Rojer Mathew Vs South Indian Bank Ltd. & Ors. (Supreme Court)
1. Leave granted.
BRIEF BACKGROUND:
2. In the present batch of cases, the constitutionality of Part XIV of the Finance Act, 2017 and of the rules framed in consonance has been assailed. While it would be repetitious to reproduce the pleadings of each case separately, a brief reference is being made, illustratively, to the prayers made in three matters to aid the formulation of core issues arising for adjudication.
3. The Madras Bar Association has preferred Writ Petition (Civil) No. 267 of 2012 seeking the following reliefs:
“i. A writ of mandamus, directing the Union of India, to implement the directions of this Hon’ble Court in Union of India v. R. Gandhi [(2010) 11 SCC 1, para 96 at pg. 310] and L. Chandra Kumar v. Union of India [(1997) 3 SCC 261], paras 120 and 121 at page 65 to 67], where Ministry of Law and Justice, Govt. Of India was ordered to take over the administration of all tribunals created by Parliament and streamline the functioning of the same.
ii. A writ of mandamus directing the Ministry of Law & Justice to promptly carry out a ‘Judicial Impact Assessment’ on all tribunals created by Parliament and submit a report on the same to this Hon’ble Court.”
4. This Writ Petition was originally heard by a three-judge Bench on 18th February, 2015 wherein it was observed that the case presented substantial questions of Constitutional interpretation, necessitating hearing by a Constitution Bench. The orders passed from time to time reveal that, on 18th January, 2016, this Court perused the contents of the Tribunals, Appellate Tribunals and other Authorities (Conditions of Service) Bill, 2014 and felt that i“t would be more appropriate if observations made in Union of India vs. R. Gandhi, President, Madras Bar Association1 (in paragraphs 64-70) are also considered by the Government.”
5. The matter was listed again on 27th March, 2019 and this Court took cognizance of non-implementation of the directions issued vide para 96 of Chandra Kumar vs. Union of India2, which reads as follows:
“96. We are of the opinion that, until a wholly independent agency for the administration of all such Tribunals can be set up, it is desirable that all such tribunals should be, as far as possible, under a single nodal ministry which will be in a position to oversee the working of these tribunals. For a number of reasons that Ministry should appropriately be the Ministry of Law. It would be open for the Ministry, in its turn, to appoint an independent supervisory body to oversee the working of the Tribunals.”
6. Thereafter on the same day, this Court opined as follows:
“Tentatively, we are of the view that the said directions ought to have been implemented by the Government of India long back. In the course of hearing today, learned Attorney General for India relying on an affidavit filed on behalf of the Union of India in the year 2013, had pointed out certain difficulties including the need for an amendment of the Government of India (Allocation of Business) Rules, 1961. Learned Attorney General has also pointed out that the Ministry of Law and Justice is overburdened and may not be able to act and function as the nodal agency, which the Court had in mind while issuing directions way back in the year 1997 in L. Chandra Kumar (supra). There cannot by any manner of doubt that to ensure the efficient functioning and to streamline the working of Tribunals, they should be brought under one agency, as already felt and observed by this Court in L. Chandra Kumar (supra). The Court would like to have benefit of the view of the Government of India as on today by means of an affidavit of the competent authority to be filed within two weeks from today.
The second prayer made in the writ petition has also been considered by us and in this regard we have taken note of compilation placed before the Court by the learned Attorney General, which would go to show the present vacancy position in different Tribunals, which is one of the issues that we would attempt to resolve. From the compilation of the learned Attorney General, it appears that the Central Administrative Tribunal, the Intellectual Property Appellate Board, the Armed Forces Tribunal, the National Green Tribunal and the Income Tax Appellate Tribunal would require immediate attention. While every endeavour would be made by the nominee of the Chief Justice who heads the Selection Committee before whom the issue of recommendations may have been pending to expedite the same, such of the recommendations which have already been made by the Search-cum-Selection Committee as is in the case of National Company Law Tribunal and National Law Appellate Tribunal, should be immediately implemented by making appointments within the aforesaid period of two weeks and the result thereof be placed before the Court vide affidavit of the competent authority, as ordered to be filed by the present order.
Once the aforesaid information is made available, appropriate orders will be passed by this Court, which may, inter alia, include remitting the matter to smaller Bench for monitoring on a continuous basis, so as to ensure due and proper functioning of the Tribunals. Matter be listed before this Bench after two weeks.”
7. During the pendency of the aforementioned writ petition, the present lead matter bearing SLP(C) No. 15804/2017 was filed by Rojer Mathew, assailing the final judgment and order of the High Court of Kerala. The petitioner had originally approached the High Court challenging the constitutional validity of Section 13 (5A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 which permits secured creditors to participate in auction of immoveable property if it remained unsold for want of reserve bid in an earlier auction. Rojer Mathew claimed that the aforementioned provision violated his rights under Article 300A and Article 14 of the Constitution, besides being in contravention of the Code of Civil Procedure which prohibits mortgagees from participating in auction of immovable property without prior Court permission.
8. During the course of arguments, it was brought to the notice of this Court that appointments to the Debt Recovery Tribunals was not in consonance with the Constitutional spirit of judicial independence. Accordingly, though Rojer Mathew was given an opportunity to approach the High Court for reconsideration of his plea on 16th May, 2018, nevertheless this Court kept his petition pending to allow consideration of broader issues concerning restructuring of Tribunals. Assistance of Shri Arvind P. Datar, Sr. Advocate as Amicus Curiae was also requested by this Court.
9. The third matter to be taken note of is Writ Petition (Civil) No. 279/2017 where the petitioner, Kudrat Sandhu, has filed a Public Interest Litigation challenging the vires of Part XIV of the Finance Act, 2017 by which the provisions of twenty-five different enactments were amended to effect sweeping changes to the requisite qualifications, method of appointment, terms of office, salaries and allowances, and various other terms and conditions of service of the members and presiding officers of different statutory Tribunals. The impugned provisions of the Finance Act, 2017 have been referred to in extenso at appropriate parts of this order.
GENESIS OF TRIBUNALISATION:
10. Delay and backlogs in the administration of justice is of paramount concern for any country governed by the rule of law. In our present judicial setup, disputes often take many decades to attain finality, travelling across a series of lower courts to the High Court and ending with an inevitable approach to the Supreme Court.
11. Such crawling pace of the justice delivery system only aggravates the misery of affected parties. Although with nebulous origins, the adage “justice delayed, is justice denied” is apt in this context. Courts in this country, probably in a quest to ensure complete justice for everyone, overlook the importance of expediency and finality. This situation has only worsened over the years, as evidenced through piling pendency across all Courts. It would however be wrong to place the blame of such delay squarely on the judiciary, for an empirical examination of pendency clearly demonstrates that the ratio of judges against the country’s population is one of the lowest in the world and the manpower (support staff) and infrastructure provided is dismal.
