MADRAS BAR ASSOCIATION v. UNION OF INDIA AND ANR.

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37Copy pinpoint37. In his article, “The Case for the Legislative Override”36, Nicholas Stephanopoulos has explored the response of courts to legislative overruling in various jurisdictions. Judicial review of legislative action is limited in United Kingdom and New Zealand as the interpretation of statutes would be in accordance with the European Convention of Human Rights and the New Zealand Bill of Rights, respectively. The Courts in B United Kingdom and New Zealand follow hortatory judicial review by which the Court cannot strike down a legislation but can declare it to be incompatible with the European Convention or the Bill of Rights. As far as Germany is concerned, statutes would be stricken if they are declared unconstitutional by the courts, and would be unrescuable by constitutional C amendment if they are found to violate certain unamendable constitutional provisions. If the statutes are invalidated on being found unconstitutional by the courts in Canada and Israel, the legislature could override the judgments of the courts leveraging what is termed as the ‘notwithstanding’ clause in the Canadian context, i.e., notwithstanding their conflict with the Charter or Basic Law. D II. India (A) Scope of judicial review

38Copy pinpoint38. Shifting focus to legislative override in our country, it is necessary to first appreciate the scope of judicial review of ordinances which is the same as that of a legislative act. Article 123 of the Constitution empowers the President to promulgate an ordinance during recess of the Parliament, which shall have the same force and effect as an act of the Parliament. The validity of an ordinance can be challenged on grounds available for judicial review of a legislative act. An ordinance passed either under Article 123 or under Article 213 of the Constitution stands on the same footing. When the Constitution says that the ordinance- making power is legislative power and an ordinance shall have the same force as an act, an ordinance should be clothed with all the attributes of an act of legislature carrying with it all its incidents, immunities and limitations under the Constitution. It is settled law that judicial review of an ordinance should be akin to that of legislative action.37

36 Nicholas Stephanopoulos, The Case for the Legislative Override, 10 UCLA Journal of International Law and Foreign Affairs 250 (2005) 37 R.K. Garg v. Union of India & Ors. (1981) 4 SCC 675; T. Venkata Reddy & Ors. v. State of Andhra Pradesh (1985) 3 SCC 198; Krishna Kumar Singh & Anr. v. State of H Bihar & Ors. (2017) 3 SCC 1.

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39Copy pinpoint39. The controversy that arises for the consideration of this Court A relates to the legislative response to the judgment of this Court in MBA-III. The power to strike down primary legislation enacted by the Union of India or the State legislatures is on limited grounds. The Courts can strike down legislation either on the basis that it falls foul of federal distribution of powers or that it contravenes fundamental rights or other constitutional rights/provisions of the Constitution of India.38 Where there is challenge to the constitutional validity of a law enacted by the legislature, the Court must keep in view that there is always a presumption of constitutionality of an enactment and a clear transgression of constitutional principles must be shown. In State of Madhya Pradesh v. Rakesh Kohli & Anr.39, this Court held that sans flagrant violation of the constitutional provisions, the law made by Parliament or a State legislature is not declared bad and legislative enactment can be struck down only on two grounds: (i) that the appropriate legislature does not have the competence to make the law, and (ii) that it takes away or abridges any of the fundamental rights enumerated in Part III of the Constitution or any other constitutional provisions. Subsequently, the Court has also recognised “manifest arbitrariness” as a ground under Article 14 on the basis of which a legislative enactment can be judicially reviewed.40 (B) Permissible legislative overruling

40Copy pinpoint40. The judgment in Shri Prithvi Cotton Mills Ltd. & E Anr. v. Broach Borough Municipality & Ors.41 was relied upon by both sides. The validity of the rules framed by Municipal Corporation under Section 73 of the Bombay Municipal Boroughs Act, 1925 for levying a rate on open lands was the subject matter of challenge in Patel Gordhandas Hargovindas & Ors. v. Municipal Commissioner, Ahmedabad & Anr42. The relevant rule was declared ultra vires of the F Act itself. Later, the State legislature passed a validation act seeking to validate the imposition of tax, the validity of which was considered in Shri Prithvi Cotton Mills Ltd. (supra). This Court held that it is not sufficient to merely declare that the decision of the Court shall not bind as such declaration would amount to the reversal of a decision of the G Court which the legislature cannot do. It was further observed that a 38 Binoy Vishwam v. Union of India & Ors. (2017) 7 SCC 59 39 (2012) 6 SCC 312 40 K.S. Puttaswamy & Anr. v. Union of India & Anr. (2019) 1 SCC 1 41 (1969) 2 SCC 283 42 (1964) 2 SCR 608 H

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A Court’s decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.

41Copy pinpoint41. It is open to the legislature within certain limits to amend the provisions of an Act retrospectively and to declare what the law shall be deemed to have been, but it is not open to the legislature to say that a judgment of a Court properly constituted and rendered in exercise of its powers in a matter brought before it shall be deemed to be ineffective and the interpretation of the law shall be otherwise than as declared by the Court.43 The test of judging the validity of the amending and validating enactment is, whether the legislature enacting the validating statute has competence over the subject-matter; whether by validation, the said legislature has removed the defect which the Court had found in the previous laws; and whether the validating law is consistent with the provisions of Part III of the Constitution.44 In State of Tamil Nadu v. State of Kerala & Anr. (supra), this Court held that any law enacted by the legislature may be invalidated if it is an attempt to interfere with judicial process by being in breach of the doctrine of separation of powers.

42Copy pinpoint42. The judgment of this Court in Madan Mohan Pathak & Anr. v. Union of India & Ors.45 requires a close scrutiny as it was adverted to and relied upon by both sides. A writ petition was filed in the High E Court of Calcutta for a mandamus directing the Life Insurance Corporation (LIC) to act in accordance with the terms of settlement dated 24.¹.1974 read with administrative instructions dated 29.³.1974. The writ petition was allowed by the learned single Judge against which a Letters Patent Appeal (LPA) was preferred by the LIC. During the pendency of the LPA, the LIC (Modification of Settlement) Act, 1976 F came into force. The LPA was withdrawn in view of the subsequent legislation and the decision of the learned single Judge became final. Validity of the said statute was assailed in a writ petition filed under Article 32 by the employees of the LIC. Justice Bhagwati, speaking for the majority, was of the opinion that the judgment of the Calcutta High G Court was not a mere declaratory judgment holding an impost or tax as 43 Janapada Sabha Chhindwara v. Central Provinces Syndicate Ltd. & Anr. (1970) 1 SCC 509 44 I.N. Saksena v. State of Madhya Pradesh (1976) 4 SCC 750; Indian Aluminium Co. & Ors. v. State of Kerala & Ors. (1996) 7 SCC 637; Bakhtawar Trust & Ors. v. M. D. Narayan & Ors. (2003) 5 SCC 298 45 H (1978) 2 SCC 50

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invalid so that a validating statute can remove the defect pointed out in A the judgment. He observed that the judgment of the Calcutta High Court gave effect to the rights of the petitioners by mandamus, directing the LIC to pay annual cash bonus. As long as the judgment of the learned single Judge is not reversed in appeal, it cannot be disregarded or ignored. The LIC was held to be bound by the writ of mandamus issued by the B Calcutta High Court. Justice Beg, in his concurrent opinion, held that the rights which accrued to the employees on the basis of the mandamus issued by the High Court cannot be taken away either directly or indirectly by subsequent legislation. Thereafter, Madan Mohan Pathak (supra) came up for discussion in Sri Ranga Match Industries & Ors. v. Union of India & Ors.46. Justice Jeevan Reddy was of the opinion that the C Madan Mohan Pathak case cannot be treated as an authority for the proposition that mandamus cannot be set aside by a legislative act. Justice Hansaria was not in agreement with such view. Relying upon the judgment of this Court in A.V. Nachane & Anr. v. Union of India & Anr.47, Justice Hansaria held that the legal stand taken by Justice Beg in the D Madan Mohan Pathak case had received majority’s endorsement and it was because of this that retrospectivity given to the relevant rule assailed in A.V. Nachane was held to have nullified the effect of the writ and was accordingly invalid. In view of the difference of opinion, the matter was referred to a larger bench. We are informed by the leaned Amicus Curiae that the difference of opinion could not be resolved E as the case was settled out of court.

