1  

REPORTABLE  

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE/ORIGINAL JURISDICTION  

Civil Appeal No. 8588 of 2019  [Arising out of Special Leave Petition (Civil) No.15804 of 2017]  

Rojer Mathew …Appellant(S)  

VERSUS  

South Indian Bank Ltd. & Ors.   … Respondent(S)  WITH  

W.P.(C) No.267/2012, W.P.(C) No. 279/2017, W.P.(C) No. 558/2017, W.P.(C) No. 561/2017, W.P.(C) No. 625/2017, W.P.(C) No. 640/2017, W.P.(C) No. 1016/2017, W.P.(C) No. 788/2017, W.P.(C) No. 925/2017, W.P.(C) No. 1098/2017, W.P.(C) No. 1129/2017, W.P.(C) No. 33/2018, W.P.(C) No. 205/2018, W.P.(C) No. 467/2018, T.C.(C) No. 49/2018, T.C.(C) No. 51/2018, T.P.(C) No. 2199/2018

J U D G M E N T  

RANJAN GOGOI, CJI  

1. Leave granted.

BRIEF BACKGROUND:  

2. In the present batch of cases, the constitutionality of Part XIV of the Finance

Act, 2017 and of the rules framed in consonance has been assailed.  While it would  

be repetitious to reproduce the pleadings of each case separately, a brief reference  

is being made, illustratively, to the prayers made in three matters to aid the  

formulation of core issues arising for adjudication.  

3. The Madras Bar Association has preferred Writ Petition (Civil) No. 267 of

2012 seeking the following reliefs:

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“i. A writ of mandamus, directing the Union of India, to implement the directions of  

this Hon’ble Court in Union of India v. R. Gandhi [(2010) 11 SCC 1, para 96 at pg.  

310] and L. Chandra Kumar v. Union of India [(1997) 3 SCC 261], paras 120 and  

121 at page 65 to 67], where Ministry of Law and Justice, Govt. Of India was ordered  

to take over the administration of all tribunals created by Parliament and streamline  

the functioning of the same.   

ii. A writ of mandamus directing the Ministry of Law & Justice to promptly carry out  

a ‘Judicial Impact Assessment’ on all tribunals created by Parliament and submit a  

report on the same to this Hon’ble Court.”  

4. This Writ Petition was originally heard by a three-judge Bench on 18th  

February, 2015 wherein it was observed that the case presented substantial  

questions of Constitutional interpretation, necessitating hearing by a Constitution  

Bench. The orders passed from time to time reveal that, on 18th January, 2016, this  

Court perused the contents of the Tribunals, Appellate Tribunals and other  

Authorities (Conditions of Service) Bill, 2014 and felt that “it would be more  

appropriate if observations made in Union of India vs. R. Gandhi, President,  

Madras Bar Association1 (in paragraphs 64-70) are also considered by the  

Government.”   

5. The matter was listed again on 27th March, 2019 and this Court took  

cognizance of non-implementation of the directions issued vide para 96 of L.  

Chandra Kumar vs. Union of India2, which reads as follows:  

“96.  We are of the opinion that, until a wholly independent agency for the  

administration of all such Tribunals can be set up, it is desirable that all such  

tribunals should be, as far as possible, under a single nodal ministry which will be in  

a position to oversee the working of these tribunals.  For a number of reasons that  

Ministry should appropriately be the Ministry of Law.  It would be open for the  

Ministry, in its turn, to appoint an independent supervisory body to oversee the  

working of the Tribunals.”  

 1 (2010) 11 SCC 1.  2 (1997) 3 SCC 261.

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6. Thereafter on the same day, this Court opined as follows:   

“Tentatively, we are of the view that the said directions ought to have been  

implemented by the Government of India long back.  In the course of hearing today,  

learned Attorney General for India relying on an affidavit filed on behalf of the Union  

of India in the year 2013, had pointed out certain difficulties including the need for  

an amendment of the Government of India (Allocation of Business) Rules, 1961.   

Learned Attorney General has also pointed out that the Ministry of Law and Justice  

is overburdened and may not be able to act and function as the nodal agency, which  

the Court had in mind while issuing directions way back in the year 1997 in L.  

Chandra Kumar (supra).  There cannot by any manner of doubt that to ensure the  

efficient functioning and to streamline the working of Tribunals, they should be  

brought under one agency, as already felt and observed by this Court in L. Chandra  

Kumar (supra).  The Court would like to have benefit of the view of the Government  

of India as on today by means of an affidavit of the competent authority to be filed  

within two weeks from today.  

The second prayer made in the writ petition has also been considered by us and in  

this regard we have taken note of compilation placed before the Court by the learned  

Attorney General, which would go to show the present vacancy position in different  

Tribunals, which is one of the issues that we would attempt to resolve.  From the  

compilation of the learned Attorney General, it appears that the Central  

Administrative Tribunal, the Intellectual Property Appellate Board, the Armed Forces  

Tribunal, the National Green Tribunal and the Income Tax Appellate Tribunal would  

require immediate attention.  While every endeavour would be made by the nominee  

of the Chief Justice who heads the Selection Committee before whom the issue of  

recommendations may have been pending to expedite the same, such of the  

recommendations which have already been made by the Search-cum-Selection  

Committee as is in the case of National Company Law Tribunal and National Law  

Appellate Tribunal, should be immediately implemented by making appointments  

within the aforesaid period of two weeks and the result thereof be placed before the  

Court vide affidavit of the competent authority, as ordered to be filed by the present  

order.  

Once the aforesaid information is made available, appropriate orders will be passed  

by this Court, which may, inter alia, include remitting the matter to smaller Bench for  

monitoring on a continuous basis, so as to ensure due and proper functioning of the  

Tribunals.  Matter be listed before this Bench after two weeks.”  

7. During the pendency of the aforementioned writ petition, the present lead  

matter bearing SLP(C) No. 15804/2017 was filed by Rojer Mathew, assailing the  

final judgment and order of the High Court of Kerala. The petitioner had originally  

approached the High Court challenging the constitutional validity of Section 13 (5-

A) of the Securitisation and Reconstruction of Financial Assets and Enforcement  

of Securities Interest (SARFAESI) Act, 2002 which permits secured creditors to  

participate in auction of immoveable property if it remained unsold for want of

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reserve bid in an earlier auction. Rojer Mathew claimed that the aforementioned  

provision violated his rights under Article 300A and Article 14 of the Constitution,  

besides being in contravention of the Code of Civil Procedure which prohibits  

mortgagees from participating in auction of immovable property without prior Court  

permission.  

8. During the course of arguments, it was brought to the notice of this Court  

that appointments to the Debt Recovery Tribunals was not in consonance with the  

Constitutional spirit of judicial independence. Accordingly, though Rojer Mathew  

was given an opportunity to approach the High Court for reconsideration of his plea  

on 16th May, 2018, nevertheless this Court kept his petition pending to allow  

consideration of broader issues concerning restructuring of Tribunals. Assistance  

of Shri Arvind P. Datar, Sr. Advocate as Amicus Curiae was also requested by this  

Court.  

9. The third matter to be taken note of is Writ Petition (Civil) No. 279/2017  

where the petitioner, Kudrat Sandhu, has filed a Public Interest Litigation  

challenging the vires of Part XIV of the Finance Act, 2017 by which the provisions  

of twenty-five different enactments were amended to effect sweeping changes to  

the requisite qualifications, method of appointment, terms of office, salaries and  

allowances, and various other terms and conditions of service of the members and  

presiding officers of different statutory Tribunals. The impugned provisions of the  

Finance Act, 2017 have been referred to in extenso at appropriate parts of this  

order.  

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GENESIS OF TRIBUNALISATION:  

10. Delay and backlogs in the administration of justice is of paramount concern  

for any country governed by the rule of law. In our present judicial setup, disputes  

often take many decades to attain finality, travelling across a series of lower courts  

to the High Court and ending with an inevitable approach to the Supreme Court.   

11. Such crawling pace of the justice delivery system only aggravates the misery  

of affected parties. Although with nebulous origins, the adage “justice delayed, is  

justice denied” is apt in this context. Courts in this country, probably in a quest to  

ensure complete justice for everyone, overlook the importance of expediency and  

finality. This situation has only worsened over the years, as evidenced through  

piling pendency across all Courts. It would however be wrong to place the blame  

of such delay squarely on the judiciary, for an empirical examination of pendency  

clearly demonstrates that the ratio of judges against the country’s population is one  

of the lowest in the world and the manpower (support staff) and infrastructure  

provided is dismal.  

12. In addition to the delay in administration of justice, another important facet  

requiring attention is the rise of specialization and increase of complex regulatory  

and commercial aspects, which require esoteric appraisal and adjudication.  The  

existing lower courts in the country are not well equipped to deal with such complex  

new issues which see constant evolution as compared to the stable nature of  

existing civil, criminal and the tax jurisprudence.  

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13. Evidently, there is a desperate need to overcome these hurdles of delay in  

administration of justice. Creation of tribunals has evolved as one solution in the  

ever-constant strive to increase access to justice. A ‘Tribunal’ can be understood  

as a body tasked with discharging quasi-judicial functions with the primary  

objective of providing a special forum for specific type of disputes and for faster  

and more efficacious adjudication of issues. In Jaswant Sugar Mills Ltd., Meerut  

vs. Lakshmichand3, a test was laid down whereunder it is to be examined whether  

the authority has the trappings of a Court, facets of which include the authority to  

make determinations, evidentiary and procedural powers and ability to impose  

sanctions. However, per a five-judge bench in Associated Cement Co. Ltd. v. PN  

Sharma4, Tribunals were vested with a primarily judicial character for it was  

observed that:  

"9. ….. Special matters and questions are entrusted to them for their decision and  

in that sense, they share with the courts one common characteristic; both the courts  

and the tribunals are “constituted by the State and are invested with judicial as  

distinguished from purely administrative or executive functions”, (vide Durga  

Shankar Mehta v. Thakur Raghuraj Singh [(1955) 1 SCR 267 at p. 272] ). They are  

both adjudicating bodies and they deal with and finally determine disputes between  

parties which are entrusted to their jurisdiction. The procedure followed by the courts  

is regularly prescribed and in discharging their functions and exercising their  

powers, the courts have to conform to that procedure. The procedure which the  

tribunals have to follow may not always be so strictly prescribed, but the approach  

adopted by both the courts and the tribunals is substantially the same, and there is  

no essential difference between the functions that they discharge. As in the case of  

courts, so in the case of tribunals, it is the State's inherent judicial power which has  

been transferred and by virtue of the said power, it is the State's inherent judicial  

function which they discharge. Judicial functions and judicial powers are one of the  

essential attributes of a sovereign State, and on considerations of policy, the State  

transfers its judicial functions and powers mainly to the courts established by the  

Constitution; but that does not affect the competence of the State, by appropriate  

measures, to transfer a part of its judicial powers and functions to tribunals by  

entrusting to them the task of adjudicating upon special matters and disputes  

3 AIR 1963 SC 677.  

4 AIR 1965 SC 1595.

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between parties. It is really not possible or even expedient to attempt to describe  

exhaustively the features which are common to the tribunals and the courts, and  

features which are distinct and separate. The basic and the fundamental feature  

which is common to both the courts and the tribunals is that they discharge judicial  

functions and exercise judicial powers which inherently vest in a sovereign State.”  

14. Further, this Court has in various judgments explicitly held that tribunals are  

mutually exclusive from administrative or legislative bodies, and although not  

strictly Courts, they nevertheless perform judicial functions. With the inclusion of  

technical members along with judicial members in composition of Tribunals, it is  

ensured that the adjudicatory authority is equipped with the technical knowledge  

required to comprehend and decide issues involving specialised subjects.  

15. Such issues are not unique to our country. Globally, the issues such as need  

for specialization or pendency have resulted in a unanimous consensus for  

tribunalisation. A perusal of the prevailing legal regime governing tribunals and  

their interface with the government, provides a useful benchmark in examining  

methods to retain their character.  

AN INTERNATIONAL PERSPECTIVE   

16. The global approach to the institution of specialized Tribunals is a largely  

consistent one.   A cursory examination brings to fore a universal inherent need to  

disperse disputes across different adjudicatory bodies to reduce the burden on  

Constitutional Courts and ensure faster resolution of specific disputes. Almost all  

countries in the world have incorporated laws pertaining to the working of Tribunals  

within their Constitutional framework in some form or the other. In light of our  

common law traditions and colonial history, it would be imperative to examine the  

position of law across the world:  

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I. United Kingdom  

17. Tribunals are one of the most important institutions in the dispensation of  

justice in the British Judicial system. Numerous Tribunals have been established  

to deal with issues involving property rights, employment, immigration, mental  

health, etc. Their functions are similar to the mainstream judicial bodies and are  

concerned with disputes between individuals and the State. However, there is a  

stark distinction between Tribunals and Ordinary Courts in England; for unlike  

ordinary Courts, the Tribunals comprise of members with special expertise and  

experience with many of them being appointed from amongst advocates or from  

persons with technical exposure.   

18. Such tribunalisation traces its origins to the early twentieth century. The  

efficacy of a specialised, quasi-judicial body for adjudication of specific disputes  

was realised over a period of time as the newly evolved system of Tribunals  

gradually gained appreciation and recognition in the legal fraternity. During the  

development of the railways in the early 19th century, the judges found themselves  

ill-equipped to deal with technically specialised trade disputes arising from  

monopolistic railway companies. Such inexpert adjudication also resulted in  

dissatisfaction of the litigants. Consequently, a specialized tribunal of  

Commissioners was appointed in 1873 and later converted to the Railways and  

Canals Commission. Later in the nineteenth century, the British Government set  

up tribunals for pension and unemployment benefit to enhance accessibility to the  

poor and less-educated, including, special tribunals set up to adjudicate  

disablement pensions for servicemen wounded in World War I. In the twentieth  

century, post the Leggatt review, many dozens of tribunals for subjects as diverse

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as tax, mental health, social security, employment and asylum were set up, with  

thousands of adjudicating members.   

19. As Tribunals started marking their individual identity and resolving conflicts  

brought before them, there was an emergent need to amend the framework of  

these alternate fora in tune with societal changes. The Donoughmore Committee,  

in 1932, critiqued the delegation of judicial functions to quasi-judicial body and  

recommended that the judicial powers should vest solely with the Ordinary Courts  

of law. It was further recommended that establishment of Tribunals should only be  

in special cases where Ordinary Courts lacks expertise.  Applicability of principles  

of natural justice must also be extended to such Tribunals. Courts should be  

adequately empowered to ensure that the Tribunals function within their restricted  

domain.   

20. The need for supervisory jurisdiction over Tribunals was again discussed in  

1957 when the Frank’s Committee made its recommendations which were  

implemented by the Tribunal and Inquiries Act, 1958. The Frank’s Committee  

Report presented a glowing critique in favour of tribunalisation, contending that it  

was cheaper, faster, better and more accessible. This finding has been echoed by  

various international commissions which have noted the beneficial impacts of  

tribunalisation viz., cost effectiveness, accessibility, reduction in pendency,  

specialized expertise, etc.   

“Tribunals are not ordinary courts, but neither are they appendages of Government  

Departments. Much of the official evidence … appeared to reflect the view that  

tribunals should properly be regarded as part of the machinery of administration, for  

which the Government must retain a close and continuing responsibility. Thus, for  

example, tribunals in the social services field would be regarded as adjuncts to the  

administration of the services themselves. We do not accept this view. We consider  

that tribunals should properly be regarded as machinery provided by Parliament for

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adjudication rather than as part of the machinery of administration. The essential  

point is that in all these cases Parliament has deliberately provided for a decision  

outside and independent of the Department concerned, either at first instance … or  

on appeal from a decision of a Minister or of an official in a special statutory  

position… Although the relevant statutes do not in all cases expressly enact that  

tribunals are to consist entirely of persons outside the Government service, the use  

of the term ‘tribunal’ in legislation undoubtedly bears this connotation, and the  

intention of Parliament to provide for the independence of tribunals is clear and  

unmistakable.”5  

21. Pursuant to this, the Council on Tribunals was established with the purpose  

of overseeing composition and working of various Tribunals. Further, the Sir  

Andrew Leggatt Committee (2001) scrutinised the existing state of Tribunals  

wherein the inherent deficiencies of a non-uniform Tribunal system were  

highlighted. The report of the Committee, titled ‘Tribunals for User— One System,  

One Service’ suggested a new structurally reformed system of Tribunals with a  

more uniform administration and procedure. It was also suggested that a single  

Appellate Division should be the only route of appeal against the orders of the  

Tribunals. In 2007, the Tribunals, Courts and Enforcement Act was enacted which  

formulated a new system of two Tribunals -the First-tier Tribunal and the Upper  

Tribunal - with unified route for appeal.6   

22. In the year 2006 the United Kingdom created a Tribunal Service, which was  

later merged with the Courts Service in 2010, resulting in the creation of a single  

cohesive judicial structure and service for the country.  

 5 Drewry, Gavin, “The Judicialisation of Administrative Tribunals in the U.K: From Hewart to Leggatt” 28 TRAS 51  

(2009)  

6 Excerpts from the ‘Explanatory Notes to the Tribunals, Courts and Enforcement Act, 2007’ prepared by the  

Ministry of Justice, British Parliament.

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II. Canada  

23. The Tribunal system in Canada, although of recent origin, is well established  

having a distinct identity of its own. Similar to the system in England, in Canada  

too, the Tribunal system has successfully become one of the foundations of the  

judicial system.7 Federal or provincial legislations are enacted to constitute and  

empower specialised Tribunals for specific subject matters such as human rights,  

insurance claims, etc.8 The work of the Tribunals are regulated by legislation and  

Members are usually appointed for their expertise in the subject.   

24. Many of the Tribunals are empowered by their enabling legislation or general  

legislations to have powers similar to Civil Courts. However, Tribunals in Canada  

are less formal than Courts and are outside the general Court system; their  

decisions are subject to Judicial Review to ensure adherence to law. In a striking  

resemblance to our judicial system, the Canadian Constitution also provides  

inherent power of judicial review of decisions of Tribunals to superior Courts, where  

either no provision of appeal is provided or is specifically barred by a statute.  

Appeals from orders of Tribunals in Canada are heard by Federal Court of Canada,  

the immediate forum below the Supreme Court of Canada.   

 7 Malik, Lokendra; Lata, Kusum; Kaur, Avneet, Constitutional Government in India (Satyam Law  

International, New Delhi, 2016) at p. 191.  

8  Administrative Tribunals in Canada, available at:  

http://www.thecanadianencyclopedia.ca/en/article/administrative-tribunals/ (last visited on 10.09.2019).

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III. Australia  

25. The Australian system of Tribunals is an amalgamation of the system  

prevalent in England and Canada. Tribunals in Australia were established primarily  

to reduce the burden on Civil Courts and provide an effective, yet cheap means of  

justice for the public. There prevails a variety of Tribunals to review different types  

of Government decisions including social security, taxation, etc. The Tribunals  

serve a multifarious purpose, deciding issues between individuals and individuals  

& State. For instance, in several Australian States, the Tribunals work as Small  

Claims Courts. The Court of Appeals is a facet of the Supreme Court, enjoying  

appellate powers over all the other Courts and Tribunals in the country.   

IV.  United States of America  

26. The doctrine of separation of powers is adhered to in a much stringent  

manner in comparison to other common law countries. There is no delegation of  

judicial powers and no judicial power is vested in administrative bodies which are  

not Courts. The inception of judicial control over administrative action was with the  

enactment of Administrative Procedure Act, 1946. However, the Act merely made  

the decisions of Tribunals appealable on question of interpretation of law.  

Nevertheless, the Supreme Court of the United States had taken a more liberal  

view of the same leaving scope, though extremely limited, for judicial review.   

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V. France  

27. Being a Civil Law system, France has a dual legal system comprising of—  

Private Law (droit privé) and Administrative Law (droit administratif).9 It has a  

special Tribunal viz. Tribunal des Conflicts for performing both judicial and  

administrative functions.10 The decisions of Tribunal des Conflicts are not entirely  

within the purview of judicial review. Judicial Review is expressly ousted from some  

of the administrative actions. Further, to adjudicate disputes between individual  

and officials of State, the Counseil d’Etat was formed.   

28. With change in time, the Tribunal system of France also evolved. A new  

Three-Tier Tribunal system was established. The first tier being Tribunal  

administratif — Administrative Court or the Original Court having a wide jurisdiction  

covering all subject matters; the second tier is Cour administrative d'appel —  

Administrative Court of Appeal, formed to decide appeals from the Original Court  

and; the third tier is Conseil d'Etat — Court of Last Resort, which was formed to  

finally decide appeals from the Original Court or Court of Appeal. However, unlike  

in common law countries, the Appellate Courts in France lack power of judicial  

review on the ground of authority being ultra vires.   

VI. South Africa   

29. South Africa having similar colonial origins as India, inherited a similar legal  

system as India. Having multiple functions and discharging a range of judicial,  

 9 George A. Bermann; Etienne Picard, Introduction to French Law (Kluwer Law International, Netherlands, 2008)  

at p. 58.  

10 Bartlett, C. A. Hereshoff, “The French Judicial System” 33 CLT 952 (1913).

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quasi-judicial as well as administrative powers, every tribunal is a unique creation  

of its parent statute. Akin to many critiques in India, such tribunals are often  

criticized for their lack of uniformity, incoherence and haphazardness.  

DOMESTIC PERCEPTION:  

30. It is interesting to note that establishment of Tribunals in India relate back to  

as early as the year 1941 when the Income Tax Appellate Tribunal (ITAT) was  

established to expedite tax disputes. To structuralise the establishment of  

Tribunals, vide the 42nd Constitutional Amendment, Article 323A and 323B were  

introduced, delineating powers as well as the composition and formation of  

Tribunals. Numerous Tribunals thereafter have been established, with the source  

of power to legislate for establishing such tribunals being referable to Article 323A  

or Article 323B of the Constitution. The three-tier tribunal system in India finds its  

resemblance to the system as prevalent in France. The forums of first instance  

have Original Jurisdiction with High Court as the Appellate Court and the Supreme  

Court being the final adjudicatory body. Furthermore, it is not out of context to point  

out the similarity of the Constitution of India with the Canadian Constitution, insofar  

as it also provides inherent power of judicial review to Constitutional Courts over  

all subordinate Courts.   

31. Hence, the need for establishment of newer and more specialised  

adjudicatory bodies is not newfound but has evolved through developments spread  

over an era.   

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I. Administrative Reforms Commission - 1966   

32. The Administrative Reforms Commission was set up to explore the arenas  

for establishing Administrative Tribunals for different subject matters. It  

recommended establishment of Civil Services Tribunals as adjudicatory entities for  

disciplinary punishments awarded to civil servants.   

II. Wanchoo Committee - 1970  

33. The Wanchoo Committee recommended reforms to the Income Tax  

Appellate Tribunal to effectuate replacement of Civil Courts for expeditious  

redressal of tax disputes. It also recommended formation of a Direct Taxes  

Settlement Tribunal to ensure speedy remedies and decisions of disputes.   

III. High Court’s Arrears Committee Report - 1972  

34. A committee headed by Justice JC Shah highlighted an urgent need for  

individual-specialised Tribunals for exclusively dealing with service matters and to  

unburden High Courts by restricting the barrage of writ petitions being filed by  

government employees.   

IV. Swaran Singh Committee - 1976  

35. The Swaran Singh Committee took a radical view by advocating  

amendments to the Constitution for regulation of Tribunals and to curtail the writ  

jurisdiction of High Court and the Supreme Court. This report attracted a lot of  

critique from the legal fraternity and was later rejected in Sakinala Hari Nath vs.  

State Of Andhra Pradesh11.  

 11 1993 (3) ALT 471; See also: L. Chandra Kumar v. Union of India 1997 (2) SCR 1186

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V. Raghavan Committee - 2002  

36. In accordance with contemporaneous evolutions in the commercial sphere,  

the Raghavan Committee was set up to suggest methods to regulate anti-

competitive practices. This Committee recommended establishment of the  

Competition Commission of India (CCI), which was envisioned to maintain  

adequate competition in the market and protect consumer welfare. Further, the  

Competition Act, 2002 was later enacted which provided certain powers of Civil  

Courts to the CCI for effective enquiry and adjudication.  

37. Tribunals can thus be viewed as alternate avenues to facilitate swift  

dispensation of justice through less-formal procedures of adjudication. An  

examination of existing Tribunals in India and across foreign jurisdictions, shows  

that they are best suited to deal with complex subject-matters requiring technical  

expertise such as service law, tax law, company law or environment law, etc.  

LEGISLATIVE DEVELOPMENT OF TRIBUNALISATION :  

38. In India, the Constitution (42nd Amendment) Act, 1976 paved way for  

tribunalisation of the justice dispensation system by introduction of Articles 323A  

and 323B in the Constitution.  These provisions are to the following effect:  

“PART XIV-A: TRIBUNALS  

323-A. Administrative tribunals.—(1) Parliament may, by law, 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 the affairs of the Union or of any State or of  

any local or other authority within the territory of India or under the control of the  

Government of India or of any corporation owned or controlled by the Government.  

(2) A law made under clause (1) may—  

(a) provide for the establishment of an administrative tribunal for the Union and a  

separate administrative tribunal for each State or for two or more States;

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(b) specify the jurisdiction, powers (including the power to punish for contempt) and  

authority which may be exercised by each of the said tribunals;  

(c) provide for the procedure (including provisions as to limitation and rules of  

evidence) to be followed by the said tribunals;  

(d) exclude the jurisdiction of all courts, except the jurisdiction of the Supreme Court  

under Article 136, with respect to the disputes or complaints referred to in clause  

(1);  

(e) provide for the transfer to each such administrative tribunal of any cases pending  

before any court or other authority immediately before the establishment of such  

tribunal as would have been within the jurisdiction of such tribunal if the causes of  

action on which such suits or proceedings are based had arisen after such  

establishment;  

(f) repeal or amend any order made by the President under clause (3) of Article 371-

D;  

(g) contain such supplemental, incidental and consequential provisions (including  

provisions as to fees) as Parliament may deem necessary for the effective  

functioning of, and for the speedy disposal of cases by, and the enforcement of the  

orders of, such tribunals.  

(3) The provisions of this article shall have effect notwithstanding anything in any  

other provision of this Constitution or in any other law for the time being in force.  

323-B. Tribunals for other matters.—(1) The appropriate Legislature may, by law,  

provide for the adjudication or trial by tribunals of any disputes, complaints, or  

offences with respect to all or any of the matters specified in clause (2) with respect  

to which such Legislature has power to make laws.  

(2) The matters referred to in clause (1) are the following, namely:—  

(a) levy, assessment, collection and enforcement of any tax;  

(b) foreign exchange, import and export across customs frontiers;  

(c) industrial and labour disputes;  

(d) land reforms by way of acquisition by the State of any estate as defined in Article  

31-A or of any rights therein or the extinguishment or modification of any such rights  

or by way of ceiling on agricultural land or in any other way;  

(e) ceiling on urban property;  

(f) elections to either House of Parliament or the House or either House of the  

Legislature of a State, but excluding the matters referred to in Article 329 and Article  

329-A;  

(g) production, procurement, supply and distribution of foodstuffs (including edible  

oilseeds and oils) and such other goods as the President may, by public notification,  

declare to be essential goods for the purpose of this article and control of prices of  

such goods;  

(h)  rent, its regulation and control and tenancy issues including the right, title and  

interest of landlords and tenants;  

(i) offences against laws with respect to any of the matters specified in sub-clauses  

(a) to (h) and fees in respect of any of those matters;  

(j)  any matter incidental to any of the matters specified in sub-clauses (a) to (i).  

18    

(3) A law made under clause (1) may—  

(a) provide for the establishment of a hierarchy of tribunals;  

(b) specify the jurisdiction, powers (including the power to punish for contempt) and  

authority which may be exercised by each of the said tribunals;  

(c) provide for the procedure (including provisions as to limitation and rules of  

evidence) to be followed by the said tribunals;  

(d) exclude the jurisdiction of all courts except the jurisdiction of the Supreme Court  

under Article 136 with respect to all or any of the matters falling within the jurisdiction  

of the said tribunals;  

(e) provide for the transfer to each such tribunal of any cases pending before any  

court or any other authority immediately before the establishment of such tribunal  

as would have been within the jurisdiction of such tribunal if the causes of action on  

which such suits or proceedings are based had arisen after such establishment;  

(f) contain such supplemental, incidental and consequential provisions (including  

provisions as to fees) as the appropriate Legislature may deem necessary for the  

effective functioning of, and for the speedy disposal of cases by, and the  

enforcement of the orders of, such tribunals.  

(4) The provisions of this article shall have effect notwithstanding anything in any  

other provision of this Constitution or in any other law for the time being in force.  

Explanation.—In this article, “appropriate Legislature”, in relation to any matter,  

means Parliament or, as the case may be, a State Legislature competent to make  

laws with respect to such matter in accordance with the provisions of Part XI.”  

39. Drawing its competence from Article 323A of the Constitution, the  

Parliament enacted the Administrative Tribunals Act, 1985.  The primary objective  

was to provide a forum alternative to the High Courts for routine service appeals,  

which otherwise was overburdening the working of the Constitutional Courts. It  

recognised that the higher Courts were envisaged to primarily deal with important  

Constitutional issues and substantial question of law of general public importance.   

40. Furthermore, guidelines were issued by this Court in numerous decisions to  

highlight a paucity of technical expertise in certain subject-matters and thus the  

imminent need for an expedited disposal of such cases through Tribunals. It was

19    

indicated in M.C. Mehta v. Union of India12, that a dedicated Tribunal with both  

judicial and technical experts is necessary to hear environmental disputes.  

41. Consequently, the National Environment Tribunal Act, 1995 and National  

Environment Appellate Authority Act, 1997 were enacted. However, these were  

soon found to be incapable of providing expeditious resolution of disputes which  

necessitated reforms as suggested by the Law Commission of India. This led to  

the establishment of the National Green Tribunal (NGT) in 2010 as a special fast-

track Court only to deal with issues related to the environment.   

42. Similarly, Article 323B empowers the appropriate Legislature to enact  

legislation to provide for adjudication or trial by Tribunals of any disputes,  

complaints or offences with respect to the matters specified in Clause (2) of the  

said Article. The matters specified in Article 323B(2) exhaustively deal with a  

variety of matters which can be brought within the purview of tribunalisation by both  

the Parliament and State Legislatures.  

JUDICIAL DEVELOPMENT OF TRIBUNALISATION :  

43. This Court has observed through numerous decisions that the term  

‘Tribunal’ refers to a quasi-judicial authority. A test to determine whether a  

particular body was merely an administrative organ of the Executive or a Tribunal  

was evolved by this Court in Jaswant Sugar Mills Ltd., Meerut vs.  

Lakshmichand13. It was to be examined whether the body is vested with powers  

of a Civil Court or not, and it was held that any adjudicatory body vested with  

 12 1986 (2) SCC 176  

13 AIR 1963 SC 677.

20    

powers of taking evidence, summoning of witnesses, etc. must be categorised as  

a Tribunal.  

44. In R.K. Jain vs. Union of India14 a three-judge Bench of this Court  

emphasised the need for a safe and sound justice delivery system adept at  

satisfying the confidence of litigants. It was further noted that since members of  

Tribunals discharge quasi-judicial functions, it is imperative that they possess  

requisite legal expertise, some judicial experience and an iota of legal training.  

Moreover, since Tribunals are constituted as substitutes to Courts, their efficacy in  

upholding the faith of litigants cannot be compromised. It was however observed  

that true delivery of justice by Tribunals was still a far-fetched idea since the  

mechanism for judicial review and remedy of appeal to the Supreme Court was  

costly and discouraging. People from remote areas often found their right to appeal  

being handicapped by geographical and financial constraints. Hence, it was  

suggested by this Court that newer fora be dispersed across the country and that  

members from the Bar also be included in the composition of such Tribunals. An  

urgent need to reform the working of tribunals and regular monitoring of their  

functioning was also stressed upon.   

45. Subsequently, in L. Chandra Kumar v. Union of India15, a Constitution  

Bench of seven judges of this Court examined reports of expert committees and  

commissions analysing the problem of arrears. The Malimath Committee Report  

(1989-1990) was also referred to, wherein it was found that many Tribunals failed  

the test of public confidence due to purported lack of competence, objectivity and  

 14 (1993) 4 SCC 119.  

15  (1997) 3 SCC 261.

21    

judicial approach. This Court thus called for drastic measures to elevate the  

standards of Tribunals in the country.   

46. It was also reiterated that the exclusion of judicial review by High Courts was  

impermissible and providing direct statutory appeals to the Supreme Court  

impeded the common litigant from exercising his right to appeal because the  

appellate forum, being situated in Delhi, was inaccessible to many. While criticising  

the short terms of members and the lack of judicial experience of non-judicial  

members, this Court observed a need for establishment of an oversight mechanism  

to review the competence of all persons manning Tribunals. Thus, it was suggested  

that all Tribunals be brought under a ‘Single Nodal Ministry’, most appropriately the  

Ministry of Law & Justice, for overseeing of working of Tribunals. Liberty was  

however, granted to the Ministry to appoint an independent supervisory body to  

delegate the aforesaid functions. Further, the court noted that the procedure of  

selection of members of Tribunals, allocation of funds and all other intricacies  

would have to be culled out by such an umbrella organisation.   

47. In Union of India vs. R. Gandhi, President, Madras Bar Association16, a  

Constitution Bench of five judges of this Court reviewed the Constitutional validity  

of Parts I-B and I-C of The Companies Act, 1956 inserted by the Companies (2nd  

Amendment) Act, 2002.   

48. The bench observed that if Tribunals are established in substitution of  

Courts, they must also possess independence, security and capacity. Additionally,  

with transfer of jurisdiction from a traditional Court to a Tribunal, it would be  

 16 (2010) 11 SCC 1

22    

imperative to include members of the judiciary as presiding officers/members of  

the Tribunal. Technical members could only be in addition to judicial members and  

that also only when specialised knowledge or know-how is required. Any inclusion  

of technical members in the absence of any discernible requirement of  

specialisation would amount to dilution and encroachment upon the independence  

of the judiciary.   

49. This Court also observed that higher administrative experience does not  

necessarily result in better adjudication and that there had been a gradual  

encroachment on the independence of the judiciary through inclusion of more  

administrative/technical members in the Tribunals. It held that such practice  

needed to be checked and accordingly made requisite corrections to Parts I-B and  

I-C of The Companies Act, 1956 (as amended in 2002) as elucidated in para 120  

of the judgement, which is reproduced below:  

“120. We may tabulate the corrections required to set right the defects in Parts I-B  

and I-C of the Act:  

(i) Only Judges and advocates can be considered for appointment as judicial  

members of the Tribunal. Only High Court Judges, or Judges who have served in  

the rank of a District Judge for at least five years or a person who has practised as  

a lawyer for ten years can be considered for appointment as a judicial member.  

Persons who have held a Group A or equivalent post under the Central or State  

Government with experience in the Indian Company Law Service (Legal Branch)  

and the Indian Legal Service (Grade I) cannot be considered for appointment as  

judicial members as provided in sub-sections (2)(c) and (d) of Section 10-FD. The  

expertise in Company Law Service or the Indian Legal Service will at best enable  

them to be considered for appointment as technical members.  

(ii) As NCLT takes over the functions of the High Court, the members should as  

nearly as possible have the same position and status as High Court Judges. This  

can be achieved, not by giving the salary 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 of the National Company Law  

Tribunal. Clauses (c) and (d) of sub-section (2) and clauses (a) and (b) of sub-

section (3) of Section 10-FD which provide for persons with 15 years experience in  

Group A post or persons holding the post of Joint Secretary or equivalent post in the

23    

Central or the State Government, being qualified for appointment as Members of  

Tribunal, are invalid  

(iii) A “technical member” presupposes an experience in the field to which the  

Tribunal relates. A member of the Indian Company Law Service who has worked  

with Accounts Branch or officers in other departments who might have incidentally  

dealt with some aspect of company law cannot be considered as “experts” qualified  

to be appointed as technical members. Therefore clauses (a) and (b) of sub-section  

(3) are not valid.  

(iv) The first part of clause (f) of sub-section (3) providing that any person having  

special knowledge or professional experience of 20 years in science, technology,  

economics, banking, industry could be considered to be persons with expertise in  

company law, for being appointed as technical members in the Company Law  

Tribunal, is invalid.  

(v) Persons having ability, integrity, standing and special knowledge and  

professional experience of not less than fifteen years in industrial finance, industrial  

management, industrial reconstruction, investment and accountancy, may however  

be considered as persons having expertise in rehabilitation/revival of companies  

and therefore, eligible for being considered for appointment as technical members.  

(vi) In regard to category of persons referred in clause (g) of sub-section (3) at least  

five years' experience should be specified.  

(vii) Only clauses (c), (d), (e), (g), (h), and the latter part of clause (f) in sub-section  

(3) of Section 10-FD and officers of civil services of the rank of the Secretary or  

Additional Secretary in the Indian Company Law Service and the Indian Legal  

Service can be considered for purposes of appointment as technical members of  

the Tribunal.  

(viii) Instead of a five-member Selection Committee with the Chief Justice of India  

(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 the Secretary  

in the Ministry of Law and Justice as members mentioned in Section 10-FX, the  

Selection Committee should broadly be on the following lines:  

a. Chief Justice of India or his nominee—Chairperson (with a casting vote);  

b. A Senior Judge of the Supreme Court or Chief Justice of High Court—Member;  

c. Secretary in the Ministry of Finance and Company Affairs—Member; and  

d. Secretary in the Ministry of Law and Justice—Member.  

(ix) The term of office of three years shall be changed to a term of seven or five  

years subject to eligibility for appointment for one more term. This is because  

considerable time is required to achieve expertise in the field concerned. A term of  

three years is very short and by the time the members achieve 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-retirement 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 service.  

(x) The second proviso to Section 10-FE enabling the President and members to  

retain lien with their parent cadre/ministry/department while holding office as  

President or Members will not be conducive for the independence of members. Any

24    

person appointed as member should be prepared to totally disassociate himself  

from the executive. The lien cannot therefore exceed a period of one year.  

(xi) To maintain independence and security in service, sub-section (3) of Section  

10-FJ and Section 10-FV should provide that suspension of the President/Chairman  

or member of a Tribunal can be only with the concurrence of the Chief Justice of  

India.  

(xii) The administrative support for all Tribunals should be from the Ministry of Law  

and Justice. Neither the Tribunals nor their members shall seek or be provided with  

facilities from the respective sponsoring or parent Ministries or Department  

concerned.  

(xiii) Two-member Benches of the Tribunal should always have a judicial member.  

Whenever any larger or special Benches are constituted, the number of technical  

members shall not exceed the judicial members.”  

50. Later, in Madras Bar Association vs. Union of India (2014)17,  whilst  

striking down the newly-created National Tax Tribunal under the National Tax  

Tribunals Act, 2005, it was observed that procedure of appointment and conditions  

of service of members must be akin to judges of the Courts which were sought to  

be substituted by the Tribunal(s).   

51. Only persons with professional legal qualifications coupled with substantial  

experience in law were held to be competent to handle complex legal issues. It  

was further held that a litigating party (Govt.) should never be a participant in the  

appointment process of members of the Tribunal. Similarly, a provision for  

reappointment or extension of tenure is ipso facto prejudicial to the independence  

of the members of Tribunal. A difference was also drawn between appointments to  

Tribunals which substituted Courts of first instance and to those which were not  

subordinate to High Courts.   

52. It was further reiterated that establishment of a Tribunal with its seat at Delhi  

could cause hardship to litigants from other parts of the country, depriving them of  

 17 (2014) 10 SCC 1.

25    

convenient access to justice. Moreover, the Court held that in order to uphold their  

independence and fairness it would be inappropriate for the Central Government  

to have any administrative control over members of the Tribunal.  

53. In Madras Bar Association vs. Union of India (2015)18, vires of the  

Companies Act, 2013 which contemplated establishment of National Company  

Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT)  

were challenged. Interestingly, while examining Chapter XXVII of Companies Act,  

2013 i.e. Sections 407 to 434, this Court held that although the establishment of  

NCLT and NCLAT was not unconstitutional but there was a need for curing defects  

in accordance with the dictum of R. Gandhi (supra).  

54. Finally, in Gujarat Urja Vikas Ltd. vs. Essar Power Ltd.19, while examining  

the composition and working of Tribunals and statutory framework thereof, this  

Court reiterated its earlier decisions in L. Chandra Kumar (supra) and Madras  

Bar Association (2014) (supra), observing that remedy of appeal to this Court  

was in effect, being obliterated due to cost and inaccessibility. In addition to this, a  

flood of appeals from all the Tribunals directly to this Court hindered its efficiency  

in fulfilling its primary Constitutional role. Since appellate tribunals, manned by non-

judicial members, were adjudging complex questions of law, the composition of  

Tribunals was put under review by this Court and a reference to the Law  

Commission of India was made in this regard. Pursuant to this, the Law  

Commission of India, in its 272nd Report titled ‘Assessment of Statutory  

 18 (2015) 8 SCC 583.  

19 (2016) 9 SCC 103.

26    

Frameworks of Tribunals in India’ gave a detailed analysis of statutory framework  

with respect to Tribunalisation in India.   

THE FINANCE ACT, 2017: ITS LEGISLATIVE BACKGROUND  

55. Primary challenge in the present batch of cases is to the Finance Act, 2017.  

Though this enactment was purportedly to give effect to “the finance proposals of  

the central government for the financial year 2017-18” but Part XIV thereof consists  

of comprehensive provisions meant to effect “Amendments to Central Acts to  

Provide for Merger of Tribunals and other Authorities and Conditions of Service of  

Chairpersons, Members, etc”.  

56. A scrutiny of Part XIV of the Finance Act, 2017 discloses how by virtue of  

Sections 158 to 182, Parliament has amended twenty-five central enactments  

which form the foundation for multiple Tribunals. It has been submitted by the  

learned Attorney General, these amendments seek to rationalise the functioning of  

Tribunals, in conformity with the principles laid down by this Court in its prior  

decisions.  

57. Sections 158 to 182 of Part-XIV are broadly in pari materia except that each  

Section deals with a separate Tribunal.  In order to comprehend the manner in  

which Parliament has sought to achieve a uniform pattern of qualifications,  

appointment, term of office, salaries and allowances, resignation, removal and  

other terms and conditions of service of members and presiding officers of various  

Tribunals, it would be sufficient to illustratively reproduce Sections 158 and 173 of  

Part XIV of the Finance Act, 2017. Section 173 reads as follows:  

27    

"I.—AMENDMENT TO THE CINEMATOGRAPH ACT, 1952  

173. In the Cinematograph Act, 1952, after section 5D, the following section shall  

be inserted, namely:—   

"5E. Notwithstanding anything contained in this Act, the qualifications, appointment,  

term of office, salaries and allowances, resignation, removal and the other terms  

and conditions of service of the Chairman and other members of the Appellate  

Tribunal appointed after the commencement of Part XIV of Chapter VI of the Finance  

Act, 2017, shall be governed by the provisions of section 184 of that Act: Provided  

that the Chairman and member appointed before the commencement of Part XIV of  

Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions  

of this Act and the rules made thereunder as if the provisions of section 184 of the  

Finance Act, 2017 had not come into force.".  

58. In addition to this, some Sections in Part XIV also amalgamate existing  

Tribunals. Section 158 has been reproduced below as an example of such  

Sections which in addition to the elements of Section 173 also effect  

amalgamations:  

“158. Amendment of Act 14 of 1947.— In the Industrial Disputes Act, 1947,—  

(a) in Section 7A, after sub-section (1), the following sub-section shall be inserted,  

namely:—  

“(1A) The Industrial Tribunal constituted by the Central Government under sub-

section (1) shall also exercise, on and from the commencement of Part XIV of  

Chapter VI of the Finance Act, 2017, the jurisdiction, powers and authority conferred  

on the Tribunal referred to in Section 7D of the Employees' Provident Funds and  

Miscellaneous Provisions Act, 1952 (19 of 1952).”;  

(b) after Section 7C, the following section shall be inserted, namely:—  

“7D. Qualifications, terms and conditions of service of Presiding Officer.—  

Notwithstanding anything contained in this Act, the qualifications, appointment, term  

of office, salaries and allowances, resignation and removal and other terms and  

conditions of service of the Presiding Officer of the Industrial Tribunal appointed by  

the Central Government under sub-section (1) of Section 7A, shall, after the  

commencement of Part XIV of Chapter VI of the Finance Act, 2017, be governed by  

the provisions of Section 184 of that Act:  

Provided that the Presiding Officer appointed before the commencement of Part XIV  

of Chapter VI of the Finance Act, 2017, shall continue to be governed by the  

provisions of this Act, and the rules made thereunder as if the provisions of Section  

184 of the Finance Act, 2017 had not come into force.”  

59. There are two significant expressions worth noticing in these similarly  

worded Sections 158 to 182. First, every such Section opens up with a non-

obstante clause and it provides that “notwithstanding anything contained in ……

28    

Act the qualifications, appointment, term of office, salaries and allowances,  

resignation, removal and the other terms and conditions of service of the Chairman  

and other members of the Appellate Tribunal appointed after the commencement  

of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the  

provisions of section 184 of that Act”. Second, Section 184 of the Finance Act  

overrides all other provisions in both the Finance Act, 2017 as well as the other  

twenty-five enactments which stand amended.   

60. To critical analyse the intention of the legislature in enacting Section 184,  

reference must be made to the immediately preceding Section 183 which is to be  

found in sub-part ‘S’ of the Act titled “Conditions of service of Chairpersons and  

members of Tribunals, Appellate Tribunals and other Authorities”. Since Sections  

183 and 184 would need to be read conjointly, both are reproduced below:  

“S.—CONDITIONS OF SERVICE OF CHAIRPERSON AND MEMBERS OF  

TRIBUNALS, APPELLATE TRIBUNALS AND OTHER AUTHORITIES  

183. Application of Section 184.— Notwithstanding anything to the contrary  

contained in the provisions of the Acts specified in column (3) of the Eighth  

Schedule, on and from the appointed day, provisions of Section 184 shall apply to  

the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-

President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the  

case may be, other Authorities as specified in column (2) of the said Schedule:  

Provided that the provisions of Section 184 shall not apply to the Chairperson, Vice-

Chairperson, Chairman, Vice-Chairman, President, Vice-President, Presiding  

Officer or, as the case may be, Member holding such office as such immediately  

before the appointed day.  

184. Qualifications, appointment, term and conditions of service, salary and  

allowances, etc., of Chairperson, Vice-Chairperson and Members, etc., of the  

Tribunal, Appellate Tribunal and other Authorities.— (1) The Central  

Government may, by notification, make rules to provide for qualifications,  

appointment, term of office, salaries and allowances, resignation, removal and the  

other terms and conditions of service of the Chairperson, Vice-Chairperson,  

Chairman, Vice-Chairman, President, Vice-President, Presiding Officer or Member  

of the Tribunal, Appellate Tribunal or, as the case may be, other Authorities as  

specified in column (2) of the Eighth Schedule:  

Provided that the Chairperson, Vice-Chairperson, Chairman, Vice-Chairman,  

President, Vice-President, Presiding Officer or Member of the Tribunal, Appellate

29    

Tribunal or other Authority shall hold office for such term as specified in the rules  

made by the Central Government but not exceeding five years from the date on  

which he enters upon his office and shall be eligible for reappointment:  

Provided further that no Chairperson, Vice-Chairperson, Chairman, Vice-Chairman,  

President, Vice-President, Presiding Officer or Member shall hold office as such  

after he has attained such age as specified in the rules made by the Central  

Government which shall not exceed,—  

(a) in the case of Chairperson, Chairman  [President or the Presiding Officer of the  

Securities Appellate Tribunal], the age of seventy years;  

(b) in the case of Vice-Chairperson, Vice-Chairman, Vice-President, Presiding  

Officer [of the Industrial Tribunal constituted by the Central Government and the  

Debts Recovery Tribunal] or any other Member, the age of sixty-seven years:  

(2) Neither the salary and allowances nor the other terms and conditions of service  

of Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-

President, Presiding Officer or Member of the Tribunal, Appellate Tribunal or, as the  

case may be, other Authority may be varied to his disadvantage after his  

appointment.”  

61. Further, the Central Government in purported exercise of its powers under  

the aforementioned provisions, has notified the ‘Tribunal, Appellate Tribunal and  

other Authorities (Qualifications, Experience and other Conditions of Service of  

Members) Rules, 2017’ [in short “the Rules”].   

PETITIONERS’ CASE :  

62. The pleadings and arguments in most of the individual cases are similar and  

overlapping. Hence, for the sake of brevity, it is not necessary to refer to the  

submissions of each of the counsel individually. Broadly, however, petitioners have  

questioned the validity of Part XIV read with the 8th and 9th Schedules of the  

Finance Act 2017, as being ex-facie unconstitutional, arbitrary, in colourable  

exercise of legislative power, and offensive to the basic structure of the  

Constitution.   

