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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL/APPELLATE JURISDICTION

Writ Petition (C) No.804 of 2020

MADRAS BAR ASSOCIATION

...Petitioner

Versus

UNION OF INDIA & ANR.

...Respondents

WITH

Misc. Application No.1058 of 2020

In

Writ Petition (C) No.640 of 2017

Misc. Application No.1152 of 2020

In

Writ Petition (C) No. 279 of 2017

Writ Petition (C) No. 867 of 2020

Writ Petition (C) No.1431 of 2019

Transfer Petition (C) Nos. 905-915 of 2020

Civil Appeal Nos.3505-3506 of 2020

(@ SLP (C) Nos. 9587-9588 of 2020)

Transfer Petition (C) No. 1356-1360 of 2020

( @ Diary No. 18900 of 2020 )

Misc. Application No.1481 of 2020

In

Writ Petition (C) No.279 of 2017

Writ Petition (C) No.995 of 2020

Writ Petition (C) No.991 of 2020

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Misc. Application No.1654 of 2020

In

Writ Petition (C) No.279 of 2017

Writ Petition (C) No.1085 of 2020

Misc. Application No.1811 of 2020

In

Writ Petition (C) No.279 of 2017

Civil Appeal No.3598 of 2020

(@ SLP (C) No.11612 of 2020)

J U D G M E N T

L. NAGESWARA RAO, J.

1. This Court is once again, within the span of a year, called upon

to decide the constitutionality of various provisions concerning the

selection, appointment, tenure, conditions of service, and ancillary

matters relating to various tribunals, 19 in number, which act in aid

of the judicial branch. That the judicial system and this Court in

particular has to live these déjà vu moments, time and again

(exemplified by no less than four constitution bench judgments) in

the last 8 years, speaks profound volumes about the constancy of

other branches of governance, in their insistence regarding these

issues. At the heart of this, however, are stakes far greater: the

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guarantee of the rule of law to each citizen of the country, with the

concomitant guarantee of equal protection of the law. This judgment

is to be read as a sequel, and together with the decision of the

Constitution Bench in Rojer Mathew v. South Indian Bank Limited

1

.

2. The core controversy arising for this Court’s consideration is

the constitutional validity of the “Tribunal, Appellate Tribunal and

other Authorities [Qualification, Experience and Other Conditions of

Service of Members] Rules, 2020” (hereinafter referred to as “the

2020 Rules”).

3. Before considering the merits of the case, it is necessary to

refer to the events preceding the issuance of the 2020 Rules for a

better understanding of the dispute. Like many other nations, India

recognized the need for Tribunalisation of justice to provide for

adjudication by persons with ability to decide disputes in specific

fields as well as to provide expedited justice in certain kinds of

cases. Part XIV-A was inserted in the Constitution of India by the

Constitution (42

nd

Amendment) Act, 1976. Article 323-A enables the

Parliament to constitute administrative tribunals for adjudication of

the disputes relating to the recruitment and conditions of service of

persons appointed to public posts in connection with the affairs of

1

(2020) 6 SCC 1

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the Union or of any State or any local or other authority. According

to Article 323-B, the appropriate Legislature may constitute Tribunals

for adjudication of any dispute, complaints, or other offences with

respect to all or any of the matters specified in Clause (2) therein.

The vires of the 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) was challenged in proceedings under Article 32 of the

Constitution of India. Two questions that were posed in the said Writ

Petition related to the exclusion of jurisdiction of the High Court

under Articles 226 and 227 of the Constitution in service matters, the

composition of the administrative Tribunal and the mode of

appointment of Chairman, Vice-Chairman and Members. While

holding that the bar on jurisdiction of the High Courts’ cannot be a

ground of attack, this Court in S.P. Sampath Kumar v. Union of

India

2

held that the Tribunal “should be a real substitute of the High

Courts not only in form and de jure but in content and de facto”. The

Central Government was directed to make modifications to the

Administrative Tribunals Act, 1985 pertaining to the composition of

2

(1987) 1 SCC 124

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the Tribunal to ensure selection of proper and competent people to

the posts of Presiding Officers of the Tribunal.

4. The judgment in S.P. Sampath Kumar (supra) was referred to

a larger Bench for re-consideration in view of later rulings, notably

R.K. Jain v. Union of India

3

which had called for a review with

respect to functioning of tribunals. In L. Chandra Kumar v. Union

of India,

4

this Court held that the power of judicial review vested in

the High Courts and this Court under Articles 226 and 227, and 32 is

a part of the basic structure of the Constitution. Therefore, the Court

held that the Tribunals cannot act as substitutes of the High Courts

and this Court, and that their functioning is only supplementary and

that all decisions of administrative Tribunals will be subject to

scrutiny before a Division Bench of the respective High Courts.

Addressing the issue of the dependence of tribunals on the

Executive for administrative requirements, a recommendation was

made for creation of a single umbrella organisation which will be an

independent supervisory body to oversee the working of the

Tribunals. This Court was also of the opinion that the Ministry of Law

and Justice, Government of India should be the nodal Ministry.

3

[1993] 4 SCC 119

4

(1997) 3 SCC 261

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5. Part I-B and Part I-C were inserted in the Companies Act, 1956

providing for the constitution of the National Company Law Tribunal

(NCLT) and the National Company Law Appellate Tribunal (NCLAT).

Madras Bar Association filed a Writ Petition in the Madras High Court

challenging the vires of the above provisions on the grounds of

violation of rule of law, doctrine of separation of powers and the

independence of the judiciary, which are essential features of the

basic structure of the Constitution. The Madras High Court allowed

the Writ Petition, which was subject matter of several appeals which

were disposed of by this Court in Union of India v. R. Gandhi,

President, Madras Bar Association

5

. This Court was of the opinion

that while it cannot be said that the Legislature is denuded the power

to transfer judicial functions performed by courts to Tribunals,

nevertheless independent judicial Tribunals for determination of the

rights of citizens, and for adjudication of the disputes and complaints

of the citizens, is a necessary concomitant of the rule of law. It was

held in the above judgment that judicial independence and

separation of judicial power from the executive, are part of common

law traditions implicit in a Constitution like ours. The creation of the

NCLT and NCLAT was upheld. However, the defects found in Parts

5

(2010) 11 SCC 1

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I-B and I-C of the Companies Act, 1956 were directed to be rectified

by suitable amendments with modifications suggested by this Court

in order to uphold the judicial independence of the Tribunals. The

suggestions pertained to composition of the Search-cum-Selection

Committee (for appointment of members of the tribunals) ,

qualifications for appointment, and service conditions of members of

the Tribunals. Later, Madras Bar Association had assailed the

constitutional validity of the National Tax Tribunal Act, 2005. This

Court held the National Tax Tribunal Act, 2005 to be

unconstitutional.

6

Nonetheless, the vesting of adjudicatory functions

in Tribunals was held to be not violative of the basic structure of the

Constitution. The Companies Act, 2013 replaced the earlier Act of

1956 in which amendments were made to provisions relating to the

establishment of NCLT and NCLAT. A Writ Petition was filed under

Article 32 by the Madras Bar Association questioning the amended

provisions of Chapter XXVII of the Companies Act, 2013, and more

particularly Sections 408, 409, 411(3), 412, 413, 425, 431 and 434. The

complaint of the Madras Bar Association in the said Writ Petition was

that the offending provisions were analogous to the provisions in the

1956 Act which were found to be unconstitutional by this Court in

6

Madras Bar Association v. Union of India, (2014) 10 SCC 1.

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Union of India v. Madras Bar Association (2010) (supra). The

constitutional validity of the provisions in Chapter XXVII of the

Companies Act, 2013 was upheld by a judgment in Madras Bar

Association v. Union of India

7

. However, this Court was of the view

that certain provisions relating to composition of the Search-cum-

Selection Committee and qualification of Members of the Tribunals

are invalid as they are contrary to the directions issued by the earlier

judgment in Union of India v. Madras Bar Association (2010)

(supra).

6. By the Finance Act, 2017, amendments were made to certain

Acts to provide for merger of Tribunals and other authorities, and

conditions of service of Chairpersons, Members, etc. According to

Section 183 of the Finance Act, 2017, the provisions of Section 184

shall apply to the Chairperson, Vice-Chairperson, Chairman, Vice-

Chairman, President, Vice-President, Presiding Officer or Member

of the Tribunal or Appellate Tribunal or other authorities, as

specified under Column (2) of the Eighth Schedule to the Finance

Act, 2017 on and from the appointed day i.e. 26.05.2017. It was

further provided that Section 184 shall not apply to those holding

such office immediately before the appointed day. Section 184

7

(2015) 8 SCC 583

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empowered the Central Government 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, Vice-Chairperson, Chairman, Vice -Chairman,

President, Presiding Officer, Vice-President, or Member of the

Tribunal or the Appellate Tribunal or other authorities as specified

in Column (2) of the Eighth Schedule to the 2020 Rules. Maximum

tenure of the aforementioned persons was fixed as five years.