12. In addition to the delay in administration of justice, another important facet requiring attention is the rise of specialization and increase of complex regulatory and commercial aspects, which require esoteric appraisal and adjudication. The existing lower courts in the country are not well equipped to deal with such complex new issues which see constant evolution as compared to the stable nature of existing civil, criminal and the tax jurisprudence.
13. Evidently, there is a desperate need to overcome these hurdles of delay in administration of justice. Creation of tribunals has evolved as one solution in the ever-constant strive to increase access to justice. A ‘Tribunal’ can be understood as a body tasked with discharging quasi-judicial functions with the primary objective of providing a special forum for specific type of disputes and for faster and more efficacious adjudication of issues. In Jaswant Sugar Mills Ltd., Meerut vs. Lakshmichand3, a test was laid down whereunder it is to be examined whether the authority has the trappings of a Court, facets of which include the authority to make determinations, evidentiary and procedural powers and ability to impose sanctions. However, per a five-judge bench in Associated Cement Co. Ltd. v. PN Sharma4, Tribunals were vested with a primarily judicial character for it was observed that:
“9. ….. Special matters and questions are entrusted to them for their decision and in that sense, they share with the courts one common characteristic; both the courts and the tribunals are “constituted by the State and are invested with judicial as distinguished from purely administrative or executive functions”, (vide Durga Shankar Mehta v. Thakur Raghuraj Singh [(1955) 1 SCR 267 at p. 272] ). They are both adjudicating bodies and they deal with and finally determine disputes between parties which are entrusted to their jurisdiction. The procedure followed by the courts is regularly prescribed and in discharging their functions and exercising their powers, the courts have to conform to that procedure. The procedure which the tribunals have to follow may not always be so strictly prescribed, but the approach adopted by both the courts and the tribunals is substantially the same, and there is no essential difference between the functions that they discharge. As in the case of courts, so in the case of tribunals, it is the State’s inherent judicial power which has been transferred and by virtue of the said power, it is the State’s inherent judicial function which they discharge. Judicial functions and judicial powers are one of the essential attributes of a sovereign State, and on considerations of policy, the State transfers its judicial functions and powers mainly to the courts established by the Constitution; but that does not affect the competence of the State, by appropriate measures, to transfer a part of its judicial powers and functions to tribunals by entrusting to them the task of adjudicating upon special matters and disputes between parties. It is really not possible or even expedient to attempt to describe exhaustively the features which are common to the tribunals and the courts, and features which are distinct and separate. The basic and the fundamental feature which is common to both the courts and the tribunals is that they discharge judicial functions and exercise judicial powers which inherently vest in a sovereign State.”
14. Further, this Court has in various judgments explicitly held that tribunals are mutually exclusive from administrative or legislative bodies, and although not strictly Courts, they nevertheless perform judicial functions. With the inclusion of technical members along with judicial members in composition of Tribunals, it is ensured that the adjudicatory authority is equipped with the technical knowledge required to comprehend and decide issues involving specialised subjects.
15. Such issues are not unique to our country. Globally, the issues such as need for specialization or pendency have resulted in a unanimous consensus for tribunalisation. A perusal of the prevailing legal regime governing tribunals and their interface with the government, provides a useful benchmark in examining methods to retain their character.
AN INTERNATIONAL PERSPECTIVE
16. The global approach to the institution of specialized Tribunals is a largely consistent one. A cursory examination brings to fore a universal inherent need to disperse disputes across different adjudicatory bodies to reduce the burden on Constitutional Courts and ensure faster resolution of specific disputes. Almost all countries in the world have incorporated laws pertaining to the working of Tribunals within their Constitutional framework in some form or the other. In light of our common law traditions and colonial history, it would be imperative to examine the position of law across the world:
I. United Kingdom
17. Tribunals are one of the most important institutions in the dispensation of justice in the British Judicial system. Numerous Tribunals have been established to deal with issues involving property rights, employment, immigration, mental health, etc. Their functions are similar to the mainstream judicial bodies and are concerned with disputes between individuals and the State. However, there is a stark distinction between Tribunals and Ordinary Courts in England; for unlike ordinary Courts, the Tribunals comprise of members with special expertise and experience with many of them being appointed from amongst advocates or from persons with technical exposure.
18. Such tribunalisation traces its origins to the early twentieth century. The efficacy of a specialised, quasi-judicial body for adjudication of specific disputes was realised over a period of time as the newly evolved system of Tribunals gradually gained appreciation and recognition in the legal fraternity. During the development of the railways in the early 19th century, the judges found themselves ill-equipped to deal with technically specialised trade disputes arising from monopolistic railway companies. Such inexpert adjudication also resulted in dissatisfaction of the litigants. Consequently, a specialized tribunal of Commissioners was appointed in 1873 and later converted to the Railways and Canals Commission. Later in the nineteenth century, the British Government set up tribunals for pension and unemployment benefit to enhance accessibility to the poor and less-educated, including, special tribunals set up to adjudicate disablement pensions for servicemen wounded in World War I. In the twentieth century, post the Leggatt review, many dozens of tribunals for subjects as diverse as tax, mental health, social security, employment and asylum were set up, with thousands of adjudicating members.
19. As Tribunals started marking their individual identity and resolving conflicts brought before them, there was an emergent need to amend the framework of these alternate fora in tune with societal changes. The Donoughmore Committee, in 1932, critiqued the delegation of judicial functions to quasi-judicial body and recommended that the judicial powers should vest solely with the Ordinary Courts of law. It was further recommended that establishment of Tribunals should only be in special cases where Ordinary Courts lacks expertise. Applicability of principles of natural justice must also be extended to such Tribunals. Courts should be adequately empowered to ensure that the Tribunals function within their restricted domain.
20. The need for supervisory jurisdiction over Tribunals was again discussed in 1957 when the Frank’s Committee made its recommendations which were implemented by the Tribunal and Inquiries Act, 1958. The Frank’s Committee Report presented a glowing critique in favour of tribunalisation, contending that it was cheaper, faster, better and more accessible. This finding has been echoed by various international commissions which have noted the beneficial impacts of tribunalisation viz., cost effectiveness, accessibility, reduction in pendency, specialized expertise, etc.
