The Supreme Court has struck down the provisions of the Tribunals Reforms Act, 2021, relating to appointment & tenure of tribunal members, observing it as a clear attempt to nullify binding judicial directions without addressing the underlying constitutional infirmities. The Court strongly said that the 2021 Act is a mere reproduction of the Tribunals Reforms Ordinance that was already declared unconstitutional by the Larger Bench comprising Justices L. Nageswara Rao, Hemant Gupta, and S. Ravindra Bhat in July 2021, and therefore, in contravention of the previous binding judicial decisions.
The Court found that, as the provisions were earlier struck down by the Supreme Court, the same are reintroduced by the Union government with minor tweaks, which violate the constitutional principles of separation of powers and judicial independence, which are firmly embedded in the text, structure, and spirit of the Constitution. Even though the law of the land had repeatedly clarified the standards governing the appointment, tenure, and functioning of tribunal members, the parliament, instead of curing the defects, slightly altered the very form, which amounts to a legislative override.
The Court clarified that the directions on composition, tenure and conditions of service were in the nature of mandamus flowing from adjudication on separation of powers, independence of the judiciary and Article 14, and therefore constitute “law declared” under Article 141. Second, while the legislature may neutralise a judgment by curing the underlying defect, it cannot simply re-enact the very provision or rule that was struck down and declare the Court’s view to be non-binding. Such repetition was an “impermissible legislative override” and an “indirect intrusion into the judicial sphere”.
The Division Bench comprising the Chief Justice B.R. Gavai and Justice K.V. Chandran observed that across the Copyright Act, Customs Act, Patents Act, and Airports Authority of India Act, the paired provisions reproduced in the Impugned Act are substantively identical to those found in the earlier Ordinance. Each set abolishes existing tribunal or appellate structures, such as the Appellate Board, Appellate Authority, or other specialised tribunals, and transfers their jurisdiction to High Courts or Commercial Courts.
The Bench noted that the wording, structure, and legal effect remain the same in both versions, with only minor formatting or clarificatory differences. In essence, the Impugned Act simply carries forward, almost verbatim, the amendments earlier introduced through the 2021 Ordinance, reaffirming the same statutory shift from tribunal-based adjudication to court-based adjudication.
Essentially, the Bench pointed out that what the 2021 Ordinance did through amendments to Section 184 of the Finance Act, 2017, the Impugned Act now does through Sections 3, 5, and 7. The minimum age bar of fifty years for all appointments, the truncated four-year tenure with upper age caps of 70/67, the requirement that the Search-cum-Selection Committee forward a panel of two names for each vacancy, and the fixing of allowances and benefits to those of equivalent civil servants are all provisions that have already been judicially tested and struck down.
Merely shifting the same content from the amended Section 184 of the Finance Act into Sections 3, 5 and 7 of a stand-alone statute, while using the non obstante formula “notwithstanding anything contained in any judgment or order”, does not cure the constitutional defects. It simply re-enacts them in another avatar. The Impugned Act, therefore, does not “cure” the law declared earlier, but consciously defies it, added the Bench.
Lastly, the Bench quoted Dr B.R. Ambedkar from the Constituent Assembly Debate of November 04, 1948, where it was said that “the form of the administration must be appropriate to and in the same sense as the form of the Constitution. The other is that it is perfectly possible to pervert the Constitution, without changing its form, by merely changing the form of the administration, and to make it inconsistent and opposed to the spirit of the Constitution”, to emphasise that the repeated reenactment of the same provisions, which have been struck down by the judiciary, shows that the “form of the administration” is being made “inconsistent” with the spirit of the Constitution.
Hence, the Bench concluded that unless Parliament enacts an appropriate legislation that faithfully gives effect to those principles, the principles and directions laid down in previous decisions by this Court in the Madras Bar Association case shall continue to govern all matters relating to the appointment, qualifications, tenure, service conditions, and allied aspects concerning tribunal members and chairpersons. Accordingly, they shall operate as the controlling framework.
The dispute has its roots back when the Madras Bar Association challenged the constitutionality of the Finance Act, 2017, and the Tribunal, Appellate Tribunal, and Other Authorities (Qualifications, Experience, and Other Conditions of Service of Members) Rules, 2017, contending that the changes introduced through this Act involving tribunal appointments, qualifications, tenure, and conditions of service do not pertain to financial matters; consequently, the passage of this Act as a Money Bill was unconstitutional and a violation of legislative processes. The Madras Bar Association further contended that the Tribunal Rules, 2017, afforded the executive excessive control over the appointments, conditions of service, and functioning of members of the tribunals, which would compromise the independence of the tribunals and violate the principle of separation of powers.
Thereafter, in July 2021, the Supreme Court has struck down Section 184 of the Finance Act, 2017, as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021, holding that Section 184(11) of the Finance Act, which prescribed a fixed tenure of four years for members, and chairpersons of tribunals, was contrary to the principles of separation of powers, independence of judiciary, rule of law and Article 14 of the Constitution. Later, the Tribunals Reforms Act, 2021, replaced the earlier Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021, which had drawn similar constitutional challenges.
Appearances:
Senior Advocates Arvind P. Datar, C. S. Vaidyanathan, Sidharth Luthra, P. S. Patwalia, Sanjay Jain, Porus F. Kaka, Gopal Sankaranarayanan, Balbir Singh, Gagan Gupta, Puneet Mittal, Sachit Jolly, B. M. Chatterji, and Ninad Laud, for the Petitioner
Attorney General R. Venkataramani and Additional Solicitor General Aishwarya Bhati, for the Respondent
