# ROJER MATHEW v. SOUTH INDIAN BANK LTD. & ORS

- **Citation:** [2019] 16 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2019-11-13
- **Case number:** Civil Appeal No. 8588 of 2019
- **Bench:** Ranjan Gogoi, N. V. Ramana, Dr D. Y. Chandrachud, Deepak Gupta, Sanjiv Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rojer-mathew-v-south-indian-bank-ltd-ors-33908
- **Pages:** 251

## Headnote

Tribunals - Finance Act, 2017 - Finance Act, 2017, a
'money bill' or not u/Art.110 - Validity of the Act, 2017 - Held:
The majority in K.S. Puttaswamy (Aadhaar-5) pronounced the
nature of the impugned enactment without first delineating the
scope of Art.110(1) and principles for interpretation or the
repercussions of such process - The majority dictum in K.S.
Puttaswamy (Aadhaar-5) did not substantially discuss the effect of
the word 'only' in Art.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 Art. 110 (1)
(a) (b) - Without expressing a firm and final opinion, the analysis
in K.S. Puttaswamy (Aadhaar-5) made its application difficult to
the present case and raises a potential conflict between the
judgments of Coordinate Benches - Being a Bench of equal
strength as that in K.S. Puttaswamy (Aadhaar-5), the batch of
matters directed to be referred to the Larger Bench.
Tribunals - Finance Act, 2017 - S. 184 - Constitutionality
of s. 184 on account of excessive delegations - Held s.184 does
not suffer from excessive delegations of legislative functions as
there are adequate principles to guide framing of delegated
legislation, which would include the binding dictums of the
Supreme Court - The objects of the parent enactments as well as
the law laid down by the Supreme Court in R.K. Jain, L. Chandra
Kumar, R. Gandhi, Madras Bar Association and Gujarat Urja
Vikas undoubtedly bind the delegate and mandatorily requires the
delegate u/s. 184 to act strictly in conformity with these decisions
and the objects of delegated legislation stipulated in the statutes.
 [2019] 16 S.C.R. 1
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Tribunals - The Tribunal, Appellate Tribunal and other
Authorities (Qualifications, Experience and other Conditions of
Service of Members) Rules, 2017 - Conformity of the Rules with
the judicial principles inherent in the Constitutional scheme as
established by the Supreme Court - Held: The composition of the
search-cum-Selection Committees under the Rules amounts to
excessive interference of the Executive in appointment of members
and presiding offices of statutory Tribunals and it is detrimental
to the independence of Judiciary - In addition to this, 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 - Therefore, the Rules have an effect of dilution of the
judicial character in adjudicatory positions - Further, earlier
removal of members or presiding officer was done after an enquiry
by the 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
Members and Presiding Officers of Tribunals cannot be removed
without either the concurrence of the Judiciary or in the manner
specified in the Constitution for Constitutional Court Judges - Also,
there must be uniform age of superannuation for all members in
all the Tribunals, the Rules demonstrate disparity in age of
superannuation of Members and Chairpersons/Presiding Officers
of different Tribunals - Furthermore, there is inconsistency within
the Rules with regard to the tenure prescribed for the Members of
Tribunals insofar as a fixed tenure of three years for both direct
appointments from the Bar and appointment of retired judicial
officers or judges of High Court or Supreme Court - It is also
discriminatory to the extent that it attempts to create equality
between unequal classes - Therefore, the Rules suffer from various
infirmities and are contrary to the Parent enactment and the
principles envisaged in the Constitution, resultantly, directed to be
struck down in entirety.
Tribunals - Finance

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ROJER MATHEW
v.
SOUTH INDIAN BANK LTD. & ORS.
(Civil Appeal No. 8588 of 2019)
NOVEMBER 13, 2019
[RANJAN GOGOI, CJI, N. V. RAMANA,
DR D. Y. CHANDRACHUD, DEEPAK GUPTA
AND SANJIV KHANNA, JJ.]
Tribunals - Finance Act, 2017 - Finance Act, 2017, a
'money bill' or not u/Art.110 - Validity of the Act, 2017 - Held:
The majority in K.S. Puttaswamy (Aadhaar-5) pronounced the
nature of the impugned enactment without first delineating the
scope of Art.110(1) and principles for interpretation or the
repercussions of such process - The majority dictum in K.S.