43Copy pinpoint43. In Virender Singh Hooda (supra), this Court did not accept the contention of the petitioners therein that vested rights cannot be taken away by retrospective legislation. However, it was observed that taking away of such rights would be impermissible if there is violation of F Articles 14, 16 or any other constitutional provision. The appointments already made in implementation of a decision of this Court were protected with the reason that “the law does not permit the legislature to take away what has been granted in implementation of the Court’s decision. Such a course is impermissible.” This Court in Cauvery Water Disputes Tribunal48 declared the ordinance which sought to G displace an interim order passed by the statutory tribunal as unconstitutional as it set side an individual decision inter partes and 46 1994 Supp (2) SCC 726 47 (1982) 1 SCC 205 48 1993 Supp (1) SCC 96 (2) H

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A therefore, amounted to a legislative exercise of judicial power. When a mandamus issued by the Mysore High Court was sought to be annulled by a legislation, this Court quashed the same in S.R. Bhagwat & Ors. v. State of Mysore49 on the ground that it was impermissible legislative exercise. Setting at naught a decision of the Court without removing the defect pointed out in the judgment would sound the death knell of the rule of law. The rule of law would cease to have any meaning, because then it would be open to the Government to defy a law and yet to get away with it.50

44Copy pinpoint44. The permissibility of legislative override in this country should be in accordance with the principles laid down by this Court in the aforementioned as well as other judgments, which have been culled out as under: a) The effect of the judgments of the Court can be nullified by a legislative act removing the basis of the judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution.51 b) The test for determining the validity of a validating legislation is that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment. In other words, the defect pointed out should have been cured such that the basis of the judgement pointing out the defect is removed. c) Nullification of mandamus by an enactment would be impermissible legislative exercise [See: S.R. Bhagwat (supra)]. Even F interim directions cannot be reversed by a legislative veto [See: Cauvery Water Disputes Tribunal (supra) and Medical Council of India v. State of Kerala & Ors.52]. d) Transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation G of powers, the rule of law and of Article 14 of the Constitution of India.

49 (1995) 6 SCC 16 50 P. Sambamurthy & Ors. v. State of Andhra Pradesh & Anr. (1987) 1 SCC 362 51 Lohia Machines Ltd. & Anr. v. Union of India & Ors. (1985) 2 SCC 197 H 52 (2019) 13 SCC 185

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Validity of the Impugned Ordinance A

45Copy pinpoint45. The learned Amicus Curiae submitted that the Ordinance impugned in the Writ Petition is unconstitutional as it is violative of the separation of powers, the rule of law and independence of the judiciary. He argued that the principle of independence of the judiciary can be traced to Article 14 of the Constitution and the Ordinance is liable to be struck down as being violative of the equality clause. The learned Amicus Curiae relied upon the judgments of this Court to submit that the impugned Ordinance is a classic case of law laid down by this Court being overturned by the legislature unreasonably. Responding to the submissions of the learned Attorney General that deference has to be shown by courts to the policy decisions of the executive and the legislature, the learned Amicus Curiae argued that deference has to be shown to the reasons of the policy and not the policy itself. The learned Attorney General asserted that the law laid down by this Court is not the final word as it is settled that the Parliament can legislate by curing the defects pointed out by the Court. The learned Attorney General stated that legislation is made after the decision undergoes detailed deliberations at various levels in the Government and the legislature. The collective wisdom of the Parliament cannot be interfered with by the Court. He emphasized that service conditions of Chairperson and Members of tribunals is a matter of policy over which the Parliament should have the final word. He stressed the need for judicial restraint to be shown by courts in giving directions to legislate. He stated that any interstitial directions given by this Court in the absence of any existing legislation shall be treated as suggestions to the Parliament for consideration at the time of making legislation. He insisted that a later legislation cannot be struck down on the ground that the directions issued by the Court earlier are violated. Judicial review of the Ordinance can be only on those grounds that are available for review of a legislative act. The Ordinance cannot be declared as unconstitutional as being violative of Article 14, as no facet of the said Article comes into play in the instant case.

46Copy pinpoint46. The grievance of the Petitioners in this Writ Petition mainly relates to the violation of the first proviso and the second proviso, read with the third proviso, to Section 184 (1), Sections 184(7) and 184(11) of the Finance Act, 2017. Section 184(1) of the Finance Act, 2017, prior to amendment, is as follows:

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A (1) The Central Government may, by notification, make rules to provide for qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairperson, Vice- Chairperson, Chairman, Vice-Chairman, President, Vice- President, Presiding Officer or Member of the Tribunal, B Appellate Tribunal or, as the case may be, other Authorities as specified in column (2) of the Eighth Schedule: Provided that the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate C Tribunal or other Authority shall hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and shall be eligible for reappointment: Provided further that no Chairperson, Vice- D Chairperson, Chairman, Vice-Chairman, President, Vice- President, Presiding Officer or Member shall hold office as such after he has attained such age as specified in the rules made by the Central Government which shall not exceed, — (a) in the case of Chairperson, Chairman [President or the E Presiding Officer of the Securities Appellate Tribunal], the age of seventy years; (b) in the case of Vice-Chairperson, Vice-Chairman, Vice- President, Presiding Officer [of the Industrial Tribunal constituted by the Central Government and the Debts F Recovery Tribunal] or any other Member, the age of sixty- seven years:

47Copy pinpoint47. The amendment to Section 184 by the Ordinance is as follows:

184. (1) The Central Government may, by notification, make rules to provide for the qualifications, appointment, salaries G and allowances, resignation, removal and the other conditions of service of the Chairperson and Members of the Tribunal as specified in the Eighth Schedule: Provided that a person who has not completed the age of fifty years shall not be eligible for appointment as a H Chairperson or Member:

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Provided further that the allowances and benefits so payable shall be to the extent as are admissible to a Central Government officer holding the post carrying the same pay: Provided also that where the Chairperson or Member takes a house on rent, he may be reimbursed a house rent subject to such limits and conditions as may be provided by rules. (2) The Chairperson and Members of a Tribunal shall be appointed by the Central Government on the recommendation of a Search-cum-Selection Committee (hereinafter referred to as the Committee) constituted under sub-section (3), in such manner as the Central Government may, by rules, provide. (3)The Search-cum-Selection Committee shall consist of— (a) the Chief Justice of India or a Judge of Supreme Court nominated by him–– Chairperson of the Committee; D (b) two Secretaries nominated by the Government of India –– Members; (c) one Member, who–– (i) in case of appointment of a Chairperson of a Tribunal, shall be the outgoing Chairperson of the Tribunal; or E (ii) in case of appointment of a Member of a Tribunal, shall be the sitting Chairperson of the Tribunal; or (iii) in case of the Chairperson of the Tribunal seeking re- appointment, shall be a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the F Chief Justice of India: Provided that, in the following cases, such Member shall always be a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the Chief Justice of India, namely: –– G

(i) Industrial Tribunal constituted by the Central Government under the Industrial Disputes Act, 1947; (ii) Tribunals and Appellate Tribunals constituted under the Recovery of Debts Due to Banks and Financial Institutions H Act, 1993;

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A (iii) Tribunals where the Chairperson or the outgoing Chairperson, as the case may be, of the Tribunal is not a retired Judge of the Supreme Court or a retired Chief Justice or Judge of a High Court; and (iv) such other Tribunals as may be notified by the Central B Government in consultation with the Chairperson of the Search-cum-Selection Committee of that Tribunal; and (d) the Secretary to the Government of India in the Ministry or Department under which the Tribunal is constituted or established –– Member- Secretary. C (4) The Chairperson of the Committee shall have the casting vote. (5) The Member-Secretary of the Committee shall not have any vote.

D (6) The Committee shall determine its procedure for making its recommendations. (7) Notwithstanding anything contained in any judgment, order or decree of any Court or in any law for the time being in force, the Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member, as the case may be, and the Central Government shall take a decision on the recommendations of the Committee preferably within three months from the date on which the Committee makes its recommendations to the Government. (8) No appointment shall be invalid merely by reason of any vacancy or absence in the Committee. (9) The Chairperson and Member of a Tribunal shall be eligible for re-appointment in accordance with the provisions of this section: G Provided that in making such re-appointment, preference shall be given to the service rendered by such person. (10) The Central Government shall, on the recommendation of the Committee, remove from office, in such manner as may be provided by rules, any Member, who— H

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(a) has been adjudged as an insolvent; or A (b) has been convicted of an offence which involves moral turpitude; or (c) has become physically or mentally incapable of acting as such a Member; or B (d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Member; or (e) has so abused his position as to render his continuance in office prejudicial to the public interest: Provided that where a Member is proposed to be removed C on any ground specified in clauses (b) to (e), he shall be informed of the charges against him and given an opportunity of being heard in respect of those charges. Explanation. –– For the purposes of this section, the expressions –– D (i) “Tribunal” means a Tribunal, Appellate Tribunal or Authority as specified in column (2) of the Eighth Schedule; (ii) “Chairperson” includes Chairperson, Chairman, President and Presiding Officer of a Tribunal; E (iii) “Member” includes Vice-Chairman, Vice-Chairperson, Vice-President, Account Member, Administrative Member, Judicial Member, Expert Member, Law Member, Revenue Member and Technical Member, as the case may be, of a Tribunal; F 53 (11) Notwithstanding anything contained in any judgment, order, or decree of any Court or any law for the time being in force, –– (i) the Chairperson of a Tribunal shall hold office for a term of four years or till he attains the age of seventy years, G whichever is earlier; (ii) the Member of a Tribunal shall hold office for a term of four years or till he attains the age of sixty-seven years, whichever is earlier: 53 With effect from 26.⁵.2017. H

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A Provided that where a Chairperson or Member is appointed between the 26th day of May, 2017 and the notified date and the term of his office or the age of retirement specified in the order of appointment issued by the Central Government is greater than that which is specified in this section, then, notwithstanding anything contained in this section, the term of office or age of retirement or both, as the case may be, of the Chairperson or Member shall be as specified in his order of appointment subject to a maximum term of office of five years.

