India Legal 01 July 2019

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4 July 1, 2019
N a recently published cover story in this maga-
zine, the prolific Professor Upendra Baxi
touched on a subject that most legal analysts shy
away from: The trial and conviction of mentally
ill persons. Should they be treated with extra
doses of dignity and leniency?
The courts have not spoken with resounding cla-
rity on this subject not because of any lack of resolve
or will but rather because of the complex and multi-
farious medico-legal and social dimensions of
this subject.
For example, as Baxi notes, in Accused X v State
of Maharashtra, Justices NV Ramana, Mohan M
Shantanagoudar and Indira Banerjee (delivered on
April 12, 2019), of the Supreme Court grappled with
several perplexing aspects of criminal justice and
mental health. Largely Leaving the matter of sen-
tencing guidelines to the legislature, the Court
favoured working with a framework of reasoned
judicial discretion privileged by judicial directions.
Justice Ramana was succinct and to the point
when deliberating on how culpability can be
assessed in sentencing those with mental illness. He
asked: “Is treatment better suited than punish-
ment?” In a constitutional democracy, as Baxi so
aptly observes, such questions are critical for profes-
sional as well as public discourse.
The larger question of whether to abolish or
retain the death penalty did not concern the Court
here. “Nor did it require any elaborate examination
whether the crime committed and death sentence
awarded fell outside the ‘rarest of the rare’ situation,”
Baxi wrote. “Both the trial and the High Court had
decided that the heinous crime of statutory rape and
murder of two girls coupled with an earlier record of
such crimes deserved death.
“However, the appeal was based on two narrow
grounds: first, no separate hearing on the sentence
was given by the trial court in direct contravention
of Section 235 (2) of the Code of Criminal Procedure
(CrPC) and second, the award of the death sentence
was contrary to the three-judge Bench decision in
Shatrughan Chauhan (2014) followed by a four-
judge Bench decision of this Court in Navneet Kaur
(2014). These decisions ruled that the execution of
persons suffering from mental illness or insanity vio-
lates Article 21 of the Constitution as this would be a
‘supervening circumstance meriting commutation of
the death sentence to life’.”
Baxi’s excellent discourse on this subject is a
must-read, and I would recommend it to all legal
practitioners, students, and dispensers of justice. In
the course of scanning related articles, as part of
broader research on the subject, inspired by Baxi’s
piece, one stands out for its clarity, universality
and scholarship.
I summarise below the salient points from a large
study made on this subject by the prestigious Rand
Corporation. The title is itself a giveaway: “Criminal
Justice Policies Toward the Mentally Retarded Are
Unjust and Waste Money.” Written by renowned
American criminologist Dr Joan R Petersilia, the
article concludes:
Arrest and Prosecution. Persons with mental
retardation often make no attempt to disguise what
they have done. In fact, in trying hard to please
authority figures, they may confess to what they have
not done. And they have little protection against
this, as they often waive their Miranda rights (with-
out understanding what they are doing).
Pretrial Incarceration. Bail is typically available
only for those with jobs or with stable living situa-
tions; mentally retarded persons often lack both.
Plea Bargaining, Court Processing, and Senten-
cing. Since persons with mental retardation tend to
provide more incriminating evidence to prosecutors
than other defendants, they are less successful at
plea bargaining. When they go to trial, their testimo-
ny may be viewed as less credible because aggressive
prosecutors can make them appear unreliable. Pro-
bation is commonly granted to persons with higher
intelligence and greater educational and work
achievement, so the mentally retarded serve jail or
prison sentences at higher rates.
Incarceration, Parole, and Recidivism. Persons
with mental retardation are typically housed with
the general prison population, where they are often
abused or victimised. They tend to rely on physical
THE LAW AND THE MIND
Inderjit Badhwar
I
Astudyon
criminaljustice
policiesfor
thementally
retardedwritten
byAmerican
criminologistDr
JoanRPetersilia
hasthrownlight
onseveral
issues,such
asarrest,
prosecution,plea
bargaining,
paroleand
incarcerationof
suchaccused
andthesteps
takento
assistthem.
Letter from the Editor

responses to physical threats and are thus often reclassi-
fied to higher security levels. That, together with a poor
record of programme participation and an inability to
impress parole boards on interview, makes them less
likely to be granted parole as early as the average
inmate. Once released, mentally retarded persons often
have problems meeting their parole requirements and
find it more difficult than the average inmate to get
a job.
The net result is that persons with mental retardation
are not afforded an opportunity to respond to the chal-
lenges thrown at them by the criminal justice system in a
way that is functionally equivalent to that of more intelli-
gent arrestees. As a result of this inequity, the typical
mentally retarded offender costs the public more for
incarceration than does the average person convicted of
similar crimes.
The system fails these individuals, and thus the public,
usually because it ignores them. It does not routinely
identify them as mentally retarded at any phase of the
process. And routine screening would be required for
identification, since persons with mental retardation
often try to conceal their disabilities. But even when a
judge suspects a mental disability, he or she cannot usu-
ally act on this suspicion because there are few provi-
sions to treat the retarded any differently (although
many provisions target the mentally ill).
Failure to identify persons with mental retardation
makes it difficult to assess the scope of the problem. The
best recent estimate suggests that mentally retarded per-
sons make up approximately four percent of the prison
population. Some 21,000 mentally retarded persons in
California alone are on probation or parole or are incar-
cerated in juvenile or adult facilities—a number that
would seem worthy of policy attention. Yet this popula-
tion has drawn almost no scholarly, public or policy
interest.
A few cities—Boston, Fort Worth and Cleveland
among them—do have programmes that aid the transi-
tion of the mentally retarded parolee or probationer to
society. And programmes in New Jersey and Penn-
sylvania divert certain convicts to carefully supervised
probation. Programmes offering daily structure and
work to mentally retarded participants seem to reduce
considerably their re-arrest rates. These efforts raise
hopes for broader implementation of programmes to
serve this population. The objective of such programmes
is not to excuse mentally retarded offenders from pun-
ishment but to recognise their special needs and, in
doing so, foster their return to law-abiding behaviour
and save taxpayers’ money.
Offenders with mental retardation represent a more
promising target group for intermediate sanctions. For
the reasons mentioned above, they tend to serve long
sentences relative to others who commit similar crimes.
And, because it appears they can be safely supervised
under intermediate sanctions and their recidivism
reduced, costs can be lowered further.
If the potential savings are not enough to induce states
to change the way they handle offenders with mental
retardation, they are likely to face litigation under the
Americans with Disabilities Act. That federal law, signed
in 1990, bans discrimination based on disability. In
reports interpreting the Act, the US Department of
Justice staff has made it clear that states cannot ignore
the needs of prisoners with mental retardation. They
must instead review all prison programmes to ensure
that they are accessible to and usable by disabled
inmates. In California, private organisations have already
filed a class action lawsuit against the governor and the
state department of corrections to force compliance with
the Act. This case could set precedent and, if nothing
else, should considerably raise the profile of the issue.
Whether states take action to save money or to com-
ply with a court order, much more needs to be known to
ensure that the actions taken will serve justice, the tax-
payer and the offender with mental retardation. All pris-
ons will have to begin assessing incoming inmates for
mental disabilities, as those in Texas now do, so the
scope of the problem can be discerned. And more infor-
mation will be needed regarding the characteristics of
offenders with mental retardation and their crimes, how
persons with mental retardation become involved in the
criminal justice system and who provides advocacy serv-
ices on their behalf, among other things.
| INDIA LEGAL | July 1, 2019 5
Twitter: @indialegalmedia
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Contact: editor@indialegallive.com
Anthony Lawrence

Fake call centres have sprouted in
various cities and swindled $900
million from Americans by threatening
to implicate them in crimes, thereby
giving a bad name to India’s BPOs
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LEAD
12Doctor’s Dilemma
The recent pan-India strike by medical professionals is yet another reminder of the need for a one-time
solution in the form of a central act against violence with stringent punishment
15Have a Heart!
The frequent instances of assault on doctors are due to a lack of understanding of their
role and functions and the pressures they work under, writes Dr Kamal Kumar Mahawar
18Charlatans Aplenty
CYBERSECURITY
6 July 1, 2019

28
REGULARS
Followuson
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Website:www.indialegallive.com
Contact:editor@indialegallive.com
Cover Design: ANTHONY LAWRENCE
Cover Photo: UNI
Ringside............................8
Courts ...............................9
Is That Legal...................10
Media Watch ..................39
International Briefs..........50
Elusive Freedom
The Delhi government will file a special leave petition challenging the Delhi High Court’s
order granting release to convict Sushil Kumar Sharma in the tandoor murder case
Merchant
of Hate
Wanted in a clutch of
cases in India, Islamic
televangelist Zakir Naik is
playing the Muslim card in
Malaysia to stave off New
Delhi’s demands for his
extradition
Rumble In the Hills 40
As the Gupta brothers play host to two weddings in Auli, the Uttarakhand HC has set
out stringent conditions and ordered the district administration to monitor the event
Lawless Territory
The murder of the first woman chief
of the UP Bar Council in an Agra
court shows that Yogi Adityanath’s
“bullet for a bullet” strategy to deal
with crime hasn’t quite worked
48
The government is in denial mode as it refutes ex-chief economic ad-
viser Arvind Subramanian’s assessment of GDP figures. But it should
develop a new generation of reforms and rely less on raw wisdom
35
SPOTLIGHT
New Avatar
In a surprising move, former SP strongman Amar Singh was seen
fighting a case for long-time friend Jaya Prada in the Lucknow bench
of the Allahabad High Court
21
On the Backfoot
The Congress government in Chhattisgarh faced embarrassment over the arrest
of a journalist for an innocuous video and was forced to release him
COLUMN
Unfair Entry
The huge lateral entry of “corporate civil servants” is a back-door
capture of the IAS and privatisation of the government. This could
fall foul of the Constitution and lead to social disharmony
22
STATES
46
The GDP Storm
36
Fit For the Job
The National Anti-Profiteering Authority has acted with fairness,
intervening against defaulters and determining undue profiteering
in different transactions, thus allaying fears about its performance
26
ECONOMY
32
Having different rates of
interest for consumers
and builders for delays
on their part amounts
to an unfair trade
practice. However, this
anomaly is yet to be
corrected by courts
Ensure Parity
CONSUMERRIGHTS
COURTS
GLOBALTRENDS
Crash Landing? 42
The Kerala CM has resisted the handing over of the Thiruvananthapuram International
Airport to the Adani group even though the latter already has a presence in the state

