ROJER MATHEW v. SOUTH INDIAN BANK LTD. & ORS.

A appeals are obstructing the constitutional character of the Supreme Court and thus,disturbing the effective working of the Supreme Court as the appeals in these cases do not always involve a question of general public importance. The Supreme Court is primarily expected to deal with matters of constitutional importance and matters involving substantial question of law of general public importance. Due to overburdening, the Supreme Court is unable to timely address such matters.”

210Copy pinpoint210. Resultantly, majority of the matters involving significant Constitutional questions remain untouched for years; consequently the ability of this Court to keep in check the legislative and executive encroachments is significantly compromised. Cases heard by the Constitution Bench comprising of five or more judges have fallen significantly from over 15% in the 1950s to an average of 0.1 - 0.2% during the last two decades. Hence, it is clear that this Court has been, in a way, transformed from a Constitutional-Writ Court to a Court of D Appeals whereunder mere increase of the number of judges is no more a solution. Whilst the number of judges has increased slightly more than four times, the number of cases since 1950 has increased more than seventy folds! It is clear that there is a pressing need to realign the exercise of jurisdiction of this Court and ensure that the Constitutional vision is not defeated. This view has been resonated by this Court since it was highlighted by Justice P.N. Bhagwati in Bihar Legal Support Authority vs. Chief Justice of India48 in the following manner: “The Supreme Court of India was never intended to be a regular court of appeal against orders made by the High Court or the sessions court of the magistrates. It was created for the purpose of laying down the law for the entire country and the extraordinary jurisdiction of granting special leave was conferred upon it under Article 136 of the Constitution so that it could interfere whenever it found that the law was not correctly enunciated by the lower courts or tribunals and it was necessary to pronounce the correct law on the subject.”

211Copy pinpoint211. It is evident that this Court has also lost its original character owing to the routine hearing of appeals through invocation of the discretionary jurisdiction under Article 136. It is apposite to hold that

48 H (1986) 4 SCC 767

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Article 136 was never meant to be used in this manner as was very aptly remarked by Dr. B.R. Ambedkar before the Constituent Assembly, who noted that: “The Supreme Court is not likely to grant special leave in any matter whatsoever unless it finds that it involves a serious breach of some principle in the administration of justice, or breach of certain principles which strike at the very root of administration of justice as between man and man.”

212Copy pinpoint212. Such self-effacement of this Court’s Constitutional duties requires to be reined in. It is, therefore, essential that this Court judiciously exercise its appellate jurisdiction. For the discharge of C Constitutional functions of deliberating on substantial questions of law, answering Constitutional questions and resolving other issues of great public importance, it is essential that this Court has adequate time to apply its mind and consider matters in depth. The existing practice of bringing every second case before the SC under Article 136 must be deprecated. D

213Copy pinpoint213. Such a proposed restrictive appellate jurisdiction would mirror the practice of the highest Courts in various other jurisdictions. The Supreme Court of the United States in the famous case of Marbury vs. Madison 49 noted that it was impermissible for the legislature to expand its original jurisdiction. After examining the E framework of the Constitution of the United States, the Court noted that the original jurisdiction of the SC was limited to disputes involving States (as federal units) and the Union only. Except for that, all other cases can only be brought about in appellate jurisdiction. Although not explicitly stated, such an exercise was felt to be necessary to check a burgeoning expansion and overloading of the Court’s docket. F

214Copy pinpoint214. Providing statutory appeals directly to the Supreme Court dents this to no end. With increasing tribunalisation, statutory appeal provisions are ostensibly being included without undertaking any ‘Judicial Impact Assessment’. As of last count there are several hundreds of cases which have been decided by the NCLAT and many other G thousands by other tribunals pending in this Court.

215Copy pinpoint215. Note must be taken of the direction this country is heading towards for the same has a lasting impact on the kind of disputes which 49 5 U.S. (1 Cranch) 137 (1803). H

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A arise before this court. No system can be made in a vacuum, including our own. With the establishment of more tribunals and with increasing commercialisation in line with India’s transformation to an open market liberal economy, the number of these cases is bound to only increase. Unlike routine criminal or civil matters which are tried exclusively before ordinary courts, matters which fall before Tribunals are often complex and commercial.

216Copy pinpoint216. In light of this, provisions for statutory appeals directly and liberally to the Supreme Court raises the inevitability of bogging the Court down and inhibiting its Constitutional objective. Further, providing statutory appeals to this Court against orders of Tribunals also undermines the essence of tribunalisation. It is hardly rational to state on one hand that an alternate to the ordinary method of justice dispensation needs to be provided owing to the complicated procedures and owing to the lack of specialisation of District and High Courts, and in the same breadth also provide statutory appeals to the final Court in that very original system.

217Copy pinpoint217. If High Courts are ill placed to hear routine matters then it hardly seems justifiable that this Court would be any better placed to resolve disputes in appellate jurisdiction. Finality as a principle must be encouraged and providing statutory appeals to the Supreme Court only undermines the same. Instead, no discernible harm would arise if decisions of Tribunals or High Courts attain finality, without reaching this Court.

218Copy pinpoint218. A dichotomy in law is further caused by provisions of direct appeal from Tribunals to this Court, as noted in the case of the Armed F Forces Tribunals in Union of India v. Major General Shrikant Sharma50. The two-judge Bench viewed that: “Likelihood of anomalous situation

42. If the High Court entertains a petition under Article 226 of the Constitution of India against an order passed by the Armed G Forces Tribunal under Section 14 or Section 15 of the Act bypassing the machinery of statute i.e. Sections 30 and 31 of the Act, there is likelihood of anomalous situation for the aggrieved person in praying for relief from this Court.

50 H (2015) 6 SCC 773.

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43. Section 30 provides for an appeal to this Court subject to leave granted under Section 31 of the Act. By clause (2) of Article 136 of the Constitution of India, the appellate jurisdiction of this Court under Article 136 has been excluded in relation to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces. If any person aggrieved by the order of the Tribunal, moves the High Court under Article 226 and the High Court entertains the petition and passes a judgment or order, the person who may be aggrieved against both the orders passed by the Armed Forces Tribunal and the High Court, cannot challenge both the orders in one joint appeal. The aggrieved person may file leave to appeal under Article 136 of the Constitution against the judgment passed by the High Court but in view of the bar of jurisdiction by clause (2) of Article 136, this Court cannot entertain appeal against the order of the Armed Forces Tribunal. Once, the High Court entertains a petition under D Article 226 of the Constitution against the order of the Armed Forces Tribunal and decides the matter, the person who thus approached the High Court, will also be precluded from filing an appeal under Section 30 with leave to appeal under Section 31 of the Act against the order of the Armed Forces Tribunal as he cannot challenge the order passed by the High Court under E Article 226 of the Constitution under Section 30 read with Section 31 of the Act. Thereby, there is a chance of anomalous situation. Therefore, it is always desirable for the High Court to act in terms of the law laid down by this Court as referred to above, which is binding on the High Court under Article 141 of the Constitution F of India, allowing the aggrieved person to avail the remedy under Section 30 read with Section 31 of the Armed Forces Tribunal Act.

44. The High Court (the Delhi High Court) while entertaining the writ petition under Article 226 of the Constitution bypassed the machinery created under Sections 30 and 31 of the Act. G However, we find that the Andhra Pradesh High Court and the Allahabad High Court had not entertained the petitions under Article 226 and directed the writ petitioners to seek resort under Sections 30 and 31 of the Act. Further, the law laid down by this Court, as referred to above, being binding on the High Court, H

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A we are of the view that the Delhi High Court was not justified in entertaining the petition under Article 226 of the Constitution of India.”

219Copy pinpoint219. The seven-judge Constitution Bench in L. Chandra Kumar (supra) considered at great length the permissibility of altering the power of judicial review exercisable by High Courts under Article 226. It authoritatively held that all orders passed by Tribunals which have been established under Article 323A or 323B of the Constitution, shall be amenable to the writ jurisdiction of High Courts. This Court, however, in an attempt to respect the intent of facilitating speedy disposal expressed by the Parliament, directed that such orders of the Central Administrative Tribunals be heard by a Division Bench of the High Court if challenged under Article 226. This Court, thus, held:- “91. It has also been contended before us that even in dealing with cases which are properly before the Tribunals, the manner in which justice is dispensed by them leaves much to be desired. Moreover, the remedy provided in the parent statutes, by way of an appeal by special leave under Article 136 of the Constitution, is too costly and inaccessible for it to be real and effective. Furthermore, the result of providing such a remedy is that the docket of the Supreme Court is crowded with decisions of Tribunals that are challenged on relatively trivial grounds and it is forced to perform the role of a first appellate court. We have already emphasised the necessity for ensuring that the High Courts are able to exercise judicial superintendence over the decisions of the Tribunals under Article 227 of the Constitution. F In R.K. Jain case [(1993) 4 SCC 119 : 1993 SCC (L&S) 1128 : (1993) 25 ATC 464] , after taking note of these facts, it was suggested that the possibility of an appeal from the Tribunal on questions of law to a Division Bench of a High Court within whose territorial jurisdiction the Tribunal falls, be pursued. It G appears that no follow-up action has been taken pursuant to the suggestion. Such a measure would have improved matters considerably. Having regard to both the aforestated contentions, we hold that all decisions of Tribunals, whether created pursuant to Article 323-A or Article 323-B of the Constitution, will be H subject to the High Court’s writ jurisdiction under Articles 226/

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227 of the Constitution, before a Division Bench of the High Court A within whose territorial jurisdiction the particular Tribunal falls.”

