Top India Judges' Rare Public Spat Endangers Investor Confidence

(Bloomberg) -- A simmering dispute at India’s top court burst into public view on Friday, with senior judges making allegations that call into question the ability of the court to function in a way that reassures foreign investors.

Four senior Supreme Court judges used a rare press briefing to speak out against chief justice Dipak Misra over his choices for judges to hear potentially sensitive cases, including one involving the death of a lower court justice.

"We tried to collectively persuade the Chief Justice that certain things are not in order, therefore he should take remedial measures," Justice J. Chelameswar said. "Unfortunately, our efforts failed," he added. "All four of us are convinced that unless this institution is preserved and maintains its equanimity, that democracy will not survive in this country."

The comments, which hurt India’s key stock indexes, capped months of increasingly visible discontent at the court and raise questions over a judiciary that often rules in cases that impact India’s business and economic landscape. The legal system is already known for years-long delays and a backlog of more than 25 million cases. 

Despite jumping 30 spots on the World Bank ease of doing business ranking, India remains 164th in the world for "enforcing contracts," in part because of the subjective allotment of judges to cases.

"This press conference is reflective of several deep-rooted problems that have been germinating for a while within the Supreme Court," including a lack of transparency, said Surya Deva, a professor at the City University of Hong Kong’s law school. "I hope this incident proves to be a tipping point to deal with the root causes plaguing the Indian judicial system."

Sensitive Cases

The four judges raised concerns with the chief justice over the allocation of judges to sensitive cases, including one involving the death of a lower court judge. That judge -- Justice B.H. Loya -- was trying Amit Shah, president of the ruling Bharatiya Janata Party, in a criminal case. India’s Supreme Court will begin hearing a plea to probe Loya’s death on Jan. 15.

Jagdish Thakkar, a spokesman in the Prime Minister’s Office, didn’t respond to a call seeking comment.

The rare public comments from sitting judges raise broader questions about the quality of the Indian judicial system, which has a huge impact on the country’s business and economic landscape.

But this isn’t the first sign of unease in the country’s top court.

A prominent lawyer and judicial activist Prashant Bhushan alleged late last year that Misra, as well as his immediate predecessor, were hand-picking judges on cases that could have ended in investigations of the judges themselves. Although technically within their power, Bhushan said this was a conflict of interest. 

"The Chief Justice of India, for the first time, has violated the most basic norm of any decision-making authority that no one shall be a judge in his or her own case," Bhushan wrote on Twitter on Nov. 10, 2017.

The chief justice said the allegations were "nonsense" during a court hearing last year. On Friday, he could not be reached for comment and Supreme Court spokesman Rakesh Sharma said there was no response from the court.

"A greater level of transparency and a more robust set of procedures for the allocation of judges to cases in the Supreme Court would instill a greater confidence among international business leaders," said Edward Simpson, director of the South Asia Institute at the University of London’s School of Oriental African Studies.

The institution is facing a "credibility crisis," former Supreme Court judge Santosh Hegde said in an interview on Jan. 2.

Bribes, Impropriety

Throughout the last year, numerous Indian judges have been accused of impropriety. India’s Central Bureau of Investigation, the main federal investigative agency, arrested a retired high court judge on charges of demanding bribes and assuring that he could get a case settled through Supreme Court "contacts."

In a separate case in May, a Supreme Court bench handed a sitting high court judge in West Bengal a six-month jail term for improper conduct after he alleged numerous senior judges were corrupt. He was recently released. His sentencing shows the need "for greater scrutiny and screening of judiciary," India’s law minister Ravi Shankar Prasad said in June.

Separately, there are also allegations a previous chief justice self-selected a bench of judges for another case that involved accusations against him and other members of the judiciary.

"If the Supreme Court of India is in peril, India is in peril," said Yashwant Sinha, a senior member of the ruling party and a former finance minister in a previous BJP administration. "This matter at the Supreme Court has be taken with the seriousness it deserves."

--With assistance from Bibhudatta Pradhan

To contact the reporters on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net, Iain Marlow in New Delhi at imarlow1@bloomberg.net.

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Unni Krishnan

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