Author(s): Sanjay Sen
This is the second essay in a three-part series.
Regulating India – The Parallel Judiciary and its Rivals
This essay examines the legal foundation on which tribunals stand, the inherent breakdown of the separation of power doctrine in tribunals, and how the soft approach of the Indian courts regarding this disqualification has severely undermined the legal integrity of tribunals. With the help of decided court judgements, the author discusses the shortcomings in the appointment-scheme relating to tribunals and highlights the indifference of traditional courts on matters of independence of tribunals from the executive branch with respect to the issue of appointments.
While tribunals are now an integral part of the country’s justice delivery system, the Supreme Court has from time to time examined the constitutional basis for creating tribunals1. The Supreme Court has also noted with some level of concern that functions that were being earlier discharged by courts were now being transferred to tribunals.
In Union of India v. Madras Bar Assn.2 the Supreme Court was called upon to decide whether Parliament has the legislative competence to vest “intrinsic judicial functions that have been traditionally performed by the High Courts for nearly a century in any tribunal outside the judiciary”. It was argued by the petitioners that the constitution of the National Company Law Tribunal and transferring the entire company jurisdiction of High Courts to tribunals is violative of the doctrine of separation of powers and independence of the judiciary, which are parts of the basic structure of the Constitution. This argument was rejected. The Supreme Court upheld the plenary power of the Parliament to vest the powers of adjudication of matters relating to company law in the newly constituted tribunal. The Court, however, set aside certain provisions of the new law and proposed that safeguards be introduced to ensure that the tribunal has the necessary trappings of a court. As regards the constitutional basis for creating tribunals, the Court held that:
“80. The legislative competence of Parliament to provide for creation of courts and tribunals can be traced to Entries 77, 78, 79 and Entries 43, 44 read with Entry 95 of List I, Entry 11-A read with Entry 46 of List III of the Seventh Schedule. Referring to these articles, this Court in two cases, namely, Union of India v. Delhi High Court Bar Assn. [(2002) 4 SCC 275] and State of Karnataka v. Vishwabharathi House Building Coop. Society [(2003) 2 SCC 412] held that Articles 323-A and 323-B are enabling provisions which enable the setting up of tribunals contemplated therein; and that the said articles, however, cannot be interpreted to mean that they prohibited the legislature from establishing tribunals not covered by those articles, as long as there is legislative competence under the appropriate entry in the Seventh Schedule.”(highlights and underlines supplied)
From the many challenges that the judiciary is required to face, the most engaging ones are those that deal with the attempts of the political wing of the State to infringe upon the space allocated to the judiciary under the constitutional scheme of separation of powers. It is argued by some that this was done with a view to control the powers of the judiciary and reduce its area of influence. Though various methods are applied by the political wing to control judicial independence, the prominent ones are those that seek to exercise control over appointments of judges in the superior courts. However, for some, the systematic reduction of judicial territory through a process of tribunalisation is also seen as a manner of taking control over prime judicial function.
The Madras Bar Asso. 2010 judgment is useful for understanding the minimum level of legal protection that is necessary for tribunals to operate in a constitutional democracy. However, this judgment cannot be seen in isolation. It has to be seen in the context as to how the judiciary has generally reacted to the executive or political excesses in relation to the encroachment of judicial territory. The present discussion highlights certain inherent contradictions in the approach adopted by the Supreme Court. While the Supreme Court has aggressively safeguarded itself and the High Courts from repeated attacks on the issue of appointment of judges, it has allowed the political establishment to take control of tribunals in matters of appointment and other aspects that has the potential of affecting the independent functioning of this judicial branch. The failure to ensure safeguards for securing the independence of tribunals is on account of a soft approach taken by the judiciary in this area3.
While striking down the 99thAmendment Act to the Constitution and the consequent legislation that created the National Judicial Appointment Commission, the Court in many boisterous voices held that4:
“928. The 99th Constitution Amendment Act and the NJAC Act not only reduce the Chief Justice of India to a number in NJAC but also convert the mandatory consultation between the President and the Chief Justice of India to a dumb charade with NJAC acting as an intermediary. On earlier occasions, Parliament enhanced its power through constitutional amendments, which were struck down, inter alia, in Indira Nehru Gandhi [Indira Nehru Gandhi v. Raj Narain, 1975 Supp SCC 1 (Five-Judge Bench)] and Minerva Mills [Minerva Mills Ltd. v. Union of India, (1980) 3 SCC 625 (Five-Judge Bench)] . [ In I.R. Coelho v. State of T.N., (2007) 2 SCC 1 this Court observed in para 138 of the Report: (SCC p. 107)“138. The relevance of Indira Nehru Gandhi case, 1975 Supp SCC 1, Minerva Mills case, (1980) 3 SCC 625 and Waman Rao case, (1981) 2 SCC 362, lies in the fact that every improper enhancement of its own power by Parliament, be it clause (4) of Article 329-A or clauses (4) and (5) of Article 368 or Section 4 of the 42nd Amendment has been held to be incompatible with the doctrine of basic structure as they introduced new elements which altered the identity of the Constitution or deleted the existing elements from the Constitution by which the very core of the Constitution is discarded. They obliterated important elements like judicial review. They made directive principles en bloc a touchstone for obliteration of all the fundamental rights and provided for insertion of laws in the Ninth Schedule which had no nexus with agrarian reforms.”] The 99th Constitution Amendment Act unconstitutionally minimises the role of the Chief Justice of India and the judiciary to a vanishing point in the appointment of Judges. It also considerably downsizes the role of the President. This effaces the basic structure of the independence of the judiciary by sufficiently altering the process of appointment of Judges to the Supreme Court and the High Court, or at least alters it unconstitutionally thereby striking at the very basis of the independence of the judiciary.
939. The combined effect of the 99th Constitution Amendment Act and Section 6 of the NJAC Act is that the entire control over the appointment of a Judge of a High Court is taken over by NJAC and the paradigm is completely altered with the Chief Justice of a High Court downgraded from a mandatory consultant, and the originator of a recommendation for appointment as postulated by Article 217(1) of the Constitution as conventionally understood, to someone who merely makes a nomination and thereafter is not required to be consulted one way or the other with respect to the nomination made. This drastic change in the process of appointment of a Judge of a High Court obviously has a very long-term impact since it is ultimately from the “cadre” of the High Court Judges that most Supreme Court Judges would be appointed, if the existing practice is followed. This in turn will obviously have a long-term impact on the independence of the judiciary apart from completely altering the process for appointment of a Judge of a High Court.
946. The sum and substance of this discussion is that the process of initiating a recommendation for the appointment of a Judge, generally accepted since Independence, has been radically changed, with well-entrenched constitutional conventions being given short shrift; the Chief Justice of the High Court has been reduced to the role of a nominating officer, whose opinion is taken only for nomination purposes but not taken as a consultant in so vital a matter as the appointment of a Judge; the constitutional importance given to the Chief Justice of a High Court has been completely whittled down virtually to a vanishing point.
“…..would conclude that the new scheme damages the basic feature of the Constitution under which primacy in appointment of Judges has to be with the judiciary. Under the new scheme such primacy has been given a go-by. Thus the impugned 99th Amendment cannot be sustained.” [para 1108] (highlights and underline supplied).
