TRIBUNALIZATION OF JUSTICE

Tribunal- meaning, definition

• quasi-judicial bodies
• established for discharging adjudicatory duties
that do not fit neatly within the traditional judicial
system
• term “Tribunal” etymologically derived from
“Tribunes,” meaning “Magistrates of the Classical
Roman Republic,” who historically protected
plebeian citizens (commoners) from arbitrary
action by patrician (aristrocracy) magistrates
• I.P. Massey - “Tribunal” used in a special sense, refers to
adjudicatory bodies outside sphere of ordinary Courts of
law
• stand somewhere midway between a Court and an
administrative body
• Durga Shankar Mehta v. Raghuraj Singh (AIR 1954 SC 520):
“The expression Tribunal as used in Article 136 does not mean
the same thing as court but includes, within its ambit all
adjudicating bodies, provided they are constituted by States
and are invested with judicial functions as distinguished from
administrative or executive functions.”
 Wade’s test
A tribunal must have following characteristics

• Constituted by Act of Parliament or Legislature

• Decisions are judicial rather than administrative
• The tribunal reaches a finding of fact, applies law to
fact, and decides legal questions objectively and not
on the basis of executive policy
• Tribunals are independent and not subject to
administrative interference
Critical Test: A tribunal is an adjudicating authority, but
the power of adjudication does not ipso facto make a
body a tribunal. Essentially, such power of adjudication
must be derived from statute and not from agreement
between parties.
 Tribunals v. other bodies
• Tribunals vs. Domestic Tribunals: A “domestic
tribunal” refers to administrative agencies that
regulate professional conduct, enforce discipline
among members such as BCI
• Tribunals vs. Courts: Tribunals exercise judicial powers
similar to courts, not bound by strict procedures and
evidence rules of CPC and IEA. Yet they must observe
principles of natural justice.
• Tribunals vs. Administrative Bodies: Unlike purely
administrative bodies such as RBI, SEBI, TRAI, tribunals
must exercise their powers judicially, objectively, and
without bias, free from executive policy
considerations.
 NEED FOR TRIBUNALS IN INDIA
a. Lex dilationes semper exhorret meaning, “The law always
abhors delays”became the guiding principle for tribunal
establishment.
b. Expansion of State Activities and Welfare State: state became
vigorous, affecting every person in every sphere of life; subjected
everyday lives to administrative control and management
According to M.P. Jain (Principles of Administrative Law), these
tribunals became necessary concomitants of the welfare state,
though arbitrariness in their functioning could destroy the very
concept of a welfare state
c. Technical Complexity and Need for Specialized Knowledge:
Industrial disputes, Revenue matters, tax disputes, and
environmental questions
d. Traditional Judicial System is slow, costly, technically complex,
rigid, overburdened
Associated Cement Co. Ltd. v. P.N. Sharma (AIR
1965 SC 1595):
- Established the “trappings of court” test for
quasi-judicial functions.
- A tribunal may possess some but not all
“trappings of the court.”
- From a functional point of view, an administrative
tribunal is neither exclusively judicial nor
exclusively administrative but is somewhere
between the two.
 EMERGENCE OF TRIBUNALS IN INDIA
Pre-Constitutional Era: Income Tax Appellate
Tribunal (1941)

