Case BriefsSupreme Court

[Note: This report is a detailed analysis of Supreme Court’s judgment in Madras Bar Association v. Union of India[1]. To read the guidelines and directions issued by the Court, click here.]

Supreme Court: The 3-judge bench of L. Nageswara Rao*, Hemant Gupta and S. Ravindra Bhat has issued extensive directions in relating to selection, appointment, tenure, conditions of service, etc. relating to various tribunals, 19 in number, thereby calling for certain modifications to the Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020

The Supreme Court was once again, within the span of a year, called upon to decide the issue at hand. Last year, the Constitution Bench in Rojer Mathew v. South Indian Bank Ltd., (2020) 6 SCC 1 had held that the Tribunal, Appellate Tribunal and Other Authorities (Qualifications, Experience and Other Conditions of Service of Members) Rules, 2017, as a whole was ultra vires.

“That the judicial system and this Court in particular has to live these déjà vu moments, time and again (exemplified by no less than four constitution bench judgments) in the last 8 years, speaks profound volumes about the constancy of other branches of governance, in their insistence regarding these issues.”

Here is the explainer on the directions issued by the Court:

NATIONAL TRIBUNALS COMMISSION

“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.”

Noticing that the Tribunals are not free from the Executive control and that they are not perceived to be independent judicial bodies, the Court said that there was an imperative need to ensure that the Tribunals discharge the judicial functions without any interference of the Executive whether directly or indirectly.

Hence,

“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.”

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, it was hence directed 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.

Read the directions here

SEARCH-CUM-SELECTION COMMITTEE

After it was brought to Court’s notice that the constitution of the Search-cum-Selection Committees as per 2020 Rules does not ensure judicial dominance, the Court made the following directions:

  • a casting vote will be given to the Chief Justice of India or his nominee as the Chairperson of the Search-cum-Selection Committee.
  • normally the Chairperson of the Tribunal would be a retired Judge of the Supreme Court or the Chief Justice of a High Court. However, there are certain Tribunals in which the Chairperson may not be a judicial member. In such Tribunals, the Search-cum-Selection Committee should have a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the Chief Justice of India in place of the Chairperson of the Tribunal.
  • the 2020 Rules would be amended to reflect that whenever the re-appointment of the Chairman or Chairperson or President of a Tribunal is considered by the Search-cum-Selection Committee, the Chairman or Chairperson or President of the Tribunal shall be replaced by a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the Chief Justice of India.
  • Secretary to the sponsoring or parent Department shall serve as the Member-Secretary/Convener to the Search-cum-Selection Committee and shall function in the Search-cum-Selection Committee without a vote.
  • Rule 4 (2) of the Rules that postulates that a panel of two or three persons shall be recommended by the Search-cum-Selection Committee from which the appointments to the posts of Chairperson or members of the Tribunal shall be made by the Central Government, 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. Taking note of 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.

Read the directions here

TERM OF OFFICE

At present Rule 9(1) permits a Chairman, Chairperson or President of the Tribunal to continue till 70 years which is in conformity with Parliamentary mandate in Section 184 of the Finance Act. However, Rule 9(2) provides that Vice Chairman and other members shall hold office till they attain 65 years.

Accepting Amicus Curiae’s submission that under the 2020 Rules, the Vice Chairman, Vice-Chairperson or Vice-President or members in almost all the Tribunals will have only a short tenure of less than three years if the maximum age is 65 years, the Court directed the Government to amend Rule 9 (1) of the 2020 Rules by making the term of Chairman, Chairperson or President as five years or till they attain 70 years, whichever is earlier and other members dealt with in Rule 9(2) as five years or till they attain 67 years, whichever is earlier.

Section 184 of the Finance Act, 2017 provides for reappointment of Chairpersons, Vice-Chairpersons and members of the Tribunals on completion of their tenure. There is no mention of reappointment in the 2020 Rules. Hence, 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.

Read the directions here

HOUSE RENT ALLOWANCE

Noticing 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, the Court directed 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.

“… 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.”

Read the directions here

ADVOCATES AS JUDICIAL MEMBERS

While the Attorney General suggested that an advocate who has 25 years of experience should be considered for appointment as a Judicial member, the Amicus Curiae suggested that it should be 15 years.

Considering both the suggestions, the Court said,

“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.”

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.

Read the directions here

ELIGIBILITY OF MEMBERS OF INDIAN LEGAL SERVICE

The Court directed 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.

Read the directions here

IMPORTANCE OF APPOINTMENT OF COMPETENT AND YOUNG LAWYERS AND TECHNICAL MEMBERS

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.

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.”