The Court can be seen to purposefully ward off encroachment by the political class that sought to empower itself on matters of appointment of judges of the High Courts and the Supreme Court. To secure the independence of the judiciary, the Court stood by its earlier judgments in the Second5 and Third judges6 cases, where the word “consultation” in Articles 124 (2) and 217 (1) of the Constitution was interpreted to mean “concurrence” of the Chief Justice7, whose views on such matters will have primacy. Relying on its earlier judgment, the Supreme Court said:
“762. At the pre-recommendation stage, it is quite possible that the executive is in possession of material regarding some personal trait or weakness of character of a lawyer or a Judge that is not known to the Chief Justice of India or the Chief Justice of the High Court and which may potentially disentitle that person from being appointed a Judge. It is then for the executive, as a consultant, to bring this information or material to the notice of the Chief Justice of India. [Id, paras 462 and 478(6)] Since the judiciary has the responsibility of recommending an appropriate candidate for appointment as a Judge, primacy is accorded to the view of the judiciary (symbolised by the view of the Chief Justice of India) that will weigh and objectively consider the material or information and take a final decision on the desirability of the appointment. [Id, paras 467, 468 and 478(6)] The Chief Justice of India may, for good reason, accept the view of the executive or may, also for good reason, not accept the view of the executive. It is in this sense that “consultation” occurring in Articles 124(2) and 217(1) of the Constitution has to be understood. Primacy to the judiciary is accorded only to this limited extent, but subject to a proviso which will be discussed a little later.”8 (highlights and underlines supplied)
Judicial interpretation based on the Court’s own appreciation of the constitutional scheme enabled it to initially arrogate and then aggressively retain the power to appoint judges. It was able to successfully fend off an attack by a unified political class. Critiques have argued that the constitutional text and conventions that were earlier in existence for appointing judges (from 1950 to 1993) were discarded, to allow supremacy of judiciary acting through the Chief Justice. However, for the Court separation of powers and independence of the judiciary are basic structures of the Constitution and had to be protected at all cost.
On matters of preservation of the traditional judiciary, the Supreme Court has been consistent over two and a half decades. However, the enthusiasm that the Court has displayed in the Second and Third Judges cases and then by striking down the 99th Constitutional amendment has not been witnessed on the issue of wrestling control of tribunals from the political class. While the Supreme Court has from time to time raised its concern in the manner tribunals are being dealt with, it certainly gave a much longer rope to the legislature and executives in its engagement with tribunals.
In Madras Bar Association, 2010 the Supreme Court upon recognising the shortcomings in the appointment-scheme relating to tribunals, referred to the suggestions made earlier in L. Chandra Kumar9 case to hold that:
“70. But in India, unfortunately tribunals have not achieved full independence. The Secretary of the “sponsoring department” concerned sits in the Selection Committee for appointment. When the tribunals are formed, they are mostly dependent on their sponsoring department for funding, infrastructure and even space for functioning. The statutes constituting tribunals routinely provide for members of civil services from the sponsoring departments becoming members of the tribunal and continuing their lien with their parent cadre. Unless wide ranging reforms as were implemented in United Kingdom and as were suggested by L. Chandra Kumar [(1997) 3 SCC 261 : 1997 SCC (L&S) 577] are brought about, tribunals in India will not be considered as independent.”(highlights and underlines supplied)
From the time of L Chandra Kumar’s in 1997 the Court’s observation that “unfortunately tribunals have not achieved full independence” gathers dust in judicial archives. The legislatures have continued to persecute the independence of the parallel judiciary housed in tribunals. There is no evidence to suggest that the Court’s concerns on matters of independence of the parallel judiciary has had any influence on the lawmakers and their executive agents. Even after Madras Bar Association, 2010, the Supreme Court had to strike down the rules of appointment made pursuant to the Finance Act, 2017 in Rojer Mathew’s case10.
When nudged on matters of filling- up vacancies or questioning an appointment of members and chairpersons of tribunals, the Supreme Court has given some definitive rulings. However, the Court contradicted itself and diluted its own decision11 when in the State of Gujarat vs Utility Users Asso., 2018, the Supreme Court held that its earlier view in the PPN case12 that the Chairperson of the Electricity Regulatory Commission has to be a person having legal background has to be read down. The PPN view which was relied upon in Lanco Kondapalli13 was reduced to an obiter-dicta in State of Gujarat, 2018 in the following manner:
“115. Now applying the test to the aforesaid judgment, the proposition is reversed i.e. “the Chairman need not be a Judicial Member”, the fact remains that it would have no impact on the decision in that case, which was related to inter alia the interpretation of Section 86 of the said Act. This, in fact, justifies what we have held aforesaid qua the appointment of a Chairperson from the pool of Judges.
In the context of the question which we are now dealing with, if we were to take the proposition as “no member having knowledge of law is required to be a member of the Commission” then we have a problem at hand. This is so because while interpreting Section 86 of the said Act, it has been expressed that the Commission has the “trappings of the court”, an aspect we have agreed to hereinbefore. Once it has the “trappings of the court” and performs judicial functions, albeit limited ones in the context of the overall functioning of the Commission, still while performing such judicial functions which may be of far-reaching effect, the presence of a member having knowledge of law would become necessary. The absence of a member having knowledge of law would make the composition of the State Commission such as would make it incapable of performing the functions under Section 86(1)(f) of the said Act.”
There is no evidence to show that the Supreme Court has engaged itself with legislative deficits in matters of appointment of members and chairpersons of a tribunal, in a manner that mirrors their judgments on the appointment of judges of the higher judiciary.
In State of Gujarat 2018, the Court though diluted the position taken earlier in the PPN case, the Supreme Court examined (in the context of the composition of tribunals) as to what is the meaning of trappings of the court and the exercise of judicial powers. The relevant observations are as follows:
“104. What else can be called the “trappings of the court”? We are buttressed in our conclusion by judicial pronouncements dealing with the expression “the trappings of the court”. The expression “trappings of the court” initially found mention in a judgment of the Judicial Committee of the Privy Council in Shell Co. of Australia Ltd. v. Federal Taxation Commr. [Shell Co. of Australia Ltd. v. Federal Taxation Commr., 1931 AC 275 (PC)] It was observed by Sankey, LC that there are tribunals with many of the “trappings of a court” but are not courts in the strict sense of exercising judicial power.
107.The Supreme Court also took note of the definition of “judicial power” and “judicial decision” in Huddart, Parker & Co. (Pty) Ltd. v. Moorehead [Huddart, Parker & Co. (Pty) Ltd. v. Moorehead, (1909) 8 CLR 330 at p. 357] and Cooper v. Wilson [Cooper v. Wilson, (1937) 2 KB 309 (CA)] respectively. Griffith, C.J., in the first judgment observed as under:
“The words “judicial power” as used in Section 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action.” (emphasis supplied)
108.In the latter judgment, it was observed as under: (Cooper case [Cooper v. Wilson, (1937) 2 KB 309 (CA)], KB pp. 340-41)
“… ‘A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites:
(1) The presentation (not necessarily orally) of their case by the parties to the dispute;
(2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence;
(3) if the dispute between them is a question of law, the submission of legal argument by the parties; and
(4) a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law.
A quasi-judicial decision equally presupposes an existing dispute between two or more parties and involves (1) and (2), but does not necessarily involve (3) and never involves (4). The place of (4) is in fact taken by administrative action, the character of which is determined by the Minister’s free choice.’”
110. Once we find that the tribunal has the trappings of the court in respect of its functions, we turn to the effect of the same.