• 1st tribunal- was Income Tax Appellate Tribunal (ITAT),

established in 1941, under S. 5A of IT Act, 1922.
• known as the “Mother Tribunal” of India, pioneering
the tribunalization process and drawing inspiration
from its motto: “Nishpaksh Sulabh Satvar Nyay”
(Impartial, Easy and Speedy Justice).
• success of ITAT prompted the Government of India to
constitute similar tribunals for indirect taxes (CESTAT),
Central Administrative matters (CAT), Railway Claims,
etc.
 Law Commission Recommendations
• 14th Report (1958) titled Reform of Judicial
Administration: Recommended the
establishment of appellate tribunals at the
Centre and in the States.
• 58th Report (1974) titled Structure and
Jurisdiction of the Higher Judiciary: Urged that
separate high-powered tribunals should be set
up to deal with service matters, with
approaching the courts as a last resort.
 Swaran Singh Committee (1976) and
Constitutional Amendment
Studied “the required changes in fundamental laws,” and
recommended:
• Administrative Tribunals may be set up under a Central law,
both at the State level and at the Centre to decide cases
relating to service conditions
• An All-India Labour Appellate Tribunal should decide
appeals from Labour Courts and Industrial Tribunals
• Disputes relating to revenue, land reforms, ceiling on
urban property, procurement and distribution of food
grains should be decided by tribunals
• Decisions of tribunals should be subject to scrutiny by the
Supreme Court under Art. 136
Based on the Swaran Singh Committee recommendations,
Part XIV-A titled “Tribunals” was added to the Constitution,
introducing Articles 323-A and 323-B
 CONSTITUTIONAL PROVISIONS : Art.
323A [Administrative Tribunals]
It empowers Parliament exclusively to provide for the
adjudication or trial by administrative tribunals of
disputes and complaints with respect to recruitment and
conditions of service of persons appointed to public
services and posts in connection with affairs of:
• The Union
• Any State
• Any local or other authority within India
• Under control of Government of India
• Any corporation owned or controlled by the
Government
Sub-clause (2) provides that a law under Article 323-A
may:
• Provide for establishment of an administrative tribunal
for Union and a separate administrative tribunal for
each State or for two or more States
• Specify jurisdiction, powers (including power to punish
for contempt), and authority of tribunals
• Provide for procedure (including provisions on
limitation and rules of evidence)
• Exclude jurisdiction of all courts, except jurisdiction of
Supreme Court under Article 136
• Provide for transfer to tribunals of any cases pending
before courts that would have fallen within their
jurisdiction
 Tribunals under Article 323A

Nature & Establishment

• Specifically designed for service disputes of civil servants, armed
forces personnel, and similar employees.
• Established solely by Parliament through legislation (e.g., the
Administrative Tribunals Act, 1985).
• Parliament enacts detailed rules on jurisdiction, procedures, and
powers.
Examples
• Central Administrative Tribunal (CAT) – for central government
employees.
• State Administrative Tribunals – for state government employees.
Key Features
• Centralized, uniform jurisdiction over service disputes.
• No hierarchy of tribunals—single-tier structure per jurisdiction.
 Article 323-B: Tribunals for Other
Matters
empowers both Parliament and State Legislatures (within their respective legislative
competence) to provide for adjudication or trial by tribunals of any disputes,
complaints, or offences with respect to:
• Taxation
• Foreign Exchange and Export
• Industrial and Labour Disputes
• Production, Procurement, Supply and Distribution
• Rent and Tenancy
• Elections
• Land Reforms
• Urban Property
• Other specified matters

Sub-clause (3) permits establishment of a hierarchy of tribunals (unlike Article 323-A,

which permits only one tribunal per Centre and State). But this also
 Tribunals under Article 323B

Nature & Establishment

• For specialized administrative and economic matters like taxation, land
reforms, land acquisition, elections, etc.
• Both Parliament and State Legislatures have power to enact such tribunals
depending on the matter and jurisdiction.
• Tribunals created by statutes for specific sectors, often with sectoral
expertise.
Examples
• Income Tax Appellate Tribunal (ITAT),
• Labour Tribunals,
• Land Acquisition Tribunals.
Key Features
• Hierarchical structures are common, with appellate levels.
• Jurisdiction extends across sectors; suitable for complex social/economic
issues.
 Tribunals Created via Other
Mechanisms (Outside 323A & 323B)
Nature & Establishment
• Created directly by specific statutes or executive orders for specialized purposes.
• Not necessarily based on the constitutional articles but by enabling legislation (e.g.,
Armed Forces Tribunal, Competition Appellate Tribunal, National Green Tribunal).
Examples
• Armed Forces Tribunal (AFT) – for military personnel service issues.
• National Green Tribunal (NGT) – for environmental disputes.
• Cyber Appellate Tribunal, Intellectual Property Appellate Board, etc.
Key Features
• Usually created by Parliament under specific statutes rather than Art.s 323A or 323B.
• Might not explicitly have constitutional backing of Art. 323A/323B but operate as
specialized adjudication bodies.
• Their jurisdiction and powers are defined by enabling statute, sometimes with
limited judicial review or own appeal mechanism.
 Why Only Parliament for Article 323A
and both for 323B?
The Constitution reserves Art. 323A jurisdiction to Parliament
alone because:
• Service matters are fundamental to the Union and all States
uniformly
• ensures uniform service standards nationwide, vital for
stability of the civil service and administrative discipline.
• Uniformity in employment law requires one central statute,
not separate state legislation
The matters listed in 323B (e.g., taxation, industrial disputes,
land reforms, elections, foodstuffs, rent, etc.) often fall under
both Union and State legislative competence, or the
Concurrent List.
 S.P. Sampath Kumar v. Union of India
(1987 SCC 124, 1987 ILLJ 128 SC)
Challenge to the constitutional validity of Art. 323-A
(read with Administrative Tribunals Act, 1985)Se,
ction 28 of the Administrative Tribunals Act, 1985,
which excluded High Court jurisdiction
• Issues:
1. Whether removing High Court jurisdiction in
service matters and granting exclusive
jurisdiction to Administrative Tribunals (except
Supreme Court) was constitutionally valid
2. Whether tribunal structure and appointment
procedures had constitutional validity
The Supreme Court upheld the constitutional validity of Article 323-A
and the Administrative Tribunals Act, 1985, but with important
conditions:

• Judicial Review as Basic Feature: essential and unalterable citing Minerva

Mills v. Union of India, 1986
• “Effective Alternative Mechanism” Test: If a law enacted under Article
323-A excludes the High Court’s jurisdiction under Articles 226 and 227, it
must establish an effective alternative mechanism for judicial review.
Failing to do so would render such law violative of the Constitution’s basic
structure.
• Substitution Standard: Tribunals must be “effective and efficacious
substitution for the High Court” in their respective spheres. They must
retain “basic judicial character so as to inspire public confidence.”
• Tribunal Independence: The independence of the Chairman,
Vice-Chairman, and Members of Administrative Tribunals must be
safeguarded from executive interference.
• Authority to Test Constitutional Validity: Tribunals have the power to
examine the constitutionality of an enactment or rule concerning matters
within their jurisdiction, including violations of Articles 14, 15, and 16.

Legacy: This judgment validated tribunalization while emphasizing the

non-negotiable importance of judicial review and institutional independence.
 L. Chandra Kumar v. Union of India
(AIR 1997 SC 1125)
• Facts: Multiple special leave petitions, civil
appeals, and writ petitions challenging the
constitutional validity of Articles 323-A(2)(d) and
323-B(3)(d) of the Constitution and Section 28 of
the Administrative Tribunals Act, 1985.
• Central issue: whether provisions that totally
excluded High Court jurisdiction under Articles
226/227 and Supreme Court jurisdiction under
Article 32 were constitutionally permissible.
 Major Issues:

• Whether exclusion of High Court jurisdiction

through Art.s 323-A(2)(d) and 323-B(3)(d) was
against doctrine of judicial review, a basic
feature of the Constitution
• Whether tribunals constituted under Art.
323-A or 323-B could test the constitutional
validity of statutory rules or provisions
• Whether the exclusion of court jurisdiction in
toto violated basic structure doctrine
 The Court took a nuanced position, both upholding tribunalization while
preserving judicial review.

