Article 360 of Indian Constitution – An Analysis

Abstract

The thought of emergency has passed into political hypothesis. The basic idea, to make specific emergency provisions in the Constitution, was to protect against unintended emergence of autocracy as a result of internal disorder, external attack or battle. In the Indian Constitution, there is a separate part present for the emergency provisions. Part XVIII, therefore, is a component of innovation in our Constitution. The provisions of Financial Emergency are enshrined under Article 360 of the Constitution. This provision provides a safeguard for the Union Government if any threat exists to the financial stability of India. If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, then he may declares a Financial Emergency. The 38th Amend 1975 states that satisfaction of President to declare a Financial Emergency is immune from Judicial Review but provision is subsequently deleted by 44th Amend which restored power of Judicial Review even over satisfaction of President. A financial emergency has never been declared. A situation for declaring it arose in 1990 to 1991 during Prime Minister Chandra Shekhar’s regime but was avoided by selling off the gold assets of India. The 1992 balance of payments crisis that soon followed, which took India to the verge of bankruptcy, was averted by restructuring and devaluing the rupee, though this situation constituted a classic reason for declaring a financial emergency. Article 360 empowers Union govt to take control over state govt on every financial matter deals by a state. The Financial Emergency has never been imposed in any part of country, neither has Article 360 been used till now.

Introduction

I. INTRODUCTION

The conditions, which were at that time of framing the Constitution, played an important role for that the provisions of emergency were included. The framers of the Constitution compelled to think about such provisions after facing many incidents after and before of independence period.[1]

The disruptive forces of casteism, regionalism, communalism, and languish[2] created cacophony and disturbed the peace and harmony of the country. The communal riots were happening between Hindus and Muslims which were disintegrating dangers for the establishment and maintenance of democracy in India. Kashmir problem came up with the lapse of the Crown at the time of making of our Constitution. Danger from Pakistan was coming up. There was the recalcitrant attitude of some of the Native States (Junagarh and Hyderabad) towards joining the Indian Union. It was a biggest challenge for the government of India at that time because the government could not permit such separatist conduct Military action in Junagarh and Hyderabad was necessary as a matter of geographical compulsion. This all motivated to need of Art. 352.[3]

The early years of independence witnessed a spurt in the communist activities among the workers and peasants in Telengana. The revolution of the communists was a probable danger to the harmony and democratic order of the country. This led to the inclusion of stringent emergency provisions in the Constitution. Government of a province. Thus, the Constitution- makers were worried of the regular and successful functioning of the State governments. So they included Art. 356 to take care of the breakdown of Constitutional machinery in a State. There was also marked decline in the economic condition of the country due to the circumstances created by fall in foreign exchange reserves and partition. Dr. Ambedkar wanted to avoid all legal difficulties and thus came Art. 360 of the Constitution.[4] Every time India passes through an economic crisis, some opposition leaders promptly opine that we are gripped by a “Financial Emergency ”. But, to be candid, “Financial Emergency” is a technical term in our Constitution and it cannot be applicable to most such situations.

Our Constitution deals with three types of emergency. Under Article 352, the President can proclaim it due to war, foreign aggression or internal disturbance. If he is satisfied that the security of India or any part thereof is threatened by such event, he can proclaim National Emergency.

Declaring a financial emergency is a radical and controversial tactic—but one that is sanctioned by Article 360 of India’s Constitution—to overcome the impasse that India is in. A financial emergency can be imposed when the “President is satisfied that a situation has arisen whereby the financial stability or credit of India is affected”.

Despite occasional cries from interested quarters that the country faces a “financial emergency”, the Constitutional provision under Article 360 has remained a dead letter.

On 30th August, 2019  Congress Demands Financial Emergency be Declared in Country, Accuses Govt of Destroying Banking System.

The Congress Party demanded that a financial emergency be declared in the country and white paper be released on the "shrinking economy and rising frauds".

Congress imposed allegation on BJP government of destroying the credibility of the country's economy and banking system and demanded that it should declare the names of wilful defaulters, along with the details of their non-performing assets (NPAs).