8 July 1, 2019
“
RINGSIDE
“How can these boys
be so fearless as if no
one will take action
against them? They
were smiling while
harassing me and
my cab driver...This
is not the Kolkata I
came back to....”
—Actor Ushoshi Sen-
gupta after she was
allegedly harassed by
bikers in Kolkata
“...one of our MLAs
called me and
said...he had been
offered `10 crore to
join the other side.
He was told that the
government would
fall by the next
evening....”
Karnataka CM HD
Kumaraswamy,
accusing the BJP of
trying to topple the
Congress-JD(S) gov-
ernment in the state
“Despite doing my
best, I haven’t been
able to secure the
best interest of the
Faculty of Law
because of non-
cooperation of
the university
authorities.”
—Dean and Head of
Law Faculty, Delhi
University, Professor
Ved Kumari, in her
resignation letter to
VC, DU
“...a proper response
on...‘One Country
and One Election’ in
such a short time
would not do justice
to the subject it
deserves...circulate a
White Paper...to
all...parties, inviting
their views....”
—Mamata Banerjee,
on her absence from
the meeting on “one
nation one poll” with
PM Modi in Delhi
“The role of an
opposition, an active
opposition, an effec-
tive opposition is a
prerequisite for a
parliamentary
democracy...their
every word…every
feeling is valuable
for us.”
—PM Modi to the
media before the
commencement of the
first session of the
17th Lok Sabha
“...I can only hope
and pray that even
now a solution can
emerge and Jet can
fly and fulfil the
needs not only of
employees but of air
travellers....”
—Former chairman,
Jet Airways, Naresh
Goyal after lenders’
decision to start in-
solvency proceedings
against the airline
“I can’t understand
how Sarfaraz can be
so brainless. How
could he forget...we
don’t chase very
well.... The game
was half-won by Pa-
kistan when Sarfar-
az won the toss, but
he tried hard to lose
the match....”
—Pacer Shoaib Akh-
tar on India’s win in
the World Cup match
“...It is your political and moral duty to ensure that
the state fulfils the mandates cast upon it by the
courts. Laxity...towards court orders, sends an
implicit message that the high and mighty consider
themselves above the rule of law...the order im-
pugns your actions...and quashes them as illegal....”
—IAS officer Ashok Khemka in a letter to Haryana CM ML
Khattar, urging him to comply with the Punjab and Haryana
High Court order on adverse remarks in his appraisal report
Anthony Lawrence
The New Lok Sabha. First Day, First Show
'Jai Shri Ram'
‘Jai Bheem’
‘Jai Meem’
‘Jai Hind’
‘Takbeer
Allahu Akbar’
'Vande Mataram'
'Bharat Mata
ki Jai'

Courts
—Compiled by India Legal Team
Sanjiv Bhatt gets life
for custodial death
AGujarat court sentenced former
Gujarat-cadre IPS officer Sanjiv
Bhatt to life imprisonment in a custodi-
al death case. Bhatt had recently
moved the apex court against a Guj-
arat High Court order which refused
his appeal to summon additional wit-
nesses for examination during the trial.
His plea was, however, dismissed. The
case dates back to 1989 when Bhatt,
then additional superinten-
dent of police in Gujarat’s
Jamnagar, had detained
over 100 people in the
wake of a communal
riot and one of the
detainees died.
The Supreme Court has issued notice to
the Election Commission (EC) on a
plea seeking that elections to two Rajya
Sabha seats from Gujarat be held simulta-
neously. The seats fell vacant after Union
ministers Amit Shah and Smriti Irani, both
Rajya Sabha members, won Lok Sabha
seats from Gandhinagar and Amethi, res-
pectively. The petition was filed by the
Leader of Opposition in the Gujarat ass-
embly, Pareshbhai Dhanani, after the EC
on June 15 fixed July 5 for separate
bypolls to the two Rajya Sabha seats. The
Congress said that holding elections for
the two seats separately is against the
rules and the EC’s June 15 order should
be declared “unconstitutional, arbitrary,
illegal, void ab initio” and violative of
Article 14 of the Constitution. The EC has
been asked to respond by June 24 and
the matter will be heard next on June 25.
SC queries separate
bypolls for 2 RS seats
Speaking at a two-day conference of
chief justices of member nations of
the Shanghai Cooperation Organisation in
Russia, Chief Justice of India (CJI) Ranjan
Gogoi said that independence of the judi-
ciary is not a “one-time pill but a state of
affairs” that should remain constant. The
CJI said: “In some phases in the journey
of a nation, when the legislative and exec-
utive wings get swept away from their
duties and goals under the Constitution by
waves of populism, it is for the judiciary
to rise and stand up to the populist forces
and protect the constitutional ethos from
being desecrated by the populists. To
some critics and naysayers, this situation
presents a case for hoisting the classical
counter narrative. Unelected judges, acting
under the constitutional mandate, get to
overturn the acts of the elected majority.”
He further said that “however, it is for us
to recollect that such situations across the
world have heaped tremendous pressure
on the judicial organs,
and it is no surprise
that in some juris-
dictions, judiciary
too has suc-
cumbed to pop-
ulist forces.”
The Madras High Court slammed the
Tamil Nadu government for not taking
adequate steps to handle the water crisis
in Chennai despite two failed monsoons.
A bench of Justices S Manikumar and
Subramonium Prasad was hearing cases
filed against the commercial exploitation
of groundwater from the outskirts of the
city, including a PIL by a resident of
Vellore district, who alleged that sewage
was being allowed to flow through into a
water channel. After hearing the govern-
ment’s stand, the court suo motu
impleaded the secretary of the Public
Works Department and asked him for a
state-wide comprehensive report on the
number of reservoirs, steps taken for
desilting, amount sanctioned, etc. The
matter will be heard next on June 26.
Madras HC hears plea on Chennai water crisis
Two new HC chief
justices appointed
Justices RS Chauhan and V
Ramasubramanian were appointed
chief justices of the Telangana and
Himachal Pradesh High Courts,
respectively, after the government
cleared their names for elevation. It
may be recalled that the Supreme
Court Collegium had on May 10 rec-
ommended four names, of which three
were cleared by the central govern-
ment. On May 22, Justice DN Patel,
one of the recommended names, was
appointed the chief justice of the Delhi
High Court. However, the government
is yet to decide on the elevation of
Justice Akil Kureshi as the chief justice
of the Madhya Pradesh High Court.
Justice Kureshi, the most senior judge
of the parent High Court of Gujarat, is
currently at the Bombay High Court.
Independence of
judiciary not a
one-time pill: CJI

ISTHAT
Are there any changes in cheque
bounce laws?
Yes. Parliament has passed the
Negotiable Instruments (Amend-
ment) Bill, 2018, which has
introduced changes to the
Negotiable Instruments Act,
1881. The court can now ask the
drawer of a cheque to pay inter-
im compensation to the com-
plainant—20
percent of the total amount of the
cheque within 60 days of the
order. This can be done at the
time a case of dishonoured
cheque is filed by the com-
plainant.
However, in case the final
verdict in the case goes against
the complainant, he/she will have
to return the interim compensa-
tion along with interest.
— Compiled by India Legal team
Room For Interim Compensation
Why are rent agreements generally
applicable only for 11 months?
A rent agreement is also known as a
lease agreement. It is a document or
a written contract
between the owner of a
property and the ten-
ant who takes it on
rent. Most rent
agreements are
signed for 11
months, so that
the stamp duty
and other
charges can
be avoided.
According to the
Registration Act, 1908, registra-
tion of a lease agreement is manda-
tory if the leasing period is 12
months or more. And in case of reg-
istration, it is mandatory to pay reg-
istration fee and stamp duty.
Time Limit For
Rent Agreements
?
Is it necessary to show
one’s Aadhaar number
to avail of banking serv-
ices and a mobile con-
nection?
The Supreme Court,
while upholding the
validity of the Aadhaar
scheme, has categorical-
ly ruled that the Aadhaar
number is necessary
only for filing tax returns,
both electronically and
manually, and obtaining
PAN cards. The telecom
operators and banks
can’t compel a person to
share details of his
Aadhaar card for availing
of their services. The
judgment delivered by a
five-judge constitution
bench is a landmark for
the right to privacy.
Restrictions For Aadhaar
10 July 1, 2019
Ignorance of law is no excuse. Here are answers to frequently asked
queries regarding matters that affect us on a day to day basis
Can the governor of a state grant pardon to
a convicted person?
Article 161 of the Constitution has given the
power to the governor of a state to reduce
the sentence of a convict or waive it com-
pletely. The Article reads: “The Governor of
the state shall have the power to grant par-
dons, reprieves, respites or remissions of
punishment or to suspend, remit or com-
mute the sentence of any person convicted
of any offence against any law relating to a
matter to which the executive power of the
state extends.” However, the governor can
use the power only in case of a state law
and not a central law.
Power To Pardon,
But Limited

Lead/ Attack On Doctors
12 July 1, 2019
T started as a small protest by doc-
tors at a Kolkata hospital, two of
whom were assaulted by a dead
patient’s relative. But it did not take
long for it to spread into a nation-
wide movement with government
doctors in various states expressing soli-
darity and resorting to agitations. On
June 17, the Indian Medical Association
(IMA) staged a 24-hour-long protest
across the country, demanding a com-
prehensive central law to deal with
attacks on doctors and healthcare pro-
fessionals in hospitals. The strike
impacted medical services and all non-
essential healthcare facilities, including
OPDs, were closed from early morning
on that day. The IMA also staged a
dharna at its headquarters in Delhi.
Mercifully, normalcy was restored
later the same day after West Bengal
Chief Minister Mamata Banerjee accep-
ted the demands of the protesting doc-
tors. As the strike was called off, the
Supreme Court on June 18 did not pass
any order on a PIL seeking measures for
the safety and security of doctors in hos-
pitals across India and posted it for July.
The IMA has been urging the centre
to frame a central law to check violence
against medical professionals in hospi-
tals for a long time. This writer was
president of the IMA when it submitted
to the centre a draft law in this regard.
On June 15, the Union health minister,
Dr Harsh Vardhan, attached a copy of
the draft in his letter to all chief minis-
ters asking them to frame laws for the
protection of medical professionals.
This is not the first time that doctors
have been assaulted. A 2015 IMA survey
found that over 70 percent of them
had faced mental torture and/or physi-
cal violence in their careers. It polled
1,781 doctors of whom only 37.7 percent
said that they were happy with their
profession; 82 percent were stressed
out; 34.5 percent had high blood pres-
sure; 18.6 percent had diabetes; 61.6
percent had fear of violence during
patient visits; 56.5 percent had thought
of hiring security at the place of their
practice; 31.6 percent never wanted
their children to become doctors; for
45.4 percent, the main source of stress
was the fear of violence and 75.6 percent
faced anxiety attacks.
There are several legal provisions
that deal with the violence against doc-
tors and healthcare professionals:
Doctor’s DilemmaThestrikebymedicalprofessionalsisyetanotherreminderoftheneedforaone-time
solutionintheformofacentralactagainstviolencewithstringentpunishment
By Dr KK Aggarwal
RIGHT TO BE SAFE
(Left) Doctors in
several parts of India
resorted to strikes and
held protests in support
of their counterparts in
Kolkata; (inset) one of the
two junior doctors who
were injured at the
NRS hospital
I
UNI

