This article is written by Shohom Roy, from Symbiosis Law School, NOIDA. This article strives to highlight the significance, merits, and drawbacks of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021

Introduction

The President of India promulgated the Tribunals Reforms ( Rationalisation and Conditions of Service) ordinance on April 4, 2021, with the objective of abolishing ten appellate tribunal authorities and handing over their functions to the existing judicial framework. This article discusses some of the most important concerns regarding the ordinance, including the need for independence of the judiciary, specialization of adjudicators and the tenure of the officials working in the tribunal bodies.

Background

The Supreme Court of India had struck down the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and other Conditions of Service of Members) Rules enacted by the Union Government on the grounds of judicial interference in the case of Rojer Mathew vs South Indian Bank Ltd & others (2019).  

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The Central Government’s subsequent attempt in 2020 was again subjected to judicial review in the case of Madras Bar Association vs. Union of India (2021). The recommendations made by the Apex Court sought to resolve various flaws in the Tribunal Rules of 2020. After taking the suggested changes into consideration the Centre introduced the Tribunals Reforms ( Rationalization and Conditions of Service ordinance) Bill in the Parliament. Since the Bill failed to acquire Parliamentary assent, the President of India promulgated the ordinance under the powers vested to him by the Constitution of India.

Ordinance : legislation by the executive 

An ordinance is a decree put into effect by the executive wing of our government without taking the assent of the legislature. The President of India is the nominal head of the Executive and has certain powers under Article 123 of the Indian Constitution to promulgate an ordinance when the Parliament is not in session or during an emergency or threat. An ordinance has the same effect as an Act of Parliament and can be subjected to judicial review. An ordinance passed by the President under Article 123 is nullified if the subsequent ascent is not received within six weeks of reorganization of the Parliament. A Governor of a state has been granted the power to issue an ordinance under Article 213 under a situation of immediate action and non-assembly of the state legislature. The ordinance passed by the Governor must later be ratified by the state legislature within six weeks of reorganization. 

Tribunals

Tribunals are adjudicating bodies established by the executive wing of the government and vested with judicial powers in specific matters. Although the Constitution of India mentions tribunals in Article 136 and Article 227 of the Constitution of India, the definition of tribunal comes from judicial pronouncements. 

In the case of Durga Shankar Mehta v Raghuraj Singh (1954), the Supreme Court drew a line of distinction between the existing Judicial framework of courts and tribunals. The Courts clarified that tribunals are quasi-judicial entities who exercise judicial functions but do not possess the judicial power of a Court of law. The 42nd Amendment to the Constitution of India on the recommendations of the Swaran Singh Committee introduced the procedure for constitution of tribunals and associated issues under Article 323A and 323B.

Proposition of reforms in the ordinance

The case of Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. (2016), prompted the Supreme Court of India to request the Law Commission of India to evaluate the existing tribunal framework of the country. Under the Chairmanship of Dr. B.S Chauhan, the Law Commission in its 272nd Report enumerated multiple reforms in the tribunal system. The Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021 is an effort by the Government to implement some of the following recommendations made by the Law Commission:

