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This article is written by Mahimna Dave and the article has been edited by Khushi Sharma (Trainee Associate, Blog iPleaders).

Abstract

“Age is an issue of mind over matter. If you do not mind, it does not matter.”  

-Mr Mark Twain

The present research article argues the constitutional validity of section 413 (2) of the Companies Act, 2013, which prescribes a specific age limitation for the appointment of judicial members in NCLT. It challenges the validity of the provision under articles 13, 14, 21 & 50 of the Constitution of India. The paper further lays down the instances through various celebrated case laws that how tribunalisation and bureaucratization of Justice advance to lack of judicial independence and breach of the separation of powers. In light of this, the paper presents the following three questions: First, we will try to locate the historical position of the provision under the Companies Act, 2013, Administrative Tribunals Act, 1985 and other legislations. Second, we trace the impact of how the imposition of such limitations causes tribunalisation and bureaucratization of Justice, which further raises questions concerning judicial independence and separation of powers, and; Finally: we analyse the status quo and where do we stand after the judgment of Madras Bar Association v. Union of India (2021). Essentially this paper looks at the administration of Justice in our country and analyses how limitations on appointments threaten specialization, which is of paramount concern for any modern democracy governed by the rule of law. Simultaneously, it also tries to dissect the nascent jurisprudence of indirect discrimination absent from Indian discrimination law jurisprudence.

Introduction

There are no codified laws, national or local, in India that directly deal with the issue of age discrimination. The Constitution protects discrimination only on the grounds of religion, race, caste, sex or place of birth. It does not include age. These fundamental rights are available only against the State. Nonetheless, under common law (India being a common law country), it would be possible for an individual to seek protection against age discrimination under certain circumstances.

Types of Discrimination:

There is no law under the purview of Indian jurisprudence which addresses the subject area of Age discrimination. Nonetheless, under common law (India being a common law country), draws inferences from the United Kingdom’s The Equality Act, 2010. The act lays down different kinds of discrimination, they are:

Direct Discrimination: This form of discrimination refers to all protected characteristics. It covers all types of behaviours that discriminate on the grounds of age—for example, denying promotion to an older candidate only on the age grounds without considering their experience example, denying promotion to a more senior candidate regardless of their experience, or making an employee redundant on the grounds of their age.

Indirect Discrimination: An act accounts for discrimination when an employer introduces a workplace provision, practice, or criterion. The measure puts a group of employees with a protected characteristic at a clear disadvantage against their peers.

Ideally speaking, where there are reasonable grounds for discrimination based on age, such as the job’s nature,  job’s location, etc., under articles 15 & 16 of the Constitution of India, discrimination may be justified. For example, there exists an age limit for recruitment in the armed forces. The retirement age prescribed for cabin crew of India’s national airlines under the governing statutes is very less than the retirement age of other central government employees or public undertakings. 

But the rationale behind establishing a minimum age limit criteria in matters relating to the appointment of judges in tribunals, courts & commissions is understandably arbitrary as there is no nexus between the object and the result sought to achieve. This provision is direct discrimination on age, leading to an indirect entry to the system. 

In light of this article, limitations imposed based on age for appointment of judges in NCLT under section 413 (2) of the Companies Act, 2013. It clearly, establishes the existence of direct discrimination as it discriminates people of specific age categories to apply for the same. Section 413 (2) clearly states that individuals who have not completed fifty years of age shall not be eligible for appointment as Judicial Members of the tribunal. The language of the section is worded very strongly that there is no scope for any other interpretation. It establishes only one understanding of direct discrimination as it imposes an indirect barrier for the entry of those below 50 years of age.

Section 413 (2): A Member of the Tribunal shall hold office as such until he attains, —

(a) in the case of the President, the age of sixty-seven years;

(b) in the case of any other Member, the age of sixty-five years:

Provided that a person who has not completed fifty years of age shall not be eligible for appointment as Member:

 Moreover, it also violates the ‘right of equality of the parties concerning the case. Every party approaching the National Company Law Tribunal has a right under article 14 to get their rights adjudicated by a forum that exercises judicial power and technical expertise impartially and independently. 