“Tribunals are not ordinary courts, but neither are they appendages of Government Departments. Much of the official evidence … appeared to reflect the view that tribunals should properly be regarded as part of the machinery of administration, for which the Government must retain a close and continuing responsibility. Thus, for example, tribunals in the social services field would be regarded as adjuncts to the administration of the services themselves. We do not accept this view. We consider that tribunals should properly be regarded as machinery provided by Parliament for adjudication rather than as part of the machinery of administration. The essential point is that in all these cases Parliament has deliberately provided for a decision outside and independent of the Department concerned, either at first instance … or on appeal from a decision of a Minister or of an official in a special statutory position… Although the relevant statutes do not in all cases expressly enact that tribunals are to consist entirely of persons outside the Government service, the use of the term ‘tribunal’ in legislation undoubtedly bears this connotation, and the intention of Parliament to provide for the independence of tribunals is clear and unmistakable.”5
21. Pursuant to this, the Council on Tribunals was established with the purpose of overseeing composition and working of various Tribunals. Further, the Sir Andrew Leggatt Committee (2001) scrutinised the existing state of Tribunals wherein the inherent deficiencies of a non-uniform Tribunal system were highlighted. The report of the Committee, titled ‘Tribunals for User— One System, One Service’ suggested a new structurally reformed system of Tribunals with a more uniform administration and procedure. It was also suggested that a single Appellate Division should be the only route of appeal against the orders of the Tribunals. In 2007, the Tribunals, Courts and Enforcement Act was enacted which formulated a new system of two Tribunals -the First-tier Tribunal and the Upper Tribunal – with unified route for appeal.6
22. In the year 2006 the United Kingdom created a Tribunal Service, which was later merged with the Courts Service in 2010, resulting in the creation of a single cohesive judicial structure and service for the country.
II. Canada
23. The Tribunal system in Canada, although of recent origin, is well established having a distinct identity of its own. Similar to the system in England, in Canada too, the Tribunal system has successfully become one of the foundations of the judicial system.7 Federal or provincial legislations are enacted to constitute and empower specialised Tribunals for specific subject matters such as human rights, insurance claims, etc.8 The work of the Tribunals are regulated by legislation and Members are usually appointed for their expertise in the subject.
24. ny of the Tribunals are empowered by their enabling legislation or general legislations to have powers similar to Civil Courts. However, Tribunals in Canada are less formal than Courts and are outside the general Court system; their decisions are subject to Judicial Review to ensure adherence to law. In a striking resemblance to our judicial system, the Canadian Constitution also provides inherent power of judicial review of decisions of Tribunals to superior Courts, where either no provision of appeal is provided or is specifically barred by a statute. Appeals from orders of Tribunals in Canada are heard by Federal Court of Canada, the immediate forum below the Supreme Court of Canada.
III. Australia
25. The Australian system of Tribunals is an amalgamation of the system prevalent in England and Canada. Tribunals in Australia were established primarily to reduce the burden on Civil Courts and provide an effective, yet cheap means of justice for the public. There prevails a variety of Tribunals to review different types of Government decisions including social security, taxation, etc. The Tribunals serve a multifarious purpose, deciding issues between individuals and individuals & State. For instance, in several Australian States, the Tribunals work as Small Claims Courts. The Court of Appeals is a facet of the Supreme Court, enjoying appellate powers over all the other Courts and Tribunals in the country.
IV. United States of America
26. The doctrine of separation of powers is adhered to in a much stringent manner in comparison to other common law countries. There is no delegation of judicial powers and no judicial power is vested in administrative bodies which are not Courts. The inception of judicial control over administrative action was with the enactment of Administrative Procedure Act, 1946. However, the Act merely made the decisions of Tribunals appealable on question of interpretation of law. Nevertheless, the Supreme Court of the United States had taken a more liberal view of the same leaving scope, though extremely limited, for judicial review.
V. France
27. Being a Civil Law system, France has a dual legal system comprising of— Private Law (droit privé) and Administrative Law (droit administratif).9 It has a special Tribunal viz. Tribunal des Conflicts for performing both judicial and administrative functions.10 The decisions of Tribunal des Conflicts are not entirely within the purview of judicial review. Judicial Review is expressly ousted from some of the administrative actions. Further, to adjudicate disputes between individual and officials of State, the Counseil d’Etat was formed.
28. With change in time, the Tribunal system of France also evolved. A new Three-Tier Tribunal system was established. The first tier being Tribunal administratif — Administrative Court or the Original Court having a wide jurisdiction covering all subject matters; the second tier is Cour administrative d’appel — Administrative Court of Appeal, formed to decide appeals from the Original Court and; the third tier is Conseil d’Etat — Court of Last Resort, which was formed to finally decide appeals from the Original Court or Court of Appeal. However, unlike in common law countries, the Appellate Courts in France lack power of judicial review on the ground of authority being ultra vires.
VI. South Africa
29. South Africa having similar colonial origins as India, inherited a similar legal system as India. Having multiple functions and discharging a range of judicial, quasi-judicial as well as administrative powers, every tribunal is a unique creation of its parent statute. Akin to many critiques in India, such tribunals are often criticized for their lack of uniformity, incoherence and haphazardness.
DOMESTIC PERCEPTION:
30. It is interesting to note that establishment of Tribunals in India relate back to as early as the year 1941 when the Income Tax Appellate Tribunal (ITAT) was established to expedite tax disputes. To structuralise the establishment of Tribunals, vide the 42nd Constitutional Amendment, Article 323A and 323B were introduced, delineating powers as well as the composition and formation of Tribunals. Numerous Tribunals thereafter have been established, with the source of power to legislate for establishing such tribunals being referable to Article 323A or Article 323B of the Constitution. The three-tier tribunal system in India finds its resemblance to the system as prevalent in France. The forums of first instance have Original Jurisdiction with High Court as the Appellate Court and the Supreme Court being the final adjudicatory body. Furthermore, it is not out of context to point out the similarity of the Constitution of India with the Canadian Constitution, insofar as it also provides inherent power of judicial review to Constitutional Courts over all subordinate Courts.
31. Hence, the need for establishment of newer and more specialised adjudicatory bodies is not newfound but has evolved through developments spread over an era.
I. Administrative Reforms Commission – 1966
32. The Administrative Reforms Commission was set up to explore the arenas for establishing Administrative Tribunals for different subject matters. It recommended establishment of Civil Services Tribunals as adjudicatory entities for disciplinary punishments awarded to civil servants.
II. Wanchoo Committee – 1970
33. The Wanchoo Committee recommended reforms to the Income Tax Appellate Tribunal to effectuate replacement of Civil Courts for expeditious redressal of tax disputes. It also recommended formation of a Direct Taxes Settlement Tribunal to ensure speedy remedies and decisions of disputes.
III. High Court’s Arrears Committee Report – 1972
34. A committee headed by Justice JC Shah highlighted an urgent need for individual-specialised Tribunals for exclusively dealing with service matters and to unburden High Courts by restricting the barrage of writ petitions being filed by government employees.
IV. Swaran Singh Committee – 1976
35. The Swaran Singh Committee took a radical view by advocating amendments to the Constitution for regulation of Tribunals and to curtail the writ jurisdiction of High Court and the Supreme Court. This report attracted a lot of critique from the legal fraternity and was later rejected in Sakinala Hari Nath vs. State Of Andhra Pradesh11.
