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Case Analysis on Madras Bar Association v/s Union of India

To a layman, Tribunals can be understood as quasi-judicial institutions, established under various statutes, empowered to adjudicate specific disputes- e.g., tax or service-related matters, determine the rights and liabilities of the contesting parties, and make and review administrative decisions. Constitutionally, Tribunals were not a part of the country's original Constitution and were introduced only in 1976, by the 42nd Amendment to the Indian Constitution, on the recommendations of the Swaran Singh Committee, in the form of Articles 323A and 323B.

However, since their formation, they have been subjected to various judicial challenges, challenging their existence, methods of functioning, etc. One such recent judicial challenge, Madras Bar Association v. Union of India & Anr wherein, the Central Legislature's attempt to determine and regulate the functioning of such institutions was challenged by the Madras Bar Association and the precedent laid down.

Facts of the case
The President of India on 4th April 2021 promulgated an Ordinance, on the recommendations of the Central Government, while exercising its powers under Article 123 of the Indian Constitution because, even though the bill was tabled in the Lok Sabha in Budget Session, 2021, no debate and discussion could follow the same and hence the said law was introduced as an ordinance.

The Ordinance titled, the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021, which per se, called for amendments in as many as nine statutes:
  • The Copyright Act, 1957;
  • The Airports Authority of India Act, 1994;
  • The Trade Marks Act, 1999;
  • The Geographical Indications of Goods (Registration & Protection Act), 1999;
  • The Patents Act, 1970;
  • The Control of National Highways (Land & Traffic Act, 2002;
To replace the existing tribunals with High Courts, established under each of these statutes, citing poor adjudication of disputes coupled with delay in dispensing justice; along with questioning the 'judicial independence' of such tribunals, claimed to be working under the influence of the executive by many Advocate Bar Associations since quite long.

The President of India on 4th April 2021 promulgated an Ordinance, on the recommendations of the Central Government, while exercising its powers under Article 123 of the Indian Constitution because, even though the bill was tabled in the Lok Sabha in Budget Session, 2021, no debate and discussion could follow the same and hence the said law was introduced as an ordinance.

Moreover, it amended the provisions of the Finance Act, 2017 in order to make the Central Government responsible for making rules regarding the appointments, salaries, tenures of the members of tribunals, and their appointment shall be made by a Search-Selection Committee headed by the Chief Justice of India or any Supreme Court Judge nominated by him.

Sections 184 and 186 of the Finance Act were amended by Sections 12 and 13 of the Ordinance, respectively, limiting the maximum age of appointment of a chairman or a member of any tribunal to 50 years, i.e., no person over the age of 50 years is eligible for appointment to the tribunals for any position. It also fixed the members' term at four years or the attainment of 70 years for the Chairperson and 67 years for any other member, whichever is earlier, and limiting their salaries.

Hence, the Madras Bar Association approached the Supreme Court in order to declare the Sections 12 and 13 of the Ordinance ultra vires Articles 14, 21, 50 of the Indian Constitution and the Principles of Judicial Independence and Separation of Powers, which happen to be integral to the basic structures of the Indian Constitution.

The law in question:
  • Article 14� Equality before law:
    The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.
  • Article 21- Protection of life and personal liberty:
    No person shall be deprived of his life or personal liberty except according to procedure established by law.
  • Article 50- Separation of Judiciary from executive The State shall take steps to separate the judiciary from the executive in the public services of the State.
  • Article 123- Power of President to promulgate Ordinances during recess of Parliament:
    1. If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require.
    2. An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance:
      1. The brackets and words '(including the quorum to constitute a meeting of the House)' ins. by the Constitution (Forty-second Amendment) Act, 1976 (date yet to be notified).
      2. Shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and
      3. May be withdrawn at any time by the President.
    3. If and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void.
  • Article 323A- Administrative tribunals:
    1. Parliament may, by law, provide for the adjudication or trial by administrative tribunals of disputes and complaints with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under the control of the Government of India or of any corporation owned or controlled by the Government.
  • Article 323B- Tribunals for other matters.:
    1. The appropriate Legislature may, by law, provide for the adjudication or trial by tribunals of any disputes, complaints, or offenses with respect to all or any of the matters specified in clause
    2. with respect to which such Legislature has the power to make laws.

Arguments by the Petitioner
Senior Advocate Arvind Datar, leading the arguments for the Madras Bar Association, while challenging the Constitutionality of the Amendments to the Finance Act, contended that the said Ordinance was violative of the Theory of Separation of Powers, which happens to be an integral part of the Basic Structure of the Indian Constitution, along with compromising the independence of the judiciary.

The fixation of the terms of the members of the tribunal to 4 years along with the maximum age limit of 50 years was challenged on the grounds of it being violative of the past rulings of the Supreme Court in several landmark judgments.

