I

IN THE HIGH COURT OF JUDICATURE AT MADRAS(SPECIAL ORIGINAL JURISDICTION)

WRIT PETITION NO. OF 2017Madras Bar Association lslfl .Hishcout Buirdine, ,{fdChennai-600 104Represented by its PresidentMr. Vijay Narayan . . ..Petitioner

Vs.

l. Union oflndiaMinistry of Finance(Department of Revenue)No. 137, North Block,New Delhi, I I 000 IRepresented by its Jt. Secretary

2. Union oflndia,Represented by its Secretary,Ministry of Law arld Justice4th Floor, A Wing,Rajendra Prasad RoadShastri Bhavan,New Delhi I l0 001

C*rmarcl, Vijay Narayan, s/o K.C. Mohan, Hindu aged about 6l years, having office at

Madras Bar Association, High Court, Chennai - 104 do hereby solemnly affinn

and state as follows

l. I am the President of the petitioner association and as such I am well

acquainted with the facts ofthe case

2. It is submitted that the present writ petitions are being filed under Article

226 ofthe Constitution oflndia seeking a writ ofdeclaration to declar€:

a) Part XIV of Chapter VI of the Finance Act,2017 more particularly

sections 156 to 189 which relate to 'Amendments To Certain Acts To

Provide For Merger Of Tribunals And Other Authorities And

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Conditions Of Service Of Chairpersons, Members, Etc.' as ltro vires

Articles I 4, 50 and I I 0 of the Constitution of India; and

b) the Tribunal, Appellate Tribunal and other Authorities (Qualifications,

Experience and other Conditions ofService of Members) Rules, 2017

terms of s 184 of the Finance Act, 2017, as void, defective and

unconstitutional, being violative of doctrines of separation of powers

and independence ofjudiciary which are parts ofthe basic structure of

the Constitution and furth contrary to the principles laid down by

the Hon'ble Supreme Court it Union of India v. R. Gandhi (2010) llSCC 1,

3. The present writ petition is being filed by the petitioner association, the

oldest Association of Lawyers in India, established in the year 1865. The

Petitioner is an association ofadvocates practicing in the Madras High Court

and its main objects are as follows:-

a. act as a professional watch guard and regulate the conducts of its

members in the Madras High Court and other High Courts;

b. take up the causes of the legal profession at large and protect the

independence of the judiciary;

make r€presentations to the public authorities regading judicialc

appointments and judicial services; and

d. act as an advisory body and assist the Govemment and other

Covemmental authorities

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fiamed by the I'i respondent v#e Notification dated 01.06.2017 in

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4. The association represents the interests of the judicial system and its

stakeholders and has successfully canvassed for the furtherance of these

objectives. The petitioner has, in the past, filed and pursued several

litigations against tribunalisation ofjustice, bureaucratisation ofjustice and

its impact on judicial independence and separation of powers, both before

the Hon'ble High Court and the Supreme Covt. It Union of India v. R.

Gandhi (2010) I I SCC l, the Hon'ble Supreme Court, in an appeal arising

out of a writ petition filed on behalf of the petitioner, struck down various

provisions of the Companies Act, 1956 relating to the National Company

Law Tribunal. h Madrus Bqr Association v. Union of India, (2014) l0 SCC

t, the Hon'bte Supreme Court, in aaother writ petition filed by the

petitioner, struck down the National Tax Tribunal Act,2009. Therefore, the

petitioner submits that it has the /ocus r/a,,di to maintain the present writ

petitlons

5. The ln respondent is the Union oflndia, represented through the Ministry of

Financa, Department of Revenue and is responsible for issuance of the

Tribunal, Appellate Tribunat and other Authorities (Qualifications,

Experience and other Conditions of Service of Members) Rules, 2017

("tmpugned Rules, 2017").

6. The 2"d respondent is also Union of tndia represented through the Ministry

of Law and Justice. As per various orders of the Supreme Court over the

years, all tribunals created pursuant to central and state legislations ought to

function under the 2nd respondent Ministry.

7. The genesis of the formulation of the lmpugned Rules, 2017 needs to be

stated for a better appreciation of the case at hand. The Finance Bill, 2017

was presented before the Lok Sabha on 01.02.2017. A Finance Bill is

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defined in Rule 219 of the Lok Sabha Rules of Procedure as 'the Bill

ordinarily introduced in each year to giye effect to the Jinsncial proposals of

the Governuent of Ltdia for the next following financial year std inchtdes a

Bill to give effect to supplementary fnancial proposals for any period'

However, in an unprecedented manner, the Finance Bill,2017, proposed

amendments to various acts, inter alia, aiming to reform a total of 2'7

tribunals. Ofthese, the Bill sought to shut dowr 8 tribunals by merging them

with the 19 remaining tribunals.

