Supreme Court Addresses Tribunal Independence and Member Appointments: Madras Bar Association vs. Union of India (27 November 2020)

Date of the Judgment: 27 November 2020

Citation: (2020) INSC 917

Judges: L. Nageswara Rao, J., Hemant Gupta, J., S. Ravindra Bhat, J.

Can tribunals, which are meant to provide quicker justice, truly be independent when their administration is controlled by the executive? The Supreme Court of India, in this case, once again grapples with this crucial question, addressing the rules governing the appointment and service conditions of tribunal members. This judgment is a sequel to the Constitution Bench decision in Rojer Mathew v. South Indian Bank Limited, focusing on the constitutional validity of the “Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020.” The core issue revolves around ensuring the independence of tribunals and safeguarding the judiciary from executive overreach. The judgment was authored by Justice L. Nageswara Rao, with Justices Hemant Gupta and S. Ravindra Bhat concurring.

Case Background

The case arises from a series of challenges to the structure and functioning of tribunals in India. Over the years, the Indian government has established various tribunals to handle specific types of disputes, aiming to reduce the burden on regular courts. However, concerns have been raised about the independence of these tribunals, particularly regarding the influence of the executive branch in their administration and appointments. The Madras Bar Association has been at the forefront of this litigation, consistently challenging provisions that undermine the judiciary’s independence.

The petitioner, Madras Bar Association, challenged the “Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020” (2020 Rules), arguing that they violate the principles of separation of powers and judicial independence. The petitioner contended that the rules did not adhere to previous Supreme Court judgments on the matter. The main points of contention included the composition of the Search-cum-Selection Committees, the eligibility criteria for members, their tenure, and the administrative control of the executive over the tribunals.

The respondents were the Union of India and other related entities who defended the 2020 Rules, asserting their validity and necessity for the efficient functioning of the tribunals.

Timeline

Course of Proceedings

The Madras Bar Association filed a writ petition challenging the 2020 Rules, arguing that they were inconsistent with previous Supreme Court rulings and violated the principles of judicial independence. Several other applications were filed by Bar Associations and Tribunal members, seeking clarification on the retrospective operation of the 2020 Rules and directions to fill vacant posts. The Supreme Court consolidated these matters, treating the Madras Bar Association’s writ petition as the lead case.

The Supreme Court had previously dealt with similar issues in cases like S.P. Sampath Kumar v. Union of India, L. Chandra Kumar v. Union of India, Union of India v. R. Gandhi, President, Madras Bar Association, and Madras Bar Association v. Union of India, and most recently in Rojer Mathew v. South Indian Bank Limited. These cases established the importance of judicial independence and the need for tribunals to be free from executive control. The 2020 Rules were challenged on the grounds that they did not adhere to the principles laid down in these earlier judgments.

Legal Framework

The legal framework for this case is rooted in the Constitution of India, particularly:

• Article 323-A: This article enables Parliament to constitute administrative tribunals for disputes related to the recruitment and service conditions of public servants.
• Article 323-B: This article allows the appropriate legislature to constitute tribunals for adjudication of disputes, complaints, or offences related to matters specified in Clause (2).
• Article 226 and 227: These articles vest the High Courts with the power of judicial review, which is considered part of the basic structure of the Constitution.

The case also involves the interpretation of the following statutes and rules:

• Administrative Tribunals Act, 1985: Enacted by Parliament in furtherance of Article 323A, for setting up administrative tribunals for adjudication of service disputes of public servants.
• Companies Act, 1956 and Companies Act, 2013: These acts provide for the constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
• Finance Act, 2017: This act amended certain statutes to provide for the merger of tribunals and conditions of service of chairpersons, members, etc. Section 184 of the Finance Act, 2017, empowers the Central Government to make rules regarding qualifications, appointment, term of office, salaries, and other conditions of service of tribunal members.
• “Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020”: The rules under challenge in this case, which deal with the qualification and appointment of members, procedure for inquiry into misbehavior, and other conditions of service.

The Supreme Court has consistently held that the power of judicial review vested in the High Courts and the Supreme Court is a part of the basic structure of the Constitution. Therefore, tribunals cannot act as substitutes for the High Courts, and their functioning is supplementary. All decisions of administrative tribunals are subject to scrutiny by a Division Bench of the respective High Courts.

