bar & bench · new delhi, i i 000 i ... the armed forces act, 2007 xvii. the national green...
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IN THE HIGH COURT OF JUDICATURE AT MADRAS(SPECIAL ORIGINAL JURISDICTION)
WRIT PETITION NO. OF 2017Madras Bar Association lslfl .Hishcout Buirdine, ,{fdChennai-600 104Represented by its PresidentMr. Vijay Narayan . . ..Petitioner
Vs.
l. Union oflndiaMinistry of Finance(Department of Revenue)No. 137, North Block,New Delhi, I I 000 IRepresented by its Jt. Secretary
2. Union oflndia,Represented by its Secretary,Ministry of Law arld Justice4th Floor, A Wing,Rajendra Prasad RoadShastri Bhavan,New Delhi I l0 001
C*rmarcl, Vijay Narayan, s/o K.C. Mohan, Hindu aged about 6l years, having office at
Madras Bar Association, High Court, Chennai - 104 do hereby solemnly affinn
and state as follows
l. I am the President of the petitioner association and as such I am well
acquainted with the facts ofthe case
2. It is submitted that the present writ petitions are being filed under Article
226 ofthe Constitution oflndia seeking a writ ofdeclaration to declar€:
a) Part XIV of Chapter VI of the Finance Act,2017 more particularly
sections 156 to 189 which relate to 'Amendments To Certain Acts To
Provide For Merger Of Tribunals And Other Authorities And
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Conditions Of Service Of Chairpersons, Members, Etc.' as ltro vires
Articles I 4, 50 and I I 0 of the Constitution of India; and
b) the Tribunal, Appellate Tribunal and other Authorities (Qualifications,
Experience and other Conditions ofService of Members) Rules, 2017
terms of s 184 of the Finance Act, 2017, as void, defective and
unconstitutional, being violative of doctrines of separation of powers
and independence ofjudiciary which are parts ofthe basic structure of
the Constitution and furth contrary to the principles laid down by
the Hon'ble Supreme Court it Union of India v. R. Gandhi (2010) llSCC 1,
3. The present writ petition is being filed by the petitioner association, the
oldest Association of Lawyers in India, established in the year 1865. The
Petitioner is an association ofadvocates practicing in the Madras High Court
and its main objects are as follows:-
a. act as a professional watch guard and regulate the conducts of its
members in the Madras High Court and other High Courts;
b. take up the causes of the legal profession at large and protect the
independence of the judiciary;
make r€presentations to the public authorities regading judicialc
appointments and judicial services; and
d. act as an advisory body and assist the Govemment and other
Covemmental authorities
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fiamed by the I'i respondent v#e Notification dated 01.06.2017 in
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4. The association represents the interests of the judicial system and its
stakeholders and has successfully canvassed for the furtherance of these
objectives. The petitioner has, in the past, filed and pursued several
litigations against tribunalisation ofjustice, bureaucratisation ofjustice and
its impact on judicial independence and separation of powers, both before
the Hon'ble High Court and the Supreme Covt. It Union of India v. R.
Gandhi (2010) I I SCC l, the Hon'ble Supreme Court, in an appeal arising
out of a writ petition filed on behalf of the petitioner, struck down various
provisions of the Companies Act, 1956 relating to the National Company
Law Tribunal. h Madrus Bqr Association v. Union of India, (2014) l0 SCC
t, the Hon'bte Supreme Court, in aaother writ petition filed by the
petitioner, struck down the National Tax Tribunal Act,2009. Therefore, the
petitioner submits that it has the /ocus r/a,,di to maintain the present writ
petitlons
5. The ln respondent is the Union oflndia, represented through the Ministry of
Financa, Department of Revenue and is responsible for issuance of the
Tribunal, Appellate Tribunat and other Authorities (Qualifications,
Experience and other Conditions of Service of Members) Rules, 2017
("tmpugned Rules, 2017").
6. The 2"d respondent is also Union of tndia represented through the Ministry
of Law and Justice. As per various orders of the Supreme Court over the
years, all tribunals created pursuant to central and state legislations ought to
function under the 2nd respondent Ministry.
7. The genesis of the formulation of the lmpugned Rules, 2017 needs to be
stated for a better appreciation of the case at hand. The Finance Bill, 2017
was presented before the Lok Sabha on 01.02.2017. A Finance Bill is
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defined in Rule 219 of the Lok Sabha Rules of Procedure as 'the Bill
ordinarily introduced in each year to giye effect to the Jinsncial proposals of
the Governuent of Ltdia for the next following financial year std inchtdes a
Bill to give effect to supplementary fnancial proposals for any period'
However, in an unprecedented manner, the Finance Bill,2017, proposed
amendments to various acts, inter alia, aiming to reform a total of 2'7
tribunals. Ofthese, the Bill sought to shut dowr 8 tribunals by merging them
with the 19 remaining tribunals.