  • The primary intention behind establishing a tribunal framework was to ensure inexpensive and quicker access to justice. However, the number of pending cases before the tribunals and the extreme delay in adjudicating on issues defeats the entire purpose of a tribunal system of justice. The Commission had suggested the establishment of a National Tribunal Commission which acts as a single nodal entity under the supervision of the Ministry of Law and Justice to monitor the functioning of the various tribunals existing in the country.
  • The quality of justice rests on the independence of the judiciary. Therefore the Commission has analyzed that the reappointment of tribunal officials hinders this quality of independence. It is suggested that officials including the Chairman, Vice- Chairman and the Members be appointed for a fixed tenure. The Chairman should serve for a period of 3 years or until the age of 70, whichever is earlier. The members can be appointed either for a period of 3 years or until the age of 67, whichever comes first. The procedure for appointment of such officials must mirror those adopted for the appointment of High Court judges to restore faith in the independence of the tribunal system. The selection of members must be impartial and under the supervision of a selection committee headed by the Chief Justice of India or a sitting Supreme Court judge. This deletes the involvement of the government agencies in the appointment of personnel. 
  • The Report has recommended that the appeals against the tribunal’s decisions should come under the jurisdiction of the High Court only when an appellate tribunal’s decisions need to be challenged. The purpose of establishing the tribunal system was to reduce the burden on the judicial framework and therefore allowing unnecessary appeals would defeat the purpose of helping the judiciary.
  • The Commission requested the Supreme Court to provide clarity on the practice of Special Leave Petitions under Article 136 of the Constitution of India which allows individuals to bypass the jurisdiction of the High Court. The Report recommended the rare usage of Special Leave Petitions since they disrupt the judicial balance of the country.

Tribunals within the judicial framework

The 215th Law Commission Report observed that the establishment of the Administrative tribunal system was to replace the role of High Courts in certain areas and reduce the burden on the judiciary. The Commission recommended that the power of judicial review given to the High Courts over the orders of the tribunal system led to unnecessary appeals. This resulted in a time-consuming and expensive affair that delayed the delivery of justice. Therefore the appellate jurisdiction should rest only with the Supreme Court of India and a framework for intra-tribunal appeals must be established. 

However, the Apex Court held that judicial review is a cornerstone of the basic structure of the Constitution. The process of tribunalisation creates quasi-judicial bodies that cannot encroach upon the judicial powers of the full-fledged Courts. The tribunal framework is a part of a bigger initiative to allow Alternate Dispute Redressal Mechanisms to reach every section of the society. However, these tribunals are formed by government agencies and must abide by the doctrine of separation of power. Hence tribunals cannot be a substitute for the High Courts and the inclination to bypass the lower courts when approaching the Supreme Court directly must be strongly deterred.  

Tribunals Reforms Ordinance, 2021

As discussed before the Tribunal Reforms ordinance, 2021 inaugurates the process of transfer of appellate jurisdiction over tribunal orders from appellate tribunals to the High Courts. Amendments have been made to some pieces of legislation to streamline the process of adjudication and remove the extra-layer of litigation.

The ordinance has also amended the Finance Act 2017 to set down the eligibility criteria and tenure of officials to be appointed to a tribunal. The Centre has also announced the formation of a Search-cum-Selection Committee for the appointment of the Chairman and members of the Tribunal. The ordinance allows the re-appointment of officials in a tribunal.

As per the ordinance, The National Consumer Disputes Redressal Commission (NCDRC) established under the Consumer Protection Act,2019 also falls under the Finance Act, 2017. The ordinance seeks to expand the tribunal framework in the country and work for the upliftment of the economically and socially disadvantaged sections.

Key points

As discussed before the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021 promulgated by the President of India removes an additional layer of litigation in the form of appellate tribunals. The ordinance has amended the Cinematograph Act, 1952; the Customs Act,1962; the Airports Authority of India Act, 1994; the Trade Marks Act, 1999; the Protection of Plant Varieties, Farmers’ Right Act 2001, the Geographical Indications of Goods ( Registration and Protection) Act, 1999, the Patent Act 1970; the Control of National Highways ( Land and Traffic ) Act, 2002 and the Copyright Act, 1957 to allow the HIgh Courts to adjudicate on appeals filed against the tribunal’s orders.

