotion of technical, scientific and economic development by the provision of services. It is to be noted that the Raghavan Committee on Competition has very aptly observed that there is an intention on the part of established elements of the legal profession to limit competition by restricting new entrants.
Thus, the legal regulations sought to be imposed by the Act and the Rules on expanding nature of legal services sector has had an adverse effect on healthy competition in India and in turn the factors provided under the Competition Act, 2002.
The attempt of liberalization of the legal sector
It is interesting to note that the legal sector all around the world is conventionally the most orthodox and regulated sector. Thus India is not an exception to the same. In other words, access to foreign nationals to this sector is unreasonably restricted. The evident rationale behind the protection of this noble profession from intrusion stems from the fact that the very foundation of this profession is derived from conservative and traditional statutes, which have been framed and enacted with a preconceived mindset of precluding the foreign talent from participating in the domestic legal market. Nevertheless, it is reiterated that the never-ending processes of commercialization and globalization have resulted in the integration of the domestic economy of the countries with that of the world economy, which in turn has intensified the demand for liberalizing the legal sector and thereby allowing the foreign players to explore opportunities in these markets.
The situation prevailing in India is the same as described above. However, there have been protests lately, both at the international as well as at the national level, against this existing state of affairs, which has undoubtedly forced the Government of India to give the said matter a careful consideration. The 15th Law Commission of India (, headed by Shri Justice B.P. Jeevan Reddy), had taken up a study on entry of foreign legal consultants and liberalization of legal practices in India, in keeping with the guidelines evolved by the International Bar Association (IBA), and General Agreement of Trade in Services (GATS), which is an organ of World Trade Organization (WTO). The Law Commission had, in its Working Paper, pointed out that India was a party to the General Agreement on Trade and Services (GATS) and within a period of five years from January 1, 1995, it would be under an obligation to enter into successive rounds of negotiations periodically with a view to achieving a progressively higher level of liberalisation which includes free trade and services without regard to national boundaries.
Moreover, the Law commission indicated that the Bar Council of India had to choose appropriate model, suiting conditions of our country, so that appropriate amendments could be made in the Advocates Act, 1961 which would arm Bar Council of India with necessary powers to meet the challenges ahead. Further, it is interesting to note here that the Law Commission had forwarded its Working Paper to the Bar Council of India, the Bar Association of India, the High Court Bar Associations, Law Secretaries of States, National Law School of India University, Ministry of Commerce, Ministry of Law and some eminent members of the Bar for eliciting their views on various proposals made in the Working Paper. However, unfortunately, no response has been received so far from most of the organisations, including those, who are now agitating on the proposals made in the Working Paper of the Law Commission.
Furthermore, it is interesting to note here that the former Prime Minister, Dr Manmohan Singh, had lately, at the International Congress and Exposition on Trade in Services, which was held in New Delhi, pitched for a more open legal sector in the country, stating that the expertise in international law, commercial law, and third country law is necessary as the Indian economy increasingly integrates with the global economy. He also indicated that the Government would soon set up a high-level group in the Planning Commission to look into all aspects influencing the performance of the services sector and suggest policy measures that would need to be taken to sustain its competitiveness in the coming years.
Lastly, it is pertinent to mention here that in the year 2007 the Law Ministry planned for the phased entry of foreign firms. In the first phase, foreign law firms will be allowed to advise clients on laws in other countries. This could involve giving of advice to the multinationals working in India on legal implications in various countries on account of developments taking place in India. In the next stage, foreign law firms will be allowed to enter into partnerships with Indian firms. Such partnership may provide consultancy services to Indian clients on issues pertaining to Indian law, but the overseas firms will not be allowed to appear before courts. Moreover, the market access for practicing Indian law in a full-fledged manner will be considered only after these two stages.
Analysis of the EntryFurthermore, before highlighting the advantages or disadvantages of the anticipated entry of the foreign law firms into the Indian legal service market, it would be of utmost importance to understand the nature of the work which the foreign law firms will be dealing in, since much of the misunderstanding with regard to the entry of foreign law firms, is caused by the misinformation circulating around us. To be more practical, the main work which the foreign law firms will transact in India will be that of advising/soliciting clients on an array of legal issues, of both international as well as of domestic nature, and/or drafting legal documents. In other words, the foreign firms will chiefly concentrate on corporate and/ or commercial transactional work.