8. The Lok Sabha approved the Finance Bill, 2017 o122.03.2017 and further
certified the Bill as a 'money bill'. It is relevant to m€ntion here that Article
109(l) ofthe Constitution oflndia defines a 'Money Bill' as follows
"a Bill shall be deemed to be a Money Bill if it contains onl:)ptpy$fuu dealing with all or utry of the.following mattet's, na,nely-
(a) the irynsitio,t, abolition, rerlbsiot, elterdtion or regulotionof any tat(b) the regukttion of the borrovittg ol uoney or the giing o1a ) guaranke by the Goventment of hdia, or the snendmentof the lau, with respect to any financiol obligations unclerlskenor lo be undertaken by the Governnent of Indict:(c) the custody of the corsolilated Fund or the Contingenc,-Fund of htdict, the payuent of no,teys into or lhe witlttlrawal olmoneys fron ony such Fntd:(l) the appropriatior of mctneys out of the consolidated Fund o/lndkr;(e) the declaring of an7- etpenclihn'e to be expenditure chorgedon the Consolidated Fuul of lndia or the incrensing of lheonount oJ on,- such a;penditure;$ the receipt of monel- on account of the Consolidoted Fund ofIndia or the public account of India or the custody or ksue ofsuch money or the audit of the accotnls of the Union or of aStqte; or(g) any ntatter incidettol to q,V of the matters specilied in sub-clause (a) to l). " (emphasis added)
Hence, bills that exclusively contain provisions for the imposition and
abolition of taxes and the appropriation of moneys out of the Consolidated
Fund are certified as Money Bills.
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9. Since the Rajya Sabha can only recommend amendments to Money Bills,
the Lok Sabha rejected all such amendments proposed by the Rajya Sabha to
the Bitl and the same was sent to the President of India for his assent. Thus,
the Finance Act, 2017 came into effect fiom April l, 2017 after the President
granted assent to the Bill on March 31, 2017
10.[t is submitted that in what should essentially have been legislated through
separate legislalions and bills, and only with the assent of the Rajya Sabha,
the Finarce Act,2017 vide sections 156 to 189 of the Finance Act 2017
amended the provisions in relation to the snucturing and re-organisation of
the Tribunals. When the Constitution gives a special provision for passing a
Money Bill, it implies that bills unconnected with matters mentioned itr
Article Il0 ca rot be labelted as Money Bills. Such a practice amounts to
Aaud on the Constitution and is a colourable exercise of power. This is a
repeated practice as evidenced by the passing of the Insolvency and
Banknptcy Code, 2016 and the Aadhaar (Targeted Delivery of Financial
and Other Subsidies, Benefits and Services) Act,2016. The Supreme Court
llrz,d, it Krishnq Kumar Singh v. State of Bihar (2017) 3 SCC I, held that
abusing ordinance making power will be a fraud on the Constitution.
Likewise, deliberate use of Article 110 to ctcumvent the need of Rajya
Sabha approval will be a fraud on the Constitution. The Supreme Court
judgment cannot be nultified by an act of Padiament or by rules. This has
been laid down by a number of cases including Madqn Mohan Pathak v.
Union of India (197 8) 2 SCC 50. Thus, the money bill process was abused to
make amendments to the futrctioning of tribunals that were set up under the
following acts, many ofwhich are non-fiscal by nature:
i. The Industrial Disputes Act, 1947
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lt The lncome Tax Act, 196l
iii. The Customs Act, 1962
The Smugglers and Foreign Exchange Manipulators (Forfeiture of
Property) Act, 1976
The Administrative Tribunals Act, 1985
The Railway Claims Act, 1987
vll. The Secu ties and Exchange Board of India Ac! 1992
vt ll The Recovery of Debts due to Banks and Financial Institutions Act,
1993
tx The Airport Authority oflndia Act, 1994
The Telecom Regulatory Authority oftndia Act, 1997
xl. The Trade Marks Act, 1999
x[. The Companies Act, 2013
xiii. The Cinematograph Act, 1952
xlv. The Consumer Protection Act, 1986
The Eleclricity Act, 2003
xvl. The Armed Forces Act, 2007
xvii. The National Green Tribunal Act,20l0
I l.Further, 8 tribunals established by their parent acts have been merged with
such tribunals established under other acts. A list as per the table prescribed
in Schedule 9 ofthe Finance Act,20l7 is set out below:
The Employees Provident Fund Appellate Tribunal established under
the Employees Provident Fund Industrial Tribunal Funds and
Miscellaneous Proyisions Act, 1952 stands merged with the Industrial
Tribunal constituted by the Central Governnent under the Industrial
Disputes Act, 1947;
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stands merged with the lntellectual Property Appellate Board
constituted under the Trade Marks Act, 1999;
llt The Railway Rates Tribunal established under the Railways Act, 1989
has been merged with the Railway Claims Tribunal established under
the Railway Claims Tribunal Act, 1987;
The Appellate Tribunal for Foreign Exchange established under the
I.
vlt.