63. The foremost contention on behalf of the petitioners is that Part-XIV could  

not and ought not to have been made part of the Finance Act, 2017 as the said

30    

part is not classifiable as a ‘money bill’. Emphasis was placed on the wordings of  

Article 110 which allows those bills which contain “only” provisions which fall within  

the metes and bounds of Clauses (a) to (g) thereof, to be treated as ‘money bill’.  

By virtue of inclusion of Part XIV, the entirety of the Finance Act, 2017 was  

contended to have lost its colour as a ‘money bill’ under Article 110 and hence its  

passage without the assent of the Rajya Sabha as required under Article 107  

renders it ultra vires the legislative scheme contemplated in the Constitution.   

64. Learned counsels vehemently placed reliance on the Constituent Assembly  

Debates to lend strength to the importance of the expression “only” under Article  

110(1). They seek to make out a case that such phraseology was deliberately  

incorporated in the Constitution by making a conscious departure from Section 37  

of the Government of India Act, 1935. Inclusion of Part XIV in the Finance Act,  

2017 is shown as being an act of camouflage and a colourable exercise and  

petitioners assert that such indirect manner of bypassing of the Rajya Sabha is  

impermissible. A larger narrative was presented before this Court, that is, of the  

Central Government undermining the character and essence of a bicameral  

legislature as envisaged under the Constitution; and interference of this Court was  

sought through examination of the substance of the legislation and not mere  

acceptance of the nomenclature accorded by the Lok Sabha Speaker under Article  

110(3).   

65. A nuanced argument was also furthered by petitioners’ counsels who  

highlighted that Tribunals are governed by Article 323-A and 323-B of the  

Constitution and laws enacted in this regard cannot be classified as money bills.  

Further, Parliament in making changes to Tribunals can trace its competence to

31    

Entry 11-A of List III of the Constitution which deals with administration of justice,  

and not financial matters.  

66. Part XIV was also impugned for its effect of terminating the services of  

presiding officers and members of various now-defunct Tribunals, which was  

claimed as being a direct interference in the independence of the judiciary.   

67. Section 184(1) of the Finance Act, 2017, in so far as it empowers the Central  

Government to make rules to provide for qualifications and procedure of  

appointment, conditions of service, terms and salaries was contended to suffer  

from the vice of excessive delegation. It was stated that the said provision takes  

away all judicial safeguards and makes the Tribunals amenable to the whims and  

fancies of the largest litigant, the State. This was contended as being against the  

grain of the Constitution, besides affecting administration of justice. In the  

alternative, counsels also contended that the present formulation of Rules under  

Section 184 was ultra vires the parent enactment and the binding dictum expressed  

by this Court in a catena of judgments.  

68. Further, during the course of arguments, various other deficiencies and  

contradictions in the administration of Tribunals and certain anomalous situations  

like providing direct appeals to this Court were highlighted, which were contended  

as being against the spirit of the Constitution. Petitioners, in addition to challenging  

the vires of the Finance Act, 2017 also prayed for a mandamus directing the State  

to mandatorily conduct ‘Judicial Impact Assessment’ of legislations.   

32    

UNION OF INDIA’S CASE :  

69. Learned Attorney General, on the other hand, passionately drew attention  

to the existence of over 40 tribunals, statutory commissions, and authorities  

functioning under the Government of India, each of which has been established  

under a different enactment and is governed by different set of rules. As a result,  

the conditions of service, modes of appointment, tenures etc. of members and  

presiding officers in different Tribunals were shown as vastly varying from one to  

another, giving rise to several anomalies and distortions. He put forth multiple  

examples; like how while members of some of the Commissions/Tribunals enjoy  

the status of Supreme Court judges, others like the members of the Debt Recovery  

Tribunal have only been kept at par with District Court judges. Similarly, while a  

person once appointed to the ITAT can continue till the age of superannuation,  

tenures of persons appointed to the APTEL was merely three years. The Attorney  

General attributed such inconsistencies as drafting errors and further stressed the  

need to streamline and harmonise the applicable rules, which is what was  

attempted through the Finance Act, 2017.  

70. He also highlighted the inherent contradiction in according status and rank  

equivalent to that of Constitutional Court judges to members and presiding officers  

of such Tribunals and regulatory bodies.  It was argued that the two have different  

functions and roles in our Constitutional setup. While the Supreme Court had a  

strength of 31 judges (when the matter was argued), he pointed out, that there are  

more than 50 functionaries enjoying the conditions of service of a Supreme Court  

judge and more than 150 such functionaries who have been brought at par with  

High Court judges. After placing on record multiple problems arising in the

33    

administration of justice as a result of such practice, he advocated the need to keep  

‘rank’ and ‘status’ separate from ‘salary’ and ‘allowances’.   

71. Learned Attorney General further relied upon an order passed by this Court  

in Rajiv Garg vs. Union of India (WP No. 120 of 2017) on 08th February, 2013  

directing that a decision be taken by the Central Government on uniformity of  

service conditions in various tribunals. Reliance was also placed on the 13th Report  

of the 2nd Administrative Reforms Commission submitted in April 2009 which  

recommended greater uniformity in service conditions in various tribunals. It was  

pointed out that, in fact, the Tribunals, Appellate Tribunals and other Authorities  

(Conditions of Service) Bill, 2014 was introduced in the Rajya Sabha on 14th  

February, 2014 but somehow could not be passed. Introducing separate  

amendments for each of these Tribunals would have been unwieldy and  

impractical, besides resulting in several inconsistencies. Resultantly, he submits a  

holistic view was taken and a single enactment was sought to be introduced in  

order to harmoniously bring uniformity.   

72. On behalf of the Union, the petitioners’ contentions were elaborately refuted.  

It was submitted that it is a settled principle of Constitutional interpretation that  

terms of the Constitution, including Clauses (a) to (g) of Article 110(1), must be  

interpreted in their widest amplitude, with the result that when the principal  

enactment had the dominant character of a ‘money bill’, all matters incidental  

thereto and inserted therein would also draw the colour and characteristic of a  

‘money bill’.

34    

73. In the alternative, he took aid of Clause (3) of Article 110 to contend that the  

Speaker of the Lok Sabha was the final and only Constitutional authority to adjudge  

the nature of a bill sought to be introduced under Article 109. Such decision was  

both final and hence not subject to any judicial review by any Court; even otherwise  

such exercise of passing legislations and certifications by the Speaker were  

“proceedings in Parliament” and could hence “not be called in question” before this  

Court in view of Article 122(1).   

74. Both sides have extensively relied upon case law and Constitutional history  

to substantiate their respective pleas. Relevant portions of the same are being  

referred to in the latter parts of this judgment whenever necessary.   

BRIEF REFERENCE TO INTERLOCUTORY ORDERS :  

75. After considering the suggestions filed during the course of hearing in  

SLP(C) No. 15804/2017, this Court passed an interim order on 9 February 2018,  

suggesting:  

"1. Staying the composition of Search-cum-Selection Committee as prescribed in  

Column 4 of the Schedule to the Tribunal, Appellate Tribunal and Other Authorities  

(Qualification, experience and other conditions of service of members) Rules, 2017  

both in respect of Chairman/Judicial Members and Administrative Members. A  

further direction to constitute an interim Search-cum- Selection Committee during  

the pendency of this W.P. in respect of both Judicial/Administrative members as  

under :  

a. Chief Justice of India or his nominee - Chairman   

b. Chairman of the Central Administrative Tribunal - Member   

c. Two Secretaries nominated by the Government of India - Members  

2. Appointment to the post of Chairman shall be made by nomination by the Chief  

Justice of India.  

3. Stay the terms of office of 3 years as prescribed in Column 5 of the Schedule to  

the Tribunal, Appellate Tribunal and other Authorities (Qualification, experience and  

other conditions of service of members) Rules, 2017. A further direction fixing the  

term of office of all selectees by the aforementioned interim Search-cum- Selection  

Committee and consequent appointees as 5 years.

35    

4. All appointments to be made in pursuance to the selection made by the interim  

Search-cum-Selection Committee shall be with conditions of service as applicable  

to the Judges of High Court.  

5. A further direction to the effect that all the selections made by the aforementioned  

interim selection committee and the consequential appointment of all the selectees  

as Chairman/Judicial/Administrative members for a term of 5 years with conditions  

of service as applicable to Judges of High Court shall not be affected by the final  

outcome of the Writ Petition.”  

76. The learned Attorney General agreed with all except the fourth and fifth  

suggestions reproduced above, and suggested certain modifications as follows:  

“4. All appointments to be made in pursuance to the selection made by the interim  

Search-cum-Selection Committee shall abide by the conditions of service as per the  

old Acts and the Rules.  

5. A further direction to the effect that all the selections made by the aforementioned  

interim selection committee and the consequential appointment of all the selectees  

as Chairman/Judicial/Administrative members shall be for a period as has been  

provided in the old Acts and the Rules.”  

77. This Court agreed to the learned Attorney General’s suggestions and  

accordingly made the following operative directions:  

“In view of the aforesaid, we accept the suggestions and direct that the same shall  

be made applicable for selection of the Chairpersons and the  

Judicial/Administrative/ Technical/Expert Members for all tribunals.”  

78. Since many of the Search-cum-Selection Committees had initiated selection  

processes and had completed a substantial portion of the exercise prior to the  

above order dated 9th February, 2018, this Court, on 12th February, 2018 passed  

the following order:  

“As some Committees had proceeded, the matter was listed for further hearing. We  

have heard learned counsel for the parties. Mr. Rohit Bhat, learned counsel  

assisting the learned Attorney General for the Union of India shall file the status of  

the selection process by the Committees, by 13.2.2018.  

Mr. Arvind Datar, Mr. C.A. Sundaram and Mr. Mohan Parasaran, learned senior  

counsel shall also file through their Advocates-on- Record a joint memorandum with  

regard to which tribunals are covered and not covered. The same shall be filed by  

10.30 a.m. on 13.2.2018.  

Orders reserved.”

36    

79. Further, vide order dated 20th March 2018, this Court clarified its previous  

order of 9th  February 2018 and directed:  

“(iii) The tenure of the Chairperson and the Judicial/Administrative/Expert/Technical  

Members of all the Tribunals shall be for a period of five years or the maximum age  

that was fixed/determined under the old Acts and Rules;”  

80. The following directions were also issued on 16th July, 2018 with regard to  

the age of superannuation of Members of the ITAT:  

“At this juncture, we may note that there is some confusion with regard to the Income  

Tax Appellate Tribunal (ITAT) as regards the age of superannuation. We make it  

clear that the person selected as Member of the ITAT will continue till the age of 62  

years and the person holding the post of President, shall continue till the age of 65  

years.”  

81. Corollary to the order dated 16th July 2018, six officers who had been  

selected as Member (Judicial) in CESTAT, also demanded the age of  

superannuation as noted in the case of Members of ITAT, to be applicable to them.  

Following the same dictum, vide order dated 21st August 2018, clarification  

regarding the age of superannuation for Members of CESTAT, Armed Forces  

Tribunal and Central Administrative Tribunal was made. The relevant portion of  

that order reads as follows:  

“CESTAT:  

2. In IA 113281 of 2018, the applicant is an Additional District and Sessions Judge  

in the State of West Bengal, who has been selected as Member (Judicial) in the  

CESTAT. The notification of appointment of six officers who have been selected as  

Member (Judicial), including the applicant, stipulates that they shall hold office for a  

period of five years or till attaining the age of 62 years, whichever is earlier “in terms  

of the Hon’ble Supreme Court’s order dated 20 March 2018”. A member of the  

judicial service would have ordinarily continued until the date of superannuation in  

the state judicial service, subject to the service rules. It would be manifestly  

inappropriate to adopt an interpretation as a result of which, upon assuming office  

as Member (Judicial) in CESTAT the officer will have a tenure which will expire after  

five years, if it falls prior to attaining the age of 62 years. We, accordingly, are of the  

view that the clarification issued for the ITAT in the order dated 20 March 2018  

needs to be reiterated in the case of the members of the CESTAT, which we do. We  

clarify that a person selected as Member of the CESTAT will continue until the age  

of 62 years while a person holding the post of President shall continue until the age  

of 65 years.

37    

AFT:  

3. Members of the Armed Forces Tribunal shall hold office until the attainment of the  

age of 65 years. Chairpersons who have been former Judges of the Supreme Court  

shall hold office until the attainment of the age of 70 years.  

CAT:  

4. In the case of the Central Administrative Tribunal, we clarify that the old  

rules/provisions shall continue to apply.”  

CONCEPT NOTE OF LEARNED AMICUS CURIAE :  

82. On the request of this Court, learned Senior Advocate Arvind Datar has  

provided invaluable assistance as the Amicus Curiae. In his detailed Concept Note,  

he has stressed the need for setting up an independent oversight body in light of  

the observations in L. Chandra Kumar (supra), and as reiterated in Madras Bar  

Association v. Union of India (2015) (supra) to the effect that Tribunals or their  

members should not be required to seek facilities from the sponsoring or parent  

ministries or concerned departments.  

83. The Concept Note also emphasised the need to implement the ‘74th Report  

of the Parliamentary Standing Committee’ which recommended the creation of a  

`National Tribunal Commission’ (NTC) to oversee all the Tribunals in the country.  

Mr. Datar further suggests that such National Tribunal Commission may consist of  

the following:   

• Two retired Supreme Court Judges (with the senior-most amongst them  

to be Chairman).  

• Two retired High Court Judges (Members).  

• Three members representing the Executive.

38    

84. It is further suggested in the concept note that such members be appointed  

by the following Selection Committee :  

• Chief Justice of India (as Chairperson of the Committee who exercises a  

casting vote);  

• Two senior-most judges of the Supreme Court after the Chief Justice of  

India;  

• Current Law Minister; and  

• Leader of the opposition.  

85. The Concept Note also contains the following suggestions:  

• The NTC should oversee functioning of central Tribunals and similar body  

may be constituted for State Tribunals.  

• The NTC should deal with appointment and removal of members of the  

Tribunals by constituting sub-committees.    

• The member of the Tribunals should be recruited by national competition.   

Once recruited they should continue till the age of 62/65 years subject to  

their efficiency and satisfactory working.  

• The Tribunals should not be haven for retired persons and appointment  

process should not result in decisions being influenced if the Government  

itself is a litigant and the appointing authority at the same time.  

• There should be restriction on acceptance of any employment after  

retirement.  

• Bypassing of High Court jurisdiction under Article 226/227 need to be  

remedied by statutory amendment excluding direct appeals to this Court.

39    

• There should be proper mechanism for removal of members.  

86. The aforementioned Concept Note of Learned Amicus Curiae was  

considered by this Court on 07.05.2018, resulting in the following observations:-  

“We broadly approve the concept of having an effective and autonomous oversight  

body for all the Tribunals with such exceptions as may be inevitable. Such body  

should be responsible for recruitments and oversight of functioning of members of  

the Tribunals. Regular cadre for Tribunals may be necessary. Learned amicus  

suggests setting up of all India Tribunal service on the pattern of U.K. The members  

can be drawn either from the serving officers in Higher Judicial Service or directly  

recruited with appropriate qualifications by national competition. Their performance  

and functioning must be reviewed by an independent body in the same was as  

superintendence by the High Court under Article 235 of the Constitution. Direct  

appeals must be checked. Members of the Tribunals should not only be eligible for  

appointment to the High Courts but a mechanism should be considered whereby  

due consideration is given to them on the same pattern on which it is given to the  

members of Higher Judicial Service. This may help the High Courts to have requisite  

talent to deal with issues which arise from decisions of Tribunals. A regular cadre  

for the Tribunals can be on the pattern of cadres for the judiciary. The objective of  

setting up of Tribunals to have speedy and inexpensive justice will not in any manner  

be hampered in doing so. Wherever there is only one seat of the Tribunal, its  

Benches should be available either in all states or at least in all regions wherever  

there is litigation instead of only one place.”       

87. On 07.05.2018 itself, the following additional issues were also suggested for  

consideration:  

“(i) Creation of a regular cadres laying down eligibility for recruitment for Tribunals;   

(ii) Setting up of an autonomous oversight body for recruitment and overseeing the  

performance and discipline of the members so recruited and other issues relating  

thereto;  

(iii) Amending the scheme of direct appeals to this Court so that the orders of  

Tribunals are subject to jurisdiction of the High Courts;  

(iv) Making Benches of Tribunals accessible to common man at convenient  

locations instead of having only one location at Delhi or elsewhere. In the alternative,  

conferring jurisdiction on existing courts as special Courts or Tribunals.”  

88. Thereafter, this Court opined the following recourse :-  

“20. The above issues may require urgent setting up of a committee, preferably of  

three members, one of whom must be retired judge of this Court who may be served  

in a Tribunal. Such Committee can have inter action with all stakeholders and  

suggest a mechanism consistent with the constitutional scheme as interpreted by  

this Court in several decisions referred to above and also in the light of

40    

recommendations of expert bodies. This exercise must be undertaken in a time  

bound manner.”  

89. This was followed by yet another order of 16th May, 2018 recommending  

constitution of a Committee within two months and expecting the Committee to  

give its report within three months thereafter.  

FORMULATION OF ISSUES:  

90. The core issues canvassed at the Bar concern the constitutionality of the  

Finance Act, 2017, particularly whether it satisfies the test of a ‘money bill’ under  

Article 110 of the Constitution? Further, in the eventuality that it is held that the  

impugned legislation has been validly enacted, then does it through Section 184  

excessively delegate legislative power to the Executive? Finally, whether the Rules  

thus framed as delegated legislation are ultra vires their parent enactments and  

are liable to be struck down?   

91. In addition, learned Counsel for the parties have drawn attention to the need  

to rationalise the administration of Tribunals, especially the conditions of service,  

mode of appointment, security of tenure and requisite qualifications of members  

and presiding officers of various Tribunals.  They have also highlighted the growing  

menace of pendency before this Court arising from direct statutory appeals from  

orders of such Tribunals.    

92. In light of these arguments put forth by learned Counsels and the  

suggestions of by the Amicus Curiae, the following issues arise for our  

consideration:

41    

I. Whether the ‘Finance Act, 2017’ insofar as it amends certain other  

enactments and alters conditions of service of persons manning different  

Tribunals can be termed as a ‘money bill’ under Article 110 and  

consequently is validly enacted?  

II. If the answer to the above is in the affirmative then Whether Section 184 of  

the Finance Act, 2017 is unconstitutional on account of Excessive  

Delegation?  

III. If Section 184 is valid, Whether Tribunal, Appellate Tribunal and other  

Authorities (Qualifications, Experience and other Conditions of Service of  

Members) Rules, 2017 are in consonance with the Principal Act and various  

decisions of this Court on functioning of Tribunals?  

IV. Whether there should be a Single Nodal Agency for administration of all  

Tribunals?  

V. Whether there is a need for conducting a Judicial Impact Assessment of all  

Tribunals in India?  

VI.  Whether judges of Tribunals set up by Acts of Parliament under Articles  

323-A and 323-B of the Constitution can be equated in ‘rank’ and ‘status’  

with Constitutional functionaries?  

VII. Whether direct statutory appeals from Tribunals to the Supreme Court ought  

to be detoured?  

VIII. Whether there is a need for amalgamation of existing Tribunals and setting  

up of benches.

42    

ISSUE I: WHETHER THE ‘FINANCE ACT, 2017’ INSOFAR AS IT AMENDS CERTAIN OTHER  

ENACTMENTS AND ALTERS CONDITIONS OF SERVICE OF PERSONS MANNING DIFFERENT  

TRIBUNALS CAN BE TERMED AS A ‘MONEY BILL’ UNDER ARTICLE 110 AND  

CONSEQUENTLY IS VALIDLY ENACTED?  

93. The Indian Parliament is a bicameral legislature. In order to become law, as  

per the general legislative scheme as provided under Article 107, an ordinary bill  

must be passed by a simple majority of both the Rajya Sabha and the Lok Sabha  

and must then receive Presidential ratification. Ordinary bills can be introduced  

either by the government or by any private member in either house of Parliament.  

After securing requisite majority in the House it is introduced in, ordinary bills are  

then sent to the other House for its assent. The Constitution, however, makes two  

exemptions to this general legislative procedure for formulation of laws.  

94. Article 368 provides for the Constituent power of the Parliament to amend  

the Constitution itself and concomitantly requires a higher threshold of majority in  

both houses of Parliament, and in certain cases also require the assent of a simple  

majority of the State legislatures. Article 110, in stark contrast, reverses the  

threshold and significantly reduces the role of the Rajya Sabha for ‘money bills’.   

Articles 109 and 110 provide that:  

“109. (1) A Money Bill shall not be introduced in the Council of States.   

(2) After a Money Bill has been passed by the House of the People it shall be  

transmitted to the Council of States for its recommendations and the Council of  

States shall within a period of fourteen days from the date of its receipt of the Bill  

return the Bill to the House of the People with its recommendations and the House  

of the People may thereupon either accept or reject all or any of the  

recommendations of the Council of States.   

(3) If the House of the People accepts any of the recommendations of the Council  

of States, the Money Bill shall be deemed to have been passed by both Houses

43    

with the amendments recommended by the Council of  

States and accepted by the House of the People.  

(4) If the House of the People does not accept any of the recommendations of the  

Council of States, the Money Bill shall be deemed to have been passed by both  

Houses in the form in which it was passed by the House of the People without any  

of the amendments recommended by the Council of States.   

(5) If a Money Bill passed by the House of the People and transmitted to the Council  

of States for its recommendations is not returned to the House of the People within  

the said  period of fourteen days, it shall be deemed to have been passed by both  

Houses at the expiration of the said period in the form in which it was passed by the  

House of the People.  

110. (1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill  

if it contains only 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 borrowing of money or the giving of any guarantee by the  

Government of India, or the amendment of the law with respect to any financial  

obligations undertaken or to be undertaken by the Government of India;  

(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 India or the public  

account of India or the custody or issue of such money or the audit of the accounts  

of the Union or of a State; or   

(g) any matter incidental to any of the matters specified in sub-clauses (a) to (f).   

(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for  

the imposition of fines or other pecuniary penalties, or for the demand or payment  

of fees for licences or fees for services rendered, or by reason that it provides for  

the imposition, abolition, remission, alteration or regulation of any tax by any local  

authority or body for local purposes.  

(3) If any question arises whether a Bill is a Money Bill or not, the decision of the  

Speaker of the House of the People thereon shall be final.   

(4) There shall be endorsed on every Money Bill when it is transmitted to the Council  

of States under article 109, and when it is presented to the President for assent  

under article 111, the certificate of the Speaker of the House of the People signed  

by him that it is a Money Bill.”  

95.  ‘Money bills’ as defined under Article 110(1) thus include bills which contain  

“only” provisions covered by sub-clauses (a) to (g). These money bills can be  

introduced only in the Lok Sabha and the role of the Rajya Sabha is merely  

consultative. Unlike in the case of ordinary bills where the Upper House can block

44    

the proposed legislation and act as a check on the power of the directly elected  

Lower House, in case of money bills, the Rajya Sabha merely has the ability to  

recommend amendments, that too only within fourteen days. In case the Lok  

Sabha refuses to accept those recommendations or in case no recommendations  

are made by the Rajya Sabha within the period of fourteen days, the money bill  

can be directly sent for Presidential ratification and thereafter it becomes valid law.   

96. Such an exceptional provision has its roots in British tradition and is an  

inheritance of the Westminster form of government. The Parliament Act of 1911  

was formulated by the United Kingdom Parliament in response to the Constitutional  

crisis of 1909 whereby the unelected Upper House (House of Lords) had stalled  

important budgetary bills passed by the elected Lower House (House of  

Commons), causing a governmental crisis and forcing the elected government to  

resign and seek re-election. Through Section 3, the said enactment required the  

Speaker of the House of Commons to certify that the bill was a ‘money bill’ and  

post such certification, the Upper House would forfeit its ability to amend or veto  

the bill. Further, it also allowed ‘public bills’ to become law irrespective of refusal  

by the House of Lords, in case the House of Commons had passed the same draft  

thrice in a minimum span of two years. It must be noted that the Indian adaptation  

under Article 109 and 110 do not have exceptions for ‘public bills’ nor do they  

explicitly provide that such certification shall not be amenable to judicial review  

unlike in the Parliament Act of 1911.  

97. The Constitution of India by Article 110(4), requires that every ‘money bill’  

be certified to be so by the Speaker before it is transmitted to the Rajya Sabha for

45    

their non-binding consideration. The Speaker of the Lok Sabha hence is the only  

appropriate authority to decide the nature of a bill under Article 110(3).   

98. In the present dispute, the Union has relied upon the finality accorded to  

such certification by the terminology of Article 110(3) which provides that in case  

of any dispute as to the nature of a bill, “the decision of the Speaker of the House  

of the People thereon shall be final.” The Lok Sabha Speaker, in fact, on a dispute  

having so arisen has adjudicated the then Finance Bill, 2017 to be a ‘money bill’.  

Further, the Union also places emphasis on Article 122(1) of the Constitution which  

provides that:  

“122. (1) The validity of any proceedings in Parliament all not be called in question  

on the ground of any alleged irregularity of procedure.”  

99. The Union thus, alternatively, contends that the challenge before this Court  

to the certification of the Speaker of the Finance Bill, 2017 as a ‘money bill’ and its  

consequent passage without the assent of the Rajya Sabha would at best amount  

to an ‘irregularity of procedure’ of ‘proceedings in Parliament’ and hence cannot be  

inquired into by this Court.   

100. It must be noted once again, that like Articles 109 and 110, Article 122 of  

our Constitution too can be traced to the Constitutional history and developments  

in the United Kingdom.  Certain Members of Parliament were tried and imprisoned  

for their remarks in Parliament during the seventeenth century resulting in the  

enactment of Article 9 of the Bill of Rights, 1688 which specifies that “….  

proceedings in Parliament ought not to be impeached or questioned in any  

Court….” Article 212(1) of the Constitution of India provides a direct corollary of  

Article 122(1) with respect to State legislatures.

46    

101. This provision was initially interpreted in MSM Sharma vs. Dr. Shree  

Krishna Sinha20 to mean that legislative business cannot be invalidated even if it  

is not strictly in compliance with law for such issues were within the “special  

jurisdiction” of the legislature to regulate its own business.  

102. The Union’s contention that Article 122 would exempt from judicial scrutiny  

passage of bills is a far-fetched contention.  If such a blanket exemption were to  

be granted, then it would open the floodgates to deviation from any Constitutional  

provision governing the functioning of Parliament and its legislative procedure.   

Since the Constitution explicitly provides a self-contained detailed procedure for  

enactment of legislation, and does not suggest that mere assent of the President  

to a law, by whatsoever method adopted, would become a valid law, it is necessary  

that this Court being the highest Constitutional forum for judicial review is provided  

with enough space for enforcement and protection of the Constitutional scheme.   

A perusal of the expressions used in Article 122 and a comparison with its British  

roots make it clear that the “proceedings” referred to include the power of the  

Parliament to frame its own rules, set out procedures for debate and discussion  

and powers to enforce disciple.  Section 3 of the Parliament Act, 1911 in the United  

Kingdom makes the decision of the Speaker of the House of Commons ‘conclusive  

for all purposes’ and ‘shall not be questioned in any court of law’. The Constitution  

of India however, under Article 110(3), states that ‘if any question arises whether  

a Bill is a Money Bill or not, the decision of the Speaker of the House of the People  

thereon shall be final’. A different syntax seems to indicate that our Constitution  

 20 AIR 1959 SC 395.

47    

makes the decision of the Speaker as to the nature of Bill final qua members of  

both the Houses of Parliament, though it is not conclusive and unchallengeable  

before the Courts. The scope of judicial review of decisions that enjoy the status of  

finality under the Constitution has been examined by this Court on several  

occasions.  We would like to refer to a few precedents in this regard.  In Raja Ram  

Pal v. Lok Sabha21, this Court had examined the ambit and scope of judicial review  

in matters of Parliamentary privileges and powers under Article 105 of the  

Constitution. The Court had held that under Article 122(1) and 212(1), immunity  

that has been granted is limited to ‘irregularity of procedure’ and does not extend  

to substantive illegality or unconstitutionality by observing:  

“Any attempt to read a limitation into Article 122 so as to restrict the court's  jurisdiction to examination of the Parliament's procedure in case of  unconstitutionality, as opposed to illegality would amount to doing violence to  the constitutional text. Applying the principle of "expressio unius est exclusio  alterius" (whatever has not been included has by implication been excluded),  it is plain and clear that prohibition against examination on the touchstone of  "irregularity of procedure" does not make taboo judicial review on findings of  illegality or unconstitutionality.”  

In Union of India v. Jyoti Prakash Mitter22, this Court had examined clause  

(3) to Article 217 which makes the decision of the President after consultation with  

the Chief Justice of India ‘final’, if the question arises as to the age of a Judge of a  

High Court. It was observed that notwithstanding the declared finality of the order  

of the President, the Court can, in appropriate cases when the order has been  

passed on collateral considerations or the rules of natural justice are not observed  

or when the judgment of the President is coloured by the advice or representation  

made by the Executive or is made with no evidence, set aside the order of the  

 21 (2007) 3 SCC 184  22 (1971) 1 SCC 396

48    

President made under Article 217(3). The Courts, however, do not sit in appeal  

over the judgment of the President or decide the weight to be attached to the  

evidence which is entirely within the domain of the President.   

Reading of the above decisions exposit that ‘finality’ of decisions under the  

Constitution has been subject to judicial review by the Courts. However, the  

jurisdiction exercisable by the Courts in such matters is rather limited and is subject  

to the satisfaction of specific conditions as discussed. We find no good ground and  

reason to take a different view with respect to the power of judicial review against  

certification of a bill as a Money Bill by the Speaker under Article 110(4). Article  

110(3) which makes this decision final qua both the Houses of Parliament and  

Article 122(1) which prohibits review by the courts in matters of ‘irregularity of  

procedure’ cannot operate as a bar when a challenge is made on the ground of  

illegality or unconstitutionality under the Constitutional scheme.  

103. Determining whether an impugned action or breach is an exempted  

irregularity or a justiciable illegality is a matter of judicial interpretation and would  

undoubtedly fall within the ambit of Courts and cannot be left to the sole authority  

of the Parliament to decide. Such a position has also been taken in the United  

Kingdom by the House of Lords in R (Jackson) vs. Attorney General23 where  

notwithstanding the explicit bar to judicial consideration of all Parliamentary  

proceedings (and not just procedural irregularities as under the Constitution of  

India), the Court assumed jurisdiction whilst noting that interpretation of statutes  

dealing with legislative processes would fall within the domain of the Courts;  

 23 [2005] UKHL 56.

49    

statutory interpretation being a judicial exercise, regardless of the immunities  

granted to parliamentary proceedings under the Bill of Rights.  

104. It would hence be gainsaid that gross violations of the Constitutional scheme  

would not be mere procedural irregularities and hence would be outside the limited  

ambit of immunity from judicial scrutiny under Article 122(1). In the case at hand,  

jurisdiction of this Court is, hence, not barred.   

105. On the substantive question of whether the Finance Act, 2017 was a ‘money  

bill’ under Article 110(3) it must be noted that until the turn of the twenty-first  

century, this Court took a consistent position that Article 110(3) of the Constitution  

would act as an express bar against judicial inquiry into the correctness of the  

certificate of ‘money bill’ given by the Speaker of the Lok Sabha.   

106. In Mohd. Saeed Siddiqui vs. State of Uttar Pradesh24, a three-judge  

bench refused to judicially review the speaker’s certification of the Uttar Pradesh  

Lokayukta and Up-Lokayuktas (Amendment) Bill as a Money bill. The phrase  

“proceedings of the Legislature” under Article 212(1) was interpreted to include  

“everything said or done in either house”. This Court thus held:  

“43. As discussed above, the decision of the Speaker of the Legislative Assembly  

that the Bill in question was a Money Bill is final and the said decision cannot be  

disputed nor can the procedure of the State Legislature be questioned by virtue of  

Article 212. Further, as noted earlier, Article 255 also shows that under the  

Constitution the matters of procedure do not render invalid an Act to which assent  

has been given to by the President or the Governor, as the case may be. Inasmuch  

as the Bill in question was a Money Bill, the contrary contention by the Petitioner  

against the passing of the said Bill by the Legislative Assembly alone is  

unacceptable.”  

 24 (2014) 11 SCC 415.

50    

107. This was relied upon in Yogendra Kumar Jaiswal vs. State of Bihar25,  

wherein a division bench of this Court refused to judicially review the certification  

of ‘money bill’ accorded by the Speaker to the Orissa Special Courts Bill noting that  

it was settled post Mohd. Siddiqui (supra) that any such certification would be an  

“irregularity” and not a “substantiality”.   

108. A co-ordinate bench of this Court in Justice Puttaswamy (Retd.) and Anr.  

v. Union of India26, was tasked with a similar question of the certification of ‘money  

bill’ accorded to the Aadhaar (Targeted Delivery of Financial and Other Subsidies,  

Benefits and Services) Act, 2016 by the Speaker of the Lok Sabha. The majority  

opinion after noting the important role of the Rajya Sabha in a bicameral legislative  

setup, observed that Article 110 being an exceptional provision, must be  

interpreted narrowly. Although the majority opinion did not examine the correctness  

of the decisions in Md. Siddiqui (supra) and Yogendra Kumar Jaiswal (supra)  

or conclusively pronounce on the scope of jurisdiction or power of this Court to  

judicially review certification by the Speaker under Article 110(3), yet, it  

independently reached a conclusion that the impugned enactment fell within the  

four-corners of Articles 110(1) and hence was a ‘money bill’. The minority view  

rendered, however, explicitly overruled both Md. Siddiqui (supra) and Yogendra  

Kumar Jaiswal (supra).  

109. The majority opinion in Puttaswamy (supra) by examining whether or not  

the impugned enactment was in fact a ‘money bill’ under Article 110 without  

explicitly dealing with whether or not certification of the speaker is subject to judicial  

 25  (2016) 3 SCC 183  26 (2019) 1 SCC 1.

51    

review, has kept intact the power of judicial review under Article 110(3). It was  

further held therein that the expression ‘money bill’ cannot be construed in a  

restrictive sense and that the wisdom of the Speaker of the Lok Sabha in this regard  

must be valued, save where it is blatantly violative of the scheme of the  

Constitution. We respectfully endorse the view in Puttaswamy (supra) and are in  

no doubt that Md. Siddiqui and Yogendra Kumar Jaiswal in so far as they put  

decisions of the Speaker under Article 110(3) beyond judicial review, cannot be  

relied upon.    

110. It must be emphasized that the scope of judicial review in matters under  

Article 110(3) is extremely restricted, with there being a need to maintain judicial  

deference to the Lok Sabha Speaker’s certification. There would be a presumption  

of legality in favour of the Speaker’s decision and onus would undoubtedly be on  

the person challenging its validity to show that such certification was grossly  

unconstitutional or tainted with blatant substantial illegality. Courts ought not to  

replace the Speaker’s assessment or take a second plausible interpretation.  

Instead, judicial review must be restricted to only the very extreme instance where  

there is a complete disregard to the Constitutional scheme itself. It is not the  

function of Constitutional Courts to act as appellate forums, especially on the  

opinion of the Speaker, for doing so would invite the risk of paralyzing the  

functioning of the Parliament.  

111. In light of the aforementioned narrow scope of inquiry and the high burden  

to be discharged by the petitioner(s) against the Speaker’s certification, we may  

now examine the challenge laid to the Finance Act, 2017.  

52    

112. Provisions of Part XIV can be broken down into three broad categories.   

First, abolition and merger of existing Tribunals; second, uniformizing and  

delegating to the Central Government through the Rules the power to lay down  

qualifications; method of appointment and removal, and terms and conditions of  

service of Presiding Officers and members; and third, termination of services and  

payment of compensation to presiding officers and members of certain tribunals  

that have now become de-funct.  

113. Interpretation of Article 110 was made by a coordinate Constitution Bench  

in K.S. Puttaswamy (Aadhaar-5) and is relied upon by both sides.  

114. The majority judgment in K.S. Puttaswamy (Aadhaar-5) under the heading  

‘Money Bill’, in paragraph 448 and then in paragraphs 452 to 461, had recorded  

the submissions made by the learned counsel, including the submission made on  

behalf of the petitioners relying upon the word ‘only’ appearing in Article 110 which  

defines a ‘Money Bill’.  With regard to the interpretation to be given to the meaning  

of the word ‘only’, reliance was placed on Hari Ram v. Babu Gopal Prasad27 and  

M/s Saru Smelting (P) Ltd. v. Commissioner of Sales Tax, Lucknow28.  The  

majority judgment had thereupon referred to the power of judicial review  

notwithstanding the use of the word ‘final’ with reference to the power of the  

Speaker under Article 110(3) of the Constitution, an aspect which we have already  

answered earlier, and examined Section 7 of the Aadhaar Act to observe “it is also  

accepted by the petitioners that Section 7 is the main provision of the Act”.   

Thereafter, reference was made to the other provisions of the Aadhaar Act to  

 27 (1991) Supp. 2 SCC 608  28 (1993) Supp. 3 SCC 97

53    

record the majority opinion that the bill in question was rightly introduced as a  

“Money Bill”.  The majority judgment, therefore, did not elucidate and explain the  

scope and ambit of sub-clauses (a) to (f) to clause (1) of Article 110 of the  

Constitution, a legal position and facet which arises for consideration in the present  

case and assumes considerable importance.  

115. Ashok Bhushan, J., in his concurring judgment, from paragraph 886  

onwards, had examined the issue of “Money Bill” and its justiciability and as noticed  

above, overruled Mohd. Saeed Siddiqui (supra) and Yogesh (supra) as not laying  

down the correct law by relying upon the decisions of this Court in Kihoto Hollohan  

v. Zachillhu and Others29 and Raja Ram Pal (supra). Referring to the definition  

of “Money Bill” and the meaning and purpose of the word ‘only’ used in Article  

110(1) of the Constitution, Ashok Bhushan, J. had observed that legislative intent  

was that the main and substantive provision of an enactment should only be any  

or all of the sub-clauses from (a) to (f).  In the event the main or substantive  

provisions of the Act are not covered by sub-clauses (a) to (f), the bill cannot be  

said to be a “Money Bill” {See paragraph 905}.  It was further observed that the use  

of the word ‘only’ in Article 110(1) has its purpose, which is clear restriction for a  

bill to be certified as a “Money Bill” {See paragraph 906}.  Referring to the Aadhaar  

Act, it was observed that it veers around the government’s constitutional obligation  

to provide for subsidies, benefits and services to individuals and other provisions  

are only incidental provisions to the main provision.  Therefore, the Aadhaar Bill  

was rightly certified by the Speaker as a “Money Bill”.  

 29 (1992) Supp. 2 SCC 651

54    

116. Dr. D.Y. Chandrachud, J., in his minority opinion on the said question,  

referring to the word ‘only’ in Article 110(1) of the Constitution had observed that  

the pith and substance doctrine which is applicable to legislative entries would not  

apply when deciding the question whether or not a particular bill is a “Money Bill”.   

Referring to sub-clause (e) of Article 110(1), it was held that the Money Bill must  

deal with the declaration of any expenditure to be charged on the Consolidated  

Fund of India (or increasing the amount of expenditure) and, therefore, Section 7  

of the Aadhaar Act did not have the effect of making the bill a Money Bill as it did   

not declare the expenditure incurred on services, benefits or subsidies to be a  

charge on the Consolidated Fund of India.  Section 7 mandates Aadhaar for  

availing services, benefits or subsidies which were already charged to the  

Consolidated Fund of India.  However, this view was not accepted by the majority  

judgment.  

117. In the context of Article 110(1) of the Constitution, use of the word ‘only’ in  

relation to sub-clauses (a) to (f) pose an interesting, albeit a difficult question which  

was not examined and answered by the majority judgment in K.S. Puttaswamy  

(Aadhaar-5).  While it may be easier to decipher a bill relating to imposition,  

abolition, remission, alteration or regulation of any tax, difficulties would arise in the  

interpretation of Article 110(1) specifically with reference to sub-clauses (b) to (f) in  

a bill relating to borrowing of money or giving of any guarantee by the Government  

of India, or an amendment of law concerning financial obligation. In the book,  

“Practices and Procedures of Parliament” by Kaul and Shakdher, it is opined that  

unless the word ‘only’ is interpreted in a right manner, Article 110(1) would be a  

nullity. A liberal and wide interpretation, on the other hand, possibly exposits an

55    

opposite consequence.  Relevant portion of the opinion by Kaul and Shakdher  

reads:  

“Speaker Mavalankar observed as follows: “Prima facie, it appears to me that  the words of article 110 (imposition, abolition, remission, alteration, regulation  of any tax) are sufficiently wide to make the Consolidated Bill a Money Bill. A  question may arise as to what is the exact significance or scope of the word  ‘only’ and whether and how far that word goes to modify or control the wide  and general words ‘imposition, abolition, remission, etc.’. I think, prima facie,  that the word ‘only’ is not restrictive of the scope of the general terms. If a Bill  substantially deals with the imposition, abolition, etc., of a tax, then the mere  fact of the inclusion in the Bill of other provisions which may be necessary for  the administration of that tax or, I may say, necessary for the achievement of  the objective of the particular Bill, cannot take away the Bill from the category  of Money Bills. One has to look to the objective of the bill. Therefore, if the  substantial provisions of the Bill aim at imposition, abolition, etc., of any tax  then the other provisions would be incidental and their inclusion cannot be  said to take it away from the category of a Money Bill. Unless one construes  the word ‘only’ in this way it might lead to make article 110 a nullity. No tax  can be imposed without making provisions for its assessment, collection,  administration, reference to courts or tribunals, etc, one can visualise only one  section in a Bill imposing the main tax and there may be fifty other sections  which may deal with the scope, method, manner, etc., of that imposition.  Further, we have also to consider the provisions of sub-clause (2) of article  110; and these provisions may be helpful to clarify the scope of the word ‘only’,  not directly but indirectly.”  

118. The majority judgment did not advert to the doctrine of pith and substance  

whereas judgment of Ashok Bhushan, J. had referred to the dominant purpose.   

The test of dominant purpose possibly has its own limitation as many a legislation  

would have more than one dominant objective especially when this prescription is  

read with reference to sub-clauses (a) to (f) of Article 110(1) of the Constitution.   

Further, determination of what constitutes paramount and cardinal purpose of the  

legislation and the test applicable to determine this compunction and incertitude  

itself is not free from ambiguity.  Difficulties would arise with reference to sub-

clauses (b), (c), (d) and (e) of Article 110(1), when we apply the principles of  

dominant or the main purpose of an enactment test. Sub-clause (c) to Article 110(1)  

refers to payment of monies into or withdrawal of monies from the Consolidated

56    

Fund of India. Sub-clause (d) refers to appropriation of monies out of the  

Consolidated Fund of India.  Sub-clause (e) refers to declaration of any expenditure  

charged on the Consolidated Fund of India or increasing of the amount of such  

expenditure.  Sub-clause (f) relates to receipt of money on account of Consolidated  

Fund of India or Public Account of India or issue of such money or the audit of the  

accounts of the Union or of State.  Even clause (b) in its amplitude includes an  

amendment of the law in respect of a financial obligation undertaken or to be  

undertaken by the Government of India.  Once we hold that the decision of the  

Speaker under clause (3) of Article 110 of the Constitution though final, is subject  

to judicial scrutiny on the principle of constitutional illegality, the provisions of Article  

110(1) have to be given an appropriate meaning and interpretation to avoid and  

prevent over-inclusiveness or under-inclusiveness. Any interpretation would have  

far reaching consequences. It is therefore, necessary that there should be absolute  

clarity with regard to the provisions and any ambiguity and debate should be ironed  

out and affirmatively decided.  In case of doubt, certainly the opinion of the Speaker  

would be conclusive, but that would not be a consideration to avoid answering and  

deciding the scope and ambit of “Money Bill” under Article 110(1) of the  

Constitution.  For example, taxation enactments like the Income Tax Act would  

qualify as Money Bill under sub-clause (a) to clause (1) of Article 110 and may  

include provisions relating to Appellate Tribunals which would possibly qualify as  

incidental provisions covered under sub-clause (g) to clause (1) of Article 110, even  

if we exclude application of sub-clause (d) to clause (1) of Article 110.  The position  

it could be argued would be different with reference to provisions for constitution of  

a tribunal under the Administrative Tribunal Act or the National Green Tribunal Act.

57    

The bill could however state that the expenditure would be charged on the  

Consolidated Fund of India.   

119. Another aspect which would arise for consideration would be the legal  

consequences in case a Non-Money Bill certified by the Speaker as a Money Bill,  

when presented before the Rajya Sabha is specifically objected to on this count by  

some Members, but on being put to vote no recommendations are made in respect  

of “Non-Money” Bill related provisions.  

120. The petitioners had argued on the strength of the concurring opinion by  

Ashok Bhushan, J. holding that in addition to at least one provision falling under  

Article 110(1) (a) to (f), each of the other remaining provisions must also be  

incidental to such core provision(s), and hence must satisfy the requirement of  

Article 110(g).  Such an interpretation, it was contended, would make the insertion  

of the word ‘only’ under the prefatory part of Article 110(1) purposeful, which was  

said to have been glossed over by the Union.  Further, it was contended that the  

manner in which the majority correlated Section 7 of the Aadhaar Act to Article  

110(1)(e) was erroneous, for it only regulated procedure for withdrawal by imposing  

a requirement for authentication and did not declare any expenditure to be a charge  

on the Consolidated Fund of India.  They had contended that the interpretation of  

the enactment by the majority judgement was constitutionally inexact and that a  

similar analysis ought not to be made in the present case.  The petitioners,  

therefore, contend that every impugned provision be individually examined and  

brought either under Article 110(1)(a) to (f) or be incidental thereto, as permitted  

by Article 110(g).  In case even a single provision did not satisfy either of the  

aforementioned two categories, then the entire Finance Act, 2017 would be an

58    

affront to the prefatory phraseology of Article 110(1) and must be declared as being  

unconstitutional.  

121. However, the learned Attorney General has propounded that  

constitutionality of the Finance Act, 2017 would be safe if its dominant provisions,  

which form the core of the enactment, fall within the ambit of Article 110(1)(a) to  

(f).  Other minor provisions, even if not strictly incidental, could take the dominant  

colour and could be passed along with it as a Money Bill. As per such interpretation,  

provisions ought not to be read in a piece-meal manner, and judicial review ought  

to be applied deferentially.    

122. Upon an extensive examination of the matter, we notice that the majority in  

K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the impugned enactment  

without first delineating the scope of Article 110(1) and principles for interpretation  

or the repercussions of such process.  It is clear to us that the majority dictum in  

K.S. Puttaswamy (Aadhaar-5) did not substantially discuss the effect of the word  

‘only’ in Article 110(1) and offers little guidance on the repercussions of a finding  

when some of the provisions of an enactment passed as a “Money Bill” do not  

conform to Article 110(1)(a) to (g).  Its interpretation of the provisions of the  

Aadhaar Act was arguably liberal and the Court’s satisfaction of the said provisions  

being incidental to Article 110(1)(a) to (f), it has been argued is not convincingly  

reasoned, as might not be in accord with the bicameral Parliamentary system  

envisaged under our constitutional scheme.  Without expressing a firm and final  

opinion, it has to be observed that the analysis in K.S. Puttaswamy (Aadhaar-5)

59    

makes its application difficult to the present case and raises a potential conflict  

between the judgements of coordinate Benches.  

123. Given the various challenges made to the scope of judicial review and  

interpretative principles (or lack thereof) as adumbrated by the majority in K.S.  

Puttaswamy (Aadhaar-5) and the substantial precedential impact of its analysis of  

the Aadhaar Act, 2016, it becomes essential to determine its correctness.  Being a  

Bench of equal strength as that in K.S. Puttaswamy (Aadhaar-5), we accordingly  

direct that this batch of matters be placed before Hon’ble the Chief Justice of India,  

on the administrative side, for consideration by a larger Bench.  

124. There is yet another reason why we feel the matter should be referred to a  

Constitution Bench of seven judges.  L. Chandra Kumar (supra), which was  

decided by a Bench of seven Judges, had also interpreted on the ambit of  

supervision by the High Courts under Article 227(1) of the Constitution to observe  

that the Constitutional scheme does not require all adjudicatory bodies which fall  

within the territorial jurisdiction of the High Courts should be subject to their  

supervisory jurisdiction, as the idea is to divest the High Courts of their onerous  

burden. Consequently, adding to their supervisory functions vide Article 227(1)  

cannot be of assistance in any manner.  Thereafter, it was observed that different  

tribunals constituted under different enactments are administered by the Central  

and the State Governments, yet there was no uniformity in administration.  This  

Court was of the view that until a wholly independent agency for such tribunals can  

be set up, it is desirable that all such tribunals should be, as far as possible, under

60    

a single nodal Ministry which will be in a position to oversee the working of these  

tribunals.  For a number of reasons, the Court observed that the Ministry of Law  

would be the appropriate ministry.  The Ministry of Law in turn was required to  

appoint an independent supervisory body to oversee the working of the Tribunals.   

