Right to property:
First,in his article dated 03-04-2019 “Article 35 A: Myth or Reality” , Mr. Drabu haswritten: “In 1950, when the J&Kgovernment initiated ‘land to tiller’, it was not legally possible to do sounder the Indian Constitution. Till 1978, Right to Property under Article 19was a fundamental right. It was only with the 44th amendment that itbecame a statutory right under Article 300A. What prevented the J&K BigLanded Estates Abolition Act, 1950, from being annulled on the grounds ofinfringing Article 19(1) (f) was Article 35A”.
These statements do not reveal full truth aboutland reform laws. It is factually incorrect statement since land reformlaws had been startedall over India right after 1947 but, as right to property was a FundamentalRight, there were legal hitches that were removed first by Fist Amendment tothe Constitution in 1951 followed by a number of Constitutional Amendments tillit culminated in abrogation of this right in 1978. So, before 1978 Amendment there is along history of legal developments which is missing in Drabu’s narrative. It is true that right to property was a ‘fundamental right’ under Article 19(1) (f) readwith Article 31 of the Indian Constitution & that it was finally taken outof Part III by 44th Amendment of 1978 to the Constitution &recast as a Constitutional Right under Article 300-A. But it is factually incorrectto say that “land to tiller” or “agrarian reforms” were not possible in otherIndian States under the Indian Constitution till 44th Amendment of1978. In fact, agrarian measures hadstarted in all provinces before independence of India but as right to propertywas a ‘fundamental right’, the abolition of Jagirdari or Zamindari system orabsentee landlordism couldn’t succeed till firstamendment was effected to the Constitution as early as in 1951whereby this right was brought within the doctrine of Eminent Domain. The doctrine recognises”the inherent power of the State to take privately owned property especiallyland for public use” subject to the compensation for the taking. But as Rightto Property was a FundamentalRight in Article 19 (1) (f) read withArticle 31, action of several State governments taking property/land byabolishing Zamindari/Jagirdari was challenged in the SC. So, to facilitate theabolition of Zamindari/Jagirdari, 9th Schedulealong with Articles 31-A( saving of laws providing for compulsoryacquisition of property by State ) & 31-B(validation of certain Acts and Regulations) were inserted in the Constitutionby the Constitution (First Amendment ) Act, 1951 that put 13 State Acts takingaway land from Zamindars & Jagirdars & distributing it among landless farmers ,beyond challenge before Courtsof Law. By the Constitution (FourthAmendment) Act, 1955 State’s right of compulsory acquisition &requisition of private property was allowed by amending Article 31. Article31-A was amended by Constitution (7thAmendment)Act, 1964. All these steps were felt necessary to carry out the landreforms in the country in accordance with the socialistic economic philosophyof the State to distribute land among peasants & tenants after taking itaway from the landlords & Jagirdars. After a plethora of judgments of theSC in AIR 1952 SC 252, AIR 1958 SC 328 , (1984) 1 (SSC) 515; BankNationalisation case (1970) 1 SCC 248 , (1996) 2 SCC 226, (2007) 8 SCC 705& many others, the Parliament ultimatelymade the Constitution ( 44th Amendment) Act, 1978 thatremoved right to property under Articles 19 (1) f & 31 by repealing theseprovisions, abolishing right to property as a Fundamental Right &reincarnating it as a statutory/constitutional right only undernewly incorporated Article 300-A which states that no person shall be deprivedof property except by the authority of law; to note, authority of law wasalready recognised vide earlier amendments as mentioned supra.