The Copyright Board established under the Copyright Act, 1957
Foreign Exchange Management Act, 1999 stands merged with the
Appellate Tribunal constitut€d under the Smugglers and Foreign
Exchange Manipulators (Forfeiture of Property) Act, 1976;
The National Highways Tribunal which was under the Control of
National Highways (Land and Traffic) Act,2002, stands merged with
the Atport Appellate Tribunal set up under the Airport Authority of
lndia Act, 1994;
Both the Cyber Appellate Tribunal set up under the Information
Technology Act, 2000 and the Atpons Economic Regulatory
Authority Appetlate Tribunal set up under the Atports Economic
Regulatory Authority of lndia Act, 2008 stands merged with the
Telecom Disputes Settlement and Appellate Tribunal under the
Telecom Regulatory Authority of India Act, 1997; and
The Competition Appellate Tribunal under the Competition Act, 2002
with the National Company Law Appellate Tribunal under the
Companies Act, 2013
12.The aforesaid amendments which deal with merging of a tribunal \rith
anotler have been carried out by substituting the said provision with the
following clause - for instance, section 160 (C) of the Finance Act, 2017
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dealing with the merger of the Copyright Board constituted under lhe
Copyrights Act, 1957 wi& the Intellectual Property Appellate Board
constituted under the Trade Marks Act, 1999, reads as follows:
" ) 1. The Appellate Board established under section 83 of the TradeMarks Act, 1999 shall, on and from the commencement ofPart XIV ofChapter YI of the Finqrce Act, 2017, be the Appellate Board lor thepurposes of this Act and the said Appellale Board shqll exercise thejurisdiction, powers and authority conferred on it by or under thisAct ".
Similar Ctauses were inserted with respect to the mergers of the other
l3.It is further submitted that apan fiom amending provisions in relation to the
restructuring and merging of the 8 tribunals, Part XIV of Chapter Vl of the
Finance Act, 2017 and more particularly s€ction 184 of the Finance Act,
2017 empowers the Central Govemment to make rules to provide for the
appointment, qualifications, terms of offrce and removal of Chairperson and
members of Tribunals which were generally prescribed under the relevant
legislation establishing such tribunals.
14. It is in pursuance to this section, the Central Government through the l"Respondent has issued the said Impugned Rules,2017 vide Notification
dated 01.06.2017 which is also sought to be challenged in the present Writ
Petitior.
l5.It is submitt€d 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 Rules
further run contrary to the directions which ought to be followed as
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tribunals set out in Paragraph l1 hereinabove.
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guidelines regarding th€ stnrcturing and organisation ofTribunals in India as
was laid down by the Hon'ble Supreme Cout in R. Gandhi (sryra).
16.The Hon'ble Supreme Court n R. Gandhi case (supra) had laid down the
following directions and mandated that the Govemment of India follow the
directions as guidelines while constituting the NCLT and NCLAT:
a. Only Judges and Advocates can be considered for appointrnent as
Judicial Members of the Tribunal. Only High Court Judges, or Judges
who have served in the raDk of a District Judge for at least five years
or a person who has practiced as a Lawyer for ten years can be
considered for appointment as a Judicial Member;
b. Persoos who have held a Croup A or equivalent post under the Central
or State Govemment with €xperience in the Indian Company Law
Service (Legal Branch) and lndian Legal Service (Grade-l) cannot be
considered for appointrnent as judicial members. The expertise in
Company Law service or lndian Legal service will at best enable them
to be considered for appointment as technical members;
c. As the NCLT takes over the functions of High Court, the members
should as nearly as possible have the same position and stalus as High
Court Judges. This can be achieve{ not by giving the satary and perks
of a High Court Judge to the members, but by ensuring that persons
who are as nearly equal in rank, experience or competence to High
Court Judges are appointed as members. Therefore, only officers who
are holding the ranks of Secretaries or Additional Secretaries alone
can be considered for appointment as Technical members.
d. A 'Technical Member' presupposes an experience in the freld to which
the Tribunal relates.
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e. Instead of a five-member Selection Committee with Chief Justice of
lndia (or his nominee) as Chairperson and two Secretaries from the
Ministry of Finance and Company Affairs and the Secretary in the
Ministry of Labour and Secretary in the Ministry of Law and Justice
as members, the Selection Committee should broadly be on the
following lines:
i. Chief Justice of India or his nominee - Chairperson (with a
casting vote);
ii. A senior Judge of the Supreme Court or Chief Justice of High
Court - Member;
iii. Secretary in the Ministry of Finance and Company Affairs -
Member; and
iv. Secretary in the Ministry of Law and Justice - Member
f. The term of office of three years shall be changed to a term of seven
or five years subject to eligibility for appointrnent for one more term.
This is because considerable time is required to achieve expertise in
the concemed field. A tenn of three years is very short and by the
time the members achieye the required knowledge, expertise and
efficiency, one term will be over. Further the said term of three years
with the retirement age of 65 years is perceived as having been tailor-
made for persons who have retired or shortly to retire and encourages
these Tribunals to be treated as post- retiement havens. If these
Tribunals are to function effectively and efficiently they should be
able to attract younger members who will have a reasonable period of
servlce
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l7.The above guidelines were given by the Hon'ble Supreme Court based on
the following principles as enumerated in para 44 of the saidjudgment :-
A legislature can enact a law tmnsfening the jurisdiction exercisedI
by courts in regard to any specified subject (other than those which
are vested in courts by express provisions of the Constitution) to
any tribunal.