25 years of practice even with a five-year degree holder, would mean that the minimum age of induction would be 48 years: it may be more, given the time taken to process recommendations. Therefore, a tenure without assured re-engagements would not be feasible. A younger lawyer, who may not be suitable to continue after one tenure (or is reluctant to continue), can still return, to the bar, than an older one, who may not be able to piece her life together again.

Read the directions here

REMOVAL OF MEMBERS

Rule 8 of the 2020 Rules provides the procedure for inquiry of misbehavior or incapacity of a member. According to the said Rule, the preliminary scrutiny of the complaint is done by the Central Government. If the Central Government finds that there are reasonable grounds for conducting an inquiry into the allegations made against a member in the complaint, it shall make a reference to the Search-cum-Selection Committee which shall conduct an inquiry and submit the report to the Central Government.

However, Amicus Curiae argued that there is no clarity in the Rules as to whether the reports submitted by the Search-cum-Selection Committee are binding on the Central Government. The 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 and that the recommendations made by the Search-cum-Selection Committee shall be implemented by the Central Government. The Court accepted the submissions of the learned Attorney General.

Read the directions here

TIME LIMIT FOR APPOINTMENT

“The very reason for constituting Tribunals is to supplement the functions of the High Courts and the other Courts and to ensure that the consumer of justice gets speedy redressal to his grievances. This would be defeated if the Tribunals do not function effectively.”

It was brought to Court’s notice that there are a large number of unfilled vacancies hampering the progress of the functioning of the Tribunals. The pendency of cases in the Tribunals is increasing mainly due to the lack of personnel in the Tribunals which is due to the delay in filling up the vacancies as and when they arise due to the retirement of the members.

The Court, hence, directed that the Government of India shall make the appointments to the Tribunals within three months after the Search-cum-Selection Committee completes the selection and makes its recommendations.

Read the directions here

RETROSPECTIVITY OF THE 2020 RULES

The Court rejected the submission of learned Attorney General that the 2020 Rules which replaced the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2017 shall come into force with effect from 26.05.2017 which was the appointed day in accordance with the 2017 Rules and said,

“It is true that the 2017 Rules were brought into force from 26.05.2017 and Section 183 of the Finance Act provides for any appointment made after the appointed day shall be in accordance with the Rules made under Section 184 of the Finance Act, 2017. 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.”

Further, 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.

The Court, however, clarified 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 this judgment.

Read the directions here

In the petition that was filed by Madras Bar Association, the Court directed the Government to strictly adhere to the directions and not force the Petitioner-Madras Bar Association, which has been relentless in its efforts to ensure judicial independence of the Tribunals, to knock the doors of this Court again.

[Madras Bar Association v. Union of India, 2020 SCC OnLine SC 962, decided on 27.11.2020]


*Justice L. Nageswara Rao has penned this judgment.

[1] Writ Petition (C) No.804 of 2020, decided on 27.11.2020

Counsels heard:

Senior Advocate Arvind Datar, amicus curiae

Attorney General for India K.K. Venugopal,

Additional Solicitor General Balbir Singh and S.V. Raju,

Senior Advocates Mukul Rohtagi, C.A. Sundaram, Vikas Singh,. Anitha Shenoy, R. Balasubramanium, A.S. Chandhiok, Virender Ganda, M.S. Ganesh, Sidharth Luthra, C.S. Vaidyanathan, Guru Krishnakumar, Rakesh Kumar Khanna, Gautam Misra, P.S. Narasimha.

Case BriefsSupreme Court Roundups


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Case BriefsSupreme Court

Supreme Court: The 3-judge bench of L. Nageswara Rao*, Hemant Gupta and S. Ravindra Bhat has issued extensive directions in relating to selection, appointment, tenure, conditions of service, etc. relating to various tribunals, 19 in number, thereby calling for certain modifications to the Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020.

While the bench has upheld the validity of Tribunal Rules, 2020, here are the modifications and directions issued by the Court:

(i) 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 comprising of 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 Chairman or Chairperson or President and Vice-Chairman, Vice-Chairperson, Vice President of the Tribunals shall be paid Rs. 1,50,000/- per month as house rent allowance and Rs. 1,25,000/- per month for other members of the Tribunals from 01.01.2021.

(vi) Advocates with an experience of at least 10 years should be eligible for appointment as judicial members in the Tribunals. The experience of the Advocate at the bar and their specialization in the relevant branches of law is to be considered. 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 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. 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 as directed in 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, as they stood before the modifications directed in this judgment. They are, in other words, saved and shall not be questioned.

(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 as directed to those who were appointed after 12.02.2020.

