Disqualification by judges’ interest in litigation
T.R. Andhyarujina in THE HINDU
Judges should be made of sterner stuff and should not recuse themselves merely to preserve an appearance of non-bias when there is no real possibility of bias.
Four recent cases in the Supreme Court have raised the question of when a judge, who has either a pecuniary interest in the litigation or non-pecuniary connection with a party to the litigation, should recuse himself from a case.
In the first case, Justice S.H. Kapadia sitting on a bench of three judges, having disclosed his interest as a shareholder in Sterlite Industries, a party in the proceedings before him, and parties before him not objecting to his participating, heard the case and delivered a judgment. A leading vigilante lawyer later wrote in a popular periodical that Justice Kapadia had committed gross misconduct. This led to moving a contempt of court petition against him by another advocate.
In the second case, Justice R.V. Raveendran hearing the Reliance company cases at the very outset disclosed that he held shares in both companies, and upon both parties expressing no objection, proceeded to hear the case with other judges. After six days of hearing, Justice Raveendran recused himself from the case as he had discovered that his daughter was a lawyer in a firm which was doing legal work not connected with the litigation before him but for one of the Reliance companies. Consequently, the case has had to be reargued with a substitute Judge. The same day, Justice M. Katju recused himself in a part-heard matter as his wife held shares in a company which was a litigant in the case before the bench. On November 6, Justice Kapadia recused himself from a case in which the Sterlite Industries’ sister concern, Vedanta, was an applicant in the court.
The basic principle of judicial conduct is that a judge should not have an interest in the litigation before him which could give rise to an apprehension of his deciding a matter in favour of one of the parties. Bias by interest falls into two broad classes. First, where the judge has a pecuniary interest in the subject matter of litigation and, second, wherefrom his association with or interest in one of the parties the judge may be perceived to have a bias in favour of that party.
As regards a pecuniary interest of a judge in the case, it has become a hoary rule of judicial propriety that even the smallest interest will disqualify a judge automatically and the law will not allow any further enquiry whether his mind was actually biased by the pecuniary interest or not. The most frequent application of this rule is when the judge owns shares in a company which is a party in the case before him.
This rule came to be laid down in a celebrated case in 1852 of the House of Lords where the Court held that Lord Chancellor, Lord Cottenham, ought not to have decided a case in which he held the shares of a company which was a litigant before him. The Court observed: “No one can suppose that Lord Cottenham could be, in the remotest degree, influenced by the interest that he had in this concern; but it is of the last importance that the maxim, that no man is to be a judge in his own cause, should be held sacred. And that is not to be confined to a cause in which he is a party, but applies to a cause in which he has an interest.”
If this rule operates in modern conditions of corporate shareholding in its absolute rigour and severity, it would result in a large number of judges being disqualified and a considerable disruption of judicial work. In today’s times, as contrasted to the times of Lord Cottenhan, holding shares in joint stock companies is a routine investment by all and sundry, including judges. Should a judge recuse himself from a case even if his or his spouse’s shareholding is minimal or if his judgment would have a remote or no effect on the company? The high-sounding rule of judicial propriety that justice should not only be done but seen to be done often leads to the erroneous impression that it is more important that justice should appear to be done than it will, in fact, be done.
For these reasons, the modern view is that the rule in cases of financial interest of a judge should not be one of automatic disqualification but a rule of automatic disclosure to his colleagues on the bench and to parties of his financial interest. If the judge himself has no doubt that the holding of shares by him will have no influence on his participation in the case and if after a full disclosure of his shareholding the parties do not object to the judge hearing the case, the disqualification must be considered to be waived. This is the manner in which cases in which a judge has a shareholding in a company litigating before him have worked for over a century-and-a-half without any serious objection.
Where a judge’s interest is not pecuniary but of some direct or indirect association with one of the parties, there is no automatic disqualification. The question then is: whether there is, in the circumstances of the case taking all facts into consideration, a real likelihood of bias in the opinion of a reasonable person — that the judge might unfairly regard with favour or disfavour the case of the parties.
There could have been no real likelihood of bias in Justice Raveendran’s tenuous connection of his daughter’s employment with a legal firm which was not concerned with the case before him. But, apparently, he thought it better to play safe and recuse himself from the high publicity Reliance cases. The problem with such recusals out of abundant caution is that they are held out as precedents. In the U.S., the Justices have stated in their 1993 Statement of Recusal Policy: “We do not think it would serve the public interest to recuse ourselves, out of an excess of caution, whenever a relative is partner in the firm before us or acted as a lawyer at an earlier stage.”
After all, a judge by his oath is sworn to do justice. He cannot be suspected if, after the disclosure of his interest, the parties have not expressed a lack of confidence in him or there is no real likelihood of bias. Judges should be made of sterner stuff and should not recuse themselves merely to preserve an appearance of non-bias when there is no real possibility of bias.
The example of Justice Antonin Scalia of the U.S. Supreme Court is relevant. In 2003, Justice Scalia firmly declined to recuse himself even when one of the parties objected to his taking a case in which Vice-President Dick Cheney, with whom he had gone on a recent duck hunting holiday, was an official respondent. The objecting party cited the reporting of the newspaper with the largest circulation in the U.S. which had supported his objection. Justice Scalia dismissed the objection stating: “Since I do not believe my impartiality can reasonably be questioned, I do not think it would be proper for me to recuse … The people must have confidence in the integrity of the judge and that cannot exist in a system that assumes them to be corrupt by the slightest friendship or interest in an atmosphere which the press will be eager to find foot-faults.” He went on to say: “If it is reasonable to think that a Supreme Court Justice can be bought so cheap, the nation is in deeper trouble than I had imagined.”
(The writer is a Senior Advocate of the Supreme Court & former Solicitor-General of India.)