It is not just the fundamental right of the parties approaching the tribunal to seek Justice. Still, a duty cast upon the State under Directive Principles of the State Policy enunciated in chapter IV of the Constitution. Art 39 (A) of the Constitution casts a duty upon the State to provide ‘Equal justice and free legal aid’. Understandably, the minimum age limit criteria imposed under section 413 (2) of the Companies Act, 2013 violates the provisions mentioned above of the Constitution. It describes a minimum age limit of 50 years for the appointment as a judicial member NCLT. It further restricts the parties to the case to have their rights adjudicated by a forum (bench) that exercises competent judicial power and technical expertise on the subject matter, eventually leading to non-fulfilment of equal justice principles. 

In the recent judgment of NCLT, the bench observed that:

“Wherever the access to courts to enforce such rights is sought to be altered by directing a litigant to approach an alternative forum, then in such case the legislative act in question can be challenged before a court of law on the ground that it is ultra vires the constitution.”

“The fundamental right to equality as mentioned under article 14 before the law and equal protection of laws guaranteed by Article 14 of the Constitution includes a right to have the person’s rights, adjudicated by a forum which exercises judicial power impartially and independently, consistent with the recognized principles of adjudication.”

Thus, the contentions raised by the paper are well as per the constitution and previous Supreme Court and NCLT judgments. On the grounds mentioned above and the peripheral understanding laid down in the introduction section, we can further elucidate some more implications of the issues raised above and try to make some informed and pragmatic solutions to address the Gordian-not.

The genesis of Tribunalisation & Bureaucratization of NCLT

Administration of Justice has been a paramount concern for every country governed by the rule of law. Judiciary being an integral part of the three-tier system forming the basis of functioning of a state holds several responsibilities. In light of this paper, we would like to address the problem concerning the delay, backlogs and incompetency in the administration of justice in the present judicial setup. In our present judicial ordain, disputes usually take several decades to reach finality, travelling across the series of courts. In addition, putting a bar on the entry creates a different spectrum of problems. First, equally competent people do not get equal opportunities which is a type of direct discrimination which we will argue upon under article 14 of the Constitution in the latter part of this paper. Second, tribunals like NCLT delay with such specialized matters. It has become quit-essential to employ those potential judicial members who are well-versed with their subject areas like mergers & acquisitions, insolvency, dissolution, etc. The technical jargon to deliver legally and socio-economically sound legal judgements. But age restrictions imposed under section 413 (2) This provision puts a bar on such opportunities. Last, it violates the right of equality before the law and equal protection of the law under article 14 of the parties approaching the court as they cannot get their rights adjudicated by an independent and technically sound forum in the subject areas pertaining to the matters involved. Age restrictions degrade the quality of judgements and lower the pace of the justice delivery system.