Chairperson, Chairman or Presiding Officer of the Tribunals cannot

continue beyond 70 years. Likewise, the Vice-Chairperson, Vice-

Chairman, Vice-President, Presiding Officer or any other Member

shall be entitled to continue till they attain the age of 67 years. The

validity of the Finance Act, 2017 and the Tribunal, Appellate Tribunal

and other Authorities (Qualification, Experience and Other

Conditions of Service of Members) Rules, 2017 (hereinafter referred

to as “the 2017 Rules”) came up for consideration before this Court

in Rojer Mathew v. South Indian Bank Limited

8

. This Court

formulated the following issues for consideration:

“86.1. (I.) Whether the “Finance Act, 2017” insofar as it amends

certain other enactments and alters conditions of service of

8

(2020) 6 SCC 1

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persons manning different Tribunals can be termed as a “Money

Bill” under Article 110 and consequently is validly enacted?

86.2. (II.) If the answer to the above is in the affirmative then

whether Section 184 of the Finance Act, 2017 is unconstitutional

on account of excessive delegation?”

86.3 III. If Section 184 is valid, Whether Tribunal, Appellate

Tribunal and other Authorities (Qualifications, Experience and

other Conditions of Service of Members) Rules, 2017 are in

consonance with the Principal Act and various decisions of this

Court on functioning of Tribunals?

86.4 IV. Whether there should be a Single Nodal Agency for

administration of all Tribunals?

86.5 V. Whether there is a need for conducting a Judicial Impact

Assessment of all Tribunals in India?

86.6 VI. Whether judges of Tribunals set up by Acts of Parliament

under Articles 323-A and 323-B of the Constitution can be

equated in ‘rank’ and ‘status’ with Constitutional functionaries?

86.7 VII. Whether direct statutory appeals from Tribunals to the

Supreme Court ought to be detoured?

86.8 VIII. Whether there is a need for amalgamation of existing

Tribunals and setting up of benches.”

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7. The issue pertaining to whether the Finance Act, 2017 was a

“Money Bill” (and if not, the need for it to be passed by the Rajya

Sabha) was referred to a larger Bench and it was held that Section

184 of the Finance Act, 2017 does not suffer from excessive

delegation of legislative functions. The 2017 Rules were struck down

as being contrary to the principles of the Constitution as interpreted

by various decisions of this Court (including those previously

referred to herein). The Central Government was directed to re-

formulate the Rules strictly in conformity and in accordance with the

principles delineated by this Court in its earlier judgments read with

the observations made in the judgment in Rojer Mathew (supra).

Non-discriminatory and uniform conditions of service including

assured tenure were directed to be formulated by the Central

Government in the new set of Rules. A Writ of Mandamus was issued

to the Ministry of Law & Justice to carry out a judicial impact

assessment for all the Tribunals. Appointments to the Tribunals,

Appellate Tribunals and the other Authorities were directed to be

held in accordance with the respective statutes which governed the

conditions of service of members of Tribunals before the enactment

of the Finance Act, 2017 till a fresh set of Rules were made by the

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Central Government. The Union of India was granted liberty to seek

modification of the said order after fresh Rules are framed.

8. Thereafter, by a Notification dated 12.02.2020, the Central

Government in exercise of the power conferred by Section 184 of the

Finance Act, 2017 made the impugned 2020 Rules. The 2020 Rules

which deal with the qualification and appointment of members by

recruitment, procedure for inquiry into misbehavior, House Rent

Allowance and other Conditions of Service are the subject matter of

challenge in these cases before us and will be dealt with in detail in

the succeeding paragraphs.

9. Pursuant to the liberty granted by this Court in the judgment of

Rojer Mathew (supra), the Union of India filed Miscellaneous

Application No.1152 of 2020 placing the 2020 Rules before this Court

and seeking a direction that the 2020 Rules would apply to all

persons appointed as Members, President, Chairperson, etc. of

Tribunals after the appointed day i.e. 26.05.2017. Several

applications were filed by Bar Associations and the Members of the

Tribunals seeking directions to fill up the vacant posts by making

appointments to the Tribunals and for clarifications relating to the

retrospective operation of the 2020 Rules. The Madras Bar

Association filed a Writ Petition under Article 32 seeking a

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declaration that the 2020 Rules are ultra vires of Article 14, 21 and 50

of the Constitution apart from being violative of the principles of

separation of powers and independence of the judiciary. According

to the Writ Petitioner, the 2020 Rules were also contrary to the earlier

judgments of this Court in Union of India v. Madras Bar Association

(2010) (supra)

9

, Madras Bar Association v. Union of India (2014)

(supra)

10

and Rojer Mathew (supra). Other Writ Petitions filed in the

High Courts were transferred to this Court.

10. We requested Mr. Arvind P. Datar, learned Senior Counsel who

has been actively associated with the litigation from the beginning

and who was appointed as Amicus Curiae in the earlier rounds to

assist this Court as Amicus Curiae to which he readily and graciously

accepted. We have heard Mr. Arvind P. Datar, learned Senior

Counsel (Amicus Curiae), Mr. Mukul Rohtagi, Mr. C.A. Sundaram,

learned Senior Counsel, Mr. Vikas Singh, learned Senior Counsel,

Ms. Anitha Shenoy, learned Senior Counsel, Mr. K.K. Venugopal,

learned Attorney General for India, Mr. Balbir Singh, learned

Additional Solicitor General, Mr. S.V. Raju, learned Additional

Solicitor General, Mr. R. Balasubramanium, learned Senior Counsel,

9

(2010) 11 SCC 1

10

(2014) 10 SCC 1

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Mr. A.S. Chandhiok, learned Senior Counsel, Mr. Virender Ganda,

learned Senior Counsel, Mr. M.S. Ganesh, learned Senior Counsel,

Mr. Sidharth Luthra, learned Senior Counsel, Mr. C.S. Vaidyanathan,

learned Senior Counsel, Mr. Guru Krishnakumar, learned Senior

Counsel, Mr. Rakesh Kumar Khanna, learned Senior Counsel, Mr.

Gautam Misra, learned Senior Counsel, Mr. P.S. Narasimha, learned

Senior Counsel and other learned counsel appearing for the parties.

For the sake of convenience, Writ Petition (Civil) No.804 of 2020 filed

by the Madras Bar Association is taken as the lead case. The points

raised in the said Writ Petition will broadly cover all the issues that

have been the subject matter of discussion during the course of the

hearing of this case.

11. The main issues raised in the Writ Petition are that the 2020

Rules are unconstitutional as:

a) The Search-cum-Selection Committees provided for in the

2020 Rules did not conform to the principles of judicial

dominance;

b) Appointment of persons without judicial experience to the

posts of Judicial Members/ Presiding Officer/ Chairpersons

is in contravention to the earlier judgments of this Court;

c) The term of office of the Members for four years is contrary

to the earlier decisions of this Court;

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d) Advocates are not being made eligible for appointment to

most of the Tribunals;

e) Administrative control of the executive in matters relating to

appointments and conditions of service is violative of the

principles of separation of powers and independence of

judiciary and demonstrates non-application of mind.

NATIONAL TRIBUNALS COMMISSION:

12. Mr. Datar, learned Amicus Curiae submitted that there is an

imperative need for the Tribunals to function independently and free

from executive control. Tribunals which are exercising power once

vested with the High Courts and adjudicating disputes should be

completely independent to infuse confidence in the mind of the

litigant public. He relied upon the observations of Vivian Bose, J. in

Bidi Supply Co. v. Union of India

11

which are as follows:

“The heart and core of a democracy lies in the judicial process,

and that means independent and fearless judges free from

executive control brought up in judicial traditions and trained to

judicial ways of working and thinking.”

11

(1956) SCR 267

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13. Mr. Datar also referred to the Reports of the Franks

12

and

Leggatt

13

Committees which describe the role of Tribunals in the

United Kingdom in a detailed manner. Mr. Datar brought to our

notice that the recommendations of the Leggatt Committee were

cited with approval in the judgment of this Court in Union of India v.

Madras Bar Association (2010) (supra). According to the learned

Amicus Curiae, the administrative support is provided by a

Department of the Government of India, the Secretary of which is a

Member of the Search-cum-Selection Committee. He cited the

judgment of this Court in L. Chandra Kumar (supra) to argue that

there should be a wholly independent agency for the administration

of all the Tribunals. The learned Amicus Curiae also brought to our

notice a statement made by Mr. Arun Jaitley, the then Minister of Law

and Justice on the floor of the Parliament on 02.08.2001 that there was

a proposal to set up a Central Tribunals Division. According to the

learned Amicus Curiae, setting up a National Tribunals Commission

as a supervisory body over the Tribunals would go a long way in

12 the Franks Report of 1957 was issued by a British committee of inquiry chaired by Sir

Oliver Franks; the committee was set up by the Lord Chancellor, in view of concerns voiced

with regard to the range, and diversity of tribunals, uncertainty regarding the procedures

they followed and lack of cohesion and supervision.