Conversely, it can be asserted that the foreign lawyers might not appear before the court of law for the purpose of representing their clients in the course of whether civil proceedings or criminal trials. The rationale for the said assertion stems from various facts, including, language and cultural problems, a dearth of knowledge of the legal system of the land and also because of dearth of trust of and support from the domestic litigants, on account of absence of experience, as regards litigating in the Indian courts.
As Alison Hook, Head of the Law Society’s International Division states: “An English lawyer appearing in an Indian court is a complex matter. He would lose the case. He will have language and culture problems. All that we have ever asked for is to allow British law firms to complete transactions. This would be good for greater foreign investment in India”. Similarly, Mr. Ritvik Lukose, Vice President of Rainmaker T&R, leading legal recruitment, and training firm, maintains that “foreign firms might not be interested in litigation, as it is not lucrative enough and requires a thorough study of the legal system of the land”.
Thus, it can be safely deduced from the preceding paragraphs that since the majority of lawyers in India are involved in litigation, it is utmost unlikely that they will be adversely affected by the entry of foreign law firms.
The advantages of entryThe rationale that could be vehemently advocated in allowing foreign law firms to function and transact work in India is that the foreign firms will bring with them a fresh pool of professionalism, competence, and expertise, which the legal profession here has incessantly failed to develop. In other words, permitting the entry of foreign law firms in India will certainly bring in competition and raise the standards of service in the legal sector, which most Indian law firms and lawyers are not ready to face. Moreover, without prejudice to the preceding paragraph, it would be pertinent to mention here that the advantages of entry of the foreign law firms could also be appreciated in the light of the credible surge in foreign investment and numerous benefits to the patrons of the legal services and to the aspiring lawyers.
In the age of consumerism and competition, consumer’s right to free and fair competition is paramount and cannot be denied by any other consideration. Trade in legal services focuses on benefits accruing to consumers from the legal services sector, particularly the quality of service available with respect to particular fields. It is to be noted that with the advent of foreign law firms in India, the patrons of legal services will be highly benefited, on account of more available options, the resultant competition, and accessibility to a fresh pool of professionalism, competence and expertise, which the legal profession here has incessantly failed to develop.
It is not out of place to mention here that in, In Re Sanjiv Dutta, Deputy Secretary, Ministry of Information and Broadcasting, the Supreme Court Observed that, “…some of the members of the profession have been adopting perceptively casual approach to the practice of the profession…they do not the only amount to contempt of court but to the positive disservice to the litigants.”
Further, it is to be noted that with the arrival of the foreign law firms there will be a tremendous surge in employment avenues for the Indian lawyers. At the same time, the arrival will enable the junior lawyers grab a handsome pay package and law student’s easy access to internship programs; which is evidently not their catch in the present scenario. “Foreign firms in India shall not really eat into the pool of available jobs. They would mainly recruit law school graduates and in the process provide an opportunity to them to gain a first-hand experience in cross-border and even domestic commercial transactions, that will be the mainstay of such firms,” says Prof HD Pithawala, an eminent advocate, solicitor and professor at Government Law College (GLC), Mumbai .
Furthermore, it’s interesting to note here that the law schools and colleges in India have welcomed the entry of foreign legal firms; as they feel that legal sector cannot be barred when India is opening up other sectors. In fact, law schools and colleges argue that the government’s proposed move in this regard would boost competition in the legal sector. It would be worthwhile to note here that Dr. A Jayagovind, vice-chancellor, National Law School of India University, Bangalore opines “As the bar council of India itself is opposing the move, I cannot comment on the impact of the entry of foreign legal firms on the profession here. On the education system, it would be a welcome development. Anything that improves competition would be a welcome development”.
