ROJER MATHEW v. SOUTH INDIAN BANK LIMITED- (Case Commentary)
INTRODUCTION:
The
Rojer Mathew case[1]
is a very important case because of the following:
·
This case touches upon the important
issue (Money bill) which is connected to the recent judgment of Puttaswamy
& Anr v. Union of India & Ors.[2]
·
Deals with issues related to Part XIV
and S.184[3] of
the Finance Act, 2017.
·
Then it relates to the tribunals of
India.
· Above all, it touches upon the major concepts like ‘Independence of Judiciary’ and ‘Separation of power.’
THE
BENCH MEMBERS:
The Bench comprises- Justices N.V. Ramana (J.), Sanjiv Khanna (J.), CJI Ranjan Gogoi, Deepak Gupta (J.), and D.Y.Chandrachud (J.).
PETITIONERS:
i.
Rojer Mathew
ii.
Madras Bar Association
iii.
National Green Tribunal (NGT) Bar
Association
iv.
Sales Tax Bar Association
v.
All India Lawyers union
vi. Central Administrative Tribunal (CAT) and others
RESPONDENTS:
i.
South Indian Bank Ltd
ii.
Union of India
iii.
Telecom dispute settlement and appellate
tribunal Registrar
iv.
CAT Registrar
v.
Ministry of personnel, public grievances
& Pensions Secretary
vi.
Department of Economic Affairs Secretary
vii. Ministry of Corporate Affairs.
BACKGROUND OF THE CASE:
1. Part XIV of the Finance Act deals with the Structure and Organisation, as well as the conditions of service of tribunals.
2. Under
section 184 of the Act authorizes the Central Government to notify the rules
governing persons appointed to Tribunals on the following matters like:
·
Qualifications
·
Appointment
·
Term of office
·
Salaries and allowances
·
Resignation and removal
· Finally other terms and conditions of service.
3. So the above section infers us that all the powers lies in the Central Government for the appointment of Tribunal members.
4. This Act got the President’s assent on 31st March 2017. After this Act was passed, several petitions (nearly 17 petitions) were filed for challenging the Constitutional validity of the Finance Act especially challenging the validity of Section 184 of the Act by the petitioners like individuals, Lawyers Associations and Bar associations of Tribunals and the Tribunals themselves (like Income Tax Appellate Tribunal, NGT, CAT). The petitioners also asked the Supreme Court to strike down the Finance Act, 2017 as ‘null and void’ for violating Articles 107, 110, 117 of the Indian Constitution. The petitioners also argued that part XIV of the Act also violates certain basic features of the Constitution mainly ‘the independence of Judiciary’ and ‘the Separation of powers (SOP)’. Hence they requested the court to declare part XIV of the Act as ‘ultra-vires’ under the articles 14, 21, 50, and 323B of Indian Constitution. The petitioners also pointed out an important issue that it is wrongly designated as ‘Money Bill’ and it also suffered ‘Excessive delegation’ of legislative authority to executives.
SO
WHAT CAN WE INFER FROM BACKGROUND OF THE CASE?
1. The Finance Act, 2017 had given the Central Government- the power to govern appointments, removal, service, conditions of the members of judicial tribunals like NGT, CAT, NCLAT, and Income Tax appellate tribunal.
2. By this Act, there is a lack of Independence of Judiciary which is emphasized in Article 50[4] of the Indian Constitution since the judiciary is the appointing authority to appoint a judge or a presiding officer to all these tribunals.
3. It also hinders the Separation of powers, since the three branches like Legislature, Executive and Judiciary should not interrupt their functions with one another. Since appointing officers to the tribunals is mostly the work of the judiciary and not the Central Government hence here we can witness that the separation of powers is disturbed to a greater extent.
4. The Central Government also enacted another rule- where even a Non-judicial person can be a Chairman/ Chairperson/ President of these tribunals. The non-judicial person means a person who has experience in Economics, Commerce, Management, Industry, and Administration. The non-judicial persons can be appointed by the Executive members also. This particular rule confers excessive delegation. Hence tribunal should not be seen as an extension of the executive. This whole rule is contrary to the Judgment held by the Supreme Court in its earlier verdict in the case Union of India v. R. Gandhi.[5]
TRIBUNALS:
(i)
Tribunal is a quasi-judicial
institution that is set up to deal with problems such as resolving
administrative or tax-related disputes.
