Dispensation of justice by the Tribunals can be effective only when they function independent of any executive control: this renders them credible and generates public confidence. We have noticed a disturbing trend of the Government not implementing the directions issued by this Court. To ensure that the Tribunals should not function as another department under the control of the executive, 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.(Para 55)
Madras Bar Association v. Union of India & Anr.
Writ Petition (C) No.804 of 2020
Decided on November 27, 2020.
Counsel involved in the case: Mr. Arvind P. Datar (Amicus Curiae), Mr. Mukul Rohtagi, Mr. C.A. Sundaram, Mr. Vikas Singh, Ms. Anitha Shenoy, Mr. K.K. Venugopal (learned Attorney General for India), Mr. Balbir Singh, Mr. S.V. Raju, Mr. R. Balasubramanium, Mr. A.S. Chandhiok, Mr. Virender Ganda, Mr. M.S. Ganesh, Mr. Sidharth Luthra, Mr. C.S. Vaidyanathan, Mr. Guru Krishnakumar, Mr. Rakesh Kumar Khanna, Mr. Gautam Misra, Mr. P.S. Narasimha and other learned counsel appearing for the parties.
A three-judge bench of the Supreme Court consisting of Justice L. Nageswara Rao, Justice Hemant Gupta and Justice S. Ravindra Bhat decided the present litigation.
The constitutional validity of certain provisions of the Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020 (hereinafter ‘the 2020 Rules’) which deal with the qualification and appointment of members by recruitment, procedure for inquiry into misbehavior, House Rent Allowance and other Conditions of Service is the subject matter for consideration before this Court. UOI filed Miscellaneous Application No.1152 of 2020 seeking a direction that the 2020 Rules would apply to all persons appointed as Members, President, Chairperson, etc, of Tribunals after the appointed day, i.e. 26.05.2017. Several applications were filed by Bar Associations and the Members of the Tribunals seeking directions to fill up the vacant posts by making appointments to the Tribunals and for clarifications relating to the retrospective operation of the 2020 Rules. The Madras Bar Association filed a Writ Petition under Article 32 seeking a declaration that the 2020 Rules are ultra vires of Article 14, 21 and 50 of the Constitution, apart from being violative of the principles of separation of powers and independence of the judiciary.
The main issues raised in the Writ Petition (Civil) No.804 of 2020 are that the 2020 Rules are unconstitutional as:
a) The Search-cum-Selection Committees provided for in the 2020 Rules did not conform to the principles of judicial dominance;
b) Appointment of persons without judicial experience to the posts of Judicial Members/ Presiding Officer/ Chairpersons is in contravention to the earlier judgments of this Court;
c) The term of office of the Members for four years is contrary to the earlier decisions of this Court;
d) Advocates are not being made eligible for appointment to most of the Tribunals;
e) Administrative control of the executive in matters relating to appointments and conditions of service is violative of the principles of separation of powers and independence of judiciary and demonstrates non-application of mind. (Para 11)
Mr. Datar, learned Amicus Curiae submitted that there is a need for the Tribunals to function independently to infuse confidence in the mind of the litigant public, and free from executive control. According to him, the administrative support is provided by a Department of the Government of India, the Secretary of which is a Member of the Search-cum-Selection Committee. He argued that there should be an independent agency for administration of these Tribunals by relying on the judgment of this Court in L. Chandra Kumar v. Union of India, (1997) 3 SCC 261. He stated that setting up a National Tribunals Commission as a supervisory body over the Tribunals would go a long way in improving the functioning of the Tribunals. Further, he contended that the accruing arrears in the Tribunals is due to the delay in filling up the vacancies of the Presiding Officers and members of the Tribunals.
