Tribunals Reforms Ordinance An Act of Legislatively Overruling Supreme Court Decision; Has To Be Struck Down : Arvind Datar

The Supreme Court on Wednesday considered the contours of permissible and impermissible legislative overruling and if there is a power to legislate with retrospective effect to the result that judicial decisions stand overruled.The bench of Justices L. Nageswara Rao, Hemant Gupta and Ravindra Bhat was hearing the Madras Bar Association's challenge to the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance 2021.Senior Advocate Arvind Datar, for the Association, indicated sub-section (11) of section 184 of the Finance Act, 2017, which has come to be introduced by virtue of the impugned Ordinance, and which he called the "most contentious" and the "most curious" of all the grounds of challenge.The said provision stipulates that notwithstanding anything contained in any judgment, order, or decree of any court or any law for the time being in force, (i) the Chairperson of a Tribunal shall hold office for a term of four years or till he attains the age of seventy years, whichever is earlier; and (ii) the Member of a Tribunal shall hold office for a term of four years or till he attains the age of sixty- seven years, whichever is earlier. The proviso to the sub-section lay down that where a Chairperson or Member is appointed between May 26, 2017 and the notified date of the Ordinance, being April 4, 2021, and the term of his office or the age of retirement specified is greater, then, the term of office or age of retirement or both, shall be as specified in his order of appointment subject to a maximum term of office of five years."In view of the non obstante clause, it is not clear which judgement of the Supreme Court is sought to be overruled. Right from Sampath Kumar to the 2010 Madras Bar Association case to Roger Mathews in 2019 to the November, 2020 judgment (on the challenge to the 2020 Tribunal Rules), Your Lordships have said that the tenure is to be 5 years. Can it be 4 years now? You have a law in 2017 overruling the judgements which are to come in 2020? That is impermissible. All Your Lordships' directions are being set at naught but this retrospective amendment", argued Mr. Datar.Further, the senior advocate pointed out that all interim orders in Kudrat Sandhu's case (passed pending the challenge to the 2017 Tribunal Rules; directing that the appointment to the tribunals shall be as per the Parent Act and Rules and hence the tenure is to be determined as per the old statute), will be deemed to have been made on the presumption that sub-section (11) was in existence then. "By virtue of the provision of 4 years or uptil 67 or 70, (11) put a cap on the tenure in 2017 itself! So all interim orders are non-est now!", elaborated Mr Datar."This is an act of legislatively overruling Your Lordships' decision. This has to be struck down", pressed Mr Datar.Justice Rao pointed out that there is permissible legislative overruling and there is non-permissible. "Permissible legislative overruling is a misnomer as only the basis of the judgment can be removed. A court's decision must always bind unless the principles on which it is delivered is not justified and the decision is not capable of being implemented. In the instant case, there has been impermissible legislative overruling. If Your Lordships have said that the Search cum Selection Committee is to have 2 judges and 2 secretaries with the casting vote to the CJI, and they say that the committee will have 4 secretaries and two judges, will it be permissible?", replied Mr. Datar."In our November 2020 judgement, we said the 2020 Rules cannot come in with retrospective effect and that all appointments made before shall be governed by the parent Act. To overrule this, they have introduced sub-section (11) from 2017. Now the Union of India will say that because of this, Kudrat Sandhu and the November 2020 judgement stands overruled", remarked Justice Gupta."That is what retrospectivity is- All appointments between May 26, 2017 till the notified date in 2021. It is a well-known jurisprudence in tax law also that there is always power to legislate with retrospective effect...The notified date is April 4 and its applicability is retrospective from 26 May 2017. We can't physically go back to 2017 and turn back the clock. We have to see the position on April 4 to find out if it is a valid law", continued the judge.However, Mr Datar insisted that the bench has to "sit in a time machine and go back" –" The tenure is up to the age of 62 years or 5 years, whichever is earlier, for certain tribunals like the CESTAT. That was the law in 2017. In Kudrat Sandhu, it was directed that all the selections made and the consequential appointment of all the selectees (pending the challenge to the 2017 Tribunal Rules) as shall be for a period as has been provided in the old Acts and the Rules... These directions are now deemed to have been passed when sub-section (11) was already in existence. Sub-section (11) says that one cannot have a tenure of more than 4 years...

Tribunals Reforms Ordinance An Act of Legislatively Overruling Supreme Court Decision; Has To Be Struck Down : Arvind Datar

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