URL- https://www.thehindu.

com/opinion/lead/whither-tribunal-
independence/article30957940.ece

Whither tribunal independence?

The reframed Tribunal rules are in contempt of several Constitution Bench decisions of the
Supreme Court

In November 2019, a Constitution Bench of the Supreme Court, in Rojer Mathew, declared the
Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and other
Conditions of Service of Members) Rules, 2017 as unconstitutional for being violative of
principles of independency of the judiciary and contrary to earlier decisions of the Supreme
Court in the Madras Bar Association series. In Rojer Mathew, there was also a direction to the
Central government to reformulate the rules strictly in accordance with principles delineated by
the Court in its earlier decisions. The reframed rules, notified on February 17 by the Ministry of
Finance, however, suffer from the same vices.

Through Part XIV of the Finance Act, 2017, around 26 Central statutes were amended, and the
power to prescribe eligibility criteria, selection process, removal, salaries, tenure and other
service conditions pertaining to various members of 19 tribunals were sub-delegated to the rule-
making powers of the Central government. Describing the search-cum-selection-committee as an
attempt to keep the judiciary away from the process of selection and appointment of members,
vice-chairman and chairman of tribunals, the Court held that the executive is a litigating party in
most of the litigation and hence cannot be allowed to be a dominant participant in tribunal
appointments. Further, reiterating its previous decision in Madras Bar Association (2010), the
Court held that the tenure of three years for members will “preclude cultivation of adjudicatory
experience and is thus injurious to the efficiency of the Tribunals”.

In the 2017 rules, as noted by the Court in Rojer Mathew, barring the National Company Law
Appellate Tribunal (NCLAT), the selection committee for all other tribunals was made up either
entirely from personnel within or nominated by the Central government or comprised a majority
of personnel from the Central government. While the selection committee for NCLAT consisted
of two judges and two secretaries to the Government of India, all other committees comprised
only one judge and three secretaries to the Government of India. Now, in the 2020 rules, by
default, all committees consist of a judge, the president/chairman/chairperson of the tribunal
concerned and two secretaries to the Government of India.

An equal say for judiciary

The common thread in the Madras Bar Association series and Rojer Mathew decisions is that
judiciary must have an equal say in the appointment of members of the tribunals. In other words,
to deny the executive an upper hand in appointing members to tribunals, the court ordered to
have two judges of the Supreme Court to be a part of the four-member selection committee. In
Madras Bar Association (2010), a Constitution Bench dealing with the validity and appointment
of members to the National Company Law Tribunal (NCLT) under the Companies Act, 1956,
held that the selection committee should comprise the Chief Justice of India or his nominee
(chairperson, with a casting vote), a senior judge of the Supreme Court or Chief Justice of the
High Court, and secretaries in the Ministry of Finance and Ministry of Law and Justice
respectively. Subsequent Constitution Bench decisions in Madras Bar Association (2014), Rojer
Mathew and the decision of the Madras High Court in Shamnad Basheer have repeatedly held
that the principles of the Madras Bar Association (2010) are applicable to the selection process
and constitution of all tribunals in India.

Under the 2020 rules, the inclusion of the president/chairman/chairperson of the tribunal as a
member in the selection committee is in the teeth of previous decisions of the Supreme Court.
For instance, now, in the Income Tax Appellate Tribunal (ITAT), Customs Excise and Service
Tax Appellate Tribunal (CESTAT), Central Administrative Tribunal (CAT), Debt Recovery
Appellate Tribunal (DRAT), etc., a non-judicial member can become the
president/chairman/chairperson, as the case may be. Therefore, when a non-judicial member
becomes a member in the selection committee, the Supreme Court judge will be in minority,
giving primacy to the executive, which is impermissible.

In Madras Bar Association (2010), the Court explicitly held that only judges and advocates can
be considered for appointment as judicial member of the tribunal and that persons from the
Indian Legal Service cannot be considered for appointment as judicial member. Recently, in
Revenue Bar Association (2019), the Madras High Court, while dealing with selection and
composition of the Goods and Services Tax Appellate Tribunal (GSTAT), declared Section
110(1)(b)(iii) of the CGST Act, 2017 as unconstitutional for allowing members of Indian Legal
Service to be judicial members in GSTAT.