Similarly, Dr. Manoj Kumar Sinha, director, Indian Society of International Law and secretary, All India Law Teachers’ Congress, says “Allowing foreign private law firms in India will certainly help the lawyers get better job opportunities and break the monopoly of a handful private law firms working in India. It is equally important that the government must put enough safeguard to protect the interest of the Indian legal community”.
The disadvantages of entry“We must take care that globalization does not become something people become afraid of” – Gerhard Shcroeder As regards the disadvantages, the most important one that needs to be brought to the attention of the readers is the possibility of the domestic law firms, in light of the existing unfavourable circumstances, being overpowered in performance and revenue by its foreign counterparts. The law firms situated in countries like the United Kingdom, the United States and Australia have overwhelming lawyers force, operate on the International scale and primarily function as business organizations designed to promote the commercial interest of their giant client corporations. The size, power, influence and economical standards of these large international law firms would definitely affect the share of the domestic law firms. It can be said that the Indian law firms cannot, at the present scenario, match, howsoever far they may stretch it, the foreign law firm’s size, power, and most importantly economical standard.
It is pertinent to note here that the non – capability of the Indian law firms to compete with their foreign counterparts, stems from the various unnecessary and frivolous restrictions, which the domestic law firms here are subjected to; and the same restraints have been explained hereinbefore. In brief, the Indian law firms are statutorily precluded from advertising and thus indicating their area of expertise. Moreover, domestic law firms are prohibited from raising capital and are also precluded from entering into any kind of co-operation with non-lawyers. Foreign firms, on the other hand, are not shackled by such limitations.
Further, Mr. Saradindu Biswas, an ex-vice chairman of the Bar Council of India, feels that Indian lawyers need more professional grounding and knowledge to compete with foreign lawyers. “Be it in appearance, documentation or in-depth knowledge about law, the Indian lawyers suffer some serious shortcomings. Unless we make our law teaching institutions more responsive to today’s needs, it may not be possible to compete with foreign lawyers who want to come and open a practice here,” he adds.
Similarly, Mr. Cyril Shroff, Managing Partner, Amarchand & Mangaldas & Suresh A Shroff & Co says, “The domestic law firms which are not strong enough to face the competition, many of them collapse and they get bought out for ridiculously low values and as the result the domestic players, they shrink in size.”
Furthermore, expressing his reservations on the government move, Mr. AS Chandioke, President, Delhi High Court Bar Association, says, “The bar association has asked the government on several occasions to change the legal curriculum and suggested that a uniform legal course should be brought in the country. If we are to compete with foreign firms, we need a level playing field.” He further pointed out, “Abroad, the law is a business, not a profession and lawyers are allowed to have websites. Before you open up the legal profession, there is a need to introduce advance-level legal courses in the country. We have enough talent in the country to beat anyone in the world. We just need safeguards and training. If their lawyers are allowed in, it may raise some jobs hopes, but on the whole, it will lead to the exploitation of our legal services.”
Thus, it can be safely asserted that liberalization without first putting Indian firms on an equal footing will be unjust and will put them at a competitive disadvantage.
