NEW DELHI: The Supreme Court on Monday tore into the Centre for deliberately dithering on appointment of members and chairpersons to crucial tribunals dealing with grievances of consumers, central government employees, companies and corporates and armed forces personnel and sternly warned of contempt action if vacancies were not filled in a week.
A bench of Chief Justice N V Ramana and Justices D Y Chandrachud and L N Rao spat fire at solicitor general Tushar Mehta and said the government’s decision to introduce the Tribunal Reforms Bill, which was enacted by Parliament and notified on August 13 after receiving the President’s assent, was clearly in total disregard of the SC’s judgment. It was also of the clear prima facie view that non-appointment of members and chairpersons to tribunals, despite repeated orders by the SC and promises by the Centre, amounted to contempt of court.
CJI Ramana said, “There is no respect for the Supreme Court’s judgment. You are testing our patience. This much I will say.”
On petitions challenging the validity of the Tribunal Reforms Act, which virtually re-enacts the provisions in the earlier law struck down as invalid by the SC in the Madras Bar Association judgment, the bench said, “We cannot have this situation, where there is Madras Bar Association judgment and the same provisions are re-enacted. This will continue. Next time we strike down a law being contrary to earlier judgment, there will be a fresh Act identical to the one struck down. It’s a replica. There is virtually no difference at all… Legislature can enact a new law after taking away the basis of a SC judgment. But it cannot enact a law which is directly contrary to the SC judgment.”
It sought answers from the Centre on the validity of the new law as well as on making appointments to tribunals within a week. Posting the matter for further hearing on September 13, the CJI said, “I think that the government is bent upon not respecting the SC’s orders and judgments. We have three options — one, stay the Tribunal Reforms Act, 2021 and direct the government to make the appointments; second, close down the tribunals and give the power to the high courts to take up the matters; third, we ourselves will appoint members and chairpersons to tribunals and initiate contempt of court proceedings.”
At one point, the bench said, “We and everyone in the legal fraternity appreciated the speed with which you appointed the nine SC judges. We do not want any confrontation with the government. But why are you taking so much time to appoint tribunal members and chairpersons? The tribunals are collapsing without members and chairpersons. Why such delay in appointments.”
The CJI-led bench said appointments for tribunals, including the National Consumer Disputes Redressal Commission, National Company Law Tribunal and the appellate NCLAT, armed forces tribunal, TDSAT, central administrative tribunal, were recommended months ago by search-cum-selection committees headed by the SC judges after the candidates were cleared by the Intelligence Bureau. “Why are the recommended names, which were made strictly in accordance with the existing law, not made so far, despite repeated orders from SC? Do you have no faith in the selection panels headed by SC judges,” it asked.
Justice Rao said, “Some tribunals are on the verge of closure. Some are functioning with one member and that too on extension. You are emasculating the tribunals by this approach. You must realise it.”
The SG attempted to douse the heat by reading out a finance ministry communication promising to take a decision in two weeks on appointing those already recommended by the selection panels headed by SC judges. But it had small impact.
Referring to proliferation of corporate insolvency cases under the IBC, Justice Chandrachud said, “NCLT and NCLAT are critical to the economy. They are really the cornerstones of the government policy for reconstruction and rehabilitation of the corporate sector. What has happened is, because of the large number of vacancies, NCLT and NCLAT are not able to dispose of matters in accordance with the prescribed timelines.”
“As per the law, there is an outer limit of 330 days for resolution of the corporate insolvency process. An SC judgment says except in exceptional cases, this is a mandatory period beyond which companies have to go for liquidation. With NCLT and NCLAT not being manned, a very critical situation has arisen. Same thing is happening to AFT. There is no reasonable possibility of resolving grievances of armed forces personnel and retired servicemen. Under the new memorandum of procedure, only those candidates who are IB cleared are considered by the search-cum-selection committees. Notwithstanding that, the names we recommended are either deleted. There is no explanation why they are deleted? It is a waste of time and energy.”
Not to be disheartened, the SG continued with his persuasions for some more time for making appointments. The CJI-led bench said, “We have trust and faith in you (the SG). We don’t think you will advise the government to bring legislation after legislation to counter SC judgments. Some bureaucrats may be there who advise the government to make such legislation. If the SC passes a judgment, pass a law nullifying it. This is how the bureaucracy functions. But, the government has to take a call now. We are very serious. Even though we are very upset, we will give you another week to come back with instructions. On that day we will pass orders on the legislation also.”
Justice Chandrachud culled out the four key lacunae in the Tribunal Reforms Act, 2021. He said, “There are four provisions. A person below the age of 50 years is ineligible for member or chairperson, directly contrary to the Madras Bar Association judgment. Selection committee to recommend two names from which the Centre will choose. Term of four years, which again is directly contrary to the judgment. Allowances to chairperson and members identical to that of central government officer holding a post carrying the same pay as that of chairperson and members, again directly contrary to the judgment.”
The CJI said, “Everyone knows what the law is, including the secretaries. One thing we want to make very clear, we are not interested in any confrontation nor are we inviting any confrontation. We are listing next Monday. By that time we expect appointments. We are issuing notices on the petitions challenging the validity of the new law. CGST Tribunal also constituted. You have to constitute the tribunals.”