Speaking at Daksh’s Constitutional Day Lecture, Justice Gautam Patel emphasised the importance of seeing the Constitution as a whole rather than in parts.
“We’ve grown accustomed to seeing certain parts of the Constitution. It’s time to see it for what it is—a charter for society in all its forms including the way we are living, working and earning and yes doing business,” he said.
He was addressing one of the questions raised by his fellow speaker, Cyril Shroff, managing partner at Cyril Amarchand Mangaldas, during his lecture.
“What has the Constitution got to do with commerce?”
“Everything,” said Justice Patel. “We have become so limited to seeing the Constitution as Part III that we have not seen it for what it really is.”
On justice and what it really means, Justice Patel said, “When we began, we were probably reacting to the gross exploitation that we had to endure while referring to the Bengal famine. The result is that we have fallen into this false binary of capitalism vs. socialism, or rich vs. poor, for which we will never see an intelligible answer. The only question we need to ask about is efficiency—the most efficient way to do most equity without the labels we attach.”
He concurred with Cyril Shroff’s view on certainty.
“We need certainty in laws,” he said, especially in decision-making. By that, he meant predictability.
“It is the fundamental underpinning of the rule of law that ambiguity leads to disorganization,” he said. He illustrated it with a personal anecdote, where 47% of the cases before him today were from commercial entities.
Justice Patel urged the audience to not be fooled by numbers presented before them. He was specifically talking about the arrears in cases. The moment a case is filed, it becomes pending before such a court, but the fact remains that it is not ready to be disposed of by even the fastest of courts.
There should be adequate time to review the documents, issue notice, and respond. This is not an accurate presentation of pending cases; numbers lie. What needs to be done is to identify the actual problem and find solutions for it, according to Justice Patel.
A recent article in the Economist magazine on the evolving role of the state in business – to a bossy, backseat driver who merely observes the economy- was lauded by both the speakers.
According to Shroff, it represents the progression of a state from an active player to a backseat driver. This, however, raises several concerns, according to Justice Patel.
Questions will always be raised regarding how much corporate impulse from the state can be good or permissible, as the government is a market player that wants to be a corporate, a jealous and envious one, and one that’s armed ferociously, Justice Patel noted.
Similar concerns were also raised around privatisation, including what and how much of the resources should pass to private parties. How much of it is constitutionally valid? Should air, water, etc. go into private hands? “We must set limits,” Justice Patel cautioned.
Shroff also shared his concerns and proposals at the lecture. Although he applauded the Indian courts for their achievements in the arenas of insolvency and arbitration, he said it is not always a bed of roses.
“For instance, a recent case of IBC has deviated from the supremacy of commercial wisdom of creditors,” Shroff said.
Judicial activism has had nuclear impacts on businesses, according to Shroff, creating uncertainty. “All risks can be priced except the unknown risk. What we need is a feedback assessment mechanism for such judgments,” he said.
Shroff also shared his views on the “Amrit Kaal” and said that in 25 years, we will transform from a developing nation to a developed nation, from a poor nation to a rich nation, and from a weak nation to an economic and military superpower. This, however, is not without concerns.
There are 10 major issues waiting to be resolved in the next 25 years, according to Shroff:
Antitrust: The increasing concentration of economic power and control of data among large corporations is going to create several antitrust concerns.
Corporate law and the emergence of jurisprudence on stakeholder governance: The Companies Act, 2013 is a pioneer in terms of imposing a duty toward maximisation of value not just for shareholders but also to other stakeholders. “Will other stakeholders be given class action rights like shareholders under the Act? We are one judicial innovation away from this,” Shroff said.
Privatisation: The coming wave of privatisation and asset monetisation will raise new tensions on the value maximisation front. Asset monetisation will raise new questions about where the value really exists.
Climate litigation: Once the courts are able to create a system of attribution and identify corporations behind climate change, questions regarding extraterritoriality and liability will arise. There are already cases in Latin America, Shroff said.
Expanding the boundaries of public law: Fundamental rights are only enforceable against the state and its instrumentalities. Large populations that are becoming quasi-sovereign may raise questions regarding the standards of public law and whether they should be made applicable to them.
The Metaverse: Will the laws of the physical world be expanded to the metaverse, and what would be the constitutional basis for such action? Will the Constitution apply to such a world? If yes, whose Constitution? This deserves some thought, according to Shroff.
Privacy: Privacy is a fundamental right that citizens have against the state. Although it’s a new dimension in relationships with corporations, a lot of responsibility has been put on the data fiduciary under the new Draft Personal Data Protection Bill.
Ethics: What would be the legal and ethical foundation of artificial intelligence? How will constitutional law provide a framework for creating a new social contract in the digital space? Shroff said these are some questions that need to be addressed.
Litigation financing : Will the Supreme Court clear the air around the issue and open a floodgate of class-action suits? “That needs to be seen“.
Balancing state and private entities: India’s promise of Amrit Kaal is not going to be achieved without private parties. How the state will create a balancing structure between the environment and entrepreneurship remains to be seen. How will the bossy state control its worst instincts? are some of Shroff’s concerns.
“What we need is public confidence to create an equilibrium between the executive and judiciary,” Shroff said. “We need feedback mechanisms, both ex ante and ex post, to assess the impact of judgments. We should reimagine the court process and seek privatisation where necessary, and the Bar should be made future-ready, both technologically and otherwise.”
He also spoke about the necessity of diversity and increased participation of women in the Bar. He pointed out how some of the reasons that prevent diversity are prehistoric, such as a lack of toilets, and how they need to be addressed.