DEVELOPMENTS IN CHRONOLOGICAL ORDER
| Early 1990s | White and Case LLP, Chadbourne & Parke LLP and Ashurst were granted permission by RBI under the Foreign Exchange Regulation Act 1973 (FERA) for setting up of liaison offices in India. |
| January 1, 1995 | General Agreement on Trade in Services (GATS) came into existence obligating countries to open up the service sector to Member Nations. India is a signatory to the GATS. |
| 1995 | Lawyers collective files a petition in Bombay HC against the opening of liaison offices in India by Foreign Law Firms |
| 1995 | Bombay HC judges held that the RBI licence did not provide permission to ?practice law?, but only to establish a branch office to act as a communication channel. Post the decision, White & Case and Chadbourne & Parke closed their India offices however UK-based Ashurst stayed behind. |
| 1999 | Bombay HC stated that the RBI should not grant permission to foreign law firms to open offices in India. |
| 2005 | Reports of opening of a law firm in Delhi by a Nigerian national |
| January 18, 2007 | The Society of Indian Law Firms (SILF) and Britain’s Law Society signed a MoU regarding cooperation in the legal profession. |
| November 18, 2007 | In a joint conference of the Bar Council of India (BCI) and State Bar Councils, they requested that the Centre shouldn?t take a final decision without consulting with them. |
| November 26, 2007 | British Indian Lawyers Association objected to the opening of the legal industry for foreign law firm without ensuring reciprocal entry clearances for Indian lawyers into the UK. |
| January 12, 2008 | The Limited Liability Partnership (LLP) Bill was passed by the Indian Parliament. |
| December 16, 2009 | Bombay HC ruled out that the ?practice of law? as mentioned in the Advocates Act includes litigation and non-litigious work which cannot be carried out by foreign law firms. |
| April 2010 | A writ petition was filed in the Madras HC against entry of foreign law firms. |
| September 28, 2010 | Law Ministry issued a press release reiterating BCI?s stand to not permit foreign law firms into India. |
| April 1, 2011 | Ashuruts entered into a best friend referral arrangement with Indian Law Partners (ILP). |
| February 21, 2012 | Madras HC ruled against the practise of Foreign Law Firms in India without enrolling with the BCI under the Advocates Acts. However, it allowed the foreign lawyers to ?fly in and fly out? on a temporary basis. |
| April 2012 | BCI appeals against the judgement of the Madras HC allowing ?fly in and fly out? of foreign lawyers. |
| July 2012 | SC directs RBI to refrain from granting permission to foreign law firms. |
| April 26, 2014 | SC Justices SS Nijjar and PC Ghose and retired judge AK Ganguly stated that foreign lawyers should be allowed to work on arbitrations in India to make domestic arbitration more attractive and to unburden the courts. |
| September 2014 | UK law minister Shailesh Vara spoke in favour for the entry of foreign law firms to practise non-Indian transactional law in India during his visit to India. |
| November 2014 | SILF decides favour the entry of foreign law firms in India. |
| December 2014 | A source from the ministry of commerce stated that the commerce ministry is working on a proposal for a phased opening up of the legal sector in non-litigious services and international arbitration. |
| January 6, 2015 | SC adjourned the case relating to the entry of foreign law firms in India. The next date of hearing is on February 27. |
| January 8, 2015 | Meeting of the Inter-Ministerial Group (IMG) on Services under the Chairmanship of the Commerce Secretary to consider a Roadmap for Legal Reforms in India. |
| February, 2015 | Joint meeting of Bar Council of India (BCI) and Society of Indian Law Firms (SILF |
Conclusion
In light of the ongoing wave of globalization and liberalization; the incontrovertible fact remains, that the need of liberalizing the Indian legal sector is unarguable and beyond doubt. In my opinion, it is extremely affirmative of the view that the advent of foreign law firms in our country, will not just favourably add up to our foreign reserves and in due course the GDP, but, will also beneficially result in surge in employment for the law graduates being debutants to the legal profession (both litigation and corporate), in terms of better exposure and a handsome pay package; will also prove advantageous for the law students, in terms of easy access to internship programs; and most importantly will be in the interest of the domestic patrons of legal services, in terms of availability of better professional services, being the direct outcome of the consequent boost in competition in the legal market. However, before the foreign law firms are given the green signal for establishing their base in our country, it is of utmost importance, that the Government should revamp the state of affairs, existing in the legal sector, in order to do away with the unreasonable restrictions (discussed above), which undisputedly impose shackles on the healthy development of our country’s legal profession. The reason being that without the eradication of the unnecessary restrictions (embodied in our anachronistic laws), which seek to hamper the growth rate of our domestic law firms; the domestic firms will not be able to efficiently and productively meet up with the challenge which will be posted by their foreign legal counterparts.
Moreover, on the same principle, It is important that the entry of the foreign law firms in our nation, should be coupled with the enactment of an impressive legal framework and also with the shaping of a promising regulatory mechanism, which will ensure that the arrival of the foreign law firms will result only in healthy competition in the domestic legal market and not in the annihilation of our domestic law firms. It is interesting to note here that the 15th Law Commission in its Working Paper has itself suggested some of the safeguards which could be adopted. In this connection, it has referred to Article XIX(2) of the GATS which allows the process of liberalisation to take place with due respect for national policy objectives and level of development of individual members, both over-all and individual sectors.
