The doctrine of separation of powers implies that each pillar of democracy – the executive, legislature and the judiciary – perform separate functions and act as separate entities. The executive is vested with the power to make policy decisions and implement laws. The legislature is empowered to issue enactments. The judiciary is responsible for adjudicating disputes. The doctrine is a part of the basic structure of the Indian Constitution[1] even though it is not specifically mentioned in its text. Thus, no law may be passed and no amendment may be made to the Constitution deviating from the doctrine. Different agencies impose checks and balances upon each other but may not transgress upon each other’s functions. Thus, the judiciary exercises judicial review over executive and legislative action, and the legislature reviews the functioning of the executive. There have been some cases where the courts have issued laws and policy related orders through their judgements. These include the Vishakha case where guidelines on sexual harassment were issued by the Supreme Court, the order of the Court directing the Centre to distribute food grains (2010) and the appointment of the Special Investigation Team to replace the High Level Committee established by the Centre for investigating black money deposits in Swiss Banks. In 1983 when Justice Bhagwati introduced public interest litigation in India, Justice Pathak in the same judgement warned against the “temptation of crossing into territory which properly pertains to the Legislature or to the Executive Government”[2]. Justice Katju in 2007 noted that, “Courts cannot create rights where none exist nor can they go on making orders which are incapable of enforcement or violative of other laws or settled legal principles. With a view to see that judicial activism does not become judicial adventurism the courts must act with caution and proper restraint. It needs to be remembered that courts cannot run the government. The judiciary should act only as an alarm bell; it should ensure that the executive has become alive to perform its duties.” [3] While there has been some discussion on the issue of activism by the judiciary, it must be noted that there are also instances of the legislature using its law making powers to reverse the outcome of some judgements. (M.J. Antony has referred to a few in his article in the Business Standard here.) We discuss below some recent instances of the legislature overturning judicial pronouncements by passing laws with retrospective effect. On September 7, 2011 the Parliament passed the Customs Amendment and Validation Bill, 2011 which retrospectively validates all duties imposed and actions taken by certain customs officials who were not authorized under the Customs Act to do the stated acts. Some of the duties imposed were in fact challenged before the Supreme Court in Commissioner of Customs vs. Sayed Ali in 2011[4]. The Supreme Court struck down the levy of duties since these were imposed by unauthorised officials. By passing the Customs Bill, 2011 the Parliament circumvented the judgement and amended the Act to authorize certain officials to levy duties retrospectively, even those that had been held to be illegal by the SC. Another instance of the legislature overriding the decision of the Supreme Court was seen in the Essential Commodities (Amendment) Ordinance, 2009 which was passed into an Act. The Supreme Court had ruled that the price at which the Centre shall buy sugar from the mill shall include the statutory minimum price (SMP) and an additional amount of profits that the mills share with farmers.[5] The Amendment allowed the Centre to pay a fair and remunerative price (FRP) instead of the SMP. It also did away with the requirement to pay the additional amount. The amendment applied to all transactions for purchase of sugar by the Centre since 1974. In effect, the amendment overruled the Court decision. The executive tried to sidestep the Apex Court decision through the Enemy Property (Amendment and Validation) Ordinance, 2010. The Court had issued a writ to the Custodian of Enemy Property to return possession of certain properties to the legal heir of the owner. Subsequently the Executive issued an Ordinance under which all properties that were divested from the Custodian in favour of legal heirs by a Court order were reverted to him. The Ordinance lapsed and a Bill was introduced in the Parliament. The Bill is currently being examined by the Parliamentary Standing Committee on Home Affairs. These examples highlight some instances where the legislature has acted to reverse judicial pronouncements. The judiciary has also acted in several instances in the grey areas separating its role from that of the executive and the legislature. The doctrine of separation of powers is not codified in the Indian constitution. Indeed, it may be difficult to draw a strict line demarcating the separation. However, it may be necessary for each pillar of the State to evolve a healthy convention that respects the domain of the others.
