The Supreme Court on Wednesday struck down the provisions of the Tribunals Reforms Act, 2021 on appointment and tenure of tribunal members, for being violative of its earlier judgments on the issue.

The Bench of CJI BR Gavai and Justice Vinod Chandran said that the provisions earlier struck down by the Supreme Court had been reintroduced by the Union government with minor tweaks.

"Therefore, the provisions of the impugned Act cannot be sustained. They violate the constitutional principles of separation of powers and judicial independence, which are firmly embedded in the text, structure, and spirit of the Constitution. The Impugned Act directly contradicts binding judicial pronouncements that have repeatedly clarified the standards governing the appointment, tenure, and functioning of tribunal members.

Instead of curing the defects identified by this Court, the Impugned Act merely reproduces, in slightly altered form, the very provisions earlier struck down. This amounts to a legislative override in the strictest sense: an attempt to nullify binding judicial directions without addressing the underlying constitutional infirmities. Such an approach is impermissible under our constitutional scheme," the Court ruled.

The Court added that 2021 Act failed to remove the defects identified in prior judgments and instead re-enacted them under a new label, thus falling afoul of the doctrine of constitutional supremacy.

"Accordingly, the impugned provisions are struck down as unconstitutional," it ruled.

The Court also censured the Central government for not following repeated decisions of the apex court on functioning of the tribunals.

The repeated reenactment of the same provisions, which have been struck down by the judiciary, shows that the “form of the administration” is being made “inconsistent” with the spirit of the Constitution, as Dr. Ambedkar had highlighted in the Constituent Assembly, the Court said.

"We must express our disapproval of the manner in which the Union of India has repeatedly chosen to not accept the directions of this Court on the very issues that have already been conclusively settled through a series of judgments. It is indeed unfortunate that instead of giving effect to the well-established principles laid down by this Court on the question of the independence and functioning of tribunals, the legislature has chosen to re-enact or re-introduce provisions that reopen the same constitutional debates under different enactments and rules," it added.

Interim arrangement

Considering today's judgment, the bench directed that until a legislation is put in place to give effect to the Court's decisions, the principles and directions laid down by it earlier judgments will govern all matters relating to appointment, qualifications, tenure, service conditions, and allied aspects concerning tribunal members and chairpersons. 

"These judgments represent the binding constitutional standards necessary to preserve judicial independence and to ensure that tribunals function as effective and impartial adjudicatory bodies. Accordingly, they shall operate as the controlling framework," it said.

The Court ordered that the service conditions of all such Members of Income Tax Appellate Tribunal (ITAT) who were appointed by order dated September 11, 2021 shall be governed by the old Act and the old Rules. 

Also, all appointments of Members and Chairpersons whose selection or recommendation by the Search-cum-Selection Committee was completed before the commencement of the Tribunal Reforms Act, 2021, but whose formal appointment notifications were issued after the Act came into force, shall be protected.

"Such appointments will continue to be governed by the parent statutes and by the conditions of service as laid down in MBA (IV) and MBA (V), rather than by the truncated tenure and altered service conditions introduced by the Tribunal Reforms Act, 2021," it said.

Further, the Court directed the Union government to constitute a National Tribunals Commission within four months.

"The creation of such a commission is an essential structural safeguard designed to ensure independence, transparency, and uniformity in the appointment, administration, and functioning of tribunals across the country. The repeated judicial insistence on this body reflects the Court’s recognition that piecemeal reforms cannot remedy the systemic deficiencies that have persisted for decades," it said.

The commission must adhere to the principles articulated by this Court, particularly concerning independence from executive control, professional expertise, transparent processes, and oversight mechanisms that reinforce public confidence in the system, the bench stressed.

The Tribunals Reforms Act, 2021had replaced the earlier Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021, which had drawn similar constitutional challenges.

In July 2021, the Court had struck down Section 184 of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 to the extent that it fixed the tenure of members and chairperson of tribunals at 4 years.

The top court had ruled that Section 184(11) of the Finance Act, which prescribed a tenure of four years for members, was contrary to the principles of separation of powers, independence of judiciary, rule of law and Article 14 of the Constitution of India as well as the judgment of the apex court in the Madras Bar Association III case.

