TaxTMI 
TaxTMI 
2021 (10) TMI 885
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....r, Amish Tandon, Ayush Beotra, Abhinav Mishra, Uddhav Khanna, Dipin Tamang, Akshay Joshi, K.C. Kaushik, Ms. Bhuvneshwari Pathak, Ms. Shilpi Satyapriya Satyam, Pankaj Singh, Ms. Ranjana Singh, Rupesh Kumar, Ms. Neelam Sharma, Ms. Pankhuri Shrivastava, Nidad Laud, Sahil Tagotra, Alekshendra Sharma, Kaushik Mishra, Kiran Patel, Ms. Viapsha Singh, R. Gowrishankar, Gourav Agrawal, Chritarth Palli, Rajeev Sharma, Pravesh Bahuguna, P.B. Suresh and Sai Kaushal N., Advocates, for the appearing Parties. JUDGMENT [Judgment per : L. Nageswara Rao, J.]. - The Madras Bar Association has filed this Writ Petition seeking a declaration that Sections 12 and 13 of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 and Sections 184 and 186(2) of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 as 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 this Court in Union of India v. R. Gandhi, President, Madras Bar Association [(201....
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....t for competent persons to seek appointment as Members. 4. The correctness of the judgment of this Court in S.P. Sampath Kumar (supra) was considered by a Larger Bench of this Court in L. Chandra Kumar v. Union of India & Ors. [(1997) 3 SCC 261 = 1997 (92) E.L.T. 318 (S.C.)] which found the exclusion of the jurisdiction of the High Courts and the Supreme Court in Articles 323A and 323B to be unconstitutional. This Court declared that Tribunals shall continue to act like Courts of first instance in respect of areas of law for which they have been constituted. 5. A High-Level Committee on law relating to insolvency of companies was constituted by the Union of India under the Chairmanship of Justice V. Balakrishna Eradi, retired Judge of this Court who made certain recommendations for setting up the National Company Law Tribunal (hereinafter referred to as NCLT) combining the powers of the Company Law Board under the Companies Act, 1956 (hereinafter referred to as the 1956 Act), BIFR and AAIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 and the jurisdiction and powers relating to winding up vested in the High Courts. The Government accepted the r....
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....;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. According to Section 183, provisions of Section 184 applied to the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal and other specified authorities, notwithstanding anything to the contrary contained in the provisions of the statutes listed in Column (3) of the Eighth Schedule. The Central Government was empowered by Section 184 to make rules to provide for qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of the Chairperson and Vice-Chairperson (and commensurate positions bearing different nomenclature) and other Members. As per the first proviso, the Chairperson, Vice-Chairperson (and commensurate positions bearing different nomenclature) or Member of the Tribunal shall hold office for such term as may be specified by the rules....
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....ent in Madras Bar Association v. Union of India & Anr. [(2020) SCC Online SC 962 = 2020 (374) E.L.T. 817 (S.C.)] (hereinafter referred to as MBA-III) disposed of the writ petition by issuing the following directions : "53. The upshot of the above discussion leads this Court to issue the following directions : (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 provided for in Column (4) of the Schedule to the 2020 Rules with the Chief Justice of India or his nominee, outgoing or sitting Chairman or Chairperson or Preside....
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....her members of the Tribunals. If providing housing is not possible, the Union of India shall pay the Chairman or Chairperson or President and Vice-Chairman, Vice-Chairperson, Vice President of the Tribunals an amount of Rs. 1,50,000/- per month as house rent allowance and Rs. 1,25,000/- per month for other members of the Tribunals. This direction shall be effective from 1-1-2021. (vi) The 2020 Rules shall be amended to make advocates with an experience of at least 10 years eligible for appointment as judicial members in the Tribunals. While considering advocates for appointment as judicial members in the Tribunals, the Search-cum-Selection Committee shall take into account the experience of the Advocate at the bar and their specialization in the relevant branches of law. 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 t....
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....sp; 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 12-2-2020 shall be governed by the parent statutes and Rules as per which they were appointed. The 2020 Rules shall be applicable with the modifications directed in the preceding paragraphs to those who were appointed after 12-2-2020. While reserving the matter for judgment on 9-10-2020, we extended the term of the Chairpersons, Vice-Chairpersons and members of the Tribunals till 31-12-2020. In view of the final judgment on the 2020 Rules, the retirements of the Chairpersons, Vice-Chairpersons and the members of the Tribunals shall be in accordance with the applicable Rules as mentioned above." 9. 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 st....
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....Mr. Krishnan Venugopal, Learned Senior Counsel. 11. Mr. Arvind P. Datar, Learned Amicus Curiae, made the following submissions : (i) The Ordinance is violative of the rule of separation of powers which forms part of the basic structure of the Constitution. The Ordinance is liable to be struck down as being violative of another basic feature of the Constitution, i.e., independence of the judiciary. (ii) Reversal of judgments which are not in accord with the Government's views undermines the judiciary, violating the supremacy of the Constitution. (iii) Stipulation of a minimum age limit of 50 years for appointment is contrary to the directions given in the judgments of this Court in MBA-I, Rojer Mathew (supra) and MBA-III. (iv) The provisos to Section 184(1) fixing the allowances and benefits payable to the Members to the extent as admissible to Central Government officers holding a post carrying the same pay is unsustainable and requires to be set aside. (v) &n....
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..... He submitted that Mr. Pati left his employment as an Additional District Judge and joined as Member (Judicial). Mr. Sidharth Luthra, Learned Senior Counsel, submitted that Mrs. Rachna Gupta who is at present working as Member (Judicial) has resigned as District Judge. He requested this Court to permit the Members, CESTAT and other Tribunals to continue till 62 years as directed by this Court in its judgment in Kudrat Sandhu v. Union of India [W.P. No. 279 of 2017] [2018 (359) E.L.T. 625 (S.C.)]. Mr. Krishnan Venugopal, Learned Senior Counsel appearing for Advocates' Association, Bengaluru, which was interested in appointments being made to the posts of Judicial and Accountant Members of the ITAT, submitted that pursuant to the advertisement issued on 6-7-2018 inviting applications to 37 posts of Members (Judicial)/(Accountant) in the ITAT, 650 applications were filed. The candidates between the age of 35 years and 50 years were eligible according to the advertisement. Interviews were held between May-September, 2019. Appointments to the post of Accountant Members were made but the Judicial Members were not appointed. He submitted that there are few persons who are below 50 years ....
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....mes being sent for each post by the Selection Committee, the Learned Attorney General stated that the recommendations are subject to inquiry by the Intelligence Bureau (IB) and in case the selected candidate is found to be not suitable, there should be an alternative. Therefore, it was decided that at least two names should be recommended by the Selection Committee for each post. The Government is also interested in filling up the vacant posts in the Tribunals and the stipulation of taking a decision preferably within three months does not mean that the Government will not act with alacrity. 15. Mr. Balbir Singh, Learned Additional Solicitor General defended the retrospectivity given to Section 184(11) by arguing that the defect pointed out by the judgment of MBA-III has been cured by the Ordinance. It was held in MBA-III that the 2020 Rules came into force on the date of their notification, i.e., 12-2-2020. Further, it was held that subordinate legislation cannot be given retrospective operation unless authorized by the parent legislation. By the Ordinance, the Finance Act has been amended and retrospective effect has been given to Section 184(11). Any judgment or orders p....