Puttaswamy (Aadhaar-5) did not substantially discuss the effect of
the word 'only' in Art.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 Art. 110 (1)
(a) (b) - Without expressing a firm and final opinion, the analysis
in K.S. Puttaswamy (Aadhaar-5) made its application difficult to
the present case and raises a potential conflict between the
judgments of Coordinate Benches - Being a Bench of equal
strength as that in K.S. Puttaswamy (Aadhaar-5), the batch of
matters directed to be referred to the Larger Bench.
Tribunals - Finance Act, 2017 - S. 184 - Constitutionality
of s. 184 on account of excessive delegations - Held s.184 does
not suffer from excessive delegations of legislative functions as
there are adequate principles to guide framing of delegated
legislation, which would include the binding dictums of the
Supreme Court - The objects of the parent enactments as well as
the law laid down by the Supreme Court in R.K. Jain, L. Chandra
Kumar, R. Gandhi, Madras Bar Association and Gujarat Urja
Vikas undoubtedly bind the delegate and mandatorily requires the
delegate u/s. 184 to act strictly in conformity with these decisions
and the objects of delegated legislation stipulated in the statutes.
 [2019] 16 S.C.R. 1
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Tribunals - The Tribunal, Appellate Tribunal and other
Authorities (Qualifications, Experience and other Conditions of
Service of Members) Rules, 2017 - Conformity of the Rules with
the judicial principles inherent in the Constitutional scheme as
established by the Supreme Court - Held: The composition of the
search-cum-Selection Committees under the Rules amounts to
excessive interference of the Executive in appointment of members
and presiding offices of statutory Tribunals and it is detrimental
to the independence of Judiciary - In addition to this, 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 - Therefore, the Rules have an effect of dilution of the
judicial character in adjudicatory positions - Further, earlier
removal of members or presiding officer was done after an enquiry
by the 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
Members and Presiding Officers of Tribunals cannot be removed
without either the concurrence of the Judiciary or in the manner
specified in the Constitution for Constitutional Court Judges - Also,
there must be uniform age of superannuation for all members in
all the Tribunals, the Rules demonstrate disparity in age of
superannuation of Members and Chairpersons/Presiding Officers
of different Tribunals - Furthermore, there is inconsistency within
the Rules with regard to the tenure prescribed for the Members of
Tribunals insofar as a fixed tenure of three years for both direct
appointments from the Bar and appointment of retired judicial
officers or judges of High Court or Supreme Court - It is also
discriminatory to the extent that it attempts to create equality
between unequal classes - Therefore, the Rules suffer from various
infirmities and are contrary to the Parent enactment and the
principles envisaged in the Constitution, resultantly, directed to be
struck down in entirety.
Tribunals - Finance Act, 2017 - Whether there should be a
single Nodal Agency for administration of all Tribunals - Held: It
may not be very crucial as to which Ministry or Department
performs the duties of Nodal Agency for a Tribunal, but what is
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of utmost importance is that the Tribunal should not be expected
to look towards such Nodal Agency for its day to day requirements
- There must be a direction to allocate adequate and sufficient
funds for each Tribunal to make it self-sufficient and selfsustainable authority for all intents and purposes.
Tribunals - A Judicial Impact Assessment of all tribunals in
India - Need for - Held: It was directed in Salem Advocate Bar
Association (II) v. Union of India for a Committee to be constituted
to assess the need for Judicial Impact Assessment - Pursuant
thereto, Jagannadha Rao Committee Report was submitted, it
suggested that legislature must analyse the budgetary requirement
of the staff, additional expenditure arising out of the new cases
consequent to the enactment, the number of Civil and Criminal
Cases expected to arise from the new enactment, the requirement
of Judges etc. - The legislature has not conformed to the opinion
of the Supreme Court with respect to 'Judicial Impact Assessment'
and thus, has not made any attempt to assess the ramifications of
the Finance Act, 2017 - Therefore, the Union of India directed to
carry out Financial Impact Assessment in respect of all the
Tribunals referable to ss. 158 to 182 of the Finance Act, 2017 and
undertake an exercise to assess the need based requirements and
make available sufficient resources for each Tribunal established
by the Parliament.
Tribunals - Judges of Tribunals set up by Acts of Parliament
under Arts. 323-A and 323-B of the Constitution equated in 'Rank'
and 'Status' with constitutional functionaries - Held: There can be
no doubt that executive action cannot confer status equivalent to
that either Supreme Court or High Court Judges on any member
or head of any Tribunal or other judicial fora - Tribunals are not
substitutes of Superior Courts and are only supplemental to them
- Hence, the status of members of such Tribunals cannot be
equated with that of the sitting Judges of Constitutional Courts.
