Legal RoundUp

Here’s a run-through of all the significant decisions covered in the month of July, 2021 under the Section of Tribunals/Commission/Regulatory Bodies.


Appellate Tribunal for Electricity

 

Solar Project

Whether there was bona fide delay in commissioning the solar power project?

“…allowed an appeal which was filed against the Order of Karnataka Electricity Regulatory Commission (Commission) whereby, the Commission has held that the Applicant/Appellant was not entitled to extension of time for commissioning of solar power project in terms of the Power Purchase Agreement and Supplementary power Purchase Agreement.”

Read more: https://bit.ly/3jbKtvP


Armed Forces Tribunal

War Injury Pension

Tribunal grants war injury pension to WW-2 soldier who suffered splinter wound injury in Italy

“…war injury pension to World War-2 veteran who suffered splinter wound injury in his right leg”

Read more: https://bit.ly/37cxXXi


Customs Excise & Service Tax Appellate Tribunal

Input Services

Whether distribution of credits on input services attributable to final product on a pro-rata basis proportionate to turnover of each unit between manufacturing plants? Tribunal answers

“…issue involved was that the appeals was whether Parle Biscuits was justified in distributing credits on input services attributable to the final product on a pro-rata basis proportionate to the turnover of each unit between the manufacturing plants of Parle Biscuits and its contract manufacturing units, including Krishna Foods, under Rule 7(d) of the CENVAT Rules.”

Read more: https://bit.ly/2V5CYhG

Convenience Fee

“Convenience fee” charged by PVR for online booking of movie tickets under OIDAR category under S. 65(105) (zh) of Finance Act taxable or not? Tribunal explains

“Issue involved was related to to taxability of “convenience fee” charged by PVR Limited on its customers for online booking of movie tickets under the category of “online information and database access retrieval system” defined under section 65 (75) of the Finance Act and taxable under section 65 (105)(zh) of the Finance Act.” 

Read more: https://bit.ly/3rKRvvg

Principles of Natural Justice

Revenue has miserably failed to discharge its onus; Tribunal finds impugned order opposed to principles of natural justice

https://bit.ly/37a5uB8

CENVAT Credit

Admissibility of the Cenvat Credit in respect of outward GTA; Tribunal allows appeal

https://bit.ly/3xcJKzf


Central Information Commission

Right to Information Act

Can S. 8(1)(d), RTI Act be invoked to deny copy of thesis in view of commercial viability and to protect interests of scholar and his guide?

“…thesis publication of the research scholars cannot be reasonably even brought under any of the suo motu components of disclosure envisaged under Section 4 of the RTI Act, thereby reinforcing the proposition that the protection of Section 8 and 9 exemptions is very much available to the CPIO in the instant case.”

Read more: https://bit.ly/3fbpI23


Delhi State Consumer Disputes Redressal Commission

 

Deficiency of Service

Will Camera Manufacturer — Nikon be liable for deficiency of service caused to a consumer who lost all his photographs due to memory card getting corrupted?

“…Nikon was neither the manufacturer, dealer, importer, wholesaler of the Memory Card which got corrupted leading to the loss of the photos.”

Read more: https://bit.ly/3fbqg87

Builder-Buyer Dispute

Builder handing over possession of plot with incomplete development beyond agreed time. Is buyer entitled to refund of deposit with interest? Commission decides

“Possession of the plot land booked by the complainant was not handed over within the time agreed to despite the complainant has made the payment to the extent sought from time to time.”

Read more: https://bit.ly/2WJUV6d


National Consumer Disputes Redressal Commission

Medical Negligence

  • Can Wheelchair injuries be covered under the ambit of medical negligence?

“Wheelchairs are usually thought of a medical device that is meant to help those who are injured or have physical challenges; they can also be a source of injury when not properly used. Most wheelchair injuries that happen in a medical setting due to the negligence of medical staff and such could be easily prevented by a hospital or nursing home.”

Read more: https://bit.ly/3fimrOy

  • In case a medical practitioner chooses to follow one procedure instead of another, which turned out to be a failure, Can the said act be negligent?

“…The medical professional is often called upon to adopt a procedure that involves a higher element of risk, but which he honestly believes as providing greater chances of success for the patient rather than a procedure involving lesser risk but higher chances of failure.”

Read more: https://bit.ly/3idk4hG


National Company Law Appellate Tribunal

 

Insolvency Proceedings

An Arroyo for OYO | While allowing it to work independently, closed insolvency proceedings; Disallowed external parties to impinge

“We are of the considered view that before Constitution of Committee of Creditors (CoC) mere filing of a ‘Claim’ does not constitute a default per se. It is only on the basis of the ‘Claims’ that the CoC is constituted. In a catena of Judgments, the Supreme Court has reiterated that the prime objective of the Court is not recovery, but revival”.

Read more: https://bit.ly/3rO12BU


National Company Law Tribunal

Personal Guarantor

Personal Guarantor not liable to be prosecuted under S. 95 IBC where corporate debtor concerned is not under corporate insolvency resolution process

https://bit.ly/2Vmxnn0


National Green Tribunal

No Odour control system required to prevent odour from Sewage Treatment Plant. Why? NGT imposes costs on Delhi Jal Board: Why DJB is shirking its responsibility?

Mere spraying of chemical solution and other superficial steps is not effective in installing an effective odour control unit.”

Read more: https://bit.ly/3rMxOTD


National Human Rights Commission

Fr. Stan Swamy | Medical Treatment

  • Ensure every possible medical treatment to imprisoned FR. Stan Swamy as part of life saving measure and protection of his basic human rights: NHRC

https://bit.ly/3yk7ov5

Manual Scavenging

  • Manual scavenging and hazardous cleaning still remain a stinking truth of our nation: NHRC

https://bit.ly/3yi3seb

Post-Poll Violence in West Bengal

  • NHRC refutes allegations in a section of media regarding leakage of report relating to post poll violence in West Bengal

https://bit.ly/3BZMT9h


Securities Exchange Board of India

Fraudulent Scheme

 Manipulation in prices, fraudulent scheme results in debarment-Global Infratech, Directors and 12 other entities ousted from the market

https://www.scconline.com/blog/post/2021/07/23/manipulation-in-prices/

Insider Trading

Financial Racket: Kundra, Shetty into murky waters again | Imposes fine for insider trading on Viaan Industries

https://bit.ly/2V0zFZq


 Securities Appellate Tribunal

 

Collective Investment Scheme

Unregistered Collective Investment Scheme violative of S. 12(1)(b) of SEBI Act and Regulations, order to pay 10% p.a. interest on refundable amount not vitiated

https://bit.ly/3j728EJ


Tribunals/Regulatory Bodies/Commissions Monthly Roundup | June 2021

Case BriefsSupreme Court

Supreme Court: A 3-Judge Bench of the Supreme Court, by a majority of 2:1, has declared that certain portions of Section 184 of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 are unconstitutional and inoperative. Section 184 consists of provisions relating to the qualifications, appointment, etc., of Chairperson and Members of tribunals. The majority was formed by L. Nageswara Rao, J. who delivered the leading opinion, and S. Ravindra Bhat, J. penning a separate concurring opinion. Whereas, Hemant Gupta, J. wrote a substantially dissenting opinion.

The Challenge

The Madras Bar Association filed the instant writ petition seeking a declaration that Section 12 of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (“Ordinance”) and Section 184 of the Finance Act, 2017 as amended by the Ordinance are 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, apart from being contrary to the principles laid down by several earlier judgments[1] of the Supreme Court.