Earlier, in November 2020, the Supreme Court in its judgment had ordered that the term of office of the Chairperson and tribunal members should be five years. The Court had also ordered some other modifications to the 2020 Rules in this regard.

In order to get over the same, the government had introduced the 2021 Ordinance which kept the tenure at four years. This move was once again struck down in the July 2021 judgment, following which Tribunals Reforms Act, 2021, was enacted.

The 2021 law was then challenged by Madras Bar Association, Congress leader Jairam Ramesh and other petitioners. After hearing the parties including the Attorney General R Venkataramani, the Court reserved its judgment on November 11.

Besides the reduced tenure, the petitions challenged the fixing of 50 years as minimum age for appointment - which had been struck down in the 2021 judgement.

The composition of Search-cum-Selection Committee (SCSC) was also challenged on the ground of Union government's excessive involvement in the appointment process. The provision mandating the SCSC to recommend two names instead of one was also challenged.

The Court in its judgment today said that in a judicial system already burdened by staggering pendency, the continued recurrence of such issues consumes valuable judicial time that could otherwise be devoted to adjudicating matters of pressing public and constitutional importance.

The responsibility of reducing pendency of cases in courts does not rest only on the judiciary but is a shared institutional duty, the Court underscored.

"While the judiciary must strive to enhance efficiency in case management and decision-making, the other branches of government must exercise their legislative and executive powers with due regard to constitutional principles and judicial precedent. Respect for settled law is as essential to good governance as it is to judicial discipline. It ensures that institutional time is spent in advancing justice rather than revisiting questions long resolved," the Court said.

It emphasized that once the Court has struck down a provision or issued binding directions after identifying a constitutional defect, the parliament cannot simply override or contradict that judicial decision by reenacting the very same measure in a different form. 

"Parliament, like every other institution under our constitutional scheme, must operate within the bounds of the Constitution. Its discretion is broad but not absolute. It must respect the principles of separation of powers, the guarantees of fundamental rights, and the structural values (such as judicial independence) that are part of the basic framework of our constitutional order," it added.

The Court acknowledged that it cannot require the parliament to enact a law in a particular form. However, it added that if a legislative measure infringes fundamental rights, violates structural principles such as separation of powers or judicial independence, exceeds legislative competence or frustrates binding constitutional directions, the Court may strike it down.  

"Where the Court identifies constitutional infirmities and issues mandatory directions to ensure compliance with constitutional principles, such as those concerning the independence, composition, or tenure of adjudicatory bodies, those directions are binding," it added.

The Court further said that the parliament may respond by removing the basis of the judgment through curative legislation but it cannot simply enact a statute that reproduces or perpetuates the very defects the Court has critiqued.

"Thus, while the judiciary cannot dictate policy, it can and must ensure that legislative choices conform to the Constitution. Judicial restraint in law-making does not imply judicial abdication in constitutional adjudication," it stressed.

The Court also made it clear that the principles of separation of powers and judicial independence are not vague, free-floating ideals. They are structural pillars of our constitutional order and integral components of constitutionalism worldwide, it asserted. 

"It is reflected in Articles 32, 136, 141, 226, and 227 of the Constitution, which vest the judiciary with the power to interpret the law, enforce fundamental rights, and supervise subordinate courts and tribunals. It is also embedded in provisions relating to appointment, tenure, and removal of judges, all of which insulate the courts from executive dominance," the bench observed.

Senior Advocate Arvind Datar and CS Vaidyanathan represented the petitioners.

Senior Advocates PS Patwalia, Porus F Kaka, Balbir Singh, Sachit Jolly, Sidharth Luthra, BM Chatterji, Sanjay Jain, Gopal Sankaranarayanan, Puneet Mittal, Gagan Gupta and BM Chatterji with advocate Ninad Laud appeared for applicants/intervenors.

Attorney General for India R Venkatramani and Additional Solicitor General Aishwarya Bhati appeared for the Centre.

[Read Judgment]