Madras Bar Association v. Union of India - Full Bench of Supreme Court delivers concurrent views without being persuaded by each other - A Study

A three-Judge bench of the Supreme Court of India in the case of Madras Bar Association v. Union of India, REED 2021 SC 07537, under Civil Original Jurisdiction, division bench vides its judgment dated on 14thJuly, 2021, wherein Justice L. Nageswara Rao. held that the endeavour of the Petitioner is to extricate the tribunals from the clutches of the executive in the interest of independence of judiciary. Security of tenure, adequate remuneration and other conditions of service are necessary to ensure that Members of tribunals would feel secure during their tenure while added that the main reason for tribunalisation, which is to provide speedy justice, is not achieved as tribunals are wilting under the unbearable weight of the exploding docket. Access to justice and confidence of the litigant public in impartial justice being administered by tribunals need to be restored. Thereby, The Writ Petition was disposed of accordingly.

Justice Hemant Gupta, held that the first, second and third proviso to Section 184(1), the use of expression ‘preferably’ in Section 184(7) and the proviso to Section 184(11) are legal and valid as such provisions fall within the exclusive domain of the legislature. The legislature has not nullified the judgment of this Court on the above aspects as there were no such corresponding provisions in the 2020 Rules, which were part of judicial review process. Section 184(11)(I)(II) and Section 184(7) is declared to be void as the Ordinance has reiterated the provisions which were in 2020 Rules. The challenge to other provisions is not legally sustainable. The writ petition was thus dismissed except to the extent mentioned above.

Justice Ravindra Bhatt in view of the foregoing discussion, concluded as follows:  The first proviso to Section 184(1) of the Finance Act, 2017, introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 with the second proviso to Section 184(1) of the Finance Act, 2017, introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is held to be void and inoperative. Section 184(7) of the Finance Act, 2017, introduced by of the Finance Act, 2017 introduced by Section 12 of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 is hereby declared void and inoperative. Section 184(11) - (i) and (ii) introduced by Section 12 of the Tribunals (Reforms Rationalisation and Conditions of Service) Ordinance, 2021 are hereby declared as void and unconstitutional. Consequently, the declaration of this Court in para 53(iv) of MBA-III shall prevail and the term of Chairperson of a Tribunal shall be five years or till she or he attains the age of 70 years, whichever is earlier and the term of Member of a Tribunal shall be five years or till she or he attains the age of 67 years, whichever is earlier. (v) The retrospectivity given to the proviso to Section 184(11) – introduced by Section 12 of the Tribunals (Reforms Rationalisation and Conditions of Service) Ordinance, 2021 is hereby upheld.

BACKGROUND

The fact of the matter is that, The Madras Bar Association has filed this Writ Petition seeking a declaration that sections 12 and 13 of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 and Sections 184 and 186(2) of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 as ultra vires Articles 14, 21 and 50 of the Constitution of India inasmuch as these are violative of the principles of separation of powers and independence of judiciary, apart from being contrary to the principles laid down by this Court in Union of India v. R. Gandhi, (2010) 11 SCC 1, President, Madras Bar Association, Madras Bar Association v. Union of India & Another, (2020) SCC Online SC 962 and Rojer Mathew v. South Indian Bank Limited & Others, (2020) 6 SCC 1. The Petitioner seeks a further direction to Respondent No.2 for establishment of a separate wing to cater to the requirements of tribunals in India.

The hon’ble court heard Mr. Arvind P. Datar, learned Amicus Curiae, Mr. K.K. Venugopal, learned Attorney General for India, Mr. Balbir Singh, learned Additional Solicitor General, Mr. Mukul Rohatgi, learned Senior Counsel, Mr. Sidharth Luthra, learned Senior Counsel, Mr. Gaurab Banerjee, learned Senior Counsel, Mr. Aruneshwar Gupta, learned Senior Counsel and Mr. Krishnan Venugopal, learned Senior Counsel. Mr. Arvind P. Datar, learned Amicus Curiae, made the following submissions:

1. The Ordinance is violative of the rule of separation of powers which forms part of the basic structure of the Constitution. The Ordinance is liable to be struck down as being violative of independence of the judiciary.

2. Reversal of judgments which are not in accord with the Government’s views undermines the judiciary, violating the supremacy of the Constitution.

3. Stipulation of a minimum age limit of 50 years for appointment is contrary to the directions given in the judgments of SC,

4. The provisos to Section 184(1) fixing the allowances and benefits payable to the Members to the extent as admissible to Central Government officers holding a post carrying the same pay is unsustainable and requires to be set aside.

5. Section 184(7) is liable to be declared invalid as the direction issued by this Court in MBA-III to make appointments within three months from the date of recommendation of the Selection Committee is sought to be annulled.