V. Raghavan Committee – 2002
36. In accordance with contemporaneous evolutions in the commercial sphere, the Raghavan Committee was set up to suggest methods to regulate anticompetitive practices. This Committee recommended establishment of the Competition Commission of India (CCI), which was envisioned to maintain adequate competition in the market and protect consumer welfare. Further, the Competition Act, 2002 was later enacted which provided certain powers of Civil Courts to the CCI for effective enquiry and adjudication.
37. Tribunals can thus be viewed as alternate avenues to facilitate swift dispensation of justice through less-formal procedures of adjudication. An examination of existing Tribunals in India and across foreign jurisdictions, shows that they are best suited to deal with complex subject-matters requiring technical expertise such as service law, tax law, company law or environment law, etc.
LEGISLATIVE DEVELOPMENT OF TRIBUNALISATION :
38. In India, the Constitution (42nd Amendment) Act, 1976 paved way for tribunalisation of the justice dispensation system by introduction of Articles 323A and 323B in the Constitution. These provisions are to the following effect:
“PART XIV-A: TRIBUNALS
323-A. Administrative tribunals.—(1) Parliament may, by law, provide for the adjudication or trial by administrative tribunals of disputes and complaints with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under the control of the Government of India or of any corporation owned or controlled by the Government.
(2) A law made under clause (1) may—
(a) provide for the establishment of an administrative tribunal for the Union and a separate administrative tribunal for each State or for two or more States;
(b) specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said tribunals;
(c) provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals;
(d) exclude the jurisdiction of all courts, except the jurisdiction of the Supreme Court under Article 136, with respect to the disputes or complaints referred to in clause (1);
(e) provide for the transfer to each such administrative tribunal of any cases pending before any court or other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment;
(f) repeal or amend any order made by the President under clause (3) of Article 371D;
(g) contain such supplemental, incidental and consequential provisions (including provisions as to fees) as Parliament may deem necessary for the effective functioning of, and for the speedy disposal of cases by, and the enforcement of the orders of, such tribunals.
(3) The provisions of this article shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
323-B. Tribunals for other matters.—(1) The appropriate Legislature may, by law, provide for the adjudication or trial by tribunals of any disputes, complaints, or offences with respect to all or any of the matters specified in clause (2) with respect to which such Legislature has power to make laws.
(2) The matters referred to in clause (1) are the following, namely:—
(a) levy, assessment, collection and enforcement of any tax;
(b) foreign exchange, import and export across customs frontiers;
(c) industrial and labour disputes;
(d) land reforms by way of acquisition by the State of any estate as defined in Article 31-A or of any rights therein or the extinguishment or modification of any such rights or by way of ceiling on agricultural land or in any other way;
(e) ceiling on urban property;
(f) elections to either House of Parliament or the House or either House of the Legislature of a State, but excluding the matters referred to in Article 329 and Article 329-A;
(g) production, procurement, supply and distribution of foodstuffs (including edible oilseeds and oils) and such other goods as the President may, by public notification, declare to be essential goods for the purpose of this article and control of prices of such goods;
(h) rent, its regulation and control and tenancy issues including the right, title and interest of landlords and tenants;
(i) offences against laws with respect to any of the matters specified in sub-clauses (a) to (h) and fees in respect of any of those matters;
(j) any matter incidental to any of the matters specified in sub-clauses (a) to (i).
(3) A law made under clause (1) may—
(a) provide for the establishment of a hierarchy of tribunals;
(b) specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said tribunals;
(c) provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals;
(d) exclude the jurisdiction of all courts except the jurisdiction of the Supreme Court under Article 136 with respect to all or any of the matters falling within the jurisdiction of the said tribunals;
(e) provide for the transfer to each such tribunal of any cases pending before any court or any other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment;
(f) contain such supplemental, incidental and consequential provisions (including provisions as to fees) as the appropriate Legislature may deem necessary for the effective functioning of, and for the speedy disposal of cases by, and the enforcement of the orders of, such tribunals.
(4) The provisions of this article shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
Explanation.—In this article, “appropriate Legislature”, in relation to any matter, means Parliament or, as the case may be, a State Legislature competent to make laws with respect to such matter in accordance with the provisions of Part XI.”
39. Drawing its competence from Article 323A of the Constitution, the Parliament enacted the Administrative Tribunals Act, 1985. The primary objective was to provide a forum alternative to the High Courts for routine service appeals, which otherwise was overburdening the working of the Constitutional Courts. It recognised that the higher Courts were envisaged to primarily deal with important Constitutional issues and substantial question of law of general public importance.
40. Furthermore, guidelines were issued by this Court in numerous decisions to highlight a paucity of technical expertise in certain subject-matters and thus the imminent need for an expedited disposal of such cases through Tribunals. It was indicated in M.C. Mehta v. Union of India12, that a dedicated Tribunal with both judicial and technical experts is necessary to hear environmental disputes.
41. Consequently, the National Environment Tribunal Act, 1995 and National Environment Appellate Authority Act, 1997 were enacted. However, these were soon found to be incapable of providing expeditious resolution of disputes which necessitated reforms as suggested by the Law Commission of India. This led to the establishment of the National Green Tribunal (NGT) in 2010 as a special fast-track Court only to deal with issues related to the environment.
42. Similarly, Article 323B empowers the appropriate Legislature to enact legislation to provide for adjudication or trial by Tribunals of any disputes, complaints or offences with respect to the matters specified in Clause (2) of the said Article. The matters specified in Article 323B(2) exhaustively deal with a variety of matters which can be brought within the purview of tribunalisation by both the Parliament and State Legislatures.
JUDICIAL DEVELOPMENT OF TRIBUNALISATION :
43. This Court has observed through numerous decisions that the term ‘Tribunal’ refers to a quasi-judicial authority. A test to determine whether a particular body was merely an administrative organ of the Executive or a Tribunal was evolved by this Court in Jaswant Sugar Mills Ltd., Meerut vs. Lakshmichand13. It was to be examined whether the body is vested with powers of a Civil Court or not, and it was held that any adjudicatory body vested with powers of taking evidence, summoning of witnesses, etc. must be categorised as a Tribunal.
44. In K. Jain vs. Union of India14 a three-judge Bench of this Court emphasised the need for a safe and sound justice delivery system adept at satisfying the confidence of litigants. It was further noted that since members of Tribunals discharge quasi-judicial functions, it is imperative that they possess requisite legal expertise, some judicial experience and an iota of legal training. Moreover, since Tribunals are constituted as substitutes to Courts, their efficacy in upholding the faith of litigants cannot be compromised. It was however observed that true delivery of justice by Tribunals was still a far-fetched idea since the mechanism for judicial review and remedy of appeal to the Supreme Court was costly and discouraging. People from remote areas often found their right to appeal being handicapped by geographical and financial constraints. Hence, it was suggested by this Court that newer fora be dispersed across the country and that members from the Bar also be included in the composition of such Tribunals. An urgent need to reform the working of tribunals and regular monitoring of their functioning was also stressed upon.