220Copy pinpoint220. It is hence clear post L Chandrakumar (supra) that writ jurisdiction under Article 226 does not limit the powers of High Courts expressly or by implication against military or armed forces disputes. The limited ouster made by Article 227(4) only operates qua B administrative supervision by the High Court and not judicial review. Article 136(2) prohibits direct appeals before the Supreme Court from an order of armed forces tribunals, but would not prohibit an appeal to the Supreme Court against the judicial review exercised by the High Court under Article 226. C

221Copy pinpoint221. However, it is essential that High Courts use such powers of judicial review restrictively and on limited grounds, similar to the concept of ‘regulatory deference’ which has evolved in the United States. Such a need was also noted by a nine-judge bench in Mafatlal Industries Ltd. vs. Union of India51 which held that: D

“… While the jurisdiction of the High Courts under Article 226— and of this Court under Article 32—cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions E of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.” F

222Copy pinpoint222. The jurisdiction under Article 226, being part of the basic structure, can neither be tampered with nor diluted. Instead, it has to be zealously-protected and cannot be circumscribed by the provisions of any enactment, even if it be formulated for expeditious disposal and G early finality of disputes. Further, High Courts are conscious enough to understand that such power must be exercised sparingly by them to ensure that they do not become alternate forums of appeal. A five-judge

51 (1997) 5 SCC 536 52 (1955) 2 SCR 1 H

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A bench in Sangram Singh v. Election Tribunal52 whilst reiterating that jurisdiction under Article 226 could not be ousted, laid down certain guidelines for exercise of such power: “13. The jurisdiction which Articles 226 and 136 confer entitles the High Courts and this Court to examine the decisions of all tribunals to see whether they have acted illegally. That jurisdiction cannot be taken away by a legislative device that purports to confer power on a tribunal to act illegally by enacting a statute that its illegal acts shall become legal the moment the tribunal chooses to say they are legal. The legality of an act or conclusion is something that exists outside and apart from the decision of an inferior tribunal. It is a part of the law of the land which cannot be finally determined or altered by any tribunal of limited jurisdiction. The High Courts and the Supreme Court alone can determine what the law of the land is vis-a-vis all other courts and tribunals and they alone can pronounce with authority and finality on what is legal and what is not. All that an inferior tribunal can do is to reach a tentative conclusion which is subject to review under Articles 226 and 136. Therefore, the jurisdiction of the High Courts under Article 226 with that of the Supreme Court above them remains to its fullest extent despite Section E 105.”

223Copy pinpoint223. It is apparent that the Legislature has not been provided with desired assistance so that it may rectify the anomalies which arise from provisions of direct appeal to the Supreme Court. Considering that such direct appeals have become serious impediments in the discharge of Constitutional functions by this Court and also affects access to justice for citizens, it is high time that the Union of India, in consultation with either the Law Commission or any other expert body, revisit such provisions under various enactments providing for direct appeals to the Supreme Court against orders of Tribunals, and instead provide appeals to Division Benches of High Courts, if at all necessary. Doing so would have myriad benefits. In addition to increasing affordability of justice and more effective Constitutional adjudication by this Court, it would also provide an avenue for High Court Judges to keep face with contemporaneous evolutions in law, and hence enrich them with adequate experience before they come to this Court. We direct that the Union undertake such an exercise expeditiously, preferably within

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a period of six months at the maximum, and place the findings before A Parliament for appropriate action as may be deemed fit. ISSUE VIII: WHETHER THERE IS A NEED FOR AMALGAMATION OF EXISTING TRIBUNALS AND SETTING UP OF BENCHES B

224Copy pinpoint224. While seeking a ‘Judicial Impact Assessment’ of all existing Tribunals, counsels for petitioners/appellant(s) have underscored the exorbitant pendency before of a number of Tribunals like the CESTAT and ITAT, which they claim affects the very objective of tribunalisation. On the other hand, they also highlight an incongruity wherein numerous Tribunals are hardly seized of any matters, and are exclusively situated in one location.

225Copy pinpoint225. As noted by this court on numerous occasions, including in Madras Bar Association (2014) (supra), although it is the prerogative of the Legislature to set up alternate avenues for dispute resolution to supplement the functioning of existing Courts, it is essential that such mechanisms are equally effective, competent and accessible. Given that jurisdiction of High Courts and District Courts is affected by the constitution of Tribunals, it is necessary that benches of the Tribunals be established across the country. However, owing to the small number of cases, many of these Tribunals do not have the critical mass of cases required for setting up of multiple benches. On the other hand, it is evident that other Tribunals are pressed for resources and personnel.

226Copy pinpoint226. This ‘imbalance’ in distribution of case-load and inconsistencies in nature, location and functioning of Tribunals require urgent attention. It is essential that after conducting a Judicial Impact F Assessment as directed earlier, such ‘niche’ Tribunals be amalgamated with others dealing with similar areas of law, to ensure effective utilisation of resources and to facilitate access to justice.

227Copy pinpoint227. We accordingly direct the Union to rationalise and amalgamate the existing Tribunals depending upon their case-load and G commonality of subject-matter after conducting a Judicial Impact Assessment, in line with the recommendation of the Law Commission of India in its 272nd Report. Additionally, the Union must ensure that, at the very least, circuit benches of all Tribunals are set up at the seats of all major jurisdictional High Courts. H

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A CONCLUSION

228Copy pinpoint228. In light of the above discussions and our analysis, it is held that: (i) The issue and question of Money Bill, as defined under Article 110(1) of the Constitution, and certification accorded by the Speaker of the Lok Sabha in respect of Part-XIV of the Finance Act, 2017 is referred to a larger Bench. (ii) Section 184 of the Finance Act, 2017 does not suffer from excessive delegation of legislative functions as there are adequate principles to guide framing of delegated legislation, which would include the binding dictums of this Court. (iii) The Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of D Service of Members) Rules, 2017 suffer from various infirmities as observed earlier. These Rules formulated by the Central Government under Section 184 of the Finance Act, 2017 being contrary to the parent enactment and the principles envisaged in the E Constitution as interpreted by this Court, are hereby struck down in entirety. (iv) The Central Government is accordingly directed to re- formulate the Rules strictly in conformity and in accordance with the principles delineated by this Court F in R.K. Jain (supra), L. Chandra Kumar (supra), Madras Bar Association (supra) and Gujarat Urja Vikas Ltd. (supra) conjointly read with the observations made in the earlier part of this decision. (v) The new set of Rules to be formulated by the Central Government shall ensure non-discriminatory and uniform conditions of service, including assured tenure, keeping in mind the fact that the Chairperson and Members appointed after retirement and those who are appointed from the Bar or from other specialised professions/ services, constitute two separate and distinct homogeneous classes.

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(vi) It would be open to the Central Government to provide A in the new set of Rules that the Presiding Officers or Members of the Statutory Tribunals shall not hold ‘rank’ and ‘status’ equivalent to that of the Judges of the Supreme Court or High Courts, as the case may be, only on the basis of drawing equal salary or other perquisites. B (vii) There is a need-based requirement to conduct ‘Judicial Impact Assessment’ of all the Tribunals referable to the Finance Act, 2017 so as to analyse the ramifications of the changes in the framework of Tribunals as provided under the Finance Act, 2017. Thus, we find it C appropriate to issue a writ of mandamus to the Ministry of Law and Justice to carry out such ‘Judicial Impact Assessment’ and submit the result of the findings before the competent legislative authority. (viii) The Central Government in consultation with the Law D Commission of India or any other expert body shall re- visit the provisions of the statutes referable to the Finance Act, 2017 or other Acts as listed in para 174 of this order and place appropriate proposals before the Parliament for consideration of the need to remove direct appeals to the Supreme Court from orders of Tribunals. E A decision in this regard by the Union of India shall be taken within six months. (ix) The Union Government shall carry out an appropriate exercise for amalgamation of existing Tribunals adopting the test of homogeneity of the subject matters to be dealt F with and thereafter constitute adequate number of Benches commensurate with the existing and anticipated volume of work. INTERIM RELIEF

229Copy pinpoint229. As the Tribunal, Appellate Tribunal and other Authorities G (Qualification, Experience and other Conditions of Service of Members) Rules, 2017 have been struck down and several directions have been issued vide the majority judgment for framing of fresh set of Rules, we, as an interim order, direct that appointments to the Tribunal/ Appellate Tribunal and the terms and conditions of appointment shall H

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A be in terms of the respective statutes before the enactment of the Finance Bill, 2017. However, liberty is granted to the Union of India to seek modification of this order after they have framed fresh Rules in accordance with the majority judgment. However, in case any additional benefits concerning the salaries and emoluments have been granted under the Finance Act, they shall not be withdrawn and will be B continued. These would equally apply to all new members.