The doctrine of Eminent Domain enabled the States to pass their own ZamindariAbolition Acts. By 1956, the entire system of Jagirdari or Zamindarisystem & absentee landlordism was abolished in all States in India (See Ramchandra Guha, India After Gandhi (Picador, 2008) pages 219-220) with certain constitutional hiccups stillremaining with huge number of cases challenging validity of the State Acts inthe Supreme Court. As the Fundamental Rights Part III of the IndianConstitution did not apply to the JK State till the Constitution (Applicationto Jammu and Kashmir) Order, 1954 extended them to the State w.e.f 14th May 1954 &as the State’s right of making laws with respect to permanent residents , theirproperty rights & land reforms were already accepted under the Delhi Agreement of July, 1952 & several changes were beingcontemporaneously made to the right to property under Article19 read with Article 31 by Indian State, the JK State was simply followingits earlier programme of land reforms under its own property laws laterrecognised in Delhi Agreement followed by the Constitution (Application toJammu and Kashmir) Order, 1954 . So, land reforms measures werenothing confined to JK only, as wrongly stated by Mr. Drabu. As Right toProperty, though originally a Fundamental Right was made otiose by a number ofConstitutional Amendments as cited above, that had already paved the way forland reforms in Indian States long before 44th Amendment till it wasfinally, as a formality, taken out of the Part III of the Constitution. By1978, right to property was relegated to empty shell by a number ofConstitutional Amendments & SC judgments.
Redefining relationshipbetween J&K Bank & State Govt:
In his another article “Redefine the relationship” carried in GK dated 13-06-2019, Mr. Drabu has made several statements about the JK Bank, and its position vis a vis State Government. He mentions how its Chairmen have been disgracefully removed or sacked by both elected & non-elected governments of the State and that the same, although “administratively decisive” actions of the State [meaning cannot be interfered with] “are procedurally improper” and “violates the Banking Regulation Act of 1949.” He further writes as Bank’s Chairman is Government nominee Director, “withdrawing the nominee directorship [referring to sacked ex CEO Mr. Parvez Ahmad] by invoking Article 69 (III), cannot annul the appointment [of Bank’s Chairman] made under Banking Regulation Act which also lays down the procedure for removal”. First point that arises here is if removal or sacking of Chairman was/is “procedurally improper” against the Banking Regulation Act, 1949, why didn’t he as a “removed” Chairman in 2010, question the decision of the State Government at that time? Why he kept mum if his “removal” or asking him to step down, which comes to the same, whether you read it one way or other, was, in his opinion, against the procedure of the BR Act, 1949? Why didn’t he write against then Elected Government action when he too was “disgracefully” removed by them? No imputations as in this article were leveled by him against the Elected State Government’s action then. Had he challenged & objected against his “procedurally wrong” removal, when Elected Government was in power, may be, it might have set a deterrent against non-Elected Government to “violate Banking Regulation Act”. Article 69(III) of the Article of Association of the Bank provides “Government Directors [which includes Chairman too] will continue in their office so long as their appointment is not cancelled by the Government. Appointment of the Chairman was cancelled by the State Government. Where is the procedural irregularity? Second, under section 10B (6) of the BR Act, 1949, RBI has full powers to remove Chairman of any banking company even before expiry of his tenure if RBI finds him “not a fit and proper person to hold such office.” Read this responsive comment of mine together with the press conference of CS, BVR Subramanyam & Governor Shri Satpal Ji, where CS stated “RBI wrote to the governor administration about the complaints …[decisions of sacking] were after the RBI wrote to the State about governance issues in the Bank”. Third, Mr. Drabu though seemingly dissatisfied with the decision of the Government, ultimately, tries to wriggle out of confusion by saying “Be that as it may. The deed has been done”. Which prima facie means it is OK now.