The dispute raised in the writ petition relates to:

(i) First proviso to Section 184(1) according to which a person below the age of 50 years shall not be eligible for appointment as Chairperson or Member; and also the second proviso, read with the third proviso, which stipulates that the allowances and benefits payable to Chairpersons and Members shall be the same as a Central Government officer holding a post carrying the same pay as that of the Chairpersons and Members.

(ii) Section 184(7) which stipulates that the Selection Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member and the Central Government shall take a decision preferably within three months from the date of the recommendation of the Committee, notwithstanding any judgment, order or decree of any Court.

(iii) Section 184(11) which shall be deemed to have been inserted with effect from 26-5-2017, provides that the term of office of the Chairperson and Member of a tribunal shall be four years. The age of retirement of the Chairperson and Members is specified as 70 years and 67 years, respectively. As per the proviso, if the term of office or the age of retirement specified in the order of appointment issued by the Central Government for those who have been appointed between 26-5-2017 and 4-4-2021 is greater than that specified in Section 184(11), the term of office or the age of retirement shall be as set out in the order of appointment, subject to a maximum term of office of five years.

The Finance Act and the Ordinance

The Finance Act, 2017 was brought into force from 31-3-2017 to give effect to the financial proposals for the financial year 2017-18. Sections 183 to 189 thereof dealt with conditions of service of Chairperson and Members of Tribunals, Appellate Tribunals and other authorities.

The Tribunal Reforms (Rationalisation and Conditions of Service) Bill, 2021 was introduced in the Lok Sabha on 13-2-2021 but could not be taken up for consideration. According to the Statement of Objects and Reasons, the said Bill was proposed with a view to streamline tribunals and sought to abolish certain tribunals and other authorities, which “only add to another additional layer of litigation” and were not “beneficial for the public at large”. Thereafter, the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 was promulgated on 4-4-2021. Chapter XI thereof makes amendments to the Finance Act, 2017.

Discussion and Observations

  1. Separation of Power

Discussing this indispensable concept, the Court said that the doctrine of separation of powers, though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of the Indian Constitution. It forms part of basic structure of the Constitution. The Constitution has made demarcation, without drawing formal lines between the three organs ─ legislature, executive and judiciary, which is nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution. Accordingly, breach of separation of judicial power may amount to negation of equality under Article 14. Stating thus, the Court reaffirmed:

Violation of separation of powers would result in infringement of Article 14 of the Constitution. A legislation can be declared as unconstitutional if it is in violation of the principle of separation of powers.

  1. Independence of Judiciary

On this point, the Court recorded that independence of judiciary is a fighting faith of our Constitution. It is cardinal principle of the Constitution that an independent judiciary is the most essential characteristic of a free society like ours and the judiciary which is to act as a bastion of the rights and freedom of people is given certain constitutional guarantees to safeguard independence of judiciary. An independent and efficient judicial system has been recognised as a part of basic structure of our Constitution.

After discussing Article 50 (which provides that the State shall take steps to separate the judiciary from the executive in the public services of the State) and Article 37 (which declares that the principles laid down in Part IV of the Constitution are fundamental in the governance of the country and it should be the duty of the State to apply the principles in making laws), the Court observed:

[Independence] is the lifeblood of the judiciary. … It is the freedom from interference and pressures which provides the judicial atmosphere where [a Judge] can work with absolute commitment to the cause of justice and constitutional values. It is also the discipline in life, habits and outlook that enables a Judge to be impartial. Its existence depends however not only on philosophical, ethical or moral aspects but also upon several mundane things ─ security in tenure, freedom from ordinary monetary worries, freedom from influences and pressures within (from others in the judiciary) and without (from the executive).

  1. Judicial Decisions and Legislative Overruling

The controversy that arose for consideration of the Court in the instant writ petition relates to the legislative response to the judgment of the Court in Madras Bar Assn. v. Union of India, 2020 SCC OnLine SC 962 (“Madras Bar Assn. case“). In that case, the validity of the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020 (“2020 Rules”) was challenged by the Madras Bar Association. The relevant portions of the decision in Madras Bar Assn. case along with the affect of the Ordinance are discussed below at relevant place.

(A) Judicial Review

Appreciating the scope of judicial review of ordinances, the Court noted that it is the same as that of a legislative act. Article 123 of the Constitution empowers the President to promulgate an ordinance during recess of the Parliament, which shall have the same force and effect as an act of the Parliament. The validity of an ordinance can be challenged on grounds available for judicial review of a legislative act.

The power to strike down primary legislation enacted by the Union of India or the State legislatures is on limited grounds. Where there is challenge to the constitutional validity of a law enacted by the legislature, the Court must keep in view that there is always a presumption of constitutionality of an enactment and a clear transgression of constitutional principles must be shown. The Court reiterated that:

[S]ans flagrant violation of the constitutional provisions, the law made by Parliament or a State legislature is not declared bad and legislative enactment can be struck down only on two grounds: (i) that the appropriate legislature does not have the competence to make the law, and (ii) that it takes away or abridges any of the fundamental rights enumerated in Part III of the Constitution or any other constitutional provisions. [‘Manifest arbitrariness’ is also recognised] as a ground under Article 14 on the basis of which a legislative enactment can be judicially reviewed.

(B) Permissible Legislative Overruling

The Court culled out the principles in accordance with which legislative overruling could be permissible:

(i) The effect of the judgments of the Court can be nullified by a legislative act removing the basis of the judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution.

(ii) The test for determining the validity of validating legislation is that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment. In other words, the defect pointed out should have been cured such that the basis of the judgment pointing out the defect is removed.

(iii) Nullification of mandamus by an enactment would be an impermissible legislative exercise. Even interim directions cannot be reversed by a legislative veto.

(iv) Transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the rule of law and of Article 14 of the Constitution of India.

Validity of the Ordinance and Amended Provisions

The grievance of the petitioners was mainly related to the violation of the first proviso and the second proviso, read with the third proviso, to Section 184(1), Sections 184(7) and 184(11) of the Finance Act, 2017 as amended by the Ordinance.

  1. Section 184(1)

(A) The first proviso of Section 184(1) provides minimum age for appointment as Chairperson or Member of a tribunal as 50 years.

One of the issues considered in Madras Bar Assn. case was the correctness of the conditions imposed in the 2020 Rules that an advocate is eligible for appointment as a Member only if he has 25 years of experience. It is relevant to state that advocates were ineligible for most of the tribunals. In Madras Bar Assn. case, the Court found the exclusion of advocates from being appointed as Members to be contrary to earlier judgments of the Court. In such view of the matter, a direction was given to amend the 2020 Rules to make advocates with at least 10 years of experience at the bar eligible for appointment as Members in tribunals.

Discussing that the direction given in the nature of mandamus in Madras Bar Assn. case is to the effect that advocates are eligible for appointment as Members, provided they have experience of 10 years, the Court in the instant petition observed:

The first proviso to Section 184 which prescribes a minimum age of 50 years is an attempt to circumvent the direction issued in Madras Bar Assn. case striking down the experience requirement of 25 years at the bar for advocates to be eligible. Introduction of the first proviso to Section 184(1) is a direct affront to the judgment of this Court in Madras Bar Assn. case.”

Underlining the importance of recruitment of Members from the bar at a young age to ensure a longer tenure, the Court was of the view that fixing a minimum age for recruitment of Members as 50 years would act as a deterrent for competent advocates to seek appointment. Practically, it would be difficult for an advocate appointed after attaining the age of 50 years to resume legal practice after completion of one term, in case he is not reappointed. Security of tenure and conditions of service are recognised as core components of independence of the judiciary. Independence of the judiciary can be sustained only when the incumbents are assured of fair and reasonable conditions of service, which include adequate remuneration and security of tenure.

