2025 (11) TMI 1330 - SC - Indian Laws

Tribunal Reforms Act provisions on age, tenure, selection, allowances struck down as unconstitutional legislative override of precedent

Madras Bar Association Versus Union of India And Another

SC held that key provisions of the Tribunal Reforms Act, 2021, including those imposing a minimum age of 50 years, four-year tenure with upper age caps, a ... Tribunal Reforms Act, 2021 - Several provisions of the Act, particularly Sections 3(1), 3(7), 5, and 7(1), violate the constitutional principles of separation of powers and judicial independence - violation of constitutional guarantees of judicial independence, the doctrine of separation of powers and Article 14 - impermissible legislative overruling of judicial directions, particularly by enabling the executive, through delegated rule-making powers, to undo safeguards prescribed by the Court - violation of legitimate expectations and vested rights of sitting members regarding tenure, reappointment, allowances, and house rent allowances - vires of Act imposing arbitrary age and tenure restrictions that discourage meritorious candidates below fifty years from joining tribunals. Doctrine of parliamentary supremacy - Whether Parliament possesses the authority to disregard a judicial pronouncement and to enact a statute in any manner it deems appropriate? - HELD THAT:- Under the model of constitutional supremacy, every organ of the State derives its authority from the Constitution and remains bound by the limitations it prescribes. Parliament, though entrusted with wide legislative powers, must enact laws within the contours of its legislative competence and in conformity with constitutional rights, values, and structural principles. The power to assess whether a law comports with these limitations is expressly vested in the courts. When the Court interprets the Constitution and pronounces upon the validity of a statute, that pronouncement becomes the authoritative and binding declaration of the law. As has long been recognised, the Constitution is what the Court says it is, not in the sense of aggrandising judicial authority, but as a necessary corollary of the Court’s role as the final arbiter of constitutional meaning. Consequently, once the Court has struck down a provision or issued binding directions after identifying a constitutional defect, Parliament cannot simply override or contradict that judicial decision by reenacting the very same measure in a different form. What Parliament may legitimately do is to cure the defect identified by the Court, whether by altering the underlying conditions, removing the constitutional infirmity, or restructuring the statutory framework in a manner consistent with the Court’s reasoning. A valid legislative response must therefore engage with and remedy the constitutional violation pointed out by the judiciary. It cannot merely restate or repackage the invalidated provision. In a judgment of this Court in the case of Dr. Jaya Thakur v. Union of India and Others [2023 (7) TMI 471 - SUPREME COURT] (to which one of us Gavai, J. as he then was a party) this Court held that a writ of mandamus could not be nullified by a subsequent legislation made by the legislator. That a binding judicial pronouncement between the parties cannot be made ineffective with the aid of any legislative power by enacting a provision which in substance simply overrules a judgment unless the foundation of the judgment is removed - there are no merit in the argument of the learned Attorney General that Parliament has discretion to ignore the decisions of this Court. Whether the Court can compel Parliament to legislate in a particular manner? - HELD THAT:- The principle is undoubtedly correct. This Court has repeatedly acknowledged the institutional limits of judicial power and has cautioned against intruding into the prerogative of the legislature by dictating the precise contents of a statute. The constitutional scheme does not permit the judiciary to prescribe the text of a law or to mandate that Parliament adopt a specific policy choice. A clear distinction must be maintained between directing legislation and reviewing legislation. The former is forbidden, because the Court cannot function as a law-maker. The latter is indispensable to preserving the supremacy of the Constitution. Where the Court identifies constitutional infirmities and issues mandatory directions to ensure compliance with constitutional principles, such as those concerning the independence, composition, or tenure of adjudicatory bodies, those directions are binding. Parliament may respond by removing the basis of the judgment through curative legislation, but it cannot simply enact a statute that reproduces or perpetuates the very defects the Court has critiqued. Thus, while the judiciary cannot dictate policy, it can and must ensure