The Court has clarified 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 as directed.

In the petition that was filed by Madras Bar Association, the Court directed the Government to strictly adhere to the directions given above and not force the Petitioner-Madras Bar Association, which has been relentless in its efforts to ensure judicial independence of the Tribunals, to knock the doors of this Court again.

[Madras Bar Association v. Union of India, 2020 SCC OnLine SC 962, decided on 27.11.2020]


*Justice L. Nageswara Rao has penned this judgment 

Case BriefsSupreme Court

Supreme Court: In the case where the National Green Tribunal directed the State of Madhya Pradesh to ensure that no dealer and/or outlet and/or petrol pump should supply fuel to vehicles without Pollution Under Control (PUC) Certificate, the bench of Arun Mishra and Indira Banerjee, JJ has held that NGT had no power to pass such direction as the stoppage of supply of fuel to vehicles not complying with the requirement to have and/or display a valid PUC Certificate is not contemplated either in the Central Motor Vehicles Rules, 1989 or in the National Green Tribunal Act, 2010.

“Motor Vehicles not complying with the requirement of possessing and/or displaying a valid PUC Certificate cannot be debarred from being supplied fuel.”

The Court said that when a Statute or a Statutory Rules prescribed a penalty for any act or omission, no other penalty not contemplated in the Statute or a Statutory Rules can be imposed. When a Statute requires a thing to be done in a particular manner, it is to be done only in that manner.

After going through the relevant provisions, the Court summarized that driving a vehicle without a pollution PUC certificate entails:

  • suspension of registration certificate;
  • imprisonment which may extend to three months;
  • fine which may extend to Rs.10,000/- or both
  • disqualification for holding licence for a period of three months
  • imprisonment for a term which may extend to six months or with fine which may extend to Rs.10,000/- or with fine.

It further noticed that as per Rule 116(8) and (9), the suspension of the certificate of registration is temporary. The suspension is until such time as a certificate is produced before the Registering Authority certifying that the vehicle complies with sub Rules (2) and (7) of the Rule 115 of the Central rules. A Certificate of Registration is also to be deemed to have been suspended, until a fresh Pollution Under Control certificate is obtained.

“There can be no doubt that strong measures must be taken to protect the environment and improve the air quality whenever there is contravention of statutory rules causing environmental pollution. Stringent action has to be taken, but in accordance with law.”

The Court, hence, noticed that in passing blanket direction, directing the appellant State Government to ensure that no dealer and/or outlet and/or petrol pump should supply fuel to vehicles without PUC Certificate, de hors the Central Motor Vehicles Rules, NGT overlooked the fact that no vehicle can either be repaired to comply with pollution norms, nor tested for compliance with the political norms upon repair, without fuel.

Hence, the NGT had no power and/or authority and/or jurisdiction to pass orders directing the Appellant State Government to issue orders, instructions or directions on dealers, outlets and petrol pumps not to supply fuel to vehicles without PUC Certificate.

The Court, however, directed that the State shall strictly implement compliance of Rules 115 and 116 and penalize all those who contravene the said Rules in accordance with the provisions of the 1989 Rules.

“The Registration Certificate of vehicles which do not possess a valid PUC Certificate shall be forthwith suspended and/or cancelled, and penal measures initiated against the owner and/or the person(s) in possession and/or control of the offending vehicle, in accordance with law.”

[State of Madhya Pradesh v. Centre for Environment Protection Research and Development, 2020 SCC OnLine SC 687, decided on 28.08.2020]

Case BriefsSupreme Court (Constitution Benches)

Supreme Court: On September 26, 2019, the 5-judge bench of former CJ Dipak Misra and A.K. Sikri, A.M. Khanwilkar, Dr D.Y. Chandrachud and Ashok Bhushan, JJ, ‘finally’ put an end to the Aadhaar dilemma in a 4:1 verdict and declared that the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 was valid and not violative of the fundamental right to privacy. The Court also held that Section 7 was the core provision of the Aadhaar Act and since it satisfied the condition of Article 110 of the Constitution, the Aadhaar Act was validly passed as Money Bill.

Just over a year later, when another 5-judge bench sat to decide the validity of Finance Act, 2017 as a Money Bill, it realised that the Aadhaar issue might not just be over yet.

The 5-judge Constitution Bench of Ranjan Goigoi, CJ and NV Ramana, Dr. DY Chandrachud, Deepak Gupta and Sanjiv Khanna, JJ went through the the judgment in K.S. Puttaswamy v. Union of India (Aadhaar-5 Judge), (2019) 1 SCC 1 when both parties in the Finance Act validity case relied upon it.