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....trates. He argued that there is no liberty, if the judicial power is not separated from the legislative and executive. He further noted that there would be an end of everything, were the same man or same body, whether of the nobles or of the people, to exercise those three powers, that of enacting laws, that of executing the public resolutions, and of trying the causes of individuals. 19. The Federalist Papers were written by Alexander Hamilton, James Madison, and John Jay under the collective pseudonym "Publius" to promote the ratification of the United States Constitution. James Madison dealt with the particular structure of the new government and the distribution of powers among its different parts in Federalist No. 47 and separation of the departments not having constitutional control over each other in Federalist No. 48. The structure of the Government furnishing proper checks and balances between different departments was the subject matter of Federalist No. 51. 20. All powers of Government - legislative, executive and judicial - result in the legislative body. The concentration of these powers in the same hands is precisely the definition of despotic Governme....
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....ough, there is no rigid separation of governmental powers between the executive, legislative and judiciary, it is clear from the above judicial pronouncements and literature that separation of powers forms part of the basic structure of the Constitution. 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. Independence of the Judiciary 23. Alexander Hamilton wrote in The Federalist No. 78 as follows : "The complete independence of the courts of justice is peculiarly essential in a limited Constitution. By a limited Constitution, I understand one which contains certain specified exceptions to the legislative authority; such, for instance, that it shall pass no bills of attainder, no ex post facto laws, and the like. Limitations of this kind can be preserved in practice in no other way than through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void. Without this, all the reservations of particular rights or privileges would amoun....
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.... In his address dated 24-5-1949, Dr. B.R. Ambedkar stated that :- "There can be no difference of opinion in the House that our judiciary must be both independent of the executive and must also be competent in itself. And the question is how these two objects can be secured". 26. Article 50 of the Constitution of India provides that the State shall take steps to separate the judiciary from the executive in the public services of the State. The concept of separation of judiciary from executive cannot be confined only to the subordinate judiciary, totally discarding the higher judiciary. If such a narrow and pedantic or syllogistic approach is made and a constricted construction is given, it would lead to an anomalous position that the Constitution does not emphasise the separation of higher judiciary from the executive [Supreme Court Advocates-on-Record Association & Ors. v. Union of India - (1993) 4 SCC 441]. Article 50, occurring in a chapter described by Granville Austin as "the conscience of the Constitution" in his work titled 'The Indian Constitution : Cornerstone of a Nation', underlines the importance given by the Constitution-makers to immunize the judi....
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....o 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) [MBA-I]. The independence of an individual Judge, that is, decisional independence; and independence of the judiciary as an institution or an organ of the State, that is, functional independence are the broad concepts of the principle of independence of the judiciary/Tribunal [Supreme Court Advocates-on-Record Association & Anr. v. Union of India (2016) 5 SCC 1]. 30. Individual independence has various facets which include security of tenure, procedure for renewal, terms and conditions of service like salary, allowances, etc. which should be fair and just and which should be protected and not varied to his/her disadvantage after appointment. Independence of the institution refers to sufficient degree of separation from other branches of the Government, especially when the branch is a litigant or one of the parties before the Tribunal. Functional independence would include method of selection and qualifications prescribed, as independence begins with appointment of persons of cal....
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.... solemn mockery..." 34. In Brown v. Board of Education of Topeka [347 U.S. 483 (1954)], the United States Supreme Court held that the Fourteenth Amendment forbids states to use governmental powers to bar children on racial grounds from attending school where there is states' participation through any arrangement, management, funds or property. The Governor or legislature cannot declare that they are not bound by the judgment mentioned above. The Board of Little Rock's Central High School suspended its plan to do away with desegregation in public schools. The said action of the school was rejected by the District Court which was affirmed by the Court of Appeal. There was an amendment to the Arkansas Constitution pursuant to which a law was made relieving school children from compulsory attendance at racially mixed schools. The school filed a petition in the District Court seeking postponement of the programme of desegregation. The District Court allowed the writ petition. The Court of Appeal reversed the decision of the District Court which was affirmed by the United States Supreme Court in Cooper v. Aaron [358 U.S. 1 (1958)]. It was held therein that the constitutional righ....
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....is of the judgment of the Supreme Court in Dickerson wherein the author wrote that the desire to rule on the constitutionality of the law simply does not justify the Courts raising it sua sponte. He opined that the Fourth Circuit and ultimately the Supreme Court violated the separation of powers by considering § 3501 over the objection of the executive branch. In Dickerson, the justice department informed the Supreme Court that it was not invoking § 3501 and that it could not use the confession only if the Court found that Miranda warnings were not properly administered. In spite of the submission made by the justice department, the Fourth Circuit ruled on the admissibility of the confession on the basis of § 3501. Chemerinsky argues in his article that the judiciary exceeded its jurisdiction in considering § 3501 when none of the parties raised the issue. 36. Justice Scalia speaking for the majority in Plaut v. Spendthrift Farm, Inc. [514 U.S. 211 (1995)] referred to earlier judgments of the United States Supreme Court which held that a judicial decision becomes the last word of the judicial department with regard to a particular case or controversy, an....
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....er and an ordinance shall have the same force as an Act, an ordinance should be clothed with all the attributes of an Act of legislature carrying with it all its incidents, immunities and limitations under the Constitution. It is settled law that judicial review of an ordinance should be akin to that of legislative action [R.K. Garg v. Union of India & Ors. - (1981) 4 SCC 675; T. Venkata Reddy & Ors. v. State of Andhra Pradesh - (1985) 3 SCC 198; Krishna Kumar Singh & Anr. v. State of Bihar & Ors. - (2017) 3 SCC 1]. 39. The controversy that arises for the consideration of this Court relates to the legislative response to the judgment of this Court in MBA-III. The power to strike down primary legislation enacted by the Union of India or the State legislatures is on limited grounds. The Courts can strike down legislation either on the basis that it falls foul of federal distribution of powers or that it contravenes fundamental rights or other constitutional rights/provisions of the Constitution of India [Binoy Vishwam v. Union of India & Ors. (2017) 7 SCC 59]. Where there is challenge to the constitutional validity of a law enacted by the legislature, the Court must keep in v....
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....tter brought before it shall be deemed to be ineffective and the interpretation of the law shall be otherwise than as declared by the Court [Janapada Sabha Chhindwara v. Central Provinces Syndicate Ltd. & Anr. - (1970) 1 SCC 509]. The test of judging the validity of the amending and validating enactment is, whether the legislature enacting the validating statute has competence over the subject-matter; whether by validation, the said legislature has removed the defect which the Court had found in the previous laws; and whether the validating law is consistent with the provisions of Part III of the Constitution [I.N. Saksena v. State of Madhya Pradesh - (1976) 4 SCC 750; Indian Aluminium Co. & Ors. v. State of Kerala & Ors. - (1996) 7 SCC 637; Bakhtawar Trust & Ors. v. M.D. Narayan & Ors. - (2003) 5 SCC 298]. In State of Tamil Nadu v. State of Kerala & Anr. (supra), this Court held that any law enacted by the legislature may be invalidated if it is an attempt to interfere with judicial process by being in breach of the doctrine of separation of powers. 42. The judgment of this Court in Madan Mohan Pathak & Anr. v. Union of India & Ors. [(1978) 2 SCC 50] requires a close scrut....
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....invalid. In view of the difference of opinion, the matter was referred to a Larger Bench. We are informed by the Leaned Amicus Curiae that the difference of opinion could not be resolved as the case was settled out of Court. 43. In Virender Singh Hooda (supra), this Court did not accept the contention of the petitioners therein that vested rights cannot be taken away by retrospective legislation. However, it was observed that taking away of such rights would be impermissible if there is violation of Articles 14, 16 or any other constitutional provision. The appointments already made in implementation of a decision of this Court were protected with the reason that "the law does not permit the legislature to take away what has been granted in implementation of the Court's decision. Such a course is impermissible." This Court in Cauvery Water Disputes Tribunal [1993 Supp. (1) SCC 96 (2)] declared the ordinance which sought to displace an interim order passed by the statutory Tribunal as unconstitutional as it set aside an individual decision inter partes and therefore, amounted to a legislative exercise of judicial power. When a mandamus issued by the Mysore High Court was sou....