13

Finalized in 2001, the Sir Andrew Leggatt Committee reviewed the existing tribunal system in UK in

its report ‘Tribunals for Users – One System, One Service’. The Report, highlighted concerns in the court

system, such as delay, expense, technicality and formality, lack of expertise etc and recommended, a

new ‘independent, coherent, professional, cost-effective, user friendly’ and structurally reformed

Tribunal system

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improving the effective functioning of the Tribunals and enhancing

the public image of the Tribunals. The mounting arrears in the

Tribunals is mainly due to the delay in filling up the vacancies of the

Presiding Officers and members of the Tribunals. The learned

Amicus Curiae suggested that there should be a National Tribunals

Commission manned by retired Judges of the Supreme Court, Chief

Justices of the High Courts and Members from the Executive which

will have a full-time Secretary performing the following functions:

a) Selection of candidates;

b) Re-appointment of candidates;

c) Conducting of inquiry against Members;

d) Sanction leave of Members wherever necessary;

e) Monitor the functioning of the Tribunals, in particular, the

arrears and disposal of cases and filling up of vacancies and

ensuring adequate infrastructure; and

f) Ensure adequate infrastructure and IT support.

14. The learned Attorney General was also of the opinion that

constitution of a National Tribunals Commission would provide a

solution to the existing problems and ensure the smooth functioning

of the Tribunals.

15. Docket explosion and mounting arrears are serious problems

faced by the justice system in this country. Initially, creation of

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Tribunals was understood to provide a solution to the problems and

to ease the burden on the Constitutional Courts. Specialized

Tribunals were set up to meet the exigencies of adjudication of

disputes in some branches of law. A constant complaint has been

that the Tribunals are not free from the Executive control and that

they are not perceived to be independent judicial bodies. There is

an imperative need to ensure that the Tribunals discharge the

judicial functions without any interference of the Executive whether

directly or indirectly.

16. This Court has been repeatedly urging the Union of India to set

up a single umbrella organization which would be an independent

body to supervise the functioning of the Tribunals and ensure that

the independence of the Members of the Tribunals is maintained.

For the first time, this Court in its judgment in L. Chandra Kumar

(supra) persuaded the Government of India to have the Ministry of

Law as the nodal Ministry which would appoint an independent

supervisory body to oversee the working of the Tribunals. The

observations in L. Chandra Kumar are to the following effect:

“96. ...The situation at present is that different Tribunals

constituted under different enactments are administered by

different administrative departments of the Central and the State

Governments. The problem is compounded by the fact that some

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Tribunals have been created pursuant to Central Legislations

and some others have been created by State Legislations.

However, even in the case of Tribunals created by Parliamentary

legislations, there is no uniformity in administration. We are of

the view that, until a wholly independent agency for the

administration of all such Tribunals can be set-up, it is desirable

that all such Tribunals should be, as far as possible, under a

single nodal Ministry which will be in a position to oversee the

working of these Tribunals. For a number of reasons that Ministry

should appropriately be the Ministry of Law. It would be open for

the Ministry, in its turn, to appoint an independent supervisory

body to oversee the working of the Tribunals. This will ensure

that if the President or Chairperson of the Tribunal is for some

reason unable to take sufficient interest in the working of the

Tribunal, the entire system will not languish and the ultimate

consumer of justice will not suffer. The creation of a single

umbrella organisation will, in our view, remove many of the ills

of the present system. If the need arises, there can be separate

umbrella organisations at the Central and the State levels. Such

a supervisory authority must try to ensure that the independence

of the members of all such Tribunals is maintained. To that

extent, the procedure for the selection of the members of the

Tribunals, the manner in which funds are allocated for the

functioning of the Tribunals and all other consequential details

will have to be clearly spelt out.”

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17. In para 70 of Union of India v. Madras Bar Association (2010)

(supra), this Court deprecated the practice of administrative support

from the Departments other than the Ministry of Law and Justice.

Dependence on the parent Ministry or departments by the Members

of the Tribunal for their facilities and administrative needs was found

to be contrary to the principle of independence of the judiciary.

Later, the learned Amicus Curiae submitted ‘a concept note’ on the

National Tribunals Commission which was approved by this Court in

Rojer Mathew v. South Indian Bank Limited

14

. This Court was of the

opinion that an autonomous oversight body should be established

for recruitment of members and functioning of the Tribunals. In fact,

the Court in Rojer Mathew (supra) even held that control of the

tribunals by the executive is fraught and undermines their

independence:

“168. We are in complete agreement with the analogy

elucidated by the Constitution Bench in the Fourth Judges

Case (supra) for compulsory need for exclusion of control of the

Executive over quasi-judicial bodies of Tribunals discharging

responsibilities akin to Courts. The Search-cum-Selection

Committees as envisaged in the Rules are against the

constitutional scheme inasmuch as they dilute the involvement

of judiciary in the process of appointment of members of

14

(2018) 16 SCC 341

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tribunals which is in effect an encroachment by the executive on

the judiciary.”

18. The suggestions made by the learned Amicus Curiae

regarding the setting up of All India Tribunal Service on the pattern

prevalent in the United Kingdom was accepted. This Court was

convinced that the performance and functioning of the Members of

the Tribunals must be reviewed by the said independent body in the

same way as superintendence by the High Courts under Article 235

of the Constitution. By an order dated 07.05.2018, this Court in fact,

recommended constitution of a wholly independent agency to

oversee the working of the Tribunals.

19. While considering the vires of validity of the 2017 Rules, this

Court in Rojer Mathew (supra) referred to the current problems

faced by the Tribunals. Administration of the Tribunals by the

sponsoring or parent Ministry or Department concerned and

dependence for financial, administrative or other facilities by the

Tribunals on the said Department which is a litigant before them are

some of the serious problems highlighted by this Court. There is a

likelihood of the independence of adjudication process being

compromised in a situation where the Tribunal is made dependent

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for its needs on a litigant. The need for financial independence of

the Tribunals has been dealt with by this Court in Rojer Mathew

(supra). A direction was given to the Ministry of Finance to earmark

separate and dedicated funds for the Tribunals from the

Consolidated Fund of India so that the Tribunals will not be under the

financial control of the parent Departments. We reiterate the

importance of the constitution of an autonomous oversight body for

recruitment and supervision of the performance of the Tribunals. It

is high time that the observations and suggestions made in this

regard by this Court shall be implemented by the Union of India. An

independent body headed by a retired Judge of the Supreme Court

supervising the appointments and the functioning of the Tribunals

apart from being in control of any disciplinary proceedings against

the Members would not only improve the functioning of the Tribunals

but would also be in accordance with the principles of judicial

independence. We also notice that in the final directions and

conclusions recorded in Roger Mathew (supra)

15

, the wisdom or

legality of setting up such an independent oversight body was not

15

See para 238 of Rojer Mathew (supra), which refers only the issue relating to Money Bills to a larger

bench.

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doubted and it was not referred to a larger Bench, since the view in

L. Chandra Kumar on this point was not doubted.

20. In view of the preceding discussion, we direct the Union of

India to set up a National Tribunals Commission as suggested by this

Court by its order dated 07.05.2018 at the earliest. Setting up of such

Commission would enhance the image of the Tribunals and instill

confidence in the minds of the litigants. Dependence of the Tribunals

for all their requirements on the parent Department will not extricate

them from the control of the executive. Judicial independence of the

Tribunals can be achieved only when the Tribunals are provided the

necessary infrastructure and other facilities without having to lean on

the shoulders of the executive. This can be achieved by

establishment of an independent National Tribunals Commission as

suggested above. To stop the dependence of the Tribunals on their

parent Departments for routing their requirements and to ensure

speedy administrative decision making, as an interregnum measure,

we direct that there should be a separate “tribunals wing”

established in the Ministry of Finance, Government of India to take

up, deal with and finalize requirements of all the Tribunals till the

National Tribunals Commission is established.

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SEARCH-CUM-SELECTION COMMITTEE:

21. The contention of the learned Amicus Curiae is that the

composition of the Search-cum-Selection Committees to make

recommendations for appointment as Chairman or Chairperson or

President and the other members of the Tribunals is contrary to the

requirements of judicial dominance as held by the judgments of this

Court. Mr. Datar submitted that the Schedule to the 2020 Rules

provides for the Search-cum-Selection Committees for all the 19

Tribunals which broadly consist of the Chief Justice of India or a

Judge of the Supreme Court nominated by him (who will serve as the

Chairperson of the Search-cum-Selection committee), outgoing

Chairman or Chairperson or President of the Tribunal in case of

appointment of the Chairman or Chairperson or President of the

Tribunal or the sitting Chairman or Chairperson or President of the

Tribunal in case of appointment of other members of the Tribunal

and two Secretaries to the Government of India. He stated that the

Search-cum-Selection Committees cannot have the Secretaries of the

sponsoring departments as its members, as held by this Court in

Madras Bar Association v. Union of India (2014) (supra).

22. During the course of arguments, the learned Attorney General

submitted that the 2020 Rules would be amended providing for a

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casting vote to the Chairperson of the Search-cum-Selection

Committee to allay the apprehension of the petitioner. In that event,

judicial dominance in the Search-cum-Selection Committee can be

maintained as the Chief Justice of India or his nominee and the

Presiding Officer of the Tribunal who is normally a retired Judge of

the Supreme Court or a retired Chief Justice of a High Court, who

represent the judiciary, along with a casting vote to the Chief Justice

of India or his nominee, will be in majority in the Search-cum-

Selection Committee. In response to the submission of the learned

Attorney General, Mr. Datar argued that there are some Tribunals

where the Presiding Officer of the Tribunal is not a retired Judge of

the Supreme Court or Chief Justice of the High Court or Judge of a

High Court. According to Mr. Datar, the Selection Committee should

consist of the Chief Justice of India or his nominee along with another

Judge of the Supreme Court and two Secretaries who are not from the

sponsoring departments with a casting vote to the Chief Justice of

India or his nominee.