230Copy pinpoint230. The present batch of matters is accordingly disposed of.

231Copy pinpoint231. Writ Petition (Civil) No. 267 of 2012 is also disposed of in the above terms as the issues arising are similar. C

DR. DHANANJAYA Y. CHANDRACHUD, J INDEX A Introduction D A.1 Challenges of the tribunal structure A global trend The old and the new Domain specialisation E Expedition Impact assessment Independence

F A.2 A brief history of tribunalisation in India A.3 Shortcomings of the current framework

B The Reference to the Constitution Bench G C Money Bills Ordinary Bills, Money Bills and Financial Bills Money Bills : Article 110

H Certification by the Speaker

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Final but not conclusive A Matters of procedure and substantive illegalities D Puttaswamy: Judicial review of the certificate of the Speaker B E Role of the Rajya Sabha Bicameralism F Merits of the challenge F.1 Passage as a Money Bill C F.2 Violation of directions issued by this Court F.3 Severability G Conclusion D A Introduction A.1 Challenges of the tribunal structure A global trend

1. India is no exception to the global trend towards the tribunalisation of justice. World over, tribunals have been constituted both in regulatory and adjudicatory areas. Tribunals act as adjudicators of disputes. This movement has in part been occasioned by new legislation governing modern societies as they confront the challenges thrown up by the complexities of social and economic orderings. The engagement of law with economics and technology has been shaped by social, cultural and historical contexts. While many of them may reflect the shared aspirations of societies governed by a common legal tradition, it would be simplistic to assume that the challenges thrown up by the layered adjudication through tribunals are common to all societies. Hence, as we analyse the impact of the growing movement towards tribunalisation – a feature which is common to all societies – it is important to bear in mind the context in which our problems have arisen as we attempt to find answers to many of those concerns. Precedents, both judicial and scholarly, in other jurisdictions furnish a useful point of reference, so long as we understand that which is peculiarly our own. H

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A The old and the new

2. Courts and tribunals should in theory be, but are not always in practice, cooperative allies. Tribunals have taken over the mantle of deciding cases which conventionally were assigned for adjudication to courts. Litigation, traditionally the domain of courts, has in incremental stages come to be transferred to the decision-making authority of tribunals. There is hence a jurisdictional transfer of dispute resolution to tribunals. Accompanied by legislative enactment, this postulates the exclusivity of entrustment to tribunals. Then again, new tribunals have been constituted to deal with subject areas of a genre quite distinct from, and therefore, unlike the traditional pattern of litigation with which conventional courts were familiar. Tribunals have thus not only taken away subjects which have been carved out of the jurisdiction of courts as a matter of legislative policy, but have also fostered a new culture of adjudication over areas in which a traditional court mechanism had little experience and expertise. In that sense, tribunalisation represents an amalgam of the old and the new: a combination of the role which was traditionally performed by the court together with new functional responsibilities, quite unlike the dispute resolution function which was traditionally performed by courts. Domain specialisation

E 3. The movement towards setting up tribunals has been hastened in many parts by the need for specialisation. Specialisation acknowledges the pool of knowledge and domain expertise of persons who discharge core adjudicatory functions within tribunals. The assumption which underlies the setting up of tribunals is that those who decide are individuals possessed of the qualities necessary for adjudication in that specific field. Acquisition of knowledge prior to appointment to a tribunal and practical experience of handling subject areas reserved for the tribunal bring together a pool of individuals possessing the qualifications and abilities to render specialised justice. In fostering specialisation, the tribunal structure emphasises the specialisation of adjudicatory personnel. But equally, an important facet is the specialisation of those who appear before the tribunals. A specialised Bar is an invaluable input towards the efficiency of institutional adjudication. Together, this contributes to an adjudicatory process which is cognisant of the special features, needs and requirements of the subject areas carved for the tribunal.

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4. The extent to which the purpose of setting up tribunals is realized is often a projection of ground realities. These realities, including the manner and extent to which provisions of the law governing a tribunal are enforced, directly impact upon the efficacy of the tribunal. Critical to the purpose of having a specialised tribunal is the presence of specialised adjudicators on decision-making posts. For, it is their domain expertise which defines the quality of outcomes in the adjudicatory process. Collectively, the presence of specialised adjudicators depends upon well-trained and qualified persons and their availability in a source pool. This factor has often been lost sight of in the selection of judges to specialised tribunals. Absent the requisite degree of expertise, the procedure and functioning of the tribunal may only replicate a conventional adjudication in a court of law which the tribunal seeks to substitute. Expedition

5. Apart from specialisation, a significant reason for the establishment of tribunals is expedition in the course of justice. This is also linked to the perceived values implicit in a specialised adjudicatory process. Domain expertise, particularly in a complex area, is a means of allowing adjudicators who understand the subject to decide quickly and effectively. It is often expected that the tribunal will follow procedures which are less cumbersome and tied to forms established in conventional courts. By allowing for a measure of procedural flexibility coupled with domain knowledge, tribunals are expected to remedy some of the causes which burden the judicial system.

6. Similarly, another object of the growing need for tribunalisation is to unburden the court system. That purpose may be subserved when F a chunk of existing cases pending before the conventional court system are transferred for adjudication to the newly created body. Reducing the burden on courts is a partial realisation of the purpose underlying the creation of the tribunal. Equally significant is that the tribunal must possess the ability not to allow, over a period of time, accretions of undisposed cases which had created judicial arrears in the first place. G Statistical reduction of pending arrears in the judicial system occasioned by the creation of a tribunal has to be matched by the capacity of the new body to dispose of cases transferred to it from the court as well as new institutions before it. If this is not achieved, the net result is to defeat the very purpose of establishing the tribunal. H

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A Impact assessment

7. Our analysis above indicates that the actual impact of the creation of a structure of tribunals needs to be closely monitored to assess the efficacy of a tribunal as a measure of legal reform. The efficacy of the tribunal is functionally dependent on the availability of resources and capital, both human and otherwise. The tribunal must be possessed of adequate infrastructure both in terms of physical availability and the deployment of technological knowledge in the management of litigation. The procedures adopted by the tribunal must be flexible enough to allow for decision-making effectively and without delay. The process of making appointments to the tribunals must be seamless in order to fill up vacancies arising from retirement or unforeseen causes. The presence of large-scale vacancies can render tribunals defunct. This defeats the cause of justice in the area of the jurisdiction of the tribunal. This problem becomes particularly acute where a jurisdiction of a conventional court has been transferred to the tribunal under the provisions of an operating enactment. Absent a recourse to traditional courts for the resolution of conflicts, a litigant is virtually denied access as a result of an unavailable adjudicator to resolve a dispute. In other words, the process for appointment and selection has a direct bearing on the efficacy of tribunalisation. Keeping vacancies unfilled, either as a matter of tardy procedures or for other reasons, has the tendency to denude the efficacy of the tribunal as a dispute resolution mechanism. The surest way to deny access to justice is to keep a large number of vacancies. Independence

F 8. Above all, the efficacy of tribunalisation rests in the confidence in the process of providing justice. This is determined by the independence and objectivity of justice providers. There is a vital societal interest in preserving the sanctity of the process by which judges are selected for appointment. The method of selecting and appointing judges to tribunals determines in the ultimate analysis, the independence of the G tribunals. Tribunals have been conceived as institutional measures to provide justice in substitution of that provided by conventional courts. Hence, there is a valid reason to ensure the independence of these adjudicating bodies. The process of selection as well as the terms of appointment is determinative of the ability to attract talent to the tribunals. H Hence, in preserving the independence of the tribunals as a facet of

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judicial independence, the effort must be to ensure that the adjudicatory body is robust: subservient to none and accountable to the need to render justice in the context of specialised adjudication. A2 A brief history of tribunalisation in India

9. Delay and backlog in adjudication of cases was a problem even during the colonial era.1 The earliest available effort suggesting reforms to handle arrears was the Justice Rankin Committee report in 1924. Since then, there have been a number of expert body reports, including the Law Commission of India. In India, the establishment of tribunals was done in 1941 by the colonial government. Post-Independence, tribunals were first created in the sphere of tax laws. The original C Constitution referred to tribunals only incidentally in Articles 136 and 227, which specify that the Supreme Court and the High Courts respectively shall have power to review decisions of tribunals. The High Court Arrears Committee constituted with Justice J. C. Shah as Chairperson in 1969 recommended the constitution of an independent tribunal to handle service matters pending before the High Courts and the Supreme Court. The Swaran Singh Committee had been constituted by the Union Government to recommend changes to the Constitution. Its report released in 1986 recommended the setting up of tribunals for three broad subject areas to reduce arrears in the Indian legal system. The report further recommended that the decisions of all these tribunals should be subject to the jurisdiction of the Supreme Court under Article 136 of the Constitution, but should exclude the jurisdiction of all other courts, including writ jurisdiction.

