Delhi HC Undermines the Parliament

 The Delhi High Court judges Hon Justice Vipin Sanghi and Jasmeet Singh have taken upon themselves to clean up the city. It's not that they are worried about the huge filth that lies around or the unprecedented levels of air and water pollution, but want to get rid of all street vendors. Perhaps they have had some personal issues with vendors and are using their position to take on an entire community who provide affordable goods to the poor.

Their observations seem to assume powers beyond the parliament. 

"6.In our prima facie view, it appears to us that the scheme of the Street Vendors Act and the Rules framed thereunder greatly tilts the balance to encourage street vending. Pertinently, the plan for street vending, under Section 21, itself is required to be prepared “to promote the vocation of street vendors”. 

7.Clause 1(a) of the First Schedule provides that the plan for street vending shall ensure that all existing street vendors identified in the survey, subject to a norm confirming to, two and half per cent of the population of the ward, zone, town or city, as the case may be, are accommodated in the plan for street vending. For a Mega City like Delhi – with a population of about 2 Crores, the number of street vendors, according to the plan, would be about 5 Lakhs. 

8.It needs serious consideration whether, while protecting and promoting street vending – by enacting the Street Vendors Act, aspects regarding planned development of cities and towns has been compromised.Even more important, in our view, is the possible infringement of Fundamental Rights of the Citizens who live in any city, or town, particularly, under Article 21 of the Constitution of India, as the Right to Life guaranteed by the said Article is not a right of mere animal existence, but a right to enjoy security, safety and a life in a healthy environment."

So their observations have nullified the Street Vendors Act, 2014 which is an Act of the Parliament of India enacted to regulate street vendors in public areas and protect their rights. Having observed so, the next logical step in judicial "terrorism" is to threaten officers, including the police to evict the Hawkers at almost all the key locations in the city.

Today, the police brutally removed vendors from Cannaught Place, got the Kalkaji Temple closed and is forcing stoppage of vending in Sarojini Nagar. 

"14.We, therefore, issue a stern warning to both – the officers of the NDMC as well as to the Delhi Police who have jurisdiction over the Connaught Place area, i.e. Rajiv Chowk and Indira Chowk, to ensure strict compliance of not only their scheme approved by the Supreme Court, but also the orders passed by the Supreme Court and by this Court. There should be zero tolerance shown by them, and all hawkers, vendors – except the original 80 odd vendors – as stated by Mr. Peechara, should be removed bag and baggage. The rule of law has to prevail, and we cannot allow the city to be taken over by illegal encroachers/ vendors. Such failure on the part of the respondent authorities in discharging their duties very severely and adversely impacts the rights of the citizens of the city, including their right to life, which includes the right to a healthy and clean environment.

15.We direct the Chairman, NDMC as well as the Executive Engineers of the NDMC having jurisdiction over the Connaught Place area, as well as the DCP of the area concerned and the SHO of the local police station to remain present before us on the next date. Status reports should be filed by the NDMC and the Delhi Police about the steps taken by them-not only to remove the encroachments, but also to ensure that the illegal encroachers and vendors do not return and the area is kept clean on a continuous basis. 

16.The respondent/ NDMC should display permanent boards in the entire Rajiv Chowk and the Indira Chowk areas displaying the fact that the area is a no hawking and no vending zone."

Needless to say none of the provisions of the Act, which was formulated after lot of debates and discussions and going through the parliamentary process has been implemented in the seven years of its existence. Therefore the moot question is whether the judges have the right to provide verdicts which satisfy their orientations and ego or to strictly follow the "rule-of-law" that they themselves allude to in their order.

What a travesty of justice, that the observations of two judges completely undermines the Parliament and the wisdom of eight hundred parliamentarians and places atleast two million peoples lives in quandary. And that too, of those who are trying to atleast make a living post the lockdown. If this festival season is lost in their running around to save themselves, their situation is likely to be as bad as it was during the lockdown.

The order makes a mockery of the Union Government, which has been trying to address the problems of the vendors by instituting programmes like the  PM Svanidhi and other schemes. 

As some vendors fear, if the judges have been swayed by the online e-commerce giants to defy the constitution and act as the legislature, judiciary and executive rolled into one. 

To my mind this is regressive and tantamount to judicial "terrorism".

EXCERPTS AND REFLECTIONS ON THE PARLIAMENTARY COMMITTEE ON SOCIAL SECURITY AND WELFARE MEASURES FOR INTER-STATE MIGRANT WORKERS’ RELATING TO THE MINISTRY OF LABOUR AND EMPLOYMENT.

