Tribunals And Their Increasing Role In Adjudication

Several committees i.e. Administrative Reforms Commission, 1966;  Wanchoo Committee, 1970; High Courts Arrear Committee Report, 1972; Swaran Singh Committee , 1976 had recommended establishment of Tribunals for speedy justice. Part XIV was introduced in the Constitution vide 42^nd Amendment empowering Parliament and State Legislature to establish Tribunals.

What are Administrative Tribunals ?

Article 323A provides that Parliament by law may provide for the adjudication or trial by Administrative Tribunals of disputes and complaints with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under control of Government of India or any corporation owned or controlled by the Government.

Any such law made by Parliament may provide for the following:

• Provide for the establishment of an administrative tribunal for the Union and a separate administrative tribunal for each State or for two or more states
• Specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said Tribunal.
• Provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals.
• Exclude the jurisdiction of all courts, except the jurisdiction of the Supreme Court under Article 136, with respect to the disputes or complaints
• Provide for the transfer of each such administrative tribunal of any cases pending before any court or other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the cause of action on which such suits or proceedings are based had arisen after such establishment.
• Repeal or amend any order made by the President under Article 371 D (3).
• Contain such supplemental, incidental or consequential provisions (including provisions as to fees) as Parliament may deem necessary for effective functioning or, and for speedy disposal of cases by, and the enforcement of the orders of , such tribunals.

Tribunals for other matters

Article 323B provides for constitution of Tribunals for other matters. The appropriate legislature having competency may be law provide for the adjudication or trial by tribunals of any disputes, complaints or offences with respect to all or any of the following matters:

• Levy, assessment, collection and enforcement of any tax
• Foreign exchange, import and export across customs frontiers
• Industrial and labour disputes
• Land reforms by way of acquisition by the State of any estate as defined in Article 31A or of any rights therein or the extinguishment or modification of any such rights or by way of ceiling on agricultural land or in any other way.
• Ceiling on urban property.
• Election to either house of Parliament or the House or either House of the Legislature of a State but excluding the matters referred to in Article 329 and Article 329 A.
• Production, procurement, supply and distribution of foodstuffs (including edible oilseeds and oils) and such other goods as the President may, by public notification, declare to be essential goods for the purpose of this article and control of prices of such goods.
• Rent, its regulation and control and tenancy issues including the rights, title and interest of landlords and tenants.
• Offences against laws with respect to any of the matters specified in sub-clauses (a) to (h) and fees in respect of any of those matters
• Any matters incidental to aforesaid matters

A law made by appropriate legislature may provide for the following.

• Provide for the establishment of a hierarchy of tribunals
• Specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be excercised by each of the said tribunals
• Provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals
• Exclude the jurisdiction of all courts except the jurisdiction of the Supreme Court under Article 136 with respect to all or any of the matters falling within the jurisdiction of the said tribunals.
• Provide for the transfer to each such tribunal of any cases pending before any court or any other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment.
• Contain such supplemental, incidental and consequential provisions (including provisions as to fees) as the appropriate legislature may deem necessary for the effective functioning of and for the speedy disposal of cases by, and enforcement of the orders, of such tribunals.

What are challenges of tribunalization of justice ?

The need for tribunals has been realized due to overburdening of courts, technical nature of various matters and delay in determination.

The power of establishment of tribunals lies with Parliament or State Legislature. A number of Tribunals have been established by Parliament and State Legislatures. Central Administrative Tribunal has been constituted for adjudication of administrative matters.  DRT, DRAT, NCLT, NCLAT, Consumer Forums etc. have been constituted for adjudication of other matters.

But tribunalisation of justice has its own challenges.  The tribunals lack physical infrastructure as well as sufficient manpower. Many times vacancies of presiding officers are not filled in time leading to increase in pendency of matters. Further, there are concerns of independence of tribunals in delivering justice as many aspects of working of tribunals are controlled by Government and in many cases which come before these tribunals, government is also a party.

