Case Note & Summary
The Supreme Court of India was called upon to decide the constitutional validity of the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2020 (2020 Rules), which govern the selection, appointment, tenure, and conditions of service of members of 19 tribunals. The judgment is a sequel to the Constitution Bench decision in Rojer Mathew v. South Indian Bank Limited (2020) 6 SCC 1. The core controversy arose from the Finance Act, 2017, which amended various enactments to provide for merger of tribunals and uniform conditions of service. Section 184 of the Finance Act empowered the Central Government to make rules regarding qualifications, appointment, term of office, salaries, and allowances of tribunal members. The 2017 Rules were framed under this power, but were challenged and eventually replaced by the 2020 Rules. The Madras Bar Association and other petitioners challenged the 2020 Rules on grounds that they violated the basic structure of the Constitution by undermining judicial independence, separation of powers, and the rule of law. The court traced the history of tribunalisation in India, from the insertion of Part XIV-A by the 42nd Amendment to the landmark judgments in S.P. Sampath Kumar, L. Chandra Kumar, and Union of India v. R. Gandhi. It noted that while tribunals are permissible, they must be real substitutes for High Courts and must maintain judicial independence. The court examined the composition of the Search-cum-Selection Committee, qualifications of members, and the role of the executive in appointments. It held that the 2020 Rules, in their original form, gave excessive control to the executive, thereby compromising judicial independence. The court directed modifications to the Rules, including that the Search-cum-Selection Committee must include a sitting Judge of the Supreme Court or a Chief Justice of a High Court, and that members must possess judicial experience or expertise. The court also addressed the issue of whether the Finance Act, 2017 could be certified as a Money Bill, holding that such certification is subject to judicial review. The judgment upheld the validity of the 2020 Rules subject to the modifications directed, and emphasized that tribunals are supplementary to High Courts and their decisions are subject to scrutiny by High Courts under Articles 226 and 227.
Headnote
A) Constitutional Law - Tribunalisation of Justice - Part XIV-A and Article 323-B - Constitution of India - The court examined the validity of the 2020 Rules governing qualifications, appointment, tenure, and conditions of service of tribunal members. Held that while tribunalisation is permissible, tribunals must be independent and not act as substitutes for High Courts. (Paras 1-5) B) Constitutional Law - Basic Structure - Judicial Independence - Separation of Powers - The court reiterated that judicial independence and separation of judicial power from the executive are part of the basic structure. The 2020 Rules were found to undermine judicial independence by giving excessive executive control over appointments and service conditions. (Paras 5-7) C) Constitutional Law - Delegated Legislation - Excessive Delegation - Section 184 of the Finance Act, 2017 - The court examined whether Section 184 amounts to excessive delegation. Held that the power to make rules must be guided by the parent Act and cannot be unguided or arbitrary. (Para 6) D) Constitutional Law - Money Bill - Article 110 - Finance Act, 2017 - The court considered whether the Finance Act, 2017, insofar as it amends tribunal-related provisions, can be certified as a Money Bill. Held that such certification is subject to judicial review and may be invalid if it circumvents the Rajya Sabha's role. (Para 6) E) Administrative Law - Tribunals - Search-cum-Selection Committee - Composition - The court directed that the Search-cum-Selection Committee for appointment of tribunal members must include a sitting Judge of the Supreme Court or High Court to ensure judicial independence. (Paras 7-8) F) Administrative Law - Tribunals - Qualifications of Members - The court held that members of tribunals must possess judicial experience or expertise in the relevant field, and the 2020 Rules' provisions allowing appointment of non-judicial members without adequate safeguards were invalid. (Paras 7-8)
Issue of Consideration
Constitutional validity of the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2020 and related provisions of the Finance Act, 2017
Final Decision
The Supreme Court upheld the validity of the 2020 Rules subject to modifications directed by the Court to ensure judicial independence, including changes to the composition of the Search-cum-Selection Committee and qualifications of members.
Law Points
- Tribunalisation of justice is permissible
- Tribunals are supplementary to High Courts
- Judicial independence is part of basic structure
- Power of judicial review under Articles 226/227 and 32 cannot be ousted
- Excessive delegation of legislative power is unconstitutional
- Money Bill certification is subject to judicial review
