The high-voltage Ambani gas war, which has seen its share of twists and turns, took another dramatic turn today. Supreme Court Justice RV Raveendran, recused himself from the bench hearing the RIL -RNRL gas dispute, saying his daughter is associated with a legal firm AZB Advisors, which advises RIL on global projects.
In an interview with CNBC-TV18, Prashant Bhushan, Senior Lawyer at the Supreme Court spoke about the implications of the turn of events.
Here is a verbatim transcript of the exclusive interview with Prashant Bhushan on CNBC-TV18. Also watch the accompanying video.
Q: Let’s just take this as an instance now because in the case of RV Raveendran he did when the hearing of this case actually started disclosed the fact that he had shares in both RIL and RNRL. This disclosure has come as a surprise. We don’t know the nature of the association that his daughter has, what the company says and that is Reliance’s statement that AZB has time to time consulted with RIL on global matters. Should Raveendran have recused himself in this matter?

A: Yes, he should have recused himself at the very first instance when he discovered that he had shares in RIL, which he did right at the beginning of this case. This principle which the court has adopted in its code of conduct in 1997 that if a judge has shares in a company he needs to only disclose them and thereafter if the lawyers do not object he can continue hearing that case, in my view is not a correct principle and needs to be modified.
This is because most often the lawyers are very reluctant to object to judges hearing a case because they are appearing before that judge day in and out and they feel that saying that a judge should not hear the case amounts to an expression of no confidence. And no lawyer wants to say that to a judge.
Therefore this principle needs to be modified and the principle laid out in the Bangalore declaration in 2002 which says that if any judge has any financial interest in a case or a company whose case he is dealing with, he should recuse himself. That is the correct principle which needs to be adopted.

Q: Let’s talk in terms of practicality because you are talking about Clause 2.5 of the Bangalore Principles which says that, a Judge shall disqualify himself from participating in any proceedings in which the judge or a member of the judge’s family has an economic interest in the outcome of the matter of controversy. We have got 22 Supreme Court judges at this point in time. We have already seen as far as this case is concerned six working days have been lost. If you look at what has been disclosed just day before yesterday, practically every judge has some security to his name at this point in time with some share of some company. Isn’t this going to add to the logjam that we currently already see in our courts? 

A: No, I don’t think so. What needs to be done is that the judges should disclose all their possible conflicts of interest as far as possible, that is their shareholdings, their sons and daughter affiliations with various companies etc to the registry rights in advance and from time to time so that the registry can avoid listing cases of those companies or those entities before them.
In this case if this kind of a practice had been followed then perhaps this problem would not have arisen. Justice Raveendran would probably have known right at the beginning that his daughter was in a firm that was advising RIL in these matters.

Q: Do you expect instances of judges withdrawing and recusing themselves from high profile corporate cases of this nature increasing now with these voluntary disclosures of assets coming into place? Do you think that is going to increase even more now? 

A: Yes, I think so because so far the judges by and large had not been treating this as an issue, that is the fact that they have shareholdings in certain companies and many of them were routinely dealing with the cases of those companies without even disclosing their shareholding because they did not think that this was a major issue. That’s a possible point of view though I do not agree with that point of view.
I feel that in accordance with the principle that a judge must be totally impartial and he must not even appear to have any interests or any particular partisan interest in that case, judges should automatically recuse themselves.
I do not think that any principle of necessity applies here because there are a large number of judges who do not hold any shares. There are much larger number of judges who do not hold shares in particular companies. So that shouldn’t be a problem. 

Q: Just to take that point forward, because as you yourself said there are some judges who do not hold any shares in a particular company, but these are judges who have to deal with disinvestment related issues, arbitration proceeding, winding up proceedings. At some point if they are invested in the market they may have a conflict of interest. Would it then be a fair question to raise at this point in time for people like us who deal with the television medium, the 24 hour business news medium we cannot invest directly in the stock markets, only through mutual funds? Should something like that then be made mandatory as far as the judiciary is concerned as well?

A: Yes that is something which can be considered, which should be considered whether judges should at all be dealing in shares. That is something which needs to be seriously debated. In fact this entire code of conduct which was adopted in 1997 was a code of conduct adopted by the judges in a chief justice’s conference.
There was no sort of public disclosure of this code of conduct, no discussion before it was adopted. These are matters which should always be disclosed, discussed by all the stakeholders including members of civil society including litigants, lawyers etc and then only these principles should be finalised. It is not an insurmountable problem. It is a problem which can easily be surmounted and it should be.