that legislative choices conform to the Constitution. Judicial restraint in law-making does not imply judicial abdication in constitutional adjudication. When the Court examines the validity of a statutory provision governing tribunals, it does not issue legislative directions in the strict sense. Instead, it tests the law against these constitutionally entrenched standards. In doing so, the Court reinforces the idea that the tribunal system derives its constitutional legitimacy from adherence to the same principles that safeguard judicial independence and the rule of law - The validity of legislation may, and must, be tested against structural principles such as separation of powers and judicial independence when the legislation in question directly implicates the constitutional design of the justice system. Judicial enforcement of these principles is an essential feature of constitutional adjudication, not an overreach. Whether the Impugned Act merely repackages what was struck down in MBA (V), without curing its defects? - HELD THAT:- What the 2021 Ordinance did through amendments to Section 184 of the Finance Act, 2017, the Impugned Act now does through Sections 3, 5, and 7. The minimum age bar of fifty years for all appointments, the truncated four-year tenure with upper age caps of 70/67, the requirement that the Search-cum-Selection Committee forward a panel of two names for each vacancy, and the fixing of allowances and benefits to those of equivalent civil servants are all provisions, which have already been judicially tested and struck down. The Court has expressly held that these measures are arbitrary, destructive of judicial independence, and amount to an impermissible legislative override of binding directions - Merely shifting the same content from the amended Section 184 of the Finance Act into Sections 3, 5 and 7 of a stand-alone statute, while using the non obstante formula “notwithstanding anything contained in any judgment or order”, does not cure the constitutional defects. It simply re- enacts them in another avatar. The Impugned Act, therefore, does not “cure” the law declared earlier, but consciously defies it. The provisions of the Impugned Act cannot be sustained. They violate the constitutional principles of separation of powers and judicial independence, which are firmly embedded in the text, structure, and spirit of the Constitution. The Impugned Act directly contradicts binding judicial pronouncements that have repeatedly clarified the standards governing the appointment, tenure, and functioning of tribunal members. Instead of curing the defects identified by this Court, the Impugned Act merely reproduces, in slightly altered form, the very provisions earlier struck down. This amounts to a legislative override in the strictest sense: an attempt to nullify binding judicial directions without addressing the underlying constitutional infirmities. Such an approach is impermissible under our constitutional scheme. Because the Impugned Act fails to remove the defects identified in prior judgments and instead reenacts them under a new label, it falls afoul of the doctrine of constitutional supremacy. Accordingly, the impugned provisions are struck down as unconstitutional. Protection extended - HELD THAT:- It is not in dispute that in respect of some of the Members of the ITAT, the recommendations were made by the SCSC on 21st September 2019. The same was put up before the Appointment Committee of the Cabinet (ACC) on 16th October 2019. In the meantime, the judgment in the case of Rojer Mathew [2019 (11) TMI 716 - SUPREME COURT (LB)] was delivered by this Court on 13th November 2019. As such, appointments of all persons whose recommendations were made on 21st September 2019 and whose names were approved by the ACC ought to have been made immediately after the judgment in the case of Rojer Mathew was delivered. This would have been consistent with the statement made by the then learned Attorney General on 9th February 2018. However, for the reasons best known to the Union of India, the appointment orders were issued only on 11th September 2021 and 1st October 2021. According to the appointment order, the said appointments, including their tenure, are in terms of the new provisions. We are, therefore, of the considered view that the said appointments by the Central Government are totally inconsistent with the statement made by the learned Attorney General on 9th February 2018. The impugned Act (to the extent it reenacts provisions earlier struck down without curing defects) is unconstitutional for violating separation of powers, judicial independence and Article 14; such provisions are struck down. Petition disposed off. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether a reference of the matters arising from the Tribunal Reforms Act, 2021 to a larger Bench was warranted under Article 145(3) of the Constitution. 