Recently, the Supreme Court bench led by the Chief Justice of India, indicated orally that Mayawati, well known politician from Uttar Pradesh, responsible for beautification of Lucknow and elsewhere by erecting numerous statues of elephants, could be potentially held liable for such constructions and may even be made to pay back the money as restitution to the Government Treasury.
These observations were made by the Supreme Court while hearing a public interest litigation filed against illegal construction of statues across Uttar Pradesh by the erstwhile BSP Government under the leadership of Mayawati. There is no gainsaying that such oral observations are bound to have significant impact on the law, politics, accountability and transparency in India. In this context, this article analyses implications and possible normative basis for such claim.
At the outset, we need to set the basic facts in perspective to understand the implications of such observations. There is no dispute that the Government should have entered into a contract for construction, when such proposal to build statues was conceptualised. Accordingly, the contracts stand executed and the builder is paid for his services. On these premises, we may observe that the first implication of the Court’s observation is that the completed contracts would be reopened to decide the issue of reimbursement/recoupment from Mayawati.
Second implication is that because of the fact that the public interest litigant does not have a remedy under Contract law, he was drawn to the extraordinary jurisdiction before the Supreme Court. Third implication questions the legality of the Constitutional Court to consider creation of a legal basis for readjustments of value transfers in commercial contracts.
Fourth implication is that such readjustments necessarily affect freedom to contract, with public authority, enshrined under Article 299 of the Indian Constitution.
In our considered opinion, answers to these questions are available under what is called as ‘law of restitution’, which allows for reimbursement or recoupment of money on varied grounds such as total failure of consideration, illegal contracts or mistake of law etc. Although traces of this law are found scattered in India, yet no Court has given full recognition to this law. We may point out that an analysis of the case on orthodox grounds of quasi-contracts, without the involvement of unjust enrichment, would lead to incomplete and absurd results mandating Courts to consider ‘law of restitution’.
In this context we are reminded of Lord Wright who once said, “It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefits.
In the case of public authorities lacking capacity to execute contracts, such incapacity may act as a ground of restitution for policy consideration of protecting misuse of public money.
It well known that the Government handles public exchequer on a basis of trust. This trust may form the normative basis for restoration of money in such cases. Article 266 (3) of the Constitution, authorises lawful use of public money from the consolidated fund of States, which can be traced to Article 4 of Bill of Rights, 1689 (United Kingdom). Having said so, the Supreme Court may encounter bigger problems in this approach in drawing a fine line between ‘misappropriation’ and ‘misutilisation’. In the past whenever a problem of misutilisation of money by a public authority has cropped up, the Courts are generally hesitant to step in and substitute their wisdom for that of the Executive, considering that it is difficult to come up with a judicial test for determination of ‘mis-utility’. In this context the Supreme Court needs to consider this question and lay down a well-crafted boundary, as the contrary will open the floodgates for litigations, which could bring Governments to a grinding halt.
This case raises much deeper concerns to classify the same as public law or private law remedies. Considering the fact that recognition of ground for restitution from Mayawati would imply that she will step into the shoes of Government as against the builders under a commercial construction contract. On a comparative study, there is meagre support from English, Australian or Canadian cases for a claim by public against an official on the basis of Colure Officii (coloured use of authority) in a public law context. A civil action would be appropriate where there is a private law right to restitution based on duress, mistake or incapacity. Moreover, an apprehension of opening floodgates before constitutional courts, could justify a view to classify this issue as a simple private law claim. Having said that, the uniqueness of this case in involving misuse of public funds by constitutional functionaries from consolidated fund of States, points to a prima facie normative justification based on public law.
The central theme of restitution is that there should be an unjust enrichment for a party to seek restitution against them. In the present case, the court needs to address whether Mayawati unjustly enriched herself and to what extent? In order to answer these questions, the Court should look at whether law authorised her to build such structures and utilise the public money thereof. Moreover, analysis as to the quantum of unjust enrichment that accrued to Mayawati also poses some tricky questions as the Statues do add, pro tanto, aesthetic value to the urban landscape. In such a situation the subjective benefit to Mayawati needs to be carefully determined.
Moreover, technical interpretation of ‘benefit’ and ‘loss’ is hard to apply in this case and the unjust enrichment framework may create complexities as the basic legal tools are absent under Indian legal framework. This case challenges the Supreme Court to come up with a new rational doctrine to explain the restitution in context of public authorities and, we can be rest assured that the apex court is mindful of its role as as sentinel public law matters and is known to protect the public against corrupt practices, by its innovative application of high normative principles. At this point, what we can do is to reflect on the implication of oral stance taken by the Chief justice and caution the public functionaries to be cautious in their public expenditure on statues from next time!
(Sughosh Subramanyam and Sanskruti Samal are, respectively, a practising advocate and a research assistant at the Supreme Court of India.)