Impact of Tribunalisation and Bureaucratization on Justice

The doctrine of separation of power ensures and maintains the system of check and balance between the legislature, executive and Judiciary. Our Constitution aspires for specialization, ensuring separate and fixed roles of these organs. Overstepping the jurisdiction or course of action of each other is strictly prohibited and. It also provides that every organ should function separately and independently. Since the independence of the Judiciary is necessary to ensure Justice and prevent the government from acting arbitrarily. In Indira Nehru Gandhi v. Raj Narain It was established that parliament does not have the authority to adjudicate disputes. Any dispute concerning the election of the Prime Minister has to be judged by special courts or tribunals as separation of powers is part of the basic structure of the Constitution as prescribed under the celebrated case law of Keshvananda Bharati v. Union of India. However, since the enactment of the Administrative Tribunals Act, 1985, the legislature has overstepped the boundaries established by the doctrine of separation of powers and has deprived High Courts and Civil courts of essential judicial functions by transferring them to quasi-judicial bodies which are directly under its control. Therefore, the necessary power provided to the High Court through our Constitution has been curbed to a greater extent. I think that the potential danger regarding this transfer of judicial power would be an infringement of citizens’ natural and legal rights in our country. Since the parliament and state legislatures now can establish tribunals for any field according to their discretion, there are high chances that they will establish tribunals inspired by their political interests and ideologies. Judicial independence ensures that judges are not politically biased and they will give judgements purely based on a rule which is not affected at all by the ruling party in the parliament. However, the tribunals are entirely under the control of the executive; hence it is highly possible that those who will be in charge of adjudicating disputes in the tribunals will be influenced by the inherent political interests of the party in the rule. There is a common concept named the opinion of Bureaucracy which manifests how the executive organ of the democracy is very conservative and cautious in nature, but their appointments are purely based on political discretions, raising concern about their interest in the prevailing political theories.The establishment of tribunals was justified on the basis that they would reduce the overburdening on courts, ensure speedy disposal of cases and solve the problem concerning overlapping of jurisdiction. However, it has been observed so far that these tribunals have worked as a source of post-retirement occupation for the bureaucrats and judges who support and resist the prevalent political ideologies. Moreover, there have been instances where tribunals have failed to achieve the sole purpose for which they were established, i.e. speedy disposal of cases.

Age Criteria appointment is ultra-vires to articles 14, 21 and 50. 

In light of this paper, it is submitted that section 413 (2) of the Companies Act, 2013 is ultra-vires to Article 14, 21 & 50 of the Constitution of India in as much as these are violative of the principle of separation of powers and independence of Judiciary, apart from being contrary to the principles laid down in the case of Madras Bar Association v. Union of India and Anr. This s contrary to the directions in the Madras Bar Association judgment (2021), as the Hon’ble Supreme Court has specifically emphasized the need to appoint young members in tribunals to make their functioning strong. Also, when a person is eligible to be made a High Court Judge, it is quite strange to describe a minimum age limit for tribunals.

In the case of Madras Bar Association, the Hon’ble Supreme Court observed that:

“Younger advocates who are around 45 years old bring in fresh perspectives. Many State inducts lawyers just after seven years of practice directly as District Judges. If the justice delivery system by tribunals is to be independent and vibrant, absorbing technological and rapid advances, it is essential that those practitioners with a certain vitality, energy and enthusiasm are inducted.”

In the present case, therefore, the minimum age limit criteria for qualification as essential for the appointment is discriminatory and arbitrary because there is exist no rational nexus between the provision and the object sought to be achieved. There are no empirical studies or data that explicates older candidates are superior or that younger candidates are incapable of having pre-requisites for being appointed as judicial members in tribunals. Therefore, it is direct and simple discrimination based on age. The criterion (of minimum 50 years of age) is virtually “picked out from a hat.” And wholly arbitrary.

Stance after the ruling of Madras Bar Association Judgment (2021)

Since first, if we are talking about the stance after the ruling of Madras Bar Association Judgment (2021) [addressed as CL1] so it is important for us to know the facts of CL1.  In this case, it was a judgment which was delivered by the 3- Judge bench of the Supreme Court with 2:1 majority view held that prescribing 50 years as the minimum age for consideration of advocates in the tribunal has the devastating effect of excluding young lawyers who have their core competence in the relevant field and who are successful in their career. 

In this case, the minimum age limit which was prescribed as Proviso to section 184(1) of the Finance Act, 2017 and which was again added through amendment under Tribunal Reforms Ordinance, 2021 under Chapter XI heading Amendments to the Finance Act, 2017 and the relevant part is read as follows –

“184. (1) The Central Government may, by notification, make rules and regulations to provide for the qualifications, appointment, salaries and allowances, resignation, removal and the other conditions of service of the Chairperson and Members of the Tribunal as specified in the Eighth Schedule:

Provided that a person who has not completed the age of fifty years shall not be eligible for appointment as a Chairperson or Member:

Since as we can see that in the Proviso that fixing the minimum age as 50 years for recruitment of members for the tribunal is acting as a deterrent for the other competent lawyers to apply for it, and it was held by the Honourable Supreme Court that prescribing the minimum age limit of 50 years is arbitrary and irrational as since if we see the Constitution in which an advocate with experience of 7 years at the Bar can be considered for appointment to the position of a district judge, and it also excludes the possibility or an utmost certainty that the young advocates who can be trained and competent and can have their core competence in the areas for which tribunals are constituted and thus exclusion of such candidates will be arbitrary and it appears that this age is picked out from a hat.

