News & Events
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1. No in through the outdoor with IBC
The Supreme Court’s ruling to bar defaulting promoters from hanging on by hook or by crook reaffirms the spirit of the Insolvency and Bankruptcy Code (IBC). The law is meant to ensure quick creditor seizure of defaulting companies followed by a resolution, or a conclusive auction of assets. The verdict has held that a person ineligible under IBC to submit a resolution plan can’t take recourse to the companies law to file a plan.
This is logical. If he were to do so when the company is undergoing liquidation under IBC, it would mean circumventing the code’s restrictions. By upholding the constitutional validity of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, the court authenticates the supremacy of the bankruptcy law. Market players often complain that many companies suffer, as their promoters divert money out of the company in questionable ways or choose not to find ways to repay their dues. IBC forbids promoters of defaulting companies from taking part in any stage of the resolution process, bidding included.
However, keeping defaulting promoters out limits the bidders, and depresses the successful bid below its potential high. ‘It would lead to manifest absurdity if the very persons who are ineligible for submitting a resolution plan, participating in the sale of assets of the company in liquidation or participating in the sale of the corporate debtor as a ‘going concern’, are somehow permitted to propose a compromise or arrangement under Section 230 [of the Companies Act],’ held the bench. Courts must also be guided by the goal of maximising returns from the resolution process. By rejecting backdoor entry, the court underlines that defaulting promoters stand to lose their companies.
2.Courts should relax on vax details
With the prime minister and chief ministers meeting today to develop a plan of action to tackle the surge in Covid-19 cases, it is critical that the Supreme Court does its bit to enable the executive to focus on the job at hand. The court must direct high courts and lower courts to transfer all Covid-related cases to it, and encourage them not to entertain cases that prima facie appear to transgress into the executive’s domain. The danger posed by the pandemic is far from over. Central and state governments must not be encumbered by demands, some of which appear to be frivolous in nature.
The judiciary, on its part, must restrict its observations to points of law. The Delhi High Court’s observations on the use and allocation of vaccines, the decision to provide vaccines to countries as grant assistance, maintaining a control on the levels of export, are clear instances of the court going beyond its jurisdiction. The courts can ask GoI for clarification and explanation, but asking vaccine manufacturers Bharat Biotech and Serum Institute of India to provide details about their production capacity and inventory is literally not their business, but only serves to add confusion.
The roll-out of the biggest vaccination drive to date is a massive logistical exercise. It is also a critical one, as central and state governments have to ensure a steady pace of vaccination to safeguard against new strains and resurgence of Covid-19. At the same time, GoI has to ensure that vaccine production keeps pace with demand, and that the country is meeting its various export obligations. GoI needs to make it clear that one of the driving forces behind its vaccine grant programme is understanding that no country is immune till the world is. So, ensuring vaccine availability in low-income and low-middle-income countries and in our neighbourhood is in enlightened self-interest. Beating Covid-19 requires all stakeholders to work together in common purpose. Efforts to divert attention and confuse do no one any good. Instead, it dangerously detracts from the common goal of tackling the pandemic.
3.Battle of equals? TMC and BJP locked in tense Bengal fight that can go either way
With Bengal in the heat of an intense political battle between TMC and BJP, the upcoming assembly polls could go either way. It’s clear why BJP is exuding confidence about forming its first government in Bengal. The party’s well-oiled electoral machinery has made unprecedented inroads in the state, a fact exemplified by the large number of netas from other parties flocking to its ranks. This, however, also seems to have created a problem of plenty for the party. Unhappy with tickets being given to the new entrants – particularly from TMC – the party’s old guard are expressing their displeasure in inconvenient ways.
In Hooghly, angry BJP supporters ransacked the party’s district office in Chinsurah and locked up the Chandernagore office. Then BJP worker Nirupam Mukherjee reportedly made a failed suicide bid fearing that former TMC strongman who recently joined BJP, Debaprasad Biswas, may get the ticket from Saptagram. Meanwhile, several BJP netas have threatened to contest as independents against the party’s official candidates. True, ticket distribution always causes heartburn for certain party workers. But with BJP’s poll campaign focussing on highlighting corruption and syndicate raj under the Mamata Banerjee regime, TMC turncoats getting preference over party old-timers can undermine the party’s message of poriborton.
