View: Understanding tribunal reforms and challenges

Tribunals function as a parallel mechanism to the traditional court system. In India, some tribunals are at the level of subordinate courts with appeals lying with the High Court, while some others are at the level of High Courts with appeals lying with the Supreme Court. Tribunals were established for two main reasons: allowing for specialised subject knowledge in disputes on technical matters and reducing the burden on the court system.

The Finance Act, 2017 reorganised the Indian tribunal system to ensure uniformity in their administration by merging certain tribunals based on the similarity in their functional domain. For example, the jurisdiction of the Competition Appellate Tribunal (established under the Competition Act, 2002) was transferred to the National Company Law Appellate Tribunal (established under Companies Act, 2013). The 2017 Act also empowered the central government to make Rules to provide for the qualifications, appointments, term of office, salaries and allowances, removal, and other conditions of service for chairpersons and members of these tribunals.

Last month, the Tribunals Reforms Bill, 2021 was passed by the Parliament and received the assent of the President (i.e., it became an Act). It abolishes nine existing appellate bodies and transfers their functions mainly to high courts. The appellate bodies being abolished include: (i) the Appellate Tribunal under the Cinematograph Act, 1952, (ii) Appellate Boards under the Trade Marks Act, 1999, the Copyright Act, 1957, and the Patents Act, 1970, and (iii) the Airport Appellate Tribunal under the Airport Authority of India Act, 1994.

The 2021 Act also amends the Finance Act, 2017, to bring certain provisions (such as qualifications, appointments, term of office, salaries and allowances of tribunal members) under the purview of the 2021 Act. Currently, these provisions are notified through Rules under the Finance Act, 2017. We discuss some issues with the 2021 Act and questions that it raises.

While introducing the Bill, the central government stated that as per recent data the presence of tribunals in certain sectors has not led to faster adjudication. Such tribunals add considerable cost to the exchequer, and abolishing them would help reduce these costs. However, transferring functions of an appellate body to a High Court may further increase the disposal time of cases as most High Courts already have high pendency. Such delays could also increase the financial burden on the parties to a case.  Note that as of September 1, 2021, there are over 56 lakh cases pending in High Courts across India.

In 2019, the Supreme Court had considered the question of whether merging of tribunals, in the absence of adequate infrastructure or budgetary grants, would overburden the judiciary. It noted that no judicial impact assessment is conducted to understand the need for such rationalisation of tribunals.  It directed the central government to assess such requirements.  Neither the Finance Act, 2017 which reorganised several Tribunals nor the 2021 Act provides a Financial Memorandum which presents an estimate of the resources required as a result of such reorganisation of tribunals. Another question which such rationalisation of tribunals raises is, if there are issues of shortage of administrative capacity in tribunals, should their capacity be increased, or their caseload be shifted to other courts.

The 2021 Act replaces an Ordinance with similar provisions that were promulgated in April 2021. In July 2021, the Court had struck down certain provisions of the Ordinance. The 2021 Act does not conform to the judgement of the Supreme Court. This raises certain issues with regards to the fair administration and functioning of tribunals:

A four-year term of office of Chairpersons and members: The 2021 Act specifies that the term of office for the Chairperson and members of tribunals will be four years. While reviewing the Ordinance, the Court had stated that specifying the term of office at four years violates the principles of separation of powers, independence of the judiciary, rule of law, and equality before the law.

Over the years, the Supreme Court has stated that the short tenure of members of a tribunal along with provisions of re-appointment increases the influence and control of the executive over the judiciary. It also discourages meritorious candidates from applying for such positions as they may not leave their well-established careers to serve as tribunal members for a short period.  The Court has also noted that security of tenure and conditions of service (which includes adequate remuneration) are core components of the independence of the judiciary. The Supreme Court had stated that the term of office for the Chairperson and other members must be five years (subject to a maximum age limit of 70 years for the Chairperson and 67 years for other members).

Minimum age requirement of 50 years for Chairperson and members: The 2021 Act specifies that a person must be at least 50 years old to be appointed as a member of a tribunal. While reviewing the Ordinance, the Court had observed that the minimum age requirement of 50 years violates past Court judgements, where it has stated that advocates with at least 10 years of relevant experience must be eligible to be appointed as judicial members, as that is the qualification required for a High Court judge. Such a high age limit also prevents the recruitment of young talent.

Since the 2021 Act retains provisions that have been struck down by the Supreme Court on multiple occasions, it is highly likely that these provisions would be struck down again. Note that the 2021 Bill was passed in the Lok Sabha without any discussion. It was discussed in the Rajya Sabha for about an hour where several members raised the point that the Bill contains provisions that had been struck down by the Supreme Court. According to news reports, petitions against the 2021 Act have already been filed in the Supreme Court.

Lastly, certain larger questions on the independence of the tribunals still remain unaddressed. In order to ensure that tribunals are independent from the executive, the Supreme Court has recommended that all administrative matters of the tribunals be managed by the law ministry rather than the ministry associated with the subject area. It has also recommended creating an independent National Tribunals Commission for the administration of all tribunals.  So far, none of these recommendations have been implemented.