II. METHODOLOGY

The methodology used for the research enquiry is basically doctrinal although related factual data are looked at from historical point of view. The Constitution of India, commentaries, reports of various committees and commissions, judicial decisions and other reliable sources of information contributes to the data source. The scope of this paper is to objectively examine the provision in the constitution in relation to imposition of President’s rule. The prime purpose of this paper is to critically review the essence of Article 356, its working in practice and the loopholes that needs to be looked into to check the arbitrary application of the same.

III. TYPES OF EMERGENCIES

Three types of emergencies are mentioned in the Constitution:

1. Articles 352 to 355 relate to a national emergency, in which the nation faces a direct external threat. This type of emergency was first declared at the outset of the China war, in October 1962, and lasted until January 1968. It was next declared on the fateful evening of December 3, 1971, when Pakistani airplanes strafed Indian airfields along the western border, formally launching the third Indo-Pakistani war. This emergency was apparently never closed out and was extended into a third proclamation, lasting from June 1975 to March 1977, when Prime Minister Indira Gandhi felt threatened by “political instability.”
2. Articles 356 and 357 relate to a constitutional emergency in the states—also known as President’s rule—when the president is satisfied upon a report from the governor that the government of the state cannot be carried on in accordance with the provisions of the Constitution. This type of emergency has been invoked—and often abused—more than 90 times since independence.
3. Article 360 relates to financial emergency, which has never been invoked.

A. Past Experiences With Emergency Declarations

India’s experiments with emergency declarations have generally not been happy. The grave abuses of the 1975 to 1977 national emergency are well recorded and still fresh in people’s minds. This emergency is perceived as having been declared on frivolous and petty grounds by a prime minister (Indira Gandhi) against whom a high court verdict had been issued for election fraud.

A state of emergency is enforced by law enforcement agencies such as the police, the Power and Works Department, paramilitary forces (e.g., Central Reserve Police Force [CRPF], Central Industrial Security Force, Indo-Tibetan Border Police), and, when necessary, the military. The record of these forces has been atrocious. The CRPF, for instance, has received numerous allegations of murder, rape, and pillage in the northeastern Indian states and Kashmir. Human rights watch groups have frequently called attention to their misbehavior in Kashmir, but to little avail (Raman 2002; Schofield 2002).

Emergency legislation has frequently been used to abuse human rights on a wide scale:

1. India’s experience with the Maintenance of Internal Security Act, promulgated in 1971, and Defense of India Rules, morphed from the Defense of India Act created in the aftermath of the 1962 Sino-Indian conflict, were both misused during the 1975 to 1977 emergency for preventive detention and mass arrests.
2. The National Security Act, passed in 1980, was misused to arrest individuals without warrant for simple suspicion of subversive action.
3. The 1984 Terrorist Affected Areas (Special Courts) Ordinance allowed security forces in Punjab willful and arbitrary powers of detention, leading to international outrage.
4. The 1985 Terrorist and Disruptive Activities (Prevention) Act (TADA) empowered law enforcement agencies to tap telephones, censor mail, and conduct raids without warrant.
5. The 1988 renewal of TADA eliminated assurance of life and liberty in Punjab and due process in the resolution thereof (Kashyap 2002). Some reports place the number of killings and disappearances in Punjab at 1 million people.

India’s history and record of using draconian measures is bloody and wrathful indeed. Hence, it is a matter of grave concern as to how a financial emergency can be enforced without human rights excesses.

It is also uncertain whether central ministers who do not understand what must be done during this emergency will be able to make use of it. The planning commission already has 20,000 proposals for economic revival gathering dust because political parties cannot agree among themselves to pass those bills in Parliament.

B. Sustaining A Financial Emergency

How is a financial emergency to be declared and sustained? First, the prime minister must recommend this action to the President on a majority vote of the cabinet. Next, both houses of parliament must ratify the declaration within 2 months with a two-thirds majority. Subsequently, the financial emergency must be renewed by both houses of Parliament every 6 months, or else it lapses.