Tribunals - Direct Statutory appeals from Tribunals to the
Supreme Court - Consideration of - Held: Such statutory appeals
take away the inherent ability of the Supreme Court, as envisaged
in the Constitution, to regulate cases before it by confining its
consideration to cases involving the most egregious of wrongs and/
or having the greatest impact on public interest - It is evident that
Supreme Court has lost its original character owing to the routine
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hearing of appeals through invocation of the discretionary
jurisdiction u/Art. 136 - For the discharge of constitutional
functions of deliberating on substantial questions of law, answering
constitutional questions and resolving other issues of great Public
importance, it is essential that Supreme Court has adequate time
to apply its mind and consider matters in depth the practice of
bringing every second case before the Supreme Court u/Art. 136
must be deprecated - Therefore, the Union of India in consultation
with either the Law Commission or any other expert body revisit
such provisions under various enactments providing for direct
appeals to the Supreme Court against orders of Tribunals, and
instead provide appeals to Division Benches of the High Courts,
if at all necessary.
Tribunals - Amalgamation of Existing Tribunals and setting
up of Benches - Need for - Held: The 'importance' in distribution
of case-load and inconsistencies in nature, location and
functioning of Tribunals require urgent attention - It is essential
that after conducting a Judicial Impact Assessment, Tribunals be
amalgamed with others dealing with similar areas of law, to ensure
effective utilisation of resources and to facilitate access to justice
- Therefore, the Union Government directed to carry out an
appropriate exercise for amalgamation of existing Tribunals
adopting the test of homogeneity of the subject matters to be dealt
with and thereafter constitute adequate number of Benches
Commensurate with the existing and anticipated volume of work.
Tribunals - Tribunalisation - A global trend - Discussed.
Disposing of the Petition, the Court
HELD : PER RANJAN GOGOI, CJI (FOR HIMSELF
AND N.V. RAMANA, DR. D.Y. CHANDRACHUD, DEEPAK
GUPTA AND SANJIV KHANNA, JJ.)
1. ISSUE I : WHETHER THE 'FINANCE ACT, 2017'
INSOFAR AS IT AMENDS CERTAIN OTHER ENACTMENTS
AND ALTERS CONDITIONS OF SERVICE OF PERSONS
MANNING DIFFERENT TRIBUNALS CAN BE TERMED AS
A
'MONEY
BILL'
UNDER
ARTICLE
110
AND
CONSEQUENTLY IS VALIDLY ENACTED?
1.1 Provisions of Part XIV can be broken down into three
broad categories. First, abolition and merger of existing
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Tribunals; second, uniformizing and delegating to the Central
Government through the Rules the power to lay down
qualifications; method of appointment and removal, and terms
and conditions of service of Presiding Officers and members;
and third, termination of services and payment of compensation
to presiding officers and members of certain tribunals that have
now become de-funct. [Para 112] [85-A-B]
1.2 Upon an extensive examination of the matter, this Court
notices that the majority in K.S. Puttaswamy (Aadhaar-5)
pronounced the nature of the impugned enactment without first
delineating the scope of Article 110(1) and principles for
interpretation or the repercussions of such process. It is clear
to this Court 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). Its interpretation of the provisions of the
Aadhaar Act was arguably liberal and the Court's satisfaction of
the said provisions being incidental to Article 110(1)(a) to (f), it
has been argued is not convincingly reasoned, as might not be
in accord with the bicameral Parliamentary system envisaged
under our constitutional scheme. Without expressing a firm and
final opinion, it has to be observed that the analysis in K.S.
Puttaswamy (Aadhaar-5) makes its application difficult to the
present case and raises a potential conflict between the
judgements of coordinate Benches. [Para 122] [90-A-D]
1.3 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), this Court 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.
[Para 123] [90-E]
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1.4 There is yet another reason why this Court feel the
matter should be referred to a Constitution Bench of seven
judges. L. Chandra Kumar, which was decided by a Bench of
seven Judges, had also interpreted on the ambit of supervision
by the High Courts under Article 227(1) of the Constitution to
observe that the Constitutional scheme does not require all
adjudicatory bodies which fall within the territorial jurisdiction
of the High Courts should be subject to their supervisory
jurisdiction, as the idea is to divest the High Courts of their
onerous burden. Consequently, adding to their supervisory
functions vide Article 227(1) cannot be of assistance in any
manner. Thereafter, it was observed that different tribunals
constituted under different enactments are administered by the
Central and the State Governments, yet there was no uniformity
in administration. This Court was of the view that until a wholly
independent agency for such tribunals can be set up, it is
desirable that all such tribunals should be, as far as possible,
under a single nodal Ministry which will be in a position to
oversee the working of these tribunals. For a number of reasons,
the Court observed that the Ministry of Law would be the
appropriate ministry. The Ministry of Law in turn was required
to appoint an independent supervisory body to oversee the
working of the Tribunals. As noticed above, this has not
happened. In these circumstances, it would be appropriate if
these aspects and questions are looked into by a Bench of seven
Judges. [Para 124] [90-F-H; 91-A-B]
2. ISSUE II: WHETHER SECTION 184 OF THE
FINANCE ACT, 2017 IS UNCONSTITUTIONAL ON
ACCOUNT OF EXCESSIVE DELEGATION?