The Court found that first proviso to Section 184(1) is in violation of the doctrine of separation of powers as the judgment Madras Bar Assn. case has been frustrated by an impermissible legislative override.

Resultantly, the first proviso to Section 184(1) was declared unconstitutional as it is violative of Article 14 of the Constitution.

It was directed that the selections conducted for appointment of Members, ITAT pursuant to the advertisement issued in 2018 should be finalised and appointments made by considering the candidates between 35 to 50 years as also eligible.

Ravindra Bhat, J., in his separate concurring opinion said that:

Prescribing 50 years as a minimum age limit for consideration of advocates has the devastating effect of entirely excluding successful young advocates, especially those who might be trained and competent in the particular subject (such as Indirect Taxation, Anti-Dumping, Income-Tax, International Taxation and Telecom Regulation). The exclusion of such eligible candidates in preference to those who are more than 50 years of age is inexplicable and therefore entirely arbitrary.

(B) The second proviso to Section 184(1) deals with the allowances and benefits payable to the Members which are to be the same as are admissible to a Central Government officer holding a post carrying the same pay.

In Madras Bar Assn. case, the Court considered Rule 15 of the 2020 Rules according to which, Chairpersons and Members of tribunals were entitled to House Rent Allowance at the same rate as admissible to officers with the Government of India holding Group ‘A’ post carrying the same pay. In that case, it was noted that an amount of Rs 75,000 per month which was paid as HRA was not sufficient to get a decent accommodation in Delhi for Chairpersons and Members of tribunals. Taking note of the serious problem of housing and the inadequate amount that was being paid as HRA to the Members, the Court in that case directed enhancement of HRA to Rs 1,25,000 per month to the Members and Rs 1,50,000 per month to Chairperson or Vice-Chairperson or President of tribunals. This direction was made effective from 1-1-2021.

Noting the submission of the Amicus Curiae that result of the instant amendment made by the Ordinance is that the Members of tribunals working in Delhi will get Rs 60,000 as HRA, the Court was of the view that the second proviso to Section 184(1), read with the third proviso, is an affront to the judgment in Madras Bar Assn. case. The direction issued in Madras Bar Assn. case for payment of HRA was to ensure that decent accommodation is provided to tribunal Members. Such direction was issued to uphold independence of the judiciary and it cannot be subject matter of legislative response. The Court held that a mandamus issued by the Supreme Court cannot be reversed by the legislature as it would amount to impermissible legislative override.

Therefore, the second proviso, read with the third proviso, to Section 184(1) was declared as unconstitutional.

The Court noted that after the judgment in the instant writ petition was reserved on 3-6-2021, the Ministry of Finance amended the 2020 Rules whereby the earlier Rule 15 was substituted[2]. The Explanatory Memorandum at the end of the notification states that the amendment to Rule 15 of the 2020 Rules on HRA, shall be given retrospective operation with effect from 1-1-2021, in order to give effect to the judgment in Madras Bar Assn. case. The Court was of the opinion that this amendment to Rule 15 is in conformity with the directions on the subject of HRA in Madras Bar Assn. case. In view thereof, no further direction is required to be given with respect to HRA.

  1. Section 184(7)

(A) Section 184(7) stipulates that a Search-cum-Selection Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member and the Central Government shall take a decision preferably within three months from the date of the recommendation of the Committee, notwithstanding any judgment, order or decree of any Court.

Rule 4(2) of the 2020 Rules pertains to the procedure to be followed by the Selection Committee. According to the said Rule, the Selection Committee should recommend two or three names for appointment to each post. A direction was given in Madras Bar Assn. case to amend Rule 4(2) of the 2020 Rules to provide that the Selection Committee shall recommend one person for appointment in each post in place of a panel of two or three persons for appointment to each post.

The Court recorded that sufficient reasons were given in Madras Bar Assn. case to hold that executive influence should be avoided in matters of appointments to tribunals ─ therefore, the direction that only one person shall be recommended to each post. The decision of the Court in that regard is law laid down under Article 141 of the Constitution. The only way the legislature could nullify the said decision was by curing the defect in Rule 4(2). There is no such attempt made except to repeat the provision of Rule 4(2) of the 2020 Rules in the Ordinance amending the Finance Act, 2017.

Ergo, Section 184(7) was declared to be unsustainable in law as it is an attempt to override the law laid down by the Supreme Court.

(B) The second part of Section 184(7) provides that the Government shall take a decision regarding the recommendations made by the Selection Committee preferably within a period of three months. This was in response to the direction in Madras Bar Assn. case that the Government shall make appointments to tribunals within three months from the completion of the selection and recommendation by the Selection Committee.

Such direction, the Court noted, was necessitated in view of the lethargy shown by the Union of India in making appointments and filling up the posts of Chairpersons and Members of tribunals which have been long vacant. The direction given in Madras Bar Assn. case for expediting the process of appointment was in the larger interest of administration of justice and to uphold the rule of law.

The Court held, Section 184(7) as amended by the Ordinance permitting the Government to take a decision preferably within three months from the date of recommendation of the Selection Committee is invalid and unconstitutional, as this amended provision simply seeks to negate the directions of the Supreme Court.

  1. Section 184(11)

(A) The tenure of the Chairperson and Member of a tribunal is fixed at four years by Section 184(11), notwithstanding anything contained in any judgment, order or decree of any court. Sub-section (11) of Section 184 has been given retrospective effect from 26-5-2017.

Rule 9 of 2020 Rules had specified the term of appointment of the Chairperson or Member of the Tribunal as four years.  After perusing the law laid down by earlier judgments that a short stint is anti-merit, the Court in the Madras Bar Assn. case directed the modification of tenure in Rules 9(1) and 9(2) as five years in respect of Chairpersons and Members of tribunals.

The Court, in the instant petition, held that insertion of Section 184(11) prescribing a term of four years for the Chairpersons and Members of tribunals by giving retrospective effect to the provision from 26-5-2017 is clearly an attempt to override the declaration of law by the Supreme Court under Article 141 in the Madras Bar Assn. case.

Therefore, clauses (i) and (ii) of Section 184(11) were declared as void and unconstitutional.

(B) The proviso to Section 184(11) refers to appointments that were made to the posts of Chairperson or Members between 26-5-2017 and the notified date, i.e., 4-4-2021. The proviso lays down that the term of office of Chairperson and Members of tribunals who were appointed between 26-5-2017 and 4-4-2021 shall be five years even though the order of appointment issued by the Government had a higher term of office or age of retirement.

On this point, the Court referred to the interim directions given by the Supreme Court on 9-2-2018 in Kudrat Sandhu v. Union of India, 2018 SCC OnLine SC 2898 wherein it was held that all selections to the post of Chairperson/ Chairman, Judicial/ Administrative Members shall be for a period as provided in the Act and the Rules in respect of all tribunals. Reference was also made to certain subsequent orders passed in the same case of Kudrat Sandhu.

Coming back to the instant petition, the Court was of the opinion that though, there is nothing wrong with the proviso to Section 184(11) being given retrospective effect, the appointments made pursuant to the interim directions passed by the Supreme Court cannot be interfered with. The Court pointed out that even the interim orders passed by the Supreme Court cannot be overruled by a legislative act.

While making it clear that the appointments that are made to the CESTAT on the basis of interim orders passed by the Supreme Court shall be governed by the relevant statute and the rules framed thereunder, as they existed prior to the Finance Act, 2017, the Court upheld the retrospectivity given to the proviso to Section 184(11). Clarifying further, the Court stated that appointments after 4-4-2021 shall be governed by the Ordinance, as modified by the directions in the instant judgment.