• Judicial Review as Inviolable: The power of judicial review vested in the

High Courts under Arts. 226/227 and the Supreme Court under Article 32
is integral and essential to the basic structure of the Constitution. This
was characterized as the soul of the Constitution (invoking
Dr. Ambedkar’s description of Art. 25, now Art. 32).
• Clauses Struck Down: Cl.s 2(d) of Art. 323-A and 3(d) of Art. 323-B, which
sought to exclude High Court and Supreme Court jurisdiction in toto, were
declared unconstitutional.
• Tribunals as Supplementary, Not Substitutes: Contrary to Sampath
Kumar, the Court held that tribunals created under Arts. 323-A and 323-B
are NOT equal to or substitutes for High Courts. Instead, they are
supplemental to High Courts.
• Appellate Structure Established:
– Tribunals remain courts of first instance in their respective areas
– Litigants cannot directly bypass tribunals to approach High Courts
– Appeals lie to a DB of concerned High Court under Art. 226
– After High Court determination, appeals may proceed to the Supreme Court
under Art. 136
• Tribunals’ Power to Examine Constitutional Validity: To handle
the unprecedented rise in litigations effectively, tribunals possess
alternative institutional mechanisms for judicial review.
Therefore, tribunals CAN examine the constitutional validity of
statutes, rules, or administrative decisions within their sphere.
• Filtering Function: Tribunals to filter out false or frivolous claims
before HC’s jurisdiction is invoked.
• Doctrine of Reconciliation: The Court reconciled conflict between
facilitating speedy tribunalization and preserving RoL by
establishing that doctrine of separation of powers, rule of law, and
independence of judiciary are NOT inherently infringed by
creating tribunals and transferring judicial powers from courts to
tribunals. What matters is whether the constituted tribunals
respect and maintain these principles.
• Impact: This landmark judgment fundamentally reshaped
India’s tribunal system. It established that: Judicial review
by High Courts is a constitutional safeguard - Tribunals
cannot be viewed as complete replacements for courts - A
hierarchical appellate structure must exist - The balance
between efficient administration and constitutional
protection must be maintained
• Note on Overruling Sampath Kumar: L. Chandra Kumar did
not formally overrule Sampath Kumar but substantially
modified its holding. The Court stated that tribunals, while
conceived as “effective substitutes,” are in reality
supplemental to courts, not replacements.
 Para 93, L. Chandra Kumar
Dual power: test subordinate legislation BUT
NOT parent statute
• All tribunal decisions on constitutional questions
are subject to scrutiny before a Division Bench of
the respective High Court (not direct appeal to
Supreme Court)
• This creates a three-tier appellate structure:
Tribunal → High Court Division Bench → Supreme
Court under Article 136
• Tribunals remain courts of first instance for their
specialized areas—litigants cannot bypass them to
approach High Courts directly on constitutional
questions
Tribunals CAN:
• Test and strike down subordinate
legislation (rules, regulations, notifications) as
unconstitutional
• Examine whether statutory provisions violate
constitutional principles
• Apply Art.s 14, 15, 16, constitutional rights to their
decisions
Tribunals CANNOT:
• Challenge their own parent statute (the Act that
created them)
• Declare the Act under which they were
constituted to be unconstitutional
• A Tribunal which is a creature of an Act cannot
declare that very Act to be unconstitutional
• A tribunal derives its very existence and
powers from its parent statute. To strike down
that statute would be to strike down the
source of its own authority—a logical and
constitutional impossibility.
MADRAS BAR ASSOCIATION v. UNION OF INDIA (2010
decided) Matters covered under Art. 323B- list
exhaustive or not?
• 5-Judge Constitution Bench
• Madras Bar Association (MBA) contended that
list of matters in Art. 323B(2) is exhaustive,
NOT illustrative.
• So, Parliament had NO competence to
constitute NCLT for insolvency, revival, and
restructuring of companies since these are
NOT listed in Art. 323B(2).
 “even though
revival/rehabilitation/regulation/winding up of
companies are not matters which are mentioned
in Article 323A and 323B, the Parliament has the
legislative competence to make a law providing
for constitution of Tribunals to deal with disputes
and matters arising out of the Companies Act.”
 MEANING OF “INCIDENTAL” UNDER
ARTICLE 323B(2)(j)
• NOT: Remotely related, tangentially connected, having any
conceptual link. NOT mean infinitely expandable.

YES:
• Matters that are:
• Directly and necessarily supplementary to enumerated matters
• Flowing from and inseparable from the primary matter
• Needed for the practical functioning of the enumerated matter
• Clarificatory or procedural aspects of enumerated matters

