M J Antony: Encroachments of the third kind

OUT OF COURT

The judiciary has so far resisted the attempt of bureaucrats to take over adjudicatory roles via tribunalisation.

The order of the Supreme Court last fortnight referring the issue of the establishment of the national company law tribunal and the national company law appellate tribunal to a Constitution Bench comes as a huge setback to the mandarins who apparently wanted to dominate these forums. Though the order was passed in the case of the company law tribunal, it would have a cascading effect on the setting up of some other still-born bodies like the National Tax Tribunal and the Competition Commission.

In Union of India vs R Gandhi, the challenge was to the validity of the provisions of the Companies (Second Amendment) Act 2002 which provided for the setting up of the national company law tribunal and the national company law appellate tribunal. According to the amendment, almost all powers hitherto exercised by the high courts in regard to company matters would be transferred to the proposed tribunals.

After several days of hearing the case, the Supreme Court decided that the issues raised in it are of "seminal importance and are likely to have serious impact on the very structure and independence of the judicial system. Therefore, we are of the view that the issue with regard to the constitution of the tribunals and areas of their jurisdiction needs to be given a fresh look."

The law relating to the legislative competence to establish tribunals has been considered in several judgements including L Chandra Kumar vs Union of India (1997) and Union of India vs Delhi HC Bar Association (2002). It has been held that under Entries 77, 78 and 95 of List I, Entry 65 of List II and Entry 11A of List III, Parliament and state legislatures possess legislative competence to change the original jurisdiction of the Supreme Court and the high courts.

However, according to the Supreme Court, in none of those decisions the question of the extent to which such powers of the high court can be transferred to tribunals has been considered. There is as yet no demarcating line to show that Parliament has the legislative competence to vest "intrinsic judicial functions traditionally performed by courts" in any tribunal or authority, outside the judiciary. The question to be determined is whether such "wholesale transfer of powers" as contemplated by the amending law would offend the constitutional scheme of the separation of powers and the independence of judiciary.

The main hurdle in the current tribunalisation drive is that adjudicatory functions have been vested in bureaucrats and the judges get a subordinate role. The Supreme Court has seriously taken note of this challenge to the composition and powers of the new tribunals. As a result, the other tribunals are also in a limbo. There is a feeling that clever draftsmen in the law ministry who had lost their dreams of aggrandising judicial power, have now also lost their zeal to set up tribunals.

Consider the case of the Competition Commission of India. The World Investment Report of 1997 recognised that India has a competition law in the Monopolies and Restrictive Trade Practices Act of 1969. Chapters IV and VI of the Act contained provisions which dealt with anti-competitive practices. Instead of strengthening the existing law, the finance ministry passed the new Competition Commission Act in 2002. It was so defective and babu-friendly that the Supreme Court suggested some amendments to bring it within the Constitutional framework. That was in 2005. There has been no serious effort to comply with the recommendations since then, though the ministry promises occasionally that a new bill would be introduced in the "next session" of Parliament. Meanwhile, a large team of government staff is manning the non-existent commission, as if creating corollaries for Peter principles.

Another forum which is stuck in the Supreme Court is the proposed National Tax Tribunal. One of the flaws in this scheme is that the Chief Justice of India and secretaries in the finance and law ministries are put on par in the selection committee. The central government also has uncontrolled power to transfer the members of this forum which deals with sensitive cases involving politicians. Faced with criticism from Supreme Court judges, the government has promised to take a fresh look at the provisions of the law. But it has not been in a hurry to do its home work and show it to the court.

While the judiciary is accused these days of transgressing upon the territory of the executive and the legislature, this more subtle encroachment on behalf of the superannuated bureaucrats is hardly noticed by the public. They are creating sinecures everywhere. However, the arms of the judiciary have so far proved to be long enough to stop such intrusions into its domain.