The advent of Articles 323A and 323B into our Constitution through the 42nd amendment has successfully introduced tribunals into the justice delivery mechanism. Tribunals have taken to itself certain matters that previously vested with the lower courts and in appeal with the High Courts (“HC”). Tribunals are forums for seeking specialised justice and are expected to be as fair and as independent as any other court. This is more so because establishment of these tribunals cannot provide an alternative path to the executive for asserting their control over judiciary, whose independence forms the part of the basic structure of the Constitution. Moreover, the departments occupied by the executive appears before such tribunals as a litigating party and their role in appointment would jeopardise public trust and faith in these institutions. The Supreme Court (“SC”) has been issuing slew of directions to the government for maintaining independence of these tribunals in line with the Constitutional scheme. On the contrary, Government time and again have been framing rules in contravention to such directions, giving life to never ending litigation on the validity of these rules. In this article, I intend to dissect one of the recent judgement of the Supreme Court in the case of Madras Bar Association v. Union of India [W.P. [C] No. 804 of 2020] passed in the month of November. In this case, the Supreme court was called upon to decide the validity of “Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020” (“the 2020 Rules”).
SCOPE OF THE ARTICLE
The court here was concerned with the constitutionality of various provisions concerning the appointment, selection, tenure and conditions of services for the appointees of tribunals. In this article, I intend to deal with two issues that were germane to the decision. The first one is with respect to the composition of selection cum search committee which shortlists and selects the appointees to such tribunals. Herein, I will also shed some light upon the evasive behaviour of the government in complying with the previous directions of the court for the establishment of an independent body which will ensure timely appointment to these tribunals. The second issue is with respect to the appointment of Indian Legal Services (“ILS”) officers as judicial members to these tribunals. In this issue, I would deal with a judgement of the SC rendered by a five-judge bench and how the present bench of three judges proceeded on a wrong premise before overruling it.
FAILURE OF THE GOVERNMENT IN ASSISTING THE APEX COURT
The duty to appoint the chairperson/members of the tribunals vested with the search sum selection committee (“committee”). The committee comprised of the Chief justice of India (“CJI”) or his nominee, outgoing chairman of the tribunal or the High Court judge (when the current chairman is eligible for reappointment or when the president is not a judicial members) along with two secretaries to the government, each having a single vote. There were two concerns with the composition- firstly, there was nothing to ensure judicial dominance, which ensures that appointees are not representative of executive. Secondly, the secretary of the sponsoring department (like ministry of corporate affairs in matters before NCLT) can become members of the selection committee. Such department appears as a litigating party and also provides administrative support to these tribunals. This meant that adjudication by such appointees would not seem to be fair, even if it was fair. The SC allowed the government to go ahead with the composition on fulfilment of two directions i.e. Secretary of sponsoring government can be a member of the committee with no voting right and he will merely act as convenor of the committee. The court also directed to include one secretary necessarily from the ministry of law and justice. Apart from this, the attorney general assured the court that a casting vote will be provided to the CJI in case of deadlock whereby ensuring judicial dominance, which was readily agreed upon by the court. The committee is a temporary arrangement as the government have been failing to abide by the previous directions of the SC for the establishment of an independent body handling the appointments. The SC has been directing and has also reiterated in the present case for the formation National Tribunal Commission (“NTC”) which will supervise and appoint the members to tribunals.
The NTC as per the direction of the SC in the case of Rojer Mathew v. South Indian Bank [(2020) 6 SCC 1], will comprise of (i) three serving judges of SC nominated by the CJI; (ii)two serving HC judges nominated by the CJI;(iii) two members to be nominated by the central government;(iv) two independent experts to be appointed by the government in consultation with the CJI. The composition ensures judicial dominance and at the same time provides for executive representation. One may be mistaken to compare this with the collegium system where the role of executive is completely eliminated and it is the judicial branch that completely controls the appointments. The comparison is not a feasible one as it fails to take into account the difference in composition of these forums. Tribunal consists of technical and judicial members while the courts consists solely of the judicial members. The technical members possess the technical know-how of the specified field and are appointed from the executive wing while the judicial members ensure fairness in the decision making. Thus, the composition of the appointing body includes certain executives as opposed to judicial members solely in collegium. The lackadaisical approach in complying with the formation of NTC, calls the court time and again for deciding the validity of temporary arrangements. The government through this has been betraying the constitutional duty placed on it under Article 144 of the Indian Constitution to act in aid and assistance of the SC. This article puts an inescapable duty on all the authorities including the government for enforcing the decision of the court. The article finds mention in the celebrated dissent of Nariman J in the reference of Sabarimala case to a larger bench [(2020) 2 SCC 1], whereby every authority who exercises right over the citizens of the country must work for the enforcement of SC’s decision. The decisions of the Apex court would have remained ineffective, if it were not for this article. The article is not merely directive but places inescapable duty to abide by the decisions of the top court especially in the present case where basic structure is under the scanner. It is also true that it is within the legislative realm to frame such policy but the present system is not successful as many officers are hired on deputation, government fails to give timely approval for approval proving the failure of temporary arrangements. The tribunals are equally important and must be (wo)manned by competent staff with a uniform policy.