After “extensively examining” the issue, the Bench noticed that the majority in K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the Aadhaar Act, 2016 without first delineating the scope of Article 110(1) and principles for interpretation or the repercussions of such process. It, hence, said,

“It is clear to us that the majority dictum in K.S. Puttaswamy (Aadhaar-5) did not substantially discuss the effect of the word ‘only’ in Article 110(1) and offers little guidance on the repercussions of a finding when some of the provisions of an enactment passed as a “Money Bill” do not conform to Article 110(1)(a) to (g).”

In the Aadhaar-5 Verdict, referring to the definition of “Money Bill” and the meaning and purpose of the word ‘only’ used in Article 110(1) of the Constitution, Ashok Bhushan, J. had observed that legislative intent was that the main and substantive provision of an enactment should only be any or all of the sub-clauses from (a) to (f). In the event the main or substantive provisions of the Act are not covered by sub-clauses (a) to (f), the bill cannot be said to be a “Money Bill”. It was further observed that the use of the word ‘only’ in Article 110(1) has its purpose, which is clear restriction for a bill to be certified as a “Money Bill”. It was, hence, observed that the Aadhaar Act veers around the government’s constitutional obligation to provide for subsidies, benefits and services to individuals and other provisions are only incidental provisions to the main provision. Therefore, the Aadhaar Bill was rightly certified by the Speaker as a “Money Bill.

It is pertinent to note that Chandrachud, J was the lone dissenting judge in the 4:1 Aadhaar-5 verdict and he was also the part of the 5-judge bench that referred the issue of validity of Finance Act being passed as Money Bill to a 7-judge bench. In his minority opinion in the Aadhaar-5 verdict, Chandrachud, J had, referring to the word ‘only’ in Article 110(1) of the Constitution, observed that the pith and substance doctrine which is applicable to legislative entries would not apply when deciding the question whether or not a particular bill is a “Money Bill”. He had held,

“the Money Bill must deal with the declaration of any expenditure to be charged on the Consolidated Fund of India (or increasing the amount of expenditure) and, therefore, Section 7 of the Aadhaar Act did not have the effect of making the bill a Money Bill as it did not declare the expenditure incurred on services, benefits or subsidies to be a charge on the Consolidated Fund of India.”

Noticing that the majority judgment in K.S. Puttaswamy (Aadhaar-5) did not elucidate and explain the scope and ambit of sub-clauses (a) to (f) to clause (1) of Article 110 of the Constitution, a legal position and facet which arises for consideration in the present case and assumes considerable importance, the Court, held

“Given the various challenges made to the scope of judicial review and interpretative principles (or lack thereof) as adumbrated by the majority in K.S. Puttaswamy (Aadhaar-5) and the substantial precedential impact of its analysis of the Aadhaar Act, 2016, it becomes essential to determine its correctness. Being a Bench of equal strength as that in K.S. Puttaswamy (Aadhaar-5), we accordingly direct that this batch of matters be placed before Hon’ble the Chief Justice of India, on the administrative side, for consideration by a larger Bench.”

[Roger Mathew v. South India Bank Ltd.,  2019 SCC OnLine SC 1456, decided on 13.11.2019]


Read the full report on 2018 Aadhaar Judgment here.

Read the full report on the Finance Act judgment here

Case BriefsSupreme Court (Constitution Benches)

Supreme Court: The 5-judge Constitution Bench of Ranjan Goigoi, CJ and NV Ramana, Dr. DY Chandrachud, Deepak Gupta and Sanjiv Khanna, JJ has upheld the validity of Section 184 of the Finance Act, 2017 and held that the said Section does not suffer from excessive delegation of legislative functions as there are adequate principles to guide framing of delegated legislation, which would include the binding dictums of this Court.

The Court, however, struck down the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017, made under Section 184 of the Finance Act, 2017, for being contrary to the parent enactment and the principles envisaged in the Constitution.

In the 255-pages long verdict, CJI Ranjan Gogoi penned the majority opinion for the Bench and Justices DY Chandrachud and Deepak Gupta wrote separate but concurrent opinions.

Majority Opinion written by Gogoi, CJ

Finance Act being a Money Bill

The Court said that the provisions of Article 110(1) have to be given an appropriate meaning and interpretation to avoid and prevent over-inclusiveness or under-inclusiveness. Any interpretation would have far reaching consequences. It is therefore, necessary that there should be absolute clarity with regard to the provisions and any ambiguity and debate should be ironed out and affirmatively decided. In case of doubt, certainly the opinion of the Speaker would be conclusive, but that would not be a consideration to avoid answering and deciding the scope and ambit of “Money Bill” under Article 110(1) of the Constitution.