48Copy pinpoint48. The first proviso of Section 184(1) provides minimum age for appointment as Chairperson or Member as 50 years. One of the issues considered in MBA-III was the correctness of the condition imposed in the 2020 Rules that an advocate is eligible for appointment as a Member only if he has 25 years of experience. It is relevant to state that advocates were ineligible for most of the tribunals. The learned Attorney General D fairly submitted in his arguments that suitable amendment will be made to make advocates eligible, subject to their having 25 years’ experience. The learned Amicus Curiae contended in MBA-III that in order to attract competent advocates to apply for appointment as Members in tribunals, it is necessary that they should be made eligible for appointment on the same criteria as applicable for appointment of a High Court Judge. The E learned Amicus Curiae suggested that advocates with a standing of 15 years at the bar should be made eligible for appointment as Members of tribunals. In MBA-III, exclusion of advocates from being appointed as Members was found to be contrary to the judgment of this Court in MBA-I and MBA-II. While recording the submission of the learned F Attorney General that Rules shall be amended to make advocates eligible for appointment as Members, it was held in MBA-III that experience at the bar for advocates to be considered for appointment as Members should be the same as is applicable for appointment as High Court Judges, i.e., 10 years. In such view of the matter, a direction was given in MBA-III to amend the 2020 Rules to make advocates with at least 10 G years of experience at the bar eligible for appointment as Members in tribunals. The experience of advocates at the bar and their specialization in the relevant branch of law was directed to be taken into account by the Search-cum-Selection Committee (hereinafter referred to as SCSC) while considering their appointment. Advocates were held to be entitled H for reappointment for at least one term by giving preference to the service

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rendered by them in the tribunals. Thereafter, an application was filed by the Union of India for modification of the direction aforementioned by substituting the word, “eligible for reappointment” in the place of “entitled for reappointment”. The said request of the Union of India was acceded to by this Court.

49Copy pinpoint49. The direction given by this Court in the nature of mandamus in MBA-III is to the effect that advocates are entitled for appointment as Members, provided they have experience of 10 years. The first proviso to Section 184 which prescribes a minimum age of 50 years is an attempt to circumvent the direction issued in MBA-III striking down the experience requirement of 25 years at the bar for advocates to be eligible. Introduction of the first proviso to Section 184(1) is a direct affront to the judgment of this Court in MBA-III. This Court in MBA-I and Roger Mathew (supra) underlined the importance of recruitment of Members from the bar at a young age to ensure a longer tenure. Fixing a minimum age for recruitment of Members as 50 years would act as a deterrent for competent advocates to seek appointment. Practically, it would be difficult for an advocate appointed after attaining the age of 50 years to resume legal practice after completion of one term, in case he is not reappointed. Security of tenure and conditions of service are recognised as core components of independence of the judiciary. Independence of the judiciary can be sustained only when the incumbents are assured of fair and reasonable conditions of service, which include adequate renumeration and security of tenure. Therefore, the first proviso to Section 184(1) is in violation of the doctrine of separation of powers as the judgment of this Court in MBA-III has been frustrated by an impermissible legislative override. Resultantly, the first proviso to Section 184 (1) is declared as unconstitutional as it is violative of Article 14 of the Constitution. Selections conducted for appointment of Members, ITAT pursuant to the advertisement issued in 2018 should be finalized and appointments made by considering the candidates between 35 to 50 years as also eligible.

50Copy pinpoint50. The second proviso to Section 184(1) deals with the allowances and benefits payable to the Members which are to be the same as are admissible to a Central Government officer holding a post carrying the same pay. According to Rule 15 of the 2020 Rules, Chairpersons and Members of tribunals were entitled to House Rent Allowance at the same rate as admissible to officers with the Government of India holding H

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A Group ‘A’ post carrying the same pay. The contention of the learned Amicus Curiae in MBA-III was that the majority of the tribunals are situated in Delhi and there is scarcity of housing in Delhi. Not many Judges of the High Court are interested in accepting appointment to tribunals in view of the acute problem of housing. An amount of Rs.75,000/ - per month which was paid as House Rent Allowance (HRA) was not B sufficient to get a decent accommodation in Delhi for Chairpersons and Members of tribunals. Taking note of the serious problem of housing and the inadequate amount that was being paid as HRA to the Members, this Court in MBA-III directed enhancement of HRA to Rs.¹,25,000/- per month to the Members and Rs.¹,50,000/- per month to C Chairperson or Vice-Chairperson or President of tribunals. This direction was made effective from 01.¹.2021. The learned Amicus Curiae argued that the Union of India filed an application seeking modification of the HRA directed in the judgment. The clarification sought by the Union of India is to the effect that HRA payable to a Tribunal Member should not be a fixed amount and should, instead, be twice the HRA payable to the holder of a subsequent rank in the Government, e.g., Secretary to the Government. Miscellaneous Application No. 111 of 2021 filed by the Union of India is pending as this Court directed the Union of India to furnish details of the accommodation available for Chairpersons and Members of tribunals and to submit a proposal as to what amount would be reasonable towards HRA in case accommodation cannot be provided to Members. The learned Amicus Curiae contended that the result of the amendment is that Members of tribunals working in Delhi will get Rs.60,000/- as HRA. The second proviso to Section 184(1), read with the third proviso, is an affront to the judgment of this Court in MBA-III. By no stretch of imagination can it be said that the said provisos are a F result of curative legislation. The direction issued by this Court in MBA-III for payment of HRA was to ensure that decent accommodation is provided to Tribunal Members. Such direction was issued to uphold independence of the judiciary and it cannot be subject matter of legislative response. A mandamus issued by this Court cannot be reversed by the G legislature as it would amount to impermissible legislative override. Therefore, the second proviso, read with the third proviso, to Section 184(1) is declared as unconstitutional.

51Copy pinpoint51. It has come to our notice that after the judgement in this Writ Petition had been reserved on 03.⁶.21, a notification was issued by the H Ministry of Finance (Department of Revenue) on 30.⁶.21 amending

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the 2020 Rules. By Rule 6 of the Tribunal, Appellate Tribunal and other A Authorities (Qualifications, Experience and other Conditions of Service of Members) (Amendment) Rules, 2021 (hereinafter referred to as the 2021 Amendment Rules), the following rule was substituted for Rule 15 of the 2020 Rules: “15. House rent allowance.- With effect from the 1st January, B 2021, the Chairman, Chairperson, President, Vice Chairman, Vice Chairperson or Vice President shall have option to avail of accommodation to be provided by the Central Government as per the rules for the time being in force or entitled to house rent allowance subject to a limit of Rs. one lakh fifty thousand rupees per month and the Presiding Offices and Members C shall have option to avail of accommodation to be provided by the Central Government as per the rules for the time being in force or entitled to house rent allowance subject to a limit of Rs. one lakh twenty-five thousand rupees per month.” According to the notification dated 30.⁶.2021, the 2021 D Amendment Rules shall come into force on the date of their publication in the official gazette. However, it may be noted that the Explanatory Memorandum at the end of the notification states that Rule 6 of the 2021 Amendment Rules, amending Rule 15 of the 2020 Rules on HRA, shall be given retrospective operation with effect from 01.¹.21, in order to give effect to the judgement of this Court in MBA-III. Though we have adjudicated the validity of the second and third provisos to Section 184(1) of the Finance Act, 2017, as amended by the Ordinance, we find that the amendment to Rule 15, made with retrospective effect from 01.¹.21, is in conformity with the directions of this Court on the subject of HRA in MBA-III. In view thereof, no further direction is required to be given with respect to HRA.

52Copy pinpoint52. Rule 4(2) of the 2020 Rules pertains to the procedure to be followed by the SCSC. According to the said Rule, the SCSC should recommend two or three names for appointment to each post. A direction was given in MBA-III to amend Rule 4(2) of the 2020 Rules to provide that the SCSC shall recommend one person for appointment in each post in place of a panel of two or three persons for appointment to each post. One more name could be recommended to be included in the waiting list. Relying upon the earlier judgments of this Court in MBA-I, MBA-II and Rojer Mathew (supra), the learned Amicus Curiae had submitted H

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A during the course of the hearing in MBA-III that the procedure for appointment to the Tribunal should be clearly outside executive control. The learned Attorney General submitted in MBA-III that the number of candidates to be recommended by SCSC can be restricted to two instead of three. To limit the discretion of the executive after the SCSC has recommended names of selected candidates, this Court in the interest of B preserving independence of the judiciary, directed that Rule 4(2) should be read as empowering SCSC to recommend the name of only one person to each post.

