The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021
INTRODUCTION
Tribunals were established in India with the 42nd Amendment Act, which added Part XIV-A to the Constitution, in the year 1985, with the view to give quick, specialised and inexpensive adjudication in disputes arising in certain matters. However, in reality, the tribunals have not led to faster adjudication, according to the Statement of Objects and Reasons of the 2021 Bill and there is also a severe deficit in the infrastructure and staff of tribunals [1]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021. As a result, the tribunal system in India was not increasing the efficiency of the judicial system, as it was meant to, but was simply an additional burden to the exchequer.
In view of this situation, the central government has been trying to reform the workings of the tribunals, and reduce the number of tribunals. According to the government, this would reduce the financial burden to the exchequer, and deal with the deficit in infrastructure and staff.
The 2021 Tribunals Reforms Bill was introduced and passed in the Lok Sabha on August 2nd and August 3rd 2021 respectively. Subsequently, it was passed in the Rajya Sabha on August 9th 2021. The dissolving of certain existing appellate tribunals, and the transfer of their functions to other judicial forums, is the main objective of the bill. Further, it changed the terms and conditions of service of members and the chairperson in tribunals, as well as their appointments to tribunals.
BACKGROUND- EVENTS LEADING UP TO THE BILL
The first move by the central government to reform the Tribunal system came with the Finance act 2017, which also dissolved many tribunals, and modified the service conditions, qualifications and appointments (with the establishment of a search-cum-selection committee) of the members and chairperson of tribunals [2]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021. The rules released for this purpose, the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017, were struck down in the case of Rojer Mathew & Ors. vs. South Indian Bank Ltd. & Ors. (2019), as they did not fulfil the requirements of judicial independence, especially with regard to the composition of the search-cum-selection committee and did not provide for the security of tenure for members and the chairperson of tribunals, with its short tenure of four years [3]https://www.mondaq.com/india/trials-appeals-compensation/868746/roger-mathew-v-south-indian-bank-limited-ors.
The Central government’s next attempt came in the year 2020, with the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020. These provisions were challenged in the Supreme Court, in the case of Madras Bar Association vs. Union of India (2020). The Supreme Court suggested major changes to the rules: increasing the tenure of members and chairperson years to 5 years, instead of 4 (as once again fixed in the rules), allowing judicial members with experience of 10 years to be appointed to tribunals, and allowing for re-appointment of members [4]https://www.theleaflet.in/what-you-need-to-know-about-tribunal-reforms-bill-2021/.
Subsequently, the central government released updated rules in 2021, which incorporated some of the changes directed by the Supreme Court, for instance allowing advocates with 10 years’ relevant experience to be appointed. However, the central government also released the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (the Ordinance). The ordinance established a search-cum-selection committee, included a minimum age limit of 50 years to be appointed to a tribunal, and fixed tenure at four years [5]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021. Once again, these provisions were challenged and struck down in Madras Bar Association vs Union of India on 14 July 2021. It was held that the composition of the search-cum-selection committee, and the provision which stipulated that, “two names for appointment were to be recommended by the committee which the Union would then decide upon, ‘preferably’ within three months”, constituted a violation of the independence of the Judiciary, and that executive influence in these matters should be avoided [6]Madras Bar Association vs. Union of India (UOI) and Ors. (14.07.2021 – SC): MANU/SC/0429/2021. The court also struck down the period of tenure and the minimum age requirement. The similarity of this ordinance to previous rules and acts, which the court had already overruled, was noted by the court, and the court said that the legislature was illegally overruling earlier decisions of the court [7]Madras Bar Association vs. Union of India (UOI) and Ors. (14.07.2021 – SC): MANU/SC/0429/2021.
It is in this backdrop, of repeated clashes between the Central government and the judiciary, that the Tribunal reforms bill, 2021, which is nearly identical to the already abolished Tribunals reforms ordinance, was passed. The Bill re-enacts all the provisions from the Ordinance, which have been specifically struck down by the apex court.