Arguments

The arguments presented before the Supreme Court highlighted several critical issues concerning the independence and functioning of tribunals. Here’s a breakdown of the main arguments:

Arguments of the Petitioner (Madras Bar Association)

• Search-cum-Selection Committees: The petitioner argued that the composition of the Search-cum-Selection Committees, as provided in the 2020 Rules, did not ensure judicial dominance. The inclusion of Secretaries from the sponsoring departments was seen as a violation of the principle of separation of powers and previous court judgments.
• Appointment of Non-Judicial Members: The petitioner contended that appointing individuals without judicial experience to the posts of Judicial Members, Presiding Officers, and Chairpersons contravened earlier Supreme Court rulings.
• Term of Office: The petitioner argued that the four-year term of office for members was contrary to previous Supreme Court decisions, which had recommended a minimum of five years.
• Exclusion of Advocates: The petitioner raised concerns about the exclusion of advocates from eligibility for appointment to most tribunals and the restrictive conditions imposed on their eligibility.
• Executive Control: The petitioner asserted that the administrative control of the executive in matters relating to appointments and conditions of service violated the principles of separation of powers and judicial independence, demonstrating a lack of application of mind.

Arguments of the Respondents (Union of India)

• Composition of Selection Committees: The respondents argued that the Search-cum-Selection Committees were appropriately constituted, with the Chief Justice of India or his nominee as Chairperson. They also stated that the inclusion of Secretaries to the Government was necessary for administrative efficiency. They proposed to include a casting vote for the Chairperson to ensure judicial dominance.
• Term of Office: The respondents submitted that the four-year term was adequate, especially given the provision for re-appointment. They argued that this would allow younger, eligible lawyers to serve on tribunals.
• Eligibility of Advocates: The respondents initially defended the exclusion of advocates, stating it was a matter of policy to bring parity with members of the Indian Legal Service. However, they later agreed to amend the rules to make advocates with 25 years of experience eligible.
• Retrospective Application: The respondents argued that the 2020 Rules should apply retrospectively from 26 May 2017, the appointed day under the Finance Act, 2017.

Arguments of the Amicus Curiae

• National Tribunals Commission: The Amicus Curiae stressed the need for a National Tribunals Commission to ensure the independence of tribunals and to free them from executive control. He proposed a commission manned by retired judges and members from the executive with a full-time secretary.
• Term of Office: The Amicus Curiae argued for a minimum term of five years for tribunal members, with a right of re-appointment.
• Eligibility of Advocates: The Amicus Curiae suggested that advocates with 15 years of experience should be eligible for appointment as judicial members, rather than the proposed 25 years.
• Removal of Members: The Amicus Curiae argued that the Search-cum-Selection Committee should have the final say in disciplinary matters, and the Central Government should not further scrutinize their reports.
• Time Limit for Appointments: The Amicus Curiae emphasized the need for timely appointments to tribunals to ensure speedy justice.

Submissions Categorized by Main Arguments

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the Search-cum-Selection Committees provided for in the 2020 Rules conformed to the principles of judicial dominance.
2. Whether the appointment of persons without judicial experience to the posts of Judicial Members/Presiding Officer/Chairpersons was in contravention of earlier judgments of the Court.
3. Whether the term of office of the Members for four years was contrary to the earlier decisions of the Court.
4. Whether advocates were being unfairly excluded from appointment to most of the Tribunals.
5. Whether administrative control of the executive in matters relating to appointments and conditions of service was violative of the principles of separation of powers and independence of the judiciary.
6. Whether the 2020 Rules could be applied retrospectively.

Treatment of the Issue by the Court

The following table demonstrates how the Court addressed the issues:

Authorities

The Supreme Court relied on several cases and legal provisions to reach its decision. These authorities are categorized by the legal point they address:

Judicial Independence and Separation of Powers

Tenure of Members

Eligibility of Advocates

Retrospective Application of Rules

Relevant Legal Provisions

• Section 183 of the Finance Act, 2017: This section states that the rules made under Section 184 shall apply to the members of the tribunals from the appointed day.
• Section 184 of the Finance Act, 2017: This section empowers the Central Government to make rules for the qualification, appointment, term of office, salaries, and other conditions of service of tribunal members.

Judgment

The Supreme Court’s judgment addressed each of the submissions made by the parties and clarified the legal position regarding the composition and functioning of tribunals.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court relied on several authorities to support its reasoning. Here’s how key authorities were used:

• S.P. Sampath Kumar v. Union of India [1987] 1 SCC 124: The Court reiterated the principle that tribunals should be real substitutes for High Courts and emphasized the need for competent appointments.
• L. Chandra Kumar v. Union of India (1997) 3 SCC 261: The Court reaffirmed that the power of judicial review of High Courts is a basic feature of the Constitution and that tribunals cannot act as substitutes for High Courts.
• Union of India v. R. Gandhi, President, Madras Bar Association (2010) 11 SCC 1: The Court upheld the importance of independent judicial tribunals for the rule of law and directed amendments to ensure the independence of tribunals.
• Madras Bar Association v. Union of India (2014) 10 SCC 1: The Court reiterated that judicial independence is paramount and the executive should not interfere in the appointment process.
• Madras Bar Association v. Union of India (2015) 8 SCC 583: The Court reiterated that judicial independence is paramount and the executive should not interfere in the appointment process.
• Rojer Mathew v. South Indian Bank Limited (2020) 6 SCC 1: The Court relied on this case to emphasize the need for tribunals to be free from executive control and to reiterate that the 2017 Rules were unconstitutional.
• Hinds v. R (1976) 1 All ER 353 (PC): The Court used this case to underscore that the legislature cannot transfer jurisdiction from judicial offices to new tribunals without ensuring that the appointment process is consistent with judicial independence.
• Sri Vijayalakshmi Rice Mills v. State of A.P. (1976) 3 SCC 37: The Court cited this case to support its ruling that delegated legislation cannot be given retrospective effect unless the parent statute permits it.
• ITO v. M.C. Ponnoose (1969) 2 SCC 351: The Court cited this case to support its ruling that delegated legislation cannot be given retrospective effect unless the parent statute permits it.