Standing Committee on Labour (2020-21) was authorised to take up the issue and Shri Bhartruhari Mahtab - Chairperson presented on their behalf this Sixteenth Report on ‘Social Security and Welfare Measures for Inter-State Migrant Workers’ relating to the Ministry of Labour and Employment” in the Parliament on the 10^th of February.

Sorry State of Migrant Workers – Indispensable for the all-round economic growth of the Country!

It is indeed shameful for a nation of over 1.3 Billion Population and over 70 years of sovereignty that the Parliamentary Standing Committee has to begin its report on the above subject with the following two paragraphs:

“1.1 In India migrant labours are predominantly employed in the informal segment and engaged in manual unskilled/semi-skilled jobs, which are typically high-risk and low paying. The perennial problems of the migrant labours entail lack of social security, access to welfare entitlements, proper accommodation, standard of living, identity proof and other documents for availing State given facilities, etc.

1.2 The Covid-19 crisis has exposed, in a tragic and graphic manner, the hard truth that millions of people in India have no recourse to a range of rights and basic amenities. While the pandemic has demonstrated the enormous value of health workers, it has also created and enhanced public awareness of the pivotal role played by the migrant workers in the development of India's economy. Around 100 million to 125 million such workers leave their villages, families and homes to get work wherever they can find it and toil hard to harvest crops, clean streets, run factories, build roads, construct houses etc. In a stark manner, the pandemic has revealed that millions of migrant workers have been left with little or no food security, livelihood options and a secure home despite they being indispensable for the all-round economic growth of the Country. The need for greater self-reliance for migrant workers and their families has never been more urgent as such workers look for the security of home, food and livelihood.”

How many Migrant workers are there?

The basic task of ensuring a database of workers has not been achieved in the country. The Ministry in its presentation to the committee states that (a) Migrant workers returned home (8,614,785) (b) Migrant workers stayed back (190,054) (c) Total migrant workers in various States (8,804,839) during the pandemic. At the same time, the Ministry also submitted that there were 25.8 million workers were registered as Building & Other Construction Workers with various State Governments and majority of them were migrant workers thus reflecting that it is not aware of the total number of migrant workers.

“2.10. As regards measures taken for identification of Migrant labours especially in the face of reports of many States failing to provide relief to stranded Migrant labourers despite their best efforts, due to shortcomings in the identification process; the Ministry responded as under:- "Several letters/advisory have been sent to the States/UTs to identify the Migrant Labourers and maintain their complete details like bank account details, Mobile Number, Aadhaar Number etc. to provide them immediate financial relief as well as food packages. Chief Labour Commissioner and Welfare Commissioners have also been actively involved in this work."

2.11. In response to a specific query as to whether local Governments or other Stakeholders have been involved in the efforts of identification of stranded Migrant Labourers; the Ministry replied in the affirmative and stated as under:-

 "Yes. States/UTs have been requested to maintain the database with all the details of the migrant workers."

2.12. The Ministry also furnished State-wise data to the extent available on the total number of migrant workers displaced as per Government estimate which is reproduced as under:-

SL No	Name of the State	No. of Migrant workers belonging to State who have returned to their home State*
1	Andhra Pradesh	32,571
2	Andaman and Nicobar Islands	4,960
3	Arunachal Pradesh	2,871
4	Assam	426,441
5	Bihar	1,500,612
6	Dadra & Nagar Haveli and Daman and DIu	43,747
7	Delhi	2,047
8	Haryana	1,289
9	Jammu & Kashmir	48,780
10	Jharkhand	530,047
11	Karnataka	134,438
12	Kerala	311,124
13	Ladakh	50
14	Lakshadweep	456
15	Madhya Pradesh	753,581
16	Maharashtra	182,990
17	Manipur	12,338
18	Meghalaya	4,266
19	Nagaland	11,750
20	Puducherry	1,694
21	Punjab	515,642
22	Rajasthan	1,308,130
23	Sikkim	33,015
24	Tamil Nadu	72,145
25	Telangana	37,050
26	Tripura	34,247
27	Uttar Pradesh	3,249,638
28	Uttarakhand	197,128
29	West Bengal	1,384,693
	Total	10,837,740
* As per the data received from the State/UTs

These datasets indicate that the Ministry is groping in the dark and does not even have a mechanism, except that it has been giving advisories.