53Copy pinpoint53. The learned Attorney General asserted that this Court cannot direct the legislature to make law. He relied upon the judgment in C Dr. Ashwani Kumar v. Union of India & Anr.54 wherein it was held that it is beyond the competence of this Court to direct legislature to make law. There is no quarrel with the said proposition. The learned Attorney General further asserted that the direction given by this Court in MBA-III relating to the number of candidates to be recommended D for appointment to each post can only be taken to be a suggestion. The Court, as a wing of the State, by itself is a source of law. The law is what the Court says it is. To clarify the position relating to Article 141 vis-à-vis Article 142, it has been held by this Court in Ram Pravesh Singh & Ors. v. State of Bihar & Ors.55 that directions given under Article 142 is not law laid down by the Supreme Court under Article

E 141. Any order not preceded by any reason or consideration of any principle is an order under Article 142. Article 136 of the Constitution is a corrective jurisdiction that vests a discretion in the Supreme Court to settle the law clear and as forthrightly forwarded in Union of India & Ors. v. Karnail Singh & Ors.56, it makes the law operational to make F it a binding precedent for the future instead of keeping it vague. In short, it declares the law, as under Article 141 of the Constitution. “Declaration of law” as contemplated in Article 141 of the Constitution is the speech express or necessarily implied by the highest Court of the land. The law declared by the Supreme Court is binding on all courts within the territory of India under Article 141, whereas, Article 142 empowers the Supreme G Court to issue directions to do complete justice. Under Article 142, the Court can go to the extent of relaxing the application of law to the parties or exempting altogether the parties from the rigours of the law in view 54 (2020) 13 SCC 585 55 (2006) 8 SCC 381 56 H (1995) 2 SCC 728

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of the peculiar facts and circumstances of the case.57 Sufficient reasons A were given in MBA-III to hold that executive influence should be avoided in matters of appointments to tribunals - therefore, the direction that only one person shall be recommended to each post. The decision of this Court in that regard is law laid down under Article 141 of the Constitution. The only way the legislature could nullify the said decision of this Court B is by curing the defect in Rule 4(2). There is no such attempt made except to repeat the provision of Rule 4(2) of the 2020 Rules in the Ordinance amending the Finance Act, 2017. Ergo, Section 184(7) is unsustainable in law as it is an attempt to override the law laid down by this Court. Repeating the contents of Rule 4(2) of the 2020 Rules by placing them in Section 184(7) is an indirect method of intruding into judicial sphere which is proscribed.

54Copy pinpoint54. The second part of Section 184(7) provides that the Government shall take a decision regarding the recommendations made by the SCSC preferably within a period of three months. This is in response to the direction given by this Court in MBA-III that the Government shall make appointments to tribunals within three months from the completion of the selection and recommendation by the SCSC. Such direction was necessitated in view of the lethargy shown by the Union of India in making appointments and filling up the posts of Chairpersons and Members of tribunals which have been long vacant. The tribunals which are constituted as an alternative mechanism for speedy resolution of disputes have become non-functional due to the large number of posts which are kept unfilled for a long period of time. Tribunals have become ineffective vehicles of administration of justice, resulting in complete denial of access to justice to the litigant public. The conditions of service for appointment to the posts of Chairpersons and Members have been mired in controversy for the past several years, thereby, adversely affecting the basic functioning of tribunals. This Court is aghast to note that some tribunals are on the verge of closure due to the absence of Members. The direction given by this Court for expediting the process of appointment was in the larger interest of administration of justice and to uphold the rule of law. Section 184(7) as amended by the Ordinance G permitting the Government to take a decision preferably within three months from the date of recommendation of the SCSC is invalid and

57 State of Punjab & Ors. v. Rafiq Masih (Whitewasher) (2014) 8 SCC 883; State v. Kalyan Singh & Ors. (2017) 7 SCC 444 H

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A unconstitutional, as this amended provision simply seeks to negate the directions of this Court.

55Copy pinpoint55. The tenure of the Chairperson and Member of a tribunal is fixed at four years by Section 184(11), notwithstanding anything contained in any judgment, order or decree of any court. It is relevant to mention B that sub-section (11) of Section 184 has been given retrospective effect from 26.⁵.2017. Rule 9 of 2020 Rules had specified the term of appointment of the Chairperson or Member of the Tribunal as four years. The learned Amicus Curiae while making his submissions in MBA-III had insisted that the Chairperson and Members of a tribunal should have a minimum term of five years by placing reliance on the judgment of this C Court in S.P. Sampath (supra), MBA-I and Rojer Mathew (supra). The stand taken by him was that a short tenure would be a disincentive for competent persons to seek appointment as Members of tribunals. The learned Attorney General submitted that the term of four years is subject to reappointment. He contended that advocates who are appointed D at an early age can get more than one extension and continue till they reach the age of superannuation. After perusing the law laid down by this Court in MBA-I and Rojer Mathew (supra) which held that a short stint is anti-merit, we directed the modification of tenure in Rules 9(1) and 9(2) as five years in respect of Chairpersons and Members of tribunals in MBA-III. This Court declared in para 53(iv) that the Chairperson, E Vice-Chairperson and the Members of the tribunals shall hold office for a term of five years and shall be eligible for reappointment. The insertion of Section 184(11) prescribing a term of four years for the Chairpersons and Members of tribunals by giving retrospective effect to the provision from 26.⁵.2017 is clearly an attempt to override the declaration of law by this Court under Article 141 in MBA-III. Therefore, clauses (i) and (ii) of Section 184(11) are declared as void and unconstitutional.

56Copy pinpoint56. The proviso to Section 184(11) refers to appointments that were made to the posts of Chairperson or Members between 26.⁵.2017 and the notified date, i.e., 04.⁴.2021. The proviso lays down that if the tenure of office or age of retirement specified in the order of appointment issued by the Government is greater than what is specified in Section 184(11), the term of office or the age of retirement of the Chairperson or Members shall be as specified in the order of appointment subject to a maximum term of office of five years. In other words, the term of office of Chairperson and Members of tribunals who were appointed H

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between 26.⁵.2017 and 04.⁴.2021 shall be five years even though the A order of appointment issued by the Government has a higher term of office or age of retirement which may involve the term of office being more than 5 years in practice. It is necessary at this stage to deal with the validity of retrospective effect given to sub-section (11) of Section

184. The learned Amicus Curiae canvassed a submission that Sections B 184(1) to (10) are prospective in operation and Section 184(11) is given retrospective effect from 26.⁵.2017, thereby leading to an anomalous situation. He submitted that sub-section (11) is made with the object of reversing the interim orders passed by this Court in Kudrat Sandhu v. Union of India (supra). He stated that the terms and conditions of appointments to be made to the Tribunals/Appellate Tribunals shall be in C terms of the respective statutes in force, before the enactment of the Finance Bill, 2017, according to para 224 of Rojer Mathew (supra). Mr. Balbir Singh, learned Additional Solicitor General, submitted that retrospectivity given to sub-section (11) of Section 184 is a permissible legislative override of the judgment of this Court in MBA-III. The 2020 D Rules were held to be prospective in MBA-III on two grounds - a) it was clear from the Notification dated 12.².2020 that there was no intention on the part of the Government of India to make the 2020 Rules retrospective; b) subordinate legislation cannot be given prospective effect unless the parent statute specifically provided the same. It is understood that while inserting sub-section (11) in Section 184 in the Finance Act, E 2017 and giving it retrospective effect from 26.⁵.2017, the Ordinance has attempted to cure the defect as was pointed out by this Court in terms of retrospective application while considering the 2020 Rules. However, the implications are not relevant for clauses (i) and (ii) of Section 184(11) which are declared as void and unconstitutional for the reasons mentioned above.

57Copy pinpoint57. Insofar as the proviso to Section 184(11) is concerned, the Ordinance sets the maximum tenure at five years even with respect to the appointment orders passed between 26.⁵.2017 and 04.⁴.2021 provide for a higher tenure. In the process, interim directions given by this Court in Kudrat Sandhu (supra) are also nullified. It would be relevant to refer to the directions issued by this Court in Kudrat Sandhu (supra) on 09.².2018. After taking the consent of the learned Attorney General and making modifications incorporating his suggestions, this Court held that all selections to the post of Chairperson/ Chairman, Judicial/ Administrative Members shall be for a period as provided in the Act and H

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A the Rules in respect of all tribunals. On 16.⁷.2018, this Court directed that persons selected as Members of ITAT can continue till the age of 62 years and persons who were holding the post of President till 65 years. By an order dated 21.08.2018, this Court clarified that a person selected as Member, CESTAT shall continue till the age of 62 years while a person holding the post of President can continue till the age of B 65 years. Though, there is nothing wrong with the proviso to Section 184(11) being given retrospective effect, the appointments made pursuant to the interim directions passed by this Court cannot be interfered with. This Court in Virender Singh Hooda (supra) upheld the retrospectivity of the legislation which had been challenged but the appointment of the petitioners therein pursuant to a direction of the Court were saved. It was held that the law does not permit the legislature to take back what has been granted in the implementation of the Court’s decision and such a course is impermissible. Similarly, in S.R. Bhagwat (supra), it was declared that a mandamus against the respondent-State giving financial benefits to the petitioners therein cannot be nullified by a legislation. It is also relevant to point out that even interim orders passed by this Court cannot be overruled by a legislative act, as discussed above. While making it clear that the appointments that are made to the CESTAT on the basis of interim orders passed by this Court shall be governed by the relevant statute and the rules framed thereunder, as they existed prior to the E Finance Act, 2017, we uphold the retrospectivity given to the proviso to Section 184 (11). To clarify further, all appointments after 04.⁴.2021 shall be governed by the Ordinance, as modified by the directions contained herein.