Practically, it is highly unlikely that a financial emergency will be approved by both houses of parliament, given the prevalent political coalitions and fragmentations. Consequently, it would be difficult for a financial emergency to continue uninterrupted beyond 2 months. However, there is nothing stopping the cabinet and prime minister from again recommending, after 2 months, the reinstating of financial emergency after the lapse of a day, a few days, or a week or other short duration, since the Constitution is silent on this aspect, and because the president is obliged to act on the advice of the Council of Ministers (Kashyap 2002). This will then allow the business of the financial emergency to be carried on for a prolonged time, if necessary. No doubt, as any active citizen can understand, there will be tremendous opposition for the renewed declaration of financial emergency, and the media would surely add their own spicy twist, but if the desired work were not finished, it could be the only rational choice. The fact is that the Constitution does not disallow this process.

Constitutionally, the cabinet, prime minister, and president can hijack the government and Constitution by repeatedly declaring financial emergency on the heels of the previous declaration, without dissolving Parliament. The Constitution has a loophole in this regard (unless this loophole was intentional—it is difficult to say). In any case, this appears as a constitutional mechanism on which there has been no known public discussion.

Repeated declarations of financial emergency could begin to sound biased and frivolous, and opposition parties are sure to express their objection. They may organize various bandhs (a type of general strike) and boycotts and no-confidence motions in Parliament and create noise that could resonate around the world. The free media would not sit quiet. Therefore, if the cabinet and prime minister do not have the political will to continue a financial emergency for another 2 months without the approval of Parliament, there is still a high chance that the business of the emergency can be completed within the first 2-month period if advance planning is undertaken properly. This would make the emergency period short, but that period will have to be effective. The necessary revision of 20,000 laws and policies can be completed in days with the immense manpower and computer skills India has; land can be acquired and rezoned within weeks across the width and breadth of the country for freeway construction, traffic decongestion, and urban renewal; and new policies for saving drinking water and improving trash disposal can be implemented. Thus, it is possible to acquire all the necessary land for freeways and other infrastructure projects within 2 months.

The Indian Constitution does admit a scenario in which a financial emergency may be extended for an unlimited period. In the event that the Lok Sabha (House of the People; the lower house of parliament) is dissolved pursuant to the first declaration of financial emergency, or if the Lok Sabha is already dissolved but the financial emergency has been ratified by the Rajya Sabha (Council of States; the upper house of parliament), the financial emergency can continue indefinitely until such time as the Lok Sabha is reconstituted. A president can easily find legitimate reason, given the fragile financial, economic, and security environment in India, to disallow a dissolved Lok Sabha to be reconstituted. A president can also find adequate reason from one of many hundreds in the fragmented coalition politics of India to dissolve the Lok Sabha pursuant to the first declaration of emergency. Furthermore, there is no constitutional or legal instrument that can overturn the President’s “judgment” in this regard. Thus, an indefinite period of financial emergency can be attained by implementing four steps:

1. The cabinet recommends a financial emergency,
2. The financial emergency is ratified by the Rajya Sabha,
3. The prime minister recommends to the president to dissolve the Lok Sabha, and
4. The president dissolves the Lok Sabha. Needless to state, this method allows greater ease and time for the government to implement reform in India. Grave situations require grave remedies; serious illness requires serious medicine: so it is with India’s haphazard economic growth and environmental tragedy.[5]

C. Article 360 Of The Constitution Of India

Article 360 makes a provision concerning financial emergency. “If the President is satisfied that a situation has been whereby the financial stability or credit of India, or any part thereof, is threatened, he may by a proclamation make a declaration to that effect.”[6]

When such a proclamation is in operation, the centre can give directions to any state to observe such canons of financial property as may be specified in the directions. It may give such other directions as the President may deem necessary and adequate for the purpose [360(3)].[7] Any such directions may provide for the reduction of salaries and allowances of all. Or any class of persons serving in the state. [Art. 360(4)(a)(i)].[8]

The centre may require that all money bills, or financial bills or those which involve expenditure from the state consolidated fund, shall be reserved for the President’s consideration after being passed by the state legislature [Art. 360(4) (a) (ii)].[9]

