The Finance Act 2017 can erode judiciary’s independence

On February 9, the Supreme Court while hearing a batch of petitions challenging The Finance Act and the Tribunal, Appellate and other Authorities’ (Qualifications, Experience and other Conditions of Service of Members) Rules, issued an interim stay and thwarted an attempt to undermine the judiciary. The court observed that the appointments to all the tribunals could be made as per the earlier rules until pleas challenging the provisions of the Bill are adjudicated upon. These rules administer appointment, tenure, removal and other service conditions of chairpersons and members of the Tribunal.

The petitioners filed the aforementioned plea, challenging these amendments on the ground that this would undermine the independence of the judiciary and would be tantamount to a violation of the doctrine of separation of powers. The petitions primarily challenged Sections 182, 183, 184 and 185 of the Finance Act, 2017. Essentially, these provisions arrogate the powers of the judiciary by taking control of the appointments, tenure & removal of the Presiding officers and the members of the 18 tribunals.

An independent and fair judicial system is important for a free society and a constitutional democracy. Since the framing of the Constitution, independence of judiciary and the doctrine of separation of powers have been of paramount importance. This is evident from the Constituent Assembly Debates wherein the need for a free and independent judiciary was considered to be fundamental for a welfare state. The father of our Constitution, Dr B R Ambedkar, during the Constituent Assembly Debates, emphasized that “there can be no difference of opinion in the house that our judiciary must be both independent of the executive and must also be competent in itself. And the question is how these two objects could be secured”.

The Ministry of Finance in June 2017 had notified new rules for the selection process and working of various tribunals. A large number of members of the legal fraternity had opposed such a move and stated that the new rules would make these quasi-judicial bodies subservient to the Executive, as it would exercise substantial control over them. Moreover, it was contended that these very ministries against whom the tribunals were to pass order would administer the tribunals. The primary reason for such an opposition was that the government is the largest litigant before such quasi-judicial bodies and to ensure free and fair functioning of this tribunal, the appointment process must be insulated from Executive interference.  

Prior to this amendment, the members were appointed by a Committee, which comprised of the CJI’s nominee, two secretaries and the chairperson of the respective tribunal. This committee had adequate checks and balances with equal representation to both the wings of the state i.e. Executive and Judiciary. There was no need to tinker with this balance between the two components.

Therefore, these rules impinge upon basic independence and powers of the judiciary and the new rules would be violative of the doctrines of separation of powers.  Another point which needs to be mentioned is that after the passing of the Finance Act, 2017, the Government has merged 8 tribunals, bringing the total number of such panels down to 19 from the earlier 26 tribunals. Several persons, bodies and associations had challenged the rules made under the Finance Act, 2017, including a Member of Parliament who had moved the apex court challenging the validity of the Finance Act 2017, hence the rules made under it, claiming that if they were adopted, it would destroy the independent functioning of the tribunals. The new rules would give primacy to the Executive in deciding matters of appointments, its Constitution, removal of members across tribunals. Consequently, undermine the independence of the judiciary.  

Reference was also made to the National Green Tribunal in these petitions. The NGT was constituted to adjudicate environmental issues and concerns comprising a judicial and technical member. The NGT Act already has provisions, which deal with qualification, appointment and terms of the members of the tribunal. However, by virtue of these Amendments brought to the Finance Act 2017, the Central Government has usurped the powers of appointment to the National Green Tribunal. Section 182 inserted a provision in the Act, stipulating that notwithstanding anything contained in the NGT Act, all appointments after the commencement of the Finance Act 2017 would be done in accordance with provisions of section 184 of the Amendment Act.

Moreover, tenures of appointment have also been reduced and the Centre had been granted the power to hold inquiries and remove members. Further, their status and facilities have been altered. That all such measures were in contravention of the law laid down by the Supreme Court and High Courts.

It is also vitally important in a constitutional democracy that the judges and judiciary as a whole are impartial and independent of all external pressures and must inspire confidence from the general public. Needless to state that an independent judiciary is a bulwark of the Constitution.  

The author is an Advocate at the Punjab and Haryana High Court