23. The learned Attorney General for India in his usual fairness

submitted that the composition of the Search-cum-Selection

Committees, according to the 2020 Rules consist of the Chief Justice

of India or his nominee, the Chairman or Chairperson or President

26 | P a g e

or the outgoing Chairman or Chairperson or President of the

Tribunal and two Secretaries to the Government of India. He

submitted that there has been no instance where the Secretaries to

Government disagreed with the views of the Judge of the Supreme

Court. All the decisions of the Search-cum-Selection Committees till

now have been unanimous. In any event, he suggested that in case

of a dead lock, the Chairperson of the Search-cum-Selection

Committee who is Chief Justice of India or his nominee shall have a

casting vote and the 2020 Rules will be amended accordingly to

include the casting vote to the Chairperson of the Search-cum-

Selection Committee. The learned Attorney General further

submitted that in case the Chairman or Chairperson or President of

the Tribunal is himself seeking re-appointment, the Search-cum-

Selection Committee shall have another Judge of the Supreme Court

as a Member. He submitted that the acceptance of the request made

by the petitioner that there should be two Judges of the Supreme

Court in the Search-cum-Selection Committee will lead to practical

difficulties. There are 475 members in all the Tribunals put together

and there will be frequent retirements and to fill up the said posts,

the requirement for the meetings of the Search-cum-Selection

Committees will arise on a regular basis. It might not be possible for

27 | P a g e

two Judges of the Supreme Court to spare so much time in view of

their already busy schedules. Countering the submission of the

learned Amicus Curiae that Rule 4 of the 2020 Rules is violative of the

judgments of this Court, the learned Attorney General submitted that

this Court in Union of India v. Madras Bar Association (2010)

(supra) accepted that the Secretary of the department concerned can

be a member of the Search-cum-Selection Committee. It is to be

noted that this Court held to the contrary in Madras Bar Association

v. Union of India (2014) (supra). He argued that in view of the law

laid down by this Court in Sundeep Kumar Bafna v. State of

Maharashtra

16

that in case of a conflict between decisions of two

Coordinate Benches of this Court, the law laid down by the earlier

Bench shall prevail. He further stated that in a later judgment in

Madras Bar Association v. Union of India (2015) (supra) this Court

approved the Search-cum-Selection Committee consisting of the

Secretary of the sponsoring department.

24. The issue of constitution of the Search-cum-Selection

Committees for appointment to the posts of Chairperson and

Members of the Tribunal has been dealt with by this Court earlier.

Section 10 FX of the Companies Act, 1956 provided for constitution

16

(2014) 16 SCC 623

28 | P a g e

of a Search-cum-Selection Committee consisting of the Chief Justice

of India or his nominee as the Chairperson and four Secretaries to

the Government of India from the Ministry of Finance and Company

Affairs, Ministry of Labour, and Ministry of Law and Justice

respectively as Members. The validity of Section 10 FX was

challenged by the Madras Bar Association as being violative of the

principles of separation of powers and judicial independence. This

Court in Union of India v. Madras Bar Association (2010) (supra)

while dealing with a judgment of the Madras High Court held that

Parts IB and IC of the Companies Act can be made operational only

after making suitable amendments suggested therein. In respect of

the Search-cum-Selection Committee, the amendment suggested by

this Court was that it should consist of the Chief Justice of India or his

nominee as Chairperson and another Judge of the Supreme Court

and two Secretaries of the Government of India from the Ministry of

Finance and Company Affairs and the Ministry of Law and Justice. It

is relevant to mention that in the said judgment, this Court took note

of the fact that the Secretary of the sponsoring department is serving

as a member of the Search-cum-Selection Committee. This Court

was of the opinion that the Tribunals will not be considered

independent unless reforms that were implemented in the United

29 | P a g e

Kingdom pursuant to the Report of the Leggatt Committee are

implemented in the Tribunals in India. Nonetheless, this Court

observed that the Secretary, Ministry of Finance and Company

Affairs can be a member of the Search-cum-Selection Committee for

appointment of members to NCLT and NCLAT.

25. In the meanwhile, the Madras Bar Association filed another

Writ Petition challenging the creation of the National Tax Tribunal.

With regard to the constitution of the Search-cum-Selection

Committee for the National Tax Tribunal, this Court in Madras Bar

Association v. Union of India (2014) (supra) observed that a party to

a litigation, i.e. the Secretary of the concerned department, cannot

be permitted to participate in the selection process for appointment

to the posts of Chairperson and Members of the Tribunal. This Court

was of the opinion that the said procedure would be contrary to the

recognised constitutional conventions reiterated by Lord Diplock in

Hinds v. R

17

, which is as follows:

“It would make a mockery of the Constitution, if the legislature

could transfer the jurisdiction previously exercisable by holders

of judicial offices to holders of a new court/Tribunal (to which

some different name was attached) and to provide that persons

holding the new judicial offices should not be appointed in the

17

(1976) 1 All ER 353 (PC)

30 | P a g e

manner and on the terms prescribed for appointment of

members of the judicature”.

26. Provisions made for the NCLT and NCLAT in the Companies

Act, 2013 were again the subject matter of challenge before this

Court in Madras Bar Association v. Union of India (2015) (supra).

Section 412 of the Companies Act, 2013 deals with the selection of

the Members of the NCLT and NCLAT. The President of the Tribunal,

the Chairperson and Judicial Members of the Appellate Tribunal

shall be appointed after consultation with the Chief Justice of India.

The Search-cum-Selection Committee for appointment of the

Members of the Tribunal and the Technical Members of the

Appellate Tribunal shall consist of the Chief Justice of India or his

nominee, a Senior Judge of the Supreme Court or the Chief Justice of

a High Court and the Secretaries of the Ministry of Corporate Affairs,

Ministry of Law and Justice and the Ministry of Finance. In Madras

Bar Association v. Union of India (2015) (supra), this Court

expressed its displeasure in the constitution of the Search-cum-

Selection Committee which is contrary to the principles laid down in

its earlier judgment in Union of India v. Madras Bar Association

(2010) (supra). Section 412 (2) of the Companies Act, 2013 was held

to be not valid as it was found to be against the binding precedents

31 | P a g e

of this Court in Union of India v. Madras Bar Association (2010)

(supra). A direction was issued to remove the deficiency in the

constitution of the Search-cum-Selection Committee by bringing the

same into accord with sub-para (viii) of para 120 of the judgment in

Union of India v. Madras Bar Association (supra).

27. The 2017 Rules were made in exercise of the powers conferred

under Section 184 of the Finance Act, 2017. Rule 4 provides for

method of recruitment to the post of Chairman or Chairperson or

President and the Members of the Tribunals. Under the 2017 Rules,

the Search-cum-Selection Committee consisted of the Chief Justice

of India or his nominee as the Chairperson and the Chairman of the

Tribunal along with the Secretaries to Government. While striking

down the 2017 Rules, this Court in Rojer Mathew (supra) commented

that the lack of judicial dominance in the Search-cum-Selection

Committee is in direct contravention of the doctrine of separation of

powers and is an encroachment on the judicial domain

18

. This Court

further observed that excessive interference by the executive in

18

It was held that

“163. We are in agreement with the contentions of the Learned Counsel for the petitioner(s), that the lack

of judicial dominance in the Search-cum-Selection Committee is in direct contravention of the doctrine of

separation of powers and is an encroachment on the judicial domain. The doctrine of separation of

powers has been well recognised and re-interpreted by this Court as an important facet of the basic

structure of the Constitution, in its dictum in Kesavananda Bharati v. State of Kerala, and several other

later decisions. The exclusion of the Judiciary from the control and influence of the Executive is not

limited to traditional Courts alone, but also includes Tribunals since they are formed as an alternative to

Courts and perform judicial functions.”

32 | P a g e

appointment of the members would be detrimental to the

independence of judiciary and an affront to the doctrine of

separation of powers. The principle s laid down in the

aforementioned judgments are binding precedents which have to be

implemented by the Respondent. However, the 2020 Rules which are

in challenge in the Writ Petitions replicate the 2017 Rules in respect

of the constitution of the Search-cum-Selection Committees, insofar

as they do not ensure judicial dominance. We appreciate the stand

taken by the learned Attorney General that a casting vote will be

given to the Chief Justice of India or his nominee as the Chairperson

of the Search-cum-Selection Committee. We also accept the

submission of the learned Attorney General that normally the

Chairperson of the Tribunal would be a retired Judge of the Supreme

Court or the Chief Justice of a High Court. As such, two members of

the judiciary with a casting vote to the Chairperson of the Search-

cum-Selection Committee should ensure judicial dominance over

the selection process and take care of the grievances of the Writ

Petitioner. Mr. Datar submitted that there are certain Tribunals in

which the Chairperson may not be a judicial member. In such

Tribunals, we are of the opinion that the Search-cum-Selection

Committee should have a retired Judge of the Supreme Court or a

33 | P a g e

retired Chief Justice of a High Court nominated by the Chief Justice

of India in place of the Chairperson of the Tribunal.