6. Section 184(11) is unconstitutional insofar as it fixes the tenure of the Chairperson and Members as four years.

7. Retrospectivity given to Section 184(11) is only to nullify the effect of interim orders of this Court which are in the nature of mandamus and is, therefore, prohibited legislative activity.

8. The appointments made pursuant to the directions of this Court on 09.02.2018, 16.07.2018 and 21.08.2018 with the consent of the learned Attorney General cannot be disturbed. The directions issued by this Court with the consent of the Union of India cannot be legislatively overruled.

ANALYSIS

Justice L. Nageswara Rao took considering of the Statement of objects and reasons for insertion of Articles 323-A and 323-B in the Constitution of India by the Forty-Second Amendment. The vires of the Administrative Tribunals Act, 1985, enacted under Article 323-A (1), was challenged in S.P. Sampath Kumar v. Union of India & Others, (1987) 1 SCC 124 before this Court.  The correctness of the judgment of this Court in S.P. Sampath Kumar was considered by a larger bench of this Court in L. Chandra Kumar v. Union of India & Others, (1997) 3 SCC 261. which found the exclusion of the jurisdiction of the High Courts and the Supreme Court in Articles 323-A and 323-B to be unconstitutional. This Court declared that tribunals shall continue to act like courts of first instance in respect of areas of law for which they have been constituted.

The first proviso to Section 184 (1) was declared as unconstitutional as it is violative of Article 14 of the Constitution. Selections conducted for appointment of Members, ITAT pursuant to the advertisement issued in 2018 should be finalized and appointments made by considering the candidates between 35 to 50 years as also eligible.

The second proviso to Section 184(1) deals with the allowances and benefits payable to the Members which are to be the same as are admissible to a Central Government officer holding a post carrying the same pay. According to Rule 15 of the 2020 Rules, Chairpersons and Members of tribunals were entitled to House Rent Allowance at the same rate as admissible to officers with the Government of India holding Group ‘A’ post carrying the same pay.

Justice Hemant Gupta recapitulated some of well- established and settled principles of the applicability of the principles of interpretation. Firstly, The power of Legislature is to enact law and Secondly, the power of Judiciary of that of judicial review of the statutory enactments.

The Court while interpreting Articles 32, 21, 141 and 142 of the Constitution held that prescribing periods at which criminal trial would terminate resulting in acquittal or discharge of the accused or making such directions applicable to all cases in present or in future would amount to judicial law making and cannot be done by judicial directives. The Courts can declare law, interpret law, remove obvious lacunae and fill up the gaps but they cannot entrench upon in the field of legislation.

The lack of binding nature of the guidelines on the legislature is also evident from the fact that even though directions that are mandatory in nature may be issued within the ambit of Article 142 of the Constitution, but the same cannot be enforced against the legislature as the legislators have absolute and unfettered freedom in terms of Article 194(2) in respect of State Legislatures, which is pari materia with Article 105(2) relating to Parliament.

This Court observed that the plenary powers of this Court under Article 142 of the Constitution are inherent in the Court and are “complementary” to those powers which are specifically conferred on the Court by various statutes. The powers conferred on the Court by Article 142 are curative in nature, they cannot be construed as powers which authorize the Court to ignore the substantive rights of a litigant. This power cannot be used to “supplant” substantive law applicable to the case or cause under consideration of the Court. Article 142, even with the width of its amplitude, cannot be used to build a new edifice where none existed earlier, by ignoring express statutory provisions dealing with a subject and thereby achieve something indirectly which cannot be achieved directly.

On the judgment authored by Justice L. Nageswara Rao, Justice Hemant had reservation with respect to the conclusions (c) and (d). In pursuance of the order passed by this Court in a writ petition, the Tribunal by way of an interim order directed the State of Karnataka to release water from its reservoirs to ensure 205 TMC is available in Tamil Nadu’s Mettur reservoir in a year from June to May.

Justice Hemant was unable to agree to the opinion that the first proviso to Section 184 prescribing a minimum age of fifty years is an attempt to circumvent the direction issued in MBA-III. In terms of Article 217 of the Constitution, a candidate becomes eligible for appointment after 10 years of practice as an Advocate. Thus, an Advocate would be eligible for appointment as judge of the High Court around the age of 35 years. The Memorandum of Procedure adopted by the Collegium of this Court prescribed forty-five years of age as the minimum age. Therefore, Justice Hemant found that eligibility to seek appointment is not solely dependent upon qualification of a candidate but experience and suitability, likely term which a candidate may have are necessary considerations. The relevant part from the memorandum of the collegium is reproduced as under:

This Court in MBA-II held the provisions contained under Section 409(3)(a), (c) and Section 411(3) of the Companies Act, 2013 to be invalid. The appointments of technical members as in the Madras Bar judgment rendered in the year 2010 were to be scrupulously followed.

