Fixing 50 years as minimum age for appointment & payment of HRA- S.184 declared unconstitutional: SC

(i) The first proviso to Section 184(1) of the Finance Act, 2017, introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is hereby declared void and inoperative. Similarly, the second proviso to Section 184(1) of the Finance Act, 2017, introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is held to be void and inoperative. (ii) Section 184(7) of the Finance Act, 2017 introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is hereby declared void and inoperative. (iii) Section 184(11)(i) and (ii) introduced by Section 12 of the Tribunals (Reforms Rationalisation and Conditions of Service) Ordinance, 2021 are hereby declared as void and unconstitutional (Para.46).

MADRAS BAR ASSOCIATION V. UNION OF INDIA & ANOTHER

Writ Petition (Civil) No.502 of 2021

14th July 2021

The Three Judges bench of Supreme Court consisting of Justice L. Nageswara Rao, Justice S. Ravindra Bhat and Justice Hemant Gupta decided the writ petition seeking a declaration that Sections 12 and 13 of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 and Sections 184 and 186 (2) of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 as ultra vires Articles 14, 21 and 50 of the Constitution of India inasmuch as these are violative of the principles of separation of powers and independence of judiciary.

The Madras Bar Association filed a writ petition in the Madras High Court challenging the constitutional validity of the said amendment to the 1956 Act on the ground of legislative incompetence and violation of the doctrines of separation of powers and independence of the judiciary.

Mr. Arvind P. Datar, learned Amicus Curiae, made the following submissions: (i) The Ordinance is violative of the rule of separation of powers which forms part of the basic structure of the Constitution. The Ordinance is liable to be struck down as being violative of another basic feature of the Constitution, i.e., independence of the judiciary (ii) Reversal of judgments which are not in accord with the Government’s views undermines the judiciary, violating the supremacy of the Constitution (iii) Stipulation of a minimum age limit of 50 years for appointment is contrary to the directions given in the judgments of this Court in MBA-I, Rojer Mathew (supra) and MBA-III (iv) The provisos to Section 184(1) fixing the allowances and benefits payable to the Members to the extent as admissible to Central Government officers holding a post carrying the same pay is unsustainable and requires to be set aside (v) Section 184(7) is liable to be declared invalid as the direction issued by this Court in MBA-III to make appointments within three months from the date of recommendation of the Selection Committee is sought to be annulled (vi) Section 184(11) is unconstitutional insofar as it fixes the tenure of the Chairperson and Members as four years. vii) Retrospectivity given to Section 184(11) is only to nullify the effect of interim orders of this Court which are in the nature of mandamus and is, therefore, prohibited legislative activity (vii) The appointments made pursuant to the directions of this Court on 09.02.2018, 16.07.2018 and 21.08.2018 with the consent of the learned Attorney General cannot be disturbed. The directions issued by this Court with the consent of the Union of India cannot be legislatively overruled.

Mr. P.S. Patwalia, learned Senior Counsel appearing for Mr. P. Dinesha, Member, CESTAT, submitted that there are at least four orders passed by this Court on 09.02.2018, 20.03.2018, 16.07.2018 and 21.08.2018 which clarified that the age of retirement would be 62 years for Members of the CESTAT and the ITAT. Relying upon the judgment of this Court in Virender Singh Hooda & Ors. v. State of Haryana & Anr., he submitted that even if this Court upholds the Ordinance, the appointments made pursuant to the interim orders of this Court should not be disturbed.

Mr. Rohatgi, learned Senior Counsel, argued that Mr. Ajay Sharma who was practicing as an AOR in this Court responded to an advertisement issued on 29.06.2016 for the appointment to the post of Member (Judicial), CESTAT. He was appointed along with others on 11.04.2018 with a condition that his tenure will be for five years or till he attains the age of 65 years, whichever is earlier. This Court clarified on 21.08.2018 that the retirement age of Member (Judicial), CESTAT shall be 62 years. Proviso to Section 184(11) which prescribes a maximum of five years tenure is a result of an impermissible exercise undertaken by the Union of India. He further submitted that a mandamus issued by this Court cannot be overruled by the legislature. Mr. Gaurab Banerjee, learned Senior Counsel, submitted that Mr. S.K. Pati was appointed Member (Judicial), CESTAT on 11.04.2018. He submitted that Mr. Pati left his employment as an Additional District Judge and joined as Member (Judicial). Mr. Sidharth Luthra, learned Senior Counsel, submitted that Mrs. Rachna Gupta who is at present working as Member (Judicial) has resigned as District Judge. He requested this Court to permit the Members, CESTAT and other tribunals to continue till 62 years as directed by this Court in its judgment in Kudrat Sandhu v. Union of India. Mr. Krishnan Venugopal, learned Senior Counsel appearing for Advocates’ Association, Bengaluru, which was interested in appointments being made to the posts of Judicial and Accountant Members of the ITAT, submitted that pursuant to the advertisement issued on 06.07.2018 inviting applications to 37 posts of Members (Judicial)/ (Accountant) in the ITAT, 650 applications were filed. The candidates between the age of 35 years and 50 years were eligible according to the advertisement. Interviews were held between May-September 2019. Appointments to the post of Accountant Members were made but the Judicial Members were not appointed. He submitted that there are few persons who are below 50 years and would not be considered for appointment in view of the Ordinance. He argued that Section 184(11) alone is given retrospective effect and the amendments to Section 184(1) to (10) would be prospective and cannot be made applicable to the recruitment and selection conducted prior to 04.04.2021.

