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The Supreme Court bench of Justice LN Rao, Justice SR Bhatt and Justice Hemant Gupta on Wednesday heard a batch of pleas filed by Madras Bar Association challenging the constitutionality of Section 12 and Section 13 of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (“Tribunals Reforms Ordinance, 2021”) to the extent it amended Section 184 and Section 186 of the Finance Act, 2017. 

Section 184 of the Finance Act, 2017 empowered the Central Government to make rules with respect to the qualifications, appointment, term and conditions of service, salary and allowances, etc., of Chairperson, Vice- Chairperson and Members, etc., of the Tribunal, Appellate Tribunal and other Authorities. As per the first proviso in Section 184(1), the tenure of the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or other Authority was five years. 

However the Tribunal Reforms Ordinance, 2021 which was notified on April 4, 2021 under section 12 substituted Section 184 of the Finance Act, 2017. Clause 11 of Section 184 which changed the tenure of the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or other Authority from five years to four years was inserted with retrospective effect from May 26, 2017. 

Further as per the proviso to the newly inserted Section 184(11) of the Finance Act, 2017, where a Chairperson or Member was appointed between the 26th day of May, 2017 and the notified date and the term of his office or the age of retirement specified in the order of appointment issued by the Central Government was greater than that which specified in this section, then, notwithstanding anything contained in this section, the term of office or age of retirement or both, as the case may be, of the Chairperson or Member shall be as specified in his order of appointment subject to a maximum term of office of five years.

Senior Advocate Arvind Datar appeared for Madras Bar Association and Learned Attorney General Shri KK Venugopal for Union of India.

Senior Advocate Arvind Datar to contend that the Section 12 and Section 13 of the Tribunal Reforms Ordinance, 2021 were in contravention of the principles of separation of power and independence of judiciary both being part of the basic structure of the Constitution submitted that the first proviso of Section 184(1) which provided for minimum age limit of 50 years to be appointed as the Chairperson or Member of the Tribunal was a direct attempt to override the Court’s statement with regards to 10 years of experience sufficient for a Judicial Member of the Tribunal.

With regards to the newly retrospective effect from May 26, 2017 of the newly inserted clause (11) under section 184 of the Finance Act, 2017, Senior Advocate Datar submitted that, “Section 184 which came in 2017, the notification said three years. Section 184(1) was upheld in Rojer Mathew. Section 184(11) brought a cap of four years and there was no notified date in 2017 at all. The notification came in 2020”

On the other hand, Learned Attorney General Shri KK Venugopal opposing Senior Advocate Arvind Datar’s submission contended that the discussions of the judgement of this court on the appointment & age of retirement of the judges of the tribunals are only issues which are to be left to the executive. 

It was also his contention that a series of judgments relating to the members or chairman of the tribunal did not form the basis of the law and that once the courts decided, the Parliament would equally be powerful to pass a law.

“No constitution would permit the destruction of the very creator of the powers. Independence of the judiciary is a part of the basic structure. Your lordships cannot take this up now to strike down a statute which can be struck only when it violates fundamental rights. So far as independence of judiciary is concerned with Article 14, then we have to see what exactly is being violated.”, AG further submitted.

The Attorney General to justify the Parliament’s act of amending the tenure of the Chairperson and Member of a Tribunal from five years to four years submitted that irrespective of the change in the tenure the right of re appointment and getting preference in terms of re appointment had been maintained. 

“High Court judges are only appointed at 45. But here the tribunal members are for 33 years to 67 years & remain a member without any check. This is all purely within the domain of the policy & executive.”, AG further submitted to substantiate his submission.

While pointing out the uncertainty and inconsistency of the tenure of the members in landmark judgements delivered by the Apex Court in regards to the tenure of members of the Tribunals, the AG said, “In Union of India v. R Gandhi, the tenure was again changed. Therefore there is no certainty in the terms of the appointment. Further in Rojer Mathew the term was 3 years. First of all I have objections to the judgement of Madras Bar Association passed in Nov, 2020. There is no consistency in the law which has been laid down in terms of tenure & therefore it is rejected. Second, there is no certainty.”

Bhatt J: I have a question with regards to re appointment. There are no ACR's. Right to re appointment should have an appraisal system. ITAT has rules wrt to ACR's. Right to re appointment could only be useful with regards to ACR's. There should be a laid down criteria for re appointment. 

The Court therefore while adjourning the matter for Thursday has directed the Counsels and Learned Attorney General to clarify on the aspect of ACR’s.