Dispensation Of Justice By The Tribunals Can Be Effective Provided They Function Independently Without The Influence Of Executive: Supreme Court

(Judicial Quest News Network)

 The Apex Court expressed its displeasure on Friday at the Central Government for its unheeding tendency and trend to the repeated directions issued by it to ensure the independence and efficiency of tribunals.

Repeated directions have been issued which have gone unheeded forcing the Petitioner to approach this Court time and again. It is high time that we put an end to this practice. Rules are framed which are completely contrary to the directions issued by this Court. Upon the tribunals has devolved the task of marking boundaries of what is legally permissible and feasible (as opposed to what is not lawful and is indefensible) conduct, in a normative sense guiding future behaviour of those subject to the jurisdictions of such tribunals.

The Court observed that the tribunals should not function as another department under control of the executive,

A 3-Judge bench comprising Jusrices L Nageshwar Rao, Hemant Gupta and S Ravindra Bhat expressed their displeasure while issuing directions to the Central Government to amend various provisions of the Tribunal Rules 2020.

The bench held that 2020 Rules shall apply prospectively from February 12, 2020 and issued a slew of directions to govern tribunals and appointments and service conditions of tribunal members.

This Court has been repeatedly urging the Union of India to set up a single umbrella organization which would be an independent body to supervise the functioning of the Tribunals and ensure that the independence of the Members of the Tribunals is maintained.

The court appraised the petitioner, Madras Bar Association for its relentless efforts in ensuring judicial independence of the tribunals and also ordered the Central Government to strictly adhere to the directions in the judgement.

The has observed that This task is rendered even more crucial, given that appeals against their decisions lie directly to the Supreme Court and public law intervention on the merits of such decisions is all but excluded.

Also, these tribunals are expected to be consistent, and therefore, adhere to their precedents, inasmuch as they oversee regulatory behaviour in several key areas of the economy.

Therefore, it is crucial that these tribunals are run by a robust mix of experts, i.e. those with experience in policy in the relevant field, and those with judicial or legal experience and competence in such fields. The functioning or non-functioning of any of these tribunals due to lack of competence or understanding has a direct adverse impact on those who expect effective and swift justice from them.

The resultant fallout is invariably an increased docket load, especially by recourse to Article 226 of the Constitution of India.

These aspects are highlighted once again to stress that these tribunals do not function in isolation, but are a part of the larger scheme of justice dispensation envisioned by the Constitution and have to function independently, and effectively, to live up to their mandate.

The following directions were issued by the Court”

The Union of India shall constitute a National Tribunals Commission which shall act as an independent body to supervise the appointments and functioning of Tribunals, as well as to conduct disciplinary proceedings against members of Tribunals and to take care of administrative and infrastructural needs of the Tribunals, in an appropriate manner. Till the National Tribunals Commission is constituted, a separate wing in the Ministry of Finance, Government of India shall be established to cater to the requirements of the Tribunals.

(ii) Instead of the four-member Search-cum-Selection Committees provided for in Column (4) of the Schedule to the 2020 Rules with the Chief Justice of India or his nominee, outgoing or sitting Chairman or Chairperson or President of the Tribunal and two Secretaries to the Government of India, the Search-cum-Selection Committees should comprise of the following members:

(a) The Chief Justice of India or his nominee—Chairperson (with a casting vote).

(b) The outgoing Chairman or Chairperson or President of the Tribunal in case of appointment of the Chairman or

Chairperson or President of the Tribunal (or) the sitting Chairman or Chairperson or President of the Tribunal in case of appointment of other members of the Tribunal (or) a retired Judge of the Supreme Court of India or a retired Chief Justice of a High Court in case the Chairman or Chairperson or President of the Tribunal is not a Judicial member or if the Chairman or Chairperson or President of the Tribunal is seeking re-appointment—member;

(c) Secretary to the Ministry of Law and Justice, Government of India—member;

(d) Secretary to the Government of India from a department other than the parent or sponsoring department, nominated by the Cabinet Secretary—member;

(e) Secretary to the sponsoring or parent Ministry or Department—Member Secretary/Convener (without a vote).

Till amendments are carried out, the 2020 Rules shall be read in the manner indicated.

(iii) Rule 4(2) of the 2020 Rules shall be amended to provide that the Search-cum-Selection Committee shall recommend the name of one person for appointment to each post instead of a

Panel of two or three persons for appointment to each post. Another name may be recommended to be included in the waiting list.

(iv) The Chairpersons, Vice-Chairpersons and the members of the Tribunal shall hold office for a term of five years and shall be eligible for reappointment. Rule 9(2) of the 2020 Rules shall be amended to provide that the Vice-Chairman, Vice-Chairperson and Vice President and other members shall hold office till they attain the age of sixty-seven years.

(v) The Union of India shall make serious efforts to provide suitable housing to the Chairman or Chairperson or President and other members of the Tribunals. If providing housing is not possible, the Union of India shall pay the Chairman or Chairperson or President and Vice-Chairman, Vice-Chairperson, Vice President of the Tribunals an amount of Rs. 1,50,000/- per month as house rent allowance and Rs. 1,25,000/- per month for other members of the Tribunals. This direction shall be effective from 01.01.2021.

