On January 12, the Supreme Court stayed the implementation of the three new farm laws despite strong opposition from the government’s lawyer, Attorney General KK Venugopal.
He argued that there was no reason to grant a stay because there was a presumption of constitutionality operating in favour of the legislations. This would mean that at an interim or preliminary stage, the Supreme Court should have examined why a stay is necessary on a legislation that is deemed to be legally valid under the Constitution until proven otherwise. However, the Supreme Court declined to provide any response to this concern.
The stay has been met with further criticism on the grounds that the Supreme Court acted in excess of its constitutionally endowed function. Undoubtedly, the Supreme Court possesses the power to stay executive action under Article 32 of the Constitution, or on the pretext of doing “complete justice” under Article 142.
However, the exercise of jurisdiction under these provisions must be justified by the court. There are two ways in which the Supreme Court could have justified a stay on the farm laws. First, if the laws were in violation of the farmers’ fundamental rights. Second, if there was illegality in the passage of the laws or a lack of legislative competence – for instance, if Parliament had no authority under the Constitution to legislate on the subject. Neither of these grounds were relied on in justifying the stay.
Instead, the bench reasoned that the stay would instill confidence in the farmers in order to bring them to the negotiating table. Under the Constitution, engineering political compromises such as these are not the Supreme Court’s concern, nor do they warrant an exercise of writ jurisdiction.
Beyond political bargaining
However, the predicament here goes beyond political bargaining. At their core, the farm laws are economic preferences that have been put into effect by the state, which is ostensibly a valid exercise of legislative and executive power under the Constitution. For instance, deciding which commodity markets require government support and protection is a policy decision taken by the state, as opposed to a right or entitlement of an individual.
In granting a stay on these laws, the court has disregarded its own jurisprudence on the treatment of economic statutes and policy, in particular its past opinions on the Essential Commodities Act, 1955.
The Essential Commodities Act has its roots in the colonial era, where a commodity control system was deemed to be necessary in a time of scarcity and war. This system was continued post-Independence in the interests of a planned economy and government control over important product markets.
While the 1955 Act does not define what an “essential commodity” is per se, Section 2A of the Act permits the government to notify an essential commodity as it deems necessary, under a list in the Schedule to the Act. Section 3 then gives the government the power to regulate the production, supply and distribution of the notified commodity.
It is Section 3 that the Essential Commodities (Amendment) Act 2020 controversially alters. The 2020 Act introduces Section 3(1A), which provides that the supply of certain foodstuffs, including cereals, pulses and oils, can only be regulated in extraordinary circumstances such as war, famine and natural calamity. Further, stock limits can only be imposed in cases where there has been a specified increase in the retail price of a commodity.
Curiously, the Public Distribution System, through which the state regulates the distribution of produce, has been kept beyond the purview of the amendment even though its origin is under the Essential Commodities Act. This would mean that consumers can still ostensibly be protected with respect to the denotified commodities.
While the amendment would disrupt the protections being enjoyed by farmers in these markets and creates a credible prospect of hoarding, it also permits farmers to sell beyond designated platforms such as the local Agricultural Produce Market Committees, and control pricing in cases of surplus. The bottom line is that the new farm laws are tethered to complex economic markers and considerations – a fact which the Supreme Court has been alert in the past under the Essential Commodities Act.
An examination of the Supreme Court precedents on the treatment of economic legislations would suggest that it has been reluctant to interfere with the decision-making of the state when it involves economic considerations.
Beyond judicial review
In 1990, in Shri Sitaram Sugar Co. Ltd. v. Union of India, when concerned with whether sugar factories should be grouped together for the purposes of determining price under the Essential Commodities Act, the Supreme Court held that the decision of what was best for the sugar industry was exclusively within the province of the Central government, and that “such matters do not ordinarily attract the power of judicial review”.
In another case filed by producers of mustard oil, a seven judge bench of the Supreme Court in 1978 held that it would be “extremely hazardous” for courts to experiment with matters of economic policy. According to the Supreme Court in Mahalakshmi Sugar Mills and in Prag Ice & Oil Mills, the superior courts would only interfere with economic policy decisions if they contravened the statutory framework that governs such decision-making.
If this reasoning is followed, then the Central government is well within its statutory authority in excluding certain products from the list of essential commodities. The decision of whether commodities such as oil and cereals necessitate government protection is analogous to a decision concerning the regulation of the sugar or oil market, as in the above cases.
This is not to say that judicial reluctance in the context of economic statutes is indubitably the right position, especially when fundamental rights are involved. However, any deviation from established principles on a point of law necessarily must be justified by the court in the interest of judicial consistency.
This is why the order staying the farm laws sets a concerning precedent. Aside from the fact that the Supreme Court appears to be comfortable in adjudicating without cogent justification, its indifference to past precedents and selective application of principles diminishes the rule of law.
Unnati Ghia is a counsel at the Bombay High Court and a graduate of NLSIU Bangalore.