Lastly, I would like to conclude that whether today or tomorrow; the opening up of doors of the domestic legal market to competition from international legal market is rather inevitable, so therefore, instead of offering resistance to the entry of foreign law firms, a sincere attempt should be made by all (being the Government, the domestic law firms and the legal practitioners) to rework the situation, in order to derive utmost benefit from it. However, it should be done on a reciprocal basis and other countries should also permit the Indian lawyers to practice on their soil in a similar manner as they are permitted here in India.
The legislative assembly of Bihar is scheduled to expire in November 2015. The state witnessed a big political crisis right since the start of the year as the former chief minister Nitish Kumar asked the ruling CM Jitan Ram Manjhi to step down but the latter refused and was subsequently expelled from the primary membership of JD-U. Though, Manjhi quit days later, hours before he was to go through a confidence motion in the assembly.
The elections to the legislative assembly will be held in the 243 assembly constituencies of Bihar before 29 November 2015. In the previous elections held in 2010, the JD-U won 115 seats out of 147 seats it had contested. The BJP bagged 91 seats out of 102 contested. If the results of 2014 General Elections in Bihar are an indication to follow, then the BJP can be termed as the favourite to win. In the general elections, BJP won in 22 of the 40 parliamentary constituencies, while the LJP and RJD settled for 6 and 4 seats respectively.
In 2015 the BJP’s Bihar unit has to not just expose the nefarious designs of both the JDU and RJD but also demonstrate that it can win the confidence of all sections of Bihar. Delhi poll results also got a great impact on the 2015 Bihar assembly election results and by congratulating Aam Admi Party chief Arvind Kejriwal for the staggering victory, JD(U) said the people of Delhi “have rejected Prime Minister Narendra Modi and BJP” and the results will have “far-reaching effect” on the entire country, including Bihar. However, the recent State Legislative council election results in Bihar (touted by many as semi-final) has upset the Nitish-Lalu-Congress agenda. In fact, the BJP lead team could manage to win 14 out of 24 seats and thus gave a big blow to ‘Janta Parivar’. In fact a detailed study of the legislative council results reveal that Lalu Yadav lead RJD is in upsurge and the biggest loser is Nitish Kumar.
BJP leaders are trying to take advantage of the infighting within the ruling JDU. BJP leaders feel that if CM Nitish Kumar maintains his autocratic approach, then the merger of RJD and JDU will be deferred. A senior leader feels that there is a positive effect of Jharkhand elections on Bihar. In Jharkhand, a non-tribal CM has taken command and it has been received positively in Bihar. Apart from this, they feel that the Narendra Modi wave still persists and hence this is the ideal time for elections.
Many leaders have the feeling that the elections will be fought on caste-based equations. The BJP is also trying to set its equation right. Equation of OBC-Muslims and Mahadalits will be the main strength of JDU-RJD. That is the reason why BJP leaders want to stop the merger of JDU and RJD, and an early election. So, the BJP is supporting Manjhi, and Sushil Modi has said that the party is ready to back him completely. There is a likelihood of BJP + Manjhi + LJP + Kushwaha. In addition, the BJP has created a big hole in the Yadav bastion of Lalu Yadav by siding with Pappu Yadav and the entire Kosi belt will have an impact positively in favour of BJP at the cost of Nitish-Lalu combine.
For the last few months, leaders of BJP have been setting various targets. In the Lok Sabha Elections, Modi had fixed a target of 272+ and achieved it. After that, the party started setting targets for every State. For Bihar, the mission is 185+ seats. Though the BJP could not achieve its target in Jharkhand, Maharashtra and Jammu and Kashmir, the enthusiasm of party workers and leaders has not gone down.