In MBA-II, the age for appointment of members of the National Law Company Tribunal was fixed as fifty years. Same was not disputed by the present petitioner in the writ petition before the Madras High Court or before this Court.

Therefore, the age of 50 years as the eligibility condition is not off the hat but is based upon previous legislation in respect of members of the National Company Law Tribunal.

Thus, the fixation of fifty years of age as the eligibility condition cannot be said to be manifestly arbitrary or violative of any of the Fundamental Rights of any of the candidates which may render such condition of age as illegal. The argument is based on apprehension that it would be difficult for an advocate appointed after attaining the age of fifty years to resume legal practice after completion of one term, in case he is not reappointed. A person who is competent and good in his work will not find any difficulty to resume his practice but what would happen to his professional career if his term is not extended is a calculated risk which a candidate shall take at the time of seeking appointment. Such apprehensions as to what will happen in future cannot be a ground to strike down a condition of age in the statute. This Court is not possessed of the expertise to say that it will be difficult for an advocate to resume practice if he is not reappointed. Justice Hemant was unable to agree that the statutory provisions can be struck down on such grounds based on presumed apprehensions.

Therefore, Justice Hemant was of the opinion that in case of failing to secure reappointment, the candidate will not be able to resume practice is based upon apprehensions. Whether they are good or valid grounds to refuse reappointment can be subject matter of judicial review although he was of the opinion that the decision of the high-power Search and Selection Committee not to re-appoint a candidate may not warrant interference in exercise of judicial review.

Legality and validity of the Second & Third proviso to Section 184(1) of the Ordinance.  The second proviso is to the effect that allowances and benefits shall be to the extent as are admissible to a Central Government officer holding the post carrying the same pay. The third proviso to Section 184(1) is that where Chairperson or Members take a house on rent, he may be reimbursed a house rent subject to such limits and conditions as may be prescribed. In terms of third proviso, the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) (Amendment) Rules, 2021 have been published. As per the Rules now notified, the Chairman, Chairperson, President, Vice Chairman, Vice Chairperson or Vice President shall have option to avail of accommodation to be provided by the Central Government as per the rules for the time being in force or entitled to house rent allowance subject to a limit of Rs. one lakh fifty thousand rupees per month and the Members shall have option to avail of accommodation to be provided by the Central Government as per the rules for the time being in force or entitled to house rent allowance subject to a limit of Rs.one lakh twenty-five thousand rupees per month with effect from the 1st January, 2021. Therefore, the directions issued stands complied with.

Justice Hemant did not find any merit in the argument raised by Mr. Krishnan Venugopal that a selected candidate has a right to seek appointment and that too within three months of the order of this Court. Firstly, a selected candidate has no right to seek appointment. A Constitution Bench of this Court had held that the successful candidates do not acquire an indefeasible right to be appointed which cannot be legitimately denied.

The concession of the learned Attorney General at the time when interim orders were passed was in view of the prevalent situation to keep the Tribunals functional. The interim orders in Rojer Mathew have merged with the final orders wherein again, this Court directed the appointments to the Tribunals and terms of conditions of appointment shall be in terms of the respective statute before the enactment of the Finance Bill, 2017. Liberty was granted to the Union to seek modification of this order. Therefore, the interim order which permitted the appointments now stands subsumed in the Ordinance which has defined the tenure and the terms and conditions of appointment. The Ordinance is in fact in terms of the liberty granted to Union to seek modification. Mere fact that an application for modification is pending will not bar the legislature to enact a statute by way of an Ordinance. The appointments made after 26.5.2017 by virtue of Section 184(11) will be governed not by the parent statute but by the terms and conditions as enumerated in the Ordinance. The consent of the learned Attorney General will not act as an estoppel against the statute i.e. the Ordinance. The role of this court in considering whether or not provisions of law or executive policies are in consonance with the Constitution is well recognized and cannot be overemphasized. The Attorney General’s assertion that the executive or indeed the Parliament acts within its rights in interpreting the Constitution, and therefore this court should adopt a deferential standard in matters of policy are therefore insubstantial, and also disquieting. As conceded by the Union, if a law (passed validly in exercise of its exclusive power by the Parliament on its interpretation of the Constitution) violates any express provision or principle that lies at the core of any express provision or provisions, this Court’s voice is decisive and final.

Nageswara Rao, J. in his opinion. The Constitution of India makes an advocate who has practiced for more than 10 years, eligible for consideration for appointment as a judge of the High Court and even this Court. An advocate with 7 years’ practice with the Bar can be considered for appointment to the position of a District Judge. Prescribing 50 years as a minimum age limit for consideration of advocates has the devastating effect of entirely excluding successful young advocates, especially those who might be trained and competent in the particular subject (such as Indirect Taxation, Anti-Dumping, Income-Tax, International Taxation and Telecom Regulation). The exclusion of such eligible candidates in preference to those who are more than 50 years of age is inexplicable and therefore entirely arbitrary. As this Court in its previous judgment (Rojer Mathew) has pointed out in another context, the exclusion of such young and energetic legal practitioners could result in not so efficient or competent practitioners left in a field for consideration which would have telling effects on the quality of decisions they are likely to render.

