Supreme Court To Hear Challenge Against Tribunal Reforms Act 2021 In February 2023

"Third week of February we will hear the Madras Bar Association (main matter) for final disposal."

The plea challenges the Ordinance to the extent it amends Sections 184 and 186 of the Finance Act 2017. Sections 184 and 186 of the Finance Act 2017 give Central Government rule-making power in relation to the mode of appointment, terms of service, allowances of members etc., of various Tribunals.

The Ordinance, promulgated by the President followed the Rules made by the Centre in 2017 and 2020, which came under severe criticism from the Supreme Court. The 2017 Tribunal Rules were quashed by the Supreme Court in the 2019 case Rojer Mathew vs South Indian Bank Ltd and others on the ground that they affected judicial independence. Following that, the Centre framed another set of Rules in February 2020. The Madras Bar Association had challenged the 2020 Tribunal Rules contending that they were inconsistent with the judgments in Rojer Mathew and other precedents.

The main points raised in the petition are :

1. The Ordinance fixes a minimum age limit of 50 years for appointment as Tribunal Members. This is contrary to the directions in the Madras Bar Association(2020) judgment to amend Rules to make advocates with minimum 10 years of practice eligible as members. The Supreme Court has emphasized the need to appoint younger members in Tribunals to make their functioning robust. Also, when a person below the age of 50 years is eligible to be made a High Court judge, it is anomalous to keep a minimum age limit of 50 years for Tribunals.

In the Madras Bar Association case, the Supreme Court had observed "Younger advocates who are around 45 years old bring in fresh perspectives. Many states induct lawyers just after 7 years of practice directly as District Judges. If the justice delivery system by tribunals is to be independent and vibrant, absorbing technological changes and rapid advances, it is essential that those practitioners with a certain vitality, energy and enthusiasm are inducted".

1. The Supreme Court had directed that no voting rights should be given to the Secretary of the parent department in the search-cum-selection committee for Tribunals. However, the Ordinance does not totally exclude such voting rights, and leaves the door open for a Secretary from the parent department to exercise voting rights.
2. The Supreme Court had directed to give 5-year tenure to Chairpersons and Members of Tribunals. This direction was issued by the Court holding that a short-tenure will discourage meritorious candidates. It was also observed that a short-tenure increases executive interference jeopardizing the independence of the Tribunals. However, the Ordinance fixes their term as 4 years.
3. Deprecating the practice of the search-cum-selection committee giving a panel of two names for all appointments, the Supreme Court had directed that the committee should only recommend one name for each post. However, the Ordinance has re-introduced the idea of a panel of two names being recommended by the Committee.
4. The Supreme Court had given a peremptory direction that the Central Government should make appointments within 3 months of the recommendations being given by the Committee. The Ordinance dilutes it by saying that the Central Government should make appointments "preferably within 3 months".
5. The Supreme Court had given a 5-year term after confirming all appointments made after 26.11.2017. The Ordinance reduces this term to 4 years, overriding the judgment. Thus the conditions of service of existing members have been varied to their detriment, and denying their legitimate expectation.

Terming these provisions as amounting to "legislative overruling", the Association says in the petition that "in the Indian constitutional scheme, judgements passed by the Courts cannot be directly overruled through legislation".

It is highlighted that the Supreme Court issued the directions to ensure greater autonomy and independence for the Tribunals and to make sure that they function more effectively. However, the Ordinance seeks to undermine the Supreme Court judgment in letter and spirit.

"...the Petitioner herein submits that Section 12 and 13 of the 2021 Ordinance and Section 184 and 186(2) of the Finance Act, 2017 (as amended by the 2021 Ordinance) ought to be struck down for being violative of Articles 14 and 21 for being arbitrary and unreasonable, against the principles of Separation of Powers and Independence of the Judiciary, and in contravention of previous decisions of this Hon'ble Court", the plea reads.

[Case Title: Madras Bar Association v. UoI WP(C) No. 1018/2021]