It also remains to be seen how Mamata’s injury at Nandigram and her decision to continue campaigning in a wheelchair will be read by the voters. Mamata has been playing up the fact she’s the only woman CM in the country today, stressing that Bengal wants to re-elect its own daughter – a not-so-subtle bid to project BJP as a party of outsiders. Calling herself a “wounded tigress”, Mamata looks to be Bengal’s Modi.
If she’s to scrape through, she would need TMC’s women vote bank to remain intact. According to Lokniti-CSDS data 48% women voted for TMC – six percentage points higher than men – in the 2016 assembly polls. No wonder the party has given tickets to 50 women candidates this time. Another imponderable is the Muslim vote. With the Indian Secular Front of Abbas Siddique joining the Left-Congress combine, the Muslim vote could split and indirectly help BJP. However, everyone assumes that significant chunks of the Muslim vote will go with a Muslim-led party; Muslims might belie this expectation by voting strategically for TMC to defeat BJP. All in all, an absorbing contest is unfolding in Bengal.
4.Cooperative federalism? Amendment casting LG as “government” belittles the elected Delhi assembly’s mandate to govern
The bill introduced in Lok Sabha to amend the Government of NCT of Delhi Act granting the lieutenant governor extensive powers to intervene in the functioning of the capital city’s elected government is a regressive move. The 2018 SC judgment that restricted Centre’s ambit to control over police, public order and land ensured an uneasy ceasefire, allowing Delhi’s administration to proceed relatively smoothly. By mandating LG’s opinion before any decision is taken, the amendment seeks to override SC’s ruling which held that Council of Ministers didn’t need to obtain LG’s “concurrence” on every issue of day to day governance.
In stating that the “government” referred to in any law passed by the Delhi assembly “shall mean the Lieutenant Governor” the amendment ends the autonomy enjoyed by the AAP government and reduces it to a figurehead. A political case is also made against the needless amendment by AAP winning two successive mandates with a thumping majority against two national parties. If this signifies popular approval for its work, there can be no argument in terms of misgovernance to thrust the unaccountable LG’s office with more administrative powers.
The amendment is deeply hurtful for Indian democracy. It gives grist to the pervasive criticism that democracy is being downgraded even as political power is getting centralised. An elected government awaiting the opinion of the unelected LG on administrative decisions will considerably slow down governance. This will directly impact the quality of life in the capital city, already beset by air quality and policing woes. Even if the bill passes the Parliament courtesy NDA’s majority, a legal challenge is bound to ensue. Months could go by in agitation, litigation, and governance at a standstill. Centre must respect federalism and back off while there is still leeway to do so.
- The persistence of identity politics | HT Editorial
The state elections show, yet again, how identity is a central axis of mobilisation. This form of politics defeats the idea of treating each voter as an individual citizen and reinforces narrow identities
A cursory look at the state of political play in states heading for assembly polls throws up a common thread — the persistence of identity politics, on the axis of religion and caste. In Bengal, the Bharatiya Janata Party (BJP) is hoping to ensure a substantial degree of Hindu consolidation, often through micro-caste management and co-option of marginalised groups. The Trinamool Congress is hoping to win over Muslim support, while making a targeted outreach to Hindu sub-groups. In Assam, the salience of identity politics, particularly on the outsider-insider axis, remains deeply entrenched. In Tamil Nadu, even as the ruling National Democratic Alliance combine hopes to win over the support of Hindu sub-castes through social engineering, the Dravida Munnetra Kazhagam-led alliance is hoping to create its social coalition of backward communities, Dalits and Muslims. In Kerala, it is the balance between Hindus-Muslims-Christians, and the balance within Hindus, that will play a key role in shaping the electoral outcome.
To be sure, this is not the whole story of the elections. Issues such as the performance of the state government, welfare schemes, governance promises of an Opposition party, the interplay of urbanisation, mobility, migration and enhanced aspiration of citizens across castes, the role of media and social media, the popularity of local candidates, and the organisational strength of various forces in competition play an important role. But it is remarkable that identity — which is determined by where one is born — remains so central in both the calculus of political parties and of voters.
For politicians, it is much easier to appeal to group identities, when group identities serve as the basis for social organisation, to consolidate their base and polarise. For voters, access to power, often, depends on whether a member of one’s own group is the directly elected representative who can ensure services to constituents belonging to that caste group, or if a party that is broadly sensitive to one’s group interests is in power. This leads to a vicious cycle — where both politicians and voters develop incentives in perpetuating this pattern. This form of politics defeats the idea of treating each voter as an individual citizen and reinforces narrow identities.