The learned Attorney General was also of the opinion that constitution of a National Tribunals Commission would provide a solution to the existing problems and ensure the smooth functioning of the Tribunals. By an order dated 07.05.2018, this Court had recommended the constitution of a wholly independent agency to oversee the working of the Tribunals. In Rojer Mathew v. South Indian Bank Limited, (2020) 6 SCC 1, a direction was given to the Ministry of Finance to earmark separate funds for the Tribunals from the Consolidated Fund of India, to ensure that the Tribunals will not be under the financial control of the parent Departments. In this regard, the Court stated:
We reiterate the importance of the constitution of an autonomous oversight body for recruitment and supervision of the performance of the Tribunals. It is high time that the observations and suggestions made in this regard by this Court shall be implemented by the Union of India. An independent body headed by a retired Judge of the Supreme Court supervising the appointments and the functioning of the Tribunals apart from being in control of any disciplinary proceedings against the Members would not only improve the functioning of the Tribunals but would also be in accordance with the principles of judicial independence. (Para 19)
The Court directed the UOI to set up a National Tribunals Commission as suggested by the above-stated order of this Court as early as possible, by stating:
Setting up of such Commission would enhance the image of the Tribunals and instill confidence in the minds of the litigants. Dependence of the Tribunals for all their requirements on the parent Department will not extricate them from the control of the executive. Judicial independence of the Tribunals can be achieved only when the Tribunals are provided the necessary infrastructure and other facilities without having to lean on the shoulders of the executive. This can be achieved by establishment of an independent National Tribunals Commission as suggested above. To stop the dependence of the Tribunals on their parent Departments for routing their requirements and to ensure speedy administrative decision making, as an interregnum measure, we direct that there should be a separate “tribunals wing” established in the Ministry of Finance, Government of India to take up, deal with and finalize requirements of all the Tribunals till the National Tribunals Commission is established. (Para 20)
The learned Amicus Curiae contended that the composition of the Search-cum-Selection Committees to make recommendations for appointment of members of the Tribunals is contrary to the requirements of judicial dominance. He stated that these Committees cannot have the Secretaries of the sponsoring departments as its members, as held by this Court in Madras Bar Association v. Union of India, (2014) 10 SCC 1. During the course of arguments, the learned Attorney General submitted that the 2020 Rules would be amended providing for a casting vote to the Chairperson of the Search-cum-Selection Committee to allay the apprehension of the petitioner and thus judicial dominance can be maintained. In response to this, Mr. Datar argued that there are some Tribunals where the Presiding Officer of the Tribunal is not a retired Judge of the Supreme Court or Chief Justice of the High Court or Judge of a High Court. Further, he contended that the Selection Committee should consist of the Chief Justice of India or his nominee along with another Judge of the Supreme Court and two Secretaries who are not from the sponsoring departments with a casting vote to the Chief Justice of India or his nominee.
The learned Attorney General for India submitted that the composition of the Search-cum-Selection Committees, according to the 2020 Rules consist of the Chief Justice of India or his nominee, the Chairman or Chairperson or President or the outgoing Chairman or Chairperson or President of the Tribunal and two Secretaries to the Government of India. In any event, he suggested that in case of a dead lock, the Chairperson of the Search-cum-Selection Committee who is Chief Justice of India or his nominee shall have a casting vote and the 2020 Rules will be amended accordingly to include the casting vote to the Chairperson of the Search-cum-Selection Committee. He submitted that the acceptance of the request made by the petitioner that there should be two Judges of the Supreme Court in the Search-cum-Selection Committee will lead to practical difficulties.