It, hence, held,

“The issue and question of Money Bill, as defined under Article 110(1) of the Constitution, and certification accorded by the Speaker of the Lok Sabha in respect of Part-XIV of the Finance Act, 2017 is referred to a larger Bench.”

Correctness of Aadhaar Verdict & reference to 7-judge bench

Since both the parties had relied upon the judgment in K.S. Puttaswamy v. Union of India (Aadhaar-5 Judge), (2019) 1 SCC 1, the Court extensively examined the issue and noticed that the majority in K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the Aadhaar Act, 2016 without first delineating the scope of Article 110(1) and principles for interpretation or the repercussions of such process. It said,

“It is clear to us that the majority dictum in K.S. Puttaswamy (Aadhaar-5) did not substantially discuss the effect of the word ‘only’ in Article 110(1) and offers little guidance on the repercussions of a finding when some of the provisions of an enactment passed as a “Money Bill” do not conform to Article 110(1)(a) to (g).”

Noticing that the majority judgment in K.S. Puttaswamy (Aadhaar-5) did not elucidate and explain the scope and ambit of sub-clauses (a) to (f) to clause (1) of Article 110 of the Constitution, a legal position and facet which arises for consideration in the present case and assumes considerable importance, the Court, held

“Given the various challenges made to the scope of judicial review and interpretative principles (or lack thereof) as adumbrated by the majority in K.S. Puttaswamy (Aadhaar-5) and the substantial precedential impact of its analysis of the Aadhaar Act, 2016, it becomes essential to determine its correctness. Being a Bench of equal strength as that in K.S. Puttaswamy (Aadhaar-5), we accordingly direct that this batch of matters be placed before Hon’ble the Chief Justice of India, on the administrative side, for consideration by a larger Bench.”

Validity of Section 184 of Finance Act, 2017

Accepting the submission of Attorney General KK Venugopal that Section 184 was inserted to bring uniformity and with a view to harmonise the diverse and wide-ranging qualifications and methods of appointment across different tribunals carries weight, the Court said,

“we do not think that the power to prescribe qualifications, selection procedure and service conditions of members and other office holders of the tribunals is intended to vest solely with the Legislature for all times and purposes.”

Grounds for striking down the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017

  • Search-cum-Selection Committee as formulated under the Rules is an attempt to keep the judiciary away from the process of selection and appointment of Members, Vice-Chairman and Chairman of Tribunals.
  • There has been a blatant dilution of judicial character in appointments whereby candidates without any judicial experience are prescribed to be eligible for adjudicatory posts such as that of the Presiding Officer. Parliament cannot divest judicial functions upon technical members, devoid of the either adjudicatory experience or legal knowledge.
  • In many Tribunals like the National Green Tribunal where earlier removal of members or presiding officer could only be after an enquiry by Supreme Court Judges and with necessary consultation with the Chief Justice of India, under the present Rules it is permissible for the Central Government to appoint an enquiry committee for removal of any presiding officer or member on its own. The Rules are not explicit on who would be part of such a Committee and what would be the role of the Judiciary in the process. In doing so, it significantly weakens the independence of the Tribunal members.
  • The extremely short tenure of the Members of Tribunals is anti-merit and has the effect of discouraging meritorious candidates to accept posts of Judicial Members in Tribunals.
  • There are also certain contradiction in the Rules that warranted a relook.

The Court, hence, directed the Central Government to re-formulate the Rules ensuring non-discriminatory and uniform conditions of service, including assured tenure, keeping in mind the fact that the Chairperson and Members appointed after retirement and those who are appointed from the Bar or from other specialised professions/services, constitute two separate and distinct homogeneous classes.

The Court, however, granted interim relief and directed that appointments to the Tribunal/Appellate Tribunal and the terms and conditions of appointment shall be in terms of the respective statutes before the enactment of the Finance Bill, 2017 till the new Rules are framed.

Judicial Impact Assessment

The Court issues a writ of mandamus to the Ministry of Law and Justice to carry out a Judcial Impact Assessment of all the Tribunals referable to the Finance Act, 2017 so as to analyse the ramifications of the changes in the framework of Tribunals as provided under the Finance Act, 2017.

Direct Appeal to Supreme Court

The Court also asked the Central Government to re-visit the provisions of the statutes referable to the Finance Act, 2017 or other Acts and place appropriate proposals before the Parliament for consideration of the need to remove direct appeals to the Supreme Court from orders of Tribunals within 6 months.