58Copy pinpoint58. To conclude, the first proviso and the second proviso, read F with the third proviso, to Section 184 overriding the judgment of this Court in MBA-III in respect of fixing 50 years as minimum age for appointment and payment of HRA, Section 184(7) relating to recommendation of two names for each post by the SCSC and further, requiring the decision to be taken by the Government preferably within three months are declared to be unconstitutional. Section 184(11) G prescribing tenure of four years is contrary to the principles of separation of powers, independence of judiciary, rule of law and Article 14 of the Constitution of India. Though, we have upheld the proviso to Section 184(11), the appointments made to the CESTAT pursuant to the interim orders passed by this Court shall be governed by the relevant statute H and the rules framed thereunder that existed prior to 26.⁵.2017. We

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have already taken notice of the notification dated 30.⁶.21 by way of A which Rule 15 of the 2020 Rules dealing with HRA has been amended in conformity with our directions in MBA-III. Peroration

59Copy pinpoint59. The Petitioner continues its relentless struggle in its endeavour to make tribunals effective avenues of administration of justice. The B endeavour of the Petitioner is to extricate the tribunals from the clutches of the executive in the interest of independence of judiciary. Security of tenure, adequate remuneration and other conditions of service are necessary to ensure that Members of tribunals would feel secure during their tenure. The judgment in MBA-III was passed after a detailed dialogue with the learned Attorney General. Existence of large number of vacancies of Members and Chairpersons and the inordinate delay caused in filling them up has resulted in emasculation of the tribunals. The main reason for tribunalisation, which is to provide speedy justice, is not achieved as tribunals are wilting under the unbearable weight of the exploding docket. Undoubtedly, the legislature is free to exercise its power to make laws and the executive is the best judge to decide policy matters. However, it is high time that a serious effort is made by all concerned to ensure that all the vacancies in the tribunals are filled up without delay. Access to justice and confidence of the litigant public in impartial justice being administered by tribunals need to be restored. E

60Copy pinpoint60. The Writ Petition is disposed of accordingly.

S. RAVINDRA BHAT, J.

1. One may well ask why there is need for a concurrence when F the judgment with which this author agrees, both as to its reasoning as well as its conclusions, is as fully and well-reasoned as L. Nageswara Rao, J’s judgment is. The reason lies in the importance of the themes which have been deliberated- independence of the judiciary and separation of powers, both of which are timeless in their resonance and relevance. G This brief prefatory aside at the beginning, outlines the approach this opinion strives to take, while wholeheartedly supporting the conclusions recorded by Rao, J. With great respect to Hemant Gupta, J, I cannot persuade myself to agree with him, that as regards prescription of minimum age (for appointment to tribunals, i.e. 50 years) or with respect to conditions of service such as payment of house rent allowance, this H

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A court ought to respect legislative wisdom, and that directions issued in past judgments cannot bind Parliament, as they fell outside the judicial sphere.

2. Independence of the judiciary is one of the foundational pillars of every democracy governed by the rule of law, where the constitution reigns supreme. Some constitutions may guarantee this in emphatic terms, whereas in others, there may be no single provision manifested in the constitution, but rather, the idea may emerge as a compelling inference - through the kind of assurances articulated by express provisions (tenure, eligibility, age of superannuation, conditions where removal is possible only through Parliamentary or legislative process, manner of appointment etc). The Attorney General’s assertion that since there is no single provision which expressly articulates independence of the judiciary, and that being the case, the court cannot direct the length of tenure or other eligibility conditions which are in the domain of the executive, (which, as a co- equal organ of governance) is exclusively entitled to prescribe criteria for selection of tribunal members, therefore, needs careful scrutiny.

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for courts. Many tribunals⁵ which were created by legislation introduced A in the 1990s and the decade beginning in 2000 do not conform to the heads or subject matters enumerated in either of those Articles. Yet, they were created under the relevant fields of legislation combined with Entry 11A of the Concurrent List (List III, Seventh Schedule to the Constitution of India).⁶ B

4. The Union’s position that when a legislation or legislative instrument (such as an ordinance in this case) is questioned, its validity can be scrutinized only by considering its impact on some express provision of the constitution, and not on any concept or notion such as separation of powers and judicial independence, requires examination in the first instance. C

5. There can be no doubt that any enactment or subordinate legislation can be questioned as offending a constitutional provision. However, does this articulation preclude a challenge based on principles which are evident in the constitution, but yet, are not clearly spelt out in its plain text through any express provision? In the Constitution Bench D judgment of this court in Madras Bar Association v. Union of India⁷ (“MBA-I”) the issue was whether High Courts could be divested of their statutory appellate jurisdiction in tax disputes, which they had been exercising for over 80 years, to confer this jurisdiction on a new tribunal whose membership was to be different from judges of High E Courts. This court then examined the applicability of the basic structure doctrine, of which independence of the judiciary and separation of powers have been held to be a part, and observed as follows:

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A “113.². We have given our thoughtful consideration to the submission advanced at the hands of the learned counsel for the petitioners insofar as the first perspective is concerned. We find substance in the submission advanced at the hands of the learned counsel for the petitioners, but not exactly in the format suggested by the learned counsel. A closer examination of the judgments relied upon lead us to the conclusion, that in every new Constitution, which makes separate provisions for the legislature, the executive and the judiciary, it is taken as acknowledged/conceded that the basic principle of “separation of powers” would apply. And that, the three wings of governance would operate in their assigned domain/province. The power of discharging judicial functions which was exercised by members of the higher judiciary at the time when the Constitution came into force should ordinarily remain with the court, which exercised the said jurisdiction at the time of promulgation of the new D Constitution. But the judicial power could be allowed to be exercised by an analogous/similar court/tribunal with a different name. However, by virtue of the constitutional convention while constituting the analogous court/tribunal it will have to be ensured that the appointment and security of tenure of Judges of that court would be the same as of the court sought to be substituted. This was the express conclusion drawn in Hinds case [Hinds v. R., 1977 AC 195 : (1976) 2 WLR 366 : (1976) 1 All ER 353 (PC)] . In Hinds case [Hinds v. R., 1977 AC 195 : (1976) 2 WLR 366 : (1976) 1 All ER 353 (PC)], it was acknowledged that Parliament was not precluded from establishing a court under a new name to exercise the jurisdiction that was being exercised by members of the higher judiciary at the time when the Constitution came into force. But when that was done, it was critical to ensure that the persons appointed to be members of such a court/ G tribunal should be appointed in the same manner and should be entitled to the same security of tenure as the holder of the judicial office at the time when the Constitution came into force. Even in the treatise Constitutional Law of Canada by Peter W. Hogg, it was observed: if a province invested a tribunal with a jurisdiction of a kind, which ought to properly H

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A 6. Likewise, in Dr. D.C. Wadhwa & Ors v. State of Bihar & Ors,8 a constitution bench of this court held that the power to promulgate an ordinance does not enable the executive to re-promulgate it several times, without seeking its enactment by the appropriate legislature. There is no provision in the constitution, which precludes the executive from re-promulgating ordinances; yet this court ruled that to be the case, and observed as follows: “The Executive cannot by taking resort to an emergency power exercisable by it only when the Legislature is not in Session, take over the law- making function of the Legislature. That would be clearly subverting the democratic process which lies at the core of our constitutional scheme, for then the people would be governed not the laws made by the Legislature as provided in the Constitution but by laws made by the Executive. The Government cannot by-pass the Legislature and without enacting the provisions of the Ordinance into an Act of the D Legislature, repromulgate the Ordinance as soon as the Legislature is prorogued. Of course, there may be a situation where it may not be possible for the Government to introduce and push through in the Legislature a Bill containing the same provisions as in the Ordinance, because the Legislature may have too much legislative business in a particular Session or the time at the disposal of the Legislature in a particular Session may be short, and in that event, the Governor may legitimately find that it is necessary to repromulgate the Ordinance. Where such is the case, re-promulgation of the Ordinance may not be open to attack. But otherwise, it would be a colourable exercise of power on the part of the Executive to continue an Ordinance with substantially the same provisions beyond the period limited by the Constitution, by adopting the methodology of repromulgation.”

7. The above decision was endorsed in Krishna Kumar Singh v. G State of Bihar9 which also held that re-promulgation “represents an effort to overreach the legislative body which is a primary source of law-making authority in a parliamentary democracy.” The court pointed out that: 8 1987 (1) SCR 198. 9 H (2017) 3 SCC 1.