116. In the context of the question which we are now dealing with, if we were to take the proposition as “no member having knowledge of law is required to be a member of the Commission” then we have a problem at hand. This is so because while interpreting Section 86 of the said Act, it has been expressed that the Commission has the “trappings of the court”, an aspect we have agreed to hereinbefore. Once it has the “trappings of the court” and performs judicial functions, albeit limited ones in the context of the overall functioning of the Commission, still while performing such judicial functions which may be of far-reaching effect, the presence of a member having knowledge of law would become necessary.”(emphasis supplied)
In the State of Gujarat, 2018 the Court after recognising that Commissions operating under the Electricity Act, 2003 indeed have the trappings of court and are discharging judicial function quite naturally dealt with the issue at hand, which was about the need for a judicial member in the bench. Its unequivocal view was that for all adjudicatory functions, the bench must necessarily have at least one member, who is or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in the practice of law and who has the requisite qualifications to have been appointed as a judge of the High Court or a District Court. While the Court held that in [t]he absence of a member having knowledge of law would make the composition of the State Commission such as would make it incapable of performing the functions under Section 86(1)(f) of the said Act” this disqualification was not immediately applied. Instead, the court grandfathered the fundamental flaw by allowing the prospective application of its judgment. It chose not to disturb the composition of the Commission which did not have a member having knowledge of law. The Commission was allowed to adorn the trappings of court and continue adjudication of disputes even after the court found that its members were not having any knowledge of law. 14
Before this unequivocal view was expressed in 2018 most Commissions15 across India were “performing such judicial functions which may be of far-reaching effect” without the participation of persons lettered in law. The cases before them ranged from the interpretation of the statute and regulations to matters of contract, recorded in complex power purchase agreements. Investors who had reposed trust in India’s legal architecture were subjected to a scheme that was inherently flawed. It is now implicit in the Supreme Court judgment16 that from 2003 to 2018 when India was soliciting large global investments in the power sector, it had given itself a judicial institution that mirrored a kangaroo court.
Although the Court clarified that there should be at least one member having qualification in law for the Commission to discharge adjudicatory function under the Electricity Act, it did not proceed to examine the manner of appointment and the measure of competence of such qualified persons. The overarching executive control over the tribunals in the appointment process did not detain the interest of the Supreme Court. After all, it is the parallel judiciary and not the traditional judiciary that they were dealing with.
Once again in the Rojer Mathew’s case17 the Supreme Court was called upon to decide issues, inter alia, relating to rules for appointments of members of tribunals. The main issue was whether the certain provisions of the Finance Act, 2017 that amended other enactments and altered conditions of service of persons officiating in different tribunals, can be termed as a ‘Money Bill’ under Article 110 of the constitution?
‘Money bills’ under Article 110(1) are those bills that cover subjects specified in sub-clauses (a) to (g) of Article 110. Further, these Money Bills only require the assent of the Lok Sabha, and the role of the Rajya Sabha is merely consultative18. The Court held that its power of judicial review on the decision of the speaker to certify the bill as a Money Bill is extremely limited and for this, the Court relied on their earlier judgment in the KS Puttuswamy’s case (Aadhar 5), where it is held that:
“12. It must be emphasized that the scope of judicial review in matters under Article 110(3) is extremely restricted, with there being a need to maintain judicial deference to the Lok Sabha Speaker’s certification. There would be a presumption of legality in favour of the Speaker’s decision and the onus would undoubtedly be on the person challenging its validity to show that such certification was grossly unconstitutional or tainted with blatant substantial illegality. Courts ought not to replace the Speaker’s assessment or take a second plausible interpretation. Instead, judicial review must be restricted to only the very extreme instance where there is a complete disregard to the Constitutional scheme itself. It is not the function of Constitutional Courts to act as appellate forums, especially on the opinion of the Speaker, for doing so would invite the risk of paralyzing the functioning of the Parliament.” (underline supplied)
Thereafter, the Court formulated the second issue which broadly stated was – what could genuinely form part of a Money Bill. They held that the provisions of Part XIV of the Finance Act, 2017 can be broken down into three broad categories. Firstly, abolition and merger of existing tribunals; secondly, uniformizing and delegating to the Central Government through the rules the power to lay down qualifications; method of appointment and removal, and terms and conditions of service of presiding officers and members; and thirdly, termination of services and payment of compensation to presiding officers and members of certain tribunals that have now become defunct19.
After a detailed analysis, the Supreme Court felt that the matter of the legality of the said provisions of the Finance Act, 2017 under challenge should be referred to a larger bench of 7 judges. For this the Court gave the following reasons:
“124. Upon an extensive examination of the matter, we notice that the majority in K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the impugned enactment without first delineating the scope of Article 110(1) and principles for interpretation or the repercussions of such process. It is clear to us that the majority dictum in K.S. Puttaswamy (Aadhaar-5) did not substantially discuss the effect of the word ‘only’ in Article 110(1) and offers little guidance on the repercussions of a finding when some of the provisions of an enactment passed as a “Money Bill” do not conform to Article 110(1)(a) to (g). Its interpretation of the provisions of the Aadhaar Act was arguably liberal and the Court’s satisfaction of the said provisions being incidental to Article 110(1)(a) to (f), it has been argued is not convincingly reasoned, as might not be in accord with the bicameral Parliamentary system envisaged under our constitutional scheme. Without expressing a firm and final opinion, it has to be observed that the analysis in K.S. Puttaswamy (Aadhaar-5) makes its application difficult to the present case and raises a potential conflict between the judgements of coordinate Benches.
126.There is yet another reason why we feel the matter should be referred to a Constitution Bench of seven judges. L. Chandra Kumar (supra), which was decided by a Bench of seven Judges, had also interpreted on the ambit of supervision by the High Courts under Article 227(1) of the Constitution to observe that the Constitutional scheme does not require all adjudicatory bodies which fall within the territorial jurisdiction of the High Courts should be subject to their supervisory jurisdiction, as the idea is to divest the High Courts of their onerous burden. Consequently, adding to their supervisory functions vide Article 227(1) cannot be of assistance in any manner. Thereafter, it was observed that different tribunals constituted under different enactments are administered by the Central and the State Governments, yet there was no uniformity in administration. This Court was of the view that until a wholly independent agency for 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, the Court observed that the Ministry of Law would be the appropriate ministry. The Ministry of Law in turn was required to appoint an independent supervisory body to oversee the working of the Tribunals. As noticed above, this has not happened. In these circumstances, it would be appropriate if these aspects and questions are looked into by a Bench of seven Judges.” (Underline supplied)
Since the petitioners had also challenged the Finance Act, 201720 on the ground that it suffers from the vice of excessive delegation, the Court was compelled to test this proposition on the basis of well crystalized legal principles. For the Court summarised that a legislation when challenged on grounds of excessive delegation has to necessarily be examined under the following judicially crafted tests – (a) has the Parliament delegated essential legislative functions and (b) does the parent legislation provide the policy and guidelines for making the delegated law21. The law would fail if essential legislative functions of the legislature were held to have been delegated to the subordinate. Similarly, if the law that does not contain policy and guidelines and subordinate authority was left to its on will, such law was also liable to declared unconstitutional.
