Finance Act issue referred to larger bench
New Delhi, Nov. 13: In a blow to the government, the Supreme Court on Wednesday struck down in entirety the rules formulated by the Centre on appointment and service conditions for members of various tribunals, and referred to a larger bench the issue of examining the validity of the passage of the Finance Act 2017 as Money Bill which was vigorously opposed in Parliament by Opposition parties.
The questions the apex court framed for consideration included 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.
The top court held that Section 184 of Finance Act, 2017, which empowers the Centre to frame rules relating to appointment and service conditions of members of various tribunals, does not suffer from excessive delegation of legislative functions as there are adequate principles to guide its framing.
However, a 5-judge Constitution bench, headed by Chief Justice Ranjan Gogoi, said: “Tribunal, Appellate Tribunal and other Authorities (Qualifications, Exper-ience 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 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.”
The apex court directed the Centre to re-formulate the rules strictly in conformity and in accordance with the principles delineated by it.
The bench, also comprising Justices N.V. Ramana, D.Y. Chandrachud, Deepak Gupta and Sanjiv Khanna, said the new set of rules to be formulated by the government should 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”.