Editorial 1: Making sense of the disqualification of a Lok Sabha MP
Context:
- The conviction in a defamation case of Congress leader and now former Member of Parliament (MP) from Wayanad by CJM court in Surat, Gujarat, and the issuance of a notification the next day by the Lok Sabha Secretariat of Mr. Gandhi’s disqualification raise some important constitutional and legal issues. The issue will anyway be dealt with by the appellate courts. But the issues relating to the disqualification need to be examined carefully.
Legal provisions: RPA 1951 and Lily Thomas case verdict
- Section 8 of the Representation of the People Act, 1951 (RP Act) specifies the various offences, conviction for which entail the disqualification of a member of the legislature.
- Clause (3) of this section says that a person convicted of any offence other than those mentioned in the other two clauses, and sentenced to not less than two years shall be disqualified from the date of conviction.
- However, clause (4) has exempted sitting members from instant disqualification for 3 months to enable them to appeal against the conviction.
- This clause was struck down as ultra vires the Constitution by a two judge Bench of the Supreme Court on the ground that Parliament has no power to enact such an exemption for sitting members of the legislature (Lily Thomas vs Union of India, 2013). The effect of this judgment is that there is an instant disqualification of a sitting legislator as soon as he is convicted.
- However, the Court made it clear that in the event of the appellate Court staying the conviction and sentence, the disqualification will be lifted and the Parliamentary membership will be restored.
The role of the President
- Section 8(3) of the RP Act which provides for disqualification on conviction has been subjected to judicial interpretation in a number of cases. The words “shall be disqualified” used therein cannot mean instant disqualification. If words like “shall stand disqualified” were used in this clause, they would have certainly meant instant disqualification without the intervention of any other authority. Article 103 shows that the President of India is that authority who decides that a sitting member has become subject to disqualification in all cases which come under Article 102(1).
- There are differences of opinion on the scope of Article 103, which says that if any question arises as to whether any sitting Member has become subject to any of the disqualifications mentioned under Article 102(1), the question shall be referred to the President whose decision shall be final.
- There is a view that this Article can be invoked only when a dispute arises on the fact of disqualification and not otherwise. But this Article covers disqualification arising on conviction for different offences under Section 8 of the RP Act 1951.
- In a case of conviction under this section, where is the question of disputes? This would mean that reference to the President of the question of disqualification of a sitting Member who has been convicted for an offence covered by Section 8 is a constitutional requirement. The Supreme Court, in Consumer Education and Research Society vs Union of India (2009), upholds this position. This judgement says that the President performs adjudicatory and declaratory functions here.
- In cases where adjudication is not required, the President can simply declare that the sitting Member has become subject to disqualification. But the intervention of the President is essential under Article 103 even in cases where a sitting member has been convicted and the disqualification is supposed to take effect from the date of conviction.
- Section 8(3) of the RP Act does not say that in the case of a sitting Member, disqualification takes effect the moment the conviction is announced. The words “shall be disqualified” convey this sense.
Flaws in the Lily Thomas verdict:
- The judgement in Lily Thomas has certain flaws. It says that Parliament cannot enact a temporary exemption in favour of sitting members of the Legislature. But Article 103 itself provides an exception in the case of sitting Members by stating that the disqualification of sitting Members shall be decided by the President.
- Thus, the Constitution itself makes a distinction between the candidates and sitting Members. This was ignored by the judgement and the Court struck down the three months window given to the sitting members to enable them to appeal against their conviction.
- Further, such a temporary exemption in favour of sitting members of the legislature is a reasonable requirement. They are not placed in the same situation as a candidate. A sudden disqualification will cause a lot of dislocation apart from the fact that the constituency will lose its representative.
An issue to reflect on
- The Lok Sabha Secretariat issued a notification on March 24, 2023 declaring that Mr. Gandhi stands disqualified. This notification has presumably been issued on the basis of the judgement in the Lily Thomas case. But Section 8 (3) uses the words “shall be disqualified” and does not specify which authority shall disqualify Mr. Gandhi. Therefore, the Lok Sabha Secretariat cannot perhaps declare him disqualified without referring the case to the President under Article 103 for a declaration, which is the normal procedure followed there.