(ii)
Mainly enacted to reduce the case
burden in various courts.
(iii)
More flexible than other civil and
criminal courts.
(iv)
Tribunals are incorporated under
the 42nd Amendment Act, 1976 by inserting the Articles 323A &
323B in the Constitution of India.
(v)
It performs several functions like
adjudicating disputes, determining rights between the contesting parties,
making an administrative decision, reviewing an existing administrative
decision, etc.
(vi) Tribunals follow the ‘Principles of Natural Justice’.
WHAT
ARE THE MAJOR ISSUES OF THE CASE?
1. Can
the court review the decision of the Lok Sabha Speakers certifying a bill as
Money bill?
2. If
yes, was part XIV is valid u/A. 110 of the Indian Constitution as a money bill?
3. Even
if part XIV was validly enacted as a money bill, does it suffers from excessive
delegation?
4. Even
if part XIV does not suffer from either of the defects in issues (2) and (3),
are the rules enacted under it- the appellate tribunal and other authorities
(qualifications, experience and other conditions of service of members) Rules
2017- valid?
5. What measures to be taken to streamline the functioning of the tribunals?
JUDGMENT OF THE CASE:
Note: The judgment was unanimous on most questions with all five Judges having signed and the Majority judgment authored by CJI Ranjan Gogoi (Majority opinion- N.V. Ramana (J.), Sanjiv Khanna (J.) and CJI Ranjan Gogoi) and there were two separate part-concurring and part-dissenting opinions by Deepak Gupta (J.) and D.Y.Chandrachud (J.).
1. Can the court review the decision of the Lok Sabha Speakers certifying a bill as Money bill?
§ The Articles referred for this issue are A. 110 and A.122
a) All the judges held that only the members shall be prohibited from questioning the speaker’s decision. The court also held that although the court should not normally interfere with a parliamentary proceeding on the ground of mere irregularity, if such irregularity rose to the level of a gross constitutional violation, then the court is allowed to step in.
2. If yes, was part XIV is valid u/A. 110 of the Indian Constitution as a money bill?
§ The Article referred for this issue: A. 110 (a) to A.110 (g)
a) The majority opinion and Deepak Gupta (J) opinion: the Judges referred the Puttaswamy case[6] (because majority opinion of this case held Aadhaar Act is valid under the money bill) and came to a conclusion to transfer this matter to a larger bench. Hence now a new bench should decide whether part XIV is valid as a Money Bill or not?
b) Chandrachud (J) opinion (dissenting opinion): although justice agreed to refer this matter to a larger bench, he still held that part XIV did not qualify to be a money bill. He was also of the opinion that the word ‘consolidated fund’ alone is not sufficient to be qualified as a money bill u/A.110 of the Indian Constitution.
3. Even if part XIV was validly enacted as a money bill, does it suffers from excessive delegation?
§ The section referred for this issue: §.184 of Finance Act
a) Majority opinion: the finance Act did not suffer from any excessive delegation since the policy and guidelines already exist in terms of various judicial judgments like the L.Chandrakumar case, Madras Bar Association case, and also held that §.184 of Finance Act was introduced to only streamline the conditions of the tribunals.
b) Deepak Gupta (J) opinion (dissenting opinion): Gupta (J) does not agree with the majority and held that the ‘non-essential functions can be delegated but parliament had to retain a certain amount of control over the executive.
c) Chandrachud (J) opinion (dissenting opinion): Chandrachud (J) agreed with Gupta (J)’s opinion. He held that ‘the qualifications of members to tribunals constitute an essential function, which could have not been delegated.’
4. Even if part XIV does not suffer from either of the defects in issues (2) and (3), are the rules enacted under it- the appellate tribunal and other authorities (qualifications, experience and other conditions of service of members) Rules 2017- valid?
The Majority opinion, Gupta (J) and Chandrachud (J) opinions: all the judges unanimously held that the rules 2017 were contrary to the parent enactment and the principles envisaged in the Constitution as interrupted by the Supreme Court, and hence ‘struck down in their entirety.’
5. What measures to be taken to streamline the functioning of the tribunals?
a)
Majority
opinion:
(i)
Financial impact
assessment to be conducted by the Finance Ministry to assess the financial
needs of the tribunals for their daily functioning. The tribunals should have
adequate funds for their day-to-day functioning.