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“The danger of repromulgation lies in the threat which it poses A to the sovereignty of Parliament and the State Legislatures which have been constituted as primary law-givers under the Constitution. Open legislative debate and discussion provides sunshine which separates secrecy of Ordinance-making from transparent and accountable governance through law- B making.”

8. In a decision of the Privy Council (which has been cited and approved by decisions of this court, including in Kesavananda Bharati v. State of Kerala¹⁰) viz, Liyanage v. The Queen¹¹ the compulsive, though inarticulate premise of these principles was elaborated in the following manner: C

“What, however, is implicit in the very structure of a Constitution on the Westminster model is that judicial power, however it be distributed from time to time between various courts, is to continue to be vested in persons appointed to hold judicial office in the manner and on the terms laid down in the Chapter dealing with the judicature, even though this is not expressly stated in the Constitution.”

9. In L. Chandra Kumar v Union of India12 this court invalidated Section 28 of the Administrative Tribunals Act on the ground that it excluded jurisdiction under Articles 226 and 227, and was thus in conflict with the basic structure of the constitution, as judicial review was part of the basic structure: “100. In view of the reasoning adopted by us, we hold that Clause 2(d) of Article 323A and Clause 3(d) of Article 323B, to the extent they exclude the jurisdiction of the High Courts F and the Supreme Court under Articles 226/227 and 32 of the Constitution, are unconstitutional. Section 28 of the Act and the “exclusion of jurisdiction” clauses in all other legislations enacted under the aegis of Articles 323A and 323B would, to the same extent, be unconstitutional. The jurisdiction conferred G upon the High Courts under Articles 226/227 and upon the Supreme Court under Article 32 of the Constitution is part of the inviolable basic structure of our Constitution.” 10 1973 Supp. SCR 1. 11 [1967] 1 AC 259, 287–288. 12 1997 (3) SCC 261 H

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A In Ismail Faruqui v Union of India13 provisions of a Central enactment14 [Section 4 (3)] which abated all pending legal proceedings was held to be unconstitutional because: it amounted to “an extinction of the judicial remedy for resolution of the dispute amounting to negation of rule of law. Sub-section (3) of Section 4 of the Act is, therefore, unconstitutional and invalid.”It is therefore, too late in the day to contend that infringement by a statute, of the concept of independence of the judiciary - a basic or essential feature of the constitution, which is manifested in its diverse provisions, cannot be attacked, as it is not evident in a specific Article of the Constitution.

10. The challenges to executive or legislative measures based on violation of the twin concepts of separation of powers and independence of the judiciary have to be seen in terms of their impacts, not at one point in time, but cumulatively, over a time continuum. This idea was expressed in Pareena Swarup v. Union of India15 where the court observed that: “9. It is necessary that the court may draw a line which the executive may not cross in their misguided desire to take over bit by bit and (sic) judicial functions and powers of the State exercised by the duly constituted courts. While creating new avenue of judicial forums, it is the duty of the Government to see that they are not in breach of basic constitutional scheme of separation of powers and independence of the judicial function. We agree with the apprehension of the petitioner that the provisions of the Prevention of Money-Laundering Act are so provided that there may not be independent judiciary to decide the cases under the Act but the members and the Chairperson to be selected by the Selection Committee headed by Revenue Secretary.

10. It is to be noted that this Court in L. Chandra Kumar v. Union of India [(1997) 3 SCC 261 : 1997 SCC (L&S) 577] has laid down that the power of judicial review over legislative action vested in the High Courts under Article G 226 as well as in this Court under Article 32 of the Constitution is an integral and essential feature of the Constitution constituting part of its (sic basic) structure. The Constitution 13 (1994) 6 SCC 360, 14 the Acquisition of Certain Area at Ayodhya Act, 1993 (No. 33 of 1993) 15 H (2008) 14 SCC 107

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guarantees free and independent judiciary and the constitutional scheme of separation of powers can be easily and seriously undermined, if the legislatures were to divest the regular courts of their jurisdiction in all matters, and entrust the same to the newly created Tribunals which are not entitled to protection similar to the constitutional protection afforded to the regular courts. The independence and impartiality which are to be secured not only for the court but also for Tribunals and their members, though they do not belong to the “judicial service” but are entrusted with judicial powers. The safeguards which ensure independence and impartiality are not for promoting personal prestige of the functionary but for preserving and protecting the rights of the citizens and other persons who are subject to the jurisdiction of the Tribunal and for ensuring that such Tribunal will be able to command the confidence of the public. Freedom from control and potential domination of the executive are necessary preconditions for the independence and impartiality of Judges. To make it clear that a judiciary free from control by the executive and legislature is essential if there is a right to have claims decided by Judges who are free from potential domination by other branches of Government. With this background, let us consider the defects pointed out by the petitioner and amended/proposed provisions of the Act and the Rules.”

11. The decision in S.P. Sampath Kumar v. Union of India & Ors.16 upheld the validity of the Administrative Tribunals Act, 1985 and the exclusion of High Courts’ jurisdiction under Article 226 of the F Constitution (based on an enabling clause in Article 323A); yet, the reasoning in the judgments delivered are a clear indicator that this court would always be careful in considering the efficacy of the body and its ability to administer justice in a fair and impartial manner, having regard to the qualifications and experience of its personnel as well as the safeguards of tenure, salary etc. L. Chandra Kumar v. Union of India G & Ors17,a seven-judge decision, decisively overruled Sampath Kumar (supra) with respect to the preclusion of jurisdiction of Article 226 of the Constitution; this Court also declared that judicial review is a part of 16 1987 SCC Supp. 734 17 (1997) 3 SCC 261 H

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A the basic structure of the Constitution. In the next phase, where amendments were proposed to the Companies Act, 1956 to set up a National Company Law Tribunal, this Court, by the Constitution Bench decision in Union of India v. R. Gandhi18 again found several provisions of enacted Parliamentary law to be objectionable – they are related to tenure, manner of appointment, qualifications of members etc. Likewise, B in Madras Bar Association v Union of India (MBA-I) (supra), the complete divesting of High Courts’ jurisdiction under tax enactments (income tax, customs, central excise and service tax etc) and parliamentary setting up of a National Tax Court was held to be unconstitutional. Here again, the court highlighted the quality of justice expected from such bodies and underlined that the divestment of such jurisdiction was prohibited by the Constitution. Madras Bar Association19 (“MBA-II”) considered the amended provisions of the Companies Act and proceeded to pronounce that many of them could not pass muster of the Constitution. Once again, as in R. Gandhi (supra), this court was concerned with the likely impact on the nature of the justice delivery mechanism envisioned by the new law. The method of appointment, qualifications, eligibility conditions and tenure of all these fell within the undoubted domain of parliamentary concern. Yet, this court held that many of these policy decisions enacted into law were contrary to the principle of an independent judiciary which could guarantee effective and impartial justice. Roger Mathew20 held that the rules framed under the Finance Act, 2017 (“the 2017 Rules”) were not sustainable due to defects in the constitution of selection cum appointment committees and tenure of members of tribunals, among other aspects. Madras Bar Association v. Union of India21 (“MBA-III”) held that rules framed in 2020 were invalid as regards the tenure of members of tribunals, constitution of the mechanism for their selection, lack of any substantive rules for their re-appointment, etc.

12. In all these decisions, this court’s scrutiny was based upon its role as the guardian of the constitution and, more specifically, independence of the judiciary. If one were asked to pinpoint any specific provision of the constitution that this court relied upon while holding the enacted provisions to be falling afoul of, there would be none. It is too 18 (2010) 11 SCC 1 19 (2015) 8 SCC 583. 20 (2020) 6 SCC 1. 21 H 2020 SCC OnLine SC 962.

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late now to contend that independence of the judiciary and separation of A powers are vague concepts based on which Parliamentary re- enactment cannot be invalidated.

13. The role of this court in considering whether or not provisions of law or executive policies are in consonance with the Constitution is well recognized and cannot be overemphasized. The Attorney B General’s assertion that the executive or indeed the Parliament acts within its rights in interpreting the Constitution, and therefore this court should adopt a deferential standard in matters of policy are therefore insubstantial, and also disquieting. As conceded by the Union, if a law (passed validly in exercise of its exclusive power by the Parliament on its interpretation of the Constitution) violates any express provision or principle that lies at the core of any express provision or provisions, this Court’s voice is decisive and final.