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....the separation of powers, the rule of law and independence of the judiciary. He argued that the principle of independence of the judiciary can be traced to Article 14 of the Constitution and the Ordinance is liable to be struck down as being violative of the equality clause. The Learned Amicus Curiae relied upon the judgments of this Court to submit that the impugned Ordinance is a classic case of law laid down by this Court being overturned by the legislature unreasonably. Responding to the submissions of the Learned Attorney General that deference has to be shown by Courts to the policy decisions of the executive and the legislature, the Learned Amicus Curiae argued that deference has to be shown to the reasons of the policy and not the policy itself. The Learned Attorney General asserted that the law laid down by this Court is not the final word as it is settled that the Parliament can legislate by curing the defects pointed out by the Court. The Learned Attorney General stated that legislation is made after the decision undergoes detailed deliberations at various levels in the Government and the legislature. The collective wisdom of the Parliament cannot be interfered with by t....
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....nbsp; in the case of Chairperson, Chairman [President or the Presiding Officer of the Securities Appellate Tribunal], the age of seventy years; (b) in the case of Vice-Chairperson, Vice-Chairman, Vice-President, Presiding Officer [of the Industrial Tribunal constituted by the Central Government and the Debts Recovery Tribunal] or any other Member, the age of sixty-seven years : 47. The amendment to Section 184 by the Ordinance is as follows : 184. (1) The Central Government may, by notification, make rules to provide for the qualifications, appointment, salaries and allowances, resignation, removal and the other conditions of service of the Chairperson and Members of the Tribunal as specified in the Eighth Schedule : Provided that a person who has not completed the age of fifty years shall not be eligible for appointment as a Chairperson or Member : Provided further that the allowances and benefits so payable shall be to the extent as are admissible to a Central Government officer holding the post carrying the same pay : Provided also that where the Chairperson or Member ....
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....f that Tribunal; and (d) the Secretary to the Government of India in the Ministry or Department under which the Tribunal is constituted or established - Member-Secretary. (4) The Chairperson of the Committee shall have the casting vote. (5) The Member-Secretary of the Committee shall not have any vote. (6) The Committee shall determine its procedure for making its recommendations. (7) Notwithstanding anything contained in any judgment, order or decree of any Court or in any law for the time being in force, the Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member, as the case may be, and the Central Government shall take a decision on the recommendations of the Committee preferably within three months from the date on which the Committee makes its recommendations to the Government. (8) No appointment shall be invalid merely by reason of any vacancy or absence in the Committee. (9) The Chairperson and Member of a Tribunal shall be eligible for re-appointment in accordance with the provisions of this secti....
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....old office for a term of four years or till he attains the age of sixty-seven years, whichever is earlier : Provided that where a Chairperson or Member is appointed between the 26th day of May, 2017 and the notified date and the term of his office or the age of retirement specified in the order of appointment issued by the Central Government is greater than that which is specified in this section, then, notwithstanding anything contained in this section, the term of office or age of retirement or both, as the case may be, of the Chairperson or Member shall be as specified in his order of appointment subject to a maximum term of office of five years. 48. The first proviso of Section 184(1) provides minimum age for appointment as Chairperson or Member as 50 years. One of the issues considered in MBA-III was the correctness of the condition 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. The Learned Attorney General fairly submitted in his arg....
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.... affront to the judgment of this Court in MBA-III. This Court in MBA-I and Roger Mathew (supra) underlined the importance of recruitment of Members from the bar at a young age to ensure a longer tenure. 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 renumeration and security of tenure. Therefore, the first proviso to Section 184(1) is in violation of the doctrine of separation of powers as the judgment of this Court in MBA-III has been frustrated by an impermissible legislative override. Resultantly, the first proviso to Section 184(1) is declared as unconstitutional as it is violative of Article 14 of the Constitution. Selections conducted for appointment of ....
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....so, is an affront to the judgment of this Court in MBA-III. By no stretch of imagination can it be said that the said provisos are a result of curative legislation. The direction issued by this Court in MBA-III 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. A mandamus issued by this 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) is declared as unconstitutional. 51. It has come to our notice that after the judgment in this Writ Petition had been reserved on 3-6-2021, a notification was issued by the Ministry of Finance (Department of Revenue) on 30-6-2021 amending the 2020 Rules. By Rule 6 of the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) (Amendment) Rules, 2021 (hereinafter referred to as the 2021 Amendment Rules), the following rule was substituted for Rule 15 of the 2020 Rules : "15. ....
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....can be restricted to two instead of three. To limit the discretion of the executive after the SCSC has recommended names of selected candidates, this Court in the interest of preserving independence of the judiciary, directed that Rule 4(2) should be read as empowering SCSC to recommend the name of only one person to each post. 53. The Learned Attorney General asserted that this Court cannot direct the legislature to make law. He relied upon the judgment in Dr. Ashwani Kumar v. Union of India & Anr. [(2020) 13 SCC 585] wherein it was held that it is beyond the competence of this Court to direct legislature to make law. There is no quarrel with the said proposition. The Learned Attorney General further asserted that the direction given by this Court in MBA-III relating to the number of candidates to be recommended for appointment to each post can only be taken to be a suggestion. The Court, as a wing of the State, by itself is a source of law. The law is what the Court says it is. To clarify the position relating to Article 141 vis-à-vis Article 142, it has been held by this Court in Ram Pravesh Singh & Ors. v. State of Bihar & Ors. [(2006) 8 SCC 381] that directions ....
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....Government shall make appointments to Tribunals within three months from the completion of the selection and recommendation by the SCSC. Such direction 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 Tribunals which are constituted as an alternative mechanism for speedy resolution of disputes have become non-functional due to the large number of posts which are kept unfilled for a long period of time. Tribunals have become ineffective vehicles of administration of justice, resulting in complete denial of access to justice to the litigant public. The conditions of service for appointment to the posts of Chairpersons and Members have been mired in controversy for the past several years, thereby, adversely affecting the basic functioning of Tribunals. This Court is aghast to note that some Tribunals are on the verge of closure due to the absence of Members. The direction given by this Court for expediting the process of appointment was in the larger interest of administration of justice and to uphold the rule of law. Section 184(7) as amended b....
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....rement specified in the order of appointment issued by the Government is greater than what is specified in Section 184(11), the term of office or the age of retirement of the Chairperson or Members shall be as specified in the order of appointment subject to a maximum term of office of five years. In other words, 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 has a higher term of office or age of retirement which may involve the term of office being more than 5 years in practice. It is necessary at this stage to deal with the validity of retrospective effect given to sub-section (11) of Section 184. The Learned Amicus Curiae canvassed a submission that Sections 184(1) to (10) are prospective in operation and Section 184(11) is given retrospective effect from 26-5-2017, thereby leading to an anomalous situation. He submitted that sub-section (11) is made with the object of reversing the interim orders passed by this Court in Kudrat Sandhu v. Union of India (supra). He stated that the terms and conditions of appointments to be made to the Tri....
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....184(11) being given retrospective effect, the appointments made pursuant to the interim directions passed by this Court cannot be interfered with. This Court in Virender Singh Hooda (supra) upheld the retrospectivity of the legislation which had been challenged but the appointment of the petitioners therein pursuant to a direction of the Court were saved. It was held that the law does not permit the legislature to take back what has been granted in the implementation of the Court's decision and such a course is impermissible. Similarly, in S.R. Bhagwat (supra), it was declared that a mandamus against the respondent-State giving financial benefits to the petitioners therein cannot be nullified by a legislation. It is also relevant to point out that even interim orders passed by this Court cannot be overruled by a legislative act, as discussed above. While making it clear that the appointments that are made to the CESTAT on the basis of interim orders passed by this Court shall be governed by the relevant statute and the rules framed thereunder, as they existed prior to the Finance Act, 2017, we uphold the retrospectivity given to the proviso to Section 184(11). To clarify further, a....