Il. All courts are tribunals. Any tribunal to which any existing
lurisdiction of couns is transferred should also be a Judicial
Tribunal. This means that such Tribunal should have as members,
persons ofa rank, capacity and status as nearly as possible equal to
the rank, status and capacity of the coun which was till then
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dealing with such matters and the members of the Tribunal should
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g. Any person appointed as members should be prepared to totally
disassociate himself from the Executive.
h. To maintain independence and security in service, suspension of the
President/Chairman or member of a Tribunal can be only with the
concurrence of the Chief Justice of India.
i. The adrninistrative support for all Tribunals should be from the
Ministry of t aw & Justice. Neither the Tribunals nor its members
shall seek or be provided with facilities fiom the respectiye
sponsoring or parenl Ministries or concemed Department.
j. Two-Member Benches of the Tribunal should always have a judicial
member. Whenever any larger or special benches are constituted, the
number ofTechnical Members shall not exceed the Judicial Members.
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have the independence and security of tenure associated with
Judicial Tribunals.
ltl Whenever lhere is need for'Tribunals', there is no presumption
that there should be technical members in the Tribunals. When any
jurisdiction is shifted fiom courts to Tribunals, on the ground of
pendency and delay in courts, and the jurisdiction so kansferred
does not involve any technical aspects requidng the assistance of
expens, the Tribunals should normally have only judicial members
Only where the exercise of jurisdiction involves inquiry and
decisions into technical or special aspects, where presence of
technical members will be useful and necessary, Tribunals should
have technical members. lndiscriminate appointment of technical
members in all Tribunals will dilute and adversely affect the
independence of t}re Judiciary.
The Legislature can re-organize the jurisdictions of Judicial
Tribunals. For example, it can provide that a specified category of
cases tried by a higher court can be tried by a lower court or vice
versa (A standard example is the variation of pecuniary limits of
courts). Similarly while constituting Tribunals, the Legislature can
prescribe the qualifications/eligibility criteria. The same is however
subject to Judicial Review. If the coun in exercise of judicial
review is of the view that such tribunalisation would adversely
affect the independence ofjudiciary or the standards ofjudiciary,
the court may interfere to preserye the independence and standards
of judiciary. Such an exercise will be part of the chccks and
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balances measures to maintain the separation of powers and to
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prcvent any encroachment, intentional or unintentional, by either
the legislature or by the executive."
l8.It is submitted that even though the Hon'ble Supreme Court has prescribed
the various guidelines in the decision ofR. Gandil (supra) with regard to the
constitution of the NCLT and NCLAT, the same stands applicable to all the
tribunals in India. The Is respondent while framing the Impugned Rules'
2017 has not comptied with the same, and has gone on to prescribe rules
with regards to qualifications, appointrnents and removal of lhe members
including the President/Chairperson €tc., as the case may be, with total
disregard to such guidelines and settled constitutional principles. For the
purpose of easy reference, such provisions in the Impugned Rules, 2017
which suffer from severe infirmities and run in contrary to the decision of
the Hon'ble Supreme Court are set out below:
Rule 4 (2) - Method of recruitment
The Secretary to lhe Governuent of India in the Minisfi orDeparlment under which the Tribunal, Appellate Tribunal or, as thecqse may be, Authority is co stituted or established shall be theconvener of the Search-cum -Seleclion Committee.
Rule 7. Removal oJ Memberfrom oflice.
The Central Government uay, on the recommendation of a Committeeconstiluted by it in this behalf, remove from otftce any Member, who--(a) has been adjudged qs qn insolye t; or(b) has been co,tricted of an offence which, in the opirion of theCertral Government, inyolves ,noral turpitude; or(c) has become physically or menally incapable of acting as such aMember: or(d) has acquired nrch financial or other interest qs is likely to afectprejudicially his functions as a Member; or(e) has so abused his position as to render his continaance in offceprejudicial to the public interest:Provided that where a Member is proposed to be removed on anyground specified in clawes (b) to (e), the Member shall be informed
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of the charges against him and given an opportunily of being heard inres pect of t hose c harges :Provided further thot the Choirperson or member of the NationalCompany Appellate Tribunsl shall be removed from ofice inconsultation with the ChiefJustice of lndia.
Rule 8. Procedure for inquiry of mkbehsvior or incspaci1t of theMember.