10. Consequently, the establishment of tribunals in India attained constitutional recognition by the insertion of Articles 323A and 323B in the Constitution, which granted power to the Parliament and state legislatures to establish administrative tribunals and tribunals for other matters respectively.

11. In pursuance of the power conferred upon it by clause (1) of Article 323A of the Constitution, Parliament enacted the G Administrative Tribunals Act 19852 for the setting up of tribunals to deal 1 Arun K Thiruvengadam, ‘Tribunals’ in The Oxford Handbook Of The Indian Constitution (Sujit Choudhry et al eds., (Oxford University Press New York, 2016), pp. 412-31. 2 “1985 Act” H

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A exclusively with service matters. In S P Sampath Kumar v Union of India3 (‘Sampath Kumar’), the first challenge to the constitutionality of tribunals arose. This court held that the ‘tribunal should be a real substitute for High Courts — ‘not only in form and de jure but in content and de facto.’ In this view, alternative arrangements have to be effective and efficient as also capable of upholding constitutional B limitations. The court held that though judicial review is a basic feature of the Constitution, vesting of the power of judicial review in an alternative institutional mechanism would not do violence to the basic structure of the Constitution so long as it was ensured that the alternative mechanism was an effective and real substitute for the High C Court. It was also held that a High-Power Selection Committee4 must be constituted with a sitting judge of the Supreme Court nominated by the Chief Justice of India to ensure the selection of competent adjudicators to the tribunals. Upholding the vires of the 1985 Act, the Court suggested several amendments to cure the defects with respect to the composition of the tribunal and the mode of appointment of the D Chairperson, Vice-Chairperson and members which were to be carried out by 31 March, 1987.

12. Decisions subsequent to Sampath Kumar had required a fresh look by a larger Bench of this Court over the issues that had been decided. In L Chandra Kumar v Union of India 5 (‘Chandra E Kumar’), a seven judge Bench of this Court revisited the challenge to the 1985 Act and the power conferred on the Parliament or the state legislatures by Articles 323A(2)(d) and 323B(3)(d), as the case may be, to exclude the jurisdiction of ‘all courts’, except that of this Court under Article 136 in respect of disputes referred to in those Articles. Overruling the decision in Sampath Kumar, this Court drew a F distinction between the substitutional role and the supplemental role of tribunals with respect to High Courts and held that the role of tribunals is supplemental in nature. 3 (1987) 1 SCC 124 4 “We do not want to say anything about Vice-Chairman and members dealt with in G sub-sections (2), (3) or (3-A) because so far as their selection is concerned, we are of the view that such selection when it is not of a sitting Judge or retired Judge of a High Court should be done by a high-powered committee with a sitting Judge of the Supreme Court to be nominated by the Chief Justice of India as its Chairman. This will ensure selection of proper and competent people to man these high offices of trust and help to build up reputation and acceptability.” 5 H (1997) 3 SCC 261

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13. Chief Justice A M Ahmadi noted that the Constitution A provides elaborate provisions dealing with terms of appointments of judges of higher courts. The learned judge observed that the same safeguards are not available to the subordinate judiciary or members of tribunals. Hence, they can never be considered full and effective substitutes for the superior judiciary in discharging the function of constitutional interpretation : “78…The constitutional safeguards which ensure the independence of the Judges of the superior judiciary, are not available to the Judges of the subordinate judiciary or to those who man tribunals created by ordinary legislations. Consequently, Judges of the latter category can never be considered full and effective substitutes for the superior judiciary in discharging the function of constitutional interpretation…” (Emphasis supplied) D The Court struck down Articles 323A(2)(d) and 323B(3)(d) as unconstitutional. It was also held that an “exclusion of jurisdiction” clause enacted in any legislation, under the aegis of Articles 323A(2)(d) and 323B(3)(d) is unconstitutional. E

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A 15. Though the legislature is empowered to prescribe qualifications for members, the Court held that superior courts in the country retain their power of judicial review over the prescribed qualifications to ensure that judicial functions are discharged effectively. The Court surveyed various enactments 9 and the qualifications prescribed in them for appointment as judicial and technical members B and noted that the ‘speed at which the qualifications for appointment as members is being diluted is, to say the least, a matter of great concern for the independence of the judiciary.’ The Court cautioned that tribunals cannot become providers of sinecure to members of civil services, by appointing them as technical members. The Court emphasised that C ‘impartiality, independence, fairness and reasonableness in decision making are the hallmarks of judiciary’ and laid down the eligibility criteria for judicial and technical members. Taking note of the recruitment conditions for judicial and technical members, tenure and service conditions, the Court upheld the creation of the NCLT and NCLAT. Several suggestions to amend part 1-B and 1-C were issued, D to be carried out as a condition precedent to ensure that the NCLT and the NCLAT may be made operational in accordance with the observations made by this Court.

16. In Madras Bar Association v Union of India10 (‘Madras Bar Association II’), the constitutional validity of the National Tax E Tribunal Act 200511 and the Constitution (Forty-Second) Amendment 1976 was challenged on the ground of violating the basic structure of the Constitution. The National Tax Tribunal12 was vested with the power of adjudicating appeals which included a substantial question of law arising from orders passed by appellate tribunals under specific tax enactments. Prior to the 2005 Act, the jurisdiction to adjudicate these appeals lay with the jurisdictional High Court.

17. The Court rejected the contention that there was a constitutional mandate for the appellate jurisdiction pertaining to tax matters to remain with the High Courts, but held that the members of the Tribunal should be appointed in the same manner and should be

9 Administrative Tribunals Act 1985, Information Technology Act 2000, Companies Act 1956 as amended (Chapter 1B). 10 (2014) 10 SCC 1 11 2005 Act 12 H “NTT”

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entitled to the same security of tenure as the judges of the Court sought A to be substituted. The Court rejected the challenge based on the separation of powers and proceeded to examine the validity of individual provisions. Section 6 of the Act permitted accountant members or technical members in the respective appellate tribunals to be appointed as members of the NTT. The Court affirmed the position laid down in B Chandra Kumar and R Gandhi that the appointment of technical members is restricted to the cases where technical expertise is essential for adjudication and is impermissible in any other case. Thus, the provision was struck down.

18. Section 7 of the 2005 Act provided for the process of selection and appointment of the Chairperson and members of the NTT. The C Court observed that as the jurisdiction of the High Courts was being transferred to the Tribunal, the stature of the members, conditions of service, and manner of appointment and removal of members must be akin to that of the judges of High Courts. The selection process included Secretaries of the Departments of the Central Government. The Court D struck down the section as unconstitutional. Finally, Section 8 stipulated that that a Chairperson/Member who is appointed for an initial duration of five years, is eligible for reappointment for a further period of five years. Striking down the provision as unconstitutional, the Court held that the provision for reappointment would undermine the independence of the member who would presumably be constrained to decide matters in a manner that would ensure their reappointment. The Court noted that since the NTT had been vested with jurisdiction that earlier vested in the High Courts, all matters of appointment and extension of tenure must be shielded from the executive. The Court noted that upon the declaration of numerous provisions as unconstitutional, the remaining provisions were rendered ‘otiose and worthless’. Hence, the 2005 Act was struck down in its entirety.

19. Pursuant to the enactment of the Companies Act 2013, a Constitution Bench of this Court in Madras Bar Association v Union of India13 dealt with the contention that despite the directions issued in R Gandhi in respect of the provisions concerning the NCLT and the NCLAT, analogous provisions had been inserted in the 2013 Act without complying with those directions. The Court embarked on a comparison of various provisions of the Companies Act 2013 with the 13 (2015) 8 SCC 583 H

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A directions issued in R Gandhi and observed that many discrepancies persisted which were in contravention of the directions issued by this Court in the earlier round of litigation concerning the qualifications, appointments, eligibility, and composition of the Selection Committees. The Court affirmed the directions issued in R Gandhi including the direction on the composition of the Selection Committee and held that B once remedial measures are taken to bring the provisions in conformity with the directions issued, the NCLT and the NCLAT may commence operations. A.3 Shortcomings of the current framework

21. Vidhi Centre for Legal Policy in a report titled “Reforming F The Tribunals Framework In India” highlights the problems plaguing the tribunal system in India. These problems have been categorised thus: A) Lack of independence The report highlights that in some cases, Ministries are parties before the tribunals. The staff, finances, and administration are under G the control of the Ministry. The problem is exacerbated by a revolving door between the bureaucracy and tribunal posts. Therefore, the report states that it is crucial to assess the independence of tribunals based on the certain parameters including (a) appointment of members; b) removal of members; (c) reappointments; (d) nodal ministry; and H (e) proclivity to appoint judges/bureaucrats.