As noticed above, this has not happened.  In these circumstances, it would be  

appropriate if these aspects and questions are looked into by a Bench of seven  

Judges.  

 ISSUE II: WHETHER SECTION 184 OF THE FINANCE ACT, 2017 IS  

UNCONSTITUTIONAL ON ACCOUNT OF EXCESSIVE  

DELEGATION?  

125. The second challenge against Part XIV of the Finance Act, 2017 is  

predicated on the assertion that this is a case of excessive delegation as it falters  

on the anvil of “essential legislative functions” and “policy and guidelines” tests.  

126. The Eighth Schedule referred to in Section 183 contains a list of 19 tribunals  

with corresponding enactments under which they were constituted.  Section 183  

overrides the provisions of the enactments specified in column (3) of the Eighth  

Schedule and mandates that from the appointed date, the Chairperson, Vice-

Chairperson, Chairman, Vice Chairman, President, Vice-President, Presiding  

Officer or Member of the Tribunal, Appellate Tribunal  or, as the case may be, other  

Authorities as specified in column (2) of the Eighth Schedule shall be appointed in  

terms of provisions of Section 184 of the Finance Act.  These provisions however,

61    

do not apply to those who have already been appointed to the said posts  

immediately before the appointed date, that is the date on which the Central  

Government may, by a notification in the Official Gazette, bring the said provisions  

into effect.    

127. Section 184, to repeat, reads as under:        

“184. Qualifications, appointment, term and conditions of service,  salary and allowances, etc., of Chairperson, Vice-Chairperson  and Members, etc., of the Tribunal, Appellate Tribunal and other  Authorities.—(1) The Central Government may, by notification, make  rules to provide for qualifications, appointment, term of office, salaries  and allowances, resignation, removal and the other terms and  conditions of service of the Chairperson, Vice-Chairperson, Chairman,  Vice-Chairman, President, Vice-President, Presiding Officer or  Member of the Tribunal, Appellate Tribunal or, as the case may be,  other Authorities as specified in column (2) of the Eighth Schedule:     

Provided that the Chairperson, Vice-Chairperson, Chairman,  Vice-Chairman, President, Vice-President, Presiding Officer or  Member of the Tribunal, Appellate Tribunal or other Authority shall hold  office for such term as specified in the rules made by the Central  Government but not exceeding five years from the date on which he  enters upon his office and shall be eligible for reappointment:   

 Provided further that no Chairperson, Vice-Chairperson,  

Chairman, Vice-Chairman, President, Vice-President, Presiding  Officer or Member shall hold office as such after he has attained such  age as specified in the rules made by the Central Government which  shall not exceed,—   

(a) in the case of Chairperson, Chairman or President, the age of  

seventy years;   

(b) in the case of Vice-Chairperson, Vice-Chairman, Vice-

President, Presiding Officer or any other Member, the age of  

sixty-seven years:   

 (2) Neither the salary and allowances nor the other terms and  conditions of service of Chairperson, Vice-Chairperson, Chairman,  Vice-Chairman, President, Vice-President, Presiding Officer or  Member of the Tribunal, Appellate Tribunal or, as the case may be,  other Authority may be varied to his disadvantage after his  appointment.”  

Section 184 has conferred upon the Central Government power to  

make rules by way of notification to provide for (a) qualifications; (b)  

appointment; (c) term of office; (d) salaries and allowances; (e) resignation;  

and (f) removal and other terms and conditions of service of the

62    

Chairperson, Vice-Chairperson, Chairman, Vice-Chairman, President, Vice-

President, Presiding Officer or Member of the Tribunal, Appellate Tribunal  

or, as the case may be, other Authorities as specified in column (2) of the  

Eighth Schedule.  The first proviso states that the incumbent officers shall  

hold office for such terms as may be specified in the rules made by the  

Central Government but the term shall not exceed five years from the date  

on which he assumes the office and shall be eligible for reappointment. The  

second proviso states that the persons so appointed shall hold office till they  

attain the age specified in the rules made by the Central Government which  

shall not exceed in the case of Chairperson, Chairman and the President,  

the age of 70 years and in the case of Vice-Chairperson, Vice-Chairman,  

Vice-President or any other Members, the age of 67 years.  Sub-section 2  

to Section 184 states that the salaries and allowances and other terms and  

conditions of service of the persons appointed may not be varied to their  

disadvantage after appointment.    

128. Section 185 (1) of the Finance Act is also relevant and reads:  

“185. Transitional provisions.— (1) Any person appointed as the  Chairperson or Chairman, President or Vice-Chairperson or Vice-Chairman,  Vice-President or Presiding Officer or Member of the Tribunals, Appellate  Tribunals, or as the case may be, other Authorities specified in column (2) of  the Ninth Schedule and holding office as such immediately before the  appointed day, shall on and from the appointed day, cease to hold such office  and such Chairperson or Chairman, President, Vice-Chairperson or Vice- Chairman, Vice-President or Presiding officer or Member shall be entitled to  claim compensation not exceeding three months' pay and allowances for the  premature termination of term of their office or of any contract of service.”  

 The Chairperson or Chairman, President or Vice-Chairperson or Vice-

Chairman, Vice-President or Presiding Officer or Member of the  

Tribunals/Appellate Tribunals specified in column (2) of the Ninth Schedule who

63    

hold office as per the above provisions before the appointed date shall cease to do  

so and will be entitled to compensation not exceeding three months’ pay and  

allowance for the premature termination of the office or the contract of office.   

However, we would clarify that presently we are not examining constitutional vires  

of sub-section (1) to Section 185.  

129. Section 186 of the Finance Act, 2017 reads as under:  

“186. General Power to make rules.— Without prejudice to any other power to  make rules contained elsewhere in this Part, the Central Government may, by  notification, make rules generally to carry out the provisions of this Part.”  

 The aforesaid provisions stipulate that without prejudice to any other power  

to make rules contained elsewhere in the Part XIV of the Finance Act, 2017, the  

Central Government may, by notification, makes rules generally to carry out the  

provisions of the said Part.    

130. Reading of the said provisions indicates that except for providing the upper  

age limit and that the person appointed shall not have tenure exceeding five years  

from the date on which he enters office and shall be eligible for re-appointment,  

the Finance Act delegates the power to specify the qualifications, method of  

selection and appointment, terms of office, salaries and allowances, removal  

including resignation and all other terms and conditions of service to the Central  

Government which would act as a delegatee of the Parliament.  The governing  

statutory provisions embodied in the existing parent legislation specified in the  

column (3) of the Schedule and the rules made thereunder are overwritten and  

authority and power is conferred on the Central Government to decide  

qualifications for appointment, process for selection, and terms and conditions of  

service including salaries allowance, resignation and removal through delegated

64    

or subordinate legislation. Before we look into the vires of this delegation, it  

behoves us to recount and reflect on the approach adopted by this Court in gauging  

the validity of delegated legislation.     

131. This Court addressed this conundrum the first time in In re: The Delhi Laws  

Act,30 wherein a seven-Judge Bench delivered seven different judgements clearly  

evincing the divergence of opinion on the issue. Albeit, the majority view, as  

clarified and held by J. M. Shelat, J. speaking for the majority in B. Shama Rao v.  

Union Territory of Pondicherry,31 can be deduced as under:  

“In view of the intense divergence of opinion except for their conclusion  partially to uphold the validity of the said laws it is difficult to deduce  any general principle which on the principle of state decision can be  taken as binding in for future cases. It is trite to say that a decision is  binding not because of its conclusion but in regard to its ratio and the  principle laid down therein. The utmost therefore that can be said of  this decision is that the minimum on which there appears to be  consensus was (1) that legislatures in India both before and after the  Constitution had plenary power within their respective fields; (2) that  they were never the delegates of the British Parliament; (3) that they  had power to delegate within certain limits not by reason of such a  power being inherent in the legislative power but because such power  is recognised even in the United States of America were separatist  ideology prevails on the ground that it is necessary to effectively  exercise the legislative power in a modem state with multifarious  activities and complex problems facing legislatures and (4) that  delegation of an essential, legislative function which amounts to  abdication even partial is not permissible. All of them were agreed that  it could be in respect of subsidiary and ancillary power.”  

All the seven Judges were in unison that abdication or effacement by  

conferring the power of legislation to the subordinate authority even if partial is not  

permissible. The difference of opinion primarily arose from the meaning and scope  

of the abdication or effacement of the legislative power. On the said aspect, we  

would like to refer to the judgments of Fazl Ali, J, Mukherjea, J and Bose, J. Fazl  

Ali, J. had expressed the said principle as :   

 30 1951 AIR 332  31 (2015) 4 SCC 770

65    

“The true distinction ..... is this. The legislature cannot delegate the  power to make a law; but it can make a law to delegate a power to  determine some fact or state of things upon which the law makes, or  intends to make, its own action depend. To deny this would be to stop  the wheels of Government.    2. The true import of the rule against delegation is this:  "This rule in a broad sense involves the principle underlying the maxim,  delegatus non potest delegate, but it is apt to be misunderstood and  has been misunderstood. In my judgment, all that it means is that the  legislature cannot abdicate its legislative functions and it cannot efface  itself and set up a parallel legislature to discharge the primary duty with  which it has been entrusted. This rule has been recognised both in  America and in England ......                                           xx           xx            xx     What constitutes abdication and what class of cases will be covered  by that expression will always be a question of fact, and it is by no  means easy to lay down any comprehensive formula to define it, but it  should be recognised that the rule against abdication does not prohibit  the Legislature from employing any subordinate agency of its own  choice for doing such subsidiary acts as may be necessary to make its  legislation effective, useful and complete.”  

 The learned Judge had further observed that an act is a law when it  

embodies policies, defines standards and directs the authority chosen to act within  

certain prescribed limits and not go beyond.  The Act should be a complete  

expression of the will of the Legislature to act in a particular way and of its  

command on how it should be carried out. When the Legislature decides the  

circumstances as the best way to legislate on a subject, then, such legislation does  

not amount to abdication of powers because from the very nature to legislation it  

is manifest that when power is misused it can be withdrawn, altered and repealed.  

Most importantly, the delegate is to only adopt and extend the laws enacted by the  

Legislature.    

132. Mukherjea, J. opined that the legislative functions concern with declaring the  

legislative policy and laying down the standards which is to be enacted into a rule  

of law, and what can be delegated as the task of subordinate legislation by its very  

nature is ancillary to the statute which delegates the power to make it. When the

66    

legislative policy is enunciated with sufficient clearness or the standards are laid  

down, the Courts cannot interfere with the discretion that the Legislature has  

exercised in determining the extent of necessary delegation.  The delegatee cannot  

be allowed to check the policy declared by the legislators and cannot be given the  

power to repeal or abrogate any statute.  

133. Bose, J. while observing that the main function of the legislature is to  

legislate and not leave it to others, nevertheless acknowledged that it is impossible  

to carry on government of a modern State with its infinite complexities and  

ramifications without a large devolution of power and delegation of authority. This  

is a practical necessity which has been acknowledged even by the American  

Courts. To decide otherwise would make it difficult for the government to function  

and work effectively.     

134. A Division Bench of this Court in Ramesh Birch v. Union of India32 had  

examined the aforesaid seven opinions and culled out the ratio to observe that the  

lines of reasoning were different but nevertheless the judges had accepted the  

inevitable- that while Parliament has ample and extensive powers of legislation,  

these would include the power to entrust some of the functions and powers to  

another body or authority.  At the same time, in Delhi Laws Act (supra) the judges  

had agreed that there should be limitations on such delegation. However, on the  

question as to what is this limitation, there was a lack of consensus.  The two  

judges in Ramesh Birch (supra) relying on the ratio in Delhi Laws Act (supra),  

had observed:   

 32 1990 AIR 560

67    

“Some thought that there is no abdication or effacement unless it is total  i.e. unless Parliament surrenders its powers in favour of a "parallel"  legislature or loses control over the local authority to such an extent as to  be unable to revoke the powers given to, or to exercise effective  supervision over, the body entrusted therewith. But others were of opinion  that such "abdication" or "effacement" could not even be partial and it  would be bad if full powers to do everything that the legislature can do are  conferred on a subordinate authority, although the legislature may retain  the power to control the action of such authority by recalling such power  or repealing the Acts passed by the subordinate authority. A different way  in which the second of the above views has been enunciated--and it is this  view which has dominated since--is by saying that the legislatures cannot  wash their hands off their essential legislative function. Essential  legislative function consists in laying down the legislative policy with  sufficient clearness and in enunciating the standards which are to be  enacted into a rule of law. This cannot be delegated. What can be  delegated is only the task of subordinate legislation which is by its very  nature ancillary to the statute which delegates the power to make it and  which must be within the policy and framework of the guidance provided  by the legislature.”  

Thereupon the Division Bench had referred to the “policy and guideline”  

theory as a test to decide whether or not it is a case of excessive delegation which  

it was observed means reference and giving proper regard to the context of the Act  

and the object and purposes sought to be achieved which should be clear and it is  

not necessary that the legislation should “dot all the i’s and cross all the t’s of its  

policy”.  It is sufficient if it gives the broadest indication of the general policy of the  

legislature.    

135. We would now refer to an earlier decision of this Court in Devi Das Gopal  

Krishnan & Ors v. State of Punjab & Ors33 wherein K. Subba Rao, CJ. speaking  

for the Court had struck down Section 5 of the East Punjab General Sales Tax Act,  

1948 which had empowered the State Government to fix rate of tax to such rate as  

it deemed fit, as bad and unconstitutional observing that the needs of the State and  

the purposes of the Act did not provide sufficient guidance for fixing the rates of  

tax.  It was observed:  

 33 AIR 1967 SC 1895

68    

“16. ...But in view of the multifarious activities of a welfare State, it cannot  presumably work out all the details to suit the varying aspects of a complex  situation. It must necessarily delegate the working out of details to the  executive or any other agency. But there is a danger inherent in such a  process of delegation. An overburdened legislature or one controlled by a  powerful executive may unduly overstep the limits of delegation. It may  not lay down any policy at all; it may declare its policy in vague and general  terms; it may not set down any standard for the guidance of the executive;  it may confer an arbitrary power on the executive to change or modify the  policy laid down by it without reserving for itself any control over  subordinate legislation. This self effacement of legislative power in favour  of another agency either in whole or in part is beyond the permissible limits  of delegation. It is for a Court to hold on a fair, generous and liberal  construction of an impugned statute whether the legislature exceeded  such limits. But the said liberal on construction should not be carried by  the Courts to the extent of always trying to discover a dormant or latent  legislative policy to sustain an arbitrary power conferred on executive  authorities. It is the duty of the Court to strike down without any hesitation  any arbitrary power conferred on the executive by the legislature.”  

136. A year later in Municipal Corporation of Delhi v. Birla Cotton, Spinning  

and Weaving Mills, Delhi and Another34 this Court, however, upheld Section  

113(2) of the Delhi Municipal Act, 1957 which had empowered the corporation to  

levy certain optional taxes by observing that there were sufficient guidelines,  

safeguards and checks in the Act which prevented excessive delegation as the Act  

had provided maximum rate of tax. It was observed that the nature of body to which  

delegation is made is also a relevant factor to be taken into consideration in  

determining whether there is sufficient guidance in the matter of delegation and  

also when delegation is made to an elected body accountable to the people  

including those who paid taxes, as this acted as a sufficient check.  It was  

observed:  

“A review of these authorities therefore leads to the conclusion that so far  as this Court is concerned the principle is well established that essential  legislative function consists of the determination of the legislative policy  and its formulation as a binding rule of conduct and cannot be delegated  by the legislature. Nor is there any unlimited right of delegation inherent  in the legislative power itself. This is not warranted by the provisions of  the Constitution. The legislature must retain in its own hands the essential  legislative functions and what can be delegated is the task of subordinate  

 34 AIR 1968 SC 1232

69    

legislation necessary for implementing the purposes and objects of the  Act. Where the legislative policy is enunciated with sufficient clearness or  a standard is laid down, the courts should not interfere. What guidance  should be given and to what extent and whether guidance has been given  in a particular case at all depends on a consideration of the provisions of  the particular Act with which the Court has to deal including its preamble.  Further it appears to us that the nature of the body to which delegation is  made is also a factor to be taken into consideration in determining whether  there is sufficient guidance in the matter of delegation.”  

Thus, the guidelines in the form of providing maximum rates of tax up to  

which a local body may be given discretion to make its choice or provision for  

consultation with the people of the local area and then fixing the rates or subjecting  

the rate of tax so fixed by the local authority to the approval of the Government  

which acts as watch-dog were treated as satisfying the policy and guideline test.   

137. This ratio was followed and expounded in M.K. Papiah & Sons v. Excise  

Commissioner35 in which this Court had examined what constitutes essential  

features that the legislature cannot delegate, to observe that this cannot be  

delineated in detail but nevertheless and certainly it does not include the change  

of policy. The legislator is the master of the policy and the delegate is not free to  

switch the policy for then it would be usurpation of legislative power itself.  

Therefore, when the question of the excessive delegation arises, investigation has  

to be made whether policy of the legislation has not been indicated sufficiently or  

whether change of policy has been left to the pleasure of the delegate.  This aspect  

is of substantial importance and relevance in the present case.  

138. In Avinder Singh v. State of Punjab36 this Court had highlighted that the  

founding document, that is, the Constitution had created three instrumentalities  

 35 (1975) 1 SCC 492  36 (1979) 1 SCC 137

70    

with certain basic powers and it is axiomatic that legislative powers are not  

abdicated for this would mean betrayal of the Constitution and is intolerable in law.  

Therefore, legislature cannot self-efface its personality and make over in terms the  

plenary and essential legislative functions.  Nevertheless, the complexities of  

modern administration are bafflingly intricate and present themselves with  

urgencies and difficulties and the need for flexibility, which the direct legislation  

may not provide. Delegation of some part of the legislative powers therefore  

became inevitable and an administrative necessity. Thus, while essential  

legislative policy cannot be delegated, however inessentials can be delegated over  

to relevant agencies.    

139. Similar opinion was expressed in Registrar of Coop. Societies v. K.  

Kunjabmu37, wherein it has been observed:  

“3. …They function best when they concern themselves with general  principles, broad objectives and fundamental issues instead of technical  and situational intricacies which are better left to better equipped full time  expert executive bodies and specialist public servants. Parliament and the  State Legislatures have neither the time nor the expertise to be involved  in detail and circumstance. Nor can Parliament and the State Legislatures  visualise and provide for new, strange, unforeseen and unpredictable  situations arising from the complexity of modern life and the ingenuity of  modern man. That is the raison d'etre for delegated legislation. That is  what makes delegated legislation inevitable and indispensable. The  Indian Parliament arid the State Legislatures are endowed with plenary  power to legislate upon any of the subjects entrusted to them by the  Constitution, subject to the limitations imposed by the Constitution itself.  The power to legislate carries with it the power to delegate. But excessive  delegation may amount to abdication. Delegation unlimited may invite  despotism uninhibited. So, the theory has been evolved that the  legislature cannot delegate its essential legislative function. Legislate it  must by laying down policy and principle and delegate it may to fill in detail  and carry out policy. The legislature may guide the delegate by speaking  through the express provision empowering delegation or the other  provisions of the statute, the preamble, the scheme or even the very  subject matter of the statute. If guidance there is, wherever it may be  found, the delegation is valid. A good deal of latitude has been held to be  permissible in the case of taxing statutes and on the same principle a  generous degree of latitude must be permissible in the case of welfare  

 37 (1980) 1 SCC 340

71    

legislation, particularly those statutes which are designed to further the  Directive Principles of State Policy.”  

The above decision states that the policy and principles test can be applied  

through express provisions empowering delegation or any other provision of the  

statute including the preamble, the scheme or even the subject matter of the  

statute.   

140. We will refer to a recent decision of this Court in Keshavlal Khemchand  

and Son Private Limited & Others v. Union of India38 wherein a Division Bench  

of this Court had observed that in spite of abundance of authority on the subject  

we are not blessed with certainty, and then observed that in Kunjabmu (supra)  

this Court had declined to consider whether M.K. Papiah & Sons (supra) had  

beaten the final retreat from the position enunciated in Delhi Laws Act (supra) and  

had proceeded to examine the theory of “policy and guidelines” referring to several  

judgments.  The Division Bench then went on to observe that the earlier judgments  

had not been able to lay down the principle including as to what exactly constitutes  

“essential legislative function”, but the following inferences can be drawn:   

“51.1 The proposition that essential legislative functions cannot be  delegated does not appear to be such a clearly settled proposition and  requires a further examination which exercise is not undertaken by the  counsel appearing in the matter. We leave it open for debate in a more  appropriate case on a future date.  For the present, we confine to the  examination of the question:  

‘Whether defining every expression used in an enactment is an  essential legislative function or not?’  

 51.2 All the judgments examined above recognize that there is a need for  some amount of delegated legislation in the modern world.    51.3 If the parent enactment enunciates the legislative policy with  sufficient clarity, delegation of the power to make subordinate legislation  to carry out the purpose of the parent enactment is permissible.    51.4 Whether the policy of the legislature is sufficiently clear to guide the  delegate depends upon the scheme and the provisions of the parent Act.  

 38 (2015) 4 SCC 770

72    

 51.5 The nature of the body to whom the power is delegated is also a  relevant factor in determining "whether there is sufficient guidance in the  matter of delegation."  

141. Appropriate in regard to ‘policy and guideline’ test would be reference to yet  

another earlier judgment of this Court in Gwalior Rayon Silk Mfg. (Wvg.) Co. v.  

Asstt. Commissioner of Sales39 wherein while referring to the views of an  

eminent American jurist Willioughby, it was stated:  

“24. The matter has been dealt with on page 1637 of Vol. III in Willoughby  on the Constitution of the United States, 2nd Edition, in the following  words:    "The qualifications to the rule prohibiting the delegation of legislative  power which have been earlier adverted to are those which provide that  while the real law-making power may not be delegated, a discretionary  authority may be granted to executive and administrative authorities: (1)  to determine in specific cases when and how the powers legislatively  conferred are to be exercised; and (2) to establish administrative rules and  regulations, binding both upon their subordinates and upon the public,  fixing in detail the manner in which the requirements of the statutes are to  be met, and the rights therein created to be enjoyed."    25. The matter has also been dealt with in Corpus Juris Secundum Vol.  73, page 324. It is stated there that the law-making power may not be  granted to an administrative body to be exercised under the guise of  administrative discretion. Accordingly, in delegating powers to an  administrative body with respect to the administration of statutes, the  Legislature must ordinarily prescribe a policy, standard, or rule for their  guidance and must not vest them with an arbitrary and uncontrolled  discretion with regard thereto, and a statute or ordinance which is deficient  in this respect is invalid. In other words, in order to avoid the pure  delegation of legislative power by the creation of an administrative  agency, the Legislature must set limits on such agency's power and enjoin  on it a certain course of procedure and rules of decision in the  performance of its function; and, if the legislature fails to prescribe with  reasonable clarity the limits of power delegated to an administrative  agency, or if those limits are too broad, its attempt to delegate is a nullity.”  

   142. It is in this context we have to examine whether the plea of excessive  

delegation would prevail and merits acceptance as Section 184 of the Finance Act  

does not prescribe the qualifications for appointment, and terms and conditions of  

service.  It will be difficult to hold that Part XIV of the Finance Act suffers from the  

 39 (1974) 4 SCC 98

73    

vice of unguided delegation as it fails to clearly specify the eligibility qualifications  

for the Members, Chairpersons, Chairman etc. of different Tribunals as such  

requirements, though important, are not per se functionally undelegatable.   

143. The objects of the parent enactments as well as the law laid down by this  

Court in R.K. Jain (supra), L Chandra Kumar (supra), R. Gandhi (supra), Madras  

Bar Association (supra) and Gujarat Urja Vikas (supra) undoubtedly bind the  

delegate and mandatorily requires the delegate under Section 184 to act strictly in  

conformity with these decisions and the objects of delegated legislation stipulated  

in the statutes. It must also be emphasised that the Finance Act, 2017 nowhere  

indicates that the legislature had intended to differ from, let alone make  

amendments, to remove the edifice and foundation of such decisions by enacting  

the Finance Act. Indeed, the learned Attorney General was clear in suggesting that  

Part XIV was inserted with a view to incorporate the changes recommended by this  

Court in earlier decisions.   

144. Independence of a quasi-judicial authority like the tribunal highlighted in the  

above decisions would be, therefore, read as the policy and guideline applicable.   

Principle of independence of judiciary/tribunal has within its fold two broad  

concepts, as held in Supreme Court Advocates-On-Record Association and  

Another v. Union of India40 {See paragraph 714}, (i) independence of an  

individual judge, that is, decisional independence; and (ii) independence of the  

judiciary or the Tribunal as an institution or an organ of the State, that is, functional  

 40 (2016) 5 SCC 1

74    

independence. Individual independence has various facets which include security  

of tenure, procedure for renewal, terms and conditions of service like salary,  

allowances, etc. which should be fair and just and which should be protected and  

not varied to his/her disadvantage after appointment.  Independence of the  

institution refers to sufficient degree of separation from other branches of the  

government, especially when the branch is a litigant or one of the parties before  

the tribunal.  Functional independence would include method of selection and  

qualifications prescribed, as independence begins with appointment of persons of  

calibre, ability and integrity. Protection from interference and independence from  

the executive pressure, fearlessness from other power centres – economic and  

political, and freedom from prejudices acquired and nurtured by the class to which  

the adjudicator belongs, are important attributes of institutional independence.  

 145. Further, cursory examination of the specified enactments mentioned in  

column (3) of the Eighth Schedule reveals that most enactments did not stipulate  

the manner of appointment, terms of office, salaries and allowances, resignation,  

removal, that is, the terms and conditions of service, which stipulations are  

delegated and they are not part of the principal enactment. For example, sub-

section (1) of Section 252 of the Income Tax Act, 1961 states that the Central  

Government may constitute the Appellate Tribunal consisting of as many judicial  

and accountant members as it thinks fit to exercise the powers and discharge the  

functions prescribed by the Act. Sub-sections (3) and (4) state that the Central  

Government shall ordinarily appoint a judicial Member as the President and may  

appoint one or more members as Vice President or Senior Vice President.  Sub-

section (2) prescribes the eligibility requirements for being a judicial member and

75    

sub-section (2A) stipulates the eligibility requirements for being an administrative  

member.  The Income Tax Act does not prescribe or stipulate manner or method  

for selection or terms and conditions of service.  This is equally true for the  

Appellate Tribunal constituted under the Central Excise Act.    

146. Wanchoo, CJ. in The Municipal Corporation of Delhi (supra) had  

observed:  

“13. The question as to the limits of permissible delegation of legislative power  by a legislature to a subordinate authority has come before this Court in a  number of cases and the law as laid down by this Court is not in doubt now.  Considering the complexity of modern life it is recognised on all hands that  legislature cannot possibly have time to legislate in every minute detail. That is  why it has been recognised that it is open to the legislature to delegate to  subordinate authorities the power to make ancillary rules for the purpose of  carrying out the intention of the legislature indicated in the law which gives power  to frame such ancillary rules. The matter came before this Court for the first time  In re The Delhi Laws Act, 1912 and it was held in that case that it could not be  said that an unlimited right of delegation was inherent in the legislative power  itself. This was not warranted by the provisions of the Constitution, which vested  the power of legislation either in Parliament or State legislatures and the  legitimacy of delegation depended upon its being used as an ancillary measure  which the legislature considered to be necessary for the purpose of exercising  its legislative powers effectively and completely. The legislature must retain in  its own hands the essential legislative function. Exactly what constituted  “essential legislative function”, it was held further, was difficult to define in  general terms, but this much was clear that the essential legislative function must  at least consist of the determination of the legislative policy and its formulation  as a binding rule of conduct. Thus where the law passed by the legislature  declares the legislative policy and lays down the standard which is enacted into  a rule of law, it can leave the task of subordinate legislation which by its very  nature is ancillary to the statute to subordinate bodies i.e. the making of rules,  regulations or bye-laws. The subordinate authority must do so within the frame- work of the law which makes the delegation, and such subordinate legislation  has to be consistent with the law under which it is made and cannot go beyond  the limits of the policy and standard laid down in the law. Provided the legislative  policy is enunciated with sufficient clearness or a standard is laid down, the  courts should not interfere with the discretion that undoubtedly rests with the  legislature itself in determining the extent of delegation necessary in a particular  case.    

xx  xx  xx    28. A review of these authorities therefore leads to the conclusion that so far as  this Court is concerned the principle is well established that essential legislative  function consists of the determination of the legislative policy and its formulation  as a binding rule of conduct and cannot be delegated by the legislature. Nor is  there any unlimited right of delegation inherent in the legislative power itself. This  is not warranted by the provisions of the Constitution. The legislature must retain  in its own hands the essential legislative functions and what can be delegated is  the task of subordinate legislation necessary for implementing the purposes and

76    

objects of the Act. Where the legislative policy is enunciated with sufficient  clearness or a standard is laid down, the courts should not interfere. What  guidance should be given and to what extent and whether guidance has been  given in a particular case at all depends on a consideration of the provisions of  the particular Act with which the Court has to deal including its preamble. Further  it appears to us that the nature of the body to which delegation is made is also a  factor to be taken into consideration in determining whether there is sufficient  guidance in the matter of delegation.”  

   147. Referring to The Municipal Corporation of Delhi (supra), this Court in  

Keshav Lal, had observed:  

 “45. ... The Court held that there was no impermissible delegation of legislative  power. Hidayatullah, J. speaking for himself and for Ramaswami, J. agreed with  the conclusion reached at by Wanchoo, C.J., though on slightly different  reasons.”  

148. On examining the Constitutional scheme, the statutes which had created  

tribunals and the precedents of this Court laying down attributes of independence  

of tribunals in different facets, we do not think that the power to prescribe  

qualifications, selection procedure and service conditions of members and other  

office holders of the tribunals is intended to vest solely with the Legislature for all  

times and purposes.  Policy and guidelines exist.  Subject to aforesaid, the  

submission of learned Attorney General that Section 184 was inserted to bring  

uniformity and with a view to harmonise the diverse and wide-ranging qualifications  

and methods of appointment across different tribunals carries weight and, in our  

view, needs to be accepted.  

 149.  Cautioning against the potential misuse of Section 184 by the executive, it  

was vehemently argued by the learned counsel for the petitioner(s) that any  

desecration by the Executive of such powers threatens and poses a risk to the  

independence of the tribunals. A mere possibility or eventuality of abuse of

77    

delegated powers in the absence of any evidence supporting such claim, cannot  

be a ground for striking down the provisions of the Finance Act, 2017. It is always  

open to a Constitutional court on challenge made to the delegated legislation  

framed by the Executive to examine whether it conforms to the parent legislation  

and other laws, and apply the “policy and guideline” test and if found contrary, can  

be struck down without affecting the constitutionality of the rule making power  

conferred under Section 186 of the Finance Act, 2017.  

ISSUE III:  IF SECTION 184 IS VALID, WHETHER TRIBUNAL, APPELLATE TRIBUNAL  

AND OTHER AUTHORITIES (QUALIFICATIONS, EXPERIENCE AND OTHER CONDITIONS OF  

SERVICE OF MEMBERS) RULES, 2017 ARE IN CONSONANCE WITH THE PRINCIPAL ACT  

AND VARIOUS DECISIONS OF THIS COURT ON FUNCTIONING OF TRIBUNALS?   

150. Given that the Central Government has formulated the Tribunal, Appellate  

Tribunal and other Authorities (Qualifications, Experience and other Conditions of  

Service of Members) Rules, 2017, (hereinafter referred to as “the Rules”) under  

Section 184 of the Finance Act, 2017, it is necessary at this stage to examine  

whether the Rules conform to the judicial principles inherent in our Constitutional  

scheme as established by this Court in its earlier dicta. Some salient provisions of  

the Rules are extracted hereunder:  

“TRIBUNAL, APPELLATE TRIBUNAL AND OTHER AUTHORITIES (QUALIFICATIONS,  

EXPERIENCE AND OTHER CONDITIONS OF SERVICE OF MEMBERS) RULES, 2017  

xxxxxx  

3. Qualifications for appointment of Member.— The qualification for appointment  

of the Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice-

President, Presiding Officer, Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member or  

Member of the Tribunal, Appellate Tribunal or, as the case may be, Authority shall  

be such as specified in column (3) of the Schedule annexed to these rules.

78    

4. Method of recruitment.— (1) The Chairman, Chairperson, President, Vice-

Chairman, Vice-Chairperson, Vice-President, Presiding Officer, Accountant  

Member, Administrative Member, Judicial Member, Expert Member, Law Member,  

Revenue Member, Technical Member or Member of the Tribunal, Appellate Tribunal  

or, as the case may be, Authority shall be appointed by the Central Government on  

the recommendation of a Search-cum-Selection Committee specified in column (4)  

of the said Schedule in respect of the Tribunal, Appellate Tribunal or, as the case  

may be, Authority specified in column (2) of the said Schedule.  

(2) The Secretary to the Government of India in the Ministry or Department under  

which the Tribunal, Appellate Tribunal or, as the case may be, Authority is  

constituted or established shall be the convener of the Search-cum-Selection  

Committee.  

(3) The Search-cum-Selection Committee shall determine its procedure for making  

its recommendation.  

(4) No appointment of Chairman, Chairperson, President, Vice-Chairman, Vice-

Chairperson, Vice-President, Presiding Officer, Accountant Member, Administrative  

Member, Judicial Member, Expert Member, Law Member, Revenue Member,  

Technical Member or Member of the Tribunal, Appellate Tribunal or Authorities shall  

be invalid merely by reason of any vacancy or absence in the Search-cum-Selection  

Committee.  

(5) Nothing in this rule shall apply to the appointment of Chairman, Chairperson,  

President, Vice-Chairman, Vice-Chairperson, Vice-President, Presiding Officer,  

Accountant Member, Administrative Member, Judicial Member, Expert Member,  

Law Member, Revenue Member, Technical Member or Member of the Tribunal,  

Appellate Tribunal or, as the case may be, Authority functioning as such immediately  

before the commencement of these rules.  

xxxxxxx  

6. Resignation by a Member.— A Member may, by writing under his hand  

addressed to the Central Government, resign his office at any time:  

Provided that the Member shall, unless he is permitted by the Central Government  

to relinquish office sooner, continue to hold office until the expiry of three months  

from the date of receipt of such notice or until a person duly appointed as a  

successor enters upon his office or until the expiry of his term of office, whichever is  

the earliest.  

7. Removal of Member from office.— The Central Government may, on the  

recommendation of a Committee constituted by it in this behalf, remove from office  

any Member, who —  

(a) has been adjudged as an insolvent; or  

(b) has been convicted of an offence which, in the opinion of the Central  

Government, involves moral turpitude; or  

(c) has become physically or mentally incapable of acting as such a Member; or  

(d) has acquired such financial or other interest as is likely to affect prejudicially his  

functions as a Member; or  

(e) has so abused his position as to render his continuance in office prejudicial to  

the public interest:

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Provided that where a Member is proposed to be removed on any ground specified  

in clauses (b) to (e), the Member shall be informed of the charges against him and  

given an opportunity of being heard in respect of those charges:  

Provided further that the Chairperson or member of the National Company Appellate  

Tribunal shall be removed from office in consultation with the Chief Justice of India.  

8. Procedure for inquiry of misbehavior or incapacity of the Member.— (1) If a  

written complaint is received by the Central Government, alleging any definite  

charge of misbehavior or incapacity to perform the functions of the office in respect  

of a Chairman, Vice-Chairman, Chairperson, Vice-Chairperson, President, Vice-

President, Presiding Officer, Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member or  

Member, the Ministry or Department of the Government of India under which the  

Tribunal, Appellate Tribunal or, as the case may be, Authority is constituted or  

established, shall make a preliminary scrutiny of such complaint.  

(2) If on preliminary scrutiny, the Ministry or Department of the Government of India  

under which the Tribunal, Appellate Tribunal or, as the case may be, Authority is  

constituted or established, is of the opinion that there are reasonable grounds for  

making an inquiry into the truth of any misbehavior or incapacity of a Chairman,  

Vice-Chairman, Chairperson, Vice-Chairperson, President, Vice-President,  

Presiding Officer, Accountant Member, Administrative Member, Judicial Member,  

Expert Member, Law Member, Revenue Member, Technical Member or Member, it  

shall make a reference to the Committee constituted under rule 7 to conduct the  

inquiry.  

(3) The Committee shall complete the inquiry within such time or such further time  

as may be specified by the Central Government.  

(4) After the conclusion of the inquiry, the Committee shall submit its report to the  

Central Government stating therein its findings and the reasons therefor on each of  

the charges separately with such observations on the whole case as it may think fit.  

(5) The Committee shall not be bound by the procedure laid down by the Code of  

Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural  

justice and shall have power to regulate its own procedure, including the fixing of  

date, place and time of its inquiry.  

9. Term of office of Member.— Save as otherwise provided in these rules, the  

Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice  

President, Presiding Officer, Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member or,  

as the case may be, Member shall hold office for a term as specified in column (5)  

of the said Schedule and shall hold the office up to such age as specified in column  

(6) in the said Schedule from the date on which he enters upon his office and shall  

be eligible for reappointment.  

10. Casual vacancy.— (1) In case of a casual vacancy in the office of,—  

(a) the Chairman, Chairperson, President, or Presiding Officer of the Security  

Appellate Tribunal, the Central Government shall have the power to appoint the  

senior most Vice-Chairperson or Vice-Chairman, Vice-President or in his absence,  

one of the Accountant Member, Administrative Member, Judicial Member, Expert  

Member, Law Member, Revenue Member, Technical Member, or Member of the  

Tribunal, Appellate Tribunal or, as the case may be, Authority to officiate as  

Chairperson, Chairman, President or Presiding Officer.

80    

(b) the Chairperson of the Debts Recovery Appellate Tribunal, the Central  

Government shall have power to appoint the Chairperson of another Debts  

Recovery Appellate Tribunal to officiate as Chairperson and in case of a casual  

vacancy in the office of the Presiding Officer of the Debts Recovery Tribunal, the  

Chairperson of the Debts Recovery Appellate Tribunal shall have power to appoint  

the Presiding Officer of another Debts Recovery Appellate Tribunal to officiate as  

Presiding Officer.  

11. Salary and allowances.— (1) The Chairman, Chairperson or President of the  

Tribunal, Appellate Tribunal or, as the case may be, Authority or the Presiding  

Officer of the Security Appellate Tribunal shall be paid a salary of Rs. 2,50,000  

(fixed) and other allowances and benefits as are admissible to a Central  

Government officer holding posts carrying the same pay.  

(2) The Vice-Chairman, Vice-Chairperson, Vice-President, Accountant Member,  

Administrative Member, Judicial Member, Expert Member, Law Member, Revenue  

Member, Technical Member or, as the case may be, Member shall be paid a salary  

of Rs. 2,25,000 and shall be entitled to draw allowances as are admissible to a  

Government of India Officer holding Group ‘A’ post carrying the same pay.  

(3) A Presiding Officer of the Debt Recovery Tribunal or a Presiding Officer of the  

Industrial Tribunal constituted by the Central Government shall be paid a salary of  

Rs. 1,44,200-2,18,200 and shall be entitled to draw allowances as are admissible to  

a Government of India officer holding Group ‘A’ post carrying the same pay.  

(4) In case of a person appointed as the Chairman, Chairperson, President, Vice-

Chairman, Vice-Chairperson, Vice President, Presiding Officer, Accountant  

Member, Administrative Member, Judicial Member, Expert Member, Law Member,  

Revenue Member, Technical Member or Member, as the case may be, is in receipt  

of any pension, the pay of such person shall be reduced by the gross amount of  

pension drawn by him.  

12. Pension, Gratuity and Provident Fund.— (1) In case of a serving Judge of the  

Supreme Court, a High Court or a serving Judicial Member of the Tribunal or a  

member of the Indian Legal Service or a member of an organised Service appointed  

to the post of the Chairperson, Chairman, President or Presiding Officer of the  

Security Appellate Tribunal, the service rendered in the Tribunal, Appellate Tribunal  

or, as the case may be, Authority shall count for pension to be drawn in accordance  

with the rules of the service to which he belongs and he shall be governed by the  

provisions of the General Provident Fund (Central Services) Rules, 1960 and the  

Contribution Pension System.  

(2) In all other cases, the Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member or  

Member shall be governed by the provisions of the Contributory Provident Fund  

(India) Rules, 1962 and the Contribution Pension System.  

(3) Additional pension and gratuity shall not be admissible for service rendered in  

the Tribunal, Appellate Tribunal or, as the case may be, Authority.  

13. Leave.— (1) The Chairman, Chairperson, President, Vice-Chairman, Vice-

Chairperson, Vice President, Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member,  

Presiding Officer or a Member shall be entitled to thirty days of earned Leave for  

every year of service.

81    

(2) Casual Leave not exceeding eight days may be granted to the Chairman,  

Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice President,  

Accountant Member, Administrative Member, Judicial Member, Expert Member,  

Law Member, Revenue Member or Technical Member, Presiding Officer or a  

Member in a calendar year.  

(3) The payment of leave salary during leave shall be governed by rule 40 of the  

Central Civil Services (Leave) Rules, 1972.  

(4) The Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice  

President, Presiding Officer, Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member or  

Member shall be entitled to encashment of leave in respect of the earned Leave  

standing to his credit, subject to the condition that maximum leave encashment,  

including the amount received at the time of retirement from previous service shall  

not in any case exceed the prescribed limit under the Central Civil Service (Leave)  

Rules, 1972.  

14. Leave sanctioning authority.— (1) Leave sanctioning authority,—  

(a) for the Vice-Chairman, Vice-Chairperson, Vice-President, Presiding Officer of  

the Debts Recovery Tribunal and Industrial Tribunal, Accountant Member,  

Administrative Member, Judicial Member, Expert Member, Law Member, Revenue  

Member, Technical Member or Member shall be Chairman, Chairperson or as the  

case may be, President; and  

(b) for the Chairman, Chairperson, Presiding Officer of Security Appellate Tribunal  

or President, shall be the Central Government, who shall also be sanctioning  

authority for Accountant Member, Administrative Member, Judicial Member, Expert  

Member or Member in case of absence of Chairman, Chairperson, Presiding Officer  

of Security Appellate Tribunal or President.  

(2) The Central Government shall be the sanctioning authority for foreign travel to  

the Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice-

President, Accountant Member, Administrative Member, Judicial Member, Expert  

Member, Technical Member, Presiding Officer or a Member.  

xxx  

18. Other conditions of service.— (1) The terms and conditions of service of a  

Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice-

President, Accountant Member, Administrative Member, Judicial Member, Expert  

Member, Technical Member, Presiding Officer or Member with respect to which no  

express provision has been made in these rules, shall be such as are admissible to  

a Group ‘A’ Officer of the Government of India of a corresponding status.  

(2) The Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice-

President, Administrative Member, Judicial Member, Expert Member, Technical  

Member, Presiding Officer or Member shall not practice before the Tribunal,  

Appellate Tribunal or Authority after retirement from the service of that Tribunal,  

Appellate Tribunal or, as the case may be, Authority.  

(3) The Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice-

President, Accountant Member, Administrative Member, Judicial Member, Expert  

Member, Technical Member, Presiding Officer or Member shall not undertake any  

arbitration work while functioning in these capacities in the Tribunal, Appellate  

Tribunal or Authority.

82    

(4) The Chairman, Chairperson, President, Vice-Chairman, Vice-Chairperson, Vice-

President, Presiding Officer, Accountant Member, Administrative Member, Judicial  

Member, Expert Member, Law Member, Revenue Member, Technical Member or  

Member of the Tribunal, Appellate Tribunal or, as the case may be, Authority shall  

not, for a period of two years from the date on which they cease to hold office, accept  

any employment in, or connected with the management or administration of, any  

person who has been a party to a proceeding before the Tribunal, Appellate Tribunal  

or, as the case may be, Authority:  

Provided that nothing contained in this rule shall apply to any employment under the  

Central Government or a State Government or a local authority or in any statutory  

authority or any corporation established by or under any Central, State or Provincial  

Act or a Government company as defined in clause (45) of Section 2 of the  

Companies Act, 2013 (18 of 2013).  

xxx  

20. Power to relax.— Where the Central Government is of the opinion that it is  

necessary or expedient so to do, it may, by order for reasons to be recorded in  

writing relax any of the provisions of these rules with respect to any class or category  

of persons.  

21. Interpretation.— If any question arises relating to the interpretation of these  

rules, the decision of the Central Government thereon shall be final.  

22. Saving.— Nothing in these rules shall affect reservations, relaxation of age limit  

and other concessions required to be provided for the Scheduled Castes, Scheduled  

Tribes, Ex-servicemen and other special categories of persons in accordance with  

the orders issued by the Central Government from time to time in this regard.”  

(A) Composition of Search-cum-Selection Committees  

151. The composition of some of the Search-cum-Selection Committees, as  

provided in the Rules, have been reproduced below illustratively:  

"Industrial Tribunal:  

Search-cum-Selection Committee for the post of the Presiding Officer, -   

(i) a person to be nominated by the Central Government-chairperson;   

(ii) Secretary to the Government of India, Ministry of Labour and Employment-  

member;   

(iii) .Secretary to the Government of India to be nominated by the Central  

Government-member;   

(iv)  two experts to be nominated by the Central Government- members.  

83    

Income Tax Appellate Tribunal:  

(A) Search-cum-Selection Committee for the post of the President and Vice-

President, -   

(i) a sitting Judge of Supreme Court to be nominated by the Chief Justice of India-

chairperson;   

(ii) the President, Income-tax Appellate Tribunal-member; and   

(iii) the Secretary to the Government of India, Ministry of Law and Justice  

(Department of Legal Affairs)- member.   

(B) Search-cum-Selection Committee for the Accountant Member and Judicial  

Member, –  

(i) a nominee of the Minister of Law and Justice-chairperson;   

(ii) Secretary to the Government of India, Ministry of Law and Justice (Department  

of Legal Affairs)- member;   

(iii) President of the Income tax Appellate Tribunal – member; and   

(iv) such other persons, if any, not exceeding two, as the Minister of Law and Justice  

may appoint-member.  

Central Administrative Tribunal:  

(A) Search-cum-Selection Committee for the post of Chairman and Judicial  

Member, –   

(i) Chief Justice of India or his nominee- chairperson;   

(ii) Chairman of the Central Administrative Tribunal, Principal Bench – member;   

(iii) Secretary to the Government of India, (Department of Personnel and Training)-  

member;   

(iv) Secretary to the Government of India, Ministry of Law and Justice -member;   

(v) one expert, to be nominated by the Central Government of India - member.   

(B) Search-cum-Selection Committee for the post of Administrative Member, –   

(a) a person to be nominated by the Central Government - chairperson;   

(b) Chairman of the, Central Administrative Tribunal – member;  

(c) Secretary to the Government of India, (Department of Personnel and Training)-  

member;   

(d) Secretary to the Government of India, Ministry of Law and Justice -member;   

(e) one expert, to be nominated by the Government of India - member.”  

152. Composition of a Search-cum-Selection Committee is contemplated in a  

manner whereby appointments of Member, Vice-President and President are  

predominantly made by nominees of the Central Government. A perusal of the  

Schedule to the Rules shows that save for token representation of the Chief Justice

84    

of India or his nominee in some Committees, the role of the judiciary is virtually  

absent.   

153. We are in agreement with the contentions of the Learned Counsel for the  

petitioner(s), that the lack of judicial dominance in the Search-cum-Selection  

Committee is in direct contravention of the doctrine of separation of powers and is  

an encroachment on the judicial domain. The doctrine of separation of powers has  

been well recognised and re-interpreted by this Court as an important facet of the  

basic structure of the Constitution, in its dictum in Kesavananda Bharati v. State  

of Kerala41, and several other later decisions. The exclusion of the Judiciary from  

the control and influence of the Executive is not limited to traditional Courts alone,  

but also includes Tribunals since they are formed as an alternative to Courts and  

perform judicial functions.  

154. Clearly, the composition of the Search-cum-Selection Committees under the  

Rules amounts to excessive interference of the Executive in appointment of  

members and presiding officers of statutory Tribunals and would undoubtedly be  

detrimental to the independence of judiciary besides being an affront to the doctrine  

of separation of powers.  