Apart from these contentions, the Madras Bar Council sought the establishment of a National Tribunals Commission or any specialized wing dedicated to catering to the requirements of Tribunals in India.

Arguments by the respondent
The Respondents, represented by the Attorney General and the Additional Solicitor General of India, refuted the contentions made by the Petitioners stating that the Parliament can override judicial pronouncements of courts and that the regulation of the service conditions of Members of Tribunals is a matter of Policy decision, well within the ambit of the Parliament's power. It was submitted that the practice of 'Legislative Overruling' was permissible and has been exercised previously as well.

Citing the Theory of Separation of Powers, it was contended that the Court could not issue any direction to the Legislature to make a law in a specified manner, and even if such directions are issued, they are to be treated as mere suggestions. Even those directions given in the absence of any law are subject to the provisions of future legislations.

Defending the age limit of 50 years, the Attorney General opined that this had been done in order to maintain equality since there happens to be no apparent uniformity regarding the tenures of Chairpersons and members across all tribunals in the country.

Findings of the court
A three-judge bench of the Supreme Court, comprising of Justices L Nageswara Rao, S Ravindra Bhat, and Hemant Gupta, on 14th July 2021 struck certain provisions of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 unconstitutional, which fixed the term of the members of the Tribunals to 4 years, by a 2:1 majority.

Justices L Nageswara Rao and S Ravindra Bhat, in their majority judgment, opined that this specific clause in the Ordinance violated the past directions of the Supreme Court wherein the terms of all such chairmen and members of Tribunals was fixed to be five years. In his dissenting judgment, Justice Hemant Gupta was of the opinion that laws could not be struck down merely because they are not in accordance with the precedents of the Apex Court.

With regard to the appointments made by the Search-Selection Committee, the Apex Court issued a direction mandating that all such appointments must be made within three months of receiving the recommendation, instead of the earlier discretionary provision, with only one name to be suggested for every post, instead of two.

Precedents relied upon
The 66-page judgment mainly relies on two decisions of the Supreme Court- Rojer Mathew v South Indian Bank Ltd & Ors. and Madras Bar Association v Union of India & Anr.

In Rojer Mathew (supra.), a five-judge Constitution Bench comprising of the then CJI Ranjan Gogoi, along with Justices NV Ramana, DY Chandrachud, Deepak Gupta, and Sanjiv Khanna, upheld the constitutional validity of Section 184 of the Finance Act, 2017 and observed that Tribunals were conceptualized as a specialized body for the resolution of disputes and the method of appointment to these tribunals has a great impact on determining the independence of the judiciary.

In Madras Bar Association v Union of India (supra.), the same bench, comprising of Justices L Nageswara Rao, Hemant Gupta, and S Ravindra Bhat, directed the Centre to constitute a National Tribunal Commission, which will act as a central body to regulate the appointment of members to tribunals across the country, and set the term of service of such members to 5 years, eligible for reappointment and that members like Vice-Chairman, Vice-Chairperson and Vice President shall be eligible to hold office till the attainment of 67 years of age.

A progressive judgment of its kind, it even permitted the appointment of Advocates with ten years of experience as judicial members of tribunals. These observations came in the wake of a petition filed by the Madras Bar Association, challenging the constitutional validity of the Tribunal, Appellate Tribunal, and other Authorities (Qualifications, Experience, and Other Conditions of Service of Members) Rules, 2020'.

It is a well-established fact that the Doctrine of Separation of Powers, which is essential to the functioning of the three organs of the State- i.e., the Legislature, the Judiciary, and the Executive, rightly form the basis for ensuring the independent functioning of the country's judicial system. In the said case, a clash between the legislature and the judiciary is apparent wherein there seems to be an override between the Legislature's attempt to override judicial pronouncements through legislations, which at times fails to withstand the test of constitutional correctness.

With a lot being said in recent times about the alarming figures of vacancies in tribunals, there is a need for a central structure in place to regulate the appointments, functioning, and other related matters concerning tribunals; it becomes all the more essential to implement the decision in the Madras Bar Association Case (2020) in order to meet the ends of justice. Presently, the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 stands replaced with the Tribunal Reforms Bill, 2021, passed by the Parliament in early August this year, surprisingly containing most of the provisions originally struck down by this ruling. Jurisprudentially speaking, this shall serve as an interesting folding of events related to Legislative Overruling.

Suggested Article:

  1. Constitutional validity of NCLT: in light of Madras Bar Association Case
  2. Autonomy of the Bar Cannot Be Taken Over By The Court: SC Quashes Madras HC Disciplinary Rules For Lawyers
  3. Analysis of The Tribunals Reforms (Rationalisation And Conditions Of Service) Ordinance, 2021

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