(1) Il a written complailt is receieed by the Central Govemment,alleging any definite charge of mkbehavior or incapdcity to performthe functions of the offce in respect of a Chairmon, Vice-Choirman,Chairperson, Vke-Chairperson, President, Vice-President, PresidingOficer, Accountant Member, Administrative Member, JudiciqlMeuber, Expert Member, Law Member, Revenue Member, TechnicolMember or Member, the Ministry or Departmenl of the Governmentof India under which the Tribunal, Appellate ?ibunsl or, as the casemay be, Authoiry is constituted or established, shall make apreliminary scrutiny of such complaint.(2) If on preliminary scrutiny, the Ministry or Department of theGovemment of India under which the Tribunal, Appellate Tribunal or,as the cqse uay be, Authority is constituted or eslablished, is of theopinion thqt there are reasonable grounds for making an inquiry intothe lruth of any misbehqvior or incdpacity o/ a Chairman, Yice-Chairman, Chairperson, Vice-Chairperson, President, Vice-President, Presiding Wcer, Accountant Member, AdminislrqtiveMember, Judicial Member, Expert Member, Low Member, ReverueMeuber, Technical Member or Meuber, it shall make a reference tothe Committee constituled under rule 7 to conduct lhe inquiry.(3) The Committee shall complete the inquiry within such time or suchfurther lime as may be speciJied by the Centrql Government.(4) After the conchsion of the inquiry, the Committee shall submit itsreport to lhe Cenlrql Government stal@ therein its findfugs and theressons therelor on each of the charges separately with suchobservations on the whole cose as it maythinkfit.
Rule 20. Power to relor.
Where the Central Goverament is of the opinion that it is necessary orexpedient so to do, il may, by order for reosons to be recorded inwriting relqx any of the proisions of these rules with respec, to anyclass or category ofpersons.
l9.Reference may also be drawn to column (4) ofthe Schedule to the Impugned
Rules, wherein primacy has been given to the executive by including more
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members fiom the Central Covernmenl as compared to the Judiciary in the
Search cum Selection Committees that is to be constituted for all of the 19
Tribunals and Appellate Tribunals, which is directly contrary to the
guidelines prescribed by the Hon'ble Supreme Court in the case of rR.
Gandhi (supra)
20.Further reference may be drawn to column (5) of Schedule wherein the
Central Govemment has further reduced the term of office of all the
members including the Presidents etc., to 3 years which again runs contrary
to the aforementioned guidelines set out in the case of r1. Gandhi (Supra)
21.With regards to column (3) of the Schedule, the following Tribunals suffer
from glaring infirmities with respect to the Qualification and Appointment
of the Chairperson, President, Presiding Officer and members as the case
may be:
Tribunals in which a Nor-Judicial member may becomc th€
President/Presidinp OIIicer or Chairman etc:
(a)lndustrial Tdbunal constituted by the Cenral Goverrunent
under the lndustrial Disputes Act, 19,17; (b) 'Ihe Customs,
Excise an Service Tax Appellate Tribunal under the Customs
Act, 19621' (c) Appellate Tribunal under the Smugglers and
Foreign Exchange Manipulators (Forfeiture of Property) Act,
19'16: (d't Central Administrative Tribunal under the
Administrative Tribunal Act; (e) Railways Claim Tribunal
under the Railway Claims Tribunal Act, 1987; (f) Debt
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Recovery Tribunal and the Appellate Tribunal under the
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Recovery ofDebts Due to Banks and Financial lnstitutions Act,
1993; (g) Airport Appellate Tribunal under the Airpon
Authority of India Act, 1994; (h) Telecom Disputes Settl€ment
and App€llate Tribunal under the Telecom Regulatory
Authority of India Act, 1997; (i) Appellate Board under the
Trade Marks Act, 1999; (j) Authority for Advance Ruling
under the Income Tax Act, 1961; (k) Film Certiflcation
Appellate Tribunal under the Cinematogmph Act, 1952; (l)
National Consumer Disputes Redressal Commission under the
Consumer Protection Act, 1986; (m) Appellate Tribunal for
Electricity under the Electricity Act, 2003; (n) National Green
Tribunal under the National Green Tribunal Act, 2010
22.The Petitioner association is concemed about the independence ofjudicial
tribunals and seeks to protect the same and hence, is filing the present writ
petition under Article 226 of the Constitution of India as public interest
litigation.
23.1t is further submined that the Petitioner has not filed any other petition
seeking sirnilar relief before any High Court or this Courl. The petitioner has
diectly filed a petition under Article 226 of the Constitution as the
50. The right to life under Article 2l includes the right to justice by an
independent judiciary and by a Tribunat which is free from executive or
political inlluence. The Association is vitally concerned with the
administration ofjustice and maintenance of rule oflaw which has been held
to be pan ofthe basic structure ofthe Constitution
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impugned provisions and Rules are arbitrary and violative of A.rticle 14 and
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24.The glaring infirmities and consequences to the independent judicial
administration ofthe yarious tribunals and appellate tribunals has compelled
the present Petitionff association to file the present writ petition under
Article 226 of the Constitution of lndia on the following amongst other
grounds
GROUNDS
A. The Constitution of tndia distinguishes between an Ordinary Bill, a
Money Bill and a Financial Bill. A Money Bill as per Article 110(l) is a
Bill which contains ozly provisions dealing with all or any of the
following matters, namely-
(a) the imposition, abolition, remission, alteration or regulation of any
tax; (b) the regulation of the bo[owing of money or the giying of any
guarantee by the Goyemment of lndia, or the amendment ofthe law with
respect to any financial obligations undertaken or to be undertaken by the
Goyemment of lndiat (c) the custody of the consolidated Fund or the
Contingency Fund of India, the payment of moneys into or the
withdrawal of moneys from any such Fund; (d) the appropriation of
moneys out of the consolidated Fund of India; (e) the declaring of any
expenditure to be expenditure charged on the Consolidated Fund of India
or the increasing of the amount of any such expenditure; (f) the receipt of
money on account of the Consolidated Fund of lndia or the public
account of lndia or the custodv or issue of such monev or the audit of the
accounts ofthe Union or ofa State; or (g) any matter incidental to any of
the matt€rs specifred in sub-clause (a) to (0. In view of Article I l7(1), a
Bill which makes provisions for any ofthe abovementioned matters, and
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additionally with any other matter is called a Financial Bill. Therefore.