Now, one of the bigwigs of the party has set a target for 2019. Forest and Environment Minister Prakash Javadekar says by 2019, 19 States will have BJP CMs. This is a point to worry for the Congress and other regional parties. In 1997-98, the Congress was in power in very few States. The party was ruling in only two big States, Madhya Pradesh, and Kerala. But then big States like Bihar, West Bengal, Tamil Nadu, Karnataka, and Andhra Pradesh were being ruled by regional parties. At present, there are seven CMs of the BJP, and in two States, CMs are from its alliance partners. However, some of the leaders think 19 BJP CMs is a tall order.
Established Political Parties will have to spend extra time dealing with sabotage and infighting. Infighting is at its peak in all the political parties be it Congress, BJP, RJD, JDU or AAP.
After the results of Lok Sabha and Assembly Elections in four States, Rahul Gandhi has kept his experiments aside. That is why in Delhi there was no primary for ticket distribution. But it is being speculated that Rahul is back on that track and wants his formulae to be implemented to strengthen the organisation. Sources say he might hold elections for some posts of the organisation. Rahul might also hold elections to fill 12 posts of CWC, the apex policy-making body of the Congress.
According to the party Constitution, elections must be held to choose 12 members of CWC, and almost the same number of members should be nominated. But no such elections have been held during Sonia Gandhi’s regime, and all members have been nominated. During Sonia’s regime, even the number of special invited and permanent invited members increased. However, Rahul wants CWC members to be elected. Though some leaders say this can be challenging for his leadership, sources are of the view that there will always be apprehensions about Rahul’s leadership, and the elected leaders can also pose challenges for him.
With elections just a few months away, the political scenario appears to be in a fluid state. Perhaps this election may be fought purely on the alignment of political forces as none of the political icons is in a position to create a fresh wave in his favour; rather, some of them may be fighting for their political survival. What is certain is that it will be the voters who will have a tough time choosing their candidate and party.
This above was written many months back.
With Election round the corner and with 3rd Front and Owaisi in the field the things may get little difficult for Grand Alliance of Nitish-Lalu-Sonia. The Third front of Pappu Yadav-Mulayam Singh Yadav-Sharad Pawar (Tariq Anwar) etc has potential to damage Nitish Kumar lead alliance in Kosi belt and on the other hand Owaisi will effect the grand alliance in Border areas or what is called Simanchal. However, it is not going to be easy for NDA, though they have an edge over Grad Alliance of Nitish as on date. However, with Lalu Yadav raking his pet subject of Caste based Reservation, the things may turn overnight.
Reservation is in news, I should say again and as most of the times, not for positive reasons. A very touchy issue to say the least. The issue has a potential and it has created emotional turmoil over the years. Why reservation? What for reservation? Why somebody gets a reservation? Why somebody is denied reservation? What is the problem? What is the solution? What to do? How to go ahead? A lot of issues co-related with each other that need to be tackled. Before analysing with the likely solution to the problem, let us try to understand the genesis of the reservation system in India.
The reservation system in India is an outcome of the thought of the founding fathers of the Constitution of India whereby they thought of providing reservation to economically and socially backward set of people. Thus, in India, this identification of the backward set of people was made, rather corelated, with the caste system, as traditional people allegedly Schedule Caste and Schedule Tribe had been the backward set of people economically and socially and that is why the reservation was provided to Schedule Caste and Schedule Tribe. It is important to note that class and caste was thought to be co-terminus and accordingly the founding fathers of the Constitution of Modern India decided and accordingly, the traditionally backward set of people were identified as belonging to a particular caste and thus a class in themselves. It seems that this is where the solution started and this is where the problem began. The idea of identifying class and caste over the years has created problem and disharmony in the other caste people especially since in India the caste system is well drenched in the society since centuries altogether. This initial reservation was provided only to Schedule Caste and Schedule Tribe people and it was made on an experimental basis only for a period of 10 years. However, once the system got into place, nobody thought of doing away with it and with the appointment of Mandal Commission by Congress Government and implementation of its Report by V.P.Singh Government included within its wings the other backward caste people under the set up of reservation whereby people were being identified on the basis of their caste and included in the category of Other Backward Class and were provided reservation.
