[BREAKING] Supreme Court upholds validity of Tribunal Rules 2020 with modifications; orders constitution of National Tribunals Commission

The Supreme Court on Friday upheld the validity of Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020 (2020 Rules) with some modifications and ordered constitution of National Tribunals Commission to supervise the appointments to and functioning of tribunals (Madras Bar Association v. Union of India)..A three-judge Bench comprising Justices L Nageswara Rao, Hemant Gupta and S Ravindra Bhat held that the 2020 Rules shall apply prospectively from February 12, 2020 and issued a slew of directions to govern tribunals and the appointments and service conditions of tribunal members. As per the same, lawyers with legal practice of 10 years will be eligible for appointment as judicial members of tribunals.."The Union of India shall constitute a National Tribunals Commission which shall act as an independent body to supervise the appointments and functioning of Tribunals, as well as to conduct disciplinary proceedings against members of Tribunals and to take care of administrative and infrastructural needs of the Tribunals, in an appropriate manner," the judgment said..The court also changed the composition of search-cum-selection committees under the Rules. As per the modifications, Chief Justice of India or his nominee will have casting vote while heading the committee.The court lauded the petitioner, Madras Bar Association for its relentless efforts in ensuring judicial independence of the tribunals and also ordered the Central government to strictly adhere to the directions given in the judgment.The following directions were issued by the Court:.1. Till the constitution of National Tribunals Commission, a separate wing should be established at the Ministry of Finance to cater to the requirements of tribunals.2. Advocates with experience of 10 years will be eligible for appointment as judicial members in tribunals. Members of Indian Legal Service will also be eligible for appointment as judicial members provided they fulfill same criteria as advocates.3. The composition of Search-cum-Selection Committees provided for in Column (4) of the Schedule to the 2020 Rules will stand changed and it will now comprise the following members:(a) The Chief Justice of India or his nominee—Chairperson (with a casting vote). (b) The outgoing Chairman or Chairperson or President of the Tribunal in case of appointment of the Chairman or Chairperson or President of the Tribunal (or) the sitting Chairman or Chairperson or President of the Tribunal in case of appointment of other members of the Tribunal (or) a retired Judge of the Supreme Court of India or a retired Chief Justice of a High Court in case the Chairman or Chairperson or President of the Tribunal is not a Judicial member or if the Chairman or Chairperson or President of the Tribunal is seeking re-appointment—member; (c) Secretary to the Ministry of Law and Justice, Government of India—member;(d) Secretary to the Government of India from a department other than the parent or sponsoring department, nominated by the Cabinet Secretary—member; (e) Secretary to the sponsoring or parent Ministry or Department—Member Secretary/Convener (without a vote).4. Rule 4(2) of the 2020 Rules shall be amended to provide that the Search-cum-Selection Committee shall recommend the name of one person for appointment to each post instead of a panel of two or three persons for appointment to each post. Another name may be recommended to be included in the waiting list.5. The Chairpersons, Vice-Chairpersons and the members of the Tribunal shall hold office for a term of five years and shall be eligible for reappointment. Rule 9(2) of the 2020 Rules shall be amended to provide that the Vice-Chairman, Vice-Chairperson and Vice President and other members shall hold office till they attain the age of sixty-seven years.6. With respect to matters of disciplinary action, the recommendations made by Search and Selection committee shall be final.7. The 2020 Rules shall be amended to make advocates with an experience of at least 10 years eligible for appointment as judicial members in the Tribunals. While considering advocates for appointment as judicial members in the Tribunals, the Search-cum-Selection Committee shall take into account the experience of the Advocate at the bar and their specialization in the relevant branches of law. They shall be entitled for reappointment for at least one term by giving preference to the service rendered by them for the Tribunals.8. Appointments to tribunals shall be made within 3 months from the date on which the Search-cum-Selection Committee completes the selection process and recommendations are made by the search committee. 