155. In R.K. Jain v. Union of India (supra), a three-Judge Bench of this Court  

asserted the need for independent system of appointment and administration of  

 41 (1973) 4 SCC 225

85    

Tribunals to maintain public trust in the judiciary while expressing its agony over  

inefficacy of the working of Tribunals in the country. In addition to discussing the  

perils of providing direct statutory appeals to the Apex Court from the Tribunals, it  

was also suggested that there is an imminent need for reform in the manner of  

recruitment of members of Tribunals to maintain public faith in the institution of  

judiciary.   Adjudication of disputes by technical members should be confined only  

to cases requiring specialised technical knowledge. [Union of India vs. Madras  

Bar Association42 and Madras Bar Association vs. Union of India & Anr.43]  

156. Subsequently, in its dictum in L. Chandra Kumar v. Union of India (supra),  

a seven-Judge Bench of this Court noted the observations in the Malimath  

Committee Report, discussing the administration of the Tribunals established  

under Article 323-A and Article 323-B of the Constitution. The Malimath Committee  

Report had pointed out that a Tribunal constituted in substitution of any other Court  

should have similar standards of appointment, qualifications and conditions of  

service, to inspire the confidence of the public at large. Shortcomings in  

composition, tenure, conditions of service, etc. of the Members of Tribunals were  

also highlighted in the Report as reasons for increased intervention by the  

Executive in the working of judicial institutions. The relevant extract is reproduced  

below:  

“88. …The observations contained in the Report, to this extent they contain a review  

of the functioning of the Tribunals over a period of three years or so after their  

institution, will be useful for our purpose. Chapter VIII of the second volume of the  

Report, “Alternative Modes and Forums for Dispute Resolution”, deals with the issue  

at length. After forwarding its specific recommendations on the feasibility of setting  

up “Gram Nyayalayas”, Industrial Tribunals and Educational Tribunals, the  

Committee has dealt with the issue of Tribunals set up under Articles 323-A and  

 42 (2010) 11 SCC 1  43 (2014) 10 SCC 1 [Para 107 & 126]

86    

323-B of the Constitution. The relevant observations in this regard, being of  

considerable significance to our analysis, are extracted in full as under:  

“Functioning of Tribunals  

8.63 Several tribunals are functioning in the country. Not all of them, however,  

have inspired confidence in the public mind. The reasons are not far to seek.  

The foremost is the lack of competence, objectivity and judicial approach.  

The next is their constitution, the power and method of appointment of  

personnel thereto, the inferior status and the casual method of working. The  

last is their actual composition; men of calibre are not willing to be appointed  

as presiding officers in view of the uncertainty of tenure, unsatisfactory  

conditions of service, executive subordination in matters of administration  

and political interference in judicial functioning. For these and other reasons,  

the quality of justice is stated to have suffered and the cause of expedition is  

not found to have been served by the establishment of such tribunals.  

8.64 Even the experiment of setting up of the Administrative Tribunals under  

the Administrative Tribunals Act, 1985, has not been widely welcomed. Its  

members have been selected from all kinds of services including the Indian  

Police Service. The decision of the State Administrative Tribunals are not  

appealable except under Article 136 of the Constitution. On account of the  

heavy cost and remoteness of the forum, there is virtual negation of the right  

of appeal. This has led to denial of justice in many cases and consequential  

dissatisfaction. There appears to be a move in some of the States where they  

have been established for their abolition.  

Tribunals — Tests for Including High Court's Jurisdiction  

8.65 A Tribunal which substitutes the High Court as an alternative institutional  

mechanism for judicial review must be no less efficacious than the High  

Court. Such a tribunal must inspire confidence and public esteem that it is a  

highly competent and expert mechanism with judicial approach and  

objectivity. What is needed in a tribunal, which is intended to supplant the  

High Court, is legal training and experience, and judicial acumen, equipment  

and approach. When such a tribunal is composed of personnel drawn from  

the judiciary as well as from services or from amongst experts in the field,  

any weightage in favour of the service members or expert members and  

value-discounting the judicial members would render the tribunal less  

effective and efficacious than the High Court. The Act setting up such a  

tribunal would itself have to be declared as void under such circumstances.  

The same would not at all be conducive to judicial independence and may  

even tend, directly or indirectly, to influence their decision-making process,  

especially when the Government is a litigant in most of the cases coming  

before such tribunal. (See S.P. Sampath Kumar v. Union of India, (1987) 1  

SCC 124) The protagonists of specialist tribunals, who simultaneously with  

their establishment want exclusion of the writ jurisdiction of the High Courts  

in regard to matters entrusted for adjudication to such tribunals, ought not to  

overlook these vital and important aspects. It must not be forgotten that what  

is permissible to be supplanted by another equally effective and efficacious  

institutional mechanism is the High Courts and not the judicial review itself.  

Tribunals are not an end in themselves but a means to an end; even if the  

laudable objectives of speedy justice, uniformity of approach, predictability of  

decisions and specialist justice are to be achieved, the framework of the  

tribunal intended to be set up to attain them must still retain its basic judicial

87    

character and inspire public confidence. Any scheme of decentralisation of  

administration of justice providing for an alternative institutional mechanism  

in substitution of the High Courts must pass the aforesaid test in order to be  

constitutionally valid….”"  

157. We are of the view that the Search-cum-Selection Committee as formulated  

under the Rules is an attempt to keep the judiciary away from the process of  

selection and appointment of Members, Vice-Chairman and Chairman of  

Tribunals. This Court has been lucid in its ruling in Supreme Court Advocates-

on-Record Assn. v. Union of India44 (Fourth Judges Case), wherein it was held  

that primacy of judiciary is imperative in selection and appointment of judicial  

officers including Judges of High Court and Supreme Court. Cognisant of the  

doctrine of Separation of Powers, it is important that judicial appointments take  

place without any influence or control of any other limb of the sovereign.  

Independence of judiciary is the only means to maintain a system of checks and  

balances on the working of Legislature and the Executive. The Executive is a  

litigating party in most of the litigation and hence cannot be allowed to be a  

dominant participant in judicial appointments.   

158. We are in complete agreement with the analogy elucidated by the  

Constitution Bench in the Fourth Judges Case (supra) for compulsory need for  

exclusion of control of the Executive over quasi-judicial bodies of Tribunals  

discharging responsibilities akin to Courts. The Search-cum-Selection Committees  

as envisaged in the Rules are against the constitutional scheme inasmuch as they  

 44 (2016) 5 SCC 1.

88    

dilute the involvement of judiciary in the process of appointment of members of  

tribunals which is in effect an encroachment by the executive on the judiciary.    

(B) Qualifications of members and presiding officers  

159. The Rules also prescribe the qualifications for Chairperson, Vice-

Chairperson, Member, etc. of both judicial and technical members. A bare perusal  

of the Rules reveals that while prescribing the qualifications of technical member,  

the prior dicta of this Court has been ignored by the Central Government inasmuch  

as the technical members are being appointed without any adjudicatory  

experience. The qualifications for appointment as technical member in the  

Customs, Excise and Service Tax Appellate Tribunal as prescribed under the  

Rules are illustratively reproduced below:  

"(1) A person shall not be qualified for appointment as President unless, -  

(a) he is or has been a Judge of a High Court; or  

(b) he is the member of the Appellate Tribunal.  

(2) A person shall not be qualified for appointment as a Judicial Member, unless, -  

(a) he has for at least ten years held a judicial office in the territory of India;  

or  

(b) he has been a member of the Indian Legal Service and has held a post in  

Grade-I of that Service or any equivalent or higher post for at least three  

years; or  

(c) he has been an advocate for at least ten years.  

(3) A person shall not be qualified for appointment as a Technical Member unless  

he has been a member of the Indian Revenue Service (Customs and Central Excise  

Service Group 'A') and has held the post of Commissioner of Customs or Central  

Excise or any equivalent or higher post for at least three years."  

160. In addition to this, there has been a blatant dilution of judicial character in  

appointments whereby candidates without any judicial experience are prescribed  

to be eligible for adjudicatory posts such as that of the Presiding Officer.

89    

Illustratively, the qualifications for Presiding Officer in Industrial Tribunal as  

specified in the Rules may be noticed below:  

“A person shall not be qualified for appointment as Presiding Officer, unless he, -  

(a) is, or has been, or is qualified to be, a Judge of a High Court; or  

(b) he has, for a period of not less than three-years, been a District Judge or an  

Additional District Judge; or  

(c) is a person of ability, integrity and standing, and having special knowledge of,  

and professional experience of not less than twenty years in economics, business,  

commerce, law, finance, management, industry, public affairs, administration,  

labour relations, industrial disputes or any other matter which in the opinion of the  

Central Government is useful to the Industrial Tribunal.”  

161.  The contentions of the Learned Counsel for petitioner(s) are, therefore, duly  

accepted by this Court insofar as it is contended that the Rules have an effect of  

dilution of the judicial character in adjudicatory positions. It has been repeatedly  

ruled by this Court in a catena of decisions that judicial functions cannot be  

performed by technical members devoid of any adjudicatory experience.   

162. In Madras Bar Assn. v. Union of India (supra), a five-judge Bench of this  

Court reiterated the urgent need to monitor the pressure and/or influence of the  

executive on the Members of the Tribunals. It was asserted that any Tribunal which  

sought to replace the High Court must be no less independent or judicious in its  

composition. It was also clarified that the Members of the Tribunal, replacing any  

Court, including the High Court must possess expertise in law and shall have  

appropriate legal experience. Even though Parliament can transfer jurisdiction from  

the traditional Courts to any other analogous Tribunal, the Tribunal must be  

manned by members having qualifications equivalent to that of the Court from  

which adjudicatory function is transferred. Hence, any adjudication transferred to

90    

a Technical or Non-Judicial member is a clear act of dilution and an encroachment  

upon the independence of judiciary. It was further ruled by this Court that even  

though the legislature has the powers to reorganise or prescribe qualifications for  

members of Tribunals, it is open for this Court to exercise “judicial review” of the  

prescribed standards, if the adjudicatory standards are adversely affected. The  

decision of this Court read as follows:  

“105. … It was also sought to be asserted that the tribunal constituted under the  

enactment being a substitute of the High Court ought to have been constituted in a  

manner that it would be able to function in the same manner as the High Court itself.  

Since insulation of the judiciary from all forms of interference even from the  

coordinate branches of the Government was by now being perceived as a basic  

essential feature of the Constitution, it was felt that the same independence from  

possibility of executive pressure or influence needed to be ensured for the  

Chairman, Vice-Chairman and Members of the Administrative Tribunal. In recording  

its conclusions, even though it was maintained that “judicial review” was an integral  

part of the “basic structure” of the Constitution yet it was held that Parliament was  

competent to amend the Constitution, and substitute in place of the High Court  

another alternative institutional mechanism or arrangement. This Court, however  

cautioned that it was imperative to ensure that the alternative arrangement was no  

less independent and no less judicious than the High Court (which was sought to be  

replaced) itself.  

xxx  

107. In Union of India v. Madras Bar Assn. [(2010) 11 SCC 1] , all the  

conclusions/propositions narrated above were reiterated and followed, whereupon  

the fundamental requirements which need to be kept in mind while transferring  

adjudicatory functions from courts to tribunals were further crystallised. It came to  

be unequivocally recorded that tribunals vested with judicial power (hitherto before  

vested in, or exercised by courts), should possess the same independence, security  

and capacity, as the courts which the tribunals are mandated to substitute. The  

members of the tribunals discharging judicial functions could only be drawn from  

sources possessed of expertise in law and competent to discharge judicial functions.  

Technical members can be appointed to tribunals where technical expertise is  

essential for disposal of matters, and not otherwise. Therefore it was held that where  

the adjudicatory process transferred to tribunals did not involve any specialised skill,  

knowledge or expertise, a provision for appointment of technical members (in  

addition to, or in substitution of judicial members) would constitute a clear case of  

delusion and encroachment upon the independence of the judiciary and the “rule of  

law”. The stature of the members, who would constitute the tribunal, would depend  

on the jurisdiction which was being transferred to the tribunal. In other words, if the  

jurisdiction of the High Court was transferred to a tribunal, the stature of the  

members of the newly constituted tribunal, should be possessed of qualifications  

akin to the Judges of the High Court. Whereas in case, the jurisdiction and the  

functions sought to be transferred were being exercised/performed by District  

Judges, the Members appointed to the tribunal should be possessed of equivalent

91    

qualifications and commensurate stature of District Judges. The conditions of  

service of the members should be such that they are in a position to discharge their  

duties in an independent and impartial manner. The manner of their appointment  

and removal including their transfer, and tenure of their employment, should have  

adequate protection so as to be shorn of legislative and executive interference. The  

functioning of the tribunals, their infrastructure and responsibility of fulfilling their  

administrative requirements ought to be assigned to the Ministry of Law and Justice.  

Neither the tribunals nor their members, should be required to seek any facilities  

from the parent ministries or department concerned. Even though the legislature can  

reorganise the jurisdiction of judicial tribunals, and can prescribe the  

qualifications/eligibility of members thereof, the same would be subject to “judicial  

review” wherein it would be open to a court to hold that the tribunalisation would  

adversely affect the adjudicatory standards, whereupon it would be open to a court  

to interfere therewith. Such an exercise would naturally be a part of the checks and  

balances measures conferred by the Constitution on the judiciary to maintain the  

rule of “separation of powers” to prevent any encroachment by the legislature or the  

executive.  

xxx  

113.2. …The power of discharging judicial functions which was exercised by  

members of the higher judiciary at the time when the Constitution came into force  

should ordinarily remain with the court, which exercised the said jurisdiction at the  

time of promulgation of the new Constitution. But the judicial power could be allowed  

to be exercised by an analogous/similar court/tribunal with a different name.  

However, by virtue of the constitutional convention while constituting the analogous  

court/tribunal it will have to be ensured that the appointment and security of tenure  

of Judges of that court would be the same as of the court sought to be substituted.  

This was the express conclusion drawn in Hinds case [Hinds v. R., 1977 AC 195] .  

In Hinds case, it was acknowledged that Parliament was not precluded from  

establishing a court under a new name to exercise the jurisdiction that was being  

exercised by members of the higher judiciary at the time when the Constitution came  

into force. But when that was done, it was critical to ensure that the persons  

appointed to be members of such a court/tribunal should be appointed in the same  

manner and should be entitled to the same security of tenure as the holder of the  

judicial office at the time when the Constitution came into force. Even in the treatise  

Constitutional Law of Canada by Peter W. Hogg, it was observed: if a province  

invested a tribunal with a jurisdiction of a kind, which ought to properly belong to a  

Superior, District or County Court, then that court/tribunal (created in its place),  

whatever is its official name, for constitutional purposes has to, while replacing a  

Superior, District or County Court, satisfy the requirements and standards of the  

substituted court. This would mean that the newly constituted court/tribunal will be  

deemed to be invalidly constituted, till its members are appointed in the same  

manner, and till its members are entitled to the same conditions of service as were  

available to the Judges of the court sought to be substituted. In the judgments under  

reference it has also been concluded that a breach of the above constitutional  

convention could not be excused by good intention (by which the legislative power  

had been exercised to enact a given law). We are satisfied, that the aforesaid  

exposition of law is in consonance with the position expressed by this Court while  

dealing with the concepts of “separation of powers”, the “rule of law” and “judicial  

review”. In this behalf, reference may be made to the judgments in L. Chandra  

Kumar case, as also, in Union of India v. Madras Bar Assn. (2010). Therein, this  

Court has recognised that transfer of jurisdiction is permissible but in effecting such

92    

transfer, the court to which the power of adjudication is transferred must be endured  

with salient characteristics, which were possessed by the court from which the  

adjudicatory power has been transferred…  

XXX  

128. There seems to be no doubt, whatsoever, that the Members of a court/tribunal  

to which adjudicatory functions are transferred must be manned by  

Judges/members whose stature and qualifications are commensurate to the court  

from which the adjudicatory process has been transferred. This position is  

recognised the world over. The constitutional conventions in respect of Jamaica,  

Ceylon, Australia and Canada, on this aspect of the matter have been delineated  

above. The opinion of the Privy Council expressed by Lord Diplock in Hinds case,  

has been shown as being followed in countries which have Constitutions on the  

Westminster model. The Indian Constitution is one such constitution. The position  

has been clearly recorded while interpreting Constitutions framed on the above  

model, namely, that even though the legislature can transfer judicial power from a  

traditional court to an analogous court/tribunal with a different name, the  

court/tribunal to which such power is transferred should be possessed of the same  

salient characteristics, standards and parameters, as the court the power whereof  

was being transferred. It is not possible for us to accept that Accountant Members  

and Technical Members have the stature and qualification possessed by the Judges  

of High Courts.”  

163. We concur with the above which reiterates the consistent view taken by this  

Court in a number of cases.  It is also a well-established principle followed  

throughout in various other jurisdictions as well, that wherever Parliament decides  

to divest the traditional Courts of their jurisdiction and transfer the lis to some other  

analogous Court/Tribunal, the qualification and acumen of the members in such  

Tribunal must be commensurate with that of the Court from which the adjudicatory  

function is transferred. Adjudication of disputes which was originally vested in  

Judges of Courts, if done by technical or non-judicial member, is clearly a dilution  

and encroachment on judicial domain. With great respect, Parliament cannot divest  

judicial functions upon technical members, devoid of the either adjudicatory  

experience or legal knowledge.  

164. It is necessary to notice few other changes brought about by the new Rules.   

Firstly, most Tribunals were earlier headed by judicial members.  With the

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exception of some Tribunals like the Debt Recovery Tribunal, presiding officers  

were retired judges either of the Supreme Court or of High Courts.  Under the  

present formulation of Rules, the Central Government has widened eligibility by  

making persons who otherwise have no judicial or legal experience but if they are  

otherwise of “ability, integrity and standing, and having special knowledge of, and  

professional experience of” certain specialised subjects “which in the opinion of the  

Central Government is useful” eligible for being appointed as presiding officers.   

Further, others who are “qualified to be” Supreme Court and High Court judges can  

also head Tribunals.  A perusal of Articles 124(3) and 217(2) of the Constitution  

shows that it specifies only the very minimum prerequisites for appointment as a  

judge of the Constitutional Courts.  Instead, a predominant portion of the  

consideration for appointment to this Court or to the High Courts is uncodified and  

is based on a holistic consideration of the practice, legal acumen, expertise and  

character of Advocates.  The effect of the new criteria would be to make every  

second advocate eligible, in effect, vastly diluting the qualifications for  

appointment.  The characteristics necessary of such people are also vague which  

resultantly increases executive discretion.   It thus affects both judicial  

independence as well as capability and competency of these Tribunals.  The  

power/discretion vested to specify qualifications and decide who should man the  

Tribunals has to be exercised keeping in view the larger public interest and the  

same must be just, fair and reasonable and not vague or imprecise.    

165. At this juncture it must also be reiterated that equality can only be amongst  

equals, and that it would be impermissible to treat unequals equally on the basis  

of undefined contours of ‘Uniformity’.  A Tribunal to have the character of a quasi-

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judicial body and a legitimate replacement of Courts, must essentially possess a  

dominant judicial character through their members/presiding officers.  It was  

observed in Madras Bar Association (2010) (supra) that it is a fundamental  

prerequisite for transferring adjudicatory functions from Courts to Tribunals that the  

latter must possess the same capacity and independence as the former, and that  

members as well as the presiding officers of Tribunals must have significant judicial  

training and legal experience.  Further, knowledge, training and experience of  

members/presiding officers of a Tribunal must mirror, as far as possible, that of the  

Court which it seeks to substitute.  Illustratively, the composition of Appellate  

Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of  

Property) Act, 1976, delineating this incongruity is reproduced below for reference:  

Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture  of Property) Act, 1976  

(1) The Chairman of the Appellate Tribunal shall be a person who is or has been  or is qualified to be a Judge of a Supreme Court or a Judge of a High Court.  

(2) The Member of the Appellate Tribunal shall be a person not below the rank of  Joint Secretary to the Government of India.  

166. It appears to us to be incomprehensible as to how both Supreme Court and  

High Court judges can be eligible for the same post when their experience,  

exposure, knowledge and stature under the Constitution are vastly different and  

the two do not form one homogenous class.  There can be no forced equality  

between the two.  Doing so would be suggestive of non-application of mind.  Such  

an exercise would merit judicial interference.   

167. Further, dispensation of justice requires that the adjudicating institution  

command respect with the populace.  Anomalous situations created by allowing

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High Court judges to be appointed to a position occupied earlier by a Supreme  

Court judge, affects the prestige of the Judiciary as an institution.    

168. The stature of the people manning an institution lends credibility and colour  

to the institution itself.  There is a perceptible signalling effect in having retired  

Supreme Court justices as presiding officers of a particular Tribunal of National  

importance.  The same instils an inherent fairness, dignity and exalted status in the  

Tribunal.  Permitting such institutions to be also occupied by persons who have not  

manned an equivalent position or those with lesser judicial experience, does not  

bode well for the Tribunal besides discouraging competent people from offering  

their services.  On the same analogy, it would be an anathema to say that High  

Court judges and District Court judges can both occupy the same position in a  

Tribunal.    

(C) Constitutionality of procedure of removal  

169. It is clear from the Scheme contemplated under the Rules that the  

government has significantly diluted the role of the Judiciary in appointment of  

judicial members.  Further, in many Tribunals like the NGT, the role of the Judiciary  

in appointment of non-judicial members has entirely been taken away.  Such a  

practice violates the Constitutional scheme and the dicta of this Court in various  

earlier decisions already referred to.  It is also important to note that in many  

Tribunals like the National Green Tribunal where earlier removal of members or  

presiding officer could only be after an enquiry by Supreme Court Judges and with  

necessary consultation with the Chief Justice of India, under the present Rules it  

is permissible for the Central Government to appoint an enquiry committee for

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removal of any presiding officer or member on its own.  The Rules are not explicit  

on who would be part of such a Committee and what would be the role of the  

Judiciary in the process.  In doing so, it significantly weakens the independence of  

the Tribunal members.  It is well understood across the world and also under our  

Constitutional framework that allowing judges to be removed by the Executive is  

palpably unconstitutional and would make them amenable to the whims of the  

Executive, hampering discharge of judicial functions.    

170. In Madras Bar Association (2014) (supra), this Court held that:  

“…it was acknowledged that Parliament was not precluded from establishing  a court under a new name to exercise the jurisdiction that was being exercised  by members of the  higher judiciary at the time when the Constitution came  into force.  But when that was done, it was critical to ensure that the persons  appointed to be members of such a court/tribunal should be appointed in the  same manner and should be entitled to the same security of tenure as the  holder of the judicial office at the time when the Constitution came into force.   Even in the treatise Constitutional Law of Canada by Peter W. Hogg, it was  observed: if a province invested a tribunal with a jurisdiction of a kind, which  ought to properly belong to a Superior,  District or Country Court, then that  court/tribunal (created in its place), whatever is its official name, for  constitutional purposes has to, while replacing a Superior, District or Country  Court, satisfy the requirements and standards of the substituted court.  This  would mean that the newly constituted court/tribunal will be deemed to be  invalidly constituted, till its members are appointed in the same manner, and  till its members are entitled to the same conditions of service as were available  to the Judges of the court sought to be substituted.”  

171.  It is essential that the same be observed in letter and spirit and we therefore  

reiterate that Members and Presiding Officers of Tribunals cannot be removed  

without either the concurrence of the Judiciary or in the manner specified in the  

Constitution for Constitutional Court judges.  

(D) Term of Office and Maximum Age  

172. Various enactments providing for appointment and other incidentals of  

members have been brought to our notice to demonstrate an apparent disparity in

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age of superannuation of Members and Chairpersons/Presiding Officers of  

different Tribunals. Illustratively, Section 14D of the Telecom Regulatory Authority  

of India Act, 1997 provides a Member of Telecom Disputes Settlement and  

Appellate Tribunal shall not hold office after attaining the age of sixty-five years,  

whereas, Section 55(1) of the Consumer Protection Act, 2019 provides that a  

Member of the National Consumer Disputes Redressal Commission shall not hold  

office after attaining the age of sixty-seven years. This difference in superannuation  

age may lead to an undesirable situation wherein a member of a Tribunal with low  

retirement age can be reappointed in another Tribunal with a higher retirement age.   

173. The Constitution of India doesn’t differentiate between High Courts in terms  

of conditions of service of judges and prescribes a uniform age of superannuation  

for judges of all High Courts. Conforming to the principle, as held in earlier  

judgements of this Court, the Tribunals should have similar standards of  

appointment and service as that of the Court it is substituting. There must,  

therefore, be a uniform age of superannuation for all members in all the Tribunals.   

174. The only differentiation in age of superannuation provided by the  

Constitution is that between judges of High Courts and Supreme Court. We find  

the reason for the same in the intention of the Constituent Assembly which aimed  

to incorporate the experience and knowledge of a High Court Judge when elevated  

as a Supreme Court judge. Hence, to utilise the experience and knowledge  

acquired during tenure as a judge of High Court, Supreme Court judges are  

provided with higher age of superannuation than the judges of High Court.  

Similarly, the difference between age of superannuation of Chairman/Presiding  

Officer and Member of a Tribunal is because Chairman/Presiding Officer is not a

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promotional post and thus cannot be equated with that of the Member. The post of  

Chairman/Presiding Officer requires judicial and administrative experience of at  

least that of the judge of a High Court which is evident from the statutes prescribing  

them.   

175. Another oddity which was brought to our notice is that there has been an  

imposition of a short tenure of three years for the members of the Tribunals as  

enumerated in the Schedule of Tribunals Rules, 2017. A short tenure, coupled with  

provision of routine suspensions pending enquiry and lack of immunity thereof  

increases the influence and control of the Executive over Members of Tribunals,  

thus adversely affecting the impartiality of the Tribunals. Furthermore, prescribing  

such short tenures precludes cultivation of adjudicatory experience and is thus  

injurious to the efficacy of Tribunals.   

176. This Court criticised the imposition of short tenures of members of Tribunals  

in Union of India v. Madras Bar Association, (2010) (supra) and a longer tenure  

was recommended. It was observed that short tenures also discourage meritorious  

members of Bar to sacrifice their flourishing practice to join a Tribunal as a Member  

for a short tenure of merely three years. The tenure of Members of Tribunals as  

prescribed under the Schedule of the Rules is anti-merit and attempts to create  

equality between unequals. A tenure of three years may be suitable for a retired  

Judge of High Court or the Supreme Court or even in case of a judicial officer on  

deputation. However, it will be illusory to expect a practising advocate to forego his  

well-established practice to serve as a Member of a Tribunal for a period of three  

years. The legislature intended to incorporate uniformity in the administration of  

Tribunal by virtue of Section 184 of Finance Act, 2017. Nevertheless, such

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uniformity cannot be attained at the cost of discouraging meritorious candidates  

from being appointed as Members of Tribunals.   

177. Additionally, the discretion accorded to the Central or State Government to  

reappoint members after retirement from one Tribunal to another discourages  

public faith in justice dispensation system which is akin to loss of one of the key  

limbs of the sovereign. Additionally, the short tenure of Members also increases  

interference by the Executive jeopardising the independence of judiciary.  

178. In the light of the discussion as aforesaid, we hold that the Rules would  

require a second look since the extremely short tenure of the Members of Tribunals  

is anti-merit and has the effect of discouraging meritorious candidates to accept  

posts of Judicial Members in Tribunals.   

(E) Contradictions in the Rules  

179. On the contentions of parties and in the light of the aforementioned  

discussion, the Bench has observed following contradictions in the Rules:  

(a) There is an inconsistency within the Rules with regard to the tenure  

prescribed for the Members of Tribunals insofar as a fixed tenure of  

three years for both direct appointments from the Bar and appointment  

of retired judicial officers or judges of High Court or Supreme Court.  It  

is also discriminatory to the extent that it attempts to create equality  

between unequal classes. The tenure of Members, Vice-Chairman,  

Chairman, etc. must be increased with due consideration to the prior  

decisions of the Court.  

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(b) The difference in the age of superannuation of the Members, Vice-

Chairmen and Chairmen, as formulated in the Rules is contrary to the  

objectives of the Finance Act, 2017 viz., to attain uniformity in the  

composition of the Tribunal framework. There should be a uniform age  

of superannuation for Members, Vice-Chairmen, Chairmen, etc. in all  

Tribunals.  

(c) Rule 4(2) of the Rules providing that the Secretary to the Government  

of India in the Ministry or Department under which the Tribunal is  

constituted shall be the convener of the Search-cum-Selection  

Committee, is in direct violation of the doctrine of Separation of Powers  

and thus contravenes the basic structure of the Constitution. Corollary  

to the dictum of this Court in the Fourth Judges Case, judicial  

dominance in appointment of members of judiciary cannot be diluted  

by the Executive.   

(d) Rule 7 accords unwarranted discretion to the Central Government  

insofar as it merely directs and not mandates the Central Government  

to consider the recommendation of Committee for removal of a  

Member of a Tribunal. The Central Government shall mandatorily  

consider the recommendation of the Committee before removal of any  

Member of Tribunal. Furthermore, the proviso to Rule 7 creates an  

unjust classification between National Company Law Appellate  

Tribunal (NCLAT) and other fora inasmuch as the removal of  

Chairperson or member of NCLAT alone is to be in consultation with  

the Chief Justice of India.  

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(e) Moral turpitude is a term well defined by this Court in numerous  

decisions. Rule 7(b) cannot be allowed to survive as it allows the  

Executive to interpret the meaning of ‘moral turpitude’, which is an  

encroachment on the judicial domain.  

(f) The power of relaxation of rules with respect to any class of persons  

shall be vested with the Search-cum-Selection Committee and not with  

the Central Government as provided under Rule 20. As ruled by this  

Court earlier in Madras Bar Association (2014) (supra), the Central  

Government cannot be allowed to have administrative control over the  

Judiciary without subverting the doctrine of separation of powers.   

ISSUE IV: WHETHER THERE SHOULD BE A SINGLE NODAL AGENCY FOR ADMINISTRATION  

OF ALL TRIBUNALS?  

180. Ld. Amicus highlighted an apparent problem persisting in the current  

Tribunal framework in India. Tribunals established under different Central and  

State enactments are usually administered by their sponsoring or parent Ministry  

or concerned department. Thus, when Tribunals or members thereof have to seek  

financial, administrative or any other facility from a department who is also the  

litigant before them, their fairness or independence is likely to be compromised.  

Such an anomalous situation can only be remedied by the establishment of a single  

nodal agency, overseeing the entire Tribunal system in the country, bringing all  

such Tribunals to parity.  

181. This Court in L. Chandra Kumar v. Union of India (supra), envisaged the  

administration of the entire Tribunal Framework  in the country to be monitored by  

a single nodal agency/ministry. It was observed not to be advisable to allow

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supervision of a Tribunal by a department/ministry which is a party before it. This  

Court recommended constitution of an independent agency by the concerned  

Ministry, to oversee the working of Tribunals. The independent agency when  

constituted, may also prescribe a uniform code for appointment, qualification,  

condition of service, manner of allocation of fund, etc. of the Tribunals. This will,  

the Court suggested, minimise the influence of the parent ministry of the Tribunal,  

in addition to ensuring uniformity in the entire Tribunal framework. The relevant  

excerpt may be reproduced below:  

“96. …We are of the view that, until a wholly independent agency for the  

administration of all such Tribunals can be set up, it is desirable that all such  

Tribunals should be, as far as possible, under a single nodal ministry which will be  

in a position to oversee the working of these Tribunals. For a number of reasons  

that Ministry should appropriately be the Ministry of Law. It would be open for the  

Ministry, in its turn, to appoint an independent supervisory body to oversee the  

working of the Tribunals. This will ensure that if the President or Chairperson of the  

Tribunal is for some reason unable to take sufficient interest in the working of the  

Tribunal, the entire system will not languish and the ultimate consumer of justice will  

not suffer. The creation of a single umbrella organisation will, in our view, remove  

many of the ills of the present system. If the need arises, there can be separate  

umbrella organisations at the Central and the State levels. Such a supervisory  

authority must try to ensure that the independence of the members of all such  

Tribunals is maintained. To that extent, the procedure for the selection of the  

members of the Tribunals, the manner in which funds are allocated for the  

functioning of the Tribunals and all other consequential details will have to be clearly  

spelt out.”  

182. In Union of India vs. Madras Bar Association (2010) (supra), a five-Judge  

Constitution Bench of this Court had the opportunity to discuss the Tribunals’  

structure as prevalent in the United Kingdom. It was noted that United Kingdom  

has a variety of dispute redressal mechanisms which necessitated constitution of  

numerous committees to analyse the functioning of Tribunals. However, this Court  

primarily referred to the Leggatt Committee Report, constituted to undertake the  

review of delivery of justice through tribunals. After analysing the success story of

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Tribunals in U.K., this Court noticed a contrast in India and expressed its  

dissatisfaction with respect to the functioning of Tribunals in India, observing:  

“70. But in India, unfortunately tribunals have not achieved full independence. The  

Secretary of the “sponsoring department” concerned sits in the Selection Committee  

for appointment. When the tribunals are formed, they are mostly dependent on their  

sponsoring department for funding, infrastructure and even space for functioning.  

The statutes constituting tribunals routinely provide for members of civil services  

from the sponsoring departments becoming members of the tribunal and continuing  

their lien with their parent cadre. Unless wide ranging reforms as were implemented  

in United Kingdom and as were suggested by L. Chandra Kumar are brought about,  

tribunals in India will not be considered as independent.”  

183. This Court had earlier noted the statements of the Ld. Attorney General vide  

order dated 27 March 2019 in W.P. (C) No. 267/2012, wherein it was submitted  

that the Ministry of Law is already overburdened and cannot effectively perform the  

supervisory function, as a single nodal Ministry, for all the Tribunals, as was earlier  

suggested by this Court.   

184. What appears to be of paramount importance is that every Tribunal must  

enjoy adequate financial independence for the purpose of its day to day functioning  

including the expenditure to be incurred on (a) recruitment of staff; (b) creation of  

infrastructure; (c) modernisation of infrastructure; (d) computerisation; (e)  

perquisites and other facilities admissible to the Presiding Authority or the  

Members of such Tribunal. It may not be very crucial as to which Ministry or  

Department performs the duties of Nodal Agency for a Tribunal, but what is of  

utmost importance is that the Tribunal should not be expected to look towards such  

Nodal Agency for its day to day requirements. There must be a direction to allocate  

adequate and sufficient funds for each Tribunal to make it self-sufficient and self-

sustainable authority for all intents and purposes. The expenditure to be incurred  

on the functioning of each Tribunal has to be necessarily a charge on the

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Consolidated Fund of India.  Therefore, hitherto, the Ministry of Finance shall, in  

consultation with the Nodal Ministry/Department, shall earmark separate and  

dedicated funds for the Tribunals. It will not only ensure that the Tribunals are not  

under the financial control of the Department, who is a litigant before them, but it  

may also enhance the public faith and trust in the mechanism of Tribunals.  

ISSUE V: WHETHER THERE IS A NEED FOR CONDUCTING A JUDICIAL IMPACT  

ASSESSMENT OF ALL TRIBUNALS IN INDIA?  

185. It was brought to our notice by the Learned Counsel for the petitioner(s) that  

there is an imminent need for conducting a Judicial Impact Assessment of all the  

Tribunals referable to the Finance Act, 2017. It was argued that neither the  

Legislature nor the Executive had conducted any assessment to analyse the  

adverse repercussions of the changes brought in the framework of Tribunals in  

India, if any, by the legislative exercises carried out from time to time.  

186. The contentions of the petitioner(s) cannot be said to be  unfounded. The  

three limbs of the State viz., the Legislature, the Executive and the Judiciary are  

so intertwined that there is a direct impact of the action of one limb on another.   

Every legislation results in an immediate increase in the number of pending  

litigations. It is the responsibility of the other branches of the State to be conscious  

of the limitations of the Judiciary in keeping pace with increasing pendency of  

litigation.  Care has to be taken to ensure that while enhancing the efficacy of  

legislations the accrual of resultant litigation is minimal.  

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187. The American principle of ‘Judicial Impact Assessment’ was first borrowed  

by this Court in its dictum in Salem Advocate Bar Assn. (II) v. Union of India45,  

whereby it was observed that it is imperative for the Legislature to perform a  

Judicial Impact Assessment of the enactment passed to assess its ramifications  

on the judiciary. This Court had directed for a committee to be constituted to assess  

the need for Judicial Impact Assessment in the Indian context.  Pursuant thereto  

the Jagannadha Rao Committee Report was submitted. The Report suggested that  

by way of Judicial Impact Assessment, the legislature must analyse the budgetary  

requirement of the staff that would require to be created by the statute and  

additional expenditure arising out of the new cases consequent to the enactment.  

Further, the financial memorandum, as prepared by the legislature, must  

specifically include the number of civil and criminal cases expected to arise from  

the new enactment, requirement of more judges and staff for adjudication of these  

cases and the necessary infrastructure. The requisite paragraphs of the decision  

in Salem Advocate Bar Assn. (supra) are reproduced as follows:  

“49. The Committee has also suggested that:  

“Further, there must be ‘judicial impact assessment’, as done  in the United States, whenever any legislation is introduced either  in Parliament or in the State Legislatures. The financial  memorandum attached to each Bill must estimate not only the  budgetary requirement of other staff but also the budgetary  requirement for meeting the expenses of the additional cases that  may arise out of the new Bill when it is passed by the legislature.  The said budget must mention the number of civil and criminal  cases likely to be generated by the new Act, how many courts are  necessary, how many judges and staff are necessary and what is  the infrastructure necessary. So far in the last fifty years such  judicial impact assessment has never been made by any  legislature or by Parliament in our country.”  

50. Having regard to the constitutional obligation to provide fair, quick and  speedy justice, we direct the Central Government to examine the  aforesaid suggestions and submit a report to this Court within four  months.”  

 45 (2005) 6 SCC 344  

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188. In the present case, we are of the view that the legislature has not conformed  

to the opinion of this Court with respect to ‘Judicial Impact Assessment’ and thus,  

has not made any attempt to assess the ramifications of the Finance Act, 2017. It  

can be legitimately expected that the multifarious amendments in relation to merger  

and reorganisation of Tribunals may result in massive increase in litigation which,  

in absence of adequate infrastructure, or budgetary grants, will overburden the  

Judiciary.   

189. In the fitness of things, we deem it appropriate to direct the Union of India to  

carry out financial impact assessment in respect of all the Tribunals referable to  

Sections 158 to 182 of the Finance Act, 2017 and undertake an exercise to assess  

the need based requirements and make available sufficient resources for each  

Tribunal established by the Parliament.   

ISSUE VI: WHETHER JUDGES OF TRIBUNALS SET UP BY ACTS OF PARLIAMENT UNDER  

ARTICLES 323-A AND 323-B OF THE CONSTITUTION CAN BE EQUATED IN ‘RANK’ AND  

‘STATUS’ WITH CONSTITUTIONAL FUNCTIONARIES?  

190. A concerning trend has been brought to the notice of this Court by the  

Learned Counsels. The Union has, in addition to equal pay and perks, accorded  

status equivalent to that of Supreme Court and High Court judges to  

Chairmen/Presidents of various Tribunals and authorities.  

191. It is apposite to refer to the ‘Warrant of Precedence’ which delineates the  

sequential hierarchy of functionaries which is used most often for formal  

ceremonial arrangements. Such enhancement of the status of certain officials is

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sans any rationale and falls squarely outside the Constitutional scheme. Although  

seemingly pedantic, according status equivalent or higher than Constitutional  

functionaries by executive order or by legislation strikes at the essence of the  

Constitutional dignity and stature accorded to such authorities. The absurdity of the  

situation can be demonstrated clearly if tomorrow a bureaucrat is accorded higher  

status than that of a Minister, who is the head of his department.  Such designations  

do not have a personal value but rather represent the framework and structure of  

governance envisaged. Illogical changes or altercations hence disturbs the fabric  

of hierarchy and discipline necessary for the effective functioning of the State.   

192. A similar situation arose in T.N. Seshan vs. Union of India46 wherein the  

Government of India had by ordinance accorded pay and perks equivalent to that  

of Supreme Court judges to the Chief Election Commissioner.  Consequently, a  

demand was made for according rank in the Warrant of Precedence equivalent to  

that of Supreme Court judges.  A five-judge bench of this Court held that mere  

equality in conditions of service to that of a Supreme Court judge cannot confer  

equal status to such other functionaries. It was noted that:  

“34. One of the matters to which we must advert is the question of the status of an  

individual whose conditions of service are akin to those of the Judges of the  

Supreme Court. This seems necessary in view of the reliance placed by the CEC  

on this aspect to support his case. In the instant case some of the service conditions  

of the CEC are akin to those of the Supreme Court Judges, namely, (i) the provision  

that he can be removed from office in like manner and on like grounds as a Judge  

of the Supreme Court and (ii) his conditions of service shall not be varied to his  

disadvantage after appointment. So far as the first is concerned instead of repeating  

the provisions of Article 124(4), the draftsman has incorporated the same by  

reference. The second provision is similar to the proviso to Article 125(2). But does  

that confer the status of a Supreme Court Judge on the CEC? It appears from the  

D.O. No. 193/34/92 dated 23-7-1992 addressed to the then Home Secretary, Shri  

Godbole, the CEC had suggested that the position of the CEC in the Warrant of  

46 (1995) 4 SCC 611.

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Precedence needed reconsideration. This issue he seems to have raised in his letter  

to the Prime Minister in December 1991. It becomes clear from Shri Godbole's reply  

dated 25-7-1992, that the CEC desired that he be placed at No. 9 in the Warrant of  

Precedence at which position the Judges of the Supreme Court figured. It appears  

from Shri Godbole's reply that the proposal was considered but it was decided to  

maintain the CEC's position at No. 11 along with the Comptroller and Auditor  

General of India and the Attorney General of India. However, during the course of  

the hearing of these petitions it was stated that the CEC and the Comptroller and  

Auditor General of India were thereafter placed at No. 9-A. At our request the  

learned Attorney General placed before us the revised Warrant of Precedence  

which did reveal that the CEC had climbed to position No. 9-A along with the  

Comptroller and Auditor General of India. Maintenance of the status of Judges of  

the Supreme Court and the High Courts is highly desirable in the national interest.  

We mention this because of late we find that even personnel belonging to other fora  

claim equation with High Court and Supreme Court Judges merely because certain  

jurisdictions earlier exercised by those Courts are transferred to them not realising  

the distinction between constitutional and statutory functionaries. We would like to  

impress on the Government that it should not confer equivalence or interfere with  

the Warrant of Precedence, if it is likely to affect the position of High Court and  

Supreme Court Judges, however pressing the demand may be, without first seeking  

the views of the Chief Justice of India. We may add that Mr G. Ramaswamy, learned  

counsel for the CEC, frankly conceded that the CEC could not legitimately claim to  

be equated with Supreme Court Judges. We do hope that the Government will take  

note of this and do the needful.”  

193. In light of the unequivocal assertions of a co-ordinate bench of this Court,  

there can be no doubt that executive action cannot confer status equivalent to that  

of either Supreme Court or High Court judges on any member or head of any  

Tribunal or other judicial fora.   

194. Furthermore, that even though manned by retired judges of High Courts and  

the Supreme Court, such Tribunals established under Article 323-A and 323-B of  

the Constitution cannot seek equivalence with High Courts or the Supreme Court.   

Once a judge of a High Court or Supreme Court has retired and he/she no longer  

enjoys the Constitutional status, the statutory position occupied by him/her cannot  

be equated with the previous position as a High Court or a Supreme Court judge.   

The rank, dignity and position of Constitutional judges is hence sui generis and  

arise not merely by their position in the Warrant of Precedence or the salary and  

perquisites they draw, but as a result of the Constitutional trust accorded in them.  

109    

Indiscriminate accordance of status of such Constitutional judges on Tribunal  

members and presiding officers will do violence to the very Constitutional  

Scheme47.  

195. This Court in L. Chandra Kumar (supra) observed that Tribunals are not  

substitutes of Superior Courts and are only supplemental to them.  Hence, the  

status of members of such Tribunals cannot be equated with that of the sitting  

judges of Constitutional Courts else, as V.R. Krishna Iyer, J. aptly pointed in his  

article titled ‘Why Stultify Judges’ Status?’,  “Creating deemed Justices of High  

Courts with equal status and salaries suggests an oblique bypassing of the  

Constitution….”.  The relevant extract of L. Chandra Kumar (supra) is reproduced  

as follows:  

“93. Before moving on to other aspects, we may summarise our  conclusions on the jurisdictional power of these Tribunals.  The Tribunals  are competent to hear matters where the vires of statutory provisions are  questioned.  However, in discharging this duty, they cannot act as  substitutes for the High Courts and the Supreme Court which have, under  our constitutional set-up, been specifically entrusted with such an  obligation.  Their function in this respect is only supplementary and all such  decisions of the Tribunals will be subject to scrutiny before a Division  Bench of the respective High Courts….”   

196. We would further point out that the Warrant of Precedence is a mere self-

serving executive decision and not a law in itself. It is a reflection of the inter-se  

hierarchy amongst functionaries for the purposes of discharge of important  

ceremonial functions and other State duties. It cannot either confer rights or alter  

the status accorded by law. It would further be clearly abhorrent to use such an  

 47 Justice VR Krishna Iyer, “Why Stultify Judges’ Status?”, (2002) 2 LW (JS) 85 (June, 2000)

110    

instrument to undermine the order of precedence clearly accorded under the  

Constitution.   

197. It is hence essential that the Union of India, takes note of the observations  

of this Court herein and abide by the spirit of the Constitution in respecting the  

aforementioned difference between constitutional functionaries and statutory  

authorities. It is important for the Union of India to ensure that judges of High Courts  

and the Supreme Court are kept on a separate pedestal distanced from any other  

Tribunal or quasi-judicial Authority.  

ISSUE VII: WHETHER DIRECT STATUTORY APPEALS FROM TRIBUNALS TO THE SUPREME  

COURT OUGHT TO BE DETOURED?  

198. During the course of arguments, various facets were highlighted before this  

Court, including the soaring pendency of cases and non-adherence of directions  

of this Court in earlier judgments requiring reconsideration by the legislature of the  

increasing trend of providing direct statutory appeals to this Court against orders  

of Tribunals.   

199. As discussed earlier, Tribunalisation has increased at a rapid pace in the  

past few decades in our country. Since establishment of the ITAT during the pre-

independence era, the number of tribunals has now increased to several dozens.  

The Constitution of India (42nd Amendment) Act, 1976 provided for setting up of  

Administrative Tribunals through Article 323A as well as other Tribunals under  

Article 323B. These aforementioned provisions in the Constitution were construed  

by the legislature in a manner resulting in the ousting of jurisdiction of all Courts  

except the Supreme Court under Article 136. Later, in L. Chandrakumar (supra),

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this court very aptly held that judicial review by High Courts under Article 226 is a  

part of the basic structure and hence could not be ousted by any legislation or even  

Constitutional amendment. Moreover, this Court in L. Chandrakumar (supra) and  

later in Madras Bar Association (2014) (supra) and Gujarat Urja Vikas Ltd.  

(supra) reiterated the urgent need to do away with increasingly common provisions  

in statutes providing direct statutory appeal to this Court, which as discussed  

elaborately below poses significant problems in the administration of justice and is  

also against the Constitutional scheme.  

200. Since the aforesaid issue has not been directly raised by the petitioners and  

only a passing reference has been made, it is necessary to delineate whether  

providing such appeals to this Court is in consonance with the three-tier Judicial  

system as established under our Constitution.   

201. An examination of the jurisdiction of the Supreme Court as envisaged under  

the Constitution must be made. Such jurisdiction bestowed upon this Court by the  

Constitution can be broken into three limbs: appellate, original and advisory. A brief  

description of these jurisdictions is provided below:  

Original jurisdiction:  

(i) Writ jurisdiction under Article 32.  

(ii) Disputes of election to President/Vice-President under Article 71.  

(iii) Inter-state or State-Centre disputes under Article 131.  

(iv) Transfer cases under Articles 139 and 139A.  

(v) Contempt of Court under Article 145.  

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Appellate jurisdiction:  

(i) Appeals against orders of High Courts with certificate of there being  

substantial constitutional questions under Article 132.  

(ii) Appeals against orders of High Courts in civil cases with certificate that  

there is substantial question of general importance or that the matter  

needs to be decided by the HC under Article 133.  

(iii) Appeals against orders of High Courts in criminal cases against award  

of death penalty in the first instance by the HC, either on appeal or in  

original trial under Article 134.  

(iv) All other cases appealable to the Federal Court before commencement  

of the Constitution under Article 135.  

(v) Discretionary power to grant special leave to appeal any order by any  

court or tribunal under Article 136.  

Advisory jurisdiction:  

(i) Presidential reference under Article 143.  

(ii) Reference on removal of Public Service Commission member under  

Article 317.  

202. The ambit of appellate jurisdiction is clear from a perusal of Articles 132 to  

136 of the Constitution. Article 132 provides that an appeal may be instituted before  

the Supreme Court against any order of the High Court where a substantial  

question of law arises for consideration. Article 133(3) specifies that there shall be  

no appeal from the order of a single judge of the High Court unless the contrary is  

provided through a law by the Parliament. Further, Article 134 delineates the

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jurisdiction of the Supreme Court in criminal matters restricting it primarily to cases  

where the High Court has awarded death sentence either in trial before it or in  

reversal of an earlier acquittal by the trial court. In addition to this, Article 134(2) is  

lucid in its wording to provide that in absence of any specific legislation by the  

Parliament to enlarge the criminal appellate jurisdiction of this Court, no routine  

appeal lies before the Supreme Court in criminal matters. The extract from Article  

134(2) has been reproduced below:  

“(2) Parliament may by law confer on the Supreme Court any further powers to  

entertain and hear appeals from any judgment, final order or sentence in a criminal  

proceeding of a High Court in the territory of India subject to such conditions and  

limitations as may be specified in such law.”  