Chandrachud, J’s separate but concurrent opinion

Chandrachud J, who was the lone dissenting judge in the 4:1 K.S. Puttaswamy (Aadhaar-5)  verdict, has held that Part XIV of the Finance Act 2017 could not have been enacted in the form of a Money Bill, hence, the aspect of money bill should be referred to a larger Bench.

He also suggested that a “National Tribunals Commission” be set up to oversee the selection process of members, criteria for appointment, salaries and allowances, introduction of common eligibility criteria, for removal of Chairpersons and Members as also for meeting the requirement of infrastructural and financial resources. It should comprise of:

  • Three serving judges of the Supreme Court of India nominated by the Chief Justice of India;
  • Two serving Chief Justices or judges of the High Court nominated by the Chief Justice of India;
  • Two members to be nominated by the Central Government from amongst officers holding at least the rank to a Secretary to the Union Government: one of them shall be the Secretary to the Department of Justice who will be the exofficio convener; and
  • Two independent expert members to be nominated by the Union government in consultation with the Chief Justice of India
  • The senior-most among the Judges nominated by the Chief Justice of India shall be designated as the Chairperson of the NTC.

Gupta J’s separate but concurrent opinion

While Gupta, J agreed that it was necessary to have such a Commission which is itself an independent body manned by honest and competent persons, he disagreed on the composition of the said Committee as suggested by Chandrachud, J. He said that the serving Judges of the Supreme Court or the Chief Justice of the High Courts were already overburdened and that it would be much better if they could spend their time and energy in filling up the vacancies in the High Courts rather than venturing into the field of tribunals.

He also said that having a very large committee would not serve the purpose. The Composition of the “National Tribunals Committee” as suggested by Gupta, J is:

  • Two retired Supreme Court Judges with the senior most being the Chairman
  • One retired Chief Justice of High Court to be appointed by the Chief Justice of India.
  • One member representing the executive to be nominated by the Central Government from amongst officers holding the rank of Secretary to the Government of India or equivalent. This member shall be the ex-officio convener.
  • One expert member can be co-opted by the by full time members. This expert member must have expertise and experience in the field/jurisdiction covered by the tribunal to which appointments are to be made.

[Roger Mathew v. South India Bank Ltd., 2019 SCC OnLine SC 1456, decided on 13.11.2019]

Hot Off The PressNews

Supreme Court: The Centre told the 5-judge bench of Ranjan Gogoi, CJ and N V Ramana, D Y Chandrachud, Deepak Gupta and Sanjiv Khanna, JJ that Finance Bill of 2017 was certified as a Money Bill by the Speaker of the Lok Sabha and judicial review of that decision cannot be done.

Attorney General K K Venugopal told the Court that petitioners’ contention that certification of Finance Bill of 2017 as Money Bill was not right cannot be a ground for a challenge to the Bill. He said:

“The Act of 2017 deals with various aspects of finance. Speaker of the House gave the certification that Finance Act was a Money Bill. Finance Act of 2017 was passed by the Parliament as a Money Bill irrespective of the objections in Rajya Sabha.”

He added that “Certification of a particular Act as a Money Bill is an internal functions of the Parliament. If there is any dispute, the Speaker can applies his mind and takes a decision. No one can questions the bonafide of the Speaker and all members abide by the decision.”

Submitting that Supreme Court has repeatedly held in its verdicts that certification cannot be questioned and courts cannot inquire into the decision taken by Parliament, the AG said:

“This aspect is consistent with the broad parameters of separation of powers given in the Constitution. Similarly, Parliament cannot interfere with the affairs of judiciary.”

He also submitted that the Finance Bill comprises of amendments to several Acts and statutes and the petitioners have challenged only one particular aspect saying it cannot be termed as Money Bill.

“The certification of Money Bill is for the whole Finance Bill and saying that a part of the Bill does not qualify for the Money Bill cannot be held to be correct.”

On March 27, the Court had said:

“If we hold that it was not a money bill, then the matter rests there but if it is being held by the court that it was a money bill then subsequent issues which pertains to affairs of tribunal will be dealt,”

The Court clarified that it is not going to hear 20 lawyers on the same point repeatedly saying,

“this anarchy has to stop in the Supreme Court. Lawyers are arguing and arguing for 20 days on the same point”.

It asked the petitioners to discuss among themselves and sort it out as who will advance the arguments and if needed someone else can supplement on a particular point.

The Court will continue hearing the matter on April 2, 2019.