8. The Lok Sabha approved the Finance Bill, 2017 o122.03.2017 and further

certified the Bill as a 'money bill'. It is relevant to m€ntion here that Article

109(l) ofthe Constitution oflndia defines a 'Money Bill' as follows

"a Bill shall be deemed to be a Money Bill if it contains onl:)ptpy$fuu dealing with all or utry of the.following mattet's, na,nely-

(a) the irynsitio,t, abolition, rerlbsiot, elterdtion or regulotionof any tat(b) the regukttion of the borrovittg ol uoney or the giing o1a ) guaranke by the Goventment of hdia, or the snendmentof the lau, with respect to any financiol obligations unclerlskenor lo be undertaken by the Governnent of Indict:(c) the custody of the corsolilated Fund or the Contingenc,-Fund of htdict, the payuent of no,teys into or lhe witlttlrawal olmoneys fron ony such Fntd:(l) the appropriatior of mctneys out of the consolidated Fund o/lndkr;(e) the declaring of an7- etpenclihn'e to be expenditure chorgedon the Consolidated Fuul of lndia or the incrensing of lheonount oJ on,- such a;penditure;$ the receipt of monel- on account of the Consolidoted Fund ofIndia or the public account of India or the custody or ksue ofsuch money or the audit of the accotnls of the Union or of aStqte; or(g) any ntatter incidettol to q,V of the matters specilied in sub-clause (a) to l). " (emphasis added)

Hence, bills that exclusively contain provisions for the imposition and

abolition of taxes and the appropriation of moneys out of the Consolidated

Fund are certified as Money Bills.

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9. Since the Rajya Sabha can only recommend amendments to Money Bills,

the Lok Sabha rejected all such amendments proposed by the Rajya Sabha to

the Bitl and the same was sent to the President of India for his assent. Thus,

the Finance Act, 2017 came into effect fiom April l, 2017 after the President

granted assent to the Bill on March 31, 2017

10.[t is submitted that in what should essentially have been legislated through

separate legislalions and bills, and only with the assent of the Rajya Sabha,

the Finarce Act,2017 vide sections 156 to 189 of the Finance Act 2017

amended the provisions in relation to the snucturing and re-organisation of

the Tribunals. When the Constitution gives a special provision for passing a

Money Bill, it implies that bills unconnected with matters mentioned itr

Article Il0 ca rot be labelted as Money Bills. Such a practice amounts to

Aaud on the Constitution and is a colourable exercise of power. This is a

repeated practice as evidenced by the passing of the Insolvency and

Banknptcy Code, 2016 and the Aadhaar (Targeted Delivery of Financial

and Other Subsidies, Benefits and Services) Act,2016. The Supreme Court

llrz,d, it Krishnq Kumar Singh v. State of Bihar (2017) 3 SCC I, held that

abusing ordinance making power will be a fraud on the Constitution.

Likewise, deliberate use of Article 110 to ctcumvent the need of Rajya

Sabha approval will be a fraud on the Constitution. The Supreme Court

judgment cannot be nultified by an act of Padiament or by rules. This has

been laid down by a number of cases including Madqn Mohan Pathak v.

Union of India (197 8) 2 SCC 50. Thus, the money bill process was abused to

make amendments to the futrctioning of tribunals that were set up under the

following acts, many ofwhich are non-fiscal by nature:

i. The Industrial Disputes Act, 1947

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lt The lncome Tax Act, 196l

iii. The Customs Act, 1962

The Smugglers and Foreign Exchange Manipulators (Forfeiture of

Property) Act, 1976

The Administrative Tribunals Act, 1985

The Railway Claims Act, 1987

vll. The Secu ties and Exchange Board of India Ac! 1992

vt ll The Recovery of Debts due to Banks and Financial Institutions Act,

1993

tx The Airport Authority oflndia Act, 1994

The Telecom Regulatory Authority oftndia Act, 1997

xl. The Trade Marks Act, 1999

x[. The Companies Act, 2013

xiii. The Cinematograph Act, 1952

xlv. The Consumer Protection Act, 1986

The Eleclricity Act, 2003

xvl. The Armed Forces Act, 2007

xvii. The National Green Tribunal Act,20l0

I l.Further, 8 tribunals established by their parent acts have been merged with

such tribunals established under other acts. A list as per the table prescribed

in Schedule 9 ofthe Finance Act,20l7 is set out below:

The Employees Provident Fund Appellate Tribunal established under

the Employees Provident Fund Industrial Tribunal Funds and

Miscellaneous Proyisions Act, 1952 stands merged with the Industrial

Tribunal constituted by the Central Governnent under the Industrial

Disputes Act, 1947;

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stands merged with the lntellectual Property Appellate Board

constituted under the Trade Marks Act, 1999;

llt The Railway Rates Tribunal established under the Railways Act, 1989

has been merged with the Railway Claims Tribunal established under

the Railway Claims Tribunal Act, 1987;

The Appellate Tribunal for Foreign Exchange established under the

I.

vlt.