Criminal Law: Any assault or attack
on doctors, nurses and other staff, as
well as clinical establishments, etc, are
punishable under the provisions of the
Indian Penal Code (IPC), 1860. The pro-
visions can be further placed under:
a) Criminal conspiracy—Sections 120A
and 120B of IPC
b) Offences disturbing public tranqui-
lity—unlawful assembly (Sections 141,
143 and 144 of IPC), rioting (Sections
146, 147 and 148 of IPC), affray (Sec-
tions 159 and 160 IPC).
c) Offences affecting public health, safe-
ty, convenience, decency and morals—
public nuisance (Sections 268, 269 and
294 of IPC).
d) Offences affecting human body—hurt
(Sections 319, 323 and 324 of IPC); gri-
evous hurt (Sections 320, 325, 326 and
326A of IPC); act endangering life or
personal safety of others (Sections 336
337 and 338 of IPC); wrongful restraint
(Sections 339 and 341 of IPC); criminal
force and assault (Sections 350, 351, 352
and 355 of IPC).
e) Offences against property—theft
(Sections 378 and 379 of IPC); mischief
(Sections 425 and 426 of IPC); criminal
trespass (Sections 441 and 447 of IPC).
f) Offence of defamation (Sections 499
and 500 of IPC).
g) Offences of criminal intimidation,
insult and annoyance (Sections 503, 504
and 506 of IPC).
h) Offences outraging and insulting the
modesty of women (Sections 354, 354A,
354B, 354C and 509 of IPC).
In case of the above mentioned
offences, the doctors and their staff can
lodge a police complaint under Section
154 of the Code of Criminal Procedure
and get an FIR registered against the
said offender.
Civil Law: A civil suit can also be filed
by victims on the ground of offences co-
mmitted as mentioned above. It could
be a suit for permanent injunction, for
damages or for defamation.
Apart from these legal remedies,
around 15 states and Union Territories
have their respective legislation related
to violence against doctors. For example,
there is legislation like the Delhi Medi-
care Service Personnel and Medicare
Service Institutions Act, 2008; the Bi-
har Medical Service Institution and
Person Protection Act, 2011, and so on.
In all these laws, the accused, once con-
victed, can be punished with imprison-
ment which may extend up to three
years or fine up to `10,000, or both. The
convicted person/s will also have to pay
compensation which is twice the price of
the damaged property. However, legisla-
tion is not effective and doctors and
police authorities are hardly aware
about the legal provisions.
Government doctors have additional
protection against violence under IPC
Section 186—obstructing a public ser-
vant in discharge of public functions
which says: “Whoever voluntarily obst-
ructs a public servant in the discharge of
his public functions, shall be punished
with imprisonment of either description
for a term which may extend to three
months, or with fine which may extend
to five hundred rupees, or with both.”
An Indian businessman was recently
sentenced to life imprisonment for a
hijack hoax on a Jet Airways’ domestic
flight from Mumbai to Delhi in 2017
that resulted in an emergency landing in
Ahmedabad. Birju Kishor Salla, a resi-
dent of Mumbai, was arrested and
E
ven as the week-long doctors’
strike got over, news has come
in of an appalling case of med-
ical negligence. A woman from Alap-
puzha in Kerala who didn’t have can-
cer was given chemotherapy on the
basis of a false lab report earlier this
year. The incident came to light when
the victim, Rajini, lost all her hair in a
single chemotherapy session, follow-
ing which the doctors found out that
she didn’t have cancer. The state
government ordered a probe into the
matter on June 2, 2019.
Rajini, who is in her late 30s, is a
native of Kudassanad in Alappuzha
district, and sought treatment for a
tumour on her breast. A biopsy was
conducted and the examination was
done in a private lab, which claimed
she had cancer. A chemotherapy se-
ssion was conducted at the Medical
College in Kottayam on the basis of
this report. But the doctors soon
recognised the mistake when she
completely lost her hair after a single
session of chemotherapy.
END TO THE STALEMATE
West Bengal CM Mamata Banerjee at a
meeting with doctors in Kolkata on June 17
HairRaising
UNI

Lead/ Attack On Doctors
14 July 1, 2019
charged for posing a threat to the safety
of passengers and crew on board the air-
craft. He was also fined `50 million
($720,000), which a special National
Investigation Agency (NIA) court ruled
would be given as compensation to the
crew and passengers. Each pilot will get
a compensation of `100,000 out of the
fine amount, while each member of the
cabin crew will receive `50,000, and
each passenger will be paid `25,000 for
the “misery” the incident caused, accor-
ding to a statement released by NIA.
T
he situation described in the fake
hijack incident is the same as
when a doctor is beaten by rela-
tives/friends of a patient in a hospital.
The safety of all patients in a hospital is
at stake. And there may be more num-
ber of patients in a hospital than in an
aircraft. The doctor’s role and impor-
tance is the same as that of a pilot.
The IMA has zero tolerance for
patients or their relatives if they indulge
in violence. The medical profession
demands accountability but not at the
cost of violence. A patient doesn’t have
any right to attack doctors or indulge in
violence at medical establishments. At
the same time, doctors should not resort
to violence as an answer for assault.
They need to follow the principle of
humanity. It is paramount for every doc-
tor to become a role model in society as
far as healthcare is concerned.
So, is strike the answer? In People
for Better Treatment (PBT) vs West
Bengal Medical Council (WBMC) & Ors
on June 14, 2019, the Chief Justice of
the Calcutta High Court, Thottathil B
Nair Radhakrishnan, and Justice Suvra
Ghosh said: “At the outset, let us record
that we do not propose to proceed with
the matter as an adversarial litigation.
However, we need to provide appropri-
ate push with requisite grease to ensure
that the ongoing strike by a section of
doctors comes to an end through gov-
ernmental intervention by way of per-
suasion or otherwise, in accordance with
law. We do so because, within the
parameters of Article 21 of the
Constitution of India, ‘human rights’ as
understood in the civilised societies and
recognised in the international domain
through terms of international conven-
tions, which bind different nations, it is
the fundamental requirement that the
right to health is given top priority and
any need for medical help is immedi-
ately extended to any human being even
if he is not a citizen.
“Therefore, we take this opportunity
to state that resolution of disputes
which would have arisen as a conse-
quence of certain unfortunate events
even in the hospital is not to be coun-
tered by action of eminent and well
informed people like doctors by keeping
away from their primary and fundamen-
tal duty to serve the people.
“Be that as it may, the State Govern-
ment has also to ensure that the griev-
ance of the doctors, particularly in rela-
tion to certain incidents which are
alleged to have occurred, are addressed
in accordance with law without any
delay. We record the submission made
by the Learned Advocate General that
First Information Report has been
lodged and arrests have been made inso-
far as the alleged incidents in which the
doctors are stated to be victims. This
means that the State Government has
taken efforts to push the machinery in
that regard. As a necessary consequence,
it is definitely for the doctors to now
turn themselves to the reconciliatory
mode in the larger interest of the suffer-
ing people and answer their oath which
they have taken when they became doc-
tors. The great advice given through the
Hippocratic Oath ought to lead them to
better ways of dealing with the problems
which they are faced with. The State
Government shall also ensure that ade-
quate protection is provided to the hos-
pitals and place of work of all doctors
and also such places where doctors may
feel insecure in any circumstances.”
Every time there is a doctors’ strike,
courts have to intervene. The solution is
a central act with harsh punishment.
—The writer is President, Heart Care
Foundation of India, and
President-elect, Confederation of Medical
Associations of Asia and Oceania
BEARING THE BRUNT
Patients and their relatives struggle to get
medical help during the strike
UNI

EDICINE is still ref-
erred to as a noble pro-
fession. Ever since I
started this journey
some 28 years ago,
these words have been
drilled into me. Yes, we also need to be
remunerated for our efforts, but that is
not the main reason why we do it. We
make a difference, we were told, and we
get respect like no other profession and
that was supposed to make it worth our
while. And we believed it.
Our graduation took longer than
other disciplines and if one included the
period spent doing “internship”, six
years would go to obtain an MBBS
degree with a licence to practice. Those
doing other disciplines would graduate
in four, three, even two years. When
others our age were constantly partying
and having fun, we were studying. The
medical syllabus is vast and there is no
room for error. Days merged into nights
and months into years. We worked hard
and believed we were training for a very
important role in society and were told
our contribution would be valued.
We were paid approximately `1,800
a month as interns and were told that
we were lucky as batches before us got
only `900. But this was not the end of
it. It soon became clear that though we
would get a licence to practise, we
would not be fit to do so. For that, we
would need many more years of train-
ing. Preparations began again, this time
for postgraduate entrance exams.
I was among the lucky few to be
selected for further training in my cho-
sen speciality—general surgery. More
than half of the medical graduates in the
country do not get this opportunity.
They will not only have to train them-
selves, but also earn a livelihood for
themselves and their families. Many of
us were now around 23-24 years of
Have a Heart
TheassaultsondoctorsinIndiaisduetoalackofunderstandingoftheirroleand
functionsandthepressurestheyworkunder
Lead/ Violence Against Doctors/Column Dr Kamal Kumar Mahawar
M
Ourgraduationtooklongerthanother
disciplinesandifoneincludedtheperiod
spentdoing“internship”,sixyearswould
gotoobtainanMBBSdegreewitha
licensetopractice. Thesyllabusisvast.
mciindia.org