14. Pertinently, in matters of independence of the judiciary or arrangement of courts or tribunals, when these provisions come up for interpretation, this court would apply a searching scrutiny standard in its judicial review to ensure that the new body, court, tribunal, commission or authority created to adjudicate (between citizens and government agencies or departments, citizens and citizens, or citizens and corporate entities) are efficient, efficacious and inspire public confidence. The role of courts in considering a provision of law setting up adjudicatory bodies, was recognized in R.K. Jain v. Union of India22 in the following terms: “The faith of the people is the bed-rock on which the edifice of judicial review and efficacy of the adjudication are founded. The alternative arrangement must, therefore, be effective and efficient. For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Govt. To maintain independence and impartiality it, is necessary that the personnel should have at least modicum of legal training, learning and experience. G Selection of competent and proper people instil people’s faith and trust in the office and help to build up reputation and acceptability. Judicial independence which is essential and

22 1993 (3) SCR 802 H

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A imperative is secured and independent and impartial administration of justice is assured. Absence thereof only may get both law and procedure wronged and wrongheaded views of the facts and may likely to give rise to nursing grievance of injustice. Therefore, functional fitness, experience at the liar and aptitudinal approach are fundamental for efficient judicial adjudication. Then only as a repository of the confidence. as its duty, the tribunal would properly and efficiently interpret the law and apply the law to the given set of facts. Absence thereof would be repugnant or derogatory to the constitution. The daily practice in the courts not only gives training to Advocates to interpret the rules but also adopt the conventions of courts. In built experience would play vital role in the administration of justice and strengthen and develop the qualities, of intellect and character, forbearance and patience, temper and resilience which are very important in the practice of law. Practising Advocates from the Bar D generally do endow with those qualities to discharge judicial functions. Specialised nature of work gives them added advantage and gives benefit to broaden the perspectives. “Judges’’ by David Pannick (1987 Edition), at page 50, stated that, “we would not allow a man to perform a surgical operation without a thorough training and certification of fitness. Why not require as much of a trial judge who daily operates on the lives and fortunes of others”.

15. It would be useful to notice that whenever Parliament creates tribunals with exclusive jurisdiction, the parent enactment or law invariably bars the jurisdiction of ordinary civil courts.23 This in my opinion is the clearest indicator of the fact that but for such provisions and the creation of such exclusive bodies, civil courts would of necessity have enjoyed jurisdiction to adjudicate disputes arising out of such new

23 Section 293, Income Tax Act; Section 20A of the Securities and Exchange Board of G India Act, 1992; Section 18, the Recovery of Debts and Bankruptcy Act, 1993; Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;Section 268, Companies Act, 2013; Section 231 of the Insolvency and Bankruptcy Code, 2016; Section 56, Petroleum and Natural Gas Regulatory Board Act, 2006; Section 154, Electricity Act, 2003; Section 27 of the Telecom Regulatory Authority of India Act, 1997; Section 61 of the Competition Act, H 2002.

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legislation²⁴. This underscores the fact that the appropriate legislature A wishes those disputes arising from such new legislation not to be adjudicated by civil courts: which otherwise would have possessed jurisdiction over them. Such disputes may include issues such as refund of excess amounts claimed as tax, private disputes between two licensees under a statutory regime such as telecom or electricity laws etc., B consumer disputes, liability to banks and financial institutions, and so on.

16. Parliament has, over the years, created several tribunals and commissions which exercise judicial functions that would ordinarily fall within the jurisdiction of courts; they would also have been subjected to the supervisory jurisdiction of High Courts under Article 227. This gradual “hiving off” of jurisdiction from the courts, therefore, calls for a careful and searching scrutiny to ensure that those who approach these bodies are assured of the same kind and quality of justice, infused with what citizens expect from courts, i.e., independence, fairness, impartiality, professionalism and public confidence. These considerations are relevant, given that “policy” choices adopted by the executive or legislature in the past, when it concerned dispensation of justice through courts, were the subject matter of scrutiny under judicial review by courts.

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A indicate that the duty to consult is so integrated with the exercise of the power that the power can be exercised only in consultation with the person or persons designated therein.” To the same effect are the decisions in Chandramouleshwar Prasad v. Patna High Court26 and many other judgments.27 In State of B Bihar v Bal Mukund Sah28 it was held that: “the framers of the Constitution separately dealt with Judicial Services of the State and made exclusive provisions regarding recruitment to the posts of District Judges and other civil judicial posts inferior to the posts of the District Judge. Thus C these provisions found entirely in a different part of the Constitution stand on their own and quite independent of part XIV dealing with Services in general under the State. Therefore, Article 309, which, on its express terms, is made subject to other provisions of the Constitution, does get circumscribed to the extent to which from its general field of operation is D carved out a separate and exclusive field for operation by the relevant provisions of Articles dealing with Subordinate Judiciary as found in Chapter VI of Part VI of the Constitution.”

18. This court, therefore, as the ultimate guardian of the E Constitution, and the rule of law, which it is sworn to uphold, has been asserting its role in regard to matters of appointment, and other conditions of service of judges of district and other courts. Since tribunals function within the larger ecosystem of administration of justice, and essentially discharge judicial functions, this court is equally concerned with the F qualifications, eligibility for appointment, procedure for selection and appointment, conditions of service, etc of their members. This court’s concern, therefore, is unlike any other subject matter of judicial review. It cannot be gainsaid that if tenures of tribunals’ members are short: say two years, or if their salaries are pegged at unrealistically low levels, or if their presiding members are given no administrative control or powers, G 26 (1969) 3 SCC 56 27 State of Kerala v. A. Lakshmikutty and Ors. 1987 (1) SCR136 where the court emphasized that the Constitution required the Governor to have a “real, full and effective consultation” with the High Court in the matter of appointment of District judges; M.M. Gupta and Ors. v. State of Jammu and Kashmir & Ors (1982) 3 SCC 412. 28 H (2004) 4 SCC 640.

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the objective of efficient, fair, and impartial justice delivery would be defeated. It cannot then be argued that each of these are “policy” matters beyond the court’s domain.

19. Ordinarily in pure “policy” matters falling within Parliamentary or executive domain, such as economic, commercial, financial policies, or other areas such as energy, natural resources etc, this court’s standard of judicial review is deferential. In almost all subject matters over which legislative bodies enact law, the wisdom of the policy is rarely questioned; it is too well recognised that in such matters, judicial review extends to issues concerning liberties of citizens, and further, whether the particular subject matter falls within the legislative field of the concerned legislative body. In matters where the executive implements those laws, the scrutiny extends to further seeing the legality and constitutionality of such action. Where there is no law, the court considers whether executive competence to act is traceable to the particular legislative field under the Constitution, and whether the executive action sans law, abridges people’s liberties. Deference to matters executive appears to be highest, when the country faces emergencies and existential threats. However, in matters that concern administration of justice, especially where alternative adjudicatory forums are created, the court’s concern is greater. This is because the Constitution does not and cannot be read so as to provide two kinds of justice: one through courts, and one through other bodies. The quality and efficacy of these justice delivery mechanisms have to be the same, i.e., the same as that provided by courts, as increasingly, tribunals adjudicate disputes not only between state agencies and citizens, but also between citizens and citizens as well as citizens and powerful corporate entities. Therefore, it is the “equal protection” of laws29, guaranteed to all persons, through institutions that assure the same competence of its personnel, the same fair procedure, and the same independence of adjudicators as is available in existing courts, that stands directly implicated. Consequently, when this court scrutinizes any law or measure dealing with a new adjudicatory mechanism, it is through the equal protection of law clause under Article 14 of the Constitution. G

20. With these observations, I proceed to deal with the minimum age requirement (hereafter called “age qualification”) which precludes otherwise qualified candidates possessing the requisite experience from appointment to all tribunals, unless they are 50 years of age or older. 29 Under Article 14 of the Constitution of India H

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A This age qualification is that candidates, to be appointed, should not be less than 50 years, and has been introduced by the first proviso to Section 184 (1) of the Finance Act. What is immediately noticeable is that this age qualification (more by way of an age bar or minimum age requirement) did not find place in any parent enactment30, which set out the eligibility conditions for appointments to various tribunals, with the exception of appointment as members to the National Company Law Tribunal, for which, candidates should have completed 50 years to be eligible for appointment, apart from the prescribed eligibility and condition criteria. Such age criteria was not enacted under the provisions of the Finance Act, 2017; nor was it introduced in the 2017 Rules (which were invalidated by Rojer Mathew). An indirect age barrier, for the first time was introduced in the 2020 Rules framed under the Finance Act, 2017, in the form of the requirement of otherwise qualified advocates and chartered accountant candidates having to possess 25 years of practice. This court held that requirement to be untenable, and directed it to be suitably amended. In response, as it were, for the first time, the 50-year minimum age requirement has been enacted in the parent enactment (Finance Act, 2017) through amendment by the impugned Ordinance. The justification given for this age requirement or qualification is threefold: (a) Advocate members, technical members (including chartered accountants) and those joining the tribunal as departmental members would have a uniform age, which is relatable to the approximate age by which a public servant attains the status and rank of Additional Secretary, which enables consideration of her or his name for appointment as member of a tribunal; (b) Considerations of equivalence with Additional Secretaries, F weighed with the Union in enacting the age qualification; (c) Whether the minimum age of a tribunal member ought to be 50 years, or less, is within the exclusive domain of the executive, and Parliament and cannot be dependent upon the views of this court, being a pure policy issue. G

21. The challenge to the first proviso to Section 184, which prescribes the age qualification, has to be seen from several angles. First, the underlying parent statutes which created the tribunals (ITAT, 30 Income Tax Act, 1961, Customs Act, 1962, Securities Exchange of India Act, 1992, H Electricity Act, 2003, etc.