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B) Administrative concerns: lack of uniformity in regulation The report notes that an inconsistency in qualification requirements leads to differences in competencies, maturity and status of members. These inconsistencies are problematic with regard to the growing trend of tribunalisation. Further, the short tenure of members obviates the cultivation of ‘domain expertise’, which can have an impact on the efficacy of tribunals. It is also recommended that the age of retirement be made uniform as uneven tenures hamper institutional continuity. The report notes the holding in L Chandra Kumar which criticizes the inconsistencies in the appointment process, qualification of members, age of retirement, resources and infrastructure of different tribunals. They can be attributed to tribunals operating under different ministries. The report affirms the observation in the judgment that a single nodal authority or ministry is required for the administration of tribunals in order to improve efficiency. C) Pendency and vacancy in Tribunals D The report notes that the high rate of pendency can be attributed to systemic issues. For example, the Debt Recovery Tribunal had 58% failed hearings (i.e. avoidable adjournments that were not penalised) and condonations were often granted due to delays in filing. Such delays accounted for more than half the time taken up by cases. Another E significant cause for delays is absenteeism of tribunal members. D) Jurisdiction of the High Courts Provisions allowing direct appeals to the Supreme Court which by-pass the jurisdiction of High Courts have been examined in multiple cases. Despite existing precedents and Law Commission of India F recommendations, parent statutes of many tribunals allow for a direct appeal to the Supreme Court. Two issues have been noted: Firstly, a direct appeal to the Supreme Court is inaccessible to litigants; and Secondly, such a provision leads to congestion of the docket of the Supreme Court. G B The Reference to the Constitution Bench

22. At its core, the present reference before the Constitution Bench raises the issue of whether a law which seeks to substitute existing statutory provisions governing the appointment, selection and H

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A conditions of service of diverse tribunals can validly be enacted as a Money Bill as a component of the Finance Act. The answer to this question must in turn depend upon two facets : (i) Whether judicial review can extend to determining the constitutional validity of a decision of the Speaker of the B Upper House to certify the passage of a Bill as a Money Bill under Article 110 of the Constitution; and (ii) Whether the statutory modification of the procedure for appointment and selection of members and their conditions of service is destructive of judicial C independence and hence ultra vires. Between the universe represented by these two issues, lie the shades of argument upon which the decision of this case will turn. C Money Bills

D Ordinary Bills, Money Bills and Financial Bills

23. Conceptually, the Constitution contains a classification of Bills as: (i) Ordinary Bills; (ii) Money Bills and (iii) Financial Bills. Bills other than Money Bills and Financial Bills can originate in either House of Parliament 14. An Ordinary Bill is passed by both the Houses of Parliament when it has been agreed upon by both the Houses, either E without amendment or with such amendments as agreed. The President is conferred with the constitutional authority to convene a joint sitting of both the Houses of Parliament in order to deliberate upon and vote on a Bill which is not a Money Bill15. Special provisions are engrafted

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into the Constitutin for the passage of Money Bills. Unlike an Ordinary A Bill which can originate in either House of Parliament, a Money Bill Special provisions are engrafted into the Constitution for the passage of Money Bills. Unlike an Ordinary Bill which can originate in either House of Parliament, a Money Bill cannot be introduced in the Council of States. Article 109 specifies the procedure for the passage of a B Money Bill. Article 109 reads thus: “109. (1) A Money Bill shall not be introduced in the Council of States. (2) After a Money Bill has been passed by the House of the People it shall be transmitted to the Council of States for its recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the House of the People with its recommendations

Provided that nothing in this clause shall apply to a Money Bill. (2) In reckoning any such period of six months as is referred to in clause (1), no account shall be taken of any period during which the House referred to in sub- clause (c) of that clause is prorogued or adjourned for more than four consecutive days. (3) Where the President has under clause (1) notified his intention of summoning the Houses to meet in a joint sitting, neither House shall proceed further with the Bill, but the President may at any time after the date of his notification summon the Houses to meet in a joint sitting for the purpose specified in the notification and, if he does so, the Houses shall meet accordingly. (4) If at the joint sitting of the two Houses the Bill, with such amendments, if any, as are agreed to in joint sitting, is passed by a majority of the total number of members of both Houses present and voting, it shall be deemed for the purposes of this Constitution to have been passed by both Houses: F Provided that at a joint sitting— (a) if the Bill, having been passed by one House, has not been passed by the other House with amendments and returned to the House in which it originated, no amendment shall be proposed to the Bill other than such amendments (if any) as are made necessary by the delay in the passage of the Bill; (b) if the Bill has been so passed and returned, only such amendments as aforesaid shall be proposed to the Bill and such other amendments as are relevant to the G matters with respect to which the Houses have not agreed; and the decision of the person presiding as to the amendments which are admissible under this clause shall be final. (5) A joint sitting may be held under this article and a Bill passed thereat, notwithstanding that a dissolution of the House of the People has intervened since the President notified his intention to summon the Houses to meet therein. H

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A and the House of the People may thereupon either accept or reject all or any of the recommendations of the Council of States. (3) If the House of the People accepts any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the Council of States and accepted by the House of the People. (4) If the House of the People does not accept any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the House of the People without any of the amendments recommended by the Council of States. (5) If a Money Bill passed by the House of the People and transmitted to the Council of States for its recommendations is not returned to the House of the People within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the House of the People.”

24. The role of the Rajya Sabha in the passage of Money Bill is restricted. A Money Bill can originate only in the Lok Sabha. After it is passed by the Lok Sabha, the Bill is transmitted to the Rajya Sabha for its recommendation. The Rajya Sabha has a stipulated period of fourteen days to submit the Bill back to the Lok Sabha with its recommendation. Recommendations of the Rajya Sabha are of a non- binding character. If the Lok Sabha rejects the recommendations, it is deemed to have been passed by both the Houses in the form in which it was passed by the Lok Sabha without the recommendations of the Rajya Sabha. If the Rajya Sabha were not to respond within the stipulated period of fourteen days, the same consequence would ensue. In distinction to the role which is entrusted to the Rajya Sabha in the passage of Ordinary Bills by Article 107, Article 109 confers virtually an overriding authority to the Lok Sabha in the passage of Money Bills. A Money Bill, unlike an Ordinary Bill, can only originate in the Lok Sabha. In the passage of a Money Bill, the Rajya Sabha has thus only a recommendatory role. Ordinary Bills, on the other hand, require the agreement of both the Houses of Parliament to ensure their passage. H

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25. The third category of Bills - Financial Bills, is specified in A Article 11716. The reference to Financial Bills is contained in the marginal note to Article 117. Article 117 (1) indicates that a Bill which makes provision for any of the matters specified in clauses (a) to (f) of Article 110 (1) can be introduced or moved only on the recommendation of the President and such a Bill shall not be introduced in the Rajya Sabha. The text of Article 117 (1) speaks of Money Bills and other Financial Bills as classes of Bills which can originate only in the Lok Sabha. Money Bills : Article 110 Article 110 contains a definition of Money Bills in the following terms : “110. (1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:— D (a) the imposition, abolition, remission, alteration or regulation of any tax; (b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;

16 Article 117 : (1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States: Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax. (2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes. (3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill. H

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A (c) the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund; (d) the appropriation of moneys out of the Consolidated Fund of India; B (e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure; (f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the C custody or issue of such money or the audit of the accounts of the Union or of a State; or (g) any matter incidental to any of the matters specified in sub-clauses (a) to (f).

D (2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes. E (3) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final. (4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when F it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.”