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....dence of the litigant public in impartial justice being administered by Tribunals need to be restored. 60. The Writ Petition is disposed of accordingly. 61. [per : Hemant Gupta, J.]. - I have gone through the detailed judgment authored by Justice L. Nageswara Rao as also separate but concurring judgment of Justice Ravindra Bhat, but I am unable to persuade myself to agree with the views expressed therein except to the limited extent that part of Section 187(7) of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 [For short, the 'Ordinance'] that the Search and Selection Committee shall recommend two names for a post and that the tenure of members including Chairperson etc. shall be four years in terms of Clauses (i) and (ii) of Section 184(11) of the Ordinance is illegal since the issues of constitution of panel and tenure have already been decided in MBA-III and that without removing such defect, the Ordinance could not be enacted. 62. Before I advert to the grounds of challenge, some of well-established and settled principles of the applicability of the principles of interpretation need to be recapitulated. (i) The p....
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....a Rao v. State of Karnataka, (2002) 4 SCC 578] held that the primary function of the judiciary is to interpret the law. It may lay down principles, guidelines and exhibit creativity in the field left open and unoccupied by legislation [Ibid (Para 25)]. The Court while interpreting Articles 32, 21, 141 and 142 of the Constitution held that prescribing periods at which criminal trial would terminate resulting in acquittal or discharge of the accused or making such directions applicable to all cases in present or in future would amount to judicial law making and cannot be done by judicial directives. The Courts can declare law, interpret law, remove obvious lacunae and fill up the gaps but they cannot entrench upon in the field of legislation [Ibid (Para 27)]. The bars of limitation were deleted by this Court on two grounds, first, it amounts to judicial legislation which was not permissible and secondly, it runs counter to the doctrine of binding precedents [Ibid (Para 33)]. 68. The Constitution Bench of this Court [A.K. Roy v. Union of India & Ors., (1982) 1 SCC 271 (Para 51)] held that a writ of mandamus cannot be issued to bring Section 3 of the 44th Constitutional Amendme....
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....ciary has the authority to test the validity of legislation. Legislation can be invalidated where the enacting legislature lacks legislative competence or where there is a violation of fundamental rights. A law which is constitutionally ultra vires can be declared to be so in the exercise of the power of judicial review. Judicial review is indeed also a part of the basic features of the Constitution. Entrustment to the judiciary of the power to test the validity of law is an established constitutional principle which co-exists with the separation of powers. Where a law is held to be ultra vires there is no breach of parliamentary privileges for the simple reason that all institutions created by the Constitution are subject to constitutional limitations. The legislature, it is well settled, cannot simply declare that the judgment of a court is invalid or that it stands nullified. If the legislature were permitted to do so, it would travel beyond the boundaries of constitutional entrustment. While the separation of powers prevents the legislature from issuing a mere declaration that a judgment is erroneous or invalid, the law-making body is entitled to enact a law which remedies the ....
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.... clause (2). Thus, clause (1) confers freedom of speech on the legislators within the legislative chamber and clause (2) makes it plain that the freedom is literally absolute and unfettered. 40. Our legislatures have undoubtedly plenary powers, but these powers are controlled by the basic concepts of the written Constitution itself and can be exercised within the legislative fields allotted to their jurisdiction by the three Lists under the Seventh Schedule; but beyond the Lists, the legislatures cannot travel. They can no doubt exercise their plenary legislative authority and discharge their legislative functions by virtue of the powers conferred on them by the relevant provisions of the Constitution; but the basis of the power is the Constitution itself. Besides, the legislative supremacy of our legislatures including the Parliament is normally controlled by the provisions contained in Part III of the Constitution. If the legislatures step beyond the legislative fields assigned to them, or acting within their respective fields, they trespass on the fundamental rights of the citizens in a manner not justified by the relevant articles dealing with the said fundamental....
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....atute, inter alia, in view of the principles that the Court while interpreting a provision cannot generally add word to a statute in view of doctrine of Casus Omissus. 74. A Constitution Bench [Padma Sundara Rao (Dead) & Ors. v. State of T.N. & Ors., (2002) 3 SCC 533 (Para 9)] of this Court has held that Courts should not place reliance on decisions without discussing as to how the factual situation of the matter fits in with the factual situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case. This Court further held as under : "12. The rival pleas regarding rewriting of statute and casus omissus need careful consideration. It is well-settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the in....
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.... (Para 9)] has observed that judgments are not to be construed as statutes. The words or phrases in judgments are not to be interpreted like provisions of a statute. The words in a judgment should be read and understood contextually and not intended to be taken literally. Such interpretation has been followed by a two Judge Bench of this Court [Arasmeta Captive Power Company Private Limited & Anr. v. Lafarge India Private Limited, (2013) 15 SCC 414 (Para 32)] wherein it was held that the ratio of any decision must be understood in the background of the facts of that case. 78. In another recent judgment [Shanti Bhushan v. Supreme Court of India & Anr., (2018) 8 SCC 396], it was held that the ratio of a judgment is what it decides and not what logically follows therefrom. The Court held as under : "31. It is trite that ratio of a judgment is what it decides and not what logically follows therefrom. The observations in the Three Judges cases [Supreme Court Advocates-on-Record Assn. v. Union of India, (1993) 4 SCC 441] [S.P. Gupta v. Union of India, 1981 Supp SCC 87] [Special Reference No. 1 of 1998, In re, (1998) 7 SCC 739] are to be read in the context in which ....
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....-III were in respect of separation of powers and independence of judiciary in the matter of constitution of Search and Selection Committee; appointment of persons without judicial experience as Judicial Members; failure to provide proper technical specialized expertise; failure to provide for adequate tenure of members; exclusion of advocates for being appointed as members of Tribunals; continuing role of the parent department in Search and Selection Committee; the preliminary inquiry by the Central Government for removal of the members is invalid and the Executive's continuing administrative and financial control over the Tribunals. 82. The directions of this Court which are at variance with the Ordinance are as follows : "53. The upshot of the above discussion leads this court to issue the following directions : (i) xxx            xxx (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 ins....
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....rms 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 12-2-2020 shall be governed by the parent statutes and Rules as per which they were appointed. The 2020 Rules shall be applicable with the modifications directed in the preceding paragraphs to those who were appointed after 12-2-2020. While reserving the matter for judgment on 9-10-2020, we extended the term of the Chairpersons, Vice-Chairpersons and members of the Tribunals till 31-12-2020. In view of the final judgment on the 2020 Rules, the retirements of the Chairpersons, Vice-Chairpersons and the members of the Tribunals shall be in accordance with the applicable Rules as mentioned above." 83. The arguments were concluded on 3rd June, 2021 but before we could finalize our views, the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) (Amendment) Rules, 2021 stands notified on 30th June, 2021. The Search and....
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....taka Cauvery Basin Irrigation Protection Ordinance, 1991 on 25-7-1991. In pursuance of the order passed by this Court in a writ petition, the Tribunal by way of an interim order directed the State of Karnataka to release water from its reservoirs to ensure 205 TMC is available in Tamil Nadu's Mettur reservoir in a year from June to May vide its order dated 25-6-1991. It is thereafter the Ordinance in dispute was promulgated. It is the said interim order which was sought to be nullified by enactment of the Ordinance, later substituted by an Act by the State of Karnataka. This Court held as under: "73. The Ordinance is unconstitutional because it affects the jurisdiction of the Tribunal appointed under the Central Act, viz., the Inter-State Water Disputes Act which legislation has been made under Article 262 of the Constitution. As has been pointed out above, while analysing the provisions of the Ordinance, its obvious purpose is to nullify the effect of the interim order passed by the Tribunal on June 25, 1991. The Ordinance makes no secret of the said fact and the written statement filed and the submissions made on behalf of the State of Karnataka show that since acco....
