What to Read in The Hindu Editorial( Topic and Syllabus wise)

 

Editorial 1: The looming threat to federalism and democratic tenets

Context

‘One Nation One Election’ should not become a device for the centralisation of powers; issues such as a strengthening of anti-defection laws cannot be glossed over.

 

Introduction

The ruling government, led by the Bharatiya Janata Party/National Democratic Alliance, has been pursuing the One Nation, One Election framework (ONOE) with all seriousness. This proposal seeks to synchronise the Lok Sabha and State Assembly elections under one single electoral cycle. While the advocates of the ONOE have cited several administrative and fiscal efficiencies, its opponents point to the far-reaching consequences of this plan on the democratic and federalist character of India, as laid out in the Constitution of India.

 

The historical context

• Historical context of simultaneous elections: Simultaneous elections are not something very new in India.
  1. During the initial years after Independence, the Election Commission of India (ECI) used to conduct simultaneous elections for both Parliament and State Assemblies.
• Disruption of cooperative federalism: This cycle of cooperative federalism was disrupted at the very outset with the appearance and imposition of Article 356, which is popularly known as President’s Rule.
  1. When this was done for the first time in Kerala in 1959, an element of federal overreach began to take hold of the Union-State relations.
  2. The will of the Union appeared to override State autonomy.
• Purpose of Article 356: The arrangement was essentially meant to be a constitutional mechanism.
  1. It provided for restoring normalcy in States where governance had become well-nigh impossible.

 

Dr. B.R. Ambedkar’s Perspective on Article 356

• Dr. Ambedkar’s view: Article 356 was optimistically termed a “dead letter” by Dr. B.R. Ambedkar.
  1. It was meant to be used sparingly.
• H.V. Kamath’s remark: As H.V. Kamath aptly remarked, “Dr. Ambedkar is dead, and the Articles are very much alive.”
  1. This reflects the misuse that is implicit in this provision as a tool of political expediency.

 

Misuse of Article 356

• Article 356 misused by successive Governments: From 1950 to 1994, successive governments, notwithstanding their political hue, indulged in the misuse of Article 356.
  1. The misuse extended to the dismissal of ‘politically obnoxious’ elected State governments.
• S.R. Bommai Case judgment: Even after the S.R. Bommai case judgment, which aimed to restore the federal government’s rights and limit the arbitrary acts of Governors, incidents continued.
  1. The frequent invocation of Article 356 — over 130 times since Independence — has distorted its original purpose
• Defection: Defection has emerged as a strong threat to the stability of State governments.
• Democratically-elected governments have fallen after legislators changed sides over various enticements.
• Purpose of the Anti-Defection Law:vThe Anti-Defection Law was enacted through the 52nd Amendment Act of 1985.
  1. It was part of the Tenth Schedule of the Constitution, which attracts the disqualification penalty against defectors.
• Loopholes in the Anti-Defection Law: There are still loopholes in the law.
  1. The absence of a time-bound framework for Speakers to decide on disqualification petitions.
  2. Provisions for “group defections” have rendered the law ineffective.
  3. The result is that defections are still commonplace.
  4. These defections lead to unconstitutional changes in regimes.

 

The ONOE Proposal and Its Issues

• Proposal to align State Elections with Lok Sabha: The proposition put forward by the ONOE to align State election cycles with that of the Lok Sabha is deeply problematic.
  1. The proposal involves making amendments in the Constitution, particularly in Articles 83 and 172, which guarantee a five-year term for Parliament and State Assemblies.
• Blatant omissions in the governance Regime:
  1. Some blatant omissions in the governance regime include the misuse of Article 356 and the inadequacy of anti-defection laws.
  2. The State governments would face a much tighter squeeze in the ONOE, as their terms would be curtailed or extended to bring them in line with the national election cycle.
• Reduction in state autonomy: This reduction in State autonomy is more than an administrative nuisance.
  1. It constitutes a deep attack on the federalist structure of the Constitution.

 

Federal structure under siege

• Basic feature of Indian Democracy: The federal system of India, being a basic feature of Indian democracy, enables States to function as relatively independent units in solving problems of a localized nature.
• Impact of synchronizing state and national elections: If State elections are held along with national elections, it would blur and impair the ability of electors to evaluate the performance of the State government.
  1. The electors would be unable to distinctly assess the work done by their State government.