1.2 Whether Parliament can disregard or legislatively override binding judicial pronouncements on tribunals without curing the constitutional defects identified by the Court. 1.3 Whether the constitutionality of tribunal-related legislation can be tested on the basis of structural constitutional principles such as separation of powers and judicial independence, and whether these are enforceable constitutional limits. 1.4 Whether the core provisions of the Tribunal Reforms Act, 2021 governing qualifications, appointments, tenure and service conditions of tribunal members (including minimum age bar of 50 years, four-year tenure, panel of two names, and parity of allowances with civil servants) are constitutionally valid. 1.5 What protections and transitional arrangements apply to serving and selected tribunal members, and what interim constitutional regime governs tribunals pending fresh legislation, including the obligation to establish a National Tribunals Commission. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Reference to a larger Bench Legal framework (as discussed) 2.1 Article 145(3) requires a Bench of at least five Judges where a 'substantial question of law as to the interpretation of this Constitution' is involved. Interpretation and reasoning 2.2 The Court noted that the constitutional questions relating to the creation, composition, independence and functioning of tribunals have already been comprehensively settled by Constitution Benches and larger Benches in Sampath Kumar, L. Chandra Kumar, the Madras Bar Association series and Rojer Mathew. 2.3 No new or unresolved substantial constitutional question was shown that would require reconsideration of those precedents or departure from them. The Attorney General was unable to demonstrate any fresh constitutional issue justifying a reference. 2.4 The plea for reference was made at an advanced stage of hearing, after substantial arguments had been heard, and entertaining it then would undermine procedural fairness and delay adjudication. 2.5 Further delay would perpetuate vacancies and uncertainty in tribunals, adversely impacting access to justice. Conclusions 2.6 No case was made out for reference under Article 145(3); the application for reference to a larger Bench was rejected. Issue 2 - Parliament's power vis-à-vis binding judicial decisions (constitutional supremacy and legislative overruling) Legal framework (as discussed) 2.7 The Court reiterated the doctrine of constitutional supremacy as articulated in Special Reference No. 1 of 1964, Kesavananda Bharati, State of Rajasthan v. Union of India and Kalpana Mehta: the Constitution is 'Suprema lex' and no organ enjoys absolute power. 2.8 Judicial review and the 'law declared' by the Supreme Court under Article 141 are essential facets of the basic structure and of constitutional supremacy. 2.9 The Court relied upon NHPC Ltd. v. State of Himachal Pradesh and Dr. Jaya Thakur to summarise permissible 'abrogation' by legislation: the legislature may retrospectively amend the law to remove the basis of a judgment by curing the defect, but cannot merely set aside or negate a judicial decision without removing the defect, nor nullify a mandamus by simple reenactment. Interpretation and reasoning 2.10 Parliament has wide legislative power, including to change the law prospectively or retrospectively, but must act within constitutional limits and cannot claim the English doctrine of parliamentary sovereignty. 2.11 Once the Court has identified constitutional defects and issued directions (in the nature of mandamus) concerning age, tenure, selection process, HRA, judicial dominance in appointments, etc., those directions constitute 'law declared' under Article 141, not mere suggestions. 2.12 Parliament may validly respond only by curing the defects pointed out; a bare reenactment of provisions already struck down, especially with a non obstante reference to 'any judgment', constitutes an impermissible legislative override and colourable legislation. 2.13 A writ of mandamus, or binding final decision (including interim directions implemented and acted upon), cannot be nullified by subsequent legislation unless the foundational basis of the judgment is removed in a constitutionally compliant manner. Conclusions 2.14 Parliament cannot ignore or contradict binding decisions of the Court by reenacting the same provisions in a new form without curing the identified defects; any such attempt violates constitutional supremacy, separation of powers and Article 14 and is liable to be struck down. 2.15 The Attorney General's contention that Parliament enjoys unfettered discretion to deviate from earlier judicial directions in the tribunal context was rejected. Issue 3 - Use of separation of powers and judicial independence as enforceable constitutional limits Legal framework (as discussed) 3.1 The Court traced the tribunals jurisprudence from Sampath Kumar, R.K. Jain, L. Chandra Kumar, R. Gandhi (MBA I), MBA II, MBA III, Rojer Mathew, MBA IV and MBA V, which collectively define the constitutional standards for tribunals: judicial independence, separation of powers, equality under Article 14, and the basic feature of judicial review. 