The Court had to also deal with compelling arguments on the issue of independence of the tribunal and manner in which it was compromised. It then articulated its view on independence in the following manner:
“154. Independence of a quasi-judicial authority like the tribunal highlighted in the above decisions would be, therefore, read as the policy and guideline applicable. Principle of independence of judiciary/tribunal has within its fold two broad concepts, as held in Supreme Court Advocates-On-Record Association v. Union of India40 (See paragraph 714), (i) independence of an individual judge, that is, decisional independence; and (ii) independence of the judiciary or the Tribunal as an institution or an organ of the State, that is, functional independence. Individual independence has various facets which include security of tenure, procedure for renewal, terms and conditions of service like salary, allowances, etc. which should be fair and just and which should be protected and not varied to his/her disadvantage after appointment. Independence of the institution refers to sufficient degree of separation from other branches of the government, especially when the branch is a litigant or one of the parties before the tribunal. Functional independence would include method of selection and qualifications prescribed, as independence begins with appointment of persons of calibre, ability and integrity. Protection from interference and independence from the executive pressure, fearlessness from other power centres – economic and political, and freedom from prejudices acquired and nurtured by the class to which the adjudicator belongs, are important attributes of institutional independence.” (emphasis supplied)
While the court identified the necessary attributes for institutional independence in the judiciary/tribunal, it chose not to apply the same to the legislation under challenge. It accepted the submission made by the Attorney General that the flexibility in the statute is to bring about “uniformity and to harmonise the diverse and wide-ranging qualifications and methods of appointment across different tribunals” in the country. While in paragraph 154 of the judgment the Court recognised the importance of [p]rotection from interference and independence from the executive pressure, fearlessness from other power centres – economic and political, the failure of the Parliament to address these issues in the law they had enacted was not questioned. Instead the Court proceeded to uphold validity the legislation, with the following observation:
“159. Cautioning against the potential misuse of Section 184 by the executive, it was vehemently argued by the learned counsel for the petitioner(s) that any desecration by the Executive of such powers threatens and poses a risk to the independence of the tribunals. A mere possibility or eventuality of abuse of delegated powers in the absence of any evidence supporting such claim, cannot be a ground for striking down the provisions of the Finance Act, 2017. It is always open to a Constitutional court on challenge made to the delegated legislation framed by the Executive to examine whether it conforms to the parent legislation and other laws, and apply the “policy and guideline” test and if found contrary, can be struck down without affecting the constitutionality of the rule making power conferred under Section 186 of the Finance Act, 2017.”(underline supplied)
This was a surprising retreat by the Supreme Court, for the possibility or eventuality of abuse of delegated powers is alone the test that had to be applied when the parent legislation is challenged. How else does one challenge a law on the ground that it suffers the vice of excessive delegation? Surely, a challenge to a subordinate legislation or administrative order is not a substitute to a challenge to the parent statute and also cannot be a justification for denying such legislative challenge. When a rule is challenged, it will not necessarily result in invalidating the statute under which the rule is made. If the statute that delegates legislative power suffers from the vice of excessive delegation, the statute has to then be declared unconstitutional. In any event, the rules under Section 184 of the Finance Act, 2017 had been enacted and was available for the Court to examine. The fact that the rule that was finally struck down was itself evidence of (a) that the parent statute was capable of abuse and (b) the same was in fact abused by the delegated authority. It was no longer in the realms of a possibility. The Court did not identify any policy or guideline of the parent statute that was available and had been violated. For striking down the rule, the court had to rely on violation of the basic structure doctrine of separation of power. It was on account of clear legislative deficits (for want of policy or guidelines) the Central Government had merrily made a rule that went beyond the constitutional boundaries.
But the Supreme Court had its own reasons why it chose not to examine the statute i.e. the Finance Act, 2017 and had to limit its inquiry to the rules that were made in exercise of powers granted to the Central Government under the statute. It was a case of classic deflection – because a Money Bill (the court had refused to hold it otherwise in the earlier part of the same judgment) cannot be put to the tests that apply to an ordinary law. Money Bills do not deal with matters of legislative policy. Since the Supreme Court had refused to examine the Speaker’s certificate certifying the law as a Money Bill and had referred the question (of what can be the contents of a Money Bill) to a larger bench, it was in no position to then apply tests that require deciphering a general policy statement in the Finance Act, 2019, which has not been put to vote in the Rajya Sabha. Once the Court held that the Speaker’s decision was final and judicial review of such decision is limited and highlighted the deficiency in K.S. Puttuswamy (Adhar 5), then no further inquiry could be made on the existence or non-existence of legislative policy and guidelines in the statute. To do so would require them to hold that legislative policy can indeed be a part of a Money Bill and, therefore, examined from the perspective of whether it suffers from the vice of excessive delegation of power. Hence, it was the rule that had to be picked up and torn apart, since the statute could not be touched.
While the Court failed to strike at the root of the problem, it did give relief to the petitioners. The Court applied the doctrine of separation of power, which doctrine was originally crafted to test constitutional amendments. It was now applied to test a rule framed by the Central Government22 and concluded as follows:
“163. We are in agreement with the contentions of the Learned Counsel for the petitioner(s), that the lack of judicial dominance in the Search-cum-Selection Committee is in direct contravention of the doctrine of separation of powers and is an encroachment on the judicial domain. The doctrine of separation of powers has been well recognised and re-interpreted by this Court as an important facet of the basic structure of the Constitution, in its dictum in Kesavananda Bharati v. State of Kerala41, and several other later decisions. The exclusion of the Judiciary from the control and influence of the Executive is not limited to traditional Courts alone, but also includes Tribunals since they are formed as an alternative to Courts and perform judicial functions.
164. Clearly, the composition of the Search-cum-Selection Committees under the Rules amounts to excessive interference of the Executive in appointment of members and presiding officers of statutory Tribunals and would undoubtedly be detrimental to the independence of judiciary besides being an affront to the doctrine of separation of powers.
167. We are of the view that the Search-cum-Selection Committee as formulated under the Rules is an attempt to keep the judiciary away from the process of selection and appointment of Members, Vice-Chairman and Chairman of Tribunals. This Court has been lucid in its ruling in Supreme Court Advocates-on-Record Assn. v. Union of India44(Fourth Judges Case), wherein it was held that primacy of judiciary is imperative in selection and appointment of judicial officers including Judges of High Court and Supreme Court. Cognisant of the doctrine of Separation of Powers, it is important that judicial appointments take place without any influence or control of any other limb of the sovereign. Independence of judiciary is the only means to maintain a system of checks and balances on the working of Legislature and the Executive. The Executive is a litigating party in most of the litigation and hence cannot be allowed to be a dominant participant in judicial appointments.
168. We are in complete agreement with the analogy elucidated by the Constitution Bench in the Fourth Judges Case (supra) for compulsory need for exclusion of control of the Executive over quasi-judicial bodies of Tribunals discharging responsibilities akin to Courts. The Search-cum-Selection Committees as envisaged in the Rules are against the constitutional scheme inasmuch as they dilute the involvement of judiciary in the process of appointment of members of tribunals which is in effect an encroachment by the executive on the judiciary.
The contentions of the Learned Counsel for petitioner(s) are, therefore, duly accepted by this Court insofar as it is contended that the Rules have an effect of dilution of the judicial character in adjudicatory positions. It has been repeatedly ruled by this Court in a catena of decisions that judicial functions cannot be performed by technical members devoid of any adjudicatory experience.” (underline supplied)
The Supreme Court also reiterated its view In Madras Bar Assn. v. Union of India that there is an urgent need to monitor the pressure and/or influence of the Central Government on the members of the tribunals. The Court held that since the tribunal is to replace the High Court, they “must be no less independent or judicious in its composition”.
On matters of qualification, the court clarified that the members of tribunals having replaced courts, including the High Court must possess expertise in law and shall have appropriate legal experience. The Court held:
“Hence, any adjudication transferred to a Technical or Non-Judicial member is a clear act of dilution and an encroachment upon the independence of judiciary. It was further ruled by this Court that even though the legislature has the powers to reorganise or prescribe qualifications for members of Tribunals, it is open for this Court to exercise “judicial review” of the prescribed standards, if the adjudicatory standards are adversely affected.”