[1] Keshavananda Bharti vs. State of Kerala AIR 1973 SC 1461
[2] Bandhua Mukti Morcha AIR 1984 SC 802
[3] Aravali Golf Club vs. Chander Hass (2008) 1 SCC (L&S) 289
[4] Supreme Court in Commissioner of Customs vs. Sayed Ali (2011) 3 SCC 537
[5] Mahalakshmi Mills vs. Union of India (2009) 16 SCC 569
The Minister of Railways, Dinesh Trivedi, presented the Railways Budget 2012 to Parliament on 14th March. While commenting on the financial position of Railways, the Minister said that 'the Indian Railways are passing through a difficult phase'. The Operating Ratio for the closing year is now estimated to equal 95%. This is significantly higher than the 91.1% figure budgeted last year. Operating Ratio is a metric that compares operating expenses to revenues. A higher ratio indicates lower ability to generate surplus. Surplus is used for capital investments such as laying of new lines, deploying more coaches etc. Therefore, a smaller surplus affects the Railway’s capability to make such investments. Budget v/s Revised estimates 2011-12 Budget 2011-12 had estimated the performance of Railways for the financial year. Revised estimates have now been submitted. Taken together, these two figures help in comparing actual performance against targets. Some observations are enumerated below:
Budget estimates 2012-13 In 2012-13, Railways plan to improve Operating Ratio to 84.9% and to increase surplus to Rs 15,557 crore. This is more than 10 times the surplus generated in 2011-12 (Revised Estimates). The effective increase in freight rates is estimated to average 23%. During this time, passenger fares are also estimated to increase by an effective average rate of 19%. [1] Infrastructure Performance during the 11th Plan Under the 11th Five Year Plan, the total plan expenditure for Railways had been approved at Rs 2,33,289 crore. The Outcome Budget shows that the actual expenditure is only likely to be Rs 1,92,291 crore. Thus, expenditure will fall short by Rs 40,998 crore. This gaps exists despite a significant increase in the Gross Budgetary Support approved by Parliament. Plan expenditure during 2007-12 (In Rs Crore)
Approved Expenditure |
Actual Expenditure |
|
Gross Budgetary Support |
63,635 |
75,979 |
Internal Resources |
90,000 |
67,763 |
Extra Budgetary Support |
79,654 |
48,549 |
Total |
2,33,289 |
1,92,291 |
The Standing Committee on Railways, in its 11th report presented in August 2011, had sought an explanation from the Ministry. According to the Ministry, lower mobilization of internal resources and lack of extra budgetary support are the main reasons for the shortfall. Internal resource mobilization has been low because of (i) impact of the 6th Pay Commission; and (ii) slow growth in freight earnings due to the economic slowdown. Extra budgetary resources have been low due to non-materialization of funds through the Public-Private Partnership route. Proposals for the 12th Plan Two recent committees – Kakodkar Committee on Railway Safety and the Pitroda Committee on Railway Modernization – have called for large investments in the next five years. The Kakodkar Committee has recommended an investment of Rs 1,00,000 crore in the next five years to improve safety; the Pitroda Committee has recommended an expenditure of Rs 3,96,000 crore in the next five years on modernization. The Railway sub-group of the 12th Five Year Plan has also estimated a requirement of Rs 4,42,744 crore for various other investments proposed to be undertaken during the Plan period. [2] All three groups have called for significant investments in infrastructure augmentation in the next five years. Budget proposals 2012-13 According to the Minister’s speech, the Annual Plan outlay for the year 2012-13 has been set at Rs 60,100 crore. The plan would be financed through:
What happens now? The Budget is likely to be discussed in the two Houses within the next few days. Post the discussion, the Ministry's proposals will be put to vote. Once passed, the Ministry can put its proposals into action. For more details on the Railway Budget, including the projects proposed this year and the status of proposals made last year, please see our analysis here. To understand some of the challenges faced by the Indian Railways, see our blog post from last year. Notes: [1] The ‘effective average fare’ has been calculated by dividing the total income from the segment (freight/ passenger) by the total traffic (in NTKM/ PKM). This would vary with changes in fares as well as the usage by different categories of users (including the proportion of tickets booked through Tatkal). [2] Source: Report of the Expert Group on Railway Modernization (Chairman: Sam Pitroda)