Holding

The Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 are struck down as they violate the constitutional principles of judicial independence and separation of powers.

Summary

The Finance Act, 2017, through Part XIV, amended 25 enactments to merge tribunals and delegate rule-making power to the Central Government regarding qualifications, appointment, and service conditions of tribunal members. The Supreme Court considered whether Part XIV could be passed as a Money Bill under Article 110, but referred this issue to a larger bench due to potential conflict with the K.S. Puttaswamy (Aadhaar-5) judgment. Section 184 of the Act was held not to suffer from excessive delegation as adequate guidelines existed from prior judicial decisions. However, the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 were struck down in entirety for violating judicial independence and the constitutional scheme. The Court found that the Rules gave excessive executive control over appointments, qualifications, removal, and tenure of tribunal members, diluting the judicial character of tribunals. Various directions were issued for re-framing the Rules, conducting a judicial impact assessment, amalgamating tribunals, and removing direct appeals to the Supreme Court. The Court also held that tribunal members cannot be equated with constitutional court judges in rank and status. The petitions were disposed of with these findings and directions.

Issues considered

Whether the Finance Act, 2017, insofar as it amends certain enactments and alters conditions of service of tribunal personnel, can be termed a 'Money Bill' under Article 110 and is validly enacted?
Whether Section 184 of the Finance Act, 2017 is unconstitutional on account of excessive delegation?
Whether the 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 decisions of this Court?
Whether there should be a single nodal agency for administration of all tribunals?
Whether there is a need for conducting a judicial impact assessment of all tribunals in India?
Whether judges of tribunals set up under Articles 323-A and 323-B can be equated in rank and status with constitutional functionaries?
Whether direct statutory appeals from tribunals to the Supreme Court ought to be detoured?
Whether there is a need for amalgamation of existing tribunals and setting up of benches?

Legislation cited

Constitution of Indias. 110, s. 122, s. 136, s. 226, s. 227, s. 323A, s. 323B
Finance Act, 2017s. 158, s. 159, s. 160, s. 161, s. 162, s. 163, s. 164, s. 165, s. 166, s. 167, s. 168, s. 169, s. 170, s. 171, s. 172, s. 173, s. 174, s. 175, s. 176, s. 177, s. 178, s. 179, s. 180, s. 181, s. 182, s. 183, s. 184, s. 185, s. 186
Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017s. 11, s. 18, s. 20, s. 3, s. 4, s. 7, s. 8, s. 9

Subjects

Money BillArticle 110TribunalsFinance Act 2017Excessive DelegationJudicial IndependenceSeparation of PowersSearch-cum-Selection CommitteeQualifications of MembersRemoval of MembersDirect Appeals to Supreme CourtJudicial Impact AssessmentNodal Agency for TribunalsAmalgamation of Tribunals

Judgment

[2019] 16 S.C.R. 1 1

ROJER MATHEW A
v.
SOUTH INDIAN BANK LTD. & ORS.
(Civil Appeal No. 8588 of 2019)
NOVEMBER 13, 2019 B
[RANJAN GOGOI, CJI, N. V. RAMANA,
DR D. Y. CHANDRACHUD, DEEPAK GUPTA
AND SANJIV KHANNA, JJ.]
Tribunals – Finance Act, 2017 – Finance Act, 2017, a C
‘money bill’ or not u/Art.110 – Validity of the Act, 2017 – Held:
The majority in K.S. Puttaswamy (Aadhaar-5) pronounced the
nature of the impugned enactment without first delineating the
scope of Art.110(1) and principles for interpretation or the
repercussions of such process – The majority dictum in K.S.
Puttaswamy (Aadhaar-5) did not substantially discuss the effect of D
the word ‘only’ in Art.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 Art. 110 (1)
(a) (b) – Without expressing a firm and final opinion, the analysis
in K.S. Puttaswamy (Aadhaar-5) made its application difficult to E
the present case and raises a potential conflict between the
judgments of Coordinate Benches – Being a Bench of equal
strength as that in K.S. Puttaswamy (Aadhaar-5), the batch of
matters directed to be referred to the Larger Bench.
Tribunals – Finance Act, 2017 – S. 184 – Constitutionality F
of s. 184 on account of excessive delegations – Held s.184 does
not suffer from excessive delegations of legislative functions as
there are adequate principles to guide framing of delegated
legislation, which would include the binding dictums of the
Supreme Court – The objects of the parent enactments as well as G
the law laid down by the Supreme Court in R.K. Jain, L. Chandra
Kumar, R. Gandhi, Madras Bar Association and Gujarat Urja
Vikas undoubtedly bind the delegate and mandatorily requires the
delegate u/s. 184 to act strictly in conformity with these decisions
and the objects of delegated legislation stipulated in the statutes. H
1
2 SUPREME COURT REPORTS [2019] 16 S.C.R.

A Tribunals – The Tribunal, Appellate Tribunal and other
Authorities (Qualifications, Experience and other Conditions of
Service of Members) Rules, 2017 – Conformity of the Rules with
the judicial principles inherent in the Constitutional scheme as
established by the Supreme Court – Held: The composition of the
search-cum-Selection Committees under the Rules amounts to
B
excessive interference of the Executive in appointment of members
and presiding offices of statutory Tribunals and it is detrimental
to the independence of Judiciary – In addition to this, there has
been a blatant dilution of judicial character in appointments
whereby candidates without any judicial experience are prescribed
C to be eligible for adjudicatory posts such as that of the presiding
Officer – Therefore, the Rules have an effect of dilution of the
judicial character in adjudicatory positions – Further, earlier
removal of members or presiding officer was done after an enquiry
by the Supreme Court Judges and with necessary consultation with
the Chief Justice of India, under the present Rules it is permissible
D
for the Central Government to appoint an enquiry Committee for
removal of any presiding officer or member on its own – The
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 – Also,
E there must be uniform age of superannuation for all members in
all the Tribunals, the Rules demonstrate disparity in age of
superannuation of Members and Chairpersons/Presiding Officers
of different Tribunals – Furthermore, there is 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
F
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 – Therefore, the Rules suffer from various
infirmities and are contrary to the Parent enactment and the
G principles envisaged in the Constitution, resultantly, directed to be
struck down in entirety.
Tribunals – Finance Act, 2017 – Whether there should be a
single Nodal Agency for administration of all Tribunals – Held: It
may not be very crucial as to which Ministry or Department
H performs the duties of Nodal Agency for a Tribunal, but what is
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 3

of utmost importance is that the Tribunal should not be expected A
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.
Tribunals – A Judicial Impact Assessment of all tribunals in B
India – Need for – Held: It was directed in Salem Advocate Bar
Association (II) v. Union of India for a Committee to be constituted
to assess the need for Judicial Impact Assessment – Pursuant
thereto, Jagannadha Rao Committee Report was submitted, it
suggested that legislature must analyse the budgetary requirement
of the staff, additional expenditure arising out of the new cases C
consequent to the enactment, the number of Civil and Criminal
Cases expected to arise from the new enactment, the requirement
of Judges etc. – The legislature has not conformed to the opinion
of the Supreme Court with respect to ‘Judicial Impact Assessment’
and thus, has not made any attempt to assess the ramifications of D
the Finance Act, 2017 – Therefore, the Union of India directed to
carry out Financial Impact Assessment in respect of all the
Tribunals referable to ss. 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. E
Tribunals – Judges of Tribunals set up by Acts of Parliament
under Arts. 323-A and 323-B of the Constitution equated in ‘Rank’
and ‘Status’ with constitutional functionaries – Held: There can be
no doubt that executive action cannot confer status equivalent to
that either Supreme Court or High Court Judges on any member F
or head of any Tribunal or other judicial fora – 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.
Tribunals – Direct Statutory appeals from Tribunals to the G
Supreme Court – Consideration of – Held: 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 – It is evident that
Supreme Court has lost its original character owing to the routine H
4 SUPREME COURT REPORTS [2019] 16 S.C.R.

A hearing of appeals through invocation of the discretionary
jurisdiction u/Art. 136 – 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 Supreme Court has adequate time
to apply its mind and consider matters in depth the practice of
B bringing every second case before the Supreme Court u/Art. 136
must be deprecated – Therefore, the Union of India in 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
C instead provide appeals to Division Benches of the High Courts,
if at all necessary.
Tribunals – Amalgamation of Existing Tribunals and setting
up of Benches – Need for – Held: The ‘importance’ in distribution
of case-load and inconsistencies in nature, location and
functioning of Tribunals require urgent attention – It is essential
D
that after conducting a Judicial Impact Assessment, Tribunals be
amalgamed with others dealing with similar areas of law, to ensure
effective utilisation of resources and to facilitate access to justice
– Therefore, the Union Government directed to carry out an
appropriate exercise for amalgamation of existing Tribunals
E 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.
Tribunals – Tribunalisation – A global trend – Discussed.
Disposing of the Petition, the Court
F
HELD : PER RANJAN GOGOI, CJI (FOR HIMSELF
AND N.V. RAMANA, DR. D.Y. CHANDRACHUD, DEEPAK
GUPTA AND SANJIV KHANNA, JJ.)
1. ISSUE I : WHETHER THE ‘FINANCE ACT, 2017’
INSOFAR AS IT AMENDS CERTAIN OTHER ENACTMENTS
G 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?
1.1 Provisions of Part XIV can be broken down into three
H broad categories. First, abolition and merger of existing
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 5

Tribunals; second, uniformizing and delegating to the Central A
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
B
now become de-funct. [Para 112] [85-A-B]
1.2 Upon an extensive examination of the matter, this Court
notices 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 C
interpretation or the repercussions of such process. It is clear
to this Court 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 D
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 E
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) makes its application difficult to the
present case and raises a potential conflict between the
judgements of coordinate Benches. [Para 122] [90-A-D] F
1.3 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. G
Being a Bench of equal strength as that in K.S. Puttaswamy
(Aadhaar-5), this Court 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.
[Para 123] [90-E]
H
6 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 1.4 There is yet another reason why this Court feel the
matter should be referred to a Constitution Bench of seven
judges. L. Chandra Kumar, 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
B
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
C 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,
D
under 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
E 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. [Para 124] [90-F-H; 91-A-B]
2. ISSUE II: WHETHER SECTION 184 OF THE
F FINANCE ACT, 2017 IS UNCONSTITUTIONAL ON
ACCOUNT OF EXCESSIVE DELEGATION?
2.1. It will be difficult to hold that Part XIV of the Finance
Act suffers from the vice of unguided delegation as it fails to
clearly specify the eligibility qualifications for the Members,
G Chairpersons, Chairman etc. of different Tribunals as such
requirements, though important, are not per se functionally
undelegatable. [Para 142] [103-F-H]
2.2 The objects of the parent enactments as well as the
law laid down by this Court in R.K. Jain, L Chandra Kumar, R.
H Gandhi, Madras Bar Association and Gujarat Urja Vikas
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 7

undoubtedly bind the delegate and mandatorily requires the A
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
B
and foundation of such decisions by enacting the Finance Act.
Indeed, the 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. [Para 143] [104-
A-C]
C
2.3. 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, this Court does not think that the power to prescribe
qualifications, selection procedure and service conditions of
members and other office holders of the tribunals is intended D
to vest solely with the Legislature for all times and purposes.
Policy and guidelines exist. Subject to aforesaid, the submission
of 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
E
different tribunals carries weight and, needs to be accepted.
[Para 148] [107-C-D]
2.4 Cautioning against the potential misuse of Section 184
by the executive, it was vehemently argued by the petitioner(s)
that any desecration by the Executive of such powers threatens
F
and poses a risk to the independence of the tribunals. A mere
possibility or eventuality of abuse of 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 G
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. [Para 149] [107-E-G] H
8 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 3. 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
B
DECISIONS OF THIS COURT ON FUNCTIONING OF
TRIBUNALS?
3.1 (A) Composition of Search-cum-Selection Committees
3.1 (1) The composition of the Search-cum-Selection
C 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. [Para 154] [118-
D C]
3.1 (2) This Court is in complete agreement with the
analogy elucidated by the Constitution Bench in the Fourth
Judges Case for compulsory need for exclusion of control of the
Executive over quasi-judicial bodies of Tribunals discharging
E responsibilities akin to Courts. The Search-cum-Selection
Committees as envisaged in the Rules are against the
constitutional scheme inasmuch as they 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. [Para 158] [121-D-F]
F
3.2 (B) Qualifications of members and presiding officers
3.2 (1) There has been a blatant dilution of judicial
character in appointments whereby candidates without any
judicial experience are prescribed to be eligible for adjudicatory
G posts such as that of the Presiding Officer. [Para 160] [122-E]
3.2 (2) The contentions of the 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
H in a catena of decisions that judicial functions cannot be
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 9

performed by technical members devoid of any adjudicatory A
experience. [Para 161] [121-B]
3.2 (3) This Court concurs with 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 B
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 C
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. [Para 163] [127-D-F]
D
3.2 (4) 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 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 E
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 F
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 G
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 H
10 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
and the same must be just, fair and reasonable and not vague
or imprecise. [Para 164] [127-F-H; 128-A-C]
3.2 (5) 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
C contours of ‘Uniformity’. A Tribunal to have the character of a
quasi-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) that it is a fundamental prerequisite for
D 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
E possible, that of the Court which it seeks to substitute. [Para
165] [128-D-G]
(C) Constitutionality of procedure of removal
3.3 (1) It is clear from the Scheme contemplated under the
F 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
G 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
H Government to appoint an enquiry committee for removal of any
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 11

presiding officer or member on its own. The Rules are not A
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
B
the Executive is palpably unconstitutional and would make them
amenable to the whims of the Executive, hampering discharge
of judicial functions. [Para 169] [129-F-H; 130-A-B]
3.3 (2) It is essential that the same be observed in letter
and spirit and this Court therefore reiterate that Members and
C
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. [Para 171] [130-
G-H]
3.4 (D) Term of Office and Maximum Age
D
3.4 (1) Various enactments providing for appointment and
other incidentals of members have been brought to our notice
to demonstrate an apparent disparity in age of superannuation
of Members and Chairpersons/Presiding Officers of different
Tribunals. Illustratively, Section 14D of the Telecom Regulatory
E
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 F
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. [Para 172] [131-A-C]
3.4 (2) The Constitution of India doesn’t differentiate G
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
H
12 SUPREME COURT REPORTS [2019] 16 S.C.R.