Now, if we compare the above amendment to section 184(1) of the Finance Act, 2017 under Tribunal Reforms Ordinance, which is mentioned above with the Proviso to subsection (2) of Section 413 of The Companies Act, 2013 Of which the relevant part is read as follows:

(1) The President and every other Member of the Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office but shall be eligible for re-appointment for another term of five years.

(2) A Member of the Tribunal shall hold office as such until he attains,—

(a) in the case of the President, the age of sixty-seven years; 

(b) in the case of any other Member, the age of sixty-five years:

Provided that a person who has not completed fifty years of age shall not be eligible for appointment as Member:

Provided further that the Member may retain his lien with his parent cadre or Ministry or Department, as the case may be while holding office as such for a period not exceeding one year.

3) The Chairperson or a Member of the Appellate Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office but shall be eligible for re-appointment for another term of five years.

(4) A Member of the Appellate Tribunal shall hold office as such until he attains,—

(a) in the case of the Chairperson, the age of seventy years;

(b) in the case of any other Member, the age of sixty-seven years:

Provided that a person who has not completed fifty years of age shall not be eligible for appointment as Member:

Provided further that the Member may retain his lien with his parent cadre or Ministry or Department, as the case may be while holding office as such for a period not exceeding one year.

In this case, if we see the Proviso of Sec 184(1), which was held unconstitutional in the case of CL1 by the Supreme Court. It covers all types of behaviours that discriminate on the grounds of age.  For example, denying promotion to an older candidate only on the age grounds without considering his or her experience and then taking this judgment into mind and then if we read the provisos in bold font above in section 413 of Companies Act, 2013 and then on the basis of which if central government notifies the advertisement for the appointment of members in NCLT AND NCLAT and only for those which are above the age of 50 years then it would be a violation of the Madras Bar Association Judgment (2021) as it would be contrary to it and would violate the rule of separation of power which forms part of the basic structure of the Constitution, and this advertisement will also be struck down as it would be against the independence of Judiciary and would also amount to undermining the supremacy of the Constitution and would be impermissible legislative interference and then this advertisement would be struck down.

If we would see the Proviso of amended Section 184(1) under tribunal Reforms Ordinance which was held unconstitutional by the Supreme Court which is similar expressly as well as in literal meaning to Proviso contained in Section 413 (2) and thus if section 184 (1) was held unconstitutional by the supreme court as being violative of several constitutional provisions and since the age of 50 years does not have any rational nexus as since no empirical study has been conducted which shows that older candidates performs better and have sound knowledge of law as if any person who has practised for  25 years in unrelated fields and then appointing him as Member would not serve the purpose of tribunal in comparison to the young advocate who has an experience of 10 to 15 years and has a core competence in the area designated for tribunal and thus it is discriminatory, arbitrary and irrational so section 413 (2) should be held unconstitutional and the advertisement would be struck down post Madras Bar Association Judgment (2021) .

Conclusion

We all should criticize the bureaucratization of the tribunal in the harshest words because when it comes to the administration of Justice, you cannot trust bureaucrats as Justice is not delivered on the basis of natural reasons but on the basis of the artificial reasons and judgments of the law and thus when the law is the act which requires long study and experience and law is not the subject of the bureaucrats but the law is designed to measure the causes of the subjects. The centre should not have the power for appointment of judicial members in regard to tribunals as it undermines the Judiciary and instead, as was suggested by the Supreme Court, that National Tribunal Commission should be constituted which will be responsible for the appointments, disciplinary actions, and administrative purpose.


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