[Government supporters accuse the court of engaging in a partisan witch hunt driven by the rivalry between Chief Justice Chaudhry and Mr. Zardari. Such criticism has found greater resonance in recent weeks, even among formerly staunch supporters of the court’s authority.]
By Declan Walsh And Salman Masood
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S. Sabawoon/European Pressphoto Agency
Senior lawyers said that Prime Minister Raja Pervez
Ashraf could be ousted soon
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A five-member bench ordered Mr. Ashraf to appear before the court on Aug. 27 to explain why his government had refused to revive a corruption investigation into President Asif Ali Zardari’s finances in Switzerland .
The order was identical to one issued against the previous prime minister, Yousaf Raza Gilani, whom the court fired on June 19.
The move on Wednesday was the latest twist in an eight-month battle between the Supreme Court and Mr. Zardari’s government. Senior lawyers said that Mr. Ashraf was now likely to be charged with contempt of court, opening the way for his ouster from office as early as next month.
“It is a step in the same direction,” said Salman Akram Raja, a Supreme Court lawyer. “The court has to follow the same course. There is nothing else that it can do.”
Analysts said that Mr. Ashraf’s dismissal would be unlikely to topple Mr. Zardari’s government, which has a majority in Parliament, but that it would set off new political turmoil that might result in earlier elections, which are to take place by June 2013.
The court wants the government to write to the Swiss authorities and prompt them to reopen a long-dormant investigation into Mr. Zardari’s finances dating to the 1990s. Officials from the governing party maintain that Mr. Zardari, as head of state, has immunity from prosecution.
At the heart of the argument is a bitter three-year-old rivalry between Mr. Zardari and Chief Justice Iftikhar Muhammad Chaudhry. There is little sign that either side will back down.
The notice issued Wednesday orders Mr. Ashraf, a former minister for water and power, to explain why he should not be charged with contempt — a formality that usually precedes formal charges.
The justices refused a government request to delay the proceedings until September.
Senior lawyers said the court was likely to put Mr. Ashraf on trial soon and to reach a decision far more rapidly than it did with Mr. Gilani, whose fate hung in the balance for several months.
Mr. Raja, the lawyer, said that the government could try to stall but that “short of writing to the Swiss officials, as has been directed by the court, such tactics will just play out in a week or two.”
Government supporters accuse the court of engaging in a partisan witch hunt driven by the rivalry between Chief Justice Chaudhry and Mr. Zardari. Such criticism has found greater resonance in recent weeks, even among formerly staunch supporters of the court’s authority.
In an interview with the BBC broadcast on Tuesday, Aitzaz Ahsan, one of the country’s most prominent lawyers, said the court had become “too powerful.”
“It has at times overstepped its limits,” he said, adding later that “the activism of the court is one-sided and is not evenhanded.”
Shamila N. Chaudhary of the Eurasia Group, a consulting firm, said that while Mr. Ashraf’s ouster would not bring down the government, “it would still leave Zardari vulnerable to other Supreme Court actions such as the creation of an ‘independent’ commission that could write the Swiss letter itself.”
@ The NewYork Times
[In 1998, Reliance Industries, one of India's largest conglomerates, obtained a court injunction against the publication of "The Polyester Prince," a book about the rise of the company's founder Dhirubhai Ambani. Last year, an education company sued the magazine The Caravan, and secured a court order requiring it to remove an unflattering profile of the firm and its founder, Arindam Chaudhuri, from its Web site.]
By Vikas Bajaj
MUMBAI, India - It is the business version of "he said, she said."
One of India's fastest-growing financial exchanges is suing a prominent economist claiming defamation. But Ajay Shah, the economist, says the Multi Commodity Exchange of India is just using legal means to quiet a critic.
The case has raised fresh concerns about colonial-era laws that give significant power to policy makers, companies and individuals to muzzle critics and those they consider offensive.
Unlike libel law in the United States, defamation in India can be treated as either a civil or criminal matter. Those found guilty can be fined and sentenced to up to two years in prison. And such lawsuits can take years to resolve because the Indian courts are backlogged with millions of cases.
"It has become a tool for intimidation," said Karuna Nundy, a lawyer who has defended defamation cases but is not involved in Mr. Shah's cases.