2.1. It will be difficult to hold that Part XIV of the Finance
Act suffers from the vice of unguided delegation as it fails to
clearly specify the eligibility qualifications for the Members,
Chairpersons, Chairman etc. of different Tribunals as such
requirements, though important, are not per se functionally
undelegatable. [Para 142] [103-F-H]
2.2 The objects of the parent enactments as well as the
law laid down by this Court in R.K. Jain, L Chandra Kumar, R.
Gandhi, Madras Bar Association and Gujarat Urja Vikas
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undoubtedly bind the delegate and mandatorily requires the
delegate under Section 184 to act strictly in conformity with these
decisions and the objects of delegated legislation stipulated in
the statutes. It must also be emphasised that the Finance Act,
2017 nowhere indicates that the legislature had intended to
differ from, let alone make amendments, to remove the edifice
and foundation of such decisions by enacting the Finance Act.
Indeed, the Attorney General was clear in suggesting that Part
XIV was inserted with a view to incorporate the changes
recommended by this Court in earlier decisions. [Para 143] [104A-C]
2.3. On examining the Constitutional scheme, the statutes
which had created tribunals and the precedents of this Court
laying down attributes of independence of tribunals in different
facets, this Court does 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.
Policy and guidelines exist. Subject to aforesaid, the submission
of Attorney General that Section 184 was inserted to bring
uniformity and with a view to harmonise the diverse and wideranging qualifications and methods of appointment across
different tribunals carries weight and, needs to be accepted.
[Para 148] [107-C-D]
2.4 Cautioning against the potential misuse of Section 184
by the executive, it was vehemently argued by the petitioner(s)
that any desecration by the Executive of such powers threatens
and poses a risk to the independence of the tribunals. A mere
possibility or eventuality of abuse of delegated powers in the
absence of any evidence supporting such claim, cannot be a
ground for striking down the provisions of the Finance Act, 2017.
It is always open to a Constitutional court on challenge made to
the delegated legislation framed by the Executive to examine
whether it conforms to the parent legislation and other laws, and
apply the "policy and guideline" test and if found contrary, can
be struck down without affecting the constitutionality of the rule
making power conferred under Section 186 of the Finance Act,
2017. [Para 149] [107-E-G]
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3. ISSUE III: IF SECTION 184 IS VALID, WHETHER
TRIBUNAL, APPELLATE TRIBUNAL AND OTHER
AUTHORITIES (QUALIFICATIONS, EXPERIENCE
AND OTHER CONDITIONS OF SERVICE OF
MEMBERS) RULES, 2017 ARE IN CONSONANCE
WITH THE PRINCIPAL ACT AND VARIOUS
DECISIONS OF THIS COURT ON FUNCTIONING OF
TRIBUNALS?
3.1 (A) Composition of Search-cum-Selection Committees
3.1 (1) The composition of the Search-cum-Selection
Committees under the Rules amounts to excessive interference
of the Executive in appointment of members and presiding
officers of statutory Tribunals and would undoubtedly be
detrimental to the independence of judiciary besides being an
affront to the doctrine of separation of powers. [Para 154] [118C]
3.1 (2) This Court is in complete agreement with the
analogy elucidated by the Constitution Bench in the Fourth
Judges Case for compulsory need for exclusion of control of the
Executive over quasi-judicial bodies of Tribunals discharging
responsibilities akin to Courts. The Search-cum-Selection
Committees as envisaged in the Rules are against the
constitutional scheme inasmuch as they dilute the involvement
of judiciary in the process of appointment of members of
tribunals which is in effect an encroachment by the executive
on the judiciary. [Para 158] [121-D-F]
3.2 (B) Qualifications of members and presiding officers
3.2 (1) 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. [Para 160] [122-E]
3.2 (2) The contentions of the petitioner(s) are, therefore,
duly accepted by this Court insofar as it is contended that the
Rules have an effect of dilution of the judicial character in
adjudicatory positions. It has been repeatedly ruled by this Court
in a catena of decisions that judicial functions cannot be
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performed by technical members devoid of any adjudicatory
experience. [Para 161] [121-B]
3.2 (3) This Court concurs with the consistent view taken
by this Court in a number of cases. It is also a well-established
principle followed throughout in various other jurisdictions as
well, that wherever Parliament decides to divest the traditional
Courts of their jurisdiction and transfer the lis to some other
analogous Court/Tribunal, the qualification and acumen of the
members in such Tribunal must be commensurate with that of
the Court from which the adjudicatory function is transferred.