45. Subsequently, in Chandra Kumar v. Union of India15, a Constitution
Bench of seven judges of this Court examined reports of expert committees and commissions analysing the problem of arrears. The Malimath Committee Report (1989-1990) was also referred to, wherein it was found that many Tribunals failed the test of public confidence due to purported lack of competence, objectivity and judicial approach. This Court thus called for drastic measures to elevate the standards of Tribunals in the country.
46. It was also reiterated that the exclusion of judicial review by High Courts was impermissible and providing direct statutory appeals to the Supreme Court impeded the common litigant from exercising his right to appeal because the appellate forum, being situated in Delhi, was inaccessible to many. While criticising the short terms of members and the lack of judicial experience of non-judicial members, this Court observed a need for establishment of an oversight mechanism to review the competence of all persons manning Tribunals. Thus, it was suggested that all Tribunals be brought under a ‘Single Nodal Ministry’, most appropriately the Ministry of Law & Justice, for overseeing of working of Tribunals. Liberty was however, granted to the Ministry to appoint an independent supervisory body to delegate the aforesaid functions. Further, the court noted that the procedure of selection of members of Tribunals, allocation of funds and all other intricacies would have to be culled out by such an umbrella organisation.
47. In Union of India vs. R. Gandhi, President, Madras Bar Association16, a Constitution Bench of five judges of this Court reviewed the Constitutional validity of Parts I-B and I-C of The Companies Act, 1956 inserted by the Companies (2nd Amendment) Act, 2002.
48. The bench observed that if Tribunals are established in substitution of Courts, they must also possess independence, security and capacity. Additionally, with transfer of jurisdiction from a traditional Court to a Tribunal, it would be imperative to include members of the judiciary as presiding officers/members of the Tribunal. Technical members could only be in addition to judicial members and that also only when specialised knowledge or know-how is required. Any inclusion of technical members in the absence of any discernible requirement of specialisation would amount to dilution and encroachment upon the independence of the judiciary.
49. This Court also observed that higher administrative experience does not necessarily result in better adjudication and that there had been a gradual encroachment on the independence of the judiciary through inclusion of more administrative/technical members in the Tribunals. It held that such practice needed to be checked and accordingly made requisite corrections to Parts I-B and I-C of The Companies Act, 1956 (as amended in 2002) as elucidated in para 120 of the judgement, which is reproduced below:
“120. We may tabulate the corrections required to set right the defects in Parts I-B and I-C of the Act:
(i) Only Judges and advocates can be considered for appointment as judicial members of the Tribunal. Only High Court Judges, or Judges who have served in the rank of a District Judge for at least five years or a person who has practised as a lawyer for ten years can be considered for appointment as a judicial member. Persons who have held a Group A or equivalent post under the Central or State Government with experience in the Indian Company Law Service (Legal Branch) and the Indian Legal Service (Grade I) cannot be considered for appointment as judicial members as provided in sub-sections (2)(c) and (d) of Section 10-FD. The expertise in Company Law Service or the Indian Legal Service will at best enable them to be considered for appointment as technical members.
(ii) As NCLT takes over the functions of the High Court, the members should as nearly as possible have the same position and status as High Court Judges. This can be achieved, not by giving the salary and perks of a High Court Judge to the members, but by ensuring that persons who are as nearly equal in rank, experience or competence to High Court Judges are appointed as members. Therefore, only officers who are holding the ranks of Secretaries or Additional Secretaries alone can be considered for appointment as technical members of the National Company Law Tribunal. Clauses (c) and (d) of sub-section (2) and clauses (a) and (b) of subsection (3) of Section 10-FD which provide for persons with 15 years experience in Group A post or persons holding the post of Joint Secretary or equivalent post in the Central or the State Government, being qualified for appointment as Members of Tribunal, are invalid
(iii) A “technical member” presupposes an experience in the field to which the Tribunal relates. A member of the Indian Company Law Service who has worked with Accounts Branch or officers in other departments who might have incidentally dealt with some aspect of company law cannot be considered as “experts” qualified to be appointed as technical members. Therefore clauses (a) and (b) of sub-section (3) are not valid.
(iv) The first part of clause (f) of sub-section (3) providing that any person having special knowledge or professional experience of 20 years in science, technology, economics, banking, industry could be considered to be persons with expertise in company law, for being appointed as technical members in the Company Law Tribunal, is invalid.
(v) Persons having ability, integrity, standing and special knowledge and professional experience of not less than fifteen years in industrial finance, industrial management, industrial reconstruction, investment and accountancy, may however be considered as persons having expertise in rehabilitation/revival of companies and therefore, eligible for being considered for appointment as technical members.
(vi) In regard to category of persons referred in clause (g) of sub-section (3) at least five years’ experience should be specified.
(vii) Only clauses (c), (d), (e), (g), (h), and the latter part of clause (f) in sub-section (3) of Section 10-FD and officers of civil services of the rank of the Secretary or Additional Secretary in the Indian Company Law Service and the Indian Legal Service can be considered for purposes of appointment as technical members of the Tribunal.
(viii) Instead of a five-member Selection Committee with the Chief Justice of India (or his nominee) as Chairperson and two Secretaries from the Ministry of Finance and Company Affairs and the Secretary in the Ministry of Labour and the Secretary in the Ministry of Law and Justice as members mentioned in Section 10-FX, the Selection Committee should broadly be on the following lines:
a. Chief Justice of India or his nominee—Chairperson (with a casting vote);
b. A Senior Judge of the Supreme Court or Chief Justice of High Court—Member;
c. Secretary in the Ministry of Finance and Company Affairs—Member; and
d. Secretary in the Ministry of Law and Justice—
(ix) The term of office of three years shall be changed to a term of seven or five years subject to eligibility for appointment for one more term. This is because considerable time is required to achieve expertise in the field concerned. A term of three years is very short and by the time the members achieve the required knowledge, expertise and efficiency, one term will be over. Further the said term of three years with the retirement age of 65 years is perceived as having been tailor-made for persons who have retired or shortly to retire and encourages these Tribunals to be treated as post-retirement havens. If these Tribunals are to function effectively and efficiently they should be able to attract younger members who will have a reasonable period of service.
(x) The second proviso to Section 10-FE enabling the President and members to retain lien with their parent cadre/ministry/department while holding office as President or Members will not be conducive for the independence of members. Any person appointed as member should be prepared to totally disassociate himself from the executive. The lien cannot therefore exceed a period of one year.
(xi) To maintain independence and security in service, sub-section (3) of Section 10-FJ and Section 10-FV should provide that suspension of the President/Chairman or member of a Tribunal can be only with the concurrence of the Chief Justice of India.