ENTRY OF INDIAN LEGAL SERVICES OFFICERS INTO THE JUDICIARY
The second issue is with respect to the eligibility of ILS officer to be appointed as judicial members to tribunals. Previously, ILS officers were only eligible to be appointed as technical members but the present ruling made them eligible for judicial membership as well. The SC placed a caveat that they must be subjected to the same conditions as the advocates are subjected to, indicating that experience at the bar was the main force behind allowing for their appointment. The SC by allowing them has overruled its own judgement rendered by a bench of five judges in the case of R. Gandhi v. Union of India [(2010) 11 SCC 1)]. The SC had considered its previous judgement but held it to be per incuriam (impliedly) as certain points were not raised and considered therein. The SC offered two cogent reasons for overlooking the ruling in the case of R.Gandhi- firstly, the judgement dealt with civil servants as a class and no separate consideration was given to ILS officer and secondly, the judgement did not took note of the experience at the bar that such officers possess. The first reason does not hold water as the SC therein (para 120(i)) in its conclusion has dealt with the ILS officers specifically and there was nothing in the judgement to affirm what has been stated by the SC. The SC’s driving force behind their appointment was their experience at the bar as practising advocates. There is nothing in the ILS service rules which makes them eligible to argue before the court as the realm of argument lies in the hands of other officers like standing counsels, attorney general etc appointed specifically for this purpose (“The comeback of ILS to tribunals”, BQ). This means ILS officers who were practising as advocates before their appointment as ILS officer can be eligible for appointment as judicial member. The court was mistaken to compare them with the advocates who have the same experience at the bar and when they were eligible for appointment as judicial members, then nothing can impede ILS officer. The SC here failed to appreciate the fact that in the decision of R. Gandhi, the court’s emphasis was also on judicial independence and appointments of civil servants will adversely impact it and by this logic they barred the ILS officers. The SC by allowing ILS officer to be appointed as judicial members have diluted the judicial independence and have opened the path for the executive to assert their control over such judicial members. The judicial members are expected to ensure fairness in the adjudication mechanism and this cannot be ensured when their appointment comes from the executive wing. In my respectful submission, the SC was not correct in including the experience at the bar as the only factor and equating them at par with advocates. In my submission, it is not the experience solely that makes the advocate eligible for appointments but along with it their independence from executive is also a relevant factor. Hence, the appointment of ILS officers as judicial members will dilute the independence of tribunals.
The tribunalisation of justice was brought to expedite the adjudication mechanism and they have been so far successful in their objective. The tribunals have attained unique place in the Indian landscape as they have been adjudicating several important matters. The judgement in Rojer Mathew has termed independence of these tribunals as a basic feature of the Indian Constitution. This basic feature has to be crystallised and preserved in reality by the formation of NTC, which will have the sole duty of selecting, supervising and removing the appointees to ensure that the tribunals are occupied with man of integrity and good character. This will enable timely appointment and would eliminate the current practice of extending the tenure solely due to failure to approve appointments.
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TELANGANA HIGH COURT: PLACE OF RESIDENCE OF THE ARBITRATOR WOULD NOT BE THE SEAT OF ARBITRATION
The High Court of Telangana in the case M/s S. Square Infra v. Garneni Chalapathi Rao observed and held that the place of residence of the arbitrator would not determine the seat of arbitration.
The Single bench comprising of Justice P. Sree Sudha observed and held that merely because an arbitrator residing in Hyderabad has been appointed, it does not mean that only the Courts at Hyderabad would have the jurisdiction to decide all the matters arising out of arbitration agreement.
Facts of the Case:
In the present case, after the dispute arouse between the parties, the respondent sent a letter to the petitioner for nomination an arbitrator who is residing in Hyderabad. To its said notice, petitioner replied and declined the appointment of the arbitrator for the reason that there was no dispute which required the appointment of an arbitrator.
A suit was filled by the respondent before the VII Additional District Judge Sangareddy, seeking for relief of permanent injunction. An application was filled by the petitioner under Section 8 of the Arbitration & Conciliation Act and the parties referred to the arbitration.
