At the outset, CJ N . V . Ramana raised the issue of the premature retirement of Justice A. I. S. Cheema as NCLAT chairman- "The department has hurriedly on 11th of September made arrangements and he has been replaced by another gentleman, Justice M. Venugopal. I don't know how this is happening, what is this happening? I am not sure whether you have notice of this or not..."
Senior Advocate Arvind P Datar appearing for Madras Bar Association which has challenged the 2021 Tribunal Reforms Act, also advanced, "It is a very disturbing trend. I request you to put an end to it at the earliest. All the appointment letters are being issued now including Income Tax Appellate Tribunal, they are sending WhatsApp messages. Now whether the tenure is to be four years or five years, that Your Lordships will decide next week. Assuming it is four years for now, the letters read that the appointment shall be "until the age of 67 years or four years or until further orders, whichever is earlier". Like Justice Cheema, they are using "until further orders". There is no provision in the Act for this and without any kind of provision, they are simply terminating the people"
"I have not seen it", replied AG K . K. Venugopal. He responded that the government will file a counter affidavit within a week on the challenge to the 2021 Tribunals Reforms Act elaborately dealing with the challenge to the four provisions impugned pertaining to the panel of names recommended, the tenure etc.
The CJ noted, "I have seen that for the NCLT, the selection committee recommended nine judicial members and 10 technical members. They kept another 10 in the waiting list for additional vacancies, whenever they arise. By the appointment letters which were issued, they have selected 4-5 names in the waitlist and 3 names in the select list. As per elementary principles, we cannot ignore the selected candidates and go to the waitlist. There cannot be any cherry-picking. I don't know what type of selection is this, what type of appointment is this?"
The AG began, "The government proceeds on the basis that these recommendations...if you will see Section 3(7) of the Reforms Act which was in existence in the previous law also...".
The said provision reads: "Notwithstanding anything contained in any judgment, order or decree of any court, or in any law for the time being in force, the Search-cum-Selection Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member, as the case may be, and the Central Government shall take a decision on the recommendations made by that Committee, preferably within three months from the date of such recommendation"
"Every time, this happens. This is nothing new. Even after the order is passed, they are notifying like this. Same way, the ITAT members are also affected. Every time, the same story", said the CJ. Mr. Datar added that while 45 were selected, only 13 have been appointed- Six judicial members and seven technical members. "I don't know on what basis they have appointed", said Mr. Datar.
Justice D. Y. Chandrachud reflected, "3(7) is identical to the earlier provision which has been held to be unconstitutional. The provision being that of the 20 names, which have been recommended, the government proceeds on the basis that we need not select any more than 10, that of those we pick 10 out of 20!"
"This provision has three parts- it provides for a panel of two names, that the court has struck down; then it says the government will decide on the recommendations 'preferably within three months', which has been struck down; but that the central government shall take a decision on the recommendation made by the committee has not been struck down. Therefore, that continues as a valid provision", said the AG.
Justice L. Nageswara Rao noted, "For one post, there cannot be two names, but only one name must be recommended! And 'preferably within three weeks' has also been struck down! So you have to make the appointment within three months! But even after the selections were conducted and recommendations were made, you don't appoint them when you pick up people from the waitlist, which was prepared for the purpose of being used in the future? That has nothing to do with 3(7)
The AG advanced, "The government has the power not to accept the recommendations made. Your Lordships would know even as regards the High Courts and High Court judges..."
"We are in a democratic country following the rule of law! It is under the Constitution that we are working. You cannot say that!", asserted the CJ.
"This has been held so even in the case of UPSC where the government is entitled to not to accept certain recommendations. Your Lordships' judgement says so. We have acted on that judgement", persisted the AG.
Continuing, he added, "We have exhausted the main list and thereafter gone to the waiting list, only after exhausting the main list. So far as the vacancies are concerned, we have appointed from the waitlist also. The result is that there is not a single recommendation that is pending as regards 6 of the 15 tribunals. For the remaining 9, the recommendation has not been made at all even though SCSC has been constituted."
Justice Rao observed, "A selection committee recommended the names a year and a half back for the members of TDSAT and the recommendations were in accordance with the law as it then existed. 2 names had gone for 1 vacancy. Till now, the decision has not been taken. We don't know how long you can continue with this"
"We exhausted the main list, and then we added names from the waiting list. So far as those names which have not been accepted are concerned, we have instructions from the government to reconsider", said the AG.