the Finance Bilt, 2017 may be a Money Bill if it deals only with the
matters specified above, and not with any other extran€ous matter as
otherwise it would be categorised as a Financial Bill
With regard to the Finance Bitl,2017, since the Rajya Sabha does not
possess co-ordinate power with Lok Sabha in case of a Money Bill, the
Lok Sabha has effectively bypassed the Rajya Sabha by voting the same
as a Money Bill, which in essence is a Financial Bill in light of the
various amendments carried out in addition to the matters specified in
Article I l0(1), and hence ceasing it to be a Money Bill.
ln other words, the Lok Sabha has firstty certified a Financial Bill as a
Money Bill and thereafter adopted the special procedure laid down for
Money Bills in Article 107 of the Constitution and effectively negating
any son of interference from the Rajya Sabha and Council ofStates
It is thus submitted that when proceedings which are tainted on
account of substantive illegality or unconstitutionality, the same cannot
be immune from judicial scrutiny and review. Since the Finance Bill,
2017 was wrongly voted as a Money Bitl despite the fact that it is not, the
passing of the Finance Bill, 2017 is illegal, invalid and a fraud on the
Constitutior
B. lt is submitted that by empowering the Central Govemment to frame
Rules in relation to the appointment, qualifrcation and removal and other
terms of seryices of members of tribunals, there is an excessiye
delegation of legislative functions without placing any guidelines and is
atso violatiye of Afiicles 14 and 50 of tle Constitution of India. As per
the parent legislations under which the Tribunals were established, any
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amendment with regards to the qualifications, appointments and removal
and other terms of service was to be carried out by the Parliament
However, in terms of section 184 of the Finance Act, the Parliament has
abdicated its authority by empowering the Central Govemment to fiame
new Rules and amend the same by way ofNotification. This amounts to
delegation of essential judicial functions that is unconstitutional. This
also amounts to the granting of an uncanalised power to the executive to
control vital bodies that perform, in essence, judicial functions. On this
ground, s 184 of the Finance Act, 2017 deserves to be shuck down on the
ground of Article l4 for arbitrariness as well
C. lt has been repeatedly held that a requircment ofplacing Rules framed by
the Executive before the Parliament indicates a check on excessive
delegation and in the absence of such a provision in the Finance Act and
the Impugned Rules, Section 184 ought to be struck down.
D. The present Finarce Act, 2017 insofar as it amends the structure and re-
organisation ofvarious Tribunals including the 19 Tribunals set out in the
Schedule of the lmpugned Rules, 2017 is unconstitutional and violalive
of the basic stucture of the Constitution. The impugned provisions and
the Impugned Rules,2017 violate the principles of separation of powers
which is nol only part of basic structure but also ar elementary
component of the rule of law. That it Kesavqnqnda Bharati v.. State ofKerala, AIR t973 SC 1461 ald, in Minerva Mills Ltd. v. Union of India,
(t980) 3 SCC 625, larger benches of this Hon'ble Coun have held,, inter
alia, that an independent judiciary and it's power ofjudicial review are
among the basic features ofthe Constitution.
Page No. 19No. of Correcrions
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E. A Constitution Bench in S. P. Saupath Kumar v. Union of lndia, (1987)
I SCC 124 at para 7, speaking through Bhagwati, CJ, has held that,
"It can no longer be disputed that total insulation of the judiciarylrom all forns of interference from the co-ordinate branches of theGovernment is q basic essentiql feature of the Constitution, thesame independence lrom possibility of Executive pressure orinfluence must also be ensured to the Chairmdn, vice Chairmanand Members of the Adninistratiye Tribunols... The Constin onmqkers hqye made atuious provision to secure total independenceof the judiciary from executive pressure or influence."
the constihrtional scheme of separation of powers can be €asily and
seriously undermined, if the legislatures were to entrust the Tribunals
with Members not being Members of the 'Judicial service' of the State
as they are not entitled to protection similar to the constitutional
F. That if the constitutional Scheme and intent are to be preserved, it must
be held that the 'total insulation ofthe judiciary' referred to in the case of
S. P. Sampath Kumar v. Union of India, (1987) I SCC 124 is not just for
the 'judiciary' comprising ofJudges appointed to the regular Courts. The
'judiciary' in this context must be undeNtood as taking within its fotd, all
courts and Tribunals and other adjudicatory bodies, whatever be the label
assigned to them. The independence and impartiality which are essential
for the proper exercise of the judicial power, are to be secued not only
for the Courts but also for Tribunals and their members, who, though
they do rot belong to the 'Judicial Service' are entrusted with judicial
powers. Any other view would effectively eviscerate the constitutional
guarantee ofan independent Judicial Branch.