Consequently, Section 12 of the Ordinance making amendments in the earlier Section 184 of the Finance Act, 2017, also stands invalidated.

The Dissent

Lastly, it may also be mentioned that the upshot of the dissenting opinion written by Hemant Gupta, J. (as summarised by S. Ravindra Bhat, J. in his opinion) was that as regards prescription of minimum age or with respect to conditions of service such as payment of house rent allowance, the Court ought to respect legislative wisdom; and that the directions issued in past judgments cannot bind Parliament, as they fell outside the judicial sphere.

The writ petition stood disposed of in terms of the majority judgment. [Madras Bar Assn. v. Union of India, 2021 SCC OnLine SC 463, decided on 14-7-2021]


[1] Union of India v. Madras Bar Assn., (2010) 11 SCC 1; Madras Bar Assn. v. Union of India, (2014) 10 SCC 1; Rojer Mathew v. South Indian Bank Ltd., (2020) 6 SCC 1; and Madras Bar Assn. v. Union of India, 2020 SCC OnLine SC 962

[2] Vide Rule 6, the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) (Amendment) Rules, 2021


Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

Legal RoundUp

Here’s a run-through of all the significant decisions covered in the month of June, 2021 under the Section of Tribunals/Commission/Regulatory Bodies.


Armed Forces Tribunal

♦ AFT | Pension cannot be denied for disability being less than 20% where the disability is assessed at 15-19%“

The assessment of disability to the tune of 15-19% itself is a doubtful assessment and cannot be final for the simple reason that there is no barometer which can assess the disability percentage to the extent of 1% and therefore, the percentage of disability which has been assessed as 15-19% may be 20% also and there may be variation of at least two percent plus also. In case of doubt as the benefit should always be given to the applicant.”

https://wp.me/scenps-pension


Competition Commission of India

♦ CCI examines if airlines were involved in cartelization resulting in anti-competitive practice during Jat Agitation in 2016 || Synoptic view of Judgment

“…with the use of algorithms, there exists a high possibility of collusion with or without the need of human intervention or coordination between competitors.”

https://wp.me/pcenps-130u

♦ ABFI prohibits State Baseball Associations from joining unrecognised leagues, threatens disciplinary action | CCI to examine such conduct in light of provisions of Competition Act

“ABFI isued communication to its affiliated State Baseball Association requested them no to entertain unrecognized bodies and further by requesting them not to allow their respective State players to participate in any of the tournaments organized by such unrecognized bodies, has violated the provisions of Section 4(2)(c) of the Act as it resulted in denial of market access to other federations.”

https://wp.me/pcenps-130J

♦ CCI | Did Google leverage dominance in Play Store? Director-General to conduct investigation in complaint by smart phone/smart TV users

“..by making pre-installation of Google’s proprietary apps conditional upon signing of ACC for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android and thereby limited technical or scientific development relating to goods or services to the prejudice of consumers in contravention of Section 4(2)(b) of the Act.”

https://wp.me/scenps-google

♦ Are Tourist Taxi Unions in State of Goa preventing entry of App-based Taxi Aggregator Companies in Goa? Read a detailed account of CCI’s decision

“..despite the opposition of taxi unions, the State of Goa does not appear to have acceded to or conceded to the demands of the OPs and the policy allowing entry of app based taxi aggregators was eventually notified.”

https://wp.me/pcenps-13au

♦ CCI | Co-location facility of National Stock Exchange is anti-competitive? Is the service an autocratic move against traders? Comprehensive Report

A robust exchange acts as a backbone of the financial system and the provision of co-location facility by exchanges help increase volumes of trades manifold and provides liquidity to investors. This augurs well for the market, the companies and the economy.

https://wp.me/pcenps-13aA


Customs, Excise and Services Tax Appellate Tribunal

♦ CESTAT | Assessable Value to include Advertising and Marketing Costs, if relatable to Imported Goods; Tribunal provides relief to Volvo Auto India

https://wp.me/pcenps-1312


Income Tax Appellate Tribunal

♦ ITAT | Whether DTAA protection in respect of taxation of dividend in source jurisdiction, can be extended to ‘dividend distribution tax’ under S. 115-O, Income Tax Act, in the hands of a domestic company? Matter referred to larger Bench

“Whether the protection granted by the tax treaties, under Section 90 of the Income Tax Act, 1961, in respect of taxation of dividend in the source jurisdiction, can be extended, even in the absence of a specific treaty provision to that effect, to the dividend distribution tax under Section 115-O in the hands of a domestic company?”

https://wp.me/scenps-taxation


National Consumer Disputes Redressal Commission

♦ NCDRC | In a case of death insurance claim, can police investigation be replaced by private agency investigation engaged by insurance company? Commission spells out

Inquest is conducted as mandated under the Cr.P.C., Post Mortem is conducted by the concerned government Medical Officer, Investigation is conducted by the Police (a private agency engaged by the Insurance Co. does not substitute for the Police).

https://wp.me/pcenps-12Zd

♦ NCDRC | Builder unilaterally, high-handedly cancels sale agreement on not handing over timely possession: Commission decides builder-buyer dispute, levies interest to be paid by builder

“According to Section 8 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, if the builder is not able to hand over the possession over the building/flat within the time specified in the agreement then the builder is liable to pay interest to the purchaser of the flat for the period for which the possession has not been handed over.”

https://wp.me/pcenps-139u


National Company Law Appellate Tribunal

NCLAT | Can Banks debit amounts from Corporate Debtor Company after Moratorium Order? Is there an obligation of releasing ‘title deeds’ under Resolution Process? Read on

Banks cannot freeze accounts, nor can they prohibit the ‘Corporate Debtor’ from withdrawing the amount as available on the date of the moratorium for its day-to-day functioning.

https://wp.me/pcenps-12UG


Real Estate Regulatory Authorities

Rajasthan Real Estate Regulatory Authority, Jaipur

♦ Is S. 13 of RERA Act a mandatory requirement? Can promoter demand cost of plot more than 10% before registering sale agreement? | Raj RERA decides

https://wp.me/scenps-rera

Maharashtra Real Estate Regulatory Authority, Mumbai

♦ Can promoter/builder sell covered car parking by charging certain amount? Whether open parking has to be handed to society or can be sold in open market? MahaRERA decides

https://wp.me/pcenps-133Q


State Consumer Forums

State Consumer Disputes Redressal Commission, U.T. Chandigarh

♦ Consumer spending hefty amount has right to ask for record of expenditure. Can service provider evade liability? Read on

“…every person who is shredding hefty amount from his pocket towards the services being provided to him, has the right to know as to how, where and in what manner, the same has been utilized.”

https://wp.me/pcenps-12OG

Consumer Disputes Redressal Commission Gujarat State, Ahmedabad

♦ Consumer Forum | Can complainant raise consumer dispute where excess electricity duty is charged? Is he overriding statutory remedy if he already approached the Collector? Read on

“Section 3 of Consumer Proetction Act cannot be said to be inconsistent with Rule 12 of the Electricity Duty Rules.”

https://wp.me/pcenps-12Ns

State Consumer Disputes Redressal Commission, Telangana

♦ Can insurance company repudiate claim if insured suppresses fact of suffering from ailment while taking policy? Telangana State Consumer Forum answers

“If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.”

https://wp.me/pcenps-134C


Securities Appellate Tribunal

♦ Oscillating Independent Director; SAT to determine independency of Pradip K. Khaitan, independent director of Dhunseri Ventures Ltd.

https://wp.me/pcenps-12PM

♦ SAT | SEBI exonerated preferential allottees, exit providers and LTP contributors from manipulation | SAT terms it ‘cryptic’

https://wp.me/pcenps-135j

♦ SAT | Franklin Templeton gets interim relief | Gives due consideration to the 2 decades’ reputation

https://wp.me/pcenps-138Y


Securities Exchange Board of India

♦ Infosys insider trading | While in possession of Unpublished Price Sensitive Information, 2 employees of Infosys & 6 other entities violated Insider Trading Regulations on Infosys Stock [Detailed Report]

“The liability of acting partners and non-acting partners (collectively known as firm) for the injury to the third party is an outcome of joint and several liability of such partners under IPA, irrespective of whether that the conduct (act of omission or commission of the firm) which gave rise to the loss/injury to the third party is also in violation of any provision under securities law.”

https://wp.me/scenps-infosys

♦ Decoded | SEBI bars Director of Franklin Templeton AMC,  wife from accessing securities markets for 1 yr: Can redemption of units by Director of a mutual fund AMC be titled as fair conduct?