Lead/ Violence Against Doctors/ Column/ Dr Kamal Kumar Mahawar
16 July 1, 2019
age and our families expected us to look
after them and not the other way aro-
und. But their hopes, as well as ours,
were soon going to be dashed.
Those of us who qualified for post-
graduate training then spent another
two-three years learning the craft and
the science while working over 80-90
hours a week and getting paid between
`5,000 and `15,000 a month. Even
then, finding adequate training opportu-
nities proved elusive. Our professors
were under no obligation to train us and
we were in no condition to demand any-
thing. For many, it was too much back-
breaking work and some even thought
of taking their lives.
We saw our friends in other walks of
life getting married, settled, and earning
many times over. Some left for foreign
countries and would send us pictures of
posh cars and foreign holidays. We, on
the other hand, didn't even have time to
breathe and barely enough money to
live by. Yet, we persevered in the hope
that one day it would all be worth it.
Sadly, that day never came for many
of us.
All we wanted was a decent set-up
where we could practise modern medi-
cine and get a fair remuneration. We did
not seek to be rich. Seeing the dismal
state of public healthcare infrastructure
in most parts of the country, many did
not want to work there. Even renowned
central government establishments are
pathetic by modern standards and the
less said about state government-run
clinics and hospitals, the better. Even if
one decided to work there, the remuner-
ation did not match the hard work and
talent. Plus, there were the erratic and
arduous hours to contend with.
You could work for the private sector,
but the wages there were not much dif-
ferent either. They too would exploit the
market forces, make you work long
hours and not even pretend to train you.
Many went abroad. Those who stayed
back, served either as public sector doc-
tors with pitiable salaries and practising
Third World medicine or opened their
own establishments (with money bor-
rowed from family and friends) while
competing with quacks and faith heal-
ers. Contrary to what the public thinks,
fewer than one percent of doctors work
for or own corporate hospitals; most
just get by.
I
t is against this backdrop that one
has to view the violence against
doctors in India. Doctors most
prone and vulnerable to this are junior
doctors working in government hospi-
tals. They have just begun their profes-
sional journey and work for long hours
without enough rest and basic equip-
ment. They deal with the sickest and
the poorest.
Passions run high in such an envi-
ronment. Elsewhere in the world, doc-
tors and nurses can do their job away
from the eyes of worried relatives. Not
in India. Here everyone can go any-
where in the hospital, irrespective of the
time of day or night. All it takes is a per-
ception on the part of the patients’ rela-
tives or the patients that not enough is
being done for them to beat the doctor
up. The doctor may have just phoned his
superior and is awaiting instructions.
But if the patient dies, all hell breaks
loose as the relatives think he is negli-
gent. In case any relative has political or
underworld connections, then nobody
can save the doctor. They come back in
RIGOROUS
TRAINING
(Facing page)
Junior doctors
attending a class in
a medical college;
(right) a victim of
toxic illicit liquor
being attended to
by doctors in a
hospital; (below)
doctors do not
want to serve in
government
hospitals as the
infrastructure is
pathetic and
working hours
erratic and long
Photos:UNI

hundreds and do whatever they wish.
Elsewhere in the world, and even in the
private sector in India, hospitals have
their own security. But this is not so in
government hospitals. Even if there are
one or two security personnel, they pre-
fer not to intervene because in our law-
less society, they will be the first target
in case of any attack and nobody will
even bother. The goons usually have
political patronage and know they can-
not be touched. I am not an expert in
security matters, but it is surely not
beyond the will of the government to
protect its own property and people
working in its establishments.
There is more to it. Indians live in
one of the unhealthiest environments in
the world. The air is so polluted, you
can’t breathe. In most parts of the coun-
try, there is no access to clean water and
even in big cities, water is frequently
contaminated. There are piles of gar-
bage every hundred metres but no one
is bothered till ill-health strikes. And
then the doctor is blamed for failing to
save them.
There is another angle to it. With the
increasing corporatisation of healthcare,
the patient thinks he is a consumer who
has the right to demand health. Just like
any other service or product, if you pay
for it, you want good results. Many
patients have difficulty understanding
how they can’t be cured or how an oper-
ation can have complications when they
have paid for it. They do not understand
that they are paying for the service and
that in healthcare you will have to know
God or be God to guarantee outcomes.
M
ental, verbal and physical
assault of doctors is also on
the rise elsewhere in the
world and that is because the medical
profession, and the healthcare industry
have become victims of their own suc-
cess. We have new medicines, sophisti-
cated equipment and modern scanners
and the finest micro-surgeries can be
done on the tiniest blood vessels. People
can be kept alive for months when not
one but several organs have failed. We
are able to treat a large number of
patients and send them home. But when
we can’t, when there is a complication, it
hits the patients and their families. They
cannot understand what happened and
why. They look for answers and some-
body to blame. Even the most sophisti-
cated patient grievance mechanisms
cannot satisfy them. Justice has to be
instantaneous and direct. They can tell
the doctor anything, even beat him up
and he won’t be able to do anything.
We are after all bound by the Hippo-
cratic Oath. We have to behave in the
noblest ways or we will lose our licence
to practise forever. Patients and their
relatives lose nothing in the process.
There is no mechanism in large parts of
the world for a doctor to report a pat-
ient. The best you can do is walk away
and that is what most of us do. But age
has made many of us a bit more mature.
It has taught us how to keep a lid on our
emotions. Yes, we have moments when
we regret joining this profession, most
of the time, it is an honour to do the job
we do.
However, fending off attacks is not
something that young doctors manning
emergency departments are trained to
do. They also struggle with the death of
a patient or an adverse outcome as
much as the patients’ families. Often,
these doctors don’t have the requisite
training to handle precarious situations
without the supervision of senior doc-
tors. They are being asked to work for
twice as long as normal human beings
for wages that are a tenth of what their
friends elsewhere are earning. They are
told, this is your duty. Are we then treat-
ing these young doctors fairly? I leave it
to you to decide.
—The writer is consultant general
and bariatric surgeon, Sunderland
Royal Hospital, and author of The
Ethical Doctor
NO PRYING EYES
Clown doctors amuse a young patient in a
child clinic in Budapest. Doctors elsewhere in
the world can work without fear
Youngdoctorsmanningemergency
departmentsarenottrainedtofendoff
attacks.Theytoostrugglewiththedeath
ofapatientoranadverseoutcomeas
muchasthepatients’families.

Cyber Security/ Fraud On US Citizens
18 July 1, 2019
ECH-SAVVY Indian char-
latans are stealing the data
of American citizens with
impunity. The Indian po-
lice has busted numerous
fake call centres in Noida,
Vadodara, Gurugram, Ahmedabad,
Indore and Mumbai which were operat-
ing under the garb of BPOs and swin-
dling US citizens of millions of dollars.
They did this by sending fake voice mes-
sages in American-accented English and
threatened to implicate them in crimes
such as money laundering, drug traffick-
ing, tax evasion, etc.
The latest such racket was busted by
the Madhya Pradesh cyber crime cell in
Indore on June 11. A 15-member cyber
cell team conducted raids on two fake
call centres in the posh Platinum Plaza
location and arrested 80 people.
These youth, mostly from North-East
India, were employed by Javed and Ra-
hil, owners of the call centres, to black-
mail US citizens. The police also arrest-
ed Javed and two other masterminds,
Shah Rook and Bhavil, from Indore.
Rahil is absconding and his location has
been traced in the US, according to
the police.
Additional director general (cyber
cell) Purushottam Sharma reportedly
said that of those arrested, 61 were men
and 19 women. All were from Nagaland
and Meghalaya. According to the cyber
cell officers, in the last one year alone,
the two call centres duped nearly 2.5
lakh US citizens.
Javed confessed that he had swindled
a US citizen of $26,800 in a single day.
During interrogation, the accused rev-
ealed their modus operandi which was,
more or less, the same as other rackets
busted in the past three years. Most of
the accused in these cases were from
Nagaland, Meghalaya, Rajasthan, Guja-
rat, Maharashtra, UP, MP, Manipur,
Delhi and Haryana.
Callers from the two call centres
would pose as US vigilance agency offi-
cers and tell Americans through voice
messages that there were problems with
their social security numbers and solicit
money to fix these. Some US citizens
would be told that they had committed
tax offences and would have to pay to
settle the cases. They would be threat-
ened and told to either fight the US
Internal Revenue Service in court
India’s Cyber Crooks
Inanalarmingtrend,fakecall
centreshavesproutedin
variouscitiesandswindled
$900millionfromAmericans
bythreateningtoimplicate
themincrimes,therebygiving
abadnametoIndia’sBPOs
By Rakesh Dixit
in Bhopal
T
GAME OVER
(L-R) Javed, Bhavil and Shah Rook, the
accused in the scam, in police custody;
computers seized from Indore call centre

and face a fine as a “tax defrauder”
or pay immediately as an “out-of-court
settlement”.
The call centre employees would call
the US citizens on direct international
dialling or Magic Jack Application. The
call centres uploaded software in which
the employees typed a message in their
system and it would be converted into a
voice call. Bulk messages would be sent
to 10,000 US citizens in one go.
When this message reached the
mobile or landline number of US citi-
zens, a female voice would be heard in
an American accent. That would hood-
wink the US citizens into trusting the
message. Those who opened it would
hear a voice saying that their numbers
were detected in money laundering,
drug trafficking or some other offences.
Then the call recipients would be ad-
vised to contact a toll-free number—
8007678409—for further enquiry, with
a warning that if they didn’t follow the
advice, their social security number
would become dead and legal action
would follow.
Fearing legal hassles in US courts,
many victims would call the toll-free
number. Agents of the racket would pick
up the call and ask the callers to settle
the case by coughing up a certain
amount of money to be deposited in a
particular bank account. There were
several fake account holders in the US
who would assist in the racket.
Once the trapped Americans deposit-
ed the money, it would be sent through
the hawala route to Ahmedabad and
converted into Indian currency. This
would then be deposited into a bank
account of the racket’s masterminds. In
fact, it was only last year that a Penn-
sylvania-based man who had helped
coordinate a fraud was sentenced to
14-and-a-half years in prison.
R
ahil and Javed of Ahmedabad
started the call centres a year
ago in Indore. Both came to the
city after the cyber police crackdown
against bogus call centres in Noida,
Mumbai and Guwahati. At Platinum
Plaza in Indore, they rented two flats
and set up two call centres of 25 seats
and 50 seats.
Work would start after 9 pm and the
main doors would be shut soon after the
employees entered the flats.
Javed (28) is a resident of Hill Park
residency in Ahmedabad. He told the
cyber cell that he got into this crime
from 2014. After dropping out from
Class 8, he became a salesman for mo-
bile SIMs and dongles.
Here he came into contact with one
Mustafir who used to run a BPO in
Ahmedabad. Mustafir told Javed how
he had duped a US citizen through ISD
trunk line, posing as an agent from the
US revenue services division. He told
his American prey that there were
irregularities in his tax pending case
which were detected in his social
security number.
Mustafir’s exploits inspired Javed to
start blackmailing on a larger scale. He
sold his house in Ahmedabad for `40
lakh and added `30 lakh more to open a
BPO. He recruited young boys and girls,
mostly from the North-East for the fake
call centre. Bhavil (29), another prime
accused, is a resident of Blind School,
Mount Abu in Rajasthan. The third key
player, Shah Rook (25) is a resident of
Al Mubarak Residency in Ahmedabad.
Indore resident Sunny Chouhan who
helped Javed and Rahil set up the call
centre is absconding and is believed to
be in the US.
Those arrested told the cyber cell
during interrogation that four more fake
call centres were operating in Indore.
On their tip-off, police teams raided the
call centres, but the owners had fled by
then. In one of the centres which was
working out of a hotel, the owner, Kewal
Sandhu, fled with his baggage to Ahme-
dabad. A cyber cell team tried to nab
him at the airport but he managed to
dodge them.
The police have gathered all informa-
tion about the owners and they will be
arrested soon, said the SP, cyber cell,
Jitendra Singh. A hunt has begun to
SCOPE TO CHEAT?
Thousands of call centres in India are home
to back-office operations for American and
European companies
Themainsourceoftheblackmailingwas
stolendata.Thisincludedpersonalinfor-
mationofUScitizenssuchaslandline
andmobilenumbers.Thepolicerecov-
eredthedataof10lakhUScitizens.
iccs-bpo.com