The learned Attorney General strongly refuted the contentions of the learned Amicus Curiae and other Senior Counsel. He stated that a judgment of a court can be overridden by the legislature. Service conditions of Members of tribunals is a policy decision which should be left to the collective decision of the Parliament. He asserted that there can be no direction issued by this Court to make law in a particular manner. Such directions issued by this Court are treated as suggestions. Ultimately, the will of the people has to prevail. Even interstitial directions given in the absence of law are subject to future legislation. He was of the opinion that the Ordinance cannot be challenged on the ground that it is contrary to the judgment of this Court in MBA-III. The learned Attorney General argued that the minimum age for appointment to tribunals is fixed at 50 years for the purpose of maintaining equality. All aspirants from various fields have been put on an even keel. According to him, there is no uniformity in the directions issued by this Court regarding the tenure of Chairperson and Members. Initially in S.P. Sampath Kumar (supra), this Court recommended five to seven years as tenure. Thereafter, directions were issued to the effect that tenure should be five years. The learned Attorney General submitted that tenure of four years instead of five years was fixed after detailed deliberations by experts which should not be interdicted by this Court. Insofar as HRA is concerned, the learned Attorney General submitted that Members of tribunals cannot be permitted to claim allowances higher than officers in the Government carrying the same pay scale.

Mr. Balbir Singh learned Additional Solicitor General defended the retrospectivity given to Section 184(11) by arguing that the defect pointed out by the judgment of MBA-III has been cured by the Ordinance. It was held in MBA-III that the 2020 Rules came into force on the date of their notification, i.e., 12.02.2020. Further, it was held that subordinate legislation cannot be given retrospective operation unless authorized by the parent legislation. By the Ordinance, the Finance Act has been amended and retrospective effect has been given to Section 184(11). Any judgment or orders passed between 26.05.2017 and 04.04.2021 are overridden by the Ordinance which is in the nature of a curative legislation. The learned ASG submitted that all appointments that have been made between 26.05.2017 and 04.04.2021 shall be governed by the Ordinance.

After hearing Mr. Arvind P. Datar, learned Amicus Curiae, Mr. K.K. Venugopal, learned Attorney General for India, Mr. Balbir Singh, learned Additional Solicitor General, Mr. Mukul Rohatgi, learned Senior Counsel, Mr. Sidharth Luthra, learned Senior Counsel, Mr. Gaurab Banerjee, learned Senior Counsel, Mr. Aruneshwar Gupta, learned Senior Counsel, Mr. Krishnan Venugopal, learned Senior Counsel after going through all the status, principles and case laws the judges followed different approaches and provided the Judgment:

Justice L. Nageswara Rao

the first proviso and the second proviso, read with the third proviso, to Section 184 overriding the judgment of this Court in MBA-III in respect of fixing 50 years as minimum age for appointment and payment of HRA, Section 184(7) relating to recommendation of two names for each post by the SCSC and further, requiring the decision to be taken by the Government preferably within three months declared to be unconstitutional. Section 184(11) prescribing tenure of four years is contrary to the principles of separation of powers, independence of judiciary, rule of law and Article 14 of the Constitution of India. Though, we have upheld the proviso to Section 184(11), the appointments made to the CESTAT pursuant to the interim orders passed by this Court shall be governed by the relevant statute and the rules framed thereunder that existed prior to 26.05.2017. We have already taken notice of the notification dated 30.06.21 by way of which Rule 15 of the 2020 Rules dealing with HRA has been amended in conformity with our directions in MBA-III. (Para 58)

Disposed of the writ petition till the above extent.

Justice S. Ravindra Bhat

(i) The first proviso to Section 184(1) of the Finance Act, 2017, introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is hereby declared void and inoperative. Similarly, the second proviso to Section 184(1) of the Finance Act, 2017, introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is held to be void and inoperative.

(ii) Section 184(7) of the Finance Act, 2017, introduced by of the Finance Act, 2017 introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is hereby declared void and inoperative.

(iii) Section 184(11)(i) and (ii) introduced by Section 12 of the Tribunals (Reforms Rationalisation and Conditions of Service) Ordinance, 2021 are hereby declared as void and unconstitutional.

(iv) Consequently, the declaration of this Court in para 53(iv) of MBA-III shall prevail and the term of Chairperson of a Tribunal shall be five years or till she or he attains the age of 70 years, whichever is earlier, and the term of Member of a Tribunal shall be five years or till she or he attains the age of 67 years, whichever is earlier.

(v) The retrospectivity given to the proviso to Section 184(11) – introduced by Section 12 of the Tribunals (Reforms Rationalisation and Conditions of Service) Ordinance, 2021 is hereby upheld; however, without in any manner affecting the appointments made to the post of Chairperson or members of various Tribunals, upto 04.04.2021. In other words, the retrospectivity of the provision shall not in any manner affect the tenures of the incumbents appointed as a consequence of this Court’s various orders during the interregnum period. (Para 46)

Allowed the writ petition to the above extent.

Justice Hemant Gupta

It is open to the legislature to fix tenure of the Chairperson and the members other than four years as the tenure of four years was found to be not tenable in MBA-III. Section 184(7) which contemplates that Select Committee should recommend a panel of two names is contrary to the directions of this Court in MBA-III. Thus, Section 184(11)(i) (ii) and Section 184(7) is declared to be void as the Ordinance has reiterated the provisions which were in 2020 Rules. The challenge to other provisions is not legally sustainable. (Para 64)

Disposed of the writ petition except to the extent mentioned above.

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Swadheen Singh