Judgments

ROJER MATHEW VS SOUTH INDIAN BANK LTD : CASE SUMMARY

The Supreme Court in Rojer Mathew Vs Indian Bank Ltd and Ors (2020) 6 SCC 1   struck down the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience, and other Conditions of Service of Members) Rules, 2017. The Supreme Court also referred the issue ,whether Part -XIV of Finance Act, 2017 could have been passed as money bill,  to larger bench.

FACTS OF THE CASE

Several Petitions were filed before the Supreme Court seeking intervention in constitution and management of Tribunals. Petitioner Roger Mathew has claimed that the Constitution of Debt Recovery Tribunals was not in consonance with spirit of judicial independence. Petitioner Madras Bar Association had prayed for shifting the administration of Tribunals to Ministry of Law and Justice and judicial impact assessment of Tribunals. Petitioner Kudrat Sandhu had filed Writ Petition challenging the Part XIV of Finance Act, 2017 whereby provisions of twenty five different enactments were amended in respect of qualifications, methods of appointment, terms of office etc of members and chairman of different Tribunals.

FINDINGS OF THE COURT

The Supreme Court noted that number of Tribunals have increased on account of judicial delays in regular courts and increasing number of specialized and commercial matters. Tribunals, although not strictly courts, they perform judicial functions. Technical members are included to comprehend and decide issues involving specialized knowledge.

The Supreme Court noted that tribunalisation is an international phenomena. Tribunals are present in several jurisdictions including UK, Canada and France. The genesis of tribunalisation in India can be traced back to formation of ITAT. Article 323A and 323 B were introduced vide 42nd Amendment Act which paved way for establishment of tribunals in different fields. Subsequently Administrative Tribunal Act, 1985, National Environment Tribunal Act, 1995, National Environment Appellate Authority Act, 1997 etc. were passed setting up Tribunals.

The Supreme Court in Jaswant Paper Mills Ltd., Meerut Vs Laskhichand   AIR 1963 SC 677 held that any adjudicatory body vested with power to taking evidence, summoning of witnesses must be categorized as Tribunal.

The Supreme Court in R. K. Jain Vs Union of India (1993) 4 SCC 119 observed that members of tribunals exercise quasi-judicial functions as such it is imperative that they possess requisite legal expertise, judicial experience and an iota of legal training.

The Supreme Court in L. Chandra Kumar Vs Union of India  (1997) 3 SCC 261 observed that all tribunals be brought to administration of single nodal ministry most appropriately Ministry of Law and Justice.

The Supreme Court in Union of India Vs R Gandhi, President, Madras Bar Association (2010) 11 SCC 1 observed that Tribunals must possess independence, security and capacity. It would be imperative to include member of judiciary as presiding officer of the Tribunal. Technical member can only be in addition to judicial member only when specialized knowledge or know how is required.

The Supreme Court in Madras Bar Association Vs Union of India (2014) 10 SCC 1  observed that procedure of appointment and conditions of service of members must be akin to judges of the Courts which were sought to be substituted by the Tribunals.

The Supreme Court in Madras Bar Association Vs. Union of India  (2015 ) 8 SCC 583 held establishment of NCLT and NCLAT valid but directed for curing defects as per dictum of R. Gandhi.

Following important issues were determined by the Supreme Court in this matter.

(i) Whether Finance Act, 2017 in so far as it amends conditions of service of persons manning tribunals could have been passed as money bill ?

Procedure of passing of money bills is different from passing of ordinary bills. Rajya Sabha has limited role in passing of money bills. Money bills have been defined under Article 110 (1) which contains “only” provisions  covered by sub-clauses (a) to (g). These bills can only be introduced in Lok Sabha and role of Rajya Sabha is only consultative. Under Article 110 (4) every money bill has to be certified by the Speaker of the Lok Sabha.

The Union relied on Article 110 (3) and Article 122 and contended that once money bill is certified by the Speaker the same cannot be scrutinized by the Court.

The Supreme Court relied  on Raja Ram Pal vs Lok Sabha (2007) 3 SCC184 wherein it has been held that immunity granted under Article 122 (1) and Article 212 (1) is limited to “irregularity of procedure” and does not extend to substantive illegality or unconstitutionality.

The Court noted that in K. S. Puttaswamy Vs Union of India (2016 ) 3 SCC 183 the use of word “only” was not examined and answered by the majority judgment. The majority judgment did not advert to doctrine of pith and substance. The Supreme Court referred the matter to the larger bench.

