COURSE: LAW & JUSTICE IN A

GLOBALIZING WORLD
NATIONAL LAW UNIVERSITY TOPIC: GLOBALIZATION AND ITS IMPACT
ON ADMINISTRATION OF JUSTICE AND
ODISHA ACCESS TO JUSTICE (WEEK 14)
INSTRUCTOR(S): PROF. RAO

GLOBALISATION AND ITS IMPACT ON ADMINISTRATION OF

JUSTICE AND ACCESS TO JUSTICE

With the advent of globalisation, there have been fundamental changes to the concept of
nation-state system. This process has been transforming the regulatory, constitutional and
political framework that oversees economic and development policies of a state. However,
with the rise of privatization and liberalization in the developing countries, numerous
challenges have been brought against these developing policies. For instance in India, a lot
of opposition has been brought against the development policies on the ground of violation of
human rights. The Indian development policies are majorly formulated by the executives and
there are hardly parliament’s debates over these development policies.

Therefore, the non-governmental organizations, opposition and grass groups are left with no
choice except recourse to the courts in order to challenge these policies of globalization. This
module examines the role of the Court in administering justice in the globalised era in India.
This module analyses the transformation in the fundamental rights jurisprudence from pre-
liberalization periods to the post-liberalization period, in other words, judicial 80s and
judicial 90s. In pre-liberalization era, the Indian Supreme Court was broadening the scope of
the fundamental right. The ambit of Articles 14, 19 and 21 of Indian Constitution was
continuously expanded by the Indian Supreme Court. The Indian courts introduced new
fundamental right as facets of Article 21. The standard of judicial review on the grounds of
fundamental right was strict. However this approach went through the transformation in post
liberalization era.

There was limited standard of review of government economic policies and the Indian Courts
were giving a lot of deference to the globalization policies. The module also analyzes the
role of the Indian Supreme Court in mapping an asymmetrical fundamental right terrain
during the post liberalization era. The Indian Supreme court during the post liberalization era
has marginalized the interest of certain stakeholders over other stake holders. This module
analyzes the shift in nature of Public Interest litigation from pre-liberalization periods to the
post-liberalization period. This module highlights that Public Interest Litigation which began
 COURSE: LAW & JUSTICE IN A
GLOBALIZING WORLD
NATIONAL LAW UNIVERSITY TOPIC: GLOBALIZATION AND ITS IMPACT
ON ADMINISTRATION OF JUSTICE AND
ODISHA ACCESS TO JUSTICE (WEEK 14)
INSTRUCTOR(S): PROF. RAO

as judicial revolution in 1970s and emancipated the poor in 1980s but was undermined to a
tool in 1990s which works against the objective that it initially sought to achieve.

CONSTITUTIONAL CHALLENGES TO GLOBALIZATION POLICES IN INDIA

The Indian Supreme Court developed a unique arsenal of right based framework of scrutiny
that was strengthened by a new era of public interest litigation. It aimed at rectifying
governance failure and human rights. Let us first examine the Indian Supreme Court’s
approach during theliberalization period, or before judicial 80s

INDIAN SUPREME COURT APPROACH TOWARDS FUNDAMENTAL RIGHTS AND

GLOBALIZATION POLICIES DURING JUDICIAL 80S

The first landmark case dealing with the fundamental right during this era was Maneka
Gandhi v Union of India. In this case, Indian Supreme Court held that Articles 14, 19 and 21
are not mutually exclusive of each other and are inter-related. The court further stated that
the scope of judicial review under Article 14, if read with Articles 19 and 21 illustrates the
normative view of the Indian judiciary concerning their participation in the judicial review of
developmental policies. Such interpretation also outlines the proper role of government in
framing such developmental policies. The court further added that the procedure established
by law under Article 21 must contain a substantive due process, that is, the procedure should
be fair and reasonable and not arbitrary, fanciful or oppressive.