 

Potential Issues with Midterm ONOE

• Midterm ONOE and tenure concerns: If the ONOE is held and if there happens to be a midterm ONOE, State governments elected only for ‘abbreviated’ tenures would breach the democratic principle of “one person, one vote, one value”.
  1. In case a State government falls midterm (e.g., after three years), the ONOE would lead to elections for a new government that would serve only the remaining time in the synchronized electoral cycle, roughly two years.
• Reduced Mandate and Democratic Value: This cuts down the tenure of a government, making the mandate of the voter of little value.
  1. A new government would not complete its full term, reducing the democratic principle of complete representation.

 

Concerns with Truncated Terms

• Issue with State governments: Truncated terms are not only an issue for State governments but also for the Lok Sabha.
  1. For instance, the political turbulence of the mid-1990s led to elections in 1996, 1998, and 1999.
  2. If the ONOE had been in place, there would have been another election in 2001, adding up to four elections in five years.
• Impact of Frequent Elections: The frequency of elections results in increased costs — financial, administrative, and in terms of human capital.
  1. These increased costs are not realized in the efficiency that the ONOE is touted to bring.

 

Time Period for Effective Governance

• Need for realistic time period: On nominal and practical grounds, each government needs a realistic time period to analyze the existing socio-political-economic state of affairs, frame adaptive policies, and make course corrections.
  1. The artificially imposed reduction in the tenure of a government could disrupt governance, resulting in negative consequences that outweigh the usual policy paralysis caused by the enforcement of the Model Code of Conduct during elections.

 

Logistical Challenges in Implementing the ONOE

• Challenges of logistics and resources: The challenges in terms of logistics in implementing the ONOE are monumental.
  1. India’s large electorate base, of over 900 million voters, demands enormous resources to conduct elections.
     If the Lok Sabha, State, and local body elections are aligned, the burden would increase manifold and eventually affect the Election Commission of India (ECI), security forces, and administrative machinery.
• Risk of voter fatigue and confusion: The risk of voter fatigue and confusion cannot be ruled out in such a scenario.

 

Address the issues first

Reflection on the ONOE and Fiscal/Administrative Efficiencies

• There needs to be reflection before the ONOE can be espoused for fiscal and administrative efficiencies.
• There is a need to revisit some of the systemic challenges that plague State governments.
• There needs to be course correction to ensure that the ONOE does not become a device for the centralisation of powers without addressing issues such as the misuse of Article 356, a strengthening of anti-defection laws, and the issue of the stability of State governments.

 

Federal Character of the Constitution

• The federal character of the Constitution is not an arrangement in procedure but a recognition of the diversity and the plurality that constitute the country.
• Forcing States to fall in line with a unified electoral cycle unduly erodes the autonomy of States and dilutes the democratic essence of governance.
• A hurried imposition of the ONOE, without sets of systemic reforms that are necessary to stem the erosion of federalism, would indeed be a frontal attack on the Constitution’s basic structure.
• If this does not happen, then the ONOE can even be a blot instead of being deliverance for Indian democracy.
• The fact that a malfunctioning fax machine sat at the heart of a cynical operation aimed at dispensing with the elected government of Jammu and Kashmir illuminates the frailty as well as opacity regarding certain institutional processes in India, all too sharply.
• A few such instances make it clear that systemic reform is the immediate need so that people become accountable to the principles of the Constitution.

 

Conclusion

As long as these foundational areas remain unsorted, the ONOE, rather than solving those structural vulnerabilities, may end up making them starker. True democratic governance requires much more than a routine exercise of simultaneous elections. It is an imperative commitment to the letter and spirit of federalism and to strengthening State governments as equal partners in the federal polity of India.

 

Editorial 2: India, cross-border insolvency and legal reform

Context

The dismal state of cross-border insolvency law and regulation, with unenforceable governing sections and slow progress on amendments, needs to be reversed.

 

Introduction

The growth in international trade has amplified cross-border insolvency challenges, highlighting the need for effective regulation. A reliable and predictable insolvency framework is essential for economic stability, attracting foreign investments, and facilitating corporate restructuring.

• Under the British Raj, India faced significant challenges in managing financial failures and cross-border commerce.
• To address domestic insolvencies, the Indian Insolvency Act of 1848 was introduced as the first insolvency law.
• This was later replaced by the Presidency-Towns Insolvency Act 1909, which applied to Calcutta, Bombay, and Madras, and the Provincial Insolvency Act, 1920, which governed insolvencies in mofussil regions.
• While these laws provided a framework for handling domestic insolvencies, they failed to address the complexities of cross-border insolvencies, leaving a critical gap in the legal system.

