The Cabinet decided to drop this clause against the backdrop of protests by the judiciary and jurists over the issue.
The Law Ministry took back the Judicial Standards and Accountability Bill to the Union Cabinet to drop the clause.
This is the fourth time the Cabinet will deliberate on the Bill that seeks to provide for accountability of judges.
The last time the bill had gone to the Union Cabinet was in December, 2012 when it had decided retain the controversial clause with certain amendments.
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The earlier clause was prohibiting judges from making "unwarranted comments against conduct of any constitutional or statutory authority or statutory bodies or statutory institutions or any chairperson or member or officer thereof, or on the matters which are pending or likely to arise for judicial determination".
This clause has now been all together dropped from the Bill after the Law Ministry gave its fresh view that retaining it was not practical.
The Bill will have to travel back to the Lok Sabha after its passage in the Upper House.
The then Chief Justice of India S H Kapadia had, addressing a Supreme Court function on Independence Day in 2012, cautioned that "the government may make law for making judges accountable. We are not afraid of that. But it should not tinker with the very constitutional principle of judicial independence.