An application was filled by the respondent under section 9 of the Arbitration & Conciliation Act before the Principal District Judge, Sangareddy, Subsequently, an application was filled by the petitioner for transferring the application from the Court at Sangareddy to Court at Hyderabad.
Contentions made by Parties:
On the following grounds, the petitioner sought the transfer of application.
An arbitrator residing in Hyderabad was nominated to respondent. However, only the courts in Hyderabad would have the jurisdiction to decide all the matters arising out of the arbitration.
It was stated that the nomination of an arbitrator residing in Hyderabad amounted to designating Hyderabad as the Seat of Arbitration.
On the following grounds, the respondent countered the submissions of the petitioner:
An application was filled by the petitioner under Section 8 of the A&C Act before the Court at Sangareddy. However, in terms of Section 42 of the A&C Act, only the court at Sangareddy would have the jurisdiction to decide all the matters arising out of arbitration.
The Court held that the seat of arbitration would not be decide by the place of residence of the arbitrator.
The argument of the petitioner was rejected by the court that since the respondent had initially nominated an arbitrator residing in Hyderabad, the Hyderabad Court would have the jurisdiction.
The court stated that merely because a party has nominated an arbitrator who resides in Hyderabad, the same would not designate Hyderabad as the Seat of arbitration in absence of any designation of the seat under the arbitration agreement.
It was further stated by the court that the application filled by the petitioner filled under Section 8 application before the Court at Sangareddy consequent to which the parties were referred to arbitration. Therefore, the Court would have the jurisdiction, in terms of Section 42 of the A&C Act.
The Transfer petition was dismissed by the Court.
DELHI HIGH COURT REMANDS IN THE MATTER BACK TO ASSESSING OFFICER AFTER SETTING ASIDE: JUST 3 DAYS’ TIME GRANTED TO RESPOND TO THE INCOME TAX NOTICE
The Delhi High Court in the case Shubham Thakral Vs ITO, the Delhi bench comprising of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed and remanded the matter back to the assessing officer as just 3 days’ time was granted to respond to the income tax notice.
In the present case, the petitioner/assessee assailed the notice under Section 148A (b) of the Income Tax Act, 1961 and the order passed under Section 148A (d) for the Assessment Year 2018–19.
It was contended by the assessee that only three days’ time was granted to the assessee to respond, as against the mandatory statutory period of at least seven days. However, despite of the fact that the annexure attached to the notice gave the petitioner eight days to respond, the e-filing submission portal was closed earlier, in violation of Section 148A (b) of the Income Tax Act.
Furthermore, the petitioner relied on the decision of Delhi High Court, in the case of Shri Sai Co-operative Thrift and Credit Society Ltd versus ITO, the Delhi High Court in the case held that under Section 148A (b), a minimum time of seven days has to be granted to the assessee to file its reply to the show cause notice.
No objections were raised by the department/respondent to the matter being returned to the Assessing Officer for a fresh decision in accordance with the law. Accordingly, the court set aside the order passed under Section 148A (d) for the Assessment Year 2018-19. The Assessing officer was directed by the court to pass a fresh reasoned order in accordance with the law after considering the reply of the petitioner, which was directed to be filed within a week.
ALLAHABAD HIGH COURT: ADVOCATES SHOULDN’T ADVISE CLIENTS TO REAGITATE MATTERS IF THERE IS NO ERROR APPARENT ON FACE OF RECORD
The Allahabad High Court in the case Malhan and 17 Others Vs. State Of U.P. And Another observed and stated that an advocate should be given such a piece of advice when there is no error apparent on the face of the record nor was there any reason why the matter be re-agitated it was finally decided.
The bench comprising of Justice Dr. Kaushal Jayendra Thaker and Justice Vivek Varma observed while dealing with the civil review application wherein the bench observed the concerned advised his client to make a chance by filling the instant review application after a period of six year.
In the present case, a civil review petition was filled along with the application under section 5 of the Limitation Act, 1963., the application was filled for seeking condonation of delay in filling the application, the application was filled with a delay of six years i.e., 1900 days.
It was stated by the applicant that the review application could not be filled due to the blockage of public transportation on account of the COVID-19 guidelines.
Moreover, the court observed that the appeals were disposed of by the Apex Court in the year 2016 and only in 2020-2021, the pandemic struck India and furthermore, it cannot be said that due to the COVID guidelines the public transportation was blocked and however, the applicant could not come to Allahabad Court to file review.