Conclusion:
- In our multi-party democracy, every political party is a potential ruling party. So, every political leader is exposed to the danger of being hauled up for defamation and put out of the electoral process for long years. People of mature democracies must be able to enjoy humour without any fear. People must learn to laugh at themselves. Otherwise, we will always be busy sending people to jail.
Editorial 2: Understanding IMF bailouts
Context:
- International Monetary Fund (IMF) recently confirmed a $3 billion bailout plan for Sri Lanka’s struggling economy. IMF officials are also in negotiations with Pakistan for a $1.1 billion bailout plan as the country faces a severe economic crisis marked by a falling currency and price rise.
About IMF
- International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C. IMF was set up in 1945 out of the Bretton Woods conference.
- The primary goal of the IMF back then was to bring about international economic coordination to prevent competing currency devaluation by countries trying to promote their own exports. Eventually, the IMF evolved to be a lender of last resort to governments of countries that had to deal with severe currency crises.
Why do nations seek an IMF bailout?
- Countries seek help from the IMF usually when their economies face a major macroeconomic risk, mostly in the form of a currency crisis. For instance in the case of Sri Lanka and Pakistan, both countries have witnessed domestic prices rise rapidly and the exchange value of their currencies drop steeply against the U.S. dollar.
- Such currency crises are generally the result of gross mismanagement of the nation’s currency by its central bank, often under the covert influence of the ruling government. Central banks may be forced by governments to create fresh money out of thin air to fund populist spending. Such spending eventually results in a rapid rise of the overall money supply, which in turn causes prices to rise across the economy and the exchange value of the currency to drop.
- A rapid, unpredictable fall in the value of a currency can destroy confidence in said currency and affect economic activity as people may turn hesitant to accept the currency in exchange for goods and services. Foreigners may also be unwilling to invest in an economy where the value of its currency moves in an unpredictable manner.
- In such a scenario, many countries are forced to seek help from the IMF to meet their external debt and other obligations, to purchase essential imports, and also to prop up the exchange value of their currencies.
- Meanwhile, a country’s domestic economic policies can also have an adverse impact on its currency’s exchange rate and foreign exchange reserves. For example, economic policy that imperils productivity can affect a country’s ability to attract the necessary foreign exchange for its survival.
- Bad luck can also contribute to a crisis. In the case of Sri Lanka, a decrease in foreign tourists visiting the country led to a steep fall in the flow of U.S. dollars into the nation.
How does the IMF help countries?
- The IMF basically lends money, often in the form of special drawing rights (SDRs), to troubled economies that seek the lender’s assistance. SDRs simply represent a basket of five currencies, namely the U.S. dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound.
- The IMF carries out its lending to troubled economies through a number of lending programs such as the extended credit facility, the flexible credit line, the stand-by agreement, etc. Countries receiving the bailout can use the SDRs for various purposes depending on their individual circumstances.
- Currently, both Sri Lanka and Pakistan are in urgent need for U.S. dollars to import essential items and also to pay their foreign debt. So any money that they receive from the IMF is likely to go towards addressing these urgent issues.
Are there any strings attached to an IMF bailout?
- The IMF usually imposes conditions on countries before it lends any money to them. For example, a country may have to agree to implement certain structural reforms as a condition to receive IMF loans.
- The IMF’s conditional lending has been controversial as many believe that these reforms are too tough on the public. Some have also accused the IMF’s lending decisions, which are taken by officials appointed by the governments of various countries, to be influenced by international politics.
- Supporters of the IMF’s lending policies, however, have argued that conditions are essential for the success of IMF lending. For one, countries that seek an IMF bailout are usually in a crisis due to certain policies adopted by their governments that turned out to be inimical to economic growth and stability. It may thus not make sense for the IMF to throw money at a country when the policies that caused its crisis remain untouched. So, for instance, the IMF may demand a country affected by high price inflation to ensure the independence of its central bank.
- Corruption is another issue. The IMF lending to troubled economies, may turn out to be a wasted effort because these economies have poor institutions and suffer from high corruption. In other words, these countries are most likely to squander the bailout money.
Conclusion:
- IMF’s stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world." The (un/stated) mission of governments and central banks should be to ensure macroeconomic stability of their country so that IMF bailout is not required in the first place.