"What is the sanctity of the recommendations of the selection committee if the government chooses to do anything at the last stage. The persons who are conducting the interview are ultimately not heard in the appointments!", remarked Justice Rao.
The CJ added,
"With respect, I think we are very much unhappy with the way the issues are going on and how the decisions are taken. I want to tell you one thing – I am also one of the persons who was part of the selection committee for NCLT. We have interviewed 534 candidates for judicial posts and 425 for technical posts. Out of that, 11 judicial members and 10 technical members were selected. We are taking into consideration all inputs and making recommendations in order of merit for appointing judicial and technical members in NCLT. Out of these 11 selected judicial members, they selected only 4. They went to the waitlist and chose 3 in the waitlist. Same with the technical members also. We travelled across the country, the corporate affairs secretary and law secretary were there. Another judge, Justice Surya Kant, was there. This is a waste of time for us then. We spent a lot of time. During Covid, your government requested us to conduct interviews as early as possible. So we did so over two days via video conferencing!"
The CJ continued to state, "Now the problem is that you have selected from the judicial members list, High Court judges who held their office till 62. Now they are already 64 and they have been given tenure until 65 years. They will get only one year of tenure. Mr. AG, would you want to join the job for one year?"
As the AG sought to reply that for the members, the age is 67 and for the chairman, it is 70, Mr Datar pointed out that the NCLT is not covered under the Tribunals Act and that the age for the NCLT is 65.
"There is no consistency, I am sorry. I don't know why you want to bring trouble in all these matters. It is very unfortunate.The government has to realise this", expressed the CJ.
"My instructions are that they are prepared to reconsider", repeated the AG.
"I want to bring to your notice that the same thing has also happened in the ITAT. In TDSAT also, Justice Rao has conducted interviews and made recommendations 1-1 and 1/2 years back", continued the CJ.
Justice Chandrachud added, "As regards NCDRC, where I was part of the selection committee with other two members of the bureaucracy, two senior secretaries, there also the list was truncated and only a few people have been appointed."
The AG responded that some of the persons recommended to have been absorbed in other jobs at the High Courts.
Justice Rao noted, "In the TDSAT also, to all knowledge, only the chairman is continuing. No appointments are being made. Recently, I was called by the Secretary to be told that the SCSC has been constituted for the selection of chairman and I told him that it must first be seen that the members are appointed."
"The secretary has appointed one member on 11th September", told the AG.
"What about other names? We had recommended four names for two posts?", asked Justice Rao.
"The second appointment could not be made as both the individuals recommended by the SCSC have been appointed elsewhere", told the AG.
"This is the problem. There is a delay of a year and a half. The bureaucrats are also not ready to wait and they would want to be adjusted in some other post. The very exercise of the selection that we conducted would become useless", commented Justice Rao.
"If you were to consider it after a week, we could reconsider the entirety of all those who were not accepted. In the reconsideration, we would appoint a very large number except those that we know there is corruption charge", assured the AG.
At this, Senior Advocate Krishnan Venugopal raised the concern as regards ITAT, indicating that the court's previous judgement says that the recommendations would have to be appointed. "There is no reason given for not appointing. There is cherry-picking. I would request the court for notice to be issued in the contempt", he prayed.
Asserting that the government has made appointments in the ITAT, the AG insisted that they would like to file a counter before issue of notice.
"Subject to the consideration of the submissions made by you, so far as the appointment is concerned, the contempt is concerned, we will hold our hands for one more week. Let's see what will happen. So far as the challenge to the 2021 Act is concerned, we have already issued notice. Please file counter affidavit within a week", said the CJ.
The bench then heard the plea regarding the legality of notification issued by the Union Ministry of Finance transferring & attaching the jurisdiction of Debt Recovery Tribunal, Jabalpur to Debt Recovery Tribunal, Lucknow in the absence of availability of presiding officer at DRT Jabalpur.
Justice Chandrachud asked the AG,
"Imagine a litigant coming from Jabalpur to Lucknow! Is he supposed to get a new lawyer or take his own lawyer from Jabalpur to Lucknow? Likewise Chhattisgarh! And the Kerala High Court has quashed a similar notification transferring jurisdiction from Kerala to Bangalore! That has now countrywide application. It is not just confined to Kerala. Of 23rd March 2021 is the Kerala High Court judgement which lays down the law! There is no challenge to it. Six months have gone by. So how can people be left in the lurch? When they go to the High Court, no court interferes under 226! They ask the person to follow their remedy under SARFAESI"
"Everywhere this is the problem in the country", agreed the CJ.