3.2 Justice Bhat's concurrence in MBA V was relied upon to affirm that independence of the judiciary and separation of powers are concrete, justiciable constitutional principles, not vague notions. Interpretation and reasoning 3.3 The Court rejected the Union's argument that legislation cannot be tested against 'abstract principles' like separation of powers or judicial independence. These principles are grounded in the text and scheme of the Constitution (Articles 32, 136, 141, 226, 227, provisions on judicial tenure and removal, etc.) and have been repeatedly enforced. 3.4 Tribunals exercise judicial power traditionally exercised by courts; therefore, structural guarantees of judicial independence and equal quality of justice apply equally to them. This includes standards on appointments, tenure, composition, and insulation from executive control. 3.5 Through the tribunal cases, the Court has distilled specific constitutional benchmarks for tribunals: judicial primacy in selection, minimum tenure (5 years with reappointment), no arbitrary age bars excluding meritorious younger advocates, adequate housing/HRA, protection from executive-dominated rule-making, and prohibition of tribunals as post-retirement sinecures or executive-controlled bodies. 3.6 The Court analogised this to other constitutional doctrines: the preconditions in M. Nagaraj for reservation in promotion, and the privacy framework in K.S. Puttaswamy-none expressly textual, yet binding constitutional standards against which legislation is tested. Conclusions 3.7 Separation of powers and judicial independence are operative constitutional limits; legislation concerning tribunals can and must be scrutinised against these structural principles and Article 14. 3.8 The settled tribunal jurisprudence creates binding constitutional benchmarks, and any tribunal legislation must conform to those standards. Issue 4 - Constitutional validity of the Tribunal Reforms Act, 2021 (core provisions on appointments, tenure and service conditions) Legal framework (as discussed) 4.1 The Court compared the Tribunal Reforms Ordinance, 2021 (amending Section 184 of the Finance Act, 2017) with the Tribunal Reforms Act, 2021. 4.2 The earlier Ordinance provisions on (i) minimum age of 50 years, (ii) four-year tenure with age caps of 70/67, (iii) requirement of a panel of two names, (iv) parity of allowances/benefits with equivalent civil servants, had already been adjudicated and struck down in MBA V as unconstitutional. Interpretation and reasoning 4.3 On a clause-by-clause comparison, the Court found that Sections 3, 4, 5, 6 and 7 of the Tribunal Reforms Act, 2021 are, in substance and often verbatim, a reenactment of the impugned Ordinance provisions earlier challenged and invalidated in MBA V, including: * Section 3(1): minimum age requirement of 50 years for all appointments to tribunals. * Section 3(2)-(8): composition and procedure of Search-cum-Selection Committees, including requirement that they recommend a panel of two names per vacancy and the Government 'preferably' decide within three months. * Section 4: grounds and procedure for removal, mirroring the earlier framework. * Section 5: fixed four-year tenure for Chairperson and Members with upper age caps (70/67), with a limited saving proviso subject to a maximum of five years. * Section 6: eligibility for reappointment 'in accordance with the provisions of this Act', without curing the defects identified in MBA IV/V. * Section 7: salaries, allowances and benefits pegged to those of equivalent level Central Government officers, with only limited scope for enhanced rent reimbursement-repeating the very scheme earlier found inconsistent with directions on HRA and housing. 4.4 The Court noted that the same policy of truncating tenure, imposing an exclusionary age bar, mandating panels of two names, and equating service conditions with civil servants had been expressly held in MBA IV and MBA V to undermine judicial independence, discourage meritorious younger advocates, and amount to an impermissible legislative override. 4.5 Merely re-locating these provisions from the Finance Act into a stand-alone Tribunal Reforms Act and appending non obstante clauses referring to 'any judgment' does not cure the constitutional defects; it reinforces the intention to defy binding judicial directions. 4.6 The Court observed that the Union's submissions in defence of the Act simply repeated contentions already examined and rejected in MBA V, including characterising prior directions as non-binding 'suggestions' and invoking 'policy' deference. 