The Court also considered the relevant legal provisions, including Section 183 and 184 of the Finance Act, 2017, and Article 217(2) of the Constitution of India.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the need to ensure the independence of tribunals and to protect the judiciary from executive overreach. The Court emphasized that tribunals, which perform functions similar to courts, must be free from any direct or indirect interference from the executive branch. The following points weighed heavily in the mind of the Court:

• Judicial Independence: The Court was deeply concerned about the lack of judicial dominance in the Search-cum-Selection Committees and the potential for executive influence in the appointment and functioning of tribunals. The Court stressed that tribunals must be perceived as independent judicial bodies to inspire public confidence.
• Separation of Powers: The Court emphasized the importance of maintaining the separation of powers between the executive and the judiciary. It noted that the executive’s control over appointments and conditions of service for tribunal members was a violation of this principle.
• Efficiency and Effectiveness of Tribunals: The Court recognized that tribunals were established to provide speedy justice and reduce the burden on regular courts. However, the Court noted that the lack of qualified personnel, short tenures, and inadequate infrastructure were hindering the effective functioning of these tribunals.
• Consistency with Previous Judgments: The Court was keen to ensure that its current judgment was consistent with its previous rulings on the matter, particularly those related to judicial independence and the composition of selection committees.
• Need for Qualified Members: The Court emphasized the importance of having qualified and experienced individuals as members of tribunals, particularly those with judicial experience and expertise in the relevant field.

The Court aimed to strike a balance between the need for efficient administration and the imperative of maintaining judicial independence, ensuring that tribunals function as effective and credible adjudicatory bodies.

Decision

The Supreme Court’s decision was a comprehensive effort to address the deficiencies in the 2020 Rules and to ensure the independence and effectiveness of tribunals. The Court’s decision can be summarized as follows:

• Composition of Search-cum-Selection Committees: The Court directed that the Search-cum-Selection Committees should include the Chief Justice of India or his nominee as Chairperson, a judicial member of the tribunal (or a retired judge), and two secretaries, with the secretary of the parent department acting as convener without a vote. The Chairperson was given a casting vote.
• Appointment of Non-Judicial Members: The Court reiterated that appointments to judicial posts in tribunals should be made with a focus on judicial experience and competence.
• Term of Office: The Court directed that the term of office for chairpersons and members should be five years, with the possibility of re-appointment. It also specified that the age limit for members should be 67 years.
• Eligibility of Advocates: The Court ruled that advocates with at least 10 years of experience should be eligible for appointment as judicial members.
• Executive Control: The Court emphasized the need for tribunals to be free from executive control and directed the establishment of a National Tribunals Commission.
• Retrospective Application of Rules: The Court held that the 2020 Rules would have prospective effect from the date of their notification (12 February 2020).
• Time Limit for Appointments: The Court directed that appointments to tribunals should be made within three months of the Search-cum-Selection Committee’s recommendations.

The Court also directed the Central Government to establish a National Tribunals Commission to oversee the functioning of tribunals and to ensure their independence. The Court’s decision was aimed at bringing the 2020 Rules in line with the principles of judicial independence, separation of powers, and the need for efficient and effective tribunals.

Flowchart of the Decision-Making Process

Conclusion

The Supreme Court’s judgment in Madras Bar Association vs. Union of India (2020) is a landmark decision that reinforces the importance of judicial independence and the separation of powers in the context of tribunals. The Court’s detailed analysis of the 2020 Rules and its directives for their amendment reflect a deep concern for the integrity and effectiveness of the judicial system. The establishment of a National Tribunals Commission is a significant step towards ensuring the long-term independence and efficiency of tribunals in India. This judgment serves as a reminder that tribunals, which are designed to provide quick and efficient justice, must be free from executive influence and must adhere to the highest standards of judicial independence. The Court’s decision is likely to have a lasting impact on the structure and functioning of tribunals in India, ensuring that they serve as credible and effective adjudicatory bodies.