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....e Kerala High Court or by this Court. It was not a case of removal of a defect in existing law. Various Constitution Bench decisions of this Court have settled the principles of law governing the field. It passes comprehension how the State Government has promulgated the Ordinance in question". (Emphasis Supplied) 87. In S.R. Bhagwat, the petitioners were senior in the final seniority list but their juniors got promoted on the basis of higher ranking in the provisional seniority list which was earlier operative. The writ petitions were allowed wherein the petitioners were directed to be considered for promotion. In implementation of the said judgment, the State granted deemed dates of promotions but denied the consequential monetary benefits. The petitioners filed contempt petitions before the High Court. It was at that stage that an Ordinance was promulgated whereby payment of actual financial benefits was sought to be taken away. The said judgment is clearly not applicable to the facts of present case as the defect was not even attempted to be cured. The legislative action was to deny financial benefits arising out of a judgment, which had attained finality. In the pre....
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....um of Procedure adopted by the Collegium of this Court prescribed forty-five years of age as the minimum age. I find that eligibility to seek appointment is not solely dependent upon qualification of a candidate but experience and suitability, likely term which a candidate may have are necessary considerations. The relevant part from the memorandum of the collegium is reproduced as under : "17. A person shall not be eligible to be considered for appointment as Judge of a High Court against Bar quota, unless he has completed 45 years of age on the date of recommendation by the High Court Collegium." 92. In terms of the Constitution read with the Memorandum of Procedure adopted by this Court, an advocate would have maximum tenure of 17 years as a Judge of the High Court, may be another three years as Judge of this Court. On the other hand, an advocate appointed as member of a Tribunal can have a tenure of 17 years, even if 50 is the minimum age for appointment. The tenure of such member is up to the age of 67 years with the possibility of being appointed as the Chairperson. This is not to compare the status of a High Court Judge with that of a member of a Tribun....
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....be regarded as satisfying the essential requirements of an independent and impartial body exercising judicial functions of the State. xx       xx       xx 123. In the light of foregoing discussions it is declared that until the provisions in parts 1B and 1C of the Companies Act introduced by the Companies (Amendment) Act, 2002, which have been found to be defective inasmuch as they are in breach of the basic constitutional scheme of separation of powers and independence of the judicial function, are duly amended, by removing the defects that have been pointed out, it would be unconstitutional to constitute a Tribunal and Appellate Tribunal to exercise the jurisdiction now exercised by the High courts or the Company Law Board." 96. In an appeal against the said order, this Court in MBA-I noticed the contention of the Union as under : "11. The Union Government has accepted the finding and agreed to amend Sections 10FE and 10FT of the Act to provide for a five-year term for the Chairman/President/Members. However, the Government proposes to retain the provision for reappo....
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....l of compromising with standards which the 2010 judgment [(2010) 11 SCC 1] sought to achieve, nay, so zealously sought to secure. Thus, we hold that Sections 409(3)(a) and (e) are invalid as these provisions suffer from same vice. Likewise, Section 411(3) as worded, providing for qualifications of Technical Members, is also held to be invalid. For appointment of Technical Members to NCLT, directions contained in sub-paras (ii), (iii), (iv), (v) of para 120 of the 2010 judgment [(2010) 11 SCC 1] will have to be scrupulously followed and these corrections are required to be made in Section 409(3) to set right the defects contained therein. We order accordingly, while disposing of Issue 2." 100. In MBA-II, the age for appointment of members of the National Law Company Tribunal was fixed as fifty years. Same was not disputed by the present petitioner in the writ petition before the Madras High Court or before this Court. Therefore, the age of 50 years as the eligibility condition is not off the hat but is based upon previous legislation in respect of members of the National Company Law Tribunal. Thus, the fixation of fifty years of age as the eligibility condition cannot be sai....
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....abuse of a statute otherwise valid does not impart to it any element of invalidity. The converse must also follow that a statute which is otherwise invalid as being unreasonable cannot be saved by its being administered in a reasonable manner. The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed. If so judged it passes the test of reasonableness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Constitution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements." 102. Similar view was reiterated by this Court in number of judgments [Government of Andhra Pradesh & Anr. v. G. Jaya Prasad Rao & Ors., (2007) 11 SCC 528; People's Union for Civil Liberties & Anr. v. Union of India, (2004) 9 SCC 580; Charan Lal Sahu v. Union of India, (1990) 1 SCC 613]. In another judgment [Mehmood Alam Tariq & Or....
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....ion to avail of accommodation to be provided by the Central Government as per the rules for the time being in force or entitled to house rent allowance subject to a limit of Rs. one lakh fifty thousand rupees per month and the Members shall have option to avail of accommodation to be provided by the Central Government as per the rules for the time being in force or entitled to house rent allowance subject to a limit of Rs. one lakh twenty-five thousand rupees per month with effect from the 1st January, 2021. Therefore, the directions issued stands complied with. 106. As a matter of fact, there is a common grievance of the members of the Bar and the litigating parties other than from Delhi that there is a concentration of Tribunals in Delhi which deprives the advocates from other parts of the country to deal with the matters entrusted to the Tribunals. It is also expensive for the litigants to engage professional services in Delhi, which is out of capacity for a large section of the society. In fact, because of housing scarcity and expensive professional services, it will be open to the Government/legislature to shift the Principal Benches of the certain Tribunals outside De....
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....rdinance, 1975 was thereafter promulgated in September, 1975. The Payment of Bonus Act was not applicable to the Life Insurance Corporation by virtue of Section 32 of the said impugned Act. This Court found that the impugned Act did not set at naught the entire settlement relating to payment of annual cash bonus of Class III and Class IV employees and that too from April, 1 1975. Since the settlement had attained finality as the same was approved by the Board of Directors as well as by the Central Government, and that the Writ of Mandamus was issued by the Calcutta High Court to pay annual cash bonus to the employees, it was held that the judgment can be remedied by way of an appeal or review, but it cannot be disregarded or ignored and must be obeyed by Life Insurance Company. In S.S. Bola & Ors. v. B.D. Sardana & Ors. [(1997) 8 SCC 522], this Court explained the Judgment in Madan Mohan Pathak. It was found that inasmuch as six Hon'ble Judges out of seven rested their decision on the ground that the impugned Act violates Article 31(2) of the Constitution and did not consider the enactment in question to be an act of usurpation of judicial power by the legislature. It was held as u....
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.... Mohan Pathak v. Union of India [Madan Mohan Pathak v. Union of India, (1978) 2 SCC 50 : 1978 SCC (L&S) 103] ... From the observations made by Bhagwati, J. per majority, it is clear that this Court did not intend to lay down that Parliament, under no circumstance, has power to amend the law removing the vice pointed out by the court. Equally, the observation of Chief Justice Beg is to be understood in the context that as long as the effect of mandamus issued by the court is not legaly and constitutionaly made ineffective, the State is bound to obey the directions. Thus understood, it is unexceptionable. But it does not mean that the Learned Chief Justice intended to lay down the law that mandamus issued by court cannot at all be made ineffective by a valid law made by the legislature, removing the defect pointed out by the court." (Emphasis supplied) 84. Madan Mohan Pathak [Madan Mohan Pathak v. Union of India, (1978) 2 SCC 50 : 1978 SCC (L&S) 103] involved a situation where a parliamentary law was enacted to override a mandamus which was issued by the High Court for the payment of bonus under an industrial settlement. The case did not involve a situation where a l....