The Copyright Board established under the Copyright Act, 1957

Foreign Exchange Management Act, 1999 stands merged with the

Appellate Tribunal constitut€d under the Smugglers and Foreign

Exchange Manipulators (Forfeiture of Property) Act, 1976;

The National Highways Tribunal which was under the Control of

National Highways (Land and Traffic) Act,2002, stands merged with

the Atport Appellate Tribunal set up under the Airport Authority of

lndia Act, 1994;

Both the Cyber Appellate Tribunal set up under the Information

Technology Act, 2000 and the Atpons Economic Regulatory

Authority Appetlate Tribunal set up under the Atports Economic

Regulatory Authority of lndia Act, 2008 stands merged with the

Telecom Disputes Settlement and Appellate Tribunal under the

Telecom Regulatory Authority of India Act, 1997; and

The Competition Appellate Tribunal under the Competition Act, 2002

with the National Company Law Appellate Tribunal under the

Companies Act, 2013

12.The aforesaid amendments which deal with merging of a tribunal \rith

anotler have been carried out by substituting the said provision with the

following clause - for instance, section 160 (C) of the Finance Act, 2017

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dealing with the merger of the Copyright Board constituted under lhe

Copyrights Act, 1957 wi& the Intellectual Property Appellate Board

constituted under the Trade Marks Act, 1999, reads as follows:

" ) 1. The Appellate Board established under section 83 of the TradeMarks Act, 1999 shall, on and from the commencement ofPart XIV ofChapter YI of the Finqrce Act, 2017, be the Appellate Board lor thepurposes of this Act and the said Appellale Board shqll exercise thejurisdiction, powers and authority conferred on it by or under thisAct ".

Similar Ctauses were inserted with respect to the mergers of the other

l3.It is further submitted that apan fiom amending provisions in relation to the

restructuring and merging of the 8 tribunals, Part XIV of Chapter Vl of the

Finance Act, 2017 and more particularly s€ction 184 of the Finance Act,

2017 empowers the Central Govemment to make rules to provide for the

appointment, qualifications, terms of offrce and removal of Chairperson and

members of Tribunals which were generally prescribed under the relevant

legislation establishing such tribunals.

14. It is in pursuance to this section, the Central Government through the l"Respondent has issued the said Impugned Rules,2017 vide Notification

dated 01.06.2017 which is also sought to be challenged in the present Writ

Petitior.

l5.It is submitt€d that the Impugned Rules suffer from severe infirmities with

regards to doctrine of separation of powers and the independence of the

judiciary that forms part of the basic structure of the Constitution. The Rules

further run contrary to the directions which ought to be followed as

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tribunals set out in Paragraph l1 hereinabove.

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guidelines regarding th€ stnrcturing and organisation ofTribunals in India as

was laid down by the Hon'ble Supreme Cout in R. Gandhi (sryra).

16.The Hon'ble Supreme Court n R. Gandhi case (supra) had laid down the

following directions and mandated that the Govemment of India follow the

directions as guidelines while constituting the NCLT and NCLAT:

a. Only Judges and Advocates can be considered for appointrnent as

Judicial Members of the Tribunal. Only High Court Judges, or Judges

who have served in the raDk of a District Judge for at least five years

or a person who has practiced as a Lawyer for ten years can be

considered for appointment as a Judicial Member;

b. Persoos who have held a Croup A or equivalent post under the Central

or State Govemment with €xperience in the Indian Company Law

Service (Legal Branch) and lndian Legal Service (Grade-l) cannot be

considered for appointrnent as judicial members. The expertise in

Company Law service or lndian Legal service will at best enable them

to be considered for appointment as technical members;

c. As the NCLT takes over the functions of High Court, the members

should as nearly as possible have the same position and stalus as High

Court Judges. This can be achieve{ not by giving the satary and perks

of a High Court Judge to the members, but by ensuring that persons

who are as nearly equal in rank, experience or competence to High

Court Judges are appointed as members. Therefore, only officers who

are holding the ranks of Secretaries or Additional Secretaries alone

can be considered for appointment as Technical members.

d. A 'Technical Member' presupposes an experience in the freld to which

the Tribunal relates.

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e. Instead of a five-member Selection Committee with Chief Justice of

lndia (or his nominee) as Chairperson and two Secretaries from the

Ministry of Finance and Company Affairs and the Secretary in the

Ministry of Labour and Secretary in the Ministry of Law and Justice

as members, the Selection Committee should broadly be on the

following lines:

i. Chief Justice of India or his nominee - Chairperson (with a

casting vote);

ii. A senior Judge of the Supreme Court or Chief Justice of High

Court - Member;

iii. Secretary in the Ministry of Finance and Company Affairs -

Member; and

iv. Secretary in the Ministry of Law and Justice - Member

f. The term of office of three years shall be changed to a term of seven

or five years subject to eligibility for appointrnent for one more term.

This is because considerable time is required to achieve expertise in

the concemed field. A tenn of three years is very short and by the

time the members achieye the required knowledge, expertise and

efficiency, one term will be over. Further the said term of three years

with the retirement age of 65 years is perceived as having been tailor-

made for persons who have retired or shortly to retire and encourages

these Tribunals to be treated as post- retiement havens. If these

Tribunals are to function effectively and efficiently they should be

able to attract younger members who will have a reasonable period of

servlce

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l7.The above guidelines were given by the Hon'ble Supreme Court based on

the following principles as enumerated in para 44 of the saidjudgment :-

A legislature can enact a law tmnsfening the jurisdiction exercisedI

by courts in regard to any specified subject (other than those which

are vested in courts by express provisions of the Constitution) to

any tribunal.

