Leadership

De-clogging Economic Development

When I look back at my MBA lessons, one of the most important one, which stood by me for long was a classic human dilemma situation discussed. The situation was, a train with hundreds of people on it is coming towards you and the brakes fail. If you do not intervene and it goes on its designated path, it would crash and everyone would die. You hold a changeover lever, whereby you can put it on a track which is uphill and would ultimately cause the train to stop. However, there are four workers on the track and if you do so, the train would kill them. You must make a choice quick. The choice for most of us was obvious i.e., to save a few hundred lives, one should sacrifice a few. The philosophy being the smaller good must make way for a larger good.

Here, the issue that we are to address is not to choose one side over the other but to put them both on an equal pedestal. So as, that life of these hundreds also matter equally to the four workers on the track. Imbibing this principle and keeping it in mind for the rest of the article.  Now hypothetically, you are a judge in the higher judiciary and due to paucity of time and the backlog of cases, you can only take up one of the two matters for hearing. The first relates to a case involving personal liberty of an individual. The second case involves restart of a closed factory employing a few hundred people. Given the constraints you can take up only one, which one would you take up?

Leaving this question unanswered for the moment, we, in the legal fraternity, know that if the Indian higher judiciary is to be reckoned, they have historically shown preference for the former over the latter. And the principle of larger good is put secondary to an individual’s rights.

There are certain questions that seemingly have not been asked or at the barest minimum not been answered, one of them is what I would like to address today:

Why does the question of de-clogging economic development which is locked up in disputes not assume priority with the judiciary?

In our country, there are lakhs of crore rupees locked up in various disputes which are before one or the other judicial forum but undecided in terms of its final fate for years if not decades.  Many of the cases would involve half executed projects being stopped by a regulatory act (I am not dwelling on the issue of who is right or wrong, even for a minute). What bothers my mind is the ease with which the regulators as well as the judiciary allows the same to linger on for years and years together to a point, where the project becomes dead, the entire money is lost (in most of the cases at the ultimate cost of public sector banks and hence, We the People), the parties lose interest and ultimately one of them academically wins. However, in reality the delay kills the economic growth and affects thousands of employees working on that project and their families

The simple point that I am trying to bring out is that economic activity is not only for the alleged filing up of the Business community’s coffers. On the contrary, we all including the judiciary needs to take a pragmatic view of the economic activity as a means of providing livelihood to hundreds and thousands of people, contributing to national and state GDP and taxes, and improving the standard of life as a whole. While it is important to punish the few unscrupulous business practices of people who indulge in wrong / unethical activities but it should not be at the cost of economic activity which has larger public interest involved. The Insolvency and Bankruptcy Code comes as an important beginning, where the promoters responsible for the downfall of a company are ejected and new promoters are brought in through a transparent time bound process. Similarly, all disputes where the question of continuing economic activity vs stopping economic activity is concerned, it should invariably be decided in favour of continuing economic activity as it has larger public interest implications, other than in exceptional cases where continuing with such economic activity would lead to large scale harm to people or the environment. The opinion of a few NGOs with “vested interests” or so called “opinion leaders or politicians” should not be given disproportionate importance. When time is of essence then priority should be given to the matters affecting many lives together and the economy at its core. Last but not the least, it is also the speed of decision which is important. The judiciary cannot and should not put these decisions on back burner. Blockage of funds (whether private or public) and its non-application to productive use is as much a crime as theft or burglary as it unconsciously steals away the national wealth by rendering it non-productive. Time is ripe for the judiciary as well as the regulators to wake up to the new age reality of furthering public interest.  It is important for them to see the bigger picture and avoid killing the train full of people to save a few. Good is always good, but given a choice, let the larger good prevail over the smaller good.

-VIKASH JAIN, GROUP GENERAL COUNSEL OF VEDANTA LIMITED

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