Further, it was stated that the court asked the counsel for the review applicants to explain the delay in filling the review application, to which the council gave a strange reply that the counsel had advised the clients that they must take a chance by filling this review application after a period of six years.
Following this, the Court observed:
The court noted that an advocate should not give such an advice when there is no error apparent on the face of record nor was there any other reason that when the matter was finally decided, why the matter be re-agitated.
It was stated that the court has no reason to condone the delay of six years as the same was not explained as to why this review application is filed after such an inordinate delay.
The Court opined that the lapse in approaching the court within the time is understandable but a total inaction for long period of delay without any explanation whatsoever and that too in absence of showing any sincere attempt on the part of suiter, this would add to his negligence and the relevant factor going against him.
The court observed that careless and reckless is shown by the review applicant in approaching the court and due to the condemnation of delay in the application with a token cost of Rs.10,000/, the court dismissed the application.
SUPREME COURT CRITICISES HIGH COURT: POSTING ANTICIPATORY BAIL PLEA AFTER TWO MONTHS CAN’T BE APPRECIATED
The Supreme Court in the case Sanjay versus The State (NCT of Delhi) & ANR observed and stated that in the case where personal liberty is involved, the court is expected to pass orders at the earliest while taking into account the merits of the matter in one way or other. Further, the top court observed that posting of an application for anticipatory bail after a couple of months cannot be appreciated by the court.
The bench comprising of Justice C. T. Ravikumar and the Justice Sudhanshu Dhulia was hearing a June 2 SLP against the Delhi High Court in a petition filed under section 420, 467, 468, 471, 120-B, 34 of the Indian Penal Code, 1860 for seeking anticipatory bail in a 2022 FIR, a notice is issued. It was stated that the learned APP for the state is present and accepts the notice and seeks time to file status report. The High Court in the impugned order stated that Let the status report be filed by the state prior to the next date with an advance copy to the learned counsel for the petitioner. The matter is to be list on 31.08.2022.
It was noted by the bench comprising of Justice Ravikumar and the Justice Dhulia that in the captioned Special Leave Petition, the grievance of the petitioner is that the application for anticipatory bail moved by the petitioner, being Crl. M.A. No. 11480 of 2022 in Bail Application No. 1751 of 2022 without granting any interim protection, was posted to 31.08.2022. on 24.05.2022, the bail application was moved on.
However, the bench asserted that the bench is of the considered view that in a matter involving personal liberty, the Court is expected to to pass orders at the earliest while taking into account the merits of the matter in one way or other.
It was declared by the bench that at any rate posting an application for anticipatory bail after a couple of months cannot be appreciated by the court.
Further, the bench requested to the High Court to dispose off the application for anticipatory bail on its own merits and in accordance with law expeditiously, preferably within a period of three weeks after reopening of the Court. Adding to it, the bench stated that if the main application could not be disposed off, for any reason, within the stipulated time, relief sought for in the interlocutory and on and on its own merits, the application shall be considered.
While disposing of the SLP, the bench directed in its order that we grant interim protection from arrest to the petitioner herein, Till such time.
IN THE CIRP OF BOMBAY RAYON FASHIONS LTD, NATIONAL COMPANY APPELLATE TRIBUNAL (NCLT) STAYS THE CONSTITUTION OF COC
The National Company Appellate Tribunal (NCLT) in the case National Company Appellate Tribunal (NCLT), comprising of the bench of Justice M. Venugopal (Judicial Member) and the technical member, Shri Kanthi Narahari observed while adjudicating an appeal filed in Prashant Agarwal v Vikash Parasprampuria, has stayed in the Corporate Insolvency Resolution Process (CIRP) the constitution of the Committee of Creditors (COC) of Bombay Rayon Fashions Ltd. on 15.06.2022, the order was passed.
FACTS OF THE CASE:
The Operational Creditor or the Respondent, Vikash Parasprampuria is the sole Proprietor of Chiranjilal Yarn Traders and the respondent had supplied goods to a public listed company i.e., Bombay Rayon Fashions Limited (“Corporate Debtor”). The Operational Creditor raised nine invoices which was accepted by the Corporate Debtor without any demur and it was noted that the dispute, protest and part payments were also made towards certain invoices.
The reminder letter was sent by the Operational Creditor when the Corporate Debtor failed to release balance payments letters followed by a Demand Notice under Section 8 of the IBC dated 05.11.2020, which was delivered to the Corporate Debtor but no response was received from the Corporate Debtor.