Laws dealing with information asymmetries (PIT Regulations and PFUTP Regulations) essentially seek to address the issues arising out of disparities in access to material information, that is otherwise not legally available to general investors, and to prevent those persons having access to such superior information from exploiting the informational advantage, in order to protect the integrity of the market and maintain investor confidence.

https://wp.me/pcenps-12Vh

♦ SEBI | Not so “independent” Independent director and a concocted scheme with affinity and consanguinity |SEBI takes on each violation with mordant remarks

“…remuneration and qualification are two crucial criterions to evaluate and adjudge the significance of a position held by a person in an organisation and his importance and status in participating in the management of a company.”

https://wp.me/pcenps-133k

♦ SEBI | Kingfisher’s chopped wings and shrinked wingspan | United Breweries Acquisition | Heineken exempted from the obligation under Takeover Regulations with exceptions

https://wp.me/pcenps-135X

Case BriefsSupreme Court

Supreme Court: Taking note of the depleting strength of the members of the NCLT and NCLAT, the 3-judge bench of L. Nageswara Rao, Hemant Gupta and S. Ravindra Bhat, JJ has issued certain directions and has asked the Government to complete the reappointment process “at the earliest and not later than two months”.

The direction came in the petition filed by the National Company Law Tribunal and Appellate Tribunal Bar Association seeking direction to the Central Government

  • to fill up the vacancies of Chairman, NCLAT and President of NCLT without any further delay.
  • to issue letters of appointment to the candidates pursuant to the Selection procedure initiated in 2019 and to fill up the remaining vacancies of Members of NCLT and NCLAT.
  • to extend the term of six Members of the NCLT and NCLAT for a further period of five years as they are completing the tenure by June, 2021.

The Additional Solicitor General Balbir Singh had told the Court that the process for appointment of candidates who have been selected pursuant to the procedure which was initiated in 2019 shall be expedited and orders of appointment shall be issued soon. In respect of the process to be initiated for filling up the existing vacancies, a search cum Selection Committee has to be constituted. The Court, hence, directed that the Selection Process shall be initiated at the earliest.

On the issue of extension of the term of the Members of the NCLT and NCLAT who are completing their tenure in June, 2021 is concerned, Attorney General KK Venugopal submitted that the government has initiated the process for reappointment by requesting the Chief Justice of India to constitute a committee for the purposes of the reappointment of members to the NCLT and NCLAT.

As per Section 413 of the Company’s Act 2013, the President or other members of the Tribunal shall hold office for a period of 5 years and shall be entitled for reappointment for another term of 5 years.

The petitioner, however, requested that the members who are completing their tenure should be permitted to continue till the process of reappointment is completed.

“… there are 39 members at present for a sanctioned strength of 63 and the depletion of the strength of the members will adversely affect the smooth functioning of the Tribunals.”

The Court, hence, directed the Government to complete the process within two months and said,

“As the Government has already initiated the process of reappointment by writing to the Hon’ble Chief Justice, we trust and hope that the reappointment process should be completed expeditiously, as there is no necessity of issuance of any advertisement for participation of other eligible candidates. Reappointment of members can be considered separately without waiting for the process of fresh appointments to commence.”

[National Company Law Tribunal and Appellate Tribunal Bar Association v. Ministry of Corporate Affairs, 2021 SCC OnLine SC 406, order dated 31.05.2021]


For Petitioner(s) Mr. A.S. Chandhiok, Sr. Adv. Mr. Virender Ganda, Sr. Adv. Mr. Ajay Kumar Jain, Adv Mr. Rakesh Kumar, Adv Mr. Vipul Ganda, Adv Mr. Vishal Ganda, Adv Mr. Satyajit A. Desai, Adv. Mrs. Anagha S Desai, AOR Ms. Aastha Trivedi, Adv Ms. Guresha Bhamra, Adv Mr. Tejasvi Chaudhry, Adv Mr. Satya Kam Sharma, Adv.

For Respondent(s) Mr. KK Venugopal, Ld. AG Mr. Balbir Singh, Ld. ASG Mr. R. Balasubramanium, Sr. Adv. Mr. Zoheb Hossain, Adv Ms. Shradha Deshmukh, Adv. Ms. Chinmayee Chandra, Adv. Mr. Shyam Gopal, Adv. Mr. Ankur Talwar, Adv. Ms. Suhasini Sen, Adv. Mr. Gurmeet Singh Makker, AOR

NewsWeekly Rewind

We are back with the 5th Episode of SCC Online Weekly Rewind featuring Devika Sharma, Senior Editorial Assistant bringing you the most important and interesting stories from the field of law. Go check out the link below!


  

Supreme Court 

♦ President appoints Justice NV Ramana as the next Chief Justice of India  

After the final stamp of approval from the President, Justice Ramana is set to take oath as the 48th Chief Justice of India on April 24, 2021. Justice Ramana who is due to retire on August 26, 2022, will serve as the CJI for 16 months.   

https://www.scconline.com/blog/post/2021/04/06/president-appoints-justice-nv-ramana-as-the-next-chief-justice-of-india/   

 Rohingya Refugees not to be deported without following prescribed procedure  

 In a significant ruling relating to the rights of the Rohingya Refugees, the Supreme Court has directed that no refugee will be deported unless the procedure prescribed for such deportation is followed.   

The order came in the interim application filed in the Rohingya matter seeking  

(a) the release of the detained Rohingya refugees; and  

(b) a direction to the Union of India not to deport the Rohingya refugees who have been detained in the sub¬jail in Jammu.  