The President may also issue directions for reducing the salaries and allowances of persons serving the union including the Supreme Court and the high court judges [Article 360(4) (b).][10]

A proclamation issued under issued under Art. 360(1) may be revoked or varied by a subsequent proclamation [Art. 360(2) (a)], and has to be laid before each House of Parliament [Art. 360(2) (b). The proclamation ceases to have effect after two months unless in the meantime it is approved by the Thirty-Eighth Amendment of the Constitution, the Presidential ‘satisfaction’ in Art. 360(1) was declared to be ‘final and conclusive’ and not questionable in any court on any ground. No court was to have jurisdiction to entertain any question, on any ground, regarding the validity of —

A declaration made by proclamation by the President to the effect stated in Article 360(1); or

The continued operation of such Proclamation. This provision has now been deleted by the Forty-Fourth Amendment of the Constitution.

D. Effects Of Financial Emergency

When a Financial Emergency is in action, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose.

When a Financial Emergency is in operation, the directions given by or powers assumed by Union or President are as follows:-

1. A provision requiring the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of a State.
2. A provision requiring all Money Bills or other Bills to which the provisions of article 207 apply to be reserved for the consideration of the President after they are passed by the Legislature of the State.
3. It shall be competent for the President to issue directions for the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of the Union including the Judges of the Supreme Court and the High Courts.

While explaining the provisions of Financial Emergency, Dr B.R. Ambedkar states that this Article more or less on pattern of National Recovery Act of USA passed in 1932 which gave President the complete power over economic and financial matters to remove difficulties and these provisions are taken by USA after the Great Depression of 1930.

IV. THE INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT, 1977

Likewise NEA, 1976 Congress passed the International Emergency Economic Powers Act (IEEPA) in 1977 to “revise and delimit” the president’s emergency authority.[11] The main aim to introducing this Act was to protect and prevent the nation from any economic situation. The IEEPA mainly alarms international financial transactions[12] and transactions that otherwise “involve an interest” of a foreign national.[13] But the federal government has normally applied the emergency powers decided by the statute to “U.S. persons”, people and organizations with legal status in the United States, including U.S. citizens.

A. Proclamation Of Emergency

The IEEPA states that the President may use powers to declare these type of emergency only when, “unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.”[14]

The statute further provides, somewhat ambiguously, that the President may only use IEEPA powers activated by a declaration of national emergency to “deal with” that specific emergency.[15]

B. Concequences Of Emergency

Therefore, the IEEPA grants the power to the president to freeze the assets of, and forbid monetary transactions involving, individuals selected by Executive Order. This includes the power to prohibit bank payments and transfers of credit insofar as they “involve” an interest of a designated country, entity, or person and to prohibit the use, holding, or transfer of property implicating a relevant foreign interest. The President may exercise these powers over property belonging to any person within the jurisdiction of the United States. Even the president of U.S.A. has the authority to block the basic life necessities. Although one section of the IEEPA excuses from the President’s authority “donations, by persons subject to the jurisdiction of the United States, of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering,”[16] another section permits the President to regulate or prohibit the donation of these items if “the President determines that such donations. Would seriously impair his ability to deal with” a declared national emergency.[17]

C. Invocation Of Emergency

There is a specific punishment regarding the violation of rules and restrictions relating to economic emergency. It states that anyone who violates the IEEPA is subject to a civil penalty up to $250,000; a wilful violation may incur a criminal penalty up to $1,000,000 and up to twenty years in prison.146 Every President who has declared a national emergency and exercised IEEPA powers pursuant to that emergency has prohibited such donations.