4.7 As to the numerous amendments by which tribunal provisions in sectoral statutes were superseded by the new Act, the Court held that, to the extent they route appointments and conditions of service through the unconstitutional scheme of Chapter II of the Tribunal Reforms Act, they suffer from the same infirmity. Conclusions 4.8 The Tribunal Reforms Act, 2021, insofar as it: * prescribes a minimum age of 50 years for appointment as Chairperson or Member of tribunals; * fixes a tenure of four years with age caps of 70/67; * requires the Search-cum-Selection Committee to recommend a panel of two names per post, leaving effective discretion with the executive; * equates allowances and benefits with those of equivalent civil servants, contrary to prior directions on HRA and housing; and * reenacts, in substance, provisions earlier struck down in MBA IV and MBA V without curing the defects; is unconstitutional as violative of separation of powers, judicial independence, Article 14 and the doctrine of constitutional supremacy. 4.9 These impugned provisions are struck down; the Act is held to be an impermissible legislative override and a repetition of already invalidated measures, 'old wine in a new bottle'. Issue 5 - Protection of existing appointees, interim regime, and National Tribunals Commission Legal framework (as discussed) 5.1 The Court referred to prior interim and final directions in Kudrat Sandhu and MBA IV and MBA V protecting tenure and conditions of service of existing tribunal members, and recognising legitimate expectations arising from appointments made under earlier frameworks. 5.2 It also recalled the repeated direction to establish an independent National Tribunals Commission to oversee appointments, administration and disciplinary matters of tribunals. Interpretation and reasoning 5.3 The Court held that stability of tenure and protection of vested rights of existing members are integral to judicial independence; promises and assurances given previously by the Attorney General and orders protecting tenure cannot be undermined by subsequent inconsistent executive action. 5.4 The Court found that appointments to the ITAT, whose recommendations were made by the SCSC in September 2019 and approved in October 2019, ought to have been made under the old regime pursuant to Rojer Mathew and the Attorney General's statement of 9 February 2018; issuing appointment orders in September and October 2021 subjecting them to the new truncated regime was inconsistent with those binding assurances. 5.5 The Court noted that similar anomalies may exist in other tribunals, and that such appointments must not be penalised by unilateral curtailment of tenure. 5.6 Given the repeated legislative-executive failure to enact a constitutionally compliant, stable tribunal framework, the Court considered it necessary to continue the application of MBA IV and MBA V as the controlling constitutional regime until Parliament enacts valid legislation. 5.7 The Court reaffirmed the necessity of a National Tribunals Commission as an institutional solution, beyond piecemeal directions, to safeguard tribunal independence and efficiency, and fixed a concrete time-frame for its establishment. Conclusions 5.8 The principles and directions laid down in MBA IV and MBA V shall continue to govern all aspects of tribunal appointments, qualifications, tenure, service conditions and allied matters until Parliament enacts fresh, constitutionally compliant legislation addressing the concerns repeatedly highlighted by the Court. 5.9 The Union of India is directed to establish a National Tribunals Commission within four months, conforming to the principles articulated in earlier judgments, ensuring independence from executive control, professional expertise, transparent processes and effective oversight. 5.10 The service conditions of all ITAT Members appointed by orders dated 11 September 2021 and 1 October 2021 shall be governed by the 'old Act and old Rules', i.e., by the parent statute and pre-Finance Act framework as preserved by Kudrat Sandhu and subsequent directions. 5.11 All appointments of tribunal Members and Chairpersons whose selection or recommendation by the Search-cum-Selection Committee was completed before the commencement of the Tribunal Reforms Act, 2021, but whose formal appointment notifications were issued thereafter, are protected; their tenure and service conditions will be governed by the parent statutes and the regime laid down in MBA IV and MBA V, and not by the truncated provisions of the Tribunal Reforms Act, 2021. 5.12 The writ petitions were disposed of in these terms; pending applications stood disposed of. A concurring opinion reiterated that the Act is merely a replica of the already struck down Ordinance.