Had Finance Act, 2017 provided a constitutionally valid policy and guidelines, the rules would not have suffered the wrath of the court’s constitutional power of judicial review. The law that allowed framing of an illegal rule undoubtedly had serious deficiencies, but then tests applicable to ordinary laws could not be applied in the present case. Though the law remained untouched, the Court did make some useful observations:
“174. ……….Under the present formulation of Rules, the Central Government has widened eligibility by making persons who otherwise have no judicial or legal experience but if they are otherwise of “ability, integrity and standing, and having special knowledge of, and professional experience of” certain specialised subjects “which in the opinion of the Central Government is useful” eligible for being appointed as presiding officers. Further, others who are “qualified to be” Supreme Court and High Court judges can also head Tribunals. A perusal of Articles 124(3) and 217(2) of the Constitution shows that it specifies only the very minimum prerequisites for appointment as a judge of the Constitutional Courts. Instead, a predominant portion of the consideration for appointment to this Court or to the High Courts is uncodified and is based on a holistic consideration of the practice, legal acumen, expertise and character of Advocates. The effect of the new criteria would be to make every second advocate eligible, in effect, vastly diluting the qualifications for appointment. The characteristics necessary of such people are also vague which resultantly increases executive discretion. It thus affects both judicial independence as well as capability and competency of these Tribunals. The power/discretion vested to specify qualifications and decide who should man the Tribunals has to be exercised keeping in view the larger public interest and the same must be just, fair and reasonable and not vague or imprecise.
175. At this juncture it must also be reiterated that equality can only be amongst equals, and that it would be impermissible to treat unequals equally on the basis of undefined contours of ‘Uniformity’. A Tribunal to have the character of a quasi-judicial body and a legitimate replacement of Courts, must essentially possess a dominant judicial character through their members/presiding officers.It was observed in Madras Bar Association (2010) (supra) that it is a fundamental prerequisite for transferring adjudicatory functions from Courts to Tribunals that the latter must possess the same capacity and independence as the former, and that members as well as the presiding officers of Tribunals must have significant judicial training and legal experience. Further, knowledge, training and experience of members/presiding officers of a Tribunal must mirror, as far as possible, that of the Court which it seeks to substitute. Illustratively, the composition of Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, delineating this incongruity is reproduced below for reference:
181. It is essential that the same be observed in letter and spirit and we therefore reiterate that Members and Presiding Officers of Tribunals cannot be removed without either the concurrence of the Judiciary or in the manner specified in the Constitution for Constitutional Court judges.
182. This Court criticised the imposition of short tenures of members of Tribunals in Union of India v. Madras Bar Association, (2010) (supra) and a longer tenure was recommended. It was observed that short tenures also discourage meritorious members of Bar to sacrifice their flourishing practice to join a Tribunal as a Member for a short tenure of merely three years. The tenure of Members of Tribunals as prescribed under the Schedule of the Rules is anti-merit and attempts to create equality between unequals. A tenure of three years may be suitable for a retired Judge of High Court or the Supreme Court or even in case of a judicial officer on deputation. However, it will be illusory to expect a practising advocate to forego his well-established practice to serve as a Member of a Tribunal for a period of three years. The legislature intended to incorporate uniformity in the administration of Tribunal by virtue of Section 184 of Finance Act, 2017. Nevertheless, such uniformity cannot be attained at the cost of discouraging meritorious candidates from being appointed as Members of Tribunals.
183. Additionally, the discretion accorded to the Central or State Government to reappoint members after retirement from one Tribunal to another discourages public faith in justice dispensation system which is akin to loss of one of the key limbs of the sovereign. Additionally, the short tenure of Members also increases interference by the Executive jeopardising the independence of judiciary.
188. In the light of the discussion as aforesaid, we hold that the Rules would require a second look since the extremely short tenure of the Members of Tribunals is anti-merit and has the effect of discouraging meritorious candidates to accept posts of Judicial Members in Tribunals.
189. What appears to be of paramount importance is that every Tribunal must enjoy adequate financial independence for the purpose of its day to day functioning including the expenditure to be incurred on (a) recruitment of staff; (b) creation of infrastructure; (c) modernisation of infrastructure; (d) computerisation; (e) perquisites and other facilities admissible to the Presiding Authority or the Members of such Tribunal. It may not be very crucial as to which Ministry or Department performs the duties of Nodal Agency for a Tribunal, but what is of utmost importance is that the Tribunal should not be expected to look towards such Nodal Agency for its day to day requirements. There must be a direction to allocate adequate and sufficient funds for each Tribunal to make it self-sufficient and self-sustainable authority for all intents and purposes. The expenditure to be incurred on the functioning of each Tribunal has to be necessarily a charge on the Consolidated Fund of India. Therefore, hitherto, the Ministry of Finance shall, in consultation with the Nodal Ministry/Department, shall earmark separate and dedicated funds for the Tribunals. It will not only ensure that the Tribunals are not under the financial control of the Department, who is a litigant before them, but it may also enhance the public faith and trust in the mechanism of Tribunals.”
The Court, however, failed to make a positive statement that matters of – qualification, tenure, reappointment, removal and financial independence of members of tribunals are matters of primary legislation and should not made left to the executive wings of the government, vested with delegated rule-making powers. Can an appointment and removal of judges of the traditional judiciary be left to a rule made by the executives?
Earlier, in a much more purposive manner, the Supreme Court struck down the Parliament’s attempt to create the National Tax Tribunal23 (NTT). The majority view of the Court in Madras Bar Assn. v. Union of India, (2014)24 or the NTT case was as follows:
“134. (i) Parliament has the power to enact legislation and to vest adjudicatory functions earlier vested in the High Court with an alternative court/tribunal. Exercise of such power by Parliament would not per se violate the “basic structure” of the Constitution.
135. (ii) Recognised constitutional conventions pertaining to the Westminster model do not debar the legislating authority from enacting legislation to vest adjudicatory functions earlier vested in a superior court with an alternative court/tribunal. Exercise of such power by Parliament would per se not violate any constitutional convention.
136. (iii) The “basic structure” of the Constitution will stand violated if while enacting legislation pertaining to transfer of judicial power, Parliament does not ensure that the newly created court/tribunal conforms with the salient characteristics and standards of the court sought to be substituted.
137. (iv)Constitutional conventions pertaining to the Constitutions styled on the Westminster model will also stand breached, if while enacting legislation, pertaining to transfer of judicial power, conventions and salient characteristics of the court sought to be replaced are not incorporated in the court/tribunal sought to be created.
138. (v) The prayer made in Writ Petition (C) No. 621 of 2007 is declined. Company Secretaries are held ineligible for representing a party to an appeal before NTT.
139. (vi) Examined on the touchstone of Conclusions (iii) and (iv) (contained in paras 136 and 137, above) Sections 5, 6, 7, 8 and 13 of the NTT Act (to the extent indicated hereinabove), are held to be unconstitutional. Since the aforesaid provisions constitute the edifice of the NTT Act, and without these provisions the remaining provisions are rendered ineffective and inconsequential, the entire enactment is declared unconstitutional.”
Nariman R. J., gave a separate but concurring opinion, where he addressed the core issue and proceeded to also hold the law to be unconstitutional. Nariman J., view are as follows:
“141. The precise question arising in these appeals concerns the constitutional validity of the National Tax Tribunal Act, 2005. The question raised on behalf of the petitioners is one of great public importance and has, therefore, been placed before this Constitution Bench. Following upon the heels of the judgment in Union of India v. Madras Bar Assn. [Union of India v. Madras Bar Assn., (2010) 11 SCC 1] , these matters were delinked and ordered to be heard separately vide judgment and order dated 11-5-2010 in Madras Bar Assn. v. Union of India [(2010) 11 SCC 67] . The precise question formulated on behalf of the petitioners is whether a tribunal can substitute the High Court in its appellate jurisdiction, when it comes to deciding substantial questions of law.
179. L. Chandra Kumar [L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S) 577] and Madras Bar Assn. [Union of India v. Madras Bar Assn., (2010) 11 SCC 1] have allowed tribunalisation at the original stage subject to certain safeguards. The boundary has finally been crossed in this case. I would, therefore, hold that the National Tax Tribunals Act is unconstitutional, being the ultimate encroachment on the exclusive domain of the superior Courts of Record in India.”