203. Article 134(2) is successful in clarifying two things. Firstly, there is no  

provision analogous to Article 134(2) under Article 133 to expand the jurisdiction  

of the Supreme Court in non-criminal matters. Secondly, Article 134(2) does not  

encompass matters other than those arising out of criminal proceedings from the  

High Courts.   

204. Presently, there are more than two dozen statutes which provide direct  

appeals to the Supreme Court from various Tribunals and High Courts. A non-

exhaustive list of such Statutes includes:   

(i) Section 35L of the Central Excise Act, 1944 (1 of 1944);   

(ii) Section 116A of the Representation of the People Act, 1951 (43 of 1951);   

(iii) Section 38 of the Advocates Act, 1961 (25 of 1961);   

(iv) Section 261 of the Income Tax Act, 1961 (43 of 1961) before the  

establishment of National Tax Tribunal;   

(v) Section 130E of the Customs Act, 1962 (52 of 1962);  

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(vi) Section 19(1)(b) of the Contempt of Courts Act, 1971 (70 of 1971);   

(vii) Section 374 and 379 of the Code of Criminal Procedure, 1973 (2 of 1974)  

read with Section 2 of Supreme Court (Enlargement of Criminal Appellate  

Jurisdiction) Act, 1970 (28 of 1970);   

(viii) Section 23 of the Consumer Protection Act, 1986 (68 of 1986);   

(ix) Section 19 of the Terrorist and Disruptive Activities (Prevention) Act,  

1987 (28 of 1987);   

(x) Section 10 of the Special Courts (Trial of Offences relating to  

Transactions in Securities) Act, 1992 (27 of 1992);   

(xi) Section 15Z of the Securities and Exchange Board of India Act, 1992 (15  

of 1992);   

(xii) Section 18 of the Telecom Regulatory Authority of India Act, 1997 (24 of  

1997);   

(xiii) Section 53T of the Competition Act, 2002 (12 of 2003);   

(xiv) Section 125 of the Electricity Act, 2003 (36 of 2003);   

(xv) Section 24 of the National Tax Tribunal Act, 2005 (49 of 2005);   

(xvi) Section 30 of the Armed Forces Tribunal Act, 2007 (55 of 2007);   

(xvii) Section 37 of the Petroleum and Natural Gas Regulatory Board Act, 2006  

(19 of 2006);   

(xviii) Section 31 of the Airports Economic Regulatory Authority of India Act,  

2008 (27 of 2008);   

(xix) Section 22 of the National Green Tribunal Act, 2010 (19 of 2010);   

(xx) Section 423 of the Companies Act, 2013 (18 of 2013);  

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(xxi) Section 38 of the Pension Fund Regulatory and Development Authority  

Act, 2013 (23 of 2013);   

(xxii) Section 21 of the Black Money (Undisclosed Foreign Income and Assets)  

and Imposition of Tax Act, 2015 (22 of 2015);   

(xxiii) Section 62 and 182 of Insolvency and Bankruptcy Code, 2016 (31 of  

2016); and   

(xxiv) Section 118 of the Central Goods and Services Tax Act, 2017 (12 of  

2017).  

205. Such statutory appeals take away the inherent ability of the Supreme Court,  

as envisaged in the Constitution, to regulate cases before it by confining its  

consideration to cases involving the most egregious of wrongs and/or having the  

greatest impact on public interest.   

206. Further, in providing for appeals directly from Tribunals, the jurisdiction of  

High Courts is in effect curtailed to a great extent. Not only does this hamper  

access to justice, but it also takes away the much needed exposure for High Court  

judges, earnestly needed in a vibrant and ever-evolving judiciary. Since majority of  

the judges of the Supreme Court are elevated from the High Courts, their lack of  

exposure to these specialised areas of law hinders their efficacy in adjudicating the  

direct statutory appeals from specialised Tribunals.   

207. A perusal of the Indian Judiciary: Annual Report 2017-18, published by this  

Court shows that pendency in the Supreme Court stands at more than 56,000  

cases. Each year this Court hears a humungous volume of cases and disposes of  

approximately 60,000 - 90,000 cases annually, thus amounting to a staggering

116    

4,000 - 6,000 cases per bench. Out of all the cases instituted before this Court,  

less than 2% is for exercise of writ jurisdiction under Article 32 whereas an  

overwhelming majority of cases are petitions for special leave to appeal under  

Article 136.   

208. Although the rate of admission of cases peaked at about 20% in 2011 and  

has fallen since then, it is still far above the marginal rate of about 1% in other  

comparable jurisdictions such as the Supreme Court of the United States. The  

mere task of hearing all cases and considering whether to grant leave or not usurps  

a majority of the Court’s time. As a result of frequent invocation of Article 136 by  

litigants, the Court is left with hardly any time to discharge its key Constitutional  

functions of deciding substantial Constitutional questions, as envisaged by our  

founding fathers. As compared to the early 1960s where Constitution Benches  

decided hundreds of cases, the number is no more than a dozen now. Most  

seminal cases involving major issues of jurisprudence or effecting revolutionary  

changes on the legal landscape are by compulsion heard by Division Benches,  

thus defeating the very objective of Article 145(3).  

209. The decrease in propensity of a person with humble means or situated  

farther away from the Delhi to approach the Supreme Court is evidence of the fact  

that the remedy to approach this Court has been, in effect, limited to only those  

with access to ample financial resources. Numerous studies have shown how  

every tenth case decided by the High Court of Delhi or every sixteenth case  

decided by the High Court of Punjab & Haryana is appealed before this Court, as  

compared to a minuscule rate of appeal of a little over 1% against the decision of  

High Court of Madras.  Being an authority entrusted to resolve Constitutional

117    

conflicts or to safeguard the fundamental rights of citizens, this Court cannot afford  

to provide access only to the affluent. Although it would be futile to examine the  

effects of such rampant regular appeals, however, it is apparent that it substantially  

affects the time and quality of judicial determination by this Court. This view had  

also been noted in the 272nd Report of the Law Commission wherein it was pointed  

out that:  

“3.12. The objective behind establishing the ‘Tribunals’ was to provide an effective  

and speedier forum for dispensation of justice, but in the wake of routine appeals  

arising from the orders of such forums, certain issues have been raised because  

such appeals are obstructing the constitutional character of the Supreme Court and  

thus,disturbing the effective working of the Supreme Court as the appeals in these  

cases do not always involve a question of general public importance. The Supreme  

Court is primarily expected to deal with matters of constitutional importance and  

matters involving substantial question of law of general public importance. Due to  

overburdening, the Supreme Court is unable to timely address such matters.”  

210. Resultantly, majority of the matters involving significant Constitutional  

questions remain untouched for years; consequently the ability of this Court to keep  

in check the legislative and executive encroachments is significantly compromised.  

Cases heard by the Constitution Bench comprising of five or more judges have  

fallen significantly from over 15% in the 1950s to an average of 0.1 - 0.2% during  

the last two decades. Hence, it is clear that this Court has been, in a way,  

transformed from a Constitutional-Writ Court to a Court of Appeals whereunder  

mere increase of the number of judges is no more a solution. Whilst the number of  

judges has increased slightly more than four times, the number of cases since 1950  

has increased more than seventy folds! It is clear that there is a pressing need to  

realign the exercise of jurisdiction of this Court and ensure that the Constitutional  

vision is not defeated. This view has been resonated by this Court since it was

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highlighted by Justice P.N. Bhagwati in Bihar Legal Support Authority vs. Chief  

Justice of India48 in the following manner:  

“The Supreme Court of India was never intended to be a regular court of appeal  

against orders made by the High Court or the sessions court of the magistrates. It  

was created for the purpose of laying down the law for the entire country and the  

extraordinary jurisdiction of granting special leave was conferred upon it under  

Article 136 of the Constitution so that it could interfere whenever it found that the  

law was not correctly enunciated by the lower courts or tribunals and it was  

necessary to pronounce the correct law on the subject.”  

211. It is evident that this Court has also lost its original character owing to the  

routine hearing of appeals through invocation of the discretionary jurisdiction under  

Article 136. It is apposite to hold that Article 136 was never meant to be used in  

this manner as was very aptly remarked by Dr. B.R. Ambedkar before the  

Constituent Assembly, who noted that:  

“The Supreme Court is not likely to grant special leave in any matter whatsoever  

unless it finds that it involves a serious breach of some principle in the administration  

of justice, or breach of certain principles which strike at the very root of  

administration of justice as between man and man.”  

212. Such self-effacement of this Court’s Constitutional duties requires to be  

reined in. It is, therefore, essential that this Court judiciously exercise its appellate  

jurisdiction. For the discharge of Constitutional functions of deliberating on  

substantial questions of law, answering Constitutional questions and resolving  

other issues of great public importance, it is essential that this Court has adequate  

time to apply its mind and consider matters in depth. The existing practice of  

bringing every second case before the SC under Article 136 must be deprecated.   

213. Such a proposed restrictive appellate jurisdiction would mirror the practice  

of the highest Courts in various other jurisdictions. The Supreme Court of the  

 48 (1986) 4 SCC 767

119    

United States in the famous case of Marbury vs. Madison49 noted that it was  

impermissible for the legislature to expand its original jurisdiction. After examining  

the framework of the Constitution of the United States, the Court noted that the  

original jurisdiction of the SC was limited to disputes involving States (as federal  

units) and the Union only. Except for that, all other cases can only be brought about  

in appellate jurisdiction. Although not explicitly stated, such an exercise was felt to  

be necessary to check a burgeoning expansion and overloading of the Court’s  

docket.  

214. Providing statutory appeals directly to the Supreme Court dents this to no  

end. With increasing tribunalisation, statutory appeal provisions are ostensibly  

being included without undertaking any ‘Judicial Impact Assessment’. As of last  

count there are several hundreds of cases which have been decided by the NCLAT  

and many other thousands by other tribunals pending in this Court.   

215. Note must be taken of the direction this country is heading towards for the  

same has a lasting impact on the kind of disputes which arise before this court. No  

system can be made in a vacuum, including our own. With the establishment of  

more tribunals and with increasing commercialisation in line with India’s  

transformation to an open market liberal economy, the number of these cases is  

bound to only increase. Unlike routine criminal or civil matters which are tried  

exclusively before ordinary courts, matters which fall before Tribunals are often  

complex and commercial.  

 49 5 U.S. (1 Cranch) 137 (1803).

120    

216. In light of this, provisions for statutory appeals directly and liberally to the  

Supreme Court raises the inevitability of bogging the Court down and inhibiting its  

Constitutional objective. Further, providing statutory appeals to this Court against  

orders of Tribunals also undermines the essence of tribunalisation. It is hardly  

rational to state on one hand that an alternate to the ordinary method of justice  

dispensation needs to be provided owing to the complicated procedures and owing  

to the lack of specialisation of District and High Courts, and in the same breadth  

also provide statutory appeals to the final Court in that very original system.   

217. If High Courts are ill placed to hear routine matters then it hardly seems  

justifiable that this Court would be any better placed to resolve disputes in appellate  

jurisdiction. Finality as a principle must be encouraged and providing statutory  

appeals to the Supreme Court only undermines the same. Instead, no discernible  

harm would arise if decisions of Tribunals or High Courts attain finality, without  

reaching this Court.  

218. A dichotomy in law is further caused by provisions of direct appeal from  

Tribunals to this Court, as noted in the case of  the Armed Forces Tribunals in  

Union of India v. Major General Shrikant Sharma50. The two-judge Bench  

viewed that:  

"Likelihood of anomalous situation  

42. If the High Court entertains a petition under Article 226 of the Constitution of  

India against an order passed by the Armed Forces Tribunal under Section 14 or  

Section 15 of the Act bypassing the machinery of statute i.e. Sections 30 and 31 of  

the Act, there is likelihood of anomalous situation for the aggrieved person in praying  

for relief from this Court.  

43. Section 30 provides for an appeal to this Court subject to leave granted under  

Section 31 of the Act. By clause (2) of Article 136 of the Constitution of India, the  

 50 (2015) 6 SCC 773.

121    

appellate jurisdiction of this Court under Article 136 has been excluded in relation to  

any judgment, determination, sentence or order passed or made by any court or  

tribunal constituted by or under any law relating to the Armed Forces. If any person  

aggrieved by the order of the Tribunal, moves the High Court under Article 226 and  

the High Court entertains the petition and passes a judgment or order, the person  

who may be aggrieved against both the orders passed by the Armed Forces Tribunal  

and the High Court, cannot challenge both the orders in one joint appeal. The  

aggrieved person may file leave to appeal under Article 136 of the Constitution  

against the judgment passed by the High Court but in view of the bar of jurisdiction  

by clause (2) of Article 136, this Court cannot entertain appeal against the order of  

the Armed Forces Tribunal. Once, the High Court entertains a petition under Article  

226 of the Constitution against the order of the Armed Forces Tribunal and decides  

the matter, the person who thus approached the High Court, will also be precluded  

from filing an appeal under Section 30 with leave to appeal under Section 31 of the  

Act against the order of the Armed Forces Tribunal as he cannot challenge the order  

passed by the High Court under Article 226 of the Constitution under Section 30  

read with Section 31 of the Act. Thereby, there is a chance of anomalous situation.  

Therefore, it is always desirable for the High Court to act in terms of the law laid  

down by this Court as referred to above, which is binding on the High Court under  

Article 141 of the Constitution of India, allowing the aggrieved person to avail the  

remedy under Section 30 read with Section 31 of the Armed Forces Tribunal Act.  

44. The High Court (the Delhi High Court) while entertaining the writ petition under  

Article 226 of the Constitution bypassed the machinery created under Sections 30  

and 31 of the Act. However, we find that the Andhra Pradesh High Court and the  

Allahabad High Court had not entertained the petitions under Article 226 and  

directed the writ petitioners to seek resort under Sections 30 and 31 of the Act.  

Further, the law laid down by this Court, as referred to above, being binding on the  

High Court, we are of the view that the Delhi High Court was not justified in  

entertaining the petition under Article 226 of the Constitution of India."  

219. The seven-judge Constitution Bench in L. Chandra Kumar (supra)  

considered at great length the permissibility of altering the power of judicial review  

exercisable by High Courts under Article 226. It authoritatively held that all orders  

passed by Tribunals which have been established under Article 323A or 323B of  

the Constitution, shall be amenable to the writ jurisdiction of High Courts. This  

Court, however, in an attempt to respect the intent of facilitating speedy disposal  

expressed by the Parliament, directed that such orders of the Central  

Administrative Tribunals be heard by a Division Bench of the High Court if  

challenged under Article 226. This Court, thus, held:-  

"91. It has also been contended before us that even in dealing with cases which are  

properly before the Tribunals, the manner in which justice is dispensed by them

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leaves much to be desired. Moreover, the remedy provided in the parent statutes,  

by way of an appeal by special leave under Article 136 of the Constitution, is too  

costly and inaccessible for it to be real and effective. Furthermore, the result of  

providing such a remedy is that the docket of the Supreme Court is crowded with  

decisions of Tribunals that are challenged on relatively trivial grounds and it is forced  

to perform the role of a first appellate court. We have already emphasised the  

necessity for ensuring that the High Courts are able to exercise judicial  

superintendence over the decisions of the Tribunals under Article 227 of the  

Constitution. In R.K. Jain case [(1993) 4 SCC 119 : 1993 SCC (L&S) 1128 : (1993)  

25 ATC 464] , after taking note of these facts, it was suggested that the possibility  

of an appeal from the Tribunal on questions of law to a Division Bench of a High  

Court within whose territorial jurisdiction the Tribunal falls, be pursued. It appears  

that no follow-up action has been taken pursuant to the suggestion. Such a measure  

would have improved matters considerably. Having regard to both the aforestated  

contentions, we hold that all decisions of Tribunals, whether created pursuant to  

Article 323-A or Article 323-B of the Constitution, will be subject to the High Court's  

writ jurisdiction under Articles 226/227 of the Constitution, before a Division Bench  

of the High Court within whose territorial jurisdiction the particular Tribunal falls.”  

220. It is hence clear post L Chandrakumar (supra) that writ jurisdiction under  

Article 226 does not limit the powers of High Courts expressly or by implication  

against military or armed forces disputes. The limited ouster made by Article 227(4)  

only operates qua administrative supervision by the High Court and not judicial  

review. Article 136(2) prohibits direct appeals before the Supreme Court from an  

order of armed forces tribunals, but would not prohibit an appeal to the Supreme  

Court against the judicial review exercised by the High Court under Article 226.   

221. However, it is essential that High Courts use such powers of judicial review  

restrictively and on limited grounds, similar to the concept of ‘regulatory deference’  

which has evolved in the United States. Such a need was also noted by a nine-

judge bench in Mafatlal Industries Ltd. vs. Union of India51 which held that:  

“… While the jurisdiction of the High Courts under Article 226—and of this Court  

under Article 32—cannot be circumscribed by the provisions of the said enactments,  

they will certainly have due regard to the legislative intent evidenced by the  

provisions of the said Acts and would exercise their jurisdiction consistent with the  

provisions of the Act. The writ petition will be considered and disposed of in the light  

of and in accordance with the provisions of Section 11-B. This is for the reason that  

 51 (1997) 5 SCC 536

123    

the power under Article 226 has to be exercised to effectuate the rule of law and not  

for abrogating it.”  

222. The jurisdiction under Article 226, being part of the basic structure, can  

neither be tampered with nor diluted. Instead, it has to be zealously-protected and  

cannot be circumscribed by the provisions of any enactment, even if it be  

formulated for expeditious disposal and early finality of disputes. Further, High  

Courts are conscious enough to understand that such power must be exercised  

sparingly by them to ensure that they do not become alternate forums of appeal. A  

five-judge bench in Sangram Singh v. Election Tribunal52 whilst reiterating that  

jurisdiction under Article 226 could not be ousted, laid down certain guidelines for  

exercise of such power:   

“13. The jurisdiction which Articles 226 and 136 confer entitles the High Courts and  

this Court to examine the decisions of all tribunals to see whether they have acted  

illegally. That jurisdiction cannot be taken away by a legislative device that purports  

to confer power on a tribunal to act illegally by enacting a statute that its illegal acts  

shall become legal the moment the tribunal chooses to say they are legal. The  

legality of an act or conclusion is something that exists outside and apart from the  

decision of an inferior tribunal. It is a part of the law of the land which cannot be  

finally determined or altered by any tribunal of limited jurisdiction. The High Courts  

and the Supreme Court alone can determine what the law of the land is vis-a-vis all  

other courts and tribunals and they alone can pronounce with authority and finality  

on what is legal and what is not. All that an inferior tribunal can do is to reach a  

tentative conclusion which is subject to review under Articles 226 and 136.  

Therefore, the jurisdiction of the High Courts under Article 226 with that of the  

Supreme Court above them remains to its fullest extent despite Section 105.”  

223. It is apparent that the Legislature has not been provided with desired  

assistance so that it may rectify the anomalies which arise from provisions of direct  

appeal to the Supreme Court. Considering that such direct appeals have become  

serious impediments in the discharge of Constitutional functions by this Court and  

also affects access to justice for citizens, it is high time that the Union of India, in  

 52 (1955) 2 SCR 1

124    

consultation with either the Law Commission or any other expert body, revisit such  

provisions under various enactments providing for direct appeals to the Supreme  

Court against orders of Tribunals, and instead provide appeals to Division Benches  

of High Courts, if at all necessary. Doing so would have myriad benefits. In addition  

to increasing affordability of justice and more effective Constitutional adjudication  

by this Court, it would also provide an avenue for High Court Judges to keep face  

with contemporaneous evolutions in law, and hence enrich them with adequate  

experience before they come to this Court. We direct that the Union undertake  

such an exercise expeditiously, preferably within a period of six months at the  

maximum, and place the findings before Parliament for appropriate action as may  

be deemed fit.  

ISSUE VIII: WHETHER THERE IS A NEED FOR AMALGAMATION OF  

EXISTING TRIBUNALS AND SETTING UP OF BENCHES  

224. While seeking a ‘Judicial Impact Assessment’ of all existing Tribunals,  

counsels for petitioners/appellant(s) have underscored the exorbitant pendency  

before of a number of Tribunals like the CESTAT and ITAT, which they claim  

affects the very objective of tribunalisation.  On the other hand, they also highlight  

an incongruity wherein numerous Tribunals are hardly seized of any matters, and  

are exclusively situated in one location.    

225. As noted by this court on numerous occasions, including in Madras Bar  

Association (2014) (supra), although it is the prerogative of the Legislature to set  

up alternate avenues for dispute resolution to supplement the functioning of  

existing Courts, it is essential that such mechanisms are equally effective,

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competent and accessible.  Given that jurisdiction of High Courts and District  

Courts is affected by the constitution of Tribunals, it is necessary that benches of  

the Tribunals be established across the country.  However, owing to the small  

number of cases, many of these Tribunals do not have the critical mass of cases  

required for setting up of multiple benches.  On the other hand, it is evident that  

other Tribunals are pressed for resources and personnel.   

226. This ‘imbalance’ in distribution of case-load and inconsistencies in nature,  

location and functioning of Tribunals require urgent attention.  It is essential that  

after conducting a Judicial Impact Assessment as directed earlier, such ‘niche’  

Tribunals be amalgamated with others dealing with similar areas of law, to ensure  

effective utilisation of resources and to facilitate access to justice.   

227. We accordingly direct the Union to rationalise and amalgamate the existing  

Tribunals depending upon their case-load and commonality of subject-matter after  

conducting a Judicial Impact Assessment, in line with the recommendation of the  

Law Commission of India in its 272nd Report.  Additionally, the Union must ensure  

that, at the very least, circuit benches of all Tribunals are set up at the seats of all  

major jurisdictional High Courts.    

CONCLUSION  

228. In light of the above discussions and our analysis, it is held that:  

(i) The issue and question of Money Bill, as defined under Article 110(1) of  

the Constitution, and certification accorded by the Speaker of the Lok  

Sabha in respect of Part-XIV of the Finance Act, 2017 is referred to a  

larger Bench.   

126    

(ii) Section 184 of the Finance Act, 2017 does not suffer from excessive  

delegation of legislative functions as there are adequate principles to  

guide framing of delegated legislation, which would include the binding  

dictums of this Court.    

(iii) The Tribunal, Appellate Tribunal and other Authorities (Qualifications,  

Experience and other Conditions of Service of Members) Rules, 2017  

suffer from various infirmities as observed earlier. These Rules  

formulated by the Central Government under Section 184 of the Finance  

Act, 2017 being contrary to the parent enactment and the principles  

envisaged in the Constitution as interpreted by this Court, are hereby  

struck down in entirety.   

(iv) The Central Government is accordingly directed to re-formulate the  

Rules strictly in conformity and in accordance with the principles  

delineated by this Court in R.K. Jain (supra), L. Chandra Kumar  

(supra), Madras Bar Association (supra) and Gujarat Urja Vikas Ltd.  

(supra) conjointly read with the observations made in the earlier part of  

this decision.   

(v) The new set of Rules to be formulated by the Central Government shall  

ensure non-discriminatory and uniform conditions of service, including  

assured tenure, keeping in mind the fact that the Chairperson and  

Members appointed after retirement and those who are appointed from  

the Bar or from other specialised professions/services, constitute two  

separate and distinct homogeneous classes.

127    

(vi) It would be open to the Central Government to provide in the new set of  

Rules that the Presiding Officers or Members of the Statutory Tribunals  

shall not hold ‘rank’ and ‘status’ equivalent to that of the Judges of the  

Supreme Court or High Courts, as the case may be, only on the basis of  

drawing equal salary or other perquisites.  

(vii) There is a need-based requirement to conduct ‘Judicial Impact  

Assessment’ of all the Tribunals referable to the Finance Act, 2017 so as  

to analyse the ramifications of the changes in the framework of Tribunals  

as provided under the Finance Act, 2017. Thus, we find it appropriate to  

issue a writ of mandamus to the Ministry of Law and Justice to carry out  

such ‘Judicial Impact Assessment’ and submit the result of the findings  

before the competent legislative authority.   

(viii) The Central Government in consultation with the Law Commission of  

India or any other expert body shall re-visit the provisions of the statutes  

referable to the Finance Act, 2017 or other Acts as listed in para 174 of  

this order and place appropriate proposals before the Parliament for  

consideration of the need to remove direct appeals to the Supreme Court  

from orders of Tribunals. A decision in this regard by the Union of India  

shall be taken within six months.  

(ix) The Union Government shall carry out an appropriate exercise for  

amalgamation of existing Tribunals adopting the test of homogeneity of  

the subject matters to be dealt with and thereafter constitute adequate  

number of Benches commensurate with the existing and anticipated  

volume of work.  

128    

INTERIM RELIEF  

229. As the Tribunal, Appellate Tribunal and other Authorities (Qualification,  

Experience and other Conditions of Service of Members) Rules, 2017 have been  

struck down and several directions have been issued vide the majority judgment  

for framing of fresh set of Rules, we, as an interim order, direct that appointments  

to the Tribunal/Appellate Tribunal and the terms and conditions of appointment  

shall be in terms of the respective statutes before the enactment of the Finance  

Bill, 2017.  However, liberty is granted to the Union of India to seek modification of  

this order after they have framed fresh Rules in accordance with the majority  

judgment. However, in case any additional benefits concerning the salaries and  

emoluments have been granted under the Finance Act, they shall not be withdrawn  

and will be continued. These would equally apply to all new members.  

230. The present batch of matters is accordingly disposed of.    

231. Writ Petition (Civil) No. 267 of 2012 is also disposed of in the above terms  

as the issues arising are similar.   

………………………., CJI  [RANJAN GOGOI]  

………………………….,J  [N.V. RAMANA]  

…………………….………………………….,J  [DR DHANANJAYA Y CHANDRACHUD]  

………………………….,J  [DEEPAK GUPTA]  

NEW DELHI,                                                                    ………………………….,J  NOVEMBER 13, 2019                                                              [SANJIV KHANNA]

1  

REPORTABLE  

IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE/ORIGINAL JURISDICTION  

CIVIL APPEAL NO   8588  OF 2019  

(Arising out of SLP (C) No 15804 of 2017)  

Rojer Mathew                                     .... Appellant  

        Versus  

 South Indian Bank Ltd             ....Respondents  Rep by its Chief Manager & Ors                  

With     

Writ Petition (C) No 279 of 2017      

With    

Writ Petition (C) No 558 of 2017      

With    

Writ Petition (C) No 561 of 2017    

With    

Writ Petition (C) No 625 of 2017    

With    

Writ Petition (C) No 640 of 2017   

2  

 With  

 Writ Petition (C) No 1016 of 2017  

With    

Writ Petition (C) No 788 of 2017    

With    

Writ Petition (C) No 925 of 2017    

With    

Writ Petition (C) No 1098 of 2017    

With    

Writ Petition (C) No 1129 of 2017      

With    

Writ Petition (C) No 33 of 2018    

With    

Writ Petition (C) No 205 of 2018    

With    

Writ Petition (C) No 467 of 2018      

With    

Transferred Case (C) No 49 of 2018      

With    

Transferred Case (C) No 51 of 2018    

And   With  

 Transfer Petition (C) No 2199 of 2018  

3  

J U D G M E N T         Dr Dhananjaya Y Chandrachud, J  

   INDEX    A Introduction  

A.1 Challenges of the tribunal structure  

 A global trend  

 The old and the new  

 Domain specialisation   

 Expedition  

 Impact assessment   

 Independence   

A.2 A brief history of tribunalisation in India  

A.3 Shortcomings of the current framework  

 B The Reference to the Constitution Bench  

C Money Bills  

 Ordinary Bills, Money Bills and Financial Bills   

 Money Bills : Article 110  

 Certification by the Speaker   

 Final but not conclusive   

 Matters of procedure and substantive illegalities    

 D Puttaswamy: Judicial review of the certificate of the Speaker  

E Role of the Rajya Sabha  

 Bicameralism   

F Merits of the challenge  

F.1 Passage as a Money Bill  

F.2 Violation of directions issued by this Court  

F.3 Severability   

 G Conclusion

PART A  

4  

A Introduction  

A.1 Challenges of the tribunal structure  

A global trend  

1 India is no exception to the global trend towards the tribunalisation of justice.   

World over, tribunals have been constituted both in regulatory and adjudicatory  

areas. Tribunals act as adjudicators of disputes. This movement has in part been  

occasioned by new legislation governing modern societies as they confront the  

challenges thrown up by the complexities of social and economic orderings. The  

engagement of law with economics and technology has been shaped by social,  

cultural and historical contexts. While many of them may reflect the shared aspirations  

of societies governed by a common legal tradition, it would be simplistic to assume  

that the challenges thrown up by the layered adjudication through tribunals are  

common to all societies.  Hence, as we analyse the impact of the growing movement  

towards tribunalisation – a feature which is common to all societies – it is important to  

bear in mind the context in which our problems have arisen as we attempt to find  

answers to many of those concerns. Precedents, both judicial and scholarly, in other  

jurisdictions furnish a useful point of reference, so long as we understand that which is  

peculiarly our own.  

PART A  

5  

The old and the new  

 2 Courts and tribunals should in theory be, but are not always in practice,  

cooperative allies. Tribunals have taken over the mantle of deciding cases which  

conventionally were assigned for adjudication to courts.  Litigation, traditionally the  

domain of courts, has in incremental stages come to be transferred to the decision-

making authority of tribunals. There is hence a jurisdictional transfer of dispute  

resolution to tribunals. Accompanied by legislative enactment, this postulates the  

exclusivity of entrustment to tribunals. Then again, new tribunals have been  

constituted to deal with subject areas of a genre quite distinct from, and therefore,  

unlike the traditional pattern of litigation with which conventional courts were familiar.  

Tribunals have thus not only taken away subjects which have been carved out of the  

jurisdiction of courts as a matter of legislative policy, but have also fostered a new  

culture of adjudication over areas in which a traditional court mechanism had little  

experience and expertise. In that sense, tribunalisation represents an amalgam of the  

old and the new: a combination of the role which was traditionally performed by the  

court together with new functional responsibilities, quite unlike the dispute resolution  

function which was traditionally performed by courts.  

Domain specialisation   

 3 The movement towards setting up tribunals has been hastened in many parts  

by the need for specialisation. Specialisation acknowledges the pool of knowledge  

and domain expertise of persons who discharge core adjudicatory functions within  

PART A  

6  

tribunals. The assumption which underlies the setting up of tribunals is that those who  

decide are individuals possessed of the qualities necessary for adjudication in that  

specific field. Acquisition of knowledge prior to appointment to a tribunal and practical  

experience of handling subject areas reserved for the tribunal bring together a pool of  

individuals possessing the qualifications and abilities to render specialised justice. In  

fostering specialisation, the tribunal structure emphasises the specialisation of  

adjudicatory personnel. But equally, an important facet is the specialisation of those  

who appear before the tribunals. A specialised Bar is an invaluable input towards the  

efficiency of institutional adjudication. Together, this contributes to an adjudicatory  

process which is cognisant of the special features, needs and requirements of the  

subject areas carved for the tribunal.  

   4 The extent to which the purpose of setting up tribunals is realized is often a  

projection of ground realities. These realities, including the manner and extent to  

which provisions of the law governing a tribunal are enforced, directly impact upon the  

efficacy of the tribunal. Critical to the purpose of having a specialised tribunal is the  

presence of specialised adjudicators on decision-making posts. For, it is their domain  

expertise which defines the quality of outcomes in the adjudicatory process.  

Collectively, the presence of specialised adjudicators depends upon well-trained and  

qualified persons and their availability in a source pool. This factor has often been lost  

sight of in the selection of judges to specialised tribunals. Absent the requisite degree  

of expertise, the procedure and functioning of the tribunal may only replicate a  

conventional adjudication in a court of law which the tribunal seeks to substitute.

PART A  

7  

Expedition  

 5 Apart from specialisation, a significant reason for the establishment of tribunals  

is expedition in the course of justice.  This is also linked to the perceived values  

implicit in a specialised adjudicatory process.  Domain expertise, particularly in a  

complex area, is a means of allowing adjudicators who understand the subject to  

decide quickly and effectively. It is often expected that the tribunal will follow  

procedures which are less cumbersome and tied to forms established in conventional  

courts. By allowing for a measure of procedural flexibility coupled with domain  

knowledge, tribunals are expected to remedy some of the causes which burden the  

judicial system.  

6 Similarly, another object of the growing need for tribunalisation is to unburden  

the court system. That purpose may be subserved when a chunk of existing cases  

pending before the conventional court system are transferred for adjudication to the  

newly created body. Reducing the burden on courts is a partial realisation of the  

purpose underlying the creation of the tribunal. Equally significant is that the tribunal  

must possess the ability not to allow, over a period of time, accretions of undisposed  

cases which had created judicial arrears in the first place. Statistical reduction of  

pending arrears in the judicial system occasioned by the creation of a tribunal has to  

be matched by the capacity of the new body to dispose of cases transferred to it from  

the court as well as new institutions before it. If this is not achieved, the net result is to  

defeat the very purpose of establishing the tribunal.

PART A  

8  

Impact assessment   

 7 Our analysis above indicates that the actual impact of the creation of a  

structure of tribunals needs to be closely monitored to assess the efficacy of a tribunal  

as a measure of legal reform. The efficacy of the tribunal is functionally dependent on  

the availability of resources and capital, both human and otherwise. The tribunal must  

be possessed of adequate infrastructure both in terms of physical availability and the  

deployment of technological knowledge in the management of litigation. The  

procedures adopted by the tribunal must be flexible enough to allow for decision-

making effectively and without delay. The process of making appointments to the  

tribunals must be seamless in order to fill up vacancies arising from retirement or  

unforeseen causes. The presence of large-scale vacancies can render tribunals  

defunct. This defeats the cause of justice in the area of the jurisdiction of the tribunal.  

This problem becomes particularly acute where a jurisdiction of a conventional court  

has been transferred to the tribunal under the provisions of an operating enactment.  

Absent a recourse to traditional courts for the resolution of conflicts, a litigant is  

virtually denied access as a result of an unavailable adjudicator to resolve a dispute.  

In other words, the process for appointment and selection has a direct bearing on the  

efficacy of tribunalisation. Keeping vacancies unfilled, either as a matter of tardy  

procedures or for other reasons, has the tendency to denude the efficacy of the  

tribunal as a dispute resolution mechanism. The surest way to deny access to justice  

is to keep a large number of vacancies.  

PART A  

9  

Independence   

8 Above all, the efficacy of tribunalisation rests in the confidence in the process of  

providing justice. This is determined by the independence and objectivity of justice  

providers. There is a vital societal interest in preserving the sanctity of the process by  

which judges are selected for appointment. The method of selecting and appointing   

judges to tribunals determines in the ultimate analysis, the independence of the  

tribunals. Tribunals have been conceived as institutional measures to provide justice  

in substitution of that provided by conventional courts. Hence, there is a valid reason  

to ensure the independence of these adjudicating bodies. The process of selection as  

well as the terms of appointment is determinative of the ability to attract talent to the  

tribunals. Hence, in preserving the independence of the tribunals as a facet of judicial  

independence, the effort must be to ensure that the adjudicatory body is robust:  

subservient to none and accountable to the need to render justice in the context of  

specialised adjudication.   

A2 A brief history of tribunalisation in India  

9 Delay and backlog in adjudication of cases was a problem even during the  

colonial era. 1  The earliest available effort suggesting reforms to handle arrears was  

the Justice Rankin Committee report in 1924. Since then, there have been a number   

of expert  body  reports, including  the Law Commission of India. In India, the  

establishment of tribunals was done in 1941 by the colonial government. Post-

Independence, tribunals were first created in the sphere of tax laws. The original  

                                                 1  Arun K Thiruvengadam, 'Tribunals' in The Oxford Handbook Of The Indian Constitution (Sujit Choudhry et al eds.,  

(Oxford University Press New York, 2016), pp. 412-31.

PART A  

10  

Constitution referred to tribunals only incidentally in Articles 136 and 227, which  

specify that the Supreme Court and the High Courts respectively shall have   power to  

review  decisions  of tribunals. The High Court Arrears Committee constituted with  

Justice J. C. Shah as Chairperson in 1969 recommended the constitution of an  

independent tribunal to handle service matters pending before the High Courts and  

the Supreme Court. The Swaran Singh Committee had been constituted by the Union  

Government to recommend changes to the Constitution. Its report released in 1986  

recommended  the setting  up  of tribunals  for  three  broad  subject  areas  to  reduce  

arrears in  the  Indian  legal system. The report further recommended that the  

decisions of all these tribunals should be subject to the jurisdiction of the Supreme  

Court under Article 136 of the Constitution, but should exclude the jurisdiction of all  

other courts, including writ jurisdiction.  

   10 Consequently, the establishment of tribunals in India attained constitutional  

recognition by the insertion of Articles 323A and 323B in the Constitution, which  

granted power to the Parliament and state legislatures to establish administrative   

tribunals  and  tribunals  for  other  matters respectively.  

 11 In pursuance of the power conferred upon it by clause (1) of Article 323A of the  

Constitution, Parliament enacted the Administrative Tribunals Act 1985 2  for the setting  

up of tribunals to deal exclusively with service matters. In S P Sampath Kumar v  

Union of India 3  (‗Sampath Kumar‘), the first challenge to the constitutionality of  

                                                 2  ―1985 Act‖  

3  (1987) 1 SCC 124

PART A  

11  

tribunals arose.  This court held that the ‗tribunal should be a real substitute for High  

Courts — ‗not only in form and de jure but in content and de facto.‘ In this view,  

alternative arrangements have to be effective and efficient as also capable of  

upholding constitutional limitations. The court held that though judicial review is a  

basic feature of the Constitution, vesting of the power of judicial review in an  

alternative institutional mechanism would not do violence to the basic structure of the  

Constitution so long as it was ensured that the alternative mechanism was an  

effective and real substitute for the High Court. It was also held that a High-Power  

Selection Committee 4  must be constituted with a sitting judge of the Supreme Court  

nominated by the Chief Justice of India to ensure the selection of competent  

adjudicators to the tribunals. Upholding the vires of the 1985 Act, the Court suggested  

several amendments to cure the defects with respect to the composition of the tribunal  

and the mode of appointment of the Chairperson, Vice-Chairperson and members  

which were to be carried out by 31 March, 1987.   

 12 Decisions subsequent to Sampath Kumar had required a fresh look by a larger  

Bench of this Court over the issues that had been decided. In L Chandra Kumar v  

Union of India 5  (‗Chandra Kumar‘), a seven judge Bench of this Court revisited the  

challenge to the 1985 Act and the power conferred on the Parliament or the state  

legislatures by Articles 323A(2)(d) and 323B(3)(d), as the case may be, to exclude the  

jurisdiction of ‗all courts‘, except that of this Court under Article 136 in respect of  

                                                 4  ―We do not want to say anything about Vice-Chairman and members dealt with in sub-sections (2), (3) or (3-A)  

because so far as their selection is concerned, we are of the view that such selection when it is not of a sitting Judge or  retired Judge of a High Court should be done by a high-powered committee with a sitting Judge of the Supreme Court  to be nominated by the Chief Justice of India as its Chairman. This will ensure selection of proper and competent  people to man these high offices of trust and help to build up reputation and acceptability.‖  5  (1997) 3 SCC 261  

PART A  

12  

disputes referred to in those Articles. Overruling the decision in Sampath Kumar, this  

Court drew a distinction between the substitutional role and the supplemental role of  

tribunals with respect to High Courts and held that the role of tribunals is supplemental  

in nature.  

 13 Chief Justice A M Ahmadi noted that the Constitution provides elaborate  

provisions dealing with terms of appointments of judges of higher courts. The learned  

judge observed that the same safeguards are not available to the subordinate  

judiciary or members of tribunals. Hence, they can never be considered full and  

effective substitutes for the superior judiciary in discharging the function of  

constitutional interpretation :  

“78…The constitutional safeguards which ensure the  

independence of the Judges of the superior judiciary, are  

not available to the Judges of the subordinate judiciary  

or to those who man tribunals created by ordinary  

legislations. Consequently, Judges of the latter category  

can never be considered full and effective substitutes for  

the superior judiciary in discharging the function of  

constitutional interpretation…”  

(Emphasis supplied)    

The Court struck down Articles 323A(2)(d) and 323B(3)(d) as unconstitutional. It was  

also held that an ―exclusion of jurisdiction‖ clause enacted in any legislation, under the  

aegis of Articles 323A(2)(d) and 323B(3)(d) is unconstitutional.  

   14 In Union of India v R Gandhi, President, Madras Bar Association

6  („R  

Gandhi‟), the constitutional validity of Chapters 1-B and 1-C of the Companies Act,  

                                                 6  (2010) 11 SCC 1

PART A  

13  

1956 as inserted by the Companies (Second Amendment) Act 2002 which provided  

for the constitution of a National Company Law Tribunal 7  and the National Company  

Law Appellate Tribunal 8  was challenged. Justice R V Raveendran noted that despite  

the salient objective behind the constitution of tribunals, ‗full independence‘ had not  

been achieved by them. The Court affirmed the view in Chandra Kumar that a  

tribunal may consist of both judicial and technical members. Judicial members ensure  

‗impartiality, fairness and reasonableness in consideration‘ and technical members  

ensure ‗the availability of expertise and experience related to the field of adjudication‘.  

 15 Though the legislature is empowered to prescribe qualifications for members,  

the Court held that superior courts in the country retain their power of judicial review  

over the prescribed qualifications to ensure that judicial functions are discharged  

effectively. The Court surveyed various enactments 9  and the qualifications prescribed  

in them for appointment as judicial and technical members and noted that the ‗speed  

at which the qualifications for appointment as members is being diluted is, to say the  

least, a matter of great concern for the independence of the judiciary.‘ The Court  

cautioned that tribunals cannot become providers of sinecure to members of civil  

services, by appointing them as technical members. The Court emphasised that  

‗impartiality, independence, fairness and reasonableness in decision making are the  

hallmarks of judiciary‘ and laid down the eligibility criteria for judicial and technical  

members. Taking note of the recruitment conditions for judicial and technical  

members, tenure and service conditions, the Court upheld the creation of the NCLT  

                                                 7  ―NCLT‖  

8  ―NCLAT‖  

9  Administrative Tribunals Act 1985, Information Technology Act 2000, Companies Act 1956 as amended (Chapter 1B).

PART A  

14  

and NCLAT. Several suggestions to amend part 1-B and 1-C were issued, to be  

carried out as a condition precedent to ensure that the NCLT and the NCLAT may be  

made operational in accordance with the observations made by this Court.  

16 In Madras Bar Association v Union of India 10

(‗Madras Bar Association II‘),  

the constitutional validity of the National Tax Tribunal Act 2005 11

and the Constitution  

(Forty-Second) Amendment 1976 was challenged on the ground of violating the basic  

structure of the Constitution. The National Tax Tribunal 12

was vested with the power of  

adjudicating appeals which included a substantial question of law arising from orders  

passed by appellate tribunals under specific tax enactments. Prior to the 2005 Act, the  

jurisdiction to adjudicate these appeals lay with the jurisdictional High Court.  

 17 The Court rejected the contention that there was a constitutional mandate for  

the appellate jurisdiction pertaining to tax matters to remain with the High Courts, but  

held that the members of the Tribunal should be appointed in the same manner and  

should be entitled to the same security of tenure as the judges of the Court sought to  

be substituted. The Court rejected the challenge based on the separation of powers  

and proceeded to examine the validity of individual provisions. Section 6 of the Act  

permitted accountant members or technical members in the respective appellate  

tribunals to be appointed as members of the NTT. The Court affirmed the position laid  

down in Chandra Kumar and R Gandhi that the appointment of technical members is  

                                                 10

(2014) 10 SCC 1  11

2005 Act  12

―NTT‖

PART A  

15  

restricted to the cases where technical expertise is essential for adjudication and is  

impermissible in any other case. Thus, the provision was struck down.  

 18 Section 7 of the 2005 Act provided for the process of selection and appointment  

of the Chairperson and members of the NTT. The Court observed that as the  

jurisdiction of the High Courts was being transferred to the Tribunal, the stature of the  

members, conditions of service, and manner of appointment and removal of members  

must be akin to that of the judges of High Courts. The selection process included  

Secretaries of the Departments of the Central Government. The Court struck down  

the section as unconstitutional. Finally, Section 8 stipulated that that a  

Chairperson/Member who is appointed for an initial duration of five years, is eligible  

for reappointment for a further period of five years. Striking down the provision as  

unconstitutional, the Court held that the provision for reappointment would undermine  

the independence of the member who would presumably be constrained to decide  

matters in a manner that would ensure their reappointment. The Court noted that  

since the NTT had been vested with jurisdiction that earlier vested in the High Courts,  

all matters of appointment and extension of tenure must be shielded from the  

executive. The Court noted that upon the declaration of numerous provisions as  

unconstitutional, the remaining provisions were rendered ‗otiose and worthless‘.  

Hence, the 2005 Act was struck down in its entirety.   

PART A  

16  

19 Pursuant to the enactment of the Companies Act 2013, a Constitution Bench of  

this Court in Madras Bar Association v Union of India 13

dealt with the contention  

that despite the directions issued in R Gandhi in respect of the provisions concerning  

the NCLT and the NCLAT, analogous provisions had been inserted in the 2013 Act  

without complying with those directions. The Court embarked on a comparison of  

various provisions of the Companies Act 2013 with the directions issued in R Gandhi  

and observed that many discrepancies persisted which were in contravention of the  

directions issued by this Court in the earlier round of litigation concerning the  

qualifications, appointments, eligibility, and composition of the Selection Committees.  

The Court affirmed the directions issued in R Gandhi including the direction on the  

composition of the Selection Committee and held that once remedial measures are  

taken to bring the provisions in conformity with the directions issued, the NCLT and  

the NCLAT may commence operations.   

A.3 Shortcomings of the current framework  

 20 Tribunalisation was intended to combat the high pendency of cases before  

Indian Courts. However, experience gained from the working of tribunals suggests  

that the efficiency of tribunals in India is significantly reduced due to systemic and  

administrative problems. The 272nd Report of the Law Commission of 2017 has  

highlighted the high level of pendency before the Tribunals. The chart from the report  

is reproduced below:  

                                                 13

(2015) 8 SCC 583

PART A  

17  

Tribunal As On Number of  

Pending cases  

1 Central Administrative Tribunal July, 2017 44,333  

2 Railway Claims Tribunal 30.09.2016 45, 604  

3 Debt Recovery Tribunal 03.07.2016 78,118  

4 Customs, Excise, and Service Tax  

Appeal Tribunal  

End of 2016 90,592  

5 Income Tax Appellate Tribunal End of 2016 91, 538  

21 Vidhi Centre for Legal Policy in a report titled ―Reforming The Tribunals  

Framework In India‖ highlights the problems plaguing the tribunal system in India.  

These problems have been categorised thus:  

A) Lack of independence  

The report highlights that in some cases, Ministries are parties before the  tribunals.  

The staff, finances, and administration are under the control of the Ministry. The  

problem is exacerbated by a revolving door between the bureaucracy and tribunal  

posts. Therefore, the report states that it is crucial to assess the independence of  

tribunals  based on the certain parameters including (a) appointment  of  members; b)  

removal  of  members;  (c)  reappointments;  (d)  nodal  ministry; and  (e) proclivity to  

appoint judges/bureaucrats.  

PART A  

18  

B) Administrative concerns: lack of uniformity in regulation  

The report notes that an inconsistency in qualification requirements leads to  

differences in competencies, maturity and status of members. These inconsistencies  

are problematic with regard to the growing trend of tribunalisation. Further, the short  

tenure of members obviates the cultivation of ‗domain expertise‘, which can have an  

impact on the efficacy of tribunals. It is also recommended that the age of retirement  

be made uniform as uneven tenures hamper institutional continuity. The report notes  

the holding in L Chandra Kumar which criticizes the inconsistencies in the  

appointment process, qualification of members, age of retirement, resources and  

infrastructure of different tribunals. They can be attributed to tribunals operating under  

different ministries. The report affirms the observation in the judgment that a single  

nodal authority or ministry is required for the administration of tribunals in order to  

improve efficiency.   

 C) Pendency and vacancy in Tribunals  

The report notes that the high rate of pendency can be attributed to systemic issues.  

For example, the Debt Recovery Tribunal had 58% failed hearings (i.e. avoidable  

adjournments that were not penalised) and condonations were often granted due to  

delays in filing. Such delays accounted for more than half the time taken up by cases.  

Another significant cause for delays is absenteeism of tribunal members.

PART A  

19  

D) Jurisdiction of the High Courts  

Provisions allowing direct appeals to the Supreme Court which by-pass the jurisdiction  

of High Courts have been examined in multiple cases. Despite  existing precedents  

and Law Commission of India recommendations, parent statutes of many tribunals   

allow  for  a  direct  appeal  to  the  Supreme  Court. Two issues have been noted:  

Firstly, a direct appeal to the Supreme Court is inaccessible to litigants; and Secondly,  

such a provision leads to congestion of the docket of the Supreme Court.  