Countering the argument of the learned Amicus Curiae that Rule 4 of the 2020 Rules is violative of the judgments of this Court, the learned Attorney General submitted that this Court in Union of India v. Madras Bar Association, (2010) 11 SCC 1, accepted that the Secretary of the department concerned can be a member of the Search-cum-Selection Committee. The Court noted that this Court held to the contrary in Madras Bar Association v. Union of India (2014) (supra). He argued that in view of the law laid down by this Court in Sundeep Kumar Bafna v. State of Maharashtra, (2014) 16 SCC 623, that in case of a conflict between decisions of two Coordinate Benches of this Court, the law laid down by the earlier Bench shall prevail. He further stated that in a later judgment in Madras Bar Association v. Union of India, (2015) 8 SCC 583, this Court approved the Search-cum-Selection Committee consisting of the Secretary of the sponsoring department. In response to this contention, the Court stated:
It has been repeatedly held by this Court that the Secretaries of the sponsoring departments should not be members of the Search-cum-Selection Committee. We are not in agreement with the submission of the learned Attorney General that the Secretary of the sponsoring department being a member of the Search-cum-Selection Committee was approved by this Court in Union of India v. Madras Bar Association(2010)(supra)and it would prevail over the later judgment in Madras Bar Association v. Union of India(2014)(supra). We have already referred to the findings recorded in paragraph 70 of the judgment in Union of India v. Madras Bar Association (2010)(supra) that the sponsoring department should not have any role to play in the matter of appointment to the posts of Chairperson and members of the Tribunals. Though the ultimate direction of the Court was to constitute a Search-cum-Selection Committee for appointment of members to NCLT and NCLAT of which Secretary, Ministry of Finance and Company Affairs is a member, the ratio of the judgment is categorical, which is to the effect that Secretaries of the sponsoring departments cannot be members of the Search-cum-Selection Committee. We, therefore, see no conflict of opinion in the two judgments as argued by the learned Attorney General. However, we find merit in the submission of the learned Attorney General that the presence of the Secretary of the sponsoring or parent department in the Search-cum-Selection Committee will be beneficial to the selection process. But, for reasons stated above, it is settled that the Secretary of the parent or sponsoring Department cannot have a say in the process of selection and service conditions of the members of Tribunals. (Para 29)
Further, in this regard, the Court held:
The Government of India is duty bound to implement the directions issued in the earlier judgments and constitute the Search-cum-Selection Committees in which the Chief Justice of India or his nominee shall be the Chairperson along with the Chairperson of the Tribunal if he is a retired Judge of the Supreme Court or a retired Chief Justice of a High Court and two Secretaries to the Government of India. In case the Tribunal is headed by a Chairperson who is not a judicial member, the Search-cum-Selection Committee shall consist of the Chief Justice of India or his nominee as Chairperson and a retired Judge of the Supreme Court or a retired Chief Justice of a High Court to be nominated by the Chief Justice of India and Secretary to the Government of India from the Ministry of Law and Justice and a Secretary of a department other than the parent or sponsoring department to be nominated by the Cabinet Secretary. As stated above, the Secretary of the parent or sponsoring department shall serve as the Member-Secretary or Convener, without a vote.
In response to the arguments revolving around Rule 4 (2) of the Rules, the Court stated:
Accordingly, we direct that Rule 4(2) of the 2020 Rules shall be amended and till so amended, that it be read as empowering the Search-cum-Selection Committee to recommend the name of only one person for each post. However, taking note of the submissions made by the learned Attorney General regarding the requirement of the reports of the selected candidates from the Intelligence Bureau, another suitable person can be selected by the Search-cum-Selection Committee and placed in the waiting list. In case, the report of the Intelligence Bureau regarding the selected candidate is not satisfactory, then the candidate in the waiting list can be appointed. (Para 31)
Mr. Datar argued that the term of office of the Chairperson and the members of the Tribunal should be for a minimum period of five years, but the 2020 Rules have provided for only four years as the maximum term and hence submitted that Rule 9 (2) requires to be struck down as being arbitrary. The learned Attorney General contended that as the term of four years is subject to re-appointment, it would not make much of a difference if the term fixed is four years instead of five years.
The Court directed the modification of the tenure in Rules 9(1) and 9(2) of the 2020 Rules as five years in respect of Chairman or Chairperson, Vice Chairman or Vice-Chairperson and the members and that reappointment for at least one term shall be provided to the persons who are appointed to the Tribunals at a young age by giving preference to the service rendered by them and stated:
The 2020 Rules are not in compliance with the principles of law laid down in Union of India v. Madras Bar Association (2010) (supra) and Rojer Mathew (supra) in respect of the tenure of the members of the Tribunals in spite of this Court repeatedly holding that short tenure of members is detrimental to the efficiency and independence of the Tribunals. (Para 35)
With respect to Rule 15 of the 2020 Rules, the learned Amicus Curiae contended that lack of housing facilities became a deterrent for retired Judges from States outside Delhi to accept appointments to the Tribunals. The learned Attorney General relied upon the observations made by this Court in Rojer Mathew (supra) that the retired Judges of the High Court cannot be equated with the sitting Judges of the High Court and are not entitled to the same perquisites and further submitted that it is not possible to provide housing to all the Presiding Officers and members of the Tribunals in view of the acute shortage of housing in Delhi.
