1. Is the government empowered to intercept communication between two individuals? Answer: Yes. The Central and the State government can intercept communication. Letters, telephone (mobiles and landlines) and internet communication (e mails, chats etc.) can be intercepted by the government. Interception of:
2. Under what circumstances can the government intercept communication? Answer: The circumstances under which communication can be intercepted by the government are:
3. Are there any safeguards that have been built into the interception process? Answer: The Supreme Court in the case of PUCL Vs Union of India observed that the right to have telephone conservation in the privacy of one’s home or office is part of the Right to Life and Personal Liberty enshrined in Article 21 of the Constitution, which cannot be curtailed except according to the procedure established by law. Elaborating the scope of Section 5 (2) of the Indian Telegraph Act, 1882 the Court clarified that this section does not confer unguided and unbridled power on investigating agencies to invade a person’s privacy. The court laid down the following safeguards: a. Tapping of telephones is prohibited without an authorizing order from the Home Secretary, Government of India or the Home Secretary of the concerned State Government b. The order, unless it is renewed shall cease to have authority at the end of two months from the date of issue. Though the order may be renewed, it cannot remain in operation beyond six months. c. Telephone tapping or interception of communications must be limited to the address (es) specified in the order or to address (es) likely to be used by a person specified in the order. d. All copies of the intercepted material must be destroyed as soon as their retention is not necessary under the terms of Section 5 (2) of the Indian Telegraph Act, 1882. e. In an urgent case, this power may be delegated to an officer of the Home Department, Government of India or the Home Department of the State government, who is not below the rank of Joint Secretary. Copy of this order should be sent to the concerned Review Committee within one week of passing of the order. f. This Review Committee shall consist of the Cabinet Secretary, Law Secretary and the Secretary Telecommunications at the Central Government. At the state level, the Committee shall comprise of Chief Secretary, Law Secretary and another member (other than the Home Secretary) appointed by the State Government. The Committee shall on its own, within two months of the passing of an order under Section 5 (2) investigate whether its passing is relevant. If an order is in existence, the Committee should find out whether there has been a contravention of the provisions of Section 5 (2). If the Review Committee on investigation concludes that provisions of Section 5 (2) have been contravened, it shall direct destruction of the copies of the intercepted material. In pursuance of the Supreme Court judgement the Indian Telegraph (First Amendment) Rules, 1999 were framed and notified on 16.02.1999. A similar notification titled, the Information Technology (Procedures and Safeguards for Interception, Monitoring and Decryption of Information Rules, 2009 were notified on October 27, 2009. [see page 18] 4. Are there any other known cases of telephone tapping of politicians? Answer: In 2005, Shri Amar Singh alleged that his telephones were tapped by private individuals. The case against them is currently pending in the Tis Hazari court in Delhi. 5. Are there any statistics about the number of telephones being tapped by the government? Answer: Currently no such statistics are publicly available. In a similar context, in the UK (where the Regulation of Investigatory Powers Act 2000 governs this particular subject) a Report of the Interception of Communications Commissioner states that a total of 5344 warrants were issued for interception of communication in 2008.
The Finance Bill, 2017 is being discussed in Lok Sabha today. Generally, the Finance Bill is passed as a Money Bill since it gives effect to tax changes proposed in the Union Budget. A Money Bill is defined in Article 110 of the Constitution as one which only contains provisions related to taxation, borrowings by the government, or expenditure from Consolidated Fund of India. A Money Bill only needs the approval of Lok Sabha, and is sent to Rajya Sabha for its recommendations. It is deemed to be passed by Rajya Sabha if it does not pass the Bill within 14 calendar days.
In addition to tax changes, the Finance Bill, 2017 proposes to amend several laws such the Securities Exchange Board of India Act, 1992 and the Payment and Settlements Act, 2007 to make structural changes such as creating a payments regulator and changing the composition of the Securities Appellate Tribunal. This week, some amendments to the Finance Bill were circulated. We discuss the provisions of the Bill, and the proposed amendments.
