TaxTMI 
TaxTMI 
2021 (9) TMI 1499
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....as they are complimentary to each other. Whenever the principle of proportionality is violated, the effect would be disastrous. It follows that, greater the power attached to any post, stricter the criteria must be for appointment to such post. The posts to which the Rules under challenge here apply, are the posts governed by this principle. 2. In these two petitions the grievance revolves around the criteria adopted for selection of President and Members of the State Commission and District Commission, constituted under the Consumer Protection Act 2019 (for short 'the Act of 2019'), which according to the petitioners, is not analogous to the function and powers of Commissions, under the Act of 2019. 3. The facts giving rise to both these petitions, are as follows: The Ministry of Consumer Affairs, Food and Public Distribution, New Delhi in exercise of the power conferred under Sections 29 and 43 read with clauses (n) and (w) of sub-section 2 of Section 101 of the Act of 2019, framed Rules, vide notification dated 15th July, 2020, called as Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignati....
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....on Committee shall conduct a written test and viva voce of the candidate before making recommendation for the post of President and the Member of the District Commission and the State Commission of State of Maharashtra. C. During pendency of this Petition, be pleased to restrain the Respondent from appointing any person on the post of the President and the member of the District Commission and the State Commission as per advertisement dated 2.2.2021 without conducting a written test and viva voce in view of the judgment of the Honourable Supreme Court of India in State of UP vs. UP Consumer Protection Bar Association, the Honourable Supreme Court approved the Model Rules of Order dated 18.05.2018 and dated 21.11.2016. C. Ad-interim relief in terms of prayer clause(c). D. Any other suitable and equitable relief may kindly be granted in favour of the petitioners, in the interest of justice and facts and circumstances of the case. Whereas, in the Writ Petition No. 1096 of 2021 the following prayers are made: i) Quash and set aside the said Rules 2020 framed under Section 101 of the Consumer Protection Act, 2019 (ANNEXURE-P-2) dated 15.07.2020 mad....
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....ed as 'UPCPBA'). Thus, he submits that the Rule 6(9) of the Rule 2020 is ultra virus. 11. It is submitted that looking at the judicial functions to be performed by President and Members of the District and State Commissions constituted under the Act of 2019, the selection without holding written examination, but, only on the basis of viva-voce, would result into selection of unsuitable candidates which will further result in denial of justice. 12. Dr. Uday Warunjikar, learned counsel for the petitioner further submits that no justification has been offered by the respondents for not following uniform process across country, for appointments, as directed by the Hon'ble Supreme Court of India in the case of UPCPBA. 13. The learned counsel for the petitioner, fairly concedes that in absence of any challenge raised to the appointment of the President of the State Consumer Dispute Redressal Commission, State of Maharashtra, which was made during the pendency of the petition, he does not want to raise any grievance about the same. 14. Shri Mandlekar, learned counsel for the petitioner appearing in Writ Petition No. 1096 of 2021, reiterated the contentions raised b....
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....iews of all the candidates who are eligible for these posts. Therefore, the Selection Committee decided to take written exam of the candidates through an agency which is on Government Panel. 18. It is further pointed out that considering the vacant posts, the Selection Committee has decided to take interviews of 125 candidates i.e. in 1:5 ratio, on merit as per the decision dated 9th July, 2021. By arguing so, he prays for dismissal of petition. 19. To consider the rival contentions of the parties, we have perused the record and gone through various relevant judgments. 20. Before touching on the challenge raised in these petitions, we are of the opinion that a brief reference to the historical background of Tribunalisation in India, is necessary for better understanding of the controversy. 21. In a democratic country like India, judicial functions and judicial powers constitute the essential attributes of a sovereign State and are entrusted to regularly established Courts by the Constitution of India through a pattern of common law system. There are constitutional rights, statutory rights, human rights and natural rights, protection and implementation of which depends o....
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....ubstance as well as form and be certain that the hearing is conducted and the matter is disposed of with fairness, honesty, and impartiality. 28. The Constitution (42nd Amendment) Act of 1976 brought about a massive change in the adjudication of disputes in the Country. It has provided for the insertion of Articles 323-A and 323-B in the Constitution of India, whereby the goal of establishment of Administrative Tribunals by Parliament as well as State Legislature, to adjudicate the matters specified is made possible. 29. The statement of objects and reasons for insertion of Articles 323A and 323B show that it were to reduce the mounting arrears in High Courts and to secure the speedy disposal of service matters, revenue matters and certain matters of special importance in the context of the socio economic development and progress, it is considered expedient to provide administrative and other tribunals for dealing with such matters while presenting the jurisdiction to the Supreme Court in regard to such matters under Article 136 of the Constitution of India and to make certain modifications in writ jurisdiction of the High Court's under Article 226 of the Constitution of ....
