Lawfully Yours: The Realm of Business, Government and Law

By Anurag K. Agarwal

Have you ever wondered why the government is very often rebuked by the courts?
What can be the influencing power of big businesses on the government of the day?
How do the courts impact the businesses by their judgments?
What can a small change in government policy do to the entire business environment of the country?
Why contract enforcement still remains a sore point in India?
How does the bureaucracy play a vital link between the political masters and businesspersons?
What harm can a whimsical judge do to the legal environment and how can it dampen the morale of the people?

Lawfully Yours focuses on the interplay between business, government and law. It is from the perspective of an observer interested primarily in doing business legally and ethically as profit-making ought to be incidental and not the sole goal of doing business. It reveals how and why the external forces of the government and the law impact a businessperson's decision-making. The subjects discussed include business, judiciary, legal system, politics, world trade and infrastructure. Devoid of technical jargon, it uses simple language to drive home important and interesting concepts and points for the reader.

• Language: English
• Publisher: Bloomsbury Publishing
• Release date: Mar 28, 2021
• ISBN: 9789389165296

Book preview

LAWFULLY YOURS

LAWFULLY YOURS

The Realm of Business, Government and Law

Anurag K. Agarwal

BLOOMSBURY INDIA

Bloomsbury Publishing India Pvt. Ltd

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BLOOMSBURY, BLOOMSBURY INDIA and the Diana logo are trademarks of

Bloomsbury Publishing Plc

First published in India 2021

This edition published in 2020

Copyright © Anurag K. Agarwal 2020

Anurag K. Agarwal has asserted his right under the Indian Copyright Act to be identified as the Author of this work

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To

My teacher and mentor,

Late Professor L. N. Mathur,

Professor Emeritus,

Faculty of Law,

Lucknow University

CONTENTS

Preface and Acknowledgements

Introduction

1The Rule of Law, the Constitution and Democracy

2Judicial Activism, the Judiciary and Lawyers

3Politicians

4Bureaucracy

5Health, Education and the Environment

6Safety First—Avoiding Accidents

7A Global Village: International Politics and Business

8The Indian Identity: Domestic Politics and Business

9Sharing and Inclusivity

10 Compliance and Non-Confrontation

Epilogue

Note

Glossary

Index

About the Author

PREFACE AND ACKNOWLEDGEMENTS

I dedicate this book to my teacher and mentor, late Professor L. N. Mathur, Professor Emeritus, Faculty of Law, Lucknow University. Along with a mastery over almost all law subjects—tort, constitution, environment, family, jurisprudence, etc.—he had an excellent command over the English language. Like a walking dictionary and thesaurus, he enjoyed explaining the finer aspects of close-meaning words. He studied at Osgoode Hall Law School more than five decades ago, inspired tens of thousands of students to be possibility thinkers with a human touch and I am blessed to be one of his few students for whom the doors of his house were always open. Madam, his wife and a passionate mathematics teacher, has always been so very graceful and generous. Professor Mathur motivated me to apply to Harvard. Always immaculately dressed, he was extremely soft-spoken, and would, incredibly, establish a rapport instantaneously with the audience. Above all, he was a thorough gentleman. His son, Sanjiv, a senior government officer, is a true reflection of his father. The apple doesn’t fall far from the tree.

The book is about the relationship between business, government and law, and brings together research of more than twenty years. It is the result of my writings of more than two decades and teaching a very popular subject, Business Government and Law, to the students of the Indian Institute of Management Ahmedabad (IIMA) for about fifteen years. A book like this has been demanded for a while now by my students and other senior executives who come to IIMA for executive training. I have been able to start working on its manuscript only in the recent past. It is from the perspective of an observer interested primarily in doing business legally and ethically, and for whom profit-making is incidental and not the sole goal of doing business. This book highlights how and why the external forces of government and law impact his decision-making.

The themes chiefly discussed are business, the judiciary, the legal system, politics, world trade, infrastructure, etc. It is a book which brings together the key elements of business, government and law and thus highlights their interplay for the benefit of business executives and anyone and everyone dealing with the government and the law, from the business perspective. It is devoid of technical jargon and uses simple language to drive home important and interesting concepts and points for the reader, who is looking for a book with a good understanding of these issues, in a short, story-like manner.

