Tribunals Reforms (Rationalisation And Conditions Of Service) Bill, 2021

KEY TAKEAWAYS

• The tribunals were added into the Constitution through 42nd Constitutional Amendment under Articles 323A and 323B of the Constitution.
• The Tribunal Reforms Bill seeks to replace a similar ordinance passed in April and amends the Finance Act.
• Amendments were sought after the judgment of the Supreme Court in Madras Bar Association v. Union of India.
• One of the major changes bought by the bill is abolition and merger of several tribunals.
• The Bill also dissolved appellate authorities under several Acts and transferred the power to HCs.
• It also deals with the appointment, tenure, and required age limit of the chairpersons and members of the tribunals.
• Search-cum-selection Committees constituted under the Bill will play an important role in appointment of chairpersons and members to the tribunals.

INTRODUCTION

In the Indian judicial system, the power to adjudicate disputes is vested with the courts of India and there is a network of civil, criminal and appellate courts in the country that provides for the resolution of all kinds of disputes but with the increasing number of cases, complexities of the court system, lengthy and formal procedures and backlog of cases, the country has adopted an alternate method to solve disputes, which are through tribunals.

The 42nd Constitutional Amendment brought tribunals for administration and other purposes within Articles 323A and 323B of the Constitution and they are governed by the Administrative Tribunal Act. The word tribunal is not defined under the Act or any court decision but it is clear that they are not the same as the courts. Tribunals are called quasi-judicial bodies that perform judicial functions and are invested with judicial powers.

India has several tribunals such as the National Green Tribunal Act, 2010 the National Company Law Appellate Tribunal (NCLAT) under Section 410 of the Companies Act, 2013, other appellate tribunals under the Copyright Act, Airport Authority of India Act, the Trademark Act, etc., but recently the Government has been trying to abolish some of these tribunals and restrict their number in the country. The recently passed Tribunals Reforms Bill 2021 provides for the abolition of several tribunals and also attempts to change their composition and working scheme.

BACKGROUND

In March 2017, the Government passed the Finance Act that aimed to reorganize the tribunal system by merging tribunals and the number of tribunals was reduced from 26 to 19. The Finance Act empowered the Central Government to notify rules on qualification of tribunal members, terms and conditions of their services, tenure of the services, appointment, salaries, allowances, etc. The Act also laid down the formation of Search-cum-selection Committees that recommended the members to tribunals.

In 2019, under a petition filed by Union Minister MP Jairam Ramesh, a Constitutional bench of Supreme Court led by the then Chief Justice of India, RanjanGogoi struck down the rules formed under this Act. The Court directed the Government to reformulate the rules stating that the rules were contrary to the parent Act.

While the Tribunals Reforms Bill was pending in the Lok Sabha, in February 2021 an ordinance with similar provisions was passed in April 2021 that amended the Finance Act as ordered by the Supreme Court in 2019.

The amendments made by these rules were challenged before the Supreme Court by the Madras Bar Association. The petition challenged Sections 184 and 186 of the amended Finance Act that mentioned the eligible age as 50 for the appointment of members of a tribunal, house rent allowance, Selection Committee, and tenure of chairperson and members.

The Supreme Court set aside the challenge provision on the ground that they were violative of previous guidelines of the Court.

Finance Minister Nirmala Sitharaman introduced the Tribunals Reforms Bill on August 1st, 2021 that sought to replace the Ordinance passed in April. The Bill was passed in the LokSabha by voice vote without any debate on 3rd August amidst the opposition demanding further discussion.

CHANGES MADE BY THE BILL

• Abolition of appellate bodies and transfer of functions

The Tribunals Reforms Bill abolished many tribunals and appellate authorities that were unable to do their work and had become a burden on the Government. Major changes were made in the following authorities:

The Cinematograph Act, 1952: Appellate Tribunal under this Act had the role of adjudication of appeals against the board of Film Certification. The new Bill dissolves the Appellate Tribunal and the power to hear appeals is transferred to respective High Courts.

The Copyright Act, 1957: Appellate Board under this Act had the power to adjudicate disputes and appeals against orders of the Registrar of Copyright and after the passing of the new Bill, the tribunal will stand dissolved, and the power to hear appeals and adjudicate disputes will be transferred to Commercial Court or the Commercial Division of a High Court.

The Patent Act, 1970: The Appellate Board under this Act had the power to adjudicate appeals against the decision of Controller in matters like application and restoration of patents. Under the new Bill, the power of the board will be transferred to the respective High Court.