While accepting tribunalisation at the original stage, the Supreme Court is keen to ensure that jurisdiction of the superior judiciary that has the ability to declare law on a variety of subjects is not compromised. According to the Court, the Parliament has the constitutional obligation to ensure that the newly created tribunal conforms with the salient characteristics and standards of the court sought to be substituted.
Subsequently in Madras Bar Association (2015), the Supreme Court reiterates its position in Madras Bar Asso., 2010, lectured in the manner as follows25:
“14. First of all the creation of constitution of Nclat has been specifically upheld in the 2010 judgment [(2010) 11 SCC 1]. It cannot be denied that this very petitioner had specifically questioned the constitutional validity of Nclat in the earlier writ petition and even advanced the arguments on this very issue. This fact is specifically noted in the said judgment. The provision pertaining to the constitution of the Appellate Tribunal i.e. Section 10-FR of the Companies Act, 1956 was duly taken note of. Challenge was laid to the establishments of NCLT as well as Nclat on the ground that Parliament had resorted to tribunalisation by taking away the powers from the normal courts which was essentially a judicial function and this move of the legislature impinged upon the impartiality, fairness and reasonableness of the decision-making which was the hallmark of judiciary and essentially a judicial function. Argument went to the extent that it amounted to negating the rule of law and trampling of the doctrine of separation of powers which was the basic feature of the Constitution of India. What we are emphasising is that the petitions spearheaded the attack on the constitutional validity of both NCLT as well as Nclat on these common grounds. The Court specifically went into the gamut of all those arguments raised and emphatically repelled the same.
15. The Court specifically rejected the contention that transferring judicial function, traditionally performed by the courts, to the Tribunals offended the basic structure of the Constitution and summarised the position in this behalf as under: (Madras Bar Assn. case [(2010) 11 SCC 1] , SCC pp. 57-58, para 106)
“106. We may summarise the position as follows:
(a) A legislature can enact a law transferring the jurisdiction exercised by courts in regard to any specified subject (other than those which are vested in courts by express provisions of the Constitution) to any Tribunal.
(b) All courts are Tribunals. Any Tribunal to which any existing jurisdiction of courts is transferred should also be a judicial Tribunal. This means that such Tribunal should have as members, persons of a rank, capacity and status as nearly as possible equal to the rank, status and capacity of the court which was till then dealing with such matters and the members of the Tribunal should have the independence and security of tenure associated with judicial Tribunals.
(c) Whenever there is need for ‘Tribunals’, there is no presumption that there should be Technical Members in the Tribunals. When any jurisdiction is shifted from courts to Tribunals, on the ground of pendency and delay in courts, and the jurisdiction so transferred does not involve any technical aspects requiring the assistance of experts, the Tribunals should normally have only Judicial Members. Only where the exercise of jurisdiction involves inquiry and decisions into technical or special aspects, where presence of Technical Members will be useful and necessary, Tribunals should have Technical Members. Indiscriminate appointment of Technical Members in all Tribunals will dilute and adversely affect the independence of the judiciary.
(d) The legislature can reorganise the jurisdictions of judicial Tribunals. For example, it can provide that a specified category of cases tried by a higher court can be tried by a lower court or vice versa (a standard example is the variation of pecuniary limits of courts). Similarly while constituting Tribunals, the legislature can prescribe the qualifications/eligibility criteria. The same is however subject to judicial review. If the court in exercise of judicial review is of the view that such tribunalisation would adversely affect the independence of the judiciary or the standards of judiciary, the court may interfere to preserve the independence and standards of judiciary. Such an exercise will be part of the checks and balances measures to maintain the separation of powers and to prevent any encroachment, intentional or unintentional, by either the legislature or by the executive.”
While reinforcing the ability of the Parliament to create an original tribunal with one appellate level, the Court distinguished the NCLT scheme from that of the National Tax Tribunal. The relevant observation of the Court are as follows:
“19. Thirdly, NTT was a matter where power of judicial review hitherto exercised by the High Court in deciding the pure substantial question of law was sought to be taken away to be vested in NTT which was held to be impermissible. In the instant case, there is no such situation. On the contrary, NCLT is the first forum in the hierarchy of quasi-judicial fora set up in the 2013 Act. NCLT, thus, would not only deal with question of law in a given case coming before it but would be called upon to thrash out the factual disputes/aspects as well. In this scenario, Nclat which is the first appellate forum provided under the 2013 Act to examine the validity of the orders passed by NCLT, will have to revisit the factual as well as legal issues. Therefore, situation is not akin to NTT. Jurisdiction of the Appellate Tribunal is mentioned in Section 410 itself which stipulates that Nclat shall be constituted “for hearing appeals against the orders of the Tribunal”. This jurisdiction is not circumscribed by any limitations of any nature whatsoever and the implication thereof is that appeal would lie both on the questions of facts as well as questions of law. Likewise, under sub-section (4) of Section 421, which provision deals with “appeal from orders of Tribunal”, it is provided that Nclat, after giving reasonable opportunity of being heard, “pass such orders thereon as it thinks fit, forming, modifying or setting aside the order appealed against”. It is thereafter that further appeal is provided from the order of Nclat to the Supreme Court under Section 423 of the 2013 Act. Here, the scope of the appeal to the Supreme Court is restricted only “to question of law arising out of such order”.
20. Fourthly, it is not unknown rather a common feature/practice to provide one appellate forum wherever an enactment is a complete code for providing judicial remedies. Providing one right to appeal before an appellate forum is a well-accepted norm which is perceived as a healthy tradition.
21. For all these reasons, we hold that there is no merit in this issue.” (Underline Supplied)
The Supreme Court had clearly resigned itself to the fact that creation of tribunals and craving out of judicial functions from courts (in order to vest them elsewhere) was not only constitutionally permissible, it also went a long way in reducing the burden of courts. At the same time, it was also conscious of the fact that tribunalisation had not really resulted in faster disposal of cases and that several flaws existed in the overall architecture. The manner of appointment of members of the Appellate Tribunals (which was seen as a substitute of High Courts) and departure from practices generally followed in relation to appointments in the case of superior courts, continued to be a matter of concern. Along with this, the Supreme Court also felt that being routinely vested with the second appellate jurisdiction over tribunals was a distraction. It affected its primary role of it being constitutional court; to be able to decide matters of greater constitutional importance. It vented out its feelings on these issues in State of Gujarat vs. Essar Power Ltd., 2016,26 in the following words:
“33. The above resume of law laid down by this Court may call for review of composition of tribunals under the Electricity Act or other corresponding statutes. Appeals to this Court on question of law or substantial question of law show that tribunals deal with such questions or substantial questions. Direct appeals to this Court have the result of denial of access to the High Court. Such tribunals thus become substitute for the High Courts without manner of appointment to such tribunals being the same as the manner of appointment of the High Court Judges. A perusal of Sections 113(b)(i) to (iii) and 113(3) read with Section 78, Sections 84, 85 and 125 of the Electricity Act and corresponding provisions of similar Acts may, thus, need a fresh look.
34. It may also be noted that in some tribunals (for example, the Tribunal constituted under the Telecom Regulatory Authority of India Act, 1997), the tribunal exercises original jurisdiction to the exclusion of all courts and is located only at Delhi [ Sections 14 and 15]. It may further be noted that normally tenure of office of the Chairman and members is of short duration of three to five years. Access to justice may not be, thus, available with the convenience with which it is available when jurisdiction is with the local civil courts sought to be substituted. Such provisions may need review in larger public interest and for providing access to justice.
35. Apart from the above aspect, further question is whether providing appeals to this Court in routine, without there being issues of general public importance, is not a serious obstruction to the effective working of this Court.
