The Parliament could have passed some of the pending Bills, including the Grievances Redress Bill and the Whistle-blowers Bill. However, the self-flagellation and ego of the Congress combined with antics of the Opposition turned everything topsy-turvy
There was recently a frantic race among Congressmen how to persuade the President of India to issue a couple of ordinances because the young master, Rahul Gandhi, desired it. It is a different matter that none of the proposed laws were opposed by the Opposition. Had the House managers done their homework, Parliament could have passed some of the pending Bills, including the Grievances Redress Bill and the Whistle-blowers Bill. The self-flagellation and ego of the Congress combined with antics of the Opposition turned everything topsy-turvy. The Telangana Bill, with both major political parties indulging in political manoeuvring, was passed by voice vote, embellished by a peppery spray and a shameless failure of live TV coverage of the proceedings of the House (one does not yet know the villain - the government has not held an inquiry).
And pray, how come Rahul is so insistent on the ordinance route when, in the matter of disqualification of convicted legislators, he had publicly shamed the Prime Minister and his government by tearing the ordinance!
Can the President accept an ordinance when both Houses are not going to meet before the general election in May 2014 and there is going to be a new Lok Sabha? It would amount to shredding the Constitution, if the President were to approve the ordinances, which in law were never deliberated by the members of the Lok Sabha. Are the newly elected Lok Sabha members expected to initiate their work with old Bills? I have not much objection to the broad contours of the Bills - I myself have been a public signatory to a statement demanding that before the dissolution of the Lok Sabha, the Bills on public grievances and whistle blowers be passed. But somehow it did not happen. With time having run out, democracies cannot resort to devious methods.
I am aghast at the drama of ordinances for all these weeks in the Press. If the government was genuinely keen on having these Bills passed, what stopped it from extending the session by a few days? Unless the ruling party was manoeuvring to acclaim Rahul Gandhi as the sole Mr Clean of India, in the melodramatic repetition of the 1940 movie of Hollywood decades back, namely “Mr Smith Goes to Washington” and the more recent Bollywood version equally well-crafted and starring Amitabh Bachchan, “Main Azad Hoon” — I fail to understand why his followers did not insist on extending the session for a couple of days to pass these Bills, which certainly would have received no opposition. Of course, if the real intent was to seek a mileage, then unfortunately the move has backfired.
Even if the President had been persuaded to issue the ordinances, these would have had no validity or life and the new Lok Sabha would have to pass them afresh. Was this fuss worth even a penny?
A vibrant democracy is not governed by ordinances. This provision is an anathema to a democratic Republic. I feel that the ordinance issuing power is an anachronism dating back to the colonial Acts of 1919 and 1935 and it should be deleted from the Constitution. No other parliamentary democracy has such an undemocratic provision.
The Supreme Court has firmly held in the Wadhwa’s case (1987) that the power conferred on the Governor to issue ordinances is in the nature of an emergency power for taking immediate action when the legislature is not in session. The primary law-making action under the Constitution is with the legislature and not the executive. The power to promulgate an ordinance is essentially a power to be used to meet an extraordinary situation and it cannot be allowed to be “perverted to serve political ends” (emphasis supplied). “It is contrary to all democratic norms that the executive should have the power to serve political ends”.
A similar provision empowers the President under Article 123 of the Constitution. This is a hangover from the colonial period but then we have retained gleefully many remnants of the British law like sedition, applicability of which is causing havoc in the lives of young activists, especially those belonging to minorities. This power of issuing an ordinance has no place in a democratic country.
Consider the ground rules of the situation. The general election is to be held in a couple of months. On a conservative estimate, a minimum of half the existing members of the Lok Sabha are going to be defeated. Should these rejected politicians forestall the right of the new members either to accept or modify radically the said legislation? It was unseemly for the government to start stray winds of gossip and news items indirectly to gauge the reaction of the President if the ordinances were sent to him.
We have the answer. Democratic norms and conventions in the country have at last been reiterated eloquently by the quiet, dignified and steadfast stand of President Pranab Mukherjee in refusing to give consent to the ordinances, notwithstanding the frantic legal erudition of P Chidambaram. The President was not moved by the almost tearful lament of Foreign Minister Salman Khurshid, saying how the rejection has come in the way of Rahul Gandhi’s vision. Khurshid should not take it to heart because the coming general election will give all the opportunity to Rahul Gandhi to test his vision. Now that the question of ordinances is over, I hope Rahul and his seasoned advisers will remember the old admonition: “Be you ever so high, the law is above you”.
(The writer is a former Chief Justice of the Delhi High Court)
Class actions under Section 245 of the new Companies Act, 2013 are evidently distinctive and separate and were brought in as additional tool for investor protection. This is first part of a three part series
Very generally speaking, class action suit is a lawsuit that allows a large number of people with a common interest in a matter to sue or be sued as a group.
A Short History
The class action suit began in the equity courts of seventeenth-century England as a bill of peace. English courts would allow a bill of peace to be heard if the number of litigants was so large that joining their claims in a lawsuit was not possible or practical; the members of the group possessed a joint interest in the question to be adjudicated; and the parties named in the suit could adequately represent the interests of persons who were absent from the action but whose rights would be affected by the outcome. If a court allowed a bill of peace to proceed, the judgment that resulted would bind all members of the group.
Justice Story, who served on the US Supreme Court from 1811 to 1845 wrote that in equity courts, "all persons materially interested, either as plaintiffs or defendants in the subject matter of a bill ought to be made parties to the suit, however numerous they may be," so that the court could "make a complete decree between the parties [and] prevent future litigation by taking away the necessity of a multiplicity of suits" (West v. Randall).
The bill of peace, and later the class action, provided a convenient and efficient vehicle for resolving legal disputes affecting a number of parties with similar claims. Common issues that could have similar outcomes did not have to be tried piecemeal in separate actions, thus saving the courts and the litigants’ time and money.
Initially, a class action could be brought only in equity cases, disputes in which the parties did not necessarily seek monetary damages but instead might desire some other type of relief. The adoption of Rule 23 of the Federal Rules of Civil Procedure in 1938 broadened the scope of the class action suit, providing that cases in law seeking money damages as well as cases in equity could be brought as class actions. In 1966, the scope of the class action was again clarified and expanded when Rule 23 was amended to provide that unnamed parties to a class action were bound by the final judgment in the action so long as their interests were adequately represented.
Rule 23 of the Federal Rules of Civil Procedure defines three kinds of class actions:
The Indian Scenario
The Satyam Computers’ fallout had created uproar in the country. Investors of the company abroad brought in several class actions seeking damage, while investors in India did not have any such recourse to legal remedies. This steered the Ministry to incorporate and include proactive measures for the protection of the shareholders and investors and thus the provisions of class action suits were incorporated under the Companies Act 2013.
Prior to the enactment of Companies Act 2013, class actions suits have been filed as “representative suits” under Civil Procedure Code 1908 or under the pretext of public interest litigations (PILs). The laws were not well defined with respect to class action and thus were unable to be described as “sui generis”.
This article is an attempt to reflect upon the provisions pertaining to class action as detailed under the Companies Act 2013(Act) and to ascertain the effectiveness of the new redressal mechanism.
Relevant Provisions under Companies Act, 2013
The Companies Act, 2013 introduces the concept of class action under Section 245, detailed in Chapter XVI – Prevention of Oppression and Mismanagement. However, this is not to be misunderstood with provisions governing oppression and mismanagement as set out under sections 241-244. Class actions under 245 are evidently distinctive and separate and were brought in as additional tool for investor protection.