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....4. In the case of Gujarat Urja Vikas Nigam Ltd. vs. Essar Power Limited 2016(9) SCC 103, the Hon'ble Supreme Court of India framed certain questions and requested the Law Commission to give its report on it. Accordingly, the Law Commission on 27th October, 2017 submitted its 272nd report titled as "Assessment of Statutory Frame Work of Tribunals in India", for consideration of Central Government. The questions and conclusions to each of the questions framed by the Hon'ble Supreme Court of India, are tabulated, as follows: Questions referred by the Hon'ble Supreme Court in the case of Gujarat Urju Vikas Nigam Ltd., Vrs. Essar Power Ltd., to be examined by the Law Commission Conclusion recorded by the Law Commission. I. Whether any changes in the statutory framework constituting various Tribunals with regard to persons appointed, manner of appointment, duration of appointment, etc. is necessary in the light of judgment of this Court in Madras Bar Association (Supra) or on any other consideration from the point of view of strengthening the rule of law? A. In case of transfer of jurisdiction of High Court to a Tribunal, the members of the newly constituted Tribunal ....
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....de only where the Tribunals are intended to serve an area which requires specialised knowledge or expertise or professional experience and the exercise of jurisdiction involves consideration of, and decisions into, technical or special aspects E. While making the appointments to the Tribunal, it must be ensured that the Independence in working is maintained. The terms and conditions of service, other allowances and benefits of the Chairman shall be such as are admissible to a Central Government officer holding posts carrying the pay of Rs.2,50,000/-, as revised from time to time. The terms and conditions of service, other allowances and benefits of a Member of a Tribunal shall be such as are admissible to a Central Government officer holding posts carrying the pay of Rs.2,25,000/-, as revised from time to time. The terms and conditions of service, other allowances and benefits of Presiding Officer/Member of a Tribunal (to which the jurisdiction and functions exercised or performed by the District Judges are transferred) shall be such as are admissible to a Central Government officer drawing the corresponding pay of a District Judge. F. Vacancy arising in the Tribunal sh....
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....every geographical area may have easy Access to Justice. Ideally, the benches of the Tribunals should be located at all places where the High Courts situate. In the event of exclusion of jurisdiction of all courts, it is essential to provide for an equally effective alternative mechanism even at grass root level. This could be ensured by providing Statelevel sittings looking to the quantum of work of a particular Tribunal. Once that is done, the access to justice will stand ensured. V. Any other incidental or connected issue which may be considered appropriate?' 35. Now, keeping in mind the above referred historical backdrop of Tribunalisation, we will move ahead to consider the controversy involved in this matter. 36. In the year 1986 the Consumer Protection Act (in short the 'Act of 1986') was enacted to provide for better protection of the interest of consumers and for the purpose of making provisions for establishing of consumer protection councils and other authorities for the settlement of consumer disputes etc.. 37. The issue relating to deficiencies relating to infrastructure in the adjudicatory fora constituted under the Act of 1986, had cropp....
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....of the respective fora in the domain areas referred to in the statutory provisions. The model rules shall provide for the payment of salary, allowances and for the conditions of service of the members of the consumer fora commensurate with the nature of adjudicatory duties and the need to attract suitable talent to the adjudicating bodies. These rules shall be finalized upon due consultation with the President of the National Consumer Disputes Redressal Commission, within the period stipulated above; (iv) Upon the approval of the model rules by this Court, the state governments shall proceed to adopt the model rules by framing appropriate rules in the exercise of the rule making powers under Section 30 of the Consumer Protection Act, 1986; (v) The National Consumer Disputes Redressal Commission is requested to formulate regulations under Section 30A with the previous approval of the Central Government within a period of three months from today in order to effectuate the power of administrative control vested in the National Commission over the State Commissions under Section 24(B)(1) (iii) and in respect of the administrative control of the State Commissions over ....
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....umerous Tribunals with lack of uniformity in the matter of qualification, appointments, tenure and service conditions is causing the major concern in effective working of the present Tribunal system. 45. In the 272nd report of the Law Commission, a need of uniformity in the appointment, tenure and service conditions for the Chairman, Vice-Chairman and Members appointed in Tribunals, has been expressed. 46. The Hon'ble Apex Court, in the case of UPCPBA, has observed that, the difficulty arises because of the vesting of the rule-making power in the State Government, resulting in a lack of uniformity of rules across the country, both in regard to the terms and conditions of service as well as in regard to the modalities to be followed in ensuring that persons appointed as members fulfill the qualifications which are prescribed. It is further noted that in the absence of a uniform pattern and transparency in selection, the result is of wide variation in standards with great deal of subjectivity, and bureaucratic and political interference creeping in. The Hon'ble Apex Court therefore, directed the State Governments to frame appropriate rules in exercise of Rule-making pow....