26. Tracing the origin and evolution of Money Bills, Thomas Erskine May in “The Treatise on The Law, Privileges, G Proceedings and Usage of Parliament”17 dwells on the relationship between the House of Commons and House of Lords in Britain in regard to their powers of taxation and on matters of national revenue and public expenditure. For nearly three hundred years, the House of

17 H C. Knight & Company, 1844

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Commons was possessed of the legal right to originate grants, but the A House of Lords was not precluded from amending a Bill. By two resolutions of the Commons in 1671 and 1678, the powers of the House of Lords were curtailed so as to enable only the Commons to have the sole right to direct or limit the scope of a Bill regarding taxation and government expenditure. The House of Lords came to be excluded B from altering any such Bill. Even after the enactment of the Standing Order of 1849 which accommodated space to the House of Lords to suggest amendments of legislative issues, the tussle between the House of Commons and the House of Lords continued, resulting in the passage of the Parliament Act of 1911. Section 1 defines the power of the House of Lords in Money Bills in the following terms : C “1. Powers of House of Lords as to Money Bills.—(1) If a Money Bill, having been passed by the House of Commons, and sent up to the House of Lords at least one month before the end of the session, is not passed by the House of Lords without amendment within one month after it is so sent up to that House, D the Bill shall, unless the House of Commons direct to the contrary, be presented to His Majesty and become an Act of Parliament on the Royal Assent being signified, notwithstanding that the House of Lords have not consented to the Bill.” Section 1(2) defines the expression Money Bill in the following manner : “1. (2) A Money Bill means a Public Bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with all or any of the following subjects, namely, the imposition, repeal, remission, alteration, or regulation of taxation; the imposition for the payment of debt or other financial purposes of charges on the Consolidated Fund, the National Loans Fund or on money provided by Parliament, or the variation or repeal of any such charges; supply; the appropriation, receipt, custody, issue or audit of accounts of public money; the raising or guarantee of any loan or the repayment thereof; or subordinate matters incidental to those subjects or any of them. In this sub- section the expressions “taxation”, “public money”, and “loan” respectively do not include any taxation, money, or loan raised by local authorities or bodies for local purposes.” H

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A 27. Two facets of the above definition merit emphasis: the first is the use of the expression ‘means’ which indicates that the definition is exhaustive; and second, that the content of a Money Bill can have “only provisions” dealing with the subjects enunciated in the provision. Under Section 1(3), a Money Bill sent to the House of Lords and to Her Majesty for assent should be endorsed with the certificate of the B Speaker of the House of Commons that it is a Money Bill. Section 3 attributes finality to the decision of the Speaker, rendering it immune from judicial review : “3. Certificate of Speaker.—Any certificate of the Speaker of the House of Commons given under this Act shall be conclusive for all purposes, and shall not be questioned in any court of law.” (Emphasis supplied) The Treatise by Erskine May contains the following elaboration of the procedure in passing a Money Bill: “A ‘Money Bill’ which has been passed by the House of Commons and sent up to the House of Lords at least one month before the end of the session, but is not passed by the House of Lords without amendment within one month after it is so sent up, is, unless the House of Commons direct to the contrary, to be presented for the Royal Assent and becomes an Act of Parliament on the Royal Assent being signified to it. A ‘Money Bill’, when it is sent up to the House of Lords and when it is presented to Her Majesty, must be endorsed with the Speakers’ certificate that it is such a bill. Before giving this certificate the F Speaker is directed to consult, if practicable, those two members of the Panel of Chairs who are appointed for the purpose at the beginning of each session by the Committee of Selection. When the Speaker has certified a bill to be a ‘Money Bill’ this is recorded in the journal; and Section 3 of the Parliament Act G 1911 stipulates such certificate is conclusive for all purposes and may not be questioned in a court of law. No serious practical difficulty normally arises in deciding whether a particular bill is or is not a ‘Money Bill’; and criticism has seldom been voiced of the Speaker’s action in giving or H withholding a certificate. A bill which contains any of the

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enumerated matters and nothing besides is indisputably a A ‘Money Bill’. If it contains any other matters, then, unless these are ‘subordinate matters incidental to’ and of the enumerated matters so contained in the bill, the bill is not a ‘Money Bill’. Furthermore, even if the main object of a bill is to create a new charge on the Consolidated Fund B or on money provided by Parliament, the bill will not be certified if it is apparent that the primary purpose of the new charge is not purely financial. The Speaker does not consider the question of certifying a bill until it has reached the form in which it will leave the House of Commons, and has declined to give an opinion on whether the C acceptance of a proposed amendment would prevent a bill for being certified as a Money bill. Similarly, in committee the chairman has declined to anticipate the Speaker’s decision in this matter or to allow the effect of an amendment in this regard to be raised as a point of order.” D (Emphasis supplied)

28. Section 37 of the Government of India Act 1935 contained a special provision for Financial Bills: “37. Special provisions as to financial Bills.—(1) A Bill or amendment making provision— (a) for imposing or increasing any tax; or (b) for regulating the borrowing of money or the giving of any guarantee by the Federal Government, or for amending the law with respect to any financial obligations undertaken or to be undertaken by the Federal Government; or (c) for declaring any expenditure to be expenditure charged on the revenues of the Federation, or for increasing the amount of any such expenditure, shall not be introduced or moved except on the recommendation of the Governor-General, and a Bill making such provision shall not be introduced in the Council of State.” As the Bill could not be introduced or moved “except on the recommendation of the Governor General”, Section 38 authorized each H

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A House namely the Council of States and the Federal Assembly to make rules for regulating their procedure and the conduct of business. During the course of the debates in the Constituent Assembly, one of the draft amendments moved to Article 90 was the deletion of the expression “only”. Explaining the rationale for moving the proposed amendment, Shri Ghanshyam Singh Gupta stated thus : “…This article is a prototype of Section 37 of the Government of India Act which says that a Bill or amendment providing for imposing or increasing a tax or borrowing money, etc. shall not be introduced or moved except on the recommendation of the governor-General. This means that the whole Bill need not be a money Bill: it may contain other provisions, but if there is any provision about taxation or borrowing, etc. It will come under this Section 37 and the recommendation of the Governor-General is necessary. Now article 90 says that a Bill shall be deemed to be a money Bill if it contains only provisions dealing with the imposition, regulation, etc., of any tax or the borrowing of money, etc. This can mean that if there is a Bill which has other provisions and also a provision about taxation or borrowing etc., it will not become a money Bill. If that is the intention I have nothing to say; but that if that is not the intention I must say the word “only” is dangerous, because if the Bill does all these things and at the same time does something else also it will not be a money Bill. I do not know what the intention of the Drafting Committee is but I think this aspect of the article should be borne in mind.”18

F The amendment was however negatived.

29. Article 110 of the Constitution defines a Money Bill for the purposes of the Chapter. A Bill is deemed to be a Money Bill “if it contains only provisions” dealing with any of the matters described in clauses (a) to (g). The word “only” is of crucial significance. The G consequence of the use of the expression “only” is to impart exclusivity. In other words, a Bill will be deemed to be a Money Bill only if it falls within the description of the matters enunciated in clauses (a) to (g). If the Bill contains matters which are unrelated to or do not fall within clauses (a) to (g), it is not a Money Bill. Article 110 (2) supports this 18 H Constituent Assembly Debates (20 May 1949)

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construction since it indicates that a Bill shall not be deemed to be a A Money Bill only for the reason that it provides for: (i) Imposition of fines or other pecuniary penalties; (ii) Demand or payment of fees for licences or fees for services rendered; or B (iii) The imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

30. This is a clear indicator of the constitutional position that what makes a Bill a Money Bill for the purposes of Chapter II of Part V of the Constitution is that it deals only with matters falling under the description provided in clauses (a) to (g) of Article 110 (1). Clause (g) of Article 110 (1) covers “any matter incidental to” what is specified in clauses (a) to (f). Clause (g) must not be understood as a residuary provision or a catch-all-phrase encompassing all other matters which are not specified in clauses (a) to (f). If this construction were to be placed on clause (g), the distinction between an Ordinary Bill and a Money Bill would vanish. Hence, to be incidental within the meaning of clause (g), the Bill must cover only those matters which fall within the ambit of clauses (a) to (f). It is only a matter which is incidental to any of the matters specified in clauses (a) to (f) which is contemplated in clause (g). Certification by the Speaker

31. The issue which needs analysis is whether a certification of a Bill as a Money Bill by the Speaker is immune from judicial review. F Article 110 (3) states that if any question arises as to whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final. In essence, the point for consideration is whether the finality as stipulated in clause (3) to Article 110 excludes judicial review. G

32. During the course of the framing of the Constitution, Sir B N Rau, acting as the Constitutional Advisor, prepared a memorandum of the draft Constitution for the Union Constitution Committee. B Shiva Rao makes a reference to Article 75 of the draft which provided that : H

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A “if any question arises whether a Bill is a “Money Bill” or not, the decision of the Speaker of the House of the People thereon shall be final.”19 The draft provision bore a resemblance to Article 22 of the Constitution of Ireland (1937) which provides thus: B “1. The Chairman of Dáil Éireann [Lower House in Ireland] shall certify any Bill which, in his opinion, is a Money Bill to be a Money Bill, and his certificate shall, subject to the subsequent provisions of this section, be final and conclusive.

C 2. Seanad Éireann [Upper House in Ireland], by a resolution, passed at a sitting at which not less than thirty members are present, may request the President to refer the question whether the Bill is or is not a Money Bill to a Committee of Privileges.

D 3. If the President after consultation with the Council of State decides to accede to the request he shall appoint a Committee of Privileges consisting of an equal number of members of Dáil Éireann and of Seanad Éireann and a Chairman who shall be a Judge of the Supreme Court: these appointments shall be made after consultation with the E Council of State. In the case of an equality of votes but not otherwise the Chairman shall be entitled to vote.

4. The President shall refer the question to the Committee of Privileges so appointed and the Committee shall report its decision thereon to the President within twenty-one days after the day on which the Bill was sent to Seanad Éireann.

