Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL)NO. 15804 OF 2017
ROJER MATHEW …PETITIONER
VERSUS
SOUTH INDIAN BANK LIMITED AND ORS …RESPONDENTS
O R D E R
1. Restructuring of Tribunal System in the light of
constitutional scheme as interpreted in decisions of
this Court and the Expert Studies is the issue for
consideration. Concept of Tribunals was evolved to
decongest the court system and to provide speedy and
inexpensive justice. Separation of powers and
independence of judiciary are the constitutional
concepts which have to be followed in setting up of
Tribunals. Functioning of Tribunals is required to be
reviewed on the test of speedy and inexpensive quality
justice.
1
2. In R.K. Jain versus Union of India , a Bench of
Signature Not Verified
this Court called for taking stock of the situation of
Digitally signed by
MADHU BALA
Date: 2018.05.08
16:38:05 IST
Reason:
2
working of Tribunals . It was observed that the
1
(1993) 4 SCC 119
2
Para8
2
personnel appointed to man the Tribunals discharge
judicial/quasi judicial powers and thus, persons who
adjudicate upon such powers must have legal expertise,
3
judicial experience and legal training . Independence
4
of judiciary is a must for fair justice .Institution of
Tribunals being a substitute for courts could not be
less effective than the courts to uphold faith of
5
litigant public . The Court expressed anguish over
ineffectivity of alternative mechanism for judicial
review. It was observed that dispensing of justice by
Tribunals leaves much to be desired. Remedy of appeal
to this Court was costly and prohibitive and people in
far flung areas could ill afford to reach this Court.
Members of the Bar should be recruited to man the
Tribunals and working of Tribunals may need fresh look
6
and regular monitoring .
7
3. In L. Chandra Kumar versus Union of India , a
Bench of 7-Judges referred to the reports of Expert
Committees and Commissions which dealt with the problem
th
of arrears. 124 Report of the Law Commission (1988)
analyzed the situation existing in High Courts and
recommended specialized Tribunals. The Malimath
Committee Report (1989-1990) noted that not all the
Tribunals inspired confidence in public mind on account
3
Para 67
4
Para 68
5
Para 70
6
Para 76
7
(1997) 3 SCC 261
3
of lack of competence, objectivity and judicial
approach. Constitution, power and method of appointment
8
needed to be reviewed . This Court noted that various
Tribunals have not evolved up to the expectations which
is self evident and widely acknowledged. Drastic
9
measures were required to elevate the standards .
Exclusion of judicial review by High Courts and direct
appeals to this Court was too costly and inaccessible
and thus ineffective. The decisions of the Tribunals
should be amenable to scrutiny before a Division Bench
10
of the High Court . Short tenure of members of Tribunal
was not proper. Non judicial members must have judicial
11
experience . There was need to review the competence of
persons manning the Tribunals and oversight mechanism.
Wholly independent agency was required for
administration of all the Tribunals. A single umbrella
organization could remove the ills of the present
12
system .
4. In Union of India versus R. Gandhi, President
13
Madras Bar Association , the Constitution Bench
observed that if Tribunals are to be given judicial
power which was earlier exercised by courts, they must
possess independence, security and capacity associated
8
(paras 8.63 to 8.66 as quoted in para 88 of L. Chandra Kumar)
9
Para 89
10
Para 92 to 94
11
Para 95
12
Para 96
13
(2010) 11 SCC 1
4
with courts. When the jurisdiction from courts is
transferred to tribunals, members of judiciary should
be the presiding officers/members such as Rent
Tribunals, Motor Accident Claims Tribunals and Special
Courts. Provision for technical members in addition to
or substitution of judicial members would be a case of
dilution of and encroachment upon independence of
14
judiciary . Technical members could be in addition to
judicial members only when a specialized knowledge or
expertise was a must. The legislature could constitute
Tribunals but there is limitation of power on the
legislature to prescribe qualifications and such
limitation has to be read into the competence of the
15
legislature to provide such qualifications . Standards
expected from judicial members and standards applied
for appointment should be as nearly as possible same as
applied to appointment of judges who are sought to be
16
substituted . Experience of administration may make a
member of civil service a good administrator but not
17
necessarily an able and impartial adjudicator . There
was gradual erosion of independence of judiciary and
shrinking of the space occupied by the judiciary and
increase in number of persons belonging to civil
service discharging functions which were earlier
14
Para 90
15
Para 93
16
Para 108
17
Para 109
5
18
exercised by courts which was needed to be checked .