Page No. 20No. of Conecrions
That the constitutional guamntee of an independent judicial branch and
protection afforded to the Courts.
Bar & Bench
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G. It is submitted that the safeguards which ensure independence and
impa.rtiality are not for promoting personal prestige of the functionary but
for preserving and protecting the rights ofthe citizens and others who are
subject to the jurisdiction of the Tribunal, and for ensuring that such
Tribunals will be abl€ to command the confrdence ofthe public.
H. It is further submitted that several safeguards to protect the independence
of the judiciary mentioned in n. Gandhi (*pn) have not been followed.
Reference may be drawn to column (4) of the Schedule to the Impugned
Rules, wherein primacy has been given to the executiye by including
more members from the Central Govemment as compared to the
Judiciary in the Search cum Selection Committees in all of the t9
Tribunals and Appellate Tribunals. As per the guidelines prescribed by
&e Hon'ble Supreme Court in the case of R.Gqndhi (Supra), the Search-
cum-Selection Cormittee must be comprised of only 5 members viz.
ChiefJustice of lndia or his nominee - Chairperson (with a casting vote);
A senior Judge of the Supreme Court or Chief Justice of High Court -Member; Secretary in the Ministry of Finance and Company Affairs -
Member; and Secretary in the Ministry of Law and Justice - Member.
I. The Hon'ble Supreme Court had laid down that when judicial powers are
transfened from the Courls to Tribunals, the standard of the Tribunals
should approximately be the same as that of the Courts. The Impugned
Rules relating to fte appointmont of the Members are in viotation of this
principle laid do*n by this Court. It is shocking that the lmpugned Rules,
2017 r]rJt only provides for a Non-Judicial Member to become a
Cha@erson or President of a Tribunal, further, there is no requirement
for an appoinbnent ofa Judicial Member in many of the Tribunals whichPage No. 2lNo. of Conections
Bar & Bench
runs dircctly contmry to various decisions of the Hon'ble Supreme Court
and High Courts in India.
J. ln several Tribunals, as per the parent act under which it v/as established,
the removal of any member cannot be made unless there is an inqutry by
a Judge of the Supreme Court and any removal of a member ought to
have the concurrence of the Chief Juslice of India. Shockingly' the
removal procedure under Rule 7 and 8 of the said Rules now
contemplates an inquiry by a committee formed by the parent ministry
under which the Tribunal functions and based on the findings and
recommendation of such inquiry committee, the Central Govemment has
the right to remove the member from the Tribunal. This effectively would
mean, a High Court Judge who is a Chairperson or Vice President of the
Tribunal can be removed by the Central Govemment aft€r an inqutry by
the parent ministry which is a complete breach of Article 50 which
emphasizes that the State shall take steps to separate the judiciary from
the executive in the public services ofthe State.
K. Article 50 of the Constitution is part of the basic structure of the
Constitution, and is one example of a specific constitutional provision
embodying the basic features of separation of powers and rule of law.
The Impugned Rules directly encroach into these basic features and
derogate fiom the same by vesting unbridled powers in the Executiye
while constituting and fxing the terms and conditions of members in the
judicial bodies such as the tribunals listed out in the Schedule to the
Impugned Rules. For instance, the leave sanctioning authority in case of
the Chairperson vests with the Ceutral Govemment. Similarly, the final
deciding authority over the terms and conditions of service for the Board
Page No. 22No. of Corrections
Bar & Bench
vests with the Cenfal Governrnent, thereby predominating the Executive
involvement in the functioning ofan adjudicatory body.
L. ln merging of various tribunals with one another, for instance, the
M. That under the lmpugned Rules, the administratiye assistance and support
to all the tribunals is to be provided by the parent ministry. This is
dircctly contrary to the guidelines prescribed by the Hon'ble Supreme
Court in the case of R. Gundhi (s,Jpra), wherein this Cout had
categorically held that the administrative support has to come from the
25.The petitioner craves leave ofthis Hon'ble Court to raise additional grounds
at the time of hearing.