PART B  

20  

B The Reference to the Constitution Bench  

22 At its core, the present reference before the Constitution Bench  raises the  

issue of whether a law which seeks to substitute existing statutory provisions  

governing the appointment, selection and conditions of service of diverse tribunals  

can validly be enacted as a Money Bill as a component of the Finance Act. The  

answer to this question must in turn depend upon two facets :  

(i) Whether judicial review can extend to determining the constitutional validity  

of a decision of the Speaker of the Upper House to certify the passage of a  

Bill as a Money Bill under Article 110 of the Constitution; and  

(ii) Whether the statutory modification of the procedure for appointment and  

selection of members and their conditions of service is destructive of judicial  

independence and hence ultra vires.  

Between the universe represented by these two issues, lie the shades of argument  

upon which the decision of this case will turn.  

PART C  

21  

C Money Bills  

Ordinary Bills, Money Bills and Financial Bills   

23 Conceptually, the Constitution contains a classification of Bills as: (i) Ordinary  

Bills; (ii) Money Bills and (iii) Financial Bills. Bills other than Money Bills and Financial  

Bills can originate in either House of Parliament 14

. An Ordinary Bill is passed by both  

the Houses of Parliament when it has been agreed upon by both the Houses, either  

without amendment or with such amendments as agreed. The President is conferred  

with the constitutional authority to convene a joint sitting of both the Houses of  

Parliament in order to deliberate upon and vote on a Bill which is not a Money Bill 15

.  

Special provisions are engrafted into the Constitution for the passage of Money Bills.  

Unlike an Ordinary Bill which can originate in either House of Parliament, a Money Bill                                                    14

Article 107(1) : Subject to the provisions of articles 109 and 117 with respect to Money Bills and other financial Bills, a  Bill may originate in either House of Parliament.  15

Article 108  : (1) If after a Bill has been passed by one House and transmitted to the other House—  (a) the Bill is rejected by the other House; or  (b) the Houses have finally disagreed as to the amendments to be made in the Bill; or   (c) more than six months elapse from the date of the reception of the Bill by the other House without the  

Bill being passed by it,  the President may, unless the Bill has elapsed by reason of a dissolution of the House of the People,  

notify to the Houses by message if they are sitting or by public notification if they are not sitting, his  intention to summon them to meet in a joint sitting for the purpose of deliberating and voting on the  Bill:  

Provided that nothing in this clause shall apply to a Money Bill.  (2) In reckoning any such period of six months as is referred to in clause (1), no account shall be taken of  

any period during which the House referred to in sub-clause (c) of that clause is prorogued or  adjourned for more than four consecutive days.  

(3) Where the President has under clause (1) notified his intention of summoning the Houses to meet in  a joint sitting, neither House shall proceed further with the Bill, but the President may at any time  after the date of his notification summon the Houses to meet in a joint sitting for the purpose  specified in the notification and, if he does so, the Houses shall meet accordingly.  

(4) If at the joint sitting of the two Houses the Bill, with such amendments, if any, as are agreed to in joint sitting, is  passed by a majority of the total number of members of both Houses present and voting, it shall be deemed for the  purposes of this Constitution to have been passed by both Houses:  

Provided that at a joint sitting—  (a) if the Bill, having been passed by one House, has not been passed by the other House with amendments and  

returned to the House in which it originated, no amendment shall be proposed to the Bill other than such  amendments (if any) as are made necessary by the delay in the passage of the Bill;   

(b) if the Bill has been so passed and returned, only such amendments as aforesaid shall be proposed to the Bill and  such other amendments as are relevant to the matters with respect to which the Houses  have not agreed;  

and the decision of the person presiding as to the amendments which are admissible under this clause shall be final.  (5) A joint sitting may be held under this article and a Bill passed thereat, notwithstanding that a dissolution of the  

House of the People has intervened since the President notified his intention to summon the Houses to meet  therein.

PART C  

22  

cannot be introduced in the Council of States. Article 109 specifies the procedure for  

the passage of a Money Bill. Article 109 reads thus:  

―109. (1) A Money Bill shall not be introduced in the Council of  

States.  

(2) After a Money Bill has been passed by the House of the  

People it shall be transmitted to the Council of States for its  

recommendations and the Council of States shall within a  

period of fourteen days from the date of its receipt of the Bill  

return the Bill to the House of the People with its  

recommendations and the House of the People may  

thereupon either accept or reject all or any of the  

recommendations of the Council of States.  

(3) If the House of the People accepts any of the  

recommendations of the Council of States, the Money Bill  

shall be deemed to have been passed by both Houses with  

the amendments recommended by the Council of States and  

accepted by the House of the People.  

(4) If the House of the People does not accept any of the  

recommendations of the Council of States, the Money Bill  

shall be deemed to have been passed by both Houses in the  

form in which it was passed by the House of the People  

without any of the amendments recommended by the Council  

of States.  

(5) If a Money Bill passed by the House of the People and  

transmitted to the Council of States for its recommendations  

is not returned to the House of the People within the said  

period of fourteen days, it shall be deemed to have been  

passed by both Houses at the expiration of the said period in  

the form in which it was passed by the House of the People.‖  

24 The role of the Rajya Sabha in the passage of Money Bill is restricted. A Money  

Bill can originate only in the Lok Sabha. After it is passed by the Lok Sabha, the Bill is  

transmitted to the Rajya Sabha for its recommendation. The Rajya Sabha has a  

stipulated period of fourteen days to submit the Bill back to the Lok Sabha with its  

recommendation. Recommendations of the Rajya Sabha are of a non-binding

PART C  

23  

character. If the Lok Sabha rejects the recommendations, it is deemed to have been  

passed by both the Houses in the form in which it was passed by the Lok Sabha  

without the recommendations of the Rajya Sabha. If the Rajya Sabha were not to  

respond within the stipulated period of fourteen days, the same consequence would  

ensue. In distinction to the role which is entrusted to the Rajya Sabha in the passage  

of Ordinary Bills by Article 107, Article 109 confers virtually an overriding authority to  

the Lok Sabha in the passage of Money Bills. A Money Bill, unlike an Ordinary Bill,  

can only originate in the Lok Sabha. In the passage of a Money Bill, the Rajya Sabha  

has thus only a recommendatory role. Ordinary Bills, on the other hand, require the  

agreement of both the Houses of Parliament to ensure their passage.  

25 The third category of Bills - Financial Bills, is specified in Article 117 16

. The  

reference to Financial Bills is contained in the marginal note to Article 117. Article 117  

(1) indicates that a Bill which makes provision for any of the matters specified in  

clauses (a) to (f) of Article 110 (1) can be introduced or moved only on the  

recommendation of the President and  such a Bill shall not be introduced in the Rajya  

Sabha. The text of Article 117 (1) speaks of Money Bills and other Financial Bills as  

classes of Bills which can originate only in the Lok Sabha.   

                                                 16

Article 117 : (1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of  clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill  making such provision shall not be introduced in the Council of States:       Provided that no recommendation shall be required under this clause for the moving of an amendment making  provision for the reduction or abolition of any tax.   (2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it  provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or  fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation  of any tax by any local authority or body for local purposes.  (3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India  shall not be passed by either House of Parliament unless the President has recommended to that House the  consideration of the Bill.

PART C  

24  

Money Bills : Article 110  

 Article 110 contains a definition of Money Bills in the following terms :  

 ―110. (1) For the purposes of this Chapter, a Bill shall be  

deemed to be a Money Bill if it contains only 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 borrowing of money or the giving of  

any guarantee by the Government of India, or the amendment  

of the law with respect to any financial obligations undertaken  

or to be undertaken by the Government of India;   

(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 India or the public account of India or the custody or issue  

of such money or the audit of the accounts of the Union or of  

a State; or   

(g) any matter incidental to any of the matters specified in  

sub-clauses (a) to (f).   

(2) A Bill shall not be deemed to be a Money Bill by reason  

only that it provides for the imposition of fines or other  

pecuniary penalties, or for the demand or payment of fees for  

licences or fees for services rendered, or by reason that it  

provides for the imposition, abolition, remission, alteration or  

regulation of any tax by any local authority or body for local  

purposes.   

(3) If any question arises whether a Bill is a Money Bill or not,  

the decision of the Speaker of the House of the People  

thereon shall be final.  

(4) There shall be endorsed on every Money Bill when it is  

transmitted to the Council of States under article 109, and  

when it is presented to the President for assent under article  

111, the certificate of the Speaker of the House of the People  

signed by him that it is a Money Bill.‖  

PART C  

25  

26 Tracing the origin and evolution of Money Bills, Thomas Erskine May in ―The   

Treatise on The Law, Privileges, Proceedings and Usage of Parliament‖ 17

dwells  

on the relationship between the House of Commons and House of Lords in  Britain in  

regard to their powers of taxation and on matters of national revenue and public   

expenditure. For nearly three hundred years, the House of Commons was possessed  

of the legal right to originate grants, but the House of Lords was not precluded from  

amending a Bill. By two resolutions of the Commons in 1671 and 1678, the powers of  

the House of Lords were curtailed so as to enable only the Commons to have the sole  

right to direct or limit the scope of a Bill regarding taxation and government  

expenditure. The House of Lords came to be excluded from altering any such Bill.  

Even after the enactment of the Standing Order of 1849 which accommodated space  

to the House of Lords to suggest amendments of legislative issues, the tussle  

between the House of Commons and the House of Lords continued, resulting in the  

passage of the Parliament Act of 1911. Section 1 defines the power of the House of  

Lords in Money Bills in the following terms :  

―1. Powers of House of Lords as to Money Bills.—(1) If a  

Money Bill, having been passed by the House of Commons,  

and sent up to the House of Lords at least one month before  

the end of the session, is not passed by the House of Lords  

without amendment within one month after it is so sent up to  

that House, the Bill shall, unless the House of Commons  

direct to the contrary, be presented to His Majesty and  

become an Act of Parliament on the Royal Assent being  

signified, notwithstanding that the House of Lords have not  

consented to the Bill.‖  

                                                 17

C. Knight & Company, 1844      

PART C  

26  

Section 1(2) defines the expression Money Bill in the following manner :  

―1. (2) A Money Bill means a Public Bill which in the opinion of  

the Speaker of the House of Commons contains only  

provisions dealing with all or any of the following subjects,  

namely, the imposition, repeal, remission, alteration, or  

regulation of taxation; the imposition for the payment of debt  

or other financial purposes of charges on the Consolidated  

Fund, the National Loans Fund or on money provided by  

Parliament, or the variation or repeal of any such charges;  

supply; the appropriation, receipt, custody, issue or audit of  

accounts of public money; the raising or guarantee of any  

loan or the repayment thereof; or subordinate matters  

incidental to those subjects or any of them. In this sub-section  

the expressions ―taxation‖, ―public money‖, and ―loan‖  

respectively do not include any taxation, money, or loan  

raised by local authorities or bodies for local purposes.‖  

27 Two facets of the above definition merit emphasis: the first is the use of the  

expression ‗means‘ which indicates that the definition is exhaustive; and second, that  

the content of a Money Bill can have ―only provisions‖ dealing with the subjects  

enunciated in the provision. Under Section 1(3), a Money Bill sent to the House of  

Lords and to Her Majesty for assent should be endorsed with the certificate of the  

Speaker of the House of Commons that it is a Money Bill. Section 3 attributes finality  

to the decision of the Speaker, rendering it immune from judicial review :  

―3. Certificate of Speaker.—Any certificate of the Speaker of  

the House of Commons given under this Act shall be  

conclusive for all purposes, and shall not be questioned in  

any court of law.‖  

(Emphasis supplied)  

The Treatise by Erskine May contains the following elaboration of the procedure in  

passing a Money Bill:  

―A ‗Money Bill‘ which has been passed by the House of  

Commons and sent up to the House of Lords at least one

PART C  

27  

month before the end of the session, but is not passed by the  

House of Lords without amendment within one month after it  

is so sent up, is, unless the House of Commons direct to the  

contrary, to be presented for the Royal Assent and becomes  

an Act of Parliament on the Royal Assent being signified to it.  

A ‗Money Bill‘, when it is sent up to the House of Lords and  

when it is presented to Her Majesty, must be endorsed with  

the Speakers‘ certificate that it is such a bill. Before giving this  

certificate the Speaker is directed to consult, if practicable,  

those two members of the Panel of Chairs  who are appointed  

for the purpose at the beginning of each session by the  

Committee of Selection.  

When the Speaker has certified a bill to be a ‗Money Bill‘ this  

is recorded in the journal; and Section 3 of the Parliament  

Act 1911 stipulates such certificate is conclusive for all  

purposes and may not be questioned in a court of law.    

No serious practical difficulty normally arises in deciding  

whether a particular bill is or is not a ‗Money Bill‘; and criticism  

has seldom been voiced of the Speaker‘s action in giving or  

withholding a certificate. A bill which contains any of the  

enumerated matters and nothing besides is indisputably  

a „Money Bill‟. If it contains any other matters, then,  

unless these are „subordinate matters incidental to‟ and  

of the enumerated matters so contained in the bill, the  

bill is not a „Money Bill‟. Furthermore, even if the main  

object of a bill is to create a new charge on the  

Consolidated Fund or on money provided by Parliament,  

the bill will not be certified if it is apparent that the  

primary purpose of the new charge is not purely  

financial.  

The Speaker does not consider the question of certifying a bill  

until it has reached the form in which it will leave the House of  

Commons, and has declined to give an opinion on whether  

the acceptance of a proposed amendment would prevent a  

bill for being certified as a Money bill. Similarly, in committee  

the chairman has declined to anticipate the Speaker‘s  

decision in this matter or to allow the effect of an amendment  

in this regard to be raised as a point of order.‖     (Emphasis supplied)  

28 Section 37 of the Government of India Act 1935 contained a special provision  

for Financial Bills:  

―37. Special provisions as to financial Bills.—(1) A Bill or  

amendment making provision—

PART C  

28  

(a) for imposing or increasing any tax; or  

(b) for regulating the borrowing of money or the giving of  

any guarantee by the Federal Government, or for amending  

the law with respect to any financial obligations undertaken or  

to be undertaken by the Federal Government; or  

(c) for declaring any expenditure to be expenditure  

charged on the revenues of the Federation, or for increasing  

the amount of any such expenditure, shall not be introduced  

or moved except on the recommendation of the Governor-

General, and a Bill making such provision shall not be  

introduced in the Council of State.‖  

As the Bill could not be introduced or moved ―except on the recommendation of the  

Governor General‖, Section 38 authorized each House namely the Council of States  

and the Federal Assembly to make rules for regulating their procedure and the  

conduct of business.  

During the course of the debates in the Constituent Assembly, one of the draft  

amendments moved to Article 90 was the deletion of the expression ―only‖. Explaining  

the rationale for moving the proposed amendment, Shri Ghanshyam Singh Gupta  

stated thus :   

―…This article is a prototype of Section 37 of the Government  

of India Act which says that a Bill or amendment providing for  

imposing or increasing a tax or borrowing money, etc. shall  

not be introduced or moved except on the recommendation of  

the governor-General. This means that the whole Bill need  

not be a money Bill: it may contain other provisions, but if  

there is any provision about taxation or borrowing, etc. It will  

come under this Section 37 and the recommendation of the  

Governor-General is necessary. Now article 90 says that a  

Bill shall be deemed to be a money Bill if it contains only  

provisions dealing with the imposition, regulation, etc., of any  

tax or the borrowing of money, etc. This can mean that if  

there is a Bill which has other provisions and also a provision  

about taxation or borrowing etc., it will not become a money  

Bill. If that is the intention I have nothing to say; but that if that

PART C  

29  

is not the intention I must say the word "only" is dangerous,  

because if the Bill does all these things and at the same time  

does something else also it will not be a money Bill. I do not  

know what the intention of the Drafting Committee is but I  

think this aspect of the article should be borne in mind.‖ 18

   The amendment was however negatived.  

 29 Article 110 of the Constitution defines a Money Bill for the purposes of the  

Chapter. A Bill is deemed to be a Money Bill ―if it contains only provisions‖ dealing  

with any of the matters described in clauses (a) to (g). The word ―only‖ is of crucial  

significance. The consequence of the use of the expression ―only‖ is to impart  

exclusivity. In other words, a Bill will be deemed to be a Money Bill only if it falls within  

the description of the matters enunciated in clauses (a) to (g). If the Bill contains  

matters which are unrelated to or do not fall within clauses (a) to (g), it is not a Money  

Bill. Article 110 (2) supports this construction since it indicates that a Bill shall not be  

deemed to be a Money Bill only for the reason that it provides for:  

(i) Imposition of fines or other pecuniary penalties;   

(ii) Demand or payment of fees for licences or fees for services rendered; or   

(iii) The imposition, abolition, remission, alteration or regulation of any tax by  

any local authority or body for local purposes.   

                                                 18

Constituent Assembly Debates (20 May 1949)

PART C  

30  

30 This is a clear indicator of the constitutional position that what makes a Bill a  

Money Bill for the purposes of Chapter II of Part V of the Constitution is that it deals  

only with matters falling under the description provided in clauses (a) to (g) of Article  

110 (1). Clause (g) of Article 110 (1) covers ―any matter incidental to‖ what is specified  

in clauses (a) to (f). Clause (g) must not be understood as a residuary provision or a  

catch-all-phrase encompassing all other matters which are not specified in clauses (a)  

to (f). If this construction were to be placed on clause (g), the distinction between an  

Ordinary Bill and a Money Bill would vanish. Hence, to be incidental within the  

meaning of clause (g), the Bill must cover only those matters which fall within the  

ambit of clauses (a) to (f). It is only a matter which is incidental to any of the matters  

specified in clauses (a) to (f) which is contemplated in clause (g).  

Certification by the Speaker   

31 The issue which needs analysis is whether a certification of a Bill as a Money  

Bill by the Speaker is immune from judicial review. Article 110 (3) states that if any  

question arises as to whether a Bill is a Money Bill or not, the decision of the Speaker  

of the House of the People thereon shall be final. In essence, the point for  

consideration is whether the finality as stipulated in clause (3) to Article 110 excludes  

judicial review.  

32 During the course of the framing of the Constitution, Sir B N Rau, acting as the  

Constitutional Advisor, prepared a memorandum of the draft Constitution for the Union

PART C  

31  

Constitution Committee. B Shiva Rao makes a reference to Article 75 of the draft  

which provided that :  

―if any question arises whether a Bill is a ―Money Bill‖ or not,  

the decision of the Speaker of the House of the People  

thereon shall be final.‖ 19

The draft provision bore a resemblance to Article 22 of the Constitution of Ireland  

(1937) which provides thus:  

―1.The Chairman of Dáil Éireann [Lower House in  

Ireland] shall certify any Bill which, in his opinion, is a Money  

Bill to be a Money Bill, and his certificate shall, subject to the  

subsequent provisions of this section, be final and  

conclusive.  

2. Seanad Éireann [Upper House in Ireland], by a resolution,  

passed at a sitting at which not less than thirty members are  

present, may request the President to refer the question  

whether the Bill is or is not a Money Bill to a Committee of  

Privileges.  

3. If the President after consultation with the Council of State  

decides to accede to the request he shall appoint a  

Committee of Privileges consisting of an equal number of  

members of Dáil Éireann and of Seanad Éireann and a  

Chairman who shall be a Judge of the Supreme Court: these  

appointments shall be made after consultation with the  

Council of State. In the case of an equality of votes but not  

otherwise the Chairman shall be entitled to vote.  

4. The President shall refer the question to the Committee of  

Privileges so appointed and the Committee shall report its  

decision thereon to the President within twenty-one days after  

the day on which the Bill was sent to Seanad Éireann.  

5. The decision of the Committee shall be final and  

conclusive.  

6. If the President after consultation with the Council of State  

decides not to accede to the request of Seanad Éireann, or if  

the Committee of Privileges fails to report within the time  

hereinbefore specified the certificate of the Chairman of Dáil  

Éireann shall stand confirmed.‖  

(Emphasis supplied)  

                                                 19

B. Shiva Rao, The Framing of India's Constitution: Selected Documents, Indian Institution of Public  Administration (2012), at p. 32

PART C  

32  

The Irish model contained a provision for resolving a dispute on the certification of a  

Bill as a Money Bill. This part of the dispute resolution procedure was not adopted  

when our Constitution was framed. Moreover, the clause on finality was adopted in a  

modified form. Whereas clause (1) of Article 22 of the Irish Constitution uses the  

expression ―final and conclusive‖, draft Article 75 provided for the decision of the  

Speaker of the House of People being final. On 5 December 1947, the Expert  

Committee on Financial Provisions suggested an amendment to the draft provision,  

the gist of which is indicated by B Shiva Rao :   

―When a Money Bill is sent from the Lower House to the  

Upper, a certificate of the Speaker of the Lower House saying  

that it is a Money Bill should be attached to, or endorsed on,  

the Bill and a provision to that effect should be made in the  

Constitution on the lines of the corresponding provision in the  

Parliament Act, 1911. This will prevent controversies  

about the matter outside the Lower House.‖ 20

(Emphasis supplied)  

   The extract quoted above is a clear indicator that the purpose of the certification by  

the Speaker was to prevent controversies in the Upper House of Parliament by  

incorporating an element of procedural simplicity.  

Final but not conclusive   

 33  When the draft Article as proposed was accepted and eventually incorporated  

as Article 110, clause (3) incorporated the principle of finality without a specific  

exclusion of judicial review. Section 3 of the Parliament Act 1911 in Britain specifically  

excluded judicial review by providing that a certificate of the Speaker of the House of  

Commons ―shall be conclusive for all purposes and shall not be questioned in any  

                                                 20

B. Shiva Rao, The Framing of India's Constitution: Selected Documents, Indian Institution of Public Administration, at  p. 281.

PART C  

33  

court of law‖. These words imparted both conclusiveness and immunity from judicial  

review to the certificate from the Speaker. This language was not adopted in the  

Indian Constitution. The draftspersons of the Constitution carefully did not incorporate  

an exclusion from judicial review, in respect of a certificate issued by the Speaker  

under clause (3) of Article 110. Finality, in other words, operates as between the  

Upper and the Lower Houses and does not exclude judicial review by a constitutional  

court.  

 34 The interpretation that we have adopted is supported for yet another reason. In  

contexts where the Constitution intends to confer immunity from judicial review,  

specific words to that effect are used. The expression ―shall not be called in question  

in any court‖ is, for instance, utilized in Article 329 (a), Article 243-O and Article  

243ZG. These Articles read thus:  

―329. Bar to interference by courts in electoral matters.—

Notwithstanding anything in this Constitution—  

(a) the validity of any law relating to the delimitation of  

constituencies or the allotment of seats to such  

constituencies, made or purporting to be made under Article  

327 or Article 328, shall not be called in question in any  

court.‖  

―243-O. Bar to interference by courts in electoral  

matters.—Notwithstanding anything in this Constitution—(a)  

the validity of any law relating to the delimitation of  

constituencies or the allotment of seats to such  

constituencies, made or purporting to be made under Article  

243-K, shall not be called in question in any court.‖  

―243ZG. Bar to interference by courts in electoral  

matters.—Notwithstanding anything in this Constitution—(a)  

the validity of any law relating to the delimitation of  

constituencies or the allotment of seats to such  

constituencies, made or purporting to be made under Article  

243-ZA shall not be called in question in any court.‖   

(Emphasis supplied)

PART C  

34  

In N P Ponnuswami v Returning Office, Namakkal Constituency, Namakkal,  

Salem, Dist. 21

, a six judge Bench of this Court construed Article 329 of the  

Constitution in the following terms :  

―5. … A notable difference in the language used in Articles  

327 and 328 on the one hand, and Article 329 on the other, is  

that while the first two articles begin with the words ―subject to  

the provisions of this Constitution‖, the last article begins with  

the words ―notwithstanding anything in this Constitution‖. It  

was conceded at the Bar that the effect of this difference in  

language is that whereas any law made by Parliament under  

Article 327, or by the State Legislature under Article 328,  

cannot exclude the jurisdiction of the High Court under Article  

226 of the Constitution, that jurisdiction is excluded in regard  

to matters provided for in Article 329.‖  

35 Distinct from the exclusion of judicial review by the above provisions, there are  

other provisions of the Constitution where a decision is made ―final‖. Finality in such  

contexts has been held not to exclude judicial review. Articles 217 (3), 311 (3) and  

paragraph 6 (1) of the Tenth Schedule use the expression ―final‖ :  

―217. (3) If any question arises as to the age of a Judge of a  

High Court, the question shall be decided by the President  

after consultation with the Chief Justice of India and the  

decision of the President shall be final.  

―311. (3) If, in respect of any such person as aforesaid, a  

question arises whether it is reasonably practicable to hold  

such inquiry as is referred to in clause (2), the decision  

thereon of the authority empowered to dismiss or remove  

such person or to reduce him in rank shall be final.  

―6. Decision on questions as to disqualification on ground of  

defection.—(1) If any question arises as to whether a member  

of a House has become subject to disqualification under this  

Schedule, the question shall be referred for the decision of  

the Chairman, or, as the case may be, the Speaker of such  

House and his decision shall be final:  

Provided that where the question which has arisen is as to  

whether the Chairman or the Speaker of a House has  

become subject to such disqualification, the question shall be  

                                                 21

1952 SCR 218  

PART C  

35  

referred for the decision of such member of the House as the  

House may elect in this behalf and his decision shall be  

final.‖  

(Emphasis supplied)  

In Union of India v Jyoti Prakash Mitter 22

, a six judge Bench of this Court held that  

under Article 217 (3), the President performs a judicial function and a decision  

rendered is  subject to judicial review on stipulated grounds :  

―32. … The President acting under Article 217(3) performs a  

judicial function of grave importance under the scheme of our  

Constitution. He cannot act on the advice of his Ministers.  

Notwithstanding the declared finality of the order of the  

President the Court has jurisdiction in appropriate cases to  

set aside the order, if it appears that it was passed on  

collateral considerations or the rules of natural justice were  

not observed, or that the President's judgment was coloured  

by the advice or representation made by the executive or it  

was founded on no evidence. … appreciation of evidence is  

entirely left to the President and it is not for the Courts to hold  

that on the evidence placed before the President on which the  

conclusion is founded, if they were called upon to decide the  

case they would have reached some other conclusion.‖  

36 In the context of Article 311 (3), a Constitution Bench of this Court in Union of  

India v Tulsiram Patel 23

held that the finality attributed to the decision of a  

disciplinary authority that it is not reasonably practical to hold an inquiry, does not  

render it immune from judicial review. In Kihoto Hollohan v Zachillhu 24

, a  

Constitution Bench of this Court held that the finality attributed to the decision of the  

Speaker of the Lok Sabha or the Chairman of the Rajya Sabha in paragraph 6 (1) of  

the Tenth Schedule of the Constitution does not abrogate judicial review :  

―111. … That Paragraph 6(1) of the Tenth Schedule, to the  

extent it seeks to impart finality to the decision of the  

                                                 22

(1971) 1 SCC 396  23

(1985) 3 SCC 398  24

1992 Supp. (2) SCC 651  

PART C  

36  

Speakers/Chairmen is valid. But the concept of statutory  

finality embodied in Para 6(1) does not detract from or  

abrogate judicial review under Articles 136, 226 and 227 of  

the Constitution insofar as infirmities based on violations of  

constitutional mandates, mala fides, non-compliance with  

rules of natural justice and perversity, are concerned.‖  

The Constitution Bench held:  

 ―101. … The principle that is applied by the courts is that in  

spite of a finality clause it is open to the court to examine  

whether the action of the authority under challenge is ultra  

vires the powers conferred on the said authority. Such an  

action can be ultra vires for the reason that it is in  

contravention of a mandatory provision of the law conferring  

on the authority the power to take such an action. It will also  

be ultra vires the powers conferred on the authority if it is  

vitiated by mala fides or is colourable exercise of power  

based on extraneous and irrelevant considerations….‖  

Consequently, purely as a matter of textual analysis, the finality attributed to a  

certificate issued by the Speaker under Article 110 (3) does not grant immunity from  

judicial review.   

Matters of procedure and substantive illegalities    

 37 Article 118 of the Constitution allows each of the Houses of Parliament to make  

rules for regulating their procedure and the conduct of business, subject to the  

provisions of the Constitution. Article 118 provides thus :  

―118. Rules of procedure.—  

(1) Each House of Parliament may make rules for regulating,  

subject to the provisions of this Constitution, its procedure  

and the conduct of its business.  

(2) Until rules are made under clause (1), the rules of  

procedure and standing orders in force immediately before  

the commencement of this Constitution with respect to the  

legislature of the Dominion of India shall have effect in

PART C  

37  

relation to Parliament subject to such modifications and  

adaptations as may be made therein by the Chairman of the  

Council of States or the Speaker of the House of the People,  

as the case may be.  

(3) The President, after consultation with the Chairman of the  

Council of States and the Speaker of the House of the  

People, may make rules as to the procedure with respect to  

joint sittings of, and communications between, the two  

Houses.  

(4) At a joint sitting of the two Houses the Speaker of the  

House of the People, or in his absence such person as may  

be determined by rules of procedure made under clause (3),  

shall preside.‖  

   Article 122 of the Constitution provides thus:  

 ―122. Courts not to inquire into proceedings of Parliament.—

(1) The validity of any proceedings in Parliament shall not be  

called in question on the ground of any alleged irregularity of  

procedure.  

(2) No officer or member of Parliament in whom powers are  

vested by or under this Constitution for regulating procedure  

or the conduct of business, or for maintaining order, in  

Parliament shall be subject to the jurisdiction of any court in  

respect of the exercise by him of those powers.‖  

Article 122 of the Constitution is similar to Section 41 of the Government of India Act  

1935 25

. In the Commentary on the Government of India Act 1935 by N Rajagopala  

Aiyangar 26

, there is an eloquent distinction made between matters of procedure and  

those of substance in the context of Section 41 (1):  

―This sub-section seeks to cure defects arising from  

irregularity of procedure in the Legislature. The activities  

of a chamber may be divided into internal and external,  

the internal activities being the sphere of procedure,  

while the external are subject to the law of the  

                                                 25

41. – (1) The validity of any proceedings in the Federal Legislature shall not be called in question on the ground of  any alleged irregularity of procedure.   (2) No officer or other member of the Legislature in whom powers are vested by or under this Act for regulating  procedure or the conduct of business, or for maintaining order, in the Legislature shall be subject to the jurisdiction of  any court in respect of the exercise by him of those powers.  26

N Rajagopala Aiyangar, Government of India Act 1935, Madras Law Journal Office (1937) at page 63.

PART C  

38  

constitution. It is to irregularities in the domain of the  

former class that this sub-section addresses itself. Under  

the latter head would fall defects arising from want of  

legislative competence, which is a matter external to the  

assembly and not a matter of procedure.‖    

(Emphasis supplied)  

   38 In the decision of a Constitution Bench in Babulal Parate v State of  

Bombay 27

, this Court noted the distinction between an issue which pertains to the  

validity of proceedings in Parliament and a violation of a constitutional provision.  This  

was in the context of the provisions contained in clauses (a) to (e) of Article 3. The  

Constitution Bench held:  

―11. It is advisable, perhaps, to add a few more words about  

Article 122(1) of the Constitution. Learned counsel for the  

appellant has posed before us the question as to what would  

be the effect of that Article if in any Bill completely unrelated  

to any of the matters referred to in clauses (a) to (e) of Article  

3 an amendment was to be proposed and accepted changing  

(for example) the name of a State. We do not think that we  

need answer such a hypothetical question except merely to  

say that if an amendment is of such a character that it is not  

really an amendment and is clearly violative of Article 3, the  

question then will be not the validity of proceedings in  

Parliament but the violation of a constitutional provision. That,  

however, is not the position in the present case.‖  

 39 Article 122 (1) provides immunity to proceedings before Parliament being called  

into question on the ground of ―any alleged irregularities of procedure‖. In several  

decisions of this Court which construed the provisions of Article 122 and the  

corresponding provisions contained in Article 212 for the state legislatures, a  

distinction has been drawn between an irregularity of procedure and an illegality.  

Immunity from judicial review attaches to the former but not to the latter. This  

                                                 27

(1960) 1 SCR 605

PART C  

39  

distinction found expression in a seven judge Bench decision of this Court in Special  

Reference No. 1 of 1964 28

(―Special Reference‖). This Court held :  

―61. … Article 212(2) confers immunity on the officers and  

members of the legislature in whom powers are vested by or  

under the Constitution for regulating procedure or the conduct  

of business, or for maintaining order, in the legislature from  

being subject to the jurisdiction of any court in respect of the  

exercise by him of those powers. Article 212(1) seems to  

make it possible for a citizen to call in question in the  

appropriate Court of law the validity of any proceedings inside  

the Legislative Chamber if his case is that the said  

proceedings suffer not from mere irregularity of procedure,  

but from an illegality. If the impugned procedure is illegal  

and unconstitutional, it would be open to be scrutinised  

in a Court of law, though such scrutiny is prohibited if  

the complaint against the procedure is no more than this  

that the procedure was irregular...‖   

                                                                 (Emphasis supplied)  

This formulation was applied in the context of Article 122 by the Constitution Bench in  

Ramdas Athawale v Union of India 29

(―Ramdas Athawale‖):  

―36. This Court under Article 143, Constitution of India In re  

(Special Reference No. 1 of 1964) [Powers, Privileges and  

Immunities of State Legislatures, In re (Special Reference No.  

1 of 1964), AIR 1965 SC 745] (also known as Keshav Singh  

case) while construing Article 212(1) observed that it may be  

possible for a citizen to call in question in the appropriate  

court of law, the validity of any proceedings inside the  

legislature if his case is that the said proceedings suffer not  

from mere irregularity of procedure, but from an illegality. If  

the impugned procedure is illegal and unconstitutional, it  

would be open to be scrutinised in a court of law, though such  

scrutiny is prohibited if the complaint against the procedure is  

no more than this that the procedure was irregular. The same  

principle would equally be applicable in the matter of  

interpretation of Article 122 of the Constitution.‖  

                                                 28

Powers, Privileges and Immunities of State Legislatures, In re (Special Reference No. 1 of 1964), AIR 1965 SC 745  29

(2010) 4 SCC 1

PART C  

40  

A subsequent Constitution Bench decision in Raja Ram Pal v Hon‟ble Speaker, Lok  

Sabha 30

emphasized the distinction between a procedural irregularity and an illegality:  

―386. … Any attempt to read a limitation into Article 122 so as  

to restrict the court's jurisdiction to examination of the  

Parliament's procedure in case of unconstitutionality, as  

opposed to illegality would amount to doing violence to the  

constitutional text. Applying the principle of ―expressio unius  

est exclusio alterius‖ (whatever has not been included has by  

implication been excluded), it is plain and clear that  

prohibition against examination on the touchstone of  

“irregularity of procedure” does not make taboo judicial  

review on findings of illegality or unconstitutionality.  

***  

398. … the court will decline to interfere if the grievance  

brought before it is restricted to allegations of ―irregularity of  

procedure‖. But in case gross illegality or violation of  

constitutional provisions is shown, the judicial review  

will not be inhibited in any manner by Article 122, or for  

that matter by Article 105…‖  

                                                                 (Emphasis supplied)  

40 The fundamental constitutional basis for the distinction between an irregularity  

of procedure and an illegality is that unlike in the United Kingdom where  

Parliamentary sovereignty governs, India is governed by constitutional supremacy.  

The legislative, executive and judicial wings function under the mandate of a written  

Constitution. The ambit of their powers is defined by the Constitution. The Constitution  

structures the powers of Parliament and the state legislatures. Their authority is  

plenary within the field reserved to them. Judicial review is part of the basic structure  

of the Constitution. Any exclusion of judicial review has to be understood in the  

context in which it has been mandated under a specific provision of the Constitution.  

Hence the provisions contained in Article 122 which protect an alleged irregularity of  

                                                 30

(2007) 3 SCC 184

PART C  

41  

procedure in the proceedings in Parliament being questioned cannot extend to a  

substantive illegality or a violation of a constitutional mandate.   

 41 Mr K K Venugopal, learned Attorney General for India relied on three decisions  

in support of his submission that the certificate issued by the Speaker of the Lok  

Sabha that a Bill is a Money Bill is immune from judicial review :  

(I) Mangalore Ganesh Beedi Works v State of Mysore 31

(―Mangalore  

Beedi‖);  

(II) Mohd. Saeed Siddiqui v State of Uttar Pradesh 32

(―Mohd. Saeed  

Siddiqui‖); and   

(III) Yogendra Kumar Jaiswal v State of Bihar 33

(―Yogendra Kumar‖).   

   Mangalore Beedi was a case where a new system of coinage had introduced a naya  

paisa (one hundred naya paisas being equivalent to a rupee) instead of the erstwhile  

legal tender of sixteen annas or sixty-four pice, which continued to remain legal  

tender. The appellant which was subjected to an additional amount as sales tax due  

to the change in currency urged that as a result of the substitution of the coinage,  

there was a change in tax imposed under the Mysore Sales Tax Act 1948 which could  

have been effectuated only by passing a Money Bill under Articles 198, 199 and 207  

of the Constitution. Rejecting this submission, the Constitution Bench held that the  

substitution of a new coinage did not amount to an enhancement of tax.  

                                                 31

AIR 1963 SC 589  32

(2014) 11 SCC 415  33

(2016) 3 SCC 183

PART C  

42  

Consequently, there was no requirement of taking recourse to the provisions for  

enacting a Money Bill. However, Justice J L Kapur, speaking for the Court held:  

―5. … Even assuming that it is a taxing measure its validity  

cannot be challenged on the ground that it offends Articles  

197 to 199 and the procedure laid down in Article 202 of the  

Constitution. Article 212 prohibits the validity of any  

proceedings in a legislature of a State from being called in  

question on the ground of any alleged irregularity of  

procedure and Article 255 lays down that requirements as to  

recommendation and previous sanction are to be regarded as  

matters of procedure only.‖  

42 The ratio of the decision in Mangalore Beedi is that the substitution of coinage  

did not amount to an enhancement of tax. Hence, the provisions of Article 199  

pertaining to a Money Bill were not attracted. Once that was the finding, it was not  

necessary for the decision to rule on whether the certificate of a Speaker under Article  

199 (3) (corresponding to Article 110 (3)) is immune from judicial review. The ratio of  

the decision is that a new coinage does not amount to an enhancement of tax and  

hence a Bill providing for the substitution of coinage is not a Money Bill. The  

observations which are extracted above proceed on an assumption, namely that even  

assuming that it was a taxing measure, its validity could not be challenged on the  

ground of an alleged irregularity of procedure. This part of the observations is  

evidently not the ratio of Mangalore Beedi.  

   43 Subsequently in Mohd. Saeed Siddiqui, a three judge Bench of this Court  

dealt with an amendment brought about by the state legislature to a statute governing  

the Lokayukta and Up-Lokayukta so as to provide for an extension of the term from  

six years to eight years or until the successor enters office. The amendment was

PART C  

43  

challenged on the ground that the Bill could not have been introduced as a Money Bill.  

Relying on the decision in Mangalore Beedi, a three judge Bench held that the issue  

as to whether a Bill was a Money Bill could only be raised by a Member before the  

legislative assembly before it was passed. Chief Justice P Sathasivam, speaking for  

the Bench formulated the following principles:  

―(i) the validity of an Act cannot be challenged on the ground  

that it offends Articles 197 to 199 and the procedure laid  

down in Article 202;  

(ii) Article 212 prohibits the validity of any proceedings in a  

legislature of a State from being called in question on the  

ground of any alleged irregularity of procedure; and  

(iii) Article 255 lays down that the requirements as to  

recommendation and previous sanction are to be regarded as  

a matter of procedure only.  

It is further held that the validity of the proceedings inside the  

legislature of a State cannot be called in question on the  

allegation that the procedure laid down by the law has not  

been strictly followed and that no court can go into those  

questions which are within the special jurisdiction of the  

legislature itself, which has the power to conduct its own  

business.‖  

 The decision adverted to Article 212 (1) (which corresponds to Article 122(1)) and to  

Article 255 34

of the Constitution. While the decision also adverted to Raja Ram Pal,  

this Court held that any infirmity of procedure was protected by Article 255.  

   44 The subsequent decision of a two judge Bench of this Court in Yogendra  

Kumar dealt with the constitutional validity of the Orissa Special Courts Act 2006,  

enacted to provide special courts for offences involving the accumulation of properties  

                                                 34

Article  255 :  No Act of Parliament or of the Legislature of a State  and no provision in any such Act, shall be invalid  by reason only that some recommendation or previous sanction required by this Constitution was not given, if assent to  that Act was given—  (a) where the recommendation required was that of the Governor, either by the Governor or by the President;  (b) where the recommendation required was that of the Rajpramukh, either by the Rajpramukh or by the President;  (c) where the recommendation or previous sanction required was that of the President, by the President.

PART C  

44  

disproportionate to their known-sources of income by persons who have held or hold  

high political and public offices. Repelling the challenge that the law could not have  

been introduced as a Money Bill in the legislative assembly, this Court, speaking  

through Justice Dipak Misra (as the than was) held thus:  

―43. In our considered opinion, the authorities cited by the  

learned counsel for the appellants do not render much  

assistance, for the introduction of a Bill, as has been held  

in Mohd. Saeed Siddiqui [Mohd. Saeed Siddiqui v. State of  

U.P., (2014) 11 SCC 415] , comes within the concept of  

―irregularity‖ and it does come with the realm of substantiality.  

What has been held in Special Reference No. 1 of  

1964 [Powers, Privileges and Immunities of State  

Legislatures, In re (Special Reference No. 1 of 1964), AIR  

1965 SC 745] has to be appositely understood. The factual  

matrix therein was totally different than the case at hand as  

we find that the present controversy is wholly covered by the  

pronouncement in Mohd. Saeed Siddiqui and hence, we  

unhesitatingly hold that there is no merit in the submission so  

assiduously urged by the learned counsel for the appellants.‖  

45 The three judge Bench decision in Mohd Saeed Siddiqui relied on Mangalore  

Beedi as laying down the principle that a certificate of the Speaker that a Bill is a  

Money Bill is immune from judicial review. The decision in Mangalore Beedi, as we  

have seen, was based on a finding by the Constitution Bench that the substitution of a  

new coinage did not constitute an enhancement of tax and hence did not attract the  

requirements of a Money Bill. But the three judge Bench decision in Mohd. Saeed  

Siddiqui also adverts to the provisions of the Article 255 in attributing immunity to the  

certificate of the Speaker that a Bill is a Money Bill. Now Article 255 applies in a  

situation where ―some recommendation or previous sanction‖ required by the  

Constitution was not given though the Act of Parliament or the legislature of state has  

since received assent. Thus, where the recommendation required is that of the

PART D  

45  

Governor, the assent of the President or of the Governor and where the  

recommendation or previous sanction required is that of the President, the assent by  

the President will protect the legislation being called into question. The subsequent  

assent to the law cures the absence of a recommendation, or as the case may be,  

sanction. Article 255 does not deal with the certificate of the Speaker under Article  

110 (3) or Article 199 (3), which is neither a recommendation nor a previous sanction  

within the meaning of Article 255.  

46 Mohd Saeed Siddiqui proceeds on an incorrect construction of the decision in  

Mangalore Beedi and on an erroneous understanding of Article 255. The decision in  

Pandit MSM Sharma v Dr Shree Krishna Sinha 35

 which was adverted to in Mohd  

Syed Siddiqui was discussed in the Special Reference to hold that the validity of the  

proceedings in a legislative chamber can be questioned on the ground of illegality.  

The decisions in the Special Reference, Ramdas Athawale  and Raja Ram Pal  

clearly hold that the validity of the proceedings before Parliament or a state legislature  

can be subject to judicial review on the ground of an illegality (as distinguished from  

an irregularity of procedure) or a constitutional violation. Hence, the decisions in  

Mohd Syed Siddiqui and Yogendra Kumar on the above aspect do not lay down the  

correct position in law and are overruled.                      

D Puttaswamy: Judicial review of the certificate of the Speaker  

47 The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and  

Services) Bill 2016 was certified as a Money Bill under Article 110 by the Speaker of  

                                                 35

AIR 1960  SC 1186

PART D  

46  

the Lok Sabha. The exclusion of the Rajya Sabha from the legislative process  

consequent upon the certification by the Speaker under Article 110(3) was one of the  

specific challenges addressed before the Constitution Bench (K S Puttaswamy v  

Union of India). 36

Justice A K Sikri, speaking for three of the five judges of the  

Constitution Bench, analysed the provisions of the Aadhaar Act 2016 on the basis of  

two fundamental precepts: first, the importance of the Rajya Sabha in a bicameral  

legislature as ―succinctly exemplified‖ 37

by the decision in Kuldip Nayar v Union of  

India 38

(―Kuldip Nayar‖) and second, the Rajya Sabha as an ―important institution  

signifying the constitutional federalism‖ 39

.   

   48 Having enunciated these principles, Justice Sikri emphasised the need for the  

passage of a Bill by both the Houses of Parliament which, according to the learned  

Judge, is a ―constitutional mandate‖ 40

.  The only exception, the majority observed, is  

contained in Article 110. As a result, Article 110 being an exception to the scheme of  

bicameralism had to be given a ―strict construction‖ 41

. The majority held thus:  

 ―463. The Rajya Sabha, therefore, becomes an important  

institution signifying constitutional federalism. It is precisely  

for this reason that to enact any statute, the Bill has to be  

passed by both the Houses, namely, Lok Sabha as well as  

Rajya Sabha. It is the constitutional mandate. The only  

exception to the aforesaid Parliamentary norm is Article 110  

of the Constitution of India. Having regard to this overall  

scheme of bicameralism enshrined in our Constitution, strict  

interpretation has to be accorded to Article 110. Keeping in  

view these principles, we have considered the arguments  

advanced by both the sides.‖  

                                                 36

(2019) 1 SCC 1 (―Puttaswamy‖)  37

Puttaswamy at para 462   38

(2006) 7 SCC 1  39

Puttaswamy at para 463  40

Puttaswamy at para 463  41

Puttaswamy at para 463

PART D  

47  

The above extract clearly indicates that the arguments were considered on the  

touchstone of the requirement that for a Bill to be a Money Bill, strict adherence to the  

provisions of Article 110 is necessary.  

 49 On the issue of justiciability

42  Justice Sikri rejected specifically the submissions  

urged on behalf of the Union of India that the certification of the Speaker was not  

subject to judicial review. The majority held:  

―464. We would also like to observe at this stage that insofar  

as submission of the respondents about the justiciability of  

the decision of the Speaker of the Lok Sabha is concerned,  

we are unable to subscribe to such a contention. Judicial  

review would be admissible under certain circumstances  

having regard to the law laid down by this Court in various  

judgments which have been cited by Mr P. Chidambaram,  

learned senior counsel appearing for the petitioners, and  

taken note of in paragraph 455.‖  

   The decisions which were adverted to in para 455 referred to in the above extract are:  

―455.1.Sub-Committee on Judicial Accountability v. Union of  

India (1991) 4 SCC 699].  

455.2.S.R. Bommai v. Union of India, (1994) 3 SCC 1] .  

455.3.Raja Ram Pal v. Lok Sabha (Supra)  

455.4.Ramdas Athawale (5) v. Union of India (Supra)  

455.5.Kihoto Hollohan v. Zachillhu (Supra).‖   

The majority then proceeded to analyse whether the provisions contained in the Act  

could validly pass muster under Article 110.  In the view of the majority, Section 7  

which makes the receipt of a subsidy, benefit or service conditional on the identity of  

the recipient being established by the process of authentication under Aadhaar was  

referable to Article 110 since these financial benefits were ―extended with the support  

                                                 42

Puttaswamy at para 455

PART D  

48  

of the Consolidated Fund of India‖ 43

.  The provisions of Section 23(2)(h) and Section  

54 were held to be incidental to the main provision and covered by Article 110(g).  

Section 57, which permitted the use of Aadhaar by private entities for other purposes,  

was held to be unconstitutional. Having thus analysed the provisions of the Bill, the  

majority held:  

―472. For all the aforesaid reasons, we are of the opinion  

that Bill was rightly introduced as Money Bill. Accordingly, it  

is not necessary for us to deal with other contentions of  

the petitioners, namely, whether certification by the  

Speaker about the Bill being Money Bill is subject to  

judicial review or not, whether a provision which does not  

relate to Money Bill is severable or not. We reiterate that  

main provision is a part of Money Bill and other are only  

incidental and, therefore, covered by clause (g) of Article 110  

of the Constitution.‖   

(Emphasis supplied).  