A substituting. There must, therefore, be a uniform age of
superannuation for all members in all the Tribunals. [Para 173]
[131-D-E]
3.5 (E) Contradictions in the Rules
The Bench has observed following contradictions in the
B 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
C 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.
D (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
E 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
F 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
G
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.
H Furthermore, the proviso to Rule 7 creates an unjust
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 13

classification between National Company Law Appellate Tribunal A
(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.
(e) Moral turpitude is a term well defined by this Court in
numerous decisions. Rule 7(b) cannot be allowed to survive as B
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 C
under Rule 20. As ruled by this Court earlier in Madras Bar
Association (2014), the Central Government cannot be allowed
to have administrative control over the Judiciary without
subverting the doctrine of separation of powers. [Para 179] [133-
A-H; 134-A-D]
D
4. ISSUE IV: WHETHER THERE SHOULD BE A
SINGLE NODAL AGENCY FOR ADMINISTRATION OF
ALL TRIBUNALS?
4.1 This Court in L. Chandra Kumar v. Union of India,
envisaged the administration of the entire Tribunal Framework E
in the country to be monitored by a single nodal agency/ministry.
It was observed not to be advisable to allow 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 F
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. [Para 181] [134-G-H; 135-A-B]
G
4.2 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 H
14 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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 Consolidated Fund of India.
Therefore, hitherto, the Ministry of Finance shall, in consultation
C 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.
[Para 184] [136-E-H; 137-A]
D
5. ISSUE V: WHETHER THERE IS A NEED FOR
CONDUCTING A JUDICIAL IMPACT ASSESSMENT
OF ALL TRIBUNALS IN INDIA?
5.1 The American principle of ‘Judicial Impact
Assessment’ was first borrowed by this Court in its dictum in
E
Salem Advocate Bar Assn. (II) v. Union of India, 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
F 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
G 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. [Para 187] [137-E-H;
H 138-A]
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 15

5.2 (1) In the present case, this Court is of the view that A
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 B
Tribunals may result in massive increase in litigation which, in
absence of adequate infrastructure, or budgetary grants, will
overburden the Judiciary. [Para 188] [138-E-F]
5.2 (2) In the fitness of things, this Court deems it
appropriate to direct the Union of India to carry out financial C
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. [Para 189] [138-G]
D
6. 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?
E
6.1 (1) 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. [Para 193] [141-B]
F
6.1 (2) 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, G
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,
H
16 SUPREME COURT REPORTS [2019] 16 S.C.R.

A but as a result of the Constitutional trust accorded in them.
Indiscriminate accordance of status of such Constitutional judges
on Tribunal members and presiding officers will do violence to
the very Constitutional Scheme. [Para 194] [141-C-D]
7. ISSUE VII: WHETHER DIRECT STATUTORY
B APPEALS FROM TRIBUNALS TO THE SUPREME
COURT OUGHT TO BE DETOURED?
7.1 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
C involving the most egregious of wrongs and/or having the
greatest impact on public interest. [Para 205] [146-E]
7.2 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,
D 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. [Para 206]
E [146-F-G]
7.3 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
F there are several hundreds of cases which have been decided
by the NCLAT and many other thousands by other tribunals
pending in this Court. [Para 214] [149-G]
7.4. In light of this, provisions for statutory appeals directly
and liberally to the Supreme Court raises the inevitability of
G 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
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 17

to the lack of specialisation of District and High Courts, and in A
the same breadth also provide statutory appeals to the final
Court in that very original system. [Para 216] [150-C-D]
7.5 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 B
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. [Para
217] [150-E] C
8. ISSUE VIII: WHETHER THERE IS A NEED FOR
AMALGAMATION OF EXISTING TRIBUNALS AND
SETTING UP OF BENCHES
8.1 The ‘imbalance’ in distribution of case-load and
inconsistencies in nature, location and functioning of Tribunals D
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. [Para 226] [155-F] E
CONCLUSION
9. In light of the discussions and 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
F
the Speaker of the Lok Sabha in respect of Part-XIV of the
Finance Act, 2017 is referred to a larger Bench.
(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,
G
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
H
18 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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-
B formulate the Rules strictly in conformity and in accordance with
the principles delineated by this Court in R.K. Jain, L. Chandra
Kumar, Madras Bar Association and Gujarat Urja Vikas Ltd.
conjointly read with the observations made in the earlier part
of this decision.
C (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
D
and distinct homogeneous classes.
(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
E 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
F 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.
G (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
H of the need to remove direct appeals to the Supreme Court from
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 19

orders of Tribunals. A decision in this regard by the Union of A
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 B
commensurate with the existing and anticipated volume of work.
[Para 228] [156-A-H; 157-A-F]
PER DR. D. Y. CHANDRACHUD, J.
Passage as a Money Bill
C
10. 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. D
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 E
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 F
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 G
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. [Para 88] [217-B-F] H
20 SUPREME COURT REPORTS [2019] 16 S.C.R.

A Violation of directions issued by this Court
11.1 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
B 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
C well as from the Central Government with no casting vote to
the Chief Justice of India or their nominee. [Para 90] [218-C-
E]
11.2 The procedure for selection is fundamentally
destructive of judicial independence. The Union Government has
D vital status in the disputes before many tribunals. Even
otherwise, conferring upon the government such a dominating
and overwhelming voice in making appointments is a negation
of judicial independence. [Para 90] [219-E]
11.3 The constitution of the Search-cum-Selection
E 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. Independence of the judiciary requires that judicial
functioning be free from interference by the other two organs
F 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
G 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. [Para 93] [221-E-G]
11.4 This Court finds that though the decision in R Gandhi
H was delivered in 2010 and in Madras Bar Association in 2014,
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 21

the same anomalies have persisted. An attempt has been made A
to dilute judicial independence by a creeping assertion of
executive power. This is unconstitutional. [Para 98] [224-G-H]
Severability
12. In the present case, Part XIV of the Finance Act 2017
B
is severable. 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 C
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. [Para 101] [227-
H; 228-A-B]
12.2 Finally, a fervent plea was made by the Attorney D
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 proceedings with E
certain modifications. This Court 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 F
judgments of this Court. [Para 102] [228-C-D]
Conclusion
13. 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 G
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, it is directed that those appointments shall not be affected
by the declaration of unconstitutionality. The terms and H
22 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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. [Para
103] [228-E-F]
B 14. 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
C system to which this Court has 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
D 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. [Para 104] [228-G-H; 229-A-B]
15. It is imperative that an overarching statutory
organisation be constituted through legislative intervention to
E
oversee the working of tribunals. This Court recommends the
constitution of an independent statutory body called the
“National Tribunals Commission” to oversee the selection
process of members, criteria for appointment, salaries and
allowances, introduction of common eligibility criteria, for
F 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:

G (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
H Government from amongst officers holding at least
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 23

the rank to a Secretary to the Union Government: A
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 B
consultation with the Chief Justice of India. [Para
105] [229-B-F]
The senior-most among the Judges nominated by the Chief
Justice of India shall be designated as the Chairperson of the
NTC. [Para 106] [229-F-G] C
16. 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 D
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 this Court has
held, in preserving the independence of the tribunals as a facet
of judicial independence, the adjudicatory body must be robust: E
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. [Para 107] [229-G-H; 230-A-B]
17. Competence, professionalism and specialisation are F
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 G
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 H
24 SUPREME COURT REPORTS [2019] 16 S.C.R.

A are woefully short of an adequate complement of trained
administrative personnel. Hence, there is an urgent need to set
up an All India Tribunal Service in the interests of the effective
functioning of the tribunal system. [Para 108] [230-C-E]
PER DEEPAK GUPTA, J.
B
Issue No. 1
18. There is 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
C is not beyond judicial review. There is also an agreement 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, it is
D agreed 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. [Para 18] [236-E-F]
Issue no. 2

E 19. As far as Issue No.2 is concerned, there is
disagreement 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. [Para 19] [236-G]
F
20. 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 India, L. Chandra Kumar,
Union of India v.Madras Bar Association, Madras Bar Association
v. Union of India, Madras Bar Association v. Union of India,
G Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. 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
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 25

the delegatee are violative of the law laid down by this Court. A
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. [Para 30] [240-F-G; 241-A-B]
B
Issue nos. 4,5,7 and 8
21. 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 C
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 D
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, E
high intellect and having vast experience in the field in which
they will 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 F
Court in L. Chandra Kumar. These matters cannot be permitted
to linger on indefinitely. Therefore, 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 G
will not do away with the need of having one common umbrella
organisation to supervise all the tribunals. [Para 36] [242-D-H;
243-A]
22. Even without carrying out any judicial impact
assessment it is clear, as held in Madras Bar Association, 2010 H
26 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
because the biggest litigant or stakeholder itself becomes part
and parcel of the adjudicating body which is supposed to be free,
independent and fearless. [Para 37] [243-B-C]
23. (1) The need for carrying out judicial impact
assessment of all the tribunals in India cannot be over
C 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
D country have to come to the State capitals or the National Capital
for redressal of their grievances. [Para 38] [243-B]
23. (2) The committee which carries out the judicial impact
assessment of the functioning of the tribunals has to deal with a
whole lot of issues. It is neither feasible nor proper to lay down
E all the issues in this judgment but some are highlighted. Another
important issue which must be dealt with is whether the tribunals
have really helped in early disposal of the cases. The time spent
for disposal may vary from case to case but this Court is mainly
dealing with the cases which end in the High Courts or at the
Supreme Court. This must be done not only on an all India basis
F but also on State to State basis. There are many smaller States
in the country where the Civil Courts and the High Courts are
not overburdened with work. In these States, the cases are
decided much faster than in many other larger States. Normally,
it is these smaller States which do not get permanent benches,
sometimes not even Circuit Benches. It is a paradox that the
G
States which are judicially well administered and where disposal
is quick, do not get the permanent benches and the litigants
suffer whereas States which are very slow in disposing of the
cases get more benches. Even when Circuit Benches come to
these States there is a huge time gap between two sittings. The
H whole purpose of providing cheaper and faster justice gets lost
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 27

because the Circuit Benches come rarely and many times the A
constitution of the Circuit Benches changes on every visit
resulting in matters being reheard every time. [Para 43] [245-
E-H; 246-A-B]
24. Having tribunals without benches in at least the capitals
of States and Union Territories amounts to denial of justice to B
citizens of those States and Union Territories. It also makes the
justice delivery system very metropolis centric. This has many
adverse effects. The bench and the bar in smaller district towns
and capitals of smaller States which were handling these matters
in a competent manner are deprived of handling these types of
cases. This also makes access to justice expensive for the C
litigants. It also leads to a situation where the bench and the
bar in these areas would not have any experience of handling
matters relating to jurisdictions transferred to tribunals which
they used to handle earlier. Therefore, the local bench and bar
will never develop and the entire bulk of work will be captured D
by those practicing in Delhi or in those State capitals where
benches of the tribunals are set up. Instead of taking justice to
the common man, he is forced to spend more money, spend more
time and travel long distances in his quest for justice, which is
his fundamental right. [Para 44] [246-B-D]
E
25. The litigants cannot wait for judicial impact assessment
and action by the Government which may or may not take place.
Experience has shown that the judgments right from L. Chandra
Kumar to Madras Bar Association, 2010 have not been complied
with by the Union in letter and spirit. Citizens of this country
cannot be denied justice which is the first promise made in the F
Preamble. Therefore, whichever State/Union Territory the bench
of a particular tribunal is not established or functioning, the
litigants of that State will have a right to invoke the extraordinary
writ jurisdiction of the jurisdictional High Court under Article
226 of the Constitution for redressal of their grievances. They
cannot be expected to go to far off distant places and spend huge G
amounts of money, much beyond their means to ventilate their
grievances. The alternative remedy of approaching a tribunal is
an illusory remedy and not an efficacious alternative remedy. The
self-imposed bar or restraint of an alternative efficacious remedy
would not apply. Such litigants are entitled to file petitions under H
28 SUPREME COURT REPORTS [2019] 16 S.C.R.

A Article 226 of the Constitution of India before the jurisdictional
High Court. In L. Chandra Kumar it was clearly held that the
right of judicial review is a part of the basic structure of the
Constitution and this right must be interpreted in a manner that
it is truly available to the litigants and should not be an illusory
right. [Para 45] [246-E-H; 247-A-B]
B
26. One more aspect which needs to be looked into is the
need to have a two-tier tribunal system like in the United
Kingdom- a lower tribunal and an appellate tribunal. If there are
two-tier tribunals then there would be adjudication at the
appellate level by an appellate tribunal. Having one appellate
C forum within the hierarchy of tribunals would probably lessen the
burden on the High Courts and the Supreme Court. [Para 46]
[247-B]
27. Recruitment to the lower tribunal should be done on
the basis of an objective criteria like the written test conducted
D for the post of District Judges. The persons selected to the
lower tribunals can be made eligible for promotion to the
appellate tribunals. In fact, there can be common service to man
more than one or more tribunals. [Para 47] [247-C-F]
28. If there are tribunal services and there is provision for
E appeal within the hierarchy of the tribunals and the High Courts
exercise their writ jurisdiction or if in some matters appeals are
provided to the High Courts in the first instance, many of the
ills which plague the system may be overcome. If the aforesaid
system is followed then the question of appointing retired Judges
F or bureaucrats will not arise. The amicus curiae in his note has
raised an issue that tribunals should not become a haven for
retired persons. In my view, there should normally be no post
retiral sinecures. Though the ideal situation would be to have
no appointments from retired judges or bureaucrats, this may
not be possible in the near future because there are no tribunal
G services and most of the posts at this stage may have to be filled
from amongst retired persons. At the same time, an effort has
to be made to ensure that in the foreseeable future the number
of retired persons being reappointed is brought down and more
persons from within the tribunal services are appointed up to
the highest level in the tribunal. [Para 48] [247-G-H; 248-A-B]
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 29