• The said list (in 323B(2)(a)-(i)) is exhaustive and not illustrative “for
the PRIMARY enumerated matters”
Principle of Harmonious Construction
• If “incidental” could mean ANYTHING tangentially
related, then:
• Cl. (j) would render clauses (a)-(i) meaningless
• Entire Art. 323B would lose its specificity
• Any tribunal could claim to be “incidental” to
something
• Therefore, enumeration itself becomes pointless
• The enumerated list must have limits, or
enumeration loses constitutional meaning
 EXAMPLES
Under "Taxation" (323B(2)(a)):
• Interest on delayed payment of tax (incidental to collection)
• Penalties for non-filing (incidental to enforcement)
• Provisional attachment of property pending tax recovery
(incidental to enforcement)
• Procedures for evidence in tax cases (incidental to assessment)
• Appeals within the same tax regime (incidental to enforcement)
Under "Industrial Disputes" (323B(2)(c)):
• Procedures for hearing (incidental to adjudication)
• Penalties for violation of industrial awards (incidental to
enforcement)
• Interest on back wages (incidental to remedies)
 EXAMPLES OF WHAT IS NOT
INCIDENTAL
GST System: Not merely incidental to traditional “taxation”—it's an
entirely NEW regulatory regime with:
• Different structure (value-added tax chain vs. source-based tax)
• Different administration (GSTN portal, integrated system)
• Different compliance (invoice-based vs. traditional)
• Different dispute types (classification, ITC, valuation)
• GST Anti-Profiteering: Specific regulation, not traditional tax
administration
• Company Law Insolvency: Not incidental to ANY 323B matter (not
part of any enumerated category)
• Armed Forces Service: Not incidental to Art/ 323A (which covers
ONLY civil service recruitment and conditions)
• Telecom Regulation: Not incidental to any 323B matter (telecom is
not in the enumerated list)
• Ask yourself: ”Is this matter genuinely
SUPPLEMENTARY to the enumerated matter,
or is it a DIFFERENT regulatory domain
altogether?”
• If it’s different → It's NOT incidental →
Requires ordinary statute, NOT Art. 323B(j)
Third Type of Tribunals: Outside Article
323A and 323B
• CONSTITUTIONAL VALIDITY OF TRIBUNALS
OUTSIDE ARTICLE 323A/323B discussed in R.
Gandhi/Madras Assn. case of 2010
• Supreme Court UPHELD the constitutional
validity of creating NCLT/NCLAT, which fall
OUTSIDE Arts. 323A and 323B
• The Court held that Parliament CAN establish
tribunals for matters not enumerated in
323A/323B
 Constitutional Basis for Third-Type
Tribunals:
• Art. 245: Parliament has general power to make laws
• Art. 246(1): Parliament can legislate on matters in Union List
• Art. 246(2): States can legislate on matters in State List
• Art. 246(3): Both can legislate on matters in Concurrent List
• Seventh Schedule, List I: Lists all Union matters
• Seventh Schedule, List III: Lists all Concurrent matters
• These provisions exist independently of Articles 323A and
323B
• NCLT/NCLAT for company law matters falls under Union List,
Entry 43: "Incorporation, regulation and winding up of
trading corporations and associations"
• Tribunals under 323A/323B are created
under CONSTITUTIONAL provisions with special
court-excluding powers
• Tribunals outside 323A/323B are created under ORDINARY
STATUTES using general legislative power
• The constitutional framework of 323A/323B is specific,
limited, and exhaustive for its purposes
• Everything outside that framework falls back to ordinary
statute law
• This is a deliberate constitutional distinction
• The Court is drawing a bright line between two categories of
tribunals
• “Mere statutory tribunals” = Not constitutional
institutions, not created by Constitution
• “Created by ordinary law” = Created under regular
statutes using legislative power
• “Not as institutions authorized under the
Constitution” = No constitutional backing like
323A/323B have
• “Still be subject to supervisory and revisionary
jurisdiction” = High Court can ALWAYS review
them
Sq. Ld. Neelam Chahar v. UOI decided
in 2023 (W.P.(C) 9139/2019)
• An officer in the Indian Air Force
• Had received a policy letter from Air Headquarters
• The policy restricted her from certain career
advancement opportunities and postings
• The policy was challenged as discriminatory and
arbitrary
• challenged the "Air Headquarters Human
Resource Policy No. 03/2013" dated 28.08.2013
Is AFT competent to hear a challenge to the vires (constitutionality) of Air
Headquarters Human Resource Policy?

• AFT can hear challenges to policies, rules, regulations,

circulars
• These fall within "vires of statutory provisions" (per L.
Chandra Kumar)
• AFT has competence to test such subordinate legislations
• AFT competence covers: subordinate legislations, rules,
regulations, notifications, circulars
• NOT just one, but "etc." - suggesting a broad category of
subordinate legislation
• All pending writ petitions challenging similar
policies/circulars in High Court were to be transferred to
AFT for adjudication
 WHETHER ORDINARY TRIBUNAL is competent to adjudicate on the vires of
statutory legislations OTHER THAN its Parent statute (similar to Tribunals
formed under 323A/323B)?

