Judgments that impact society must be holistic

Source: Hindustan Times dated 06.11.2019

-- Prashanto Chandra Sen (Senior Advocate, Supreme Court)

In the Goa Foundation judgment, the environment was preserved, but it was at the cost of the livelihoods of many. The shock and pain of the loss of livelihood will inevitably undermine the faith of those affected by the nature of justice being meted out.

The term “moulding of relief”, which means courts can pass orders in the interest of justice even if it is not strictly as per the relief prayed for, is an established concept in Indian jurisprudence. However, such an order should not be contrary to the law.

For instance, the four landmark judicial interventions that had a fundamental economic impact were also decisions where the principle of moulding of relief was critical for complete justice: Cancellation of 122 telecom licences in the 2G scam in February, 2012; cancellation of 214 coal licences in August, 2014; ban on sale of liquor by all outlets, including hotel and establishments falling within 500 metres of the highway in December, 2016; and the cancellation of 88 leases for iron ore mining in Goa in February, 2018.

Let us take the Goa case — The Goa Foundation v. M/s Sesa Sterlite Ltd, (2018) 4 SCC 218. Under the Portuguese rule, mineral concession rights were granted to parties in perpetuity. In 1961, after the liberation of Goa, the concessioners were covered under the Indian Mines & Minerals (Development and Regulation) Control Act, 1957. In 1987, the government of India, by way of an Act converted the concessions into leases with retrospective effect from 1961. The state government started charging rent and royalty from the parties, which was the case earlier.

The said Act was challenged in the Bombay High Court, which struck down the provisions of the abolition act and held that royalty can be charged only prospectively. A petition was also pending for the last 20 years, challenging the application of the Abolition Act of 1987 to Goa. In 2018, the Supreme Court (SC) cancelled the mining lease en masse without adjudicating a pending case establishing the legality of the abolition act itself.

The court justified its judgment in the Goa Foundation Case on the grounds that there was rampant violation of environment-related and mining-related law/legal requirements. It was based on the sound and salutary principle that a person cannot enjoy the fruits of illegality. There can be no argument with this position. It was also premised on the observation that no social or public purpose is attached to the mining operation and the only objective behind mining activity was profit maximisation. However, the court neither considered the impact on the livelihoods of people nor did it attempt to balance the illegality committed. It did not take into account the right to livelihood of those who lost their jobs.

In the enthusiasm to set certain wrongs right, a vital factor of the livelihood of the people working in these industries for years together was lost sight of. If we are to take the combined effect of the loss of livelihood of all the four landmark decisions of the SC, the number is significant though an actual figure is difficult to arrive at. In this context, moulding of relief becomes critical. Striking down illegality should involve circumspection to prevent business disruption.

As dispensers of final justice, the SC has to balance two conflicting issues: Interpretation of the law, which seeks to simplify and clarify issues in order to bring about a degree of certainty and predictability in the commercial world, and the economic cost of the loss of livelihood. As dispensers of final justice, the SC does need to take into consideration and mould reliefs.

The way the government handled the smooth transfer of ownership of Satyam Computers to Tech Mahindra, when the founder was caught in a scam, without disrupting business, is noteworthy. Such learnings can be resorted to under the guidance of the courts for the larger public benefit. After all, in the case of the liquor sale ban on the highways, the court did show the responsibility of clarifying the ban, giving relief to approved establishments in municipal limits, even if they fell under 500 metres to sell liquor.

The SC in the Goa Foundation judgment emphasised that issues impacting society are required to be looked at holistically. It invoked Ayn Rand – “We can evade reality, but we cannot evade the consequences of evading reality”. The consequence of loss of livelihood is not just economic but is also institutional, inasmuch as the shock and pain of loss of livelihood would inevitably undermine the faith of those affected by the nature of justice being meted out.