Tenure violations

In Madras Bar Association (2010), the Court had held that the term of office “shall be changed
to a term of seven or five years”. Based on this, in Rojer Mathew, the Court held that the term of
three years is too short, and by the time members achieve a refined knowledge, expertise and
efficiency, one term will be over. Now, in the 2020 rules, the tenure of members has been
increased from three years to four years, thereby blatantly violating the directions of the Supreme
Court.

Since Madras Bar Association (2010), the government has repeatedly violated the directions of
the Supreme Court. One by one, the traditional courts, including the High Courts, have been
divested of their jurisdictions and several tribunals have been set up. When the National Taxation
Tribunal was struck down as unconstitutional by the Supreme Court, it was hoped that the
government would stop experimenting with tribunals. The reality was different. The Madras
High Court had to then deal with selection of members to the Intellectual Property Appellate
Board. Then came the rules of 2017 and the GST Appellate Tribunal and Advance Authorities
under the CGST Act.

The sinister plan is obvious: divest courts of their powers, vest those powers with new tribunals,
and fill them with civil servants. Now, only if an advocate has more than 25 years of experience,
can he apply to the post of judicial member of various tribunals such as ITAT, CESTAT,
Appellate Board under the Trade Marks Act, 1999, Appellate Tribunal for Electricity, etc. This
25-year eligibility is unheard of even for an appointment as a High Court judge. It seems absurd
to even think that a lawyer with more than 25 years of successful practice would apply for the
post of judicial member with a tenure of just four years. Further, as odd as it sounds, an advocate
can no longer apply to the post of judicial member of CAT, DRAT, etc. The exclusion of
advocates was first judicially noticed in Revenue Bar Association (2019) wherein the Madras
High Court merely proceeded to recommend to Parliament to reconsider this proposal. By
eliminating chances of bright advocates applying for the post of judicial members, the
government surely intends to fill them with candidates from the Indian Legal Service. The 2020
rules are, thus, in contempt of several Constitution Bench decisions of the Supreme Court.
Unless the Court comes down heavily on the Central government, we will see these
encroachments over and over again.

Rahul Unnikrishnan is an Advocate in the Madras High Court. He assisted Arvind Datar, Senior
Advocate, in ‘Rojer Mathew’ and ‘Revenue Bar Association’, cited in the article

Column: Decoding the Tribunal Judgment

URL-https://www.barandbench.com/columns/column-decoding-the-tribunal-judgment

The recent decision of the Supreme Court in Rojer Mathew v. South Indian Bank Ltd. dealt with
two classes of writ petitions: 

1. A writ petition filed by the Madras Bar Association in 2012 to direct the Union of India
to implement the directions of the Supreme Court in Union of India v. R. Gandhi (2010)
11 SCC 1 and L. Chandra Kumar v. Union of India (1997) 3 SCC 261, wherein the
Ministry of Law and Justice was ordered to take over the administration of all tribunals in
India; and
2. A batch of writ petitions challenging the constitutional validity of Part XIV of the
Finance Act, 2017 by which the provisions of about twenty-six central enactments were
amended, which dealt with different statutory tribunals. 

Part XIV of the Finance Act, 2017

Through Part XIV, at one stroke, the authority and jurisdiction of twenty-six tribunals
administered under twenty-six diverse central laws stood modified. The enormity and
complexities involved in this legislative exercise is discernible from the following: 

a. Eight tribunals established under different enactments – specified in the Ninth Schedule –
were abolished. However, the jurisdiction and its powers were transferred to seven other
tribunals; 

b. The eligibility criteria, selection process, removal, salaries and allowances, tenure and
other service conditions pertaining to various Members (i.e., Chairpersons, Vice-
Chairpersons, Technical/Specialist Members and Judicial Members) officiating across
twenty-six tribunals specified under twenty-six varied central laws were declared void
and non-est; and
 c. The powers to prescribe the eligibility criteria, selection process, removal, salaries and
allowances, tenure and other service conditions pertaining to various Members of
remaining nineteen tribunals were sub-delegated to the rule-making powers of the Central
Government. 

The Money Bill challenge

The primary argument of the petitioners was that the amendments could not have been made
through the Finance Act, 2017, as Part XIV could not have been certified as a money bill. 

