The Hindu Business Line : Uphaar verdict: Very uplifting

Bad laws will kill people and cripple the economy, as will the indifferent dispensation of good laws. If one verdict can change the way India conducts its economy, treats its businesses, treats its citizens, and engages in litigation and regulation, it is the verdict in the Uphaar Cinema case, says G. Ramachandran.

The Uphaar Cinema in New Delhi was devastated by callousness. But the judiciary has delivered a reassuring verdict, as much for the victims' kin as to the outside world.

"This is really in my view not only a civic issue but also a civilisational issue. We commit a large number of crimes by omission. This is an omission. Can we find any other (place) which is disorderly, disorganised, chaotic, without any regard for rules and regulations? It shows that we are a dehumanised civilisation. We are a civilisation with a closed mind. When we are celebrating the Fiftieth Anniversary of our Independence, let us have a soul searching. How many crimes we have committed without realising that we are committing them? When the man becomes absolutely blind in his mind, he is almost dead. Our minds and eyes have become dead. That is why, all these tragedies are happening."

— Mr Jagmohan, member of the Lok Sabha from Delhi, discussion on points arising out of the answer given by the Minister of Home Affairs to starred question No. 32 (July 29, 1997) in the Eleventh Lok Sabha on August 6, 1997 regarding the fire incident in Uphaar Cinema in New Delhi.

WE CAN look Mr Jagmohan in his eye and say with honesty that many souls have been searched since his armour-piercing remarks about a week before the nation's golden jubilee Independence Day. We can claim with earnestness that many Indians have bravely confronted three important truths.

The first truth is that civilisation and nationhood are both outcomes of the rule of law. Laws specify what is right because humans have made these laws with the knowledge of what is useful, harmful and harmless. The second truth is that bad laws and the indifferent or heartless dispensation of good laws kill people through fear, humiliation, poverty by default, inactivity, poverty by choice, starvation and disease. The third truth is that rule-based governance reinforces the purpose of nationhood and promotes the interests of people.

If the human race did not know what is right, what is wrong, what is harmful and what is harmless to all people, it would have destroyed itself soon after its emergence or at any stage of its evolution. That it has not is proof that humans are capable of great discernment, which is a principal requirement for any civilisation to evolve.

India is a young country; its building blocks of political governance, economic policymaking and dispensation of justice are of recent origin. But India is an old civilisation — among the three oldest, along with the Chinese and the Jewish — and continues to evolve in interesting directions. It would not be an exaggeration to suggest that an old civilisation such as India's should know the most about what is right and what is wrong, and about what is harmful and what is harmless.

Uphaar Cinema was burned down on June 13, 1997 by a fire that erupted from a 1000 kVA electricity transformer in its basement. The transformer was owned and maintained by a municipal utility institution. Fifty-nine persons died in the fire and 103 were injured — all of them were seated in the balcony of the cinema. Nearly 750 escaped from the horror.

Acting on a writ petition, the Delhi High Court (henceforth the Court) used its discernment to determine that the owners of Uphaar Cinema and three municipal institutions of New Delhi are collectively and comprehensively responsible for the gory mishap and the aftermath. The Court has apportioned the financial liability to the four, though not equally. But it is the verdict that matters and not the sentence in the context of India's society, economy and beleaguered secular framework.

The Uphaar Cinema verdict shows that Indian society and its economy will continue to evolve — even if it is a struggle all the time — in a sane and safe environment. It gives the Indian economy a great chance to tell the world that the rule of law is a given and that the law cannot be compromised in the short or the long term. The verdict gives Indian society the chance to tell its people that the rule of law can be trusted and that they do not have to live in fear and in the shadow of some unverifiable assumptions. It could remind managers of India's public institutions that they are responsible for the residual deficiencies of the managers they may replace.

Spur to the economy

Filmmaking and the screening of films are of considerable economic benefit to the government. They earn taxes for the government. The filmgoer pays these taxes. Taxes constitute more than 35 per cent of the price paid for by filmgoers. Without filmgoers, the government would be a little poorer, and would have to find new means and sources for raising tax revenues. With willing filmgoers, the government can ride piggyback on filmmakers and cinema owners — the risk takers — and earn taxes with little risk.

In the Uphaar Cinema fire, the government lost some sources of taxes. The likelihood of fire in unsafe cinemas could have also scared away filmgoers in other locales. The Court has reinforced the view that it is in the interest of government to provide such regulation as to make cinema halls safe so that filmgoers enjoy a few hours of entertainment in safety and comfort.