36. This issue has already been subject-matter of debate. In an article by Shri T.R. Andhyarujina former Solicitor General of India, titled “Restoring the Character and Stature of the Supreme Court of India” [(2013) 9 SCC J-43] the learned author states that it was necessary to restore the character and stature of the Supreme Court. The jurisdiction of the Supreme Court should by and large be limited to matters of constitutional importance and matters involving substantial questions of law of general importance. The Supreme Court of India, like Apex Courts in other jurisdictions, was not to be a final court to decide ordinary disputes between the parties. The highest court has its unique assigned role. But after the year 1990, the Supreme Court is losing its original character and becoming a general court of appeal by entertaining and deciding cases which do not involve important constitutional issues or issues of law of national importance. The adverse effect of this trend is that matters of constitutional importance are not getting the due priority and are pending for several years. Reference has been made to the Statement of Objects for amending the Supreme Court (Number of Judges) Act, 1956 in the year 2008, to the effect that: (SCC p. J-45)
“… It has not been possible for the Chief Justice of India to constitute a five-Judge Bench on a regular basis to hear the cases involving interpretation of constitutional law as doing that would result in constitution of less number of Division Benches which in turn would result in delay in hearing of other civil and criminal cases.”
In spite of the said amendment to increase strength of Judges to 31, larger Benches to decide constitutional and important cases have not been regularly functioning. On account of increase in the number of issues other than constitutional law or substantial questions of general importance, all the Benches are engaged in handling the heavy routine work. The courtrooms are so crowded that it is hardly possible to enter a courtroom or to pass through the corridors. “No other Supreme Court presents such an undignified sight.” Further reference has been made to functioning of other Supreme/highest courts in the world to emphasise that the highest courts are engaged in deciding cases of national importance by larger Benches of 9/11 Judges while the Supreme Court of India is deciding most of the cases by Benches of two Judges, which has its own adverse implications. Reference has also been made to the discussion between Sir B.N. Rau, the Constitutional Advisor and Justice Frankfurter of the US Supreme Court that the jurisdiction exercisable by the Supreme Court should be exercised by Full Court. It is further stated that the highest court should have limited number of cases and should not be overloaded. On an average, in a year 80 cases are decided by the Supreme Court of UK, the Canadian Supreme Court and the Australian High Court. Thirty-eight cases are decided by the Constitutional Court of South Africa in a year. The Supreme Court of India is deciding a large number of cases and the reports in the cases sometimes run up to 19 volumes in a year with only a few cases of real constitutional or of national importance. In Australia there is no appeal to the highest court as of right and the cases are entertained only if they are of public importance. They are to resolve difference of opinion in different courts. This was necessary to preserve efficiency and standing. Reference is also made to the expert opinion that no litigant should get more than two chances in litigation. It is further stated that: (SCC pp. J-48 to J-49)
“… The Supreme Court of India must cease to be a mere court of appeal to litigants and a daily mentor of the Government, if it is to preserve its pristine character, dignity and stature comparable to the Supreme Court in other jurisdictions.”
The article ends with the observation: “This requires a national debate by Judges, lawyers, jurists and informed public.”
40. While there may be no lack of legislative competence with Parliament to make provision for direct appeal to the Supreme Court from orders of tribunals but the legislative competence is not the only parameter of constitutionality. It can hardly be gainsaid that routine appeals to the highest court may result in obstruction of the constitutional role assigned to the highest court as observed above. This may affect the balance required to be maintained by the highest court of giving priority to cases of national importance, for which larger Benches may be required to be constituted. Routine direct appeals to the highest court in commercial litigation affecting individual parties without there being any issue of national importance may call for reconsideration at appropriate levels. Further question is composition of tribunals as substitutes for High Courts and exclusion of High Court jurisdiction on account of direct appeals to this Court. Apart from desirability, constitutionality of such provisions may need to be gone into. We are, however, not expressing any opinion on this aspect at this stage.
41. We are, thus, of the view that in the first instance the Law Commission may look into the matter with the involvement of all the stakeholders.
42. We make it clear that as far as heavy pendency in this Court on account of liberal exercise of jurisdiction under Article 136 of the Constitution of India is concerned, we do not wish to make any comment as this is a matter in the discretion of the Court and it is for the Court to address this issue. Our discussion is limited to the consideration of desirability of providing statutory appeals directly to this Court from orders of tribunals on issues not affecting national or public interest and other aspects of statutory framework in respect of tribunals as discussed above.
43. The questions which may be required to be examined by the Law Commission are:
43.1 Whether any changes in the statutory framework constituting various tribunals with regard to persons appointed, manner of appointment, duration of appointment, etc. is necessary in the light of the judgment of this Court in Madras Bar Assn. [Madras Bar Assn. v. Union of India, (2014) 10 SCC 1] or on any other consideration from the point of view of strengthening the rule of law?
43.2. Whether it is permissible and advisable to provide appeals routinely to this Court only on a question of law or substantial question of law which is not of national or public importance without affecting the constitutional role assigned to the Supreme Court having regard to the desirability of decision being rendered within reasonable time?
43.3. Whether direct statutory appeals to the Supreme Court bypassing the High Courts from the orders of Tribunal affects access to justice to litigants in remote areas of the country?
43.4. Whether it is desirable to exclude jurisdiction of all courts in the absence of equally effective alternative mechanism for access to justice at grass root level as has been done in provisions of the Tdsat Act (Sections 14 and 15).
43.5. Any other incidental or connected issue which may be considered appropriate.
44. We request the Law Commission to give its report as far as possible within one year. Thereafter the matter may be examined by the authorities concerned.” (underline supplied)
The Law Commission gave a report in October 201727. After summarising the various principles laid down by the Supreme Court over the years, it gave general recommendations on predictable lines. With no real take-aways, the report supports the current structure with certain legislative safeguards. It also does not adequately answer all the concerns raised by the Court in the State of Gujarat, 2016 judgment. The Law Commission does not suggest the need to create separate cadre for the appointment of Members and Chairpersons of tribunals and instead recommends the increase in age.
While taking judicial notice of the 272nd Law Commission Report in Rojer Mathew’s, 2019, the Supreme Court proceeded to make certain telling observations that points towards its engagement on matters of self-preservation and propagation. The Supreme Court ignores that fact that the retirement age of members and chairpersons of the tribunals vastly exceeds the retirement age of judges and career bureaucrats. The rationale for providing the retirement age of judges or bureaucrats, constitutionally or otherwise, does not apply to the parallel judiciary. As a result, about 50 retired Supreme Court judges and 150 High Court judges have been found suitable to officiate as members or chairpersons in tribunals28. The number of retired bureaucrats exceeds the sum of the above. In this context, the following observations of the Court in Rojer Mathews’s 2019 are relevant:
“176. It appears to us to be incomprehensible as to how both Supreme Court and High Court judges can be eligible for the same post when their experience, exposure, knowledge and stature under the Constitution are vastly different and the two do not form one homogenous class. There can be no forced equality between the two. Doing so would be suggestive of non-application of mind. Such an exercise would merit judicial interference.
177. Further, dispensation of justice requires that the adjudicating institution command respect with the populace. Anomalous situations created by allowing High Court judges to be appointed to a position occupied earlier by a Supreme Court judge, affects the prestige of the Judiciary as an institution.
178. The stature of the people manning an institution lends credibility and colour to the institution itself. There is a perceptible signalling effect in having retired Supreme Court justices as presiding officers of a particular Tribunal of National importance. The same instils an inherent fairness, dignity and exalted status in the Tribunal. Permitting such institutions to be also occupied by persons who have not manned an equivalent position or those with lesser judicial experience, does not bode well for the Tribunal besides discouraging competent people from offering their services. On the same analogy, it would be an anathema to say that High Court judges and District Court judges can both occupy the same position in a Tribunal.”