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.... adjudicated upon by this Court, which it is empowered to deal with, any unilateral law enacted by one of the parties that results in overturning the final judgment is bad not because it is affected by the principles of res judicata but because it infringes the doctrine of separation of powers and rule of law, as by such law, the legislature has clearly usurped the judicial power. xx       xx       xx 164. In light of the above legal position, if the 2006 judgment is seen, it becomes apparent that after considering the contentions of the parties and examining the reports of Expert Committee, this Court posed the issue for determination about the safety of the dam to increase the water level to 142 ft. and came to a categorical finding that the dam was safe for raising the water level to 142 ft. and, accordingly, in the concluding paragraph the Court disposed of the writ petition and the connected matters by permitting the water level of Mullaperiyar dam being raised to 142 ft. and also permitted further strengthening of the dam as per the report of the Expert Committee appointed by the CWC.....
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.... under : "7. It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied. Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post. Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies. However, it does not mean that the State has the licence of acting in an arbitrary manner. The decision not to fill up the vacancies has to be taken bona fide for appropriate reasons. And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted. This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in......." 116. The fact that the legislation has intervened to prescribe a particular age which is at variance with....
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....nal, or the Medical Council of India were the cases where the State Legislature had nullified interim orders simpliciter without even attempting to cure the defects. 120. The judgment in Virender Singh Hooda is quite different. The appellants before this Court were successful in an earlier round of litigation and were thus appointed. It was thereafter that the Act in question was enacted with retrospective effect. The appellants were falling in the first category out of three category of candidates such as (i) those who had been appointed in implementation of decision in Hooda and Sandeep Singh's cases before passing of the impugned Act (ii) those, though not so appointed, who have judgments of High Court passed in their favour relying upon Hooda and Sandeep Singh's cases, and claim a right to appointment but would be deprived of it if the validity of the Act is upheld and on that basis the judgments of the High Court upturned and (iii) those, who would be covered by law laid down in Hooda's case on interpretation and applicability of the aforenoted two circulars. This Court held as under : "47. There is a distinction between encroachment on the judicial power....
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....dates falling in the first category i.e., those who were appointed prior to the commencement of the Act in question. It was held as under : "68. Despite the aforesaid conclusion, the Act [proviso to Section 4(3)] to the extent it takes away the appointments already made, some of the petitioners had been appointed much before enforcement of the Act (ten in number as noticed hereinbefore) in implementation of this Court's decision, would be unreasonable, harsh, arbitrary and violative of Article 14 of the Constitution. The law does not permit the legislature of take back what has been granted in implementation of the court's decision. Such a course is impermissible." 122. The candidates in question were appointed during the pendency of lis. These appointments were not concluded ap­pointments but were subject to the provisions of the parent Act which has been amended by the Finance Act, 2017. They cannot claim any right to continue on the post till the age of retirement under the parent Act in terms of proviso to sub-section (11) of Section 184 of the Finance Act as substituted. The provisions of the parent Act cease to be in existence with the order pass....
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.... this in emphatic terms, whereas in others, there may be no single provision manifested in the constitution, but rather, the idea may emerge as a compelling inference - through the kind of assurances articulated by express provisions (tenure, eligibility, age of superannuation, conditions where removal is possible only through Parliamentary or legislative process, manner of appointment etc.). The Attorney General's assertion that since there is no single provision which expressly articulates independence of the judiciary, and that being the case, the Court cannot direct the length of tenure or other eligibility conditions which are in the domain of the executive, (which, as a co-equal organ of governance) is exclusively entitled to prescribe criteria for selection of Tribunal members, therefore, needs careful scrutiny. 127. The original constitution did not expressly - through any entry in the three legislative lists, deal with Tribunals. This field of legislation, creating Courts, was left to Parliament [Entries 77, 78 and 79, List I, Seventh Schedule to the Constitution of India] as well as the states [Entry 65, List II, Seventh Schedule to the Constitution of India]. The....
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....e issue was whether High Courts could be divested of their statutory appellate jurisdiction in tax disputes, which they had been exercising for over 80 years, to confer this jurisdiction on a new Tribunal whose membership was to be different from judges of High Courts. This Court then examined the applicability of the basic structure doctrine, of which independence of the judiciary and separation of powers have been held to be a part, and observed as follows : "113.2 We have given our thoughtful consideration to the submission advanced at the hands of the Learned Counsel for the petitioners insofar as the first perspective is concerned. We find substance in the submission advanced at the hands of the Learned Counsel for the petitioners, but not exactly in the format suggested by the Learned Counsel. A closer examination of the judgments relied upon lead us to the conclusion, that in every new Constitution, which makes separate provisions for the legislature, the executive and the judiciary, it is taken as acknowledged/conceded that the basic principle of "separation of powers" would apply. And that, the three wings of governance would operate in their assigned domain/....
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....fied, that the aforesaid exposition of law is in consonance with the position expressed by this Court while dealing with the concepts of "separation of powers", the "rule of law" and "judicial review". In this behalf, reference may be made to the judgments in L. Chandra Kumar case [L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S) 577] , as also, in Union of India v. Madras Bar Assn. [Union of India v. Madras Bar Assn., (2010) 11 SCC 1] Therein, this Court has recognised that transfer of jurisdiction is permissible but in effecting such transfer, the court to which the power of adjudication is transferred must be endured with salient characteristics, which were possessed by the court from which the adjudicatory power has been transferred. In recording our conclusions on the submission advanced as the first perspective, we may only state that our conclusion is exactly the same as was drawn by us while examining the petitioners' previous submission, namely, that it is not possible for us to accept that under recognised constitutional conventions, judicial power vested in superior courts cannot be transferred to coordinate courts/tribunals. The answer is, that such....
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....re-promulgation "represents an effort to overreach the legislative body which is a primary source of law-making authority in a parliamentary democracy." The Court pointed out that : "The danger of re-promulgation lies in the threat which it poses to the sovereignty of Parliament and the State Legislatures which have been constituted as primary law-givers under the Constitution. Open legislative debate and discussion provides sunshine which separates secrecy of Ordinance-making from transparent and accountable governance through law-making." 132. In a decision of the Privy Council (which has been cited and approved by decisions of this Court, including in Kesavananda Bharati v. State of Kerala [1973 Supp. SCR 1] viz, Liyanage v. The Queen [(1967) 1 AC 259, 287-288] the compulsive, though inarticulate premise of these principles was elaborated in the following manner : "What, however, is implicit in the very structure of a Constitution on the Westminster model is that judicial power, however it be distributed from time to time between various courts, is to continue to be vested in persons appointed to hold judicial office in the manner and on the terms laid ....
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....ourt may draw a line which the executive may not cross in their misguided desire to take over bit by bit and (sic) judicial functions and powers of the State exercised by the duly constituted courts. While creating new avenue of judicial forums, it is the duty of the Government to see that they are not in breach of basic constitutional scheme of separation of powers and independence of the judicial function. We agree with the apprehension of the petitioner that the provisions of the Prevention of Money-Laundering Act are so provided that there may not be independent judiciary to decide the cases under the Act but the members and the Chairperson to be selected by the Selection Committee headed by Revenue Secretary. 10. It is to be noted that this Court in L. Chandra Kumar v. Union of India [(1997) 3 SCC 261 : 1997 SCC (L&S) 577] has laid down that the power of judicial review over legislative action vested in the High Courts under Article 226 as well as in this Court under Article 32 of the Constitution is an integral and essential feature of the Constitution constituting part of its (sic basic) structure. The Constitution guarantees free and independent judiciary and ....