Certain Tribunals to be replaced
Amendments to the Finance Bill seek to replace certain Tribunals and transfer their functions to existing Tribunals. The rationale behind replacing these Tribunals is unclear. For example, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) will replace the Airports Economic Regulatory Authority Appellate Tribunal. It is unclear if TDSAT, which primarily deals with issues related to telecom disputes, will have the expertise to adjudicate matters related to the pricing of airport services. Similarly, it is unclear if the National Company Law Appellate Tribunal, which will replace the Competition Appellate Tribunal, will have the expertise to deal with matters related to anti-competitive practices.
Terms of service of Tribunal members to be determined by central government
The amendments propose that the central government may make rules to provide for the terms of service including appointments, term of office, salaries and allowances, and removal for Chairpersons and other members of Tribunals, Appellate Tribunals and other authorities. The amendments also cap the age of retirement for Chairpersons and Vice-Chairpersons. Currently, these terms are specified in the laws establishing these Tribunals.
One may argue that allowing the government to determine the appointment, reappointment and removal of members could affect the independent functioning of the Tribunals. There could be conflict of interest if the government were to be a litigant before a Tribunal as well as determine the appointment of its members and presiding officers.
The Supreme Court in 2014, while examining a case related to the National Tax Tribunal, had held that Appellate Tribunals have similar powers and functions as that of High Courts, and hence matters related to their members’ appointment and reappointment must be free from executive involvement.[i] The list of Tribunals under this amendment includes several Tribunals before which the central government could be a party to disputes, such as those related to income tax, railways, administrative matters, and the armed forces Tribunal.
Note that a Bill to establish uniform conditions of service for the chairpersons and members of some Tribunals has been pending in Parliament since 2014.
Inclusion of technical members in the Securities Appellate Tribunal
The composition of the Securities Appellate Tribunal established under the SEBI Act is being changed by the Finance Bill. Currently, the Tribunal consists of a Presiding Officer and two other members appointed by the central government. This composition is to be changed to: a Presiding Officer, and a number of judicial and technical members, as notified by the central government.
Creation of a Payments Regulatory Board
Recently, the Ratan Watal Committee under the Finance Ministry had recommended creating a statutory Payments Regulatory Board to oversee the payments systems in light of increase in digital payments. The Finance Bill, 2017 seeks to give effect to this recommendation by creating a Payments Regulatory Board chaired by the RBI Governor and including members nominated by the central government. This Board will replace the existing Board for Regulation and Supervision of Payment and Settlement Systems.
Political funding
The Finance Bill, 2017 proposes to make changes related to how donations may be made to political parties, and maintaining the anonymity of donors.
Currently, for donations below Rs 20,000, details of donors do not have to be disclosed by political parties. Further, there are no restrictions on the amount of cash donations that may be received by political parties from a person. The Finance Bill has proposed to set this limit at Rs 2,000. The Bill also introduces a new mode of donating to political parties, i.e. through electoral bonds. These bonds will be issued by banks, which may be bought through cheque or electronic means. The only difference between cheque payment (above Rs 20,000) and electoral bonds may be that the identity of the donor will be anonymous in the case of electoral bonds.
Regarding donations by companies to political parties, the proposed amendments to the Finance Bill remove the: (i) existing limit of contributions that a company may make to political parties which currently is 7.5% of net profit of the last three financial years, (ii) requirement of a company to disclose the name of the parties to which a contribution has been made. In addition, the Bill also proposes that contributions to parties will have to be made only through a cheque, bank draft, electronic means, or any other instrument notified by the central government.
Aadhaar mandatory for PAN and Income Tax
Amendments to the Finance Bill, 2017 make it mandatory for every person to quote their Aadhaar number after July 1, 2017 when: (i) applying for a Permanent Account Number (PAN), or (ii) filing their Income Tax returns. Persons who do not have an Aadhaar will be required to quote their Aadhaar enrolment number indicating that an application to obtain Aadhaar has been filed.
Every person holding a PAN on July 1, 2017 will be required to provide the authorities with his Aadhaar number by a date and in a manner notified by the central government. Failure to provide this number would result in the PAN being invalidated.
The Finance Bill, 2017 is making structural changes to some laws. Parliamentary committees allow for a forum for detailed scrutiny, deliberations and public consultation on proposed laws. The opportunity to build rigour into the law-making process is lost if such legislative changes are not examined by committees
[i] Madras Bar Association vs. Union of India, Transfer Case No. 150 of 2006, Supreme Court of India, September 25, 2014 (para 89).