The book starts with an interesting story, ‘The Scooter Ride’, in the Introduction. This story weaves together different aspects of business, government, law, trends, choices, individual perceptions and aspirations to highlight the fact that life goes on and changes occur, sometimes with active and positive government intervention, and at times despite the inertness of the government of the day. Businesses usually are willing to take a risk; however, they choose to remain on the right side of the law. But, ultimately, in a democracy, it is the aspirations of the people that determine the direction in which businesses move.

My endeavour is for the business executive to easily understand the chemistry between business, government and law, which changes from time to time and place to place. How things evolve in this realm is an interesting field of study and keen observers provide valuable takeaways from the perspective of business ethics and profit-making. A sharp business executive will definitely get inspired to develop this understanding by regularly following developments in this realm and trying to analyse the events and issues from business and legal perspectives. Being a democracy, India provides immense advantages, and its positive impact—on most occasions—on the business environment is to be appreciated. Playing the game according to the rules and thriving in such conditions is not simply a science; it is an art, which very few are able to master.

For decision-making where subjectivity is involved, reasonableness is essential. Practical wisdom plays a major role in making decisions that are rooted in ground realities and are not devoid of common sense. Many a time it has been experienced that in the zeal to follow an ideal, though unrealistic approach, individuals—in whatever capacity they are working—tend to be most impractical and their decisions wreak havoc on the people bound by those decisions. It is, therefore, most effective to understand the real issues in a practical sense and make decisions accordingly. Exercise of discretion by individuals, particularly in high-powered positions, needs to done with circumspection. However, too much of a delay in analysis and discussion may result in inaction. Thus, identifying the right moment for decision-making and, thereafter, execution, is the key to success in practical life. Business executives responsible for decisions and actions quite often require clarity—at least in their minds if they are not able to convince others—as to what needs to be done, and when. This is a dynamic exercise and demands agility and alacrity.

How keeping a tab on recent developments can help a person in any field can best be understood by thinking like a writer who has to regularly write about contemporary issues from different perspectives. I thank Mr Uttam Sengupta, who was the resident editor of The Times of India, Lucknow in the late 1990s, when I had started writing a weekly column, which he named ‘Lawfully Yours’. He gave me the confidence to explore, experiment and write freely about different issues, mainly from the legal perspective. As an honest and bold editor, he stood like a rock with me whenever there were any issues regarding the legality or propriety of the columns. It was his idea to write about ticklish legal issues in simple language, devoid of legal jargon, for the common reader. I wrote for several years for the Lucknow edition of the newspaper before leaving for Harvard.

Thereafter, I wrote a column with the same name for about ten years for DNA, Ahmedabad, as I had joined IIMA as faculty. The weekly column inspired me to start an elective course—Business, Government and Law—at the institute, which has been very well received by the students. Hence, the title of this book—Lawfully Yours: The Realm of Business, Government and Law—is an amalgam of both.

I would like to thank Praveen Tiwari and the entire team at Bloomsbury for review and comments.

My wife, Manjari, has always inspired me to write the column regularly and she has been the pillar of strength in making it possible even during our family vacation trips. It is because of her absolute support that I have rarely missed submitting it every week. My elder son, Anant, a law student, has contributed with his thought-provoking questions, which compelled me to think and research for their plausible explanations. He, sometimes, also helped me in drafting and typing. It has been a great learning for me in explaining to my younger son, Akshat, a student of class VIII, the basics of government, courts, legislature, society, etc. in simple language. His queries made me appreciate the confusion a layperson can have. I am highly thankful to my family.

29 April 2020

Anurag K. Agarwal

Indian Institute of Management Ahmedabad (IIMA)

Introduction

The realm of business, government and law knows no bounds. Businesses aim to make a decent profit while adding value to societal well-being. The issues of safety, sustainability, pollution control, urban decongestion and commitment to the rule of law require the government to play a proactive role in formulating policies that lead to a conducive business environment. The role of law in providing new dimensions to the judicial system has to be in sync with the changing aspirations of the people. Small efforts in the right direction can make a big difference, as tiny drops of water make the mighty ocean.