50 Both Mr Arvind Datar, learned amicus curiae and the learned Attorney General  

for India have highlighted the apparent inconsistency among the observations  

contained in paragraphs 463, 464 and 472 of the judgment.  For, paragraph 464  

rejects the submissions of the Union of India that the Speaker‘s decision is not  

justiciable in the aftermath of the earlier discussion that Article 110 must receive a  

strict construction, while para 472 holds that it was not necessary for the majority to  

deal with whether certification by the Speaker  of a Bill as a Money Bill is subject to  

judicial review.  However, in the course of the conclusion in paragraph 515, the issue  

to which answers were framed was:  

―515.(6). Whether the Aadhaar Act could be passed as  

―Money Bill‖ within the meaning of Article 110 of the  

Constitution?‖  

                                                 43

Puttaswamy at para 466

PART D  

49  

The answer in paragraph 515.1 is in the following terms:  

―515.1. We do recognise the importance of Rajya Sabha  

(Upper House) in a bicameral system of the Parliament. The  

significance and relevance of the Upper House has been  

succinctly exemplified by this Court in Kuldip Nayar‘s  

case [Kuldip Nayar v. Union of India, (2006) 7 SCC 1]. The  

Rajya Sabha, therefore, becomes an important institution  

signifying constitutional federalism. It is precisely for this  

reason that to enact any statute, the Bill has to be passed by  

both the Houses, namely, Lok Sabha as well as Rajya Sabha.  

It is the constitutional mandate. The only exception to the  

aforesaid Parliamentary norm is Article 110 of the  

Constitution of India. Having regard to this overall scheme of  

bicameralism enshrined in our Constitution, strict  

interpretation has to be accorded to Article 110. Keeping in  

view these principles, we have considered the arguments  

advanced by both the sides.‖  

51 On merits, Section 7 was held to be a core provision, satisfying the conditions  

of Article 110 while the others were held to be incidental in nature.  Section 57 had  

been held to be unconstitutional.  Hence the conclusion was in the following terms:  

―467…Section 7 is the core provision of the Aadhaar Act and  

this provision satisfies the conditions of Article 110 of the  

Constitution. Upto this stage, there is no quarrel between the  

parties.  

515.5. On examining of the other provisions pointed out by  

the petitioners in an attempt to take it out of the purview of  

Money Bill, we are of the view that those provisions are  

incidental in nature which have been made in the proper  

working of the Act. In any case, a part of Section 57 has  

already been declared unconstitutional. We, thus, hold that  

the Aadhaar Act is validly passed as a ‗Money Bill‘.  

52 A holistic reading of the decision of the majority would indicate that: (i) Article  

110 has been construed to be an exception to the principle of bicameralism and,  

therefore, the provision must (it has been held) receive strict interpretation; (ii) Section  

7 constituted the core provision of the Aadhaar Bill which was referable to Article 110

PART D  

50  

while the other provisions were incidental; and (iii) Section 57 was  held to be  

unconstitutional in so far as it allowed the use of the Aadhaar platform by private  

entities including corporate bodies. The observations in para 472 cannot, therefore, be  

construed to mean that the majority desisted from expressing a final view on  

justiciability.  

53 The judgment of Justice DY Chandrachud specifically holds that the decision of  

the Speaker to certify a Bill as a Money Bill is not immune from judicial review.  After  

tracing the constitutional history of Article 110 including the provisions of the  

Parliament Act 1911 in Britain and Section 37 of the Government of India Act 1935,  

the judgment places reliance on the construction placed on the provisions of Article  

122 and the corresponding provision in Article 212 in (i) Special Reference; (ii)  

Ramdas Athawale ; and (iii) Raja Ram Pal. In coming to the conclusion that the  

decision of the Speaker is amenable to judicial review if it suffers from illegality or from  

a violation of constitutional provisions, the decisions in Mohd Saeed Siddiqui and  

Yogendra Kumar Jaiswal were disapproved. Distinguishing the principle of  

Parliamentary sovereignty in the UK from the position of constitutional supremacy in  

India, the decision observes:  

―1067. The purpose of judicial review is to ensure that  

constitutional principles prevail in interpretation and  

governance. Institutions created by the Constitution are  

subject to its norms. No constitutional institution wields  

absolute power. No immunity has been attached to the  

certificate of the Speaker of the Lok Sabha from judicial  

review, for this reason. The Constitution makers have  

envisaged a role for the judiciary as the expounder of the  

Constitution. The provisions relating to the judiciary,  

particularly those regarding the power of judicial review, were  

framed, as Granville Austin observed, with ―idealism‖  

[Granville Austin, The Indian Constitution: Cornerstone of a

PART D  

51  

Nation, Oxford University Press (1966), at p. 205.]  Courts of  

the country are expected to function as guardians of the  

Constitution and its values. Constitutional courts have been  

entrusted with the duty to scrutinise the exercise of power by  

public functionaries under the Constitution. No individual  

holding an institutional office created by the Constitution can  

act contrary to constitutional parameters. Judicial review  

protects the principles and the spirit of the Constitution.  

Judicial review is intended as a check against arbitrary  

conduct of individuals holding constitutional posts. It holds  

public functionaries accountable to constitutional duties. If our  

Constitution has to survive the vicissitudes of political  

aggrandisement and to face up to the prevailing cynicism  

about all constitutional institutions, notions of power and  

authority must give way to duties and compliance with the  

rule of law. Constitutional institutions cannot be seen as focal  

points for the accumulation of power and privilege. They are  

held in trust by all those who occupy them for the moment.  

The impermanence of power is a sombre reflection for those  

who occupy constitutional offices. The Constitution does not  

contemplate a debasement of the institutions which it creates.  

The office of the Speaker of the House of People, can be no  

exception. The decision of the Speaker of the Lok Sabha in  

certifying a Bill as a Money Bill is liable to be tested upon the  

touchstone of its compliance with constitutional principles.  

Nor can such a decision of the Speaker take leave of  

constitutional morality.‖  

54 Justice Ashok Bhushan, in his separate opinion, specifically held that the  

decision of the Speaker in certifying a Bill as a Money Bill is capable of judicial review.  

The learned judge held thus:  

―901. We have noticed the Constitution Bench judgments  in Kihoto Hollohan [Kihoto Hollohan v. Zachillhu, 1992 Supp  (2) SCC 651] and Raja Ram Pal [Raja Ram Pal v. Lok Sabha,  (2007) 3 SCC 184] that finality of the decision of the Speaker  is not immuned from Judicial Review. All Bills are required to  be passed by both Houses of Parliament. Exception is given  in case of Money Bills and in the case of joint sitting of both  Houses. In event, we accept the submission of learned  Attorney General that certification by Speaker is only a matter  of procedure and cannot be questioned by virtue of Article  122(1), any Bill, which does not fulfil the essential  constitutional condition under Article 110 can be certified as  Money Bill by-passing the Upper House. There is a clear  difference between the subject “irregularity of  procedure” and “substantive illegality”. When a Bill does  not fulfil the essential constitutional condition under

PART D  

52  

Article 110(1), the said requirement cannot be said to be  evaporated only on certification by Speaker. Accepting  the submission that certification immunes the challenge  on the ground of not fulfilling the constitutional  condition, Court will be permitting constitutional  provisions to be ignored and by-passed. We, thus, are of  the view that decision of the Speaker certifying the Bill as  Money Bill is not only a matter of procedure and in event,  any illegality has occurred in the decision and the  decision is clearly in breach of the constitutional  provisions, the decision is subject to Judicial Review. We  are, therefore, of the view that the Three Judge Bench  judgment of this Court in Mohd. Saeed Siddiqui [Mohd. Saeed  Siddiqui v. State of U.P., (2014) 11 SCC 415] and Two Judge  Bench judgment of this Court in Yogendra Kumar  Jaiswal [Yogendra Kumar Jaiswal v. State of Bihar, (2016) 3  SCC 183 : (2016) 2 SCC (Cri) 1] do not lay down the correct  law. We, thus, conclude that the decision of the Speaker  certifying the Aadhaar Bill as Money Bill is not immuned from  Judicial Review.‖  

(Emphasis supplied)

Justice Ashok Bhushan then held on merits that the Bill had been correctly passed as  

a Money Bill.  

55 From the above analysis, it is evident that the judgments of both Justice D Y  

Chandrachud and Justice Ashok Bhushan categorically held that the decision of the  

Speaker to certify a Bill as a Money Bill is not immune from judicial review. There is a  

clear distinction between an irregularity of procedure under Article 122(1) and a  

substantive illegality. The certificate of the Speaker under Article 110(3) is not  

conclusive in so far as judicial review is concerned. Judicial review can determine  

whether the conditions requisite for a Bill to be validly passed as a Money Bill were  

fulfilled. The point of difference between the majority (represented by the decisions of  

Justice Sikri and Justice Ashok Bhushan) and Justice Chandrachud was that on  

merits, the majority came to the conclusion that the Aadhaar Bill is a Money Bill within  

the meaning of Article 110(1) while the dissent held otherwise.

PART E  

53  

56 On an overall reading of the judgment of Justice Sikri, it is not possible to  

accede to the submission of the learned Attorney General that the issue of the  

reviewability of the certificate of the Speaker is left at large by the decision of the  

majority.  In any event, in view of the issue having arisen in the present case, we have  

dealt with the aspect of judicial review independently of the decision in Puttaswamy.  

E Role of the Rajya Sabha  

57 The Rajya Sabha consists of not more than two hundred and fifty members,  

twelve nominated by the President (from persons with special knowledge or practical  

experience in literature, science, art and social service) and not more than two  

hundred and thirty eight representatives of the States and Union Territories 44

. The  

Fourth Schedule specifies the manner in which allocation of seats is made in the  

Rajya Sabha.  The elected members of the legislative assembly of every state elect  

the representatives of the state in the Rajya Sabha in accordance with ―the system of  

proportional representation by means of the single transferable vote‖.  Representation  

of the Union Territories is provided by a law enacted by Parliament.  

                                                 44

80 (1) The Council of States] shall consist of—   (a) twelve members to be nominated by the President in accordance with the provisions of clause (3); and   (b) not more than two hundred and thirty-eight representatives of the States 3[and of the Union territories.]   (2) The allocation of seats in the Council of States to be filled by representatives of the States and of the Union  territories] shall be in accordance with the provisions in that behalf contained in the Fourth Schedule.   (3) The members to be nominated by the President under sub-clause (a) of clause (1) shall consist of persons having  special knowledge or practical experience in respect of such matters as the following, namely:-  Literature, science, art and social service.   (4) The representatives of each State in the Council of States shall be elected by the elected members of the  Legislative Assembly of the State in accordance with the system of proportional representation by means of the single  transferable vote.   (5) The representatives of the [Union territories] in the Council of States shall be chosen in such manner as Parliament  may by law prescribe.

PART E  

54  

58 The Rajya Sabha, unlike the Lok Sabha, is not subject to dissolution but one-

third of its members retire by rotation 45

.  The Lok Sabha, unless sooner dissolved, has  

a life span of five years. In contrast, the Constitution envisages that the Rajya Sabha  

is an institution possessed of constitutional continuity with a third of its members  

retiring by rotation at stipulated intervals. In line with the principle of constitutional  

continuity, Article 107(4) stipulates that a Bill which is pending in the Rajya Sabha  

which has not been passed by the Lok Sabha shall not lapse on the dissolution of the  

Lok Sabha. On the other hand, under Clause (5), a Bill which is pending in the Lok  

Sabha or upon being passed by the Lok Sabha is pending in the Rajya Sabha, shall  

lapse on a dissolution of the Lok Sabha, subject to Article 108 46

. The role of the Rajya  

Sabha in respect of Money Bills has, however, been substantially curtailed. Money  

Bills can originate only in the Lok Sabha. Moreover, the Rajya Sabha has only a  

recommendatory power, as noticed earlier, in regard to Money Bills.  

Bicameralism   

59 Bicameralism emerged in 14 th  century Britain. The House of Lords represented  

a chamber where a debate took place with feudal lords, while the House of Commons  

was where citizens were represented. The House of Lords comprised of hereditary  

peers while the House of Commons in their historical origin comprised of persons  

possessed of property as required.  Across the Atlantic, the Constitution of the United  

                                                 45

83. (1) The Council of States shall not be subject to dissolution, but as nearly as possible one-third of the members  thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in  that behalf by Parliament by law.  (2) The House of the People, unless sooner dissolved, shall continue for 1[five years] from the date appointed for its  first meeting and no longer and the expiration of the said period of 1[five years] shall operate as a dissolution of the  House:   Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by  law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the  Proclamation has ceased to operate.  46

Article 108 contains provisions for a joint sitting of two Houses of Parliament.

PART E  

55  

States adopted bicameralism. The Constitutional Convention of 1787 represented a  

constitutional compromise where the House of Representatives comprised of directly  

elected legislatures, each voter possessed of an equal vote in the elections and the  

Senate, where each state could send two members elected indirectly.  In the  

Federalist Papers, James Madison underscored the importance of the Senate as an  

indirectly elected Upper House of a bicameral legislature:  

―First … a senate, as a second branch of the legislative  

assembly, distinct from, and dividing the power with, a first,  

must be in all cases a salutary check on the government. It  

doubles the security to the people, by requiring the  

concurrence of two distinct bodies in schemes of usurpation  

or perfidy, where the ambition or corruption of one would  

otherwise be sufficient. …  

Second: The necessity of a senate is not less indicated by the  

propensity of all single and numerous assemblies to yield to  

the impulse of sudden and violent passions, and to be  

seduced by factious leaders into intemperate and pernicious  

resolutions. …  

Third: Another defect to be supplied by a senate lies in a want  

of due acquaintance with the objects and principles of  

legislation. It is not possible that an assembly of men called  

for the most part from pursuits of a private nature, continued  

in appointment for a short time, and led by no permanent  

motive to devote the intervals of public occupation to a study  

of the laws, the affairs, and the comprehensive interests of  

their country, should, if left wholly to themselves, escape a  

variety of important errors in the exercise of their legislative  

trust. …   

A good government implies two things: first, fidelity to the  

object of government, which is the happiness of the people;  

secondly, a knowledge of the means by which that object can  

be best attained. …  

Fourth: The mutability in the public councils arising from a  

rapid succession of new members, however qualified they  

may be, points out, in the strongest manner, the necessity of  

some stable institution in the government.‖   

PART E  

56  

60 Madison conceived of the Senate as a body which imposes a salutary check on  

government. To Madison, the requirement of concurrence of two legislative bodies  

ensured against usurpation of public power. The Senate was conceived of as a body  

capable of calm deliberation, isolated from the governing passions of the day. As a  

sobering voice, the Senate, it was conceived would reflect an expertise in framing  

legislation. It was an institution which symbolises stability in constitutional governance.  

HM Seervai in his classical text, Constitutional Law of India 47

emphasises the  

position of the Rajya Sabha as a critical ingredient in the federal structure:  

―First and foremost, Parliament (the Central Legislature) is  

dependent upon the States, because one of its Houses, the  

Council of States, is elected by the Legislative Assemblies of  

the States. Where the ruling party, or group of parties, in the  

House of the People has a majority but not an overwhelming  

majority, the Council of States can have a very important  

voice in the passage of legislation other than financial Bills.  

Secondly, a Bill to amend the Constitution requires to be  

passed by each House of Parliament separately by an  

absolute majority in that House and by not less than two-

thirds of those present and voting. Since the Council of States  

is indirectly elected by the State Legislatures, the State  

Legislatures have an important say in the amendment of the  

Constitution because of the requirement of special majorities  

in each House. Thirdly, the very important matters mentioned  

in the proviso to Article 368 (Amendment of the Constitution)  

cannot be amended unless the amendments passed by  

Parliament are ratified by not less than half the number of  

Legislatures of the States … Fourthly, the amendment of  

Article 352 by the 44th Amendment gives the Council of  

States a most important voice in the declaration of  

Emergency, because a proclamation of emergency must be  

approved by each House separately by majorities required for  

an amendment of the Constitution … Fifthly, the executive  

power of the Union is vested in the President of India who is  

not directly elected by the people but is elected by an  

electoral college consisting of (a) the elected Members of the  

Legislative Assemblies of the States, and (b) the elected  

members of both Houses of Parliament … Directly the State  

Legislatures have substantial voting power in electing the  

                                                 47

HM Seervai, Constitutional Law of India, Universal Law Co Pvt Ltd, Vol I, (1991), at pp.299-300

PART E  

57  

President; that power is increased indirectly through the  

Council of States, which is elected by the Legislative  

Assemblies of States.‖   

61 The Rajya Sabha Secretariat has, in its publication titled ―Second Chamber in  

Indian Parliament: Role and Studies of Rajya Sabha‖, emphasised the position of the  

Rajya Sabha as an institution sensitive to the aspirations of the states, contributing in  

that capacity to strengthening the federal structure of the nation. The publication  

emphasises some of the special powers possessed by the Rajya Sabha:  

―(i) Article 249 of the Constitution provides that Rajya Sabha  

may pass a resolution, by a majority of not less than two-

thirds of the Members present and voting to the effect that it is  

necessary or expedient in the national interest that Parliament  

should make a law with respect to any matter enumerated in  

the State List. Then, Parliament is empowered to make a law  

on the subject specified in the resolution for the whole or any  

part of the territory of India. Such a resolution remains in force  

for a maximum period of one year but this period can be  

extended by one year at a time by passing a further  

resolution;  

(ii) Under Article 312 of the Constitution, if Rajya Sabha  

passes a resolution by a majority of not less than two-thirds of  

the Members present and voting declaring that it is necessary  

or expedient in the national interest to create one or more All  

India Services common to the Union and the States,  

Parliament has the power to create by law such services; and  

(iii) Under the Constitution, the President is empowered to  

issue Proclamations in the event of national emergency  

(Article 352), in the event of failure of constitutional machinery  

in a State (Article 356), or in the case of financial emergency  

(Article 360). Normally, every such Proclamation has to be  

approved by both Houses of Parliament within a stipulated  

period. Under certain circumstances, however, Rajya Sabha  

enjoys special powers in this regard. If a Proclamation is  

issued at a time when the dissolution of the Lok Sabha takes  

place within the period allowed for its approval, then the  

Proclamation can remain effective if a resolution approving it,  

is passed by Rajya Sabha.‖  

PART E  

58  

62 In Kuldip Nayar, Chief Justice Y K Sabharwal speaking for the Constitution  

Bench emphasised the role of the Rajya Sabha in the following observations:  

―47. The Rajya Sabha is a forum to which experienced public  

figures get access without going through the din and bustle of  

a general election which is inevitable in the case of the Lok  

Sabha. It acts as a revising chamber over the Lok Sabha. The  

existence of two debating chambers means that all proposals  

and programmes of the Government are discussed twice. As  

a revising chamber, the Rajya Sabha helps in improving Bills  

passed by the Lok Sabha.‖  

The significance of the role of the Rajya Sabha was also emphasised by Justice A K  

Sikri (writing on behalf of himself and two other judges) in Puttaswamy.  

Complementing those observations, the judgment of Justice DY Chandrachud places  

the position of the Rajya Sabha, in the context of federalism being a part of the basic  

features of the Constitution:  

―1106. The institutional structure of the Rajya Sabha has  

been developed to reflect the pluralism of the nation and its  

diversity of language, culture, perception and interest. The  

Rajya Sabha was envisaged by the makers of the  

Constitution to ensure a wider scrutiny of legislative  

proposals. As a second chamber of Parliament, it acts as a  

check on hasty and ill-conceived legislation, providing an  

opportunity for scrutiny of legislative business. The role of the  

Rajya Sabha is intrinsic to ensuring executive accountability  

and to preserving a balance of power. The Upper Chamber  

complements the working of the Lower Chamber in many  

ways. The Rajya Sabha acts as an institution of balance in  

relation to the Lok Sabha and represents the federal structure  

[ In S.R. Bommai v. Union of India, (1994) 3 SCC 1 : AIR  

1994 SC 1998] of India. Both the existence and the role of the  

Rajya Sabha constitute a part of the basic structure of the  

Constitution. The architecture of our Constitution envisions  

the Rajya Sabha as an institution of federa bicameralism and  

not just as a part of a simple bicameral legislature. Its  

nomenclature as the ―Council of States‖ rather than the  

―Senate‖ appropriately justifies its federal importance.‖  

PART E  

59  

63 Bicameral legislatures have a significant constitutional role particularly in the  

context of federal structures. The Rajya Sabha, as our Constitution emphasises,  

represents the aspirations of the states and is hence a critical element in the  

constitutional design of the federal structure. The Rajya Sabha is an institution  

possessed of constitutional continuity.  The body is not dissolved like the House of the  

People and its members retire by rotation. The exclusion of the Rajya Sabha has  

been contemplated in the context of Money Bills. However, this is an exception to the  

overarching principle that Bills have to be passed by both Houses of Parliament.  

64 There is a significant difference between the provisions of Article 110(1) which  

defines Money Bills and the provisions of Article 117(1) which enunciates special  

provisions as to Financial Bills. Article 117(1) provides that a Bill or amendment  

making provision for any of the matters specified in sub-clauses (a) to (f) of Article  

110(1) shall not be introduced or moved except on the recommendation of the  

President of India and the Bill making such provision shall not be introduced in the  

Council of States.  The word ‗only‘ which is employed in Article 110(1) in the definition  

of Money Bills is absent in Article 117(1). The Legislative Procedure in the Rajya  

Sabha 48

explains that Financial Bills are comprised in categories I and II respectively:  

―b. Financial Bills – Category-I  

A Bill falling under clause (1) of article 117 of the Constitution  

is called  a Financial Bill. It is a Bill which seeks to make  

provision for any of the  matters specified in sub-clauses(a) to  

(f) of clause (1) of article 110 as also other matters. It is, so to  

say, a Bill which has characteristics both of a Money Bill…  

firstly, it cannot be introduced in Rajya Sabha, and secondly,  

it cannot be introduced except on the recommendations of the  

                                                 48

Legislative Procedure in the Rajya Sabha,: Rajya Sabha Secretariat at p. 17

PART E  

60  

President. Except these two points of difference, a Financial  

Bill in all other respects is just like any other ordinary Bill.  

(c). Financial Bills – Category-II  

There is yet another class of Bills which are also Financial  

Bills under article 117(3). Such Bills are more in the nature of  

ordinary Bills rather than the Money Bills and Financial Bills  

mentioned earlier. The only point of difference between this  

category of Financial Bills and the ordinary Bills is that such a  

Financial Bill, if enacted and brought into operation, involves  

expenditure from the Consolidated Fund of India and cannot  

be passed by either House of Parliament unless the President  

has recommended to that House the consideration of the Bill.  

In all other respects this category of Bills is, just like ordinary  

Bills, so that such a Financial Bill can be introduced in Rajya  

Sabha, amended by it or a joint sitting can be introduced in  

Rajya Sabha, amended by it or a joint sitting can be held in  

case of disagreement between the Houses over such a Bill.  

There is, in other words, no limitation on the power of Rajya  

Sabha in respect of such Financial Bills.‖          

The above classification re-emphasises the distinction of a Financial Bill with a Money  

Bill, which is a Bill which contains ‗only‘ provisions of the description specified in sub-

clauses (a) to (g) of Article 110(1).   

65 The Rajya Sabha reflects the pluralism of the nation and ensures a balance of  

power. It is an indispensable constitutive unit of the federal backbone of the  

Constitution. Potential differences between the two houses of the Parliament cannot  

be resolved by simply ignoring the Rajya Sabha. In a federal polity such as ours, the  

efficacy of a constitutional body created to subserve the purpose of a deliberate  

dialogue, cannot be defeated by immunising from judicial review the decision of the  

Speaker to certify a Bill as a Money Bill.  

PART F  

61  

F Merits of the challenge  

F.1 Passage as a Money Bill  

66 On 19 February 2014, the Appellate Tribunals and Other Authorities  

(Conditions of Service) Bill 2014 was introduced in the Rajya Sabha to provide  

―uniform conditions of service of the Chairman and Members‖ of 26 tribunals. Clause  

3 of the Bill provides:  

―3. Notwithstanding anything to the contrary contained in the  

provisions of the specified Acts, the provisions of this Act  

shall apply to the Chairman and Members appointed under  

the specified Acts:  

Provided that the provisions of this Act shall not apply to the  

Chairman and other Members, as the case may be, holding  

such office immediately before the commencement of the  

said Act.‖    

‗Specified Acts‘ were enunciated in the First Schedule to the Bill. The Bill was referred  

to the Department related Standing Committee which submitted its Seventy Fourth  

Report on 26 February 2015. The Bill was withdrawn on 11 April 2017.

   67 The Finance Bill 2017 was introduced as a Money Bill in the Lok Sabha with a  

recommendation of the President under clauses (1) and (3) of Article 117 of the  

Constitution. At the time of the introduction of the Bill on 1 February 2017, the Finance  

Bill 2017 comprised of 150 clauses together with seven schedules ―to give effect to  

the financial proposals of the Central Government for the financial year 2017-18‖. The  

Bill contained proposals inter alia to amend, add to and modify legislation dealing with  

taxation – direct, indirect and service taxes and other fiscal aspects. Part VIII of the

Finance Bill 2017 sought to expand the jurisdiction of the Securities Appellate

PART F  

62  

Tribunal 49

established under the SEBI Act 1992 50

and to make changes in the existing  

provisions for the appointments to the SAT. The Finance Bill was taken up for  

discussion on 21 March 2017 and was passed by the Lok Sabha on 22 March 2017  

with 29 government amendments.   

   68 On 21 March 2017, the Union Finance Minister proposed an amendment to  

incorporate Part XI (subsequently renumbered as Part XIV in the Finance Act)  

containing 34 new clauses and two schedules to the Finance Bill.  Rule 80(i) of the  

Rules of Procedure for the Conduct of Business in the Lok Sabha stipulates that:  

―80. Admissibility of amendments.  

The following conditions shall govern the admissibility of  

amendments to clauses or schedules of a Bill:  

(i) An amendment shall be within the scope of the Bill  and relevant to the subject-matter of the clause to which it  

relates.‖    

During the course of the discussion, the Speaker overruled the objection against the  

inclusion of the proposed amendments dealing with non-fiscal subjects.  The Lok  

Sabha Debates elucidate:  

―Hon. Members would recall that during last year when similar  

objections were raised at the time of consideration of the  

Finance Bill, 2016, I had observed that as per rule 219, the  

primary object of a Finance Bill is to give effect to the financial  

proposals of the Government. There is no doubt about it. At  

the same time, this Rule does not rule out the possibility of  

inclusion of non-taxation proposals. Therefore, I have  

accepted this. The Finance Bill may contain non-taxation  

proposals also…  

So, incidental provisions can be made. That is why, keeping  

in view that rule 2019 does not specifically bar inclusion of  

non-taxation proposals in a Finance Bill, I rule out the Point of  

Oder.‖   

                                                 49

―SAT‖  50

―SEBI Act 1992‖

PART F  

63  

 69 The Lok Sabha suspended the operation of Rule 80(1) so as to allow the  

proposed amendments to be incorporated in the Finance Bill. On 22 March 2017, the  

House adopted the Finance Bill 2017 along with an amendment to insert Part XI  

(renumbered as Part XIV in the Finance Act). The Bill was transmitted to the Rajya  

Sabha under Article 109(2) together with the certification of the Speaker.  The Rajya  

Sabha returned the Bill with its recommendations on 29 March 2017. On 30 March  

2017, the Lok Sabha rejected the recommendations. Resultantly the Finance Bill was  

deemed to have been passed by both the Houses.  

   70 Upon the passage of the Finance Bill 2017, the Rules were notified by the  

Union of India in the Ministry of Finance on 1 June 2017. In terms of Section 184 of  

the Finance Act 2017, the Rules specify: (i) criteria of eligibility; (ii) procedure of  

selection; (iii) provisions for resignation and removal; (iv) salaries and emoluments; (v)  

term and tenure; and (vi) other service conditions such as leave and allowances to  

members of scheduled tribunals.   

 Part XIV of the Finance Act 2017 is titled: ―Amendments to certain Acts to provide  

for Merger of Tribunals and Other Authorities and Conditions of Service of  

Chairpersons, Members etc.‖  

71 Section 158 effects amendments to several Parliamentary enactments:  

i. The Industrial Disputes Act,1947  

ii. The Employees‘ Provident Funds and Miscellaneous Provisions Act 1952  

iii. The Copyright Act 1957  

iv. The Trade Marks Act 1999

PART F  

64  

v. The Railway Claims Tribunal Act 1987  

vi. The Railways Act 1989  

vii. The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)  

Act 1976  

viii. The Foreign Exchange Management Act 1999  

ix.  The Airports Authority of India Act 1994  

x. The Control of National Highways (Land and Traffic) Act 2002  

xi. The Telecom Regulatory Authority of India Act 1997  

xii. The Information Technology Act 2000  

xiii. The Airports Economic Regulatory Authority of India Act 2008  

xiv. The Competition Act 2002   

xv. The Companies Act 2013  

xvi. The Cinematograph Act 1952  

xvii. The Income Tax Act 1961  

xviii. The Customs Act 1962  

xix. The Administrative Tribunals Act 1985  

xx. The Consumer Protection Act 1986  

xxi. The Securities and Exchange Board of India Act 1992  

xxii. The Recovery of Debts Due to Banks and Financial Institutions Act 1993  

xxiii. The Armed Forces Tribunal Act 2007  

xxiv. The National Green Tribunal Act 2010  

   72 Section 183 provides:  

―183. Notwithstanding anything to the contrary contained in  

the provisions of the Acts specified in column (3) of the Eighth  

Schedule, on and from the appointed day, provisions of

PART F  

65  

section 184 shall apply to the Chairperson, Vice-Chairperson,  

Chairman, Vice- Chairman, President, Vice-President,  

Presiding Officer or Member of the Tribunal, Appellate  

Tribunal or, as the case may be, other Authorities as specified  

in column (2) of the said Schedule:   

Provided that the provisions of section 184 shall not apply to  

the Chairperson, Vice Chairperson, Chairman, Vice-

Chairman, President, Vice-President, Presiding Officer or, as  

the case may be, Member holding such office as such  

immediately before the appointed day.‖  

The Eighth Schedule contains a list of 19 Tribunals together with the corresponding  

enactments under which they were constituted. The effect of Section 183 is to  

override the provisions of those enactments and to stipulate that from the appointed  

day, the provisions of Section 184 shall apply to Chairpersons, Vice Chairpersons,  

Presidents, Vice Presidents, Presiding Officers and Members of the Tribunals or, as  

the case may be, Appellate Tribunals.  Those who hold office immediately before the  

appointed day have been excluded.    

Section 184 stipulates:  

―184. (1) The Central Government may, by notification, make  

rules to provide for qualifications, appointment, term of office,  

salaries and allowances, resignation, removal and the other  

terms and conditions of service of the Chairperson, Vice-

Chairperson, Chairman, Vice-Chairman, President, Vice-

President, Presiding Officer or Member of the Tribunal,  

Appellate Tribunal or, as the case may be, other Authorities  

as specified in column (2) of the Eighth Schedule:   

Provided that the Chairperson, Vice-Chairperson, Chairman,  

Vice-Chairman, President, Vice-President, Presiding Officer  

or Member of the Tribunal, Appellate Tribunal or other  

Authority shall hold office for such term as specified in the  

rules made by the Central Government but not exceeding five  

years from the date on which he enters upon his office and  

shall be eligible for reappointment:   

Provided further that no Chairperson, Vice-Chairperson,  

Chairman, Vice-Chairman, President, Vice-President,  

Presiding Officer or Member shall hold office as such after he  

has attained such age as specified in the rules made by the  

Central Government which shall not exceed,—  

(a) in the case of Chairperson, Chairman or President, the  

age of seventy years;  

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66  

(b) in the case of Vice-Chairperson, Vice-Chairman, Vice-

President, Presiding Officer or any other Member, the age of  

sixty-seven years:  

(2) Neither the salary and allowances nor the other terms  

and conditions of service of Chairperson, Vice-Chairperson,  

Chairman, Vice-Chairman, President, Vice-President,  

Presiding Officer or Member of the Tribunal, Appellate  

Tribunal or, as the case may be, other Authority may be  

varied to his disadvantage after his appointment.‖  

73 Section 184 has conferred a rule making power on the Central Government to  

provide for the (i) qualifications; (ii) appointment; (iii) terms of office; (iv) salaries and  

allowances; (iv) resignation; (vi) removal; and (viii) other terms and conditions of  

service. The proviso stipulates that the term of office shall be such as is prescribed in  

the Rules made by the Central Government not exceeding five years and that a  

Member would be eligible for reappointment. An upper age limit is prescribed by the  

second proviso. Section 185 (1) stipulates that Chairpersons, Presidents or Vice  

Chairpersons, Vice Presidents, Presiding Officers and Members of the Tribunals or  

Appellate Tribunals who hold office before the appointed day shall cease to do so and  

be entitled to compensation not exceeding three months‘ pay and allowances for the  

premature termination of the term of office or the contract of service.  

   74 The learned Attorney General for India submitted that Part XIV of the Finance  

Act 2017 is sustainable with reference to sub-clauses (c), (d) and (g) of clause (1) of  

Article 110. The submission is that the certification by the Speaker is of the entire  

Finance Bill when it was transmitted to the Rajya Sabha. The Attorney General urged  

that payment of salaries is made out of the Consolidated Fund of India. Once this be  

the position, the other provisions of Part XIV are, it was urged, incidental in nature. It  

is argued that salaries, allowances and pension will have a direct nexus with the

PART F  

67  

Consolidated Fund of India and are incidental to the provisions contained in the  

Finance Act 2017. In this context, reliance was placed on: (i) the presumption of  

constitutional validity (State of West Bengal v Anwar Ali Sarkar 51

, R.K. Garg v  

Union of India 52

and Subramanian Swamy v Director, Central Bureau of  

Investigation 53

); (ii) the importance of the doctrine of separation of powers (Bhim  

Singh v Union of India 54

).   

   75 The provisions of Part XIV of the Finance Act 2017 amend, first and foremost,  

the legislative enactments under which diverse tribunals, including appellate tribunals  

were constituted. By and as a result of the amendments, the statutory provisions  

relating to qualifications for appointment, the process of appointment, terms of office  

and the terms and conditions of service including salaries, allowances, resignation  

and removal are overridden and are to be governed by the provisions of Section 184.   

Section 184 confers a rule making power on the Central Government to stipulate all  

the above aspects in regard to the adjudicatory personnel appointed to these  

tribunals. By this process, the governing statutory provisions embodied in the parent  

legislation are overridden and authority is conferred upon the Central Government to  

formulate other aspects of the process from qualifications for office and the process of  

appointment to the terms of service, through delegated legislation.  

   76 This, in our view, completely transgresses the conditions stipulated in Article  

110(1) for constituting a Money Bill.  Article 110 does not bar the inclusion of non-

fiscal proposals in a Money Bill.  But while permitting the inclusion of non-fiscal  

                                                 51

(1952) SCR 284  52

(1981) 4 SCC 675  53

(2014) 8 SCC 682  54

(2010) 5 SCC 538

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68  

subjects, sub-clause (g) of Article 110(1) embodies the requirement that such a matter  

must be incidental to any of the matters specified in sub-clauses (a) to (f).  In other  

words, the inclusion of a non-fiscal matter is permissible in a Money Bill only if it is  

incidental or ancillary to a matter specified in sub-clauses (a) to (f). Part XIV has  

repealed and replaced substantive provisions contained in the enactments specified in  

the Eighth and Ninth Schedules which are not referable to sub-clauses (a) to (f) of  

Article 110(1). Part XIV of the Finance Act 2017 is thus not incidental within the  

meaning of sub-clause (g).  The plain consequence is that by adopting the special  

procedure contained in Article 109, the substantive procedure governing Ordinary Bills  

under Articles 107 and 108 has been rendered otiose. If the provisions contained in  

Part XIV were to be enacted in the form of an Ordinary Bill, the Rajya Sabha would  

have a vital voice in deliberating and discussing on the nature of the legislative  

proposals. Part XIV contains provisions which lie outside the domain permissible  

under Article 110.  

 77 We are unimpressed with the submissions of the learned Attorney General that  

since salaries are payable out of the Consolidated Fund, Part XIV of the Finance Act  

bears a nexus with sub-clauses (c) and (d) of Article 110(1) and that the other  

provisions are merely incidental. That the amendment has a bearing on the financial  

burden on the Consolidated Fund of India cannot be the sole basis of brining the  

amendment within the purview of Article 110(1). On a close analysis of the provisions,  

it is evident that what is claimed to be incidental has swallowed up the entire  

legislative exercise. The provisions of Part XIV of the Finance Act 2017 canvass a  

range of amendments which include qualifications and process for appointment terms  

of office and terms and conditions of service including salaries, allowances,

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69  

resignation and removal which cannot be reduced to only a question of the financial  

burden on the Consolidated Fund of India. The effect of Part XIV is to amend and  

supersede the provisions contained in the parent enactments governing all aspects of  

the appointment and terms of service of the adjudicatory personnel of the tribunals  

specified in the Eighth and Ninth Schedules. This exercise cannot be construed as a  

legitimate recourse to the power of enacting a Money Bill.   

78 The Attorney General for India urged that the provisions of Part XIV of the  

Finance Act 2017, in so far as they have a financial bearing on the Consolidated Fund  

of India, are sustainable with reference to sub-clauses (c), (d), (e) and (g) of clause (1)  

of Article 110.   

 79 Sub-clause (c) deals, inter alia, with the withdrawal of money from either the  

Consolidated Fund of India or the Contingency Fund of India. Sub-clause (d) deals  

with the appropriation of money out of the Consolidated Fund of India. Sub-clause (e)  

stipulates either the declaration of any expenditure or the increase in the amount of  

expenditure charged on the Consolidated Fund of India. It was contended that Part  

XIV of the Finance Act 2017, in so far as it has a bearing on the Consolidated Fund of  

India, is incidental to the matters referred in sub-clauses (c), (d) and (e) of Article  

110(1).  

 80 Sub-clause (g) stipulates that provisions dealing with any matter incidental to  

the matters specified in sub-clauses (a) to (f) fall within the purview of Article 110(1).  

However, this is distinct from contending that where a bill contains provisions not  

referable to the sub-clauses (a) to (f) stipulated in clause (1) of Article 110 but has an

PART F  

70  

incidental bearing on the Consolidated Fund of India, this by itself would bring such a  

bill within the purview of sub-clause (g) of Article 110(1).   

 81 Article 110(1) defines a Money Bill as a bill which contains ―only provisions‖  

dealing with all or any of the matters enumerated in sub-clauses (a) to (f). The import  

of sub-clause (g) of clause (1) of Article 110 is that the proposed bill may also contain  

provisions which have an incidental bearing on the matters enumerated in sub-

clauses (a) to (f). However, sub-clause (g) cannot be read to permit a bill consisting of  

provisions which do not directly pertain to matters enumerated in sub-clauses (a) to  

(f), but have only an incidental bearing on the matters enumerated in sub-clauses (a)  

to (f). Implicit in the term ―incidental‖ is the relation between the principal subject  

matters of the bill which must be referable to sub-clauses (a) to (f) and other matters.  

Every provision of a bill which is claimed to be a Money Bill must directly pertain to  

any of the matters enumerated in clauses (a) to (f). Where it is claimed that a  

provision falls within the ambit of sub-clause (g), the provision must depend on or be  

appurtenant ―to any of the matters specified in sub-clauses (a) to (f).‖  

 82 Part XIV of the Finance Act 2017 canvasses a range of amendments which  

include qualifications and process for appointment of members of tribunals, terms of  

office and terms and conditions of service including salaries, allowances, resignation  

and removal which are not referable to sub-clauses (a) to (f) of clause (1) of Article  

110. Almost every government action involves an increase or decrease of expenditure  

which may be relatable to the Consolidated Fund of India. Accepting the argument  

urged would amount to inverting sub-clause (g) and allowing any bill which is not  

referable to the matters enumerated in Article 110(1) to be passed as a Money Bill so

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71  

long as it can be shown that the provisions may have some bearing on the  

Consolidated Fund of India.   

 83 Further, the contention urged that the transfer of the power to determine  

salaries has a direct nexus with the Consolidated Fund of India glosses over the  

distinction between the power to determine of modify salaries and the determination  

or modification of the salary. The transfer of the power to determine or modify salaries  

does not, by itself, lead to the conclusion that such transfer of authority to the rule  

making function by the Central Government is referable to the Consolidated Fund of  

India in the manner contemplated in the sub-clauses referred to above.   

 84 The transfer of authority to determine qualifications and process for  

appointments, terms of office and terms and conditions of service including salaries,  

allowances, resignation and removal of tribunal members from the statutory provisions  

determined by the legislature to the executive is the transfer of a substantive right  

which has a bearing on constitutional design as well as the independence of  

adjudicatory tribunals. They are not referable to sub-clauses (c), (d) and (e) of Article  

110(1) and do not amount to matters incidental to any of the matters enumerated in  

sub-clauses (a) to (f) of clause (1) of Article 110.   

 85 There is undoubtedly a presumption of constitutionality which attaches to  

legislation. The presumption is founded on the principle that the legislature in a  

parliamentary democracy understands the needs and conditions of the time and that  

the executive government which pilots legislation through the competent legislature is  

accountable to both the legislature and to the people whom the elected arm of  

government represents. But the presumption of constitutionality is what it is, namely, a

PART F  

72  

presumption. The presumption can be displaced on a clear violation of a constitutional  

mandate or infraction being established.  Where a Bill which contains provisions which  

are not referable to sub-clauses (a) to (g) of clause (1) of Article 110 is passed as a  

Money Bill, that constitutes a clear violation of the mandate of Article 110. The  

presumption of constitutionality stands displaced.  

 86 The learned Attorney General urged that the doctrine of separation of powers  

would require this Court to tread with caution since certification of a Bill as a Money  

Bill, as he submits, pertains to the internal functioning of Parliament. Judicial review, it   

was submitted, would violate the separation of powers.  The submission overlooks the  

fundamental position that the certification of a Bill as a Money Bill and the invocation  

of the provisions of Article 110 is an exception which has been carved out by the  

Constitution to the constitutional requirements accompanying the passage of ordinary  

legislation.  In passing the Bill as a Money Bill, the immediate impact is to denude the  

Rajya Sabha of the legislative role which is assigned to it in the passage of legislation.  

 87  The Rajya Sabha as a legislative institution represents the voice, concerns and  

aspirations of Indian federalism. The reduction of the role of the Rajya Sabha in the  

case of a Money Bill was engrafted by the draftspersons of the Constitution with a  

specific purpose. In their view, Money Bills should appropriately be reserved for the  

authority of the Lower House which consists of directly elected representatives of the  

people. But to regard a Bill which is not a Money Bill as one which passes muster  

under Article 110 is a breach of a substantive constitutional provision, a violation of  

constitutional process and hence, an illegality.  

PART F  

73  

88 The basic postulate of our Constitution is that every authority is subservient to  

constitutional supremacy. No authority can assume to itself the ultimate power to  

decide the limits of its own constitutional mandate.  Judicial review is intended to  

ensure that every constitutional authority keeps within the bounds of its constitutional  

functions and authority. In holding a constitutional institution within its bounds, judicial  

review does not trench upon the doctrine of separation of powers. The adjudicatory  

power vests in the Supreme Court as a constitutional court. In adjudicating on whether  

there has been a violation of a constitutional mandate in passing a Bill as a Money  

Bill, judicial review does not traverse beyond the limit set by the separation of powers.  

On the contrary, the independence of judicial tribunals has been consistently  

recognised by this Court as an inviolable feature of the basic structure of the  

Constitution. Determination of the norms of eligibility, the process of selection,   

conditions of service,  and those regulating the impartiality with which the members of  

the tribunals discharge their functions and their effectiveness as adjudicatory bodies is  

dependent on their isolation from the executive.  By leaving the rule making power to  

the uncharted wisdom of the executive, there has been a self-effacement by  

Parliament. The conferment of the power to frame rules on the executive has a direct  

impact on the independence of the tribunals. Allowing the executive a controlling  

authority over diverse facets of the tribunals would be destructive of judicial  

independence which constitutes a basic feature of the Constitution.  

F.2 Violation of directions issued by this Court  

 89 The Rules under Section 184 of the Finance Act 2017, termed the Tribunal,  

Appellate Tribunal and Other Authorities (Qualifications, Experience and Other

PART F  

74  

Conditions of Service of Members) Rules 2017 were notified on 1 June 2017.  Rule 1  

(3) provides for the applicability of the rules in the following terms:  

―(3) These rules shall apply to the Chairman, Vice-Chairman,  

Chairperson, Vice- Chairperson, President, Vice- President,  

Presiding Officer, Accountant Member, Administrative  

Member, Judicial Member, Expert Member, Law Member,  

Revenue Member, Technical Member, Member of the  

Tribunal, Appellate Tribunal or, as the case may be, Authority  

as specified in column (2) of the Eighth Schedule of the  

Finance Act, 2017 (7 of 2017).‖  

90 Rule 3 prescribes the qualifications for appointment to those tribunals which are  

specified in Column 3 of the Schedule. Rule 4 provides that the method of recruitment  

is specified in Column 4 of the Schedule. Rule 7 provides for the removal of a member  

from office by the Central Government ―on the recommendation of a committee  

constituted by it in this behalf‖.  Rule 8 provides for the procedure for enquiry into an  

alleged misbehaviour or incapacity of a member. It contemplates a preliminary  

scrutiny by the Ministry or the Department of the Government of India under which the  

tribunal or appellate tribunal is constituted or established. Upon finding that there are  

reasonable grounds in an inquiry, a reference is made to the committee constituted  

under Rule 7.  After the conclusion of the enquiry, the committee is to submit its report  

to the Central Government with its findings.  Rule 9 provides for the term of office as  

specified in Column 5 of the Schedule with a cap on age as specified in Column 6.  

Rule 11 provides for a fixed salary of Rs 2.50 lakhs together with allowances and  

benefits admissible to a Central Government officer holding an office carrying the  

same pay in the case of the Chairperson or President or Presiding Officer of SAT. A  

consolidated salary of Rs 2.25 lakhs is payable to Vice Chairpersons, Vice Presidents  

and Members.   

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75  

Column 4 of the Schedule stipulates the composition of the Search-cum-Selection  

Committee for the various tribunals. The Search-cum-Selection Committee of the  

Industrial Tribunal is as follows:  

―Search-cum-Selection Committee for the post of the  

Presiding Officer, - (i) a person to be nominated by the  

Central Government chairperson; (ii) Secretary to the  

Government of India, Ministry of Labour and Employment-  

member; (iii) Secretary to the Government of India to be  

nominated by the Central Government-member; (iv) two  

experts to be nominated by the Central Government-  

members.‖  

It is evident that the Search-cum-Selection Committee is constituted entirely from  

personnel within or nominated by the Central Government. Barring the National  

Company Law Appellate Tribunal, the Search-cum-Selection Committee for all other  

seventeen tribunals specified in the Schedule is constituted either entirely from  

personnel within or nominated by the Central Government or comprises a majority of  

personnel from the Central Government. The Search-cum-Selection Committee of the  

National Company Law Appellate Tribunal consists of an equal number of members  

from the judiciary as well as from the Central Government with no casting vote to the  

Chief Justice of India or their nominee:  

―(B) Search-cum-Selection Committee for the post of the  

Judicial Member and Technical Member of the Appellate  

Tribunal, - (i) Chief Justice of India or his nominee -

chairperson; (ii) a senior Judge of the Supreme Court or a  

Chief Justice of a High Court-member; (iii) Secretary to the  

Government of India, Ministry of Corporate Affairs- member;  

(iv) Secretary to the Government of India, Ministry of Law and  

Justice-member.‖  

The procedure for selection is fundamentally destructive of judicial independence. The  

Union Government has vital status in the disputes before many tribunals. Even

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76  

otherwise, conferring upon the government such a dominating and overwhelming  

voice in making appointments is a negation of judicial independence.   

   91 Sub-rule 2 of Rule 4 of the 2017 Rules stipulates that the Secretary to the  

Government of India in the Ministry or Department shall be the Convener of the  

Search-cum-Selection Committee. In R Gandhi, the Court specifically issued the  

following directions in regard to the constitution of the Selection Committees:  

―(viii) Instead of a five-member Selection Committee with the  

Chief Justice of India (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 the  

Secretary in the Ministry of Law and Justice as members  

mentioned in Section 10-FX, the Selection Committee should  

broadly be on the following lines:  

(a) Chief Justice of India or his nominee—Chairperson  

(with a casting vote);  

(b) A Senior Judge of the Supreme Court or Chief Justice  

of High Court—Member;  

(c) Secretary in the Ministry of Finance and Company  

Affairs—Member; and  

(d) Secretary in the Ministry of Law and Justice—

Member.‖  

(Emphasis supplied)  

Significantly, Section 10 (FX) which was inserted into the Companies Act 1956 by the  

Companies (Second Amendment) Act 2002 relating to the Constitution of NCLT and  

NCLAT contained the following provision:  

―10-FX. Selection Committee.—(1) The Chairperson and Members of the Appellate  Tribunal and President and Members of the Tribunal shall be appointed by the Central  Government on the recommendations of a Selection Committee consisting of—  

(a) Chief Justice of India or his nominee   Chairperson;  

(b) Secretary in the Ministry of Finance and  Company Affairs  

Member;  

(c) Secretary in the Ministry of Labour Member;  

(d) Secretary in the Ministry of Law and Justice  (Department of Legal Affairs or Legislative  Department)  

Member;  

(e) Secretary in the Ministry of Finance and         

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77  

Company Affairs (Department of Company  Affairs)‖  

Member                   

 92 In Madras Bar Association, Section 7 of the National Tax Tribunal Act 2005  

provided for the process of selection and appointment of the Chairperson and  

members of the NTT. The Court observed that as the jurisdiction of the High Courts  

was being transferred to the Tribunal, the stature of the members, conditions of  

service, and manner of appointment and removal of members must be akin to that of  

the judges of High Courts. Section 7 was held to be invalid (among other provisions).  