D. Duration Of Emergency

National emergencies are to end after six months unless Congress voted by concurrent resolution to extend the emergency; it could also vote at any time to end the emergency[18].  The draft bill also required that the President transmit to Congress all regulations, rules and orders circulated pursuant to a declared emergency. The final bill preserved this obligation.[19] It also required that, every six months following a declaration of national emergency, the President must submit to Congress an accounting of expenditures “directly attributable to the exercise of powers and authorities conferred by such declaration.” The NEA still imposes a requirement that “not later than six months after a national emergency is declared, and not later than the end of each six-month period, thereafter, each House of Congress shall meet to consider a vote on a concurrent resolution to determine whether that emergency shall be terminated.”[20] The NEA specifies that declared emergencies will terminate automatically after one year unless renewed by the President[21], and that the President may terminate a national emergency at any time.[22]

E. Comparison With American Nations

The American nations consist of countries from the North and South Americas. Comparing the size, India fares well above other nations in terms of world count, but when it comes to coverage of important factors, it covers only 60% while countries like Ecuador and Mexico have 75% coverage.

A study conducted by Oxford compared constitutions of the world on 92 key factors. India has a better coverage of these factors as compared to the USA. Yet the American populace enjoy a higher standard of civil liberties as compared to India. As far as codification of constitution is concerned, India and the USA are similar as they have a written constitution.

The constitution of the United States is a product of the 1787 constitutional document and following documents. Similarly, all of the American countries have a written constitution. Canada is the only exception with an uncodified constitution. Although they do have a Constitution Act, the preamble of their constitution states, ‘similar in principle to that of the United Kingdom’.

In terms of Rigidity, Indian constitution is more flexible than rigid. In contrast to this, the United States’ constitution is rigidly structured. But it can still be amended by the Congress using special provisions provided in the constitution itself. In terms of federation and Unitarianism, India describes itself as a federal system with a unitary bias.

In the America, The US is a purely federal state. Most of the other nations in the continents follow the example including Canada, Mexico, Brazil and Argentina. Chile is one South American country which is a democratic republic and its State is unitary while the territory is divided into regions. Its administration is functionally and territorially decentralized.

American nations have also preferred Presidential type of government. The president is the head of the state and government. In India Parliamentary form is followed where the Prime Minister is the head of the government and President is the head of the state.

Coming to the fundamental rights, India modelled it on the American Bill of Rights. But the rights are not absolute and government can impose restrictions on them. The USA’s American Bills right had enumerated a list of rights, which the Supreme Court extended by recognising several fundamental rights not specifically enumerated in the constitution.

Finally, Indian constitution provides emergency provisions under part 13. The USA has several counters to manage emergencies. The Governor of a state or a local mayor can declare emergency in their state or city. The president can enforce a federal state of emergency.

There is only one emergency provision that the Constitution of USA guarantees its citizen- The privilege of the writ of Habeas Corpus shall not be suspended, unless when in case of rebellion or invasion of public safety may require it. Canada invokes emergency via the emergency act. The state of emergency expires automatically after 90 days unless the Governor-in-Council extends it.

F. Comparison With European And African Nations

Once again, there is no competition to the word count of Indian constitution in this case either. Nigeria with 66,263 words comes the closest and is yet half the size of the constitution. It is ranked as the 4th biggest constitution. The Oxford’s constitutional comparison study ranks the UK below India in terms of factors covered by the constitutions of the nations. But once again, it does not imply that Indian civil rights are being enforced in a better way than the UK.

The United Kingdom also differs from the Indian constitution on the aspect of codification. Their constitution is unwritten. The closest thing that came to become a constitution was the Treaty of Union in 1707, but this tends only to be subject to legal and academic scrutiny in Scotland, and has not received comparable attention in England and Wales.

The only other example of an uncodified constitution in the Europe is the Microstate of San Marino near Italy. France and Hungary are two European countries which adopted a written constitution in the 20th century.

Britain has a very flexible constitution. There is no special procedure of amendment and can be amended by the Parliament just like other laws. France and Germany are the stark opposite with their rigid constitutions. French constitution can only be amended if the amendment gets 60% favour from both the houses in the parliament.

Germany has article 79, which states that Basic Law can be amended by absolute 2/3rd majority in the Bundestag and simple 2/3rd majority in Bundesrat excluding amendment of the laws defined by the eternity clause. Europe has a balanced state between federalism and Unitarianism.