The ordinance also seeks to amend Section 184 of the Finance Act, 2017. The following provisions have been affected by the ordinance:

  • Section 184(1) has been amended to modify the eligibility criteria for officials appointed to a Tribunal. A person below the age of 50 years cannot be considered for appointment as a Chairperson or Member of the tribunal. The amendment also mandates that the allowances and benefits received by the officials shall be equivalent to that received by Central Government officials of similar stature.
  • According to Section 184(7) a Search-cum-Selection Committee shall be responsible for making recommendations on the appointment of the Chairperson or Members of a tribunal to the Centre. The appointments made by the Union Government are shielded from judicial review. The ordinance has mandated that the Committee must consist of the Chief Justice of India or a Supreme Court Judge authorized to act on his behalf, the sitting Chairperson or a retired Supreme Court judge or a sitting High Court judge, two Secretaries of the Union Government along with a Secretary of the Ministry under which the tribunal has been formed. 
  • Section 184(11) stipulates that the Chairperson and Members of a tribunal are appointed for a tenure of 4 years. The officials of a tribunal are allowed to seek reappointment. However, the Chairperson can serve until 70 years of age whereas the age of retirement or Members of a tribunal has been fixed at 67 years of age. 

Critical analysis of the ordinance : boon or bane

The expansion of tribunalisation would help the economically and financially disadvantaged sections seek easier and speedy access to justice. One of the major advantages of the tribunal system is specialization in a certain specific field. A judge cannot be expected to possess knowledge about each and every field of law. Therefore, tribunals are an efficient way of dealing with the plethora of problems in the complex society. The officials of a tribunal are appointed on the basis of their knowledge and expertise on a particular subject. Therefore, the tribunals can resolve disputes on a subject for which they are formed without disrupting the judicial functions exercised by the courts.

The huge number of pending cases before the tribunals indicates the incompetence of the tribunal system and the need for necessary reforms. The Central Government has assessed the wastage of resources in maintaining this flawed framework and has therefore taken steps to streamline tribunals. However, the Tribunal Reforms ordinance, 2021 has been implemented by the government without making a Judicial Impact Assessment. The Judicial Impact Assessment, which is a process of anticipating the consequences of implementing legislation, could bring attention to whether the ordinance would pressurize the already overburdened judiciary with new cases or would lead to a delay in the delivery of justice.

The Tribunal Reforms (Rationalization and Conditions of Service) ordinance specifies that the officials must be of at least 50 years of age to seek appointment in the tribunals. This deters young and meritorious candidates from seeking appointments in the tribunals. It also raises a question on the security of tenure and conditions of service for the Members of a tribunal as they might not be able to seek employment after completion of a single term. The Apex Court had previously scrapped the age requirement in the Tribunal Rules 2020 and directed the Central Government to allow advocates with at least 10 years of experience to seek appointment in the Tribunals. The ordinance is a direct violation of the Supreme Court directives since it has again created an age requirement. It also goes against the Supreme Court decision of fixing the tenure of tribunal officials at 5 years.

The amendments to the Finance Act, 2017 allowing the Central Government to appoint the members of a tribunal on the recommendations of the Search-cum-Selection Committee is unconstitutional and raises doubts over the independence of the tribunals. The ordinance is an example of legislative overruling as it seeks to remove the power of judicial review of the Courts. This would create a major imbalance of power as the functions of the administrative tribunals of the government cannot be supervised by our judiciary. 

The Tribunal Reforms (Rationalisation and Conditions of Service) Bill

The Tribunal Reforms (Rationalisation and Conditions of Service) Bill was introduced in the lower house of the Parliament on February 13, 2021. However, the Lok Sabha was adjourned 2 weeks early as the Members of the Parliament wanted to return to their constituents and prepare for the elections in five states of the country. Therefore the Bill could not be taken up for consideration during the budget session. The Executive Wing of the government exercised the powers of the President under Article 123 to promulgate the ordinance on April 4, 2021.

Conclusion

The Tribunals Reforms Ordinance 2021 is a much-awaited initiative by the Central Government to improve the tribunal framework of the country. Although the ordinance suffers from certain flaws, it can lead to a better justice delivery mechanism in India. Adherence to the observations of the Supreme Court and ensuring the independence of the tribunals would preserve the basic structure of our Constitution and eliminate the threat to the doctrine of separation of power. 

References

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