case commentary

Madras bar association vs union of india

the case of madras bar association vs union of india is considered one
of the most important case when it comes to case dealing with
provisions of companies act.under the income tax act,customs act,1962
and the central excise act,1944 national tax tribunal(NTT) was
constituted as a quasi-judicial appellate tribunal and had been vested
with the power of adjudicating appeals arising from orders of appellate
tribunals. before this enactment of this legislation high courts were
conferred with appellate jurisdiction.so madras bar association with
others filed a petition regarding issue of national tax tribunal.so issue
because of which they filed a petition was whether national tax tribunal
has the power to decide'substantial question of law' in front of supreme
court.supreme court contended that the legislation violates the basic
structure of our constituion of india by impinging the power of judicial
review which is vested in the high court.the petitioners also said that
the "national tax tribunal in the manner of its constituition that
undermines the process of independence and fairness.it undermines
the process of independence and fairness which are sine que non of
adjudicatory authority.in other words principal point of argument was
that powers and functions of the high court cannot be given or
substituted by an extra-judicial body,like NTT.it addition to it,it was also
argued that essential characteristics of a judicial body like
independence and fairness was abesnt in NTT functioning.so the main
issue of the case whether national national tax tribunal violates basic
structure of the constitution.

so the decision given by the by the constitution bench which included

justicde R.M.lodha,(CJ) justice khehar,justice chelameswar and justice
A.K. sikri ruled that sections like 5,6,7,8 and 13 of the National Tribunal
Act are unconstitutional.justice R.F.Nariman gave a separate opinion
declared the National Tax Tribunal unconstitutional on two grounds,first
in separation of powers between judiciary and executive and second
point being judicial independence.the majority of the bench came on
the decision that the parliament cannot take away power of a court and
vest the power in something which is not a court by nature.the
supreme court found the following core issues and answered them

· power of legislature to transfer judicial functions performed by

court to tribunals

the court observed that the constituition regulates governance manner

and said the constitution vests the power of legislation with center,with
lok sabha and rajya sabha and in states with the state legislatives
assembly.the legislative power is regulated by "Part XI" of the
constitution and leads to the determination that "basic structure"is
invoilable.court also said in every new constitution which makes
separate provisions for legislature,executive and judiciary it is taken as
acknowledged that "separation of powers"would apply and the power
of discharging judicial function which was exercised at the time of
promulgation of the new constitutuion was exercised by the members
of higher judiciary.however it will be ensured that the appointment and
security of the judges of the court would be same as of the court sought
to be substituted.

· Appointment of judicial members and restriction on appointment

of technical members

on this issue court said that the members of NTT will be confronted
with legal issues,emerging out of family law,hindu law.company
law,laws related to territory ,tust and socities,contract law,intellectual
property etc and from time to time NTT will have to interpret the
provisions of three statues out of which appeals will be heared and will
also examine a challenge a vires of statutory amendment made in said
provisions from time to time.

· constitutional validity of section 5 of the NTT act

in this issue court observed that even though we have expressed the
view it is open to parliament to substitute the appelate jurisdiction with
high courts and constitute with tribunal.

· constitutional validity of section 6 of NTT act

on this issue court observed that this court has declared the position on
the behalf of L.chandra kumar case and in union of india vs madras bar
association case,technical members could be appointed to the tribunals
where expertise of technician is essential for disposal of matters.it has
also been held that when the adjudicatory process is transferred to
tribunal does not involve specialised skill or knowledge or expertise of a
provison for appointment of non-judicial members in this case it will
constitute for a clear case of delusion and enroachment upon the
"independence of judiciary" and the "rule of law".since the chairperson
of or members of NTT will determine "substantial questions of
law",coming out of decisions of the appellate tribunals it is not easy to
appreciate how an individual would be able to discharge such
functions .like this it is also difficult for us to understand how technical
person who may not possess qualification of law or have no experience
at all in practice of law would be able to deal with "substantial question
of law"for which only NTT has been constituted.
so we have noticed from data by the counsel for the petitioners that
NTT would be confronted with disputes out of family law,hindu
law,company law,law of partnership,law related to trusts and
society,contract law,law relating to transfer of property,intellectual
property,interpretation of statues/rules and other miscellaneous
provisions of law also members of NTT will have to regularly interpret
provisions of income tax act,the customs act and the excise act also a
person possessing professional qualification in law with substantial
experience in practice of law,they will be in a position handle the
responsibilities which a chairperson and members of NTT will have to
shoulder.there seems no doubt that members of a court or a tribunal
which have adjudicatory functions must be manned judges/members
whose stature qualifications commensurate to court.

· constitutuional validity of section 7 of NTT Act

on this issue court observed that it should be forgotten that under the
provision of administrative act 1985 which come up in consideration in
L.Chandra kumar case tribunals constituted under the act.all decisions
of the tribunal act,1985 were jurisdictional to the high courts.L.chandra
kumar case adopted for a tribunal of the nature as NTT.so the
acknowledged position is that NTT has been constituted as a
replacement of high courts. so NTT in the real sense is a tribunal
substituting the high courts .section 7 cannot be considered
constituionally valid because it includes the process of selection and
appointment of chairperson and members of NTT.

· constitutuional validity of section 8 of NTT Act

on this issue court observed that section 8 of NTT act it clearly emerges
from persual that a chairperson/member is appointed to NTT for a
duration of 5 years.that chairperson is or member is reappointment for
a further period of 5 years. every chairperson or member appointed to
NTT will be allowed to decide mattters only which ensure his
reappointment in terms of section 8 of the NTT act.the above provision
under independence and fairness of the chairperson and members of
NTT.the reason for instant conclusions are exactly the same as it was
expressed in dealing with section 5of the NTT act.so we therfore held
that section 8 of NTT act is unconstitutional.so the court concluded that
the section 5,6,7,8 and 13 are illegal and unconstitutional based on the
constitutional convention as developed in various nations on the model
of westminister and on the parameters laid down by the supreme
court.nariman j dissented in the rationale but decision made a
distinction between the present case and the decision in R gandhi
case.

so in the present case the legal position is entirely different as the

power of the high court was being supplanted by a tribunal which willl
only decide substantial questions of law.so the supreme court did
summarization of the legal position of tribunaliization in india as

· parliament has the power to enact legislation and also to vest

adjudicatory functions vested with high court with alternative
tribunals or courts and exercise of power by parliament would
not violate the "basic structure" of the constitution.

· the "basic structure"of the constitution will be said violated if

while enacting legislation pertaining to transfer of judicial
power.parliament also said that characteristics as well as
standards of the courts be substituted.

· constitutional conventions pertaining to styled on the west

 minister model will stand breached also while enacting legislation
to transfer of judicial power ,conventions and characteristics of
the court to be replaced are not incorporated the court/tribunal
to be created.

so finally,the supreme court held that conclusion of (3) and (4) sections
5,6,7,8 and 13 of the NTT act are held to be unconstitutional.since
aforesaid provisions constitute the edifice of the NTT act and without
these provisions remaining provisions are ineffective and
inconsequential,the entire enactment is declared unconstitutional.

name-Sarthak wadhani

roll no-skp182k0044

course-constitutional law

programme-BA Law and Politics