26.The petitioner has not filed any other writ p€tition or any other legal
proceedings seeking the reliefs claimed in the pr€sent writ petition. The
petitioner has no altemative or efficacious remedy except to invoke the writ
jurisdiction of this Hon'ble Court under Article 226 of the Constitution of
India. The petitioner is self-funded in the filing and the conduct of this writ
petition. To the best of the petitioner's knowledge, no other writ petition has
been field for these reliefs
Page No. 23No. of Correcrions
Airports Economic Regulatory Authority Appellate Tribunal and the
Cyber Appellate Tribunal with the Telecom Dispute Settlement and
Appellate Tribunal, the qualifications prescribed in the Impugned Rules,
for appointnent of members of the Telecom Dispute Settlem€nt and
Appellate Tribunal does not require a member to possess an expertise on
cyber laws which is contrary to the obs€rvation by the Supreme Court
that a Technical Member shall be an expert in the held of the Tribunal.
Department of Law & Justice.
Bar & Bench
27.The petitioner has a prima facie case as the effect of sections 156 to 189 of
the Finance Act,20l'1 as well as the Impugned Rule, 2017 are against the
very essence of the principles of judicial independence and separation of
powers that not only does the Central Govemment holds primacy in the
appointnent of memben of such Tribunals but persons with no judicial
experience or formal training in law are statutorily envisaged to adjudicate
on issues of law. Post the judgment of the Hon'ble Supreme Court in the
case ofn. Gandhi (Supra), there is no justif,cation whatsoever to continue
such practice.
28.It is further submitted that irreparable hardship will be caused to the vast
number of litigants if the members of the Tribunals, appointcd in accordaace
to the Impugned Rules, 2017 which have been fiamed in the most
constitutionally improper manner, are permitted to adjudicate on issues
involving complicated questions of law and worth crores in terms of
frnancial stakes.
29.The Petitioner therefore submits that the operation of sections 156 to 189 of
the Finance Act,2017 and the Impugned Rules,2017 must be immediately
stayed failing which irreparable loss, grave prejudice and irreversible
hardship would be caused to all the Litigants who are before such Tribunals.
30.It is therefore prayed that this Hon'ble Court may be pleased to pass an order1' of stay of the operation of the Part XIV of Chaptff VI of the Finance Act,
2017 more particularly sections 156 to 189 ofthe Finance Act, 2017 pending
disposal of the present Writ Petition and pass such further orders as this
Hon'ble may deem fit and necessary in the facts and circumstances of the
case and thus render justice.
T\\L\pt1
Page No. 24No. of Conections
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Bar & Bench
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3l.It is therefore prayed that this Hon'ble Court may be pleased to pass an order
of stay of the operation of 'The Tribunal, Appellate Tribunal and other
Authorities (Qualifications, Experience and other Conditions of Service of
iaMembers) Rules, 2017' framed by the ls Respondent vide Notification dated
01.06.2017, in temrc of section 184 of the Finance Act, 2017 pending
disposal of the present Writ Petition and pass such further orders as this
Hon'ble may deem fit and necessary in the facts and circumstances of the
case and thus render justice.
32.It is therefore prayed that this Hon'ble Court may be pleased to issue any
Writ, order or direction more particularly in lhe nature of a Writ of
declaration to declare Part xIV ofcbapter VI of the Finance Act, 2017 more
particularly sections 156 to t89 which relate to the 'Amendments To Certain
.ro
r7Acts To Provide For Merger Of Tribunals And Other Authorities And
Conditions Of Service Of Chairpersons, Members, Etc.' as ultrq vires
Article, 14, 50 and I l0 ofthe Constitution of India and pass such fufiher or
other orders as this Hon'ble Court may deem fit and necessary in the facts
and circumstances ofthe case and thus renderjustice.
33.1t is therefore prayed that this Hon'ble Coun may be pleased to issue any
t'?
Writ, order or direction more particularly in the nature of a Writ of
declaration to declare the consequential Rules vrz. '*" f.i5.nal, Appellate
Tribunal and other Authorities (Qualifications, Experience and other
Conditions of Service of Members) Rules, 2017' framed by the l'l
Respondent vrde Notification dated 01.06.2017, in terms of section 184 of
the Finance Act, 2017 as void, defective and unconstitutional, being
violative of the doctrine of separation of powers and independence of
judiciary which are parts of the basic structure of fte Constitution and
Page No. 25No. of Couecrions
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further contmry to the principles taid down by the Hon'ble Supreme Court in
Union of India v R. Gandhi, (2010) I 1 SCC I and pass such further or other
orders as this Hon'ble Court may deem fit and necessary in the facts and
circumstances ofthe case and thus render justice.
Solemnly aflirmed at Chennai on
this 14&r of June, 2017 and
signed his trame in my presence. ADVOCATE. CHENNAI
Page No. 26No. ofCorrecuons
Ira
BEFORE ME
Bar & Bench
Ata.
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IN THE HIGH COURT OFJUDICATURE AT MADRAS(SPECTAL ORIGINAL
JURISDICTION)w.P. NO. -OF 2017
rsryy
Madras Bar Association
...Petitioner
Vs.
l.Union oflndia,Ministry of Finance.
2. Union oflndia,Represented by its Secretary.
Respondents
Co*" n AFFronr' r'i-
COUNSEL FOR THE, PETITIONER
M.V. SWAROOP
H.S. HREDAI
V. PRASHANTH KRIAN
RAHUL UNNIKRISHNAN
Bar & Bench