Il. All courts are tribunals. Any tribunal to which any existing

lurisdiction of couns is transferred should also be a Judicial

Tribunal. This means that such Tribunal should have as members,

persons ofa rank, capacity and status as nearly as possible equal to

the rank, status and capacity of the coun which was till then

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dealing with such matters and the members of the Tribunal should

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g. Any person appointed as members should be prepared to totally

disassociate himself from the Executive.

h. To maintain independence and security in service, suspension of the

President/Chairman or member of a Tribunal can be only with the

concurrence of the Chief Justice of India.

i. The adrninistrative support for all Tribunals should be from the

Ministry of t aw & Justice. Neither the Tribunals nor its members

shall seek or be provided with facilities fiom the respectiye

sponsoring or parenl Ministries or concemed Department.

j. Two-Member Benches of the Tribunal should always have a judicial

member. Whenever any larger or special benches are constituted, the

number ofTechnical Members shall not exceed the Judicial Members.

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have the independence and security of tenure associated with

Judicial Tribunals.

ltl Whenever lhere is need for'Tribunals', there is no presumption

that there should be technical members in the Tribunals. When any

jurisdiction is shifted fiom courts to Tribunals, on the ground of

pendency and delay in courts, and the jurisdiction so kansferred

does not involve any technical aspects requidng the assistance of

expens, the Tribunals should normally have only judicial members

Only where the exercise of jurisdiction involves inquiry and

decisions into technical or special aspects, where presence of

technical members will be useful and necessary, Tribunals should

have technical members. lndiscriminate appointment of technical

members in all Tribunals will dilute and adversely affect the

independence of t}re Judiciary.

The Legislature can re-organize the jurisdictions of Judicial

Tribunals. For example, it can provide that a specified category of

cases tried by a higher court can be tried by a lower court or vice

versa (A standard example is the variation of pecuniary limits of

courts). Similarly while constituting Tribunals, the Legislature can

prescribe the qualifications/eligibility criteria. The same is however

subject to Judicial Review. If the coun in exercise of judicial

review is of the view that such tribunalisation would adversely

affect the independence ofjudiciary or the standards ofjudiciary,

the court may interfere to preserye the independence and standards

of judiciary. Such an exercise will be part of the chccks and

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balances measures to maintain the separation of powers and to

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prcvent any encroachment, intentional or unintentional, by either

the legislature or by the executive."

l8.It is submitted that even though the Hon'ble Supreme Court has prescribed

the various guidelines in the decision ofR. Gandil (supra) with regard to the

constitution of the NCLT and NCLAT, the same stands applicable to all the

tribunals in India. The Is respondent while framing the Impugned Rules'

2017 has not comptied with the same, and has gone on to prescribe rules

with regards to qualifications, appointrnents and removal of lhe members

including the President/Chairperson €tc., as the case may be, with total

disregard to such guidelines and settled constitutional principles. For the

purpose of easy reference, such provisions in the Impugned Rules, 2017

which suffer from severe infirmities and run in contrary to the decision of

the Hon'ble Supreme Court are set out below:

Rule 4 (2) - Method of recruitment

The Secretary to lhe Governuent of India in the Minisfi orDeparlment under which the Tribunal, Appellate Tribunal or, as thecqse may be, Authority is co stituted or established shall be theconvener of the Search-cum -Seleclion Committee.

Rule 7. Removal oJ Memberfrom oflice.

The Central Government uay, on the recommendation of a Committeeconstiluted by it in this behalf, remove from otftce any Member, who--(a) has been adjudged qs qn insolye t; or(b) has been co,tricted of an offence which, in the opirion of theCertral Government, inyolves ,noral turpitude; or(c) has become physically or menally incapable of acting as such aMember: or(d) has acquired nrch financial or other interest qs is likely to afectprejudicially his functions as a Member; or(e) has so abused his position as to render his continaance in offceprejudicial to the public interest:Provided that where a Member is proposed to be removed on anyground specified in clawes (b) to (e), the Member shall be informed

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of the charges against him and given an opportunily of being heard inres pect of t hose c harges :Provided further thot the Choirperson or member of the NationalCompany Appellate Tribunsl shall be removed from ofice inconsultation with the ChiefJustice of lndia.

Rule 8. Procedure for inquiry of mkbehsvior or incspaci1t of theMember.

