Tribunals Reforms Act: Day 1 Oral Hearings-Admissions

On September 15th 2021, a 3- judge bench consisting Ramana CJI, D.Y. Chandrachud J and Nageswara Rao J heard a clutch of petitions challenging the Tribunals Reforms Act, 2021 (the Act). 

 

One group of petitioners have approached the Court regarding the Union’s delay in appointing members to vacant positions in different tribunals. Another group of petitioners (Madras Bar Association and Mr. Jairam Ramesh) have challenged the validity of the Act.  The Act lays out the procedure for appointing tribunal members. The petitioners argue that the Act re-introduces provisions that the Supreme Court had struck down in previous judgments. 

 

In the previous hearing on September 6th, Ramana CJI also observed that the Act revived provisions that had already been struck down. Rao J asked the Government why appointments were not being made in accordance with the Court’s rulings. 

 

 

Did the Union Bypass SC Recommendations

The Court heard three petitions (by Amit Sahni, Amarjit Bedi and the Delhi Bar Association) praying for the Union to immediately fill vacancies in various tribunals.

 

The hearing began with Ramana CJI stating that the Government did not follow the  recommendations of the Court’s Search-cum-Selection Committee (SCSC) while making appointments. He gave the example of recent appointments to the National Company Law Tribunal and the Income Tax Appellate Tribunal. The Government had made a majority of appointments to these tribunals from the SCSC’s waitlist, instead of going through all the names on the recommendation list first.

 

Rao and Chandrachud JJ pointed out a similar situation with appointments for the Telecom Disputes Settlement and Appellate Tribunal and the National Consumer Disputes Redressal Commission. Ramana CJI stated that there was no legal basis for ‘cherry-picking’ from the waitlist and ignoring the recommendation list. 

 

Attorney General (AG) K.K. Venugopal, appearing for the Union, argued that the Government has the ultimate power to make appointment decisions under s 3(7) of the Act.  Chandrachud J stated that s 3(7) was identical to a provision previously struck down by the Court. 

 

The provision that K.K. Venugopal and Chandrachud J are referring to states that the SCSC must recommend a list of two names for every vacancy. The Government has the power to appoint one of these names, ‘preferably’ within three months. While making the current set of recommendations to tribunals, the SCSC also created a waitlist for future use. 

 

AG Venugopal argued that the earlier judgment had struck down the requirement of 2 names per vacancy, and had made the three month period mandatory. However, the Union’s power to take a final decision on the SCSC’s recommendations was not affected by this judgment. Therefore, he argued that the ultimate decision making power given to the Union by s 3(7) included the power to make appointments from the waitlist instead of the recommendation list. 

 

Rao J said that the issue with the appointment decisions challenged before the Court was unrelated to s 3(7). He stated that this provision gave the Union the power to select from the SCSC’s recommendation list, not bypass them in favour of the waitlist.

 

Ramana CJI stated that there was no sanctity in recommendations if the Government ignored their suggestions at the last stage. He noted that the SCSC had taken enormous efforts to interview candidates across the country during the pandemic to make these recommendations. 

 

AG Venugopal argued that the Union had relied upon the waitlist only after considering all the recommendations of the SCSC. He gave examples of some individuals on the main list who had taken up other positions since the recommendations were made. Ramana CJI stated, in what seems to be a response to the AG’s examples, that those recommended cannot be expected to wait long periods for the Union to act. The recommendations were originally made one and a half years ago. He further stated that due to the delay, some of those recommended are already close to retirement age. They will only be able to serve short tenures, if appointed now. 

 

AG Venugopal stated that the Government was willing to reconsider all the recommendations made by the SCSC. He asked for one week’s time in order to fill all remaining vacancies. 

 

 

Arbitrary Retirement Clauses 

Ramana CJI brought up the issue of Justice A.I.S. Cheema’s early retirement from the NCLAT. The Union had retired Cheema J 10 days early, without giving reasons. A new chairman was immediately appointed in his place.  AG Venugopal was unaware of this issue, and said that he would respond after consulting with the Government. 

 

Senior Advocate Arvind Datar, appearing for the Madras Bar Association (one of the petitioners challenging the Act), highlighted a ‘disturbing trend’. In all recent appointment letters, the Government had included a clause stating that a member would serve ‘until the age of 67 years or four years or until further orders, whichever is earlier’. He argued that the phrase ‘until further orders’ allowed the Government to effectively force tribunal members to retire  without reason, as in Cheema J’s case. He stated that there was no legal basis for such a clause. 

 

AG Venugopal agreed. He stated that the clause should have read ‘until further orders from the Court’. He said that this would be fixed. 
 

 

Tribunal Vacancies Causing Distress to Litigants

The Court also heard the petition filed by the Madhya Pradesh Bar Council. This petition challenges the Union’s notification that transferred cases from the Debt Recovery Tribunal (DRT), Jabalpur to the DRT, Lucknow. This was done because the office of the Presiding Officer of DRT, Jabalpur is vacant. Chandrachud J commented that similar problems exist in other states. Ramana CJI pointed out that litigants from Telangana and Andhra Pradesh had to appear before DRT Calcutta.

 

Chandrachud J stated that this situation caused distress to litigants. They would have to travel to appear before tribunals. Additionally, he gave the example of situations where one tribunal had passed a detrimental order against a litigant, and the appeal lay with another tribunal. In such cases, if the appellate tribunal was inactive due to vacancies, the litigants would be left without a remedy. They also could not approach a High Court, since no High Court would be willing to encroach upon a tribunal’s jurisdiction. 

 

Chandrachud J brought up an order passed by the Kerala High Court in March 2021. The Kerala HC held that the Government cannot transfer cases from one state’s DRT to another. He pointed out that since the Kerala HC’s order has not been challenged, it remains in force across the country. 

 

 

National Tribunals Commission

Ramana CJI said that the Court has been discussing the need for an independent body for appointments since L. Chandra Kumar v Union of India (1997). In 2019 too, the Court ordered the establishment of a National Tribunals Commission. Until the Commission is set up, the Court had ordered that a separate wing be created in the Finance Ministry to handle appointments. Ramana CJI stated that the Government was taking no steps towards implementing the Court’s orders. 

 

AG Venugopal said that he would get responses from the Government with regard to setting up the Commission. 

 

The Court granted the Government two weeks to come up with a comprehensive plan for appointments. It also admitted Jairam Ramesh’s petition. The Government must file written statements in response to the challenges by the Madras Bar Association and Mr. Jairam Ramesh to the Tribunals Reforms Act, 2021.