The UK, France, Spain and Italy are example of unitary countries whereas Germany, Switzerland, Belgium and Austria are some examples of federal states. In Africa, Nigeria, Ethiopia and South Africa follow federalism while the others follow the unitary system. Parliamentary system of governance is followed in majority of the European countries.

The UK, Norway and Sweden have parliamentary government with a royal head of the state. In Africa, Libya, Ethiopia and Somalia have a parliamentary government with a non-monarchical head of the state. South Africa and Botswana have the head of state and head of government in one office, filled by parliament’s choice and elected separately.

Fundamental rights are not mentioned in the British Constitution. The French though, have Declaration of the Rights of Man and of the Citizen, which comes close to the fundamental rights mentioned in the Indian constitution. The nations of the European Union follow the Charter of Fundamental Rights of the European Union.

In the second chapter of South African constitution, there exists a provision called Bills of Rights. This bill covers all the 15 fundamental rights that a South African citizen enjoys. Coming to the Emergency provisions, France grants ‘extraordinary powers’ to the president at the time of crisis. Germany limits basic laws in case of state of defence, tension or internal instability. In the UK, the emergency powers act, 1964 grants the monarch the Authority to declare a state of emergency in the time of crisis.

Conclusion

The Indian constitution finds many similarities with the other constitutions in the world, yet it has its own unique features which make itself special in its own way. This is partly due to the fact that we have adopted characteristics of many different constitutions across the globe, combined them together and personalised them to suit our conditions. We observe that constitutions, written or unwritten, form the backbone of governance in any state. It is after all, an archive of all the laws, principles and guidelines that are required to maintain law and order in the country and prevent internal or external fallouts. Each nation has constructed its constitution on the basis of efficiency of governing the demonym of the region. Over the decades, it has continuously been amended to keep up with the times, the transforming demographics and modern ideologies. No matter the differences or similarities between the different constitutions of the world, each nation wants to secure the interests of its citizens prior to everything else. In doing so, they are prioritising the nation’s interest in growth, security and stability. Constitution provides the basis of decisions and policies that are made to support this. A good constitution is a prerequisite of an empowered nation. India, with its extensive written constitution in place, already possesses this prerequisite. It would not be too long until we stand on level ground with the super powers of the world.

References

[1] https://ascelibrary.org/doi/10.1061/%28ASCE%29LM.1943-5630.0000118 [2] Art. 360 (1), the Constitution of India, 1950. [3] Art. 360 (3), The Constitution of India, 1950.During the period any such Proclamation as is mentioned in clause (1) is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose. [4] Art. 360 (4), The Constitution of India, 1950, Notwithstanding anything in this Constitution (a) any such direction may include (i) a provision requiring the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of a State; (ii). A provision requiring all Money Bills or other Bills to which the provisions of article 207 apply to be reserved for the consideration of the President after they are passed by the Legislature of the State. [5] Art. 360 (4) (b), The Constitution of India, 1950. it shall be competent for the President during the period any Proclamation issued under this article is in operation to issue directions for the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of the Union including the Judges of the Supreme Court and the High Courts. [6] Supra Note 56, 1977 U.S.C.C.A.N. 4540, 4541. [7] Ibid 50 U.S.C. S. 1702 (a) (1)(A) (2006). [8] Ibid. Note 63 S. 1702(a) (1) (B) (C) (2006). [9] Supra Note 56 S. 1701 (a) (2006). [10] Ibid. S. 1701 (b) (2006). [11] Ibid Note 66 50 U.S.C. S. 1702(b) (2) (2006). [12] Ibid [13] National Emergencies Act, S. 301, (U.S.A.). [14] Ibid, F.N. 70 S. 401(b), 50 U.S.C. S. 1641(b) (2006). [15] Ibid, S. 202(b), 50 U.S.C,S. 1622(d) (2006) [16] Ibid, 202(d) 50 U.S.C,S. 1622(d) (2006). [17] Ibid, 202(a) 50 U.S.C,S. 1622(d) (2006).

Copyright

Copyright © 2023 Dr. Sumeet Pal Singh Brar. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.