The leading judgment of the majority by Justice J S Khehar (as the learned Judge  

then was) held:  

―131. Section 7 cannot even otherwise be considered to be  

constitutionally valid, since it includes in the process of  

selection and appointment of the Chairperson and Members  

of NTT, Secretaries of Departments of the Central  

Government. In this behalf, it would also be pertinent to  

mention that the interests of the Central Government would  

be represented on one side in every litigation before NTT. It is  

not possible to accept a party to a litigation can participate in  

the selection process whereby the Chairperson and Members  

of the adjudicatory body are selected. This would also be  

violative of the recognised constitutional convention recorded  

by Lord Diplock in Hinds case [Hinds v. R., 1977 AC 195 :  

(1976) 2 WLR 366 : (1976) 1 All ER 353 (PC)] , namely, that it  

would make a mockery of the Constitution, if the legislature  

could transfer the jurisdiction previously exercisable by  

holders of judicial offices to holders of a new court/tribunal (to  

which some different name was attached) and to provide that  

persons holding the new judicial offices should not be  

appointed in the manner and on the terms prescribed for  

appointment of members of the judicature. For all the reasons  

recorded hereinabove, we hereby declare Section 7 of the  

NTT Act, as unconstitutional.‖  

93 The constitution of the Search-cum-Selection committees as stipulated in the  

Schedule to the 2017 Rules cannot pass constitutional muster under a system  

governed by the rule of law that accords primacy to the independence of the judiciary.

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78  

Independence of the judiciary requires that judicial functioning be free from  

interference by the other two organs of the state. The Central Government is the  

largest litigant before the tribunals constituted under various statutes. The  

independent functioning of the tribunals stands compromised where the executive has  

the controlling authority in the selection of members to the tribunals. The executive is  

often a litigant before and has an interest in the disputes which are adjudicated by the  

tribunals. The constitution of the Search-cum-Selection committees stipulated in the  

2017 Rules violates the principle of judicial independence and the directions issued by  

this Court in R Gandhi and Madras Bar Association.  

 94 Column 5 of the Schedule to the 2017 Rules stipulates that the term of office  

shall be three years for all tribunals. This disregards the principle enunciated by this  

Court in R Gandhi. By the judgment of this Court, the following direction was issued:  

―(ix) The term of office of three years shall be changed to a  

term of seven or five years subject to eligibility for  

appointment for one more term. This is because considerable  

time is required to achieve expertise in the field concerned. A  

term of three years is very short and by the time the members  

achieve 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-retirement  

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 service.‖  

 Rule 18(2) stipulates that members who have been appointed to tribunals shall not  

practice before the tribunal, appellate tribunal or the authority after retirement. We are  

in agreement with the views expressed by this Court in R Gandhi. Inherent in the  

efficient functioning of tribunals is that appointment to tribunals is made attractive to  

practicing individuals who are guaranteed a reasonable period of service.

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79  

   95 Section 184 stipulates that the Chairperson, Vice-Chairperson, Chairman, Vice-

Chairman, President, Vice-President, Presiding Officer or Member of the Tribunal,  

Appellate Tribunal or other Authority is eligible for reappointment. This is restated in  

Rule 9. This is in violation of the direction issued by this Court in Madras Bar  

Association where Section 8 which provided for reappointment was struck down in  

the following terms:  

―132. Insofar as the validity of Section 8 of the NTT Act is  

concerned, it clearly emerges from a perusal thereof that a  

Chairperson/Member is appointed to NTT, in the first  

instance, for a duration of 5 years. Such Chairperson/Member  

is eligible for reappointment for a further period of 5 years.  

We have no hesitation to accept the submissions  

advanced at the hands of the learned counsel for the  

petitioners, that a provision for reappointment would  

itself have the effect of undermining the independence of  

the Chairperson/Members of NTT. Every  

Chairperson/Member appointed to NTT would be  

constrained to decide matters in a manner that would  

ensure his reappointment in terms of Section 8 of the  

NTT Act. His decisions may or may not be based on his  

independent understanding. We are satisfied that the  

above provision would undermine the independence and  

fairness of the Chairperson and Members of NTT. Since  

NTT has been vested with jurisdiction which earlier lay with  

the High Courts, in all matters of appointment, and extension  

of tenure, must be shielded from executive involvement. The  

reasons for our instant conclusions are exactly the same as  

have been expressed by us while dealing with Section 5 of  

the NTT Act. We therefore hold that Section 8 of the NTT Act  

is unconstitutional.‖  

(Emphasis supplied)  

Rule 20 vests the Central Government with vast powers to relax the provisions of the  

applicable rules:  

 ―Where the Central Government is of the opinion that it is  

necessary or expedient so to do, it may, by order for reasons  

to be recorded in writing relax any of the provisions of these  

rules with respect to any class or category of persons.‖

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80  

96 The Central Government to whom a rule making authority was conferred by  

Section 184 has not observed the principles which were enunciated in R Gandhi and  

Madras Bar Association either in letter or in spirit. The dangers inherent in  

conferring such an unguided power on the executive to frame rules governing the  

selection, appointment and conditions of service of the members of the tribunals is  

evident from the rules which have been framed. The rules disregard binding principles  

enunciated in decisions of this court. The rules are destructive of judicial  

independence and are unconstitutional.  

 97 Before concluding, it is necessary to advert to two pre-eminent authorities  

which were adverted to in the decisions in R Gandhi and in the concurring judgment  

in Madras Bar Association.  In R Gandhi, Justice RV Raveendran observed:  

 ―112. What is a matter of concern is the gradual erosion of the  

independence of the judiciary, and shrinking of the space  

occupied by the judiciary and gradual increase in the number  

of persons belonging to the civil service discharging functions  

and exercising jurisdiction which was previously exercised by  

the High Court. There is also a gradual dilution of the  

standards and qualification prescribed for persons to decide  

cases which were earlier being decided by the High Courts.‖  

 The learned Judge referred to the cautionary words of Justice William O Douglas, a  

distinguished judge of the US Supreme Court:  

―52.The need for vigilance in jealously guarding the  

independence of courts and Tribunals against dilution and  

encroachment, finds an echo in an advice given by Justice  

William O. Douglas to young lawyers (The Douglas Letters:  

Selections from the Private Papers of William Douglas, edited  

by Melvin L. Urofsky, 1987 Edn., p. 162, Adler and Adler):  

―… The Constitution and the Bill of Rights were designed to  

get Government off the backs of people—all the people.  

Those great documents did not give us the welfare State.

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81  

Instead, they guarantee to us all the rights to personal and  

spiritual self-fulfilment.  

But that guarantee is not self-executing. As nightfall does not  

come all at once, neither does oppression. In both instances,  

there is a twilight when everything remains seemingly  

unchanged. And it is in such twilight that we all must be most  

aware of change in the air—however slight—lest we become  

unwitting victims of the darkness.‖  

In Madras Bar Association, Justice Rohinton Nariman, in the course of his  

concurring judgment, adverted to a decision of Lord Atkin:  

 ―178. In Proprietary Articles Trades Assn. v. Attorney General  

for Canada [1931 AC 310 (PC)] , Lord Atkin said: (AC p. 317)  

―… Their Lordships entertain no doubt that time alone will not  

validate an Act which when challenged is found to be ultra  

vires; nor will a history of a gradual series of advances till this  

boundary is finally crossed avail to protect the ultimate  

encroachment.‖  

98 We find that though the decision in R Gandhi was delivered in 2010 and in  

Madras Bar Association in 2014, the same anomalies have persisted.  An attempt  

has been made to dilute judicial independence by a creeping assertion of executive  

power. This is unconstitutional.  

F.3 Severability   

 99 The learned Attorney General submitted that the certification of the Speaker of  

the Bill as a Money Bill attaches to the entirety of the Finance Bill.  Hence, it was  

urged, that the consequence of accepting the submission of the petitioners would  

result in the invalidation of the entire Finance Act.  We are of the view that this Court  

should apply the doctrine of severability to Part XIV of the Finance Act 2017.  

Severability was applied in a judgment of this Court in R.M.D. Chamarbaugwalla v

PART F  

82  

Union of India (―Chamarbaugwalla‖) 55

.  Justice Venkatarama Ayyar, speaking for a  

Constitution Bench of this Court observed:  

 ―12. The question whether a statute which is void in part is to  

be treated as void in toto, or whether it is capable of  

enforcement as to that part which is valid, is one which can  

arise only with reference to laws enacted by bodies which do  

not possess unlimited powers of legislation, as, for example,  

the legislatures in a Federal Union. The limitation on their  

powers may be of two kinds: It may be with reference to the  

subject-matter on which they could legislate, as, for example,  

the topics enumerated in the Lists in the Seventh Schedule in  

the Indian Constitution, Sections 91 and 92 of the Canadian  

Constitution, and Section 51 of the Australian Constitution; or  

it may be with reference to the character of the legislation  

which they could enact in respect of subjects assigned to  

them, as for example, in relation to the fundamental rights  

guaranteed in Part III of the Constitution and similar  

constitutionally protected rights in the American and other  

Constitutions. When a legislature whose authority is subject  

to limitations aforesaid enacts a law which is wholly in excess  

of its powers, it is entirely void and must be completely  

ignored. But where the legislation falls in part within the area  

allotted to it and in part outside it, it is undoubtedly void as to  

the latter; but does it on that account become necessarily void  

in its entirety? The answer to this question must depend on  

whether what is valid could be separated from what is invalid,  

and that is a question which has to be decided by the court on  

a consideration of the provisions of the Act. ―  

   Adverting to the decision in State of Bombay v F N Balsara

56 , the Constitution Bench  

observed:  

―This decision is clear authority that the principle of  

severability is applicable even when the partial invalidity of  

the Act arises by reason of its contravention of constitutional  

limitations.‖    

100 In State of Bombay v United Motors (India) Ltd. 57

, Chief Justice Patanjali  

Sastri held that the doctrine of severability should be extended in dealing with taxing  

                                                 55

1957 SCR 930  56

1951 SCR 682  57

1953 SCR 1069

PART F  

83  

statutes. After adverting to these decisions in Chamarbaugwalla, Justice  

Venkatarama Ayyar concluded:  

―21…The resulting position may thus be stated: When a  

statute is in part void, it will be enforced as regards the rest, if  

that is severable from what is invalid. It is immaterial for the  

purpose of this rule whether the invalidity of the statute arises  

by reason of its subject-matter being outside the competence  

of the legislature or by reason of its provisions contravening  

constitutional prohibitions.‖  

The principles which govern the exercise of the doctrine of severability have been  

formulated thus:  

―22…  

1. In determining whether the valid parts of a statute are  

separable from the invalid parts thereof, it is the intention of  

the legislature that is the determining factor. The test to be  

applied is whether the legislature would have enacted the  

valid part if it had known that the rest of the statute was  

invalid. Vide Corpus Juris Secundum, Vol. 82, p.  

156; Sutherland on Statutory Construction, Vol. 2 pp. 176-

177.  

2. If the valid and invalid provisions are so inextricably mixed  

up that they cannot be separated from one another, then the  

invalidity of a portion must result in the invalidity of the Act in  

its entirety. On the other hand, if they are so distinct and  

separate that after striking out what is invalid, what remains is  

in itself a complete code independent of the rest, then it will  

be upheld notwithstanding that the rest has become  

unenforceable. Vide Cooley's Constitutional Limitations, Vol. I  

at pp. 360-361; Crawford on Statutory Construction, pp. 217-

218.  

3. Even when the provisions which are valid are distinct and  

separate from those which are invalid, if they all form part of a  

single scheme which is intended to be operative as a whole,  

then also the invalidity of a part will result in the failure of the  

whole. Vide Crawford on Statutory Construction, pp. 218-219.  

4. Likewise, when the valid and invalid parts of a statute are  

independent and do not form part of a scheme but what is left  

after omitting the invalid portion is so thin and truncated as to  

be in substance different from what it was when it emerged  

out of the legislature, then also it will be rejected in its  

entirety.

PART F  

84  

5. The separability of the valid and invalid provisions of a  

statute does not depend on whether the law is enacted in the  

same section or different sections; (Vide Cooley's  

Constitutional Limitations, Vol. I, pp. 361-362); it is not the  

form, but the substance of the matter that is material, and that  

has to be ascertained on an examination of the Act as a  

whole and of the setting of the relevant provision therein.  

6. If after the invalid portion is expunged from the statute what  

remains cannot be enforced without making alterations and  

modifications therein, then the whole of it must be struck  

down as void, as otherwise it will amount to judicial  

legislation. Vide Sutherland on Statutory Construction, Vol. 2,  

p. 194.  

7. In determining the legislative intent on the question of  

separability, it will be legitimate to take into account the  

history of the legislation, its object, the title and the preamble  

to it. Vide Sutherland on Statutory Construction, Vol. 2, pp.  

177-178.‖  

101 In the present case, applying these principles enunciated above, Part XIV of the  

Finance Act 2017 is severable. The intent of the legislature is the guiding principle  

under the first of the above principles. Parliament would, in any event, have enacted  

the valid parts of the Finance Act 2017 if it had known that Part XIV is invalid. The  

valid and invalid parts are not so inextricably linked that the invalidity of Part XIV  

should result in the invalidity of the rest. Nor is Part XIV a part of a composite scheme  

linked to the other parts of the Finance Act 2017. Even after the excision of Part XIV  

the remaining part of the Finance Act would still survive on its own.  Hence, Part XIV  

of the Finance Act 2017 can be excised from the Act.   

   102 Finally, a fervent plea was made by the learned Attorney General to the effect  

that even though some provisions contained in the Rules framed on 1 June 2017 may  

run contrary to the principles enunciated by this Court in R Gandhi and Madras Bar  

Association, the Central Government would be willing to proceed on the basis of the  

interim orders which were passed by this Court during the pendency of the

PART F  

85  

proceedings with certain modifications. We are unable to accept the submission. Part  

XIV of the Finance Act 2017 could not have been enacted in the form of a Money Bill.  

The rules framed by the Central Government are unconstitutional on the ground that  

they violate the principles of judicial independence set out in judgments of this Court.

G Conclusion    

103 Part XIV of the Finance Act 2017 could not have been enacted in the form of a  

Money Bill. The rules which have been framed pursuant of the rule making power  

under Section 184 are held to be unconstitutional. However, since during the  

pendency of these proceedings, certain steps were taken in pursuance of the interim  

orders and appointments have been made, we direct that those appointments shall  

not be  affected by the declaration of unconstitutionality. The terms and conditions  

governing the personnel so appointed shall however abide by the parent enactments.   

Upon the declaration of unconstitutionality, the conditions specified in all  

corresponding aspects in the parent enactments shall continue to operate.   

   104 This Court has repeatedly emphasised the need for setting up an independent  

statutory body to oversee the working of tribunals. Despite the directions issued by  

this Court in Chandra Kumar nearly two decades ago, no action has been taken by  

the legislature to put in place an umbrella organisation which would be tasked with  

addressing the drawbacks of the system to which we have adverted above. The lack  

of a single authority to ensure competence and uniform service conditions has led to a  

fragmented tribunal system that defeats the purpose for which the system was  

constituted. Moreover, the co-ordinating authority for all tribunals must be the

PART G  

86  

Department of Justice. Vesting that function in individual ministries has led to  

haphazard evolution of the tribunal structure, besides posing serious dangers to the  

independence of tribunals.   

   105 It is imperative that an overarching statutory organisation be constituted  

through legislative intervention to oversee the working of tribunals. We recommend  

the constitution of an independent statutory body called the ―National Tribunals  

Commission‖ 58

to oversee the selection process of members, criteria for appointment,  

salaries and allowances, introduction of common eligibility criteria, for removal of  

Chairpersons and Members as also for meeting the requirement of infrastructural and  

financial resources. The legislation should aim at prescribing uniform service  

conditions for members. The Commission should comprise the following members:  

(i) Three serving judges of the Supreme Court of India nominated by the Chief  

Justice of India;  

(ii) Two serving Chief Justices or judges of the High Court nominated by the Chief  

Justice of India;   

(iii) Two members to be nominated by the Central Government  from amongst  

officers holding at least the rank to a Secretary to the Union Government: one  

of them shall be the Secretary to the Department of Justice who will be the ex-

officio convener; and  

(iv) Two independent expert members to be nominated by the Union government in  

consultation with the Chief Justice of India.   

                                                 58

―NTC‖

PART G  

87  

106 The senior-most among the Judges nominated by the Chief Justice of India  

shall be designated as the Chairperson of the NTC.  

 107 While the setting up of the NTC is within the competence of the legislature, it  

must be ensured that the guidelines that have been laid down by this Court to ensure  

the independence and efficient functioning of the tribunal system in India are  

observed. The independence of judicial tribunals is an inviolable feature of the basic  

structure of the Constitution. The procedure of selection, appointment, removal of  

members and prescription of the service conditions of tribunal members determine the  

independence of the tribunals. As we have held, in preserving the independence of  

the tribunals as a facet of judicial independence, the adjudicatory body must be  

robust: subservient to none and accountable to the need to render justice in the  

context of specialized adjudication. This is reflected in the need for vigilance in  

guarding the independence of courts and tribunals.  

 108 Competence, professionalism and specialisation are indispensable facets of a  

robust tribunal system designed to deliver specialised justice. The Commission must  

be vested with the power to oversee the administration of all tribunals established  

under the enactments of Parliament to ensure the adequate manning of the tribunals  

with the infrastructure and staff required to meet the exigencies of the system. The  

Union government should also consider formulating a law to ensure the constitution of  

an All India Tribunal Service governing the recruitment and conditions of service of the  

non-adjudicatory personnel for tribunals. At present, the administrative staff of the  

tribunals is by and large brought on deputation. The tribunals are woefully short of an  

adequate complement of trained administrative personnel. Hence, there is an urgent

PART G  

88  

need to set up an All India Tribunal Service in the interests of the effective functioning  

of the tribunal system.     

 Though the present judgment analyses the ambit of the word ―only‖ in Article 110(1)  

and the interpretation of sub-clauses (a) to (g) of clause (1) of Article 110 and  

concludes that Part XIV of the Finance Act 2017 could not have been validly enacted  

as a Money Bill, I am in agreement with the reasons which have been set out by the  

learned Chief Justice of India to refer the aspect of money bill to a larger Bench and  

direct accordingly.  

 I am in agreement with the observations of brother Justice Deepak Gupta that the  

qualifications of members to tribunals constitute an essential legislative function and  

cannot be delegated.  Tribunals have been conceptualized as specialized bodies with  

domain-specific knowledge expertise.  Indispensable to this specialized adjudicatory  

function is the selection of members trained in their discipline.  Keeping this in mind,  

the prescription of qualifications for members of tribunals is a legislative function in its  

most essential character.  

 The qualifications for appointment to adjudicatory bodies determine the character of  

the body.  The adjudicatory tribunals are intended to fulfil the objects of legislation  

enacted by Parliament, be it in the area of consumer protection, environmental  

adjudication, industrial disputes and in diverse aspects of economic regulation.  

Defining the qualifications necessary for appointment of members constitutes the  

core, the very essence of the tribunal. This is an essential legislative function and  

cannot be delegated to the rule making authority of the central government.  It is for

PART G  

89  

the legislature to define the conditions which must be fulfilled for appointment after  

assessing the need for domain specific knowledge.    

.……......................................................J                     [Dr Dhananjaya Y Chandrachud]      New Delhi;  November 13, 2019.

1    

REPORTABLE    

IN THE SUPREME COURT OF INDIA   CIVIL APPELLATE/ORIGINAL JURISDICTION  

CIVIL APPEAL NO.8588 OF 2019  

(@ Special Leave Petition (Civil) No.15804 of 2017)  

ROJER MATHEW                     …APPELLANT(S)    

Versus  

 SOUTH INDIAN BANK LTD. & ORS.        …RESPONDENT(S)      

WITH    

W.P.(C) No.267/2012, W.P.(C) No. 279/2017, W.P.(C) No.  558/2017, W.P.(C) No. 561/2017, W.P.(C) No. 625/2017,   W.P.(C) No. 640/2017, W.P.(C) No. 1016/2017, W.P.(C) No.  788/2017, W.P.(C) No. 925/2017, W.P.(C) No. 1098/2017,  W.P.(C) No. 1129/2017, W.P.(C) No. 33/2018, W.P.(C) No.  205/2018, W.P.(C) No. 467/2018, T.C.(C) No. 49/2018, T.C.(C)  No. 51/2018, T.P.(C) No. 2199/2018   

J U D G M E N T    

Deepak Gupta, J.  

I have had the privilege of going through the detailed and  

erudite judgments of  the Chief Justice and brother Chandrachud,  

J.   

2    

2. Since the entire gamut of facts, submissions and laws have  

been dealt with in the judgment of Chief Justice, for the sake of  

brevity, it would not be necessary to set out all the facts and  

contentions in detail.    

3. Reference in this judgment to ‘Tribunal’ will include tribunal,  

appellate tribunal or other authorities referred to in Part XIV of the  

Finance Act, 2017.  Reference to ‘Chairpersons/Members’ will  

include Chairperson, Vice-Chairperson, Chairman, Vice-

Chairman, President, Vice-President or other members referred to  

in Section 184 of the Finance Act, 2017.  Some tribunals have both  

regulatory as well as adjudicatory roles.  Most of the discussion  

hereinafter relates to the adjudicatory role of tribunals.     

4. The order dated 27.03.2019 quoted in the judgment of the  

Chief Justice clearly sets out the issues with which the present  

bench is concerned.   To put it in a nutshell, the issue before this  

Court is whether tribunals are an effective alternative to Courts; if  

yes, who should man them.  Keeping in view the ever-changing  

developments in law and the provisions of Articles 323-A and 323-

B of the Constitution of India, tribunals as an alternative to Courts,  

have come to stay.  The main issue is how to ensure that these  

tribunals function effectively, fearlessly and efficiently.   

3    

5. The Chief Justice in his judgment has culled out the following  

issues for determination:-  

I. Whether the ‘Finance Act, 2017’ insofar as it amends  

certain other enactments and alters conditions of  

service of persons manning different Tribunals can be  

termed as a ‘money bill’ under Article 110 and  

consequently is validly enacted?  

II. If the answer to the above is in the affirmative then  

whether Section 184 of the Finance Act, 2017 is  

unconstitutional on account of Excessive Delegation?  

III. If Section 184 is valid, Whether Tribunal, Appellate  

Tribunal and other Authorities (Qualifications,  

Experience and other Conditions of Service of Members)  

Rules, 2017 are in consonance with the Principal Act  

and various decisions of this Court on functioning of  

Tribunals?  

IV. Whether there should be a Single Nodal Agency for  

administration of all Tribunals?  

V. Whether there is a need for conducting a Judicial  

Impact Assessment of all Tribunals in India?

4    

VI. Whether judges of Tribunals set up by Acts of  

Parliament under Articles 323-A and 323-B of the  

Constitution can be equated in ‘rank’ and ‘status’ with  

Constitutional functionaries?  

VII. Whether direct statutory appeals from Tribunals to the  

Supreme Court ought to be detoured?  

VIII. Whether there is a need for amalgamation of existing  

Tribunals and setting up of benches.   

6. By and large I am in agreement with the reasoning and  

conclusions arrived at by the Chief Justice, especially on issues 1  

and 3 to 8.  I am, however, unable to persuade myself to agree with  

the Chief Justice that Section 184 of the Finance Act of 2017 does  

not suffer from the vice of excessive delegation.  I am also of the  

view that though the issue with regard to the Money Bill may be  

referred to a larger bench of 7 judges, since the correctness of the  

law laid down in L. Chandrakumar v. Union of India1 has not  

been doubted, there is no need to refer this matter to a bench of 7  

judges.  

 1 (1997) 3 SCC 261

5    

7. I also feel that some specific directions need to be given for  

appointment of a body to carry out judicial impact assessment.  It  

may also be necessary to lay down some parameters or reference  

points for such a body to look into.  I am of the view that since the  

Government till date has not followed the recommendation of 7-

Judge Bench of this Court in L. Chandra Kumar (supra) that  

there should be a wholly independent agency for the  

administration of all tribunals, some directions in this regard are  

required.  Lastly, I feel that a direction needs to be given to  

constitute a body to select the Chairpersons/Members of the  

Tribunals.  

8. Before entering into a detailed discussion on the issues  

involved, I would like to highlight that there are some glaring errors  

in Part XIV which clearly show non-application of mind.    

9. Section 9A of the Armed Forces Tribunal Act, 2007 was  

introduced by Section 181 of the Finance Act, 2017 and reads as  

follows:  

"9A. Notwithstanding anything contained in this Act, the  

qualifications, appointment, term of office, salaries and  allowances, resignation, removal and terms and conditions  of service of the Chairperson and other Members of the  

Appellate Tribunal appointed after the commencement of  Part XIV of Chapter VI of the Finance Act, 2017, shall be  governed by the provisions of section 184 of that Act:  

6    

    Provided that the Chairperson and Member  appointed before the commencement of Part XIV of  

Chapter VI of the Finance Act, 2017, shall continue to be  governed by the provisions of this Act, and the rules made  

thereunder as if the provisions of section 184 of the  Finance Act, 2017 had not come into force."  

            (emphasis supplied)  

This provides the qualifications, terms and conditions of service  

etc. of Chairpersons and Members of the appellate tribunal.  This  

provision shows total non-application of mind because the Armed  

Forces Tribunal Act, 2007 has no provision for an appellate  

tribunal.  In fact, Section 6 of the Armed Forces Tribunal Act, 2007  

itself provides the qualifications for appointment for Chairperson  

and other members and it is not clear what was sought to be  

achieved by introducing Section 9A by the Finance Act, 2017.       

Background  

10. On 26.11.1949, we, the people of India gave unto ourselves  

the Constitution, the basic features of which amongst others are  

judicial review2, democracy, separation of powers3 etc.  These basic  

features of the Constitution are an inherent part of our  

Constitution and polity.   

 2 Minerva Mills Ltd. v. Union of India, (1980) 2 SCC 591; L. Chandra Kumar v. Union of  

India, (1997) 3 SCC 261  3 Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225

7    

11. Part III of the Constitution which sets out the fundamental  

rights has often been referred to as the heart and soul of the  

Constitution.  In my view, the essence of the Constitution was  

beautifully captured by our founding fathers in the Preamble of the  

Constitution where we promised to ourselves Justice, Liberty,  

Equality and Fraternity.  The first and foremost attribute of the  

Preamble is Justice.  India should be a democratic republic is also  

a part of the Preamble.  The ultimate power under our Constitution  

resides with the people and not those holding positions of power.  

12. The rule of law is the golden thread which runs through our  

Constitution.  This golden thread binds together the various  

chapters of the Constitution dealing with Citizenship,  

Fundamental Rights, the Union, the States, the Panchayats,  

Scheduled and Tribal Areas, Relations between Union and States,  

Trade, Commerce and Intercourse within the Territory of India,  

Services under the Union and States etc.  Each of these facets  

amongst others are governed not only by the Constitution but by  

the laws.  The oath, to which each one of us, holding Constitutional  

posts, subscribes enjoins us to uphold the Constitution and the  

laws.  This is the rule of law.  The bedrock of our democracy is the  

rule of law and not the rule of men.  Anywhere, anytime, when

8    

ordinary people are given the chance to choose, the choice is  

always the same; freedom, not tyranny; democracy, not  

dictatorship; rule of law, not the rule of men.   

13. One of the essential ingredients of both democracy and rule  

of law is an independent and fearless judiciary.  A free and vibrant  

country is one where there is freedom of expression and  

governance by the rule of law.  There can be rule of law only when  

we have judges and adjudicators who can take decisions  

independent of any extraneous influence.    If rule of law is absent,  

there is no accountability, there is abuse of power and corruption.   

When the rule of law disappears, we are ruled not by laws but by  

the idiosyncrasies and whims of those in power.    

14. Tribunals have come to stay.  Both the Chief Justice and  

brother Chandrachud, J. have dealt with the issue of  

tribunalisation in great detail.  One aspect which needs to be  

highlighted and also comes out from the judgments of my learned  

brothers is that the men who man the tribunals should command  

the same respect as the Judges of Courts and they should, as far  

as possible, have the same qualifications and attributes.  This is  

absolutely necessary because if the people of this country are to  

have faith in tribunals then it is the duty of all concerned to ensure

9    

that these tribunals function fairly and independently like Courts  

are expected to.  With the increase in specialisation in different  

branches of law, it would not be possible to urge that we do not  

need specialised tribunals.  No human being can be expected to  

know the entire law.  As judges we are trained to work in various  

fields of law.  At the same time, it cannot be denied that the fast-

changing face of technology and ever-growing demands of the  

people have led to the introduction of thousands of new legislations  

and some of these require specialised knowledge of certain  

branches of law combined with technology.    

15. The courts in India were successfully handling all  

jurisdictions.  The problem was not lack of talent.  The problem  

was not lack of knowledge4.  The main problem was extremely low  

number of judges as compared to the population and a very high  

vacancy position.  Tribunalisation of justice was done not because  

the courts were incapable of handling the matters but mainly  

because there were huge delays in settling matters.  Now even for  

complex commercial matters, specialised commercial courts have  

been set up.  However, at the same time, one cannot deny that in  

the fast-expanding technological world, there is a need to have  

 4 Union of India v. Madras Bar Association, (2010) 11 SCC 1

10    

expert adjudicators.  Therefore, there is a need to have specialised  

tribunals.  These tribunals being substitutes for courts must also  

meet the expectations of our founding fathers and be totally  

independent and fearless.    

16. Unfortunately, the working of some of the tribunals leaves  

much to be desired.   Not all the problems arise because of the  

persons who run the tribunals.  Many difficulties arise because of  

huge vacancies, few benches, financial crunch and dependence of  

the tribunals on the departments, which sadly administer the  

tribunals.  Some of the tribunals are virtually subjugated to the  

departments as far as the administrative matters are concerned  

and this also affects the independence of the judiciary.  Judicial  

independence not only means independence to take the right  

decisions but functional independence is equally important.   

Perceptions are also very important.  What does the litigating  

public appearing before the tribunal feel?  Is the tribunal  

functioning like a wing of the government or as an independent  

body?  If there has to be separation of powers then these tribunals  

must have functional autonomy to run themselves as they best feel  

like.  

11    

17. In this background, I shall deal with the various issues culled  

out by the Chief Justice.  

Issue No.1  

18. I am in total agreement with the Chief Justice in as much as  

he has held that the decision of the Hon’ble Speaker of the House  

of People under Article 110 (3) of the Constitution is not beyond  

judicial review.  I also agree with his views that keeping in view of  

the high office of the Speaker, the scope of judicial review in such  

matters is extremely restricted.  If two views are possible then there  

can be no manner of doubt that the view of the Speaker must  

prevail.  Keeping in view the lack of clarity as to what constitutes  

a Money Bill, I agree with the Hon’ble Chief Justice that the issue  

as to whether Part XIV of the Finance Act, 2017, is a Money Bill or  

not may be referred to a larger bench.  

Issue no. 2  

19. As far as Issue No.2 is concerned, I am unable to agree with  

the conclusion of Chief Justice.  There can be no doubt that  

Parliament is not expected to deal with all matters and it can  

delegate certain “non-essential” matters to the executive.  Every  

condition need not be laid down by the Legislature.   

12    

20. In his judgment the Chief Justice has referred to a catena of  

judgments dealing with limits of delegation.  It is not necessary to  

repeat all that has been said in those judgments but reference may  

be made to a few.  

21. A 7-Judge Bench of this Court in Re Article 143,  

Constitution of India and Delhi Laws Act (1912) etc.5 held that  

the legislature cannot be expected to legislate on all issues and has  

the power to delegate non-essential functions to a delegatee.  At  

the same time, a close reading of the judgment indicates that it  

was clearly held that the “essential legislative functions” cannot be  

delegated.  There can be no quarrel with the proposition that  

delegation of non-essential legislative functions can be done.  Even  

to this there is a caveat.  The legislature must have control and  

functional powers over the delegatee.  One of the known methods  

of exercising such powers is for the delegatee to place the  

rules/orders passed by it in exercise of powers delegated to it  

before the legislature.  There should always be legislative control  

over delegated legislation.    

22. In Gwalior Rayon Mills v. Assistant Commissioner, Sales  

Tax6, Khanna, J. dealt with this matter in his inimitable style.   

 5 AIR (38) 1951 SC 332  6 AIR 1974 SC 1660

13    

Paras 24 and 25 of the judgment have been quoted in the opinion  

of the Chief Justice but I think Para 26 is also very relevant and it  

reads as follows:  

“26. We are also unable to subscribe to the view that if the  legislature can repeal an enactment, as it normally can, it  retains enough control over the authority making the  subordinate legislation and, as such, it is not necessary for  

the legislature to lay down legislative policy, standard or  guidelines in the statute.  The acceptance of this view  

would lead to startling results.  Supposing the Parliament  tomorrow enacts that as the crime situation in the country  has deteriorated, criminal law to be enforced in the  

country from a particular date would be such as is framed  by an officer mentioned in the enactment.  Can it be said  

that there has been no excessive delegation of legislative  power even though the Parliament omits to lay down in the  statute any guideline or legislative policy for the making of  

such criminal law?  The vice of such an enactment cannot,  in our opinion, be ignored or lost sight of on the ground  that if the Parliament does not approve the law made by  

the officer concerned, it can repeal the enactment by which  that officer was authorised to make the law.”     

This makes it clear that merely because the subordinate legislation  

has to be placed before the legislature does not mean that there is  

effective control in all cases.    

23. In Harishankar Bagla v. M.P. State7, the test laid down was  

that there should be a reasonably clear statement of policy which  

should guide formulation of delegated legislation.    

 7 AIR 1954 SC 465

14    

24. In Ramesh Birch v. Union of India8, a Bench of this Court  

clearly held that the legislature cannot wash their hands of their  

essential legislative functions.  It held as follows.  

“19…A different way in which the second of the above  

views has been enunciated — and it is this view which has  dominated since — is by saying that the legislatures  cannot wash their hands of their essential legislative  

function. Essential legislative function consists in laying  down the legislative policy with sufficient clearness and in  

enunciating the standards which are to be enacted into a  rule of law. This cannot be delegated. What can be  delegated is only the task of subordinate legislation which  

is by its very nature ancillary to the statute which  delegates the power to make it and which must be within  

the policy and framework of the guidance provided by the  legislature.”  

By the Finance Act, 2017 the number of tribunals were reduced to  

19.  It is the case of the Government that the tribunals are  

necessary so that technically qualified people can man the  

tribunal. The nature of work done by different tribunals is totally  

different.  The essential qualifications for filling up the posts of  

members of administrative tribunals, company law tribunals or  

the National Green Tribunal would be totally different.  This  

function, in my opinion, being an essential legislative function,  

could not have been delegated especially without laying down any  

guidelines.  

 8 1989 Supp (1) SCC 430

15    

25. Section 184 empowers the Central Government to make rules  

to provide for qualification, appointment term of office, salaries  

and allowances etc. of various Chairperson, Vice-Chairperson,  

Chairman, Vice-Chairman, President, Vice-President, Presiding  

Officer or Member of the Tribunal, Appellate Tribunal or, as the  

case may be, other Authorities as specified in column (2) of the  

Eighth Schedule.  Section 184 of the Finance Act, 2017 reads as  

follows :-  

184. (1) The Central Government may, by notification,  

make rules to provide for qualifications, appointment,  

term of office, salaries and allowances, resignation,  

removal and the other terms and conditions of service  

of the Chairperson, Vice-Chairperson, Chairman, Vice-

Chairman, President, Vice-President, Presiding Officer  

or Member of the Tribunal, Appellate Tribunal or, as  

the case may be, other Authorities as specified in  

column (2) of the Eighth Schedule:  

  Provided that the Chairperson, Vice-

Chairperson, Chairman, Vice-Chairman, President,  

Vice-President, Presiding Officer or Member of the  

Tribunal, Appellate Tribunal or other Authority shall  

hold office for such term as specified in the rules made  

by the Central Government but not exceeding five years  

from the date on which he enters upon his office and  

shall be eligible for reappointment:   

 Provided further that no Chairperson, Vice-

Chairperson, Chairman, Vice-Chairman, President,  

Vice-President, Presiding Officer or Member shall hold  

office as such after he has attained such age as  

specified in the rules made by the Central Government  

which shall not exceed,—  

  (a) in the case of Chairperson, Chairman or  

President, the age of seventy years;

16    

 (b) in the case of Vice-Chairperson, Vice-Chairman,  

Vice-President, Presiding Officer or any other Member,  

the age of sixty-seven years:  

        (2) Neither the salary and allowances nor the  

other terms and conditions of service of Chairperson,  

Vice-Chairperson, Chairman, Vice-Chairman,  

President, Vice-President, Presiding Officer or Member  

of the Tribunal, Appellate Tribunal or, as the case may  

be, other Authority may be varied to his disadvantage  

after his appointment.  

26. An analysis of Section 184 clearly indicates that the  

Parliament has delegated to the Central Government the power to  

make rules to provide for the qualifications, appointment, term of  

office, salaries and allowances, resignation, removal and other  

terms and conditions of the Chairpersons/Members of the  

tribunals.  The issue before us is whether by doing so Parliament  

has delegated “essential legislative functions” and whether  

Parliament has retained any control.  

27. We are in the present case dealing with the appointment of  

Chairpersons/Members to various Tribunals.  They are enjoined  

upon to discharge a constitutional function of delivering justice to  

the people.  What should be the essential qualifications and  

attributes of persons selected to man such high posts is, in my  

view, an essential part of legislative functions.  I have no doubt, in  

my mind, that the Constitution could not have provided that the

17    

qualifications of the Judges of the Supreme Court of India or of the  

High Courts could be fixed by the Government.  If these tribunals  

are to replace the High Courts, why should the same principles not  

apply to them.  In my view, laying down the qualifications of the  

persons eligible to hold these high posts was an essential aspect of  

the legislation keeping in view the importance of the tribunals, the  

importance of rule of law and the importance of an independent  

and fearless judiciary.  

28. As far as providing the qualifications for appointment are  

concerned, as discussed above, I am of the view that these  

qualifications have to be provided in the legislation and could not  

be delegated.  However, as far as the other terms and conditions  

such as pay and allowances are concerned, these can be delegated.  

29. For the sake of argument, even if it was to be said that laying  

down the qualifications is not an essential function then also, in  

view of the law laid down by this Court, the guidelines should have  

been found in the legislation itself.  It is paradoxical that there are  

no guidelines for the essential qualifications, even though there are  

some guidelines with regard to the terms and conditions of services  

of Chairpersons/Members of the Tribunals.   

18    

30. I am in respectful disagreement with the Chief Justice that  

the objects of the parent enactments and the law laid down by this  

Court in R. K. Jain v. Union of India9, L. Chandra Kumar  

(supra), Union of India v. Madras Bar Association10, Madras  

Bar Association v. Union of India11, Madras Bar Association  

v. Union of India12, Gujarat Urja Vikas Nigam Ltd. v. Essar  

Power Ltd.13 in essence should be read as the guidelines.  One  

would expect the Union Government to abide by the directions of  

this Court.  However, this expectation has been belied by this very  

enactment which violates every principle of law laid down by this  

Court and, as held in the judgments of both my brothers, the Rules  

framed by the delegatee are violative of the law laid down by this  

Court.  In this background, it is apparent that both the delegator  

and the delegatee felt that they were not bound by these  

judgments.  This is also apparent from the fact that the Rules  

framed by the delegatee have not been brought in consonance with  

the law by the delegator.  

 9 (1993) 4 SCC 119  10 (2010) 11 SCC 1  11 (2014) 10 SCC 1  12 (2015) 8 SCC 583  13 (2016) 9 SCC 103

19    

31. The previous enactments were repealed in so far as matters  

covered by Part XIV of the Finance Act are concerned.  Therefore,  

it cannot be expected that the delegatee would again refer to the  

repealed enactments to seek the guidelines for fixing the terms and  

conditions, etc. of those to be appointed as  

Chairpersons/Members.  If we exclude the judgments of this Court  

and the terms and conditions laid down in the repealed  

enactments then there are no guidelines whatsoever left for the  

delegatee to fall back on.  The Finance Act provides no guidelines  

in this regard.  It is absolutely silent with regard to the  

qualification, the eligibility criteria, experience etc. required for  

those who are to be appointed as Chairpersons/Members of the  

Tribunals.  These powers have been delegated to the government.    

32. There being no guidelines, unfettered and unguided powers  

have been vested in the delegatee and, therefore, in my opinion,  

there is excessive delegation.  As such, I would hold that Section  

184 of the Finance Act, 2017 insofar as it delegates the powers to  

lay down the qualifications of Chairperson, Vice-Chairperson,  

Chairman, Vice-Chairman, President, Vice-President, Presiding  

Officer or Member of the Tribunal, Appellate Tribunal or, as the  

case may be, other Authorities as specified in column (2) of the

20    

Eighth Schedule, suffers from the vice of excessive delegation and  

is accordingly struck down.   

Issue Nos. 3 & 6   

33. I agree with the Chief Justice and I do not want to add  

anything.  

Issue Nos. 4, 5, 7 & 8  

34. I agree with the Chief Justice both on the reasoning and  

conclusions on these issues.  However, as already pointed out  

above, I am of the view that since nobody has raised a challenge to  

the correctness of the law laid down by 7-Judge Bench in L.  

Chandra Kumar (supra) that there should be one wholly  

independent agency for the administration of all the tribunals.  

There is no need to refer this issue to a Bench of 7 Judges.   

35. However, I would like to add a few words because I feel that  

it is important to highlight the problems being faced and the issues  

which need to be resolved by the body which will carry out the  

judicial impact assessment of the tribunals in the form of a  

Judicial Impact Assessment Committee.  I am clearly of the view  

that as laid down in L. Chandra Kumar (supra), there must be a  

single independent nodal agency for administering all the

21    

tribunals.  The 7-Judge Bench of this Court held that all tribunals  

should as far as possible be under a single nodal agency.  Until  

such a nodal agency is set up it was felt that the Ministry of Law  

and Justice would be the most appropriate Ministry for this  

purpose.    

36. There are various reasons why there should be one nodal  

agency.  Tribunals are facing many problems like lack of  

manpower, very few benches, vacancies lying unfilled for long  

period, financial dependence on the department which may be  

litigating before the tribunal etc.  These are ills which can be  

avoided if Tribunals fall under one umbrella organisation.  One  

umbrella organisation will be better equipped to understand the  

problems faced by all the Tribunals. This could lead to  

standardization of Tribunals and a uniform approach to the needs  

of each tribunal.  A large number of tribunals, especially those cast  

with the duty of discharging adjudicatory functions have been  

constituted with a view to replace the courts and in many cases  

the jurisdiction earlier exercised by the High Courts has been  

vested in such tribunals.  It is, therefore, imperative that these  

tribunals must be manned by persons of impeccable integrity, high  

intellect and having vast experience in the field in which they will

22    

exercise jurisdiction. These tribunals also must have functional  

autonomy.  This cannot be achieved unless there is a nodal body  

which shall look after the administrative needs of the tribunals.    

For more than 2 decades the Government has not thought it fit to  

comply with the 7-Judge Bench judgment of this Court in L.  

Chandra Kumar (supra).  These matters cannot be permitted to  

linger on indefinitely.  Therefore, in my view, a direction must be  

given to the Government to set up a single nodal agency within a  

period of 6 months from today till which time the present system  

may continue.  Merely giving financial autonomy to the tribunals  

will not do away with the need of having one common umbrella  

organisation to supervise all the tribunals.   

37. Even without carrying out any judicial impact assessment it  

is clear, as held in Madras Bar Association, 2010 (supra) that  

tribunals in India have unfortunately not achieved full  

independence.  When tribunals are established, they depend upon  

the sponsoring department for funds, infrastructure and even  

space for functioning.  Administrative members of the tribunal are,  

more often than not, drawn from this department.  This, in my  

opinion, strikes at the very root of judicial independence because  

the biggest litigant or stakeholder itself becomes part and parcel of

23    

the adjudicating body which is supposed to be free, independent  

and fearless.    

38. The need for carrying out judicial impact assessment of all  

the tribunals in India cannot be over emphasised.  Experience has  

shown that the tribunals are not fully independent and more often  

than not, the number of vacancies in the tribunals are so high as  

to make the tribunals dysfunctional if not non-functional.  The  

promised benches remain a mirage in the air and the litigants from  

remote areas of the country have to come to the State capitals or  

the National Capital for redressal of their grievances.    

39. Access to justice is a fundamental right14.  Denial of access  

to justice also takes place when a litigant has to spend too much  

money, time and effort to approach the adjudicating authority to  

get justice.  In India where delays plague the tribunals, a client will  

not hurriedly approach a tribunal even if he has a genuine  

grievance.  Amongst the many tribunals set up, the tax tribunals  

have been probably the most successful.  In my view, one of the  

reasons why the tax tribunals have been successful is that the  

recruitment of members of these tax tribunals is normally done at  

 14 Anita Kushwaha v. Pushap Sudan, (2016) 8 SCC 509

24    

a younger age and there is scope of career progression not only  

within the tribunal but also from the tribunals to the High Courts.   

This can only happen if we recruit younger and competent people  

rather than retired persons. Another reason for the success of the  

tax tribunals is that the litigant is either the revenue or an  

assessee, both of whom have the wherewithal to fight cases.   

Similarly, in administrative tribunals it is government servants  

mainly who are involved.  Commercial tribunals also deal with the  

litigants who normally have sufficient finances.  But now we have  

other tribunals like the NGT which may be approached by poor  

villagers.    

40. The Central Administrative Tribunal (CAT) was set up in the  

year 1985.  It can definitely be termed as one of the better  

functioning tribunals.  However, even this tribunal has only 17  

regular benches including the Principal Bench at Delhi and 4  

Circuit Benches.  Prior to the establishment of the CAT, a Central  

Government employee had a right to move the Civil Courts for  

grant of relief.  This meant that such employee could even  

approach a Sub-Judge for grant of relief.  That jurisdiction has  

been taken away. In L. Chandra Kumar (supra), while upholding  

the constitution of the tribunals, a 7-Judge Bench of this Court

25    

held that the orders of the tribunals would be amenable to judicial  

review under Article 226 of the Constitution albeit with a caveat  

that these matters would be decided by a Division Bench.    

41. The vacancy position even in the CAT is very high.  Out of a  

total strength of 65 members, the CAT is short by 25 members –  

12 administrative members and 13 judicial members.  This is a  

shortage of about 38%.  The Chandigarh Bench of the tribunal is  

supposed to have 4 members.  However, presently there is only 1  

judicial member and as such there is no bench available in  

Chandigarh.  The Chandigarh Bench has jurisdiction over the  

States of Punjab, Haryana, Himachal Pradesh and Union  

Territories of Jammu and Kashmir, Ladakh and Chandigarh.  The  

Central Government employees in these areas have virtually been  

left remediless.   It is easy for the members of the All India Civil  

Services holding high positions to approach the Principal Bench at  

Delhi, but one cannot even imagine the plight of a lowly placed  

peon or clerk who is expected to travel long distances to New Delhi,  

spend huge amount of money, pay the extremely high fees of the  

lawyers of a metropolis like Delhi to file a case in Delhi.  Such a  

litigant is financially boarded out of the litigation process.  

26    

42. To give another example, the NGT was to have its Principal  

Bench at Delhi and 4 Zonal Benches and 4 Circuit Benches.  It  

was expected that in the future more benches would be added.   

Sadly, the reverse has taken place.  At the present moment, only  

the Principal Bench is functioning with only one Chairperson and  

3 judicial members (as against the sanctioned strength of 20  

judicial members), and two expert members (as against the total  

sanctioned strength of 20 expert members).  The situation is  

extremely grim.  Day in and day out we all talk about pollution and  

the environment but the harsh reality is that as against a  

Chairperson and 40 members, at present the Chairperson has the  

assistance of only 5 members.  The result is that no hearings are  

taking place in the Zonal Benches or the Circuit Benches.  We have  

been informed that cases are taken up by video conferencing.   

Video conferencing can definitely be used as a tool to hold hearings  

in some cases but initial filing and hearings must as far as possible  

be done in open Court if the public is to have faith in the  

institution.  Open hearings are essential to build trust and  

confidence in the community.  Members of the public will have  

faith only in those tribunals and courts which are open to the  

public.  Presently, the situation is such that if someone from