SC set aside provision of Tribunal Reforms Ordinance 2021 fixing term of members of Tribunal at 4 years

Conclusion: The declaration of  Court in para 53(iv) of MBA-III should prevail and the term of Chairperson of a Tribunal shall be five years or till she or he attains the age of 70 years, whichever was earlier and the term of Member of a Tribunal should be five years or till she or he attained the age of 67 years, whichever is earlier. The retrospectivity given to the proviso to Section 184(11) – introduced by Section 12 of the Tribunals (Reforms Rationalisation and Conditions of Service) Ordinance, 2021 was hereby upheld; however, without in any manner affecting the appointments made to the post of Chairperson or members of various Tribunals, upto 04.04.2021. In other words, the retrospectivity of the provision shall not in any manner affect the tenures of the incumbents appointed as a consequence of this Court’s various orders during the interregnum period.

Held:  In the instant case, the Madras Bar Association filed a writ petition in the Madras High Court challenging the constitutional validity of the amendment to the 1956 Act on the ground of legislative incompetence and violation of the doctrines of separation of powers and independence of the judiciary. The High Court upheld the validity of the Amendment Act of 2002 but pointed out certain defects in the provisions of the Act. The High Court declared that the NCLT and the National Company Law Appellate Tribunal (NCLAT) could not be constituted without removing the defects pointed out in the judgment. The Madras Bar Association had filed the Writ Petition seeking a declaration that Sections 12 and 13 of the Tribunal Reforms (Rationalization and Cosnditions of Service) Ordinance, 2021 and Sections 184 and 186 (2) of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalization and Conditions of Service) Ordinance, 2021 as ultra vires Articles 14, 21 and 50 of the Constitution of India inasmuch as these were violative of the principles of separation of powers and independence of judiciary, apart from being contrary to the principles laid down by this Court in Union of India v. R. Gandhi, President, Madras Bar Association1, Madras Bar Association v. Union of India & Anr.2, Rojer Mathew v. South Indian Bank Limited & Ors.3 and Madras Bar Association v. Union of India & Anr. Assessee sought a further direction to Respondent No.2 for establishment of a separate wing to cater to the requirements of Tribunals in India. It was held that the first proviso and the second proviso, read with the third proviso, to Section 184 overriding the judgment of the Court in MBA-III in respect of fixing 50 years as minimum age for appointment and payment of HRA, Section 184(7) relating to recommendation of two names for each post by the SCSC and further, requiring the decision to be taken by the Government preferably within three months were declared to be unconstitutional. Section 184(11) prescribing tenure of four years was contrary to the principles of separation of powers, independence of judiciary, rule of law and Article 14 of the Constitution of India. Though, the proviso to Section 184(11) was upheld, the appointments made to the CESTAT pursuant to the interim orders passed by this Court shall be governed by the relevant statute and the rules framed thereunder that existed prior to 26.05.2017. It was also noticed that the notification dated 30.06.21 by way of which Rule 15 of the 2020 Rules dealing with HRA had been amended in conformity with our directions in MBA-III. Assessee continued its relentless struggle in its endeavor to make tribunals effective avenues of administration of justice. The endeavour of assessee was to extricate the tribunals from the clutches of the executive in the interest of independence of judiciary. Security of tenure, adequate remuneration and other conditions of service were necessary to ensure that Members of tribunals would feel secure during their tenure. The judgment in MBA-III was passed after a detailed dialogue with the learned Attorney General. Existence of large number of vacancies of Members and Chairpersons and the inordinate delay caused in filling them up had resulted in emasculation of the tribunals. The main reason for tribunalisation, which was to provide speedy justice, was not achieved as tribunals were wilting under the unbearable weight of the exploding docket. Undoubtedly, the legislature was free to exercise its power to make laws and the executive was the best judge to decide policy matters. However, it was high time that a serious effort was made by all concerned to ensure that all the vacancies in the tribunals were filled up without delay. Access to justice and confidence of the litigant public in impartial justice being administered by tribunals need to be restored.