(xii) The administrative support for all Tribunals should be from the Ministry of Law and Justice. Neither the Tribunals nor their members shall seek or be provided with facilities from the respective sponsoring or parent Ministries or Department concerned.
(xiii) Two-member Benches of the Tribunal should always have a judicial member. Whenever any larger or special Benches are constituted, the number of technical members shall not exceed the judicial ”
50. Later, in Madras Bar Association vs. Union of India (2014)17, whilst striking down the newly-created National Tax Tribunal under the National Tax Tribunals Act, 2005, it was observed that procedure of appointment and conditions of service of members must be akin to judges of the Courts which were sought to be substituted by the Tribunal(s).
51. Only persons with professional legal qualifications coupled with substantial experience in law were held to be competent to handle complex legal issues. It was further held that a litigating party (Govt.) should never be a participant in the appointment process of members of the Tribunal. Similarly, a provision for reappointment or extension of tenure is ipso facto prejudicial to the independence of the members of Tribunal. A difference was also drawn between appointments to Tribunals which substituted Courts of first instance and to those which were not subordinate to High Courts.
52. It was further reiterated that establishment of a Tribunal with its seat at Delhi could cause hardship to litigants from other parts of the country, depriving them of convenient access to justice. Moreover, the Court held that in order to uphold their independence and fairness it would be inappropriate for the Central Government to have any administrative control over members of the Tribunal.
53. In Madras Bar Association vs. Union of India (2015)18, vires of the Companies Act, 2013 which contemplated establishment of National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) were challenged. Interestingly, while examining Chapter XXVII of Companies Act, 2013 i.e. Sections 407 to 434, this Court held that although the establishment of NCLT and NCLAT was not unconstitutional but there was a need for curing defects in accordance with the dictum of Gandhi (supra).
54. Finally, in Gujarat Urja Vikas Ltd. vs. Essar Power Ltd.19, while examining the composition and working of Tribunals and statutory framework thereof, this Court reiterated its earlier decisions in Chandra Kumar (supra) and Madras Bar Association (2014) (supra), observing that remedy of appeal to this Court was in effect, being obliterated due to cost and inaccessibility. In addition to this, a flood of appeals from all the Tribunals directly to this Court hindered its efficiency in fulfilling its primary Constitutional role. Since appellate tribunals, manned by non-judicial members, were adjudging complex questions of law, the composition of Tribunals was put under review by this Court and a reference to the Law Commission of India was made in this regard. Pursuant to this, the Law Commission of India, in its 272nd Report titled ‘Assessment of Statutory Frameworks of Tribunals in India’ gave a detailed analysis of statutory framework with respect to Tribunalisation in India.
THE FINANCE ACT, 2017: ITS LEGISLATIVE BACKGROUND
55. Primary challenge in the present batch of cases is to the Finance Act, 2017. Though this enactment was purportedly to give effect to “the finance proposals of the central government for the financial year 2017-18” but Part XIV thereof consists of comprehensive provisions meant to effect “Amendments to Central Acts to Provide for Merger of Tribunals and other Authorities and Conditions of Service of Chairpersons, Members, etc”.
56. A scrutiny of Part XIV of the Finance Act, 2017 discloses how by virtue of Sections 158 to 182, Parliament has amended twenty-five central enactments which form the foundation for multiple Tribunals. It has been submitted by the learned Attorney General, these amendments seek to rationalise the functioning of Tribunals, in conformity with the principles laid down by this Court in its prior decisions.
57. Sections 158 to 182 of Part-XIV are broadly in pari materia except that each Section deals with a separate Tribunal. In order to comprehend the manner in which Parliament has sought to achieve a uniform pattern of qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of members and presiding officers of various Tribunals, it would be sufficient to illustratively reproduce Sections 158 and 173 of Part XIV of the Finance Act, 2017. Section 173 reads as follows:
“I.—AMENDMENT TO THE CINEMATOGRAPH ACT, 1952
173. In the Cinematograph Act, 1952, after section 5D, the following section shall be inserted, namely:—
“5E. Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairman and other members of the Appellate Tribunal appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of section 184 of that Act: Provided that the Chairman and member appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.”.
58. In addition to this, some Sections in Part XIV also amalgamate existing Tribunals. Section 158 has been reproduced below as an example of such Sections which in addition to the elements of Section 173 also effect amalgamations:
“158. Amendment of Act 14 of 1947.— In the Industrial Disputes Act, 1947,—
(a) in Section 7A, after sub-section (1), the following sub-section shall be inserted, namely:—
“(1A) The Industrial Tribunal constituted by the Central Government under subsection (1) shall also exercise, on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, the jurisdiction, powers and authority conferred on the Tribunal referred to in Section 7D of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952).”;
(b) after Section 7C, the following section shall be inserted, namely:—
“7D. Qualifications, terms and conditions of service of Presiding Officer.— Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation and removal and other terms and conditions of service of the Presiding Officer of the Industrial Tribunal appointed by the Central Government under sub-section (1) of Section 7A, shall, after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, be governed by the provisions of Section 184 of that Act:
Provided that the Presiding Officer appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act, and the rules made thereunder as if the provisions of Section 184 of the Finance Act, 2017 had not come into force.”
59. There are two significant expressions worth noticing in these similarly worded Sections 158 to 182. First, every such Section opens up with a non- obstante clause and it provides that “notwithstanding anything contained in …….. Act the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairman and other members of the Appellate Tribunal appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of section 184 of that Act”. Second, Section 184 of the Finance Act overrides all other provisions in both the Finance Act, 2017 as well as the other twenty-five enactments which stand amended.
60. To critical analyse the intention of the legislature in enacting Section 184, reference must be made to the immediately preceding Section 183 which is to be found in sub-part ‘S’ of the Act titled “Conditions of service of Chairpersons and members of Tribunals, Appellate Tribunals and other Authorities”. Since Sections 183 and 184 would need to be read conjointly, both are reproduced below:
“S.—CONDITIONS OF SERVICE OF CHAIRPERSON AND MEMBERS OF TRIBUNALS, APPELLATE TRIBUNALS AND OTHER AUTHORITIES
183. Application of Section 184.— Notwithstanding anything to the contrary contained in the provisions of the Acts specified in column (3) of the Eighth Schedule, on and from the appointed day, provisions of Section 184 shall apply to the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the case may be, other Authorities as specified in column (2) of the said Schedule:
Provided that the provisions of Section 184 shall not apply to the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or, as the case may be, Member holding such office as such immediately before the appointed day.