29. There may be some posts which require retired judges A
to be appointed such as Lokpal, Lokayukta, Chairpersons of the
Human Rights Commission, Chairman of the Law Commission
of India, etc. But this should not become a matter of routine
especially when the appointments are being made by the
executive. If the administration makes appointments and judges, B
serving or newly retired judges, are under consideration for
such posts then the independence of the judiciary is likely to
be compromised. The public of this country still reposes great
faith in the judiciary. That faith will be eroded in case it is felt
that the appointments are made for extraneous reasons. Most
judges live up to the expectations of the high standards of C
integrity and propriety expected from them but one cannot shut
our eyes to the harsh reality that there are a few black sheep.
One cannot expect justice from those who, on the verge of
retirement, throng the corridors of power looking for post retiral
sinecures. Therefore, the majority of members of the selecting D
body must comprise of the Chief Justice of India and/or his/her
nominees and the views of the Chief Justice and/or his/her
nominees must be given precedence over the views of other
members. [Para 49] [248-C-F]
30. It is agreed with the Chief Justice that an attempt E
should be made to do away with filing of first appeal as a matter
of right to the Supreme Court. At present, at least 2 dozen
statues provide for appeals directly to the Supreme Court. The
Supreme Court becomes a Court of first appeal which is highly
avoidable. If the law laid down in L. Chandra Kumar is followed,
F
the High Courts should have the jurisdiction to entertain writ
petitions against the orders of the tribunals. This will reduce the
burden on the Supreme Court. Even more importantly, the High
Courts, when they entertain these matters, will deal with them
within the limited scope of writ jurisdiction. If the jurisdiction
of the High Courts is bypassed by providing for appeals directly G
to the Supreme Court, soon a stage will come when we will have
no High Court Judges who would have heard matters in various
jurisdictions. It would be virtually impossible for them to handle
such matters in the Supreme Court where the tenure of a Judge
is on an average only about 4 years. [Para 51] [249-B-D] H
30 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 31. The next issue is who should carry out the judicial
impact assessment. The Judicial Impact Assessment Committee
should comprise of two retired judges of the Supreme Court,
the senior being the Chairperson of the Committee, and one
retired Chief Justice of a High Court all three to be nominated
by the Chief Justice of India. Out of the three at least two should
B
have been the Chairperson or members of tribunals. Two
members of the Executive, not below the rank of Secretary, to
the Government of India, one from the Ministry of Law and
Justice and one from some other branch can also be members
but these members should be appointed in consultation with the
C Chief Justice of India. [Para 53] [249-E-G]
32. The last issue is whether there should be a
Commission or a body to oversee the appointment of members
of various tribunals. In my view it is necessary to have such a
Commission which is itself an independent body manned by
D honest and competent persons. This body is required to select
those persons who man the specialised tribunals in terms of the
law laid down in various judgments of this Court. There is need
to have persons who not only have grassroot experience but a
judicious mix of judicial members and those with grassroot
experience. There is need to have persons who have an
E independent outlook, integrity, character, good reputation and
people who are totally free from the influence or pressure from
the Government. It is only then that the people will have faith
in the adjudicating mechanism of the tribunals. [Para 54] [249-
G-H; 250-A-B]
F PER RANJAN GOGOI, CJI (FOR HIMSELF AND
N.V. RAMANA, DR. D.Y. CHANDRACHUD, DEEPAK
GUPTA AND SANJIV KHANNA, JJ.):
Union of India v. R. Gandhi, President, Madras Bar
Association (2010) 11 SCC 1 : [2010] 6 SCR 857 ;
G L. Chandra Kumar v. Union of India (1997) 3 SCC
261 : [1997] 2 SCR 1186 ; R.K. Jain v. Union of India
(1993) 4 SCC 119 : [1993] 3 SCR 802 ; Madras
Bar Association v. Union of India (2014) (2014) 10
SCC 1 : [2014] 10 SCR ; Gujarat Urja Vikas Ltd. v.
Essar Power Ltd. (2016) 9 SCC 103 : [2016] 5 SCR
H 10 ; Salem Advocate Bar Assn. (II) v. Union of India
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 31

(2005) 6 SCC 344 : [2005] 1 Suppl. SCR 929 ; Raja A
Ram Pal v. Lok Sabha (2007) 3 SCC 184 : [2007] 1
SCR 317 ; Gwalior Rayon Silk Mfg. (Wvg.) Co. v. Asstt.
Commissioner of Sales (1974) 4 SCC 98 : [1974]
2 SCR 879 ; T.N. Seshan v. Union of India (1995) 4
SCC 611 : [1995] 2 Suppl. SCR 106 ; Union of India
B
v. Major General Shrikant Sharma (2015) 6 SCC 773
: [2015] 4 SCR 676 – relied on.
Jaswant Sugar Mills Ltd., Meerut v. Lakshmichand AIR
1963 SC 677 : [1963] Suppl. SCR 242 ; Associated
Cement Co. Ltd. v. PN Sharma AIR 1965 SC 1595 :
[1965] SCR 366 ; M.C. Mehta v. Union of India (1986) C
2 SCC 176 : [1986] 1 SCR 312 ; Union of India v. R.
Gandhi, President, Madras Bar Association (2010) 11
SCC 1 : [2010] 6 SCR 857 ; Madras Bar Association
v. Union of India (2015) 8 SCC 583 : [2015] 6 SCR
638 ; Rajiv Garg v. Union of India (WP No. 120 of D
2017) on 08th February, 2013 ; MSM Sharma v. Dr.
Shree Krishna Sinha (2007) 3 SCC 184 : [2007] 1
SCR 317 ; Union of India v. Jyoti Prakash Mitter
(1971) 1 SCC 396 : [1971] 3 SCR 483 ; R (Jackson)
v. Attorney General [2005] UKHL 56 ; Mohd. Saeed
Siddiqui v. State of Uttar Pradesh (2014) 11 SCC 415; E
Yogendra Kumar Jaiswal v. State of Bihar (2016) 3
SCC 183 : [2015] 14 SCR 1037 ; Justice Puttaswamy
(Retd.) and Anr. v. Union of India (2019) 1 SCC 1 ;
Hari Ram v. Babu Gopal Prasad (1991) Supp. 2 SCC
608 ; M/s Saru Smelting (P) Ltd. v. Commissioner F
of Sales Tax, Lucknow (1993) Supp. 3 SCC 97 :
[1993] 3 SCR 719 ; Kihoto Hollohan v. Zachillhu
and Others (1992) Supp. 2 SCC 651 : [1992] 1 SCR
686 ; In re: The Delhi Laws Act, 1951 AIR [1951] SCR
747 ; B. Shama Rao v. Union Territory of Pondicherry,
(2015) 4 SCC [2015] 2 SCR 51 ; Ramesh Birch v. G
Union of India 1990 AIR 560 : [1989] 2 SCR 629 ;
Devi Das Gopal Krishnan & Ors v. State of Punjab &
Or AIR 1967 SC 1895 : [1967] SCR 557 ; Municipal
Corporation of Delhi v. Birla Cotton, Spinning
and Weaving Mills, Delhi and Another AIR 1968 SC H
32 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 1232 : [1968] SCR 251 ; M.K. Papiah & Sons v.
Excise Commissioner (1975) 1 SCC 492 : [1975] 3
SCR 607 ; Avinder Singh v. State of Punjab (1979) 1
SCC 137 : [1979] 1 SCR 845 ; Registrar of Coop.
Societies v. K. Kunjabmu (1980) 1 SCC 340 : [1980]
2 SCR 260 ; Keshavlal Khemchand and Son Private
B
Limited & Others v. Union of India (2015) 4 SCC
770 : [2015] 2 SCR 51 ; Supreme Court Advocates-
On-Record Association and Another v. Union of India
(2016) 5 SCC 1 : [2015] 13 SCR 1 ; Kesavananda
Bharati v. State of Kerala (1973) 4 SCC 225 : [1973]
C Suppl. SCR 1 ; Union of India v. Madras Bar
Association (2010) 11 SCC 1 : [2010] 6 SCR 857 ;
Madras Bar Association v. Union of India & Anr.
(2014) 10 SCC 1 : [2014] 10 SCR 1 ; Bihar Legal
Support Authority v. Chief Justice of India (1986) 4
SCC 767 : [1987] 1 SCR 295 ; Mafatlal Industries Ltd.
D
v. Union of India (1997) 5 SCC 536 : [1996] 10 Suppl.
SCR 585 ; Sangram Singh v. Election Tribunal [1955]
2 SCR 1 – referred to.
Marbury v. Madison 5 U.S. (1 Cranch) 137 (1803) –
referred to.
E
Case Law Reference
[2010] 6 SCR 857 relied on Para 4
[1997] 2 SCR 1186 relied on Para 5

F [1963] Suppl. SCR 242 referred to Para 13
[1965] SCR 366 referred to Para 13
[1986] 1 SCR 312 referred to Para 40
[1993] 3 SCR 802 relied on Para 44
G [2010] 6 SCR 857 referred to Para 47
[2014] 10 SCR 1 relied on Para 50
[2015] 6 SCR 638 referred to Para 53
[2016] 5 SCR 101 relied on Para 54
H [2007] 1 SCR 317 relied on Para 101
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 33

[2007] 1 SCR 317 referred to Para 102 A
[1971] 3 SCR 483 referred to Para 102
(2014) 11 SCC 415 referred to Para 106
[2015] 14 SCR 1037 referred to Para 107
(2019) 1 SCC 1 referred to Para 108 B
(1991) Supp. 2 SCC 608 referred to Para 114
[1993] 3 SCR 719 referred to Para 114
[1992] 1 SCR 686 referred to Para 115
C
[1951] SCR 747 referred to Para 131
[2015] 2 SCR 51 referred to Para 131
[1989] 2 SCR 629 referred to Para 134
[1967] SCR 557 referred to Para 134
D
[1968] SCR 251 referred to Para 136
[1975] 3 SCR 607 referred to Para 137
[1979] 1 SCR 845 referred to Para 138
[1980] 2 SCR 260 referred to Para 139
E
[2015] 2 SCR 51 referred to Para 140
[1974] 2 SCR 879 relied on Para 141
[2015] 13 SCR 1 referred to Para 144
[1973] Suppl. SCR 1 referred to Para 153 F
[2010] 6 SCR 857 referred to Para 155
[2014] 10 SCR 1 referred to Para 155
[2005] 1 Suppl. SCR 929 relied on Para 187
[1995] 2 Suppl. SCR 106 relied on Para 192 G
[1987] 1 SCR 295 referred to Para 210
[2015] 4 SCR 676 relied on Para 218
[1996] 10 Suppl. SCR 585 referred to Para 221
[1955] 2 SCR 1 referred to Para 222 H
34 SUPREME COURT REPORTS [2019] 16 S.C.R.

A PER DR. D.Y. CHANDRACHUD, J.:
Kihoto Hollohan v. Zachillhu and Others (1992) Supp.
2 SCC 651 : [1992] 1 SCR 686; N P Ponnuswami v.
Returning Office, Namakkal Constituency, Namakkal,
Salem, Dist. [1952] SCR 218 ; Union of India v.
B Tulsiram Patel (1985) 3 SCC 398 : [1985] 2 Suppl.
SCR 131 ; Babulal Parate v State of Bombay [1960]
1 SCR 605 ; 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 : [1965] SCR 413 ; Ramdas Athawale v Union of
C India (2010) 4 SCC 1 : [2010] 3 SCR 1059 ; Raja Ram
Pal v Hon’ble Speaker, Lok Sabha (2007) 3 SCC
184 : [2007] 1 SCR 317 ; L. Chandrakumar v. Union
of India (1997) 3 SCC 261 : [1997] 2 SCR 1186 ;
Union of India v. R. Gandhi, President, Madras Bar
D Association (2010) 11 SCC 1 : [2010] 6 SCR 857 ;
Madras Bar Association v. Union of India (2014) 10
SCC 1 : [2014] 10 SCR 1 ; State of Bombay v. United
Motors (India) Ltd. [1953] SCR 1069 ; – relied on.
S P Sampath Kumar v Union of India (1987) 1 SCC
E 124 : [1987] 1 SCR 435 ; Madras Bar Association v.
Union of India (2015) (2015) 8 SCC 583 : [2015] 6
SCR 638 ; Union of India v. Jyoti Prakash Mitter
(1971) 1 SCC 396 : [1971] 3 SCR 483 ; Mangalore
Ganesh Beedi Works v State of Mysore AIR 1963 SC
589 : [1963] Suppl. SCR 275 ; Mohd. Saeed Siddiqui
F v State of Uttar Pradesh (2014) 11 SCC 415 ;
Yogendra Kumar Jaiswal v State of Bihar (2016) 3 SCC
183 : [2015] 14 SCR 1037 ; Pandit MSM Sharma v
Dr Shree Krisha Sinha AIR 1960 SC 1186 ; Justice
Puttaswamy (Retd.) and Anr. v. Union of India (2019)
G 1 SCC 1 ; Kuldip Nayar v Union of India (2006) 7
SCC 1 : [2006] 5 Suppl. SCR 1 ; State of West Bengal
v. Anwar Ali Sarkar [1952] SCR 284 ; R.K. Garg
v. Union of India (1981) 4 SCC 675 : [1982] 1 SCR
947 ; Subramanian Swamy v. Director, Central Bureau
of Investigation (2014) 8 SCC 682 : [2014] 6 SCR
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 35

873 ; Bhim Singh v. Union of India (2010) 5 SCC 538 A
: [2010] 6 SCR 218 ; R.M.D. Chamarbaugwalla v.
Union of India [1957] SCR 930 ; State of Bombay v.
F N Balsara [1951] SCR 682 – referred to.
The Treatise on The Law, Privileges, Proceedings and
Usage of Parliament C. Knight & Company, 1844 HM B
Seervai, Constitutional Law of India, Universal Law Co
Pvt Ltd, Vol I, (1991), at pp.299-300 – referred to.
Case Law Reference
[1987] 1 SCR 435 referred to Para 11
C
[1997] 2 SCR 1186 relied on Para 12
[2010] 6 SCR 857 relied on Para 14
[2014] 10 SCR 1 referred to Para 16
[2015] 6 SCR 638 referred to Para 19 D
[1952] SCR 218 relied on Para 34
[1971] 3 SCR 483 referred to Para 35
[1985] 2 Suppl. SCR 131 relied on Para 36
[1992] 1 SCR 686 relied on Para 36 E
[1960] 1 SCR 605 relied on Para 38
[1965] SCR 413 relied on Para 39
[2010] 3 SCR 1059 relied on Para 39
[2007] 1 SCR 317 relied on Para 39 F
[1963] Suppl. SCR 275 referred to Para 41
(2014) 11 SCC 415 referred to Para 41
[2015] 14 SCR 1037 referred to Para 41
G
AIR 1960 SC 1186 referred to Para 46
(2019) 1 SCC 1 referred to Para 47
[2006] 5 Suppl. SCR 1 referred to Para 47
[1952] SCR 284 referred to Para 74
H
36 SUPREME COURT REPORTS [2019] 16 S.C.R.