FEATURES OF THE BILL
The bill dissolves certain existing appellate tribunals, and transfers their functions to other Judicial forums [8]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021. The bill abolishes five appellate tribunals, and so the appellate functions under the Geographical Indications of Goods (Registration and Protection) Act, The Cinematograph Act, The Trade Marks Act, The Customs Act, The Patents Act, have been shifted to the High court, the appellate function under National Highways (Land and Traffic) Act has been transferred to civil courts, the appellate functions under the Airports Authority of India Act have been shifted to the Central Government and the High Court, and those under the Copyright Act have been vested in the Commercial Courts or the commercial division of a High Court [9]https://prsindia.org/billtrack/the-tribunals-reforms-bill-2021.
The bill also amends the Consumer Protection Act, 2019 by stipulating that all employment terms and conditions of the President and other members of the National Consumer Disputes Redressal Commission shall be governed by the bill[10]https://www.theleaflet.in/what-you-need-to-know-about-tribunal-reforms-bill-2021/. The Finance Act, 2017 is also amended by the bill, as it removes the provisions relating to the terms and conditions of service, the qualifications and composition of search-cum-selections committees, and places these matters within its purview, empowering the central government to decide these matters [11]https://www.theleaflet.in/what-you-need-to-know-about-tribunal-reforms-bill-2021/. Under these terms and conditions, the bill imposes an age bar of 50 years for being appointed to a tribunal, and fixes the tenure of members of tribunals at 4 years, subject to upper age limits.
IMPACT
As the bill re-iterates the same provisions of the 2021 ordinance, as well as acts and rules that have already been struck down, and violates principles which have been laid down by the apex court, it received heavy criticism. As already mentioned in previous judgments, the composition of the search-cum selection committees, and the government’s power regarding matters of qualification and appointment, gives undue influence to the executive, and thereby the contradicts the doctrine of separation of powers, endangering the independence of the Judiciary. The short tenure of four years, along with the provision of re-appointment, allows the executive to exercise undue influence- it has been stated by the Supreme Court over the years that security of tenure and conditions of service are of paramount importance for the independence of the judiciary [12]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021. The short tenure may also meritorious candidates from applying, as they may not leave their well-established careers to serve as a member for such a short period [13]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021. Also, the age limit of 50 years imposed for appointment of tribunals, which was previously struck down, goes against the earlier judgements of the Supreme Court, which emphasised the recruitment of members at a young age[14]https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021.
Moreover, the dissolution of tribunals may also increase inefficiency in the judicial system, as it will increase the burden to an already overburdened court system. Cases, which would have been tried by the tribunals prior to this change, will now be tried by the courts, and given the number of already pending cases, this may decrease the efficiency of adjudication. Another factor, which may negatively affect adjudication proceedings due to the amendment, is that the courts may not have specialised knowledge of the subject matters, like the tribunals did.
CONCLUSION
The tribunals reforms bill, 2021 has garnered a lot of attention, being the latest in a series of clashes between the central government and the Judiciary. Despite the many valid criticisms of the bill, it is true that the reforms bill may promote efficiency of the judicial system if the courts are able to handle the influx of cases, and will reduce the financial burden on the exchequer. The changes in appointments, and terms and conditions of service may also address the lacking infrastructure and shortage of staff in the Tribunals. Furthermore, there are high chances that this bill will be struck down in view of the previously decided cases of the Supreme Court on this matter. There is currently a pending case, filed by the Madras Bar Association, challenging the Act (Citation for this case is not available since it is pending adjudication before the Apex Court). Therefore, whether or not this act will be struck down, and whether or not it will actually have a negative impact on the judiciary, remains to be seen.
Nivrithi Kailash Kumar
2nd Year B.A.LL.B (Hons), Jindal Global Law School, Haryana
References
| ↑1, ↑2, ↑5, ↑8, ↑12, ↑13, ↑14 | https://prsindia.org/billtrack/the-tribunals-reforms-rationalisation-and-conditions-of-service-bill-2021 |
|---|---|
| ↑3 | https://www.mondaq.com/india/trials-appeals-compensation/868746/roger-mathew-v-south-indian-bank-limited-ors |
| ↑4, ↑10, ↑11 | https://www.theleaflet.in/what-you-need-to-know-about-tribunal-reforms-bill-2021/ |
| ↑6, ↑7 | Madras Bar Association vs. Union of India (UOI) and Ors. (14.07.2021 – SC): MANU/SC/0429/2021 |
| ↑9 | https://prsindia.org/billtrack/the-tribunals-reforms-bill-2021 |
He holds a Bachelor’s and Master’s Degree in Corporate Secretaryship and a Degree in Law. He is a Fellow member of the Institute of Company Secretaries of India and an Associate Member of the Corporate Governance Institute, UK and Ireland. He has also completed a program from ISB on ‘Value Creation through Mergers and Acquisitions.
