Merger of Tribunals: Madras HC admits Petition by Madras Bar Association [Read Petition]

Madras High Court

The Madras High Court recently admitted a petition filed by the Madras Bar Association against the Central Government’s move to merge eight autonomous tribunals with other Tribunals.

Part XVI of the Finance Act, 2017 provides for structure and re-organisation of tribunals. The amended provisions, i.e, sections 157 to 189, provided amendments to certain Acts to provide for merger of tribunals and other authorities and conditions of service of chairpersons, members, etc. As per the provisions, the Government has the power to appoint and remove the members in another 17 such bodies.

Section 184 of the Act permits the central government to decide the terms of service including appointments, term of office, salaries and allowances, and removal of tribunal members through rules. Recently, the Government had notified Rules in exercise of the powers conferred on them under this section.

The petitioners, Madras Bar association in its petition, challenged the legality of Sections 156 to 189 of the Finance Act, 2017 and the Tribunal, Appellate and other Authorities (Qualifications, Experience and other conditions of Service of Members) Rules, 2017. The petition was heard by a Bench consisting Chief Justice Indira Banerjee and Justice M Sundar.

Senior Advocate, Arvind Datar appeared for the petitioner, submitted that the manner of passage of the Finance Act by styling it as ‘money bill’. The petitioner has also decried the disregard by the Central Government of the Supreme Court decisions in framing the Act and the Rules alleging that many of the provisions are in complete disdain of apex court’s decisions.

The Finance Act, 2017 was styled as money bill and passed by the Lok Sabha. Money Bills are those Bills, which exclusively contain provisions for imposition of taxes and appropriation of moneys out of the Consolidated Fund. Since, the Rajya Sabha can only suggest amendments to money bills, all suggestions made by Rajya Sabha regarding the Bill were junked by the Lok Sabha and the Act came into force on April 1, 2017. It was contended that Sections 156 to 189 of the impugned Act, which amend provisions relating to structuring and re-organisation of tribunals, are not matters relating to money bill and hence those matters could have been legislated only through separate legislations and bills and with the assent of Rajya Sabha.

“When the Constitution gives a special provision for passing a Money Bill, it implies that bills unconnected with matters mentioned in Article 110 cannot be labelled as Money Bills. Such a practice amounts to Fraud on the Constitution and is a colourable exercise of power. This is a repeated practice as evidenced by the passing of the Insolvency and Bankruptcy Code, 2016 and the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.

The Rules further run contrary to the directions which ought to be followed as guidelines regarding the structuring and organisation of Tribunals in India as was laid down by the Hon’ble Supreme Court in R. Gandhi.”

It was submitted that the Impugned Rules suffer from severe infirmities with regards to doctrine of separation of powers and the independence of the judiciary that forms part of the basic structure of the Constitution.

The petitioner, further challenged Rules 7 and 8, which provide that retired judges of High Court and Supreme Court, who are appointed to tribunals, can be removed by Central government after a departmental inquiry. According to them, the provision is harms Article 50 which provides for separation of judiciary from executive.

Further, the tenure of Presidents of all Tribunals have been reduced to three years, which according to the petitioner is in violation of the Supreme Court judgment in 2010 case of  Union of India vs R Gandhi.

The Court issued notice to the Government and posted the case for further hearing on June 27, 2017.

Read the Petition here.