Under this new interpretative approach, the Indian Supreme Court recognized a large number
of fundamental rights that were either based on Article 21, that is right to life and liberty, or
on freedoms under Article 19. The Indian Supreme Court further applied this non-
arbitrariness standard in cases such as “Ajay Hasia v. Khalid M. Sehravadi”, “R.D. Shetty v.
International Airports Authority”, and “D.S. Nakara v. Union of India” to review the
governmental policies. The Indian Supreme Court though during judicial 80s was broadening
the scope of fundamental rights.

INDIAN SUPREME COURT APPROACH TOWARDS FUNDAMENTAL RIGHTS AND

GLOBALIZATION POLICIES DURING POST LIBERALIZATION

 COURSE: LAW & JUSTICE IN A
GLOBALIZING WORLD
NATIONAL LAW UNIVERSITY TOPIC: GLOBALIZATION AND ITS IMPACT
ON ADMINISTRATION OF JUSTICE AND
ODISHA ACCESS TO JUSTICE (WEEK 14)
INSTRUCTOR(S): PROF. RAO

India liberalized its economy in the year 1991. The Congress government, under P.V.
NarasimhaRao, initiated a new dawn for developmental policies in India. These
developmental policies mainly included liberalization of government licensing and
privatization policies. The developmental policies initiated by government faced lot of
opposition and numerous challenges were made against these policies. The Indian Supreme
Court amended the fundamental rights jurisprudence in the realm of globalization policies.
The Indian Supreme Court adopted a deferential approach towards government economic
policies. There were three main aspect of the Indian Supreme Court decision making during
the post liberalization period. The three facets are as follows:

1. The Indian Supreme Court has redefined its roles in the realm of globalization policies.
It has given preference to certain norms while reviewing government economic
policies. These norms are regulatory independence, transparency and competitiveness.
The Indian Supreme Court has applied a limited and a lower standard of judicial
review. However simultaneously the Indian Supreme Court has adequately extended
the fundamental right as normative principle in order to review legality, propriety,
fairness of economic policies of government.
2. The new framework of fundamental rights developed by the Indian Supreme Court has
somewhere marginalized the interest of certain stakeholders while providing privileges
to other stake holders. For instance, the interest of labourer, farmers etc., has been
marginalized by restricting the scope of their fundamental rights. On the other hand the
interest of private players has been prioritized by deferring to unfair and arbitrary
economic policies.
3. The Indian Supreme Court has essentially redefined its functions as an adjudicator in
terrain of globalization and economic policies.
The first landmark case during his era was “Delhi Science Forum v. Union of India”. In this
case the National Telecom Policy was challenged. In this policy, the government initiated the
privatization of the telecom industry. The Indian Supreme Court gave deference to the
National Telecom Policy. The Indian Supreme Court stated the courts cannot determine the
merits of any economic policy. The proper forum for challenging the economic policy is the
parliament and the political process and not the courts. The Court further noted that the
 COURSE: LAW & JUSTICE IN A
GLOBALIZING WORLD
NATIONAL LAW UNIVERSITY TOPIC: GLOBALIZATION AND ITS IMPACT
ON ADMINISTRATION OF JUSTICE AND
ODISHA ACCESS TO JUSTICE (WEEK 14)
INSTRUCTOR(S): PROF. RAO

telecom sector is privatized in other developing countries as well. The Indian telecom sector
also need acceleration in order to remain in par with other communication system of other
international standards.

The court further held that interconnectivity is a need of an hour and it is only possible when
different communication systems across different countries are compatible with each other.
Therefore liberalized telecom policy is essential for the economic growth of India.
Arbitrariness under Article 14 was one of the major grounds of challenge against National
Telecom Policy in the present case. However the Indian Supreme Court in the present case
redefine standard of arbitrariness for reviewing governmental economic policy. The Indian
Supreme Court stated that a judicial review of an economic policy is only limited to three
grounds which are bad faith, illegality and irrationality. The Indian Supreme Court after
considering these grounds held that the National Telecom Policy was not arbitrary.