The lawsuits follow a long tradition of Indian companies using defamation laws to punish journalists when their reputations have been attacked or to pre-empt attacks.
In 1998, Reliance Industries, one of India's largest conglomerates, obtained a court injunction against the publication of "The Polyester Prince," a book about the rise of the company's founder Dhirubhai Ambani. Last year, an education company sued the magazine The Caravan, and secured a court order requiring it to remove an unflattering profile of the firm and its founder, Arindam Chaudhuri, from its Web site.
Mr. Shah and the Multi Commodity Exchange of India, or MCX, are heavyweights in Indian finance.
Mr. Shah, a former consultant to the Finance Ministry, is often asked by the government for advice, and his work is read globally by analysts and policy makers who are interested in the Indian economy. MCX is the nation's dominant exchange for commodity derivatives, and its founder, Jignesh Shah, no relation, is considered one of the country's most successful entrepreneurs.
Their complaints go back several years.
In 2009, Mr. Shah, the economist, wrote a column titled "The 'X' Factor in Regulation" in The Financial Express newspaper. He argued that the Forward Markets Commission, MCX's primary regulator, had improperly helped the company by ruling against one of its competitors in a regulatory matter over the cost of trading certain derivative contracts.
"When regulation is weak, this encourages the players who have strengths in fixing the regulatory system to their own advantage," Mr. Shah wrote in the column.
After it was published, MCX filed suit in Mumbai, arguing that Mr. Shah had implied that the company was doing business in "an illegal and illegitimate manner." The company added that Mr. Shah had done so to jeopardize MCX's plans for an initial public offering, which took place early this year.
MCX, in particular, took issue with Mr. Shah's ties to a rival exchange. The company argued that Mr. Shah was biased since he was a former board member at the National Commodity and Derivatives Exchange, the competitor cited in the article.
MCX added that a firm owned by Mr. Shah's family sells data to that exchange. Mr. Shah also sits on the board of a company that clears stock trades on National Stock Exchange of India, which is a big shareholder in the National Commodity exchange.
MCX officials declined requests for comment, citing the continuing legal cases. But the exchange has offered its position in legal filings and a newspaper ad.
"He was attempting to give a simple regulatory noncompliance issue by one Exchange a colour of competition," MCX said in the ad. "Normally academicians do not hold any briefs when they give their views publicly as intellectuals and if they do so, propriety demands that they divulge such facts which Ajay Shah failed to do."
Mr. Shah countered that the lawsuits were meant to squelch criticism. He acknowledged that a company owned by his family, the Center for Monitoring Indian Economy, provides data to the National Commodity exchange. But he added that it provides data to many players in Indian finance, including the Reserve Bank of India, a frequent target of his criticism.
"The way India works is once a few cases like these are opened, a lot of people are reluctant to write about the issue," he said, in an interview. "In the future, you will be very, very careful of taking on MCX."
Both sides have raised the legal stakes since the initial case was filed.
In 2010, Mr. Shah tried to have the case dismissed by higher courts, but they ruled that he must stand trial in Mumbai. Last year, MCX filed two more lawsuits against Mr. Shah. In them, the exchange argued he defamed it by listing it among a group of companies that were dealt with in a tough manner by an Indian securities regulator whom Mr. Shah finds admirable.
MCX filed the cases in Kolhapur, 235 miles south of Mumbai, and Surat, 180 miles north of Mumbai. Mr. Shah argues that those cities were chosen to make it difficult for him to defend himself because he lives in Mumbai. The company, which is also based in Mumbai, has argued the cases were filed in the cities where executives first read and heard Mr. Shah's comments.
The suits have reignited calls to reform the country's laws, which date to the 19th century.
The Editors Guild of India has been pushing for an amendment that would classify defamation as only a civil offense. Some free speech specialists have argued that the government and publishers should strengthen quasi-judicial Press Council of India to resolve most complaints against the media, so that few cases end up in courts.
In part, they are pushing to speed up the resolution of disputes. Defamation suits, like most other cases in India, can languish for years. Indian courts have a backlog of 30 million cases, and more than a quarter of them are at least five years old, according to the government.
"By the time the case is resolved in Indian courts, the person or company has already been put through inconvenience," said Vijayendra Pratap Singh, a partner at one of India's largest corporate law firms, Amarchand & Mangaldas & Suresh A. Shroff.
