Parties, serious crimes and the need for judicial clarity

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Two recent observations from two different Benches of the Supreme Court of India in the bail petitions of Delhi Chief Minister Arvind Kejriwal and former Delhi Deputy Chief Minister Manish Sisodia deserve in-depth analysis. The first was the observation from the Bench headed by Justice Sanjiv Khanna. The judge asked the government lawyer whether in a case under the Prevention of Money Laundering Act (PMLA) involving leaders of the Aam Aadmi Party (AAP), the party too is not involved. What is the role of the political party? Can it be made an accused party? These questions from the Bench prompted the Enforcement Directorate to make AAP too an accused party in Mr. Kejriwal’s case. It is perhaps for the first time that a political party is being made as an accused under the PMLA. In a parliamentary democratic system, where political parties play a pivotal role in mobilising people on the basis of ideologies and political programmes and run a government, making them the accused in serious criminal cases is fraught with grave problems.

An analysis, in legal terms

Let us look at this issue academically and not present any argument in favour of or against a particular case. So, let us analyse it in terms of the relevant legal provisions. Newspaper reports show that the investigative agency invoked Section 70 of the PMLA to rope in the AAP. This section deals with offences by companies. The gist of this provision is that if the person committing a contravention of any of the provisions of the Act is a company, then every person who was in charge of the company shall be deemed to be guilty under the Act and shall be proceeded against and punished accordingly. In this section, there is an explanation which says that ‘company means any body corporate and includes a firm or other association of individuals’. Where does a political party come in under this definition?

The investigative agency reportedly picked up the definition of political parties from The Representation of The People Act (RPA), 1951 and brought it under Section 70 of the PMLA. Section 29A of the RPA 1951 defines a political party as “any association or body of individual citizen of India calling itself a political party....” Under this definition, an association or individual citizen of India becomes a political party only when it calls itself a political party. So, all associations of individuals cannot be treated as political parties unless they call themselves a political party. But the explanation to Section 70 of the PMLA covers only associations of individuals and not associations which call themselves a political party. Thus, there is an obvious distinction between these two definitions. The conclusion, therefore, is that Section 70 of the PMLA does not cover political parties. Thus, it is not legally permissible to bring a political party within the definition in this clause.

Further, under the above explanation, “other association of individuals” are preceded by the words “any body corporate and includes a firm”; applying the rule of interpretation of statutes, ejusdem generis (of the same kind), association of individuals can only mean a body in the nature of a body corporate or a firm. A political party is not in the nature of a body corporate or a firm. We may try to understand the context of this definition. The context is the generation of black money through certain illegal transactions and the laundering of it.

Political parties are not basically transactional bodies. Their job is to mobilise people, fight elections and run a government. Running a business, legal or otherwise, is not the domain of a political party. It is a matter of common knowledge that most political parties run their affairs with money donated by individuals or corporates. The law permits this but it does not concern itself with why such donations are made. Of course the law requires political parties to make a declaration to the Election Commission of India of all contributions received from individuals or companies other than government companies under Section 29C of the RP Act 1951. If a political party does not comply with this provision, it will not get any income-tax relief. It may be noted here that the entire donation received by a political party is exempted from income-tax. We can very well see that the law is mindful of the role played by the political parties in our democratic system, and is, therefore, considerate to them. So, it is a little difficult to understand the observation of the learned Bench about bringing political parties within the purview of the PMLA.

Policy and criminality

The second observation is from a Bench of Justice B.R. Gavai and Justice K.V. Viswanathan in a bail petition of Mr. Sisodia. The Bench, with its characteristic incisiveness, asked the lawyer of the Enforcement Directorate: Where do you draw the line between policy and criminality?” This is the most relevant question that comes up in a case arising out of a policy framed by a cabinet. The Constitution has adopted the British system of parliamentary democracy, with the cabinet form of government for the Union and the States. Under this system, the highest decision-making body is the cabinet headed by the Prime Minister at the Centre and Chief Ministers in the State. The cabinet of the Union or of a State has exclusive and final authority to frame a policy on any matter.

Ivor Jennings, the renowned authority on constitutional law, says, “in substance the cabinet is the directing body of the national policy”, it may be a good policy or a bad one. In case a bad policy is made, it may be disapproved by Parliament or the Assembly, as the case may be. And, ultimately, the cabinet is accountable to the people. They can punish the government and the party which runs it if the policy is harmful to them. But under no circumstances does the judiciary examine the correctness or otherwise or the motive of a policy made by a cabinet. The Supreme Court has consistently taken this view. So, no criminality can be attributed to the cabinet for a policy made by it. Therefore, a criminal charge against an individual Minister for a decision taken by the cabinet is legally unsustainable and is unheard of in the history of the cabinet form of governments. Of course, a Minister as a public servant becomes culpable for an individual action which is in violation of law, but not as a part of the constitutional entity like the cabinet which has framed a policy. In the case above, the Bench is reported to have further observed that no cabinet can function if the Ministers are charged individually with criminality for a collective decision of the cabinet.

The judiciary must clarify

Bringing political parties within the purview of Prevention of Corruption Act and the Prevention of Money Laundering Act will have far-reaching consequences. In a country where political vendetta is almost an accepted method of dealing with political adversaries, such an action would make all political parties vulnerable. There is, therefore, an urgent need for the Supreme Court to clarify the law in this regard, and also about the culpability of individual Ministers for a cabinet decision.

P.D.T. Achary is former Secretary General, Lok Sabha