(1) Il a written complailt is receieed by the Central Govemment,alleging any definite charge of mkbehavior or incapdcity to performthe functions of the offce in respect of a Chairmon, Vice-Choirman,Chairperson, Vke-Chairperson, President, Vice-President, PresidingOficer, Accountant Member, Administrative Member, JudiciqlMeuber, Expert Member, Law Member, Revenue Member, TechnicolMember or Member, the Ministry or Departmenl of the Governmentof India under which the Tribunal, Appellate ?ibunsl or, as the casemay be, Authoiry is constituted or established, shall make apreliminary scrutiny of such complaint.(2) If on preliminary scrutiny, the Ministry or Department of theGovemment of India under which the Tribunal, Appellate Tribunal or,as the cqse uay be, Authority is constituted or eslablished, is of theopinion thqt there are reasonable grounds for making an inquiry intothe lruth of any misbehqvior or incdpacity o/ a Chairman, Yice-Chairman, Chairperson, Vice-Chairperson, President, Vice-President, Presiding Wcer, Accountant Member, AdminislrqtiveMember, Judicial Member, Expert Member, Low Member, ReverueMeuber, Technical Member or Meuber, it shall make a reference tothe Committee constituled under rule 7 to conduct lhe inquiry.(3) The Committee shall complete the inquiry within such time or suchfurther lime as may be speciJied by the Centrql Government.(4) After the conchsion of the inquiry, the Committee shall submit itsreport to lhe Cenlrql Government stal@ therein its findfugs and theressons therelor on each of the charges separately with suchobservations on the whole cose as it maythinkfit.

Rule 20. Power to relor.

Where the Central Goverament is of the opinion that it is necessary orexpedient so to do, il may, by order for reosons to be recorded inwriting relqx any of the proisions of these rules with respec, to anyclass or category ofpersons.

l9.Reference may also be drawn to column (4) ofthe Schedule to the Impugned

Rules, wherein primacy has been given to the executive by including more

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members fiom the Central Covernmenl as compared to the Judiciary in the

Search cum Selection Committees that is to be constituted for all of the 19

Tribunals and Appellate Tribunals, which is directly contrary to the

guidelines prescribed by the Hon'ble Supreme Court in the case of rR.

Gandhi (supra)

20.Further reference may be drawn to column (5) of Schedule wherein the

Central Govemment has further reduced the term of office of all the

members including the Presidents etc., to 3 years which again runs contrary

to the aforementioned guidelines set out in the case of r1. Gandhi (Supra)

21.With regards to column (3) of the Schedule, the following Tribunals suffer

from glaring infirmities with respect to the Qualification and Appointment

of the Chairperson, President, Presiding Officer and members as the case

may be:

Tribunals in which a Nor-Judicial member may becomc th€

President/Presidinp OIIicer or Chairman etc:

(a)lndustrial Tdbunal constituted by the Cenral Goverrunent

under the lndustrial Disputes Act, 19,17; (b) 'Ihe Customs,

Excise an Service Tax Appellate Tribunal under the Customs

Act, 19621' (c) Appellate Tribunal under the Smugglers and

Foreign Exchange Manipulators (Forfeiture of Property) Act,

19'16: (d't Central Administrative Tribunal under the

Administrative Tribunal Act; (e) Railways Claim Tribunal

under the Railway Claims Tribunal Act, 1987; (f) Debt

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Recovery Tribunal and the Appellate Tribunal under the

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Recovery ofDebts Due to Banks and Financial lnstitutions Act,

1993; (g) Airport Appellate Tribunal under the Airpon

Authority of India Act, 1994; (h) Telecom Disputes Settl€ment

and App€llate Tribunal under the Telecom Regulatory

Authority of India Act, 1997; (i) Appellate Board under the

Trade Marks Act, 1999; (j) Authority for Advance Ruling

under the Income Tax Act, 1961; (k) Film Certiflcation

Appellate Tribunal under the Cinematogmph Act, 1952; (l)

National Consumer Disputes Redressal Commission under the

Consumer Protection Act, 1986; (m) Appellate Tribunal for

Electricity under the Electricity Act, 2003; (n) National Green

Tribunal under the National Green Tribunal Act, 2010

22.The Petitioner association is concemed about the independence ofjudicial

tribunals and seeks to protect the same and hence, is filing the present writ

petition under Article 226 of the Constitution of India as public interest

litigation.

23.1t is further submined that the Petitioner has not filed any other petition

seeking sirnilar relief before any High Court or this Courl. The petitioner has

diectly filed a petition under Article 226 of the Constitution as the

50. The right to life under Article 2l includes the right to justice by an

independent judiciary and by a Tribunat which is free from executive or

political inlluence. The Association is vitally concerned with the

administration ofjustice and maintenance of rule oflaw which has been held

to be pan ofthe basic structure ofthe Constitution

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impugned provisions and Rules are arbitrary and violative of A.rticle 14 and