MUMBAI NCLT PROCEEDINGS
An application under section 9 of the Insolvency & Bankruptcy Code, 2016 was filled by the Operational Creditor before the NCLT Mumbai Bench, seeking to initiation of CIRP against the Corporate Debtor, for defaulting in payment of Rs.1,60,87,838/-, wherein the principal amount was Rs. 97,87,220/- and remaining was interest. 01.11.2020, was the default date.
the Operational Creditor placed reliance so as to justify the compliance of Rs. 1 Crore threshold for initiating CIRP of the NCLT judgement in the case Pavan Enterprises v. Gammon India, it was held in the case that interest is payable to the Operational of Financial Creditor then the debt will include interest, in terms of any agreement. However, by including the interest component the threshold of Rs. 1 Crore was being me and no reply has been filled by the Corporate Debtor.
An order dated 07.06.2022, the NCLT Mumbai Bench observed that the Corporate Debtor had time and again by its letter, invoices and by making part payment acknowledged its liability.
It was stated by the bench that the application under Section 9 was complete in all respects as required by law and there was a default in the payment of debt amount by the Corporate Debtor. The bench accepted the application and the CIRP was initiated against the Corporate Debtor, Mr. Santanu T Ray, Interim Resolution Professional was appointed.
An application was filled by the appellant, Prashant Agarwal before the NCLT against the order dated 07.06.2022.
The settlement was proposed by the Respondent by submitting that if it would be satisfied if the Appellant pays the principal amount along with the CIRP cost towards settlement and on the settlement proposal, the appellant is yet to seek instructions.
Accordingly, the bench in the CIRP of the Corporate Debtor stayed the constitution of CoC and the CIRP process would otherwise continue.
The Appellant to accept or reject the settlement proposal of the Respondent, the bench listed the matter on 07.07.2022.
ESTOPPEL CANNOT OVERRIDE LAW: SUPREME COURT ACCEPTS UNSUCCESSFUL CANDIDATES’ CHALLENGES TO SELECTION PROCESS HELD AGAINST REGULATIONS
The Supreme Court in the case Krishna Rai (Dead) Through LRs versus The Benarus Hindu University & Others observed and held that the principle of estoppel or acquiescence would not be applied in a selection process when the principle of estoppel is held contrary to the relevant rules.
The bench comprising of Justices Dinesh Maheshwari and Justice Vikram Nath observed and reiterated that that the procedure in the relevant service manual will prevail over the principle of estoppel and the principle of estoppel cannot override in the eye of law.
An appeal was considered by bench relating to the filling up of 14 posts in Class III (Junior Clerk) in the Benarus Hindu University by way of promotion. However, the notification inviting the applications from Class IV employees for promotion to Class III had not prescribed that interview will be conducted in addition to the typing test. It was also stated that the The service rules also did not mention interview for promotion to Class III. However, it finalized 14 candidates, the Board of Examiners conducted an interview as well.
Before the Allahabad High Court, some of the candidates challenged the selection process by some candidates, who did not get selected. The candidates alleging that through the manual did not prescribe an interview and the Board of Examiners conducted the interview by “changing the rules of the game”. The Selection process was set aside by the Single bench of the High Court by holding that a grave error was committed by preparing the merit list on the basis of the interview as well.
on appeal by the BHU, the division bench of the High Court set aside the judgement of the Single bench on the ground that the petitioners without protest after having participated in the interview, the petitioners are estopped from challenging the selection process after becoming unsuccessful. The appellants approached the Supreme Court challenging the order of division bench.
The Court noted that the Supreme Court held that the division bench fell in error by applying the principle of estoppel. the Manual duly approved by the Executive Council, According to para 6.4, all Class-IV employees who had put in five years’ service and passed matriculation examination or equivalent, those employees were eligible for the promotion to the post of Junior Clerk Grade.
the departmental written test of simple English, Hindi, and Arithmetic, but could not pass the typing test, was passed by the eligible candidates and still the candidates would be eligible for promotion.
It was observed by the Court that the Board on their own changed the criteria and by introducing an interview it made it purely merit based and the merit list was also prepared on the basis of marks awarded in the type test, the written test and interview.
The Top Court said that it is settled principle that the principle of estoppel cannot override the law and the manual duly approved by the Executive Council will prevail over any such principle of estoppel or acquiescence.
The Court remarked, while referring to the precents that If the law requires something to be done in a particular manner, there can be no estoppel against law, then it must be done in that particular manner, and if it is not done in that particular manner, then in the eye of the law, it would have no existence.
It was stated that the case laws relied upon by the Division bench had no application in the facts of the present case as none of those judgments laid down states that the principle of estoppel would be above in the eye of law.
Accordingly, The judgement of the Single bench was restored and the appeal was allowed, the judgement of the division bench was set aside.
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