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....le of law and of Article 14 of the Constitution of India." 49. The Hon'ble Supreme Court of India in the case of MBA-2021 while dealing with the issue of importance of independence of judiciary, in its majority view has observed thus: 32. The constitutional mandate is that the legislature should adhere to the principles laid down in Part-IV of the Constitution of India while enacting legislations. No provision shall be made in legislative acts which would have the tendency of making inroads into the judicial sphere. Any such encroachment by the legislature would amount to violating the principles of separation of powers, judicial independence and the rule of law. Independence of courts from the executive and the legislature is fundamental to the rule of law and one of the basic tenets of the Indian Constitution. Separation of powers between the three organs i.e., the legislature, the executive and the judiciary, is a consequence of the principles of equality as enshrined in Article 14 of the Constitution. Any incursion into the judicial domain by the other two wings of the Government would, thus, be unconstitutional." 50. In the above referred back drop, it is im....
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.... it on merits.) Section 38(3) The District Commission shall, if the complaint admitted by it under sub-section (2) of section 36 relates to goods in respect of which the procedure specified in sub-section (2) cannot be followed, or if the complaint relates to any services,- (a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Commission; (b) if the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, it shall proceed to settle the consumer dispute (i) on the basis of evidence brought to its notice by the complainant and the opposite party, if the opposite party denies or disputes the allegations contained in the complaint, or (ii) ex parte on the basis of evidence brought to its notice by the complainant, where the opposite party omits or fails to take any action to represent his case within the ti....
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....ting, the reasons for the same at the time of disposing of the said complaint. Section 13 (3B) Where during the pendency of any proceeding before the District Forum, it appears to it necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case. Section 38 (8) Where during the pendency of any proceeding before the District Commission, if it appears necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case. Section 13(4) (4) For the purposes of this section, the District Forum shall have the same powers as are vested in a civil court under Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:- (i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath, (ii) the discovery and production of any document or other material object producible as evidence, (iii) the reception of evidence on affidavits, (iv) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source. (v) issuing of any commis....
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....y are proved, it shall issue an order to the opposite party directing him to do one or more of the following, namely......... Section 15 Appeal Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed: Section 41 Appeal against order of District Commission. Any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order, in such form and manner, as may be prescribed: Section 18 : Procedure applicable to State Commissions.- [The provisions of Sections 12, 13 and 14 and the rules made thereunder] for the disposal of complaints by the District Forum shall, with such modifications as may be necessary, be applicable to the disposal of disputes by the State Commission. Section 49 : Procedure applicable to State Commission. (1) The provisions relating to complaints under sections 35, 36, 37, 38 and 39 shall,with such modifications as may be n....
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....ommission, as the case may be, such trader or person ([or complainant] shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousands rupees but which may extend to ten thousand rupees, or with both: (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on such conferment of powers, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973 (2 of 1974). (3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission, as the case may be.) Section 72 : Penalty for noncompliance of order (1) Whoever fails to comply with any order made by the District Commission or the State ....
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....hat, after the enactment of Act of 2019 and Rules of 2020, the directions issued by the Hon'ble Supreme Court of India in the case of UPCPBA, have become non-operative or in-effective, relating to the need for having uniformity of rules across the country in regard to the modalities to be followed, ensuring that persons appointed fulfill the qualification prescribed, owing to any valid and justifiable reason. 56. Thus, it is amply clear that there is no change in legislative scheme or performance of judicial function of the State Commission or District Commission, constituted under the Act of 2019, as they were performing under the Act of 1986. Resultantly, we have no hesitation to hold that the directions issued by the Hon'ble Supreme Court of India in the case of UPCPBA, for having uniformity across the country in standards, selection and appointment of President and Members on Fora, are equally binding with full force, even after the enactment of the Act of 2019. 57. The Hon'ble Supreme Court of India, in the case of UPCPBA, has given sufficient reasons to have uniformity across the country as regards standards and modalities in appointments of Presidents and M....