Many disputes regarding constitution of Tribunals  have reached  to the corridors of the Supreme Court.

S P Sampath Kumar Vs. Union of India

Validity of 42^nd amendment regarding constitution of Administrative Tribunals were challenged in S P Sampath Kumar Vs. Union of India ((1987) 1 SCC 124)   One of the major issue involved was whether exclusion of power of judicial review of High Court under Administrative Tribunal Act, 1985 was correct. The Supreme Court held that judicial review has not been completely barred as appellate and original jurisdiction of the Supreme Court has been saved.

L Chandrakumar Vs. Union of India

The Supreme Court reversed the judgment of S P Sampath Kumar in   L. Chandrakumar   Vs. Union of India (1997) 3 SCC 261. The Supreme Court held that power of  judicial review  of High Courts is basic structure of the Constitution and the same cannot be taken away.

Union of India VS R Gandhi  (MBA I)

A High-Level Committee on law relating to insolvency of companies was constituted by the Union of India under the Chairmanship of Justice V. Balakrishna Eradi, retired Judge of this Court who made certain recommendations for setting up the National Company Law Tribunal combining the powers of the Company Law Board under the Companies Act, 1956, BIFR and AAIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 and the jurisdiction and powers relating to winding up vested in the High Courts. The Government accepted the recommendations and passed the Companies (Second Amendment) Act, 2002. The reason for the said amendment was to avoid multiplicity of litigation before various fora and to reduce pendency of cases. The Madras Bar Association filed a writ petition in the Madras High Court challenging the constitutional validity of the said amendment to the 1956 Act on the ground of legislative incompetence and violation of the doctrines of separation of powers and independence of the judiciary. The High Court upheld the validity of the Amendment Act of 2002 but pointed out certain defects in the provisions of the Act. The High Court declared that the NCLT and the National Company Law Appellate Tribunal cannot be constituted without removing the defects pointed out in the judgment. The judgment of the High Court was upheld by this Court in Union of India v. R. Gandhi, President, Madras Bar Association ((2010) 11 SCC 1 ))  Parts I-B and I-C of the 1956 Act were directed to be modified in accordance with the observations made in the judgment

Madras Bar Association Vs. Union of India  (MBA II)

The Companies Act, 2013, which replaced the 1956 Act, contained provisions for establishment of the NCLT and the NCLAT. Madras Bar Association filed a writ petition under Article 32 of the Constitution challenging the formation of NCLT under Section 408 of the 2013 Act. Several other provisions pertaining to constitution of the NCLT and the NCLAT, qualifications for appointment of Members and Chairperson /President and constitution of the Selection Committee were also assailed in the said writ petition. The Supreme Court in Madras Bar Association Vs. Union of India  (2014) 10 SCC 1)  upheld the validity of Section 408 by which the NCLT was constituted. However, clauses (a) and (e) of Section 409(3) relating to the appointment of Technical Members were held to be invalid. Section 411(3), which provided qualifications of Technical Members, and Section 412(2), which dealt with the constitution of the Selection Committee, were also held to be invalid. A direction was given to the Union of India to scrupulously follow the judgment in MBA-I and set right the defects that were pointed out therein by bringing the provisions in accord with the MBA-I judgment.  

Roger Mathews Vs. South Indian Bank

In Roger Mathews Vs South Indian Bank (2020 ) 6 SCC  validity of  Finance Act, 2017, which amended various enactments related with multiple tribunals to bring about uniformity, were challenged. .