(ii) Whether Section 184 of the Finance Act, 2017 is unconstitutional on account of excessive delegation ?

The Supreme Court held that Section 184 does not suffer from vice of unguided delegation although it fails to specify eligibility qualification for members, chairpersons, chairman etc. The delegate has to mandatory follow the decisions of the Supreme Court in R. K. Jain, L. Chandra Kumar, R Gandhi and Gujarat Urja Vikas. The Supreme Court noted that in many other enactments qualifications have not been prescribed and left for the delegate to prescribe qualification. Section 184 was inserted to bring out uniformity and with a view to harmonise the diverse and wide ranging qualifications.

(iii) Whether Tribunal, Appellate Tribunal, and Other Authorities (Qualification , 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 the tribunals ?

The Supreme Court observed that Search-cum- Selection committee as formulated under rules is an attempt to keep judiciary away from process of selection and appointment of members, vice-chairman and chairman. The Supreme Court observed that in  Supreme Court Advocate-on- Record Association Vs Union of India (Fourth Judges Case) , it has been held that primacy of judiciary is imperative in appointment of judicial officers. Executive is a dominant litigation party  and it can not be given primacy in appointments of members of Tribunals.

The Supreme Court noted that earlier only retired judges of the Supreme Court or High Court could be the presiding members of most of the Tribunals. Under the new rules Central Government has made persons with no judicial or legal experience eligible. In some cases retires Supreme Court judge as well as retired High Court judge has been made eligible, although position of retired Supreme Court judge and retried High Court judge are not equal.

The Court also noted that members of Tribunals can not be removed without concurrence of judiciary.

The Supreme Court also observed that rules would require relook as since extremely short tenure of members of Tribunals is anti-merit and has effect of discouraging meritorious candidates to accept posts of judicial members in Tribunals.

In light of aforesaid lacuna, the Supreme Court struck down Tribunal, Appellate Tribunal, and Other Authorities (Qualification , Experience and Other Conditions of Service of Members ) Rules, 2017.

(iv) Whether there should be a single nodal agency for administration of all Tribunals ?

The Supreme Court took notice of the statement of Union that Ministry of Law and Justice is overburdened and can not act as single nodal agency for administration of all Tribunals. However the Supreme Court emphasized the need of financial independence of  Tribunals. It directed the Ministry of Finance to earmark separate funds for Tribunals.

(v) Whether there is need of conducting judicial impact assessment of all Tribunals in India ?

The Supreme Court directed Union of India to carry out financial impact assessment in respect of all tribunals and undertake exercise to assess need based requirements and make available sufficient resources for each Tribunal established by Parliament.

(vi) Whether judges of Tribunals set up under Article 323 A and 323 B can be equated in “rank” and “status” with constitutional functionaries?

The Supreme Court observed that Tribunals are not substitutes of Constitutional Courts. Status of members of Tribunals can not be equated with sitting members of Constitutional Courts.  The Supreme Court directed Union of India to ensure that judges of High Courts and the Supreme Court are on a separate pedestal distanced from any other tribunal or quasi-judicial authority.

(vii) Whether direct appeal to Supreme Court from Tribunals need to be detoured ?

Statutory appeals from appellate tribunals to the Supreme Court have been provided in several enactments.  The Supreme Court noted that provisions for statutory appeals to the Supreme Court is being made without any judicial impact assessment. Such provisions are bogging the Supreme Court down and inhibiting its constitutional objectives. Further such appeals is against the spirit of Tribunalisation. The Supreme Court recommended Union of India for revisit of such provisions with consultation with expert body.

(viii) Whether there is need for amalgamation of existing Tribunals ?

The Supreme Court directed the Union to rationalize and amalgamate the existing Tribunals depending on case load and commonality of subject-matter after conducting judicial impact assessment. Union should ensure that circuit benches of Tribunals are set up at the seats of all major jurisdictional High Courts.

__________________________________________

Mukesh Kumar Suman is an advocate and legal author based at Delhi. He regularly appears before various Judicial Forums including NCLT, NCLAT, High Courts and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.

Mukesh Kumar Suman

Mukesh Kumar Suman

Mukesh Kumar Suman is an advocate based at Delhi. He has rich experience in civil, criminal, commercial, arbitration and corporate insolvency matters. He regularly appears before District Courts, NCLT, NCLAT, High Court and the Supreme Court. He can be approached at mukesh_suman@outlook.com or +91 9717864570.

Leave a Reply

Your email address will not be published. Required fields are marked *