184. Qualifications, appointment, term and conditions of service, salary and allowances, etc., of Chairperson, Vice-Chairperson and Members, etc., of the Tribunal, Appellate Tribunal and other Authorities.— (1) The Central Government may, by notification, make rules to provide for qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the case may be, other Authorities as specified in column (2) of the Eighth Schedule:
Provided that the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or other Authority shall hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and shall be eligible for reappointment:
Provided further that no Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member shall hold office as such after he has attained such age as specified in the rules made by the Central Government which shall not exceed,—
(a) in the case of Chairperson, Chairman [President or the Presiding Officer of the Securities Appellate Tribunal], the age of seventy years;
(b) in the case of Vice-Chairperson, Vice-Chairman, Vice-President, Presiding Officer [of the Industrial Tribunal constituted by the Central Government and the Debts Recovery Tribunal] or any other Member, the age of sixty-seven years:
(2) Neither the salary and allowances nor the other terms and conditions of service of Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the case may be, other Authority may be varied to his disadvantage after his appointment.”
61. Further, the Central Government in purported exercise of its powers under the aforementioned provisions, has notified the ‘Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017’ [in short “the Rules”].
PETITIONERS’ CASE :
62. The pleadings and arguments in most of the individual cases are similar and overlapping. Hence, for the sake of brevity, it is not necessary to refer to the submissions of each of the counsel individually. Broadly, however, petitioners have questioned the validity of Part XIV read with the 8th and 9th Schedules of the Finance Act 2017, as being ex-facie unconstitutional, arbitrary, in colourable exercise of legislative power, and offensive to the basic structure of the Constitution.
63. The foremost contention on behalf of the petitioners is that Part-XIV could not and ought not to have been made part of the Finance Act, 2017 as the said part is not classifiable as a ‘money bill’. Emphasis was placed on the wordings of Article 110 which allows those bills which contain “only” provisions which fall within the metes and bounds of Clauses (a) to (g) thereof, to be treated as ‘money bill’. By virtue of inclusion of Part XIV, the entirety of the Finance Act, 2017 was contended to have lost its colour as a ‘money bill’ under Article 110 and hence its passage without the assent of the Rajya Sabha as required under Article 107 renders it ultra vires the legislative scheme contemplated in the Constitution.
64. Learned counsels vehemently placed reliance on the Constituent Assembly Debates to lend strength to the importance of the expression “only” under Article 110(1). They seek to make out a case that such phraseology was deliberately incorporated in the Constitution by making a conscious departure from Section 37 of the Government of India Act, 1935. Inclusion of Part XIV in the Finance Act, 2017 is shown as being an act of camouflage and a colourable exercise and petitioners assert that such indirect manner of bypassing of the Rajya Sabha is impermissible. A larger narrative was presented before this Court, that is, of the Central Government undermining the character and essence of a bicameral legislature as envisaged under the Constitution; and interference of this Court was sought through examination of the substance of the legislation and not mere acceptance of the nomenclature accorded by the Lok Sabha Speaker under Article 110(3).
65. A nuanced argument was also furthered by petitioners’ counsels who highlighted that Tribunals are governed by Article 323-A and 323-B of the Constitution and laws enacted in this regard cannot be classified as money bills. Further, Parliament in making changes to Tribunals can trace its competence to Entry 11-A of List III of the Constitution which deals with administration of justice, and not financial matters.
66. Part XIV was also impugned for its effect of terminating the services of presiding officers and members of various now-defunct Tribunals, which was claimed as being a direct interference in the independence of the judiciary.
67. Section 184(1) of the Finance Act, 2017, in so far as it empowers the Central Government to make rules to provide for qualifications and procedure of appointment, conditions of service, terms and salaries was contended to suffer from the vice of excessive delegation. It was stated that the said provision takes away all judicial safeguards and makes the Tribunals amenable to the whims and fancies of the largest litigant, the State. This was contended as being against the grain of the Constitution, besides affecting administration of justice. In the alternative, counsels also contended that the present formulation of Rules under Section 184 was ultra vires the parent enactment and the binding dictum expressed by this Court in a catena of judgments.
68. Further, during the course of arguments, various other deficiencies and contradictions in the administration of Tribunals and certain anomalous situations like providing direct appeals to this Court were highlighted, which were contended as being against the spirit of the Constitution. Petitioners, in addition to challenging the vires of the Finance Act, 2017 also prayed for a mandamus directing the State to mandatorily conduct ‘Judicial Impact Assessment’ of legislations.
UNION OF INDIA’S CASE :
69. Learned Attorney General, on the other hand, passionately drew attention to the existence of over 40 tribunals, statutory commissions, and authorities functioning under the Government of India, each of which has been established under a different enactment and is governed by different set of rules. As a result, the conditions of service, modes of appointment, tenures etc. of members and presiding officers in different Tribunals were shown as vastly varying from one to another, giving rise to several anomalies and distortions. He put forth multiple examples; like how while members of some of the Commissions/Tribunals enjoy the status of Supreme Court judges, others like the members of the Debt Recovery Tribunal have only been kept at par with District Court judges. Similarly, while a person once appointed to the ITAT can continue till the age of superannuation, tenures of persons appointed to the APTEL was merely three years. The Attorney General attributed such inconsistencies as drafting errors and further stressed the need to streamline and harmonise the applicable rules, which is what was attempted through the Finance Act, 2017.
70. He also highlighted the inherent contradiction in according status and rank equivalent to that of Constitutional Court judges to members and presiding officers of such Tribunals and regulatory bodies. It was argued that the two have different functions and roles in our Constitutional setup. While the Supreme Court had a strength of 31 judges (when the matter was argued), he pointed out, that there are more than 50 functionaries enjoying the conditions of service of a Supreme Court judge and more than 150 such functionaries who have been brought at par with High Court judges. After placing on record multiple problems arising in the administration of justice as a result of such practice, he advocated the need to keep ‘rank’ and ‘status’ separate from ‘salary’ and ‘allowances’.
71. Learned Attorney General further relied upon an order passed by this Court in Rajiv Garg vs. Union of India (WP No. 120 of 2017) on 08th February, 2013 directing that a decision be taken by the Central Government on uniformity of service conditions in various tribunals. Reliance was also placed on the 13th Report of the 2nd Administrative Reforms Commission submitted in April 2009 which recommended greater uniformity in service conditions in various tribunals. It was pointed out that, in fact, the Tribunals, Appellate Tribunals and other Authorities (Conditions of Service) Bill, 2014 was introduced in the Rajya Sabha on 14th February, 2014 but somehow could not be passed. Introducing separate amendments for each of these Tribunals would have been unwieldy and impractical, besides resulting in several inconsistencies. Resultantly, he submits a holistic view was taken and a single enactment was sought to be introduced in order to harmoniously bring uniformity.
72. On behalf of the Union, the petitioners’ contentions were elaborately refuted. It was submitted that it is a settled principle of Constitutional interpretation that terms of the Constitution, including Clauses (a) to (g) of Article 110(1), must be interpreted in their widest amplitude, with the result that when the principal enactment had the dominant character of a ‘money bill’, all matters incidental thereto and inserted therein would also draw the colour and characteristic of a ‘money bill’.
