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        2021 (10) TMI 885 - SC - Indian Laws

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        Tribunal independence rules: age bar, two-name panel and short tenure provisions were struck down as unconstitutional. Legislation governing tribunal appointments and service conditions was examined against binding judicial directions designed to secure tribunal ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Tribunal independence rules: age bar, two-name panel and short tenure provisions were struck down as unconstitutional.

                          Legislation governing tribunal appointments and service conditions was examined against binding judicial directions designed to secure tribunal independence. The minimum age of 50 years for eligibility, together with the revised allowance and housing regime, was found to conflict with those directions; the age bar was held unconstitutional, while the housing allowance position was treated as aligned with the earlier framework. Requiring a panel of two names for appointments and only a preferred three-month decision period was also treated as an impermissible override of the earlier appointment process and struck down. A four-year tenure was held inconsistent with the need for secure service, while the retrospective proviso was preserved only to avoid disturbing appointments already made under prior court orders.




                          Issues: (i) Whether the first and second provisos to Section 184(1) of the Finance Act, 2017, as introduced by the Ordinance, were valid, including the minimum age requirement and the revised allowance and housing regime; (ii) Whether Section 184(7), requiring a panel of two names and a decision preferably within three months, was valid; (iii) Whether Section 184(11)(i) and (ii), fixing a four-year tenure, and the retrospective proviso thereto were valid.

                          Issue (i): Whether the first and second provisos to Section 184(1) of the Finance Act, 2017, as introduced by the Ordinance, were valid, including the minimum age requirement and the revised allowance and housing regime.

                          Analysis: The minimum age of 50 years was held to frustrate the earlier binding directions protecting tribunal independence by excluding otherwise qualified younger advocates and by introducing an arbitrary age bar without a rational nexus to merit, experience, or the object of improving tribunal adjudication. The revised allowance and housing provisions were assessed against the earlier directions ensuring adequate housing or equivalent house rent allowance for tribunal members; the later amendment to the rules was noted as bringing the matter into conformity with those directions.

                          Conclusion: The first proviso to Section 184(1) was held unconstitutional and void. The second proviso, read with the third proviso, was also held unconstitutional by the majority, though the later rules on house rent allowance were treated as conforming to the earlier directions.

                          Issue (ii): Whether Section 184(7), requiring a panel of two names and a decision preferably within three months, was valid.

                          Analysis: The earlier judgment had directed that the Search-cum-Selection Committee recommend one name for each vacancy to minimize executive discretion and preserve judicial independence in tribunal appointments. Reintroducing a panel of two names was treated as a direct legislative override of that binding direction, and the permissive time frame was seen as diluting the command for prompt appointments to keep tribunals functional.

                          Conclusion: Section 184(7) was held unconstitutional and void.

                          Issue (iii): Whether Section 184(11)(i) and (ii), fixing a four-year tenure, and the retrospective proviso thereto were valid.

                          Analysis: A short tenure was held to undermine security of service and thereby the independence of tribunals. The majority treated the four-year tenure as an impermissible reversal of the earlier binding directions that had fixed a five-year term. At the same time, the retrospective proviso was upheld only to the extent it did not disturb appointments already made pursuant to the Court's interim orders during the interregnum.

                          Conclusion: Section 184(11)(i) and (ii) were held void and unconstitutional. The retrospective proviso was upheld, but it was not allowed to affect incumbents appointed under the Court's earlier orders.

                          Final Conclusion: The impugned provisions were struck down to the extent they impaired tribunal independence, while the retrospective proviso was saved only in a limited manner so as not to unsettle existing appointments made under prior judicial directions.

                          Ratio Decidendi: Where legislation governing tribunal appointments and service conditions frustrates binding judicial directions intended to secure independence, fair tenure, and effective functioning of tribunals, the offending provisions are unconstitutional unless the legislative measure genuinely removes the basis of the earlier decision without undermining the constitutional safeguards.


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                          ActsIncome Tax
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