The Court, however, refused to grant the interim relief and said that,    

“Right not to be deported, is ancillary or concomitant to the right to reside or settle in any part of the territory of India.”  

https://www.scconline.com/blog/post/2021/04/08/rohingya-refugees-not-to-be-deported-unless-the-procedure-prescribed-for-such-deportation-is-followed-supreme-court/   

 No automatic vacation of stay under Section 254(2A) Proviso 3 of the Income Tax Act, 1961 if the assessee is not responsible for the delay  

 Dealing with an important question as to the constitutional validity of the third proviso to Section 254(2A) of the Income Tax Act, 1961, the Supreme Court has held that any order of stay shall stand vacated after the expiry of the period or periods mentioned in the Section only if the delay in disposing of the appeal is attributable to the assessee 

Upholding the 2015 Delhi High Court verdict, the Court said,    

Unequals have been treated equally so far as assessees who are responsible for delaying appellate proceedings and those who are not so responsible, resulting in a violation of Article 14 of the Constitution of India.”  

https://www.scconline.com/blog/post/2021/04/09/cant-treat-unequals-equally-no-automatic-vacation-of-stay-under-section-2542a-proviso-3-of-the-income-tax-act-1961-if-the-assessee-is-not-responsible-for-the-delay-supreme-court/   


High Courts 

Delhi High Court

♦ Vehicle even if occupied by only one person would constitute a ‘public place’ and wearing of mask therein would be compulsory 

Did you know that wearing face masks even while travelling alone in your car is compulsory? Well, Delhi High Court in a recent decision held that a vehicle even if occupied by only one person would constitute a ‘public place’ and wearing of a mask therein, would be compulsory. The decision came when petitioners challenged imposition of fine for non-wearing of masks while travelling alone in a private car. 

https://www.scconline.com/blog/post/2021/04/08/covid-19/ 

Madras High Court

♦ Political parties should restrain from making serious allegations or criticism against constitutional functionaries 

Madras High Court while addressing a criminal petition held that “Political parties should restrain from making serious allegations against constitutional functionaries. 

https://www.scconline.com/blog/post/2021/04/05/defamation-3/ 

  

♦ PCOS v. Impotency? Divorce on ground of no cohabitation. Is it a legitimate expectation of husband? HC explains while discussing concept of marriage and S. 12(1)(a), HMA 

While addressing a significant issue with respect to divorce being sought on ground of PCOS in wife, Madras High Court observed that PCOS cannot be termed as impotency and further remarked that  concept of marriage in the present generation has been taken very lightly and even for trivial issues, divorce is filed, and marriage is broken. https://www.scconline.com/blog/post/2021/04/05/divorce-3/ 

Bombay High Court

♦ Anil Deshmukh ‘prima facie’ committed cognizable offence, but No immediate FIR by CBI. Credibility of State machinery at stake: HC directs CBI to conclude preliminary investigation preferably within 15 days 

 In a significant development, Bombay High Court directed CBI to conduct a preliminary enquiry into the complaints against the Home Minister of the State of Maharashtra, Anil Deshmukh. The said order came after Former Commissioner of Mumbai Police Param Bir Singh moved the High Court seeking investigation into the allegation of illegal money collection ordered by the Home Minister. 

https://www.scconline.com/blog/post/2021/04/06/anil-deshmukh/ 


Tribunals 

Reliance ménage in trouble; Irregular shareholding, default in trading regulations 

SEBI imposed penalty of Rs 25 cores on Mukesh Ambani, Anil Ambani, Nita Ambani and Tina Ambani along with others for violation of the provisions of Regulation 11(1) of Takeover Regulations due to some irregularities. 

https://www.scconline.com/blog/post/2021/04/08/reliance/ 

  


Foreign Courts 

  SCOTUS decides in favour of Google in a copyright dispute between Google and Oracle. 

In a major decision in the copyright space, in a dispute between Google and Oracle; the Supreme Court of the United States, held that Google’s copying of Oracle’s Java SE API code, which included only those lines of code that were needed to allow programmers to put their accrued talents to work in a new and transformative program, was a fair use of that material as a matter of law. 

 https://bit.ly/3wKNOb1


Legislation Updates  

♦ Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021: https://bit.ly/3wKnH3P  and Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021: https://bit.ly/3uHfDiM

On April 04, 2021, the President promulgated the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 and Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021.  

♦ Central Motor Vehicles (Sixth Amendment) Rules, 2021 

Ministry of Road Transport and Highways has notified Central Motor Vehicles (Sixth Amendment) Rules, 2021, effective from April 1, 2021. The Rules amend the Central Motor Vehicles Rules, 1989:https://bit.ly/3dVfFMT

Key changes by the amendment  

  1. Minimum training required for driving E-rickshaw or E-cart  
  2. Conditions to be satisfied for learner’s license  
  3. Form of learner‘s licence  
  4. Permanently surrendering a class or classes of vehicles from the driving licence  
  5. Issuance of duplicate driving licence  

 ♦ Gujarat Assembly Passes Freedom of Religion Amendment Bill, 2021 

The Freedom of Religion Amendment Bill, 2021 has been passed by Gujarat Assembly which will modify Gujarat Freedom of Religion Act, 2003. The Bill provides that:  

Any marriage which is done for the purpose of unlawful conversion by the person of one religion with the person of another religion, either by converting himself/herself before or after marriage shall be declared void by the Family Court or where the Family Court is not established by the Court having jurisdiction to try such cases.   https://bit.ly/39WwVQX


 Fact Check 

Does Section 354D say that you can go to jail for staring at a woman for 14 seconds? 

Recently an instagram reel went viral which stated that a person could go to jail for staring at a woman for 14 seconds. The reel gave section 354D of the Indian Penal Code, 1860 as the source of this information. Our fact-check team found out that this is not true. Section 354D defines stalking but does not mention any 14 seconds anywhere in the definition. The origin of the ‘14 seconds rule’ can be traced back to Kerala Excise Officer Rishi Raj Singh’s statement in an event in Kochi back in 2016. If a woman feels that she is being harassed she can file a complaint with the police, however, there is no criteria of ‘staring for 14 seconds’ mentioned anywhere in the law books.  


SCC Online Weekly Rewind  

NewsWeekly Rewind

The 4th Episode of our SCC OnLine Weekly Rewind was released on 4-04-2021. If you haven’t yet checked out the latest updates of that week, featuring Bhumika Indulia, Associate Editor, just click on the link below.

Supreme Court

♦ Mukhtar Ansari’s custody transferred to Uttar Pradesh: https://bit.ly/2PnnbIv

♦ Supreme Court refused to interfere with the scheme of sale of electoral bonds by the Political Parties which was challenged on the ground that it allows the donors of political parties to maintain anonymity which is not healthy for a democracy: https://bit.ly/3mhJQ4S

♦ Rapid Rail Case: HSVP to deposit 80% of debt due in Escrow Account: https://bit.ly/3wIparl


High Courts

♦ Madras HC | Quality of education being compromised in course of more law colleges being born in guise of creating opportunities : https://bit.ly/3sRahAI

♦ Madras HC | “Trying to develop the case brick by brick and construct something purposeful”: HC while arranging counselling for same-sex couple and parents: https://bit.ly/31Wpwgd

♦ Ker HC | ‘Ensure ‘no double voting by any voter’; HC directs Election Commission of India to be on war footing to ensure fair and democratic election: https://bit.ly/3rOcH1E

Tribunal

♦ CCI | No ‘opt-out’ option for WhatsApp users in the 2021 Update. Why? Data Sharing with Facebook, Unilateral terms and more. Read CCI’s take on WhatsApp’s conduct in the garb of the policy update: https://bit.ly/39DeG2N


Legislation Updates

♦ Extension of Last Date for Linking Aadhaar number with PAN from March 31, 2021 to June 30, 2021 : https://bit.ly/31GsfKf

♦ Finance Act, 2021 : https://bit.ly/3sSjcC4

Copyright (Amendment) Rules, 2021: https://bit.ly/2Px5oOP

♦ Insurance (Amendment) Act, 2021: https://bit.ly/2R4tiSo


Did you check out the 3rd Episode yet? If not, here’s the link:

SCC Online Weekly Rewind Volume 1 Episode 3

 

Case BriefsHigh Courts

Delhi High Court: Prathiba M. Singh, J., addressed a concern wherein it was stated that the NCLAT and NCLT ought to have an open link where parties who are interested can join the proceedings.

The instant petition was filed to seek the provision of open or virtual links for attending hearings in the National Company Law Tribunal and National Company Law Appellate Tribunal.

High Court’s opinion on perusal of the affidavits filed on behalf of the NCLT and NCLAT was that the forums like NCLT and NCLAT, which have a high quantum of work, ought to be permitted to regulate their own procedure so long as the same is not arbitrary.