Cyber Security/ Fraud On US Citizens
20 July 1, 2019
arrest the owners of the four call cen-
tres—Minesh, Hardik, Siddharth and
Kewal Sandhu. All the call centre own-
ers are linked to Sunny Chouhan. Sunny
helped them set up call centres in the
name of BPOs and helped them cheat
US citizens.
T
he main source of the blackmail-
ing was stolen data. This includ-
ed personal information of US
citizens such as landline and mobile
numbers. The police recovered data of
10 lakh US citizens from 100 computers,
100 mobile phones and software seized
from the call centres in Indore. The
cyber cell is getting the computers and
software examined by expert teams and
has contacted the FBI for help in the
investigation as it surfaced during inter-
rogation that many of the racket’s agents
and those engaged in money transfer
through fraud were US bank account
holders. The victims would be asked to
transfer money to these bank accounts.
Singh said the cyber cell would coor-
dinate with the FBI to ensure that the
victims get a chance to lodge com-
plaints. Attempts would also be made
to get the FBI to arrest other accused
who are in the US. The cell has intimat-
ed to the FBI the progress of the inves-
tigation.
Singh said even if one duped US
citizen lodged a complaint, the MP
police would take strict action against
the cheats. He claimed that the cyber
cell has enough evidence to get the
accused punished. “We have seized full
record of those US citizens who were
made to cough up money.”
The cyber cell sources said they got
information from a private US investi-
gation agency that cyber crooks in India,
posing as vigilance officers, had swin-
dled $900 million from US citizens in
the last five years.
India is home to a vast number of
back-office operations for North
American and European companies.
Thousands of call centres in India pro-
vide services to these firms—processing
everything from utility payments to
credit card bills.
While such business arrangements
help western companies cut costs, there
have been frequent allegations of securi-
ty breaches and improper trading of
consumers’ account details and other
commercial information for profit. The
Indore fraud is the latest example of this
alarming trend.
April 20, 2019, Vadodara: The Saya-
jigunj police busted a bogus call centre
and arrested four persons from Alkapuri
area. Investigations revealed that the
accused, identified as Manish Khati,
Ravi Thavar, Swagat Salat and Arun
Shah, were duping American citizens
through a fake call centre. The accused
would call up US citizens through a soft-
ware and offer to help get loans.
August 2018, Bhopal: A fake call centre
which duped US citizens of huge sums
was busted in Bhopal. The police said
that the members of the group posed
online as US law enforcement officers
and duped US loan defaulters of huge
sums by threatening them with prosecu-
tion and arrest. Seven youths, four from
Madhya Pradesh and three from Guja-
rat, used to run the call centre from rent-
ed premises in Bhopal.
December 2018, Noida: The Noida
police busted a fake call centre duping
US citizens. The workers here would
call US citizens and intimidate them by
saying there were problems with their
social security number and demand
money to “fix” it. Over the past few
months, about a dozen fake call centres
were busted in Noida and many arrest-
ed, officials said.
January 2018, Gurugram: A major call
centre racket operating separately from
different buildings in Udyog Vihar, Phase
5, which allegedly duped American and
other foreign citizens by offering them
loans, lotteries and tax benefits was
busted by the Gurugram police. Among
the 33 arrested were managers and
team leaders, while over 250 employees
were included in the investigation.
October 2016, Mumbai: The police
arrested 70 call centre workers on suspi-
cion of tricking American citizens into
sending them money by posing as US
tax officials. A total of 772 workers were
detained in raids on nine call centres in
a Mumbai suburb.
Racketsgalore
Duringthecourseoftheinvestigation,
thecybercellcametoknowofothercall
centresoperatinginIndore.SP,cyber
cell,Indore,JitendraSingh,saidthat
theownerswouldsoonbearrested.
Additionaldirectorgeneral(cybercell)
PurushottamSharmareportedlysaidthat
ofthe80arrestedinthecallcentrecase
inIndore,61weremenand19women.All
werefromNagalandandMeghalaya.

Spotlight/ Jaya Prada’s Lawyer
N June 12, the Lucknow
Bench of the Allahabad
High Court saw a rare and
intriguing sight—Amar
Singh wearing black law-
yer’s robes and fighting a
case for his long-time friend, Jaya Pra-
da. It is another matter that the bench
dismissed Jaya Prada’s petition. What
had everyone agog was how and when
did Amar Singh, a businessman and for-
mer parliamentarian, become a lawyer
and from where.
His career has been see-sawing for
years and after being expelled from the
post of general secretary of the Samaj-
wadi Party (SP), he resigned from all
the posts in January 2010. He even
spent a brief period in judicial custody
in 2011 and then retired from politics,
saying he wanted to give more time to
his family. However, in 2016, he was
elected to the Rajya Sabha with help
from the SP, before being thrown out
again by Akhilesh Yadav and his uncle,
Ram Gopal, after the former took con-
trol of the party.
This new avatar of Amar Singh was,
however, not known to people. Few had
any clue that he was a law graduate.
Apparently, he studied law from Kolkata
but that could not be confirmed.
Coming back to the petition, Jaya
Prada had challenged Azam Khan’s elec-
tion from the Rampur Lok Sabha con-
stituency on jurisdictional grounds, a
simple fact which the BJP candidate’s
lawyer clearly lost sight of. Arguing for
her, Amar Singh pleaded that as chan-
cellor of Mohammad Ali Jauhar Univer-
sity, Khan was holding an office of profit
and hence he should be disqualified.
Dismissing the petition, Justices
Ranjan Roy and NK Jauhari said:
“Rampur falls under the jurisdiction of
the Allahabad High Court therefore the
Lucknow Bench can’t adjudicate due to
lack of territorial jurisdiction.” The
bench also said that the writ petition
itself was not maintainable and only an
election petition can be moved in
such circumstances.
Jaya Prada, Amar Singh, whom she
once described as her “godfather”, and
Azam Khan were once prominent mem-
bers of the SP but fell out as Jaya Prada
and Khan competed for prime position
in the party. Matters came to a head in
2009 when, miffed over Jaya Prada
being fielded as the SP’s Lok Sabha can-
didate from Rampur, Azam Khan
resigned from the post of general secre-
tary and its parliamentary board. Jaya
Prada won the Rampur seat despite
Khan’s strong campaign against her
during the poll.
Jaya Prada first won from Rampur in
2004 when Amar Singh’s stars were in
the ascendant and he enjoyed tremen-
dous power in the party. A year later,
Azam Khan, regarded as the SP’s Mus-
lim face and known for his controversial
remarks, was back with the party. And
relations between him and Singh turned
ugly. In an oblique reference to Singh,
Khan said that “some bad elements”
were behind the party’s problems. He
said about Singh: “He said some time
ago that he knew certain secrets of
Mulayam. But we know his three quali-
ties. His first quality is that he is a fixer.”
He refused to mention Singh’s second
quality but of his third quality he said:
“He is a supplier.”
A peeved Singh responded with a
threat: “I was with Mulayam with 14
years and would like to hear from him
how many I had supplied during my
days with the SP. The SP leader would
be in jail if I opened my mouth.”
Jaya Prada also chipped in saying
that Khan’s statement was an insult to
all women and that his return to the
party was ample proof that Mulayam
Singh Yadav favoured those who insult-
ed women.
It will be interesting to see what his
next move will be.
0
Donning New Robes
Inasurprisingmove,formerSPstrongmanAmarSinghwasseeninanotheravatarinthe
LucknowbenchoftheAllahabadHighCourt
By Atul Chandra in Lucknow
MAN IN BLACK
Amar Singh was a counsel for Jaya Prada in a
case against SP’s Azam Khan

to 60 percent of the total number of
posts. This is main-gate entry, back-
door capture of the IAS and privatisa-
tion of the central government. This
could fall foul of the Constitution of
India on certain counts:
The Preamble promises to secure to all
its citizens justice, social, economic,
political; liberty of thought, expression,
belief, faith and worship; equality of sta-
tus and opportunity and fraternity,
assuring the dignity of the individual and
the unity and integrity of the nation. The
IAS is the instrument to provide this
governance across the country.
Articles 15 and 16 provide for reserva-
tion for the advancement of SCs/STs/
OBCs as well as representation of these
classes and communities in the services
under the State.
Article 312 covenants the IAS into the
Constitution.
Article 320(3) mandates the central
government to consult the UPSC on all
matters relating to recruitment to the
civil services and for civil posts as well
as in making promotions and transfers
Column/ Lateral Entry MG Devasahayam
22 July 1, 2019
ITHIN days of
NDA-3 taking over
and less than two
months after NDA-2
inducted nine pri-
vate sector sp-
ecialists as joint secretaries to the
Government of India (GoI), the
Department of Personnel & Training
(DoPT) is busy preparing a proposal for
inducting 400 domain experts to fill
deputy secretary/director posts in the
central government. For the purpose,
DoPT officials are working to frame a
process of recruitment and evaluation of
private sector employees. If implement-
ed, this could take away 60 percent of
the 650 posts at this level under the
Central Staffing Scheme which is cur-
rently available mostly to Indian
Administrative Service (IAS) officers.
An RTI application in the matter of
the nine joint secretary appointments
has revealed that the recruitment proc-
ess adopted by DoPT did not provide for
reservation to candidates from the Sc-
heduled Castes (SCs), Scheduled Tribes
(STs) and Other Backward Classes
(OBCs). The reason given is that “since
each post to be filled under this scheme
is a single post, reservation is not appli-
cable”. But if they were considered as a
group of nine, there would have been at
least two seats for OBCs and one for an
SC candidate. This is clear sleight-of-
hand.
This appears to be deliberate as evi-
dent from the Union Public Service
Commission’s (UPSC) response to a
question asking how many candidates of
different social categories were selected
for these posts. It said that “as per the
requisition of DoPT, candidates were to
be selected for joint secretary level posts
on contract basis (Lateral Entry). DoPT
had clarified that there would be no
reservation in this recruitment case”.
“Lateral Entry” normally refers to
inducting outsiders into a handful of
posts in a structured system called the
IAS. It is certainly not so when it comes
W
UNI
Dismembering
Bureaucracy
Thehugelateralentryof“corporatecivilservants”isaback-door
captureoftheIASandprivatisationofthegovernment.Thiscould
fallfouloftheConstitutionandleadtosocialdisharmony
SardarVallabhbhaiPatelwasconvinced
thatonlyaseasonedpan-Indianbulwark
couldcarryoutthedifficultagendaof
preservingtheunityofthecountrypost-
Independence.TheIASfittedthebill.