The bench expressed concern about access to justice.
"We are prepared to file a counter affidavit within a week", said the AG.
"We are waiting very patiently. A counter affidavit is not the solution. We are telling the government to make an appointment!", said the CJ.
"I agree with the court", said the AG.
"At least give a judicial officer jurisdiction over the DRT cases in Jabalpur. The litigants are in distress. I will tell you the practical difficulty. If the bank issues notice under 132) of the SARFAESI, the litigant has no remedy. This is followed by taking of possession under 13(4). The High Court says it will keep its hands-off. The bank will take possession of the factory, the house, or some other asset of the debtor. There is absolutely no recourse to the debtor", said Justice Chandrachud.
The AG informed that the government had approached a tribunal member in Jabalpur to take over as presiding officer but they had declined. "We will find somebody else in Jabalpur who will be prepared to take over the DRT", he assured.
The CJ noted, "There is no officer in Visakhapatnam or Hyderabad. For both states of Telangana and Andhra, you have to go to Calcutta. Calcutta was put in charge. In Calcutta also, now there is nobody. So you have been put in charge in Lucknow. It is a pitiable condition."
"I agree with your lordships fully", said the AG.
"Please tell the government you have to make the appointments", said the CJ.
Justice Rao also indicated how the top court was faced with a matter last week arising on account of a difference of opinion between the chairman and the other member of the SAT- "SEBI was before us assailing the judgement which went against them. According to the provisions of the statute, there has to be a third member who is not there. The technical member is not appointed. So there was a request for an interim order. So we told them to get the matter listed next week. So it is difficult for the tribunal to function. Please make sure that the appointments are made. We have a practical problem."
"Whatever problems we may have, appointment of members is the only solution", agreed the CJ.
"So far as the SAT is concerned, the SCSC has not met and it has not recommended any person. We have nominated 2 secretaries...But otherwise, we are also entitled to appoint by transfer", said the AG.
"Please ask your officers. Because they are saying the Supreme Court has not recommended the names, I want to tell you something. For the appointment of NCLT/NCLAT chairman, already two times there is a letter written by the Supreme Court. But then they are not responding. We will recommend. But they say it has to be under the new Act and they have to frame rules. They have to come to us and pursue their work. We can't go to the department or the offices to make recommendations. Even if we recommend, there is no guarantee you will appoint. If we recommend something, they say rules are coming in the way", told the CJ.
"For SAT, temporarily two persons could be appointed...", suggested the AG.
"I will ask the office to place the papers before me. Today itself will do it. Let them write a letter. We will permit them if they want. We have no issue. We want resolution of the issue. Ask some responsible officer to approach us. It will be cleared within no time", said the CJ
When Mr. Datar prayed that the court also direct the government to not add the 'until further orders' caveat in the appointment letters, the CJ said, "We would want the appointments to come first"
"We have expressed earlier what order we intend to pass. If without inviting any order from the court, you can do it, you are welcome to", said the CJ to the AG. "Certainly", replied the AG.
"Right from L. Chandra Kumar's case, this court has been speaking of an independent body for making appointments. You were also in agreement with us when we spoke about the National Tribunals Commission. Till the national commission is constituted, we had said there should be one separate wing in the finance ministry to take care of all these appointments etc. We do not know whether anything has happened. Regarding National Tribunal Commission, we have not heard anything at all. The government has to come up with an independent body, only then we would see some results!", observed Justice Rao.
"I can make a note of it and get some response", said the AG.
"The problem is that everyone is aware of the problem. Nobody is on the question of solution. We have already indicated in Roger Matthews and subsequent cases about the National Tribunals Commission. We have given the solution also. It is for you to implement or not. Now we don't want to trouble you more than this. We will adjourn for a week. Please ask the government to get some proper instructions", said the CJ.
The bench then adjourned the matter to grant time to the government to file its counter-affidavit and for progress on the appointments.
Case Titles: State Bar Council of Madhya Pradesh vs UOI, Amit Sahni vs UOI, Amarjit Singh Bedi vs UOI, Delhi Bar Association vs UOI, Advocates Association Bengaluru v. Rajeev Gauba & Ors.