28. The learned Attorney General stated that the 2020 Rules would

be amended to reflect that whenever the re-appointment of the

Chairman or Chairperson or President of a Tribunal is considered by

the Search-cum-Selection Committee, the Chairman or Chairperson

or President of the Tribunal shall be replaced by a retired Judge of

the Supreme Court or a retired Chief Justice of a High Court

nominated by the Chief Justice of India. We approve this submission

of the Attorney General.

29. It has been repeatedly held by this Court that the Secretaries

of the sponsoring departments should not be members of the Search-

cum-Selection Committee. We are not in agreement with the

submission of the learned Attorney General that the Secretary of the

sponsoring department being a member of the Search-cum-

Selection Committee was approved by this Court in Union of India

v. Madras Bar Association (2010) (supra) and it would prevail over

the later judgment in Madras Bar Association v. Union of India

(2014) (supra). We have already referred to the findings recorded

in paragraph 70 of the judgment in Union of India v. Madras Bar

Association (2010) (supra) that the sponsoring department should

34 | P a g e

not have any role to play in the matter of appointment to the posts of

Chairperson and members of the Tribunals. Though the ultimate

direction of the Court was to constitute a Search-cum-Selection

Committee for appointment of members to NCLT and NCLAT of

which Secretary, Ministry of Finance and Company Affairs is a

member, the ratio of the judgment is categorical, which is to the

effect that Secretaries of the sponsoring departments cannot be

members of the Search-cum-Selection Committee. We, therefore,

see no conflict of opinion in the two judgments as argued by the

learned Attorney General. However, we find merit in the submission

of the learned Attorney General that the presence of the Secretary of

the sponsoring or parent department in the Search-cum-Selection

Committee will be beneficial to the selection process. But, for

reasons stated above, it is settled that the Secretary of the parent or

sponsoring Department cannot have a say in the process of selection

and service conditions of the members of Tribunals. Ergo, the

Secretary to the sponsoring or parent Department shall serve as the

Member-Secretary/Convener to the Search -cum-Selection

Committee and shall function in the Search -cum-Selection

Committee without a vote.

35 | P a g e

30. The Government of India is duty bound to implement the

directions issued in the earlier judgments and constitute the Search-

cum-Selection Committees in which the Chief Justice of India or his

nominee shall be the Chairperson along with the Chairperson of the

Tribunal if he is a retired Judge of the Supreme Court or a retired

Chief Justice of a High Court and two Secretaries to the Government

of India. In case the Tribunal is headed by a Chairperson who is not

a judicial member, the Search-cum-Selection Committee shall

consist of the Chief Justice of India or his nominee as Chairperson

and a retired Judge of the Supreme Court or a retired Chief Justice of

a High Court to be nominated by the Chief Justice of India and

Secretary to the Government of India from the Ministry of Law and

Justice and a Secretary of a department other than the parent or

sponsoring department to be nominated by the Cabinet Secretary.

As stated above, the Secretary of the parent or sponsoring

department shall serve as the Member-Secretary or Convener,

without a vote.

31. Rule 4 (2) of the Rules postulates that a panel of two or three

persons shall be recommended by the Search -cum-Selection

Committee from which the appointments to the posts of Chairperson

or members of the Tribunal shall be made by the Central

36 | P a g e

Government. The learned Amicus Curiae voiced serious objections

to Rule 4(2) on the ground that it would be compromising judicial

independence. According to Mr. Datar, the procedure for

appointment to the Tribunals should be completely outside

executive control. The learned Attorney General stated that a panel

of names consisting two or three persons is essential because their

antecedents have to be examined by the Intelligence Bureau before

appointing them to a Tribunal. He suggested that the number of

persons to be recommended can be two instead of three to limit the

discretion of the Appointments Committee of the Cabinet. The

recommendations for appointments by the Search-cum-Selection

Committee should be final and the executive should not be

permitted to exercise their discretion in the matter of appointments

to the Tribunals. Accordingly, we direct that Rule 4(2) of the 2020

Rules shall be amended and till so amended, that it be read as

empowering the Search-cum-Selection Committee to recommend

the name of only one person for each post. However, taking note of

the submissions made by the learned Attorney General regarding

the requirement of the reports of the selected candidates from the

Intelligence Bureau, another suitable person can be selected by the

Search-cum-Selection Committee and placed in the waiting list. In

37 | P a g e

case, the report of the Intelligence Bureau regarding the selected

candidate is not satisfactory, then the candidate in the waiting list can

be appointed.

TERM OF OFFICE

32. Mr. Datar argued that the term of office of the Chairperson and

the members of the Tribunal should be for a minimum period of five

years by relying upon the judgments of this Court in S.P. Sampath

Kumar (supra), Union of India v. Madras Bar Association (2010)

(supra) and Rojer Mathew (supra). He referred to Section 184 of the

Finance Act, 2017 which stipulated the term of office shall be for a

period not exceeding five years. He submitted that in spite of this

Court holding that the tenure should be between five to seven years,

the 2020 Rules have provided for only four years as the maximum

term. According to him, a term of minimum five years for the

members of the Tribunals with a right of re-appointment is

mandatory. Citing Rule 9(2) of the 2020 Rules which stipulates that

the term of office shall be four years or till a person attains the age of

65 years whichever is earlier, the learned Amicus Curiae argued that

a Judge of a High Court will not get more than three years as a

member of the Tribunal after his retirement at the age of 62 years

38 | P a g e

even if he is appointed immediately after his superannuation. He

mentioned that in 18 out of the 19 Tribunals governed by the 2020

Rules, retired Judges of High Courts can be appointed either as Vice

Chairperson or as the member. In view of the delay in making

appointments, most of such retired Judges of High Courts will

normally have a very short tenure of not more than two years.

Therefore, Mr. Datar submitted that Rule 9 (2) requires to be struck

down as being arbitrary.

33. According to the learned Attorney General, as the term of four

years is subject to re-appointment, it would not make much of a

difference if the term fixed is four years instead of five years. He

mentioned that due to the provision for re-appointment, eligible

lawyers who shall be appointed at the age of 45 years will have the

advantage of four or five extensions or till the said member reaches

the age of 65 years.

34. This Court directed the extension of the tenure of the members

of the Tribunal from three years to seven or five years subject to their

eligibility in the case of Union of India v. Madras Bar Association

(2010) (supra). This Court was of the opinion that the term of three

years is very short and by the time the members achieve the

required knowledge, expertise and efficiency, the term would be

39 | P a g e

over. In the said judgment it was further observed that the Tribunals

would function effectively and efficiently only when they are able to

attract younger members who have a reasonable period of service.

In spite of the above precedent, a tenure of three years was fixed for

the members of Tribunals in the 2017 Rules. While setting aside the

2017 Rules, this Court in Rojer Mathew (supra) held that a short

period of service of three years is anti-merit as it would have the

effect of discouraging meritorious candidates to accept the posts of

judicial members in the Tribunals. In addition, this Court was also

convinced that the short tenure of members increases interference

by the executive jeopardizing the independence of judiciary.

35. The 2020 Rules are not in compliance with the principles of law

laid down in Union of India v. Madras Bar Association (2010)

(supra) and Rojer Mathew (supra) in respect of the tenure of the

members of the Tribunals in spite of this Court repeatedly holding

that short tenure of members is detrimental to the efficiency and

independence of the Tribunals. Rule 9(1) of the 2020 Rules provide

for a term of four years or till a Chairman or Chairperson or President

attains the age of 70 years whichever is earlier. No rationale except

that four years is more than three years prescribed in the 2017 Rules

(described as too short, in Roger Mathew (supra)) was put forward

40 | P a g e

on behalf of the Union of India. In so far as the posts of Vice Chairman

or Vice-Chairperson or Vice-President and members are

concerned, Rule 9(2) fixes the tenure as four years or till they attain

the age of 65 years whichever is earlier. In view of the law laid down

in the earlier judgments, we direct the modification of the tenure in

Rules 9(1) and 9(2) of the 2020 Rules as five years in respect of

Chairman or Chairperson, Vice Chairman or Vice-Chairperson and

the members. Rule 9(1) permits a Chairman, Chairperson or

President of the Tribunal to continue till 70 years which is in

conformity with Parliamentary mandate in Section 184 of the Finance

Act. However, Rule 9(2) provides that Vice Chairman and other

members shall hold office till they attain 65 years. We are in

agreement with the submission made by the learned Amicus Curiae

that under the 2020 Rules, the Vice Chairman, Vice-Chairperson or

Vice-President or members in almost all the Tribunals will have only

a short tenure of less than three years if the maximum age is 65 years.

We, therefore, direct the Government to amend Rule 9 (1) of the 2020

Rules by making the term of Chairman, Chairperson or President as

five years or till they attain 70 years, whichever is earlier and other

members dealt with in Rule 9(2) as five years or till they attain 67

years, whichever is earlier.