There is no evidence of sitting judges of High Courts and the Supreme Court resigning from their position in order to take their knowledge, experience and stature to the folds of the parallel judiciary of tribunals. What they effectively take is a lifeline – for a new employment opportunity, after retiring from the traditional judiciary. The Court while making the above observations (on the incomprehensibility of how Supreme Court and High Court could be eligible for the same post) is oblivious of the fact that they are now on dealing with the qualifications of retired judges (for a post-retirement appointment) and not sitting judges. Judges retiring from the High Courts have for several reasons, not always a reflection of their merit, have failed to become judges of the Supreme Court. Similarly, several deserving District Judges have not been elevated to the High Court. Then for the Supreme Court to say that the stature of an active judge in a tribunal depends on his immediate past position is a statement that completely ignores individual merit (and qualifications for the job) and places judicial appointments at par with a feudal justice system of courts and courtiers.
The question that is often asked, is whether the Court has fallen in the trap set up by the political establishment? Each legislation that provides for the appointment of a retired bureaucrat (as non-judicial member of the tribunal) often ensures that the other seat in the tribunal is reserved for a retired judge. This legislative ‘give and take’ is not as seen offensive to the high priests of independent judiciary. The parallel judiciary mostly, if not entirely, is run by retired civil servants and retired judges. This issue was articulated by Late Arun Jaitley (as the Leader of the Opposition) during a debate on a judicial appointments commission in the Rajya Sabha on 5th September 2013, when he said:
“Secondly, I think, we are going a bit too far now, in every legislation, in creating post-retirement avenues for Judges. There is a proposal through which you want to increase the age. Please, do it, but with a condition, that almost everyone, barring a few notable honourable men, who are an exception, wants a job after retirement. And we are lavishly creating it for them. If we don’t create it, they themselves create it.
I am glad the Supreme Court has reviewed its verdict saying every member of the CIC must be a retired judge. You have a situation where what should be the fees of a college is an accounting method, it is an accounting concept. The Supreme Court by a judicial order said, “Fees of medical colleges and engineering colleges must be fixed by retired judges.”
And, then, in every State, it created two more jobs. I think this whole temptation of continuing to occupy a Lutyens Bungalow is a very serious temptation. Therefore, kindly review that unless it is absolutely essential, either some of these tribunals must be subsumed into the judicial set up, pay the retired judges a pension equal to their last drawn pay because the danger is greater. The desire of a post-retirement job influences pre-retirement judgements. It is a threat to the independence of the Judiciary. Once it influences pre-retirement judgements, it adversely impacts the functioning of our Judiciary itself.”29
The disputes that arise before tribunals undoubtedly require coercive adjudication based on exacting legal and technical principles. While State Governments after the State of Gujarat, 2018 have started appointing judicial members, in several States the seat of the chairperson continues to be occupied by a retired but more dominant bureaucrat. Though there are few exceptions, the executive pogrom is definitive. In order to provide both institutional and functional independence to tribunals, the Supreme Court has to strike at the root of the appointment process. Half measures from the time of L. Chandrakumar (1997) failed to correct the situation. But then could the post-retirement benefits be the reason for holding back?
All views expressed are personal.
- See, S.P Sampath Kumar (1987) 1 SCC 124; L Chandra Kumar (1997) 3 SCC 261; Delhi High Bar Association (2002) 4 SCC 275; Madras Bar Asso. (NCLT) (2010) 11 SCC 1; Madras Bar Asso.(NTT) (2014) 10 SCC 1; State of Gujarat v. Utility Users’ Welfare Assn., (2018) 6 SCC 21 : 2018 SCC OnLine SC 368; Rojer Mathew v. South Indian Bank Ltd.& Ors.(Civil Appeal No. 8588 of 2019) dated 13-11- 2019; 2019 (369) ELT 3 (SC) :2019 SCC OnLine SC 1456. ↩
- Union of India v. Madras Bar Assn., (2010) 11 SCC 1 ↩
- See, Tribunals, Arun K. Thiruvengadam, Oxford Handbook on Indian Constitution, 2016, Edited by Sujit Choudhury, Madhav Khosala and Pratap Bhanu Mehta ↩
- Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1 : 2015 SCC OnLine SC 964 ↩
- Supreme Court Advocates-on-Record Assn. v. Union of India, (1993) 4 SCC 441 ↩
- Special Reference No. 1 of 1998, Re, (1998) 7 SCC 739 ↩
- Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1 : 2015 SCC OnLine SC 964 ↩
- Madan B. Lokur, J. in Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1 : 2015 SCC OnLine SC 964 at page 611 ↩
- L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S) 577 ↩
- Rojer Mathew v. South Indian Bank Ltd.& Ors.(Civil Appeal No. 8588 of 2019) dated 13-11- 2019; 2019 (369) ELT 3 (SC) :2019 SCC OnLine SC 1456. ↩
- Sanjay Kaul’s distinguishes PPN in State of Gujarat. ↩
- T.N. Generation & Distribution Corpn. Ltd. v. PPN Power Generating Co. (P) Ltd., (2014) 11 SCC 53 : 2014 SCC OnLine SC 298; A.P. Power Coordination Committee v. Lanco Kondapalli Power Ltd (2016) 3 SCC 468 ↩
- A.P. Power Coordination Committee v. Lanco Kondapalli Power Ltd (2016) 3 SCC 468 ↩
- State of Gujarat v. Utility Users’ Welfare Assn., (2018) 6 SCC 21 : 2018 SCC OnLine SC 368 ↩
- Constituted under Sections 76 and 82 of the Electricity Act, 2003 ↩
- State of Gujarat v. Utility Users’ Welfare Assn., (2018) 6 SCC 21 : 2018 SCC OnLine SC 368 ↩
- Rojer Mathew v. South Indian Bank Ltd.& Ors.(Civil Appeal No. 8588 of 2019) dated 13-11- 2019; 2019 (369) ELT 3 (SC) :2019 SCC OnLine SC 1456. ↩
- Ordinary bills, unlike money bills, can be blocked by the Rajya Sabha, when then acts as a check on the power of the Lok Sabha. ↩
- Rojer Mathew v. South Indian Bank Ltd.& Ors.(Civil Appeal No. 8588 of 2019) dated 13-11- 2019; 2019 (369) ELT 3 (SC) :2019 SCC OnLine SC 1456 at para 114 ↩
- Section 184 ↩
- Issn re: The Delhi Laws Act, ; Ramesh Birch v. Union of India; M.K. Papiah & Sons v. Excise Commissioner; Keshavlal Khemchand and Son Private Limited v. Union of India; Gwalior Rayon Silk Mfg. (Wvg.) Co. v. Asstt. Commissioner of Sales ↩
- Kehar’s J., view in Puttuswamy (Aadhar 5) that basic structure doctrine is only available to test constitutional amendments and not legislation was ignored. ↩
- National Tax Tribunal Act, 2005 ↩
- Madras Bar Assn. v. Union of India, (2014) 10 SCC 1 (5 Judges) ↩
- Madras Bar Assn. v. Union of India, (2015) 8 SCC 583 ↩
- Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd., (2016) 9 SCC 103 ↩
- 272nd Report of the Law Commission ↩
- Rojer Mathew v. South Indian Bank Ltd.& Ors.(Civil Appeal No. 8588 of 2019) dated 13-11- 2019; 2019 (369) ELT 3 (SC) :2019 SCC OnLine SC 1456 at para 70 ↩
- Parliamentary Debates – Rajya Sabha Official Report Vol .229 No. 19,Government Bills– The Constitution (One Hundred and Twentieth Amendment) Bill, 2013 at page 58. The debate can be found here: http://220.127.116.11/Official_Debate_Nhindi/Floor/229/F05.09.2013.pdf (last visited on 15th May, 2020 at 11.37 p.m.) ↩