A [1982] 1 SCR 947 referred to Para 74
[2014] 6 SCR 873 referred to Para 74
[2010] 6 SCR 218 referred to Para 74
[1957] SCR 930 referred to Para 99
B [1951] SCR 682 referred to Para 99
[1953] SCR 1069 relied on Para 100
PER DEEPAK GUPTA, J.:
L. Chandrakumar v. Union of India (1997) 3 SCC
C 261 : [1997] 2 SCR 1186 ; Gwalior Rayon Mills
v. Assistant Commissioner, Sales Tax AIR 1974 SC
1660 : [1974] 2 SCR 879 ; Ramesh Birch v. Union of
India 1989 Supp (1) SCC 430 : [1989] 2 SCR 629 -
relied on.
Union of India v. Madras Bar Association, (2010) 11
D
SCC 1 : [2010] 6 SCR 857 ; Madras Bar Association
v. Union of India (2015) 8 SCC 583 : [2015] 6 SCR
638 ; Gujarat Urja Vikas Nigam Ltd. v. Essar Power
Ltd. (2016) 9 SCC 103 : [2016] 5 SCR 101 ; Minerva
Mills Ltd. v. Union of India, (1980) 2 SCC 591 ;
E Kesavananda Bharati v. State of Kerala, (1973) 4
SCC 225 : [1973] Suppl. SCR 1 ; Re Article 143,
Constitution of India and Delhi Laws Act (1912) etc.
AIR (38) 1951 SC 332 : [1951] SCR 747 ;
Harishankar Bagla v. M.P. State AIR 1954 SC 465 :
[1955] SCR 313 ; Madras Bar Association v. Union
F
of India (2014) 10 SCC 1 : [2014] 10 SCR 1 ; Anita
Kushwaha v. Pushap Sudan, (2016) 8 SCC 509 :
[2016] 9 SCR 560 – referred to.
Case Law Reference
G [1997] 2 SCR 1186 relied on Para 6
(1980) 2 SCC 591 referred to Para 10
[1973] Suppl. SCR 1 referred to Para 10
[2010] 6 SCR 857 referred to Para 15
H [1951] SCR 747 referred to Para 21
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 37

[1974] 2 SCR 879 relied on Para 22 A
[1955] SCR 313 referred to Para 23
[1989] 2 SCR 629 relied on Para 24
[2014] 10 SCR 1 referred to Para 30
[2015] 6 SCR 638 referred to Para 30 B

[2016] 5 SCR 101 referred to Para 30
[2016] 9 SCR 560 referred to Para 39
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8588
of 2019. C

From the Judgment and Order dated 20.01.2017 of the High
Court of Kerala at Ernakulam in W.A. No. 2349/2016 in W.P.(C) No.
26290/2014.
With D
W. P. (C) No. 267/2012, 279/2017, 558/2017, 561/2017, 625/2017,
640/2017, 1016/2017, 788/2017, 925/2017, 1098/2017, 1129/2017, 33/
2018, 205/2018, 467/2018, T. C. (C) No. 49/2018, 51/2018 and T. P.
(C) No. 2199/2018.
K.K. Venugopal, A.G., Tushar Mehta, S.G. A.N.S. Nadkarni, E
A.S.G., Ms. Madhavi Diwan, A.S.G., Arvind P. Datar, Sr. Advocate
(A.C.), Mohan Parasaran, Ms. Priya Hingorani, Ms. Aishwarya Bhati,
Ms. Prem Lata Bansal, Sidharth Luthra, Ashok Kumar Panda, Ms. V.
Mohana, R. Balasubramanian, Sr. Advs., Rahul Unnikrishnan, N. Sai
Vinod, T.V.S. Raghavendra Sreyas, Ms. Mayuri Raghuvanshi, F
V. Ranghuvanshi, Mr. Renjith B. Marar, Ms. Lakshmi N. Kaimal, Anil
Sharma, Krishnadas V., Ms. Ruchira Goel, Muhammad Ali Khan,
Abhishek Jebraj, Omar Hoda, Namrah Nasir, Sparsh Prasad, Ms. Aditi
Pani, Nikhil Swami, A.K. Behera, V.K. Verma, Tarun Verma, Gp. Capt.
K.S. Bhati, Ms. Vaidruti Mishra, Ms. Tanuja Patra, Rupesh Kumar,
Ms. H. Mota, Pravesh Bahuguna, Anand Varma, Dhairya Madan, G
Shwetank Singh, Sanjay Sharma, K. Krishna Kumar, Sudipto Sircar,
A. Subba Rao, Annam D. N. Rao, Annam Venkatesh, Rahul Mishra,
Mrs. Maneesha Dhir, Alok Dhir, Karan Batura, Ashu Kansal,
Ms. Anushree Prashit Kapadia, Ms. Diksha Rai, Varun K. Chopra,
Tejaswi Kumar Pradhan, Satyabrata Panda, Manoranjan Paikaray,
H
38 SUPREME COURT REPORTS [2019] 16 S.C.R.

A Aniruddha Purushotham, D.K. Gandhi, Sanjay Sharma, Jagjit Singh
Chhabra, Rajiv Shukla, Ms. Shivani Kapoor, Prakash Ranjan Nayak,
Gorang Goyal, V.P. Gupta, Jagdish Kumar Chawla, Anuj Bansal,
A. Kumar, Nikhil Nayyar, Ms. Shraddha Deshmukh, Ms. Rukhmani
Bobde, Saurabh Mishra, Ankur Talwar, Ms. Ankita Sharma, Ms. Nikita
Kapoor, Zoheb Hossain, Rajat Nair, Chinmayee Chandran, Mohd.
B
Shahan Ulla, Vivek Gurnani, Piyush Goyal, Arvind K. Sharma, G.S.
Makker, Mukesh Kumar Maroria, P. I. Jose, Ms. P.S. Chandralekha,
Mrs. Anil Katiyar, Ashok Mathur, Sonal Jain, E.C. Agrawal, Parthiv
K. Goswami, Ms. Diksha Rai, Ms. Palak Mahajan, Ishan Bisht,
M/s Saharya & Co., Ajay Bansal, Gaurav Yadav and Ms. Veena Bansal,
C Advs. for the appearing parties.
The Judgments of the Court were delivered by
RANJAN GOGOI, CJI
1. Leave granted.
D
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
E 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:
F “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
G 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 &
H Justice to promptly carry out a ‘Judicial Impact
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 39
[RANJAN GOGOI, CJI]

Assessment’ on all tribunals created by Parliament and A
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 B
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 Association 1 (in paragraphs 64-70) are also
considered by the Government.” C

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:
D
“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 E
be open for the Ministry, in its turn, to appoint an independent
supervisory body to oversee the working of the Tribunals.”
6. Thereafter on the same day, this Court opined as follows:
“Tentatively, we are of the view that the said directions ought to F
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 G
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
1
(2010) 11 SCC 1.
2
(1997) 3 SCC 261. H
40 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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,
D 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
E 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
F 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
G 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
H Kerala. The petitioner had originally approached the High Court
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 41
[RANJAN GOGOI, CJI]

challenging the constitutional validity of Section 13 (5-A) of the A
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 reserve bid in an earlier auction. Rojer Mathew
claimed that the aforementioned provision violated his rights under
B
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 C
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 16 th May,
2018, nevertheless this Court kept his petition pending to allow
consideration of broader issues concerning restructuring of Tribunals. D
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, E
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 F
at appropriate parts of this order.
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 G
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
H
42 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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.
D 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
E 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
F 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
G 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)
3
AIR 1963 SC 677.
4
H AIR 1965 SC 1595.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 43
[RANJAN GOGOI, CJI]

1 SCR 267 at p. 272] ). They are both adjudicating bodies and A
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
B
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 C
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
D
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 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 E
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 F
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
G
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,
H
44 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C common law traditions and colonial history, it would be imperative to
examine the position of law across the world:
I. United Kingdom
17. Tribunals are one of the most important institutions in the
dispensation of justice in the British Judicial system. Numerous Tribunals
D 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
E 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
F 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
G 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,
H special tribunals set up to adjudicate disablement pensions for
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 45
[RANJAN GOGOI, CJI]

servicemen wounded in World War I. In the twentieth century, post A
the Leggatt review, many dozens of tribunals for subjects as diverse
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 B
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 C
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 D
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 E
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 F
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 G
by Parliament for 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 H
46 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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,
C 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
D 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
E for the country.
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
F 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

5
Drewry, Gavin, “The Judicialisation of Administrative Tribunals in the U.K: From
Hewart to Leggatt” 28 TRAS 51 (2009)
G 6
Excerpts from the ‘Explanatory Notes to the Tribunals, Courts and Enforcement
Act, 2007’ prepared by the Ministry of Justice, British Parliament.
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
H 10.09.2019).
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 47
[RANJAN GOGOI, CJI]

The work of the Tribunals are regulated by legislation and Members A
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 B
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 C
Federal Court of Canada, the immediate forum below the Supreme
Court of Canada.
III. Australia
25. The Australian system of Tribunals is an amalgamation of
the system prevalent in England and Canada. Tribunals in Australia were D
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. E
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 F

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 G
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. H
48 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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.
C 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
D 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
E
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, 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,
F 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
G
the establishment of Tribunals, vide the 42nd Constitutional Amendment,
Article 323A and 323B were introduced, delineating powers as well as

9
George A. Bermann; Etienne Picard, Introduction to French Law (Kluwer Law
International, Netherlands, 2008) at p. 58.
10
H Bartlett, C. A. Hereshoff, “The French Judicial System” 33 CLT 952 (1913).
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 49
[RANJAN GOGOI, CJI]

the composition and formation of Tribunals. Numerous Tribunals A
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
B
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.
C
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.
I. Administrative Reforms Commission - 1966
32. The Administrative Reforms Commission was set up to D
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 E
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. F
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
G
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. H
50 SUPREME COURT REPORTS [2019] 16 S.C.R.

A This report attracted a lot of critique from the legal fraternity and was
later rejected in Sakinala Hari Nath vs. State Of Andhra Pradesh11.
V. Raghavan Committee - 2002
36. In accordance with contemporaneous evolutions in the
B 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
C 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
D
complex subject-matters requiring technical expertise such as service
law, tax law, company law or environment law, etc.
LEGISLATIVE DEVELOPMENT OF
TRIBUNALISATION :
E 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
F
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
G
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.

11
1993 (3) ALT 471; See also: L. Chandra Kumar v. Union of India 1997 (2) SCR
H 1186
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[RANJAN GOGOI, CJI]

(2) A law made under clause (1) may— A
(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;
(b) specify the jurisdiction, powers (including the power to
punish for contempt) and authority which may be B
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;
C
(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
D
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; E
(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, F
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. G
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. H
52 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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;
B
(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
C 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
D 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,
E 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;
F (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).
G
(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
H exercised by each of the said tribunals;
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[RANJAN GOGOI, CJI]

(c) provide for the procedure (including provisions as to A
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 B
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
C
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 D
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.
E
(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 F
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 G
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. H
54 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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 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.
B
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
C 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
D 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 :
E
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. Lakshmichand 13. It was to be examined
F whether the body is vested with powers of a Civil Court or not, and it
was held that any adjudicatory body vested with 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
G 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,
12
1986 (2) SCC 176
13
AIR 1963 SC 677.
14
H (1993) 4 SCC 119.
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[RANJAN GOGOI, CJI]

it is imperative that they possess requisite legal expertise, some judicial A
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
B
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 C
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, D
wherein it was found that many Tribunals failed the test of public
confidence due to purported lack of competence, objectivity and 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 E
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 F
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 G
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.
15
(1997) 3 SCC 261. H
56 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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 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
C 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
D 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
E 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
F 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
G 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
16
H (2010) 11 SCC 1
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 57
[RANJAN GOGOI, CJI]

in Company Law Service or the Indian Legal Service A
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 B
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 C
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 D
holding the post of Joint Secretary or equivalent post in
the 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 E
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 F
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 G
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 H
58 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B
(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
C 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.
D
(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
E 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);
F
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
G 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
H considerable time is required to achieve expertise in the
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 59
[RANJAN GOGOI, CJI]

field concerned. A term of three years is very short and A
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
B
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 C
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 person appointed as
member should be prepared to totally disassociate D
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 E
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 F
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 G
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
17
(2014) 10 SCC 1. H
60 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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 convenient access to justice. Moreover,
the Court held that in order to uphold their independence and fairness
D 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
E 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).
F 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,
G 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
18
(2015) 8 SCC 583.
19
H (2016) 9 SCC 103.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 61
[RANJAN GOGOI, CJI]

questions of law, the composition of Tribunals was put under review A
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 272 nd Report titled ‘Assessment of Statutory Frameworks of
Tribunals in India’ gave a detailed analysis of statutory framework with
respect to Tribunalisation in India.
B
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 C
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 D
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. E

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 F
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:
“I.—AMENDMENT TO THE CINEMATOGRAPH ACT, 1952
G
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 H
62 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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,—
D (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
E 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).”;

F (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,
G 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
H 184 of that Act:
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 63
[RANJAN GOGOI, CJI]

Provided that the Presiding Officer appointed before the A
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 B
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 …… 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
C
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. D
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 E
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 F
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 G
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 H
64 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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,
E 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
F 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
G 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
H Officer or Member of the Tribunal, Appellate Tribunal or, as the
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 65
[RANJAN GOGOI, CJI]

case may be, other Authority may be varied to his disadvantage A
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 B
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. C
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 D
Part-XIV could not and ought not to have been made part of the Finance
Act, 2017 as the said 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 E
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.
F
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 G
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 H
66 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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’
B 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 Entry 11-A of List III of the
Constitution which deals with administration of justice, and not financial
matters.
C
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.
D 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
E 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.
F 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
G Finance Act, 2017 also prayed for a mandamus directing the State to
mandatorily conduct ‘Judicial Impact Assessment’ of legislations.
UNION OF INDIA’S CASE :
69. Learned Attorney General, on the other hand, passionately
drew attention to the existence of over 40 tribunals, statutory
H commissions, and authorities functioning under the Government of India,
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 67
[RANJAN GOGOI, CJI]

each of which has been established under a different enactment and is A
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/
B
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 C
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. D
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 E
multiple problems arising in the 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) F
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 G
pointed out that, in fact, the Tribunals, Appellate Tribunals and other
Authorities (Conditions of Service) Bill, 2014 was introduced in the Rajya
Sabha on 14 th 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 H
68 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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’.
C 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
D 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
E 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
F 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
G 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
H under :
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 69
[RANJAN GOGOI, CJI]

a. Chief Justice of India or his nominee - Chairman A
b. Chairman of the Central Administrative Tribunal -
Member
c. Two Secretaries nominated by the Government of
India - Members
B
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 C
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.
D
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 E
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.” F

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 G
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 H
70 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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.”
C 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
D 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,
E 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.”
F
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
G
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
H regard to the Income Tax Appellate Tribunal (ITAT) as regards
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the age of superannuation. We make it clear that the person A
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 B
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
C
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 D
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 E
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 F
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 G
the age of 65 years.
AFT:
3. Members of the Armed Forces Tribunal shall hold office until
the attainment of the age of 65 years. Chairpersons who have H
72 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.”
B
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
C 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
D 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
E amongst them to be Chairman).
Two retired High Court Judges (Members).
Three members representing the Executive.
84. It is further suggested in the concept note that such members
be appointed by the following Selection Committee :
F
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;
G 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
H and similar body may be constituted for State Tribunals.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 73
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The NTC should deal with appointment and removal of A
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. B
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 C
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.
D
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:- E
“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 F
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 G
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
H
74 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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:
C
“(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
D 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;
E (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.”
F 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
G 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.”
89. This was followed by yet another order of 16th May, 2018
H recommending constitution of a Committee within two months and
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expecting the Committee to give its report within three months A
thereafter.
FORMULATION OF ISSUES:
90. The core issues canvassed at the Bar concern the
constitutionality of the Finance Act, 2017, particularly whether it satisfies
B
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? C

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 D
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: E

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
F
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 G
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? H
76 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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?
C VIII. Whether there is a need for amalgamation of existing
Tribunals and setting up of benches.
ISSUE I: WHETHER THE ‘FINANCE ACT, 2017’
INSOFAR AS IT AMENDS CERTAIN OTHER
ENACTMENTS AND ALTERS CONDITIONS OF
D 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
E
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
F 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
G 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
H States.
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(2) After a Money Bill has been passed by the House of A
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
B
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 C
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 D
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 E
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.
F
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; G
(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; H
78 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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;
B (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
C 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).