73. In the alternative, he took aid of Clause (3) of Article 110 to contend that the Speaker of the Lok Sabha was the final and only Constitutional authority to adjudge the nature of a bill sought to be introduced under Article 109. Such decision was both final and hence not subject to any judicial review by any Court; even otherwise such exercise of passing legislations and certifications by the Speaker were “proceedings in Parliament” and could hence “not be called in question” before this Court in view of Article 122(1).
74. Both sides have extensively relied upon case law and Constitutional history to substantiate their respective pleas. Relevant portions of the same are being referred to in the latter parts of this judgment whenever necessary.
BRIEF REFERENCE TO INTERLOCUTORY ORDERS :
75. After considering the suggestions filed during the course of hearing in SLP(C) No. 15804/2017, this Court passed an interim order on 9 February 2018, suggesting:
“1. Staying the composition of Search-cum-Selection Committee as prescribed in Column 4 of the Schedule to the Tribunal, Appellate Tribunal and Other Authorities (Qualification, experience and other conditions of service of members) Rules, 2017 both in respect of Chairman/Judicial Members and Administrative Members. A further direction to constitute an interim Search-cum- Selection Committee during the pendency of this W.P. in respect of both Judicial/Administrative members as under :
a. Chief Justice of India or his nominee – Chairman
b. Chairman of the Central Administrative Tribunal – Member
c. Two Secretaries nominated by the Government of India – Members
2. Appointment to the post of Chairman shall be made by nomination by the Chief Justice of India.
3. Stay the terms of office of 3 years as prescribed in Column 5 of the Schedule to the Tribunal, Appellate Tribunal and other Authorities (Qualification, experience and other conditions of service of members) Rules, 2017. A further direction fixing the term of office of all selectees by the aforementioned interim Search-cum- Selection Committee and consequent appointees as 5 years.
4. All appointments to be made in pursuance to the selection made by the interim Search-cum-Selection Committee shall be with conditions of service as applicable to the Judges of High Court.
5. A further direction to the effect that all the selections made by the aforementioned interim selection committee and the consequential appointment of all the selectees as Chairman/Judicial/Administrative members for a term of 5 years with conditions of service as applicable to Judges of High Court shall not be affected by the final outcome of the Writ ”
76. The learned Attorney General agreed with all except the fourth and fifth suggestions reproduced above, and suggested certain modifications as follows:
“4. All appointments to be made in pursuance to the selection made by the interim Search-cum-Selection Committee shall abide by the conditions of service as per the old Acts and the Rules.
5. A further direction to the effect that all the selections made by the aforementioned interim selection committee and the consequential appointment of all the selectees as Chairman/Judicial/Administrative members shall be for a period as has been provided in the old Acts and the Rules.”
77. This Court agreed to the learned Attorney General’s suggestions and accordingly made the following operative directions:
“In view of the aforesaid, we accept the suggestions and direct that the same shall be made applicable for selection of the Chairpersons and the Judicial/Administrative/ Technical/Expert Members for all tribunals.”
78. Since many of the Search-cum-Selection Committees had initiated selection
processes and had completed a substantial portion of the exercise prior to the above order dated 9th February, 2018, this Court, on 12th February, 2018 passed the following order:
“As some Committees had proceeded, the matter was listed for further hearing. We have heard learned counsel for the parties. Mr. Rohit Bhat, learned counsel assisting the learned Attorney General for the Union of India shall file the status of the selection process by the Committees, by 13.2.2018.
Mr. Arvind Datar, Mr. C.A. Sundaram and Mr. Mohan Parasaran, learned senior counsel shall also file through their Advocates-on- Record a joint memorandum with regard to which tribunals are covered and not covered. The same shall be filed by 10.30 a.m. on 13.2.2018.
Orders reserved.”
79. Further, vide order dated 20th March 2018, this Court clarified its previous order of 9th February 2018 and directed:
“(iii) The tenure of the Chairperson and the Judicial/Administrative/Expert/Technical Members of all the Tribunals shall be for a period of five years or the maximum age that was fixed/determined under the old Acts and Rules;”
80. The following directions were also issued on 16th July, 2018 with regard to the age of superannuation of Members of the ITAT:
“At this juncture, we may note that there is some confusion with regard to the Income Tax Appellate Tribunal (ITAT) as regards the age of superannuation. We make it clear that the person selected as Member of the ITAT will continue till the age of 62 years and the person holding the post of President, shall continue till the age of 65 years.”
81. Corollary to the order dated 16th July 2018, six officers who had been selected as Member (Judicial) in CESTAT, also demanded the age of superannuation as noted in the case of Members of ITAT, to be applicable to them. Following the same dictum, vide order dated 21st August 2018, clarification regarding the age of superannuation for Members of CESTAT, Armed Forces Tribunal and Central Administrative Tribunal was made. The relevant portion of that order reads as follows:
“CESTAT:
2. In IA 113281 of 2018, the applicant is an Additional District and Sessions Judge in the State of West Bengal, who has been selected as Member (Judicial) in the CESTAT. The notification of appointment of six officers who have been selected as Member (Judicial), including the applicant, stipulates that they shall hold office for a period of five years or till attaining the age of 62 years, whichever is earlier “in terms of the Hon’ble Supreme Court’s order dated 20 March 2018”. A member of the judicial service would have ordinarily continued until the date of superannuation in the state judicial service, subject to the service rules. It would be manifestly inappropriate to adopt an interpretation as a result of which, upon assuming office as Member (Judicial) in CESTAT the officer will have a tenure which will expire after five years, if it falls prior to attaining the age of 62 years. We, accordingly, are of the view that the clarification issued for the ITAT in the order dated 20 March 2018 needs to be reiterated in the case of the members of the CESTAT, which we do. We clarify that a person selected as Member of the CESTAT will continue until the age of 62 years while a person holding the post of President shall continue until the age of 65 years.
AFT:
3. Members of the Armed Forces Tribunal shall hold office until the attainment of the age of 65 years. Chairpersons who have been former Judges of the Supreme Court shall hold office until the attainment of the age of 70 years.
CAT:
4. In the case of the Central Administrative Tribunal, we clarify that the old rules/ provisions shall continue to ”
CONCEPT NOTE OF LEARNED AMICUS CURIAE :
82. On the request of this Court, learned Senior Advocate Arvind Datar has provided invaluable assistance as the Amicus Curiae. In his detailed Concept Note, he has stressed the need for setting up an independent oversight body in light of the observations in Chandra Kumar (supra), and as reiterated in Madras Bar Association v. Union of India (2015) (supra) to the effect that Tribunals or their members should not be required to seek facilities from the sponsoring or parent ministries or concerned departments.
83. The Concept Note also emphasised the need to implement the ‘74th Report of the Parliamentary Standing Committee’ which recommended the creation of a `National Tribunal Commission’ (NTC) to oversee all the Tribunals in the country. Mr. Datar further suggests that such National Tribunal Commission may consist of the following:
