Lessons from Rajat Gupta case

By Cleofato A Coutinho
29 October 2012 11:09 IST

It is interesting how our legal system works as against the United States. Over the past few years our country has seen scandals and scams and various constitutional functionaries including cabinet ministers and chief ministers have quit offices after their continued functioning became untenable. But each one of them has affirmed their faith in our legal system and courts in particular. The faith comes from the fact that it would take decades before the highest court rules on the culpability or otherwise of our leaders who are accused of having frittered away national wealth and made polices for private gain. Whether it is Lalu Yadav, Suresh Kalmadi, D. Raja, B. S. Yedurappa or Nitin Gadkari they all know that by the time the system catches up with them public memory shall fade away. Do any of us remember the former Himachal Chief Minister and Telecom Minister Sukh Ram?

Rajat Gupta, the former Mckinsey Chief and Goldman Sachs Director had surrendered to CBI on Diwali last year. This year on Dussehera day the Wall Street Titan was sentenced after being held guilty on charge of insider trading. The actual offence was tipping another financial caper and his hedge fund manager cum friend Rajaratnam about Goldman Sachs’ decisions at the height of 2008 financial crises (by our standards of criminality it was like a case of traffic violation).

Rajartanam made a wind fall based on the information tipped. Rajat Gupta’s crime was the breach of its fiduciary duty of confidentially to Goldman Sachs of which he was a director. Judge Rakoff who handed down the sentence of two years in prison and 5 million dollars in fine opined “he is a Good man. History of this country and of the world is full of examples of Good men who do bad things”.

The message is loud and clear - “bad things will be punished”.  Anybody who is somebody wanted the   Indian-American icon to be forgiven for the error of judgment for his otherwise humanitarian approach, but the society which swears by the rule of law understood it well that when you get caught you have to be punished “… punishment is necessary to reaffirm society’s need to see justice triumph” that is how the judge Rakoff put it. In an offence of what is now commonly referred to as ‘insider trading’ which the United States views very seriously and as Indian born attorney Preet Bharara put in “we hope that others who might consider breaking the security laws will take heed from this sad occasion and choose not to follow in Mr. Gupta’s footsteps”.

On the same day as Rajat Sharma gets sentenced, our chief minister tells us “…even recovery of electricity bill takes 15 to 20 years because government has to follow the system…”. Recoveries are civil matters and if civil matters would take 15 to 20 years for the state, one can imagine the abysmal situation on the criminal side. That  is the situation   every wrong doer in this country seeks to cash on. The offenders including those who are supposed to have looted our state to the tune of Rs. 35,000/- crore  (according to Shah Commission)have vested interest in our legal system.

No doubt we follow principles of civilized criminal jurisprudence of which the biggest principle being proving a criminal guilty beyond doubt and that he is innocent till proven guilty. All civilized countries follow that civilized principle. While  out system works at a pace that time works to the advantage of the offender and acts as a great healer, other countries have shown speedy trial as triumph of justice. Even dedicated fast track courts have been unable to reaffirm society “s thirst for  justice.  Legal reform, judicial reforms, speedy justice  has been spoken for a long long time.

Amidst the media blitzkrieg over the Rajat Gupta sentence in India while the message of punishment for the bad deed of a good man got highlighted, but the swiftness with which Rajat Gupta was tried and sentence did not catch attention in this country where offenders enjoy the fruits of delay.

While we lament the slow approach of our justice delivery system, to my mind two serious issues stand out (1) is we do not take statements on oath seriously, we don’t mind lying on oath. Would Bill Clinton admit to any wrong doing had he been one of us? Or what would Hansie Cronie make an admission   had he been an Indian Cricket Star? (2) Even

the courts do not trust the investigating agencies as for a long time they are not known to do honest investigation, due to which even during the British period a statement recorded before a police officer was made inadmissible in evidence.

What nailed Rajat Gupta is the phone tapped conversations between him and Rajatratnam.  Here in India proving tapped conversations itself would take years since the state and the prosecution would have to prove every bit of it by standard of proof beyond doubt since we are not known to admit anything incriminating in court.

Our legal system has to learn a lot from the Rajat Gupta case. We have to develop the culture of speedy judicial if rule of law  has to prevail. 


Disclaimer: Views expressed above are the author's own.

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Cleofato A Coutinho

Cleofato Almeida Coutinho is a senior lawyer and one of the constitutional expert in Goa. A member of Law Commission of Goa, he also teaches at Kare College of Law in Madgao.

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