The Supreme Court held that there is no bar against judicial review of certification of a bill as a
Money Bill by the Speaker under Article 110(4) of the Constitution. It is also made clear that
Articles 110(3) and 122(1) cannot operate as a bar when a challenge is made on the ground of
illegality or unconstitutionality (see para 102). However, the Court proceeded to hold that there
would be a presumption of legality in favour of the Speaker’s decision and onus would be on the
person challenging its validity to show that such certification was grossly unconstitutional or
tainted with blatant substantial illegality. (See para 110) 

The petitioners argued that the word “only” in Article 110(1) had a unique, restrictive meaning,
implying that a bill cannot be certified as a Money Bill unless it fell within any of the categories
mentioned in Articles 110(1)(a) to (f). This was earlier argued in the challenge to the Aadhaar
Act, wherein the majority judgment of Justice Sikri held that the Aadhaar Act was a Money Bill.
In the instant case, the Court held as follows:

“122. … 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).”  (emphasis added)

The Court then proceeded to observe:

“123.Given the various challenges made to the scope of judicial review and interpretative
principles (or lack thereof) as adumbrated by the majority in K.S. Puttaswamy (Aadhaar-5)
and the substantial precedential impact of its analysis of the Aadhaar Act, 2016, it becomes
essential to determine its correctness. Being a Bench of equal strength as that in K.S.
Puttaswamy (Aadhaar-5), we accordingly direct that this batch of matters be placed before
Hon’ble the Chief Justice of India, on the administrative side, for consideration by a larger
Bench.” (emphasis added)

An unexpected outcome, indeed! The majority opinion in Aadhaar, especially the part dealing
with Money Bill, is riddled with inconsistencies. However, in the instant case, if the Court was of
the view that the majority opinion in Aadhaar did not deal with the word “only” in Article
110(1), there was absolutely no need for the judges to refer it to a larger bench. In fact, this is
exactly what Mr. Datar had argued- that the current bench could go into the interpretation of the
word “only” in Article 110(1). The observations doubting the correctness of the Aadhaar
judgment may sound like a victory now, but there are no winners here. Unless the next Chief
Justice of India constitutes a seven-judge bench in the immediate future, this reference is as good
as dead.

Validity of section 184 of the Finance Act, 2017

Section 184 conferred upon the central government power to make rules by way of notification
to provide for (a) qualifications; (b) appointment; (c) term of office; (d) salaries and allowances;
(e) resignation; and (f) removal and other terms and conditions of service of the Chairperson,
Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or
Member of various tribunals and appellate tribunals. 

The petitioners argued that s. 184 was liable to be struck down for excessive delegation: the
subject matters that have been delegated under s. 184 were essential legislative functions. The
net-effect of s. 184 was that, the central government issued the Tribunal, Appellate Tribunal and
Other Authorities (Qualifications, Experience and Other Conditions of Service of Members)
Rules, 2017, which replaced selection process and other conditions of service of members of
nineteen tribunals. 

The Court upheld the validity of s. 184 and held that eligibility qualifications for the members,
Chairpersons, Chairman, etc., of different tribunals are not per se functionally undelegatable. In
para 143 of the majority judgment, the Court held as follows:

“143. The objects of the parent enactments as well as the law laid down by this Court in R.K.
Jain (supra), L Chandra Kumar (supra), R. Gandhi (supra), Madras Bar Association (supra)
and Gujarat Urja Vikas (supra) undoubtedly bind the delegate and mandatorily requires the
delegate under Section 184 to act strictly in conformity with these decisions and the objects of
delegated legislation stipulated in the statutes.” (emphasis added)

The judgments mentioned in para 143, according to the Court, form the policy and guideline, and
any rules made under s. 184 must conform to the directions given in those judgments. In other
words, the Court held that there is no excessive delegation in s. 184, but the rules issued
thereunder must conform to the policy and guidelines set out in R. Gandhi and other judgments. 