MANISH KUMAR GIRI v. UNION OF INDIA (2025) - DELHI HIGH COURT

(2-Judge Bench)- FACTS
The Petitioner's Situation:
• Petitioner enrolled as a sailor in the Indian Navy at Senior
Secondary Recruit (SSR) level
• During employment, identified as female and wanted to express
female gender identity
• Informed Naval authorities about gender dysphoria requiring
medical intervention
• Underwent Sex Re-Assignment Surgery in a pvt hospital in Delhi in
2016
• Reportedly confined to psychiatric ward for 5 months after surgery
discovery
• Subjected to innumerable medical assessments
Discharge Order:
• Services administratively terminated as “Services No
Longer Required” in 2017
• Official reason: “existing service rules and regulations
do not permit the sailor's continued employment
owing to altered gender status, medical condition and
resultant employability restrictions”
• Alleged secondary reason: misconduct (8 absences
without leave from enrolment)
• Discharged under Regulation 279 of Regulations Navy
Part-III (statutory)
Challenge:
• Challenged the discharge order in HC by WP
• Union contended AFT is court of first instance
and petitioner should approach AFT first
• Petitioner sought to directly challenge in HC
u/Arts. 226/227
THE CORE LEGAL ISSUES (Questions Referred
to Full Bench)

Q1: Whether AFT competent to adjudicate on vires

of statutory legislations OTHER THAN the AFT Act,
such as S. 9 of Navy Act?
Q2: Whether decision in Neelam Chahar case is to be
understood as empowering AFT with jurisdiction to
adjudicate on vires of statutory legislations?
Q3: Whether, if such an interpretation is adopted, it
would extend to all Tribunals, even if they are not
constituted under Arts. 323A & 323B?
 ARGUMENTS
A. Petitioner's Arguments
• AFT should NOT be competent to test constitutionality of
statutory legislations like the Navy Act
• Neelam Chahar case dealt only with AFT testing validity of
POLICIES and SUBORDINATE LEGISLATION, NOT Central Acts
• The distinction is crucial: policies/rules ≠ statute
• AFT is NOT constituted under Article 323A (unlike
Administrative Tribunals)
• AFT is created under ordinary statute (AFT Act 2007)
• Therefore, should NOT have same powers as Article 323A
tribunals
B. UNION’S ARGUMENTS
• AFT has “all-inclusive power” to adjudicate ALL matters relating to
service of Armed Forces personnel
• Use of words “jurisdiction” and “service matters” with “all”
provides comprehensive jurisdiction
• L. Chandra Kumar principles should apply to AFT as well
• AFT can test vires of “statutory provisions” (broader
interpretation)
• AFT is the proper forum for service disputes (first instance
tribunal)
• Petitioner should exhaust AFT remedy before approaching High
Court
 COURT’S FINDINGS
• AFT ≠ Constitutional tribunal under Article 323A
• Service of Armed Forces ≠ enumerated under
Article 323B
• AFT = Ordinary statute tribunal
• Administrative Tribunals = Constitutional tribunal
• Different sources of power → Different
capabilities
• The Court acknowledged confusion from the
earlier Full Bench case of Neelam Chahar
• Neelam Chahar seems to say AFT can test
"statutory provisions"
• But it only dealt with subordinate legislation
(policies)
• Is "statutory provisions" broad enough to
include Central Acts?
• The Full Bench language is ambiguous
 After the 2010 judgment established that non-323A/323B tribunals CAN
exist, the question became: What safeguards must accompany their
existence?

• 2010 Supreme Court held NCLT/NCLAT

constitutionally valid BUT found defects in
appointment procedures and member
qualifications
• Government enacted new Companies Act, 2013
(replacing 1956 Act)
• Introduced new provisions for NCLT/NCLAT
composition and selection procedures
• Madras Bar Assn. challenged these NEW
provisions, arguing they still had same defects
 The Defect Issue-
• Ss. 409(3)(a), (e) - Qualifications for Technical
Members included “Jt. Secretary to Govt”
• This was considered INSUFFICIENT to ensure
judicial independence
• S. 412 - Selection Committee composition
gave too much power to govt representatives
• S. 411(3) - Other qualification provisions also
questioned
 CORE LEGAL ISSUES:

Q 1: Are the new NCLT/NCLAT provisions in

Companies Act 2013 constitutionally valid?
Q 2: Do they cure the defects identified in 2010
judgment, or repeat the same constitutional
violations?
Q 3: What qualifications and appointment
procedures are necessary to ensure tribunal
independence?
 Madras Bar Association’s Arguments

• New provisions are merely re-enactments of

problematic provisions from 1956 Act
• Including Jt. Secretary as qualification doesn't
ensure independence
• Selection Committee has majority govt
representatives → violates separation of
powers
• Govt can dominate tribunal appointments and
functioning
 Union’s Counter-Arguments:

• 2013 Act provisions are substantially amended

from 1956 Act
• Improved procedures provide sufficient
safeguards
 HELD-
1. Constitutional Validity UPHELD (with conditions):
• NCLT/NCLAT themselves are constitutionally valid
• Non-323A/323B tribunals CAN exist and function (reaffirmed 2010 principle)
2. Specific Provisions STRUCK DOWN:
• Ss 409(3)(a) and (e) - UNCONSTITUTIONAL:
• Qualifications prescribing "Joint Secretary to Govt" are INSUFFICIENT
• Created risk of executive dominance over tribunal independence
• Why: Cannot have govt officials at same level as judges sitting in judgment over
govt actions
a. S. 411(3) - STRUCK DOWN:
• Qualifications provisions did not adequately protect independence
b. Section 412(2) - STRUCK DOWN:
• Selection Committee composition violated separation of powers
• Govt. representatives had excessive say in appointments
• Principle Established: Appointment process MUST preserve judicial independence
• “For tribunals existing outside the
constitutional framework of 323A/323B,
JUDICIAL INDEPENDENCE must be the primary
safeguard. Appointment procedures, member
qualifications, and Selection Committee
composition must all reflect and preserve this
independence.”
 MADRAS BAR ASSOCIATION 2020
(2020 2 SCC 674)
• 2015 established WHAT safeguards are needed.
• 2020 deals with the question: Can the Executive
unilaterally change these safeguards through a
Money Bill?
• Challenge was also against Tribunal, Appellate
Tribunal and Other Authorities (Qualifications,
Experience and Other Conditions of Service of
Members) Rules, 2020 for contravening SOP and
Judicial independence
• 2015 judgment required specific appointment procedures and qualifications for
tribunal members
• To implement these, 2020 Rules were made under Finance Act, 2017
The Issue:
• Finance Act, 2017 was passed as a MONEY BILL
• In addition to standard tax proposals, it contained unusual provisions affecting 19-26
tribunals
• Giving power to Central Govt. to frame RULES determining: (impacting 19 Tribunals)
– Qualifications for appointment
– Appointment procedure
– Term of office
– Salaries and allowances
– Removal and reappointment conditions
– All other conditions of service
• Money Bills do NOT require RS approval (only LS)
• Ss. 156-189 of Finance Act, 2017 made substantial changes to tribunal structure:
(National Tax Tribunal)
– Appointment procedures
– Tenure conditions
– Remuneration rules
– Service conditions across all 19 tribunals
 CORE LEGAL ISSUES
Q 1: Are changes to tribunal structure
(appointment, tenure, remuneration) “financial
matters” covered by Money Bill?
Q 2: Can Parliament use Money Bill procedure to
circumvent RS and implement structural changes
to judiciary-related institutions?
Q 3: Do Tribunal Rules (made under Finance Act)
violate separation of powers and judicial
independence?
Tribunal Rules 2020 - STRUCK DOWN:
Specific Defects Found:
• Rules gave executive excessive control over
appointments
• Security of tenure reduced
• Removal provisions were loose
• All violated principles from 2015 judgment
• “Tribunal members must have secure tenure, adequate
remuneration, and independent appointment
procedures. Executive cannot unilaterally change these
through rules.”
• 2010: Can non-323A/323B tribunals exist? →
YES (using Art. 245)
• 2015: Must they have independence? → YES
(through proper appointment procedures)
• 2020: Can government unilaterally reduce that
independence? → NO (cannot use Money Bill
to bypass Parliament)
 Madras Bar Association v. Union of
India (2021) 7 SCC 369
• Tribunal Reforms (Rationalisation and Conditions of Service)
Ordinance, 2021 challenged by MBA through WP
• Sought to amend Ss. 12 and 13 and introduced significant changes
to Ss. 184 and 186(2) of Finance Act, 2017, governing conditions
of service, qualifications, and appointment procedures for
