From UPSC perspective, the following things are important :
Prelims level : Not much.
Mains level : Paper 2- Provision of constitution of tribunal, tenure and the SC directives.
The reframed Tribunal rules are in contempt of several Constitution Bench decisions of the Supreme Court.
What the SC said in Rojer Mathew case
- Rules being unconstitutional: In November 2019, a Constitution Bench of the Supreme Court, in Rojer Mathew, declared the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and other Conditions of Service of Members) Rules, 2017 as unconstitutional.
- Why it was declared unconstitutional? It was declared unconstitutional for being violative of principles of independence of the judiciary and contrary to earlier decisions of the Supreme Court in the Madras Bar Association
- Direction to the Central government: In Rojer Mathew, there was also a direction to the Central government to reformulate the rules strictly in accordance with principles delineated by the Court in its earlier decisions.
- The reframed rules, notified by the Ministry of Finance, however, suffer from the same vices.
What were the issues in the Finance Act, 2017
- What was prescribed in the Finance Act, 2017: The Finance Act, 2017, around 26 Central statutes were amended.
- Excessive rule-making powers to the Centre government: The power to prescribe eligibility criteria, selection process, removal, salaries, tenure and other service conditions pertaining to various members of 19 tribunals were sub-delegated to the rule-making powers of the Central government.
- Attempt to keep the judiciary away: Describing the search-cum-selection-committee as an attempt to keep the judiciary away from the process of selection and appointment of members, vice-chairman and chairman of tribunals.
- Executive litigant in most cases: The Court held that the executive is a litigating party in most of the litigation and hence cannot be allowed to be a dominant participant in tribunal appointments.
- Selection committee issue: Barring the National Company Law Appellate Tribunal (NCLAT), the selection committee for all other tribunals was made up either entirely from personnel within or nominated by the Central government or comprised a majority of personnel from the Central government.
- While the selection committee for NCLAT consisted of two judges and two secretaries to the Government of India, all other committees comprised only one judge and three secretaries to the Government of India. Now, in the 2020 rules, by default, all committees consist of a judge, the president/chairman/chairperson of the tribunal concerned and two secretaries to the Government of India
- 3 years tenure injurious to the efficiency: Reiterating its previous decision in Madras Bar Association (2010), the Court held that the tenure of three years for members will “preclude cultivation of adjudicatory experience and is thus injurious to the efficiency of the Tribunals”.
An equal say for the judiciary
- 2 Judges in 4 member committee: The common thread in the Madras Bar Association series and Rojer Mathew decisions is that judiciary must have an equal say in the appointment of members of the tribunals.
- To deny the executive an upper hand in appointing members to tribunals, the court ordered to have two judges of the Supreme Court to be a part of the four-member selection committee.
- In Madras Bar Association(2010), held that the selection committee should comprise the Chief Justice of India or his nominee (chairperson, with a casting vote), a senior judge of the Supreme Court or Chief Justice of the High Court, and secretaries in the Ministry of Finance and Ministry of Law and Justice respectively.
- Decision applicable to all tribunals: Subsequent Constitution Bench decisions in Madras Bar Association (2014), Rojer Mathew and the decision of the Madras High Court in Shamnad Basheer have repeatedly held that the principles of the Madras Bar Association (2010) are applicable to the selection process and constitution of all tribunals in India.
- What are the provisions dealing with appointment in 2020 rules? Under the 2020 rules, the inclusion of the president/ chairman/chairperson of the tribunal as a member in the selection committee is in the teeth of previous decisions of the Supreme Court.
- Non-judicial member can become a chairman: For instance, now, in the Income Tax Appellate Tribunal (ITAT), Customs Excise and Service Tax Appellate Tribunal (CESTAT), Central Administrative Tribunal (CAT), Debt Recovery Appellate Tribunal (DRAT), etc. a non-judicial member can become the president/chairman/chairperson, as the case may be.
- Therefore, when a non-judicial member becomes a member in the selection committee, the Supreme Court judge will be in minority, giving primacy to the executive, which is impermissible.
- Only judges and advocates can be judicial members: In Madras Bar Association (2010), the Court explicitly held that only judges and advocates can be considered for appointment as a judicial member of the tribunal and that persons from the Indian Legal Service cannot be considered for appointment as judicial member.
- Recently, in Revenue Bar Association (2019), the Madras High Court declared Section 110(1)(b)(iii) of the CGST Act, 2017 as unconstitutional for allowing members of Indian Legal Service to be judicial members in GSTAT.
Violation of the SC directives
- What the SC said on tenure: Based on Madras Bar Association (2010), in Rojer Mathew, the Court held that the term of three years is too short, and by the time members achieve a refined knowledge, expertise and efficiency, one term will be over.
- What are the provisions in 2020 rules? In the 2020 rules, the tenure of members has been increased from three years to four years, thereby blatantly violating the directions of the Supreme Court.
- Since the Madras Bar Association (2010), the government has repeatedly violated the directions of the Supreme Court.
- One by one, the traditional courts, including the High Courts, have been divested of their jurisdictions and several tribunals have been set up.
The 2020 rules are, thus, in contempt of several Constitution Bench decisions of the Supreme Court. Unless the Court comes down heavily on the Central government, we will see these encroachments over and over again.