The tale of two tribunals OUT OF COURT
The Supreme Court warns of shrinking space for judiciary and dilution of standards
The judiciary appeared to be jealously defending itself against the onslaught of the legislature and the executive in the past few weeks. Before a Constitution bench, the government assailed the collegium system invented by Supreme Court to select judges. The government wants to replace it with a six-member committee, including political nominees. The arguments in the case are to resume in June. The stakes are so high that judges have cancelled their traditional summer vacation.
Then there is the story of two tribunals. The court defended itself this time from the executive, which had consistently attempted to nibble at judicial powers while setting up tribunals. The latest round of legal battle before another Constitution bench was over the composition of the National Company Law Tribunal. These tribunals are expected to replace the Company Law Board and the Board for Industrial & Financial Reconstruction.
The old Companies Act was amended in 2004 to establish these tribunals. However, they gave undue representation to civil servants who have no judicial experience. Those who drafted the rules were accused of creating sinecure for themselves. The Madras Bar Association challenged the scheme. In 2010, the Supreme Court struck down several provisions and suggested significant changes to give prominence to judiciary.
In 2013, a new Companies Act was passed but the changes were not incorporated. This led to the new round of litigation by the same petitioner ( Madras Bar Association vs Union of India). Last week, the court insisted on amendments to give due place to the judges.
The establishment of these quasijudicial forums is already delayed by over a decade because of the reluctance of the bureaucracy to amend the rules to make it in line with the Constitution bench judgments. It has behaved like a person pretending to sleep, refusing to open eyes to the court declarations. They seem to be impervious to the consequences to the economy.
A few months ago, the court had struck down the National Tax Tribunal Act, 2005, but the government has not done a thing about bringing in a new law. The 2005 Act was struck down as it was the “ultimate encroachment on the exclusive domain of the superior courts.” There is yet another case pending before a Constitution bench challenging tribunalisation.
This tussle between the government and the judiciary has been going since the 1990’s when tribunals began to be set up to ease the burden on the regular courts. Almost each time a major tribunal was proposed it was caught in legal challenges of the same nature: civil servants would want to wear the judicial hat and the judges would fling it. The mandarins claim expertise in technical fields, which they do not find in the judiciary. The latter claims that they adjudicate on all matters from Deities’ rights to spectrum and patents.
“Whether the tribunals should have only judicial members or a combination of judicial and technical members is for the legislature to decide,” the court said last week, “but if there should be technical members, they should be persons with expertise in company law or allied subjects and mere experience in civil service cannot be treated as technical expertise in company law.”
In the 1994 case relating to administrative tribunals, the court had drawn the parameters for tribunals. However, the executive and the legislature have not heeded them, stalling the establishment of company law and tax tribunals which are vital to economy. As a result, many jurists doubt the usefulness of tribunals. One additional reason why they are cynical is the financial crunch inflicted by the government, affecting the infrastructure, staff position and vacancies on the bench.
The court reiterated last week that “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 high courts. 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.” These are serious concerns not only for judiciary but also for the nation.