Mr. Drabu then continues to say that there is a need for redefining relationship between J&K & the State Government. Before putting forth his suggestions how this “complicated” relationship could be redefined, he makes such averments which will confuse a layman & as such need an elaboration. JK Bank is only State owned bank in India & a Government company, but it is “old generation private sector bank”, he writes. These statements are correct but confusing as State Owned cannot be Private Owned. Point needs a further elaboration. What he wants to convey is that under section 22 of the BR Act, 1949, RBI has granted bank license as “old private-sector bank”. But that license will not change the status of Bank from its being State Owned Banking Company to a Private Owned Banking Company. Neither by laws applicable nor by the Bank’s own Constitution. He writes that Bank survived “nationalisation” so far as “the Union Government feels the Bank is outside its ambit of control. So too does the State government”. If State Government Owns Bank, holding 59.3% share equity in it, controlling constitution & composition of its BODs including all important functionary post of CEO cum Chairman, how State Government can be said to feel that they do not have “control” over it? Central Government does not have any direct stake in the Bank except through RBI & under related banking laws. But for “nationlisation”, Central Government, not State Government, must have at least 51% & above share capital in a banking company & “nationalisation” is done by passing what is called the Banking Companies (Acquisition & Transfer of Undertakings) Act by the Parliament. Going by the “background” of “nationalization” of 19/20 major banking companies in 1969 & 1980, there is no such factor existing till date to take over the Bank by the CG. Nor such intention. CS sitting next to Governor of the State made it clear in press conference on 12-06-2019. Furthermore, in India, while J&K is the only State [Government] Owned Bank, there are two more banks, SBI & IDBI Bank Ltd, where although Central Government has over 50% share , as yet, these “State/CG owned” Banks are not nationalised.
Well that said, he then makes some good suggestion about that the State Government’s role “for the capitalstructure of the bank as required by prudential and regulatory norms…….. Thiswill set the rules for performance evaluation”. However, he begins his thissuggestion by saying that the State “must rid itself of the mind-set that it isthe owner of the Bank. It is not” [owner]. But this claim being too stretched beyond the point is conflicting withhis earlier statement that it is “only State owned Bank” of the country. Underthe Companies Law, ownership in companies rests with shareholders. Since theState holds overwhelming Share Equity in Bank, being also promoters of theBank, together with its “absolutecontrol” on its administration & functioning, in that sense, it unambiguouslyowns the Bank. Second suggestion hemakes about rebuilding BODs of the Bank that should be “the supreme authority;not the government, not the chairman”. First question that arises here is whyhe didn’t as a Chairman cum CEO or post-stepping down under Government Ordersin 2010 made such suggestions to the State Government? Why now? Further, is itpossible that State Government that holds “absolute control” over the Bank,which is proven beyond doubt now, under equity holding & by constituting BODs& appointing most powerful functionary, Chairman cum CEO, under the Bank’sCharter, will be ready to convert it into something like private enterprisewhere it will lose its control on it? Certainly not!
He pleads for corporatization ofJ&K Bank that is tomake it an Independent Organisation of State control? Under Memorandum andArticles, State Government owns Bank administratively & functionallytogether with financial control by equity of 92% which it had when Bank waspromoted in 1938, subsequently reduced to 79% & then by de-investment, thisequity was reduced to 53% at most crucial time when Firdous Tanki was pendingin the Apex Court & presently State has 59.3% share holding in Bank. StateGovernment ‘s equity in Bank was reduced to 53% when in 2016-2017, Mr Drabu asthen FM of the State inducted additional 532 Cr in it to raise State’ sequity to present 59.3% therebyreassuring & tightening “financial control” of State on the Bank. Accordingto a report published in GK dated 12th January, 2017 (Government of J&Ktoday announced an amount of Rs. 532cr as additional capital infusion in twotranches during next financial year to retain its strategic equity share of53). It was done by Mr. Drabu to retain State Government’s strategic control inequity share of the Bank, in his own words. His present column conflicts withit. Today he pleads for decreasing & redefining this control under a newrelationship between State & Bank. How strange? Here a wrong impression hasbeen created in the minds of the readers that State Government is on par withother shareholders & customers of the Bank. To call, & plead to change,Master to a subordinate is illogical, one can say least.
He makes a valid suggestion thatgovernment should have no say in appointment of Independent Directors on theBoard in the light of section 150 of the Companies Act, 2013 & that they “must be selected through a formalprocess” which “should be a matter for the Board”. Again, one is withinone’s right to ask if such was scenario in the Bank, since ex-CM/s time, asmentioned in his cited column, why didn’t he raise objections to it then? Afterall, all know that the new Companies Act that provides for appointment ofIndependent Directors was passed well in 2013. He has again, though lately, raisedgenuine concerns in tailpiece of his write up.