However, the Ministry is very clever. Without restricting itself as the nodal Ministry and responsible for the issues concerning the Migrant Labours it expanded the scope and made a presentation before the Committee on “Labour Reforms and Inter-State Migrant Workers highlighting inter-alia the background of State Reforms; Impact of the Reforms; Role of State Governments under the Industrial Disputes Act, Factories Act and the Contract Labour Act; Governance Reforms initiated by States; Fixed Term Employment; Inter-State Migrant Workers and available data on them; Building and other Construction Workers; and implementation of the Pradhan Mantri Garib Kalyan Yojana (PMGKY) during the Covid Pandemic. It was thus able to cover up its abject helplessness and impotence in the context of the forced migration during the lockdown.

2.32. The Committee have, time and again reiterated the need for a credible real time database of all workers including unorganised workers as well as Inter-State Migrant Workers. While the initiative taken for creating an online Portal on Interstate Migrant Workers with real time data updates is laudable, the Committee nevertheless, wish to point out that without a credible database, efforts to give relief in such unprecedented times of a Global Pandemic like the current one, may not be completely successful. The Committee also note that the information on the online portal on Migrant Workers also proposes to include aspects relating to trends of migration of workers and the Labour Bureau and NITI Aayog are involved in studying the issues. The Committee desire that the initiative be given the needed impetus, thrust and support so that the Nation can have a credible real time database of Inter-State Migrant Worker.

The definition of ‘Inter-State Migrant Worker’ has since been modified to include migrant workers moving to a Destination State for employment on their own volition, besides Migrant Workers employed through contractors.

The Committee have been apprised that, in line with the recommendations made by the Labour Committee, steps taken to alleviate the hardship faced by Migrant Labourers include, inter-alia,

1.                   Setting up a portal to create a database for Migrant Workers with the facility of voluntary submission of data by self-employed persons moving to a ‘Destination State’, for which Aadhar would be a basic requirement;

2.                   Incorporation of a separate Chapter on Inter-State Migrant Workers in the Social Security Code; addition of an enabling provision in the laws for making rules for setting up toll free helpline numbers;

3.                   Carrying out a study on ‘Safety and Health of Migrant Workers’;

4.                   Providing for the Central Government to specify the wages applicable to Inter-State Migrant Workers;

5.                   Providing for payment of a lumpsum allowance for to and fro journey to the native place of Migrant Workers;

6.                   Formulation of Schemes by the appropriate Government for portability of benefits of Public Distribution Scheme (PDS) and other benefits as are available to BOC Workers in their native States; extension of benefits to migrant workers as are available to Workers in establishments covered under ESIC, EPFO, etc.

7.                   Further, portability of benefits of PDS for Inter- State Migrant Workers either in his native State or the destination State where he is employed has been enabled for in terms of Section 62 of the Occupational Safety, Health and Working Conditions, Code, 2020.

The Committee noted that there are no reliable or authentic figures on the total number of Inter-State Migrant Workers.

One wonders to whom these reached

In addition to providing food relief packages to around 30 lakh workers, the Committee have been apprised that an amount of Rs.5,000/- crore has been transferred to aid 1.83 crore Building and Other Construction Workers. Also, under the Pradhan Mantri Garib Kalyan Yojana, the relief provided following the outbreak of the Covid Pandemic included, remitting 24% of wages directly to the EPF Accounts of low wage earning members drawing less than Rs.15,000 in the beneficiary establishments; providing for extending a special Covid- Advance from the EPF accounts whereby an amount equivalent to 75% of EPF balance or three months wages, whichever is lower could be drawn - on this count, as on 10.07.2020, an amount of Rs.6,987 crore was reportedly disbursed to 25.40 lakh members; reducing the statutory contribution from 12% to 10% of wages and Dearness Allowance under Atma Nirbhar Bharat Scheme thereby benefitting 4.3 crore employers across 6.5 lakhs establishments etc. Also, the Ministry of Housing and Urban Affairs launched the SVA Nidhi Scheme for the benefit of 50 lakh street vendors by way of providing collateral free working capital loan upto Rs.10,000/- for compensating lost livelihood due to the Pandemic and the lockdown. The Committee have also been apprised that in order to boost employment and livelihood opportunities for migrant workers returning to the villages in the wake of Covid outbreak, the Government launched the Garib Kalyan Rojgar Abhiyaan on 20.06.2020 focussing on durable rural infrastructure and providing modern facilities like internet; skill mapping of rural migrant 14 labour; extended Anganwadi Services to Children of Migrant labours; sanctioned 700 Food Processing/Presentation and infrastructure projects for employment generation for Migrant Labourers; identified ongoing / new works of road construction for Migrant Labours; and Set up of 30 Biotech-Kisan hubs in the Country to help Migrant Workers to earn livelihood through farming. The Committee note that a number of appreciable initiatives have been launched by the Government, which are aimed at benefitting the Migrant Labour.