Mr P Muthusamy is an Indian Revenue Service (IRS) officer with an outstanding career of 30+ years of experience and expertise in all niche areas of Indirect Taxes covering a wide spectrum including GST, Customs, GATT Valuation, Central Excise and Foreign Trade.
During his judicial role, he heard and decided a large number of cases, including some of the most sensitive, complicated, and high-stake matters on insolvency and bankruptcy, including many cases on resolution plans, shareholder disputes and Schemes of Amalgamation, De-mergers, restructuring etc.,
Ms. Sarah Abraham has been enrolled with the Bar Council of Tamil Nadu since 1998. Her areas of practice include Shareholder Disputes, Corporate Compliances, Mergers and Acquisitions, Private Equity/ Venture Capital Agreements and allied disputes, Information Technology Contracts, Intellectual Property, General Commercial Agreements, Litigation, Arbitration and Mediation.
A K Mylsamy is the Founder, Managing Partner and the anchor of the firm. He holds a Degree in law and a Degree in Literature. He is enrolled with the Bar Council of Tamil Nadu.
M Subathra holds a Degree in law and a Master’s Degree in International Business Law from the University of Manchester, United Kingdom. She is enrolled with the Bar Council of Tamil Nadu.
Mr. K Rajendran is a former Indian Revenue Service (IRS) officer with a distinguished service of 35 years in the Indirect Taxation Department with rich experience and expertise in the fields of Customs, Central Excise, Service Tax and GST. He possesses Master’s Degree in English literature. Prior to joining the Department, he served for the All India Radio, Coimbatore for a period of about 4 years.
An MBA from the Indian Institute of Management, Calcutta, and an M.Sc. in Tourism Management from the Scottish Hotel School, UK, Ashok Anantram was one fo the earliest IIM graduates to enter the Indian hospitality industry. He joined India Tourism Development Corporation (ITDC) in 1970 and after a brief stint proceeded to the UK on a scholarship. On his return to India, he joined ITC Hotels Limited in 1975. Over the 30 years in this Organisation, he held senior leadership positions in Sales & Marketing and was its Vice President – Sales & Marketing. He was closely involved in decision making at the corporate level and saw the chain grow from a single hotel in 1975 to a very large multi-brand professional hospitality group.
Mani holds a Bachelor Degree in Science and P.G. Diploma in Journalism and Public Relations. He has a rich and varied experience of over 4 decades in Banking, Finance, Hospitality and freelance Journalism. He began his career with Andhra Bank and had the benefit of several training programs in Banking.
Mr. Kailash Chandra Kala joined the Department of Revenue, Ministry of Finance as ‘Customs Appraiser’ at Mumbai in the year 1993.
S Ramanujam, is a Chartered Accountant with over 40 years of experience and specialization in areas of Corporate Tax, Mergers or Demergers, Restructuring and Acquisitions. He worked as the Executive Vice-President, Group Taxation of the UB Group, Bangalore.
K K Balu holds a degree in B.A and B.L and is a Corporate Lawyer having over 50 years of Legal, Teaching and Judicial experience.
Justice M. Jaichandren hails from an illustrious family of lawyers, academics and politicians. Justice Jaichandren majored in criminology and then qualified as a lawyer by securing a gold medal. He successfully practiced in the Madras High Court and appeared in several civil, criminal, consumer, labour, administrative and debt recovery tribunals. He held office as an Advocate for the Government (Writs Side) in Chennai and was on the panel of several government organizations as senior counsel. His true passion lay in practicing Constitutional laws with focus on writs in the Madras High Court. He was appointed Judge, High Court of Madras in December 2005 and retired in February 2017.
S Balasubramanian is a Commerce and Law Graduate. He is a member of the Delhi Bar Council, an associate Member of the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and Management Accountants of India.