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24.The glaring infirmities and consequences to the independent judicial

administration ofthe yarious tribunals and appellate tribunals has compelled

the present Petitionff association to file the present writ petition under

Article 226 of the Constitution of lndia on the following amongst other

grounds

GROUNDS

A. The Constitution of tndia distinguishes between an Ordinary Bill, a

Money Bill and a Financial Bill. A Money Bill as per Article 110(l) is a

Bill which contains ozly provisions dealing with all or any of the

following matters, namely-

(a) the imposition, abolition, remission, alteration or regulation of any

tax; (b) the regulation of the bo[owing of money or the giying of any

guarantee by the Goyemment of lndia, or the amendment ofthe law with

respect to any financial obligations undertaken or to be undertaken by the

Goyemment of lndiat (c) the custody of the consolidated Fund or the

Contingency Fund of India, the payment of moneys into or the

withdrawal of moneys from any such Fund; (d) the appropriation of

moneys out of the consolidated Fund of India; (e) the declaring of any

expenditure to be expenditure charged on the Consolidated Fund of India

or the increasing of the amount of any such expenditure; (f) the receipt of

money on account of the Consolidated Fund of lndia or the public

account of lndia or the custodv or issue of such monev or the audit of the

accounts ofthe Union or ofa State; or (g) any matter incidental to any of

the matt€rs specifred in sub-clause (a) to (0. In view of Article I l7(1), a

Bill which makes provisions for any ofthe abovementioned matters, and

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additionally with any other matter is called a Financial Bill. Therefore.

the Finance Bilt, 2017 may be a Money Bill if it deals only with the

matters specified above, and not with any other extran€ous matter as

otherwise it would be categorised as a Financial Bill

With regard to the Finance Bitl,2017, since the Rajya Sabha does not

possess co-ordinate power with Lok Sabha in case of a Money Bill, the

Lok Sabha has effectively bypassed the Rajya Sabha by voting the same

as a Money Bill, which in essence is a Financial Bill in light of the

various amendments carried out in addition to the matters specified in

Article I l0(1), and hence ceasing it to be a Money Bill.

ln other words, the Lok Sabha has firstty certified a Financial Bill as a

Money Bill and thereafter adopted the special procedure laid down for

Money Bills in Article 107 of the Constitution and effectively negating

any son of interference from the Rajya Sabha and Council ofStates

It is thus submitted that when proceedings which are tainted on

account of substantive illegality or unconstitutionality, the same cannot

be immune from judicial scrutiny and review. Since the Finance Bill,

2017 was wrongly voted as a Money Bitl despite the fact that it is not, the

passing of the Finance Bill, 2017 is illegal, invalid and a fraud on the

Constitutior

B. lt is submitted that by empowering the Central Govemment to frame

Rules in relation to the appointment, qualifrcation and removal and other

terms of seryices of members of tribunals, there is an excessiye

delegation of legislative functions without placing any guidelines and is

atso violatiye of Afiicles 14 and 50 of tle Constitution of India. As per

the parent legislations under which the Tribunals were established, any

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amendment with regards to the qualifications, appointments and removal

and other terms of service was to be carried out by the Parliament

However, in terms of section 184 of the Finance Act, the Parliament has

abdicated its authority by empowering the Central Govemment to fiame

new Rules and amend the same by way ofNotification. This amounts to

delegation of essential judicial functions that is unconstitutional. This

also amounts to the granting of an uncanalised power to the executive to

control vital bodies that perform, in essence, judicial functions. On this

ground, s 184 of the Finance Act, 2017 deserves to be shuck down on the

ground of Article l4 for arbitrariness as well

C. lt has been repeatedly held that a requircment ofplacing Rules framed by

the Executive before the Parliament indicates a check on excessive

delegation and in the absence of such a provision in the Finance Act and

the Impugned Rules, Section 184 ought to be struck down.

D. The present Finarce Act, 2017 insofar as it amends the structure and re-

organisation ofvarious Tribunals including the 19 Tribunals set out in the

Schedule of the lmpugned Rules, 2017 is unconstitutional and violalive

of the basic stucture of the Constitution. The impugned provisions and

the Impugned Rules,2017 violate the principles of separation of powers

which is nol only part of basic structure but also ar elementary

component of the rule of law. That it Kesavqnqnda Bharati v.. State ofKerala, AIR t973 SC 1461 ald, in Minerva Mills Ltd. v. Union of India,

(t980) 3 SCC 625, larger benches of this Hon'ble Coun have held,, inter

alia, that an independent judiciary and it's power ofjudicial review are

among the basic features ofthe Constitution.

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E. A Constitution Bench in S. P. Saupath Kumar v. Union of lndia, (1987)

I SCC 124 at para 7, speaking through Bhagwati, CJ, has held that,

"It can no longer be disputed that total insulation of the judiciarylrom all forns of interference from the co-ordinate branches of theGovernment is q basic essentiql feature of the Constitution, thesame independence lrom possibility of Executive pressure orinfluence must also be ensured to the Chairmdn, vice Chairmanand Members of the Adninistratiye Tribunols... The Constin onmqkers hqye made atuious provision to secure total independenceof the judiciary from executive pressure or influence."

the constihrtional scheme of separation of powers can be €asily and

seriously undermined, if the legislatures were to entrust the Tribunals

with Members not being Members of the 'Judicial service' of the State

as they are not entitled to protection similar to the constitutional

F. That if the constitutional Scheme and intent are to be preserved, it must

be held that the 'total insulation ofthe judiciary' referred to in the case of

S. P. Sampath Kumar v. Union of India, (1987) I SCC 124 is not just for

the 'judiciary' comprising ofJudges appointed to the regular Courts. The

'judiciary' in this context must be undeNtood as taking within its fotd, all

courts and Tribunals and other adjudicatory bodies, whatever be the label

assigned to them. The independence and impartiality which are essential

for the proper exercise of the judicial power, are to be secued not only

for the Courts but also for Tribunals and their members, who, though

they do rot belong to the 'Judicial Service' are entrusted with judicial

powers. Any other view would effectively eviscerate the constitutional

guarantee ofan independent Judicial Branch.