Adjudication of disputes which was originally vested in Judges
of Courts, if done by technical or non-judicial member, is clearly
a dilution and encroachment on judicial domain. With great
respect, Parliament cannot divest judicial functions upon
technical members, devoid of the either adjudicatory experience
or legal knowledge. [Para 163] [127-D-F]
3.2 (4) It is necessary to notice few other changes brought
about by the new Rules. Firstly, most Tribunals were earlier
headed by judicial members. With the exception of some
Tribunals like the Debt Recovery Tribunal, presiding officers
were retired judges either of the Supreme Court or of High
Courts. Under the present formulation of Rules, the Central
Government has widened eligibility by making persons who
otherwise have no judicial or legal experience but if they are
otherwise of "ability, integrity and standing, and having special
knowledge of, and professional experience of" certain specialised
subjects "which in the opinion of the Central Government is
useful" eligible for being appointed as presiding officers. Further,
others who are "qualified to be" Supreme Court and High Court
judges can also head Tribunals. A perusal of Articles 124(3) and
217(2) of the Constitution shows that it specifies only the very
minimum prerequisites for appointment as a judge of the
Constitutional Courts. Instead, a predominant portion of the
consideration for appointment to this Court or to the High
Courts is uncodified and is based on a holistic consideration of
the practice, legal acumen, expertise and character of Advocates.
The effect of the new criteria would be to make every second
advocate eligible, in effect, vastly diluting the qualifications for
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appointment. The characteristics necessary of such people are
also vague which resultantly increases executive discretion. It
thus affects both judicial independence as well as capability and
competency of these Tribunals. The power/discretion vested to
specify qualifications and decide who should man the Tribunals
has to be exercised keeping in view the larger public interest
and the same must be just, fair and reasonable and not vague
or imprecise. [Para 164] [127-F-H; 128-A-C]
3.2 (5) At this juncture it must also be reiterated that
equality can only be amongst equals, and that it would be
impermissible to treat unequals equally on the basis of undefined
contours of 'Uniformity'. A Tribunal to have the character of a
quasi-judicial body and a legitimate replacement of Courts, must
essentially possess a dominant judicial character through their
members/presiding officers. It was observed in Madras Bar
Association (2010) that it is a fundamental prerequisite for
transferring adjudicatory functions from Courts to Tribunals that
the latter must possess the same capacity and independence as
the former, and that members as well as the presiding officers
of Tribunals must have significant judicial training and legal
experience. Further, knowledge, training and experience of
members/presiding officers of a Tribunal must mirror, as far as
possible, that of the Court which it seeks to substitute. [Para
165] [128-D-G]
(C) Constitutionality of procedure of removal
3.3 (1) It is clear from the Scheme contemplated under the
Rules that the government has significantly diluted the role of
the Judiciary in appointment of judicial members. Further, in
many Tribunals like the NGT, the role of the Judiciary in
appointment of non-judicial members has entirely been taken
away. Such a practice violates the Constitutional scheme and the
dicta of this Court in various earlier decisions already referred
to. It is also important to note that 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
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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.