(vi) The 2020 Rules shall be amended to make advocates with an experience of at least 10 years eligible for appointment as judicial members in the Tribunals. While considering

Advocates for appointment as judicial members in the Tribunals, the Search-cum-Selection Committee shall take into account the experience of the Advocate at the bar and their specialization in the relevant branches of law. They shall be entitled for reappointment for at least one term by giving preference to the service rendered by them for the Tribunals.

(vii) The members of the Indian Legal Service shall be eligible for appointment as judicial members in the Tribunals, provided that they fulfil the criteria applicable to advocates subject to suitability to be assessed by the Search-cum-Selection Committee on the basis of their experience and knowledge in the specialized branch of law.

(viii) Rule 8 of the 2020 Rules shall be amended to reflect that the recommendations of the Search-cum-Selection Committee in matters of disciplinary actions shall be final and the recommendations of the Search-cum-Selection Committee shall be implemented by the Central Government.

(ix) The Union of India shall make appointments to Tribunals within three months from the date on which the Search-cum-Selection Committee completes the selection process and makes its recommendations.

 (x) The 2020 Rules shall have prospective effect and will be applicable from 12.02.2020, as per Rule 1(2) of the 2020 Rules.

(xi) Appointments made prior to the 2017 Rules are governed by the parent Acts and Rules which established the concerned Tribunals. In view of the interim orders passed by the Court in Rojer Mathew (supra), appointments made during the pendency of Rojer Mathew (supra) were also governed by the parent Acts and Rules. Any appointments that were made after the 2020 Rules came into force i.e. on or after 12.02.2020 shall be governed by the 2020 Rules subject to the modifications directed in the preceding paragraphs of this judgment.

(xii) Appointments made under the 2020 Rules till the date of this judgment, shall not be considered invalid, insofar as they conformed to the recommendations of the Search-cum-Selection Committees in terms of the 2020 Rules. Such appointments are upheld, and shall not be called into question on the ground that the Search-cum-Selection Committees which recommended the appointment of Chairman, Chairperson, President or other members were in terms of the 2020 Rules, as they stood before the modifications directed in this judgment. They are, in other words, saved.

 (xiii) In case the Search-cum-Selection Committees have made recommendations after conducting selections in accordance with the 2020 Rules, appointments shall be made within three months from today and shall not be subject matter of challenge on the ground that they are not in accord with this judgment.

(xiv) The terms and conditions relating to salary, benefits, allowances, house rent allowance etc. shall be in accordance with the terms indicated in, and directed by this judgment.

(xv) The Chairpersons, Vice Chairpersons and members of the Tribunals appointed prior to 12.02.2020 shall be governed by the parent statutes and Rules as per which they were appointed. The 2020 Rules shall be applicable with the modifications directed in the preceding paragraphs to those who were appointed after 12.02.2020. While reserving the matter for judgment on 09.10.2020, we extended the term of the Chairpersons, Vice-Chairpersons and members of the Tribunals till 31.12.2020. In view of the final judgment on the 2020 Rules, the retirements of the Chairpersons, Vice-Chairpersons and the members of the Tribunals shall be in accordance with the applicable Rules as mentioned above.

The ruling came in a petition filed by Madras Bar Association (MCA) challenging the 2020 Rules for violating the principles of separation of powers and independence of judiciary.

It is averred in the petition that 2020 Rules posed a threat to the independent of the judiciary and to effective and efficient administration of justice. The Rules, the plea said, were ex-facie against the decisions of the Supreme Court, particularly Rojer Mathew v. South Indian Bank Ltg.

This being the second instance where the rules being challenged before the Supreme Court By the Finance Act, 2017, amendments were made to certain Acts to provide for merger of Tribunals and other authorities, and conditions of service of Chairpersons, Members, etc. According to Section 183 of the Finance Act, 2017, the provisions of Section 184 shall apply to the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal or Appellate Tribunal or other authorities, as specified under Column (2) of the Eighth Schedule to the Finance Act, 2017 on and from the appointed day i.e. 26.05.2017. It was further provided that Section 184 shall not apply to those holding such office immediately before the appointed day.

While a five-Judge bench of the Supreme Court referred the question of passage of the Finance Act as Money Bill to a larger Bench and the same remains pending still,  the 2017 Rules were struck down for violation of separation of powers and independence of judiciary.

Subsequently, the 2020 Rules came to be notified. The 2020 Rules, the petitioner association had contended were in contravention of separation powers and the principle laid down in 2018 judgement.

It was also highlighted in the petition that the 2020 Rules provide for four year tenure for the members appointed to the tribunals. This figure of four years is not only in violation of the Supreme Court Judgement of SP Sampat Kumar and Rojer Mathew,  but will also disincentives lawyers from seeking appointment, it was argued by Senior Counsel Arvind Datar on behalf of MBA.

Attorney General KK Venugopal submitted that the Supreme Court in Roger Mathew v.South Indian bank Ltd. Had upheld the Section 184 of the Finance Act according to which the tenure should not exceed five years and Rules were in consonance with that requirement.

 It was also pointed out that the vacuum created by quashing of 2017 rules was sought to be filled by the 2020 Rules.

Senior Counsel Siddhartha Luther and CS Vaidanath appeared for two applicants while Senior AS Chandhiok represented NCLT and NCLAT bar Association.

[Read Judgement]