The Court observed:
Experience has shown that lack of housing in Delhi has been one of the reasons for retired Judges of the High Courts and the Supreme Court to not accept appointments to Tribunals. At the same time, scarcity of housing is also a factor which needs to be kept in mind. The only way to find a solution to this problem is to direct the Government of India to make serious efforts to provide suitable housing to the Chairperson and the members of the Tribunals and in case providing housing is not possible, to enhance the house rent allowance to Rs.1,25,000/- for members of Tribunals and Rs.1,50,000/-for the Chairman or Chairperson or President and Vice Chairman or Vice Chairperson or Vice President of Tribunals. In other words, an option should be given to the Chairperson and the members of the Tribunals to either apply for housing accommodation to be provided by the Government of India as per the existing rules or to accept the enhanced house rent allowance. This direction shall be effective from 01.01.2021. (Para 38)
The learned Amicus Curiae contended that there was a deliberate exclusion of the Advocates from being considered for appointment as judicial members in a majority of Tribunals by the 2020 Rules. It was argued that in respect of seven tribunals, the 2020 Rules impose a new condition whereby Advocates without 25 years of experience are ineligible. He argued that it is difficult for competent Advocates to uproot themselves and accept membership of tribunals, if they are to be eligible at the late age of 50 years and resultantly, those less competent would be willing, contrary to public interest. The Attorney General submitted that exclusion of Advocates was a matter of policy and that the eligibility condition wherever they could be considered, in some tribunals of 25 years practice, was to bring about parity with members of the Indian Legal Service, who could, in some instances be considered for appointment as judicial members.
The Court stated:
In view of the submission of the learned Attorney General that the 2020 the Rules will be amended to make Advocates eligible for appointment to the post of judicial members of the Tribunals, the only question that remains is regarding their experience at the bar. While the Attorney General suggested that an advocate who has 25 years of experience should be considered for appointment as a Judicial member, the learned Amicus Curiae suggested that it should be 15 years. An Advocate of a High Court with experience of ten years is qualified for appointment as a Judge of the High Court as per Article 217 (2) of the Constitution of India. As the qualification for an advocate of a High Court for appointment as a Judge of a High Court is only 10 years, we are of the opinion that the experience at the bar should be on the same lines for being considered for appointment as a judicial member of a Tribunal. Exclusion of Advocates in 10 out of 19 tribunals, for consideration as judicial members, is therefore, contrary to Union of India v. Madras Bar Association (2010) and Madras Bar Association v. Union of India (2015).However, it is left open to the Search-cum-Selection Committee to take into account in the experience of the Advocates at the bar and the specialization of the Advocates in the relevant branch of law while considering them for appointment as judicial members. (Para 41)
The learned Amicus Curiae submitted that members of the Indian Legal Service have been made eligible for appointment as judicial members to some Tribunals in spite of the judgment of this Court in Union of India v. Madras Bar Association, (2010) 11 SCC 1, wherein it was held that they can only be appointed as technical members. The learned Attorney General submitted that members of Indian Legal Service are practicing lawyers who have experience of 7 years to 13 years depending upon the grade in which they were recruited, and that they would stand in good stead for their appointment as judicial members.