 

An evolution

• Historical Context of Insolvency Laws in India: After Independence, insolvency laws remained unchanged, despite the Third Law Commission’s 26th Report (1964) recommending modernisation.
  1. It was only in the 1990s, driven by economic liberalisation and the pressures of globalisation, that the need for a comprehensive insolvency law, with provisions for cross-border cases, became a focus of national discussions.
• Committees and their recommendations: Several committees were set up to address these issues:
  1. Eradi Committee (2000)
  2. Mitra Committee (2001)
  3. Irani Committee (2005)
• These committees recommended adopting the United Nations Commission On International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, 1997.

 

Drafting of the Insolvency and Bankruptcy Code (IBC)

• In 2015, the Bankruptcy Law Reform Committee drafted the Insolvency and Bankruptcy Code (IBC) Bill, focusing on domestic insolvencies.
• This was a significant step towards reforming the insolvency framework in India.
• Following concerns from the Joint Parliamentary Committee about the absence of cross-border insolvency provisions, the following clauses were added to the IBC:
  1. Clauses 233A and 233B were later codified as Sections 234 and 235 of the IBC.
  2. Section 234: Allows the Indian government to enforce IBC provisions in foreign countries through reciprocal agreements.
  3. Section 235: Outlines the procedure for seeking assistance from foreign courts through a letter of request.

 

Cross-border insolvency challenges in India

State Bank of India vs Jet Airways (India) Limited (2019)

• The case brought Sections 234 and 235 of the IBC under scrutiny.
• The National Company Law Tribunal (NCLT) identified two critical issues:
  1. Absence of a reciprocal arrangement between India and the Netherlands for cross-border insolvency resolution.
  2. Non-notification of these sections by the central government, rendering them legally unenforceable.
• This highlighted the inactive status of these provisions, effectively labelling them as “dead letters”, meaning provisions that exist in theory but cannot be applied in practice.

 

Addressing the Regulatory Gap

• To address the regulatory gap, the Ministry of Corporate Affairs constituted two expert committees:
  1. Insolvency Law Committee (2018)
  2. Cross-Border Insolvency Rules/Regulation Committee (2020)
• Both committees identified shortcomings in the current framework and recommended adopting the UNCITRAL Model Law on Cross-Border Insolvency.
• These recommendations were later endorsed by the Parliamentary Standing Committee on Finance:
  1. Thirty-Second Report: "Implementation of IBC – Pitfalls and Solutions" (2021).
  2. Sixty-Seventh Report (2024).

 

Urgency of a Cross-Border Insolvency Framework

• Both Parliamentary Reports stressed the urgent need for a cross-border insolvency framework to strengthen the IBC, 2016.
• However, the dismal state of cross-border insolvency regulation in India persists, with unenforceable governing sections and extremely slow progress on necessary amendments.

 

Jet Airways vs State Bank of India (2019)

• In this case, the National Company Law Appellate Tribunal (NCLAT) considered a “cross-border insolvency protocol”.
• This protocol is an internationally recognised approach that is now used as an ad hoc solution for regulating cross-border insolvencies.

 

The need for reform

• While protocols have been effective in addressing individual cases, they remain an ad hoc/temporary solution.
• The need for court approvals increases the judicial burden, transaction costs, and causes delays in resolutions, ultimately reducing the debtor’s asset value.
• Experts emphasize the importance of adopting a structured framework for cross-border insolvency.
• Given the limitations of ad hoc protocols, it is recommended that **India adopt the UNCITRAL Model Law on cross-border insolvency to establish a more comprehensive, structured approach.

 

Reforming Communication Methods Between Indian and Foreign Courts

• Reforming the outdated communication methods between Indian and foreign courts is crucial, especially for cross-border insolvency cases.
• The adoption of the Judicial Insolvency Network (JIN) Guidelines (2016) and its Modalities of Court-to-Court Communication (2018) would:
  1. Modernise judicial coordination.
  2. Enhance transparency.
  3. Improve efficiency in handling cross-border insolvency matters.

 

Conclusion

Third, Section 60(5) of the IBC, with its non-obstante clause, restricts civil courts from exercising jurisdiction over insolvency matters, including cross-border cases, leaving the NCLT as the sole adjudicating authority. However, the NCLT lacks the power to recognise or enforce foreign judgments or proceedings, which significantly limits its effectiveness in managing cross-border insolvency matters. This limitation is further exacerbated by the failure to implement Rule 11 of the NCLAT Rules, 2016, for IBC matters, preventing the NCLT from exercising inherent jurisdiction or comity to address cross-border insolvency issues. To resolve these challenges and ensure effective management of cross-border insolvency cases, it is imperative to expand the powers of the NCLT.