It is well understood across the world and also under our
Constitutional framework that allowing judges to be removed by
the Executive is palpably unconstitutional and would make them
amenable to the whims of the Executive, hampering discharge
of judicial functions. [Para 169] [129-F-H; 130-A-B]
3.3 (2) It is essential that the same be observed in letter
and spirit and this Court therefore reiterate that Members and
Presiding Officers of Tribunals cannot be removed without either
the concurrence of the Judiciary or in the manner specified in
the Constitution for Constitutional Court judges. [Para 171] [130G-H]
3.4 (D) Term of Office and Maximum Age
3.4 (1) Various enactments providing for appointment and
other incidentals of members have been brought to our notice
to demonstrate an apparent disparity in age of superannuation
of Members and Chairpersons/Presiding Officers of different
Tribunals. Illustratively, Section 14D of the Telecom Regulatory
Authority of India Act, 1997 provides a Member of Telecom
Disputes Settlement and Appellate Tribunal shall not hold office
after attaining the age of sixty-five years, whereas, Section 55(1)
of the Consumer Protection Act, 2019 provides that a Member
of the National Consumer Disputes Redressal Commission shall
not hold office after attaining the age of sixty-seven years. This
difference in superannuation age may lead to an undesirable
situation wherein a member of a Tribunal with low retirement
age can be reappointed in another Tribunal with a higher
retirement age. [Para 172] [131-A-C]
3.4 (2) The Constitution of India doesn't differentiate
between High Courts in terms of conditions of service of judges
and prescribes a uniform age of superannuation for judges of all
High Courts. Conforming to the principle, as held in earlier
judgements of this Court, the Tribunals should have similar
standards of appointment and service as that of the Court it is
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substituting. There must, therefore, be a uniform age of
superannuation for all members in all the Tribunals. [Para 173]
[131-D-E]
3.5 (E) Contradictions in the Rules
The Bench has observed following contradictions in the
Rules:
(a) There is an inconsistency within the Rules with regard
to the tenure prescribed for the Members of Tribunals insofar
as a fixed tenure of three years for both direct appointments
from the Bar and appointment of retired judicial officers or
judges of High Court or Supreme Court. It is also discriminatory
to the extent that it attempts to create equality between unequal
classes. The tenure of Members, Vice-Chairman, Chairman, etc.
must be increased with due consideration to the prior decisions
of the Court.
(b) The difference in the age of superannuation of the
Members, Vice-Chairmen and Chairmen, as formulated in the
Rules is contrary to the objectives of the Finance Act, 2017 viz.,
to attain uniformity in the composition of the Tribunal
framework. There should be a uniform age of superannuation
for Members, Vice-Chairmen, Chairmen, etc. in all Tribunals.
(c) Rule 4(2) of the Rules providing that the Secretary to
the Government of India in the Ministry or Department under
which the Tribunal is constituted shall be the convener of the
Search-cum-Selection Committee, is in direct violation of the
doctrine of Separation of Powers and thus contravenes the basic
structure of the Constitution. Corollary to the dictum of this
Court in the Fourth Judges Case, judicial dominance in
appointment of members of judiciary cannot be diluted by the
Executive.
(d) Rule 7 accords unwarranted discretion to the Central
Government insofar as it merely directs and not mandates the
Central Government to consider the recommendation of
Committee for removal of a Member of a Tribunal. The Central
Government shall mandatorily consider the recommendation of
the Committee before removal of any Member of Tribunal.
Furthermore, the proviso to Rule 7 creates an unjust
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classification between National Company Law Appellate Tribunal
(NCLAT) and other fora inasmuch as the removal of
Chairperson or member of NCLAT alone is to be in consultation
with the Chief Justice of India.
(e) Moral turpitude is a term well defined by this Court in
numerous decisions. Rule 7(b) cannot be allowed to survive as
it allows the Executive to interpret the meaning of 'moral
turpitude', which is an encroachment on the judicial domain.
(f) The power of relaxation of rules with respect to any
class of persons shall be vested with the Search-cum-Selection
Committee and not with the Central Government as provided
under Rule 20. As ruled by this Court earlier in Madras Bar
Association (2014), the Central Government cannot be allowed
to have administrative control over the Judiciary without
subverting the doctrine of separation of powers. [Para 179] [133A-H; 134-A-D]
4. ISSUE IV: WHETHER THERE SHOULD BE A
SINGLE NODAL AGENCY FOR ADMINISTRATION OF
ALL TRIBUNALS?
4.1 This Court in L. Chandra Kumar v. Union of India,
envisaged the administration of the entire Tribunal Framework
in the country to be monitored by a single nodal agency/ministry.
It was observed not to be advisable to allow supervision of a
Tribunal by a department/ministry which is a party before it. This
Court recommended constitution of an independent agency by
the concerned Ministry, to oversee the working of Tribunals.