Delhi’s capital could carry out this diffi-
cult agenda post-Independence. The
IAS fitted the bill and it was covenanted
in the Constitution despite resistance
from chief ministers and Constituent
Assembly members.
T
he task was arduous and the cri-
sis in the IAS started in the early
1960s when “development”
replaced “public service” as the major
goal of administration. Emergency and
its oppressive ways in the seventies
impacted the character of IAS officers as
“servants of the people”.
Liberalisation-privatisation-globali-
sation in the Nineties brought in further
change. The FDI-GDP model of devel-
opment split the IAS between the amir
aadmi and the aam aadmi agenda. This
split face led to conflicts between the so-
called “corporate” and “non-corporate”
bureaucrats and elements of the “spoils
system” crept in. Such conflicts have
resulted in skewing of basic governance,
leading to serious inequity and injustice
to the disadvantaged.
Even so, the IAS is a permanent civil
service and must remain so. It must also
go through fundamental and holistic
reconfiguring to transform itself into a
vibrant, professional management
cadre. To make this happen, IAS
reformers should become iconoclastic,
take the bull by the horn and demolish
pet theories, myths and mindsets that
have crippled the dynamism of the serv-
ice. These myths include “bureaucratic
gagging” that chokes innovation; “politi-
cal subservience” that kills neutrality;
over-protection that brings in cowardice
and the “jack-of-all-trades” practice, fit-
ting round pegs in square holes and
square pegs in round holes.
The best way to professionalise the
IAS was to dismantle these archaic
hangovers and make the service—now
endowed with medical, technical and
management personnel—perform while
keeping the country united and the
CHANGES IN THE OFFING
Prime Minister Modi at an inaugural session
of assistant secretaries in New Delhi
from one service to another.
With all its flaws, failings, individual
corruption and incompetence, the IAS
has so far kept the faith of the Founding
Fathers of our Republic in holding
together a sub-continent of about 1.3
billion people comprising 4,635 multi-
religious communities who speak 179
languages and 550 dialects. Being an
all-India service, it is a bridge between
the centre and the states, with knowl-
edge and expertise flowing both ways
from village level to the nation’s capital.
As the centre has no cadre of gover-
nance of its own, the IAS provides the
critical inputs from the states that form
the Union of India. Besides, the IAS is
part of the constitutional scheme of
things and cannot be cast away by a
mere executive decision.
Sardar Vallabhbhai Patel did not
achieve the unity of the country out of
the blue. He worked hard for it from dif-
ferent dimensions. He was convinced
that only a seasoned and committed
pan-Indian bulwark with a spread from
the remote villages to the corridors of

FROM THE BACK DOOR
(Clockwise from far left)
Amber Dubey, Arun Goel,
Sujit Kumar Bajpayee and
Rajeev Saksena, inducted
by NDA-2 from the private
sector as joint secretaries
of senior officials
directly from the mar-
ket who are to co-exist
with permanent civil
servants.
This kind of system
is prevalent in the US.
According to David
Cohen, a US govern-
ment expert, these
political appointees are
more of a problem than
a solution. They make
the job of the career
civil servant harder,
draining his energy and
dampening his creativi-
ty and initiative. They comprise whole
layers of unnecessary bureaucracy and
impede communications and work flow.
They have vested interests and carry
them on their sleeves. They cost a lot of
money. This sums up the spoils system
in the US and the shenanigans of the
Trump presidency bear testimony to it.
A
pprehensions about the “spoils
system” in India are also the
same. Currently, IAS officers are
selected through a fiercely competitive
and largely fair examination conducted
by the UPSC. In the Indian context, lat-
eral appointments will be made on the
wishes of the ruling oligarchs who will
be loyalists, hampering the neutrality of
the civil services. It will lead to an expo-
nential growth of favouritism, nepotism
and corruption.
The task of “professionalising” the
IAS was started by former Prime
Minister Manmohan Singh, but he con-
fined himself to training and equipping
the civil servants for the purpose. But
Prime Minister Modi has become a spe-
cialist in demolishing and even destroy-
ing institutions and instruments of gov-
federal structure intact. For this, the
PMO should have assumed leadership,
declared an administrative crisis, rallied
the legislature and executive, revamped
political leadership and come out with a
comprehensive reform/reconfiguration
blueprint so that the IAS could become
the bulwark of “Governance for
Development and Unity”, which is badly
lacking today.
Instead, the Modi government has
been doing the opposite and has now
brought in the spoils system with a
vengeance to dismember the IAS. The
spoils system, also called the patronage
system, is an arrangement that employs
and promotes civil servants who are
friends and supporters of the political
group or persons in power. In a parlia-
mentary democracy, wherein the gov-
ernment is run by permanent civil ser-
vants, this is unacceptable. Protagonists
of lateral entry, however, compare this
with the earlier practice of appointing
professionals to senior positions in gov-
ernment from outside the IAS. This is
untenable because what is being
attempted now is not isolated “lateral
entry” of experts, but bulk recruitment
ernance. Doing this with the IAS has
been assigned to the NITI Aayog which
lacks any knowledge of India and its
governance system.
The Aayog has virtually become a
corporate consultant urging the privati-
sation of all infrastructure and services.
Now it wants to privatise the IAS, which
is a constitutional entity and the most
potent instrument of democratic and
equitable governance.
During Modi-1, like many institu-
tions and instruments of democratic
governance, the IAS has been under
assault. First came the steep reduction
of its role at the decision-making level of
joint secretaries in central government
departments when they were replaced
with personnel from other services that
have no all-India character or exposure.
Then came the proposal to trash the
merit list for the civil services recom-
mended by the constitutionally mandat-
ed UPSC and instead, allotting the serv-
ice as well as the cadre based on the
trainee’s performance at the Academy
during the short Foundation Course.
Even before the ink dried on this,
nine “professionals” from the market
were appointed at senior positions in
the Government of India. Now the num-
ber has leapfrogged to a staggering 400
and may go up further.
The market-based recruitment of
“corporate civil servants” would not
adhere to the constitutional require-
ment of affirmative action in favour of
the disadvantaged communities and
would lead to serious social disharmony.
By dismembering the IAS, the knot that
binds the centre and the states would be
considerably loosened if not totally unr-
avelled, thereby seriously endangering
the unity and integrity of the country.
Things will fall apart. Can the centre
hold?
—The writer is a former Army and
IAS officer
Column/ Lateral Entry/ MG Devasahayam
24 July 1, 2019

services by reducing their tax rates and
extending the benefit of input tax credit
(ITC) in the entire supply chain. This
was expected to reduce prices of goods
and services. But that can happen only if
the benefits of reduced tax incidence are
passed on to consumers. Soon after the
implementation of GST on July 1, 2017,
the government realised that some man-
ufacturers, dealers and service providers
were not passing on these benefits to
consumers and were making additional
profits. The government then thought of
a mechanism through which this undue
profit would be returned to the con-
sumers. If the consumer could not be
identified, this would be returned to
society through the Consumer Welfare
Fund. Based on this concept, the gov-
ernment brought in some anti-profiteer-
ing measures through Section 171 of the
Central GST Act, read with 16 anti-prof-
iteering rules.
Section 171 stipulates that any reduc-
tion in the rate of tax on any supply or
any benefit of ITC will have to be passed
on to consumers by way of a commensu-
rate reduction in the price of goods or
services. It further authorises setting up
of an Anti-profiteering Authority to
ensure this. As for the tenure of the
Authority, the rules stipulate that “the
Authority will cease to exist after the
expiry of two years from the date on
which the Chairman enters upon his
office unless the Council recommends
otherwise”. The Authority came into
existence on November 30, 2017 with
the assumption of charge by its first
chairman, BN Sharma. Its tenure will be
over on November 30, 2019 and hence
the urgency to move for its extension.
This raises the basic question of
whether the Authority served its pur-
Column/ GST/ National Anti-Profiteering Authority Sumit Dutt Majumder
26 July 1, 2019
ACH GST Council meeting
has brought about a change
for the better in the GST
regime. In the 35th meeting
chaired by Finance Minister
Nirmala Sitharaman on June
21, there were several important issues
which were discussed. The most impor-
tant one related to extension of the
tenure of the National Anti-Profiteering
Authority which was to expire on Nov-
ember 30, 2019. The tenure has now
been extended by two years. The Coun-
cil also approved imposition of an addi-
tional penalty of up to 10 percent on
entities not passing on benefits of GST
rate cuts to consumers. At present, this
default is punishable with a penalty of
`25,000. The Council also approved the
use of Aadhaar for GST registration and
extended the deadline for filing annual
returns by two months to August 31. It
also approved setting up of an appellate
tribunal for north-eastern states and
another one for all Union Territories.
One of the important objectives of
GST was to reduce tax on goods and
E
Serving its Purpose
InitialfearsaboutthereturnofInspectorRajhavebeenbeliedastheAuthorityhasactedwith
fairness,interveningagainstdefaultersanddeterminingundueprofiteeringindifferenttransactions
SoonaftertheimplementationofGSTon
July1,2017,thegovernmentrealised
thatsomemanufacturers,dealersand
serviceproviderswerenotpassingon
benefitstoconsumers.