(ii)
Tribunal members are not equivalent
to Supreme Court/ High Court Judges
(iii) To modify appeal procedures: earlier the appeal was enacted as tribunal’s appeal can be directly filed in the Supreme Court but the Judges asked to modify the appeal procedures as from tribunal appeal to concern High Courts and further not satisfied can then approach the Supreme Court.
b) Chandrachud (J) opinion (Additional suggestions):
(i)
Suggested for setting up of
National Tribunal Commission (NTC) to oversee- selection, appointment, salaries
and service conditions of tribunal members.
(ii) Also
suggested for setting up the All India Tribunal Service for non-adjudicatory
members.
(iii) Gupta (J) accepted to setup NTC which was suggested by Chandrachud (J).OBSERVATION OF THE JUDGES:
|
ISSUES |
MAJORITY
OPINION (N.V.RAMANA (J), SANJIV KHANNA (J) & CJI RANJAN GOGOI) |
CHANDRACHUD
(J) OPINION |
DEEPAK
GUPTA (J) OPINION |
|
1. Speaker’s decision can be
reviewed or not?
|
Yes |
Yes |
yes |
|
2. Money bill validity |
Referred
the issue to a larger bench |
Although
agreed with the bench, separately held that it is not a valid money bill
|
Agreed
with the majority opinion. |
|
3. Excessive delegation
|
No |
No |
No |
|
4. Rules 2017 valid or not? |
Struck
down in entirety |
Struck
down in entirety |
Struck
down in entirety |
|
5. Streamline functioning of
tribunals |
Ordered
to form Judicial Impact Assessment and other directions |
Suggested
to set-up NTC for members of tribunal and to set-up All India Tribunals
Service for Non-judicial adjudicatory members |
Suggested
to set-up NTC. |
CASES
REFERRED:
1.
L.CHANDRAKUMAR
CASE (1997); R.GANDHI v. UOI (2010); MADRAS BAR ASSOCIATION v. UOI (2014) and
SWISS RIBBON CASE (2019)[7]
All the above cases held that ‘tribunals cannot be made to function under the Ministries against which they are to pass orders and they must be placed under the law Ministry instead.’
2.
MADRAS
BAR ASSOCIATION v. UOI[8]
Constitution
Bench in Madras Bar Association v. Union of India (2010) had held that
though the legislature can legislate which disputes will be decided by
courts and which disputes will be decided by tribunals, this is
subject to constitutional limitations. The Bench held that such legislation
cannot encroach upon the independence of the judiciary and must
respect the principles of the rule of law and the separation of
powers. It held that if tribunals are to be vested with judicial power hitherto
vested in or exercised by courts, such tribunals should possess the independence,
security, and capacity associated with courts.
In Madras Bar Association (2010), the Bench made observations on when tribunals can include technical non-judicial members. It stated that if a tribunal is intended to serve an area which requires specialized knowledge or expertise, technical members in addition to judicial members should be allowed. However, it emphasized that when a category of cases is transferred from the courts to the tribunals merely to either expedite cases, and then there is no need for non-judicial technical member. It emphasized that in such non-technical tribunals, only members of the judiciary should be the Presiding Officers/Members.
CONCLUSION:
The Judgment is powerful in its way because the judiciary established its independence and it laid down the importance of ‘Separation of powers’ and also emphasized that executive cannot interfere in the matters of Judiciary. The main objectives of tribunals are established to pass orders for any administrative wrongs. If tribunals are given to the executives, there won’t be any independent decision to make by the tribunals also. So the tribunals cannot be given to the hands of executives and if given independence of the tribunals as well as judiciary will be in question and conflict. So the view of the author is the Supreme Court has rightly established the Independence of Judiciary as well as the Separation of powers.
[1] Civil
Appeal No. 8588 of 2019.
[2] (2019) 1 SCC 1.
[3]Section 184 of the Finance Act,
2017-https://www.civilaviation.gov.in/sites/default/files/MoL%26amp%3BJ%20%28Legislative%20Deptt%29%20The%20Finance%20Act%20.pdf.
[4] Article 50 in The Constitution Of India 1949- Separation of judiciary from executive The State shall take steps to separate the judiciary from the executive in the public services of the State.
[5] AIR 1989 Mad 205, (1988) IIMLJ 493.
[6] Supra note 3.
-Adhithyan. C & N. Ilakkiya
School of Excellence in Law.
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