In virtual hearings, there is a possibility of enormous disturbance if there is no regulated entry.

NCLAT and NCLT submitted that whenever links are required, there are separate ‘active’ and ‘viewing’ links shared with the parties. They also added their concern that lawyers mention matters which may not have been listed on the particular date causing enormous disruption in the hearings if open links would be provided.

Hence in view of the facts and circumstances, Bench directed NCLT and NCLAT to regulate their own procedure for virtual hearing platforms so long as it is ensured that if any particular party requests for a link, the same would be considered in a fair, transparent and non-arbitrary manner.

To the extent possible, parties would be permitted to view the proceedings.

 While concluding, High Court held that since virtual hearings are a measure adopted to ensure that Tribunals and Courts are functioning during the COVID-19 pandemic, the Petitioner, if he wishes to join any particular hearing, may write an e-mail at least 24 hours in advance to the Deputy Registrar of the NCLT and NCLAT. The same shall be considered in accordance with the NCLT and NCLAT’s own procedure, in a fair, transparent and non-arbitrary manner. [Deepak Khosla v. NCLAT, 2021 SCC OnLine Del 1214, decided on 08-03-2021]


Advocates who appeared before the Court:

For the Petitioner: Deepak Khosla, Advocate

For the Respondents: Chetan Sharma, ASG with Dev P. Bhardwaj, CGSC, Amit Gupta, Vinay Yadav, Sahaj Garg, Akshay Gadeock &  R.V. Prabhat, Advocates for UOI.

Case BriefsSupreme Court

Supreme Court: In a petition filed for seeking directions that till a new chairperson of the Intellectual Property Appellate Board (“IPAB”), is appointed, the incumbent should continue to function as Chairperson, the 3-Judge Bench of L. Nageswara Rao, Hemant Gupta and S. Ravindra Bhat*, JJ opined that,

“The amendments brought about through S. 184 of the Finance Act, 2017, in terms of the maximum age up to which any Member or Chairperson can hold office in a Tribunal could not apply in the case of the Board because the Rules of 2017 had fixed the tenure limits of chairpersons and members of tribunals, including that of the chairperson of the board.”

Factual Matrix

In the instant case, the applicant had sought extension of the term of the incumbent Chairperson of IPAB stating that S. 184 of the Finance Act, 2017, had prescribed the term of office and the conditions of service of Chairperson and members of various tribunals including that of the Board. S. 161 of the Finance Act inserted Section 89A to the Trade Mark Act which stipulated that the term of office of appointments to the board after the date of commencement of the Finance Act would be governed by the provisions of the Section 184 of the said Finance Act. The outer age limit of the chairperson of the board was 70 years, in terms of S. 184.

The applicant contended that though Section 86 of Trade Mark Act had prescribed the outer age limit as 65 years, that was over borne by the provisions of section 89A of the Act, which had stated that the terms and conditions hitherto applicable would no longer be so and that in matters of conditions of service and tenure of appointment, the provisions of section 184 of the Finance Act would apply.

It was argued by the applicant that taking into consideration the workload of the board, it was absolutely essential that it was headed by a properly qualified chairperson. The applicant particularly relied on Section 84(2) of the Trade Mark Act and urged that there could be no bench without a judicial member.

Analysis and Decision

Reliance was placed on Rojer Mathew v. South Indian Bank Ltd., (2020) 6 SCC 1 , by the Court wherein after pronouncing that the 2017 Rules were unsustainable, and quashing them, with a direction to the Central Government to frame new Rules, the Constitution Bench  also directed as follows:

Interim relief

  1. As the Tribunal, Appellate Tribunal and Other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2017 have been struck down and several directions have been issued vide the majority judgment for framing of fresh set of rules, we, as an interim order, direct 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.”

The Bench further noticed that on 20-03-018 the Supreme Court had clarified a previous order dated 09-02-2018 in Kudrat Sandhu v. Union of India 2021 SCC OnLine SC 89 as follows:

“(iii) The tenure of the Chairperson and the Judicial/Administrative/Expert/Technical Members of all the Tribunals shall be for a period of five years or the maximum age that was fixed/determined under the old Acts and Rules;”

Another contention raised by the applicant was that no member can function as a Chairperson, as none of the existing members were judicial members, but were technical members. The Bench observed, S. 84 (2) of the Trade Mark Act no doubt had stated that a bench of the board should consist of a judicial and a technical member. However, it was “subject to other provisions” of the Trade Mark Act.

Section 87 enables a vice-chairperson, or as the case may be the senior-most member of the board to act as chairperson in the event of a vacancy to that position, significantly, Section 85 inter alia stipulates the qualifications for the post of chairperson or vice-chairperson.”

The relevant provisions of S. 85 of Trade Mark Act revealed that there was no bar for a technical member to be appointed as a regular chairperson, provided she or he had for “at least two years, held the office of a Vice-Chairperson”. In fact, the incumbent five technical members all hold legal qualifications (three of them holding masters in law, including one who had post-doctoral qualification). Four of these incumbent members were practising advocates in specialized fields of intellectual property (trademarks, and copyright) and one technical member (patents) had experience in the Patent Office.

“These members had practical legal experience of ten to fifteen years. The fact that they were appointed as technical members cannot obfuscate the fact that they are legally trained and qualified.”

Therefore, the contention that the technical members, in their position at the board as of now, could not function without a chairperson, was held unsustainable. Also the argument that the incumbent chairperson continued to remain in office in view of the declaration of law by Rojer Mathew was declared insubstantial and uncountenanced.

[The International Association for Protection of Intellectual Property v. Union of India, 2021 SCC OnLine SC 89, decided on 12-02-2021]


Kamini Sharma, Editorial Assistant has put this report together 

*Judgment by: Justice S. Ravindra Bhat

Know Thy Judge| Justice S. Ravindra Bhat

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


TOP STORIES


Maintenance of wife|Husband doesn’t have to pay maintenance in each of the proceedings under different Maintenance laws [Explainer on Supreme Court guidelines]

Supreme Court has framed guidelines on overlapping jurisdiction under different enactments for payment of maintenance, payment of Interim Maintenance, the criteria for determining the quantum of maintenance, the date from which maintenance is to be awarded, and enforcement of orders of maintenance.

Also read: Guidelines

Anvay Naik Suicide|High Court abdicated it’s duty by failing to make prima facie evaluation of FIR. Here’s why SC granted interim bail to the accused

If the High Court were to carry out a prima facie evaluation, it would have been impossible for it not to notice the disconnect between the FIR and the provisions of Section 306 of the IPC.

Also read: SC grants interim bail to 3 accused in Anvay Naik suicide case. Calls Bombay HC order erroneous

Appointments and functioning of Tribunals| Tribunal Rules 2020 valid but need modifications, National Tribunals Commission to be constituted; directs SC [Read Directions]

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.

Also read: ‘It’s high time we put an end to the disturbing trend of Govt ignoring our directions.’ Read why Supreme Court directed constitution of National Tribunals Commission

All is not lost for Shiksha Mitras as SC dismisses their plea challenging 2019 Assistant Teachers’ recruitment process but asks UP Govt to give them a third chance

Uttar Pradesh Government can now fill up 69, 000 posts in terms of the result declared on 12.05.2020.

COVID-19| Seeking waiver of interest for loan during the moratorium period? SC asks Govt to implement decision to forego interest on 8 categories

All steps to implement the decision dated 23.10.2020 of the Government of India, Ministry of Finance be taken so that benefit to the eight categories contemplated in the affidavit can be extended.