The Court held:
In the light of the submission made by the learned Attorney General and the Amicus Curiae, we hold that the members of Indian Legal Service shall be entitled to be considered for appointment as a judicial member subject to their fulfilling the other criteria which advocates are subjected to. In addition, the nature of work done by the members of the Indian Legal Service and their specialization in the relevant branches of law shall be considered by the Search-cum-Selection Committee while evaluating their candidature. (Para 43)
Further, the Court stated:
We would wish to emphasize here that the setting up of tribunals, and the subject matters they are expected to deal with, having regard to the challenges faced by a growing modern economy, are matters of executive policy. When it comes to personnel who would operate these tribunals (given that the issues they decide would ultimately reach this Court, in appellate review or in some cases, judicial review), competence, especially in matters of law as well as procedure to be adopted by such judicial bodies, becomes matters of concern for this Court. These tribunals discharge a judicial role, and with respect to matters entrusted to them, the jurisdiction of civil courts is usually barred. Therefore, wherever legal expertise in the particular domain is implicated, it would be natural that advocates with experience in the same, or ancillary field would provide the “catchment” for consideration for membership. This is also the case with selection of technical members, who would have expertise in the scientific or technical, or wherever required, policy background. These tribunals are expected to be independent, vibrant and efficient in their functioning. Appointment of competent lawyers and technical members is in furtherance of judicial independence. (Para 44)
The learned Amicus Curiae argued that there is no clarity in the Rules regarding whether the reports submitted by the Search-cum-Selection Committee are binding on the Central Government. He submitted that the proper procedure to be followed in matters of complaints against the Presiding Officers and members of the Tribunals is that a preliminary scrutiny may be made by the Central Government and the report should be placed before the Search-cum-Selection Committee and that the findings of the Search-cum-Selection Committee shall be final and the action recommended by the Search-cum-Selection Committee shall be implemented by the Central Government. On the other hand, the learned Attorney General submitted that the preliminary scrutiny done by the Central Government, according to Rule 8(1) is only for the purpose of weeding out frivolous complaints. The learned Attorney General has also fairly submitted that the recommendations made by the Search-cum-Selection Committee shall be implemented by the Central Government. The Court was in agreement with the submissions of the learned Attorney General.
The learned Amicus Curiae stated that it is a well settled principle that delegated legislations such as Rules, notifications and circulars cannot have retrospective effect unless the parent statute itself permits such retrospective effect, and since these Rules were made in exercise of the powers conferred by Section 184 of the Finance Act, 2017 which enabled the notification of Rules to take effect from the appointed day, the Rules could not have a retrospective effect. The Attorney General argued that as per Section 183 of the Finance Act, 2017,all persons appointed prior to 26.05.2017 would be governed by the old Acts and Rules under which the Tribunals were established and those who are appointed after 26.05.2017 would be governed by the 2017 Rules.
The Court rejected the contention of the Attorney General and stated:
2017 Rules which have come into force with effect from 26.05.2017 in accordance with Section 183 have been struck down by this Court. The 2020 Rules which came into force from the date of their publication in the Official Gazette, i.e. 12.02.2020, cannot be given retrospective effect. The intention of Government of India to make the 2020 Rules prospective is very clear from the notification dated 12.02.2020.In any event, subordinate legislation cannot be given retrospective effect unless the parent statute specifically provides for the same. (Para 51)
For the purpose of clarity, we hold that all appointments made prior to the 2020 Rules which came into force on 12.02.2020 shall be governed by the parent Acts and Rules. Any appointment made after the 2020 Rules have come into force shall be in accordance with the 2020 Rules subject to the modifications directed in the preceding paragraphs of this judgment. (Para 52)
The Court issued directions, a summary of those apart from the ones stated above, are as follows:
(1) 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 67 years.
(2)The UOI shall make appointments to Tribunals within 3 months from the date on which the Search-cum-Selection Committee completes the selection process and makes its recommendations.
(3)The 2020 Rules shall have prospective effect and will be applicable from 12.02.2020, as per Rule 1(2) of the 2020 Rules.
(4) 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 cannot be called into question.
(5) In case the Search-cum-Selection Committees have made recommendations after conducting selections, appointments shall be made within 3 months from today and shall not be subject matter of challenge on the ground that they are not in accordance with this judgment.
For the above-stated reasons, the Writ Petitions, Transfer Petitions, Civil Appeals and all the Applications were disposed by the Court.
View/Download Judgment: Madras Bar Association v. Union of India & Anr.
Name of the intern: Jhanavi M