9. The 2020 Rules shall have prospective effect and will be applicable only from February 12, 2020.10. Appointments made prior to 2017 Rules and appointments made during pendency of Rojer Mathew judgment shall be governed by respective statutes.11. Appointments made under the 2020 Rules till the date of this judgment, shall not be considered invalid, insofar as they conformed to the recommendations of the Search-cumSelection Committees in terms of the 2020 Rules. Such appointments are upheld, and shall not be called into question on the ground that the Search-cum-Selection Committees which recommended the appointment of Chairman, Chairperson, President or other members were in terms of the 2020 Rules, as they stood before the modifications directed in this judgment. 12. Chairpersons, Vice-Chairpersons and members of tribunals appointed prior to February 12, 2020 shall be governed by parent statute and rules as per which they were appointed.13. 2020 Rules shall be applicable with the modifications laid down in the judgment to those who were appointed after February 12, 2020. 14. When reserving the matter for judgment, the Supreme Court had extended the tenures of chairpersons, vice-chairpersons and members of tribunals till December 31, 2020. In view of the final judgment, the retirements of chairpersons, vice-chairpersons and members of tribunals shall be in accordance with the applicable rules. .Supreme Court calls for extension of tenures of Tribunal members till December 31, reserves verdict in challenge to Tribunal Rules.The ruling came in a petition filed by Madras Bar Association (MBA) challenging the 2020 Rules for violating the principle of separation of powers and independence of judiciary.The petition stated that the 2020 Rules posed a threat to the independence of the judiciary and to effective and efficient administration of justice. The Rules, the plea said, were ex-facie against the decisions of the Supreme Court, particularly Rojer Mathew v. South Indian Bank Ltd.This was the second instance of such rules being challenged before the Supreme Court.The first was in 2017, when the Central government had notified similar rules for tribunals and appellate tribunals and similar authorities. These came to be assailed in the Rojer Mathew case. The 2017 Rules were framed under the provisions of the Finance Act, 2017 which itself was challenged before the Supreme Court on the ground that the Act was passed as a Money Bill, thereby, circumventing legislature. .While a five-Judge Bench of the Supreme Court referred the question of passage of the Finance Act as Money Bill to a larger Bench and the same remains pending still, the 2017 Rules were struck down for violation of separation of powers and independence of judiciary.However, the Court, in that case, upheld Section 184 of the Finance Act which had entitled the Central government to frame rules to determine appointment, service conditions, removal and other aspects of tribunals. It ordered the Centre to reformulate new rules in consonance with earlier an earlier judgment of the court in R Gandhi..Subsequently, the 2020 Rules came to be notified. The 2020 Rules, the petitioner association had contended, were in contravention of separation powers and the principles laid down in 2018 judgment..One of the points of contention in the petition was that the 2020 Rules provide for a four-year tenure for the members appointed to tribunals. This figure of four years is not only in violation of the Supreme Court judgments of SP Sampat Kumar and Rojer Mathew, but will also disincentivise lawyers from seeking appointment, it was argued by Senior Counsel Arvind Datar on behalf of MBA. .He also contended that should the Court decide in favour of upholding the 2020 Rules, then aspects such as four-year tenure for members, ineligibility of advocates for consideration for some tribunals, ILS members made eligible for presiding position, among others, need to be reconsidered..On the last day of the hearing, Attorney General KK Venugopal submitted that the Supreme Court in Rojer Mathew v. South Indian Bank Ltd had upheld Section 184 of the Finance Act according to which the tenure should not exceed five years and Rules were in consonance with that requirement. .He pointed out that the vacuum created by quashing of 2017 Rules was sought to be filled by the 2020 Rules. Senior Counsel Siddharth Luthra and CS Vaidanathan appeared for two applicants while Senior Advocate AS Chandhiok represented NCLT and NCLAT Bar Association..Tribunal Rules 2020: Attorney General assures Supreme Court that members of Tribunals will be reappointed after four years' tenure.[Read Judgment]