Week of January 18, 2021

The Court eases bankruptcy resolutions, recalls the Emergency, and more!

Apex Court Weekly is a weekly round-up of judgments, petitions, orders and notices as they develop at the Supreme Court of India (“the Court”). We also occasionally cover High Courts. We cover some stories that gather national attention and some that should. This update is written by Rahul Srivastava, J.D. candidate at Cornell Law School, and supported by the Cornell India Law Center.


Prior views cannot disqualify committee members

The Court is under heavy fire for creating an ad hoc committee to mediate the protests against the government’s agriculture reforms. In a hearing unrelated to the farmers’ issue, the Chief Justice addressed the issue, noting that “. . . [W]hen we appoint a committee and we find the members have expressed their opinions on the subject, they are still entitled to continue”. The Chief Justice suggested that being qualified to join a committee and expressing prior views on the issue are consistent with each other and shouldn’t disqualify anyone from being on a committee.


A step forward in bankruptcy

India’s bankruptcy code underwent a complete overhaul in 2016. You can listen to our podcast episode on bankruptcy with some of those involved in drafting the statute here. The episode discusses bankruptcy laws in India and the United States, while explaining the economic value of a robust bankruptcy code.

This week, the Court made it easier to resolve bankruptcies in Manish Kumar v. Union of India. The Court held that once a bankrupt company is sold to new owners, the new owners and the company cannot be criminally liable for the previous owners’ actions. The Court cited a need to bring a resolution that would generate a sale of market value during liquidation. Getting rid of criminal liability will enable the new owners “to make a clean break with the past and start on a clean state”.

The decision comes as bad loans handed out by India’s state-owned banks continue to drag the economy. 


No review of Aadhar case

Justice K.S. Puttaswamy v. Union of India, commonly known as the Aadhaar case, upheld the constitutionality of India’s Aadhar program and approved the Aadhar Act’s passage as a money bill, which prevented the Rajya Sabha from voting on the Bill. It’s not uncommon for the Court to re-litigate its own decisions, soon after they are handed out. This week, the Court dismissed petitions seeking review of the Aadhar case, holding that there was “no case for review”. 

Maratha case schedule laid out

On February 5, the Court will begin hearings on petitions challenging the Maharashtra government’s law creating reservations in education and jobs for the Maratha community. We covered the Court’s stay on implementing the law, which passed constitutional muster at the Bombay High Court in 2019. While the Court is continuing with virtual hearings, Maharashtra asked the Court to hear this case when in-person hearings resume.


Stay away from negotiating settlements

This article criticizes the Court’s recent role in mediating peace between the government and the protesting farmers. The author notes that this recent trend is coupled with the Court’s timidness in deciding the constitutionality of executive action. While the Constitution outlines the Court’s jurisdiction and other responsibilities, there is no mention of setting up ad hoc committees to adjudicate disputes. The Court’s past ventures into creating ad hoc committees have raised many concerns that are manifesting in the farmers’ case.  

Reform legal education

At a virtual release event of the book “The Law of Emergency Powers”, Justice Kaul said that that there are too many lawyers in the country, and that the quality of legal education has diluted. Abhishek Manu Singhvi, the book’s author, argued that mediocre law colleges should be asked to shut down. He noted that many of these institutions do not offer adequate resources for students. The Justices also recalled the Emergency as “one of the darkest hours of democracy”.

In the spirit of reform, we want to suggest a class that the Court’s future Justices will find handy: Succinct legal writing.