"Pass Another Legislation If They Pass A Judgment"-Some Bureaucrats Might Be There To Advise The Govt. For It-SC in Tribunal Matter -Full Courtroom Exchange

The Centre on Monday told the Supreme Court that the new law, the 2021 Tribunals Reforms Act, "has made the way for filling up vacancies in the tribunals", and as the first step, it will act on cases where the search cum selection committee has given the recommendations but a decision on appointments has not been taken.

"The government will ensure that within the next two weeks, a decision on appointments to all the tribunals, where the aforesaid committee has already given the recommendation to the government, is taken", told SG Tushar Mehta, quoting from a letter addressed to him from the Ministry of Finance.

The letter also conveyed that Rules under the new Tribunal Reforms Act are in the process of being finalised and will be notified immediately.

On Monday, Chief Justice N. V. Ramana had initially refused to adjourn the matter on the request of the SG that it is AG K. K. Venugopal who is conversant in the facts of the case right from its inception and that AG has some personal difficulty for a couple of days. "No, sorry. Last time, we made it very clear. We have set up a special bench, disturbing 2 other benches. We have earlier heard these matters and passed detailed judgements. There is no respect for the judgements of this court, that is what we are feeling! There is testing the patience of the court! Last time, you made a statement that you have appointed some persons? How many people have you appointed?", asked the CJ.

"Some persons in CAT- that is what I was informed... the learned AG is genuinely in difficulty today. I won't say anything beyond that...", replied the SG.

"We have no issue with that. The attorney general need not come...", said the CJ.

"I received some instructions today. I can screen share. It is a letter from the Ministry of Finance of today, addressed to me. They say that wherever there is a recommendation, a decision on the appointment would be taken in 2 weeks- that is the assurance which the government is giving", continued the SG, sharing the aforesaid letter.

At this, Justice L. Nageswara Rao remarked,

"The recommendations which we had made 1 1/2 years back, based on the law as it was then, in respect of which the government could not have had any objections- as regards the conditions of service, panel of persons and all- why were appointments not made? Some tribunals are on the verge of closing down! They are functioning with one member, they are on the verge of extinction! We can understand that there was some law which was in the offing and the Union of India was saying it will make appointments according to it, but these were recommendations made strictly in accordance with the law as it existed then!"

Justice D. Y. Chandrachud added,

"I am talking about the NCLT and the NCLAT because a lot of IBC cases come before me. These tribunals are critical to the economy. They are the cornerstone of the government's policy for reconstruction and rehabilitation of the corporate sector. Because of the vacancies, NCLT and NCLAT cannot dispose off matters or adhere to timelines! There is an outer limit of 330 days for completing the corporate insolvency resolution process. There is a judgment of our court saying that except in exceptional circumstances, this is a mandatory period and companies have to go into liquidation! With the NCLT and NCLAT not being manned, a very critical situation has arisen!"

"The same thing goes for the AFT! We have Article 32 petitions coming before us because all the present and retired members of the tribunal are saying there is no possibility of early resolution", continued the judge.

"I was once chairing the selection committee for the NCDRC. The new memorandum of procedure said first get the IB report and then shortlist the appointments. Once you make the recommendations, there is no question of IB raising any objections. So the names which are sent by the selection committee are all IB cleared. Unless IB clears, we don't send those names because we don't want to get into a thicket. Notwithstanding that, the names recommended are either deleted or there is no clarity why they are deleted. And the recommendations are not only by a single judge of the Supreme Court but senior officials of the bureaucracy! It is a waste of energy also!", expressed Justice Chandrachud.

Justice Chandrachud added, "The NCDRC was giving dates after one year. We got 136 petitions, saying 'Look at the Act, the next adjournment is granted after one year. We can't direct the President to constitute a bench. He will say 'I will constitute and take away the listing for some other matter'! Consumers come before us and say 'I have some small issue and the next date I am getting is after one year.'"

"And all can't even come before the Supreme Court or High Court!", said the CJ.

Justice Rao reflected on the dilemma at hand after Justice Chandrachud's remarks:

"And we have to deal with the burden. We have appeals against interlocutory orders from NCLT. Keeping in mind the outer limit, we are interfering. We are told that the tribunal could not take up these applications. We had to extend the periods otherwise the doors would have been closed...Similar is the case of TDSAT. There are no benches of the TDSAT around the country...Like brother Justice Chandrachud was saying, we had interviewed around 55 people for two days and then we made recommendations a year and a half back. You are emasculating these tribunals by not appointing members!"

The CJ commented, "They are bent upon not respecting the judgement of the court. This much is very clear. We have only three options left now – one is staying the legislation or whatever the Act that you have made and directing you to go ahead with the appointments, or close down the tribunals and give the powers to the High Court to take up the matters, and third is we ourselves will appoint the people. We could consider initiating proceedings for contempt of court!"

"We appreciated and everybody appreciated in the legal fraternity how you have appointed Supreme Court judges. We are very happy. We don't want any confrontation with the process. But what about the members of tribunals? These are small tribunals. Some of them are very good like NGT, CAT, consumer commissions, NCLT. No chairpersons, no presidents, nothing! Virtually, it has collapsed. Why are you so particular about the tribunals, we can't understand? If you have any alternative proposal, tell us. You don't want tribunals or what?", continued the CJ.