The other land mark case in which the Indian Supreme Court gave deference to economic
policy of government is “BALCO Employees Union v. Union of India (2001)”. In this case,
the government disinvestment in BALCO and sale of BALCO to the private players was
challenged. The Indian Supreme Court in this case reiterated a similar principle that high
deferential rational based scrutiny must be applied to review the economic policy of the
government. The court must verify whether an economic policy is arbitrary, unreasonable or
capricious or is in violation of any of the provision of the constitution. The Indian Supreme
Court after applying the above standard held that the disinvestment of BALCO was not
arbitrary or capricious. The other important aspect that was involved in this case was the
labours right to challenge disinvestment policy. However Indian Supreme Court in this case
restricted the constitutional rights of the labour and stated that the labours of BALCO have no
right pursuant to disinvestment under Article 14 or Article 16.

The Indian Supreme Court in the BALCO case refused to accept the constitutional rights of
labour to challenge disinvestment policy. The honourable court in this case emphasized that
the labours have enough statutory right under the shareholder agreement signed between the
Union of India and its strategic partner. Also there is the Industries Disputes Act, 1947 that
adjudicates disputes regarding labour rights. Though in this case, the Indian Supreme Court
 COURSE: LAW & JUSTICE IN A
GLOBALIZING WORLD
NATIONAL LAW UNIVERSITY TOPIC: GLOBALIZATION AND ITS IMPACT
ON ADMINISTRATION OF JUSTICE AND
ODISHA ACCESS TO JUSTICE (WEEK 14)
INSTRUCTOR(S): PROF. RAO

accepted that there are certain labour rights, however these rights are statutory and not
constitutional. The Indian Supreme Court then addressed the issue of Public Interest
Litigation. It stated that the Public Interest Litigations in the present era are constantly abused
by the litigants. Therefore Public Interest Litigation which emphasises on merits of policy
must not be reviewed. The Indian Supreme Court in the present case curtailed the scope of
Public Interest Litigation in private challenges to economic policies of the government.

The Indian Supreme Court applied the above mentioned principle in the latter cases and gave
deference to a number of Liberalization and Privatization policies. The Indian Supreme Court
in the landmark case of “Reliance Airport Developers Ltd. v. Airport Authority of India
(2006)” laid down a test to assess the fairness of developmental policies. The Indian Supreme
Court stated that business and accounting bench mark should be considered in order to assess
fairness and legality of a developmental scheme.

The Indian Supreme Court was highly deferential towards the government in the cases
involving challenges to government economic policy. “R.K. Garg v. Union of India (1981)”
clearly reflects Indian Supreme Court’s deferential attitude towards governmental economic
policies. In this case, certain special bearer bond was issued to deal with the issue of black
money. Under this scheme of the bearer bond, any person could convert his black money into
white money by investing into the bonds. The scheme of bonds had a clear policy that the
source of income that is used for buying bond would not be investigated. This scheme of
government was challenged as a violation of Article 14. The honourable court, in this case,
held that the court cannot decide the morality of any specific legislation. The honourable
court further stated that a deferential rational basis mode of the examination must be applied
while reviewing the economic policy.

SELF-ASSESSMENT QUESTIONS

1. What was the approach of Indian Supreme Court towards the fundamental rights jurisprudence
and developmental policies during the judicial 80s?
2. What were changes in approach of Indian Supreme Court towards the fundamental rights
jurisprudence and developmental policies during the post liberalization period?
 COURSE: LAW & JUSTICE IN A
GLOBALIZING WORLD
NATIONAL LAW UNIVERSITY TOPIC: GLOBALIZATION AND ITS IMPACT
ON ADMINISTRATION OF JUSTICE AND
ODISHA ACCESS TO JUSTICE (WEEK 14)
INSTRUCTOR(S): PROF. RAO

FURTHER READINGS

1. Manoj Mate, Globalization, Rights, and Judicial Review in the Supreme Court of India, 643
(2016).
2. Upendra Baxi, Taking Suffering Seriously, 127–28 (1985).
3. Manoj Mate, The Rise of Judicial Governance, Int’l L.J., 186–96 (2014)
4. David B. H. Denoon, Cycles in Indian Economic Liberalization, 31 Comp. Pol. 43, 52–55
(1988).