Supreme Court strikes down Tribunal Rules 2017, orders government to reformulate with non-discriminatory service conditions

The SC referred the issue of whether Part XIV of the Finance Act, 2017 constitutes a valid Money Bill under Article 110 to a larger bench. The Court held that Section 184 of the Finance Act, 2017 does not suffer from excessive delegation but struck down the Tribunal Rules, 2017 in entirety for various constitutional infirmities. The Central Government was directed to reformulate rules ensuring non-discriminatory service conditions and conduct Judicial Impact Assessment of all tribunals. The Court mandated consultation with the Law Commission regarding direct appeals to SC from tribunals and ordered amalgamation of existing tribunals based on subject matter homogeneity.

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Issues Involved:
1. Whether the Finance Act, 2017 can be termed as a 'money bill' under Article 110.
2. Whether Section 184 of the Finance Act, 2017 is unconstitutional on account of excessive delegation.
3. Whether the 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 the Court on functioning of Tribunals.
4. Whether there should be a Single Nodal Agency for administration of all Tribunals.
5. Whether there is a need for conducting a Judicial Impact Assessment of all Tribunals in India.
6. 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.
7. Whether direct statutory appeals from Tribunals to the Supreme Court ought to be detoured.
8. Whether there is a need for amalgamation of existing Tribunals and setting up of benches.

Issue-wise Analysis:

I. Whether the Finance Act, 2017 can be termed as a 'money bill' under Article 110 and consequently is validly enactedRs.
The judgment discusses the constitutional framework governing 'money bills' and the role of the Speaker in certifying a bill as a 'money bill.' It emphasizes that the decision of the Speaker under Article 110(3) is not immune from judicial review. The judgment notes that the certification of a bill as a 'money bill' must strictly adhere to the provisions of Article 110. The majority opinion in K.S. Puttaswamy (Aadhaar-5) held that the Aadhaar Act was validly passed as a 'money bill,' while the minority opinion explicitly overruled previous decisions that put the Speaker's decision beyond judicial review. The judgment concludes that the issue of whether the Finance Act, 2017 is a 'money bill' should be referred to a larger Bench for consideration.

II. Whether Section 184 of the Finance Act, 2017 is unconstitutional on account of excessive delegationRs.
The judgment examines whether Section 184, which delegates the power to make rules regarding qualifications, appointment, and service conditions of tribunal members, constitutes excessive delegation. It concludes that the delegation of such powers without clear guidelines amounts to excessive delegation and is unconstitutional. The judgment emphasizes that the qualifications for tribunal members are an essential legislative function that cannot be delegated without clear guidelines.

III. Whether the 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 the Court on functioning of TribunalsRs.
The judgment finds that the Rules formulated under Section 184 suffer from various infirmities, including excessive executive interference in the appointment process, lack of judicial dominance in the Search-cum-Selection Committees, and dilution of judicial character in appointments. It concludes that the Rules are contrary to the principles laid down in previous decisions of the Court and are unconstitutional. The judgment directs the Central Government to re-formulate the Rules in accordance with the principles delineated in earlier decisions.

IV. Whether there should be a Single Nodal Agency for administration of all TribunalsRs.
The judgment supports the need for a single nodal agency to oversee the administration of all tribunals. It highlights the problems arising from the current system where tribunals are administered by their sponsoring ministries, leading to a lack of uniformity and potential conflicts of interest. The judgment recommends the establishment of an independent statutory body called the 'National Tribunals Commission' to oversee the selection process, service conditions, and administration of tribunals.

V. Whether there is a need for conducting a Judicial Impact Assessment of all Tribunals in IndiaRs.
The judgment emphasizes the importance of conducting a Judicial Impact Assessment to analyze the ramifications of changes in the tribunal framework. It notes that the legislature has not conducted such an assessment for the Finance Act, 2017, and directs the Ministry of Law and Justice to carry out a Judicial Impact Assessment and submit the findings to the competent legislative authority.

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 functionariesRs.
The judgment asserts that tribunal members cannot be equated in rank and status with judges of Constitutional Courts. It emphasizes that the rank, dignity, and position of Constitutional judges are sui generis and arise from the Constitutional trust accorded to them. The judgment directs the Union of India to ensure that tribunal members are not accorded status equivalent to that of Constitutional judges.

VII. Whether direct statutory appeals from Tribunals to the Supreme Court ought to be detouredRs.
The judgment highlights the problems arising from direct statutory appeals to the Supreme Court, including increased pendency and reduced access to justice. It recommends that the Union of India revisit the provisions allowing direct appeals to the Supreme Court and consider providing appeals to Division Benches of High Courts instead. The judgment directs the Union to undertake this exercise within six months.

VIII. Whether there is a need for amalgamation of existing Tribunals and setting up of benchesRs.
The judgment supports the rationalization and amalgamation of existing tribunals based on their case-load and subject-matter. It recommends setting up circuit benches of all tribunals at the seats of major jurisdictional High Courts to ensure accessibility. The judgment directs the Union to conduct a Judicial Impact Assessment and take appropriate steps for amalgamation and setting up of benches.

Conclusion:
The judgment holds that the Finance Act, 2017 could not have been enacted as a 'money bill' and that the Rules framed under Section 184 are unconstitutional. It directs the Central Government to re-formulate the Rules, establish a single nodal agency for tribunals, conduct a Judicial Impact Assessment, and revisit provisions for direct statutory appeals to the Supreme Court. The judgment emphasizes the need for independence and uniformity in the tribunal framework and recommends the establishment of the 'National Tribunals Commission' to oversee the administration of tribunals.

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