5. In Madras Bar Association versus Union of India
19
(2014) , it was observed that the newly constituted
Tribunals will be invalidly constituted unless its
members are appointed in same manner and are entitled
to same conditions of service as were available to the
20
judges of the courts sought to be substituted .
Constitution Bench of this Court observed that setting
up of a Tribunal with seat at Delhi may deprive the
litigants convenience of access to justice. Litigants
may have to face hardship of travelling long distance
21
and incur heavy expenses . It should be inappropriate
for the Central Government to have any administrative
dealings with the persons or its members to uphold
22
their independence and fairness. Appointment of non
judicial members may constitute dilution and
encroachment upon independence of judiciary and rule of
law. The accountant members or technical members could
not handle complicated questions of law. The judicial
members are to handle substantial questions of law.
Mere technical knowledge or knowledge of accounts was
23
not enough . Manner of appointment of members of
Tribunals should be by same procedure as appointment of
18
Para 112 and 120
19
(2014) 10 SCC 1
20
Para 113.2
21
Para 122
22
Para 124
23
Paras 126-127
6
judges who are substituted. Only a person possessing
professional qualification of law with substantial
experience in law may be able to handle such issues.
Manning of Tribunals which are substitute for court of
first instance was different from those who are not
24
subservient to the High Courts . A party to the
litigant should not participate in the selection
25
process of members of the adjudicating body .
6. In Madras Bar Association versus Union of
26
India (2015) observations with regard to safeguarding
dilution of standards in appointments of tribunals were
27
reiterated .
7. In Gujarat Urja Vikas Nigam Limited versus Essar
28
Power Limited , the observations in earlier judgments
in L. Chandra Kumar and Madras Bar Association (supra)
were reiterated to the effect that remedy of appeal to
this Court was too costly and inaccessible. Further,
overcrowding of docket of this Court obstructed key
constitutional role of this Court. Composition of the
appellate Tribunal dealing with questions of law being
manned by non judicial members was not desirable which
29
called for a review of composition of such Tribunals .
24
Para 130
25
Para 131
26
(2015) 8 SCC 583
27
Paras 27 and 28
28
(2016) 9 SCC 103
29
Paras 30-40
7
Accordingly, this Court framed certain questions to be
examined by the Law Commission. The Law Commission has
nd
submitted its 272 Report inter alia recommending
restructuring of Tribunals so as not to provide direct
appeal to this Court. It was also observed that the
manner of appointment, eligibility, tenure and other
privileges of persons manning Tribunals must be at par
with the persons manning courts sought to be
substituted. The selection procedure must ensure
independence of judiciary. All Tribunals should be
placed under a single umbrella for proper monitoring.
th
8. 74 Report of the Parliamentary Standing
Committee considered a draft Bill for Uniform Service
Conditions of members of the Tribunals.
9. In the above background, when the present matter
th
came up for hearing on 24 October, 2017 it was pointed
out that appointment, norms and functioning of Debt
Recovery Tribunals was not consistent with the
observations of this Court in various judgments.
Accordingly, the court requested Shri Arvind P. Datar
learned senior counsel to assist the court as amicus.
th
On 6 December, 2017, the Court had an interaction with
the Attorney General on the issue of restructuring of
Tribunals specially creation of a regular cadre to man
the Tribunals.
th
10. On 15 March, 2018, learned amicus gave a
Concept Note. It was also submitted that short term
8
appointments out of retired persons was not conducive
to the justice delivery by the Tribunals. The Tribunals
must be manned by a regular cadre. Selection should be
by a national competition by an expert autonomous body.
Oversight mechanism must be vested with an autonomous
body. There should be no statutory appeal directly to
this Court as it hampered access to justice, litigation
in this Court being costly and difficult for a litigant
located at far off places.
11. Accordingly, this Court recorded that revisit of
the structure of tribunals was necessary to uphold the
rule of law and independence of judiciary. The Central
Government was directed to file its response. 12.
th
Again on 4 April, 2018, following further issues
were noted :
“i) How to remedy the handicap in access
to justice when a Tribunal has only one
seat for its working to the exclusion of
jurisdiction of all other courts in the
country as noted in Gujarat Urja Vikas
Nigam Limited versus Essar Power Limited,
(2016) 9 SCC 103 para 34. In such cases,
question is whether jurisdiction of the
Tribunal can be conferred on a specified
court nominated by the High Court in each
of the State or, where work of such nature
may be insignificant in some States, on
one officer in more than one States.
ii) Whether ‘Access to Justice
Facilitation Centres’ (AJFCs), with or
without private participation, can be set
up at convenient locations in the country
from where a party can access a Court or
Tribunal located at long distance with or
without payment of such specified charges.
Such centres may also have facilities for
e-filing and such other services as may
facilitate a party for participation in
9
proceedings. This may enhance access to
justice and obviate need for travelling
long distances, particularly if such
parties are in remote areas.
iii) Whether in absence of availability of
suitable persons of statutorily prescribed
qualifications to man
Tribunals/Commissions, pending filling up
of vacancies, such Tribunals/Commissions
can be manned by existing courts 3 in
consultation with the High Courts.
Needless to say that servicing officers
are duly selected and accountable in the
matter of performance and discipline.
iv) Whether power of Commissions/Tribunals
having overlapping jurisdiction such as
Human Rights Commissions, having only one
seat in a State, can be conferred on
specified courts in one or more districts,
in addition to or in substitution of such
Commission, so as to make access to
justice available at the grass root.”
13. Accordingly, an affidavit has been filed by the
Union of India. The affidavit inter alia refers to
Finance Act, 2017 dealing with the appointment
procedure for the Tribunals and a petition challenging
the same in this Court. It is submitted that the
matter being sub judice this was not a stage to revisit
the issue of manning of Tribunals.
14. The affidavit does not deal with working of all
the Tribunals and is confined to the Debt Recovery
Tribunals. It is presumed that system of Debt Recovery
Tribunal was far more efficient than the system of
courts. It is stated that as on 30.09.1990 more than
15 lakh bank cases were pending in courts but as on
31.03.2017 only 78,961 cases were pending before 39
Debt Recovery Tribunals. It is however concluded that
10
Union of India was not averse to revisit the issue of
access to justice.
15. Learned amicus pointed out that the affidavit of
Union of India does not deal with the issues raised in
these proceedings. The assumption in the affidavit in
comparing the working of courts and Tribunals was not
based on entire relevant data. Reference to 15 lakh
cases appears to be reference to all the cases, while
reference to pendency before Tribunals is only in cases
involving more than 10 lakhs. Moreover, the data of
yearly institution and disposal has not been furnished
to compare the rate of disposal. Longest period of
pendency before different Tribunals is also not
indicated.
16. Learned amicus referred to the concept note to
the effect that there was need for an independent
oversight body in the light of observations in L.
Chandra Kumar (supra) which have been reiterated in
NCLT case (Madras Bar Association) (2015) (supra) to
the effect that the Tribunals or their members should
not be required to seek facilities from the sponsoring
th
or parent ministries or concerned departments. 74
Report of the Parliamentary Standing Committee also
recommended creation of a National Tribunal Commission
to oversee all the Tribunals in the country.
Accordingly, it has been suggested that an independent
body called National Tribunal Commission (NTC) should
11
be constituted as follows :
A. Two retired Supreme Court Judges (with the
senior-most amongst them to be Chairman)
B. Two retired High Court Judges (Members)
C. Three members representing the Executive.
The appointment of members of the NTC should be by
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.
17. 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 concept note also deals with further
details on the subject. Further suggestion is that 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
heaven 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. There is also suggestion that bypassing of
High Court jurisdiction under Article 226/227 needs to
be remedied by statutory amendment excluding direct
12
appeals to this Court. There should be proper mechanism
for removal of members.
18. 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
13
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.
19. To sum up, the issues requiring consideration
may be as under :
(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.
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 recommendations of
expert bodies. This exercise must be undertaken in a
time bound manner
To consider the matter for further, list on
14
th
Thursday i.e. 10 May, 2018 as prayed by learned
Attorney General.
…………………………………..J.
[ ADARSH KUMAR GOEL ]
…………………………………..J.
[ INDU MALHOTRA]
NEW DELHI;
MAY 07, 2018.