Indirect Tax Practitioners Association vs. R. K. Jain (Supreme Court)

DATE: (Date of pronouncement)
DATE: August 14, 2010 (Date of publication)

Click here to download the judgement (r_k_jain_cestat_contempt.pdf)

Voice of citizen who believes that judicial institution is not functioning well cannot be muffled by using the weapon of contempt

Shri. R. K. Jain, Editor of Excise Law Times, wrote a series of editorials making serious complaints against the working of CEGAT. The President of CEGAT wrote a letter to the Chief Justice of India complaining about the editorials pursuant to which the Supreme Court initiated criminal contempt proceedings against Shri. Jain. The proceedings were discharged after Shri. Jain tendered an apology and gave an undertaking that if there were any serious complaints regarding the functioning of CEGAT in future he would first bring those matters to the attention of the concerned authorities before taking any other action. Subsequently, Shri. R. K. Jain wrote a series of letters to the Finance Minister, Revenue Secretary, CBEC & the President, CESTAT, highlighting specific cases of irregularities, malfunctioning and corruption in the GESTAT. In particular, several irregularities by Mr. T. K. Jayaraman, Member, were also highlighted. As no cognizance was taken of the several letters, Shri. R. K. Jain wrote an editorial highlighting the perceived irregularities in the working of CESTAT. The ‘Indirect Tax Practitioners Association’ took up the cause of Shri. T. K. Jayaraman and filed a complaint with the President of CESTAT accusing Shri. R. K. Jain of “trying to scandalize the functioning of CESTAT and lower its esteem in the eyes of the public”. Though the President set up an inquiry committee, the Association chose not to appear before it out of apprehension that the proceedings may result in embarrassment to them and the Members of the CESTAT. So, the Association decided “to adopt a shortcut to silence” Shri. R. K. Jain and filed a contempt petition in the Supreme Court alleging that Shri. R. K. Jain had violated the undertaking given by him in the earlier proccedings. HELD by the Supreme Court dismissing the Petition and imposing costs of Rs. 2 lakhs:

(i) On the issue whether the undertaking was violated, Shri. R. K. Jain is not a novice and for decades, he has been fearlessly using his pen to highlight malfunctioning of CEGAT and its successor CESTAT. Based on his earlier letters, the Supreme Court had made suggestions for the working of the Tribunal. Before writing the present editorial, Shri. Jain had written several letters to the authorities pointing out serious irregularities in the functioning of the Tribunal but nothing was done by them to stem the rot. Consequently, Shri. Jain is not guilty of violating the undertaking given to the Court;

(ii) On the larger issue of whether criticism of a judicial body amount to contempt, fair criticism of the system of administration of justice or functioning of institutions or authorities entrusted with the task of deciding rights of the parties gives an opportunity to the operators of the system/institution to remedy the wrong and also bring about improvements. Such criticism cannot be castigated as an attempt to scandalize or lower the authority of the Court or other judicial institutions or as an attempt to interfere with the administration of justice except when such criticism is ill motivated or is construed as a deliberate attempt to run down the institution or an individual Judge is targeted for extraneous reasons. Ordinarily, the Court would not use the power to punish for contempt for curbing the right of freedom of speech and expression, which is guaranteed under Article 19(1)(a) of the Constitution. Only when the criticism of judicial institutions transgresses all limits of decency and fairness or there is total lack of objectivity or there is deliberate attempt to denigrate the institution then the Court would use this power;

(iii) On merits, the editorial cannot be regarded as intended to demean CESTAT as an institution and scandalize its functioning nor is there any attempt in it to lower the authority of CESTAT or ridicule it in the eyes of the public. The object of the editorial was to highlight the irregularities in the appointment, posting and transfer of the members of CESTAT and instances of the abuse of the quasi judicial powers. What was incorporated in the editorial was nothing except the facts relating to manipulative transfer and posting of some members of CESTAT and substance of the orders passed by the particular Bench of CESTAT, which were set aside by the High Courts of Karnataka and Kerala. By doing so, he had merely discharged the constitutional duty of a citizen enshrined in Article 51A(h);

(iv) S. 13 of the Contempt of Courts Act legislatively recognizes one fundamental of our value system i.e. truth. If a speech or article, editorial, etc. contains something which appears to be contemptuous and the Court initiates proceedings, truth should ordinarily be allowed as a defence unless the Court finds that it is only a camouflage to escape the consequences of deliberate or malicious attempt to scandalize the court or is an interference with the administration of justice. On facts, as it is not even suggested that what has been mentioned in the editorial is incorrect or distorted, there is no warrant for discarding Jain’s assertion that what was written is based on true facts;

(v) There is a growing acceptance of the phenomenon of whistleblower. A whistleblower is a person who raises a concern about wrongdoing occurring in an organization or body of people. Shri. Jain can appropriately be described as a whistleblower for the system who has tried to highlight the malfunctioning of an important institution established for dealing with cases involving revenue of the State and there is no reason to silence such person;

(vi) The Petition lacks bona fide and is an abuse of the process of the Court. The Petitioner, a body of professionals, are expected to be vigilant and interested in transparent functioning of CESTAT. However, instead of doing that, they have come forward to denounce the editorial. “We are sorry to observe that a professional body like the petitioner has chosen wrong side of the law”;

(vii) For filing a frivolous petition, the Petitioner is saddled with cost of Rs.2,00,000/-, of which Rs.1,00,000 to be paid to Shri. Jain.