5. The decision of the Committee shall be final and conclusive.

6. If the President after consultation with the Council of State decides not to accede to the request of Seanad Éireann, or if the Committee of Privileges fails to report within the time hereinbefore specified the certificate of the Chairman of Dáil Éireann shall stand confirmed.” (Emphasis supplied) 19 B. Shiva Rao, The Framing of India’s Constitution: Selected Documents, Indian H Institution of Public Administration (2012), at p. 32

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The Irish model contained a provision for resolving a dispute on the certification of a Bill as a Money Bill. This part of the dispute resolution procedure was not adopted when our Constitution was framed. Moreover, the clause on finality was adopted in a modified form. Whereas clause (1) of Article 22 of the Irish Constitution uses the expression “final and conclusive”, draft Article 75 provided for the decision of the Speaker of the House of People being final. On 5 December 1947, the Expert Committee on Financial Provisions suggested an amendment to the draft provision, the gist of which is indicated by B Shiva Rao : “When a Money Bill is sent from the Lower House to the Upper, a certificate of the Speaker of the Lower House saying that it is C a Money Bill should be attached to, or endorsed on, the Bill and a provision to that effect should be made in the Constitution on the lines of the corresponding provision in the Parliament Act,

1911. This will prevent controversies about the matter outside the Lower House.”20 D (Emphasis supplied) The extract quoted above is a clear indicator that the purpose of the certification by the Speaker was to prevent controversies in the Upper House of Parliament by incorporating an element of procedural simplicity. E

Final but not conclusive 33 When the draft Article as proposed was accepted and eventually incorporated as Article 110, clause (3) incorporated the principle of finality without a specific exclusion of judicial review. Section F 3 of the Parliament Act 1911 in Britain specifically excluded judicial review by providing that a certificate of the Speaker of the House of Commons “shall be conclusive for all purposes and shall not be questioned in any court of law”. These words imparted both conclusiveness and immunity from judicial review to the certificate from the Speaker. This language was not adopted in the Indian Constitution. G The draftspersons of the Constitution carefully did not incorporate an exclusion from judicial review, in respect of a certificate issued by the Speaker under clause (3) of Article 110. Finality, in other words, operates 20 B. Shiva Rao, The Framing of India’s Constitution: Selected Documents, Indian Institution of Public Administration, at p. 281. H

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A as between the Upper and the Lower Houses and does not exclude judicial review by a constitutional court.

34. The interpretation that we have adopted is supported for yet another reason. In contexts where the Constitution intends to confer immunity from judicial review, specific words to that effect are used. B The expression “shall not be called in question in any court” is, for instance, utilized in Article 329 (a), Article 243-O and Article 243ZG. These Articles read thus: “329. Bar to interference by courts in electoral matters.— Notwithstanding anything in this Constitution— C (a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under Article 327 or Article 328, shall not be called in question in any court.”

D “243-O. Bar to interference by courts in electoral matters.—Notwithstanding anything in this Constitution—(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under Article 243-K, shall not be called in question in any court.” E “243ZG. Bar to interference by courts in electoral matters.—Notwithstanding anything in this Constitution—(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under Article 243-ZA shall not be called F in question in any court.” (Emphasis supplied) In N P Ponnuswami v Returning Office, Namakkal Constituency, Namakkal, Salem, Dist.21, a six judge Bench G of this Court construed Article 329 of the Constitution in the following terms : “5. … A notable difference in the language used in Articles 327 and 328 on the one hand, and Article 329 on the other, is that 21 H 1952 SCR 218

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while the first two articles begin with the words “subject to the provisions of this Constitution”, the last article begins with the words “notwithstanding anything in this Constitution”. It was conceded at the Bar that the effect of this difference in language is that whereas any law made by Parliament under Article 327, or by the State Legislature under Article 328, cannot exclude the jurisdiction of the High Court under Article 226 of the Constitution, that jurisdiction is excluded in regard to matters provided for in Article 329.”

35. Distinct from the exclusion of judicial review by the above provisions, there are other provisions of the Constitution where a C decision is made “final”. Finality in such contexts has been held not to exclude judicial review. Articles 217 (3), 311 (3) and paragraph 6 (1) of the Tenth Schedule use the expression “final” : “217. (3) If any question arises as to the age of a Judge of a High Court, the question shall be decided by the President after consultation with the Chief Justice of India and the decision of the President shall be final. “311. (3) If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final. “6. Decision on questions as to disqualification on ground of defection.—(1) If any question arises as to whether a member of a House has become subject to disqualification under this Schedule, the question shall be referred for the decision of the Chairman, or, as the case may be, the Speaker of such House and his decision shall be final: Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final.” (Emphasis supplied) H

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A In Union of India v Jyoti Prakash Mitter22, a six judge Bench of this Court held that under Article 217 (3), the President performs a judicial function and a decision rendered is subject to judicial review on stipulated grounds : “32. … The President acting under Article 217(3) performs a B judicial function of grave importance under the scheme of our Constitution. He cannot act on the advice of his Ministers. Notwithstanding the declared finality of the order of the President the Court has jurisdiction in appropriate cases to set aside the order, if it appears that it was passed on collateral considerations or the rules of natural justice were not observed, or that the C President’s judgment was coloured by the advice or representation made by the executive or it was founded on no evidence. … appreciation of evidence is entirely left to the President and it is not for the Courts to hold that on the evidence placed before the President on which the conclusion is founded, if they were called upon to decide the case they would have reached some other conclusion.”

36. In the context of Article 311 (3), a Constitution Bench of this Court in Union of India v Tulsiram Patel23 held that the finality attributed to the decision of a disciplinary authority that it is not reasonably practical to hold an inquiry, does not render it immune from judicial review. In Kihoto Hollohan v Zachillhu 24, a Constitution Bench of this Court held that the finality attributed to the decision of the Speaker of the Lok Sabha or the Chairman of the Rajya Sabha in paragraph 6 (1) of the Tenth Schedule of the Constitution does not abrogate judicial review : F “111. … That Paragraph 6(1) of the Tenth Schedule, to the extent it seeks to impart finality to the decision of the Speakers/ Chairmen is valid. But the concept of statutory finality embodied in Para 6(1) does not detract from or abrogate judicial review under Articles 136, 226 and 227 of the Constitution insofar as G infirmities based on violations of constitutional mandates, mala fides, non-compliance with rules of natural justice and perversity, are concerned.” 22 (1971) 1 SCC 396 23 (1985) 3 SCC 398 24 H 1992 Supp. (2) SCC 651

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The Constitution Bench held: A “101. … The principle that is applied by the courts is that in spite of a finality clause it is open to the court to examine whether the action of the authority under challenge is ultra vires the powers conferred on the said authority. Such an action can be ultra vires for the reason that it is in contravention of a mandatory B provision of the law conferring on the authority the power to take such an action. It will also be ultra vires the powers conferred on the authority if it is vitiated by mala fides or is colourable exercise of power based on extraneous and irrelevant considerations….” C Consequently, purely as a matter of textual analysis, the finality attributed to a certificate issued by the Speaker under Article 110 (3) does not grant immunity from judicial review. Matters of procedure and substantive illegalities

37. Article 118 of the Constitution allows each of the Houses of D Parliament to make rules for regulating their procedure and the conduct of business, subject to the provisions of the Constitution. Article 118 provides thus : “118. Rules of procedure.— E (1) Each House of Parliament may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business. (2) Until rules are made under clause (1), the rules of procedure and standing orders in force immediately F before the commencement of this Constitution with respect to the legislature of the Dominion of India shall have effect in relation to Parliament subject to such modifications and adaptations as may be made therein by the Chairman of the Council of States or the Speaker of the House of the People, as the case may be. G (3) The President, after consultation with the Chairman of the Council of States and the Speaker of the House of the People, may make rules as to the procedure with respect to joint sittings of, and communications between, the two Houses. H

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A (4) At a joint sitting of the two Houses the Speaker of the House of the People, or in his absence such person as may be determined by rules of procedure made under clause (3), shall preside.” Article 122 of the Constitution provides thus: B “122. Courts not to inquire into proceedings of Parliament.—(1) The validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure. (2) No officer or member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or C the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.” Article 122 of the Constitution is similar to Section 41 of the Government of India Act 193525. In the Commentary on the Government D of India Act 1935 by N Rajagopala Aiyangar26, there is an eloquent distinction made between matters of procedure and those of substance in the context of Section 41 (1): “This sub-section seeks to cure defects arising from irregularity of procedure in the Legislature. The activities of a chamber may be divided into internal and external, the internal activities being the sphere of procedure, while the external are subject to the law of the constitution. It is to irregularities in the domain of the former class that this sub-section addresses itself. Under the latter head would fall defects arising from want of legislative competence, which is a matter external to the assembly and not a matter of procedure.” (Emphasis supplied)

41. – (1) The validity of any proceedings in the Federal Legislature shall not be called in question on the ground of any alleged irregularity of procedure. (2) No officer or other member of the Legislature in whom powers are vested by or under this Act for regulating procedure or the conduct of business, or for maintaining order, in the Legislature shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers. 26 N Rajagopala Aiyangar, Government of India Act 1935, Madras Law Journal Office H (1937) at page 63.