In the initial decade after India became independent, it seemed impossible to keep the country together and, at the same time, work towards the cherished principles enshrined in the Constitution of India—mainly ‘equality’, as there were huge differences in the society. Besides religion, caste and so many other differences, the insurmountable gap appeared to be economic, which was very much evident in the two clear-cut classes of rich and poor, with hardly any middle class in between. With the country’s resources being extremely limited, it was not possible to provide for everyone—mainly the extremely poor, illiterate, unskilled, malnourished, and because of these reasons, highly vulnerable—in equal measure. To create opportunities for everyone, in the same way, was also a lofty idea. Under such conditions, planning for easy mobility for the middle class and the poor was obviously not a high priority. Despite all the constraints, how urban mobility has been positively transformed by scooters tells us a lot about the evolutionary environment of business, government and law over the decades.

Let us go for a scooter ride!

The Scooter Ride

Slap! Seema has just slapped a roadside Romeo waiting at a bus stop, who commented that he would not mind dying by coming in front of her scooter. Seema, a multi-millionaire heiress to a business empire, left her palatial bungalow a few minutes ago for a joyride; and the vehicle she has chosen is not one of her several expensive cars, but a scooter—the Lambretta. Ashok, a budding press photographer, captures this slapping incident in his camera. An argument breaks out between Seema and Ashok regarding the legality of the photograph—privacy, the incident occurring in a public place, taking the law into one’s own hands, public interest, etc. This is one of the many interesting scenes from the joyful 1963 movie Bluff Master, starring Shammi Kapoor as Ashok and Saira Banu as Seema. This was their first meeting, a very short one, which ended with her photograph, the very next morning, in the newspaper that her family owned. One can understand several things about the realm of business, government and law from this scene. During the scooter ride, Saira Banu did not use a helmet, as helmets were not mandatory during those days. The legal and regulatory framework had not developed much for scooter riders.

Had she been using a helmet, it would have been difficult, or almost impossible, to hear what the roadside Romeo had said. Things would have been different and the story could not have flowed further because of this incident. Clicking someone’s photograph without the individual’s consent is surely an infringement of one’s privacy; however, when an incident occurs at a public place—a bus stop in this case—and the matter requires public attention, the individual’s privacy takes a back seat. This is what Shammi Kapoor had said while defending his clicking the photograph. Saira Banu could have lodged a complaint with the police rather than slapping the roadside Romeo, but her action of slapping gets legal protection under the provision of actions done due to grave and sudden provocation under the Indian Penal Code, 1860.

Vespa

Saira Banu’s scooter ride, in all probability, must have been inspired by Audrey Hepburn’s ride on a Vespa scooter in her debut film, Roman Holiday, released in 1953, with Gregory Peck in the lead as a reporter. Hepburn had played the role of a princess who had run away from the palace and was living the life of a commoner. Later in the movie, Peck had ridden the Vespa with Hepburn riding pillion. The scooter-ride scenes became so popular and famous that Vespa gained a lot by using the movie as a wonderful advertising platform. Hotels in Rome, till date, arrange Roman Holiday scooter-ride tours, and the original scooter used in the movie was auctioned in 2017 for more than a quarter of a million dollars.¹

The Vespa scooter was designed in 1946 by Corradino D’Ascanio, a great Italian aeronautical engineer who had worked on several designs of the helicopter and later, while working for Italian aviation company Agusta, designed a small training helicopter in 1969. D’Ascanio was working for the Italian machinery-works company Innocenti when there was a requirement, after the Second World War, for designing a scooter which could be a substitute for the ubiquitous motorcycle by being lighter, affordable, could be used by men and women—especially women in skirts, which was not possible with a motorcycle—with ease, could also protect the rider from dirt and mud and could let the rider change the wheel in case of a punctured tyre. Ferdinando Innocenti, the founder of the company, was already toying with the design of the Lambretta even before the war and wanted to take it further.

D’Ascanio was able to come up with the Vespa—the name inspired by the Italian word for wasp which the scooter’s front design resembled—which was perfectly designed to fulfil all these requirements. It was simply wonderful, but creative differences with Ferdinando forced D’Ascanio to leave Innocenti and join Enrico Piaggio, the owner of Piaggio. The company was into aircraft production at the beginning of the Second World War, but by the end of the War, Piaggio’s factory was severely damaged with no capacity for aircraft production. At that time, D’Ascanio brought Enrico the design of Vespa, and he simply lapped it up. It was a win-win situation for both of them and history was going to be created: Vespa was launched in 1946 by Piaggio.