Given that the essential educational qualifications and experience in the relevant field are fixed for all candidates, for a classification based on minimum age for appointment (like in the present case) to succeed, the Union cannot say that it should be held to be valid, irrespective of the nature and purposes of the classification or the quality and extent of the difference in experience between candidates. As between someone with 18 years’ experience but aged 42 or 43 31(1974) 1 SCC 19 Justice Ravindra Bhatt expressly said to be in agreement with the reasoning and conclusions of L. Nageswara Rao.

CONCLUSION

Justice Hemant Gupta said that he have gone through the detailed judgment authored by Justice L. Nageswara Rao as also separate but concurring judgment of Justice Ravindra Bhat, but was unable to persuade himself to agree with the views expressed therein except to the limited extent that part of Section 187(7) of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 that the Search and Selection Committee shall recommend two names for a post and that the tenure of members including Chairperson etc. shall be For short, the ‘Ordinance’ four years in terms of Clauses (i) and (ii) of Section 184 (11) of the Ordinance is illegal since the issues of constitution of panel and tenure have already been decided in MBA-III and that without removing such defect, the Ordinance could not be enacted.

This Court held that according to the well-settled theory of precedents, every decision contains three basic postulates:

• findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts;

• statements of the principles of law applicable to the legal problems disclosed by the facts; and

• judgment based on the combined effect of the above. A decision is an authority for what it actually decides

And, there exists three organs of the State i.e., Legislature, Judiciary and Executive have separate and distinct roles and functions as provided in the Constitution. All the institutions must act within their own jurisdiction and not trespass into the jurisdiction of others.

The condition of eligibility for appointment as a Judge of a High Court was kept in view while considering the eligibility of advocates as members of Tribunals. However, the Memorandum of Procedure for appointment as judges of the High Court finalized by this Court and forwarded to the Central Government in March, 2017 was that a person shall not be eligible to be considered for appointment as Judge of a High Court against Bar quota unless he has completed forty-five years of age on the date of recommendation by the High Court Collegium.

On the question of concurrence, when the judgment with which this author agrees, both as to its reasoning as well as its conclusions is as fully and well-reasoned as L. Nageswara Rao, J’s judgment is. Justice Hemant answered that the reason lies in the importance of the themes which have been deliberated- independence of the judiciary and separation of powers, both of which are timeless in their resonance and relevance. While, this brief prefatory aside at the beginning, outlines the approach this opinion strives to take, while wholeheartedly supporting the conclusions recorded by Rao, J. With great respect to Hemant Gupta, J, Justice Ravinder Bhat opined that he cannot persuade myself to agree with him, that as regards prescription of minimum age (for appointment to tribunals, i.e., 50 years) or with respect to conditions of service such as payment of house rent allowance, this court ought to respect legislative wisdom, and those directions issued in past judgments cannot bind Parliament, as they fell outside the judicial sphere.

With these observations, justice Ravindra Bhatt proceed to deal with the minimum age requirement which precludes otherwise qualified candidates possessing the requisite experience from appointment to all tribunals, unless they are 50 years of age or older. This age qualification is that candidates, to be appointed, should not be less than 50 years, and has been introduced by the first proviso to Section 184 (1) of the Finance Act. What is immediately noticeable is that this age qualification (more by way of an age bar or minimum age requirement) did not find place in any parent enactment, which set out the eligibility conditions for appointments to various tribunals, with the exception of appointment as members to the National Company Law Tribunal, for which, candidates should have completed 50 years to be eligible for appointment, apart from the prescribed eligibility and condition  In the present case, the rule has the effect of excluding deserving candidates, without subserving any discernible public policy or goal. Thus, the classification is based on no justifiable rationale; nor can it be said that the age criterion has some nexus with the object sought to be achieved, such as greater efficiency or experience.

Independence of the judiciary is one of the foundational pillars of every democracy governed by the rule of law, where the constitution reigns supreme. Some constitutions may guarantee this in emphatic terms, whereas in others, there may be no single provision manifested in the constitution, but rather, the idea may emerge as a compelling inference - through the kind of assurances articulated by express provisions (tenure, eligibility, age of superannuation, conditions where removal is possible only through Parliamentary or legislative process, manner of appointment etc). A seven Judge Bench of this Court held that the primary function of the judiciary is to interpret the law. It may lay down principles, guidelines and exhibit creativity in the field left open and unoccupied by legislation.