Tribunals Reforms Act, 2021

Case Description

In July 2021, in a 2:1 split, a Bench comprising Justices L. Nageswara Rao, Hemant Gupta and S. Ravindra Bhat struck down parts of the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (the Ordinance). Gupta J dissented.

The Ordinance inserted several provisions into the Finance Act, 2017 regarding service conditions for tribunal members. This included a minimum age for eligibility (50 years) and prescribed a fixed tenure of four years for the members and Chairperson of a tribunal. These provisions were struck down.

The Bench also struck down the provisions regarding the search cum selection committee (SCSC) which would be given the power to appoint tribunal members. The provision stipulated that two names for appointment were to be recommended which the Union would then decide upon, ‘preferably’ within three months.

The Bench declared that the Legislature had illegally overrode an earlier decision of the Court through this Ordinance. These conditions were also held to be violative of the independence of the judiciary. Selection of members and their service conditions were said to have a large bearing on the independence of tribunals. Thus, the Bench held that executive influence in these matters had to be avoided.

In August, Parliament passed the Tribunals Reforms Act, 2021 (the Act) which reproduced the same provisions that were struck from the Ordinance. This includes the search cum selection committee from the Ordinance.

The Madras Bar Association filed a petition challenging the Act.

On September 6th 2021, the petition was heard by a three-judge bench comprising Chief Justice Ramana and Justices D.Y. Chandrachud and L.Nageswara Rao. This was heard along with a series of petitions regarding vacancies in tribunals. There are currently over 200 vacancies across 15 tribunals.

The Bench criticised the Union for not honouring the orders of the Court. They stated that a judgment could not be overruled by re-enacting the same provisions.

The Bench reportedly clarified that they weren’t seeking a confrontation with the government. However, the Bench mentioned that the Union has been reluctant to appoint tribunal members, leaving many tribunals ‘virtually defunct’.

Solicitor General Tushar Mehta, representing the Union, said that tribunal appointments were under process and that substantive progress would be made in the next 10 days. The Bench granted the Union time and listed the matter to be heard again on September 13th 2021. They emphasised that they expect appointments to be made by that date.