Lambretta

Innocenti launched the Lambretta in 1947. The scooter has been named after the Lambrate district in Milan where its factory was located. Lambrate itself is named after the river Lambro, a tributary of the Italian river Po, which flows through the district Lambrate. The Lambretta was all the rage in Europe and was also exported to the rest of the world. There were licensing agreements with different companies in several countries such as France, Germany, Spain, India, Taiwan, Brazil, Colombia, Argentina, etc. Presently, there are clubs of Lambretta lovers globally, as well as a Lambretta scooter museum in Somerset, England. In the delightful movie Come September, released in 1961, there is a scene where the main leads, Rock Hudson and Gina Lollobrigida, along with friends, are going for a joyride on Lambretta scooters. Interestingly, the theme music of the film has been very popular and is used by music bands all over India quite often in parties and marriage processions. It was also used for the song ‘Nazrein Mili Dil Dhadka’, picturised on Madhuri Dixit in the 1995 film Raja. Come September was also the inspiration behind the Shammi Kapoor and Sharmila Tagore–starrer, Kashmir Ki Kali.²

Coming back to the Lambretta, it had already gained ground in the world in the 1950s for the same reasons as Vespa—a good substitute for cars, a vehicle which can be used in poor infrastructure immediately after the Second World War, a vehicle which can be used with ease by the ladies, and above all, a compact, neat-looking family vehicle for urban mobility. Within a period of about two decades, conditions had improved in most of the European countries and because of better affordability and availability of cars, Innocenti turned its focus on countries, like India, which were looking forward to industrialisation, further urbanisation, a rising middle class and a huge population—which determined the size of the market.

Automobile Products of India (API)

Automobile Products of India (API) was founded by the legendary cricket enthusiast and patron, M. A. Chidambaram—the Chennai cricket stadium is named in his honour—and had got a license from Innocenti for assembling low-powered, 48-cc engine Lambretta scooters, or, more appropriately called, mopeds. Later, in the 1960s, API produced and sold slightly more powerful scooters and, finally, the 150-cc engine scooter under the name Lambretta, which was the equivalent of the Lambretta Series 2 model—very popular in Europe during the 1960s. Thereafter, the name was changed from Lambretta to Lamby due to trademark issues. A slightly more powerful scooter with a 175-cc engine was sold as MAC 175, where MAC, obviously, stood for M. A. Chidambaram.

The chronological proximity of Come September (1961) to Bluff Master (1963) perhaps explains why the Lambretta was used in the Indian movie rather than the Vespa—seen in the 1953 release, Roman Holiday. Banu herself was no stranger to the scooter’s popularity in Europe, having spent the 1950s in England and at finishing school in Switzerland. Like other girls her age studying in Europe during that time, she might have been fascinated by the 1953 Roman Holiday scooter scene. It was a craze among young girls and ladies in Europe to learn as to how to ride a scooter, something which had not yet caught the fancy of their Indian counterparts. It took ten years—when Bluff Master was released—for scooters to be used as a fashionable and trendy statement by the moviemakers in India, and Saira Banu had no qualms about riding a scooter, thanks to her European education, training and exposure.

Another decade passed and it was felt by the government that relying on public transport, which had not developed much in most of the cities and towns, was not going to work. There was the need for realistic mobility solutions for a burgeoning middle class—a rapidly growing section of the population. They could not afford a car and found a bicycle to be either too cumbersome (because of increasing distances) or beneath their social status—deeply ‘infra dig’—as most of these individuals were reasonably well educated and employed in white-collar jobs. This situation created a huge demand for scooters. Businesses in India were not ready for producing scooters in the required numbers, despite the fact that a ‘scooter ride’ had become trendy and fashionable, and, to a certain extent, a status symbol among the youngsters. The government had not given due attention to making it easier to produce scooters in India. Hence, there was a huge gap between the supply of scooters and their ever-rising demand for urban mobility.

Scooters India Limited (SIL)

In the late 1960s, with Indira Gandhi as the prime minister, the mood in the country tended more towards socialistic ideas and private initiatives for creating wealth were somehow considered to be evil. This led to more and more nationalisation, with the private banks also being nationalised; the move was to let the government have a finger in every pie. The government in India decided to establish a state-owned enterprise for producing scooters. Thus, Scooters India Limited (SIL) was established in Lucknow, the capital of Uttar Pradesh, in 1972. By this time, Vespa had become a clear global leader by pushing Lambretta back. Innocenti, the company making