15 percent.
Thus, there are many cases where
the Authority has intervened justifiably
against defaulters, even as it has been
fair about determining “undue profiteer-
ing” in different types of transactions
and passed orders in favour of assessees
in deserving cases. Initial apprehensions
about the return of Inspector Raj thro-
ugh the route of anti-profiteering inves-
tigations have been belied by the experi-
ence of the past one-and-a-half years.
T
he Authority reportedly continu-
es to receive actionable compla-
ints of undue profiteering by
companies. Besides, a good number of
past cases are also pending completion
of investigation. Therefore, the Author-
ity had requested extension of its tenure
by two years. Seeing the above cases, the
Authority did serve its purpose and its
tenure has been rightly extended by
two years.
On the issue of setting up additional
GST Appellate Tribunals, it may be re-
called that Sections 107 to 121 of the
Central GST Act read with nine rules
deal with dispute resolution through
appeal procedures. Section 109 of the
Act deals with the constitution of a
national bench of the GST Appellate
Tribunal in Delhi. It also empowers
setting up of state benches or area
benches for an individual state or a
group of states. The national bench has
already been set up. In respect of 18
states, approval has been given,
although these have not yet been opera-
tionalised. The proposal for setting up
state benches for Delhi, Odisha and
Telangana will soon be discussed.
The issue of includability of extra
neutral alcohol (ENA) within the ambit
of GST is also an important one. Given
that GST revenues have not been doing
very well, the government is looking for
additional sources of revenue. According
to Article 366 (12A): “Alcoholic liquor
for human consumption” has been kept
out of GST and levy on it is continuing
in the jurisdiction of states in the form
of state excise and state VAT. On the
other hand, in the pre-GST era, central
excise was levied on industrial alcohol
which is not for human consumption.
Now it is under GST. Therefore, the
most critical question would be whether
ENA is an industrial alcohol or ‘alcohol
for human consumption’. There is no
dispute that ENA is used for manufac-
turing alcoholic liquor for human con-
sumption and that it’s not fit to be
directly consumed. Therefore, there
should not be any difficulty in bringing
in ENA under GST, and no amendment
of the Constitution is required for that.
Reportedly, on a previous reference by
the Council, the attorney general had
also opined that it can be included in
GST as ENA is not being consumed
directly by people. Once included in
GST, this will be an additional source of
GST revenue to be shared between the
centre and states.
Hopefully, these measures will lead
to further improvements in GST.
—The author is former Chairman,
Central Board of Excise & Customs, and
author of three books on GST—the latest
one, GST-Explained For Common Man
pose and whether its tenure has been
rightly extended. The rules do not speci-
fy the grounds on which the tenure can
be extended. It has been left entirely to
the Council as rules say that unless the
Council recommends otherwise, the
tenure will be limited to two years.
As of now, the Authority has passed
67 orders in respect of allegations of
undue profit. Some orders show how
some assessees were making undue
profits, necessitating intervention by the
Authority. One of the orders pertained
to builders M/s Pyramid Infratech Pvt
Ltd which failed to pass on GST reduc-
tion benefits such as availment of ITC to
2,476 flat owners. The order said that
the company had unduly profiteered—
`8.22 crore up to February 28, 2018.
Thus, there was a violation of the provi-
sions of Section 171 of the CGST Act.
In another case of a Jaipur-based
stockist of Hindustan Unilever Ltd
(HUL), the Authority found it guilty of
undue profiteering by not passing the
benefit of GST reduction on a skincare
product to consumers. While the GST
rate was reduced from 28 percent to 18
percent, the stockist increased the base
price of the product in order to keep the
selling price the same as before. The
Authority observed that HUL was legal-
ly bound not to charge the enhanced
base price, resulting in negation of the
effect of reduction in the rate of tax.
There have also been orders in favour
of assessees. In the case of Schindlers
India, the applicant had paid an advan-
ce for purchase of a lift and was charged
service tax which could be levied at the
time of issue of the invoice on June 28,
2017, a pre-GST period. Hence, the
Authority held that there was no case of
“profiteering”.
In a recent case of Bharti Telemedia,
the complaint was that the assessee,
who was in the direct-to-home satellite
business, had not reduced the prices of
its offerings despite a reduction in GST
rate. But the Authority, while dismissing
the complaint, observed that actually
the tax rate had gone up in the GST
regime from the earlier pre-GST rate of
TheAnti-ProfiteeringAuthoritywasset
uponNovember30,2017withthe
assumptionofchargebyitschairman,
BNSharma.Ithaspassed67ordersin
respectofallegationsofundueprofit.

Indian companies to borrow overseas
and for the stock market. As Subrama-
nian so aptly states in his conclusion:
“The heady narrative of a guns-blazing
India must cede to a more realistic one
of an economy growing solidly but not
spectacularly.”
This research, coming from a person
as close to the real numbers as anyone
can possibly be, reinforces the observa-
tions made about India’s actual GDP by
myself and a few other economists.
The facts are irrefutable—underlying
figures on consumption, investment,
credit growth, employment and exports
do not support an economy growing at
seven percent.
The PM’s Economic Advisory Council
recently submitted a rebuttal to Sub-
ramanian’s claims. But in a typical “shoot
the messenger” style, it offered no alter-
native hypothesis, or new data. Instead it
is laced with opinions and denials. This
is not reassuring. The government can’t
perpetually be in denial mode.
Erroneous GDP calculations are putting
Economy/ GDP Numbers
28 July 1, 2019
HERE has been a lot of con-
troversy around India’s GDP
numbers. Many economists,
including myself, have
pointed out (April 20, 2019
issue of India Legal) trou-
bling issues with India’s growth num-
bers. In a recent article, India’s ex-chief
economic adviser Arvind Subramanian
stoked the controversy by claiming that
there was a 95 percent probability that
India’s GDP growth over the 2011-2016
period was around 4.5 percent, almost
2.5 percent per year lower than the gov-
ernment’s claim of 7.1 percent over that
period. This suggests that over six years,
the overestimation in GDP could be as
high as $500 billion.
This has severe implications for the
country’s credit rating, its credibility
with foreign investors, the ability of
T
STICKING TO ITS GROUND
(L-R) Nirmala Sitharaman taking charge as
finance minister. The government’s Economic
Advisory Council has rebutted Arvind
Subramanian’s claims on India’s GDP figures
The GDP StormThegovernmentisindenialasitrefutesex-chiefeconomicadviser
ArvindSubramanian’sassessmentofGDPfigures.Butitshould
developanewgenerationofreformsandrelylessonrawwisdom
By Sanjiv Bhatia
GDPissubjecttomethodological,
estimationandmeasurementerrorsand
itsstatedvalueisquiteabstract.So,
whenpoliticiansbecomegiddyaboutits
valuediscountallthatassheerhype.
Photos: PIB

That process starts with accepting the
reality that India’s economic growth is
overestimated and overhyped.
GDP has now become the standard
measure of economic progress. But des-
pite its ubiquitous use, there are doubts
about both the accuracy of its measure-
ment and its usefulness as an indicator
of economic growth. There are three
reasons why GDP numbers can be
wrong. Firstly, GDP is an artificial con-
struct and its measurement is fraught
with error. Secondly, bad data and poor
methodology can induce errors in esti-
mation. Finally, there is outright fudging
of data by governments and that makes
GDP growth numbers untenable.
A
construct like GDP is subject to
methodological, estimation and
measurement errors that are so
profound that its stated value is quite
abstract. So, when politicians become
giddy about its value (India is the fastest
growing economy in the world), and
analysts give their estimate of GDP
growth (GDP will grow at 7.25 percent
this year), discount all that as sheer
hype. Those estimates are entirely
meaningless and will undoubtedly
change with subsequent revisions (the
US, for example, just recently revised its
1929 GDP number).
There are many challenges with cal-
culating GDP. For instance, it is difficult
to measure the contribution of innova-
tion to GDP. How does one measure the
value of a free Google Maps even though
the travel time it saves can be used pro-
ductively? Or the value of the voice re-
cognition software that I am using to
write this blog, which makes me signifi-
cantly more productive? Or a free phone
call on Skype which adds nothing to
GDP while a paid international call on
Airtel gets counted in GDP? There is
now a strong consensus that GDP mis-
estimates the digital economy and that
the economic growth of innovative
countries like the US is far higher than
their stated GDP value. Conversely, the
stated growth in traditional economies
like India is far higher than actual eco-
nomic development.
Another problem is that many activi-
ties go unreported in the calculation of
GDP. Housekeeping, cleaning, cooking
and other such duties performed by
members of the family do not get count-
ed in GDP. But if a maid cleans the
house, and reports her income, it adds
to GDP. This problem is particularly
acute in a country like India where 90
percent of the employment is in the
the PM’s credibility on the line when he
speaks of India being a $5 trillion econo-
my by 2024—an event that would
require GDP to grow at 14 percent every
year over the next five years (the proba-
bility of which is close to zero given that
India has had just one double-digit
growth year in the past 70 years). As a
result of this hubristic assessment of
India’s economic growth, programmes to
distribute wealth are higher on the gov-
ernment’s agenda than reforms to gener-
ate wealth. The reality that wealth must
first be created before it can be distrib-
uted could hit India soon.
Policies driven by a focus on redistri-
bution will be a crucial mistake. India’s
first generation of economic liberalisa-
tion reforms, introduced in 1991, chan-
ged India to a wealth-creating economy,
and over the next two decades, produced
a remarkable increase in economic well-
being. Per capita income increased by
650 percent, poverty decreased from 47
percent to 17 percent, real estate boomed
and the stock market rose by over 1,200
percent. But the marginal benefits from
those reforms have started to decline and
a new generation of reforms is now
required for India to continue its transi-
tion from a low middle-income economy
to an upper-middle-income economy.
AttherecentNITI
Aayog’sGoverning
Council,PMModi
spokeaboutthegoal
ofIndiabecominga
$5trillioneconomy
by2024,not
realisingthatitwould
requiretheGDPto
growat14percent
everyyearoverthe
nextfiveyearstoget
there—the
probabilityofwhich
isclosetozero.