The Supreme Court held the delegation under Section 184 of Finance Act is not excessive. The Supreme Court held that Search-cum-Selection Committee as envisaged in the rules are against the constitutional scheme as judicial role has been diluted.  The Supreme Court held that s Tribunal to have the character of a quasi- judicial body and a legitimate replacement of Courts, must essentially possess a dominant judicial character through their members/presiding officers. The Court reiterated that reiterate that Members and Presiding Officers of Tribunals cannot be removed without either the concurrence of the Judiciary or in the manner specified in the Constitution for Constitutional Court judges. The Court observed that the Rules would require a second look since the extremely short tenure of the Members of Tribunals is anti-merit and has the effect of discouraging meritorious candidates to accept posts of Judicial Members in Tribunals. The Court observed that What appears to be of paramount importance is that every Tribunal must enjoy adequate financial independence for the purpose of its day to day functioning including the expenditure to be incurred on (a) recruitment of staff; (b) creation of infrastructure; (c) modernisation of infrastructure; (d) computerisation; (e) perquisites and other facilities admissible to the Presiding Authority or the Members of such Tribunal. The Supreme Court observed in respect of appeals from tribunals  that it is high time that the Union of India, in consultation with either the Law Commission or any other expert body, revisit such provisions under various enactments providing for direct appeals to the Supreme Court against orders of Tribunals, and instead provide appeals to Division Benches of High Courts, if at all necessary.

The Supreme Court struck down the entire rules for being violative of  judgments in R. K Jain, L Chandra Kumar and Madras Bar Association.  

One issue was also involved whether such provisions could have been passed as money bill. The same was referred to Constitution Bench of seven judges.

Madras Bar Association Vs. Union of India (MBA III)

On 12.02.2020, a notification was issued by the Central Government by which the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020 were framed. The validity of the 2020 Rules was challenged by Madras Bar Association. After detailed deliberations on the issues involved,  the Supreme  Court by its judgment in Madras Bar Association v. Union of India & Anr. (Writ Petition (C) No.804 of 2020)   issued the various directions.

“Madras Bar Association Vs. Union of India   (MBA IV)

The Tribunal Reforms (Rationalisation and Conditions of Service) Bill, 2021 was introduced in the Lok Sabha on 13.02.2021 but could not be taken up for consideration. According to the Statement of objects and reasons, the said Bill was proposed with a view to streamline tribunals and sought to abolish certain tribunals and other authorities, which “only add to another additional layer of litigation” and were not “beneficial for the public at large”. Thereafter, the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (hereinafter referred to as the Ordinance) was promulgated on 04.04.2021. Chapter II thereof makes amendments to the Finance Act, 2017. The dispute raised in this Writ Petition relates to the first proviso to Section 184(1) according to which a person below the age of 50 years shall not be eligible for appointment as Chairperson or Member and also the second proviso, read with the third proviso, which stipulates that the allowances and benefits payable to Chairpersons and Members shall be the same as a Central Government officer holding a post carrying the same pay as that of the Chairpersons and Members. Section 184(7) stipulates that the Selection Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member and the Central Government shall take a decision preferably within three months from the date of the recommendation of the Committee, notwithstanding any judgment, order or decree of any Court. The said provision is also assailed in this Writ Petition. Section 184 (11) which shall be deemed to have been inserted with effect from 26.05.2017 provides that the term of office of the Chairperson and Member of a tribunal shall be four years. The age of retirement of the Chairperson and Members is specified as 70 years and 67 years, respectively. If the term of office or the age of retirement specified in the order of appointment issued by the Central Government for those who have been appointed between 26.05.2017 and 04.04.2021 is greater than that specified in Section 184(11), the term of office or the age of retirement shall be as set out in the order of appointment, subject to a maximum term of office of five years. The validity of Section 184(11) is also challenged in the Writ Petition.

The Court   in  Madras Bar Association Vs. Union of India  (Writ Petition (Civil) No.502 of 2021) concluded that the first proviso and the second proviso, read with the third proviso, to Section 184 overriding the judgment of this Court in MBA-III in respect of fixing 50 years as minimum age for appointment and payment of HRA, Section 184(7) relating to recommendation of two names for each post by the SCSC and further, requiring the decision to be taken by the Government preferably within three months.

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