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....ext phase, where amendments were proposed to the Companies Act, 1956 to set up a National Company Law Tribunal, this Court, by the Constitution Bench decision in Union of India v. R. Gandhi [(2010) 11 SCC 1 = 2010 (261) E.L.T. 3 (S.C.)] again found several provisions of enacted Parliamentary law to be objectionable - they are related to tenure, manner of appointment, qualifications of members etc. Likewise, in Madras Bar Association v Union of India (MBA-I) (supra), the complete divesting of High Courts' jurisdiction under tax enactments (income tax, customs, central excise and service tax etc.) and parliamentary setting up of a National Tax Court was held to be unconstitutional. Here again, the court highlighted the quality of justice expected from such bodies and underlined that the divestment of such jurisdiction was prohibited by the Constitution. Madras Bar Association [(2015) 8 SCC 583] ("MBA-II") considered the amended provisions of the Companies Act and proceeded to pronounce that many of them could not pass muster of the Constitution. Once again, as in R. Gandhi (supra), this Court was concerned with the likely impact on the nature of the justice delivery mechanism envisio....
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...., this Court would apply a searching scrutiny standard in its judicial review to ensure that the new body, Court, Tribunal, commission or authority created to adjudicate (between citizens and government agencies or departments, citizens and citizens, or citizens and corporate entities) are efficient, efficacious and inspire public confidence. The role of Courts in considering a provision of law setting up adjudicatory bodies, was recognized in R.K. Jain v. Union of India [1993 (3) SCR 802 = 1993 (65) E.L.T. 305 (S.C.)] in the following terms : "The faith of the people is the bed-rock on which the edifice of judicial review and efficacy of the adjudication are founded. The alternative arrangement must, therefore, be effective and efficient. For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Govt. To maintain independence and impartiality it, is necessary that the personnel should have at least modicum of legal training, learning and experience. Selection of competent and proper people instil people's faith and trust in the office an....
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....nder a statutory regime such as telecom or electricity laws etc., consumer disputes, liability to banks and financial institutions, and so on. 140. Parliament has, over the years, created several Tribunals and commissions which exercise judicial functions that would ordinarily fall within the jurisdiction of Courts; they would also have been subjected to the supervisory jurisdiction of High Courts under Article 227. This gradual "hiving off" of jurisdiction from the Courts, therefore, calls for a careful and searching scrutiny to ensure that those who approach these bodies are assured of the same kind and quality of justice, infused with what citizens expect from Courts, i.e., independence, fairness, impartiality, professionalism and public confidence. These considerations are relevant, given that "policy" choices adopted by the executive or legislature in the past, when it concerned dispensation of justice through Courts, were the subject matter of scrutiny under judicial review by Courts. 141. In the exercise of such judicial review, in the past, this Court has ruled that High Courts have a decisive say in matters of recruitment, promotion and conditions of servic....
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.... ecosystem of administration of justice, and essentially discharge judicial functions, this Court is equally concerned with the qualifications, eligibility for appointment, procedure for selection and appointment, conditions of service, etc. of their members. This Court's concern, therefore, is unlike any other subject matter of judicial review. It cannot be gainsaid that if tenures of Tribunals' members are short: say two years, or if their salaries are pegged at unrealistically low levels, or if their presiding members are given no administrative control or powers, the objective of efficient, fair, and impartial justice delivery would be defeated. It cannot then be argued that each of these are "policy" matters beyond the Court's domain. 143. Ordinarily in pure "policy" matters falling within Parliamentary or executive domain, such as economic, commercial, financial policies, or other areas such as energy, natural resources etc., this Court's standard of judicial review is deferential. In almost all subject matters over which legislative bodies enact law, the wisdom of the policy is rarely questioned; it is too well recognised that in such matters, judicial review extends....
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.... enactment [Income Tax Act, 1961, Customs Act, 1962, Securities and Exchange Board of India Act, 1992, Electricity Act, 2003, etc.], which set out the eligibility conditions for appointments to various Tribunals, with the exception of appointment as members to the National Company Law Tribunal, for which, candidates should have completed 50 years to be eligible for appointment, apart from the prescribed eligibility and condition criteria. Such age criteria was not enacted under the provisions of the Finance Act, 2017; nor was it introduced in the 2017 Rules (which were invalidated by Rojer Mathew). An indirect age barrier, for the first time was introduced in the 2020 Rules framed under the Finance Act, 2017, in the form of the requirement of otherwise qualified advocates and chartered accountant candidates having to possess 25 years of practice. This Court held that requirement to be untenable, and directed it to be suitably amended. In response, as it were, for the first time, the 50-year minimum age requirement has been enacted in the parent enactment (Finance Act, 2017) through amendment by the impugned Ordinance. The justification given for this age requirement or qualificatio....
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....of such eligible candidates in preference to those who are more than 50 years of age is inexplicable and therefore entirely arbitrary. As this Court in its previous judgment (Rojer Mathew) has pointed out in another context, the exclusion of such young and energetic legal practitioners could result in not so efficient or competent practitioners left in a field for consideration which would have telling effects on the quality of decisions they are likely to render. 146. Prescribing 50 years' minimum age as a condition for appointment to these Tribunals is arbitrary also because absolutely no reason is forthcoming about what impelled Parliament to divert from the long-established criteria of giving weightage to actual practice, reputation, integrity and subject expertise, without a minimum age criterion, in the pleadings in this case, nor in any other cases (R. Gandhi-MBA-I; Madras Bar Association-III and Rojer Mathew). Such being the case, it is astonishing that in the span of a year (i.e. after the decision in Roger Mathew) "new thinking" seems to have prevailed to frame rules excluding advo­cates who can otherwise, based on their expertise, be considered for appointmen....
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....efore, must be truly founded on substantial differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved." 150. Similarly, in Mohd. Shujat Ali v. Union of India [1975 (3) SCC 76] this Court cautioned against over-classification, based on artificial distinctions between two categories falling within the same class, in matters of public employment : "To permit discrimination based on educational attainments not obligated by the nature of the duties of the higher post is to stifle the social thrust of the equality clause. A rule of promotion which, while conceding that non-graduate Supervisors are also fit to be promoted as Assistant Engineers, reserves a higher quota of vacancies for promotion for graduate Supervisors as against non-graduate Supervisors, would clearly be calculated to destroy the guarantee of equal opportunity." 151. Given that the essential educational qualifications and experience in the relevant field are fixed for all candidates, for a classification based on minimum age for appointment (like in the presen....
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....ent subject to just exceptions is recognised by Article 16 of the Constitution. Right of employment itself may not be a fundamental right but in terms of both Articles 14 and 16 of the Constitution of India, each person similarly situated has a fundamental right to be considered therefor. **           **           ** 56. Young men who take a degree or diploma in hotel management enter into service at the age of 22 years or 23 years. It, thus, cannot prohibit employment of men below 25 years. Such a restriction keeping in view a citizen's right to be considered for employment, which is a facet of the right to livelihood does not stand judicial scrutiny." 153. In this Court's decision in Lt. Col. Nitisha & Ors. v. Union of India [2021 SCC OnLine SC 261], a reference was made to a US statute - the Age Discrimination in Employment Act, 1967 and the US Supreme Court decision in Smith v. City of Jackson [544 US 228 (2005)] which dealt with discrimination based on age. The relevant provisions of the said enactment proscribe age discrimination in rega....
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....ck's Law Dictionary 1233 (5th ed. 1979), emphasizes the importance of avoiding the taint. So much for the individual terms used in §633a(a). What really matters for present purposes is the way these terms relate to each other. Two matters of syntax are critical. First, "based on age" is an adjectival phrase that modifies the noun "discrimination." It does not modify "personnel actions." The statute does not say that "it is unlawful to take personnel actions that are based on age"; it says that "personnel actions ....... shall be made free from any discrimination based on age." §633a(a). As a result, age must be a but-for cause of discrimination-that is, of differential treatment-but not necessarily a but-for cause of a personnel action itself. Second, "free from any discrimination" is an adverbial phrase that modifies the verb "made." Ibid. Thus, "free from any discrimination" describes how a personnel action must be "made," namely, in a way that is not tainted by differential treatment based on age. If age discrimination plays any part in the way a decision is made, then the decision is not made in a way that is untainted by such discrimination. This is the straightforwa....