The Trademarks Act, 1999 and The Geographical Indications of Goods (Registration and Protection) Act, 1999: The adjudication power of Appellate Board to hear appeals against the orders of the Registrar under these Acts are transferred to respective High Court under the new Bill as the board stands dissolved.

Above mentioned Acts that went through changes dealt with intellectual property rights. The new Bill makes certain changes to other acts also such as:

The Customs Act, 1962: Authority of advance rulings under this Act had the power to hear appeals against orders of the Customs Authority for advance rulings but with the new Tribunals Reforms Bill, the authority stands dissolved and is substituted by the respective High Courts.

The Airport Authority of India Act, 1994: The Appellate Tribunal under the Act stands dissolved and the disputes regarding the disposal of properties left on the airport by unauthorized people will be adjudicated by the Central Government whereas the appeals against the orders of eviction from the airport will be heard by the High Courts.

• Finance Act

Under the Finance Act, 2017, the previous rules specified tenure of four years for the office of members, and the Tribunals Reforms Act has amended the 2017 Act but the tenure of the members is still four years. The upper age limit for the Chairperson is 70 years and for the members is 67 years which will be considered during calculating the tenure and it also the provisions of re-appointment.

It should also be noted that the new Bill brings the National Consumer Disputes Redressal Commission (NCDRC) established under the Consumer Protection Act, 2019 within the purview of the Finance Act, 2017.

• Search-cum-selection committees

Earlier in 2017, the Finance Act mentioned that the members and Chairpersons of a tribunal will be appointed by the Government on the recommendation of the Search-cum-Selection Committees but there were no specifications as to who will constitute the Committees.

The Tribunals Reforms Bill amends the Finance Act and specifies that the Committees will consist of:

i. In the case of Search-cum-Selection Committees for tribunals other than State Administrative Tribunals, the Committee will have its chairperson as the Chief Justice of India or any other judge of the Supreme Court nominated by the CJI.
ii. In the case of Search-cum-Selection Committees of State Administrative Tribunals, the chairperson will be Chief Justice of the High Court of the concerned state.
iii. There will be 2 secretaries nominated by the Central Government.
a. Sitting or outgoing Chairperson, or a retired Supreme Court or High Court judge.
b. Secretary of the ministry under which the concerned tribunal is constituted.

KEY ISSUES WITH THE BILL

Even though the Tribunals Reforms Bill, 2021 sought to replace the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 passed in April 2021, it still suffers from the same flaws which the Supreme Court pointed out in Madras Bar Association v. Union of India.

• Term of presiding officers and members of the tribunal

The Supreme Court in the Madras Bar Association case set aside the provision that fixed the tenure of tribunal members to 4 years because it was violative of earlier judgements of the same court and violated the principles of separation of powers, independence of the judiciary. The new Bill ignores the order of the Apex Court and maintains the term of the members and chairpersons to be 4 years which is against the SC judgment.

• Minimum age requirement of 50 years for appointment as a member

The Apex Court, while giving its verdict in the same case, stated that setting up the minimum age as 50 for the appointment as Chairperson or members will prevent the individuals who have experience of 10 years from holding the position and therefore it is violative of Article 14 of the Constitution and rule lo law. But even after the Court struck down this provision, proviso to Section 3 of the new Bill still finds 50 years as the minimum required age for appointment to tribunals.

CONCLUSION

The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021 can be considered as a special law that is enacted by the Parliament to regulate the numbers and working of tribunals in the country. The tribunals were formed with the aim to reduce the burden on the courts but the Government studies have found that many existing tribunals are redundant and do not provide speedy delivery of justice which is their aim and they are rather a burden on the Government's funds. Therefore, through this new Bill, the Government has abolished and merged several tribunals to limit their numbers and reduce the burden on the exchequer of the Government.
The changes made under the Bill have dissolved many appellate tribunals and the power to hear appeals is transferred to the High Courts. This can lead to a burden on the Courts as they have to entertain appeals not only from Civil and Criminal Courts but also from the disputed parties under various Acts and it will be contrary to the aim for which the tribunals were established in the first place.

The final draft of the tribunal reforms was passed on 3rd August 2021 but the Government has been trying to implement these rules since 2017. They were challenged before the Supreme Court several times through petitions and the Court has given its verdict by setting aside and striking down a few of the provisions but the new Bill has still kept the provisions that were struck down by the Court and interfered with the basic principles of the Constitution.