D (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.
E
(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
F
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
G 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 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
H recommend amendments, that too only within fourteen days. In case
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the Lok Sabha refuses to accept those recommendations or in case no A
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 B
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 C
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 D
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 E
‘money bill’ be certified to be so by the Speaker before it is transmitted
to the Rajya Sabha for 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 F
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, G
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.” H
80 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B
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
C 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.
101. This provision was initially interpreted in MSM Sharma vs.
D 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
E 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
F 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
G 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
20
H AIR 1959 SC 395.
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[RANJAN GOGOI, CJI]

in any court of law’. The Constitution of India however, under Article A
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 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 B
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 C
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 D
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 E
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 F
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 G
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 President made under Article 217(3).
21
(2007) 3 SCC 184
22
(1971) 1 SCC 396 H
82 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B 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
C 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
D 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
E 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; statutory interpretation being a judicial exercise, regardless of
the immunities granted to parliamentary proceedings under the Bill of
F 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
G 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
23
H [2005] UKHL 56.
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that Article 110(3) of the Constitution would act as an express bar A
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 B
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 C
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 D
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.”
107. This was relied upon in Yogendra Kumar Jaiswal vs. State
of Bihar25, wherein a division bench of this Court refused to judicially E
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 F
(Retd.) and Anr. v. Union of India 26, 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 G
legislative setup, observed that Article 110 being an exceptional provision,
must be interpreted narrowly. Although the majority opinion did not
24
(2014) 11 SCC 415.
25
(2016) 3 SCC 183
26
(2019) 1 SCC 1. H
84 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C of the speaker is subject to judicial 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
D 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
E 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
F 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
G 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
H Finance Act, 2017.
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112. Provisions of Part XIV can be broken down into three broad A
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
B
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.
C
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’.
D
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 E
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 record the majority opinion that the bill in question was rightly
F
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.
G
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

27
(1991) Supp. 2 SCC 608
28
(1993) Supp. 3 SCC 97 H
86 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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
B
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
C 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”.
D
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
E 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,
F 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
G 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
29
H (1992) Supp. 2 SCC 651
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interpretation of Article 110(1) specifically with reference to sub-clauses A
(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.
B
A liberal and wide interpretation, on the other hand, possibly exposits
an 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,
C
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 D
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 E
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 F
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 G
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 H
88 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C Consolidated 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
D 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
E 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
F 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
G
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
H under the Administrative Tribunal Act or the National Green Tribunal
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Act. The bill could however state that the expenditure would be charged A
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 B
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 C
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
D
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 E
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,
F
then the entire Finance Act, 2017 would be an 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
G
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. H
90 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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’
B 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
C 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) makes its application difficult to the present
case and raises a potential conflict between the judgements of
D 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
E 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
F 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
G 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,
H yet there was no uniformity in administration. This Court was of the
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view that until a wholly independent agency for such tribunals can be A
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, 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
B
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
C
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.
D
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,
E
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, do not apply to those who have already been
appointed to the said posts immediately before the appointed date, that F
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 G
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 H
92 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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-
B 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:
C
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,—
D
(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
E 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
F 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
G
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. The first proviso states that the
incumbent officers shall hold office for such terms as may be specified
H in the rules made by the Central Government but the term shall not
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exceed five years from the date on which he assumes the office and A
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-
B
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:
C
“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 D
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 E
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 hold office as per the above provisions before the F
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.
G
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.” H
94 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C
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,
D process for selection, and terms and conditions of service including
salaries allowance, resignation and removal through delegated 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.
E 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:
F
“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
G
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

30
1951 AIR 332
31
H (2015) 4 SCC 770
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(1) that legislatures in India both before and after the Constitution A
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
B
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 C
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 D
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 :
“The true distinction ..... is this. The legislature cannot delegate
the power to make a law; but it can make a law to delegate a E
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 F
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. G
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 H
96 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.”
B
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
C 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
D
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
E task of subordinate legislation by its very nature is ancillary to the statute
which delegates the power to make it. When the 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
F 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
G 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
H function and work effectively.
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134. A Division Bench of this Court in Ramesh Birch v. Union A
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
B
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:
“Some thought that there is no abdication or effacement unless C
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 D
“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 E
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 F
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.”
G
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
32
1990 AIR 560 H
98 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C the purposes of the Act did not provide sufficient guidance for fixing
the rates of tax. It was observed:

“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
D 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
E 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
F 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
G
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.”
33
H AIR 1967 SC 1895
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 99
[RANJAN GOGOI, CJI]

136. A year later in Municipal Corporation of Delhi v. Birla A
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 B
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: C

“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 D
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 E
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
F
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.”
G
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
34
AIR 1968 SC 1232 H
100 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C
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
D
created three instrumentalities 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
E 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
F
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
G 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
35
(1975) 1 SCC 492
36
(1979) 1 SCC 137
37
H (1980) 1 SCC 340
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 101
[RANJAN GOGOI, CJI]

specialist public servants. Parliament and the State Legislatures A
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
B
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 C
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
D
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 E
a generous degree of latitude must be permissible in the case of
welfare 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 F
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 G
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
38
(2015) 4 SCC 770 H
102 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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:
B “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:
C
‘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
D 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.
E 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.
51.5 The nature of the body to whom the power is delegated is
also a relevant factor in determining “whether there is sufficient
F 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 Sales 39
wherein while referring to the views of an eminent American jurist
G 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:

39
H (1974) 4 SCC 98
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 103
[RANJAN GOGOI, CJI]

“The qualifications to the rule prohibiting the delegation of A
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 B
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.”
C
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 D
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
E
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 F
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
G
appointment, and terms and conditions of service. It will be difficult to
hold that Part XIV of the Finance Act suffers from the 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. H
104 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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
D 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
independence. Individual independence has various facets which include
E 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
F 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
G 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
40
H (2016) 5 SCC 1
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 105
[RANJAN GOGOI, CJI]

enactments did not stipulate the manner of appointment, terms of office, A
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
B
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 sub-section (2A) stipulates C
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 D
(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 E
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
F
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 G
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 H
106 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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
E 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
F 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 objects of the Act. Where the
legislative policy is enunciated with sufficient clearness or a
G 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
H to us that the nature of the body to which delegation is made is
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 107
[RANJAN GOGOI, CJI]

also a factor to be taken into consideration in determining whether A
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 B
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 C
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 D
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 E
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 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 F
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. G
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
H
108 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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,
B 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:
C
“Tribunal, Appellate Tribunal and other Authorities (Qualifications,
Experience and other Conditions of Service of Members) Rules,
2017
xxxxxx
D 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,
E Appellate Tribunal or, as the case may be, Authority shall be such
as specified in column (3) of the Schedule annexed to these rules.
4. Method of recruitment.— (1) The Chairman, Chairperson,
President, Vice-Chairman, Vice-Chairperson, Vice-President,
Presiding Officer, Accountant Member, Administrative Member,
F 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
G 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
H the convener of the Search-cum-Selection Committee.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 109
[RANJAN GOGOI, CJI]

(3) The Search-cum-Selection Committee shall determine its A
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 B
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- C
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. D
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:
E
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. F

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 —
G
(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 H
110 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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:
Provided that where a Member is proposed to be removed on
B 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
C 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
D 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
E 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
F 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
G 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
H Government.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 111
[RANJAN GOGOI, CJI]

(4) After the conclusion of the inquiry, the Committee shall submit A
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 B
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- C
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 D
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 E
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 F
Member, or Member of the Tribunal, Appellate Tribunal or, as
the case may be, Authority to officiate as Chairperson, Chairman,
President or Presiding Officer.
(b) the Chairperson of the Debts Recovery Appellate Tribunal,
the Central Government shall have power to appoint the G
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. H
112 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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,
E 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.
F
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
G 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)
H Rules, 1960 and the Contribution Pension System.
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(2) In all other cases, the Accountant Member, Administrative A
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 B
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 C
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.
(2) Casual Leave not exceeding eight days may be granted to
the Chairman, Chairperson, President, Vice-Chairman, Vice- D
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 E
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 F
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
G
(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 H
114 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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.
C (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.
D 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
E 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-
F 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.
G (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,
H Appellate Tribunal or Authority.
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(4) The Chairman, Chairperson, President, Vice-Chairman, Vice- A
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 B
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 C
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). D
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
E
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, F
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.” G
(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: H
116 SUPREME COURT REPORTS [2019] 16 S.C.R.

A “Industrial Tribunal:
Search-cum-Selection Committee for the post of the Presiding
Officer, -
(i) a person to be nominated by the Central Government-
chairperson;
B
(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;
C
(iv) two experts to be nominated by the Central
Government- members.
Income Tax Appellate Tribunal:
(A) Search-cum-Selection Committee for the post of the
D 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
E
(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
F 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)-
G member;
(iii) President of the Income tax Appellate Tribunal –
member; and
(iv) such other persons, if any, not exceeding two, as the
H Minister of Law and Justice may appoint-member.
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Central Administrative Tribunal: A
(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, B
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; C

(v) one expert, to be nominated by the Central
Government of India - member.
(B) Search-cum-Selection Committee for the post of
Administrative Member, – D
(a) a person to be nominated by the Central Government
- chairperson;
(b) Chairman of the, Central Administrative Tribunal –
member;
E
(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 F
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 G
save for token representation of the Chief Justice 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 H
118 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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
D appointment and administration of 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
E 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]

F 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
G 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
41
(1973) 4 SCC 225
42
(2010) 11 SCC 1
43
H (2014) 10 SCC 1 [Para 107 & 126]
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Members of Tribunals were also highlighted in the Report as reasons A
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 B
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 C
Articles 323-A and 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
D
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 E
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, F
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 G
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 H
120 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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
E 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
F 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
G
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 character and inspire public confidence. Any scheme of
decentralisation of administration of justice providing for an
H alternative institutional mechanism in substitution of the High
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Courts must pass the aforesaid test in order to be constitutionally A
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 B
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
C
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. D
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 E
against the constitutional scheme inasmuch as they 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 F
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 G
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:
44
(2016) 5 SCC 1. H
122 SUPREME COURT REPORTS [2019] 16 S.C.R.

A “(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.
B (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
C 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
D
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
E experience are prescribed to be eligible for adjudicatory posts such as
that of the Presiding Officer. 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
F 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
G 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
H
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or any other matter which in the opinion of the Central A
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 B
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 C
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 D
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 a Technical or Non-Judicial member is a clear act of dilution and an
encroachment upon the independence of judiciary. It was further ruled E
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:
F
“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 G
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 H
124 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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]
C , 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
D
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
E 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
F 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
G 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
H equivalent qualifications and commensurate stature of District
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Judges. The conditions of service of the members should be such A
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 B
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 C
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 D
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 E
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 F
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
G
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 H
126 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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
E
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 transfer, the
F 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
G
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
H recognised the world over. The constitutional conventions in
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respect of Jamaica, Ceylon, Australia and Canada, on this aspect A
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
B
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 C
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- D
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 E
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. F
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 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
G
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 H
128 SUPREME COURT REPORTS [2019] 16 S.C.R.

A “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
B 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
C 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.

D 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-judicial body and a legitimate
replacement of Courts, must essentially possess a dominant judicial
character through their members/presiding officers. It was observed
E 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
F 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:
G
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
H Supreme Court or a Judge of a High Court.
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(2) The Member of the Appellate Tribunal shall be a person A
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 B
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 C
institution command respect with the populace. Anomalous situations
created by allowing 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 D
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 E
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 F

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 G
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 H
130 SUPREME COURT REPORTS [2019] 16 S.C.R.

A present Rules it is permissible for the Central Government to appoint
an enquiry committee for 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
B
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
C 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
D 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
E 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
F 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
G 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
H Court judges.
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(D) Term of Office and Maximum Age A

172. Various enactments providing for appointment and other
incidentals of members have been brought to our notice to demonstrate
an apparent disparity in age of superannuation of Members and
Chairpersons/Presiding Officers of different Tribunals. Illustratively,
B
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 C
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 D
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
E
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 F
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 G
Officer and Member of a Tribunal is because Chairman/Presiding
Officer is not a 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. H
132 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D
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
E legislature intended to incorporate uniformity in the administration of
Tribunal by virtue of Section 184 of Finance Act, 2017. Nevertheless,
such 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
F
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.
G
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.
H
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[RANJAN GOGOI, CJI]

(E) Contradictions in the Rules A
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 B
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 C
tenure of Members, Vice-Chairman, Chairman, etc. must
be increased with due consideration to the prior
decisions of the Court.
(b) The difference in the age of superannuation of the
Members, Vice-Chairmen and Chairmen, as formulated D
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.
E
(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 F
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 G
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
H
134 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B
(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.
C
(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)
D (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
E 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
F 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,
G 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 supervision of a Tribunal by a
department/ministry which is a party before it. This Court recommended
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 135
[RANJAN GOGOI, CJI]

constitution of an independent agency by the concerned Ministry, to A
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
B
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
C
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 D
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 E
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 F
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 G
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 Tribunals in U.K., this Court noticed a H
136 SUPREME COURT REPORTS [2019] 16 S.C.R.