The independent agency when constituted, may also prescribe
a uniform code for appointment, qualification, condition of
service, manner of allocation of fund, etc. of the Tribunals. This
will, the Court suggested, minimise the influence of the parent
ministry of the Tribunal, in addition to ensuring uniformity in the
entire Tribunal framework. [Para 181] [134-G-H; 135-A-B]
4.2 What appears to be of paramount importance is that
every Tribunal must enjoy adequate financial independence for
the purpose of its day to day functioning including the
expenditure to be incurred on (a) recruitment of staff; (b)
creation of infrastructure; (c) modernisation of infrastructure; (d)
computerisation; (e) perquisites and other facilities admissible
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to the Presiding Authority or the Members of such Tribunal. It
may not be very crucial as to which Ministry or Department
performs the duties of Nodal Agency for a Tribunal, but what is
of utmost importance is that the Tribunal should not be expected
to look towards such Nodal Agency for its day to day
requirements. There must be a direction to allocate adequate
and sufficient funds for each Tribunal to make it self-sufficient
and self-sustainable authority for all intents and purposes. The
expenditure to be incurred on the functioning of each Tribunal
has to be necessarily a charge on the Consolidated Fund of India.
Therefore, hitherto, the Ministry of Finance shall, in consultation
with the Nodal Ministry/Department, shall earmark separate and
dedicated funds for the Tribunals. It will not only ensure that
the Tribunals are not under the financial control of the
Department, who is a litigant before them, but it may also
enhance the public faith and trust in the mechanism of Tribunals.
[Para 184] [136-E-H; 137-A]
5. ISSUE V: WHETHER THERE IS A NEED FOR
CONDUCTING A JUDICIAL IMPACT ASSESSMENT
OF ALL TRIBUNALS IN INDIA?
5.1 The American principle of 'Judicial Impact
Assessment' was first borrowed by this Court in its dictum in
Salem Advocate Bar Assn. (II) v. Union of India, whereby it was
observed that it is imperative for the Legislature to perform a
Judicial Impact Assessment of the enactment passed to assess
its ramifications on the judiciary. This Court had directed for a
committee to be constituted to assess the need for Judicial
Impact Assessment in the Indian context. Pursuant thereto the
Jagannadha Rao Committee Report was submitted. The Report
suggested that by way of Judicial Impact Assessment, the
legislature must analyse the budgetary requirement of the staff
that would require to be created by the statute and additional
expenditure arising out of the new cases consequent to the
enactment. Further, the financial memorandum, as prepared by
the legislature, must specifically include the number of civil and
criminal cases expected to arise from the new enactment,
requirement of more judges and staff for adjudication of these
cases and the necessary infrastructure. [Para 187] [137-E-H;
138-A]
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5.2 (1) In the present case, this Court is of the view that
the legislature has not conformed to the opinion of this Court
with respect to 'Judicial Impact Assessment' and thus, has not
made any attempt to assess the ramifications of the Finance Act,
2017. It can be legitimately expected that the multifarious
amendments in relation to merger and reorganisation of
Tribunals may result in massive increase in litigation which, in
absence of adequate infrastructure, or budgetary grants, will
overburden the Judiciary. [Para 188] [138-E-F]
5.2 (2) In the fitness of things, this Court deems it
appropriate to direct the Union of India to carry out financial
impact assessment in respect of all the Tribunals referable to
Sections 158 to 182 of the Finance Act, 2017 and undertake an
exercise to assess the need based requirements and make
available sufficient resources for each Tribunal established by
the Parliament. [Para 189] [138-G]
6. ISSUE VI: WHETHER JUDGES OF TRIBUNALS SET
UP BY ACTS OF PARLIAMENT UNDER ARTICLES
323-A AND 323-B OF THE CONSTITUTION CAN BE
EQUATED IN 'RANK' AND 'STATUS' WITH
CONSTITUTIONAL FUNCTIONARIES?
6.1 (1) In light of the unequivocal assertions of a coordinate bench of this Court, there can be no doubt that
executive action cannot confer status equivalent to that of either
Supreme Court or High Court judges on any member or head
of any Tribunal or other judicial fora. [Para 193] [141-B]
6.1 (2) Furthermore, that even though manned by retired
judges of High Courts and the Supreme Court, such Tribunals
established under Article 323-A and 323-B of the Constitution
cannot seek equivalence with High Courts or the Supreme
Court. Once a judge of a High Court or Supreme Court has
retired and he/she no longer enjoys the Constitutional status,
the statutory position occupied by him/her cannot be equated
with the previous position as a High Court or a Supreme Court
judge. The rank, dignity and position of Constitutional judges
is hence sui generis and arise not merely by their position in the
Warrant of Precedence or the salary and perquisites they draw,
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but as a result of the Constitutional trust accorded in them.
Indiscriminate accordance of status of such Constitutional judges
on Tribunal members and presiding officers will do violence to
the very Constitutional Scheme. [Para 194] [141-C-D]
7. ISSUE VII: WHETHER DIRECT STATUTORY
APPEALS FROM TRIBUNALS TO THE SUPREME
COURT OUGHT TO BE DETOURED?