41 | P a g e

36. Section 184 of the Finance Act, 2017 provides for

reappointment of Chairpersons, Vice-Chairpersons and members of

the Tribunals on completion of their tenure. There is no mention of

reappointment in the 2020 Rules. However, the learned Attorney

General submitted that the members shall be entitled to seek

reappointment. Reappointment for at least one term shall be

provided to the persons who are appointed to the Tribunals at a

young age by giving preference to the service rendered by them.

HOUSE RENT ALLOWANCE

37. According to Rule 15 of the 2020 Rules, the Chairperson and

the other members of the Tribunals shall be entitled to house rent

allowance at the same rate admissible to officers of the Government

of India holding grade ‘A’ posts carrying the same pay. The

contention of the learned Amicus Curiae is that it is a well-known fact

that it is difficult to get Judges of High Courts of merit and ability as

members of Tribunals, particularly due to the absence of a provision

for housing. Lack of housing facilities becomes a deterrent for

retired Judges from States outside Delhi to accept appointments to

the Tribunals. It will not be possible for a retired Judge of the

Supreme Court or the Chief Justice of a High Court or a Judge of a

42 | P a g e

High Court to get suitable accommodation in Delhi, where most of

the Tribunals are situated, for Rs. 75,000/- per month which is paid

as house rent allowance. Similarly, where tribunals have benches,

members (especially those drawn from amongst Advocates) would

find it hard put to find accommodation if there is insufficient

incentive, whenever they have to move to different cities. The

learned Attorney General relied upon the observations made by this

Court in Rojer Mathew (supra) that the retired Judges of the High

Court cannot be equated with the sitting Judges of the High Court

and are not entitled to the same perquisites. It is also the submission

of the learned Attorney General that it is not possible to provide

housing to all the Presiding Officers and members of the Tribunals in

view of the acute shortage of housing in Delhi.

38. Experience has shown that lack of housing in Delhi has been

one of the reasons for retired Judges of the High Courts and the

Supreme Court to not accept appointments to Tribunals. At the same

time, scarcity of housing is also a factor which needs to be kept in

mind. The only way to find a solution to this problem is to direct the

Government of India to make serious efforts to provide suitable

housing to the Chairperson and the members of the Tribunals and in

case providing housing is not possible, to enhance the house rent

43 | P a g e

allowance to Rs.1,25,000/- for members of Tribunals and

Rs.1,50,000/- for the Chairman or Chairperson or President and Vice

Chairman or Vice Chairperson or Vice President of Tribunals. In

other words, an option should be given to the Chairperson and the

members of the Tribunals to either apply for housing

accommodation to be provided by the Government of India as per

the existing rules or to accept the enhanced house rent allowance.

This direction shall be effective from 01.01.2021.

ADVOCATES AS JUDICIAL MEMBERS

39. The learned Amicus Curiae complained of the deliberate

exclusion of the Advocates from being considered for appointment

as judicial members in a majority of Tribunals by the 2020 Rules. It

was argued that in respect of seven tribunals (such as Central

Administrative Tribunal, Income Tax Appellate Tribunal, Customs

Excise and Sales Tax Appellate Tribunal, etc.), the 2020 Rules impose

a new condition whereby Advocates without 25 years of experience

are ineligible. It is submitted that there is nothing in the provisions

of the Finance Act, 2017, with respect to exclusion, from

consideration, of Advocates, nor any restrictive condition and, on the

other hand, the parent enactments and previously existing rules

enabled Advocates (who were eligible to be appointed as Judges of

44 | P a g e

High Courts) to be considered for appointment for these tribunals.

The learned Amicus curiae argued that it would be very difficult for

competent and successful Advocates, in the concerned field, to

uproot themselves and accept membership of tribunals, if they are

to be eligible at the late age of 50 years and resultantly, those less

competent would be willing, contrary to public interest. The

Attorney General had submitted that exclusion of Advocates was a

matter of policy and that the eligibility condition wherever they

could be considered, in some tribunals of 25 years practice, was to

bring about parity with members of the Indian Legal Service, who

could, in some instances be considered for appointment as judicial

members. During the submissions, the Attorney General had fairly

stated that the 2020 Rules will be amended making Advocates

eligible for appointment in the tribunals where they are presently

excluded under the 2020 Rules as judicial members provided, they

have 25 years of experience. This is in line with the previous rulings

of this Court that advocates and retired judges are to be considered

as judicial members of tribunals. Furthermore, this Court notices that

the 2017 Rules did not exclude Advocates from consideration; nor

did they impose restrictive eligibility conditions, such as 25 years of

experience.

45 | P a g e

40. The learned Amicus Curiae submitted that stipulation of 25

years of experience would be a serious handicap in selecting

meritorious candidates from among advocates. He suggested that

Advocates with the standing of 15 years at the bar should be made

eligible for being considered for appointment as judicial members

to the Tribunals. The learned Amicus Curiae further submitted that

Advocates should be made eligible for appointment to Single

Member Tribunals, particularly to the Debt Recovery Tribunals as

their experience in law can be suitably utilized. It is the submission

of learned Attorney General that though the Constitution prescribes

that an Advocate having experience of 10 years can be considered

for appointment as a Judge of a High Court, normally an Advocate is

considered only after he attains the age of 45 years. He suggested

that an experience of 25 years at the Bar would make Advocates at

the age of 47-48 years eligible for appointment as judicial members

of the Tribunals. It would be attractive for the Advocates to apply for

appointment to the post of judicial members of the Tribunals after

having experience of 25 years, especially due to the provision for re-

appointment.

41. In view of the submission of the learned Attorney General that

the 2020 the Rules will be amended to make Advocates eligible for

46 | P a g e

appointment to the post of judicial members of the Tribunals, the

only question that remains is regarding their experience at the bar.

While the Attorney General suggested that an advocate who has 25

years of experience should be considered for appointment as a

Judicial member, the learned Amicus Curiae suggested that it should

be 15 years. An Advocate of a High Court with experience of ten

years is qualified for appointment as a Judge of the High Court as per

Article 217 (2) of the Constitution of India. As the qualification for an

advocate of a High Court for appointment as a Judge of a High Court

is only 10 years, we are of the opinion that the experience at the bar

should be on the same lines for being considered for appointment as

a judicial member of a Tribunal. Exclusion of Advocates in 10 out of

19 tribunals, for consideration as judicial members, is therefore,

contrary to Union of India v. Madras Bar Association (2010)

19

and

Madras Bar Association v. Union of India (2015)

20

. However, it is

left open to the Search-cum-Selection Committee to take into account

in the experience of the Advocates at the bar and the specialization

of the Advocates in the relevant branch of law while considering

them for appointment as judicial members.

19

Para 120 (i) @ page 65, 2010 (11) SCC 1 @ page 65

20

Para 27, page 608 (2015 (8) SCC 583)

47 | P a g e

ELIGIBILITY OF MEMBERS OF INDIAN LEGAL SERVICE

42. The grievance of the learned Amicus Curiae is that members of

the Indian Legal Service have been made eligible for appointment

as judicial members to some Tribunals in spite of the judgment of this

Court in Union of India v. Madras Bar Association (2010) (supra),

wherein it was held that they can only be appointed as technical

members. The contention of the Union of India is that there is a

conflict of opinion in Union of India v. Madras Bar Association

(2010) (supra) and the judgment of this Court in S.P. Sampath Kumar

(supra). It was argued that this Court in S.P. Sampath Kumar (supra)

upheld the appointment of the members of the Indian Legal Service

as judicial members whereas in Union of India v. Madras Bar

Association (2010) (supra), it was held that the members of the

Indian Legal Services can only be appointed as technical members

of Tribunals. It was argued by the learned Attorney General that the

judgment of this Court in S.P. Sampath Kumar (supra) shall prevail

over a later judgment as both the judgments are delivered by

Constitution Benches of five Judges. Further submission made by the

learned Attorney General is that members of Indian Legal Service

are practicing lawyers who have experience of 7 years to 13 years

depending upon the grade in which they were recruited. He also

48 | P a g e

referred to the different cadres in the Indian Legal Service which are

directly related to law such as Advocates-on-Record or instructing

counsel working in the Central Agency Section in this Court or

holding the post of Director of Prosecution in the Central Bureau of

Investigation or legal advisors in the Ministry of Law and Justice. The

learned Attorney General further submitted that the experience of

the members of Indian Legal Service in various branches of law

would stand in good stead for their appointment as judicial

members. The learned Amicus Curiae does not have an objection to

members of Indian Legal Service who are practicing in Courts as

Government Advocates to be considered for appointment as judicial

members in Tribunals. But he suggested that this can be done only

by a legislative amendment in light of the law laid down in Union of

India v. Madras Bar Association (2010) (supra). He also submitted

that specialization being a mandatory requirement for Advocates

should be the same for members of the Indian Legal Service.