However, the Court failed to note that most of these tribunals replaced jurisdiction of High
Courts. As such, it is all the more important to give similar protection and independence to
tribunal members. This was correctly highlighted by Justice Deepak Gupta, who wrote a mostly
concurring opinion, dissenting only on this issue. He held, rather in strong terms-:

“30. I am in respectful disagreement with the Chief Justice that the objects of the parent
enactments and the law laid down by this Court in R. K. Jain v. Union of India9, L. Chandra
Kumar (supra), Union of India v. Madras Bar Association10, Madras Bar Association v. Union
of India11, Madras Bar Association v. Union of India12, Gujarat Urja Vikas Nigam Ltd. v.
Essar Power Ltd.13 in essence should be read as the guidelines. One would expect the Union
Government to abide by the directions of this Court. However, this expectation has been belied
by this very enactment which violates every principle of law laid down by this Court and, as
held in the judgments of both my brothers, the Rules framed by the delegatee are violative of
the law laid down by this Court. In this background, it is apparent that both the delegator and
the delegatee felt that they were not bound by these judgments. This is also apparent from the
fact that the Rules framed by the delegatee have not been brought in consonance with the law
by the delegator.” (emphasis added)

The above paragraph clearly sums up the reason behind repeated PILs on the issue of
tribunalisation. The judgments in L. Chandra Kumar and R. Gandhi have settled the law in this
regard. Yet, the central government, in open defiance of these judgments, have issued no less
than ten notifications in violation of R. Gandhi principles. The notification on GST Appellate
Tribunal is the most recent example in this regard.

Thus, it is submitted that, when the central government has repeatedly violated Constitution
Bench decisions of the Supreme Court, the Court should not have allowed any delegation of
powers to the Executive that would violate principles of independence of judiciary. 

Validity of Tribunal, Appellate Tribunal and Other Authorities (Qualifications, Experience

and Other Conditions of Service of Members) Rules, 2017

The above rules were framed under s. 184 of the Finance Act, 2017. The Court struck down the
entire rules for being violative of principles laid down in L. Chandra Kumar and R. Gandhi. The
highlights are as follows:

1. The majority of the composition of Search-cum-Selection Committee should always be

from the Judiciary. The Executive is a litigating party in most of the litigation and hence
cannot be allowed to be a dominant participant in judicial appointments;
2. Parliament cannot divest judicial functions upon technical members, devoid of either
adjudicatory experience or legal knowledge;
3. Persons of “ability, integrity and standing, and having special knowledge of, and
professional experience of” certain specialized subjects “which in the opinion of the
Central Government is useful”, are not eligible to be appointed as Presiding Officers of
tribunals. In other words, there cannot be any vague qualifications for members or
Presiding Officers of tribunals;
4. The 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; and
5. The short tenure of members of tribunals increases interference by the Executive
jeopardizing the independence of judiciary. This would also discourage meritorious
candidates to accept posts of Judicial Members in tribunals.

The curious case of writ petition filed by Madras Bar Association

As mentioned already, the prayer in WP No. 267 of 2012, which was filed by the Madras Bar
Association, was to implement the directions in L. Chandra Kumar and R. Gandhi. Both these
judgments had, inter alia, directed the Union of India to bring all tribunals under the
administrative control of Ministry of Law and Justice. On 27.03.2019, when this matter was
listed, the Court, to know the view of the Government of India, directed them to file an affidavit
within two weeks. This was after the Attorney General informed the Court that the Ministry of
Law and Justice is already overburdened. The Court proceeded to order –“Matter be listed
before this Bench after two weeks”. However, this did not happen, and the Court, in the instant
case, proceeded to dispose off this writ petition as well. It held:

“184. 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.” (emphasis added)

“231. Writ Petition (Civil) No. 267 of 2012 is also disposed of in the above terms as the issues
arising are similar.” 

It is submitted that the above paragraph is in violation of a seven-judge bench decision of the
Supreme Court in L. Chandra Kumar and a five-judge bench decision in R. Gandhi. These two
decisions had made it expressly clear that all tribunals should be placed under the Ministry of
Law and Justice. A similar observation was also made by Justice Nariman in Swiss Ribbons. In
fact, para 120(xii) of R. Gandhi says-

“The administrative support for all tribunals should be from the Ministry of Law and Justice”.

This observation was binding on the current bench, and the Court ought to have followed it
verbatim. Indeed, after adjourning this writ for two weeks, it was highly improper for the Court
to decide on this issue, without giving an opportunity for the petitioner to present their case.

It is sincerely hoped that Union of India drafts a new set of rules complying with the directions
issued in the R. Gandhi decision. 

The author is a practicing advocate at the Madras High Court. He assisted Senior Advocate
Arvind P. Datar, who appeared for Madras Bar Association and Revenue Bar Association in this
batch of writ petitions.
https://www.bloombergquint.com/opinion/decoding-the-supreme-courts-verdict-on-
tribunalisation