productive if he sees more patients
in a day or fewer patients but with bet-
ter outcomes?
The problem of estimating GDP is
compounded by the lack of good, unbi-
ased data collection and statistical
analysis. The quality of India’s data has
always been suspect, and the recent
merger of the Central Statistics Office
(CSO) and the National Sample Survey
Office (NSSO) into one unit, answerable
to the government instead of Parlia-
ment, has accentuated concerns about
the sanctity of the country’s data. While
Subramanian astutely refrains from di-
rectly accusing the government of fudg-
ing the data, he acknowledges that it
was change in data sources and method-
ology that is responsible for the overesti-
mation of growth.
GDP can be calculated separately
using three different methods: the sup-
ply or production method, the demand
or expenditure method and the income
method. The final number should be
identical under these different methods.
A simple example illustrates this. Ass-
ume a small island economy with a fac-
tory that produces ten shirts and sells
them for `10 each. Under the produc-
tion method, the GDP of this island
would be the production of ten shirts at
`10 each for a total of `100. The expen-
diture method would calculate the am-
ount paid by the residents to buy these
shirts—again `100. And as the expendi-
ture of the residents becomes income for
the factory, the income method also
gives a GDP of `100.
I
n most developed economies like
the US, GDP is calculated using the
expenditure method. The expendi-
ture approach calculates the spending
by the different groups that participate
in the economy. So, GDP = C + G + I +
NX, or (consumption by the citizens +
government spending + investment by
businesses + net exports). In India, GDP
is measured from the production side by
calculating the gross value added (GVA)
from the production of goods and serv-
ices using data from financial accounts
of companies, tax data, and other prox-
ies, and then adjusting it for inflation
using price deflators.
Subramanian gives three reasons for
the overestimation of GDP in the post-
2011 period. First, he finds that the price
deflators used to account for inflation in
the calculation of real GDP are inappro-
informal economy where payments are
in cash or barter. Another problem with
GDP is in the measurement of services.
GDP works well in a production econo-
my (a factory making widgets), but in
a service economy like India how, for
example, does one measure the produc-
tivity of a doctor? Is the doctor more
Economy/ GDP Numbers
30 July 1, 2019
India’sfirst-generationeconomicreforms,introducedin1991,changedittoa
wealth-creatingeconomy.Percapitaincomeincreased,realestateboomedandstock
marketsrosesharply.Butthemarginalbenefitsfromreformshavestartedtodecline.
Photos: UNI

tors and find clear evidence of deterio-
ration in all these indicators in the
post-2011 period. It suggests that
India’s original liberalisation reforms of
1991 have run their course and that it is
time for Economic Reforms 2.0.
Subramanian has boldly put aside
his partisan leanings and stated the
obvious—India’s economic growth is
moribund. Many of us have said this in
opinion pieces, but coming from some-
one who was in the driver’s seat, should
be a wake-up call. Modi would be well
advised to bring together experts from
around the world to develop a new
generation of reforms based on less
government interference, free markets,
increased privatisation of production
resources, modernisation of capital
markets, less regulation and greater
economic freedom. The economy is too
complex a system to rely on raw
wisdom.
—The writer is a financial economist
and founder, contractwithindia.com
sions cannot be brushed away. For ex-
ample, his use of correlation analysis on
a small sample size of seven observa-
tions (the post-2011 period) is of con-
cern. Correlation estimates on such
small samples are notoriously unstable
and fraught with errors—which may ex-
plain why Subramanian finds a negative
correlation (instead of a low but positive
correlation) between GDP and 11 of his
17 economic variables for the 2011-2016
period. A negative relationship between
IIP and GDP, for example, makes no
sense economically or statistically.
W
hat is more relevant, howev-
er, is the conclusion that
Subramanian should have
arrived at but didn’t. He rightly con-
cludes that India’s GDP has been over-
estimated, but blames that on flawed
methodology. But what should be of
more profound concern is the deterio-
rating trend in all the major economic
indicators post 2011. This trend is a sta-
tistical fact independent of any method-
ological problem in estimating GDP. In
an article titled “India’s Wasted
Decade”, I examine a wide range of eco-
nomic and human development indica-
priate—an argument supported by Gita
Gopinath, chief economist at the IMF.
Lower oil prices post 2013 and reduced
input costs make the value added app-
ear larger than it was. Secondly, Subra-
manian finds that the value added by
the manufacturing sector was overesti-
mated in the post-2011 period. He bla-
mes that on a shift in methodology—
using data from the MCA-21 database of
companies maintained by the Ministry
of Corporate Affairs (MCA) instead of
data from the Index of Industrial Pro-
duction (IIP) and the Annual Survey of
Industries (ASI). It was recently discov-
ered that almost a third of the compa-
nies in the MCA-21 database are closed,
non-traceable or misclassified. As a
result of this GVA from manufacturing
was being overestimated. The third rea-
son Subramanian gives for GDP’s over-
estimation is the inflated value of the
contribution of the informal sector. As it
is hard to obtain reliable data from the
informal sector, statisticians use a ratio
of the value added by the formal sector
as the imputed contribution of the infor-
mal sector. This ratio has remained con-
stant despite clear evidence that the
adverse impact of demonetisation was
disproportionately higher on the infor-
mal sector.
One can always quibble with statis-
tics, and I too have issues with Subra-
manian’s methodology, but his conclu-
TherearechallengeswithcalculatingGDP.Howdoesonemeasurethevalueofafree
GoogleMapeventhoughthetraveltimeitsavescanbeusedproductively?Moreover,
themajorityemployedinIndia’sinformaleconomymaketheirpaymentsmostlyincash.

Consumer Rights/ Home Buyers
32 July1, 2019
recent order of the
National Consumer
Disputes Redressal
Commission (NCDRC)
has once again opened
the debate on the rate of
interest that builders ought to pay for
failing to complete construction of
homes and hand over their possession to
home buyers within the stipulated time.
Builders have for long exploited con-
sumers through highly discriminatory
clauses in the contract. While the home
buyer is asked to pay a whopping 18-25
percent interest on delayed payment of
instalments, the builder offers a pit-
tance, as little as 1.4 percent, to the con-
sumer for delays on his part in fulfilling
his contractual obligations.
Home buyers, therefore, have for
long been demanding that there should
be parity in the rate of interest and con-
sumer courts should impose on builders
the same rate of interest that builders
charge from consumers, particularly
when they are asked to refund the
money paid by the consumer.
In Amit Soni vs M/s Umang Real-
tech Pvt Ltd, decided on June 3, the
National Commission agreed with this
view. “Logically, if the seller is charging
interest from the buyer @ 18% p.a, we
should have no hesitation in awarding
the same rate,” the Commission said in
its order. However, it did not act on that
logic and asked the builder to refund the
money paid by the home buyer, with
interest calculated at 12 percent. “Hav-
ing regard to the fact that banks have
Havingdifferentratesofinterestforconsumersandbuildersfordelaysontheirpartamountsto
unfairtradepractice.However,thisanomalyisyettobecorrectedbycourts
By Pushpa Girimaji
A
Take a Fair Stand
Anil Shakya

lowered the interest rate and the Hon’-
ble Supreme Court has been awarding
interest keeping in view the current
market situation and considering the
recent decline in the cost of borrowing
and return on the investments made
with the banks, we are of the view that
interest @ 12% p.a. would meet the
ends of justice…,” the Commission said.
But it did award, besides the interest, an
additional compensation of `1 lakh and
costs of `25,000.
T
he builder-buyer agreement in
this case imposed an interest of
18 percent per annum for default
on the part of the buyer, but offered a
penalty of only `5 per square foot of
super area of the apartment per month
for delayed completion of the project.
Pointing out that this worked out to a
paltry 1.4 percent interest per annum,
the Commission said there was no justi-
fication for such clauses that gave an
unfair advantage to the seller over the
buyer and such terms in contracts came
within the definition of “unfair trade
practice” under Section 2(r) of the
Consumer Protection Act.
In fact, in two other recent cases—
Mohit Sharma vs M/s Ramprastha
Promoters and Developers Pvt Ltd
(decided on May 1, 2019) and Pratima
Rajpal vs Parsvnath Developers Ltd
(decided on May 30, 2019), where con-
sumers had made similar pleas, the
Commission awarded only 12 percent
interest and costs (no compensation),
saying it would meet the ends of justice.
The Commission’s reluctance to award a
higher rate of interest in all cases per-
haps stems from the Supreme Court’s
criticism of the Commission in 2004 for
routinely awarding a uniform rate of 18
percent in all real estate cases, irrespec-
tive of the facts of the case or the loss
suffered by the consumer.
In response to a bunch of petitions
filed before it, the Supreme Court in
Ghaziabad Development Authority vs
Balbir Singh (decided on March 17,
2004), considered whether the grant of
interest at 18 percent per annum in all
cases was justifiable. Its conclusion was:
“…compensation has to be worked out
after looking into the facts of each case
and after determining what is the
amount of harassment/loss which had
been caused to the consumer.”
The apex court said: “No hard and
fast rule can be laid down, however a
few examples would be where an allot-
ment is made, price is received/paid but
possession is not given within the period
set out in the brochure. The Commis-
sion/Forum would then need to deter-
mine the loss. Loss could be determined
on basis of loss of rent which could have
been earned if possession was given and
the premises let out or if the consumer
has had to stay in rented premises then
on basis of rent actually paid by him.
Along with recompensing the loss the
Commission/Forum may also compen-
sate for harassment/injury both mental
and physical.”
This verdict did make the National
Commission more careful in its compu-
tation of interest, but in several cases
where it found the attitude of the build-
er to be particularly arbitrary and high-
handed, causing immense loss and men-
tal agony to consumers, it did award 18
percent interest and compensation,
quoting a decision of the Supreme Court
in 2012.
In Dr Naren P Sheth vs M/s Lodha
Group (decided on May 5, 2016), for
example, where even after collecting
`1.02 crore out of the total cost of `1.04
crore from the consumers—senior citi-
zens—the builder cancelled their allot-
ment maliciously without even a written
notice and sold the flats to another
party, the Commission directed refund
of the money paid by the allottees with
18 percent interest, besides a compensa-
tion of `1 lakh each. While doing so, the
Commission referred to the decision of
the Supreme Court in KA Nagamani vs
Karnataka Housing Board (decided on
September 19, 2012). Here, the apex
court had observed that the consumer,
who had deposited the money in the
hope of getting a flat, was being
deprived of it and thereby the benefit
Homebuyershaveforlongbeenexploited
bybuilders.Whiletheformerisaskedto
pay18-25percentinterestondelayed
instalments,thelatteroffersaslittleas
1.4percentfordelaysonhispart.
IMPORTANT PRECEDENT
The NCDRC recently agreed with the view
that there should be parity in interest rates
Anil Shakya

India Legal 01 July 2019

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India Legal 01 July 2019