If the Court had not found the owners of Uphaar Cinema and the municipal institutions and utilities collectively responsible for the fire, the deaths and the failure to provide adequate evacuation to those fleeing the stricken cinema, the Court would have implicitly held filmgoers responsible for their safety. Few filmgoers would then visit cinemas. The impact on the exchequer would have been considerable. Had the Court held the owners alone responsible, the verdict would have raised two difficult questions. First, how should customers determine if cinema halls are safe? Second, what is the quid pro quo that customers get for the taxes they pay? If customers were unsure about the quid pro quo, they would visit illegal or unregulated cinemas that levy no taxes. Both courses of action would undermine the flow of taxes to the exchequer. If customers were unsure of both, a major source of taxes would be smothered into irrelevance.

The Court's verdict has important implications for every component of the national economy since customers and producers depend on the services of public institutions and utilities. No economy can aspire to achieve any pre-eminence in the absence of robust public institutions and responsive services from public utilities.

Public institutions and utilities, regardless of whether they are owned and operated by government or owned and operated by authorised private firms, serve an important economic purpose. They bring down the total costs to consumers and producers by exploiting the benefits of economies of scale and economies of scope. When costs decline, the economy and the exchequer do better.

Spur to regulation

The purpose of regulation is to make possible the cost-effective integration of the efforts of many specialists. Trust among people does this where possible, but regulation, rule-based systems and courts of law have to accomplish the integration where trust among the specialists is not a binding characteristic. But participants in any value chain in an economy either have to trust the other participants or have to trust that regulation, rule-based systems and the courts of law would act in an even-handed and equitable manner. Modern economies are characterised by sophistication in specialisation and sophistication in integration.

Filmmaking, as in the case of Border, the film that made its debut at Uphaar on Friday, June 13, 1997 (that makes it a Friday the thirteenth) is significantly different from screening films. But one without the other makes poor economic sense to the national economy. India needs good filmmakers, good actors and actresses, savvy financiers and distributors, and savvy cinema owners. If all of them do a good job, the cinemas would be full and the government would be busy counting its tax take. The film industry may appear too simple for regulation to play a critical role, but it is not.

A large part of the value chain may operate on trust among participants. However, the consumer end of the chain is dependent on the hygiene and safety of cinemas. Many leading stars of Indian cinema believe that video discs and home theatres have wooed away audiences and crippled Indian cinema. They are probably wrong. Unsafe, uncomfortable, unpleasant and unhygienic cinemas have done more harm to Indian cinema than videos.

If the safety stipulations related to the location and maintenance of high-voltage electricity transformers had been strictly enforced and then complied with by the Delhi Vidyut Board, the transformer would not have wrecked itself. There is one more if, the bigger if. Soon after the fire accident in Gopal Towers, a high-rise in Rajendra Place in New Delhi in 1983, the licences of 12 cinemas, including that of Uphaar, were cancelled. The Deputy Commissioner of Police (Licensing) inspected Uphaar. He had listed out ten serious violations. These had remained uncorrected until the ghastly fire 14 years later.

Uphaar had obtained an interim stay order and then operated with a temporary licence valid for two months. It then rolled the temporary license over and over again for 14 years! Under the Cinematography Act, a temporary licence is given to touring cinemas. Uphaar was built on immovable concrete, but callousness devastated it.

If the safety stipulations had been strictly enforced on Uphaar, and if Uphaar had complied with them, so many people would not have died days before the glorious and colourful celebrations at India Gate. Bad laws will kill people. Bad laws will cripple the economy. The heartless dispensation of good laws will kill people through fear and humiliation. The indifferent dispensation of good laws will cripple the economy.

If one verdict could change the way in which India conducts its economy, treats its businesses, treats its citizens, and engages in litigation and regulation, it is the verdict in the Uphaar Cinema case. Very uplifting!

(The author is a financial analyst. Feedback may be sent to indiagrow@sify.com)

Article E-Mail :: Comment :: Syndication

Stories in this Section
Uphaar verdict: Very uplifting

Switching on reforms

Shourie at receiving end

Mysterious comings and goings

Many a problem in municipal accounting

Weeding made difficult

Peter Principle

Secret, suave and sinister

BSNL tariff

Indian Railways