Page No. 20No. of Conecrions

That the constitutional guamntee of an independent judicial branch and

protection afforded to the Courts.

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G. It is submitted that the safeguards which ensure independence and

impa.rtiality are not for promoting personal prestige of the functionary but

for preserving and protecting the rights ofthe citizens and others who are

subject to the jurisdiction of the Tribunal, and for ensuring that such

Tribunals will be abl€ to command the confrdence ofthe public.

H. It is further submitted that several safeguards to protect the independence

of the judiciary mentioned in n. Gandhi (*pn) have not been followed.

Reference may be drawn to column (4) of the Schedule to the Impugned

Rules, wherein primacy has been given to the executiye by including

more members from the Central Govemment as compared to the

Judiciary in the Search cum Selection Committees in all of the t9

Tribunals and Appellate Tribunals. As per the guidelines prescribed by

&e Hon'ble Supreme Court in the case of R.Gqndhi (Supra), the Search-

cum-Selection Cormittee must be comprised of only 5 members viz.

ChiefJustice of lndia or his nominee - Chairperson (with a casting vote);

A senior Judge of the Supreme Court or Chief Justice of High Court -Member; Secretary in the Ministry of Finance and Company Affairs -

Member; and Secretary in the Ministry of Law and Justice - Member.

I. The Hon'ble Supreme Court had laid down that when judicial powers are

transfened from the Courls to Tribunals, the standard of the Tribunals

should approximately be the same as that of the Courts. The Impugned

Rules relating to fte appointmont of the Members are in viotation of this

principle laid do*n by this Court. It is shocking that the lmpugned Rules,

2017 r]rJt only provides for a Non-Judicial Member to become a

Cha@erson or President of a Tribunal, further, there is no requirement

for an appoinbnent ofa Judicial Member in many of the Tribunals whichPage No. 2lNo. of Conections

Bar & Bench

runs dircctly contmry to various decisions of the Hon'ble Supreme Court

and High Courts in India.

J. ln several Tribunals, as per the parent act under which it v/as established,

the removal of any member cannot be made unless there is an inqutry by

a Judge of the Supreme Court and any removal of a member ought to

have the concurrence of the Chief Juslice of India. Shockingly' the

removal procedure under Rule 7 and 8 of the said Rules now

contemplates an inquiry by a committee formed by the parent ministry

under which the Tribunal functions and based on the findings and

recommendation of such inquiry committee, the Central Govemment has

the right to remove the member from the Tribunal. This effectively would

mean, a High Court Judge who is a Chairperson or Vice President of the

Tribunal can be removed by the Central Govemment aft€r an inqutry by

the parent ministry which is a complete breach of Article 50 which

emphasizes that the State shall take steps to separate the judiciary from

the executive in the public services ofthe State.

K. Article 50 of the Constitution is part of the basic structure of the

Constitution, and is one example of a specific constitutional provision

embodying the basic features of separation of powers and rule of law.

The Impugned Rules directly encroach into these basic features and

derogate fiom the same by vesting unbridled powers in the Executiye

while constituting and fxing the terms and conditions of members in the

judicial bodies such as the tribunals listed out in the Schedule to the

Impugned Rules. For instance, the leave sanctioning authority in case of

the Chairperson vests with the Ceutral Govemment. Similarly, the final

deciding authority over the terms and conditions of service for the Board

Page No. 22No. of Corrections

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vests with the Cenfal Governrnent, thereby predominating the Executive

involvement in the functioning ofan adjudicatory body.

L. ln merging of various tribunals with one another, for instance, the

M. That under the lmpugned Rules, the administratiye assistance and support

to all the tribunals is to be provided by the parent ministry. This is

dircctly contrary to the guidelines prescribed by the Hon'ble Supreme

Court in the case of R. Gundhi (s,Jpra), wherein this Cout had

categorically held that the administrative support has to come from the

25.The petitioner craves leave ofthis Hon'ble Court to raise additional grounds

at the time of hearing.