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CESTAT, TDSAT, CAT) did not prescribe, as an eligibility criterion for A selection of candidates as members, any minimum age. The prescription of 50 years as a minimum eligibility criterion, in the opinion of this court, is without any rationale. The ITAT has existed for the last 79 years; no less than 33 of its members were appointed as judges of various High Courts; one of them (Ranganathan, J.) was appointed to this court. The B CESTAT too has comprised advocates who have staffed the tribunal efficiently. The absence of any explanation for the preference given to older persons, in fact leads to an absurd result- as was pointed out in MBA-III and as has been reiterated by L. Nageswara Rao, J. in his opinion. The Constitution of India makes an advocate who has practiced for more than 10 years, eligible for consideration for appointment as a C judge of the High Court and even this Court. An advocate with 7 years’ practice with the Bar can be considered for appointment to the position of a District Judge. Prescribing 50 years as a minimum age limit for consideration of advocates has the devastating effect of entirely excluding successful young advocates, especially those who might be trained and competent in the particular subject (such as Indirect Taxation, Anti- Dumping, Income-Tax, International Taxation and Telecom Regulation). The exclusion of such eligible candidates in preference to those who are more than 50 years of age is inexplicable and therefore entirely arbitrary. As this Court in its previous judgment (Rojer Mathew) has pointed out in another context, the exclusion of such young and energetic legal practitioners could result in not so efficient or competent practitioners left in a field for consideration which would have telling effects on the quality of decisions they are likely to render.

22. Prescribing 50 years’ minimum age as a condition for appointment to these tribunals is arbitrary also because absolutely no reason is forthcoming about what impelled Parliament to divert from the long-established criteria of giving weightage to actual practice, reputation, integrity and subject expertise, without a minimum age criterion, in the pleadings in this case, nor in any other cases (R. Gandhi –MBA –I; Madras Bar Association –III and Roger Mathew). Such being the case, it is astonishing that in the span of a year (i.e. after the decision in Roger Mathew) ”new thinking” seems to have prevailed to frame rules excluding advocates who can otherwise, based on their expertise, be considered for appointment to even High Courts.

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A 23. This Court would also observe that the consideration of such younger advocates in the age group of 40-45 years would have long term benefits since the domain knowledge and expertise in such areas (Telecom Regulation, Taxation –both Direct and Indirect, GATT Rules, International Taxation etc.) would be useful in adjudication in these tribunals and lead to a body of jurisprudence. Depending on how such B counsel/advocates fare as members of the Tribunal, having regard to their special knowledge of these laws, at a later and appropriate stage, they may even be considered for appointment to High Courts.

24. The age criteria, impugned in this case also leads to wholly anomalous and absurd results. For instance, an advocate with 18- or 20- C years’ practice, aged 44 years, with expertise in the field of indirect taxation, telecom, or other regulatory laws, would be conversant with the subject matter. Despite being eligible, (as she or he would fulfil the parameters of at least 10 years’ practice, in the light of the decision in MBA-III) such a candidate would be excluded. On the other hand, an individual who might have practiced law for 10 years, and later served as a private or public sector executive in an entirely unrelated field, but who might be 50 years of age, would be considered eligible, and can possibly secure appointment as a member of a tribunal. Thus, the age criterion would result in filtering out candidates with more relevant experience and qualifications, in preference to those with lesser relevant experience, only on the ground of age.

25. In the decision reported as State of J&K v. Triloki Nath Khosa31, this court explained that a classification for the purpose of Article 14 of the Constitution (as the present minimum age criteria undoubtedly is, in the present case) based on any criteria, must be based on a distinct characteristic, having a rational nexus with the object of the norm, or the law: “31. Classification, however, is fraught with the danger that it may produce artificial inequalities and therefore, the right to classify is hedged in with salient restraints; or else, the guarantee of equality will be submerged in class legislation masquerading as laws meant to govern well marked classes characterized by different and distinct attainments. Classification, therefore, must be truly founded on substantial

31 H (1974) 1 SCC 19

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differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved.”

26. Similarly, in Mohd. Shujat Ali v. Union of India32 this Court cautioned against over-classification, based on artificial distinctions between two categories falling within the same class, in matters of public employment: “To permit discrimination based on educational attainments not obligated by the nature of the duties of the higher post is to stifle the social thrust of the equality clause. A rule of promotion which, while conceding that non-graduate Supervisors are also fit to be promoted as Assistant Engineers, reserves a higher quota of vacancies for promotion for graduate Supervisors as against non-graduate Supervisors, would clearly be calculated to destroy the guarantee of equal opportunity.” D

27. Given that the essential educational qualifications and experience in the relevant field are fixed for all candidates, for a classification based on minimum age for appointment (like in the present case) to succeed, the Union cannot say that it should be held to be valid, irrespective of the nature and purposes of the classification or the quality and extent of the difference in experience between candidates. As between someone with 18 years’ experience but aged 42 or 43 years, and someone with only 12 years’ experience, if a system of weightage for experience and qualification were to be applied, the one with greater experience would in all likelihood be selected. Then, to say that one with lesser experience, but who is more aged should be selected and appointed, not only eliminating the one with more experience, but even disqualifying her or him, would mean that better candidates have to be overlooked and those with lesser experience would be appointed, solely on the ground that the latter is over 50 years of age. Prime Minister Jawaharlal Nehru, in the course of the Constituent Assembly debates, (though in the context of fixing age of retirement of judges) remarked that33

32 1975 (3) SCC 76 33 CAD, Vol. VIII dated 24 th May, 1949 H

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A “But the fact is, when you reach certain top grades where you require absolutely first-class personnel, then it is a dangerous thing to fix a limit which might exclude these first- rate men.” In the present case, the rule has the effect of excluding deserving candidates, without subserving any discernible public policy or goal. Thus, the classification is based on no justifiable rationale; nor can it be said that the age criterion has some nexus with the object sought to be achieved, such as greater efficiency or experience.

28. In Anuj Garg v. Hotel Assn. of India34 one of the issues was the bar to employment of anyone less than 25 years of age in the hotel industry. This court held that such age discrimination was unsustainable, and struck it down, observing as follows: “25. Hotel management has opened up a vista for young men and women for employment. A large number of them are taking hotel management graduation courses. They pass their examinations at a very young age. If prohibition in employment of women and men below 25 years is to be implemented in its letter and spirit, a large section of young graduates who have spent a lot of time, money and energy in obtaining the degree or diploma in hotel management would be deprived of their right of employment. Right to be considered for employment subject to just exceptions is recognised by Article 16 of the Constitution. Right of employment itself may not be a fundamental right but in terms of both Articles 14 and 16 of the Constitution of India, each person similarly situated has F a fundamental right to be considered therefor. **********

56. Young men who take a degree or diploma in hotel management enter into service at the age of 22 years or 23 years. It, thus, cannot prohibit employment of men below 25 G years. Such a restriction keeping in view a citizen’s right to be considered for employment, which is a facet of the right to livelihood does not stand judicial scrutiny.”

34 H (2008) 3 SCC 1.

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29. In this court’s decision in Lt. Col. Nitisha & Ors. v. Union of A India,35 a reference was made to a US statute - the Age Discrimination in Employment Act, 1967 and the US Supreme Court decision in Smith v. City of Jackson36 which dealt with discrimination based on age. The relevant provisions of the said enactment proscribe age discrimination in regard to matters of employment.37 A recent US B Supreme Court decision Baab v. Wilke38 explained what is meant by age discrimination, in the following terms: “The Civil Service Reform Act of 1978, which governs federal employment, broadly defines a “personnel action” to include most employment-related decisions, such as appointment, promotion, work assignment, compensation, and performance C reviews. See 5 U. S. C. §2302(a)(2)(A). That interpretation is consistent with the term’s meaning in general usage, and we assume that it has the same meaning under the ADEA. Under §633a(a), personnel actions must be made “free from” discrimination. The phrase “free from” means “[c]lear of D (something which is regarded as objectionable).” Webster’s Third New International Dictionary 905 (def. 4(a)(2)) (1976); 4 Oxford English Dictionary 521 (def. 12) (1933); see also American Heritage Dictionary 524 (def. 5(a)) (1969) (defining “free” “used with from” as “[n]ot affected or restricted by a given condition or circumstance”); Random House Dictionary E 35 2021 SCCOnLine SC 261. 36 544 US 228 (2005). 37 The relevant provisions of the Age Discrimination in Employment Act, 1967, Sec 623 (Section 4) are as follows: “(a) Employer practices It shall be unlawful for an employer- F (1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age; (2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age; or (3) to reduce the wage rate of any employee in order to comply with this G chapter. (b) It shall be unlawful for an employment agency to fail or refuse to refer for employment, or other -wise to discriminate against, any individual because of such individual’s age, or to classify or refer for employment any individual on the basis of such individual’s age….” 38 No. 18-882, 589 U. S. ____ (2020) H

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