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....from a hat [An expression used in an analogous context, while declaring a cut-off date to be arbitrary, in D.R. Nim v. Union of India - 1967 (2) SCR 325]" and wholly arbitrary. 156. As stated earlier, the Tribunals which were reorganized by the Finance Act, 2017 and now, through the impugned ordinance, exercise judicial functions of the State, interpret and enforce the law, in the course of adjudication of disputes. As repeatedly emphasized by this court in previous Constitution Bench judgments, appointment of members (of such Tribunals), their conditions of service, manner of selection, remuneration and security of tenure are vital to their efficiency and independent functioning. It is in this backdrop that the Union's contention regarding "equivalence" or "parity" with members of the civil services of the Union or holders of civil posts under the Union, as a justification for the age criterion, needs to be examined. 157. This Court in All India Judges' Assn. (II) v. Union of India [(1993) 4 SCC 288], held that : "9. So much for the contention of the review petitioners that the directions given by this Court would lead to the demand from the members o....
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....sistent with the constitutional provisions. As pointed out earlier, the parity in status is no longer between the judiciary and the administrative executive but between the judiciary and the political executive. Under the Constitution, the judiciary is above the administrative executive and any attempt to place it on a par with the administrative executive has to be discouraged. The failure to grasp this simple truth is responsible for the contention that the service conditions of the judiciary must be comparable to those of the administrative executive and any amelioration in the service conditions of the former must necessarily lead to the comparable improvement in the service conditions of the latter." 158. In addition, it is worthwhile to recollect that a civil servant's experience, though varied and diverse - ranging from co-ordination and administration at taluk, district and State levels, to devising, framing and implementing the government's policies and programmes, to managing statutory corporations and even commercial enterprises of the State, does not always entail adjudicatory functions. However, legal practitioners, chartered accountants and one segment of civi....
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....s been clarified in at least two judgments of this Court. They are not governed by Article 311 of the Constitution, nor are their conditions of service laid out in rules framed under the proviso to Article 309 of the Constitution. Such being the position, the argument of parity, in the opinion of the Court, is entirely devoid of merit. Nor is the argument of the Attorney General that a uniform age is necessary, merited. There is no material to show that members recruited on the technical side, such as experts in engineering, scientific or other technical fields would be suitable only after they cross the age of 50. In fact, one can complete a doctoral thesis and become a holder of a Ph.D at the time that she or he is 30 years or even below. To be a professor, one has to possess 10 years teaching experience; there is no minimum age under the relevant regulations framed by the UGC. Even non-teaching personnel, on the basis of their research, can be designated professors. As on date, there are vice-chancellors in some state and national universities who had not completed 45 years at the time of appointment. Such being the position, experience in the field either in the academic, techn....
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....msp;    **           ** (vi) The 2020 Rules shall be amended to make advocates with an experience of at least 10 years eligible for appointment as judicial members in the Tribunals. While considering advocates for appointment as judicial members in the Tribunals, the Search-cum-Selection Committee shall take into account the experience of the Advocate at the bar and their specialization in the relevant branches of law. 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." 161. The Union of India had not made any move to give effect to the above directions. The declaration of law in MBA-III recorded in an earlier part of the decision, that advocates in all Tribu....
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....rnment servants, which would have entitled them to the revised pay scale. The Court held : "53. (...) The legislature is undoubtedly competent to legislate with retrospective effect to take away or impair any vested right acquired under existing laws but since the laws are made under a written Constitution, and have to conform to the do's and don'ts of the Constitution neither prospective nor retrospective laws can be made so as to contravene Fundamental Rights. The law must satisfy the requirements of the Constitution today taking into account the accrued or acquired rights of the parties today. The law cannot say, twenty years ago the parties had no rights, therefore, the requirements of the Constitution will be satisfied if the law is dated back by twenty years. We are concerned with today's rights and not yesterday's. A legislature cannot legislate today with reference to a situation that obtained twenty years ago and ignore the march of events and the constitutional rights accrued in the course of the twenty years. That would be most arbitrary, unreasonable and a negation of history. It was pointed out by a Constitution Bench of this Court in B.S. Yadav and Ors. ....
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....n this section, the term of office or age of retirement or both, as the case may be, of the Chairperson or Member shall be as specified in his order of appointment subject to a maximum term of office of five years." 165. The interim directions of this Court, which culminated and were subsumed in Roger Mathew (supra), resulted in the appointment of members of various Tribunals, whose term is now sought to be interdicted by the proviso to Section 184(11), which has been introduced with retrospective effect. I agree with Rao, J. that while the retrospectivity accorded to this provision cannot be faulted, nevertheless, the said proviso, to the extent it seeks to interfere with and curtail the tenure of members appointed under interim orders, who are entitled to enjoy their term of office, in accordance with the pre-amended legislation and rules, is arbitrary and void. As held in Raman Lal (supra), "(t)oday's equals cannot be made unequal by saying that they were unequal twenty years ago and we will restore that position by making a law today and making it retrospective". In a manner somewhat reminiscent of the facts of this case, an interim order, enjoining the employer, All In....
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....it by Article 14 of the Constitution. Similarly in the present case, the impugned proviso to Section 11(1A) itself states that it is carrying out premature termination of the tenure of the writ petitioner. It is also admitted that such a premature termination is without following the safeguards of justifiable reasons and notice. It is thus a case similar to D.S. Reddi [D.S. Reddi, Vice-Chancellor, Osmania University v. Chancellor, AIR 1967 SC 1305 : (1967) 2 SCR 214] and other decisions cited above that the impugned legislation is hit by Article 14 as it creates an unreasonable classification between the writ petitioner and the future Directors and deprives the writ petitioner of the principles of natural justice without there being any intelligible differentia. 166. In my opinion, like in P. Venugopal (supra) the curtailment of tenure to five years, of these few individuals appointed as members of Tribunals, who were entitled to continue in office in terms of the pre-existing enactments (upto the age of 62 years etc.) is arbitrary. Apart from the fact that the Union wishes to curtail their tenure despite the finality of directions of this Court in Roger Mathew and MBA-III,....
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....ailable at http://www.cgatnew.gov.in/writereaddata/Delhi/docs/RTI/list.pdf (last accessed on 20-6-2021)]. Over 48,000 cases are pending disposal at the CAT, with over 28,000 cases pending for 1-5 years [Available at https://theprint.in/india/ governance/purpose-of-central-administrative-tribunal-far-from-being-achieved-parliamentary-panel/378156/ (last accessed on 20-6-2021)]. As on 1-3-2021, 72,452 cases were pending before various Benches of the CESTAT. Out of a total strength of 26, 18 positions are filled, and 8 vacancies are still open in the 9 Benches of the CESTAT [Available at https://cestatnew.gov.in/uploads/writereaddata/ Delhi/docs/pendency 022021.pdf (last accessed on 20-6-2021)]. At the Income Tax Appellate Tribunal (ITAT), only 66 members are in office, out of a sanctioned strength of 126 [See https://itat.gov.in/ page/content/members (last accessed on 21-6-2021.], and a total of about 88,000 appeals are pending. 24,000 are pending before the Delhi Bench, followed by about 16,000 before the Mumbai Bench [Available at https://www. business-standard.com/article/pti-stories/88-000-appeals-pending-before-income-tax-app-ellate-tribunal-chairman-120022601297 1.html (last ac....