"No, No. No, There is not even the remotest intention conveyed to that effect...", began the SG.

"Take NCLT for instance. The Corporate affairs secretary and law secretary are the other two members (of the SCSC), if they don't have faith in two judges of the Supreme Court...I don't understand...", continued the CJ.

"That is not the intention that there is no faith, I assure you...as agreed and undertaken in para 2 of this letter...", the SG sought to submit.

Remarks About The 2021 Tribunals Act

Justice Chandrachud commented on the 2021 Tribunals Act. "Your letter refers to the 2021 Act. That Act is virtually a replica of the provisions which have been struck down in Madras Bar Association cases- II and III!"

"We are not bothered about subsequent legislation. We will not give much credence to them. My brother Nageswara Rao only expressed the remoteness of the subsequent legislation. Subsequent notifications are based on earlier rules. Justice Nageswara Rao told me the order he has passed in Madras Bar Association was after hearing AG, after taking into account all the suggestions of the AG and in spite of that, they don't honour the judgement! What is this?", demanded the CJ.

Senior Advocate A. M. Singhvi, appearing for Congress leader Jairam Ramesh who has challenged the 2021 Tribunals Act, advanced, "And this Act re-enacts identical provisions which Justice Rao's bench had given reasons for striking down!

"As far as the new Act is concerned, I will be candid with Your Lordships, I am not conversant. The AG has been appearing right from Roger Matthews to Madras Bar Association. Your Lordships can rely on my word that today and tomorrow there is some personal difficulty with him, that is all I can say", replied the SG.

"There are 2 issues- Ensuring that appointments which are in the pipeline are immediately made, and secondly is the vires of the Act. We cannot have this situation where we have Madras bar Association 1, 2, 3, 4 and virtually, the same Act is re-enacted. This will just continue! The next time we decide and strike down, it will be a fresh Act identical to the first one! It is virtually a replica! There is no difference!

The CJ then observed, "In a lighter vein, we want to say that we have trust and respect for you. You will never advise the government to enact legislation like this. Some bureaucrats might be there who will advise the government to make the legislation to nullify the judgement. They will say 'pass another legislation if they pass a judgement'. This is how bureaucracy functions, we understand. But the government has to take a call now – it is very serious. Although we are very much upset, that is all we want to say"

"Your Lordships are justified in that", said the SG.

"We will give you another 3-4 days' time to come back. We will pass orders about the legislation also that day", continued the CJ.

Dr Singhvi sought to advance-

"Sections 3(1), 3(7), 14, 7(1) of the 2021 Act – these four provisions are identical to the struck down, with reasons, provisions 184(1), 184(7), 184(11). Your Lordships, subject to Your Lordships' kind discretion, on the next date, consider that they cannot operate because they are flagrant contempt in the face of the court. The Act can go ahead, we want the act to go ahead minus these provisions! And Your Lordships' word should fill up the gap!

"You rightly said there are four provisions. I will point out which they are- a person below the age of 50 years is ineligible for appointment as chairperson or member. Directly contrary to the judgement! Second, selection committee shall recommend a panel of two names for appointment and the central government shall take a decision preferably within three months. Directly contradictory. Third, the term of office of chairperson and members will be fixed as four years. Directly contrary. And fourth, allowances made to the chairperson will be the same as a central government officer carrying the same pay as the chairperson. Again, Directly contrary!", noted Justice Chandrachud.

Dr. Singhvi advanced, "Identical letter, intent and word! It is not even different in a comma. It is astonishing!"

"The legislature can take away the basis of the judgement of the Supreme Court. But you cannot make an Act which is directly contradictory to the judgement of the Supreme Court. For instance, if we hold that the state legislature did not have the power to levy tax because the legislative competence was with the Parliament, then the Parliament can pass a law, validating the collection of tax. This is not validating legislation!", added Justice Chandrachud.

As Dr. Singhvi sought to argue more, the CJ expressed, "There is no use of debate. Everybody knows what the law is, including the government, signatories. Instead of wasting our time, Mr. Mehta, when do you want the matter to be heard? We are seized of the matter. We don't want to insist on the presence of the A. We are not interested in any confrontation."

"Neither is the government...", said the SG.

"Please understand. We are listing it for next Monday. By that time, we expect appointments. On the challenge to the legislation also, we are issuing notice. But we are not recording any order", said the CJ.

When the SG said he will definitely convey the same to the government, the CJ remarled, "Conveying is the issue. Conveying, last time also you did. If you want an order, we will pass an order..."

"For the time being, can we have it on Monday?", said the SG.

"The CGST tribunal is also not constituted, that is one of the issue. There is no question of filing counter, you have to constitute the tribunal, that's all. If you want an order, we will pass an order to the effect of whatever we have said in court. If you don't want an order, we want some appointments on the next date of hearing. Which one do you want?", asked the CJ.

"Your Lordships may have it on Monday", replied the SG.

The bench passed its order as follows- 'Taking into consideration the submissions, we are not inclined to pass any orders at present. Mr Mehta sought time to obtain instructions about the appointments at the next date of hearing. List on Monday."

Case Titles: Delhi Bar Association Vs UoI, Jairam Ramesh Vs UoI, State Bar Council of MP Vs UoI, Amarjit Singh Bedi Vs UoI