26.The petitioner has not filed any other writ p€tition or any other legal

proceedings seeking the reliefs claimed in the pr€sent writ petition. The

petitioner has no altemative or efficacious remedy except to invoke the writ

jurisdiction of this Hon'ble Court under Article 226 of the Constitution of

India. The petitioner is self-funded in the filing and the conduct of this writ

petition. To the best of the petitioner's knowledge, no other writ petition has

been field for these reliefs

Page No. 23No. of Correcrions

Airports Economic Regulatory Authority Appellate Tribunal and the

Cyber Appellate Tribunal with the Telecom Dispute Settlement and

Appellate Tribunal, the qualifications prescribed in the Impugned Rules,

for appointnent of members of the Telecom Dispute Settlem€nt and

Appellate Tribunal does not require a member to possess an expertise on

cyber laws which is contrary to the obs€rvation by the Supreme Court

that a Technical Member shall be an expert in the held of the Tribunal.

Department of Law & Justice.

Bar & Bench

27.The petitioner has a prima facie case as the effect of sections 156 to 189 of

the Finance Act,20l'1 as well as the Impugned Rule, 2017 are against the

very essence of the principles of judicial independence and separation of

powers that not only does the Central Govemment holds primacy in the

appointnent of memben of such Tribunals but persons with no judicial

experience or formal training in law are statutorily envisaged to adjudicate

on issues of law. Post the judgment of the Hon'ble Supreme Court in the

case ofn. Gandhi (Supra), there is no justif,cation whatsoever to continue

such practice.

28.It is further submitted that irreparable hardship will be caused to the vast

number of litigants if the members of the Tribunals, appointcd in accordaace

to the Impugned Rules, 2017 which have been fiamed in the most

constitutionally improper manner, are permitted to adjudicate on issues

involving complicated questions of law and worth crores in terms of

frnancial stakes.

29.The Petitioner therefore submits that the operation of sections 156 to 189 of

the Finance Act,2017 and the Impugned Rules,2017 must be immediately

stayed failing which irreparable loss, grave prejudice and irreversible

hardship would be caused to all the Litigants who are before such Tribunals.

30.It is therefore prayed that this Hon'ble Court may be pleased to pass an order1' of stay of the operation of the Part XIV of Chaptff VI of the Finance Act,

2017 more particularly sections 156 to 189 ofthe Finance Act, 2017 pending

disposal of the present Writ Petition and pass such further orders as this

Hon'ble may deem fit and necessary in the facts and circumstances of the

case and thus render justice.

T\\L\pt1

Page No. 24No. of Conections

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3l.It is therefore prayed that this Hon'ble Court may be pleased to pass an order

of stay of the operation of 'The Tribunal, Appellate Tribunal and other

Authorities (Qualifications, Experience and other Conditions of Service of

iaMembers) Rules, 2017' framed by the ls Respondent vide Notification dated

01.06.2017, in temrc of section 184 of the Finance Act, 2017 pending

disposal of the present Writ Petition and pass such further orders as this

Hon'ble may deem fit and necessary in the facts and circumstances of the

case and thus render justice.

32.It is therefore prayed that this Hon'ble Court may be pleased to issue any

Writ, order or direction more particularly in lhe nature of a Writ of

declaration to declare Part xIV ofcbapter VI of the Finance Act, 2017 more

particularly sections 156 to t89 which relate to the 'Amendments To Certain

.ro

r7Acts To Provide For Merger Of Tribunals And Other Authorities And

Conditions Of Service Of Chairpersons, Members, Etc.' as ultrq vires

Article, 14, 50 and I l0 ofthe Constitution of India and pass such fufiher or

other orders as this Hon'ble Court may deem fit and necessary in the facts

and circumstances ofthe case and thus renderjustice.

33.1t is therefore prayed that this Hon'ble Coun may be pleased to issue any

t'?

Writ, order or direction more particularly in the nature of a Writ of

declaration to declare the consequential Rules vrz. '*" f.i5.nal, Appellate

Tribunal and other Authorities (Qualifications, Experience and other

Conditions of Service of Members) Rules, 2017' framed by the l'l

Respondent vrde Notification dated 01.06.2017, in terms of section 184 of

the Finance Act, 2017 as void, defective and unconstitutional, being

violative of the doctrine of separation of powers and independence of

judiciary which are parts of the basic structure of fte Constitution and

Page No. 25No. of Couecrions

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further contmry to the principles taid down by the Hon'ble Supreme Court in

Union of India v R. Gandhi, (2010) I 1 SCC I and pass such further or other

orders as this Hon'ble Court may deem fit and necessary in the facts and

circumstances ofthe case and thus render justice.

Solemnly aflirmed at Chennai on

this 14&r of June, 2017 and

signed his trame in my presence. ADVOCATE. CHENNAI

Page No. 26No. ofCorrecuons

Ira

BEFORE ME

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IN THE HIGH COURT OFJUDICATURE AT MADRAS(SPECTAL ORIGINAL

JURISDICTION)w.P. NO. -OF 2017

rsryy

Madras Bar Association

...Petitioner

Vs.

l.Union oflndia,Ministry of Finance.

2. Union oflndia,Represented by its Secretary.

Respondents

Co*" n AFFronr' r'i-

COUNSEL FOR THE, PETITIONER

M.V. SWAROOP

H.S. HREDAI

V. PRASHANTH KRIAN

RAHUL UNNIKRISHNAN

Bar & Bench