COVID-19| ‘You can’t stop at issuing advisory’; SC directs Centre to ban the use of disinfection tunnels

In event, use of disinfectant on human body is to cause adverse effect on the health of the people, there has to be immediate remedial action.

Govt sits over land for 33 years without authority. SC directs handing over of land to owners within 3 months; says such lawlessness cannot be condoned

The courts’ role is to act as the guarantor and jealous protector of the people’s liberties: be they assured through the freedoms, and the right to equality and religion or cultural rights under Part III, or the right against deprivation, in any form, through any process other than law.

Nothing wrong with TRAI seeking information to ensure transparency; SC directs Airtel, Vodafone Idea to disclose segmented offers details to TRAI

SC has asked TRAI to ensure that such information is kept confidential and is not made available to the competitors or to any other person.

Are you a homebuyer planning to take builder to Court? SC says you can choose between seeking remedy under the RERA Act or the Consumer Protection Act

The RERA Act does not bar the initiation of proceedings by allottees against the builders under the Consumer Protection Act, 1986.


MORE STORIES


‘Law should not become a ruse for targeted harassment’; SC reminds Courts of their duty to ensure human liberty

Liberty survives by the vigilance of her citizens, on the cacophony of the media and in the dusty corridors of courts alive to the rule of (and not by) law. Yet, much too often, liberty is a casualty when one of these components is found wanting.

Candidate suppresses his over-qualification during recruitment process. Can he later contend that over-qualification can’t be a disqualification? Here’s what SC says

Employers prescribe qualifications to any post, not Courts.

PCS (Judicial) Exam| As 47 seats remain vacant, SC asks Justice AK Sikri & Justice SS Saron to re-check some papers in 2 subjects to gather what went wrong

“We propose to pass an order to satisfy our judicial conscious in the given scenario where only 28 people have been recruited in pursuance to an examination process where 75 vacancies existed.”

Thinking of seeking transfer of petition for restitution of conjugal rights under Section 21-A(2)(b) of the Hindu Marriage Act, 1955? SC says you can’t

Sub-section (2) of Section 21-A has no independent existence de hors Sub-section (1).

Signature obtained by fraud? Burden of proof is on the party alleging such forgery; says SC

For invoking Section 17 of the Limitation Act, 1963, two ingredients i.e. existence of a fraud and discovery of such fraud, have to be pleaded and duly proved.

No mention of intention to blacklist in the show cause notice? SC says such show cause notice and consequent blacklisting order liable to be quashed

Blacklisting can effectively lead to the civil death of a person.

Mere lack of State Government’s prior consent does not vitiate CBI investigation in absence of prejudice caused to accused; says SC

State of Uttar Pradesh has accorded a general consent for investigation of cases by CBI in the whole of UP.

Two men walk free after 12 years in prison as SC holds that conviction cannot be based solely on refusal to undergo a Test Identification Parade

The finding of guilt cannot be based purely on the refusal of the accused to undergo an identification parade.

Despite many witnesses turning hostile, SC finds man guilty of killing his wife in 1999; Says it’s not an unusual event in long drawn out trials in India

A large number of witnesses turning hostile is not an unusual event in the long drawn out trials in our country and in the absence of any witness protection regime of substance, one has to examine whatever is the evidence which is capable of being considered, and then come to a finding whether it would suffice to convict the accused.

Nominated person faces trial for 30 years in Dalda Ghee adulteration case while HUL never gets convicted. SC says either both get convicted or none

In the absence of the Company, the Nominated Person cannot be convicted or vice versa.

Timing of crime saves man from facing gallows or prison for the rest of his life for raping and killing 2.5 year old niece. SC commutes sentence under Section 376A IPC

In a chilling crime, a 21-year-old man was had raped and killed his 2.5 years-old niece just a week after the amended Section 376A was brought into force in the year 2013.

Not just the petitioning creditor but ‘any’ creditor can initiate transfer of winding up proceedings from a Company Court to NCLT; holds SC

Proceedings for winding up of a company are proceedings in rem to which the entire body of creditors is a party, hence, by a deeming fiction the petition by even a single creditor is treated as a joint petition.

High Court not obliged to frame substantial question of law if no error is found in First Appellate Court’s findings; says SC

The formulation of substantial question of law or reformulation of the same in terms of the proviso arises only if there are some questions of law and not in the absence of any substantial question of law.

Can NSE realise withheld securities prior to expulsion or declaration of defaulter? SC discusses in detail

Vesting does not take place in favour of the Exchange unless a formal expulsion order is passed. The relevant point of time, therefore, is the date of expulsion. Without such legal vesting, the Exchange only sits upon the withheld assets as a custodian.

Is obstruction & abuse by upper caste person due to property dispute an offence under SC/ST Act? Not in all cases, says SC

The property disputes between a vulnerable section of the society and a person of upper caste will not disclose any offence under the Act unless, the allegations are on account of the victim being a Scheduled Caste.

SC dismisses Tej Bahadur’s plea against rejection of his Nomination Papers to contest against PM Modi from Varanasi in 2019 Lok Sabha Polls

Ex-BSF Jawan Tej Bahadur’s nominations were rejected by the returning officer for want of a certificate to the effect that he has not been dismissed for corruption or disloyalty to the State.

2015 Guru Granth Sahib sacrilege| ‘No threat to the lives of accused or to fair trial’; SC refuses to transfer the trial outside Punjab

The transfer of trial from one state to another would inevitably reflect on the credibility of the State’s judiciary. Except for compelling factors and clear situation of deprivation of fair justice, the transfer power should not be invoked.

Remedy under Section 14 of SARFAESI Act does not become redundant if DM is unable to take possession of secured assets within time limit

The time limit is to instill a confidence in creditors that the District Magistrate will make an attempt to deliver possession as well as to impose a duty on the District Magistrate to make an earnest effort to comply with the mandate of the statute.

No relief to Skoda Volkswagen as SC refuses to quash FIR over alleged use of cheat devices

The law is well settled that Courts would not thwart any investigation.

Madras HC refuses to decide vires of Section 40(a)(iib) of the Income Tax Act pending assessment proceedings. SC disapproves the approach

Vires of a relevant provision goes to the root of the matter.

Railway Protection Force officer fails to detect & prevent thefts. SC answers if his compulsory retirement is justified or not

A police officer in the Railway Protection Force is required to maintain a high standard of integrity in the discharge of his official functions.

No reservation for in-service doctors in Super Specialty Medical Courses for the academic year 2020-2021; holds SC

The counselling for admission to Super Specialty Medical Courses for the academic year 2020- 2021 shall proceed on a date to be fixed by the competent authority without providing for reservations to in-service doctors for the academic year 2020-2021.

Direct Recruits to Rajasthan’s Tax Assistant posts cry foul after Departmental Promotees appear senior. SC finds seniority justified

Keeping in mind that the advertisements for filling the entire cadre, in both the quotas or streams of recruitment were issued one after the other, and more importantly, that this was the first selection and recruitment to a newly created cadre, the delay which occurred on account of administrative exigencies and also the completion of procedure, such as verification of antecedents, the seniority of the promotees given on the basis of their dates of appointment was justified.

Connection with agricultural land a must for homestead land & waterbodies to come within the purview of the WB Restoration of Alienated Land Act, 1973

Homestead land when included within the meaning of the term “land” in 1973 Act means homestead of an agriculturist and not any and every structure on non-agricultural land.


IN OTHER NEWS


Sharing links or screen of Video Conference hearings without authorisation? Be ready to face “adverse consequences”. SC cautions AORs, Parties-in-person

Mysterious discrepancy in case details and judgement files on Supreme Court’s website creates confusion

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