7.1 Such statutory appeals take away the inherent ability
of the Supreme Court, as envisaged in the Constitution, to
regulate cases before it by confining its consideration to cases
involving the most egregious of wrongs and/or having the
greatest impact on public interest. [Para 205] [146-E]
7.2 Further, in providing for appeals directly from
Tribunals, the jurisdiction of High Courts is in effect curtailed
to a great extent. Not only does this hamper access to justice,
but it also takes away the much needed exposure for High Court
judges, earnestly needed in a vibrant and ever-evolving
judiciary. Since majority of the judges of the Supreme Court are
elevated from the High Courts, their lack of exposure to these
specialised areas of law hinders their efficacy in adjudicating the
direct statutory appeals from specialised Tribunals. [Para 206]
[146-F-G]
7.3 Providing statutory appeals directly to the Supreme
Court dents this to no end. With increasing tribunalisation,
statutory appeal provisions are ostensibly being included without
undertaking any 'Judicial Impact Assessment'. As of last count
there are several hundreds of cases which have been decided
by the NCLAT and many other thousands by other tribunals
pending in this Court. [Para 214] [149-G]
7.4. In light of this, provisions for statutory appeals directly
and liberally to the Supreme Court raises the inevitability of
bogging the Court down and inhibiting its Constitutional
objective. Further, providing statutory appeals to this Court
against orders of Tribunals also undermines the essence of
tribunalisation. It is hardly rational to state on one hand that an
alternate to the ordinary method of justice dispensation needs
to be provided owing to the complicated procedures and owing
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to the lack of specialisation of District and High Courts, and in
the same breadth also provide statutory appeals to the final
Court in that very original system. [Para 216] [150-C-D]
7.5 If High Courts are ill placed to hear routine matters
then it hardly seems justifiable that this Court would be any
better placed to resolve disputes in appellate jurisdiction. Finality
as a principle must be encouraged and providing statutory
appeals to the Supreme Court only undermines the same.
Instead, no discernible harm would arise if decisions of Tribunals
or High Courts attain finality, without reaching this Court. [Para
217] [150-E]
8. ISSUE VIII: WHETHER THERE IS A NEED FOR
AMALGAMATION OF EXISTING TRIBUNALS AND
SETTING UP OF BENCHES
8.1 The 'imbalance' in distribution of case-load and
inconsistencies in nature, location and functioning of Tribunals
require urgent attention. It is essential that after conducting a
Judicial Impact Assessment as directed earlier, such 'niche'
Tribunals be amalgamated with others dealing with similar areas
of law, to ensure effective utilisation of resources and to
facilitate access to justice. [Para 226] [155-F]
CONCLUSION
9. In light of the discussions and analysis, it is held that:
(i) 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.
(ii) Section 184 of the Finance Act, 2017 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.
(iii) The Tribunal, Appellate Tribunal and other Authorities
(Qualifications, Experience and other Conditions of Service of
Members) Rules, 2017 suffer from various infirmities as
observed earlier. These Rules formulated by the Central
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Government under Section 184 of the Finance Act, 2017 being
contrary to the parent enactment and the principles envisaged
in the Constitution as interpreted by this Court, are hereby
struck down in entirety.
(iv) The Central Government is accordingly directed to reformulate the Rules strictly in conformity and in accordance with
the principles delineated by this Court in R.K. Jain, L. Chandra
Kumar, Madras Bar Association and Gujarat Urja Vikas Ltd.
conjointly read with the observations made in the earlier part
of this decision.
(v) The new set of Rules to be formulated by the Central
Government shall ensure 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.
(vi) It would be open to the Central Government to
provide in the new set of Rules that the Presiding Officers or
Members of the Statutory Tribunals shall not hold 'rank' and
'status' equivalent to that of the Judges of the Supreme Court
or High Courts, as the case may be, only on the basis of drawing
equal salary or other perquisites.
(vii) There is a need-based requirement to conduct
'Judicial 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. Thus, we find it appropriate to issue a writ
of mandamus to the Ministry of Law and Justice to carry out
such 'Judicial Impact Assessment' and submit the result of the
findings before the competent legislative authority.
(viii) The Central Government in consultation with the Law
Commission of India or any other expert body shall re-visit the
provisions of the statutes referable to the Finance Act, 2017 or
other Acts as listed in para 174 of this order and place
appropriate proposals before the Parliament for consideration
of the need to remove direct appeals to the Supreme Court from
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orders of Tribunals.