We all know what is a reservation system. In simple term, it is a system whereby a particular set of people are given reservation in various places like from educational to employment to promotion and in which the said category of people get benefit compared to other category people or other caste people. The issue of Mandal Commission and the implementation of Mandal Commission divided India practically into two horizons, i.e. those in support of the Mandal Committee and those against the Mandal Committee. However, finally, the issue was decided when the Hon’ble Apex Court provided a guideline whereby it held that reservation cannot go beyond 50% of the total number of seats. But in reality, the issue was never over and it created a set of people who based their thought and ideology on dislike for another group of people. Alas, the system was only adding fuel to fire. Instead of doing away with the caste system, it was only adding strength to it. The society was getting further fragmented.
It is seen for the last many years that people from various castes are trying to creep in through particular caste in the category of OBC. This is more relevant because OBC, as a term or as a society, is not well recognized in Indian Hindu system where the Schedule Caste and Schedule Tribe were more clearly defined. Thus, we find that people belonging to various castes try to get into the category of OBC so that they can reap the benefit of reservation. This episode of Patel demanding inclusion of their community in the OBC category which shook entire Gujarat and moved the attention of entire India to the issue of reservation needs to be seen from that perspective.
Thus, what is the solution to this? It is seen that the issue of reservation has created a scenario whereby people those who are really in need and deserving are not given the benefit. It is also seen that with the inclusion of dominant caste in the OBC category, the really needy does not get the benefit. Traditionally Patels had been affluent and dominant caste in Gujarat. However, the same Patels had not been dominant in Bihar and in Bihar they are treated as OBC. Thus, it is important that we streamline this issue of reservation and ultimately put an end to the system in the manner of the win-win situation to one and all.
What is required is that the benefit of the reservation should go only to deserving people and when I say deserving people, they are those who are socially and economically at the bottom level. Now acting from this perspective, there are two aspects which we need to streamline. 1st is the need to identify People within the OBC, SC and ST category who are not economically and socially at the bottom of pyramid and therefore, it is necessary that such people should not get the benefit of reservation because such people get the benefit at the cost of really deserving SC and ST and OBC set of people. I also take this opportunity to put on record the way Creamy Layer has been implemented. Creamy Layer has not been implemented properly and further Creamy Layer is applicable only to OBC and not to Schedule Caste and Schedule Tribe. 2nd it is important to the uplift economically backward set of people who may not belong to OBC or sc or st. This also brings the question of economically backward people belonging to other castes and religions. Further, all Indians are not Hindus. Nearly 20% of the population is Non-Hindus and this cannot be ignored.
Thus, the solutions to entire reservation problem and which I see are as follows:-
1. Let the reservation be there for next 25 years and gradually do away with the system of reservation In the next 20 to 25 years and accordingly, it is necessary we keep planning for the same from today.
2. Reservation should be denied to anybody whose family member had ever been benefitted by any reservation and those in Schedule Caste and Schedule Tribe and/or OBC person if his/her family was benefitted by reservation once in any category, then the same family is not eligible for benefit arising out of the reservation.
3. Concept of Creamy Layer needs to be implemented thoroughly and properly and it should include within its wings people from Schedule Caste and Schedule Tribe and also OBC.
4. All the members of Parliament, Legislative Assembly, Legislative Council, Local Corporators, Bureaucrats (All India Services or State Services), Professionals like Doctors, Lawyers, Chartered Accountants, all such people who in spite of being OBC, Schedule Caste and Schedule Tribe are or have been in any of what is stated above, then they and their family should be barred from getting facility of reservation.
5. There should be a reservation of 5% for other category people if they fit in the category of Non-Creamy Layer as applicable to OBC which is purely based on the economic standing of the person.
If the above measures are taken in proper perspective, the rightful and needy set of people will be benefitted out of it and the non-deserving people will be wiped out and finally, with the passage of time, reservation will become redundant and then in that scenario, there will be no need for any reservation in India. I think that this is a long procedure which we all should try rather than fighting for including particular caste in the category so as to reap the benefits. It is worth trying. Identification based on caste will gradually go away because of modern identify which will be beyond caste and which can go a long way in making every Indian an Indian rather than belonging to caste, creed or religion.