43. As we have already held that Advocates are entitled to be

considered as judicial members of the Tribunals, we see no harm in

members of the Indian Legal Service being considered as judicial

members, provided they satisfy the criteria relating to the standing

at the bar and specialization required. The judgment of Union of

49 | P a g e

India v. Madras Bar Association (2010) (supra) did not take note of

the above points relating to the experience of members of Indian

Legal Service at the bar. The Indian Legal Service was considered

along with the other civil services for the purpose of holding that the

members of Indian Legal Service are entitled to be appointed only

as technical members. In the light of the submission made by the

learned Attorney General and the Amicus Curiae, we hold that the

members of Indian Legal Service shall be entitled to be considered

for appointment as a judicial member subject to their fulfilling the

other criteria which advocates are subjected to. In addition, the

nature of work done by the members of the Indian Legal Service and

their specialization in the relevant branches of law shall be

considered by the Search -cum-Selection Committee while

evaluating their candidature.

44. We would wish to emphasize here that the setting up of

tribunals, and the subject matters they are expected to deal with,

having regard to the challenges faced by a growing modern

economy, are matters of executive policy. When it comes to

personnel who would operate these tribunals (given that the issues

they decide would ultimately reach this Court, in appellate review or

in some cases, judicial review), competence, especially in matters of

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law as well as procedure to be adopted by such judicial bodies,

becomes matters of concern for this Court. These tribunals discharge

a judicial role, and with respect to matters entrusted to them, the

jurisdiction of civil courts is usually barred. Therefore, wherever

legal expertise in the particular domain is implicated, it would be

natural that advocates with experience in the same, or ancillary field

would provide the “catchment” for consideration for membership.

This is also the case with selection of technical members, who would

have expertise in the scientific or technical, or wherever required,

policy background. These tribunals are expected to be

independent, vibrant and efficient in their functioning. Appointment

of competent lawyers and technical members is in furtherance of

judicial independence. Younger advocates who are around 45 years

old bring in fresh perspectives. Many states induct lawyers just after

7 years of practice directly as District Judges. If the justice delivery

system by tribunals is to be independent and vibrant, absorbing

technological changes and rapid advances, it is essential that those

practitioners with a certain vitality, energy and enthusiasm are

inducted. 25 years of practice even with a five-year degree holder,

would mean that the minimum age of induction would be 48 years: it

may be more, given the time taken to process recommendations.

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Therefore, a tenure without assured re-engagements would not be

feasible. A younger lawyer, who may not be suitable to continue after

one tenure (or is reluctant to continue), can still return, to the bar,

than an older one, who may not be able to piece her life together

again.

REMOVAL OF MEMBERS

45. Rule 8 of the 2020 Rules provides the procedure for inquiry of

misbehavior or incapacity of a member. According to the said Rule,

the preliminary scrutiny of the complaint is done by the Central

Government. If the Central Government finds that there are

reasonable grounds for conducting an inquiry into the allegations

made against a member in the complaint, it shall make a reference

to the Search-cum-Selection Committee which shall conduct an

inquiry and submit the report to the Central Government. The

learned Amicus Curiae argued that there is no clarity in the Rules as

to whether the reports submitted by the Search-cum-Selection

Committee are binding on the Central Government. According to

Mr. Datar, it is impermissible for the Central Government to further

scrutinize the report of the Search-cum-Selection Committee which

comprises of sitting and retired Judges. He submitted that the

proper procedure to be followed in matters of complaints against the

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Presiding Officers and members of the Tribunals is that a preliminary

scrutiny may be made by the Central Government and the report

should be placed before the Search-cum-Selection Committee. It is

open to the Search-cum-Selection Committee to accept or reject the

preliminary scrutiny. In case the Search-cum-Selection Committee

is of the opinion that the findings of the preliminary scrutiny are

correct, then the Search-cum-Selection Committee should be

entitled to proceed further to conduct an inquiry on its own, if it so

choses. The findings of the Search-cum-Selection Committee shall

be final and the action recommended by the Search-cum-Selection

Committee shall be implemented by the Central Government.

46. The learned Attorney General submitted that the preliminary

scrutiny done by the Central Government, according to Rule 8 (1) is

only for the purpose of weeding out frivolous complaints. The

learned Attorney General has also fairly submitted that the

recommendations made by the Search-cum-Selection Committee

shall be implemented by the Central Government. We are in

agreement with the submissions of the learned Attorney General.

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TIME LIMIT FOR APPOINTMENT

47. The learned Amicus Curiae brought to our notice that there are

several instances where appointments are delayed even after the

selections are completed by the Search-cum-Selection Committee.

The learned Attorney General also agreed that there is an imminent

need for appointments to be made in an expeditious manner, but

implored that no time be fixed for making appointments. The very

reason for constituting Tribunals is to supplement the functions of the

High Courts and the other Courts and to ensure that the consumer of

justice gets speedy redressal to his grievances. This would be

defeated if the Tribunals do not function effectively. It has been

brought to our notice that there are a large number of unfilled

vacancies hampering the progress of the functioning of the

Tribunals. The pendency of cases in the Tribunals is increasing

mainly due to the lack of personnel in the Tribunals which is due to

the delay in filling up the vacancies as and when they arise due to the

retirement of the members. There is imminent need for expediting

the process of selections and appointments to ensure speedy justice.

We, therefore, direct that the Government of India shall make the

appointments to the Tribunals within three months after the Search-

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cum-Selection Committee completes the selection and makes its

recommendations.

RETROSPECTIVITY OF THE 2020 RULES

48. The learned Amicus Curiae submitted that the 2020 Rules have

been made in exercise of the powers conferred by Section 184 of the

Finance Act, 2017. Rule 1(2) provides that Rules shall come into force

on the date of their publication in the Official Gazette. According to

the learned Amicus Curiae, the Rules have come into force on

12.02.2020, the date on which they were notified. He stated that it is

a well settled principle that delegated legislations such as Rules,

notifications and circulars cannot have retrospective effect unless the

parent statute itself permits such retrospective effect. He stated that

Section 183 of the Finance Act, 2017 enabled the notification of Rules

made under Section 184 to take effect from the appointed day. Under

Section 157 (a) of the Finance Act, 2017, the appointed day means

such date as the Central Government by notification in the Official

Gazette appoint. The date on which Rules were n otified is

12.02.2020. The learned Amicus Curiae relied upon the judgment

of this Court in Sri Vijayalakshmi Rice Mills v. State of A.P.

21

to

argue that the Rules cannot be given retrospective effect. He stated

21

(1976) 3 SCC 37

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that the 2017 Rules have become non est after being struck down in

Rojer Mathew (supra) and the 2020 Rules cannot be treated as an

amendment or modification of the 2017 Rules. He stressed on the

point that giving retrospective effect to 2020 Rules would result in

inequitable consequences and serious hardship. For instance, some

Vice Chairpersons, Vice Presidents and Vice Chairmen were

appointed for a period of three years with an upper age limit of 67

years under the 2017 Rules. However, under the 2020 Rules their

appointment period is four years with the upper age limit of 65 years.

The term of office of persons who are appointed under the 2017 Rules

would be altered if the 2020 Rules are given retrospective effect. The

learned Amicus Curiae was supported by other Senior Counsel who

vehemently argued that the 2020 Rules are only prospective.

49. The Attorney General argued that Section 183 of the Finance

Act, 2017 provided that the Rules made under Section 184 shall have

effect from the appointed day which was 26.05.2017. As per Section

183, all persons appointed prior to 26.05.2017 would be governed

by the old Acts and Rules under which the Tribunals were

established and those who are appointed after 26.05.2017 would be

governed by the 2017 Rules. The Attorney General further argued

that though the 2017 Rules were struck down by this Court in Rojer

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Mathew (supra), an opportunity was given to the Government of

India to frame new Rules and place them before this Court. As the

new Rules have been framed in exercise of powers under the

Finance Act, 2017, the 2020 Rules would be effective from

26.05.2017. The Government of India has filed M.A. No. 1152 of 2020

in Writ Petition (C) No. 279 of 2017 seeking a direction that the 2020

Rules would apply to all persons appointed as Members, Presidents

and Chairpersons to the Tribunals after appointed day i.e.

26.05.2017 in accordance with the mandate of Section 183 of the

Finance Act.

50. Before expressing our view on this point, it would be necessary

to refer to certain interim orders that were passed by this Court in

Rojer Mathew (supra). By an order dated 09.02.2018, this Court

gave certain interim directions regarding constitution of the Search-

cum-Selection Committee and other issues in relation to

appointments to the post of members of the Central Administrative

Tribunal. The direction with which we are concerned at present

pertains to appointments that were directed to be made pursuant to

the recommendations of the interim Search-cum-Selection

Committee which shall abide by the conditions of service stipulated

in the old Acts and Rules. By an order dated 20.03.2018, the order

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passed on 09.02.2018 was clarified by this Court and the tenure of

the Chairperson and the members was directed to be for a period of

five years. There is another order passed on 21.08.2018 by this Court

in Writ Petition (C) No. 279 of 2017 by which it was clarified that

appointments made to the post of members of the Customs Excise

Sales Tax Appellate Tribunal shall be for a period of five years or till

the member attains the age of 62 years. This Court clarified that the

President shall continue till he attains the age of 65 years. In respect

of the Central Administrative Tribunal, the old Rules were directed

to be applied.