(Source: PTI)


Also read: Integrated Nodal Agency for all Tribunals: 5-judge SC bench seeks Centre’s view

Case BriefsSupreme Court (Constitution Benches)

Supreme Court: To ensure “efficient functioning” and “streamlining the working” of tribunals, the 5-judge bench of Ranjan Gogoi, CJ and N V Ramana, D Y Chandrachud, Deepak Gupta and Sanjiv Khanna, JJ sought to know from the Centre within two weeks its view on bringing all the quasi-judicial bodies under one central umbrella body. The Court said it would not like to be bogged down with what is right or wrong and all it wants is that “the tribunals work efficiently and independently”. It said:

“The Court would like to have benefit of the view of the Government of India as on today by means of an affidavit of the competent authority to be filed within two weeks from today.”

The Court said that it was tentatively of the view that directions given by the Supreme court in its two verdicts of L. Chandra Kumar vs. Union of india, (1997) 3 SCC 261 and Union of India vs. R. Gandhi, President, Madras Bar Association, (2010) 11 SCC 1, for bringing all the tribunals of the country under one nodal agency should have been “implemented long back”.

“There cannot be any manner of doubt that to ensure the efficient functioning and to streamline the working of tribunals, they should be brought under one agency, as already felt and observed by this Court… The Court would like to have benefit of the view of the government of India as on today by means of an affidavit of the competent authority to be filed within two weeks from today,”

The Court further said:

“While every endeavour would be made by the nominee of the Chief Justice who heads the Selection Committee before whom the issue of recommendations may have been pending to expedite the same, such of the recommendations which have already been made by the Search-cum-Selection Committee as is in the case of National Company Law Tribunal and National Company Law Appellate Tribunal, should be immediately implemented by making appointments within the aforesaid period of two weeks and the result thereof be placed before the Court vide affidavit of the competent authority, as ordered to be filed by the present order.”

The bench said that once all the information with regard to appointments of members of tribunal and the Centre’s view is made available, it would pass appropriate orders which may include remitting the matter to smaller bench for monitoring on a continuous basis and “for ensuring due and proper functioning of the tribunals.

The bench was hearing a petition filed by Madras Bar Association in 2012, which sought orders to the Centre for implementing the directions given in its two verdicts in 1997 and 2010. They had ordered the Union Ministry of Law and Justice to take over the administration of all tribunals created by Parliament and streamline their functioning.

During the hearing, Attorney General K K Venugopal, appearing for Centre, pointed out to the bench that certain difficulties in implementing the orders, including the need for an amendment of the Government of India (Allocation of Business) Rules, 1961.

He said the Ministry of Law and Justice was already overburdened with lot of works and may not be able to act and function as the nodal agency, which the Court had in mind while issuing directions way back in the year 1997.

“if the ministry is to act as a nodal agency for all the tribunals then it would have to deal with various issues, including over thousands of appointments of members of the tribunals and infrastructure, which would not be feasible.”

He cited the example of under-staffed central law agency situated in the apex court that an affidavit was filed months back by the government but none of the law officers had any clue about it. He suggested that for efficient and independent working of the tribunal a central body called National Tribunal Commission should be created, which could also look about all aspects including infrastructure and appointments.

Senior advocate Arvind Datar, who led the arguments for the petitioner, said that for effective and smooth functioning of tribunals, one umbrella body is needed as directed by the Court way back in 1997 and 2010.

On the pleas challenging the Constitutional validity of the Finance Act of 2017:

“If we hold that it was not a money bill, then the matter rests there but if it is being held by the court that it was a money bill then subsequent issues which pertains to affairs of tribunal will be dealt,”

The Court clarified that it is not going to hear 20 lawyers on the same point repeatedly saying,

“this anarchy has to stop in the Supreme Court. Lawyers are arguing and arguing for 20 days on the same point”.

It asked the petitioners to discuss among themselves and sort it out as who will advance the arguments and if needed someone else can supplement on a particular point.

[Madras Bar Association v. Union of India, 2019 SCC OnLine SC 424, order dated 27.03.2019]

(With inputs from PTI)

Case BriefsSupreme Court

Supreme Court: Acknowledging the need of having an effective and autonomous oversight body for all the Tribunals, the bench of AK Goel and Indu Malhotra, JJ called for urgent setting up of a committee, preferably of three members, one of whom must be retired judge of this Court who may be served in a Tribunal. The Court said that such body should be responsible for recruitments and oversight of functioning of members of the Tribunals.

During the course of hearing, it was brought to the Court’s notice that appointment, norms and functioning of Debt Recovery Tribunals was not consistent with the observations of this Court in various judgments and hence, restructuring of Tribunals and specially creation of a regular cadre to man the Tribunals was necessary.