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38. In the decision of a Constitution Bench in Babulal Parate v A State of Bombay27, this Court noted the distinction between an issue which pertains to the validity of proceedings in Parliament and a violation of a constitutional provision. This was in the context of the provisions contained in clauses (a) to (e) of Article 3. The Constitution Bench held: “11. It is advisable, perhaps, to add a few more words about B Article 122(1) of the Constitution. Learned counsel for the appellant has posed before us the question as to what would be the effect of that Article if in any Bill completely unrelated to any of the matters referred to in clauses (a) to (e) of Article 3 an amendment was to be proposed and accepted changing (for example) the name of a State. We do not think that we need answer such a hypothetical question except merely to say that if an amendment is of such a character that it is not really an amendment and is clearly violative of Article 3, the question then will be not the validity of proceedings in Parliament but the violation of a constitutional provision. That, however, is not the position in the present case.”

39. Article 122 (1) provides immunity to proceedings before Parliament being called into question on the ground of “any alleged irregularities of procedure”. In several decisions of this Court which construed the provisions of Article 122 and the corresponding provisions contained in Article 212 for the state legislatures, a distinction has been drawn between an irregularity of procedure and an illegality. Immunity from judicial review attaches to the former but not to the latter. This distinction found expression in a seven judge Bench decision of this Court in Special Reference No. 1 of 196428 (“Special Reference”). This Court held : F “61. … Article 212(2) confers immunity on the officers and members of the legislature in whom powers are vested by or under the Constitution for regulating procedure or the conduct of business, or for maintaining order, in the legislature from being subject to the jurisdiction of any court in respect of the exercise G by him of those powers. Article 212(1) seems to make it possible for a citizen to call in question in the appropriate Court of law 27

(1960) 1 SCR 605

28 Powers, Privileges and Immunities of State Legislatures, In re (Special Reference No. 1 of 1964), AIR 1965 SC 745 H

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A the validity of any proceedings inside the Legislative Chamber if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinised in a Court of law, though such scrutiny is prohibited if the complaint against the procedure is no B more than this that the procedure was irregular...” (Emphasis supplied) This formulation was applied in the context of Article 122 by the

Constitution Bench in Ramdas Athawale v Union of India 29

C (“Ramdas Athawale”): “36. This Court under Article 143, Constitution of India In re (Special Reference No. 1 of 1964) [Powers, Privileges and Immunities of State Legislatures, In re (Special Reference No. 1 of 1964), AIR 1965 SC 745] (also known as Keshav Singh case) D while construing Article 212(1) observed that it may be possible for a citizen to call in question in the appropriate court of law, the validity of any proceedings inside the legislature if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinised in E a court of law, though such scrutiny is prohibited if the complaint against the procedure is no more than this that the procedure was irregular. The same principle would equally be applicable in the matter of interpretation of Article 122 of the Constitution.” A subsequent Constitution Bench decision in Raja Ram Pal v F Hon’ble Speaker, Lok Sabha30 emphasized the distinction between a procedural irregularity and an illegality: “386. … Any attempt to read a limitation into Article 122 so as to restrict the court’s jurisdiction to examination of the Parliament’s procedure in case of unconstitutionality, as opposed G to illegality would amount to doing violence to the constitutional text. Applying the principle of “expressio unius est exclusio alterius” (whatever has not been included has by implication been

29 (2010) 4 SCC 1 30 H (2007) 3 SCC 184

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excluded), it is plain and clear that prohibition against examination on the touchstone of “irregularity of procedure” does not make taboo judicial review on findings of illegality or unconstitutionality. ***

398. … the court will decline to interfere if the grievance brought before it is restricted to allegations of “irregularity of procedure”. But in case gross illegality or violation of constitutional provisions is shown, the judicial review will not be inhibited in any manner by Article 122, or for that matter by Article 105…” C (Emphasis supplied)

40. The fundamental constitutional basis for the distinction between an irregularity of procedure and an illegality is that unlike in the United Kingdom where Parliamentary sovereignty governs, India is governed by constitutional supremacy. The legislative, executive and judicial wings function under the mandate of a written Constitution. The ambit of their powers is defined by the Constitution. The Constitution structures the powers of Parliament and the state legislatures. Their authority is plenary within the field reserved to them. Judicial review is part of the basic structure of the Constitution. Any exclusion of judicial review has to be understood in the context in which it has been mandated under a specific provision of the Constitution. Hence the provisions contained in Article 122 which protect an alleged irregularity of procedure in the proceedings in Parliament being questioned cannot extend to a substantive illegality or a violation of a constitutional mandate. F

41. Mr K K Venugopal, learned Attorney General for India relied on three decisions in support of his submission that the certificate issued by the Speaker of the Lok Sabha that a Bill is a Money Bill is immune from judicial review : (I) Mangalore Ganesh Beedi Works v State of Mysore 31 G (“Mangalore Beedi”); (II) Mohd. Saeed Siddiqui v State of Uttar Pradesh 32 (“Mohd. Saeed Siddiqui”); and 31 AIR 1963 SC 589 32 (2014) 11 SCC 415 H

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A (III) Yogendra Kumar Jaiswal v State of Bihar 33 (“Yogendra Kumar”). Mangalore Beedi was a case where a new system of coinage had introduced a naya paisa (one hundred naya paisas being equivalent to a rupee) instead of the erstwhile legal tender of sixteen annas or B sixty-four pice, which continued to remain legal tender. The appellant which was subjected to an additional amount as sales tax due to the change in currency urged that as a result of the substitution of the coinage, there was a change in tax imposed under the Mysore Sales Tax Act 1948 which could have been effectuated only by passing a Money Bill under Articles 198, 199 and 207 of the Constitution. Rejecting C this submission, the Constitution Bench held that the substitution of a new coinage did not amount to an enhancement of tax. Consequently, there was no requirement of taking recourse to the provisions for enacting a Money Bill. However, Justice J L Kapur, speaking for the Court held: D “5. … Even assuming that it is a taxing measure its validity cannot be challenged on the ground that it offends Articles 197 to 199 and the procedure laid down in Article 202 of the Constitution. Article 212 prohibits the validity of any proceedings in a legislature of a State from being called in question on the ground of any alleged irregularity of procedure and Article 255 E lays down that requirements as to recommendation and previous sanction are to be regarded as matters of procedure only.”

42. The ratio of the decision in Mangalore Beedi is that the substitution of coinage did not amount to an enhancement of tax. Hence, the provisions of Article 199 pertaining to a Money Bill were not attracted. Once that was the finding, it was not necessary for the decision to rule on whether the certificate of a Speaker under Article 199 (3) (corresponding to Article 110 (3)) is immune from judicial review. The ratio of the decision is that a new coinage does not amount to an enhancement of tax and hence a Bill providing for the substitution of coinage is not a Money Bill. The observations which are extracted above proceed on an assumption, namely that even assuming that it was a taxing measure, its validity could not be challenged on the ground of an alleged irregularity of procedure. This part of the observations is evidently not the ratio of Mangalore Beedi.

33 H (2016) 3 SCC 183

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43. Subsequently in Mohd. Saeed Siddiqui, a three judge Bench A of this Court dealt with an amendment brought about by the state legislature to a statute governing the Lokayukta and Up-Lokayukta so as to provide for an extension of the term from six years to eight years or until the successor enters office. The amendment was challenged on the ground that the Bill could not have been introduced as a Money B Bill. Relying on the decision in Mangalore Beedi, a three judge Bench held that the issue as to whether a Bill was a Money Bill could only be raised by a Member before the legislative assembly before it was passed. Chief Justice P Sathasivam, speaking for the Bench formulated the following principles: C “ (i) the validity of an Act cannot be challenged on the ground that it offends Articles 197 to 199 and the procedure laid down in Article 202; (ii) Article 212 prohibits the validity of any proceedings in a legislature of a State from being called in question on the ground of any alleged irregularity of procedure; and D

(iii) Article 255 lays down that the requirements as to recommendation and previous sanction are to be regarded as a matter of procedure only. It is further held that the validity of the proceedings inside the E legislature of a State cannot be called in question on the allegation that the procedure laid down by the law has not been strictly followed and that no court can go into those questions which are within the special jurisdiction of the legislature itself, which has the power to conduct its own business.” F The decision adverted to Article 212 (1) (which corresponds to Article 122(1)) and to Article 25534 of the Constitution. While the 34 Article 255 : No Act of Parliament or of the Legislature of a State and no provision in any such Act, shall be invalid by reason only that some recommendation or previous sanction required by this Constitution was not given, G if assent to that Act was given— (a) where the recommendation required was that of the Governor, either by the Governor or by the President; (b) where the recommendation required was that of the Rajpramukh, either by the Rajpramukh or by the President; (c) where the recommendation or previous sanction required was that of the President, by the President. H

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