51. The 2017 Rules have been declared as being contrary to the

parent enactment and the principles envisaged in the Constitution

and hence struck down by this Court in Rojer Mathew (supra). The

Central Government was directed to reformulate the Rules in

conformity and in accordance with the principles delineated by this

Court in its earlier judgment and the observations made in Rojer

Mathew (supra). The 2020 Rules are made in exercise of the power

conferred under Section 184 of the Finance Act which came into force

on their publication in the official Gazette as per Rule 1(2). The date

of publication of the 2020 Rules is 12.02.2020. We are unable to

accept the submission of learned Attorney General that the 2020

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Rules which replaced the 2017 Rules shall come into force with effect

from 26.05.2017 which was the appointed day in accordance with the

2017 Rules. It is true that the 2017 Rules were brought into force from

26.05.2017 and Section 183 of the Finance Act provides for any

appointment made after the appointed day shall be in accordance

with the Rules made under Section 184 of the Finance Act, 2017. 2017

Rules which have come into force with effect from 26.05.2017 in

accordance with Section 183 have been struck down by this Court.

The 2020 Rules which came into force from the date of their

publication in the Official Gazette, i.e. 12.02.2020, cannot be given

retrospective effect. The intention of Government of India to make

the 2020 Rules prospective is very clear from the notification dated

12.02.2020. In any event, subordinate legislation cannot be given

retrospective effect unless the parent statute specifically provides

for the same.

22

52. As we have held that the 2020 Rules are not retrospective, the

point that remains to be determined is the applicable Rules for

appointments that were made prior to the 2020 Rules. The

appointments made during the pendency of Rojer Mathew (supra)

22

ITO v. M.C. Ponnoose, (1969) 2 SCC 351; Sri Vijayalakshmi Rice Mills v. State of A.P., (1976) 3 SCC

37.

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on the date of interim orders passed therein and appointments made

after the judgment of Rojer Mathew (supra), like the appointments

made prior to the 2017 Rules are, no doubt, to be governed by the

then existing parent Acts and Rules. In view of the interim orders

passed by this Court in Rojer Mathew (supra), appointments made

during the pendency of the case in this Court are also to be governed

by the parent Acts and Rules and the clarifications issued by this

Court in Rojer Mathew (supra). According to paragraph 224 of the

judgment in Rojer Mathew (supra), the appointments to the

Tribunals were directed to be in terms of the respective Acts and

Rules which governed appointments to Tribunals prior to the

enactment of the Finance Act, 2017. For the purpose of clarity, we

hold that all appointments made prior to the 2020 Rules which came

into force on 12.02.2020 shall be governed by the parent Acts and

Rules. Any appointment made after the 2020 Rules have come into

force shall be in accordance with the 2020 Rules subject to the

modifications directed in the preceding paragraphs of this

judgment.

53. The upshot of the above discussion leads this court to issue the

following directions:

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(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 President of the Tribunal

and two Secretaries to the Government of India, the Search-

cum-Selection Committees should comprise of the following

members:

(a) The Chief Justice of India or his nominee—Chairperson

(with a casting vote).

(b) The outgoing Chairman or Chairperson or President of

the Tribunal in case of appointment of the Chairman or

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Chairperson or President of the Tribunal (or) the sitting

Chairman or Chairperson or President of the Tribunal in case

of appointment of other members of the Tribunal (or) a retired

Judge of the Supreme Court of India or a retired Chief Justice

of a High Court in case the Chairman or Chairperson or

President of the Tribunal is not a Judicial member or if the

Chairman or Chairperson or President of the Tribunal is

seeking re-appointment—member;

(c) Secretary to the Ministry of Law and Justice, Government

of India—member;

(d) Secretary to the Government of India from a department

other than the parent or sponsoring department, nominated

by the Cabinet Secretary—member;

(e) Secretary to the sponsoring or parent Ministry or

Department—Member Secretary/Convener (without a vote).

Till amendments are carried out, the 2020 Rules shall be read

in the manner indicated.

(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 instead of a

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panel of two or three persons for appointment to each post.

Another name may be recommend ed to be included in the

waiting list.

(iv) The Chairpersons, Vice-Chairpersons and the members of the

Tribunal shall hold office for a term of five years and shall be

eligible for reappointment. Rule 9(2) of the 2020 Rules shall be

amended to provide that the Vice -Chairman, Vice-

Chairperson and Vice President and other members shall hold

office till they attain the age of sixty-seven years.

(v) The Union of India shall make serious efforts to provide

suitable housing to the Chairman or Chairperson or President

and other 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 01.01.2021.

(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 c onsidering

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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.

(viii) Rule 8 of the 2020 Rules shall be amended to reflect that the

recommendations of the Search-cum-Selection Committee in

matters of disciplinary actions shall be final and the

recommendations of the Search-cum-Selection Committee

shall be implemented by the Central Government.

(ix) The Union of India shall make appointments to Tribunals within

three months from the date on which the Search-cum-Selection

Committee completes the selection process and makes its

recommendations.

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(x) The 2020 Rules shall have prospective effect and will be

applicable from 12.02.2020, as per Rule 1(2) of the 2020 Rules.

(xi) Appointments made prior to the 2017 Rules are governed by

the parent Acts and Rules which established the concerned

Tribunals. In view of the interim orders passed by the Court in

Rojer Mathew (supra), appointments made during the

pendency of Rojer Mathew (supra) were also governed by the

parent Acts and Rules. Any appointments that were made after

the 2020 Rules came into force i.e. on or after 12.02.2020 shall

be governed by the 2020 Rules subject to the modifications

directed in the preceding paragraphs of this judgment.

(xii) Appointments made under the 2020 Rules till the date of this

judgment, shall not be considered invalid, insofar as they

conformed to the recommendations of the Search -cum-

Selection Committees in terms of the 2020 Rules. Such

appointments are upheld, and shall not be called into question

on the ground that the Search-cum-Selection Committees

which recommended the appointment of Chairman,

Chairperson, President or other members were in terms of the

2020 Rules, as they stood before the modifications directed in

this judgment. They are, in other words, saved.

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(xiii) In case the Search-cum-Selection Committees have made

recommendations after conducting selections in accordance

with the 2020 Rules, appointments shall be made within three

months from today and shall not be subject matter of challenge

on the ground that they are not in accord with this judgment.

(xiv) 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 12.02.2020 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 12.02.2020. While reserving the

matter for judgment on 09.10.2020, 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.

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54. We will be failing in our duty unless we acknowledge the

invaluable assistance of Mr. Arvind Datar, learned Amicus Curiae,

Mr. K.K. Venugopal, learned Attorney General, Mr. S.V. Raju and Mr.

Balbir Singh, learned Additional Solicitors General and the other

senior counsel and advocates.

55. For the aforementioned reasons, the Writ Petitions, Transfer

Petitions, Civil Appeals and all the Applications are disposed of.

Epilogue

Dispensation of justice by the Tribunals can be effective only

when they function independent of any executive control: this

renders them credible and generates public confidence. We have

noticed a disturbing trend of the Government not implementing the

directions issued by this Court. To ensure that the Tribunals should

not function as another department under the control of the

executive, repeated directions have been issued which have gone

unheeded forcing the Petitioner to approach this Court time and

again. It is high time that we put an end to this practice. Rules are

framed which are completely contrary to the directions issued by

this Court. Upon the tribunals has devolved the task of marking

boundaries of what is legally permissible and feasible (as opposed

to what is not lawful and is indefensible) conduct, in a normative

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sense guiding future behavior of those subject to the jurisdictions of

such tribunals. This task is rendered even more crucial, given that

appeals against their decisions lie directly to the Supreme Court and

public law intervention on the merits of such decisions is all but

excluded. Also, these tribunals are expected to be consistent, and

therefore, adhere to their precedents, inasmuch as they oversee

regulatory behavior in several key areas of the economy. Therefore,

it is crucial that these tribunals are run by a robust mix of experts,

i.e. those with experience in policy in the relevant field, and those

with judicial or legal experience and competence in such fields. The

functioning or non-functioning of any of these tribunals due to lack of

competence or understanding has a direct adverse impact on those

who expect effective and swift justice from them. The resultant fallout

is invariably an increased docket load, especially by recourse to

Article 226 of the Constitution of India. These aspects are highlighted

once again to stress that these tribunals do not function in isolation,

but are a part of the larger scheme of justice dispensation envisioned

by the Constitution and have to function independently, and

effectively, to live up to their mandate. The involvement of this Court,

in the series of decisions, rendered by no less than six Constitution

Benches, underscores the importance of this aspect. The role of both

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the courts as upholders of judicial independence, and the executive

as the policy making and implementing limb of governance, is to be

concordat and collaborative. This Court expects that the present

directions are adhered to and implemented, so that future litigation

is avoided.

The Government is, accordingly, directed to strictly adhere to

the directions given above and not force the Petitioner-Madras Bar

Association, which has been relentless in its efforts to ensure judicial

independence of the Tribunals, to knock the doors of this Court

again.

...................................J.

[L. NAGESWARA RAO]

..................................J.

[HEMANT GUPTA]

..................................J.

[S. RAVINDRA BHAT]

New Delhi,

November 27, 2020.