The Committee, however, note in this regard that neither any guidelines were issued nor enforced for distribution of relief material to stranded Migrant Labourers. Also, there has been no element of Social Audit prescribed. The absence of reliable and authentic data/information on the numbers of migrant workforce and their movement back to their home States following the outbreak of the Pandemic has apparently impacted the relief and rehabilitation measures.

Absolute Need

There has also been a need for enhanced transparency in the modalities and procedures involved in the distribution of Relief material to Migrant Labour and prescription of an element of audit both at the Department level and Social Audit by the Stakeholders. In short, since without identification and collation of data of the inter-State migrant workers no social security Scheme can be effectively extended to them, the Committee exhort the Ministry to persuade the native as well as the destination States to identify, collect and periodically update the record of such workers.

Role of Civil Society

The need for data is primary and the duality of the Central and State Governments and camouflaging the incompetence of the Ministry with range of other Ministry’s activities needs to be exposed. Social audit protocols have to established and agencies involved engaged to submit to a due process owned and managed by the migrant workers.

Round-tripping – Its time to stop illicit financial flows

Mauritius - Biggest Source of FDI in the past

In a 15-year period from 2000-2015, the highest amount (34%) of total Foreign Direct Investment into India was from Mauritius, valued at US$ 93.6 billion. In Reality, this cannot be true as one can understand by the scale and size of Mauritius Economy. In India there is a common saying that Western and Northern Indian Traders and Politicians use Mauritius, BVI, Cayman whereas the in the South its often Singapore, Hongkong and UAE!

Some Examples of Round Tripping

Sterlite-Twinstar-Volcan

According to the show cause notices issued to Sterlite, investigations by the income tax department revealed that the company was engaged in business of copper, telephone cables, aluminium and nonferrous items. It was alleged that out of the total equity of 4.25 crores, shares of face value of Rs. 10/- each, worth Rs. 12.5 crores were held by promoter directors and that one Twinstar Holding Ltd, an offshore company registered in Mauritius, held about 30 lakh shares. It was alleged that the three promoter directors were engaged in the business of investments and Twinstar Holding held hundred percent capital investment in three other companies to the extent of Rs 73 crores; Twinstar Holding was incorporated in Mauritius, on 12-01-1993, with issued capital and paid up capital of US $ 100, as a subsidiary of M/s Volcan Investments Ltd; the latter was incorporated in Bahamas on 25-11-1992. M/s Volcan Investments had a share capital of US$ 2. It was alleged that Shri D.P. Agarwal, the respondent in WP 17483/2006, was a director of Twinstar Holding Ltd. During the search and seizure operations, it was discovered that Twinstar Holdings was actually operating from Middlesex, UK; the documents indicated remittance of Rs.34,50,25,280/- to the company, M/s Sterlite for subscribing to certain debentures, immediately after incorporation of the company on 12-01-1993.

The Enforcement Directorate alleged that the total investments of the DP Agarwal group, who are individual respondents, apart from the company, much exceeded the funds invested by the Mauritian company, Twinstar; a large proportion of shares were partly paid-up {WP(C) No.17467/2006 and connected matters} so that a large number of shares could be acquired with lesser funds.

In the process of voluntary liquidation of the investment companies of Sterlite, alleged the petitioners, the overseas corporate body i.e. Twinstar became the holding company with controlling interest in Indian companies. In this process the promoters of Sterlite effected book adjustments which amounted to write off of Rs. 23 crores. The book adjustments by Sterlite and its group companies effectuate it a gift of Rs.33.82 crores to Twinstar this was besides family members of the promoters of Sterlite gifting shares worth Rs. 7.22 crores to the Mauritius company.

Chartered Accountants: Owners or Fronting the Investors

KSK Energy, is incorporated and registered in Mauritius, and is a wholly-owned subsidiary of KSK Power Ventur plc, an Isle of Man incorporated entity that is currently listed on the London Stock Exchange. We are a listed subsidiary of KSK Power Ventur plc. Our individual Promoters, Mr. S.Kishore and Mr. K.A. Sastry, prior to setting up the Company, have been involved in the development of power projects in various advisory and consultant roles. The company is on trial at the National Company Law Tribunal as a non-performing asset. It is very difficult to trace the actual beneficial owners.