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....MBA-2010, the Hon'ble Apex Court, has observed that the rule of law can be meaningful only if there is an independent and impartial judiciary to render justice. An independent judiciary can exist only when persons with competence, ability and independence with impeccable character man the judicial institutions. When the legislature proposes to substitute a tribunal in place of the High Court to exercise the jurisdiction which the High Court is exercising, it goes without saying that the standards expected from the judicial members of the Tribunal and standards applied for appointing such members, should be as nearly as possible as applicable to High Court Judges, which, apart from a basic degree in Law, are reflective of rich experience in the practice of law, independent outlook, integrity, character and good reputation. 62. As Justice Stephen Breyer (Supreme Court of the United States), writes:- "When you are a judgeit's important to be able to imagine what other people's lives might be like, lives that your decisions will affect. People who are not only different from you, but also very different from each other And this empathy, this ability to envision ....
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....fice" is essentially a public trust and therefore, it is expected that a judge must be a man of high integrity, honesty and shall possess several qualities including legal expertise, ability to handle cases, proper personal conduct and ethical behaviour and shall ensure impartiality, fairness and reasonableness in consideration. Whereas the technical member ensures the availability of expertise and experience related to the field of adjudication for which the Special Tribunal is created. 68. Having considered the importance of judicial function in people's lives and qualities which are needed to be possessed by a judge, we will now proceed to consider and examine the adverse effects of not having appropriate criteria for selection and uniformity in selection. 69. In this regard, the observations made by the Hon'ble Supreme Court of India, in the case of UPCPBA, are relevant, which depict a sorry state of affairs in the Fora, as under: a) The fora do not function as effective as expected. b) The quality of presiding members, especially of non-judicial members at the state and district levels is poor. c) Most of the non-judicial members are no....
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....f the Selection Committee when it determined its own procedure for selection. 73. The Hon'ble Supreme Court of India, in the case of MBA-2010 has held that the fundamental right to equality before law and equal protection of laws guaranteed by Article 14 of the Constitution, clearly includes a right to have the person's rights, adjudicated by a forum which exercises judicial power in an impartial and independent manner, consistent with the recognized principles of adjudication. The Apex Court in the said case further referred to the case of S.P. Sampath Kumar etc Vrs. Union of India and others (1987) 1 SCC 124, wherein it has held that where the prescription of qualification was found by the court, to be not proper and conducive for the proper functioning of the tribunal, it will result in invalidation of the relevant provisions relating to the constitution of the tribunal. If the qualifications/eligibility criteria for appointment fail to ensure that the members of the Tribunal are able to discharge judicial functions, the said provisions cannot pass the scrutiny of the higher the judiciary. 74. It is further held in the MBA-2010 that the legislature is presumed not ....
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.... written test, supports the case of the petitioner that looking at the judicial functions needed to be performed by the President and Members of District and State Commissions, the criteria for selection and appointment shall be applied as nearly as possible applicable to the judges in mainstream judiciary, exercising the similar powers. 79. Therefore, for the reasons recorded herein above, we have no hesitation to hold that Sub Rule (9) of Rule 6 of Rules of 2020, framed under the Act of 2019, is ultra vires, and violative of Article 14 of the Constitution of India. Consequently, we find substance in the contention of the petitioner that the advertisement dated 2nd February, 2021 published by the respondent no. 2 for the filling up of vacancies for the post of Members of State Commission and President and Members of District Commission, Maharashtra State, is arbitrary, unreasonable, ex-facie bad in law and violative of the directions issued by the Hon'ble Supreme Court of India in the case of MBA-2020 and MBA-2021 as well as in the case of UPCPBA. 80. Now, we would deal with the challenge made to the validity of Rules 3 and 4 of the Rules 2020. For the sake of convenienc....
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....f India, has repeatedly held that to have 10 years of experience in law and in other specialized fields as prescribed and stipulated under the statute, is sufficient for appointment as a judicial member in the Tribunal. 84. The Rules 3(2)(b) and 4(2)(c) of the Rules of 2020 to the extend prescribing a minimum experience of not less than 20 years for appointment of President and Members of State Commission and experience of not less than 15 years for appointment of Presidents and Members of District Commission under the Act of 2019, is an attempt to circumvent the directions issued in MBA-2020 and UPCPBA. Hence, they are arbitrarily, illegal and violates principle of equality before law. 85. In the circumstances, we have no hesitation to hold that the Rules 3(2)(b) and 4(2)(c) of the Rules of 2020 prescribing a minimum experience of not less than 20 years for appointment of President and Members of State Commission and experience of not less than 15 years for appointment of Presidents and Members of District Commission, are unconstitutional and violative of Article 14 of the Constitution of India. 86. During the pendency of the present petitions, the President of State Comm....