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
B 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
C
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/
D 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
E 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
F 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
G for all intents and purposes. The expenditure to be incurred on the
functioning of each Tribunal has to be necessarily a charge on the
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
H that the Tribunals are not under the financial control of the Department,
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[RANJAN GOGOI, CJI]

who is a litigant before them, but it may also enhance the public faith A
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 B
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 C
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 D
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.
E
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 F
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 G
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
45
(2005) 6 SCC 344 H
138 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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.”
E
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
F 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
G 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
H UP BY ACTS OF PARLIAMENT UNDER ARTICLES
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323-A AND 323-B OF THE CONSTITUTION CAN BE A
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 B
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 C
status of certain officials is 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 D
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. E
192. A similar situation arose in T.N. Seshan vs. Union of
46
India 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 F
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 G
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
46
(1995) 4 SCC 611. H
140 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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
D
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
E 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
F
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
G 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
H
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[RANJAN GOGOI, CJI]

conceded that the CEC could not legitimately claim to be equated A
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 B
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 C
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 D
of the Constitutional trust accorded in them. 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 E
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 F
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 G
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
47
Justice VR Krishna Iyer, “Why Stultify Judges’ Status?”, (2002) 2 LW (JS) 85
(June, 2000) H
142 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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 instrument to
undermine the order of precedence clearly accorded under the
C
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
D 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
E 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
F 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
G now increased to several dozens. The Constitution of India (42 nd
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
H jurisdiction of all Courts except the Supreme Court under Article 136.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 143
[RANJAN GOGOI, CJI]

Later, in L. Chandrakumar (supra), this court very aptly held that A
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
B
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 C
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 D
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:
E
(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.
F
(iv) Transfer cases under Articles 139 and 139A.
(v) Contempt of Court under Article 145.
Appellate jurisdiction:
(i) Appeals against orders of High Courts with certificate
of there being substantial constitutional questions under G
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. H
144 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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
B 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:
C (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
D
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
E the 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
F 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,
G 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
H expand the jurisdiction of the Supreme Court in non-criminal matters.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 145
[RANJAN GOGOI, CJI]

Secondly, Article 134(2) does not encompass matters other than those A
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); B

(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) C
before the establishment of National Tax Tribunal;
(v) Section 130E of the Customs Act, 1962 (52 of 1962);
(vi) Section 19(1)(b) of the Contempt of Courts Act, 1971
(70 of 1971);
D
(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 E
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 F
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); G

(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); H
146 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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
B 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);
C (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);
D
(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).
E 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
F 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
G 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 -
H 90,000 cases annually, thus amounting to a staggering 4,000 - 6,000
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 147
[RANJAN GOGOI, CJI]

cases per bench. Out of all the cases instituted before this Court, less A
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 B
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 C
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 D
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. E
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
conflicts or to safeguard the fundamental rights of citizens, this Court F
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 G
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 H
148 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C
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
D 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
E
it was 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
F 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
G 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

48
H (1986) 4 SCC 767
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 149
[RANJAN GOGOI, CJI]

Article 136 was never meant to be used in this manner as was very A
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 B
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 C
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. D
213. Such a proposed restrictive appellate jurisdiction would
mirror the practice of the highest Courts in various other jurisdictions.
The Supreme Court of the United States in the famous case of
Marbury vs. Madison 49 noted that it was impermissible for the
legislature to expand its original jurisdiction. After examining the E
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. F

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 G
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
49
5 U.S. (1 Cranch) 137 (1803). H
150 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
and commercial.
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
C
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
D 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
E 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
F 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
G 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.

50
H (2015) 6 SCC 773.
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[RANJAN GOGOI, CJI]

43. Section 30 provides for an appeal to this Court subject to A
leave granted under Section 31 of the Act. By clause (2) of
Article 136 of the Constitution of India, the 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
B
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 C
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
D
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 E
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
F
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. G
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, H
152 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D in which justice is dispensed by them 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
E 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.
F 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
G 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
H subject to the High Court’s writ jurisdiction under Articles 226/
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 153
[RANJAN GOGOI, CJI]

227 of the Constitution, before a Division Bench of the High Court A
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 B
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. C
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: D

“… 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
E
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 the power
under Article 226 has to be exercised to effectuate the rule of
law and not for abrogating it.” F

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
G
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

51
(1997) 5 SCC 536
52
(1955) 2 SCR 1 H
154 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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
E 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
F of Constitutional functions by this Court and also affects access to
justice for citizens, it is high time that the Union of India, in 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
G 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
H the Union undertake such an exercise expeditiously, preferably within
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[RANJAN GOGOI, CJI]

a period of six months at the maximum, and place the findings before A
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
B
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 C
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 D
mechanisms are equally effective, 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 E
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 F
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 G
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. H
156 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B accorded by the Speaker of the Lok Sabha in respect
of Part-XIV of the Finance Act, 2017 is referred to a
larger Bench.
(ii) Section 184 of the Finance Act, 2017 does not suffer
from excessive delegation of legislative functions as
C 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
D 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
E 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
F 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
G
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
H homogeneous classes.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 157
[RANJAN GOGOI, CJI]

(vi) It would be open to the Central Government to provide A
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.
B
(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
C
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
D
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. E
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 F
with and thereafter constitute adequate number of
Benches commensurate with the existing and anticipated
volume of work.
INTERIM RELIEF
229. As the Tribunal, Appellate Tribunal and other Authorities G
(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 H
158 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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.
C

DR. DHANANJAYA Y. CHANDRACHUD, J
INDEX
A Introduction
D
A.1 Challenges of the tribunal structure
A global trend
The old and the new
Domain specialisation
E
Expedition
Impact assessment
Independence

F A.2 A brief history of tribunalisation in India
A.3 Shortcomings of the current framework

B The Reference to the Constitution Bench
G C Money Bills
Ordinary Bills, Money Bills and Financial
Bills
Money Bills : Article 110

H Certification by the Speaker
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 159
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

Final but not conclusive A
Matters of procedure and substantive
illegalities
D Puttaswamy: Judicial review of the certificate of the
Speaker
B
E Role of the Rajya Sabha
Bicameralism
F Merits of the challenge
F.1 Passage as a Money Bill C
F.2 Violation of directions issued by this Court
F.3 Severability
G Conclusion
D
A Introduction
A.1 Challenges of the tribunal structure
A global trend
1. India is no exception to the global trend towards the E
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 F
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 G
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. H
160 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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
E 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 tribunals. The
assumption which underlies the setting up of tribunals is that those who
F 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
G 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
H requirements of the subject areas carved for the tribunal.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 161
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

4. The extent to which the purpose of setting up tribunals is A
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
B
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 C
only replicate a conventional adjudication in a court of law which the
tribunal seeks to substitute.
Expedition
5. Apart from specialisation, a significant reason for the
establishment of tribunals is expedition in the course of justice. This is D
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 E
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 F
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. G
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. H
162 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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,
E 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.
Independence

F 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
G 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.
H Hence, in preserving the independence of the tribunals as a facet of
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 163
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

judicial independence, the effort must be to ensure that the adjudicatory A
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
B
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 C
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 D
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 E
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 F
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 G
Administrative Tribunals Act 19852 for the setting up of tribunals to deal
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.
2
“1985 Act” H
164 SUPREME COURT REPORTS [2019] 16 S.C.R.

A exclusively with service matters. In S P Sampath Kumar v Union of
India3 (‘Sampath Kumar’), the first challenge to the constitutionality
of 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
B
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
C Court. It was also held that a High-Power Selection Committee4 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
D
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
E 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 disputes referred to in those Articles.
Overruling the decision in Sampath Kumar, this Court drew a
F
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.
3
(1987) 1 SCC 124
4
“We do not want to say anything about Vice-Chairman and members dealt with in
G 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
H (1997) 3 SCC 261
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 165
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

13. Chief Justice A M Ahmadi noted that the Constitution A
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 B
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 C
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) D
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.
E
14. In Union of India v R Gandhi, President, Madras Bar
Association6 (‘R Gandhi’), the constitutional validity of Chapters 1-
B and 1-C of the Companies Act, 1956 as inserted by the Companies
(Second Amendment) Act 2002 which provided for the constitution of
a National Company Law Tribunal7 and the National Company Law
Appellate Tribunal8 was challenged. Justice R V Raveendran noted that F
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 G
availability of expertise and experience related to the field of
adjudication’.
6
(2010) 11 SCC 1
7
“NCLT”
8
“NCLAT” H
166 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C ‘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 and
NCLAT. Several suggestions to amend part 1-B and 1-C were issued,
D
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 India10 (‘Madras
Bar Association II’), the constitutional validity of the National Tax
E Tribunal Act 200511 and the Constitution (Forty-Second) Amendment
1976 was challenged on the ground of violating the basic structure of
the Constitution. The National Tax Tribunal12 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
F 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
G the Tribunal should be appointed in the same manner and should be

9
Administrative Tribunals Act 1985, Information Technology Act 2000, Companies
Act 1956 as amended (Chapter 1B).
10
(2014) 10 SCC 1
11
2005 Act
12
H “NTT”
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 167
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

entitled to the same security of tenure as the judges of the Court sought A
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
B
Chandra Kumar and R Gandhi that the appointment of technical
members is 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 C
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 D
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 E
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 F
provisions were rendered ‘otiose and worthless’. Hence, the 2005 Act
was struck down in its entirety.
19. Pursuant to the enactment of the Companies Act 2013, a
Constitution Bench of this Court in Madras Bar Association v Union
of India13 dealt with the contention that despite the directions issued G
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
13
(2015) 8 SCC 583 H
168 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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
D
reproduced below:
Tribunal As On Number of Pending cases
1 Central Administrative Tribunal July, 2017 44,333
2 Railway Claims Tribunal 30.09.2016 45, 604

E 3 Debt Recovery Tribunal 03.07.2016 78,118
4 Customs, Excise, and Service Tax End of 2016 90,592
Appeal Tribunal
5 Income Tax Appellate Tribunal End of 2016 91, 538

21. Vidhi Centre for Legal Policy in a report titled “Reforming
F 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
G 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
H (e) proclivity to appoint judges/bureaucrats.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 169
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

B) Administrative concerns: lack of uniformity in A
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 B
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 C
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 D
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 E
significant cause for delays is absenteeism of tribunal members.
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 F
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. G
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
H
170 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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.
C Money Bills

D 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
E
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 Bill15. Special provisions are engrafted

F 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;
G 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
H deliberating and voting on the Bill:
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 171
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

into the Constitutin for the passage of Money Bills. Unlike an Ordinary A
Bill which can originate in either House of Parliament, a Money Bill
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 cannot be introduced in the Council
of States. Article 109 specifies the procedure for the passage of a
B
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 C
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

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
D
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 E
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:
F
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 G
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.
H
172 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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
E
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 character. If the Lok Sabha rejects the recommendations, it is
F 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
G 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.
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 173
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

25. The third category of Bills - Financial Bills, is specified in A
Article 11716. 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 B
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.
Money Bills : Article 110
Article 110 contains a definition of Money Bills in the following C
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:—
D
(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
E
obligations undertaken or to be undertaken by the
Government of India;

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 F
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,
G
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. H
174 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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;
B (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
C 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).

D (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.
E
(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
F
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.”
26. Tracing the origin and evolution of Money Bills, Thomas
Erskine May in “The Treatise on The Law, Privileges,
G 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

17
H C. Knight & Company, 1844
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 175
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

Commons was possessed of the legal right to originate grants, but the A
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
B
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 : C
“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, D
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.”
Section 1(2) defines the expression Money Bill in the following E
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; F
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 G
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.” H
176 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C for all purposes, and shall not be questioned in any court of
law.”
(Emphasis supplied)
The Treatise by Erskine May contains the following elaboration
D 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 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
E 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
F 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
G 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
H withholding a certificate. A bill which contains any of the
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 177
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

enumerated matters and nothing besides is indisputably a 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
B
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 C
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.” D
(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 E
amendment making provision—
(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 F
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 G
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 H
178 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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 is not the intention I must say the
E 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

F 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
G 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
18
H Constituent Assembly Debates (20 May 1949)
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 179
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

construction since it indicates that a Bill shall not be deemed to be a 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 B
(iii) The imposition, abolition, remission, alteration or
regulation of any tax by any local authority or body for
local purposes.
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 C
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 D
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
E
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. F
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. G
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 Constitution Committee. B Shiva
Rao makes a reference to Article 75 of the draft which provided
that : H
180 SUPREME COURT REPORTS [2019] 16 S.C.R.

A “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:
B “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.
C 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.
D 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
E 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
F 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
G
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
H Institution of Public Administration (2012), at p. 32
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 181
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

The Irish model contained a provision for resolving a dispute on A
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
B
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 C
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 D
(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. E

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 F
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 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. G
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
20
B. Shiva Rao, The Framing of India’s Constitution: Selected Documents, Indian
Institution of Public Administration, at p. 281. H
182 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B 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—
C
(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.”

D “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.”
E
“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
F in question in any court.”
(Emphasis supplied)
In N P Ponnuswami v Returning Office, Namakkal
Constituency, Namakkal, Salem, Dist.21, a six judge Bench
G 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
21
H 1952 SCR 218
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 183
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

while the first two articles begin with the words “subject to the A
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 B
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 C
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 D
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 E
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 F
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
G
whether the Chairman or the Speaker of a House has become
subject to such disqualification, the question shall be 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)
H
184 SUPREME COURT REPORTS [2019] 16 S.C.R.

A In Union of India v Jyoti Prakash Mitter22, 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
B 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
C 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,
D 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 Patel23 held that the finality
attributed to the decision of a disciplinary authority that it is not
E 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 :
F
“111. … That Paragraph 6(1) of the Tenth Schedule, to the
extent it seeks to impart finality to the decision of the 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
G infirmities based on violations of constitutional mandates, mala
fides, non-compliance with rules of natural justice and perversity,
are concerned.”
22
(1971) 1 SCC 396
23
(1985) 3 SCC 398
24
H 1992 Supp. (2) SCC 651
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 185
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

The Constitution Bench held: A
“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 B
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….”
C
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 D
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.—
E
(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
F
before the commencement of this Constitution with
respect to the legislature of the Dominion of India shall
have effect in 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. G
(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. H
186 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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:
B “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
C 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 193525. In the Commentary on the Government
D of India Act 1935 by N Rajagopala Aiyangar26, 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
E 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 constitution. It is to
irregularities in the domain of the former class that this
sub-section addresses itself. Under the latter head would
F fall defects arising from want of legislative competence,
which is a matter external to the assembly and not a matter
of procedure.”
(Emphasis supplied)

25
41. – (1) The validity of any proceedings in the Federal Legislature shall not be
G 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
H (1937) at page 63.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 187
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

38. In the decision of a Constitution Bench in Babulal Parate v A
State of Bombay27, 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 B
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 C
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 D
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
E
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
distinction found expression in a seven judge Bench decision of this Court
in Special Reference No. 1 of 196428 (“Special Reference”). This
Court held : F
“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 G
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
27
(1960) 1 SCR 605
28
Powers, Privileges and Immunities of State Legislatures, In re (Special Reference
No. 1 of 1964), AIR 1965 SC 745 H
188 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C (“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)
D 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
E
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.”
A subsequent Constitution Bench decision in Raja Ram Pal v
F
Hon’ble Speaker, Lok Sabha30 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
G 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

29
(2010) 4 SCC 1
30
H (2007) 3 SCC 184
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 189
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

excluded), it is plain and clear that prohibition against A
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 B
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…” C
(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 D
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 E
mandated under a specific provision of the Constitution. Hence the
provisions contained in Article 122 which protect an alleged irregularity
of procedure in the proceedings in Parliament being questioned cannot
extend to a substantive illegality or a violation of a constitutional
mandate.
F
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 G
(“Mangalore Beedi”);
(II) Mohd. Saeed Siddiqui v State of Uttar Pradesh 32
(“Mohd. Saeed Siddiqui”); and
31
AIR 1963 SC 589
32
(2014) 11 SCC 415 H
190 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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
B 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
C this submission, the Constitution Bench held that the substitution of a
new coinage did not amount to an enhancement of tax. 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:
D “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
E 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
F 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
G
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.

33
H (2016) 3 SCC 183
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 191
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

43. Subsequently in Mohd. Saeed Siddiqui, a three judge Bench A
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 challenged
on the ground that the Bill could not have been introduced as a Money
B
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:
C
“ (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 D

(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 E
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.”
F
The decision adverted to Article 212 (1) (which corresponds to
Article 122(1)) and to Article 25534 of the Constitution. While the
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, G
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. H
192 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B involving the accumulation of properties 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
C
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
D 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
E 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
F 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
G 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 Governor, the assent of the
H President or of the Governor and where the recommendation or
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 193
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

previous sanction required is that of the President, the assent by the A
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. B

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 Sinha35 which was adverted to in Mohd Syed Siddiqui was
discussed in the Special Reference to hold that the validity of the C
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 D
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 E
Subsidies, Benefits and Services) Bill 2016 was certified as a Money
Bill under Article 110 by the Speaker of 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 F
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 India38
(“Kuldip Nayar”) and second, the Rajya Sabha as an “important G
institution signifying the constitutional federalism”39.
35
AIR 1960 SC 1186
36
(2019) 1 SCC 1 (“Puttaswamy“)
37
Puttaswamy at para 462
38
(2006) 7 SCC 1
39
Puttaswamy at para 463 H
194 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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.
C 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
D have considered the arguments advanced by both the sides.”
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 justiciability42 Justice Sikri rejected specifically
E 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
F 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
G 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:
40
Puttaswamy at para 463
41
Puttaswamy at para 463
42
H Puttaswamy at para 455
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 195
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

“455.1.Sub-Committee on Judicial Accountability v. Union of A
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) B
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 C
established by the process of authentication under Aadhaar was
referable to Article 110 since these financial benefits were “extended
with the support 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 D
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
E
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, F
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 G
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

43
Puttaswamy at para 466 H
196 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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:
B
“515.(6). Whether the Aadhaar Act could be passed as “Money
Bill” within the meaning of Article 110 of the Constitution?”
The answer in paragraph 515.1 is in the following terms:
“515.1. We do recognise the importance of Rajya Sabha (Upper
C
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
D 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
E
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
F
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
G 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.
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 197
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

In any case, a part of Section 57 has already been declared A
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 B
held) receive strict interpretation; (ii) Section 7 constituted the core
provision of the Aadhaar Bill which was referable to Article 110 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
C
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 D
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 E
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:
F
“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 G
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 Nation, Oxford H
198 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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
D
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
E 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
F 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
G 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
H
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 199
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

not fulfil the essential constitutional condition under Article 110 A
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 Article 110(1), the said requirement cannot B
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 C
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 D
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
E
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. F
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 G
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
H
200 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
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
B 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
C
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
D
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
E 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
F 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:-
G 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
H chosen in such manner as Parliament may by law prescribe.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 201
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

58. The Rajya Sabha, unlike the Lok Sabha, is not subject to A
dissolution but one-third of its members retire by rotation45. 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 B
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. C
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
D
59. Bicameralism emerged in 14th 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
E
possessed of property as required. Across the Atlantic, the Constitution
of the United 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 F
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
G
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. H
202 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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
D 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. …
E
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. …

F 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.”
60. Madison conceived of the Senate as a body which imposes
a salutary check on government. To Madison, the requirement of
G
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
H constitutional governance.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 203
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

HM Seervai in his classical text, Constitutional Law of India47 A
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. B
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 C
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 D
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 E
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 F
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 President; that power is increased indirectly through the
Council of States, which is elected by the Legislative Assemblies
of States.” G

61. The Rajya Sabha Secretariat has, in its publication titled
“Second Chamber in Indian Parliament: Role and Studies of Rajya
47
HM Seervai, Constitutional Law of India, Universal Law Co Pvt Ltd, Vol I, (1991),
at pp.299-300 H
204 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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;
D (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
E 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
F 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
G
within the period allowed for its approval, then the
Proclamation can remain effective if a resolution
approving it, is passed by Rajya Sabha.”
62. In Kuldip Nayar, Chief Justice Y K Sabharwal speaking for
the Constitution Bench emphasised the role of the Rajya Sabha in the
H following observations:
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 205
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

“47. The Rajya Sabha is a forum to which experienced public A
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
B
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 C
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 D
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 E
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 F
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” G
appropriately justifies its federal importance.”
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 H
206 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B
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
C
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 Sabha48 explains that
D 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
E
(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
President. Except these two points of difference, a Financial Bill
F 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
G 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
48
H Legislative Procedure in the Rajya Sabha,: Rajya Sabha Secretariat at p. 17
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 207
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

House of Parliament unless the President has recommended to A
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
B
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
C
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 D
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.
F Merits of the challenge E
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: F

“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:
G
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 H
208 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 2017 sought to expand the jurisdiction of the Securities Appellate
Tribunal49 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.
D 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:
E “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
F 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
G 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,
49
“SAT”
50
H “SEBI Act 1992”
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 209
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

this Rule does not rule out the possibility of inclusion of non- A
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.” B
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 C
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 D
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. E

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.”
F
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 G
iii. The Copyright Act 1957
iv. The Trade Marks Act 1999
v. The Railway Claims Tribunal Act 1987
vi. The Railways Act 1989 H
210 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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

C 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
D
xvii. The Income Tax Act 1961
xviii. The Customs Act 1962
xix. The Administrative Tribunals Act 1985
E 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

F 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
G
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
H Schedule:
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 211
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

Provided that the provisions of section 184 shall not apply to the A
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 B
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
C
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, D
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 E
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 F
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 G
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; H
212 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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,
B 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
C 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
D 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
E 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
F 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 Consolidated Fund of India and are
G 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 Sarkar51, R.K. Garg v
Union of India52 and Subramanian Swamy v Director, Central
51
(1952) SCR 284
52
H (1981) 4 SCC 675
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 213
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

Bureau of Investigation53); (ii) the importance of the doctrine of A
separation of powers (Bhim Singh v Union of India54).
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 B
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 C
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.
D
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 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 E
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 F
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 G
in deliberating and discussing on the nature of the legislative proposals.
Part XIV contains provisions which lie outside the domain permissible
under Article 110.
53
(2014) 8 SCC 682
54
(2010) 5 SCC 538 H
214 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C and conditions of service including salaries, allowances, 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
D
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
E 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
F 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
G 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-
H clauses (a) to (f) stipulated in clause (1) of Article 110 but has an
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 215
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

incidental bearing on the Consolidated Fund of India, this by itself would A
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 B
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 C
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 D
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
E
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 long as it can be F
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 G
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. H
216 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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
D represents. But the presumption of constitutionality is what it is, namely,
a 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
E 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,
F 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
G 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
H the role of the Rajya Sabha in the case of a Money Bill was engrafted
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 217
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

by the draftspersons of the Constitution with a specific purpose. In their A
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,
B
an illegality.
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 C
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 D
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 E
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
F
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
G
89. The Rules under Section 184 of the Finance Act 2017, termed
the Tribunal, Appellate Tribunal and Other Authorities (Qualifications,
Experience and Other 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: H
218 SUPREME COURT REPORTS [2019] 16 S.C.R.

A “(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
B 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
C 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
D 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
E 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
F Vice Chairpersons, Vice Presidents and Members.
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
G 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
H Government- members.”
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 219
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

It is evident that the Search-cum-Selection Committee is A
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
B
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 C
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 D
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 otherwise, conferring upon the
government such a dominating and overwhelming voice in making E
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 F
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 G
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);
H
220 SUPREME COURT REPORTS [2019] 16 S.C.R.

A (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—
B Member.”
(Emphasis supplied)
Significantly, Section 10 (FX) which was inserted into the
Companies Act 1956 by the Companies (Second Amendment) Act 2002
C 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
D 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;
E (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;

F (e) Secretary in the Ministry of
Finance and 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
G 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
H (as the learned Judge then was) held:
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 221
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

“131. Section 7 cannot even otherwise be considered to be A
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
B
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 C
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
D
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 E
muster under a system governed by the rule of law that accords
primacy to the independence of the judiciary. 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 F
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 G
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: H
222 SUPREME COURT REPORTS [2019] 16 S.C.R.

A “(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.
B
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
C 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
D 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.
95. Section 184 stipulates that the Chairperson, Vice-Chairperson,
E 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:
F
“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
G 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
H to NTT would be constrained to decide matters in a
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 223
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

manner that would ensure his reappointment in terms of A
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
B
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.” C
(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 D
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.”
96. The Central Government to whom a rule making authority
was conferred by Section 184 has not observed the principles which E
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 F
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: G
“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 H
224 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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:
B
“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
C 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. Instead, they
guarantee to us all the rights to personal and spiritual self-
D 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
E 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:

F “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
G 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
H by a creeping assertion of executive power. This is unconstitutional.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 225
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

F.3 Severability A
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 B
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 Union of India (“Chamarbaugwalla”) 55.
Justice Venkatarama Ayyar, speaking for a Constitution Bench of this
Court observed: C
“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 D
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 E
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 F
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?
G
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.”
55
1957 SCR 930 H
226 SUPREME COURT REPORTS [2019] 16 S.C.R.

A Adverting to the decision in State of Bombay v F N Balsara56,
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.”
B 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 statutes. After adverting to these
decisions in Chamarbaugwalla, Justice Venkatarama Ayyar concluded:
“21…The resulting position may thus be stated: When a statute
C 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
D 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
E
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,
F 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
G 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
56
1951 SCR 682
H 57
1953 SCR 1069
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 227
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

notwithstanding that the rest has become unenforceable. A
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 B
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 C
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.
5. The separability of the valid and invalid provisions of a D
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 E
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 F
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 G
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 H
228 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B
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
C 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 proceedings with certain modifications. We are unable to accept
the submission. Part XIV of the Finance Act 2017 could not have been
D 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
E 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
F 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.

G 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
H lack of a single authority to ensure competence and uniform service
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 229
[DR. DHANANJAYA Y. CHANDRACHUD, J.]

conditions has led to a fragmented tribunal system that defeats the A
purpose for which the system was constituted. Moreover, the co-
ordinating authority for all tribunals must be the 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.
B
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
C
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:
D
(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 E
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 F
the Union government in consultation with the Chief
Justice of India.
106. The senior-most among the Judges nominated by the Chief
Justice of India shall be designated as the Chairperson of the NTC.
G
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
58
“NTC” H
230 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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:
B
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
C
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
D 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
E personnel. Hence, there is an urgent 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)
F 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.
G 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
H function is the selection of members trained in their discipline. Keeping
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 231

this in mind, the prescription of qualifications for members of tribunals A
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 B
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 the legislature to define the conditions
C
which must be fulfilled for appointment after assessing the need for
domain specific knowledge.

DEEPAK GUPTA, J.
1. I have had the privilege of going through the detailed and D
erudite judgments of the Chief Justice and brother Chandrachud, J.
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. E

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 F
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 G
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 H
232 SUPREME COURT REPORTS [2019] 16 S.C.R.

A is how to ensure that these tribunals function effectively, fearlessly and
efficiently.
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
B 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
C 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
D 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?
E
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
F 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
G 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
H suffer from the vice of excessive delegation. I am also of the view
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 233
[DEEPAK GUPTA, J.]

that though the issue with regard to the Money Bill may be referred to A
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.
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 B
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 C
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. D

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, E
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:
F
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) G

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
1
(1997) 3 SCC 261 H
234 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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.
B 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.
C 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
D
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
E 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
F 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 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
G men.
13. One of the essential ingredients of both democracy and rule
of law is an independent and fearless judiciary. A free and vibrant
2
Minerva Mills Ltd. v. Union of India, (1980) 2 SCC 591; L. Chandra Kumar v.
Union of India, (1997) 3 SCC 261
H 3
Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 235
[DEEPAK GUPTA, J.]

country is one where there is freedom of expression and governance A
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. B

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 C
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 that these tribunals function fairly and
independently like Courts are expected to. With the increase in
D
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 E
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
F
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, G
there is a need to have 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.
4
Union of India v. Madras Bar Association, (2010) 11 SCC 1 H
236 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C 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.
17. In this background, I shall deal with the various issues culled
out by the Chief Justice.
D 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
E 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
F 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-
G essential” matters to the executive. Every condition need not be laid
down by the Legislature.
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
H made to a few.
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 237
[DEEPAK GUPTA, J.]