tribunal members.
• The Ordinance was issued on 04.04.2021 after a Bill introduced on
13.02.2021 could not be taken up in LS.
• Changes were meant to streamline tribunals by imposing a
minimum age of 50 years for appointment, restricting allowances
to those admissible to Central Government officers, requiring
panel recommendations of two names instead of one, and fixing
tenure at four years with retrospective effect from 26.05.2017.
• These provisions directly contradicted the directions issued by the
in MBA v. UOI (2020) judgment (MBA-III).
• Whether the first proviso to S. 184(1) prescribing a minimum age of 50
years for appointment as Chairperson or Member violates Art. 14, SOPs.
• Whether 2nd and 3rd provisos restricting allowances and benefits to extent
admissible to Central Govt officers violates judicial independence.
• Whether S. 184(7) containing the phrase “notwithstanding any judgment,
order or decree of any Court” impermissibly overrides the Court's
mandatory direction for single name recommendations within three
months.
• Whether S. 184(11) fixing tenure at four years with retrospective effect
from 26.05.2017 violates Art. 14 by creating arbitrary discrimination
between members appointed before and after Ordinance.
• Whether the legislature can override judicial decisions and what are the
constitutional limits to such override.
 RATIO/HOLDING
1. SOP
• SOP, judicial independence, rule of law, and equality under Art. 14
form part of basic structure and cannot be violated through
subsequent legislation
• quoted Sir Edward Coke's assertion that judicial matters cannot
be decided by the executive and Montesquieu's separation of
powers principle.
• Independence of the judiciary has both individual dimensions
(security of tenure, fair conditions of service) and institutional
dimensions (separation from other organs, method of selection)
• Art. 50 emphasizes separation of judiciary from executive.
• The principle of separation of powers is intimately connected to
Art. 14 of the Constitution—a breach of separation of powers
amounts to negation of equality
2. Permissible Legislative Override
The legislature CAN ordinarily override judicial decisions
by amending laws retrospectively and curing defects
pointed out by courts, provided:
• legislature has competence over the subject matter
• defect pointed out by Court is removed such that the
basis of the judgment would not have been passed if
the altered position existed before the Court
• Retrospective amendment is reasonable, not arbitrary,
and not violative of fundamental rights under Part III
• override does not transgress constitutional limitations
or intrude into judicial power
 3. Impermissible Legislative Override
it is impermissible to:
• Nullify mandamus or interim orders through legislative
enactment (as this constitutes legislative exercise of
judicial power violating separation of powers)
• Reverse Court directions without removing the basis of
the judgment
• Enact legislation that violates the basic structure of the
Constitution, including principles of separation of
powers and judicial independence
• Create arbitrary discrimination or naked discrimination
by making retrospective laws that affect similarly
situated persons differently
 Provisions struck down
• Minimum Age 50 Years - Unconstitutional
(violates Article 14 & separation of powers)
– Direct circumvention of MBA-III direction allowing
advocates with 10 years' experience
– Acts as practical deterrent for competent
advocates
– Young recruitment ensures longer tenure and
stronger judicial independence
• Restricted Allowances - Unconstitutional
(violates judicial independence)
– Contradicts MBA-III enhancement of HRA to Rs.
1,50,000/- for Chairpersons and Rs. 1,25,000/- for
Members
– New proviso reduces HRA to Rs. 60,000/- (govt.
officer rates)
– Fair remuneration and freedom from monetary
worries are essential for judicial independence
• Section 184(7) – “Notwithstanding Any Court
Orde”" Clause - Unconstitutional
– Attempts to nullify Court’s mandate requiring
single name recommendations within three
months
– Violates separation of powers through legislative
veto of judicial decision
• Retrospective Tenure Curtailment (Section
184(11)) - Void ab initio
– Creates “naked discrimination” between members
appointed before vs. after Ordinance
– Violates Art. 14 by treating similarly situated
persons unequally
– Members relying on interim Court orders should
not lose tenure arbitrarily