Case of a Current State Chief Minister

The investigation relating to M/s Sandur Power Company Ltd., it is stated by the CBI that Y.S. Jagan Mohan Reddy was the Director of this Company from 16.06.2001 to 11.01.2010 and the prime accused. M/s Sandur Power Company Ltd. was incorporated on 23.10.1998 by M.B. Ghorpade and subsequently, Y.S. Jagan Mohan Reddy joined the company during June 2001 along with the Board of Directors, viz., Harish C. Kamarthy and JJ. Reddy. It is alleged by the CBI that the Company is closely held by Y.S. Jagan Mohan Reddy. The CBI also highlighted various share transactions amounting to Rs. 124.60 crores with two Mauritius based companies, viz., M/s 2i Capital and M/s Pluri Emerging Company by M/s Sandur Power Company Ltd. It is projected by the CBI that the above said amount is of Y.S.Jagan Mohan Reddy, which was routed through the Mauritius based companies. It is also highlighted that the role of Nimmagadda Prasad who is currently under judicial custody is also being investigated for the same. Vijay Sai Reddy, along with Y.S. Jagan Mohan Reddy, was the brain behind this conspiracy inasmuch as Vijay Sai Reddy had floated fictitious companies in Chennai so as to enable round tripping or routing monies into M/s Sandur Power Company Ltd. from India and foreign countries through companies falsely created in Chennai as well as in certain foreign countries.

Key Observations in the Case by the Supreme Court

The Supreme Court observed, “Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.” The court went on to state “While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.”

What is POEM?

POEM is the place where the ‘key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made. The Finance Bill, 2015 introduced the concept of POEM for determination of residence of companies by way of amending Section 6 of the Act replacing the words ‘control and management’ by “place of effective management, at any time” 

Using POEM rules, the government amended the tax treaty with Mauritius in 2016, removing the tax arbitrage on capital gains. Under POEM rules, overseas subsidiaries are treated as domestic entities for tax purposes if they are controlled and managed from India.

The key principle is that while determining the POEM, the concept of substance over form should be used. Further. even though an entity has more than one place of management, it can have only one place of effective management at a given point of time and should be determined in light of the guidelines as prescribed by CBDT.

Using FAQ as a means to Fix

The Government also surreptitiously used the FAQs of its website to monitor round-tripping practices by such Indian Parties. The FAQ (Q64) contemplates a twofold ban on Indian Party seeking to use automatic route for investments under the ODI Regulations viz., (i) Indian Party is not permitted to set up a subsidiary in India through its overseas JV and/or WOS, and (ii) Indian Party is barred from acquiring a WOS or invest in a JV that already has investment in India (“Restricted Activities”).

Shifting from Mauritius? The recent case of Nirav Modi

It is alleged that Nirav Modi used 13 companies in UAE to round trip millions according to the ongoing prosecution in United Kingdom. The diamantaire with a surname of the Prime Minister, who fled from the country to escape legal action and potential imprisonment is said to have used 13 companies in UAE, 6 in Hong Kong for purpose of round tripping money. He was arrested by Scotland Yard in March 2019 on an extradition warrant by India over charges of fraud and money laundering. Though lodged at the Wandsworth Prison in London and denied bail five times, he has been valiantly trying for asylum in Britain, while the Indian Agencies have been seeking extradition. The lawyer representing the Crown Prosecution Service recently made a statement in the court that he had in connivance with some of the PNB officials, embezzled around $2 billion and bribed a Punjab National Bank official that Nirav had also threatened to kill a witness if he gave any statements against him.

Ultimately People Pay Out

Such instances of fiscal frauds lead to siphoning off funds from the projects, despite many of them inflating their capital costs and fleecing the banks. Some years ago, the RBI governor remarked that the in India the projects or companies become “sick” but not the promoters. Thirty four power projects with were identified as stressed by the finance ministry and it has now become a state and public burden and various schemes Pariwartan or Samadhan have been evolved by the Government to save them using public money or the bankruptcy code. The same is the case with the losses of banks like the Punjab National Bank, for which the ordinary citizen ends up paying in the form of bank charges.

Need Complete Rethinking

 

There are atleast three aspects we need to seriously rethink domestically

·         Do we need FDI? Covid-19 has made it clear, that this kind of FDI based large capital, large infrastructure and distant supply chains are vulnerable and small farming communities with biodiversity and indigenous communities have sustained better. While this is what Gandhiji broadly advocated even before independence are we even ready?

·         How do we reform our Political Systems and Elections as they have become extremely Capital Intensive and significant corruption and convoluted systems are necessary for political funding? We have been witnessing to the bonds and other devious ways in recent times.

·         Most Products produced by MNCs have local, small scale or state sector alternatives with better use of domestic resources which require faith in our own abilities and fiscal responsibility. How can we move the communities to this direction?

And further unless strong collaboration between countries, civil societies, journalists, and legal experts across the globe to push for punishing and penalising the perpetrators, the illicit money will find many ways!