21. A 7-Judge Bench of this Court in Re Article 143, A
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 B
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 C
delegated legislation.
22. In Gwalior Rayon Mills v. Assistant Commissioner, Sales
Tax6, Khanna, J. dealt with this matter in his inimitable style. 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: D

“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. E
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 F
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
G
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.”
5
AIR (38) 1951 SC 332
6
AIR 1974 SC 1660 H
238 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B should guide formulation of delegated legislation.
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.

C “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
D 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.”
E 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
F 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.
25. Section 184 empowers the Central Government to make rules
G 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
7
AIR 1954 SC 465
8
H 1989 Supp (1) SCC 430
ROJER MATHEW v. SOUTH INDIAN BANK LTD. 239
[DEEPAK GUPTA, J.]

Authorities as specified in column (2) of the Eighth Schedule. Section A
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- B
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 C
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,
D
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; E

(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 F
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
G
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. H
240 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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 established 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
B
could not have provided that the 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
C 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
D 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
E 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.

F 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 India 11 , Madras Bar Association v. Union of India 12,
Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. 13 in essence
G should be read as the guidelines. One would expect the Union
9
(1993) 4 SCC 119
10
(2010) 11 SCC 1
11
(2014) 10 SCC 1
12
(2015) 8 SCC 583
13
H (2016) 9 SCC 103
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[DEEPAK GUPTA, J.]

Government to abide by the directions of this Court. However, this A
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
B
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.
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 C
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 D
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 E
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 F
as specified in column (2) of the 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 G
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 H
242 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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 tribunals. The 7-Judge Bench of this
C
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
D
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
E 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
F 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 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
G 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
H a period of 6 months from today till which time the present system may
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[DEEPAK GUPTA, J.]

continue. Merely giving financial autonomy to the tribunals will not do A
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 B
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 C
part and parcel of 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, D
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.
E
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 F
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 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 G
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
14
Anita Kushwaha v. Pushap Sudan, (2016) 8 SCC 509 H
244 SUPREME COURT REPORTS [2019] 16 S.C.R.

A 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
B 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
C upholding the constitution of the tribunals, a 7-Judge Bench of this Court
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
D 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
E 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
F 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.
42. To give another example, the NGT was to have its Principal
G 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
H expert members (as against the total sanctioned strength of 20 expert
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[DEEPAK GUPTA, J.]

members). The situation is extremely grim. Day in and day out we all A
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
B
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 C
from Andaman and Nicobar Islands wants to raise some issue before
the NGT he will have to come at least to Calcutta to file a case,
whereas earlier he could have filed a case before the Circuit Bench of
the Calcutta High Court at Port Blair. Here also, the hearing, if any,
will be conducted through video conferencing. There is no bench of
D
the NGT functioning in the North-East covering as many as 8 States.
Similarly, there is no bench functioning in the environmentally and
ecologically fragile States of Himachal Pradesh and Uttarakhand and
the Union Territories of Ladakh and Jammu and Kashmir. This clearly
shows that functioning of the tribunals leaves much to be desired.
43. The committee which carries out the judicial impact E
assessment of the functioning of the tribunals has to deal with a whole
lot of issues. It is neither feasible nor proper to lay down all the issues
in this judgment but I am highlighting some of them. Another important
issue which must be dealt with is whether the tribunals have really
helped in early disposal of the cases. The time spent for disposal may F
vary from case to case but we are mainly dealing with the cases which
end in the High Courts or at the Supreme Court. This must be done
not only on an all India basis but also on State to State basis. There
are many smaller States in the country where the Civil Courts and the
High Courts are not overburdened with work. In these States, the cases
are decided much faster than in many other larger States. Normally, it G
is these smaller States which do not get permanent benches, sometimes
not even Circuit Benches. It is a paradox that the States which are
judicially well administered and where disposal is quick, do not get the
permanent benches and the litigants suffer whereas States which are
very slow in disposing of the cases get more benches. Even when H
246 SUPREME COURT REPORTS [2019] 16 S.C.R.

A Circuit Benches come to these States there is a huge time gap between
two sittings. The whole purpose of providing cheaper and faster justice
gets lost because the Circuit Benches come rarely and many times the
constitution of the Circuit Benches changes on every visit resulting in
matters being reheard every time.
B 44. Having tribunals without benches in at least the capitals of
States and Union Territories amounts to denial of justice to citizens of
those States and Union Territories. It also makes the justice delivery
system very metropolis centric. This has many adverse effects. The
bench and the bar in smaller district towns and capitals of smaller States
which were handling these matters in a competent manner are deprived
C
of handling these types of cases. This also makes access to justice
expensive for the litigants. It also leads to a situation where the bench
and the bar in these areas would not have any experience of handling
matters relating to jurisdictions transferred to tribunals which they used
to handle earlier. Therefore, the local bench and bar will never develop
D and the entire bulk of work will be captured by those practicing in Delhi
or in those State capitals where benches of the tribunals are set up.
Instead of taking justice to the common man, we are forcing the
common man to spend more money, spend more time and travel long
distances in his quest for justice, which is his fundamental right.
E 45. The litigants cannot wait for judicial impact assessment and
action by the Government which may or may not take place. Experience
has shown that the judgments right from L. Chandra Kumar (supra)
to Madras Bar Association, 2010 (supra) have not been complied with
by the Union in letter and spirit. Citizens of this country cannot be denied
F justice which is the first promise made in the Preamble. Therefore, I
am of the view that in whichever State/Union Territory the bench of a
particular tribunal is not established or functioning, the litigants of that
State will have a right to invoke the extraordinary writ jurisdiction of
the jurisdictional High Court under Article 226 of the Constitution for
redressal of their grievances. They cannot be expected to go to far off
G distant places and spend huge amounts of money, much beyond their
means to ventilate their grievances. The alternative remedy of
approaching a tribunal is an illusory remedy and not an efficacious
alternative remedy. The self-imposed bar or restraint of an alternative
efficacious remedy would not apply. Such litigants are entitled to file
H petitions under Article 226 of the Constitution of India before the
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[DEEPAK GUPTA, J.]

jurisdictional High Court. In L. Chandra Kumar (supra) it was clearly A
held that the right of judicial review is a part of the basic structure of
the Constitution and this right must be interpreted in a manner that it is
truly available to the litigants and should not be an illusory right.
46. One more aspect which needs to be looked into is the need
to have a two-tier tribunal system like in the United Kingdom- a lower B
tribunal and an appellate tribunal. If there are two-tier tribunals then
there would be adjudication at the appellate level by an appellate tribunal.
Having one appellate forum within the hierarchy of tribunals would
probably lessen the burden on the High Courts and the Supreme Court.
47. Recruitment to the lower tribunal should be done on the basis C
of an objective criteria like the written test conducted for the post of
District Judges. The persons selected to the lower tribunals can be made
eligible for promotion to the appellate tribunals. In fact, there can be
common service to man more than one or more tribunals. To give an
example, there can be a common service for all the tax tribunals. There
can also be a common service for the State administrative tribunals, D
the Central Administrative Tribunal and for the judicial members of the
Armed Forces Tribunal. This will obviously require setting up of
separate tribunal services. If this is done, we will have tribunal services
from which people will rise to man these tribunals, the appellate tribunals
and also to the posts of Chairpersons of tribunals. The body carrying E
out the judicial impact assessment should also look into the issue as to
whether it would be better to have a tribunal service rather than
appointing retired judges. If members of the bar or from the
administration or from the State judiciary are appointed at the lowest
rung of the tribunal and they have a long tenure knowing that they will
retire after 15 or 20 years, one would be able to attract better talent F
and a more committed workforce. A long tenure for members is also
essential for maintaining judicial independence. They shall also have
aspirations of reaching the higher levels, which would be an inducement
for a better work culture.
48. If there are tribunal services and there is provision for appeal G
within the hierarchy of the tribunals and the High Courts exercise their
writ jurisdiction or if in some matters appeals are provided to the High
Courts in the first instance, many of the ills which plague the system
may be overcome. If the aforesaid system is followed then the question
of appointing retired Judges or bureaucrats will not arise. Learned H
248 SUPREME COURT REPORTS [2019] 16 S.C.R.

A amicus curiae in his note has raised an issue that tribunals should not
become a haven for retired persons. In my view, there should normally
be no post retiral sinecures. Though the ideal situation would be to have
no appointments from retired judges or bureaucrats, this may not be
possible in the near future because we have no tribunal services and
most of the posts at this stage may have to be filled from amongst retired
B
persons. At the same time, an effort has to be made to ensure that in
the foreseeable future the number of retired persons being reappointed
is brought down and more persons from within the tribunal services
are appointed up to the highest level in the tribunal.
49. There may be some posts which require retired judges to be
C
appointed such as Lokpal, Lokayukta, Chairpersons of the Human
Rights Commission, Chairman of the Law Commission of India, etc.
But this should not become a matter of routine especially when the
appointments are being made by the executive. If the administration
makes appointments and judges, serving or newly retired judges, are
D under consideration for such posts then the independence of the judiciary
is likely to be compromised. The public of this country still reposes great
faith in the judiciary. That faith will be eroded in case it is felt that the
appointments are made for extraneous reasons. Most judges live up to
the expectations of the high standards of integrity and propriety expected
E from them but we cannot shut our eyes to the harsh reality that there
are a few black sheep. One cannot expect justice from those who, on
the verge of retirement, throng the corridors of power looking for post
retiral sinecures. Therefore, I am of the considered opinion that the
majority of members of the selecting body must comprise of the Chief
Justice of India and/or his/her nominees and the views of the Chief
F Justice and/or his/her nominees must be given precedence over the
views of other members.
50. If retired judges of the High Courts or the Supreme Court
are good enough to man the tribunals after retirement, I do not see any
reasons why the retirement age of the High Court Judges should not
G be increased to make it at par with the retirement age of the Judges of
the Supreme Court. This would take care of the vacancies which would
otherwise arise in the next 3 years. As of 01.09.2019 as against the
sanctioned strength of 1079 judges there were 414 vacancies in the
High Courts. Given the slow pace at which these vacancies are being
H filled up, the number of vacancies is bound to rise. Though we are
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[DEEPAK GUPTA, J.]

discussing tribunals, even the independence and functioning of the High A
Courts is threatened by this humungous vacancy position.
51. I agree with the Chief Justice that an attempt should be made
to do away with filing of first appeal as a matter of right to the Supreme
Court. At present, at least 2 dozen statues provide for appeals directly
to the Supreme Court. The Supreme Court becomes a Court of first B
appeal which is highly avoidable. If we follow the law laid down in L.
Chandra Kumar (supra), the High Courts should have the jurisdiction
to entertain writ petitions against the orders of the tribunals. This will
reduce the burden on the Supreme Court. Even more importantly, the
High Courts, when they entertain these matters, will deal with them
within the limited scope of writ jurisdiction. If the jurisdiction of the High C
Courts is bypassed by providing for appeals directly to the Supreme
Court, soon a stage will come when we will have no High Court Judges
who would have heard matters in various jurisdictions. It would be
virtually impossible for them to handle such matters in the Supreme
Court where the tenure of a Judge is on an average only about 4 years. D
52. The Judicial Impact Assessment Committee can also after
assessment recommend that some tribunal(s) should be wound up and
the jurisdiction of that tribunal(s) be given back to civil courts or to the
High Courts or to some other tribunal. It can also suggest the merger
of two or more tribunals. E
53. The next issue is who should carry out the judicial impact
assessment. In my view, the Judicial Impact Assessment Committee
should comprise of two retired judges of the Supreme Court, the senior
being the Chairperson of the Committee, and one retired Chief Justice
of a High Court all three to be nominated by the Chief Justice of India. F
Out of the three at least two should have been the Chairperson or
members of tribunals. Two members of the Executive, not below the
rank of Secretary, to the Government of India, one from the Ministry
of Law and Justice and one from some other branch can also be
members but these members should be appointed in consultation with
the Chief Justice of India. G
54. The last issue is whether there should be a Commission or a
body to oversee the appointment of members of various tribunals. In
my view it is necessary to have such a Commission which is itself an
independent body manned by honest and competent persons. This body
is required to select those persons who man the specialised tribunals in H
250 SUPREME COURT REPORTS [2019] 16 S.C.R.

A terms of the law laid down in various judgments of this Court. We need
persons who not only have grassroot experience but a judicious mix of
judicial members and those with grassroot experience15. We need
persons who have an independent outlook, integrity, character and good
reputation16. We need people who are totally free from the influence
or pressure from the Government17. It is only then that the people will
B
have faith in the adjudicating mechanism of the tribunals.
55. In my view, serving Judges of the Supreme Court or the
Chief Justice of the High Courts are already overburdened and have
no time to spare. It would be much better if they could spend their time
and energy in filling up the vacancies in the High Courts rather than
C venturing into the field of tribunals.
56. I also feel that having a very large committee would not
serve the purpose. A smaller committee comprising of competent people
is a better solution and, in my view, such commission should comprise
of 2 retired Supreme Court Judges with the senior most being the
D Chairman and one retired Chief Justice of High Court to be appointed
by the Chief Justice of India. There must be one member representing
the executive to be nominated by the Central Government from amongst
officers holding the rank of Secretary to the Government of India or
equivalent. This member shall be the ex-officio convener. One expert
E member can be co-opted by the by full time members. This expert
member must have expertise and experience in the field/jurisdiction
covered by the tribunal to which appointments are to be made.
57. At the end I would like to quote what Dr. B. R. Ambedkar
said while addressing the Constituent Assembly on 25.11.1949. In his
F words:-
“Because I feel, however good a Constitution may be, it is sure
to turn out bad because those who are called to work it, happen
to be a bad lot. However bad a Constitution may be, it may turn
out to be good if those who are called to work it, happen to be
G a good lot. The working of a Constitution does not depend wholly
upon the nature of the Constitution. The Constitution can provide
only the organs of State such as the Legislature, the Executive

15
L. Chandra Kumar v. Union of India, (1997) 3 SCC 261
16
Union of India v. Madras Bar Association, (2010) 11 SCC 1
17
H R.K. Jain v. Union of India, (1993) 4 SCC 119
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[DEEPAK GUPTA, J.]

and the Judiciary. The factors on which the working of those A
organs of the State depend are the people and the political parties
they will set up as their instruments to carry out their wishes and
their politics.”
One can only hope that keeping these thoughts in mind a system
is developed which ensures selection of people having impeccable B
integrity, who are totally independent, have a good character and
reputation, are free from influence or pressure, and have requisite
experience in the jurisdictions they would deal with as Chairpersons/
Members of Tribunals.
C
Ankit Gyan Petitions disposed of.

D

E

F

G

H