Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Deciphering Judicial Overreach

 

Article 142 of the Indian constitution provides for enforcement of Supreme Court decrees. The cause was the carriage of justice. If the victims knock at the court of justice and if justice is delivered, it has to be enforced too. Therefore, the judiciary must have the power to enforce its orders. Thus arose the need for Article 142. The lower courts while having the power to enforce their decrees are also subject to the review by their higher courts. Since Supreme Court is the highest judicial body in the country, naturally its decisions are not subject to review unless it takes up its own review. Secondly, even though justice might have been delivered on paper, it needs to be enforced on the ground. For instance, there is an eviction order, but the person refuses to leave the property. So in this context, the constitutional backing allows the judiciary to enforce its orders anywhere in India. Yet, with the passage of time, there exists a possibility of the Supreme Court overreaching with its powers. There are possibilities that exist which can make the judiciary act as a law unto itself. With independent judiciary granted by the constitution, something essential in a democracy, there is of course a possibility that the Supreme Court operate on unrestrained manner thus creating potential chaos in the administration and governance. Therefore, it would be pertinent to understand the current debate on judicial overreach in the Indian context.

 

Take an instance of the cracker ban debate. It is about the decision to burst the crackers or not. Some might love to burst it while some others are averse to the same. The court wades into the waters and favors those who are opposed to bursting the crackers. This was a classic illustration of how the fundamental rights of those who burst crackers are violated. In fact going further, it was a violation of the rights of those who manufacture crackers. The ban is some kind of unimplementable but gives enough power to the police to harass for their own personal ends. In fact, the entire gambit of bursting crackers is the domain of the executive. It is the decision of the executive to burst or not burst the crackers. The role of the judiciary should be limited to the review of validity of executive action or otherwise. If there exists a legislation the Supreme Court can look into the validity of the legislation. It cannot make laws for itself. The same holds good in the Dahi Handi case. The role of the Mumbai High Court or the Supreme Court would be limited to reviewing the fact whether the Dahi Handi was a violation of any local acts or otherwise. Anything beyond this would be remiss.

 

The extent judicial overreach would have tremendous implications. It would be prudent to revisit the coal scam or the 2G scam cases. In both cases, the Supreme Court held that the licenses were void. When they cancelled the entire licences, the economy went for a toss given the spillovers involved in the same. They could have adjudicated whether the government has powers to change the terms of allotment and the validity of the same or otherwise. In deciding to set a policy itself, the Supreme Court created an overreach which in fact potentially can create a Frankenstein’s Monster. The cancellation of licenses in the said case meant that the companies had lost significant money which they had borrowed from the banks to obtain the license. They neither could repay the same nor could use to bid for license in the new regime. This led to spiralling of non-performing assets leading to balance sheet recession thus a downward trend in investment.

 

The judicial overreach began when the executive vacated its space for policy and decision making. Decision making on policy is prerogative of the executive. The judiciary can at the most look into the constitutional validity of the same. It cannot go into replacing the policy with its own desires and fancies. The overreach began in the 1990s when PV Narasimha Rao government abdicated its role in many a instance. The hawala case (Vineet Narain case) was an instance in point. It completely changed the appointment mechanism of Director, CBI. This is again a government prerogative which was usurped by the Supreme Court. With a weak executive at that time, it went unchallenged. The Supreme Court arrogated itself with the powers to appoint the members of the judiciary. This power was contested quite late albeit unsuccessfully twice.

 

In the context thus illustrated above, it becomes important that the judicial overreach has to be curtailed. There is a certain air of romanticization about judicial interventions. While they look to playing at the gallery, in reality, they would be playing with fire. The founding fathers of the constitution were very clear about demarcation of powers. They wanted the role of judiciary to be restricted to interpretation of law. The judiciary must stick with the same. The law making is the prerogative of the legislature. The Supreme Court cannot take upon itself the powers which have been conferred on the legislature. The legislature might be incompetent, might have thousand defects. Yet the reason cannot be justifiable enough for a judicial intervention into lawmaking. There is ample remedial measures through elections or otherwise to correct the flaws. There is nothing that prevents Supreme Court from adjudicating the constitutionality of the law. It has to judge whether the executive or the legislative action violates any said law or the provisions of the constitution. There is no business of the Supreme Court to get into business of governing for instance BCCI. All it could have done was to examine whether BCCI Board was in line with the articles of association or otherwise. It cannot arrogate powers which are not theirs as per the constitution. To boot, there is no review of the Supreme Court per se. Since it is final body, it can in theory become a dictator in itself. This is something that has to be stopped. While in the current context, the law has to ensure the Supreme Court has to operate within its powers. It is perhaps too much to depend on Supreme Court to maintain self-restraint.

 

 

 

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