Amicus Curiae Arvind P. Datar suggested setting up of all India Tribunal service on the pattern of U.K.  and said that the members can be drawn either from the serving officers in Higher Judicial Service or directly recruited with appropriate qualifications by national competition. He also submitted a Concept Note before the Court in which he suggested:

“The Tribunals should not be heaven for retired persons and appointment process should not result in decisions being influenced if the Government itself is a litigant and the appointing authority at the same time. There should be restriction on acceptance of any employment after retirement.”

The Court, hence, summed up the following issues for the consideration of the committee:

  1. Creation of a regular cadres laying down eligibility for recruitment for Tribunals;
  2. Setting up of an autonomous oversight body for recruitment and overseeing the performance and discipline of the members so recruited and other issues relating thereto;
  3. Amending the scheme of direct appeals to this Court so that the orders of Tribunals are subject to jurisdiction of the High Courts;
  4. Making Benches of Tribunals accessible to common man at convenient locations instead of having only one location at Delhi or elsewhere. In the alternative, conferring jurisdiction on existing courts as special Courts or Tribunals.

The Court directed that the Committee can have inter action with all stakeholders and suggest a mechanism in a time bound manner, consistent with the constitutional scheme as interpreted by this Court in several decisions and also in the light of recommendations of expert bodies.

The Court will next take up the matter on 10.05.2018. [Roger Mathew v. South Indian Bank Limited,  2018 SCC OnLine SC 500, order dated 07.05.2018]

Case BriefsSupreme Court

Supreme Court: Deciding the question as to whether Section 5 of the Limitation Act, 1963 can be invoked to condone the prescribed period of 30 days, under Section 30(1) of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) for preferring an appeal before the Tribunal, against an order of the Recovery officer, the 3-judge bench of Ranjan Gogoi and AM Sapre and Navin Sinha, JJ held that the prescribed period of 30 days under Section 30(1) of the RDB Act for preferring an appeal against the order of the Recovery officer cannot be condoned by application of Section 5 of the Limitation Act.

Explaining the scope of Section 5 of the Limitation Act, the Court said that it provides that the appeal or application, with the exception of Order XXI, CPC may be admitted after the prescribed period, if the applicant satisfies the court that he has sufficient cause for not preferring the application within time. Considering this, the Court said that the pre-requisite, therefore, is the pendency of a proceeding before a court. The proceedings under the Act being before a statutory Tribunal, it cannot be placed at par with proceedings before a court. It was said:

“The fact that the Tribunal may be vested with some of the powers as a Civil Court under the Code of Civil Procedure, regarding summoning and enforcing attendance of witnesses, discovery and production of the documents, receiving evidence on affidavits, issuing commission for the examination of witnesses or documents, reviewing its decisions etc. does not vest in it the status of a Court.”

Stating that RDB Act is a special law where the proceedings are before a statutory Tribunal, the bench said

“the scheme of the Act manifestly provides that the Legislature has provided for application of the Limitation Act to original proceedings before the Tribunal under Section 19 only. The appellate tribunal has been conferred the power to condone delay beyond 45 days under Section 20(3) of the Act. The proceedings before the Recovery officer are not before a Tribunal. Section 24 is limited in its application to proceedings before the Tribunal originating under Section 19 only.”

It was explained that the exclusion of any provision for extension of time by the Tribunal in preferring an appeal under Section 30 of the Act makes it manifest that the legislative intent for exclusion was express. Hence, the application of Section 5 of the Limitation Act by resort to Section 29(2) of the Limitation Act, 1963 does not arise. [International Asset Reconstruction Company of India Ltd. v. Official Liquidator of Aldrich Pharmaceuticals Ltd., 2017 SCC OnLine SC 1245, decided on 24.10.2017]

Hot Off The PressNews

Supreme Court: On 04.08.2017, the bench of J.S. Khehar, CJ and Dr. D.Y. Chandrachud, J agreed to hear the plea filed by Congress leader Jairam Ramesh challenging the validity of some provisions of the Financy Act, 2017 on the ground that those provisions would destroy the independent functioning of the NGT and 18 other tribunals.

The Court, however, refused to stay the operation of the Act and tagged the petition with a  similar pending petition filed by NGO Social Action for Forest and Environment.

The Finance Act, 2017, which came into effect from April 1, led to framing of the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 and these allegedly gave “unbridled” powers to the Executive to decide the qualification of the members, their appointment and removal among other issues. The petitioner said that the changes brought about by the Act would weaken functioning of tribunals including the NGT and curtail their powers and that the tribunal rules gave primacy to the Executive in the appointment and removal process of the chairperson or president and judicial members of the statutory tribunals and authorities and it amounted to attempting to usurp judicial appointment powers and influence the administration of justice.

Source: PTI